Navy Secretary John Phelan greets crew members of the submarine USS Iowa on April 5, 2025, during a commissioning ceremony in Groton, Conn. (Joshua Karsten/U.S. Navy)
NATIONAL HARBOR, Md. — All Navy shipbuilding contracts are under review, according to John Phelan, the new Navy secretary, who said Wednesday that he is trying to understand why warship construction and maintenance are often delayed and over budget.
“The U.S. Navy and Marine Corps have long been the cornerstone of global security, but rising costs, shifting requirements and years of underinvestment in shipbuilding have left us vulnerable,” Phelan said during the 2025 Sea Air Space Symposium, which was his first public appearance since being confirmed March 24 to lead the sea service.
Phelan has been tasked by President Donald Trump with getting more warships to sea. A businessman, Phelan is the first person in more than 15 years to lead the Navy without having served in any branch of the military. The state of naval shipbuilding, he said, is unacceptable.
“I think this is a process issue. We add too many requirements, and I think quite honestly, the Navy is not culpable and alone in this. I think Congress sometimes piles on things and adds things that they want,” he said.
The Navy, which relies on contracted private shipbuilding companies, has come under fire in recent years for its shipbuilding struggles. The service planned to have a battle force of 313 ships by 2025. But in its fiscal 2025 shipbuilding plan, the Navy has said it will have 287 ships by 2025 — 26 fewer ships than expected — pointing to workforce shortages, supply chain issues and budget shortfalls.
From 2019 to 2023, the Navy planned for the delivery of 11 new Virginia-class submarines and 15 new Arleigh Burke-class destroyers. Only four of those submarines and seven of the destroyers were delivered. Additionally, a federal watchdog report found 37 out of 45 — or 82% — of surveyed ships now under construction are facing delays ranging from five months to more than three years. Cost overruns for the 46 ships that the Navy has under construction grew from $3.4 billion to $10.4 billion in the past budget year.
Meanwhile, aging ships are spending more time in shipyards for maintenance, creating a backlog of ships that need work done. The Navy was on track for a 67% on-time maintenance completion rate across the fleet in 2024. That comes after a 36% completion rate in 2022 and a 41% completion rate in 2023.
“I tend to like very complex problems. Now on the 14th day of the job, I can tell you, I may have underestimated just how complex. As everyone in the room knows, leading the Department of the Navy is anything but easy. But I didn’t come here for easy. I came here to solve problems,” Phelan said.
Phelan is bringing a business approach to the Navy that he said will be more industry friendly. He will travel to public and private shipyards that work with the service in the next six weeks. He intends to meet with contractors and potential new contractors.
Phelan also said he wants to consider opening additional shipyards. He did not elaborate on whether the shipyards would be public and owned by the Navy, or the service would seek to work with the commercial sector to open more private shipyards for Navy building.
The Navy has four public shipyards responsible for maintaining the Navy’s nuclear-powered fleet of submarines and aircraft carriers: Portsmouth Naval Shipyard in Maine, Norfolk Naval Shipyard in Virginia, Puget Sound Naval Shipyard in Washington and Pearl Harbor Naval Shipyard in Hawaii. Private shipyards are contracted to do maintenance on non-nuclear vessels, such as destroyers and amphibious warships. Private shipyards are also contracted by the Navy to build new warships.
All his efforts aim to accelerate the shipbuilding process without compromising quality or capability, Phelan said.
“We must challenge ourselves individually and as a force to push beyond what’s comfortable and familiar. Growth comes from questioning the status quo for being willing to look critically at how we operate and asking if there’s a better, more efficient and more effective way to achieve our objectives,” he said.
The need to fix the Navy’s shipbuilding and maintenance issues is a national emergency, Phelan said.
While the Navy has struggled with maintaining and building warships, China — considered America’s top military competitor — is rapidly growing its fleet and is on pace to reach a 425-ship fleet by 2030. Navy leaders have projected the U.S. could be involved in a conflict with them by as soon as 2027.
“China is not interested in being No. 2. They are attempting to dominate the seas, and beyond that, the global order,” Phelan said. “Our competitors are not waiting for us to get our act together.”
