With numerous surface and sub-surface shipbuilding projects behind schedule, the US Navy is struggling to reform its procurement and oversight procedures to address cost overruns and serious delays. The US Government Accountability Office (GAO) has offered potential solutions to House of Representative sub-committees – but will they address the fundamental shortcomings that have been identified?
So far, 2026 has been a busy year for the US Navy. As well as operations in the Gulf, February saw The White House release a 38-page document entitled ‘America’s Maritime Action Plan’. The purpose of the document was clearly defined by President Donald Trump on the opening page; “We will soon revitalize our once-great shipyards with hundreds of billions of dollars in new investments and people coming from all around the world…to build ships in America. We want them built in America.”
The document sets out how the US, under “the leadership and vision of President Donald J. Trump” will move “towards a new Maritime Golden Age…” that encompasses merchant and combat vessels. Gold was also the metal of choice that the President used in December 2025 when describing the US Navy’s Golden Fleet that was to feature the new Trump-class battleship. The announcement was made at the President’s Mar-a-Lago resort in Florida alongside Secretary of War, Pete Hegseth, Secretary of State, Marco Rubio and Secretary of the Navy, John Phelan.
On 22 April 2026, Phelan was sacked by a frustrated Hegseth, who viewed the future of the US Navy as a force employing submarines and unmanned systems and needing fewer large, crewed warships. Quite simply, Trump-class battleships did not fit the projected US Navy Concept of Operations (CONOPS) that emphasises distributed operations. Another possible contributory factor in the sacking was that Phelan was a convenient scapegoat for a failing naval procurement system.
As Phelan was passing through the exit door, the US Government Accountability Office (GAO) was presenting its ‘Navy and Coastguard Shipbuilding’ report to the House of Representatives’ Seapower and Projection Forces; Armed Services; Coast Guard, Maritime Transportation; and Transportation & Infrastructure subcommittees. Before considering the GAO report it is worth looking at the current state of the US Navy.
In terms of tonnage and capability, the US Navy is just ahead of the Peoples Republic of China (PRC) as the world’s largest navy. With some 300 deployable vessels, 340,000 regular personnel and 58,000 reservists, key elements of the fleet include 11 aircraft carriers and 69 submarines. The Peoples Liberation Army Navy (PLAN) is rapidly closing the gap and this is one of the major drivers, alongside the US’s withering shipbuilding capability, that is driving the political desire to expand the US Navy in step with breathing new life into its shipyards. However, the recent GAO report highlights some key areas for concern for these expansion plans. In essence, “Navy and Coast Guard shipbuilding programs have consistently fallen short of expectations over the last 2 decades. Collectively, they are billions of dollars over cost and years behind schedule,” the report highlights as its key findings.
Putting delays and overspending to one side for the moment, the President’s Budget for FY27 (1 October 2026 to 30 September 2027) released in April 2026 requested USD 65.8 billion for naval shipbuilding to establish the Golden Fleet and USD 40 billion for the USCG to “replace and expand its current fleet of ships.” The 2027 Budget includes initial funding for “the Trump-class battleship and next generation frigates such as the FF(X). The Budget would maintain or increase the procurement of existing battle force platforms, including amphibious vessels,” as well Columbia-class and Virginia-class submarines.
In many ways, cost overruns and delays are symptomatic of other procurement shortcomings. The major requirement is having a clear CONOPS that defines the requirements and overall integration of platforms in the fleet. If needs and outcomes are poorly-defined, changes will have to be made post contract award and this is the causal factor that adds costs and delays projected in-service dates. As the GAO report agrees, these shortcomings are exacerbated by “outdated design practices and not having a strategic approach to improve the capacity of the shipbuilding industrial base…”
Such inefficiencies also add hidden costs. As older platforms are kept in service for longer than expected, non-budgeted maintenance and support as well as possible upgrade costs to keep extant platforms viable are accrued.
The GAO report spotlights the FFG 62 Constellation-class multi-mission frigate programme as an example of the US Navy’s failed procurement system. Partially cancelled in 2025, only two ships are to be built from the initial order of six with the US Navy already having spent USD 3.4 billion on the project. Given that the Constellation-class was based on the Franco-Italian FREMM frigate, this should have been a relatively simple project, but many delays were caused by changes to baseline specifications during the early build phase by Fincantieri Marinette Marine in Wisconsin. As of September 2025, and over three years into the construction programme, only 87% of the ship’s ‘functional design’ was complete.
Following the Littoral Combat Ship (LCS) ‘production curtailment’ by over 20 ships that was announced in 2018, the GAO says that including FFG 62, “the Navy has now spent over [USD] 20 billion on small surface combatant programs that have not provided needed capabilities to the fleet.”
In respect to ship cancellations, the GAO also held the US Coast Guard (USCG) to account for the management of its Offshore Patrol Cutter programme, that has resulted in two out of four ships being cancelled after a five-year delay in delivering the first ship.
Another area of concern that was highlighted by the GAO was with the DDG-51 Arleigh Burke-class Flight III variant that is suffering delays that range between 22 and 58 months.
It is not just problems with surface ships. The US Navy’s Columbia- and Virginia-class submarine programmes have also been placed under the microscope. SSBN 826, the lead Columbia-class boat is currently 18 months behind its delivery schedule. As far as delivery of SSN 774 Virginia-class attack submarines are concerned, two were accepted in 2025 and were three years behind schedule. One boat is being built each year, “half the rate of the Navy’s two per year goal” the GAO report noted. With both programmes, costs have also risen.
In an effort to improve the efficiency of shipbuilding in the US, the GAO is proposing three areas that “could significantly improve results” including: improved portfolio (project) management practices; improved design discipline and practices; and better management of the industrial base.
These recommendations have been floated by the GAO in a previous report and have resulted in the Senate confirming the appointment of the first Submarine Direct Reporting Portfolio Manager in January 2026. This was followed in March by the US Navy announcing a reorganisation of its acquisition management process through the creation of ‘portfolio acquisition executives’ to make “disciplined data-driven decisions across, cost, schedule and performance” and hold project staff accountable. The GAO also emphasised the need for the US Navy and USCG to “take a strategic approach to revitalising the shipbuilding industrial base” although recognising that this will be difficult due to infrastructure and workforce challenges.
This strategic revitalisation of shipyards includes the Department of War (DoW) funding shipyards to improve their efficiency. The report highlights one submarine manufacturer receiving USD 254 million to improve its facilities. To manage this largesse, the US Navy established a Maritime Industrial Base office in 2024. Perhaps this layered bureaucracy and insufficient coordination of programmes are key contributing factors leading to the overall inefficiency of procurement?
Given that US shipyards feature aging facilities, are lacking modern tooling and have serious skill shortages in their workforces, with the latter issue exacerbated by retention problems, it would appear that US shipbuilding woes will continue for some years to come. In its talks with shipyard unions, the GAO was told that low wages and demographic shifts are being highlighted by older workers retiring and new workers not being trained in trades. This skills shortage is mirrored in many countries around the world and presents a manifold challenge to a wide range of manufacturing sectors.
