Rebuilding the Navy Starts Two Tiers Down

September 8, 2026

Most of the coverage of the August 13 shipbuilding memorandum went to carrier catapults. The sections that decide whether the fleet gets built are about suppliers most people have never heard of.

By Lu Bolden, Chairman & CEO, Bold New Solutions

On August 13 the President signed a memorandum directing the Secretary of War to rebuild the Navy’s shipbuilding industrial base. The headline was CVN-81: a plan, due in 60 days, to replace the Electromagnetic Aircraft Launch System and the Advanced Weapons Elevators with steam and hydraulics. That is one hull and one section of the document. The other four sections are about capacity, competition, spare parts, and the way the Navy changes designs in the middle of a build. Those are the sections that will decide whether ships get delivered, and they are about companies two and three tiers below the shipyard gate.

The memorandum names the problem in its first paragraph: “an atrophied shipbuilding industrial base, coupled with diminished adjacent supplier bases.” I run one of those adjacent suppliers. BNS Power manufactures MIL-STD switchboards, switchgear, motor controllers, and control and relay panels for Navy and Coast Guard ships at our plant in Sumter, South Carolina. Four companies in the United States are qualified to build that equipment. Every ship needs it. When a fleet plan depends on four companies for one category of component, you do not have a supply chain. You have four single points of failure standing in a row.

What the memorandum directs, and when

Section 3 adopts what the White House calls the Finland Model, named for the October 9, 2025 memorandum of understanding with Finland on medium icebreakers. A foreign shipbuilder can build the first two ships of a class abroad, for up to three ship classes, if it simultaneously does four things: builds or takes majority ownership of a U.S. shipyard and builds every ship after the first two there; hires and trains an American citizen workforce; licenses its shipbuilding techniques and technology to the U.S. yard; and “sources a United States supply chain for construction and maintenance of all ships at the United States shipyards.” The classes in scope are a new surface combatant for anti-submarine warfare, surface warfare, and convoy escort, plus CONSOL tankers and Roll-On, Roll-Off vessels. Plans are due in 90 days.

Section 4 directs a plan for a fifth public Navy shipyard, the first in over 80 years, with up to three new drydocks sized for every current and projected submarine class, sited near the Pacific Fleet, and open to public-private partnerships. Due in 120 days.

Section 5 directs a plan for a Component Repair Center “to receive new and refurbish old components and parts as required by the submarine repair industrial base,” located near road, rail, and river networks and holding at least one ship set of spare equipment for the Los Angeles, Virginia, Seawolf, Ohio, and Columbia classes. Due in 90 days.

Section 6 directs a review of Naval Sea Systems Command, including measures to “prevent NAVSEA from imposing redesigns or iterative design changes upon original mature parent designs.” Due in 120 days.

Taken together: buy more from domestic suppliers, keep more of what the fleet already owns in service, and stop the design churn that makes both harder than they need to be.

The cost driver nobody outside the industry talks about

Start with Section 6, because it is the least glamorous and the most consequential for companies like ours. Here is what an iterative design change looks like from a Tier 2 supplier’s bench. A change notice arrives on a switchboard that is already engineered and partly built. Engineering reworks the drawings. The design is requalified. A long-lead component in the original design is now obsolete, so somebody sources a replacement or engineers around it. The unit is retested. The schedule slips. Every dollar of that lands on the supplier before any equitable adjustment is negotiated.

A prime contractor absorbs that churn across a program budget measured in billions. A 25-person manufacturing shop absorbs it against a single job. Multiply that across two decades and you get what the memorandum describes in its opening paragraph: a supplier base that shrank one change notice at a time, without any single failure anyone could point to.

When the parent design holds, a supplier can invest in tooling ahead of demand, hold inventory, quote longer fixed-price terms, and hire ahead of the order. When it doesn’t, every one of those becomes a bet the supplier can’t afford, and the Navy pays for that caution in lead time.

“Receive new and refurbish old”

Section 5 is written with unusual care. The Component Repair Center is not described as a warehouse. It receives new components and refurbishes old ones, and it holds a full ship set of spares for five classes of submarine, including two classes that entered service in the 1970s and 1980s.

Refurbishing a thirty-year-old switchboard is a different trade from building a new one. You need people who have had the panels open on that class of equipment, who know its failure modes, who can source or engineer replacements for components the original manufacturer stopped making, and who can retest the result to the original specification. That is sustainment work. Nobody writes memoranda about it, and there is no ribbon cutting for year nineteen of an availability. But when a national policy document says the country needs the ability to refurbish old components and not only buy new ones, it is describing a capability that exists only because some companies kept doing the work quietly while the industrial base contracted around them.

We are one of them. Our Carolina Power Systems team in Sumter has built new switchgear for the fleet since 1994, and it refurbishes, repairs, and upgrades the same equipment on ships already in service. Our Cadick Corporation team has maintained, repaired, and refurbished the electrical systems aboard USCGC HEALY, the largest icebreaker in the United States fleet, for thirty years. And our BNS Networks team is currently upgrading shipboard propulsion communication networks to fiber optics on Military Sealift Command auxiliaries, the same category of vessel as the CONSOL tankers and Roll-On, Roll-Off ships named in Section 3. None of that work made headlines when it was delivered. All of it is what “receive new and refurbish old” means in practice.

The buy-American clause with teeth

Section 3(a)(iv) is the part of the Finland Model that will matter most to American component manufacturers. The requirement to source a U.S. supply chain is not a preference or a scoring factor. It is a condition of the waiver, and it covers maintenance as well as construction. Any foreign yard that qualifies will need U.S.-qualified MIL-STD electrical suppliers, and it will need them on a schedule set by a ship delivery, not by a supplier development plan.

That runs into the constraint the memorandum is trying to fix. Qualification, not sourcing, is the bottleneck. A MIL-STD switchboard is not a catalog item. It is a vibration-resistant, shock-qualified, custom-configured structure with a factory acceptance test behind it, and a yard cannot stand up a new qualified supplier in a quarter. The domestic supply chain the memorandum requires will be built from the suppliers that still exist, which is why keeping those suppliers healthy is the same project as building ships.

The data center world is learning the same lesson

Our other division builds power and network infrastructure for data centers, where the conversation for two years has been transformer lead times, switchgear backlogs, and the shortage of electricians and high-voltage technicians. The Navy has lived with that supplier base for twenty years. There is no separate one for ships. The same manufacturers and the same trades build the switchgear for a submarine tender and for an AI campus.

What happens next

The plans are due to the President between October 12 and December 11. What happens between now and then is unglamorous: capacity data, delivery histories, lead-time tables, and site criteria, assembled by people who will not be named in any announcement. The memorandum is a policy document. Rebuilding an industrial base is a manufacturing problem, and it gets solved in places like Sumter by people who already know how.

I have a direct interest here. BNS builds and refurbishes this equipment, and every directive in the memorandum would put more of that work in front of us. Weigh what I have written with that in mind. It is also why I can tell you, from the shop floor, that the supplier base is not a footnote to the shipbuilding problem. It is the shipbuilding problem, two tiers down.

Sources

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