LCS Program Cost and Opportunity Cost

Austal (USA) just launched the final LCS, the USS Pierre (LCS 38).  Now would seem an especially appropriate time to assess the financial and opportunity cost of the program.  Did we get value for our taxpayer money (the program cost)?  Was there something else we could have better spent our taxpayer funds on (the opportunity cost)?  Let’s see.
 
A cursory review reveals that we acquired
 

16x Freedom class ships (5 retired)

 

19x Independence class ships (2 retired)

 

Total LCS Ships  = 35 (7 retired)

Total Active LCS Ships = 28

 
Note:  Depending on which plan you look at, the Navy intends to retire several more Freedom class vessels over the next few years.  Essentially, the entire Freedom class is being terminated as quickly as the Navy can.
 
What did this acquisition program cost? 
 
Ship
GAO reports R&D and acquisition costs = $20.5B [2]
Unit cost = $650M [2]
 
Module
GAO reports module R&D and acquisition costs = $7B[1]
Total modules = 40 [1]
Unit cost = $175M per module.[1]
 
Total Program Cost
Total cost module and ship = $27.5B
 
 
Discussion
 
Value – The LCS has almost no combat capability.  Hence, the value for the money is near zero.
 
Opportunity Cost – The opportunity cost = $27.5B.  What could we have done with $27.5B if we had not spent it on the LCS program?  Well, the alternative opportunities are nearly endless:  munitions, mines, a dedicated minesweeper, ASW destroyer/corvette, air wings, dry docks, etc.  At this point, it’s not even debatable that almost any alternative choice would have been a better use of the funds.  In other words, the opportunity cost-value far exceeded the actual cost-value.
 
Bear in mind that this is not a case of hindsight.  Almost everyone except the Navy pointed out massive problems with the program from day one:  concurrency, lack of CONOPS, a multitude of design issues, insufficient weight and stability margins, a badly flawed manning model, a badly flawed maintenance model, lack of armament, complete absence of modules, etc.  There was no hindsight involved or required.  The problems were painfully obvious and predictable.  In fact, the term ‘predictable’ implies a small degree of uncertainty.  Regarding the LCS problems, there was no uncertainty.  The problems were 100% certain to occur, as was pointed out by … well … everyone.
 
The LCS is the poster child for a program that should never have left the back-of-the-napkin stage.  It produced no value and a staggering $27.5B wasted opportunity cost.
 
  
 
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[1]Government Accountability Office, “Weapon Systems Annual Assessment”, Jun 2023, GAO-23-106059, p.149
 
[2]Government Accountability Office, “Weapon Systems Annual Assessment”, Apr 2018, GAO-18-360SP, p.92