Saturday, October 4, 2014

LCS Waiver Trials

GAO has a fascinating report out about the Navy’s acceptance of the first two LCSs despite significant uncompleted construction work (1).  ComNavOps has reported on this before but this report contains the entire ugly story.  The report describes the contract terms as they affect delivery of the ships and their acceptance by the Navy.  It also identifies the responsible parties within the Navy at the various stages.  For instance,

 “During builder’s trials, inspectors from the Navy’s Supervisor of Shipbuilding, Conversion, and Repair (SUPSHIP) are generally responsible for observing and identifying deficiencies.”

“During acceptance trials, the responsibility for identifying deficiencies falls upon the Navy’s Board of Inspection and Survey (INSURV), an independent organization whose inspectors evaluate the newly constructed ship and report on its material condition to Congress and Navy leadership.”

INSURV conducts two inspections:  one for preliminary acceptance and another following post-delivery outfitting and availability periods to determine final acceptance.  Serious deficiencies are referred to as “starred” and must be corrected by the builder or waived by the Chief of Naval Operations.

Here’s the summary of results from the acceptance trials for LCS-1/2.

LCS-1 Acceptance Trial Part One
Newfound Starred Deficiencies = 21
Uninspected Systems = 63
Incomplete Certifications = 19
Incomplete Compartments = 2%

LCS-1 Acceptance Trial Part Two
Newfound Starred Deficiencies = 31
Uninspected Systems = Not Assessed
Incomplete Certifications = Not Assessed
Incomplete Compartments = Not Assessed

LCS-2 Acceptance Trial Part One
Newfound Starred Deficiencies = 39
Uninspected Systems = 83
Incomplete Certifications = 12
Incomplete Compartments = 31%


You’re probably thinking, this can’t be true.  It must be another humor piece.  No construction program could be this bad.  Sadly, it’s not.  This is real.  Keep reading. 

Both LCS-1 and LCS-2 were delivered and accepted by the Navy with major shortfalls in completeness and adherence to contract specifications.  LCS-2 had 31% of its compartments not even finished!!!  The report notes,


“We found that LCS 1 and LCS 2 were delivered with a large number of open deficiencies, the majority of which were determined to be attributable to the contractors. Our analysis found that over half of these deficiencies were closed after the ships were delivered to the Navy and were being outfitted, but other deficiencies continued to be unresolved one year after delivery—a point at which the Navy had taken final acceptance of LCS 1 and LCS 2.”

Somewhere around half the deficiencies remained unresolved a year after delivery?  How could that happen?  Here’s the explanation.

“Under the cost-reimbursement contracts, the LCS 1 and LCS 2 prime contractors were only required to give their best efforts to complete quality-related activities—along with the other work specified in the contracts—up to each contract’s estimated cost. These efforts resulted in LCS 1 and LCS 2 not completing final contract trials, and LCS 2 not finishing its acceptance trials—resulting in increased knowledge gaps related to ship performance and deficiencies. In addition, the Navy did not achieve the quality standards on LCS 1 and LCS 2 that are outlined in its own ship acceptance policy, although the policy also contains several notable flexibilities to these standards. In particular, the policy recognizes situations where the Navy may defer work until after delivery and final acceptances and affords the Chief of Naval Operations the power to waive certain quality standards outlined in the policy. The Navy relied extensively on these waivers to facilitate its trials and acceptance processes for LCS 1 and LCS 2.”

The report points out that to this day, almost five years after delivery, LCS-2 has not competed acceptance trials!!!  Clearly, the Navy has no intention of ever doing so.

The report points out that the Navy complied with all relevant rules and laws in accepting the significantly incomplete ships through the extensive use of waivers.  Technical compliance does not, however, excuse horrific program management.  None of us would pay full price for an incomplete car and yet that’s exactly what the Navy did multiple times.  By the way, the Navy did the exact same thing with the entire production run of the LPD-17 class.  No lessons learned by this Navy!

The Navy didn't conduct acceptance trials on the LCS, they conducted waiver trials.

Read the report.  It paints an absolutely stunning portrait of incompetence and mismanagement by Navy leadership.


(1) Government Accountability Office, “LITTORAL COMBAT SHIP - Navy Complied with Regulations in Accepting Two Lead Ships, but Quality Problems Persisted after Delivery”, September 2014, GAO-14-827

9 comments:

  1. This is incredible. On second thought, the problem is that it's not incredible, it's actually very believable.

    We spend way to much on ships with way too few capabilities, and the capabilities don't match the needed missions, and then we don't even go through the steps to make sure that we actually got all of those sub-minimal capabilities. Way to spend my taxpayer dollars.

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    1. CDR, you just pretty well summed up this entire blog with your last paragraph!

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  2. Bad News - The CNO waived the requirements in order to control the overrun development costs of the first 2 ships. Not too bad if the ships are experimental platforms, it stops the bleeding.

    Good News - At least SUPSHIP and INSURV seem to have learned from the LPD-17 fiasco in that they have to document work that needs to be done.

    REALLY BAD NEWS - CNO made the 1st 2 ships operational and is deploying (the Navy's term not mine) them in an incomplete state.

    THE REALLY REALLY BAD NEWS - The CNO perpetuated the disfunctional ship procurement methods that are going to reduce the Fleet size to 4-5 costly giants that are too big and expensive to risk sailing.

    Who picks these BOZOs? Where do they learn this stuff?

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  3. OK, here we go from the Top.

    The Freedom nand the Independence were and are engineering prototypes, and not intended to be functional fighters at this time. It was more important to get these ships into the hands of the designers and testing engineers, so that they could discover what was truly wrong with their designs, than run complete a punch list of item that were likely to be changed.

    Remember that the contracts and specification for both ship were basically written in water. The "Naval Vessel Rule" they were to design too was not finished when the contracts were written. And being the first of the kind, no one had any idea what to expect when they where delivered.

    Those problem were why they were built in the first place, to learn what to build, and how to build them. So it is to be expected that they have tons of problems.

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    1. GLof, we've had this discussion. You are the only one who considers LCS-1/2 to have been intentional prototypes. The Navy documents just don't support that position other than with a few very vague references that might be construed to mean that but only after the fact. The reality is that the Navy intended these as full-up warships.

      Apply some logic. If the Navy had truly intended LCS-1/2 to be prototypes they would not have ordered several more before either of the "prototypes" had been operated and lessons learned. Clearly, logically, the Navy did not view them as prototypes. That's all you, offering an after-the-fact defense of the program.

      Setting all that aside, there's still the issue of horrific program management in the form of badly flawed contracts that didn't even require the manufacturers to finish the ships prior to delivery. Whether prototypes or not, paying full price for unfinished ships is extremely poor stewardship of the tax dollar. Further, what good are unfinished ships? Even if we accepted your position that they're just prototypes, unfinished ships can't demonstrate the functions and problems that a prototype should. Look at the number of incomplete certifications and uninspected systems. They were incomplete and uninspected because they weren't finished! A prototype serves no purpose if it is so incomplete that it can't be fully operated.

      You're twisting yourself in a knot trying to defend a badly flawed program. Just out of curiosity, why are you so adament in your defense of a program that even the Navy has given up trying to defend? Are you connected with the program in some way? I'm genuinely curious what your motivation is?

      In light of your enthusiastic defense of the LCS, do you see the "end" of the LCS production run (even though we know the next "frigate" will just be a bigger LCS) as a mistake by the Navy or do you support that decision?

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    2. Please, I agree that was the original plan - to have a commercial standards ship and to make them experimental. But that plan did not survive first contact with the rest of the Navy.

      Even the PEO LCS Adrmial Charlie Hamilton - who got burned by this ship said (from a NYT Article at http://www.nytimes.com/2008/04/25/us/25ship.html?pagewanted=all&_r=0)

      Begin Extract

      Rear Adm. Charles S. Hamilton II, one of the Navy officers with lead responsibility for the project, said he had given Navy officials several opportunities to slow down the project.

      “The clear signal from all quarters was, ‘Hamilton, I want that ship in the water, and I want it out there now,’ ” he recalled in an interview.

      End extract

      I stipulate they were expected to have lots of warts, so what BOZOs decided to change the plan, ignore common sense, their own PEO, and jumpstart a class of 55 (32) ships before the first 2 got accepted?

      We didn;'t build AEGIS or Nimitz this way, at least not to this scope. This is a new phenomenon since the late 1990's to just let contracts and keep the money flowing.

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    3. GLof, as far as your claim that the Navy wanted to get the ships into the hands of the testers, why is it that the Navy won't even complete acceptance trials of LCS-2? That doesn't seem like much of a desire to get the ship into the hands of the testers! According to your theory, the Navy should have been desperate to complete trials in order to find out what works and what doesn't so that the lessons learned could be fed back into the production run.

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    4. This is the problem of too many cooks in the kithen.

      Here is the problem with even trying to figure out the LCS history; all the different viewpoints were argued at one point or another by either someone in the Navy down to the program office itself. All the viewpoints both good and bad.

      So the original plan was to have LCS-1 and LCS-2 as science experiment prototypes in the same line as the Sea Shadow. Until other people pointed out that we had science experiments for long enough and now was the time to finally buy real warships. So LCS-1 and LCS-2 were stuck halfway between science experiment and fully functional warship prototype, and this was when they were under construction.

      The other thing that happened was after they were renamed as prototype warships they were supposed to be the 90% solution for the follow on ships. LCS-3 and LCS-4 were not supposed to need radical redign work over where the final design of their sister ships stopped. It was only supposed to be minor tweeks such as a internal sensor placement, thickening a beam here, running larger power cables there, or mabying building in a maintenance access hatch.

      Obviously this did not happen.

      In the end most everyone can see in the LCS what they want to see because at one point or another in the decade long saga they were right.

      As for lessons learned? There are none. This is just another lesson reinforced for when you violate all the "rules" about buying something the smart way.

      1. Figure out a conops for the new "thing" before you send out specs.
      2. Only send out specs that can be met now, not in the future, not with another decade of development, but now.
      3. Make the contractors prove number 3 as realistically as possible.
      4. If they cannot prove number 3 drop that requirement and go with something that we know works.
      5. Once you lay down material QUIT MESSING WITH THE DESIGN!
      6. Sign a contract at a fixed price for a fairly large amount minimum of material. (ie 12 ships at 400 million each with an option for another 12 more at the same price.)
      7. If the contractor cannot meet that price go back to step one. Do not chase sunk costs.

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