LCS 3 on hold due to escalating costs

Navy Issues Stop Work Order for Littoral Combat Ship 3 Announced

When the government notices that costs are out of control, you know that they’re REALLY out of control:

The Navy has issued a stop work order today to Lockheed Martin Corp. Maritime Systems & Sensors unit, Moorestown, N.J., for the construction of the third Littoral Combat Ship (LCS). This stop work order will take effect immediately and is for a period of 90 days.

The stop work order was issued because of significant cost increases currently being experienced with the construction of LCS-1 and LCS-3, under construction by Lockheed Martin.

“I determined that at this point in time it was critical to stop work on LCS-3 to assess the LCS program and ensure we understand the program’s cost and management processes before we move forward. It is essential that we complete LCS 1 and get it to sea so we can evaluate this new ship design” said Secretary of the Navy Donald Winter.

The Navy is working closely with the contractor to identify the root cause of the costs growth. The Navy is reviewing the overall acquisition strategy for the LCS program and is working closely with the contractors to keep this program on track.

LCS 1 USS Freedom was launched in September.

LCS 1 and LCS 3 are the monohull Littoral Combat Ships. LCS 2 and LCS 4 are trimarans built by General Dynamics. We keep hearing about how the costs for the LCS program are growing, but I’ve not been able to learn whether one program or the other was having greater trouble. I think maybe we might know the answer to that now.

The monohull Littoral Combat Ships will probably be better suited to the open sea while the tirmarans will probably have a number of advantages real close in. Though Littoral Combat Ships, of course, are designed for the littoral, I’ve wondered if maybe keeping both designs might not make sense.

Of course, if one design is a rip-off we don’t need it.


  1. Without any knowledge on the subject, I can already predict the cause of the cost escalation. Lockheed Martin – to paraphrase Reese ‘ Listen and understand! Lockheed Martin is out there. It can’t be bargained with, it can’t be trusted or reasoned with. It doesn’t feel shame or remorse or fear, and it absolutely will not stop-EVER, until we all broke.’

  2. Well, if it turns out that the Lockheed Martin design is the one not working and the trimaran is keeping (close) to cost, I guess it would sort of validate the large parts of the ‘competition’ theory, wouldn’t it? Imagine that.

  3. This looks like the usual contractor ploy, doesn’t it? They are reducing the production quantity to cover the development over run. It appears to be the same ploy they used with the F-22 for years. Remember when we were going to buy 700 of those? Now it’s down to about 170. Do you think they gave any money back when they did that? Hell no! Once the contractors realized that they were making more money off of development than production that became their approach. Drag out development and cut production to make more profit. Why blame Lockheed for trying to make money? What are you, a damn communist? It’s your government that pays them more to screw up than to succeed. If you’re dumb enough to elect people to put a system like that in place, you get what you deserve.

  4. I remember reading that the guy who founded the Skunk Works did not like working with the Navy; said the way they kept tweaking requirements and so forth made it a pain in the ass to get the job done. Have to wonder if that could be a part of it.

  5. Kelly’s Rules Rule Number 1 The Skunk Works’ program manager must be delegated practically complete control of his program in all aspects. He should report to a division president or higher. Rule Number 2 Strong but small project offices must be provided both by the military and industry. Rule No. 3 The number of people having any connection with the project must be restricted in an almost vicious manner. Use a small number of good people (10 percent to 25 percent compared to the so-called normal systems). Rule No. 4 A very simple drawing and drawing release system with great flexibility for making changes must be provided. Rule No. 5 There must be a minimum number of reports required, but important work must be recorded thoroughly. Rule No. 6 There must be a monthly cost review covering not only what has been spent and committed but also projected costs to the conclusion of the program. Don’t have the books ninety days late and don’t surprise the customer with sudden overruns. Rule No. 7 The contractor must be delegated and must assume more than normal responsibility to get good vendor bids for subcontract on the project. Commercial bid procedures are very often better than military ones. Rule No. 8 The inspection system as currently used by the Skunk Works, which has been approved by both the Air Force and the Navy, meets the intent of existing military requirements and should be used on new projects. Push more basic inspection responsibility back to the subcontractors and vendors. Don’t duplicate so much inspection. Rule No. 9 The contractor must be delegated the authority to test his final product in flight. He can and must test it in the initial stages. If he doesn’t, he rapidly loses his competency to design other vehicles. Rule No. 10 The specification applying to the hardware must be agreed to in advance of contracting. The Skunk Works practice of having a specification section stating clearly which important military specification items will not knowingly be complied with and reasons therefore is highly recommended. Rule No. 11 Funding a program must be timely so that the contractor doesn’t have to keep running to the bank to support government projects. Rule No. 12 There must be absolute mutual trust between the military organization and the contractor with very close liaison on a day-to-day basis. This cuts down misunderstanding and correspondence to an absolute minimum. Rule No. 13 Access by outsiders to the project and its personnel must be strictly controlled by appropriate security measures. Rule No. 14 Because only a few people will be used in engineering and most other areas, ways must be provided to reward good performance by pay, not simply related to the number of personnel supervised. Rule No. 15 Never deal with the Navy. You can’t find these anywhere at Lockheed today. They’ve ignored these for so long, they’ve become heresy. My personal favorites are #3, #12, and #14. Hell, they not only don’t observe Kelly’s Rules when it comes to management, they don’t observe his rules when it comes to aerodynamics either. The clunky F-22 and F-35 designs are proof of that. You’d think they’d learn something from the SR-71 experience. In the Navy’s defense, the F-22 is an Air Force program and they’re playing the same game, cutting production numbers to make more profit by dragging out development. It’s the same game with different players. They all do it. On F-35, they’re all doing it together. The principles of capitalism work. You can either use them to get what you want, or you can get screwed over by them as we choose to do. The founding fathers of this nation would be so proud…

  6. Before you bash the Lockheen Martin Monohull design, listen once. I’ve worked on LCS 1. Although I’ve taken an oath to keep secrets secret, public info is fair game. Here’s the scoop. The Navy itself issued the stop work order, not Congress as some people think. It’s only a 90 day stop work order, and only for LCS 3. All of this because LCS 1 is way above the estimated price. They want to know exactly why it’s more and where it’s more, and by how much. Before you blame Lockheed for that, hear the facts. Lockheed Martin bid the contract at something a little over 200 million each. That price was for building the ships according to the U.S. Shipbuilding standards. The Navy knew that. The Navy awarded the contracts. Then the Navy proceeded to give Lockheed Martin new Navy shipbuilding standards to build the ship with. L/M had to scrap most of their plans and develop this boat on the go to get it done on time. Also the new standards required more man hours than the old standards, again, that the bid was placed in accordance to. The Navy should’ve asked for new bids, but work was already started. The current ‘guesstimate’ was reported to be something between 330 and 411 million. The steel for the hull is the same high strength steel that they use to armor humvee’s/tanks, etc, and they had a hard time finding enough in time, but it was found. The trimaran of General dynamics is ALUMINUM. How hard is it for a bullet to pierce aluminum vs. armored steel? Also, the main transmissions for the Monohull were built incorrectly, and had to be rebuilt, by a European vendor, setting the project back by I think 5 months. It’s a quality vessel, that WILL perform, I’m sure of it. I am not a higherup at L/M or anything, just a shipbuilder explaining how these costs can come up. I blame the Navy for most of it. I’ve gotten nothing but good out of the L/M people I’ve dealt with. This is a prototype vessel, with it’s own inherent initial problems, and the Navy compounded that with this switcheroo of building rules. I’m glad the rules are changed, as it will make a stronger ship, but they should’ve rebid them after. They’re trying to cover their own ass. Also, the Navy really, really, wants these ships, and I think they’ll get them. Would LOVE to go on sea trials.