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As the Congress considers the defense budget for fiscal year 1983, one of the more important issues will be the Navy's shipbuilding program. The Administration has announced plans to increase U.S. naval forces in the interest of assuring maritime superiority over any likely enemy. A key aspect of this is a shipbuilding program that will modernize and increase the size of the U.S. fleet. This shipbuilding program will add substantially to costs, both in fiscal year 1983 and in the future.

This report, prepared at the request of the House Committee on Armed Services, examines the budget and schedule implications of shipbuilding programs that would achieve the Navy's force objectives. The report also examines possible alternatives to the Navy's program. (Two forthcoming companion reports consider implications of the buildup for aircraft procurement and manpower.) In accordance with CBO's mandate to provide objective and nonpartisan analysis, the report offers no recommendations.

This report was prepared by Peter T. Tarpgaard of the National Security and International Affairs Division of the Congressional Budget Office, under the general supervision of Robert F. Hale and John Hamre. Patrick Haar of CBO's Budget Analysis Division provided essential support to the project in preparing budget estimates. John Enns, Alan Shaw, Al Peden and others on the CBO staff contributed to the estimates of costs. John Wells of the Institute for Defense Analyses provided invaluable assistance in the assessment of U.S. shipbuilding capacity. The author gratefully acknowledges the helpful comments and assistance of Alfred Fitt and Greg Schulte of the CBO staff and of Dorothy Yufer and Ronald Feldman of the Center for Naval Analyses. (The assistance of external reviewers and contributors implies no responsibility for the final product, which rests solely with CBO.) Patricia H. Johnston edited the manuscript, and Nancy H. Brooks provided extensive editorial assistance. Jean Haggis and Janet Stafford prepared the report for publication.
 

Alice M. Rivlin
Director
March 1982
 
 

SUMMARY

CHAPTER I. INTRODUCTION

CHAPTER II. RATIONALE FOR THE 600-SHIP NAVY

• U.S. vs. the Soviet Union at Sea
• The U.S. Navy Today: Higher Commitments--Smaller Fleet
• The Future Navy--the Navy's Plan
• The Future Navy--What is Needed?

CHAPTER III. BUILDING THE FUTURE NAVY-ALTERNATIVE APPROACHES

• Overview of Options for Naval Shipbuilding Programs
• Option I: Rapid Buildup to Navy Force Objectives
• Option II: Moderately Paced Buildup to Navy Force Objectives
• Option III: Budget Constrained Program
• Option IV: Expanded Navy of Modified Force Mix

CHAPTER IV. INDUSTRY AND NAVAL FORCE EXPANSION

• The U.S. Shipbuilding Industry
• The Options--Industry Implications

CHAPTER V. OVERALL COST IMPLICATIONS OF NAVAL FORCE EXPANSION

• Other Cost Categories
• Costs of the Future Navy--Estimates for the Four

CHAPTER VI. CURRENT ISSUES FOR THE CONGRESS

• Basic Directions
• The Five-Year Shipbuilding Program
• Summary Assessment of the Five-Year Shipbuilding Plan

APPENDIX A. OPTION I: NAVY FORCE OBJECTIVES-SHIPS IN FLEET BY 1992 AND AUTHORIZED BY 1988

APPENDIX B. OPTION II: NAVY FORCE OBJECTIVES-SHIPS IN FLEET BY 1996 AND AUTHORIZED BY 1992

APPENDIX C. OPTION III: REDUCED FORCE OBJECTIVES--SHIPS IN FLEET BY 1996 AND AUTHORIZED BY 1992

APPENDIX D. OPTION IV: MODIFIED FORCE MIX, EXPANDED FORCE LEVELS--SHIPS IN FLEET BY 1996 AND AUTHORIZED BY 1992

APPENDIX E. OPEN-OCEAN DESTROYER (DDGY)

APPENDIX F. BASIS FOR BUDGET AUTHORITY ESTIMATES FOR OPTIONS I THROUGH IV

GLOSSARY
 

TABLES
1.	SHIPS INCLUDED IN NAVY FORCE LEVEL GOALS, BY TYPES
2.	NAVY OBJECTIVE FOR SURFACE COMBATANT FORCE LEVEL
3.	AMPHIBIOUS LIFT REQUIREMENTS
4.	REPLENISHMENT SHIPS: OBJECTIVES AND CURRENT FORCE
5.	NAVAL FORCE OBJECTIVES
6.	OPTION I: RAPID BUILDUP TO NAVY FORCE OBJECTIVES--SHIPS IN FLEET BY 1992 AND AUTHORIZED BY 1988
7.	OPTION I: RAPID BUILDUP TO NAVY FORCE OBJECTIVES--ILLUSTRATIVE SHIPBUILDING PROGRAM
8.	OPTION II: MODERATELY PACED BUILDUP TO NAVY FORCE OBJECTIVES--SHIPS IN FLEET BY 1996 AND AUTHORIZED BY 1992
9.	OPTION II: MODERATELY PACED BUILDUP TO NAVY FORCE OBJECTIVES--ILLUSTRATIVE SHIPBUILDING PROGRAM
10.	OPTION III: BUDGET CONSTRAINED PROGRAM--SHIPS IN FLEET BY 1996 AND AUTHORIZED BY 1992
11.	OPTION III: BUDGET CONSTRAINED PROGRAM--ILLUSTRATIVE SHIPBUILDING PROGRAM
12.	OPTION IV: EXPANDED NAVY OF MODIFIED FORCE MIX--SHIPS IN FLEET BY 1996 AND AUTHORIZED BY 1992
13.	OPTION IV: EXPANDED NAVY OF MODIFIED FORCE MIX--ILLUSTRATIVE SHIPBUILDING PROGRAM
14.	REAL VALUE OF SHIPMENTS PER EMPLOYEE, 1972-1976
15.	MAJOR U.S. SHIPBUILDING YARDS, BY REGION, DECEMBER 1980
16.	SUMMARY OF RESULTS OF IDASAS CALCULATION OF MINIMUM INDUSTRIAL REQUIREMENTS FOR FOUR OPTIONS
17.	OPTION I: ESTIMATED BUDGET AUTHORITY FOR DEPARTMENT OF THE NAVY
18.	OPTION II: ESTIMATED BUDGET AUTHORITY FOR DEPARTMENT OF THE NAVY
19.	OPTION III: ESTIMATED BUDGET AUTHORITY FOR DEPARTMENT OF THE NAVY
20.	OPTION IV: ESTIMATED BUDGET AUTHORITY FOR DEPARTMENT OF THE NAVY
21.	ADMINISTRATION'S PROPOSED SHIPBUILDING PROGRAM FOR FISCAL YEARS 1983-1987
A-l.	ILLUSTRATIVE SHIPBUILDING PROGRAM FOR OPTION I: NAVY FORCE OBJECTIVES--SHIPS IN FLEET BY 1992 AND AUTHORIZED BY 1988
A-2.	ILLUSTRATIVE FORCE STRUCTURE FOR OPTION I: NAVY FORCE OBJECTIVES--SHIPS IN FLEET BY 1992 AND AUTHORIZED BY 1988
B-l.	ILLUSTRATIVE SHIPBUILDING PROGRAM FOR OPTION II: NAVY FORCE OBJECTIVES--SHIPS IN FLEET BY 1996 AND AUTHORIZED BY 1992
B-2.	ILLUSTRATIVE FORCE STRUCTURE FOR OPTION II: NAVAL FORCE OBJECTIVES--SHIPS IN FLEET BY 1996 AND AUTHORIZED BY 1992
C-l.	ILLUSTRATIVE SHIPBUILDING PROGRAM FOR OPTION III: REDUCED FORCE LEVEL OBJECTIVES--SHIPS IN FLEET BY 1996 AND AUTHORIZED BY 1992
C-2.	ILLUSTRATIVE FORCE STRUCTURE FOR OPTION III: REDUCED FORCE LEVEL OBJECTIVES--SHIPS IN FLEET BY 1996 AND AUTHORIZED BY 1992
D-l.	ILLUSTRATIVE SHIPBUILDING PROGRAM FOR OPTION IV: MODIFIED FORCE MIX, EXPANDED FORCE LEVELS-SHIPS IN FLEET BY 1996 AND AUTHORIZED BY 1992
D-2.	ILLUSTRATIVE FORCE STRUCTURE FOR OPTION IV: MODIFIED FORCE MIX, EXPANDED FORCE LEVELS--SHIPS IN FLEET BY 1996 AND AUTHORIZED BY 1992
E-l.	CHARACTERISTICS OF ALTERNATIVE SHIP TYPES
E-2.	DERIVATION OF DDGY DISPLACEMENT AND COST USING FFG-7 AS BASELINE
FIGURES
1.	SHIPBUILDING AND CONVERSION, NAVY BUDGET LEVELS SINCE 1975 AND PROJECTED TO 1995 UNDER FOUR SHIPBUILDING PROGRAM OPTIONS
2.	NAVY BUDGET AUTHORITY SINCE 1975 AND PROJECTED TO 1995 UNDER FOUR PROGRAM OPTIONS
E-l.	FOUR ALTERNATIVE SHIP TYPES

 

Once the indisputably dominant power at sea, the United States has seen this dominance erode over the past two decades as a result of steady growth in Soviet naval capabilities and declining force levels in the U.S. Navy. Between 1970 and 1980 the total number of ships in the U.S. Navy fell from 847 to 538 and uniformed personnel strength declined from 675,000 to about 525,000. Although the remaining ships are newer and more capable than those retired, the Navy now has substantially fewer ships with which to sustain its peacetime commitments or to conduct wartime operations. One result has been an operational pace in recent years nearly unprecedented in peacetime. The Chief of Naval Operations recently testified that "the Navy has been at virtually a wartime operating tempo since the beginning of the Vietnam conflict and has never stood down."

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