An Analysis of the Navy’s Fiscal Year 2024 Shipbuilding Plan

An Analysis of the Navy’s 2024 Shipbuilding Plan

Summary

The Department of Defense (DoD) submitted the Navy’s shipbuilding plan for fiscal year 2024 to the Congress on March 30, 2023.1 The Congressional Budget Office is required by law to analyze that plan and assess its costs.

Like the 2023 shipbuilding plan, the Navy’s 2024 plan comprises three alternative programs instead of one: Alternatives 1 and 2 reflect trade-offs between different types of ships requiring similar amounts of spending, according to the Navy’s estimates. Alternative 3 outlines the additional capability the Navy could achieve with more spending (see Table 1). CBO analyzed the three alternatives. Underlying all of them is an effort to eventually arrive at a fleet whose firepower is greater and distributed among more ships than in today’s fleet.

The average annual cost of carrying out the Navy’s three alternative plans, which cover fiscal years 2024 to 2053, ranges from $33.6 billion to $36.1 billion (in 2023 dollars), CBO estimates. (Those estimates include the costs of purchasing ships but not the costs of operating and maintaining them.) The Navy’s 2024 plan is similar to its 2023 plan with respect to the types and numbers of ships that it would purchase under the three alternatives.2 However, CBO found that the costs of the 2024 plan are substantially higher than those in the 2023 plan (after adjusting for inflation), largely because of higher unit costs for major shipbuilding programs, especially submarines.

The 2024 shipbuilding plan (like the 2023 plan) would move the Navy toward a larger and more distributed fleet comprising more smaller combat ships and fewer large warships than are in today’s fleet. The Navy now has 31 small surface combatants and mine countermeasures ships and 118 large surface combatants and large amphibious ships. (The service currently has no small amphibious ships.) By 2045—a year the Navy uses as an important benchmark for assessing its shipbuilding goals—Alternative 1 would establish a fleet with 38 more small surface combatants and medium landing ships (which are small amphibious ships) than the Navy’s current fleet but with 17 fewer large surface combatants and large amphibious ships (see Table 2). Under Alternative 2, there would be 34 more of those smaller ships but 22 fewer of the large ships. And under Alternative 3, there would be 51 more small surface combatants and medium landing ships and 11 fewer large surface combatants and large amphibious ships. If fully implemented, any of the alternatives would eventually result in a fleet that was larger than at any time since 2001.

Neither the 2023 plan nor the current plan includes inventory goals for the major components of the Navy’s fleet. On June 20, 2023, the service sent its Battle Force Ship Assessment and Requirement (BFSAR) report to the Congress. According to the Navy, the report aligns its shipbuilding goals with DoD’s most recent national security strategy; but the report’s details are classified. Media reports indicate that the Navy has set a goal of 381 battle force ships, including 31 large and midsize amphibious ships.3 In the 2024 plan (as in the 2023 plan), the Navy refers to several studies and analytic research on the future battle force that informed its choices in formulating the plan’s three alternatives. In this report, CBO analyzes and compares those three alternatives—not only as they relate to one another but also to significant aspects of the 2023 shipbuilding plan and to the Navy’s broad goals of building a larger and more distributed fleet. CBO also compares the alternatives with respect to several measures of naval capability introduced in the 2023 plan and repeated in the current one.

The Three Alternatives in the 2024 Plan Would Expand the Fleet to Between 319 and 367 Battle Force Ships

On October 1, 2023, the Navy’s fleet numbered 290 battle force ships—aircraft carriers, submarines, surface combatants, amphibious ships, combat logistics ships, and some support ships. (See the appendix for a description of the major types of ships in the Navy’s fleet.) The 2024 plan reflects the Navy’s desire to build a larger and more distributed fleet. To achieve that goal, the Navy would buy 290 to 340 ships over the 2024–2053 period: 237 to 267 combat ships and 53 to 73 combat logistics and support ships (see Table 3). If the Navy adhered to the schedule for retiring ships outlined in the 2024 plan (that schedule is nearly the same for all three alternatives), it would have a fleet of over 300 ships by the early 2030s (see Figure 1). By 2053, the fleet would number 319 ships under Alternative 1, 328 under Alternative 2, and 367 under Alternative 3. However, the fleet would become smaller in the near term under all three alternatives. Over the next four years, the Navy would retire 9 more ships than it would commission, causing the fleet to reach a low of 285 ships in 2026 and 2027 before growing again. But even at that nadir, the fleet would number 5 more ships than it would at its lowest point under the 2023 plan.

Although the 2024 plan does not include many details about the size or composition of the unmanned vessels the Navy envisions procuring, the service provided CBO with a notional plan for those purchases. Under Alternative 1, the Navy would purchase large unmanned surface vessels (LUSVs, which would probably be missile platforms operating in conjunction with large manned surface ships) at a rate of 2 per year; under Alternatives 2 and 3, it would purchase them at a rate of 3 per year. Although the Navy would probably purchase other types of systems, such as medium unmanned surface vessels or large undersea unmanned systems, the 2024 plan does not include them. (It also does not include small expendable drones like the ones that have been used in the war in Ukraine.)

The Costs of New-Ship Construction Under the 2024 Plan Would Average $30.3 Billion to $32.6 Billion per Year

CBO estimates that buying only the new ships specified in the Navy’s 2024 plan would cost $910 billion under Alternative 1, $906 billion under Alternative 2, and $979 billion under Alternative 3 (or, over 30 years, an average of $30.3 billion, $30.2 billion, and $32.6 billion per year, respectively—all in 2023 dollars). Those amounts are between 5 percent and 10 percent higher than CBO’s estimates for the 2023 plan, after adjusting for inflation. The Navy’s cost estimates are lower than CBO’s: $776 billion for Alternative 1, $792 billion for Alternative 2, and $842 billion for Alternative 3 (or, over 30 years, an average of $25.9 billion, $26.4 billion, and $28.1 billion per year, respectively). Those amounts are between 7 percent and 10 percent higher than the Navy’s estimates for the 2023 plan, after adjusting for inflation.

The Navy’s shipbuilding plan reports only the costs of new-ship construction for battle force ships. It does not report the cost of nuclear refueling or other costs, such as those associated with outfitting new ships or purchasing ships that are not considered part of the battle force (for example, used sealift ships), which are nonetheless typically funded from the Navy’s shipbuilding account. If those costs were included, the Navy’s average annual shipbuilding costs in the 2024 plan would increase by a little more than $3 billion, CBO estimates. That increase would apply to both the Navy’s estimate and CBO’s estimate of the cost of new-ship construction.

In general, CBO’s estimates of new-ship construction costs are higher than the Navy’s because CBO and the Navy made different assumptions about the design and capabilities of some future ships, used different estimating methods, and treated growth in the costs of labor and materials for shipbuilding differently.4 Some of the difference in the estimates stems from uncertainty about the design and capabilities of large ships whose construction would begin in 5 or 10 years—in particular, the next-generation destroyer that would start to replace the Navy’s Arleigh Burke class destroyers and the next-generation attack submarine to follow the service’s Virginia class submarines. The difference between the estimates also increases over time, in part because the Navy’s method of developing constant-dollar estimates (that is, estimates that reflect real costs, which are adjusted to remove the effects of inflation) for most of its shipbuilding programs uses a fixed average real cost per ship; it does not account for the historically faster growth in the costs of labor and materials in the shipbuilding industry than in the economy as a whole. As a result, the Navy’s estimates for the future purchases of ships with the capabilities of today’s ships do not reflect the same increase in real costs that CBO’s estimates reflect.

The growth reflected in the Navy’s and CBO’s estimates for the 2024 plan is mainly attributable to an increase in the estimated costs of many shipbuilding programs—especially submarine programs—and not to an increase in the number of ships. Those estimated costs have risen for several reasons, but largely because:

• Some ships have taken longer and been more difficult to build than the Navy anticipated,
• Some ships’ designs have proved more complicated than expected, and
• The estimated costs of some ships were unrealistically low in earlier shipbuilding plans.

In some cases, CBO’s estimates increased more than the Navy’s. That is because not all of the Navy’s estimates reflect changing conditions in the shipbuilding industrial base that have caused costs to rise, particularly the cost of building submarines.

Average Total Shipbuilding Costs Over the Next 30 Years Would Be 31 Percent to 40 Percent More Than Average Appropriations Over the Past 5 Years

Even if the Navy received the same amount of annual funding (in constant dollars) for shipbuilding from 2024 to 2053 that it has received, on average, over the past five years—a half-decade that saw the highest level of such funding since the 1980s—the service still could not afford any of the three alternatives in its 2024 shipbuilding plan. CBO’s estimates of the average annual costs of new-ship construction are considerably more than the recent historical average of appropriations for new-ship construction ($22.8 billion in 2023 dollars)—higher by 31 percent for Alternatives 1 and 2 and by 40 percent for Alternative 3. CBO estimates that if funding for all activities supported by the Navy’s shipbuilding account was included in the calculation, the average annual cost of the three alternatives would be $33.8 billion, $33.6 billion, and $36.1 billion, respectively. Those amounts are 33 percent higher for Alternatives 1 and 2, and 43 percent higher for Alternative 3, than the $25.7 billion the Navy has received in annual appropriations, on average, over the past five years.

The cost of the Navy’s 2024 shipbuilding plan is not only high compared with recent funding but also high by historical standards. The recent period used for comparison is one that saw the highest level of funding for ship construction since the Reagan Administration’s defense buildup in the 1980s. Since 2014, lawmakers have appropriated, on average, $2.5 billion more per year for shipbuilding than the President has requested, partly because of concerns that the fleet is too small to perform all of its missions (see Figure 2). And the most recent three years of appropriations—2021, 2022, and 2023—saw three of the four largest increases by the Congress in the past decade. As a point of comparison, shipbuilding appropriations averaged $29.8 billion (in 2023 dollars) during the Cold War years of 1955 to 1989, a period of intense competition between the United States and the Soviet Union in which the Navy faced challenges that look increasingly similar to those it expects to face over the next two decades.5 The three alternatives in the Navy’s plan would cost between 13 percent and 21 percent more than that.

Under Each of the 2024 Plan’s Alternatives, the Navy Would Need a Larger Total Budget to Operate and Maintain a Larger Fleet

The Department of the Navy’s total budget in 2023 is about $245 billion. As the fleet increased in size, various costs in addition to those for shipbuilding—from operations and support to weapons procurement—would also increase. Fully purchasing, operating, and maintaining any of the larger fleets envisioned in the 2024 plan would require a total annual budget ranging from about $315 billion to $330 billion (an increase of roughly 30 percent to 35 percent) by 2053, CBO estimates. Like shipbuilding costs, operation and support costs have historically increased faster than the economywide rate of inflation. Thus, the estimated increase in the Navy’s total annual budget is driven both by the costs of acquiring, operating, and maintaining more ships and by annual rates of cost growth that are higher than such rates in the economy as a whole.

The Navy’s Uncertain Goals for Shipbuilding

The Navy’s specific long-term objectives for its fleet are unclear. Similar to the 2023 plan but unlike those before that, the 2024 shipbuilding plan does not include a specific set of inventory goals, organized by ship type, that would allow for a comparison with the procurement, delivery, and retirement schedules set forth in its three alternatives. Rather, the 2024 plan states the Navy’s intention to develop a new set of force goals, aligned with the 2022 National Defense Strategy, by the summer of 2023.6 On June 20, 2023, the Navy submitted that analysis—called the Battle Force Ship Assessment and Requirement (BFSAR) report—to the Congress, but most details were classified. In that report, the Navy set a goal for a fleet of 381 battle force ships. According to the Navy, that effort will shape the 2025 shipbuilding plan, which would normally be submitted in February 2024 with the President’s 2025 budget request.

The 2024 plan does not cite or discuss the Navy’s or DoD’s analyses conducted over the past six years that examined the composition of the future fleet. Rather, the plan states that “multiple threat-informed analyses conducted by the Department of Defense (DoD) as well as external entities underscore the need for a larger, more capable Navy.”7

In the 2023 plan, however, those analyses are discussed in some detail (see Table 4). Most of them point to an eventual increase in the number of attack submarines, small surface combatants, small amphibious ships, combat logistics ships, and unmanned surface and undersea vessels, compared with their numbers in today’s fleet. The number and types of amphibious warfare ships would also change, but the precise changes are unclear because most of the analyses do not distinguish between midsize amphibious ships, such as LPD-17 amphibious transport docks, and small amphibious ships, such as medium landing ships (which until recently were known as light amphibious warships). The analyses suggest that the Navy would purchase a significant number of those small ships to achieve objectives in the Marine Corps’s Force Design 2030, including distributing small units of Marines, armed with missile batteries, over a theater of operations.8

In addition, in July 2022, the Chief of Naval Operations (CNO) released Navigation Plan 2022.9 That document outlines shipbuilding goals that are different from the ranges expressed in the shipbuilding plan for fiscal year 2022, which, until the CNO’s report was released, was the most recent statement of the Navy’s goals for the composition and size of its fleet. The goals in Navigation Plan 2022 were not tied to the 2023 shipbuilding plan released two months earlier but were informed by an early, classified version of the BFSAR sent to the Congress at the end of July 2022. (The CNO’s goals are, however, similar to those in the Navy’s 2020 Integrated Force Structure Assessment.)10 Last year, the Navy indicated that the BFSAR that was then underway would update the force goals discussed in the CNO’s report.

The ranges in the 2022 shipbuilding plan and the goals in Navigation Plan 2022 target the year 2045 as a benchmark for making changes to the fleet. CBO compared the goals in the 2022 shipbuilding plan and those in Navigation Plan 2022 with the three alternatives in the 2024 plan for the year 2045 (see Table 5). As in the 2023 shipbuilding plan, Alternatives 1 and 2 in the 2024 plan would achieve a fleet similar to the low end of the range in the 2022 shipbuilding plan. Alternative 3 would achieve a fleet similar to the high end of that range and similar to the goals in Navigation Plan 2022.

Ship Inventories and Purchases

The Navy’s broad goal is to build a larger fleet whose firepower is greater and distributed among more platforms than in today’s fleet. The ship purchases and inventories described in the 2024 plan’s three alternatives would all attempt to move the future fleet in that direction but in different ways. However, over the next five years, the size of the fleet and its firepower would decrease.

The Navy designed Alternatives 1 and 2 to cost about the same in terms of new-ship construction, whereas under Alternative 3, the Navy would spend an additional $50 billion to $66 billion (in 2023 dollars) to build new ships over the 30-year period. Generally, Alternative 1 places more emphasis on large surface combatants and small amphibious ships, and on buying more of the next generation of destroyers and attack submarines, than Alternative 2 does. By contrast, Alternative 2 emphasizes undersea warfare the most; the Navy would buy more submarines than it would under either Alternative 1 or 3. It would, however, buy about half the number of next-generation attack submarines (known as SSN(X)s) that would be purchased under the other alternatives and would instead buy many more Virginia class attack submarines. With more funding, the Navy would buy more of all types of ships under Alternative 3 than under Alternatives 1 or 2—except for submarines. Although the 2024 plan provides few details about the future of unmanned vessels, it reports that “the Navy could achieve 89–149 unmanned platforms by 2045” and that large numbers of LUSVs are the preferred alternative for increasing the fleet’s offensive missile capability.11

This report assesses the costs of implementing each of the three alternatives in the Navy’s 2024 plan, the alternatives’ effects on its force structure, and the capabilities that the alternatives would bring to the fleet. CBO did not evaluate the validity of the Navy’s analysis of its future force structure or the fleet’s ability to fulfill its missions in the national military strategy.

Combat Ships

Combat ships include aircraft carriers, submarines, large and small surface combatants, and amphibious warfare ships. Over the next 30 years, the Navy would buy 237 combat ships under Alternative 1, 243 under Alternative 2, and 267 under Alternative 3. Those purchases would leave the Navy with fewer carriers, large surface combatants, and large amphibious warfare ships than it currently has, but the number of attack submarines (including guided missile and large payload submarines) and small surface combatants would increase. The number of amphibious warfare ships would also increase, although the composition of the amphibious warfare force would differ significantly from that of today’s force (see Figure 3).

Aircraft Carriers. Currently, the Navy’s carrier force consists of 10 Nimitz class carriers and 1 Gerald R. Ford class ship. Over the next 30 years, the Navy would purchase 6 Ford class aircraft carriers (1 every five years, starting in 2028) under Alternatives 1 and 2 and would purchase 7 of them (1 every four years) under Alternative 3 (see Figure 4, first panel). All three alternatives would allow the Navy to maintain the size of its existing force of 11 aircraft carriers through 2039, as new Ford class carriers replaced Nimitz class ships.12 After that, under Alternatives 1 and 2, the force would fall to 10 carriers and then, for most years between 2046 and 2053, to 9 carriers. Under Alternative 3, the force would remain at 10 or 11 carriers for nearly every year through 2053.

Ballistic Missile Submarines. The plan for the Columbia class ballistic missile submarines (SSBNs), which are slated to replace the Navy’s 14 Ohio class submarines as they retire, is the same under all three alternatives. The Navy ordered the first of the Columbia class ships in 2021; the 2024 plan calls for purchasing another one in 2024 and then 10 more, at a rate of 1 per year, between 2026 and 2035. Unlike the goals for other categories of ships, force goals for SSBNs are not determined by the Navy’s force structure assessments but rather by requirements that stem from the number of submarines needed on station by DoD’s Strategic Command and, secondarily, by the operational availability of those ships. Therefore, the Navy’s requirement to replace its 14 Ohio class SSBNs with 12 Columbia class ships has been set for many years and remains unchanged.

The Navy estimates that the lead Columbia class submarine (a lead ship is the first ship of its class) will take at least seven years to build, so the first one would be commissioned into the fleet in 2028. Another two or three years of testing, training, and preparing the ship for deployment would elapse, however, before it went on its first deterrent patrol. Subsequent submarines in the class would each take about seven years to build and test. Over the past two years, the Navy has determined that it could extend the service life of 5 Ohio class submarines by two to three years each so that the SSBN force would remain at 12 ships or more for all but three years between 2024 and 2053.

Attack and Large Payload Submarines. The Navy currently has 48 nuclear-powered attack submarines (SSNs): 24 Los Angeles class, 3 Seawolf class, and 21 Virginia class ships.13 The fleet also includes 4 guided missile submarines (SSGNs), which are converted Ohio class ballistic missile submarines that can carry large numbers of conventional missiles and special operations forces. According to the 2024 shipbuilding plan, after an initial decline to 46 SSNs in 2030, the SSN force would become larger and more capable than it is today. Under Alternative 1, the Navy would buy 54 SSNs and would have 60 in the fleet by 2053 (see Figure 3, second panel). Under Alternative 2, the Navy would buy the most SSNs, purchasing 66 of them over the next 30 years. In that case, the force would reach 60 SSNs by 2045 and 69 by 2053. Under Alternative 3, the Navy would purchase 58 SSNs; its inventory would reach 60 ships by 2048 and 63 ships by 2053.

The composition of the SSN force, however, would be different depending on which alternative was implemented. Under Alternatives 1 and 3, the Navy would invest more heavily in next-generation SSN(X) submarines, buying nearly twice as many of them as it would under Alternative 2. By contrast, under Alternative 2, the Navy would buy more submarines overall but would continue production of the Virginia class submarines without the Virginia payload module (VPM) through 2053.14 It would also begin production of the SSN(X) in 2035 (one year later than under the 2023 plan), as it would under the other two alternatives.

According to the 2024 plan, the Navy would also build a new large payload submarine starting in the 2030s or 2040s, depending on which alternative was implemented. That new ship would be a large-capacity submarine, perhaps built on a Columbia class hull in much the same way that the Navy’s existing SSGNs are converted from Ohio class SSBNs. The new ships would be bought in small numbers, with 1 ship being built every three or four years under each alternative. The Navy would purchase 4 large payload submarines through 2053 under Alternatives 1 and 3 and would purchase 6 of them under Alternative 2.

The 2024 plan’s implications for the submarine industrial base are considerable. The Navy currently takes six to nine years to build a new submarine. That means that for a few years in the 2030s, five types of submarines (including both SSBNs and large payload submarines) would be in production under Alternatives 2 and 3; four types of ships would be in production throughout mush of that decade under Alternative 1. Alternative 2 would see three types of ships in production in the 2040s and beyond, whereas under Alternatives 1 and 3, just two types of ships would be in production by about 2045. With three types of submarines currently in production (Columbia class, Virginia class, and Virginia class with VPMs), the Navy is experiencing cost overruns, construction delays, and missed delivery dates. Adding more classes of ships to the pipeline could tax the ability of the shipyards and the Navy to manage production even more.15 In addition, under the 2024 plan, the quantity of submarine construction (as measured in thousands of tons of Condition A-1 weight, which is analogous to the measure of lightship displacement for surface ships) would increase by more than 50 percent over the next decade.

Large Surface Combatants. The Navy currently has 87 cruisers and destroyers in its fleet. However, all 13 of its remaining CG-47 Ticonderoga class cruisers are to be retired over the next five years (4 were retired earlier this year). All three alternatives in the 2024 shipbuilding plan would reduce the number of large surface combatants, consistent with most of the Navy’s recent analyses. By 2033, the large surface combatant force would fall to 76 ships under all three alternatives (see Figure 3, third panel). By 2053, the force would range from a low of 73 ships under Alternative 2 to a high of 85 ships under Alternative 3. That would mean fewer ships under all three alternatives than in the current force but more than envisioned in the 2023 plan.

Under Alternative 1, the Navy would buy 56 destroyers over the next 30 years at a rate of slightly less than 2 ships per year; under Alternative 2, it would buy 50 ships at a rate of 1 or 2 per year (see Figure 4, third panel). The Navy would buy the most large surface combatants—64 ships—under Alternative 3, purchasing slightly more than 2 ships per year over the 30-year period. Under all three alternatives, it would continue to buy DDG-51 Flight III Arleigh Burke class destroyers in about equal numbers. And—also in all three cases—purchases of the next-generation DDG(X) destroyer would begin in 2032, making the start date of its construction two years later than under the 2023 plan.16 The number of DDG(X)s purchased under the three alternatives would vary; the Navy would buy the fewest, 30, under Alternative 2 and the most, 46, under the larger budgets of Alternative 3.

Small Surface Combatants. The Navy now has 23 littoral combat ships (LCSs), categorized as small surface combatants, in its fleet and also operates 8 mine countermeasures ships, which it sometimes includes in that category. (CBO does not include mine countermeasures ships in its tally of small surface combatants.) Another 5 LCSs and 4 FFG-62 Constellation class frigates are being built. Under all three alternatives in the 2024 plan, the number of LCSs would fall as 7 ships were retired over the next three years in addition to the 4 retired in 2023; all of the ships to be retired would be less than 10 years old.17 The Navy would keep just 21 of the 35 LCSs it will have built until the end of their planned 25-year service life.

According to the 2024 plan, the number of small surface combatants would roughly double, by 2053, to a force of 44 under Alternative 1, 47 under Alternative 2, and 49 under Alternative 3 (see Figure 3, fourth panel). That would put the size of the force near the middle of the ranges in the Navy’s recent analyses of its future fleet—a larger force, for example, than envisioned in the 2022 shipbuilding plan but a smaller one than in the 2020 Future Naval Forces Study, as reported in the December 2020 plan.18

The composition of the small surface combatant force would vary among the three alternatives. Under Alternative 1, the Navy would purchase 16 FFG-62s through 2035 (in addition to the 4 frigates already under construction) before switching to an upgraded design of that ship, designated as the FFG-62 Flight II (see Figure 4, fourth panel). Under Alternative 2, the Navy would buy only 10 FFG-62s through 2030. It would start buying the upgraded version in 2029, acquiring 46 of the Flight IIs in total. The service would buy 16 FFG-62s under Alternative 3 before switching to the Flight II ship. In all three cases, ships would be purchased at a rate of 1 or 2 per year through the mid-2030s, then largely at a rate of 2 per year thereafter.

Amphibious Warfare Ships. The Navy’s current amphibious warfare force comprises 31 ships: 9 large amphibious assault ships, designated as LHAs or LHDs; 12 midsize amphibious transport docks, or LPDs; and 10 midsize dock landing ships, or LSDs. Under the three alternatives in the 2024 plan, the number of those ships would be reduced and, as first proposed in the Navy’s December 2020 plan, a major building program for small amphibious ships (called medium landing ships—LSMs—which were previously referred to as light amphibious warships) would begin. The number of large and midsize amphibious ships would fall to 29 by 2033 (which is 5 more than under the 2023 plan) and then to between 23 and 25 ships by 2043. By 2053, those ships would number 19, 20, and 23 under Alternatives 1, 2, and 3, respectively. By contrast, the LSM program would slowly grow to 10 ships by 2033 under Alternatives 1 and 3 and to 8 ships under Alternative 2. By 2053, the Navy would have the most LSMs, 35, under Alternative 3 and the fewest, 22, under Alternative 2.19

Under Alternative 1, the Navy would buy a total of 11 large and midsize amphibious warfare ships; it would buy 12 under Alternative 2 and 14 under Alternative 3—about the same numbers as under the 2023 plan but fewer than envisioned in earlier plans (see Figure 4, fifth panel). Under all three alternatives, the Navy would buy 1 or 2 LSMs per year, starting in 2025. But because the LSMs would have only a 20-year service life, the Navy would need to start buying replacements for the first class of ships in the 2040s. Overall, the Navy would buy 42, 36, and 51 LSMs under Alternatives 1, 2, and 3, respectively.

Combat Logistics and Support Ships

The Navy’s combat logistics and support ships include large ships, such as T-AO oilers and T-AKE dry cargo ships, which resupply vessels at sea, and smaller ships, such as tug and salvage ships, surveillance craft, and expeditionary fast transports. Under the alternatives in the 2024 plan, the Navy would increase the number of large oilers and begin buying a smaller logistics ship, called the next-generation logistics ship and currently designated as a T-AOL (which in the past was called a light oiler), to help resupply a larger fleet with more smaller warships. Overall, the Navy would buy 53 combat logistics and support ships under Alternative 1, 56 under Alternative 2, and 73 under Alternative 3 (see Figure 4, sixth panel).

Most of the differences in the three alternatives’ plans for combat logistics and support ships are attributable to two types of ships: the T-AOL and the expeditionary fast transport. The Navy would buy 20 T-AOLs under Alternative 1 and 26 of them under Alternative 2. Despite building a larger overall combat fleet under Alternative 3, the Navy would buy only 24 T-AOLs in that case. As with the LSMs, some of those ships would be replacements because the T-AOLs have an expected service life of 20 years. The Navy would maintain a force of 11 T-AOLs under Alternative 1, 16 under Alternative 2, and 15 under Alternative 3. The service would also purchase 14 replacements for its expeditionary fast transports under Alternative 3; it would buy 2 such replacements in 2053 under Alternative 1 but would buy no replacements under Alternative 2.

Unmanned Surface and Undersea Vessels

In last year’s shipbuilding plan, the Navy discussed the potential of unmanned systems to contribute to its overall capabilities. Specifically, it mentioned the value of medium unmanned surface vessels (MUSVs) as sensor platforms, large unmanned surface vessels as “adjunct missile magazines teamed with larger manned multi-mission platforms,” and extra-large unmanned undersea vessels as having “the capability to deliver multiple payloads at extended ranges.”20 The plan also noted, however, that because those programs are still being developed and their technological success is not completely assured, the future quantities of ships and costs associated with them had not yet been determined.

The Navy still has not announced how many MUSVs it would purchase (other than the first prototype), and it is not clear whether the Navy would purchase those vessels using its shipbuilding account or some other account. Thus far, the Navy has purchased unmanned undersea vessels through its other procurement account instead of its shipbuilding account. The unmanned surface and undersea vessels mentioned in the Navy’s shipbuilding report are much larger than the single-use, expendable drones used in the war in Ukraine and would be a permanent part of the service’s fleet.21

The 2024 plan does not repeat that specific language about unmanned systems. Rather, it discusses various technologies that the Navy is actively investing in to ultimately build a “hybrid fleet.” Such a force would combine large numbers of manned and unmanned ships to “build a more lethal and distributed naval force.”22 Information provided to CBO by the Navy included the assumption that the service would buy 2 LUSVs per year under Alternative 1, and 3 per year under Alternatives 2 and 3. Because those vessels have a 20-year service life, those purchases would result in a force of 40 LUSVs under Alternative 1 and 60 under the other two alternatives. The 2024 report included no information on the number of MUSVs or large undersea unmanned vessels the service would purchase. However, the 2024 plan states that the service could have between 90 and 150 unmanned platforms by 2045, which suggests that the number of MUSVs and undersea platforms combined could amount to between 50 and 90 vessels, once the LUSVs were accounted for.

Shipbuilding Costs

According to the Navy’s estimates, its planned purchases of new ships from 2024 to 2053 would cost (that is, require appropriations of), on average, $25.9 billion per year under Alternative 1, $26.4 billion under Alternative 2, and $28.1 billion under Alternative 3—all in 2023 dollars (see Figure 5). Those amounts represent an increase of 9 percent, 10 percent, and 7 percent, respectively, compared with the alternatives in the 2023 plan, after adjusting for inflation. The increase in the Navy’s costs is largely attributable to higher estimates for its shipbuilding programs, especially for attack submarines.

CBO estimated the costs of the three alternatives in the 2024 plan using its own models and assumptions.23 On average, CBO’s estimates of annual costs for new-ship construction over the 30-year period are higher than the Navy’s estimates by $4.4 billion (or 17 percent) for Alternative 1, $3.8 billion (or 14 percent) for Alternative 2, and $4.5 billion (or 16 percent) for Alternative 3. Other activities the Navy would need to fund from its budget account for ship construction add roughly $3.5 billion per year to projected costs. Thus, combining the service’s estimates for new-ship construction costs and CBO’s estimates for other costs leads to a total average annual cost for all activities typically funded from the Navy’s shipbuilding account that ranges from $29.1 billion to $31.4 billion, or 6 percent to 9 percent more than under the 2023 plan. CBO’s estimates are 14 percent to 16 percent more per year, on average, than the Navy’s.

Both CBO’s and the Navy’s estimates increased largely because of higher estimates for shipbuilding programs, especially submarine programs. Approximately 80 percent of the increase in CBO’s estimates for Alternatives 1 and 2 is attributable to higher unit prices; the rest is attributable to changes in quantities of various types of ships. For Alternative 3, nearly all of the increase in estimated costs is attributable to higher unit prices. And submarine programs account for about 80 percent of the increase that is due to higher unit prices across the alternatives.

The Navy’s Estimates

The Navy’s 2024 plan delineates future shipbuilding procurements, retirements, and inventories under all three alternatives. The plan also emphasizes (as have recent shipbuilding plans) the importance of providing steady work to the shipbuilding industry as a way to prevent boom-and-bust cycles, which could jeopardize the financial health of some shipyards and secondary suppliers and create uncertainty about the cost of shipbuilding in the future. The Navy also notes that the quantities and delivery times of new ships in its plan are predicated on the assumption that the production delays plaguing several shipyards today will be resolved, leading to the steady and on-time delivery of new ships in the future.24

New-Ship Construction Costs. According to estimates in the Navy’s 2024 plan, submarine construction would consume the lion’s share of shipbuilding funds over the next 30 years—about half of the amount needed for new-ship construction under each alternative. The estimates reflect the fact that, other than aircraft carriers, submarines are the most expensive ships the Navy buys, and it plans to buy many of them regardless of which alternative it follows. The focus on submarines also reflects the importance of undersea warfare in the service’s evolving naval strategy and vision for its future fleet.

The Navy has increased its cost estimates for several major shipbuilding programs, including the program for Virginia class attack submarines. The estimated cost of the 2 Virginia class submarines the Navy proposes to buy in 2025 is 15 percent more than the Navy’s estimated costs for 2 submarines purchased in 2019. Higher costs in the Virginia class program caused the Navy’s estimate for the SSN(X) to increase substantially and may similarly affect estimates for Columbia class ballistic missile submarines. (The Navy will update its cost estimate for the Columbia class program later this year.) Nor are ships under construction immune from this phenomenon. Over the next five years, every major ongoing shipbuilding program will require additional money to complete ships that were authorized in prior years’ budgets (see Table 6).

According to the Navy, submarines would account for 54 percent of the cost of new-ship construction under Alternative 1, 56 percent under Alternative 2, and 52 percent under Alternative 3. The Navy would spend the least amount on submarines under Alternative 1, about $13.8 billion per year, and would buy the fewest of them. The greater number of submarines purchased under Alternative 2 would cost an average of $14.7 billion per year. Although the Navy would purchase 8 fewer submarines under Alternative 3 than under Alternative 2, it would spend almost the same amount per year on them, $14.5 billion, because it would buy fewer Virginia class SSNs and would invest more heavily in the (more expensive) next-generation SSN(X)s.

That spending pattern is reversed in the case of surface combatants. Under Alternative 1, the Navy would spend proportionally more (24 percent of construction costs) on surface combatants than it would under Alternative 2 (22 percent of construction costs)—a difference amounting to $300 million per year, on average. Under Alternative 3, it would spend 24 percent of construction costs on surface combatants—about $700 million more per year than would be spent under Alternative 1 and $1.0 billion more per year than under Alternative 2.

In general, according to the Navy’s estimates, spending on the remaining categories of ships is proportionally about the same under all three alternatives. Amphibious ships represent 6 percent of new-ship construction costs, and combat logistics and support ships represent 4 percent to 5 percent of such costs.

The balance of the greater overall cost of Alternative 3—$66 billion more, over 30 years, than Alternative 1 and $50 billion more than Alternative 2—would be spent on smaller and less expensive ships, the Navy estimates. The average overall cost of a ship under the Navy’s alternatives ranges from $2.5 billion to $2.7 billion. The average cost of the additional ships that would be purchased under Alternative 3 ranges from $1.2 billion to $1.3 billion, according to the Navy’s estimates.

Total Shipbuilding Costs. As in all previous shipbuilding plans, estimates in the Navy’s 2024 plan exclude certain costs that would need to paid from its budget account for shipbuilding. Specifically, they exclude the costs of refueling nuclear-powered aircraft carriers, purchasing ships that are not part of the battle force (such as oceanographic survey ships or sealift ships), outfitting and postdelivery activities (including the purchase of many small tools and equipment needed to operate a ship but that are not necessarily provided by the shipyard when the ship is built), and other smaller items. In addition, the Navy’s estimates do not include the $3.2 billion needed (because of cost overruns or other increased expenses) to complete ships authorized before 2024, nor do they include the $1.0 billion in investments in the submarine industrial base. Including all those costs, as estimated by CBO, would add $3.2 billion to $3.3 billion each year to the Navy’s estimates. Using both sets of estimates, the total annual costs for all activities funded through the Navy’s shipbuilding account would average $29.1 billion under Alternative 1, $29.6 billion under Alternative 2, and $31.4 billion under Alternative 3.

CBO’s Estimates

According to CBO’s estimates, the full cost of the 2024 shipbuilding plan (including new-ship construction, refueling of aircraft carriers, and other items) over the 2024–2053 period would average $33.8 billion per year under Alternative 1, $33.6 billion under Alternative 2, and $36.1 billion under Alternative 3. Those amounts range from 31 percent to 40 percent more than the average annual funding the Navy has received over the past five years (see Figure 6). They are also about 5 percent to 10 percent greater than CBO’s estimates of the 2023 plan, after adjusting for inflation. CBO’s estimates (like the Navy’s) reflect the expectation that the production delays plaguing several shipyards today would be resolved over the next decade, leading to the steady and on-time delivery of new ships. If that did not happen, costs for new ships could be higher than the Navy and CBO estimate, and the delivery of new ships would take longer than anticipated in the 2024 plan.

The gap between CBO’s and the Navy’s estimates widens over time. For the 2024–2033 period, CBO’s estimates of total shipbuilding costs are 9 percent to 10 percent higher than the Navy’s, but they are 19 percent to 20 percent higher over the 2044–2053 period (see Table 7). The two sets of estimates are closer in the near term because most of the ships the Navy plans to buy are already under construction and their costs are reasonably well known. But CBO and the Navy made different assumptions about the size and capabilities of future ships, which led to differing cost estimates for the midterm and far term. In particular, two large programs—the new attack submarine and the next-generation destroyer—account for about half of the difference between the Navy’s and CBO’s cost estimates under Alternatives 1 and 3 and for more than one-third of that difference under Alternative 2.

A significant portion of the difference in estimates for those two programs is attributable to CBO’s treatment of cost growth that is greater than inflation in the economy as a whole. When estimating the cost to build a ship in the future that is identical to one already built, the Navy reports the future cost of capabilities purchased as being the same as the cost today. By contrast, CBO projects the cost to build the same ship in the future by accounting for the rising costs of labor and materials used in building naval ships (that is, shipbuilding inflation) compared with the rising costs of other goods and services in the economy. CBO regards that difference between shipbuilding inflation and overall inflation as growth in the constant-dollar cost of building naval ships.

For this report, CBO used the historical difference between shipbuilding inflation and inflation in gross domestic product (GDP) prices, as measured by the GDP price index, to calculate the growth in its constant-dollar estimates of shipbuilding programs. Between 1993 and 2022, shipbuilding inflation outpaced inflation in the economy by an average of about 1.1 percent per year. CBO’s projections of shipbuilding costs reflect the assumption that the same rate of difference would continue between 2024 and 2053. As a result, the agency estimated that a ship that costs $2.5 billion to build in 2023 would cost $3.2 billion (in 2023 dollars) in 2045. (However, shipbuilding costs cannot continue to grow faster than the costs of goods and services in the economy as a whole indefinitely. If that occurred, the price of ships would eventually outstrip the Navy’s ability to pay for even a small number of them unless its shipbuilding budget grew commensurately with shipbuilding costs.)

Growth in the Navy’s Total Annual Budget

The larger fleets envisioned under all three alternatives in the 2024 plan would increase costs in other parts of the Navy’s budget as the fleets grew. Fully purchasing, operating, and maintaining those larger fleets would, in CBO’s estimation, increase the Navy’s total annual budget by about 30 percent, from $245 billion today to between $315 billion and $330 billion (in 2023 dollars) in 2053. Shipbuilding costs would account for about 12 percent of that amount for 2053. (Operating and crewing the larger fleets under the Navy’s alternatives would represent the largest components of the Navy’s budget—representing about 46 percent of the total.) Costs would decrease slightly in the 2020s as the number of ships in the fleet declined and as the Navy retired ships that were more expensive to operate than the new ones it would commission. But in the 2030s and beyond, costs would increase (see Figure 7).

To estimate growth in the Navy’s total budget, CBO independently developed estimates for each of the service’s budget accounts. Specifically, to estimate costs associated with the shipbuilding and aircraft procurement accounts, CBO first estimated the cost of each ship and aircraft procurement program.25 Estimates for other items or activities purchased through those accounts, as well as the remaining procurement accounts, were developed on the basis of historical relationships between the accounts and the shipbuilding and aircraft procurement accounts.

CBO estimated costs for operation and maintenance accounts on the basis of historical relationships between those costs and the size of the Navy’s fleet, as measured by its total full-load displacement for surface ships and submerged displacement for submarines. Estimates for the Navy’s military personnel accounts were based on the historical relationship between the total number of sailors serving on ships and the total number of service members. Estimates for Marine Corps military personnel were based on historical averages adjusted for the size of the Corps, which is set by law. Estimates for the remaining accounts, such as the one for military construction, were based on historical averages.

CBO adjusted its estimates to vary with changes in the Navy’s fleet over time (specifically, changes in ship and aircraft procurements, ship displacements, and crew sizes). In addition, costs paid from most of the Navy’s accounts have seen inflation greater than that in the economy as a whole; those differences are included as real growth (that is, growth adjusted to remove the effects of inflation) in the estimates.

Measures of Capability

In the absence of a force structure assessment, the Navy compared its three alternatives using several measures of capability. By emphasizing different types of ships in Alternatives 1 and 2, and by allocating additional resources in Alternative 3, the Navy sought to illustrate several trade-offs in the lethality of its fleet. Specifically, it counted the number of:

• Vertical launch missile cells on surface ships,
• Vertical launch missile cells on submarines,
• Torpedoes on attack submarines, and
• Tactical aircraft sorties launched from the carrier force per day.

Although those four metrics measure the lethality of the fleet, none of them address the distribution of its firepower—an important element of the Navy’s Distributed Maritime Operations concept. Thus, to compare the three alternatives, CBO counted the number of ships capable of firing antiship or land-attack missiles. The agency also calculated the total missile capability of the Navy’s fleet, combining the vertical launch capability of surface ships and that of submarines.

Under all three alternatives in the 2024 plan, the lethality of the fleet, as measured in part by the total number of missile cells, would decline by 12 percent until 2032 (see Figure 8).26 That is because the Navy would retire more cruisers, destroyers, and submarines than it would commission over the next 10 years. For example, undersea missile capacity would decline, as the Navy’s 4 guided missiles submarines, or SSGNs, which each carry up to 154 land-attack missiles, were retired in the mid-2020s. That capability is set to be replaced by Virginia class attack submarines modified to carry up to 40 missiles each. However, the first of those submarines would not enter the fleet until November 2028. After 2032, the missile capacity of the fleet would grow again. By 2053, the fleet would have 20 percent more vertical launch system (VLS) cells than it does today under Alternative 1, 26 percent more under Alternative 2, and 30 percent more under Alternative 3. The other metrics related to missile cells illustrate the trade-offs between missile cells on surface ships and those on submarines. For example, Alternative 1 would provide more VLS cells on manned surface ships than Alternative 2, which would provide more of them on submarines. But the larger unmanned LUSV force envisioned under Alternative 2 would provide slightly more VLS cells on all surface ships as well.

With respect to the distribution of that lethality, the Navy’s alternatives would fare much better. Through 2026, the fleet would experience a 5 percent decline in the number of ships capable of launching antiship and land-attack missiles, compared with today’s fleet. By 2053, however, that number, in relation to today’s fleet, would increase by 59 percent under Alternative 1, by 79 percent under Alternative 2, and by 84 percent under Alternative 3.

The fleet’s torpedo capacity would substantially increase under all three alternatives because of their emphasis on purchasing submarines. That metric highlights the potential increase in the Navy’s ability to conduct undersea warfare between now and 2053. Under all three alternatives, more submarines would be retired than commissioned over the next decade; but after that, torpedo room capacity would increase, compared with the amount in today’s fleet, by about 50 percent to 60 percent.

Finally, the number of targets the carrier force could attack each day would not change much under the alternatives in the 2024 plan. The Navy would have the same size carrier force under Alternatives 1 and 2; but under Alternative 3, the fleet would include, on average, 1 additional carrier by the late 2040s—the result of building 1 carrier every four years after 2028. Although the Ford class carriers are expected to be capable of launching more daily aircraft sorties than Nimitz class carriers can, the carrier force would decline to 9 or 10 ships under all three alternatives by the 2040s. As a result, the overall capability of the carrier force would not change much or would decline slightly by 2053.

Plans for Specific Ship Programs

To project the costs of implementing the alternatives in the Navy’s 2024 shipbuilding plan, CBO estimated the cost of each ship the Navy intends to purchase between 2024 and 2053. For ships under construction, the estimates were based in part on the Navy’s data about actual costs. For ships yet to be built, CBO based the estimates primarily on information about the cost-to-weight ratio of similar ships acquired in the past.

Specifically, the agency used the cost per thousand tons of lightship displacement, which is the weight of the water a ship displaces without its crew, stores, ammunition, fuel, or other liquids. CBO then adjusted its estimates to reflect the effects of rate and learning. Rate is the reduction in average overhead costs that occurs as a shipyard builds multiple ships of the same type simultaneously; learning refers to the efficiencies that shipyards gain as they produce additional ships of a given type. Those effects were applied to the estimated cost of the first ship of a class to estimate the costs for all subsequent ships of that class. Thus, CBO’s estimate of the cost of the lead ship of a class drove its estimate of the costs of subsequent ships of that class.27

For ships that have yet to be designed, CBO developed its estimates on the basis of the ships’ likely size and capabilities. All cost estimates for specific ships exclude outfitting and postdelivery costs, which typically add 3 percent to a ship’s cost (included as “other items” in estimates of total costs). CBO’s estimates also reflect the expectation that costs of labor and materials would continue to grow at a rate that is 1.1 percent faster in the naval shipbuilding industry than in the economy as a whole, the rate at which such costs have grown for the past several decades.

Aircraft Carriers

Over the 2024–2053 period, the Navy would buy 6 CVN-78 Ford class aircraft carriers under Alternatives 1 and 2 and would buy 7 of them under Alternative 3. To project the costs of those ships, CBO considered the costs of the first 4 carriers of the class, which have already received some or all of their funding.

The first ship of the class, the USS Gerald R. Ford (CVN-78), cost $13.3 billion in nominal dollars appropriated between 2001 and 2021.28 CBO used the Navy’s inflation index for naval shipbuilding to convert that amount to $18.6 billion (in 2023 dollars)—which is 27 percent more than the Navy’s corresponding estimate when the ship was first authorized in 2008.29 Neither the Navy’s nor CBO’s estimate includes the $6 billion in research and development costs that apply to the entire class of ships. Because construction of the lead ship is finished, CBO used the end cost for that ship to estimate the cost of successive ships in the class.

The next carrier slated for delivery, the John F. Kennedy (CVN-79), is expected to be completed in 2024 and deployed in 2026. The Congress first appropriated advance procurement funding for the ship in 2007, officially authorizing its construction in 2013. As a result of cost overruns, the planned appropriations for the ship are expected to be completed in 2024. The Navy estimates that the ship will cost $14.8 billion (in 2023 dollars, or $12.7 billion in nominal dollars). CBO’s estimate for the ship is almost the same: $14.9 billion (in 2023 dollars).30

In 2018, the Congress authorized the third carrier of the class, the Enterprise (CVN-80). Appropriations for that ship began in 2016 and are expected to be complete by 2025. In 2019, the Congress authorized the Navy to purchase materials jointly for the CVN-80 and the next ship, the CVN-81, to save money by buying in greater quantities. It also authorized the Navy to change the sequencing involved in building the ships to gain greater efficiencies in their construction. Although that legislative action is known as a two-carrier buy, the ships would not be built at exactly the same time. Purchasing the two ships together would accelerate the CVN-81’s construction by only one year, compared with buying them individually.

In the 2024 budget, under the two-carrier buy, the Navy estimated that the CVN-80 will cost $12.3 billion (in 2023 dollars, or $12.6 billion in nominal dollars). By contrast, CBO is less certain about the savings the two-carrier purchase will generate. On the basis of the costs of the two previous ships, CBO estimates that the CVN-80 will cost $14.0 billion (in 2023 dollars), about 13 percent more than the Navy’s estimate. Similarly, the Navy estimates that the CVN-81 will cost $12.0 billion (in 2023 dollars, or $12.9 billion in nominal dollars). By contrast, CBO estimates that the CVN-81 will cost $13.6 billion (in 2023 dollars), which is also 13 percent more than the Navy’s estimate.

The Navy’s estimates for future carriers are much higher than its estimates for the CVN-80 or CVN-81. In the 2024 shipbuilding plan, the Navy estimates that the 6 carriers purchased under Alternatives 1 and 2 would each cost about $17 billion (in 2023 dollars), on average, and the 7 carriers purchased under Alternative 3 would each cost about $16 billion (see Table 8). The difference between those two estimates for the alternatives is driven largely by the effect of building carriers every five years under the first two alternatives versus every four years under the third alternative. The Navy expects that if future carriers can be purchased repeatedly using the two-carrier buy strategy over the next 30 years, then the costs could be lower than the estimates provided in the 2024 plan.

In a report to the Congress, the Navy estimates that a two-ship buy strategy would save about 7 percent, if the carriers were purchased every five years. If those ships were purchased every four years, then the estimated savings would double, to about 14 percent under Alternatives 1 and 2. Under Alternative 3, the savings would be a little less than 7 percent because the Navy already envisions buying carriers every four years under that alternative.31 Even so, the Navy’s recent estimates suggest that the industry is experiencing growth in real costs. The increase in its estimates for the 2024 plan, compared with those in the 2023 plan, amounts to roughly $500 million more per ship than is accounted for by shipbuilding inflation alone (using the same assumptions about how frequently the Navy would buy the ships).

CBO estimates that under the first two alternatives, carriers would cost, on average, $16.6 billion—3 percent less than the Navy’s estimate. CBO’s estimate for carrier purchases under the third alternative is $15.7 billion per ship—2 percent less than the Navy’s estimate. Although using the two-carrier buy strategy should generate savings, it is not clear that the large savings the Navy anticipates would occur. The savings that could be realized with two-carrier buys will be better understood once the CVN-80 and CVN-81 are complete.

Submarines

Under all three alternatives in the 2024 plan, the Navy would buy 11 new Columbia class submarines over the next 15 years. (The first Columbia class ship was ordered in 2021.) In addition, the service plans to purchase 4 or 6 large payload submarines (depending on which alternative is implemented) that could carry large numbers of missiles or special operations forces.

By far the greatest difference among the three alternatives is in the category of attack submarines. Under Alternative 1, the Navy would continue to buy Virginia class submarines with the Virginia payload module until 2029. After that, it would purchase Virginia class ships without the VPM before switching to the new and much more capable SSN(X) in 2035. The Navy would follow the same schedule under Alternative 3, although it would buy slightly more of each type of submarine. Alternative 2 would also follow that schedule but differs significantly from the other alternatives regarding the quantities and types of submarines purchased starting in 2035: The Navy would buy many more Virginia class submarines through 2053 and about half the number of SSN(X)s.

A major uncertainty in the Navy’s plans for attack submarines is the effects of the tripartite security arrangement between Australia, the United Kingdom, and the United States known as AUKUS. See Box 1 for a discussion of how AUKUS could affect the size of the U.S. attack submarine force.

Ballistic Missile Submarines. SSBNs, which carry Trident ballistic missiles, constitute the sea-based component of the United States’ strategic nuclear triad. (The other two components are land-based intercontinental ballistic missiles and strategic bombers.) The cost of the 11 Columbia class submarines included in the 2024 shipbuilding plan is one of the most significant uncertainties in the Navy’s and CBO’s analyses of future shipbuilding costs. Under the 2024 plan, the second Columbia class ship to be built would be purchased in 2024; 1 ship per year would then be purchased from 2026 to 2035.32

The Navy currently estimates that construction of the first Columbia class ship, the District of Columbia, will be complete in 2028 at a cost of $15.8 billion (in 2023 dollars). As of June 30, 2023, the ship was 36 percent complete. Subsequent ships in the class would cost $7.7 billion, on average. The total procurement cost for the 12 submarines would be $100.2 billion (which includes appropriations of $21.4 billion from 2017 to 2023), or $8.4 billion per ship, on average.

According to the Navy’s estimate, the cost per thousand tons of displacement for the first Columbia class ship would be 13 percent less than that of the first Virginia class attack submarine. But the costs of lead ships of new classes of submarines built in the 1970s and 1980s provide little evidence that ballistic missile submarines are cheaper to build, per ton, than attack submarines. On the basis of a calculation of cost risk completed in October 2022, the Navy has stated that there is a 54 percent chance that the cost of the first Columbia class submarine will exceed its estimates and a 46 percent chance that it will cost less than estimated. The likelihood that subsequent ships in the class would cost more or less than estimated was nearly even—49 percent and 51 percent, respectively.

Moreover, the Navy’s estimates for Columbia class ships have not yet been updated to reflect existing conditions in the submarine industrial base. As previously mentioned, the Navy estimates that the Virginia class submarines it will buy in 2025 and 2026 will cost about 15 percent more than the ones purchased in 2022 and 2023, after adjusting for inflation. The Navy has attributed a large portion of that increase in the cost of future Virginia class submarines to poor performance in the building shipyards, a fragile industrial base for suppliers of many components, and other challenges. Columbia class ships are being built in those same shipyards and will probably be affected by the same conditions. Nevertheless, the Navy continues to rely on its 2021 cost estimate for the Columbia class, which it plans to update later this year.

CBO’s estimate for the Columbia class program reflects current industry conditions and is therefore 19 percent greater than the Navy’s. CBO estimates that purchasing the first Columbia class submarine would cost $17.5 billion—$1.7 billion more than the Navy estimates. Including appropriations from 2017 to 2023, CBO estimates that, all told, 12 Columbia class submarines would cost $119 billion (of which $100 billion would be appropriated between 2024 and 2036). The 11 submarines set to follow the lead ship would cost $9.2 billion each, on average—$1.5 billion more per submarine than the Navy estimates.

Costs for the Columbia class submarines could, however, exceed both the Navy’s and CBO’s estimates. The new SSBN will be the largest, most technologically complex submarine the United States has ever built. It is expected to reuse some technology and components from the Virginia class submarine, but it would also include many new elements, such as an all-electric drive system, an X-stern ship control system (in which the rear rudders and dive planes are shaped like an “X” rather than a “+”, as they are on the Ohio class submarines), a new missile compartment, and a nuclear reactor designed to last the entire 42-year service life of the submarine. Furthermore, the Navy has repeatedly stated that the Columbia is its first acquisition priority and that the program must stay on schedule to meet its strategic deterrence mission. Thus, if the program encounters problems in construction, the Navy and the shipbuilders are likely to invest more resources and assign more people to the program to meet the schedule, all of which would increase costs. Conversely, costs for the Columbia class ships could be less than CBO estimates if the Navy and the shipbuilders are successful in their ongoing efforts to increase the speed and efficiency of construction and to improve the performance of the supplier base.

Large Payload Submarines. As with previous shipbuilding plans, the alternatives in the 2024 plan include a program to buy “large payload-based submarines.”33 The ships would probably perform missions similar to those currently conducted by SSGNs and, in the future, by Virginia class ships with VPMs, as well as other missions. The first ship would be ordered after production of the Columbia class ceased—in 2042 under Alternative 1, in 2037 under Alternative 2, and in 2038 under Alternative 3. The Navy would then purchase 1 ship every three or four years through 2053 for a total of 4 ships under Alternatives 1 and 3, and 6 ships under Alternative 2.

The Navy’s plan provides little information about the size and capabilities of the large payload submarine. CBO’s and the Navy’s estimates reflect the expectation that the ship would be based on the Columbia class hull with its missile tube section reconfigured to perform various missions and that other sections of the ship would receive the necessary equipment and modifications to support the payloads the submarine might carry. The Navy estimates that each ship would cost, on average, $7.7 billion under Alternative 1, $7.6 billion under Alternative 2, and $7.7 billion under Alternative 3 (see Table 8). CBO estimates they would each cost, on average, $9.3 billion under Alternative 1, $8.8 billion under Alternative 2, and $9.0 billion under Alternative 3.

Attack Submarines. The alternatives in the 2024 shipbuilding plan take substantially different approaches to the future of the attack submarine force. Under Alternatives 1 and 3, the Navy would continue to buy Virginia class ships with VPMs through 2029, resume production of Virginia class ships without VPMs in 2030, purchase the first new SSN(X) in 2035, and then, as in the 2023 plan, put that ship into serial production in 2037.34 Overall, under Alternative 1, the Navy would buy 11 Virginia class ships with VPMs, 10 Virginia class ships without VPMs, and 33 SSN(X)s. With more money to spend under Alternative 3, the service would purchase 11 Virginia class submarines with VPMs, 12 Virginia class ships without VPMs, and then 35 SSN(X)s. The Navy would buy both types of submarines at roughly the rate of 2 per year over the next three decades.

By contrast, Alternative 2 represents the largest and most challenging program for constructing attack submarines: The Navy would buy 11 Virginia class ships with VPMs, 37 Virginia class ships without VPMs, and 18 SSN(X)s—about half the number of next-generation submarines that would be purchased under the other alternatives. The service would buy submarines mostly at a rate of 2 per year, although it would sometimes buy 3 per year. Under Alternative 2, Virginia class ships would remain in production through 2053, and the Navy would purchase 10 to 14 more attack submarines than under the other alternatives (see Figure 9).

Largely because of conditions in the submarine shipyards, CBO’s and the Navy’s cost estimates for Virginia class ships with VPMs increased substantially compared with such estimates for the 2023 plan. The Navy estimates that each of those ships would cost $3.9 billion under Alternative 1 and $4.0 billion under Alternatives 2 and 3. And for each alternative, the Navy estimates that Virginia class ships without VPMs would cost the same as those with VPMs, even though the former are about 23 percent smaller. That inconsistency suggests that in the Navy’s plan, either submarines with VPMs are underpriced or those without VPMs are overpriced. CBO estimates that under all three alternatives, Virginia class ships with VPMs would each cost $4.3 billion—which is higher than the Navy estimates. CBO’s estimates for those ships without VPMs are slightly higher than the Navy’s: $4.0 billion under Alternative 3 and $4.1 billion under Alternatives 1 and 2.

Estimating the costs of the SSN(X) is difficult because the Navy has not yet determined its capabilities or size. In the past, the Navy has indicated that like the Seawolf class submarine, the next-generation attack submarine should be faster, stealthier, and able to carry more torpedoes than Virginia class ships. The service has also indicated that it wants the SSN(X) to have vertical launch capability, an attribute of the Improved Los Angeles class submarine and the original Virginia class submarine. CBO’s cost estimates therefore reflect the assumption that the SSN(X) would be similar to a Seawolf submarine but would have an entirely new design. The submarine’s advanced features would make it as quiet and stealthy as possible; it could launch missiles from missile cells and would contain a torpedo room the size of those on Seawolf submarines.

As a result, CBO estimated the size of the SSN(X) to be 10,100 tons of displacement when fully submerged—about 11 percent larger than a Seawolf class ship. The agency estimated the amount of the increase by comparing the displacements of the original Los Angeles class submarine and the Virginia class submarine. In that example, the combined effect of a new generation of submarine technology and a vertical missile capability caused an 11 percent increase in displacement for the Virginia class ships compared with the Los Angeles class. Another way of estimating the size of the SSN(X) is to compare the change in displacement between the Ohio class SSBN and the Columbia class SSBN. The new generation of submarine technology included on the latter increased its displacement by about 21 percent.35 CBO used the smaller estimate (11 percent) because it is based on displacements of attack submarines rather than ballistic missile submarines.

On the basis of that analysis, CBO estimates that the average cost of each SSN(X) would range from $7.7 billion to $8.0 billion under the Navy’s three alternatives. The Navy estimates that each SSN(X) would cost $6.7 billion to $7.0 billion in all three cases. (Those averages include the lead ship, which costs considerably more than subsequent submarines in the class.) Both the Navy’s and CBO’s estimates for the SSN(X) have increased substantially compared with those for last year’s shipbuilding plan. The current estimates reflect the same higher costs in the submarine industry that are behind the increased estimates for Virginia class ships. The range in CBO’s estimates reflects the different construction schedules for the SSN(X) in the Navy’s plan. Under Alternatives 1 and 3, the SSN(X) would be built in similar quantities and mostly at a rate of 2 ships per year from 2037 to 2053. Under Alternative 2, however, only half as many SSN(X)s would be built, resulting in less savings from the learning effect and less cost reduction for the program over the 30-year period.

Large Surface Combatants

The alternatives in the Navy’s 2024 plan call for the purchase of the same types of destroyers in nearly the same quantities and on the same schedules as the alternatives in the 2023 plan. Currently, the Navy’s fleet includes 73 DDG-51 destroyers consisting of four variants designated as Flight I, Flight II, Flight IIA, and Flight III. Additionally, 3 Flight IIAs and 16 Flight IIIs (an upgraded design) are being built or have been authorized for construction by the Congress. Under Alternatives 1 and 3, the service would purchase 18 more DDG-51 Flight IIIs by 2033; under Alternative 2, it would buy 20 more of those ships, intermittently produced through 2039. In all three cases, construction of the next-generation destroyer, designated as DDG(X), would commence in 2032.

DDG-51 Flight III Destroyers. To improve future ballistic missile defense capabilities beyond those provided by existing DDG-51s, the Navy modified the design of the DDG-51 Flight IIA destroyer to create the Flight III configuration. That modification incorporates the new Air and Missile Defense Radar (AMDR, also known as SPY-6), which is larger and, according to testing, nearly 100 times more powerful than the radar on current DDG-51s.36 For the AMDR to operate effectively in the new Flight III configuration, however, the ships must also have a greater capacity to generate electrical power and cool major systems.37

CBO estimates that with those improvements incorporated into the Flight III’s design, and with the associated increases in its displacement, the average cost of each ship, under any of the alternatives in the 2024 plan, would be $2.2 billion—slightly more than the Navy’s estimate of $2.1 billion under Alternatives 1 and 3 or the same as its estimate under Alternative 2.

DDG(X) Next-Generation Destroyers. According to the 2024 plan, production of the next-generation class of destroyer would start in 2032, two years later than envisioned in the 2023 plan. The Navy would buy 38 ships under Alternative 1, 30 under Alternative 2, and 46 under Alternative 3. Under Alternatives 1 and 3, it would buy 1 ship per year for several years and then increase to 2 ships per year for most years through 2053. (The Navy would occasionally buy 1 ship per year under Alternative 1 and occasionally 3 ships per year under Alternative 3.) Under Alternative 2, however, purchases would proceed more slowly; the Navy would buy 1 ship per year until 2039 (except for 2034, when it would buy none) and would then alternate between 1 and 2 ships per year through 2053.

The Navy estimates that the average cost of the DDG(X) would vary from $2.4 billion per year under Alternative 3 to $2.5 billion per year under Alternatives 1 and 2. Those estimates are about the same as the corresponding estimates in the Navy’s 2023 shipbuilding plan, after adjusting for inflation.

According to Navy officials, the new DDG(X)’s combat capabilities would be equivalent or superior to those of the DDG-51 Flight III; it would also have a larger hull, substantially more power, more stealth characteristics, and a greater capacity to accommodate the installation of new weapon systems and other capabilities in the future.38 The Navy has indicated that the initial design prescribes a displacement of 13,500 tons. If that is the case, then the Navy’s estimates imply that the DDG(X) would cost about 14 percent more than the DDG-51 Flight III but would have a full-load displacement that is 40 percent greater.

Such an outcome, however, seems unlikely given the history of the Zumwalt class DDG-1000 guided missile destroyer. In the 2000s, the Navy estimated that those ships would cost only slightly more than the DDG-51s that were then in production, even though the DDG-1000 was about 50 percent larger. Ultimately, costs for the DDG-1000 were about 45 percent higher than anticipated (see Figure 10).39 However, the Navy contends that the case of the DDG(X) will differ from that of the DDG-1000 because the former ship would have a combat system and radar substantially like those of the DDG-51 Flight III and would only require designing a new hull and new power and cooling systems. By contrast, the DDG-1000 included new technology affecting every major aspect of the ship’s design—its hull, power system, radar, and weapons, among other things.40

Given the estimated size of the DDG(X) and its use of new technology, CBO estimates that its average cost would range from $3.2 billion to $3.5 billion under the Navy’s three alternatives (or from 37 percent to 39 percent more than the Navy’s estimates). To fund the DDG(X) program from 2024 to 2053, the Navy would need $130 billion under Alternative 1, $106 billion under Alternative 2, and $149 billion under Alternative 3, CBO estimates. The uncertainty about the ultimate size and capabilities of the next-generation destroyer suggests that its final cost could differ substantially from both the Navy’s and CBO’s estimates.

Small Surface Combatants

The Navy would purchase a similar number of small surface combatants under all three alternatives: 53 under Alternative 1, 56 under Alternative 2, and 58 under Alternative 3. The major difference between them is that under Alternatives 1 and 3, the Navy would buy 16 FFG-62 Constellation class guided missile frigates, the type of frigate that is currently being built for the service, whereas it would buy only 10 such ships under Alternative 2. The Navy would then begin purchasing an upgraded version of the FFG-62, called the Flight II, starting in 2035 under Alternative 1, in 2029 under Alternative 2, and in 2033 under Alternative 3.

The Flight II designation for that follow-on ship in the 2024 plan suggests that it would be roughly the same size as the FFG-62, displacing about 7,300 tons and equipped with upgraded combat and weapon systems. The Navy’s estimated average cost for the FFG-62 (for both Flights I and II) under all 3 alternatives is about $1.0 billion per ship. CBO estimates that both types of ships would cost $1.2 billion, on average.41

Amphibious Warfare Ships

The Navy is preparing its new force structure assessment, in which it will reevaluate the size and composition of the amphibious warfare force. In the meantime, both the Chief of Naval Operation’s Navigation Plan 2022 and testimony during hearings on the Department of the Navy’s budget by the Marine Corps Commandant called for a force of 31 large and midsize amphibious warfare ships, the size of the current force.42 Those ships are composed of LHA and LHD amphibious assault ships, LPD amphibious transport docks, and LSD dock landing ships. However, the Navy would maintain a force of fewer than 31 such ships under any of the alternatives in the 2024 plan. (See Box 2 for a discussion of how the Navy could maintain a force of 31 large and midsize amphibious ships.)

The CNO’s report also calls for 18 medium landing ships (designated as light amphibious warships in the report), and the Commandant’s testimony calls for 18 to 36 of them; there are none in the current fleet. By 2041, the Navy would have built and would then maintain about 25 LSMs under Alternative 1 and 19 under Alternative 2. Alternative 3 calls for a force of 33 LSMs and would achieve that level in 2045.

CBO’s and the Navy’s cost estimates for amphibious assault ships vary depending on the alternative. The Navy would buy 6 LHAs at a rate of 1 ship every four or five years under Alternative 1; 5 LHAs at intervals of five, six, and eight years under Alternative 2; and 4 LHAs at a rate of 1 ship every three or four years through 2038 under Alternative 3. The Navy estimates that each ship would cost, on average, $4.3 billion under Alternatives 1 and 2 and $4.1 billion under Alternative 3. By contrast, CBO estimates that they each would cost, on average, $4.7 billion under Alternative 1, $4.8 billion under Alternative 2, and $4.4 billion under Alternative 3.

The Navy’s and CBO’s cost estimates for LPD(X)s, which are replacements for the service’s LPD-17 class ships, are more closely aligned than they were in CBO’s analysis of the 2023 shipbuilding plan. The Navy estimates that LPD(X)s would cost $2.2 billion to $2.3 billion per ship; CBO estimates that the cost would range between $2.5 billion and $2.7 billion per ship. Most of the difference lies in the fact that CBO’s constant-dollar estimates account for historically observed real growth in the costs of labor and materials in the shipbuilding industry, whereas the Navy’s estimates do not. Because the Navy would begin to purchase those replacement ships in the mid-2030s under Alternative 3, and in the 2040s under Alternatives 1 and 2, the effect of that real growth, which compounds over time, would be significant.

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AppendixMajor Types of Ships in the Navy’s Fleet

Aircraft Carriers

Nimitz Class CVN-68

The Navy’s 11 aircraft carriers are the heart of the battle force. Each carries an air wing of about 60 aircraft, which can attack hundreds of targets per day (based on 12 hours of flight operations) for up to a month before needing to rest. Carriers are the largest ships in the fleet, with a displacement of about 100,000 tons. (A ship’s displacement is the weight of water that it displaces when floating or, for a submarine, when submerged.) Ten of the current carriers belong to the Nimitz class. The Navy commissioned the first of a new class, the Gerald R. Ford, in 2017.

Strategic Ballistic Missile Submarines

Ohio Class SSBN-726

Strategic ballistic missile submarines are one component of the U.S. nuclear triad. Each submarine carries up to 20 Trident missiles armed with 1 to 8 nuclear warheads apiece. (Originally, they were built with 24 missile tubes, but arms control treaties now limit them to 20 operational tubes.) The Navy has 14 Ohio class ballistic missile submarines, each of which displaces about 19,000 tons when submerged. The service has 4 other submarines of that class that it converted to a conventional guided missile (SSGN) configuration. Those SSGNs carry up to 154 Tomahawk missiles as well as special operations forces.

Attack Submarines

Virginia Class SSN-774

Attack submarines are the Navy’s premier undersea warfare and antisubmarine weapons. Since the end of the Cold War, however, they have mainly been used for covert intelligence gathering. They can also launch Tomahawk missiles at land targets, frequently in the early stages of a conflict in an effort to destroy enemy air defense systems. Of the Navy’s 48 attack submarines, 21 belong to the Virginia class, 3 to the Seawolf class, and 24 to the Los Angeles class. Their displacement is less than half that of ballistic missile submarines.

Large Surface Combatants

Arleigh Burke Class DDG-51 Destroyer

Large surface combatants, which include cruisers and destroyers, are the workhorses of the fleet. They provide ballistic missile defense for the fleet and for overseas regions. They defend aircraft carriers and amphibious warfare ships against other surface ships, aircraft, and submarines, and they perform such day-to-day missions as patrolling sea lanes, providing an overseas presence, and conducting exercises with allies. They can also launch Tomahawk missiles to strike land targets. Most of the Navy’s surface combatants displace about 9,000 to 10,000 tons.

Small Surface Combatants

Freedom Class LCS-1 Littoral Combat Ship

Small surface combatants include littoral combat ships (LCSs) and frigates. LCSs, which are built in two variants, are intended to counter mines, small boats, and diesel-electric submarines in the world’s coastal regions. The Navy’s new frigates, which it began building in 2020, are designed to be multimission ships, capable of performing many of the missions of the LCS but also carrying robust antiship capabilities as well as being able to defend against threats in the immediate area. More routinely, LCSs and frigates—like their counterparts, the large surface combatants—patrol sea lanes, provide an overseas presence, and conduct exercises with allies. They range in size from 3,000 to 7,000 tons. The Navy currently has no frigates because it retired all of its Oliver Hazard Perry frigates as of 2015.

Amphibious Warfare Ships

San Antonio Class LPD-17

The Navy has five classes of amphibious warfare ships. The two classes referred to as amphibious assault ships (also known as large-deck amphibious ships or helicopter carriers) are the second-largest types of combat ships in the fleet, displacing between 40,000 and 45,000 tons. With capacity for about half the troops and equipment of a Marine expeditionary unit, the amphibious assault ship is the centerpiece of the amphibious ready group. In addition to troops, each ship can carry as many as 30 helicopters and 6 fixed-wing Harrier jump jets or short takeoff and landing versions of the Joint Strike Fighters (F-35Bs), or up to 20 of those fixed-wing aircraft. The other three classes are divided into two types: amphibious transport docks and dock landing ships. Two of those ships together provide the remaining transport capacity for a Marine expeditionary unit in an amphibious ready group. They range in size from 16,000 to 25,000 tons.

Combat Logistics and Support Ships

Lewis and Clark Class T-AKE-1

The many combat logistics and support ships in the Navy’s fleet provide the means to resupply, repair, salvage, or tow combat ships. The most prominent of those vessels are fast combat support ships, which resupply carrier strike groups with fuel, dry cargo (such as food), and ammunition. Logistics and support ships can be as small as 2,300 tons for an oceangoing tug or as large as 90,000 tons for an expeditionary sea base.