CBO Testified on the Value of the Department of Defense's Annual 30-Year Shipbuilding and Aviation Plans

June 1, 2011

Every year, the Congress is asked to approve the procurement of one years worth of expensive items such as ships and aircraft. Yet those decisions have long-term implications. Well-constructed 30-year acquisition plans for major weapon systems can provide information about those implications. This morning CBO senior analyst Eric Labs testified before the U.S. House Armed Services Committees Subcommittee on Oversight and Investigation to discuss the value of the Department of Defenses (DoDs) annual 30-year shipbuilding and aviation plans.

The Key Points

The 30-year ship and aircraft plans benefit Congressional oversight and decisions about funding in at least three different ways:

  • Thirty-year plans may reveal cumulative long-term effects of annual appropriation decisions that may not be apparent from a shorter perspective.
  • Such plans may also reveal imbalances between long-term objectives for inventories and projected budgetary resources.
  • The plans provide information on DoDs assumptions about the service lives of major weapons systems and how those assumptions may affect its inventory goals.

The Details

The 30-year shipbuilding and aviation plans enable the Congress to assess the long-term effects of the incremental decisions that are made each year in the annual authorization and appropriation process. Ships and aircraft take decades to develop and procure, and often remain in the inventory for decades more. In the absence of a 30-year plan, the cumulative effects of those annual decisions may not be well understood. Recent CBO reports provide some examples of the value of examining procurement quantities and inventories of ships and aircraft over a 30-year period. For example, CBOs analysis of the Navys 2011 shipbuilding plan indicated that inventories of surface combatants would fall below the Navys goal in the 2030s.

The long-term plans may reveal whether an imbalance exists between the inventory goals for ships or aircraft and the resources the military services are projected to receive. If such an imbalance was evident, the Congress might want to more closely review the defense strategy that was the basis for DoDs inventory goals, the amount of money the department would receive, or how those resources would be spent. For example, the Navys 2011 shipbuilding plan revealed that the service would face a substantial budgetary challenge in the 2020s and early 2030s, when it expects to purchase 12 replacement ballistic-missile submarines and still pay for other ships. That, in turn, has led the Congress and the Navy to focus more early attention on reducing the cost of those ships. Over the past five years, the Navys 30-year plans showed many year-to-year changes. Those changes greatly illuminated the Navys challenge of developing a program that meets inventory goals and is affordable.

The 30-year plans also provide the Congress with information about the relationship between DoDs long-term objectives for its inventories and the departments assumptions about the service lives of ships and aircraft. The 30-year plans make the assumptions about service life more transparent so that the Congress has the opportunity to examine whether those assumptions are realistic and to judge whether it is investing sufficient resources to maintain the fleet. If not, more resources could be needed to meet inventory goals.

Although many uncertainties limit the utility of 30-year plans as predictive tools, the documents can nevertheless help inform the Congress of changes in plans and circumstances that are likely to arise. For example, the Congress is frequently faced with events and decisions about military aircraft inventories and acquisition budgets for which the major implications may not be felt until after 10 years. Recent occasions include: the structural failure of an F-15 Eagle that could have portended the need to retire those fighters many years earlier than expected; delays in the development of the F-35 Joint Strike Fighter that will probably compel the services to retain older aircraft longer than planned; and the decision to begin developing a new long-range bomber that will require substantial funding in years well beyond the span of DoDs five-year Future Years Defense Program.

In much the same way that CBOs budget baseline provides a reference trajectory for federal spending under current law, a well-documented 30-year aviation or shipbuilding plan can provide a picture of how forces may evolve over time and what investments will be needed if current plans and assumptions remain unchanged. The value of that picture lies not in its accuracy as a blueprint of the future but rather in its utility as a basis for the Congress to evaluate the long-term implications of changes to todays plans and circumstances.

Some changes would enhance the value of future 30-year plans. The Congresss oversight of the Navys shipbuilding programs could be improved if the Navy included in its reports and the accompanying tables a listing by class of the types of ships that would be procured, delivered, retired, and serving in the fleet each year over the 30-year span. Similarly, long-term aircraft acquisition plans would be more informative if they displayed the expected inventories of each type of aircraft over the span coveredto include the schedule over which existing aircraft were expected to be phased out of the force and replacements phased inand explained the underlying assumptions. Understanding those assumptions would make possible analyses of the potential implications of changes to them.

Although DoD has not produced 30-year plans for ground combat vehicles, rotary and fixed wing aircraft, and trucks, such plans would also be useful for oversight of the Armys and Marine Corps acquisition plans, particularly if they provided information about the size and age of current inventories, inventory goals, and plans to replace or modernize vehicle and aircraft fleets and the costs of doing so.