Why the Royal Navy retained its own dockyards

Were warships built by private contractors as well as royal yards?

Yes, but royal dockyards built much of the fleet and gave the Navy the expertise needed to check private prices and avoid dependence on a sole supplier.

Private contractors received naval work, while royal dockyards preserved the Navy's ability to build ships itself. Officials could use that experience to check whether private prices were reasonable. The dockyards also built the largest ships. This practical knowledge is the basis for a criticism of private ownership where a warship yard has one government customer and that government depends on a sole supplier.