The U.S. Navy is attempting a fundamental shift in how it manages its fleet, but a series of costly shipbuilding failures suggests that the Navy is changing the way it does business even as still struggling with systemic overspending. The most recent example is the decision to inactivate the USS Boise (SSN 764), a Los Angeles-class attack submarine that became a symbol of procurement delays and financial hemorrhage.
Chief of Naval Operations Adm. Daryl Caudle described the inactivation as a “tough but necessary decision” based on “rigorous, data-driven analysis.” According to the Navy, the move is designed to reallocate a highly skilled workforce toward higher priorities, specifically the delivery of new Virginia-class attack submarines and Columbia-class strategic ballistic missile submarines, as well as improving the readiness of the active fleet.
But, the Boise case highlights a recurring pattern of “sunk cost” dilemmas within the Pentagon. The submarine has not been to sea since January 2015 and formally lost its dive certification nine years ago. Despite this, the Navy continued to pour hundreds of millions of dollars into an overhaul that never reached completion, illustrating the precarious balance between maintaining legacy assets and investing in next-generation capabilities.
The Financial Toll of the USS Boise
The trajectory of the USS Boise‘s overhaul reveals a timeline of repeated delays and escalating costs. Originally scheduled for overhaul in 2013, the process was stalled primarily by a lack of shipyard availability. When perform finally began to materialize via contracts with Huntington Ingalls Inc. – Newport News Shipbuilding, the costs spiraled.
The financial commitment began with a $59.8 million contract on October 16, 2017. By 2020, the Navy had issued modifications totaling over $366 million for advanced planning and modernization. The most staggering figure arrived in February 2024, when Huntington Ingalls was awarded a $1.17 billion cost-plus-incentive-fee modification to complete the overhaul, with a projected completion date of September 2029.
Navy Secretary John Phelan later clarified the scale of the loss, stating that the overhaul had already cost $800 million and would require an additional $1.9 billion to finish. Phelan noted that at a certain point, the only viable option is to “cut your losses and move on.”
| Date | Contract Action | Amount |
|---|---|---|
| Oct 2017 | Initial Overhaul Planning | $59.8 Million |
| Feb/Sept 2020 | Contract Modifications | ~$366.8 Million |
| Feb 2024 | Completion Modification | $1.17 Billion |
| Current State | Total Spent to Date | $800 Million |
Systemic Issues in the Littoral Combat Ship Program
The struggles of the Boise are not isolated. The Navy’s experience with the Independence-class Littoral Combat Ship (LCS) program serves as another cautionary tale of ambitious design meeting operational reality. The LCS program was intended to provide a modular, flexible fleet capable of anti-submarine warfare and mine countermeasures, but it has been plagued by structural failures and high operating costs.
The USS Augusta (LCS 34) exemplifies these ongoing challenges. Delivered in May 2023 and commissioned in September 2023, the vessel has faced mechanical and sanitary issues almost immediately upon arriving at Naval Base San Diego. Reports indicate engine startup failures and severe plumbing problems. By November 2025—barely two years after commissioning—the Naval Sea Systems Command issued a solicitation for a combination of maintenance, modernization, and repair.
The Augusta, which cost over $500 million to build, is now slated for a $33.5 million overhaul by BAE Systems, Maritime Solutions San Diego, to be completed by August 2027. This cycle of “build and immediately repair” has seen the Navy decommission several LCS vessels early. The USS Independence (LCS-2) was decommissioned in 2021 after only 11 years of a planned 25-year service life, and six additional LCS ships were retired by 2023 due to structural issues and high costs.
The Legacy of Design Complexity
The LCS program’s failures can be traced back to a decision in 2002 to pursue two distinct designs: Lockheed Martin’s steel monohull (Freedom class) and Austal USA/General Dynamics’ aluminum trimaran (Independence class). This dual-track approach created a logistical nightmare, as the two versions could not trade parts or sailors, driving up maintenance costs.
While originally priced at $220 million per unit, costs for early ships surged to $700 million before stabilizing around $500 million. By December 2015, then-Defense Secretary Ash Carter ordered a reduction in the total number of ships from 52 to 40, signaling a retreat from the original vision of the modular fleet.
The ‘Golden Fleet’ and Future Budgetary Risks
Despite these setbacks, the Navy is moving forward with a massive shipbuilding push. The fiscal 2027 budget request includes a record $65.8 billion in shipbuilding funding for 18 battle force ships and 16 non-battle force ships. Central to this is the concept of the “Golden Fleet,” a vision that includes the proposed “Trump-class” battleship.
This proposed 35,000-ton guided missile battleship is intended to house hypersonic missiles, rail-guns, lasers, and nuclear cruise missiles. Reports indicate a $1 billion request in the fiscal 2027 budget to initiate this program. Given the history of the Boise and the LCS program, the prospect of a new, highly complex class of battleship raises significant questions about the Navy’s ability to manage costs and timelines.
The stakes are high as the U.S. Seeks to maintain a decisive war-fighting advantage in the Pacific and Atlantic. The shift toward a “data-driven” approach to fleet composition is a necessary step, but the transition remains pricey as the service attempts to purge the inefficiencies of previous decades.
The next critical checkpoint for these initiatives will be the congressional review of the fiscal 2027 budget requests, where lawmakers will determine if the funding for the “Golden Fleet” and new battleship designs aligns with current shipyard capacity and historical performance.
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