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Navy Wastes No Time and Gives New LCS Contracts to Lockheed, Austal

With the split buy acquisition strategy approved by Congress the U.S. Navy wasted no time and ordered up to twenty more of the Littoral Combat Ships (LCS) from its two suppliers.

This week both the teams led by Lockheed Martin (LMT) and Austal America (ASB:AUS) received contracts for one ship plus up to nine more options. As Congress allowed the Navy went out and bought up to twenty ships. Each contract is worth between $460 and $500 million for the first ships. If all twenty are built the two teams will received close to $5 billion each.

While each team is building a dissimilar hull shape the two designs carry similar weapon loads. Lockheed is partnered with Marinette Marine’s yard in Wisconsin. Austal America is building their ships at their facility in Mobile, AL. The ships are designed to be built at smaller yards allowing more rapid construction.

So far the Navy has received three LCS ships. USS Freedom (LCS 1) and USS Fort Worth (LCS 3) were built by Lockheed Martin and USS Independence (LCS 2) by Austal America. The USS Coronado (LCS 4) is under construction in Mobile and is expected to be commissioned in 2012.

If all twenty ships are ordered and delivered under these contracts the LCS class will quickly become one of the largest in the current Navy. Ultimately up to fifty or more of the LCS could be acquired.

The decision to allow the split contracts in line with the original acquisition strategy for the ship rather then just using one source as the Navy had proposed when it restructured the program in 2009 is a boon to Austal and Marinette. Both companies had been planning layoffs and restructuring if they had not one the contract. Now they both will have to ramp up their capabilities to support the Navy’s program.

Photo from avhell’s flickr photostream.

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Nation’s First Littoral Combat Ship Departs For Maiden Deployment

February 16, 2010 by · Comment
Filed under: Lockheed Martin, Syndicated Industry News 
Nation's First Littoral Combat Ship Departs For Maiden Deployment
February 16, 2010 3:30:00 PM

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MAYPORT, Fla., -- The nation's first Littoral Combat Ship, USS Freedom (LCS 1), departed from Naval Station Mayport, FL, today for its maiden deployment, approximately two years ahead of schedule. The agile 378-foot USS Freedom, designed and built by a Lockheed Martin (NYSE: LMT)-led industry team, will deploy to the Southern Command area of responsibility.

"We congratulate the USS Freedom and her crew on their maiden deployment as this new class of Littoral Combat Ships begins to fulfill important global security missions," said Lockheed Martin Chairman and CEO Bob Stevens. "Her quality and proven performance enabled Freedom's deployment two years ahead of schedule, a significant accomplishment in naval shipbuilding. As we compete to build additional ships for the U.S. Navy, the Lockheed Martin team remains focused on delivering an affordable surface combatant with the flexibility to provide security close to shore and on the open seas."

USS Freedom (LCS 1) is the first of 55 the Navy plans for a new class of ships designed to operate in coastal waters. The ship's capabilities have been demonstrated since delivered to the U.S. Navy in 2008. Freedom has sailed more than 10,000 nm, successfully completed sea trials and demonstrated performance of combat, communications and other critical systems.

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