January 13, 2018

PROCUREMENT: Navy Says It Can Buy Frigate For Under $800M.

“The follow-on objective cost for FFG(X) is $800 million. We think we can get below that,” Rear Adm. John Neagley told the conference. Once conceptual design contracts are awarded — no later than March — “we’re going to use the next 16 months to work with our industry partners to really understand those details.”

The $800 million figure is the Navy’s target (“objective”) for the average cost of frigates No. 2 through 20 (the “follow-on” ships). The $950 million figure widely reported this week is the maximum average cost the Navy will accept for those same ships. Neither number includes the very first frigate, since the lead ship of a class has lots of extra costs: the initial development and design, setting up manufacturing facilities, and working out all sorts of teething troubles.

That seems more reasonable that yesterday’s report.