Burke Class Cost Breakdown
Here’s an informational post on ship construction costs as typified by the Burke class. Data is taken from the Navy’s Shipbuilding and Conversion budget submission for 2017 (1).
Burke Class Cost Breakdown
Planning $40M 2%
Basic Construction $739M 44%
Change Orders $114M 7%
Electronics $173M 10%
Ordnance $508M 30%
Other $40M 2%
Total $1697M
From the detailed cost category breakdowns in the document, here are examples of the kinds of items included in each broad category.
Construction
- Basic hull and superstructure construction
Electronics
- SQQ-89 ASW
- SLQ-32 SEWIP
- IFF/TACAN
- CEC
- Navigation
- SLQ-25 Nixie
- Exterior Communication Systems
- Internal Networks
- STC 3 IVCS
- Main Reduction Gear
- Machinery Control System
- Integrated Bridge Navigation System
Ordnance
- Aegis
- SPY-6 AMDR
- Mk 41 VLS
- Mk 45 5” Gun
- Mk 37 Tomahawk Control System
- CIWS
- SPQ-9B
- Mk 32 Torpedo
- EO System
- Mk 160 Gun Fire Control System
We see that the major cost, by far, is the basic physical construction of the shell of the ship, meaning the hull and superstructure. This makes up 44% of the total shipbuilding cost. This also gives lie to the oft repeated “truism” that “steel is cheap and air is free”. In fact, it’s clear that steel is not cheap and air is not free – not even remotely. All the people who casually call for a little bigger ship because the added steel is cheap, are wrong. We’ve already discussed this topic (see, “Steel Is Cheap and Air Is Free”) and disproved it and this data simply adds more support to the recognition that steel is not cheap and air is not free. Another “truism” dies!
Hand in hand with the claim that steel is cheap and air is free, is the claim that electronics make up the major cost of a ship. As we see, electronics accounts for only 10% of the ship cost. Aegis, oddly, is grouped under ordnance and costs around $220M. That's around 13% of the ship's cost - not an insignificant amount but nowhere near the major portion of a ship's cost. Another “truism” dies!
As a sidelight, from the same document, here are the Burke class unit costs for the last several years. It is interesting to see the very wide variation in unit cost. There is a very loose relationship between quantity and cost but I emphasize loose. For example, the highest cost is not associated with the lowest quantity. Of course, over that time frame the Navy has been tinkering around with the Flt III modifications so some variation could be due to that. There were also restarts and partial technology insertions. My tentative conclusion is that there likely is a quantity-cost relationship but that other factors outweigh and obscure the quantity effect. The Navy’s recent practice of deferring major portions of construction until after delivery also obscure the true construction costs.
Year Qty. Unit Cost
2010 1 $2.133B
2011 2 $1.561B
2012 1 $1.904B
2013 3 $1.437B
2014 1 $1.731B
2015 2 $1.497B
2016 2 $2.253B
2017 2 $1.697B
As I said, this is just an informational post that sheds a bit of light on the cost contributors to the construction of a ship.
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(1) Dept of Defense 2017 SCN Budget, Exhibit P-5c, 2017 DDG-51, FY2017 data column
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