Hagel announced the decision during a preview of the Pentagon's
fiscal 2015 budget proposal, saying that growing threats in the
Asia-Pacific region in particular meant the Navy needed to develop
new small surface ships that could operate "in every region and
along the full spectrum of conflict."
Hagel said that given the new threats, he had "considerable
reservations" about building all 52 coastal warships as planned,
which would account for one-sixth of the future 300-ship Navy.
"I recognize the importance of presence, which is tied to the number
of ships. But I also believe that capability and power projection is
the foundation of our Navy's effectiveness," he said in a memo to
top Navy leaders.
Hagel told Navy Secretary Ray Mabus and Chief of Naval Operations
Admiral Jonathan Greenert to study alternative proposals for a new
"capable and lethal small surface combatant, generally consistent
with the capabilities of a frigate" in time to inform the fiscal
2016 budget negotiations.
The options should include a completely new design; existing ship
designs, including the current coastal Littoral Combat Ships (LCS);
and a modified LCS ship; factoring in cost, mission and weapons
requirements, sensors and required delivery date, Hagel said in a
memo, a copy of which was obtained by Reuters.
Lockheed Martin Corp and Australia's Austal Ltd are building two
different models of the Littoral Combat Ship, which were designed
with modular, interchangeable equipment packages that can be swapped
out to hunt for mines, fight submarines, or engage in surface
The first versions of the ships have run into a variety of technical
issues during initial deployments and testing, but Navy officials
say they are generally pleased with the overall performance of the
The two companies are each under contract to build 10 of the ships,
in addition to four others already built, for a total of 24 ships.
Hagel said he wanted to buy an additional eight LCS ships before
halting the program, but did not explain how those ships were to be
divided between the two companies.
Bryan Clark, a former aide to Greenert and senior fellow at the
Center for Strategic and Budgetary Assessments, said the Navy was
likely to award each of the companies a contract for four more
ships, which would keep costs low and maintain the industrial base
until a new program could get started.
If the Navy opted to use a
modified LCS as the follow-on ship, Hagel said, he expected any
contracts beyond the current 24 ships to adopt those changes as soon
[to top of second column]
He also asked Navy officials to assess the performance of the
current ships, examining a range of factors including operating
costs, survivability, lethality and growth potential. He said he
could opt to modify the program if those assessments prove
unsatisfactory, but gave no further details.
Clark said it would cost about $600 million in today's dollars to
build a Perry-class frigate, compared to around $500 million for one
of the current LCS ships combined with one or two mission packages,
which are priced separately. He said the first ship in the class
would likely cost around $100 million more, given the non-recurring
cost of design work.
"It's clear that a new ship program will cost more," agreed one
defense official who was not authorized to speak publicly, adding
that the extent of the additional cost would depend on the Navy's
review of possible alternatives.
The comment came from one of four defense official who confirmed
Pentagon's new approach would result in higher costs in coming
Clark said Hagel's approach would help the Navy achieve its goals
for the mine-hunting and anti-submarine warfare missions, while
bridging to a new more lethal and survivable ship.
Defense officials said Hagel's change in direction for the small
surface warships was not that different from work on the current
generation of destroyers, which also evolved over time, and the Navy
was already undertaking testing and modifications.
"This is exactly what we did with the destroyers," said one
official, who was not authorized to speak publicly. "It was clear
from the start that the 32nd LCS ship would be different from the
(Editing by Mohammad Zargham)
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