Lockheed says sea trials of littoral ship went well

WASHINGTON (Reuters)-Lockheed Martin Corp said on Tuesday its new shore-hugging combat ship performed well during Navy sea trials last week, which defense analysts said paved the way for acceptance of the ship by the Navy.

Lockheed spokeswoman Diana Massing declined comment on a report in Defense Daily, an industry trade publication, that said the Navy's Board of Inspection and Survey had recommended the Navy accept the ship and take delivery in November.

"We at Lockheed Martin are very pleased at how the ship performed during acceptance trials," Massing said. "Acceptance trials are run and coordinated by the Navy. We're not going to get ahead of our Navy customer."

A Navy spokesman also declined comment on the report.

Defense consultant Jim McAleese said the results of the Navy sea trials were encouraging.

"All indications are that the Navy acceptance is imminent ," he said.

Ron O'Rourke, defense analyst for the Congressional Research Service, said reports of the successful sea trials stood in contrast to the program's difficulties last year.

Lockheed officials say the program is now on cost and schedule after a restructuring in November 2007 prompted by major cost overruns and the Navy's decision to cancel the second LCS ship to be built by Lockheed.

Navy officials say the first two LCS ships being built by Lockheed and rival General Dynamics Corp are likely to cost around $550 million, well above the initial projections of $220 million. The Navy plans to buy 55 LCS ships in total.

Lockheed and General Dynamics are now competing to build the next three LCS ships -- one authorized in the fiscal 2008 Navy budget and two included in the fiscal 2009 budget.

The winner of the competition will build two of the new hulls, while the loser will build the other. The Navy had hoped to announce the contract awards in early August, but a spokesman said it was not clear when the awards would be made.

(Editing by Andre Grenon)