U.S. Naval Construction is Adrift: It’s Time to Course-Correct

On October 13, 2025, the U.S. Navy celebrated its 250^th anniversary, an occasion as fitting for reflection on its distinguished past as for discussion about its future. As the U.S. Navy sails into the second half of its third century, it faces force development challenges that directly threaten its ability to support vital American national interests for decades ahead. To course correct, military and civilian policymakers must better understand how unstable procurement, inefficient design and construction methods, and fleet design that encourages an uncompetitive supplier marketplace undermine the Navy’s ability to maintain readiness and grow. 

Complacency is No Longer an Option

While the U.S. Navy remains the world’s most capable naval force, its inability to design and construct ships quickly and affordably enough to meet battle force growth goals threatens its ability to protect core U.S. national interests. 

The service’s principal strategic competitor, the People’s Liberation Army Navy (PLAN), is projected to reach a battle force of 395 ships by the end of this year, roughly 100 more than the U.S. Navy. This expansion is the result of 15 years of heightened shipbuilding and procurement, with the PLAN expected to reach and is on 435 ships by 2030. In contrast, the U.S. Navy’s battle force has sat below 300 ships since 2003, and is no larger than it was at that time.

Despite a 2016 Congressional mandate for a 355-ship fleet and the Navy’s own, higher target of 381 ships set in 2023, the service has failed to raise production rates enough to make progress towards either goal. At 296 ships today, the Navy is roughly 25 ships below the trajectory needed to reach the 355-ship benchmark by 2034.

The Navy’s fleet stagnation is not a problem that can be magically solved with higher shipbuilding appropriations. The fleet’s size has continued to stagnate despite a general trend of increasing inflation-adjusted appropriations over the past decade.

For the Navy to be able to credibly convert greater shipbuilding resources into credible, on-schedule progress toward either of its battle force targets, it needs to improve the incentives it sets for a hollowed-out U.S. maritime industry. Improving the service’s procurement, design and construction, and fleet composition choices are essential for this reset.

Crippling Delays

The status quo in U.S. naval design and construction is unsustainable. In April 2024, the Navy’s 45-Day Shipbuilding Review found that most major ship construction program for the service was facing delays of a year or more. Even the Columbia ballistic missile submarine class, the Navy’s top acquisition priority since 2013, was projected to be delayed by a year to sixteen months.

Several factors contribute to the Navy’s procurement woes: fixed yet ever-changing force-level goals, faulty design and construction methods, and misplaced fleet design priorities. Congressional Research Service naval analyst Ronald O’Rourke argued that, taken together, these issues have produced challenges more severe than any point since the Navy’s post-Vietnam nadir in the 1970s. While workforce shortages in shipbuilding are well recognized, deeper problems in how the Navy buys, designs, and builds ships remain less appreciated.

Procurement Certainty

Currently, the Navy plans its acquisitions based on annual five-year and thirty-year shipbuilding plans issued with each budget request. These plans set construction targets for ships of various classes to reach a specific fleet size and force balances by their designated timelines.

This kind of long-term planning is sensible in theory. In practice, however, the Navy so frequently changes its force size goals in response to political and budgetary pressure that these precise targets lead to significantly varying procurements each year. These fluctuating demand signals create uncertainty for the maritime industry, discouraging investment in workforce development and infrastructure initiatives necessary to increase production capacity.

For example, the Navy’s FY 2024 budget request projected the procurement of 7 ships in FY 2025. When the FY 2025 budget request arrived, the request fell to 6 ships for that year, and Congress ultimately appropriated funds for 5, the fewest since FY 2008.

The current budget year reflects similar uncertainty. In its FY 2024 budget, the Navy projected 13 ship procurements for FY 2026. That target fell to 11 ships in the FY 2025 plan. However, by the FY 2026 request, additional mandatory defense funds provided through the budget reconciliation process increased the total to 19 ships. Navalists welcomed the greater investment in shipbuilding, but such variability is a problem for converting resources into results.

These recent demand signal swings reflect a longer-term pattern. Between 2001 and 2015, the Navy changed its fleet size and composition targets 9 separate times. Any plan must adapt to changing circumstances, but force planning, especially in long-term efforts like shipbuilding, needs a more gradual approach. Constantly revising fleet size goals undermines strategic consistency and leaves the maritime industrial base unable to plan, invest, or expand with confidence. 

The Navy can, and should, plan toward an overall fleet target, but a more effective way to expand its force would be to adopt a “continuous construction” or “rate-centered” production model. 

Under this model, the Navy would make the same annual investments across ship classes and target a certain fleet size range rather than a precise number of ships in the battle force. Instead of continually adjusting front-end procurement to match frequently changing force goals, the Navy would manage its fleet size on the back-end by managing decommissioning. The continuous production model already has a proven track record with U.S. allies, including the Japanese Maritime Self-Defense Force, which employs continuous construction to manage the size of its submarine force.

Fundamentally reimagining naval production in this way and setting stable, feasible production targets towards a desired fleet size range would likely require the work of an independent commission. In the 2023 National Defense Authorization Act, Congress created the “National Commission on the Future of the Navy” to provide needed answers to these force structure questions.  Frustratingly, Congress repeatedly delayed the Commission’s ability to start its work by failing to appoint all of its members until well after its initial report deadline passed.

Though the body was finally fully appointed, the Commission has had to operate on a truncated timeline, disillusioning members and leading to resignations. Legislators urgently need to extend the Commission’s deadline by an additional six months to a year to allow the deliberate approach originally envisioned. A transformative solution like the continuous production model is far less likely to succeed without well thought-out force targets to guide it.

Leveraging Commercial Lessons in Design and Construction

U.S. policymakers can learn additional lessons from East Asian allies in ship design principles to unlock higher naval production rates.

In interviews with Japanese and South Korean shipbuilders, former U.S. shipyard executive Peter Jaquith found that both navies prioritize ship designs optimized for rapid, efficient construction. 

By opting for slightly larger, less cramped designs for various ship classes compared to U.S. counterparts, East Asian shipbuilders enable easier worker access, simpler piping systems, and additional space for future upgrades. When deployed effectively, these principles result in greater savings from lower labor costs than from the additional materials required for larger construction. 

A core constraint for U.S. naval production is the limited size and retention challenges of its maritime industrial workforce. Designing ships that align with the nation’s actual capacity to build – and rebuild – quickly should therefore be a central priority.

A fundamental best practice for the Navy to adopt is prioritizing arriving at a robust, mature design prior to the start of construction. The Navy’s 45-day shipbuilding review found that the lead ship of the Constellation-class Frigate, also known as the FFG(X) program, was over 3 years behind schedule. 

The primary cause was a series of ongoing design changes, after construction began, that altered an already-mature Franco-Italian design to conform with an extensive list of highly prescriptive Navy mission requirements. Rather than waiting for a final design, the Navy and the Constellation’s builder began construction early, hoping to avoid delays. Paradoxically, this effort to save time only resulted in larger delays by requiring prior work to be later redone. 

This process of designing a ship while building it, known as concurrency, plagued the ill-fated Littoral Combat Ship and significantly delayed delivery of the first Ford-class carrier, as well. The Government Accountability Office has long called for the Navy to ensure it arrives at complete designs before ship construction begins, based on iterative design feedback and prototyping, mirroring practices in the commercial sector.

Rebalancing the Fleet for a More Robust Shipbuilding Market

Beyond ship design and construction, the Navy should consider a long-term fleet redesign that allows the United States to better leverage and grow its commercial shipyards. Seven prime shipbuilders, Bath Iron Works and Electric Boat of General Dynamics, Huntington Ingalls Industries, Fincantieri Marinette Marine, Austal USA, and the National Steel and Shipbuilding Company (NASSCO) receive the large majority of Navy procurement contracts. In most cases, only one or two of each of these shipyards produce key ship classes, leading to a monopsonistic market that complicates efforts to control costs and schedules while keeping suppliers healthy.

Most of these builders specialize in the high-end, but expensive and time-consuming, ships of the current Navy battle force, sometimes called “exquisite” platforms. While quite capable, these ship classes are more difficult to produce or replace if lost, requiring specialized construction techniques that commercial shipyards are ill-equipped to meet. The Navy recognizes these risks and is already trying to rebalance the fleet away from overreliance on exquisite platforms and towards more vessels that can hold the enemy at risk, a concept known as Distributed Maritime Operations (DMO). 

The Navy could better support its doctrinal goals, inject competition into its supplier marketplace, and strengthen the overall U.S. maritime industrial base by incorporating more vessels able to be commercially built into its fleet plan.  For example, as a recent Hudson Institute study found, if the Navy procured fewer higher-end, exquisite platforms, such as destroyers, it could reinvest those funds into a greater number of smaller manned and unmanned surface and subsurface vessels and into recapitalizing crucial support vessels such as oilers and roll-on/roll-off cargo ships. 

Many of these smaller and auxiliary ships do not require the same degree of specialized construction as higher-end battle force vessels and could likely be built in commercial shipyards. Sourcing bids for these ship classes to commercial shipbuilders would inject new competition into an otherwise monopsonistic defense marketplace. Navy contracts for commercial-construction compatible ship-types would also support a struggling U.S. maritime industrial base. Finally, better leveraging commercial builders would free up capacity at the naval prime’s shipyards to, in turn, clear their own backlogs of higher-end U.S. vessels. 

As with transitioning toward a continuous production model, redesigning the fleet around what the United States can build requires sustained political commitment. A blue ribbon panel like the Commission on the Future of the Navy would be well-equipped to provide this sort of road-map, but Congress should be ready to make greater use of multi-year procurement appropriations to add enough industry certainty to invest toward meeting such a goal.

Conclusion

The U.S. Navy’s procurement, design, and construction problems are arguably more numerous than at any point in the past fifty years. On the service’s 250^th anniversary, ensuring that the Navy can achieve its own plans to expand its force, and if need be, replace its losses, is crucial for its future ability to deter. Large investments in the maritime industrial base in an environment of business-as-usual naval procurement incentives will not result in the higher shipbuilding rates the Navy needs unless these institutional hurdles can be surmounted.

First, shipbuilders will not risk investing in expanded production capacity unless Congress offers them far greater certainty about future procurement rates. Instead of constantly changing precise battle force targets, the Navy should focus on a consistent demand signal for the maritime industrial base by adopting a continuous production model.

Second, the Navy needs to adopt best practices widespread in other industries to ensure that it can design and construct new ship classes on time and on budget. Optimizing ship designs for rapid, efficient construction and maintenance reduces labor costs and keeps the future in mind. More fundamentally, avoiding the short-sighted temptation to build ships before their designs are finished will save far more time and money on balance.

Finally, the Navy should rebalance its fleet to incorporate greater proportions of smaller and auxiliary ships that are faster and less expensive to produce and are capable of being built in commercial shipyards. Optimizing U.S. fleet composition and doctrine for what the United States can reliably produce will put the Navy on a more sustainable long-term footing to grow and have the capacity to replace losses.

For these options to be a possibility, Congressional action to support the Navy’s course correction is essential. Legislators should extend the deadline of the Commission on the Future of the Navy and increase their tolerance of multi-year procurement contracts, keeping the end-goals of consistent demand signals toward a long-term plan front-of-mind. Changing the American shipbuilding industry’s incentives will, in turn, change the scope of the goals available to the Navy in its next 250 years.

Views expressed are the author’s own and do not represent the views of GSSR, Georgetown University, or any other entity. Image Credit: USNI