Note: A subsequent version of this report, An Analysis of the Navy’s Fiscal Year 2015 Shipbuilding Plan, was published in December 2014.
Since 2006, CBO has performed an analysis of the Navy’s annual report on its plans for building new ships over the next 30 years. This CBO report summarizes the ship inventory goals and purchases described in the Navy’s 2013 plan and assesses their implications for the Navy’s funding needs and ship inventories through 2042.
The 2013 plan contains some significant changes in the Navy’s goals for shipbuilding during the next 30 years. Compared to the 2012 plan, the 2013 plan:
The Navy estimates that the cost for new-ship construction under its plan would be $505 billion over 30 years, or an average of $16.8 billion per year (all figures are in 2012 dollars). In contrast, CBO estimates that the Navy’s intended new-ship construction would cost $599 billion over 30 years, or an average of $20.0 billion per year.
CBO’s estimate of the costs for new-ship construction over the next 30 years is 19 percent higher than the Navy’s estimate, but average annual costs vary by decade. As shown in the figure below, CBO’s estimates are 11 percent higher than the Navy’s for the first 10 years of the plan, 13 percent higher for the following decade, and 33 percent higher for the final 10 years of the plan.
The figures above are solely for the construction of new ships, the only type of costs reported in the Navy’s 30-year shipbuilding plans. Total shipbuilding costs—which include new construction, refueling of nuclear-powered aircraft carriers, and some other items—would average about $19 billion per year using the Navy’s figures. Under CBO’s estimate, total shipbuilding costs would average about $22 billion per year.
The Navy’s plan would not meet the service’s goals for inventories of destroyers, attack submarines, and ballistic missile submarines:
The Navy’s plan would largely meet its inventory goals for aircraft carriers and amphibious ships.
If the Navy receives the same amount of funding for new-ship construction in the each of the next 30 years as it has on average over the past three decades—$14.3 billion annually—it will not be able to afford all of the purchases in the 2013 plan. CBO’s estimate of $20.0 billion per year for new-ship construction in the Navy’s 2013 shipbuilding plan is about 40 percent above the historical average funding. CBO’s estimate of $21.9 billion per year for the full cost of the Navy’s shipbuilding program is about 37 percent higher than the $16.0 billion the Navy has spent each year on average for all items in its shipbuilding accounts over the past 30 years.