A recent draft of the Navy's long-term shipbuilding plan presupposes the shipbuilding budget will increase substantially in the coming years, but outside analysts question the realism of the projections, arguing the Navy plan may not be affordable.

Between 2000 and 2005, the Navy has spent on average $11.7 billion annually on shipbuilding ($10.2 billion of which was for new construction), according to Congressional Budget Office analyst Eric Labs. In the Fiscal Year 2006 Defense Department Appropriations Act, Congress provided $9.4 billion for new ship construction and ship conversion, an increase of $306 million above the budget request.

But the draft report on the Navy's 313-ship plan, dated Dec. 30, indicates the president's FY-07 budget request, which the White House will formally unveil next month, will request $11.2 billion for shipbuilding and conversion.

Further, the plan anticipates funding for that account will increase significantly and stay high in the years ahead: $15.1 billion in FY-08, $14.9 billion in FY-09, $15.9 billion in FY-10, $19.9 billion in FY-11 and $20.5 billion in FY-12.

At the Surface Navy Association's annual conference last week in Arlington, VA, Labs said the new 313-ship plan “raises questions about whether it is affordable, and thus whether it is executable.”

During a panel discussion Jan. 12, Inside the Navy asked a group of officials -- including Vice Adm. Paul E. Sullivan, head of Naval Sea Systems Command, and Rear Adm. Charles Hamilton, program executive officer for ships -- whether it is realistic to assume the shipbuilding budget will rise to roughly $15 billion annually in the coming years.

“I would say yes, I think it was very realistic,” replied another member of the panel, Capt. Rob Taylor, deputy of surface ships on the Navy staff.

But Tom MacKenzie, a former staffer with the Senate Armed Services Committee who was also on the panel, was more skeptical.

“I'm probably not as optimistic,” MacKenzie said. “It's going to be a real strain for the Navy and it's going to take some real pain” for the U.S. government to boost shipbuilding accounts that much, he said.

Navy members of the panel were then asked if there was any rationale they could offer to explain why the department believes it is likely the shipbuilding budget will rise to $15 billion annually. Sullivan noted boosting shipbuilding accounts would not be easy, but said Chief of Naval Operations Adm. Michael Mullen's plans would be clear once the FY-07 budget is publicly released.

In his speech Jan. 10, Mullen said he would not let the fleet shrink below 281 ships. He did not discuss the shipbuilding plan in detail. But he stressed the importance of fencing funds for shipbuilding in the Navy's internal budget process. Requirements must be reasonable and they should be vetted with the Marine Corps, he said.

Mullen stressed three themes: sea power is too narrowly defined, the world is a relatively small place that requires international cooperation among navies, and the U.S. Navy needs to get a handle on requirements for its acquisition programs.

He stressed the Navy cannot afford the “Star Wars version” of every new idea. In his presentation, Hamilton similarly stressed the Navy is going to focus more on threshold requirements and less on objective requirements.

Mullen noted the cost of the first DD(X) was recently reduced by $300 million. This was done in concert with a Defense Acquisition Board review of the program late last year, Hamilton told ITN .

If the Navy's overall plan is not executable, it is unlikely to deliver on the Navy's promises to provide industry a stable workload of shipbuilding work, Labs noted. If investment levels for Navy shipbuilding do not increase to some degree in the coming years, the fleet size will decrease to roughly 200 ships, he said.

CBO's analysis shows a grim outlook, Labs noted. If the Navy wants to implement its 313-ship plan, the service would need an average of $18.3 billion per year for shipbuilding, or $19.5 billion if nuclear refuelings are included, he said. That would be a two-thirds increase over the recent historical average and about one-quarter more than the Navy's plan. Those numbers are somewhat lower than the projections CBO published in a report late last year, Labs noted.

The chief of naval operations has placed a great deal of emphasis on getting a stable shipbuilding plan and budget, Labs noted. At the same time, the Navy is aiming to substantially reduce the cost of nearly every major shipbuilding program. That would be virtually unprecedented, Labs said.

Ron O'Rourke, a defense analyst with the Congressional Research Service, said the executability of the Navy's plan appears to depend on a lot of things working out the way the Navy hopes, with few or no bad surprises. But things do not always work out the way the Navy hopes and unforeseen budget shocks can happen, he noted.

O'Rourke devoted his presentation to exploring the possibility that the Navy will be unable to afford buying two major surface combatants per year.