The U.S. Navy's new 313-ship fleet is going to cost a lot more money than service leaders previously have said - about $9 billion a year more, according to Navy figures provided in the latest update of the 30-year shipbuilding plan.
A yearly average of about $23 billion appears necessary to buy the service's new ships, a jump of nearly $9 billion per year - 60 percent - over previous Navy estimates of about $14.4 billion a year.
"I would say they're getting more realistic in terms of cost," said Paul Francis of the Government Accountability Office (GAO). Francis has testified before Congress that the Navy has greatly understated the true costs of building new ships. GAO, the Congressional Research Service and the Congressional Budget Office all told Congress last year that the Navy's cost estimates are too low.
"The Navy has to be realistic about estimating the costs of its programs," Francis said Feb. 8 after looking over the new fleet cost figures.
But while Francis applauded the increased realism of the estimates, he questioned whether the Navy could expect to get that much money in the future.
"Those are pretty optimistic funding expectations, given the competing demands the department faces," he said. "They're competing with the FCS [the Army's Future Combat Systems program], tactical air, missile defense. There are a lot of programs out there competing for investment funds."
The Navy's new projected 30-year cost figures show a very different profile than the same estimates a year ago. Then, the highest yearly bill was thought to be about $19 billion in 2026, and figures declined in the years after that.
Now, the costs break through the $20 billion barrier in 2019 and spend most of the following 19 years above that level, reaching $32 billion in 2033 and $33 billion in 2038.
Costs for last year's plan were figured in 2005 dollars, while the latest version uses 2007 dollar values throughout. Adjusted for inflation, the Navy said, last year's estimate of $13.4 billion per year needed over the life of the plan now equates to $14.4 billion in 2007 dollars.
Navy officials repeatedly declined to comment on the new cost estimates.
"The plan's discussion of these issues speaks for itself," said Lt. Cmdr. Ryan Perry, a Navy spokesman at the Pentagon.
The revised fleet construction plan reflects changes made in the 55-ship Littoral Combat Ship (LCS), a program that comprises nearly one-sixth of the 313-ship fleet. Cost overruns and production problems that have delayed the first two ships, caused the cancellation of two more and pushed back the acquisition of follow-on ships are reflected throughout the "near term" period of the 30-year plan that extends to 2020.
A year ago, the Navy planned to complete the purchase of LCS ships in 2016, but it now has stretched the procurement period to 2019. The revised costs for the LCS - figured a year ago at about $300 million each but now capped at $460 million - are reflected in the increased per-ship cost for all ships over the next five years.
Last year's plan showed the Navy buying 60 ships from 2009 to 2013 at a cost of $75 billion. Now the plan is to buy 47 ships for nearly the same amount, $74 billion. ■
E-mail: ccavas@defensenews.com.
The Army's Future Combat Systems (FCS) program is ready to test a few components that soldiers may have in their hands by 2010.
Help
