Former Navy Sec. says ship buying system flawed

WASHINGTON — The Navy doesn't appear to know how to buy combat ships and should stop throwing more money into a flawed procurement system, a former leader of the service said Friday.

Ever changing requirements, lack of competition among shipbuilders and heavy bureaucracy have thwarted the Navy's efforts to buy ships affordably and at a steady rate to meet the service's goals of a 313-ship fleet, former Navy Secretary John Lehman said at a conference hosted by the Hudson Institute.

"What should the Navy look like? It should look like it can build ships," said Lehman, who led the service for six years in the Reagan administration. "They should sound like they know what they are doing and that it can execute the plan. That today, is not the case."

Lehman, now an investment banker at J.F. Lehman & Co. in New York, recommended the Navy freeze ship designs to control costs. In the case of the Littoral Combat Ship, designed to operate in shallow waters close to shore, he said dozens of task orders were changed daily.

"The flaw is the procurement system in the Navy," said Lehman. "Until you get the acquisition program under control you're not going to see improvements."

He endorsed the use of fixed-price contracts to incite competition and drive down costs of shipbuilding. The cost of the Littoral Combat Ship, one each being built by Lockheed Martin Corp. and General Dynamics Corp., has more than doubled from its initial price tag of $220 million because of changing requirements.