News Review: Austal to build 10 Littoral Combat Ships for the US Navy | ADM Feb 2011
Australian company Austal Ships will build 10 Independence-class Littoral Combat Ships (LCS) for the US Navy (USN) under a contract awarded shortly before Christmas 2010.
The contract for the first ship is valued at US$432.1 million, with options for nine additional vessels over the following five years, to a total value of up to US$3.5 billion.
Austal is the first Australian shipbuilder to build a surface combatant for the USN, though US government rules governing construction of USN vessels mean the innovative 127 metre aluminium Independence-class trimarans will be built by the company’s US subsidiary, Austal USA, at its yard in Mobile, Alabama.
Construction of the first of these ships will begin in early 2012.
The yard is already busy building the second Independence-class LCS, Coronado (LCS-4), ordered under an earlier contract awarded in 2009.
The USS Independence (LCS-2) was commissioned in January 2010.
Austal Limited Chairman John Rothwell said the 10-ship contract is a very significant milestone for the company: “This contract has firmly established Austal as an international defence shipbuilder, is a strong vote of confidence in Austal’s aluminium trimaran LCS design, and also reflects the strength and capability of our USA operations and highly-skilled workforce.”
Austal will be prime contractor for the 10-ship program.
When the LCS program got under way Austal was a member of the General Dynamics LCS team, responsible for the platform design and construction.
This was one of two teams down selected in October 2005 to build two LCS contenders each – Lockheed Martin, which has already delivered the two Freedom-class steel monohull ships ordered in 2005, led the other.
General Dynamics Bath Iron Works remains prime contractor for the Coronado but shortly after the Independence was commissioned GD and Austal announced a split which would enable them to bid separately to build batches of ships during the series production phase of the LCS program.
Austal will immediately commence preparation work including a 12-month, US$140 million facility expansion and a doubling, to 3,800, of the company’s workforce in Mobile. Delivery of the first of the newly ordered LCSs is scheduled for 2015.
Meanwhile, Austal USA is also building five 103 metre Joint High Speed Vessels (JHSV) for the USN and Army, which require up to 10 of these vessels, worth an estimated US$1.8 billion.
The first of these is due to be delivered at the end of this year.
Lockheed Martin’s contract for 10 monohull Freedom-class LCSs is worth up to US$3.6 billion, with the first costing US$436.8 million, according to the USN.
The average cost of both variants, including government-furnished equipment and margin for potential cost growth across the five year construction period, is US $440 million per ship, according to US Secretary of the Navy Ray Mabus – well below the US Congressional cost cap of $538 million per ship.
The decision to buy 10 of each design rather than down select to single ship class is a result of the highly effective competition between the bidders.
“Each contractor’s 10-ship bids reflect mature designs, investments made to improve performance, stable production, and continuous labor learning at their respective shipyards,” his statement said.
The US Navy remains committed to a 55-ship program and the LCS is needed to establish and maintain US Navy dominance in the littorals and sea lanes of communication choke points around the world.