Congressional Budget Office Estimates Higher Costs for New Navy Landing Ships

The U.S. Congressional Budget Office (CBO) has projected the construction of 18 medium landing ships for the U.S. Navy to cost anywhere from two to three times higher than the Navy’s current calculations.

The Department of the Navy has announced plans to initiate the construction of a new small amphibious ship, the medium landing ship (LSM), in fiscal year 2025. The LSM is anticipated to transport and deploy small Marine Corps units carrying anti-ship or anti-air missiles in and around the western Pacific.

However, there are uncertainties surrounding the program. These include the number of ships the Navy intends to purchase, the ship’s design, its capabilities, and the total cost of the program. High-ranking Navy and Marine Corps officials have suggested the acquisition of anywhere between 18 and 35 ships.

In a report, the CBO analyzed the possible acquisition costs of the program. The CBO estimates the cost of an 18-ship LSM program at between $6.2 billion and $7.8 billion, or $340 million to $430 million per ship. These numbers contrast sharply with the Navy’s estimated cost of $150 million per ship, which would bring the total cost of an 18-ship LSM program to approximately $2.6 billion.

The CBO also estimates the cost of a 35-ship LSM program at between $11.9 billion and $15.0 billion. This projection takes into account the effects of learning cost-saving measures and the real cost growth in the shipbuilding industry over the longer period required for additional ship purchases.

The CBO’s figures are based on a ship designed as a cross between an amphibious warfare ship and a commercial-standard ship. If the Navy opts for a design equivalent to an amphibious warfare ship, costs could rise significantly. Conversely, if the ships were designed to more commercial standards, the costs could be considerably lower.

The report did not cover potential operation and support costs or assess the viability of the Marine Corps’ concept of operations.

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