LCS vs. Burke Construction Times

Here’s an interesting little tidbit.  What is the average construction time of an LCS (time from the date laid to date commissioned)?  Here’s the data.  I’m omitting the first two ships because they were the first of class and one would expect some longer construction times as the construction process was worked out.  Beside each ship is listed the date laid down, the date commissioned, and the number of months in between.

          Laid Down    Commissioned     Months

LCS-3     Jul 2009       Sep 2012         38

LCS-4     Dec 2009       Apr 2014         52

LCS-5     Oct 2011       Nov 2015         49

LCS-6     Oct 2012       Dec 2015         38

LCS-7     Nov 2012       Oct 2016         47

LCS-8     Jun 2013       Sep 2016         39

                                    Avg = 44 

 We see, then, that the average construction time for an LCS is 44 months with a record speed of 38 months.

Just for fun, let’s compare that to the construction time for a much larger and much more complex ship, the Burke class.  Here’s the same data for the six most recent Burkes.

          Laid Down    Commissioned     Months

DDG-107    Nov 2007      Nov 2010         36

DDG-108    May 2007      Oct 2009         29

DDG-109    Apr 2008      Nov 2010         31

DDG-110    Sep 2008      Jun 2011         33

DDG-111    May 2009      Oct 2011         29

DDG-112    Jun 2010      Oct 2012         28

                                    Avg = 31 

The average time to build a Burke is 31 months with a record speed of 28 months.  Interesting, isn’t it, that we can build a Burke in 28 months but it takes us 44 months to build the smaller, simpler LCS?  Worse, the longest Burke, 36 months, was two months faster than the fastest LCS!

Well, wait, you say, the Burkes have been in production for many years and the process has been optimized so, of course, it’s faster (setting aside the fact that the Burke is much larger and much more complex and ought to take longer, not shorter).  Fair enough.  Let’s look at Burkes 3-8 (we’ll set aside the first two just as we did for the LCS) when the production process was at the exact same stage as the LCS currently is.  Here’s the data.

          Laid Down   Commissioned      Months

DDG-53     Aug 1990      Dec 1993         40

DDG-54     Mar 1991      Mar 1994         36

DDG-55     Aug 1991      Aug 1994         36

DDG-56     Sep 1991      Jul 1994         34

DDG-57     Feb 1992      Dec 1994         34

DDG-58     Mar 1992      Mar 1995         36

                                    Avg = 36 

The average construction time for those early Burkes was 36 months.  Compare that to the 44 month LCS construction time.  We were building much larger, much more complex ships a lot faster and that was back in the 1990’s when didn’t have the benefit of the advanced computers and software to aid us in construction!

We can build Burkes faster than LCS’s!!!!

Okay, well that’s surprising and disappointing but it doesn’t really have any impact on anything.  It doesn’t really mean anything.  We’re not at war so what does it matter if a ship takes a little longer to build, right?  Wrong!

Simplistically, the cost of building a ship is the cost of the materials that go into it, the cost of the labor to build it (man-hours), and the overhead cost of the facility it’s being built in for the duration of the build.

Consider a simple example of a shipyard building one ship.  The materials are a known and constant cost for every ship of the type.  The man-hours are constant for every ship of the type.  However, the shipyard is charging us all their overhead costs for every day the ship is being built.  Overhead costs are utilities, the facility’s tax bill, salaries for everyone the shipyard employs but is not directly accounted for in man-hour labor charges (accountants, salesmen, lawyers, CEOs, secretaries, etc.), insurance, and so forth.  The longer it takes to build the ship, the greater the overhead charges and those overhead charges are significant.

Now, in practice, the overhead charges are not normally charged separately but are rolled into the man-hour charge figure.  Before starting construction (in fact, during the contract process) the construction time is known and the overhead charges for that time period are rolled into the man-hour charge.  Thus, just as we described in the simplistic description, the longer the construction, the greater the overhead charge which is reflected in higher man-hour charges.

So, to answer our earlier question, what does it matter if a ship takes longer to build?  The longer a ship takes to build, the greater the cost.  This is intuitively obvious and now you see why.  So, by having the LCS take 44 months to build, compared to 31 or 36 months for a Burke, we’re spending more than we should.  If a Burke can be built in 31/36 months, we should be able to build an LCS in around 18-24 months.  That would be a significant cost savings and might be enough to make us view the LCS in a somewhat different light.  Let’s be honest, much of the controversy over the LCS revolves around its “value” – the capability delivered relative to the cost.  Right now, the capability is little and the cost is a lot.  If the capability were a little and the cost were also a little, we’d view it differently or, at least, somewhat differently.

Why is the Navy accepting this kind of construction performance?  Anyone else see a problem here?  Maybe neither of these manufacturers should have been awarded contracts.

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