Senate panel cuts funds for General Dynamics ship

A Senate panel on Wednesday cut funding for a new General Dynamics Corp. ship under contract to the U.S. Navy, citing “serious concerns” with the service’s ability to control the cost of its shipbuilding program.
General Dynamics was awarded a contract in December to build a second prototype of the Navy’s new Littoral Combat Ship, which is designed to operate near shore. The company has designed the new vessel but hasn’t yet begun construction.
The Senate Appropriations Committee rescinded $300 million previously approved for the second ship. The cut came as the panel approved a measure providing $459 billion for the U.S. military in fiscal 2008, although not for the conflicts in Iraq or Afghanistan.
General Dynamics, the Navy’s second-largest shipbuilder, and Lockheed Martin Corp., the world’s biggest defense company by sales, are building competing versions of the new ship. The Navy canceled Lockheed’s contract for a second ship in April after costs rose almost 50 percent on its first craft and Lockheed refused to accept a fixed price for the second.
The committee said that while it “fully supports” the goal of increasing the fleet to 313 vessels from about 278 today, there are “serious concerns with the Navy’s ability to deliver on the current shipbuilding program.”
“The Navy’s track record for building ships on time and on budget has not been good,” committee said in a report accompanying its legislation.
The budget passed by the appropriations panel Wednesday must be approved by the full Senate and then merged with companion legislation that the House passed in July. The House didn’t cut funding for the second General Dynamics ship.
Kendell Pease, spokesman for Falls Church, Va.-based General Dynamics, said “it would be inappropriate to comment on pending legislation.” Navy spokesman Lieutenant Bashon Mann also declined to comment on the legislation.
The Senate bill contains none of the $147 billion in additional funding the administration requested in February for the wars in Iraq and Afghanistan. That measure will be debated in October after the Pentagon submits an additional request to pay for the addition this year of 30,000 troops in Iraq, said committee chairman Robert Byrd of West Virginia.
“In order to facilitate passage of this bill, it does not include funding or policy for Iraq and Afghanistan,’ he said.
The $459.6 billion bill is about $3.5 billion less than the administration’s request.
It contains a 3.5 percent pay raise for military personnel, one-half percent more than the administration requested. It also includes $9.2 billion to continue an increase by 2013 in the Army of 65,000 troops and Marine Corps of 27,000.
The Senate panel’s report gives no details on cost growth on General Dynamics’ Littoral Combat Ship but included this warning:
“Unfortunately, the LCS has been plagued with significant cost growth and schedule slip” that require a “fundamental change” in the Navy’s strategy for purchasing what’s intended to be a 55-vessel program.
A federal audit released July 24 said the program’s overall cost had increased 128 percent.
In addition, the cost of all 41 vessels under contract to the Navy has already exceeded by $4 billion, or 7 percent, the original budget of $56 billion, the Government Accountability Office said.
The Littoral Combat Ship is intended to be fast and highly maneuverable for use in coastal areas on missions including mine detection and elimination, anti-submarine warfare and interdicting small surface craft.
The General Dynamics craft is 127 meters long (417 feet) and features three parallel hulls. The design, called a trimaran hull, makes the vessel more stable, allowing for helicopter takeoffs and landings in rough waters.
The design is based on one from Australia-based Austal Ltd. General Dynamics is supervising construction of the first ship, Independence, at an Austal shipyard in Mobile, Ala.
General Dynamics received the contract for the first ship in October 2005 and the contract for the second in December 2006. •