June 15 (UPI) -- The U.S. Navy said its Ship to Shore Connector program crossed the thresholds of a decades-old acquisition law after coming in over budget.
In a statement, the Navy said it notified Congress of the breach and requested a higher budget for the project after it exceeded cost thresholds under the Nunn-McCurdy law, according to Defense News and Seapower Magazine.
The Navy said the unit cost per ship "exceeds the current baseline estimate, breaching the significant Nunn-McCurdy cost threshold," though it said the breach was not "critical" and the program will not need to be recertified.
Textron Inc. has produced so far three crafts at a price tag of $63.7 million each. The original estimated cost was $53.7 million per unit.
"The breach is attributed to first in class challenges that led to increased construction costs resulting from labor and material cost growth and schedule related issues on early craft," the statement reads.
The U.S. Navy said it anticipates the program will stabilize and production will continue.
The Navy's SSC program replaced an older landing craft designed and built in the 1980s and 1990s.
Textron was awarded a new contract -- worth $386.3 million -- to produce the ships in April 2020.
The first and second craft, the so-called LCACs 100 and 101, moved into post-delivery testing at the Naval Surface Warfare Center in Panama City, Florida, last September.
Earlier this month, the third craft was delivered to the Navy and transited to Panama City.
Production of the fourth craft is currently in progress. Altogether, the Navy plans to replace the old LCAC fleet and buy 72 of the watercraft.
According to the Defense Acquisition University, the program would be terminated immediately if costs increased by more than 25%.
Production is underway on 12 more of the vessels at a shipyard in Louisiana.