Abraham Lincoln Carrier Strike Group and Cavour Carrier Strike Group sail in formation. The United States Navy and the Italian Navy held the first-ever bilateral Multi-Large Deck Event (MLDE) in the Indo-Pacific. (US Navy photo by Mass Communication Specialist Seaman Apprentice Daniel Kimmelman)
WASHINGTON — Independent government auditors estimate the US Navy’s latest long-term shipbuilding plans will cost 46 percent more than historical congressional appropriations have provided and 17 percent more than the service projects.
That analysis comes from a new report published Monday by the Congressional Budget Office, which is statutorily tasked with analyzing the Navy’s annual 30-year, long-range shipbuilding plans. The 2025 version of that document focuses on achieving a fleet of 381 manned ships, a target established a 2023 Navy assessment formally called the Battle Force Ship Assessment and Requirement report.
The latest shipbuilding plan offers two shipbuilding profiles: one supported by the Biden administration and an alternative that assumes lower funding levels from future lawmakers. CBO’s analysis focuses on the profile supported by the administration.
“The Navy’s 2025 plan would cost 46 percent more annually in real terms … than the average amount appropriated over the past 5 years,” according to the new report. “CBO estimates that total shipbuilding costs would average $40 billion (in 2024 dollars) over the next 30 years, which is about 17 percent more than the Navy estimates.”
Auditors also project that to operate and maintain those ships, purchase aircraft and weapons, and fund the Marine Corps, the total Navy budget would have to jump from $255 billion today to $340 billion in 2054. (CBO routinely adjusts its estimates to remove the effect of future inflation.)
Historically, the Navy’s price estimates are always more optimistic than CBO because predicting future shipbuilding costs requires analysts to make a series of assumptions about the costs of labor and materials, as well as the capabilities and characteristics of new vessels.
The further out into the future an estimate reaches, the less certain analysts can be about the bottom-line price. The chaos inflicted on the defense industrial base by the COVID-19 pandemic is one example of a factor that had significant impact on shipbuilding costs but was impossible for CBO or the Navy to predict prior to 2020.
Both CBO and the Navy acknowledge the costs of the 2025 plan have risen over the three options laid out in the 2024 shipbuilding plan. Auditors’ projections show an increase of between 7 and 16 percent while the Navy’s estimates are between 5 and 14 percent.
“The growth in costs reflected in the Navy’s and CBO’s estimates for the 2025 plan is attributable to both an increase in the estimated costs of many shipbuilding programs and to the larger number of ships that the Navy would purchase under that plan compared with what it would have purchased under the alternatives in the 2024 plan,” according to CBO’s report.
One key price tag neither CBO nor the Navy can predict yet is the costs of the future unmanned fleet. The service’s 2023 assessment concluded that the fleet should contain 134 unmanned ships, but due to the technology’s early stages — as well as levels of uncertainty about that fleet’s final composition from the Navy — the new report does not make any estimates about its price tag.
