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Exhibit 5 ACTIVE FORCES SHIP MAINTENANCE ($ in Millions) FY 1988 FY 1989 FY 1990 FY 1991 Ship Depot Level Repair 2,617.5 2,923.4 3,412.5 3,520.6 Depot Level Support 161.7 173.8 193.7 199.9 IMA 348.6 359.4 371.2 423.1 Modernization 959.4 1,101.0 1,034.6 1,047.6 Outfitting 323.0 — — — Inactivations 100.3 107.5 194.1 185.0 Total: Ship Maintenance & Modernization 4,510.5 4,665.1 5,206.1 5,376.2 No. of Ship Overhauls (Units) 22 25 15 12 Ship Overhaul Backlog (Units)1 4 3 4 5 # of DMPs (Units) — 5 4 4 # of SRAs (Units) 87 82 91 81 # of PMAs (Units) 64 62 59 43 'The total overhaul backlog includes 3 ships in FY 1988, 2 ships in both FY 1989 and FY 1990, and 1 ship in FY 1991 which are backlogged due to a lack of fleet modernization program (FMP) funding. Source: Department of the Navy U.S. NAVY (continued) ments to contractors for ships and equipment. Outlays best indicate the level of business activity gener- ated by Navy spending. As shown, outlays will grow from Exhibit 2 Ten-Year Pattern of U.S. Navy Ship Construction Funding (billions of $) Total Obligational Authority Outlays 1982 8.6 6.7 1983 16.0 7.5 1984 11.5 8.5 1985 11.0 9.1 1986 9.6 9.5 1987 10.1 9.3 1988 16.0 8.9 1989 9.8 10.5 1990 10.4 10.7 1991 9.8 10.9 Source: IMA Associates, Inc. $8.9 billion in FY 1988 to $10.9 bil- lion in FY 1991. This growth oc- curs despite the fact that obli- gational authority is much lower in FY 1991 than FY 1988. Shown in Exhibit 3 is the break- down of the shipbuilding budget request for the FY 1988-1991 peri- od. Exhibit 4 shows the projected program over the next five years. A major change in the future pro- gram has been the deletion of three SSN 688 submarines originally planned for FY 1991 and 1992. There had been criticism of Navy's plan to overlap construction of the SSN 21 and SSN 688. The current plan is now to end the SSN 688 pro- gram in FY 1990. In FY 1991 Navy plans to order two SSN 21's and maintain a construction rate of three per year thereafter. Navy plans to build DDG 51 Ae- gis destroyers at the rate of five per year over the next five years. This program is a target for budget cut- ting—most likely by stretch-out— building fewer ships per year over a longer period. Other changes from last year's plan include a change in timing for several programs—including the AOE fast combat support ship, LHD amphibious assault ship and TAGOS survelliance ship. Three MCM mine countermeasure ships have been added for FY 1990. Exhibit 3—Shipbuilding and Conversion Budget (in millions of $) FY 1988 FY 1989 FY 1990 FY 1991 Qty $ Qty $ Qty $ Qty $ New Construction Trident Submarine (SSBN) 1 $1,260.8 1 $1,196.2 1 $1,228.6 1 $1,254.5 Carrier Replacement (CVN) 2 6,225.0 — — — — — — Attack Submarine (SSN 688) 3 1,676.9 2 1,364.6 2 1,520.3 — — New Attack Submarine (SSN 21) — 257.6 1 1,533.0 — 866.0 2 3,161.9 Aegis Cruiser (CG 47) 5 4,100.7 — — — — — — Destroyer (DDG 51) — 5.5 4 2,826.1 5 3,600.7 5 3,604.7 Mine Countermeasure Ship (MCM) — — — — 3 341.5 — — Coastal Minehunter (MHC) — — 2 196.7 3 230.3 3 214.9 Amphib. Landing Craft (LSD 41) 1 258.0 1 229.3 1 232.7 Amphib. Assault Ship (LHD 1) 1 752.9 1 733.1 — — — 35.8 Ocean Surveill. Ship (TAGOS) — — 3 158.9 1 155.8 — — Fleet Oiler (TAO-187) 2 256.4 5 689.9 — — — — Fast Combat Support Ship (AOE) — — 1 363.1 1 356.4 1 357.7 Ocean. Research Ship (AGOR) — — — — 3 278.1 1 41.9 Landing Craft (LCAC) — 35.3 (15) 305.5 (9) 219.3 (12) 284.0 Conversion/Acquisition Carrier Modernization (CV SLEP) 1 729.8 — 62.7 1 651.2 — 72.6 Crane Ship Conversion (TAC) 2 53.1 — — — — — — Fleet Oiler Lengthening (AO 177) 1 44.1 2 75.0 1 35.7 — — Moored Training Ship — — — — 1 220.0 — — Other costs — 319.6 — 376.8 — 486.4 — 500.7 Total Budget 19 $15,975.7 22 $9,881.6 22 $10,419.6 "14" $9,765.4 Source: Department of the Navy Exhibit 4—Navy Shipbuilding and Conversion Five Year Plan (FY 1990-1994) FY 1990 FY 1991 FY 1992 FY 1993 FY 1994 FY 1990-94 New Construction Trident Submarine (SSBN) 1 1 1 1 1 5 Attack Submarine (SSN 688) 2 — — — — 2 New Attack Submarine (SSN 21) — 2 3 3 3 11 Destroyer (DDG 51) 5 5 5 5 5 25 Mine Countermeasure Ship (MCM) 3 — — — — 3 Coastal Minehunter (MHC) 3 3 4 4 — 14 Amphib. Landing Craft (LSD 41) 1 1 1 1 1 5 Amphib. Assault Ship (LHD 1) — — 1 1 — 2 Ocean Surveill. Ship (TAGOS) 1 — 2 1 2 6 Ammunition Ship (AE) — — — 1 2 3 Fast Combat Support Ship (AOE) 1 1 1 1 1 5 Ocean. Research Ship (AGOR) 3 1 2 2 1 9 Ocean Surveill. Ship (AGOS) — — 1 — 2 3 Repair Ship (AR) — — — — 1 1 Salvage Ship (ARS) — — — — 1 1 SOF Landing Craft — — — (1) (6) (7) Landing Craft LCAC) (9) (12) (12) (12) (12) (57) Total New Construction 20 14 21 20 20 95 Conversion/Acquisition Carrier Modernization (CV SLEP) 1 — — 1 — 2 Fleet Oiler Lengthening (AO 177) 1 — — — — 1 Moored Training Ship ill — _o> — — m Total Conversion 2 — — 1 — 3 Total Ships 22 14 21 21 20 98 Source: Department of the Navy SHIP REPAIR Expenditures for ship mainte- nance are projected to increase over the next two years. Navy plans to spend $5.2 billion in FY 1990 and $5.4 billion in FY 1991 for active fleet ship maintenance and modern- ization. These figures compare with projected spending of $4.7 million for ship maintenance and moderni- zation in FY 1989. Details are shown in Exhibit 5. In addition, $208.0 mil- lion is to be spent on reserve fleet ship maintenance in FY 1990—vs. $199.0 million in FY 1989. Despite the planned increase in funding for ship maintenance, the number of planned availabilities is projected to significantly decline over the next two years. In FY 1989, Navy has scheduled 149 availabili- ties of active fleet ships. This figure is projected to rise to 154 in FY 1990—and then fall to 128 in FY 1991. The number of ship overhauls will decline from 25 in FY 1989 to 15 in FY 1990 and 12 in FY 1991. Com- pared to this year, the number of short term planned availabilities will increase somewhat in FY 1990 but decline significantly in FY 1991. Major factors driving projected ship overhaul spending are two car- rier overhauls. A regular carrier overhaul is scheduled in FY 1990. A major refueling overhaul is sched- uled for the nuclear carrier Enter- prise (CVN 65) in FY 1991. These two work starts will consume a sub- stantial portion of the overhaul bud- get. As a consequence, a rising bud- get will not result in corresponding additional work opportunities. OTHER PROCUREMENT AND ENGINEERING PROGRAMS Navy spending for "other pro- curement" is projected to be $4.7 billion in FY 1989. This figure is projected to rise to $5.0 billion in FY 1990 and $5.7 billion in FY 1991. The major reason for the increase is additional funding for communica- tions and electronics equipment. Much of the increase is the result of major initiatives associated with submarine modernization pro- grams. 26 Maritime Reporter/Engineering News
