The US's 30-year shipbuilding plan will cost billions more.

The US Navy’s plan to create a larger, more lethal fleet will cost billions of dollars more than the service says while reducing its firepower in the near term, according to an analysis by the Bureau of Congressional Budget.

According to a CBO report released Monday, the service plans to retire more destroyers, cruisers and submarines than it will put into service over the next 10 years. The CBO analyzed the 30-year shipbuilding plan for 2024 presented to Congress in March.

If the Navy sticks to its ship retirement schedule, the fleet will reach a minimum of 285 ships in 2026 and 2027 before increasing in size. Overall, the fleet will be smaller than today over the next decade, according to the CBO.

Fleet lethality, “measured in part by the total number of missile cells, would decrease by 12% through 2032,” the CBO noted in the report. The trend would then reverse and the fleet would have 20% more vertical launch system cells by 2053 than today, according to the CBO report.

The costs of the Navy’s plan to acquire a fleet of the future – the purchase of up to 340 ships – would average between $34 billion and $36 billion annually over the next 30 years. This is 16% more than estimated by the service, according to the CBO.

Buying, operating and maintaining that fleet would require the Navy’s annual budget to increase about 30%, from “about $245 billion today to between $315 billion and $330 billion (in 2023 dollars) in 2053,” the agency said. CBO.

The Navy’s 2024 shipbuilding plan includes three long-term alternatives to increase the fleet and its capabilities over the next 30 years. Like the 2023 plan, the shift from large surface ships to smaller, more agile combat ships continues to increase the fleet to 367 ships.

The US's 30-year shipbuilding plan will cost billions more.
Rear Adm. Tom Anderson, acting commander of Naval Sea Systems Command, discusses the construction status of the aircraft carrier John F. Kennedy Sept. 28, 2023, in Newport News, Virginia.

According to the report, under the first alternative, the Navy would purchase 290 vessels, adding 38 more small and medium-sized landing ships to the fleet. In this way, the number of combat ships in the Navy would go from the current 290 to 319 in 2053.

Two alternative plans would increase the fleet to 328 and 367, respectively, according to the CBO.

None of the alternatives took into account the service maintaining 31 medium- and large-sized amphibious ships, as required by the National Defense Authorization Act of 2023.

The Navy would not buy enough to replace those that will reach the end of their service life in the next 30 years, even though naval and Marine Corps officials have said it was a priority, according to the report.

The purchase of new ships would cost about $910 billion, or an average of $30.3 billion annually over the next 30 years for the first alternative, according to the CBO. The Navy’s estimate for the same plan is $776 billion, or an average of $25.9 billion annually over the same period.

The difference, in part, is because the Navy uses a methodology in its estimates that does not realistically take into account the historically faster growth of labor and materials costs in the shipbuilding industry, the company said.

Uncertainty over the design and capabilities of larger ships, such as the destroyer and next-generation submarine, also contributed to the difference, the report said.

The overall growth in Navy and CBO estimates in the 2024 plan is attributable to an increase in the estimated costs of many shipbuilding programs, particularly those for submarines, according to the report.

“Some ships have taken longer and been more difficult to build than the Navy anticipated,” the CBO noted. “The designs of some ships have turned out to be more complicated than anticipated, and the estimated costs of some ships were unrealistically low in previous shipbuilding plans.”