For contractors pursuing work under the Navy’s Shipyard Infrastructure Optimization Program at Puget Sound Naval Shipyard and Intermediate Maintenance Facility, the Government Accountability Office’s September 2026 report points to a market that is broader, more complex, and less predictable than the major dry-dock projects alone might suggest.GAO estimates that SIOP will cost more than $200 billion and take more than 50 years to execute across the Navy’s four public shipyards. At Puget Sound, the immediate story is not just the program’s scale. It is the combination of active-yard construction, newly assessed seismic risks, major dry-dock planning, facility relocations, utility work, and a funding structure that will produce opportunities through several acquisition channels.
Execution inside an active shipyard
SIOP is not simply a series of large construction projects. It is a long-term modernization program that must be carried out while Puget Sound continues performing critical ship-maintenance work. The shipyard maintains aircraft carriers and submarines and also performs unique inactivation, reactor-compartment disposal, and recycling work that accounts for about 12 percent of its annual workload.
That continuing mission changes the construction problem. GAO reports that SIOP construction and shipyard operations occur in the same areas at the same time. At Puget Sound, the planned dry-dock project will require demolition and relocation of existing facilities, piers, and other infrastructure, along with the temporary relocation of some building occupants.
Contractors should therefore expect access, laydown, temporary facilities, utility interruptions, and construction sequencing to be core elements of project execution. Successful execution will depend not only on building the work, but also on doing so without disrupting the shipyard’s ongoing mission.
Seismic risk is reshaping the work
GAO’s Puget Sound findings also show that seismic resilience is now a major scope driver. Since 2023, the Navy has identified more than $1 billion in facility retrofits and new construction to address newly assessed seismic risks at Puget Sound, affecting about two dozen buildings. The Navy completed emergency dry-dock retrofits and repairs in 2023 and requested $830 million in its fiscal year 2026 budget request for seismic upgrades to Dry Dock 4.
For industry, the practical implication is that seismic work should not be treated as a peripheral design issue or a one-time project feature. Contractors should expect seismic resilience to influence enabling work, phasing, utilities, facility interfaces, cost, and schedule as individual Puget Sound projects develop.
GAO’s account of the planned Puget Sound dry-dock project also demonstrates the value of early constructability input. Contractor advice concerning construction practices and logistics led to a full redesign of the project and much of the surrounding shipyard layout. The lesson for industry is that credible solutions for phasing, access, temporary works, and continuity of operations may influence project planning well before construction begins.
The opportunity extends beyond MILCON
Contractors assessing the Puget Sound market should not focus only on the large military-construction projects. GAO reports that SIOP work is funded through Military Construction, Operation and Maintenance, and procurement appropriations. Of the 100 construction projects completed or underway across the program as of April 2026, 86 were funded through Operation and Maintenance and 14 through Military Construction. Of 40 additional projects then in design for near-term budget requests, 31 were expected to use Operation and Maintenance funding.
Those figures matter for business development. Contractors that monitor only headline MILCON opportunities will see only part of the market. Repair and modernization packages, utility upgrades, enabling work, and equipment or infrastructure procurements may move through different funding and acquisition paths and may not appear together in one program list.
An evolving market
GAO reported that the Navy planned to seek approval in late fiscal year 2026 of an overall program plan and cost estimate and to establish a cost and schedule baseline for the first block of projects through fiscal year 2042. GAO also concluded that the Navy’s oversight framework did not provide for regular future reviews of program requirements and sufficiency or consolidated, standardized reporting to Congress on full program costs and risks.
For contractors, the point is not simply that SIOP is large and long-lived. The program will continue to adjust as assumptions are tested against fleet requirements, available funding, site conditions, and execution experience. No single budget request, project sequence, or planning document should be treated as a definitive map of the Puget Sound market.
The opportunity at Puget Sound is substantial, but it will not unfold through a single project list, funding stream, or acquisition vehicle. Contractors that understand active-yard construction, seismic and waterfront work, complex sequencing, and interdependent scope will be better positioned to identify and pursue the work as individual acquisitions develop.
Source
U.S. Government Accountability Office, Naval Shipyards: Complete Information Needed for Decision-Making on Multibillion-Dollar, 50-Year Infrastructure Program, GAO-26-107830 (September 25, 2026), including pp. 5-6, 14-20, 25-35, and 44-46.