WASHINGTON, D.C. — A new report raises questions about the way the U.S. Navy has estimated the cost of a 20-year shipyard modernization project, and said the Navy risks asking for not enough money to finish the work.
The estimated $21 billion cost of updating the Navy’s four shipyards, including the Portsmouth Naval Shipyard, was developed without factoring in inflation, the report said, and failed to use other best practices for developing an estimated cost.
Inflation alone could add almost $9.5 billion to the cost, the report said.
The report was produced by the Government Accountability Office, a nonpartisan federal agency that monitors other parts of government and makes recommendations to save money.
The cost estimate also did not document key assumptions or address risks that could add billions to the ultimate cost, the report said. The Navy also did not budget for utilities, roads, environmental remediation or historic preservation, among other costs, the report says.
Navy officials have told the GAO that a better cost estimate would be completed in 2020.
The report also detailed how old some of the shipyards’ equipment is. In the Portsmouth shipyard, the report said, the average age of equipment is 19 years—an average of 3½ years past anticipated service life.
The report recommends the Navy Secretary take steps to produce a better cost estimate. The Navy Secretary position is currently vacant.