Navy Littoral Combat Ship (LCS) Program: Background, Oversight Issues, and Options for Congress

The Navy is procuring a new type of surface combatant called the Littoral Combat Ship (LCS). The Navy substantially restructured the LCS program in 2007 in response to significant cost growth and schedule delays in the program. The Navy's proposed FY2009 budget requests $920 million in procurement funding for the procurement of two LCSs, which would be the fourth and fifth ships in the restructured LCS program. The LCS is a small, fast, relatively inexpensive combat ship that is to be equipped with modular "plug-and-fight" mission packages, including unmanned vehicles (UVs). The basic version of the LCS, without any mission packages, is referred to as the LCS sea frame. The Navy wants to procure a total of 55 LCSs. Congress originally funded a total of six LCS sea frames (LCSs 1 through 6) in the FY2005, FY2006, and FY2007 defense budgets. In 2007, as Congress was considering the proposed FY2008 defense budget, the Navy canceled LCSs 3 though 6 as part of its restructuring of the program, leaving only LCSs 1 and 2 under construction. As part of its final action on the FY2008 defense budget, Congress did the following: accepted the Navy's cancellation of LCSs 3 through 6; funded the procurement of one additional LCS in FY2008 (LCS-5); significantly reduced the Navy's FY2008 funding request for the LCS program; amended the LCS sea frame unit procurement cost cap; required the Navy to use fixed-price-type contracts for the construction of LCSs procured in FY2008 and subsequent years; criticized the execution of the LCS program; expressed concerns for the program; and expressed support for continuing with the program in restructured form. The issue for Congress for FY2009 is whether to approve, reject, or modify the Navy's restructured LCS program. The LCS program raises potential oversight issues for Congress relating to cost growth, total program acquisition cost, procurement cost cap, technical risk, operational evaluation, and competition for production.