US House committee opens door for 'overseas construction' of Navy support ships

A proposed change in the US House Appropriations Committee's draft defense budget for fiscal year 2027 could open the door for the Navy to build certain support ships overseas. The draft significantly narrows the scope of a long-standing prohibition against foreign shipbuilding for the Navy, previously applied to all naval vessels.

The revised language in the draft, released by the committee on June 10, specifies that funds cannot be used to build 'covered ships' or their major components in foreign shipyards. A 'covered ship' is defined as a commissioned combatant vessel on the official Navy registry. This contrasts with previous versions, such as the fiscal year 2026 defense budget, which prohibited the use of foreign shipyards for 'any naval vessel.'

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The 'covered ship' means a commissioned combatant vessel on the official Navy registry.

If the proposed change is enacted, it could allow auxiliary vessels like strategic sealift ships, bulk fuel carriers, and hospital ships to be built outside the US. The Navy's budget request for fiscal year 2027 includes 16 such 'other vessels' alongside 18 combatant ships, totaling $65.8 billion. Notably, the Navy explicitly stated its intention to "explore overseas construction opportunities" for strategic sealift and bulk fuel carriers, indicating a clear preference for foreign procurement for these specific types of ships.

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The Navy intends to 'explore overseas construction opportunities' for strategic sealift ships and bulk fuel carriers.

While this change in the appropriations bill is significant, it does not immediately clear all hurdles for foreign shipbuilding. A permanent law, Title 10, Section 8679 of the US Code, still prohibits the construction of US military vessels and their major components in foreign shipyards. However, this law includes a provision allowing for exceptions if the President deems it necessary for national security. Therefore, if the appropriations bill is passed as drafted, President Trump could grant waivers for overseas construction based on national security grounds.

The House Armed Services Committee has also taken steps in a similar direction. On June 5, it passed an amendment to the fiscal year 2027 National Defense Authorization Act (NDAA) that would prevent Navy funds from being used for contracts to build 'combatant vessels' abroad. While this amendment also aims to prevent foreign construction of support ships classified as combat power, its overall framework, like the appropriations bill, leaves open the possibility for foreign construction of support ships not classified as combat power.

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The law prohibits the construction of US military vessels and their major components in foreign shipyards, unless the President determines it is necessary for national security.