Navy Force Structure and Shipbuilding Plans:
Background and Issues for Congress
November 28, 2022
Congressional Research Service
https://crsreports.congress.gov
RL32665

Navy Force Structure and Shipbuilding Plans: Background and Issues for Congress

Summary
The current and planned size and composition of the Navy, the annual rate of Navy ship
procurement, the prospective affordability of the Navy’s shipbuilding plans, and the capacity of
the U.S. shipbuilding industry to execute the Navy’s shipbuilding plans have been oversight
matters for the congressional defense committees for many years.
In December 2016, the Navy released a force-structure goal that calls for achieving and
maintaining a fleet of 355 ships of certain types and numbers. The 355-ship goal was made U.S.
policy by Section 1025 of the FY2018 National Defense Authorization Act (H.R. 2810/P.L. 115-
91 of December 12, 2017). The 355-ship goal predates the Trump and Biden Administrations’
national defense strategies and does not reflect the new fleet architecture (i.e., new mix of ships)
that the Navy wants to shift toward in coming years. This new fleet architecture is to feature a
smaller proportion of larger ships, a larger proportion of smaller ships, and a new third element of
large unmanned vehicles (UVs). The Navy and the Department of Defense (DOD) have been
working since 2019 to develop a successor for the 355-ship force-level goal that would reflect
current national defense strategy and the new fleet architecture.
The Navy’s FY2023 30-year (FY2023-FY2052) shipbuilding plan, released on April 20, 2022,
presents the results of three studies on possibilities for the Navy’s successor force-level goal.
These studies call for a future Navy with 321 to 404 manned ships and 45 to 204 large UVs. A
long-range Navy shipbuilding document that the Navy released on June 17, 2021, and which
reflects some of these studies, outlined a future Navy that would include 321 to 372 manned ships
and 77 to 140 large UVs. A congressionally mandated Battle Force Ship Assessment and
Requirement (BFSAR) report that reportedly was provided to Congress in July 2022 reportedly
calls for a Navy with 373 battle force ships.
The Navy’s proposed FY2023 budget requests $27.9 billion in shipbuilding funding for, among
other things, the procurement of eight new ships, including two Virginia (SSN-774) class attack
submarines, two Arleigh Burke (DDG-51) class destroyers, one Constellation (FFG-62) class
frigate, one LPD-17 Flight II class amphibious ship, one John Lewis (TAO-205) class oiler, and
one Navajo (TATS-6) class towing, salvage, and rescue ship. The Navy’s FY2023 budget
submission shows a ninth ship—the amphibious assault ship LHA-9—as also being requested for
procurement in FY2023. Consistent with both prior-year congressional authorization and
appropriation action and Section 126 of the FY2021 National Defense Authorization Act (NDAA)
(H.R. 6395/P.L. 116-283 of January 1, 2021), CRS reports on Navy shipbuilding programs,
including this report, treat LHA-9 as a ship that Congress procured (i.e., authorized and provided
procurement—not advance procurement [AP]—funding for) in FY2021. Navy officials have
described the listing of LHA-9 in the Navy’s FY2023 budget submission as a ship being
requested for procurement in FY2023 as an oversight. The Navy’s proposed FY2023 budget also
proposes retiring 24 ships, including 9 relatively young Littoral Combat Ships (LCSs).
The FY2023 30-year (FY2023-FY2052) shipbuilding plan released on April 20, 2022, includes
three potential 30-year shipbuilding profiles and resulting 30-year force-level projections,
referred to as Alternatives 1, 2, and 3. Alternatives 1 and 2 assume no real (i.e., above-inflation)
growth in shipbuilding funding beyond the level to be attained over the five-year period FY2023-
FY2027, while Alternative 3 assumes some amount of real growth in shipbuilding funds after
FY2027. Under Alternative 1, the Navy would reach 300 manned ships in FY2035 and grow to
316 manned ships by FY2052. Under Alternative 2, the Navy would reach 300 manned ships in
FY2035 and grow to 327 manned ships by FY2052. Under Alternative 3, the Navy would reach
300 manned ships in FY2033 and grow to 367 manned ships by FY2052.
Congressional Research Service

Navy Force Structure and Shipbuilding Plans: Background and Issues for Congress

Introduction
Issue for Congress
This report presents background information and issues for Congress concerning the Navy’s force
structure and shipbuilding plans. The current and planned size and composition of the Navy, the
annual rate of Navy ship procurement, the prospective affordability of the Navy’s shipbuilding
plans, and the capacity of the U.S. shipbuilding industry to execute the Navy’s shipbuilding plans
have been oversight matters for the congressional defense committees for many years.
The issue for Congress is whether to approve, reject, or modify the Navy’s force-level goal, its
proposed FY2023 shipbuilding program, and its longer-term shipbuilding plans. Decisions that
Congress makes on this issue can substantially affect Navy capabilities and funding requirements
and the U.S. shipbuilding industrial base.
CRS Reports on Individual Navy Shipbuilding Programs
Detailed coverage of certain individual Navy shipbuilding programs can be found in the
following CRS reports:
 CRS Report R41129, Navy Columbia (SSBN-826) Class 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 In Focus IF11826, Navy Next-Generation Attack Submarine (SSN[X])
Program: Background and Issues for Congress, by Ronald O'Rourke.
 CRS Report RS20643, Navy Ford (CVN-78) Class Aircraft Carrier Program:
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 In Focus IF11679, Navy DDG(X) Next-Generation Destroyer Program:
Background and Issues for Congress, by Ronald O'Rourke.
 CRS Report R44972, Navy Constellation (FFG-62) Class Frigate Program:
Background and Issues for Congress, by Ronald O'Rourke.
 CRS Report R43543, Navy LPD-17 Flight II and LHA Amphibious Ship
Programs: Background and Issues for Congress, by Ronald O'Rourke.
 CRS Report R46374, Navy Light Amphibious Warship (LAW) Program:
Background and Issues for Congress, by Ronald O'Rourke.
 CRS Report R43546, Navy John Lewis (TAO-205) Class Oiler Shipbuilding
Program: Background and Issues for Congress, by Ronald O'Rourke.
 CRS In Focus IF11674, Navy Next-Generation Logistics Ship (NGLS) Program:
Background and Issues for Congress, by Ronald O'Rourke.
 CRS In Focus IF11838, Navy TAGOS-25 (Previously TAGOS[X]) Ocean
Surveillance Shipbuilding Program: Background and Issues for Congress, by
Ronald O'Rourke.
 CRS Report R45757, Navy Large Unmanned Surface and Undersea Vehicles:
Background and Issues for Congress, by Ronald O'Rourke.
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Background
Navy’s Force-Level Goal
Navy’s Existing (355-Ship) Force-Level Goal
355-Ship Goal Released in December 2016
The Navy’s existing force-level goal, which the Navy released on December 15, 2016, calls for
achieving and maintaining a fleet of 355 manned ships of the types and numbers shown in Table
1.1
Table 1. 355-Ship Force-Level Goal
Ship Category
Number of ships
Ballistic missile submarines (SSBNs)
12
Attack submarines (SSNs)
66
Aircraft carriers (CVNs)
12
Large surface combatants (i.e., cruisers [CGs] and destroyers [DDGs])
104
Small surface combatants (i.e., frigates [FFGs], Littoral Combat Ships, and mine warfare ships)
52
Amphibious ships
38
Combat Logistics Force (CLF) ships (i.e., at-sea resupply ships)
32
Command and support ships
39
TOTAL
355
Source: U.S. Navy, Report to Congress on the Annual Long-Range Plan for Construction of Naval Vessels for Fiscal Year
2020, Table A-1, p. 10.
355-Ship Fleet Is a Goal to Be Attained in the Future
The 355-ship fleet is a goal to be attained in the future. As shown in Table G-1, the actual size of
the Navy in recent years has generally been between 270 and 300 ships. Increasing the numerical
size of the Navy from 300 ships to 355 would equate to an increase of about 18%.
355-Ship Goal Made U.S. Policy by FY2018 NDAA
Congress made the 355-ship goal U.S. policy via Section 1025 of the FY2018 National Defense
Authorization Act, or NDAA (H.R. 2810/P.L. 115-91 of December 12, 2017).2

1 For previous Navy force-level goals, see Appendix A.
2 Section 1025 of P.L. 115-91 states
SEC. 1025. Policy of the United States on minimum number of battle force ships.
(a) Policy.—It shall be the policy of the United States to have available, as soon as practicable, not
fewer than 355 battle force ships, comprised of the optimal mix of platforms, with funding subject
to the availability of appropriations or other funds.
(b) Battle force ships defined.—In this section, the term “battle force ship” has the meaning given
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355-Ship Goal Resulted from a Force Structure Assessment (FSA) Done in 2016
The 355-ship force-level goal is the result of a Force Structure Assessment (FSA) conducted by
the Navy in 2016. An FSA is an analysis in which the Navy solicits inputs from U.S. regional
combatant commanders (CCDRs) regarding the types and amounts of Navy capabilities that
CCDRs deem necessary for implementing the Navy’s portion of the national military strategy,
and then translates those CCDR inputs into required numbers of ships, using current and
projected Navy ship types. The analysis takes into account Navy capabilities for both warfighting
and day-to-day forward-deployed presence.3
The Navy in the past has a new FSA or an update to the existing FSA every few years, as
circumstances required, to determine its force-level goal. Previous Navy force-level goals that
resulted from earlier FSA are shown in Appendix A.
Navy’s Force-Level Goal Is Not Just a Single Number
Although the result of an FSA is often reduced for convenience to single number (e.g., 355 ships),
FSAs take into account a number of factors, including types and capabilities of Navy ships,
aircraft, unmanned vehicles, and weapons, as well as ship homeporting arrangements and
operational cycles. Thus, although the number of ships called for by an FSA might appear to be a
one-dimensional figure, it actually incorporates multiple aspects of Navy capability and capacity.
355-Ship Figure Includes Only Manned Ships
The 355-ship force-level goal, like previous Navy force-level goals, is a figure for manned ships
only. The Navy has operated smaller unmanned surface vehicles (USVs) and unmanned
underwater vehicles (UUVs) for many years, but because these unmanned vehicles (UVs) are
launched from manned ships to act essentially as extensions of the manned ships, they have not
been considered ships in their own right and consequently have not been included in the top-level
expression of the Navy’s force-level goal or the publicly cited figure for the number of ships in
the Navy.
Navy’s Next Force-Level Goal May Include Large Unmanned Vehicles (UVs)
In the years since the 2016 FSA, the Navy has developed plans to acquire large USVs and UUVs.
Because of their size and projected capabilities, these large UVs are to be deployed directly from
pier, rather than from manned ships, to perform missions that might otherwise be assigned to
manned ships and submarines.4 In view of this, the Navy’s next force-level goal may include
separate numbers for manned ships and large UVs.

the term in Secretary of the Navy Instruction 5030.8C.
The term battle force ships in the above provision refers to the ships that count toward the quoted size of the Navy in
public policy discussions about the Navy. The battle force ships method for counting the number of ships in the Navy
was established in 1981 by agreement between the Secretary of the Navy and the Secretary of Defense, and has been
modified somewhat over time, in part by Section 1021 of the Carl Levin and Howard P. “Buck” McKeon National
Defense Authorization Act for Fiscal Year 2015 (H.R. 3979/P.L. 113-291 of December 19, 2014).
3 For further discussion, see U.S. Navy, Executive Summary, 2016 Navy Force Structure Assessment (FSA), December
15, 2016, pp. 1-2.
4 For further discussion of these large UVs, see CRS Report R45757, Navy Large Unmanned Surface and Undersea
Vehicles: Background and Issues for Congress, by Ronald O'Rourke.
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Navy’s Next Force-Level Goal
Release of Navy’s Next Force-Level Goal Delayed Since Late 2019
The 355-ship goal predates the Trump and Biden Administrations’ national defense strategies and
does not reflect the new fleet architecture (i.e., new mix of ships) that the Navy wants to shift
toward in coming years. As discussed further in the next section, this new fleet architecture is to
feature a smaller proportion of larger ships, a larger proportion of smaller ships, and a new third
element of large unmanned vehicles (UVs). The Navy and the Department of Defense (DOD)
have been working since 2019 to develop a successor for the 355-ship force-level goal that would
reflect current national defense strategy and the new fleet architecture. The conclusion of this
work and the release of its results to Congress have been delayed repeatedly since late 2019.
Next Navy Force-Level Goal Will Introduce More Distributed Fleet Architecture
Remarks from Navy and DOD officials since 2019 have indicated that the Navy’s next force-
level goal will introduce a once-in-a-generation change in fleet architecture, meaning basic the
types of ships that make up the Navy and how these ships are used in combination with one
another to perform Navy missions. This new fleet architecture is to be more distributed than the
fleet architecture reflected in the 355-ship goal or previous Navy force-level goals. In particular,
the new fleet architecture is expected to feature
 a smaller proportion of larger ships (such as large-deck aircraft carriers, cruisers,
destroyers, large amphibious ships, and large resupply ships);
 a larger proportion of smaller ships (such as frigates, corvettes, smaller
amphibious ships, smaller resupply ships, and perhaps smaller aircraft carriers);
and
 a new third tier of surface vessels about as large as corvettes or large patrol craft
that will be either lightly manned, optionally manned, or unmanned, as well as
large UUVs.
Navy and DOD leaders believe that shifting to a more distributed fleet architecture is
 operationally necessary, to respond effectively to the improving maritime anti-
access/area-denial (A2/AD) capabilities of other countries, particularly China;5

5 See, for example, David B. Larter, “With China Gunning for Aircraft Carriers, US Navy Says It Must Change How It
Fights,” Defense News, December 6, 2019; Arthur H. Barber, “Redesign the Fleet,” U.S. Naval Institute Proceedings,
January 2019. Some observers have long urged the Navy to shift to a more distributed fleet architecture, on the grounds
that the Navy’s current architecture—which concentrates much of the fleet’s capability into a relatively limited number
of individually larger and more expensive surface ships—is increasingly vulnerable to attack by the improving A2/AD
capabilities (particularly anti-ship missiles and their supporting detection and targeting systems) of potential
adversaries, particularly China. Shifting to a more distributed architecture, these observers have argued, would
•
complicate an adversary’s targeting challenge by presenting the adversary with a larger number of Navy units
to detect, identify, and track;
•
reduce the loss in aggregate Navy capability that would result from the destruction of an individual Navy
platform;
•
give U.S. leaders the option of deploying USVs and UUVs in wartime to sea locations that would be
tactically advantageous but too risky for manned ships; and
•
increase the modularity and reconfigurability of the fleet for adapting to changing mission needs.
For more on China’s maritime A2/AD capabilities, see CRS Report RL33153, China Naval Modernization:
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 technically feasible as a result of advances in technologies for UVs and for
networking widely distributed maritime forces that include significant numbers
of UVs; and
 affordable—no more expensive, and possibly less expensive, than the current
fleet architecture for a given level of overall fleet capability, so as to fit within
expected future Navy budgets.
Regarding the first point above, shifting to a more distributed force architecture, Navy and
Marine Corps officials have indicated, will support implementation of the Navy and Marine
Corps’ new overarching operational concept, called Distributed Maritime Operations (DMO), and
a supporting Marine Corps operational concept called Expeditionary Advanced Base Operations
(EABO).6 A key aim of DMO and EABO is to improve the ability of the Navy and Marine Corps
to counter China’s improving maritime military capabilities.
Some elements of the Navy’s new, more distributed fleet architecture have been reflected in the
Navy’s budget submissions since FY2021, including the following:
 procurement of FFG-62-class frigates;7
 development of a smaller amphibious warship called the Light Amphibious
Warship (LAW);8
 development of a smaller resupply ship called the Next-Generation Medium
Logistics Ship;9
 development of two types of larger USVs—Large USVs (LUSVs) and Medium
USVs (MUSVs);10 and
 procurement of large UUVs called Extra Large UUVs (XLUUVs).11
For additional background information on the effort in 2019 and 2020 to develop a new Navy
force-level goal, see Appendix H.

Implications for U.S. Navy Capabilities—Background and Issues for Congress, by Ronald O'Rourke.
6 For more on DMO, see, for example, Barry Rosenberg, “Distributed Maritime Operations: Making Ships, Subs, And
Platforms Nodes On A Network,” Breaking Defense, August 3, 2021; Edward Lundquist, “DMO is Navy’s Operational
Approach to Winning the High-End Fight at Sea,” Seapower, February 2, 2021. For more on EABO, see CRS Report
R46374, Navy Light Amphibious Warship (LAW) Program: Background and Issues for Congress, by Ronald O'Rourke.
7 For more on the FFG-62 program, see CRS Report R44972, Navy Constellation (FFG-62) Class Frigate Program:
Background and Issues for Congress, by Ronald O'Rourke.
8 For more on the LAW program, see CRS Report R46374, Navy Light Amphibious Warship (LAW) Program:
Background and Issues for Congress, by Ronald O'Rourke.
9 For more on the next-generation Medium Logistics Ship, see, for example, Megan Eckstein, “Navy Researching New
Class of Medium Amphibious Ship, New Logistics Ships,” USNI News, February 20, 2020; Rich Abott, “FY 2021
Request Starts Work on Future Amphibs and Logistics Ships,” Defense Daily, February 20, 2020; Justin Katz, “Navy
Announces ‘Next Generation Logistics Ship’ Program with June 25 Industry Day,” Inside Defense, May 14, 2020; Paul
McLeary, “No Shipbuilding Plan, But Navy Works On New Ships To Counter China,” Breaking Defense, May 18,
2020.
10 For more on the LUSV and XLUUV programs, see CRS Report R45757, Navy Large Unmanned Surface and
Undersea Vehicles: Background and Issues for Congress, by Ronald O'Rourke.
11 For more on the XLUUV program, see CRS Report R45757, Navy Large Unmanned Surface and Undersea
Vehicles: Background and Issues for Congress, by Ronald O'Rourke.
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Navy Force Structure and Shipbuilding Plans: Background and Issues for Congress

December 9, 2020, Long-Range Navy Shipbuilding Document
On December 9, 2020, the Navy released a long-range Navy shipbuilding document that
presented the Trump Administration’s emerging successor to the 355-ship force-level goal. The
document called for a Navy with a more distributed fleet architecture, including 382 to 446
manned ships and 143 to 242 large UVs.12
June 17, 2021, Long-Range Navy Shipbuilding Document
On June 17, 2021, the Navy released a long-range Navy shipbuilding document that presented the
Biden Administration’s emerging successor to the 355-ship force-level goal. The document called
for a Navy with a more distributed fleet architecture, including 321 to 372 manned ships and 77
to 140 large UVs.13 The document stated that
As detailed in the 9 December 2020 Report to Congress on the Annual Long-Range Plan
for Construction of Naval Vessels, the Department [of the Navy] previously completed
significant analytic work with the Integrated Naval Force Structure Assessment (INFSA)
and the Future Naval Force Study (FNFS). Analysis continues that will further define the
capabilities required to maintain military advantage in peer military competition over the
next several decades….
The Navy, working closely with the OSD [the Office of the Secretary of Defense] Director
of Cost Assessment and Program Evaluation (CAPE), continues to develop comparative
assessments of naval force structure options consistent with [the Biden Administration’s]
Interim National Security Strategic Guidance14 and designed to maximize the maritime
contribution to the joint force. The results of these efforts and ongoing experimentation
and prototyping will be reflected in the FY2023 shipbuilding plan.15
A September 2021 Congressional Budget Office (CBO) report estimated that the fleet envisioned
in the June 17, 2021, long-range Navy shipbuilding document would cost an average of between
$25.3 billion and $32.7 billion per year in constant FY2021 dollars to procure. These figures, the
report stated, are 10% to 43% higher the $22.9 billion in constant FY2021 dollars that Congress
has appropriated, on average, for all Navy shipbuilding activities over the preceding five years.16

12 U.S. Navy, Report to Congress on the Annual Long-Range Plan for Construction of Naval Vessels, December 2020,
23 pp.
13 U.S. Navy, Report to Congress on the Annual Long-Range Plan for Construction of Naval Vessels for Fiscal Year
2022, June 2021, 16 pp.
14 White House, Interim National Security Strategic Guidance, March 2021, 23 pp.
15 U.S. Navy, Report to Congress on the Annual Long-Range Plan for Construction of Naval Vessels for Fiscal Year
2022, June 2021, p. 3. The document similarly states on page 5 that
The Department [of the Navy] will submit a complete 30-year shipbuilding plan with the
President’s Budget for FY2023.
In the interim, the Department will continue to build on ongoing analysis, experimentation, testing,
prototyping, and the analytic results from force structure assessments, future fleet architectures, and
intelligence updates to refine required capabilities and characterize the technical and operational
risk of an objective battle force in military competition. This work will inform the content and
transition pace to the future force and be reflected in the FY2023 shipbuilding plan.
16 Congressional Budget Office, An Analysis of the Navy’s Fiscal Year 2022 Shipbuilding Plan, September 2021, p. 6.
The report was posted at the CBO website on September 16, 2021.
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February 18, 2022, Reported Remarks of Chief of Naval Operations
On February 18, 2022, in remarks at a conference, the Chief of Naval Operations, Admiral
Michael Gilday, reportedly stated that, based on analysis, he had concluded that the Navy needs a
fleet of 362 or more manned ships and about 150 large UVs to meet the Navy’s commitments
under the Biden Administration’s forthcoming national defense strategy.17
July 19, 2022, Press Report about New Navy Force-Level Goal
A July 19, press report stated
The Navy quietly slipped a new, classified assessment on the number of ships the service
needs to meet its missions around the world to Congress earlier this month. The report calls
for a battle force of 373 ships—75 more than in the current fleet.
Dubbed the Battle Force Ship Assessment and Requirement, the Fiscal Year 2021 defense
authorization bill called for the Navy to generate the report and deliver it directly to
Congress.
“The Navy’s Battle Force Ship Assessment and Requirement (BFSAR) report determined
that a battle force of 373 ships is required to meet future campaigning and warfighting
demands. The report is classified and was submitted to Congress,” reads a statement from
the service provided to USNI News.
Outside of the fleet total, the service did not provide an unclassified summary of the force
structure. In prior years, the FSA has included an unclassified summary of the required
quantities for each type of battleforce ship in the fleet....
The requirement in the bill was designed to have the report bypass the Office of the
Secretary of Defense and go directly to Congress, several legislative sources have told
USNI News....
The force structure will go through more tweaks before another revision is released later
this year.
“The Navy is expected to complete a second BFSAR later this year, which will reflect new
analytic work, changes to force design, and the impacts of the 2022 National Defense
Strategy released in March on future Navy battle force structure,” reads the Navy
statement.18
July 26, 2022, Release of CNO Navigation Plan 2022
On July 26, 2022, the Navy released a document, Chief of Naval Operations [CNO] Navigation
Plan 2022, that, similar to the above-discussed BFSAR, calls for a future fleet of 373 manned
ships, as well as about 150 large unmanned surface and underwater vehicles, with the 373
manned ships to include 12 ballistic missile submarines, 66 attack submarines, 12 nuclear-
powered aircraft carriers, 96 large surface combatants, 56 small surface combatants, 31 larger
amphibious ships, 18 smaller Light Amphibious Warships (LAWs), and 83 combat logistics,
command, and support ships.19

17 See Sam LaGrone and Mallory Shelbourne, “CNO Gilday: ‘We Need a Naval Force of Over 500 Ships,’” USNI
News, February 18, 2022; Justin Katz, “CNO Lays Out Future Fleet He Wants: 500 ships, 12 Carriers, 150 Unmanned
Vessels,” Breaking Defense, February 18, 2022; Richard R. Burgess, “CNO Is ‘Sighted on a Bigger, More Capable
Navy,’” Seapower, February 22, 2022.
18 Sam LaGrone, “New Navy Fleet Study Calls for 373 Ship Battle Force, Details are Classified,” USNI News, July 19,
2020.
19 U.S. Navy, Chief of Naval Operations Navigation Plan 2022, undated, released July 26, 2022, p. 10.
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355-Ship Goal Compared to Emerging New Force-Level Goals
Table 2 compares the 355-ship force-level goal to the emerging force-level goals discussed in the
above sections.
Table 2. 355-Ship Goal Compared to Emerging New Force-Level Goals
Reported
Trump
Biden
remarks of
Adminis-
Adminis-
Chief of
BFSAR and
tration
tration
Naval
CNO
December
June 17,
Operations,
Navigation
355-ship
9, 2020,
2021,
February
Plan July
Ship type
goal
document
document
18, 2022
2022
Ballistic missile submarines (SSBNs)
12
12
12
12
12
Attack submarines (SSNs)
66
72 to 78
66 to 72a
70
66
Aircraft carriers
12
n/ab
9 to 11
12
12
Large aircraft carriers (CVNs)
12
8 to 11b
n/a
12
12
Light aircraft carriers (CVLs)
0
0 to 6 c
n/ad
0
0
Large surface combatants (cruisers and
104
73 to 88
63 to 65
60
96
destroyers)
Small surface combatants (frigates and
52
60 to 67
40 to 45
50
56
Littoral Combat Ships [LCSs])
Amphibious ships
38
61 to 67
48 to 63
58 or 59
49
(or more)
Large-deck (LHA/LHD)
12
9 to 10
8 to 9
9
31
LPD-type
26
n/a
16 to 19
19 or 20
Light Amphibious Warships (LAWs)
0
n/a
24 to 35
30 (or more)e
18
LPD-type and LAWs combined
26
52 to 57
40 to 44
49 or 50
n/a
(or more)
Combat Logistics Force (CLF) ships
32
69 to 87f
56 to 75g
~100
82
Command and support ships
39
27 to 30
27 to 29
Subtotal manned ships
355
382 to 446
321 to 372
~362 or
373
~363
(or more)
Unmanned and optionally manned ships
0
143 to 242
77 to 140
~150
~150
Large and medium unmanned
0
119 to 166
59 to 89
n/a
n/a
surface vessels (LUSVs and MUSVs)
Extra-large unmanned underwater
0
24 to 76
18 to 51
n/a
n/a
vehicles (XLUUVs)
TOTAL manned and unmanned
355
525 to 688
398 to 512
~512 or
~523
ships
~513
(or more)
Sources: Table prepared by CRS based on U.S. Navy data and, for the final column, Sam LaGrone and Mallory
Shelbourne, “CNO Gilday: ‘We Need a Naval Force of Over 500 Ships,’” USNI News, February 18, 2022; Justin
Katz, “CNO Lays Out Future Fleet He Wants: 500 ships, 12 Carriers, 150 Unmanned Vessels,” Breaking Defense,
February 18, 2022; Richard R. Burgess, “CNO Is ‘Sighted on a Bigger, More Capable Navy,’” Seapower, February
22, 2022; Sam LaGrone, “New Navy Fleet Study Calls for 373 Ship Battle Force, Details are Classified,” USNI
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News, July 19, 2020; U.S. Navy, Chief of Naval Operations Navigation Plan 2022, undated, released July 26, 2022,
p. 10.
Notes: n/a = not available. BFSAR is the Battle Force Ship Assessment and Requirement reportedly provided to
Congress in July 2022.
a. The document states that the range of 66 to 72 includes Large Payload Submarines—the Navy’s planned
next-generation successor to its four current cruise missile submarines (SSGNs).
b. The document states: “Lower [end of the CVN] range may be enabled by acquisition of cost-effective CVL.”
c. The document states: “Further study of cost-effective CVL capabilities and capacity required.”
d. The document states: “New capability concepts like a light aircraft carrier continue to be studied and
analyzed to ful y il uminate their potential to execute key mission elements in a more distributed manner
and to inform the best mix of a future force.”
e. As reported in the USNI News article of February 18, 2022. The Breaking Defense article of February 18,
2022, reported the figure as 20 to 30.
f.
The document states: “Includes Next Generation Logistic Ships (NGLS). Logistics force size/mix subject to
on-going analysis.”
g. The document states: “Includes the future next generation logistics ship.”
April 2022 Navy Report on FY2023 30-Year Shipbuilding Plan Presents Results of
Studies on Potential New Force-Level Goals
The Navy’s FY2023 30-year (FY2023-FY2052) shipbuilding plan, released on April 20, 2022,20
presents the results of three studies on possibilities for the Navy’s successor force-level goal. As
shown in Figure 1, these studies call for a future Navy with 321 to 404 manned ships and 45 to
204 large UVs.
Navy’s FY2023 Five-Year and 30-Year Shipbuilding Plans
FY2023 Five-Year Shipbuilding Program
The Navy’s proposed FY2023 budget requests $27.9 billion in shipbuilding funding for, among
other things, the procurement of eight new ships, including two Virginia (SSN-774) class attack
submarines, two Arleigh Burke (DDG-51) class destroyers, one Constellation (FFG-62) class
frigate, one LPD-17 Flight II class amphibious ship, one John Lewis (TAO-205) class oiler, and
one Navajo (TATS-6) class towing, salvage, and rescue ship.
The Navy’s FY2023 budget submission shows a ninth ship—the amphibious assault ship LHA-
9—as also being requested for procurement in FY2023. Consistent with both prior-year
congressional authorization and appropriation action and Section 126 of the FY2021 National
Defense Authorization Act (NDAA) (H.R. 6395/P.L. 116-283 of January 1, 2021), CRS reports on
Navy shipbuilding programs, including this report, treat LHA-9 as a ship that Congress procured
(i.e., authorized and provided procurement—not advance procurement [AP]—funding for) in

20 U.S. Navy, Report to Congress on the Annual Long-Range Plan for Construction of Naval Vessels for Fiscal Year
2023, April 2022 (released April 20, 2022), 28 pp.
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FY2021.21 Navy officials have described the listing of LHA-9 in the Navy’s FY2023 budget
submission as a ship being requested for procurement in FY2023 as an oversight.22
Figure 1. Navy Table Summarizing Studies on Future Navy Force-Level Goal
As shown in Navy’s FY2023 30-Year Shipbuilding Plan

Source: U.S. Navy, Report to Congress on the Annual Long-Range Plan for Construction of Naval Vessels for Fiscal Year
2023, April 2022 (released April 20, 2022), p. 4.
Notes: INFSA = Integrated Naval Force Structure Assessment. FNFS = Future Naval Force Study. FFA = Future
Fleet Architecture.
As shown in Table 3, excluding LHA-9, the Navy’s proposed five-year (FY2023-FY2027)
shipbuilding plan includes a total of 50 ships, or an average of 10 ships per year. Assuming a 35-
year weighted average expected service life for Navy ships, an average procurement rate of 10
ships per year, if maintained over the long run (i.e., over a period of roughly 35 years), would
eventually achieve and maintain a fleet of about 350 ships.

21 For additional discussion regarding the procurement date of LHA-9 and Section 126 of the FY2021 National Defense
Authorization Act (NDAA) (H.R. 6395/P.L. 116-283 of January 1, 2021), see CRS Report R43543, Navy LPD-17
Flight II and LHA Amphibious Ship Programs: Background and Issues for Congress, by Ronald O'Rourke. See also
Justin Katz, “ Navy’s Shipbuilding Request May Be ‘Violation of Law,’ Inhofe Warns,” Breaking Defense, March 29,
2022.
22 Source: Navy briefing on Navy’s proposed FY2023 budget for Congressional Budget Office and CRS, March 30,
2023.
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Table 3. FY2023 Five-Year (FY2023-FY2027) Shipbuilding Plan

FY23-
FY23
FY27

(req.)
FY24 FY25 FY26 FY27 Total
Columbia (SSBN-826) class ballistic missile

1

1
1
3
submarine
Virginia (SSN-774) class attack submarine
2

2
2
2
2
10
Gerald R. Ford (CVN-78) class aircraft carrier

0
Arleigh Burke (DDG-51) class destroyer
2

2
2
2
2
10
FFG-62 frigate
1

2
1
2
1
7
LHA amphibious assault ship
*

0*
LPD-17 Fight II amphibious ship
1

1
Light Amphibious Warship (LAW)

1
1
2
4
Expeditionary Fast Transport (EPF) ship

0
John Lewis (TAO-205) class oiler
1

2
1
1
1
6
Next-Generation Logistics Ship (NGLS)

1
1
2
Submarine tender (AS[X])

1
1

2
TATS towing, salvage, and rescue ship
1

1
TAGOS(X) ocean surveillance ship

1
2
1
4
TOTAL
8

9
9
13
11
50
Source: Table prepared by CRS based on FY2023 Navy budget submission. *The Navy’s FY2023 budget
submission shows the amphibious assault ship LHA-9 as being requested for procurement in FY2023. Consistent
with both prior-year congressional authorization and appropriation action and Section 126 of the FY2021
National Defense Authorization Act (NDAA) (H.R. 6395/P.L. 116-283 of January 1, 2021), CRS reports on Navy
shipbuilding programs, including this report, treat LHA-9 as a ship that Congress procured (i.e., authorized and
provided procurement—not advance procurement [AP]—funding for) in FY2021. Navy officials have described
the listing of LHA-9 in the Navy’s FY2023 budget submission as a ship being requested for procurement in
FY2023 as an oversight.
FY2023 30-Year (FY2023-FY2052) Shipbuilding Plan
As shown in Figure 2, the FY2023 30-year (FY2023-FY2052) shipbuilding plan, released by the
Navy on April 20, 2022, includes three potential 30-year shipbuilding profiles, referred to as
Alternatives 1, 2, and 3, that diverge from one another after FY2027. Alternatives 1 and 2 assume
no real (i.e., above-inflation) growth in shipbuilding funding beyond the level to be attained over
the five-year period FY2023-FY2027, while Alternative 3 assumes some amount of real growth
in shipbuilding funds after FY2027. Since Figure 2 presents a table taken from a Navy document,
it reflects the amphibious assault ship LHA-9 as being requested for procurement in FY2023. As
discussed earlier, consistent with both prior-year congressional authorization and appropriation
action and Section 126 of the FY2021 National Defense Authorization Act (NDAA) (H.R.
6395/P.L. 116-283 of January 1, 2021), CRS reports on Navy shipbuilding programs, including
this report, treat LHA-9 as a ship that Congress procured (i.e., authorized and provided
procurement—not advance procurement [AP]—funding for) in FY2021. Navy officials have
described the listing of LHA-9 in the Navy’s FY2023 budget submission as a ship being
requested for procurement in FY2023 as an oversight.
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Figure 2. Alternative Shipbuilding Profiles in 30-Year Shipbuilding Plan
As shown in Navy’s FY2023 30-Year Shipbuilding Plan

Source: U.S. Navy, Report to Congress on the Annual Long-Range Plan for Construction of Naval Vessels for Fiscal Year
2023, April 2022 (released April 20, 2022), p. 15. Since this figure presents a table taken from a Navy document,
it reflects the amphibious assault ship LHA-9 as being requested for procurement in FY2023. Consistent with
both prior-year congressional authorization and appropriation action and Section 126 of the FY2021 National
Defense Authorization Act (NDAA) (H.R. 6395/P.L. 116-283 of January 1, 2021), CRS reports on Navy
shipbuilding programs, including this report, treat LHA-9 as a ship that Congress procured (i.e., authorized and
provided procurement—not advance procurement [AP]—funding for) in FY2021. Navy officials have described
the listing of LHA-9 in the Navy’s FY2023 budget submission as a ship being requested for procurement in
FY2023 as an oversight.
Projected Force Levels Under FY2023 30-Year Shipbuilding Plan
As shown in Figure 3, under all three alternatives presented in the FY2023 30-year shipbuilding
plan, the number of battle force ships in the Navy would decline from 294 at the end of FY2021
to 280 by the end of FY2027. This is in part because of the relatively large number of ships that
the Navy’s FY2023 budget submission proposes for retiring in FY2023-FY2027. As discussed
later in this report, this includes the proposed retirement of 24 ships in FY2023, including 9
relatively young Littoral Combat Ships (LCSs).
As shown in Figure 3, under Alternative 1, the Navy would reach 300 manned ships in FY2035
and grow to 316 manned ships by FY2052. Under Alternative 2, the Navy would reach 300
manned ships in FY2035 and grow to 327 manned ships by FY2052. Under Alternative 3, the
Navy would reach 300 manned ships in FY2033 and grow to 367 manned ships by FY2052.
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Figure 3. Projected Force Levels Under Alternative Shipbuilding Profiles
As shown in Navy’s FY2023 30-Year Shipbuilding Plan

Source: U.S. Navy, Report to Congress on the Annual Long-Range Plan for Construction of Naval Vessels for Fiscal Year
2023, April 2022 (released April 20, 2022), p. 16.
Issues for Congress
Potential issues for Congress concerning Navy shipbuilding relating to the Navy’s proposed
FY2023 budget include but are not necessarily limited to those discussed below.
Force-Level Goal to Replace 355-Ship Goal of 2016
One issue for Congress concerns the new ship force-level goal that is to replace the 355-ship goal
of 2016. As noted earlier, the 355-ship goal of 2016 predates the Trump and Biden
Administrations’ national defense strategies and does not reflect the new fleet architecture (i.e.,
new mix of ships) that the Navy wants to shift toward in coming years. Potential oversight
questions for Congress include the following:
 When does the Navy or the Office of the Secretary of Defense (OSD) intend to
release an updated and clearly defined new force-level goal to definitively
replace the 355-ship goal?
 Why have the Navy and OSD apparently been unable or unwilling since 2019 to
identify and release an updated and clearly defined new force-level goal to
definitively replace the 355-ship goal? Within DOD, who is responsible for
resolving in a timely manner a disagreement between OSD and the Navy
regarding the Navy’s force level goal? Does DOD have a clearly defined process
for resolving such a dispute in a timely manner?
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 In the absence of an updated, clearly defined, and definitive new force-level goal
reflecting the Biden Administration’s national defense strategy and the Navy’s
desire to shift to a more distributed fleet architecture, how well can Congress
 understand the Biden Administration’s goals concerning the future size and
composition of the Navy, and
 assess the Navy’s proposed FY2023 shipbuilding budget, five-year (FY2023-
FY2027) shipbuilding plan, and 30-year (FY2023-FY2052) shipbuilding
plan?
 Is the continued absence of an updated, clearly defined, and definitive new force-
level goal permitting the Administration to avoid stating its specific plans for the
Navy’s future and budgeting the funds needed to achieve and maintain a future
fleet of a specific size and composition?
 If the Navy and OSD do not identify and release an updated, clearly defined, and
definitive new force-level goal to replace the 355-ship goal, should Congress
consider the option of legislating a replacement force-level goal of its own
devising (including both a total number of ships and, within that total number,
required numbers for each ship category), and require DOD to budget the
funding needed to achieve such a fleet in a timely manner and maintain it
thereafter?
 How many Navy ships of what types and numbers will be needed to adequately
perform the Navy’s projected missions in coming years, particularly in light of
great power competition with China and Russia?
In connection with the final question above, an April 26, 2022, press report stated
While the U.S. Navy's new long-term shipbuilding plan lays out three options, service
leaders believe only one of those even comes close to building a fleet that can compete
with China, a Navy official said during a Senate hearing Tuesday [April 26]....
Sen. Josh Hawley, R-Missouri, asked point-blank whether the Navy is confident that each
of the three options provided “would allow it to meet the operational requirements for
deterring a Chinese fait accompli vis-à-vis Taiwan?”
In response, Vice Adm. Scott Conn, the deputy chief of naval operations for warfighting
requirements and capabilities, told Hawley that the Navy has “the most confidence in
alternative three,” and less confidence in the other two.
Conn added later that the third option gets the Navy closer to where it wants to be with the
fleet.23
Also in connection with the final question above, a May 12, 2022, press report stated
Should Russia and China launch competing world conflicts, the Navy is unprepared to fight
two wars in separate regions without additional ships, the service’s top officer told senators
on Thursday [May 12].
The current fleet of about 298 ships “is not sized to handle two simultaneous conflicts,”
Adm. Mike Gilday, the chief of naval operations, said during a hearing of the Senate Armed
Services Committee. “It’s sized to fight one and keep a second adversary in check, but in
terms of two all-out conflicts, we are not sized for that.”...

23 Caitlin M. Kenney, “Navy: Just One Shipbuilding Option Gets Closer To Desired Fleet,” Defense One, April 26,
2022.
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“What would the impact be on the Navy's ability to meet its operational requirements in
[Europe] if we had to withhold Navy forces from Europe in order to deter Chinese
aggression in [the Pacific]?” [Sen. Josh] Hawley said at the hearing.
Gilday said the Navy would be “challenged” to meet both needs.
“You’d have to take a look at how you squeeze the most out of the joint force that you have
and use it the best possible way,” he said.24
A July 24, 2022, press report stated
The Navy of the future needs 316 ships. Actually, make that 327. No, more like 367. You
know what? Let’s make it 373, or maybe even 500.
At different points this year, the Pentagon and Navy leaders have floated all five numbers
as the desired size of the Navy, the result of a high-stakes—and still raging—internal battle
among top Navy, Marine Corps and Pentagon leaders.
And the discord at the top has real-world consequences for America’s sea service, denying
lawmakers a number to shoot for as they figure out how many ships to buy in the fiscal
year that starts in October, and beyond.
At issue, according to six people with knowledge of internal discussions, is the desired
number of amphibious warships, which carry Marines and can launch warplanes and
landing craft.
On one end is Deputy Defense Secretary Kathleen Hicks, who is spearheading an effort to
cut the number of traditional, large-deck amphibs and invest in uncrewed ships and other
lighter vessels, the people said. But Hicks’ vision is at odds with plans put forth by Navy
and Marine Corps leaders, who want to keep dozens of the ships they say are a key
component to moving Marines and aircraft around the Indo-Pacific as the U.S. seeks to
deter an aggressive China.
The debate comes at a fraught time for the Navy as it struggles to grow the size of its fleet
amid a series of shipbuilding failures that have drained congressional confidence in the
service’s ability to both put new ships in the water and maintain the ships they have....
Some critics see the large ships as easy prey for Chinese long-range missiles, while being
too big to get close to the small island chains of the Pacific to safely put Marines ashore
and resupply them. Instead, the idea is for the Navy to get smaller, faster and develop more
uncrewed systems.
But Navy Secretary Carlos Del Toro, a Biden appointee and retired naval officer, has been
a proponent of keeping the number of amphibs around its current strength of 31, a vision
shared by Marine Corps Commandant Gen. David Berger who won support in Congress
this year to block Pentagon plans to have the fleet shrink to 25 ships in the coming years.
Yet Marine and Navy leaders are at odds with each other over another issue: Berger also
wants to add 35 new light amphibious warships to allow his Marines to move through
island chains more quickly while presenting less of a target. That’s a vision Navy
leadership has never fully supported.
Differing opinions at the top of the Pentagon and Navy leadership chains is nothing new.
Given the huge costs involved in designing and building new ships, the overall size and
shape of the fleet has always been a politically fraught issue. And the constantly shifting
global security dynamic often leads to clashes between the admirals and civilians at the
Pentagon and Capitol Hill.

24 Caitlin Doornbos, “The Navy Is Unprepared to Fight in Two Conflicts at Once with Current Fleet Size, the Service’s
Top Officer Tells Senators,” Stars and Stripes, May 12, 2022.
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But what is new is the lack of a united front in public when numbers are supplied to
Congress....
During the Trump administration, national security adviser Robert O’Brien and Defense
Secretary Mark Esper seized on the 355 figure—as Trump did in his presidential
campaign—but then oversaw successive budgets that actually cut shipbuilding funding by
billions of dollars. At one point in early 2020, Esper rejected the Navy’s annual
shipbuilding plan, taking control over the process and holding up its release for almost a
year, only to release it in December 2020—a month before Joe Biden moved into the White
House, all but ensuring they would be scrapped immediately by the new team.
The plan was also likely impossible to implement, calling for a fleet of over 500 ships by
2045, a dramatic increase from the 298 ships in service today. To get there, it proposed
building 82 new ships by 2026, doubling the Navy’s previous plan to manufacture 44 new
ships by 2025, a pace of building that would likely be unachievable for the U.S.
shipbuilding industry.
While that plan didn’t survive the transition between administrations, Chief of Naval
Operations Adm. Mike Gilday has continued to defend it well into the new administration,
saying as recently as February that it remains “the one that I’ve based my best advice on,”
even as he was proposing a new budget along with another new shipbuilding plan, which
incorporated nothing from Esper’s wishlist.
And through it all, Congress and the defense industry have grown tired of the Navy’s
shifting numbers. Putting forward a new shipbuilding plan every year makes it impossible
to maintain a stable supply line and keep ships rolling out of the shipyards, and the
constantly moving target confuses both lawmakers and contractors.
In April of this year, the Navy released its latest 30-year shipbuilding plan that contained
three options: 316 ships, 327 ships, and 367 ships, all with different assumptions over
budget and what kinds of ships were purchased. Then in June, the Navy sent Congress a
classified report saying its plans called for 373 ships, USNI News reported. But a Navy
official told POLITICO that the new report focused only on operational needs, and ignored
budgets and shipyard capacity, giving it no real connection to the realities of budgets or the
industrial base. The Navy plans to send an update of that report to the Hill this year.
Through it all, Gilday continues to insist that, given the Chinese threat, the Navy needs
more than 500 ships in the fleet.
“The mismatch on where the Biden Pentagon team and the Navy-Marine Corps [stand],
that’s the source of that tension,” said one person with knowledge of the internal
discussions, who, like others, asked for anonymity to speak candidly about the debate.
“[Hicks’] thesis and where she thinks the department needs to go does not necessarily
involve a Navy with larger numbers.”
There is friction not just between the Navy and Pentagon leadership, but within the service
as well. The Marine Corps’ plan for the light amphibious warship was pushed out of the
Navy shipbuilding budget two years in a row. The fiscal 2023 budget request shows the
new ship being funded in fiscal 2025—after Berger is slated to retire.
The move also throws cold water on Berger’s plan to give units of 75 Marines the flexibility
to carry a wide range of weapons with them at sea, including anti-ship missiles, drones and
supplies to rearm friendly forces.
That ship, however, is the cornerstone of the Marine Corps’ modernization priorities. The
Marine Corps envisions using the light amphibious warship to ferry Marines from beach
to beach while hiding in plain sight, as the new vessel is the size of other commercial ships.
The plan also has implications for the shipbuilding industrial base. Since the size of these
vessels is smaller compared to traditional amphibs, that opens the door for more
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prospective builders, including companies that are not equipped to build large military
vessels, to bid on the contract....
Complicating matters is the fact that the Biden administration has yet to put forth a nominee
for the top Navy acquisition job, which is currently held on a temporary basis by Tommy
Ross. Del Toro recently moved Ross, his former chief of staff, out of his front office
because the two do not see eye-to-eye on the future of Navy shipbuilding, two former DoD
officials said.
Instead, Ross was relocated to the acquisition job where he does not have authority to sign
off on major deals, the two people said.
Ross is more aligned with Hicks’ vision for the fleet, the people said.
“There is tension between Carlos and Tommy Ross and by extension between Del Toro
and Kath Hicks,” said one former Pentagon official familiar with the discussions. “Del
Toro wants to go a different direction and he feels like he’s being constrained by Kath
Hicks.”
Still, in his temporary role Ross does not have acquisition authority and is overseeing the
Navy’s $140 billion portfolio by name only, according to two internal memos announcing
the changes.
“I reserve the right to exercise any and all of the authorities temporarily assigned to you,”
Del Toro wrote in a May memo announcing Ross’s new title.
Instead that authority rests with Ross’ deputy, Jay Stefany, a 37-year career Navy civil
servant who entered the senior executive service in 2012. He is cleared to award contracts
over $100 million to a single vendor and approve contracts in the $100 million to $500
million range that bypass the traditional acquisition process using what’s known as other
transaction authority.
The differing views inside the Pentagon on the future of Navy shipbuilding is not a bad
thing, but leadership must come to a consensus, according to one of the people. What they
decide will set the tone for the industrial base, the person added.
But what is concerning, once a path is chosen, is that the Navy lacks a Senate-confirmed
acquisition executive to engage with industry to carry out the plan, the person said.
In the end, Congress will have the final say over how large the Navy budget is and how
many ships it can afford. While the Hill looks to pump tens of billions into President Joe
Biden’s latest defense budget, the Navy is hardly in their good graces given massive cost
overruns and schedule slippages on new ship programs over the past 20 years.25
An August 1, 2022, press report stated
In little more than five months, the shape of America’s future Navy fleet changed. Between
February and July, U.S. Navy leadership went from advocating for a modest fleet of 60
cruisers and destroyers to supporting a more robust vision of 96 large surface combatants
by 2045.
Nobody really knows what, exactly, pushed the Navy to favoring large combatants—a
rating traditionally comprised of high-value cruisers and destroyers. Neither the U.S.
Department of Defense, the Secretary of the Navy, nor America’s Chief of Naval
Operations, Admiral Mike Gilday, has offered taxpayers any real detail on what spurred
the Navy, after years of fretting over the relevance of large surface combatants, to redirect
at least $70 billion in future funding towards building bigger ships.

25 Lara Seligman, Lee Hudson, and Paul McLeary, “Inside the Pentagon Slugfest Over the Future of the Fleet, No One
Can Agree on How Many Ships the Navy Needs, and Congress Isn’t Pleased,” Politico, July 24 2022.
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The shift was abrupt. In February, at the annual WEST 2022 conference in San Diego,
Gilday sketched out a future fleet of 60 large and 50 small combatants, breaking from the
traditional 355-ship fleet goal of maintaining a 2:1 ratio of large combatants (cruisers and
destroyers) to small vessels (frigates and Littoral Combat Ships). Last month, Gilday
changed his tune, releasing a “2022 Navigation Plan,” aiming for a fleet of 96 large
combatants by 2045.
Both targets are out of step with the 30-year shipbuilding plan detailed in April’s “Report
to Congress on the Annual Long-Range Plan for Construction of Naval Vessels for Fiscal
Year 2023,” which suggested to Congress that the Navy was intent upon fielding a fleet of
between 70 to 80 large surface combatants by 2045....
Given the public reporting to date, it is tough to tell what, exactly, is driving the Navy’s
sudden interest in large surface combatants. Industry press has been less than dogged in its
efforts to understand the dramatic—if not unprecedented—oscillation in the U.S. Navy’s
demand for large surface combatants.
That failure is unfortunate, as America’s public and policymaker communities need clarity
more than ever....
While the Navy’s growing appetite for large surface combatants—whatever they might
turn out to be—is welcome news for the large surface combatant industrial base, the Navy’s
inability to fix on a consistent plan is a public relations and strategic disaster....
With no viable strategic or tactical justification forthcoming from Navy leadership, the
Navy’s free-form approach to the future of the surface fleet does little more than bemuse
rivals and irk everybody else. The Navy has little room to make sudden whipsaw changes.
After repeated operational fiascoes, the U.S. Navy has little credibility right now, and an
unexplained strategic change leaves pro-Navy advocates confused, and an already
impatient Congress frustrated....
The embrace of big ships in Gilday’s new force structure turns distributed lethality on its
head. Rather than working to grow the small-surface combatant fleet and using those
vessels to smear sensors and shooters all over the sea, the surface Navy is, with DDG(X),
re-inventing the battleship and, apparently, returning to the traditional World War II-era
battle group, leaving distributed lethality for crew-less things.
That’s fine. But, as originally articulated, the Distributed Maritime Operations concept was
set to push the fleet towards a 2:1 ratio of smaller crewed ships to bigger crewed surface
combatants. If the mechanics behind Distributed Maritime Operations are shifting to feed
the Navy’s craving for larger vessels, that shift—particularly if it is sacrificing smaller
crewed vessels for robots— is worth a bit of public discussion.26
FY2023 30-Year Shipbuilding Plan
Another issue for Congress concerns the three 30-year shipbuilding profiles and resulting force-
level projections presented in the FY2023 30-year (FY2023-FY2052) shipbuilding plan. Potential
oversight issues for Congress include the following:
 Alternatives 1 and 2 both assume no real growth in shipbuilding funds after
FY2027, but they would procure somewhat different mixes of ships and produce
fleets that are somewhat different in size and composition. What factors drove the
differences between Alternatives 1 and 2?

26 Craig Hooper, “Battleships Are Back! Navy Abruptly Boosts DDG/CG Building Targets For 2045,” Forbes, August
1, 2022.
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 How much real growth in shipbuilding funding after FY2027 is assumed for
Alternative 3?
 In the absence of an updated, clearly defined, and definitive new force-level goal
to replace the 355-ship goal, and the presentation of multiple 30-year
shipbuilding profiles rather than a single profile, how well can Congress assess
the adequacy of the Navy’s shipbuilding plans, including the Navy’s proposed
FY2023 shipbuilding budget and five-year (FY2023-FY2027) shipbuilding
plan?27
Affordability of Shipbuilding Plan and Budgetary Path for
Sustaining a Larger Navy
Overview
The prospective affordability of the Navy’s 30-year shipbuilding plan has been a matter of
oversight focus for several years. Observers have been especially concerned about the prospective
affordability of Navy shipbuilding plans during the decade or so from the mid-2020s through the
mid-2030s, when the Navy wants to procure Columbia-class ballistic missile submarines as well
as replacements for large numbers of retiring attack submarines, cruisers, and destroyers.28
As noted earlier, in the Navy’s FY2023 30-year (FY2023-FY2052) shipbuilding plan,
Alternatives 1 and 2 assume no real (i.e., above-inflation) growth in shipbuilding funding beyond
the level to be attained over the five-year period FY2023-FY2027, while Alternative 3 assumes
some amount of real growth in shipbuilding funds after FY2027. Under Alternative 1, the Navy
would reach 300 manned ships in FY2035 and grow to 316 manned ships by FY2052. Under
Alternative 2, the Navy would reach 300 manned ships in FY2035 and grow to 327 manned ships
by FY2052. Under Alternative 3, the Navy would reach 300 manned ships in FY2033 and grow
to 367 manned ships by FY2052.
Increasing the size of the Navy’s shipbuilding budget would form one component of an increase
in the Navy’s total budget that would be needed to increase the size of the Navy from about 300
ships to roughly 350 manned ships (plus additional large UVs)—additional increases to other
parts of the Navy’s budget would be needed to pay other costs associated with achieving and
sustaining a larger fleet, including costs for additional ship crews, ship-embarked aircraft, ship-
launched weapons, ship fuel and supplies, ship maintenance and repair, and shore support.
Some observers who advocate substantially increasing the size of the Navy have argued that
doing so can or should be resourced by increasing the Navy’s share of the DOD budget, perhaps
by reducing the Army’s share (on the grounds that countering China’s military in the Pacific
region is DOD’s top defense-planning priority and the Pacific for the United States is primarily

27 For press reports discussing this question, see, for example, Caitlin M. Kenney and Bradley Peniston, “The Navy’s
New Long-Range Shipbuilding Plan Is More Like a Menu,” Defense One, April 20, 2022; and Diana Stancy Correll,
“Navy’s 30-Year Shipbuilding Plan Offers Three Options to Increase the Size of the Fleet,” Navy Times, April 21,
2022.
28 The Navy’s 30-year plans in recent years have spotlighted for policymakers the substantial increase in Navy
shipbuilding funding that would be required to implement the 30-year plan during the decade or so from the mid-2020s
through the mid-2030s. As discussed in CRS testimony in 2011, a key function of the 30-year shipbuilding plan is to
alert policymakers well ahead of time to periods of potentially higher funding requirements for Navy shipbuilding. (See
Statement of Ronald O’Rourke, Specialist in Naval Affairs, Congressional Research Service, before the House Armed
Services Committee, Subcommittee on Oversight and Investigations, hearing on the Department of Defense’s 30-Year
Aviation and Shipbuilding Plans, June 1, 2011, 8 pp.)
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an aerospace and maritime theater rather than a land-forces-intensive theater). Whether reducing
the Army’s budget enough to finance a substantial increase in the size of the Navy would be
feasible from a strategic standpoint—particularly following Russia’s invasion of Ukraine and the
focus that this development has placed on NATO’s ability for deterring potential Russian
aggression in Europe—is not clear. Another option for financing a substantial increase in the size
of the Navy—one that some observers have raised following Russia’s invasion of Ukraine—
would be to maintain the Navy’s share of the DOD budget about where it currently is, and instead
increase the size of DOD’s budget as a whole.
November 2022 CBO Report on FY2023 30-Year Shipbuilding Plan
A November 2022 CBO report on the Navy’s FY2023 30-year shipbuilding plan states:
The three alternatives in the Navy’s [FY]2023 [30-year shipbuilding] plan would require
average annual shipbuilding appropriations that were 23 percent to 35 percent more than
the average over the past five years. CBO estimates that total shipbuilding costs would
average about $30 billion to $33 billion (in [constant FY]2022 dollars) over the next 30
years, which is 14 percent to 18 percent more than the Navy estimates. The Navy’s total
budget would increase from $220 billion today to roughly $290 billion (in [constant
FY]2022 dollars) in 2052.29
The report also states:
CBO’s estimates of new-ship construction costs are higher than the Navy’s because CBO
and the Navy made different assumptions about the design and capabilities of some future
ships, used different estimating methods, and treated growth in the costs of labor and
materials for shipbuilding differently. Some of the difference in the estimates stems from
uncertainty about the design and capabilities of large ships whose construction would begin
in 5 or 10 years—in particular, the next-generation destroyer that would start to replace the
Navy’s Arleigh Burke class destroyers and the next-generation attack submarine to follow
the service’s Virginia class submarines. The difference between the estimates also
increases over time, in part because the Navy’s method of developing constant-dollar
estimates (which reflect real costs—that is, costs adjusted to remove the effects of inflation)
for most of its shipbuilding programs uses a fixed average real cost per ship; it does not
account for the historically faster growth in the costs of labor and materials in the
shipbuilding industry than in the economy as a whole. As a result, the Navy’s estimates for
the future purchases of ships with the capabilities of today’s ships do not reflect the same
increase in real costs that CBO’s estimates reflect.30
The report also states:
The cost of the Navy’s [FY]2023 [30-year] shipbuilding plan is not only high when
compared with recent funding, it is high by historical standards. In comparing the plan’s
costs with average recent funding, CBO is comparing funding during a period that saw the
largest appropriations for ship construction since the Reagan Administration’s defense
buildup in the 1980s. Since 2013, lawmakers have appropriated, on average, $2.2 billion
more per year for shipbuilding than the President has requested, partly because of concerns
that the fleet is too small to perform all of its missions.... And the most recent two years of
appropriations—2021 and 2022—saw two of the three largest increases by the Congress
in the past decade. As a point of comparison, shipbuilding appropriations averaged $28.9

29 Congressional Budget Office, An Analysis of the Navy’s Fiscal Year 2023 Shipbuilding Plan, November 2022, page
entitled “At a Glance” (PDF page 2 of 39).
30 Congressional Budget Office, An Analysis of the Navy’s Fiscal Year 2023 Shipbuilding Plan, November 2022, pp. 2-
3.
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billion (in 2022 dollars) during the Cold War years of 1955 to 1989, a period of intense
competition between the United States and the Soviet Union in which the Navy faced
challenges that look increasingly similar to those it expects to face over the next two
decades. The three alternatives in the Navy’s plan would cost between 3 percent and 13
percent more than that.31
Navy Statements
An August 26, 2022, press report quoted the Chief of Naval Operations, Admiral Mike Gilday, as
stating on August 25, 2022, that the Navy would need an additional $9 billion to $10 billion per
year to build and maintain a fleet of 355 manned ships and 150 unmanned ships.32
A July 27, 2022, press report states
The U.S. Navy’s planned fleet of 2045 will require annual real [i.e., inflation-adjusted]
budget increases of 3 to 5 percent, according to the Navy’s top officer, who called that a
“realistic” schedule for amassing the 500 hyperconnected manned and unmanned vessels
that national security will require.
“I think it's going to take a couple of decades to get us to yield that hybrid fleet that we
think that we ultimately need in order to fight the way we think we want to fight, which is
in a distributed manner,” Adm. Mike Gilday, chief of naval operations, told reporters on
Tuesday [July 26].
That budget growth goal “would be unprecedented if they were to be achieved by the
Navy,” based on historical statistics, said Travis Sharp, fellow and director of defense
budget studies at the Center for Strategic and Budgetary Assessments based in Washington,
D.C....
Historically speaking, the odds are against the Navy getting that kind of money.
“Over the last 75 years, only one-third of the time has the Department of the Navy's budget
grown by 3 percent or more in real terms,” said CSBA’s Sharp. “If you think about those
outcomes as being…the odds, it’s like one-third of the time the Navy has gotten that level
of resourcing, and two-thirds of the time it has not gotten that level resourcing.”
Since World War II, Sharp said, the longest span of three-percent-or-more growth in the
Navy Department’s budget is three years, and that’s only happened twice, during general
military buildups: in the early 1980s, across the Carter and Reagan administrations and the
early 2000s after 9/11 and amid the buildup to the Iraq war.
Various defense and congressional officials have recommended 3 to 5 percent budget
growth since 2018, when both the National Defense Strategy and U.S. Institute of Peace’s
2018 report by the National Defense Strategy Commission called for it, Sharp said.33
As noted earlier, on July 26, 2022, the Navy released a document, Chief of Naval Operations
[CNO] Navigation Plan 2022, that calls for a future fleet of 373 manned ships, as well as about
150 large unmanned surface and underwater vehicles. Regarding the funding levels needed to
achieve this fleet, the document states (emphasis as in the original):
Our central challenge is balancing our investments in the future fleet while sustaining a
forward posture that keeps America safe and prosperous. Manpower, operations, and
maintenance costs continue to grow above the rate of inflation. Meanwhile, we face the

31 Congressional Budget Office, An Analysis of the Navy’s Fiscal Year 2023 Shipbuilding Plan, November 2022, p. 5.
32 “The Big News,” Politico Pro Morning Defense, August 26, 2022.
33 Caitlin M. Kenney, “Navy Fleet Plan Needs 3-5% Annual Budget Increases for the Next Two Decades,” Defense
One, July 27, 2022.
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simultaneous task of recapitalizing our strategic nuclear deterrent, our century-old dry dock
and ship repair facilities, and our strategic sealift capacity. To simultaneously modernize
and grow the capacity of our fleet, the Navy will require 3-5% sustained budget
growth above actual inflation [i.e., real growth]. Short of that, we will prioritize
modernization [i.e., improving the capabilities of individual ships and aircraft] over
preserving force structure [i.e., preserving numbers of ships and aircraft]. This will
decrease the size of the fleet until we can deploy smaller, more cost-effective, and more
autonomous force packages at scale.34
A November 4, 2021, press report stated
The U.S. Navy needs annual budget increases of three to five percent over inflation if it is
to reach its shipbuilding goals and meet China’s “significant threat,” Navy Secretary Carlos
Del Toro said Thursday [November 4]....
If the U.S. Navy is to reach 355 ships—the goal service leaders put forth in 2016 and
Congress ratified two years later—it needs budget increases of three to five percent over
inflation, Del Toro said.35
A June 15, 2021, press report stated
The number of ships in the fleet, now at 296 ships, will decrease if the Navy continues to
have flat or declining budgets, the service’s top officer told Congress today.
Despite numerous evaluations showing the Navy needs more ships, Chief of Naval
Operations Adm. Mike Gilday told the House Armed Service Committee that without a
topline increase to the service’s budget, the fleet will only get smaller.
“As you all know, the results of analysis done over the past five years—whether inside the
Pentagon or outside—have been consistent and clear: America needs a larger, more capable
fleet,” Gilday said. “Our latest Future [Naval Force Structure] assessment provided the
headlights not only for the size of our future fleet, but importantly for the composition of
that fleet, the capabilities that it brings to the joint force. If the Navy’s [budget] top-line
remains flat or goes down further, the size of our fleet will definitely shrink.”…
Gilday told lawmakers that the service’s budget is trying to balance the need to pursue new
capabilities and technology with its readiness priorities. While the Navy has for years been
building toward a goal of 355 ships, Gilday said the service only has enough money for
300 vessels with its current budget.36
In February 2020, Navy officials testified that achieving and supporting a 355-ship fleet over the
next 10 years would require increasing the Navy’s budget by a cumulative total of $120 billion to
$130 billion over the next 10 years, or an average of $12 billion to $13 billion per year. This
figure, Navy officials stated, included not only the cost of procuring new ships, but costs
associated with crewing, arming, operating, and maintaining a 355-ship fleet.37
In January 2020, Admiral Gilday stated that fully funding the Navy’s program goals, including
the attainment of a 355-ship fleet, would require allocating a larger share of DOD’s budget to the
Navy.38

34 U.S. Navy, Chief of Naval Operations Navigation Plan 2022, undated, released July 26, 2022, p. 12.
35 Caitlin M. Kenney, “Navy Secretary Seeks 3-5% Annual Budget Increases,” Defense One, November 4, 2021.
36 Mallory Shelbourne, “CNO Gilday: Flat or Declining Navy Budgets ‘Will Definitely Shrink’ the Fleet,” USNI News,
June 15, 2021.
37 See, for example, Ben Werner, “SECNAV Modly: Navy Needs Additional $120 Billion To Build 355-Ship Fleet By
2030,” USNI News, February 27, 2020.
38 See, for example, Marcus Weisgerber, “The US Navy Needs More Money, Its Top Admiral Bluntly Argues,”
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In September and October 2019, Navy officials stated that if Navy budgets in coming years
remain at current levels in real (i.e., inflation-adjusted) terms, the Navy would not be able to
properly maintain a fleet of more than 302 to 310 ships.39
The Navy in its FY2020 30-year shipbuilding plan highlighted a concern over the potential costs
to sustain a larger fleet.40
Potential Oversight Questions for Congress
Potential oversight questions for Congress include the following:
 Has a clear budgetary path been identified for financing a substantial increase in
the size of the Navy?
 Does the Biden Administration support increasing the size of the Navy’s total
budget to the level needed to increase the size of the Navy to figures like those
shown in Table 2 or Figure 1?
 In light of great power competition with China and Russia, how should funding
requirements for the Navy be balanced against funding requirements for other
parts of DOD?
Potential Impacts of a CR on FY2023 Navy Shipbuilding Programs
Overview
Another issue for Congress concerns the potential impacts on FY2023 Navy shipbuilding
programs of using one or more continuing resolutions (CRs) to fund DOD operations for at least
some portion of FY2023. As of October 3, 2022, federal government operations, including DOD
operations, were being funded under the Continuing Appropriations Act, 2023 (Division A of
H.R. 6833/P.L. 117-180 of September 30, 2022), a CR that provides funding for government
operations until December 16, 2022. Consistent with past CRs, Section 101 of Division A of H.R.
6833/P.L. 117-180 states that appropriations acts for the previous fiscal year are to be used as the
basis for funding federal government operations during the period of the CR. (The FY2022 DOD
Appropriations Act is Division C of H.R. 2471 of P.L. 117-103 of March 15, 2022.) Also
consistent with past CRs, Section 102 of Division A of H.R. 6833/P.L. 117-180 prohibits the use
of funding provided for DOD under the CR for
 implementing new program starts (aka “new starts”), meaning initiating new
program efforts that did not exist in the prior year—a prohibition that includes
not only the initiation of new acquisition programs, but also the shifting of an

Defense One, January 14, 2020; Sam LaGrone, “CNO Gilday Calls for Budget Increase to Reach 355 Ship Fleet; New
Battle Force Count Won’t Include Unmanned Ships,” USNI News, January 14, 2020; John M. Doyle, “CNO Wants
Larger Slice of Defense Budget to Modernize, Meet China Threat,” Seapower, January 15, 2020; Rich Abott, “CNO:
Ship Count Will Not Include Unmanned; Bigger Topline Needed For Fleet Goal,” Defense Daily, January 15, 2020.
39 Justin Katz, “Modly Acknowledges 355 Ships Won’t Happen in ‘Reasonable’ Amount of Time,” Inside Defense,
September 16, 2019; Otto Kreisher, “Modly Doubts Future Budgets Will Allow for 355-Ship Fleet,” Seapower,
October 27, 2019; Ben Werner, “Admiral: Navy Can Afford to Field a 310-Ship Fleet, Not 355,” USNI News, October
28, 2019. See also Rich Abott, “Navy Says Current Funding Only Supports 310 Ships,” Defense Daily, October 28,
2019; Paul McLeary, “Navy May Scrap Goal of 355 Ships; 310 Is Likely,” Breaking Defense, October 25, 2019.
40 U.S. Navy, Report to Congress on the Annual Long-Range Plan for Construction of Naval Vessels for Fiscal Year
2020, pp. 19-20.
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existing acquisition program from its research and development phase to its
procurement phase;
 increasing a procurement quantity for a program compared with the program’s
procurement quantities in the prior year; and
 initiating multiyear procurements using advance procurement (AP) funding for
economic order quantity (EOQ) procurement unless specifically appropriated
later.41
For general background information on the potential impacts of CRs on Navy shipbuilding
programs, see Appendix I. As discussed in Appendix I, unlike all other DOD acquisition
accounts, the Navy’s shipbuilding account, known formally as the Shipbuilding and Conversion,
Navy (SCN) appropriation account, is funded in the annual DOD Appropriations Act not just with
a total appropriated amount for the entire account, but also with specific appropriated amounts at
the line-item level. SCN line items in the DOD Appropriations Act are not just specific to
individual shipbuilding programs—they also distinguish between procurement funding and
advance procurement (AP) funding within those programs.
As a consequence, under a CR, SCN funding is managed not at the account level (like funding is
under a CR for other DOD acquisition accounts), but at the line-item level. For the SCN
account—uniquely among DOD acquisition accounts—this can lead to line-by-line funding
misalignments (excesses and shortfalls) for individual shipbuilding programs, compared with the
amounts those shipbuilding programs received in the prior year. The shortfalls in particular can
lead to program-execution challenges in shipbuilding programs, particularly under an extended or
full-year CR. This unique situation of line-by-line funding misalignments is an important
distinction between the potential impacts of CRs on Navy shipbuilding programs and the
potential impacts of CRs on other DOD acquisition activities.
As also discussed in Appendix I, the potential impacts of a CR on program execution can be
avoided or mitigated if the CR includes special provisions, called anomalies, for exempting
individual programs or groups of programs from the general provisions of the CR, or if the CR
includes expanded authorities for DOD for reprogramming and transferring funds. Division A of
H.R. 6833/P.L. 117-180 does not include any anomalies for Navy shipbuilding programs.
LPD-17 Flight II Program
As noted above, CRs typically prohibit, among other things, an increase in procurement quantity
for a program compared with that program’s procurement quantity in the prior year. This
prohibition could affect the LPD-17 Flight II amphibious ship program in FY2023, because the
Navy did not procure such a ship in FY2022 and is requesting the procurement of such a ship in
FY2023.
As also noted above, Navy shipbuilding programs, uniquely among DOD acquisition programs,
can be affected under a CR due to year-to-year funding misalignments at the line-item level. The
LPD-17 program in FY2023 could be affected under a CR for this reason as well, because the
program received no procurement funding and $250.0 million in advance procurement (AP)
funding in FY2022, and the Navy is requesting $1,673.0 million in procurement funding and no
advance procurement (AP) funding for FY2023.

41 For more on multiyear procurements, including the use of AP funding for EOQ purchases, see CRS Report R41909,
Multiyear Procurement (MYP) and Block Buy Contracting in Defense Acquisition: Background and Issues for
Congress, by Ronald O'Rourke.
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LHA-9 Amphibious Assault Ship
As discussed earlier, the Navy’s FY2023 budget submission shows a request for the procurement
of the amphibious assault ship LHA-9, and the Navy did not procure an LHA-type amphibious
assault ship in FY2022. On first inspection, this might appear to create the potential for a program
impact under the CR due to a requested year-to-year increase in the program’s procurement
quantity. As discussed earlier, however, CRS reports on Navy shipbuilding programs, including
this report, treat LHA-9 as a ship that Congress procured (i.e., authorized and provided
procurement—not advance procurement [AP]—funding for) in FY2021, and Navy officials have
described the listing of LHA-9 in the Navy’s FY2023 budget submission as a ship being
requested for procurement in FY2023 as an oversight.
The LHA program, however, could nevertheless be affected under a CR in FY2023 due to a year-
to-year funding misalignment at the line-item level—the program received $68.6 million in
procurement funding in FY2022, and the Navy is requesting $1,085.5 million in procurement
funding for FY2023.
Department of the Navy Information Paper on Potential Impacts of CR
An October 5, 2022, Department of the Navy (or DON, which includes both the Navy and Marine
Corps) information paper on the potential impacts of a CR on FY2023 DON programs states
(emphasis as in the original):
BLUF [bottom line up front]: The total funding impact to the DON for a 12-month
CR is ~$22.4B [about $22.4 billion]. The net Total Obligation Authority (TOA) shortfall
between an annualized CR estimate and the FY 2023 President’s Budget request is $10.4B.
However, under a 12-month CR (with no anomalies), there would be severe lasting impacts
when factoring in the $13.1B ($11.4B Navy / $1.7B USMC) in program misalignments
resulting from restrictions on new starts and production rate increases and the $9.3B ($6.8B
Navy / $2.5B USMC) in rate of operations restrictions at the appropriation level.
Our shipbuilding account faces significant impacts under a 12-month CR totaling $7.2B.
Rate of operations and new start issues for completion of prior year shipbuilding programs
($866M) and restrictions on production rate and rate of operations increases ($6.3B) to the
Columbia Class (full funding (FF) and advance procurement (AP)), CVN 80, CVN 75
Refueling Complex Overhaul AP, Virginia Class, DDG 1000, DDG 51 (FF and AP), LPD
Flight II, LHA, Outfitting/Post Delivery, Service Craft, and LCAC SLEP programs will
worsen already challenged delivery schedules for ships under construction, delay delivery
to the Fleet, and delay award of new ships or AP for future ships. Additionally, CRs
prohibit the start of new multi-year procurement (MYP) contracts.
Summary of Key Talking Points:
-- A CR results in some program and operational limitations, however, this 77 day
current CR enables us to continue to support and fund the Department of the Navy. We
anticipate no significant near-term impacts to personnel, operation and maintenance, or
research and development during this first CR.
-- We cannot execute this year’s strategy and priorities with last year’s budget.
-- As the CNO stated in his testimony in January of this year, “The U.S. Navy remains
the most ready, most capable, most lethal force in the world, but our margins are razor
thin. A full-year CR cedes ground we cannot afford to yield. Put simply … it puts our
national security at risk.”
-- The annualized CR provides the Department ~$10.4B (-4.7%) less topline than the FY
2023 President’s Budget request—degrading our military readiness, stifling our innovation
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and modernization efforts, and imposing uncertainty on the workforce. The DON PB 2023
request is $230.8B. The FY 2023 Annualized CR is $220.5B.
-- Further, misalignments due to restrictions on new starts, production rate increases, and
rate of operations restrictions at the appropriation level yields a ~$22.6B (-9.8%) funding
impact from the FY 2023 President’s Budget request.
-- During any CR, we will not resource lower priority efforts. This ensures deployed
operations, and those next to deploy, are receiving everything they need to be ready.
-- Unless the Congress provides relief from the standard provisions of recent CR bills
impacting the DoD, our spending will be limited to last year’s levels and priorities,
imposing significant fiscal and managerial constraints on the Department.42
October 19, 2022, Navy Statements
An October 25, 2022, press report on comments made by the Secretary of the Navy and the Chief
of Naval Operations at an October 19, 2022, Atlantic Council event stated:
The continuing resolution is hamstringing the Navy's efforts to deter China and prepare for
a potential conflict with the pacing threat, according to senior service officials.
The chief of naval operations and Navy secretary both cited the CR as a significant
impediment to fleet readiness at separate events last week and warned that extending the
CR could jeopardize the Navy’s fighting capability in a conflict with China.43
Proposal to Retire 24 Ships, Including 9 LCSs, in FY2023
Another issue for Congress concerns the Navy’s proposal in its FY2023 budget submission to
retire 24 ships, including 9 relatively young LCSs.44 Assuming a weighted average expected
service life of 35 years for Navy ships, for a fleet of 292 ships—the number of battle force ships
in the Navy as of November 22, 2022—a long-term (35-year average) of 8 or 9 ship retirements
per year might be expected, though the number could be above or below that average in any given
year, due to the uneven age distribution of Navy ships.
The Navy states that it is proposing to retire some of the 24 ships, including the 9 LCSs, as part of
a DOD budgeting strategy, incorporated into in the proposed FY2022 budget as well as the
proposed FY2023 budget, of divesting legacy capabilities that are not well aligned with mission
priorities so as to release resources for application to programs that are better aligned with those

42 Department of the Navy, DON Continuing Resolution (CR) Impacts, FY 2023 Talking Points as of 5 October, 2022,
received October 7, 2022, from Navy Office of Legislative Affairs.
43 Nick Wilson, “Navy May Not Be Ready for China if CR Persists, Service Leaders Say,” Inside Defense, October 25,
2022.
44 For a list of the 24 ships and the dates they entered service, see Megan Eckstein, “US Navy Reveals Ships Facing
Potential Decommissioning Next Year,” Defense News, April 4, 2022. For press reports about debate on the proposal to
retire the 24 ships, see, for example, Aaron Mehta, “Don’t Scrap LCS Now That They Are Finally Useful: Luria,”
Breaking Defense, April 7, 2022; AUSN Staff, “Milley Defends Shrinking Navy Fleet: ‘Ship Count Is An Incomplete
Metric,’” Association of the United States Navy, April 5, 2022; Justin Katz, “Gilday Dings Russia to Argue US Navy’s
Fleet Is More Than Numbers,” Breaking Defense, April 4, 2022; Marcus Weisgerber, “Top Navy Admiral: Fleet Size
Doesn’t Always Matter,” Defense One, April 4, 2022; AUSN Staff, “’It sucks’: Lawmakers Hate Biden’s Navy
Budget,” Association of the United States Navy, March 30, 2022; Konstantin Toropin, “Navy Names the Ships It
Wants Scrapped as Congressional Protests Grow,” Military.com, March 30, 2022.
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priorities45—a strategy that some observers refer to as “divest to invest.”46 DOD and other
supporters argue that this approach is necessary to optimize capabilities within available funding.
Opponents argue that funding levels should instead be increased to retain useful legacy
capabilities and/or that the strategy eliminates legacy capabilities that may be useful (even if not
optimal) for potential near-term contingencies (such as a potential Chinese military action against
Taiwan sometime in the next few years) in return for the promise of future capabilities whose
realization is not guaranteed or would not occur quickly enough to help respond to potential near-
term contingencies.47
Potential oversight issues for Congress include the following:
 Are these proposed retirements consistent with a goal of increasing the size of the
Navy toward a fleet of approximately 350 manned ships?
 What will be the impact on annual Navy funding requirements, capabilities, and
operational risks, both over the next few years and over the long run, of retiring
the 9 LCSs and the other relatively young ships that are among the 24 ships
proposed for retirement?
 Before deciding to propose early retirements for the 9 LCSs and the other
relatively young ships that are among the 24 ships proposed for retirement, did
the Navy conduct studies of options for using these ships to perform missions of
interest to the Navy that were not the originally intended primary missions of
these ships (and perhaps for modifying the ships to perform such alternate
missions)? If so, does the Navy intend to submit these studies to the
congressional defense committees? What were the results of these studies?
 What impact would the retirement of relatively young ships have on the Navy’s
ability to argue in the future that new ships requested for procurement will be
worth their procurement costs because the Navy intends to operate them over a
certain expected service life?
Reduction in FFG-62 Procurement Rate
The Navy previously planned a sustained annual procurement rate of two ships per year for the
Constellation (FFG-62) class program. As shown in Table 3, the Navy’s FY2023 five-year
shipbuilding plan reduces the program’s planned procurement rate to three ships every two years,
or 1.5 ships per year. Potential oversight questions for Congress include the following:
 Why did the Navy reduced the program’s procurement rate to 1.5 ships per year?

45 See, for example, Department of the Navy, Highlights of the Department of the Navy FY 2023 Budget, undated but
released as part of the Navy’s FY2023 budget submission, pp. 12-2 and 12-3. See also Jim Garamone, “Austin Lays
Out Reasoning Behind DOD Budget Request,” DOD News, April 7, 2022; Shelley K. Mesch, “Kendall: Legacy
Divestment and RDT&E Investment Will Cut Down Cost,” Inside Defense, April 28, 2022.
46 See, for example, Michael Fabey, “Pentagon Budget 2023: US Navy Details More Proposed Divestments,” Jane’s,
April 19, 2022; Dave Ress, “Navy Budget Calls for Decommissioning 4 Norfolk-Based Ships,” Newport News Daily
Press, April 26, 2022; Megan Eckstein, “US Navy FY22 Budget Request Prioritizes Readiness Over Procurement,”
Defense News, May 28, 2021.
47 See, for example, Brent Sadler, “The Navy’s Latest Shipbuilding Plan May Sink America’s Pacific Ambitions,”
Heritage Foundation, May 2, 2022. See also Abraham Mahshie, “‘Divest to Invest': Biden Navy Shipbuilding Plan
Leaves Lawmakers and Analysts Bewildered,” Washington Examiner, June 22, 2021; “Navy’s ‘Divest to Invest’ Plan
Comes with Dangerous Risk, Former Deputy Under Secretary Says,” Defense Matters, August 16, 2021; Hallie Coyne,
“Bad Idea: Divest to Invest,” Defense 360o (Center for Strategic and International Studies [CSIS]), December 10,
2021.
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 If the Navy did this because of limits on the capacity of the industrial base to
produce these ships, what is the Navy’s plan for expanding the capacity of the
industrial base so as to support a procurement rate of at least two ships per year?
Has the Navy presented such a plan to the congressional defense committees?
 Is the Navy’s proposal to reduce the planned procurement rate of these ships,
particularly in conjunction with its proposal to retire 9 relatively young LCSs,
consistent with the idea of moving the Navy toward a more distributed fleet
architecture?
Truncation of LPD-17 Flight II Procurement
Under the 38-ship amphibious force-level goal that is included in the Navy’s current 355-ship
force-level objective (see Table 1), the Navy had planned to procure a total of 13 LPD-17 Flight
II class ships. Under the Navy’s proposed FY2023 budget, the LPD-17 Flight II ship proposed for
procurement in FY2023—the third LPD-17 Flight II ship—would be the final one to be procured.
The Navy’s FY2023 budget submission would thus truncate the LPD-17 Flight II program from a
previously envisaged total of 13 ships to 3 ships. Ending LPD-17 Flight II procurement with the
ship requested for procurement in FY2023 would make for a total of 16 LPD-17 Flight I and
Flight II ships (13 LPD-17 Flight I ships procured in earlier years, and 3 LPD-17 Flight II ships).
As shown in Table 2, a total of 16 LPD-17s would equal the low end of the range of 16 to 19
LPD-17s called for under the June 17, 2021, long-range Navy shipbuilding document. The Navy
is currently studying requirements for amphibious ships; the results of this study presumably will
inform or be incorporated into the force-level goal that the Navy is developing to replace the 355-
ship goal. The Navy’s FY2023 30-year shipbuilding plan states, “The Navy will begin assessment
of a next-generation amphibious ship (i.e., LPD(X)) in FY2023.”48
Potential oversight questions for Congress include the following:
 If the Navy has not yet completed its study of amphibious-ship requirements, and
has not yet released a definitive new force-level goal to replace the 355-ship goal,
how can the Navy know that the requirement for LPD-17s will be no more than
16 ships, particularly when the June 17, 2021, long-range Navy shipbuilding
document set forth a possible range of 16 to 19 LPD-17s?
 The Marine Corps’ FY2023 unfunded priorities list includes, as its first item, an
unfunded priority for $250 million in advance procurement (AP) funding for the
future procurement of a fourth LPD-17 Flight II class ship. Is that consistent with
the Navy’s proposal to end procurement of LPD-17 Flight II class ships with the
procurement of a third and final LPD-17 Flight II ship in FY2023? Are the Navy
and Marine Corps in agreement regarding future required numbers of LPD-17s
and amphibious ships in general?
 What impact would the truncation of LPD-17 Flight II procurement to a total of
three ships have on the shipyard that builds LPD-17 Flight IIs (HII/Ingalls—the
Ingalls shipyard of Pascagoula, MS, which is part of Huntington Ingalls
Industries) in terms of workloads, employment levels, and costs for building
other Navy warships (including DDG-51 destroyers and LHA-type amphibious
assault ships) that are built at that yard? What impact would the truncation of

48 U.S. Navy, Report to Congress on the Annual Long-Range Plan for Construction of Naval Vessels for Fiscal Year
2023, April 2022 (released April 20, 2022), p. 14.
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LPD-17 Flight II procurement have on supplier firms associated with
construction of LPD-17 Flight II ships?
Deferral of Start of LAW Procurement
Previous Navy plans envisioned starting procurement of Light Amphibious Warships (LAWs) in
FY2023. LAWs are closely associated with the Marine Corps’ Expeditionary Advanced Base
Operations (EABO) operational concept and the idea of shifting the Navy to a more distributed
fleet architecture. Compared to the previously envisioned start of procurement in FY2023, the
Navy’s FY2023 five-year shipbuilding plan in effect defers the start of LAW procurement two
years, to FY2025. Potential oversight questions for Congress include the following:
 Why is the Navy proposing to effectively defer the start of LAW procurement by
two years, to FY2025?
 If the Navy is proposing this because it needs more time to study operational
requirements (and thus needed design features) for the LAW, why does the Navy
need an additional two years of time? What has changed that would require that
much additional time for the study of operational requirements?
 What impact will the two-year deferral have in terms of reducing technical,
schedule, and cost risk in the LAW program? What impact will it have on Navy-
Marine Corps capabilities and operational risks over the next several years?
Industrial Base Capacity
Another issue for Congress concerns industrial base capacity at ship construction shipyards, ship
overhaul and repair shipyards, and supplier firms for building ships at annual rates needed to
substantially increase the size of the Navy, and for performing overhaul, repair, and
modernization work on a larger fleet. Potential capacity limits or bottlenecks that have been
identified include but are not necessarily limited to shipyard and supplier capacity for building
submarines at desired annual rates, and capacity at government-operated Naval Shipyards (NSYs)
for performing overhaul, repair, and modernization work on the Navy’s nuclear-powered ships
(i.e., its submarines and aircraft carriers).49 An August 25, 2022, press report stated
The biggest barrier to adding more ships to the Navy is industrial base capacity, Chief of
Naval Operations Adm. Mike Gilday said Thursday [August 25].

49 Regarding the delays and other difficulties the Navy has experienced in recent years in executing overhaul and repair
work on existing Navy ships, see, for example, Congressional Budget Office, The Capacity of the Navy’s Shipyards to
Maintain Its Submarines, March 2021, 21 pp.; Government Accountability Office, Navy Maintenance[:] Navy Report
Did Not Fully Address Causes of Delays or Results-Oriented Elements, GAO-21-66, October 2020, 29 pp; Government
Accountability Office, Navy Shipyards[:] Actions Needed to Address the Main Factors Causing Maintenance Delays
for Aircraft Carriers and Submarines, GAO-20-588, August 2020, 47 pp.; Government Accountability Office, Navy
Ship Maintenance[:] Evaluating Pilot Program Outcomes Could Inform Decisions to Address Persistent Schedule
Challenges, GAO-20-370, May 2020, 55 pp.; Government Accountability Office, Navy Ship Maintenance[:] Actions
Needed to Address Maintenance Delays for Surface Ships Based Overseas, GAO-20-86, February 2020, 63 pp.;
Government Accountability Office, Navy Maintenance[:] Persistent and Substantial Ship and Submarine Maintenance
Delays Hinder Efforts to Rebuild Readiness, GAO-20-257T, December 4, 2019 (Testimony Before the Subcommittees
on Seapower and Readiness and Management Support, Committee on Armed Services, U.S. Senate, Statement of
Diana C. Maurer Director Defense Capabilities and Management), 31 pp. GAO has reported and testified on this issue
numerous times in recent years.
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The service’s top officer said shipbuilders need indicators from the service before they’re
able to make the investments required to build, for example, three destroyers per year.
“We have an industrial capacity that’s limited. In other words, we can only get so many
ships off the production line a year. My goal would be to optimize those production lines
for destroyers, for frigates, for amphibious ships, for the light amphibious ships, for supply
ships,” Gilday said at a Heritage Foundation event.
“We need to give a signal to industry that we need to get to three destroyers a year, instead
of 1.5, that we need to maintain two submarines a year. And so part of this is on us to give
them a clear set of – a clear aim point so they can plan a work force and infrastructure that’s
going to be able to meet the demand. But again, no industry is going to make those kinds
of investments unless we give them a higher degree of confidence.”
Asked by USNI News after the event if the reason the Navy isn’t ready to send that signal
to industry is because of funding, Gilday said, “it depends on the class of ships. Sometimes
it’s affordability. Sometimes it’s industrial capacity.”50
Potential oversight questions for Congress include the following:
 Is there sufficient shipyard and supplier capacity to increase the size of the Navy
to the figures like those shown in Table 2 or Figure 1, and to sustain a fleet of
that general size? Where is there currently insufficient capacity?
 For areas where there currently is insufficient capacity, what is the Navy’s plan
for increasing capacity to required levels?
 Will implementing the Shipyard Infrastructure Optimization Program (SIOP)—
the Navy’s 20-year plan for investing in the modernization of facilities at the four
government-operated NSYs—provide enough capacity at the NSYs to meet the
overhaul, repair, and modernization needs for the nuclear-powered ships
(including, potentially, an increased number of attack submarines) in a larger
Navy?
Legislative Activity for FY2023
CRS Reports Tracking Legislation on Specific Navy Shipbuilding
Programs
Detailed coverage of legislative activity on certain Navy shipbuilding programs (including
funding levels, legislative provisions, and report language) can be found in the following CRS
reports:
 CRS Report R41129, Navy Columbia (SSBN-826) Class 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 In Focus IF11826, Navy Next-Generation Attack Submarine (SSN[X])
Program: Background and Issues for Congress, by Ronald O'Rourke.

50 Mallory Shelbourne, “CNO Gilday: Industrial Capacity Largest Barrier to Growing the Fleet,” USNI News, August
25, 2022.
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 CRS Report RS20643, Navy Ford (CVN-78) Class Aircraft Carrier Program:
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 In Focus IF11679, Navy DDG(X) Next-Generation Destroyer Program:
Background and Issues for Congress, by Ronald O'Rourke.
 CRS Report R44972, Navy Constellation (FFG-62) Class Frigate Program:
Background and Issues for Congress, by Ronald O'Rourke.
 CRS Report R43543, Navy LPD-17 Flight II and LHA Amphibious Ship
Programs: Background and Issues for Congress, by Ronald O'Rourke.
 CRS Report R46374, Navy Light Amphibious Warship (LAW) Program:
Background and Issues for Congress, by Ronald O'Rourke.
 CRS Report R43546, Navy John Lewis (TAO-205) Class Oiler Shipbuilding
Program: Background and Issues for Congress, by Ronald O'Rourke.
 CRS In Focus IF11674, Navy Next-Generation Logistics Ship (NGLS) Program:
Background and Issues for Congress, by Ronald O'Rourke.
 CRS In Focus IF11838, Navy TAGOS-25 (Previously TAGOS[X]) Ocean
Surveillance Shipbuilding Program: Background and Issues for Congress, by
Ronald O'Rourke.
 CRS Report R45757, Navy Large Unmanned Surface and Undersea Vehicles:
Background and Issues for Congress, by Ronald O'Rourke.
Legislative activity on individual Navy shipbuilding programs that are not covered in detail in the
above reports is covered below.
Summary of Congressional Action on FY2023 Shipbuilding
Funding Request
The Navy’s proposed FY2023 budget requests $27.9 billion in shipbuilding funding for, among
other things, the procurement of eight new ships, including two Virginia (SSN-774) class attack
submarines, two Arleigh Burke (DDG-51) class destroyers, one Constellation (FFG-62) class
frigate, one LPD-17 Flight II class amphibious ship, one John Lewis (TAO-205) class oiler, and
one Navajo (TATS-6) class towing, salvage, and rescue ship.
Table 4 summarizes congressional action on the Navy’s FY2023 funding request for Navy
shipbuilding. The table shows the amounts requested and congressional changes to those
requested amounts. A blank cell in a filled-in column showing congressional changes to requested
amounts indicates no change from the requested amount.
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Table 4. Summary of Congressional Action on FY2023 Funding Request
Millions of dollars, rounded to nearest tenth; totals may not add due to rounding
Congressional changes to requested amounts
Line
Authorization
Appropriation
number
Program
Request
HASC
SASC
Enacted
HAC
SAC
Enacted
Shipbuilding and Conversion, Navy (SCN) appropriation account
001
Columbia-class SSBN
3,079.2

002
Columbia-class SSBN (AP)
2,778.6

003
CVN 80 aircraft carrier
1,481.5
-15.0

-17.6
-15.7

004
CVN-81 aircraft carrier
1,052.0
-15.0

005
Virginia-class SSN
4,534.2

006
Virginia-class SSN (AP)
2,025.7

007
CVN RCOH
0

008
CVN RCOH (AP)
618.3

-44.9
-6.2

009
DDG-1000
73.0

010
DDG-51
4,376.5
1,438.3

2,570.0

011
DDG-51 (AP)
618.4
130.0
250.0

77.3

012
LCS
0

013
FFG-62
1,085.2
997.2
73.4

50.0

014
FFG-62 (AP)
74.9

-74.9
-74.9

015
LPD-17 Flight II
1,673.0

016
LPD-17 Flight II (AP)
0
250.0
250.0

250.0

017
LPD-17 Flight I
0

018
Expeditionary Sea Base
0

019
Expeditionary Sea Base (AP)
0

020
LHA amphibious assault ship
1,085.5
289.0

289.0

021
Expeditionary fast transport ship (EPF)
0
695.0

645.0

022
TAO-205 oiler
794.7
746.0

-12.1

023
TAGOS(X) ocean surveillance ship
0

024
TATS towing/salvage/rescue ship
95.9

025
Moored training ship
0

026
LCU 1700 landing craft
0

027
Outfitting
707.4

-33.9

028
Ship to shore connector (SSC)
190.4
201.4

264.1

029
Service craft
68.3

23.0

-47.2

029A
Auxiliary Personnel Lighter (APL)
0

63.2

030
LCAC landing craft SLEP
36.3

031
Auxiliary vessels (used sealift ships)
140.7

-7.7

032
Completion of prior-year ships
1,328.1
45.0

XX
Undistributed (inflation effects)
0

839.2

TOTAL
27,917.9
4,761.9
1,435.6

-137.4
4,010.8

Source: Table prepared by CRS based on original Navy FY2023 budget submission, committee reports, and
explanatory statements on the FY2023 National Defense Authorization Act and FY2023 DOD Appropriations
Act.
Notes: Mil ions of dol ars, rounded to nearest tenth. A blank cell indicates no change to requested amount.
Totals may not add due to rounding. AP = advance procurement funding; HASC = House Armed Services
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Committee; SASC = Senate Armed Services Committee; HAC = House Appropriations Committee; SAC =
Senate Appropriations Committee; SLEP = service life extension program.
FY2023 National Defense Authorization Act (H.R. 7900/S. 4543)
House
Committee Report
The House Armed Services Committee, in its report (H.Rept. 117-397 of July 1, 2022) on H.R.
7900, recommended the funding levels shown in the HASC column of Table 4. These funding
levels provide for, among other things, the procurement of 13 new ships—the eight requested by
the Navy for procurement in FY2023, plus five additional ships, including
 one additional DDG-51 destroyer;
 one additional FFG-62 frigate;
 two additional Expeditionary Fast Transport ships (EPFs), to be built as medical
ships; and
 one additional TAO-205 oiler.
Section 114 of H.R. 7900 as reported by the committee states
SEC. 114. AUTHORITY FOR CERTAIN PROCUREMENTS FOR THE SHIP-TO-
SHORE CONNECTOR PROGRAM.
(a) CONTRACT AUTHORITY.—The Secretary of the Navy may enter into one or more
contracts, beginning with fiscal year 2023, for the procurement of up to 25 Ship-to-Shore
Connector class craft and associated material.
(b) LIABILITY.—Any contract entered into under subsection (a) shall provide that—
(1) any obligation of the United States to make a payment under the contract is subject to
the availability of appropriations for that purpose; and
(2) that total liability of the Federal Government for termination of any contract entered
into shall be limited to the total amount of funding obligated to the contract at time of
termination.
Section 352 of H.R. 7900 as reported by the committee states
SEC. 352. ANNUAL PLAN FOR MAINTENANCE AND MODERNIZATION OF
NAVAL VESSELS.
(a) ANNUAL PLAN.—Section 231 of title 10, United States Code, is amended—
(1) in the heading, by inserting ‘‘, maintenance, and modernization’’ after ‘‘construction’’;
(2) by redesignating subsections (d) through (f) as subsections (e) through (g), respectively;
(3) by inserting after subsection (c) the following new subsection:
‘‘(d) ANNUAL PLAN FOR MAINTENANCE AND MODERNIZATION OF NAVAL
VESSELS.—In addition to the plan included under subsection (a)(1), the Secretary of
Defense shall include with the defense budget materials for a fiscal year each of the
following:
‘‘(1) A plan for the maintenance and modernization of naval vessels that includes the
following:
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‘‘(A) A forecast of the maintenance and modernization requirements for both the naval
vessels in the inventory of the Navy and the vessels required to be delivered under the naval
vessel construction plan under subsection (a)(1).
‘‘(B) A description of the initiatives of the Secretary of the Navy to ensure that activities
key to facilitating the maintenance and modernization of naval vessels (including with
respect to increasing workforce and industrial base capability and capacity, shipyard level-
loading, and facility improvements) receive sufficient resourcing, and are including in
appropriate planning, to facilitate the requirements specified in subparagraph (A).
‘‘(2) A certification by the Secretary that both the budget for that fiscal year and the future-
years defense program submitted to Congress in relation to such budget under section 221
of this title provide for funding for the maintenance and modernization of naval vessels at
a level that is sufficient for such maintenance and modernization in accordance with the
plan under paragraph (1).’’; and
(4) in subsection (f), as redesignated by paragraph (2), by inserting ‘‘ and the plan and
certification under subsection (d)’’ after ‘‘subsection (a)’’.
(b) CLERICAL AMENDMENT.—The table of sections at the beginning of chapter 9 of
title 10, United States Code, is amended by striking the item relating to section 231 and
inserting the following new item:
‘‘231. Budgeting for construction, maintenance, and modernization of naval vessels:
annual plan and certification.’’.
Section 818 of H.R. 7900 as reported by the committee states
SEC. 818. REQUIREMENTS FOR THE PROCUREMENT OF CERTAIN
COMPONENTS FOR CERTAIN NAVAL VESSELS AND AUXILIARY SHIPS.
(a) REQUIREMENTS FOR THE PROCUREMENT OF CERTAIN COMPONENTS
FOR NAVAL VESSELS.—Section 4864(a)(2) of title 10, United States Code, is amended
by adding at the end the following new subparagraph:
‘‘(G) Ship shafts and propulsion system components (including reduction gears and
propellers).’’.
(b) REQUIREMENT THAT CERTAIN AUXILIARY SHIP COMPONENTS BE
MANUFACTURED IN THE NATIONAL TECHNOLOGY AND INDUSTRIAL
BASE.—
(1) TECHNICAL AMENDMENT.—Section 4864 of title 10, United States Code, is
amended by redesignating subsection (l) (relating to ‘‘Implementation of auxiliary ship
component limitation’’) as subsection (k).
(2) COMPONENTS FOR AUXILIARY SHIPS.—Paragraph (3) of section 4864(a) of title
10, United States Code, is amended to read as follows:
‘‘(3) COMPONENTS FOR AUXILIARY SHIPS.—Subject to subsection (k), the
following components:
‘‘(A) Large medium-speed diesel engines.
‘‘(B) Propulsion system components, including reduction gears and propellers.’’.
(3) IMPLEMENTATION.—Subsection (k) of section 4864 of title 10, United States Code,
as redesignated by paragraph (1), is amended to read as follows:
‘‘(k) IMPLEMENTATION OF AUXILIARY SHIP COMPONENT LIMITATION.—
Subsection (a)(3) shall apply only with respect to contracts awarded by a Secretary of a
military department for construction of a new class of auxiliary ship after the date of the
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enactment of this Act using funds available for National Defense Sealift Fund programs or
Shipbuilding and Conversion, Navy.’’.
Section 1021 of H.R. 7900 as reported by the committee states
SEC. 1021. NAVY CONSULTATION WITH MARINE CORPS ON MAJOR
DECISIONS DIRECTLY CONCERNING MARINE CORPS AMPHIBIOUS FORCE
STRUCTURE AND CAPABILITY.
(a) IN GENERAL.—Section 8026 of title 10, United States Code, is amended by inserting
‘‘or amphibious force structure and capability’’ after ‘‘Marine Corps aviation’’.
(b) CLERICAL AMENDMENTS.—
(1) SECTION HEADING.—The heading of such section is amended by inserting ‘‘or
amphibious force structure and capability’’.
(2) TABLE OF SECTIONS.—The table of sections at the beginning of chapter 803 of such
title is amended by striking the item relating to section 8026 and inserting the following
new item:
‘‘8026. Consultation with Commandant of the Marine Corps on major decisions directly
concerning Marine Corps aviation or amphibious force structure and capability.’’.
Section 1022 of H.R. 7900 as reported by the committee states
SEC. 1022. NUMBER OF NAVY OPERATIONAL AMPHIBIOUS SHIPS.
Section 8062 of title 10, United States Code, is amended by adding at the end the following
new subsection:
‘‘(g) The naval combat forces of the Navy shall include not less than 31 operational
amphibious ships, comprised of LSD–41 class ships, LSD–49 class ships, LPD–17 class
ships, LPD–17 Flight II class ships, LHD–1 class ships, LHA–6 Flight 0 class ships, and
LHA–6 Flight I class ships. For purposes of this subsection, an operational amphibious
ship includes an amphibious ship that is temporarily unavailable for worldwide deployment
due to routine or scheduled maintenance or repair.’’.
A July 12, 2022, Statement of Administration Policy regarding H.R. 7900, as well as
recommended procurement funding for the DDG-51 program (see Table 4), states (emphasis as
in original):
Naval Force Structure and Shipbuilding. The Administration opposes establishing in
statute a minimum number of Navy amphibious ships, or other numeric force structure
provisions, as they unduly constrain evolutions in joint warfighting approaches and
associated capability prioritization. Further, the Administration strongly opposes
incrementally funding a third Arleigh Burke class destroyer in FY 2023.51
Section 1023 of H.R. 7900 as reported by the committee states
SEC. 1023. AVAILABILITY OF FUNDS FOR RETIREMENT OR INACTIVATION OF
LANDING DOCK SHIPS.
None of the funds authorized to be appropriated by this Act or otherwise made available
for fiscal year 2023 for the Department of Defense may be obligated or expended to retire,
prepare to retire, inactivate, or place in storage any of the following ships:
(1) USS Germantown (LSD-42).

51 Executive Office of the President, Office of Management and Budget, Statement of Administration Policy, H.R.
7900—National Defense Authorization Act for Fiscal Year 2023 (Rep. Smith, D-WA), July 12, 2022, p. 4.
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(2) USS Gunston Hall (LSD-44).
(3) USS Tortuga (LSD-46).
(4) USS Ashland (LSD-48).
Section 1024 of H.R. 7900 as reported by the committee states
SEC. 1024. AVAILABILITY OF FUNDS FOR RETIREMENT OR INACTIVATION OF
GUIDED MISSILE CRUISERS.
(a) IN GENERAL.—Subject to subsection (b), none of the funds authorized to be
appropriated by this Act or otherwise made available for fiscal year 2023 for the
Department of Defense may be obligated or expended to retire, prepare to retire, inactivate,
or place in storage more than four guided missile cruisers.
(b) USS VICKSBURG.—The USS Vicksburg may not be retired, prepared to retire,
inactivated, or placed in storage pursuant to subsection (a).
Section 1026 of H.R. 7900 as reported by the committee states
SEC. 1026. PROHIBITION ON USE OF FUNDS FOR RETIREMENT OF LEGACY
MARITIME MINE COUNTERMEASURES PLATFORMS.
(a) PROHIBITION.—Except as provided in subsection (b), the Secretary of the Navy may
not obligate or expend funds to discontinue or prepare to discontinue, including by making
a substantive reduction in training and operational employment, the Marine Mammal
System program, that has been used, or is currently being used, for—
(1) port security at Navy bases, known as Mark-6 systems; or
(2) mine search capabilities, known as Mark-7 systems.
(b) WAIVER.—The Secretary of the Navy may waive the prohibition under subsection (a)
if the Secretary, with the concurrence of the Director of Operational Test and Evaluation,
certifies in writing to the congressional defense committees that the Secretary has—
(1) identified a replacement capability and the necessary quantity of such capability to meet
all operational requirements currently being met by the Marine Mammal System program,
including a detailed explanation of such capability and quantity;
(2) achieved initial operational capability of all capabilities referred to in paragraph (1),
including a detailed explanation of such achievement; and
(3) deployed a sufficient quantity of capabilities referred to in paragraph (1) that have
achieved initial operational capability to continue to meet or exceed all operational
requirements currently being met by Marine Mammal System program, including a
detailed explanation of such deployment.
Section 1030 of H.R. 7900 as reported by the committee states
SEC. 1030. AVAILABILITY OF FUNDS FOR RETIREMENT OR INACTIVATION OF
EXPEDITIONARY TRANS FER DOCK SHIPS.
None of the funds authorized to be appropriated by this Act or otherwise made available
for fiscal year 2023 for the Department of Defense may be obligated or expended to retire,
prepare to retire, inactivate, or place in storage the following ships:
(1) ESD-1.
(2) ESD-2.
Section 1031 of H.R. 7900 as reported by the committee states
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SEC. 1031. AVAILABILITY OF FUNDS FOR RETIREMENT OR INACTIVATION OF
LITTORAL COMBAT SHIPS.
None of the funds authorized to be appropriated by this Act or otherwise made available
for fiscal year 2023 for the Department of Defense may be obligated or expended to retire,
prepare to retire, inactivate, or place in storage more than four Littoral Combat Ships.
Section 1094 of H.R. 7900 as reported by the committee states
SEC. 1094. NATIONAL COMMISSION ON THE FUTURE OF THE NAVY.
(a) NATIONAL COMMISSION ON THE FUTURE OF THE NAVY.—
(1) ESTABLISHMENT.—There is established the National Commission on the Future of
the Navy (in this section referred to as the ‘‘Commission’’).
(2) MEMBERSHIP.—
(A) COMPOSITION.—The Commission shall be composed of eight members, of whom—
(i) two shall be appointed by the Chairman of the Committee on Armed Services of the
Senate, one of whom shall be a Member of the Senate and one whom shall not be;
(ii) two shall be appointed by the Ranking Member of the Committee on Armed Services
of the Senate, one of whom shall be a Member of the Senate and one whom shall not be;
(iii) two shall be appointed by the Chairman of the Committee on Armed Services of the
House of Representatives, one of whom shall be a Member of the House of Representatives
and one whom shall not be; and
(iv) two shall be appointed by the Ranking Member of the Committee on Armed Services
of the House of Representatives, one of whom shall be a Member of the House of
Representatives and one whom shall not be.
(B) APPOINTMENT DATE.—The appointments of the members of the Commission shall
be made not later than 90 days after the date of the enactment of this Act.
(C) EFFECT OF LACK OF APPOINTMENT BY APPOINTMENT DATE.—If one or
more appointments under subparagraph (A)(i) is not made by the appointment date
specified in subparagraph (B), the authority to make such appointment or appointments
shall expire, and the number of members of the Commission shall be reduced by the
number equal to the number of appointments so not made. If an appointment under
subparagraph (A)(ii), (iii), (iv), or (v) is not made by the appointment date specified in
subparagraph (B), the authority to make an appointment under such subparagraph shall
expire, and the number of members of the Commission shall be reduced by the number
equal to the number otherwise appointable under such subparagraph.
(D) EXPERTISE.—In making appointments under this subsection, consideration should
be given to individuals with expertise in naval policy and strategy, naval forces capability,
naval nuclear weapons, Naval force structure design, organization, and employment,
shipbuilding, and shipbuilding infrastructure.
(3) PERIOD OF APPOINTMENT; VACANCIES.—Members shall be appointed for the
life of the Commission. Any vacancy in the Commission shall not affect its powers, but
shall be filled in the same manner as the original appointment.
(4) CHAIR AND VICE CHAIR.—The Commission shall select a Chair and Vice Chair
from among its members.
(5) INITIAL MEETING.—Not later than 30 days after the date on which all members of
the Commission have been appointed, the Commission shall hold its initial meeting.
(6) MEETINGS.—The Commission shall meet at the call of the Chair.
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(7) QUORUM.—A majority of the members of the Commission shall constitute a quorum,
but a lesser number of members may hold hearings.
(b) DUTIES OF THE COMMISSION.—
(1) STUDY ON NAVAL FORCE STRUCTURE.—
(A) IN GENERAL.—The Commission shall undertake a comprehensive study of the
structure of the Navy and policy assumptions related to the size and force mixture of the
Navy, in order—
(i) to make recommendations on the size and force mixture of ships; and
(ii) to make recommendations on the size and force mixture of naval aviation;
(B) CONSIDERATIONS.—In undertaking the study required by paragraph (1), the
Commission shall carry out each of the following:
(i) An evaluation and identification of a structure for the Navy that—
(I) has the depth and scalability to meet current and anticipated requirements of the
combatant commands;
(II) assumes three different funding levels of 2023 appropriated plus inflation; 2023
appropriated with 3-5 percent real growth; and unconstrained to meet the needs for war in
the area of responsibility of United States Indo-Pacific Command and the area of
responsibility of United States European Command;
(III) ensures that the Navy has the capacity needed to support current and anticipated
homeland defense and disaster assistance missions in the United States;
(IV) provides for sufficient numbers of members of the Navy to ensure a 115 percent
manning level of all deployed ships, similar to United States Special Operations Command;
(V) recommends a peacetime rotation force operational tempo goals;
(VI) recommends forward stationing requirements; and
(VII) manages strategic and operational risk by making tradeoffs among readiness,
efficiency, effectiveness, capability, and affordability.
(ii) An evaluation and identification of combatant command demand and fleet size,
including recommendations to support a balance of—
(I) readiness;
(II) training;
(III) routine ship maintenance;
(IV) personnel;
(V) forward presence; and
(VI) depot level ship maintenance.
(iii) A detailed review of the cost of the recapitalization of the Nuclear Triad in the
Department of Defense and its effect on the Navy’s budget.
(iv) A review of Navy personnel policies and training to determine changes needed across
all personnel activities to improve training effectiveness and force tactical readiness and
reduce operational stress.
(2) STUDY ON SHIPBUILDING AND INNOVATION.—
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(A) IN GENERAL.—The Commission shall conduct a detail study on shipbuilding, ship
yards, and integrating advanced information technologies such as augmented reality an
artificial intelligence on the current fleet.
(B) CONSIDERATIONS.—In conducting the study required by subparagraph (A), the
Commission shall consider the following:
(i) Recommendations for specific changes to the Navy’s Shipyard Infrastructure
Optimization Program, to include legislative changes to providing a multi-year
appropriation; additionally provides recommendations for bringing into the shipyards
innovative technology companies as part of the overall modernization effort.
(ii) Recommendations for changes to the ship design and build program, to reduce risk,
reduce cost, accelerate build timelines, and takes an incremental approach to change in
future ship building.
(iii) Recommendations for changes to the ship depot maintenance program in order to
reduce overhaul timelines, integrate current technologies into ships, and reduces costs.
(3) REPORT.—Not later than July 1, 2024, the Commission shall submit to the
Committees on Armed Services of the Senate and House of Representatives an unclassified
report, with classified annexes if necessary, that includes the findings and conclusions of
the Commission as a result of the studies required by paragraphs (1) and (2), together with
its recommendations for such legislative actions as the Commission considers appropriate
in light of the results of the studies.
(c) POWERS OF THE COMMISSION.—
(1) HEARINGS.—The Commission may hold such hearings, sit and act at such times and
places, take such testimony, and receive such evidence as the Commission considers
advisable to carry out its duties under this section.
(2) INFORMATION FROM FEDERAL AGENCIES.—
The Commission may secure directly from any Federal department or agency such
information as the Commission considers necessary to carry out its duties under this
section. Upon request of the Chair of the Commission, the head of such department or
agency shall furnish such information to the Commission.
(3) POSTAL SERVICES.—The Commission may use the United States mails in the same
manner and under the same conditions as other departments and agencies of the Federal
Government.
(d) COMMISSION PERSONNEL MATTERS.—
(1) COMPENSATION OF MEMBERS.—Each member of the Commission who is not an
officer or employee of the Federal Government may be compensated at a rate not to exceed
the daily equivalent of the annual rate of $155,400 for each day (including travel time)
during which such member is engaged in the performance of the duties of the Commission.
All members of the Commission who are officers or employees of the United States or
Members of Congress shall serve without compensation in addition to that received for
their services as officers or employees of the United States.
(2) TRAVEL EXPENSES.—The members of the Commission shall be allowed travel
expenses, including per diem in lieu of subsistence, at rates authorized for employees of
agencies under subchapter I of chapter 57 of title 5, United States Code, while away from
their homes or regular places of business in the performance of services for the
Commission.
(3) STAFF.—
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(A) IN GENERAL.—The Chair of the Commission may, without regard to the civil service
laws and regulations, appoint and terminate an executive director and such other additional
personnel as may be necessary to enable the Commission to perform its duties. The
employment of an executive director shall be subject to confirmation by the Commission.
(B) COMPENSATION.—The Chair of the Commission may fix the compensation of the
executive director and other personnel without regard to chapter 51 and subchapter III of
chapter 53 of title 5, United States Code, relating to classification of positions and General
Schedule pay rates, except that the rate of pay for the executive director and other personnel
may not exceed the rate payable for level V of the Executive Schedule under section 5316
of such title.
(4) DETAIL OF GOVERNMENT EMPLOYEES.—Any Federal Government employee
may be detailed to the Commission without reimbursement, and such detail shall be
without interruption or loss of civil service status or privilege.
(5) PROCUREMENT OF TEMPORARY AND INTERMITTENT SERVICES.—The
Chair of the Commission may procure temporary and intermittent services under section
3109(b) of title 5, United States Code, at rates for individuals which do not exceed the daily
equivalent of the annual rate of basic pay prescribed for level V of the Executive Schedule
under section 5316 of such title.
(e) TERMINATION OF THE COMMISSION.—
(1) IN GENERAL.—The Commission shall terminate on the date that is five years after
the date of the enactment of this Act.
(2) INAPPLICABILITY OF TERMINATION REQUIREMENT UNDER FACA.—
Section 14 of the Federal Advisory Committee Act (5 U.S.C. App.) shall not apply to the
activities of the Commission under this section.
H.Rept. 117-397 states
Assessment of the Navy’s amphibious warfare fleet
The Navy and Marine Corps have identified amphibious capabilities as an area of emphasis
in future conflicts and are reviewing the requirements and acquisition of the fleet of assets
dedicated to this mission. The committee is concerned about the potential impacts this has
for the acquisition of amphibious ships that are best suited for prosecuting a future
amphibious invasion. Further, the committee is also concerned about the broader
implications of the importance of amphibious warfare capabilities, the probability of such
a conflict, and the cost of building and maintaining a fleet that can prosecute such a conflict.
The committee is interested to learn more about the analysis, decision-making processes,
and the frequency with which the Navy and Marine Corps review requirements for
amphibious warfare and align these requirements with acquisition programs. Specifically,
the committee seeks to understand how the potential changes to requirements would impact
the acquisition plans identified in the most recent 30-year shipbuilding plan.
Therefore, the committee directs the Comptroller General of the United States to review
the Navy’s plans for the future amphibious warfare fleet. At a minimum, the review shall
address the following elements:
(1) analysis of the current amphibious warfare fleet;
(2) Navy and Marine Corps future plans for the fleet and how it will be positioned to evolve
as technology changes;
(3) an assessment of the costs of building and maintaining a fleet whose primary mission
is amphibious conflict, such as the light amphibious warship, large deck amphibious ships,
and LPD-class ships; and
(4) other items the Comptroller General determines appropriate.
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The committee further directs the Comptroller General to provide a briefing to the House
Committee on Armed Services not later than March 1, 2023, on the Comptroller General’s
preliminary findings and to present final results in a format and timeframe agreed to at the
time of the briefing. (Page 15)
H.Rept. 117-397 also states
Briefing on the Navy’s Hospital Ship Modernization Program
The committee supports efforts to modernize the United States Navy’s fleet of hospital
ships to ensure that military medical readiness is at an all-time high as the Department of
Defense shifts its primary focus to the Indo-Pacific. The committee is aware of the unique
capabilities a smaller and more agile hospital ship will bring to the Navy’s ability to provide
medical needs to its distributed fleet. Further, the committee notes the importance of having
hospital ships with the capabilities to support aircraft performing medical evacuation or
casualty evacuation missions.
The committee believes this modernization program will increase flexibility and enhance
the military’s ability to provide care to service members in a complex environment.
Therefore, the committee directs the Secretary of the Navy to deliver a briefing to the
House Committee on Armed Services by January 15, 2023, on the Navy’s efforts to
modernize its hospital ships and provide an update on how the plan fits into the National
Defense Strategy. (Page 15)
H.Rept. 117-397 also states
Large surface combatant life extension and modernization
The committee is concerned about the Navy’s plan to inactivate 18 large surface
combatants (LSC) between 2023 and 2027, and the resultant loss of combat capability and
capacity. Accordingly, the committee directs the Secretary of the Navy to submit a report
to the House Committee on Armed Services by March 31, 2023, on the Navy’s plan for
cruisers and DDG–51 Flight I destroyers. The report should include:
(1) an assessment of modernization and/or service life extension opportunities for each of
the 18 LSCs planned for inactivation;
(2) an assessment of estimated costs to life-extend and/or modernize these ships;
(3) an assessment of the capability and capacity of original equipment manufacturers to
perform potential life extensions and/or modernizations; and
(4) an assessment of the resultant increase in capability and capacity if these ships were
retained in the active inventory, vice inactivated per the 30-year shipbuilding plan. (Page
17)
H.Rept. 117-397 also states
Vertical launch system on EPF ships
The committee is concerned about the Navy’s plan to inactivate 18 large surface
combatants (LSC) between 2023 and 2027, and the resultant loss in firepower capacity due
to the reduction in vertical launch systems (VLS) available to combatant commanders.
Accordingly, the committee directs the Secretary of the Navy to conduct a feasibility study
on converting expeditionary fast transport (EPF) ships into arsenal ships equipped with 64
VLS tubes. The committee further directs the Secretary of the Navy to submit a report to
the House Committee on Armed Services by March 31, 2023, on its findings. The report
shall include, at a minimum:
(1) an engineering assessment regarding suitability for EPF ships to be equipped with VLS;
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(2) an assessment of additional combat systems upgrades necessary to enable EPF to
employ weapons from a VLS;
(3) an assessment of additional manpower and training requirements associated with EPF
employment of weapons utilizing VLS; and
(4) cost assessments associated with full implementation of VLS on EPF ships. (Page 19)
H.Rept. 117-397 also states
Littoral Combat Ship Modernization and Maintenance
The Littoral Combat Ship (LCS) was designed as a flexible platform to enable quick
deployment of capability. In parallel to its ongoing efforts to assess the maintenance,
reliability and employment of both LCS variants, the committee urges the Navy to explore
expanding LCS capability to meet revised mission requirements in support of Navy fleet
architecture, including through a proof of concept for a modified lethality & survivability
upgrade. This proof of concept could include Enhanced Electronic Warfare Capability
(SEWIP BLK II-Lite), Integrated Naval Strike Missile (NSM), Link 11 and Link 16 LoS
and SATCOM, and a containerized launcher (MK70 MOD 1). It could also present the
opportunity to progress the Vertical Launch ASROC Extended Range (VLA–ER) Anti-
Submarine Weapon capability.
Consequently, the committee directs the Secretary of the Navy, in consultation with Chief
of Naval Operations and the Commandant of the Marine Corps, to submit to the
congressional defense committees a report on Littoral Combat Ships no later than March
1, 2023 that includes the following:
1. A description of the schedule and cost associated with Freedom-variant Littoral Combat
Ship combining gearbox repairs and modifications;
2. A description of sustainment strategy options for both Littoral Combat Ship variants that
account for their unique characteristics and manning levels, including commercial
sustainment options that could be employed to increase operational availability, as well as
technical qualifications of Littoral Combat Ships Maintenance Execution Teams and the
Navy’s rationale for removing these teams from Littoral Combat Ship squadron
organizations;
3. The Navy’s plan to employ usage and failure data to maintain adequate spare part
inventories to prevent the cannibalization of active ships;
4. An analysis of near and mid-term lethality, survivability, or sensing upgrades that could
enhance the operational relevance of the Littoral Combat Ship in the current global security
environment, including plans and any associated costs of increasing the command and
control capability of these ships to further allow them to operate in support of Navy strike
groups and as part of the Distributed Maritime Operations concept;
5. An assessment of the impact on the global security environment that forward based
Littoral Combat Ships could play by enhancing American naval presence in the 5th, 6th,
and 7th Fleet area of operations; and,
6. Options and potential benefits of using Littoral Combat Ships to host and facilitate
Marines conducting Expeditionary Advanced Basing Operations, particularly prior to the
operational availability of the Light Amphibious Warship. (Pages 19-20)
Floor Action
On July 13, 2022, as part of its consideration of H.R. 7900, the House rejected, 208-221, H.Amdt.
256, which would allow the Navy to retire nine LCSs in FY2023. The amendment would strike
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link to page 36 Navy Force Structure and Shipbuilding Plans: Background and Issues for Congress

Section 1031 of H.R. 7900, which prohibits the Navy from retiring more than four LCSs in
FY2023 (see above).52
Senate
The Senate Armed Services Committee, in its report (S.Rept. 117-130 of July 18, 2022) on S.
4543, recommended the funding levels shown in the SASC column of Table 4. These funding
levels provide for, among other things, the procurement of the eight new ships requested by the
Navy for procurement in FY2023.
Section 123 of S. 4543 as reported by the committee states
SEC. 123. BLOCK BUY CONTRACTS FOR SHIP-TO-SHORE CONNECTOR
PROGRAM.
(a) BLOCK BUY CONTRACT AUTHORITY.—Beginning in fiscal year 2023, the
Secretary of the Navy may enter into one or more block buy contracts for the procurement
of up to 10 Ship-to-Shore Connector class craft and associated material.
(b) LIABILITY.—Any contract entered into under subsection (a) shall provide that—
(1) any obligation of the United States to make a payment under the contract is subject to
the availability of appropriations for that purpose; and
(2) the total liability of the Federal Government for termination of the contract shall be
limited to the total amount of funding obligated to the contract at the time of termination.
(c) CERTIFICATION REQUIRED.—A contract may not be entered into under subsection
(a) unless the Secretary of the Navy certifies to the congressional defense committees, in
writing, not later than 30 days before entry into the contract, each of the following, which
shall be prepared by the milestone decision authority for such program:
(1) The use of such a contract is consistent with the Chief of Naval Operations’ projected
force structure requirements for such craft.
(2) The use of such a contract will result in significant savings compared to the total
anticipated costs of carrying out the program through annual contracts. In certifying cost
savings under the preceding sentence, the Secretary shall include a written explanation
of—
(A) the estimated end cost and appropriated funds by fiscal year, by craft, without the
authority provided in subsection (a);
(B) the estimated end cost and appropriated funds by fiscal year, by craft, with the authority
provided in subsection (a);
(C) the estimated cost savings or increase by fiscal year, by craft, with the authority
provided in subsection (a);
(D) the discrete actions that will accomplish such cost savings or avoidance; and
(E) the contractual actions that will ensure the estimated cost savings are realized.
(3) There is a stable design for the property to be acquired and the technical risks associated
with such property are not excessive.

52 The amendment would have additionally made a number of changes in recommended funding levels for certain Navy
appropriations accounts and one Army appropriations account. For the full text of the amendment, see pages 84-85 of
H.Rept. 117-405 of July 13, 2022, providing for the consideration of H.R. 7900 and certain other bills, where H.Amdt.
256 appears as amendment number 16. See also page 9 of H.Rept. 117-405, which summarizes the amendment as one
that “Allows the Navy to retire nine Littoral Combat Ships (LCSs).”
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(4) The estimates of both the cost of the contract and the anticipated cost avoidance through
the use of a contract authorized under subsection (a) are realistic, including a description
of the basis for such estimates.
(5) The use of such a contract will promote the national security of the United States.
(d) MILESTONE DECISION AUTHORITY DEFINED.—In this section, the term
‘‘milestone decision authority’’ has the meaning given the term in section 4251(d) of title
10, United States Code.
Regarding Section 123, S.Rept. 117-130 states
Block buy contracts for Ship-to-Shore Connector program (sec. 123)
The committee recommends a provision that would permit the Navy to enter into one or
more block buy contracts for up to 10 Ship-to-Shore Connector class craft.
The committee notes the Navy has stated this proposal would promote industrial base
stability, production efficiencies, and cost savings when compared to a base contract plus
options via annual procurement cost estimate.
Consistent with committee precedent and other multi-year procurement authorities, this
provision would authorize up to the number of craft that would be procured in the future
years defense program. (Pages 6-7)
Section 126 of S. 4543 as reported by the committee states
SEC. 126. NAVY SHIPBUILDING WORKFORCE DEVELOPMENT INITIATIVE.
(a) IN GENERAL.—Chapter 863 of title 10, United States Code, is amended by adding at
the end the following new section:
‘‘§ 8696. Navy shipbuilding workforce development initiative.
‘‘(a) REQUIREMENT.—
‘‘(1) IN GENERAL.—The Secretary of the Navy shall ensure that any award for a covered
contract or contract modification includes a separate and distinct line item for workforce
development.
‘‘(2) COVERED CONTRACTS AND CONTRACT MODIFICATIONS.—For purposes
of this subsection, a covered contract or contract modification is a construction contract or
contract modification for the procurement of one or more naval vessels entered into using
funds from the Shipbuilding and Conversion, Navy account with a prime contractor that
will deliver such vessel or vessels to the Navy.
‘‘(3) AMOUNT OF LINE ITEM.—The amount of funding in a line item for workforce
development required under subsection (a)(1) shall be not less than one-half of one percent
and not more than one percent of the target price of the contract concerned.
‘‘(b) MATCHING CONTRIBUTION REQUIREMENT.—
‘‘(1) IN GENERAL.—Funds for a line item for workforce development required under
subsection
(a)(1) may be obligated only—
‘‘(A) on or after the date on which the service acquisition executive of the Navy receives
a written commitment from one or more entities described in paragraph (2) of a separate
and distinct cumulative contribution for workforce development; and
‘‘(B) in an amount that is—
‘‘(i) equal to the amount of the contribution described in subparagraph (A), if the
contribution is less than the amount of funding in the line item; or
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‘‘(ii) equal to the amount of funding in the line item, if the contribution is equal to or greater
than the amount of such funding.
‘‘(2) ENTITIES DESCRIBED.—The entities described in this paragraph are the
following:
‘‘(A) The prime contractor receiving the award described in subsection (a)(1).
‘‘(B) A qualified subcontractor.
‘‘(C) A State government or other State entity.
‘‘(D) A county government or other county entity.
‘‘(E) A local government or other local entity.
‘‘(c) AUTHORIZED ACTIVITIES.—
‘‘(1) IN GENERAL.—Funds for a line item for
workforce development required under subsection
(a)(1) may be used only to provide for the activities
described in paragraph (2) in support of the production and production support workforce
of the prime contractor concerned or a qualified subcontractor.
‘‘(2) ACTIVITIES DESCRIBED.—The activities described in this paragraph are the
following:
‘‘(A) The creation of short- and long-term workforce housing, transportation, and other
support services to facilitate attraction, relocation, and retention of workers.
‘‘(B) The expansion of local talent pipeline programs for both new and existing workers.
‘‘(C) Investments in long-term outreach in middle and high school programs, specifically
career and technical education programs, to promote and develop manufacturing skills.
‘‘(D) Facilities developed or modified for the primary purpose of workforce development.
‘‘(E) Direct costs attributable to workforce development.
‘‘(F) Attraction and retention bonus programs.
‘‘(G) On-the-job training to develop key manufacturing skills.
‘‘(d) APPROVAL REQUIREMENT.—The service acquisition executive of the Navy
shall—
‘‘(1) provide the final approval of the use of funds for a line item for workforce
development required under subsection (a)(1); and
‘‘(2) not later than 30 days after the date on which such approval is provided, certify to the
congressional defense committees compliance with the requirements of subsections (b) and
(c), including—
‘‘(A) a detailed explanation of such compliance; and
‘‘(B) the associated benefits to—
‘‘(i) the Federal Government; and
‘‘(ii) the shipbuilding industrial base of the Navy.
‘‘(e) QUALIFIED SUBCONTRACTOR DEFINED.—In this section, the term ‘qualified
subcontractor’ means a subcontractor to a prime contractor receiving an award described
in subsection (a)(1) that will deliver the vessel or vessels covered by the award to the
Navy.’’.
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(b) CLERICAL AMENDMENT.—The table of sections at the beginning of chapter 863
of such title is amended by adding at the end the following new item:
‘‘8696. Navy shipbuilding workforce development initiative.’’.
(c) APPLICABILITY.—Section 8696 of title 10, United States Code, as added by
subsection (a), shall apply with respect to contracts and contract modifications entered into
on or after June 1, 2023.
Regarding Section 126, S.Rept. 117-130 states
Navy shipbuilding workforce development initiative (sec. 126)
The committee recommends a provision that would require the incorporation of a Navy
shipbuilding workforce development initiative in certain contracts.
The committee notes that a Department of Defense report in response to section 1029 of
the William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year
2021 (Public Law 116–283) found, ‘‘The [Navy] shipbuilding industry faces a significant
challenge in achieving and sustaining required workforce levels, and the industrial base
today lacks the resiliency and bench strength to meet required demand. A consistent
demand for skilled labor is essential and must be accomplished through shipbuilding
policies that span 10-to-20-year periods . . . Current efforts to establish, accelerate, and
grow the labor workforce are imperative to shipbuilding execution and must be adequately
resourced, prioritized, scaled, and maintained over the next 20+ years. Workforce
investments must focus on enterprise vice single vendor shortfalls. The shipbuilding
enterprise must reimagine traditional approaches to manpower and bridge disconnects
between school-based education and defense skillsets.’’
The committee shares the concerns raised in this report regarding the ability of the Navy
shipbuilding workforce to meet current and projected demands over the next 20 years. In
the committee’s view, the situation has not improved since that report. Accordingly, the
committee supports this provision as a bold initiative that could provide an additional
avenue to ensure approved Navy workforce development initiatives receive adequate
funding. (Pages 7-8)
Section 351 of S. 4543 as reported by the committee states
SEC.
351.
IMPLEMENTATION
OF
COMPTROLLER
GENERAL
RECOMMENDATIONS
REGARDING
SHIPYARD
INFRASTRUCTURE
OPTIMIZATION PLAN OF THE NAVY.
(a) IN GENERAL.—Not later than March 1, 2023, the Secretary of the Navy shall—
(1) develop metrics for assessing progress of the Secretary toward improved shipyard
capacity and performance in carrying out the Shipyard Infrastructure Optimization Plan of
the Navy, including by measuring the effectiveness of capital investments;
(2) ensure that the shipyard optimization program office of the Navy—
(A) includes all costs, such as inflation, program office activities, utilities, roads,
environmental remediation, historic preservation, and alternative workspace when
developing a detailed cost estimate; and
(B) uses cost estimating best practices in developing a detailed cost estimate, including—
(i) a program baseline;
(ii) a work breakdown structure;
(iii) a description of the methodology and key assumptions;
(iv) a consideration of inflation;
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(v) a full assessment of risk and uncertainty; and
(vi) a sensitivity analysis; and
(3) obtain an independent cost estimate for the shipyard optimization program before
starting the prioritization of projects under such program.
(b) BRIEFING.—If the Secretary of the Navy is unable to implement the requirements
under subsection (a) by March 1, 2023, the Secretary shall brief the Committees on Armed
Services of the Senate and the House of
Representatives before such date on—
(1) the current progress of the Secretary towards implementing those requirements;
(2) any hindrance to implementing those requirements; and
(3) any additional resources necessary to implement those requirements.
Regarding Section 351, S.Rept. 117-130 states
Implementation of Comptroller General recommendations regarding Shipyard
Infrastructure Optimization Plan of the Navy (sec. 351)
The committee recommends a provision that would direct the Navy to implement the
remaining recommendations from the Government Accountability Office (GAO) report on
the Shipyard Infrastructure Optimization Plan (SIOP), published May 10, 2022, titled
‘‘Naval Shipyards: Ongoing Challenges Could Jeopardize Navy’s Ability to Improve
Shipyards’’ (GAO–22–105993). The committee concurs with the Comptroller General of
the United States that the Navy’s SIOP would benefit from factoring in all costs when
developing its second, more detailed cost estimates, using cost estimating best practices,
and obtaining independent cost estimates prior to the start of its project prioritization effort.
(Page 95)
Section 352 of S. 4543 as reported by the committee states
SEC. 352. RESEARCH AND ANALYSIS ON THE CAPACITY OF PRIVATE
SHIPYARDS IN THE UNITED STATES AND THE EFFECT OF THOSE SHIPYARDS
ON NAVAL FLEET READINESS.
(a) IN GENERAL.—Not later than 60 days after the date of the enactment of this Act, the
Secretary of the Navy shall enter into an agreement with a nonprofit entity or a federally
funded research and development center to conduct research and analysis regarding the
capacity and capability of private shipyards in the United States to repair, maintain, and
modernize surface combatants and support ships of the Navy to ensure fleet readiness.
(b) ELEMENTS.—The research and analysis conducted under subsection (a) shall include
the following:
(1) An assessment of the maintenance needs of the Navy during the five-year period
preceding the date of the enactment of this Act, including frequency of unplanned
maintenance and average time it takes to repair ships.
(2) An assessment of the projected maintenance needs of the Navy during the 10-year
period following such date of enactment.
(3) An assessment of whether current private shipyards in the United States have the
capacity to meet current and anticipated needs of the Navy to maintain and repair ships,
include whether there are adequate ship repair facilities and a sufficient trained workforce.
(4) An identification of barriers limiting success of intermediate-level and depot-level
maintenance availabilities, including constraints of adding private depot capacity and
capability.
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(5) Recommendations based on the findings of paragraphs (1) through (4) regarding actions
the Secretary of the Navy can take to ensure there is an industrial base of private ship repair
facilities to meet the needs of the Navy and ensure fleet readiness, including whether the
Secretary should institute a new force generation model, establish additional homeport
facilities, or establish new hub-type maintenance facilities.
(c) INPUT FROM PRIVATE SHIPYARDS.—In conducting research and analysis under
subsection (a), the nonprofit entity or federally funded research and development center
with whom the Secretary of the Navy entered into an agreement under subsection (a) shall
consult with private shipyards regarding—
(1) the fleet maintenance needs of surface combatant and support ships of the Navy;
(2) private shipyard capacity, including workforce; and
(3) additional investment in private shipyards necessary to meet the needs of the Navy.
(d) REPORT.—
(1) IN GENERAL.—Not later than 180 days after the date of the enactment of this Act,
the nonprofit entity or federally funded research and development center with whom the
Secretary of the Navy entered into an agreement under subsection (a) shall submit to the
Secretary a report on the results of the research and analysis undertaken under such
subsection.
(2) TRANSMITTAL TO CONGRESS.—Not later than 30 days after the Secretary
receives the report under paragraph (1), the Secretary shall transmit to the congressional
defense committees a copy of the report.
Section 1021 of S. 4543 as reported by the committee states
SEC. 1021. MODIFICATION TO ANNUAL NAVAL VESSEL CONSTRUCTION
PLAN.
Section 231(b)(2) of title 10, United States Code, is amended by adding at the end the
following new subparagraph:
‘‘(J) For any class of battle force ship for which the procurement of the final ship of the
class is proposed in the relevant future-years defense program submitted under section 221
of this title, a detailed plan that includes a description of specific impacts with respect to
the transition of such class and the associated industrial base to a new program, a modified
existing program, or no program. Each plan required by the preceding sentence shall
include a detailed schedule with planned decision points, solicitations, and contract
awards.’’.
Section 1022 of S. 4543 as reported by the committee states
SEC. 1022. AMPHIBIOUS WARSHIP FORCE STRUCTURE.
Section 8062 of title 10, United States Code, is amended—
(1) in subsection (b)—
(A) in the first sentence, by inserting ‘‘and not less than 31 operational amphibious warfare
ships, of which not less than 10 shall be amphibious assault ships’’ before the period; and
(B) in the second sentence—
(i) by inserting ‘‘or amphibious warfare ship’’ before ‘‘includes’’; and
(ii) by inserting ‘‘or amphibious warfare ship’’ before ‘‘that is temporarily unavailable’’;
(2) in subsection (e)—
(A) in paragraph (2) by striking ‘‘; and’’ and inserting a semicolon;
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(B) in paragraph (3) by striking the period at the end and inserting ‘‘; and’’; and
(C) by adding at the end the following new paragraph:
‘‘(4) the Navy adjusts scheduled maintenance and repair actions to maintain a minimum of
24 amphibious warfare ships operationally available for worldwide deployment.’’; and
(3) by adding at the end the following new subsection:
‘‘(g) In this section, the term ‘amphibious warfare ship’ means a ship that is classified as
an amphibious assault ship (general purpose) (LHA), an amphibious assault ship (multi-
purpose) (LHD), an amphibious transport dock (LPD), or a dock landing ship (LSD).’’.
Regarding Section 1022, S.Rept. 117-130 states
Amphibious warship force structure (sec. 1022)
The committee recommends a provision that would amend section 8062 of title 10, United
States Code, to require that the naval combat force should include not less than 31
operational amphibious warfare ships, of which not less than 10 should be amphibious
assault ships, and make other related changes. (Page 222)
Section 1023 of S.Rept. 117-130 as reported by the committee states
SEC. 1023. MODIFICATION TO LIMITATION ON DECOMMISSIONING OR
INACTIVATING A BATTLE FORCE SHIP BEFORE THE END OF EXPECTED
SERVICE LIFE.
(a) IN GENERAL.—Section 8678a(b) of title 10, United States Code, is amended—
(1) in paragraph (1), by inserting ‘‘with the budget materials submitted by the President
under section 1105(a) of title 31, United States Code, for the fiscal year in which such
waiver is sought’’ after ‘‘such ship’’; and
(2) in paragraph (2), by striking ‘‘such certification was submitted’’ and inserting ‘‘the
National Defense Authorization Act for such fiscal year is enacted’’.
(b) NO EFFECT ON CERTAIN SHIPS.—The amendments made by subsection (a) shall
have no effect on battle force ships (as defined in section 8678a(e) of title 10, United States
Code) proposed for decommissioning or inactivation in fiscal year 2023.
Section 1024 of S. 4543 as reported by the committee states
SEC. 1024. CONTRACT REQUIREMENTS RELATING TO MAINTENANCE AND
MODERNIZATION AVAILABILITIES FOR CERTAIN NAVAL VESSELS.
(a) SUBMARINE MAINTENANCE AND MODERNIZATION AVAILABILITIES.—
The Secretary of the Navy may only enter into a contract with a private entity for a
maintenance and modernization availability for a fast attack submarine that requires
drydocking the submarine if the following conditions are met:
(1) The submarine is a Virginia-class submarine.
(2) The submarine has not conducted a previous drydock availability.
(3) The work package for the contract is sufficiently detailed and provided to the private
entity with sufficient time to enable a high-confidence contracting strategy for—
(A) planning;
(B) material procurement;
(C) cost;
(D) schedule; and
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(E) performance.
(4) At least 70 percent of the work package for the contract is common to the work
packages for previous contracts entered into under this subsection.
(b) SURFACE SHIP MAINTENANCE AND MODERNIZATION AVAILABILITIES.—
In awarding contracts for maintenance and modernization availabilities for surface ships,
issuing task orders for such availabilities, or carrying out other contracting actions with
respect to such availabilities, the Secretary of the Navy may not limit evaluation factors to
price only.
Regarding Section 1024, S.Rept. 117-130 states
Contract requirements relating to maintenance and modernization availabilities for
certain naval vessels (sec. 1024)
The committee recommends a provision that would stipulate certain requirements for fast
attack submarine and surface ship maintenance and modernization availabilities.
The committee believes that contracting with a private sector shipyard for fast attack
submarine maintenance and modernization availabilities that require drydocking should be
limited to the newest Virginia-class submarines with as repeatable a scope of work as
possible in order to improve cost and schedule outcomes, as well as provide greater
stability, predictability, and learning in the industrial base.
The committee is concerned that lowest price technically acceptable and other Navy ship
repair contracting strategies that heavily weight proposal price as an evaluation factor have
led to poor outcomes in surface ship maintenance and modernization availabilities. (Page
222)
Regarding Section 1024, an October 18, 2022, Statement of Administration Policy regarding S.
4543 states (emphasis as in original):
Contract Requirements Relating to Maintenance and Modernization Availabilities
for Certain Naval Vessels. The Administration opposes section 1024(a), which would
limit the Navy’s ability to contract with a private entity for fast attack submarine
maintenance and modernization availabilities. Section 1024(a) would adversely affect the
schedule of maintenance, prevent the Navy from awarding Los Angeles-class submarine
maintenance work, and harm the Navy’s readiness and warfighter capability. The Navy
relies on private industry to conduct emergent submarine repairs, but this provision would
prevent the Navy from using private shipyards to execute unplanned repairs. Maintaining
this flexibility is critical to ensuring support for operational commanders.53
Section 1025 of S. 4543 as reported by the committee states
SEC. 1025. PROHIBITION ON RETIREMENT OF CERTAIN NAVAL VESSELS.
None of the funds authorized to be appropriated by this Act for fiscal year 2023 may be
obligated or expended to retire, prepare to retire, or place in storage any of the following
naval vessels:
(1) USS Vicksburg (CG 69).
(2) USS Sioux City (LCS 11).
(3) USS Wichita (LCS 13).
(4) USS Billings (LCS 15).

53 Executive Office of the President, Office of Management and Budget, Statement of Administration Policy, S. 4543—
James M. Inhofe National Defense Authorization Act for Fiscal Year 2023 (Sen. Reed, D-RI), October 18, 2022, pp. 6-
7.
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(5) USS Indianapolis (LCS 17).
(6) USS St. Louis (LCS 19).
(7) USS Germantown (LSD 42).
(8) USS Gunston Hall (LSD 44).
(9) USS Tortuga (LSD 46).
(10) USS Ashland (LSD 48).
(11) USNS Montford Point (T–ESD 1).
(12) USNS John Glenn (T–ESD 2).
Regarding Section 1025, S.Rept. 117-130 states
Prohibition on retirement of certain naval vessels (sec. 1025)
The committee recommends a provision that would prohibit the retirement of certain naval
vessels in fiscal year 2023.
The committee notes the budget request proposed to decommission 24 battle force ships in
fiscal year 2023, which represents 8 percent of the Navy’s 298 ship battle force. Of these
24 ships, 8 ships are at or beyond their expected service life (ESL) and 16 ships would be
retired prior to ESL. The average service life remaining in the early retirements is 16 years.
The committee is concerned that retiring battle force ships prior to ESL would result in
unacceptable risk to meeting fleet commanders’ near- and mid-term requirements.
Furthermore, the committee believes replacing these vessels would not occur quickly or
affordably with the average replacement unit cost for these 16 vessels exceeding $1.0
billion.
The budget request proposed retiring five Ticonderoga-class cruisers over the next 5 years,
including one cruiser in fiscal year 2023, which will complete extended modernization
periods in fiscal year 2023 or 2024. The committee finds this unacceptable. The committee
understands each of these ships has received in excess of $500.0 million to complete the
current modernization period, with a total of $3.0 billion obligated on these ships through
September 30, 2021. Work completed on these modernizations ranges from 57 percent to
93 percent. The Navy estimates that $407.0 million in total additional funding is required
to complete the modernization of these ships and return all five to the fleet. The committee
also notes previous Navy officials have testified that this extended modernization program
would result in some of the most capable surface combatants in the Navy, with an extended
40-year service life.
Accordingly, consistent with several years of Navy plans and budget requests, as well as
congressional authorizations and appropriations, the committee believes the Navy should
complete the extended modernization program on each of these five cruisers, return the
ships to service and achieve a 40-year service life. Moreover, it is unclear to the committee
how the Navy’s more ambitious near-term modernization plans for destroyers, including
back fitting a SPY–6 radar and installing a larger electronic warfare system, could succeed
if the Navy cannot manage the cruiser phased modernization program.
Overall, the committee recommends retaining 12 of the 16 ships proposed for divestment
prior to ESL to better support the National Defense Strategy, enable additional capability
development and experimentation, and be better positioned to realize the policy of the
United States to achieve a 355-ship Navy as soon as practicable.
The committee urges the Secretary of the Navy to pursue Excess Defense Article transfers
to allies and partners, as well as other actions he may deem appropriate, to continue use of
any appropriate vessels retired prior to or after ESL. (Pages 222-223)
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Regarding sections 1022, 1023, and 1025, as well as recommended advance procurement (AP)
funding for the LPD-17 program (see Table 4), an October 18, 2022, Statement of Administration
Policy regarding S. 4543 states (emphasis as in original):
Naval Force Structure. The Administration opposes sections 1022, 1023, and 1025,
which would unduly constrain evolutions in joint warfighting approaches and associated
capability prioritization. The Administration urges Congress not to add Advanced
Procurement funding to Landing, Platform, Dock (LPD)-33. The Department remains
focused on investing in the right mix of capabilities, including future amphibious
platforms, to deliver the ships the Joint Force needs to campaign in the Indo-Pacific region
and implement the 2022 NDS.54
Section 1261 of S.Rept. 117-130 states
SEC. 1261. REPORT ON FIFTH FLEET CAPABILITIES UPGRADES.
(a) IN GENERAL.—Not later than 180 days after the date of the enactment of this Act, the
Secretary of Defense shall submit to the congressional defense committees a report on—
(1) capabilities upgrades necessary to enable the Fifth Fleet to address emerging threats in
its area of responsibility; and
(2) any costs associated with such upgrades.
(b) ELEMENTS.—The report required by subsection
(a) shall include the following:
(1) An assessment of seaborne threats posed by Iran, and groups linked to Iran, to the
military forces of United States allies and partners operating in the waters in and around
the broader Middle East.
(2) A description of any capabilities upgrades necessary to enable the Fifth Fleet to address
such threats.
(3) An estimate of the costs associated with any such upgrades.
(4) A description of any United States plan to deepen cooperation with other member
countries of the Combined Maritime Forces at the strategic, policy, and functional levels
for the purpose of addressing such threats, including by—
(A) enhancing coordination on defense planning;
(B) improving intelligence sharing; and
(C) deepening maritime interoperability.
(c) BROADER MIDDLE EAST DEFINED.—In this section, the term ‘‘broader Middle
East’’ means—
(1) the land around the southern and eastern shores of the Mediterranean Sea;
(2) the Arabian Peninsula;
(3) Iran; and
(4) North Africa.
Regarding Section 1261, S.Rept. 117-130 states
Report on Fifth Fleet capabilities upgrades (sec. 1261)

54 Executive Office of the President, Office of Management and Budget, Statement of Administration Policy, S. 4543—
James M. Inhofe National Defense Authorization Act for Fiscal Year 2023 (Sen. Reed, D-RI), October 18, 2022, p. 5.
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The committee recommends a provision that would require the Secretary of Defense to
submit a report on capabilities upgrades, and the cost of such upgrades, necessary to enable
the Fifth Fleet to address emerging threats in its area of responsibility.
The committee is concerned about the ability of United States, ally, and partner forces in
the Middle East to share information in a timely and coherent manner regarding seaborne
threats. Strengthening maritime domain awareness in the waters in and around the broader
Middle East will enable the United States and partner naval forces to deter and defend
against Iran’s seaborne attacks, naval harassment and other provocations. The committee
recommends that the Commander, U.S. Central Command, take steps to deepen the shared
understanding of regional maritime threats between United States, ally, and partner naval
forces, including by coordinating and fusing intelligence with partner forces, enhancing the
ability of United States and partner forces to rapidly deploy intelligence, surveillance, and
reconnaissance capabilities, and incorporating Israel into the Combined Maritime Forces.
(Page 256)
Section 1521 of S. 4543 as reported by the committee states
SEC. 1521. LIMITATION ON USE OF FUNDS FOR NAVAL NUCLEAR FUEL
SYSTEMS BASED ON LOW-ENRICHED URANIUM.
(a) LIMITATION.— None of the funds authorized to be appropriated for fiscal year 2023
for the National Nuclear Security Administration for the purposes of conducting research
and development of an advanced naval nuclear fuel system based on low-enriched uranium
may be obligated or expended until the following determinations are submitted to the
congressional defense committees:
(1) A determination made jointly by the Secretary of Energy and the Secretary of Defense
with respect to whether the determination made jointly by the Secretary of Energy and the
Secretary of the Navy pursuant to section 3118(c)(1) of the National Defense Authorization
Act for Fiscal Year 2016 (Public Law 114–92; 129 Stat. 1196) and submitted to the
congressional defense committees on March 25, 2018, that the United States should not
pursue research and development of an advanced naval nuclear fuel system based on low-
enriched uranium, remains valid.
(2) A determination by the Secretary of the Navy with respect to whether an advanced
naval nuclear fuel system based on low-enriched uranium can be produced that would not
reduce vessel capability, increase expense, or reduce operational availability as a result of
refueling requirements.
(b) REPORT REQUIRED.—Not later than 60 days after the date of the enactment of this
Act, the Administrator for Nuclear Security shall submit to the congressional defense
committees a report on activities conducted using amounts made available for fiscal year
2022 for nonproliferation fuels development, including a description of any progress made
toward technological or nonproliferation goals as a result of such activities.
S.Rept. 117-130 also states
LHA–9 quantity adjustment
The budget request included $1.1 billion in line number 20 of Shipbuilding and
Conversion, Navy (SCN) for LHA Replacement. The budget documentation also includes
a quantity of one for LHA–9.
This is in direct violation of section 126 of the William M. (Mac) Thornberry National
Defense Authorization Act for Fiscal Year 2021 (Public Law 116–283), which stated that
the quantity shown for Navy vessels would be shown in the year that the Congress
authorizes and appropriates funding to buy a vessel. The Congress authorized construction
and appropriated funds for construction of LHA–9 in fiscal year 2020.
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Therefore, the funding tables have been adjusted to reflect that the Navy budget
documentation incorrectly included a ‘‘one’’ in the quantity column. (Page 14)
S.Rept. 117-130 also states
Assessment of Navy cruiser modernization program
The committee is concerned about the Navy’s plan to retire five recently modernized
Ticonderoga-class cruisers over the next 5 years, including one cruiser (USS Vicksburg)
in fiscal year 2023. Through fiscal year 2021, the Navy has spent more than $3.0 billion
on the cruiser modernization program, also known as the ‘‘2–4–6’’ program, and estimates
another $407.0 million in total additional funding is required to complete the modernization
of these five ships and return them to the fleet.
The Navy’s initial plan for the 2–4–6 program included placing 11 cruisers incrementally
into a reduced operating status for maintenance and modernization in order to extend the
ships’ service lives to 40 years and provide the ships with a significant capability upgrade.
However, under the Navy’s current plan, these ships will be decommissioned with between
30 and 36 years of service. The committee is concerned that the Navy invested significantly
in modernizing cruisers that the fleet will be given little to no opportunity to use
operationally.
Moreover, the committee is concerned that these early cruiser decommissionings will result
in further reduction of the Navy’s surface combatant fleet, which will exacerbate the stress
and operational tempo of the remaining ships and their crews.
Given the significant potential lost investment, as well as the implications on the Navy’s
readiness and future shipbuilding plans, the committee directs the Comptroller General of
the United States to assess:
(1) The expected benefits and cost savings associated with the 2–4–6 program and the
analysis the Navy used to support its plan;
(2) The contracting strategy used to support the 2–4–6 program;
(3) Cost, schedule, and performance challenges in executing the 2–4–6 program;
(4) Costs, benefits, and risks of early decommissioning of cruisers in light of the 2–4–6
program performance to date;
(5) Any additional issues that the Comptroller General may feel is appropriate.
The committee directs the Comptroller General to provide a briefing to the committee, not
later than December 1, 2022, on the preliminary findings of its assessment, with a report
to follow. (Pages 23-24)
S.Rept. 117-130 also states
Comptroller General review of operational testing for Navy ships
The committee notes that when effectively used, operational testing provides timely
information to determine whether or not Navy ships and other weapon systems will achieve
their desired results. The data generated through this testing can be used to improve the
remaining ships in a class and their critical systems before they reach the fleet, as well as
the designs of future ship classes.
The committee further notes that the Government Accountability Office has found that
operational testing revealed significant concerns with the performance of a number of new
ship classes. For example, the Director of Operational Test and Evaluation found during
operational testing that one variant of the Littoral Combat Ship could not achieve the range
requirements for the ship—a critical parameter of ship performance. Further, operational
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testing exposed common issues across ship classes, such as concerns with cybersecurity,
lethality, and survivability.
To support operational testing, the committee understands the Navy uses its current self-
defense test ship, the ex-USS Paul F. Foster, to test ship systems that cannot be sufficiently
tested on crewed Navy ships or through simulations. However, this test ship will no longer
be in a ready state after 2025. With a replacement solution still not determined, the
committee is concerned that the Navy risks impairing its ability to perform operationally
realistic testing for a number of critical programs.
The committee also understands the Navy will be conducting operational testing over the
next 5 years for the Zumwalt-class destroyer and the Ford-class aircraft carrier—two of the
Navy’s most expensive and challenging acquisitions over the past decade—as well as the
newest variant of Arleigh Burke-class destroyer with advanced air and missile defense
radar technologies. With these new ships and future lead ships, like the new Constellation-
class frigate, it is critical to ensure that the Navy takes action to address issues identified
through operational testing that could affect the ability of the Nation’s sailors to effectively,
safely, and reliably conduct assigned missions.
Therefore, the committee directs the Comptroller General of the United States to assess the
adequacy of current and planned operational testing for Navy shipbuilding programs,
including: (1) The policies and procedures used to develop test plans and operationally test
Navy vessels; (2) The extent to which Navy vessels meet expectations during operational
testing; (3) The extent to which operational test results are used by the Navy to inform
changes to its shipbuilding programs; (4) Changes, if any, in the test and evaluation
approach based on changes in the threat environment; (5) The Navy’s plans for a self-
defense test ship replacement; and (6) The implications for Navy acquisition programs.
The Comptroller General shall provide a briefing to the Committees on Armed Services of
the Senate and the House of Representatives on preliminary findings, not later than June
30, 2023, and submit a report to the congressional defense committees on an agreed-upon
date. (Page 77)
Regarding certain funding lines (e.g., line 1B1B) in the Operations and Maintenance, Navy
(OMN) appropriation account, S.Rept. 117-130 states
Continued ship operations
The budget request included a Navy proposal to decommission 24 battle force ships in
fiscal year 2023, which represents 8 percent of the Navy’s 298 ship battle force. Of these
24 ships, only eight ships are at or beyond their expected service life (ESL), and 16 ships
would be retired prior to ESL.
Consistent with provisions elsewhere in this Act that would establish a floor of not fewer
than 31 operational amphibious warfare ships and would prevent early retirement of other
retiring battle force ships prior to ESL, the committee recommends increases in Operation
and Maintenance, Navy (OMN) to restore funding for 12 ships:
(1) OMN (1B1B)—$153.0 million;
(2) OMN (1B4B)—$115.8 million; and
(3) OMN (1B5B)—$446.4 million. (Pages 102-103)
S.Rept. 117-130 also states
Comptroller General review of naval force generation
The committee notes that nearly a decade ago the Navy implemented a revised operational
schedule, the Optimized Fleet Response Plan (OFRP), to address several problems that
developed as a result of the Navy executing heavy operational demands. These included
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increased ship deployment lengths, reduced or deferred maintenance, declining ship
conditions across the fleet, and longer maintenance periods. The Navy’s ability to generate
sufficient, ready naval forces, currently through OFRP, is premised on adherence to more
sustainable deployment, training, and maintenance schedules.
However, the Navy has faced persistent challenges in implementing OFRP since its
inception. For example, the Navy has experienced ongoing difficulties with ship
maintenance timeliness that have reduced ship availability for training and operations. In
addition, the surface fleet continues to defer required maintenance, leading to a
maintenance backlog of $1.7 billion in 2021 and contributing to the Navy’s proposal to
decommission ships before the end of their useful life. Moreover, the Navy faces
challenges in implementing training for the high-end fight, limiting deployment lengths,
and maintaining ship readiness after deployment to provide for surge capacity.
Given these and other challenges, the committee remains concerned about the Navy’s
approach to force generation for its ships and submarines. Therefore, the committee directs
the Comptroller General of the United States to assess the following:
(1) The extent to which the Navy’s force generation assumptions and approaches for
maintenance is realistic and consistent with ship class maintenance plans, shipyard
capacity, actual maintenance execution and other relevant factors;
(2) The extent to which the Navy’s current force generation approach incorporates
sufficient training time for units to obtain required certifications and proficiencies to
counter advanced adversaries;
(3) A comparison of the Navy’s current force generation approach to those employed by
the U.S. Coast Guard and allies and what best practices, if any, can be leveraged to enhance
Navy force generation;
(4) The extent to which the Navy has considered options to revise its force generation
model to enhance its efficiency and effectiveness at generating ready naval forces; and
(5) Any other related matters the Comptroller General considers appropriate.
The committee further directs the Comptroller General to provide a briefing to the
committee not later than April 1, 2023, on the Comptroller General’s preliminary findings
and to present final results in a format and timeframe agreed to at the time of the briefing.
(Pages 117-118)
FY2023 DOD Appropriations Act (H.R. 8236/S. 4663)
House
The House Appropriations Committee, in its report (H.Rept. 117-388 of June 24, 2022) on H.R.
8236, recommended the funding levels shown in the HAC column of Table 4. These funding
levels provide for, among other things, the procurement of the eight new ships requested by the
Navy for procurement in FY2023.
Section 8016 of H.R. 8236 as reported by the committee states
SEC. 8016. None of the funds in this Act may be available for the purchase by the
Department of Defense (and its departments and agencies) of welded shipboard anchor and
mooring chain unless the anchor and mooring chain are manufactured in the United States
from components which are substantially manufactured in the United States: Provided,
That for the purpose of this section, the term ‘‘manufactured’’ shall include cutting, heat
treating, quality control, testing of chain and welding (including the forging and shot
blasting process): Provided further, That for the purpose of this section substantially all of
the components of anchor and mooring chain shall be considered to be produced or
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manufactured in the United States if the aggregate cost of the components produced or
manufactured in the United States exceeds the aggregate cost of the components produced
or manufactured outside the United States: Provided further, That when adequate domestic
supplies are not available to meet Department of Defense requirements on a timely basis,
the Secretary of the Service responsible for the procurement may waive this restriction on
a case-by-case basis by certifying in writing to the Committees on Appropriations of the
House of Representatives and the Senate that such an acquisition must be made in order to
acquire capability for national security purposes.
Section 8100 of H.R. 8236 as reported by the committee states
SEC. 8100. None of the funds provided in this Act for requirements development,
performance specification development, concept design and development, ship
configuration development, systems engineering, naval architecture, marine engineering,
operations research analysis, industry studies, preliminary design, development of the
Detailed Design and Construction Request for Proposals solicitation package, or related
activities for the T–ARC(X) Cable Laying and Repair Ship or the T–AGOS(X)
Oceanographic Surveillance Ship may be used to award a new contract for such activities
unless these contracts include specifications that all auxiliary equipment, including pumps
and propulsion shafts, are manufactured in the United States.
Section 8101 of H.R. 8236 as reported by the committee states
SEC. 8101. None of the funds made available by this Act may be obligated or expended
for the purpose of decommissioning the USS Fort Worth, the USS Wichita, the USS
Billings, the USS Indianapolis, or the USS St. Louis.
Regarding Section 8101, H.Rept. 117-388 states
LITTORAL COMBAT SHIPS
The Committee is disappointed to see the list of vessels the Navy is requesting to
decommission in fiscal year 2023, particularly the littoral combat ships that were
commissioned in 2019 and 2020. The Committee understands that the proposed use of
these vessels does not meet the Navy’s original intent. However, decommissioning them
at this time is a waste of taxpayer funds.
Therefore, the Committee has included bill language that would restore the four ships that
are only two to three years old and the USS Fort Worth. The Committee directs the
Secretary of the Navy to provide a report to the congressional defense committees not later
than 60 days after the enactment of this Act that would provide alternate uses for these
vessels, such as missions in the Southern Command and Africa Command areas of
responsibility. The report should also include any costs for additional components that are
necessary to execute these missions. (Page 8)
Senate
The explanatory statement for S. 4663 released by the Senate Appropriations Committee on July
28, 2022, recommended the funding levels shown in the SAC column of Table 4.55 These funding

55 Regarding lines 029 and 029A in Table 4, the Navy’s funding request for line 29 included, among other things, a
request for $47.2 million for the procurement of an auxiliary personnel lighter (APL). The Navy’s FY2023 budget
submission describes an APL as a vessel that “provides critical berthing and messing facilities for sailors while their
ships are in port for availabilities and Inter-Deployment Training Cycles (IDTC).” It further states that “The FY 2022
budget included funds [within the line item for service craft] for [procuring] 1 APL and 1 YRBM [i.e., berthing barge].
Based on funding limitations, the Navy plans [to use the FY2022 funding for service craft] to procure 2 additional
YRBMs instead of an APL....” (Department of Defense, Fiscal Year (FY) 2023 Budget Estimates, Navy, Justification
Book Volume 1 of 1, Shipbuilding and Conversion, Navy, April 2022, p. 391, 392.) The Senate Appropriations
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levels provide for, among other things, the procurement of 13 new ships—the eight requested by
the Navy for procurement in FY2023, plus six additional ships and landing craft, including
 one additional DDG-51 destroyer;
 two additional Expeditionary Fast Transport ships (EPFs), to be built as medical
ships; and
 three additional Ship-to-Shore Connectors (SSCs) (i.e., landing craft).
Section 8016 of S. 4663 as released by the committee on July 28, 2022, states
SEC. 8016. None of the funds in this Act may be available for the purchase by the
Department of Defense (and its departments and agencies) of welded shipboard anchor and
mooring chain unless the anchor and mooring chain are manufactured in the United States
from components which are substantially manufactured in the United States: Provided,
That for the purpose of this section, the term ‘‘manufactured’’ shall include cutting, heat
treating, quality control, testing of chain and welding (including the forging and shot
blasting process): Provided further, That for the purpose of this section substantially all of
the components of anchor and mooring chain shall be considered to be produced or
manufactured in the United States if the aggregate cost of the components produced or
manufactured in the United States exceeds the aggregate cost of the components produced
or manufactured outside the United States: Provided further, That when adequate domestic
supplies are not available to meet Department of Defense requirements on a timely basis,
the Secretary of the Service responsible for the procurement may waive this restriction on
a case-by-case basis by certifying in writing to the Committees on Appropriations of the
House of Representatives and the Senate that such an acquisition must be made in order to
acquire capability for national security purposes.
Section 8094 of S. 4663 as released by the committee states
SEC. 8094. Of the amounts appropriated in this Act for ‘‘Shipbuilding and Conversion,
Navy’’, $133,000,000, to remain available for obligation until September 30, 2027, may
be used for the purchase of two used sealift vessels for the National Defense Reserve Fleet,
established under section 11 of the Merchant Ship Sales Act of 1946 (46 U.S.C. 57100):
Provided, That such amounts are available for reimbursements to the Ready Reserve Force,
Maritime Administration account of the United States Department of Transportation for
programs, projects, activities, and expenses related to the National Defense Reserve Fleet:
Provided further, That notwithstanding section 2218 of title 10, United States Code, none
of these funds shall be transferred to the National Defense Sealift Fund for execution.
Section 8101 of S. 4663 as released by the committee states
SEC. 8101. None of the funds provided in this Act for requirements development,
performance specification development, concept design and development, ship
configuration development, systems engineering, naval architecture, marine engineering,
operations research analysis, industry studies, preliminary design, development of the
Detailed Design and Construction Request for Proposals solicitation package, or related
activities for the T–ARC(X) Cable Laying and Repair Ship or the T–AGOS(X)
Oceanographic Surveillance Ship may be used to award a new contract for such activities
unless these contracts include specifications that all auxiliary equipment, including pumps
and propulsion shafts, are manufactured in the United States.

Committee’s explanatory statement for S. 4663 in effect recommends transferring the $47.2 million requested for the
procurement of an APL from line 029 to a newly created line 029A, and recommends increasing the amount requested
for the procurement of the APL by $16 million, resulting in a total recommended amount for line 029A of $63.2
million. The recommended increase of $16 million is shown in the committee’s explanatory statement in a supporting
table on page 114.
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The explanatory statement states
Domestic Source Content for Navy Shipbuilding Critical Components.—The Committee is
concerned about the fragility of the domestic shipbuilding supplier base and the lack of
comprehensive reporting regarding domestic sources to allow the Navy and Congress to
better assess the health of the shipbuilding industrial base and particularly single and
limited source critical suppliers. Therefore, with submission of the fiscal year 2024
President’s budget request, the Secretary of the Navy is directed to submit to congressional
defense committees a report in writing assessing the domestic source content of any
procurements carried out as part of a Navy shipbuilding program; identifying critical
components that are available from only one or a few suppliers in the United States; and,
providing recommendations to expand productive capacity in the United States. In
conducting this assessment, the Navy shall report according to the physical location of
manufacturing of critical components, not by the location of sale. The report may be
submitted in unclassified and classified format. Additionally, the Secretary shall establish
an information repository for the collection of supplier information that can be used for
continuous data analysis and program management activities.
The Committee is particularly concerned with the structuring of shipbuilding acquisition
programs where initial acquisition cost of components may be prioritized, in some cases
leading to selection of foreign components that do not meet specifications, incur higher life
cycle costs, and negatively impact the domestic supplier base causing cost increases to
these components provided to other Navy programs. Therefore, the Committee encourages
the Secretary of the Navy to give priority to domestic sourcing for critical components on
future programs, including programs in pre-systems acquisitions phase, such as DDG(X),
where power requirements and reliability are paramount. Critical components are any
communications, damage control, engineering, navigation, and seamanship equipment
required to safely get or remain underway, and at a minimum should include: gas turbine
and diesel main engines, generators, generator prime movers, main reduction gears, main
propulsion shafting, and propellers and propeller castings. (Pages 115-116)

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Appendix A. Earlier Navy Force-Structure Goals
Dating Back to 2001
The table below shows earlier Navy force-structure goals dating back to 2001. The 308-ship
force-level goal of March 2015, shown in the first column of the table, is the goal that was
replaced by the 355-ship force-level goal released in December 2016.
Table A-1. Earlier Navy Force-Structure Goals Dating Back to 2001
Changes
Early-2005
2002-
to
Navy goal
2004
2001
~310-
Revised
February
February
for fleet of
Navy QDR
308-
306-
316
313-ship
2006 313-
2006
260-325
goal
goal
ship
ship
ship
goal of
ship goal
Navy
ships
for
for
goal of goal of
goal of
Septem-
announced
goal for
375-
310-
March January
March
ber
through
313-ship
260-
325-
ship
ship
Ship type
2015
2013
2012
2011
mid-2011
fleet
ships ships Navya Navy
Ballistic missile submarines
12b
12b
12-14b
12b
12b
14
14
14
14
14
(SSBNs)
Cruise missile submarines
0c
0c
0-4c
4c
0c
4
4
4
4
2 or
(SSGNs)
4d
Attack submarines (SSNs)
48
48
~48
48
48
48
37
41
55
55
Aircraft carriers
11e
11e
11e
11e
11e
11f
10
11
12
12
Cruisers and destroyers
88
88
~90
94
94g
88
67
92
104
116
Frigates
0
0
0
0
0
0
0
0
0
Littoral Combat Ships (LCSs)
52
52
~55
55
55
55
63
82
56
0
Amphibious ships
34
33
~32
33
33h
31
17
24
37
36
MPF(F) shipsi
0j
0j
0j
0j
0j
12i
14i
20i
0i
0i
Combat logistics (resupply) ships
29
29
~29
30
30
30
24
26
42
34
Dedicated mine warfare ships
0
0
0
0
0
0
0
0
26k
16
Joint High Speed Vessels (JHSVs)
10l
10l
10l
10l
21l
3
0
0
0
0
Otherm
24
23
~23
16
24n
17
10
11
25
25
Total battle force ships
308
306
~310-
313
328
313
260
325
375
310
316
or
312
Source: Table prepared by CRS based on U.S. Navy data.
Notes: QDR = Quadrennial Defense Review. The “~” symbol means approximately.
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 Columbia (SSBN-826) Class 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 0.
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
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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.
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—specifically, 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. AFSBs are now called Expeditionary Sea Base ships (ESBs).
k. The figure of 26 dedicated mine warfare ships included 10 ships maintained in a reduced mobilization status
called 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 goal 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.
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Appendix B. Comparing Past Ship Force Levels to
Current or Potential Future 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 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 FY1987,56 and as of November 22, 2022, included a total of
292 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 multitheater
NATO-Warsaw Pact conflict, while the November 2022 fleet is intended to meet a considerably
different set of mission requirements centered on countering China’s improving naval capabilities
and, secondarily, Russia’s naval capabilities. In addition, the Navy of FY1987 differed
substantially from the November 2022 fleet in areas such as profusion of precision-guided
weapons and the sophistication of C4ISR systems and networking capabilities.57
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.58
The 568-ship fleet of FY1987 may or may not have been capable of performing its stated
missions; the 292-ship fleet of November 2022 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 performing its stated missions. Given changes over time in mission requirements, ship
mixes, and technologies, however, these past, present, and future relationships of Navy ship totals
to stated Navy missions are to a substantial degree independent of one another.

56 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.
57 C4ISR stands for command and control, communications, computers, intelligence, surveillance, and reconnaissance.
58 For more on Navy programs for developing high-energy shipboard lasers, see CRS Report R44175, Navy Shipboard
Lasers: Background and Issues for Congress, by Ronald O'Rourke.
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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 294-ship Navy of September 2021 was
appropriately sized for meeting the mission requirements of 2021, even though there were
differences of opinion among observers on that question, simply because a figure of 294 ships
appears in the historical records for 2021, 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 G-1.
Previous Navy force structure plans, such as those shown in Table A-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 goal 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.59

59 Navy force structure plans that predate those shown in Table A-1 include the Reagan-era 600-ship goal 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
Aircraft carriers
15e
12
11+1f
11+1f
Surface combatants
242/228g
~150
~124
116
Amphibious ships
~75h
51i
41i
36i
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Source: Prepared by CRS based on DOD and U.S. Navy data.
a. Commonly referred to as 450-ship goal, 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.
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Appendix C. Industrial Base and Employment
Aspects of Additional Shipbuilding Work
This appendix presents background information on the ability of the industrial base to take on the
additional shipbuilding work associated with achieving and maintaining the Navy’s 355-ship
force-level goal and on the employment impact of additional shipbuilding work.
Industrial Base Ability
The U.S. shipbuilding industrial base has some unused capacity to take on increased Navy
shipbuilding work, particularly for certain kinds of surface ships, and its capacity could be
increased further over time to support higher Navy shipbuilding rates. Navy shipbuilding rates
could not be increased steeply across the board overnight—time (and investment) would be
needed to hire and train additional workers and increase production facilities at shipyards and
supplier firms, particularly for supporting higher rates of submarine production. Depending on
their specialties, newly hired workers could be initially less productive per unit of time worked
than more experienced workers.
Some parts of the shipbuilding industrial base, such as the submarine construction industrial base,
could face more challenges than others in ramping up to the higher production rates required to
build the various parts of the 355-ship fleet. Over a period of a few to several years, with
investment and management attention, Navy shipbuilding could ramp up to higher rates for
achieving a 355-ship fleet over a period of 20-30 years.
An April 2017 CBO report stated that
all seven shipyards [currently involved in building the Navy’s major ships] would need to
increase their workforces and several would need to make improvements to their
infrastructure in order to build ships at a faster rate. However, certain sectors face greater
obstacles in constructing ships at faster rates than others: Building more submarines to
meet the goals of the 2016 force structure assessment would pose the greatest challenge to
the shipbuilding industry. Increasing the number of aircraft carriers and surface combatants
would pose a small to moderate challenge to builders of those vessels. Finally, building
more amphibious ships and combat logistics and support ships would be the least
problematic for the shipyards. The workforces across those yards would need to increase
by about 40 percent over the next 5 to 10 years. Managing the growth and training of those
new workforces while maintaining the current standard of quality and efficiency would
represent the most significant industrywide challenge. In addition, industry and Navy
sources indicate that as much as $4 billion would need to be invested in the physical
infrastructure of the shipyards to achieve the higher production rates required under the
[notional] 15-year and 20-year [buildup scenarios examined by CBO]. Less investment
would be needed for the [notional] 25-year or 30-year [buildup scenarios examined by
CBO].60
A January 13, 2017, press report states the following:
The Navy’s production lines are hot and the work to prepare them for the possibility of
building out a much larger fleet would be manageable, the service’s head of acquisition
said Thursday.
From a logistics perspective, building the fleet from its current 274 ships to 355, as
recommended in the Navy’s newest force structure assessment in December, would be

60 Congressional Budget Office, Costs of Building a 355-Ship Navy, April 2017, pp. 9-10.
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straightforward, Assistant Secretary of the Navy for Research, Development and
Acquisition Sean Stackley told reporters at the Surface Navy Association’s annual
symposium.
“By virtue of maintaining these hot production lines, frankly, over the last eight years, our
facilities are in pretty good shape,” Stackley said. “In fact, if you talked to industry, they
would say we’re underutilizing the facilities that we have.”
The areas where the Navy would likely have to adjust “tooling” to answer demand for a
larger fleet would likely be in Virginia-class attack submarines and large surface
combatants, the DDG-51 guided missile destroyers—two ship classes likely to surge if the
Navy gets funding to build to 355 ships, he said.
“Industry’s going to have to go out and procure special tooling associated with going from
current production rates to a higher rate, but I would say that’s easily done,” he said.
Another key, Stackley said, is maintaining skilled workers—both the builders in the yards
and the critical supply-chain vendors who provide major equipment needed for ship
construction. And, he suggested, it would help to avoid budget cuts and other events that
would force workforce layoffs.
“We’re already prepared to ramp up,” he said. “In certain cases, that means not laying off
the skilled workforce we want to retain.”61
A January 17, 2017, press report states the following:
Building stable designs with active production lines is central to the Navy’s plan to grow
to 355 ships. “if you look at the 355-ship number, and you study the ship classes (desired),
the big surge is in attack submarines and large surface combatants, which today are DDG-
51 (destroyers),” the Assistant Secretary of the Navy, Sean Stackley, told reporters at last
week’s Surface Navy Association conference. Those programs have proven themselves
reliable performers both at sea and in the shipyards.
From today’s fleet of 274 ships, “we’re on an irreversible path to 308 by 2021. Those ships
are already in construction,” said Stackley. “To go from there to 355, virtually all those
ships are currently in production, with some exceptions: Ohio Replacement, (we) just got
done the Milestone B there (to move from R&D into detailed design); and then upgrades
to existing platforms. So we have hot production lines that will take us to that 355-ship
Navy.”62
A January 24, 2017, press report states the following:
Navy officials say a recently determined plan to increase its fleet size by adding more new
submarines, carriers and destroyers is “executable” and that early conceptual work toward
this end is already underway....
Although various benchmarks will need to be reached in order for this new plan to come
to fruition, such as Congressional budget allocations, Navy officials do tell Scout Warrior
that the service is already working—at least in concept—on plans to vastly enlarge the
fleet. Findings from this study are expected to inform an upcoming 2018 Navy
Shipbuilding Plan, service officials said.63

61 Hope Hodge Seck, “Navy Acquisition Chief: Surge to 355 Ships ‘Easily Done,’” DoD Buzz, January 13, 2017.
62 Sydney J. Freedberg Jr., “Build More Ships, But Not New Designs: CNO Richardson To McCain,” Breaking
Defense, January 17, 2017.
63 Kris Osborn, “Navy: Larger 355-Ship Fleet—‘Executable,’” Scout Warrior, January 24, 2017.
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A January 12, 2017, press report states the following:
Brian Cuccias, president of Ingalls Shipbuilding [a shipyard owned by Huntington Ingalls
Industries (HII) that builds Navy destroyers and amphibious ships as well as Coast Guard
cutters], said Ingalls, which is currently building 10 ships for four Navy and Coast Guard
programs at its 800-acre facility in Pascagoula, Miss., could build more because it is using
only 70 to 75 percent of its capacity.64
A March 2017 press report states the following:
As the Navy calls for a larger fleet, shipbuilders are looking toward new contracts and
ramping up their yards to full capacity....
The Navy is confident that U.S. shipbuilders will be able to meet an increased demand,
said Ray Mabus, then-secretary of the Navy, during a speech at the Surface Navy
Association’s annual conference in Arlington, Virginia.
They have the capacity to “get there because of the ships we are building today,” Mabus
said. “I don’t think we could have seven years ago.”
Shipbuilders around the United States have “hot” production lines and are manufacturing
vessels on multi-year or block buy contracts, he added. The yards have made investments
in infrastructure and in the training of their workers.
“We now have the basis ... [to] get to that much larger fleet,” he said....
Shipbuilders have said they are prepared for more work.
At Ingalls Shipbuilding—a subsidiary of Huntington Ingalls Industries—10 ships are under
construction at its Pascagoula, Mississippi, yard, but it is under capacity, said Brian
Cuccias, the company’s president.
The shipbuilder is currently constructing five guided-missile destroyers, the latest San
Antonio-class amphibious transport dock ship, and two national security cutters for the
Coast Guard.
“Ingalls is a very successful production line right now, but it has the ability to actually
produce a lot more in the future,” he said during a briefing with reporters in January.
The company’s facility is currently operating at 75 percent capacity, he noted....
Austal USA—the builder of the Independence-variant of the littoral combat ship and the
expeditionary fast transport vessel—is also ready to increase its capacity should the Navy
require it, said Craig Perciavalle, the company’s president.
The latest discussions are “certainly something that a shipbuilder wants to hear,” he said.
“We do have the capability of increasing throughput if the need and demand were to arise,
and then we also have the ability with the present workforce and facility to meet a different
mix that could arise as well.”
Austal could build fewer expeditionary fast transport vessels and more littoral combat
ships, or vice versa, he added.
“The key thing for us is to keep the manufacturing lines hot and really leverage the
momentum that we’ve gained on both of the programs,” he said.

64 Marc Selinger, “Navy Needs More Aircraft to Match Ship Increase, Secretary [of the Navy] Says,” Defense Daily,
January 12, 2017. See also Lee Hudson, “Ingalls Operating at About 75 Percent Capacity, Provided Info to Trump
Team,” Inside the Navy, January 16, 2017.
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The company—which has a 164-acre yard in Mobile, Alabama—is focused on the
extension of the LCS and expeditionary fast transport ship program, but Perciavalle noted
that it could look into manufacturing other types of vessels.
“We do have excess capacity to even build smaller vessels … if that opportunity were to
arise and we’re pursuing that,” he said.
Bryan Clark, a naval analyst at the Center for Strategic and Budgetary Assessments, a
Washington, D.C.-based think tank, said shipbuilders are on average running between 70
and 80 percent capacity. While they may be ready to meet an increased demand for ships,
it would take time to ramp up their workforces.
However, the bigger challenge is the supplier industrial base, he said.
“Shipyards may be able to build ships but the supplier base that builds the pumps … and
the radars and the radios and all those other things, they don’t necessarily have that ability
to ramp up,” he said. “You would need to put some money into building up their capacity.”
That has to happen now, he added.
Rear Adm. William Gallinis, program manager for program executive office ships, said
what the Navy must be “mindful of is probably our vendor base that support the shipyards.”
Smaller companies that supply power electronics and switchboards could be challenged,
he said.
“Do we need to re-sequence some of the funding to provide some of the facility
improvements for some of the vendors that may be challenged? My sense is that the
industrial base will size to the demand signal. We just need to be mindful of how we
transition to that increased demand signal,” he said.
The acquisition workforce may also see an increased amount of stress, Gallinis noted. “It
takes a fair amount of experience and training to get a good contracting officer to the point
to be [able to] manage contracts or procure contracts.”
“But I don’t see anything that is insurmountable,” he added.65
At a May 24, 2017, hearing before the Seapower subcommittee of the Senate Armed Services
Committee on the industrial-base aspects of the Navy’s 355-ship goal, John P. Casey, executive
vice president–marine systems, General Dynamics Corporation (one of the country’s two
principal builders of Navy ships) stated the following:
It is our belief that the Nation’s shipbuilding industrial base can scale-up hot production
lines for existing ships and mobilize additional resources to accomplish the significant
challenge of achieving the 355-ship Navy as quickly as possible....
Supporting a plan to achieve a 355-ship Navy will be the most challenging for the nuclear
submarine enterprise. Much of the shipyard and industrial base capacity was eliminated
following the steep drop-off in submarine production that occurred with the cancellation
of the Seawolf Program in 1992. The entire submarine industrial base at all levels of the
supply chain will likely need to recapitalize some portion of its facilities, workforce, and
supply chain just to support the current plan to build the Columbia Class SSBN program,
while concurrently building Virginia Class SSNs. Additional SSN procurement will
require industry to expand its plans and associated investment beyond the level today....
Shipyard labor resources include the skilled trades needed to fabricate, build and outfit
major modules, perform assembly, test and launch of submarines, and associated support
organizations that include planning, material procurement, inspection, quality assurance,
and ship certification. Since there is no commercial equivalency for Naval nuclear

65 Yasmin Tadjdeh, “Navy Shipbuilders Prepared for Proposed Fleet Buildup,” National Defense, March 2017.
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submarine shipbuilding, these trade resources cannot be easily acquired in large numbers
from other industries. Rather, these shipyard resources must be acquired and developed
over time to ensure the unique knowledge and know-how associated with nuclear
submarine shipbuilding is passed on to the next generation of shipbuilders. The
mechanisms of knowledge transfer require sufficient lead time to create the proficient,
skilled craftsmen in each key trade including welding, electrical, machining, shipfitting,
pipe welding, painting, and carpentry, which are among the largest trades that would need
to grow to support increased demand. These trades will need to be hired in the numbers
required to support the increased workload. Both shipyards have scalable processes in place
to acquire, train, and develop the skilled workforce they need to build nuclear ships. These
processes and associated training facilities need to be expanded to support the increased
demand. As with the shipyards, the same limiting factors associated with facilities,
workforce, and supply chain also limit the submarine unique first tier suppliers and sub-
tiers in the industrial base for which there is no commercial equivalency....
The supply base is the third resource that will need to be expanded to meet the increased
demand over the next 20 years. During the OHIO, 688 and SEAWOLF construction
programs, there were over 17,000 suppliers supporting submarine construction programs.
That resource base was “rationalized” during submarine low rate production over the last
20 years. The current submarine industrial base reflects about 5,000 suppliers, of which
about 3,000 are currently active (i.e., orders placed within the last 5 years), 80% of which
are single or sole source (based on $). It will take roughly 20 years to build the 12 Columbia
Class submarines that starts construction in FY21. The shipyards are expanding strategic
sourcing of appropriate non-core products (e.g., decks, tanks, etc.) in order to focus on core
work at each shipyard facility (e.g., module outfitting and assembly). Strategic sourcing
will move demand into the supply base where capacity may exist or where it can be
developed more easily. This approach could offer the potential for cost savings by
competition or shifting work to lower cost work centers throughout the country. Each
shipyard has a process to assess their current supply base capacity and capability and to
determine where it would be most advantageous to perform work in the supply base....
Achieving the increased rate of production and reducing the cost of submarines will require
the Shipbuilders to rely on the supply base for more non-core products such as structural
fabrication, sheet metal, machining, electrical, and standard parts. The supply base must be
made ready to execute work with submarine-specific requirements at a rate and volume
that they are not currently prepared to perform. Preparing the supply base to execute
increased demand requires early non-recurring funding to support cross-program
construction readiness and EOQ funding to procure material in a manner that does not hold
up existing ship construction schedules should problems arise in supplier qualification
programs. This requires longer lead times (estimates of three years to create a new
qualified, critical supplier) than the current funding profile supports....
We need to rely on market principles to allow suppliers, the shipyards and GFE material
providers to sort through the complicated demand equation across the multiple ship
programs. Supplier development funding previously mentioned would support non-
recurring efforts which are needed to place increased orders for material in multiple market
spaces. Examples would include valves, build-to-print fabrication work, commodities,
specialty material, engineering components, etc. We are engaging our marine industry
associations to help foster innovative approaches that could reduce costs and gain
efficiency for this increased volume....
Supporting the 355-ship Navy will require Industry to add capability and capacity across
the entire Navy Shipbuilding value chain. Industry will need to make investment decisions
for additional capital spend starting now in order to meet a step change in demand that
would begin in FY19 or FY20. For the submarine enterprise, the step change was already
envisioned and investment plans that embraced a growth trajectory were already being
formulated. Increasing demand by adding additional submarines will require scaling
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facility and workforce development plans to operate at a higher rate of production. The
nuclear shipyards would also look to increase material procurement proportionally to the
increased demand. In some cases, the shipyard facilities may be constrained with existing
capacity and may look to source additional work in the supply base where capacity exists
or where there are competitive business advantages to be realized. Creating additional
capacity in the supply base will require non-recurring investment in supplier qualification,
facilities, capital equipment and workforce training and development.
Industry is more likely to increase investment in new capability and capacity if there is
certainty that the Navy will proceed with a stable shipbuilding plan. Positive signals of
commitment from the Government must go beyond a published 30-year Navy Shipbuilding
Plan and line items in the Future Years Defense Plan (FYDP) and should include

Multi-year contracting for Block procurement which provides stability in the industrial base and
encourages investment in facilities and workforce development

Funding for supplier development to support training, qualification, and facilitization efforts—
Electric Boat and Newport News have recommended to the Navy funding of $400M over a three-
year period starting in 2018 to support supplier development for the Submarine Industrial Base as
part of an Integrated Enterprise Plan Extended Enterprise initiative

Acceleration of Advance Procurement and/or Economic Order Quantities (EOQ) procurement
from FY19 to FY18 for Virginia Block V

Government incentives for construction readiness and facilities / special tooling for shipyard and
supplier facilities, which help cash flow capital investment ahead of construction contract awards

Procurement of additional production back-up (PBU) material to help ensure a ready supply of
material to mitigate construction schedule risk.. .
So far, this testimony has focused on the Submarine Industrial Base, but the General
Dynamics Marine Systems portfolio also includes surface ship construction. Unlike
Electric Boat, Bath Iron Works and NASSCO are able to support increased demand without
a significant increase in resources.....
Bath Iron Works is well positioned to support the Administration’s announced goal of
increasing the size of the Navy fleet to 355 ships. For BIW that would mean increasing the
total current procurement rate of two DDG 51s per year to as many as four DDGs per year,
allocated equally between BIW and HII. This is the same rate that the surface combatant
industrial base sustained over the first decade of full rate production of the DDG 51 Class
(1989-1999)....
No significant capital investment in new facilities is required to accommodate delivering
two DDGs per year. However, additional funding will be required to train future
shipbuilders and maintain equipment. Current hiring and training processes support the
projected need, and have proven to be successful in the recent past. BIW has invested
significantly in its training programs since 2014 with the restart of the DDG 51 program
and given these investments and the current market in Maine, there is little concern of
meeting the increase in resources required under the projected plans.
A predictable and sustainable Navy workload is essential to justify expanding
hiring/training programs. BIW would need the Navy’s commitment that the Navy’s plan
will not change before it would proceed with additional hiring and training to support
increased production.
BIW’s supply chain is prepared to support a procurement rate increase of up to four DDG
51s per year for the DDG 51 Program. BIW has long-term purchasing agreements in place
for all major equipment and material for the DDG 51 Program. These agreements provide
for material lead time and pricing, and are not constrained by the number of ships ordered
in a year. BIW confirmed with all of its critical suppliers that they can support this
increased procurement rate....
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The Navy’s Force Structure Assessment calls for three additional ESBs. Additionally,
NASSCO has been asked by the Navy and the Congressional Budget Office (CBO) to
evaluate its ability to increase the production rate of T-AOs to two ships per year. NASSCO
has the capacity to build three more ESBs at a rate of one ship per year while building two
T-AOs per year. The most cost effective funding profile requires funding ESB 6 in FY18
and the following ships in subsequent fiscal years to avoid increased cost resulting from a
break in the production line. The most cost effective funding profile to enable a production
rate of two T-AO ships per year requires funding an additional long lead time equipment
set beginning in FY19 and an additional ship each year beginning in FY20.
NASSCO must now reduce its employment levels due to completion of a series of
commercial programs which resulted in the delivery of six ships in 2016. The proposed
increase in Navy shipbuilding stabilizes NASSCO’s workload and workforce to levels that
were readily demonstrated over the last several years.
Some moderate investment in the NASSCO shipyard will be needed to reach this level of
production. The recent CBO report on the costs of building a 355-ship Navy accurately
summarized NASSCO’s ability to reach the above production rate stating, “building more
… combat logistics and support ships would be the least problematic for the shipyards.”66
At the same hearing, Brian Cuccias, president, Ingalls Shipbuilding, Huntington Ingalls Industries
(the country’s other principal builder of Navy ships) stated the following:
Qualifying to be a supplier is a difficult process. Depending on the commodity, it may take
up to 36 months. That is a big burden on some of these small businesses. This is why
creating sufficient volume and exercising early contractual authorization and advance
procurement funding is necessary to grow the supplier base, and not just for traditional
long-lead time components; that effort needs to expand to critical components and
commodities that today are controlling the build rate of submarines and carriers alike.
Many of our suppliers are small businesses and can only make decisions to invest in people,
plant and tooling when they are awarded a purchase order. We need to consider how we
can make commitments to suppliers early enough to ensure material readiness and
availability when construction schedules demand it.
With questions about the industry’s ability to support an increase in shipbuilding, both
Newport News and Ingalls have undertaken an extensive inventory of our suppliers and
assessed their ability to ramp up their capacity. We have engaged many of our key suppliers
to assess their ability to respond to an increase in production.
The fortunes of related industries also impact our suppliers, and an increase in demand
from the oil and gas industry may stretch our supply base. Although some low to moderate
risk remains, I am convinced that our suppliers will be able to meet the forecasted Navy
demand....
I strongly believe that the fastest results can come from leveraging successful platforms on
current hot production lines. We commend the Navy’s decision in 2014 to use the existing
LPD 17 hull form for the LX(R), which will replace the LSD-class amphibious dock
landing ships scheduled to retire in the coming years. However, we also recommend that
the concept of commonality be taken even further to best optimize efficiency, affordability
and capability. Specifically, rather than continuing with a new design for LX(R) within the
“walls” of the LPD hull, we can leverage our hot production line and supply chain and
offer the Navy a variant of the existing LPD design that satisfies the aggressive cost targets
of the LX(R) program while delivering more capability and survivability to the fleet at a

66 John P. Casey, Executive Vice President – Marine Systems, General Dynamics Corporation, Testimony before the
Senate Armed Services Committee, Subcommittee on Seapower, 115th Congress, Supporting the 355-Ship Navy with
Focus on Submarine Industrial Base, Washington, DC, May 24, 2017, pp. 3-18. See also Marjorie Censer, “BWX
Technologies Weighs When To Ready for Additional Submarines,” Inside the Navy, May 29, 2017.
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significantly faster pace than the current program. As much as 10-15 percent material
savings can be realized across the LX(R) program by purchasing respective blocks of at
least five ships each under a multi-year procurement (MYP) approach. In the aggregate,
continuing production with LPD 30 in FY18, coupled with successive MYP contracts for
the balance of ships, may yield savings greater than $1 billion across an 11-ship LX(R)
program. Additionally, we can deliver five LX(R)s to the Navy and Marine Corps in the
same timeframe that the current plan would deliver two, helping to reduce the shortfall in
amphibious warships against the stated force requirement of 38 ships.
Multi-ship procurements, whether a formal MYP or a block-buy, are a proven way to
reduce the price of ships. The Navy took advantage of these tools on both Virginia-class
submarines and Arleigh Burke-class destroyers. In addition to the LX(R) program
mentioned above, expanding multi-ship procurements to other ship classes makes sense....
The most efficient approach to lower the cost of the Ford class and meet the goal of an
increased CVN fleet size is also to employ a multi-ship procurement strategy and construct
these ships at three-year intervals. This approach would maximize the material
procurement savings benefit through economic order quantities procurement and provide
labor efficiencies to enable rapid acquisition of a 12-ship CVN fleet. This three-ship
approach would save at least $1.5 billion, not including additional savings that could be
achieved from government-furnished equipment. As part of its Integrated Enterprise Plan,
we commend the Navy’s efforts to explore the prospect of material economic order
quantity purchasing across carrier and submarine programs.67
At the same hearing, Matthew O. Paxton, president, Shipbuilders Council of America (SCA)—a
trade association representing shipbuilders, suppliers, and associated firms—stated the following:
To increase the Navy’s Fleet to 355 ships, a substantial and sustained investment is required
in both procurement and readiness. However, let me be clear: building and sustaining the
larger required Fleet is achievable and our industry stands ready to help achieve that
important national security objective.
To meet the demand for increased vessel construction while sustaining the vessels we
currently have will require U.S. shipyards to expand their work forces and improve their
infrastructure in varying degrees depending on ship type and ship mix – a requirement our
Nation’s shipyards are eager to meet. But first, in order to build these ships in as timely
and affordable manner as possible, stable and robust funding is necessary to sustain those
industrial capabilities which support Navy shipbuilding and ship maintenance and
modernization....
Beyond providing for the building of a 355-ship Navy, there must also be provision to fund
the “tail,” the maintenance of the current and new ships entering the fleet. Target fleet size
cannot be reached if existing ships are not maintained to their full service lives, while
building those new ships. Maintenance has been deferred in the last few years because of
across-the-board budget cuts....
The domestic shipyard industry certainly has the capability and know-how to build and
maintain a 355-ship Navy. The Maritime Administration determined in a recent study on
the Economic Benefits of the U.S. Shipyard Industry that there are nearly 110,000 skilled
men and women in the Nation’s private shipyards building, repairing and maintaining
America’s military and commercial fleets.1 The report found the U.S. shipbuilding
industry supports nearly 400,000 jobs across the country and generates $25.1 billion in
income and $37.3 billion worth of goods and services each year. In fact, the MARAD
report found that the shipyard industry creates direct and induced employment in every

67 Statement of Brian Cuccias, President, Ingalls Shipbuilding, Huntington Ingalls Industries, Subcommittee on
Seapower, Senate Armed Services Committee, May 24, 2017, pp. 4-11.
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State and Congressional District and each job in the private shipbuilding and repairing
industry supports another 2.6 jobs nationally.
This data confirms the significant economic impact of this manufacturing sector, but also
that the skilled workforce and industrial base exists domestically to build these ships. Long-
term, there needs to be a workforce expansion and some shipyards will need to reconfigure
or expand production lines. This can and will be done as required to meet the need if
adequate, stable budgets and procurement plans are established and sustained for the long-
term. Funding predictability and sustainability will allow industry to invest in facilities and
more effectively grow its skilled workforce. The development of that critical workforce
will take time and a concerted effort in a partnership between industry and the federal
government.
U.S. shipyards pride themselves on implementing state of the art training and
apprenticeship programs to develop skilled men and women that can cut, weld, and bend
steel and aluminum and who can design, build and maintain the best Navy in the world.
However, the shipbuilding industry, like so many other manufacturing sectors, faces an
aging workforce. Attracting and retaining the next generation shipyard worker for an
industry career is critical. Working together with the Navy, and local and state resources,
our association is committed to building a robust training and development pipeline for
skilled shipyard workers. In addition to repealing sequestration and stabilizing funding the
continued development of a skilled workforce also needs to be included in our national
maritime strategy....
In conclusion, the U.S. shipyard industry is certainly up to the task of building a 355-ship
Navy and has the expertise, the capability, the critical capacity and the unmatched skilled
workforce to build these national assets. Meeting the Navy’s goal of a 355-ship fleet and
securing America’s naval dominance for the decades ahead will require sustained
investment by Congress and Navy’s partnership with a defense industrial base that can
further attract and retain a highly-skilled workforce with critical skill sets. Again, I would
like to thank this Subcommittee for inviting me to testify alongside such distinguished
witnesses. As a representative of our nation’s private shipyards, I can say, with confidence
and certainty, that our domestic shipyards and skilled workers are ready, willing and able
to build and maintain the Navy’s 355-ship Fleet.68
Employment Impact
Building the additional ships that would be needed to achieve and maintain the 355-ship fleet
could create many additional manufacturing and other jobs at shipyards, associated supplier
firms, and elsewhere in the U.S. economy. A 2015 Maritime Administration (MARAD) report
states
Considering the indirect and induced impacts, each direct job in the shipbuilding and
repairing industry is associated with another 2.6 jobs in other parts of the US economy;
each dollar of direct labor income and GDP in the shipbuilding and repairing industry is
associated with another $1.74 in labor income and $2.49 in GDP, respectively, in other
parts of the US economy.69

68 Testimony of Matthew O. Paxton, President, Shipbuilders Council of America, before the United States Senate
Committee on Armed Services, Subcommittee on Seapower, [on] Industry Perspectives on Options and Considerations
for Achieving a 355-Ship Navy, May 24, 2017, pp. 3-8.
69 MARAD, The Economic Importance of the U.S. Shipbuilding and Repairing Industry, November 2015, pp. E-3, E-4.
For another perspective on the issue of the impact of shipbuilding on the broader economy, see Edward G. Keating et
al., The Economic Consequences of Investing in Shipbuilding, Case Studies in the United States and Sweden, RAND
Corporation, 2015.
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A March 2017 press report states, “Based on a 2015 economic impact study, the Shipbuilders
Council of America [a trade association for U.S. shipbuilders and associated supplier firms]
believes that a 355-ship Navy could add more than 50,000 jobs nationwide.”70 The 2015
economic impact study referred to in that quote might be the 2015 MARAD study discussed in
the previous paragraph. An estimate of more than 50,000 additional jobs nationwide might be
viewed as a higher-end estimate; other estimates might be lower. A June 14, 2017, press report
states the following: “The shipbuilding industry will need to add between 18,000 and 25,000 jobs
to build to a 350-ship Navy, according to Matthew Paxton, president of the Shipbuilders Council
of America, a trade association representing the shipbuilding industrial base. Including indirect
jobs like suppliers, the ramp-up may require a boost of 50,000 workers.”71

70 Yasmin Tadjdeh, “Navy Shipbuilders Prepared for Proposed Fleet Buildup,” National Defense, March 2017.
Similarly, another press report states the following: “The Navy envisioned by Trump could create more than 50,000
jobs, the Shipbuilders Council of America, a trade group representing U.S. shipbuilders, repairers and suppliers, told
Reuters.” (Mike Stone, “Missing from Trump’s Grand Navy Plan: Skilled Workers to Build the Fleet,” Reuters, March
17, 2017.)
71 Jaqueline Klimas, “Growing Shipbuilding Workforce Seen as Major Challenge for Trump’s Navy Buildup,” Politico,
June 14, 2017.
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Appendix D. A Summary of Some Acquisition
Lessons Learned for Navy Shipbuilding
This appendix presents a general summary of lessons learned in Navy shipbuilding, reflecting
comments made repeatedly by various sources over the years. These lessons learned include the
following:
 At the outset, get the operational requirements for the program right.
Properly identify the program’s operational requirements at the outset. Manage
risk by not trying to do too much in terms of the program’s operational
requirements, and perhaps seek a so-called 70%-to-80% solution (i.e., a design
that is intended to provide 70%-80% of desired or ideal capabilities). Achieve a
realistic balance up front between operational requirements, risks, and estimated
costs.
 Use mature technologies. Use land-based prototyping and testing to bring new
technologies to a high state of maturity before incorporating them into ship
designs, and limit the number of major new technologies to be incorporated into
a new ship design.
 Impose cost discipline up front. Use realistic price estimates, and consider not
only development and procurement costs, but life-cycle operation and support
(O&S) costs.
 Employ competition where possible in the awarding of design and construction
contracts.
 Use a contract type that is appropriate for the amount of risk involved, and
structure its terms to align incentives with desired outcomes.
 Minimize design/construction concurrency by developing the design to a high
level of completion before starting construction and by resisting changes in
requirements (and consequent design changes) during construction.
 Properly supervise construction work. Maintain an adequate number of
properly trained Supervisor of Shipbuilding (SUPSHIP) personnel.
 Provide stability for industry, in part by using, where possible, multiyear
procurement (MYP) or block buy contracting.
 Maintain a capable government acquisition workforce that understands what
it is buying, as well as the above points.
Identifying these lessons is arguably not the hard part—most if not all these points have been
cited for years. The hard part, arguably, is living up to them without letting circumstances lead
program-execution efforts away from these guidelines.
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Appendix E. Some Considerations Relating to
Warranties in Shipbuilding Contracts
This appendix presents some considerations relating to warranties in shipbuilding contracts and
other defense acquisition.
In discussions of Navy (and also Coast Guard) shipbuilding, one question that sometimes arises is
whether including a warranty in a shipbuilding contract is preferable to not including one. The
question can arise, for example, in connection with a GAO finding that “the Navy structures
shipbuilding contracts so that it pays shipbuilders to build ships as part of the construction
process and then pays the same shipbuilders a second time to repair the ship when construction
defects are discovered.”72
Including a warranty in a shipbuilding contract (or a contract for building some other kind of
defense end item), while potentially valuable, might not always be preferable to not including
one—it depends on the circumstances of the acquisition, and it is not necessarily a valid criticism
of an acquisition program to state that it is using a contract that does not include a warranty (or a
weaker form of a warranty rather than a stronger one).
Including a warranty generally shifts to the contractor the risk of having to pay for fixing
problems with earlier work. Although that in itself could be deemed desirable from the
government’s standpoint, a contractor negotiating a contract that will have a warranty will
incorporate that risk into its price, and depending on how much the contractor might charge for
doing that, it is possible that the government could wind up paying more in total for acquiring the
item (including fixing problems with earlier work on that item) than it would have under a
contract without a warranty.
When a warranty is not included in the contract and the government pays later on to fix problems
with earlier work, those payments can be very visible, which can invite critical comments from
observers. But that does not mean that including a warranty in the contract somehow frees the
government from paying to fix problems with earlier work. In a contract that includes a warranty,
the government will indeed pay something to fix problems with earlier work—but it will make
the payment in the less-visible (but still very real) form of the up-front charge for including the
warranty, and that charge might be more than what it would have cost the government, under a
contract without a warranty, to pay later on for fixing those problems.
From a cost standpoint, including a warranty in the contract might or might not be preferable,
depending on the risk that there will be problems with earlier work that need fixing, the potential
cost of fixing such problems, and the cost of including the warranty in the contract. The point is
that the goal of avoiding highly visible payments for fixing problems with earlier work and the
goal of minimizing the cost to the government of fixing problems with earlier work are separate
and different goals, and that pursuing the first goal can sometimes work against achieving the
second goal.73

72 See Government Accountability Office, Navy Shipbuilding[:] Past Performance Provides Valuable Lessons for
Future Investments, GAO-18-238SP, June 2018, p. 21. A graphic on page 21 shows a GAO finding that the
government was financially responsible for shipbuilder deficiencies in 96% of the cases examined by GAO, and that
the shipbuilder was financially responsible for shipbuilder deficiencies in 4% of the cases.
73 It can also be noted that the country’s two largest builders of Navy ships—General Dynamics (GD) and Huntington
Ingalls Industries (HII)—derive about 60% and 96%, respectively, of their revenues from U.S. government work. (See
General Dynamics, 2016 Annual Report, page 9 of Form 10-K [PDF page 15 of 88]) and Huntington Ingalls Industries,
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The Department of Defense’s guide on the use of warranties states the following:
Federal Acquisition Regulation (FAR) 46.7 states that “the use of warranties is not
mandatory.” However, if the benefits to be derived from the warranty are commensurate
with the cost of the warranty, the CO [contracting officer] should consider placing it in the
contract. In determining whether a warranty is appropriate for a specific acquisition, FAR
Subpart 46.703 requires the CO to consider the nature and use of the supplies and services,
the cost, the administration and enforcement, trade practices, and reduced requirements.
The rationale for using a warranty should be documented in the contract file....
In determining the value of a warranty, a CBA [cost-benefit analysis] is used to measure
the life cycle costs of the system with and without the warranty. A CBA is required to
determine if the warranty will be cost beneficial. CBA is an economic analysis, which
basically compares the Life Cycle Costs (LCC) of the system with and without the warranty
to determine if warranty coverage will improve the LCCs. In general, five key factors will
drive the results of the CBA: cost of the warranty + cost of warranty administration +
compatibility with total program efforts + cost of overlap with Contractor support +
intangible
savings.
Effective
warranties
integrate
reliability,
maintainability,
supportability, availability, and life-cycle costs. Decision factors that must be evaluated
include the state of the weapon system technology, the size of the warranted population,
the likelihood that field performance requirements can be achieved, and the warranty
period of performance.74

2016 Annual Report, page 5 of Form 10-K [PDF page 19 of 134]). These two shipbuilders operate the only U.S.
shipyards currently capable of building several major types of Navy ships, including submarines, aircraft carriers, large
surface combatants, and amphibious ships. Thus, even if a warranty in a shipbuilding contract with one of these firms
were to somehow mean that the government did not have pay under the terms of that contract—either up front or later
on—for fixing problems with earlier work done under that contract, there would still be a question as to whether the
government would nevertheless wind up eventually paying much of that cost as part of the price of one or more future
contracts the government may have that firm.
74 Department of Defense, Department of Defense Warranty Guide, Version 1.0, September 2009, accessed July 13,
2017, at https://www.acq.osd.mil/dpap/pdi/uid/docs/departmentofdefensewarrantyguide[1].doc.
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Appendix F. Avoiding Procurement Cost Growth vs.
Minimizing Procurement Costs
This appendix presents some considerations relating to avoiding procurement cost growth vs.
minimizing procurement costs in shipbuilding and other defense acquisition.
The affordability challenge posed by the Navy’s shipbuilding plans can reinforce the strong
oversight focus on preventing or minimizing procurement cost growth in Navy shipbuilding
programs, which is one expression of a strong oversight focus on preventing or minimizing cost
growth in DOD acquisition programs in general. This oversight focus may reflect in part an
assumption that avoiding or minimizing procurement cost growth is always synonymous with
minimizing procurement cost. It is important to note, however, that as paradoxical as it may seem,
avoiding or minimizing procurement cost growth is not always synonymous with minimizing
procurement cost, and that a sustained, singular focus on avoiding or minimizing procurement
cost growth might sometimes lead to higher procurement costs for the government.
How could this be? Consider the example of a design for the lead ship of a new class of Navy
ships. The construction cost of this new design is uncertain, but is estimated to be likely
somewhere between Point A (a minimum possible figure) and Point D (a maximum possible
figure). (Point D, in other words, would represent a cost estimate with a 100% confidence factor,
meaning there is a 100% chance that the cost would come in at or below that level.) If the Navy
wanted to avoid cost growth on this ship, it could simply set the ship’s procurement cost at Point
D. Industry would likely be happy with this arrangement, and there likely would be no cost
growth on the ship.
The alternative strategy open to the Navy is to set the ship’s target procurement cost at some
figure between Points A and D—call it Point B—and then use that more challenging target cost to
place pressure on industry to sharpen its pencils so as to find ways to produce the ship at that
lower cost. (Navy officials sometimes refer to this as “pressurizing” industry.) In this example, it
might turn out that industry efforts to reduce production costs are not successful enough to build
the ship at the Point B cost. As a result, the ship experiences one or more rounds of procurement
cost growth, and the ship’s procurement cost rises over time from Point B to some higher
figure—call it Point C.
Here is the rub: Point C, in spite of incorporating one or more rounds of cost growth, might
nevertheless turn out to be lower than Point D, because Point C reflected efforts by the
shipbuilder to find ways to reduce production costs that the shipbuilder might have put less
energy into pursuing if the Navy had simply set the ship’s procurement cost initially at Point D.
Setting the ship’s cost at Point D, in other words, may eliminate the risk of cost growth on the
ship, but does so at the expense of creating a risk of the government paying more for the ship than
was actually necessary. DOD could avoid cost growth on new procurement programs starting
tomorrow by simply setting costs for those programs at each program’s equivalent of Point D.
But as a result of this strategy, DOD could well wind up leaving money on the table in some
instances—of not, in other words, minimizing procurement costs.
DOD does not have to set a cost precisely at Point D to create a potential risk in this regard. A risk
of leaving money on the table, for example, is a possible downside of requiring DOD to budget
for its acquisition programs at something like an 80% confidence factor—an approach that some
observers have recommended—because a cost at the 80% confidence factor is a cost that is likely
fairly close to Point D.
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Procurement cost growth is often embarrassing for DOD and industry, and can damage their
credibility in connection with future procurement efforts. Procurement cost growth can also
disrupt congressional budgeting by requiring additional appropriations to pay for something
Congress thought it had fully funded in a prior year. For this reason, there is a legitimate public
policy value to pursuing a goal of having less rather than more procurement cost growth.
Procurement cost growth, however, can sometimes be in part the result of DOD efforts to use
lower initial cost targets as a means of pressuring industry to reduce production costs—efforts
that, notwithstanding the cost growth, might be partially successful. A sustained, singular focus
on avoiding or minimizing cost growth, and of punishing DOD for all instances of cost growth,
could discourage DOD from using lower initial cost targets as a means of pressurizing industry,
which could deprive DOD of a tool for controlling procurement costs.
The point here is not to excuse away cost growth, because cost growth can occur in a program for
reasons other than DOD’s attempt to pressurize industry. Nor is the point to abandon the goal of
seeking lower rather than higher procurement cost growth, because, as noted above, there is a
legitimate public policy value in pursuing this goal. The point, rather, is to recognize that this goal
is not always synonymous with minimizing procurement cost, and that a possibility of some
amount of cost growth might be expected as part of an optimal government strategy for
minimizing procurement cost. Recognizing that the goals of seeking lower rather than higher cost
growth and of minimizing procurement cost can sometimes be in tension with one another can
lead to an approach that takes both goals into consideration. In contrast, an approach that is
instead characterized by a sustained, singular focus on avoiding and minimizing cost growth may
appear virtuous, but in the end may wind up costing the government more.
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Appendix G. Size of the Navy and Navy
Shipbuilding Rate
Size of the Navy
Table G-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.75 The Navy fell below 300
battle force ships in August 2003 and remained below 300 ships for the next 16 years. The Navy
briefly returned to a level of 300 ships in early July 2020, for the first time in almost 17 years,
subsequently fell back below 300 ships, reached 300 ships again briefly during periods in August
and September 2022, and as of September 26, 2022, included 300 battle force ships.
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 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.

75 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 G-1. Total Number of Ships in Navy Since FY1948
FYa
Number
FYa
Number
FYa
Number
FYa
Number
1948
737
1970
769
1992
466
2014
289
1949
690
1971
702
1993
435
2015
271
1950
634
1972
654
1994
391
2016
275
1951
980
1973
584
1995
372
2017
279
1952
1,097
1974
512
1996
356
2018
286
1953
1,122
1975
496
1997
354
2019
290
1954
1,113
1976
476
1998
333
2020
296
1955
1,030
1977
464
1999
317
2021
294
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
292

1961
897
1983
514
2005
281

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
546
2012
287

1969
926
1991
526
2013
285

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.
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Shipbuilding Rate
Table G-2 shows past (FY1982-FY2022) and programmed (FY2023-FY2027) rates of Navy ship
procurement.
Table G-2. Battle Force Ships Procured or Requested, FY1982-FY2027
Procured in FY1982-FY2022 and programmed for FY2023-FY2027
82 83 84 85 86 87 88 89 90 91 92 93
94 95 96 97 98 99 00
17 14 16 19 20 17 15 19 15 11 11
7
4
4
5
4
5
5
6
01 02 03 04 05 06 07 08 09 10 11 12
13 14 15 16 17 18 19
6
6
5
7
8
4
5
3
8
7
10
11
11
8
8
9
9
9
13
20 21 22 23 24 25 26 27

13 11 13
8
9
9
13 11

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 nonbattle force ships
that do not count toward the 355-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).
Notes: (1) The totals shown for FY2006, FY2007, and FY2008, reflect the cancellation two LCSs funded
in FY2006, another two LCSs funded in FY2007, and an LCS funded in FY2008.
(2) 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.
(3) The figures shown for FY2019 and FY2020 reflect a Navy decision to show the aircraft carrier CVN-81
as a ship to be procured in FY2020 rather than a ship that was procured in FY2019. Congress, as part of its
action on the Navy’s proposed FY2019 budget, authorized the procurement of CVN-81 in FY2019.
(4) The figure shown for FY2021 includes LHA-9 as a ship procured in FY2021, consistent with congressional
authorization and appropriation action for FY2021 and prior fiscal years.

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Appendix H. Effort in 2019 and 2020 to Develop
New Navy Force-Level Goal
This appendix presents additional background information on the effort in 2019 and 2020 to
develop a new Navy force level goal.76
Navy’s Initial Effort Was Called the Integrated Naval FSA (INFSA)
The effort to develop a new Navy force-level goal began in the Navy with a new FSA that Navy
and Marine Corps officials called the Integrated Naval FSA (INFSA), with the words integrated
naval intended to signal that this FSA would integrate Marine Corps requirements into the
analytical process more fully than previous FSAs did. Department of the Navy (DON) officials
stated that the INFSA would take into account the Trump Administration’s December 2017
National Security Strategy document and its January 2018 National Defense Strategy document,
both of which put an emphasis on renewed great power competition with China and Russia,77 as
well as updated information on Chinese and Russian naval and other military capabilities and
recent developments in new technologies, including those related to UVs.78
INFSA May Have Called for a 390/435-Ship Force-level Goal
Press reports and statements from Navy officials suggested that the INFSA was completed in late
2019 or early 2020, and that it may have resulted in a new Navy force-level goal for a fleet of
about 390 manned ships plus about 45 unmanned or optionally manned ships, for a total of about
435 manned and unmanned/optionally manned ships. Navy officials provided few additional
details about the composition of this 390/435-ship force-level goal.79

76 See also Megan Eckstein, “After 9 Months of Study, Pentagon’s Fleet Architecture Similar to Original Navy Plan,”
USNI News, November 4, 2020; Mallory Shelbourne and Sam LaGrone, “SECDEF Esper’s ‘Battle Force 2045’ Plan
Still Awaiting White House Approval,” USNI News, October 231, 2020; John R. Kroger, “Esper’s Fantasy Fleet, The
SecDef’s 500-Ship Plan Is an Exercise in Wishful Thinking That Avoids Hard Choices,” Defense One, October 13,
2020; Gina Harkins, “The Navy Really Does Need 500 Ships, Experts Say. But Paying for Them Won’t Be Easy,”
Military.com, October 8, 2020. For a series of additional reaction and commentary articles on the Battle Force 2045
plan, see Dmitry Filipoff, “Fleet Force Structure Series,” Center for International Maritime Security (CIMSEC),
undated, with the linked reaction and commentary pieces dated October 26 to November 2, 2020.
77 For additional discussion of the defense implications of great power competition, see CRS Report R43838, Renewed
Great Power Competition: Implications for Defense—Issues for Congress, by Ronald O'Rourke.
78 See, for example, Marcus Weisgerber, “US Navy Re-Evaluating 355-Ship Goal,” Defense One, February 1, 2019;
Paul McLeary, “Navy Rethinks 355-Ship Fleet: CNO Richardson,” Breaking Defense, February 1, 2019; Mallory
Shelbourne, “CNO: Navy Expects New Force-Structure Assessment ‘Later This Year,’” Inside the Navy, February 4,
2019.
79 See, for example, Ben Werner, “SECNAV Modly Says Nation Needs Larger, Distributed Fleet of 390 Hulls,” USNI
News, February 28, 2020; Mallory Shelbourne, “Modly Sketches Out Potential Navy Force Structure Changes,
Anticipates 390-Ship Fleet,” Inside Defense, February 28, 2020; Rich Abott, “Modly Reveals Next Force Structure
Assessment Details, Working Toward 390-Ship Fleet,” Defense Daily, February 28, 2020; Patrick Tucker, “Acting
Navy Secretary: We Need More than 355 Ships, and That’s Not Even Counting Robot Vessels,” Defense One,
February 28, 2020; Connor O’Brien, “Acting Navy Secretary Hints At Larger Fleet Goal,” Politico Pro, February 28,
2020.
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INFSA Results and Associated FY2021 30-Year Shipbuilding Plan
Withheld from Congress
The release to Congress of the new Navy force-level goal resulting from the INFSA was
postponed repeatedly in late 2019 and early 2020.80 Remarks from DOD officials and press
reports indicated that then-Secretary of Defense Mark Esper and officials OSD disagreed with
some of the INFSA’s assumptions and resulting conclusions. Coincident with this, OSD
reportedly also withheld the release to Congress of the Navy’s associated FY2021 30-year
shipbuilding plan, because Esper and OSD officials reportedly believed that it did not present a
“credible pathway” for achieving a fleet of at least 355 ships in a timely manner.81
INFSA Superseded by DOD’s Future Naval Force Study (FNFS)
The INFSA reportedly was superseded in early 2020 by an OSD-led effort called the Future
Naval Force Study (FNFS) that reportedly involves OSD and the Joint Staff and is being overseen
by Deputy Defense Secretary David Norquist.82 As part of the FNFS, OSD reportedly has used
war games to assess the merits of three candidate fleet plans prepared by the Navy, the Joint Staff,
and the Cost Assessment and Program Evaluation (CAPE) office within OSD. The Hudson
Institute, a private defense and foreign policy think tank, provided an additional study to help
inform DOD’s work.83 With the INFSA having been superseded by the FNFS, the Navy

80 Through much of 2019, Navy officials stated that the INFSA was to be completed by the end of 2019. A September
27, 2019, press report stated that an interim version was to be completed by September 2019, in time to inform
programmatic decisions on the FY2022 Program Objective Memorandum (POM), meaning the in-house DOD planning
document that will guide the development of DOD’s FY2022 budget submission. (Mallory Shelbourne, “Navy, Marine
Corps Conducting Integrated Force-Structure Assessment,” Inside Defense, September 27, 2019. See also Otto
Kreisher, “New Force Structure Assessment Will Address Needs of ‘Great Power Competition,’ Two Top
Requirements Officers Say,” Seapower, October 22, 2019, and the section under the subheader “Naval Integrated Force
Structure Assessment” in Megan Eckstein, “Navy Marines Wargaming New Gear to Support Emerging Warfare
Concepts,” USNI News, October 23, 2019.)
A December 6, 2019, memorandum from then-Acting Secretary of the Navy Thomas Modly stated that he expected the
final INFSA to be published no later than January 15, 2020. (Memorandum for distribution from Acting Secretary of
the Navy Thomas B. Modly, subject “SecNav Vector 1,” dated December 6, 2019. See also David B. Larter, “Acting
US Navy Secretary: Deliver Me a 355-Ship Fleet by 2030,” Defense News, December 9, 2019.)
A January 23, 2020, press report quoted Modly as saying that the January 15 date was an internal Navy deadline, and
that the Navy expected the INFSA to be released to outside audiences sometime during the spring of 2020. (Mallory
Shelbourne, “Modly: Navy Expects to Release FSA by Spring,” Inside Defense, January 23, 2020.)
81 See, for example, Sam LaGrone, “SECDEF Esper Holds Back 30-Year Shipbuilding Outlook, New 355-Ship Plan
Ahead of HASC Testimony,” USNI News, February 25, 2020; Paul McLeary, “Esper To Navy: Rethink Your
Shipbuilding Plan,” Breaking Defense, February 25, 2020; Ben Werner, “SECDEF Esper Blames Failures of Optimized
Fleet Response Plan for Delay of New 355-Ship Fleet Outlook,” USNI News, February 26, 2020; Paul McLeary,
“EXCLUSIVE: SecDef Esper Seeks Détente With HASC; New Navy Plan This Summer,” Breaking Defense, February
28, 2020; Paul McLeary, “SecNav Details Gaps Between Navy & Pentagon Shipbuilding Plans,” Breaking Defense,
March 11, 2020; Mallory Shelbourne, “CAPE Nominee: SECDEF Esper Blocked Shipbuilding Plan to Congress
Because it Lacked ‘Credible Pathway’ to 355-Ship Fleet,” USNI News, August 4, 2020; David B. Larter and Joe Gould,
“Pentagon Nominee Slams the US Navy’s Fleet Plans as ‘Not a Credible Document,’” Defense News, August 4, 2020.
82 See, for example, David B. Later, “Defense Department Study Calls for Cutting 2 of the US Navy’s Aircraft
Carriers,” Defense News, April 20, 2020; Jack Detsch, “Trump’s Navy Pick Would Have Limited Sway on Ship Goal,”
Foreign Policy, May 7, 2020; Paul McLeary, “Navy Scraps Big Carrier Study, Clears Deck For OSD Effort,” Breaking
Defense, May 12, 2020; Megan Eckstein, “Pentagon Leaders Have Taken Lead in Crafting Future Fleet from Navy,”
USNI News, June 24, 2020.
83 Megan Eckstein, “Pentagon Leaders Have Taken Lead in Crafting Future Fleet from Navy,” USNI News, June 24,
2020.
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reportedly “has lost much of its power on deciding what its future fleet will look like….”84 No
release date for the result of the FNFS has been announced, but press reports suggest that much of
the analytical work on the FNFS has now been completed, and that the results of the FNFS could
be released in coming days or weeks.85
April and June 2020 Press Reports About FNFS Results
April and June 2020 press reports stated that FNFS as of April 2020 was moving toward
recommending a fleet with, among other things, 68 or 69 nuclear-powered attack submarines
(SSNs), 9 aircraft carriers, 80 to 90 large surface combatants (i.e., cruisers and destroyers), 55 to
70 small surface combatants (i.e., frigates and Littoral Combat Ships [LCSs]), 65 unmanned or
lightly manned surface vehicles, and 50 extra-large unmanned underwater vehicles (XLUUVs).86
September 2020 Press Reports About FNFS Studies
A September 24, 2020, press report about studies done in April in support of the FNFS stated
The Pentagon’s upcoming recommendation for a future Navy is expected to call for a
significant increase in the number of ships, with officials discussing a fleet as large as 530
hulls, according to documents obtained by Defense News.
Supporting documents to the forthcoming Future Navy Force Study reviewed by Defense
News show the Navy moving towards a lighter force with many more ships but fewer
aircraft carriers and large surface combatants. Instead, the fleet would include more small
surface combatants, unmanned ships and submarines and an expanded logistics force.
Two groups commissioned by Secretary of Defense Mark Esper to design what a future
Navy should look like suggested fleets of anywhere from 480 to 534 ships, when manned
and unmanned platforms are accounted for—at least a 35 percent increase in fleet size from
the current target of 355 manned ships by 2030.
The numbers all come from an April draft of inputs to the Future Navy Force Study
conducted by the Office of the Secretary of Defense. While the number will likely have
changed somewhat in final recommendations recently sent to Esper, the plans being
discussed in April are notable as they reflect what will likely be major shift in the Navy’s
future—and the expectation is that a larger-than-planned Navy based on the concepts laid
out in the documents will remain intact in the final analysis….
The Future Naval Force Study, overseen by Deputy Secretary of Defense David Norquist,
kicked off in January after Esper decided he wanted an outside take on the Navy’s self-
review of its future force structure. The OSD-led review tasked three groups to provide
their version of an ideal fleet construction for the year 2045, one each by the Pentagon’s
Cost Assessment & Program Evaluation office, the Joint Staff, the Navy and a group from
the Hudson Institute.
Those fleets were war-gamed and the results were compiled into the Future Naval Force
Study, which was briefed to Esper earlier this month….

84 Megan Eckstein, “Pentagon Leaders Have Taken Lead in Crafting Future Fleet from Navy,” USNI News, June 24,
2020.
85 David B. Larter, “US Navy’s Long-Delayed Plan for Its Future Force is Nearing the Finish Line … Sort of,” Defense
News, September 10, 2020. See also Paul McLeary, “New Navy Ships Plan Finally Ready; On Esper’s Desk Next
Week,” Breaking Defense, September 10, 2020.
86 David B. Larter, “Defense Department Study Calls for Cutting 2 of the US Navy’s Aircraft Carriers,” Defense News,
April 20, 2020; David B. Larter, “To Compete with China, An Internal Pentagon Study Looks to Pour Money into
Robot Submarines,” Defense News, June 1, 2020.
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The April documents viewed by Defense News included notional fleets designed by CAPE
and the Hudson Institute….
The fleets designed by the CAPE and Hudson teams agreed on the need to increase the
number and diversity of ships while boosting vertical launch system capacity—while also
holding the operations and sustainment cost of the fleet as steady as possible and avoid
adding to the number of sailors required to operate it.
As of the April drafts, both the CAPE and Hudson Institute teams were supportive of
shrinking the number of supercarriers to nine from the current 11, which would effectively
give the country eight active carriers, with one carrier always in midlife overhaul and
refueling. The Hudson study also called for investing in four light carriers.
The CAPE fleet called for between 80 and 90 large surface combatants, about the same
level as today’s 89 cruisers and destroyers. Hudson looked to reduce the number slightly
and instead fund more lightly manned corvettes, something Hudson has called for in the
past.
The reports called for between 65 and 87 large unmanned surface vessels or optionally
unmanned corvettes, which the Navy hopes will boost vertical launch system capacity to
offset the loss over time of the Arleigh Burke-class destroyers and the four guided missile
submarines.
Both fleets called for increased small surface combatants, with the CAPE study putting the
upper limit at 70 ships. Hudson recommended a maximum of 56. The Navy’s 2016 Force
Structure Assessment called for 52 small surface combatants.
Both fleets also favored a slight increase in attack submarines over the current 66-ship
requirement but reflected a big boost in large unmanned submarines, anywhere between
40 and 60 total. The idea would be to get the Extra Large Unmanned Underwater Vehicle
to do monotonous surveillance missions or highly dangerous missions, freeing up the more
complex manned platforms for other tasking.
On the amphibious side, both fleets reduced the overall number of traditional dock landing
ships, such as the LPD-17, from the current 23 to between 15 and 19. As for the big-deck
amphibious ships, CAPE favored holding at the current level of 10, while Hudson favored
cutting to five, with the savings reinvested towards four light carriers.
The studies called for between 20 and 26 of the Marines’ light amphibious warships, which
they need for ferrying Marines and gear around islands in the Pacific.
Both fleets significantly expanded the logistics force, with big increases coming from
smaller ships similar to offshore or oil platform support-type vessels. The fleets called for
anywhere from 19 to 30 “future small logistics” ships. The CAPE and Hudon fleets
increased the number of fleet oilers anywhere from 21 to 31, up from today’s 17….
The Hudson fleet called for a significant boost to the command and support ship
infrastructure from today’s 33 ships to 52 ships. CAPE called for the fleet to remain about
the same. Those ships include dry cargo ships, the expeditionary fast transports,
expeditionary transfer docks and expeditionary sea bases.
All told, the fleets posited between 316 and 358 “traditional” ships, but when new classes
and unmanned ships were lumped in, the fleet designs contained upwards of 500 ships or
more.87

87 David B. Larter and Aaron Mehta, “The Pentagon Is Eyeing a 500-Ship Navy, Documents Reveal,” Defense News,
September 24, 2020.
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A September 25, 2020, press report similarly stated that the Hudson Institute study called for a
Navy with 434 manned ships and 139 large UVs, including, among other things, 60 nuclear-
powered attack submarines (SSNs), 9 aircraft carriers, 80 corvettes, 26 Light Amphibious
Warships (LAWs), 99 medium unmanned surface vessels (MUSVs), and 40 extra-large unmanned
underwater vehicles (XLUUVs).88
June 2020 Testimony from Hudson Institute
At a June 4, 2020, hearing on hearing on future force structure requirements for the Navy before
the Seapower and Projection Forces subcommittee of the House Armed Services Committee, one
of the witnesses, Bryan Clark of the Hudson Institute, presented testimony that proposed a fleet of
473 manned ships and 152 large UVs, including 12 ballistic missile submarines; 61 SSNs; 10
large-deck, nuclear-powered aircraft carriers (CVNs); 77 large surface combatants (i.e., cruisers
and destroyers); 52 small surface combatants (i.e., frigates and Littoral Combat Ships); 91
corvettes; 33 larger amphibious ships, including 9 large-deck (LHD/LHA-type) ships and 24
small-deck (LPD-type) ships; 27 smaller Light Amphibious Warships (LAWs); 39 larger resupply
ships (including 20 oilers); 20 smaller oilers; 51 command and support ships; 112 MUSVs; and
40 XLUUVs.89
October 2020 Report from Hudson Institute
An October 2020 report by the Hudson Institute on future Navy force structure presented a
revised set of force-level goals, recommending a fleet of 442 manned ships and 139 large UVs,
including 12 ballistic missile submarines; 60 SSNs; 9 large-deck, nuclear-powered aircraft
carriers (CVNs); 64 large surface combatants (i.e., cruisers and destroyers); 52 small surface
combatants (i.e., frigates and Littoral Combat Ships); 80 corvettes; 30 larger amphibious ships,
including 8 large-deck (LHD/LHA-type) ships and 22 small-deck (LPD-type) ships; 26 smaller
Light Amphibious Warships (LAWs); 38 larger resupply ships; 18 smaller oilers; 53 command
and support ships; 99 MUSVs; and 40 XLUUVs.90

88 Justin Katz, “Enlisted by DEPSECDEF, Hudson Proposes Fleet Lighter on Carriers, Roughly 140 Unmanned
Vessels,” Inside Defense, September 25, 2020.
89 Prepared statement by Bryan Clark, Senior Fellow, Hudson Institute, to Seapower and Projection Forces
subcommittee, House Armed Services Committee, hearing on future force structure requirements for the United States
Navy, June 4, 2020, p. 4.
90 Bryan Clark, Timothy A. Walton, and Seth Cropsey, American Sea Power at a Crossroads: A Plan to Restore the US
Navy’s Maritime Advantage, Hudson Institute, September 2020, Table 1 on p. 9. The report was released on September
30, 2020.
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Appendix I. Potential Impacts of CRs on Navy
Shipbuilding Programs
This appendix provides background information on the potential impacts of continuing
resolutions (CRs) on Navy shipbuilding programs.
Potential Impacts of CRs on DOD Acquisition Programs, Including
Navy Shipbuilding Programs91
No New Starts, Quantity Increases, or Initiation of Multiyear Procurements
CRs can lead to challenges in the execution of DOD acquisition programs (i.e., research and
development programs and procurement programs), including Navy shipbuilding programs,
because they typically prohibit the use of funding provided for DOD under the CR for:
 implementing new program starts (aka “new starts”), meaning initiating new
program efforts that did not exist in the prior year—a prohibition that includes
not only the initiation of new acquisition programs, but also the shifting of an
existing acquisition program from its research and development phase to its
procurement phase;
 increasing a procurement quantity for a program compared with the program’s
procurement quantities in the prior year; and
 initiating multiyear procurements using advance procurement (AP) funding for
economic order quantity (EOQ) procurement unless specifically appropriated
later.92
Larger Contracts Broken into Smaller Contracts
Under a CR, DOD financial managers might dole out funding to DOD acquisition program
managers, including managers of Navy shipbuilding programs, in an incremental, piecemeal
fashion. This can require a program manager to divide an intended single contract into multiple
smaller contracts, which can increase the total cost of the effort by reducing economies of scale
within each of the smaller contracts and increasing Navy and contractor administrative costs.
R&D Efforts That Support Ongoing Procurement Programs
Ongoing DOD procurement programs, including Navy shipbuilding programs, are frequently
supported by ongoing research and development (R&D) work. R&D work on an existing
procurement program can, for example, support the development and integration of new systems
or components intended to improve the end item’s capability, reliability, or maintainability, or
reduce its operation and support (O&S) costs.

91 For a general discussion of the potential impacts of CRs on DOD, see CRS Report R45870, Defense Spending Under
an Interim Continuing Resolution: In Brief, coordinated by Pat Towell.
92 For more on multiyear procurements, including the use of AP funding for EOQ purchases, see CRS Report R41909,
Multiyear Procurement (MYP) and Block Buy Contracting in Defense Acquisition: Background and Issues for
Congress, by Ronald O'Rourke.
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Under a CR, R&D funding is managed at the account level, giving service officials some
flexibility in applying available R&D funding so as to protect high-priority R&D efforts,
particularly those that might require more funding in the current fiscal year than they received in
the previous fiscal year. Doing that, however, can reduce funding available under the CR for other
R&D efforts, including those supporting ongoing procurement programs, such as Navy
shipbuilding programs, which can lead to program-execution challenges for those programs.
Additional Potential Impacts of CRs Specific to Navy
Shipbuilding Programs
Line-Item Funding Misalignments
Unlike all other DOD acquisition accounts, the Navy’s shipbuilding account, known formally as
the Shipbuilding and Conversion, Navy (SCN) appropriation account, is funded in the annual
DOD appropriations act not just with a total appropriated amount for the entire account, but also
with specific appropriated amounts at the line-item level. SCN line items in the DOD
appropriations act are not just specific to individual shipbuilding programs—they also distinguish
between procurement funding and advance procurement (AP) funding within those programs.
As a consequence, under a CR, SCN funding is managed not at the account level (like funding is
under a CR for other DOD acquisition accounts), but at the line-item level. For the SCN
account—uniquely among DOD acquisition accounts—this can lead to line-by-line funding
misalignments (excesses and shortfalls) for individual shipbuilding programs, compared with the
amounts those shipbuilding programs received in the prior year. The shortfalls in particular can
lead to program-execution challenges in shipbuilding programs, particularly under an extended or
full-year CR. This unique situation of line-by-line funding misalignments is an important
distinction between the potential impacts of CRs on Navy shipbuilding programs and the
potential impacts of CRs on other DOD acquisition activities.
Cost-to-Complete (CTC) Funding
Cost-to-complete (CTC) funding is funding in the SCN account that the Navy uses to cover cost
growth on the construction of Navy ships that were funded in prior fiscal years. The Navy
requests CTC funding in a line item in the SCN account called Completion of PY (Prior Year)
Shipbuilding Programs. This line item separate from the line items in the SCN account that were
used to originally fund the procurement of the ships in question. Funding in this line item is
requested in specific amounts for individual ships that are under construction. CTC funding is
typically appropriated by a specific Title VIII provision in the annual DOD appropriations act that
specifies the amounts of CTC funding for shipbuilding programs at the line-item level.
The Navy states that, for purposes of operating under a CR, CTC work is considered to be a new
start and is therefore typically prohibited under a CR,93 a judgment that can be viewed as
consistent with the above-described treatment of CTC funding in the SCN account and/or the
annual DOD appropriations act,
The deeming of CTC work as a new start, and therefore prohibited under a CR, could lead to
situations under a CR in which ships under construction remain in shipyards without undergoing
work needed to complete their construction—something that could not only delay the completion
of those ships, but might also increase their total construction costs, because a ship under

93 Source: Navy FY2018 program briefing to CRS and CBO, September 20, 2017.
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construction is charged, for each day that it is in its construction shipyard, some of the fixed
overhead costs of that shipyard.
Avoiding or Mitigating Potential Impacts of CRs
Anomalies Can Avoid or Mitigate Potential Impacts
The potential impacts described above can be avoided or mitigated if the CR includes special
provisions, called anomalies, for exempting individual programs or groups of programs from the
general provisions of the CR, or if the CR includes expanded authorities for DOD for
reprogramming and transferring funds.
DOD Has Adapted to Likelihood of CRs to Avoid or Mitigate Impacts
The potential impacts described above can also be mitigated if the agency (in this case, the Navy)
anticipates that one or more CRs will likely be used to fund DOD for the first few months of the
fiscal year, and consequently decides to structure acquisition programs to avoid, during those
months, planned contract signings or other actions that would be prohibited by a CR. The military
services have observed that in many cases in recent years, CRs have been used to fund DOD for
the first few months of the fiscal year. As an apparent adaptation, DOD program managers are
now structuring their programs to reduce the potential impacts of DOD being funded during the
first few months of the fiscal year by CRs.
A September 2021 GAO report on practices that DOD has adopted for managing within the
constraints of CRs states the following:
GAO found that the Department of Defense (DOD) and the military services’ obligations
and acquisitions are limited during a Continuing Resolution (CR), but they have some
practices in place to minimize the effects. Specifically, GAO found that for selected
appropriations’ accounts for fiscal years 2017 through 2020, the military services tended
to obligate, (i.e., make a legal commitment to pay for goods or services), a lower percentage
of their total annual obligations in the first quarter of the fiscal year—when DOD is most
likely to be operating under a CR—as compared with the other quarters....
Although DOD officials reported acquisitions were constrained by CR provisions that
restrict starting new programs and production rate increases, the programs GAO reviewed
were able to avoid delays or cost increases during the fiscal years with CRs. The military
services have instituted some practices to minimize the effects of CRs, including initiating
service contract start dates after the first quarter of the fiscal year and postponing
nonessential purchases and training to later in the fiscal year.
DOD officials stated both that the repetition and incremental planning required during a
CR is not an effective or efficient way to operate, but that preparing for and operating under
CRs have become routine in nature. GAO identified three activities directly related to
preparing for and operating under CRs—developing legislative anomaly proposals (i.e.,
requests for authority beyond the standard CR provisions), creating spending plans for
various CR scenarios, and adjusting contracts to reflect CR funding availability.94
In an October 3, 2021, opinion piece about this GAO report, a GAO official states
Our first key point [in the report] is that there are clear effects of CRs on DOD. We
collected and analyzed each military service’s quarterly obligation data for fiscal years

94 Government Accountability Office, Defense Budget[:] DOD Has Adopted Practices to Manage within the
Constraints of Continuing Resolutions, GAO-21-541, September 2021 (released September 13, 2021), summary page.
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(FY) 2017 through 2020 for three appropriations accounts—Operation and Maintenance;
Research, Development, Test and Evaluation (RDT&E); and Procurement (other)—to
assess the percentage of annual funds each military service obligated during CRs and after
the enactment of regular appropriations. We saw an unmistakable difference in spending
patterns during those fiscal years with CRs and the one recent fiscal year without (fiscal
year 2019)....
... we also determined that DOD has developed some practices to mitigate the effects of
CRs. For instance, officials can request so-called anomalies to get permission from
Congress to spend funds they would normally be restricted from spending during a CR.
They can also initiate the start date for one-year service contracts to the second quarter of
the fiscal year to avoid a break in service at the beginning of the next fiscal year.
[Other observers] suggest that because these practices are in place, we conclude that CRs
are benign. On the contrary, our report provides a more complex discussion of these
mitigation practices.
Take, for example, our discussion of major defense acquisition programs (MDAPs) and
the constraints posed by the No New Starts provision typically contained in CRs. We
analyzed each of the 254 Selected Acquisition Reports the military services submitted to
Congress for fiscal years 2017 through 2019....
Of the 254 reports, we identified seven that explicitly cited CRs as posing risks, such as
delays and cost increases. When we met with officials, however, we learned that the CRs
did not have their predicted effects on these seven programs. We further listed the ways in
which DOD managed to avoid the potential problems and cited officials’ continued
concerns.
For example, we reported that the Navy avoided a problem it faced with its Ship to Shore
Connector, which was under production in FY19, but that did not have any planned
production in FY20. This gap in production would have meant that any production in FY21
would constitute a “new start” and, therefore, be prohibited under a CR. In this case,
Congress authorized the production of a single Ship to Shore Connector during FY20,
preventing a production gap. Nonetheless, as we reported, officials also warned there were
zero units planned for production in FY21, creating the same risk for FY22.
The key takeaway from our report, therefore, is not that CRs are inconsequential but, rather,
that defense officials have found ways to prepare for and respond to the very real
constraints they pose.95
In connection with the use of a CR to fund the first part of FY2017, a September 29, 2016, press
report stated the following:
The Navy has planned for and can mitigate the effects of [a CR], as long as Congress passes
a proper Fiscal Year 2017 budget by Dec. 9, 2016.
The Navy planned for most of its major acquisition milestones to take place in the second
quarter of the fiscal year rather than the first quarter, predicting that the year would likely
start off with a continuing resolution, Navy spokeswoman Lt. Kara Yingling told USNI
News. Under a continuing resolution, the previous year’s funding levels carry over,
meaning that new budget items are not funded and programs expecting a significant
funding boost would continue to operate at the previous year’s lower levels.
“The Navy has many new starts and program increases planned in FY ‘17. However, a CR
through December 9th is manageable because more of the initial contracts are scheduled in

95 Elizabeth Field, “Defense Officials Find Ways to Operate within Continuing Resolutions—But That Doesn’t Mean
CRs Are Smooth Sailing,” The Hill, October 3, 2021.
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Quarter 2 [of the fiscal year] and the Navy can take mitigating action for the first three
months of FY ’17,” Yingling said today....
Though program managers and Navy acquisition officials often note that stable and
sufficient funding would help them better keep their programs on track, Yingling said the
service would manage the impact of this six-week CR....
“Due to historical CRs, most FY ‘17 contracts are planned for Q2,” Yingling said, and if
the second quarter of the fiscal year is also governed by a CR then the Navy would look at
potentially awarding smaller contracts to get programs started—a contracting burden that
would cost more and potentially slow down programs’ progress.96
As another example, in connection with the use of a CR to fund the first part of FY2018, a
September 11, 2017, press report stated the following:
Pentagon plans to ramp up production of about two-dozen major weapon systems in fiscal
year 2018 would be largely unaffected by the stopgap spending bill President Trump and
congressional leaders hope to enact, funding the federal government from Oct. 1 to Dec. 8.
Nearly all of the big-ticket programs that aim to increase procurement rates in FY-18
compared to FY-17—including deals for a new aircraft carrier, more armored vehicles,
tank upgrades, precision munitions and aircraft—have set target dates to execute contract
awards after that 10-week window, according to a review of Pentagon budget documents.97
Similarly, an October 6, 2017, press report about the use of a CR to fund the first part of FY2018
stated the following: “The Navy tends to avoid planning contract actions in the first quarter of the
fiscal year, since the last nine years have begun under a continuing resolution.”98
At a September 19, 2017, hearing before the Senate Armed Services Committee on recent Navy
ship collisions, the following exchange occurred (emphasis added):
SENATOR JEANNE SHAHEEN (continuing):
... I wonder if you could talk in detail about the impact of continuing resolutions, budget
cycle after budget cycle, and how they affect maintenance and training plans for ships. And
are forward deployed ships affected more than ships stateside? Can you—is there any
correlation there?
ADMIRAL JOHN M. RICHARDSON, CHIEF OF NAVAL OPERATIONS
Ma’am, as I said, we will prioritize our resources to those forces that are forward deployed
and that will deploy forward. And so we will not leave those teams short of resources.
Having said that, the uncertainty that they can—well actually—it’s become actually
certain. We’re certain that we're not going to get a budget in the first quarter [of the
fiscal year]. And so...
(CROSSTALK)
SHAHEEN:
Which is a sad commentary on the budget situation.
RICHARDSON:

96 Megan Eckstein, “Navy Can Weather 6-Week Continuing Resolution, But Extension Would Delay Columbia
Submarine Class, Other Programs,” USNI News, September 29, 2016.
97 Jason Sherman, “DOD Procurement Plans Largely Safe Under Short-Term FY-18 CR,” Inside the Navy, September
11, 2017.
98 Megan Eckstein, “Top Navy Procurement Programs Facing Slow Start In FY 2018 Due to Continuing Resolution,”
USNI News, October 6, 2017.
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... behaviors have adapted. And so we don't put anything in the important in the first
quarter of the [fiscal] year, and we have to compete three out of four quarters of the
game.
And, in addition to just that fact, the—what happens is you have to double your contracting,
right? You have to write a tiny little contract for the length of the continuing resolution,
and then you have to write another one for the rest of the year. As you know, nothing new
can start, and so we try not to schedule anything new in that first quarter.
The maintenance and training—those are the hardest things. And so, as those—as the
uncertainty, you know, injects itself, it is always—the things on the bubble [i.e., at risk of
being affected] are maintenance periods, particularly surface ship maintenance periods.
It is, you know, “How many steaming hours am I going to get? How many flying hours am
I going to get? $150 million per month shortfall—how do I manage that?” These are the
effects of the continuing resolutions.99
A September 28, 2017, press report states the following:
The Navy has gotten creative in dealing with budget uncertainties and continuing
resolutions, developing a new ship maintenance contract structure to keep 11 ship
availabilities on track at the beginning of Fiscal Year 2018 that would otherwise face major
delays due to the impending CR, the head of surface ship maintenance told USNI News.
Rear Adm. Jim Downey, commander of Navy Regional Maintenance Centers and deputy
commander for surface warfare at Naval Sea Systems Command (NAVSEA) told USNI
News today that up to a third of the ship maintenance workload can be put at risk when the
fiscal year starts with a CR. This year, the Pentagon has already said 11 ship availabilities
are at risk....
To avoid these delays, Downey said the Navy is now awarding contracts that are structured
differently, to leverage the fact that maintenance work is typically funded with one-year
money—use-it-or-lose-it money which must be spent in the year it is appropriated by
lawmakers—whereas modernization efforts are typically paid for with three-year money.
In essence, the planning and early work for a ship availability can get started as a ship
modernization effort, with planning and early activities paid for with three-year money
already in the Navy’s accounts, and one-year maintenance work can be added in later, once
the availability is already underway and Congress eventually gives the Navy its full-year
appropriations.
“We’ve worked very hard on how we structure our funding to get the planning to keep all
those ships in play, and to keep them in play to their schedule, expecting that the funding
is going to come just in time,” Downey said.
“So we do the planning for them. … And then we go ahead and structure that contract to
deal with the continuing resolution. So the base work now may be more modernization-
related because I have that money, and I’m going to lay the maintenance work in as an
option. So I’m going to award you the contract; I may not be 100-percent funded but I am
funded for this part. I’m going to award the contract to you—we’re currently referring to
it as a split-CLIN approach—so that you’ve got the work and you know that the rest of the
work is coming, you’re going to be able to bid against it, we’re going to exercise those
options if we get the budget approved.”
Downey told USNI News that he can’t change how Congress appropriates money—the
Department of Defense has begun every fiscal year since FY 2010 under a continuing
resolution, during which time the Navy cannot fund new projects and cannot ramp up
spending above the previous year’s levels – but he can best set up the Navy to succeed in

99 Source: Transcript of hearing.
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this kind of new normal. Though the Navy has already largely stopped planning acquisition
contract actions during the first quarter of the year, ship maintenance, modernization and
repair work must take place throughout the year to maintain even workloads at the yards
and to address emergent issues, and therefore required a creative solution to get around the
CRs.
“The first issue is, if you don’t have all the money, especially with single-year
appropriations in maintenance, how do you do that? So we’re getting as legally creative as
we can. So then you get a repair yard that says, okay, so I’m betting on this other work.
Then you go to, historically, when have we not had a budget ultimately? It’s going to come
through at some point,” he said.100
Although structuring acquisition programs to avoid, during the first few months of a fiscal year,
planned contract signings or other actions that would be prohibited by CRs can mitigate the
potential impacts of CRs on the execution of DOD acquisition programs, it might also lead to a
risk, from DOD’s perspective, of a creating a so-called “moral hazard”—that is, of taking an
action that might be well-intentioned, but that, as a consequence of adapting to an undesired
behavior by another party (in this case, Congress’s use of CRs to fund DOD at the start of fiscal
years), might encourage more of that behavior from the other party in the future.

Author Information

Ronald O'Rourke

Specialist in Naval Affairs

Disclaimer
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under the direction of Congress. Information in a CRS Report should not be relied upon for purposes other
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100 Megan Eckstein, “Navy Using ‘Legally Creative’ Contract Structure to Keep Ship Availabilities On track Despite
Continuing Resolutions,” USNI News, September 28, 2017.
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