Navy Shipbuilding Crisis: GAO Finds Billions Spent Without Strategy as Fleet Goals Remain Unmet

The U.S. Navy continues to fall short of its fleet expansion goals despite investing billions in private shipbuilding and repair companies, according to a new Government Accountability Office (GAO) report.

The report, titled “Shipbuilding and Repair: Navy Needs a Strategic Approach for Private Sector Industrial Base Investments,” reveals a concerning disconnect between the Navy’s ambitious fleet expansion plans and the industrial base’s capacity to deliver.

Over the past decade, the Department of Defense has poured over $5.8 billion into shipbuilding infrastructure and workforce improvements, with plans to invest an additional $12.6 billion through fiscal year 2028.Yet these massive investments lack proper coordination and performance metrics to ensure effectiveness.

“The Navy and OSD are not fully coordinating their shipbuilding investments to prevent duplication or overlap in spending,” the GAO found, noting that both entities make related investments in workforce and infrastructure without proper coordination.

Despite its stated desire for a larger, more capable fleet to counter evolving threats, the Navy has struggled to increase fleet size for two decades. The report identifies persistent infrastructure and workforce challenges that have made the Navy’s goals “difficult to accomplish.”

The shipbuilding industrial base has consistently failed to deliver on the Navy’s fleet expansion plans, yet Navy leadership continues to base goals “on an assumption that the industrial base will perform better on cost and schedule than it has historically.”

One critical finding is the complete absence of a comprehensive strategy for managing the ship industrial base—a void that hinders the Navy’s ability to address key challenges, including providing stable workload projections to industry partners.

“The Navy’s plans for building and repairing ships vary from year to year, hindering efforts to encourage the industry to invest in needed infrastructure,” the report states.

While ship repair performance has improved since 2019, with some companies reporting unused capacity, infrastructure limitations like dry dock availability still constrain the ability to take on unplanned work.

The GAO has issued six recommendations to address these shortcomings, including developing a ship industrial base strategy aligned with the National Defense Industrial Strategy, establishing clear performance metrics for investments, and improving coordination between Navy and OSD on industrial base support.

In September 2024, the Navy established a new program office positioned to develop a strategy for the ship industrial base, with officials promising additional details in early 2025. The Navy has generally concurred with the GAO’s recommendations.

Maritime analysts have long warned that the Navy’s ambitious fleet goals could not be achieved without addressing fundamental capacity and strategic planning issues in the industrial base. The GAO report confirms those concerns and highlights the urgent need for a coordinated approach to ensure billions in taxpayer investments actually deliver the fleet capabilities needed to meet evolving threats.

The GAO’s report is the latest to address challenges in U.S. Navy shipbuilding programs. In December, it issued a report on the Navy’s ambitious Ticonderoga-class guided-missile cruiser modernization program, which has largely failed to meet its objectives resulting in billions in wasted taxpayer dollars. Since 2015, the Navy has invested approximately $3.7 billion in modernizing seven cruisers, but the program’s outcomes have fallen dramatically short of expectations.

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