Follow the Money…to Your Local Shipyard

Good Time to be in shipbuildingFollow the Money…to Your Local Shipyard

National Security,  | Quick Take
Feb 15, 2018  | 3 min read | Print Article

The Fiscal Year 2019 budget request from the Department of the Navy includes roughly $58 billion for procurement programs. The vast majority of that, more than $41 billion, is for the purchase of aircraft and ships.

Specific to shipbuilding, the Navy is requesting $21.9 billion in the coming fiscal year for all manner of surface ships and submarines in its inventory. In terms of simple number of ships or subs, the Navy plans to buy 17 new hulls and do one service life extension with this money.

The FY19 program, if approved by Congress, would purchase two more Virginia class fast attack submarines for $4.3 billion. It would also spend $3 billion on advanced procurement for the new Columbia class of ballistic missile submarine, slated to replace the current Ohio class sub.

Another $5.2 billion is in the request for three new destroyers. And roughly $650 million is requested for what is apparently the last Littoral Combat Ship (LCS). We say apparently, because the outyear shipbuilding request that is included among the budget documents shows the first tranche of procurement money being requested for a much-anticipated new frigate appearing in Fiscal Year 2020. The apparent plan is to phase in the new frigate program as they phase out the LCS. Confusingly, the deservedly much maligned LCS will be one of the designs competing to be the new frigate which is supposed to be an “off the shelf” foreign or domestic design that can be constructed at a U.S. shipyard.

Also part of the Navy’s annual budget documentation is the “Long-Range Plan for Construction of Naval Vessels.” This report covers a 30-year span from FY2019-FY2048. Chart A5-1 shows spending on shipbuilding peaking in FY2031 at roughly $26 billion with a low in FY2036 of about $15 billion.

One sign that the Navy isn’t concerned about not having enough money to buy ships: the National Sea-Based Deterrence Fund has zero dollars requested in its line item. This ill-considered fund was the brainchild of a former member of the House of Representatives as a budget dodge to take the costs of replacing the Ohio class submarine out of the Navy’s budget and making it a “national strategic” program. We’ve written about that a lot in the past and we’re happy to see that it appears this is a bad idea whose time has not come.

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But either way, it’s a good time to be in shipbuilding.

With a huge budget like this, there’s plenty of opportunity for waste. So shipbuilding is an account we’ll be keeping our eye on.

GO TO THE FY19 BUDGET LANDING PAGE.