CBO report: Plan underestimates ship costsBy Lance M. Bacon - Staff writer
Posted : Wednesday May 26, 2010 18:06:45 EDT
Navy cost estimates for its 30-year shipbuilding plan are short to the tune of $93 billion, or 18 percent, according to a Congressional Budget Office report released Tuesday. The independent analysis was done at the request of the House’s Seapower and Expeditionary Forces subcommittee.
Replacing Ohio-class ballistic missile submarines presented the largest difference between CBO and Navy numbers. The Navy, which was strongly criticized for not including any cost estimates in its 2009 shipbuilding plan, now puts the cost at $86 billion, or $7.2 billion per boat. CBO puts the cost at $8.2 billion per boat for a total price tag of $99 billion.
The planned replacement of 14 ballistic missile subs with 12 new Tridents has already caused contentions as the move will cut all shipbuilding by half for 14 years to cover the cost, according to a July 2009 Congressional Research Service report. CBO’s most recent analysis, which bumps the cost further still, comes less than one month after Defense Secretary Robert Gates questioned whether “the nation can really afford a Navy that relies on $3 to 6 billion destroyers, $7 billion submarines, and $11 billion carriers.”The Navy’s plan, sent to Capitol Hill on Feb. 1, looks to buy 276 ships — 198 combat ships and 78 logistic and support ships — to boost the 286-ship fleet past the goal of 313 to a force of 323 ships. This would occur over three decades at an annual cost of “no more than $15.9 billion per year” in 2010 dollars. That represents a $1 billion increase over annual funding seen over the past 30 years (in 2010 dollars). When post-delivery costs and things such as refueling nuclear-powered aircraft carriers are added to the plan, the annual shipbuilding budget would hit $18 billion, according to Navy documents.
The CBO report said the Navy’s estimates come up short. The average baseline cost will be $19 billion annually, and total costs will hit $21 billion, the report said.