CONGRESS OF THE UNITED STATES

CONGRESSIONAL BUDGET OFFICE

A

CBO

STUDY

MAY 2006

Options for the 

Navy’s Future

Fleet
Pub. No. 2680
The Congress of the United States O Congressional Budget Office

CBO

Options for the Navy’s Future Fleet

May 2006

A

STUDY
Notes

Unless otherwise indicated, all years referred to in this study are federal fiscal years (which run 

from October 1 to September 30), and all dollar amounts are in 2007 dollars.

Numbers in the text and tables may not add up to totals because of rounding.

The cover shows (clockwise from upper right): a fast combat support ship (T-AOE-6), an 

artist’s conception of the littoral combat ship, an amphibious assault ship (LHD-6), a Nimitz 

class aircraft carrier (CVN-73), an Arleigh Burke class destroyer (DDG-75), and a Los Angeles class attack submarine (SSN-760). Photos are courtesy of the U.S. Navy and General 

Dynamics.
Preface

Today’s Navy numbers about 285 battle force ships (a category that includes aircraft carriers, submarines, surface combat ships, amphibious warfare ships, and various support vessels). Recently, the Navy indicated that it needs a fleet of 313 ships to perform all of its 

missions. Building and sustaining such a force, however, would require greater budgetary 

resources over the next three decades than the Navy has received in recent years. The Congressional Budget Office (CBO) estimates that the Navy would have to spend an average of about 

$21 billion per year (in 2007 dollars) on ship procurement to carry out its 313-ship plan—

more than 70 percent greater than its average spending between 2000 and 2005. At the same 

time, the Navy has plans to modernize its aircraft that, if fully implemented, would require 

more resources than the service currently spends on new planes and helicopters.

Given the many pressures that the federal budget will face in coming decades, the Navy might 

not receive a sizable increase in funding. In that case, what alternative force structures could 

be accommodated within existing spending levels? This CBO study—prepared at the request 

of the Subcommittee on Seapower of the Senate Committee on Armed Services—examines 

that question. It looks at the Navy’s modernization plans for ships and aircraft and their budgetary implications. It also analyzes five alternative approaches to modernization that would 

cost roughly the same average annual amount as the Navy has spent since 2000. In keeping 

with CBO’s mandate to provide impartial analysis, this study makes no recommendations.

Eric J. Labs of CBO’s National Security Division wrote the study under the general supervision of J. Michael Gilmore. Raymond Hall, Matthew Goldberg, David Newman, David 

Arthur, Bruce Arnold, Douglas Hamilton, Jo Ann Vines, and Arlene Holen of CBO provided 

information or comments on an earlier draft. In addition, officials and analysts from the Navy 

and Marine Corps, Northrop Grumman, and General Dynamics provided information for 

the analysis. Ronald O’Rourke of the Congressional Research Service and Robert O. Work of 

the Center for Strategic and Budgetary Assessments reviewed the manuscript and offered 

insights. (The assistance of such external participants implies no responsibility for the final 

product, which rests solely with CBO.)

Christian Howlett edited the study; Christine Bogusz and Loretta Lettner proofread it. 

Cynthia Cleveland formatted the tables, and Maureen Costantino designed the cover and 

prepared the study for publication. This and other CBO reports are available at the agency’s 

Web site: www.cbo.gov.

Donald B. Marron

Acting Director

May 2006

Contents

Summary xi

1 Introduction 1

Composition and Organization of the Navy’s Fleet 1

Missions of the Navy 3

Future Naval Threats 4

The Evolution of the Navy’s Goals for Battle Force Ships 5

Operating Changes for Battle Force Ships 9

2 The Navy’s Current Plan for Modernizing the Fleet 13

Major Weapons Programs 13

Budgetary Implications of the Navy’s Plan 25

3 Lower-Cost Alternatives to the Navy’s Modernization Plan 33

Option 1: Reduce Ship Programs Across the Board 36

Option 2: Emphasize the Navy’s New Surface Combatants 40

Option 3: Maintain 55 Attack Submarines over the Long Term 44

Option 4: Maintain 11 Aircraft Carriers over the Long Term 49

Option 5: Deploy and Maintain a Robust Sea-Basing Capability 52

The Effect of Different Budget Assumptions on the Options 58
VI OPTIONS FOR THE NAVY’S FUTURE FLEET

4 Comparing the Options by Various Measures of Capability 59

Total Number of Battle Force Ships 60

Total Number of Strike Groups 60

Total Full-Load Displacement 62

Average Ship Age 63

Total Crew Size and Direct Operation and Support Costs 65

Number of Major Combatants Providing Forward Presence 65

Number of Helicopter Hangars 65

Number of Vertical Launch System Cells 67

Covert-Mission Days Provided by Submarines 69

Targets Attacked per Day by Carrier-Based Aviation 69

Naval Surface Fire Support 70

Total Amount of Lift on Amphibious and Maritime 

Prepositioning Ships 72

Implications of the Analysis 78

A Effect of the Options on the Amount of Shipbuilding Work 79
CONTENTS VII

Tables

S-1. The Alternative Force Structures Examined in CBO’s Analysis xx

S-2. Capabilities of the Navy’s Battle Force Ships in 2020 and 2035 

Under Alternative Force Structures xxvi

1-1. Distribution of the Navy’s Battle Force Ships, 1990 and 2006 2

2-1. New Classes of Ships Scheduled to Enter the Fleet Through 2035 16

2-2. The Navy’s and CBO’s Estimates of the Costs of Major New Ships 19

3-1. The Alternative Force Structures Examined in CBO’s Analysis 34

3-2. Composition of the Battle Force Fleets in 2020 and 2035 Under 

Alternative Force Structures 39

3-3. Average Annual Spending for Ships and Aircraft Under Alternative 

Force Structures 40

4-1. Capabilities of the Navy’s Battle Force Ships in 2020 and 2035 

Under Alternative Force Structures 76

A-1. How Budget Authority for Ship Construction Is Allocated, by Ship 81

Figures

S-1. Composition of the Current and 313-Ship Battle Force Fleets xii

S-2. Inventory of Battle Force Ships Under the Navy’s 2006 Shipbuilding Plan xvi

S-3. Inventory of Submarines, Cruisers, and Destroyers Under the Navy’s 2006 

Shipbuilding Plan xvii

S-4. Ship and Aircraft Costs Under the Navy’s 2006 Shipbuilding Plan xix

S-5. Inventory of Battle Force Ships Under Alternative Force Structures xxi

1-1. Number of Ships the Navy Needs, According to Various Defense

Department Analyses 6

2-1. Purchases, Costs, and Inventory of Battle Force Ships Under the Navy’s 2006 

Shipbuilding Plan 14

2-2. Inventory of Submarines, Cruisers, and Destroyers Under the Navy’s 2006

Shipbuilding Plan 28

2-3. Ship and Aircraft Costs Under the Navy’s 2006 Shipbuilding Plan 31

3-1. Purchases, Costs, and Inventory of Battle Force Ships Under Option 1 37
VIII OPTIONS FOR THE NAVY’S FUTURE FLEET

3-2. Ship and Aircraft Costs Under Option 1 41

3-3. Purchases, Costs, and Inventory of Battle Force Ships Under Option 2 43

3-4. Ship and Aircraft Costs Under Option 2 44

3-5. Number of Attack Submarines the Navy Needs, According to Various 

Defense Department Analyses 45

3-6. Purchases, Costs, and Inventory of Battle Force Ships Under Option 3 47

3-7. Ship and Aircraft Costs Under Option 3 48

3-8. Purchases, Costs, and Inventory of Battle Force Ships Under Option 4 51

3-9. Ship and Aircraft Costs Under Option 4 52

3-10. Purchases, Costs, and Inventory of Battle Force Ships Under Option 5 54

3-11. Ship and Aircraft Costs Under Option 5 55

4-1. Number of Battle Force Ships Under Alternative Force Structures 60

4-2. Number of Strike Groups Under Alternative Force Structures 61

4-3. Total Full-Load Displacement of Battle Force Ships Under Alternative

Force Structures 62

4-4. Average Age of Battle Force Ships Under Alternative Force Structures 63

4-5. Total Crew Size and Direct Operating Costs of Battle Force Ships Under 

Alternative Force Structures 64

4-6. Number of Major Combatants Providing Forward Presence Under Alternative 

Force Structures 66

4-7. Number of Helicopter Hangars on Surface Combatants Under Alternative

Force Structures 67

4-8. Number of VLS Cells on Surface Combatants and Attack Submarines 

Under Alternative Force Structures 68

4-9. Total Covert-Mission Days Provided by the Attack Submarine Force Under 

Alternative Force Structures 70

4-10. Number of Targets Attacked per Day by Carrier Aircraft Under Alternative 

Force Structures 71

4-11. Amount of Gunfire Support That Could Be Surged to a Theater of Operations 

in Wartime Under Alternative Force Structures 73

4-12. Amount of Magazine Capacity That Could Be Surged to a Theater of Operations 

in Wartime Under Alternative Force Structures 74

Figures (Continued)
CONTENTS IX

4-13. Total Lift Provided by Amphibious and Maritime Prepositioning Forces in 

2020 and 2035 Under Alternative Force Structures 75

A-1. Average Annual Amount of Lightship and Condition A Displacement Allocated 

to Major Shipyards Under Alternative Force Structures, 2005 to 2035 80

A-2. Average Annual Amount of Lightship Displacement and Budget Authority, 

by Major Category, 2000 to 2005 82

A-3. Lightship Displacement Allocation Index, by Major Ship Category, Under 

Alternative Force Structures 83

A-4. Budget Authority Allocation Index, by Major Ship Category, Under 

Alternative Force Structures 84

Boxes

S-1. The Roles of Major Types of Ships in the Navy’s Fleet xiii

S-2. Classifications of Major Ships, Aircraft, and Weapons xiv

2-1. Developing Cost Estimates for Navy Ships and Aircraft 27

2-2. The Treatment of Inflation in Estimating Future Shipbuilding Costs 29

3-1. Creating an LPD-17 Fire-Support Ship 56

Figures (Continued)

Summary

Since 2000, the Navy has spent an average of 

about $43 billion a year to buy and operate its fleet of 

285 battle force ships and 4,000 aircraft.1 In the new 

30-year shipbuilding plan that the Navy released in February, senior officials argue that the service needs 313 

ships to perform all of the tasks assigned to it. Increasing 

and modernizing ships and aircraft as implied by that 

plan would cost an average of about $53 billion annually 

over the next three decades, the Congressional Budget 

Office (CBO) estimates. (Those past and projected cost 

figures, like the others in this analysis, are in 2007

dollars.)

The Navy’s need for additional resources to fund its modernization plan is likely to coincide with myriad other 

pressures on the federal budget—from elsewhere in the 

military, from Social Security and Medicare, and from the 

need to pay interest on federal debt, to name a few. If the 

Navy ends up not receiving any increases in funding 

other than for inflation, how big and how capable can the 

fleet be in future years?

To answer that question, CBO constructed five alternative approaches to modernization that would cost roughly 

the same average amount annually as the Navy has spent 

in the past six years. The first option would make acrossthe-board cuts to the fleet to fit within recent spending 

levels. The other four options would emphasize one of 

the following: surface combatants, submarines, aircraft 

carriers, or amphibious warfare and maritime prepositioning ships.2

 Those options illustrate the trade-offs that 

the Navy might have to make if officials chose to focus 

their modernization efforts on one aspect of naval warfare 

at the expense of others.

The main conclusion of CBO’s analysis is that unless 

shipbuilding budgets increase significantly in real 

(inflation-adjusted) terms or the Navy designs and builds 

much cheaper ships, the size of the fleet will fall substantially. In some cases, however, the fleet’s capability would 

not decline commensurately with the decrease in size. In 

fact, by such measures as the number of long-range naval 

guns and helicopters available in peacetime or wartime 

and the number of targets that could be attacked each day 

by carrier-based aircraft, the Navy would be more capable 

in 2035 under one or more of the options than it is now. 

The Navy’s more-expensive shipbuilding plan would provide greater capability than most of those options by 

most measures of capability. But even under the Navy’s 

plan, the number of covert-mission days provided by submarines, the number of vertical launch system (VLS) cells 

for firing missiles, and the fleet’s capacity to transport or 

store equipment for Marine Corps units would be lower 

in 30 years than they are today.

Composition and Organization of the 

Navy’s Fleet

At the beginning of 2006, the battle force fleet numbered 

285 combat and support ships (see Summary Figure 1). 

Those vessels comprise 12 aircraft carriers, 14 ballistic 

missile submarines, 53 nuclear-powered attack submarines, four guided missile submarines (which are con1. The Navy defines battle force ships as aircraft carriers, submarines, 

surface combatants (cruisers, destroyers, frigates, and littoral combat ships), amphibious warfare ships, combat logistics ships, and 

certain support vessels. For more information about specific components of the battle force fleet, see Congressional Budget Office, 

The Future of the Navy’s Amphibious and Maritime Prepositioning 

Forces (November 2004), Transforming the Navy’s Surface Combatant Force (March 2003), and Increasing the Mission Capability of 

the Attack Submarine Force (March 2002).

2. Maritime prepositioning ships are used to store equipment for 

Marine Corps units in areas near where those units might be 

called on to operate overseas. 
XII OPTIONS FOR THE NAVY’S FUTURE FLEET

Summary Figure 1.

Composition of the Current and 313-Ship Battle Force Fleets

Source: Congressional Budget Office.

Note: MPF(F) = Maritime Prepositioning Force (Future).

verted ballistic missile submarines), 102 surface combatants, 35 amphibious warfare ships, and 65 logistics, support, and mine-warfare ships. (For a brief description of 

the roles that those different types of ships play, see Summary Box 1.)

To provide combat capability around the globe, the Navy 

currently organizes its ships into 36 strike groups. Twelve 

are carrier strike groups, which consist of an aircraft carrier accompanied by three surface combatants, an attack 

submarine, and a combat logistics ship. Another 11 

groups are expeditionary strike groups, which are composed of three amphibious warfare ships, three surface 

combatants, and one attack submarine. Nine others are 

surface action groups, made up entirely of surface combatants (three apiece). The four remaining strike forces 

each consist of a single guided missile submarine (or 

SSGN).3

That organizational structure, which was introduced in 

2002 and 2003, represents a substantial change from the 

end of the Cold War. At that time, aircraft carriers were 

divided into carrier battle groups with six surface combatants apiece, and amphibious ships were organized into 12 

amphibious ready groups, which often operated without 

the support of surface combatants.

The Department of the Navy’s inventory also includes 

about 4,000 planes and helicopters, 900 of which belong 

to the Marine Corps. The overwhelming majority of 

those aircraft form part of the Navy’s 10 active and one 

reserve carrier air wings, the Marines’ three active and one 

reserve air wings, and the Navy’s four land-based patrol 

and reconnaissance wings. Each carrier air wing currently 

consists of 44 strike fighters, four electronic attack 

aircraft, four airborne early-warning planes, and 12 

helicopters.

The Navy’s 2006 Shipbuilding Plan for 

Modernizing the Fleet

In the summer of 2005, the new Chief of Naval Operations, Admiral Michael Mullen, ordered a reexamination 

of the ship requirements outlined in the Navy’s previous 

shipbuilding plan, which had been sent to the Congress 

in March 2005. That plan envisioned a fleet of between 

260 and 325 battle force ships. Admiral Mullen said he 

Aircraft

Carriers

Ballistic

Missile

Submarines

Attack

Submarines

Guided

Missile

Submarines Large Surface

Frigates Combatants

Amphibious

Ships

Support

Ships

53

14

4

72 30

35

65

Current 285-Ship Fleet Navy's 313-Ship Requirement

Aircraft

Carriers

Ballistic

Missile

Submarines

Attack

Submarines

Guided

Missile

Submarines

Large Surface

Combatants Littoral

Combat Ships

Amphibious

Ships

MPF(F)

Ships

Support

Ships

11 14

48

4

88 55

31

12 50

12

3. For a list of common abbreviations and letter designations for 

Navy ships, aircraft, and weapons, see Summary Box 2.
SUMMARY XIII

Source: Congressional Budget Office.

Note: Ship silhouettes are not to scale.

Summary Box 1.

The Roles of Major Types of Ships in the Navy’s Fleet

Nimitz Class

Aircraft Carrier

The Navy’s 12 aircraft carriers are the heart of the battle force fleet. Each carries an air 

wing of about 60 aircraft, which can attack hundreds of targets per day for up to a month 

before needing to be rested. Carriers are by far the largest ships in the fleet, with a weight 

(displacement) of about 100,000 tons. Nine of the 12 current carriers belong to the Nimitz 

class.

Ohio Class Ballistic

Missile Submarine

Strategic ballistic missile submarines carry the major portion of the U.S. nuclear deterrent, up to 24 Trident missiles with four to eight nuclear warheads apiece. The Navy has 14 

Ohio class ballistic missile submarines in the strategic role and is converting four more to a 

conventional guided missile (SSGN) configuration. Those SSGNs will be able to carry up 

to 154 Tomahawk missiles as well as special-operations forces.

Los Angeles Class

Attack Submarine

Attack submarines are the Navy’s premier undersea warfare and antisubmarine weapon. 

Since the end of the Cold War, however, they have mainly performed covert intelligencegathering missions. They have also been used to launch Tomahawk cruise missiles at inland 

targets in the early stages of conflicts. The Navy has 53 attack submarines, of which 49 

belong to the Los Angeles class. At 7,000 tons, they are less than half the size of ballistic 

missile submarines. 

Arleigh Burke Class 

Destroyer

Surface combatants—which include cruisers, destroyers, and frigates—are the workhorses 

of the fleet. They defend the Navy’s aircraft carriers and amphibious ships against other surface ships, aircraft, and submarines. They also perform many day-to-day missions, such as 

patrolling sea lanes, providing overseas presence, and conducting exercises with allies. In 

addition, they are capable of striking land targets with Tomahawk missiles. Different types 

of surface combatants have displacements ranging from 4,000 to 10,000 tons.

Wasp Class Amphibious

Assault Ship

The Navy’s two classes of amphibious assault ships (also known as helicopter carriers) are 

the second largest ships in the fleet at 40,000 tons. They form the centerpiece of expeditionary strike groups and can each carry about half the troops and equipment of a Marine 

expeditionary unit. They also carry as many as 30 helicopters and six fixed-wing Harrier 

jump jets, or up to 20 Harriers.

Austin Class Amphibious 

Transport Dock 

The Navy has four other classes of amphibious warfare ships, divided into two types: 

amphibious transport docks and dock landing ships. Two of those ships together provide the remaining transport capacity for a Marine expeditionary unit in an expeditionary 

strike group.

Supply Class Fast Combat 

Support Ship

The many logistics and support ships in the Navy’s fleet provide the means to resupply, 

repair, salvage, or tow combat ships. The most prominent of those vessels are fast combat 

support ships, which operate with carrier strike groups to resupply them with fuel, dry 

cargo (such as food), and ammunition.

Avenger Class Mine

Countermeasures Ship

The Navy has two types of mine-clearing ships: Avenger class mine countermeasures ships 

and Osprey class coastal mine hunters. They are very small vessels (around 1,000 tons) 

built to clear mines from U.S. or overseas waters.
XIV OPTIONS FOR THE NAVY’S FUTURE FLEET

Source: Congressional Budget Office.

Summary Box 2.

Classifications of Major Ships, Aircraft, and Weapons

AGOS ocean-surveillance ship

AGS Advanced Gun System

AKE dry cargo/ammunition ship 

AO fleet oiler

AOE fast combat support ship

ARS rescue and salvage ship

CG guided missile cruiser

CG(X) future guided missile cruiser

CLF Combat Logistics Force

CV aircraft carrier

CVN nuclear-powered aircraft carrier

DD destroyer

DDG guided missile destroyer

DDG(X) future guided missile destroyer

ERM Extended Range Munition

FFG guided missile frigate

JSF Joint Strike Fighter

LCS littoral combat ship

LHA amphibious assault ship (helicopter 

carrier)

LHD amphibious assault ship (helicopter 

carrier)

LPD amphibious transport dock

LSD dock landing ship

LSD(X) future dock landing ship

MCM mine countermeasures ship

MHC mine hunter, coastal

MMA Multimission Maritime Aircraft

MPF(F) Maritime Prepositioning Force 

(Future)

MPS maritime prepositioning squadron

SSBN ballistic missile submarine

SSBN(X) future ballistic missile submarine

SSGN guided missile submarine

SSN attack submarine

STOVL short takeoff and vertical landing

T-____ ship operated by the Military Sealift 

Command

UCAV unmanned combat air vehicle

VLS vertical launch system
SUMMARY XV

ordered the review for two reasons: to arrive at a single 

numerical requirement for the fleet, and to provide stability in the year-to-year construction of naval vessels so that 

both the Navy and the shipbuilding industry could plan 

more efficiently. 

In February 2006, the Navy formally submitted its new 

30-year plan to the Congress, which includes a requirement for 313 battle force ships.4

 That requirement would 

be permanent, although the actual number of ships 

would rise and fall depending on when vessels were retired from the fleet and on what budgetary resources were 

available for buying new ships.5 The 2006 shipbuilding 

plan calls for the following fleet by 2020:

B 11 aircraft carriers (including a new CVN-21 class of 

nuclear-powered carriers);

B 14 strategic ballistic missile submarines;

B 48 attack submarines;

B 4 guided missile submarines;

B 62 Arleigh Burke class guided missile destroyers;

B 7 future DD(X) destroyers (since named DDG-1000 

Zumwalt class destroyers);

B 19 future CG(X) cruisers;

B 55 new Freedom class littoral combat ships (LCSs);

B 31 amphibious ships;

B 1 future maritime prepositioning, or MPF(F), squadron with 12 ships capable of supporting the Navy’s 

and Marine Corps’s new sea-basing concept (described 

below); and

B 50 support ships. 

That fleet would be organized around 11 carrier strike 

groups (one less than exists now), nine expeditionary 

strike groups (two less than in the current fleet), nine surface action groups, and four SSGN strike forces.

In addition to that broad outline, more details about the 

Navy’s procurement plans over the next five years come 

from the 2006 defense appropriation and authorization 

laws and from the Future Years Defense Program that was 

prepared as part of the President’s 2007 budget request. 

According to those sources, the Navy proposes to buy 51 

ships between 2007 and 2011—one aircraft carrier, five 

submarines, six large surface combatants, 23 small surface 

combatants, 11 amphibious and maritime prepositioning 

ships, and five support ships. During the same period, it 

would retire one aircraft carrier, one small surface combatant, eight amphibious ships, 13 support ships, and 

two minesweeping ships. The Navy also proposes to purchase about 1,200 aircraft during the 2007-2011 period.

Under the 2006 shipbuilding plan, the Navy would buy 

another 218 ships between 2012 and 2035. Those vessels 

comprise six aircraft carriers, 44 attack submarines, 14 

strategic ballistic missile submarines, 45 large surface 

combatants, 49 small surface combatants, 21 amphibious 

and maritime prepositioning ships, and 39 support ships.

With respect to aircraft, CBO assumes that the Navy 

would procure about 2,600 planes and helicopters between 2012 and 2035.6 The Navy’s plan calls for continuing to have 10 active, deployable carrier air wings. 

The reserve wing does not deploy with a carrier, but its 

pilots and planes would train so that they could augment 

the deployable air wings as necessary. 

Budgetary Implications of the

Navy’s Plan

Buying and operating all of the ships listed in the 2006 

shipbuilding plan and all of the aircraft implied by that 

plan would cost an average of about $53 billion a year

for the next three decades, CBO estimates. That amount 

4. Department of the Navy, Report to Congress on Annual Long-Range is 23 percent higher than the Navy’s average annual 

Plan for Construction of Naval Vessels for FY 2007 (February 2006). 

For a detailed discussion of that plan, see Geoff Fein, “Navy Sustains Carrier Requirement Under $13.4 Billion Plan,” Defense 

Daily (December 14, 2005).

5. Christopher P. Cavas, “U.S. Ship Plan to Cost 20 Percent More: 

Price Control Will Be Key to Funding 313-Vessel Fleet,” Defense 

News (December 5, 2005).

6. Estimated procurement of aircraft between 2012 and 2024 is 

based on Congressional Budget Office, The Long-Term Implications of Current Defense Plans and Alternatives: Summary Update for 

Fiscal Year 2006 (October 2005). Beyond 2024, CBO assumed 

that as old aircraft reached the end of their service life, they would 

be replaced with new models on a one-for-one basis.
XVI OPTIONS FOR THE NAVY’S FUTURE FLEET

Summary Figure 2.

Inventory of Battle Force Ships Under the Navy’s 2006 Shipbuilding Plan

Source: Congressional Budget Office.

Note: SSBNs = ballistic missile submarines; SSNs = attack submarines; SSGNs = guided missile submarines; LCSs = littoral combat ships; 

MPF(F) = Maritime Prepositioning Force (Future).

spending on ships and aircraft between 2000 and 2005. 

Even such an increase, however, would be insufficient to 

keep the battle force fleet at the Navy’s goal of 313 ships 

indefinitely.

Ship Procurement

To execute its ship construction plan, the Navy would 

buy a total of 275 ships over the 2006-2035 period—an 

average of 9.2 per year. The Navy estimates that procuring those new ships would cost about $14.4 billion a year, 

whereas CBO estimates that they would cost an average 

of about $19.5 billion annually.7

 With other ship construction costs that the Navy would face over that period 

included, the average annual shipbuilding budget would 

need to rise to $21.6 billion, CBO estimates. (Those 

additional costs include refueling nuclear-powered aircraft carriers and submarines, buying mission modules 

for littoral combat ships, and modernizing current large 

cruisers and destroyers.)8

The size of the battle force fleet would initially rise under 

the Navy’s plan as the 55 new littoral combat ships 

entered the inventory over the next 20 years. The fleet 

would peak at 330 ships in 2019 but then gradually decline to 294 by 2035—19 less than the 313-ship requirement (see Summary Figure 2). In fact, if the construction 

rates for various types of ships envisioned in the Navy’s 

plan continued indefinitely, the fleet would not be close 

to 313 ships at any point after 2025.

2005 2010 2015 2020 2025 2030 2035

0

50

100

150

200

250

300

350

400

SSBNs SSNs and SSGNs

LCSs

Amphibious Ships

Support Ships

MPF(F) Ships

313-Ship Requirement

Aircraft Carriers

Large Surface

Combatants

Frigates

7. CBO’s figure is larger for two reasons. First, CBO’s cost estimates 

for new classes of ships, which are based on the prices of past ships 

and on relationships between a ship’s weight and its cost, are generally higher than the Navy’s estimates or cost targets. Second, 

CBO assumes that annual price increases for the labor and materials used in shipbuilding will continue to outstrip inflation for 

other defense procurement programs (as they have for the past 15 

years) until the early 2020s. 

8. The new littoral combat ship that is being designed to operate in 

coastal waters is expected to have a modular payload system. 

Under that system, different pieces of equipment for performing a 

particular mission would be grouped together as a “module” or 

“mission package” and sent out with the ship when it deployed. 

The Navy is planning to buy those modules under its “other procurement, Navy” account rather than under one of its shipbuilding accounts. If that equipment was a permanent part of the ship, 

as on a large destroyer or cruiser, it would be purchased under the 

shipbuilding account.
SUMMARY XVII

Summary Figure 3.

Inventory of Submarines, Cruisers, and Destroyers Under the Navy’s 2006 

Shipbuilding Plan

Source: Congressional Budget Office.

Two categories of ships—submarines and large surface 

combatants—are responsible for most of the shortfall 

under that plan. The Navy intends to increase its construction of attack submarines to two per year in 2012 

and maintain that rate through 2028, at which point it 

would shift to building two submarines every even year 

and one every odd year. At that rate of construction, the 

force of attack and guided missile submarines would fall 

below the 52-ship goal starting in 2020 (see Summary 

Figure 3). The four guided missile submarines in the 

current fleet, which are part of the 313-ship requirement, 

would not be replaced under the Navy’s plan when they 

reached the end of their service life in the late 2020s. 

Similarly, the ship construction schedule for large surface 

combatants in the Navy’s plan would not keep the cruiser 

and destroyer force at the desired size of 88. After purchasing seven DDG-1000 Zumwalt destroyers and 19 

CG(X) cruisers, that schedule envisions starting to replace today’s Arleigh Burke class destroyers in 2023 at a 

rate of two per year. As a result, the cruiser and destroyer 

force would begin to fall below the 88-ship requirement 

in 2028, declining to 73 by 2035. If the construction rate 

of two large surface combatants per year was maintained 

indefinitely, the cruiser and destroyer force would continue to shrink until 2045 (to 61 ships) before starting to 

grow again.

2005 2010 2015 2020 2025 2030 2035

0

10

20

30

40

50

60

70

80

Requirement in the Navy's Plan

Seawolf

(SSN-21)

Improved Los Angeles (SSN-688I)

Los Angeles (SSN-688)

Ohio (SSGN-726)

Improved Virginia

Virginia (SSN-774)

Attack Submarines (SSNs) and Guided Missile Submarines (SSGNs)

2005 2010 2015 2020 2025 2030 2035

0

10

20

30

40

50

60

70

80

90

100 Cruisers (CGs) and Destroyers (DDGs)

Arleigh Burke Flight I/II (DDG-51)

Arleigh Burke Flight IIA (DDG-79) DDG(X)

Requirement in the Navy's Plan

Ticonderoga (CG-47) CG(X)

Zumwalt

(DDG-1000)
XVIII OPTIONS FOR THE NAVY’S FUTURE FLEET

Procurement and Operating Costs for

Ships and Aircraft

Besides ship procurement costs, which are the focus of 

this study, CBO estimated the amount of funding that 

the Navy would need to carry out its aircraft programs 

and to operate its planned fleets of ships and aircraft. The 

alternative modernization plans that CBO constructed 

for this analysis assume that if the Navy can save money 

in any of those areas, it will use the savings to pay for ship 

construction.

Direct operation and support (O&S) costs for battle force 

ships currently total about $14 billion per year.9 Under 

the 2006 shipbuilding plan, annual direct O&S costs 

would decline to $13.1 billion by 2035. That reduction 

would occur because, over time, ships that were less expensive to operate would replace ships with higher operating costs. For example, the littoral combat ship, which 

would be introduced in large numbers under the Navy’s 

plan, is likely to be cheaper to operate than other, larger 

classes of ships whose numbers would be cut under the 

plan, such as amphibious ships or submarines. In addition, new classes of ship such as the Zumwalt class destroyer, CG(X) cruiser, and CVN-21 aircraft carrier are 

intended to have smaller crew sizes, and thus lower operating costs, than their predecessors. Over the entire 2006-

2035 period, direct O&S costs for the battle force fleet 

would average $14.3 billion per year. 

Procuring the aircraft under the Navy’s 2006 plan would 

cost about $7.5 billion annually, on average, over the next 

30 years.10 In addition, operating and maintaining naval 

aircraft would cost an average of about $9.2 billion a year, 

CBO estimates.

In sum, under the Navy’s plan, total procurement and direct O&S costs for ships and aircraft would average about 

$53 billion per year between 2006 and 2035, CBO estimates. By comparison, the Navy spent an average of 

about $43 billion annually on such procurement, operations, and support over the past six years (see Summary 

Figure 4).

Options for Structuring the Future 

Fleet Within Recent Funding Levels

If the Navy does not receive or cannot devote more budgetary resources to ship construction in the future, to 

what extent can it modernize its fleet? To address that 

question, CBO looked at five different ways in which the 

Navy could keep its total ship and aircraft procurement 

and O&S costs at an average of about $43 billion annually over the next 30 years (see Summary Table 1). The 

first option would continue to cut the various components of the battle force fleet by roughly equal percentages—as the Navy has done since the end of the Cold 

War. The other four alternatives would emphasize a specific area of naval warfare at the expense of others. Option 2 would focus on introducing the new, more capable 

classes of surface combatants that the Navy wants. Options 3 and 4 would make a priority of meeting the 

Navy’s stated requirements for submarines or aircraft carriers over the long term. Option 5 would focus on introducing ships that would help the Navy support and supply onshore Marine operations entirely from the sea 

rather than from the land (a concept known as sea basing). CBO chose those alternatives to illustrate the potential consequences for different parts of the fleet if large 

and sustained increases in funding for ship construction 

do not occur.

CBO found no option that could do more with less. Saving money on the battle force fleet relative to the Navy’s 

plan requires buying fewer ships and thus having less 

capability than under that plan (although a few types of 

capability would still be greater than exists today). Unless 

the Navy can provide the level of resources necessary to 

implement the 2006 shipbuilding plan, it will have to 

make different choices about how to structure its forces 

in the future.

Option 1: Reduce Ship Programs Across the Board

The first alternative would trim all of the major components of the fleet by about 30 percent to 40 percent from 

the numbers in the 313-ship requirement. It would not 

cancel any new class of ship and would buy all of the new 

weapons and technologies that Navy leaders have said are 

essential to the future force. To the extent that the Navy 

views the 313-ship fleet as “transformational,” this option 

would follow the same path of transformation but on a 

smaller scale. 

The recent history of reductions in naval forces is consistent with cuts spread in roughly equal proportion across 

9. Direct operation and support costs are those directly related to the 

number of ships or aircraft in the fleet, such as costs for fuel, supplies, and compensation of personnel. CBO estimated those costs 

using information from the Navy’s Visibility and Management of 

Operating and Support Costs (or VAMOSC) database.

10. That procurement figure excludes several of the Navy’s cost categories: modifications of aircraft, spares and repair parts, and aircraft support equipment and facilities.
SUMMARY XIX

Summary Figure 4.

Ship and Aircraft Costs Under the Navy’s 2006 Shipbuilding Plan

(Billions of 2007 dollars)

Source: Congressional Budget Office.

Notes: O&S = direct operation and support costs (those directly related to the number of ships or aircraft in the fleet, such as costs for fuel, 

supplies, and compensation of personnel).

Procurement costs for 2006 exclude supplemental funding related to Hurricane Katrina.

the fleet. Since 1990, the size of the battle force fleet has 

dropped by half (from 574 ships to 285). But the composition of the fleet has remained relatively constant, with 

no category of ship varying by more than 3 percentage 

points in its contribution to the total fleet. 

Under this option, the number of aircraft carriers, and 

thus the number of carrier strike groups, would be reduced to seven from the 11 in the Navy’s plan. Current 

Nimitz class carriers would not be retired early; instead, 

the program to build the new CVN-21 carrier would be 

delayed from 2008 to the 2020s.11

The number of expeditionary strike groups would also 

decline to seven (from nine), and the number of amphibious ships in those strike groups would be cut in half. 

However, this option would buy one MPF(F) squadron, 

and CBO assumed that its new ships, which would have 

strong sea-basing capabilities, would probably operate 

with expeditionary strike groups to some degree once 

they were stationed overseas. 

Submarine forces would be reduced by about one-third 

from the Navy’s planned levels. The number of ballistic 

missile submarines would decline from 14 to 10 and the 

number of attack submarines would fall from the planned 

48 to 35. 

With respect to surface combatants, the force of Arleigh 

Burke class destroyers would be cut by nearly 40 percent, 

meaning that they would not need to be replaced until 

2026. Total purchases of Zumwalt class destroyers, 

CG(X) cruisers, and littoral combat ships would be about 

30 percent smaller than in the Navy’s plan. 

Under this alternative, the total number of battle force 

ships would increase from 285 today to 299 in 2020 and 

then decline to 217 by 2035 (see Summary Figure 5).

2005 2010 2015 2020 2025 2030 2035

0

10

20

30

40

50

60

70

80

Total Average for 2000 to 2005

Ship Procurement Average for 2000 to 2005

Ship Procurement

Aircraft Procurement

Ship O&S

Aircraft O&S

11. In such cases, the options include resources to sustain the carrier 

industrial base during the years when Nimitz class carriers were 

being refueled but no new carriers were being built.
XX OPTIONS FOR THE NAVY’S FUTURE FLEET

Summary Table 1.

The Alternative Force Structures Examined in CBO’s Analysis

Source: Congressional Budget Office.

Note: n.a. = not applicable; DDG-51 = Arleigh Burke class destroyer; DDG(X) = future replacement for Arleigh Burke class destroyers; 

DDG-1000 = Zumwalt class destroyer (formerly the DD(X)); CG = guided missile cruiser; CG(X) = future guided missile cruiser; 

FFG = guided missile frigate; LCS = littoral combat ship; LPD-17 = San Antonio class amphibious transport dock; SSN = attack submarine; SSBN = ballistic missile submarine; SSGN = guided missile submarine; MPF(F) = Maritime Prepositioning Force (Future).

a. At the beginning of 2006.

b. $43 billion is the average yearly amount that the Navy spent on procurement and operations and support for ships and aircraft between 

2000 and 2005.

c. The Navy’s shipbuilding plan would require average annual funding of about $53 billion over the next 30 years, CBO estimates.

d. These numbers represent the steady-state battle force fleet—the fleet that could be sustained in the long term (beyond 2035) if the funding level and procurement approaches of the various options were continued indefinitely.

n.a. c

7 7 8 11 7 12 11

38 28 31 38 38 49 62

5 7 0 0 0 07

11 19 0 8 0 23 19

0 0 0 0 0 30 0

40 82 55 40 55 0 55

support ships 0 0 0 0 7 n.a. n.a.

35 30 55 30 30 53 48

10 10 10 10 10 14 14

0 0 4 0 0 44

15 13 13 13 28 35 31

12 (1) 0 0 0 24 (2) 0 12 (1)

38 37 31 31 42 65 50 ____ ____ ____ ____ ____ ____ ____

Total 211 233 207 181 241 285 313

313-Ship

the Navy Could Have One of the Following:

10 air wings

over the 

Option 1 Option 2

A robust

of destroyers,

and littoral 

long term

(sea basing)

Logistics and 

Support Ships

LPD-17 fireAmphibious Ships

MPF(F) Ships 

(Squadrons)

SSNs

SSBNs

SSGNs

LCSs

DDG-51s/DDG(X)s

DDG-1000s

CGs/CG(X)s

FFGs

 Requirement

Memorandum:

Submarines

as currently

Navy's

Aircraft Carriers

capability to

capabilities 

With These Ships over the Long Term:d

long term

cruisers, support onshore

planned but

fewer ships

combat ships

now planned

from the sea

Current

Fleeta

55 attack 11 aircraft

Option 3 Option 4 Option 5

The new types

For an Equal Amount of Annual Funding ($43 billion in 2007 dollarsb), 

submarines

The same

Surface Combatants

operations

over the 

mix of carriers and 
SUMMARY XXI

Summary Figure 5.

Inventory of Battle Force Ships Under Alternative Force Structures

Source: Congressional Budget Office.

Note: SSBNs = ballistic missile submarines; SSNs = attack submarines; SSGNs = guided missile submarines; LCSs = littoral combat ships; 

MPF(F) = Maritime Prepositioning Force (Future).

2005 2010 2015 2020 2025 2030 2035

0

50

100

150

200

250

300

350

2005 2010 2015 2020 2025 2030 2035

0

50

100

150

200

250

300

350

2005 2010 2015 2020 2025 2030 2035

0

50

100

150

200

250

300

350

2005 2010 2015 2020 2025 2030 2035

0

50

100

150

200

250

300

350

2005 2010 2015 2020 2025 2030 2035

0

50

100

150

200

250

300

350

Support Ships

Option 1

(Across-the-board cuts)

SSBNs SSNs and SSGNs

LCSs

Amphibious Ships

Navy's Plan

Aircraft Carriers

Large Surface

Combatants

Frigates

Support Ships

SSBNs

SSNs and SSGNs

LCSs

Amphibious Ships

Aircraft Carriers

Large Surface

Combatants

Frigates

Navy's Plan

Option 2

(Surface combatants)

Support Ships

SSBNs SSNs and SSGNs

LCSs

Amphibious Ships

Aircraft Carriers

Large Surface

Combatants

Frigates

Navy's Plan

Option 3

(Submarines)

Support Ships

SSBNs SSNs and SSGNs

LCSs

Aircraft Carriers

Large Surface

Combatants

Frigates

Option 4

(Aircraft carriers)

Support Ships

SSBNs

SSNs and SSGNs

LCSs

Amphibious Ships

Aircraft Carriers

Large Surface

Combatants

Frigates

Navy's Plan Navy's Plan

Option 5

(Sea basing)

Amphibious Ships

MPF(F) Ships

MPF(F) Ships
XXII OPTIONS FOR THE NAVY’S FUTURE FLEET

Option 2: Emphasize the Navy’s New Surface

Combatants

The second approach to modernizing the Navy within 

recent funding levels would be to buy all three of the service’s new types of surface combatants but fewer of its 

other planned ships. This option would purchase the 

same number of Zumwalt class destroyers and CG(X) 

cruisers as in the Navy’s 2006 plan—seven and 19, respectively—as well as 82 littoral combat ships rather than 

the planned 55. CBO chose the larger LCS number to 

highlight the belief of some Navy officials (such as the 

former Chief of Naval Operations, Admiral Vern Clark) 

that large numbers of those small, fast warships will be 

necessary to counter the naval threats that are likely to 

emerge over the next few decades. 

To pay for the new surface combatants, this option would 

reduce the number of aircraft carriers, attack submarines, 

and amphibious ships substantially. As was the case in 

Option 1, the carrier force would be cut to seven by curtailing and postponing procurement of the new CVN-21 

class. Only two of the new carriers would be bought between 2006 and 2035, the first not until 2026. The attack submarine force would decline by nearly 40 percent 

to 30 submarines. The amphibious force would be 

reduced by more than half, and the number of expeditionary strike groups would decrease by one-third (to six) 

compared with the Navy’s plan.

Unlike the previous option, this alternative would not 

purchase any sea-basing ships. Instead, it would maintain 

two of the existing maritime prepositioning squadrons 

that, together, store enough equipment for two Marine 

brigades.

The number of Arleigh Burke destroyers and their replacements would drop from the planned 62 to just 28. 

However, that size force would be sufficient to provide 

three escorts for each carrier strike group and expeditionary strike group, assuming that the destroyers were operated using multiple crews that rotated to a ship while it 

was still overseas so the ship could spend more time providing forward presence in its area of operations before it 

had to return to its home port. (Today, by contrast, most 

surface combatants deploy and then return home with 

the same crew, which allows them to spend less time onstation in their operating area.)

The total number of battle force ships would rise to 300 

in 2020 under this option. By 2035, however, the fleet 

would number 246 ships, 14 percent less than the current 

force.

Option 3: Maintain 55 Attack Submarines over the 

Long Term

In the past few years, the future size of the attack submarine force has become a major issue in naval force planning. The Navy currently has 57 attack submarines 

(including four SSGNs, former ballistic missile submarines that were converted to a conventional configuration). However, since 1991, the Navy has been buying 

new attack submarines at an average rate of less than one 

per year, which in the long run would result in a force of 

only about 30 submarines. Many observers believe that 

the Navy will need far more attack submarines than that, 

particularly if China emerges as a strong enough military 

power to rival the United States in coming decades.

Studies by the Department of Defense and the Navy have 

reached widely differing conclusions over the years about 

how many attack submarines the Navy needs. A 1999 

analysis conducted by the Joint Staff for the Chairman of 

the Joint Chiefs of Staff stated that between 68 and 76 

submarines were necessary to perform peacetime missions, whereas 55 were sufficient to meet wartime needs. 

In 2003, the Navy released a plan to build a 375-ship 

fleet, including 55 attack submarines. Two years later, the 

Navy stated that its future fleet would need between 41 

and 45 attack submarines, including four guided missile 

submarines. Most recently, the 313-ship requirement 

includes 48 attack submarines and four SSGNs.

In light of that history, Option 3 would build attack submarines at a rate that would eventually result in a force of 

55—the number that the Joint Staff deemed capable of 

meeting the Navy’s requirements for wartime. The force 

would be smaller than 55 submarines throughout the 

2020s, however, because otherwise the Navy would need 

to purchase three submarines per year in 14 of the next 

30 years. Such a procurement rate would be virtually 

impossible within the resource constraints of this analysis, 

given the other demands on the Navy’s shipbuilding 

budget. 

Even so, to maintain a force of 55 attack submarines 

without a real increase in total average funding, the Navy 

would have to delay or cancel most other major planned 

ship programs. The carrier force would be reduced to 

eight, with three CVN-21s purchased over the next 30 

years. The Zumwalt and CG(X) programs would be can-
SUMMARY XXIII

celed, and the number of large surface combatants (only 

Arleigh Burke class destroyers and their replacements) 

would be halved to 31. As in the surface combatant alternative (Option 2), the number of amphibious ships 

would be reduced to 13, and the sea-basing-capable 

MPF(F) program would be eliminated. 

The savings from those reductions would be used to purchase the Navy’s new Virginia class of nuclear-powered 

attack submarines and replacements for the current Ohio 

class SSGNs. Because those four SSGNs are conversions 

of existing ballistic missile submarines, they will reach the 

end of their service life in the late 2020s. (If the SSGNs 

were considered not worth replacing but the money was 

still devoted to submarines, the Navy could buy approximately six more Virginias, bringing the total number of 

attack submarines to 61.) 

This option would increase the size of the Navy from 285 

battle force ships to 296 by 2020. Fifteen years later, however, the fleet would number 219 ships—almost the same 

as with the across-the-board cuts of Option 1.

Option 4: Maintain 11 Aircraft Carriers over the 

Long Term

The number of aircraft carriers that the Navy needs has 

also been a contentious issue over the past two years. Last 

year, when the Navy proposed reducing the carrier force 

from 12 to 11 as part of the President’s budget request for 

2006, the Congress responded with legislation requiring 

the service to keep 12 operational aircraft carriers in its 

fleet. Nevertheless, the 2006 shipbuilding plan released in 

February set the Navy’s requirement for carriers at 11, 

and the Chief of Naval Operations explicitly endorsed 

that number in public statements.12 Recently, the Senate 

indicated that it would accede to the Navy’s request to 

reduce the fleet to 11 carriers, but the House chose to 

preserve the 12-ship requirement for the time being.

Consistent with the Navy’s requirement, this alternative 

would maintain a carrier force of at least 11 ships—three 

or four more than in the other options in this analysis. As 

a result, the Navy would buy six CVN-21s between 2006 

and 2035, one every five years. 

To pay for keeping 11 aircraft carriers and 10 deployable 

air wings without a real increase in funding, this option 

would reduce or eliminate all other ship construction 

programs. The Zumwalt class destroyer would be canceled, the CG(X) program pared from 19 to eight ships 

(which would be purchased to provide missile defense for 

carrier strike groups), and the LCS program cut from 55 

to 40 ships. The number of large surface combatants 

would decline to 38 ships, meaning that replacements for 

current destroyers would not be needed until 2021. The 

attack submarine force would decrease by nearly 40 percent to 30 submarines, and the amphibious force would 

drop by more than half to just 13 ships. Like Options 2 

and 3, this alternative would not introduce sea-basing 

capability to the maritime prepositioning force.

Overall, this approach would produce the smallest battle 

force fleet of the alternatives in this study: 278 ships by 

2020 and 189 by 2035.

Option 5: Deploy and Maintain a Robust

Sea-Basing Capability

Four years ago, the Navy released a set of guiding principles, called Sea Power 21, for transforming the service. 

One of those principles is sea basing, under which the 

Navy and Marine Corps would reduce as much as possible the need for support from land facilities when conducting a military operation overseas. Today, when large 

numbers of marines operate on shore, they are supported 

mainly from supply depots on land (located either at a 

base provided by a host nation or in an area seized during 

an assault). Sea basing envisions that future operations 

will forgo putting large amounts of supplies, fuel, and 

ammunition on shore and instead keep them at sea, rearming and replenishing Marine forces as needed. Although the Navy’s entire fleet would play a role in the sea 

base, the most important platforms would be amphibious 

warfare and future maritime prepositioning ships.

Many of the operations the Navy performs today could 

be characterized as sea basing on a small scale. But the 

Navy and Marine Corps hope that MPF(F) ships will 

give them the ability to conduct a brigade-sized operation 

ashore without support from land facilities. All logistical 

support for the marines, for at least the first 20 days, 

would be provided by ships at sea. 

Under the 2006 shipbuilding plan, the Navy intends to 

buy one MPF(F) squadron capable of deploying and sup12. Dave Ahern, “Mullen: Four Ships Too Few; Stable Ship Funds 

Needed,” Defense Today (October 13, 2005).
XXIV OPTIONS FOR THE NAVY’S FUTURE FLEET

porting a Marine expeditionary brigade. The Marine 

Corps, however, has said that it needs to have at least two 

MPF(F) squadrons deployed overseas so they can be in a 

position to respond quickly if a crisis arises in the Middle 

East, southern Africa, or East Asia. This option, therefore, would buy two sea-basing-capable MPF(F) squadrons. It would also maintain nine expeditionary strike 

groups to ensure sufficient support from traditional 

amphibious ships in any expeditionary operation.

Like Options 1 and 2, this alternative would reduce the 

carrier force to seven and buy only two CVN-21s between 2006 and 2035. Both the Zumwalt destroyer and 

CG(X) cruiser programs would be canceled to save 

money, and the number of Arleigh Burke class destroyers 

(and their eventual replacements) would be cut to 38 

ships. The attack submarine force would be reduced

to 30. 

Because this option emphasizes operations on and close 

to shore, it would buy 55 littoral combat ships, the same 

number as in the Navy’s plan. It would also design and 

purchase seven of a new type of ship to provide the firesupport capability of the canceled Zumwalt destroyer. 

The new vessel—referred to here as an LPD-17 firesupport ship—would consist of a San Antonio class 

amphibious transport dock fitted with two Advanced 

Gun Systems (with a total magazine of 900 shells) and 16 

VLS cells for launching missiles. In addition, this option 

would preserve the largest number of amphibious ships, 

28, as well as 24 sea-basing ships composing the two 

MPF(F) squadrons. 

Overall, this option would expand the Navy’s battle force 

fleet from 285 ships today to 323 by 2020. Thereafter, 

the fleet would decline to 255 ships by 2035—the largest 

number among the five options that CBO examined.

Comparing the Capability of the 

Options

To illustrate the effects of those different approaches on 

the size and capability of U.S. naval forces, CBO used a 

variety of measures to compare the options with both the 

Navy’s shipbuilding plan and the current fleet (see Summary Table 2 on page xxvi). Some of the measures relate 

to characteristics of the battle force fleet. They include 

the total number, weight (full-load displacement), crew 

size, and O&S costs of battle force ships, as well as their

average age and the total number of strike groups in the 

fleet. Other measures focus on the fleet’s capability in 

peacetime or during a conflict: 

B The amount of overseas presence provided by major 

combatants;

B The number of helicopters available to detect and 

target such threats as quiet diesel-electric submarines, 

mines, and small, fast boats armed with torpedoes or 

cruise missiles (measured by the number of helicopter 

hangars available on surface combatants during routine peacetime deployments or a wartime “surge” of 

ships);

B The number of VLS cells available on surface combatants and attack submarines in peacetime or wartime to 

launch land-attack missiles;

B The number of covert-mission days provided by attack 

submarines and SSGNs;

B The number of targets that can be attacked per day by 

carrier aircraft; and

B The amount of fire support (number of guns and initial magazine capacity) that the guns on battle force 

ships can provide at various ranges.

The final measure that CBO used to compare the options 

is the mobility provided by the fleet: the total transport 

and storage capacity of its amphibious and maritime 

prepositioning ships.

Of the approaches analyzed in this study, the Navy’s 2006 

shipbuilding plan would provide the greatest capability 

by 2020 and 2035 according to most measures—but at 

the greatest cost. The less expensive alternatives that 

CBO examined offer less overall capability than that plan 

and, in many cases, than today’s fleet. However, by a few 

measures—such as the number of helicopter hangars that 

are on-station in peacetime or that can be surged in a crisis and the amount of fire support at ranges of more than 

13 nautical miles—all five options would provide more 

capability than the Navy has now. And by some measures—the number of helicopter hangars, number of 

covert-mission days provided by submarines, and number 

of targets per day for carrier aircraft—at least one of the 

options would offer as much or more capability than the 

Navy’s costlier plan.
SUMMARY XXV

With its across-the-board cuts, Option 1 would result in 

a relatively small fleet of just over 200 ships. However, it 

would produce the most balanced fleet of the alternatives 

that CBO examined while providing some of the new 

capabilities that the Navy seeks. The fleets in the other 

four options would be less balanced but might be better 

matched to various future threats. Those options illustrate the potential consequences of pursuing one type of 

capability at the expense of all others in a constrained fiscal environment.

Of those options, the surface combatant alternative (Option 2) would result in the lightest fleet but the one with 

the most helicopter hangars and VLS cells. The submarine alternative (Option 3) would have the lowest direct 

operating costs, produce the youngest fleet, and provide 

the most covert-mission days (more than now or under 

the Navy’s plan). The aircraft carrier alternative (Option 

4) would result in the smallest fleet but the most carrier 

targets per day (the same as under the Navy’s plan and 

more than today). The sea-basing alternative (Option 5) 

would produce the largest and heaviest fleet, the most 

transport capacity, and the most surface fire support.
XXVI OPTIONS FOR THE NAVY’S FUTURE FLEET

Summary Table 2.

Capabilities of the Navy’s Battle Force Ships in 2020 and 2035 

Under Alternative Force Structures

Continued

299 300 296 278 323 285 326

34 35 32 34 35 36 35

4.8 4.2 4.1 4.2 5.0 4.4 5.2

19.4 19.0 19.2 20.2 18.0 16.4 18.0

100,000 102,000 102,000 103,000 106,000 109,000 114,000

13.7 13.6 13.5 13.4 14.5 14.0 14.9

76 70 67 63 81 46 82

Forward deployed in peacetime 67 79 78 68 78 36 78

Surged in wartime 138 163 149 134 151 99 162

Number of VLS Cells

Forward deployed in peacetime 3,200 3,200 3,000 3,100 3,100 2,100 3,300

Surged in wartime 6,900 7,000 6,600 6,800 6,700 5,600 7,100

2,800 2,800 3,100 2,800 2,800 2,700 2,900

3,900 3,900 3,900 4,000 3,900 3,500 4,000

78/29/6 81/31/10 72/23/0 72/23/0 82/33/10 63/0/0 82/33/10

3.9 3.8 3.8 3.8 4.1 5.1d 4.0

Capabilities in 2020

(Aircraft

Total Lift Capacity (MEBs)

(At 13/63/83 nautical miles)

(Billions of 2007 dollars)

Number of Forward-Deployed

Major Combatants

Number of Helicopter Hangars

Day by Carrier Aircraft in Wartime

Number of Guns Providing Naval

Fire Support in Wartime

Total Covert-Mission Days

Memorandum:

Total Crew Size

(Number of sailors)

Direct Operation and Support

Option 1

(Across-theboard cuts) Fleeta

Option 5

Plan

Current

Number of Targets Attacked per 

Number of Battle Force Ships

Number of Strike Groups

Total Full-Load Displacementb

(Millions of long tons)

Provided by Attack Submarines

Average Ship Age (Years)

Costs for Shipsc

(Sea basing)

Option 4

carriers)

Option 3

(Submarines)

Option 2

(Surface

combatants)

Navy's 2006

Shipbuilding
SUMMARY XXVII

Summary Table 2.

Continued

Source: Congressional Budget Office.

Note: VLS = vertical launch system; MEB = Marine expeditionary brigade.

a. At the beginning of 2006.

b. The weight of a ship when it is fully equipped and loaded with weaponry, crew, and supplies.

c. Direct operation and support costs are those directly related to the number of ships in the fleet (such as costs for fuel, supplies, and compensation of personnel).

d. Includes all three conventional maritime prepositioning squadrons, even if they are deployed to Iraq.

217 246 219 189 255 285 294

19 21 18 17 18 36 24

3.6 3.0 3.0 3.1 3.9 4.4 5.0

18.0 17.6 17.4 18.0 17.9 16.4 16.3

65,000 66,000 68,000 73,000 72,000 109,000 99,000

9.2 9.4 9.0 9.3 10.0 14.0 13.1

57 60 51 43 74 46 74

Forward deployed in peacetime 57 84 66 56 66 36 72

Surged in wartime 127 190 133 123 139 99 172

Number of VLS Cells

Forward deployed in peacetime 1,900 2,000 1,800 1,700 1,700 2,100 2,400

Surged in wartime 4,100 4,600 3,800 3,700 3,500 5,600 5,400

1,900 1,700 3,100 1,700 1,700 2,700 2,400

2,300 2,300 2,900 4,200 2,300 3,500 4,200

33/33/6 35/35/10 29/29/0 29/29/0 43/43/10 63/0/0 41/41/10

3.2 3.0 3.0 3.0 3.3 5.1d 4.0

Option 4

Capabilities in 2035

(At 13/63/83 nautical miles)

Direct Operation and Support

Costs for Shipsc

(Billions of 2007 dollars)

Number of Forward-Deployed

(Millions of long tons)

Average Ship Age (Years)

Total Lift Capacity (MEBs)

Number of Targets Attacked per 

Day by Carrier Aircraft in Wartime

Number of Guns Providing Naval

Fire Support in Wartime

Major Combatants

Number of Helicopter Hangars

Total Covert-Mission Days

Provided by Attack Submarines

Total Crew Size

(Number of sailors)

Number of Battle Force Ships

Number of Strike Groups

Total Full-Load Displacementb

Option 5 Current Shipbuilding

board cuts) combatants) (Submarines) carriers) (Sea basing) Fleeta Plan

(Across-the- (Surface Option 3 (Aircraft

Option 1 Option 2 Navy's 2006

Memorandum:

CHAPTER

1

Introduction

After declining in the 1990s following the Cold 

War, defense spending has risen sharply in recent years. 

As part of that increase, spending on Navy shipbuilding 

averaged nearly $12 billion annually between fiscal years 

2002 and 2005—16 percent higher than in the last four 

defense budgets of the Clinton Administration. (Unless 

otherwise noted, all costs cited in this report are in 2007 

dollars.) For 2006, the Congress appropriated about $10 

billion for ship construction (excluding money to repair 

damage from Hurricane Katrina) and increased the number of ships purchased. For 2007, the Navy has requested 

$11 billion. Given the Navy’s current and planned shipbuilding programs, however, those levels of spending, if 

maintained indefinitely, would not be sufficient to keep 

the fleet at the current size of about 285 battle force ships.

This study by the Congressional Budget Office (CBO) 

examines the prospects for modernizing the fleet at a time 

when both the Navy’s future missions and the amount of 

money it will have to spend on ship construction are uncertain. This chapter reviews the Navy’s current structure, 

its evolving missions, the threats it may face in the future, 

and changes in its numerical requirements for ships since 

the end of the Cold War. Chapter 2 describes the Navy’s 

plan for modernizing its fleet and the budgetary implications of that plan through 2035. Chapters 3 and 4 analyze five lower-cost alternatives to the Navy’s modernization plan and assess the capabilities that each alternative 

would provide.

Composition and Organization of the 

Navy’s Fleet

In the past decade and a half, both the size and structure 

of the Navy’s fleet—what it calls its ship battle forces—

have changed significantly. The total number of ships has 

fallen by half since 1990, although the composition of 

the fleet has remained about the same (see Table 1-1). 

Today’s fleet comprises 285 combat and support ships:1

B 12 aircraft carriers;

B 14 ballistic missile submarines;

B 53 nuclear-powered attack submarines;

B 4 guided missile submarines (which are converted ballistic missile submarines);

B 102 surface combatants (cruisers, destroyers, and frigates);

B 35 amphibious warfare ships; and

B 65 logistics, support, and mine warfare ships. 

(For more information about the roles that those different types of ships play, see Summary Box 1 on page xiii.)

Most of those vessels are operated by the Navy, but 34 of 

the logistics and support ships are operated by the Military Sealift Command (MSC), the organization charged 

with providing sea transportation services for the Department of Defense. The MSC ships are designated as the 

Naval Fleet Auxiliary Force. Although the MSC is headed 

by a Navy vice admiral, most of the personnel on its ships 

are civilian mariners.

The Military Sealift Command also operates 145 ships 

that are not considered part of the Navy’s battle force 

fleet. They include 36 prepositioning ships stationed 

overseas, most of which store equipment for use by brigade-sized units of the Army and Marine Corps; 26 sealift ships, which are used to transport supplies and equipment overseas in the event of a conflict; 24 other specialmission ships; the Navy’s two hospital ships (which are 

1. With the commissioning of new ships and the decommissioning 

of old ones, that number changes frequently. The figure of 285 

was the number in the Navy’s fleet at the beginning of 2006.
2 OPTIONS FOR THE NAVY’S FUTURE FLEET

Table 1-1.

Distribution of the Navy’s Battle Force Ships, 1990 and 2006

Source: Congressional Budget Office based on data from the Navy.

a. Includes four Ohio class ballistic missile submarines that have been converted to a conventional (guided missile) configuration.

also part of the Naval Fleet Auxiliary Force); and the 57 

ships in the Ready Reserve Fleet, which are mostly sealift 

ships kept in reduced operating status until they are 

needed for a war.2 This study focuses only on the Navy’s 

battle force ships and the 16 MSC prepositioning ships 

that station Marine Corps equipment overseas—called 

the Maritime Prepositioning Force.

Most naval vessels deploy in groups rather than on their 

own. The Navy currently organizes its ships around 36 

strike groups: 

B 12 carrier strike groups (each composed of an aircraft 

carrier, three surface combatants, an attack submarine, 

and a combat logistics ship); 

B 11 expeditionary strike groups (each consisting of 

three amphibious warfare ships, three surface combatants, and one attack submarine); 

B 9 surface action groups (each made up of three surface 

combatants); and 

B 4 guided missile submarines (each of which acts as its 

own strike force).

That organization, which was introduced in 2002 and 

2003, represents a substantial change from the Navy’s 

structure at the end of the Cold War. Before the reorganization, the Navy counted only 19 strike groups: 12 carrier 

battle groups (each with six surface combatants rather 

than three) and seven surface action groups. The fleet’s 

amphibious ships were organized into 12 amphibious 

ready groups, which generally operated without the support of surface combatants. By adding guided missile 

submarines—and by distributing surface combatants and 

attack submarines among the amphibious ready groups to 

create expeditionary strike groups—the Navy is able to 

provide strike capability in a greater number of places 

with a smaller fleet. 

In addition to ships, the Department of the Navy has a 

total of about 4,000 planes and helicopters, 900 of which 

belong to the Marine Corps. The overwhelming majority 

of those aircraft support the Navy’s 10 active and one reserve carrier air wings, the Marines’ three active and one 

reserve air wings, and the Navy’s four land-based patrol 

and reconnaissance wings. Today, each carrier air wing is 

composed of 44 strike fighters, four EA-6B electronic 

attack aircraft, four E-2C airborne early-warning planes, 

and 12 helicopters. Each patrol wing consists of about 25 

P-3 aircraft (including training and reserve aircraft); those 

wings perform reconnaissance and antisubmarine missions. Nearly 700 aircraft are associated with the Navy’s 

and Marines’ various training squadrons. 

15 3 12 4

35 6 14 5

97 17 57 a 20

213 37 102 35

66 11 35 12

60 10 32 11

88 15 33 12 ____ ____ ____ ____

Total 574 100 285 100

Percentage

1990 2006

Number Percentage Number

of Ships of the Fleet of Ships of the Fleet

Amphibious Ships

Combat Logistics Ships

Mine Warfare Ships and Fleet Auxiliaries

Aircraft Carriers

Surface Combatants

Attack Submarines

Ballistic Missile Submarines

2. The Ready Reserve Fleet is maintained by the Department of 

Transportation’s Maritime Administration, but it would be operated by the Military Sealift Command if the ships were activated 

for service.
CHAPTER ONE INTRODUCTION 3

Missions of the Navy

The Navy fills a variety of peacetime and wartime roles in 

support of U.S. national security. Although its peacetime 

missions have remained much the same over the past 15 

years, its potential wartime missions have altered considerably.

The ways in which the Navy uses its forces and deploys 

them overseas in peacetime has not changed significantly 

with the end of the Cold War or the advent of the war on 

terrorism. The Navy’s peacetime missions include conducting exercises with friendly nations, enforcing sanctions, responding to humanitarian crises, performing 

antidrug operations, “showing the flag” (visibly patrolling 

the world’s oceans), and ensuring the freedom of the seas 

against any entity that might try to restrict it. In addition, 

since the terrorist attacks of September 11, 2001, the 

Navy has conducted more operations to provide homeland security in U.S. coastal waters.

The missions that the Navy would expect to perform in 

wartime have changed substantially since the end of the 

Cold War. If the rivalry between the United States and 

the Soviet Union had led to a war in Europe, the Navy’s 

primary responsibilities would have been to destroy 

Soviet ballistic missile submarines, defend convoys crossing the Atlantic from attack by long-range Soviet aircraft 

and cruise missiles, and conduct independent strike operations along the edges of the Soviet Union. Such a war 

would have involved large-scale conflict between two sizable blue-water navies (those designed to operate in the 

open ocean). 

In the post-Cold War era, the United States no longer 

faces a large naval opponent, nor is one considered likely 

to exist in the next 10 years. The missions that the Navy 

has performed in support of operations in Iraq, Serbia, 

and Afghanistan have included large and small strike missions using land-attack missiles and carrier-based aircraft, 

the sinking of enemy naval forces (which were very 

small), and antimine operations. 

In the future, the Navy may be expected to perform the 

following missions in wartime, against either a large or a 

small opponent:

B Sea Control. Ensuring the freedom of the seas—with 

force, if necessary—has been the most common naval 

mission historically. A classic sea-control mission for 

the Navy was reflagging and escorting oil tankers 

through the Persian Gulf to deter attacks on them during the Iran-Iraq War of the 1980s. In a war with the 

Soviet Union, sea control would have meant ensuring 

that convoys made it across the Atlantic to the European theater. In future military operations, the most 

demanding sea-control mission may be defeating enemies’ area-denial strategies and antiaccess networks in 

littoral (coastal) regions. (That threat is discussed in 

more detail in the next section of this chapter).

B Sea Denial. Whereas sea control means ensuring freedom of movement at sea, sea denial involves using 

naval forces to deny an opponent access to the world’s 

oceans. Wartime blockades—such as the one that the 

United States practiced against Japanese commercial 

shipping during World War II or that the Union imposed on the Confederacy in the Civil War—are classic sea-denial operations. Sea denial is often thought of 

as a poor man’s naval strategy because it requires fewer 

forces to deny access to the seas than to control them 

directly. (Germany’s submarine campaigns in World 

Wars I and II illustrate that point.) Since the end of 

the Cold War, sea denial has been an easy mission for 

the U.S. Navy to perform because its opponents (Iraq, 

Serbia, and Afghanistan) have had few or no fighting 

ships. In the future, the United States might employ a 

large-scale sea-denial strategy if it found itself fighting 

an opponent with a substantial navy or significant 

merchant marine. 

B Land Attack and Support of Joint Forces on Shore. Attacking targets or supporting troops on land has been 

among the Navy’s most common missions over the 

past 15 years. During the 1990s, the Navy attacked 

land targets in numerous punitive or antiterrorist operations in Iraq and elsewhere. It also supported land 

operations in Iraq, Serbia, and Afghanistan through 

strikes with Tomahawk missiles and carrier-based aircraft. Although those operations did not require it, the 

Navy could also have provided gunfire support to 

forces operating near the shore or conducted an 

amphibious assault with Marine Corps units aboard 

amphibious warfare ships. In a more unorthodox 

example, during Operation Enduring Freedom in 

Afghanistan, the air wing of a Navy carrier was reduced substantially to make room for Army specialoperations forces and helicopters, and the carrier was 

used as a floating base for special-operations mis-
4 OPTIONS FOR THE NAVY’S FUTURE FLEET

sions.3 Both the Navy and Marine Corps are rethinking how they will perform land-attack and support 

missions in the future (as described in more detail later 

in this chapter).

B National Missile Defense. The Navy expects that technological developments will allow it to play a prominent role in defending the United States and U.S. 

troops and allies abroad against ballistic missiles. 

Depending on the ultimate configuration of a national 

missile defense system, Navy ships may carry radars to 

detect enemy missile launches and incoming warheads 

as well as carry and launch the missiles to intercept 

those enemy missiles.4 The Navy is planning its next 

generation of cruisers largely with the missile-defense 

mission in mind.

In short, compared with the Cold War or operations in 

the past 15 years, future wars would be likely to involve a 

different focus for sea control, a similar role for sea denial, 

much greater emphasis on land attack and support of operations ashore, and a completely new mission (national 

missile defense). It is that future for which Navy leaders 

must plan the type and number of ships that the service 

will need to buy.

Future Naval Threats

Determining the right size and mix of naval capabilities 

depends not only on the general types of peacetime and 

wartime missions that the Navy can expect to perform 

but also on the specific naval threats that the United 

States is apt to face. A great deal of uncertainty exists 

about the nature and scope of threats 20 or 30 years in 

the future, however, so making appropriate decisions 

about ship procurement is extremely difficult. For example, the Navy made large investments in attack submarines and Aegis cruisers and destroyers in the 1980s to 

counter the threat posed by the Soviet navy. That threat 

collapsed with the end of the Cold War in 1989. Nevertheless, although the Navy has adapted its ships for the 

post-Cold War period, many of its current vessels were 

designed and built during the Cold War and tailored to 

meet the specific threats of that era. 

Today, naval planners worry about two relatively specific 

threats that could emerge in the next 10 to 20 years: a 

strengthened Chinese navy and the possibility that terrorists could use or target ships. Planners are also concerned 

about a more generic threat: the ability of hostile nations 

to buy fairly cheap weapons that would make it difficult 

for the U.S. Navy to operate in some areas. 

China

Above all others, the specific potential threat that concerns much of the Navy’s leadership and many Members 

of Congress is a new naval competition with the People’s 

Republic of China.5 The future relationship between 

China and the United States remains uncertain. However, China is investing substantial resources in improving its military capabilities—especially those that would 

make it harder for U.S. forces to come to the aid of 

Taiwan in the event of a military confrontation with the 

mainland. In particular, observers of China’s naval programs note with concern that country’s investments in 

quiet conventional and nuclear-powered submarines, 

antiship cruise missiles based on land as well as at sea, and 

tactical and theater ballistic missiles.6 Such observers argue that attempting to counter those systems should be of 

paramount importance in determining the naval capabilities that the United States needs to pursue in the future.

Terrorist Groups

The other specific threat that many naval planners consider a high priority is the war on terrorism. Fears that 

terrorist organizations could use ships as delivery platforms for chemical or biological weapons or could attack 

commercial vessels might cause the Navy to change the 

way it conducts military operations and affect the num3. Fred Lewis, “Despite Splendid Deeds, Navy Remains Target of 

Budget Ax,” National Defense (April 2002).

4. See Congressional Budget Office, Alternatives for Boost-Phase Missile Defense (July 2004).

5. See, for example, Department of Defense, Office of the Secretary 

of Defense, Annual Report to Congress: Military Power of the People’s 

Republic of China, 2006 (May 2006); and Dave Ahearn, “Mullen 

Wary on Huge Chinese Military Buildup,” Defense Today (March 

15, 2006). Some observers worry as much about a renewed naval 

competition with Russia, especially if oil prices remain high in 

coming years. Russia has retained its ability to build highly capable, very quiet submarines equipped with modern weapons.

6. For a comprehensive overview of those investments, see Ronald 

O’Rourke, China Naval Modernization: Implications for U.S. 

Naval Capabilities—Background and Issues for Congress, Report for 

Congress RL33153 (Congressional Research Service, February 13, 

2006). Also see Bernard D. Cole, The Great Wall at Sea: China’s 

Navy Enters the Twenty-First Century (Annapolis, Md.: Naval 

Institute Press, 2001); and Lyle Goldstein and William Murray, 

“Undersea Dragons: China’s Maturing Submarine Force,” International Security (Spring 2004), pp. 125-160.
CHAPTER ONE INTRODUCTION 5

bers and types of ships it would need to buy.7 Conceivably, the war on terrorism could include a large, highly 

distributed effort at sea control to provide maritime security. Such an effort would require widespread interagency 

cooperation within the United States and assistance from 

other nations.8

 Even so, the Navy might need larger 

numbers of smaller ships than it has bought in the past. 

The force structure required to conduct a long-term antiterrorism naval campaign could look very different from 

the force structure needed to counter China’s naval power 

25 years from now. An antiterrorism naval campaign 

would probably require many small, lightly armed surface 

combatants. Such vessels would not be appropriate for 

fighting a near-peer competitor, such as China may be in 

the future. They would probably be highly vulnerable to 

the relatively sophisticated antiship weapons that China 

would use in a conflict with the United States.

Denial of Access to a Specific Area

The more generic threat that motivates U.S. naval planners is the need to counter area-denial and antiaccess 

strategies by other countries (including China). The 

Navy’s fear is that nations whose interests conflict with 

the United States’ will be able to buy advanced, but relatively inexpensive, weapons that will make U.S. military 

action very costly. The weapons that the Navy worries 

about most are mines; antiship cruise missiles; small, fast 

attack boats; and diesel-electric submarines (especially 

those with closed-cycle, air-independent propulsion systems, which can remain underwater for weeks and are 

extremely quiet). 

The Defense Department’s 2001 Quadrennial Defense 

Review was explicit in saying that the Navy must be 

transformed to defeat area-denial threats: “Antiship cruise 

missiles, advanced diesel submarines, and advanced 

mines could threaten the ability of U.S. naval and amphibious forces to operate in littoral waters. New approaches for projecting power must be developed to meet 

these threats.”9

 However, if the Navy develops the weapons and forces necessary to counter China’s fleet, it will 

probably also be able to destroy another country’s areadenial forces, which are unlikely to be more sophisticated 

or numerous than the area-denial forces that might be 

fielded by China.

The Evolution of the Navy’s Goals for 

Battle Force Ships

Since the end of the Cold War, planners have given 

widely varying answers to the question: How many ships 

does the Navy need? From the base force proposed during 

the first Bush Administration to the Navy’s recent proposal for a 313-ship fleet, the objective for the total 

number of battle force ships has varied significantly (see 

Figure 1-1), along with the assumptions that have undergirded those goals.

Stated Requirements from 1990 to 2001

In the 1980s, the Navy envisioned a 600-ship fleet, and 

the number of battle force ships reached 594 in 1987. 

The first change from the 600-ship goal was the baseforce initiative of the first Bush Administration, which 

called for a force of 451 ships. That initiative focused 

largely on what the Navy should keep from the vast shipbuilding effort of the previous decade; it paid less attention to where the Navy should invest in the future. 

The base force was the starting point for subsequent efforts by the Department of Defense (DoD) and the Navy 

to determine the correct size for the fleet. The analyses 

that followed explicitly considered what capabilities the 

Navy needed to do particular tasks, even though much of 

the attention after the analyses were published focused on 

the suggested numbers of battle force ships. The tension 

between numbers and capabilities would appear repeatedly in debates about the size and composition of the 

Navy.

The 1993 Bottom-Up Review (BUR)—which was analogous to the more recent Quadrennial Defense Reviews—

concluded that a fleet of 346 ships by 1999 could “carry 

7. See, for example, Captain James Pelkofski, “Before the Storm: 

Al Qaeda’s Coming Maritime Campaign,” Proceedings, U.S. Naval 

Institute (December 2005). Other analysts have questioned 

whether the Navy has a large role in the war against terrorism. See 

Hank Gaffney, “The Global Security Environment and the Role 

of the U.S. Navy out into the Future” (presentation given at the 

Future Naval Plans and Requirements Conference of the Institute 

for Defense and Government Advancement, April 24, 2006).

8. The Navy has begun to address that issue through its concept of a 

1,000-ship global maritime network, in which protecting sea lanes 

would require the combined naval forces of many countries sharing information. See Vice Admiral John G. Morgan and Rear 

Admiral Charles W. Martoglio, “The 1,000-Ship Navy Global 

Maritime Network,” Proceedings, U.S. Naval Institute (November 

2005), pp. 14-17.

9. Department of Defense, Quadrennial Defense Review Report (September 30, 2001), p. 31.
6 OPTIONS FOR THE NAVY’S FUTURE FLEET

Figure 1-1.

Number of Ships the Navy Needs, According to Various Defense

Department Analyses

Source: Congressional Budget Office.

Note: QDR = Quadrennial Defense Review.

out our strategy and meet our national security requirements.”10 The overall thrust of the BUR was that the demand for peacetime naval missions required a larger force 

structure than did prospective wartime missions. Ten carrier battle groups and 45 to 55 attack submarines were 

considered necessary to fight two nearly simultaneous regional wars (the defense policy standard throughout the 

1990s). But the desire to maintain more overseas presence 

with aircraft carriers and fulfill peacetime missions meant 

maintaining a 12-carrier force. 

In explaining the overseas presence mission, the BUR report stated: “U.S. forces abroad protect and advance our 

interests and perform a wide range of functions that contribute to our security. . . . The flexibility of our carriers, 

and their ability to operate effectively with relative independence from shore bases, makes them well suited to 

overseas presence operations.”11 The report implied that 

although 15 carriers would be desirable to provide fulltime presence in Europe, the Middle East, and the western Pacific, a 12-carrier force represented a prudent balance between cost and the risks associated with having 

gaps in overseas carrier presence.

The 1997 Quadrennial Defense Review (QDR) made 

few changes to the BUR force. It reiterated the requirement for 12 carrier battle groups and 12 amphibious 

ready groups. However, it also reduced the goal for surface combatants from more than 130 to 116 and split the 

difference on attack submarines, setting the requirement 

at 50.12 Overall, the results of the review implied a battle 

force of 305 to 317 ships. (As smaller numbers of newer, 

more capable ships replaced larger numbers of less capable ships, the force could shrink and still maintain the 

capabilities desired in the QDR.) The 1997 QDR report 

contained little analysis supporting its conclusions about 

the size and composition of the Navy’s forces.

Base Force

(1991)

Bottom-Up

Review

(1993)

QDR

(1997)

30-Year

Shipbuilding

Report

(2000)

QDR

(2001)

Long-Range

Shipbuilding

Report

(2003)

Interim

Report on

Shipbuilding

(2005)

2006

Shipbuilding

Plan

0

200

250

300

350

400

450

10. Secretary of Defense Les Aspin, Report of the Bottom-Up Review

(October 1993), p. 28.

11. Ibid., pp. 23-24.

12. Secretary of Defense William S. Cohen, Report of the Quadrennial 

Defense Review (May 1997).
CHAPTER ONE INTRODUCTION 7

In June 2000, in response to a mandate in the National 

Defense Authorization Act for Fiscal Year 2000, the Navy 

submitted the Report on Naval Vessel Force Structure 

Requirements to the Congress. That document—commonly referred to as the 30-Year Shipbuilding Report—

described the ship construction plans necessary to maintain the QDR force of around 300 ships. At the same 

time, it warned that the fleet was “heavily tasked” and 

had “little elasticity left . . . to respond to an emergent crisis in one region without having to reduce forward naval 

presence in another.”13 Consequently, the report outlined 

a larger Navy of some 360 ships that it called the “Future 

Force—Reducing the Risk.” That fleet would include 15 

carrier battle groups, 14 amphibious ready groups, and 

substantial increases in the number of surface combatants 

and submarines.

In 2001, the first Quadrennial Defense Review of the 

current Bush Administration did not propose a particular 

force structure for the Navy. It declared an objective of 

transforming the military over time and said that the current force of about 310 ships would be the foundation on 

which transformation would occur.14 However, before 

September 11, 2001, numerous press reports indicated 

that the Secretary of Defense was seriously considering 

reducing the number of carrier battle groups to 11.15

Sea Power 21 and the Navy’s Plan for a 

375-Ship Fleet

Against the backdrop to the Bush Administration’s plans 

to transform the military, the Navy put forward its transformation vision, called Sea Power 21, in 2002. That vision rests on three key concepts—Sea Strike, Sea Shield, 

and Sea Basing—connected by a fourth, ForceNet. 

Sea Strike represents the Navy’s efforts to support joint 

campaigns by projecting offensive power from and 

through littoral areas around the world. Such offensive 

power could take the form of strikes by carrier-based aircraft, naval guns, or missiles launched from surface combatants and submarines; information or electronic attack 

warfare (such as disrupting an enemy’s communications 

or command-and-control systems); or landings or assaults 

by Marine Corps ground units. 

Sea Shield is the defensive counterpart to Sea Strike. It 

encompasses the capabilities that defend or screen Navy 

ships at sea from attack, protect joint and allied forces 

operating on shore from air and missile attack, and protect the United States from conventional and unconventional threats. As now conceived, Sea Shield would eventually include theater and perhaps national missile 

defense systems.

Sea Basing is considered by many defense officials to be 

the most transformational of the three concepts: it envisions that future landings of Marine units ashore will be 

conducted, supported, and sustained from ships at sea. 

Today, such operations would be supported and sustained 

primarily from supply depots on land, located either at an 

existing base provided by a host nation or on territory 

seized during the assault. Future sea-based operations 

would forgo putting “iron mountains” of supplies, fuel, 

and ammunition ashore and instead keep them at sea, 

rearming and replenishing Marine forces on shore only 

when needed. 

Binding those three concepts together is ForceNet, a term 

the Navy uses to describe its overall approach to linking 

networks, sensors, communication systems, and warfighting units to provide a common operational picture in a 

battlefield environment. ForceNet and various supporting networks (such as the Cooperative Engagement 

Capability and the Naval Fires Network) represent the 

Navy’s efforts to pursue network-centric warfare, which 

DoD views as one of the most important elements of military transformation.16 According to the most concrete 

13. Secretary of Defense William Cohen, Report on Naval Vessel Force 

Structure Requirements (June 26, 2000), p. 3.

14. Department of Defense, Quadrennial Defense Review Report (September 30, 2001).

15. The reduction to 11 aircraft carriers was finally made an explicit 

DoD (and Navy) objective in the 2006 QDR. That goal was the 

only specific number of Navy ships endorsed in the report. See 

Department of Defense, Quadrennial Defense Review Report (February 6, 2006).

16. For more information on network-centric warfare and its application to the Navy, see Ronald O’Rourke, Defense Transformation: 

Background and Oversight Issues for Congress, Report for Congress 

RL32238 (Congressional Research Service, February 17, 2006), 

and Navy Network-Centric Warfare Concept: Key Programs and 

Issues for Congress, Report for Congress RS20557 (Congressional 

Research Service, February 14, 2006). For an argument in favor of 

the network-centric warfare concept, see Office of the Secretary of 

Defense, Office of Force Transformation, Alternative Fleet Architecture Design (January 31, 2005). For a criticism of the ForceNet 

approach, see Malina Brown, “Van Riper: Navy’s ForceNet Too 

Broad, Mysterious to be Meaningful,” Inside the Navy (July 5, 

2004).
8 OPTIONS FOR THE NAVY’S FUTURE FLEET

statement of the subject, the objective of ForceNet is 

“near instantaneous collection, analysis, and dissemination of information coupled to advanced computerdriven decision aids . . . unify[ing] the battle space of the 

21st century.”17

The Navy hopes that linking all of its systems through 

ForceNet will eventually increase military capability substantially by allowing for a more widely dispersed, but 

still networked, fleet of ships and aircraft. Such a fleet is 

considered capable of covering more territory, seeing 

more of an enemy’s operations, and conducting defensive 

or offensive operations with virtually any weapon in the 

force. Not unlike sea basing, ForceNet is still in the early 

stages of implementation and will have to overcome 

many technical challenges to fulfill the hopes of senior 

Navy and DoD leaders.

To carry out the first steps of the Sea Power 21 vision, the 

Navy introduced the Global Concept of Operations in 

2002. It involved reorganizing the Navy from 19 strike 

groups to 37, in part by operating surface combatants 

and submarines with amphibious ships to create expeditionary strike groups. The Chief of Naval Operations at 

that time stated that the reorganization and the Global 

Concept of Operations required a fleet of approximately 

375 ships.18

Shortly thereafter, in response to a requirement in the 

National Defense Authorization Act for Fiscal Year 2003, 

the Navy submitted a report to the Congress outlining a 

plan to build a fleet of 375 ships.19 The report argued 

that the larger number of ships was necessary to carry out 

the Navy’s peacetime and wartime missions in support of 

U.S. military strategy. Unlike the 30-Year Shipbuilding 

Report released in 2000, that plan did not envision a 

larger carrier force or more amphibious ships. Instead, it 

included 56 littoral combat ships, which it described as 

relatively small surface combatants designed to counter 

threats posed by mines, submarines, and small boats in 

littoral areas. Those ships represented almost all of the 

proposed increase in the Navy’s force structure from the 

2001 QDR force of 310 ships. 

The Navy’s Plan for 260 to 325 Ships

After publishing the 2003 long-range report, senior Navy 

leaders concluded that the service did not have enough 

budgetary resources to build a 375-ship fleet. In March 

2005, the Navy released An Interim Long-Range Plan for 

the Construction of Naval Vessels for FY2006. It included 

projected inventories for a 260-ship fleet and a 325-ship 

fleet through 2035, suggesting that the Navy’s total requirement might fall within that range. In testimony 

before the Congress, senior naval leaders stated that the 

Navy could reduce its requirement from 375 ships to 

between 260 and 325 ships by making greater use of 

technology, rotating crews to ships while the ships are 

deployed overseas (thus allowing them to spend more 

time in their area of operations), and basing some vessels 

in Guam and Japan rather than the United States.20

Numbers Versus Capabilities

The arguments that Navy leaders put forward in defense 

of significantly reducing the 375-ship requirement were 

consistent with the broader contention that numbers of 

ships are less relevant to gauging the strength of the fleet 

than are the capabilities that those ships provide. As the 

size of the fleet has declined over the past few years, Navy 

leaders have often stated that the fleet’s capabilities are 

more important than the raw number of ships. In 2005, 

the Secretary of the Navy told Members of Congress that: 

“Today’s 290 ship Navy is much more capable than the 

more than double the size Navy of the late 1980s. Numbers still matter, but only when carefully balanced with 

capabilities.”21 Some senior Navy admirals have made 

similar arguments, as has the Secretary of Defense.22

Others, however, have countered that numbers are important in any assessment of fleet strength. When arguing 

in favor of the 375-ship fleet, the former Chief of Naval 

Operations, Admiral Vern Clark, stated that, “You can 

17. Vice Admiral Richard W. Mayo and Vice Admiral John Nathman, 

“ForceNet: Turning Information into Power,” Proceedings, U.S. 

Naval Institute (February 2003), p. 42.

18. Admiral Vern Clark, “Sea Power 21: Projecting Decisive Joint 

Capabilities,” Proceedings, U.S. Naval Institute (October 2002), 

p. 38.

19. Department of the Navy, A Report to Congress on Annual 

Long-Range Plan for the Construction of Naval Vessels (May 2003).

20. See, for example, the statement of Admiral Vern Clark, Chief of 

Naval Operations, before the Senate Armed Services Committee, 

February 10, 2005.

21. Statement of Gordon R. England, Secretary of the Navy, before 

the House Armed Services Committee, February 17, 2005. 

(England is now Deputy Secretary of Defense.)

22. Dave Ahearn, “Rumsfeld Says He Doesn’t Oppose Increase in 

Navy Fleet,” Defense Today (January 26, 2006).
CHAPTER ONE INTRODUCTION 9

only be in one place at one time with one ship and so 

numbers do matter. Numbers do have a quality all their 

own.”23 Former Secretary of the Navy John Lehman worried that by reducing the fleet, “We’re creating a vacuum 

in the Pacific. You cannot have a stabilizing, deterring 

presence in the world with 289 ships.”24 And the former 

director of the Office of Force Transformation, Admiral 

Arthur Cebrowski, argued that a fleet of 500 to 800 

smaller, less capable combatants networked together was 

the right answer for the Navy’s future force structure. In 

his view, the network would be the key to providing the 

capabilities needed by the fleet, and the larger the number of linked systems, the stronger the network.25

As a practical matter, divorcing numbers of ships from 

capabilities is difficult to do in assessing fleet requirements. A given capability must eventually be translated 

into the weapons and systems necessary to provide it. Yet 

determining what capabilities the Navy needs and what 

amount of those capabilities is required to carry out the 

Navy’s role in U.S. military strategy necessarily involves a 

great deal of uncertainty. Further, the mode by which a 

given set of capabilities is provided—such as smaller 

numbers of more capable systems or larger numbers of 

less capable platforms—is also uncertain. 

Most of the ships that the Navy is building today and 

plans to build in the near future are unquestionably more 

capable than their predecessors built a generation ago. 

Nonetheless, the Navy is now experimenting with 

smaller, less capable platforms and has begun building the 

littoral combat ship, a surface combatant much smaller 

than anything the Navy has produced in 40 years. 

Operating Changes for Battle 

Force Ships

According to senior Navy officials, the main reason for 

continued uncertainty about the Navy’s future force 

structure is that the ultimate effects of some innovative 

concepts being pursued by the service are still unknown. 

Those concepts include the Fleet Response Plan, a new 

method of surging the fleet (stepping up the speed and 

quantity of ship deployment in wartime); forward home 

porting (basing more ships overseas); and Sea Swap, a 

procedure for rotating crews to forward-deployed ships to 

increase the amount of time they spend on-station (in 

their area of operations). In addition, according to some 

analysts, the role of unmanned systems could and should 

greatly influence the size and composition of the future 

fleet.

Fleet Response Plan

After the attacks of September 11, 2001, and the start of 

combat operations in Afghanistan and Iraq, the Navy’s 

senior leadership decided to seek the ability to deploy 

more aircraft carriers to a crisis or conflict, if required. As 

a result, the Navy developed the Fleet Response Plan 

(FRP), which is designed to change the way the service 

conducts its training and maintenance of aircraft carriers, 

as well as some other ships. Under the previous carrier 

deployment cycle, only three or four ships out of the 12 

in the fleet would be available at any given time to go to a 

theater of operations within 30 days. Under the FRP, the 

Navy would keep the carrier force in a higher average 

state of readiness so that six of the 12 carriers could deploy within 30 days and another two could deploy within 

90 days.26 In the summer of 2004, the Navy conducted a 

fleet experiment to test out the new system and reported 

satisfactory results.27

The long-term impact of the Fleet Response Plan on the 

Navy’s readiness, training, and budget have yet to be 

determined. Some critics have argued that there is not 

enough funding to maintain the high level of pilot training that is required under the FRP for carrier air wings to

23. Gopal Ratman, “U.S. Navy Wrestles with Fleet Size, Abilities,” 

Defense News (July 1, 2002), p. 4.

24. Robert Hamilton, “Lehman: U.S. Fleet Is Already Too Small for 

Safety,” The Day (New London, Conn.), February 20, 2005.

25. Aarti Shah, “Cebrowski Recommends Large Fleet of Small, Less 

Expensive Ships,” Inside the Navy (February 7, 2005). Also see 

Office of the Secretary of Defense, Office of Force Transformation, Alternative Fleet Architecture Design (January 31, 2005). 

26. Before the Fleet Response Plan, when an aircraft carrier returned 

from a deployment, many of its personnel were immediately 

transferred and the ship underwent large maintenance projects. 

Under the FRP, if the carrier is one of those that must remain 

available to deploy, personnel transfers and maintenance are performed more judiciously so as not to undermine the ship’s ability 

to deploy again at relatively short notice.

27. Malina Brown, “In New Exercise, Navy to Surge Seven CSGs to 

Spots Around the Globe,” Inside the Navy (June 7, 2004); and 

Malina Brown and Christopher J. Castelli, “Mullen: Results from 

Summer Pulse ‘04 ‘Incredibly Good’ So Far,” Inside the Navy (July 

5, 2004).
10 OPTIONS FOR THE NAVY’S FUTURE FLEET

be deployed at short notice.28 The House of Representatives has included a provision in the defense authorization 

act for 2007 to prohibit the Navy from expanding the 

FRP to other ships for the time being.

Because the Fleet Response Plan might allow the Navy to 

deploy more carriers and other ships to a crisis more rapidly than in the past, the overall wartime requirement for 

those ships might decline. For example, senior Navy and 

DoD leaders have explicitly stated that the Navy could 

reduce its carrier force to 11 because of its ability to surge 

ships—meaning that a smaller force could now surge the 

same number of carriers to a crisis as a larger force could 

before.29 That might also prove true for other types of 

ships as the Navy evaluates its fleet requirements. 

The Fleet Response Plan is applicable only during crises 

or wartime, however. Providing more overseas presence 

during peacetime with fewer ships (surface combatants, 

at least) is the subject of other Navy initiatives.

Forward Basing

Although the Navy already bases a portion of its fleet outside the United States, it has indicated that it plans to 

transfer more ships to overseas ports. Today, a carrier 

strike group and an expeditionary strike group are based 

permanently in Yokosuka and Sasebo, Japan, respectively. 

The ships in Yokosuka comprise one conventionally powered aircraft carrier, one command ship, and eight surface 

combatants. In Sasebo, the Navy has four amphibious 

ships, two minesweepers, and one salvage ship. In addition, two attack submarines and a submarine tender are 

stationed on the Pacific island of Guam (with a third 

attack submarine to follow shortly), another submarine 

tender is stationed in Italy, and four minesweepers are 

based in the Persian Gulf. 

The Navy has studied options for basing six more submarines and a squadron of cruisers and destroyers in Guam, 

at a cost of about $1 billion in additional infrastructure. 

It has also looked at basing an aircraft carrier in Guam, 

but that would require another several billion dollars, at 

least, to improve the facilities on the island.

Ships based overseas spend more of their time on-station 

than do ships based in the continental United States, 

because they have shorter transit times to their operating 

areas and use different operating concepts that provide 

additional days on-station.30 For example, even when 

Navy ships based in Japan put to sea for a training exercise or visit another port for shore leave, they are considered to be performing the mission of showing the flag. As 

a consequence, the Navy counts those ships as providing 

overseas presence full time, even when they are training 

or simply tied up at the pier. In addition, ships based 

overseas can respond to most crises faster than can ships 

located in the United States (unless the crisis occurs in the 

Western Hemisphere). Thus, forward-based ships would 

also help to meet the requirement for ships in the first 

days of a war.

Sea Swap

Perhaps the most significant break with past practice 

that the Navy is considering is to rotate crews to forwarddeployed ships. In the past, the crew of a surface combatant would typically spend about 18 months training, performing maintenance, and resting at its home port (in the 

United States) before taking its ship on a six-month 

deployment and then bringing the ship home. To increase the amount of time that ships can spend conducting missions, the Navy has begun experimenting with a 

multiple-crewing concept called Sea Swap on some surface combatants. (The Navy has long used a system of 

dual rotating crews on ballistic missile submarines.)

Under one version of Sea Swap, three crews and three 

ships are rotated in such a way as to keep one surface 

combatant deployed away from its home port for 18 

months. The first crew takes the ship out on deployment, 

while the other two crews continue with their training 

and maintenance cycles on two other ships. After six 

months, the second crew flies to an overseas location to 

meet the deployed ship and relieve the first crew. Six 

months later, the third crew relieves the second crew and 

then brings the ship home for maintenance at the end of 

the 18-month period. That approach is being used on 

some Arleigh Burke class destroyers.

28. See Government Accountability Office, Defense Logistics: GAO’s 

Observations on Maintenance Aspects of the Navy’s Fleet Response 

Plan, GAO-04-724R (June 18, 2004). For a critique of the Fleet 

Response Plan, see Lieutenant B.W. Stone, “A Bridge Too Far,” 

Proceedings, U.S. Naval Institute (February 2005), pp. 32-33.

29. Christopher J. Castelli, “Congress Presses Officials on Shipbuilding Issues, Carrier Retirement,” Inside the Navy (February 21, 

2005).

30. See Congressional Budget Office, Increasing the Mission Capability 

of the Attack Submarine Force (March 2002), pp. 10-11.
CHAPTER ONE INTRODUCTION 11

The benefits of Sea Swap may be significant. According 

to the Navy, three ships that each deploy from the United 

States and return independently after six months will provide a total of 300 days on-station over an 18-month period. By eliminating a ship’s transit time to and from the 

United States, the Sea Swap concept increases the total 

amount of presence provided by about 38 percent 

(including time for crews to turn over). Thus, one Sea 

Swap vessel is equivalent to 1.38 ships deploying independently. The new operating concept essentially lets the 

Navy provide more presence with its existing force of 

ships—or provide the same amount of presence with a 

smaller force—compared with ships that do not use Sea 

Swap.

The Navy has tried some variations of that approach on 

other types of surface combatants, but the amount of 

increased presence was slightly less than 38 percent. The 

Navy has also studied the feasibility of applying Sea Swap 

to amphibious ships and aircraft carriers, but it appears to 

have concluded that the concept would be too difficult to 

carry out on such large vessels. 

Ultimately, the Navy envisions using more crews than 

ships to perform the rotations—for instance, alternating 

four crews among three ships over a period of years. In 

particular, the Navy plans to use such an approach on its 

new littoral combat ships and future Zumwalt class destroyers.31 That approach could yield perhaps 25 percent 

more presence than the version of Sea Swap used on the 

Arleigh Burke destroyers.

Sea Swap’s long-term potential is not yet certain, however. 

As recently as three or four years ago, senior Navy admirals feared that rotational crewing concepts would be too 

challenging to implement. They voiced concerns about 

whether a crew would feel sufficient attachment to a ship, 

whether crews would receive enough training, and 

whether the deployed ship would be well maintained—all 

of which could reduce retention among the rotating 

crews. In 2004, the Government Accountability Office 

raised concerns that the Navy had not provided enough 

guidance for implementing and learning lessons from Sea 

Swap, nor had the Navy fully assessed the impact on ship 

maintenance.32 A survey of sailors after the first Sea Swap 

experiments found that most participants did not like 

rotational crewing and that, if it became standard, they 

would be less likely to stay in the Navy. In recent legislation, Members of the House of Representatives have 

raised similar concerns. Senior admirals have said that Sea 

Swap is a dramatic change in the Navy’s culture and thus 

will take time for people to adjust to.33

Senior Navy leaders are now saying that Sea Swap is the 

way of the future. They contend that the Navy must increase the amount of time its ships spend on-station in 

order to reduce the number of ships that the service needs 

to buy.34 In a speech to the Surface Navy Association in 

early 2005, Admiral Clark explicitly stated that Sea Swap 

had swayed his thinking about the number of ships the 

Navy requires.35

An Unmanned Revolution?

In the longer term—10 years or beyond—the size of the 

Navy’s fleet could be influenced by the introduction of 

unmanned aerial, surface, and underwater vehicles. As 

those systems mature and ships employ more of them, an 

individual ship’s capability to locate, track, and attack targets could increase substantially. Several observers have 

gone so far as to say that 20 or 30 years from now, the 

Navy’s ships will be little more than trucks, carrying 

unmanned systems that are off-loaded to do all of the

31. Littoral combat ships will initially operate with a dual-crew concept similar to that used on ballistic missile submarines. However, 

once enough of the ships have been commissioned, the Navy will 

operate them with four crews for three ships in order to keep one 

on-station overseas. The first crew will take the ship out on its 

deployment and begin routine operations. After four months, a 

new crew will take over for another four months. That cycle will 

continue until the fourth crew brings the ship back to its home 

port. When one crew is not assigned to a ship, it will train on 

shore to prepare for its next deployment. Members of the extra 

crew can also serve to replace members of the crews assigned to 

ships, if necessary.

32. Government Accountability Office, Force Structure: Navy Needs to 

Fully Evaluate Options and Provide Standard Guidance for Implementing Surface Ship Rotational Crewing, GAO-05-10 (November 

10, 2004).

33. Dale Eisman, “Crew-Swapping Success Carries a Cost,” 

Virginian-Pilot, July 14, 2004; and Jason Ma, “Navy Pleased with 

Sea Swap Results, But Retention Problems Possible,” Inside the 

Navy (July 19, 2004).

34. See Christopher J. Castelli, “Navy Wants to Cut Number of Strike 

Groups, Slash LPD-17 Shipbuilding,” Inside the Navy (April 26, 

2004); and Dave Ahearn, “Adm. Nathman Says Perhaps Just 40 to 

50 LCSs Required,” Defense Today (June 24, 2004).

35. Christopher J. Castelli, “On Shipbuilding Challenge, Clark Talks 

of Confronting Realities,” Inside the Navy (January 17, 2005).
12 OPTIONS FOR THE NAVY’S FUTURE FLEET

work.36 Moreover, if the promises of ForceNet are realized and those unmanned systems become part of the battle force network, their utility for the Navy may be 

greater still. 

However, the Navy is only in the very early stages of 

developing and incorporating unmanned systems into its 

fleet. The eventual numbers, costs, and impact of unmanned systems remain highly uncertain, although they 

have the potential to affect the way the Navy conducts all 

major types of warfare. 

36. Christopher Cavas, “U.S. Fleet of Mother Ships: Will Swarms of 

Tiny Unmanned Vehicles Replace Large Vessels?” Defense News

(November 15, 2004); and “U.S. Analyst Says UUVs, Not Submarines, Are the Key to Maritime Supremacy,” Jane’s Defence 

Weekly (April 28, 2006).
CHAPTER

2

The Navy’s Current Plan for Modernizing the Fleet

In the summer of 2005, the new Chief of Naval Operations, Admiral Michael Mullen, ordered a reexamination 

of the Navy’s previous shipbuilding plan, which envisioned a fleet of between 260 and 325 battle force ships. 

Admiral Mullen said the review was intended to arrive at 

a single numerical requirement for the fleet and to provide stability in the year-to-year construction of naval vessels so that both the Navy and the shipbuilding industry 

could plan efficiently for whatever ships were ordered.

In February 2006, the Navy submitted its new 30-year 

shipbuilding report to the Congress, which calls for a 

fleet of 313 ships.1 That number would be the permanent requirement around which the actual number of 

ships would rise and fall, depending on when ships were 

retired from the fleet and on what budgetary resources 

were available for buying new ships.2 Although the plan 

covers a 30-year period, Navy officials have stated that the 

requirement is aimed at dealing with expected threats and 

contingencies in 2020.3 The 313-ship requirement consists of:

B 11 aircraft carriers;

B 14 strategic ballistic missile submarines;

B 48 attack submarines;

B 4 guided missile submarines (SSGNs);

B 62 Arleigh Burke class destroyers;

B 7 DDG-1000 Zumwalt class destroyers;

B 19 CG(X) cruisers;

B 55 Freedom class littoral combat ships (LCSs);

B 31 amphibious ships;

B 12 future maritime prepositioning force, or MPF(F), 

ships; and

B 50 support ships.

That fleet would be organized around 33 strike groups: 

11 carrier strike groups, nine expeditionary strike groups, 

nine surface action groups, and four SSGN strike forces. 

However, if the Navy ultimately adopted Sea Swap for all 

of its Arleigh Burke destroyers and its new classes of large 

surface combatants, that fleet could provide the same 

amount of peacetime overseas presence as 44 strike 

groups would today, the Congressional Budget Office 

estimates.

Major Weapons Programs

The new 30-year shipbuilding plan encompasses a wide 

array of ship and (by implication) aircraft programs. 

Additional details about the Navy’s procurement plans 

through 2011 come from the 2006 defense appropriation 

and authorization laws and from the Future Years Defense Program (FYDP) that was prepared as part of the 

President’s 2007 budget request. (The ship purchases envisioned in the 2007 budget are consistent with the new 

shipbuilding plan.) 

The Navy proposes to buy 51 ships between 2007 and 

2011—one aircraft carrier, five submarines, six large surface combatants, 23 small surface combatants, 11 amphibious and maritime prepositioning ships, and five 

support ships (see Figure 2-1). Over the same period, the 

1. Department of the Navy, Report to Congress on Annual Long-Range 

Plan for Construction of Naval Vessels for FY2007 (February 2006).

2. Christopher P. Cavas, “U.S. Ship Plan to Cost 20% More: Price 

Control Will Be Key to Funding 313-Vessel Fleet,” Defense News 

(December 5, 2005).

3. Geoff Fein, “The Art of Building a 313-Ship Fleet: Balancing 

Navy and Industry Needs,” Defense Daily (May 1, 2006).
14 OPTIONS FOR THE NAVY’S FUTURE FLEET

Figure 2-1.

Purchases, Costs, and Inventory of Battle Force Ships Under the Navy’s 2006 

Shipbuilding Plan

Source: Congressional Budget Office.

Note: SSBNs = ballistic missile submarines; SSNs = attack submarines; SSGNs = guided missile submarines; LCSs = littoral combat ships; 

MPF(F) = Maritime Prepositioning Force (Future).

a. Data for 2006 exclude supplemental funding related to Hurricane Katrina.

2005 2010 2015 2020 2025 2030 2035

0

2

4

6

8

10

12

14

16

Aircraft

Carriers SSBNs SSNs

Large

Surface

Combatants

LCSs Amphibious

Ships

MPF(F)

Ships

Support

Ships

Purchases

2005 2010 2015 2020 2025 2030 2035

0

5

10

15

20

25

30

35

SSBNs

SSNs and SSGNs

LCSs

Amphibious Ships

Average for

2000 to 2005

Support Ships MPF(F) Ships

Surface Combatant

Modernization and

LCS Mission Modules

Aircraft Carriers

Large Surface

Combatants

Procurement Costsa (Billions of 2007 dollars)

2005 2010 2015 2020 2025 2030 2035

0

50

100

150

200

250

300

350

400 Inventory

SSBNs SSNs and SSGNs

LCSs

Amphibious Ships

Support Ships MPF(F) Ships

313-Ship Requirement

Aircraft Carriers

Large Surface

Combatants

Frigates
CHAPTER TWO THE NAVY’S CURRENT PLAN FOR MODERNIZING THE FLEET 15

Navy plans to retire one aircraft carrier, one small surface 

combatant, eight amphibious ships, 13 support ships, 

and two minesweeping ships.4

 Under the 2006 shipbuilding plan, the Navy would buy another 218 vessels 

between 2012 and 2035—six aircraft carriers, 44 attack 

submarines, 14 strategic ballistic missile submarines, 45 

large surface combatants, 49 small surface combatants, 

21 amphibious and maritime prepositioning ships, and 

39 support ships. 

The Navy also proposes to buy about 1,200 aircraft 

between 2007 and 2011. Under the 2006 shipbuilding 

plan, it would purchase an additional 2,600 aircraft 

between 2012 and 2035, CBO estimates.5

Current and Planned Ship Programs

The Navy plans to develop and build numerous new 

classes of ships over the next 30 years. They include a new 

type of nuclear-powered aircraft carrier, four kinds of surface combatants, a new class of submarine to carry strategic ballistic missiles, several types of amphibious and maritime prepositioning ships, and four different support 

ships (see Table 2-1). In addition, the Navy has begun 

building the Virginia class attack submarine, the first of 

which was commissioned in late 2004, and the LPD-17 

amphibious ship, the first of which was commissioned in 

January 2006. The last of the 62 planned Arleigh Burke 

class guided missile destroyers were ordered in 2005 and 

will enter the fleet around 2010.

Nuclear-Powered Aircraft Carrier (CVN-21). The mainstay of the Navy’s current carrier fleet is the Nimitz class, 

which was first designed in the 1960s. Ten of those ships 

will be serving in the fleet by 2010, and the last ship in 

that class, the George Herbert Walker Bush (CVN-77), 

could serve until about 2060. 

A new, as yet unnamed, class of carriers (known currently 

as CVN-21s) is being designed to replace existing carriers 

as they retire.6 Although the CVN-21 class is using essentially the same hull as the Nimitz class, its internal design 

and components will be substantially different. According to the Navy, key features of the CVN-21 will include:

B A new reactor and power system, which will provide 

up to three times the power of a Nimitz; 

B An electromagnetic catapult system for launching aircraft, which will require much less maintenance and 

personnel to operate than the steam-powered catapults 

on current carriers; and 

B Technological improvements to reduce the number of 

sailors needed to operate the ship by between 500 and 

900, not including potential reductions in personnel 

for the carrier’s air wing.

The new class will be built by the Newport News shipyard, which is owned by Northrop Grumman.

The Navy expects to order the first CVN-21 in 2008, at a 

cost of about $4 billion to develop and $11 billion to design and build. Subsequent ships, which would be bought 

roughly every four years, would cost about $8 billion 

each to build. (In comparison, the final Nimitz class carrier cost about $7 billion to build, with only a modest 

amount spent on development.) In return for that investment, the Navy anticipates that the CVN-21 will be able 

to launch 160 aircraft sorties a day for 30 days, compared 

with 120 to 140 sorties per day for the Nimitz class. New 

technologies—along with a reorganization of the flight 

deck, hangars, and aircraft elevators on the CVN-21—are 

intended to allow aircraft to be refueled, rearmed, and 

launched more quickly without unduly wearing down the 

flight-deck personnel. Like the Nimitz class, the CVN-21 

will be about 1,100 feet long and displace (weigh) about 

100,000 tons, with an expected service life of 50 years.

Questions have been raised, however, about whether the 

Navy should continue to build such large and expensive 

ships. A vessel displacing more than 100,000 tons may 

prove to be vulnerable in the types of environments 

where U.S. naval forces may have to operate in the future. 

4. The Congress has prohibited the Navy from having fewer than 12 

operational aircraft carriers. If that prohibition was lifted, the 

Navy would retire two aircraft carriers in the next five years.

5. The aircraft program between 2012 and 2024 is based on Congressional Budget Office, The Long-Term Implications of Current 

Defense Plans and Alternatives: Summary Update for Fiscal Year 

2006 (October 2005). Beyond 2024, CBO assumed one-for-one 

replacement of old aircraft with new models as the former retire at 

the end of their service life.

6. The Navy is referring to the program to develop the new carrier as 

the CVN-21 (for 21st century) program. The first ship to emerge 

from that program will be the Navy’s 78th aircraft carrier and thus 

will be numbered CVN-78. As a result, the new class will eventually be known as CVN-78s or by whatever given name that first 

ship receives.
16 OPTIONS FOR THE NAVY’S FUTURE FLEET

Table 2-1.

New Classes of Ships Scheduled to Enter the Fleet Through 2035

Source: Congressional Budget Office.

Note: Ships with a “T-” designation refer to vessels operated by the Military Sealift Command. For the meaning of other letter designations 

for ships, see Summary Box 2 on page xiv.

a. At the beginning of 2006.

b. The Navy proposes to retire the John F. Kennedy in 2006, but it must obtain Congressional authorization to do so.

c. Includes replacements bought in the 2030s for Freedom class littoral combat ships that retire after 25 years of service.

d. Formerly known as the DD(X).

e. There are 48 DDG-51s in service today, but the Navy has ordered a total of 62.

f. Projected.

g. Belleau Wood, the first LHA-1 to retire, will be replaced by Makin Island, the last of the LHDs.

New Class Current Class

CVN-21 2008 2015 7 Kitty Hawk (CV-63) 1 2008

Enterprise (CVN-65) 1 2013

John F. Kennedy (CV-67) 1 2006 b

Nimitz (CVN-68) 9 2025

Freedom (LCS-1) 2005 2007 76 c Oliver Hazard Perry (FFG-7) 30 1994

Zumwalt (DDG-1000)d 2007 2012 7 Spruance (DD-963) 1 1998

CG(X) 2011 2016 19 Ticonderoga (CG-47) 24 2004

DDG(X) 2023 2028 25 Arleigh Burke (DDG-51) 62 e 2026

Virginia (SSN-774) 1998 2004 30 Los Angeles (SSN-688) 49 1995

Improved Virginia 2020 2026 27

SSBN(X) 2022 2029 14 Ohio (SSBN-726) 14 2027

San Antonio (LPD-17) 1996 2006 9 Austin (LPD-4) 11 2004

LHA-6/LHD(X) 2007 2012 f 8 Tarawa (LHA-1) 4 2006 g

Wasp (LHD-1) 7 2029

MPF(F) (various) 2009 2012 12

LSD(X) 2018 2022 f 12 f Whidbey Island (LSD-41) 8 2022

Harpers Ferry (LSD-49) 4 2032

Lewis and Clark (T-AKE) 2000 2006 11 Kilauea (AE-26) 5 2010

Sacramento (AOE-1) 3 2005

T-ATF(X) 2013 2015 4 Powhatan (T-ATF-166) 4 2015

T-AO(X) 2018 2022 15 Henry J. Kaiser (T-AO-187) 14 2022

T-AGOS(X) 2021 2025 4 Victorious (T-AGOS-19) 3 2024

Impeccable (T-AGOS-23) 1 2031

ARS(X) 2022 2026 4 Safeguard (ARS-50) 4 2026

T-AOE(X) 2025 2029 4 Supply (T-AOE-6) 4 2029

Year First

Ship Is

Through 2035

Year First

Ship Is

Authorized Commissioned

Purchased Year First

Quantity to Be

Quantity Now

Existing Ships Being Retired

in Service Ship Retires a

Support Ships

Aircraft Carriers

Surface Combatants

Submarines

Amphibious Ships
CHAPTER TWO THE NAVY’S CURRENT PLAN FOR MODERNIZING THE FLEET 17

The Department of Defense’s Office of Force Transformation has suggested that the Navy buy aircraft carriers 

that are half the size of the CVN-21 in order to have 

more of them, distributed over a wider area. (The office 

has also said that the Navy should consider buying dozens 

of very small ships, with displacements of a few thousand 

tons, that are capable of carrying aircraft.)7

 Former Secretary of the Navy Gordon England (now the Deputy 

Secretary of Defense) told the Congress that in the future, 

the Navy will probably move toward using smaller 

carriers.8

Littoral Combat Ship. The Navy’s newest surface combatant, the first of which was ordered last year, is a small vessel designed to operate in coastal areas. The littoral combat ship—dubbed the Freedom class—has a displacement 

of about 2,800 tons (roughly the size of a large corvette).9

According to Navy officials, it is intended to be a 

focused-mission ship rather than a multimission or 

single-mission ship. It is being designed modularly so that 

it can be reconfigured fairly quickly to perform one of 

three main missions: locating and sinking quiet diesel 

submarines in crowded, noisy, shallow coastal waters; 

finding and neutralizing mines; and countering attacks 

by swarms of small, high-speed boats armed with missiles. The LCS would also be capable of performing a 

number of routine tasks, such as showing the flag, enforcing sanctions or pursuing other maritime interception 

operations, countering drug smugglers, supporting special-operations forces, engaging with allies, and providing 

transport within a theater of operations.10

Navy officials have characterized the LCS as a truck capable of carrying various cargoes. The truck—consisting of 

the ship’s hull, propulsion plant, crew quarters, and basic 

defensive combat systems—will be developed and acquired separately from its three associated mission packages. The operators of the ship and of the mission packages would train separately. When an LCS was slated to 

deploy, whichever mission package was called for would 

be put on the ship and sent to sea.11

Although the final design and cost of the LCS have not 

yet been determined, the 2006 shipbuilding plan calls for 

the Navy to buy 55 ships. Thus far, two contractor teams 

have submitted proposals to build the LCS, and the Navy 

will buy two of each to determine which team will build 

the rest. (The Navy could also decide to build both types 

in order to maintain competition in the program.) The 

first LCS was ordered in 2005 and is being built by a 

team led by Lockheed Martin. The Navy expects to order 

three more LCSs in 2006: another from Lockheed Martin and two built by a team led by General Dynamics. 

The Navy is determined to keep the costs of the littoral 

combat ship low so the service can procure them in large 

numbers. Specifically, it does not want the “truck” portion of the LCS system to cost more than $220 million 

apiece in 2005 dollars (or $235 million in 2007 dollars). 

However, the latest shipbuilding plan implies that the 

LCSs purchased through 2011 will have an average cost 

of around $300 million each just for the ships themselves. 

Limiting the cost of the mission modules—some of 

which are still in development and whose costs are uncertain—could also be problematic. Relying on the Navy’s 

budget submission, this report assumes that one LCS 

with two mission packages would cost an average of 

about $450 million. 

Observers have raised three key issues about the littoral 

combat ship: 

B Size. Different critics maintain that the LCS is either 

too small or too large. The Office of Force Transformation proposed several ideas for surface combatants 

that were one-third to one-30th the size of the LCS. 

Other analysts argue that the LCS will be too small to 

defend itself against missiles or larger surface combatants that it might encounter.12

7. Office of the Secretary of Defense, Office of Force Transformation, Alternative Fleet Architecture Design (January 31, 2005). 

8. Christopher J. Castelli, “Navy Secretary Anticipates ‘A New Navy’ 

with ‘Smaller Deck Carriers,’” Inside the Navy (March 7, 2005).

9. Corvettes are small, maneuverable, lightly armed warships 

(between the size of a patrol boat and a frigate) that various countries use for coastal duty.

10. Geoff Fein, “Navy Examining Potential Missions, Including 

MIO, for Littoral Combat Ship,” Defense Daily (February 23, 

2006).

11. See Richard R. Burgess, “Changes to Littoral Combat Ship Components May Speed Reassignments of the Multimission Vessel,” 

Sea Power (February 2006).

12. For a discussion of that issue, see Government Accountability 

Office, Defense Acquisitions: Plans Need to Allow Enough Time to 

Demonstrate Capability of First Littoral Combat Ship, GAO-05-255 

(March 2005).
18 OPTIONS FOR THE NAVY’S FUTURE FLEET

B Process. The Navy did not conduct a formal study to 

determine whether the LCS was the right ship to perform the missions of antimine, antisurface, and antisubmarine warfare before it decided to proceed with 

the program.13

B Logistical Support. As a relatively small ship, the LCS 

may experience more wear and tear from the sea than 

larger ships do. Although the Navy wants to keep a 

large number of LCSs forward deployed, its plans for 

supporting and maintaining the ships are not yet clear.

Zumwalt Class Destroyer. The next generation of large 

surface combatant, the DDG-1000 Zumwalt class destroyer—previously known as the DD(X)—is not intended primarily to replace a particular class of ship that 

is being retired. Instead, it is intended to introduce new 

technologies that the Navy views as essential to the design 

of its future warships. It is also intended to provide a capability that the fleet currently lacks: high-volume naval 

gunfire in support of troops on shore. The former Chief 

of Naval Operations declared that, “The DD(X) is critical to the Navy’s future. Our future cannot unfold without it. DD(X) is the heart of our Family of Ships.”14 The 

current Chief of Naval Operations has also strongly endorsed the Zumwalt. However, the program has also experienced a substantial increase in potential costs, delays 

in its schedule, and questions about the relevance of its 

mission.

The Zumwalt destroyer is intended to be a multimission 

ship, with an emphasis on land attack. Its main battery 

would consist of two 155-millimeter (mm) Advanced 

Gun Systems, each of which can fire rocket-assisted 

precision-guided projectiles up to 83 miles.15 The ship 

would also have a battery of 80 vertical launch system 

cells capable of firing various land-attack and self-defense 

missiles, a large helicopter hangar, and sophisticated radars and other combat systems. Together, those features 

would give the new destroyer more capability than existing Arleigh Burke destroyers have—with the exception of 

providing fleet air defense in open oceans. The Zumwalt 

could also operate boats or unmanned vehicles from a 

special boat ramp. The ship is expected to have a displacement of about 14,500 tons. It would be built by 

either Bath Iron Works, owned by General Dynamics, or 

Ingalls Shipbuilding, owned by Northrop Grumman.

Three new technologies are particularly important for the 

Zumwalt destroyer:

B The ship is being designed with an all-electric powerdistribution and propulsion system. If it works successfully, such a system will allow the Navy to divert 

power from propulsion to weapons and back again—

paving the way for the development of shipboard, 

electronically powered weapons such as long-range 

electromagnetic guns (which may be able to shoot 

nonexplosive projectiles at high speeds for more than 

200 miles) or lasers. The promise of being able to deploy such advanced weapons is far from being realized. 

But should they come to fruition, the Zumwalt might 

have the available space, weight allowance, and power 

system to accommodate them. 

B The destroyer would incorporate a new hull form, 

materials, conformal antennas (embedded directly in 

the skin of the ship), and other design features to give 

it a very small radar cross-section, as well as low magnetic, infrared, and acoustic signatures. 

B The Zumwalt is intended to have a high degree of 

automation that would allow it to be operated by a 

crew of 140 people (including the aviation detachment), about half that on an existing destroyer.

The Zumwalt program has had a troubled history. Its first 

incarnation was as the DD-21 land attack destroyer during the Clinton Administration. At that time, the Navy’s 

goal was to buy the first ship in 2004 and to bring the 

cost of the destroyer down to $1.1 billion apiece (in 2007 

dollars) by the fifth ship.16 In 2001, the Bush Administration canceled the DD-21 and immediately reconstituted it as the DD(X) program. For several years, the 

Navy anticipated that the first DD(X) would be purchased in 2004 and that the ships would cost $1.2 billion

13. See Ronald O’Rourke, Navy Littoral Combat Ship (LCS): Background and Issues for Congress, Report for Congress RS32105 

(Congressional Research Service, November 16, 2005).

14. Admiral Vern Clark quoted in Rear Admiral Mark Edwards, 

“Navy Destroyers from Bainbridge to DD(X): Fast Ships That Go 

in Harm’s Way,” Surface SITREP (newsletter of the Surface Navy 

Association), vol. 20, no. 4 (December 2004), p. 7.

15. Captain C. H. Goddard and Commander C. B. Marks, “DD(X) 

Navigates Uncharted Waters,” Proceedings, U.S. Naval Institute 

(January 2005), pp. 30-33. 16. In 1996 dollars, the cost goal was $750 million by the fifth ship.
CHAPTER TWO THE NAVY’S CURRENT PLAN FOR MODERNIZING THE FLEET 19

to $1.4 billion each.17 Under the 2006 shipbuilding plan, 

the Navy now envisions buying a total of seven Zumwalt 

destroyers, at an average cost of $2.8 billion. In contrast, 

CBO estimates that the average cost of the seven ships 

will be $3.8 billion each (see Table 2-2).18 The Navy 

plans to order the first two Zumwalts in 2007.

Some observers have questioned whether the principal 

mission of the new destroyer is still warranted. Although 

the ship’s centerpiece, its two advanced gun systems, 

would give the Navy the ability to provide sustained, 

high-volume fire support to troops ashore, that capability 

has not been in high demand in the United States’ past 

several conflicts. If the Zumwalt had been available, it 

would have been of no use against land-locked Afghanistan and of very little use against Iraq, where U.S. forces 

invaded from neighboring Kuwait and moved rapidly out 

of range of a Zumwalt’s guns. In the future, if U.S. forces 

do not have access to a base such as Kuwait and must perform an opposed amphibious landing from the sea, the 

new ship’s guns could prove valuable. But the United 

States has not conducted such a landing in more than half 

a century, although it has had opportunities to do so.19

CG(X) Cruiser. The third new surface combatant that the 

Navy is planning, a guided missile cruiser, would be 

geared toward providing air defense for the fleet as well as 

theater and national missile defense. Although the design 

of the CG(X) remains uncertain, the 2006 shipbuilding 

plan calls for buying 19 of them, beginning in 2011. 

Ships of that type are normally built by either Bath Iron 

Works or Ingalls Shipbuilding.

The new cruiser was originally expected to share the same 

hull, propulsion plant, and basic combat systems as the 

Zumwalt destroyer. In 2004, the Navy stated that the 

Table 2-2.

The Navy’s and CBO’s Estimates of the 

Costs of Major New Ships

(Billions of 2007 dollars)

Source: Congressional Budget Office.

a. The total amount of money spent on a ship program from 2006 

through 2035 divided by the total number of ships bought in 

that program.

b. Based on a briefing given by the Navy to CBO and the Congressional Research Service, February 10, 2006. 

c. CBO’s estimates are generally based on past relationships 

between cost and weight for individual types of ships. The estimates assume that inflation in the naval shipbuilding industry 

will continue to exceed inflation in other Department of Defense 

procurement programs (see Box 2-2 on page 29).

d. Because the Navy’s estimate for the CVN-21 program was 

higher than an estimate based on a historical relationship 

between cost and weight, CBO relied on the Navy’s estimate, 

adjusted for the higher level of inflation expected in the shipbuilding industry.

e. Estimates of average costs for large surface combatants are 

higher in this study than in testimony that CBO gave before the 

Projection Forces Subcommittee of the House Armed Services 

Committee in March because CBO assumed then that these 

ships would be built by a single shipyard. However, consistent 

with Congressional direction on splitting the DDG-1000 program between two yards and the Navy’s assumption that it will 

use two yards to build the CG(X), CBO changed its assumption 

for large surface combatants. Having two shipyards build a type 

of vessel raises the unit cost of the ships because of the additional overhead costs of supporting two yards rather than one.

17. At that time, CBO estimated that the DD(X) would have an average cost of $1.9 billion per ship (in 2003 dollars), based on a 

design of 16,000 tons and a total purchase of 24 ships. See Congressional Budget Office, Transforming the Navy’s Surface Combatant Force (March 2003).

18. See the statement of J. Michael Gilmore, Assistant Director for 

National Security, Congressional Budget Office, “The Navy’s 

DD(X) Destroyer Program,” before the Subcommittee on Projection Forces of the House Armed Services Committee, July 19, 

2005.

19. The most recent opposed amphibious landing by U.S. forces 

occurred at Inchon, South Korea, in 1950.

Program

CVN-21 Aircraft Carrier 9.4 9.6 d

DDG-1000 Zumwalt Destroyer 2.8 3.8

CG(X) Cruiser 2.7 3.9 e

DDG(X) Destroyer 

(Replacement for Arleigh Burke class) 1.9 2.7 e

Virginia Class Attack Submarine 2.1 2.7

SSBN(X) Ballistic Missile Submarine 3.1 6.1

(Replacement for Ohio class)

Amphibious Ships 1.4 2.3

Average per-Ship

Navyb CBOc

 Cost over the 

2006-2035 Perioda
20 OPTIONS FOR THE NAVY’S FUTURE FLEET

CG(X) would probably be a larger ship—perhaps on the 

order of 20,000 tons—with a variety of missile launchers 

suitable for handling different threats. More recently, 

some Navy officials have again stated that the Zumwalt 

and the CG(X) would share the same (now smaller) hull 

and basic systems.20

Specifications and requirements for the CG(X) are still 

not defined officially; thus, any estimate of its cost would 

be very preliminary. However, in light of the Navy’s desire 

to put more-sophisticated combat systems on the CG(X) 

than on the Zumwalt, average costs are likely to be higher 

for the cruiser than for the destroyer. For the purposes of 

this analysis, CBO assumed that the CG(X) would have a 

displacement of about 14,500 tons, the same as the Zumwalt. Consequently, CBO estimates that the first CG(X) 

could cost about $5 billion, with an average cost of about 

$3.9 billion over the 19-ship program. 

CBO assumed in this analysis that the cruiser would have 

a service life of 35 years and that its combat systems 

would be upgraded midway through that span. Alternatively, the Navy could consider more than one type of 

cruiser, depending on whether it needed all of its cruisers 

to have a high level of capability. The Navy could also decide to divide the CG(X)’s capabilities between cruisers 

and other ships.21

DDG(X) Future Guided Missile Destroyer. One of the 

largest uncertainties in the Navy’s 2006 shipbuilding plan 

is what a replacement for the existing Arleigh Burke 

(DDG-51) class destroyers would look like. The Navy 

has a requirement for 62 DDGs and thus would need to 

begin replacing retiring Arleigh Burkes in the 2020s. The 

service has not yet indicated what size and capabilities a 

new “DDG(X)” class might have, since the ship would 

not need to be purchased for at least 15 more years. In its 

2006 plan, the Navy assumed that those ships would cost 

no more than $1.9 billion apiece, but it provided no details or specifications to indicate how big the ship would 

be or what capabilities it would have. Presumably, however, it would be at least as capable as the DDG-51s that 

the Navy is building today. 

For this analysis, CBO assumed that the DDG(X) would 

have a displacement of about 11,000 tons, compared 

with about 9,200 tons for the latest Arleigh Burke destroyers. A new radar-evading hull form could add as 

much as 1,000 tons to the current ship’s design. CBO 

also allotted 800 tons for growth in the weight of other 

ship systems, as often occurs when new technologies are 

introduced. 

Judging from the historical cost-to-weight ratio of the Arleigh Burke class, CBO estimated that the first DDG(X) 

could cost about $4.1 billion. The average cost of the 

new destroyers would be about $2.7 billion if two ships 

were bought per year from separate shipyards. CBO did 

not estimate how many DDG(X)s the Navy would purchase in all because the end of the program would be well 

beyond the 30-year period of this analysis.

Virginia Class Submarine (SSN-774). The Navy’s new 

Virginia class of nuclear-powered attack submarine will 

replace the Los Angeles class, which was built in the 

1970s and 1980s. In development since the early 1990s, 

the first Virginia class submarine was ordered in 1998 

and commissioned in late 2004. Six more submarines 

were ordered through 2005, and the Navy plans to order 

another six (at a rate of one per year) through 2011. The 

submarines are being built jointly by Northrop Grumman’s Newport News shipyard and General Dynamics’s 

Electric Boat shipyard.

The Virginia class is the first ship to enter the battle force 

fleet with a design for the post-Cold War era. According 

to the Navy, its combat systems and weapons bays can be 

easily updated and changed as technology advances. The 

Virginia is also the quietest submarine in the world. Although it is capable of performing missions in the open 

ocean, its quietness and other capabilities make it far better suited to operating in littoral regions than its predecessors, the Los Angeles and Seawolf classes. Virginia class 

submarines have a displacement of 7,800 tons when fully 

submerged and an expected service life of 33 years.

Although the lead ship of the Virginia class remained on 

schedule throughout its construction, the costs of the 

program have risen substantially. Between 1995 and 

2004, the Navy’s estimate of those costs grew by 35 percent in real (inflation-adjusted) terms. Virginias now cost 

about $2.6 billion apiece.

20. See, for example, Chris Johnson, “Navy Surface Warfare Director 

Supports Using DD(X) Hull for CG(X)” Inside the Navy (May 1, 

2006).

21. Dave Ahearn, “Adm. Nathman: CG(X) Radar, Missiles Needn’t 

Be on Same Ship,” Defense Today (October 6, 2005).
CHAPTER TWO THE NAVY’S CURRENT PLAN FOR MODERNIZING THE FLEET 21

The Navy currently plans to build 30 Virginia class submarines, with the procurement rate rising to two per year 

in 2012 and beyond. However (as discussed in more 

detail below), the size of the attack submarine force will 

begin to fall substantially in 10 years because the Navy is 

unlikely to build Virginias fast enough to replace Los 

Angeles class submarines, which will begin to be retired 

in large numbers after 2015.

The principal criticism of the Virginia program has been 

its cost. In response to the rising unit (per-ship) cost of 

those submarines, the Navy and DoD are considering 

alternative approaches to provide undersea warfare capabilities in the future. The Navy, in conjunction with the 

Defense Advanced Research Projects Agency, is looking at 

concepts that could yield a nuclear-powered submarine 

about half the size of a Virginia, but with all of the same 

capabilities, for between two-thirds and three-quarters of 

the Virginia’s price tag. The main way to achieve that 

reduction in size and cost would be to use an all-electric 

drive system in which the drive shaft would be eliminated 

and replaced with small, podded motors mounted on the 

outside of the hull. Eliminating the drive shaft would save 

substantial space and (potentially) cost. 

At the same time, the Office of Force Transformation 

argues that the Navy should reexamine the value of 

diesel-electric submarines, particularly those with closed 

systems, known as air-independent propulsion, that allow 

them to stay submerged for two to four weeks at very 

slow speeds. (Nuclear-powered submarines, by contrast, 

can stay submerged for months at high speeds.) Such submarines would cost far less than a Virginia and might be 

better suited to littoral areas because they would be much 

smaller than their nuclear counterparts.22 Conversely, 

nuclear-powered submarines can operate far from U.S. 

shores for months at a time and can redeploy quickly 

when necessary. Diesel-electric submarines could not do 

that and would probably require the support of a mother 

ship to deploy to their operating areas overseas.

SSBN(X) Ballistic Missile Carrying Submarine. The first 

of the Navy’s 14 remaining Ohio class submarines, which 

carry Trident ballistic missiles, will reach the end of its 

42-year service life in 2027. If the Navy determines that it 

needs 14 SSBNs—as called for in the 313-ship requirement—it will have to start building replacements for 

those submarines in the early 2020s. Under the 2006 

shipbuilding plan, the first SSBN(X) would be purchased 

in 2022, with procurement continuing at a rate of at least 

one per year through 2035.

With production still more than 15 years away, the Navy 

does not have a program or ship design for replacing the 

Ohio class submarines. Some senior Navy officials have 

stated that the SSBN(X) could be a variant of the Virginia class attack submarine to take advantage of existing 

designs and engineering efforts.23 The technical feasibility of such an approach is uncertain, however. Although 

it would be possible to design and insert a ballistic missile 

section into a Virginia class submarine, the section could 

not be made large enough to accommodate existing D-5 

missiles and still allow the submarine’s crew to perform 

maintenance on the missile at sea, if necessary. Thus, a 

new SSBN design may be required to replace Ohio class 

submarines when they retire in the 2020s.24 However, 

that new design could incorporate some elements of the 

Virginia class, such as the reactor and bow section, to 

help reduce costs.

In its 2003 long-range shipbuilding report, the Navy assumed that the first SSBN(X) would cost about $5.5 billion, with succeeding submarines costing an average of 

$4.2 billion. However, that report assumed that the first 

Virginia class submarine would cost $3.8 billion (compared with an actual cost of $4.9 billion) and that succeeding Virginias would cost an average of $2.4 billion 

(the Navy is expecting to pay about $2.6 billion for the 

ninth Virginia). A corresponding increase in estimated 

costs for the SSBN(X) could result in an average cost of 

$4.6 billion for submarines after the first one. 

For an alternative, CBO assumed that a new SSBN(X) 

could be designed to carry 16 missiles, rather than the 24 

of the Ohio class, with a displacement of about 15,000 

tons, or nearly double that of the Virginia class. (Ohio 

class SSBNs are 2.4 times larger.) On the basis of the 

22. Christopher J. Castelli, “Defense Department Nudges Navy 

Toward Developing Diesel Submarines,” Inside the Navy (March 

7, 2005). Also see Robert A. Hamilton, “Fleet Studies Raise Prospect of Non-nuclear Submarines; Pentagon Office Backs More 

Boats for Less Cost,” The Day (New London, Conn.), March 2, 

2005.

23. Jason Ma, “Modified Virginia-Class Subs Eyed to Replace OhioClass SSBNs,” Inside the Navy (October 18, 2004).

24. The Navy apparently does not consider designing a new missile to 

fit a modified Virginia class submarine to be cost effective.
22 OPTIONS FOR THE NAVY’S FUTURE FLEET

price per thousand tons that the Navy is currently paying 

to build submarines, CBO estimated that a lead 

SSBN(X) of that size could cost around $9 billion. Succeeding submarines would cost about $4.9 billion each at 

today’s prices for labor and materials. However, because 

inflation in the shipbuilding industry is expected to outstrip general inflation (as discussed later in this chapter), 

the cost of the succeeding SSBN(X)s could be around $6 

billion apiece (in 2007 dollars) by the 2020s.

LPD-17 Amphibious Transport Dock. The Navy’s newest 

class of amphibious ships (which carry troops and equipment for Marine expeditionary forces) is the San Antonio 

(LPD-17) class amphibious transport dock.25 Development of the LPD-17 began in 1990, and construction of 

the first ship was authorized in 1996. Those ships are intended to replace the Austin class LPD-4 transport docks, 

which will reach the end of their notional 40-year service 

life in the next 10 years. Although the original program 

envisioned buying 12 LPD-17s, the Navy now plans to 

procure a total of nine. It will have ordered eight of those 

ships by the end of 2006 and plans to buy one more in 

2008. Most of the ships are being built by Northrop 

Grumman’s Avondale Shipyard.

The decision to reduce the total purchase of LPD-17s has 

been controversial. Members of Congress have written to 

the Navy to express their concern about the reduction, 

and Marine Commandant Michael Hagee has stated 

publicly that, “In my professional opinion, the absolute 

bare minimum is nine. I have to think we’re taking risks 

with nine. I would be much more comfortable with 10 

LPD-17s.”26 The Navy’s 313-ship requirement envisions 

10 LPD-17s, but the 2006 shipbuilding plan includes 

only nine.

The construction program for the LPD-17 has been a 

troubled one, leading to an increase in the ship’s cost. The 

1996 Selected Acquisition Report for the program estimated that 12 LPD-17s would cost a little more than 

$1 billion apiece, on average (in 2007 dollars). Eight 

years later, that unit cost had grown by more than 50 percent—to an average of about $1.6 billion per ship, CBO 

estimates.27

LHA-6 Amphibious Assault Ship. The LHA-6 class—formerly LHA(R)—is intended to replace the current aging 

LHA-1 Tarawa class of amphibious assault ships. It may 

eventually replace the LHD-1 Wasp class as well. Officially, the Navy has selected a design for only the first 

LHA-6, called Flight 0; the design for subsequent ships is 

still to be determined. According to the 2006 Future 

Years Defense Program, the first LHA-6 will be authorized in 2007, the second in 2010, and remaining ships 

after 2011. The ship will have a displacement of 45,000 

tons at full load or 30,000 tons at light load (without 

crew, materiel, weapons, or fuel). At that size, it will be 12 

percent larger than the latest amphibious assault ship, the 

LHD-8, which is now under construction. Ingalls Shipbuilding is likely to build the future LHA-6s.

Although various elements in the Navy and the Marine 

Corps would have preferred a larger and more capable 

ship, concerns about the affordability of the LHA-6 have 

caused the Navy to design the first ship as essentially a 

repeat of the LHD-8. However, instead of a docking well 

(which would allow it to transport and deploy landing 

craft that move large equipment to shore), it will have 

enhanced aviation capabilities.

According to the 2007 FYDP, the Navy has programmed 

$2.7 billion for the first LHA-6 and $3.5 billion for the 

second, implying a much larger and more capable design 

for the second ship. CBO estimates that if all of the 

LHA-6s had the same basic design as the first one (in 

other words, if the larger follow-on design was discarded), 

the ships would cost an average of about $2.7 billion each 

at current labor and materials costs. 

The Navy’s 2006 shipbuilding plan envisions buying only 

two LHA-6s for the amphibious forces. (Two more LHA6s would be bought, in 2011 and 2013, for the maritime 

prepositioning forces, as discussed below.) In the 2020s 

and early 2030s, six of the Navy’s existing LHD class 

ships would be replaced with a new LHD(X) design. 

CBO assumed that the LHD(X) would look very much 

like the LHA-6.

25. For more information about amphibious ships and their roles, see 

Congressional Budget Office, The Future of the Navy’s Amphibious 

and Maritime Prepositioning Forces (November 2004); and Ronald 

O’Rourke, Navy-Marine Corps Amphibious and Maritime Prepositioning Ship Programs: Background and Oversight Issues for Congress, 

CRS Report for Congress RL32513 (Congressional Research Service, August 5, 2004).

26. Jason Ma, “Hagee Prefers 10 LPD-17s, Declares Nine the ‘Absolute Bare Minimum,’” Inside the Navy (March 14, 2005).

27. For more about the cause of the cost growth, see Congressional 

Budget Office, The Future of the Navy’s Amphibious and Maritime 

Prepositioning Forces, pp. 17-18.
CHAPTER TWO THE NAVY’S CURRENT PLAN FOR MODERNIZING THE FLEET 23

The number of LHA-6s needed is directly related to the 

number of expeditionary strike groups that the Navy 

plans to have. Under the 313-ship requirement, the Navy 

would maintain nine expeditionary strike groups, each 

containing one LHA-6 or LHD class amphibious assault 

ship. The Navy now has or is building eight LHDs, one 

of which would be transferred to the MPF(F) squadron 

under the current plan. Thus, the Navy needs to buy only 

two LHA-6s in the near term. (The existing class of four 

LHAs is reaching the end of its service life and will be 

retired over the next few years.) 

If the Navy decided to change the future number of expeditionary strike groups or if it moved toward having 

larger numbers of small-deck aircraft carriers (as the

Deputy Secretary of Defense has suggested), the requirement for LHA-6s could increase. However, building a 

larger LHA-6—one capable of operating up to 30 Joint 

Strike Fighters—rather than building more CVN-21

aircraft carriers would increase the cost of the LHA-6 

substantially. 

Future Maritime Prepositioning Ships. The composition 

of the planned MPF(F) squadron has been one of the 

most uncertain elements of the Navy’s shipbuilding program in recent years. Originally, the Navy and Marine 

Corps envisioned designing and building new types of 

ships that would incorporate various capabilities and 

technologies considered essential for the sea-basing mission. In the summer of 2005, however, they agreed to 

mainly use existing designs for amphibious and support 

ships (slightly modified) to create a sea-basing squadron. 

The virtue of that approach is that it relies mainly on 

ships already being built and thus reduces the risks that 

are inherent in designing a new class of ships with a set of 

capabilities that have never before put to sea.28

According to a Navy briefing to the Congress, one 

MPF(F) squadron capable of deploying and sustaining a 

Marine expeditionary brigade would consist of:

B Two LHA-6s; 

B One LHD; 

B Three large, medium-speed roll-on/roll-off ships of a 

modified design; 

B Three T-AKE dry-cargo carriers; 

B Three mobile landing platforms (a new design); and 

B Two cargo ships from the existing maritime prepositioning squadrons.29

The LHD would come from the Navy’s inventory of amphibious ships, but the LHA-6s would be specially built 

for the MPF(F) squadron. Each squadron would also require a high-speed ship to transport the helicopters for an 

expeditionary brigade from the continental United States 

to the theater where the MPF(F) squadron was operating. 

The Navy estimates that such a squadron, including the 

high-speed ship, would cost $11.1 billion. CBO estimates a slightly higher cost: $13.0 billion.30

Under the 2006 shipbuilding plan, the Navy would purchase only one MPF(F) squadron—down from as many 

as three just two years ago. Reports suggest, however, that 

some senior officers in the Marine Corps would prefer to 

buy two MPF(F) squadrons.

Today, the Navy has three conventional maritime prepositioning squadrons (MPSs) that can provide materiel and 

initial sustainment for three Marine expeditionary brigades. It is not clear whether the Navy would continue to 

maintain any of those conventional squadrons once it 

began investing in MPF(F) versions. For instance, if the 

Navy bought two MPF(F) squadrons, would it maintain 

one conventional squadron with existing ships or with 

replacement cargo ships? The cargo ships in the current 

MPSs could serve the Military Sealift Command for 

decades to come, but ships in the Ready Reserve Fleet 

will need replacing over the next 20 years. When the 

Navy first proposed building three new MPF(F) squadrons, the MPS cargo ships were intended to replace the 

28. For example, the Analysis of Alternatives for the MPF(F) squadron, which was written by the Center for Naval Analyses, looked 

at a variety of alternatives to build the MPF(F) squadrons. Those 

alternatives varied from having each ship in the squadron designed 

with the same set of capabilities to building ships with morespecialized capabilities. Most of the ships in those alternatives 

would have been new designs.

29. Lieutenant General James A. Mattis, “Maritime Prepositioning 

Force (Future): Shipbuilding Requirements” (briefing by the 

Marine Corps Combat Development Command, June 2005).

30. See the statement of J. Michael Gilmore, Assistant Director, and 

Eric J. Labs, Principal Analyst, Congressional Budget Office, 

“Potential Costs of the Navy’s 2006 Shipbuilding Plan,” before 

the Subcommittee on Projection Forces of the House Armed Services Committee, March 30, 2006.
24 OPTIONS FOR THE NAVY’S FUTURE FLEET

aging ships in the Ready Reserve Fleet. The ultimate status of those ships will not be determined until final decisions are made about the MPF(F). Furthermore, some 

observers suggest that the Marine Corps is unlikely to 

have enough ground equipment to furnish more than 

two MPF(F) or conventional squadrons in the future.

Support Ships. The Navy currently has about 50 support 

ships of various types, divided into two categories. The 

Combat Logistics Force (CLF) comprises 29 ships that 

are responsible for keeping deployed ships resupplied. 

They include triple-product ships, which provide fuel, 

ammunition, and dry goods (such as food) to carrier 

strike groups. The CLF also includes vessels that keep the 

triple-product ships and others resupplied, such as oilers 

and ammunition ships. 

The Navy’s remaining support ships, which number 17, 

serve various auxiliary functions. They include tenders, 

command ships, ocean-surveillance ships, salvage ships, 

and oceangoing tugs. 

Under the 2006 shipbuilding plan, the Navy would 

maintain 30 vessels in the Combat Logistics Force and 20 

other support ships. As ammunition ships and combat 

stores ships in the CLF are retired in the next decade, the 

Navy would not replace them on a one-for-one basis. 

Rather, those ships’ roles would be filled by a new class of 

11 Lewis and Clark dual-product (ammunition and dry 

cargo) vessels called T-AKEs.31 In the 2020s, the Navy 

would buy 15 oilers for the CLF as well as four tripleproduct ships to replace the four now in the force that 

would reach the end of their service life at that time. 

With respect to other support ships, the Navy’s plan 

would buy two command ships in 2013 and 2014; four 

fleet ocean tugs between 2013 and 2016; and four oceansurveillance ships, four salvage ships, and two submarine 

tenders in the 2020s. 

Current and Planned Major Aircraft Programs

Along with 313 battle force ships, the Navy’s current 

requirements call for a total of 4,000 aircraft. Most of 

those aircraft are used by the 10 air wings that deploy on 

aircraft carriers and by the reserve air wing (used primarily for training) that does not deploy.

The Navy plans to finish developing and acquiring several new types of aircraft over the next 20 years, including 

two strike fighters, one electronic warfare plane, a multimission support aircraft, and two large troop and cargo 

lift aircraft for the Marine Corps. In addition, the Navy 

intends to produce two or three new types of unmanned 

aircraft and two kinds of training aircraft. It also plans to 

upgrade many of its existing planes and helicopters.

F/A-18E/F Super Hornet. The multimission strike fighter 

Super Hornet began development in the 1990s as a successor to earlier models of the F/A-18 aircraft. The E/F 

version entered production in 1997. The Navy has 

bought 352 of the planes so far and hopes eventually to 

have 462. Under the Navy’s current plan, the last F/A18E/F would be purchased in 2011 and would enter the 

inventory in 2013. 

With the retirement of the F-14 Tomcat, the Super Hornet will be the backbone of the Navy’s carrier aviation for 

the next 10 to 15 years. At that point, the Navy intends 

to purchase large numbers of Joint Strike Fighters (JSFs) 

to replace earlier models of the F/A-18. (Currently, the 

Navy has 691 of those older aircraft.)

F-35 Joint Strike Fighter. Besides buying the F/A-18E/F, 

the Navy is participating with the Air Force in developing 

and building a family of strike aircraft that will have a 

high degree of commonality. One version of the Joint 

Strike Fighter would be designed to operate from aircraft 

carriers and would replace the Navy’s earlier-model F/A18s. Another version, with short takeoff and vertical 

landing (STOVL) capabilities, would replace the Marine 

Corps’s AV-8B Harriers and F/A-18C/D Hornets. 

According to the President’s budget request for 2007, the 

Navy expects to buy about 680 JSFs, although it has not 

yet determined the final distribution between the carrier 

version and the STOVL version. The Navy plans to begin 

buying those aircraft in 2008, starting with the Marine 

Corps version. Under current plans, production would 

increase to 50 JSFs per year by 2015 and would continue 

until 2024. For this analysis, CBO assumed that the 

Navy would need to buy another 400 of the JSF (or some 

other new aircraft) between 2025 and 2035 to maintain 

its inventory.

F/A-18G Growler. The 10 squadrons of EA-6B electronic 

attack aircraft associated with the Navy’s carrier air wings 

are reaching the end of their nominal service life. To re31. The T- in a ship name denotes that the vessel is operated by the 

Military Sealift Command.
CHAPTER TWO THE NAVY’S CURRENT PLAN FOR MODERNIZING THE FLEET 25

place them, the Navy plans to use a variant of the F/A18E/F airframe, designated G and named the Growler. 

Current plans call for buying the first four Growlers in 

2006, with a total goal of 90 aircraft.

The Marine Corps has not yet decided what aircraft will 

replace its squadrons of EA-6Bs. A variant of the Joint 

Strike Fighter appears to be the most likely candidate.

Multimission Maritime Aircraft. In the next decade, the 

Navy plans to replace the P-3 aircraft used by its landbased reconnaissance squadrons with about 100 new 

Multimission Maritime Aircraft (MMA). Like the P-3, 

the MMA will be first and foremost an intelligence collector, focusing on antisubmarine and antisurface warfare. However, it will also be armed in case it needs to 

engage the various threats that it detects. The MMA, 

which is based on the airframe of the Boeing 737, is 

expected to perform those missions through 2035.

V-22 Osprey. The V-22 tilt-rotor aircraft has been in 

development since the late 1980s as a replacement for the 

Navy’s fleet of medium-lift helicopters. The program has 

experienced cost overruns and several crashes. However, 

the Navy maintains that problems with the aircraft have 

been solved and that the service will ramp up to full-rate 

production by 2009. The Navy’s goal is to acquire a total 

of about 400 V-22s, including those needed for maintenance and training purposes. 

CH-53K. The current fleet of heavy-lift helicopters will 

reach the end of its nominal service life in the next decade. After considering many different replacements, the 

Navy and Marine Corps have decided to buy a new, upgraded version of the CH-53 heavy-left helicopter, which 

will be capable of flying farther and with larger loads than 

current CH-53s can. CBO assumed that the first aircraft 

would be purchased in 2014, with a total objective of 

156.

Budgetary Implications of the

Navy’s Plan

Assessing the resources that the Navy would need to carry 

out its latest modernization plan requires dealing with 

uncertainty about the design of numerous ships, particularly the future ballistic missile submarine, guided missile 

cruiser, and guided missile destroyer. Even with that 

uncertainty, however, CBO’s analysis indicates that the 

Navy’s plan will cost substantially more on an annual 

basis than the service has spent on battle force ships since 

the end of the Cold War.

The Navy’s Estimate of the Costs of the 2006 

Shipbuilding Plan

In its February report to the Congress, the Navy stated 

that building all of the ships it requires over the next three 

decades would cost an average of $13.4 billion per year in 

2005 dollars—or $14.4 billion in 2007 dollars—for newship construction alone. Refuelings of nuclear-powered 

vessels would add about $1 billion annually to that 

amount. The resulting figure of about $15.5 billion per 

year for new-ship construction and nuclear refuelings is 

about 30 percent higher than what the Navy spent on 

those two areas between 2000 and 2005. Moreover, the 

Navy did not indicate how much mission modules for the 

littoral combat ship or modernizations of existing surface 

combatants could add to that total cost.

The Navy assumed that its total obligational authority—

the budgetary top line—would increase at the same rate 

of inflation as DoD programs overall. In other words, the 

Navy assumed no real growth in its budget for the next 

30 years. To be able to devote a higher proportion of that 

budget to shipbuilding than it has recently, the Navy 

made three key assumptions:

B That spending on operations and maintenance in the 

Navy’s accounts would grow only at the rate of inflation;

B That spending on research and development—which 

hit a historical high of about $19 billion in 2006—

would fall by $4 billion or $5 billion and remain at 

that level through the next 30 years; and

B That any increase in pay and benefits for Navy personnel beyond the general rate of inflation would be offset 

by reductions in the number of personnel (the Navy’s 

end strength).

In addition, senior Navy leaders have stated that to pay 

for all of the ships in the current plan, they would have to 

meet strict cost goals for major types of ships. In some 

cases, those targets would require the Navy to reduce the 

costs of major classes of ships already in production; in 

other cases, they would allow little or no growth in the 

costs of prospective ships relative to the costs of the ships 

they would replace. 
26 OPTIONS FOR THE NAVY’S FUTURE FLEET

Specifically, to build two submarines a year starting in 

2012, the cost per vessel would have to fall from about 

$2.6 billion today to $2.1 billion, the Navy says.32 The 

cost goal for next-generation ballistic missile submarines 

is $3.0 billion each, which is just 11 percent more than 

Virginia class attack submarines cost today, even though 

ballistic missile submarines are typically much larger than 

attack submarines. (The current Ohio class SSBNs, for 

example, are more than twice as large as Virginias.) The 

goal for new surface combatants—in particular, the replacement for the Arleigh Burke class destroyer—is a cost 

of no more than $1.9 billion apiece.33 And the target for 

amphibious ships is an average cost of no more than $1.4 

billion each, compared with $1.4 billion to $2.6 billion 

for amphibious ships being built today. 

The one exception to the Navy’s strict targets is the cost 

goal for CVN-21 class aircraft carriers: an average of $9.4 

billion apiece. In comparison, the Navy expects the first 

CVN-21 to cost $8.1 billion, excluding about $2.4 billion for the sort of nonrecurring detail design that is usually associated with the first ship of a new class. 

The Navy plans to pursue aggressive cost-cutting efforts 

to reduce the price tags of ships now being designed or 

built, including the Zumwalt class destroyer and the Virginia class attack submarine—both of which, the Navy is 

projecting, will cost more than their goals for at least the 

next five years. For ships that would be built later, the 

Navy derived its cost targets by fixing the proportion of 

the shipbuilding budget that could be devoted to a particular category of ships. Thus, those targets are not based 

on a specific design, size, or set of capabilities.

CBO’s Estimate of the Costs and Implications of the 

Navy’s Plan

The 2006 shipbuilding plan envisions that the Navy will 

buy a total of 275 ships over the 2006-2035 period—an 

average of about nine per year. CBO estimates that those 

purchases would require an average annual shipbuilding 

budget of about $19.5 billion, compared with the Navy’s 

estimate of a little more than $14.4 billion. With refuelings of nuclear-powered aircraft carriers and submarines, 

mission modules for littoral combat ships, and modernization of cruisers and destroyers included, the Navy’s 

ship procurement costs under the 2006 plan would average $21.6 billion per year through 2035, CBO estimates. 

(For more details about how CBO estimated construction costs for ships and aircraft, see Box 2-1.)

The size of the battle force fleet would initially rise under 

the Navy’s plan as the first 55 littoral combat ships 

entered the inventory over the next 20 years. The fleet 

would peak at 330 ships in 2019 and then gradually 

decline to 294 by 2035 (see Figure 2-1 on page 14). 

The Navy would experience a lull in annual ship purchases between 2017 and 2021 under the current plan. 

That procurement lull would result directly from buying 

and deploying large numbers of LCSs through 2016 and 

then not needing to purchase many ships until 2022. By 

the early 2020s, however, the Navy would have to begin 

buying replacements for Arleigh Burke class destroyers 

that reached the end of their nominal 35-year service life. 

In addition, as noted earlier, various support and amphibious ships would need to be replaced in the 2020s. By the 

2030s, LCSs would also need replacing.

The 2006 shipbuilding plan would not meet all of the 

Navy’s stated requirements for two important categories 

of ships: submarines and large surface combatants. The 

313-ship requirement includes 48 attack submarines, 

four guided missile submarines, and 88 cruisers and 

destroyers. Under the shipbuilding plan, however, the 

Navy would increase its construction of attack submarines to two per year in 2012 and continue that rate 

through 2028, after which it would build two SSNs every 

even year and one every odd year. That rate would cause 

the number of attack and guided missile submarines to 

fall below 52 beginning in 2020 (see Figure 2-2). Moreover, under the Navy’s plan, the four guided missile submarines would not be replaced when they reached the 

end of their service life in the 2020s. 

Similarly, the 2006 shipbuilding plan would begin replacing Arleigh Burke class destroyers in 2023 at a rate of two 

per year. As a result, the cruiser and destroyer force would 

fall below the 88-ship requirement starting in 2028 and 

would not recover within the 30-year time frame of the 

32. In a briefing to CBO and the Congressional Research Service, the 

Navy presented its cost goals in 2005 dollars. For the purposes of 

this analysis, CBO inflated them to 2007 dollars.

33. Procuring a new Arleigh Burke class destroyer today would cost 

$1.8 billion (in 2007 dollars) at a rate of one per year or $1.4 billion each at a rate of two per year. 
CHAPTER TWO THE NAVY’S CURRENT PLAN FOR MODERNIZING THE FLEET 27

Navy’s report. By 2035, that force would number 73 

ships.34

Fully funding the 313-ship requirement so that the number of attack submarines and large surface combatants did 

not fall substantially below what the Navy says it needs 

would cost an average of $21.7 billion per year for newship construction, CBO estimates. The average annual 

cost would rise to $23.8 billion with nuclear refuelings, 

LCS mission modules, and surface combatant modernizations included.35

Overall, CBO estimates that the Navy’s shipbuilding programs would cost $665 billion over 30 years, compared 

with a total of $466 billion under the Navy’s assumptions 

and cost goals. The difference of about $200 billion is 

accounted for as follows:

B 30 percent by large surface combatants,

B 24 percent by ballistic missile submarines,

B 23 percent by attack submarines,

B 8 percent by amphibious or MPF(F) ships,

B 8 percent by aircraft carriers,

B 3 percent by littoral combat ships, and

B 2 percent by support ships.

Box 2-1.

Developing Cost Estimates for Navy Ships and Aircraft

To estimate the costs of ships that are already under 

construction, the Congressional Budget Office 

(CBO) relied on the Navy’s cost estimates, adjusted 

for the real (inflation-adjusted) growth that the naval 

shipbuilding industry has been experiencing (see Box 

2-2 on page 29). For ships not yet under construction, CBO relied mainly on a cost-per-thousand-tons 

methodology, using current or historical analogies for 

future ship programs. For example, in developing an 

estimate for the lead Zumwalt class destroyer, CG(X) 

cruiser, and DDG(X) destroyer, CBO used the lead 

Arleigh Burke (DDG-51) class destroyer and Ticonderoga (CG-47) class cruiser as analogies. CBO 

assumed that the first ship of each new class would 

have about the same cost per thousand tons as the 

DDG-51 or CG-47, adjusted for inflation. CBO 

estimated the cost of succeeding ships in those new 

classes on the basis of past patterns in how the cost 

per ship declines as more are built. That cost is based 

on lightship displacement for ships or Condition A 

displacement for submarines (the weight of the vessels themselves without their crew, materiel, weapons, 

and fuel). 

The one exception to that approach for future ships 

involved the CVN-21 class of aircraft carriers now 

being designed. Relying on historical relationships 

between cost and weight for aircraft carriers would 

result in a cost estimate for the first ship of that class 

that was less than the Navy’s estimate. Instead, as it 

did with ships under construction, CBO used the 

Navy’s estimate for the CVN-21 in this analysis, 

adjusting that estimate for real growth in naval shipbuilding costs.

To estimate the costs of Navy aircraft programs, CBO 

generally relied on the Navy’s estimates as presented 

in the Selected Acquisition Reports sent to the Congress each year. However, those estimates exclude 

potential cost growth that similar aircraft programs 

have experienced in the past. If such cost growth were 

included, the alternative modernization plans examined in this analysis would either cost more or involve 

the purchase of fewer ships and aircraft.

34. If the construction rate of two surface combatants per year was 

maintained indefinitely, the Navy would eventually achieve a 

steady-state level of 70 destroyers and cruisers, compared with a 

total requirement of 88.

35. CBO’s estimates include outfitting and postdelivery costs. It is not 

clear whether the Navy’s cost targets include those items.
28 OPTIONS FOR THE NAVY’S FUTURE FLEET

Figure 2-2.

Inventory of Submarines, Cruisers, and Destroyers Under the Navy’s 2006

Shipbuilding Plan

Source: Congressional Budget Office.

Assumptions About Inflation in Shipbuilding

CBO’s estimate of the costs of the Navy’s shipbuilding 

programs includes some specific assumptions about price 

increases in the ship construction industry. An analysis 

that the Navy provided to CBO indicates that over the 

next five years, annual inflation is expected to be about 

1.3 percentage points higher, on average, for that industry than for DoD’s procurement programs overall. Likewise, for the past 10 years, actual price increases for naval 

ships have been about 1.7 percent higher per year than 

for overall DoD procurement.

CBO’s estimates incorporate that real price growth experienced by naval shipbuilding. CBO assumed that increases in ship construction costs would continue to outpace increases in DoD’s overall procurement costs for the 

next 20 years. As a result, a ship that cost $2.5 billion to 

build in 2007 would cost $3.0 billion (in 2007 dollars) to 

build in 2020. After 20 years, shipbuilding inflation was 

assumed to subside to the overall level of DoD procurement inflation. (For more details, see Box 2-2.)

2005 2010 2015 2020 2025 2030 2035

0

10

20

30

40

50

60

70

80

Requirement in the Navy's Plan

Seawolf

(SSN-21)

Improved Los Angeles (SSN-688I)

Los Angeles (SSN-688)

Ohio (SSGN-726)

Improved Virginia

Virginia (SSN-774)

Attack Submarines (SSNs) and Guided Missile Submarines (SSGNs)

2005 2010 2015 2020 2025 2030 2035

0

10

20

30

40

50

60

70

80

90

100 Cruisers (CGs) and Destroyers (DDGs)

Arleigh Burke Flight I/II (DDG-51)

Arleigh Burke Flight IIA (DDG-79) DDG(X)

Requirement in the Navy's Plan

Ticonderoga (CG-47) CG(X)

Zumwalt

(DDG-1000)
CHAPTER TWO THE NAVY’S CURRENT PLAN FOR MODERNIZING THE FLEET 29

Box 2-2.

The Treatment of Inflation in Estimating Future Shipbuilding Costs

The Department of Defense (DoD) Comptroller 

publishes annual forecasts of price increases for each 

of the major defense appropriation accounts: military 

personnel, operations and maintenance, procurement, and so on. The military services use those 

inflation forecasts (known as “inflators”) to estimate 

their funding requirements for the upcoming budget 

year and the five subsequent years spanned by the 

Future Years Defense Program.

Within the Department of the Navy, the Naval Sea 

Systems Command (NAVSEA) manages ship procurement. NAVSEA has argued that prices for the 

labor and materials used in ship construction increase 

at faster rates than the DoD Comptroller’s procurement inflator. NAVSEA has documented such excess 

inflation for the past 10 years and expects it to continue in the future. Excess inflation is especially problematic for ship construction because a nuclearpowered submarine or aircraft carrier may take as 

long as seven years to build. Excess inflation compounds over that period, so the costs in the final year 

of construction may be considerably higher than 

would be forecast using the standard procurement 

inflator.

To avoid underfunding future ship construction, 

NAVSEA has received permission from the DoD 

Comptroller to incorporate more-rapid inflation into 

its plans than the standard procurement inflator 

would imply. NAVSEA has developed specific inflation forecasts for each of the six major commercial 

shipyards that build naval vessels. Those forecasts 

reflect the increases in overhead rates that each shipyard has negotiated with NAVSEA as well as the pay 

raises that each shipyard has negotiated with its local 

labor unions. NAVSEA has not provided those shipyard-specific inflation forecasts to the Congressional 

Budget Office (CBO). However, the forecasts are not 

necessarily appropriate for CBO’s analysis, because 

most ship classes can be built by more than one 

shipyard.

Instead, for the cost estimates in this analysis, CBO 

applied a weighted-average inflation forecast that 

reflects overall inflation in the shipbuilding industry. 

That weighted-average forecast exceeds DoD’s standard procurement inflator by varying amounts in 

each year through 2025. On average, it is 1.3 percentage points higher per year than DoD’s standard 

inflator through 2020, then declines to equal the 

standard inflator by 2025. Those increases compound to make ship construction costs about 22 percent higher by 2025 than DoD’s standard inflator 

would predict. 

Beyond 2025, CBO assumes that excess inflation will 

disappear and that shipbuilding costs will rise at the 

same rate as DoD’s overall procurement account. In 

the absence of that assumption, the Navy’s ship construction account would make up an ever-increasing 

and implausibly large share of the Navy’s total budget 

and of DoD’s overall procurement account. CBO’s 

assumption gives the Navy almost 20 years to develop 

contractual, industrial, technological, or other mechanisms to control the growth of shipbuilding costs.

CBO estimated the annual costs of ship construction 

through 2035 in constant (2007) dollars, deflated by 

the DoD Comptroller’s procurement inflation index. 

Thus, those estimates incorporate the real growth 

that naval ship programs have been experiencing. For 

ship classes that are procured in fairly constant annual amounts, costs tend to increase over time because ship construction costs rise more rapidly than 

the DoD index that is used to deflate them to constant dollars. (A mitigating factor is that annual costs 

may tend to decline throughout the life of a ship class 

because of learning-curve effects: shipyards may 

improve their production techniques or negotiate 

more-favorable contracts with suppliers as they build 

successive ships of the same class.) CBO also computed average annual construction costs for the years 

over which each class of ship is assumed to be procured (truncated, if necessary, at the end of the analysis period in 2035). Those average construction costs 

embody the assumption of real cost growth over the 

duration of each procurement program.
30 OPTIONS FOR THE NAVY’S FUTURE FLEET

Shortfall in Ship Construction Relative to

Steady-State Levels

Using the Navy’s ship inflation index, CBO calculated 

that the service spent an average of $10 billion annually 

between 1993 and 2005 to purchase an average of 5.8 

ships per year.36 Those amounts were far below the levels 

that would be needed to indefinitely sustain a fleet of 313 

battle force ships. Keeping the fleet at that size over 35 

years (the average service life of the fleet) would require 

buying ships at a rate of 9.2 per year. Based on the prices 

of ships now or expected soon to be under construction, 

those purchases would require an average shipbuilding 

budget of $19.5 billion per year. 

If, instead, ship procurement funding continued at the 

level it averaged between 2000 and 2005—$11.7 billion 

annually—the Navy would have purchased enough ships 

by 2028 (the end of the 35-year period that began in 

1993) to sustain a fleet of about 175 ships. Thus, it 

would have a cumulative 35-year shortfall of 138 ships 

relative to the 313-ship requirement.37

Total Procurement and Operating Costs for Navy 

Ships and Aircraft

Besides ship construction costs, which are the focus of 

this study, CBO estimated the amount of money necessary to carry out the Navy’s aircraft programs and to operate its planned fleets of ships and aircraft. 

Today, direct operation and support (O&S) costs for the 

Navy’s battle force ships total about $14 billion per year, 

CBO estimated using information in the Navy’s Visibility 

and Management of Operating and Support Costs 

(VAMOSC) database.38 Under the 2006 shipbuilding 

plan, annual direct O&S costs would decline to $13.1 

billion by 2035. That reduction would occur because 

ships that were less expensive to operate would substitute 

for ships with higher operating costs. For example, the littoral combat ship, which would be introduced in large 

numbers under the Navy’s plan, is likely to be cheaper to 

operate than other, larger classes of ships whose numbers 

would be cut under the plan, such as amphibious ships or 

submarines. In addition, new classes of ship such as the 

Zumwalt, CG(X), and CVN-21 are intended to have 

smaller crew sizes, and thus lower operating costs, than 

their predecessors. Over the entire 2006-2035 period, 

direct O&S costs for the battle force fleet would average 

$14.3 billion per year. 

Procuring the aircraft implied by the 2006 plan would 

cost about $7.5 billion annually, on average, and operating and maintaining naval aircraft would cost another 

$9.2 billion a year, CBO estimates.39 As it did with ships, 

CBO relied on data from the VAMOSC database to calculate direct O&S costs for the aircraft covered by this 

analysis.

In all, then, ship and aircraft purchases and operation and 

support costs under the Navy’s plan would average about 

$53 billion per year between 2006 and 2035, CBO estimates. By comparison, the Navy spent a total average of 

about $43 billion annually on those cost categories from 

2000 to 2005 (see Figure 2-3).

36. CBO chose the date of 1993 because it marked the beginning of 

the post-Cold War era of relatively low shipbuilding.

37. The cumulative shortfall from 1993 to the present is about 40 

ships relative to the 313-ship force.

38. Direct operation and support costs are those directly related to the 

number of ships or aircraft in the fleet, such as costs for fuel, supplies, and compensation of personnel.

39. The procurement estimate excludes several of the Navy’s cost categories: modifications of aircraft, spares and repair parts, and aircraft support equipment and facilities.
CHAPTER TWO THE NAVY’S CURRENT PLAN FOR MODERNIZING THE FLEET 31

Figure 2-3.

Ship and Aircraft Costs Under the Navy’s 2006 Shipbuilding Plan

(Billions of 2007 dollars)

Source: Congressional Budget Office.

Notes: O&S = direct operation and support costs (those directly related to the number of ships or aircraft in the fleet, such as costs for fuel, 

supplies, and compensation of personnel).

Procurement costs for 2006 exclude supplemental funding related to Hurricane Katrina.

2005 2010 2015 2020 2025 2030 2035

0

10

20

30

40

50

60

70

80

Total Average for 2000 to 2005

Ship Procurement Average for 2000 to 2005

Ship Procurement

Aircraft Procurement

Ship O&S

Aircraft O&S

CHAPTER

3

Lower-Cost Alternatives to the

Navy’s Modernization Plan

As Chapter 2 described, the Navy has set strict 

cost goals for itself to execute its 2006 plan for shipbuilding. Nevertheless, the Congressional Budget Office estimates that the Navy would need a substantial funding 

increase to carry out its current plan. To illustrate ways in 

which the Navy could modernize its fleet of ships and aircraft without an increase in funding (other than for inflation), CBO constructed five alternative approaches that 

would cost roughly the same amount as the Navy spent 

on procurement and operations and support from 2000 

to 2005—about $43 billion per year (in 2007 dollars).1

All of the alternatives would result in a smaller Navy than 

exists today (see Table 3-1). In several instances, however, 

those smaller fleets would be more capable than the current force by some measures.

The first approach would reduce the Navy’s various ship 

programs by roughly equal percentages to meet the budgetary constraints assumed in this analysis. The other 

four options would each emphasize a different area of 

naval warfare—surface combatants, submarines, aircraft 

carriers, or amphibious warfare and maritime prepositioning forces—at the expense of others. Those options 

illustrate the trade-offs that would have to be made if the 

Navy favored one category of ship at the expense of all 

others. CBO chose the alternatives to show the potential 

impact on different components of the fleet if large and 

sustained increases in funding for ship construction do 

not occur. 

This chapter describes in detail the different force structures associated with the five options. The next chapter 

uses various measures of capability to compare those 

alternatives with the Navy’s 2006 shipbuilding plan and 

with the current fleet.

Because this analysis is structured around potential resource constraints, CBO developed the options by focusing on planned ship programs rather than on different 

scenarios for the future security environment. However, 

this chapter discusses qualitatively how suited the alternatives would be to coping with the potential future threats 

described in Chapter 1.

CBO made several assumptions for all of the options in 

this analysis:

B Very few ships would be retired before the end of their 

notional service life. (That assumption is at odds with 

past practice. Historically, the Navy has tended to 

retire ships, especially surface combatants, before the 

end of their service life, mainly for budgetary reasons.) 

B Arleigh Burke class destroyers would be modernized to 

ensure a service life of 35 years. (Thus, when an option reduces the number of DDG-51s, it does so by 

not purchasing replacements rather than by retiring 

Arleigh Burkes before they reach the 35-year mark.)

1. The five options are about equally costly (given the constraints of 

having to purchase whole numbers of ships and aircraft) after 

accounting for the fact that shipbuilding costs are expected to 

grow 1.3 percentage points faster per year, on average, than 

defense procurement programs overall for the next two decades. 

An alternative presentation would account not only for the real 

growth in shipbuilding costs but also for the time value of 

money—for example, by discounting future costs along the lines 

suggested in the Office of Management and Budget’s Circular A94. However, the five options would still have roughly equal costs 

even if their costs were discounted and expressed as a single 

present value. The reason is that all of the options would procure 

ships on a relatively smooth schedule throughout the 30-year 

period of the analysis. Discounting would make a substantial difference only if some of the options were front-loaded (buying 

most of the ships in the early years) and others were back-loaded 

(buying most of the ships in the later years). In that case, discounting would favor the back-loaded options, allowing them to 

buy additional ships while maintaining a roughly equal present 

value.
34 OPTIONS FOR THE NAVY’S FUTURE FLEET

Table 3-1.

The Alternative Force Structures Examined in CBO’s Analysis

Continued

n.a. c

7 7 8 11 7 12 11

38 28 31 38 38 49 62

5 7 0 0 0 07

11 19 0 8 0 23 19

0 0 0 0 0 30 0

40 82 55 40 55 0 55

support ships 0 0 0 0 7 n.a. n.a.

35 30 55 30 30 53 48

10 10 10 10 10 14 14

0 0 4 0 0 44

7 6 6 6 9 11 9

8 7 7 7 10 12 10

0 0 0 0 9 12 12

12 (1) 0 0 0 24 (2) 0 12 (1)

25 27 21 21 26 32 30

13 10 10 10 16 33 20 ____ ____ ____ ____ ____ ____ ____

Total 211 233 207 181 241 285 313

The new types

For an Equal Amount of Annual Funding ($43 billion in 2007 dollarsb), 

submarines

The same

Surface Combatants

operations

over the 

mix of carriers and 

Current

Fleeta

55 attack 11 aircraft

Option 3 Option 4 Option 5

capabilities 

With This Steady-State Battle Force Fleet:d

long term

cruisers, support onshore

planned but

fewer ships

combat ships

now planned

from the sea

Requirement

Memorandum:

Submarines

as currently

Navy's

Aircraft Carriers

capability to

DDG-51s/DDG(X)s

DDG-1000s

CGs/CG(X)s

FFGs

LPD-17 fireAmphibious Ships

MPF(F) Ships 

LCSs

Support Ships

(Squadrons)

SSNs

SSBNs

SSGNs

LHDs/LHA-6s

LPD-4s/LPD-17s

LSDs/LSD(X)s

Combat Logistics Force

long term

 (sea basing)

313-Ship

the Navy Could Have One of the Following:

10 air wings

over the 

Option 1 Option 2

A robust

of destroyers,

and littoral 
CHAPTER THREE LOWER-COST ALTERNATIVES TO THE NAVY’S MODERNIZATION PLAN 35

Table 3-1.

Continued

Source: Congressional Budget Office.

Note: n.a. = not applicable; DDG-51 = Arleigh Burke class destroyer; DDG(X) = future replacement for Arleigh Burke class destroyers; 

DDG-1000 = Zumwalt class destroyer (formerly the DD(X)); CG = guided missile cruiser; CG(X) = future guided missile cruiser; 

FFG = guided missile frigate; LCS = littoral combat ship; LPD-17 = San Antonio class amphibious transport dock; SSN = attack submarine; SSBN = ballistic missile submarine; SSGN = guided missile submarine; MPF(F) = Maritime Prepositioning Force (Future).

a. At the beginning of 2006.

b. $43 billion is the average yearly amount that the Navy spent on procurement and operations and support for ships and aircraft between 

2000 and 2005.

c. The Navy’s shipbuilding plan would require average annual funding of about $53 billion over the next 30 years, CBO estimates.

d. The steady-state battle force fleet is the fleet that could be sustained in the long term (beyond 2035) if the funding level and procurement 

approaches of the various options were continued indefinitely.

B The Navy would employ a rotational crewing concept 

for all of its destroyers and new cruisers by 2012. (The 

Navy’s current plan is to use rotational crewing only 

on its future DDG-1000 Zumwalt destroyers and littoral combat ships, in addition to maintaining the 

long-standing dual-crew system for ballistic missile 

submarines.)2

B The Navy would continue to base a carrier strike 

group and an expeditionary strike group in Japan 

through 2035. 

B Nine attack submarines would be based in Guam by 

2012. (The Navy currently has three submarines in 

Guam and is not planning to increase that number.)3

B The Navy would retain the Fleet Response Plan, 

which is intended to improve crisis response by keeping certain ships in a higher average state of readiness.

B The size and composition of the Marine Corps’s air 

and ground units would remain unchanged.

B Each option would buy 10 new ballistic missile submarines rather than the Navy’s requirement of 14 to 

save money. In all but the submarine alternative 

(Option 3), design of those SSBN(X)s would begin in 

2007 to sustain the submarine-design industrial base.4

The first SSBN(X) would be purchased by 2015, 

seven years earlier than in the Navy’s plan. Option 3 

would begin designing a replacement guided missile 

submarine, the SSGN(X), around 2007 for acquisition in 2017. Production of the SSBN(X) would start 

in 2022.

7 7 8 11 7 12 11

groups 7 6 6 6 9 11 9

4 5 0 0 0 99

0 0 4 0 0 44 ___ ___ ___ ___ ___ ___ ___

Total 18 18 18 17 16 36 33

SSGN strike forces

Memorandum:

Navy's

Current 313-Ship

Option 1 Option 2 Option 3 Option 4

Strike Groups

Option 5 Fleeta Requirement

Surface action groups

Carrier strike groups

Expeditionary strike 

2. In recent legislation, however, the House of Representatives 

expressed concern about the Navy’s Sea Swap crew-rotation program and proposed halting further experimentation with or 

implementation of crew rotation for the next two years.

3. Recently, a senior submarine admiral downplayed the idea of basing more than three submarines in Guam. See Richard R. Burgess, 

“Interview: Vice Admiral Charles L. Munns, Commander, Naval 

Submarine Forces,” Seapower (February 2006), pp. 20-23.

4. Christopher Cavas, “Electric Boat to Lay Off up to 2,400 Workers,” Defense News (December 6, 2005); and Robert A. Hamilton, 

“Flagging Submarine Design System Called Dangerous Problem 

for U.S.,” The Day (New London, Conn.), June 14, 2005.
36 OPTIONS FOR THE NAVY’S FUTURE FLEET

These alternatives focus primarily on issues related to 

shipbuilding. However, they do consider trade-offs between naval aviation and ships. Four of the five options 

would reduce the number of carrier strike groups—and 

thus the number of carrier air wings—so any savings 

from buying and operating fewer aircraft would be used 

to build additional ships.

Option 1: Reduce Ship Programs 

Across the Board

To illustrate the effects of an across-the-board cut in the 

Navy’s planned battle force fleet, the first alternative 

would reduce all of the major components of the fleet by 

about 30 percent to 40 percent by 2035 from the numbers in the 313-ship requirement. (The only exceptions 

are guided missile submarines, which would not be replaced under the Navy’s current plan, and the future maritime prepositioning force, which is not comparable, in 

terms of capability, to anything in today’s fleet.) No new 

class of ships would be canceled, and the Navy would buy 

all of the new weapons and technologies that it considers 

essential to the future force. To the extent that the Navy 

views the 313-ship fleet as transformational, this option 

would follow the same path of transformation, but with 

reduced quantities.

Recent history offers a precedent for reductions spread in 

roughly equal proportion across all elements of the Navy’s 

fleet. Since 1990, the Navy has cut the number of battle 

force ships from 574 to 285. However, the composition 

of the fleet has remained relatively constant, with no one 

category of ship varying by more than 3 percentage 

points in its contribution to the total fleet (see Table 1-1 

on page 2).5

Specifically, Option 1 would eventually reduce the number of aircraft carriers from the Navy’s planned 11 to 

seven. The number of expeditionary strike groups would 

also decline to seven from the nine in the 313-ship 

requirement. The number of amphibious ships in those 

strike groups would fall by half, but CBO assumed for 

this option that the ships of the future maritime prepositioning force would probably operate with the expeditionary strike groups to some extent once they were 

deployed overseas. The ballistic missile submarine force 

would decline from 14 to 10 and the attack submarine 

force from the planned 48 to 35. 

With respect to surface combatants, the number of Arleigh Burke class destroyers would be reduced by nearly 

40 percent. Their replacements would be bought starting 

in 2026. Total purchases of Zumwalt class destroyers, 

CG(X) cruisers, and Freedom class littoral combat ships 

would be about 30 percent smaller than those implied by 

the 313-ship requirement.

Ship Procurement Under Option 1

The most useful way to compare different amounts of 

shipbuilding is in terms of both numbers of ships and 

their weight (measured by lightship displacement, known 

as Condition A displacement for submarines).6 The 

number of ships being purchased on an average annual 

basis reveals what size fleet can be sustained over time. 

The average amount of displacement being purchased per 

year shows the relative workload for the shipyards that 

construct naval vessels. (For a brief analysis of how shipyards’ workload might change under the options in this 

analysis, see the appendix.)

Overall, Option 1 would procure an average of 6.4 battle 

force ships a year between 2006 and 2035, compared 

with 9.2 under the Navy’s 2006 shipbuilding plan. In 

terms of lightship or Condition A displacement, this 

option would build an average of 61,000 tons per year. 

Surface combatants would make up one-third of the ships 

constructed (an average of 3.2 per year, of which 1.9 

would be LCSs) and more than one-quarter of the tonnage (17,000 tons per year, on average). Amphibious 

and MPF(F) ships would be purchased at a rate of 0.6 

(18,000 tons) per year, aircraft carriers at 0.1 (5,200 tons) 

per year, and attack submarines at 1.1 (6,900 tons) annually. Under the 2006 plan, by comparison, the Navy 

would buy 4.2 surface combatants (including 2.5 LCSs), 

1.1 amphibious and MPF(F) ships, 0.2 aircraft carriers, 

and 1.7 attack submarines per year.

To achieve those reductions, Option 1 would not retire 

Nimitz class aircraft carriers early but rather reduce procurement of the new CVN-21 class. Only two CVN-21s 

would be purchased by 2035 (see Figure 3-1). The number of Arleigh Burke destroyers would be reduced from 

the 62 ordered so far to 38—again, not by retiring any of 

5. See Christopher Cavas, “USN Fleet Plan Faces Outyear Challenge,” Defense News (January 30, 2006), p. 6.6. Lightship or Condition A displacement refers to the weight of a 

vessel itself without its crew, materiel, weapons, or fuel.
CHAPTER THREE LOWER-COST ALTERNATIVES TO THE NAVY’S MODERNIZATION PLAN 37

Figure 3-1.

Purchases, Costs, and Inventory of Battle Force Ships Under Option 1

Source: Congressional Budget Office.

Note: SSBNs = ballistic missile submarines; SSNs = attack submarines; SSGNs = guided missile submarines; LCSs = littoral combat ships; 

MPF(F) = Maritime Prepositioning Force (Future).

a. Data for 2006 exclude supplemental funding related to Hurricane Katrina.

2005 2010 2015 2020 2025 2030 2035

0

2

4

6

8

10

12

14

16

Aircraft

Carriers SSBNs SSNs

Large

Surface

Combatants

LCSs Amphibious

Ships

MPF(F)

Ships

Support

Ships

Purchases

Navy's Plan

2005 2010 2015 2020 2025 2030 2035

0

5

10

15

20

25

30

35

Aircraft Carriers

SSBNs

SSNs and SSGNs

LCSs

Average for

2000 to 2005

MPF(F) Ships Support Ships

Surface Combatant

Modernization and

LCS Mission Modules

Large Surface

Combatants

Amphibious

Ships

Navy's Plan

Procurement Costs (Billions of 2007 dollars) a

2005 2010 2015 2020 2025 2030 2035

0

50

100

150

200

250

300

350

Support Ships

Inventory

SSBNs SSNs and SSGNs

LCSs

Amphibious Ships

Navy's Plan

Aircraft Carriers

Large Surface

Combatants

Frigates

MPF(F) Ships
38 OPTIONS FOR THE NAVY’S FUTURE FLEET

them early but by not purchasing as many replacements 

as would be needed to sustain a larger force during the 

2020s and 2030s. The Zumwalt destroyer and CG(X) 

programs would be reduced to five and 11 ships, respectively. The number of LCSs would be limited to 40. 

In terms of amphibious ships, this option would decrease 

the number of large, flat-deck amphibious assault ships to 

seven, thus permitting replacements for the LHDs to be 

delayed until 2023. The LPD-17 program would be 

capped at eight ships. No replacements for the LSDs currently in the fleet would be purchased. The number of 

maritime prepositioning squadrons would be reduced to 

two, only one of which would be designed for sea basing. 

Under this option, future expeditionary strike groups 

would consist of one LHD or LHA-6 and one LPD-17, 

along with three surface combatants and an attack submarine. Once overseas, they could join up with some 

ships from the sea-basing-capable MPF(F) squadron for 

the duration of their deployment.

Under this option, the total number of battle force ships 

would initially rise from 285 today to 299 by 2020, close 

to the Navy’s requirement. In 2020, the fleet would 

include:

B 10 aircraft carriers, 

B 14 ballistic missile submarines, 

B 45 attack submarines, 

B 4 guided missile submarines,

B 91 large surface combatants, 

B 40 littoral combat ships, 

B 28 amphibious ships, and 

B 12 sea-basing-capable maritime prepositioning ships. 

By 2035, however, the size of the fleet would fall to 217 

battle force ships under this option (see Table 3-2). Each 

major category of ship would remain at relatively high 

levels through 2015 but would decline gradually thereafter as fewer ships were purchased to replace vessels that 

reached their retirement age. In 2035, the fleet would

include:

B 7 aircraft carriers, 

B 12 ballistic missile submarines, 

B 36 attack submarines, 

B 57 large surface combatants, 

B 40 littoral combat ships, 

B 15 amphibious ships, and 

B 12 sea-basing-capable maritime prepositioning ships. 

Aircraft Procurement Under Option 1

Compared with the Navy’s current plan, this alternative 

would reduce the number of deployable carrier air wings 

from 10 to six and eliminate the nondeployable reserve 

wing. (The number of air wings is generally one less than 

the number of aircraft carriers because, at any point, one 

carrier is usually laid up in long-term maintenance.) No 

other changes to the Navy’s long-term plans for aviation 

would be made. 

As a result of the reduction in air wings, the Navy would 

buy 150 fewer Joint Strike Fighters, 20 fewer F/A-18G 

Growlers, 28 fewer E-2Cs, 117 fewer MH-60R and MH60S helicopters, and 28 fewer unmanned combat air 

vehicles (UCAVs). Overall, those reductions would save 

almost $14 billion between 2006 and 2035 (most of it 

during the 2010s)—or an average of about $500 million 

per year—compared with the Navy’s plan.

Costs of Option 1

Under this alternative, the Navy would spend an average 

of $14.5 billion annually on ship construction and $7.0 

billion on aircraft procurement through 2035 (see 

Table 3-3). Those costs are much lower than under the 

Navy’s current plan, which would spend an average of 

$21.6 billion to build ships and $7.5 billion to build aircraft between 2006 and 2035. (As another point of comparison, if the ships in Option 1 were bought at a steadystate rate—the number of ships in the force divided by 

their service life—the Navy would require about $14.3 

billion per year in shipbuilding funds.)

Operation and support costs for the battle force fleet 

would average about $12.8 billion annually over the next 

30 years under this option but would fall to $9.2 billion 

by 2035 (see Figure 3-2). Operating and supporting
CHAPTER THREE LOWER-COST ALTERNATIVES TO THE NAVY’S MODERNIZATION PLAN 39

Table 3-2.

Composition of the Battle Force Fleets in 2020 and 2035 Under Alternative 

Force Structures

Source: Congressional Budget Office.

Note: DDG-51 = Arleigh Burke class destroyer; DDG(X) = future replacement for Arleigh Burke class destroyers; DDG-1000 = Zumwalt class 

destroyer (formerly the DD(X)); CG = guided missile cruiser; CG(X) = future guided missile cruiser; LPD-17 = San Antonio class 

amphibious transport dock; SSN = attack submarine; SSBN = ballistic missile submarine; SSGN = guided missile submarine; MPF(F) 

= Maritime Prepositioning Force (Future).

12 10 10 10 11 10

Surface Combatants

62 62 62 62 62 64

7 5 7 0 00

25 24 24 22 26 22

Littoral combat ships 55 40 57 55 40 55

LPD-17 fire-support ships 0 0 0 0 0 7

Submarines

SSNs 47 45 44 52 44 44

SSBNs 14 14 14 14 14 14

SSGNs 4 4 4 4 4 4

Amphibious Ships 31 28 28 28 28 32

11 12 0 0 0 13

58 55 50 49 49 58 ___ ___ ___ ___ ___ ___

Total 326 299 300 296 278 323

12 7 7 8 11 7

Surface Combatants

47 41 38 44 44 49

7 5 7 0 00

19 11 19 0 8 0

Littoral combat ships 55 40 82 55 40 55

LPD-17 fire-support ships 0 0 0 0 0 7

Submarines

SSNs 49 36 31 54 30 30

SSBNs 12 12 12 10 12 12

SSGNs 0 0 0 4 0 0

Amphibious Ships 30 15 13 13 13 28

12 12 0 0 0 24

51 38 37 31 31 43 ___ ___ ___ ___ ___ ___

Total 294 217 246 219 189 255

Option 4

carriers)

Option 5

(Sea basing)

Option 2

 combatants)

Option 3

(Submarines)

(Surface

DDG-51s/DDG(X)s

(Aircraft

Aircraft Carriers 

Navy's 2006

 Plan

Option 1

board cuts)

Shipbuilding (Across-theBattle Force Ships in 2020

Battle Force Ships in 2035

Aircraft Carriers 

DDG-51s/DDG(X)s

CGs/CG(X)s

DDG-1000s

MPF(F) Ships

Logistics and Support Ships

MPF(F) Ships

Logistics and Support Ships

DDG-1000s

CGs/CG(X)s
40 OPTIONS FOR THE NAVY’S FUTURE FLEET

Table 3-3.

Average Annual Spending for Ships and Aircraft Under Alternative 

Force Structures

(Billions of 2007 dollars)

Source: Congressional Budget Office.

Note: The operation and support costs shown here are those directly related to the number of ships or aircraft in the fleet (such as costs for 

fuel, supplies, and compensation of personnel).

a. Excludes modifications of aircraft, spares and repair parts, and aircraft support equipment and facilities.

naval aircraft would cost an additional $8.2 billion per 

year, on average. Under the Navy’s plan, by comparison, 

O&S costs would average $14.3 billion for ships and 

$9.2 billion for aircraft.

In all, the Navy’s ship and aircraft costs would average 

$42.5 billion per year between 2006 and 2035 under 

Option 1. As stated above, that figure is equal to average 

spending over the past six years.

Steady-State Composition of the Fleet Under

Option 1

Eventually, this alternative would result in a steady-state 

fleet of 211 battle force ships, about 25 percent smaller 

than the current fleet. The number of strike groups 

would also decline substantially under this option: to 

seven carrier strike groups, seven expeditionary strike 

groups, and four surface action groups. Those 18 strike 

groups represent just half the number envisioned in the 

Navy’s Global Concept of Operations. 

The amount of peacetime forward presence that those 

groups could provide would depend highly on whether 

the Navy continued and extended its Sea Swap crewrotation practice on surface combatants. CBO assumed 

that Sea Swap would increase the amount of presence 

provided by surface combatants by 38 percent. If the 54 

cruisers and destroyers in this option employed the practice, they would offer the same amount of forward presence as 74 ships not using Sea Swap. Consequently, 

Option 1’s 18 strike groups could provide as much peacetime forward presence as 24 strike groups would today.

Option 2: Emphasize the Navy’s New 

Surface Combatants 

As discussed in Chapter 2, the Navy has begun purchasing or is planning to buy three new types of surface combatant: the Freedom class littoral combat ship, starting 

last year; the DDG-1000 Zumwalt class destroyer, beginning in 2007; and the CG(X) cruiser, starting in 2011. 

Those ships are intended to introduce a variety of new 

capabilities to the fleet, but they also represent a substantial claim on shipbuilding resources. 

The interim report on shipbuilding that the Navy 

released in March 2005 called for procuring eight to 12 

Zumwalt (then called DD(X)) destroyers, 15 to 18 

CG(X)s, and 63 to 82 LCSs. Later, in one of his last statements as Chief of Naval Operations, Admiral Vern Clark

11.7 21.6 14.5 14.6 14.5 13.2 14.3

 14.7 14.3 12.8 12.8 12.5 12.6 13.2

6.1 7.5 7.0 7.0 7.1 7.5 7.0

10.0 9.2 8.2 8.2 8.4 9.2 8.2 _____ _____ _____ _____ _____ _____ _____

Total 42.5 52.5 42.5 42.6 42.5 42.5 42.6

Option 5

(Sea basing)

2006-2035

2000-

2005

Option 4

carriers)

(Aircraft

Navy's 2006

 Plan

Option 3

(Submarines)

Shipbuilding (Across-the- (Surface

board cuts)

Option 2

combatants)

Option 1

Procurement

Procurementa

Operation and support

Ships 

Aircraft 

Operation and support
CHAPTER THREE LOWER-COST ALTERNATIVES TO THE NAVY’S MODERNIZATION PLAN 41

Figure 3-2.

Ship and Aircraft Costs Under Option 1

Source: Congressional Budget Office.

Notes: O&S = direct operation and support costs (those directly related to the number of ships or aircraft in the fleet, such as costs for fuel, 

supplies, and compensation of personnel).

Procurement costs for 2006 exclude supplemental funding related to Hurricane Katrina.

said that the Navy might want as many as 100 LCSs.7

However, the 313-ship requirement includes only 55 

LCSs, as well as seven Zumwalts and 19 CG(X)s.

This alternative would pursue all three of the Navy’s new 

surface combatants, buying the same number of Zumwalt destroyers and CG(X)s as the Navy’s current plan 

(seven and 19) and the same number of LCSs as the 325-

ship plan in the interim report (82). CBO chose the bigger LCS figure to highlight the belief of Navy officials 

such as Admiral Clark that large numbers of those small, 

fast warships will be necessary to counter the threats that 

are likely to emerge over the next several decades and to 

perform other missions.8

 To pay for those surface combatants within the budgetary constraints of this analysis, 

Option 2 would reduce the number of aircraft carriers, 

attack submarines, and amphibious ships by about 40 

percent to 60 percent.

Although the alternatives in this study were not designed 

to address specific threats, this option would probably be 

better suited than the other four to fighting the war on 

terrorism. The large number of surface combatants, particularly LCSs, would allow the Navy to be in many 

places at once, conducting a variety of antiterrorist missions. Traditionally, such missions for surface combatants 

have included patrolling oceans and sea lanes, hunting 

and intercepting ships used by terrorists or pirates, engaging with allies in cooperative maritime security operations, and maintaining a visible presence around the 

2005 2010 2015 2020 2025 2030 2035

0

10

20

30

40

50

60

70

80

Navy's Plan

Total Average for 2000 to 2005

Ship Procurement

Aircraft Procurement

Ship O&S

Aircraft O&S

Ship Procurement Average for 2000 to 2005

7. Scott C. Truver, “Transformation: A Bridge Too Far?” Jane’s Navy 

International (March 2005), p. 25.

8. Recently, senior Navy officials stated that the service keeps thinking of new missions and tasks that the LCS will be able to perform. See Dave Ahearn, “Etter Sees New Missions for Littoral 

Combat Ships,” Defense Today (January 20, 2006), and “LCS Uses 

May Include Fire Boat, Vehicle Transport, Search-and-Rescue,” 

Defense Today (February 22, 2006).
42 OPTIONS FOR THE NAVY’S FUTURE FLEET

globe.9 This option would be less well suited to a future 

conflict with China because of its large cuts in other types 

of ships, especially submarines.10

Ship Procurement Under Option 2

This alternative would build an average of 6.9 battle force 

ships (or about 49,000 tons of lightship displacement) 

annually between 2006 and 2035. Surface combatants 

would account for much of that construction: 67 percent 

by numbers and 44 percent by weight. On average, the 

Navy would build 4.6 cruisers, destroyers, and littoral 

combat ships (or around 21,000 tons of lightship displacement) per year under Option 2. All other types of 

ships would be built at low rates: an average of 0.1 per 

year in the case of amphibious ships and aircraft carriers 

and 0.9 per year in the case of attack submarines and support ships.

As in Option 1, this alternative would reduce the carrier 

force not by retiring Nimitzes early but by lowering procurement of the CVN-21 class. Only two of those new 

aircraft carriers would be purchased through 2035, the 

first not until 2026 (see Figure 3-3). Other cuts would be 

bigger than in the across-the-board alternative. Relative 

to the 2006 shipbuilding plan, the attack submarine force 

would shrink by nearly 40 percent, to 30 subs, and the 

number of amphibious ships would fall by more than 

half, to six expeditionary strike groups. Moreover, unlike 

Option 1, this alternative would not purchase any seabasing ships. It would simply keep two of the existing 

maritime prepositioning squadrons to maintain two brigades’ worth of equipment afloat. In addition, the number of forward-deployed Arleigh Burke destroyers and 

their replacements would be reduced to 28—enough to 

provide three escorts for each carrier strike group and 

expeditionary strike group in peacetime, assuming that 

the destroyers used Sea Swap crew rotation. As noted 

above, those reductions together would enable the Navy 

to buy seven Zumwalt class destroyers, 19 CG(X) cruisers, and 82 littoral combat ships through 2035 with no 

real increase in the service’s average annual funding. 

Like the previous alternative, this option would expand 

the battle force fleet from 285 ships to 300 by 2020. 

Those ships would include:

B 10 aircraft carriers, 

B 14 ballistic missile submarines, 

B 44 attack submarines, 

B 4 guided missile submarines,

B 93 large surface combatants, 

B 57 littoral combat ships, 

B 28 amphibious ships, and 

B No sea-basing-capable maritime prepositioning ships. 

By 2035, however, the total number of battle force ships 

would fall to 246 under this option. Each major category 

of ship would remain at relatively high levels through 

2015 but then decline gradually as fewer ships were purchased to replace the ships that reached their retirement 

age. By 2035, the fleet would include:

B 7 aircraft carriers, 

B 12 ballistic missile submarines, 

B 31 attack submarines, 

B 64 large surface combatants, 

B 82 littoral combat ships, 

B 13 amphibious ships, and 

B No sea-basing-capable maritime prepositioning ships. 

Aircraft Procurement Under Option 2

This alternative would make the same reductions in the 

Navy’s aircraft programs as would Option 1 (the acrossthe-board cuts). The number of deployable carrier air 

wings would be reduced to six from 10 under the Navy’s 

current plan, with no reserve air wing. Consequently, aircraft procurement would decline by 150 for Joint Strike 

Fighters, 20 for F/A-18G Growlers, 28 for E-2Cs, a total 

of 117 for MH-60R and MH-60S helicopters, and 28 for 

9. See Dave Ahearn, “Winter Says Piracy a Major Challege for 

Navy,” Defense News (January 12, 2006); Captain James Pelkofski, 

“Before the Storm: al Qaeda’s Coming Maritime Campaign,” Proceedings, U.S. Naval Institute (December 2005), pp. 20-24; and 

Geoffrey Till, “Navies and the New World Order,” Proceedings, 

U.S. Naval Institute (March 2005), pp. 60-63.

10. See Eric Kimura, “A Gunboat Navy for the 21st Century,” Proceedings, U.S. Naval Institute (July 2005), pp. 44-46.
CHAPTER THREE LOWER-COST ALTERNATIVES TO THE NAVY’S MODERNIZATION PLAN 43

Figure 3-3.

Purchases, Costs, and Inventory of Battle Force Ships Under Option 2

Source: Congressional Budget Office.

Note: SSBNs = ballistic missile submarines; SSNs = attack submarines; SSGNs = guided missile submarines; LCSs = littoral combat ships.

a. Data for 2006 exclude supplemental funding related to Hurricane Katrina.

2005 2010 2015 2020 2025 2030 2035

0

2

4

6

8

10

12

14

16

Aircraft

Carriers SSBNs SSNs

Large

Surface

Combatants

LCSs Amphibious

Ships

Support

Ships

Purchases

Navy's Plan

(Billions of 2007 dollars)

2005 2010 2015 2020 2025 2030 2035

0

5

10

15

20

25

30

35

Aircraft Carriers

SSBNs

SSNs and SSGNs

LCSs

Average for

2000 to 2005

Support Ships

Surface Combatant

Modernization and

LCS Mission Modules

Large Surface Combatants

Amphibious Ships

Navy's Plan

Procurement Costsa

2005 2010 2015 2020 2025 2030 2035

0

50

100

150

200

250

300

350

Support Ships

Inventory

SSBNs SSNs and SSGNs

LCSs

Amphibious Ships

Navy's Plan

Aircraft Carriers

Large Surface

Combatants

Frigates
44 OPTIONS FOR THE NAVY’S FUTURE FLEET

Figure 3-4.

Ship and Aircraft Costs Under Option 2

Source: Congressional Budget Office.

Notes: O&S = direct operation and support costs (those directly related to the number of ships or aircraft in the fleet, such as costs for fuel, 

supplies, and compensation of personnel).

Procurement costs for 2006 exclude supplemental funding related to Hurricane Katrina.

UCAVs. In all, those reductions would save a total of 

about $14 billion between 2006 and 2035 compared 

with the Navy’s plan.

Costs of Option 2

Average annual costs through 2035 would be much the 

same under this alternative as under Option 1: $14.6 billion to buy ships and $12.8 billion to operate them (falling to $9.4 billion by 2035, see Figure 3-4), as well as 

$7.0 billion to purchase aircraft and $8.2 billion to operate them. Thus, total annual procurement and O&S 

costs for ships and aircraft would average $42.6 billion 

under this alternative. (If the ships in this option were 

bought at a steady-state rate, they would require about 

$14.4 billion in average annual procurement funding.) 

Steady-State Composition of the Fleet Under

Option 2

In building new classes of surface combatants within 

recent funding levels, this alternative would result in a 

steady-state fleet of 233 battle force ships—about onefifth smaller than today’s fleet. The total number of strike 

groups would be reduced to 18, as under Option 1, but 

with seven carrier strike groups, six expeditionary strike 

groups, and five surface action groups. If this option’s 54 

cruisers and destroyers were operated using Sea Swap, 

those 18 strike groups could provide the same amount 

of peacetime overseas presence as 25 strike groups would 

today.

Option 3: Maintain 55 Attack 

Submarines over the Long Term

In recent years, the future size of the attack submarine 

(SSN) force has become one of the most prominent issues 

in naval planning. Currently, the Navy has 57 SSNs 

(including four SSGNs, former ballistic missile submarines that were converted to a conventional configuration). However, the Navy has been buying new attack 

submarines at an average pace of less than one per year 

since 1991. That procurement rate would result in a 

steady-state force of about 30 submarines. Many observ2005 2010 2015 2020 2025 2030 2035

0

10

20

30

40

50

60

70

80

Navy's Plan

Total Average for 2000 to 2005

Ship Procurement

Aircraft Procurement

Ship O&S Aircraft O&S

Ship Procurement Average for 2000 to 2005
CHAPTER THREE LOWER-COST ALTERNATIVES TO THE NAVY’S MODERNIZATION PLAN 45

Figure 3-5.

Number of Attack Submarines the Navy Needs, According to Various Defense 

Department Analyses

Source: Congressional Budget Office.

Note: QDR = Quadrennial Defense Review.

a. Includes four guided missile submarines (SSGNs).

ers argue that the United States will need a much larger 

SSN force than that.11

Various studies by the Department of Defense and the 

Navy have reached widely differing conclusions over the 

years about how many attack submarines the Navy requires (see Figure 3-5). For example, a 1999 analysis conducted by the Joint Staff for the Chairman of the Joint 

Chiefs of Staff stated that between 68 and 76 submarines 

were necessary to perform peacetime missions (although 

55 would be sufficient to meet wartime needs). In 2003, 

the Navy’s long-range shipbuilding report called for 55 

attack submarines. Two years later, the Navy stated that 

its future fleet would need between 41 and 45 attack submarines, including four guided missile submarines. Most 

recently, the 313-ship requirement includes 48 attack 

submarines and four SSGNs.

In light of that history, this alternative would build attack 

submarines at a rate that would eventually result in a 

force of 55 SSNs—20 to 25 more than in the other 

options in this study. The force would be smaller than 55 

submarines throughout the 2020s, however, because otherwise the Navy would need to purchase three submarines per year in 14 of the next 30 years. Such a procurement rate would be virtually impossible within the 

resource constraints of this analysis, given the other 

demands on the Navy’s shipbuilding budget. Even so, to 

maintain a force of 55 attack submarines without a real 

increase in total funding, the Navy would have to delay 

or cancel most other major planned ship programs. 

With its emphasis on submarines, this option’s fleet 

would be better suited than those of the other four alternatives to a war with a near-peer competitor, such as 

China. Observers of the Chinese military have particularly noted its development and purchase of various types 

of submarines, which would probably pose the greatest 

threat to U.S. naval forces in a military confrontation 

Joint Staff

Submarine

Forces of

the Future

(1992-1993)

Bottom-Up

Review

(1993)

Navy Fleet

Commanders'

Study

(1996-1997)

QDR

(1997)

Chairman of

the Joint

Chiefs of Staff

Submarine

Study (1999)

30-Year

Shipbuilding

Report

(2000)

QDR

(2001)

Long-Range

Shipbuilding

Report

(2003)

Interim

Report on

Shipbuilding

(2005)a

2006

Shipbuilding

Plana

0

30

40

50

60

70

80

11. See, for example, Robert A. Hamilton, “Admiral: More Subs 

Needed, Top Submariner Sees Shrinking Fleet as Risky Option,” 

The Day (New London, Conn.), June 14, 2005.
46 OPTIONS FOR THE NAVY’S FUTURE FLEET

with that country.12 The most effective weapon against 

submarines is generally considered to be another submarine. Furthermore, some observers fear that China’s continued investment in antiship missiles and sophisticated 

radars and tracking systems could make it difficult for 

U.S. surface ships to operate near Chinese waters.13

Conversely, this option would not be as well suited as 

some others to perform extensive sea-control and maritime interception operations because of its relatively small 

number of surface ships.

Ship Procurement Under Option 3

The Navy would build an average of 6.2 ships (or about 

45,000 tons of lightship and Condition A displacement) 

per year under this alternative. In numerical terms, attack 

submarines and littoral combat ships—at 1.9 and 2.4 per 

year, respectively—would make up nearly three-quarters 

of total purchases. The remaining categories of ships 

would be bought in much smaller quantities. Procurement would average less than 0.1 aircraft carriers, slightly 

more than 0.1 amphibious ships, and 0.6 large surface 

combatants annually.

The picture looks somewhat different when weight is 

used as the measure. Attack submarines and littoral combat ships together would account for about 18,000 tons 

of construction per year, or 40 percent of the total annual 

average. Aircraft carriers would be built at an average rate 

of about 8,000 tons a year, or 17 percent of the total. The 

other categories of ships would each account for between 

7 percent and 12 percent of total average construction, by 

weight.

To pay for this option’s higher rate of submarine procurement, most other major ship programs would be postponed or terminated (see Figure 3-6). The number of aircraft carriers would be reduced from the planned 11 to 

eight. To replace some retiring carriers, three CVN-21s 

would be purchased through 2035, the first in 2021 (13 

years later than under the Navy’s current plan). The 

Zumwalt class destroyer and CG(X) cruiser programs 

would be canceled, and the number of large surface combatants would be halved to 31 from the Navy’s planned 

62. As a result, a replacement for existing Arleigh Burke 

class destroyers would start being purchased in 2019 at a 

rate of one per year. As in the surface combatant alternative (Option 2), the number of amphibious ships would 

be reduced to 13, the sea-basing-capable MPF(F) program would be eliminated, and two existing conventional 

maritime prepositioning squadrons would be retained. 

The savings from those various cuts would be used to 

purchase Virginia class submarines as well as replacements for the Ohio class SSGNs that the Navy is now 

acquiring. Because those SSGNs are conversions of existing ballistic missile submarines, they will reach the end of 

their service life in the mid-2020s. (If SSGNs were 

deemed not worth replacing but the money was still devoted to submarines, the Navy could buy approximately 

six more Virginias, bringing the total attack submarine 

force to 61.)

The total number of battle force ships would rise slightly 

under this option to 296 by 2020, compared with 285 

now. In 2020, the fleet would include:

B 10 aircraft carriers, 

B 14 ballistic missile submarines, 

B 52 attack submarines, 

B 4 guided missile submarines,

B 84 large surface combatants, 

B 55 littoral combat ships, 

B 28 amphibious ships, and 

B No sea-basing-capable maritime prepositioning ships.

Over the following 15 years, however, the size of the fleet 

would gradually decline to 219 ships as fewer new vessels 

were bought to replace the ships that reached their retirement age. By 2035, the fleet would include:

B 8 aircraft carriers, 

B 10 ballistic missile submarines, 

12. Joe Butt, “Will China Rule the Waves?” Submarine Review (January 2006), pp. 7-30.

13. For a good overview of that issue, see Ronald O’Rourke, China 

Naval Modernization: Implications for U.S. Naval Capabilities—

Background and Issues for Congress, Report for Congress RL33153 

(Congressional Research Service, February 13, 2006). Also see 

Massimo Annati, “China’s PLA Navy, the (R)evolution,” Naval 

Forces, no. 6 (2004), pp. 66-75.
CHAPTER THREE LOWER-COST ALTERNATIVES TO THE NAVY’S MODERNIZATION PLAN 47

Figure 3-6.

Purchases, Costs, and Inventory of Battle Force Ships Under Option 3

Source: Congressional Budget Office.

Note: SSBNs = ballistic missile submarines; SSNs = attack submarines; SSGNs = guided missile submarines; LCSs = littoral combat ships.

a. Data for 2006 exclude supplemental funding related to Hurricane Katrina.

Purchases

2005 2010 2015 2020 2025 2030 2035

0

2

4

6

8

10

12

14

16

Aircraft

Carriers SSBNs SSNs and SSGNs

Large

Surface

Combatants

LCSs Amphibious

Ships

Support

Ships

Navy's Plan

2005 2010 2015 2020 2025 2030 2035

0

5

10

15

20

25

30

35

Aircraft Carriers

SSBNs

SSNs and SSGNs

LCSs

Average for

2000 to 2005

Support

 Ships

Surface Combatant

Modernization and

LCS Mission Modules Large Surface

Combatants

Amphibious

Ships

Navy's Plan

Procurement Costs (Billions of 2007 dollars) a

2005 2010 2015 2020 2025 2030 2035

0

50

100

150

200

250

300

350

Support Ships

Inventory

SSBNs SSNs and SSGNs

LCSs

Amphibious Ships

Navy's Plan

Aircraft Carriers

Large Surface

Combatants

Frigates
48 OPTIONS FOR THE NAVY’S FUTURE FLEET

Figure 3-7.

Ship and Aircraft Costs Under Option 3

Source: Congressional Budget Office.

Notes: O&S = direct operation and support costs (those directly related to the number of ships or aircraft in the fleet, such as costs for fuel, 

supplies, and compensation of personnel).

Procurement costs for 2006 exclude supplemental funding related to Hurricane Katrina.

B 54 attack submarines, 

B 4 guided missile submarines,

B 44 large surface combatants, 

B 55 littoral combat ships, 

B 13 amphibious ships, and 

B No sea-basing-capable maritime prepositioning ships. 

Aircraft Procurement Under Option 3

This alternative would cut the number of deployable carrier air wings to seven, one more than in the previous two 

options. The reductions in individual aircraft would be 

less than under those options: 106 Joint Strike Fighters, 

14 F/A-18G Growlers, 21 E-2Cs, 96 MH-60R and MH60S helicopters, and 28 UCAVs. Consequently, the cost 

savings would also be lower: about $10 billion over the 

30-year period.

Costs of Option 3

If the Navy focused on keeping the SSN force at 55 

within current funding levels, as envisioned in this option, it would spend an average of $14.5 billion on ship 

procurement and $7.1 billion on aircraft procurement 

per year between 2006 and 2035. (Buying this option’s 

ships at a steady-state rate would entail $14.3 billion in 

annual shipbuilding costs, on average.) 

Operation and support costs for ships would average 

about $12.5 billion over the next 30 years but would end 

that period at less than $9 billion (see Figure 3-7). O&S 

costs for naval aircraft would average $8.4 billion per 

year. Thus, the total cost of sustaining and operating the 

Navy’s fleets of ships and aircraft under this option would 

be an average of $42.5 billion per year through 2035.

Steady-State Composition of the Fleet Under

Option 3

This option’s approach would produce a steady-state fleet 

of 207 battle force ships, a slightly larger reduction than 

2005 2010 2015 2020 2025 2030 2035

0

10

20

30

40

50

60

70

80

Navy's Plan

Total Average for 2000 to 2005

Ship Procurement

Aircraft Procurement

Ship O&S

Aircraft O&S

Ship Procurement Average for 2000 to 2005
CHAPTER THREE LOWER-COST ALTERNATIVES TO THE NAVY’S MODERNIZATION PLAN 49

the across-the-board cuts in Option 1. As in the previous 

alternatives, the number of strike groups would decline to 

18—but with some important differences. The Navy 

would have eight carrier strike groups, six expeditionary 

strike groups, and four SSGN strike forces. There would 

be no surface action groups. 

Moreover, 11 of the strike groups would nominally include only two surface combatants rather than the usual 

three. However, if the 31 destroyers in this option used 

rotating crews, they would provide the same amount of 

forward presence as 42 ships not using Sea Swap. Thus, 

those destroyers would be sufficient to support the carrier 

and expeditionary strike groups with three surface combatants each when they deployed overseas in peacetime. 

Option 4: Maintain 11 Aircraft 

Carriers over the Long Term

The number of aircraft carriers that the Navy needs has 

also been a contentious issue recently. Last year, when the 

Navy proposed reducing the carrier force from 12 to 11 

as part of the President’s budget request for 2006, the 

Congress responded with legislation requiring the service 

to keep 12 operational aircraft carriers in its fleet.14 Nevertheless, the 2006 shipbuilding plan released in February 

set the Navy’s requirement for carriers at 11, and the 

Chief of Naval Operations explicitly endorsed that number in public statements.15 Recently, the Senate indicated 

that it would accede to the Navy’s request to reduce the 

fleet to 11 carriers, but the House opted to preserve the 

12-ship requirement for the time being.

Consistent with the Navy’s requirement, this option 

would maintain a carrier force of at least 11 ships—three 

or four more than in the other options in this analysis. To 

pay for keeping 11 carriers and 10 air wings without a 

real increase in funding, this option would reduce or 

eliminate all other ship construction programs.

Aircraft carriers represent the core of the Navy and are 

one of the most flexible instruments of military power. 

Nevertheless, some analysts have argued that large numbers of carriers are not a necessity either for future operations in the war on terrorism or for a possible military 

confrontation with China. The ability to mass a force of 

five or six carriers to hit thousands of military targets per 

day from the sea is probably not required to pursue a 

highly dispersed enemy, such as a group of terrorist cells. 

Carriers did prove useful in operations in land-locked 

Afghanistan. But terrorists may be unlikely to concentrate and essentially take over an entire state again, as 

occurred there. 

Similarly, in any future conflict with China, carriers 

would represent an important element of the U.S. military response. However, in 20 or 30 years, concerns about 

their potential vulnerability to Chinese ballistic and antiship cruise missiles or quiet submarines could make the 

Navy reluctant to give such high-value assets a prominent 

role in the conflict. Stopping a Chinese invasion of Taiwan, for example, might be better done with attack submarines and other weapons such as cruise missiles or 

stealthy long-range bombers.

Advocates of a large carrier force argue that it has two significant advantages. A force big enough to allow two or 

three carriers to be deployed overseas at all times enables 

the United States to respond quickly to any unfolding crisis around the globe. Supporters of carriers often cite the 

fact that when a crisis occurs, one of the first questions 

from policymakers is about the location of the nearest 

carrier, shortly followed by directions to redeploy the ship 

to the trouble spot. That reaction is significant because, 

unlike any other warship in the U.S. fleet, an aircraft carrier alone is capable of striking hundreds of targets per 

day for more than a month, using modern aircraft and 

precision munitions. 

The second major advantage follows closely from the 

first: aircraft carriers do not require the support of another government to commence operations. Thus, they 

provide a freedom of action that is paralleled only by the 

United States’ fleet of intercontinental bombers. (Other 

Navy ships have the same freedom, of course, but they do 

not have the carriers’ striking power.) In the view of some 

observers, having 11 aircraft carriers is the best way to 

14. The 2006 National Defense Authorization Act (Public Law 109-

163) states that, “The naval combat forces of the Navy shall 

include not less than 12 operational aircraft carriers. For purposes 

of this subsection, an operational aircraft carrier includes an aircraft carrier that is temporarily unavailable for worldwide deployment due to routine or scheduled maintenance or repair.” The 

effect of that provision is to give the size of the carrier fleet the 

force of law, similar to statutory provisions that mandate the size 

of the Marine Corps.

15. Dave Ahern, “Mullen: Four Ships Too Few; Stable Ship Funds 

Needed,” Defense Today (October 13, 2005).
50 OPTIONS FOR THE NAVY’S FUTURE FLEET

preserve the Navy’s crisis-response capability and freedom 

of action.16

Ship Procurement Under Option 4

Because of the relatively high per-ship cost of aircraft carriers, this alternative would have the lowest shipbuilding 

rate of the options in CBO’s analysis. Under this approach, the Navy would procure an average of 5.2 ships 

per year through 2035. Carriers would represent just 4 

percent of that shipbuilding in terms of numbers: an 

average of 0.2 per year, or one new carrier every five years. 

In terms of weight, however, carriers would make up 

about 33 percent of the 48,000 tons of lightship displacement built each year, on average. That total amount of 

displacement is about half of the average since 2000. 

This option would buy six CVN-21s through 2035 (see 

Figure 3-8), as well as eight CG(X) cruisers to provide 

missile defense to carrier strike groups. The program to 

build DDG-1000 Zumwalt class destroyers would be 

canceled to free up money for aircraft carriers and their 

air wings. In all, the force of large surface combatants 

would number 46 ships, requiring the Navy to start buying replacements for Arleigh Burke class destroyers in 

2021, at the end of the CG(X) program. The planned 

number of littoral combat ships would be cut by onequarter to 40—an average of 1.9 (or about 4,300 tons) 

built per year during the 2006-2035 period. The attack 

submarine fleet would be reduced to 30 from the planned 

48 by building 0.9 submarines (about 5,800 tons) per 

year, on average.

As in most of the previous options, the amphibious force 

would be cut by more than half to 13 ships. Amphibious 

ships and support ships together would be built at an 

average rate of 0.8 (or about 10,000 tons of lightship displacement) per year. Like the surface combatant and submarine alternatives (Options 2 and 3), this option would 

not introduce sea-basing capability to the maritime prepositioning force. Instead, it would maintain two of the 

existing maritime prepositioning squadrons to store 

enough equipment for two Marine expeditionary 

brigades.

Unlike in the other options, the battle force fleet would 

be smaller in 2020 under this alternative, at 278 ships, 

than it is today. That fleet would include:

B 11 aircraft carriers, 

B 14 ballistic missile submarines, 

B 44 attack submarines, 

B 4 guided missile submarines,

B 88 large surface combatants, 

B 40 littoral combat ships, 

B 28 amphibious ships, and 

B No sea-basing-capable maritime prepositioning ships. 

Thereafter, the size of the fleet would decline fairly 

sharply as the large numbers of attack submarines and 

surface combatants built in the 1980s and 1990s were 

retired but not replaced. By 2035, the fleet would number just 189 battle force ships, including:

B 11 aircraft carriers,17

B 12 ballistic missile submarines, 

B 30 attack submarines, 

B 52 large surface combatants, 

B 40 littoral combat ships, 

B 13 amphibious ships, and 

B No sea-basing-capable maritime prepositioning ships.

Aircraft Procurement Under Option 4

This option would maintain 10 deployable air wings 

for use on the 11 carriers, as well as one nondeployable 

reserve air wing. Consequently, aircraft procurement 

would be the same as in the Navy’s plan (described in 

Chapter 2).

16. See Vice Admiral Walter B. Massenberg, Vice Admiral James M. 

Zortman, and Rear Admiral Thomas J. Kilcline Jr., “Naval Aviation: Forward, Persistent, and Dominant,” Proceedings, U.S. Naval 

Institute (October 2005), pp. 34-37.

17. In this option alone, several Nimitz class aircraft carriers would be 

retired a few years early so as not to exceed the 11-carrier requirement in the 2020s and 2030s. 
CHAPTER THREE LOWER-COST ALTERNATIVES TO THE NAVY’S MODERNIZATION PLAN 51

Figure 3-8.

Purchases, Costs, and Inventory of Battle Force Ships Under Option 4

Source: Congressional Budget Office.

Note: SSBNs = ballistic missile submarines; SSNs = attack submarines; SSGNs = guided missile submarines; LCSs = littoral combat ships.

a. Data for 2006 exclude supplemental funding related to Hurricane Katrina.

Purchases

2005 2010 2015 2020 2025 2030 2035

0

2

4

6

8

10

12

14

16

Aircraft

Carriers SSBNs SSNs

Large

Surface

Combatants

LCSs Amphibious

Ships

Support

Ships

Navy's Plan

2005 2010 2015 2020 2025 2030 2035

0

5

10

15

20

25

30

35

Aircraft Carriers

SSBNs

SSNs and SSGNs

LCSs

Average for

2000 to 2005

Support

 Ships

Surface Combatant

Modernization and

LCS Mission Modules Large Surface

Combatants

Amphibious

Ships

Navy's Plan

Procurement Costs (Billions of 2007 dollars) a

2005 2010 2015 2020 2025 2030 2035

0

50

100

150

200

250

300

350

Support Ships

Inventory

SSBNs SSNs and SSGNs

LCSs

Navy's Plan

Aircraft Carriers

Large Surface

Combatants

Frigates

Amphibious Ships
52 OPTIONS FOR THE NAVY’S FUTURE FLEET

Figure 3-9.

Ship and Aircraft Costs Under Option 4

Source: Congressional Budget Office.

Notes: O&S = direct operation and support costs (those directly related to the number of ships or aircraft in the fleet, such as costs for fuel, 

supplies, and compensation of personnel).

Procurement costs for 2006 exclude supplemental funding related to Hurricane Katrina.

Costs of Option 4

This approach would entail the lowest average ship procurement costs of the five options, about $13.2 billion 

per year through 2035, but the highest aircraft procurement costs, an average of $7.5 billion. (If ships were 

bought at a steady-state rate, they would cost $13.2 billion.) Operation and support costs would average $12.6 

billion annually for Navy ships and $9.2 billion for aircraft. In all, then, average annual costs over the 30-year 

period would total $42.5 billion (see Figure 3-9).

Steady-State Composition of the Fleet Under

Option 4

Maintaining a force of 11 aircraft carriers indefinitely 

with no real increase in funding would produce the smallest steady-state fleet of the options in this analysis—181 

battle force ships. The number of strike groups in that 

fleet would fall to 17: 11 carrier strike groups and six 

expeditionary strike groups. Six of the strike groups 

would nominally have only two large surface combatants. 

But as in all of the other options, large surface combatants would employ rotating crews. Consequently, the 46 

large surface combatants in this alternative would provide 

as much presence as 62 ships, and each carrier or expeditionary strike group would be able to deploy overseas in 

peacetime with three surface combatants.

Option 5: Deploy and Maintain a 

Robust Sea-Basing Capability

As described in Chapter 1, when the Navy unveiled its 

Sea Power 21 vision for transforming the fleet, sea basing 

was viewed as the most transformational and innovative 

of the three concepts underlying that vision. The central 

tenet behind sea basing is that the Navy and Marine 

Corps should reduce the need for support from land 

facilities as much as possible—preferably to zero—in the 

initial phases of a military operation. Such a reduction 

would give U.S. forces a high degree of freedom of action. 

That would be true in small noncombat operations (such 

as providing humanitarian aid) or in larger military oper2005 2010 2015 2020 2025 2030 2035

0

10

20

30

40

50

60

70

80

Navy's Plan

Total Average for 2000 to 2005

Ship Procurement

Aircraft Procurement

Ship O&S Aircraft O&S

Ship Procurement Average for 2000 to 2005
CHAPTER THREE LOWER-COST ALTERNATIVES TO THE NAVY’S MODERNIZATION PLAN 53

ations involving one or more Marine infantry brigades. 

The most expansive visions of sea basing have described 

conducting an operation such as the invasion of Iraq, 

which involved 130,000 troops, without using Kuwait as 

an initial operating base. 

The Navy can perform small sea-basing operations today, 

such as its relief efforts after the Asian tsunami or small 

special operations launched from ships or submarines. 

However, the Navy is not equipped to support brigadesized military operations from ships alone. To do that, it 

hopes to buy ships configured to provide most, if not all, 

logistical support for a land-based force from the sea. 

Such ships would be formed into MPF(F) squadrons, 

each of which could deploy and sustain a Marine expeditionary brigade for 20 days. (After that, supplies arriving 

from the continental United States would be funneled 

either through the “sea base” or through a land base that 

would have been established in the first weeks of the 

operation.) The MPF(F) squadrons would replace the 

Navy’s existing maritime prepositioning squadrons, 

which are composed of cargo vessels that carry equipment 

and supplies for three Marine expeditionary brigades but 

that require deep-water ports and established facilities to 

unload their cargo.

The Navy has defined what a sea-basing squadron would 

look like (see Chapter 2) and envisions buying one such 

formation under the 2006 shipbuilding plan. For its part, 

the Marine Corps has stated a desire to have at least two 

such squadrons forward deployed so they would be in a 

position to respond quickly to any crisis that arose in the 

Middle East, southern Africa, or East Asia. 

This option would buy two sea-basing-capable MPF(F) 

squadrons and also maintain nine expeditionary strike 

groups to ensure sufficient support from traditional amphibious ships in any expeditionary operation. Because 

they would provide a readily usable combat capability, the 

ships of an MPF(F) squadron would be counted as battle 

force ships—unlike the conventional cargo ships that 

make up maritime prepositioning squadrons today.

This alternative would probably be better suited than any 

other in CBO’s study to a future world that was increasingly chaotic and required frequent U.S. military interventions. Some analysts and scholars have argued that the 

world is becoming divided between countries that are 

functioning well within the increasingly global economy 

and countries that are not. According to that view, the 

latter group of states represents the most likely places for 

U.S. involvement in the future. (That vision contrasts 

with the Cold War, when the central front of the U.S.-

Soviet confrontation was the heart of Europe.) If the 

United States found itself more and more involved in 

areas with weak governments, civil wars, or ethnic conflict, the sea-basing capability provided by this option 

would probably prove more useful than the large surface 

combatants of Option 2, the attack submarines of 

Option 3, or the sizable carrier force of Option 4.

Ship Procurement Under Option 5

Under this approach, the Navy would purchase an average of 7.2 ships a year between 2006 and 2035. Seabasing and amphibious ships, however, would make up 

just one-fifth of that number, or 1.4 ships per year. Surface combatants, mostly littoral combat ships, would be 

built at a rate of 2.4 per year. Attack submarines would be 

bought at an average rate of a little less than 1.0 per year 

and carriers at 0.1 per year.

As in the carrier option, the shipbuilding picture would 

be quite different when viewed by weight. This alternative would build a larger amount of lightship and Condition A displacement each year—about 77,000 tons, on 

average—than the other four options. Sea-basing and 

amphibious ships would account for 46 percent of that 

total average displacement (25,000 tons per year for 

MPF(F) ships and 10,000 tons for amphibious ships). 

Average annual production of surface combatants would 

equal 10,800 tons; carriers, 5,200 tons; and attack submarines, 5,800 tons.

With respect to individual ship programs, this option 

would buy only two CVN-21 carriers between 2006 and 

2035, for a total carrier force of seven (see Figure 3-10). 

Both the Zumwalt class destroyer and CG(X) cruiser programs would be canceled to save money. The number of 

Arleigh Burke class destroyers and their replacements 

would be maintained at 38 (about three-fifths of the 

Navy’s planned force). This option would also purchase 

55 littoral combat ships, as in the Navy’s plan. The attack 

submarine force would be reduced by nearly 40 percent 

to 30 SSNs. The amphibious fleet would number 28 

ships—the largest among the options in this analysis—

with another 24 sea-basing ships composing the two 

MPF(F) squadrons. 
54 OPTIONS FOR THE NAVY’S FUTURE FLEET

Figure 3-10.

Purchases, Costs, and Inventory of Battle Force Ships Under Option 5

Source: Congressional Budget Office.

Note: SSBNs = ballistic missile submarines; SSNs = attack submarines; SSGNs = guided missile submarines; LCSs = littoral combat ships; 

MPF(F) = Maritime Prepositioning Force (Future).

a. Data for 2006 exclude supplemental funding related to Hurricane Katrina.

Purchases

2005 2010 2015 2020 2025 2030 2035

0

2

4

6

8

10

12

14

16

Aircraft

Carriers SSBNs SSNs

Large

Surface

Combatants

LCSs Amphibious

Ships

MPF(F)

Ships

Support

Ships

Navy's Plan

2005 2010 2015 2020 2025 2030 2035

0

5

10

15

20

25

30

35

Aircraft Carriers

SSBNs

SSNs and SSGNs

LCSs

Average for

2000 to 2005

Support Ships

Surface Combatant

Modernization and

LCS Mission Modules

Large Surface

Combatants Amphibious Ships

Navy's Plan

MPF(F) Ships

Procurement Costs (Billions of 2007 dollars) a

2005 2010 2015 2020 2025 2030 2035

0

50

100

150

200

250

300

350

Support Ships

Inventory

SSBNs SSNs and SSGNs

LCSs

Amphibious Ships

Navy's Plan

Aircraft Carriers

Large Surface

Combatants

Frigates

MPF(F) Ships
CHAPTER THREE LOWER-COST ALTERNATIVES TO THE NAVY’S MODERNIZATION PLAN 55

Figure 3-11.

Ship and Aircraft Costs Under Option 5

Source: Congressional Budget Office.

Notes: O&S = direct operation and support costs (those directly related to the number of ships or aircraft in the fleet, such as costs for fuel, 

supplies, and compensation of personnel).

Procurement costs for 2006 exclude supplemental funding related to Hurricane Katrina.

In addition, because this option emphasizes sea basing, it 

would acquire the fire-support capability of the canceled 

Zumwalt class destroyers by purchasing a new type of 

naval vessel: an LPD-17 fire-support ship. That ship 

would consist of a San Antonio class amphibious transport dock fitted with two Advanced Gun Systems (with a 

total magazine of 900 shells) and 16 vertical launch system cells. (For a discussion of the feasibility of such as 

ship, see Box 3-1.) Under this option, the Navy would 

buy seven of the modified LPD-17s through 2035.

The total number of battle force ships would increase significantly in the next 15 years under this alternative: to 

323 by 2020. That fleet would include:

B 10 aircraft carriers, 

B 14 ballistic missile submarines, 

B 44 attack submarines, 

B 4 guided missile submarines,

B 86 large surface combatants, 

B 55 littoral combat ships, 

B 32 amphibious ships, and 

B 13 sea-basing-capable maritime prepositioning ships. 

By 2035, the battle force fleet would drop below the current size of 285 ships to 255 ships. That number is larger 

than in the other four options because the decline in large 

surface combatants and attack submarines in the early 

2020s would be partly offset by the introduction of 24 

MPF(F) ships. In 2035, the fleet would include:

B 7 aircraft carriers, 

B 12 ballistic missile submarines, 

B 30 attack submarines, 

B 49 large surface combatants, 

2005 2010 2015 2020 2025 2030 2035

0

10

20

30

40

50

60

70

80

Navy's Plan

Total Average for 2000 to 2005

Ship Procurement

Aircraft Procurement

Ship O&S Aircraft O&S

Ship Procurement Average for 2000 to 2005
56 OPTIONS FOR THE NAVY’S FUTURE FLEET

B 7 LPD-17 fire-support ships,

B 55 littoral combat ships, 

B 28 amphibious ships, and 

B 24 sea-basing-capable maritime prepositioning ships. 

Aircraft Procurement Under Option 5

With a force of seven aircraft carriers, this alternative 

would reduce the number of deployable carrier air wings 

from 10 to six and eliminate the reserve wing. As a result, 

it would cut aircraft procurement over the 2006-2035 period by 150 Joint Strike Fighters, 20 F/A-18G Growlers, 

28 E-2Cs, 117 MH-60R and MH-60S helicopters, and 

28 unmanned combat air vehicles. (No other changes 

would be made to the Navy’s long-term plans for aviation.) Overall, those reductions would save about $14 billion through 2035 compared with the Navy’s plan.

Costs of Option 5

The sea-basing squadrons and other ships in this alternative would cost an average of about $14.3 billion per year 

to procure through 2035. (Steady-state costs for those 

ships would average $13.6 billion per year.) Aircraft procurement would cost another $7.0 billion annually, on 

average. Ship operation and support costs would average 

Box 3-1.

Creating an LPD-17 Fire-Support Ship

The sea-basing alternative in this analysis (Option 5) 

envisions creating a modified ship to provide naval 

surface fire support to forces operating on shore. 

The modification would involve installing vertical 

launch system (VLS) cells and two Advanced Gun 

Systems (AGSs) on the hull of an LPD-17 San Antonio class amphibious transport dock. The resulting 

ship would provide the same main battery as the 

Navy’s planned Zumwalt class destroyer but would 

use a much less expensive platform that is already in 

serial production.

When the LPD-17’s hull was designed, space was 

reserved to accommodate a bank of 16 VLS cells in 

the front of the ship, which would be used primarily 

for self-defense. In the fire-support version of the 

ship, those cells could contain up to 64 Enhanced Sea 

Sparrow missiles to defend against antiship cruise 

missiles or a mix of various existing and newly designed ship-defense weapons. The modified LPD-17 

would have other layers of self-defense as well, including the Phalanx Close-in Weapon System and 

batteries of the Rolling Airframe Missile (which is 

also being included on the amphibious version of the 

LPD-17). Alternatively, land-attack missiles could be 

installed in some of the VLS cells. 

Recent press reports have discussed the feasibility of 

using the LPD-17 hull for other purposes, such as 

adding Advanced Gun Systems.1

 In the Congressional Budget Office’s (CBO’s) conception of a firesupport LPD-17, two Advanced Gun Systems would 

be installed in the back of the ship (see the drawing at 

right), with a total magazine of about 900 shells.

Designing and building a fire-support LPD-17 

would require making some changes to the ship as 

well as giving up some capabilities of the LPD-17 

class. The ship’s electronics and combat systems 

would need improvements to use the AGSs effectively. Moreover, some internal rearrangement 

would be necessary to accommodate two AGSs in the 

rear of the ship and 16 VLS cells in the front. In particular, the hangar facilities for helicopters would be 

eliminated, reducing the ship’s aviation capability. 

A landing spot for a CH-53-size helicopter would 

remain, however. The ship’s well deck would also 

be eliminated to provide internal space for the AGS 

magazine. 

1. Christopher Cavas, “More Than an Amphib? Experts Evaluate the U.S. Navy’s LPD-17,” Defense News (January 9, 

2006).
CHAPTER THREE LOWER-COST ALTERNATIVES TO THE NAVY’S MODERNIZATION PLAN 57

$13.2 billion over the 30-year period, falling to less than 

$10 billion by 2035 (see Figure 3-11 on page 55). Aircraft O&S costs would average $8.2 billion annually. 

Overall, the total resources needed to buy and operate 

ships and aircraft under Option 5 would average $42.6 

billion per year.

Steady-State Composition of the Fleet Under

Option 5

Emphasizing sea basing within current funding constraints would result in the largest steady-state fleet 

among the options in this study—241 battle force ships, 

of which 24 would constitute the MPF(F) squadrons. 

However, the Navy would have fewer strike groups than 

under the other options: a total of 16, comprising seven 

carrier strike groups and nine expeditionary strike groups. 

On paper, three of those groups would contain only two 

surface combatants rather than three. But because the 45 

large surface combatants and fire-support ships would 

employ rotating crews, providing an amount of presence 

equivalent to 62 single-crewed ships, each strike group 

would actually deploy in peacetime with three surface 

combatants. Moreover, unlike all of the other options and 

the Navy’s current plan, this alternative would provide 

two sea-basing squadrons.

Box 3-1.

Continued

CBO estimates that such a ship could be built for 

about $1.5 billion today, not including about $400 

million for redesigning the appropriate spaces on the 

LPD-17 hull and for starting what would be, in part, 

a new class of ship. The average cost for seven firesupport LPD-17s would be about $1.7 billion, 

including the real price growth that the naval shipbuilding industry has been experiencing.

The disadvantage of the fire-support LPD-17 concept is that the result would be not a surface combatant but little more than a gun platform capable of 

local self-defense. The ship would not have the same 

degree of stealthiness or aviation capability as a Zumwalt class destroyer, nor would it carry a sophisticated 

combat suite for operations in contested coastal 

regions. Such a vessel could really only be used once 

littoral areas had been made relatively secure by other 

surface combatants—such as littoral combat ships—

so that large, vulnerable amphibious and maritime 

prepositioning ships could operate relatively close to 

the shore.

Line Drawing of a Notional LPD-17 Fire-Support Ship with Two AGSs and 16 VLS Cells

Vertical

Launch

System

Advanced

Gun

System
58 OPTIONS FOR THE NAVY’S FUTURE FLEET

The Effect of Different Budget

Assumptions on the Options

As described above, CBO constrained the options in this 

analysis to fit within an average annual budget of about 

$43 billion (in 2007 dollars) for buying and operating the 

Navy’s ships and aircraft. Whether that represents a reasonable assumption about future budgets will not be clear 

for some time. Nevertheless, this analysis is applicable to 

alternative budget levels.

Every $500 million a year in additional shipbuilding 

funds would provide a total of $15 billion over the 30-

year period of this analysis. That sum, roughly speaking, 

could buy one of the following over 30 years:

B 1 aircraft carrier and its air wing of 60 planes,

B 5 Virginia class attack submarines (one every six 

years),

B 4 DDG-1000 Zumwalt class destroyers (one every 7.5 

years),

B 4 CG(X) cruisers (one every 7.5 years),

B 30 littoral combat ships (one per year), or

B 1 sea-basing squadron of 12 ships (one ship every 2.5 

years).

Likewise, $500 million less in average annual funding for 

ship construction would reduce the battle force fleet by a 

corresponding number of ships.
CHAPTER

4

Comparing the Options by

Various Measures of Capability

The issue of how to measure naval power—and thus 

determine how many ships and what kinds of capabilities 

the United States needs—has been drawing increasing 

attention from both Navy leaders and the Congress. Navy 

officials regularly set numerical requirements for ships 

and at times stress that numbers matter in assessing the 

strength of the fleet.1 Other officials and Members of 

Congress argue that the Navy needs measures besides 

simple ship counts to gauge its capabilities.2 Recently, the 

Chief of Naval Operations straddled the issue by stating 

that the current fleet of about 280 battle force ships is too 

small to provide the capabilities needed over the long 

term.3

Given the ongoing debate about how best to measure and 

determine capabilities, the Congressional Budget Office 

used a variety of metrics to assess how the Navy’s 2006 

shipbuilding plan and the five options described in 

Chapter 3 would affect U.S. naval forces and their ability 

to carry out missions. Those metrics are:

B Characteristics of the battle force fleet:

• Total number of battle force ships

• Total number of strike groups

• Total full-load displacement of the fleet

• Average age of battle force ships

• Total crew size of the fleet

• Total direct operation and support costs of the fleet

B Measures of wartime and peacetime capability:

• Number of major combatants providing forward 

presence

• Number of helicopter hangars on surface combatants

• Number of vertical launch system cells on surface 

ships and submarines

• Number of covert mission days provided by attack 

and guided missile submarines

• Number of targets that can be attacked per day by 

carrier aircraft 

• Number of guns on battle force ships

B Mobility (the total amount of amphibious and maritime prepositioning lift provided by the fleet)

1. See, for example, “Interview with Chief of Naval Operations 

Admiral Vernon Clark,” Sea Power (October 2002). Admiral 

Clark reiterated that point in his seminal article “Sea Power 21: 

Projecting Decisive Joint Capabilities,” Proceedings, U.S. Naval 

Institute (October 2002), p. 38. That article, along with several 

others published by the Naval Institute, were put together in a 

small booklet distributed by the Navy to advertise its ideas. Also 

see Gopal Ratnam, “U.S. Navy Wrestles with Fleet Size, Abilities,” 

Defense News (July 1, 2002).

2. See Christopher J. Castelli, “England Downplays 375-Ship Goal 

but Says Surface Force Will Grow,” Inside the Navy (January 19, 

2004); Jason Ma, “Talent: Navy, Congress Should Measure Naval 

Power in a New Way,” Inside the Navy (January 26, 2004); and 

Dave Ahearn, “Rumsfeld on Increasing Fleet Size: Capabilities, 

Not Numbers, Count,” Defense Today (December 16, 2005).

3. Dave Ahearn, “Adm. Mullen Opposes Navy Fleet Less Than 281 

Vessels,” Defense Today (April 25, 2006); and Chris Johnson, 

“CNO: Navy Needs Planned Number of Ships to Generate Capabilities,” Inside the Navy (February 20, 2006).
60 OPTIONS FOR THE NAVY’S FUTURE FLEET

Figure 4-1.

Number of Battle Force Ships Under Alternative Force Structures

Source: Congressional Budget Office.

Those metrics are by no means exhaustive, and they do 

have limitations. For example, although they indirectly 

measure warfighting capability, they cannot predict how 

the Navy would actually fare against an opponent in a 

particular conflict. 

Total Number of Battle Force Ships

The first and most obvious way to compare the fleet 

under different options is to look at the number of battle 

force ships. Many advocates of the Navy consider the actual size of the fleet to be a crucial measure of its strength 

and ability to defend U.S. interests around the world. 

They have expressed concern about the decline in the 

number of ships since the end of the Cold War. Others 

have argued that ship counts do not really matter much 

and may obscure the fact that the Navy is more capable 

today than it was a decade ago, when it had many more 

ships.

In all of the alternatives considered in this analysis, the 

introduction of littoral combat ships in large numbers 

over the next 10 years would increase the size of the battle 

force fleet. Currently at 285 ships, it would rise to about 

300 by 2009 with the addition of LCSs. 

After that, however, the size of the fleet would diverge 

under the different options (see Figure 4-1). Between 

2009 and 2025, Option 5, with its large number of seabasing ships and 55 LCSs, would produce the largest fleet 

among the lower-cost alternatives to the Navy’s plan. The 

surface combatant alternative (Option 2) would catch up 

to it by 2025. Both options would result in a fleet of 

around 250 ships by 2035. Under the rest of the options, 

the number of battle force ships would decline steadily 

after the mid- to late 2010s, ending up at about 190 to 

220 ships by 2035. None of the options that CBO considered would sustain a fleet of 250 or more ships much 

beyond 2035.

Total Number of Strike Groups

Since the introduction of the Global Concept of Operations in 2003, the number of strike groups in the fleet has 

become a common measure for describing battle force 

ships. The Navy currently has 36 strike groups (see 

Figure 4-2). Under the 2006 shipbuilding plan, the service would be reorganized into 33 strike groups, reflecting the reduction of one carrier strike group and two 

expeditionary strike groups.

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260

280

300

320

340

Navy's Plan

Option 1

Option 2

Option 3

Option 4

Option 5
CHAPTER FOUR COMPARING THE OPTIONS BY VARIOUS MEASURES OF CAPABILITY 61

Figure 4-2.

Number of Strike Groups Under Alternative Force Structures

Source: Congressional Budget Office.

Notes: The numbers for Options 1 through 5 reflect steady-state levels. 

Eleven of the strike groups under Option 3, six under Option 4, and three under Option 5 would contain only two large surface combatants in addition to the other ships.

In practice, however, the number of strike groups would 

be lower than that because the Navy’s shipbuilding plan 

would not sustain a fleet of 313 ships after 2030. When 

the current guided missile submarines retired in the 

2020s, they would not be replaced under the Navy’s plan. 

In addition, the number of large surface combatants 

would fall to 73 by 2035, compared with the requirement 

of 88. Those reductions mean that by 2035, the battle 

force fleet would be organized into 24 strike groups

That number would decline further under the alternatives in this study: to steady-state levels of 18 in the first 

three options, 17 in the aircraft carrier option (Option 4), 

and 16 in the sea-basing alternative (Option 5). On 

paper, 11 of the strike groups in Option 3, six in Option 

4, and three in Option 5 would be supported by only two 

surface combatants rather than the usual three. However, 

because all large surface combatants are assumed to use 

Sea Swap crew rotation in these alternatives, each carrier 

and expeditionary strike group could be supported by 

three surface combatants when it performed peacetime 

presence missions.

Moreover, Sea Swap would have a considerable effect on 

the amount of overseas presence that strike groups could 

provide in peacetime. Under the Navy’s plan, using Sea 

Swap on most major surface combatants would allow the 

Navy to provide peacetime presence equivalent to that of 

11 additional surface action groups. Under four of the 

options that CBO considered, the additional presence 

would be equivalent to that provided by four to seven 

surface action groups. (No additional groups would be 

available under Option 3 because it would have the fewest large surface combatants. In that alternative, Sea Swap 

would provide just enough peacetime presence so that the 

14 carrier and expeditionary strike groups could operate 

with three surface combatants each.)

Today 313-Ship

Requirement

Navy's Plan in

2035

Option 1 Option 2 Option 3 Option 4 Option 5

0

10

20

30

40
62 OPTIONS FOR THE NAVY’S FUTURE FLEET

Figure 4-3.

Total Full-Load Displacement of Battle Force Ships Under Alternative

Force Structures

(Millions of long tons)

Source: Congressional Budget Office.

Total Full-Load Displacement

Although not as common a measure as it was in the battleship era before World War II, the total displacement of 

the Navy’s fleet is still used by some analysts to indicate 

the strength of a given force. For example, in his analyses, 

Robert Work of the Center for Strategic and Budgetary 

Assessments notes that the ships of the U.S. Navy have a 

greater total displacement than the fleets of the 17 next 

largest navies combined.4

 (Whereas discussions of shipbuilding such as those in Chapter 3 and the appendix 

focus on a vessel’s lightship displacement, discussions of 

capability tend to use full-load displacement, which is the 

weight of a ship when it is fully equipped and loaded with 

weaponry, crew, and supplies.)

All of the options described in Chapter 3 would result in 

a fleet that, by 2035, displaced 0.5 million to 1.5 million 

fewer tons than today’s Navy—a reduction of between 20 

percent and 30 percent (see Figure 4-3). Total displacement would increase through 2010 along with the size of 

the fleet. But thereafter, displacement would decline under Options 2, 3, and 4 as older ships left the fleet in the 

2020s and 2030s and were not replaced. Under the other 

options and the Navy’s plan, total displacement would 

increase until 2020 and then start to decline. Only the 

Navy’s plan would result in a fleet with roughly the same 

displacement in 2035 as the current fleet. 

The five options would end the 30-year period within 

about 900,000 tons of each other in terms of displacement, suggesting a rough comparability that reflects the 

fact that they share the same budgetary constraint. Even 

that range can be misleading, however. The heaviest and 

largest fleet in 2035 would be that of Option 5, with its 

two sea-basing-capable MPF(F) squadrons. One of the 

lightest and smallest fleets would be the submarinefocused force of Option 3. If, in a hypothetical world, 

those two fleets fought each other, the numerous stealthy 

2005 2010 2015 2020 2025 2030 2035

0.0

2.5

3.0

3.5

4.0

4.5

5.0

5.5

Navy's Plan

Option 1

Option 2

Option 3

Option 4

Option 5

0

4. Dave Ahearn, “Navy Needs Enough Ships, but Capability Is Key,” 

Defense Today (December 20, 2004).
CHAPTER FOUR COMPARING THE OPTIONS BY VARIOUS MEASURES OF CAPABILITY 63

Figure 4-4.

Average Age of Battle Force Ships Under Alternative Force Structures

Source: Congressional Budget Office.

a. The half-life is the midpoint in a fleet’s notional service life. An average age well above the half-life generally implies that many ships may 

soon have to be replaced or refurbished over a short period to prevent the size of the fleet from declining. CBO calculated a half-life for 

each option’s fleet based on the weighted average of the expected service lives of the ships in that fleet. For the five options and the 

Navy’s plan, half-lives range from 16.3 years to 17.4 years.

submarines of Option 3 would undoubtedly overwhelm 

the slow-moving, relatively vulnerable amphibious and 

MPF(F) ships of Option 5. That outcome illustrates the 

potentially limited utility of total displacement as a measure of capability. 

Average Ship Age

The average age of the Navy’s current battle force ships is 

16.4 years—about one year shy of the halfway point in 

that fleet’s notional service life of 35 to 36 years. (The 

halfway point is referred to in this analysis as the halflife.) With any inventory, an average age well above the 

half-life generally implies that many pieces of equipment 

may soon have to be replaced or refurbished over a short 

span of time to prevent the inventory from shrinking. 

All of the options that CBO examined would result in a 

much higher average ship age during more than 15 years 

of the projection period, exceeding the half-lives of their 

respective fleets by several years (see Figure 4-4).5

 By 

2035, however, average ages would return to levels only 

slightly higher (0.5 to 1.5 years) than the relevant halflives.

Specifically, the surface combatant and submarine alternatives (Options 2 and 3) would produce the youngest 

fleets in 2035, with average ages of 17.6 and 17.4 years, 

respectively. Options 1 and 4’s fleets would be the oldest 

at 18.0 years—only 5 percent higher than those fleets’ 

half-lives. The Navy’s plan, with the largest number of 

ship purchases over the 2006-2035 period, would result 

in a slightly younger fleet than exists now, with an average 

age of 16.3 years. 

2005 2010 2015 2020 2025 2030 2035

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16

18

20

22

24

Navy's Plan

Option 1

Option 2

Option 3

Option 4

Option 5

0

Half-Life Rangea

5. CBO calculated a half-life for each option’s fleet based on the 

weighted average of the expected service lives of the ships in that 

fleet. For the five options and the Navy’s plan, half-lives range 

from 16.3 years to 17.4 years.
64 OPTIONS FOR THE NAVY’S FUTURE FLEET

Figure 4-5.

Total Crew Size and Direct Operating Costs of Battle Force Ships Under 

Alternative Force Structures

Source: Congressional Budget Office.

Note: Direct operation and support costs are those directly related to the number of ships in the fleet (such as costs for fuel, supplies, and 

compensation of personnel).

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60

80

100

120

140 Total Number of Sailors (Thousands)

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8

10

12

14

16

Navy's Plan Option 1 Option 2 Option 3 Option 4 Option 5

Direct Operation and Support Costs (Billions of 2007 dollars)

0
CHAPTER FOUR COMPARING THE OPTIONS BY VARIOUS MEASURES OF CAPABILITY 65

Total Crew Size and Direct Operation 

and Support Costs

Although crew size and operating costs are not indicators 

of capability, they are measures of great concern to the 

Navy. Addressing the rising costs of military personnel—

which claim about 30 percent of the Navy’s budget (with 

all benefits taken into account)—has become a top priority of Navy leaders. Their emphasis on designing and 

building ships that can be operated with far fewer crewmembers is aimed at reducing military personnel costs 

across the fleet. Reducing those costs would in turn lower 

direct operation and support costs (which also include 

ship maintenance).6

By decreasing the size of the battle force fleet, the options 

in this analysis would substantially reduce the total number of sailors needed and the fleet’s direct O&S costs (see 

Figure 4-5). Today, the Navy employs about 109,000 

men and women to crew its battle force ships and incurs 

about $14 billion a year in direct operation and support 

costs. The Navy’s 2006 shipbuilding plan would eliminate the need for about 10,000 crew members and would 

lower annual O&S costs to $13.1 billion by 2035. By 

comparison, the options that CBO considered would 

reduce total crew size by 33 percent to 40 percent (or by 

36,000 to 43,000 sailors) and would reduce direct O&S 

costs by 29 percent to 36 percent (to $10 billion per year 

or less).

Number of Major Combatants

Providing Forward Presence 

Since the end of the Cold War, the number of ships that 

the Navy keeps deployed around the globe has become an 

important measure. The quantity of ships on-station in 

operating areas overseas at any given time represents the 

nation’s naval crisis-response capability. How many ships 

are already on the scene or within several days’ steaming 

distance will determine how well the Navy deals with a 

humanitarian disaster or an international conflict. 

As discussed in Chapter 1, the Navy is experimenting 

with crew rotation concepts such as Sea Swap and looking for ways to base more ships overseas. Those efforts 

indicate the importance that senior Navy leaders attach to 

increasing forward presence.

In its analysis, CBO compared the amount of forward 

presence provided by the Navy’s major combatants—a 

category that includes littoral combat ships and MPF(F) 

squadrons but excludes logistics and support ships. It also 

excludes ballistic missile submarines because they do not 

need to be forward deployed to perform their mission, 

given the long range of the nuclear missiles that they 

carry. Moreover, it would not be desirable to have ballistic 

missile submarines operate close to potential enemies’ 

operating areas because that would unnecessarily increase 

their vulnerability to detection and attack in the event of 

a war. 

CBO assumed that major surface combatants (except 

Ticonderoga class cruisers and Oliver Perry class frigates) 

would employ Sea Swap by 2012 and that the Navy 

would base nine submarines in Guam by that year. All 

other ships were assumed to operate as they do today. 

Ships based overseas, such as the carrier and expeditionary strike groups in Japan as well as the MPF(F) squadrons, count as forward deployed all of the time. 

Under those assumptions, the Navy’s current plan—with 

its much bigger and more expensive force—would provide the largest amount of forward presence by major 

combatants through 2020 (see Figure 4-6). The seabasing alternative (Option 5) would provide more presence than the Navy’s plan after 2021 because of its second 

MPF(F) squadron. Option 2, with its emphasis on surface combatants, would provide the next largest amount 

of forward presence. The carrier alternative (Option 4), 

which would have the smallest combat fleet, would provide the least amount of presence. However, that option 

would keep the same number of carrier strike groups 

overseas as the Navy’s plan, something no other alternative would be able to do.

Number of Helicopter Hangars

As described in Chapter 1, among the threats that concern naval planners are quiet diesel-electric submarines, 

mines, and small fast boats armed with torpedoes or 

cruise missiles that would make it hard for the Navy to 

operate in a particular area. Generally, one of the most 

6. CBO defines direct O&S costs as ones that are directly associated 

with operating a ship, such as the costs of salaries and benefits for 

the crew; fuel, food, and other consumable goods; and maintenance performed onboard the ship. Indirect O&S costs, which are 

not included in this analysis, may include the costs of infrastructure at maintenance facilities, personnel not serving on a ship, and 

other items.
66 OPTIONS FOR THE NAVY’S FUTURE FLEET

Figure 4-6.

Number of Major Combatants Providing Forward Presence Under Alternative 

Force Structures

Source: Congressional Budget Office.

Note: Major combatants are aircraft carriers, amphibious and Maritime Prepositioning Force (Future) ships, attack submarines, large surface 

combatants, and littoral combat ships. The figure excludes support ships and ballistic missile submarines.

effective weapons to detect and target such antiaccess 

threats is helicopters. Counting the number of helicopter 

hangars on surface ships indicates the number of helicopters that the Navy could use to counter such threats. The 

more hangars available in peacetime or during a war, the 

more flexible and better equipped the surface combatant 

force will be. 

Because this measure is important in both peacetime and 

wartime, CBO compared the number of helicopter hangars on surface combatants that would be forward 

deployed at a given time as well as the number on ships 

that could be surged to a theater within 90 days during 

wartime. (In general, only 20 percent to 25 percent of the 

fleet is deployed overseas at any one time, and just 5 percent to 10 percent may be on-station in a particular theater of operations. In the event of a war, however, 

between one-half and two-thirds of the fleet could be 

mustered in 30 to 90 days, if necessary.)

Today’s fleet of surface combatants contains a total of 

about 150 helicopter hangars. Of those, about 35 are 

forward deployed at any given point in peacetime, and 

about 100 could be surged in the event of a war (see 

Figure 4-7). All of the options in this analysis would 

increase those numbers by 2035 by introducing large 

numbers of littoral combat ships, which have two helicopter hangars apiece. The surface combatants in Option 

2 would provide the largest numbers of hangars in peacetime (84) or wartime (190). By comparison, the Navy’s 

plan would keep 72 hangars forward deployed at any 

given time and could surge 172 in the event of a crisis. 

The alternative that would make across-the-board cuts 

(Option 1) and the 11-carrier force (Option 4) would 

have the smallest numbers of helicopter-carrying surface 

combatants. By 2035, those options would have about 55 

hangars on forward-deployed ships in peacetime and 

could surge about 125 in the event of a war.

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60

70

80

90

100

Navy's Plan

Option 1

Option 2

Option 3

Option 4

Option 5
CHAPTER FOUR COMPARING THE OPTIONS BY VARIOUS MEASURES OF CAPABILITY 67

Figure 4-7.

Number of Helicopter Hangars on Surface Combatants Under Alternative

Force Structures

Source: Congressional Budget Office.

Number of Vertical Launch

System Cells

The development and deployment of VLS cells have 

played an important role in increasing the long-range capability of surface ships and attack submarines. In peacetime, the Navy’s regional combatant commanders require 

a certain number of Tomahawk missiles to be on-station 

in their respective theaters. Those Tomahawks would 

usually be launched from VLS cells (although not every 

cell on a surface ship is filled with land-attack missiles). 

Thus, the total number of VLS cells can be used to approximate how well a force structure would meet those 

peacetime requirements. 

The number of VLS cells that are on-station overseas 

in peacetime or that can be surged to a theater of operations in a war is governed by the total number in the force

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200

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200

Navy's Plan Option 1 Option 2 Option 3 Option 4 Option 5

On Ships Forward Deployed in Peacetime

On Ships in a Wartime Surge
68 OPTIONS FOR THE NAVY’S FUTURE FLEET

Figure 4-8.

Number of VLS Cells on Surface Combatants and Attack Submarines 

Under Alternative Force Structures

Source: Congressional Budget Office.

Note: VLS = vertical launch system.

and how that force is employed. That in turn determines 

the ability of surface combatants and submarines to conduct long-range strike operations in support of military 

objectives.

The ships in today’s fleet have approximately 8,000 VLS 

cells in all. Of those, about 2,100 are on-station at any 

given time, and 5,600 could be surged in a crisis. Those 

numbers would be higher through 2025 under all of the 

options in this analysis as well as the Navy’s shipbuilding 

plan (see Figure 4-8). The largest increase would occur 

under the Navy’s plan (to a peacetime presence of about 

3,300 cells and a wartime surge of 7,200 cells in 2021), 

and the smallest increases would occur under the submarine, carrier, and sea-basing alternatives (to about 3,000 

cells on-station in peacetime during that year and 6,500 

to 6,900 in a wartime surge). By the early 2020s, however, the retirement of Ticonderoga class cruisers, which 

have 120 VLS cells each, and the decline in the number 

of attack submarines (except under Option 3) would 

2005 2010 2015 2020 2025 2030 2035

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

Navy's Plan Option 1 Option 2 Option 3 Option 4 Option 5

On Ships Forward Deployed in Peacetime

On Ships in a Wartime Surge

2005 2010 2015 2020 2025 2030 2035

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000
CHAPTER FOUR COMPARING THE OPTIONS BY VARIOUS MEASURES OF CAPABILITY 69

begin to steadily reduce the number of VLS cells in the 

fleet under all alternatives. That decline would accelerate 

in the mid-2020s when Arleigh Burke class destroyers, 

which have 90 to 96 VLS cells apiece, were retired faster 

than they would be replaced. 

By 2035, however, the Navy’s plan would result in nearly 

900 fewer VLS cells overall than today’s force has, although about the same numbers deployed in peacetime 

or wartime. Option 2, with 64 VLS-capable surface combatants and around 30 attack submarines still in the fleet, 

would have more than 6,400 cells in total, resulting in 

about 2,000 cells on-station in peacetime (as today) but 

4,600 cells in a wartime surge. Option 5, with its emphasis on sea basing, would provide a total of only about 

5,200 cells, for a peacetime presence of 1,700 cells and a 

wartime surge of 3,500 cells (just three-fifths of today’s 

level). The remaining alternatives would be in between 

Options 2 and 5.

Covert-Mission Days Provided by

Submarines

The principal peacetime role of attack submarines is to 

conduct reconnaissance and intelligence-collection missions. To measure the relative capabilities of the SSN 

force in this analysis, CBO used the number of covertmission days that the force could carry out in a year, on 

average. According to a 1999 study by the Chairman of 

the Joint Chiefs of Staff, an attack submarine based in the 

United States provides an average of 36 covert-mission 

days per year over its service life. As mentioned above, 

CBO assumed that the Navy would have nine attack submarines stationed in Guam by 2012. By being closer to 

their operating areas and using a different deployment 

concept, submarines based in Guam can provide more 

than twice as many mission days as submarines based in 

the continental United States.7 In addition, CBO’s calculations included the mission days that could be provided 

by guided missile submarines.

Today’s fleet, including the four SSGNs, can provide a 

total of about 2,700 covert-mission days per year (see 

Figure 4-9). That number would increase over the next 

10 years under the Navy’s plan and all of the alternatives 

as six more submarines were gradually transferred to 

Guam. After 2015, however, the retirement of large

numbers of Los Angeles class submarines would reduce 

the size of the attack submarine force because replacements would not be built quickly enough to offset the

retirements. 

Apart from that common increase and then decrease, the 

options and the Navy’s plan differ substantially in terms 

of covert-mission days. Option 3—with its emphasis on 

attack submarines, including maintaining the SSGNs—

would yield the largest number of covert-mission days 

throughout the 30-year period of this analysis. Like the 

others, that option would see a decline in the 2020s from 

submarine retirements, but by 2035 it would rebound to 

provide around 3,100 mission days. The Navy’s plan, by 

comparison, would provide about 2,400 covert-mission 

days that year. The surface combatant, carrier, and seabasing alternatives (Options 2, 4, and 5) would provide 

the fewest mission days in 2035—around 1,700—because of the relatively small number of submarines in 

their fleets.

Targets Attacked per Day by 

Carrier-Based Aviation

One measure of fleet capability that the Navy has stressed 

repeatedly in recent years is the number of targets that 

can be attacked (or “serviced”) each day by planes 

launched from aircraft carriers. With the introduction 

and widespread use of precision munitions, such as

the Joint Direct Attack Munition, one Navy aircraft 

equipped with four such munitions could successfully hit 

and destroy four different targets. The Navy has said on 

numerous occasions that the metric has changed since the 

1980s from “sorties per target” to “targets per sortie.”

Furthermore, the Navy has asserted in reports to the 

Congress that the new CVN-21 class of aircraft carriers 

will be able to launch 160 strike sorties per day for a 30-

day period, an increase of about 30 percent from today’s 

level. (That figure assumes that the carrier conducts flight 

operations for 12 hours per day, with the other 12 hours 

used to rest personnel and equipment.) The increase in 

sorties depends in large measure on the new capabilities 

planned for the CVN-21, such as an electromagnetic catapult, as well as on a redesign of the traditional carrier

7. See Congressional Budget Office, Increasing the Mission Capability 

of the Attack Submarine Force (March 2002).
70 OPTIONS FOR THE NAVY’S FUTURE FLEET

Figure 4-9.

Total Covert-Mission Days Provided by the Attack Submarine Force Under 

Alternative Force Structures

Source: Congressional Budget Office.

flight deck and aircraft elevators to allow faster maintenance and rearming.8

In using the metric of number of targets attacked to compare fleets, CBO assumed that the higher sortie rate of 

the new CVN-21s would be realized and that each aircraft would be armed with four precision munitions. (In 

the future, the introduction of new weapons, such as the 

small-diameter bomb being developed by the Air Force, 

might increase the number of targets attacked because 

each aircraft could carry more of such weapons.) Further, 

CBO assumed that Nimitz class carriers or others would 

be able to sustain 140 sorties per 12-hour day (a rate the 

Navy expects to achieve by 2010), also with four weapons 

and thus four potential targets per sortie. All of the carriers were assumed to operate according to the time lines of 

the Fleet Response Plan, which asserts that two-thirds of 

the carrier force could be deployed to a theater of operations within 90 days.

Under those assumptions, the current carrier force, with 

10 deployable air wings, could strike about 3,500 targets 

per day (see Figure 4-10). With the addition of CVN21s, the 11 carriers and 10 air wings of Option 4 and the 

Navy’s plan would be able to strike nearly 4,200 targets 

per day by 2035. The seven deployable air wings in 

Option 3 would be able to strike about 2,900 targets per 

day by that year. However, the rest of the alternatives—

which would maintain only six deployable air wings and 

delay the introduction of CVN-21s by 20 years—would 

be able to strike only about 2,300 targets per day by 

2035.

Naval Surface Fire Support

The amount of firepower that the Navy’s surface combatants could deliver in a combat situation is a seldom-used 

measure. But it could become more important depending 

on the course of the future security environment. To

2005 2010 2015 2020 2025 2030 2035

0

1,500

2,000

2,500

3,000

3,500

Navy's Plan

Option 1

Option 2

Option 3

Option 4

Option 5

8. See Benjamin S. Lambeth, American Carrier Air Power at the 

Dawn of a New Century (Santa Monica, Calif.: RAND Corporation, 2005); and Owen R. Cote Jr., The Future of Naval Aviation

(Cambridge, Mass.: MIT Security Studies Program, 2006).
CHAPTER FOUR COMPARING THE OPTIONS BY VARIOUS MEASURES OF CAPABILITY 71

Figure 4-10.

Number of Targets Attacked per Day by Carrier Aircraft Under Alternative 

Force Structures

Source: Congressional Budget Office.

Note: This figure assumes that under the Fleet Response Plan, the Navy could deploy eight carriers out of a fleet of 12 to a theater of operations in 90 days, seven carriers out of a fleet of 11, six carriers out of a fleet of nine or 10, and five carriers out of a fleet of seven or 

eight.

measure that firepower, CBO looked at both the number 

of guns on surface combatants that could be surged to a 

theater in wartime and the magazine capacity available at 

the outset of a conflict. (Magazines could be resupplied 

from support ships in three to 18 hours depending on the 

circumstances of the operation.) For this metric, which is 

primarily a wartime measure, CBO assumed that about 

two-thirds of the Navy’s surface combatants would be 

surged to support a combat operation.

Most of today’s large surface combatants are equipped 

with 5-inch, 54-caliber guns that can hit targets up to 13 

nautical miles away. With the launch of DDG-81 in 

2001, the Navy began equipping its destroyers with 5-

inch, 62-caliber guns that will be able to fire Extended 

Range Munitions (ERMs), which are now under development. Those munitions are rocket-assisted projectiles that 

are intended to reach 63 nautical miles. The Navy’s 

planned DDG-1000 Zumwalt class destroyers are expected to carry Advanced Gun Systems that have a range 

of 83 nautical miles and three times the payload of 5-inch 

guns.9 Consistent with the Navy’s 2006 shipbuilding 

plan, CBO assumed that the new CG(X) cruiser would 

not carry guns, although a final decision on that issue has 

not been made.10

The size of gun magazines also varies by ship depending 

on how the ship is loaded. For example, Arleigh Burke 

2005 2010 2015 2020 2025 2030 2035

0

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

Option 3

Option 4

Navy's Plan

Options 1, 2, and 5

9. Eighty-three nautical miles is the maximum range of the 

Advanced Gun System. If the Navy wanted to have numerous 

shells from the same ship land simultaneously—as it sometimes 

discusses—the effective range would be much shorter because of 

the need for different trajectories to create that effect. Shells with 

higher trajectories take more time to reach their targets and thus 

would be fired before shells with lower trajectories to ensure that 

all of them arrived at the same time.

10. See Department of the Navy, Office of the Chief of Naval Operations, Director of Surface Warfare, Report to Congress on Naval 

Surface Fire Support (March 2006), Appendix B, “Commandant 

of the Marine Corps’ Views and Recommendations.”
72 OPTIONS FOR THE NAVY’S FUTURE FLEET

class destroyers numbered DDG-81 and higher can be 

fully loaded with 636 rounds of the conventional 5-inch, 

54-caliber munition, or with 232 ERMs and 225 conventional shells for what is called a maximum ERM loadout. 

The regular magazine for Zumwalt class destroyers is expected to hold 600 Long Range Attack Projectiles.11 For 

its analysis of firepower at a range of 13 nautical miles, 

CBO assumed that all Arleigh Burke class destroyers 

would carry conventional 5-inch munitions. For its analysis at longer ranges, CBO assumed that Arleigh Burke 

and Zumwalt magazines would hold the maximum number of long-range munitions.12

Currently, the Navy has a relatively large capability to 

provide gunfire support over very short distances. The 

surface combatants that could be deployed in the event of 

a conflict carry a total of 63 guns, which have a range of 

13 nautical miles. (Although 12 of those ships have 5-

inch, 62-caliber guns, the Navy has not yet produced the 

long-range munitions for them.). Under the 2006 shipbuilding plan, the Navy would have 41 guns at either 13 

or 63 nautical miles in 2035 and 10 guns at 83 nautical 

miles (see Figure 4-11). Total magazine capacity in 2035 

would be 23,000 shells at 13 nautical miles, 10,000 shells 

at 63 nautical miles, and 3,000 shells at 83 nautical miles 

(see Figure 4-12). 

Of the alternatives that CBO considered, Options 2 and 

5—which would have the same number of Advanced 

Gun Systems as the Navy’s planned fleet—would provide 

35 to 43 guns at 13 or 63 nautical miles in 2035 and 10 

guns at 83 nautical miles. At the low end would be Options 3 and 4, which have no Advanced Gun Systems and 

small numbers of large surface combatants. Those options’ surface combatants would be able to deploy 29 

guns at 13 or 63 nautical miles but none at 83 nautical 

miles. The results for magazine capacity would be similar, 

although the LPD-17 fire-support ships in Option 5 

would have larger magazines than the Zumwalt destroyers (by 300 shells). 

Total Amount of Lift on Amphibious 

and Maritime Prepositioning Ships

The key measure for transporting and sustaining Marine 

Corps units in naval expeditionary operations is the total 

lift for troops and equipment provided by the Navy’s 

amphibious warfare and maritime prepositioning forces. 

Currently, that total transport capacity is equal to 5.1 

Marine expeditionary brigades (MEBs)—2.1 on amphibious warfare ships and 3.0 on conventional maritime 

prepositioning ships. Until recently, the Navy’s goal for 

such lift was 5.5 MEBs, and the Marine Corps desired 

6.0 MEBs (3.0 of amphibious lift and 3.0 of conventional prepositioning lift). 

As it introduces sea basing, the Navy is rethinking how 

much lift it needs and how much it can afford. A squadron of MPF(F) ships would provide 1.0 MEB’s worth of 

lift. But that squadron would be more flexible and closer 

in capability to an amphibious task force (with one MEB 

embarked) than to a conventional maritime prepositioning squadron, which would have to use port facilities to 

unload its equipment. Under the 2006 shipbuilding plan, 

the Navy would have a total of about 4.0 MEBs’ worth of 

lift: 2.0 MEBs on amphibious ships, 1.0 on the new 

MPF(F) squadron, and 1.0 on an existing conventional 

maritime prepositioning squadron. Once it completes 

operations in Iraq, the Marine Corps does not anticipate 

having enough sets of equipment available for afloat 

prepositioning to support more than two Marine expeditionary brigades. 

Of the options in this analysis, the sea-basing alternative 

(Option 5) would provide the most lift by 2035, 3.3 

MEBs (see Figure 4-13). Option 1, which would make 

across-the-board reductions in the fleet, would be next 

with 3.2 MEBs. However, whereas Option 5’s lift capability would be provided entirely by amphibious warfare 

ships or sea-basing-capable MPF(F) ships, Option 1’s 

total includes 1.0 MEB transported by conventional maritime prepositioning ships. With two sea-basing squadrons and the ability to surge one-half to two-thirds of its 

amphibious ships, Option 5 could muster nearly 3.0 

MEBs to conduct an opposed amphibious assault. Option 1, in comparison, would be able to generate only a 

little less than 2.0 MEBs to support such an assault. 

The surface combatant, submarine, and aircraft carrier 

alternatives (Options 2, 3, and 4) would effectively end 

the Navy’s ability to conduct a forcible-entry operation.

11. To reduce costs, the Navy has eliminated a storeroom that could 

have been converted to hold 328 additional rounds.

12. Another factor affecting firepower during a conflict is that when 

ships’ gun barrels wear out, they must be replaced in port; they 

cannot be replaced at sea. The Advanced Gun System has a barrel 

life of about 3,000 rounds; the 5-inch, 62-caliber guns, 1,500 

rounds; and the conventional 5-inch, 54-caliber guns, 8,000 

rounds.
CHAPTER FOUR COMPARING THE OPTIONS BY VARIOUS MEASURES OF CAPABILITY 73

Figure 4-11.

Amount of Gunfire Support That Could Be Surged to a Theater of Operations in 

Wartime Under Alternative Force Structures

(Number of guns)

Source: Congressional Budget Office.

Option

1

Option

2

Option

3

Option

4

Option

5

Navy's

Plan

0

20

40

60

80

100

Range of 13 Nautical Miles

Option

1

Option

2

Option

3

Option

4

Option

5

Navy's

Plan

0

20

40

60

80

100

Option

1

Option

2

Option

3

Option

4

Option

5

Navy's

Plan

0

20

40

60

80

100

Range of 63 Nautical Miles

Option

1

Option

2

Option

3

Option

4

Option

5

Navy's

Plan

0

20

40

60

80

100

Option

1

Option

2

Option

3

Option

4

Option

5

Navy's

Plan

0

20

40

60

80

100

Option

1

Option

2

Option

3

Option

4

Option

5

Navy's

Plan

0

20

40

60

80

100

Range of 83 Nautical Miles

2020 2035
74 OPTIONS FOR THE NAVY’S FUTURE FLEET

Figure 4-12.

Amount of Magazine Capacity That Could Be Surged to a Theater of Operations in 

Wartime Under Alternative Force Structures

(Number of shells)

Source: Congressional Budget Office.

Option

1

Option

2

Option

3

Option

4

Option

5

Navy's

Plan

0

10,000

20,000

30,000

40,000

50,000

Range of 13 Nautical Miles

Option

1

Option

2

Option

3

Option

4

Option

5

Navy's

Plan

0

10,000

20,000

30,000

40,000

50,000

Option

1

Option

2

Option

3

Option

4

Option

5

Navy's

Plan

0

10,000

20,000

30,000

40,000

50,000

Range of 63 Nautical Miles

Option

1

Option

2

Option

3

Option

4

Option

5

Navy's

Plan

0

10,000

20,000

30,000

40,000

50,000

Option

1

Option

2

Option

3

Option

4

Option

5

Navy's

Plan

0

10,000

20,000

30,000

40,000

50,000

Option

1

Option

2

Option

3

Option

4

Option

5

Navy's

Plan

0

10,000

20,000

30,000

40,000

50,000

Range of 83 Nautical Miles

2020 2035
CHAPTER FOUR COMPARING THE OPTIONS BY VARIOUS MEASURES OF CAPABILITY 75

Figure 4-13.

Total Lift Provided by Amphibious and Maritime Prepositioning Forces in 

2020 and 2035 Under Alternative Force Structures

(Number of Marine expeditionary brigades transported)

Source: Congressional Budget Office.

Note: MPF(F) =Maritime Prepositioning Force (Future); MPS =maritime prepositioning squadron.

Today Navy's Plan Option 1 Option 2 Option 3 Option 4 Option 5

0

1

2

3

4

5

6

Today Navy's Plan Option 1 Option 2 Option 3 Option 4 Option 5

0

1

2

3

4

5

6

Amphibious Ships MPF(F) Squadrons Conventional MPS Squadrons

2035

2020
76 OPTIONS FOR THE NAVY’S FUTURE FLEET

Table 4-1.

Capabilities of the Navy’s Battle Force Ships in 2020 and 2035 

Under Alternative Force Structures

Continued

299 300 296 278 323 285 326

34 35 32 34 35 36 35

4.8 4.2 4.1 4.2 5.0 4.4 5.2

19.4 19.0 19.2 20.2 18.0 16.4 18.0

100,000 102,000 102,000 103,000 106,000 109,000 114,000

13.7 13.6 13.5 13.4 14.5 14.0 14.9

76 70 67 63 81 46 82

Forward deployed in peacetime 67 79 78 68 78 36 78

Surged in wartime 138 163 149 134 151 99 162

Number of VLS Cells

Forward deployed in peacetime 3,200 3,200 3,000 3,100 3,100 2,100 3,300

Surged in wartime 6,900 7,000 6,600 6,800 6,700 5,600 7,100

2,800 2,800 3,100 2,800 2,800 2,700 2,900

3,900 3,900 3,900 4,000 3,900 3,500 4,000

78/29/6 81/31/10 72/23/0 72/23/0 82/33/10 63/0/0 82/33/10

3.9 3.8 3.8 3.8 4.1 5.1d 4.0

Capabilities in 2020

(Aircraft

Total Lift Capacity (MEBs)

(At 13/63/83 nautical miles)

(Billions of 2007 dollars)

Number of Forward-Deployed

Major Combatants

Number of Helicopter Hangars

Day by Carrier Aircraft in Wartime

Number of Guns Providing Naval

Fire Support in Wartime

Total Covert-Mission Days

Memorandum:

Total Crew Size

(Number of sailors)

Direct Operation and Support

Option 1

(Across-theboard cuts) Fleeta

Option 5

Plan

Current

Number of Targets Attacked per 

Number of Battle Force Ships

Number of Strike Groups

Total Full-Load Displacementb

(Millions of long tons)

Provided by Attack Submarines

Average Ship Age (Years)

Costs for Shipsc

(Sea basing)

Option 4

carriers)

Option 3

(Submarines)

Option 2

(Surface

combatants)

Navy's 2006

Shipbuilding
CHAPTER FOUR COMPARING THE OPTIONS BY VARIOUS MEASURES OF CAPABILITY 77

Table 4-1.

Continued

Source: Congressional Budget Office.

Note: VLS = vertical launch system; MEB = Marine expeditionary brigade.

a. At the beginning of 2006.

b. The weight of a ship when it is fully equipped and loaded with weaponry, crew, and supplies.

c. Direct operation and support costs are those directly related to the number of ships in the fleet (such as costs for fuel, supplies, and compensation of personnel).

d. Includes all three conventional maritime prepositioning squadrons, even if they are deployed to Iraq.

217 246 219 189 255 285 294

19 21 18 17 18 36 24

3.6 3.0 3.0 3.1 3.9 4.4 5.0

18.0 17.6 17.4 18.0 17.9 16.4 16.3

65,000 66,000 68,000 73,000 72,000 109,000 99,000

9.2 9.4 9.0 9.3 10.0 14.0 13.1

57 60 51 43 74 46 74

Forward deployed in peacetime 57 84 66 56 66 36 72

Surged in wartime 127 190 133 123 139 99 172

Number of VLS Cells

Forward deployed in peacetime 1,900 2,000 1,800 1,700 1,700 2,100 2,400

Surged in wartime 4,100 4,600 3,800 3,700 3,500 5,600 5,400

1,900 1,700 3,100 1,700 1,700 2,700 2,400

2,300 2,300 2,900 4,200 2,300 3,500 4,200

33/33/6 35/35/10 29/29/0 29/29/0 43/43/10 63/0/0 41/41/10

3.2 3.0 3.0 3.0 3.3 5.1d 4.0

Option 4

Capabilities in 2035

(At 13/63/83 nautical miles)

Direct Operation and Support

Costs for Shipsc

(Billions of 2007 dollars)

Number of Forward-Deployed

(Millions of long tons)

Average Ship Age (Years)

Total Lift Capacity (MEBs)

Number of Targets Attacked per 

Day by Carrier Aircraft in Wartime

Number of Guns Providing Naval

Fire Support in Wartime

Major Combatants

Number of Helicopter Hangars

Total Covert-Mission Days

Provided by Attack Submarines

Total Crew Size

(Number of sailors)

Number of Battle Force Ships

Number of Strike Groups

Total Full-Load Displacementb

Option 5 Current Shipbuilding

board cuts) combatants) (Submarines) carriers) (Sea basing) Fleeta Plan

(Across-the- (Surface Option 3 (Aircraft

Option 1 Option 2 Navy's 2006

Memorandum:
78 OPTIONS FOR THE NAVY’S FUTURE FLEET

They would retain only 1.0 MEB’s worth of lift on amphibious ships—not all of which would be available at 

one time—and would buy enough conventional maritime prepositioning ships for another 2.0 MEBs. 

Implications of the Analysis

The central implication of CBO’s analysis is that unless 

shipbuilding budgets increase or the Navy designs and 

builds much cheaper ships, the size of the fleet will fall 

substantially. The fleet’s capability will not necessarily 

decline as well according to every measure, however. By 

such measures as long-range gunfire, number of helicopter hangars, carrier targets per day, and covert-mission 

days provided by submarines, one or more of the options 

that CBO examined would provide more capability than 

today’s fleet (see Table 4-1 on page 76). Of course, the 

Navy’s more expensive plan would provide greater 

amounts of most types of capability than would most of 

the options. Nevertheless, the number of strike groups 

and the amount of amphibious and maritime prepositioning lift would fall substantially from today’s levels 

under each option as well as under the Navy’s shipbuilding plan.

Moreover, the trade-offs that would have to be made to 

keep Navy spending at recent funding levels are considerable. If history is a guide, Option 1, with its across-theboard cuts to the four major areas of naval warfare, would 

appear to be the path that the Navy is on. The result of 

that option is a balanced fleet but with only 211 ships. 

Option 4, which would maintain an 11-carrier force, 

would result in the smallest fleet, 181 battle force ships. 

The substantial power-projection capabilities provided by 

aircraft carriers and their air wings require sizable cuts in 

every other category of ship. Option 3, which would 

invest heavily in submarines, would also require large 

trade-offs with other major warfare categories, but not to 

the same degree as Option 4. The largest force structures 

would result from Options 2 and 5, which would maintain fleets of about 230 to 240 ships by purchasing large 

numbers of relatively inexpensive platforms: littoral combat ships in Option 2 and MPF(F) ships in Option 5.
APPENDIX

A

Effect of the Options on the

Amount of Shipbuilding Work

As explained in Chapter 3, the total weight of the 

Navy ships purchased each year, on average, offers an 

indication of the workload for shipyards that build naval 

vessels. Such weight is typically measured by a surface 

ship’s lightship displacement (known as Condition A displacement for submarines), which is the weight of the 

vessel itself without crew members, materiel, weapons, or 

fuel on board.

Since 2000, the Navy has ordered ships at an average rate 

of almost 90,000 tons of lightship and Condition A displacement per year. The Navy’ 2006 shipbuilding plan 

would raise that average to 97,000 tons a year (see 

Figure A-1). The five lower-cost alternatives in this study 

would yield orders averaging 45,000 to 77,000 tons annually for at least 30 years—a substantial reduction from 

recent levels.

To illustrate the potential impact of those options on 

shipbuilding, the Congressional Budget Office (CBO) 

computed two indexes. One indicates how the amount of 

lightship or Condition A displacement allocated to shipyards under the different options compares with the 

amounts allocated over the past six years. The second 

index does the same thing with budget authority for specific ship purchases.

The Split Between Shipyard Work and 

Government-Furnished Equipment

Whenever the Navy orders a warship, a percentage of the 

ship’s funding is used by the government to purchase 

components that the shipbuilder will integrate into the 

vessel. Those components are referred to as governmentfurnished equipment. Nearly all of the remaining money 

is for the labor and materials that a shipyard uses to construct the vessel.1

 For example, if lawmakers appropriate 

$1.2 billion to buy an Arleigh Burke (DDG-51) class 

destroyer, the shipyard building the vessel receives about 

half that amount. The rest goes to purchase governmentfurnished equipment for the ship. 

The percentage of funding that a shipyard receives directly varies considerably by type of ship (see Table A-1). 

For logistics ships such as T-AKEs, shipyards receive more 

than 90 percent of the budget authority appropriated for 

construction, reflecting the lack of major combat systems, 

weapons, or complex propulsion systems on those vessels. 

The shipyard’s percentage is also high for aircraft carriers 

because the sheer size of a Nimitz class carrier accounts 

for most of the cost of the ship, even though the government is providing the combat systems and the nuclear 

propulsion, among other things. The funding breakdown 

also varies within a particular class of ships, but that variation is relatively small for the purposes of this analysis.

The funding that shipyards receive from the federal government to build new vessels does not represent their 

entire business. Other tasks, such as designing, repairing,

1. Six major U.S. shipyards build nearly all of the Navy’s current 

ships. Those shipyards are Newport News, Avondale, and Ingalls, 

owned by Northrop Grumman; and Electric Boat, Bath Iron 

Works, and National Steel and Shipbuilding Company, owned 

by General Dynamics. For the past 10 years, Newport News’ business has consisted mostly of constructing and refueling nuclearpowered aircraft carriers and sharing in the construction of attack 

submarines (along with Electric Boat). Avondale has built 

medium-sized amphibious ships and some kinds of support ships, 

and Ingalls has mainly constructed large surface combatants and 

large-deck amphibious assault ships. Bath Iron Works has mostly 

built destroyers, and National Steel and Shipbuilding Company 

has typically built a variety of combat logistics and support ships. 

On the basis of the contracts that the Navy has awarded, it appears 

that (at least initially) the new littoral combat ship will be built 

not by any of those shipyards but by smaller commercial yards 

working with Lockheed Martin or General Dynamics.
80 OPTIONS FOR THE NAVY’S FUTURE FLEET

Figure A-1.

Average Annual Amount of Lightship and Condition A Displacement Allocated to 

Major Shipyards Under Alternative Force Structures, 2005 to 2035

(Thousands of long tons)

Source: Congressional Budget Office.

or converting ships, contribute to a shipyard’s revenues. 

Some of the major shipyards also construct or repair 

commercial vessels; however, such business is small and 

increasingly rare.

Estimating Changes in Workload by 

Type of Ship

Using data provided by the Navy, CBO calculated the 

average annual construction of major types of ships that 

occurred between 2000 and 2005 in terms of displacement and funding. The funding numbers do not represent revenues or outlays but the amount of budget authority that will eventually be used to make payments to 

individual shipbuilders as they complete work according 

to the terms of their contracts. Those numbers exclude 

funding for government-furnished equipment.

Between 2000 and 2005, construction and refueling of 

aircraft carriers accounted for an average of about 13,000 

tons of displacement and almost $1.4 billion of budget 

authority allocated to shipyards (see Figure A-2). Shipyards received an average of about $1.8 billion per year to 

build 21,000 tons of large surface combatants and about 

$2.2 billion per year to construct attack submarines at an 

average rate of 5,400 tons annually. (Ballistic missile submarines are not included in Figure A-2 because the Navy 

has not built any since 1989.) The shipyards building 

large and medium-sized amphibious ships, combat logistics ships, and support ships received between $300 million and $800 million per year, on average, to construct 

5,000 tons to 34,000 tons of those vessels.

In addition to those recent averages, CBO computed 

five-year averages for displacement and budget authority 

during the 2006-2035 period under the Navy’s plan and 

the five options considered here. For comparability, CBO 

converted those past and projected figures into a set of indexes; in each index, 1.0 was set to equal the 2000-2005 

average for displacement or budget authority for a given 

category of ships, and the numbers for future five-year 

periods were divided by the past averages. Thus, for a 

given type of ship in a particular period, an index value 

higher than 1.0 suggests that the category of shipbuilding 

would be allocated at least as much tonnage or funding 

for new construction as in the past six years. Conversely, 

Average,

2000-2005

Navy's Plan Option 1 Option 2 Option 3 Option 4 Option 5

0

20

40

60

80

100
APPENDIX A EFFECT OF THE OPTIONS ON THE AMOUNT OF SHIPBUILDING WORK 81

Table A-1.

How Budget Authority for Ship Construction Is Allocated, by Ship

(Percent)

Source: Congressional Budget Office based on data from the Navy.

a. Components (such as weapons or propulsion systems) that the government purchases and gives to the shipbuilder to integrate into a 

vessel.

an index value lower than 1.0 suggests that the ship category would be allocated less tonnage or funding over that 

period than in recent years. 

Aircraft Carriers

Under the Navy’s shipbuilding plan and the option that 

would maintain 11 carriers (Option 4), the index for carrier construction would be greater than 1 throughout the 

30-year period of this study with respect to both lightship 

displacement and budget authority (see Figures A-3 and 

A-4). Under the remaining options—which would reduce the carrier force to seven or eight by delaying the 

CVN-21 program by 15 to 20 years—the displacement 

index would be less than 1.0 from 2006 to 2020. The 

budget authority index would be higher than 1.0, partly 

because there is substantial funding (more than $3 billion 

per ship) associated with the overhaul and refueling of 

existing Nimitz class nuclear-powered carriers. However, 

those activities do not represent new construction and 

thus are not reflected in the lightship displacement index. 

Large Surface Combatants

Throughout the projection period, the displacement and 

budget authority indexes for large surface combatants 

would be near or above 1.0 under the Navy’s plan and the 

surface combatant alternative (Option 2). The only exception would occur during the 2026-2030 period under 

Option 2, when new cruiser construction had ended but 

new destroyer construction was limited to one ship per 

year. Option 1, with its across-the-board cuts, would 

maintain a steadier rate of construction than Option 2 

according to both indexes, but at a lower level overall. 

The other alternatives would construct large surface combatants at about half the recent levels between 2016 and 

2030.2

Submarines

According to both the budget authority and displacement 

indexes, submarine construction would not fall below the 

historical average at any time through 2035 under any of 

the options in this analysis. All of the alternatives would 

build at least one attack submarine per year, on average, 

which is slightly more than in the 2000-2005 period. In 

addition, all of the options would buy a new class of ballistic missile submarine during most of the 30-year

period.

The highest levels of submarine construction would 

occur under the Navy’s plan and Option 3, because they 

would maintain the largest fleets of attack and ballistic 

missile submarines. The Navy’s plan would keep 48 

attack submarines and 14 ballistic missile submarines, 

whereas Option 3 would maintain 55 attack submarines, 

four guided missile submarines, and 10 ballistic missile 

submarines.

Large Amphibious Ships

By both of the indexes, only the sea-basing alternative 

(Option 5) would maintain a steady rate of construction 

of LHA or LHD class amphibious assault ships through 

2035. That is a function of the option’s goal of maintainCVN-77 Aircraft Carrier 20 79 1 100

Carrier Refuelings 13 85 2 100

SSN-774 Attack Submarine 33 66 1 100

DDG-51 Destroyer 48 50 2 100

LHD-8 Amphibious Assault Ship 18 78 4 100

LPD-17 Amphibious Transport Dock 25 74 1 100

T-AKE Dry Cargo/Ammunition Ship 8 92 0 100

Government-Furnished Shipyard's Labor

Equipmenta and Materials Other Total

2. CBO counted the LPD-17 fire-support ships in Option 5 as large 

surface combatants for the purposes of this analysis.
82 OPTIONS FOR THE NAVY’S FUTURE FLEET

Figure A-2.

Average Annual Amount of Lightship Displacement and Budget Authority, by 

Major Category, 2000 to 2005

Source: Congressional Budget Office based on data provided by the Navy.

Aircraft

Carriers

Large

Surface

Combatants

Submarines Large

Amphibious

Ships

Medium-Sized

Amphibious

Ships

Combat

Logistics and

Support Ships

0

5

10

15

20

25

30

35

40

Aircraft

Carriers

Large

Surface

Combatants

Submarines Large

Amphibious

Ships

Medium-Sized

Amphibious

Ships

Combat

Logistics and

Support Ships

0.0

0.5

1.0

1.5

2.0

2.5

Lightship Displacement (Thousands of long tons)

Budget Authority (Billions of 2007 dollars)

0
APPENDIX A EFFECT OF THE OPTIONS ON THE AMOUNT OF SHIPBUILDING WORK 83

Figure A-3.

Lightship Displacement Allocation Index, by Major Ship Category, Under 

Alternative Force Structures

Source: Congressional Budget Office.

Note: For each category of ships, the average annual amount over the 2000-2005 period (shown in Figure A-2) becomes 1.0 in the index. For 

the projection period, numbers greater than 1.0 indicate conditions better than in the 2000-2005 period, and numbers less than 1.0 

indicate conditions worse than in that period.

2000-

2005

2006-

2010

2011-

2015

2016-

2020

2021-

2025

2026-

2030

2031-

2035

0

1

2

3

4

5

2000-

2005

2006-

2010

2011-

2015

2016-

2020

2021-

2025

2026-

2030

2031-

2035

0

1

2

3

4

5

Aircraft Carriers Large Surface Combatants

2000-

2005

2006-

2010

2011-

2015

2016-

2020

2021-

2025

2026-

2030

2031-

2035

0

1

2

3

4

5

Submarines

2000-

2005

2006-

2010

2011-

2015

2016-

2020

2021-

2025

2026-

2030

2031-

2035

0

1

2

3

4

5 Large Amphibious Ships

2000-

2005

2006-

2010

2011-

2015

2016-

2020

2021-

2025

2026-

2030

2031-

2035

0

1

2

3

4

5

Navy's Plan Option 1 Option 2 Option 3 Option 4 Option 5

Medium-Sized Amphibious Ships

2000-

2005

2006-

2010

2011-

2015

2016-

2020

2021-

2025

2026-

2030

2031-

2035

0

1

2

3

4

5 Combat Logistics and Support Ships
84 OPTIONS FOR THE NAVY’S FUTURE FLEET

Figure A-4.

Budget Authority Allocation Index, by Major Ship Category, Under 

Alternative Force Structures

Source: Congressional Budget Office.

Note: For each category of ships, the average annual amount over the 2000-2005 period (shown in Figure A-2) becomes 1.0 in the index. For 

the projection period, numbers greater than 1.0 indicate conditions better than in the 2000-2005 period, and numbers less than 1.0 

indicate conditions worse than in that period.

2000-

2005

2006-

2010

2011-

2015

2016-

2020

2021-

2025

2026-

2030

2031-

2035

0

1

2

3

4

5

6

7

2000-

2005

2006-

2010

2011-

2015

2016-

2020

2021-

2025

2026-

2030

2031-

2035

0

1

2

3

4

5

6

7

Aircraft Carriers Large Surface Combatants

2000-

2005

2006-

2010

2011-

2015

2016-

2020

2021-

2025

2026-

2030

2031-

2035

0

1

2

3

4

5

6

7

Submarines

2000-

2005

2006-

2010

2011-

2015

2016-

2020

2021-

2025

2026-

2030

2031-

2035

0

1

2

3

4

5

6

7 Large Amphibious Ships

2000-

2005

2006-

2010

2011-

2015

2016-

2020

2021-

2025

2026-

2030

2031-

2035

0

1

2

3

4

5

6

7

Navy's Plan Option 1 Option 2 Option 3 Option 4 Option 5

Medium-Sized Amphibious Ships

2000-

2005

2006-

2010

2011-

2015

2016-

2020

2021-

2025

2026-

2030

2031-

2035

0

1

2

3

4

5

6

7 Combat Logistics and Support Ships
APPENDIX A EFFECT OF THE OPTIONS ON THE AMOUNT OF SHIPBUILDING WORK 85

ing nine expeditionary strike groups as well as buying two 

MPF(F) squadrons, each of which would have three large 

amphibious ships. 

The Navy’s 2006 shipbuilding plan would provide a 

higher level of construction than in recent years, except 

during the 2016-2020 period, when no large amphibious 

ships would be built. Option 1, the across-the-board cuts, 

would also exceed recent construction levels through 

2035 (except from 2016 to 2020) because it would maintain seven expeditionary strike groups and buy one 

MPF(F) squadron. The surface combatant, submarine, 

and carrier options, by contrast, would construct few or 

no large amphibious ships until the 2026-2030 period.

Medium-Sized Amphibious Ships

For most of the 2006-2035 period, both the budget allocation and displacement indexes would fall below the 

2000-2005 level for medium-sized amphibious ships, 

such as LPDs and LSDs, under most of the options. Even 

the Navy’s plan would significantly reduce funding for 

ships during the 2011-2020 and 2031-2035 periods.3 All 

of the options except the sea-basing alternative would 

build virtually no medium-sized amphibious ships for the 

next 30 years. Under those options, the LPD-17 program 

would be terminated and no LSD replacements or 

MPF(F) ships would be purchased.

Combat Logistics and Support Ships 

In the near term, the budget authority and displacement 

allocated to combat logistics and support ships would be 

less than half the recent average under Options 2, 3, and 

4. By contrast, the Navy’s plan and Options 1 and 5 

would keep construction of those ships at or above the 

recent level through 2015.

By 2016, both indexes would fall below the 2000-2005 

level under most of the alternatives. However, they would 

rebound in the 2020s as new oilers and fast combat support ships were purchased to replace ships that were 

retired from service. Overall, the sea-basing alternative 

(Option 5) would maintain the highest level of construction because of the large number of support ships associated with its two MPF(F) squadrons.

3. CBO included the two new command ships envisioned in the 

Navy’s plan in this category because it assumed that those ships 

would be based on an LPD-17 hull.