CBO Analysis of U.S. Navy’s Fiscal Year 2025 Shipbuilding Plan

January 7, 2025 5:12 PM

The following is the Jan. 6, 2024, Congressional Budget Office report, An Analysis of the Navy’s 2025 Shipbuilding Plan.

From the report

The Department of Defense (DoD) submitted the Navy’s shipbuilding plan for fiscal year 2025 to the Congress on March 18, 2024. The Congressional Budget Office is required by law to analyze that plan and assess its costs.

The Navy’s 2025 plan comprises a single official plan and one alternative that could be implemented if budgetary resources were not available to pay for the 2025 plan. (The 2023 and 2024 plans each comprised three alternatives, none of which was favored over the others.) CBO focused its analysis on the official 2025 plan. Like the past two years’ plans, the 2025 plan aims at building a larger fleet whose firepower is greater and distributed among more ships than it is today.

The average annual cost of carrying out the 2025 plan, which covers fiscal years 2025 to 2054, is $40.1 billion (in 2024 dollars), including $35.8 billion for new-ship construction, CBO estimates (see Table 1). The Navy’s 2025 plan differs from the alternatives in the 2024 plan in several ways. Most notably, it would have the Navy buy fewer next-generation attack submarines and large surface combatants and more current-generation ships. Nevertheless, in real terms (that is, adjusted to remove the effects of inflation), the costs of the 2025 plan are substantially higher than those of the alternatives in the 2024 plan because unit costs would be higher for almost all major shipbuilding programs and because the current plan calls for purchasing more ships.

The Navy Has a Goal of a 381-Ship Fleet

On June 20, 2023, the service sent its classified Battle Force Ship Assessment and Requirement (BFSAR) report to the Congress. In its 2025 shipbuilding plan, the Navy released the details of the goals outlined in that report for its future fleet. The Navy states that its 2025 plan and the BFSAR report align its shipbuilding goals with DoD’s most recent national security strategy. Those goals include achieving a fleet of 381 battle force ships and 134 unmanned surface and undersea vessels for a total force of 515 naval platforms.

In this report, CBO analyzes and compares the 2025 plan to the alternatives in the 2024 plan and to the Navy’s broad goals of building a larger fleet with more distributed firepower. The Navy wants to put more offensive capability—primarily missiles and unmanned systems—on a greater number of ships than it currently has. Doing so would both provide a task force commander with more ships capable of offensive operations and make it more difficult for an opponent to destroy the fleet’s offensive capability. If fully implemented, the plan would eventually result in the fleet’s being larger than it has been at any time since 2001. However, if the Navy is unable to reduce the maintenance delays that it has been experiencing for more than a decade, it would not be able to deploy as many ships as achieving its 381- ship goal would suggest.

The 2025 Plan Would Expand the Fleet to 390 Battle Force Ships

On December 1, 2024, the Navy’s fleet numbered 296 battle force ships—aircraft carriers, submarines, surface combatants, amphibious ships, combat logistics ships, and some support ships. To achieve its goal of 381 battle force ships, the Navy would buy 364 ships over the next 30 years—293 combat ships and 71 combat logistics and support ships. If the Navy adhered to its schedule for retiring ships, it would have a fleet of over 300 ships by the early 2030s (see Figure 1). In 2054, the fleet would number 390 ships, a little more than the Navy’s goal.

In the near term, however, the fleet would become smaller. Over the next three years, the Navy would retire 13 more ships than it would commission, causing the fleet to reach a low of 283 ships in 2027 before growing again. That is 2 fewer ships than the fleet’s lowest point in the 2024 plan.

Although the 2025 plan does not include many details about the size or composition of the unmanned vessels that the Navy envisions procuring, the service provided CBO with a notional plan to purchase enough large unmanned surface vessels to build and sustain a force of 40 of those craft.

Download the document here.

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