Navy Spent Billions on Decommissioned Warships

A GAO report found that the U.S. Navy spent $1.84 billion on modernizing Ticonderoga-class cruisers that were soon retired.

Updated on Oct. 4, 2026 in Military

Bold flat-color editorial illustration of a naval cruiser silhouette in navy and cream, evoking institutional mismanagement and fiscal waste. — The U.S. Navy spent $1.84 billion upgrading four aging Ticonderoga-class cruisers that were subsequently retired, according to a recent GAO report. AI Illustration. Upload story photo >

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The U.S. Navy wasted $1.84 billion on modernization efforts for four Ticonderoga-class cruisers that were ultimately decommissioned. A 2024 report highlighted significant mismanagement in the program.

Why it matters

The program faced severe cost overruns and delays due to 9,000 contract changes and a lack of oversight. The Navy ultimately decided the aging vessels were too costly to operate despite the expensive upgrades.

The GAO published a 78-page report detailing how the Navy issued 9,000 contract changes during the modernization program. The total investment into ships retired mid-upgrade reached $1.84 billion, including $161.15 million for the USS Hue City alone.

The players

United States Navy

The branch of the United States Armed Forces responsible for naval warfare and the operation of the nation's fleet.

Government Accountability Office

A non-partisan federal agency that provides auditing, evaluation, and investigative services for the United States Congress.

The details

Contractors performed low-quality work that went unnoticed because the Navy failed to maintain effective oversight of the process. The decommissioned vessels included the USS Hue City and USS Anzio in 2022, followed by the USS Cowpens and USS Vicksburg in 2024.

The Navy built 27 Ticonderoga-class ships between 1980 and 1994.
The USS Hue City and USS Anzio were decommissioned in 2022.
The USS Cowpens and USS Vicksburg were decommissioned in 2024.
Three remaining modernized cruisers are scheduled for decommissioning between 2029 and 2030.

Political Context

Opponents of the modernization program argue that the billions spent on mid-life upgrades for aging hulls represent a fundamental failure in long-term strategic planning. Critics emphasize that the lack of rigorous oversight led to avoidable waste while the Navy struggled to maintain its combat readiness.

Taxpayers effectively lost over a billion dollars on assets that yielded no long-term benefit for the naval fleet. The mismanagement indicates that future defense procurement may face increased scrutiny regarding budget oversight and contractor accountability.

The takeaway

The Navy's cruiser modernization effort highlights the risks of pushing aging hardware beyond its efficient operational lifespan. Effective oversight is critical to ensuring that military spending translates into tangible improvements rather than sunk costs.