After running on two parallel tracks with the Littoral Combat Ship, the Navy’s new combatant ship designed for near-shore and shallow-water operations, the Navy announced today that it was cancelling further purchases on the existing contract structure with General Dynamics and Lockheed Martin and would pick one winner for the construction of 10 more ships between 2010 and 2014. The Navy had cancelled procurement of up to 3 ships in 2010 due to budget constraints.

One ship is already commissioned (LCS 1), and a second (LCS2) is currently in sea trials.  LCS 3 and 4 are already under construction by GD and Lockheed.

The move is, simply, aimed at lowering the cost by making it an all-or-nothing bidding war. One design will be chosen for an FY 2010 purchase — the winner will be required to deliver a a “technical package” including designs and specs, so that there can be a competitive bid for a second source for the ships in FY 2012. “The winner of the down select will be awarded a contract for up to 10 ships from fiscal 2010 through fiscal 2014, and also provide combat systems for up to five additional ships provided by a second source”, the announcement said.

“This change to increase competition is required so we can build the LCS at an affordable price,” said Ray Mabus, secretary of the Navy.  “LCS is vital to our Navy’s future.  It must succeed.”

“Both ships meet our operational requirements and we need LCS now to meet the warfighters’ needs,” said Adm. Gary Roughead, chief of naval operations.  “Down selecting now will improve affordability and will allow us to build LCS at a realistic cost and not compromise critical warfighting capabilities.”

Lockheed’s team, managed by Fred Moosally (full disclosure – my former commanding officer), delivered LCS-1, christened USS Freedom , built at Marinette Marine in Marinette, Wisconsin.

General Dynamics teamed with Austal USA, a division of the Australian shipbuilder famous for its catamaran-hull longhaul ferries, to build the radically different trimaran LCS-2 USS Independence at Bath Iron Works in Bath, Maine.