$2,000,000,000 Wasted: The Navy’s Ticonderoga-class Guided-Missile Cruiser Nightmare

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Key Points: The U.S. Navy wasted $1.84 billion attempting to modernize aging Ticonderoga-class guided-missile cruisers, according to a scathing Government Accountability Office (GAO) report.

-Despite $3.7 billion spent on the project, only three of seven ships will complete modernization, failing to meet the goal of extending service life by five years.

-The program suffered from contractor performance issues, poor quality work, and inadequate oversight. Recommendations include implementing robust planning and oversight tools to prevent future inefficiencies.

-With watchdog concerns mounting over military spending, critics suggest accountability reforms and external oversight to curb waste and ensure resources are directed toward urgent defense priorities.

Watchdog Warned U.S. Navy Wasted Nearly $2 Billion on Aging Cruiser Program

A government watchdog has warned that the United States Navy essentially threw money into a hole in the water after lawmakers refused to allow several aging warships to be retired. According to a newly released Government Accountability Office (GAO) report to congressional committees, the U.S. Navy had “spent about $3.7 billion modernizing seven of the Ticonderoga-class guided-missile cruisers—large surface combatants that provide key air defense capabilities.”

In 2012 and 2013, the sea service proposed retiring several cruisers, citing budget constraints. However, Congressional lawmakers directed the U.S. Navy to modernize the ships. It then took on a “phased approach” meant to allow for the service lives of 11 cruisers to be extended by five years, while the plan was to be completed by fiscal year 2026 (FY26).

“However, only three of the seven ships will complete modernization, and none will gain 5 years of service life, as intended. The Navy wasted $1.84 billion modernizing four cruisers that have now been divested prior to deploying. The Navy also experienced contractor performance and quality issues across the cruiser effort,” GAO explained.

The report also noted that the program was mired by “poor quality work” that resulted “in additional cost and schedule delays.”

“Weakened quality assurance tools restricted the Navy’s ability to hold contractors accountable for poor quality work,” the GAO noted.

The watchdog offered six recommendations for the U.S. Navy, of which service officials have concurred with in their official responses.  Among those was that Naval Sea Systems Command should require NAVSEA 21 “to consider requiring that future large-scale modernization and maintenance efforts implement planning and oversight tools used in acquisition programs.”

Could DOGE Address These Issues?

Geopolitical analyst Irina Tsukerman of Scarab Rising told 19FortyFive that reports such as this one provide ample grounds to justify setting up some sort of government accountability enforcement mechanism – much like the Department Of Government Efficiency (DOGE), which will be headed by tech entrepreneur Elon Musk.

“The scathing report about Navy spending mismanagement follows the report about the Pentagon failing its annual audit seventh time in a row as DOGE is being formed to cut down on excessive spending for contractors and other forms of inefficiency,” Tsukerman explained.

However, whether DOGE will ultimately be the right infrastructure to address such issues remains to be seen.

“For now, it is a worrisome sign that the budgetary mismanagement appears to be affecting several military agencies at a precarious time when the allocation of resources towards urgent needs is a top priority amidst assorted geopolitical crises and China ramping up its own navy-building efforts,” Tsukerman added. “With respect to the Navy report, the botching of a crucial cruiser revamp program spanned many years and multiple administrations. The report is scathing in blaming Navy leadership for failing to utilize appropriate tools or to establish oversight mechanisms.”

As the GAO report noted, the service was far from merely being willfully blind or negligent, and Navy officials appear to have actively discouraged fixing the problem and deliberately ignored and dismissed the many instances of poor-quality work.

“Given that nearly $2 billion were wasted in the process, this failure in judgment points to several possible lapses, which could range from exceptional incompetence to outright corruption, but cost savings is clearly not one of them,” Tsukerman told 19FortyFive.

Addressing the Issue on Ticonderoga-class

The Navy can’t undo the situation with the Ticonderoga-class guided-missile cruisers upgrade, but it can ensure that such wasteful spending doesn’t occur again.

“Those responsible for these decisions should be taken off the project and either outright fired or relegated to areas where they cannot do more damage,” Tsukerman suggested. “Perhaps forcing some sort of a compensation scheme to the taxpayer after a thorough audit would establish a threshold for future accountability. Going forward, there should be a zero trust approach to agencies with a history of such violations until clear internal protocols are established and followed.”

The Ticonderoga-class guided-missile cruiser USS Anzio (CG 68) returns to Naval Station Norfolk after completing a six-month deployment in the U.S. 5th and 6th Fleet areas of responsibility. Anzio served off the Horn of Africa as the flagship of the international anti-piracy task force, Combined Task Force (CTF) 151. (U.S. Navy photo by Mass Communication Specialist 3rd Class John Suits/Released).

In addition, she recommended that could include a comprehensive review of all priority projects that might have been or could be affected by the same failures; also creating some sort of an external or independent oversight commission to ensure compliance with relevant regulations, implementation of best practices, and accountability – this should be separate from DOGE and specific military/naval matters and should include individuals with background knowledge and experience in relevant areas.

“In the meantime, the cruiser project should be prioritized for completion integrating lessons learned and given over to a team with a history of success and good individual records, even if it means promoting individuals out of turn to lead this project specifically,” said Tsukerman. “A return to a merit-based system in the Navy and in the Pentagon in general and a vigorous enforcement of demonstrated commitment to professionalism would probably naturally eliminate many of these disastrous patterns in due course.”

Author Experience and Expertise: Peter Suciu

Peter Suciu is a Senior Editor focusing on defense issues for 19FortyFive. He has contributed to more than four dozen magazines, newspapers, and websites with over 3,500 published pieces over a twenty-year career in journalism. He regularly writes about military hardware, firearms history, cybersecurity, politics, and international affairs. Peter is also a Contributing Writer for Forbes and Clearance Jobs. You can follow him on X: @PeterSuciu – and on Bluesky: @petersuciu.bsky.social.