U.S. Lawmaker Vows Hearings, Possible Budget Action on Navy Ships

* Draft report by congressional watchdog raised concern

* First LCS ship deployed in Singapore

* Navy says coastal warships vital to U.S. fleet

(Reuters) - Congress plans hearings this summer on the U.S. Navy's $34 billion coastal warship program and may push for funding cuts, the head of the House Armed Services Committee's seapower subcommittee said on Tuesday.

Representative Randy Forbes of Virginia told defense reporters that a draft report by the Government Accountability Office, a congressional watchdog agency, raised new concerns about the program.

The report recommended slowing funding for the two Littoral Combat Ships models, built by Lockheed Martin Corp and Australia's Austal, which have not been fully tested.

It also said there were growing questions about whether the new ships, which were designed to patrol coastal waters while tackling threats like mines and enemy submarines, would meet the Navy's needs.

Forbes' comments came days after Defense Secretary Chuck Hagel toured the USS Freedom, the first of the new smaller warships. The ship ran into coolant system problems during its initial foreign deployment in Singapore. [ID: nL2N0EE03X]

The Navy plans to buy 52 of the new ships by 2034, to help reach its goal of a 306-ship fleet. Funding cuts could jeopardize those plans and would likely meet opposition from the shipbuilders and their proponents in Congress.

The program was plagued by early cost overruns and technical challenges, but Navy officials are growing more confident as the ship matures and costs are coming down. They cited progress on one delayed package of equipment aimed at fighting mines.

Rear Admiral John Kirby, the Navy's chief spokesman, responded to Forbes' comments by saying the new ship class was vital to the Navy's current and future fleet.

Forbes said he would reserve judgment until the GAO report was finalized in July and the Navy had a chance to respond. But he said he would not rule out "more stringent actions" including possible funding cuts as part of fiscal 2014 budget negotiations between the House and Senate later this summer.

"We are going to do some intensive oversight of this program, which will include hearings," Forbes said after a meeting with defense reporters. "I have felt that LCS had bumps in the road but it was moving. The only thing that's really raising this flag is what this GAO report may or may not say." He declined to elaborate.

The draft report, a copy of which was obtained by Reuters, recommended slowing procurement after the current block buy of 24 ships is completed in fiscal 2015, although it said Congress was in a position to act now. It also called for an independent cost estimate by Pentagon officials and a report to Congress about the relative advantages of the Lockheed and Austal models.

The report raised concerns about the Navy's plan to sign contracts for additional purchases even as it considered design changes, potentially significant, to accommodate larger crews, install more common equipment on the two ship models and increase their combat capabilities.

Navy officials and supporters of the program say the combat ships are facing the same kind of teething problems encountered by any new warship.

The LCS models will be a steel monohull built by Lockheed at the Marinette Marine shipyard in Wisconsin and an aluminum trimaran hull built by Austal in Mobile, Alabama.

The ships are designed to travel over 40 nautical mph and launch unmanned drones or helicopters. They also have a large cargo space that can be reconfigured to hold different sensors and weapons.

By Andrea Shalal-Esa