How the US Government plans to put the US Navy’s shipbuilding programmes back on track

The White House, US Congress and US Navy (USN) have been working on several lines of action to minimise multiple delays in the branch’s main shipbuilding programmes and reduce the gap between the USN inventory and China’s maritime systems.

The strategy will include increasing investments in the national defence industry and public shipyards, adopting better business practices, and reviewing and improving ongoing efforts.

“Our adversaries are not waiting [and] China is building a navy to challenge American dominance,” John C Phelan, Secretary of the USN, remarked during a session of the House Armed Services Committee (HASC) last week.

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“As a maritime nation, our naval capabilities are central to our ability to deter our adversaries, especially China,” stated Mike Rogers, Republican representative and HASC Chairman. “When it comes to shipbuilding, we remain woefully behind schedule and way over budget.”

The report, Shipbuilding and Repair, was issued in February by the US Government Accountability Office (GAO) and pointed out that eight of the critical USN shipbuilding programmes were between five months and three years behind their initial schedule.

In order to address those issues, the USN has been reassessing its main initiatives, and evaluating milestones to identify constraints and improve its acquisition process.

Phelan claimed that it would involve “a full review of programmes and platforms” with a focus on “future needs, not priorities of the past”.

“Make no mistake, shipbuilding delays challenge our department,” he stated. “Inability to meet established ship construction and maintenance timelines – whether due to supply chain disruptions, workforce shortages or technical hurdles – has placed the Navy in a precarious position.”

Can better business practices impact US shipbuilding efforts?

Rogers noted that the US needed “to reform the way we buy ships” as “the entire Defence Acquisition System is too slow, rigid and bureaucratic to meet our needs”. 

To address the concerns, the USN has been attempting to improve its production and maintenance efforts, as well as reforming its procurement standards to speed up current and future initiatives.

Under this effort, the Navy Cost Agency has a critical role in refining cost analysis, ensuring execution feasibility and operational priorities while informing funding adjustments.

“I have directed our acquisition teams to use every tool available to drive better value, develop and enforce better contract standards, and hold people—and companies—responsible when they fall short,” Phelan claimed.

In this scenario, the USN has also been adopting measures to improve its internal evaluations. In November 2024, it published the NAVADMIN 225/24 aiming at developing a clean audit process by 2028 that ”goes beyond just examining financial management or supply inventory”.

According to the document, “it involves reviewing all business processes that contribute to figure in the year-end financial statements” while “reinforcing the importance of the audit to all echelons of the Navy”.

Another measure encompasses the use of so-called “better business practices” such as enhancing the collaboration with the Department of Government Efficiency (DOGE) to guarantee suppliers are following statutes and regulations.

Investing in the maritime industry to catch up with China

Adm James W. Kilby, acting Chief of Naval Operations, reasserted that the USN was “laser-focused on deterring China”. 

“Our enemies will not wait for our new platforms to be delivered,” he remarked. 

The USN has been investing in its four public shipyards – Norfolk, Portsmouth, Puget Sound and Pearl Harbor – in an effort to reduce the maintenance time for in-service capabilities. Part of the Shipyard Infrastructure Optimisation Programme (SIOP), this approach will aim to include the modernisation of submarine and aircraft carrier depots, expanding shipyard capacities, and optimising configuration and utilities.

“SIOP is beyond the study and analysis phase [now],” Phelan said. “It has tracked and modelled entire maintenance evolutions – 22 at this time – to identify inefficiencies and choke points at our shipyards.”

Currently, 49 SIOP projects worth US$6 billion are under contract. This is the case with the construction of three new submarine dry docks and the upgrade of multiple piers and utilities.

Keeping pace with Beijing's rapid advances in the naval industry has been a concern for the US Government and Congress. In April, President Donald Trump issued the “Restore America’s Maritime Dominance” executive order aiming at revitalising and rebuilding the domestic maritime industry.

It determined that the DoD and the Departments of Commerce, Transportation and Homeland Security should identify key maritime components in the supply chain that are essential for rebuilding and expanding the shipbuilding industrial base and that should be prioritised for investment.

Also in April, House senators and representatives introduced the Shipbuilding and Harbor Infrastructure for Prosperity and Security for America Act of 2024 (SHIPS for America Act of 2024) bipartisan proposal of a bill to support those vessel manufacturers.

It included plans to establish a shipbuilding financial incentive programme to support the construction of ships by investing in national providers and facilities that produce critical components or subcomponents for shipyards.

Moreover, the bill allocated $250 million for each of the fiscal years from 2025 through to 2034 out of the Maritime Security Trust Fund. Covering the same timeframe, it also earmarked $100 million per year in funding for the Assistance for Small Shipyards initiative from the Maritime Security Trust Fund.

Can the US afford to modernise its shipyards?

Although the US Government, lawmakers and the USN have been paying lip service towards efforts to put shipbuilding programmes on track, there remain several issues to be overcome in the coming years.

Rogers warned that all measures being taken were “not enough” to fully rebuild the country’s naval strength. 

“We need continued investment in the out years,” he remarked. “We need to send a clear demand signal to the industrial base of exactly what we are buying.”

The Pentagon requested $6.1 billion to modernise the country’s shipbuilding capacities in the next fiscal year. The total amount proposed by the House Committee on Appropriations, however, is $2.5 billion short of the requested amount.

The FY2026 defence bill approved last week provided $3.6 billion to this area encompassing $1.5 billion for the Maritime Industrial Base to invest in critical areas, $1.6 billion to improve shipbuilder capability, capacity and efficiency at the private nuclear shipyards, and $521 million for wage enhancements at private nuclear shipyards.