CBO estimates proposed US Navy fleet of 350 ships could cost $25bn per year

8 January 2017 (Last Updated January 8th, 2017 18:30)

US federal agency the Congressional Budget Office (CBO) has estimated that the proposed 350-ship US Navy could cost around $25bn per year or 60% above the historical average.

US federal agency the Congressional Budget Office (CBO) has estimated that the proposed 350-ship US Navy could cost around $25bn per year or 60% above the historical average.

The agency estimated that the average annual cost of executing the US Navy’s 2017 shipbuilding plan, covering the fiscal years 2017 to 2046, would be one-third more than the average amount of funding received by the navy for shipbuilding in recent decades.

The 2017 shipbuilding plan, as submitted by the US Department of Defense (DoD) to Congress in July last year, suggests that approximately $21bn in 2016 dollars will be the average annual cost for the plan over the coming 30 years.

"The navy aims to purchase 254 new ships over the 2017–2046 period."

The US Navy’s 2017 shipbuilding plan focuses on the total inventory of battle force ships, the number and types of vessels the navy would acquire, as well as the funding proposed to implement its plans.

The current plan, which reflects the naval agency’s 2014 force structure assessment, aims to expand the US Navy fleet of Battle Force Ships to 308.

In November 2016, the fleet included 272 battle force ships, which comprised surface combatants, amphibious ships, aircraft carriers, combat logistics ships, submarines and some support ships.

To increase its fleet, the navy aims to purchase 254 new ships over the 2017–2046 period. The 254 new ships will comprise 209 combat ships and 45 combat logistics and support ships.

If US Navy follows its current schedule for retiring ships, the agency would be able to attain its goal of 308 battle force ships under the 2017 plan by 2021, and would also be able to maintain its inventory at that level or higher through 2028.

According to CBO estimates, the total cost for obtaining new vessels in the US Navy’s 2017 plan would be $566bn over the next 30 years, at an average of $18.9bn every year.

However, the navy estimates an average spending of $17.0bn each year, which would add up to $509bn over 30 years.

The US Navy’s cost estimation differs from that of the CBO, as the navy’s shipbuilding plan includes only the costs of new-ship construction.

It excludes other activities funded from the US Navy’s budget account for ship construction, such as refuelling nuclear-powered aircraft carriers or outfitting new ships with several small pieces of equipment after they are constructed and delivered.

According to the CBO, these would add $1.8bn to the navy’s average shipbuilding costs per year under the 2017 shipbuilding plan.