October 23, 2013
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
This testimony reprises CBO’s recently released report An Analysis of the Navy’s Fiscal Year 2014 Shipbuilding
Plan. That report was required under the 2012 National Defense Authorization Act.
The Navy is required by law to submit each year a report to the Congress that projects the service’s inventory goals, procurement plans, and cost estimates for its shipbuilding program over the next 30 years. Since 2006, CBO has been performing an independent analysis of the Navy’s latest shipbuilding plan. The CBO report on which the testimony is based examines the implications of the Navy’s 2014 plan and its ability to meet inventory goals through 2043. The report also provides independent estimates of the cost of the Navy’s shipbuilding program and compares those cost estimates to the levels of funding that the Navy is likely to receive.
According to its most recent 30-year plan, the Navy envisions buying a total of 266 ships over 30 years at an average annual cost of about $17 billion for new construction alone and roughly $19 billion for total shipbuilding (which includes 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 $2.5 billion more—an average of $19 billion per year for new construction and $21 billion per year for total shipbuilding. Those amounts are significantly higher than the amounts the Navy has received annually for shipbuilding over the last 30 years.