In December 2016, the Navy released a new force structure assessment that called for a fleet of 355 ships—substantially larger than the current force of 283 ships. The Navy can increase the size of its fleet using some combination of three broad approaches: increasing the number of new ships it purchases, delaying the retirements of currently active ships, or reactivating decommissioned ships. This report focuses on the third pathway, drawing insights from past experiences with reactivating decommissioned ships that might inform lawmakers’ decisions about reactivating retired ships in the future.
What Past Reactivations Did the Congressional Budget Office Examine for This Analysis?
CBO examined the cases in which the Navy has reactivated combat ships since 1940. Before entering World War II, the United States reactivated 50 destroyers, which it shortly thereafter transferred to the United Kingdom. A decade later, the Navy reactivated several hundred combat ships to support operations in the Korean War. During the Vietnam War, the Navy reactivated the battleship USS New Jersey, and in the 1980s, as part of the Reagan-era buildup to a 600-ship fleet, it again reactivated the USS New Jersey, along with three other Iowa class ships (the USS Iowa, the USS Missouri, and the USS Wisconsin).
In addition to those reactivations, CBO examined three other types of cases: two large-scale renovations of active warships that the Navy undertook in the past 25 years, renovations and reactivations recently completed by two U.S. allies, and reactivations of cargo ships by the Department of Transportation’s Maritime Administration (MARAD).
What Insights Can Be Drawn From Those Past Experiences?
The history of ship reactivations suggests that the costs of reactivating a ship vary widely depending on the extent of combat system modernization that is required. Although reactivation costs were lower during the Korean and Vietnam Wars, since the 1980s, reactivating a combat ship has cost at least 10 percent of the cost of replacing the ship (that is, building a new one with the same general specifications), and significantly more when the reactivation involved considerable modernization of the ship’s combat systems.
Reactivated combat ships tend to be less capable than new ships and to remain in service for significantly shorter periods. Whereas new ships typically serve for 25 to 40 years, reactivated ships generally serve for only 5 to 7 years.
Reactivating cargo ships is more straightforward than reactivating combat ships. In general, the reactivation of a cargo ship has been faster and less expensive the better maintained that ship has been. However, during the Vietnam War, the Navy determined that reactivating some cargo ships would not be cost-effective and instead scrapped them.
Any reactivation, regardless of the type of ship being reactivated, involves some degree of uncertainty about whether it can be completed on time and within budget.
How Might Reactivation Work for Oliver Hazard Perry Class Frigates?
Recently, there have been calls to reactivate Oliver Hazard Perry class frigates, the last of which was retired in September 2015. As of August 2017, the Navy had 22 inactive Oliver Hazard Perry class frigates, 10 of which were in the best-maintained state, termed foreign military sales (FMS) hold status. Navy officials estimate that reactivating Oliver Hazard Perry class frigates without making large-scale upgrades to their weapon systems would cost about $200 million per ship (or roughly 25 percent of the cost of replacing the ship) and take about nine months to complete. But they could play only limited roles. If the Navy chose to upgrade the weapon systems, those reactivations could cost considerably more and take longer to complete.