Steel, oil prices boost Navy ship cost

Milwaukee Journal Sentinel, Associated Press

Lockheed Martin Corp. says a double-digit jump in the cost of steel and rising oil prices have helped propel the final price tag of its Wisconsin-built warship for the Navy to more than double the initial estimates.

Navy officials earlier this month told lawmakers the service's initial estimate of $220 million per ship had ballooned to as much as $550 million, which they blamed on design changes that occurred during construction.

While the cost of the first two Littoral combat ships — one each being built by Lockheed Martin and General Dynamics Corp. — is not allowed to breach a congressional cost cap of $460 million per vessel, the ceiling does not apply to run-ups in inflation. Littoral combat ships are designed to move speedily in shallow, coastal waters to assist in retrieving Marines and other missions.

Lockheed Martin's LCS-1 is being built at Wisconsin's Marinette Marine Corp., while General Dynamics' LCS-2 is being built at the Austal USA shipyard in Mobile, Ala.