Navy must close budget gap to build future fleet.

• Author: Jean, Grace
• Position: TRAINING & SIMULATION

Amid budget constraints and rising shipbuilding costs, the Navy faces a significant challenge in building its future force, according to naval analysts.

There's some expectation that there will be a "very substantial gap," measured in billions of dollars, between the costs of new ships and the Navy's procurement budgets, said Ronald O'Rourke, a naval analyst for the Congressional Research Service.

The Navy's annual shipbuilding budget normally ranges from $8 billion to $12 billion, said analysts. But some of the advanced ships that the Navy wants cost upwards of $2 billion each.

The Navy has proposed new acquisition strategies or alternative funding mechanisms to address the budget shortfalls, but these only "tend to help at the margin," O'Rourke said at a symposium of the U.S. Naval Institute, in Virginia Beach, Va.

O'Rourke said the Navy must make difficult choices.

"These are choices in terms of reducing the planned size of the fleet, the planned number of ships you want to maintain, or scoping down the designs of the ships that you now have planned for procurement--taking things off the ships, making things smaller, or less capable," he said.

Part of the problem is that the Navy has lacked a clear force structure plan, said O'Rourke. In March, the Navy submitted its 30-year ship building plan to Congress, but for the first time in history, gave a range, instead of a solid number, for its projected fleet size.

"The Navy said it would be comfortable going down to 260 ships and up to 325," said Robert Work, senior defense analyst for Center for Strategic and Budgetary Assessments. "I don't think it needs to grow substantially. It needs to change in character."

The current fleet is at 281 ships.

At a media roundtable discussion in October, Adm. Michael G. Mullen, who became chief of naval operations in July, declined to answer any specifics on the size of the future fleet because of the ongoing Quadrennial Defense Review. However, he did comment on the 2006 budget, which includes funding for four new ships.

"Four ships in the '06 budget on the Hill is as low as we've been, and I'm not anxious to stay there," he told reporters.

Those four ships are the Virginia Class submarine, the LPD- 17 San Antonio Class amphibious transport dock ship, the Littoral Combat Ship and the TAKE dry cargo and ammunition ship.

In 2005, the Navy funded eight new ships.

Speaking before an audience comprising industry and military in Panama City, Fla., during an expeditionary warfare conference sponsored by the National Defense Industrial Association, Mullen gave a slightly clearer picture of his intentions for the future fleet.

"We're at 281 ships today. We've come down, and I believe that number is projected to go up, and we need to sustain that projection in a positive direction," he said.

"One thing that people will be looking for coming out of the QDR is an unambiguous, that is, a fairly precise ship force structure plan, rather than a range that we've been operating with for the last several months or the even more ambiguous situation that we had, going back a year or two before that," said O'Rourke.

Until the QDR comes out in early February, analysts can only speculate about the size of the fleet.

The Defense Department intends to make the "global war on terror" more important in its priorities and also wants to hedge against a rising China, according to analysts.

"The Navy really worries...