Why warship design moved from naval departments to contractors

Why did the United States and Britain move warship design from in-house naval organizations to private contractors?

Cost and shared commercial capacity drove the change, but specialized warship firms often became de facto government-dependent suppliers.

Private construction was promoted as cheaper because civilian yards could share their capacity with other customers. A navy ordering too few ships could struggle to keep a government yard economical. Warship construction is so specialized, however, that private suppliers can still become dependent on government orders. In that situation, the argument for keeping the work in-house remains persuasive.