The Congressional Budget Office (CBO) in a report released Monday estimated that over the Navy’s 30-year shipbuilding plan costs will be on average about 13 percent more than the service projects.
The analysis of the Navy’s 30-year plan submitted to Congress earlier this year found that the CBO and the Navy are pretty close on their estimates for the first 10-year period starting in 2015–with the CBO coming in at four percent higher than the service’s $15.7 billion range.
In the midterm, from 2025 to 2034 and while the Navy is ramping up production of the replacement vessels for the Ohio-class ballistic missile submarines, the cost spikes to $19.7 billion, according to the Navy, while the CBO sees it coming in at $22.5 billion.
In the final phase, 2035 to 2044, the CBO puts the cost at 17.5 billion over the Navy’s $14.6 billion estimate.
The Navy anticipates its annual average shipbuilding cost for the entire 30-year period will be $16.7 billion while the CBO projects it coming in at $18.9 billion.
The CBO said its costs came in higher because it anticipates labor and material costs increasing at a rate above the Navy’s projections.
When the Navy submitted its plan in July, the service acknowledged that the further out years are hard to predict because of unknown combat capability requirements, as well as the state of technology and other factors may be different.