NEWTOWN, Conn. - The U.S. Navy's FY16 budget includes $161 billion in base funding, about 7.5 percent higher than FY15 enacted levels. That figure exceeds sequestration caps by about $44 billion through FY20. The base budget includes $44.3 billion for procurement for the Navy and Marine Corps, compared to $41.3 billion enacted in FY15. The research budget totals $69.8 billion in FY16, up from $64.0 billion in FY15.

The request includes $16.6 billion for shipbuilding programs, which is $783 million more than the service originally planned to spend in FY16. A total of 48 ships are funded between FY16 and FY20, unchanged from the previous year's plans. The budget restores funding for refueling the aircraft carrier USS George Washington (CVN 73), which was unfunded in the FY15 budget plan due to concerns over a lack of resources. Lawmakers have directed the Navy to proceed with the refueling effort., which is set to begin in mid-2017. The new Ford class of carriers receives $2.5 billion in FY16, including $1.6 billion for detailed design and construction of the second ship in the class, CVN 79, and $875 million for the first year of advance procurement for CVN 80. Full funding for CVN 80 starts in FY18.

The Navy is requesting $3.3 billion for Two Virginia class submarines, and $3.1 billion for two DDG 51 class destroyers. The budget includes $550 million to pay the balance of a 12th LPD 17 class amphibious transport dock. Congress added $1.0 billion in incremental funding for that ship in the FY15 budget. There is also some advance procurement funding built into the program, putting the total cost at around $1.8 billion. Previous LPD 17s cost over $2 billion, meaning this ship will likely include some of the cost-saving measures being developed by Huntington Ingalls as the company prepares to offer the LPD 17 design for the Navy's LX(R) program. The LPD 17 hull is being considered for the program, but the Navy cannot afford to buy fully-configured LPD 17s. The first LX(R) will be funded in FY20. Another $256 million is included in the budget for advance procurement of LHA 8.

The budget procures three Littoral Combat ships per year between FY16 and FY18, at which point procurement will transition immediately to the modified frigate version of the LCS. The Navy plans to buy two modified LCS in FY19 and three in FY20. The first TAO(X) oiler is funded in FY16, with a total of 17 oilers planned. Auxiliaries used to be procured through the National Defense Sealift Fund, though the TAO(X) program is contained in the Navy's regular shipbuilding account. The service is also buying five Ship-to-Shore connectors for $256 million. The SSCs are replacing LCAC hovercraft.

Development of the SSBN(X) ballistic missile submarine continues, with advance procurement expected to start in FY17. Procurement of the lead boat, which will begin replacing the existing Ohio class, is scheduled for FY21. The Navy's FY16 budget funds advance procurement of about $5 billion over the next five years, and research and development funding of about $5 billion over the same timeframe. When construction starts in FY21, the Navy hopes to rely more on the National Sea-Based Deterrence Fund, created by Congress in the FY15 defense policy bill. The account is meant to take pressure off the Navy's shipbuilding budget, as service officials have said that funding the program through the regular shipbuilding account would take money away from other construction projects. It will be up to congressional appropriators to take advantage of that account. The Navy also continues development of the Virginia Payload Module, which will increase the missile capacity of the Virginia submarine design. Construction of the first modified submarine is scheduled for FY19.

The Navy has had a difficult time finalizing a cruiser modernization plan in recent years due to intervention from lawmakers. The FY16 budget plan adheres to the modernization plan mandated by Congress in FY15 defense legislation. The Navy will upgrade a total of 11 cruisers, as well as three LSDs. The Navy original Proposed laying up all 11 cruisers and launching a modernization effort on all of the ships at the same time. The oldest cruisers would be retired on a one-for-one basis as the modernized ships returned to service. The revised strategy is known as the 2-4-6 plan: begin modernization of two ships per year, with each modernization taking no more than four years, and no more than six ships in modernization at any given time. The first two cruisers are being inducted in FY15. Another two cruisers and one LSD will begin modernization in FY16.

Source: Forecast International - International Military Markets
Associated URL: http://www.forecastinternational.com
Author: S. McDougall, North America Analyst