Follow – and Expand? – the Fleet
It is a fundamental precept of military planning that naval operations are a capital-intensive endeavor, given the long time involved in the design and construction of the ships of the U.S. Navy's fleet. The Navy currently has 274 deployable ships and is functioning in accordance with a 30-year shipbuilding plan to ultimately increase the fleet to 308 vessels.
However, in a speech, President-Elect Donald Trump said, "My plan will build the 350-ship Navy we need. ...This will be the largest effort at rebuilding our military since Ronald Reagan, and it will require a truly national effort." Although that speech was delivered on Oct. 21, 2016, more than two weeks before his election, there is every reason to consider these ambitions as more than mere campaign promises. President-Elect Trump has nominated a near-unprecedented number of retired military leaders to his cabinet position. His international world vision, in the months since winning the election, can be summarized as leading through strength. And with his focus on China, it is vital that the U.S. have a robust naval force that can be used to rebut the gains the Chinese have made and are attempting to make with their naval efforts in the Pacific, particularly the South China Sea.
While details of the ship mix and means to fund this ambitious increase of the U.S. fleet remains to be articulated by the new administration, one thing is clear: As has always been the case, the private sector will be an indispensable part of this effort. Building Navy ships requires significant infrastructure investment as well as highly skilled workers at every stage of the process. Moreover, this is one line of manufacture that cannot be outsourced for national security reasons. In summary, even a modest increase in the Navy's shipbuilding program should have a positive domestic economic impact.
Beyond the domestic impact, there are legal, regulatory and public policy implications to increased shipbuilding activity. From a legal standpoint, we expect an increase in transactions and related work involving the Suits in Admiralty Act and the Public Vessels Act, as well as regulatory and administrative work that encompasses the highly specialized area of federal government contracts.
Holland & Knight's extensive experience concerning work involving the U.S. Navy – the firm has attorneys who are former and retired naval officers as well as former senior Department of the Navy civil servants – has taught us that changes in presidential administrations and increased Navy wherewithal begets new legal challenges. As a general matter, we expect fewer regulatory issues concerning fleet expansion, as the incoming administration has signaled an intent for a pro-business push for job growth.
Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem. Moreover, the laws of each jurisdiction are different and are constantly changing. If you have specific questions regarding a particular fact situation, we urge you to consult competent legal counsel.