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WASHINGTON: Navy Secretary Donald Winter is due to announce his plans late on Thursday for a shore-hugging combat ship being built by Lockheed Martin Corp. that is facing big cost overruns, according to Navy officials who asked not to be named.
Adm. Mike Mullen, chief of naval operations, last week said the Navy was considering terminating Lockheed's work on the ship, but the Navy officials said on Wednesday that option now appeared to be off the table.
In January, the Navy ordered Lockheed to halt work for 90 days on the second of two littoral combat ships (LCS) Lockheed is building, due to soaring costs.
The ship is known as LCS-3 as it is the third in line to be constructed. Lockheed was ordered to stop work because of cost overruns on the first of the new ships, LCS-1, which the company is also building.
General Dynamics Corp., which is building the second and fourth ships is also facing cost overruns, although the Navy had not specified their exact scope.
Winter briefed Pentagon acquisition chief Ken Krieg about his plans on Wednesday. Krieg confirmed the meeting took place at a briefing with reporters, but gave no details.
He said only that he was pleased that Winter had decided to oversee the program review himself.
The Navy has said the first Lockheed LCS ship will cost $350 million to $375 million, far above initial estimates of $220 million for each of the new ships.
The Navy eventually wants to buy about 55 of the ships, designed to operate in shallow waters to hunt for submarines and destroy underwater mines.
