Two central questions will be addressed in the proposed work. These are 1) For new constructions: are current Navy specifications for tolerances and structural details too stringent? Can some of them be relaxed so as to minimize ship construction costs? 2) For ships in service; how important is it to repair small damages such as dents, small cracks, initial deformations and distortions, misalignments and incorrectly built details? What criteria should be used to base a repair or replacement decision on? In both cases, the objective is to minimize cost of new constructions or repairs of in-service ships without serious degradation to structural performance. Towards this end, reliability principles will be applied in the proposed work to develop a methodology and criteria for minimizing cost, constraint by a minimum acceptable reliability level. In Phase II of the project, alternative specifications and repair/replacement criteria will be developed based on Phase I results. Both current and the proposed alternative specifications will be applied to ship structures in order to estimate the cost savings associated with the new proposed specifications.