Closed hearings to examine harnessing artificial intelligence cyber capabilities; to be immediately followed by an open hearing at 3:30 p.m. in SR-232A.

2025-03-25

Summary

The subcommittee convened to discuss the critical state of U.S. Navy conventional shipbuilding, acknowledging significant challenges in delivering ships on time and within budget [ 00:07:57 ]

. Members and witnesses alike underscored the urgent need for a turnaround to maintain maritime dominance against adversaries like Communist China .

Themes

Navy Shipbuilding Challenges and Performance

The Navy faces severe issues with shipbuilding, with only four out of 41 ships delivered on time and on budget in the last five years, a success rate of less than 10% [ 00:08:25 ]

. These delays and cost overruns are common across many programs, including the Constellation-class frigate, which is now at least three years behind schedule due to immature design, weight growth, and slow approval processes . Historically, programs like the Cruiser Replacement, Littoral Combat Ship, and Zumwalt-class destroyers have also failed to modernize the force effectively . The U.S. is losing ground in naval power to Communist China, which possesses 370 ships and submarines and continues to pioneer innovative designs . Despite a near-doubling of the shipbuilding budget over two decades, the fleet size has remained stagnant, while almost every surface ship faces significant delays . The Navy's readiness levels also fall short, with surface ships at 62% and submarines at 67% compared to an 80% standard .

Workforce and Industrial Base Issues

The industrial base supporting naval shipbuilding is in poor shape, struggling with supply chain disruptions, workforce shortages, and inflation . While there is latent capacity in shipyards, recruitment and retention are major challenges [ 00:15:43 ]

[ 00:16:33 ] . Although hiring has increased significantly—with 9,700 employees hired in 2023 and another 10,000 projected for 2024—attrition rates among first-year employees are high (50-60%) due to inadequate wages . Wages for shipbuilders are currently about 1.2 times the living wage, a drastic reduction from the 3-4 times seen in previous decades . Investments in infrastructure and modernization, along with support for apprenticeship programs, are crucial for workforce development and retention . The Navy needs to hire approximately 200,000 people this decade to meet shipbuilding demands . Dr. Seidel cited the example of the Toyota/GM Fremont plant, where empowering workers led to dramatically improved efficiency and job satisfaction .

Acquisition Strategy and Oversight

A fundamental flaw in the Navy's approach to shipbuilding is the reliance on unrealistic business cases, which are based on optimistic assumptions about technology, design knowledge, and funding . This optimism leads to awarding contracts for ships that cannot be built with available resources, resulting in cost overruns and delays . The Government Accountability Office (GAO) has issued 90 recommendations since 2015, with over 60 remaining unaddressed, focusing on ensuring design finalization before construction begins and detailing design for each block [ 00:48:06 ]

. The Constellation-class frigate program exemplified this issue, with the builder (Fincantieri) making 80% of changes and the Navy 20%, leading to significant delays and cost increases under a fixed-price incentive fee contract . Admiral Downey confirmed that the builder, losing money, intentionally slowed down work on the frigate [ 00:29:54 ] . Senators criticized the lack of accountability and the tendency for high turnover in leadership to dilute responsibility [ 01:30:55 ] .

Future Initiatives and Solutions

Speakers emphasized the need for immediate, bold, and transformative action to change how the Navy acquires ships . Proposed solutions include adopting iterative approaches, enhancing collaboration, strengthening in-house expertise, and utilizing digital tools to improve design and oversight . Dr. Seidel noted that the Navy is working to ensure a smooth transition from DDG 51 to DDGX programs, involving build yards in design to avoid past mistakes [ 00:43:39 ]

. There's also a focus on smaller, non-traditional capabilities like robotic autonomous systems, which could be built in smaller shipyards [ 00:38:57 ] . Increasing starting wages for shipbuilders by 25% would only add about 1% to the cost of a ship and could significantly improve retention [ 01:01:57 ] . The possibility of a White House Office of Shipbuilding was mentioned, though details are still pending [ 01:02:41 ] .

Tone of the Meeting

The meeting's tone was predominantly concerned and urgent, reflecting a consensus that the current state of Navy shipbuilding is unacceptable and poses a national security risk [ 00:07:57 ]

. Speakers expressed frustration with persistent issues like cost overruns, schedule delays, and a lack of accountability, despite numerous recommendations from oversight bodies [ 01:30:55 ] . There was a strong sense of resolve and a bipartisan willingness to work towards solutions and implement significant changes in acquisition strategies, workforce development, and infrastructure [ 00:09:46 ] . While acknowledging the bravery and performance of current Navy personnel, the underlying message was a stern call for systemic reform to prevent further decline in U.S. maritime dominance .