This overpriced, problem-plagued Navy ship is Exhibit A for when to cut your losses

Surely throwing away a 4-year-old ship is the epitome of wasteful defense spending, especially after billions were sunk into making it operational. But the most recent twist in the interminable saga of the struggling littoral combat ship — the Defense Department wants to decommission four of them — illuminates a fundamental paradox: Sometimes the least wasteful course of action is to discard things, even ones dearly paid for, that over time will cost you much more than they’re worth.

As absurd as junking virtually new littoral combat ships might seem, it would be more wasteful to force the Navy to spend additional billions operating and upgrading several ships that have been plagued with serious problems and have failed to meet numerous expectations just to grow fleet size to catch up with Chinese shipbuilding.

Yet it’s quite possible that Congress won’t grasp this logic. Or perhaps it simply won’t want to; after all, Congress ordered the Navy in 2018 to purchase three more of the vessels than the Navy wanted.

The Biden administration is finally trying to scale back the troubled program in the 2022 defense budget request it released last week. The Pentagon wants to decommission four littoral combat ships, on top of two others it has already received permission to take out of service. These beleaguered vessels were meant to have 25-year service lives but are being retired only four to 13 years after their commissioning.

Lawmakers seem set to protest. As Rep. Elaine Luria, D-Va., said before the budget was released, “I do not agree with divesting of resources and assets that we have today that are desperately needed in order to deal with the issue we have with China, with Russia, and just around the world.”

As I explained in an earlier piece for NBC News THINK, littoral combat ships were intended for coastal operations facing weaker navies like those of North Korea or Iran, rather than China and Russia. They were devised two decades ago to be small, fast and inexpensive corvettes that could slot in different equipment modules (anti-submarine, anti-mine or anti-ship) depending on their missions.

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However, the costs of the two designs the Navy settled on — the Independence class and the Freedom class — more than doubled, while many of the technologies they were built around failed to work. A decade later, the Navy found itself locked into buying lots of overpriced ships with non-interchangeable mission modules (the anti-submarine and anti-mine mission modules still aren’t even ready) that were badly under-gunned compared to the similarly sized vessels of other navies.

While the Navy has spent years trying to address the littoral ships’ problems — and it may be making progress on some fronts — excessive operating costs and maintenance requirements endure. Defense News reported in April that littoral combat ships cost $70 million a year to operate, compared to $81 million for the much larger and more capable missile destroyer.

The Navy contests that figure, claiming the annual operating cost is around $50 million. But even that lower number is scandalous, because a missile destroyer is three times heavier, hasit four times the number of crew members, and it can carry 96 long-range anti-air or surface attack missiles, while a littoral ship can carry only eight long-range anti-ship missiles at most (and then only after an upgrade). In other words, money spent operating littoral combat ships could instead go to deploying more powerful vessels with vastly greater combat capability.

Furthermore, Freedom-class ships, in particular, have repeatedly broken down at sea and required towing to port because of problems with their engines. As a result, the Navy has avoided deploying these vessels overseas and restricted them from cruising at maximum speed, and in January it halted deliveries of the class while it tries to work out cost-effective fixes. The Freedom’s low fuel capacity has also meant it has spent up to 40 percent of the days that it ostensibly has been operationally deployed sitting at port being refueled and refitted.

In the 2021 national defense authorization, Congress did allow the Navy to retire the lead ships of both littoral combat ship types, with decommissioning scheduled for later in the year. That’s because these were basically test ships that would require large sums to refit into operational condition.

In fact, the Navy also wanted to decommission two more test ships, but Congress refused. Now they’re part of the new Navy decommissioning request in the 2022 budget. The Navy also wants to retire two younger Freedom-class ships, the 5-year-old USS Detroit and the 4-year-old USS Little Rock, both of which have repeatedly broken down because of the aforementioned engine problems and require expensive repairs and equipment installations to re-enter service.

Retiring all four would save $2.4 billion in upgrades and repairs — enough to procure two brand new frigates or a missile destroyer. While it’s true that the Navy originally intended to upgrade the lead ships for operational capability, the service decided it just wasn’t worth it given their costs and poor performance. This move makes sense.

This doesn’t mean the Navy plans to throw all of the ships away. Quite the opposite — the service wants to rapidly outfit the nearly 30 that remain with the armament and mission systems they desperately need. The Independence-class littoral ships, after all, have deployed successfully in the Pacific.

Littoral ships could still handle tasks that don’t require big ships, such as protecting convoys from submarines, neutralizing minefields and tackling low-grade missions against pirates and drug smugglers. The addition of anti-ship missiles gives them some ability to at least shoot back from a distance in tense places like the South China Sea.

But that doesn’t change the reality that the ships’ high operating costs make them an expensive solution to handling these chores — which reduces the service’s ability to build and operate destroyers and (if successful) new frigates that can better carry their weight in pitched battle. That’s why the Navy wants to reduce its littoral combat ship inventory: It might mean fewer ships in total but more ships that are useful in a fight.

There’s no doubt that retiring newly built warships is emblematic of wasteful defense spending and program mismanagement. But the Navy is belatedly trying to correct its mistakes by trimming away ships that have proven excessively expensive and, in some cases, barely usable.

Lawmakers worried about declining fleet size would be better served lobbying to build other proven ships. Meanwhile, they should resist indulging the sunken-costs fallacy by clinging to expensive and underperforming ships and instead think about ways to get more bang for the taxpayer’s buck.