Foreign Military Sale of the Fast Missile Craft (FMC) to Egypt ~ ASIAN DEFENCE

The Defense Security Cooperation Agency notified Congress Dec. 17 of a possible Foreign Military Sale to Egypt of the Fast Missile Craft (FMC) program and associated parts, equipment, training and logistical support for a complete package worth approximately $240 million.

The Government of Egypt has requested a possible sale for the Fast Missile Craft (FMC) program which was previously reported under Congressional notifications 04-05 and 0C-08. This notification is to document the Government of Egypt’s decision to expand the program from three (3) FMCs to four (4) FMCs including the following; one (1) additional OTO-Malera 76mm/62 caliber Super Rapid Fire Dual Purpose guns, (1) additional MK 31 Mod 3 Rolling Airframe Missile (RAM) Guided Missile Weapon System, installation of Hull, Mechanical, and Electrical equipment, communications, operations equipment, spare and repair parts, support equipment, personnel training and training equipment, publications and technical documents, and U.S. Government and contractor technical and logistics support services, and other related elements of logistics support.

The estimated cost is $240 million. The sale of Fast Missile Craft to Egypt was originally notified on 7 August 2004, in Transmittal 04-05 for three FMCs at a value of $565M. On 7 September 2008, the Administration notified an inflationary cost increase to that program in Transmittal OC-08, for an additional $485M. This notification of $240M brings the total notified value of the FMC program to $1.290B.

Fast Missile Craft (FMC)

Program Status: In progress. In January of 2001, the Egyptian Navy (EN) announced that it had selected Halter Marine to provide four Ambassador Mk III fast attack craft (FAC) for this program. On 01 July 2001, the Egyptian Armament Authority approved the contract, and forwarded it to the Ministry of Defense for final approval.

Operational Requirement: The EN has a requirement for a force of modern FAC to conduct independent and joint surveillance and strike operations against surface shipping and armed surface adversaries in the littoral waters of the Mediterranean and Red Seas. Such operations are intended to insure the use of coastal sea lines of communication (SLOCs) by Egyptian forces, and deny the same use by potential adversaries. Mission contingencies require a FAC with anti-air warfare (AAW), anti-surface warfare (ASuW), and electronic warfare (EW) capabilities that will allow it to operate in a moderate to high threat environment. Signature reduction, high speed, and maneuverability are required for the FAC to conduct the anticipated pursuit, intercept, and engagement scenarios.

Program Background: Since the mid-1990s, the EN has been considering the procurement of a new FAC to begin replacing many of the FAC currently in inventory, most of which are past their effective service lives. Currently, the EN has twenty-one FAC in its inventory:

Four Osa I (Type 205) class – The survivors of a group of 13 Osa I (Type 205) FAC that were delivered to Egypt by the Soviet Navy in 1966-68.
Six Ramadan class – Built by Vosper Thornycroft in the UK and commissioned in 1981-82.
Six October class – Built in Alexandria in 1975-76 using a Komar class hull design. All six units received refits at Vosper Thornycroft’s facilities in the UK in 1979-81.
Five Hegu class – Chinese-built variants to the Komar class design. Acquired from China and commissioned into Egyptian service on October 27, 1984.

It must be noted that the Egyptian Government refers to its current FAC procurement as its Fast Missile Craft (FMC) Program, apparently viewing that phrase as less politically sensitive than Fast Attack Craft. No formal solicitations were issued until July 1999; however, the EN received a number of unsolicited bids prior to that date including:

Bollinger Shipyard offering a variant of the Cyclone class patrol boats. Reportedly their proposal envisioned building the first two units of the class at Bollinger’s facilities in Lockport, Louisiana, with follow-on units built in Egypt. All hull, mechanical, and electrical (HM&E) modules were to be designed and built by Bollinger. Bollinger’s proposal was estimated at US$60M per hull, with HM& comprising 35% of the cost, and ship’s systems 65%.

Almaz Central Marine Design Bureau offering the Tarantul (Project 12421) FAC at US$52M per unit, and were reportedly willing to go even lower. Since a Tarantul acquisition would be almost entirely Russian in content, US FMA funding would not have been available to support this acquisition.

Oregon Iron Works reportedly offered an updated version of the Peterson 511 (Saudi Arabian Al Siddiq) class FAC.

In early 1999, the U.S. Naval Sea Systems Command (PMS-380) tasked Naval Surface Warfare Center, Carderock Division, Detachment Norfolk, to determine the feasibility of meeting the Egyptian FAC requirements using a modified Cyclone (PC-14) design. The Egyptians reportedly had concerns with the use of the Cyclone class hull as the basis for their new FAC. The Cyclone hull design is based on the same Vosper Thornycroft design used by Egypt for their Ramadan class, yet the Cyclone design is heavier and lacks the weapons load-out found in the Ramadan. From the Egyptian perspective, the Cyclone design, as it exists in the US Navy inventory, does not have sufficient weight margin to include a 76mm gun mount, Rolling Airframe Missile (RAM), Harpoon, and Phalanx. The feasibility study conducted by the Carderock ultimately concluded that most of Egypt’s FAC requirements, as were specified in late 1998/early 1999, could be met within the modified Cyclone design, but there were some significant shortfalls. For example, to modify the Cyclone design to meet Egypt’s needs Carderock recommended:

Reducing the sea keeping requirements from 5 to 3 for full operations, and from 7 to 5 for restricted operations.
Reducing the range radius from 1000 nm to a minimum acceptable range radius of 500 nm.
Fitting two Super Barricade decoy launchers instead of four Mk-36 Super RBOC launchers.
Either eliminating the Close-in-weapons System (CIWS) or reducing the number of Harpoons from eight to four (two twin-pack launchers instead of two quad-packs).

Based on these shortfalls, the modified Cyclone design, as proposed by PMS-380 was probably dropped from future consideration. Additionally, the US Navy estimated that the cost of four modified Cylcone class FACs would be around US$610.1M, which probably exceeded the EN’s budget.

While Carderock was conducting the design feasibility study, PMS-380 also went out to US Industry requesting Pricing and Acceptance (P&A) for various US systems to go aboard the FAC, including the Phalanx CIWS, the RAM system, and 76mm guns. The P&A request was written as if these systems would be Government Furnished Equipment (GFE) for the program. However, the EN preferred that the selected shipbuilder would buy these systems direct in order to reduce costs.

In March of 1999, at a meeting of the Joint Egyptian/US Military cooperation Council, the Government of Egypt asked the Naval Sea Systems Command to help manage the procurement of their future FAC project. Subsequently, Egypt issued a contract valued at approximately US$1M to NAVSEA (PMS-380 and PMS-325) for advisory assistance on the FAC procurement.

On 22 July 1999, Egypt issued a Request for Quotation (RfQ) for the FAC Program, with bids due no later than 15 October 1999. The RfQ was issued to US shipyards to procure four FAC and associated support and services, using a Direct Commercial Sales (DCS) Contract and US Foreign Military Funding (FMF). The following US shipyards were probably included on the bidder list:

Ingalls Shipbuilding (now Northrop Grumman Ingalls Shipbuilding).
Avondale Industries Inc. (now Litton Ingalls Shipbuilding).
Bollinger Shipyards Inc. teamed with Vosper Thornycroft.
Halter Marine, offering the Ambassador Mk III design, and teamed with Lockheed Martin.
Marinette Marine, probably using a Singapore Technology variant of the Lurssen FPB-62 design.
Oregon Iron Works, possibly still offering an updated version of the Peterson 511 (Saudi Arabian Al Siddiq) class FAC.
Swiftships Inc., probably offering its Defiance class design.
Bender Shipbuilding and Repair Company.

Subsequent to receiving the RfQ, Ingalls and Avondale (then the principal components of Litton Ship Systems) elected not to submit bids. In late 1999, the bidders list was down-selected to five shipyards including Halter Marine, Bollinger Shipyards Inc., Marinette Marine, Swiftships Inc., and Bender Shipbuilding and Repair Company, Inc.. By 22 August 2000, the list was further shortened to the final three shipyards (Halter Marine, Marinette Marine, and Bollinger Shipyards Inc). On 25 August 2000, the final three were involved in a face-to-face shootout exposing all the details of the program including the best and final offer.

On 03 January 2001, Halter Marine announced that it had been selected by the EN to provide four Ambassador Mk III class FAC to satisfy its FMC program requirement. The program was valued at US$406M (US$200M from FMA and US$206M financed over five years), including construction, all weapons, integration, spare parts and technical services. Halter Marine will probably have an extremely difficult time delivering the total package for the reported US$406M price tag. Industry sources suggest that the program was under-bidded by as much as 33%, to assure a Halter Marine contract. Privately, the EN also expressed concern over the cheapness of the price quoted, and initially demanded a high-priced performance bond to guarantee the delivery, and assurances that there would be no cost overruns.

On 19 April 2001, Halter Marine’s parent company, Friede Goldman Halter (FGH) announced that it had filed a petition for relief under Chapter 11 of the US Bankruptcy Code, which allows for reorganization of the company’s debt. Several weeks earlier, FGH had attempted to refinance its debt without success. Forward leaning statements by Halter Marine suggest that the EN contract will not be affected by the filing of Chapter 11.

On 01 July 2001, the Egyptian Armament Authority approved the contract, and forwarded it to the Ministry of Defense for final approval. By the end of July 2001, Halter Marine will meet with the Armament Authority to demonstrate its financial ability to continue with this program. Due to its financial situation, Halter Marine probably will not be able to acquire the required performance bond. However, the EN may be proceeding without the bond, and instead levying additional requirements on Halter Marine. Sources indicate that the Egyptian Government will conduct audits on Halter Marine every three months to ensure its financial ability to continue with the program.

Program Acquisition Plan: On 01 July 2001, the Egyptian Armament Authority approved the contract with Halter Marine, and forwarded it to the Ministry of Defense for final approval. Approval will probably come before the end of 2001, with construction commencing in 2002. The first unit is scheduled to be delivered by 2005 followed by one unit per year. The following acquisition plan, for a buy of four units valued at US$101.5M each, is projected:

Concept Start 1999

Concept Select 2000

Contract Design 2000

Design and Construction Considerations: When the EN released its initial FAC solicitation in July 1999, general characteristics included a vessel that would be fully operational in conditions up to Sea State 4 and able to survive through Sea State 6. It would be of welded construction using materials consistent with specified structural strength, reduced maintenance, and weight requirements. Builders were to use superstructure materials that enhance signature reduction, reduced maintenance, and weight.

Additionally, the FAC would be designed and constructed to provide a service life of at least twenty years with minimum maintenance and repair. This service life is predicated on an operational profile that has the FAC on patrol for eight days each month. The remainder of the time the FAC would be pier side in a reduced availability status. The expected propulsion plan operating hours per engine was 2400 hours per year. The ship’s notional maintenance cycle includes a maintenance availability and dry-docking every 24 months.

The EN would provide cryptographic, identification friend or foe (IFF), and fueling at sea equipment as Government Furnished Property (GFP). Wherever economically feasible, the FAC design was to incorporate automation and ship equipment performance monitoring technology to minimize crew requirements. The EN’s specifications call for a crew of 36, which is seen as the minimum needed to be able to operate the ship for up to eight hours at General Quarters (Condition I) and for up to eight days of sustained at-sea operations with weapons and sensors manned at Wartime Cruise (Condition III).

Additional weapon and sensor system requirements as identified in the solicitation:

An integrated bridge system.
External communications system.
Tactical data links.
A combined air/surface surveillance radar system capable of 3D-target designation, and electronic counter counter measures (ECCM) capable.
Signaal’s (now Thales Nederland) Scout navigation radar system.
A fire control system capable of using automatic acquisition and tracking, including passive track ability of targets, with extensive ECCM capability.
A lightweight shipboard Electro-Optical system.
Electronic Support Measures/Electronic Countermeasures suite (ESM/ECM) with 360-degree coverage.
Four decoy launchers for 360-degree coverage.
Eight Boeing Harpoon surface-to-surface missiles (SSMs).
Point defense missile system comprising the Raytheon Mk 49 guided missile launching system for the Rolling Airframe Missile (RAM)
Raytheon Mk 15 Mod 21 (Block IB) Phalanx close-in-weapons system (CIWS).
United Defense LP Mk 75 Dual-purpose 76mm/62 super rapid-fire gun (upgraded and overhauled).
Two M60 general-purpose removable machine guns.

The combat management system (CMS) was to be of multi-role capability with anti-air (AAW), anti-surface (ASuW), electronic warfare (EW), and active and passive countermeasure capabilities. Lockheed Martin Naval Electronics &; Surveillance Systems – Undersea Systems was chosen as the CMS system provider and integrator by Halter Marine, and will provide a flexible state-of-the-art design based on commercial-off-the-shelf technology.