This section of the report provides an overview of the shipbuilding industry, placing into perspective the cost problems experienced in naval ship construction. It describes the nature of the industry and its problems, emphasizing: The concentration of the industry as reflected by an increasingly limited number of shipbuilders; The sudden, erratic movement in labor and material cost that has impacted shipbuilders worldwide; That NAVSEA's inability to accurately estimate costs in the recent environment is shared by shipbuilders in the U.S. and other countries; and General background data is also provided for reference purposes in understanding the environment within which NAVSEA must estimate future ship construction costs. (Author)


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