In December, Secretary of Defense Chuck Hagel announced that the U.S. Navy’s next surface combatant, in effect a frigate, would be a modified version of the current littoral combat ship (LCS). His main justification for this decision was that the need for the new vessel was too urgent to wait for a drawn-out (and expensive) competition; better to go with what the Navy is already buying. Many critics of the LCS, which is optimized for high speed, were stunned. The world’s navies are awash with frigate-sized warships that appear to meet U.S. requirements. The Coast Guard’s national security cutter would also seem to approach the Navy’s needs. What is happening?
The answer lies in a change to defense procurement policy pursued in the late 1990s. Procurement policy must be the dullest issue in defense, but some of its aspects have enormous consequences. In this case the key was a decision that the Department of Defense should behave more like a business. Instead of doing development work in-house, it should rely entirely on contractors, just as a law firm, say, buys its computers and software from vendors.