WASHINGTON • Defence Secretary Ashton Carter ordered the US Navy, in a sharply worded memo this week, to buy 12 fewer small littoral combat ships (LCS) and more fighter jets, electronic warfare equipment and other weapons in the upcoming budget year instead.
If approved by Congress, the changes would have a huge impact on many big weapons makers, including Lockheed Martin and Australia's Austal, which would have to compete to build eight remaining LCS in fiscal 2019.
Mr Carter told Navy Secretary Ray Mabus in the memo dated Tuesday that the navy's proposed budget plan for fiscal 2017 was "unbalanced". The navy had been buying ships in recent years "at the expense of critically needed investments in areas where our adversaries are not standing still, such as strike, ship survivability, electronic warfare and other capabilities", it said.
A copy of the memo, first reported by Defense News, was seen by Reuters. It revealed deep tensions between the navy and the Defence Department over the 2017 budget, which faces an uncertain fate in Congress during an election year.
Mr Carter ordered the navy to buy only 40 LCS or frigates, instead of the 52 ships currently planned. He said that would free up funds for more SM-6 missiles built by Raytheon and other weapons, development of new torpedoes and the purchase of additional Lockheed F-35 fighter jets and Boeing F/A-18E/F fighters.
The navy had hoped to buy more F/A-18 jets in fiscal 2017, but Mr Carter's memo would delay those orders until 2018 - a move that could cause problems for Boeing, which needs orders next year to avert a shutdown of its St Louis production line.
One source said curtailing orders for the LCS could have a serious impact on the firms involved and their suppliers. Costs would likely rise if the navy decided to buy just one ship a year instead of three, as planned, said the source.
Representative Randy Forbes, the Republican chairman of the House Armed Services Seapower and Projection Forces Subcommittee, said the navy needed more capability as well as more ships.
"Unless we provide more resources for our navy, it is not going to be able to keep meeting the demands that our nation and our national security strategy place upon it."