Defense Acquisitions: Plans Need to Allow Enough Time to	 
Demonstrate Capability of First Littoral Combat Ships (01-MAR-05,
GAO-05-255).							 
                                                                 
To conduct operations in littorals--shallow coastal waters--the  
Navy plans to build a new class of surface warship: the Littoral 
Combat Ship (LCS). LCS is being designed to accomplish its	 
missions through systems operating at a distance from the ship,  
such as helicopters and unmanned vehicles, and that will be	 
contained in interchangeable mission packages. The Navy is using 
an accelerated approach to buy the LCS, building the ships in	 
"flights." Flight 0, consisting of four ships, will provide	 
limited capability and test the LCS concept. The schedule allows 
12 months between the delivery of the first Flight 0 ship and the
start of detailed design and construction for Flight 1 ships.	 
Estimated procurement cost of the Flight 0 ships is $1.5 billion.
The Congress directed GAO to review the LCS program. This report 
assesses the analytical basis of LCS requirements; the Navy's	 
progress in defining the concept of operations; the technical	 
maturity of the mission packages; and the basis of recurring	 
costs for LCS.							 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-05-255 					        
    ACCNO:   A18517						        
  TITLE:     Defense Acquisitions: Plans Need to Allow Enough Time to 
Demonstrate Capability of First Littoral Combat Ships		 
     DATE:   03/01/2005 
  SUBJECT:   Contract costs					 
	     Military operations				 
	     Military vessels					 
	     Naval procurement					 
	     Operational testing				 
	     Risk management					 
	     Schedule slippages 				 
	     Ships						 
	     Antisubmarine warfare				 
	     Defense capabilities				 
	     Military aircraft					 
	     Helicopters					 
	     Procurement planning				 
	     Littoral Combat Ship				 
	     MH-60 Helicopter					 

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GAO-05-255

United States Government Accountability Office

GAO

                       Report to Congressional Committees

March 2005

DEFENSE ACQUISITIONS

  Plans Need to Allow Enough Time to Demonstrate Capability of First Littoral
                                  Combat Ships

GAO-05-255

[IMG]

March 2005

DEFENSE ACQUISITIONS

Plans Need to Allow Enough Time to Demonstrate Capability of First Littoral
Combat Ships

  What GAO Found

The formal analysis of requirements for U.S. littoral combat operations-
conducted after the Navy established the LCS program-examined a number of
options, such as the extent to which existing fleet assets or joint
capabilities could be used. While the Navy concluded that the LCS remained
the best option, it focused on LCS requirements for combating small boats.
The Navy did not conduct an analysis of the impact of larger surface
threats LCS may face. Such threats may increase the risk to LCS operations
when no other nearby U.S. forces are available to help.

The Navy has developed both a broad concept and more detailed plans on how
the LCS will be employed. It has also identified a number of challenges
that could put the LCS concept at risk, such as manning, logistics, and
communications. For example, reduced manning-a key goal of the LCS
program-may not be achievable because maintaining and operating the ship's
mission packages, such as the MH-60 helicopter, may require more sailors
than the current design allows. Further, the Navy has not yet incorporated
the numbers of helicopters that will be needed to fulfill LCS' s concept
of operation into its force structure and procurement plans. If the Navy's
efforts to meet these challenges are not successful, the Navy may not have
sufficient time to experiment with the Flight 0 ships and integrate
lessons learned into planning and designing for follow-on ships.

While the Navy designed the first LCS to rely on proven technologies and
systems, a number of technologies to be used in LCS's mission packages
have yet to be sufficiently matured-that is, they have not been
demonstrated in an operational environment-increasing the risk of cost and
schedule increases if the technologies do not work as intended.
Technologies must also be demonstrated for systems on the LCS seaframe.
Other factors may affect the availability of mature technologies and
subsystems, such as making the modifications necessary for adaptation to
the LCS and transitioning projects from the laboratory to production.
Collectively, these technology issues pose an additional challenge to the
Navy's ability to sufficiently experiment with Flight 0 ships in time to
inform the design efforts for follow-on ships.

Procurement costs for the Flight 0 ships remain uncertain. The basis for
the seaframe cost target-$220 million-appears to be more defined than for
the mission packages, as the Navy has performed various cost analyses that
consider the challenges in detailed design and construction. The Navy
seeks to meet the cost target by trading between capability and cost. Cost
data for the Flight 0 mission packages are not as firm in part because of
the uncertainties associated with immature technologies.

                 United States Government Accountability Office

Contents

  Letter

Results in Brief
Background
Navy Conducted Detailed Analysis of LCS Requirements, but

Surface Threat Risk Is Unclear A Detailed Concept of Operations Has Been
Developed for LCS but Faces a Number of Challenges in Implementation
Immaturity in Mission Package Technologies Could Decrease the

Experimental and Operational Utility of Flight 0 Ships Procurement Cost
Estimates Are Uncertain Conclusions Recommendations for Executive Action
Agency Comments and Our Review

                                       1

                                      3 5

                                       9

16

21 27 30 31 32

Appendix I Scope and Methodology

Appendix II Comments from the Department of Defense

Appendix III GAO Contacts and Staff Acknowledgments

  Tables

Table 1: Examples of Littoral Combat Ship Missions 6 Table 2: Navy's
Comparison of Materiel and Nonmateriel Solutions for Mitigating Gaps in
the Littorals 12 Table 3: Examples of Mission Warfare Tasks and Related
Capability Gaps in the Littorals 15 Table 4: Challenges for LCS and
Examples of Navy Mitigation

Efforts 20 Table 5: Mine Warfare Mission Package Status 23 Table 6:
Antisubmarine Warfare Mission Package Status 24 Table 7: Surface Warfare
Mission Package Status 25 Table 8: Current Estimated Costs for Flight 0
Mission Packages 28 Table 9: Technology Readiness Levels and Their
Definitions 37

  Figures

Figure 1: Flight 0 LCS Designs 7 Figure 2: LCS Acquisition Timeline 8

Abbreviations

DOD Department of Defense
LCS Littoral Combat Ship
TRL Technology Readiness Level

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separately.

United States Government Accountability Office Washington, DC 20548

March 1, 2005

The Honorable John Warner
Chairman
The Honorable Carl Levin
Ranking Minority Member
Committee on Armed Services
United States Senate

The Honorable Duncan L. Hunter
Chairman
The Honorable Ike Skelton
Ranking Minority Member
Committee on Armed Services
House of Representatives

The Navy has begun to build a new class of surface warship-the Littoral
Combat Ship (LCS)-to address the challenges of operating U.S. military
forces in the shallow waters close to shore, known as the littorals. The
three principal threats it is expected to address are from mines, small
surface boat attacks, and submarines. The LCS differs from existing types
of Navy surface warships in two critical ways. First, it will accomplish
its
mine, antisubmarine, and surface warfare missions primarily through the
use of helicopters, unmanned vehicles and other systems that operate at a
distance from the ship itself. Second, the systems used to conduct each
main or focused mission will be contained in mission packages; for
example, one mission package will consist of the systems needed for
detecting, engaging, and neutralizing mines. The mission packages will be
interchangeable, so that the LCS can be rapidly reconfigured for different
missions. Similar to the concept for an aircraft airframe that can change
missions depending on the systems carried, the Navy refers to the LCS hull
as a seaframe. The concept of mission packages and the ability to shift
among the three focused missions of the ship concentrates each LCS on a
single focused mission at a time as opposed to larger multimission surface
ships, such as the Arleigh Burke guided missile destroyers and
Ticonderoga guided missile cruisers. However, the Navy envisions that,
like other surface ships, the LCS will be capable of conducting certain
core
missions and functions, such as self defense, regardless of the mission
package on board.

The Navy seeks to rapidly build and deploy LCS and has developed an
accelerated acquisition schedule that includes delivery of four ships, two
each of different designs, between fiscal years 2007 and 2009 with
delivery of follow-on ships of a single design beginning in fiscal year
2010. The Congress recently inserted a year into the schedule between the
construction of the first and second ship of each design, which may affect
the schedule for all subsequent ships. The Navy is developing LCS using an
evolutionary acquisition approach. Capabilities are delivered by "flight"
with the first four ships referred to as Flight 0 and the next increment
of capability as Flight 1. Flight 0 will provide an initial limited
capability and platforms to experiment with the critical mission
technologies and test the overall concept. Flight 1 will provide greater
capability and serve as the basis for learning lessons that will be
incorporated into additional followon ships. The Navy has not decided how
many total ships it will build, though currently it estimates that between
50 and 60 ships may be built. The Navy's cost target for each of the four
Flight 0 ships is approximately $370 million. This includes $220 million
for the seaframe and approximately $150 million for mission packages (the
cost of six packages averaged over four ships).

The Senate report1 accompanying the National Defense Authorization Act for
Fiscal Year 20042 and the House of Representatives report3 accompanying
the Ronald W. Reagan National Defense Authorization Act for Fiscal Year
20054 directed that we assess four key areas of the LCS program.
Accordingly, this report assesses (1) the analytical basis of LCS
requirements; (2) the Navy's progress in defining the concept of
operations; (3) the technical maturity of the mission package systems; and
(4) the basis of recurring costs for the seaframe and mission packages.

To assess the four key areas of the LCS program, we held discussions and
reviewed documents at a number of Navy offices, including the program
offices for LCS and its supporting mission package systems, Navy
headquarters, the Naval War College, and Navy Warfare Development Command.
We identified and analyzed key Navy documents, including those related to
capability gaps; requirements; concepts; acquisition

1 S. Rep. No. 108-46, at 179-180 (2003).
2 Pub. L. No. 108-136 (2003).
3 H.R. Rep. No. 108-491, at 184-185 (2004).
4 Pub. L. No. 108-375 (2004).

  Results in Brief

planning; consideration of critical doctrinal, logistical, and operational
considerations;5 technology assessment and maturity plans; and cost
analyses. Our analyses of technology maturity and costs focused on Flight

0. Details of the costs and technologies for the seaframe are sensitive,
due to the ongoing competition. We therefore do not discuss these at
length. Further details on our scope and methodology are in appendix I.

Though the Navy conducted a formal requirements process and an analysis of
other potential solutions, it did so after concluding that the LCS concept
was the best option to address challenges of operating U.S. forces in the
littorals. Normally, a major acquisition program should include an
examination of basic requirements and an analysis of potential solutions
before a new system is decided upon. Based on Department of Defense (DOD)
reviews of the Navy's analysis and the requirements of revised acquisition
guidance, the Navy eventually examined a number of alternative solutions
to address littoral capability gaps, such as the extent to which existing
fleet assets or joint capabilities could be used. The Navy still concluded
that the LCS concept was the best option. However, the Navy's analysis of
one area of littoral operations-the surface threats facing U.S. forces in
littoral waters-did not include consideration of the potential impact of
all threats the LCS is likely to face. For example, while the requirements
for LCS are focused on combating small boats, the LCS could face threats
larger than small boats in littoral waters, including missile-armed
warships. Though LCS is to rely on support from other nearby U.S. forces,
the Navy also intends for LCS to operate independently of those forces.
The Navy has not analyzed the risks such threats could pose to LCS
operations and survivability.

The Navy has developed a broad concept of operations that addresses the
key operations of the ship and continues to develop more detailed planning
on how the LCS and its mission systems will be used. The Navy has also
identified challenges in such areas as manning; logistics; command
control, communications, computers, and intelligence; and force structure
that are critical and may increase risk to the success of the concept. The
Flight 0 ships will be the primary means for determining whether these
challenges can be met. While the Navy is working to meet these challenges,
to the extent they are not met, the Flight 0 ships could

5 DOD generally refers to these considerations as doctrine, operations,
training, materiel, leadership, personnel, and facilities (DOTMLPF).

provide less capability than planned and less experimentation to inform
the design of the Flight 1 ships. For example, reduced manning is one of
the key goals of the LCS program. If the Navy discovers that it needs more
sailors to operate the ship's critical mission package systems than the
Flight 0 design can accommodate, significant changes may have to be made
in the Flight 1 requirements. The MH-60 helicopter, which will operate
from LCS and is critical to all its missions, embodies a number of these
challenges. The number of personnel required to operate and maintain the
helicopter may be greater than the Flight 0 design can accommodate.
Further, the Navy's current force structure and procurement plans do not
include the numbers of helicopters that will be needed to fulfill LCS's
concept of operation.

A number of the technologies chosen for the LCS mission packages are not
yet mature, meaning that they have not been demonstrated in an operational
environment, which is a best practice for major acquisition programs.
Immature technologies increase the risk that some systems will not perform
as expected and may require additional time and funding to develop. The
impact of delayed technology is less capability for the Flight 0 ships and
less information for the Flight 1 ship design. Other issues beyond
technology maturity could prevent some technologies from being available
in time for the first ship. For example, some technologies considered
mature may require alterations to operate from LCS. Some of the
technologies still in development face challenges transitioning into
production, while other mature technologies may not be available for LCS.
Challenges also remain for technologies included on the LCS seaframe,
including those for communications, software, launch and recovery, and
command and control of off-board systems.

The cost to procure the first flight of LCS remains uncertain, with
seaframe costs more defined than the mission package costs. The basis of
the procurement costs for the LCS seaframe appears to be more defined
since the Navy has performed a series of cost analyses to anticipate the
challenges in detailed design and construction. The Navy seeks to
stabilize seaframe costs by establishing a $220 million cost target and is
working to meet this target by trading between capability and cost while
assuring that seaframe performance meets threshold requirements. As many
of the technologies for the mission packages remain immature, cost data
for procurement of these technologies are not as firm. Other mission
package costs, such as procurement costs for MH-60 helicopters, are not
covered by LCS program cost analyses. In addition to issues with
procurement costs, development costs for the LCS could expand if more time
and effort

Background

is needed to mature the technologies in the mission packages and the
seaframe.

We are making three recommendations to help the Navy assess and mitigate
operational, force structure, and technology risks associated with LCS. We
are recommending that (1) the Navy analyze the effect and mitigate any
risks associated with a larger surface threat on LCS operations and the
impact on other naval forces in support of those operations; (2) the Navy
incorporate into its continuing efforts consideration of the impact of LCS
operations on helicopter force structure and procurement plans as well as
efforts to address the manning, technology, and logistics impacts of
helicopter operations from LCS; and (3) the Navy revise its acquisition
strategy to ensure that it has sufficiently experimented with Flight 0
ships and mission packages before selecting the design for Flight 1. In
comments on a draft of this report, DOD partially concurred with our
recommendations and described steps it will take to implement them.

According to Navy guidance, the Navy is required to project power from the
sea and maintain assured access in the littoral regions, which for naval
vessels refers specifically to the transition between open ocean to more
constrictive shallower waters close to shore-the littorals. "Anti-access"
threats from mines, submarines, and surface forces threaten the Navy's
ability to assure access to the littorals. The LCS is being developed to
address these missions. The LCS design concept consists of two distinct
parts, the ship itself and the mission package it carries and deploys. For
LCS, the ship is referred to as the "seaframe" and consists of the hull,
command and control systems, launch and recovery systems, and certain core
systems like the radar and gun. A core crew will be responsible for the
seaframe's basic functions. Operating with these systems alone offers some
capability to perform general or inherent missions, such as support of
special operations forces or maritime intercept operations. The LCS's
focused missions are mine warfare, antisubmarine warfare, and surface
warfare. The majority of the capabilities for these missions will come
from mission packages. These packages are intended to be modular in that
they will be interchangeable on the seaframe. Each mission package
consists of systems made up of manned and unmanned vehicles and the
subsystems these vehicles use in their missions. Additional crew will be
needed to operate these systems. Each mission package is envisioned as
being self contained and interchangeable, allowing tailoring of LCS to
meet specific threats. Table 1 shows examples of LCS's focused and
inherent missions.

Table 1: Examples of Littoral Combat Ship Missions

Focused missions Examples of tasks

Littoral mine warfare  o  Detect, avoid, and/or neutralize mines

o  Clear transit lanes

o  Establish and maintain mine cleared areas

Littoral antisubmarine warfare  o  Detect all threat submarines in a given
littoral area

o  Protect forces in transit

o  Establish antisubmarine barriers

Littoral surface warfare  o  Detect, track, and engage small boat threats
in a given littoral area

o  Escort ships through choke points

o  Protect joint operating areas

                               Inherent Missions

Battle space awareness  o  Intelligence, surveillance, and reconnaissance

Joint littoral mobility  o  Provide transport for personnel, supplies and
equipment within the littoral operating area

Special operations forces  o  Provide rapid movement of small groups of
special support operations forces personnel

o  Support hostage rescue operations

o  Support noncombatant evacuation operations

o  Support and conduct combat search and rescue

Maritime  o  Provide staging area for boarding teams

interdiction/interception  o  Employ and support MH-60 helicopters for
maritime interdiction operations

o  Conduct maritime law enforcement operations, including counternarcotic
operations, with law enforcement detachment

Homeland defense  o  Perform maritime interdiction/interception operations
in support of homeland defense

o  Provide emergency, humanitarian and disaster assistance

o  Conduct marine environmental protection

o  Perform naval diplomatic presence

Antiterrorism/force protection  o  Perform maritime
interdiction/interception operations in support of force protection
operations

o  Provide port protection for U.S. and friendly forces and protection
against attack in areas of restricted maneuverability

                      Source: GAO from U.S. Navy sources.

Navy Plans an Aggressive The Navy characterizes the schedule for
acquisition and deployment of LCS as aggressive. To meet this schedule,
the Navy is pursuing an

    Schedule for LCS

evolutionary acquisition strategy. Rather than initially delivering a full
capability, the program is structured to deliver incremental capabilities
to the warfighter. To support this, LCS acquisition is broken into
"flights" for the seaframe and "spirals" for mission packages in order to
develop improvements while fielding technologies as they become available.
The initial flight of ships, referred to as Flight 0, will serve two main
purposes: provide a limited operational capability and provide input to
the Flight 1 design through experimentation with operations and mission
packages. Flight 1 will provide more complete capabilities but is not
intended to serve as the sole design for the more than 50 LCS the Navy
plans to ultimately buy. Further flights will likely round out these
numbers. Flight 0 will consist of four ships of two different designs and
will be procured in parallel with the first increment of mission
packages-Spiral Alpha. Flight 0 ships are currently being designed, and
construction on the first ship will begin in 2005. Due to the accelerated
schedule, Spiral Alpha will consist primarily of existing technologies and
systems. Spiral Bravo mission packages will be improvements upon these
systems and are intended to be introduced with the Flight 1 ships. Figure
1 shows the two designs chosen by the Navy for Flight 0, one by Lockheed
Martin and one by General Dynamics.

Figure 1: Flight 0 LCS Designs

Source: Littoral Combat Ship Program Office.

The Navy and Lockheed Martin signed a contract for detailed design and
construction of the first Flight 0 ship in December 2004, and the ship
builder is expected to deliver the ship to the Navy in fiscal year 2007.
The Navy will then begin testing and experimenting with the ship, using
the

first mission package-mine warfare. A date for any deployment with the
fleet has not been determined. Detailed design and construction for the
first General Dynamics design ship is scheduled to begin in fiscal year
2006 and delivery is scheduled for fiscal year 2008. The delivery of the
first antisubmarine and surface warfare mission packages are aligned with
the delivery of the second Flight 0 ship. Figure 2 shows the Navy's
current acquisition timeline for Flight 0, Flight 1, and their mission
packages.

Figure 2: LCS Acquisition Timeline

Source: GAO, based on Navy data.

Note: Based on congressional action for fiscal year 2005, ship 3 will
start construction in fiscal year 2007.

The development of Flight 1 will proceed concurrently with the design and
construction of Flight 0. In early fiscal year 2006 the Navy will begin
consideration of several preliminary designs for Flight 1. The Navy will
choose designs for further development in fiscal year 2007. Selection of a

                           Preliminary   Final  Detailed design and           
                                Design  Design  construction                  

design6 to start construction of the first Flight 1 ship will be in early
fiscal year 2008. Flight 1 and future follow-on designs will be the basis
for the LCS class of ships, which the Navy currently estimates could
number between 50 and 60. Under the current acquisition strategy, detailed
design and construction of the first Flight 1 ship will begin about 12
months after delivery of the first Flight 0 ship. The last two Flight 0
ships will not be available before detailed design and construction of
Flight 1 begins. The second Flight 0 ship and the first mission packages
for antisubmarine and surface warfare will be delivered just as detailed
design and construction of Flight 1 is set to begin. Delivery of the first
mission packages in Spiral Bravo will be aligned with delivery of the
first Flight 1 ship.

Recognizing that it lacks a number of key warfighting capabilities to
operate in the littorals, the Navy began to develop the concept of LCS as
a potential weapon system before it had completed formal requirements.
Normally, a major acquisition program should include an examination of
basic requirements and an analysis of potential solutions before a new
system is decided upon.7 The Navy eventually conducted a requirements
development process and analyzed a number of alternative solutions to a
new ship but concluded that the LCS remained the best option. However, the
Navy's analysis of one area of littoral operations-the surface threats
facing U.S. forces in littoral waters-did not include consideration of the
potential impact of all threats the LCS is likely to face.

  Navy Conducted Detailed Analysis of LCS Requirements, but Surface Threat Risk
  Is Unclear

Navy Began to Develop The Navy has known about the capability gaps in the
littorals for some LCS before Fully time, particularly threats from mines
and submarines in shallow waters. As Examining Alternatives we previously
reported, the Navy has acknowledged that it lacks a number

of key warfighting capabilities it needs for operations in the littoral
environs.8 For example, it does not have a means for effectively breaching
enemy sea mines in the surf zone or detecting and neutralizing enemy
submarines in shallow water. The Navy has had programs under way to

6 The Flight 1 acquisition strategy is under review and Navy officials
indicate that no options have been excluded, including the selection of
more than one design for Flight 1.

7 Department of Defense, Instruction No. 5000.2, Operation of the Defense
Acquisition System, May 12, 2003 and Chairman of the Joint Chiefs of
Staff, Instruction 3170.01D, Joint Capabilities Integration and
Development System, March 12, 2004.

8 GAO, Navy Acquisitions: Improved Littoral War-Fighting Capabilities
Needed, GAO-01-493 (Washington, D.C.: May 2001).

improve its capabilities in each of these areas for many years, such as
systems designed to provide the fleet with mine detection and limited
clearing capabilities, but progress has been slow. Additionally, the Navy
has identified the threat of small boats, such as the kind that attacked
the U.S.S. Cole in 2000, as a potential hindrance to operations in the
littorals. The Navy has decided that the LCS is to accomplish these three
critical littoral missions.

After recognizing the need to address known capability gaps in the
littorals, the Navy conducted a series of wargames to test new concepts
for surface combatant ships. One such concept, a very small surface
combatant ship called Streetfighter, was incorporated into the Global 1999
war game. The concept was envisaged as a small, fast, stealthy, and
reconfigurable ship, which included many characteristics similar to LCS.
The Navy's war-fighting assessment processes confirmed gaps in
capabilities for mine warfare, shallow water antisubmarine warfare, and
surface warfare against small boats. In July 2001, the Global 2001 war
game further examined the concepts and potential benefits of
modularity-such as using mission packages-and use of unmanned vehicles for
littoral missions. As a result of the wargames the Navy continued the
process of analyzing a variety of new surface combatant ship concepts to
address the threats in the littorals.

In 2002, the Navy established an LCS program office as it began to further
identify concepts and characteristics for a new surface combatant ship. In
December 2001, the Naval War College was asked to develop and define
characteristics that would be desirable in a littoral combat ship. The
college used a series of workshops that included operational and technical
experts from throughout the Navy to compare three types and sizes of
surface combatant ships and describe desirable characteristics that such a
ship should have. The experts examined such characteristics as speed,
range, manning, and the ability to operate helicopters and unmanned
vehicles. The workshop participants also concluded that a potential
littoral ship should

o  be capable of networking with other platforms and sensors,

o  be useful across the spectrum of conflict,

o  be able to contribute to sustained forward naval presence,

o  be capable of operating manned vertical lift aircraft,

o  be capable of operating with optimized manning,

o  have an open architecture and modularity,

o  be capable of operating manned and unmanned vehicles, and

o  have organic self defense capabilities.

The results of the Naval War College study, which was completed in July
2002, were used as a baseline for further developing the concepts for LCS.

At this point the Navy's analysis was focused on a single solution to
address littoral capability gaps-a new warship along the lines of LCS.
Between April 2002 and January 2004, the Navy conducted an analysis of
multiple concepts to further define the concept that would address gaps in
the littorals. The analysis began by examining five different ship
concepts for LCS (later focusing on three concepts for another stage) and
provided the Navy with insight into the trade-offs between features such
as size, speed, endurance, and self defense needs. The analysis was
performed by the Naval Surface Warfare Center, Dahlgren Division, and drew
upon expertise throughout the Navy.

The Office of the Secretary of Defense and the Joint Staff were concerned
that the Navy's focus on a single solution did not adequately consider
other ways to address littoral capability gaps. Based on these concerns,
in early 2004, the Navy was required to more fully consider other
potential solutions. The publication of new guidance on joint capabilities
development in June 2003,9 also led the Navy to expand its analysis beyond
the single solution of the proposed new ship to include other potential
solutions to littoral challenges.

As part of its resulting analysis, the Navy defined littoral capability
gaps, developed requirements to address those gaps, and identified and
examined 11 nonmateriel and 3 materiel solutions across the joint forces
that could be used to mitigate gaps in the littorals. Nonmateriel
solutions refer to the use of different operational concepts or methods to
meet requirements without buying new assets such as additional ships;
materiel solutions are those which involve developing equipment or
systems, such as ships and aircraft. The solutions were analyzed to
determine the feasibility and risk in mitigating the gaps. The Navy's
assessment of feasibility centered on the extent to which each solution
addressed the mine, antisubmarine, and surface capability gaps. The Navy's
assessment of risk centered on the impacts of each solution on (1) the
success of potential operations in the littorals, (2) the sensitivity of
diplomatic

9 This is referred to as the Joint Capabilities Integration and
Development System, which is meant to identify joint capabilities that
allow joint forces to meet the full range of future military challenges.
The current version of this guidance is dated March 12, 2004.

considerations, such as the military support of other nations, and (3) the
financial considerations involved in choosing that solution.

Two additional materiel solutions, that centered on maritime patrol
aircraft and modified DDG-51 destroyers, were added to the Navy's analysis
as a result of input from the Office of the Secretary of Defense's Program
Analysis and Evaluation office and the Acquisition, Technology and
Logistics office. The Office of the Secretary of Defense and the Joint
Staff also provided specific questions to the Navy for further
clarification of the Navy's ongoing analysis. With these additions, the
Program Analysis and Evaluation office approved the Navy's completed
analysis as satisfactory to meet the requirements of a full analysis of
alternatives for the LCS program. Table 2 shows the materiel and
nonmateriel solutions presented in the Navy's requirements analysis and
the results of the Navy's analysis of operational feasibility, as well as
operational, diplomatic, and financial risk.

Table 2: Navy's Comparison of Materiel and Nonmateriel Solutions for Mitigating
                             Gaps in the Littorals

       Materiel solutions       Gap mitigation     Overall        Navy's risk 
                                                 feasibility       assessment 
       New class of ships        Significant      Feasible         Negligible 
          tailored to           antisubmarine,               operational risk 
                                                                   Negligible 
    address maritime access   surface, and mine               diplomatic risk 
tasks mission needs (LCS). warfare mitigation                   Negligible 
                                                               financial risk 
     Additional current and      Significant      Partially        Negligible 
                                antisubmarine,    feasible   operational risk 
programmed forces-includes                                      Negligible 
      mine countermeasures    surface, and mine               diplomatic risk 
            assets.           warfare mitigation                  Significant 
                                                               financial risk 
       System upgrades to        Significant      Partially        Negligible 
            existing            antisubmarine,    feasible   operational risk 
platforms, and additional                                       Negligible 
    platforms if necessary.   surface, and mine               diplomatic risk 
     Supplements ships with   warfare mitigation                  Significant 
     unmanned vehicles and                                     financial risk 
       mission packages.                                     
      Nonsurface combatant       Significant      Partially  Some operational 
            solution            antisubmarine,    feasible         risk       
with emphasis on maritime  surface, and mine               Some diplomatic 
        patrol aircraft.      warfare mitigation              risk Negligible 
                                                               financial risk 
DDG-51 destroyer hull with    Significant      Partially  Some operational 
             three              antisubmarine,    feasible         risk       
                                                                   Negligible 
mission packages for mine, surface, and mine               diplomatic risk 
antisubmarine, and surface warfare mitigation               Some financial 
            warfare.                                                     risk 

      Nonmateriel solutions      Gap mitigation Overall           Navy's risk 
                                       feasibility                 assessment 
                                       Significant                            
                                antisubmarine, Partially   Some operational   
Use existing force structure         feasible                 risk
(Combination of assets from                                     Negligible 
    carrier and expeditionary   surface, and mine warfare      financial risk 
          strike groups)               mitigation                  Negligible 
                                                              diplomatic risk 
                                Significant antisubmarine  Some operational   
Use existing force structure    Partially feasible            risk         
                                mitigation; partial mine           Negligible 
     (independent submarines)      warfare mitigation;         financial risk 
                                  little to no surface             Negligible 
                                   warfare mitigation         diplomatic risk 
                                Significant antisubmarine Some financial risk 
Use existing force structure  and Partially feasible   
    (maritime patrol aircraft        surface warfare        Some diplomatic   
         and helicopters)       mitigation; partial mine       risk Some      
                                         warfare           operational risk   
                                      Little to no                            
                                  antisubmarine and Not           Significant 
Use existing force structure         feasible              diplomatic risk
       (Land based tactical     mine warfare mitigation;   Some operational   
       aviation for surface      partial surface warfare  risk Some financial 
             warfare)                                            risk         
                                      Little to no                            
                                antisubmarine, mine, Not          Significant 
Use existing force structure         feasible             operational risk
       (Long range bombers)        and surface warfare    Some financial risk 
                                       mitigation         
                                                            Some diplomatic   
                                                                 risk         
                                      Little to no                            
                                antisubmarine, mine, Not          Significant 
Use existing force structure         feasible             operational risk
                                   and surface warfare             Negligible 
    (Theater-national overhead         mitigation             diplomatic risk 
             systems)                                         Negligible      
                                                            financial risk    
                                      Little to no                            
        Assign mission to         antisubmarine and Not           Significant 
           nonmilitary                  feasible             operational risk
                                mine warfare mitigation;  Some financial risk 
              force              partial surface warfare    Some diplomatic   
                                       mitigation                risk         
                                      Little to no                            
      Not entering contested    antisubmarine, mine, Not          Significant 
            littorals                   feasible             operational risk
                                   and surface warfare            Significant 
                                       mitigation             diplomatic risk 
                                                          Some financial risk 
      Preemptive actions to      Partial antisubmarine,           Significant 
            eliminate            mine, and Not feasible      operational risk 
              threat                 surface warfare              Significant 
                                       mitigation             diplomatic risk 
                                                              Negligible      
                                                            financial risk    
                                 Partial antisubmarine,                       
    Assign tasks to coalition      mine, and Partially            Significant 
             partners                   feasible             operational risk
                                     surface warfare              Significant 
                                       mitigation             diplomatic risk 
                                                          Some financial risk 
                                      Little to no                            
                                antisubmarine, mine, Not          Significant 
     Tolerate capability gaps           feasible             operational risk
          (Accept risk)            and surface warfare            Significant 
                                       mitigation             diplomatic risk 
                                                              Negligible      
                                                            financial risk    

Source: Navy analysis.

Based on its analysis, the Navy concluded that the materiel and
nonmateriel solutions they examined would not provide better operational
and cost effective solutions than the proposed LCS to perform the littoral

missions. A number of factors were analyzed, including the feasibility of
using other surface and non-surface force solutions and the risk
associated with those options. Four nonmateriel solutions were considered
to be partially feasible for mitigating the gaps in the littorals, while
seven other solutions were considered not to be feasible. Partially
feasible nonmateriel solutions included the use of maritime patrol
aircraft, submarines, and a mix of air and sea assets from carrier and
expeditionary strike groups. The most feasible solution considered using a
combination of existing forces from carrier and expeditionary strike
groups. However, the Navy determined that during a major combat operation,
this solution would not be feasible because other mission objectives
focused on directing operations onto shore would take a higher priority.
Some of the materiel solutions included expanding existing forces,
upgrading existing forces, or procuring a new class of platforms tailored
for focused missions.

Using a number of studies of threats and analyses of potential military
operations in the littoral regions, the Navy developed requirements for
the LCS that addressed the identified capability gaps and likely threats
in the littorals. This analysis supported revised DOD and Joint Chiefs of
Staff requirements for shipbuilding acquisition programs. The Navy
identified capability gaps in the littorals by measuring the ability of
the current and programmed joint forces to accomplish a number of tasks
across a range of operating conditions and standards. The Navy concluded
that based on completing the tasks in the littorals under the established
measures of effectiveness, it lacked sufficient assets and technology to
fully mitigate the gaps. For example, under mine warfare the task for
clearing routes for transit lanes covering a specific area within a 7 day
period creates a capability gap because the Navy concluded that its force
structure lacked the number of assets (mine countermeasures ships,
destroyers with remote mine-hunting systems, and the appropriate mine
countermeasures helicopters) to fully mitigate the gap in the littorals
under the operational timeline of seven days. Table 3 shows examples of
tasks for each focused mission, the measures of effectiveness, and the
capability gap that exists under the current and programmed force
structure.

 Table 3: Examples of Mission Warfare Tasks and Related Capability Gaps in the
                                   Littorals

                                              Capability gaps identified with 
                                                        current and           
        Mission task      Criteria to measure   programmed force structure    
                                success       
       Mine Warfare:      Clearing transit          Inadequate number of mine 
                          lanes within 7 days          countermeasures assets 
Establish and maintain                     in the force to clear transit   
        mine-cleared                          lanes within seven days.        
           areas                              

Antisubmarine warfare: Protect joint operating areas

Detecting submarines at 90 percent success rate

Inadequate number of assets and technology to detect submarines in shallow
water at 90 percent success rate.

     Surface warfare: Escort through Neutralizing large sets of small boats

choke points

                                in a single raid

Gaps exist in coverage areas in defeating 50 or more small boats, due to
shortfall in the numbers of assets. Surface combatant ships and
helicopters only provide self defense protection.

Protect port Neutralizing small sets of       Inadequate number of surface 
                               small boats               combatant assets and 
                     in a single raid         technology exists for defeating 
                                                      small boat raid in port 
                                              operating area. Helicopters     
                                                  provide self defense        
                                           capability only in port operating  
                                                         area.                

                         Source: GAO from Navy sources.

    LCS Requirements Analysis Did Not Cover Some Threats LCS May Face

We analyzed the requirements the Navy developed to address littoral
capability gaps and used to support the LCS program, tracking each
requirement in the mine, antisubmarine, and surface warfare areas back to
the capability gaps and threats identified by the Navy in their
requirements development process. We found no inconsistencies in the
specific requirements for LCS illustrated in the documents required as
part of the joint capabilities integration and development system.
However, the requirements the Navy arrived at for LCS's surface warfare
capabilities were focused on small boats, and this did not include an
analysis of the impact of larger surface threats in the littorals. The
Navy focused the surface threat on swarms of small boats, characterized as
Boston Whalers, capable of operating at high speeds and employing shoulder
mounted or crew served weapons, such as light machine guns. These boats
can conduct surprise, simultaneous, short range attacks from or near
shorelines. The Navy measured its current and programmed capabilities
against defeating swarms of small boats in high numbers. For example, to
determine the capability gaps and measures of effectiveness for escorting
ships through choke points, the Navy measured its force structure against
defeating large numbers of small boats. However, larger threats, such as
missile-armed patrol boats and frigates, are also identified in the Navy's
LCS concept of operations and threat studies as threats that LCS may face
in the littorals. Such vessels may be armed with medium caliber guns,

torpedoes, and antiship missiles. These threats could present additional
risk to LCS operations.

Some DOD and Navy officials have raised concerns about the extent to which
the LCS may face larger threats than it is capable of defending against.
Navy officials agreed that the surface threat was focused exclusively on
swarms of small boats and told us that LCS is not intended to combat
larger threats. The Navy found no capability gap with respect to the
larger surface threat, because there is sufficient capability in the
existing fleet to counter the threat. Further, Navy officials stated that
if a larger surface threat were encountered, LCS would be able to call
upon the assistance of other U.S. forces in the area, such as tactical
aviation or larger surface warships. In a major combat operation, LCS
squadrons would be able to draw upon assistance of those nearby Navy or
joint forces in the face of a larger surface threat in the area. However,
according to the LCS concept of operations, in addition to operating with
other U.S forces on a regular basis, LCS is intended to operate
independently of those forces, depending on the type of mission and
circumstance. When operating independently, such as during routine
deployments to littoral waters, LCS may not be able to call upon
assistance from larger U.S. forces. This may impede LCS operations, such
as forcing the LCS to withdraw from an operating area, a situation
contrary to the Navy's goals. Since the Navy did not analyze the impact of
larger surface threats on LCS operations, the extent of the risk and the
impact on U.S. operations is not known.

  A Detailed Concept of Operations Has Been Developed for LCS but Faces a Number
  of Challenges in Implementation

Although there are no formal criteria for developing a concept of
operations, the Navy has developed both a broad concept and more detailed
plans as to how the LCS and its mission systems will be used to meet
requirements. The concept of operations also includes several challenges
that, if not met, may increase the risk in actual LCS operations. However,
the Navy has not yet fully considered the LCS concept of operations in the
force structure and procurement plans for the MH-60 helicopter, which is
critical to all LCS missions. The Navy has recognized these risks and is
attempting to address them. However, if these efforts are not successful
within the time constraints of the schedule, the Flight 0 ships may not
provide the planned capability or the level of experimentation needed to
inform the Flight 1 design.

The Navy has developed a broad concept of operations document for LCS.
Though there are no formal guidelines that describe how the concept of
operations should be written or the level of detail it should contain, it
is a

high level requirements document that describes how the user (in this
case, the Navy) will use the weapon system to address mission needs. The
concept of operations can also be used as guidance in developing testable
system and software requirements specifications. In particular, the LCS
concept of operations describes how the ship will contribute to U.S. Joint
Force operations in countering threats in the littorals. These include
mine warfare (detecting and neutralizing mines), antisubmarine warfare
(detecting and engaging hostile submarines), and surface warfare (detect,
track, and engage surface threats). In addition to these focused missions,
the LCS concept of operations discusses how the LCS can perform inherent
missions, such as support for special operations forces, maritime
interception operations and supporting homeland defense related missions.
For example, the LCS concept of operations for maritime interception
operations envisages use of the ship's core crew, and any additional
personnel in case of operations in higher threat areas, to provide boat
crews and boarding teams to board suspect vessels as well as using an
embarked helicopter for assistance. The concept of operations is directed
at Flight 0 but also provides a vision for follow-on ships. The document
has also been used to build consensus among warfighters, the acquisition
community, and the various industry teams involved in building LCS as to
how the ship is intended to be used.

The development process for the LCS concept of operations began with the
Navy Warfare Development Command in late 2002 when it created the first
version of the Concept. The document described the projected threat
context, capabilities, and operational employment of LCS to help industry
with their designs. The Command based this version of the concept of
operations on their experience with various pre-LCS studies and war games
that employed fast, small ships with modular payloads. The Navy
subsequently updated and expanded the concept of operations with new
information that related to critical areas that impact, and are impacted
by, LCS operations, including doctrine, training, and personnel. The Navy
approved the LCS concept of operations in December 2004.

The Navy is also continuing to refine concepts for how LCS and its mission
systems will be used to address anti-access threats. These efforts include
a Concept of Employment, which describes the way mission package systems
are intended to be used to meet warfare requirements, and an analysis of
performance data for individual systems in order to inform experiments on
the actual operation of LCS mission systems. In addition, the Navy will
incorporate lessons learned from Flight 0 operations into future versions
of the LCS concept of operations.

We compared the LCS concept of operations to the approved requirements for
the ship and the capability gaps identified by the Navy and found that
each of the capability gaps and LCS mission requirements were addressed in
the concept of operations. For example, the requirements to address the
mine warfare capability gap call for mines to be detected, identified, and
neutralized. The concept of operations discusses how the LCS will address
these requirements by using a combination of helicopters and unmanned
vehicles to detect and identify mines, and either a helicopter or an
explosive ordinance disposal detachment with unmanned underwater vehicles
to neutralize mines.

The LCS concept of operations includes several operational and logistical
challenges that may increase the operational risk for LCS. One challenge
is to reduce the numbers of sailors required to operate the ship's
critical mission systems. This challenge is exacerbated by the limited
space on the ship. If this cannot be achieved, the Navy may have to make
significant changes to the design or capability of follow-on ships.
Another challenge is the logistics support required to meet the Navy's
goal of changing LCS mission packages within 4 days of arriving at an
appropriate facility. A number of factors frame this challenge, including
where packages are to be stored, how they are to be transported, and the
proximity of LCS operating areas to ports required to swap mission
packages. Any of these factors could increase the time required for a
change in LCS mission packages once the decision has been made to do so.
Other challenges include training; command, control, communications,
computers, and intelligence; survivability; and the impact on the Navy's
force structure.

The two versions of the MH-60 helicopter10 intended for use with LCS
embody a number of these challenges. The helicopter is vital to each of
the LCS's focused missions as well as some of the ship's inherent
missions, such as maritime intercept operations. In order to operate a
helicopter from LCS, a detachment of flight and maintenance personnel are
required. The Navy's current helicopter detachments on surface warships
each number at least 20 people. When combined with the ship's core mission
crew, this number could exceed the capacity of LCS to house crews, thereby
limiting the ability of LCS to operate other mission package systems and
reducing the ship's operational effectiveness.

10 MH-60R and MH-60S.

Additionally, the Navy's plans for buying and fielding MH-60s do not yet
include the quantities needed for the numbers of follow-on LCS ships the
Navy intends to buy. Since the helicopter is critical for LCS's concept of
operations, the ship's operations will be significantly limited if the
helicopters are not bought and made available. To do this, the Navy needs
to plan for the numbers of helicopters needed, modify its procurement
plans, obtain the funds, build the helicopters, deliver them, conduct
operational evaluations, and train the crews.

The Navy recognizes these risk areas and has mitigation efforts underway
in each area. For example, in the risk area of manning reduction, the Navy
is using the "Sea Warrior" program to cross train sailors so that they are
more able to multitask and perform a wider set of duties. The Navy is also
conducting additional analysis to validate the maximum number of
crewmembers needed and will make changes to crew accommodations if
necessary. Further, the Navy is analyzing ways to reduce the size of
helicopter detachments and is currently reevaluating its helicopter force
structure and procurement plans to provide the MH-60s needed for LCS. In
addition, the Navy has established an LCS risk management board to track
and manage each of the risk areas as well as monitor the effectiveness of
risk mitigation efforts. Table 4 lists the challenges for LCS and examples
of Navy mitigation efforts.

      Table 4: Challenges for LCS and Examples of Navy Mitigation Efforts

Challenge Description Examples of Navy mitigation efforts

Manning Crew size of core crew and for mission packages  o  Top-down
manning requirements analysis.

could overcome capabilities of the ships as built  o  Early involvement
with human systems integration and manning communities.

o  Industry integration response.

o  Navywide effort to analyze and change how sailors are trained in order
to allow fewer sailors to monitor and maintain a greater number of the
ship's systems.

            Need for innovative methods o  13 Sailors identified and detailed 
Training       to cross-train                  to report to the LCS        
                  personnel in order to     unit in Norfolk in January. The   
                achieve reduced manning             Naval Personnel           
                      levels               Development Command will work with 
                                                    these sailors to          
                                           mature and develop the "Revolution 
                                                   in Navy Training"          
                                             approach for developing hybrid   
                                                        sailors.              
                                        o   Combined Navy-Industry team has   
                                                      developed a             
                                            breakdown of specific skill sets  
                                                (knowledge, skills, and       
                                                      abilities).             
                                        o        Training will occur at       
                                            contractors' facilities for the   
                                               Seaframe and mission packages. 
                                                      This will include hands 
                                           on training and simulations in the 
                                           intended environment.              

                   Infrastructure needed to    o   Navy is working with both  
Sustainability/ sustain LCS while                seaframe contractors to   
                                                           classify personnel 
                   deployed, including storing     requirements in performing 
      Logistics    and swapping                                    integrated 
                        mission packages;         logistics support tasks in  
                       maintaining mission               final design.        
                   technologies while              Realigning current funding 
                   deployed; and viability of             to support required 
                   long-term unmanned vehicle  o         integrated logistics 
                   operation                       support tasking and making 
                                                           this risk an award 
                                                          fee issue.          

Command, control, communications, computers, and intelligence General
bandwidth, communication of data from unmanned vehicles to ship, and data
links/communications with other fleet assets in support of LCS

o  Develop prototype mine, antisubmarine, and surface warfare mission
planning applications.

o  Utilize unmanned vehicle control residual capability from technology
demonstration.

o  LCS command and control iterative process team has been working
directly with the two seaframe industry teams to insure that the seaframes
include sufficient core communications systems/equipment to operate the
Flight 0 mission packages.

          Survivability Ability of LCS to operate in hostile littoral

o  LCS seaframe and mission packages teams are working to established Navy
survivability requirements.

environments, including structural and operational aspects

Force structure 	Integration of elements critical to LCS operations  o 
The Navy has conducted numerous force structure (e.g., adequate numbers of
appropriate studies including the Analysis of Multiple Concepts and

helicopters in the fleet) Navy headquarters ongoing force structure

assessments.

Source: GAO from U.S. Navy sources.

None of these challenges are insurmountable, given enough time and other
resources to address them. However, if the Navy is unsuccessful in
mitigating the risk areas by the time the first Flight 0 ships are
delivered,

  Immaturity in Mission Package Technologies Could Decrease the Experimental and
  Operational Utility of Flight 0 Ships

LCS may be unable to meet even the limited mission capability planned for
Flight 0. The Navy plans for a period of about 12 months between the time
of delivery of the first Flight 0 ship and the start of construction for
the first Flight 1 ship, provided the first Flight 0 ship is available on
time. Further, only one mission package (mine warfare) will be available
for testing and experimentation during that time. The last two Flight 0
ships will not be available before detailed design and construction of
Flight 1 begins. The second Flight 0 ship and the first mission packages
for antisubmarine and surface warfare will be delivered just before
detailed design and construction of Flight 1 begins. Delays caused by any
of the risk areas discussed above might further reduce the already limited
time to adequately experiment with one Flight 0 ship in order to integrate
lessons learned into planning and designing for Flight 1.

A number of the technologies chosen for the LCS mission packages are not
mature, increasing the risk that the first ships will be of limited
utility and not allow sufficient time for experimentation to influence
design for follow-on ships. Our work has shown that when key technologies
are immature at the start of development, programs are at higher risk of
being unable to deliver on schedule and within estimated costs.11 The
remaining technologies are mature although some may require alterations to
operate from LCS. Other issues beyond technology maturity could prevent
some systems from being available in time for the first ship. Some
technologies still in development face challenges going to production,
while other mature technologies may not be available for LCS due to other
Navy priorities. Challenges remain for technologies included on the LCS
seaframe, including those for communications, software, launch and
recovery, and command and control of off-board systems. As a result, the
first Flight 0 ships may not be able to provide even the limited amount of
mission capability envisaged for them. These factors could also impair the

11 The standard we used for assessing technology maturity is the
demonstration of form, fit, and function in an operational environment.
This standard is based on defined technology readiness levels developed by
NASA and adopted by DOD. See GAO, Best Practices: Using A Knowledge-Based
Approach to Improve Weapon Acquisition, GAO-04-386SP (Washington, D.C.:
January 2004). A DOD acquisition instruction also states that technology
should be demonstrated, preferably in an operational environment, to be
considered mature enough for product development in systems integration.
See Department of Defense, Instruction No. 5000.2, Operation of the
Defense Acquisition System, S: 3.7.2.2, May 12, 2003. Technology maturity
levels are discussed further in GAO, Best Practices: Better Management of
Technology Development Can Improve Weapon System Outcomes,
GAO/NSIAD-99-162 (Washington, D.C.: July 30, 1999).

Navy's ability to experiment with the Flight 0 ships and adequately gather
and incorporate lessons learned into the designs for the Flight 1 ships.

In order to perform its focused missions of finding and neutralizing
mines, submarines, and small boats in the littorals, LCS will deploy
mission packages consisting of helicopters and unmanned vehicles with a
variety of sensors and weapons. Each of the interchangeable mission
packages is tailored to a specific mission and is optimized for operations
in the littorals. By using a mix of manned and unmanned vehicles, program
officials hope to increase the areas covered and decrease the time
required by existing systems. The use of multiple mission packages is to
be enabled by the design of the ship itself which will use a number of
common connections or interfaces that will work regardless of the
individual technologies or systems used in the mission packages.

In order to speed the development of the first LCS, the Navy planned for
the mission packages to comprise technologies that are either already
demonstrated in an operational environment and used by the Navy, and
therefore fully mature, or very close to the end of the development cycle
and near full maturity. However, in some cases the program office chose
technologies that have not completed testing and are not considered
mature. Some of these technologies will be delivered to LCS as prototypes
or engineering development models and may not be fully mature. The program
office has used an informed process in choosing which technologies to
pursue for Flight 0, tracking the maturity of technologies and the plans
for further development. Those technologies selected by the program that
lack maturity are being monitored and decisions about their inclusion are
made based on results of further testing. Once initial choices were made,
the Navy used an independent panel of experts, consisting of Navy and
industry technology experts, to reassess the maturity of technologies and
the efforts needed for risk reduction. The assessment paid particular
attention to technologies at low levels of readiness, such as the
Non-Line-Of-Sight missile launching system (also referred to as NetFires)
and the environment in which the technologies are to be used.

The first mission package to be developed will focus on mine warfare and
will align with the delivery of the first ship in January 2007. The
systems within this mission package contain both mature and immature
technologies, although some mature technologies, like the remote
minehunting vehicle, may need modifications to operate from LCS. Table 5
shows the maturity and availability of mission package technologies for
mine warfare, based on the Navy's current assessment. The first mission

package is intended to be delivered with the first Flight 0 ship in fiscal
year 2007.

Table 5: Mine Warfare Mission Package Status

                                                   Available  
                Mission               Role  Mature in FY 2007     Issues      
Vertical takeoff unmanned aerial  Detect   No      Yes        Still in     
           vehicle & Coastal                                    development   
      battlefield reconnaissance                              
            analysis system                                   
     Remote mine-hunting vehicle &   Detect  Yes      Yes       May require   
             AQS-20A sonar                                      alterations   
        Battlefield preparation      Detect  Yes      Yes     Has performance 
     autonomous underwater vehicle                                   problems 
      Sculpin undersea autonomous    Detect  Yes      Yes     
                vehicle                                       
           MH-60s helicopter                  No    Unknown    Schedule risk  

o  AQS-20A sonar Detect Yes Unknown Linked to helicopter

o  Airborne laser mine detection system Detect Yes Unknown Linked to
helicopter. Only system for detecting floating mines in shallow water

o  Rapid airborne mine clearance system Neutralize Yes Unknown Linked to
helicopter

o  Organic airborne surface influence sweep system Neutralize No Unknown
Linked to helicopter

o  Airborne mine neutralization system Neutralize No Unknown Linked to
helicopter

Unmanned surface vehicle & influence sweep system Neutralize No Unknown
Still in development

Navy mine clearance team Neutralize Yes Yes Still in development

Source: GAO from U.S. Navy sources.

A number of critical mine warfare systems are not mature or will not be
ready due to the unavailability or immaturity of subsystems. This could
have a negative effect on LCS as the loss of certain technologies leads to
a decrease in capabilities. The MH-60S helicopter is a key system for mine
warfare employing technologies for both the detection and the
neutralization of mines in shallow water. While the helicopter has proven
its ability to detect mines, two of the technologies for neutralization
lack maturity. Testing on neutralization technologies continues but is not
expected to complete until after delivery of the first ship, limiting the
ability of LCS to destroy sea based mines. One system which could fill the
gap in this area, the unmanned surface vehicle, also lacks maturity in key
systems and ultimately may not be available.

The first systems for antisubmarine and surface warfare packages of Spiral
Alpha are scheduled to be available at the time the second Flight 0 ship
is delivered in fiscal year 2008. Of these technologies, few are currently
mature. Two of the systems used for detecting submarines, the unmanned
surface vehicle and remote mine-hunting vehicle, lack maturity in key

subsystems and will be delivered to LCS while still experimental. If these
systems fail to meet requirements, LCS may have to depend on the MH60R
helicopter to find submarines. The MH-60R is an important system in both
these missions, and while fully mature in the antisubmarine warfare
configuration, it has not yet completed testing for surface warfare and is
not expected to do so until September 2005. The helicopter has potential
capability in both detecting and neutralizing surface targets, such as
small boats, due to the types of sensors and weapons it carries. Tables 6
and 7 show the maturity and availability of mission package technologies
for antisubmarine and surface warfare, respectively. These packages are
scheduled to be delivered with the second Flight 0 ship in fiscal year
2008.

             Table 6: Antisubmarine Warfare Mission Package Status

Available in FY 2008

Unmanned surface vehicle & sensor  Detect No  Unknown Still in development 
                systems                                  
       Advanced deployable system     Detect No    Yes   Still in development 
     Remote mine-hunting vehicle &    Detect No  Unknown Still in development 
             sensor systems                              
           MH-60R helicopter                 Yes Unknown    Schedule risk     

o  Mk 54 torpedo Neutralize Yes Unknown Linked to helicopter

o  Airborne low frequency sonar Detect Yes Unknown Linked to helicopter

o  Sonobuoys Detect Yes Unknown Linked to helicopter

Torpedo countermeasures on ship Defense No Yes

Vertical takeoff unmanned aerial vehicle & Communications No Unknown Still
in development communications equipment

Source: GAO from U.S. Navy sources.

Table 7: Surface Warfare Mission Package Status

Available in FY 2008

Unmanned surface vehicle & electro-optical Detect No Unknown Still in
development infrared sensors

o  30mm gun system Neutralize No Yes Still in development

o  NetFires Missile System Neutralize No Yes Still in development

o  Running gear entanglement system Neutralize No Yes Still in development

Vertical takeoff unmanned aerial vehicle & electro-Detect No Yes Still in
development optical infrared sensors

MH-60R helicopter & sensor systems Detect No Unknown Schedule risk

o  GAU 16 gun system Neutralize No Unknown Linked to helicopter

o  Hellfire Neutralize Yes Unknown Linked to helicopter

     NetFires missile system on ship Neutralize No Yes Still in development

         30mm gun system on ship Neutralize No Yes Still in development

Source: GAO from U.S. Navy sources.

In addition to challenges posed by the lack of mature technologies, there
may be other challenges in obtaining some mission package systems in time
for the first ships. The unmanned surface vehicle, a system used in all
three mission packages, is being developed through an advanced concept
technology demonstration12 and does not yet have a planned production
schedule. The current development program for the unmanned surface vessel
ends in fiscal year 2005 and seeks only to prove the military utility of
the vehicle. In order to procure the systems needed for LCS, a new program
will have to be established to conclude development, finalize design and
start production of vehicles.

Other technologies have planned production schedules but need to complete
significant demonstrations and tests before they are able to deploy
operationally. The vertical takeoff unmanned aerial vehicle, another
system used in all mission packages, underwent a major redesign, and the
first deliveries to LCS will not represent a final design. The remote
mine-hunting vehicle only recently began development as an antisubmarine
warfare platform and remains in development as an

12 Advanced concept technology demonstrations are DOD efforts to provide
mature or maturing technology prototypes to the warfighter in order to
test concepts and applicability of the technology and evaluate the extent
to which further acquisition is needed.

advanced concept technology demonstration. These factors could jeopardize
the dates established for the delivery of the LCS mission packages and may
ultimately affect the ability of LCS to execute many of the missions
assigned to it.

Other technologies, while mature, may not be available to LCS in time for
the ship's deployment due to other Navy priorities. For example, the MH60
helicopters, in both the MH-60R and MH-60S configurations, are scheduled
to complete testing in fiscal year 2007, but may not be fully available
until fiscal year 2009, assuming the Navy makes them available for LCS,
because of training requirements. This could have an impact on LCS
capabilities in all missions. The MH-60S is a key system for mine warfare,
and the lack of this helicopter results in the loss of some capability, in
terms of detecting some mines, and limitations in the ability to
neutralize others. While LCS will still be capable of detecting and
destroying mines in littorals without the helicopter, it will do so more
slowly, which minimizes operational effectiveness. If the MH-60R is
unavailable, the ability to neutralize submarines from LCS is severely
compromised as no other mission package system is planned to provide a
neutralization capacity. Older, less capable, versions of the MH-60
helicopter can be used in this mission but changes would be needed in the
ship's communications systems. The Navy acknowledges that no helicopters
will be available for LCS operations until fiscal year 2009 and are
working to align crew training schedules to permit operations with LCS.

Challenges also remain for systems on the LCS seaframe, including
technologies for communications, software, launch and recovery, and
command and control of off-board systems. Further tests of these systems
are expected before ship installation.13

In addition to limiting the operational capability of the Flight 0 ships,
technology maturity and availability issues could limit the time available
for the Navy to adequately experiment with operation of the seaframe and
mission packages and gather valuable lessons for incorporation into Flight
1 ships. Detailed design and construction of the first Flight 1 ship is
currently scheduled to begin in fiscal year 2008. Spiral Alpha mission
packages for antisubmarine warfare and surface warfare are not

13 The exact nature of the seaframe technologies is considered competition
sensitive and is not discussed in detail in this report.

  Procurement Cost Estimates Are Uncertain

scheduled for delivery to the Flight 0 ships until fiscal year 2008, just
as detailed design and construction for Flight 1 is set to begin. If
technology immaturity causes any of the mission packages systems to slip
to later delivery dates, the opportunity to experiment and gather lessons
learned from these systems aboard the Flight 0 ships would be lost, unless
the time allowed for such experimentation is extended. If the helicopters
are not available for operations until fiscal year 2009, input on the full
impact of their operations could be lost as well.

The cost to procure the first flight of LCS ships remains uncertain,
particularly regarding the mission packages. The basis of the procurement
costs for the LCS seaframe appears to be more defined because the Navy has
conducted a series of cost analyses to investigate the challenges in
detailed design and construction. The Navy seeks to stabilize seaframe
costs by establishing a $220 million cost target and working to meet this
target by trading between capability and cost while assuring that seaframe
performance meets threshold requirements. Nevertheless, seaframe costs
could be affected by changes to ship design and materials that might be
necessary as a result of changes to naval ship standards. As many of the
systems for the mission packages lack maturity, cost data for these
technologies are not as firm. Other mission package costs are not covered
by LCS program cost analyses. For programs like LCS, an independent cost
estimate by the Office of the Secretary of Defense normally provides
additional confidence in program cost estimates, but such an estimate will
not be done on LCS until Flight 1. In addition to issues with procurement
costs, nonrecurring development costs for the LCS could expand, as systems
both in the mission packages and the seaframe remain in development.

The Navy's procurement cost target for Flight 0 is about $1.5 billion
(fiscal year 2005 dollars). The cost target for each of the four Flight 0
ships is approximately $370 million. This includes $220 million for the
seaframe and approximately $150 million for mission packages (the cost of
six packages averaged over four ships).

The Navy currently estimates that the mission packages for Flight 0 will
cost approximately $548 million, which is approximately $137 million for
the six packages averaged over four ships. This is about $13 million below
the mission package target. Table 8 shows the current cost estimates for
the mission packages for Flight 0. The estimated cost for seaframe
detailed design and construction is considered competition sensitive and
is not discussed in detail in this report.

         Table 8: Current Estimated Costs for Flight 0 Mission Packages

Fiscal year 2005 dollars in millions

                    Item Individual cost Quantity Total cost

             Vertical takeoff unmanned aerial vehicle  $37.0    4      $148.0 
                          Advanced deployable systema   12.3    1        12.3 
                                 Mine warfare package  102.8    2       205.6 
                        Antisubmarine warfare package   67.0    2       134.0 
                              Surface warfare package   23.8    2        47.6 
                           Total for mission packages                   547.5 

Source: GAO from Navy data.

aThe advanced deployable system is used for detection of submarines.

The Navy has conducted a number of cost reviews for procurement of the LCS
seaframe and mission packages to support decision making at key points in
the program. One of the most detailed of these reviews took the form of a
cost assessment used to support the program's initiation. In this
assessment the program office analyzed cost data, provided by the
contractor, to establish a preliminary cost and challenged some
assumptions behind these costs. The Cost Analysis and Improvement Group of
the Office of the Secretary of Defense also performed cost assessments for
Flight 0. More recently, a cost estimate for procuring the seaframe and
mission packages of Flight 0 was performed by the Navy and became the
official program estimate. A cost estimate differs from an assessment in
that it goes into greater depth in challenging assumptions behind costs
provided by the contractors and may use different methodologies and
assumptions to arrive at a final number. As a result, the program estimate
may differ from the price provided by contractors and offers a more
detailed cost analysis for decision making.

The basis of the procurement costs for the LCS seaframe appears to have
become more defined over time as successive cost analyses have been
developed to anticipate the challenges in detailed design and
construction. Analyses included recommendations to add funds to mitigate
changes to seaframe design as well as firm fixed price quotes for some
materials. In addition, the Navy seeks to manage seaframe costs by
establishing a $150 to $220 million cost range, which the Navy considers
aggressive, and has been working to meet this range by trading between
capability and cost while assuring that seaframe performance meets
requirements. Any capabilities in the seaframe that exceed the
requirements established by the Navy are considered trade space areas, in
which less expensive systems may be substituted at the cost of lower
performance. Each trade

is analyzed for impact to cost and operational capability by a team of
program officials and is fully vetted through the chain of command.

One factor that increases risk to seaframe cost estimates is applying the
current changes in the naval vessel rules for design and construction of
surface ships. The unconventional hull designs and materials used in both
Flight 0 LCS designs reflect new types of ships the Navy has not hitherto
built. Changes to the rules are occurring at the same time as development
of the LCS. The process of meeting these rules could lead to changes in
the designs and materials used. Such changes may increase uncertainty in
seaframe procurement and life-cycle costs.

The costs for the first spiral of mission packages are less defined, as
many of the technologies are not mature. For example, the unmanned surface
vehicle remains in an advanced concept technology demonstration program
into fiscal year 2005. This program seeks only to prove the military
utility of the vehicle. Any cost data that emerges as a result of tests
and construction of test vehicles does not accurately represent the final
cost of the system and is thereby preliminary. The vehicle may also use
different subsystems or have different capabilities when used on LCS. This
would further change actual procurement costs.

Additional confidence in a program's costs is usually gained through an
independent cost estimate done outside the Navy. According to a DOD
acquisition instruction, an independent cost estimate should be completed
as part of the process that normally authorizes the lead ship, referred to
as the Milestone B decision.14 For programs like LCS, an independent
group, like the Cost Analysis and Improvement Group, is required to
perform such an estimate. While this group performed assessments of Flight
0 costs, it has not yet performed a cost estimate for LCS. On the LCS
program, the Flight 0 ships are considered to be predecessors to the
Milestone B decision. The Milestone B decision will authorize the first
Flight 1 ship. The Navy considers this to be the point at which an
independent estimate is required. An independent cost estimate is thus
planned for authorization of Flight 1 in January of 2007. While DOD would

14 Department of Defense, Instruction No. 5000.2, Operation of the Defense
Acquisition System, S: 3.7.1.2, May 12, 2003. The statutory basis for this
requirement is 10 U.S.C. S: 2434, which provides that the Secretary of
Defense may not approve the system development and demonstration or the
production and deployment of a major defense acquisition program unless
the Secretary considers an independent estimate of the full lifecycle cost
of the program.

not have been prevented from conducting an independent estimate for Flight
0, given the short time in which the Navy solicited and selected designs
for Flight 0, it is unclear whether there was enough time to do so.

Other mission package costs are not covered by LCS program cost analyses
but could have an effect on the broader Navy budget. For example, mission
package costs do not include procurement costs for the MH-60R and MH-60S
helicopters utilized in LCS operations. The Navy estimates that the
procurement cost for each MH-60R is about $36 million and the cost for
each MH-60S is about $23 million. The number of helicopters acquired by
the Navy is determined by the helicopter concept of operations, which has
not yet been modified to reflect the deployment of LCS. Given the reliance
of LCS mission packages on these platforms, costs for these systems, or
number needed for operations, could increase.

The developmental nature of the mission package technologies may affect
more than the procurement, or recurring, costs of LCS. Development and
integration of technologies on many of the mission package systems is not
complete. Testing for these systems will continue, in some cases, up to
the delivery date of the mission packages. Should these tests not go as
planned, or if more time and money is needed for integration and
demonstration, development costs could rise. Since the development of
mission package systems is only partially funded by LCS, the costs for
continued development could spread to other programs. Alternately, the
decision maybe made to reduce the quantities of certain technologies
aboard LCS, as was the case with the Advanced Deployable system. Some
seaframe technologies remain developmental as well, such as the launch and
recovery systems. Unlike the mission packages, the LCS program office
would assume any increase in development funding that occurs on seaframe
systems.

Conclusions The Navy has embarked on a plan to construct four Flight 0
ships, complete development and procure multiple mission packages,
experiment with the new ships, and commit to the construction of followon
ships in a span of only four years. The Flight 1 and follow-on designs
form the basis of a class of ships that may eventually total more than 50.
At this point, we see three risks that could affect the success of the
program.

First, because the Navy focused the surface warfare threat and
requirements analysis exclusively on small boat swarms, the risks posed by
larger surface threats when the LCS operates independently from nearby
supporting U.S. forces have not yet been assessed.

Second is the availability of the MH-60 helicopter in light of its
criticality to all LCS missions. Experimentation with the MH-60 will
provide key information on mission performance, operations issues such as
manning, and technology maturity. Thus, it is essential that the
helicopters, equipped with the systems needed for LCS missions, be
available for testing on the Flight 0 ships. In addition, if the
quantities of MH-60s are not available for the Flight 1 ships the Navy's
ability to deploy these ships operationally as intended, would be reduced.
Making the MH-60s available requires meeting a number of challenges,
including developing requirements, force structure planning, budgeting,
delivering, and training air crews.

Third, the Navy intends to begin considering multiple designs for Flight 1
in fiscal year 2006 and to begin detailed design and construction of a
single design in fiscal year 2008. By 2007, only one Flight 0 ship will be
delivered, and only one mission package will be available, providing there
are no delays for either ship or mission package. While maturing
technologies and evaluating potential designs for Flight 1 while Flight 0
ships are being delivered could be beneficial, committing to a single
design for follow-on ships before gaining the benefit of tests and
experiments with the two Flight 0 designs increases the risk to the Flight
1 design. The current schedule allows about 12 months for the Navy to
conduct operational experiments to evaluate the first Flight 0 seaframe
design; the mine warfare mission package; and the doctrinal, logistics,
technology maturity and other operational challenges the Navy has
identified before committing to production of follow-on ships. The Navy's
schedule does not allow for operational experimentation with the other
three ships or the antisubmarine or surface warfare mission packages
before Flight 1 is begun. Setbacks in any of these areas further increases
the risk that the Navy will not be able to sufficiently evaluate and
experiment with Flight 0 ships and incorporate lessons learned into the
design and construction of the Flight 1 ships.

To help the Navy assess and mitigate operational, force structure, and
technology risks associated with LCS, we are making the following three
recommendations:

o  	To determine whether surface threats larger than small boats do pose
risks to the LCS when operating independently and to mitigate any risks
the Navy subsequently identifies, we recommend that the Secretary of
Defense direct the Secretary of the Navy to conduct an analysis of the
effect of a surface threat larger than

  Recommendations for Executive Action

                                       o

                                       o

small boats on LCS operations and the impact on other naval forces in
support of those operations.

To address challenges associated with integrating the MH-60 helicopter
into LCS operations, we recommend that the Secretary of Defense direct
that the Navy include in its ongoing evaluation of helicopter integration
with LCS (1) evaluation of the numbers and budget impact of helicopters
required to support future LCS ships and (2) examination of how to address
manning, technology, and logistical challenges of operating the
helicopters from LCS.

To allow the Navy to take full advantage of the technical and operational
maturation of the Flight 0 ships before committing to the much larger
purchases of follow-on ships, we recommend that the Secretary of Defense
direct the Navy to revise its acquisition strategy to ensure that it has
sufficiently experimented with both Flight 0 ship designs, captured
lessons learned from Flight 0 operations with more than one of the mission
packages, and mitigated operational and technology risks before selection
of the design for an award of a detailed design and construction contract
for Flight 1 is authorized.

  Agency Comments and Our Review

In written comments on a draft of this report, DOD generally agreed with
the intent of our recommendations. DOD discussed steps it is currently
taking as well as actions it plans to take to address these
recommendations.

In response to our recommendation that the Navy analyze the effect of a
larger surface threat on LCS operations, DOD indicated that, in addition
to efforts it already has underway to analyze elements of the threats
facing LCS, the Navy will assess the impact of larger surface threats on
LCS as part of the capabilities development process for Flight 1. Using
the analyses required in this process should help the Navy clarify the
extent to which a larger surface threat poses a risk to LCS operations.

In commenting on its plans to address helicopters' needs and challenges,
DOD indicated that it is currently assessing the helicopter force
structure including both manned and unmanned aerial vehicles. While this
may clarify the Navy's helicopter force structure requirements, we
continue to believe that due to the importance of helicopters to LCS
operations and the numbers of LCS the Navy plans to acquire, the Navy
should also

analyze the budgetary impact of potential helicopter force structure
changes.

In response to our recommendation that the Navy revise its acquisition
strategy to ensure time to experiment with Flight 0 designs, DOD stated
that, before award of Flight 1 contracts, it will review the acquisition
strategy to ensure the strategy adequately provides for experimentation,
lessons learned, and risk mitigation. DOD stated that it is balancing the
acquisition risks with the risk of delaying closure of warfighting gaps
that LCS will fill. It also stated that mission package systems will
potentially be spiraled with a different cycle time than the historically
more stable hull and systems that comprise the seaframe. We believe the
separation of development spirals for the mission packages and seaframe
has merit. However, decisions leading to the award of a detailed design
contract for the Flight 1 seaframe must go beyond technology risks.
Because the Navy plans to begin design of the Flight 1 seaframe with a new
development effort and competition, it is important to gain experience
with the two Flight 0 seaframe designs that are being acquired so that the
benefits of this experimentation can be realized in the design and
development of a new seaframe. Experimentation with Flight 0 in terms of
basic mission performance, swapping mission packages, actual manning
demands, and operations with multiple LCS are all factors that could have
a significant effect on the Flight 1 ship design.

DOD also noted that its plan for acquiring LCS provides for multiple
flights. Under this strategy, DOD would have more opportunities beyond the
fiscal year 2008 Flight 1 decision to upgrade mission packages and
seaframes as the 50 or so remaining ships are bought. We have made changes
in the report to reflect this strategy. However, we do not believe it
lessens the value of incorporating experience from Flight 0 operations
into the design for Flight 1.

DOD's written comments are included in their entirety in appendix II.

We are sending copies of this report to the appropriate congressional
committees, the Secretary of Defense, and the Secretary of the Navy. We
will also make copies available to others upon request. In addition, the
report will be available at no charge on the GAO Web site at
http://www.gao.gov.

If you or your staff have any questions concerning this report, please
contact Paul Francis at (202) 512-2811; or Karen Zuckerstein, Assistant
Director, at (202) 512-6785. Key staff members that contributed to this
report are listed in appendix III.

Paul L. Francis
Director, Acquisition and Sourcing Management

Janet St. Laurent
Director, Defense Capabilities and Management

                       Appendix I: Scope and Methodology

To assess the basis of the LCS requirements and the concept of operations,
we obtained and analyzed Navy wargames and operational plans, requirements
documents, and other sources used by the Navy to identify capability gaps
in the littoral waters. We conducted our own analysis of all critical
concept, requirements, and acquisition documents required as part of the
Joint Capabilities Integration and Development system to determine the
extent to which the Navy (1) developed specific requirements to address
capability gaps and examined materiel and nonmateriel solutions to meet
those requirements; and (2) developed a concept of operations that
addressed each of the identified requirements as well as critical
doctrinal, logistical, and operational considerations. We compared the
sources of the requirements for the LCS, such as analyses of military
operations based on specific scenarios and threat assessments to the final
validated requirements document (Capabilities Development Document), and
highlighted each capability gap. We identified the capability gaps in the
Navy's functional analysis for each of the warfare missions-mine warfare,
antisubmarine warfare, and surface warfare. This included looking at the
Navy's standards that were used to measure how well the current and
programmed joint forces could mitigate the warfare threats in the
littorals during a major combat operation. We then reviewed the materiel
and nonmateriel solutions identified by the Navy that could be used as
alternative solutions for mitigating the gaps. We also conducted a
comparative analysis of the Initial Capabilities Document with the
validated requirements in the Capabilities Development Document to
highlight additional gaps. We also compared the requirements, as developed
in the CDD and the Preliminary Design Interim Requirements Document to the
LCS operating concepts and capabilities, as developed in the Navy's two
versions of the concept of operations.

To assess the Navy's progress in defining the concept of operations we
used a gap analysis, similar to the one used for the requirements, to
trace the extent to which the concept of operations were developed. GAO
compared the LCS concept of operations to the ship's requirements
(specifically the Capabilities Development Document) and the identified
capability gaps to determine if the LCS concept of operations fulfilled
the requirements. We also discussed with Navy officials the extent to
which they included doctrinal and operational challenges and the Navy's
assessment of where the risks are stemming from these challenges and their
mitigation efforts.

To assess the progress of technology development in LCS mission packages,
we reviewed the basis of the Navy's estimation of technology readiness and
plans to bring these technologies to full maturity. As a part

Appendix I: Scope and Methodology

of this assessment we analyzed the Technology Readiness Assessment
performed by the Navy and reviewed development and testing plans developed
by the program offices. As a measure of technology maturity we utilized
Technology Readiness Levels, the same metric used by the Navy in the
Technology Readiness Assessment. The standard we used for assessing
technology maturity is the demonstration of form, fit, and function in an
operational environment. This standard is based on defined technology
readiness levels developed by the National Aeronautic and Space
Administration and adopted by DOD.15

15 See GAO, Best Practices: Using A Knowledge-Based Approach to Improve
Weapon Acquisition, GAO-04-386SP (Washington, D.C.: January 2004); GAO,
Defense Acquisitions: Assessments of Major Weapons Programs, GAO-04-248
(Washington, D.C.: March 2004) and Best Practices: Better Management of
Technology Development Can Improve Weapon System Outcomes,
GAO/NSIAD-99-162 (Washington, D.C.: July 30, 1999); and Department of
Defense, Instruction No. 5000.2, Operation of the Defense Acquisition
System, S: 3.7.2.2, May 12, 2003; and Defense Acquisition Guidebook, S:
10.5.2, December 2004.

                       Appendix I: Scope and Methodology

           Table 9: Technology Readiness Levels and Their Definitions

Technology readiness level
(TRL) Description Hardware software Demonstration environment

1. Basic principles Lowest level of technology    None (paper studies None 
observed            readiness.                    and                 
and reported.       Scientific research begins to analysis).          
                       be                                                
                       translated into applied                           
                       research and                                      
                         development. Examples might                     
                                             include                     
                       paper studies of a                                
                       technology's basic                                
                       properties.                                       

2. Technology concept   Invention begins. Once    None (paper studies None 
and/or                  basic                     and                 
application formulated. principles are observed,  analysis).          
                           practical                                     
                           applications can be                           
                           invented. The                                 
                           application is                                
                           speculative and there                         
                                  may be no proof or                     
                                detailed analysis to                     
                           support the assumption.                       
                           Examples are                                  
                           still limited to paper                        
                           studies.                                      

3. Analytical and experimental Active research and development is
Analytical studies and Lab critical function and/or initiated. This
includes analytical demonstration of nonscale characteristic proof of
concept. studies and laboratory studies to individual components

physically validate analytical (pieces of subsystem).
predictions of separate elements of the
technology. Examples include
components that are not yet integrated
or representative.

4. Component and/or Basic technological components are breadboard.
Validation in integrated to establish that the pieces laboratory
environment. will work together. This is relatively

"low fidelity" compared to the eventual

system.

Examples include integration of "ad hoc" hardware in a laboratory.

5. Component and/or Fidelity of breadboard technology breadboard
validation in increases significantly. The basic relevant environment.
technological components are Low fidelity breadboard.

Integration of nonscale components to show pieces will work together.

Not fully functional or form or fit but representative of technically
feasible approach suitable for flight articles.

High fidelity breadboard.

Functionally equivalent but not necessarily form and/or fit (size weight,
materials, etc.). Should be approaching appropriate scale. May include
integration of several components with reasonably realistic support
elements/subsystems to demonstrate functionality.

Lab

Lab demonstrating functionality but not form and fit. May include flight
demonstrating breadboard in surrogate aircraft. Technology ready for
detailed design studies.

integrated with reasonably realistic supporting elements so that the
technology can be tested in a simulated environment.

Examples include "high fidelity" laboratory integration of components.

Appendix I: Scope and Methodology

Technology readiness level
(TRL) Description

6. System/subsystem model or Representative model or prototype prototype
demonstration in a system, which is well beyond the relevant environment.
breadboard tested for TRL 5, is tested in a relevant environment.
Represents a major step up in a technology's demonstrated readiness.
Examples include testing a prototype in a high fidelity laboratory
environment or in simulated operational environment.

Hardware software

Prototype-Should be very close to form, fit and function. Probably
includes the integration of many new components and realistic supporting
elements/subsystems if needed to demonstrate full functionality of the
subsystem.

Demonstration environment

High fidelity lab demonstration or limited/restricted flight demonstration
for a relevant environment. Integration of technology is well defined.

7. System prototype Prototype near or at planned Prototype. Should be
form, Flight demonstration in demonstration in an operational operational
system. Represents a fit, and function integrated representative
operational environment. major step up from TRL 6, requiring with other
key supporting environment such as flying test

the demonstration of an actual system elements/subsystems to bed or
demonstrator aircraft.
prototype in an operational demonstrate full Technology is well
environment, such as in an aircraft, functionality of subsystem.
substantiated with test data.
vehicle, or space. Examples include
testing the prototype in a test bed
aircraft.

8. Actual system completed and Technology has been proven to work "flight
qualified" through test and in its final form and under expected
demonstration. conditions. In almost all cases, this

TRL represents the end of true system development.

Examples include developmental test and evaluation of the system in its
intended weapon system to determine if it meets design specifications.

9. Actual system "flight proven" Actual application of the technology in
through successful mission its final form and under mission operations.
conditions, such as those encountered

Flight qualified hardware. 	Developmental test and evaluation in the
actual system application.

Actual system in final form. 	Operational test and evaluation in
operational mission conditions.

in operational test and evaluation. In almost all cases, this is the end
of the last "bug fixing" aspects of true system development. Examples
include using the system under operational mission conditions.

Source: GAO and its analysis of National Aeronautics and Space
Administration data.

Our analysis was supplemented by interviews with officials from the LCS
program offices and other Navy programs supporting the mission packages.
Our audit focused on technologies for Flight 0, as technologies for Flight
1 have not been selected.

To assess the basis of LCS costs we reviewed the cost analyses prepared by
the contractors and the LCS program office. We analyzed the basis of costs
for design and construction of the seaframe as well as the

Appendix I: Scope and Methodology

development and procurement costs of mission packages for Flight 0. Our
analysis was supplemented by interviews with the program offices and
contractors involved in LCS. Costs for operation of Flight 0 and
procurement of Flight 1 have not been estimated. Details of the costs and
technologies for the seaframe are sensitive, due to the ongoing
competition. We therefore do not discuss these at length.

To address our objectives, we visited and interviewed officials from Navy
headquarters' surface warfare requirements office; LCS program offices;
mine warfare program office; the MH-60 program office; the Unmanned Aerial
Vehicles program office; the Naval Surface Warfare Center, Dahlgren
Division; the Naval Undersea Warfare Center; the Naval War College; and
the Navy Warfare Development Command. We also interviewed officials from
the Office of the Secretary of Defense's Program Analysis and Evaluation
division, General Dynamics, and Lockheed Martin.

We conducted our review from July 2004 through December 2004 in accordance
with generally accepted government auditing standards.

  Appendix II: Comments from the Department of Defense

Page 40 GAO-05-255 Defense Acquisitions

Appendix II: Comments from the Department of Defense

                    Page 41 GAO-05-255 Defense Acquisitions

Appendix II: Comments from the Department of Defense

                    Page 42 GAO-05-255 Defense Acquisitions

Appendix II: Comments from the Department of Defense

                    Page 43 GAO-05-255 Defense Acquisitions

  Appendix III: GAO Contacts and Staff Acknowledgments

GAO Contacts

    Staff Acknowledgments

(120344)

Paul L. Francis (202) 512-2811
Janet A. St. Laurent (202) 512-4402
Karen S. Zuckerstein (202) 512-6785

In addition to those named above, Richard G. Payne, Jerome A. Brown,
J. Kristopher Keener, Joseph W. Kirschbaum, James C. Lawson,
Jodie M. Sandel, Angela D. Thomas, Roderick W. Rodgers, and
Bethann E. Ritter made key contributions to this report.

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