Topline Report

Defense budgets, programs and contracts.

Brief No. 002GAO

Six or seven a year, not 12: GAO says the $50B Navy-Army hypersonic effort needs one investment plan

A July 17 GAO audit finds Lockheed Martin's shared Conventional Prompt Strike line building about half the missiles needed to stabilize production, Zumwalt integration two years late, and no single strategy steering the services' money. DoD concurred.

By Topline Report StaffFiled 6 min read

Planned CPS investment, Navy and Army
$50B+
Across CPS, LRHW, Virginia class [1]
Average cost per CPS missile
$67M
Range $63M-$71M, April 2026 [1]
Navy CPS life-cycle estimate
$41B
224 missiles; $31B for 262 in FY2020 [1]
Lockheed line capacity
6-7/yr
Goal: 12 per year [1]
DDG 1000 class modernization
$2B+
Up from $1.8B [1]

BLUF Bottom line up front

Lockheed Martin’s shared hypersonic missile line can turn out six or seven Conventional Prompt Strike (CPS) rounds a year, about half the 12 the Navy needs to hold its costs, the Government Accountability Office reported July 17 [1]. The Navy and Army plan to spend at least $50 billion on the capability, but they make investment decisions program by program, and GAO found no single strategy that ties the missile, the Zumwalt destroyers, the Virginia-class submarines and the Army’s Long-Range Hypersonic Weapon (LRHW) together [1]. DoD agreed to write one [1]. For suppliers and the program offices they work with, the report puts the near-term limit on hypersonic strike on the production floor in Alabama, where Lockheed is still adding workers and rewriting build instructions [1].

The money

GAO’s audit, GAO-26-107974, was done for the House Armed Services Committee and lays out three sets of numbers [1].

The missile. In fiscal 2020 the Navy estimated about $31 billion in life-cycle cost for 262 missiles. Its 2024 estimate rose about 30 percent, to $41 billion, while the quantity fell to 224 [1]. As of April 2026, unit cost was $63 million to $71 million, averaging about $67 million [1]. In 2021, when the Navy picked the DDG 1000 class as its first host, the planned price was nearly $50 million per missile [1]. Program officials told GAO their early estimates “assumed no issues with development or testing,” and that unit costs could move again once procurement starts in fiscal 2027 [1].

The Army’s share. The Army plans to spend more than $10 billion for 48 missiles and the ground support equipment that goes with them [1]. Navy totals include nearly $4.6 billion in development, procurement, shipbuilding and operation and maintenance (O&M) money to field the weapon on the DDG 1000 class and the Virginia-class boats [1].

The ships. Upgrading all three Zumwalt-class destroyers to carry CPS is now estimated at $2 billion or more, up from $1.8 billion [1]. The Navy added 230,000 labor hours, at $20 million, to the Huntington Ingalls modernization contract in August 2025 for unplanned work [1]. Replacing the class’s one-of-a-kind radar, computing and network systems with Navy-standard equipment would add an estimated $1 billion to $2 billion across the three ships; the Navy has not decided whether to do it [1].

How does that compare with what the Navy said it would buy? In March 2023 the fiscal 2024 plan called for 64 all-up rounds over five years for about $3.6 billion, starting with eight rounds in fiscal 2024 and reaching 16 rounds for $988 million in fiscal 2027 [5]. Program officials told GAO that missile procurement now begins in fiscal 2027 [1]. The Navy’s fiscal 2027 request asks for 12 CPS missiles with discretionary funding, and 59 across the five-year plan through fiscal 2031, Janes reported [4].

The programs: why can’t Lockheed build 12 missiles a year?

The Army buys its missiles and canisters through the Navy’s CPS program, which runs overall missile production; Lockheed Martin is prime for both services’ missile, and Dynetics builds the common glide body [1]. The same lines in Courtland and Huntsville, Ala., serve both services [1].

Navy data show those lines “are not currently able to meet demand,” GAO wrote [1]. The causes it lists are concrete:

  • Labor. The missile takes far more hands-on work than planned; as of March 2025, direct labor days per missile “far exceeded” the estimate behind the planned rate [1].
  • Work instructions. Navy and Army officials said the build instructions read like engineering specifications handed to workers recently out of high school or vocational school, and Navy production oversight officials called it “unreasonable” to expect workers to follow them [1]. Lockheed is rewriting them [1].
  • Parts and kits. A contaminated container of thermal protection coating delayed work, kits arrived missing parts, and in some cases missiles were partly taken apart to fix parts or assembly problems [1]. A 2023 Navy audit found untagged expired adhesives and skipped quality assurance steps [1].
  • People. Manufacturing headcount rose from about 60 to 80, but new workers need about a year to work independently, and some have moved to other Lockheed programs [1].

The government has little say over how the line runs. Navy officials said the contract leaves the prime responsible for all manufacturing processes, and that pushing specific fixes could be construed as co-direction [1]. In fiscal 2025 the Army paid a consultant about $6 million to study the shared line; Lockheed is acting on several of its recommendations, but Navy officials told GAO in January 2026 that they “did not necessarily embrace” the study’s overall findings and sent their own teams instead [1].

The ship side is late too. USS Zumwalt (DDG 1000) was 94 percent through its modernization in January 2026, which is now due to finish in the fourth quarter of fiscal 2026, 10 months later than planned [1]. The class is 24 months behind overall [1]. The first CPS flight test from the ship, first planned for 2025, is set for the third quarter of fiscal 2027 [1]. The program was about 10 percent behind even that revised schedule as of January [1]. USS Michael Monsoor (DDG 1001) begins its yard period in February 2027, and USS Lyndon B. Johnson (DDG 1002) is expected to deliver in 2028 [1]. The Navy has been cannibalizing DDG 1002 for parts to keep the other two ships running, and some power-system parts take three months to arrive [1].

Submarine and battleship integration sit further out. Testing on the Virginia class depends on the first Block V boat with the Virginia Payload Module, expected in fiscal 2029, and an underwater test launch facility expected in fiscal 2030 [1]. The Navy has “preliminarily identified” CPS for the planned Trump-class battleship [1]. On the Army side, the first Dark Eagle battery began fielding at the end of 2025, with a second expected in early 2027, DefenseScoop reported [2].

The politics

GAO’s core finding is about governance. The Navy and Army coordinate “almost daily” at the working level, and an executive steering committee meets on schedule and risk, but that committee does not include the Army or the Virginia-class program office, and GAO found its records showed no collective decision-making on investment [1]. The 2019 glide body memorandum covered only the glide body, and the council it created is no longer active, Navy officials said [1]. Two Army-Navy agreements on roles and cost sharing are still in draft [1].

Navy officials told GAO the existing coordination is sufficient [1]. GAO disagreed, citing the split over the production study and the undocumented decision to leave the Zumwalts’ unique systems in place during modernization [1]. Early in the audit, a Navy official described the DDG 1000s as a possible bridge until submarines could carry the missile, roughly 2027 to 2031; later, officials said the ships will serve their full lives, and they could not show GAO the analysis behind the choice [1].

The recommendation goes to the Secretary of Defense: have the under secretary for acquisition and sustainment, with the Navy and Army secretaries, write a strategy that sets how every CPS-related program coordinates and regularly reviews investment decisions [1]. DoD concurred without further comment, and the Navy had nothing to add, Breaking Defense reported [3]. Lockheed Martin said it is “confident in the quality of our capabilities” [2, 3] and that “We are enhancing production and manufacturing processes to deliver for the Arsenal of Freedom faster” [2]. The company referred LRHW questions to the Office of the Secretary of War [2, 3].

The audit lands as Congress argues over how much extra munitions money to provide this year. The House budget resolution approved by the Budget Committee on July 16 would let Armed Services write up to $60 billion, mostly for Iran war costs (earlier coverage). For CPS, GAO ties the missile’s eventual unit cost partly to stable annual procurement funding, and to whether the contractor’s line becomes more efficient [1].

Next milestone

The Zumwalt is scheduled to finish its modernization in the fourth quarter of fiscal 2026, which ends Sept. 30 [1]. Fiscal 2027, which begins Oct. 1, is when the Navy plans to start buying missiles and to fly CPS from the ship for the first time, in the third quarter [1, 4]. DoD has not said when the strategy GAO asked for will be done. GAO puts the production rate needed to hit cost and schedule targets at 12 missile bodies a year [1].

Readout

Questions on this brief, answered from the cited record

How many Conventional Prompt Strike missiles can Lockheed Martin build per year?
Six to seven at most, according to GAO, against the 12 a year the program needs to stabilize production [1]. Lockheed says it is improving its production and manufacturing processes [2].
How much does a Conventional Prompt Strike missile cost?
About $67 million on average, within an estimated range of $63 million to $71 million as of April 2026 [1]. When the Navy chose the DDG 1000 as a host in 2021, the planned cost was nearly $50 million per missile [1].
When will the Navy first fire a hypersonic missile from USS Zumwalt?
The Navy now plans the first CPS flight test aboard DDG 1000 in the third quarter of fiscal 2027, two years later than its original 2025 plan [1].
Does the FY2027 budget buy Conventional Prompt Strike missiles?
The Navy's fiscal 2027 request asks for its first 12 CPS missiles with discretionary money, and 59 through fiscal 2031 [4].
What did GAO recommend on hypersonic missiles, and did DoD agree?
GAO recommended that the under secretary for acquisition and sustainment, working with the Navy and Army secretaries, write and regularly review one investment strategy covering every program needed to field CPS [1]. DoD concurred [1, 3].

Sources

  1. Navy Ship Modernization: DOD Needs Comprehensive Strategy to Field Hypersonic Missile Capability, GAO-26-107974U.S. Government Accountability Office, July 17, 2026
  2. GAO: Lockheed Martin struggling to build Navy hypersonic missile at scaleDefenseScoop, July 17, 2026
  3. Navy, Army risk wasting money, time without unified hypersonic missile strategy: GAOBreaking Defense, July 17, 2026
  4. Pentagon budget 2027: US Navy bolsters munitions fundingJanes, April 23, 2026
  5. Navy seeks $3.6 billion over 5 years for 64 hypersonic Conventional Prompt Strike roundsBreaking Defense, March 22, 2023

Note on sourcing

Program figures, schedules and production rates come from GAO-26-107974 and reflect Navy and Army data as of the dates GAO cites (January to June 2026); GAO omitted some production-quality details that the Navy designated controlled unclassified information. The fiscal 2027 quantities are from Janes's reading of the Navy budget request; this brief does not cite a dollar figure for the first procurement lot, and Congress has not finished the fiscal 2027 defense bills. The 2023 five-year plan was a projection that later budgets changed. DoD's response to GAO is a one-line concurrence; the Navy and Army had not described how or when they would write the strategy as of publication. Lockheed Martin's comments are as reported by DefenseScoop and Breaking Defense.