S.Amdt. 2340

1. Adds SEC. 125. SENSE OF SENATE ON THE LITTORAL COMBAT SHIP PROGRAM at the end of subtitle C of title I

   Adds a section

   In S. 1197 · Placed on Calendar Senate

   (c) Form.--The report required by subsection (a) shall be submitted in classified form and unclassified form.

   Inserted: SEC. 125. SENSE OF SENATE ON THE LITTORAL COMBAT SHIP PROGRAM.

   Inserted: (a) Findings.--The Senate makes the following findings:

   Inserted: (1) Despite early problems with the Littoral Combat Ship (LCS) program, the Navy has made substantial progress in getting production on schedule and costs under control. As a result, the Navy is now purchasing LCS below the congressionally mandated cost cap. According to congressional testimony provided by Assistant Secretary of the Navy (Research, Development and Acquisition) Sean Stackley on July 25, 2013 before the Subcommittee on Seapower and Projection Forces of the House Armed Services Committee, "The average cost of both LCS variants--including basic construction, government-furnished equipment (GFE), and change orders--across the 10-seaframe procurement over the five year period falls under the Congressionally-mandated cost cap of $480 million per seaframe (FY 2009 dollars)". This testimony is consistent with the findings in the Congressional Budget Office's October 2013 report entitled "An Analysis of the Navy's Fiscal Year 2014 Shipbuilding Plan" which states: "In the 2014 Future Years Defense Program, the Navy estimated the average cost of the LCS at about $420 million per ship over the next five years, including the 6 ships (2 per year) to be bought in 2016 through 2018, after the end of the two 10-ship contracts. That figure is well below the Congressionally mandated cost cap for the LCS program of $515 million per ship (adjusted for inflation). Overall, the Navy estimated that the 36 LCSs to be purchased by 2026 would cost about $446 million per ship, on average". Finally, according to the Department of the Navy, LCS is "the only shipbuilding program wherein the unit cost in production is on a marked steady decline".

   Inserted: (2) LCS is vital to the Navy and our national security. According to Secretary of the Navy, Ray Mabus, it is "the future of the Navy and the future of how we fight". Similarly, Assistant Secretary of the Navy Stackley, in his written testimony for Congress observed: "[T]he LCS program is of critical importance to our Navy. With its great speed and interchangeable modules, the ship will provide unprecedented warfighting flexibility. LCS is one of the cornerstones of the future Navy, and provides critical capability to the fleet. This fast, agile, focused-mission platform is designed for operation in near-shore environments, yet is capable of open-ocean operation".

   Inserted: (3) The LCS program is an essential element of the Navy's long-term shipbuilding strategy which directly supports warfighting and presence requirements articulated by the combatant commanders. The planned buy of 52 LCS supports strategic and operational requirements validated in the Navy's 2012 Force Structure Assessment (FSA) pursuant to the January 2012 defense strategic guidance document entitled "Sustaining U.S. Global Leadership: Priorities for 21st Century Defense". According to the Department of the Navy, "LCS and associated mission modules replace the capabilities of frigates (FFGs), mine countermeasure (MCM) ships, and patrol craft (PCs) which are reaching [the end of their] expected service life". Additionally, according to the Navy, "delaying procurement of these ships would slow both the delivery of this critical capability to the fleet [and] progress toward the 300-ship target in FY 2019 and the ultimate goal of meeting a 306 ship force structure required to support validated . . . warfighting and presence requirements". Similarly, as noted in congressional testimony provided by Ronald O'Rourke of the Congressional Research Service (CRS), "If the LCS program were truncated to 24 ships or some other number well short of 52, a potential key issue [for Congress] would be the operational implications for the Navy of potentially not having sufficient capacity to fully perform the LCS's three core missions of countering mines, small boats, and diesel submarines, particularly in littoral waters".

   Inserted: (4) The cost for all LCS seaframes under contract (FY 10-13 ships) will increase if the current block buy contracts are disrupted. According to the Department of the Navy, costs will increase "due to the impact of lost workload, inefficiencies, and breakage to the vendor base". Additionally, negotiated ship construction prices will be lost for FY 14 and FY 15 ships. Moreover, FY 15 competitive prices will be required to be renegotiated in a sole source environment which will likely result in significant increases to FY 15 ship pricing. Slowing or pausing the program will also likely result in additional costs to future ships as a result of lost learning in the shipyards, increased overhead, vendor pricing, and concerns about contract stability. Finally, disrupting the current block buy contracts could potentially cause extreme damage to the shipbuilding industrial base.

   Inserted: (5) Many first-of-class ships experience unanticipated challenges, setbacks, and, as a result, intense scrutiny and sometimes harsh criticism. According to the Secretary of the Navy, Ray Mabus, "the first of every single class in our Navy has faced similar issues and has been strengthened by dealing with them". Similarly, according to congressional testimony provided on October 23, 2013 by CRS analyst Ronald O'Rourke, "In the midst of criticisms of certain Navy surface ship acquisition programs in the 30-year shipbuilding plan, [such as the LCS program], on issues such as cost growth, ship capabilities, construction-quality, and testing of combat system equipment, it can be helpful to recall, as a matter of providing some historical context, that a number of earlier Navy surface combatant acquisition programs--including some, like the DDG-51 program, that are today considered acquisition success stories--were themselves criticized on one or more of these grounds". For example, in January 1990, the Government Accountability Office (GAO) criticized the DDG-51 Arleigh Burke destroyer program in their report to the Secretary of Defense, "Navy Shipbuilding: Cost and Schedule Problems on the DDG-51 AEGIS Destroyer Program", noting that the shipyard had originally "encountered problems in designing and constructing the lead ship. The contract costs have increased substantially, and the ship will be about 17 months late. Since the lead ship is only 50 percent complete, additional problems could surface and delay the follow ships." Additionally, the GAO recommended "that the Secretary of Defense ensure sufficient information exists to justify the award of contracts for follow ships beyond the seven now under contract". Nevertheless, the Navy went on to successfully build a total of 62 of these destroyers since the program's inception with an additional 13 ships planned (under construction, on contract, or covered by awarded contracts).

   Inserted: (6) The Government Accountability Office's July 2013 report, "Navy Shipbuilding: Significant Investments in the Littoral Combat Ship Continue Amid Substantial Unknowns about Capabilities, Use, and Cost", overstates the significance of design changes to follow-on ships. As noted by Assistant Navy Secretary Stackley in his July 2013 testimony before Congress, "No changes to LCS seaframe requirements are envisioned in the near term as both LCS classes meet Navy requirements". Further, as the Department of the Navy has stated, "The issues and corrective efforts discussed [in the GAO report] are consistent with all lead ships of any new class of surface combatants, or any lead ship of a new class. Other 'new, potentially significant seaframe design changes' mentioned [in the GAO report] as under consideration by the Navy would--if accepted by the Navy--be incorporated into the next procurement (LCS 25 and follow), as is standard practice in all shipbuilding programs".

   Inserted: (7) The GAO's concern with concurrency in the development and fielding of LCS mission modules is misplaced. As Assistant Navy Secretary Stackley has explained in his congressional testimony before the House Armed Services Committee, "The modular strategy for mission packages is a breakthrough concept for delivering cost effective capability by employing mature technologies to meet today's warfighting requirements while also providing tremendous flexibility to rapidly employ developing technologies to counter emerging threats or otherwise close gaps today, and in the future. . . In order to deliver these capabilities in the capacity needed, and with an eye on controlling cost and risk, the Navy is employing an incremental fielding strategy wherein the first increment leverages mature technologies and existing programs of record to provide a level of performance exceeding that available in the fleet today". Moreover, Assistant Secretary Stackley made clear that "[t]his incremental approach minimizes concurrency risk while allowing the flexibility which the modular concept provides. . . This time-phased fielding of capability is fundamental as it allows the Navy to rapidly field systems as they are matured instead of waiting for the final capability delivery. The major systems that comprise mission packages are already established as individual programs, with their own Acquisition Program Baselines (APBs) including cost, schedule and performance objectives and thresholds".

   Inserted: (b) Sense of Senate.--It is the sense of the Senate that--

   Inserted: (1) chief among the mandates of the Navy is forward presence;

   Inserted: (2) operating forward overseas is critical to United States national security and the preservation of United States national interests;

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   Inserted: (3) to achieve this forward presence, the size of the Navy fleet matters;

   Inserted: (4) the Littoral Combat Ship (LCS) will be a critical component of the overall size of the Navy fleet and, without it, the Navy will not be able to provide the capabilities or capacity that operational commanders require;

   Inserted: (5) the capabilities of the Littoral Combat Ship remain essential to operational commanders;

   Inserted: (6) Littoral Combat Ship vessels, together with their mission modules, form a key part of the long-range shipbuilding strategy of the Navy to meet force structure requirements in support of the January 2012 defense strategic guidance document entitled "Sustaining U.S. Global Leadership: Priorities for 21st Century Defense";

   Inserted: (7) the Navy should continue to plan on procuring 52 Littoral Combat Ship seaframes in accordance with its most recent long-range shipbuilding plan, while balancing available funding with achieving the lowest possible pricing to the Government;

   Inserted: (8) the progress of the Navy in answering the concerns of the July 2013 report of the Government Accountability Office, entitled "Navy Shipbuilding: Significant Investments in the Littoral Combat Ship Continue Amid Substantial Unknowns about Capabilities, Use, and Cost", has been noteworthy and adequate;

   Inserted: (9) the report on the Littoral Combat Ship referred to in paragraph (8), while detailed and substantive, contains recommendations that do not reflect a full and thorough understanding of the Littoral Combat Ship program;

   Inserted: (10) the Navy should be applauded for its decision to deploy U.S.S. Freedom (LCS 1), a research and development funded platform, early and with a surface warfare (SUW) mission package to gather helpful information and lessons learned in order to better inform the development of operational, manning, maintenance, and logistics support concepts;

   Inserted: (11) the Navy should be commended for the ongoing and rigorous testing of the mine countereasures (MCM) mission module being conducted by U.S.S. Independence (LCS 2)--another research and development funded platform--and the recent successful completion of the second phase of developmental testing of the SUW mission package by U.S.S. Fort Worth (LCS 3);

   Inserted: (12) the Navy must continue to endeavor to drive overall Littoral Combat Ship program costs down;

   Inserted: (13) the Navy must inform the future procurement strategy with thorough assessments, which are based on validated requirements and independent cost estimates and which include program thresholds and objectives for cost, schedule, and performance;

   Inserted: (14) future acquisition decisions on the Littoral Combat Ship should be informed with an up-to-date service cost position and "should cost" assessment;

   Inserted: (15) the Defense Acquisition Executive should determine whether a new Office of the Secretary of Defense (OSD) Cost Analysis and Program Evaluation (CAPE) independent cost estimate (ICE) will be needed to inform future Littoral Combat Ship program decisions; and

   Inserted: (16) the Navy, along with the Joint Staff, should conduct a requirements assessment study to serve as a revalidation of the Littoral Combat Ship capabilities definition document.

   Original wording

   At the end of subtitle C of title I, add the following:

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As printed