Published: Tuesday, December 14, 2010, 8:24 PM ??? Updated: Tuesday, December 14, 2010, 8:24 PM
WASHINGTON — During a Tuesday Senate hearing, the Navy’s top officials faced skepticism from government watchdog agencies and blistering criticism from Sen. John McCain, R-Ariz., over a $10 billion warship purchase plan.
Oversight officials described the proposal to split the purchase of 20 littoral combat ships, or LCS, between vendors building in Mobile and Wisconsin as rushed, potentially risky and lacking important information.
"It’s obvious that this is a rush to judgment on a program that has been plagued with billions and billions of cost overruns and wastes of taxpayers’ dollars, and I obviously am deeply concerned about that," McCain told the Senate Armed Services Committee.
Other lawmakers on the panel offered praise or milder criticism of the dual-buy strategy, which was first proposed just a month ago. Sen. Carl Levin, the Michigan Democrat who chairs the committee, endorsed the Navy’s plan.
The Navy proudly championed the plan as crucial for national defense and a good deal that would yield 20 ships for the cost of 19. Navy leaders pressed lawmakers for quick approval.
"This is good for the Navy, good for the taxpayers, good for industry, good for workers and good for our country," Navy Secretary Ray Mabus said.
Sen. Jeff Sessions, R-Mobile, spoke similarly in favor of the plan, which could double the 1,800-person workforce in Austal USA’s Mobile shipyard.
But he expressed uncertainty about the chances for Senate approval in the few remaining days Congress will be in session this year — a necessity to make the Navy’s Dec. 30 deadline.
"Probably, it will be difficult for that to clear the Senate if Senator McCain fails to give consent," Sessions said about the chances of a bill containing only the LCS approval. But there’s "a realistic chance" for fast congressional approval of LCS amendments added to budget bills, he said.
One such bill, called a continuing resolution, last week cleared the House by a thin margin and awaits Senate action.
Congress is scheduled to adjourn for the year on Friday. The Navy’s initial deadline for approval was Tuesday, but on Monday that was extended by more than two weeks to give lawmakers more time to act.
"I understand that the two very generous offers have been extended to Dec. 30," McCain said. "I see no reason why those offers could not be extended to January or February or March, so that this committee could at least address the concerns that the GAO (Government Accountability Office), CBO (Congressional Budget Office) and the Congressional Research Service have raised."
The Navy said that if congressional authorization doesn’t come this year, Austal and Lockheed Martin Corp. likely will increase their asking prices for the ships. To lock in the lower prices, the Navy has said it would likely proceed with a previously approved winner-take-all shipbuilding contract and abandon the dual buy.
Austal and Lockheed declined to comment.
The hearing was called hastily at the request of McCain, with notice going out Monday night. Only eight of the committee’s 28 members attended, and most — including McCain, the panel’s ranking Republican — came late or left early.
Lawmakers, Navy leaders and oversight officials agreed on at least one point: the LCS program had a troubled past.
"The cost of the LCS, from 2005 to 2010 was 8 billion of the taxpayers’ dollars, and what have we got to show for it?" McCain asked. "$8 billion for four ships."
Navy officials said they learned from past mistakes and that the dual buy offers substantial savings. The worst-case scenario for ship costs, on average, is $460 million per vessel, well below the limit set for the project, according to Sean Stackley, assistant secretary of the Navy. The fixed-cost project will only hold the government accountable for a limited amount of unanticipated expenses.
The Navy did not give specific cost details because the information is proprietary to the companies, which frustrated the efforts of lawmakers and oversight officials to understand the likely near-term and long-term expenses.
Navy officials said they would not ask Congress to approve a bad deal, adding that the new vessels are fast, flexible and can operate near shore.
"Having commanded the Atlantic and Pacific fleets, I know the value of such a ship," said Adm. Gary Roughead, chief of naval operations.
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