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U.S. NAVY THE $34-BILLION ANNUAL U.S. NAVY MARKET An Update On U.S. Navy Spending For Ships And Equipment In FY1989 By Dr. James R. McCaul, President International Maritime Associates, Inc. The U.S. Navy continues to be the driving force for shipyards and many equipment manufacturers. Spending for ships, weapons, sup- port equipment and maintenance exceeds $34 billion annually. Ship Procurement The Navy has requested funds to build 17 ships and lengthen two fleet oilers in Fiscal Year 1989. A budget of $9.1 billion for ship pro- curement is proposed. Details for the ship procurement budget for FY 1988 to 1992 are shown in Exhibit 1. Some changes from last year in- clude a more than 14 percent cut from the fast combat support ship (AOE) budget. The Navy had planned to budget $425.4 million for the AOE program—but reduced the funding level to $363.9 million in this year's budget request. The T- ACS crane ship conversion planned for FY 1989 was dropped due to budget pressures. Funds for strate- gic sealift were also dropped—large- ly as a reaction to a hotly contested decision which transferred control over the Ready Reserve Fleet (RRF) from the Navy to the Maritime Ad- ministration. In early April, the House Armed Services Committee recommended the Navy ship program be ap- proved—with the exception of the proposed oceanographic ship. The Navy has asked for $74 million to build one SWATH-design AGOR research ship. The committee rec- ommended against this funding on the basis the design was not fully developed. The Senate Armed Services Com- mittee bill completed mark up in late April— and the Senate bill essentially similar to the House ver- sion. Both the House and the Senate must act on the Committees' autho- rization bill recommendations. Each chamber will vote on an authoriza- tion bill. Differences between the two bills will be negotiated by House/Senate conferees. A compro- mise final version will be sent to the President for signature. An appro- priations bill must also be passed by each chamber, providing funding for ship and other defense procure- ments. A compromise appropria- tions bill must then be agreed to by House/Senate conferees. Both the authorization bill and appropria- tions bill must be passed before the FY 1989 program is finalized. The House Armed Services Com- mittee has recommended the addi- tion of one Army logistics support Exhibit 1—Five Year Navy Shipbuilding Program ($ in millions) FY 1988 FY 1989 FY 1990 FY 1991 FY 1992 No. No. No. No. No. Ships $ Ships $ Ships $ Ships $ Ships $ Construction Trident Submarine (SSBN) 1 $1,260.8 1 $1,368.1 1 $1,482.4 1 $1,546.7 1 $1,597.0 Attack Submarine (SSN 688) 3 1,676.9 2 1.493.6 2 1,503.8 2 1,438.3 1 801.2 New Design Submarine (SSN 21) — 257.6 1 1,488.0 — 583.0 2 2,916.6 2 2,953.4 Aircraft Carrier (CVN) 2 6,325.0 — — — — — — — — Aegis Cruiser (CG 47) 5 4,127.0 — — 1 951.3 — — — — Aegis Destroyer (DDG 51) — 5.5 3 2,207.3 3 2,394.4 5 3,972.6 6 4,982.1 Amphib. Assault Ship (LHD) 1 752.9 1 737.5 — 41.8 1 1,136.5 — 208.2 Amphib. Land. Crft. (LSD 41 CV) 1 258.0 — — 1 294.1 1 304.0 2 595.3 Mine Countermeasure Ship (MCM) — — — — — — — — — — Coastal Minehunter (MHC) — — 2 197.2 3 232.6 3 246.4 4 313.7 Fleet Oiler (TAO) 2 256.4 2 284.9 2 312.0 1 158.9 — — Ocean Surveillance Ship (TAGOS) — — 3 159.6 3 176.5 2 126.7 — — Ammunition Ship (AE) — — — — — — 1 418.0 1 327.2 Fast Combat Support Ship (AOE) — — 1 363.9 — — 2 903.2 — — Salvage Ship (ARS) — — — — 1 145.5 — — — — Oceanographic Res. Ship (AGOR) — — 1 74.0 2 127.4 4 252.1 — — Patrol Ship (PXM) — — — — 1 114.4 — — 4 404.6 Landing Craft (LCAC) — 36.5 9 192.6 12 274.4 12 282.3 12 289.5 Conversion Carrier Modernization (CV SLEP) Fleet Oiler Lengthening (AO 177) Crane Ship Conversion (TACS) 729.8 44.1 53.1 135.4 84.9 102.8 40.3 582.4 211.6 Other Service Craft Landing Craft Strategic Sealift Strategic Sealift Enhancement Outfitting Post Delivery 12.5 43.4 183.9 132.0 214.7 128.4 64.5 21.9 62.8 21.4 303.5 220.7 72.0 105.9 13.8 21.1 273.9 163.6 151.2 107.9 36.9 49.4 308.6 210.4 Total Budget $16,155.4 $9,130.1 $9,471.5 $14,935.0 $13,548.2 Number of Ships: Major Construction LCAC Landing Craft Conversion/Modernization 15 4 17 9 2 20 12 1 25 12 1 Note: 1. Navy has not released a new five-year plan. The figures shown are those in last year's plan—less an aircraft carrier in FY 1990. Source: Department of the Navy 21 12 0
