Australian-owned shipbuilder Austal announced it has officially been awarded a $584 million contract to build another littoral combat ship (LCS) for the U.S. Navy in its Mobile shipyard, but not without some controversy.
The announcement comes weeks after policymakers scrambled to have an additional LCS ship added to President Donald Trump’s defense budget — the first draft of which kept funding for the frigate program at Obama-era levels.
Austal said the 417-foot LCS 28 will be built here in Mobile “employing techniques that would be applied if it wins the Australian government’s $3 billion offshore patrol vessel contract.”
“While I am obviously happy for Austal, I am also delighted in the vote of confidence this delivers for Australian shipbuilding and design,” Austal executive David Singleton said.
“Should we win the $3 billion offshore patrol vessel contract for the Royal Australian Navy, we intend to introduce many of the advanced manufacturing techniques and efficiency gains perfected in the U.S. into our local operations.”
All even-numbered LCS ships, the Independence class, are built here in Mobile while odd-numbered LCS frigates, the Freedom Class, are built by Lockheed Martin in Marinette, Wisconsin. After enough ships have been produced and tested in sea trials, the Navy is set to choose which of the two designs it will carry forward for another run of around 50 new ships. Winning another contract so soon, then, bodes well for Mobile.
“We won this award following a direct competition with the Freedom Class LCS, which says much for our cost efficiency on this program,” Singleton said.
Aside from laying down the foundation for competing against Lockheed’s Wisconsin shipyard, U.S. Rep. Bradley Byrne has said the new contract, in addition to the two others funded in the federal budget, will prevent worker layoffs in the times between active projects, in turn keeping overhead costs down.
“The three ships not only maintain a healthy industrial base, because without three ships the skilled workforce will suffer a 10-40 percent layoff, resulting in an extended production timeline and yielding cost increase of 10-15 percent,” Byrne said.
Funding for two more littoral combat ships may be critical, but it was not always certain. When the first draft of the White House’s budget was released, though, it included funding for only one additional LCS. Late in negotiations, Navy officials added another, saying it had been excluded because “the facts and need for a second came to us so late in the process.”
That nearly half-billion-dollar, last-minute addition to the budget came as a surprise to those on Capitol Hill considering the defense funding bill.
The bill funding three new littoral combat ships has now passed committee and is headed to the full House of Representatives for consideration.