Budget Office Questions Navy Shipbuilding Cost Estimates

July 26, 2012

The U.S. Navy is underestimating the cost of its proposed 30-year shipbuilding program by 19 percent, the non-partisan Congressional Budget Office said in a report.

The Navy submitted a plan to Congress in late March to buy 268 ships during the next three decades at an average annual cost of $16.8 billion for a total of $505 billion, according to the report. If other activities such as refueling nuclear- powered aircraft carriers that typically are funded from the service's shipbuilding accounts are included, the average annual cost is $18.8 billion, the CBO said in the report released yesterday.

"By comparison, using its own models and assumptions, CBO estimates that the cost for new-ship construction under the 2013 plan would average $20.0 billion per year, or a total of $599 billion through 2042," the CBO said. "That figure is 19 percent more than the Navy's estimate. Including the expense of refueling aircraft carriers and the other items raises that average cost to about $22 billion per year -- 37 percent more than what the Navy has spent through its shipbuilding accounts on average during the past 30 years."

In response, a Navy spokeswoman, Lieutenant Courtney Hillson, said, "The Navy welcomes the CBO's review of our shipbuilding estimates, and we will take the time needed to review the CBO report." 

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