Repairing Navy submarines at private yards often cheaper, Congressional Budget Office finds

Posted at 11:16 AM, Oct 09, 2018
and last updated 2018-10-09 19:24:19-04

NORFOLK, Va. - Repair and maintenance work on Navy submarines may be more cost effective at private shipyards than the Navy's own public yards, according to a report from the Congressional Budget Office.

Issued last month, the findings compared work done at private yards with work done at the Navy's four public yards, including the Norfolk Naval Shipyard located in Portsmouth.

While not mentioned by name in the report, Newport News Shipbuilding and Electric Boat in Connecticut both build submarines and do repair work on them for the Navy.

The investigation was done at the bequest of the House Armed Services Committee after several submarines were delayed in receiving maintenance at public shipyards. That led to missed or shortened deployments.

The result of the comparison of maintenance costs at public versus private shipyards found that private shipyards were on average less expensive than public yards when it comes to the most common type of overhaul work.

That work, Docking Selected Restricted Availability (DSRA) is done on the Los Angeles-class of attack submarine.

The Navy says it often prefers sending submarines to the public shipyards because they believe it costs less.

The report from the CBO considered several factors including overhead costs, something the Navy stopped reporting in 1999 after a switch to a different funding method. The Navy switched to including overhead costs with mission-funding at the public shipyards starting in 2007, so the CBO estimated the overhead costs between 1999 and 2006.

In doing so, the CBO found that the average costs at private shipyards were 38% lower at private yards compared to public yards during the 1993-2017 period. Those cost differences narrowed after 1999, but were still lower at the private shipyards.

The Navy's other public shipyards are the Puget Sound Naval Shipyard and Intermediate Maintenance Facility in Washington, Pearl Harbor Naval Shipyard in Hawaii, and the Portsmouth Naval Shipyard in New Hampshire.

You can read the summary of the findings from the Congressional Budget Office here.