The Navy’s new 30-year shipbuilding plan sketches a faster plan to 355 ships, but caps it at that level going forward due to the increasing sustainment costs.

In the “Report to Congress on the Annual Long-Range Plan for Construction of Naval Vessels for Fiscal Year 2020,” the Navy procures 55 battle force ships over the Future Yeards Defense program (FYDP) to reach 314 ships by FY 2024. The Navy then reaches 355 ships by FY ’34.

USS Ronald Reagan (CVN-76) leads a formation of Carrier Strike Group Five ships as U.S. Air Force B-52 Stratofortress aircrafts and U.S. Navy F/A-18s pass overhead for a photo exercise during Valiant Shield 2018. (Photo: U.S. Navy)

The largest driver to getting to 355 faster than last year’s plan is the class-wide service life extension (SLE) of Arleigh Burke-class DDG-51 destroyers. The Navy said this “provided opportunity to address higher priority readiness challenges while adjusting profiles to achieve a steady, increasing ramp to 355.”

In contrast, last year’s plan rose to 326 ships by 2023, then dipped from FY 2026-31 before rising back towards 355 ships without ever fully reaching it within 30 years.

“Absent this dip, the aggregate profile now provides a more predictable forecast for fleet planners, shipbuilders and the numerous supporting acquisition programs and enabling contributors – maintainers, trainers, recruiters, etc,” the FY 2020 plan says.

The plan acknowledged with this extension the mix of ships will be biased towards destroyers until the Navy reaches the individual inventory objectives for all ship types. The timeline for those individual objectives is mostly driven by attack submarines and aircraft carriers.

“Numerically, SSNs remain the furthest from the inventory objective and options are being explored regarding expanding production. While additional DDGs do not completely compensate for these other shortfalls, they do provide considerable lethality and utility while filling in the balance of the force mix,” the plan said.

While the report calls the 2016 Force Structure Assessment (FSA), “the base requirement for the correct mix of 355 battle force ships,” it noted the Navy is on track to finish the next FSA by the end of 2019, which may include more changes.

“Some of the key elements that will be reviewed include ongoing threat-based fleet architecture review, logistics in support of DMO, surface ship mix with the inclusion of the new frigate, deterrence per the National Defense Strategy, and legacy capital investments versus the efficacy of next generation capabilities,” the plan said.

The plan generally seems to cap the fleet at 355 ships after FY ’34 “to manage operating and sustainment costs while preserving the option to extend additional DDGs if needed, depending upon the security environment, overall shipbuilding plan dynamics, funding, or updated inventory requirement.”

The report noted a rule of thumb for Navy ship costs has 30 percent in procurement and 70 percent in operating and sustainment. With the plan to reach 301 ships in FY ’20, program sustainment costs will reach about $14 billion. Then when the fleet reaches 314 ships in FY ’24 sustainment will rise to $30 billion in then-year dollars (TY$). By the time the fleet reaches 355 ships in FY ’34, sustainment costs will have risen to almost $40 billion TY$. This is a 42 percent increase over FY ’24.

The rising cost of manpower, operations, and ship maintenance costs means even after reaching and maintaining a fleet size of 355 ships, the plan expects these costs to continue to rise past 2034. The Navy projects these sustainment costs will rise of over $55 billion in then-year dollars in FY 2049 even with a fleet at the same 355 ship size as 2034.

The Navy notes for now the sustainment estimate only includes personnel, planned maintenance, and some operations. This represents costs “tied directly to owning and operating a ship, easily modeled today, and already line-item accounted for in the budget.”

However,  “equally important additional costs, but not yet included in the future estimate, are those not easily associated with individual ships and require complex modeling for long-term forecasting (beyond 3 to 5 years), such as the balance of the operations accounts (market and schedule driven), modernization and ordnance (threat and technology driven), infrastructure and training (services spread across many ships), aviation detachments, networks and cyber support, plus others.”

Beyond the destroyer extensions, the plan notes changes over the FY ’19 30-year shipbuilding plan of $4 billion in savings to buy CVN-80 and 81 at once; adding a third Virginia-class attack submarine to FY ’20; shifting one destroyer from FY ’21 to FY ’20; and adding a second future frigate, FFG(X), to FY ’21; and the planned retirement of CVN-75 because of a cancellation of its refueling and complex overhaul (RCOH).

The report reiterated CVN-75’s retirement “is in concert with the Defense Department’s pursuit of a more lethal balance of high-end, survivable platforms (e.g. CVNs) and complementary capabilities from emerging technologies. Persistent threat analysis and ongoing warfighting studies will continue to inform the requirements for specific battle force ships in the context of an evolving capability force mix, and the Navy is postured to respond to these studies.”

The plan also noted a shift in San Antonio-class Flight II amphibious transport docks “to balance shipbuilding accounts in support of near-term priorities articulated in the National Defense Strategy. Navy slid the LPD profile right and deferred the FY2024 procurement to beyond the FYDP.”

Beyond DDG-51 SLEs, the Navy plans to refuel and extend the life of two Los Angeles-class attack submarines. Five more SSN candidates were identified for SLE, but that would occur beyond the FYDP.

The Navy notably removed the funding to extend the life of the six oldest cruisers, which was planned in the FY ’19 budget request. The report notes this was done “in favor of readiness and other lethality investments.”

The first two cruiser retirements were scheduled for FY ’20 but deferred by a year “to support reevaluation during PB2021.”