US Navy cancels LCS 4
The US Navy (USN) has announced that it has cancelled LCS 4, the fourth Littoral Combat Ship, stating that it "could not reach agreement on the terms of a modified contract" with shipbuilder General Dynamics.
At a press conference on 1 November, reporters were informed that the contract for the ship with General Dynamics was cancelled during a late-evening phone call on 31 October, after arrangements to move from a cost-plus to a fixed-price contract fell through.
The final offer from General Dynamics on the cost of LCS 4 was "substantially higher" than what the navy was prepared to pay, the USN said, but insisted that the service was still "committed" to the LCS project.
This decision, following the cancellation of the LCS 3 ship contract with Lockheed Martin in April 2007, leaves just the initial two prototype ships from an initial requirement of six.
The USN said that it is "unlikely" a decision will be made on which platform it will commit to in 2008, but hopes to make a selection in 2009.
The USN added that it still had to negotiate terms to retain some of the long lead items already purchased for LCS 4. The two LCS prototypes are still expected for delivery in 2008 but the delivery schedule may slip to later in the year as the termination affects shipyard operations.