SECNAV wants to discuss with Marinette how its LCS price can become more competitive

By Lee Hudson / April 24, 2018 at 2:03 PM

The Navy secretary wants to sit down with executives from Marinette Marine, one of the two shipyards that manufactures the Littoral Combat Ship, to discuss how its prices can become more competitive.

Sen. Tammy Baldwin (D-WI), a member of the Senate Appropriations defense subcommittee, said today during a hearing she is concerned about the Navy's LCS acquisition strategy in fiscal year 2018 and 2019 because it is based on lowest price instead of a best-value competition. This structure will hurt Marinette because the service is not taking into account the "unique capabilities, cost structures and workforce of each LCS variant," she said.

Spencer told reporters following the subcommittee hearing, "We have a situation where we have a competitive market and one of yards goes, 'Oh, I'm disadvantaged because I'm up North in a union, or I'm steel, or whatever.' I think there is room for us to make some progress there on bringing those prices to be more competitive."

Baldwin argued one LCS in FY-19 would result in shipyard layoffs, while two ships in the same fiscal year would result in the minimum sustaining rate needed to maintain the workforce and effectively compete for the guided-missile frigate replacement competition, "neither of which meet the required standards set by President Trump to support U.S. manufacturing . . . to build a 355-ship Navy."

Further, Baldwin said the potential work for Saudi Arabia's Multi-Mission Surface Combatant at Marinette is not a sufficient substitute for LCS work.

Spencer said the Navy would do everything it can to make sure the skilled workers at Marinette have an adequate workload, "while I say that we are not in there for corporate welfare to be very frank with you."