November 21, 2007: Does
the Navy need a lesson from its own history? Cancellation of the second General
Dynamics Littoral Combat Ship, "LCS-4," on November 1st points up a problem
that has plagued innovative American military technology development programs
since the 1950s. The ship was cancelled because of "cost overruns." The
original estimated cost per LCS was $220 million, but it kept rising as the
first General Dynamics ship, the USS Independence (LCS-2), began construction.
In response, the Navy tried to get General Dynamics to change the contract from
"cost plus" to "fixed cost." In a "cost plus" contract, the Navy pays whatever
the ship costs, plus a profit to the builder, while a "fixed cost" contract has
the Navy pay a set amount, and any the cost over that has to be eaten by the
builder. General Dynamics refused. Meanwhile the rose to $350 million, and kept
going; When it hit $375 million the Navy pulled the plug.
Why did the costs rise?
Well, one reason is that the General Dynamics design is pretty innovative.
Among other things, it's an aluminum trimaran, a three-hulled vessel with a
whole lot of new ideas and technologies. But that's only part of the problem.
The main problem with the LCS, and with most post-1950s innovations in military
equipment, is that the military keeps changing the specs. Even small changes
may have "cascading" effects, as existing plans have to be changed. In some
cases completed work may have to be modified or even ripped out, to accommodate
the new idea. Sometimes changes follow on changes, and work may have to be
redone several times, to insure that the latest nifty innovations are included
in the ship. Naturally this costs money, in labor and materials, and also takes
time, so that the ship is delivered later than planned.
There's a simple solution
to this problem, one that worked very well during World War II, when the Navy
was buying ships in huge lots. It was simply this; no new idea gets put into a
vessel already under construction. During World War II the Navy determined that
it was easier to complete a ship, even an aircraft carrier, to the original
design, rather than interrupt work to allow changes. Once completed to the
original design, a ship could be sent to a shipyard for the modifications
needed to adapt it to the new, improved design (unless she was desperately
needed with the fleet, and then her "boring old design" was probably perfectly
suited to the mission anyway). Experience proved that doing things this way
took less time and less money than trying to introduce modifications during
construction. After the war, unfortunately, this intelligent approach was
Other examples of the
services' penchant for shoving more and more nifty new stuff into a design,
thereby causing the costs to go out of control, and often leading to the
cancellation of a project: American tank development since the 1950s, ditto
aircraft, etc., etc.
Sometimes old ideas work