House panel looks at Navy shipbuilding plans

A hearing on “Navy Shipbuilding Acquisition Programs and Budget Requirements” held March 9 by the House Subcommittee on Seapower and Projection Forces produced some interesting testimony.

The good news to emerge for shipbuilders: the Navy is planning a bigger fleet, The bad news? It may have gotten its sums wrong.

It seems that the Navy’s goal of achieving and maintaining a fleet of 313 ships, announced in 2006, has undergone some changes and now appear to add up to a desired fleet of 320 or 321 ships.

Read the testimony of Ronald O’Rourke,Specialist In Naval Affairs Congressional Research Service, HERE

Erik Labs of the Congressional Budget Office sees the total fleet size that be implied from the 2011 budget submission as 322 to 323 ships.

The Navy intends to buy nine ships in 2011, notes Erik Labs, and a total of 50 ships between 2011 and 2015 (the period covered by DoD’s current Future Years Defense Program, or FYDP). Thereafter, under the 2011 shipbuilding plan, the Navy would buy another 226 vessels through 2040–for a total of 276 ships over 30 years, or an average of 9.2 per year.

The pace of shipbuilding would be faster than that in the near term: The Navy plans to purchase an average of 10.2 ships annually between 2011 and 2020, with production of littoral combat ships increasing to four per year and production of joint high-speed vessels rising to two per year.

If implemented as described above, the 2011 plan would enable the Navy to reach its earlier 313-ship goal by 2020. However, the fleet would remain at or above that number for only seven years. After that, as older ships were retired faster than new ones were brought into service, the fleet would fall to a low of 288 ships in 2032 before increasing to 301 ships by 2040. Thus, the current plan would never achieve its implied goal of 322 or 323 ships.

Can the Navy get the funding for the number of ships it proposes? Here’s another extract from the CBO testimony:

According to its most recent 30-year plan, the Navy envisions buying a total of 276 ships over 30 years at an average annual cost of about $16 billion (in 2010 dollars) for new construction alone, or roughly $18 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 about $3 billion a year higher–an average of $19 billion per year for new construction or $21 billion per year for total shipbuilding. There is nothing in the Navy’s 2012 budget request that suggests those numbers will change significantly.

Read Erik Labs’s testimony HERE

March 13, 2011