Wired has a great piece up about the trainwreck (shipwreck?) that is the Littoral Combat Ship or LCS, which was intended to be the Navy's next generation of smart warships.
About ten years ago, the Navy's fleet was in decline. They had not deployed a new class of ship since the cold war and their dwindling fleet was proving too large and slow to maneuver effectively in coastal waters against smaller, faster enemy craft. And so a pair of Navy strategists proposed building a new fleet of smaller, faster ships designed expressly for fighting in coastal (or littoral) areas. Not only would the ships be smaller, they'd be cheaper, so while they wouldn't be able to withstand much damage, they'd be designed to literally be disposable ships. Donald Rumsfeld loved the idea and immediately committed to this new fleet, despite the fact that it was still basically just concept that had yet to be actually designed and fleshed out.
The development process proved to be fatal. What was intended to be a small, cheap, light-weight ship meant for one specific function turned into a massive and expensive ship designed to be used in dozens of scenarios but actually impractical for all of them. A plug-and-play approach was taken, so that the ships themselves would essentially be empty shells that could be outfitted with any number of variable combat modules depending on the scenario, i.e. sub-hunting, mine-hunting, surface to air, etc. Unfortunately most of the high-tech modules died in the lab, leaving the LCS ill-equipped for the majority of combat operations. Didn't stop the Navy from building the damn things though, because at this point they basically just need ships to put in the water and the LCS is all they've got. The scariest part? By 2016 the LCS will comprise approximately a third of the entire naval combat fleet.
If you've ever seen the late 90s HBO gem The Pentagon Wars starring Cary Elwes and Kelsey Grammer, this should all sound familiar. That movie detailed the development of the Bradley Fighting Vehicle, which was intended to be a simple unarmed troop transport but eventually turned into a massively expensive mini-tank loaded down with weaponry and only able to carry a handful of men. (Richard Schiff gives a wonderful performance as the Bradley's exasperated designer who keeps going before the generals for approval, but instead is constantly ordered to do more ridiculous things to the Bradley, like make it amphibious.)
Head over to Wired for all the details.