* 30 pct cut in production hours for 2nd ship
* Lockheed aims for more cuts in production time
* Navy to issue final terms as early as Jan. 22
Defense News ~ WASHINGTON, Jan 12 (Reuters) - Lockheed Martin Corp (LMT.N) said on Tuesday that work on its second littoral combat ship for the U.S. Navy was on budget and on schedule and that it would take 30 percent less time to build than the first ship.
Lockheed is in a fierce competition with General Dynamics Corp (GD.N) that will determine whether the Navy proceeds with Lockheed's steel single hull design or GD's aluminum three-hull design for the new class of ships.
The Navy plans to buy 55 of the shallow-water ships.
Lockheed is aiming to cut production hours and costs more if it wins the contract, Paul Lemmo, vice president of business development for Lockheed's mission systems and sensors unit, told reporters at a Surface Navy Association meeting.
He said the 30 percent cut in production hours for the USS Fort Worth was being realized as work on the ship progressed.
Lockheed, building the second LCS ship on a fixed price contract, is responsible for any missed deadlines or cost overruns.
Because both the Lockheed and General Dynamics ships meet the Navy's requirements, the decision will largely be determined by price.
The Navy is expected to issue a final request for proposals for 10 LCS ships, possibly as early as Jan. 22, industry executives and Navy officials said.
Lemmo said Lockheed's second LCS ship would be 85 percent complete when launched in December 2010. The USS Freedom was 60 percent complete when it was launched in 2006.
The Freedom will be deployed for the first time later this year, two years ahead of schedule.
The USS Independence, the first LCS ship built by General Dynamics, is due to be commissioned on Saturday in Mobile, Alabama, where the U.S. unit of Austal (ASB.AX) built it.
STEEL VERSUS ALUMINUM
Lockheed's steel hull construction makes it affordable and easy to build or to repair anywhere in the world, Lemmo said.
One industry executive familiar with the General Dynamics ship said that company's aluminum trimarin hull could also be serviced or repaired anywhere, but hull damage was far less likely to be needed than work on its engines or other systems.
Industry executives are anxiously awaiting details on how the Navy will structure the competition, particularly its plans to open the competition to a second source in the future.
General Dynamics is considering ending its teaming agreement with Austal to allow its own shipyards to bid for the work in the future, but will not make any decisions until it has seen the request for proposals, industry executives said.
Asked if Lockheed could also end its relationship with Bollinger (BOLL.PK), Lemmo said the company remained part of the team at this point and any discussion of their role on the program was "competition sensitive at this point."
Lockheed's second ship will cost $549 million. The first one cost $637 million.
The Navy will spend a total of $548 million on the second General Dynamics ship, down from $704 million for its first.
Lockheed is in a fierce competition with General Dynamics Corp (GD.N) that will determine whether the Navy proceeds with Lockheed's steel single hull design or GD's aluminum three-hull design for the new class of ships.
The Navy plans to buy 55 of the shallow-water ships.
Lockheed is aiming to cut production hours and costs more if it wins the contract, Paul Lemmo, vice president of business development for Lockheed's mission systems and sensors unit, told reporters at a Surface Navy Association meeting.
He said the 30 percent cut in production hours for the USS Fort Worth was being realized as work on the ship progressed.
Lockheed, building the second LCS ship on a fixed price contract, is responsible for any missed deadlines or cost overruns.
Because both the Lockheed and General Dynamics ships meet the Navy's requirements, the decision will largely be determined by price.
The Navy is expected to issue a final request for proposals for 10 LCS ships, possibly as early as Jan. 22, industry executives and Navy officials said.
Lemmo said Lockheed's second LCS ship would be 85 percent complete when launched in December 2010. The USS Freedom was 60 percent complete when it was launched in 2006.
The Freedom will be deployed for the first time later this year, two years ahead of schedule.
The USS Independence, the first LCS ship built by General Dynamics, is due to be commissioned on Saturday in Mobile, Alabama, where the U.S. unit of Austal (ASB.AX) built it.
STEEL VERSUS ALUMINUM
Lockheed's steel hull construction makes it affordable and easy to build or to repair anywhere in the world, Lemmo said.
One industry executive familiar with the General Dynamics ship said that company's aluminum trimarin hull could also be serviced or repaired anywhere, but hull damage was far less likely to be needed than work on its engines or other systems.
Industry executives are anxiously awaiting details on how the Navy will structure the competition, particularly its plans to open the competition to a second source in the future.
General Dynamics is considering ending its teaming agreement with Austal to allow its own shipyards to bid for the work in the future, but will not make any decisions until it has seen the request for proposals, industry executives said.
Asked if Lockheed could also end its relationship with Bollinger (BOLL.PK), Lemmo said the company remained part of the team at this point and any discussion of their role on the program was "competition sensitive at this point."
Lockheed's second ship will cost $549 million. The first one cost $637 million.
The Navy will spend a total of $548 million on the second General Dynamics ship, down from $704 million for its first.
(Reporting by Andrea Shalal-Esa)
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