WASHINGTON — The fiscal 2022 shipbuilding plan was never going to be one that kicked off a major transformation of the U.S. Navy.

There was momentum, however, first from a Navy-Marine Corps fleet design effort in 2019 and 2020, and then from a Pentagon-led effort that convinced former Defense Secretary Mark Esper that the Navy, by mid-2020, needed more money to transform its fleet and grow larger. The latter effort culminated in a December 2020 shipbuilding plan under the outgoing Trump administration. It called for 12 ships in FY22, but the Biden administration only asked for eight.

Reaction has largely been concerns that the Navy’s shipbuilding budget is too small.

The Defense Department’s FY22 budget request, released May, 28 included a Navy top line that represented less spending power than the FY21 budget — it rose by less than the rate of inflation — and included money for four warships and four support ships.

Sea power proponents had wanted to see significant investment in small and unmanned ships that would make up an increasingly large percentage of the fleet as the Navy works to implement its Distributed Maritime Operations concept. But the next fiscal year would never have been host to these.

The main reason? These programs aren’t ready yet.

The Navy has one builder for its frigate program, Fincantieri, but hasn’t begun a search for a second yard to expand production capacity. The Navy and Congress are still butting heads over how much development and experimentation must be done on unmanned surface and underwater vessels before the service can begin proper acquisition programs. And the industrial base for attack submarines, which will also play a larger role in the future fleet, is struggling to keep up with its current requirement for two Virginia-class attack submarines per year, plus the Columbia-class ballistic missile submarine program; the shipyards simply are unable to expand production now.

But industry experts say there’s more the Navy could have done — or Congress can still do as it marks up the budget request — to get ahead of a wave of shipbuilding expected in the coming years.

The plan that never was

In the final weeks of the Trump administration, the Pentagon released a long-range shipbuilding plan that laid out 12 ships for FY22: two Arleigh Burke-class destroyers, two Virginia-class attack submarines, one Constellation-class frigate, one America-class amphibious assault ship, one light amphibious warship, one John Lewis-class fleet oiler, two Spearhead-class expeditionary fast transports, one towing and salvage ship, and one ocean surveillance ship.

It then called for 15, 16, 19 and then 20 ships in years 2023 through 2026, respectively. The plan wasn’t fiscally constrained and was never considered particularly realistic for the Biden administration to implement as it entered the White House with a long list of domestic priorities. However, the new president kept the two Virginia subs, the frigate, the oiler and the surveillance ship. It increased the tug order to two, but cut the destroyer buy down to one.

In the delta between the two plans, some of the ships more directly support the future fleet design than others. Light amphibious warships and expeditionary fast transports are small and inexpensive vessels that support dispersed operations. The destroyer and the amphibious assault ship don’t represent growth areas in the future fleet design, but there could still be benefits to buying them in FY22, experts say.

Bryan Clark, a senior fellow at the Hudson Institute and the lead on one of three studies that contributed to Esper’s Future Naval Force Study effort last year, said the Navy could have used the FY22 request as a chance to buy ships earlier than planned.

Clark argued the Navy would then be ready to begin or accelerate the production of frigates, light amphibs, unmanned surface and undersea vessels, and the next-generation logistics ship in the next two to three years. In other words, FY22 would see the purchase of a few ships ahead of schedule, creating more decision space for FY23 when the more transformational programs might be ready for acquisition.

For example, the second destroyer that was cut from the budget is to eventually be purchased, and if the Navy buys it in FY22, there’s an added bonus of avoiding a financial penalty for breaking the contract with either Ingalls Shipbuilding or Bath Iron Works.

Buying the amphibious assault ship, or LHA, in FY22 instead of waiting until the original FY23 acquisition date would similarly come with the added benefit of fielding a new ship a year early to a fleet that’s hurting from the loss of Bonhomme Richard in a July 2020 fire.

“You’re going to buy that LHA anyway, and why not do it now when you’ve got a shipbuilding plan that is pretty light? Move up the LHA-9 and add that destroyer back in because the idea would be, next year and in the following years, you’re going to now have these new classes of ships coming in, and you may want to rebalance to buy fewer of these older design ships when you’re starting to buy those new ships,” Clark said. “So when the light amphibious warship, the frigates, the [unmanned] surface vessels, the next-generation logistics ship — when they’re all ready to go into serial production in about three years when the engineering and design work is done, it would be nice to have made these investments in destroyers and amphibs such that ... maybe you do go to a situation where you sometimes only buy one destroyer per year because you’ve got your frigates being bought also.

“Forward-load the things that we can build today, so that maybe on the back end we’re going to buy fewer of those and then buy more of these new classes of ships.”

Clark also said the Trump administration’s plan to buy two expeditionary fast transports in FY22 isn’t a bad idea because they support distributed operations and are inexpensive to build and crew with civilian mariners. With such an investment, the Navy would keep shipbuilder Austal viable until it lands its next major shipbuilding program: the frigate, the light amphibious warship or the offshore patrol cutter for the Coast Guard.

The budget request also misses a chance for the Navy to invest in the sensors and payloads needed for future frigates and unmanned vessels, he said.

“So the unmanned surface vessels in particular are going to depend on new electromagnetic warfare systems, new sensors, and they’re going to depend on some new weapons technologies, maybe even directed energy,” he noted. “And I didn’t see in the budget a big increase in investment to field those kinds of technologies.”

Keeping shipbuilders working

Wes Hallman, the senior vice president for strategy and policy at the National Defense Industrial Association, told Defense News that his biggest concern with the budget proposal is its impact on the workforce.

The shipbuilding workforce would need to grow if the Navy is to achieve a larger fleet — even if that’s accomplished with many small and unmanned ships rather than traditionally large warships. Risking layoffs in the short term only makes it harder to have skilled workers available to train new employees later, Hallman noted.

“What you’ll hear from many of our members — and I will say this is not just echoed but actually amplified by the shipbuilding industry — is that when it comes to that skilled workforce, you see an aging workforce and decreasing access to skilled workers. And by cutting back on your shipbuilding, you’re actually exacerbating that problem,” he said.

“One of my big concerns looking at this budget is, as you decrease shipbuilding, these shipbuilders are going to have to adjust their workforce from what they expected to what they will get in contracts over the next year. And it’s going to be that much harder to then ramp back up when we … ramp up in smaller frigates, smaller systems, etc.”

Convincing Congress

Both Hallman and Clark noted the absence of a shipbuilding plan in the FY22 budget submission for the next five years — a projection usually provided under the Future Years Defense Program. The Biden administration said it didn’t have time to show the FYDP for the entire budget. But Clark argued it could have shown the FYDP for shipbuilding specifically and possibly aviation procurement due to the vast funds that goes toward those programs and the capital investments industry will need to prepare for whatever the administration has in mind.

Clark added that the Navy might have been well received on Capitol Hill if it showed the divestment of legacy ships like cruisers would benefit investments in payloads and future ships.

Instead, he said, the Navy’s FY22 request signals it’s more interested in buying near-term operations and maintenance instead of investing in the future.

Without the five-year projection, and with most of the savings from the cruiser divestment paying for FY22 fleet operations, it’s unclear where the Navy plans to find the money for ships and payloads in the next couple of years, Clark said.

The budget request “suggests to me that it’s more of making sure that the Navy’s able to continue to maintain the [operating tempo] it’s had for the last decade, the OPTEMPO that’s been kind of running it into the ground. To me, it seems like the budget is sort of doubling down on the exact same approach that the government took under the last two administrations, which is pay for a lot of ops, divest of old capabilities to free up money for readiness, and to make some investment for the future” without making any major bets on future technologies, he said.

The danger there is twofold: For industry, it means a lack of direction on where companies should invest their money.

To resolve this, Hallman said, the Pentagon should give industry a clear signal on where it wants to go.

“What is the strategy? What does that look like, and how is it going to be resourced? With that clear message, then industry can make the smart investments in both production capital and labor capital,” he said. “If we keep pinging between one priority or another, or an understanding of how we are going to engage in this great power competition, then we just won’t get there.”

The other danger is to national security: It means there is a delay in preparing for a potential fight against an advanced adversary.

“It was not the transformational budget that people had been expecting. It was really more of a budget that tries to sustain the ability to keep up current operations and begin to develop some technologies for the future,” Clark said. “But if you think [former U.S. Indo-Pacific Command chief Adm. Phil] Davidson is right — in that the window to deter China from invading Taiwan is within this decade — I’m not sure what that budget does to move you down the road to being able to better deter China.”

Megan Eckstein is the naval warfare reporter at Defense News. She has covered military news since 2009, with a focus on U.S. Navy and Marine Corps operations, acquisition programs, and budgets. She has reported from four geographic fleets and is happiest when she’s filing stories from a ship. Megan is a University of Maryland alumna.

Share:
More In Budget
‘No way around it’: Facing budget cuts, Army braces to fight for modernization
As budget experts caution the Army will see reduced or — at best — flat budgets in the coming years, service officials are readying for a more difficult look at how to cut costs to preserve modernization momentum. This could mean making harder decisions about the future of its inventory or making cuts to reduce readiness or end strength.