Wednesday, March 22, 2017

That's An Expensive Gun You've Got There

Here’s another stunning contract.

Northrop Grumman Systems Corp., Bethpage, New York, is being awarded a $68,786,952 firm-fixed-price, cost-plus-fixed-fee, and cost-only contract for the production of Littoral Combat Ship gun mission modules, including support for basic outfitting assembly installation, interim deport level maintenance, engineering support and sustainment.  This contract includes options which, if exercised, would bring the cumulative value of this contract to $812,000,000.”

I have no idea what, exactly, this includes or, indeed, what it is even referring to.  The LCS only has two guns.  If it refers to the main gun, the Mk 110 57 mm gun, that’s supposed to be included in the construction contract cost.  If it refers to the 30 mm guns, we’re only purchasing around 24 or so for the ASuW modules.  That works out to $34M per gun for a glorified machine gun.  That’s absurd raised to the power of absurd (absurd squared, for you math geeks). 


I’m truly baffled about this one.  Anyone got any ideas what this is about? 

27 comments:

  1. It's only for the 30mm guns
    Navltoday "Northrop wins potential $812M US Navy LCS gun mission module deal"
    "The gun mission modules consist of two 30mm guns and are part of the LCS’ surface warfare (SUW) mission package (MP)."

    http://navaltoday.com/2017/03/17/northrop-wins-potential-812m-us-navy-lcs-gun-mission-module-deal/

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    1. Good find. The Navy is planning on buying around a dozen ASuW modules so that's around 24 guns. That is a LOT of money for 24 glorified machine guns!

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    2. In what sense does this remain a "Navy" and in what sense has that word been appropriated and repurposed by participants in organized and systemic grift?

      Seems to me the balance of evidence is tipping in favor of the latter.

      https://www.washingtonpost.com/investigations/navy-officers-convicted-of-corruption-in-fat-leonard-scandal-havent-lost-their-pensions/2017/03/18/d60c6d4c-0363-11e7-b1e9-a05d3c21f7cf_story.html?utm_term=.d5245fad2591

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  2. What is surprising is the statement:"According to the U.S. Navy the surface warfare mission package will begin developmental testing aboard USS Milwaukee (LCS 5) later this year and will culminate in operational testing and initial operational capability in 2018."
    So it appears all LCS firings and testing from commissioning of Freedom in 2008 to date with are with pre IOC 30mm cannon!

    Wikipedia "The U.S. Navy uses the Mk44 Bushmaster II in the Mk 46 Mod 2 Gun Weapon System (GWS). The GWS is produced by General Dynamics to give warships protection against small, high-speed surface craft. A Mk 46 turret consists of the 30 mm chain gun, a forward looking infrared (FLIR) sensor, a low light television camera, and a laser rangefinder. The guns fire at 200 rounds per minute and are fed by a 400-round magazine through 200-round dual feeds. Effective range is 2,200 yds (2,000 m) for full-caliber high-explosive or armor-piercing ammunition, which can be extended when using sub-caliber rounds."

    In comparison the Russians use variations of the Kashtan with two 9,000 rpm GSh-30K six-barrel 30 mm rotary cannon on installed on the 4,000 mt Admiral Grigorovich class frigates, only 400 ton heavier ships than 3,600 mt Freedom.

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    1. It's difficult to keep up with the various levels of testing and it's equally difficult to keep up with the Navy's parsing of statements.

      As you know, the Navy now calls an individual piece of equipment a module and the overall module is now a package (??!!!). I think (?) that the testing you cite refers to the overall package (formerly a module) as opposed to the individual 30 mm module (formerly just a piece of equipment) which has been tested though to what level, I'm not sure offhand.

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  3. Its absurd that they can't take the turret off a bradley and mount it too the LCS. Problem solved and guess what its cheaper and already stabilized.

    The hellfire test for the LCS

    https://youtu.be/YNli7tNKxgA

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    1. You need to review the history of attempts to navalize land weapons. It's littered with failures. Not too long ago, Germany tried to do exactly what you described and failed. Navalizing (marinizing) a land system is very difficult.

      For starters, generally, none of the materials of construction are corrosion resistant which means the entire system will corrode and fail in short order. The various seals are not designed to withstand salt water and will fail. The aiming systems (usually optics) are not designed to work in humid, foggy, conditions and generally do poorly - as well as having their own corrosion issues. The fire control has to be tied into the ship's combat system software which is technically feasible but no easy feat. The various electronics are generally not shielded and often susceptible to the very strong electromagnetic interferences from a typical ship's radars and emitters. Gyrostabilization can keep the barrel on target but land systems are not designed to be continually moving like the rolling and pitching of a ship and the systems often physically breakdown under the continual stresses. And the list goes on.

      So, before you blithely dismiss the difficulties inherent in navalizing a land weapon system, read up on the history of previous attempts and you'll get a feel for the true challenges. I'm not amazed that more land systems aren't navalized - I'm amazed than any are!

      On a related note, when the Army took their Bradleys and Abrams to the desert in Desert Storm, they found to their dismay that the systems continually broke down due to the infiltration of sand. They had to develop all types of new equipment, filters, seals, etc. in order to function. Now, imagine if the sand had been water (which gets into everything at a molecular level as opposed to sand which is macroscopic) and corrosive.

      Just to be clear, the LCS-Hellfire test was not an operational test. It was a simple structural test to see if the ship's structure and surrounding equipment could withstand the stresses of a launch. This was just the first baby step on the path to integrating Hellfire into the LCS.

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    2. Using that as a point of reference has anyone thrown salt water in the electromagnetic rail gun to see if can be used at sea without rusting itself to death?

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    3. My inclination would be to say, of course they have. However, they forgot to provide galvanic corrosion protection, which we've known about since the age of sail, for the LCS so I guess I have to say, good question!

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  4. The business end is the MK46. That's the actual weapon​. Ref the following link, cost is 3.2 mil each. http://www.prnewswire.com/news-releases/general-dynamics-awarded-26-million-for-mk46-naval-weapon-systems-200037071.html

    How did we plus up the cost by a factor of 10x mounting in the LCS?

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    1. Wow, that's some serious mark up! Even with the mounting, frame, electronics, you think it would be, maybe, a few more million total but $30 million more?!?

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    2. I can't help but wonder if we're seeing the ripple effect of the F-35 imposed price. Perhaps manufacturers are beginning to jack prices up enormously in order to hedge against imposed prices that are unrealistic? Any manufacturer who does business with the military from now on has been put on notice that they could have prices imposed on them. A smart manufacturer would either get out of the defense business or jack up prices ridiculously high as a hedge. As I said in the previous post about the imposed F-35 price, the General in charge will look good but the negative consequences will be felt for decades. The true cost of the imposed contract will likely be many, many, many, many times the short term savings as manufacturers jack up prices across the board.

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    3. Oh, ABSOLUTELY, I think that's what its happening. I would say it's been going on for awhile but I think the F35,LCS and Ford carrier are taking it to a whole new level of lies and accounting shenanigans....I expect new SSBN will be spectacular when it comes to money wasted....

      My take is that, more and more, LRIP prices,program costs, fixed price mandate,etc will be come meaningless. Let's just agree that an aircraft carrier is going to cost $10 billion, nice round number! and contractor will say,sure, no problem Congress. Then, contractor can ask DoD for $500 million for "support" every year!, $800 million for a "redesign", $400 million for "sustainability", another $800 million to install new radar design and fit,etc,etc...who the hell is going to check all these add-ons? DoD issues contracts like this every day!!! and let's face it, even if you are an engineer, who does amongst us have the knowledge and inside information to know how much it costs to install a radar, redesign some parts, or install a Mk 110 57 mm gun on the LCS?!? Sounds outrageous but could an outsider prove it's outrageous? I doubt it....

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  5. I wonder if we are going to see a Fat Leonard type scandal when it comes to procurement.

    I still feel that the lesser evil at this point is to have a state owned defense industry or at least a large segment of the industry under state control.

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    1. What large govt controlled program has succeeded in history? I look at Social Security, Medicaid, various entitlements, Veterans Administration, etc. and see nothing but colossal failures. No govt controlled program will succeed. However, the current model isn't succeeding either. Is a govt owned defense industry the lesser of evils? Perhaps. My natural inclination is to stick with private ownership but implement some radical legal changes and clean house in the military (won't happen, of course). Seems there is no good solution.

      Lesser of evils? I don't think you're right but I can't say you're wrong. That's a sad state of affairs, huh?

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    2. Looking at healthcare, most of the world does a lot better than the US.

      https://ourworldindata.org/the-link-between-life-expectancy-and-health-spending-us-focus

      Here though is the Wiki article on nations that practice Universal Healthcare (or as critics call it "socialized medicine"):

      https://en.wikipedia.org/wiki/Universal_health_care

      Judging by the numbers, I'd say it works a hell of a lot better than the "capitalistic healthcare" system.

      Social SEcurity has succeeded.
      http://www.cbpp.org/research/social-security/policy-basics-top-ten-facts-about-social-security

      Point 6 is especially important: Fact #6: Two in five elderly Americans would be poor without Social Security.




      I'd be prepared to bet that there's a good chance that the defense industry could be run for a lot cheaper and a lot better if it were nationalized.


      The problem is that private industry has an inherent profit motive that can be very damaging. When that's aligned with national interests, that's fine. When it's not though, it can be very, very harmful. Keep in mind, it is the private sector that is sending lobbyists and offering these jobs. Without a viable high paying career option after retirement for the brass, the incentives for corruption would be lower.

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    3. Perhaps there are other govts that can run programs better than we do - I don't think so but, perhaps. Regardless, it's irrelevant. The only govt under discussion is the US govt and whether or not the US govt can run a large program effectively. The evidence is overwhelming that it cannot. Look at the collapsing Obamacare program. Premiums are skyrocketing (double and triple digit percentage increases), state exchanges are closing - 16 of the original 23 have failed and closed and the remaining 7 lost money and are predicted to close by year end, insurance companies are dropping out. Very few doctors accept Medicaid. It's an abysmal failure!. Look at the failing post office. Social Security and Medicare/Medicaid are going bankrupt. The IRS has turned on the citizens and engaged in a concerted attack against conservative groups. The defense department is unable to pass an audit. I can go on all night with these examples.

      Let's look at the program of interest - shipbuilding. Once upon a time we had a robust, widespread shipbuilding industry. As the govt got more involved with safety, environmental, and labor regulations, shipbuilding withered and died. The govt has almost killed off our shipbuilding industry and you think that shipbuilding would be better done if totally controlled by the govt???? That's a leap of faith that flies in the face of all evidence!

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    4. Here's some more info related to govt run shipyards. As you know, the Navy once operated over a dozen shipbuilding yards. From shipbuildinghistory.com website comes this reference to private versus govt shipbuilding efficiency,

      "in 1972, a report was published that demonstrated that ships built in Naval Shipyards cost, on average, about 30% more than ships built by private-sector shipbuilders: as a result, all new ship construction in the Naval Shipyards ceased and five of the nine remaining yards were closed."

      While you may want to believe the govt could operate shipyards more effectively and cheaper, history disagrees.

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    5. The US had been quickly close any efficiency and corruption gap with the rest of the world because healthcare is very, very important, as is everything that the government does.


      Obamacare itself was a terrible piece of legislation, but yes, it is a total failure. The US should take a hard look at what the rest of the world is doing because if they are spending less and getting more "bang for buck", that's a serious failing. Here in Canada, the government does healthcare ... and it seems for most people on average, it does better at a lower cost.

      As for the private sector being efficient, why are there few major civilian shipyards?

      China and South Korea are the dominant shipbuilders today. Japan is a distant follower.

      Here's the 2015 numbers:
      https://www.statista.com/statistics/263895/shipbuilding-nations-worldwide-by-cgt/


      In the case of China, now the largest shipbuilder in the world by gross tonnage, the 2 largest shipbuilders are both state owned.

      - China Shipbuilding Industry Corporation
      - China State Shipbuilding Corporation

      The Korean shipbuilders are all organized as a Chaebol, which are similar in structure to the Japanese Keiretsus.

      There in turn are all backed by state owned backs. Actually the current economic climate has led to them being in trouble too.

      http://www.cnbc.com/2016/05/29/bankruptcy-in-sight-for-south-korean-shipbuilders.html

      http://www.frbsf.org/banking/asia-program/pacific-exchange-blog/south-korea-shipping-and-banking/

      The global civilian shipping market as of late has collapsed. Notice though that the Korean shipbuilders basically have the governments very active in their shipbuilding industries. That's how the Japanese and the Koreans gained marketshare from the West. The US used to be the top civilian shipbuilder too.

      The South Korean government recognizes that sometimes, they do have to bail out:

      https://www.bloomberg.com/news/articles/2016-10-31/korea-to-spend-9-6-billion-by-2020-to-support-shipping-industry


      But there's a bigger problem. The US has pretty much nothing. If the US private sector were so "efficient" compared to state owned companies, why have they lost total marketshare?


      It cannot be wages either. Japan and South Korea are both now high wage nations. Shipbuilding could be a very good source of jobs.

      In other words, American private companies have lost marketshare in the world's shipping industry to:

      - State owned bank backed Japanese and Korean firms
      - Now state owned Chinese shipping firms

      More importantly, why'd they lose to state owned or state backed companies?

      I'm saying that if the US government were competent, it would be able to compete in both shipbuilding and adopt universal healthcare.

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    6. You're comparing a snapshot of today's wages and conditions to decades of change. I'll explain.

      The US shipbuilding industry didn't decline at noon, yesterday. It declined over the last several decades. The beginning of its decline was rooted in safety, environmental, and labor laws and regulations that made the US shipbuilding industry non-competitive with yards in other countries. This is the essence of the argument I'm making - that US govt involvement makes everything worse. Even without directly owning the yards, the US govt involvement crushed our shipbuilding. You're trying to compare a snapshot of today's wages in Japan or Korea or wherever (while ignoring safety and environmental regulations!) and claiming that they are high and, therefore, can't account for the US shipbuilding collapse. Well, they certainly did. Decades ago, the Japanese, Korean, or wherever wages were not high. They were significantly lower than in the US. Further, despite you ignoring it, safety and environmental regulations were also major factors. The cost to meet those regs made the US yards non-competitive. Korea and Japan and wherever do not have OSHA, EPA, and all the other regulatory burdens we do.

      You can't seriously be citing China as an example of state owned yards being more efficient and cost effective than private yards??? There are no private yards in China! Everything is state owned. No one knows whether a private yard would be better than a state owned one because there are no private yards and the govt won't allow them.

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  6. To give another example:
    http://fortune.com/2015/07/22/china-global-500-government-owned/

    Most of China's top 500 companies are state owned. Somehow, they've managed extremely impressive economic growth. Is this "despite government" or "because of good government policy"?

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    1. You're kidding me, right? China's economics "successes" are a function of ruthless dictatorship rather than efficient government! It's a lot easier to get everyone to pull together when you can execute those who disagree.

      China's "successes" have come on the back of near-slave labor. Why do you think US manufacturing has flocked to China? It's not because of good Chinese government. It's because they can pay slave labor wages.

      It's easy to be an economic success when you don't pay your citizens a fair wage, when you allow rampant pollution unhindered by any safety or environmental regulations, when you can execute any who disagree, when you can manipulate currency values, when ... Well, you get the idea.

      C'mon, this is pretty basic stuff.

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  7. I do believe that the Chinese economy is better run now than the US. Several reasons.

    1. Between 1950 and 1990, Japan saw one of the greatest economic growth rates in history, transforming the nation from a poor one devastated by WW2 into a modern nation with a higher standard of living than what Americans on average enjoy. South Korea, Singapore, and Taiwan have seen comparable economic growth rates. More significantly as of late, China has seen comparable growth rates.

    This would suggest that the Asian model works across Asian and seems to be superior at giving sustained growth rates. This system involves suppression of consumption, a very interventionalist economy, an undervalued currency, and the state actively subsidizing targeted industries. We have multiple nations showing extremely impressive rates of sustained economic growth on a scale the US has not seen since perhaps WW2.

    If the private sector is so efficient, then we would expect the Asian nations to be choking with inferior quality goods and for productivity to stay very low. That has not happened. In China, over the past decade, real wages have tripled. If the authoritarians are suppressing wages, we'd expect to see super weak growth in wages. We would also expect other brutal dictatorships that suppress wages and have weak environmental laws to grow like crazy too.

    Also, on the note of Japan, I'm not sure they are nearly in as bad a recession as people say. Eamonn Fingleton in particular has written extensively about why. Equally important, Japan has moved up the value chain. Lexus vehicles for example are regarded as some of the best cars in the world. Despite high wages, in many cases higher than what American manufacturing workers are paid, they've kept up. They have not lost their quality or other advantages.





    2. The Western nations that have fared the best amongst the West are Germany, Switzerland, the Nordic Nations, and the Netherlands. They have very strong regulations (stronger than in the US), along with a very robust unions. Their safety laws, union power, and personal tax rates are higher than the US. If what you were saying is correct, they should have choked years ago and suffered even worse losses in jobs than the US to the East Asians.

    This would suggest to me that government regulation, if applied correctly is not the problem. We would expect that the stronger the regulations, the more the job losses. Instead the nations that are often attacked as "socialist" by American conservatives have managed to give their citizens better average standards of living than the US and done a better job of keeping their manufacturing jobs.

    The fact that the US has lost jobs and these nations with stricter regulations has kept manufacturing (for the most part) implies to me that it is a failure of American capitalism more than anything else.

    Also in the case of cars, German cars are generally well regarded as well. WE would expect that Germany, being "stifled by regulations" would develop inferior cars to a free enterprise system. That has not happened.



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  8. 3. Reinforcing this to me is the fact that universal healthcare (as I linked earlier, nations with universal heatlthcare spend less on healthcare for better life expectancies).

    There are other examples. Generally the world's top rated airlines is Singapore Airlines, a state owned company. In many cases, state owned or government subsidized industries have challenged American leadership in manufacturing elsewhere, such as steel manufacturing.




    4. Furthermore, in the case of China, their state owned military system has managed to develop and in many cases reverse engineer Western technologies with a level of proficiency that no other nation has managed thus far to match. It's one of the reasons why they are a rival to the US.

    This would suggest to me that their model of economics has gotten them very far. Whoever is calling the shots in China has done very well indeed, transforming their nation from a third world in the 1970s to a middle income nation. At this point, it is not a question of whether China will exceed the US in terms of economic output, but when. In some measures, most notably PPP, China already has.







    What do I think? A mixed economy seems to be the way to go. The USSR made the mistake of being ideologically attached to Communism. They ignored the evidence of its shortcomings and their leadership extracted economic rent from their populace. I believe that the US is in danger of doing the very same, only with capitalism. That mixed economy may very well be 50-75% government, as opposed to Communism which was 100% state owned.

    Also, consider even during the Cold War, there were things the USSR was able to do early. Sputnik comes to mind, as does Yuri Gargarin, the first man in space. The USSR sure did not have "political freedom" or "free enterprise". They still pulled it off. The point is that it is not what "ism" you believe in, it is whether or not the government invests in scientific research and high end projects. A lot of technologies that do not lead to short term profits simply won't be invested in by the private sector. Only a handful of private companies do. Why? They do not lead to short or medium term profits.

    China has thus far managed to pull off what is world's most extensive high speed rail system and has managed to modernize at an astounding pace.




    The US is danger of making some very serious mistakes here. If it doesn't take a dispassionate view of the causes of American decline relative to China, it risks become the next Europe, becoming eclipsed by a newer power. It won't even take a war. Actually China right now has a good incentive to wait. They will be able to outgrow the US economically. This has very real consequences, like a decline in the standard of living of American citizens. It is also making huge mistakes cutting spending on science, infrastructure, and education.

    It's one of the reasons why I think this battle will be fought will economics more than anything else. High defense spending was one of the reasons why the USSR collapsed, as was ideological rigidity.

    I want the American people to have a good standard of living here, but China does eclipse the US, then that standard of living will be in serious doubt. In 2015 the life expectancy of Americans fell. Absent a big war or HIV epidemic, that is unprecedented. Unless there are major changes made, this is going to get worse.

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    1. Your discussion is fascinating and I am prepared to completely rebut it, however, this is a military blog and I avoid political/social/economic discussions beyond their direct relationship to military matters. With that said, I'm going to leave you with the last word and drop this, not due to any shortcoming on your part but due to the off-topic nature of what would turn into a very long drawn out debate.

      Excellent comment!

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    2. CNO, I'm with you on dropping this because, as you note, this could turn out into a long debate that would draw us away from the primary focus of this site.

      But AltandMain makes one point that I don't think we should gloss over. Reagan won the Cold War by transforming it from our military versus the Soviets' to our economy versus theirs. Going forward, I think that economic power may be more determinative of future conflicts than military power. I think that is a takeaway that deserves serious thought, although probably not debate on this particular forum.

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    3. "economic power may be more determinative of future conflicts than military power"

      War involves, or should involve, ALL means of conflict, including economic. The Chinese are doing a masterful job of this as they continue their expansionist policy. The US, on the other hand, is failing miserably.

      I think, even more important than economic power or any other "power", is willpower. The country that is most willing to "fight" will win. China is demonstrating a complete willingness to fight on all levels and showing absolutely no fear of escalation. The US is demonstrating zero willingness to "fight". It's pretty obvious who will win.

      Excellent comment.

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