- Littoral Combat Ship’s two makers compete for new warship
- Navy plans to award shipbuilding contract in September 2020
Austal USA and Fincantieri Marinette Marine will be fighting for survival as the U.S. Navy looks to buy new, guided-missile warships to boost its fleet numbers and counter increasing aggression at sea by Russia and China.
Austal in Alabama and Fincantieri Marinette Marine in Wisconsin have become household names for the U.S. Navy and Congress as the makers of the often-troubled, less-lethal Littoral Combat Ship.
Now, the two shipyards will be forced to prove that they can build the Navy’s next frigate — instead of the LCS — and win a multibillion-dollar, potentially winner-take-all contract that would keep afloat the two yards and the thousands of workers they employ in communities dependent on Navy contracts.
“I am very sensitive to the fact that decisions that are ahead of us in terms of small-surface combatants are existential as for winners and losers,” Joe Courtney (D-Conn.), who leads the House Armed Services Seapower and Projection Forces Subcommittee, said in an interview. “With the Navy’s decision to move into a new frigate class, there’s going to be change and obviously that can be scary.”
More Lethal Warships
The Navy seeks to buy as many as 20 frigates in new FFG(X) program instead of continuing with the flawed Littoral Combat Ship program, which has been subject to worries it won’t be able to withstand battle damage.
All eyes are on the Navy to release a draft request for proposals this spring, likely in March or April. The final request for proposal is supposed to be issued by the end of September, with a goal of awarding the contract in September 2020.
The Navy plans to buy the first frigate in fiscal 2020 and the second in fiscal 2021, with the remaining 18 at a rate of two a year between fiscal 2022 and fiscal 2030, according to a Congressional Research Service report published Feb. 4. The service also aims for an average price tag of $800 million to $950 million.
“We are waiting with bated breath,” said Courtney. “We really do want to get moving. They certainly know the whole world is watching. That’s a good incentive.”
Navy Secretary Richard Spencer has indicated that the variants of the current LCS made in two versions by Austal USA, and Lockheed Martin Corp.– Marinette Marine could be under consideration as well as any U.S.-built foreign designs for the competition. Austal USA, whose shipyard is in Mobile, Ala., is the American-based subsidiary of Australian shipbuilder Austal Ltd, while Fincantieri Marinette Marine, with its shipyard in Marinette, Wis., is a subsidiary of Italian shipbuilder Fincantieri SpA.
Both Austal and Marinette Marine were among five companies selected last year for conceptual design of the frigates. Each contender received a $15 million contract. Fincantieri offered up the design for the Italian Navy’s frigate while also partnering with Lockheed Martin as a subcontractor to offer a version of the Freedom-class LCS. Austal proposed a version of its aluminum Independence-class LCS.
“The future frigate is really critical to the numbers game,” for the Navy, which plans to boost its fleet to 355 ships, said Andrew Hunter, director of industrial base initiatives group at the Center for Strategic and International Studies.
The service is weighing whether to award the contract to one winner, Vice Admiral Thomas Moore, who leads the Naval Sea Systems Command, told reporters earlier this year.
The frigate is also critical to areas such as Mobile, where Austal employs 4,000 people, and Marinette, where Fincantieri Marinette Marine has 1,500 workers. Each company has a web of suppliers across the U.S.
“If there is no follow-on of one type or another, shipyards do close,” Sen. Tammy Baldwin(D-Wis.), who serves on the Appropriations defense panel. “We would be devastated if that happened in Marinette.”
Winning the frigate contract is “extremely important” for Austal and Mobile, said Rep. Bradley Byrne (R-Ala.) who represents the city and sits on the House Armed Services Committee. “It’s important to me that the Navy knows that they have a good shipyard there,” Byrne said in a telephone interview. “We don’t want to see a reduction in shipyards.”
A potential wildcard in the competition emerged in January, when Austal USA was raided by the Navy’s criminal investigative unit. The repercussions are unknown to lawmakers, including Courtney and Byrne, who promised oversight once details come to light. Byrne said company officials told him that the Navy assured Austal the investigation wouldn’t affect its standing in the frigate competition.
“Austal USA is working with the U.S. Navy on an open investigation. We are unable to provide additional details due to the nature of the investigation. We are continuing business as usual, executing our existing and recently awarded contracts,” company spokeswoman Michelle Bowden said in an emailed statement.
“When this thing comes to light, we are going to be looking at it just like everybody else, extremely closely, because that doesn’t happen every day,” Courtney told Bloomberg Government.
For the frigate competition, Austal is deriving confidence from the fact that it is able to deliver two LCSs a year and the latest vessel, LCS 20 “did quite well in acceptance trials,” Terry O’Brien, Austal’s vice president for external affairs and business development, said in a telephone interview.
Austal has invested more than $400 million its Mobile site, according to O’Brien. The company is also the maker of a high-speed vessel that has support from Congress, including Richard Shelby (R-Ala.), the chairman of the Senate Appropriations Committee. The company is focused on expanding its post-ship delivery and service portfolio as a way to maintain a foothold with the Navy.
Meanwhile, the Lockheed-Marinette team in 2018 was awarded a contract to build warships for Saudi Arabia. Wisconsin Governor Tony Evers said last month the state will commit $31 million to Marinette’s expansion. The money is contingent, though, on Marinette winning more federal contracts.
Joe DePietro, vice president with Lockheed Martin’s small combatants and ship systems division, said the Marinette team employs more than 12,500 people “directly and indirectly” in 42 states. “The Navy’s newest frigate is critically important to deliver the security our nation needs while maintaining the economic engine the shipbuilding industrial base delivers,” DePietro said in an emailed statement.
With assistance from Tony Capaccio and Jodie Morris
To contact the reporter on this story: Roxana Tiron in Washington at email@example.com