Since 2006, CBO has performed an independent analysis of the Navys annual long-term shipbuilding plan at the request of the House Armed Services Committee. The latest in that series, a CBO report released today summarizes the ship inventory goals and purchases described in the Navys 2012 plan and assesses their implications for the Navys funding needs and ship inventories through 2041.
CBOs Key Findings
The Navy currently envisions buying a total of 275 ships during the next 30 years at an average annual cost of about $15.5 billion (in 2011 dollars) for new construction alone, totaling $465 billion over 30 years (about 6 percent less than its estimate for the 2011 plan). Those figures are solely for the construction of new ships, the only type of costs reported in the Navys 30-year shipbuilding plans. Total shipbuilding costswhich include new construction, refueling of nuclear-powered aircraft carriers, and some other itemswould average about $17.3 billion per year.
By comparison, using its own models and assumptions, CBO estimates that the cost for new-ship construction under the 2012 plan would average about $18.0 billion per year, or a total of $539 billion through 2041, about 16 percent more than the Navy estimates. Including the expense of refueling aircraft carriers as well as outfitting new ships raises that average to about $19.8 billion per year.
The total costs of carrying out the Navys 2012 plan, in CBOs estimation, would be less than those for the 2011 plan, but they would still be much higher than the funding that the Navy has received in the pastabout $15.6 billion a year on average over the past 30 years .
Through 2011, at the direction of the Congress, the Department of the Navy issued annual reports that described its plans for ship construction over the coming 30 years. Recently relieved of that annual requirement, the Navy described its intentions for shipbuilding in stages, through documents that can be combined with one another and with the plan of the previous year to yield a new 30-year plan comparable to earlier ones. CBO used that plan as the basis of its study.
CBOs analysis provides further insight into the Navys shipbuilding plans. Specifically:
This report was prepared by Eric Labs of CBOs National Security Division.