Contents

• Introduction
• Constellation (FFG-62) Class Program
• Announced FF(X) Program
• Issue for Congress
Background
• Navy's Force of Small Surface Combatants (SSCs)
• SSCs in General
• SSC Force at End of FY2023
• SSC Force-Level Goal
-Level Goal
• SSC Force at Start of FY2026
• U.S. Navy Frigates in General
• FFG-62 Class Program
• Program Name
• Ship Design and Capabilities
• Procurement Quantities and Schedule
• Procurement Cost
• Acquisition Strategy
• Competition and Contract Award
• Home Port for Initial Ships in Class
• Estimated 36-Month Delay in Delivery of First Ship
• January 2024 Press Report of Delay of at Least One Year
• March 2024 Budget Submission Shows Delay of 15 Months
• April 2024 Navy Announcement of 36-Month Delay
• May 2024 GAO Report
• December 2024 Navy Statement Estimating Mature Design by May 2025
• Issues for Congress
• Estimated 36-Month Delay in Delivery of First Ship
• Potential for Cost Growth, Particularly After First 10 Ships
• CRS and CBO Analyses in 2020 and 2023
• May 2024 GAO Report
• Potential Consequences of Cost Growth
• Potential Oversight Questions
• Whether and When to Introduce a Second Shipyard into Program
• Number of VLS Tubes
• Technical Risk
• May 2024 GAO Report
• June 2024 GAO Report
• January 2024 DOT&E Report
• Press Reports
• Legislative Activity for FY2025
• Summary of Congressional Action on FY2025 Funding Request
• FY2025 National Defense Authorization Act (H.R. 8070/S. 4638/H.R. 5009/P.L. 118-159)
• House
• Senate
• Enacted
• FY2025 DOD Appropriations Act (H.R. 8774/S. 4921/H.R. 1968/P.L. 119-4)
• House
• Senate
• Enacted

Figures

• Figure 1. Oliver Hazard Perry (FFG-7) Class Frigate
• Figure 2. Constellation (FFG-62) Class Frigate
• Figure 3. Constellation (FFG-62) Class Frigate
• Figure 4. Constellation (FFG-62) Class Frigate
• Figure 5. FFG-62 Design Compared to FREMM Design

Tables

• Table 1. Programmed and Actual Annual FFG-62 Procurement Quantities
• Table 2. Congressional Action on FY2025 Procurement Funding Request

Appendixes

• Appendix. Guaranty vs. Warranty in Construction Contract

Introduction

This report provides background information and discusses potential issues for Congress regarding the Navy's Constellation (FFG-62) class frigate program, a program to procure a new class of at least 20 guided-missile frigates (FFGs). The Navy began procuring FFG-62 class ships in FY2020, and a total of six have been procured through FY2024. The Navy's proposed FY2025 budget requests $1,170.4 million (i.e., about $1.2 billion) for the procurement of the seventh ship in the program. FFG-62s are being built by Fincantieri/Marinette Marine (F/MM) of Marinette, WI.

The FFG-62 program presents several potential oversight issues for Congress. Congress's decisions on the program could affect Navy capabilities and funding requirementsDelay in Delivery of First Ship

Issues for Congress Prior to Navy's November 2025 Announcement

Navy's Desired Approach for Restructuring Frigate Acquisition

Overview

Navy News Release of December 19, 2025

National Security Cutter (NSC) Design

Naval Variants of NSC Design Proposed in Past Years by HII/Ingalls

FF(X) Frigate

Issues for Congress Regarding Navy's Desired Approach for Frigate Acquisition

Adequacy of Information Provided to Congress

General Approach Regarding Frigate Acquisition

Overview of Four General Approaches

Potential Oversight Questions for Congress

New Frigate Design

Potential Design Options

Potential Oversight Questions for Congress

Sole-Source or Competitive Contract Award for First Ship

Potential Participation of Foreign Shipyards

Unexpended FFG-62 Procurement Funds

Near-Term Support for F/MM

Summary

Constellation (FFG-62) class program. The Navy began procuring Constellation (FFG-62) class frigates in FY2020. Prior to November 2025, Navy plans called for procuring a total of at least 20. Six were procured through FY2025, including one per year in FY2020-FY2023, two in FY2024, and none in FY2025. The Navy's proposed FY2026 budget did not request the procurement of any additional FFG-62s.

FFG-62s are being built by Fincantieri/Marinette Marine (F/MM) of Marinette, WI. The FFG-62 design is derived from the design of an Italian-French frigate. Subsequent to the Navy's April 2020 contract award to F/MM for designing and building up to 10 FFG-62s, the program fell years behind schedule due in large part to delays in completing the FFG-62 design. In June 2025, Secretary of Defense Pete Hegseth (who is using "Secretary of War" as a "secondary title" under Executive Order 14347 dated September 5, 2025) indicated that the FFG-62 program was being reviewed as one of several "difficult decisions" to be made by the Department of Defense (DOD) (which is "using a secondary Department of War designation" under Executive Order 14347) during a review of its acquisition programs.

Announced FF(X) program. In a series of announcements from November 25 to December 19, 2025, the Navy stated that it wants to restructure its frigate acquisition effort by (1) truncating the FFG-62 program to no more than two ships and (2) initiating a new program to procure a different class Navy frigates, called FF(X)s, whose design would be based on that of the National Security Cutter (NSC), a frigate-like ship that has been built for the Coast Guard by Huntington Ingalls Industries/Ingalls Shipbuilding (HII/Ingalls) of Pascagoula, MS.

Under the Navy's desired new approach, the third through sixth FFG-62s (which have not begun construction) would be cancelled; the first two FFG-62s (construction of which is underway) would remain under review; the first FF(X) would be awarded to HII/Ingalls on a sole-source basis and be launched (i.e., put into the water for the final stages of its construction) by 2028; and one or more additional U.S. shipyards would later be brought into the FF(X) program to expand the FF(X) production rate and compete with HII/Ingalls for future ships in the program.

In announcing its desired new approach for acquiring frigates, Secretary of the Navy John Phelan stated that "the Constellation-class frigate was canceled because, candidly, it didn't make sense anymore to build it. It was 80% of the cost of a [larger DDG-51 class] destroyer and 60% of the capability. You might as well build destroyers." The continuation, for now at least, of construction work on the first two FFG-62s reportedly is intended to support F/MM in the near term, while policymakers assess how F/MM's shipbuilding capability could be used over the longer run. As of November 25, 2025, the first ship in the FFG-62 program was reportedly about 12% complete.

An issue for Congress is whether to approve, reject, or modify the Navy's desired approach for restructuring its frigate acquisition effort. Decisions that Congress makes on this issue could substantially affect U.S. Navy capabilities and funding requirements, and the U.S. shipbuilding industrial base.

Introduction

This report provides background information and discusses potential oversight issues for Congress regarding the Navy's effort to acquire new frigates, including Constellation (FFG-62) class frigates and a type of frigate proposed by the Navy called the FF(X).

Constellation (FFG-62) Class Program

The Navy began procuring Constellation (FFG-62) class frigates in FY2020. Prior to November 2025, Navy plans called for procuring a total of at least 20. Six were procured through FY2025, including one per year in FY2020-FY2023, two in FY2024, and none in FY2025. The Navy's proposed FY2026 budget did not request the procurement of any additional FFG-62s.

FFG-62s are being built by Fincantieri/Marinette Marine (F/MM) of Marinette, WI. The FFG-62 design is derived from the design of an Italian-French frigate. Subsequent to the Navy's April 2020 contract award to F/MM for designing and building FFG-62s, the program fell years behind schedule due in large part to delays in completing the FFG-62 design. In June 2025, Secretary of Defense Pete Hegseth (who is using "Secretary of War" as a "secondary title" under Executive Order 14347 dated September 5, 2025) indicated that the FFG-62 program was being reviewed as one of several "difficult decisions" to be made by the Department of Defense (DOD) (which is "using a secondary Department of War designation" under Executive Order 14347) during a review of its acquisition programs.¹

Announced FF(X) Program

In a series of announcements from November 25 to December 19, 2025, the Navy stated that it wants to restructure its frigate acquisition effort by (1) truncating the FFG-62 program to no more than two ships and (2) initiating a new program to procure a different class Navy frigates, called FF(X)s, whose design would be based on that of the National Security Cutter (NSC), a frigate-like ship that has been built for the Coast Guard by Huntington Ingalls Industries/Ingalls Shipbuilding (HII/Ingalls) of Pascagoula, MS.

Under the Navy's desired new approach, the third through sixth FFG-62s (which have not begun construction) would be cancelled; the first two FFG-62s (construction of which is underway) would remain under review; the first FF(X) would be awarded to HII/Ingalls on a sole-source basis and be launched (i.e., put into the water for the final stages of its construction) by 2028; and one or more additional U.S. shipyards would later be brought into the FF(X) program to expand the FF(X) production rate and compete with HII/Ingalls for future ships in the program.²

In announcing its desired new approach for acquiring frigates, Secretary of the Navy John Phelan stated that "the Constellation-class frigate was canceled because, candidly, it didn't make sense anymore to build it. It was 80% of the cost of a [larger DDG-51 class] destroyer³ and 60% of the capability. You might as well build destroyers." ⁴ The continuation, for now at least, of construction work on the first two FFG-62s reportedly is intended to support F/MM in the near term, while policymakers assess how F/MM's shipbuilding capability could be used over the longer run. ⁵ As of November 25, 2025, the first ship in the FFG-62 program was reportedly about 12% complete.⁶

Issue for Congress An issue for Congress is whether to approve, reject, or modify the Navy's desired approach for restructuring its frigate acquisition effort. Decisions that Congress makes on this issue could substantially affect U.S. Navy capabilities and funding requirements, and the U.S. shipbuilding industrial base.

Background

Navy's Force of Small Surface Combatants (SSCs)

SSCs in General

In discussing its force-level goals and 30-year shipbuilding plans, the Navy organizes its surface combatants into large surface combatants (LSCs), meaning the Navy's cruisers and destroyers, and small surface combatants (SSCs), meaning the Navy's frigates, Littoral Combat Ships (LCSs), mine warfare ships, and patrol craft.¹7 SSCs are smaller, less capable in some respects, and individually less expensive to procure, operate, and support than LSCs. SSCs can operate in conjunction with LSCs and other Navy ships, particularly in higher-threat operating environments, or independently, particularly in lower-threat operating environments.

SSC Force at End of FY2023

The Navy's force of SSCs at the end of FY2023 consisted of 31 ships, including no frigates, 23 LCSs, and 8 mine warfare ships.

SSC Force-Level Goal

The Navy's FY2025 30-year (FY2025-FY2054) shipbuilding plan calls for a future Navy of 381 manned battle force ships, including 73 SSCs, of which 15 are to be LCSs capable of conducting mine warfare operations, plus 58 "FFG / FFG Flt II" ships, meaning 58 frigates and frigates built to a modified (i.e., Flight II) design.²8 Under its FY2025 budget submission, the Navy wantswanted to maintain a force of 25 (rather than 15) LCSs. This could imply a total of 48 (rather than 58) frigates.

U.S. Navy Frigates in General

In contrast to cruisers and destroyers, which are designed to operate in higher-threat areas, frigates are generally intended to operate more in lower-threat areasThe Navy reportedly has prepared a new ship force-level objective, referred to as the Golden Fleet, to succeed the 381-ship objective. The composition of this new force-level objective, including the number of frigates and other SSCs, had not been announced as of late December 2025.⁹ SSC Force at Start of FY2026

The Navy's force of SSCs at the start of FY26 consisted of 32 ships, including no frigates, 28 LCSs, and 4 mine warfare ships. The Navy has been retiring its mine warfare ships as LCSs (some of which are to serve as replacement mine countermeasures ships) have entered service. The figure of 32 ships equates to about 44% of the 73-ship force-level goal for SSCs discussed in the previous section.

U.S. Navy Frigates in General As mentioned earlier SSCs (including frigates) can operate in conjunction with LSCs (i.e., cruisers and destroyers), particularly in higher-threat operating environments, or independently, particularly in lower-threat operating environments. U.S. Navy frigates perform many of the same peacetime and wartime missions as U.S. Navy cruisers and destroyers, but since frigates are intended to do so in lower-threat areas, they are equipped with fewer weapons, less-capable radars and other systems, and less engineering redundancy and survivability than cruisers and destroyers.³

10

The most recent class of frigates operated by the Navy was the Oliver Hazard Perry (FFG-7) class (Figure 1). A total of 51 FFG-7s were procured between FY1973 and FY1984. The ships were built by three shipyards,⁴11 entered service between 1977 and 1989, and were decommissioned between 1994 and 2015. In their final configuration, FFG-7s were about 455 feet long and had full load displacements of roughly 3,900 tons to 4,100 tons. (By comparison, the Navy's Arleigh Burke [DDG-51] class destroyers are about 510 feet long and have full load displacements of roughly 9,700 tons.⁵12) Following their decommissioning, a number of FFG-7s, like certain other decommissioned U.S. Navy ships, have beenwere transferred to the navies of U.S. allied and partner countries.

Figure 1. Oliver Hazard Perry (FFG-7) Class Frigate Source: Photograph accompanying Dave Werner, "Fighting Forward: Last Oliver Perry Class Frigate Deployment," Navy Live, January 5, 2015, accessed September 21, 2017, at http://navylive.dodlive.mil/2015/01/05/fighting-forward-last-oliver-perry-class-frigate-deployment/. FFG-62 Class Program

Program Name

The FFG-62 program was previouslyearlier known as the FFG(X) program.⁶13 On October 7, 2020, the Navy announced that the first ship in the class, FFG-62,FFG-62 would be named Constellation, in honor of the first U.S. Navy ships authorized by Congress in 1794—the six heavy frigates United States, Constellation, Constitution, Chesapeake, Congress, and President. FFG(X)s henceforth became known as Constellation (FFG-62) class ships.

Figure 1. Oliver Hazard Perry (FFG-7) Class Frigate

Source: Photograph accompanying Dave Werner, "Fighting Forward: Last Oliver Perry Class Frigate Deployment," Navy Live, January 5, 2015, accessed September 21, 2017, at http://navylive.dodlive.mil/2015/01/05/fighting-forward-last-oliver-perry-class-frigate-deployment/.

Ship Design and Capabilities

FFG-62s (Figure 2, Figure 3, and Figure 4) are Ship Design and Capabilities FFG-62s (Figure 2) are intended to be multimission small surface combatants capable of conducting anti-air warfare (AAW), anti-surface warfare (ASuW), antisubmarine warfare (ASW), and electromagnetic warfare (EMW) operations. They are to be capable of operating in both blue water (i.e., mid-ocean) and littoral (i.e., near-shore) areas, and capable of operating either independently (when that is appropriate for their assigned missions) or as part of larger Navy formations.

Figure 2. Constellation (FFG-62) Class Frigate

Artist's rendering of F/MM design

Source: Illustration accompanying Alistair MacDonald and Gordon Lubold, "The Warship That Shows Why the U.S. Navy Is Falling Behind China," Wall Street Journal, March 20, 2025. The caption to the photograph credits the photograph to Fincantieri/Marinette Marine. The FFG-62 design is based on the design of the Italian-French FREMM (Fregata Europea Multi-Missione) frigate, a ship that has been built in two variants, one for the Italian navy and one for the French navy. The FREMM design, in other words, served as what is known as the "parent" design for the FFG-62 design. The use of a parent design for the FFG-62 program is discussed further in the section below on the FFG-62 program's acquisition strategy.

Procurement Quantities and Schedule

Total Procurement Quantity

The Navy wants

At the time of the FFG-62 contract award (see below), the FFG-62 was described as having an estimated full load displacement of about 7,300 or 7,400 tons. As design work on the FFG-62 continued, the ship's estimated full load displacement grew by several hundred tons, to a figure much closer to 8,000 tons. (As noted earlier, by comparison, the Navy's newest DDG-51 class destroyers have full load displacements of roughly 9,700 tons.)

Procurement Quantities and Procurement Cost

Total Procurement Quantity

Until November 2025, the Navy wanted to procure at least 20 FFG-62s. Navy budget documents, including the FY2025 budget-justification book for Navy's shipbuilding account, describedescribed the FFG-62 program as a 20-ship program. As discussed earlier, the Navy's FY2025 30-year (FY2025-FY2054) shipbuilding plan calls for a future Navy of 381 manned battle force ships, including 58 "FFG / FFG Flt II" ships, meaning 58 frigates and frigates built to a modified (i.e., Flight II) design.⁷14 The reference to a Flight II design might be interpreted as referring to a modified (i.e., Flight II) version of the FFG-62 design. Such an interpretation would imply a combination of 20 (or more) FFG-62s built to the original (i.e., Flight I) FFG-62 design plus 38 (or fewer) additional FFG-62s built to a modified (i.e., Flight II) FFG-62 design. As also mentioneddiscussed earlier, under its FY2025 budget submission, the Navy wants to maintain a force of 25 (rather than 15) LCSs. This could imply a total of 48 (rather than 58) frigates.

Annual Procurement Quantities

Table 1 shows programmed and actual annual procurement quantities for the FFG-62 program.

Figure 2. Constellation (FFG-62) Class Frigate Artist's rendering of F/MM design

Source: Illustration accompanying Alistair MacDonald and Gordon Lubold, "The Warship That Shows Why the U.S. Navy Is Falling Behind China," Wall Street Journal, March 20, 2025. The caption to the photograph credits the photograph to Fincantieri/Marinette Marine.

Procurement Cost

FFG-62s generally have budgeted procurement costs of roughly $1.1 billion to $1.2 billion each. The lead ship in the program has a higher estimated procurement cost ($1,386.7 million, or about $1.4 billion) than the follow-on ships because it is at the top of the production learning curve for the class, and because the lead ship's procurement cost incorporates much of the detailed design/nonrecurring engineering (DD/NRE) costs for the class. (It is a traditional Navy budgeting practice to attach most or all of the DD/NRE costs for a new ship class to the procurement cost of the lead ship in the class.)

Figure 3. Constellation (FFG-62) Class Frigate Computer rendering of F/MM design as of 2020

Source: Fincantieri/Marinette Marine, screen capture from video entitled "Constellation Class Frigate 360° View," posted at https://futurefrigate.com/, accessed December 8, 2020.

Figure 4. Constellation (FFG-62) Class Frigate Computer rendering of F/MM design as of 2022

Source: U.S. Navy rendering shown on slide 2 of in Navy briefing entitled "Guided Missile Frigate (FFG 62) Update, Sea Air Space [Exposition]," Captain Kevin Smith, April 5, 2022.

As also mentioned earlier, The Navy reportedly has prepared a new ship force-level objective, referred to as the Golden Fleet, to succeed the 381-ship objective. The composition of this new force-level objective, including the number of frigates and other SSCs, had not been announced as of late December 2025. Annual Procurement QuantitiesTable 1 shows programmed annual procurement quantities for the FFG-62 program under the Navy's budget submissions for FY2020 through FY2026, along with actual procurement quantities for FY2020 through FY2025.

Acquisition Strategy

Number of Builders

The Navy's baseline plan for the FFG-62 program envisaged using a single builder at any one time to build FFG-62s, but Navy officials have also spoken about the option of bringing a second shipyard into the program at some point, particularly if annual procurement rates for FFG-62s rise above two ships per year. The Navy's FY2025 30-year (FY2025-FY2054) shipbuilding plan states (emphasis added)

The Navy is mindful that as fleet composition evolves to meet competition and combat requirements, the Navy must examine alternative opportunities within the industrial base. Alternative opportunities include adjusting procurement profiles ensuring stability in shipyard workload to prevent "boom and bust" periods of shipyard activity, and ensuring ample competitive opportunities for current and future platforms (i.e., AS(X), LSM, T-AOL, T-ARC), and a potential FFG 62 second source for construction once the design and technical data package is mature and risks are reduced and validated. These opportunities allow the current industrial base to adapt while maintaining the capacity to deliver the capability the nation needs.⁸

On November 15, 2024, the Navy released a Sources Sought Request for Information (RFI) "to identify qualified U.S. surface combatant Shipbuilders as sources for future design and/or follow-on construction of the Constellation Class Frigate," inviting "all U.S. surface combatant shipbuilding sources who are interested in the FFG 62 Class ships, to submit written information sufficient to demonstrate their ability to fulfill the Government requirements." Responses to the RFI are due by November 22, 2024.⁹

In December 2024, a Navy official reportedly stated that having a mature design for the FFG-62 program—something that the Navy reportedly anticipates having by May 2025—"will form the basis of a potential follow-on contract competition [i.e., a potential competition to select a second shipyard] anticipated in" FY2027.¹⁰

Procurement Cost Under the Navy's FY2026 budget submission, FFG-62s generally had budgeted procurement costs of roughly $1.2 billion to $1.3 billion each. The lead ship in the program had a higher estimated procurement cost ($1,499.3 million, or about $1.5 billion) than the follow-on ships because it is at the top of the production learning curve for the class, and because the lead ship's procurement cost incorporates much of the detailed design/nonrecurring engineering (DD/NRE) costs for the class. (It is a traditional Navy budgeting practice to attach most or all of the DD/NRE costs for a new ship class to the procurement cost of the lead ship in the class.) As discussed in Appendix A, one potential oversight issue for Congress for the FFG-62 program has been the potential for cost growth (i.e., the potential for FFG-62 procurement costs to increase above figures shown in the Navy's FY2026 budget submission). Acquisition Strategy Number of Builders

The Navy's baseline plan for the FFG-62 program envisaged using a single builder at any one time to build FFG-62s, but Navy officials also spoke about the option of bringing a second shipyard into the program at some point, particularly if annual procurement rates for FFG-62s rose above two ships per year.¹⁵

Parent-Design Approach

As noted earlier, FFG-62s are to be built to a modified version of an existing ship design—an approach, called the parent-design approach, that in theory can reduce design time, design cost, and cost, schedule, and technical risk in building the ship. Industry teams competing for the FFG-62 were required to show that their bid was based on a parent design. The Coast Guard and the Navy are currently using the parent-design approach for the Coast Guard's Polar Security Cutter (PSC) (i.e., heavy i.e., polar icebreaker) program¹⁶ and the Navy's medium landing ship (LSM) program.¹⁷.¹¹ The parent-design approach has also been used in the past for other Navy and Coast Guard ships, including Navy mine warfare ships¹²18 and the Coast Guard's new Fast Response Cutters (FRCs).¹³

19

Some observers have questioned the value of using parent designs in military shipbuilding programs. A 2015 journal article, for example, states

The U.S. Navy has experimented with many approaches to design and build its ships. Using an existing design as the "parent" design, also referred to as "modified-repeat" design, is on its face an attractive option. Many acquisition executives, program managers and some ship design engineers believe that a design based on a parent has fewer technical risks than a new "clean sheet of paper" design and therefore the time and cost to design and build it will be reduced. They assume early in the ship acquisition program that "the design is mature" and because of that fewer problems will be encountered in completing the design and savings will thus be accrued. Yet, a number of naval ships based on a parent design have in fact experienced unanticipated cost and schedule growth during construction as well as technical problems during their in-service life. The authors will examine some of these ship designs which were based on an existing design and/or prototypes and highlight the fallacies of such beliefs and assumptions.¹⁴

20

Figure 53 shows a U.S. Navy briefing slide summarizing what the U.S. Navy says are the "primary differences between the FFG 62 Class [design] and the FREMM Parent design." The Navy states that the design differences "were proposed by [the shipbuilding firm] Fincantieri and incorporated [into Fincantieri's proposed design for the FFG-62] prior to [the Navy's] contract award [for the FFG-62 program to Fincantieri]."¹⁵

Figure 5. FFG-62 Design Compared to FREMM Design

Source: Navy briefing slide provided to CRS and Congressional Budget Office (CBO) by Navy Office of Legislative Affairs, August 27, 2021, with accompanying Navy information paper dated August 18, 2021.

21 An August 4, 2021, press report states

The Navy has chosen to elongate and widen the hull of its next-generation Constellation-class frigate relative to the [FREMM] parent design, but the officer overseeing its production says the internal layout will largely remain the same.

"The Italians did a very good job in the design of the internal spaces, and the flow of a lot of those spaces," Capt. Kevin Smith, program manager for the Constellation class, told attendees at the Sea Air Space exposition on Monday [August 2]. "You could say we bought a bigger house, [but] from a modeling and simulation perspective, it's exactly the same."…

While some changes are to be expected to meet the Navy's needs, enlarging the hullform itself has the potential to change where components in the ship must be placed, as well as the overall cost.

Asked about how possible changes in the ship's hull could affect the internal design, Smith said Fincantieri Marinette Marine, the Constellation's prime contractor, worked with Naval Surface Warfare Center Carderock to develop a scale model of the ship and that most elements will stay true to the parent design. He cited the bridge and propulsion plant as areas where the Navy has not made any significant changes to the layout.¹⁶

22

Figure 3. FFG-62 Design Compared to FREMM Design

Source: Navy briefing slide provided to CRS and Congressional Budget Office (CBO) by Navy Office of Legislative Affairs, August 27, 2021, with accompanying Navy information paper dated August 18, 2021.

An April 2, 2024, press report states: "At one point the Constellation design shared about 85 percent commonality with the original FREMM design, but the alterations have brought that commonality down to under 15 percent, a person familiar with the changes told USNI News."¹⁷23 If the FFG-62 design shares less than 15% commonality with the FREMM design, then some observers might characterize the FFG-62 program as having moved over time toward what might be termed a parent design in name only (PDINO) design approach.¹⁸

24

A Navy official commenting on the FFG-62 program in February 2025 reportedly stated that "[it] turns out modifying someone else's design is a lot harder than it seems," and that "sometimes, you're just better off designing a new ship."¹⁹25 Another Navy official, also commenting on the FFG-62 program in February 2025, reportedly stated that "I'll be brutally honest, I don't think people truly understood what it meant to adapt a parent design to Navy requirements."²⁰

26

No New Technologies or Systems

As an additionala measure for reducing cost, schedule, and technical risk in the FFG-62 program, the Navy envisagesenvisaged developing no new technologies or systems for FFG-62s—the ships are to use systems and technologies that already exist or are already being developed for use in other programs.

FY2021 Legislation Regarding Land-Based Test Program for Engineering Plant

Section 125 of the FY2021 National Defense Authorization Act (H.R. 6395/P.L. 116-283 of January 1, 2021) requires the Navy to commence, prior to the delivery of the first FFG-62, a land-based test program for the FFG-62 engineering plant (i.e., its propulsion system and related machinery). The provision specifies how the test program is to be conducted and requires the Navy to complete the test program not later than the date on which the first FFG-62 is scheduled to be available for tasking by operational military commanders.²¹

Legislation Regarding Legislation Regarding U.S. Content Requirements for FFG-62 Components

Section 856 of the FY2020 National Defense Authorization Act (S. 1790/P.L. 116-92 of December 20, 2019) states

SEC. 856. APPLICATION OF LIMITATION ON PROCUREMENT OF GOODS OTHER THAN UNITED STATES GOODS TO THE FFG–FRIGATE PROGRAM.

Notwithstanding any other provision of law, amounts authorized to carry out the FFG–Frigate Program may be used to award a new contract that provides for the acquisition of the following components regardless of whether those components are manufactured in the United States:

(1) Auxiliary equipment (including pumps) for shipboard services.

(2) Propulsion equipment (including engines, reduction gears, and propellers).

(3) Shipboard cranes.

(4) Spreaders for shipboard cranes.

Section 8097(b) of the FY2024 DOD Appropriations Act (Division A of H.R. 2882/P.L. 118-47 of March 23, 2024) states

SEC. 8097….

(b) None of the funds provided in this Act for the FFG(X) Frigate program shall be used to award a new contract that provides for the acquisition of the following components unless those components are manufactured in the United States: Air circuit breakers; gyrocompasses; electronic navigation chart systems; steering controls; pumps; propulsion and machinery control systems; totally enclosed lifeboats; auxiliary equipment pumps; shipboard cranes; auxiliary chill water systems; and propulsion propellers: Provided, That the Secretary of the Navy shall incorporate United States manufactured propulsion engines and propulsion reduction gears into the FFG(X) Frigate program beginning not later than with the eleventh ship of the program.

Provisions similar to Section 8097(b) have been included in annual DOD appropriations acts since the FY2020 DOD appropriations act.

Competition and Contract Award

Four industry teams competed for the FFG-62 program. On April 30, 2020, the Navy announced that it had awarded the FFG-62 contract to the team led by Fincantieri/Marinette Marine (F/MM) of Marinette, WI. F/MM was awarded a fixed-price incentive (firm target) contract for Detail Design and Construction (DD&C) for up to 10 ships in the programFFG-62s—the lead ship plus nine option ships. The other three industry teams reportedly competing for the program were led by Austal USA of Mobile, AL; General Dynamics/Bath Iron Works (GD/BIW) of Bath, ME; and Huntington Ingalls Industries/Ingalls Shipbuilding (HII/Ingalls) of Pascagoula, MS.

Under the DD&C contract, the Navy has the option of recompeting the program at any point prior to the 10^th ship. The Navy also has the option of seeking to convert the DD&C at some point into a multiyear contract known as a block buy contract to procure the ships.²²

Home Port for Initial Ships in Class

A June 2, 2021, Navy press release stated

Naval Station Everett²³ was designated as the Navy's future homeport for the initial ships of the next generation of guided missile frigates, a new and improved class of small surface combatant ships.

As an important homeport for Navy ships, Naval Station Everett will continue to support the fleet, its service members, and their families.

Everett will serve as As noted earlier, industry teams competing for the FFG-62 were required to show that their bid was based on a parent design. The team led by F/MM based its bid on the Italian-French FREMM frigate. The team led by Austal based its bid on Independence (LCS-2) class Littoral Combat (LCS) design (a design that Austal was building for the U.S. Navy).²⁷ The team led by GD/BIW based its bid on the Spanish Navantia F100 frigate design. At the time of the competition, the team led by HII/Ingalls did not publicly disclose its parent design.²⁸ December 2025 press reports stated that HII now acknowledges that its parent design was the NSC design.²⁹ Home Port for Initial Ships in Class A June 2, 2021, Navy press release stated that "Naval Station Everett³⁰ was designated as the Navy's future homeport for the initial ships" in the FFG-62 program, serving as "the homeport for 12 Constellation-class Frigates, with a future Navy homeport decision planned for the following ships.²⁴

Estimated 36-Month "³¹ Delay in Delivery of First Ship Subsequent to the April 2020 contract award, the FFG-62 program fell years behind schedule due in large part to delays in completing the ship's design. The Navy's submission for the FY2020 budget—the budget that requested the procurement of the first ship in the program—estimated that the first ship would be delivered in July 2026. On April 2, 2024, as part of an announcement of significant delays to several NavyDelay in Delivery of First Ship

January 2024 Press Report of Delay of at Least One Year

In January 2024, it was reported that the delivery of the first ship in the program would be delayed by at least one year, primarily due to shortages of workers at F/MM.²⁵

March 2024 Budget Submission Shows Delay of 15 Months

The Navy's FY2025 budget submission, which was submitted to Congress on March 11, 2024, showed the lead ship's scheduled delivery date as December 2027—15 months later than the September 2026 scheduled delivery date shown in the Navy's FY2024 budget submission. The FY2025 budget submission states that delivery dates for the second and subsequent ships in the program are under review.²⁶

April 2024 Navy Announcement of 36-Month Delay

On April 2, 2024, as part of an announcement of significant delays to several of its shipbuilding programs caused by shipbuilder workforce challenges, supply chain issues, and other causes, the Navy announced that the estimated delay in the delivery of the first FFG-62 had grown to 36 months. In the Navy's budget submission for FY2020—the submission in which the Navy requested, and Congress funded, the procurement of the first FFG-62—the Navy estimated that the first FFG-62 would have a 72-month period from contract award to delivery, and within that 72-month period, a 48-month period from construction start to delivery. A 36-month delay in the delivery of the first FFG-62 would equate to a 50% addition to the 72-month period and a 75% addition to the 48-month period.

An April 2, 2024, press report about the Navy's announcement stated

During a media roundtable with reporters on Tuesday [April 2], Naval Sea Systems Command chief Vice Adm. James Downey told reporters that the detail design for the frigate—which is based on Fincantieri Marinette Marine's FREMM parent design that's in service with the Italian and French navies—still isn't complete. The goal is to finalize the detail design this year and the service and contractors are nearing 80 percent completion, Downey said.²⁷

"Some of the mix of the contracting roles have changed between prime and sub," Downey told reporters. "And finishing the design has been critical for us. That's why we've co-located the design force from Fincantieri and their sub with the government in a collaboration center up there to finish."

In August of 2022, when the Navy green lit Fincantieri to begin building the first frigate, Rear Adm. Casey Moton, then the program executive officer for unmanned and small combatants, said the detail design was just over 80 percent complete.

Asked what's driving the delays at Marinette, Downey cited the yard's increased workload, difficulty hiring and keeping talent, and the varying stages of the three programs currently under construction there. The yard is finishing the end of the Littoral Combat Ship line, while also building Saudi Arabia's multi-mission surface combatant and the U.S. Navy's new frigate.

Downey said the attrition at Marinette is "significantly different" with the yard building those three programs compared to when it was only building the LCS….

To tackle the workforce shortfalls, the Navy plans to give Marinette $50 million for the surface combatant industrial base.²⁸ The yard is using those funds to incentivize both its blue and white collar workforce with bonuses to stay at Marinette.²⁹

An April 12, 2024, press report stated

The shipyard producing the US Navy's new frigate has been hobbled by a failure to "achieve engineering and skilled workforce levels" for the medium-sized vessel, according to a service document on the project that's now forecast to run as much as three years late.

Fincantieri Marinette Marine has experienced "unprecedented poor workforce retention—high attrition rates," according to an unreleased Navy briefing slide prepared for senior service and Pentagon officials late last month. It spelled out the shipyard's woes in more detail than the publicly released findings of top Navy programs released last week.

The company will require more than 1,600 skilled workers next year, up from more than 900 today, according to the slide….

Navy Secretary Carlos Del Toro acknowledged the frigate builder's retention issue in a brief interview after congressional testimony on Wednesday [April 10]. He said the service has provided incentive fees for workers to stay on the job—$5,000 if they stay a first year and $5,000 "if they stay throughout construction of the first ship," he said. "We've been trying to work with industry to get them to a better place," he said….

Vice Admiral James Downey, head of Naval Sea Systems Command, told reporters last week that in addition to workforce hiring and retention issues, the frigate delay stemmed in part from the ship's incomplete design and to Fincantieri working on three programs simultaneously at its Wisconsin yard, including a vessel for Saudi Arabia.

Fincantieri spokesman Eric Dent said in a statement that "we understand" the 36-month delay is a worst-case scenario.

"We know we are on the clock, so challenge accepted," he said. "We need to improve on a range of workforce issues for sure, and we need a Navy-approved design. We will get there, but we cannot do it alone."³⁰

May 2024 GAO Report

A May 2024 Government Accountability Office (GAO) report on the FFG-62 program stated

The Navy's FY2026 budget estimated that the ship would be delivered in April 2029, a delay of 33 months from the July 2026 date shown in the FY2020 budget submission. As mentioned earlier, as of November 2025, the first ship in the program reportedly was about 12% complete.

A June 2025 Government Accountability Office (GAO) report—the 2025 edition of an annual GAO report on selected DOD acquisition programs—stated the following regarding schedule delay and other aspects of the FFG-62 program:

Program Performance

Since our last assessment, the program continued to face challenges completing its functional design, which is needed to demonstrate design stability. More than 2 years after beginning lead ship construction, this persistent lack of design stability stalled construction of the lead ship and poses the same risk to initial follow-on ships. The Navy currently plans to deliver the lead frigate in April 2029—3 years later than the original contracted delivery date. The Navy and shipbuilder continue to revise basic design documents, including the ship's general arrangement drawings—the design drawings that all other design aspects are based on—and structural components of the ship. This approach is inconsistent with shipbuilding leading practices, which call for completion of basic and functional design activities prior to construction start.

Further, in response to a recommendation we made in our May 2024 report, the program restructured its functional design metrics to more closely align with actual design progress. As a result, the program concluded that its functional design progress is significantly less than the 92 percent complete it reported in August 2023. As of December 2024, the program reported that the functional design was 70 percent complete, as measured with the restructured design metrics. Although program officials expect to achieve a stable basic and functional design by late spring 2025, the program has yet to achieve its planned rate of design progress to meet this goal.

The frigate design is further complicated by unanticipated weight growth. In October 2024, the Navy reported 759 metric tons of weight growth from initial estimates—nearly a 13 percent increase—due in part to the underestimation of applying Navy technical requirements to a foreign ship design. Navy personnel are working with the shipbuilder to reduce the ship's weight, but weight growth has only become more pronounced over the last year as the program further developed the frigate design. We previously reported that unplanned weight growth during ship construction can compromise ship capabilities, as the fleet seeks to alter and improve initial capabilities over the planned decades-long service life of the ship. Such alterations may leave frigates less combat capable, limit the ability to add capabilities to address evolving threats, and reduce planned service lives.

Leading Product Development Practices

In May 2024, we reported that the frigate program employed a traditional, linear development approach to acquisition, in contrast to leading companies' use of iterative design approaches centered on identifying a minimum viable product to quickly meet users' needs. We recommended that the Navy evaluate ways to incorporate these leading practices into the frigate acquisition strategy prior to the acquisition of an 11th ship. The Navy stated that it is taking steps to implement this recommendation.

Program officials stated that plans for a digital twin and digital thread will not be incorporated into program documentation until 2025. Officials stated that they have encountered challenges with the availability of data, cost of data environments, and finding skilled personnel. Additionally, as we reported in January 2025, the program's documents contain general language about MOSA [modular open system approach] principles but do not address planning elements for modularity.

Other Program Issues

As of November 2024, frigate program officials reported that the shipbuilder had submitted a total of five requests for equitable adjustment, raising the potential of unbudgeted program cost growth, depending on the outcome. Requests for equitable adjustment provide a remedy payable only when unforeseen or unintended circumstances, such as government modification of the contract, cause an increase in contract performance costs. The Navy deemed the total costs of the five requests as not suitable for public release. According to program officials these requests relate to government change orders and significant design changes from the frigate's parent ship design.

Despite the unresolved issues identified above, the Navy has proceeded full steam ahead with the frigate program, exercising options for the fifth and six ships in May 2024. Further, in November 2024, the Navy requested information seeking shipbuilders to serve as a second shipyard for constructing future frigates. In January 2025, the Navy began assessing industry responses to inform future acquisition strategies.

Program Office Comments

We provided a draft of this assessment to the program office for review and comment. The program office provided technical comments, which we incorporated where appropriate. The program office stated that in early spring 2025, it anticipates completing design products needed to support production. According to the program office, the Navy increased its leadership and technical presence at the shipyard, including contracted engineering support personnel. The program office further noted that it continues to work with the shipbuilder on frigate weight reduction and identified potential weight savings to regain service life allowance through a phased implementation across the first three ships. According to the program office, the requests for equitable adjustment are currently under Navy review. In April 2025, the office of DOD's Director, Operational Testing and Evaluation provided comments stating that the start date for the program's operational test should be reflected as the first quarter of fiscal year 2032.

A May 2024 Government Accountability Office (GAO) report on the FFG-62 program stated,

To reduce technical risk [in the FFG-62 program], the Navy and its shipbuilder [in designing the FFG-62] modified an existing [Italian-French frigate] design to incorporate [U.S.] Navy specifications and weapon systems. However, the Navy's decision to begin construction [of the first FFG-62] before the design was complete is inconsistent with leading ship design practices and jeopardized this approach. Further, design instability has caused weight growth. The figure shows the frigate's 3D design—a component of design stability—as incomplete over 1 year after construction began.

Delays in completing the ship design have created mounting construction delays. The Navy acknowledges that the April 2026 delivery date, set in the contract at award, is unachievable. The lead frigate is forecasted to be delivered 36 months later than initially planned. The program office tracks and reports design progress, but its design stability metric hinges largely on the quantity—rather than quality—of completed design documents. This limits insight into whether the program's schedule is achievable. If the Navy begins construction on the second frigate without improving this metric, it risks repeating the same errors that resulted in construction disruptions and delays with the lead frigate.

The frigate is using many mission systems already proven on Navy ships. However, the Navy has yet to demonstrate two systems—the propulsion and machinery control systems. A planned update to the frigate test plan—combined with the opportunity afforded by schedule delays—could offer the Navy the chance to conduct land-based testing of these two unproven systems. This testing would reduce the risk of discovering issues after the ship is at sea.

The frigate is using a traditional, linear development approach for design and construction. The Navy has historically experienced schedule delays, cost growth, or both in prior shipbuilding programs using this approach. The Navy has incorporated elements of leading practices into its acquisition strategy. However, further incorporating these practices in an updated acquisition strategy could position the program, when contracting for future frigates, to better respond to evolving mission needs.³¹

December 2024 Navy Statement Estimating Mature Design by May 2025

A December 13, 2024, press report states

The Constellation-class frigate's design should be mature enough for the shipbuilder to enter continuous production by May, the Navy's top acquisition executive said this week….

"In the meantime, we've awarded that company a handful of different ships, and we're going to get them to the place where they could build them at speed, knowing that we're significantly delayed in getting the first ship out," Navy assistant secretary for research, development and acquisition Nickolas Guertin said Wednesday [December 11].³²

Issues for Congress

Estimated 36-Month Delay in Delivery of First Ship

One potential oversight issue for Congress concerns the estimated 36-month delay in the delivery of the first ship in the program. Potential oversight questions for Congress include the following:

• What impact will the delay have on the delivery schedules for follow-on ships in the program?
• What actions do the shipyard and the Navy plan to take to address the reported worker shortages at the shipyard? How long will it take for those actions to produce results, and how confident are the shipyard and the Navy that these actions will be sufficient to eliminate the reported worker shortages? If these actions include increasing pay and benefits for workers at the shipyard, what impact will that have on the cost of FFG-62s (or other Navy ships) built at the shipyard in coming years?
• To what degree do worker shortages at the shipyard reflect circumstances unique to the shipyard? To what degree to they reflect circumstances affecting shipyards across the country?
• What lessons for future Navy shipbuilding efforts, if any, can the shipbuilding industry and the Navy learn from the delay in the delivery of the first ship?

Potential for Cost Growth, Particularly After First 10 Ships

CRS and CBO Analyses in 2020 and 2023

Another potential issue for Congress concerns the potential for cost growth in the FFG-62 program, particularly after the first 10 ships in the program, which are to be procured under a fixed-price incentive (firm target) contract. As discussed in greater detail in earlier versions of this CRS report,³³ CRS and CBO analyses done in 2020 suggested that if FFG-62s were to wind up costing about the same to construct per thousand tons of displacement as other recent U.S. military surface combatants, then FFG-62s could cost substantially more to build than their budgeted unit procurement costs. The preliminary CRS analysis, done by CRS following the Navy's April 30, 2020, contract award in the FFG-62 program, suggested that if FFG-62s were to wind up costing about the same to construct per thousand tons of displacement as other recent U.S. military surface combatants, then the third and subsequent FFG-62s could cost 17% to 56% more than the budgeted estimates for those ships in the Navy's FY2021 budget submission. A follow-on and more refined analysis of the issue that was done by CBO and released on October 13, 2020,³⁴ and which also compared the Navy's FFG-62 budgeted cost estimate to actual costs for building other recent U.S. military surface combatants, estimated that the first 10 FFG-62s would cost 40% more to build than the Navy estimates. An October 2023 CBO report on the cost of the Navy's FY2024 30-year shipbuilding plan, based on updated Navy and CBO figures, estimated that FFG-62s on average will cost 10% to 20% more than the updated Navy estimates.³⁵

May 2024 GAO Report

The May 2024 GAO report on the FFG-62 program stated that in October 2023, the FFG-62 shipbuilder reported "unplanned weight growth in the frigate design—an increase of over 10 percent above the shipbuilder's June 2020 weight estimate."³⁶ Since ship procurement costs are generally proportional to ship displacement (i.e., weight), this weight growth suggests a potential for cost growth beyond the above-discussed figures in the 2020 and 2023 CRS and CBO analyses. The May 2024 GAO report stated: "In December 2023, the Navy initiated a separate review of frigate weight growth to assess risk. The Navy disclosed to us in April 2024 that it is considering a reduction in the frigate's speed requirement as one potential way, among others, to resolve the weight growth affecting the ship's design."³⁷

Potential Consequences of Cost Growth

Depending on the exact terms of the fixed-price incentive (firm target) contract that the Navy awarded to F/MM for the first 10 ships in the FFG-62 program, some portion (perhaps much) of any cost growth that might occur on the first 10 FFG-62s could be borne by F/MM rather than the Navy, although F/MM under such a circumstance might also have the option of seeking some form of contractual relief from the Navy, which if granted could shift at least some of the cost growth back to the government.³⁸ If F/MM were to bear most or all of any cost growth that might occur on the first 10 FFG-62s, then cost growth in the FFG-62 program, if it were to occur, might not affect Navy budgeting substantially until the 11^th ship in the program. Under the Navy's FY2025 budget submission, the 11^th ship in the program is to be the first of the two ships that are programmed for procurement in FY2028.

Potential Oversight Questions

Potential oversight questions for Congress include the following:

• What is the Navy's basis for its view that FFG-62s—ships that are to be about three-quarters as large as U.S. Navy's new Flight III Arleigh Burke (DDG-51) class destroyers³⁹ in terms of displacement, and with installed capabilities that are in many cases similar to those of DDG-51s—can be procured for less than one-half the cost of Flight III DDG-51s?
• Under the terms of the fixed-price incentive (firm target) contract that the Navy awarded to F/MM for the FFG-62 program, what portion of any cost growth that might occur on the first 10 FFG-62s might be borne by F/MM, and what portion might be borne by the Navy?
• If the budgeted procurement costs of FFG-62s rise substantially starting with the 11^th ship in the program, what impact, if any, would that have on the Navy's ability to afford other Navy program priorities? What impact, if any, would it have on the cost effectiveness of the FFG-62 program relative to other Navy investments?

Whether and When to Introduce a Second Shipyard into Program

Another issue for Congress is whether and when to introduce a second shipyard into the FFG-62 program. The Navy's FFG-7s, which were procured at annual rates of as high as eight ships per year, were built at three shipyards.

As noted earlier, the Navy's baseline plan for the FFG-62 program envisaged using a single builder at any one time to build FFG-62s, but Navy officials have also spoken about the option of bringing a second shipyard into the program at some point, particularly if annual procurement rates for FFG-62s rise above two ships per year. As also noted earlier, in December 2024, a Navy official reportedly stated that having a mature design for the FFG-62 program—something that the Navy reportedly anticipates having by May 2025—"will form the basis of a potential follow-on contract competition [i.e., a potential competition to select a second shipyard] anticipated in" FY2027.⁴⁰

In considering whether to build FFG-62s at a single shipyard or at two shipyards, Congress may consider several factors, including but not limited to the annual FFG-62 procurement rate, shipyard production capacities and production economies of scale, the potential costs and benefits in the FFG-62 program of employing recurring competition between multiple shipyards, and how the number of FFG-62 builders might fit into a larger situation involving the production of other Navy and Coast Guard ships, including Navy DDG-51 destroyers, Navy amphibious ships, and Coast Guard Offshore Patrol Cutters (OPCs).⁴¹

Number of VLS Tubes

Another potential oversight issue for Congress—one discussed in this CRS report since April 2019⁴²—concerns the number of vertical launch system (VLS) missile tubes in the FFG-62 design. The VLS is the FFG-62's principal (though not only) means of storing and launching missiles. FFG-62s are to each be equipped with 32 Mark 41 VLS tubes. (The Mark 41 is the Navy's standard VLS design.)

Supporters of requiring each FFG-62 to be equipped with a larger number of VLS tubes, such as 48, might argue that FFG-62s are to be roughly three-quarters as large as the Navy's DDG-51 class destroyers, and might therefore be more appropriately equipped with at least 48 VLS tubes, which is one-half the number on recent DDG-51s. They might also argue that in a context of renewed great power competition with potential adversaries such as China, which is steadily improving its naval capabilities,⁴³ it might be prudent to equip each FFG-62 with 48 rather than 32 VLS tubes each, and that doing so might only marginally increase FFG-62 unit procurement costs. They might also argue that equipping each FFG-62 with 48 rather than 32 VLS tubes will permit the Navy to more fully offset a substantial reduction in VLS tubes that the Navy's surface fleet is projected to experience when the Navy's 22 Ticonderoga (CG-47) class cruisers, which are each equipped with 122 VLS tubes, are retired,⁴⁴ and provide a hedge against the possibility that Navy plans to field VLS tubes on Large Unmanned Surface Vehicles (LUSVs)⁴⁵ will be slowed or curtailed for technical or other reasons.

Supporters of having each FFG-62 be equipped with 32 VLS tubes might argue that the analyses indicating a need for 32 VLS tubes already took improving adversary capabilities (as well as other U.S. Navy capabilities) into account. They might also argue that FFG-62s, in addition to having 32 VLS tubes, will also to have separate, deck-mounted box launchers for launching 16 anti-ship cruise missiles, as well as a separate, 21-cell Rolling Airframe Missile (RAM) AAW missile launcher; that Navy plans continue to call for eventually deploying additional VLS tubes on LUSVs, which are to act as adjunct weapon magazines for the Navy's manned surface combatants; and that increasing the number of VLS tubes on each FFG-62 from 32 to 48 would increase (even if only marginally) the procurement cost of a ship that is intended to be an affordable supplement to the Navy's cruisers and destroyers.

A May 14, 2019, Navy information paper on the cost impact of expanding the FFG-62 VLS capacity from 32 cells to 48 cells states

To grow from a 32 Cell VLS to a 48 Cell VLS necessitates an increase in the length of the ship with a small beam increase and roughly a 200-ton increase in full load displacement. This will require a resizing of the ship, readdressing stability and seakeeping analyses, and adapting ship services to accommodate the additional 16 VLS cells.

A change of this nature would unnecessarily delay detail design by causing significant disruption to ship designs. Particularly the smaller ship designs. Potential competitors have already completed their Conceptual Designs and are entering the Detail Design and Construction competition with ship designs set to accommodate 32 cells.

The cost is estimated to increase between $16M [million] and $24M [million] per ship. This includes ship impacts and additional VLS cells.⁴⁶

Compared to an FFG-62 follow-on ship unit procurement cost of roughly $1.1 billion to $1.2 billion, the above estimated increase of $16 million to $24 million would equate to an increase in unit procurement cost of about 1.3% to about 2.2%.⁴⁷ The estimated figure of $16 million to $24 million, however, dates to 2019. Inflating it to current costs would produce a percentage increase in total ship procurement cost that would be somewhat greater than 1.3% to 2.2%.

Technical Risk

Another potential oversight issue for Congress concerns technical risk in the FFG-62 program.

May 2024 GAO Report

Regarding GAO's perspective on technical risk in the FFG-62 program, see the quoted passage from the May 2024 GAO report on the FFG-62 program that is presented earlier in this CRS report, in the section on the estimated 36-month delay in the delivery of the first FFG-62.

June 2024 GAO Report

In addition to the above-cited May 2024 GAO report, a June 2024 GAO report—the 2024 edition of GAO's annual report surveying DOD major acquisition programs—stated the following about the FFG-62 program:

Technology Maturity, Design Stability, and Production Readiness

The Navy identified no critical technologies for the frigate program. Frigate capabilities rely predominantly on successful incorporation of mission systems already developed and deployed in the Navy's fleet. For example, the frigate design includes the Enterprise Air Surveillance Radar and Aegis combat system—both currently fielded on other ship classes. Nonetheless, integrating these systems into the frigate design has necessitated changes to the scaling of hardware and development of new software code. The Navy is mitigating resulting integration risk by leveraging data from ongoing tests aboard Gerald R. Ford class aircraft carriers and Arleigh Burke class destroyers, coupled with land-based tests that began in 2023.

While the program is predominately leveraging existing mission systems to mitigate risk, two planned newly developed systems pose high technical and integration risks. The frigate will field new propulsion and machinery control systems never used by the Navy. In response to statute, the Navy is building a Land Based Engineering Site (LBES) to test these systems to mitigate development and integration risks. LBES was not expected to be fully operational prior to the previously forecasted December 2026 delivery date, according to Navy officials.

Completing functional design and 3D modeling continues to take longer than the Navy anticipated and remains incomplete over a year after beginning lead ship construction. As of October 2023, the functional design was 92 percent complete and 3D modeling was 84 percent complete. Program officials stated that they set a goal to complete 80 percent of the functional design by construction start. However, the program's approach is inconsistent with shipbuilding leading practices, which call for completion of these design activities prior to construction start.

Ongoing delays have resulted from challenges adapting a foreign ship design to meet Navy survivability requirements, outstanding vendor-furnished information needed to inform the design, and workforce issues. The Navy increased on-site coordination efforts with its shipbuilder and industry stakeholders to remedy and approve deficient design products, but progress remains limited. As a result, the shipbuilder constructed early modules using an incomplete design and, more recently, slowed construction activities to await design stability.

As a result of the delays, the shipbuilder will not meet either its April 2026 contract delivery date or its more-recently estimated December 2026 delivery date for the lead frigate, according to the program. In December 2023, the Navy reported that the lead ship will be delayed at least 1 year, but an estimated delivery date for the lead and follow-on ships will not be confirmed until the Navy completes an ongoing schedule assessment. In January 2024, the Secretary of the Navy directed a separate assessment of the shipbuilding portfolio due, in part, to concerns with the frigate program.

Software and Cybersecurity

The program is using a modern software development approach, including Agile, DevOps, and DevSecOps to develop, deliver, and test various subsystem software, such as Aegis and the machinery control system.

Initial developmental testing of Aegis software started in August 2023 at land-based test sites, with follow-on tests scheduled to occur every 1 to 3 months. Testing provides system operators with the opportunity to test radar and Aegis equipment on simulators. Machinery control system software development is planned over three software releases, comprised of six builds. The contractor has released four of these builds to date with two more planned to follow, scheduled through January 2025.

The program completed its second cyber tabletop exercise in April 2023. It also plans to conduct a vulnerability identification assessment and adversarial cybersecurity development test and evaluation in April 2024 and April 2025, respectively. Additional cybersecurity tests are planned prior to initial operational capability in 2029.

Program Office Comments

We provided a draft of this assessment to the program office for review and comment. The program office provided technical comments, which we incorporated where appropriate.

The Navy stated that it chartered an independent review team to perform a holistic assessment of the shipbuilder's production schedules, identify key issues, and recommend actions. Additionally, the Navy reported that it increased design and production efforts by bringing in both Navy and contracted engineering design support personnel at the shipbuilder's site to bolster and accelerate design stability completion and ramp-up of production.

In April 2024, after our cutoff date for new information, the Navy announced that the delivery of the lead ship was expected to be delayed approximately 3 years past the April 2026 contract delivery date.⁴⁸

January 2024 DOT&E Report

A January 2024 report from DOD's Director, Operational Test and Evaluation (DOT&E)—DOT&E's annual report for FY2023—stated the following regarding the FFG-62 program:

TEST ADEQUACY

In March 2023, DOT&E published a classified FFG 62 EOA [early operational assessment] report based on evaluations conducted between February 2022 and July 2022 and detailed in the FY22 Annual Report. Evaluations were adequate to determine potential FFG 62 design risks that could affect operational effectiveness and suitability of the delivered ship. The EOA provides the FFG 62 Program with an opportunity to consider modifications to the ship design. The FFG 62 Program will also use the EOA to inform development of the next TEMP [test and evaluation master plan] revision expected to be completed in FY25. The Navy conducted the EOA in accordance with a DOT&E-approved test plan, and it was observed by DOT&E.

In FY23, the Navy conducted testing against a large scale-model of a generic ship incorporating characteristics typical of Navy standard ship structure and a responding mid-deck plate to generate response data for under-bottom explosions. This test was similar to the test detailed in the FY22 Annual Report but focused on different structure response. Data from these tests provide validation data for survivability models used to predict the magnitude and extent of damage from underwater threat weapons. The Navy conducted this test in accordance with the DOT&E-approved test plan, and it was observed by DOT&E.

In FY23, the FFG 62 Program approved the FFG 62 Verification, Validation, and Accreditation (VV&A) Plans for the Advanced Survivability Assessment Program (ASAP) and Navy Enhanced Sierra Mechanics (NESM) M&S [modeling and simulation] tools. These plans are adequate to determine the sufficiency of these M&S within the LFT&E [live fire test and evaluation] test strategy. Further, the Navy continued M&S modification that incorporates new capabilities, including improvements in the blast and whipping codes. The Navy is working closely with DOT&E on the development of M&S plans to support the Detail Design Survivability Assessment Report that the FFG 62 Program expects to publish in FY26.

PERFORMANCE

EFFECTIVENESS

No data are available to determine FFG 62 operational effectiveness due to FFG 62 being in development. However, the FFG 62 design presents risks to operational effectiveness in each of its primary mission areas: air warfare, anti-submarine warfare, and surface warfare. Classified risks to operational effectiveness are in the FFG 62 EOA report. Unclassified risks to operational effectiveness include that the FFG 62 design does not have a tracker illuminator system, which is typically installed on other Aegis platforms, and that the design crew size will be highly reliant on currently unproven system automation and human system interfaces. The Navy acknowledges the risk of the current crewing strategy for FFG 62 and is working with the appropriate stakeholders to mitigate and eliminate the associated risk to mission performance. Further, the FFG 62 Program reports that they currently have sufficient access to technical information on the Thales CAPTAS-4 [variable-depth sonar] needed to effectively integrate it with the AN/SQQ-89(V)16 [undersea warfare] system.

SUITABILITY

No data are available to determine FFG 62 operational suitability due to FFG 62 being in development. Further, reliability, maintainability, and availability data for hull, mechanical, and electrical systems are not yet available to identify associated risk in the FFG 62 design.

SURVIVABILITY

No data are available to determine the cyber survivability of FFG 62 due to its early stage of development. Cyber survivability was not assessed during the EOA.

Insufficient data are available to determine FFG 62 survivability due to ongoing LFT&E. The Navy continued to close outstanding vulnerability knowledge gaps and support validation of survivability M&S through additional large-scale underwater explosion testing in FY23.

RECOMMENDATIONS

The Navy should:

1. Provide an update to the FFG 62 TEMP that includes the strategy to test anti-air warfare mission capability.

2. Continue to monitor the development of the mission system autonomy/automation components in the ship design to minimize risk to mission performance and system maintenance capability, and if necessary, complete a reassessment of the adequacy of crew sizing to allow opportunity to incorporate modifications of the ship design, should additional crewing be required to support all intended missions.⁴⁹

Press Reports

An April 13, 2022, press report stated

The Navy will begin construction on the first Constellation-class frigate this summer or fall, later than the program's goal to begin construction in April.

The program won't start construction until the critical design review is completed, according to Capt. Kevin Smith, the frigate program manager.

"You may say, 'you've been working on design for a while.' We want to make sure we get it right before we start cutting steel. Lead ships are hard," Smith said last week at the Navy League's Sea-Air-Space conference.⁵⁰

A March 31, 2022, press report stated

Following an announcement earlier this week that the Navy would cancel a key anti-submarine warfare effort bound for the Littoral Combat Ship, the service today also said it would replace that technology with an alternative system onboard the new Constellation-class frigate.

Rear Adm. Casey Moton, a senior officer overseeing both ship classes, told a small group of reporters that "following an assessment," the Navy chose the CAPTAS-4 variable depth sonar (VDS) made by Advanced Acoustics Concepts, a subsidiary of DRS and Thales, as the new frigate VDS.

"The Navy assessed CAPTAS-4 as a low risk VDS option for FFG-62 due to its proven performance, overall technical readiness level, low risk integration with the SQQ-89 ASW combat system, ability to integrate with the frigate platform design and ability to meet the in-yard need date for FFG-62," Moton said....

The consequences for the last-minute change to the Navy's contract with Raytheon are still being worked out, Moton said, but he added that the company had been "professional" throughout the process to date. The admiral also said he does not anticipate "very much of a change" to the ship's cost as a result of the new VDS.⁵¹

A January 2022 press report about whether changes made to FREMM parent design introduce technical risk to the FFG-62 program stated

Experts told Breaking Defense that not all changes [from a parent design] are as inherently risky as they might seem, and the Navy appears to have heeded lessons from previous controversies....

"In terms of changes from a parent design… as you start to drive further away from a parent design, there is the risk of cost increase, especially if you have immature equipment that requires testing or fails testing," said Steven Wills, a Navy strategy and policy expert at CNA, a federally funded research and development center that provides advice to the Pentagon....

When asked this month at the Surface Navy Association's annual symposium about how those changes could impact the program's risk calculus, Capt. Kevin Smith, the Constellation-class program manager, said the parent design is a starting point, but nothing more.

"I think it was clear to everyone in Navy leadership as well as congressional leadership that the parent is there as just that… think of it as a DNA," he said. "But you do have to take US Navy standards and apply those, and also the requirements."...

"The only thing that we've [the Navy] done actually—it's a change to the requirements—is buy American, because that was a statute from Congress," Smith said, referring to legislation mandating certain parts and percentages of US warships be manufactured domestically....

But CNA's Wills said one major difference between the FREMM and the Constellation, the elongated hull form, is not surprising because of differences in how Europeans and the United States go about building warships.

"You don't incur a lot of costs in making the ship bigger. That shouldn't slow you down. That shouldn't cause testing to fail," he said. "You're going to have to buy more steel and there will be some changes. The benefit that they seem to be going for… is they're looking for some additional margins throughout the life of the ship."

Matthew Collette, who teaches naval architecture and marine engineering at the University of Michigan, said fully adopting a parent design without modification is "exceptionally rare" especially for the US Navy, which has developed standards for internal layouts and adheres to congressional policy dictating supply chain options.

"Changing the overall dimensions of the ship is probably lowering the overall risk to the program, not raising it," Collette told Breaking Defense. "Given that we are changing the internals of the design, adhering strictly to the old hull form would actually increase the overall risk to the program, as you end up adding complexity by trying to shoehorn in components in a less-than-ideal layout."

He cited the Ticonderoga-class cruisers and Whidbey Island-class dock landing ships as examples where Navy programs have historically suffered because the service attempted to maintain the ships' external design while altering its internal layout.

Collette said there are three principles a shipbuilding program should follow to reduce the risk of modifying a parent design. The first is choosing proven systems when swapping out components. In the Constellation's case, the Navy has done just that by choosing systems such as Aegis, the Mk 41 Vertical Launching System and the SLQ-32 from the Surface Electronic Warfare Improvement Program.

The second principle is to thoroughly test new components ashore, a requirement Congress codified in law after finding out the Navy failed to do this on other systems that proved troublesome for the Ford.

The last principle is having a completed definition of the parent design, such as a 3D model, a parameter for which Collette and other analysts have no way of assessing from outside the Navy's program office.

"Even with some changes, the program is still benefiting from access to the original design models, and the knowledge gained in building and operating vessels that are highly similar, but no longer exactly the same, to the US Navy variant," Collette said.⁵²

See also the Appendix regarding the Navy's use of a guaranty rather than a warranty in the Detail Design and Construction (DD&C) contract for the first 10 ships in the FFG-62 program.

Legislative Activity for FY2025

Summary of Congressional Action on FY2025 Funding Request

Table 2 summarizes congressional action on the Navy's FY2025 funding request for the FFG-62 program.

FY2025 National Defense Authorization Act (H.R. 8070/S. 4638/H.R. 5009/P.L. 118-159)

House

The House Armed Services Committee, in its report (H.Rept. 118-529 of May 31, 2024) on H.R. 8070, recommended the funding levels shown in the HASC column of Table 2. The recommended reduction of $1,170.4 million in procurement funding (the entire requested amount) is for "Program delay." The recommended increase of $37.5 million in advance procurement (AP) funding is for "Frigate industrial base and workforce development." (Page 426)

H.Rept. 118-529 states

United States Navy constellation class frigates program

The committee recognizes the importance of frigates to fill a gap in the U.S. Navy's fleet and be capable of conducting anti-air warfare, anti-surface warfare, anti-submarine warfare, and electromagnetic warfare operations in both blue water and littoral areas. The committee recognizes the importance of national security in the proposed selected homeports, Naval Station Everett and Naval Station Mayport. The committee is concerned with the reported 3-year delay in the delivery of the lead ship due to design instability and workforce shortage but remains supportive of the mission and the capability it will bring once delivered to the fleet. (Page 26)

Senate

The Senate Armed Services Committee, in its report (S.Rept. 118-188 of July 8, 2024) on S. 4638, recommended the funding levels shown in the SASC column of Table 2. The recommended increase of $50.0 million is for "Small surface combatant shipyard infrastructure and workforce development." (Page 444)

Section 122 of S. 4638 states

SEC. 122. CONSTELLATION-CLASS FRIGATE PROGRAM.

(a) CERTIFICATION REQUIRED.—Upon final approval of 95 percent of all functional design drawings for the Constellation-class frigate program by the designated technical authority, the Secretary of Defense shall certify to the congressional defense committees that such drawings have been so approved.

(b) LIMITATION.—None of the amounts authorized to be appropriated by this Act for fiscal year 2025 may be obligated or expended for a scope of work for the construction of a Constellation-class frigate until after submission of the certification required by subsection (a).

(c) ASSESSMENT AND EVALUATION.—Not later than 30 days after the date on which the Secretary of Defense submits the certification required by subsection (a), the Comptroller General of the United States shall—

(1) assess the Secretary's compliance with this section; and

(2) submit to the congressional defense committees an evaluation of the completeness of the functional design drawings described in such subsection.

Regarding Section 122, S.Rept. 118-188 states

Constellation-class frigate program (sec. 122)

The committee recommends a provision that would prohibit the Secretary of the Navy from obligating or expending any funds authorized for fiscal year 2025 for the construction of a Constellation-class frigate until the Secretary of Defense certifies that 95 percent of functional design drawings have been approved by the designated technical authority. The provision would also require the Comptroller General of the United States to assess the Secretary of Defense's compliance with the requirements and evaluate the completeness of functional design.

The committee notes that six ships have been appropriated for the program, and the keel of the lead ship was laid in the third quarter of fiscal year 2024. In April 2024, the U.S. Navy reported the lead ship to be 3 years behind schedule, a delay with ramifications that are not fully factored into the U.S. Navy's budget justification documents. The second ship is already facing a 2-year construction delay.

The committee recognizes that the shipbuilder is facing labor and supply chain challenges that reflect issues facing the broader industry, particularly given that the shipbuilder's price was formulated prior to the COVID–19 pandemic. Moreover, the shipbuilder has a significant backlog of work in another shipbuilding program whose prime contractor is a separate company, which complicates the prioritization of resources at the shipbuilder for the Constellation-class frigate.

The committee also notes the U.S. Navy's role in the challenges facing the program. In section 123 of the National Defense Authorization Act for Fiscal Year 2017 (P.L. 118-114–328), Congress limited the award of a contract for construction of the prospective frigate class ship until the design reached sufficient maturity and completed a preliminary design review, or demonstrated an equivalent level of design completeness. The U.S. Navy cited the frigate program's use of a parent ship design as an argument for why this requirement had been met. More generally, the U.S. Navy cited the use of a parent design as an important measure for reducing technical, schedule, and cost risk in the program. The winning offeror proposed a design based on the Italian-French Fregata Europea Multi-Missione (FREMM) frigate design, but the content of design of the Constellation-class reportedly has declined over time from being 85 percent common with the FREMM design to being 15 percent common, suggesting that the program has evolved toward what the Congressional Research Service refers to as a "parent design in name only" situation, which can negate much of the potential value of using a parent design.

The scale and scope of these changes call into question the basis of the U.S. Navy's original program justification to Congress and the fixed-price contract awarded to the shipbuilder. If the proposed design was insufficient to meet U.S. Navy standards to the degree suggested by the reported 15 percent commonality figure, then the contract award suggests that there was a severe breakdown between the assumptions of the source selection evaluation board and the senior technical authority. The senior technical authority must ensure clarity of technical standards in the solicitation process, timely feedback for contractor-submitted drawings, and currency and relevancy of technical standards.

Moreover, the senior technical authority is expected to maintain discipline related to design maturity in advance of construction. The Secretary of the Navy certified to Congress that basic and functional design were complete prior to the start of construction in August 2022, but U.S. Navy officials now estimate that such maturity will not be reached until more than 2 years later. The committee believes this constitutes a misrepresentation of the facts certified by the Secretary of the Navy.

The committee affirms its support for the goal of a 381-ship Navy and the role of the Constellation-class frigate in meeting U.S. Navy requirements. The committee appreciates the urgency that the U.S. Navy has demonstrated to surge design support to the Constellation-class builder and looks forward to receiving updated production plans for the program. Moreover, the committee encourages the Secretary of the Navy to consider whether exercising additional fixed priced options on the contract including detail design and construction is in the best interest of the U.S. Navy and the health of the industrial base. (Pages 6-7)

Enacted

The joint explanatory statement for the House-Senate agreement on H.R. 5009/P.L. 118-159 of December 23, 2024, recommends the funding levels shown in the authorization final column of Table 2. The recommended net reduction of $1,120.442 million in procurement funding includes a reduction of $1,170.442 million (the entire requested amount for the ship that was requested for procurement in FY2025) for "Program delay," and an increase of $50.0 million for "Small surface combatant shipyard infrastructure and workforce development." (Pages 520-521)

Section 129 of H.R. 5009 would prohibit the obligation an expenditure of funds authorized to be appropriated by H.R. 5009 or otherwise made available for FY2025 for the Navy for the construction of a Constellation-class frigate beyond the basic and functional design phase until DOD certifies that 95% of the all basic and functional design drawings for the Constellation-class frigate program have received final approval. Section 129 would also direct GAO to submit an assessment of DOD's compliance with Section 129 and the completeness of the basic and functional design drawings.

Section 1033 requires the Navy to "take such actions as are necessary for the Navy to adopt recommendations 1, 3, 4, and 6 in the report of the Government Accountability Office titled, 'Navy Shipbuilding: Increased Use of Leading Design Practices Could Improve Timeliness of Deliveries', and dated May 2, 2024 (GAO-24-105503)." Regarding Section 1033, the joint explanatory statement states in part:

In addition, we direct the Assistant Secretary of the Navy for Research, Development, and Acquisition, in coordination with the Commander, Naval Sea Systems Command (NAVSEA), to provide a report, not later than one year after the date of the enactment of this Act, to the Committees on Armed Services of the Senate and the House of Representatives that details the following:

(1) All references to external specifications regardless of source—including military specifications, NAVSEA instructions, American Bureau of Shipbuilding and other standards—that were included on the Constellation-class frigate solicitation for detail design and construction;

(2) Which specifications in paragraph (1) allowed for alternative specifications—including alternative specifications conditional on NAVSEA approval;

(3) How many alternative specifications allowed in paragraph (2) were recommended by the awarded contractor in their proposed response to the solicitation for the Constellation-class frigate detail design and construction contract in comparison to how many alternative specifications were ultimately approved by NAVSEA;

(4) An explanation for why such alternative specifications in paragraph (3) were not approved by NAVSEA;

(5) The status of all requests for equitable adjustments [REAs] that the Navy received on the Constellation-class frigate;

(6) An unaltered statement from the awarded contractor of the Constellation-class frigate of the findings provided in paragraphs (1) though (5) above; and

(7) Proposed actions for how best value tradeoffs will be improved in source selections for shipbuilding contracts. (PDF pages 249-250 of 696)

FY2025 DOD Appropriations Act (H.R. 8774/S. 4921/H.R. 1968/P.L. 119-4)

House

The House Appropriations Committee, in its report (H.Rept. 118-557 of June 17, 2024) on H.R. 8774, recommended the funding levels shown in the HAC column of Table 2. The recommended reduction of $1,170.4 million in procurement funding (the entire requested amount) is for "Program delay." (Page 129)

Section 8093(b) of H.R. 8774, a recurring provision, states

SEC. 8093….

(b) None of the funds provided in this Act for the FFG(X) Frigate program shall be used to award a new contract that provides for the acquisition of the following components unless those components are manufactured in the United States: Air circuit breakers; gyrocompasses; electronic navigation chart systems; steering controls; pumps; propulsion and machinery control systems; totally enclosed lifeboats; auxiliary equipment pumps; shipboard cranes; auxiliary chill water systems; and propulsion propellers: Provided, That the Secretary of the Navy shall incorporate United States manufactured propulsion engines and propulsion reduction gears into the FFG(X) Frigate program beginning not later than with the eleventh ship of the program.

H.Rept. 118-557 states

FRIGATE CONSTRUCTION

The Committee notes that despite findings in the 45-day Shipbuilding Review that show the Constellation-class frigate is at least three years behind schedule, the Navy continues to request funding to construct frigates at a rate that the program has demonstrated it is unable to meet. In addition to the delays found with lead-ship construction, the Committee notes the delivery dates for the three follow-on frigates currently under contract are unknown. The Committee is concerned by persisting design instability for the lead ship that may further impact construction. Therefore, the Committee recommendation provides no funding for the procurement of a frigate in fiscal year 2025. (Page 132)

Senate

The Senate Appropriations Committee, in its report (S.Rept. 118-204 of August 1, 2024) on S. 4921, recommended the funding levels shown in the SAC column of Table 2. The recommended increase of $100.0 million in procurement funding is for "Program increase: Frigate industrial base and workforce development." (Page 132) The recommended increase of $700.0 million in cost-to-complete funding is for "Program increase: Frigate 62–67," meaning the fist six ships in the program, which were procured in prior fiscal years. (Page 132) Cost-to-complete funding, also referred to as completion of prior-year (PY) shipbuilding programs, is funding to cover cost growth on ships procured in prior fiscal years.

Section 8093(b) of H.R. 8774, a recurring provision, states

SEC. 8093….

(b) None of the funds provided in this Act for the FFG(X) Frigate program shall be used to award a new contract that provides for the acquisition of the following components unless those components are manufactured in the United States: Air circuit breakers; gyrocompasses; electronic navigation chart systems; steering controls; pumps; propulsion and machinery control systems; totally enclosed lifeboats; auxiliary equipment pumps; shipboard cranes; auxiliary chill water systems; and propulsion propellers: Provided, That the Secretary of the Navy shall incorporate United States manufactured propulsion engines and propulsion reduction gears into the FFG(X) Frigate program beginning not later than with the eleventh ship of the program.

Enacted

Sections 1404 and 1417 of the Full-Year Continuing Appropriations and Extensions Act, 2025 (H.R. 1968/P.L. 119-4 of March 15, 2025), a full-year continuing resolution (CR), provide the funding figures shown in the appropriation enacted column of Table 2.

Appendix. 32 Issues for Congress Prior to Navy's November 2025 Announcement Potential oversight issues for Congress regarding the FFG-62 program as they existed prior to the Navy's November 2025 announcement about its desire to truncate the FFG-62 program and initiate a program to start procuring FF(X)s are discussed in Appendix A. These issues include the delay in the delivery of the first ship, the potential for cost growth in the FFG-62 program, whether and when to introduce a second shipyard into the FFG-62 program, the number of vertical launch system (VLS) tubes in the FFG-62 design, and technical risk in the FFG-62 program. Navy's Desired Approach for Restructuring Frigate Acquisition Overview

As discussed earlier, in June 2025, Secretary of Defense Pete Hegseth indicated that the FFG-62 program was being reviewed as one of several "difficult decisions" to be made by the Department of Defense (DOD) during a review of its acquisition programs. As also discussed earlier, in a series of announcements from November 25 to December 19, 2025, the Navy stated that it wants to restructure its frigate acquisition effort by (1) truncating the FFG-62 program to no more than two ships and (2) initiating a new program to procure a different class Navy frigates, called FF(X)s, whose design would be based on that of the National Security Cutter (NSC), a frigate-like ship that has been built for the Coast Guard by Huntington Ingalls Industries/Ingalls Shipbuilding (HII/Ingalls) of Pascagoula, MS.

Under the Navy's desired new approach, the third through sixth FFG-62s (which have not begun construction) would be cancelled; the first two FFG-62s (construction of which is underway) would remain under review; the first FF(X) would be awarded to HII/Ingalls on a sole-source basis and be launched (i.e., put into the water for the final stages of its construction) by 2028; and one or more additional U.S. shipyards would later be brought into the FF(X) program to expand the FF(X) production rate, competing with HII/Ingalls for future ships in the program.

In announcing its desired new approach for acquiring frigates, Secretary of the Navy John Phelan stated that "the Constellation-class frigate was canceled because, candidly, it didn't make sense anymore to build it. It was 80% of the cost of a [larger DDG-51 class] destroyer and 60% of the capability. You might as well build destroyers." The continuation, for now at least, of construction work on the first two FFG-62s reportedly is intended to support F/MM in the near term, while policymakers assess how F/MM's shipbuilding capability could be used over the longer run. As of November 25, 2025, the first ship in the FFG-62 program was reportedly about 12% complete.

Navy News Release of December 19, 2025

A December 19, 2025, Navy news release about its desire to initiate procurement of FF(X)s states:

The Navy announced today its plan to introduce a new class of smaller combatant ships, the FF(X), as a critical component of the Navy's fleet of the future. The FF(X) will be a smaller, more agile surface combatant designed to complement the fleet's larger, multi-mission warships and enhance operational flexibility around the globe.

"To deliver at speed and scale, I've directed the acquisition of a new frigate class based on HII's Legend-Class National Security Cutter design: a proven, American-built ship that has been protecting U.S. interests at home and abroad," said John C. Phelan, Secretary of the Navy. "President Trump and the Secretary of War have signed off on this as part of the Golden Fleet. Our goal is clear: launch the first hull in the water in 2028. To expand capacity and production across our maritime industrial base, we will acquire these ships using a lead yard, and competitive follow-on strategy for multi-yard construction. Shipyards will be measured against one outcome: delivering combat power to the Fleet as fast as possible."

The FF(X) is a highly adaptable vessel. While its primary mission will be surface warfare, its ability to carry modular payloads and command unmanned systems enables it to execute a broad spectrum of operations, making it ready for the challenges of the modern maritime environment.…

"Like the Medium Landing Ship [LSM], leveraging a complete design and production baseline approach will allow the Navy and shipbuilders to reduce costs, schedule and technical risk," said Adm. Daryl Caudle, 34th Chief of Naval Operations. "We know this Frigate design works, we know it operates with the Fleet, and most importantly, we know how to build it now."³³

A December 19, 2025, press report quoted a "senior official" as stating: "We will initially sole-source the lead ship to Ingalls, but we will move to competition as soon as possible."³⁴

National Security Cutter (NSC) Design

The NSC program is discussed in detail in a separate CRS report on Coast Guard cutter acquisition programs.³⁵ HII/Ingalls has built 10 NSCs for the Coast Guard; the first was commissioned into service with the Coast Guard in August 2008, and the 10^th was commissioned into service with the Coast Guard in April 2024. Congress funded an 11^th NSC in FY2018, but in June 2025 it was reported that the Coast Guard and HII/Ingalls had agreed to cancel construction of the ship,³⁶ making the 10^th NSC the final one to be built for the Coast Guard.

The NSC design (Figure 4) is substantially smaller than the FFG-62 design. As noted earlier, the full load displacement of the FFG-62 design is close to 8,000 tons. By comparison, the NSC design has a full load displacement of about 4,500 tons.³⁷ Consistent with both its smaller size and Coast Guard (rather than Navy) mission needs, the NSC is less heavily armed than the FFG-62 design. Naval Variants of NSC Design Proposed in Past Years by HII/Ingalls

HII/Ingalls since at least 2012 has marketed naval variants of the NSC design, which HII/Ingalls has called patrol frigates, for potential export to other countries.³⁸ Some observers have argued that ships based on the NSC design should be procured for the U.S. Navy.³⁹

Figure 4. National Security Cutter

Source: Cropped version of photograph accompanying Huntington Ingalls Industries, "Bertholf (WMSL 750) Builder's Trials," March 22, 2019. The caption to the photograph states that it was taken on December 4, 2007.

FF(X) Frigate Figure 5 shows a Navy rendering of the FF(X) frigate based on the NSC design. Beyond this rendering and a small number of other renderings of the FF(X) that have been published,⁴⁰ few specifics about the FF(X)'s design features and capabilities have been released. The rendering in Figure 5 shows some differences from the HII patrol frigate designs discussed in the previous section.⁴¹ The Navy's decision to refer to the proposed new frigate for the U.S. Navy as the FF(X) rather than the FFG(X) suggests that the ship will be equipped with a point-defense anti-air warfare (AAW, aka air defense) system rather than an area-defense AAW system, as the "G" designation in U.S. Navy surface combatants, meaning guided missile ship, is usually reserved for ships that are equipped with an area-defense AAW system.⁴²

Figure 5. Rendering of FF(X) Design

Source: Cropped version of rendering accompanying Sam LaGrone, "SECNAV: New Frigate will be Based on National Security Cutter, First FF(X) to be Built at Ingalls," USNI News, December 19, 2025. The caption to the rendering credits it to the U.S. Navy.

A December 19, 2025, press article quotes a "senior official" as stating: "The [NSC] design [with] little adaptation will meet the CNO's [Chief of Naval Operations'] requirements for a small surface combatant."⁴³ The article also states:

The scaled-back requirements for the new ship class were born from a Navy-led review of what the sea service needs in the short term to support lower-priority missions that tie up more capable warships….

"They looked at what's been going on in U.S. 5th Fleet and 4th Fleet as exemplar areas where this platform would help take the load off of our destroyers so they could focus on some of the higher-end missions," a second senior official told USNI News.

One of the few changes the Navy intends to make to the NSC design is to construct a platform above the open boat deck for containerized mission packages, the officials said. For example, the Army and Lockheed Martin developed the MK-70 Typhon vertical launch system within the dimensions of a 40-foot shipping container. The Navy is developing more containerized packages that can be swapped from ship to ship.

"That'll be something immediately on the first flight of ships that will be available," the first senior official told USNI News. "Those containers could do a host of missions. That's a core element of the future force design. Beyond that … things that are more intrusive to install, like anti-submarine warfare equipment, would be something we would look to do in the future."⁴⁴

Another December 19, 2025, press article states that the Navy has

made clear that it expects the new frigate design to allow for the integration of new and improved capabilities and functionality down the line.

"The [FF(X)] frigate will follow the same proven approach we've used with the Arleigh Burke destroyers, building it smart from the start, then upgrading it in steps over time, as the threat and technology evolve," Chief of Naval Operations Adm. Daryl Caudle also said in today's video announcement.⁴⁵

Issues for Congress Regarding Navy's Desired Approach for Frigate Acquisition

In considering whether to approve, reject, or modify the Navy's desired approach for restructuring its frigate acquisition effort, Congress may consider several potential oversight issues, including but not necessarily limited to those discussed below.

Adequacy of Information Provided to Congress

One potential oversight issue for Congress is whether is whether Congress has adequate information to assess the merits of the Navy's desired new approach to frigate acquisition. Information that could support congressional assessments includes information on

• the formal analysis—such as an Analysis of Alternatives (AOA)—by which the Navy determined that the most cost-effective approach to frigate acquisition would be to truncate the FFG-62 program to no more than two ships and initiate a new frigate procurement program based on the NSC design;
• what steps, if any, in the DOD acquisition process were set aside to facilitate the initiation of the FF(X) program in December 2025; and
• the design features, capabilities, and estimated procurement and life-cycle operation and support (O&S) costs of the FF(X) design, how the FF(X) design (and thus FF(X) capabilities and costs) might evolve after procurement of the first FF(X) or the first few FF(X)s, the numbers of FF(X)s that are to be procured each year, and the schedule for introducing one or more additional shipyards into the program.

General Approach Regarding Frigate Acquisition

Another potential oversight issue for Congress is what general approach to pursue regarding frigate acquisition.

Overview of Four General Approaches

In a context of the existing FFG-62 program and a potential successor frigate program, notional general approaches regarding frigate acquisition include but are not necessarily limited to the following four possibilities:

• End procurement of FFG-62s and do not initiate a successor frigate program.
• End procurement of FFG-62s and initiate a successor frigate program (the Navy's desired approach).
• Continue procurement of FFG-62s and do not initiate a successor frigate program.
• Continue procurement of FFG-62s and initiate an additional frigate program.

Below are brief discussions of each of these possible approaches.

End Procurement of FFG-62s and Do Not Initiate a Successor Frigate Program

Under this approach, which might be thought of as the "no frigates" approach, procurement of FFG-62s would be truncated, and no successor frigate program would be initiated. Navy mission needs that were to have been met by procuring frigates would instead be met by increasing planned procurement and force levels of DDG-51 destroyers (i.e., ships larger than frigates) and/or corvette-sized unmanned surface vessels (USVs) (i.e., ships smaller than frigates).⁴⁶

Supporters of this approach could argue that ending procurement of frigates would ease Navy shipbuilding program management workloads by reducing the number of shipbuilding programs to be managed, and do so at a time when the Navy is facing challenges in executing its shipbuilding programs. They could argue that this approach could increase production and life-cycle O&S economies of scale for DDG-51 destroyers and USVs.

Skeptics of this approach could question whether a combination of DDG-51s and USVs could meet certain mission needs that were to have been met by procuring frigates, because the capabilities of the Navy's future USVs have not been fully defined and proven, and because USVs, as unmanned ships, could be challenged in performing certain day-to-day, noncombat missions that manned frigates would perform.⁴⁷ They could argue that using destroyers to perform missions that could be adequately performed by frigates would not be cost effective, given the higher procurement and O&S costs of destroyers compared to frigates.

End Procurement of FFG-62s and Initiate a Successor Frigate Program

This is the Navy's desired approach. Supporters of this approach could argue, as Secretary of the Navy Phelan has, that the FFG-62 design is no longer cost-effective to pursue as a smaller and individually less expensive complement to the DDG-51 design, because the FFG-62 design has grown during the design process to more than 80% of the size of the DDG-51 design but would provide less than 80% of a DDG-51's capability, and that a successor frigate design could fare better than the FFG-62 design in terms of cost and capability in relation to the cost and capability of the DDG-51 design. They could argue that although limiting FFG-62 procurement to two ships could increase per-ship FFG-62 O&S costs by reducing economies of scale for such costs, the increase will not be onerous. They could argue that the Navy operates other numerically small ship classes (including the three-ship Seawolf [SSN-21] class of attack submarines and the three-ship Zumwalt [DDG-1000] class of destroyers), and that the issue of per-ship FFG-62 O&S costs could be addressed by eventually selling the two FFG-62s to one or two allied or partner navies that might need only one or two such ships to meet their own mission needs.

Skeptics of this approach could argue that the FFG-62 design is the design that the Navy originally selected, following a rigorous source-selection process, as the one that could best meet the Navy's operational requirements for a frigate, and that a successor frigate design might fare no better than the FFG-62 design in terms of cost and capability in relation to the cost and capability of the DDG-51 design. They could argue that while there is less than a 20% difference in the size of a 9,700-ton DDG-51 and an 8,000-ton FFG-62, Navy plans have called for shifting destroyer procurement in the early 2030s from the DDG-51 design to a 14,500-ton next-generation destroyer design called the DDG(X),⁴⁸ which would establish a larger difference in size between the FFG-62 design and the design of the destroyer that the Navy would be procuring. They could argue that design work on the FFG-62 is progressing toward completion; that truncating FFG-62 procurement to two ships would provide a limited return on the investment of time and funding that the Navy has expended to complete the FFG-62 design (which needs to be completed to support the construction of the first two ships); that it would not be optimal for the Navy to create another case, alongside cases such as the Seawolf and Zumwalt classes, of paying elevated per-ship O&S costs for a numerically limited class of combatant ships; and that there is no guarantee that the Navy would be able to find one or two allied or partner navies willing to buy two FFG-62s unless their purchase price is set substantially below their original procurement costs.

Continue Procurement of FFG-62s and Do Not Initiate a Successor Frigate Program

Under this approach, which might be thought of as the "stay the course with the FFG-62 program" approach, the cancellation of the third through sixth FFG-62 would be treated as a pause in FFG-62 procurement that would be intended to permit FFG-62 construction work to catch up with the number of FFG-62s that have been procured, at which point procurement of additional FFG-62s would resume, and a successor frigate program would not be initiated. A pause in FFG-62 procurement could be viewed as similar in some respects to what occurred in the earlier years of the Littoral Combat Ship (LCS) procurement program.⁴⁹

Since this approach is essentially the obverse of the previous approach, notional arguments for supporters and skeptics of this approach would essentially be the obverse of those outlined above for the previous approach: Supporters of this approach could make arguments similar to those outlined above for skeptics of the previous approach, while skeptics of this approach could make arguments similar to those outlined above for supporters of the previous approach.

Continue Procurement of FFG-62s and Initiate an Additional Frigate Program

Under this approach, which might be thought of as the "procure two frigate classes" approach, the cancellation of the third through sixth FFG-62 would be treated as a pause in FFG-62 procurement, followed by a resumption in FFG-62 procurement at a later point, and an additional frigate program would be initiated, with ships in this additional program being procured in parallel with procurement of FFG-62s. Under this approach, the builder or builders of FFG-62s and the builder or builders of the second type of frigate could compete for contracts to build frigates for the Navy. This approach would be broadly similar to the one the Navy employed for the LCS program, under which two different LCS designs were built at two shipyards, with each shipyard building one of the designs, and the Navy had the option of using competition between the two shipyards in determining who would build the later ships in the program.

Supporters of this approach could argue that that the FFG-62 design is the design that the Navy originally selected, following a rigorous source-selection process, as the one that could best meet the Navy's operational requirements for a frigate,⁵⁰ but that a second frigate design might be smaller and individually less expensive to procure and operate than the FFG-62 design, permitting it to serve, within the Navy's frigate force, as a less-expensive complement to the Navy's FFG-62s.

Skeptics of this approach could argue that it would increase Navy shipbuilding program management workloads by increasing the number of shipbuilding programs to be managed, and do so at a time when the Navy is facing challenges in executing its shipbuilding programs. They could also argue that building two types of frigates would reduce frigate production and life-cycle O&S economies of scale by dividing frigate acquisition into two programs, and that the reduced economies of scale could, other things held equal, increase per-ship production and life-cycle O&S costs for Navy frigates.

Potential Oversight Questions for Congress

Potential oversight questions for Congress regarding what general approach to pursue regarding frigate acquisition include the following:

• What is the analytical basis for the Navy's desire to pursue the second general approach outlined above? What formal analysis—such as an Analysis of Alternatives (AOA)—did the Navy perform to evaluate the four general approaches outlined above (and perhaps other potential approaches)? What were the findings of this analysis? Has the Navy transmitted this analysis to Congress?
• How fully and cost effectively could a combination of DDG-51s and USVs perform the missions that the Navy intends to perform with frigates?
• What are the potential impacts on per-ship FFG-62 life-cycle O&S costs of truncating FFG-62 procurement to no more than two ships?
• What are the potential impacts on per-ship frigate procurement and life-cycle O&S costs of building two types of frigates (FFG-62s and a second type)?

New Frigate Design

If the second or fourth general approach outlined in the previous section is pursued, and a new frigate design is consequently to be procured, a follow-on potential oversight issue for Congress would be whether the Navy's desired design—an FF(X) based on the NSC design—is the most cost-effective new design to procure.

Potential Design Options

Potential options for a new frigate design include but are not necessarily limited to the following:

the Multi-Mission Surface Combatant (MMSC), a variant of the LCS-1 class design with a displacement of more than 3,900 tons,⁵¹ four of which F/MM is building for the Royal Saudi Navy (Figure 6);⁵²

a frigate variant of the NSC design (the Navy's desired choice);

a reduced-cost, more lightly armed variant of the DDG-51 design whose installed systems would be less like those of a destroyer and more like those of a frigate—an option broadly similar to options for lower-cost DDG-51 variants that the Navy studied in 1991⁵³ and to the Navy's 31 Spruance (DD-963) class destroyers in their original configuration;⁵⁴

Japan's 5,400-ton⁵⁵ Mogami-class frigate design (Figure 7), or the more heavily armed 6,100-ton⁵⁶ variant of that design that Australia is procuring for its navy, with the first three to be built in Japan and the final eight to be built in Australia;⁵⁷ South Korea's 3,600-ton Daegu-class frigate design (Figure 8),⁵⁸ or a variant of that design; and European frigate designs or variants of such designs, including but not limited to the 6,400-ton Spanish F100 frigate design (which was a proposed parent design in the original FFG-62 competition) (Figure 9),⁵⁹ the newer the Spanish F110 frigate design,⁶⁰ the Spanish Alfa 3000, 4000, and 5000 frigate designs,⁶¹ the UK Type 26 and Type 31 frigate designs,⁶² and the German MEKO 200 and MEKO 400 frigate designs.⁶³

Figure 6. Multi-Mission Surface Combatant (MMSC)

Source: Cropped version of photograph accompanying "The First MMSC-1 Frigate Built by Fincantieri in the United States for the Royal Saudi Navy Was Launched," Zona Militar, December 29, 2025. A watermark on the photograph with both Arabic and English writing states, in its English portion, "Ministry of Defense."

Figure 7. Mogami-Class Frigate

Source: Cropped version of photograph accompanying Eric Wertheim, "Japan's Multimission Mogami-class Frigates," U.S. Naval Institute Proceedings, September 2023. The caption to the photograph credits the photograph to Arjun Sarup.

General observations that might be made about the above-listed options for a new frigate design include but are not necessarily limited to the following:

• These potential design options are varied in ship sizes, capabilities, estimated or known procurement and life-cycle O&S costs, program-execution risks (i.e., risks of cost growth, schedule slippage, or technical challenges), and potential implications for the U.S. shipbuilding industrial base.
• The foreign designs might not meet certain U.S. Navy design standards, such as those relating to ship survivability.
• The three listed U.S. designs—the MMSC, the frigate variant of the NSC design, and the reduced-cost, more lightly armed variant of the DDG-51 design—could benefit from production and life-cycle O&S economies of scale with the existing Navy and Coast Guard ships from which they would be derived (the Navy's LCS-1 class, the Coast Guard's NSCs, and the Navy's DDG-51s, respectively).
• Compared with building a U.S. design in one or more U.S. shipyards, some of the foreign designs, if built in foreign shipyards, might have lower unit procurement costs due in part to lower labor costs in foreign shipyards compared with labor costs in U.S. shipyards,
• Compared with the U.S. designs, the foreign designs might offer less potential for creating life-cycle O&S economies of scale in conjunction with existing U.S. Navy and Coast Guard ships due to differences from existing U.S. Navy and Coast Guard ships regarding installed systems and components.
• The supply chains for supporting the foreign designs could reside at least partially, and perhaps to a large degree, in the countries where the designs were developed, which could pose risks during conflicts for supporting U.S. Navy ships built to a foreign design, unless investment is made to establish a U.S.-based supply chain for the ships.

Figure 8. Daegu-Class Frigate

Source: Photograph accompanying "Daegu class (FFG-II) Guided Missile Frigate," Seaforces, undated, accessed January 1, 2026. The caption to the photograph credits the photograph to "Republic of Korea Armed Forces/ CC."

Potential Oversight Questions for Congress

Potential oversight questions for Congress regarding options for a new frigate design include the following:

• What is the analytical basis for the Navy's selection of a frigate variant of the NSC design as the new frigate design? What formal analysis—such as an Analysis of Alternatives (AOA)—did the Navy perform to evaluate the design options listed above (and perhaps other options)? What were the findings of this analysis? Has the Navy transmitted this analysis to Congress?
• As noted earlier, Secretary of the Navy Phelan has stated that the FFG-62 design would have a cost 80% of that of a destroyer while providing 60% of the capability of a destroyer. What are the corresponding percentage figures for a frigate variant of the NSC design and for the other above-listed design options?
• As noted earlier, the frigate variant of the NSC design, according to a senior official, reportedly will meet the CNO's requirements for a small surface combatant. As also noted earlier, the frigate variant of the NSC design will be smaller than the FFG-62 design, and might thus be less heavily armed than the FFG-62 design. Are the CNO's requirements for a small surface combatant the same as the requirements that were used earlier in originally selecting the FFG-62 design? If so, then was the FFG-62 design excessively large and expensive for meeting those requirements? If the CNO's requirements for a small surface combatant are not the same as those that were used earlier in originally selecting the FFG-62 design, how were the CNO's requirements determined, and have they been set forth in a formal requirements document?

Figure 9. Álvaro de Bazán-class F100 Frigate

Source: Photograph accompanying Defence24, "Navantia Showcasing Its Miecznik Proposal in Warsaw. Aegis offered for Poland," Defence24.com, December 15, 2021. The caption to the photograph credits the photograph to "NATO Maritime Group 2 via US Navy."

A December 22, 2025, blog entry states the following regarding the comparative capabilities of the FFG-62 design and the proposed NSC-based FF(X) design:

The U.S. Navy has confirmed to TWZ [The War Zone] that the armament package for its first "flight" of its new FF(X) frigates will not include a built-in Vertical Launch System (VLS).…

A lack of any type of VLS on the FF(X) design is a glaring omission that can only raise questions about the operational utility and flexibility of the ships. At the same time, the new frigates will be able to carry modular payloads, including containerized missile launchers, on their sterns. The Navy also has an explicit plan to employ the FF(X)s as "motherships" for uncrewed surface vessels (USV), likely offering a distributed arsenal, as well as additional sensors, for the frigates to leverage during operations….

"The initial flight of FF(X) will have a 57mm gun, 2 x 30mm guns, a Mk 49 Rolling Airframe Missile [launcher], various countermeasures, and a flight deck from which to launch helicopters and unmanned systems. Aft of the flight deck, there will be a flexible weapons system, which can accommodate containerized payloads (Counter-UAS [counter-unmanned aerial systems], other missiles)," a Navy spokesperson told TWZ today. "Much like the successful DDG-51 [Arleigh Burke class destroyer] program, we are building this in flights. The frigate will be upgraded over successive flights to evolve and has the space reservations needed to improve capability over time."…

Overall, the Mk 41 VLS requirement was central to the FFG(X) program that led to the Constellation class design. This was viewed as a key element of righting the wrongs of the Navy's chronically underperforming Littoral Combat Ship (LCS) program. The Independence class and Freedom class LCSs both lack a VLS array. In addition, it's worth remembering here that HII's losing FFG(X) bid was notably a Patrol Frigate concept derived from the National Security Cutter that featured a VLS….

Integrating a VLS into future flights of FF(X) frigates is certainly an option, but one that could be complex and costly if the design is not configured to accommodate one to begin with….

Installing missile launchers on the FF(X)'s fantail would give the ships a boost in firepower in the absence of an integrated VLS array. Renderings so far have shown what look to be launchers for up to 16 Naval Strike Missiles (NSM) installed in that position.… There also looks to be space there for a least one containerized Mk 70 Payload Delivery Systems (PDS), another capability the Navy is already acquiring. Each Mk 70 contains a four-cell launcher derived from the Mk 41 VLS, and similarly capable of firing a variety of weapons, including SM-6 multi-purpose missiles and Tomahawk land-attack cruise missiles….

"The FF(X) will be designed to command groups of unmanned vessels, acting as a sort of 'mothership,' providing the commander tailored force packages based upon the weapons and sensors fielded on those unmanned craft," a Navy spokesperson also told TWZ today.

In this way, an FF(X) could still call upon a deeper and more flexible array of weapon options without having to have a VLS integrated directly onto the ship. The uncrewed platforms would also be able to operate across a much broader area than any single crewed frigate and present a different risk calculus for operating in higher-risk environments. All of this would expand the overall reach of the combined force and present targeting challenges for opponents. But there are also substantial development and operational risks with this kind of arrangement. As it sits, this kind of autonomous vessel and manned vessel teaming is still in development. Operationally, leaving the ship without, or with very limited, area defense capability is at odds with many future threat scenarios….

Even with all this in mind, the lack of a VLS still raises significant questions about the FF(X) plans, especially about the ability of the ships to operate more independently. This has been a key issue for the Navy's existing LCS fleets, and one that the Constellation class was supposed to help address….

… While expanded [FF(X)] variants in the future [that are equipped] with VLS arrays and more exquisite combat systems seem like a real possibility, when it comes to installed armament, America's next frigate is set to be just as lightly armed as the LCS that came before it.⁶⁴

Sole-Source or Competitive Contract Award for First Ship

Another potential oversight issue for Congress is whether a contract to build the first ship of a new frigate design should be awarded on a sole-source basis or competitive basis. As noted earlier, a December 19, 2025, press report quoted a "senior official" as stating: "We will initially sole-source the lead ship to Ingalls, but we will move to competition as soon as possible."⁶⁵ A potential alternative to a sole-source award for the first ship would be for the government to purchase the data rights to the selected frigate design (if the government does not already own the data rights) and hold a competition among multiple shipbuilders to build the first ship to that design.

Supporters of a sole-source award could argue that it will help reduce the construction timeline for the first ship, and that it is uncertain that holding a competition would have a meaningful impact on reducing contract price. Supporters of a competitive award could argue that a sole-source award would deprive the Navy of an opportunity to use competitive leverage to minimize the contract price, and that having that leverage would be more important than the additional time needed to hold a competition. Potential questions for Congress include the following:

• What analysis did the Navy perform to evaluate the question of whether to employ a sole-source approach or a competitive approach for awarding the contract to build the first ship of a new frigate design, and what were the findings of this analysis in terms of factors such as contract price and first-ship construction timeline?
• When would a second shipyard be brought into the effort to build a new frigate design?

Potential Participation of Foreign Shipyards

Another potential oversight issue for Congress is whether foreign shipyards should play a role in building frigates for the U.S. Navy. Such a role could involve building either entire frigates or frigate ship sections (sometimes called ship modules or ship blocks) that would be transported to a final-assembly shipyard in the United States. Building ships sections in one yard for transportation to a final assembly yard would be a form of what is referred to as distributed production or federated shipbuilding. The Navy currently uses distributed production/federated shipbuilding for its Virginia- and Columbia-class submarine construction programs.⁶⁶

As discussed at length in another CRS report, U.S. Navy shipbuilding programs in some cases are being slowed or limited by U.S. shipbuilding industrial base capacity constraints.⁶⁷ Concerns over this situation are heightened by the pace of China's naval shipbuilding effort.⁶⁸ President Trump,⁶⁹ some other U.S. officials,⁷⁰ and other observers⁷¹ have suggested or advocated using foreign shipyards—particularly shipyards in South Korea and/or Japan—to build ships for the U.S. Navy, at least as a stop-gap measure until U.S. shipbuilding capacity constraints can be alleviated. Other observers oppose proposals for using foreign shipyards to build ships for the U.S. Navy.⁷²

10 U.S.C. 8679 prohibits the construction of vessels for U.S. armed forces, or the major components of the hull or the superstructures of such vessels, in foreign shipyards. The statute includes a presidential waiver for the national security interest. The phrase major component of the hull can be viewed as including, among other things, ship sections. The full text of the statute as of January 2, 2026, is as follows:

§8679. Construction of vessels in foreign shipyards: prohibition

(a) Prohibition.-Except as provided in subsection (b), no vessel to be constructed for any of the armed forces, and no major component of the hull or superstructure of any such vessel, may be constructed in a foreign shipyard.

(b) Presidential Waiver for National Security Interest. (1) The President may authorize exceptions to the prohibition in subsection (a) when the President determines that it is in the national security interest of the United States to do so.

(2) The President shall transmit notice to Congress of any such determination, and no contract may be made pursuant to the exception authorized until the end of the 30-day period beginning on the date on which the notice of the determination is received by Congress.

(c) Exception for Inflatable Boats. An inflatable boat or a rigid inflatable boat, as defined by the Secretary of the Navy, is not a vessel for the purpose of the restriction in subsection (a).

In addition to 10 U.S.C. 8679, a recurring provision in the annual DOD Appropriations Act has prohibited funds appropriated each year for the Navy's shipbuilding account—the Shipbuilding and Conversion, Navy (SCN) appropriation account—from being used to build naval vessels or the major components of naval vessels in foreign shipyards or other foreign facilities. The provision has not included a presidential waiver. The phrase major components can be viewed as including, among other things, ship sections. The text of the provision, which appears in the paragraph of the DOD appropriations act that makes appropriations for the SCN account, has been as follows:

… Provided further, That none of the funds provided under this heading [i.e., the heading for the SCN account] for the construction or conversion of any naval vessel to be constructed in shipyards in the United States shall be expended in foreign facilities for the construction of major components of such vessel: Provided further, That none of the funds provided under this heading shall be used for the construction of any naval vessel in foreign shipyards:…

Supporters of having foreign shipyards contribute to the construction of frigates for the U.S. Navy could argue that the Navy's force of 32 small surface combatants (SSCs) at the start of FY2026 is less than half of the Navy's 73-ship force-level goal for such ships; that in light of China's naval shipbuilding effort, closing this shortfall is a matter of some urgency; and that given the time needed to alleviate constraints on U.S. shipbuilding capacity (particularly limits on numbers of available workers and the productivity of recently hired workers), there are few apparent options other than using foreign shipyards for quickly expanding the shipbuilding capacity engaged in building ships for the U.S. Navy. They could argue that involving foreign shipyards in the frigate-building effort could be a stop-gap measure to be employed until U.S. shipbuilding capacity is increased, and that for similar reasons, Finnish shipyards are being brought into the effort to build new icebreakers for the U.S. Coast Guard.⁷³ They could argue that foreign shipyards in some cases have lower shipbuilding costs than U.S. shipyards, due in part to lower labor costs, and that involving foreign shipyards in the U.S. Navy's frigate-building effort could therefore reduce frigate procurement costs for the U.S. Navy.

Skeptics of having foreign shipyards contribute to the construction of frigates for the U.S. Navy could argue that the Navy can use destroyers and other forces to compensate for its current shortfall in SSCs; that the Navy and industry are taking numerous steps to alleviate constraints on U.S. shipbuilding capacity;⁷⁴ that diverting some of the work involved in building frigates to foreign shipyards could weaken the U.S. shipbuilding industrial base by depriving the U.S. shipbuilding industry of work that would support efforts to alleviate those constraints; that involving foreign shipyards in the frigate-building effort, even if described as a stop-gap measure, could set a precedent for involving foreign shipyards in other U.S. Navy shipbuilding programs, which could further weaken the U.S. shipbuilding industrial base; and that involving foreign shipyards in the frigate-building effort could add to Navy shipbuilding program management workloads, and do so at a time when the Navy is facing challenges in executing its shipbuilding programs.

Unexpended FFG-62 Procurement Funds

Another potential oversight issue for Congress is whether unexpended funds for the FFG-62 program—particularly funds appropriated for procuring the third though sixth FFG-62s—should be rescinded or reprogrammed to other uses, and if the latter, then what those other uses should be. The Navy's FY2026 budget submission shows that a total of about $7.7 billion was appropriated for procurement of FFG-62s through FY2025, including about $5.0 billion for the third through sixth ships in the program. Potential oversight issues for Congress include the following:

• How much FFG-62 procurement funding appropriated in FY2025 and prior years has not been expended and would become available for other uses if the third through sixth ships in the program were canceled? How much additional unexpended procurement funding would become available for other uses if the first and/or second ships in the program were also canceled?
• What would be the most cost-effective uses of unexpected FFG-52 procurement funding? What are the Navy's proposed uses?

Near-Term Support for F/MM

Another potential oversight issue for Congress concerns how to support F/MM in the near term, while policymakers assess how F/MM's shipbuilding capability could be used over the longer run. Under the Navy's desired approach for frigate acquisition, construction of the first two FFG-62s, which was underway as of November 2025, would continue but remain under review. As discussed earlier, the continuation, for now at least, of construction work on the first two FFG-62s reportedly is intended to support F/MM in the near term, while policymakers assess how F/MM's shipbuilding capability could be used over the longer run. Other options for supporting F/MM in the near term—which could be pursued either in lieu of or in conjunction with continued construction work on the first two FFG-62s—include but are not necessarily limited to the following:

• building for the U.S. Navy Multi-Mission Surface Combatants (MMSCs) that would be in addition to the four MMSCs that F/MM is building for the Royal Saudi Navy;
• building ship sections of other kinds of Navy ships, including but not limited to
• DDG-51 ship sections, so as to increase the annual production rate of DDG-51s, which is below the annual procurement rate for DDG-51s, leading to a growing backlog of numbers of DDG-51s that have been procured but not yet completed;⁷⁵ and
• Virginia-class attack submarine sections, so as to help increase the annual production rate of Virginia-class submarines, which is below the annual procurement rate for Virginia-class submarines, leading to a growing backlog of numbers of Virginia-class submarines that have been procured but not yet completed; and
• participating in other Navy shipbuilding programs, including but not necessarily limited to those for building amphibious ships,⁷⁶ medium landing ships (LSMs),⁷⁷ or USVs.⁷⁸

Continuing construction work on the first two FFG-62s would permit F/MM to fully use materials and components that have been procured for those two ships, and produce two frigates for the Navy, reducing the Navy's shortfall of small surface combatants (SSCs) relative to its stated force-level goal for SSCs. As discussed earlier in this report, a two-ship FFG-62 class could have elevated per-ship life cycle O&S costs due to the limited O&S economies of scale for a two-ship class. As also discussed earlier, the issue of elevated FFG-62 per-ship O&S costs could be addressed by eventually selling the two FFG-62s to one or two allied or partner navies that might need only one or two such ships to meet their own mission needs. Potential oversight questions for Congress include the following:

• Would continued construction of the first two FFG-62s in conjunction with F/MM's construction of MMSCs for the Royal Saudi Navy adequately support F/MM in the near term, while policymakers assess how F/MM's shipbuilding capability could be used over the longer run?
• What is the most cost-effective approach for supporting F/MM in the near term, while policymakers assess how F/MM's shipbuilding capability could be used over the longer run? What are the relative costs and benefits of supporting F/MM through continued construction of the first two FFG-62s and/or having F/MM perform other shipbuilding work for the Navy, such as the potential examples listed above?
• How much funding has been expended to purchase materials and components for the first two FFG-62s? If construction work on the first two FFG-62s were ended, how much of these materials and components could be used in other Navy shipbuilding programs?

Appendix A. Issues for Congress Prior to Navy's November 2025 Announcement This appendix discusses potential oversight issues for Congress regarding the FFG-62 program as they existed prior to the Navy's November 2025 announcement about its desire to truncate the FFG-62 program and pursue a successor frigate program. Delay in Delivery of First Ship

One potential oversight issue for Congress concerns the estimated delay in the delivery of the first ship in the program. Potential oversight questions for Congress include the following:

• What impact will the delay have on the delivery schedules for follow-on ships in the program?
• What actions do the shipyard and the Navy plan to take to address reported worker shortages at the shipyard? How long will it take for those actions to produce results, and how confident are the shipyard and the Navy that these actions will be sufficient to eliminate reported worker shortages? If these actions include increasing pay and benefits for workers at the shipyard, what impact will that have on the procurement cost of FFG-62s (or other Navy ships) built at the shipyard in coming years?
• To what degree do worker shortages at the shipyard reflect circumstances unique to the shipyard? To what degree to they reflect circumstances affecting shipyards across the country?
• What lessons for future Navy shipbuilding efforts, if any, can the shipbuilding industry and the Navy learn from the delay in the delivery of the first ship?

Potential for Cost Growth, Particularly After First 10 Ships CRS and CBO Analyses in 2020 and 2023

Another potential oversight issue for Congress concerns the potential for cost growth in the FFG-62 program, particularly after the first 10 ships in the program, which are to be procured under a fixed-price incentive (firm target) contract. As discussed in greater detail in earlier versions of this CRS report,⁷⁹ CRS and CBO analyses done in 2020 suggested that if FFG-62s were to wind up costing about the same to construct per thousand tons of displacement as other recent U.S. military surface combatants, then FFG-62s could cost substantially more to build than their budgeted unit procurement costs:

• The preliminary CRS analysis, done by CRS following the Navy's April 30, 2020, contract award in the FFG-62 program, suggested that if FFG-62s were to wind up costing about the same to construct per thousand tons of displacement as other recent U.S. military surface combatants, then the third and subsequent FFG-62s could cost 17% to 56% more than the budgeted estimates for those ships in the Navy's FY2021 budget submission.
• A follow-on and more refined analysis of the issue that was done by CBO and released on October 13, 2020,⁸⁰ and which also compared the Navy's FFG-62 budgeted cost estimate to actual costs for building other recent U.S. military surface combatants, estimated that the first 10 FFG-62s would cost 40% more to build than the Navy estimates.
• An October 2023 CBO report on the cost of the Navy's FY2024 30-year shipbuilding plan, based on updated Navy and CBO figures, estimated that FFG-62s on average will cost 10% to 20% more than the updated Navy estimates.⁸¹

May 2024 GAO Report

The May 2024 GAO report on the FFG-62 program stated that in October 2023, the FFG-62 shipbuilder reported "unplanned weight growth in the frigate design—an increase of over 10 percent above the shipbuilder's June 2020 weight estimate."⁸² Since ship procurement costs are generally proportional to ship displacement (i.e., weight), this weight growth suggests a potential for cost growth beyond the above-discussed figures in the 2020 and 2023 CRS and CBO analyses.

Potential Consequences of Cost Growth

Depending on the exact terms of the fixed-price incentive (firm target) contract that the Navy awarded to F/MM for the first 10 ships in the FFG-62 program, some portion (perhaps much) of any cost growth that might occur on the first 10 FFG-62s could be borne by F/MM rather than the Navy, although F/MM under such a circumstance might also have the option of seeking some form of contractual relief from the Navy, which if granted could shift at least some of the cost growth back to the government.⁸³ If F/MM were to bear most or all of any cost growth that might occur on the first 10 FFG-62s, then cost growth in the FFG-62 program, if it were to occur, might not affect Navy budgeting substantially until the 11^th ship in the program. Under the Navy's FY2025 budget submission, the 11^th ship in the program was scheduled to be the first of the two ships that are programmed for procurement in FY2028.

Potential Oversight Questions

Potential oversight questions for Congress include the following:

• What is the Navy's basis for its view that FFG-62s—ships that are to be about three-quarters as large as U.S. Navy's new Flight III Arleigh Burke (DDG-51) class destroyers⁸⁴ in terms of displacement, and with installed capabilities that are in many cases similar to those of DDG-51s—can be procured for less than one-half the cost of Flight III DDG-51s?
• Under the terms of the fixed-price incentive (firm target) contract that the Navy awarded to F/MM for the FFG-62 program, what portion of any cost growth that might occur on the first 10 FFG-62s might be borne by F/MM, and what portion might be borne by the Navy?
• If the budgeted procurement costs of FFG-62s rise substantially starting with the 11^th ship in the program, what impact, if any, would that have on the Navy's ability to afford other Navy program priorities? What impact, if any, would it have on the cost effectiveness of the FFG-62 program relative to other Navy investments?

Whether and When to Introduce a Second Shipyard into Program

Another potential oversight issue for Congress is whether and when to introduce a second shipyard into the FFG-62 program. The Navy's FFG-7s, which were procured at annual rates of as high as eight ships per year, were built at three shipyards. As noted earlier, the Navy's baseline plan for the FFG-62 program envisaged using a single builder at any one time to build FFG-62s, but Navy officials have also spoken about the option of bringing a second shipyard into the program at some point, particularly if annual procurement rates for FFG-62s rise above two ships per year.

In considering whether to build FFG-62s at a single shipyard or at two shipyards, Congress may consider several factors, including but not limited to the annual FFG-62 procurement rate, shipyard production capacities and production economies of scale, the potential costs and benefits in the FFG-62 program of employing recurring competition between multiple shipyards, and how the number of FFG-62 builders might fit into a larger situation involving the production of other Navy and Coast Guard ships, including Navy DDG-51 destroyers, Navy amphibious ships, and Coast Guard Offshore Patrol Cutters (OPCs).⁸⁵

Number of VLS Tubes

Another potential oversight issue for Congress—one discussed in this CRS report since April 2019⁸⁶—concerns the number of vertical launch system (VLS) missile tubes in the FFG-62 design. The VLS is the FFG-62's principal (though not only) means of storing and launching missiles. FFG-62s are to each be equipped with 32 Mark 41 VLS tubes. (The Mark 41 is the Navy's standard VLS design.)

Supporters of requiring each FFG-62 to be equipped with a larger number of VLS tubes, such as 48, might argue that FFG-62s are to be roughly three-quarters as large as the Navy's DDG-51 class destroyers, and might therefore be more appropriately equipped with at least 48 VLS tubes, which is one-half the number on recent DDG-51s. They might also argue that in a context of renewed great power competition with potential adversaries such as China, which is steadily improving its naval capabilities,⁸⁷ it might be prudent to equip each FFG-62 with 48 rather than 32 VLS tubes each, and that doing so might only marginally increase FFG-62 unit procurement costs. They might also argue that equipping each FFG-62 with 48 rather than 32 VLS tubes will permit the Navy to more fully offset a substantial reduction in VLS tubes that the Navy's surface fleet is projected to experience when the Navy's 22 Ticonderoga (CG-47) class cruisers, which are each equipped with 122 VLS tubes, are retired,⁸⁸ and provide a hedge against the possibility that Navy plans to field VLS tubes on Large Unmanned Surface Vehicles (LUSVs)⁸⁹ will be slowed or curtailed for technical or other reasons.

Supporters of having each FFG-62 be equipped with 32 VLS tubes might argue that the analyses indicating a need for 32 VLS tubes already took improving adversary capabilities (as well as other U.S. Navy capabilities) into account. They might also argue that FFG-62s, in addition to having 32 VLS tubes, will also to have separate, deck-mounted box launchers for launching 16 anti-ship cruise missiles, as well as a separate, 21-cell Rolling Airframe Missile (RAM) AAW missile launcher; that Navy plans continue to call for eventually deploying additional VLS tubes on LUSVs, which are to act as adjunct weapon magazines for the Navy's manned surface combatants; and that increasing the number of VLS tubes on each FFG-62 from 32 to 48 would increase (even if only marginally) the procurement cost of a ship that is intended to be an affordable supplement to the Navy's cruisers and destroyers.

A May 14, 2019, Navy information paper on the cost impact of expanding the FFG-62 VLS capacity from 32 cells to 48 cells states

To grow from a 32 Cell VLS to a 48 Cell VLS necessitates an increase in the length of the ship with a small beam increase and roughly a 200-ton increase in full load displacement. This will require a resizing of the ship, readdressing stability and seakeeping analyses, and adapting ship services to accommodate the additional 16 VLS cells.

A change of this nature would unnecessarily delay detail design by causing significant disruption to ship designs. Particularly the smaller ship designs. Potential competitors have already completed their Conceptual Designs and are entering the Detail Design and Construction competition with ship designs set to accommodate 32 cells.

The cost is estimated to increase between $16M [million] and $24M [million] per ship. This includes ship impacts and additional VLS cells.⁹⁰

Compared to an FFG-62 follow-on ship unit procurement cost of roughly $1.1 billion to $1.2 billion, the above estimated increase of $16 million to $24 million would equate to an increase in unit procurement cost of about 1.3% to about 2.2%.⁹¹ The estimated figure of $16 million to $24 million, however, dates to 2019. Inflating it to current costs would produce a percentage increase in total ship procurement cost that would be somewhat greater than 1.3% to 2.2%.

Technical Risk

Another potential oversight issue for Congress concerns technical risk in the FFG-62 program.

June 2025 and May 2024 GAO Reports

Regarding GAO's perspective on technical risk in the FFG-62 program, see the quoted passages from the June 2025 and May 2024 GAO reports on the FFG-62 program presented earlier in this CRS report.

January 2024 DOT&E Report

A January 2024 report from DOD's Director, Operational Test and Evaluation (DOT&E)—DOT&E's annual report for FY2023⁹²—stated the following regarding the FFG-62 program:

TEST ADEQUACY

In March 2023, DOT&E published a classified FFG 62 EOA [early operational assessment] report based on evaluations conducted between February 2022 and July 2022 and detailed in the FY22 Annual Report. Evaluations were adequate to determine potential FFG 62 design risks that could affect operational effectiveness and suitability of the delivered ship. The EOA provides the FFG 62 Program with an opportunity to consider modifications to the ship design. The FFG 62 Program will also use the EOA to inform development of the next TEMP [test and evaluation master plan] revision expected to be completed in FY25. The Navy conducted the EOA in accordance with a DOT&E-approved test plan, and it was observed by DOT&E.

In FY23, the Navy conducted testing against a large scale-model of a generic ship incorporating characteristics typical of Navy standard ship structure and a responding mid-deck plate to generate response data for under-bottom explosions. This test was similar to the test detailed in the FY22 Annual Report but focused on different structure response. Data from these tests provide validation data for survivability models used to predict the magnitude and extent of damage from underwater threat weapons. The Navy conducted this test in accordance with the DOT&E-approved test plan, and it was observed by DOT&E.

In FY23, the FFG 62 Program approved the FFG 62 Verification, Validation, and Accreditation (VV&A) Plans for the Advanced Survivability Assessment Program (ASAP) and Navy Enhanced Sierra Mechanics (NESM) M&S [modeling and simulation] tools. These plans are adequate to determine the sufficiency of these M&S within the LFT&E [live fire test and evaluation] test strategy. Further, the Navy continued M&S modification that incorporates new capabilities, including improvements in the blast and whipping codes. The Navy is working closely with DOT&E on the development of M&S plans to support the Detail Design Survivability Assessment Report that the FFG 62 Program expects to publish in FY26.

PERFORMANCE

EFFECTIVENESS

No data are available to determine FFG 62 operational effectiveness due to FFG 62 being in development. However, the FFG 62 design presents risks to operational effectiveness in each of its primary mission areas: air warfare, anti-submarine warfare, and surface warfare. Classified risks to operational effectiveness are in the FFG 62 EOA report. Unclassified risks to operational effectiveness include that the FFG 62 design does not have a tracker illuminator system, which is typically installed on other Aegis platforms, and that the design crew size will be highly reliant on currently unproven system automation and human system interfaces. The Navy acknowledges the risk of the current crewing strategy for FFG 62 and is working with the appropriate stakeholders to mitigate and eliminate the associated risk to mission performance. Further, the FFG 62 Program reports that they currently have sufficient access to technical information on the Thales CAPTAS-4 [variable-depth sonar] needed to effectively integrate it with the AN/SQQ-89(V)16 [undersea warfare] system.

SUITABILITY

No data are available to determine FFG 62 operational suitability due to FFG 62 being in development. Further, reliability, maintainability, and availability data for hull, mechanical, and electrical systems are not yet available to identify associated risk in the FFG 62 design.

SURVIVABILITY

No data are available to determine the cyber survivability of FFG 62 due to its early stage of development. Cyber survivability was not assessed during the EOA.

Insufficient data are available to determine FFG 62 survivability due to ongoing LFT&E. The Navy continued to close outstanding vulnerability knowledge gaps and support validation of survivability M&S through additional large-scale underwater explosion testing in FY23.

RECOMMENDATIONS

The Navy should:

1. Provide an update to the FFG 62 TEMP that includes the strategy to test anti-air warfare mission capability.

2. Continue to monitor the development of the mission system autonomy/automation components in the ship design to minimize risk to mission performance and system maintenance capability, and if necessary, complete a reassessment of the adequacy of crew sizing to allow opportunity to incorporate modifications of the ship design, should additional crewing be required to support all intended missions.⁹³

Appendix B. Guaranty vs. Warranty in Construction Contract

This appendix presents background information regarding the Navy's use of a guaranty rather than a warranty in the Detail Design and Construction (DD&C) contract for the first 10 ships in the FFG-62 program. An August 2019 GAO report on the FFG-62 program states

The Navy plans to use a fixed-price incentive contract for FFG(X) detail design and construction. This is a notable departure from prior Navy surface combatant programs that used higher-risk cost-reimbursement contracts for lead ship construction. The Navy also plans to require that each ship has a minimum guaranty of $5 million to correct shipbuilder-responsible defects identified in the 18 months following ship delivery. However, Navy officials discounted the potential use of a warranty—another mechanism to address the correction of shipbuilder defects—stating that their use could negatively affect shipbuilding cost and reduce competition for the contract award. The Navy provided no analysis to support these claims and has not demonstrated why the use of warranties is not a viable option. The Navy's planned use of guarantees helps ensure the FFG(X) shipbuilder is responsible for correcting defects up to a point, but guarantees generally do not provide the same level of coverage as warranties. GAO found in March 2016 that the use of a guaranty did not help improve cost or quality outcomes for the ships reviewed. GAO also found the use of a warranty in commercial shipbuilding and certain Coast Guard ships improves cost and quality outcomes by requiring the shipbuilders to pay to repair defects. The FFG(X) request for proposal offers the Navy an opportunity to solicit pricing for a warranty to assess the cost-effectiveness of the different mechanisms to address ship defects.⁵³

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As discussed in another CRS report,⁵⁴95 in discussions of Navy (and also Coast Guard) shipbuilding, a question that sometimes arises is whether including a warranty in a shipbuilding contract is preferable to not including one. The question can arise, for example, in connection with a GAO finding that "the Navy structures shipbuilding contracts so that it pays shipbuilders to build ships as part of the construction process and then pays the same shipbuilders a second time to repair the ship when construction defects are discovered."⁵⁵

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Including a warranty in a shipbuilding contract (or a contract for building some other kind of defense end item), while potentially valuable, might not always be preferable to not including one—it depends on the circumstances of the acquisition, and it is not necessarily a valid criticism of an acquisition program to state that it is using a contract that does not include a warranty (or a weaker form of a warranty rather than a stronger one).

Including a warranty generally shifts to the contractor the risk of having to pay for fixing problems with earlier work. Although that in itself could be deemed desirable from the government's standpoint, a contractor negotiating a contract that will have a warranty will incorporate that risk into its price, and depending on how much the contractor might charge for doing that, it is possible that the government could wind up paying more in total for acquiring the item (including fixing problems with earlier work on that item) than it would have under a contract without a warranty.

When a warranty is not included in the contract and the government pays later on to fix problems with earlier work, those payments can be very visible, which can invite critical comments from observers. But that does not mean that including a warranty in the contract somehow frees the government from paying to fix problems with earlier work. In a contract that includes a warranty, the government will indeed pay something to fix problems with earlier work—but it will make the payment in the less-visible (but still very real) form of the up-front charge for including the warranty, and that charge might be more than what it would have cost the government, under a contract without a warranty, to pay later on for fixing those problems.

From a cost standpoint, including a warranty in the contract might or might not be preferable, depending on the risk that there will be problems with earlier work that need fixing, the potential cost of fixing such problems, and the cost of including the warranty in the contract. The point is that the goal of avoiding highly visible payments for fixing problems with earlier work and the goal of minimizing the cost to the government of fixing problems with earlier work are separate and different goals, and that pursuing the first goal can sometimes work against achieving the second goal.⁵⁶

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DOD's guide on the use of warranties states the following:

Federal Acquisition Regulation (FAR) 46.7 states that "the use of warranties is not mandatory." However, if the benefits to be derived from the warranty are commensurate with the cost of the warranty, the CO [contracting officer] should consider placing it in the contract. In determining whether a warranty is appropriate for a specific acquisition, FAR Subpart 46.703 requires the CO to consider the nature and use of the supplies and services, the cost, the administration and enforcement, trade practices, and reduced requirements. The rationale for using a warranty should be documented in the contract file....

In determining the value of a warranty, a CBA [cost-benefit analysis] is used to measure the life cycle costs of the system with and without the warranty. A CBA is required to determine if the warranty will be cost beneficial. CBA is an economic analysis, which basically compares the Life Cycle Costs (LCC) of the system with and without the warranty to determine if warranty coverage will improve the LCCs. In general, five key factors will drive the results of the CBA: cost of the warranty + cost of warranty administration + compatibility with total program efforts + cost of overlap with Contractor support + intangible savings. Effective warranties integrate reliability, maintainability, supportability, availability, and life-cycle costs. Decision factors that must be evaluated include the state of the weapon system technology, the size of the warranted population, the likelihood that field performance requirements can be achieved, and the warranty period of performance.⁵⁷

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In response to a draft version of GAO's August 2019 report, the Navy stated

As a part of the planning for the procurement of detail design and construction for FFG(X), the Navy determined that a guaranty, rather than a commercial-type warranty, will be implemented for the program. As a part of the FFG(X) detail design and construction request for proposals [RFP] released on June 20, 2019, the Navy asked contractors to include a limit of liability of at least $5 million per ship and a guaranty period of 18 months beyond preliminary acceptance of each ship. Further, the solicitation allows offerors to propose as additional limit of liability amount beyond the required $5 million amount, up to and including an unlimited liability. This arrangement represents an appropriate balance between price considerations and risks, ensuring that the shipbuilder is accountable for the correction of defects that follow preliminary acceptance, while allowing each shipbuilder to use its own business judgement in proposing the value of the limit of liability. The Navy released the solicitation prior to this GAO recommendation and is unable to modify the current solicitation because it would cause an unacceptable delay to the FFG(X) program.

To support the GAO recommendation to request pricing for an unlimited warranty, the Navy will request pricing for unlimited warranty before exercising the first ship option and evaluate the business case.⁵⁸

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