Sinking fleet: Navy's shipbuilding strategy remains under fire.

• Author: Jean, Grace V.
• Position: ANALYSIS

PANAMA CITY, Fla. -- The Navy's numbers are sinking, and there is not much that the Obama administration or Congress can do in the near term to reverse the tide.

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A fleet of 278 ships today--less than half of what it was two decades ago--is likely to continue to shrink unless the Navy can contain the soaring costs of building new ships, analysts have said. While Navy officials in recent years have acknowledged that they should do a better job overseeing shipbuilding programs, the service has yet to regain lost credibility on Capitol Hill and it could take years before troubled programs get back on course. That could spell doom for the Navy's plan to expand the fleet to 313 ships within the next decade.

Budget experts repeatedly have dismissed the Navy's long-term shipbuilding plans as unrealistic. The service claimed it would take about $15.6 billion per year to execute its shipbuilding plan, but the Congressional Budget Office told Congress that the Navy would actually need $21 billion annually--nearly double the $12.6 billion average the Navy has been spending each year since 2003.

The vast disparity between the Navy's claims and those of outside experts has baffled analysts. It exemplifies the Navy's "head in the sand" management approach, said Thomas Christie, former director of test and evaluation at the Defense Department and a military analyst at the Center for Defense Information.

Among the toughest problems that the Navy faces today are the cost overruns and schedule delays that threaten the DDG-1000 destroyer and the smaller Littoral Combat Ship (LCS). "These two classes of ships were to be the workhorse surface combatants designed to protect aircraft carriers, patrol sea-lanes and project U.S. power in areas around the world where a carrier might not be available," Christie wrote in a CDI report tided "America's Defense Meltdown."

The Navy now expects to build a maximum of three DDG1000s, compared to an initial projection of 32. Higher than estimated costs for the LCS now also call into question the Navy's planned buy of 55 LCSs. The Navy originally estimated the first two lead ships would cost about $500 million each with subsequent ships costing approximately $220 million. CBO projected the first two LCSs could end up costing about $700 million each.

"Affordability is our greatest challenge," said Art Divens, the Navy's executive director for amphibious and auxiliary ships. "We're not building enough ships...