yd ri; an THE UNDER SECRETARY OF DEFENSE 3010 DEFENSE PENTAGDN rl 20301-3010 *ay TECHNOLCG AND LOGIEFICS The Honorable Scott Brown United States Senate Washington, DC 20510 Dear Senator Brown: Thank you your July I2 letter regarding corrosion and the certification of the Littoral Combat Ship (LCS) program prior to Milestone (MS) approval. The Department understands your concerns and appreciates the opportunity to address them. Regarding the issues with corrosion onthe USS INDEPENDENCE (LCS 2), the Navy has had a corrosion control plan for LCS, as it does for all shipbuilding contracts that anticipate and respond to corrosion issues as they arise. The Navy has taken this issue very seriously and has a solid plan in place to mitigate the corrosion on LCS 2 and to introduce design changes into future ships to address the corrosion issues identified. Specific answers to your detailed corrosion questions can be found later in this letter. The Department believes that the corrosion issues identified to date, though important to address, in no way threaten the viability of this ship class, and the cost of the Navy's mitigation measures is affordable in the context ofthe program`s overall budget. Regarding your questions about the events surrounding MS B, an important issue raised by your letter is why, in granting MS approval to LCS, I established an Acquisition Program Baseline (APB) that directed the Navy to budget to its own cost estimate in the years beyond 2016 rather than to the Independent Cost Estimate (ICE) performed by the Director, Cost Assessment and Program Evaluation (CAPE). As you know, in general, my inclination is to budget to the ICE, and this practice has been reinforced by the Weapon Systems Acquisition Reform Act of 2009. In the case of LCS, we received competitive offers from 2 shipbuilders that offered the Navy a fixed price for 20 ships. in view ofthe competitive pricing, we accepted both ofthese offers. The fixed price nature of these offerings means that the shipbuilders will either need to to the prices included in their offers or accept a reduction of profit. This is a strong incentive cost control in a program of great importance to us_ ln budgeting I`or out-years. we are required to estimate what the Government will pay LCS beyond the most recent buy of 20 ships. The Navy`s proposal was that we budget according to an estimate based upon a continuation of the cost control incentivized bythe contracts awarded. CAPE's proposal was that we set the baseline at a higher number based on an estimate that the shipbuilders would revert to a higher cost structure in future offers. While both of these estimates were reasonable given their assumptions, I elected to set a baseline according to the Navy's estimate since it was grounded in proposals actually received in a competitive process and to do otherwise would suggest to the shipbuilders that the Govemment would be willing to pay more for ships in the future than is reflected in the contracts just awarded. News While realize there is an inherent tension between budgeting and baselines on the one hand and negotiating or competitively arriving at real contract prices on the other, we need to guard against our own estimates reducing the incentive to control costs, and thereby, becoming self-fulfilling prophesies. As part of granting MS approval to LCS, I certified that the program met the requirements for approval established in 10 U.S.C. 2366b. In doing so, it was necessary to use the waiver authority provided by Congress in that section for three components of 10 USC 2366b, one of which is for lack of` CAPE concurrence that reasonable cost and schedule estimates have been developed to execute the product development and production plan under the program (10 USC 2366b( This is a reflection of difference between the APB and the mentioned above. The approved APB will remain valid until a new baseline is required - currently anticipated at MS - at which time the circumstances requiring the waiver on this issue will likely be resolved. The other two waivers involved provisions (l0 USC 2366b(l)(B) and (l where the need for the waiver was non-substantive, in that they did not reflect either a lack of funding or program affordability. These waivers resulted from the fact that the President's Budget Fiscal Year 2012 was developed before the decision was made to adopt the dual-buy strategy approved by Congress, and thus the funding for the LCS program in differed from the APB. Before exercising the waiver authority, first received assurances from the Navy that they will budget the program to the APB beginning with the FY 2013 budget request. The circumstances requiring the non-substantive waivers will be resolved when that budget request is submitted. I will review the LCS program annually to determine the extent to which it satisfies the provisions of 10 USC 2366b as required by that section. Your letter requests the business case analysis used in support ofthe I0 USC 2366b certification. This analysis consists of several documents submitted by a range of Department of Defense components. We will work with the Senate Amted Services Committee staff to identify and discuss these documents and how they are handled. Regarding the spccilic questions on corrosion enumerated in your letter: Question 1: We understand that Navy officials had contemporaneous concerns about the potential for corrosion during construction of the INDEPENDENCE arising from the use of dissimilar metals, that is, aluminum for the hull and steel for this ship's waterjet system. What is the root cause ofthe recently discovered "aggressive galvanic corrosion" problem and how extensive is it? Answer: The General Dynamics and Austal USA original design approach to prevent corrosion was based on commercial practices and included a coating system on the exposed metal, electrical insulation of dissimilar metals. and cathodic protection via sacrificial zinc anodes in the water jet tunnels. Corrosion Control is a requirement in all new Navy shipbuilding contracts. The shipbuilders are an integral part of the Corrosion Prevention Advisory Team (C PAT) and submit tr Corrosion Control Management Plan to the Government in which they detail their plan to 2 News address potential corrosion issues. Once built. every new ship undergoes a series of Corrosion Surveys, which can identify new areas at risk of corrosion and monitor the effectiveness of changes implemented to address corrosion. The LCS program has an approved Corrosion Prevention and Control Plan (CPCP). The ship`s incorporation of its water jet design was subject to rigorous engineering and design review, including assessment by the American Bureau ofShipping (ABS), the Naval Systems Engineering Directorate (SEA 05), and the Supervisor of Shipbuilding (SUPSHIP), However, the waterjet cathodic prevention proved to be less effective than intended due to multiple factors, including improper electrical insulation during installation. Galvanic corrosion is an electrochemical process that occurs on all ships when two metals are immersed in an electrolyte (such as salt water) and the metals are in electrical contact. Protection against such corrosion is not an exact science. The complex geometry of waterjet assemblies and tunnels makes the task even more challenging, ln the case INDEPENDENCE. the complex geometry ofthe waterjet assemblies and tunnels made sufficient insulation of the aluminum hull from the steel water jet assembly difficult, which caused the galvanic corrosion to occur in localized areas. The corrosion on LCS 2 is concentrated in small areas in the water jet tunnels and in the waterjet cone assemblies, localized to the transition area between the two. The damage has been mitigated to date by continued electrical insulation. attachment of sacrificial zinc anodes, addition of doubler plates, and applied coatings, Where practical. ln general. commercial ships utilizing water jets can experience corrosion in this transition area in a manner similar to LCS. Commercial practices tend to focus on repairing the damage at regular intervals through weld repairs and other temporary actions. Given the LCS Operational Concept and Prolile. it is more appropriate for the Navy to employ more permanent measures. ln addition, this is more economical over the life cycle ofthe ship. Implementing a class solution that will prevent the corrosion from occurring is the most cost~et`fective solution for the LCS program. Question 2: Please address public comments made by the Andrew Bellamy. Chief Executive of Austal. the company that built the INDEPENDENCE. that poor maintenance by the Navy rather than faulty craftsmanship by the yard is likely to be the cause ofthe aggressive corrosion round on this Navy warship and that any corrosion on this ship would be the fault of the operator or maintainer-not the builder. lf poor operational maintenance by the Navy was at least part ofthe cause ofthe problem. how do you intend to address it? Answer: The General Dynamics and Austal USA Team worked with the Navy to develop the ship maintenance requirements. including the choice of cathodic protection. The General Dynamics and Austal USA original design approach to prevent corrosion was to apply a coating system to the exposed metal as the first line of delense, electrically insulate dissimilar metals, and provide cathodic protection via sacrificial zinc anodes in the tunnels. This approach was based on commercial practices. which are commonly used in the U.S. Navy ship design process. These proved less effective than intended due to multiple issues including insufficient electrical insulation of the water jets to the hull. 5 News Specific Austal USA maintenance requirements have been followed by the Navy in the post-delivery period with the exception that the Navy could not hang sacrificial zinc anodes from the tunnel inspection ports when the ship was pier side for extended periods. This is due to the ship's draft at higher displacements depending on fuel load and installed mission package systems, If the zinc anodcs had been placcd in the tunnel inspection ports this would not have prevented corrosion in the transition areas between the waterjct tunnels and cone assemblies. The inclusion ofa more comprehensive Cathodic Protection System, including an Impressed Current Cathodic Protection (ICCP) System and additional sacrificial protection, will take into account this consideration, As is the case with every ship class, the Navy continues to review the maintenance requirements to ensure they are effective. Question 3: Reportedly, among the planned features that were cut to keep the LCS's construction costs down was a cathodic protection system (CPS), which helps control corrosion on metal surfaces. Given the concerns of Navy officials about the possibility ofcorrosion, described above. what engineering analysis supported making that decision? Answer: The cathoclic protection system was not among the planned features that were cut to keep the LCS's construction costs down. The original sh_ip design and construction included the General Dynamics and Austal USA original concept to apply a coating system to the exposed metal as the tirst line of defense, electrically insulate dissimilar metals, and provide cathodic protection via sacrificial zinc anodes in the tunnels. These steps proved less effective than intended due to multiple issues including insufficient electrical insulation of the steel water jets from the aluminum hull. To provide more comprehensive cathodic protection. an Impressed Current Cathodic Protection (ICCP) system and additional sacrificial protection design is being finalized and will be implemented on LCS 2 during its Post Shakedown Availability (PSA), installed incrementally on LCS 4 prior to launch with completion planned at PSA, and included on LCS 6 and following ships as a baseline requirement prior to the start of construction. Question 4: At least preliminarily, the permanent solution to this problem will involve installing a CPS to protect INDEPENDENCE and similar follow-on LCS variants from galvanic corrosion. What will the total cost impact be of back fitting the INDEPENDENCE and LCS-4, the next LCS to be delivered, with a Answer: The engineering change for the permanent repair to LCS 2 and the implementation of more comprehensive catbodic protection is in the final stages of development. The initial estimate is approximately $3.2 million. which includes non-recurring engineering costs for the design and estimated installation costs. Question 5: After a permanent solution that responds to the observed problem is implemented, what ongoing corrosion risks in this variant will exist going forward? Answer: Risk of further corrosion to the transition area between the waterjet assemblies and hull is low for the LCS Class. The Navy and shipbuilders are taking extra steps to ensure the modified cathodic protection is sized appropriately for the operational profile ofthe ships. 4 News Question 6: We understand that a CPS is already plamied for LCS-6. the first LCS to be procured under the dual-award, block-buy contract. What will the total cost impact be of building the CPS into the baseline design for those ships? Answer: The ICCP system will be incorporated into the design of LCS 6, the first ship ot" the block buy, prior to the start of construction. Installation of similar systems on other hulls has been approximately $250 thousand per hull. It is anticipated that the cost to incorporate this change into LCS 6 and tollow hulls will be ofsimilar magnitude. Question 7: l-low much does this CPS modification impact the business case that supported the Navy's original decision to pursue a dual-award, block-buy of both LCS variants? Answer: This modification does not alter the outcome ofthe business ease that supported the dual-award acquisition strategy. The cost to incorporate this change is minimal, and the design work has been completed separately from the construction contract. Question 8: We understand that aluminum-hulled ships, such as the INDEPENDENCE, tend to corrode faster than steel-hulled ships. What is the impact of this problem on the ability of this seatiame to perform as intended? Answer: The necessity to include steel components in any aluminum-hulled ship leads to the increased risk ot` galvanic corrosion, which must be managed as part ofthe design process. However. with sufficient cathodic protection, the risk of impacting seaframe performance is low. The Corrosion Control Management Plan is adequate, and this isolated corrosion event is an example that was discovered in the course of executing the plan and monitoring in accordance with surveys and inspections. All corrosion issues tor LCS class, including the water jet assembly corrosion, are being tracked through the LCS Program's Corrosion Prevention Advisory Team (CPAT). Once fixes are implemented, the areas will continue to be monitored to ensure resolution. Any new areas ofeorrosion will be documented and tracked through the CPAT, as is standard for Navy Shipbuilding programs. Question 9: Is morc protection from galvanic corrosion required than would be provided by a CPS applied to identified "hot spots" for this aluminum-hulled seaframe? Answer: Extra steps are being taken to appropriately size the modified cathodic protection for USS INDEPENDENCE. However. the Navy will continue to monitor the areas of concem to ensure the system is sufficient for the hull. As to your question about the LCS program compliance with the guidance issued on March 21 by my Principal Deputy Under Secretary. Mr. Frank Kendall, the Navy has taken steps to identity. classify, and define corrective action for the galvanic corrosion discovered on LCS 2. The inclusion of more comprehensive cathodic protection, including an ICCP System and additional sacriticial protection. along with continued rigor in the design process and review of ships' maintenance procedures. increases confidence in the reliability of these ships andthe ability to control Operations and Sustainrnent costs associated with reliability problems. These actions will ensure compliance with the March 21 guidance. 5 News Your strong interest in the LCS program is appreciated, and the Department is committed to updatin Con ress I on eve oprnents in th1s program. Please contmue to let me know whenever you have issues of concern on this or any other matter. A similar letter has been sent to the other slgnatories of your July 12 letter. Sincerely, DefenseNews