Published: Saturday, December 04, 2010, 5:00 AM
The U.S. Navy’s plan to award lucrative shallow-water warship contracts to shipyards in both Mobile and Wisconsin cleared an important hurdle Thursday, military analysts said, when U.S. Rep. Gene Taylor introduced legislation to approve the purchases.
Analysts said the bill, which has been sent to the House Armed Services Committee, gives the dual-buy plan a clearer path to congressional approval before the Dec. 14 deadline imposed by the Navy.
If Congress signs off, Mobile’s Austal USA and a team led by Lockheed Martin Corp. will each get contracts to build 10 littoral combat ships, estimated to be worth about $5 billion each.
Austal officials have said jobs will double at the 1,800-worker Mobile River shipyard, if they win the work.
If Congress does not assent, the Navy will go back to a plan that picks one shipyard and one ship design.
The legislation represents a significant turnaround for Taylor, D-Bay St. Louis, a past critic of the LCS program. Taylor lost re-election to Republican Steven Palazzo and leaves office in January.
Taylor said his opposition had been based on cost overruns and delivery delays, but the new bids by Austal and Lockheed seem to alleviate those problems. Taylor said he’s seen the new prices, but can’t release them.
“It’s not the original $220 million the Navy had hoped these ships would be, but both prices are a heck of a lot better than the over-$700 million they had crept toward,” he said.
Taylor, chairman of the Seapower Subcommittee of the House Armed Services Committee since 2006, said he would like to set the LCS program on a clear path before he leaves Congress. He said the program could help the Navy reach its long-term ship target.
“It’s a way to take a huge step toward a 313-ship Navy,” he said.
Taylor also credited Navy acquisition chief Sean Stackley for pressuring bidders to cut costs.
Allowing both Austal and Lockheed to go forward would probably mean shipyards in his Mississippi district, including Northrop Grumman Corp.’s Pascagoula operations, could be locked out of the work. But Taylor said his objections to the LCS program had not been motivated by district concerns.
Analysts said Taylor’s support is key.
“Huge breakthrough,” said Craig Hooper, a San Francisco-based Navy analyst. “With Gene on board, I think this is a done deal.”
Others were more cautious. Loren Thompson, a military analyst with the Lexington Institute in Virginia, said Taylor’s bill is a “promising development, but it’s still possible we end up back in a winner-take-all strategy.”
Rep. Jo Bonner, a Mobile Republican who is co-sponsoring the measure, said “there’s still a lot on the table to try to get done, but I’m more encouraged.”
Bonner added that it is not yet clear whether the amendment will end up attached to a huge federal budget bill, called an omnibus bill, or to a less-ambitious continuing resolution, which would fund agencies for a few months. Taylor said those were possibilities, but he’d actually prefer a vote on his stand-alone bill.
“We remain encouraged with the efforts by Congressmen Taylor and (Todd) Aiken (R-Mo.) to co-sponsor a stand-alone bill,” said Joe Rella, Austal USA’s president and chief operating officer. “Congressman Bonner and Sen. (Jeff) Sessions (R-Mobile) and their staffs have been working very hard in support of this effort.”
The Navy had originally wanted to build littoral combat ships — warships that will operate close to shore — in two shipyards, but abandoned that plan last year in an attempt to keep down costs.
The dual-buy option was resuscitated last month because bids submitted by both shipyards had lowered the prices of the vessels. The Navy said it likes the option because it would deliver new ships faster, support more jobs and sustain competition between the two yards.
The Navy imposed a Dec. 14 deadline for Congress to approve the dual-buy plan, because that’s when prices bid by both shipyards expire. Austal also needs action before year’s end to be able to borrow money under an expiring program meant to aid recovery from 2005’s Hurricane Katrina.
“We’re continuing to work with Congress to get the authorization we need for the dual block buy,” said Capt. Cate Mueller, Navy a spokeswoman. “This bill is certainly good news in that effort.”
(Staff Reporters George Altman and Jeff Amy contributed to this report.)
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