The Administration is proposing to procure 5 new Navy ships in FY2003 and a total of 34 new Navy ships, or an average of 6.8 new ships per year, during FY2003-FY2007. An average of 8.9 new Navy ships per year -- the steady-state replacement rate -- would be needed over the long run to support the Administration's planned 310-ship fleet over the long run. The ship procurement rate has been below 8.9 ships per year since FY1993. If the Administration's plan were implemented, a total of 86 ships, or an average of about 5.7 new ships per year, would be procured for the 15-year period FY1993- FY2007, creating a cumulative ship-procurement backlog since FY1993 of 47 ships relative to the steady-state replacement rate. This potential 47-ship 'deficit' in ship procurement would not be immediately apparent because of the relatively large numbers of ships built in the 1970s and 1980s. After 2010, and particularly after 2020, however, when the 1970s- and 1980s-era ships begin to retire, this 47-ship backlog, if not by then redressed, would become apparent, and the size of the fleet would fall below 310 ships. Eliminating this 47-ship backlog after FY2007 would require increasing the ship-procurement rate to about 11.2 ships per year for the 20-year period FY2008-FY2027. This rate can be referred to as the post-FYDP catch-up or recovery rate. This report will be updated as events warrant.


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