HI Superferry: U.S.S. Superferry? by Joan Conrow

Honolulu Weekly
U.S.S. Superferry?
Unwitting Hawaii residents may be getting a military ship in civilian camo
By Joan Conrow / 1-16-2008

Hawaii Superferry — now running (weather permitting) between Oahu and Maui, thanks to a gubernatorial and legislative override of a State Supreme Court ruling — has been officially touted as a way to bring ohana together and provide a transportation alternative.

However, in light of the U. S. Navy’s current push to quickly expand its fleet with a new type of fast and versatile vessel, Hawaii Superferry (HSF) — chaired by former Navy Secretary and 9/11 Commission member John F. Lehman —may also be using Hawaiian waters to demonstrate the performance of its Austal USA catamaran, the Alakai, and prove its efficacy for military purposes.

At stake are U.S. defense contracts potentially worth billions, and possible sales to foreign navies, according to a defense industry consultant in San Diego who asked not to be named. The Superferry is being tested in Hawaii to qualify the design for military contracts and also for sale to the navies of India and Indonesia, the consultant said.

The Navy is seeking to develop two new types of craft: the Littoral Combat Ship (LCS) and Joint High Speed Vessel (JHSV). Both boats are intended to be smaller, faster and more versatile than existing naval ships. They are specifically designed to operate in both the open ocean and the shallow near-shore, or littoral, waters of nations the Pentagon views as emerging threats, such as China.

The Superferry is very similar in design and specifications to the Sea Fighter, the only LCS prototype that has been launched and gone through sea trials, and the Westpac Express, one of two demonstration JHSV currently in use. Among the Superferry’s virtues is its versatility, which makes it a contender for both the LCS and JHSV initiatives. U.S. Navy and Army representatives have toured the Alakai throughout its construction as part of the ongoing evaluation of potential JHSV platforms, according to a June 2007 announcement about HSF’s sea trials on Austal USA’s website.

Lehman already has spoken publicly about the company’s plans to run military equipment and personnel from Oahu to the Big Island in much the same manner that the Westpac Express ferry serves the Marine Corps in the Western Pacific. The logistical plan was touted as a faster and cheaper way for soldiers stationed on Oahu to train on the Big Island when the Stryker Brigade comes to Hawaii. "The Superferry is strong enough to take Stryker vehicles," Lehman told Pacific Business News (PBN) in March 2005. “HSF provided the Army with a cost analysis and expects to negotiate a long-term contract,” PBN reported.

On January 7 of this year, HSF carried Hawaii National Guard heavy equipment to Maui for removal of storm debris. While providing passenger and cargo service between Oahu and Maui, the Superferry’s owners are able to conduct sea trials aimed at demonstrating the high-speed craft’s endurance and performance in rough open seas and littoral waters. Its need to quickly accrue time in the water could explain why HSF plans to offer a second daily run to Maui, even though it’s presently carrying only a third of the passenger load it projected, according to documents filed with the state Public Utilities Commission.

While using Hawaiian waters as a proving ground, HSF has been able to develop and test its prototype vessel with little financial risk to investors, thanks to a federally guaranteed loan of $143 million that covers much of the $190 million cost to build the two fast ferries, and $40 million in state support for related harbor projects.

Meanwhile, the state’s controversial decision to allow the ferry to run while a full Environmental Impact Statement is being conducted — a process that could take up to two years — effectively ensured the vessel would be operational in time to compete for a JHSV design contract that will be awarded later this year, as well as for LCS design contracts two years later .“In an accelerated procurement environment, it would give [Congressional appropriations] committees great comfort in granting money for something up and running,” said an Oahu-based legislative insider, who spoke on condition of anonymity.

The procurement environment is indeed heating up. Over the next five years, the Navy plans to buy eight JHSV, which also will be used by the Army and Marine Corps. Not envisioned as combat ships, these crafts would be used to quickly transport several hundred troops and their equipment across the open sea. They’re also expected to be able to operate in shallow waters and access harbors without relying on tugboats, piers and cargo cranes.

"Will it [the JHSV] have other abilities? Of course. But the high-speed transportation requirement is the heart of this program," Capt. Patricia M. Sudol, the Navy's program manager for support ships, boats and craft, and the officer in charge of the Navy-led joint acquisition program, told the Weekly in an interview. Sudol said the Navy envisions the JHSV as a modified version of existing commercial high-speed ship designs, which means it won’t have to meet the rigid construction and self-defense standards required for warships. For that reason, the vessels are projected to be relatively low cost, with the first one targeted at $150 and the remaining seven at $130 million each. One firm will be chosen to produce all eight JHSV, she said.

The Navy also wants to acquire 55 LCS by 2013, a goal that is already three years behind schedule, Navy spokeswoman Lt. Lara Bollinger said in a press release. These vessels are intended to operate close to shore, hunting submarines and destroying underwater mines. They also could serve as offshore platforms from which to launch helicopter attacks and other missions on land, and recover the inflatable combat boats used by special operations forces.

The LCS program is a key element of the Navy's strategy to expand its fleet. A Sept. 13, 2007 article in The Washington Post quotes Navy spokesman Capt. John T. Schofield as saying the ships are “needed to fill critical, urgent war-fighting gaps.”

But cost overruns are mounting on the two LCS prototype vessels currently under construction, and performance problems plague the Sea Fighter, the only demonstration LCS that has hit the water.

The LCS prototypes, by General Dynamics and Lockheed Martin and initially slated to cost $220 million each, now are expected to come in at a combined total of more than $600 million. Early last year the Navy asked Congress to allow the tab for the second two ships to go as high as $460 million each. But the Senate appropriations committee balked and cut funding for the program, citing delays, design changes and cost overruns of more than 50 percent. "The Navy's littoral combat ship has suffered from significant cost increases and has had to be restructured by the Secretary of the Navy,” Hawaii Sen. Daniel K. Inouye, chairman of the Appropriations defense subcommittee, told The Washington Post. As a result, the Navy cancelled contracts for the second two ships.

The Sea Fighter, the other LCS contender, has been developed by San Diego-based Titan Corp. under an exclusive $59.9 million contract from the Navy's Office of Naval Research. U.S. Rep. Duncan Hunter of San Diego, former Chairman and now Ranking Republican on the House Armed Services Committee, secured funding for the vessel’s design and construction because “deployment of the Sea Fighter can demonstrate and validate many of the Navy’s operational concepts for littoral warfare, and more specifically reduce risk in the Littoral Combat Ship program,” according to an announcement on the Congressman’s website.

The Sea Fighter, a high-speed, shallow draft catamaran, is made of aluminum, like the Superferry, and the two craft are eerily similar in size, design and performance characteristics. In addition, both the Sea Fighter and Superferry, like the craft leased to the JHSV program, were built to commercial standards, in response to the military’s move toward using “off the shelf” technology. This approach allows the Navy to use commercial high-speed vessel training courses for the crew, thus allowing the ship to proceed directly from new construction to deployment, according to a US Navy website.

In effect, the Sea Fighter presented a less-expensive LCS surrogate with which to test various operational aspects of the program. It was launched in February 2005 and formally accepted by the Navy in July 2005 after successfully completing sea trials. But the vessel has since been repeatedly dry-docked due to problems with its propulsion system, and has a worrisome tendency to “fish-tail” under certain conditions. Additionally, Nichols Brothers, the Washington State company that built the Sea Fighter, shut down last November, citing financial problems and a pending lawsuit.

Some Navy officials have expressed fears that Hunter and other lawmakers might consider the smaller Sea Fighter design an acceptable substitute for the larger and far more costly Littoral Combat Ships. And if LCS costs keep rising, officials say, that could be a valid concern. “So the issue will be, can the Navy continue to do more with less,” Rep. Norm Dicks, D-Wash., a senior member of the House Appropriations Defense Subcommittee, told the Weekly in a recent interview. “There is real skepticism in Congress at this time,” Dicks said.

But Roscoe Bartlett, R-Md., chairman of the House Armed Services Projection Forces Subcommittee, said during a committee hearing last year that, rather than replacing the LCS, the Sea Fighter would be a "bargain" ship that could "easily operate alongside the LCS and provide our fleet force structure with an increased complexity making our future . . . Navy less vulnerable to the enemy," he said.

Rep. Hunter’s list of 30 funding initiatives for 2008 contains just one endorsement--for the Sea Fighter. Attributed to HSF Chairman John Lehman, it states: “This kind of innovative ship, built with commercial off the shelf technology, is the future of an affordable surface Navy.”

In addition to investing $58 million equity capital in the Hawaii Superferry project, J.F. Lehman & Company — a New York-based private equity firm led by its namesake — has been making acquisitions that could support LCS and JHSV contracts. These include Atlantic Marine Holding Company, a leading provider of repair, overhaul and maintenance services for commercial seagoing vessels and U.S. Navy ships. The company owns and operates two strategically located shipyards in Jacksonville, Fla., and Mobile, Ala., and leases a third facility at the Naval Station Mayport in Jacksonville.

Hawaii Superferry’s military objectives — and the value of its heavyweight connections — may not be known for certain until the Navy awards the JHSV contract sometime this year and Congress decides how much it’s willing to pay for the LCS program. But if Lehman’s canny prediction, two years ago, that the ferry would effect a paradigm shift in the way business is conducted in Hawaii is any indication, he and his company know exactly where things are headed.

HW sidebar Four of the 10 members of the Hawaii Superferry Board of Directors have strong ties to the Navy and defense industries.They include its chairman, John Lehman, the former Secretary of the Navy under President Reagan. Lehman is a founding partner of J.F. Lehman and Company, which invests primarily in marine and aerospace defense projects. The company invested $58 million equity capital in the interisland ferry project.Lead Director Tig Krekel, who is currently vice chairman of J.F. Lehman, is the former president and chief executive officer of Hughes Space and Communications and the past president of Boeing Satellite Systems. Krekel also is a graduate of the U.S. Naval Academy who spent five years as a naval officer, where he served as an aide in the office of the Chief of Naval Operations at the Pentagon. Director George A. Sawyer, a founding partner of J.F. Lehman, is former assistant secretary of the U.S. Navy, Shipbuilding & Logistics. He was also a submarine engineer officer in the U.S. Navy, and is a member of the American Society of Naval Engineers and the Society of Naval Architects and Marine Engineers.Director John W. “Bill” Shirley is the former program manager of the U.S. Department of Energy, Naval Reactors Division, Seawolf and Virginia Class Submarines. He has 34 years of experience in senior positions at the Navy Division of Naval Reactors. Shirley now works as a private consultant, giving preference to J.F. Lehman Partners.Two of the remaining six directors — C. Alexander Harman and Louis N. Mintz — are employed by J.F. Lehman.

Nice job by Joan Conrow on the article.
Aloha, Brad