OMB requests $7.3B to address submarine cost overruns, workforce development

The Office of Management and Budget (OMB) has requested $7.3 billion in supplemental funding to address cost overruns and productivity shortfalls in US Navy submarine programs, reports USNI News. This includes $5.69 billion for Virginia-class submarines, covering wage and productivity improvements at General Dynamics Electric Boat and HII’s Newport News Shipbuilding, and $1.59 billion to sustain Columbia-class submarine production amid continuing stop-gap federal funding.

A senior Navy official cited severe delays in Virginia-class production, currently averaging 1.3 submarines annually, well below the two-per-year national security goal and the 2.33 required under the AUKUS agreement with Australia and the UK. The funding addresses rising costs for Block V and VI submarines, wage pressures, and infrastructure needs.

The OMB proposal contrasts with the Shipbuilder Accountability and Workforce Support (SAWS) plan, which would have offered $10 billion in flexible funding. Critics, including HII CEO Chris Kastner, argue OMB's incremental approach is insufficient for long-term shipbuilding demands. Meanwhile, ongoing negotiations for a seventeen-submarine contract remain stalled, impacting financial targets at both shipyards.

Rep. Joe Courtney (D-CT) called the request a late acknowledgment of funding gaps in the fiscal 2025 budget and expressed concern over delays in addressing critical industrial base challenges.

The Heritage Foundation's Brent Sadler went further, telling Defense One, “There needs to be an accounting of the leadership and the management of these programs. It's frustrating because those that run those programs probably knew about these problems a year ago, and so just finding out about it now is unacceptable." He noted "the old Ohio-class submarines are going to have to be decommissioned because their hulls just can't sustain any more operations."