1998 GAO Report on Cost-Effectiveness of Nuclear Aircraft Carriers

This GAO report responds to The Defense Appropriations Act of 1994 Conference Report which directed the GAO to study the cost-effectiveness of nuclear-powered aircraft carriers. The aircraft carrier forms the building block of the Navy’s forward deployed peacetime presence, crisis response, and war-fighting forces.

GAO’s analysis shows that conventional and nuclear carriers both have been effective in fulfilling U.S. forward presence, crisis response, and war-fighting requirements and share many characteristics and capabilities. Conventionally and nuclear-powered carriers both have the same standard air wing and train to the same mission requirements. Each type of carrier offers certain advantages. Based on an analysis of historical and projected costs, life-cycle costs for conventionally powered and nuclear-powered carriers (for a notional 50-year service life) are estimated at $14.1 billion and $22.2 billion (in fiscal year 1997 dollars), respectively.

Overall, DOD partially concurred with the report. Specifically, DOD concurred there is a life-cycle cost premium associated with nuclear power. However, DOD believed GAO’s estimate of that premium was overstated by several billion dollars because of what DOD believed are analytic inconsistencies in GAO’s analysis. DOD also believed the draft report did not adequately address operational effectiveness features provided by nuclear power. DOD did not agree with GAO’s approach of making cost-per-ton comparisons between the two types of carriers currently in the force, believing the conventionally powered carriers reflect 40-year old technologies. DOD believed a more appropriate cost comparison would include pricing conventionally and nuclear-powered platforms of equivalent capabilities.