The US Navy’s submarine-building program — which Australia is relying on for its naval fleet — risks another slowdown due to delays awarding a critical construction contract.
Meanwhile, new research says construction timelines for the nuclear-powered submarines keep blowing out, and they are now being built four years behind schedule.
The contract and construction delays are both affecting the production of Virginia-class submarines, which Australia intends to buy from the US under the AUKUS security pact.
Australia expects to receive at least three of the submarines in the 2030s.
But the sales will only go ahead if the US can build enough of the boats for its own fleet. That requires a significant improvement in the pace of production, the US Navy admits.
“Clearly, there are entities or bureaucrats in the [Trump] administration that are not all in on this goal,” congressman Joe Courtney, who founded the bipartisan AUKUS Working Group, said.
“The Virginia-class … multi-year contracts continue to be delayed, despite all consensus that procurement stability will strengthen investment in facilities and workforce.”
Joe Courtney says there are clearly parts of the Trump administration not committed to upping the pace of production. (ABC News: Bradley McLennan)
Congress gave the Pentagon authorisation to award the contract in December, 2023 — meaning it has remained unsigned for about 28 months.
The previous comparable contract was awarded within 20 months, Mr Courtney told the ABC.
‘Particularly worrisome’ construction blow-outs
Separate to the contract issue, new Congressional Budget Office (CBO) research adds to existing doubts about the navy’s prospects of picking up the pace of construction.
The US’s military industrial base has been struggling with production that has lagged behind targets for years.
But CBO naval analyst Eric Labs, in written testimony for Congress, said the problem appeared to be worsening.
“What makes the delays … particularly worrisome is that they are long-established shipbuilding programs that previously delivered ships in much shorter timelines,” he wrote.
Military submarines that took 5–6 years to build in the early 2000s were now taking an average of 9–10 years.
“In addition, the delays increased slightly from 2025 to 2026, despite substantial investments to reduce them.”
Some of those investments have more recently come from the Australian government, which is contributing more than $4 billion to help the US fast-track the submarines’ construction.
Mr Labs’s research says building extra submarines for the AUKUS deal will add “another challenge to an already stressed production line”.
Pentagon ‘aware of the urgency’ to award contract
Despite the production backlogs, manufacturers that produced submarine parts were ready to get started as soon as the outstanding contract was awarded, Mr Courtney said.
Australia ready for AUKUS subs, US commander says
In a letter to the Pentagon last month, he warned the “long-delayed execution” of the contract was “creating uncertainty for the suppliers and shipbuilders who depend on long-lead planning to produce and acquire the components and modules for submarine construction”.
Navy assistant secretary Joe Potter said the contract was in the “final stages” of being awarded. He said it had become more complex after being coupled with a separate contract to build larger Columbia-class submarines.
“So there’s been a little bit of a longer-term negotiation as the complexity of that negotiation has increased,” he told a congressional hearing on Wednesday, local time.
“But there’s no question it’s important. There’s no question it’s a priority for this administration.”
Under Secretary of Defense for Acquisition and Sustainment Michael Duffey told Congress on March 4: “I am aware that we are very close and I am also aware of the urgency to get that done.
“So we’re working in partnership with the navy to continue to drive that to conclusion.”
Mr Courtney, a Democrat who co-chairs Congress’s Friends of Australia Caucus, represents a shipbuilding area of Connecticut that stands to benefit from the contract.
Congress warned of ‘potential for further deterioration’ in build rate
Any additional delays in the shipbuilding program risk exacerbating existing fears that the US will not be able to deliver the submarines as intended under AUKUS.
In order to provide the submarines to Australia, the US Navy is aiming to eventually increase the pace of production to 2.33 submarines per year.
But the most recent official data showed the production rate in 2024 was 1.15 boats per year. The goal for that year was a rate of 1.5 boats.
It was a slight fall from 2023, when the production rate was 1.2 boats.
Inside the plan to station US subs near Perth
The CBO research says it has fallen further, putting the rate of production for the past two years at an average of 1.1 submarines per year.
It says the causes of the delays include workforce challenges, incomplete designs, changes sought by the navy after construction begins and problems related to the COVID pandemic.
In January, a Congressional Research Service report warned the pace of production could get worse. It said:
“The shipbuilder’s work progress data show potential for further deterioration of the construction rate due to inefficient shipyard work, slow growth in supplier production capacity, and prioritisation of Columbia-class submarine work, putting at risk the Navy’s ability to preserve its fleet size.”
But Mr Courtney said he believed the situation had improved. Speaking to the ABC before the release of the CBO research, he estimated the real production rate was now approximately 1.7 boats per year, at least at a major facility in his district.
“We aren’t at two [per year], but there’s definitely been, I think, real progress made in the last 12 months,” he said.
Subs in production pipeline
The US Navy has procured 41 Virginia-class submarines since 1998, but the lagging pace of production means only 25 have been delivered and commissioned.
A 26th, USS Idaho, will be commissioned on Saturday.
Fifteen more remain in the production pipeline. Two are expected to be delivered to the US Navy by the end of the year.
In 2023, the government said the AUKUS deal would cost Australia up to $368 billion over three decades.
Defence Minister Richard Marles was last week asked for an updated dollar figure. He said: “1.5 per cent of GDP is the best way to answer that question.
“You can aggregate dollar numbers over long periods of time; they start to be less meaningful.”