Federal Shipbuilding Trends: Opportunities for the Private Sector

A Business Briefing on Where the U.S. Government Is Investing and How the Private Sector Can Respond

Executive Summary

In the past three fiscal years, the U.S. government spent more than $71 billion on federal contracts to support shipbuilding efforts. The Department of the Navy’s expenditures were highly concentrated among a handful of large primes, with work predominantly performed in five coastal states. A series of federal actions since January 2025 signal the government’s commitments toward building the maritime industrial base, with significant implications for future shipbuilding requirements. The private sector can seize market opportunities through anticipated growth in key areas including maritime infrastructure support and expansion, workforce capacity, innovative maritime capabilities, and modernized supply chains.

Purpose

This report summarizes how the U.S. federal government procures shipbuilding services, and the private sector’s role in supporting government in this growing sector, highlighting key trends, buyers, set-asides, market concentration, and geographic hotspots to inform expanded participation from private industry.

Who This Report Is For

Investors, founders, shipyards, maritime suppliers, established businesses of all sizes with adjacent capabilities, and component manufacturers exploring opportunities to support rebuilding the U.S. defense and maritime industrial base.

Key Findings

• Total Federal Contract Spending (FY22–24): $71+ billion across 14,700+ awards

• Top Buyer: The Department of the Navy drove 93% of total obligations, playing the central role in fleet modernization, alongside 6 sub-agencies

• Market Concentration:

  • Top 5 companies captured over 66% of total contract value

  • Top 5 states of contract locations accounted for more than 75% of total spending

• Small Business Set-Asides: 3% of contracts were set-aside for small businesses, valued at $2.4 billion

• Competition: Only 24% of contracts were full and openly competed

Why It Matters

With national security priorities shifting and unprecedented U.S. commitments to rebuild the defense industrial base, this snapshot helps the private sector understand how to position for growth in a critical and growing market.

Total Federal Shipbuilding Spend Over Recent Years

In April 2025, the White House announced the U.S. government’s commitment to “restoring America’s maritime dominance,” acknowledging the decades-long decline of our nation’s shipbuilding and maritime workforce capacity. The April 9, 2025 White House Executive Order cites recent data showing ”that the United States constructs less than one percent of commercial ships globally, while the People’s Republic of China is responsible for producing approximately half.” Over the past three fiscal years, the U.S. government contracted more than $71 billion from private sector entities to support shipbuilding requirements. A surge of U.S. government announcements in 2025 signals an enduring and expanding market, one that will rely significantly on participation of America’s entrepreneurs, business leaders, and investors for advancement.

Note: There can be a lag in data entry for the sources of record in Federal Procurement Data System and USA Spending; FY24 data may continue to change.

Insight

Steady and expansive federal procurement trends for shipbuilding over recent years signal an enduring market. The Congressional Budget Office estimates a 46% increase in shipbuilding spend to support the Navy’s plan for its future fleet over the next three decades. As the U.S. positions to dramatically grow the maritime industrial base and shipbuilding capacity, there are clear needs for expanded private sector participation.

Top Federal Buyers in Shipbuilding & Repairing

The Department of the Navy dominates shipbuilding and repair contracts, accounting for nearly 93% of total obligations. The U.S. Coast Guard, Maritime Administration, and Department of the Army were the next largest buyers, with a combined share of less than 6%.

Insight

The Navy’s dominance is clear, with nearly nine out of every ten shipbuilding dollars flowing through its contracts. However, at least six additional federal sub-agencies support government procurement needs in the federal shipbuilding market. Private industry should understand exactly how each agency and sub-agency procures relevant capabilities – priorities, mechanisms, forecasts, and the partnership ecosystem – to position strongly for market entry or expansion.

What’s the Government Buying?

Highest Demands in Shipbuilding Capabilities

Federal spending for federal contracts related to shipbuilding and repairs over recent years was highly concentrated in a few key product and service codes (PSCs). PSCs are the standardized classification code used to identify and describe what a federal agency is buying under a contract. Combat ships and landing vessels accounted for 73% of all obligations, while non-nuclear ship repair made up another 14%. Other notable categories included special service vessels, cargo/tanker vessels, and technical support for ships.

Insight

The overwhelming focus on combat ships and major repair needs in recent fiscal year contracting spends will continue to grow and evolve as the Navy seeks to increase the volume, modernization, production capacity, and innovative capabilities of its fleet. Private sector companies should understand exactly how their capabilities fit into these spending trends, and position to enter the market through sub-contracts, partnerships, or direct bidding opportunities depending on their offering.

Use of Set-Asides and Competition

Set-aside programs for small businesses, 8(a), HUBZone, and other business groups accounted for just 3% of total obligations for U.S. government shipbuilding needs, a market segment valued at $2.4 billion. The vast majority of contracts (97%) had no set-aside, and only 24% of contracts were fully and openly competed. Notably, 50% of obligations were not competed at all.

Insight

Set-aside utilization in federal contracts for shipbuilding is relatively low, yet still represents a $2.4 billion opportunity specific to small businesses. Small businesses should monitor how overall increases spending in this market may also raise the amount of set-aside opportunities specific to small businesses. In the current state, small businesses will have opportunities to bid directly, and should pursue sub-contract and teaming opportunities with larger companies who may be incentivized to partner with smaller firms.

Top Primes and Market Saturation

The shipbuilding market is highly concentrated. The top five awardees – Electric Boat Corporation (CT), Huntington Ingalls Incorporated (MS), Huntington Ingalls Inc (VA), Bath Iron Works (ME), and National Steel and Shipbuilding (CA) – captured 66% of contract spends for federal shipbuilding over the past three years, and 1,770 unique firms won shipbuilding-related contracts. As the Congressional Budget Office states, “The Navy’s 2025 shipbuilding plan poses a challenge to the nation’s shipbuilders. Although hundreds, if not thousands, of companies are involved in building ships and components for ships, the Navy’s ships are built primarily by seven shipyards.” Workforce capacity and parts and component supply shortages raise risks to this market’s progress.

Insight

The top five companies dominate more than half the federal contracting market for shipbuilding, but nearly 1,770 unique firms received awards, with small businesses capturing 3% of the $71 billion market. Production delays, limited workforce capacity, and supply shortages signal room for new private sector capabilities to participate in this market, targeting long-standing gaps that will only expand with increased requirements.

Geographic Distribution of Awards

Federal shipbuilding contract obligations are heavily concentrated in coastal states with major Navy infrastructure. Connecticut, Virginia, Mississippi, California, and Maine together account for 78% of all contract spending related to shipbuilding. Competition rates vary widely by state, with Connecticut and Virginia showing the lowest rates of fully competed contracts among the top states.

Insight

Subcontracting and teaming opportunities are available nationwide, but prime awards are concentrated where Navy shipyards are located, with coastal state awards representing 92% of spends. New private sector companies seeking to enter this market should target the current and anticipated requirements specific to the geographical places of performance, as well as the major potential partners with a foothold in those market segments.

What’s Changed in 2025?

A series of major federal actions since January 2025 showcase the government’s commitments toward building the maritime industrial base, with specific implications for the shipbuilding federal market. Here’s a look at the significant developments this year:

January 2025

• Maritime Industrial Base Program Program Leadership Change: Navy appoints Matthew D. Sermon as new Director of the Maritime Industrial Base Program, with continued focus on shipbuilding workforce, infrastructure, and supply chain development.

March 2025

• White House Announces Office of Shipbuilding (proposed): Intended to coordinate national-level support for commercial and defense shipbuilding.

  
  

• MSTIC Event: Navy hosts Maritime Sustainment Technology & Innovation Consortium meeting to drive innovation in ship repair and maintenance.

April 2025

• Executive Order 14269 – “Restoring America’s Maritime Dominance”:

  • Orders creation of a Maritime Action Plan (MAP) by Nov 2025.

  • Directs use of DPA Title III & private capital for industrial base investment.

  • Proposes a Maritime Security Trust Fund and Shipbuilding Financial Incentives Program.

  • Mandates procurement reform: streamlined acquisition, modular designs, forecasting.

  • Calls for Maritime Prosperity Zones to attract regional shipbuilding investment.

  • Requires interagency inventory of all maritime-related federal programs.

  • Urges foreign investment from allied shipbuilders into U.S. industry.

  
  

• SHIPS for America Act (Reintroduced): Bipartisan Senate bill to revitalize U.S. shipbuilding and maritime workforce through funding, incentives, and regulation streamlining.

May – June 2025

• Navy Talent Pipeline Program Expands: Regional "Signing Days" across six maritime hubs to formalize workforce training partnerships under the Maritime Industrial Base program.

July 2025

• $8.75M in Small Shipyard Grants Announced: 17 shipyards across 12 states receive funding for facility upgrades, workforce training, and tech adoption.

  
  

• $6.2B in Ready Reserve Force Contracts Awarded: 10-year contracts to sustain 51 reserve ships through repair, maintenance, activation.

September 2025

• Maritime Industrial Base Program One-Year Report: Navy reports progress on workforce development, supplier resilience, and manufacturing tech adoption; 10,000+ new maritime job placements.

  
  

• $8M Labor Dept. Workforce Grant Program Launched: Focused on U.S. shipbuilding training in partnership with allied countries.

  
  

• Co-Investment in Submarine Industrial Base: Navy partners with private capital to expand module manufacturing at Alabama Shipyard.

October 2025

• Awaiting Release of Maritime Action Plan: Due by November under EO 14269.

  
  

• Ongoing engagement with Congress for funding, acquisition reform, and industry incentives.

Opportunities & Strategic Insights

Why This Market Matters Now

Federal investment in shipbuilding capabilities is not only substantial but also growing in strategic importance. With more than $71 billion obligated for contracts over the past three years and the policy, program, and budgetary signaling to dramatically expand U.S. shipbuilding capacity in the decades ahead, the government’s commitment to building, modernizing, and sustaining the U.S. naval fleet is clear. However, limitations in shipbuilding workforce capacity, supply shortages, and production delays raise questions about increased spending and commitments – and ability to meet ambitious future maritime industrial base targets. Companies engaged in all facets of shipbuilding, components, and workforce development should consider positioning to participate in this growing market.

Key Growth Drivers & Signals

• Expanding Fleet Modernization & Sustainment: Major contracts for combat ships and landing vessels continue to drive demand, reflecting ongoing modernization priorities.

  
  

• Policy & Funding Momentum: Recent executive orders, legislative proposals, and new program leadership highlight federal urgency to strengthen the maritime industrial base, boost workforce development, and incentivize private capital investment.

  
  

• Geographic & Segment Concentration: Coastal states with existing shipyard infrastructure remain hotspots, but growing investments in workforce and technology upgrades signal expanding opportunities across the country.

  
  

• Increasing Small Business Engagement: Though still a smaller share, small businesses can exploit new market  entry points for innovative firms and subcontracts to fill critical gaps.

  
  

• Collaboration Opportunities: Ample opportunities exist for specialized suppliers and technology providers to engage alongside Primes.

Strategic Opportunities for Private Sector Leaders

• Entrepreneurs & Founders: Leverage innovation in shipbuilding and repair capabilities, modular manufacturing, and maintenance solutions to address urgent Navy needs and niche markets with less competition.

  
  

• Investors: Capitalize on federal-backed demand signals and emerging policy incentives by supporting companies that align with maritime industrial base priorities, especially those enabling workforce growth and supply chain resilience.

  
  

• Established Businesses & Suppliers: Expand capabilities and geographic reach by partnering with Primes or tapping into set-aside and subcontracting opportunities spanning workforce training, technical services, and infrastructure upgrades.

  
  

• Cross-Sector Collaborations: Forge partnerships across defense, manufacturing, technology, and finance sectors to accelerate delivery of shipbuilding infrastructure needs, stronger innovation or capacity delivery, and mitigate supply chain gaps.

Final Thoughts

The federal shipbuilding market offers a rare convergence of national security imperatives, enabling policy landscape, robust and long-term government commitments, and meaningful entry points for more and diverse private sector players. Businesses and investors who understand these dynamics and move decisively to align with evolving federal priorities will be well-positioned to contribute to building America’s maritime strength while expanding into new market opportunities for growth.

About Serellium

Serellium is dedicated to making the federal market more accessible through data-driven insights and strategic guidance. Our industry reports help businesses understand federal procurement trends, identify opportunities, and develop winning strategies to bring the strongest capabilities to government industry.

Serellium offers rapid and full-service support to small, medium, and large businesses seeking to enter and expand in the federal contracting market. In a matter of weeks, we position your business for federal contracts by providing a data-driven roadmap tailored to your company and capabilities. This includes an actionable entry strategy grounded in extensive federal market research, refined capability offerings, and a targeted plan to pursue the highest demand and most accessible entry points.

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*Data Source and Disclaimer: The federal contracting data used in this report originates from the Federal Procurement Data System and USA Spending, the central and public repositories for U.S. government contract award information. Federal agencies are required to report contract actions through this system under the Federal Acquisition Regulation (FAR). While this data represents the best publicly available information on U.S. government contract spending, it is subject to several limitations. Data accuracy depends on timely and correct entry by federal agencies, and reporting inconsistencies, omissions, or errors may occur. Additionally, data records are updated regularly, and figures may change as agencies revise or add records. This report reflects a snapshot of the data as of the date pulled in October 2025, and may not include contract actions that were delayed, classified, or inaccurately reported at the time of extraction. The data presented in this report should be interpreted with these caveats in mind and consider that it may not fully capture all aspects of federal procurement activity.