In the Gulf, Looking for a Few Good Small Ships: The Ticker
If Iran actually tried to shut down the Strait of Hormuz, a U.S. squadron of small, speedy and versatile ships that could operate close to shore might come in handy. Too bad the U.S. Navy doesn't have any.
Actually, that's not exactly right. More than a decade after the Navy announced that it would build the so-called Littoral Combat Ship -- intended to hunt submarines, clear mines, thwart speedboat attacks and insert special forces close to shore -- we have two of them. The first developed a crack in its hull; the other, severe corrosion near its propulsion system. At well over $500 million apiece, they cost more than twice their original estimate of $215 million. Various weapons systems seem unlikely to work as advertised. And as a Pentagon report delicately put it last December, they are “not expected to be survivable in terms of maintaining a mission capability in a hostile combat environment.”
How did a good idea turn into another poster child for dysfunctional military procurement? Start with the Navy’s rush to build the ship. It wanted to put what was a relatively new concept into operation in about half the time that a new ship design normally makes its way from the drawing board to the fleet. That would be commendable, except a 2004 Congressional Research Service report speculated that this “rapid acquisition schedule” was being driven “less by operational urgency than by other considerations,” like getting the program going before a potential change in administration, the arrival of a new Chief of Naval Operations and a thorough vetting by Congress.
Construction went ahead even before all the basic design drawings were completed. Now, to build the full complement of 55 ships for an estimated $37.4 billion, the Navy has decided to go with two separate designs and two contractors, Lockheed Martin Corp. (LMT) (LMT) and General Dynamics Corp (GD) (GD). More competition equals lower prices, right? Not necessarily, according to the Congressional Budget Office -- but the dual contracts will make more congressional delegations happy and avert a bruising protest by a losing bidder.
Two weeks ago, Senator John McCain took to the Senate floor to decry what he called the "Military-Industrial-Congressional" complex, citing the littoral ship program as "another example of a fundamentally flawed acquisition process." Since 1997, according to the Government Accountability Office, about one-third of all major weapons programs have had cost overruns of as much as 50 percent. In an age when cheap, off-the-shelf technologies are used to produce everything from roadside bombs to homemade drones, that's an inefficiency the U.S. can no longer afford. Remarkably, the Pentagon hasn't even come up with a formal estimate for the total cost of the program for building what was supposed to be a relatively inexpensive, commercially derived vessel. Maybe the Iranians will let us borrow some of their speedboats.
(James Gibney is a member of the Bloomberg View editorial board.)