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U.S. Navy Sees 20-Year, $333 Billion Plan Missing Ship Goals

Ohio-class Guided-missile Submarine USS Michigan
The current Ohio-class submarines will begin retiring in 2027. Source: U.S. Navy

The U.S. Navy’s 20-year plan to spend about $333 billion on new ships may mean fewer vessels built each year because of the high cost of replacing the Ohio-class nuclear-powered submarines, the service’s top acquisition official told Congress today.

“Yearly shipbuilding expenditures during the second decade” from 2022 through 2031 “is projected to average about $17.5 billion” in current dollars, Sean Stackley, assistant Navy secretary for acquisitions, told the House Armed Services Committee’s subcommittee on seapower and projection forces in prepared remarks today.

“Even at this elevated funding level, however, the total number of ships built per year will inevitably fall” because of the procurement of the SSBN(X) submarines that will replace the current Ohio-class nuclear-powered ballistic missile submarines, Stackley said. From 2012 through 2021, the Navy plans to spend an average of $15.8 billion a year for ships, he said.

The Navy’s long-range shipbuilding forecast released in February 2010 shows annual production dropping from 12 vessels in 2015 to about 7 or 8 a year starting in 2024. Navy officials have been sounding warnings about the cost of the Ohio-class submarine replacement program eating into the service’s ship construction.

Examining the Navy’s proposals “there are many things to be concerned about,” Missouri Republican Representative Todd Akin, the subcommittee’s chairman, said in prepared remarks. “Probably the most worrisome aspect of the Navy’s budget is that it will require near-perfect execution” on cost, schedule and management of risk, he said.

‘Put a Dent’

“Right now we are at about $5.4 billion per boat” in projected costs for the Ohio-class submarine’s replacement, Navy Secretary Ray Mabus said yesterday in congressional testimony. That number “needs to start with a four in some way,” he said.

Even if one submarine costs $4.9 billion, paying for 12 of them out of the Navy’s own budget “would put a dent in the rest of the shipbuilding programs,” Mabus said.

The current Ohio-class submarines will begin retiring in 2027 and the first of their replacements should be operational in 2029, Stackley said.

The Navy also is upgrading its fleet of aircraft carriers with the new Ford-class that will feature an electro-magnetic aircraft launch system in place of a steam catapult. Other ship classes undergoing modernization include the new Littoral Combat Ship, amphibious vessels, DDG-51 destroyers, oilers and the Joint High Speed Vessels to carry sailors and Marines within a theater.

Northrop Grumman Corp., of Los Angeles, is the largest U.S. shipbuilder, followed by General Dynamics Corp., of Falls Church, Virginia.

Northrop’s Divestiture

Northrop’s plans to spin off its shipbuilding unit into a separate entity called Huntington Ingalls Industries Inc. is being closely monitored, Stackley said in his testimony today.

The Pentagon wants to ensure “strong shipbuilding yards are available to compete for future Navy work” once Northrop completes its divestiture, Stackley said.

Wes Bush, chief executive officer of Northrop, has said separating the unit would allow the company to focus on its electronics, aerospace and information-systems businesses that offer better profit margins.

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