General Dynamics Virginia-Class Submarine Program Revealed to Be $17 Billion Over Budget with 2-3 Year Delays

Representative Ken Calvert, chairman of the House defense appropriations subcommittee, disclosed that General Dynamics’ Virginia-class submarine program faced a projected $17 billion cost overrun through 2030, increasing the program’s total cost from $184 billion and delaying submarine deliveries by 24-36 months. Calvert revealed that “the Navy and shipbuilders have known about this shortfall for at least 18 months” but “Congress was notified just two weeks ago” before a classified hearing with Navy Secretary Carlos Del Toro—demonstrating systematic concealment of cost growth from congressional oversight. The disclosure exposed catastrophic failure in General Dynamics Electric Boat and Huntington Ingalls Industries’ submarine construction, with contractors producing only 1.2 submarines annually against a target of two per year despite receiving over $10 billion in supplemental industrial base funding since 2018.

Concealment from Congressional Oversight

Calvert emphasized that discussions about the Shipbuilding Accountability and Workforce Support (SAWS) proposal began approximately 18 months before his September 2024 remarks, meaning Navy and contractor leadership knew about the $17 billion shortfall throughout 2023 but deliberately withheld notification to Congress until September 2024. He stated: “Absent this CR [continuing resolution], I don’t know when Congress would have been made aware of this massive shortfall,” suggesting the Navy intended to bury the disclosure in routine budget processes rather than provide transparent reporting. Congress had appropriated nearly $20 billion for submarine programs in fiscal year 2024 alone based on Navy assurances of program health, making the delayed disclosure a material misrepresentation that prevented proper oversight and budget planning. The 18-month concealment allowed General Dynamics and Huntington Ingalls to continue collecting contract payments while hiding massive cost growth and schedule failures from the appropriations committees funding their contracts.

Production Failures and Schedule Delays

General Dynamics Electric Boat and Huntington Ingalls Industries were achieving production rates of only 1.2 Virginia-class submarines per year—a 40% shortfall against the two-per-year target rate required to maintain fleet size as older submarines retired. The contractors estimated construction of each Block V submarine would take over 2 years longer than previously reported, transforming a 5-6 year construction timeline into 7-8 years and creating cascading delays across the entire submarine fleet modernization. Calvert described the Virginia-class program as experiencing “extraordinary cost growth” with submarines slipping “2-3 years” behind schedule, and characterized both Virginia-class and Columbia-class programs as being “in crisis.” These delays had severe operational consequences—the Navy planned to maintain 66 attack submarines but falling production rates threatened to reduce the fleet below minimum requirements at the same time that China was rapidly expanding its submarine force.

Cost Growth and Contractor Performance

Each Virginia-class submarine’s cost had grown from original estimates of approximately $1.8 billion to between $2.8-4.3 billion depending on configuration—representing cost increases of 55-139% from baseline. The $17 billion overrun through 2030 amounted to enough funding to build an additional nuclear aircraft carrier or approximately 5-6 additional submarines at original cost estimates. Despite this catastrophic cost growth, neither General Dynamics nor Huntington Ingalls faced contract penalties or consequences—instead, contractors requested additional funding to cover their failures. In November 2024, the White House submitted a $5.7 billion supplemental funding request to cover submarine cost overruns, with approximately $3.5 billion specifically for three Virginia-class submarines. The Navy official justified the request by stating funds would support “productivity improvement and wage increases at shipyards,” effectively rewarding failed contractors with additional appropriations while taxpayers absorbed all cost risk.

Industrial Base Failure Despite Massive Investment

Congress had provided over $10 billion in supplemental industrial base funding since 2018 specifically to improve shipyard capacity, workforce development, and production efficiency—yet production rates declined and costs exploded. The Navy received nearly $20 billion for submarine programs in FY2024 alone, demonstrating that funding availability was not constraining production. Instead, General Dynamics Electric Boat and Huntington Ingalls faced supplier delays, workforce shortages, design deficiencies, and construction quality problems that reflected fundamental management and execution failures. The contractors blamed late deliveries from major component suppliers and issues with construction instructions and materials acquisition—problems that competent prime contractors should anticipate and mitigate rather than allow to cascade into multi-year delays and $17 billion cost growth. The fact that $10 billion in supplemental funding failed to prevent program crisis suggested systemic contractor incompetence rather than resource constraints.

Significance

The Virginia-class submarine cost overrun exposed the complete breakdown of accountability in defense contracting, where General Dynamics and Huntington Ingalls received tens of billions in appropriations while systematically failing to deliver promised capabilities on schedule or budget. The 18-month concealment of cost growth from Congress constituted deliberate obstruction of oversight, allowing contractors to continue collecting payments while hiding program failure until the shortfall became too large to conceal. The Navy’s complicity in delayed notification—and subsequent request for $5.7 billion in additional funding rather than contractor penalties—demonstrated that defense procurement operated without consequences for failure. General Dynamics and Huntington Ingalls would receive reward (additional funding) rather than punishment (contract penalties, profit clawbacks, or termination) for producing 40% fewer submarines at 55-139% higher cost with 2-3 year delays. The episode revealed that cost-plus contracting and contractor lobbying power had created a system where failures generated additional revenue—contractors had financial incentives to underestimate costs, conceal problems, and request supplemental funding rather than deliver on original commitments. The $17 billion overrun represented pure waste that could have funded 5-6 additional submarines, modernized surface fleet capabilities, or been returned to taxpayers, but instead compensated contractors for incompetent execution. The parallel with the unwanted Abrams tanks scandal was striking—in both cases, General Dynamics extracted billions in appropriations divorced from military value, strategic need, or contractor performance, demonstrating that defense spending served corporate profit maximization rather than national security.