Navy Lowballed Cost of New Ships by Billions

July 27, 2012

The Congressional Budget Office says in a new report that the Navy's estimate for building new warships over the next 30 years is tens of billions of dollars lower than it should be, raising doubts about the number and type of vessels the government can actually afford. The issue could affect shipyards like General Dynamics NASSCO in San Diego, which builds some Navy ships.

The discrepancy drew quick criticism from Rep. Duncan Hunter, R-Alpine, who has been critical of cost overruns and quality issues on the new littoral combat ships (LCS).

Joe Kasper, a spokesman for Hunter, said, "Given that a blue ribbon bipartisan panel recommended a 346-ship Navy, he’s very concerned about projections for not only a smaller Navy, but a much more expensive Navy. The shipbuilding plan needs to get back to basics, moving away from platforms like LCS — that come at a huge cost and are plagued with problems—and focus on durable, cost-effective platforms that meet mission demands and build our Navy to a sufficient size."

The Navy plans to build a replacement for the San Diego-based amphibious assault ship Peleliu, which is 32 years old. — U.S. Navy The Navy estimated that it would cost $481 billion to build 275 ships from 2012-41. CBO says that the actual cost would be $557 billion, a difference of $76 billion.

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