Topline Report

Defense budgets, programs and contracts.

Brief No. 019Shipyard Infrastructure Optimization Program

$21B in 2018, more than $200B now: GAO says the Navy's shipyard rebuild needs program-style cost reporting

A Sept. 25 GAO review finds the Shipyard Infrastructure Optimization Program will run past $200 billion and 50 more years. The House NDAA would treat the $14.8 billion Puget Sound dry dock like a major acquisition program; the Senate bill authorizes the same project without that condition.

By Topline Report StaffFiled 6 min read

SIOP total, GAO projection
>$200B
Over 50+ more years; 2018 Navy estimate was $21B [1]
Three new dry-dock projects
$21.7B
Portsmouth, Pearl Harbor, Puget Sound, as of April 2026 [1]
Puget Sound dry dock authorization
$14.76B
FY2027 request; both NDAA bills match [1, 2, 3]
FY2027 dry-dock increments
$992.6M
Four shipyard dry-dock lines, House and Senate tables [2, 3]
Projects in design
40
Due in budget requests over the next 2-3 years [1]

BLUF Bottom line up front

In 2018 the Navy put the cost of rebuilding its four public shipyards at no less than $21 billion over 20 years. The Government Accountability Office (GAO) said Sept. 25 that the Shipyard Infrastructure Optimization Program (SIOP) “will surpass $200 billion and take over 50 more years to execute” [1]. GAO wants Congress to require annual, standardized cost and risk reports like those filed for major defense acquisition programs, and the Navy agreed with GAO’s three recommendations to the service [1]. For construction firms and equipment suppliers, the review lays out a decades-long pipeline: 40 projects in design for budget requests over the next two to three years, three dry docks worth about $21.7 billion, and a Puget Sound project that alone carries a $14.76 billion authorization request [1].

The money

Why did the shipyard program grow from $21 billion to over $200 billion?

GAO built its figure from 2025 Navy funding guidance, planned projects and the cost analyses finished for three of the four yards as of April 2026 [1]. The lowest of those three, for Portsmouth Naval Shipyard in Kittery, Maine, priced all currently planned projects there at about $41.6 billion once escalated over the possible execution period [1]. Navy officials told GAO the work turned out more extensive than expected, citing earthquake-resistance improvements to dry docks, utility upgrades for new ships and resiliency standards, and repair, transportation or utility work left out of the original plan [1]. Commodity prices since 2018 also pushed up existing projects [1].

GAO’s comparison is with weapons programs. As of July 2026 the Navy planned six Ford-class carriers at an estimated $96.4 billion and 12 Virginia Block V submarines at $54.95 billion [1]. “The ultimate cost of SIOP as planned today will be among DOD’s costliest acquisition programs,” the report says [1].

Which appropriations pay for SIOP?

The program draws on three Navy accounts: Military Construction (MILCON), Operation and Maintenance (O&M) and Procurement [1]. As of April 2026, 86 of the 100 completed or underway construction projects ran through O&M, at about $2.49 billion, while 14 MILCON projects accounted for about $8.67 billion [1]. Separately, the program had bought 385 pieces of equipment worth $1.49 billion with Navy procurement funds as of March 2026 [1].

That split is the core of GAO’s oversight complaint. Large MILCON projects appear individually in budget requests with full cost and schedule data; O&M repair and modernization projects, the large majority of SIOP work, do not carry those documentation requirements [1]. At least 10 completed, underway or near-future O&M projects reach or pass about $100 million each [1].

For FY2027, both NDAA bills authorize the requested amounts on the four shipyard dry-dock lines in their Section 4601 tables: $507.5 million for the Dry Dock 3 Replacement increment at Joint Base Pearl Harbor-Hickam, $50.8 million for the Portsmouth Multi-Mission Drydock #1 Extension, $189.4 million for Dry Dock 3 Modernization at Norfolk Naval Shipyard and $245 million for the Puget Sound Multi-Mission Dry Dock [2, 3]. That comes to about $992.6 million.

The programs

What are the three new dry-dock projects?

Navy officials describe the new dry docks at Portsmouth, Pearl Harbor and Puget Sound as the largest infrastructure projects the service has ever undertaken [1].

  • Portsmouth: under construction since 2021, extending Dry Dock 1 to handle current Virginia-class submarines; the Navy has requested a total authorization of $2.46 billion and expects completion by May 2029 [1]. GAO notes the estimate grew about $1.74 billion from the original 2020 request [1].
  • Pearl Harbor: construction began in 2023 on a dry dock for Virginia-class boats, most of which are planned to be homeported there by 2030; total authorization requested is $4.47 billion, after an $834 million increase, with completion expected by March 2029 [1].
  • Puget Sound: a new dry dock sized for Virginia-class and Ford-class maintenance and built to earthquake-resilience requirements, plus demolition and relocation of an existing dry dock, piers and shop buildings, with the forge and heat-treat shop moving to Naval Base Kitsap-Bangor [1]. Site demolition is set for 2027, dry-dock construction for 2030 and completion for 2038 [1].

The Portsmouth docks will fit Virginia-class Blocks I through IV, and Navy plans include later projects for the larger Block V boats [1]. GAO previously found that no public shipyard dry dock met the size and utility requirements to maintain Ford-class carriers [1]. (For the newest Ford-class hull, see our brief on the CVN-82 long-lead award.)

What does the Puget Sound schedule look like on the water?

A National Marine Fisheries Service notice published Aug. 28 describes the Puget Sound dry dock as a project spanning 15 construction seasons [5]. Year 1 covers barge mooring anchors and the start of a new Pier 2 to replace Pier 4, with in-water work between July 16, 2027, and Feb. 15, 2028 [5]. The notice says the Navy is “substantially revising” its planned activities for 2028 through 2032 [5]. Comments on the proposed authorization were due Sept. 28 [5].

Puget Sound also carries unplanned earthquake work. Since 2023 the Navy has identified over $1 billion in retrofits and new construction for newly assessed earthquake risks there, and it requested $830 million in its FY2026 budget to upgrade Dry Dock 4 against them [1].

What the pipeline means for bidders

Of the 40 projects in design, 31 are planned for O&M funding and nine for MILCON [1]. Officials told GAO that early contractor input on construction practices, first tried at Portsmouth, was applied to the Pearl Harbor and Puget Sound dry docks; at Puget Sound it led to a full redesign of the project and of much of the shipyard layout [1]. Existing law already requires Navy briefings to Congress before physical construction begins on any SIOP project with a contract awarded on or after Oct. 1, 2024, and valued at $250 million or more [1].

The politics

GAO’s case rests on what Congress does not see. The Navy sends reports, briefings and notifications on SIOP, and at least 15 legislative provisions carried SIOP reporting requirements as of April 2026, but the material is spread across products and omits total costs to date [1]. Its annual depot report covered a five-year budget window in March 2024, yet the July 2025 edition covered only the budget year [1]. Without “a full picture of how much has been spent, what remains to be funded, and what risks may affect SIOP progress,” GAO writes, Congress could make consequential decisions “based on incomplete information” [1].

The Navy’s position, as GAO records it, is agreement. It concurred with recommendations to build periodic requirement reassessments and annual Gate 6 sufficiency reviews of readiness, affordability and sustainability into its oversight framework, and to document the roles of its SIOP project management organizations in the program’s concept of operations [1]. According to GAO, Navy officials said a standardized reporting requirement could consolidate the many existing SIOP mandates, and that the program baseline planned for September 2026 offers a way to measure performance much as major programs do [1].

The two NDAA bills split on oversight while agreeing on money. The House-passed H.R. 8800, covered in our July brief on the House vote, would direct the Navy secretary to designate the Puget Sound Multi-Mission Dry Dock a subprogram of a major defense acquisition program and, within six months of enactment, submit a baseline estimate and a Section 4351 status report for it [2]. Section 2863 would have GAO review SIOP costs, timeframes, risks and project status annually until Jan. 1, 2031, with briefings starting by March 1, 2027 [2]. Section 2208 would move $42 million of the FY2027 Puget Sound project money to mitigation efforts tied to the Multi-Mission Drydock and Pier 2 [2]. S. 4784, as reported by the Senate Armed Services Committee, authorizes the same $14,759,360,000 for Puget Sound Naval Shipyard but contains no comparable designation or GAO review [3].

Next milestone

Fiscal 2027 opens Oct. 1 under the stopgap, H.R. 6500, which continues FY2026 rates through Dec. 11, 2026, under a list of FY2026 acts that includes the Military Construction, Veterans Affairs, and Related Agencies Appropriations Act, 2026 [4]. Section 104 bars stopgap money from starting any project or activity that had no FY2026 appropriation [4]. Inside the Navy, GAO reported that the program office expected to bring a program cost estimate and baseline for the first block of projects, through fiscal 2042, to senior leaders at a combined Gate 5/Milestone B-C review planned for September 2026 [1]. Block 2, covering the remaining waterfront production facilities, runs from about fiscal 2038 to 2079, and the last planned project is not scheduled to finish until after 2080 [1]. Whether a final NDAA keeps the House’s major-program designation for Puget Sound is open until the House and Senate settle H.R. 8800 and S. 4784.

Readout

Questions on this brief, answered from the cited record

How much will the Navy's Shipyard Infrastructure Optimization Program cost?
More than $200 billion, by GAO's analysis of Navy plans released Sept. 25, 2026, against the Navy's 2018 estimate of at least $21 billion over 20 years [1]. The Navy has not yet approved a program-wide baseline [1].
How much does the new Puget Sound Naval Shipyard dry dock cost?
The Navy asked for a total authorization of $14.76 billion in its FY2027 budget, and both the House and Senate NDAA bills authorize $14,759,360,000 for the shipyard [1, 2, 3]. Each bill funds a $245 million FY2027 increment [2, 3].
When will the Portsmouth and Pearl Harbor dry docks be finished?
The Navy expects Portsmouth's dry docks by May 2029 and Pearl Harbor's by March 2029, according to GAO [1]. Their combined costs have grown by more than $2.5 billion since funding was first requested [1].
Is SIOP a major defense acquisition program?
No. GAO says it is primarily a military construction program, so it escapes the annual status reports major programs must file [1]. Section 2862 of the House NDAA would designate only the Puget Sound dry dock a subprogram of a major defense acquisition program [2].
Can shipyard construction start new work under the continuing resolution?
Not with stopgap money for anything unfunded in FY2026. Section 104 of the CR bars using its funds to start a project or activity that had no FY2026 appropriation, and the stopgap lasts until Dec. 11 [4].

Sources

  1. Naval Shipyards: Complete Information Needed for Decision-Making on Multibillion-Dollar, 50-Year Infrastructure Program (GAO-26-107830)U.S. Government Accountability Office, September 25, 2026
  2. H.R. 8800, National Defense Authorization Act for Fiscal Year 2027 (Engrossed in House), sections 2201, 2208, 2862, 2863 and 4601U.S. Government Publishing Office (govinfo), July 22, 2026
  3. S. 4784, National Defense Authorization Act for Fiscal Year 2027 (Reported in Senate), sections 2201 and 4601U.S. Government Publishing Office (govinfo), June 15, 2026
  4. H.R. 6500, Continuing Appropriations and Extensions Act, 2027 (Enrolled Bill), sections 101, 104 and 106U.S. Government Publishing Office (govinfo), September 3, 2026
  5. Takes of Marine Mammals Incidental to Specified Activities; Taking Marine Mammals Incidental to Year 1 of the Bremerton Waterfront Infrastructure Improvements Project in Puget Sound, Washington (FR Doc. 2026-17614, 91 FR 55521)National Marine Fisheries Service, NOAA (Federal Register), August 28, 2026

Note on sourcing

The more-than-$200 billion total and the 50-year horizon are GAO's projections from Navy funding guidance and cost analyses for three of the four shipyards; the Navy had not published an approved program-wide cost estimate as of publication. Project counts and costs are as of April 2026 and come from GAO's analysis of Navy data. GAO reported that the Navy planned a combined Gate 5/Milestone B-C review by September 2026 to set a program baseline; this brief does not draw on any Navy statement about whether that review has taken place. The Navy's written comments appear in the GAO report as an image and are characterized here through GAO's summary. FY2027 NDAA provisions are from bills that had not been reconciled or enacted as of publication. The National Marine Fisheries Service authorization for Year 1 of the Bremerton work was a proposal open for comment through Sept. 28, not a final decision.