US Navy Wants to Spend $2B on Foreign Shipbuilding "Study and Procurement"
The U.S. Navy's next annual budget is going to contain an unheard-of line item: a pair of multibillion-dollar studies of foreign shipbuilding options, USNI reports. The budgets for these "study and procurement efforts" are priced so high that they could easily pay for design, long-lead-time materials and initial construction contract awards, if the Navy were to progress them into a "procurement" effort. The department's detailed plans for the program have not yet been disclosed.
According to USNI, the FY2027 budget includes $1.85 billion for a pair of R&D studies on the future construction of frigates or destroyers in foreign shipyards, as well as joint foreign-domestic ventures. The general model is that of the Coast Guard's Finnish/Canadian/American icebreaker procurement program, which is buying two different classes of medium icebreakers from two different Finnish shipyards. The first vessels of each design will be built overseas, then the remainder will be built in the U.S. with assistance and technology transfer from foreign partners. The model is intended to attract investment and expertise from overseas, boosting U.S. shipbuilders' ability to produce complex designs with higher efficiency.
The dismissal of former Navy Secretary John Phelan last week is said to have hinged on the service's perceived lack of progress on getting its shipbuilding programs back on track. All newbuild classes are behind schedule; the next-generation frigate, the Constellation-class, has been canceled; and future orders in the new Ford-class carrier series are reportedly under review. Defense Secretary Pete Hegseth was reportedly frustrated with Phelan's rate of progress in turning the ship around on procurement, and the president is said to have shared his views.
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Just last week, shortly before his ouster, Phelan alluded to the Navy's willingness to look overseas for construction options. At Sea-Air-Space, he told reporters that "everything's on the table," and that the skilled labor shortage in the U.S. required the service to look abroad for help. In Japan and Korea - the two allied nations most qualified to secure contract awards - the same labor shortage problem exists, but the issue is solved by the importation of immigrant labor with guest-worker visas.
Both Korea and Japan have successfully completed maintenance periods for Military Sealift Command, and both hope to leverage that experience into larger contracts for newbuilds. Korea has experience in delivering Aegis-equipped destroyers, similar if not identical to the U.S. Navy's Arleigh Burke class, and wants to attract orders for high-margin hulls like surface combatants.
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