Navy Shipbuilding and Sustainment

The size and composition of US Navy fleet has been fraught with uncertainly, driven by changing national and Navy priorities, available funding and Congressional misalignment. In this post I explore challenges and thoughts on the Navy’s shipbuilding plan and sustaining the fleet.

Setting a realistic long-term fleet size target has been challenging.

The US Navy recently submitted an update of its 30-year shipbuilding plan to Congress, required as part of the Navy budget submission since 2002. The chart below compares the shipbuilding plan to actual fleet size since 2001. The current plan calls for a gradual increase in ships, getting to 305-326 in the mid-2030s and 318-363 by FY45. This plan replaces the 355-ship plan submitted to congress in 2016. During that time the Navy evaluated different force structure mixes, including unmanned vehicles, and balanced those against budget realities. The plan and the choice to present a range instead of a target raises two questions: What is congress likely to fund, and what can the Navy sustain??

There are at least two significant messages in the chart below. First, the shipbuilding plan represents an aspirational target well above actual fleet size that is not achieved. Second, a range of potential fleet size has been the plan on four occasions, each before was replaced with a point target the following year. The historical fluctuations in the shipbuilding plan compared to the fleet highlight the uncertainty in the number of ships desired and the number that can be afforded and sustained.?

What is Congress likely to fund?

Chief of Naval Operations (CNO) Admiral Mike Gilday has stated that current defense budget options will keep the fleet below 300 ships through 2035. Congress has funded an average of 10 ships per year since 2010, which has resulted in a fleet size consistently below 300 as Cold War era ships reached the end of their service life. The 2022 shipbuilding plan maintains the average of 10 ships per year through 2025, putting any increase in procurements in the hands of the next administration. As such, the $22.9 billion in constant FY2021 dollars that Congress has appropriated, on average, for all Navy shipbuilding activities over the preceding five years is not likely to change.

What can the Navy sustain?

Sustaining the fleet has been a major challenge since at least 2015, when submarines started to be tied up at the pier waiting for shipyard capacity to open so they could begin required depot maintenance. A 300-ship Navy procuring 10 ships a year requires an average service life of 30 years. Most ships the Navy procures are designed for a service life of more than 30 years. If funding for operations and maintenance is not kept in balance with the number of ships, the result is ships that can’t operate because of maintenance issues, which in turn drives pressure for early decommissioning. Both of those results are playing out now. Shipyard maintenance is taking longer and costing more than planned for all ship classes, and the Navy’s budget includes requests for early decommissioning of ships such as LCSs, ESDs and CGs.?

In 2017, Assistant Secretary of the Navy Sean Stackley stated “we’re on an irreversible path to 308 by 2021.”?However, the Navy ended 2021 with 14 ships fewer, at 294 and the fleet is planned to decline over the next five years. Increasing fleet size requires the number of ships being commissioned to be greater than those being decommissioned. It doesn’t make sense for fleet size to increase above current levels until sustainment throughput can support more ships. Recent reports of the shipyard infrastructure program being four times estimated cost and years behind schedule, and ship repair productivity improvement projects failing to deliver, are clear indicators the US Navy is not in position to sustain a larger fleet. Under current conditions, increasing the size of the fleet does not increase the operational capability and the case for more ships becomes unclear.

Fixing the sustainment piece is critical, and there is a model to follow in other industries. We have helped our commercial aviation clients reduce maintenance manhours by 8-16% in subsequent versions of the same aircraft while maintaining the same service life. Managing repair facilities as strategic assets focused on delivered throughput has reduced repair time and uncovered excess capacity without capital investment. Both design for sustainment and strategic shipyard management need to be part of the Navy’s plan. As I started with, having a naval fleet that meets operational needs to maintain our national security is a must. Our Defense maritime industrial base is investing heavily to rebuild capabilities that waned following the Cold War. The Navy, DoD, White House and Congress all support a lethal, modern, diverse fleet. There needs to be continued investment, adaptation of commercial best practices from other industries and government-industry cooperation to ensure that our nation has the ships we need.?