Testimony on An Analysis of the Navy's Shipbuilding Plans

Report
March 10, 2011

Testimony before the Subcommittee on Seapower and Projection Forces, Committee on Armed Services, U.S. House of Representatives

Chairman Akin, Ranking Member McIntyre, and Members of the Subcommittee, thank you for the opportunity to testify on the Navy’s plans for its shipbuilding programs and corresponding budget. My submitted statement today reprises CBO’s May 2010 study entitled An Analysis of the Navy’s Fiscal Year 2011 Shipbuilding Plan, which addresses the most recent long-term plan released by the Navy. The Navy’s budget submission for 2012 (including information on the intentions for 2013 through 2016) makes only minor changes to the 2011 plan and does not change the basic information included in CBO’s study or even most of the details of the analysis.

Until this year, the Navy has been required by law to submit a report to the Congress each year that projects the service’s shipbuilding requirements, procurement plans, inventories, and costs over the coming 30 years. Since 2006, CBO has been performing an independent analysis of the Navy’s latest shipbuilding plan at the request of this Subcommittee. After summarizing the ship requirements and purchases described in the Navy’s 2011 plan, CBO’s latest study assessed their implications for the Navy’s funding needs and ship inventories through 2040.

According to its most recent 30-year plan, the Navy envisions buying a total of 276 ships over 30 years at an average annual cost of about $16 billion (in 2010 dollars) for new construction alone, or roughly $18 billion for total shipbuilding (which includes new-ship construction, refueling of nuclear-powered aircraft carriers, and other costs related to shipbuilding). By comparison, CBO’s estimates of the costs of the Navy’s plan are about $3 billion a year higher—an average of $19 billion per year for new construction or $21 billion per year for total shipbuilding. There is nothing in the Navy’s 2012 budget request that suggests those numbers will change significantly.