US Navy hopeful Congress will approve ship buys

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The US Navy said it was hopeful that Congress will approve a revamped plan to buy coastal warships from both Lockheed Martin Corp and Australia’s Austal before their bids expire on Dec. 14, a move it says would save US$2.9 billion through 2016.

“We are very hopeful. We’re very encouraged,” Navy spokeswoman Captain Cate Mueller said on Monday.

Representative Gene Taylor, who heads the seapower subcommittee of the House Armed Services Committee, introduced a measure last week that would approve the Navy’s plan to buy 10 ships from each of the bidders, instead of 10 plus combat systems for five more, as initially planned, Reuters reports.

It was not immediately clear exactly when the measure, which would amend the House defence authorization bill for fiscal 2010, could come up for a vote. Congressional aides said the timetable for floor votes was still being worked out.

Navy acquisition chief Sean Stackley told reporters at the christening of a second Littoral Combat Ship in Wisconsin on Saturday that he saw strong support for the move in the House of Representatives, and Navy officials were continuing to work with the Senate, which would also have to approve the change.

Lockheed officials have indicated that they could extend the pricing in their proposal for a short while beyond Dec. 14, to allow time for Congress to approve the change.

Lockheed Chief Financial Officer Bruce Tanner told an investment conference last week that Lockheed could extend the prices it offered for a day or two, but not indefinitely.

He said Lockheed remained confident about its chances, even if the Navy wound up buying just one ship, and cited strong international interest in Lockheed’s steel mono-hull design.

Officials at Austal, which is offering an aluminum trimaran, were not immediately available for comment.

Analysts said they expected both companies to show some flexibility on the expiration of their pricing, given that each firm stood to win a contract valued at around US$5 billion.

Stackley said buying ships from both companies would save about US$2.9 billion — US$1 billion more than if the Navy opted for just one ship design.

The Navy initially intended to buy ships from both suppliers, but later opted for just one shipbuilder given rising costs on the program.

The competitive pressure helped lower the companies’ prices to such an extent that Navy officials on Nov. 3 announced they could afford to buy both ship designs.

Pentagon acquisition chief Ashton Carter told a conference last week that the pricing offered by both bidders was “just too good to pass up.

Mueller said the Navy would proceed with its plan to pick just one design if Congress did not approve the change in time.
“We’re going to have an affordable ship either way we do it, but the dual buy saves us even more,” she said.



WBAY, the ABC affiliate in Wisconsin, quoted Representative Steve Kagen, a Wisconsin Democrat and co-sponsor of the Taylor bill, as saying that he was hopeful that he and other lawmakers could sway Senator John McCain, ranking Republican on the Armed Services Committee, to support the change.