Summary
The Navy and the Department of Defense (DoD) have revealed a long-range plan to procure 6.3 to 7. 7 new Navy ships per year during the 12 year period FY2004-FY2015. Such a procurement rate could reduce the Navy from about 350 ships today to less than 300 ships by the 2020s. Congress likely will be interested in the implications of this plan on the Navy’s capability to perform its missions in the future. The plan also raises a question regarding the priority given to shipbuilding in the projected future allocation of DoD procurement funding. Policymakers may wish to explore options for extending ship service lives or reducing the number of ships needed to perform the Navy’s missions.
Introduction
In July 1997, the Navy and DoD revealed that DoD plans for FY2004-FY2015-the 12 year period beyond the current (FY1998-FY2003) Future Years Defense Plan (FYDP)–call for procuring a total of 76 to 92 new Navy ships, or an average of about 6.3 to 7. 7 per year. Included in the total are 23 submarines, 2 aircraft carriers, 35 surface combatants, 10 amphibious ships, and 6 to 22 auxiliaries and mine warfare ships.
This 12 year plan is the Navy ship component of the Defense Procurement Plan (OPP), which projects procurement rates for various DoD procurement items for 12 years (the equivalent of 2
additional FYDPs) beyond the end of the current FYDP. The OPP is a DoD internal long-range planning document that is rarely disclosed to individuals outside DoD or the executive branch.
An earlier CRS report discussed the potential implications of this projected long-term ship procurement rate for the U.S. shipbuilding industry, particularly the 6 private-sector shipyards that build the Navy/s major ships.2 This report discusses the potential implications of this projected long-term ship procurement rate for the future size of the Navy, the future allocation of DoD procurement funding, and Navy ship service lives and operational concepts.
Future Size of the Navy
Assuming a fleet-wide average ship service life of 35 years, maintaining the Navy at its currently planned size of 330 to 346 ships over the long run would require an average long-term Navy ship procurement rate of 9 or 10 new ships per year. The projected FY2004-FY2015 ship procurement rate of 6.3 to 7. 7 new Navy ships per year, while higher than the average of about 5.2 new Navy ships per year in the FY1998-FY-2003 FYDP, is still less than this long-term steady-state replacement rate of 9 or 10 new Navy ships per year.
Navy ship procurement has been below 9 or 10 ships per year since FY 1993 and is programmed under the current FYDP to remain below that rate through FY2003. This 11 year period of relatively low ship procurement rates is creating a Navy ship procurement bow wave-an accumulation of deferred Navy ship procurement requirements-that policymakers will face after the tum of the century. The FY2004-FY2015 ship procurement plan would extend the period of less than steady-state Navy ship procurement rates through FY2015 and thereby add further to the ship procurement bow wave.
Given the large number of relatively young ships in today’s Navy, a fleet of 330 to 346 ships could be maintained in the short run with a Navy ship procurement rate of less than 9 or 10 new ships per year. Unless ship service Jives are increased {see section below), however, the FY2004-FY2015 shipbuilding plan would make it very difficult for policymakers to maintain a Navy of even 300 ships in the long term. Using a fleet-wide average ship service life of 35 years, a sustained Navy ship procurement rate of 6.3 to 7 .7 new ships per year would result in a Navy of about 220 to 270 ships by the late 2020s.
It is not clear whether a Navy of less than 300 ships could perform its stated missions. The issue will depend on how technological developments affect the capabilities of U.S. Navy ships, aircraft, weapons, and other equipment, and on how the international security environment develops over the next quarter century. As discussed in CRS testimony to Congress in February 1997, The size of the Navy could be maintained about where it is past the tum of the century, but the fleet would begin to shrink rapidly after about 2010, and particularly after 2020, as today”s ships reach the ends of their service lives in large numbers. In assessing the potential risks of this scenario, it can be noted that this rapid and significant diminution in the size of the Navy would occur at about the same time that the United States might be confronted with a large and modem Chinese navy, a rejuvenated Russian navy, and significantly improved maritime military capabilities in other countries, such as Iran.
The projected FY2004-FY2015 ship procurement rate raises the question of whether DoD and the Navy plan to maintain a 330 to 346 ship fleet. The 346 ship figure was first established by the October 1993 Bottom-Up Review (BUR) of U.S. defense policy and programs,6 and Navy testimony in 1994-1996 variously supported a fleet of 330 to 346 ships.
Navy testimony in early 1997, mostly avoided the issue of the total fleet size. 8 Although the Quadrennial Defense Review (QDR) of U.S. defense policy and programs, released in May 1997, marginally reduced the planned number of surface combatants and attack submarines, it did not establish a new figure for the total size of the Navy.’ This might be read as an indication that DoD and the navy intend to maintain a Navy of 330 to 346 ships by FY2003. If true, there is a question of why this planned reduction was not made more clear in the report on the QDR.
Future Allocation of DoD Procurement Funding
DoD plans to increase total DoD procurement funding to about $60 billion per year by FY2001. This level of funding, DoD has stated, would be sufficient to fund the services’ long-term procurement needs. The planned FY2004-FY2015 ship procurement rate is less than the long-term steady-state replacement rate of 9 to 10 new Navy ships per year. This raises a question regarding the priority given to Navy ship procurement in DoD plans for allocating the $60 billion per year in total DoD procurement funding that is to be available after the tum of the century.
Since FY1985, the Navy’s ship procurement budget, known formally as the Shipbuilding and Conversion, Navy (SCN) appropriation account, has received an average of about 12.8 percent of total DoD procurement funding. This compares with an average of about 15.0 percent for the 30 year period 1955-1984, and an average of about 16.7 percent for the 15 year period FY1970-FY1984.12 The SCN account’s average share of total DoD procurement funding since the mid 1980s has thus been roughly 2 to 4 percentage points lower than in earlier years. For a total DoD procurement budget of about $60 billion per year, 2 to 4 percent equates to about $1.2 billion to $2.4 billion per year. Given a current average Navy ship procurement cost of about $1 billion per ship-a rough figure looking across all ship types-this would equate to roughly 1 or 2 new Navy ships per year.
Since projected funding levels for total DoD procurement and SCN during FY2004-FY2015 have not been released, it is not known what the SCN share of total DoD procurement funding is
projected to be during this period. Nor is it clear, given potential future changes in the composition of DoD procurement or the relative costs of various DoD procurement items (including ships) whether SCN’s future share of total DoD procurement funding should be higher, lower, or about equal to what it has been at various points in the past. It is also possible that the relatively low rate of new Navy ship procurement projected for FY2004-FY2015 results not from a low priority having been given to SCN in the projected allocation of DoD procurement funding, but rather from an inability to fund adequately total DoD procurement on a total budget of about $60 billion per year.
Ship Service Lives and Operational Concepts
If ship service lives can be increased from the current fleet-wide average of about 35 years to a figure closer to 45 or 50 years (the latter is the current figure for aircraft carriers), then a ship procurement rate of 6.3 to 1.1 new Navy ships per year would be sufficient to maintain a fleet of 330 to 346 ships over the long run. Ship service lives have generally been increasing in recent decades due to improved construction methods and better techniques for monitoring and maintaining ship structures and components. Next generation ship combat systems built around open-architecture computer standards, moreover, may make it easier and more cost effective in the future to upgrade the combat systems of older ships so as to maintain their effectiveness against improvements in the capabilities of potential adversary forces. At this point, however, it is not clear that the fleet-wide average service life can be increased by another 10 to 15 years, particularly since the Navy for many years to come will continue to be constituted to a large degree by current-generation ships with older design combat systems.
If ship service lives cannot be substantially increased and fleet size eventually declines, one strategy for offsetting the numerical decline might be to alter Navy ship operational concepts so that a fleet of 300 or fewer ships could perform the same missions as can be performed today by a fleet of 330 to 346 ships. One potential means for achieving this would be to substantially reduce the station keeping multiplier-number ships of a given kind needed to keep a single ship of that kind on station in an overseas operating area.
One method to reduce the station keeping multiplier is to home port Navy ships overseas. Overseas home porting, however, poses several issues that would need to be addressed.
Another potential option would be to deploy ships to overseas operating areas for extended periods of time and then rotate multiple crews to the ships in succession. The Navy’s proposed arsenal ship would have been deployed in this manner, and the Navy is considering applying the concept to the DD-21, the Navy’s next-generation destroyer, and other future classes of Navy ships. “Such an approach could have implications not only for the total size of the Navy needed to perform a given set of missions. but also for the role of naval reserve personnel, whose contribution to forward deployed operations has traditionally been constrained by their inability to participate in overseas deployments involving lengthy\ transits to and from the operating area.
