Testimony on CBO's Analysis of the Navy’s Fiscal Year 2016 Shipbuilding Plan

Testimony by Eric J. Labs, Senior Analyst for Naval Forces and Weapons, before the Subcommittee on Seapower and Projection Forces, Committee on Armed Services, U.S. House of Representatives.

The submitted statement reprises CBO’s report, An Analysis of the Navy’s Fiscal Year 2016 Shipbuilding Plan, which was released on October 29, 2015. That report was required under the 2012 National Defense Authorization Act.

The Navy is required by law to submit a report to the Congress each year that projects the service’s inventory goals, procurement plans, and cost estimates for its shipbuilding program over the coming 30 years. Since 2006, CBO has been performing an independent analysis of the Navy’s latest shipbuilding plan. The CBO report that is incorporated into this testimony analyzes the implications of the Navy’s 2016 plan for its ability to meet inventory goals through 2045. The report also provides independent estimates of the cost of the Navy’s shipbuilding program and compares those cost estimates with the funding levels that the Navy has received historically.

According to its most recent 30-year plan, the Navy envisions buying a total of 264 ships over 30 years at an average annual cost of $16.5 billion for new construction and $18.3 billion for total shipbuilding (including 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 $2 billion higher—an average of $18.4 billion per year for new construction or $20.2 billion per year for total shipbuilding. Those amounts are significantly greater than the amounts the Navy has received for shipbuilding annually over the past 30 years.