The Navy argued Fiscal Responsibility Act (FRA) budget caps imposed “hard choices” on the fiscal year 2025 president’s budget request (PB25) that partially caused the service to lower its ship procurement spending to six ships.
“Aligned with Congressional intent, this budget delivers the most ready and lethal Naval Force feasible under the FRA budget caps. These caps, paced well below even historical inflation targets, force hard choices,” the Navy’s FY ‘25 budget request highlights book said.
It said FRA caps combined with residual effects of recent years’ inflation, workforce challenges and higher labor and supply costs drove shipbuilding costs by about 20 percent over the last few years,
“Hard choices were made, particularly in the procurement accounts. An analytic review of production performance identified areas where we could take risks to comply with the congressional fiscal caps.”
This translates to the Navy Department requesting only one Virginia-class attack submarine (SSN), down from the two it planned for this year in the FY ‘24 request and the frequent congressional preference for two SSNs annually.
PB25 funds ship procurement at a level of $32.4 billion for six battle force ships: two Flight III Arleigh Burke-class destroyers, the one Virginia-class SSN-774 attack submarine, one Constellation-class frigate, one San Antonio-class Flight II amphibious transport dock ship (LPD) and one new Landing Ship Medium (LSM).
The Navy highlighted it will maintain the congressionally-mandated level of 31 amphibious ships as it plans to procure three LPDs over the five-year Future Years Development program (FYDP), with one each in FY 2025, 2027 and 2029.
This confirms recent statements by Navy officials that LPDs would be back following an office of the Secretary of Defense-imposed pause to study ways to lower costs. The Navy and shipbuilder HII [HII] agree the ideal procurement rate for LPDs is once every two years (Defense Daily, Feb. 21).
Speaking to reporters ahead of the release on March 8, Under Secretary of the Navy Erik Raven said these levels both reflect strategic guidance but also industrial limitations.
“First of all, this is a strategy-driven budget. It reflects the nation’s priorities detailed in strategic guidance and also reinforces the Secretary’s and service chief’s enduring priorities…Where there are limitations, budget decisions were based on the overall strategy…including the [National Defense Strategy], secretary’s guidance and service chief’s guidance, as well as physical limitations and industrial capacity,” he said.
Rear Adm. Ben Reynolds, Deputy Assistant Secretary of the Navy for Budget, added the budget is constrained by FRA and built on and depends on an accurate FY ‘24 budget, which Congress has not passed yet.
“This year’s budget, it’s an FRA-capped budget, and we make hard choices and in those hard choices we prioritize readiness to deploy and operate our fleet, we prioritize our people and the ability to respond in this decade of concern while taking some risk in future capabilities,” he said.
Raven argued the budget prioritizes and committed “very significant investment” in undersea warfare capabilities, despite funding only one attack submarine.
He told reporters the Navy reduced its SSN funding, in part, because “we recognize we’re not at the production rate that we need to have in order to meet that 2.0 delivery delivery cadence that we need for U.S. needs.”
Instead, Raven said the Navy decided to continue investments in the submarine industrial base (SIB) to help companies deliver boats at the cadence the Navy wants. This translates into maintaining nine of the planned 10 Virginia-class submarines over the FYDP.
He said the Navy also plans to add $8.8 billion in submarine industrial base investments on top of $2.4 billion allocated across the FY24 FYDP.
Reynolds says this equates to $3.9 billion for the submarine industrial base in FY ‘25 and $11.1 billion across the FYDP. This would add to the $3.3 billion in SIB funding in the supplemental defense bill that has not been passed yet and other SIB funds in the baseline FY24 appropriations bill.
The Navy maintains advanced procurement for another attack submarine as well as Columbia-class boats.
Raven hinted the change in short term submarine procurement will be balanced in the upcoming long-term shipbuilding plan by increasing submarine procurement plans for FY 2030 and 2031 from one submarine each to two boats each for a consistent two boat annual profile in the out years.
The Navy also said it adjusted the phasing of “critical naval aviation forces” for the caps, which pushed back procurement of the future Ford-class carrier CVN-82 two years from FY 2028 to 2030.
The total Navy and Marine Corps Department of the Navy funding levels in PB25 increased procurement by 0.2 percent to $77.1 billion over the last year, military personnel spending is up 2.2 percent to $61.9 billion, and operation and maintenance is up $3.6 percent to $87.6 billion. However, this comes with a significant decrease in military construction, down 28.6 percent to $5.3 billion, and research and development decrease of 4.8 percent to $25.7 billion.
Over the following four years, the Navy Department plans to boost ship procurement numbers back up to 11 ships in 2026 for $37.1 billion, 14 ships in 2027 to $43.7 billion and 14 ships in 2029 for $37.8 billion.
The department also funds ship maintenance at $14.5 billion and provides $7.6 billion to support ship operations for the battle force of 287 ships it expects to have at the end of FY ‘25.
The Navy also requested $16.2 billion for 75 more fixed-wing, rotary wing and unmanned aircraft. This includes 13 F-35B and 13 F-35C aircraft, 27 multi-engine advanced training systems, 19 CH-53K King Stallion heavy-lift helicopters and three MQ-25 Stingray carrier-based unmanned tanker aircraft.