US Navy, industry partners to address Virginia-class submarine construction backlog

The US Navy and industry partners are working to increase the rate of Virginia-class submarine production to two boats per year by 2028, according to a report recently made available by the US Congressional Research Service.

The report titled Navy Virginia-Class Submarine Program and AUKUS Submarine (Pillar 1) Project Background and Issues for Congress highlights that the navy has been procuring Virginia-class nuclear-powered attack submarines (SSNs) since FY1998, and a total of 40 have been procured through FY2024.

From FY2011 through FY2024, the boats have been procured at a rate of two per year. When procured at that rate, they have an estimated procurement cost of about US$4.5 billion each.

The report stated that although they have been procured at a rate of two boats per year, the actual Virginia-class production rate has never reached two boats per year, and since 2022 has been limited to about 1.2 boats per year, resulting in a growing backlog of boats procured but not yet built.

After achieving a production rate of two boats per year, the navy and industry will work towards further increasing the rate to 2.33 boats per year, so as to execute the two-per-year procurement rate, replace three to five Virginia-class boats that are to be sold to Australia under the AUKUS submarine (Pillar 1) project, and reduce the accumulated Virginia-class production backlog.

The report said that Congress has appropriated billions of dollars of submarine industrial-base funding to support this effort.

The navy’s proposed FY2025 budget also requests the procurement of one Virginia-class SSN, which would be the 41st boat in the class. Prior-year navy budget submissions had projected that two boats would be requested for FY2025.

The boat requested for FY2025 has an estimated procurement cost of around US$5.8 billion, but the navy states that about US$1 billion of that is for materials and equipment for future Virginia-class boats, making the estimated cost for the requested boat itself roughly US$4.8 billion.

The boat has received nearly US$1.9 billion in prior-year “regular” advance procurement (AP) funding and US$272 million in prior-year Economic Order Quantity (EOQ) funding, which is another kind of AP funding.

The navy’s proposed FY2025 budget requests the remaining US$3.62 billion needed to complete the boat’s estimated procurement cost, as well as US$2.42 billion in “regular” AP funding and US$1.3 billion in EOQ funding for Virginia-class boats to be procured in future fiscal years, and US$293 million in cost-to-complete (CTC) funding to cover cost growth on boats procured in prior years.

A key issue for Congress for FY2025 is whether to procure one or two Virginia-class boats in FY2025.

The navy states that procuring two would require adding about US$3.2 billion to its FY2025 procurement funding request for the program, that the navy requested one boat rather than two due to limits on the service's budget topline and the growing Virginia-class production backlog, and that the request includes a second shipset of selected Virginia-class components so as to provide stability to key submarine supplier firms.

Supporters of procuring two boats argue that doing so would provide greater stability for the industrial base and send a stronger signal of resolve to potential adversaries such as China.