In a memo Monday to Navy Secretary Ray Mabus, Carter said the Navy has "overemphasized" its investment in shipbuilding at the expense of other capabilities and ordered the sea service to cut the number of Littoral Combat Ships and frigates it planned to buy from 52 to 40 by limiting production to a single variant beginning in fiscal 2019.
The Navy currently buys two types of Littoral Combat Ship: the Freedom-class, a monohull made by a consortium led by Lockheed Martin Corp., and the Independence-class, a trimaran made by a team headed by the Australian shipbuilder Austal.
The memo, obtained by Military.com, takes the Navy to task for increasing the size of the fleet while causing "unacceptable reductions" to other elements of the warfighting arsenal such as weapons and aircraft. Carter said the Navy was on track to reach a 308-ship requirement from its current posture of 282 ships, but warned the service that the requirement should not be "irresponsibly exceeded."
"Earlier this year the Department of Defense gave guidance to correct and reverse this trend of prioritizing quantity over lethality; however, counter to that guidance, the Department of the Navy's latest program submission fails to do so," Carter wrote. "It is accordingly unbalanced, creates too much warfighting and technical risk, and would exceed the numerical requirement of 308 ships."
Carter directed the Navy to buy eight fewer Littoral Combat Ships between now and 2021 by buying just one per year from 2017-2020 and then two ships in 2021, the final year of the Future Years Defense Program, or FYDP.
According to Pentagon budget documents from earlier this year, the Navy plans to spend $29 billion on the Littoral Combat Ship program, including $21.8 billion for 32 Littoral Combat Ships and $7.5 billion for mission module packages. It wasn't immediately clear how the Carter memo would affect these figures.
A Navy spokeswoman said the service was aware of the memo.
"Shipbuilding has always been a priority for the Navy and we will continue to balance capability with capacity in our shipbuilding programs as we have always done. We are aware of the memo, however budget discussions are pre-decisional," Lt. Cmdr. Nicole Schwegman said in a statement. "It would inappropriate to discuss anything further until the FY 17 budget is finalized."
Former Defense Secretary Chuck Hagel had signed off on the 52-ship buy late last year after the Navy responded to criticism that the LCS was not survivable by developing a variant with more weapons and protection. The upgrade has also come under fire, however.
In March, Sen. John McCain, a Republican from Arizona and chairman of the Senate Armed Services Committee, complained that it wasn't clear what problems the Navy was trying to solve with its upgraded LCS.
"We must not make this mistake again," he said.
McCain said he did not want to speculate over media reports regarding the Pentagon memo, but looked forward to a SASC briefing.
"My concerns with the LCS, from cost overruns to schedule delays to poor performance, are well known," he said in a statement. "I hope these reports are an indication that the Pentagon is thinking strategically about the size and composition of the future force, including the LCS program. I look forward to taking a close look at the Administration's budget request."
The Defense Department's Cost Assessment and Program Evaluation Office would provide the Navy with specific directions for implementing the LCS downshift mandate, Carter said. The money saved from a smaller quantity will be redirected into aircraft and munitions, among other things.
Carter also reversed a Navy plan to reduce the procurement of munitions to the minimum sustaining rate, directing instead that the service "maximize production" of SM-6 missiles and start development of torpedoes designed to target advanced submarines and other enemy targets.
This move, Carter said, "will provide an early boost to naval aviation capacity, a particularly important investment given recent demands on aircraft for Operation Inherent Resolve."
Carter directed that Navy funds be increased by $1.7 billion between now and 2021, but provided specific earmarks for the funds. The money, he said, will be used to pay for the following:
-- 10 more Submarine Combat Systems updates;
-- Development of a new or upgraded lightweight torpedo;
-- Modernization of two more Flight IIA destroyers;
-- 23 new electronic warfare upgrades for the surface fleet;
-- Acceleration of next-generation torpedo countermeasure;
-- Enhanced modernization of Tactical Tomahawk cruise missiles; and
-- Additional upgrades to P-8A Poseidon aircraft.
"These choices will create a Navy that is far better postured to deter and defeat advanced adversaries, while still continuing to grow the size of the fleet," Carter concluded. "With the rebalance laid out in this memo, our fleet will not only be larger and more effective than it is today; it will also be equipped with the weapons and capabilities it needs to win any potential war."