A new Congressional Budget Office (CBO) report assessed the FY ‘22 Navy long-range shipbuilding plan would cost 10 to 43 percent more than recent shipbuilding budgets and the future force could reduce the fleet’s Vertical Launch System (VLS) missile capacity. 

In June, the Navy submitted its long-range shipbuilding plan to Congress but did not include details for construction after fiscal year 2022, outlining the administration’s future priorities and general direction (Defense Daily, June 21).

The plan did not disclose definitive long-range plans but listed a potential range of naval platforms over the next 30 years. It includes the fleet growing from 296 manned ships today to 321 to 372 manned vessels and  77 to 140 total unmanned vessels. This could result in a future fleet of 398 to 512 manned and unmanned ships total.

The Navy’s plan also disclosed a potential range of various ship classes in the future fleet. This includes nine to 11 aircraft carriers, eight to nine big deck  amphibious assault ships, 24-35 small amphibious warfare ships, 63 to 65 large surface combatants, 40 to 45 small surface combatants, 66 to 72 attack/large payload submarines, 56 to 75 combat logistics force ships, and 12 nuclear-armed ballistic missile submarines as planned.

The CBO estimated the force in this plan would cost somewhere from $25.3 billion to $32.7 billion per year in 2021 dollars. That cost covers new ship construction, refueling aircraft carriers, and other costs like outfitting and post-delivery costs for new ships.

“Those amounts are 10 percent to 43 percent higher than the $22.9 billion the Congress has appropriated, on average, for all shipbuilding activities over the past five years,” the report said.

CBO said the cost for new ship construction under the plan, including unmanned vessels, may average from $23.4 billion to $30.6 billion per year. It underscored that is 15 to 50 percent greater than the $20.2 billion Congress appropriated on average for new ship construction over the last five years.

“Manned battle force ships account for 94 percent to 97 percent of those potential costs, but represent only 73 percent to 81 percent of the number of platforms in the Navy’s objective force,” CBO said.

However, since the Navy’s plan did not include a detailed procurement schedule, “those projections are a steady-state estimate of the cost of building the platforms anticipated in the 2022 plan.”

CBO said it calculated the average annual procurement costs of all the ships in the Navy’s objective force by dividing the number of ships per class by expected service life, then multiplying that by the average unit cost of buying the ships.

“For cases in which the service life of a ship class is potentially a range, as is the case with destroyers, or there is more than one possible cost of the replacement, the average annual cost is also expressed as part of that range. Because the size of the objective force is expressed as a range in the 2022 plan, CBO calculated a steady-state estimate for both ends of that range, with the lower end reflecting a fleet with 398 platforms and the upper end reflecting one with 512 platforms,” the report said.

CBO said it used the unit costs for ships estimated in the office’s analysis of the previous December 2020 long-range shipbuilding plan.

Therefore, if 50 destroyers have a service life of 35 to 40 years each, the Navy would have to buy 1.25 to 1.42 destroyers annually to maintain the 50-ship force.

“If each destroyer cost between $1.8 billion (the cost of destroyers being built today) and $2.8 billion (the estimated cost of the next generation of destroyers), the average annual cost of maintaining a force of 50 destroyers in steady state would be between $2.3 billion (that is, $1.8 billion multiplied by 1.25) and $4.0 billion (that is, $2.8 billion multiplied by 1.42) per year,” the report said.

CBO also notes the latest plan has implications for the distribution in Vertical Launch System cells on surface ships. 

Most destroyers and cruisers in the fleet now carry 90 to 122 VLS cells and the report noted the new Constellation-class frigates are slated to carry 32 cells while the Navy wants the Large Unmanned Surface Vessel (LUSV) to carry 16 or 32 cells.

“Under the 2022 plan, the Navy would reduce the number of large surface combatants and increase the number of small surface combatants and, presumably, the number of unmanned surface vessels carrying missiles. The composition of the small surface combatant force is not clearly defined, however.”

As a result of this shift in focus and how CBO assumes the changes would be implemented, the report said while more surface combatant and unmanned systems would carry VLS cells, the total number of cells could still be smaller.

CBO said the current surface force carries about 9,300 VLS cells on 92 ships. If the Navy builds the future force under the low end of the 2022 plan range and only put 16 cells on LUSVs, the surface force would carry about 7,100 VLS cells on 113 vessels. This works out to 24 percent fewer missiles in the fleet but 23 percent more platforms than today.

“If, instead, the Navy built to the high end of the ranges in the 2022 plan and put 32 VLS cells on the LUSVs, the force would carry about 9,100 missiles on 155 ships and unmanned vessels (about 3 percent fewer missiles in a fleet with 68 percent more ships than today’s fleet). Thus, the overall firepower of the force would be less than it is today, but many more ships would carry that firepower,” CBO said.