01 Apr 15. USN awards FY 2015 LCS contracts. Key Points:
* USN is providing funding for three LCS plus advanced procurement for a second Freedom variant hull to be funded in FY 2016
* Austal USA and Lockheed Martin also receiving priced options for an additional LCS apiece in FY 2016
The US Navy (USN) has awarded a total of USD1.053bn to the two companies building the Littoral Combat Ship (LCS) for three ships in fiscal year 2015 (FY 2015), plus advanced procurement funding for the next hull to be acquired (in FY 2016), officials announced on 1 April. As part of a contract modification issued on 31 March, two ships (LCS 22 and 24) were awarded to Austal USA, the builder of the Independence variant LCS, and one ship (LCS 21) was awarded to Lockheed Martin, the team lead on the Freedom variant LCS being built by Marinette Marine Corp. In addition, the navy is providing advanced procurement funding of USD79m to Lockheed for LCS 23, which will be fully funded in FY 2016. Both teams also received priced options for one LCS apiece in FY 2016. The USN had planned on acquiring four LCS in FY 2015 to complete its 20-ship block buy contract originally issued in December 2010. But as reported by IHS Jane’s in March 2014, the USN deferred acquisition of the fourth LCS in FY 2015 because of budgetary constraints, and thus it is funding only three LCS as opposed to the planned four ships as indicated in previous budgets. Since FY 2012, the USN has funded four LCS per year, splitting the ships evenly between the yards so that each builder was funded to construct two LCS annually. Thus the three LCS fully funded in FY 2015 alters the pattern. Austal USA is receiving USD691m for its two ships; Lockheed is receiving a USD362m award for its ship, plus the USD79m advance procurement funding for its second ship. IHS Jane’s in February 2015 reported that the navy would extend the existing 20-ship LCS block buy contract time frame so as to allow for the fourth LCS to be acquired in FY 2016.
“Getting the second ship [fully] awarded by 31 December allows us to maintain the production schedule for the second ship,” Lockheed Martin’s Joe North, vice-president of littoral ship systems, told reporters during a conference call on 1 April. “As long that second ship is fully funded with the remaining effort by the 31 December this year, it’s the equivalent of … [receiving] two ships in [FY] 2015, with an option for another one in [FY] 2016.”
A Naval Sea Systems Command (NAVSEA) spokesperson said that awarding two ships to Austal and one to Lockheed – plus the advance funding for a second – was the least expensive option for the navy, and NAVSEA also reiterated that both yards could do the work and that schedules were not an issue. According to the navy, the prices for the three FY 2015 ships were determined based on the block buy contracts initially awarded in December 2010 for 20 LCS, evenly split between the two yards. (Source: IHS Jane’s)
31 Mar 15. French government support for Rafale can lower unit cost. France’s Dassault Aviation may be about to enjoy government financial support of the type that would enable its Rafale fighter to push into export markets. Both the contract announced earlier this year for 24 aircraft to be sold to Egypt, as well as a proposal made in mid-March for what is anticipated to be a request for proposals for a 16-18 aircraft buy from Malaysia, feature loans backed by French government guarantees as the financing mechanism for the sales. The twin-engine French fighter has a number of attractive features from the perspective of the nations that have considered purchasing it. One is that the design is not speculative; the major systems like the active electronically scanned array (AESA) radar from Thales and the Snecma M88-2 engine are all already in service on operational French Rafales. Another positive is that the aircraft is available in both land- and carrier-based variants. This is an attractive set of options