WASHINGTON, D.C. — The Trump Administration is “supportive” of buying two Littoral Combat Ships in Fiscal Year 2018 despite the federal budget request containing funding for only one, the Navy’s acting acquisition chief said this afternoon.
Allison Stiller told the House Armed Services seapower and projection forces subcommittee today that “the administration recognizes the criticality of our industrial base and supports funding a second LCS in FY 18,” even though yesterday’s budget rollout asked for just one and was widely criticized on the Hill today for putting at risk two American shipyards, Fincantieri Marinette Marine and Austal USA, which rely on procurement at a rate of three a year.
In a unprecedented move, the Trump Administration told the Navy mid-day on the day after the budget rollout, following a lengthy budget-crafting process, that it would support procurement of two instead of one LCSs.
“The administration is supportive of a second LCS. That was brought to us today, so that’s what I know,” Stiller told USNI News when asked about the second ship. Asked if the ship would come on top of the Navy’s topline or in lieu of some other spending priority, Deputy Chief of Naval Operations for Integration of Capabilities and Resources (OPNAV N8) Vice Adm. William Lescher told USNI News, “we don’t have those details.”
Several sources confirmed to USNI News that the decision to throw administration support for a second LCS in the Navy’s budget was intended to be presented in an earlier hearing before the Senate by Acting Secretary of the Navy Sean Stackley and Chief of Naval Operations Adm. John Richardson. Richardson and Stackley were aware of the shift before the hearing but the service had not yet worked out how it would address the issue.
Instead of the earlier hearing, Stiller was informed shortly before she was to appear before the seapower subcommittee that “OMB was supportive” of a second LCS in the budget, and she amended her oral statements shortly before she addressed the House panel, USNI News understands.
“The administration is supportive of a second ship in LCS,” Stiller told reporters after the hearing.
“I do not know the details. I do not know how that’s going to manifest itself.”
The revelation comes after Stackley and Richardson told the Senate panel earlier in the day that they could only afford one ship in their budget but that they would look to mitigate industrial base impacts in the 2019 budget.
“The three ships appropriated in 2017 with the additional ship requested in this year’s budget ensure continued production at both yards. This rate of production, however, only meets the minimum sustainment,” compared to the optimal production rate of three a year across the two years, Stackley said at a Senate Appropriations defense subcommittee hearing, “so we’ll continue to update our assessment of the frigate schedule, assess the effects of this and other shipbuilding contract awards on the industrial base, and make any appropriate modifications to our budget for 2019 to ensure healthy competition for the future frigate program.”
The Navy originally planned to compete variants of the two LCS designs for the future frigate contract but has since expanded the competition to include other domestic and foreign designs.
Stackley added later in the hearing that “right now we are procuring (LCSs) literally one year at a time. We are going to take the three ships [and] combine it with the 2018 ship that we have requested in order to go out with a single procurement of those two years to provide as much stability across the current LCS builders as we can, while we continue to refine the requirements and press forward with the design of the frigate because we want to keep the LCS and the frigate heel-to-toe as best as possible so that we have a healthy industrial base to compete for that future frigate program.”
Stackley told USNI News after the hearing that, given that FY 2019 procurement hasn’t been decided yet, the contract with Marinette Marine and Austal USA would likely cover the 2017 and 2018 ships and include options for additional ships, to give the Navy some time to decide its 2019 plans while locking in multi-ship pricing.
Sen. Tammy Baldwin (D-Wisc.), who represents the Marinette Marine shipyard, questioned Stackley during the hearing, noting that a reduction to two ships a year could lead to 450 layoffs at the yard, and a reduction to one ship could lead to 800 jobs lost.
Stackley told Baldwin that “the challenges that we have in 2018, our number one priority has been, and we’ve been emphatic about this, is to restore our readiness – not to do it at the cost of procurement and modernization, but in 2018 budget-wise we don’t have the capacity to grow in terms of procurement and modernization. That becomes a 2019 budget issue that we’ve got to deal with through the defense strategy review. The one LCS in 2018 only makes sense when you combine that one ship with the three ships in 2017 so that across the two builders they’re going to each get at least the one ship per year rate, which is below the optimal, which was the three across the two builders. … It’s below the optimal but it does meet the minimum sustaining” rate to keep the yards from shuttering.
He added that the two yards are looking at a backlog of work of 10 ships apiece, and so while the lower LCS procurement number in 2018 may cause some loss of skilled labor, particularly in the supply chain, the Navy would work with the builders to manage that backlog and minimize any layoffs at the yards themselves. Stiller clarified in her testimony on the House side that ship delivery dates could be postponed, for example, to stretch out work until the frigate transition takes place.
— Sam LaGrone contributed to this report