Navy Force Structure and Shipbuilding Plans:
Background and Issues for Congress
Ronald O'Rourke
Specialist in Naval Affairs
March 1, 2013
Congressional Research Service
7-5700
www.crs.gov
RL32665
CRS Report for Congress
Pr
epared for Members and Committees of Congress
Navy Force Structure and Shipbuilding Plans: Background and Issues for Congress
Summary
Navy officials state that although there is much current focus on the potential impacts on the
military services of a sequestration of FY2013 DOD funding, the Navy is equally (if not more)
concerned about the potential impact on the Navy of an extension of the current continuing
resolution, or CR (H.J.Res. 117/P.L. 112-175 of September 28, 2012), through the end of the
fiscal year. Shipbuilding and related programs that could experience execution problems under a
year-long CR include the CVN-78 aircraft carrier program, the CVN Refueling Complex
Overhaul (RCOH) program, the DDG-51 program, the DDG-1000 program, an amphibious
assault ship (LHA) funded in a prior year, and the Moored Training Ship. On February 8, 2013,
the Navy announced that, due to a lack of funding under the CR, it has postponed the RCOH of
the aircraft carrier CVN-72. A sequester on FY2013 DOD funding could cause additional
program-execution problems in Navy shipbuilding programs.
The planned size of the Navy, the rate of Navy ship procurement, and the prospective
affordability of the Navy’s shipbuilding plans have been matters of concern for the congressional
defense committees for the past several years. In January 2013, the Navy presented to Congress a
goal of achieving and maintaining a fleet of 306 ships, consisting of certain types and quantities
of ships. The Navy’s proposed FY2013 budget requests funding for the procurement of 10 new
battle force ships (i.e., ships that count against the 306 ship goal). The 10 ships include one
Gerald R. Ford (CVN-78) class aircraft carrier, two Virginia-class attack submarines, two DDG-
51 class Aegis destroyers, four Littoral Combat Ships (LCSs), and one Joint High Speed Vessel
(JHSV). These ships are funded through the Shipbuilding and Conversion, Navy (SCN) account.
The FY2013-FY2017 five-year shipbuilding plan contains a total of 41 ships—14 ships, or about
25%, less than the 55 ships in the FY2012 five-year (FY2012-FY2016) shipbuilding plan, and 16
ships, or about 28%, less than the 57 ships that were planned for FY2013-FY2017 under the
FY2012 budget. Of the 16 ships no longer planned for FY2013-FY2017, 9 were eliminated from
the Navy’s shipbuilding plan and 7 were deferred to years beyond FY2017. The Navy’s proposed
FY2013 budget also proposes the early retirement of seven Aegis cruisers and the placement into
Reduced Operating Status (ROS) of two LSD-type amphibious ships.
The Navy’s FY2013 30-year (FY2013-FY2042) shipbuilding plan, which was submitted to
Congress on March 28, 2012 (more than a month after the submission of the FY2013 budget on
February 13, 2012), does not include enough ships to fully support all elements of the Navy’s 306
ship goal over the long run. The Navy projects that the fleet would remain below 310 ships during
most of the 30-year period, and experience shortfalls at various points in cruisers-destroyers,
attack submarines, and amphibious ships.
In its July 2012 report on the cost of the FY2013 30-year shipbuilding plan, the Congressional
Budget Office (CBO) estimates that the plan would cost an average of $20.0 billion per year in
constant FY2012 dollars to implement, or about 19% more than the Navy estimates. CBO’s
estimate is about 11% higher than the Navy’s estimate for the first 10 years of the plan, about
13% higher than the Navy’s estimate for the second 10 years of the plan, and about 33% higher
than the Navy’s estimate for the final 10 years of the plan. Some of the difference between CBO’s
estimate and the Navy’s estimate, particularly in the latter years of the plan, is due to a difference
between CBO and the Navy in how to treat inflation in Navy shipbuilding.
Congressional Research Service
Navy Force Structure and Shipbuilding Plans: Background and Issues for Congress
Contents
Introduction ...................................................................................................................................... 1
Background ...................................................................................................................................... 1
Navy’s Ship Force Structure Goal ............................................................................................. 1
January 2013 Goal for Fleet of 306 Ships ........................................................................... 1
306-Ship Goal Reflects 2012 Strategic Guidance and Projected DOD Spending
Shown in FY2013 Budget ................................................................................................ 1
Goal for Fleet of 306 Ships Compared to Earlier Goals ..................................................... 2
Navy’s Five-Year and 30-Year Shipbuilding Plans ................................................................... 3
Five-Year (FY2013-FY2017) Shipbuilding Plan ................................................................ 3
30-Year (FY2013-FY2042) Shipbuilding Plan ................................................................... 6
Navy’s Projected Force Levels Under 30-Year (FY2013-FY2042) Shipbuilding Plan ............. 8
Oversight Issues for Congress ....................................................................................................... 11
Potential Impact on Shipbuilding Programs of Year-Long Continuing Resolution
(CR) and Sequester ............................................................................................................... 11
Year-Long CR ................................................................................................................... 11
Sequester ........................................................................................................................... 21
Navy Testimony, Memorandum, and Briefing Slides on Potential CR and
Sequester Impacts .......................................................................................................... 23
Future Size and Structure of Navy in Light of Strategic and Budgetary Changes .................. 23
Sufficiency of FY2013 30-Year Shipbuilding Plan ................................................................. 27
Affordability of FY2013 30-Year Shipbuilding Plan .............................................................. 28
Estimated Ship Procurement Costs ................................................................................... 29
Future Shipbuilding Funding Levels ................................................................................. 29
Near-Term Options for Adding Ships and Reducing Ship Unit Procurement Costs ............... 30
Adding a Second Virginia Class Boat in FY2014 ............................................................. 30
Adding a 10th DDG-51 to the DDG-51 MYP .................................................................... 33
Block Buy for CVN-79 and CVN-80 ................................................................................ 33
Legislative Activity for FY2013 .................................................................................................... 38
FY2013 Funding Request ........................................................................................................ 38
FY2013 National Defense Authorization Act (H.R. 4310/P.L. 112-239) ................................ 39
House ................................................................................................................................. 39
Senate (As Reported) ........................................................................................................ 43
Senate (Floor Action) ........................................................................................................ 47
Conference ........................................................................................................................ 48
FY2013 DOD Appropriations Act (H.R. 5856 of 112th Congress) .......................................... 53
House ................................................................................................................................. 53
Senate ................................................................................................................................ 55
CRS Reports Tracking Legislation on Specific Navy Shipbuilding Programs ....................... 60
Tables
Table 1. Current 306 Ship Force Structure Goal Compared to Earlier Goals .................................. 2
Table 2. Navy FY2013 Five-Year (FY2013-FY2017) Shipbuilding Plan ....................................... 4
Table 3. Navy FY2013 30-Year (FY2013-FY2042) Shipbuilding Plan .......................................... 7
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Navy Force Structure and Shipbuilding Plans: Background and Issues for Congress
Table 4. Projected Force Levels Resulting from FY2013 30-Year (FY2013-FY2042)
Shipbuilding Plan ......................................................................................................................... 9
Table 5. Recent Study Group Proposals for Navy Ship Force Structure ....................................... 25
Table 6. Navy and CBO Estimates of Cost of FY2013 30-Year (FY2013-FY2042)
Shipbuilding Plan ....................................................................................................................... 29
Table C-1. Comparison of Navy’s 306 ship goal, Navy Plan from 1993 BUR, and Navy
Plan from 2010 QDR Review Panel ........................................................................................... 69
Table D-1. Total Number of Ships in the Navy Since FY1948 ..................................................... 72
Table D-2. Battle Force Ships Procured or Requested, FY1982-FY2017 ..................................... 73
Appendixes
Appendix A. 2012 Testimony on Size of Navy Needed to Fully Meet COCOM Requests ........... 61
Appendix B. Comparing Past Ship Force Levels to Current or Potential Future Ship Force
Levels.......................................................................................................................................... 65
Appendix C. Independent Panel Assessment of 2010 QDR .......................................................... 67
Appendix D. Size of the Navy and Navy Shipbuilding Rate ......................................................... 71
Appendix E. February 12, 2013, Navy Testimony on Potential CR and Sequester Impacts ......... 74
Appendix F. February 28, 2013, Department of the Navy Testimony on Potential CR and
Sequester Impacts ....................................................................................................................... 79
Appendix G. January 25, 2013, Navy Memorandum on Potential CR and Sequester
Impacts........................................................................................................................................ 85
Appendix H. February 15, 2013, Navy Briefing Slides on Potential CR and Sequester
Impacts........................................................................................................................................ 89
Contacts
Author Contact Information......................................................................................................... 101
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Navy Force Structure and Shipbuilding Plans: Background and Issues for Congress
Introduction
This report provides background information and presents potential issues for Congress
concerning the Navy’s ship force-structure goals and shipbuilding plans. The planned size of the
Navy, the rate of Navy ship procurement, and the prospective affordability of the Navy’s
shipbuilding plans have been matters of concern for the congressional defense committees for the
past several years. Decisions that Congress makes on Navy shipbuilding programs can
substantially affect Navy capabilities and funding requirements, and the U.S. shipbuilding
industrial base.
Background
Navy’s Ship Force Structure Goal
January 2013 Goal for Fleet of 306 Ships
On January 31, 2013, in response to Section 1015 of the FY2013 National Defense Authorization
Act (H.R. 4310/P.L. 112-239 of January 2, 2013), the Navy submitted to Congress a report
presenting a goal for achieving and maintaining a fleet of 306 ships, consisting of certain types
and quantities of ships.1 The goal for a 306-ship fleet is the result of a new force structure
assessment (FSA) that the Navy completed in 2012. The Navy previously had testified to
Congress that the FSA was underway, and subsequently that the FSA was completed and that the
results were forthcoming. Section 1015 required the Navy to submit to Congress within 30 days
of the enactment of H.R. 4310/P.L. 112-239 “a comprehensive description of the current
requirements of the Navy for combatant vessels of the Navy, including submarines,” which in
effect meant the results of the FSA.
306-Ship Goal Reflects 2012 Strategic Guidance and Projected DOD Spending
Shown in FY2013 Budget
The newly completed FSA and the resulting 306-ship plan reflect the defense strategic guidance
document that the Administration presented in January 20122 and the associated projected levels
of Department of Defense (DOD) spending shown in the FY2013 budget submission. DOD
officials have stated that if planned levels of DOD spending are reduced below what is shown in
the FY2013 budget submission, the defense strategy set forth in the January 2012 strategic
guidance document might need to be changed. Such a change, Navy officials have indicated,
could lead to the replacement of the 306-ship plan of January 2013 with a new plan.
1 Department of the Navy, Report to Congress [on] Navy Combatant Vessel Force Structure Requirement, January
2013, 3 pp. The cover letters for the report were dated January 31, 2013.
2 For more on this document, see CRS Report R42146, In Brief: Assessing DOD’s New Strategic Guidance, by
Catherine Dale and Pat Towell.
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Navy Force Structure and Shipbuilding Plans: Background and Issues for Congress
Goal for Fleet of 306 Ships Compared to Earlier Goals
Table 1 compares the 306-ship goal to earlier Navy ship force structure plans.
Table 1. Current 306 Ship Force Structure Goal Compared to Earlier Goals
Changes
Early-2005
2002-
to
Navy plan
2004
2001
Revised
February
February
for fleet of
Navy QDR
306-
~310-
313-ship
2006 313-
2006
260-325
plan
plan
ship
316 ship
plan of
ship plan
Navy
ships
for
for
plan of
plan of
Septem-
announced
plan for
375-
310-
January
March
ber
through
313-ship
260-
325-
ship
ship
Ship type
2013
2012
2011
mid-2011
fleet
ships ships Navya Navy
Ballistic missile submarines
12b
12-14b 12b
(SSBNs)
12b 14
14
14
14
14
Cruise missile submarines
0c
0-4c
4c
2 or
(SSGNs)
0c 4
4
4
4
4d
Attack submarines (SSNs)
48
~48 48 48 48 37
41
55
55
Aircraft carriers
11e
11e 11e 11e 11f 10
11
12
12
Cruisers and destroyers
88
~90 94 94g 88
67
92
104
116
Frigates
0
0 0 0 0
0
0
0
Littoral Combat Ships (LCSs)
52
~55 55 55 55 63
82
56
0
Amphibious ships
33
~32 33 33h 31
17
24
37
36
MPF(F) shipsi
0j
0j
0j
0j 12i 14i 20i
0i
0i
Combat logistics (resupply) ships
29
~29 30 30 30 24
26
42
34
Dedicated mine warfare ships
0
0 0 0 0
0
0
26k 16
Joint High Speed Vessels (JHSVs)
10l
10l 10l 21l 3
0
0
0
0
Otherm
23
~23 16 24n 17
10
11
25
25
Total battle force ships
306
~310-
313
328
313
260
325
375
310
316
or
312
Sources: Table prepared by CRS based on U.S. Navy data.
Note: QDR is Quadrennial Defense Review. The “~” symbol means approximately and signals that the number
in question may be refined as a result of the Naval Force Structure Assessment currently in progress.
a. Initial composition. Composition was subsequently modified.
b. The Navy plans to replace the 14 current Ohio-class SSBNs with a new class of 12 next-generation SSBNs.
For further discussion, see CRS Report R41129, Navy Ohio Replacement (SSBN[X]) Ballistic Missile Submarine
Program: Background and Issues for Congress, by Ronald O'Rourke.
c. Although the Navy plans to continue operating its four SSGNs until they reach retirement age in the late
2020s, the Navy does not plan to replace these ships when they retire. This situation can be expressed in a
table like this one with either a 4 or a zero.
d. The report on the 2001 QDR did not mention a specific figure for SSGNs. The Administration’s proposed
FY2001 DOD budget requested funding to support the conversion of two available Trident SSBNs into
SSGNs, and the retirement of two other Trident SSBNs. Congress, in marking up this request, supported a
plan to convert all four available SSBNs into SSGNs.
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Navy Force Structure and Shipbuilding Plans: Background and Issues for Congress
e. With congressional approval, the goal has been temporarily be reduced to 10 carriers for the period
between the retirement of the carrier Enterprise (CVN-65) in December 2012 and entry into service of the
carrier Gerald R. Ford (CVN-78), currently scheduled for September 2015.
f.
For a time, the Navy characterized the goal as 11 carriers in the nearer term, and eventually 12 carriers.
g. The 94-ship goal was announced by the Navy in an April 2011 report to Congress on naval force structure
and missile defense.
h. The Navy acknowledged that meeting a requirement for being able to lift the assault echelons of 2.0 Marine
Expeditionary Brigades (MEBs) would require a minimum of 33 amphibious ships rather than the 31 ships
shown in the February 2006 plan. For further discussion, see CRS Report RL34476, Navy LPD-17 Amphibious
Ship Procurement: Background, Issues, and Options for Congress, by Ronald O'Rourke.
i.
Today’s Maritime Prepositioning Force (MPF) ships are intended primarily to support Marine Corps
operations ashore, rather than Navy combat operations, and thus are not counted as Navy battle force
ships. The planned MPF (Future) ships, however, would have contributed to Navy combat capabilities (for
example, by supporting Navy aircraft operations). For this reason, the ships in the planned MPF(F) squadron
were counted by the Navy as battle force ships. The planned MPF(F) squadron was subsequently
restructured into a different set of initiatives for enhancing the existing MPF squadrons; the Navy no longer
plans to acquire an MPF(F) squadron.
j.
The Navy no longer plans to acquire an MPF(F) squadron. The Navy, however, has procured or plans to
procure some of the ships that were previously planned for the squadron—specifical y, TAKE-1 class cargo
ships, and Mobile Landing Platform (MLP)/Afloat Forward Staging Base (AFSB) ships. These ships are
included in the total shown for “Other” ships.
k. The figure of 26 dedicated mine warfare ships included 10 ships maintained in a reduced mobilization status
cal ed Mobilization Category B. Ships in this status are not readily deployable and thus do not count as
battle force ships. The 375-ship proposal thus implied transferring these 10 ships to a higher readiness
status.
l.
Totals shown include 5 ships transferred from the Army to the Navy and operated by the Navy primarily
for the performance of Army missions.
m. This category includes, among other things, command ships and support ships.
n. The increase in this category from 17 ships under the February 2006 313-ship plan to 24 ships under the
apparent 328-ship goal included the addition of one TAGOS ocean surveillance ship and the transfer into
this category of six ships—three modified TAKE-1 class cargo ships, and three Mobile Landing Platform
(MLP) ships—that were previously intended for the planned (but now canceled) MPF(F) squadron.
Navy’s Five-Year and 30-Year Shipbuilding Plans
Five-Year (FY2013-FY2017) Shipbuilding Plan
Table 2 shows the Navy’s FY2013 five-year (FY2013-FY2017) shipbuilding plan.
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Navy Force Structure and Shipbuilding Plans: Background and Issues for Congress
Table 2. Navy FY2013 Five-Year (FY2013-FY2017) Shipbuilding Plan
(Battle force ships—i.e., ships that count against 306 ship goal)
Ship type
FY13
FY14
FY15
FY16
FY17
Total
Ford (CVN-78) class aircraft carrier
1
1
Virginia (SSN-774) class attack submarine
2
1
2
2
2
9
Arleigh Burke (DDG-51) class destroyer
2
1
2
2
2
9
Littoral Combat Ship (LCS)
4
4
4
2
2
16
LHA(R) amphibious assault ship
1
1
Fleet tug (TATF)
2
2
Mobile Landing Platform (MLP)/Afloat Forward
1 1
Staging Base (AFSB)
Joint High Speed Vessel (JHSV)
1
1
TAO(X) oiler
1
1
TOTAL
10
7
8
9
7
41
Source: FY2013 Navy budget submission.
Notes: The MLP/AFSB is a variant of the MLP with additional features permitting it to serve in the role of an
AFSB.
Observations that can be made about the Navy’s proposed five-year (FY2013-FY2017)
shipbuilding plan include the following:
• Total of 41 ships—16 ships, or 28% less than planned last year. The FY2013-
FY2017 five-year shipbuilding plan contains a total of 41 ships—14 ships, or
about 25%, less than the 55 ships in the FY2012 five-year (FY2012-FY2016)
shipbuilding plan, and 16 ships less, or about 28%, less than the 57 ships that
were planned for FY2013-FY2017 under the FY2012 budget.
• The 16 ships eliminated or deferred. Of the 16 ships that are no longer planned
for FY2013-FY2017, 9 were eliminated from the Navy’s shipbuilding plan and 7
were deferred to years beyond FY2017. The nine ships that were eliminated were
eight Joint High Speed Vessels (JHSVs) and one TAGOS ocean surveillance ship.
The seven ships that were deferred beyond FY2017 were one Virginia-class
attack submarine, two LCSs, one LSD(X) amphibious ship, and three TAO(X)
oilers.
• Average of 8.2 ships per year. The FY2013-FY2017 plan includes an average of
8.2 battle force ships per year. The previous two five-year shipbuilding plans
included an average of 10 or more battle force ships per year. Given the single-
digit numbers of battle force ships that were procured from FY1993 through
FY2010, shipbuilding supporters for some time have wanted to increase the
shipbuilding rate to 10 or more battle force ships per year. The steady-state
replacement rate for a fleet of 306 ships with an average service life of 35 years
is about 8.7 ships per year. The average shipbuilding rate since FY1993 has been
substantially below 8.7 ships per year (see Appendix D).
• Five percent reduction in large combat ships. Although the FY2013-FY2017
five-year shipbuilding plan contains about 28% fewer ships than were planned
for FY2013-FY2017 under the FY02012 budget, the percentage reduction in
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Navy Force Structure and Shipbuilding Plans: Background and Issues for Congress
large combat ships (defined here as aircraft carriers, submarines, destroyers, and
amphibious ships) was much smaller. The total number of large combat ships
planned for FY2013-FY2017 dropped from 21 in the FY2012 budget to 20 in the
FY2013 budget—a reduction of about 5%.
• Two-year stretch-out in aircraft carrier construction. Although the FY2013-
FY2017 five-year shipbuilding plan retains FY2013 as the year of procurement
for the aircraft carrier CVN-79, the FY2013-F23017 plan defers the scheduled
delivery date of this ship by two years, to 2022, which is a delivery date that in
the past might have been expected for a carrier procured in FY2015. Although it
does not show in Table 2, the FY2013 budget also retains FY2018 as the year of
procurement for CVN-80, the next carrier after CVN-79. As with CVN-79, the
FY2013 budget defers the scheduled delivery date of CVN-80 by two years, to
2027, which is a delivery date that in the past might have been expected for a
carrier procured in FY2020.
• Virginia-class submarine deferred from FY2014 to FY2018. The FY2013-
FY2017 five-year shipbuilding plan defers one Virginia-class submarine from
FY2014 to FY2018. Navy leaders in testimony expressed an interest in finding a
way to restore a second Virginia-class submarine to FY014. The Navy is also
seeking congressional approval for a multiyear procurement (MYP) arrangement3
for the nine Virginia-class boats currently scheduled for procurement in FY2014-
FY2018. Adding a second Virginia-class boat to FY2014 would increase to 10
the number of boats that would be procured under the proposed FY2014-FY2018
MYP arrangement.
• Start of Ohio-replacement procurement deferred to FY2021. Although it does
not show in Table 2, the FY2013 budget defers the scheduled procurement of the
first Ohio replacement (SSBN[X]) ballistic missile submarine by two years, from
FY2019 to FY2021.
• DDG-51 destroyer deferred from FY2014 to FY2016. The FY2013-FY2017
five-year shipbuilding plan defers the scheduled procurement of one DDG-51
destroyer from FY2014 to FY2016. The Navy is seeking congressional approval
for an MYP arrangement for the nine DDG-51s scheduled for procurement in
FY2013-FY2017.
• LCS procurement reduced in FY2016-FY2017. The FY2013-FY2017 five-
year shipbuilding plan reduces the LCS procurement rate in FY2016 and FY2017
from three ships per year to two ships per year. The Navy still plans on procuring
a total of 55 LCSs, so the two LCSs that are no longer planned for FY2016 and
FY2017 have been deferred beyond FY2017.
• LHA(R) amphibious assault ship deferred from FY2016 to FY2017. The
FY2013-FY2017 five-year shipbuilding plan defers the scheduled procurement
of the next LHA(R) amphibious assault ship by one year, from FY2016 to
FY2017.
3 For an explanation of MYP, see CRS Report R41909, Multiyear Procurement (MYP) and Block Buy Contracting in
Defense Acquisition: Background and Issues for Congress, by Ronald O'Rourke and Moshe Schwartz.
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• Start of LSD(X) amphibious ship procurement deferred to FY2018. The
FY2013-FY2017 five-year shipbuilding plan defers from FY2017 to FY2018 the
scheduled procurement of the first LSD(X) amphibious ship. LSD(X)s are to
replace aging LSD-41/49 class amphibious ships. The Navy testified last year
that an FY2017 start for LSD(X) procurement would have been ahead of need
(i.e., earlier than needed) for replacing the first retiring LSD-41/49 class ship.
The implication was that the FY2017 start date for the LSD(X) under last year’s
budget reflected industrial-base considerations, and that the Navy no longer feels
that adequately supporting the industrial base over the next few years requires an
FY2017 start date.
• AFSB added in FY2014. The FY2013-FY2017 five-year shipbuilding plan adds
an Afloat Forward Staging Base (AFSB) ship in FY2014. This ship will be a
variant of the Mobile Landing Platform (MLP) ship. The Navy is also proposing
to build the third MLP, which was funded in FY2012, to the modified AFSB
design, producing an eventual force of two regular MLPs and two AFSBs. The
Navy canceled the retirement of an existing LPD-type amphibious ship and
modified that ship to serve as an interim AFSB, pending the delivery of the two
new-built AFSBs.
• Start of TAO(X) oiler procurement deferred from FY2014 to FY2016. The
FY2013-FY2017 five-year shipbuilding plan defers the start of TAO(X) oiler
procurement two years, from FY2014 to FY2016. The addition of the AFSB in
FY2014 is intended in part to mitigate the industrial-base impact of deferring the
start of TAO(X) procurement.
• Eight JHSVs eliminated. The elimination of the eight JHSVs from the FY2013-
FY2017 shipbuilding plan reflects a reduction in the Navy’s JHSV force-level
goal from 21 ships down to 10 ships. A total of nine JHSVs have been procured
through FY2012; the JHSV requested for FY2013 is to be the 10th and final ship.
• Early retirements for seven Aegis cruisers; ROS for two LSD-type
amphibious ships. The FY2013 budget also proposes the early retirement of
seven Aegis cruisers and the placement into Reduced Operating Status (ROS) of
two LSD-41/49 class amphibious ships in FY2013-FY2014. The seven cruisers
would await foreign sale or disposal.
30-Year (FY2013-FY2042) Shipbuilding Plan
Table 3 shows the Navy’s proposed FY2013 30-year (FY2013-FY2042) shipbuilding plan, which
was submitted to Congress on March 28, 2012, more than a month after the submission of the
FY2013 budget on February 13, 2012,4 and which includes a total of 268 ships.
4 10 U.S.C. 231, as most recently amended by Section 1011 of the FY2012 National Defense Authorization Act (H.R.
1540/ P.L. 112-81 of December 31, 2011), states that “The Secretary of Defense shall include [the 30-year shipbuilding
plan] with the defense budget materials for a fiscal year.... ”
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Table 3. Navy FY2013 30-Year (FY2013-FY2042) Shipbuilding Plan
FY CVN LSC SSC SSN
SSBN
AWS
CLF
Supt Total
13
1 2 4 2
1 10
14
1 4 1
1 7
15
2 4 2
8
16
2 2 2
1
2 9
17
2 2 2
1
7
18
1 2 3 2
1
1
1 11
19
2 3 2
1 8
20
2 3 3
1
1
2 12
21
2 3 2
1
1
9
22
2 3 3
1
1
2 12
23
1 3 3 2
1
3 13
24
2 3 1
1
2
1
2 12
25
3 3 2
1
1 10
26
2 3 1
1
1
1
9
27
3 1
1
1
6
28
1 2 1
1
2
1
1 9
29
3 1
1
1
1
1 8
30
2 1 1
1
1
1
2 9
31
2 1
1
1
1
2 8
32
2 1 1
1
2
1
3 11
33
1 2 1
1
1
2 8
34
2 1 1
1
1
2 8
35
2 1 1
1
5
36
3 2 1
1
7
37
3 3 1
7
38
1 3 4 2
10
39
3 4 1
8
40
3 4 2
2
11
41
3 4 1
8
42
3 2 2
1
8
Source: FY2013 30-year (FY2013-FY2042) shipbuilding plan.
Key: FY = Fiscal Year; CVN = aircraft carriers; LSC = surface combatants (i.e., cruisers and destroyers); SSC
= small surface combatants (i.e., Littoral Combat Ships [LCSs]); SSN = attack submarines; SSGN = cruise
missile submarines; SSBN = ballistic missile submarines; AWS = amphibious warfare ships; CLF = combat
logistics force (i.e., resupply) ships; Supt = support ships.
In devising a 30-year shipbuilding plan to move the Navy toward its ship force-structure goal, key
assumptions and planning factors include but are not limited to the following:
• ship service lives;
• estimated ship procurement costs;
• projected shipbuilding funding levels; and
• industrial-base considerations.
The Navy’s report on the FY2013 30-year shipbuilding plan states that
This 30-year shipbuilding plan is based on several key assumptions:
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• The battle force inventory target that forms the basis for the accompanying 30-year
shipbuilding report will not change substantially with the Navy Force Structure
Assessment or the ongoing Department of Defense review of its operational plans for a
variety of potential regional contingencies. Individual ship targets may vary slightly
based on a detailed analysis of Combatant Commander requirements in light of the new
defense strategy.
• Yearly spending on Navy shipbuilding must increase starting in the second FYDP of the
near-term period [FY2013-FY2022], and remain at higher levels throughout the mid-
term planning period [FY2023-FY2032] before falling down to annual shipbuilding
levels nearer to historical averages. During the 2020s and early 2030s, a large number
of surface ships and submarines built during the Cold War build-up in the 1980s and
early 1990s—particularly the OHIO-class SSBNs—will reach the end of their service
lives. This will inevitably cause the annual shipbuilding expenditures from FY2020
through FY2032 to be higher than those seen from the mid-1990s through 2020.
• All battle force ships—particularly Large Surface Combatants [i.e., cruisers and
destroyers]—will serve to the end of their planned or extended service lives. In this
fiscal environment, the DoN [Department of the Navy] can ill-afford to inflate future
shipbuilding requirements by retiring ships earlier than planned.
• The Department of the Navy will be able to maintain cost control over its major
shipbuilding acquisition programs, especially once individual ship classes shift to serial
production. The Department will need to focus on limiting overruns for first ships-of-
class.
• The Department of the Navy must still be able to cover the Manpower, Operations and
Maintenance (MPN/O&MN), Weapons Procurement navy (WPN), and Other
Procurement Navy (OPN) costs associated with this plan. DoN leaders are committed to
avoiding a “hollow force.”5
Navy’s Projected Force Levels Under 30-Year (FY2013-FY2042)
Shipbuilding Plan
Table 4 shows the Navy’s projection of force levels for FY2013-FY2042 that would result from
implementing the FY2013 30-year (FY2013-FY2042) shipbuilding plan shown in Table 3.
5 Department of the Navy, Annual Report to Congress on Long-Range Plan for Construction of Naval Vessels for
FY2013, April 2012, p. 19. Italics as in original.
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Table 4. Projected Force Levels Resulting from FY2013 30-Year (FY2013-FY2042)
Shipbuilding Plan
CVN LSC SSC SSN SSGN SSBN AWS CLF Supt Total
306 ship plan
11
88
52
48
0
12
33
29
33
~306
FY13
10 80 35 55 4 14 31 32 24 285
FY14
10 78 30 55 4 14 29 32 27 279
FY15
11 78 26 54 4 14 28 31 30 276
FY16
11 80 30 53 4 14 29 31 32 284
FY17
11 82 32 50 4 14 30 29 33 285
FY18
11 84 35 51 4 14 31 29 33 292
FY19
11 86 39 51 4 14 31 29 35 300
FY20
11 87 37 48 4 14 31 29 34 295
FY21
11 88 38 48 4 14 31 29 33 296
FY22
12 87 40 47 4 14 32 29 33 298
FY23
11 89 39 47 4 14 32 29 35 300
FY24
11 89 41 46 4 14 34 29 35 303
FY25
11 88 43 45 4 14 34 29 33 301
FY26
11 89 46 45 2 14 34 29 32 302
FY27
12 90 49 44 1 13 33 29 33 304
FY28
11 89 52 43 0 12 34 29 33 303
FY29
11 87 55 43 0 11 33 29 33 302
FY30
11 85 55 43 0 11 33 29 33 300
FY31
11 81 55 45 0 11 32 29 33 297
FY32
11 80 55 45 0 10 32 29 33 295
FY33
11 79 55 46 0 10 33 29 33 296
FY34
11 78 55 47 0 10 34 29 33 297
FY35
11 80 55 48 0 10 33 29 33 299
FY36
11 82 55 49 0 10 33 29 33 302
FY37
11 84 55 50 0 10 33 29 33 305
FY38
11 86 55 48 0 10 32 29 34 305
FY39
11 88 55 49 0 10 32 29 33 307
FY40
10 88 55 49 0 10 31 29 33 305
FY41
10 89 55 48 0 11 32 29 33 307
FY42
10 88 55 49 0 12 31 29 33 307
Source: FY2013 30-year (FY2013-FY2042) shipbuilding plan.
Note: Figures for support ships include five JHSVs transferred from the Army to the Navy and operated by the
Navy primarily for the performance of Army missions.
Key: FY = Fiscal Year; CVN = aircraft carriers; LSC = surface combatants (i.e., cruisers and destroyers); SSC
= small surface combatants (i.e., frigates, Littoral Combat Ships [LCSs], and mine warfare ships); SSN = attack
submarines; SSGN = cruise missile submarines; SSBN = ballistic missile submarines; AWS = amphibious
warfare ships; CLF = combat logistics force (i.e., resupply) ships; Supt = support ships.
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Observations that can be made about the Navy’s FY2013 30-year (FY2013-FY2042) shipbuilding
plan and resulting projected force levels include the following:
• Total of 268 ships; average of about 8.9 per year. The plan includes a total of
268 ships to be procured, compared to 276 ships in the FY2012 30-year
(FY2012-FY2041) shipbuilding plan. The total of 268 ships equates to an
average of about 8.9 ships per year, which slightly higher than the approximate
average procurement rate (sometimes called the steady-state replacement rate) of
about 8.7 ships per year that would be needed over the long run to achieve and
maintain a fleet of 306 ships, assuming an average life of 35 years for Navy
ships.
• Projected fleet remains below 306 ships. Although the FY2013 30-year plan
includes an average of about 8.9 ships per year, the FY2013 30-year plan, like
previous 30-year plans, results in a fleet that does not fully support all elements
of the Navy’s ship force structure goal. The distribution of the 268 ships over the
30-year period, combined with the ages of the Navy’s existing ships, results in a
projected fleet that would remain below 306 ships during most of the 30-year
period and experience shortfalls in cruisers-destroyers, attack submarines, and
amphibious ships.
• Ballistic missile submarine force to be reduced temporarily to 10 boats. As a
result of the decision in the FY2013 budget to defer the scheduled procurement
of the first Ohio replacement (SSBN[X]) ballistic missile submarine by two
years, from FY2019 to FY2021, the ballistic missile submarine force is projected
to drop to a total of 10 or 11 boats—one or two boats below the 12-boat SSBN
force-level goal—during the period FY2029-FY2041. The Navy says this
reduction is acceptable, because none of the 10 boats during these years will be
encumbered by long-term maintenance.6
• Smaller projected shortfalls in cruisers-destroyers and attack submarines.
The cruiser-destroyer and attack submarine shortfalls under the FY2013 30-year
plan are smaller than they were projected to be under the FY2012 30-year plan,
due in part to the reduction in the cruiser-destroyer force-level goal to 88 ships
and the insertion of additional destroyers and attack submarines into the FY2013
30-year plan.
• 18 more destroyers and 2 more attack submarines in plan. The FY2013
30-year shipbuilding plan includes 70 destroyers and 46 attack submarines,
compared to 52 destroyers and 44 attack submarines in the FY2012 30-year
plan. Fifteen of the 18 additional destroyers in the FY2013 plan were added
during the final 20 years of the 30-year plan.
• Cruiser-destroyer force now projected to bottom out at 78 ships. Under
the FY2013 30-year plan, the cruiser-destroyer force is projected to bottom
out in FY2014-FY2015 and FY2034 at 78 ships—10 ships, or 11.3%, less
than the goal of 88 ships. Under the FY2012 30-year plan, the cruiser-
destroyer force was projected to bottom out in FY2034 at 68 ships—26 ships,
or 27.7%, less than the goal under that plan of 94 ships.
6 For further discussion of this issue, see CRS Report R41129, Navy Ohio Replacement (SSBN[X]) Ballistic Missile
Submarine Program: Background and Issues for Congress, by Ronald O'Rourke.
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• Attack submarine force now projected to bottom out at 43 ships. Under
the FY2013 30-year plan, the attack submarine force is projected to bottom
out in FY2028-FY2030 at 43 ships—5 ships, or 10.4%, less than the goal of
about 48 boats. Under the FY2012 30-year plan, the attack submarine force
was projected to bottom out in FY2030 at 39 boats—9 boats, or 18.8%, less
than the goal of 48 boats.
• Shortfall in amphibious ships. The Navy projects that there will be a shortfall
of one to five amphibious ships (i.e., 3.0% to 15.1% of the goal of 33 ships)
during the first 11 years (FY2013-FY2023) of the 30-year period.
Oversight Issues for Congress
Potential Impact on Shipbuilding Programs of Year-Long
Continuing Resolution (CR) and Sequester
Year-Long CR
As Big a Concern for the Navy as a Sequester
Navy officials state that although there is much current focus on the potential impacts on the
military services of a sequestration, the Navy is equally (if not more) concerned about the
potential impacts on the Navy of an extension of the current continuing resolution, or CR
(H.J.Res. 117/P.L. 112-175 of September 28, 2012), through the end of the fiscal year.
Specifically, Navy officials state that if the current CR, which expires on March 27, is extended
through the end of the fiscal year on the basis of FY2012 funding levels for DOD, and if this
extended CR does not include sufficient transfer authority for DOD and/or special provisions
(i.e., “anomalies”) for fixing execution problems in specific DOD programs, the Navy will
encounter significant funding shortfalls in its Operations and Maintenance (O&M) account that
will result in delayed ship and aircraft deployments, reductions in ship steaming days and aircraft
flying hours, and the termination of numerous planned ship and aircraft maintenance actions,
among other effects.
Potential Impacts on Shipbuilding Programs
The extension of the current CR through the end of the fiscal year on the basis of FY2012 funding
levels, and without sufficient transfer authority and/or anomalies (hereafter referred to as “an
extended CR as described above”) would also affect the executability of proposed FY2013 Navy
programs funded through the Navy’s shipbuilding budget, known formally as the Shipbuilding
and Conversion, Navy (SCN) appropriation account. Indeed, the effects of an extended CR can
be more particular for SCN-funded programs than for programs funded through other
DOD acquisition accounts.7 Potential impacts of an extended CR as described above on FY2013
7 This is because the paragraph in the annual DOD appropriations act that provides funding for the SCN account, unlike
the paragraphs for other DOD acquisition accounts, not only states the total amount of funding for the account—it also
explicitly delineates funding for individual programs within the account. (The language in the paragraph, in fact, not
(continued...)
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SCN-funded programs would include the following (of which the first item listed has already
occurred as a result of the current CR):
• The Navy likely would encounter problems in completing the Refueling
Complex Overhaul (RCOH) on the aircraft carrier CVN-71, and likely
would not be able to proceed as scheduled to the RCOH on the aircraft
carrier CVN-72. RCOHs are mid-life nuclear refueling overhauls for existing
aircraft carriers; they are performed so that aircraft carriers can serve the second
25 years or so of their intended 50-year lives. When the current CR was enacted
last year, the Navy testified that it created an immediate and urgent execution
problem in the CVN RCOH program with CVNs 71 and 72. The situation was
temporarily patched by a reprogramming of FY2012 military personnel funding
that the Congress approved in late September 2012, before those military
personnel funds expired, but this patch was not sufficient to fully fund the RCOH
effort through the end of FY2013. Additional funding beyond what would be
provided by an extended CR as described above would be needed to avoid a
lapse in RCOH work at some point during FY2013.8 On February 8, 2013, the
Navy announced that, due to a lack of funding arising from the current CR,
it has postponed the CVN-72 RCOH—for further discussion, see “Delay of
CVN-72 RCOH” immediately below.
• The Navy likely would not be able to procure (i.e., award a full-ship
construction contract for) the aircraft carrier CVN-79 in FY2013, as
proposed under the FY2013 budget (i.e., the FY2013 quantity for aircraft
carriers could not be 1), because the Navy did not procure an aircraft carrier in
FY2012 (i.e., the FY2012 quantity for aircraft carriers was zero).9 In other words,
procuring a carrier in FY2013 would amount to a quantity increase compared
FY2012, which an extended CR as described above would not permit. (Year-to-
year quantity increases are a considered a type of “new start”—i.e., a new
program initiative that differs from what took place the prior year—and new
starts are generally not permitted under CRs.) The Navy might consider the
option of declaring FY2013 to be another year of advance procurement (AP)
activity for CVN-79 (i.e., another year for procuring long-lead time components
and for conducting “advance construction” activities on the ship at the
(...continued)
only delineates funding for individual shipbuilding programs—it also divides some of those programs further, into
separate line items covering procurement funding for the program and advance procurement [AP] funding for that
program.) As a result, while funding for other DOD acquisition accounts under a CR is typically managed at the
account level, funding for the SCN account under a CR is managed at the line-item level. Consequently, a CR
based on the previous year’s DOD appropriations act can lead to a program-by-program funding misalignments in
executing current year SCN-funded programs. In general, the longer into the fiscal year that the government operates
under such a CR, the greater the program-execution challenges resulting from these misalignments can be.
8 The CVN-72 RCOH was originally scheduled to begin in FY2013. This could have led to a year-to-year quantity
increase issue for the CVN-72, because the FY2013 quantity for the RCOH program would be equal to 1, compared to
an FY2012 quantity of zero (the previous RCOH, for CVN-71, is recorded as a quantity of 1 in FY2009). The
reprogramming approved by Congress in late-September 2012, however, converted the CVN-72 RCOH into an
FY2012 start; consequently, there no longer appears to be a problem arising from an increase in quantity from FY2012
and FY2013, because the FY2012 quantity is now 1, and the FY2013 quantity is now zero. There is still be a problem,
however, arising from a lack of sufficient FY2013 funds for the CVN-72 RCOH.
9 The previous aircraft carrier, CVN-78, was procured in FY2008.
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shipyard),10 but it is not clear whether the Navy would be permitted to do this. If
it were possible for the Navy to do this, then the Navy might be able to award
one or more short-term contracts for AP-like activities in FY2013, and at least
some work on CVN-79 might continue through the remainder of FY2013, though
perhaps not enough for the ship to fall behind its originally intended construction
schedule. If it were not possible for the Navy to do this, then even less work on
CVN-79 might take place through the remainder of FY2013.
• The Navy likely would be able to procure one DDG-51 destroyer in FY2013,
rather than the two that were requested for FY2013, because the Navy
procured only one DDG-51 in FY2012, and CRs generally prohibit year-to-year
quantity increases (see discussion in the first paragraph above), and because the
amount of procurement funding provided for the DDG-51 program in FY2012
was enough to procure one DDG-51 but not nearly enough to procure two.
• The Navy likely would not be able to award a multiyear procurement (MYP)
contract for DDG-51s starting in FY2013, as proposed under the FY2013
budget, unless the extended CR as described above (or some other appropriations
act) includes a provision that provides such authority, because the Navy needs
and currently does not have authority in an appropriations act to award such a
contract.11 Even with a provision providing such authority, the Navy likely still
would not be able to award an MYP contract for DDG-51s starting in FY2013,
because the Navy likely would be able to procure one DDG-51 in FY2013 rather
than the two that were requested (see previous point above), and the Navy did not
solicit bids from the two DDG-51 builders for an MYP contract in which one
DDG-51 is procured in FY2013. (The Navy solicited bids for a contract in which
two DDG-51s are procured in FY2013.) Since the Navy did not solicit bids for an
MYP contract starting in FY2013 in which one DDG-51 is procured in FY2013,
the Navy does not have a bid basis for awarding such a contract. The bids that the
Navy received from the shipbuilders for an MYP contract in which two DDG-51s
are procured in FY2013, moreover, are valid in their pricing through June 4.
Since the Navy needs to give 30 days’ notice to Congress when awarding MYP
contracts, this means that notification of the award of the MYP contract might
need to be sent to Congress by about May 5, unless the shipbuilders agree to
extend their validity of their bids beyond June 4. Thus, if the conditions needed
to award the MYP contract (i.e., authority in an appropriations act to award a
DDG-51 MYP contract starting in FY2013, plus an anomaly or some other
provision that would permit the Navy to procure two DDG-51s in FY2013) are
not put in place by about May 5, the Navy’s ability to award the MYP contract
10 CVN-79 has received AP funding from FY2007 through FY2012, but was scheduled to shift to regular procurement
funding starting in FY2013. CVN-79 received $554.8 million AP funding in FY2012, and the Navy requested $608.2
million in regular procurement funding for FY2013. If the Navy is permitted to declare FY2013 to be another year of
AP funding for CVN-79, the ship might receive as much as $558.2 million (or 0.612% more than the FY2012 level, as
permitted under the current CR) in FY2013 for AP-like activities.
11 As discussed in another CRS report (CRS Report R41909, Multiyear Procurement (MYP) and Block Buy
Contracting in Defense Acquisition: Background and Issues for Congress, by Ronald O'Rourke and Moshe Schwartz),
DOD needs approval in both an appropriations act and an act other than an appropriations act (typically, a National
Defense Authorization Act), to award an MYP contract. Authority for the proposed DDG-51 MYP contract was
provided in Section 123 of the FY2013 National Defense Authorization Act (H.R. 4310/P.L. 112-239 of January 2,
2013), but DOD still needs authority for this MYP from an appropriations act.
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could be jeopardized, unless the shipbuilders agree to extend their validity of
their bids beyond June 4.12
• About $216 million in funding for continued construction work on DDG-
1002—the third Zumwalt (DDG-1000) class destroyer—would be at risk.
• The Navy would lack sufficient funds to complete construction work on the
amphibious assault ship LHA-6, which was procured in FY2007. Additional
funds are needed to complete construction work on this ship, and an extended CR
as described above would not provide sufficient funding.13
• About $176 million in funding for work on the Moored Training Ship14
would be at risk.
At a February 12, 2013, hearing before the Senate Armed Services Committee on potential
impacts on the military services of a year-long CR and sequestration, the Navy testified that:
If the CR is extended for the whole fiscal year, we will stop work on two aircraft carrier
refueling overhauls (USS ABRAHAM LINCOLN [CVN-72] and USS THEODORE
ROOSEVELT [CVN-71]), one of which is within four months of completion. The
prohibition on “new starts” under the CR also compels us to defer construction of USS
JOHN F. KENNEDY (CVN-79), USS SOMERSET (LPD-25) and USS AMERICA (LHA-
6) and cancel the planned procurement of an Arleigh Burke-class guided missile destroyer,
multiple P-8A Poseidon aircraft and hundreds of weapons. Similarly, we will not begin about
$675 million in “new start” military construction projects while under the CR.15
12 Source for discussion of problem arising from one DDG-51 rather than two being procured in FY2013, and for June
4 bid-expiration date and associated May 5 notification date: E-mails and in-person consultations with Navy
Legislative Affairs Office and Navy DDG-51 program officials, February 12, 2013.
13 The Navy on February 6, 2013, notified Congress of a proposed use of a Special Transfer Authority (STA) to address
a CR-caused funding shortfall for completing construction work on another amphibious ship procured in a prior year—
LPD-25, which was procured in FY2008. Use of this STA involves a 30-day notification period for Congress; if
Congress does not take action to disapprove of the proposed use within the 30-day period (i.e., by about March 8), the
Navy will use the STA to address the funding shortfall on LPD-25.
14 Historically, moored training ships have been older nuclear-powered submarines that have been retained upon their
retirement from operational service as moored training platforms. See, for example, the entries in the Naval Vessel
Register for the former ballistic missile submarines Daniel Webster (SSBN-626) and Sam Rayburn (SSBN-635)
(accessed February 20, 2013, at http://www.nvr.navy.mil/nvrships/details/SSBN626.htm and http://www.nvr.navy.mil/
nvrships/details/SSBN635.htm, respectively). See also Michael Brayshaw, “Moored Training Ship Daniel Webster
Towed to Charleston More Than Three Weeks Early,” Navy News Service, August 23, 2012 (accessed February 20,
2013, at http://www.navy.mil/submit/display.asp?story_id=69182); and Bo Peterson, “Navy to Expand Nuclear
Training School in Goose Creek,” The Post and Courier (Charleston, SC), February 16, 2012 (accessed February 20,
2013, at http://www.postandcourier.com/article/20120216/PC05/302169864). The Navy News Service article states that
“Since its decommissioning in 1990, Webster has served as a moored training ship preparing Sailors to operate active
submarines, and is permanently berthed at Charleston’s Naval Nuclear Power Training Unit. Five training crews have
concurrently undergone training during the boat’s availability.” The Post and Courier article states that “Over the 10-
year span [2012-2022], the USS Daniel Webster and the USS Sam Rayburn, both built in the early 1960s, would be
replaced [as moored training ships] one by one with the 1970s-era [attack submarines]USS La Jolla and the USS San
Francisco.”
15 Statement of Admiral Jonathan Greenert, Chief of Naval Operations, before the Senate Armed Services Committee
on the Impact of Sequestration, February 12, 2013, p. 4. Although the Navy’s written statement for the hearing is from
Admiral Greenert, the Navy’s testimony at the hearing was actually given by the Vice Chief of Naval Operations,
Admiral Mark E. Ferguson III, who was substituting for Admiral Greenert at the hearing. The Navy presented similar
testimony at a similar hearing before the House Armed Services Committee on February 13, 2013.
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Potential Legislative Strategies for Avoiding or Mitigating Impacts
The above program impacts could be avoided (or at least mitigated) if the CR, instead of being
extended through the end of the fiscal year, were instead replaced with a regular FY2013 DOD
appropriations act. Such an act could form part of an omnibus FY2013 appropriations act, or part
of an act that also included a year-long CR for other parts of the federal government. In past
instances of extended CRs, a current-year DOD appropriations act was sometimes made part of
an act that also included a year-long CR for other parts of the federal government.
Alternatively, if a regular FY2013 DOD appropriations act is not enacted, the above program
impacts could be mitigated (if not fully avoided) by including in an extended CR sufficient
transfer authority for DOD. Skeptics of this approach might argue that depending on the amount
of transfer authority involved, such an approach might amount to giving DOD a “blank check,”
circumventing Congress’s role in the determination of federal spending.
An additional option, particularly if an extended CR does not contain sufficient transfer authority,
would be to include in an extended CR anomalies permitting DOD to fix execution problems in
specific programs. Depending on the number of such anomalies, such an approach might permit
DOD to fix at least some of the execution issues arising under an extended CR.
In a February 15, 2013, letter to Representative C.W. Bill Young, the chairman of the Defense
subcommittee of the House Appropriations Committee, two Members of the House Armed
Services Committee (HASC)—Representative J. Randy Forbes, the chairman of the HASC
Seapower and Projection Forces subcommittee, and Representative Robert Wittman, the chairman
of the HASC Readiness subcommittee—state:
We believe the most effective means of minimizing these significant [program] reductions
would be to pass the Department of Defense Appropriations Act for Fiscal Year 2013.
Absent this, we would recommend that specific anomalies and transfer authorities be
included in a year long Continuing Resolution Act to reduce the harmful impacts of a
Continuing Resolution based on Fiscal Year 2012 appropriations. Specifically, we would
recommend the following be incorporated:
—Specific transfer authority to allow [the] Navy to realign funds toward the full funding of
the modernization and maintenance programs of the Navy fleet
—[A] Rate increase associated with the Nuclear Aircraft Carrier (CVN) Refueling Overhaul
(CVN-72 RCOH)
—Sufficient appropriations to support the completion of prior year programs for LHA-6 and
CVN-71 RCOH
—Multiyear procurement and quantity increases associated with [the] DDG-51 [destroyer]
and Virginia Class [submarine programs]
—New start authority associated with the Carrier Replacement Program (CVN-79)
—[A] Rate increase to support the Moored Training Ship and the DDG-1000 [destroyer
program]
—[A] Quantity increase to support the P-8A Poseidon [aircraft program]
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—Additional appropriations to support the expanded research and development of the USAF
Aerial Refueling Aircraft.16
DOD Package of Proposed Anomalies
On February 21, 2013, it was reported that DOD had submitted to Congress a package of
proposed anomalies that the Office of Management and Budget (OMB) would like to be
incorporated into a year-long CR.17 One of these proposed anomalies would address the issue of
completing the construction of certain ships procured in prior fiscal years:
Department of Defense, Completion of Prior Year Ships
Sec. ____. Of the amounts appropriated in Section 101 under the heading “Department of
Defense—Shipbuilding and Conversion, Navy”, $304,573,000 shall be available to fund
prior year shipbuilding cost increases: Provided, That upon enactment of this Act, the
Secretary of the Navy shall transfer such funds to the following appropriations in the
amounts specified: Provided further, That the amounts transferred shall be merged with and
be available for the same purposes as the appropriations to which transferred to:
(1) Under the heading “Shipbuilding and Conversion, Navy, 2007/2013”: LHA Replacement
Program $156,685,000.
(2) Under the heading “Shipbuilding and Conversion, Navy, 2008/2013”: LPD–17
Amphibious Transport Dock Program, $80,888,000.
(3) Under the heading “Shipbuilding and Conversion, Navy, 2009/2013”: CVN Refueling
Overhauls Program, $67,000,000.
DOD states, “Language [such as that proposed above] is necessary to fund prior-year
shipbuilding cost increases. Without these final increments of funding, three nearly-completed
ships would remain unfinished in their shipyards. This anomaly would ensure that these high-
demand ships are delivered to the fleet.”
Another proposed anomaly would increase DOD’s transfer authority:
Department of Defense, Increase Department of Defense’s FY 2012 General Transfer
Authority
Sec. ____. (a) Notwithstanding section 101, section 8005 of P.L. 112-74 shall be applied to
funds appropriated in division A of such Act by substituting “$4,500,000,000” for
“$3,750,000,000”.
(b) Section 1001 of P.L. 112-81 shall be applied to funds appropriated for fiscal year 2012 by
substituting “$4,500,000,000” for “$4,000,000,000”.
16 Letter dated February 15, 2013, from Representative J. Randy Forbes and Representative Robert Wittman to
Representative C.W. Bill Young, posted February 19, 2013, at InsideDefense.com (subscription required).
17 Jason Sherman, “DOD Seeks ‘Anomalies’ In Continuing Resolution To Keep Key Programs On Track,”
InsideDefense.com, February 21, 2013.
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DOD states, “Language [such as that proposed above] is needed to increase the Department of
Defense’s FY 2012 general transfer authority from $3.75 billion to $4.50 billion as it applies to
prior-year (FY 2012) funding. Without this anomaly, certain investment, shipbuilding, and
research and development programs may not be executable.”
Another proposed anomaly would provide authority for proposed multiyear procurement (MYP)
contracts that would start in FY2013, including the one proposed for the DDG-51 destroyer
program:
Department of Defense, Multiyear Procurements
Sec. ____. Notwithstanding section 101, section 8010 of P.L. 112-74 shall be applied to
funds appropriated by this Act as if the following were inserted in place of the existing
language: “Funds appropriated in title III of this Act may be used for a multiyear
procurement contract as follows: DDG-51 Arleigh Burke class destroyer and associated
systems; V-22 Joint Aircraft Program; and the CH-47 Chinook helicopter.”.
DOD states, “Language [such as that proposed above] is needed to authorize the Department of
Defense (DOD) to enter into multi-year procurement (MYP) contracts for three programs (the
CH-47F helicopter, the DDG-51 Arleigh Burke destroyer, and the V-22 Joint Aircraft Program),
consistent with congressional action. This would allow DOD to make a commitment to
contractors to procure a specific quantity of weapons systems over several years. Without this
anomaly, estimated savings of approximately 10-20 percent (of the program cost) would be lost.”
Another proposed anomaly would provide authority for new starts, including year-to-year
quantity increases:
Department of Defense, New Starts and Production Increases
Sec. ____. Funds made available or authority granted pursuant to section 101 for the
Department of Defense may be used for the programs, projects and activities itemized in the
Funding Tables contained in division D of the National Defense Authorization Act for Fiscal
Year 2013 (P.L. 112-239), including:
(a) the new production of items not funded for production in fiscal year 2012 or prior years;
(b) the increase in production rates above those sustained with fiscal year 2012 funds; and
(c) the initiation, resumption, or continuation of any project, activity, operation, or
organization for which appropriations, funds, or other authority were not available during
fiscal year 2012.
DOD states, “Language [such as that proposed above] is needed to authorize the Department of
Defense (DOD) to begin new programs, projects, and activities or increase rates of production
relative to FY 2012 levels. This anomaly would allow DOD to fund programs, projects, and
activities consistent with the funding tables included in the National Defense Authorization Act of
2013 (P.L. 112-239). Without this authority, DOD would be prevented from implementing
planned activities for FY 2013, including all planned military construction projects.”
Another proposed anomaly would address program-by-program funding misalignments in the
Shipbuilding and Conversion, Navy (SCN) account by permitting the Navy to manage SCN
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funding at the account level (like other DOD acquisition accounts are typically managed under a
CR) rather than at the line-item level:
Department of Defense, Shipbuilding Appropriation
Sec. ____. Notwithstanding section 101, the level for “Department of Defense—
Procurement—Shipbuilding and Conversion, Navy” shall be $13,415,745,000: Provided,
That the language under such heading beginning “, as follows:” and all that follows through
“Completion of Prior Year Shipbuilding Programs, $73,992,000” shall not apply to funds
appropriated by this Act.
DOD states, “Language is needed to remove the restrictions imposed in the Shipbuilding and
Conversion appropriations language. By removing ship-specific appropriations, the Navy would
be better able to manage ship construction. Without this anomaly, the Navy would need to initiate
multiple reprogrammings totaling more than $3 billion; contract awards would likely be delayed,
which could cause existing contracts to be renegotiated, resulting in higher costs; and there could
be delays to the initiation of ship construction, as well as shipyard workforce furloughs.”18
Incorporating the above proposed anomalies into a year-long CR would appear to address many if
not all of the SCN program-execution issues listed earlier (see “Potential Impacts on Shipbuilding
Programs” above). It would not, however, appear to do certain other things:
• It would not appear to explicitly provide additional FY2013 DDG-51
procurement funding, above the amount requested for FY2013, that supporters of
the DDG-51 destroyer program might want to add to the FY2013 appropriation
to support the procurement of an additional DDG-51 in FY2013. One billion
dollars of additional procurement funding for this purpose was recommended in
the reports of the House and Senate Appropriations Committees on the FY2013
DOD Appropriations Act (H.R. 5856 of the 112th Congress).19
• It would not appear to explicitly provide additional FY2013 Virginia-class attack
submarine advance procurement (AP) funding, above the amount requested for
FY2013, that supporters of the Virginia-class attack submarine program might
want to add to the FY2013 SCN appropriation to support the procurement of an
additional Virginia-class boat in FY2014. More than $700 million in additional
AP funding for this purpose was recommended in the reports of the House and
Senate Appropriations Committees on the FY2013 DOD Appropriations Act
(H.R. 5856 of the 112th Congress).20 If this AP funding is not added to the
FY2013 appropriation, Congress would still retain the option of procuring a
18 Source for texts of proposed anomalies and DOD statements as to why they would be necessary: Office of
Management Budget (OMB) document entitled “FY 2013 Continuing Resolution (CR) Appropriations Issues
(assuming FY 2013 Full-Year CR).”
19 For a discussion of interest in procuring an additional DDG-51 in FY2013 or FY2014, and the additional
procurement funding recommended in the committee reports on H.R. 5856 of the 112th Congress for procuring an
additional DDG-51 in FY2013, see CRS Report RL32109, Navy DDG-51 and DDG-1000 Destroyer Programs:
Background and Issues for Congress, by Ronald O'Rourke.
20 For a discussion of interest in procuring an additional Virginia-class boat in FY2014, and the additional advance
procurement (AP) funding recommended for this purpose in the committee reports on H.R. 5856 of the 112th Congress,
see CRS Report RL32418, Navy Virginia (SSN-774) Class Attack Submarine Procurement: Background and Issues for
Congress, by Ronald O'Rourke.
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second Virginia-class submarine in FY2014 by funding it in a “point-blank”
fashion, without any AP funding in FY2013.21
• It would not appear to provide authority for an MYP contract for the Virginia-
class program for FY2014-FY2018. The Navy had requested this authority as
part of its FY2013 budget submission, because the Navy’s Virginia-class program
office prefers to get this authority one year in advance of the first year of a
proposed MYP contract, so as to provide additional time for negotiating the terms
of the contract. Authority for most MYP contracts, however, is typically provided
coincident with the first year of the contract in question, and the Navy could
again request authority for the proposed FY2014-FY2018 Virginia-class MYP
contract as part of its FY23014 budget submission.
Delay of CVN-72 RCOH
As mentioned above, on February 8, 2013, the Navy announced that, due to a lack of funding, it
has postponed the CVN-72 RCOH. A February 8, 2013, Navy news story about the
announcement stated:
The aircraft carrier USS Abraham Lincoln (CVN 72) refueling complex overhaul (RCOH)
will not start due to a lack of funding, the Navy said Feb. 8.
Lincoln was expected to move to Newport News shipyard next week to begin the overhaul.
However, as a result of the fiscal constraints resulting from the ongoing continuing
resolution (CR), the contract for the refueling complex overhaul (RCOH) has not been issued
to Huntington Ingalls Industries, Inc.
Lincoln will remain pierside at Naval Station Norfolk until sufficient funding is received to
start the execution of the RCOH. In the meantime, the ship’s Sailors continue to conduct
maintenance....
The impact of postponing CVN 72’s RCOH is three-fold:
—the time scheduled for the RCOH will have to be lengthened because the overhaul won't
begin when it was expected,
—delayed redelivery of Lincoln to the fleet,
21 Although attack submarines typically are procured with one or two years of AP funding, they can also be procured in
a “point-blank” fashion, with no AP funding in a prior year. (For a discussion, see Appendix B of CRS Report
RL32418, Navy Virginia (SSN-774) Class Attack Submarine Procurement: Background and Issues for Congress, by
Ronald O'Rourke.) An additional Virginia-class submarine procured in FY2014 with no AP funding in FY2013 would
likely execute (i.e., be built) on a schedule more consistent with that of a submarine that had been procured in FY2015.
As a result, the total procurement cost of the submarine might change from the estimate that assumed that it would
receive AP funding in FY2013, and the effect that the addition of this submarine to the Virginia-class production line
would have on reducing the procurement costs of other Virginia-class boats could be different, which could affect the
estimate for the net additional cost of adding this boat to the proposed FY2014-FY2018 Virginia-class MYP contract.
Although an additional Virginia-class submarine procured in FY2014 with no AP funding in FY2013 might enter
service about a year later than what would normally be expected for a submarine procured in FY2014 (i.e., in 2021,
perhaps, rather than 2020), the boat would still enter service soon enough to mitigate the projected attack submarine
shortfall, which is currently projected to begin in FY2022 and reach its greatest extent in FY2028-FY2030. (For more
on the projected attack submarine shortfall, see CRS Report RL32418, Navy Virginia (SSN-774) Class Attack
Submarine Procurement: Background and Issues for Congress, by Ronald O'Rourke.)
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—and impacts to industry (takes away money/jobs and can delay subsequent scheduled
availabilities).
Cancelling or delaying maintenance creates a significant backlog of deferred maintenance
and affects future year schedules and costs, as well as future readiness. The delay in
Lincoln’s RCOH will affect other carrier work. Because of the short time available between
sequential dockings, the delay will also result in day-for-day impacts to the defueling of the
recently inactivated Enterprise (CVN 65) and the start of USS George Washington’s (CVN
73) RCOH.22
A February 8, 2013, press report stated:
The Navy needs $1.5 billion [in FY2013 funding] to cover the work [on the CVN-72 RCOH]
through the end of September, which is the end of fiscal 2013. While Congress granted $96
million in October to cover expenses for the first half of the fiscal year, that money runs out
after March, and the Navy doesn’t want to make the move to Newport News without
knowing whether it has the money to continue the work in the spring....
Any significant delay in beginning the Lincoln’s RCOH will ripple through years of carrier
scheduling. A carrier undergoing RCOH typically spends about 18 months in drydock at
Newport News. As soon as Lincoln completes her drydock period, the dock is scheduled to
receive the carrier Enterprise to defuel its reactors and prepare her for eventual dismantling.
By the time that job is complete, the George Washington, the next carrier to undergo the
refueling overhaul, is scheduled to arrive.
Across those three jobs, the dock is scheduled to have a carrier in it into early 2018 for all
except a handful of weeks.
Any delay, the Navy noted in a statement, will also have an impact on carrier maintenance
and operational availability, and increase the Lincoln’s RCOH costs.23
On February 27, 2013, the Navy announced that
Huntington Ingalls Inc. (HIINC), Newport News, Va., is being awarded a $40,057,112
modification to previously awarded contract (N00024-10-C-2110) for additional advance
planning efforts to prepare and make ready for the Refueling Complex Overhaul (RCOH) of
the USS Abraham Lincoln (CVN 72) and its reactor plants. All shipboard work will take
place at Naval Station Norfolk because of delay in awarding the RCOH due to the continuing
resolution. This effort will mitigate schedule impacts and help preserve the skilled work
force. This effort will provide for additional advanced planning, shipchecks, design,
documentation, engineering, procurement, fabrication and preliminary shipyard or support
facility work to prepare for and make ready for the refueling, overhaul, modernization and
routine work on CVN 72 and its reactor plants. Work will be performed in Norfolk, Va., and
is contracted to be complete by April 2013.24
22 Defense Media Activity—Navy, “Lack of Funding Affects USS Lincoln Refueling and Complex Overhaul,” Navy
News Service, February 8, 2013. See also Michael Welles Shapiro, “Navy Delays Lincoln Refueling, Cites ‘Lack Of
Funds,’” Newport news Daily Press, February 9, 2013.
23 Christopher P. Cavas, “U.S. Navy Nuclear Refueling Postponed Due To Budget Crisis,” DefenseNews.com, February
8, 2013.
24 DOD contract award announcement No. 115-13, February 27, 2013, accessed February 28, 2013, at
http://www.defense.gov/contracts/contract.aspx?contractid=4987. See also Michael Fabey, “U.S. navy Extends
Contract To Prepare Lincoln Carrier For Overhaul,” Aerospace Daily & Defense Report, February 28, 2013: 3.
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Sequester
A sequester of FY2013 DOD funding would cause FY2013 program-execution challenges in both
the Navy’s O&M account and its investment accounts (i.e., its research and development,
procurement, and military construction accounts). If the sequester were implemented under a CR
(i.e., if there were “a sequester inside a CR”), then these program-execution challenges would in
general be in addition to the those caused by the CR (see previous section). At a February 28,
2013, hearing on CR and sequester impacts before the Tactical Air and Land Forces
subcommittee of the House Armed Services Committee, the Navy testified that
Sequestration will impact our nuclear aircraft carrier force structure and the one-year CR
impacts contract awards for carrier refueling. Specifically, the current CR would delay the
contract award for the next Ford Class carrier, JOHN F. KENNEDY (CVN 79) and
sequestration would further slow construction, which would result in a delivery delay.
Current CR funding limitations would delay the completion of Nuclear Refueling Complex
Overhaul (RCOH) for USS THEODORE ROOSEVELT (CVN 71), the start of RCOHs for
USS ABRAHAM LINCOLN (CVN 72), and the defueling of USS ENTERPRISE (CVN
65). Given the short time available between sequential dry-docks, the CVN 72 and CVN 65
delays will also likely cause day-for-day impacts to the follow-on CVN 73 RCOH. The CVN
72 and CVN 73 delays will not be recoverable.25
Options for DOD, including the Navy, for responding to a sequester on FY2013 funding might
include (but not necessarily be limited to) the following:
• using any available reprogramming or transfer authority;
• optimizing the use of available funding within each program, project, or activity
(PPA);
• unilaterally declaring a reduction in scope of work of work to be performed
under contracts;
• renegotiating contracts; and
• canceling contracts.
Whether a sequester of FY2013 funding would reduce the number of ships procured in FY2013
(beyond any reduction already resulting from a year-long CR, if there is a year-long CR) is not
clear; the Navy might seek to preserve the number of ships procured in FY2013 under a sequester
by deferring to later years certain expenditures associated with the construction of those ships. At
a February 12, 2013, hearing before the Senate Armed Services Committee on potential impacts
on the military services of a year-long CR and sequestration, the Navy testified that:
On top of reductions in operations and maintenance funding, sequestration will reduce FY13
funding for each investment program (about $7.2 billion overall). In some programs, such F-
35C Lightning II, P-8A Poseidon and E-2D Hawkeye, this reduction will compel us to
reduce the number of platforms procured in FY13....
25 Statement of Hon. Sean J. Stackley, Assistant Secretary of the Navy (Research, Development and Acquisition), and
Vice Admiral Allen G. Myers, USN, Deputy Chief of Naval Operations [for] Integration of Capabilities and Resources,
and Lieutenant General John E. Wissler, USMC, Deputy Commandant for Programs and Resources, before the Tactical
Air and Land Forces Subcommittee of the House Armed Services Committee on Impacts of a Continuing Resolution
and Sequestration on Department of the Navy Acquisition, Programming & Industrial Base, February 28, 2013, p. 8.
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If Congress authorizes the Navy to transfer funds within the FY13 budget, we intend to
restore our most critical operations and maintenance requirements. This will be done by
taking funding from investments such as perhaps the P-8A Poseidon, F-35C Lightning II and
Littoral Combat Ship—resulting in fewer of these platforms being procured in FY13.26
In connection with the above passage, it can be noted that reducing the number of LCSs procured
in FY2013 below the requested quantity of four could compel the Navy to cancel or renegotiate at
least one of the two multiyear block buy contracts that the Navy currently has with the two LCS
builders.27
In a set of briefing slides dated February 15, 2013, the Navy listed potential program actions
resulting from a year-long CR and sequestration (see Appendix H). Potential shipbuilding-related
actions resulting from sequestration that the Navy listed in the briefing included the following:
• The Navy would seek congressional authority to use incremental funding for
the inactivation of the aircraft carrier Enterprise (CVN-65) and apply the
resulting FY2013 savings of about $561 million to mitigate other impacts on
FY2013 Navy programs of a year-long CR and sequester.
• About $46 million in advance procurement funding for the DDG-51
program would be at risk.
• The Navy would defer awarding contracts for about $90 million of work on
DDG-1002, the third Zumwalt (DDG-1000) class destroyer.
The above discussion focuses on the potential impact of sequestration on FY2013 Navy
shipbuilding programs. Some observers are using the term sequestration to mean something
broader, namely, a decision to reduce DOD spending (through sequestration or regular
appropriations activity) in FY2013-FY2021 years to levels at or near the lower caps established in
the Budget Control Act of 2011, or BCA (S. 365/P.L. 112-25 of August 2, 2011). Navy officials
state that a decision to reduce DOD’s budget to such levels would eventually lead to a smaller
Navy. At the February 12, 2013, hearing the Navy testified that:
In addition to sequestration for FY13, the BCA also required the lowering of the
discretionary caps for FY14 through FY21. Beyond FY13, if the discretionary cap reductions
are sustained for the full nine years, we would fundamentally change the Navy as currently
organized, trained and equipped. As time allows, we will take a deliberate and
comprehensive approach to this reduction, based on a reevaluation of the Defense Strategic
Guidance. In doing so, I will endeavor to: (1) ensure our people are properly resourced; (2)
protect sufficient current readiness and warfighting capability; (3) sustain some ability to
operate forward by continuing to forward base forces in Japan, Spain, Singapore and
Bahrain, and by using rotational crews; and (4) maintain appropriate research and
development.
26 Statement of Admiral Jonathan Greenert, Chief of Naval Operations, before the Senate Armed Services Committee
on the Impact of Sequestration, February 12, 2013, pp. 7, 8. Although the Navy’s written statement for the hearing is
from Admiral Greenert, the Navy’s testimony at the hearing was actually given by the Vice Chief of Naval Operations,
Admiral Mark E. Ferguson III, who was substituting for Admiral Greenert at the hearing. The Navy presented similar
testimony at a similar hearing before the House Armed Services Committee on February 13, 2013.
27 For more on the LCS block buy contracts, see CRS Report RL33741, Navy Littoral Combat Ship (LCS) Program:
Background and Issues for Congress, by Ronald O'Rourke.
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As I indicated last year to the Senate Armed Services Committee (SASC), under a set of
fiscal circumstances in sequestration, our Navy may be a fleet of around 230 ships. That
would be a loss of more than 50 ships, including the loss of at least two carrier strike groups.
We would be compelled to retire ships early and reduce procurement of new ships and
aircraft. This would result in a requisite reduction in our end strength. Every program will be
affected and as Secretary Panetta noted in his 2011 letter to Senators McCain and Graham,
programs such as the F-35 Lightning II, next generation ballistic missile submarine and
Littoral Combat Ship might be reduced or terminated.28
Navy Testimony, Memorandum, and Briefing Slides on Potential CR and
Sequester Impacts
Appendix E presents the full text of the Navy’s written statement for the February 12, 2013,
hearing before the Senate Armed Services Committee on the potential impacts of a year-long CR
and sequestration. Appendix F presents the full text of the Department of the Navy’s written
statement for the February 28, 2013, hearing before the Tactical Air and Land Forces
subcommittee of the House Armed Services Committee on the potential impacts of a year-long
CR and sequestration. Appendix G and Appendix H reprint a January 25, 2013, Navy
memorandum and February 15, 2013, Navy briefing slides on the potential impacts of a year-long
CR and sequestration.
Future Size and Structure of Navy in Light of Strategic and
Budgetary Changes
Another potential oversight issue for Congress concerns the planned size and structure of the
Navy. Changes in strategic and budgetary circumstances have led to a broad debate over the
appropriate future size and structure of the military, including the future size and structure of the
Navy. Changes in strategic circumstances include, among other things, the winding down of U.S.
combat operations in Iraq, the planned winding down of such operations in Afghanistan, and the
growth of China’s military capabilities.29 Changes in budgetary circumstances center on
28 Statement of Admiral Jonathan Greenert, Chief of Naval Operations, before the Senate Armed Services Committee
on the Impact of Sequestration, February 12, 2013, pp. 8-9. Although the Navy’s written statement for the hearing is
from Admiral Greenert, the Navy’s testimony at the hearing was actually given by the Vice Chief of Naval Operations,
Admiral Mark E. Ferguson III, who was substituting for Admiral Greenert at the hearing. The Navy presented similar
testimony at a similar hearing before the House Armed Services Committee on February 13, 2013.
Similarly, on October 22, 2012, Admiral Mark Ferguson, the Vice Chief of Naval Operations, stated, “If you project
out 10 years—remember that the budget control act talks about 10 years of [funding] reductions—now you start talking
about a fleet reduced to about 230-235 ships.” (As quoted in David Smalley, “Leaner Navy Looking at Future
Technology, Fleet Size and Sequestration,” Navy News Service, October 23, 2012, accessed October 25, 2012 at
http://www.navy.mil/submit/display.asp?story_id=70311.) On January 8, 2013, Vice Admiral William Burke, the
Deputy Chief of Naval Operations for Warfare Systems, stated, “As a result of sequestration, what I testified to last
year was we’ll have, if sequestration is fully implemented, we’ll have a force of about 230 ships.... I’m not talking
about what the aviation numbers are, but they’ll go down by a similar amount—a similar amount being 20 percent.”
(As quoted in Dan Taylor, “Adm. Burke: Navy Needs To Fill $2 Billion Hole When OCO Goes Away,” Inside the
Navy, January 14, 2013. See also Michael Fabey, “U.S. Navy Prioritizes Ship Total Ownership Costs, Maintenance,”
Aerospace Daily & Defense Report, January 9, 2013: 3.)
29 For more on the growth in China’s military (particularly naval) capabilities and its potential implications for required
U.S. Navy capabilities, see CRS Report RL33153, China Naval Modernization: Implications for U.S. Navy
Capabilities—Background and Issues for Congress, by Ronald O'Rourke.
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reductions in planned levels of defense spending resulting from the Budget Control Act of 2011
(S. 365/P.L. 112-25 of August 2, 2011).
On January 5, 2012, the Administration announced that, in light of the winding down of U.S.
combat operations in Iraq, the planned winding down of such operations in Afghanistan, and
developments in the Asia-Pacific region, U.S. defense strategy in coming years will include a
stronger focus on the Asia-Pacific region.30 Since the Asia-Pacific region is to a significant degree
a maritime and aerospace theater for the United States, this shift in strategic focus is expected by
many observers to result in a shift in the allocation of DOD resources toward the Navy and Air
Force.
The Navy’s current goal for a fleet of 306 ships reflects a number of assumptions and planning
factors, including but not limited to the following:
• current and projected Navy missions in support of U.S. military strategy,
including both wartime operations and day-to-day forward-deployed operations;
• current and projected capabilities of potential adversaries, including their anti-
access/area-denial (A2/AD) capabilities;
• regional combatant commander (COCOM) requests for Navy forces;
• the individual and networked capabilities of current and future Navy ships and
aircraft;
• basing arrangements for Navy ships, including numbers and locations of ships
homeported in foreign countries;
• maintenance and deployment cycles for Navy ships; and
• fiscal constraints.
With regard to the third point above, Navy officials testified at least three times in 2012 that a
Navy of more than 500 ships would be required to fully meet COCOM requests for Navy forces
(see Appendix A). The difference between a fleet of more than 500 ships and the current goal for
a fleet of 306 ships can be viewed as one measure of the operational risk associated with the goal
of a fleet of 306 ships. A goal for a fleet of more than 500 ships might be viewed as a fiscally
unconstrained goal.
Some study groups have made their own proposals for Navy ship force structure. Table 5 shows
some of these proposals. For purposes of comparison, Table 5 also shows the Navy’s 306-ship
goal of January 2013.
30 Department of Defense, Sustaining U.S. Global Leadership: Priorities for 21st Century Defense, January 2012, 8 pp.
For more on this document, see CRS Report R42146, In Brief: Assessing DOD’s New Strategic Guidance, by Catherine
Dale and Pat Towell.
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Table 5. Recent Study Group Proposals for Navy Ship Force Structure
Center for a
Center for
Independent
New
Strategic
Panel
American
and
Navy’s 306-
Heritage
Cato
Assessment
Sustainable
Security
Budgetary
ship goal of
Foundation
Institute
of 2010
Defense
(CNAS)
Assessments
January
(April
(September
QDR
Task Force
(November
(CSBA)
Ship type
2013
2011)
2010)a
(July 2010)
(June 2010)
2008)
(2008)b
Submarines
SSBN
12 14c 6 14 7 14 12
SSGN
0 4 0 4 4 0 2
SSN
48 55 40 55 37 40 41
Aircraft carriers
CVN
11 11 8 11 9 8 11
CVE
0 0 0 0 0 0 4
Surface combatants
Cruiser
22 n/a
18 14
88 88
85
Destroyer 65
n/a
56
73
Frigate
0
14 n/a 0 0 9e
28d
LCS
52 4
n/a
25
48
55
SSC
0 0 0 n/a 0 40 0f
Amphibious and Maritime Prepositioning Force (Future) (MPF[F]) ships
Amphibious ships
33 37 23 n/a 27 36 33
MPF(F) ships
0 0 0 n/a
n/a 0 3g
LSD station ships
0 0 0 n/a
n/a n/a 7h
Other: Mine warfare (MIW) ships; Combat logistics force (CLF) ships (i.e., at-sea resupply ships), and support ships
MIW
0 14 11 0 0 0 0
CLF ships
29 33 21 n/a
31
36 40
Support ships
33 25 27 n/a
31
TOTAL battle
306 309 241 346 230 300 326i
force ships
Source: Table prepared by CRS based on the fol owing sources: For Heritage Foundation: A Strong National
Defense[:] The Armed Forces America Needs and What They Will Cost, Heritage Foundation, April 5, 2011, pp. 25-
26. For Cato Institute: Benjamin H. Friedman and Christopher Preble, Budgetary Savings from Military Restraint,
Washington, Cato Institute, September 23, 2010 (Policy Analysis No. 667), pp. 6, 8-10, and additional
information provided by Cato Institute to CRS by e-mail on September 22, 2010. For Independent Panel
Assessment: Stephen J. Hadley and William J. Perry, co-chairmen, et al., The QDR in Perspective: Meeting
America’s National Security Needs In the 21st Century, The Final Report of the Quadrennial Defense Review Independent
Panel, Washington, 2010, Figure 3-2 on pages 58-59. For Sustainable Defense Task Force: Debt, Deficits, and
Defense, A Way Forward[:] Report of the Sustainable Defense Task Force, June 11, 2010, pp. 19-20. For CNAS:
Frank Hoffman, From Preponderance to Partnership: American Maritime Power in the 21st Century. Washington,
Center for a New American Security, November 2008. p. 19 (Table 2). For CSBA: Robert O. Work, The US
Navy[:] Charting a Course for Tomorrow’s Fleet. Washington, Center for Strategic and Budgetary Assessments,
2008. p. 81 (Figure 5).
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Notes: n/a is not addressed in the report. SSBN is nuclear-powered ballistic missile submarine; SSGN is
nuclear-powered cruise missile and special operations forces submarine; SSN is nuclear-powered attack
submarine; CVN is large nuclear-powered aircraft carrier; CVE is medium-sized aircraft carrier; LCS is Littoral
Combat Ship; SSC (an acronym created by CRS for this table) is smal surface combatant of 1,000+ tons
displacement—a ship similar to late-1990s Streetfighter concept; MPF(F) is Maritime Prepositioning Force
(Future) ship; LSD is LSD-41/49 class amphibious ship operating as a station ship for a formation like a Global
Fleet Station (GFS); MIW is mine warfare ship; CLF is combat logistics force (i.e., resupply) ship.
a. Figures shown are for the year 2020; for subsequent years, reductions from these figures would be
considered.
b. Figures shown are for the year 2028.
c. The report calls for a force of 280 SLBMs, which appears to equate to a force of 14 SSBNs, each with 20
SLBM tubes.
d. The report calls for a force of 28 small surface combatants, and appears to use the term small surface
combatants the same way that the Navy does in the 30-year shipbuilding plan—as a way of collectively
referring to frigates and LCSs. The small surface combatants (SSCs) called for in the November 2008 CNAS
report are separate from and smaller than the LCS.
e. Maritime Security Frigates.
f.
Plan includes 28 patrol craft (PCs) of a few hundred tons displacement each, as wel as 29 boat detachments
and seven riverine squadrons.
g. Plan shows three Mobile Landing Platform (MLP) ships that the Navy currently plans for the MPF(F)
squadron, plus 16 existing current-generation maritime prepositioning force (MPF) ships and 17 existing
prepositioning ships for Army and other service/agency equipment. Plan also shows 67 other DOD sealift
ships.
h. T-LSDs, meaning LSDs operated by the Military Sealift Command (MSC) with a partly civilian crew.
i.
The CSBA report shows a total of 488 units by including 162 additional force units that do not count
toward the 306 ship goal under the battle force ships counting method that has been used since the early
1980s for public policy discussions of the size of the Navy. These 162 additional force units include 16
existing current-generation maritime prepositioning force (MPF) ships and 17 existing prepositioning ships
for Army and other service/agency equipment, 67 other DOD sealift ships, 28 PCs, 29 boat detachments,
and certain other smal -scale units. The CSBA report proposes a new counting method for naval/maritime
forces that includes units such as these in the total count.
A potential key question for Congress concerns whether the U.S. Navy in coming years will be
large enough to adequately counter improved Chinese maritime anti-access forces while also
adequately performing other missions of interest to U.S. policymakers around the world. Some
observers are concerned that a combination of growing Chinese naval capabilities and budget-
driven reductions in the size of the U.S. Navy could encourage Chinese military overconfidence
and demoralize U.S. allies and partners in the Pacific, and thereby make it harder for the United
States to defend its interests in the region.31 Potential oversight questions for Congress include the
following:
• Under the Administration’s plans, will the Navy in coming years be large enough
to adequately counter improved Chinese maritime anti-access forces while also
adequately performing other missions of interest to U.S. policymakers around the
world?
31 See, for example, Dan Blumenthal and Michael Mazza, “Asia Needs a Larger U.S. Defense Budget,” Wall Street
Journal, July 5, 2011; J. Randy Forbes, “Defence Cuts Imperil US Asia Role,” The Diplomat (http://the-diplomat.com),
October 26, 2011. See also Andrew Krepinevich, “Panetta’s Challenge,” Washington Post, July 15, 2011: 15; Dean
Cheng, Sea Power and the Chinese State: China’s Maritime Ambitions, Heritage Foundation Backgrounder No. 2576,
July 11, 2011, p. 10.
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• What might be the political and security implications in the Asia-Pacific region
of a combination of growing Chinese naval capabilities and budget-driven
reductions in the size of the U.S. Navy?
• Are the proposed early retirements of nine Aegis cruisers and the placing of two
LSD-41/49 class amphibious ships into Reduced Operating Status (ROS)
consistent with the stronger focus on the Asia-Pacific region in DOD’s new
strategic guidance? What are the potential operational implications of these early
retirements? What steps, if any are being taken to preserve a potential for
reactivating these nine ships, should circumstances warrant their reactivation?
• If the Navy is reduced in size and priority is given to maintaining Navy forces in
the Pacific, what will be the impact on Navy force levels in other parts of the
world, such as the Persian Gulf/Indian Ocean region or the Mediterranean Sea,
and consequently on the Navy’s ability to adequately perform its missions in
those parts of the world?
• To what extent could the operational impacts of a reduction in Navy ship
numbers be mitigated through increased use of forward homeporting, multiple
crewing, and long-duration deployments with crew rotation (i.e., “Sea Swap”)?
How feasible are these options, and what would be their potential costs and
benefits?
• Particularly in a situation of constrained DOD resources, if enough funding is
allocated to the Navy to permit the Navy in coming years to maintain a fleet of
306 ships including 11 aircraft carriers, how much would other DOD programs
need to be reduced, and what would be the operational implications of those
program reductions in terms of DOD’s overall ability to counter improved
Chinese military forces and perform other missions?32
Sufficiency of FY2013 30-Year Shipbuilding Plan
Another potential oversight issue for Congress concerns the sufficiency of the FY2013 30-year
(FY2012-FY2041) shipbuilding plan. As discussed earlier (see “Navy’s Projected Force Levels
Under 30-Year (FY2013-FY2042) Shipbuilding Plan”), the plan does not include enough ships to
fully support all elements of the 306-ship goal over the long run. The Navy projects that the fleet
would remain below 306 ships during most of the 30-year period and experience shortfalls at
various points in cruisers-destroyers, attack submarines, and amphibious ships.
Although the projected cruiser-destroyer and attack submarine shortfalls are smaller under the
FY2013 30-year plan than they were under the FY2012 30-year plan, the shortfalls in cruisers-
destroyers, attack submarines, and amphibious ships projected under the FY2013 30-year plan
could make it difficult for the Navy to fully perform its projected missions in certain years. In
light of these projected shortfalls, policymakers may wish to consider various options, including
but not limited to the following:
• keeping in active service some or all of the seven Aegis cruisers that the Navy’s
FY2013 budget proposes for early retirement, and/or the two LSD-41/49 class
32 For further discussion, see CRS Report RL33153, China Naval Modernization: Implications for U.S. Navy
Capabilities—Background and Issues for Congress, by Ronald O'Rourke.
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amphibious ships that the Navy’s FY2013 budget proposes shifting to Reduced
Operating Status (ROS);
• increasing planned procurement quantities of destroyers and attack submarines,
perhaps particularly in years prior to the start of SSBN(X) procurement; and
• extending the service lives of older destroyers to 40 or 45 years, and refueling a
small number of older attack submarines and extending their service lives to 40
or more years.
The Navy estimates that keeping in service the seven Aegis cruisers proposed for early retirement
would cost a total of a little more than $4 billion over the period FY2013-FY2017. This figure
includes costs for conducting maintenance and modernization work on the ships during those
years; for operating the ships during those years (including crew costs); and for procuring,
crewing, and operating during those years helicopters that would be embarked on the ships.33
Regarding the third option above, possible candidates for service life extensions include the first
28 DDG-51 destroyers (i.e., the Flight I/II DDG-51s), the final 23 Los Angeles (SSN-688) attack
submarines (i.e., the Improved 688s), and the 3 Seawolf (SSN-21) class attack submarines.
Whether such service life extensions would be technically feasible or cost-effective is not clear.
Feasibility would be a particular issue for the attack submarines, given limits on submarine
pressure hull life.
Extending the service lives of any of these ships could require increasing funding for their
maintenance, possibly beginning in the near term, above currently planned levels, so that the
ships would be in good enough condition years from now to remain eligible for service life
extension work. Such funding increases would be in addition to those the Navy has recently
programmed for ensuring that its surface ships can remain in service to the end of their currently
planned service lives.
As mentioned earlier, the Navy’s 30-year shipbuilding plan is based on certain assumptions,
including assumptions about ship service lives. The Navy in past years has, for various reasons,
retired numerous ships, including surface combatants and attack submarines, well before the ends
of their expected service lives. Many of these retirements were due to the decision to reduce the
size of the Navy following the end of the Cold War. Other instances were due to the material
condition of the ships or the projected costs of keeping them mission-effective through the ends
of their service lives. If ship service lives in some cases turn out to be shorter than assumed under
the 30-year plan, then Navy ship force levels will be smaller in certain years than shown in Table
4.
Affordability of FY2013 30-Year Shipbuilding Plan
Another potential oversight issue for Congress concerns the prospective affordability of the
FY2013 30-year (FY2013-FY2042) shipbuilding plan. In assessing the prospective affordability
of the FY2013 30-year shipbuilding plan, key factors that Congress may consider include
estimated ship procurement costs and future shipbuilding funding levels.
33 Source: Transcript of spoken testimony of Vice Admiral William Burke, Deputy Chief of Naval Operations, Fleet
Readiness and Logistics, before the Readiness subcommittee of the House Armed Services Committee, March 22,
2012.
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Estimated Ship Procurement Costs
As mentioned earlier, the Navy’s 30-year shipbuilding plan is based on certain assumptions,
including assumptions about ship procurement costs. If one or more Navy ship designs turn out to
be more expensive to build than the Navy estimates, then the projected funding levels shown in
the 30-year shipbuilding plan will not be sufficient to procure all the ships shown in the plan.
Ship designs that can be viewed as posing a risk of being more expensive to build than the Navy
estimates include Gerald R. Ford (CVN-78) class aircraft carriers (a program currently
experiencing cost growth), Ohio-replacement (SSBNX) class ballistic missile submarines, the
Flight III version of the DDG-51 destroyer, and the LSD(X) amphibious ship.
In recent years, the Congressional Budget Office (CBO) has estimated that certain Navy ships
would be more expensive to procure than the Navy estimates, and consequently that the Navy’s
30-year shipbuilding plan would cost more to implement than the Navy has estimated. In its July
2012 report on the cost of the FY2013 30-year shipbuilding plan, CBO estimates that the plan
would cost an average of $20.0 billion per year in constant FY2012 dollars to implement, or
about 19% more than the Navy estimates. CBO’s estimate is about 11% higher than the Navy’s
estimate for the first 10 years of the plan, about 13% higher than the Navy’s estimate for the
second 10 years of the plan, and about 33% higher than the Navy’s estimate for the final 10 years
of the plan.34 Some of the difference between CBO’s estimate and the Navy’s estimate,
particularly in the latter years of the plan, is due to a difference between CBO and the Navy in
how to treat inflation in Navy shipbuilding. Table 6 summarizes the Navy and CBO estimates of
the FY2013 30-year shipbuilding plan, as presented in the July 2012 CBO report.
Table 6. Navy and CBO Estimates of Cost of FY2013 30-Year (FY2013-FY2042)
Shipbuilding Plan
Funding for new-construction ships, in billions of constant FY2012 dollars
First 10 years
Next 10 years
Final 10 years
Entire 30 years
(FY2013-FY2022)
(FY2023-2032)
(FY2033-FY2042)
(FY2013-FY2042)
Navy estimate
15.1
19.5
15.9
16.8
CBO estimate
16.8
22.0
21.2
20.0
% difference
11% 13% 33% 19%
between Navy and
CBO estimates
Source: Congressional Budget Office, An Analysis of the Navy’s Fiscal Year 2013 Shipbuilding Plan, July 2012, Table
2 (Page 11).
Future Shipbuilding Funding Levels
As mentioned earlier, the Navy’s 30-year shipbuilding plan is based on certain assumptions,
including assumptions about future shipbuilding funding levels. It has been known for some time
that funding requirements for the Ohio-replacement (SSBN[X]) ballistic missile submarine
program will put considerable pressure on the shipbuilding budget during the middle years of the
30-year plan. Although the FY2013 30-year shipbuilding plan reduces procurement of other types
34 Congressional Budget Office, An Analysis of the Navy’s Fiscal Year 2013 Shipbuilding Plan, July 2012, Table 2
(page 11).
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of ships in the middle years of the plan to help accommodate the SSBN(X) program, the Navy
still projects that the shipbuilding budget would need to be substantially higher during the middle
10 years of the plan than during the first or last 10 years of the plan.
If the “hump” in shipbuilding funding during the middle 10 years of the 30-year plan is not
achieved, numerous ships shown for procurement during the middle 10 years of the plan might
not be procured. A potential oversight question for Congress is whether the Navy has received a
commitment or assurance of some kind from DOD leaders that the Navy will be able to budget
for the “hump” in shipbuilding funding during the middle years of the 30-year plan without
reducing funding for other Navy program priorities.
Near-Term Options for Adding Ships and Reducing Ship Unit
Procurement Costs
Congressional review to date of the Navy’s FY2013 5-year and 30-year shipbuilding plans has
included, among other things, discussion of near-term options for adding ships to the plan and
reducing ship unit procurement costs. These options include the following:
• adding a second Virginia-class attack submarine to FY2014 and, as a
consequence, increasing to 10 the number of Virginia-class submarines procured
under the proposed FY2014-FY2018 multiyear procurement (MYP) arrangement
for the Virginia-class program;
• adding a 10th DDG-51 destroyer to the proposed FY2013-FY2017 MYP
arrangement for the DDG-51 program; and
• procuring the aircraft carriers CVN-79 and CVN-80 under a block buy
arrangement.
The first two options could mitigate operational risks associated with the projected cruiser-
destroyer and attack submarine shortfalls. The third option could reduce the cost of implementing
the 30-year shipbuilding plan.
Adding a Second Virginia Class Boat in FY2014
Another issue for Congress for FY2013 is whether to restore procurement of a second Virginia-
class boat in FY2014. Navy officials have testified that the second Virginia-class boat that had
been programmed for FY2014 was deferred to FY2018 in the FY2013 budget submission for
fiscal reasons—because FY2014 has become a tight budget year for the Navy—and that the Navy
is interested in finding a way, if possible, to restore the procurement of a second Virginia-class
boat to FY2014.35
Advance Procurement Funding in FY2013
The question of whether to procure a second boat in FY2014 is an issue for FY2013 because
procuring a second boat in FY2014 could involve adding advance procurement funding for that
35 See, for example, the spoke testimony of Secretary of the Navy Ray Mabus to the House Armed Services Committee
on February 16, 2012.
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boat in FY2013. The Navy testified on April 19, 2012, that procuring a second boat in FY2014
using a normal funding profile would require adding about $777 million in Virginia-class
program advance procurement funding in FY2013, and more than $1.2 billion in Virginia-class
program procurement funding in FY2014.36
Option of Incremental Funding
Finding a way to procure a second Virginia-class boat in FY2014 could involve the use of
incremental funding (as opposed to full funding) in the Virginia-class program, at least for the
second boat in FY2014, if not also for one or more other Virginia-class boats. Incrementally
funding a second boat in FY2014 would involve providing some of the boat’s procurement cost in
FY2014 and deferring the remainder to one or more subsequent years. Incrementally funding
additional Virginia-class boats could involve similarly spreading out their procurement costs over
multiple years. Incrementally funding multiple Virginia-class boats over the next few years could
minimize the amount of additional Virginia-class program procurement funding that would be
required over the next few years to fund a second boat in FY2014, though that additional funding
would eventually need to be provided.
Incremental funding is normally used only for procuring aircraft carriers and LHD/LHA-type
amphibious assault ships,37 but there have been rare cases when individual ships of other types
have, for various reasons, been procured with incremental funding. Examples include the third
and final Seawolf (SSN-21) class attack submarine, whose procurement was reinstated in
FY1996, each of the three Zumwalt (DDG-1000) class destroyers that were procured in FY2007-
FY2009,38 and ships procured through the National Defense Sealift Fund (NDSF), including
Navy auxiliary ships and DOD sealift ships, which are often executed by the Navy with
incremental funding, even though they are nominally funded by Congress with full funding.39
36 Spoken testimony of Sean Stackley, Assistant Secretary of the Navy for Research, Development, and Acquisition
(i.e., the Navy’s acquisition executive) before the Seapower subcommittee of the Senate Armed Services committee, at
an April 19, 2012, hearing on the Navy’s proposed FY2013 shipbuilding programs, as reflected in the transcript of the
hearing.
Providing advance procurement funding for the boat in FY2013 would permit the boat to be constructed on a schedule
that is more-or-less consistent with what one might expect for a boat procured in FY2014. Adding advance
procurement funding in FY2013, however, is not absolutely required to procure a second boat in FY2014—the boat can
be procured in FY2014 without any advance procurement funding in FY2013. Doing so might result in the boat being
built on a schedule closer to what one might expect for a boat procured in FY2015, but the boat would still enter
service years earlier than it would if it is procured in FY2018.
37 Incremental funding is allowed for procuring aircraft carriers and LHD/LHA-type amphibious assault ships because
using full funding to procure these ships—which are very expensive and which are procured once every several
years—can cause a one-year “spike” in Navy shipbuilding funding requirements that can be disruptive to other
acquisition programs.
38 The first two DDG-1000s were procured in FY2007 and split-funded (i.e., funded with two-year incremental
funding) in FY2007-FY2008. The third DDG-1000 was procured in FY2009 and split-funded in FY2009-FY2010.
39 The full funding provision does not apply to ships funded in the NDSF—a DOD fund that is outside the procurement
title of the annual DOD appropriations act—the same way that it applies to ships, aircraft, vehicles, and other end items
that are procured through the procurement title of the annual appropriations act. For a discussion, see CRS Report
RL31404, Defense Procurement: Full Funding Policy—Background, Issues, and Options for Congress, by Ronald
O'Rourke and Stephen Daggett, and CRS Report RL32776, Navy Ship Procurement: Alternative Funding
Approaches—Background and Options for Congress, by Ronald O'Rourke.
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Navy Estimate of Cost of Adding a Second Boat in FY2014
The Navy in March 2012 estimated that adding a second Virginia-class boat to FY2014 and
increasing to 10 the number of boats in the proposed MYP arrangement would reduce the total
cost of the other 9 boats in the arrangement by roughly $700 million.40 The reduction in cost
would come from production learning-curve benefits at both the two shipyards (GD/EB and
NNS) and component vendors, from increased spreading of fixed overhead costs at the shipyards,
and from reduced costs for components procured from suppliers in batches of 10 rather than
batches of 9. Since the figure of roughly $700 million is equivalent to about 27% of the cost of a
Virginia-class submarine, the Navy, in effect, was estimating in March that adding a second
Virginia-class boat to FY2014 and increasing to 10 the number of boats in the proposed MYP
arrangement would be roughly 27% self-financing.
The Navy subsequently revised this estimate, using more up-to-date cost data for the Virginia-
class program, and now estimates that adding a second Virginia-class boat to FY2014 and
increasing to 10 the number of boats in the proposed MYP arrangement reduce the total cost of
the other 9 boats in the arrangement by roughly $900 million, which would make adding a second
Virginia-class boat to FY2014 and increasing to 10 the number of boats in the proposed MYP
arrangement roughly 35% self-financing.41
The Navy further estimates that if the calculation is extended to include cost effects on all
Virginia-class boats procured through FY2020 (including boats procured prior to FY2014, the
first year of the proposed MYP arrangement), then adding a second Virginia-class boat to FY2014
and increasing to 10 the number of boats in the proposed MYP arrangement would reduce
Virginia-class procurement costs for boats procured through FY2020 by roughly $1,400 million,
which would make adding a second Virginia-class boat to FY2014 and increasing to 10 the
number of boats in the proposed MYP arrangement roughly 54% self-financing.42
Arguments of Supporters and Skeptics
Supporters of adding a second Virginia-class boat to FY2014 and increasing to 10 the number of
boats in the proposed MYP arrangement could argue that the Navy estimates that it would be
roughly 35% to 54% self-financing due to the effect it would have on reducing costs for the other
Virginia-class boats, that it would further mitigate the projected SSN shortfall, and that Congress
in the past has on occasion used incremental funding for procuring ships other than aircraft
carriers and LHD/LHA-type amphibious assault ships.
Skeptics of adding a second Virginia-class boat to FY2014 and increasing to 10 the number of
boats in the proposed MYP arrangement could argue that the Navy’s estimate that it would be
roughly 35% to 54% self-financing has not been independently verified, that finding funding for
the other 46% to 65% of the boat’s cost could require offsetting near-term reductions in other
defense programs that would create their own problems, and that the use of incremental funding
should be avoided for the procurement of ships other than aircraft carriers and LHD/LHA-type
amphibious assault ships.
40 Source: Navy briefing to CRS and Congressional Budget Office (CBO), March 16, 2012.
41 Source: Navy briefing to CRS and Congressional Budget Office (CBO), May 9, 2012.
42 Source: Navy briefing to CRS and Congressional Budget Office (CBO), May 9, 2012.
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Adding a 10th DDG-51 to the DDG-51 MYP
Regarding the possibility of adding a 10th DDG-51 to the proposed FY2013-FY2017 MYP
arrangement for the DDG-51 program, Sean Stackley, the Assistant Secretary of the Navy for
Research, Development, and Acquisition (i.e., the Navy’s acquisition executive), stated the
following at a March 29, 2012, hearing on Navy shipbuilding programs before the Seapower and
Projection Forces subcommittee, in response to a question about the FY2013 budget’s deferral to
FY2016 of a second DDG-51 that was previously programmed for FY2014:
I’d like to address the question regarding the second destroyer in 2014. A couple of
important facts: First, the—we restarted DDG-51 construction in—in [FY]2010 and we’ve
got four ships under contract, and a result of the four ships that we’ve placed under contract
is we have prior year savings in this program that are—work in our favor when we consider
future procurement for the [DDG-]51s.
We also have a unique situation where we’ve got competition on this program—two builders
building the 51s, and the competition has been healthy with both builders. We also have a
very significant cost associated with government-furnished equipment, so not only did we
restart construction at the shipyards, we also restarted manufacturing lines at our weapon
systems providers.
So in this process we were able to restart 51s virtually without skipping a beat, and we’re
seeing the continued learning curve that we left off on back with the [FY]2005 procurement.
So when we march into this third multiyear for the 51s we’re looking to capitalize on the
same types of savings that we saw prior, and our top line, again, allowed for nine ships to be
budgeted, but when we go out with this procurement we’re going to go out with a
procurement that enables the procurement of 10 ships, where that 10th ship would be the
second—potentially the second ship in [FY]2014 if we’re able to achieve the savings that
we’re targeting across this multiyear between the shipbuilders in competition as well as the
combat systems providers as well as all of the other support and engineering associated with
this program.
So we want to leverage the strong learning, we want to leverage the strong industrial base,
we want to leverage the competition to get to what we need in terms of both affordability and
force structure, and I think we have a pretty good shot at it.43
Block Buy for CVN-79 and CVN-80
The Navy currently plans to procure the aircraft carriers CVN-79 and CVN-80 separately, as one-
ship procurements. Procuring the two ships together in a block buy could reduce their combined
procurement cost. Procuring two aircraft carriers together in a two-ship block buy has been done
on two previous occasions. The Navy procured two Nimitz (CVN-68) class aircraft carriers
(CVN-72 and CVN-73) together in a block buy in FY1983, and procured another two Nimitz-
class aircraft carriers (CVN-74 and CVN-75) together in a block buy in FY1988. The Navy
proposed these block buys in the FY1983 and FY1988 budget submissions.44
43 Source: Transcript of hearing. See also Megan Eckstein, “Navy Looking Into Feasibility Of Procuring 10th DDG In
Multiyear Contract,” Inside the Navy, April 2, 2012.
44 It can also be noted that the Air Force is procuring two Advanced EHF (AEHF) satellites under a two-satellite block
buy that the Air Force proposed and Congress approved in FY2012.
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When the FY1983 block buy was proposed, the Navy estimated that the block buy would reduce
the combined cost CVN-72 and CVN-73 by 5.6% in real terms.45 When the FY1988 block buy
was proposed, the Navy estimated that the block buy would reduce the combined cost of CVN-74
and CVN-75 by a considerably larger percentage. GAO stated that the savings would be
considerably less than the Navy estimated, but agreed that a two-ship acquisition strategy is less
expensive than a single-ship acquisition strategy, and that some savings would occur in a two-
ship strategy for CVN-74 and CVN-75.46
The FY1983 and FY1988 block buys each involved procuring two aircraft carriers in a single
year. Procuring two carriers in the same year, however, is not mandatory for a two-ship aircraft
carrier block buy. The Navy, for example, proposed the block buy for CVN-74 and CVN-75 in
the FY1988 budget submission as something that would involve procuring CVN-74 in FY1990
and CVN-75 in FY1993. (Congress, in acting on the FY1988 budget, decided to not only approve
the two-ship block buy, but also accelerate the procurement of both CVN-74 and CVN-75 to
FY1988.)47 A block buy on CVN-79 and CVN-80 could leave intact the FY2013 procurement
date for CVN-79 and the FY2018 procurement date for CVN-80. This would permit the funding
for the two ships to be spread out over the same fiscal years as currently planned, although the
amounts of funding in individual years would likely change.
It is too late to implement a complete block buy on CVN-79 and CVN-80, because some of CVN-
79, particularly its propulsion plant, has already been purchased. Consequently, the option would
45 See General Accounting Office, Request to Fully Fund Two Nuclear Aircraft Carriers in Fiscal Year 1983,
MASAD-82-87 (B-206847), March 26, 1982, 10 pp. The figure of 5.6% was derived by dividing $450 million in non-
inflation cost avoidance shown on page 5 by the combined estimated cost of the two ships (absent a block buy) of
$8,024 million shown on page 4.
46 See General Accounting Office, Procurement Strategy For Acquiring Two Nuclear Aircraft Carriers, Statement of
Frank Conahan, Assistant Comptroller General, National Security and International Affairs Division, Before the
Conventional Forces and Alliance Defense Subcommittee and Projection Forces and Regional Defense Subcommittee
of the Senate Armed Services Committee, April 7, 1987, T-NSIAD-87-28, 5 pp. The testimony states on page 2 that “A
single ship acquisition strategy is more expensive because materials are bought separately for each ship rather than
being combined into economic order quantity buys under a multi-ship procurement.” The report discounted the Navy’s
estimated savings of $1,100 million based on this effect on the grounds that if CVN-74 and CVN-75 were not procured
in the proposed two-ship block buy, with CVN-74 procured in FY1990 and CVN-75 procured FY1993, it was likely
that CVN-74 and CVN-75 would subsequently be procured in a two-ship block buy, with CVN-74 procured in FY1994
and CVN-75 procured in FY1996. For the discussion here, however, the comparison is between the Navy’s current plan
to procure CVN-79 and CVN-80 separately and the potential alternative of procuring them together in a block buy.
The GAO report commented on an additional $700 million in savings that the Navy estimated would be derived from
improving production continuity between CVN-73, CVN-74, and CVN-75 by stating on page 3 that “It is logical to
assume that savings are possible through production continuity but the precise magnitude of such savings is difficult to
calculate because of the many variables that affect the outcome.” It is not clear how significant savings from production
continuity might be in a two-ship block buy for CVN-79 and CVN-80 if the procurement dates for the two ships
(FY2013 and FY2018, respectively) are not changed.
The GAO report noted that the Navy estimated $500 million in additional savings from avoided configuration changes
on CVN-74 and CVN-75 if the ships were procured in FY1990 and FY1993 rather than FY1994 and FY1996. It is not
clear how significant the savings from avoided configuration changes might be for a two-ship block buy for CVN-79
and CVN-80.
See also CRS Issue Brief IB87043, Aircraft Carriers (Weapons Facts), 13 pp., updated February 10, 1988 and archived
March 24, 1988, by Ronald O’Rourke. The report includes a discussion of the above GAO report. The report is out of
print and available directly from the author.
47 See CRS Issue Brief IB87043, Aircraft Carriers (Weapons Facts), 13 pp., updated February 10, 1988 and archived
March 24, 1988, by Ronald O’Rourke. The report is out of print and available directly from the author.
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be to implement a partial block buy that would include the remaining part of CVN-79 and all of
CVN-80.
To illustrate the notional scale of the savings that might result from using a block buy strategy on
CVN-79 and CVN-80, it can be noted that if such a block buy were to achieve one-third as much
percentage cost reduction as the FY1983 block buy—that is, if it were to reduce the combined
procurement cost of CVN 79 and 80 by about 1.9%—that would equate to a savings of roughly
$470 million on the currently estimated combined procurement cost of CVN-79 and CVN-80.
More refined estimates might be higher or lower than this notional figure of $470 million.
At a March 19, 2012, briefing for CRS and CBO on the CVN-78 program, CRS asked the Navy
whether it was considering the possibility of a block buy on CVN-79 and CVN-80. The Navy
stated that it had looked into a narrower option of doing joint purchases of some materials for the
two ships.
Implementing a block buy on CVN-79 and CVN-80 would require committing to the
procurement of CVN-80. Whether Congress would want to commit to the procurement of CVN-
80, particularly in light of current uncertainty over future levels of defense spending, is a factor
that Congress may consider in assessing the option of doing a block buy. If budgetary
circumstances were to lead to a decision to end procurement of Ford-class carriers after CVN-79,
then much or all of the funding spent procuring materials for CVN-80 could go to waste.
At a March 29, 2012, hearing on Navy shipbuilding programs before the Seapower and Projection
Forces subcommittee of the House Armed Services Committee, Sean Stackley, the Assistant
Secretary of the Navy for Research, Development, and Acquisition (i.e., the Navy’s acquisition
executive), stated the following when asked by Representative Robert Wittman about the
possibility of a two-ship block buy on CVN-79 and CVN-80:
Yes, sir. Let me focus on affordability of the CVN-78 class. We are right now about 40
percent complete construction of the CVN-78 and we’re running into some very difficult
cost growth issues across the full span—design, material procurement, and production—
material procurement on both contractor and government side.
So our first focus right now is to stabilize the lead ship. Let’s get cost under control so we
can complete this ship as close to schedule at the lowest cost possible.
But in parallel, the Navy is working very closely with the shipbuilder to take a step back and
say, one, what are all the lessons we just learned on CVN-78? Two, CVN-78 is a very
different ship from the Nimitz [CVN-68]; we cannot expect to build the [CVN-]78 the way
we build the [CVN-]68 and—and get to an affordable ship construction plan. So we’re
pressing on the way the carrier is built—the build plan for the carrier—to arrive at a more
affordable CVN-79.
Now, in the process of doing that we’ll take a hard look at what opportunity there is across
[CVN-]79 and [CVN-]80, recognizing that we’re going to be limited, again, by [budget] top
line. But there are going to be some opportunities that jump out at us. We don’t want to have
to replan each carrier. We have a vendor base that is stretched out with the carrier build cycle
that for some components that are carrier-unique, that vendor base is—is just struggling to
hold on between the five-year gaps.
So we have to take a hard look at where does it make sense after we’ve gotten to what I’m
calling an optimal build plan for CVN-79 and then be able to come back and—and say, OK,
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here—on CVN-79 here are some opportunities that if we could, in fact, reach out to CVN-80
we can either avoid a gap in a production line or avoid unnecessary cost growth on that
follow ship.48
Later in the hearing, the following exchange occurred:
REPRESENTATIVE RICK LARSEN:
Finally, we had some discussion about this question with regard to CVNs and trying to find a
way to squeeze some costs out, and one of the ideas was to do some—do block buy of
certain components of—of—of CVN components. And have you considered that, and what’s
your thought on that on block buy on components from [CVN-]79 to [CVN-]80, or whatever,
[CVN-]79, [CVN-]79 to [CVN-]80, and so on?
ASSISTANT SECRETARY OF THE NAVY SEAN STACKLEY:
Yes, sir. At this point in time the Navy and the shipbuilder are sitting side by side putting
together a build plan for CVN-79. We’re 40 percent complete construction of the [CVN-]78;
we’ve got a lot that we’ve got to, I’ll say, do different on the [CVN-]79 and follow from the
lead ship. It’s a very different ship class [compared to the Nimitz class].
So we’re taking a hard look at the build plan [for CVN-78]. We need to get that locked
down. And associated with that is the complete bill of materials for the Ford class.
At that point in time we'll be able to take a look at...
LARSEN:
On this, call it bill of materials, what does it make sense—what makes sense in terms of
looking long term, beyond the immediate ship?
STACKLEY:
Right.
LARSEN:
Are there areas of the industrial base that are stressed to the point that it does make sense to
look at coupling the CVN-79 and CVN-80 buy?
STACKLEY:
We’re not at that point yet. I described earlier that I think after we get through this build plan
review then we'll be able to come back in ‘14 [FY2014] and identify potential critical items
that warrant a block buy approach.49
Later in the hearing, Matthew Mulherin, president of NNS and corporate vice president of HII,
stated the following when asked by Representative Robert Wittman about the possibility of a two-
ship block buy on CVN-79 and CVN-80:
48 Source: transcript of hearing.
49 Source: Transcript of hearing.
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Yes, sir. You know, historically you go back, you were exactly right, if you look at the
contracts that bought the CVN- 72 and [CVN-]73 there was huge savings that flowed to the
second ship, both in the ability to go buy materials, a block buy and get—get discounts there,
but also that you did the engineering up front the first time for both hulls so the second ship
you really just had the answer, problem, paper [sic] and some of those kind of things the—
the kind of the normal course of business to support the waterfront.
So I wouldn’t see any different. I think if we were able to do it both for material, for—for the
engineering to be able to go pump out drawings that had two-ship applicability—plus, I think
it brings the—the—the CVN—if we were to do a two-ship buy for [CVN-]79 and [CVN-]80
it would ensure CVN-80 was a copy of CVN-79, no change into the contract or very
minimal, you’re not having a—on the material side you get economic order savings, you
don’t have to deal with obsolescence.
So absolutely. I think there’s huge opportunity to go do that. You know, you talk to the—the
vendor base. They would love to see it. It gives them the ability to go look at—at what
investments they need, what work is out in front of them, and go invest in—in training and
tools to—to be able to go support that.50
At the March 19, 2012, briefing for CRS and CBO on the CVN-78 program, CRS asked the Navy
to examine the option of a block buy on CVN-79 and CVN-80, and inform CRS and CBO of the
Navy’s estimate of how much it might reduce the combined procurement cost of CVN-79 and
CVN-80. The Navy’s response, dated April 22, 2012, was sent to CRS on May 10, 2012 (i.e., just
after the House Armed Services Committee completed its markup of H.R. 4310, the FY2013
National Defense Authorization Act). The response stated:
There are several options for procuring aircraft carriers that differ from the current practice;
two ship buys and block buys. Navy experience with aircraft carrier two ship buys includes
procurement of the CVN 72 and CVN 73 (awarded in FY83), and the CVN 74 and CVN 75
(awarded in FY88). The actual cost returns for these procurements support significant
savings compared to other NIMITZ Class single ship buys. This conclusion is based on a
comparison of the NIMITZ Class two ship buys (CVN72, 73, 74 & 75) with single ship buys
(CVN71 and CVN76). The total ship man-hour comparison shows a 9% reduction. The total
ship material comparison in constant dollars shows an 8% reduction. The NIMITZ- Class
two ship buys took advantage of a single year of full funding for the combined procurement,
and less than three years between the deliveries of each ship. Having both ships fully funded
in one year enabled the Navy and shipbuilder to take advantage of two ship-set Economic
Order Quantity (EOQ) market savings for material items, and also allowed the shipbuilder to
optimize production trades management. The short time between deliveries also resulted in
design stability, minimized potential obsolescence, and greater opportunities for learning.
Given hard budget constraints in FY13 and FY14, CVN 79 and CVN 80 cannot benefit from
a multiyear construct, similar to those requested in PB13 for VIRGINIA Class Submarine
and ARLIEGH BURKE Class Destroyers. By the end of FY14, 75% of CVN 79 material
will be under contract with suppliers, leaving limited opportunities to implement material
savings with multiyear incremental funding. 75% of CVN 80 material would also be
incapable of achieving savings, as the material purchases would be placed after CVN 79.
CVN 80/81 would present the first opportunity to potentially consider this strategy.51
50 Source: Transcript of hearing.
51 Navy information paper dated April 25, 2012, sent to CRS on May 10, 2012.
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The Navy’s response states that “Having both ships fully funded in one year enabled the Navy
and shipbuilder to take advantage of two ship-set Economic Order Quantity (EOQ) market
savings for material items.” It can be noted that ships funded in separate years can also take
advantage of EOQ savings, provided that the authorizing legislation permits the use of EOQ, and
that the FY1988 block buy of CVN-74 and CVN-75 was originally proposed by the Navy as a
block buy in which CVN-74 would be procured in FY1990 and CVN-75 in FY1993.
The Navy’s response states that “given hard budget constraints in FY[20]13 and FY[20]14, CVN
79 and CVN 80 cannot benefit from a multiyear construct, similar to those requested in
PB[20]1352 for VIRGINIA Class Submarine and ARLIEGH BURKE Class Destroyers.” It can be
noted that a block buy on CVN-79 and CVN-80 would not necessarily be a multiyear
procurement (MYP) contract, like those requested for the Virginia-class submarine program and
the Arleigh Burke (DDG-51) destroyer programs. It can also be noted that Congress may decide
to work within budget constraints for FY2013 and FY2014 that might differ from those on which
DOD is basing its planning.
The Navy’s response states that “by the end of FY14, 75% of CVN 79 material will be under
contract with suppliers, leaving limited opportunities to implement material savings with
multiyear incremental funding. 75% of CVN 80 material would also be incapable of achieving
savings, as the material purchases would be placed after CVN 79.” CRS on May 10, 2012, asked
the Navy what percent of the material for CVN-79 would be under contract by the end of
FY2012. The Navy’s response, dated May 22, 2012, was sent to CRS on May 25, 2012 (i.e., the
same day that the House Appropriations Committee reported H.R. 5856, the FY2013 DOD
Appropriations Act). The response stated: “Approximately 47% of CVN 79 direct material will be
under contract by the end of FY[20]12.”53
The Navy’s response states that “CVN 80/81 would present the first opportunity to potentially
consider this [block buy] strategy.” This statement appears to refer to a strategy of a complete
block buy involving 100% of the material for both carriers. Based on the Navy’s response dated
May 22, 2012, a partial block buy on CVN-79 and CVN-80 involving as much as 53% of the
material on CVN-79 might be possible, if the block buy were authorized and implemented as part
of the FY2013 defense budget.
Legislative Activity for FY2013
FY2013 Funding Request
The Navy’s proposed FY2013 budget requests funding for the procurement of 10 new battle force
ships (i.e., ships that count against the 306 ship goal). The 10 ships include one Gerald R. Ford
(CVN-78) class aircraft carrier, two Virginia-class attack submarines, two DDG-51 class Aegis
destroyers, four Littoral Combat Ships (LCSs), and one Joint High Speed Vessel (JHSV). These
ships are all funded through the Shipbuilding and Conversion, Navy (SCN) account.
52 This is a reference to the president’s budget for FY2013—that is, the Administration’s requested budget for FY2013.
53 Navy information paper dated May 22, 2012, sent to CRS on May 25, 2012.
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FY2013 National Defense Authorization Act (H.R. 4310/P.L. 112-239)
House
The House Armed Services Committee, in its report (H.Rept. 112-479 of May 11, 2012) on the
FY2013 National Defense Authorization Act (H.R. 4310 of the 112th Congress), recommended
approving the Navy’s requests for procurement funding for all 10 new battle force ships requested
for procurement in FY2013. The committee also recommended an additional $778 million in
FY2013 advance procurement funding to support the procurement of an additional Virginia-class
attack submarine in FY2014, and an additional $115 million in FY2013 advance procurement
funding for the DDG-51 destroyer program. (Page 375)
Section 121 of H.R. 4310 as reported would prohibit the Navy from retiring or decommissioning
a nuclear-powered ballistic missile submarine (SSBN) if such retirement or decommissioning
would reduce the SSBN force to less than 12 boats. Section 122 would provide authority for
using six-year incremental funding to procure the aircraft carriers CVN-79 and CVN-80. Sections
125 and 126 would authorize new multiyear procurement (MYP) arrangements for the DDG-51
destroyer and Virginia-class attack submarine programs, respectively. Sections 128 and 129
require reports from the Navy and GAO, respectively, on the LCS program. The texts of these
provisions and report language associated with these provisions are presented in the CRS reports
on these individual programs (see “CRS Reports Tracking Legislation on Specific Navy
Shipbuilding Programs” below).
Section 130 of H.R. 4310 as reported states:
SEC. 130. SENSE OF CONGRESS ON IMPORTANCE OF ENGINEERING IN EARLY
STAGES OF SHIPBUILDING.
It is the sense of Congress that—
(1) placing a priority on engineering dollars in the early stages of shipbuilding programs is a
vital component of keeping cost down; and
(2) therefore, the Secretary of the Navy should take appropriate steps to prioritize early
engineering in large ship construction including amphibious class ships beginning with the
LHA-8.
Section 131 states:
SEC. 131. SENSE OF CONGRESS ON MARINE CORPS AMPHIBIOUS LIFT AND
PRESENCE REQUIREMENTS.
(a) In General- It is the sense of Congress that—
(1) the United States Marine Corps is a combat force which leverages maneuver from the sea
as a force multiplier allowing for a variety of operational tasks ranging from major combat
operations to humanitarian assistance;
(2) the United States Marine Corps is unique in that, while embarked upon Naval vessels,
they bring all the logistic support necessary for the full range of military operations,
operating `from the sea’ they require no third party host nation permission to conduct
military operations;
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(3) the Department of the Navy has a requirement for 38 amphibious assault ships to meet
this full range of military operations;
(4) for budgetary reasons only that requirement of 38 vessels was reduced to 33 vessels,
which adds military risk to future operations;
(5) the Department of the Navy has been unable to meet even the minimal requirement of 33
operationally available vessels and has submitted a shipbuilding and ship retirement plan to
the Congress which will reduce the force to 28 vessels; and
(6) experience has shown that early engineering and design of naval vessels has significantly
reduced the acquisition costs and life-cycle costs of those vessels.
(b) Next Generation of Amphibious Ships- In light of subsection (a), it is the sense of
Congress that—
(1) the Navy should consider prioritization of investment in and procurement of the next
generation of amphibious assault ships;
(2) the next generation amphibious assault ships should maintain survivability protection
level II in accordance with current Navy ship requirements;
(3) commonality in hull form design could be a desirable element to reduce acquisition and
life cycle cost; and
(4) maintaining a robust amphibious shipbuilding industrial base is vital for future national
security.
Section 354 states:
SEC. 354. LIMITATION ON AVAILABILITY OF FUNDS FOR RETIREMENT OR
INACTIVATION OF TICONDEROGA CLASS CRUISERS OR DOCK LANDING SHIPS.
(a) Limitation- Except as provided by subsection (b), none of the funds authorized to be
appropriated by this Act or otherwise made available for fiscal year 2013 for the Department
of Defense may be obligated or expended to retire, prepare to retire, inactivate, or place in
storage a cruiser or dock landing ship.
(b) Exception- Notwithstanding subsection (a), the U.S.S. Port Royal, CG 73, is authorized
for retirement.
(c) Maintained Levels- The Secretary of the Navy, in supporting the operational
requirements of the combatant commands, shall maintain the operational capability and
perform the necessary maintenance of each cruiser and dock landing ship belonging to the
Navy until the later of the following dates:
(1) The date of the enactment of the National Defense Authorization Act for Fiscal Year
2014.
(2) September 30, 2013.
Section 1021 states:
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SEC. 1021. POLICY RELATING TO MAJOR COMBATANT VESSELS OF THE
STRIKE FORCES OF THE UNITED STATES NAVY.
Section 1012 of the National Defense Authorization Act for Fiscal Year 2008 (P.L. 110-181;
122 Stat. 303), as most recently amended by section 1015 of the Duncan Hunter National
Defense Authorization Act for Fiscal Year 2009 (P.L. 110-417; 122 Stat. 4586), is amended
by striking `Secretary of Defense’ and all that follows through the period and inserting the
following: `Secretary the Navy notifies the congressional defense committees that, as a result
of a cost-benefit analysis, it would not be practical for the Navy to design the class of ships
with an integrated nuclear power system.’.54
Section 1022 states:
SEC. 1022. LIMITATION ON AVAILABILITY OF FUNDS FOR DELAYED ANNUAL
NAVAL VESSEL CONSTRUCTION PLAN.
(a) In General- Section 231 of title 10, United States Code, is amended—
(1) by redesignating subsection (e) as subsection (f); and
(2) by inserting after subsection (d) the following new subsection (e):
`(e)(1) If the Secretary of Defense does not include with the defense budget materials for a
fiscal year the plan and certification under subsection (a), the Secretary of the Navy may not
use more than 50 percent of the funds described in paragraph (2) during the fiscal year in
which such materials are submitted until the date on which such plan and certification are
submitted to the congressional defense committees.
`(2) The funds described in this paragraph are funds made available to the Secretary of the
Navy for operation and maintenance, Navy, for emergencies and extraordinary expenses.’.
(b) Conforming Amendment- Section 12304b(i) of title 10, United States Code, is amended
by striking `231(e)(2)’ and inserting `section 231(f)(2)’.
H.Rept. 112-479 states:
The committee acknowledges that hard choices will have to be made to prioritize capabilities
that allow our military to remain flexible, responsive, and decisive in any engagement.
However, the committee recommends changes to the President’s proposed force structure, in
order to preserve depth and capacity within the force. For example, the committee is
concerned with the Navy’s overall size of the fleet and sustained demand for naval forces,
particularly in light of the strategic pivot to the Asia-Pacific. In fiscal year 2013, the budget
request proposed to retire four additional Ticonderoga-class guided missile cruisers well
before the end of their expected service life. The committee has reinstated the requisite
funding to operate and maintain, modernize and upgrade the U.S.S. Cowpens (CG 63),
U.S.S. Anzio (CG 68), and the U.S.S. Vicksburg (CG 69) in fiscal year 2013 and expects the
Navy to properly maintain these critical assets in the fleet in the future. The committee notes
that it is less costly to maintain existing assets and supports providing the correct naval
capabilities and fleet mix through a balance of new procurement and adequately maintaining
the existing force structure for the length of time for which assets were initially programmed.
54 For additional background information on the issue addressed by this provision, see CRS Report RL33946, Navy
Nuclear-Powered Surface Ships: Background, Issues, and Options for Congress, by Ronald O'Rourke.
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In keeping with these concerns, the committee also authorizes a multi-year procurement for
up to 10 Virginia-class submarines and a multi-year procurement for up to 10 DDG–51
Arleigh Burke class destroyers. (Page 5)
The report also states:
Navy Shipbuilding Program
The committee is concerned with the Navy’s shipbuilding program. The budget request for
fiscal year 2013 Shipbuilding and Conversion (SCN) account contained $13.7 billion, which
is significantly lower than the $14.9 billion level appropriated for fiscal year 2012. In fiscal
year 2012, it was forecast that the Future Years Defense Program (FYDP) would include the
start of construction of 57 ships. However, 16 of those ships have fallen out of the FYDP,
reducing new construction starts to 41 ships. The Navy has indicated that they will no longer
seek to build a 313 ship fleet. Additionally, the Navy has proposed retiring nine additional
ships during the FYDP before the end of their service lives. The committee believes the
following programs are crucial.
CVN–78 is the lead ship of the Ford class aircraft carrier. It incorporates improved
performance and cost saving technologies, decreases the crew size by 1,200 personnel, and
saves the Navy over $5.0 billion in total ownership costs for each ship. The Navy intends to
start construction of the first three ships of the Ford class on a 5-year basis. The committee
encourages the Navy to maintain this schedule with fiscal year 2013 as the first year of
incremental funding for CVN–79. Elsewhere in this Act, the committee includes a provision
that would authorize an extension from the current 5-year period to 6 years for the
incremental funding of CVN–79 and CVN–80. The committee also believes it is essential to
keep the Nimitz class aircraft carriers on schedule for their mid-life Refueling and Complex
Overhauls to ensure these ships reach their planned service life.
The Virginia class submarine program continues to deliver on cost and well ahead of
contractual schedule. Having achieved a rate of two submarines a year starting in fiscal year
2011, the committee was concerned to see the rate decrease to one submarine in fiscal year
2014, and believes this would inject instability into a stable program. The committee
recommends an increase in fiscal year 2013 advance procurement funds to facilitate restoring
the second submarine in fiscal year 2014. To achieve that end, elsewhere in this Act, the
committee includes a provision that would authorize the Secretary of the Navy to enter a
multiyear procurement for up to 10 submarines and authorizes the Secretary to incrementally
fund that multi-year contract.
The Marine Corps has a stated requirement of 38 amphibious ships but has made an
agreement with the Navy that 33 amphibious ships would be sufficient to provide the lift and
forcible entry capabilities they require. There are currently only 29 amphibious ships in the
fleet. Two large deck amphibious ships are under contract, LHA–6 and LHA–7. The fiscal
year 2013 budget request slid the construction start of the next large deck amphibious ship,
LHA–8, from 2016 to 2017. Prior to LHA–6, these ships had well decks, which would flood
to launch landing craft. LHA–6 and LHA–7 are designed without well decks, but a well deck
is going into LHA–8. The committee is concerned that the internal arrangements to
accommodate a well deck are going to change construction significantly, requiring many
drawing changes. The committee encourages the Navy to get an early start on LHA–8 design
with the contractor. It has been proven that the greater the percentage of a design that is
complete at the start of construction, the more successful the construction program. The
LPD–27 is the last LPD–17 San Antonio class small deck amphibious ship until the
replacement for the LSD starts. In the fiscal year 2013 plan, LSD construction has been
delayed until after the FYDP. The committee is concerned that this delay may negatively
affect the industrial base.
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In the fiscal year 2013 budget request, the Department of the Navy has requested authority to
begin a multi-year program for nine DDG–51 Arleigh Burke-class destroyers. Elsewhere in
this Act, the committee includes a provision that would authorize the Secretary of the Navy
to award a contract for a multiyear procurement of up to 10 destroyers. In fiscal year 2016,
the Navy intends to start procuring Block III DDG–51 destroyers. This block will
incorporate the advanced Air and Missile Defense Radar (AMDR), which is currently being
competitively evaluated. The committee views AMDR as essential to pacing the air and
missile threat. The Navy has stated that the DDG–51 hull is sufficient to accommodate the
increased power generation and cooling requirements that AMDR will need, yet the
committee still views this as an area of risk.
With the first two Littoral Combat ships (LCS) delivered to the fleet, each of a different
design, each has had various problems that are being addressed by the Navy. LCS–1 has had
some cracking and shaft seal problems and LCS–2 has had problems with galvanic corrosion
within the water jets. The committee is aware that the Navy intends to forward stage up to
four LCS to Singapore, and while supporting the budget request for four LCS in fiscal year
2013, it encourages the Navy to ensure the problems discovered to date have technical
solutions and that these solutions are incorporated on forthcoming ships.
Perhaps the most troubling aspect of the Navy shipbuilding plan is how it will be able to
afford the Ohio class replacement ballistic missile submarine and still have a viable program
for other ships. This will have to be addressed in coming years. The budget request delayed
the start of construction of the first submarine by 2 years until fiscal year 2021. This delay
means that the ballistic missile submarine force dips to 10 submarines for almost 10 years in
a couple of decades. To maintain a credible undersea nuclear deterrent, the committee
recommends restoring the research and development funding that was reduced in the fiscal
year 2013 budget request to allow the Department of Defense time to determine how to keep
the program on track. Elsewhere in this Act, the committee includes a provision that would
prevent the Secretary of the Navy from having fewer than 12 ballistic missile submarines at a
time. (Pages 34-36)
Senate (As Reported)
The Senate Armed Services Committee, in its report (S.Rept. 112-173 of June 4, 2012) on the
FY2013 National Defense Authorization Act (S. 3254 of the 112th Congress), recommended
approving the Navy’s requests for procurement funding for all 10 new battle force ships requested
for procurement in FY2013. The committee also recommended an additional $777.7 million in
FY2013 advance procurement funding to support the procurement of an additional Virginia-class
attack submarine in FY2014. (Page 325)
Section 122 of S. 3254 as reported would provide authority for using six-year incremental
funding to procure the aircraft carriers CVN-79 and CVN-80. Section 123 would limit the
obligation and expenditure of FY2013 procurement funding for the aircraft carrier CVN-79 until
the Navy submits a report describing program management and cost control measures that will be
employed in constructing the ship. Sections 124 and 125 would authorize new multiyear
procurement (MYP) arrangements for the Virginia-class attack submarine and DDG-51 destroyer
programs, respectively. Section 127 would designate the effort to develop and produce LCS
mission modules as a Major Defense Acquisition Program (MDAP). The texts of these provisions
and report language associated with these provisions are presented in the CRS reports on these
individual programs (see “CRS Reports Tracking Legislation on Specific Navy Shipbuilding
Programs” below).
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Section 130 of S. 3254 as reported states:
SEC. 130. SENSE OF CONGRESS ON MARINE CORPS AMPHIBIOUS LIFT AND
PRESENCE REQUIREMENTS.
(a) Findings- Congress makes the following findings:
(1) The United States Marine Corps is a combat force which leverages maneuver from the
sea as a force multiplier allowing for a variety of operational tasks ranging from major
combat operations to humanitarian assistance.
(2) The United States Marine Corps is unique in that, while embarked upon Naval vessels,
they bring all the logistic support necessary for the full range of military operations,
operating `from the sea’ they require no third party host nation permission to conduct
military operations.
(3) The Department of the Navy has a requirement for 38 amphibious assault ships to meet
this full range of military operations.
(4) Due to fiscal constraints only, that requirement of 38 vessels was reduced to 33 vessels,
which adds military risk to future operations.
(5) The Department of the Navy has been unable to meet even the minimal requirement of 30
operationally available vessels and has submitted a shipbuilding and ship retirement plan to
Congress which will reduce the force to 28 vessels.
(6) Experience has shown that early engineering and design of naval vessels has significantly
reduced the acquisition costs and life-cycle costs of those vessels.
(b) Sense of Congress- It is the sense of Congress that—
(1) the Department of Defense should carefully evaluate the maritime force structure
necessary to execute demand for forces by the commanders of the combatant commands;
(2) the Department of the Navy carefully evaluate amphibious lift capabilities to meet current
and projected requirements;
(3) the Department of the Navy should consider prioritization of investment in and
procurement of the next generation of amphibious assault ships, as a component of the
balanced battle force;
(4) the next generation amphibious assault ships should maintain survivability protection;
(5) operation and maintenance requirements analysis, as well as the potential to leverage a
common hull form design, should be considered to reduce total ownership cost and
acquisition cost; and
(6) maintaining a robust amphibious ship building industrial base is vital for the future of the
national security of the United States.
Section 1021 states:
SEC. 1021. RETIREMENT OF NAVAL VESSELS.
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(a) Report Required- Not later than 30 days after the date of the enactment of this Act, the
Chief of Naval Operations shall submit to the congressional defense committees a report that
sets forth a comprehensive description of the current requirements of the Navy for combatant
vessels of the Navy, including submarines.
(b) Additional Report Element if Less Than 313 Vessels Required- If the number of
combatant vessels for the Navy (including submarines) specified as being required in the
report under subsection (a) is less than 313 combatant vessels, the report shall include a
justification for the number of vessels specified as being so required and the rationale by
which the number of vessels is considered consistent with applicable strategic guidance
issued by the President and the Secretary of Defense in 2012.
Section 1022 states:
SEC. 1022. TERMINATION OF A MARITIME PREPOSITIONING SHIP SQUADRON.
(a) Report Required-
(1) IN GENERAL- Not later than 60 days after the date of the enactment of this Act, the
Chief of Naval Operations and the Commandant of the Marine Corps shall jointly submit to
the congressional defense committees a report setting forth an assessment of the Marine
Corps Prepositioning Program-Norway and the capability of that program to address any
readiness gaps that will be created by the termination of Maritime Prepositioning Ship
Squadron One in the Mediterranean.
(2) ELEMENTS- The report required by paragraph (1) shall include the following:
(A) A detailed description of the time required to transfer stockpiles onto Navy vessels for
use in contingency operations.
(B) A comparison of the response time of the Marine Corps Prepositioning Program-Norway
with the current response time of Maritime Prepositioning Ship Squadron One.
(C) A description of the equipment stored in the stockpiles of the Marine Corps
Prepositioning Program-Norway, and an assessment of the differences, if any, between that
equipment and the equipment of a Maritime Prepositioning Ship squadron.
(D) A description and assessment of the current age and state of maintenance of the
equipment of the Marine Corps Maritime Prepositioning Program-Norway.
(E) A plan to address the equipment shortages and modernization needs of the Marine Corps
Maritime Prepositioning Program-Norway.
(b) Limitation on Availability of Funds- Amounts authorized to be appropriated by this Act
may not be obligated or expended to terminate a Maritime Prepositioning Ship squadron
until the date of the submittal to the congressional defense committees of the report required
by subsection (a).
Section 1023 states:
SEC. 1023. SENSE OF CONGRESS ON RECAPITALIZATION FOR THE NAVY AND
COAST GUARD.
(a) Findings- Congress makes the following findings:
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(1) More than 70 percent of the world’s surface is comprised of navigable oceans.
(2) More than 80 percent of the population of the world lives within 100 miles of an ocean.
(3) More than 90 percent of the world’s commerce traverses an oceans.
(4) The national security of the United States is inextricably linked to the maintenance of
global freedom of access for both the strategic and commercial interests of the United States.
(5) To maintain that freedom of access the sea services of the United States, composed of the
Navy, the Marine Corps, and the Coast Guard, must be sufficiently positioned as rotationally
globally deployable forces with the capability to decisively defend United States citizens,
homeland, and interests abroad from direct or asymmetric attack and must be comprised of
sufficient vessels to maintain global freedom of action.
(6) To achieve appropriate capabilities to ensure national security the Government of the
United States must continue to recapitalize the fleets of the Navy and Coast Guard and must
continue to conduct vital maintenance and repair of existing vessels to ensure such vessels
meet service life goals.
(b) Sense of Congress- It is the sense of Congress that—
(1) the sea services of the United States should be funded and maintained to provide the
broad spectrum of capabilities required to protect the national security of the United States;
(2) such capabilities should include—
(A) the ability to project United States power rapidly anywhere on the globe without the
need for host nation basing permission or long and potentially vulnerable logistics supply
lines;
(B) the ability to land and recover maritime forces from the sea for direct combat action, to
evacuate United States citizens from hostile situations, and to provide humanitarian
assistance where needed;
(C) the ability to operate from the subsurface with overpowering conventional combat
power, as well as strategic deterrence; and
(D) the ability to operate in collaboration with United States maritime partners in the
common interest of preventing piracy at sea and maintaining the commercial sea lanes
available for global commerce;
(3) the Secretary of Defense, in coordination with the Secretary of the Navy, should maintain
the recapitalization plans for the Navy as a priority in all future force structure decisions; and
(4) the Secretary of Homeland Security should maintain the recapitalization plans for the
Coast Guard as a priority in all future force structure decisions.
Regarding Section 1021, S.Rept. 112-173 states:
Retirement of naval vessels (sec. 1021)
The committee recommends a provision that would require the Chief of Naval Operations to
produce a report that would set forth a comprehensive description of the current requirements
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of the Navy for combatant vessels of the Navy, including submarines. The provision would
also require that, if the number of these vessels is less than 313 ships, the report would have
to include the justification of the Chief of Naval Operations for that smaller number, and an
explanation of how that smaller number is consistent with the recently revised strategic
guidance issued by the President and the Secretary of Defense in 2012.
Section 1021 of the National Defense Authorization Act for Fiscal Year 2010 (Public Law
111–84) conveyed the sense of Congress that “the Navy should meet its requirement for a
313-ship fleet until such time that modifications to the Navy’s ship fleet force structure are
warranted, and the Secretary of the Navy provides Congress with a justification of any
proposed modifications, supported by rigorous and sufficient warfighting analysis.” The
Chiefs of Naval Operations since 2006 have consistently stated that they need a fleet of 313
ships to do their jobs. Nevertheless, the Navy has not achieved this number of ships in the
fleet since falling below that level in the 1990s.
In testimony before the congressional defense committees and other public remarks, senior
Navy leaders, including the Secretary of the Navy, the Under Secretary of the Navy, and the
Chief of Naval Operations, have noted that the Navy is conducting a new review of Navy
force structure review. Navy officials say that they have not completed the review, but that it
will probably reduce the goal for fleet size to approximately 300 ships.
The committee is concerned that the Navy or the Department of Defense (DOD) may
propose reductions in the Navy’s ship fleet force structure without sufficient justification.
The committee reminds the Navy and DOD that the statement of the sense of Congress
remains in effect, and that the committee expects that any proposed change in goal for the
size of the Navy’s fleet will be accompanied by rigorous and sufficient analysis that is
convincing.
The committee doubts that neither a strategy shifting DOD’s focus to the Pacific and Asia,
nor the demands of current operational requirements, nor increased investment by potential
adversaries in naval forces and anti-access and area-denial capabilities warrant a reduction in
the required Navy fleet size. (Pages 187-188)
Senate (Floor Action)
On December 4, 2012, as part of its consideration of S. 3254 of the 112th Congress, the Senate
agreed by unanimous consent to S.Amdt. 3175, as modified, the text of which is as follows:
At the end of subtitle E of title III, add the following:
SEC. 344. SENSE OF THE CONGRESS ON NAVY FLEET REQUIREMENTS.
It is the sense of Congress that—
(1) the Secretary of the Navy, in supporting the operational requirements of the combatant
commands, should maintain the operational capability of and perform the necessary
maintenance in each cruiser and dock landing ship belonging to the Navy;
(2) for retirements of ships owned by the navy prior to their projected end of service life, the
Chief of Naval Operations must explain to the Congressional defense committees how the
retention of each ship would degrade the overall readiness of the fleet and endanger United
States National Security and the objectives of the combatant commanders; and
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(3) revitalizing the Navy’s 30-year shipbuilding plan should be a national priority, and a
commensurate amount of increased funding should be provided to the Navy in the Future
Years Defense Program to help close the gap between requirements and the current size of
the fleet.
Conference
The conference report (H.Rept. 112-705of December 18, 2012) on the FY2013 National Defense
Authorization Act (H.R. 4310/P.L. 112-239 of January 2, 2013) recommends approving almost all
of the Navy’s requests for procurement funding for the 10 new battle force ships that the Navy
requested for procurement in FY2013. The exception is the request for procurement funding for
the CVN-78 aircraft carrier program, where the report recommends a reduction of $2.9 million
for “SEWIP [surface electronic warfare improvement program] block 2 cost growth.” The report
also recommends an additional $777.7 million in FY2013 advance procurement funding to
support the procurement of an additional Virginia-class attack submarine in FY2014. (See pdf
page 473 of 629 of the Joint Explanatory Statement for H.R. 4310.)
Section 121 of the conference report provides authority for using six-year incremental funding to
procure the aircraft carriers CVN-79 and CVN-80. Sections 122 and 123 authorize new
multiyear procurement (MYP) arrangements for the Virginia-class attack submarine and DDG-51
destroyer programs, respectively. Section 124 limits the obligation and expenditure of FY2013
procurement funding for the aircraft carrier CVN-79 until the Navy submits a report describing
program management and cost control measures that will be employed in constructing the ship.
Section 126 designates the effort to develop and produce LCS mission modules as a Major
Defense Acquisition Program (MDAP). Section 127 requires a report on the two LCS designs.
Section 128 requires a GAO review of a review of the compliance of the Secretary of the Navy
with subpart 246.5 of title 48 of the Code of Federal Regulations and subpart 46.5 of the Federal
Acquisition Regulation in accepting the first two LCSs. Section 130 expresses the sense of the
Congress regarding the Navy’s ballistic missile submarine force and the Ohio replacement
(SSBN[X]) ballistic missile submarine program. Section 241 requires a report on LCS mission
packages. The texts of these provisions and report language associated with these provisions are
presented in the CRS reports on these individual programs (see “CRS Reports Tracking
Legislation on Specific Navy Shipbuilding Programs” below).
Section 131 states:
SEC. 131. SENSE OF CONGRESS ON MARINE CORPS AMPHIBIOUS LIFT AND
PRESENCE REQUIREMENTS.
(a) FINDINGS.—Congress finds the following:
(1) The Marine Corps is a combat force that leverages maneuver from the sea as a force
multiplier allowing for a variety of operational tasks ranging from major combat operations
to humanitarian assistance.
(2) The Marine Corps is unique in that, while embarked upon naval vessels, they bring all the
logistic support necessary for the full range of military operations and, operating ‘‘from the
sea’’, they require no third-party host nation permission to conduct military operations.
(3) The Navy has a requirement for 38 amphibious assault ships to meet this full range of
military operations.
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(4) Due only to fiscal constraints, that requirement of 38 vessels was reduced to 33 vessels,
which adds military risk to future operations.
(5) The Navy has been unable to meet even the minimal requirement of 30 operationally
available vessels and has submitted a shipbuilding and ship retirement plan to Congress that
will reduce the force to 28 vessels.
(6) Experience has shown that early engineering and design of naval vessels has significantly
reduced the acquisition costs and life-cycle costs of those vessels.
(b) SENSE OF CONGRESS.—It is the sense of Congress that—
(1) the Department of Defense should carefully evaluate the maritime force structure
necessary to execute demand for forces by the commanders of the combatant commands;
(2) the Navy should carefully evaluate amphibious lift capabilities to meet current and
projected requirements;
(3) the Navy should consider prioritization of investment in and procurement of the next
generation of amphibious assault ships as a component of the balanced battle force;
(4) the next generation amphibious assault ships should maintain survivability protection;
(5) operation and maintenance requirements analysis, as well as the potential to leverage a
common hull form design, should be considered to reduce total ownership cost and
acquisition cost; and
(6) maintaining a robust amphibious ship building industrial base is vital for the future of the
national security of the United States.
Section 354 states:
SEC. 354. LIMITATION ON AVAILABILITY OF FUNDS FOR RETIREMENT OR
INACTIVATION OF TICONDEROGA CLASS CRUISERS OR DOCK LANDING SHIPS.
None of the funds authorized to be appropriated by this Act or otherwise made available for
fiscal year 2013 for the Department of Defense may be obligated or expended to retire,
prepare to retire, inactivate, or place in storage a cruiser or dock landing ship.
Regarding Section 354, the Joint Explanatory Statement for H.R. 4310 states:
The House bill contained a provision (sec. 354) that would limit the obligation and
expenditure of funds authorized to be appropriated or otherwise made available for fiscal
year 2013 for the retirement, inactivation, or storage of a cruiser or dock landing ship. The
provision would provide an exception for the retirement of the U.S.S. Port Royal (CG-73).
Finally, the provision would require the Secretary of the Navy to maintain the operational
capability and perform the necessary maintenance of the cruisers and dock landing ships in
support of operational requirements of the combatant commands.
The Senate amendment contained a provision (sec. 344) that would express the sense of the
Congress on Navy fleet requirements, including the fact that the Secretary of the Navy
should maintain the operational capability and perform the necessary maintenance and for
each cruiser and dock landing ship belonging to the Navy.
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The Senate recedes with an amendment that would eliminate the exception for the retirement
of the U.S.S. Port Royal. The U.S.S. Port Royal incurred significant damage following a
grounding incident in 2009. Although the Navy indicates that the ship never completely
recovered from the grounding, the Navy has not provided adequate analysis and cost data on
the structural condition of the ship.
Therefore, the conferees direct the Secretary of the Navy to conduct a detailed material
condition assessment of the U.S.S. Port Royal that will:
(1) include a comprehensive inspection of the ship’s major structural, machinery, electrical,
combat and weapons systems elements;
(2) identify the necessary repairs and modernization, including detailed costs to make those
repairs and upgrades, that would be required for the ship to meet its expected service life,
consistent with other ships in the Ticonderoga-class;
(3) be conducted by the Navy, with the results evaluated by the appropriate Navy technical
authority; and
(4) be reviewed by an independent board of subject matter experts, from industry and the
Department of Defense.
The conferees further direct the Secretary to submit the results of that assessment, along with
results of independent reviews of that assessment, to the congressional defense committees
within 180 days of enactment of this Act. The conferees further direct that the Government
Accountability Office conduct a sufficiency review of this report. The Secretary shall also
provide the congressional defense committees a status update on the assessments within 120
days of enactment of this Act. (Pages 42-43)
Section 1014 states:
SEC. 1014. LIMITATION ON AVAILABILITY OF FUNDS FOR DELAYED ANNUAL
NAVAL VESSEL CONSTRUCTION PLAN.
(a) IN GENERAL.—Section 231 of title 10, United States Code, is amended—
(1) by redesignating subsection (e) as subsection (f); and
(2) by inserting after subsection (d) the following new subsection (e):
‘‘(e) LIMITATION ON AVAILABILITY OF FUNDS FOR FISCAL YEARS WITHOUT
PLAN AND CERTIFICATION.—
(1) If the Secretary of Defense does not include with the defense budget materials for a fiscal
year the plan and certification under subsection (a), the Secretary of the Navy may not use
more than 50 percent of the funds described in paragraph (2) during the fiscal year in which
such materials are submitted until the date on which such plan and certification are submitted
to the congressional defense committees.
‘‘(2) The funds described in this paragraph are funds made available to the Secretary of the
Navy for operation and maintenance, Navy, for emergencies and extraordinary expenses.’’.
(b) CONFORMING AMENDMENT.—Section 12304b(i) of title 10, United States Code, is
amended by striking ‘‘section 231(g)(2)’’ and inserting ‘‘section 231(f)(2)’’.
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Section 1015 states:
SEC. 1015. RETIREMENT OF NAVAL VESSELS.
(a) REPORT REQUIRED.—Not later than 30 days after the date of the enactment of this
Act, the Chief of Naval Operations shall submit to the congressional defense committees a
report that sets forth a comprehensive description of the current requirements of the Navy for
combatant vessels of the Navy, including submarines.
(b) ADDITIONAL REPORT ELEMENT IF LESS THAN 313 VESSELS REQUIRED.—If
the number of combatant vessels for the Navy (including submarines) specified as being
required in the report under subsection (a) is less than 313 combatant vessels, the report shall
include a justification for the number of vessels specified as being so required and the
rationale by which the number of vessels is considered consistent with applicable strategic
guidance issued by the President and the Secretary of Defense in 2012.
Section 1016 states:
SEC. 1016. TERMINATION OF A MARITIME PREPOSITIONING SHIP SQUADRON.
(a) REPORT REQUIRED.—
(1) IN GENERAL.—Not later than 60 days after the date of the enactment of this Act, the
Chief of Naval Operations and the Commandant of the Marine Corps shall jointly submit to
the congressional defense committees a report setting forth an assessment of the Marine
Corps Prepositioning Program– Norway and the capability of that program to address any
readiness gaps that will be created by the termination of Maritime Prepositioning Ship
Squadron One in the Mediterranean.
(2) ELEMENTS.—The report required by paragraph (1) shall include the following:
(A) A detailed description of the time required to transfer stockpiles onto naval vessels for
use in contingency operations.
(B) A comparison of the response time of the Marine Corps Prepositioning Program–Norway
with the response time of Maritime Prepositioning Ship Squadron One.
(C) A description of the equipment stored in the stockpiles of the Marine Corps
Prepositioning Program–Norway, the differences (if any) between that equipment and the
equipment of a Maritime Prepositioning Ship squadron, and any increased risk or operational
plan impacts associated with using Prepositioning Program–Norway to fulfill the Maritime
Prepositioning Ship squadron requirements.
(D) A description and assessment of the current age and state of maintenance of the
equipment of the Marine Corps Maritime Prepositioning Program-Norway.
(E) A plan to address future requirements, equipment shortages, and modernization needs of
the Marine Corps Maritime Prepositioning Program-Norway.
(b) LIMITATION ON AVAILABILITY OF FUNDS.—
Amounts authorized to be appropriated by this Act may not be obligated or expended to
terminate a Maritime Prepositioning Ship squadron until the date of the submittal to the
congressional defense committees of the report required by subsection (a).
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Section 1017 states:
SEC. 1017. SENSE OF CONGRESS ON RECAPITALIZATION FOR THE NAVY AND
COAST GUARD.
(a) FINDINGS.—Congress makes the following findings:
(1) More than 70 percent of the world’s surface is comprised of navigable oceans.
(2) More than 80 percent of the population of the world lives within 100 miles of an ocean.
(3) More than 90 percent of the world’s commerce traverses an ocean.
(4) The national security of the United States is inextricably linked to the maintenance of
global freedom of access for both the strategic and commercial interests of the United States.
(5) To maintain that freedom of access the sea services of the United States, composed of the
Navy, the Marine Corps, and the Coast Guard, must be sufficiently positioned as rotationally
globally deployable forces with the capability to decisively defend United States citizens,
homeland, and interests abroad from direct or asymmetric attack and must be comprised of
sufficient vessels to maintain global freedom of action.
(6) To achieve appropriate capabilities to ensure national security, the Government of the
United States must continue to recapitalize the fleets of the Navy and Coast Guard and must
continue to conduct vital maintenance and repair of existing vessels to ensure such vessels
meet service life goals.
(b) SENSE OF CONGRESS.—It is the sense of Congress that—
(1) the sea services of the United States should be funded and maintained to provide the
broad spectrum of capabilities required to protect the national security of the United States;
(2) such capabilities should include—
(A) the ability to project United States power rapidly anywhere on the globe without the
need for host nation basing permission or long and potentially vulnerable logistics supply
lines;
(B) the ability to land and recover maritime forces from the sea for direct combat action, to
evacuate United States citizens from hostile situations, and to provide humanitarian
assistance where needed;
(C) the ability to operate from the subsurface with overpowering conventional combat
power, as well as strategic deterrence; and
(D) the ability to operate in collaboration with United States maritime partners in the
common interest of preventing piracy at sea and maintaining the commercial sea lanes
available for global commerce;
(3) the Secretary of Defense, in coordination with the Secretary of the Navy, should maintain
the recapitalization plans for the Navy as a priority in all future force structure decisions; and
(4) the Secretary of Homeland Security should maintain the recapitalization plans for the
Coast Guard as a priority in all future force structure decisions.
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FY2013 DOD Appropriations Act (H.R. 5856 of 112th Congress)
House
The House Appropriations Committee, in its report (H.Rept. 112-493 of May 25, 2012) on the
FY2013 DOD Appropriations Act (H.R. 5856 of the 112th Congress), recommended approving,
with some adjustments, the Navy’s requests for procurement funding for all 10 new battle force
ships requested for procurement in FY2013. The committee recommended reducing by $29.9
million the funding request for the aircraft carrier CVN-79, and reducing by $12.03 million the
funding request for the two DDG-51 destroyers requested for procurement in FY2013. The
committee also recommended an additional $723 million in FY2013 advance procurement
funding to preserve the option of procuring an additional Virginia-class attack submarine in
FY2014, and an additional $1 billion in FY2013 procurement funding to facilitate the
procurement of an additional DDG-51 in FY2013.55 (Pages 156 and 157)
Section 8010 of the bill as reported would permit multiyear procurement (MYP) arrangements
for, among other things, DDG-51 Arleigh Burke class destroyer and associated systems and SSN-
774 Virginia class submarine and government-furnished equipment.
The committee also recommended funding for keeping in service three of the four Aegis cruisers
that the Navy proposed for early retirement in FY2013; the funding is in the Military Personnel,
Navy (MPN) account (page 27, lines BA-1, BA-2, and BA-4), the Operation and Maintenance,
Navy (OMN) account (page 71, lines 1A1A, 1B1B, 1B4B, and 1B5B; see also line 2B2G), and
Other Procurement, Navy (OPN) account (page 167, line 16).
H.Rept. 112-493 states:
SHIPBUILDING
The Navy’s shipbuilding program is the centerpiece of the Navy’s budget request. The
Nation’s fleet creates our forward presence, projects power, and maintains open sea lanes.
The Committee is well aware that the sight of a U.S. Navy ship on the horizon makes a
powerful strategic statement in any theater. The Committee strongly supports all actions to
maintain the standing of the United States Navy as the world’s preeminent sea power and a
global good neighbor when humanitarian relief is required. The Committee is therefore
puzzled by the Navy’s priorities in its shipbuilding plan.
As part of its new strategy, the Department of Defense has rebalanced toward the Asia-
Pacific and Middle East regions of the world. Despite these regions having a significantly
larger area of the world’s oceans, the Navy plans to accelerate the decommissioning of seven
guided missile cruisers, has reduced the shipbuilding budget by nearly eleven percent relative
to the fiscal year 2012 appropriated level, and is reducing the total number of ships required
to fulfill its requirements under this new strategy. The required fleet size has been reduced
from 313 ships to approximately 300 ships in the long term, but the Navy will maintain 285
ships in the near term. The Navy has also deferred the procurement of an attack submarine
and a guided missile destroyer, the backbone of the Navy’s combatant fleet, from fiscal year
55 A table on page 156 of the committee’s report shows a transfer of $189.2 million from the LPD-17 amphibious ship
program to the JHSV program (identified in the table as “intratheater conector”), but this appears to be a typo, as the
Navy’s FY2013 budget requests the $189.2 million for the JHSV program.
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2014 to future years and, in their place has inserted a vessel known as the Afloat Forward
Staging Base. This vessel would fill a very long standing (but never fulfilled) mission need.
The Committee applauds the Navy for finally fulfilling such a long standing need but is
confused by the timing of this action in an era of decreasing budgets and also by the fact that
a submarine and destroyer are not being procured in fiscal year 2014 in part to make funding
available for this new vessel.
The decision to defer the procurement of a submarine and a destroyer is both confusing and
concerning, especially the submarine. Since its inception in 1998, the Virginia Class
Submarine program always intended to build two submarines per year. Although the second
submarine repeatedly appeared in outyear budget projections, it was continually deferred by
the Navy. The program finally reached a rate of two submarines per year in fiscal year 2011,
largely due to the efforts of this Committee. Now, after only three years at this rate (2011
through 2013), the Navy is again reducing the production rate. The Committee believes this
decision will increase the cost of the submarines, result in production inefficiencies, and
exacerbate the Navy’s own predicted attack submarine shortfall. Additionally, with the
impending addition of the SSBN replacement submarine to the shipbuilding budget, an event
which will “suck the air out of the Navy’s shipbuilding budget” according to a former
Secretary of Defense, funding in the outyears will not be any easier to come by.
The Committee believes the Navy recognizes the need to fund another destroyer and
submarine in fiscal year 2014 since the Navy has approached the Committee with various
plans and schemes to attempt to restore these ships to fiscal year 2014. One of these plans
revolves around the incremental funding concept despite the fact that the Department’s own
financial management regulations and policies prohibit incremental funding of large end
items such as ships, except under certain circumstances, none of which apply in this case.
The Committee strongly supports these regulations and policies because fully funded end
items do not commit future Congresses to obligations they may or may not agree with and
also because they provide the ability to conduct much more complete, transparent, and
rigorous program oversight. Incremental funding is certainly comparable to buying items on
credit by deferring payments to the outyears.
The Committee understands the constraints of the fiscal year 2014 budget, but to give up two
highly prized combatants, and fund instead a vessel for a mission that can be (and has been)
satisfied with existing ships, then attempt to restore those combatants through funding
gimmicks in violation of the Department’s own financial regulations is deeply troubling. The
Committee firmly believes that a strong Navy shipbuilding program is absolutely essential
for the Nation’s security but will not mortgage the Nation’s future to accomplish it.
Accordingly, the recommendation provides an additional $1,000,000,000 above the request
for the procurement of an additional DDG–51 guided missile destroyer. The Secretary of the
Navy is directed to use this funding as part of the DDG–51 multiyear procurement planned
for fiscal years 2013 through 2017 in order to achieve a lower cost and provide a more stable
production base for the duration of the DDG–51 multiyear procurement. Finally, the
recommendation provides an additional $723,000,000 above the request for advance
procurement for the Virginia Class Submarine program. The Secretary of the Navy is
directed to fully fund an additional submarine in fiscal year 2014 to achieve a lower cost and
stable production base through the course of the program’s planned multiyear procurement.
(Pages 158-159)
The report also states:
AFLOAT FORWARD STAGING BASE
The request includes $38,000,000 for the advance procurement of items for the Afloat
Forward Staging Base (AFSB). The AFSB is envisioned by the Navy to act as a mobile at-
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sea platform that will provide flexible mission support and sustainment. This platform will
fulfill a very longstanding (at least 20 years) but never fulfilled mission need for sea-based
support for a variety of missions. In the past, this mission need has been filled by a variety of
ad-hoc methods to include the use of available surface combatants or amphibious ships. The
closest dedicated platform to fulfilling a similar mission need was the conversion of the
Navy’s amphibious assault ship, USS Inchon, to a mine countermeasure command and
support ship in 1995. This was done at a time when the Navy was shifting the fleet from an
organic mine warfare capability embedded on surface combatants to a more dedicated mine
warfare capability of mine hunting ships and aircraft. Similarly, the Navy plans to fill this
mission need in the very near term with the conversion of the USS Ponce in fiscal year 2012.
Further, the Committee notes that the AFSB is planned for construction in the National
Defense Sealift Fund, whose purpose in ship construction is for strategic sealift acquisition.
The Committee is struggling with placing the mission of the AFSB into a strategic sealift
area and directs the Secretary of the Navy to accomplish any AFSB tasks in the traditional
Navy appropriation accounts.
The Committee applauds the Navy for finally attempting to satisfy such a longstanding need,
but it is confused as to the timing of satisfying this need in an era of decreasing budgets and
when two combatants were pulled out of the fiscal year 2014 shipbuilding program. The
Committee believes this mission need can continue to be satisfied as it has been satisfied to
date. The Committee directs the Navy to apply the fiscal year 2014 funding currently
projected for the construction of an AFSB toward fully funding an additional submarine to
help achieve cost savings and industrial base stability in that program. Accordingly, the
recommendation provides no funding for the AFSB. (Pages 259-260)
Senate
The Senate Appropriations Committee, in its report (S.Rept. 112-196 of August 2, 2012) on the
FY2013 DOD Appropriations Act (H.R. 5856 of the 112th Congress), recommended approving,
with some adjustments, the Navy’s requests for procurement funding for all 10 new battle force
ships requested for procurement in FY2013. The committee recommended reducing by $43.8
million the funding request for the aircraft carrier CVN-79. The committee recommended an
additional $777.7 million in FY2013 advance procurement funding for the procurement of a
second Virginia-class attack submarine in FY2014, an additional $1 billion in FY2013
procurement funding for the procurement of an additional DDG-51 in FY2013, and an additional
$263 million in advance procurement funding for the procurement of an additional LPD-17 class
amphibious ship in a future fiscal year. (Pages 124 and 125)
Section 8010 of the bill as reported would permit multiyear procurement (MYP) arrangements
for, among other things, up to 10 DDG-51 Arleigh Burke class Flight IIA guided missile
destroyers, as well as the AEGIS Weapon Systems, MK 41 Vertical Launching Systems, and
SSN-774 Virginia class submarine and government-furnished equipment. Subsection (b) of
Section 8010 states:
(b) The Secretary of Defense may employ incremental funding for the procurement of
Virginia class submarines and government-furnished equipment associated with the Virginia
class submarines to be procured during fiscal years 2013 through 2018 if the Secretary of
Defense:
(1) determines that such an approach will permit the Navy to procure an additional Virginia
class submarine in fiscal year 2014; and
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(2) intends to use the funding for that purpose.
Section 8103 of the bill as reported states:
Sec. 8103. There is hereby established in the Treasury of the United States the `Ship
Modernization, Operations and Sustainment Fund’. There is appropriated $2,382,100,000,
for the `Ship Modernization, Operations and Sustainment Fund’, to remain available until
September 30, 2014: Provided, That the Secretary of the Navy shall transfer funds from the
`Ship Modernization, Operations and Sustainment Fund’ to appropriations for military
personnel; operation and maintenance; research, development, test and evaluation; and
procurement, only for the purposes of manning, operating, sustaining, equipping and
modernizing the Ticonderoga-class guided missile cruisers CG-63, CG-64, CG-65, CG-66,
CG-68, CG-69, CG-73, and the Whidbey Island-class dock landing ships LSD-41 and LSD-
46: Provided further, That funds transferred shall be merged with and be available for the
same purposes and for the same time period as the appropriation to which they are
transferred: Provided further, That the transfer authority provided herein shall be in addition
to any other transfer authority available to the Department of Defense: Provided further, That
the Secretary of the Navy shall, not less than 30 days prior to making any transfer from the
`Ship Modernization, Operations and Sustainment Fund’, notify the congressional defense
committees in writing of the details of such transfer.
In addition to the funding provided by Section 8103, the committee recommended additional
FY2013 funding for keeping in service all four of the Aegis cruisers that the Navy has proposed
for early retirement in FY2013; the funding is in the Military Personnel, Navy (MPN) account
(page 25, lines 50 and 100) and the Operation and Maintenance, Navy (OMN) account (page 54,
line 2B2G).
S.Rept. 112-196 states:
For the Department of the Navy, the Committee does not concur with the recommendation to
prematurely retire nine Navy ships and provides over $2,300,000,000 to man, operate, equip,
and modernize these ships. In addition, the Committee provides over $770,000,000 for
advance procurement of a tenth Virginia-class submarine, $1,000,000,000 for an additional
DDG–51 destroyer, and $263,255,000 for advance procurement of an amphibious warship.
These funds were not included in the budget request, but the Committee believes these ships
are crucial to supporting our Navy’s global requirements, particularly as the U.S. military
shifts its focus to the Pacific. (Page 7)
The report also states:
Ship Modernization, Operations and Sustainment Fund.—The Department of Defense’s
2012 defense strategy (“Sustaining U.S. Global Leadership: Priorities for 21st Century
Defense”) calls for a “rebalance toward the Asia-Pacific region”; however, the Navy’s fiscal
year 2013 budget submission includes a proposal to prematurely retire seven cruisers and
two dock landing ships in the next 2 years. The Committee is concerned with this proposed
elimination of force structure and believes it is disconnected from the defense strategy,
creates future unaffordable shipbuilding requirements, and exacerbates force structure
shortfalls that negatively impact the Department’s ability to meet Combatant Commander
requirements.
The Committee is troubled by the impact that the proposed premature retirement of these
ships will have on the Department’s strategic realignment toward the Asia-Pacific region.
Specifically, the Committee is concerned about the operational impact of this reduction in
force structure on the balance of the Fleet as it attempts to meet requirements in the Asia-
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Pacific, as well as demands in the Middle East and other parts of the world. In addition, the
Committee notes that with one exception, the cruisers proposed for premature retirement
were slated to receive ballistic missile defense capability that has already proven of
significant operational relevance and that the elimination of this capability creates further
strain on the Department’s ability to meet Combatant Commander requirements.
In addition, the Committee believes that prematurely retiring capable and relevant ships
following an initial investment of no less than $11,600,000,000 in current fiscal year 2012
dollars creates unnecessary and unaffordable future shipbuilding requirements. The
Committee notes that current fiscal pressures on the Navy’s shipbuilding budget are not
likely to be alleviated prior to the end of the next decade, when a large number of surface
ships are scheduled for retirement, and significant capital investments will be required to
procure the Ohio class replacement submarine and the next Ford class aircraft carrier. By the
Navy’s own estimates, implementation of the fiscal year 2013 30-year shipbuilding plan
requires a significant and sustained increase in the Navy’s shipbuilding budget over the next
2 decades. Absent this funding increase, platforms scheduled to be procured will be deferred,
and the desired force structure will not be achieved. The Committee notes that over the past 8
years, on average, the Navy’s actual ship procurements have been roughly three platforms
less than envisioned in the respective shipbuilding plans. Therefore, the Committee questions
the wisdom of eliminating force structure with premature ship retirements.
Finally, the Committee notes that a ship’s expected service life is a significant factor for
justifying its extensive up-front investments. Curtailing ship service lives, as the Navy is
again proposing, calls into question the Department of the Navy assumptions and
specifications when funding new ship acquisitions. The Committee notes that the nine
platforms proposed for premature retirement have a combined remaining service life in
excess of 120 years, roughly one-third of their service life, and that the Navy shipbuilding
plan does not include a sufficient quantity of ships to offset the loss of these platforms. In
fact, annual ship procurement will decline from an average of 10 or more battle ships per
year in the two previous 5-year shipbuilding plans to approximately 8 battle ships per year in
the current 5-year plan.
The Committee has been informed that the Navy still believes in the operational relevance
and capability of these platforms, and that the decision to request their premature retirement
in the fiscal year 2013 budget request was strictly driven by fiscal constraints. Therefore, the
Committee recommends denying these proposed premature retirements and retaining this
force structure in its entirety. The Committee recommends full funding, as identified by the
Navy, to man, operate, sustain, upgrade, equip, and modernize only CG–63, CG–64, CG–65,
CG–66, CG–68, CG–69, CG–73, LSD–41, and LSD–46 in the Ship Modernization,
Operations and Sustainment Fund, as specified elsewhere in this act. The Committee
recommends full funding for all known requirements only for these platforms for the next 2
fiscal years, and provides the Secretary of the Navy the authority to transfer funds from the
Ship Modernization, Operations and Sustainment Fund to the appropriate appropriation
accounts in the year of execution following 30-day prior notification to the congressional
defense committees. The Committee directs funds to be transferred in accordance with the
requirements identified to the Committee by the Navy and further directs that any deviation
from those requirements shall be fully and clearly identified to the congressional defense
committees prior to the initiation of any such transfer. The Committee believes that this
approach provides the fiscal relief required by the Navy to maintain this force structure and
allows the Navy sufficient time to plan and budget for this force structure in future budget
submissions. (Pages 9-11)
The report also states:
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Navy Shipbuilding Plans.—The fiscal year 2013 budget request includes $13,579,845,000 in
Shipbuilding and Conversion, Navy [SCN], a decrease of $1,339,269,000 from amounts
appropriated in fiscal year 2012. The Navy’s projected fiscal year 2014 SCN budget request
is a further decrease of no less than $1,000,000,000.
The Committee is concerned with the apparent disconnect between the Navy’s publicly
stated priorities and the Navy’s fiscal year 2013 shipbuilding budget submission which, as
compared to the fiscal year 2012 plan, reduces planned ship procurement for the next 5 years
by 16 ships and eliminates funding for one Virginia class attack submarine, one amphibious
ship, and three oilers. In addition, the Navy’s budget request omits funding for an additional
Arleigh Burke class guided missile destroyer contrary to the Navy’s force structure goals.
The Committee is concerned that these proposed adjustments will drive up costs for multiple
classes of ships and negatively impact the industrial base, almost certainly leading to
additional cost growth in shipbuilding.
The Committee notes that it was just 3 years ago that the Navy had implemented sufficient
cost-reduction measures to allow for the procurement of two Virginia class attack
submarines per year. The Committee is troubled that the Navy removed one Virginia class
attack submarine from its near-term shipbuilding plan, particularly when the Navy is seeking
multiyear procurement authority for Virginia class submarines to be procured from fiscal
years 2014 through 2018. The Committee has been informed by the Navy that procuring 10
Virginia class submarines in the next multiyear procurement instead of 9 as proposed in the
fiscal year 2013 budget request would result in an average submarine unit cost reduction in
excess of $120,000,000. The Committee believes that these cost savings and the avoidance
of industrial base perturbations warrant the inclusion of a tenth Virginia class submarine in
the next multiyear procurement.
The Committee has been advised by the Navy that the addition of a tenth submarine, which
would be procured in fiscal year 2014, to the multiyear procurement necessitates Advance
Procurement funding in fiscal year 2013. Therefore, the Committee recommends an
additional $777,679,000 only for Advance Procurement of a second Virginia class submarine
in fiscal year 2014, as authorized in S. 3254, the National Defense Authorization Act for
Fiscal Year 2013, as reported. As noted in Senate Report 112–173 to accompany S. 3254, as
reported, procurement of an additional submarine in fiscal year 2014 will help alleviate an
attack submarine shortfall anticipated in 2022. In addition, the Committee understands that
current budget constraints make full funding of all 10 submarines included in the multiyear
procurement in accordance with the Department’s Financial Management Regulations
unaffordable, but that incrementally funding these submarines allows for their procurement
within the current budget. While incremental funding authority is currently only provided for
aircraft carriers and largedeck amphibious ships, the Committee notes the precedence for
incrementally funding a submarine and recommends incremental funding authority only for
the Virginia class submarines to be procured under the next multiyear procurement.
In addition, the fiscal year 2013 budget request includes a proposal to procure nine Arleigh
Burke class guided missile destroyers at a rate of two ships per year for the next 5 years with
the exception of fiscal year 2014, where the Navy has only budgeted for one Arleigh Burke
class guided missile destroyer. The Committee has been informed by the Navy that a tenth
destroyer could be added to this multiyear procurement at a significantly lower ship unit
cost. According to the Navy, those costs could be partially offset with savings generated
from previous competitive procurements, with the balance of funding required in the fiscal
year 2014 shipbuilding budget request. Recognizing the fiscal pressures on the Navy’s fiscal
year 2014 shipbuilding budget, the Committee recommends taking advantage of these
significant cost savings now and recommends an additional $1,000,000,000 in fiscal year
2013 to fully fund a tenth Arleigh Burke class guided missile destroyer within the next
multiyear procurement.
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The Committee notes that within this multiyear procurement, the Navy intends to include
next generation Flight III Arleigh Burke class guided missile destroyers with an improved
radar suite and combat systems capability as an Engineering Change Proposal [ECP]. Since
the radar is still in development, acquisition authorities within the Department have yet to be
established, and the ECP has no defined scope and associated cost estimates, the Committee
finds it premature to request authority for this ECP within the multiyear procurement at this
time. Therefore, the Committee provides multiyear procurement authority only for Flight IIA
Arleigh Burke class guided missile destroyers, as authorized in S. 3254, the National
Defense Authorization Act for Fiscal Year 2013, as reported.
Finally, the fiscal year 2013 budget request includes a proposal to eliminate an amphibious
class warship from the 5-year shipbuilding plan, and defers funding for the only other
amphibious ship in the Navy’s 5-year plan until fiscal year 2017. As detailed in section 130
of S. 3254, the National Defense Authorization Act for Fiscal Year 2013, as reported, the
Navy and Marine Corps have agreed on a fiscally constrained minimum force of 33 ships to
meet a 38 amphibious warship force requirement. Currently, there are 29 ships in the
Department of the Navy’s amphibious fleet and the most recent shipbuilding and retirement
plan submitted to Congress reduces the force to 28 vessels in fiscal year 2015. If all
amphibious warships currently in the inventory were operationally available, the Marine
Expeditionary Brigade assault echelon would be lacking approximately 400,000 square feet
of vehicle stowage and 3 million gallons of JP–5 jet fuel. However, since 10 to 15 percent of
warships are in overhaul and unavailable at any given time, the number of operationally
available amphibious warships leaves an even greater shortfall and is significantly below the
minimum lift requirement stated by the Department of the Navy.
The Committee is deeply concerned about the level of risk being assumed with amphibious
lift capability and the impact this has on Commanders to meet operations plans and crisis
response requirements, particularly as the Department of Defense rebalances its global
posture towards the Asia-Pacific region. The Committee is also concerned about the ability
to address this assumed risk when the next amphibious class warship in the Navy’s
shipbuilding plan does not appear until 5 years from now. As noted earlier, this proposal and
funding gap will almost certainly have a negative industrial base impact and lead to
additional cost growth in multiple shipbuilding programs. Therefore, to start addressing the
amphibious lift shortfall that exists today, the Committee recommends an additional
$263,255,000 only for Advance Procurement of continued LPD–17 Class amphibious ship
production. (Pages 125-127; material in brackets as in original)
In regard to the budget request for the National Defense Sealift Fund (NDSF), the report states:
Afloat Forward Staging Base [AFSB].—The fiscal year 2013 budget request includes no
funds for the installation of an Engineering Change Proposal [ECP] to convert Mobile
Landing Platform [MLP] 3 to an AFSB. The Committee has been informed by the Navy that
the installation of this capability requires a total investment of $135,000,000, which the Navy
plans to fund by reallocating $38,000,000 that is requested in fiscal year 2013 as Advance
Procurement of a second AFSB to the MLP 3 ECP, and by requesting the balance of required
funding in fiscal years 2014 and 2015. The Committee is concerned by this funding strategy
and recommends transferring the $38,000,000, as requested by the Navy, to MLP 3 for the
ECP. In addition, the Committee recommends an additional $97,000,000 in fiscal year 2013
only for the MLP 3 ECP to fully fund the conversion of MLP 3 to an AFSB, subject to the
Department’s approval of validated requirements. (Pages 223-224; material in brackets as in
original)
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CRS Reports Tracking Legislation on Specific Navy Shipbuilding
Programs
For funding levels and legislative activity on individual Navy shipbuilding, conversion, and
modernization programs, see the following CRS reports:
• CRS Report RS20643, Navy Ford (CVN-78) Class Aircraft Carrier Program:
Background and Issues for Congress, by Ronald O'Rourke.
• CRS Report R41129, Navy Ohio Replacement (SSBN[X]) Ballistic Missile
Submarine Program: Background and Issues for Congress, by Ronald O'Rourke.
• CRS Report RL32418, Navy Virginia (SSN-774) Class Attack Submarine
Procurement: Background and Issues for Congress, by Ronald O'Rourke.
• CRS Report RL32109, Navy DDG-51 and DDG-1000 Destroyer Programs:
Background and Issues for Congress, by Ronald O'Rourke.
• CRS Report RL33741, Navy Littoral Combat Ship (LCS) Program: Background
and Issues for Congress, by Ronald O'Rourke.
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Appendix A. 2012 Testimony on Size of Navy
Needed to Fully Meet COCOM Requests
This appendix presents three instances in 2012 when Navy officials testified that a Navy of more
than 500 ships would be required to fully meet combatant commander COCOM requests for
Navy forces.
March 22, 2012, Hearing
At a March 22, 2012, hearing on Navy readiness before the Readiness subcommittee of the House
Armed Services Committee, the following exchange occurred:
REPRESENTATIVE J. RANDY FORBES:
We have a lot of requests for our combatant commanders—of the validated requests that
come from combatant commanders. How many ships would it take in our navy, based on
your estimation, to meet all of the validated requests from our commanders, combatant
commanders?
VICE ADMIRAL WILLIAM R. BURKE, DEPUTY CHIEF OF NAVAL OPERATIONS
FOR FLEET READINESS AND LOGISTICS:
Let me—give me just a minute on that, sir.
FORBES:
Please. And if you’d like, on any of these questions, if you’d rather take them for the record
and get back I’m OK with that, too.
BURKE:
I’m—no, I'm happy to answer the question. I just want to make sure I elaborate a little to
make sure we get—get the point right.
FORBES:
Please.
BURKE:
The—the combatant commander requests come in to the—to the services, and then the—
there’s a—a very high number of requirements from the services, or from the—the
combatant commanders which are then prioritized and adjudicated by the joint staff.
Essentially, a way to adjudicate supply—a lesser supply and a greater demand. So—so
those—of those requests that come in, some are determined to be more valid than others, if
you will. But to get to your exact question, of those requests that come in from the combatant
commanders, if we ...
(CROSSTALK)
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FORBES:
Admiral, could—could I just—on the nomenclature, just make sure I’m right, too. As they
come in, one of the first weed-out processes is we determine whether they’re validated or
not. In other words, we go through and make sure they’re legal, they don't have the other
asset somewhere. And—and then we stamp them as validated.
And then like you said, they go through a process where we then look at the resources we
have and allocate what we can. And we adjudicate which ones we can give and which ones
we can’t. So I want the top number. The—the ones that we have validated and said, “Yes,
this is legal, it’s a proper request.”
Of those combatant commander requests, approximately how many ships would it take us to
be able to meet those if we had them?
BURKE:
It would take a navy of over 500 ships to meet the combatant commander requests. And, of
course, it would take a similar increase in the aircraft and—and other parts of the—of the
Navy, as well, to meet the combatant commander requests.56
March 29, 2012, Hearing
At a March 29, 2012, hearing on Navy shipbuilding programs before the Seapower and Projection
Forces subcommittee of the House Armed Services Committee, the following exchange occurred:
REPRESENTATIVE DUNCAN D. HUNTER:
If you were to build the amphibs [i.e., amphibious ships] where would you prioritize? I
mean, where would you take money out of to be able to get the Marine Corps to where they
need to be?
VICE ADMIRAL JOHN TERENCE BLAKE, DEPUTY CHIEF OF NAVAL
OPERATIONS FOR INTEGRATION OF CAPABILITIES AND RESOURCES:
Here’s the issue we deal with: I don’t have the luxury of dealing with any single issue in
isolation; I have to deal with it across the entire...
HUNTER:
Well, we can. That’s why I'm asking.
BLAKE:
Well, we have to deal with it, though, across the entire portfolio.
HUNTER:
Sure.
56 Source: Transcript of hearing.
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BLAKE:
And so what we have to do is we have to balance the requirement for amphibs, the
requirement for surface combatants, the requirement for the carriers, the submarines—every
category of ships that we have. And so when we do that we then have to say, all right, as we
balance across that where are we going to be able to assume more risk? And that’s how we—
that’s how we end up where we are.
HUNTER:
So you’re saying there is less risk but still risk in the Marine Corps being short on amphibs
than there are in the other—the rest of the picture?
BLAKE:
No. I’m saying that we have assumed risk in all areas. The best example I can give you: It
was only a short time ago, if we tried to fill all the COCOM needs we said the number was
around 400 ships we’d need in the fleet. Today—and we see no abatement in that
commitment or the...
HUNTER:
No (inaudible) signal.
BLAKE:
Today we look at it and we see that we would—if we wanted to hit 100 percent of all the
COCOM requirements we’d need in excess of 500 ships. So what we end up having to do is
we go through the—the global management process and we look at it and we say, here are
our highest priorities, these are how we are going to address them, and then we—we have
those units available and we push that...
HUNTER:
I understand.
I’m going to yield back in just one second.
So I would take from your statement, then, that you did go through a prioritization process
and the amphibs are not at the top of that list. And second, when you say that you assume
risk all the way around I would argue that when you do your risk assessment and you
prioritize your needs the fact that the COCOMs wanted more ships and needed more ships
due to the international environment and where we find ourselves with the world today,
going down is probably – it’s going the wrong way.
We all know that, but I—I would—I would argue that your prioritization—I would like to
see that, if you don’t mind, the—the way that you analyzed this and the—and the way that
you said, hey, we’re going to—we’re going to keep them there to make sure that we have
this over here. That’s all I'm asking for.
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BLAKE:
OK. When we put it together we do it across the entire spectrum; we don’t—and by that I
mean, as we look at the entire requirement we say, this is what we need to do in order to be
able to meet the COCOM demand signal.57
April 19, 2012, Hearing
At an April 19, 2012, hearing on Navy shipbuilding programs before the Seapower subcommittee
of the Senate Armed Services Committee, the following exchange occurred:
SENATOR ROGER WICKER:
Admiral Burke and General Mills, from an operational perspective, the Navy budget cost for
decreases in large amphibious ships among other categories, in my opening statement, I
mentioned that the requests from combatant commanders for amphibious ships has increased
over 80 percent in the last five years—a very dramatic number. What is the reason for that
and what will be the impact if these requests are—are not met?
VICE ADMIRAL WILLIAM R. BURKE, DEPUTY CHIEF OF NAVAL OPERATIONS
FOR FLEET READINESS AND LOGISTICS:
Senator, thanks for the question. You're right, the COCOM demand signal has gone up
significantly to the point where if we were to meet their—all their requirements, it would
take a Navy of greater than 500 ships.
So, I certainly am not here to begrudge the COCOM demand signal because they have
challenges that they’re trying to deal with. But—but we can’t meet—meet all their demands.
So there is a process in the—in the Pentagon run by the joint staff called the Global Force
Management process by which they take in the COCOM requirements and adjudicate that
along with the forces we have to come to a reasonable allocation of—of force. And so that’s
the—that’s a process we’re dealing with today. We’ve been using that process for a number
of years, and I would expect we will continue to use that process in the future to—to bridge
the gap between supply and demand.58
57 Source: Transcript of hearing.
58 Source: Transcript of hearing.
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Appendix B. Comparing Past Ship Force Levels to
Current or Potential Future Ship Force Levels
In assessing the appropriateness of the current or potential future number of ships in the Navy,
observers sometimes compare that number to historical figures for total Navy fleet size. Historical
figures for total fleet size, however, can be a problematic yardstick for assessing the
appropriateness of the current or potential future number of ships in the Navy, particularly if the
historical figures are more than a few years old, because
• the missions to be performed by the Navy, the mix of ships that make up the
Navy, and the technologies that are available to Navy ships for performing
missions all change over time; and
• the number of ships in the fleet in an earlier year might itself have been
inappropriate (i.e., not enough or more than enough) for the meeting the Navy’s
mission requirements in that year.
Regarding the first bullet point above, the Navy, for example, reached a late-Cold War peak of
568 battle force ships at the end of FY1987,59 and as of February 28, 2013, included a total of 286
battle force ships. The FY1987 fleet, however, was intended to meet a set of mission requirements
that focused on countering Soviet naval forces at sea during a potential multi-theater NATO-
Warsaw Pact conflict, while the February 2013 fleet is intended to meet a considerably different
set of mission requirements centered on influencing events ashore by countering both land- and
sea-based military forces of potential regional threats other than Russia, including improved
Chinese military forces and non-state terrorist organizations. In addition, the Navy of FY1987
differed substantially from the February 2013 fleet in areas such as profusion of precision-guided
air-delivered weapons, numbers of Tomahawk-capable ships, and the sophistication of C4ISR
systems and networking capabilities.60
In coming years, Navy missions may shift again, and the capabilities of Navy ships will likely
have changed further by that time due to developments such as more comprehensive
implementation of networking technology, increased use of ship-based unmanned vehicles, and
the potential fielding of new types of weapons such as lasers or electromagnetic rail guns.
The 568-ship fleet of FY1987 may or may not have been capable of performing its stated
missions; the 286-ship fleet of February 2013 may or may not be capable of performing its stated
missions; and a fleet years from now with a certain number of ships may or may not be capable of
59 Some publications have stated that the Navy reached a peak of 594 ships at the end of FY1987. This figure, however,
is the total number of active ships in the fleet, which is not the same as the total number of battle force ships. The battle
force ships figure is the number used in government discussions of the size of the Navy. In recent years, the total
number of active ships has been larger than the total number of battle force ships. For example, the Naval History and
Heritage Command (formerly the Naval Historical Center) states that as of November 16, 2001, the Navy included a
total of 337 active ships, while the Navy states that as of November 19, 2001, the Navy included a total of 317 battle
force ships. Comparing the total number of active ships in one year to the total number of battle force ships in another
year is thus an apples-to-oranges comparison that in this case overstates the decline since FY1987 in the number of
ships in the Navy. As a general rule to avoid potential statistical distortions, comparisons of the number of ships in the
Navy over time should use, whenever possible, a single counting method.
60 C4ISR stands for command and control, communications, computers, intelligence, surveillance, and reconnaissance.
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performing its stated missions. Given changes over time in mission requirements, ship mixes, and
technologies, however, these three issues are to a substantial degree independent of one another.
For similar reasons, trends over time in the total number of ships in the Navy are not necessarily a
reliable indicator of the direction of change in the fleet’s ability to perform its stated missions. An
increasing number of ships in the fleet might not necessarily mean that the fleet’s ability to
perform its stated missions is increasing, because the fleet’s mission requirements might be
increasing more rapidly than ship numbers and average ship capability. Similarly, a decreasing
number of ships in the fleet might not necessarily mean that the fleet’s ability to perform stated
missions is decreasing, because the fleet’s mission requirements might be declining more rapidly
than numbers of ships, or because average ship capability and the percentage of time that ships
are in deployed locations might be increasing quickly enough to more than offset reductions in
total ship numbers.
Regarding the second of the two bullet points above, it can be noted that comparisons of the size
of the fleet today with the size of the fleet in earlier years rarely appear to consider whether the
fleet was appropriately sized in those earlier years (and therefore potentially suitable as a
yardstick of comparison), even though it is quite possible that the fleet in those earlier years
might not have been appropriately sized, and even though there might have been differences of
opinion among observers at that time regarding that question. Just as it might not be prudent for
observers years from now to tacitly assume that the 286-ship of February 2013 was appropriately
sized for meeting the mission requirements of 2013, even though there currently are differences
of opinion among observers on that question (as reflected, for example, in Table 5), simply
because a figure of 286 ships appears in the historical records for 2013, so, too, might it not be
prudent for observers today to tacitly assume that the number of ships of the Navy in an earlier
year was appropriate for meeting the Navy’s mission requirements that year, even though there
might have been differences of opinion among observers at that time regarding that question,
simply because the size of the Navy in that year appears in a table like Table D-1.
Previous Navy force structure plans, such as those shown in Table 1, might provide some insight
into the potential adequacy of a proposed new force-structure plan, but changes over time in
mission requirements, technologies available to ships for performing missions, and other force-
planning factors, as well as the possibility that earlier force-structure plans might not have been
appropriate for meeting the mission demands of their times, suggest that some caution should be
applied in using past force structure plans for this purpose, particularly if those past force
structure plans are more than a few years old. The Reagan-era plan for a 600-ship Navy, for
example, was designed for a Cold War set of missions focusing on countering Soviet naval forces
at sea, which is not an appropriate basis for planning the Navy today, and there was considerable
debate during those years as to the appropriateness of the 600-ship goal.61
61 Navy force structure plans that predate those shown in Table 1 include the Reagan-era 600-ship plan of the 1980s,
the Base Force fleet of more than 400 ships planned during the final two years of the George H. W. Bush
Administration, the 346-ship fleet from the Clinton Administration’s 1993 Bottom-Up Review (or BUR, sometimes
also called Base Force II), and the 310-ship fleet of the Clinton Administration’s 1997 QDR. The table below
summarizes some key features of these plans.
Features of Recent Navy Force Structure Plans
Plan
600-ship
Base Force
1993 BUR
1997 QDR
Total ships
~600 ~450/416a 346
~305/310b
Attack submarines
100 80/~55c 45-55 50/55d
(continued...)
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Appendix C. Independent Panel Assessment of 2010
QDR
The law that requires DOD to perform QDRs once every four years (10 U.S.C. 118) states that
the results of each QDR shall be assessed by an independent panel. The report of the independent
panel that assessed the 2010 QDR was released on July 29, 2010. The independent panel’s report
recommended a Navy of 346 ships, including 11 aircraft carriers and 55 attack submarines.62 The
report stated the following, among other things:
• “The QDR should reflect current commitments, but it must also plan effectively
for potential threats that could arise over the next 20 years.… we believe the
2010 QDR did not accord sufficient priority to the need to counter anti-access
challenges, strengthen homeland defense (including our defense against cyber
threats), and conduct post-conflict stabilization missions.” (Page 54)
• “In this remarkable period of change, global security will still depend upon an
American presence capable of unimpeded access to all international areas of the
Pacific region. In an environment of ‘anti-access strategies,’ and assertions to
create unique ‘economic and security zones of influence,’ America‘s rightful and
historic presence will be critical. To preserve our interests, the United States will
need to retain the ability to transit freely the areas of the Western Pacific for
security and economic reasons. Our allies also depend on us to be fully present in
the Asia-Pacific as a promoter of stability and to ensure the free flow of
commerce. A robust U.S. force structure, largely rooted in maritime strategy but
including other necessary capabilities, will be essential.” (Page 51)
• “The United States will need agile forces capable of operating against the full
range of potential contingencies. However, the need to deal with irregular and
hybrid threats will tend to drive the size and shape of ground forces for years to
(...continued)
Aircraft carriers
15e 12
11+1f 11+1f
Surface combatants
242/228g ~150
~124 116
Amphibious ships
~75h 51i 41i 36i
Source: Prepared by CRS based on DOD and U.S. Navy data.
a. Commonly referred to as 450-ship plan, but called for decreasing to 416 ships by end of FY1999.
b. Original total of about 305 ships was increased to about 310 due to increase in number of attack submarines to 55
from 50.
c. Plan originally included 80 attack submarines, but this was later reduced to about 55.
d. Plan originally included 50 attack submarines but this was later increased to 55.
e. Plus one additional aircraft carrier in the service life extension program (SLEP).
f. Eleven active carriers plus one operational reserve carrier.
g. Plan originally included 242 surface combatants but this was later reduced to 228.
h. Number needed to lift assault echelons of one Marine Expeditionary Force (MEF) plus one Marine Expeditionary
Brigade (MEB).
i. Number needed to lift assault echelons of 2.5 MEBs. Changing numbers needed to meet this goal reflect in part
changes in the design and capabilities of amphibious ships.
62 Stephen J. Hadley and William J. Perry, co-chairmen, et al, The QDR in Perspective: Meeting America’s National
Security Needs In the 21st Century, The Final Report of the Quadrennial Defense Review Independent Panel,
Washington, 2010, Figure 3-2 on page 58.
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come, whereas the need to continue to be fully present in Asia and the Pacific and
other areas of interest will do the same for naval and air forces.” (Page 55)
• “The force structure in the Asia-Pacific needs to be increased. In order to
preserve U.S. interests, the United States will need to retain the ability to transit
freely the areas of the Western Pacific for security and economic reasons. The
United States must be fully present in the Asia-Pacific region to protect American
lives and territory, ensure the free flow of commerce, maintain stability, and
defend our allies in the region. A robust U.S. force structure, one that is largely
rooted in maritime strategy and includes other necessary capabilities, will be
essential.” (Page 66)
• “Force structure must be strengthened in a number of areas to address the need to
counter anti-access challenges, strengthen homeland defense (including defense
against cyber threats), and conduct post-conflict stabilization missions: First, as a
Pacific power, the U.S. presence in Asia has underwritten the regional stability
that has enabled India and China to emerge as rising economic powers. The
United States should plan on continuing that role for the indefinite future. The
Panel remains concerned that the QDR force structure may not be sufficient to
assure others that the United States can meet its treaty commitments in the face
of China’s increased military capabilities. Therefore, we recommend an increased
priority on defeating anti-access and area-denial threats. This will involve
acquiring new capabilities, and, as Secretary Gates has urged, developing
innovative concepts for their use. Specifically, we believe the United States must
fully fund the modernization of its surface fleet. We also believe the United
States must be able to deny an adversary sanctuary by providing persistent
surveillance, tracking, and rapid engagement with high-volume precision strike.
That is why the Panel supports an increase in investment in long-range strike
systems and their associated sensors. In addition, U.S. forces must develop and
demonstrate the ability to operate in an information-denied environment.” (Pages
59-60)
• “To compete effectively, the U.S. military must continue to develop new
conceptual approaches to dealing with operational challenges, like the Capstone
Concept for Joint Operations (CCJO). The Navy and Air Force‘s effort to
develop an Air-Sea Battle concept is one example of an approach to deal with the
growing anti-access challenge. It will be necessary to invest in modernized
capabilities to make this happen. The Chief of Naval Operations and Chief of
Staff of the Air Force deserve support in this effort, and the Panel recommends
the other military services be brought into the concept when appropriate.” (Page
51; a similar passage appears on page 67)
In recommending a Navy of 346 ships, the independent panel’s report cited the 1993 Bottom-Up
Review (BUR) of U.S. defense plans and policies. Table C-1 compares the Navy’s 306 ship goal
of March 2012 to the 346-ship Navy recommended in the 1993 BUR (as detailed partly in
subsequent Navy testimony and publications) and the ship force levels recommended in the
independent panel report.
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Table C-1. Comparison of Navy’s 306 ship goal, Navy Plan from 1993 BUR, and Navy
Plan from 2010 QDR Review Panel
2010 QDR
Independent
Navy’s 306 ship goal of
Bottom-Up Review
Review Panel
Ship Type
March 2012
(BUR) (1993)
(July 2010)
SSBNs 12-14
18
14
(SSBN force was later
reduced to 14 as a result of
the 1994 Nuclear Posture
Review)
SSGNs 0-4
0
4
(SSGN program did not yet
exist)
SSNs
~48
45 to 55
55
(55 in FY99, with a long-term
goal of about 45)
Aircraft carriers
11 active
11 active + 1
11 active
operational/reserve
Surface combatants
~145
124
n/a
(114 active + 10 frigates in
Naval Reserve Force; a total
of 110-116 active ships was
also cited)
Cruisers and destroyers
~90
n/a
n/a
Frigates
0
n/a n/a
(to be replaced by LCSs)
LCSs
~55
0
n/a
(LCS program did not exist)
Amphibious ships
~32
41
n/a
(30 operational ships
(Enough to lift 2.5 MEBs)
needed to lift 2.0 MEBs)
Dedicated mine
0
26
n/a
warfare ships
(to be replaced by LCSs)
(LCS program did not exist)
CLF ships
~29
43
n/a
Support ships
~33
22
n/a
TOTAL ships
~306
346
346
(numbers above add to
331-341)a
Source: Table prepared by CRS. Sources for 1993 Bottom-Up Review: Department of Defense, Report on the
Bottom-Up Review, October 1993, Figure 7 on page 28; Department of the Navy, Highlights of the FY 1995
Department of the Navy Budget, February 1994, p. 1; Department of the Navy, Force 2001, A Program Guide to the
U.S. Navy, 1994 edition, p. 15; Statement of VADM T. Joseph Lopez, U.S. Navy, Deputy Chief of Naval
Operations (Resources, Warfare Requirements & Assessments), Testimony to the Military Forces and Personnel
Subcommittee of the House Armed Services Committee, March 22, 1994, pp. 2-5. Source for independent
panel report: Stephen J. Hadley and William J. Perry, co-chairmen, et al., The QDR in Perspective: Meeting
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America’s National Security Needs In the 21st Century, The Final Report of the Quadrennial Defense Review Independent
Panel, Washington, 2010, Figure 3-2 on pages 58-59.
Notes: n/a is not addressed in the report. SSBN is nuclear-powered ballistic missile submarine; SSGN is
nuclear-powered cruise missile and special operations forces submarine; SSN is nuclear-powered attack
submarine; LCS is Littoral Combat Ship; MPF(F) is Maritime Prepositioning Force (Future) ship; CLF is combat
logistics force (i.e., resupply) ship; MEB is Marine Expeditionary Brigade.
a. The Navy testified in 1994 that the planned number was adjusted from 346 to 330 to reflect reductions in
numbers of tenders and early retirements of some older amphibious ships.
In a letter dated August 11, 2010, Secretary of Defense Robert Gates provided his comments on
the independent panel’s report. The letter stated in part:
I completely agree with the Panel that a strong navy is essential; however, I disagree with the
Panel’s recommendation that DoD should establish the 1993 Bottom Up Review’s (BUR’s)
fleet of 346 ships as the objective target. That number was a simple projection of the then-
planned size of [the] Navy in FY 1999, not a reflection of 21st century, steady-state
requirements. The fleet described in the 2010 QDR report, with its overall target of 313 to
321 ships, has roughly the same number of aircraft carriers, nuclear-powered attack
submarines, surface combatants, mine warfare vessels, and amphibious ships as the larger
BUR fleet. The main difference between the two fleets is in the numbers of combat logistics,
mobile logistics, and support ships. Although it is true that the 2010 fleet includes fewer of
these ships, they are all now more efficiently manned and operated by the Military Sealift
Command and meet all of DoD’s requirements….
I agree with the Panel’s general conclusion that DoD ought to enhance its overall posture and
capabilities in the Asia-Pacific region. As I outlined in my speech at the Naval War College
in April 2009, “to carry out the missions we may face in the future… we will need numbers,
speed, and the ability to operate in shallow waters.” So as the Air-Sea battle concept
development reaches maturation, and as DoD’s review of global defense posture continues, I
will be looking for ways to meet plausible security threats while emphasizing sustained
forward presence – particularly in the Pacific.63
63 Letter dated August 11, 2010, from Secretary of Defense Robert Gates to the chairmen of the House and Senate
Armed Services and Appropriations Committees, pp. 3 and 4. The ellipsis in the second paragraph appears in the letter.
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Appendix D. Size of the Navy and Navy
Shipbuilding Rate
Size of the Navy
Table D-1 shows the size of the Navy in terms of total number of ships since FY1948; the
numbers shown in the table reflect changes over time in the rules specifying which ships count
toward the total. Differing counting rules result in differing totals, and for certain years, figures
reflecting more than one set of counting rules are available. Figures in the table for FY1978 and
subsequent years reflect the battle force ships counting method, which is the set of counting rules
established in the early 1980s for public policy discussions of the size of the Navy.
As shown in the table, the total number of battle force ships in the Navy reached a late-Cold War
peak of 568 at the end of FY1987 and began declining thereafter.64 The Navy fell below 300
battle force ships in August 2003 and included 286 battle force ships as of February 28, 2013.
As discussed in Appendix B, historical figures for total fleet size might not be a reliable yardstick
for assessing the appropriateness of proposals for the future size and structure of the Navy,
particularly if the historical figures are more than a few years old, because the missions to be
performed by the Navy, the mix of ships that make up the Navy, and the technologies that are
available to Navy ships for performing missions all change over time, and because the number of
ships in the fleet in an earlier year might itself have been inappropriate (i.e., not enough or more
than enough) for the meeting the Navy’s mission requirements in that year.
For similar reasons, trends over time in the total number of ships in the Navy are not necessarily a
reliable indicator of the direction of change in the fleet’s ability to perform its stated missions. An
increasing number of ships in the fleet might not necessarily mean that the fleet’s ability to
perform its stated missions is increasing, because the fleet’s mission requirements might be
increasing more rapidly than ship numbers and average ship capability. Similarly, a decreasing
number of ships in the fleet might not necessarily mean that the fleet’s ability to perform stated
missions is decreasing, because the fleet’s mission requirements might be declining more rapidly
than numbers of ships, or because average ship capability and the percentage of time that ships
are in deployed locations might be increasing quickly enough to more than offset reductions in
total ship numbers.
64 Some publications have stated that the Navy reached a peak of 594 ships at the end of FY1987. This figure, however,
is the total number of active ships in the fleet, which is not the same as the total number of battle force ships. The battle
force ships figure is the number used in government discussions of the size of the Navy. In recent years, the total
number of active ships has been larger than the total number of battle force ships. For example, the Naval History and
Heritage Command (formerly the Naval Historical Center) states that as of November 16, 2001, the Navy included a
total of 337 active ships, while the Navy states that as of November 19, 2001, the Navy included a total of 317 battle
force ships. Comparing the total number of active ships in one year to the total number of battle force ships in another
year is thus an apples-to-oranges comparison that in this case overstates the decline since FY1987 in the number of
ships in the Navy. As a general rule to avoid potential statistical distortions, comparisons of the number of ships in the
Navy over time should use, whenever possible, a single counting method.
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Table D-1. Total Number of Ships in the Navy Since FY1948
FYa Number FYa Number FYa Number
1948 737 1970 769 1992 466
1949 690 1971 702 1993 435
1950 634 1972 654 1994 391
1951 980 1973 584 1995 373
1952 1,097 1974 512 1996 356
1953 1,122 1975 496 1997 354
1954 1,113 1976 476 1998 333
1955 1,030 1977 464 1999 317
1956 973 1978 468 2000 318
1957 967 1979 471 2001 316
1958 890 1980 477 2002 313
1959 860 1981 490 2003 297
1960 812 1982 513 2004 291
1961 897 1983 514 2005 282
1962 959 1984 524 2006 281
1963 916 1985 541 2007 279
1964 917 1986 556 2008 282
1965 936 1987 568 2009 285
1966 947 1988 565 2010 288
1967 973 1989 566 2011 284
1968 976 1990 547 2012 287
1969 926 1991 526 2013
Source: Compiled by CRS using U.S. Navy data. Numbers shown reflect changes over time in the rules
specifying which ships count toward the total. Figures for FY1978 and subsequent years reflect the battle force
ships counting method, which is the set of counting rules established in the early 1980s for public policy
discussions of the size of the Navy.
a. Data for earlier years in the table may be for the end of the calendar year (or for some other point during
the year), rather than for the end of the fiscal year.
Shipbuilding Rate
Table D-2 shows past (FY1982-FY2012) and requested (FY2013-FY2017) rates of Navy ship
procurement.
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Table D-2. Battle Force Ships Procured or Requested, FY1982-FY2017
(Procured FY1982-FY2012; requested FY2013-FY2017)
82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99
17 14 16 19 20 17 15 19 15 11 11 7 4 4 5 4 5 5
00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17
6 6 6 5 7 8 4a
5a
3a 8 7 10 11b
10 7 8 9 7
Source: CRS compilation based on Navy budget data and examination of defense authorization and
appropriation committee and conference reports for each fiscal year. The table excludes non-battle force ships
that do not count toward the 306 ship goal, such as certain sealift and prepositioning ships operated by the
Military Sealift Command and oceanographic ships operated by agencies such as the National Oceanic and
Atmospheric Administration (NOAA).
a. The totals shown for FY2006, FY2007, and FY2008, reflect the cancel ation two LCSs funded in FY2006,
another two LCSs funded in FY2007, and an LCS funded in FY2008.
b. The total shown for FY2012 includes two JHSVs—one that was included in the Navy’s FY2012 budget
submission, and one that was included in the Army’s FY2012 budget submission. Until FY2012, JHSVs were
being procured by both the Navy and the Army. The Army was to procure its fifth and final JHSV in
FY2012, and this ship was included in the Army’s FY2012 budget submission. In May 2011, the Navy and
Army signed a Memorandum of Agreement (MOA) transferring the Army’s JHSVs to the Navy. In the
FY2012 DOD Appropriations Act (Division A of H.R. 2055/P.L. 112-74 of December 23, 2011), the JHSV
that was in the Army’s FY2012 budget submission was funded through the Shipbuilding and Conversion,
Navy (SCN) appropriation account, along with the JHSV that the Navy had included in its FY0212 budget
submission. The four JHSVs that were procured through the Army’s budget prior to FY2012, however, are
not included in the annual totals shown in this table.
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Appendix E. February 12, 2013, Navy Testimony on
Potential CR and Sequester Impacts
This appendix presents the full text of the Navy’s written statement for a February 12, 2013,
hearing before the Senate Armed Services Committee on the impact of a year-long CR and
sequestration.65 (Although the Navy’s written statement for the hearing is from Admiral Jonathan
Greenert, the Chief of Naval Operations, the Navy’s testimony at the hearing was actually given
by the Vice Chief of Naval Operations, Admiral Mark E. Ferguson III, who was substituting for
Admiral Greenert at the hearing.) The Navy presented similar testimony at a similar hearing
before the House Armed Services Committee on February 13, 2013. The text of the statement is
as follows:
Chairman McKeon, Ranking Member Smith, and distinguished members of the Committee,
thank you for holding this hearing and for the opportunity to testify on the impact on our
Navy of sequestration and a full-year Continuing Resolution (CR).
Important qualities of our naval forces are their readiness to respond to crisis and persistent
forward presence. Because they continuously operate overseas at the maritime crossroads,
our Navy and Marine Corps are the first responders to crises such as terrorist attack, military
aggression or natural disaster. Operating forward at strategic maritime crossroads such as the
Straits of Malacca, Hormuz, or Gibraltar, naval forces contain conflict, deter aggression
without escalation, and assure allies and build partnerships.
When I last appeared before you I assessed that our FY13 budget proposal, developed under
the limitations of the Budget Control Act of 2011 (BCA), was not without risk. As I said last
year, senior DoD leaders conducted an assessment of the ability of our force to implement
the new Defense Strategic Guidance (DSG). In the Navy we also assessed the capabilities,
training, and the number and type of ships and aircraft required to execute the strategy. We
determined the force supported by the FY13 budget proposal was able to execute the
strategy, but with some risk due to limitations in overall capacity.
There is no question we must get our nation’s fiscal house in order, but we should do so in a
coherent and thoughtful manner to ensure appropriate readiness, warfighting capability and
forward presence – the attributes we depend upon from our Navy. Unless we change course
we will, without proper deliberation, dramatically reduce: our overseas presence; our ability
to respond to crises; our efforts to counter terrorism and illicit trafficking; and our material
readiness across the Navy (afloat and ashore). Perhaps more disconcerting, we may
irreversibly damage the military industrial base we depend on to build and maintain our ships
and aircraft. Over the next decade, the combination of sequestration and the reduced
discretionary caps would compel us to dramatically reduce our fleet size. Under these
circumstances, I assess your Navy will be limited in its ability to provide the capability and
capacity called for in the current defense strategy; and unable to fully support the Global
Force Management Allocation Plan for our Combatant Commanders.
Our situation
65 Statement of Admiral Jonathan Greenert, Chief of Naval Operations, before the Senate Armed Services Committee
on the Impact of Sequestration, February 12, 2013, 10 pp. Emphasis as in original.
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We face three separate, but linked, budget mechanisms that converge next month and place
at risk our ability to carry out our defense strategy. As a result of the failure of the Joint
Committee established under the BCA to achieve $1.2 trillion in deficit reduction, a
sequestration order will be issued on March 1; in addition, a second sequestration due to a
breach in the FY 2013 discretionary caps is scheduled to be ordered on March 27.
Sequestration will add to a budget shortfall in operating accounts already created by the
Continuing Resolution (CR). Sequestration and the CR render us unable to continue our
current and anticipated level of operations, compel us to cancel some maintenance and
training, and constrain our ability to invest in future capability and capacity.
We will approach this challenge using our enduring tenets, established upon my assuming
the office of CNO, to guide us:
• Warfighting first
• Operate forward
• Be ready
The Navy’s primary mission is to be ready to fight and win today, while building the ability
to win tomorrow; all our efforts will remain grounded in this fundamental responsibility. We
will continue to operate forward, where the Navy is most effective; but at significantly lower
levels. And we will endeavor to remain ready, providing our fleet and Sailors the best
possible training, maintenance, and logistics to assure their confidence and proficiency.
FY13: A readiness crisis in the making
Our immediate concern from the sequestration and the CR is their impact on readiness and
training during this fiscal year. The CR is based on FY12 funding levels and therefore
includes fewer operating dollars than we proposed, and Congress authorized, for FY13.
Extended for the whole fiscal year, the CR would provide the Navy $3.2 billion less in
operations and maintenance funds than requested in the FY13 budget. In addition, we have
incurred $1.4 billion in unplanned costs in FY13 from emergent ship repairs and increased
(and unbudgeted) presence in the Arabian Gulf. The CR also precludes the start of new
projects. If the CR is extended for the whole fiscal year, we will stop work on two aircraft
carrier refueling overhauls (USS ABRAHAM LINCOLN and USS THEODORE
ROOSEVELT), one of which is within four months of completion. The prohibition on “new
starts” under the CR also compels us to defer construction of USS JOHN F. KENNEDY
(CVN-79), USS SOMERSET (LPD-25) and USS AMERICA (LHA-6) and cancel the
planned procurement of an Arleigh Burke-class guided missile destroyer, multiple P-8A
Poseidon aircraft and hundreds of weapons. Similarly, we will not begin about $675 million
in “new start” military construction projects while under the CR.
In addition to the CR funding shortfall in operating accounts, the March 1 sequestration
order would impose significant additional cuts in FY13, which would reduce all of our
accounts by about eight percent. And as mentioned above, second sequestration due to a
breach in the FY 2013 discretionary caps is scheduled to be implemented on March 27. The
Department estimates the combined effects of sequestration will be a nine percent reduction,
which would result in a $4 billion cut in operations and maintenance funding from current
levels and $11.2 billion in the FY13 budget overall. Taken together, the CR, sequestration
and emergent costs would create an $8.6 billion shortfall in the operations and maintenance
account for FY13. $12.3 billion has already been spent from this account in FY13, and
another $16.4 billion is fixed in existing contracts and safety requirements. Therefore, we
must find $8.6 billion in savings from the remaining $20.2 billion in operations and
maintenance funding – more than a third of the money available in the account.
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Therefore, we are compelled to take the following steps:
• Cancel 70% of ship maintenance in private shipyards and all aircraft maintenance
scheduled in the 3rd and 4th quarters of FY13; this affects up to 25 ships and 327 aircraft and
eliminates critical ship and aircraft repair and adds to an existing maintenance backlog
generated by a decade of high-tempo operations – resulting in an overall Navy maintenance
backlog of about $3 billion;
• Reduce by about one-third the number of days at sea and hours of flight operations for
ships and aircraft permanently stationed in the Asia-Pacific; cancel all aircraft deployments
and four of six ship deployments to the region;
• Reduce by half the number of days at sea and by one quarter the hours of flight operations
for ships and aircraft in the Middle East and Arabian Gulf; reduce carrier presence in the
Arabian Gulf to one (the requirement is two carriers);
• Stop Amphibious Ready Group (ARG) deployments to the Middle East / Arabian Gulf in
FY14 after USS BOXER; this loses the nation’s primary response force for crises such as
noncombatant evacuations in Liberia and Lebanon, floods in Pakistan and Thailand and
terrorism threats in Africa – all of which were addressed by ARGs in the past decade.
• Cancel five of six FY13 ship deployments (including USNS COMFORT) and stop all
aircraft deployments to South America, stopping efforts that interdicted hundreds of tons of
illegal drugs into the U.S. in 2012;
• Cancel all ship and aircraft deployments to Africa, halting support to counter-terrorism
operations on the continent during a time when terrorist affiliates are active there;
• Stop training and certification of ballistic missile defense ships, resulting in no new
deployments of these ships to Europe after October 2013;
• Cancel most non-deployed operations including exercises, pre-deployment certification,
and all port visits in the continental U.S.; as a result, the number of ships available for
homeland defense will be reduced and it will take 9-12 months for ships that were not
preparing to deploy to regain certification for Major Combat Operations;
• Stop training and certification for Carrier Strike Groups (CSG) except for the one next to
deploy to the Middle East / Arabian Gulf; We will have only one additional or “surge” CSG
certified for Major Combat Operations in FY13 and throughout FY14 (down from almost
three on average);
• Stop training and certification for Amphibious Ready Groups (ARG), resulting in no
additional or “surge” ARG certified for Major Combat Operations in FY13 and FY14;
• Freeze hiring of civilian workers and release current temporary workers, resulting in a
reduction of about 3,000 people from our shipyard workforce of Navy civilians;
• Plan to furlough up to about 186,000 civilians for 22 days, resulting in a 20 percent pay
reduction.
On top of reductions in operations and maintenance funding, sequestration will reduce FY13
funding for each investment program (about $7.2 billion overall). In some programs, such F-
35C Lightning II, P-8A Poseidon and E-2D Hawkeye, this reduction will compel us to
reduce the number of platforms procured in FY13.
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In addition to these immediate impacts, our actions in FY13 to address reductions from the
CR and sequestration will begin to erode our readiness in four major ways:
Degraded material condition and expected service life of our ships and aircraft. The
cancellation of maintenance for ships and aircraft will reduce their service lives, increase the
likelihood of break downs and force us to pay a higher cost (premium) to make up the
critical maintenance later. Should operations funding eventually become available, some
ships and aircraft will be unavailable to deploy or surge because they need repairs; further,
we will need to realign ship maintenance periods and repairs within an already tight
operational schedule.
Sailors lacking proficiency and confidence. Cancelled training and exercises could result
in some units in the fleet that, by the end of FY13, are not proficient in the basic skills
necessary for effective warfighting operations. To be effective, we need all combatants able
to deploy or surge to a contingency.
A damaged industrial base. Delayed or cancelled ship and aircraft construction, cancelled
maintenance and repair, and reduction of the civilian workforce will immediately impact
private shipyards, aircraft and weapons manufacturers and our military industrial base. The
loss of work in FY13 alone may cause some smaller suppliers and service providers to shut
down.
Increased strain and operational tempo on our Sailors and Civilians. The reduction of
ready forces will put greater stress on the Sailors assigned to ships and squadrons that are
currently deployed or soon to deploy. They will operate at a higher tempo; and we are
already at an extraordinary operational tempo. While military compensation is exempt from
sequestration, there is a cost to the force in having to do more. However, I remain committed
to making sure we provide for our Sailors, Civilians and their Families by funding our most
important missions and deployments, and Family Readiness Programs.
If Congress authorizes the Navy to transfer funds within the FY13 budget, we intend to
restore our most critical operations and maintenance requirements. This will be done by
taking funding from investments such as perhaps the P-8A Poseidon, F-35C Lightning II and
Littoral Combat Ship – resulting in fewer of these platforms being procured in FY13.
Longer-Term Effects: A Different Fleet and a Different Strategy
In addition to sequestration for FY13, the BCA also required the lowering of the
discretionary caps for FY14 through FY21. Beyond FY13, if the discretionary cap reductions
are sustained for the full nine years, we would fundamentally change the Navy as currently
organized, trained and equipped. As time allows, we will take a deliberate and
comprehensive approach to this reduction, based on a reevaluation of the Defense Strategic
Guidance. In doing so, I will endeavor to: (1) ensure our people are properly resourced; (2)
protect sufficient current readiness and warfighting capability; (3) sustain some ability to
operate forward by continuing to forward base forces in Japan, Spain, Singapore and
Bahrain, and by using rotational crews; and (4) maintain appropriate research and
development.
As I indicated last year to the Senate Armed Services Committee (SASC), under a set of
fiscal circumstances in sequestration, our Navy may be a fleet of around 230 ships. That
would be a loss of more than 50 ships, including the loss of at least two carrier strike groups.
We would be compelled to retire ships early and reduce procurement of new ships and
aircraft. This would result in a requisite reduction in our end strength. Every program will be
affected and as Secretary Panetta noted in his 2011 letter to Senators McCain and Graham,
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programs such as the F-35 Lightning II, next generation ballistic missile submarine and
Littoral Combat Ship might be reduced or terminated.
Inevitably, these changes will severely damage our industrial base. Some shipyards will not
be able to sustain steady construction or maintenance operations and may close or be
inactivated. Aviation depots will reduce their operations or become idle. Aircraft and
weapons manufacturers will slow or stop their work entirely. In particular, the small firms
that are often the sole source for particular ship and aircraft components will quickly be
forced to shut down. Once these companies and their engineers and craftspeople move on to
other work, they are hard to reconstitute, sometimes impossible, at a later date when our
national security demands it.
Reducing the Impact of Sequestration and the Continuing Resolution
We ask that this Congress act quickly to replace sequestration with a coherent approach to
deficit reduction that addresses our national security interests. Additionally, the Department
needs the Congress to pass FY13 appropriations legislation that allows the department to
allocate reductions in this fiscal year in a deliberate and coherent manner to sustain current
operations while meeting current obligations.
I am honored to represent about 600,000 Sailors and Civilians serving their country in the
United States Navy. We understand the importance of resolving our fiscal challenges to
ensure our nation’s future prosperity. I look forward to working with the Congress to ensure
our Navy will remain the world’s preeminent maritime force while continuing to protect our
nation’s security and prosperity.
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Appendix F. February 28, 2013, Department of the
Navy Testimony on Potential CR and Sequester
Impacts
This appendix presents the full text of the Department of the Navy’s written statement for a
February 28, 2013, hearing before the Tactical Air and Land Forces subcommittee of the House
Armed Services Committee on the impact of a year-long CR and sequestration.66 The text of the
statement is as follows:
IMPACTS OF A YEAR-LONG CONTINUING RESOLUTION AND
SEQUESTRATION TO THE DEPARTMENT OF THE NAVY
Chairman Turner, Ranking Member Sanchez, and distinguished members of the
Subcommittee, thank you for the opportunity to appear before you today to discuss the year-
long Continuing Resolution (CR) and sequestration impacts to the Department of the Navy’s
(DoN) Acquisition Programs, Programming, and the Industrial Base.
The United States is a maritime nation with global responsibilities. Our Navy and Marine
Corps’ persistent presence and multi-mission capability represent U.S. power projection
across the global commons. As you are aware, a sequestration order will be issued on March
1; in addition, a second sequestration due to a breach in the FY 2013 discretionary caps is
scheduled to be ordered on March 27. Sequestration will add to a budget shortfall in
operating accounts already created by the Continuing Resolution. The potential for
sequestration and a year-long CR have already altered virtually every aspect of DoN
planning and our ability to carry out our responsibilities. Without action by Congress, a year-
long CR and sequestration will have immediate as well as long-term negative impacts. In the
near-term, we will be driven to cancel maintenance and training that supports current
readiness and our operational commitments at home and abroad. Long-term, the fiscal
challenges will constrain our ability to invest in future capability and capacity. In short, if a
strict year-long CR and sequestration occur, we will not be able to afford in the future the
Navy and Marine Corps we have today.
In March 2012, Navy and Marine Corps leadership testified to this committee about the
Fiscal Year 2013 budget which was restructured to reflect an updated defense posture as the
wars in Iraq and Afghanistan wind down with a commensurate reduction of about $500
billion over ten-years. The planned 2013 DoN budget request aligned with the new strategic
guidance for the Department of Defense (DoD) and provided the DoN with the best balance
of naval capabilities.
Currently, the budgetary uncertainty including the CR is driving changes to our force posture
and operational capability absent any major review of strategic priorities and national
security objectives. As the Chief of Naval Operations and the Commandant of the Marine
Corps testified to the House Armed Services Committee earlier this month, there is no
66 Statement of Hon. Sean J. Stackley, Assistant Secretary of the Navy (Research, Development and Acquisition), and
Vice Admiral Allen G. Myers, USN, Deputy Chief of Naval Operations [for] Integration of Capabilities and Resources,
and Lieutenant General John E. Wissler, USMC, Deputy Commandant for Programs and Resources, before the Tactical
Air and Land Forces Subcommittee of the House Armed Services Committee on Impacts of a Continuing Resolution
and Sequestration on Department of the Navy Acquisition, Programming & Industrial Base, February 28, 2013, 10 pp.
Emphasis as in original.
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question we must get our nation’s fiscal house in order. But we should do so in a coherent
and thoughtful manner to ensure we have the weapon systems needed to project power and
maintain appropriate readiness levels. Unless we change course, we may, without proper
deliberation, dramatically impact our global presence and our material readiness (afloat and
ashore). Further, we risk damaging the military industrial base we depend upon to build and
maintain our weapon systems and rely upon to surge to meet urgent operational needs.
A restrictive year-long CR and nine years of reduced budgets triggered by sequestration will
leave ships in ports, aircraft grounded for want of necessary maintenance, reduced flying
hours, units only partially trained, and a force reset via new acquisition and modernization
programs delayed, restructured, or canceled. Our concern is we will not have the ready forces
when it matters and where it matters most to respond to crisis, assure allies, build
partnerships, deter aggression, and contain conflict.
PERSONNEL/ACQUISITION/INDUSTRIAL BASE IMPACTS
National Economy/Employment Impacts:
The DoN $7.8 billion dollar sequestration investment reduction would potentially impact
over 100,000 private sector jobs across the nation considering direct and indirect impacts to
the economy.
DoN Personnel Impacts:
The DoN relies on a ‘total force’ of military (active and reserve) and civilian personnel to
execute its mission. While military personnel accounts are exempt from sequestration in
Fiscal Year 2013, the uncertainty of this year’s fiscal action has already had a tangible effect
on our civilian workforce as well as intangible effects on military personnel. Due to the
possibility of the current CR being extended to a full year, the Navy has implemented an
across the board hiring freeze for civilian positions and released many temporary employees.
The Navy also started planning for civilian furloughs in case sequestration and full year CR
were to occur.
Hiring Freeze: We estimate that the hiring freeze has already impacted over 1,000 Navy-
wide vacancies. With an average Navy-wide civilian personnel attrition rate of
approximately 350 per week, or approximately 18,000 vacancies per year, the impacts to the
workforce are severe. The Marine Corps, which is not immediately implementing an across-
the-board hiring freeze because it instituted hiring freezes in 2011 and 2012, is limiting
expenditures on civilian labor resulting in approximately 400 full-time equivalents below
2010 levels.
Temporary Civilian Employees: In total, the Navy is planning to release more than 650
temporary civilian employees representing approximately 25 percent of this workforce.
Furloughs: In accordance with the Office of Personnel Management (OPM) guidance, the
DoN is continuing to review the implications of sequestration-driven furloughs of up to
195,000 civilian employees. Furloughs will affect all fifty states and our internationally
based workforce. We assess the impact of a 22 work day furlough in the latter half of this
fiscal year will result in an approximate 20 percent pay reduction for affected employees
during this period. With Congressional Notification provided on February 20, 2013, we
anticipate furloughs could commence in the April 2013 timeframe. Consequently, the
impacts to the civilian workforce are detrimental not to only the affected employees – but to
their families, the DoN mission, and local economies.
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In addition to the direct loss of labor hours, the workforce impacts of a year-long CR and
sequestration will also lead to inefficiencies caused by loss of learning; productivity losses;
cost increases driven by lengthening schedules; increased burdens on military personnel; and
lower morale – all of which translates to reduced readiness. For example, the civilian hiring
freeze and overtime restrictions in Naval Shipyards have already caused non-recoverable
impacts to the shipyards’ ability to execute many assigned workloads and nuclear submarine
availabilities while threatening to impact Docking Planned Incremental Availabilities for the
USS EISENHOWER (CVN 69) and the USS JOHN C. STENNIS (CVN 74).
Major Acquisition Programs
The combined effects of a full-year CR, including the current prohibition on new starts and
increases in rates of production, and a reduction of about $8 billion in DoN Fiscal Year 2013
investment accounts due to sequestration are far reaching – with impacts to naval aviation,
ground-warfare systems, strike weapons, research & development, shipbuilding and the
associated support, training, and outfitting required for current and future readiness.
The impact of sequestration in Fiscal Year 2013 would result in a loss of more than $1.0
billion in aircraft production. The reductions will affect the F-35 Joint Strike Fighter, H-1
Huey and Cobra Rotary-Wing Aircraft, P-8 Poseidon Maritime Patrol Aircraft, E-2D
Hawkeye Surveillance Aircraft, Vertical Take-Off Unmanned Aerial Aircraft (VTUAV), and
the Small Tactical Unmanned Aerial Vehicle production lines. Further, the Department
would delay the Initial Operating Capability (IOC) of VTUAV Intelligence, Surveillance and
Reconnaissance in support of Special Operations Forces. We also expect to see unit price
increases in current and future single-year procurements for tactical, surveillance, rotary-
wing, and unmanned systems. An additional $1.0 billion dollar impact will affect aviation
supporting elements impacting trainers and simulators, stand-up of the MV-22 Osprey depot-
level maintenance capability, ground support equipment, and spare parts for all for all
aircraft types/models/series. These supporting elements are key contributors to maintaining
the readiness of operational aircraft and aircrews.
Examples of the impacts due to a strict year-long CR include the inability to transition to an
MV-22 multi-year procurement, resulting in approximately $1.1 billion in additional
program cost to deliver the same number of aircraft; the inability to execute new starts for
KC-130J, which extends their delivery schedule; delayed development of the multi-
intelligence sensor causing a one-year delivery delay to MQ-4C Triton unmanned aircraft;
and delays in fielding radar and infra-red search and track upgrades for F/A-18 aircraft.
Current CR restrictions and potential sequestration-driven decreases to naval aviation
readiness would impact Fleet Replacement Squadrons (FRS), reduce rotary-wing readiness
in support of swarming boat defense, airborne mine counter-measures and anti-submarine
warfare, and cancel aircraft and engine depot inductions in the 3rd/4th quarter of Fiscal Year
2013. Depot cancellations jeopardize planned aircraft modernization, mission system
software capability improvements, fatigue-life management, depot support, and our flight
hour program.
Aviation depot maintenance is critical to the long-term health of the force and our ability to
meet mission tasking for both the Navy and Marine Corps. The combined impacts of full-
year CR restrictions and sequestration on the operation and maintenance of Navy aircraft will
be to degrade mission readiness, both to our Carrier Air Wings and other critical tactical
helicopter and maritime patrol aircraft. The cancelling of depot engine and engine module
inductions during the 3rd/4th quarter will impact engine and engine module inventories
necessary for flight-line aircraft, spare parts, and war-time reserve.
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Similarly, Marine Corps readiness will be degraded. Beyond twelve-months, we project
impact to all Marine Corps home-station fixed-wing units. Specifically, USMC F/A-18
fixed-wing squadrons will have, on average, approximately only five of twelve assigned
aircraft on the ramp due to aviation depot shutdowns. Causing further concern is that an
extended CR, combined with sequestration, could impact our ‘next-to-deploy’ and some
deployed forces. Across the DoN, there will be a total of 327 aircraft and over 1,200 engine
modules that will miss induction in the 3rd/4th quarter of Fiscal Year 2013 due to CR and
sequestration, with several years required to recover the backlog. If the forecast impacts were
to occur, we would not be able to recover in a timely manner, even if funding were restored.
Our flight hour program is critical to maintaining our near-term ability to safely and
effectively meet tasking. Decreasing flight hours raises the risk to flight safety and aircrew
proficiency. For example, in non-deployed Marine Corps F/A-18 squadrons, pilots will
average seven flight hours per month, well below the historically proven average of fifteen
flight hours per pilot required to maintain safe flight and minimum aircrew proficiency.
The entirety of the Marine Corps Fiscal Year 2013 ground material modernization
investment is only $2.5 billion, comprising 12 percent of the baseline budget. Further
reductions in ground investment accounts, although proportional to the other services in
terms of a percentage reduction, will have disproportional impact on Marine Corps
modernization and readiness, particularly after a decade of increased operational tempo. The
impending sequestration will cause a cut of over $850 million dollars and delay efforts of
multiple ground programs directly impacting delivery of future capabilities. Examples
include reduced procurement and installation of safety and force protection modification kits
on both the Medium Tactical Vehicle Replacement and Logistics Vehicle System
Replacement trucks which will decrease overall fleet capability. Program delays to the
Amphibious Combat Vehicle will result in the Marines being required to operate and
maintain the already 40-year old Assault Amphibious Vehicle for at least the next decade.
Due to sequestration our weapons and ammo procurement accounts will be reduced by
approximately $450 million dollars. Impacts will occur to sea-strike and sea-shield weapons
procurement that include a reduction of over 200 air-launched weapons for air-to-air and air-
to-ground combat; more than 50 sea-launched weapons, including our front-line, deep-strike
land-attack weapons; and nearly all of our ammo and direct attack munitions accounts. Since
many of our weapons programs are already at minimum sustaining rates, further quantity
reductions will jeopardize the supplier base and drive higher unit production costs.
Additionally, we will reduce procurement of acoustic device countermeasure systems
impacting ship torpedo defense and reduce systems engineering and technical assistance
oversight of our Mobile User Objective System (MUOS).
Early research, development, test and evaluation is integral to weapon system development.
These efforts will be impacted by sequestration, resulting in reductions totaling more than
$1.6 billion dollars. Cuts will occur in university research initiatives, applied research, in-
house laboratories, and the research and development for major acquisition programs.
Acquisition program impacts include:
• Delays in Joint Strike Fighter at-sea testing due to postponement of required ship
modifications, air-ship integration activities, and reduced progress on development of a
deployable Autonomous Logistics Information System;
• A two-year delay in the MQ-4/Triton Unmanned Air System;
• Delays in CH-53K development; and
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• Delays in the Multi-Stage Supersonic Target impacting completion of operational testing
for Nuclear Aircraft Carriers, Standard Missile-2, Rolling Airframe Missile, Evolved Sea
Sparrow Missile, Ship Self Defense System, Littoral Combat Ship, Amphibious Assault
Ships (LHA), and DDG 1000.
All of these delays drive cost increases into the programs and result in less capability
delivered for each defense dollar spent.
Sequestration will impact our nuclear aircraft carrier force structure and the one-year CR
impacts contract awards for carrier refueling. Specifically, the current CR would delay the
contract award for the next Ford Class carrier, JOHN F. KENNEDY (CVN 79) and
sequestration would further slow construction, which would result in a delivery delay.
Current CR funding limitations would delay the completion of Nuclear Refueling Complex
Overhaul (RCOH) for USS THEODORE ROOSEVELT (CVN 71), the start of RCOHs for
USS ABRAHAM LINCOLN (CVN 72), and the defueling of USS ENTERPRISE (CVN
65). Given the short time available between sequential dry-docks, the CVN 72 and CVN 65
delays will also likely cause day-for-day impacts to the follow-on CVN 73 RCOH. The CVN
72 and CVN 73 delays will not be recoverable.
Industrial Base
Sequestration’s shadow engenders large uncertainties for the DoN as a whole and in
particular our defense industrial base. We have observed prior disruptions to industry
resulting in a loss of talent, a loss of learning, and a reduction to quality.
As Secretary Panetta has stated, sequestration also puts at risk a defense strategy established,
in part, to ensure the United States maintains its industrial base and is not driven to contract
with overseas companies to keep its technological edge.
For the DoN, sequestration will impact all 50 states – from prime contractors, to the supplier
base, and to the scientific, engineering, and technical services sectors. Assuming a nine-
percent sequestration reduction for the March 1 and March 27 potential orders combined, we
project industry contract awards will be reduced by approximately $6.7B in Fiscal Year
2013.
Delayed weapon system production and cancelled maintenance and repair will immediately
impact aircraft, missile, and land system manufacturers and our military industrial supplier
base. The projected loss of work in Fiscal Year 2013 alone will further stress smaller
businesses that provide supplies and services to major manufacturers which have already
been negatively impacted due to the general downward trend in defense spending. Many
small businesses, which are often the sole-source for aircraft, missile, and land-system
components, may be driven to shut down if meaningful disruptions to planned workload
occur. Once these companies, their engineers and skilled workers move on to other work,
they are hard and sometimes impossible to reconstitute, even if our national security requires
it. With many weapon systems already at minimum sustaining rates and extended production
runs, we are continually faced with the challenges of parts obsolescence that will be further
exacerbated by sequestration and year-long CR disruptions.
What cannot be measured is the percentage of the supplier base that has decided, or will
decide, that it is no longer in their economic best interests to participate in the defense sector
due to business base uncertainties driven by frequent CRs, sequestration, and the prospect of
nine years of continuing budget uncertainty. When suppliers determine that they can no
longer rely on future work, or conclude that the regulatory and contractual environment is
unavailing to a reasonably predictable business base, they will adapt and may turn to other
economic sectors.
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SUMMARY
We ask that Congress act quickly to eliminate the threats posed by sequestration and a year-
long CR by developing a coherent, balanced approach to deficit reduction that addresses our
national security interests. The Department requests Congress pass a Fiscal Year 2013
Defense Appropriations bill and eliminate sequestration. If that course of action proves
untenable, we request Congress at least act quickly to modify the CR to help us get the funds
in the correct accounts, and allow for new starts, rate increases, and quantity variations that
address our Fiscal Year 2013 CR-related readiness shortfalls and acquisition requirements.
Such actions related to the CR; however, will do little to mitigate the significant cuts
required by sequestration.
We understand the importance of resolving our fiscal challenges to ensure our nation’s
security and future prosperity and look forward to working with Congress to ensure our
Navy and Marine Corps remain the world’s preeminent maritime and expeditionary force.
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Appendix G. January 25, 2013, Navy Memorandum
on Potential CR and Sequester Impacts
This appendix reprints a January 25, 2013, Navy memorandum on potential impacts of a year-
long continuing resolution (CR) and sequestration.67 The memorandum begins on the next page.
67 The memorandum was posted at InsideDefense.com (subscription required) and other internet sites.
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Appendix H. February 15, 2013, Navy Briefing
Slides on Potential CR and Sequester Impacts
This appendix reprints February 15, 2013, Navy briefing slides on potential impacts of a year-
long continuing resolution (CR) and sequestration.68 The briefing slides begin on the next page.
68 The briefing slides were posted at InsideDefense.com (subscription required).
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Author Contact Information
Ronald O'Rourke
Specialist in Naval Affairs
rorourke@crs.loc.gov, 7-7610
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