This testimony was presented to the Subcommittee on Seapower of the Senate Armed Services Committee on Tuesday, April 22, 1997, in the Russell Senate Office Building in Washington, D.C. The purpose of this hearing was to receive testimony on the Department of the Navy’s shipbuilding development and procurement programs as reflected in the Defense Authorization Request for Fiscal Year 1998 and the Future Years Defense Program. RAND has recently conducted studies on the aircraft carrier industrial base, including an analysis of the costs and production schedule of the next aircraft carrier, the CVN 77. For this study, the Navy asked RAND to provide an independent, quantitative analysis of the aircraft carrier industrial base, with a focus on CVN 77. The studies examined how CVN 77 production is constrained by force structure goals, industrial-base considerations, and especially cost implications.