Rewritten – June 2010

Program Status: In Progress.

Operational Requirement: The Egyptian Navy (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 including:

• Three 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 VT Shipbuilding in the UK and commissioned in 1981-82.
• Five October class – Built in Alexandria in 1975-76 using a Komar class hull design. All five remaining units received refits at VT’s facilities in the UK in 1979-81.
• Four Hegu class – Chinese-built variants of the Komar class design. Acquired from China and commissioned into Egyptian service on 27 October 1984.
• Five Tiger class – Geman-built Type 148 class FAC transferred to the EN in 2003 and originally commissioned in 1975.

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 Sale (DCS) contract with US Foreign Military Funding (FMF). The following seven US shipyards were probably included on the bidders list:

• Ingalls Shipbuilding (now Northrop Grumman Ship Systems)
• Avondale Industries Inc (now Northrop Grumman Ship Systems)
• Bollinger Shipyards Inc teamed with VT Shipbuilding
• VT 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 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 would have had an extremely difficult time delivering the total package for the reported US$406M price tag. Industry sources suggest that the program was under-bid by as much as 33%, to assure a Halter Marine contract. Privately, the EN also expressed concern over 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. Several weeks earlier, FGH had attempted to refinance its debt without success. On 01 July 2001, the Egyptian Armament Authority approved the contract, and forwarded it to the Ministry of Defense for final approval. However by the end of 2001, Halter Marine was not able to demonstrate its financial ability, nor able to acquire the required performance bond. As part of the FGH bankruptcy settlement, Halter Marine Inc. was purchased by Vision Technologies Kinetics (US arm of Singapore Technologies Marine) in mid-2002 and renamed VT Halter Marine.

In early 2003, the Egyptian Government submitted a Letter of Request (LoR) to the US Government in regards to a Foreign Military Sale (FMS) Program for the procurement of three Ambassador III class FAC under a single source contract. The reduction to three units from four was a result of transitioning from a DCS to a FMS sale as well as increased costs due to program delays such as inflation. The LoR was approved in late 2003 and on 08 July 2004, the Defense Security Cooperation Agency (DSCA) notified Congress of the sale.

On 01 December 2005, VT Halter Marine signed a US$28.8M contract (Phase I) with the US Department of Defense (DoD) to develop a functional design for a fast missile craft (FMC) for the Egyptian Navy (EN). In December 2006, a contract modification for US$165M was announced which allowed VT Halter Marine to procure long lead time materials. Phase II began in September 2008 after the completion of a US$393M construction contract. The total contract value for the three units was estimated at US$566M. In mid-2009, the Egyptian Government requested a fourth unit and on 17 December 2009, the Defense Security cooperation Agency (DSCA) notified Congress of the sale. A contract for the fourth unit was in place by March 2010. All four vessels will probably be complete by 2014, although the complexity of the construction, coupled with the current volume of work at VT Halter Marine, may delay the completion timeframe.

Program Acquisition Plan: On 01 December 2005, VT Halter Marine signed a US$28.8M contract (Phase I) with the US Department of Defense (DoD) to develop a functional design for a fast missile craft (FMC) for the Egyptian Navy (EN).

A construction contract for the three FAC was expected to be completed by the end of 2004. Industry sources indicate that the program remained in limbo until January 2005 due to significant numbers of technical questions that were posed by all parties. These issues were apparently resolved at a meeting in Alexandria in January 2005. As a result, the FMC program moved forward in two phases with the first being development of a functional design (Ambassador III FAC). Under this phase, VT Halter Marine conducted analytical, design, engineering and model testing for the FMC. The effort included preparation for the integration of C4ISR as well as a combat system effectiveness study to validate the FMC system requirements. The first phase was completed in December 2006.

In May 2010, AMI received information that the EN was in discussions concerning the procurement of two additional units (five and six). These units could begin around 2014.

The construction schedule for the class is as follows:

Design and Construction Considerations: When the EN released its initial FAC solicitation in July 1999 (specifications still apply in 2003), general characteristics included a vessel that would be fully operational in conditions up to sea state four and able to survive through sea state six. 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 plant operating hours per engine was 2400 hours per year. The ship’s notional maintenance cycle includes 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 incorporates automation and ship equipment performance monitoring technology, intending to minimize crew requirements. The EN’s specifications call for a crew of 36, which is seen as the minimum needed to operate the ship for up to eight hours at General Quarters (Condition I) and up to eight days of sustained at-sea operations with weapons and sensors manned at Wartime Cruise (Condition II).

Additional weapon and sensor system requirements identified in the solicitation:

• Integrated bridge system (IBS).
• 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.
• Thales Naval Nederland Scout navigation radar system.
• A fire control system capable of using automatic acquisition and tracking, including passive track ability of targets, with extensive Electronic Counter Countermeasures (ECCM) capability.
• 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 31 guided missile launch system (Mk 49 21-cell launcher for RIM-116 missiles).
• Raytheon Mk 15 Mod 21 Phalanx 1B close-in-weapons system (CIWS).
• OTO Melara Mk 75 Dual-purpose 76mm/62 super rapid-fire gun (upgraded and overhauled).
• Two M60 general-purpose removable 7.62mm machine guns.

Lockheed Martin was awarded a US$14.3M contract on 06 December 2005 (from VT Halter Marine) for the initial phase of the C4ISR combat system design and integration for the three FMC.

Key Personnel:

• Egyptian Navy

Lt. Gen. Mohab Mamish

Commander in Chief of the Egyptian Navy

Egyptian Naval Headquarters

Ras El-Tin Naval Base

Alexandria, Egypt

Mr. Gary Feldman

Director Advanced Naval Systems Business Development

Lockheed Martin

199 Borton Landing Road

Moorestown, New Jersey 08057

United States

Tel: + 1 856 608 7508

Fax: + 1 856 722 2101

E-mail: gary.feldman@lmco.com

Website: http://lockheedmartin.com

• L-3 Communications

Mr. Joseph Alvite

Business Development

L-3 Communications

Water Front Technology Center

1 Federal Street A&E-3SW

Camden New Jersey 08103

United States

Tel: +1 856 338 6170

E-mail: NAVCOM@L-3Com.com (include "MARCOM" in the subject line)

Website: http://www.L-3com.com/CS-East/

• L-3 Communications Brashear

Mr. John Barentine

Business Development

L-3 Communications Brashear LP

615 Epsilon Drive

Pittsburgh, Pennsylvania 15238
United States

Tel: + 1 412 967 7700

Fax: + 1 412 967 7973

E-mail: John.Barentine@L-3Com.com

• Argon ST

Mr. Jeff Edgar

Director of Business Development

Argon ST

8419 Terminal Road

PO Box 1430

Newington, Virginia

United States

Tel: + 1 703 541 1557

Fax: + 1 703 541 1572

E-mail: jeff.edgar@argonst.com