I’ve learned that when the U.S. Navy “sells” a supercarrier for a penny, it isn’t a fire sale or a budgeting mistake—it’s the final act in a long, expensive life cycle that taxpayers have already funded. The one-cent price tag is really a legal and accounting formality that hides a much bigger story about how the Navy offloads enormous, aging warships that are too costly to keep and too complex to scrap itself.
To understand why a vessel that once cost billions ends up changing hands for less than a gumball, I need to walk through how these ships are built, used, retired, and finally broken apart. The answer lies in the economics of scrap metal, the hazards of dismantling nuclear-scale hardware, and the way the Pentagon shifts risk and responsibility to private contractors.
From Billion-Dollar Flagships to One-Cent Scrap
When I look at the life story of a supercarrier, the penny sale only makes sense in contrast to the staggering cost of building and operating it in the first place. The USS Kitty Hawk, for example, was commissioned in 1961 for $264 million, a figure that works out to about $2.5 billion in today’s dollars, and that original $264 million price tag only covered construction, not decades of fuel, maintenance, and crew. By the time a ship like that reaches the end of its service life, taxpayers have effectively sunk a small city’s worth of infrastructure spending into a single hull.
Once a carrier is decommissioned, though, its value flips from combat power to raw material and liability. The steel, wiring, and equipment have some resale value, but the vessel is also packed with hazardous materials and obsolete systems that are expensive to remove safely. That’s why, instead of trying to recoup the original $264 m or anything close to $2.5 billion, the Navy often accepts a nominal fee—literally one cent—and treats the deal as a way to transfer a massive disposal problem to a company that specializes in shipbreaking.
Why the Navy Uses One-Cent Contracts
On paper, selling a supercarrier for a penny looks absurd, but in practice it’s a contract structure that reflects who is really paying for what. Decommissioned carriers are enormous, complex vessels filled with layers of metal, electronics, and potentially hazardous substances, and dismantling them is a multi-year industrial project. As one analysis of Decommissioned carriers explains, the Navy is not trying to make money on the sale; it is trying to avoid paying hundreds of millions more to do the work itself.
Instead of cutting a check to a contractor, the Navy signs a contract that technically “sells” the ship for one cent while requiring the buyer to tow, dismantle, and recycle the vessel at its own expense. The contractor then hopes to cover its costs—and ideally turn a profit—by selling scrap metal and reusable components. The penny is just the legal consideration that makes the contract binding; the real currency is the scrap value and the obligation to handle the environmental and safety risks that come with tearing apart a floating industrial complex.
The USS Forrestal: The Original Penny Carrier
The most famous example of this approach is the former aircraft carrier USS Forrestal, which became a kind of shorthand for the penny-sale model. The Navy announced on Oct 22, 2013 that the ship had been awarded to a scrapping company for one cent, a detail that drew headlines because it seemed to suggest the Carrier was being given away. In reality, the USS Forrestal had already served for decades, and the Navy’s priority by that Tuesday was to get it safely to a yard that could handle the dismantling.
In a statement around the same time, the Navy explained that the contractor was developing a final tow plan to move the ship to its facility, underscoring that the one-cent price tag came bundled with a huge logistical and environmental responsibility. The deal, reported on Oct 22, 2013, made clear that the Navy was effectively trading the hull for the promise that the buyer would absorb the cost and risk of towing and scrapping a ship that was never designed with easy recycling in mind.
Kitty Hawk’s One-Penny Farewell
The USS Kitty Hawk followed a similar path, and its story shows how the penny model has become a standard way to close the books on aging carriers. Commissioned in 1961 for $264 million, the ship represented cutting-edge power at the height of the Cold War, and that $264 million figure—about $2.5 billion in current dollars—captures only the initial investment. By the time the Navy decided to dispose of it, the Kitty Hawk had long since delivered the value it was built for, and what remained was a massive, aging hull that needed a costly and carefully managed end-of-life plan.
When the Navy ultimately arranged for the Kitty Hawk to be scrapped, it used the same symbolic pricing that had applied to the Forrestal, effectively transferring the ship for one penny in exchange for a binding commitment to dismantle it. Reporting on The USS Kitty Hawk emphasizes that the real calculation was not about recouping the original $264 million but about avoiding the even higher cost of government-run disposal. From the Navy’s perspective, the penny was a small price to pay to ensure the ship’s final journey ended in a controlled, privately managed teardown instead of a taxpayer-funded demolition project.
The “Giant Catch” Behind Penny Sales
When I dig into the economics behind these deals, the “giant catch” becomes obvious: the buyer is not getting a bargain warship; it is inheriting a massive demolition job. Decommissioned carriers contain large amounts of metal, electronics, and potentially toxic materials, and the process of cutting them apart must comply with strict environmental and worker-safety rules. Analyses published on Jun 27, 2025 describe how Decommissioned carriers are so expensive to dismantle that the Navy would struggle to generate significant revenue from their sale even if it tried.
For the scrapping company, the business case hinges on the scrap market and the efficiency of its operations. If steel prices are strong and the yard can process the hull quickly, the firm might turn a profit; if prices fall or unexpected hazards slow the work, that one-cent purchase can become a financial burden. The Navy’s one-penny contracts effectively shift that market risk from the government to the private sector, which is better positioned to manage it but also more exposed when the numbers don’t break its way.
Why Scrap Prices and Distance Matter
Another piece of the puzzle is the simple fact that scrap metal prices and towing distances can make or break the economics of a carrier’s final voyage. A ship the size of the Kitty Hawk or Forrestal has to be towed thousands of miles to a yard capable of handling it, and that journey alone can cost millions in fuel, tug services, and insurance. When scrap prices are low, the value of the recovered metal may not even cover the cost of getting the ship to the yard, let alone the labor and equipment needed to cut it apart.
That’s why some observers have emphasized that the penny price is less a giveaway than a reflection of how thin the margins can be. One detailed explanation from Jan 18, 2022 by Nathan Eddy, who lists a BA in Economics and Military History and Wars from Durham University, notes that when scrap prices are down and a ship faces a roughly 16,000-mile tow, the economics can be so tight that the government is essentially paying with the hull itself. In that framing, the penny is just a token; the real payment is the opportunity for the contractor to try to extract enough value from the metal to justify taking on the risk.
What Penny Carriers Reveal About Military Spending
When I step back from the individual ships, the pattern of penny sales says a lot about how modern militaries manage the full life cycle of their hardware. The Navy spends enormous sums up front—$264 million in 1961 dollars for the Kitty Hawk, equivalent to about $2.5 billion today—to field supercarriers that can project power around the world. But it then relies on private industry to absorb the back-end costs of disposal, using one-cent contracts to shift the financial and environmental burden of scrapping these giants once they are no longer needed.
For taxpayers, that approach can look like a bargain, because the government avoids writing huge checks for demolition and instead hands off the problem for a nominal fee. Yet the penny price also underscores how little residual value a highly specialized warship can have once its operational life is over. By the time a carrier is sold for one cent, its worth lies almost entirely in the raw materials that can be salvaged and the expertise of the companies willing to turn a hulking relic into recyclable scrap, even when the numbers are tight and the risks are high.
More from MorningOverview