Navy cut its frigate order 90%. It's paying $2B to keep the shipyard.
Summary
The Navy's Constellation-class frigate program was meant to build 20 warships. By September 2025 it had obligated over $3.4 billion to build six of them without finishing the ship's own design; that November it cut the order to two ships. The Wisconsin shipyard building them laid off 92 workers days later -- even as the Navy pledged $2 billion to keep the yard afloat.
Built before it was designed
By September 2025, the Navy had obligated more than $3.4 billion to build six FFG 62-class frigates before the ship's own basic and functional design was finished, GAO's assessment found⧉ -- more than three years after construction began, the functional design was still only 87 percent complete. That July, the shipbuilder had reported the ship's weight had grown by more than 1,100 metric tons beyond initial estimates, and the Navy was weighing a 7.5 percent increase to the ship's displacement limit just to accommodate it.
View data as table
| Original program quantity (2020 contract, incl. options) | 20 |
|---|---|
| Ships under contract when the Nov. 2025 cut was ordered | 6 |
| Ships still funded after the cut | 2 |
The collapse, in three stages
The Navy terminated four of the six frigates then under contract in November 2025, cutting planned total quantities from 20 ships to two. Three months later, it changed the contract for the two remaining ships from fixed-price to cost-plus-fixed-fee -- a structure that generally reimburses the shipbuilder's costs rather than holding it to a fixed price -- and by March 2026 those two ships were themselves under review for termination, with material orders paused.
The Navy has attributed the cut to 'a strategic shift and a need to deliver ships faster,' pairing it with a smaller, lower-end replacement design meant to free larger ships from lower-priority duty. GAO's own assessment⧉ is more skeptical, calling the cut 'a predictable outcome to the flawed acquisition strategy' the program was built on. That replacement, FF(X), uses a different shipbuilder, Huntington Ingalls Industries, based on the Coast Guard's National Security Cutter design -- what 's report calls the Navy's third attempt at a viable small surface combatant program -- backed by a nearly $1.135 billion sole-source contract and $242 million Congress appropriated in February 2026 for long-lead materials.
View data as table
| Obligated for 6 ships before the design was finished | 3,400,000,000 |
|---|---|
| Pledged to the shipyard after the cut (alternative work + workforce) | 2,000,000,000 |
| New sole-source contract for a replacement frigate design (FF(X)) | 1,135,000,000 |
The shipyard paid the price anyway
Fincantieri Marinette Marine, the Wisconsin shipbuilder that built the FFG 62 hulls, laid off 92 employees on December 4, 2025 -- about a week after the Navy's cut -- citing reduced demand from its government customer⧉. That came even as the Navy told it plans to spend $2 billion to secure the shipyard alternative work and fund workforce training, development, and retention. In its own written comments on 's draft report -- filed after the cut, not before it -- the Navy defended the program's pre-cut record, saying it had validated the ship's design maturity in May 2025 and was on track to meet its weight-reduction goals.
The takeaway
- Money kept moving after the program failed. $3.4 billion obligated on an unfinished design, $2 billion pledged to the shipyard, and $1.135 billion already committed to a different shipbuilder for a third attempt at the same mission.
- The Navy built ships around a design that wasn't done. Three years into construction, the ship's own functional design was still just 87% complete -- the kind of sequencing says runs counter to shipbuilding leading practices.
- This isn't an isolated failure. Two other major programs -- the Army's M-10 Booker and the Space Force's OCX -- were also terminated or recommended for cancellation this year, after a combined 20-plus years in development and billions more in spending.
The $3.4 billion figure originates in a 2024 report and is restated, not recalculated, in this year's assessment. The $5.4 billion combined-commitment figure in this piece sums two different kinds of Navy spending -- construction obligations already spent, and a forward-looking shipyard fund -- for scale only, not as one line-item cost. 's report does not track the shipyard's employment; the 92-layoff figure is the shipbuilder's own quoted count, since 's report does not itself cover it -- some outlets covering the same layoffs reported 93 instead, and coverage also disagreed on whether those laid off were mostly white-collar staff or mostly contract laborers, a distinction this piece could not independently resolve. The M-10 Booker and OCX terminations, and 's $51.8 billion portfolio-wide cost growth this year, are covered here only as context for how the FFG 62 collapse fits a broader pattern in this year's assessment -- not as a full accounting of either program.
Sources(2) ▾
- U.S. Government Accountability Office, Weapon Systems Annual Assessment: Requiring Mature Technologies Could Enable Shift to Rapid Delivery (GAO-26-108457) (2026-07-02) — 's 24th annual assessment of 's costliest weapon programs -- the full 249-page report, fetched directly and converted with pdftotext -layout, including the FFG 62 Constellation-class Frigate program's individual profile (pp. 143-144) and the report's overview of three programs terminated or pending termination this year (pp. 15-16). gao.gov · original document
- Wisconsin Public Radio, Marinette Marine lays off almost 100 workers a week after the Navy canceled ship orders (2025-12-04) — Local public-radio reporting on Fincantieri Marinette Marine's December 4, 2025 layoffs, including the shipbuilder's own statement and its total employee/contractor headcount. Used because 's report documents the Navy's funding response to the frigate cut but does not itself report the shipyard's resulting layoffs -- graded down as secondary reporting, not a primary document. wpr.org · original document
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The Navy spent years and billions of dollars building a frigate around a design that wasn't finished. In November 2025, citing years of instability, it cut the program⧉ from 20 planned ships to two -- and the Wisconsin shipyard that built them laid off dozens of workers within the week.