Facing new realities amid rising costs: Could future US Navy warships be built at foreign shipyards?

US senator Mike Lee and US senator John Curtis have introduced two pieces of legislation aimed at enhancing the readiness and capabilities of the US Navy and US Coast Guard, which could open the door to foreign shipyards to build future US naval vessels.

As disclosed, the US senators proposed the Ensuring Naval Readiness Act and the Ensuring Coast Guard Readiness Act, which are designed to modernize and expedite the construction and procurement processes for the US naval sector.

Specifically, the Ensuring Naval Readiness Act addresses the critical shortfall in US naval forces, echoing the Force Structure Assessment’s recommendation for a fleet of 355 ships to ensure a ready and capable US Navy.

To remind, since 2016, the Force Structure Assessment for the US Navy has projected a force of 355 ships will be minimally necessary to ensure a ready and capable Navy. Currently, the navy operates with 291 ships, with shipbuilding plans now extending into the 2050s, according to a report to Congress on Navy Force Structure, Shipbuilding Plans.

The US Navy currently has three options for procurement of ships:

• Build new ships domestically,
• Refurbish old ships, or
• Purchase a limited number of used foreign-built ships with authorization from Congress.

The legislation states that repairing older ships in the fleet, often beyond a 60-year lifecycle, not only puts the US at a disadvantage against high-tech adversaries, but the navy found repairing ships beyond lifecycle is three times more expensive and takes double the projected time to complete. The cost to build a new ship domestically is even more expensive, it was added.

Former Transportation Command General Steve Lyons stated, “used ships vary, $20 million-$60 million depending on the age, and a new ship is 26 times that.

According to the US senators, by allowing the option to construct ships or components in shipyards of NATO member countries or Indo-Pacific nations with which the US has mutual defense agreements, this bill aims to reduce costs and speed up delivery times, helping to close the gap between current capabilities and strategic needs.

The view also aligns with a recently published report by the Government Accountability Office (GAO), which found that the US Navy is facing significant challenges in maintaining its combat surface ships, even after receiving an additional $1 billion beyond its initial budget requests for maintenance.

The new bill will ultimately:

• Allow the US Navy to construct a vessel or a major component of the hull or superstructure in a foreign shipyard if the shipyard is located in a NATO member country or in an Indo-Pacific country with which the US has a current mutual defense agreement;
• Ensure shipyard security by requiring the Secretary of the US Navy to certify, prior to the construction of a US vessel, that the foreign shipyard is not owned or operated by a Chinese company or multinational domiciled in China.

US Coast Guard vessels support a variety of mission demands, including maritime border security, monitoring coastal traffic, and supporting scientific research.

Current law prohibits the coast guard from constructing a vessel or a major component of the hull or superstructure in a foreign shipyard.

According to the US senators, new ships are incredibly expensive to build domestically, with icebreaker construction estimated at $1.2 billion.

Now, the Ensuring Coast Guard Readiness Act proposes a strategic shift in the construction of US Coast Guard vessels.

“Finland, the world leader in ice breaker construction, can build an ice breaker for $150 M in under 2 years. Foreign shipyards can build icebreakers for a fraction of the cost, in half the time. Allowing the Coast Guard and Navy to partner with allied NATO shipyards would help get Coast Guard ships into American waters quicker to fulfill mission demands without generating security concerns, while making the U.S. more economically competitive,” it was highlighted.

Furthermore, this legislation permits the Coast Guard to partner with allied shipyards to procure vessels “more quickly and cost-effectively, without compromising national security”.

“Both bills are about leveraging our diplomatic relationships and the comparative advantages of our allies to ensure America remains at the forefront of maritime security,” noted Senator Lee. 

“By modernizing our approach to shipbuilding and repair, we can enhance our readiness and maintain our military edge, all while ensuring fiscal responsibility.”

“The Ensuring Naval Readiness Act and the Ensuring Coast Guard Readiness Act take common-sense measures to strengthen America’s Navy and Coast Guard while keeping costs down and reinforcing our alliances with trusted partners,” added Senator Curtis. 

“I am pleased to support Senator Lee on these bills that ensure we remain ready to meet our national security threats.”