    [Senate Hearing 107-696]
    [From the U.S. Government Publishing Office]

                                                     S. Hrg. 107-696, Pt. 2

    DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR
                                      2003

    =======================================================================

                                    HEARING

                                   before the

                          COMMITTEE ON ARMED SERVICES
                              UNITED STATES SENATE

                          ONE HUNDRED SEVENTH CONGRESS

                                 SECOND SESSION

                                       ON

                                    S. 2225

         TO AUTHORIZE APPROPRIATIONS FOR FISCAL YEAR 2003 FOR MILITARY
        ACTIVITIES OF THE DEPARTMENT OF DEFENSE, TO PRESCRIBE MILITARY
        PERSONNEL STRENGTHS FOR FISCAL YEAR 2003, AND FOR OTHER PURPOSES

                                   ----------

                                     PART 2

                                    SEAPOWER

                                   ----------

                           MARCH 5, 19, APRIL 9, 2002

             Printed for the use of the Committee on Armed Services

    DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR
                             2003--Part 2  SEAPOWER

                                                     S. Hrg. 107-696, Pt. 2

    DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR
                                      2003

    =======================================================================

                                    HEARING

                                   before the

                          COMMITTEE ON ARMED SERVICES
                              UNITED STATES SENATE

                          ONE HUNDRED SEVENTH CONGRESS

                                 SECOND SESSION

                                       ON

                                    S. 2225

         TO AUTHORIZE APPROPRIATIONS FOR FISCAL YEAR 2003 FOR MILITARY
        ACTIVITIES OF THE DEPARTMENT OF DEFENSE, TO PRESCRIBE MILITARY
        PERSONNEL STRENGTHS FOR FISCAL YEAR 2003, AND FOR OTHER PURPOSES

                                   __________

                                     PART 2

                                    SEAPOWER

                                   __________

                           MARCH 5, 19, APRIL 9, 2002

             Printed for the use of the Committee on Armed Services

    ?

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                          COMMITTEE ON ARMED SERVICES

                         CARL LEVIN, Michigan, Chairman

    EDWARD M. KENNEDY, Massachusetts     JOHN WARNER, Virginia,
    ROBERT C. BYRD, West Virginia        STROM THURMOND, South Carolina
    JOSEPH I. LIEBERMAN, Connecticut     JOHN McCAIN, Arizona
    MAX CLELAND, Georgia                 BOB SMITH, New Hampshire
    MARY L. LANDRIEU, Louisiana          JAMES M. INHOFE, Oklahoma
    JACK REED, Rhode Island              RICK SANTORUM, Pennsylvania
    DANIEL K. AKAKA, Hawaii              PAT ROBERTS, Kansas
    BILL NELSON, Florida                 WAYNE ALLARD, Colorado
    E. BENJAMIN NELSON, Nebraska         TIM HUTCHINSON, Arkansas
    JEAN CARNAHAN, Missouri              JEFF SESSIONS, Alabama
    MARK DAYTON, Minnesota               SUSAN COLLINS, Maine
    JEFF BINGAMAN, New Mexico            JIM BUNNING, Kentucky

                         David S. Lyles, Staff Director

                  Judith A. Ansley, Republican Staff Director

                                     ______

                            Subcommittee on Seapower

                   EDWARD M. KENNEDY, Massachusetts, Chairman

    JOSEPH I. LIEBERMAN, Connecticut     JEFF SESSIONS, Alabama
    MAX CLELAND, Georgia                 JOHN McCAIN, Arizona
    MARY L. LANDRIEU, Louisiana          BOB SMITH, New Hampshire
    JACK REED, Rhode Island              SUSAN COLLINS, Maine
    JEAN CARNAHAN, Missouri              JIM BUNNING, Kentucky

                                      (ii)
    ?

                                C O N T E N T S

                                  ----------

                        CHRONOLOGICAL LIST OF WITNESSES
                      Marine Corps Modernization Programs
                                 march 5, 2002

                                                                       Page

    Jones, Gen. James L., Jr., USMC, Commandant, United States Marine
      Corps; Accompanied by Lt. Gen. Robert Magnus, USMC, Deputy
      Commandant of Programs and Resources...........................     4

    Maximizing Fleet Presence Capability and Ship Procurement and Research
                                and Development
                                 march 19, 2002

    Wachendorf, Rear Adm. Miles B., USN, Director, Strategy and
      Policy Division, Office of the Chief of Naval Operations.......    61
    Mullen, Vice Adm. Michael G., USN, Deputy Chief of Naval
      Operations for Resources, Requirements, and Assessments........    83
    Young, Hon. John J., Jr., Assistant Secretary of the Navy for
      Research, Development, and Acquisition.........................    87

    Navy Equipment Required for Fielding a 21st Century Capabilities-Based
                                      Navy
                                 april 9, 2002

    Clark, Adm. Vernon E., USN, Chief of Naval Operations............   144
    Whitlow, Maj. Gen. William A., USMC, Director, Expeditionary
      Warfare Division, Office of the Deputy Chief of Naval
      Operations for Warfare Requirements and Programs...............   165
    Balisle, Rear Adm. Phillip M., USN, Director, Surface Warfare
      Division, Department of the Navy...............................   172
    Sullivan, Rear Adm. Paul F., USN, Director, Submarine Warfare
      Division, Office of the Deputy Chief of Naval Operations,
      Department of the Navy.........................................   199
    McCabe, Rear Adm. Michael J., USN, Director, Air Warfare
      Division, Department of the Navy...............................   208

                                     (iii)

    DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR
                                      2003

                                  ----------

                             TUESDAY, MARCH 5, 2002

                                   U.S. Senate,
                              Subcommittee on Seapower,
                                   Committee on Armed Services,
                                                        Washington, DC.

                      MARINE CORPS MODERNIZATION PROGRAMS

        The subcommittee met, pursuant to notice, at 3:30 p.m. in
    room SR-222, Russell Senate Office Building, Senator Edward M.
    Kennedy (chairman of the subcommittee) presiding.
        Committee members present: Senators Kennedy, Sessions,
    McCain, and Collins.
        Majority staff member present: Creighton Greene,
    professional staff member.
        Minority staff members present: Gary M. Hall, professional
    staff member; Ambrose R. Hock, professional staff member; and
    Thomas L. MacKenzie, professional staff member.
        Staff assistants present: Dara R. Alpert and Andrew Kent.
        Committee members' assistants present: Menda Fife and
    Christina L. Martin, assistants to Senator Kennedy; Marsall A.
    Hevron, assistant to Senator Landrieu; Christopher J. Paul,
    assistant to Senator McCain; Arch Galloway II, assistant to
    Senator Sessions; Kristine Fauser, assistant to Senator
    Collins; and Derek Maurer, assistant to Senator Bunning.

               OPENING STATEMENT OF SENATOR JEFF SESSIONS

        Senator Sessions. Our chairman Senator Kennedy has asked me
    to start this hearing on time. He will join us shortly. He is
    chairing an important committee hearing on cloning and other
    issues as chairman of the Senate Health, Education, Labor, and
    Pensions Committee.
        So in the spirit of bipartisanship, which has really been
    exemplified on this subcommittee by Senator Kennedy's
    leadership, I want to welcome our subcommittee to the first
    seapower hearing of this budget review cycle. We are delighted
    to welcome the Commandant of the Marine Corps, General Jim
    Jones, to kick off our seapower hearings. It is my pleasure
    once again to serve as the ranking member on this subcommittee.
    I thank Senator Kennedy for his leadership. He has scheduled
    hearings that will explore the key issues facing us while
    exercising oversight of the many seapower procurement and
    research and development programs.
        It is prudent for us to begin our hearings by asking the
    big picture question: What is it that our military forces are
    supposed to be able to accomplish? The Secretary of Defense
    answered this in September 2001 in the Quadrennial Defense
    Review, which states the four defense policy goals as: assuring
    our allies and friends; dissuading future military competition;
    deterring threats and coercion against United States interests;
    and if deterrence fails, decisively defeat. The Navy and Marine
    Corps team are vital to carrying out all four of these policy
    goals.
        Seapower is another way to describe the capabilities the
    Navy and Marine Corps have to meet the challenge described in
    the QDR of ``projecting and sustaining U.S. forces in distant
    anti-access environments.'' The Secretary of the Navy has
    reaffirmed a commitment to remain forward-engaged while
    developing future capabilities.
        Forward presence enabled the regional commander to
    initiate, on relatively short notice, Operation Enduring
    Freedom using three aircraft carrier battle groups and two
    amphibious ready groups with an embarked Marine Corps brigade
    command element. The performance of our men and women in
    uniform and from our government agencies in Operation Enduring
    Freedom in fighting terrorism here at home has been superb.
        There are a number of issues that I look forward to
    exploring today with our witnesses, including the Marine
    Corps's role in fighting terrorism, organic and naval gunfire
    support, amphibious assault vehicles, and ships that provide
    tactical lift, command and control, and logistics. In addition,
    new Marine Corps concepts may require changes in equipment and
    operational capabilities.
        I remain committed to ensure the MV-22 Osprey program
    implements the recommendations of last year's review panel to
    incorporate safety, reliability, and maintainability fixes.
        I join our chairman in welcoming General Jones, the
    Commandant of the Marine Corps, and express my sincere
    appreciation to the Commandant for all the members of the
    Marine Corps, active duty, Reserve, civilian, and supporting
    family members for their sacrifices and continuing services to
    our great country.
        General Jones, thank you for being with us. This is the
    first of a series of important hearings we will be having on
    how we deal with seapower, of which the Marine Corps is a big
    part. But first, if you would tell me, what is the state of the
    Corps? How do you feel about the morale and readiness and just
    the general feel for the Corps at this point in time?
        [The prepared statement of Senator Sessions follows:]

                  Prepared Statement by Senator Jeff Sessions

        It is my pleasure to serve, once again, as ranking member of the
    Seapower Subcommittee. I thank Senator Kennedy for his leadership of
    this subcommittee. He has scheduled hearings that will explore the key
    issues while exercising oversight of the many Seapower procurement and
    research and development programs.
        It is prudent for us to begin our hearings by asking the big
    picture question: What is it that our military forces are supposed to
    be able to accomplish?
        The Secretary of Defense answered this question in the September
    2001 Quadrennial Defense Review (QDR) which states the four defense
    policy goals are:

            1. Assuring allies and friends.
            2. Dissuading future military competition.
            3. Deterring threats and coercion against U.S. interests; and
            4. If deterrence fails, decisively defeat.

    The Navy and Marine Corps team are vital to carrying out all four of
    these policy goals.
        The QDR also notes that ``access'' will be a key issue in the
    future and our ability to use land-basing of forces may be limited. The
    Commandant of the Marine Corps stated, ``Sea-basing affords us the
    flexibility of employing robust air and ground forces at a time and
    place of our choosing.'' The Commander in Chief of the Atlantic Fleet
    recently stated, ``We can fight here or over there, I'd rather fight
    them over there.''
        Seapower is another way to describe the capabilities the Navy and
    Marine Corps have to meet challenge described in the QDR of
    ``projecting and sustaining U.S. forces in distant anti-access
    environments,'' in other words, fighting them over there. The Secretary
    of the Navy has reaffirmed a commitment to remain forward engaged while
    developing future capabilities.
        Forward presence enabled the regional commander to initiate, on
    relatively short notice, Operation Enduring Freedom using three
    aircraft carrier battle groups and two amphibious ready groups with an
    embarked Marine Corps brigade command element. It is noteworthy that
    the Marine Corps brigadier general who commanded the brigade command
    element, was the first Marine to command a naval task force, Task Force
    58. This accomplishment is a testament to the close cooperation of the
    Navy and Marine Corps leadership. The performance of our men and women
    in uniform and from our government agencies in Operation Enduring
    Freedom and fighting terrorism here at home has been superb.
        The U.S.S. Kitty Hawk's serving as a forward operating base for
    special operations forces and the ability of the Peleliu and Bataan
    Amphibious Ready Groups and 15th and 26th Marine Expeditionary Unit
    (Special Operations Capable) to use Marine Corps aircraft to lift sea
    based Marines 400 miles into Afghanistan are excellent examples of
    transformational forces and platforms.
        However, the QDR and Operation Enduring Freedom are not the end,
    they are the beginning. The Secretary of the Navy has been directed by
    the Secretary of Defense to develop new concepts of maritime pre-
    positioning, high-speed sealift, and new amphibious capabilities for
    the Marine Corps. In addition, he has been tasked to shift some to the
    Marine Corps' afloat pre-positioned equipment from the Mediterranean
    toward the Indian Ocean and Arabian Gulf and to explore the feasibility
    of conducting Marine Corps training for littoral warfare in the Western
    Pacific. The Marine Corps has a memorandum of understanding with the
    Special Operations Command which will provide the framework for future
    development and strengthening of relations between the two
    organizations.
        There are a number of issues I look forward to exploring today with
    our witness including the Marine Corps' role in fighting terrorism,
    organic and naval gun fire support, amphibious assault vehicles, and
    ships that provide tactical lift, command and control, and logistics.
    In addition, new Marine Corps concepts may require changes in equipment
    and operational capabilities. The Marine Corps' warfighting lab has led
    the way in quickly evaluating methods and equipment to support
    expeditionary maneuver warfare. Integrated logistics, strategic
    agility, operational reach, and tactical flexibility issues are
    fundamental to understanding unique capabilities of the Marine Corps.
        I am well aware of the validated requirement for the MV-22 Osprey,
    and the improved capability it will deliver in speed, range, and
    payload. However, I remain committed to ensure the program implements
    the recommendations of last year's review panel to incorporate safety,
    reliability, and maintainability fixes.
        I look forward to exploring these issues with our witness today as
    we review Marine Corps requirements for equipment and force structure
    to meet today's and future challenges.
        I join our Chairman in welcoming General Jones, the Commandant of
    the Marine Corps, and I express my sincere appreciation to the
    Commandant for all members of the Marine Corps: active duty, Reserve,
    civilian, and supporting family members for their sacrifices and
    continuing service to our great country.

    STATEMENT OF GEN. JAMES L. JONES, JR., USMC, COMMANDANT, UNITED
      STATES MARINE CORPS; ACCOMPANIED BY LT. GEN. ROBERT MAGNUS,
           USMC, DEPUTY COMMANDANT OF PROGRAMS AND RESOURCES

        General Jones. Thank you, Senator, very much for that kind
    welcome. To you and the chairman, I want to express my
    appreciation for the opportunity to be here today to talk about
    marines and their families and how we feel about ourselves. If
    you do not mind, I have a very short opening statement that
    will address that question and I will ask that it be entered
    for the record if that is okay with you.
        Senator Sessions. That would be wonderful.
        General Jones. Senator, in February some of the members of
    this subcommittee and I had the privilege of attending a
    conference on international security in Munich, Germany. I
    remembered a statement uttered by the Secretary General of NATO
    just before he gave his speech at this conference. He said:
    ``Diplomacy is a nation's first line of defense, but it is a
    wise diplomat who pays attention to his nation's second line of
    defense in case the first line fails.'' What we represent today
    is the second line of defense and it is in that context that I
    address you.
        So I would like to talk a little bit about some of the
    great things that have happened as a result of the 2002 budget
    first and the actions of this subcommittee and the full
    committee in the Senate authorization process. It was the best
    readiness budget we have had in about 10 years and it really
    impacted significantly on the health and vitality of marines
    and their families.
        As a result, marines today are extremely secure in their
    identity, who they are and what they do. We see ourselves as a
    sea-based rotational expeditionary combined arms force. Those
    words are very important and each one of them has an awful lot
    behind them, but that is who we are and that is what we do. We
    are characterized by our association with our naval heritage
    and the power of our teamwork with the United States Navy.
    Together, we provide immediate response, a persistency of
    application, and a sustainability of effort that is, in my
    humble opinion, unmatched, unequalled in any other armed force
    in the world.
        The cornerstone of the Marine Corps's fighting capability
    is found in the Marine Corps expeditionary brigade. This is the
    central piece and central to our success in Operation Enduring
    Freedom that you referred to just a moment ago.
        Second, the Marine Corps is culturally stable, as proven
    not only by our success in recruiting, but astoundingly
    successful in retention for the professional portion of our
    Corps. As I have mentioned before the full committee before, 60
    percent of all marines are always on their first enlistment,
    which means that the average age of a United States Marine is
    always somewhere around 24 years old.
        The 2002 budget also supported our families, and supported
    our single marines. We have made great progress in revitalizing
    our housing, our health care, and our pay and allowances, which
    our troops and our civilians so well deserve.
        Point three about the 2002 budget, it has emphasized, I
    think, some unique characteristics that belong to the Marine
    Corps. We draw our strength from our partnership with the Navy.
    Operation Enduring Freedom dramatically highlighted the fact
    that we are no longer just an amphibious force in the classic
    World War II sense, but we are truly an expeditionary force
    that can project combined arms up to and beyond 600 miles
    inland in a landlocked country if necessary and sustain it for
    a considerable period of time.
        Operation Enduring Freedom answered the challenge to the
    specters of the past on the issue of sovereignty, which is
    going to be a difficult problem for us nationally in the future
    as we pursue this global war on terrorism. Access is important
    and naval platforms contribute to a solution to the access
    challenge, as demonstrated in Afghanistan, and this was a
    timely solution.
        We also saw that the ability of all of our forces to
    operate together is now a reality. Those who think that the
    services spend so much time squabbling with one another over
    resources that they do not get anything done in that context,
    they are simply misinformed. This was a seamless integration
    between Special Operations Forces, conventional forces, roles
    and missions of each service being brought to the fore, and
    partnership on the ground, that clearly resulted in strategic
    and tactical successes that we should all take great pride in,
    because it brought about enormously good results in a
    remarkably short period of time.
        The 2003 budget request for the Marine Corps is a budget
    that was carefully put together in partnership with the
    Secretary of the Navy and the CNO. It continues to take us down
    the path of emergence from the years of failure to recapitalize
    and modernize. It adds $1.3 billion to our military personnel
    account, $1.5 billion to our procurement and R&D account, and
    another $1.5 billion to operations and maintenance.
        It is reduced by about $98 million from the 2002 MILCON
    budget, but it is still better than the 2001 military
    construction account and years preceding that. As a matter of
    fact, we have been able to add 20 percent within our MILCON
    budget for family housing, which we are very excited about and
    will serve to modernize a lot of our housing throughout the
    Marine Corps.
        It also provides for a pay raise, a targeted pay raise,
    career prepaid enhancements, reduces out of pocket expenses for
    housing from 11.3 percent to 7.5 percent, with the goal of
    achieving zero by 2005, which would be a tremendous
    accomplishment for our sailors and marines. It provides for 25
    percent real program growth over 2001 baseline for operating
    forces, 11 percent real program growth over 2001 baseline for
    our bases and stations, and it provides for 90 percent of the
    Marine Corps' executable requirements for depot maintenance. So
    it is, in fact, a budget that not only sustains modernization,
    but also gets us to the transformation aspect of the Secretary
    of Defense's programs.
        So in summary, Senator, it is a great time, I think, to be
    a United States Marine. We very much appreciate this
    subcommittee's support and clear support that will enable the
    Marine Corps to do its share with regard to transformation,
    which I would be happy to talk about in some detail if you
    would like. Your support gives us a clear sense that marines
    are appreciated. It translates very clearly to a joyous
    homecoming such as we had in California yesterday with the
    return of the 15th Marine Expeditionary Unit, Special
    Operations Capable, that returned from its involvement in
    Afghanistan. We continue to feel that the Corps is on the move
    in the right direction and we are eagerly awaiting the future.
        Thank you.
        [The prepared statement of General Jones follows:]

              Prepared Statement by Gen. James L. Jones, Jr., USMC

        Chairman Kennedy, Senator Sessions, distinguished members of the
    subcommittee; it is my pleasure to report to you on the state of your
    Marine Corps. On behalf of all Marines and their families, I want to
    thank the subcommittee for your continued support. Your commitment to
    increasing the warfighting and crisis response capabilities of our
    Nation's Armed Forces and to improving the quality of life for our men
    and women in uniform is central to the strength of your Marine Corps.
    As a result, your Corps was ready when called upon on September 11,
    2001. We thank you for your effort in ensuring that Marines and their
    families were poised to respond to the Nation's call in the manner
    Americans expect of their Corps.
        The direction of the Corps is confident, clear, and unambiguous.
    The Corps understands its role as a force in readiness but also
    realizes that the world is changing. For 226 years, Marines have always
    been innovators in order to be ready for the next war. To assure
    success, we continually strive to be capable of rapidly adapting to new
    circumstances inasmuch as we recognize that the future is
    unpredictable.
        The President's Fiscal Year 2003 Budget enables the Navy-Marine
    Corps Team to fight today's war on terrorism and transform itself to be
    ready for future challenges. This budget funds our 4th Marine
    Expeditionary Brigade anti-terrorism efforts, includes pay raises and
    new combat uniforms for our marines and provides increased health care
    for our retirees. It also allows us to harness the new capabilities
    found in tilt-rotor technology and Short Take-Off and Vertical Landing
    aircraft. We have increased funding for our operating forces in day-to-
    day operations, training, equipment maintenance, and force protection.
    Additionally, our bases and stations are sustained by the President's
    budget, which improves such critical areas as family housing and
    bachelor quarters. Furthermore, this budget's investments in ground
    equipment, ammunition and research and development will help us recover
    from prior year shortfalls.
        Marines have a vision for the future, and we are moving forward
    with the modernization and transformational efforts needed to make this
    vision a reality. We fully understand that our vision cannot be
    achieved independently of our sister Services. Each of us has our own
    critical role to play in providing for our collective security. It is
    important that each of our contributions be, simultaneously, both
    unique and complementary. In particular, the Corps stresses the
    importance of our key partnership with the Navy. The Navy-Marine Corps
    Team has never been stronger, nor more necessary for our country. In
    fact, the essence of our combined power is our teamwork.
        Americans have relied upon the Navy and Marine Corps Team to
    protect and promote the interests of the Nation since our creation by
    the Continental Congress in 1775. After helping to win American
    independence, Naval Services acted time and again to ensure our freedom
    and set in motion the ascendancy of our Nation as a global power under
    the banner of democracy and its potential. During the darkest hours of
    our history, the Navy and Marine Corps Team has remained the most
    useful and most frequently used expression of our Nation's interests in
    forward presence and crisis response. Those of us who are privileged to
    serve in the Naval Services today have inherited a legacy that we are
    dedicated to preserving. Together we will continue to flourish, due to
    steadfast appreciation of our heritage and a commitment to a tradition
    of continuous innovation and change.
        Teamwork is the bond that forever joins our Services and is the key
    to our enduring success. We have progressed from wooden ships of sail,
    with embarked Marines, to modern networked Naval expeditionary strike
    forces that are forward deployed and full spectrum capable. We are a
    combined-arms force capable of ensuring America's access, including
    sustainable forcible entry operations to distant inland areas and
    austere locations. Always moving forward, we are incorporating advanced
    technologies to increase our capabilities to include exploiting the
    tremendous potential of sea control and power projection. Our
    innovation is not limited to equipment and weapons systems but is also
    reflected in the development of new operational concepts and
    organizational evolution. When crises emerge, the Nation can depend on
    the Navy and Marine Corps Team.
        Today, I will describe the Marine Corps' relevance to the current
    security environment as well as our future role as America's sea-based,
    expeditionary, combined-arms force. I will also address the Marine
    Corps' role as the Nation's medium-weight expeditionary force, bridging
    the gap between America's Special Operations Forces and the Army's
    critical land war-winning capability. The preponderance of this
    statement will focus on the Marine Corps' transformation plans and our
    vision for the 21st century.
    I. The Marine Corps' Relevance: Power Projection from the Sea-base
        For the United States to provide its citizens with security and
    prosperity at home and abroad it must continue to lead the effort in
    maintaining international stability. One only need consider the events
    of September 11, and the fact that 30 percent of the United States
    Gross Domestic Product is directly related to global trade, to realize
    that America's well-being is inextricably linked to the international
    order. America must continue to establish and lead efforts to maintain
    stability around the world. This challenge requires the integrated
    application of all elements of national power--economic, political,
    diplomatic, cultural, intellectual, technological, and military.
    Working in concert with the other components of national power, our
    Armed Forces perform a vital role in establishing and maintaining
    conditions that directly affect global stability and America's security
    and prosperity. History shows that our men and women in uniform play a
    pivotal role in our Nation's international credibility. It is not an
    exaggeration to claim that our Nation's most important gift to world
    order is found in the service of our young men and women in uniform.
    Before anything good happens in the world, they are there establishing
    the framework for peace and stability.
        Inasmuch as global stability is intrinsically tied to America's
    relationship with other nations in the world community, the United
    States benefits significantly from military to military relationships
    around the globe. However, as nations continue to raise issues of
    sovereignty, especially during a crisis, we must find new ways to
    conduct our Nation's necessary engagements and have the means to
    respond to crisis without being excessively restricted by geo-political
    issues. In the 21st century, we are likely to see a change in the
    number and type of large, quasi-permanent American bases around the
    world as defined by the post-Cold War era. We must begin to develop
    alternatives to ensure that we are able to maintain our peacetime
    presence and our crisis response capabilities. 21st century basing
    initiatives are issues that will have to be addressed in the near
    future.
        We cannot deter aggression, nor defeat future adversaries, solely
    with military capabilities based at home. Regional engagement requires
    presence, and there is no such thing as truly effective ``virtual
    presence.'' The inherent mobility and flexibility of Naval forces in
    providing off-shore basing options is an effective counter to
    increasing limitations to access and basing rights. America's
    stabilizing influence overseas is contingent upon our ability to
    deploy, employ, and sustain persistent military forces from the sea.
    Indeed, the Navy-Marine Corps Team's sea-based power projection
    capabilities are a cornerstone of our military's contribution to our
    enduring security and that of our allies.
        Sea-based capabilities provided by the Navy-Marine Corps Team are
    an important means for America to cultivate its relationship with the
    world, providing the advantage, both in peacetime and in crisis
    response operations, of being able to control the size of our
    ``footprint'' ashore. Sea-basing also provides the operational
    advantages of force protection, operational maneuver space, and the
    sanctity of sovereign platforms from which we can engage adversaries.
        The Navy-Marine Corps Team's sea-based capabilities have been re-
    validated over the past several months. In Afghanistan, sea-based Naval
    forces provided a significant portion of tactical air sorties and the
    initial deployment of major, sustained ground force presence, reaching
    over 600 miles inland. [See Figure 1]
        Operation Enduring Freedom has also proven the value of the Navy-
    Marine Corps Team as an important element of a Joint Force.

                                   [Figure 1]

        Important contributions were made through Marine integration with
    Special Operations Forces, the Army, and the Air Force in the areas of
    Intelligence, Surveillance, and Reconnaissance capabilities to long-
    range strike and close air support capabilities. The Marine Corps has
    demonstrated that the Marine brigade--a flexible, medium-weight,
    combined arms, expeditionary force--is not only responsive, but also a
    full and effective partner in Joint and Coalition operations.
    II. The Marine Corps' Role: A Scalable, Sustainable, Forcible Entry
            Force
        The Marine Corps provides our Nation and its Joint Force Commanders
    the full scope of military capabilities required to respond to the
    broad spectrum of threats and potential missions that confront
    America's Armed Forces today and in the future. For 6 percent of the
    Department of Defense's budget, the Marine Corps provides 20 percent of
    our Nation's ground combat maneuver battalions, tactical fixed-wing
    aircraft squadrons, and attack helicopter squadrons, as well as one-
    third of its active duty combat service support.
        If there is a lesson to be learned from ongoing operations in
    Afghanistan, it is that there is tremendous power and capability in the
    diversity of our Armed Forces today. Joint Force Commanders must have
    the fullest possible range of options and capabilities available in
    order to apply the desired effects, both lethal and non-lethal, in any
    given scenario. Indeed, the flexibility and robustness of America's
    Armed Forces is a product of the varied and unique capabilities each
    Service contributes to our Nation. Accordingly, our capabilities need
    to be complementary, not duplicative, if we are to provide the diverse
    and versatile capabilities needed to confront the uncertain threats of
    the future. Together, our Joint force forms a mosaic of integrated
    capabilities to defeat the myriad threats and challenges we may face
    today and tomorrow. Enhancing these capabilities across the force is in
    the national interest.
        Marine Air-Ground Task Forces have proven their utility in meeting
    challenges and exploiting opportunities. The versatility of the Marine
    Expeditionary Brigade is emblematic of the scalability of our Marine
    Air-Ground Task Forces. In size and capability, these brigades are
    midway between our ``light'' Marine Expeditionary Units and our
    ``heavy'' Marine Expeditionary Forces. Furthermore, our Marine
    Expeditionary Brigades can either deploy on amphibious shipping or be
    airlifted into a theater of operations to link up with equipment and
    supplies aboard Maritime Prepositioning Ships.
        While the global war on terrorism has demonstrated the current
    capabilities of the Navy-Marine Corps Team, our continuous
    transformation and modernization promise even greater future
    capabilities for the Marine Corps. Transformation is an ongoing
    process, however, not an end-state. It spans decades of innovation and
    experimentation. It is also not limited to technology, but includes
    change in our organizational structure, operational concepts, and
    business practices.
        The Marine Corps has always been at the forefront of transformation
    and innovation. Throughout our history, the Marine Corps has changed
    and evolved--from ship security, to naval constabulary, to light
    infantry, to an amphibious assault force, to an air-ground
    expeditionary team. In the past, our development of close air support,
    amphibious warfare, vertical envelopment, Short Take-Off and Vertical
    Landing technology, and maritime prepositioning have benefited our
    Joint warfighting capability. Today, the Marine Corps remains true to
    its warrior culture and continues in a tradition of change. Drawing on
    our history of transformation, the Marine Corps is moving forward with
    new concepts, innovation, and exciting experimentation. Our focus is on
    the creation of new capabilities, which will yield the operational
    advantages we seek to have in dealing with future conflicts.
    III. The Marine Corps' Transformation: Concepts, Technologies, and
            Organizations
        Although many think of transformation primarily in terms of weapons
    systems, true transformation results from a synthesis of new
    technologies with strategic vision, revolutionary operational concepts,
    and agile, adaptive organizations. Clearly, we must harness the
    potential military benefits of rapid advances in technology. The V-22
    Osprey is but one example of the potential of proven transformational
    technology. The path to transformation involves a robust program of
    experimentation with new concepts, capabilities and operational
    prototypes while actively pursuing forward-looking science and
    technology efforts. As we experiment and introduce new capabilities, we
    will rapidly mainstream the changes into our ready forces. [See Figure
    2]

                                   [Figure 2]

        A. Transformation of Operational Concepts and Better Business
            Practices
        Technological innovation plays a paradoxical role in military
    transformation. With each problem it solves, technological innovation
    tends to introduce new challenges and opportunities. Operational
    concepts can offset these tensions by finding the means to capitalize
    on technological strengths and also guard against creating new
    weaknesses. In light of heightened fiscal awareness and the need to be
    effective with our resources, we must reform our business practices to
    maximize available resources and develop more expedient means of
    fielding programs and equipment. With this in mind, the Marine Corps is
    committed to transforming its operational concepts and business
    practices.
        The ongoing process of conceptual change is embodied in the recent
    publication of our overarching concept, Expeditionary Maneuver Warfare.
    It is the foundation for the way the Marine Corps will conduct
    operations in the 21st century. Expeditionary Maneuver Warfare is the
    union of our core competencies, maneuver warfare philosophy,
    expeditionary heritage, and the concepts by which we organize, deploy,
    and employ forces. It emphasizes the unique and proven capabilities the
    Marine Corps provides Joint Force Commanders and the synergy created
    when leveraged with the complementary capabilities of other Services
    and agencies. These capabilities translate into power projection
    designed to promote global security and reassure our allies and
    friends, while deterring and defeating adversaries and potential foes.
        Central to our conceptual transformation is the potential power
    represented in a future integrated sea-base. At-sea arrival and
    assembly, selective off-load, and at-sea reconstitution capabilities
    stand to revolutionize the way Naval forces project power and influence
    around the globe. Our evolving logistics concepts promise indefinite
    sustainment of Marine forces, both afloat and ashore. As well, Marine
    forces afloat typically rely upon the Command, Control, Communications,
    and Computer (C\4\) capabilities aboard amphibious shipping to provide
    critical reach-back connectivity to deployed elements of the Marine
    Air-Ground Task Force, and communications with Joint and multinational
    forces. These afloat C\4\ capabilities are crucial to the success of
    sea-basing and to achieving the full potential of Naval power
    projection.
        The Marine Corps' sea-basing strategy is yet another illustration
    of continued transformation in operational concepts. Recognizing the
    increasing limitations on future basing potential of American forces
    overseas and the simultaneous need for the United States to maintain a
    forward presence, the Navy and the Marine Corps are developing a
    forward presence strategy as an extension and augmentation of our
    concept of sea-basing. Sea-basing is the formation of Joint assets at
    sea to project and sustain combat power ashore, while reducing or
    eliminating our landward logistics footprint during combat operations.
    The sea-based presence strategy boosts forward engagement during
    peacetime by increasing the number of countries that we may visit
    without being permanently stationed at large fixed-bases in host
    nations. Marines can deploy from country to country and advance
    diplomatic and informational efforts through military-to-military
    relations, small unit training, liaison exchanges, and exercises. III
    Marine Expeditionary Force's annual Cooperation Afloat Readiness and
    Training in the Asia-Pacific region is an illustration of this concept.
        In addition to codifying overarching conceptual innovations, the
    Marine Corps is adjusting its tactics, techniques, and procedures to
    better support conceptual change. Marine Aviation Weapons and Tactics
    Squadron-1 is adapting tactics, techniques, and procedures for the
    employment of aviation operations in urban terrain--a vital, yet
    challenging environment today and in the future. Advancements have been
    made in target selection and tracking, weapon selection and employment,
    friendly unit position identification, command and control, and staff
    planning. Likewise, the Marine Corps is actively engaged in the
    development of the underlying concepts of Network Centric Warfare for
    Naval expeditionary forces. We are exploiting state-of-the-art
    information and networking technology to improve situational awareness
    and to integrate widely dispersed sensors, forces, and weapons. Network
    Centric Warfare will allow commanders to achieve mission objectives
    rapidly and decisively by concentrating the combined fire and maneuver
    of Naval forces afloat and ashore at decisive locations and times.
    Similarly, the Marine Corps led Joint Non-Lethal Weapons Directorate is
    forging the way for the development of non-lethal technologies, as well
    as the tactics, techniques, and procedures for effectively employing
    their effects. Congressional funding of the Non-Lethal Technology
    Innovation Center at the University of New Hampshire will continue to
    provide further stimulus for the experimentation and formulation of
    doctrine that guides the tactical use of these new weapons.
        Just as it is transforming its doctrine, the Marine Corps is also
    transforming its business practices. Our readiness is a reflection of
    balancing the demands of current requirements around the globe with the
    imperative to invest and be prepared for the future. This balance can--
    over the long haul--be achieved only if resources are reallocated from
    overhead and support activities to our fighting forces. To accomplish
    this reallocation of resources, we are adopting better business
    practices to achieve greater cost-effectiveness. There are several
    different avenues that the Marine Corps is taking to make this happen.
    We are streamlining organizations to eliminate redundancy and maximize
    integration. We are also reducing excess support structures to free
    resources and focus on core competencies.
        To transform our business practices, the Marine Corps must
    increasingly rely on business intelligence and associated technologies
    promoting access to information. We consider information to be a
    strategic asset, and by assuring access to information, we will improve
    the operational agility of the Marine Corps. Our efforts to promote
    enterprise management of information technology confirm our need for a
    common infrastructure that includes a shared data environment,
    realignment and consolidation of many of our information systems, and
    the search for cost-effective strategies.
        Commercialization, privatization, and out-sourcing are among the
    methods the Marine Corps has used to reduce costs, but ultimately it is
    competition between public and private sources that has led to
    increased savings. The Marine Corps has initiated competition between
    government sources and private sector commercial sources for a broad
    number of activities, best seen in the Marine Corps' application of
    such competition vis-`-vis its bases and stations. To operate our 15
    major installations--essentially providing the range of support
    services typical of a municipality--a labor force of approximately
    20,000 marines and 14,000 civilians are employed. One of the processes
    we have used in these competitions to save money is Activity-Based
    Costing and Management. This process provided our installation
    commanders information that enabled them to save over $30 million last
    year by analytically measuring the costs of particular work and
    evaluating the performance of that work.
        Another example of turning to the private sector and using
    competition to bring down costs is the success of our new camouflage
    utility uniform. The uniform was created, tested, produced, and fielded
    by the Marine Corps--with the use of a new digital camouflage design
    technique--through a single source vendor, yielding a product that is
    superior in quality, comfort, and cost to that in existence today. We
    are extremely pleased with this innovative uniform that not only costs
    less in the long run, but is a product improvement benefiting our
    marines. All of this was achieved within a 1 year period.
        Just as the Marine Corps' new utility uniform is an example of both
    tactical and business innovation, so too the transformation of
    operational concepts and business practices are seen together in our
    Integrated Logistics Capability. The Integrated Logistics Capability is
    redefining and realigning our supply and maintenance process by
    providing our logisticians with greater awareness of equipment status,
    increasing their capacity to more rapidly and effectively respond to
    logistical requirements on the battlefield. The simple objective of our
    Integrated Logistics Capability is to avoid weighing down the
    warfighters with the requirement to haul, protect, and administer
    massive amounts of supply material. The foundation of this concept and
    business practice is a revolutionary change in military methodology:
    shifting from massive inventories to small inventories. With the use of
    new technologies and practices, proven in the private sector, the Corps
    will, in essence, create a ``new order'' for its logistics enterprise
    and undertake the revolutionary changes necessary to ensure that it
    continues to be the premier fighting force in the world. Second Force
    Service Support Group at Camp Lejeune, North Carolina, is currently
    testing many of these new processes in a year long ``proof of concept''
    to validate the direction in which we are heading. These efforts will
    allow Marine logisticians to support the battlefield of the 21st
    century with a smaller logistical footprint in a more cost-effective
    manner.
        B. Transformation and Modernization Through Harnessing Technologies
        With the foundation of requirements drawn from its new concepts,
    the Marine Corps is transforming its weapons systems and assets
    throughout the five elements of our Marine Air-Ground Task Forces--our
    ground, aviation, logistics, and command elements, as well as our
    supporting establishment. The following examples are but a few of our
    transformational and modernization efforts. Many of our investments
    involve modernization of existing capabilities vital to effectively and
    efficiently fulfill our core competencies. A more comprehensive
    description of the Marine Corps' entire acquisition program can be
    found in the Marine Corps' Concepts & Issues: Forging the Future Marine
    Corps.
                Amphibious Shipping for Sea-basing
        We are a maritime nation and we must capitalize on this part of our
    national character to ensure that we are ready for the challenges that
    are over the horizon. The requirement for our amphibious shipping
    remains the linchpin of the Corps' ability to influence the
    international security landscape, project power, and protect the
    Nation's interests during peacetime and crises. While it has long been
    recognized that we require an amphibious ship force structure capable
    of simultaneously lifting the assault echelons of three Marine
    Expeditionary Brigades, today's amphibious lift can support only two-
    thirds of this requirement in certain aspects of the lift footprint. I
    strongly recommend that we commit to redress this shortfall as a matter
    of urgent priority.
        We are grateful for your support in replacing four classes of older
    ships with the new LPD-17 San Antonio amphibious ship class. Delivery
    of these 12 ships to the fleet is currently planned to be complete in
    2015. However, we remain concerned about further schedule slippage in
    the LPD-17 program. Such delays compromise our ability to fulfill our
    global forward presence responsibilities and must be avoided.
    Similarly, we are concerned with replacing the LHA-1 Tarawa-class
    ships. Considering the extended time-frame for ship design,
    construction, and delivery, we need to ensure now that we are ready to
    replace the Tarawa-class when they reach the end of their 35 year
    service life starting in 2011. [See Figure 3]

                                   [Figure 3]

        The leases of our current fleet of Maritime Prepositioning Ships
    (MPS) will expire in fiscal year 2009, fiscal year 2010, and fiscal
    year 2011. The development of advanced Maritime Prepositioning
    capabilities, High Speed Vessel platforms, and new lighterage vessels,
    will significantly increase the strength and flexibility of our sea-
    based expeditionary operations. The marriage of a modern amphibious
    fleet with modern Maritime Prepositioning Shipping capable of hosting
    at-sea arrival and assembly of forces will minimize the requirement for
    access to secure ports and airfields, and give our Nation an unmatched
    asymmetrical advantage in projecting power.
                Tilt-Rotor Aircraft
        The V-22 Osprey remains the Corps' number one aviation acquisition
    priority. Recent actions in Central Asia have only reinforced the
    immediate need for this truly transformational capability. [See Figure
    4]

                                   [Figure 4]

        Tilt-rotor technology holds the promise to revolutionize aviation--
    we should not be afraid to embrace this promise. Both the Department of
    Defense's Panel to Review the V-22 Program and the National Aeronautics
    and Space Administration's Tiltrotor Aeromechanics Phenomena Assessment
    Panel concluded that tilt-rotor technology is sound and that mishaps
    have been the result of engineering deficiencies that can be solved.
    The V-22 will radically increase the Marine Corps and Special
    Operations Command's operational reach and tactical flexibility. The
    Osprey's superior range, speed, and payload will give Marines and
    Special Operations Forces the ability to accomplish combat missions and
    other operations from distances previously unattainable, with response
    times far faster than possible with other airframes. The battlespace of
    the future will demand capabilities that provide rapid and effective
    maneuver. Through the use of the V-22's increased speed and range, we
    not only improve our ability to influence the tempo of operations, but
    we provide our forces with greater survivability. These capabilities
    are the foundation for how we have planned to transform our operational
    concepts and intend to reorganize our force structure.
        We are aware of the challenges associated with the Osprey but are
    pleased that the Under Secretary of Defense for Acquisition,
    Technology, and Logistics has announced that a new comprehensive flight
    test program for the V-22 will start this Spring. This flight test
    effort will be ``event-driven,'' as opposed to being ``time-driven.''
    Both the Secretary of the Navy and the Under Secretary of Defense for
    Acquisition, Technology, and Logistics will periodically review flight
    test results to assess progress.
                Short Take-Off and Vertical Landing Aircraft
        In late October 2001, the contract was awarded for the Joint Strike
    Fighter, signaling a new era in naval aviation. The advantages of a
    stealthy strike fighter capable of taking off from an expeditionary
    base on land or at sea, fly in supersonic cruise, accomplish its
    mission with advanced sensors and weapons, then return to its
    expeditionary site are dramatic. This aircraft will transform the very
    foundations of tactical air power. It will provide the reliability,
    survivability, and lethality that our forces will need in the years
    ahead. Moreover, the Short Take-Off and Vertical Landing Joint Strike
    Fighter variant provides operational access to more than three to five
    times the number of airfields available around the world that are
    currently capable of supporting our so-called ``legacy'' aircraft. The
    Short Take-Off and Vertical Landing Joint Strike Fighter can also
    operate from both conventional carriers and amphibious assault ship
    decks, effectively doubling the number of shipborne platforms available
    for operations. As these highly capable aircraft move from sea-based
    platforms to expeditionary airfields, they can effectively decrease
    response time for missions by 75 percent and increase time-on-station
    by 50 percent. These capabilities represent a significant increase in
    strategic agility, operational reach, and tactical flexibility over
    conventional aircraft.
                Fire Support Systems
        Of critical interest to our Marine Air-Ground Task Forces is the
    status of our fire support systems on land, at sea, and in the air. We
    currently have an acute shortage of fire support. It is vital for us to
    move ahead with existing programs to provide our marines with this
    important warfighting enhancement. Indeed, the funding, testing, and
    development of our systems are vital. The Lightweight 155 Howitzer is
    needed to replace our aging ``legacy'' field artillery weapons. The
    High Mobility Artillery Rocket System, moreover, promises to be rapidly
    deployable and will be a key part of our expeditionary operations,
    firing both precision and area munitions under all weather conditions,
    as well as extending our ground-based fire support umbrella to 60
    kilometers. In addition to these fire support systems, we need the
    Ground Weapon Locating Radar to protect our forces against our
    adversaries' counter-battery fires. We should also continue to invest
    in Naval Surface Fire Support. Remedying the fire support shortfall we
    have lived with for much of the last two decades is crucial.
                Advanced Amphibious Assault Vehicles
        The Advanced Amphibious Assault Vehicle program remains the Corps'
    highest ground acquisition priority and promises to allow high-speed
    surface maneuver from ship-to-shore as well as on land. This vehicle
    will be able to deploy to objectives from over the visual horizon, 25
    miles and beyond, and will allow our ships to remain beyond the range
    of many threat weapons and surveillance systems. It will help off-set
    an enemy's anti-access strategies and bolster expeditionary operations
    from the sea. Furthermore, the Bushmaster II 30mm cannon will give the
    vehicle a lethal direct fire capability. The Advanced Amphibious
    Assault Vehicle will be a decisive expeditionary warfare tool for
    operations in littoral areas world-wide.
                High Speed Vessel
        High-speed, intra-theater sealift, catamaran vessels provide
    phenomenal increases in speed and tactical flexibility for our Navy-
    Marine Corps Team. Building on operational use of the Royal Australian
    Navy's HMS Jervis Bay, our Joint Venture High Speed Vessel promises to
    reap new developments that will lead to new capabilities. Additionally,
    leasing the 331-foot commercial catamaran Austal West Pac Express, III
    Marine Expeditionary Force has demonstrated the viability of such
    vessels, using it to transport marines and their equipment to training
    exercises through out Asia--lifting 950 marines and 550 tons of
    materiel per trip, the equivalent of 14 to 17 military cargo aircraft.
    The Navy-Marine Corps Team's current requirement is for a craft that
    can transport 400 tons of cargo, travel 1,200 miles without refueling,
    and achieve a speed greater than 40 knots. We are confident in the High
    Speed Vessels capacity to deliver these capabilities and transform our
    intra-theater mobility.
                Tactical Unmanned Aerial Vehicles
        Unmanned Aerial Vehicles have already seen extensive action in the
    war against terrorism and their use is expanding. This technology's
    potential, combined with its ability to conduct dangerous missions
    without the risk of personnel casualties, making this a truly
    transformational asset. The Navy and Marine Corps' Vertical Take-Off
    and Landing Unmanned Aerial Vehicle Engineering Development Model
    program is designed to test and evaluate various sensor packages and
    the Tactical Control System architecture for use in future Tactical
    Unmanned Aerial Vehicles. In the interim, Marine Corps Pioneer systems
    will be upgraded to perform Unmanned Aerial Vehicle functions
    (Reconnaissance, Surveillance, and Target Acquisition). Presently,
    Marine Corps Unmanned Aerial Vehicles are preparing to deploy to
    Central Command's area of responsibility.
                Aerial Refueling
        Replacement of our aging KC-130 Hercules fleet with KC-130J
    aircraft is necessary to ensure the viability and deployability of
    Marine Corps Tactical Aircraft Refueling and Assault Support well into
    the 21st century. The KC-130J's performance features include increased
    cruising airspeed, night vision compatible interior and exterior
    lighting, enhanced rapid ground refueling capability, digital avionics,
    and powerful propulsion systems. These strengths promise lower life-
    cycle expenses and eliminate the need for costly KC-130F/R Service Life
    Extension Programs. In sum, the KC-130J gives us the aerial refueling
    capability required to meet our current and future tactical aerial
    refueling demands.
                Maritime Prepositioning Shipping Support Facility
        Supporting the Marine Corps' Maritime Prepositioning Shipping, the
    Blount Island facility in Jacksonville, Florida, is truly a national
    asset that must be secured for long-term use. Its peacetime mission to
    support the Maritime Prepositioning Force has been of exceptional value
    to the Corps, but its wartime capability of supporting massive
    logistics sustainment from the Continental United States gives it
    strategic significance. The purchase of Blount Island is planned for
    fiscal year 2004, when our current lease of the facility will expire.
                Command and Control
        Command and Control technologies being introduced into Marine
    operating forces are key to making Expeditionary Maneuver Warfare a
    reality. Marine forces once ashore will utilize the Lightweight Multi-
    band Satellite Terminal, Tactical Data Network, and High Frequency
    Automatic Link Establishment Radios to link widely dispersed forces
    into the Network Centric environment. These technologies will result in
    capabilities that will greatly increase the operational agility of your
    Marine Corps.
        C. Transformation of Organizational Structure
        The transformation of our weapons systems and equipment as well as
    our operational concepts and business practices is a difficult task.
    Transforming how we organize ourselves is even more difficult.
    Nonetheless, building on its institutional legacy of adapting to match
    the threats and missions of a given time, the Marine Corps is
    reorganizing its structure. Furthermore, at the core of transforming
    our organization, is the optimizing of our greatest asset, our marines.
        One of our leading examples of transformational reorganization is
    the 4th Marine Expeditionary Brigade (Anti-Terrorism). The 4th MEB (AT)
    combined our Marine Security Guards stationed at America's embassies
    around the world, Fleet Anti-Terrorist Security Teams, and Chemical
    Biological Incident Response Force with an organic aviation component,
    combat service support element, and specialized anti-terrorism infantry
    battalion, as well as a command element with dedicated planners,
    coordinators, and liaison officers for anti-terrorism operations. The
    4th MEB (AT) has had an immediate impact, deploying to our re-opened
    embassy in Kabul, as well as supporting anthrax decontamination at the
    Capitol and security at the Olympics and the State-of-the-Union
    address. In the near future, all deployable units will deploy with an
    anti-terrorism capability.
        In addition to standing up the 4th MEB (AT), we are looking at
    other organizational transformation initiatives. We are looking at
    additional ways to optimize our forces by realigning outdated
    structures to reflect new realities. Now is the time to consider how to
    best organize our forces to meet the needs of this transformational
    era.
        Similar self-examination has led to successful change in our
    supporting establishment. Three illustrations of this are Marine Corps
    Combat Development Command, the Marine Corps Intelligence Activity in
    Quantico, Virginia, and Materiel Command in Albany, Georgia. By
    reorganizing the Marine Corps Combat Development Command, we have
    redefined its role in supporting Marine Operating Forces and the
    Service Headquarters. It has emerged as the Corps' home for long-range
    thinking and has taken on the role of coordinating requirements with
    the Navy as well as facilitating the Marine Corps' relationship with
    Joint Forces Command. The Marine Corps Intelligence Activity, likewise,
    has been highly successful in validating our intelligence reach-back
    concept. Exploiting both new command relationships and connectivity,
    the Marine Corps Intelligence Activity is providing timely, accurate
    intelligence to our globally deployed tactical forces. Similarly, by
    establishing Materiel Command, we have created a unity of effort and
    streamlined processes for the Marine Corps' acquisition and logistics
    support functions and ground weapons/equipment life cycle management
    processes. Material Command transformation initiatives for materiel
    readiness improvements and increased visibility of total ownership
    costs will achieve significant future cost avoidance and savings. This
    allows the Installations and Logistics Department at Headquarters
    Marine Corps to more effectively concentrate on policy decisions and
    support to the operating forces and the regional combatant commanders.
    In each of these reorganizations, optimizing efforts of the men and
    women who serve our Corps has been our primary intent.
                Our People
        Our highest priority remains unchanged: Marines, their families,
    and our civilian workforce. The most advanced aircraft, ship, or
    weapons system is of no value without highly motivated and well-trained
    people. People and leadership remain the real foundations of the Corps'
    capabilities.
        It is important to note that the Marine Corps operates as a Total
    Force, including elements of both Active and Reserve components. We
    continue to strengthen the exceptional bonds within our Total Force by
    further integrating the Marine Corps Reserve into ongoing operations
    and training. Both Marine Expeditionary Force Augmentation Command
    Elements, two infantry battalions, two heavy helicopter squadrons, two
    aerial refueler transport detachments, as well as other units have been
    mobilized to support Operation Enduring Freedom. Called to duty, over
    3,000 Marine Reservists are providing seamless support from operational
    tempo relief at Guantanamo Bay to augmentation at Camp Pendleton and
    Camp Lejeune.
        Because our people are our number one priority, safety in the
    Marine Corps is a critical concern. While it is essential to
    maintaining our readiness, it is also a vital element of the quality of
    life that we provide our marines and their families. I am pleased to
    report that 2001 was a banner year for safety in the Marine Corps. The
    Aviation community set a record, posting the lowest Class A mishap rate
    in the Corps' history. Through education, vigilance, and command
    involvement we reduced privately owned vehicle fatalities 39 percent
    last year. Overall, we had our second lowest mishap fatality rate in 14
    years. These are all very positive signs in our quest to safeguard our
    most precious assets, our marines.
        One factor contributing to our safety challenge is that we are a
    young force. The average age of our marines is 24, roughly 6 to 8 years
    younger than the average age of the members of the other services. This
    is part of the culture of the Corps as our unique force structure shows
    68 percent of our marines being on their first enlistment at any one
    time. The nature of our force structure requires us to annually recruit
    41,000 men and women into our enlisted ranks. To fill this tremendous
    demand, our recruiters work tirelessly and have consistently met our
    accession goals in quality and quantity for over 6\1/2\ years. The
    performance of our recruiters has been superb.
        Retention is just as important as recruiting. We are proud that we
    are meeting our retention goals across nearly all military occupational
    specialties. Intangibles--such as the desire to serve the Nation, to
    belong to a cohesive organization, and to experience leadership
    responsibilities through service in the Corps--are a large part of the
    reason we can retain the remarkable men and women who choose to stay on
    active duty. Concrete evidence of this phenomenon is seen in our
    deployed units, which continually record the highest reenlistment rates
    in the Corps. The Selective Reenlistment Bonus Program has been an
    additional, powerful tool to meet our retention goals. Increases for
    the Selective Reenlistment Bonus Program, as well as the targeted pay
    raise initiative, will go a long way toward meeting our retention goals
    and helping take care of our marines and their families.
        While we recruit marines, generally, we retain families. The
    effectiveness of our marines is dependent, in large measure, on the
    support they receive from their loved ones. Our families are therefore
    vital to our readiness. Increased pay, as well as improved housing and
    health care, directly influence our families' quality of life and, in
    turn, enhances the readiness of our units. Your support of our
    families' quality of life has greatly contributed to our retention
    success. We are extremely thankful for the enactment of much-needed
    improvements to the TRICARE system for our active duty personnel and
    for our retired veterans. Thank you, as well, for continuing to support
    increases in the Basic Allowance for Housing that help our marines meet
    the rising costs of rent and utilities within the limits of their
    housing allowances.
        This committee has provided considerable support to our marines and
    their families and the Marine Corps has also improved services to our
    families in hopes of further enhancing their quality of life. We have
    established Marine Corps Community Services aboard our installations to
    better provide for both our marine families as well as our single
    marines, who constitute nearly 60 percent of our total active force. We
    have also sought to recognize and support our marines and families with
    special needs and I am proud to say that both the Marine Corps'
    Exceptional Family Member Program and the Military Committee for
    Persons with Disabilities were the recipients of the 2001 S. Robert
    Cohen Annual Achievement Award for their commitment to facilitating and
    coordinating support and services to families with special needs.
        Similarly, seeking to be more responsive to our marines and to
    enhance their career opportunities, we have undertaken a number of
    manpower reforms to better manage the force. Through the personal
    involvement of commanders, career planners, and leaders throughout the
    chain of command, we have been able to meet our retention goals,
    stabilize our force, and reduce the burden on our recruiters. We are
    investing considerable resources to successfully recruit, develop, and
    retain the civilians who work alongside our marines. Our strategic plan
    in this regard is to develop civilian career programs that integrate
    and advance technical and leadership competencies.
        We are also investing in our marines by improving how we train and
    educate them. We believe the old adage, ``you fight the way you
    train.'' Because of this, our training exercises are becoming
    increasingly joint and combined to provide our marines with the
    experience that they will need when they are called upon to respond to
    crises that require them to work alongside our sister services and
    partners from other nations. Our ability to effectively operate in both
    joint and coalition environments was clearly evident in the experiences
    of the Marines of Task Force 58 in Afghanistan. However, we are
    increasingly finding that the training and mission effectiveness of our
    marines is degraded by the many forms of encroachment on our bases and
    stations. We need your continued support to ensure that the growing
    complexity and expense of encroachment issues do not curtail our
    efforts to conduct meaningful training. Encroachment issues will
    continue to be a 21st century problem.
        Experience, in tandem with education, is the best foundation for
    dealing with both difficulty and fortuity. Accordingly, we are not
    solely focused on training our marines, but on educating them as well.
    We have expanded our non-resident education programs to ensure that
    greater numbers of marines have the opportunity to better themselves.
    We are also adjusting our policies to better accommodate family
    realities--such as spouses with careers or children with exceptional
    needs--when selecting officers to attend various schools that require a
    change in duty station. We have instituted a ``National Fellows
    program'' for competitively selected junior officers and staff non-
    commissioned officers to experience the corporate world, think tanks,
    non-governmental organizations, and the workings of Congress. The
    experiences they receive will broaden perspectives and provide valuable
    insights that will strengthen our capacity to innovate and adapt in the
    years to come.
        The Marine Corps' commitment to training and education, as well as
    our commitment to our ``warrior culture,'' is reinforced in our
    recently instituted martial arts program. We have developed a
    discipline unique to the Corps and we are in the process of training
    every marine in its martial skills. This program promotes both physical
    prowess and mental discipline. Successive levels of achievement are
    rewarded with different colored belts reflecting a combination of
    demonstrated character, judgment, and physical skill. This training
    will benefit marines in the complex missions we face; especially in
    peacekeeping and peacemaking operations where physical stamina and
    mental discipline are vital to success. At its heart, our martial arts
    training is fundamentally focused on mentoring our young men and women
    and helping them to understand that the keys to mission accomplishment
    are often a matter of combining intelligence, strength, and self-
    control to influence circumstances, rather than simply resorting to the
    application of deadly force. The warrior ethos we instill in our
    marines, transforms them into intelligent and disciplined warriors, and
    mirrors the Marine Corps' own transformation in equipment, doctrine,
    and structure.
    IV. Conclusion
        In summary, the Marine Corps' transformation is a synthesis of new
    operational concepts and better business practices, leap-ahead
    technologies, and realigned organizations. This transformation promises
    to exponentially increase the Corps' sea-based capabilities as
    America's medium-weight expeditionary force in the years ahead. Our
    capabilities, combined with those of our sister Services, form an
    integrated array that provides America with the diversity and
    versatility she needs to confront different threats and environments
    and accomplish disparate missions. In close partnership with the Navy,
    we are proud of what our Corps contributes as America's forward
    engagement and expeditionary combined-arms force. We are grateful to
    you for your leadership and for the unwavering support you provide to
    your Corps of Marines.

        Senator Sessions. Well, we think you are, too. The
    recruiting and retention does remain exemplary. I think that
    speaks well for the morale and sense of fulfillment that the
    men and women have who serve in the Marine Corps. You are to be
    congratulated for that. I know you have undertaken a number of
    changes in martial arts and other things that have worked well
    and I hear good things about.
        General Jones. Thank you, sir.
        Senator Sessions. I frequently sit on airplanes with
    marines and I learn a lot that way.
        General Jones. I will have to check the passenger
    manifests.
        Senator Sessions. It is very informative, and morale is
    good.
        General Jones. Thank you, sir.
        Senator Sessions. The quality is good.
        Just for example, I was with a young man who went to a
    superb college, had worked several years in the Atlanta real
    estate market, was a very capable young man, and decided that
    he wanted to go in the service and joined the marines and he
    wanted to be a pilot. It was very impressive.
        Also, I just would note that in the State of Alabama, we
    lost Marine Gunnery Sergeant Steven Bryson in the KC-130 crash,
    one of those crew members. His mother and the family were well-
    supported by the marines with a memorial service in California.
    There was a lot to be done to accommodate the needs of that
    family and you once again demonstrated the kind of tight
    fellowship that you have in taking care of that family. I want
    to say thank you for that.
        General Jones. Thank you, sir.
        Senator Sessions. General Jones, we have received testimony
    that the preponderance of weapons used in Enduring Freedom have
    been precision guided. We have also noticed that the Marine
    Corps has asked for additional Hellfire missiles which now is
    an unfunded requirement. Can you comment on the present
    utilization and utility of precision guided weapons in the war
    on terrorism and particularly where we are with regard to the
    Hellfire missile?
        General Jones. Yes, sir. If you do not mind, I will keep my
    comments in the unclassified realm here. But in general, one of
    the transformational aspects of warfighting between the 20th
    and 21st century, frankly if you really want to be more
    precise, since Operation Desert Shield-Desert Storm, has been
    the enormous progress that the United States has made in being
    able to deliver precision guided munitions. When you think that
    you have B-52s now that are almost in a close air support role,
    you really do have some transformational aspects of warfighting
    that are ongoing. I think that that is to be celebrated. It is
    an asymmetric advantage that U.S. technology has permitted us
    to achieve. It enables us to commit smaller forces on the
    ground, for example, which will have the capability of
    achieving missions that would, in the 20th century, have been
    unthinkable.
        So with that kind of transformation both in the technology
    field and the application of that transformational capability
    in precision guided weapons, you have a capability that will
    save lives, American lives on the field and lives of our
    allies, and bring about a swift resolution to our stated
    objectives on the ground in any future conflict much earlier
    than before and at far less of a human cost. So I think that is
    certainly to be celebrated.
        With regard to the Marine Corps, we have obviously been
    involved in the air campaign and had the marines on the ground
    and we have expended our share of ordnance. In general terms, I
    would say that we have done those things that are required to
    recapitalize those accounts where we have had a serious
    expenditure of munitions. I think that those programs for
    recapitalization are well under way.
        Senator Sessions. But it does appear that the budget that
    has been submitted to us leaves some of your requirements
    unfunded for one of your more valuable precision weapons, like
    the Hellfire. Where are we on that and how significant is this
    unfunded mandate? Frankly, I am concerned because if we are in
    a much more prolonged engagement than we have been in
    Afghanistan and we have these very expensive platforms, very
    expensively trained and skilled pilots and crew, but we do not
    want them not to have the weaponry, the bullets to fire in the
    gun.
        General Jones. Exactly. We were asked to submit a list of
    unfunded priorities. Perhaps ``priorities'' is the wrong term.
    These are programs that had we had the resources available we
    would have submitted, but the line was drawn at a certain
    place. So they are unfunded programs. In the case of the
    Hellfire, it was $105 million and that would buy about 1500
    missiles. That stands as something we would like to have, but
    it did not make the cut in the request, so we will keep working
    on it.
        Senator Sessions. In your preparation of the budget
    request, I suppose you could have made a decision in favor of
    the weaponry. How do you make those decisions? I would just
    express to you my concern that throughout the precision weapons
    area that we may not be maintaining the numbers that we need in
    all branches of service. I know it would require some tough
    decisions but, frankly, maybe having enough rounds to fire is
    more important than how many guns you have.
        General Jones. Absolutely. We are always interested in
    replenishing our accounts, and as a member of the Joint Chiefs,
    we have talked about these expenditure rates across the
    inventory and I believe that we have addressed those with the
    industry and Congress. From a Marine Corps perspective, it has
    to do with how much is in your inventory and what is your
    sense, what is our sense really, of our future expenditure
    rates and do we have enough. So based on that, we submitted at
    the right level and the priority; if it were much more
    critical, my voice would have been much more animated.
        So is it something that we would like to do? Certainly. But
    did it reach the level of critical must-do? Based on our
    inventory and our estimate of our usage rate, we think we are
    probably okay.
        Senator Sessions. I think we got thinner than we should
    have been in the Afghanistan effort and, okay, we are
    restocking rapidly in a lot of our precision weapons. But I
    think it has been a lesson for us. Rather have too many than
    too little.
        General Jones. I think you make a good point. What happened
    I think in Afghanistan was that--for example, in Operation
    Desert Shield-Desert Storm, 10 percent of the weapons that we
    used were precision guided munitions. In Afghanistan, it was 90
    percent. We really crossed over the threshold of seeing what
    precision guided munitions can do.
        But our theology, if I can use that word, was to
    essentially use precision munitions in the first few days and
    use all of the stealthy equipment that we needed and take down
    all the air defenses and then get it into an environment where
    you could use less precision munitions. But because of the
    enormous success that we had, we kept on using the precision
    guided munitions. So as a result, across the board, we saw the
    attrition and we jumped in and we dealt with it as best we
    could.
        But it is an astounding reversal between two conflicts
    spaced by about 11 years.
        Senator Sessions. Well, it is. Would you say just in terms
    of economics, are you getting more impact on the enemy dollar
    per dollar with a precision weapon than with a dumb bomb? Even
    though they cost more each, you can put them----
        General Jones. In the aggregate, you are going to probably
    achieve your stated goals in a shorter period of time and you
    are going to make less mistakes. You are going to have less
    unintended consequences. For example, if you go back to the
    Vietnam conflict, I remember being a second lieutenant and
    watching B-52s deliver Arclights and the rule of thumb for an
    Arclight was that you did not want to be within 5,000 meters of
    wherever the Arclight was going and you could feel the ground
    shake as they delivered the bombs. Now that same B-52 is
    delivering ordnance where you can be within 1,000 meters and
    still think that you will be okay. It is an amazing
    transformation in terms of capability.
        I do think that our delivery systems are getting more and
    more accurate. Just since Kosovo, for example, we have had,
    what I think, one of the things that really dramatically
    highlighted the return of the infantryman, if you will, and the
    value of boots on the ground, apart from showing national
    commitment; but that soldier or sailor or airman or marine on
    the ground can really multiply the force capability because by
    giving strong eyes on target and guiding the precision weapons
    to their intended objective with a degree of clarity that is
    lacking if you are just doing it from the skies. That has
    clearly been a big change as opposed to Kosovo, where we had
    nobody on the ground and you were relying on everything that
    you could get from imagery and intelligence and so on and so
    forth.
        So I think we have celebrated the return, I think, of the
    infantryman and the value of having eyes on target, boots on
    the ground, and getting real human and real-time tactical
    intelligence that translates immediately to being able to
    deliver precise ordnance at the right place and at the right
    time.
        But it is more expensive. I think in the future we will get
    the price down, and I think that is the wave of the future.
        Senator Sessions. I think the price does not necessarily
    have to be too much more than conventional weapons.
        Let me ask you this. I know you have made a lot of changes.
    I know you have adjusted substantially to this change in
    technology that alters the face of the battlefield. But are you
    satisfied that you are at the level you need to be in terms of
    coordinating with Air Force or other services in coordinating
    marines on the ground with air? Is there more yet to be done?
        General Jones. I think one of the great things that I was
    happy to see was how well this idea of close air support has
    permeated throughout the United States military. It was
    developed long before Special Operations Command even became an
    entity, but it is clear that Special Operations Command has
    done some remarkable, remarkable things with being able to
    deliver close air and just basic bombing missions, so to speak.
        One of the things that I alluded to in my opening statement
    was that we should really celebrate how far the idea of joint
    interoperability at the fighting force level has come. This was
    really something that was very impressive and I think is one of
    the clear lessons learned or lessons observed, I should say,
    from how the U.S. forces performed.
        Whether it was a naval platform flying TACAIR missions or
    whether it was the Air Force bombing or whether it was Special
    Operations or marines or the Army on the ground, wherever we
    put troops together they seemed to be able to pick up
    immediately and interoperate and do very, very well.
        Senator Sessions. Well, I thought that, too. I guess I
    would just like to pursue it a little further. My thought is
    the further you get away from your Special Ops, your most
    highly trained units, in all the services--do you think we are
    where we need to be? Do we still need some more commitment to
    reaching the highest possible level of coordination,
    particularly using precision weapons?
        General Jones. The best way to fight and win on the
    battlefield is to practice the way you fight. In that regard, I
    am a supporter of the efforts that Joint Forces Command is
    doing towards bringing the forces together and achieving true
    interoperability.
        But Senator, I would say that one of the most valuable
    things that the services bring to the joint war-fight is our
    service cultures. We have to be careful that we do not try to
    make everybody become too much the same. In peacetime, we bring
    different things to the table, different viewpoints, and it is
    the melding of all those capabilities that transforms the force
    and makes it even more exponentially viable on the battlefield.
        So I think we should be very pleased with the progress of
    how the services get each of their forces to the joint, what I
    call the joint line of departure, because once they cross that
    line of departure and are actually into a real world situation;
    this is not time for practice, this is time for putting into
    practice what you have been doing in peacetime. I think we have
    done extraordinarily well.
        Now, there is certainly more improvement we can make. For
    example, how we do logistics has got to be transformed in a
    way. We can do things better than stockpiling big ammunition
    dumps and supply dumps like we used to do in the 20th century.
    All the services are working, but not in isolation. We are
    sharing good ideas. What works in one service is being shared
    with another.
        That is why we are seeing a situation where you can put
    small amounts of people on the ground and have them survive,
    because of that tremendous reach-back capability, whether it is
    to reach up to an overhead platform, reach back for
    intelligence, reach back for logistics. The command element of
    the brigade headquarters that led two marine expeditionary
    units into Afghanistan was 56 people. That would have been 356
    people 15 years ago, but because of the reach-back capability
    and the technology and the changes that we have made to how you
    command and control forces on the ground, we are now putting
    fewer people at risk with greater protection and able to do it
    over tremendously long distances. I think that is to be
    celebrated.
        Senator Sessions. I think it is, too. We should celebrate
    the transforming commitment of our military. Militaries have
    been considered to be very conservative and slow to change in
    the history of the world and that is pretty much true. But I am
    not sure any military in peacetime or quasi-peacetime has been
    as rigorous in change and innovation as ours. I am sure there
    has been none. Certainly it appears that no other military in
    the world is modernizing itself, taking advantage of new
    capabilities as rapidly as we are. That is why we were able to
    wreak a lot of damage on our enemies with a relatively small
    amount of loss to ourselves. So I salute you for that.
        I am delighted that Senator Collins has joined us. She has
    shown great interest and fidelity to this subcommittee, has
    mastered the intricacies of it, and we would be glad to have
    you ask any questions or have any opening statement that you
    might have. Senator Kennedy will join us as soon as he is free.

                   STATEMENT OF SENATOR SUSAN COLLINS

        Senator Collins. Thank you very much, Senator Sessions. I
    very much appreciate your being here today and carrying the
    burden for all of us who are committed to this subcommittee.
    There are a lot of different hearings going on today that we
    are trying to cover and I have just come from one that Senator
    Kennedy is chairing.
        General Jones, your testimony highlights the acute
    shortfall of fire support and the need to continue to invest in
    naval surface fire support. I believe that the Advanced Gun
    System and the Extended Range Guided Munition technologies
    which are scheduled to be incorporated into the DDX will make
    significant advancements toward addressing this shortfall.
    Would you please comment on these two specific technologies and
    the capabilities that they will provide to the Marine Corps?
        General Jones. Senator, thank you very much for raising
    what has been a consistent worry of mine since I have taken
    office. Both on land and at sea, we have a shortfall in terms
    of fire support capability. The Marine Corps, in partnership
    with the Navy, has long depended upon naval fire support for
    successful amphibious operations of the 20th century. In fact,
    our history is scattered with loads of battles that have been
    won with the combination of the Navy and Marine Corps team,
    with strong fires coming from the sea and marines projecting
    ashore to secure an objective.
        What has happened since World War II is essentially a
    capabilities transformation. I talk about the Marine Corps now
    not in terms of necessarily an amphibious force, but as a sea-
    based force that is expeditionary in nature. That expeditionary
    quality and the ensuring technologies that have developed have
    allowed us now to project that force over much longer
    distances.
        It is important that the fire support systems, both on land
    and at sea, accompany that capability. We currently have a
    shortfall in both sea-based and land-based capability. So in
    partnership with the CNO, who also recognizes this shortfall,
    we are anxious to be proceeding with the development of
    precision weaponry over extremely long distances that can, in
    fact, correct that shortfall.
        I might add parenthetically that, on land, the Lightweight
    155 is at a pivotal moment in its program life. This year, we
    should, in my opinion, commit to fully supporting the
    acquisition of that particular program.
        The naval programs are a little bit more complex and a
    little bit more transformational, because of the precision that
    goes into it. But we fully support the program. We fully
    support the advanced systems that we hope will be resident in
    our future surface platforms. We are working assiduously with
    the Navy to bring this about.
        Senator Collins. Would you please comment on the challenges
    that the Navy and the Marine Corps face in operating in the
    challenging littoral environment and how the DDX and its family
    of ships would help you better address those challenges?
        General Jones. Yes, ma'am. The value of the naval
    expeditionary force is that you are not as encumbered with
    access as you are if you are moving the landward piece of our
    national capability. In fact, in an operation like Enduring
    Freedom, the overwhelming majority of the TACAIR was delivered
    from naval platforms. Two marine expeditionary units were
    delivered over 400 miles in a landlocked country and
    maintained. Not only were they maintained, but when they
    arrived, they operated, ready to fight.
        In the future, the CNO and I are very, very interested in
    developing advanced sea-basing concepts with the DDG, with the
    future family of amphibious ships, and with our experiments
    with high-speed vessels. We believe that, particularly in the
    global war on terrorism, most of the potential areas that we
    would operate in are in and around the littorals. That
    capability of that naval expeditionary force, which will look
    differently in the future, will be accompanied by DDGs, and
    will have amphibious ships and a carrier that is committed to
    the support of the operation, which will result in greater
    integration of Naval and Marine Corps aviation. This is a
    capability that is a national treasure and should be carefully
    invested in over the years to come.
        Senator Collins. I was surprised that your written
    statement did not address the DDX and its family of ships. So
    just for the record, are the Marine Corps and are you still in
    strong support of proceeding with the DDX shipbuilding program?
        General Jones. I am in complete support with the CNO's
    program. The Marine Corps and the Navy budgets are combined to
    form the Department of Defense's budget. Generally in my
    statement, you would not necessarily see a shipbuilding
    characterization because that is usually done elsewhere. But I
    can assure you that I am a vocal supporter of the Navy
    programs. I believe that I am on record as saying that we need
    to recapitalize our shipbuilding accounts to start turning our
    Navy around so that we can build more ships in the future.
        The Secretary of Defense has said publicly that he regrets
    that we were not able to do as much as we wanted to this year,
    but it is certainly something that is on his calendar. He is
    very aware of it and within the limitations of our budgetary
    process we did what we could to invest what we needed to this
    year. But it is not a subject that is lost on us in terms of
    its importance.
        Senator Collins. General, section 211 of the Fiscal Year
    2002 National Defense Authorization Act conference report
    requires the Secretary of Defense to carry out an assessment of
    the requirements for naval surface fire support of ground
    troops operating in the littoral environment. That report is
    due at the end of this month. Could you tell us what the status
    of the report is and could you provide us with any insights on
    its conclusions?
        General Jones. If I could provide that for the record, I
    would appreciate that. I am not exactly sure as to what the
    exact status is at this point. I will be happy to do that.
        [The information referred to follows:]

        The report is being reviewed within Plans, Policies, and Operations
    (PP&O) of Headquarters, U.S. Marine Corps and will be returned to my
    office around the beginning of June. The report concludes that the
    combination of near- and far-term programs described therein will
    collectively provide the required range, lethality, accuracy and
    responsiveness to meet Marine Corps requirements for Naval Surface
    Fires.
        I concur with the report's conclusion that these programs can meet
    the requirements of the Marine Corps, but only if procured in
    sufficient quantities to provide sustained fire support to forces
    operating in the littorals. Obviously, fielding a capability (achieving
    an Initial Operational Capability) does not mean that a requirement has
    been met; that capability must be sufficiently proliferated to meet the
    needs of the supported force. The report does not address the
    quantities of munitions or weapon systems that will be procured through
    this plan, and I am concerned that these quantities will fall short of
    meeting the requirement to provide sustained, all-weather fire support
    from the sea.

        Senator Collins. Thank you, Senator Sessions. Thank you,
    Mr. Chairman.

                 STATEMENT OF SENATOR EDWARD M. KENNEDY

        Senator Kennedy [presiding]. Thank you very much, Senator
    Collins. I just turned around and I saw you at the same hearing
    we were at, and here you got ahead of me once again.
        I want to thank my friend Senator Sessions for opening this
    hearing. Senator Collins and I were both at a very important
    hearing with a witness, Christopher Reeve, who is challenged
    physically from being paralyzed from the neck down. So that
    hearing, although it was supposed to be in the morning,
    necessitated a change to the afternoon. He has a particularly
    pressing schedule. So I apologize to Senator Sessions. I thank
    him very much for opening the hearing.
        I want to thank you, General Jones, for being here. I think
    anyone that is meeting with the leaders, let alone the members,
    of the armed services today, in any day in recent times, has to
    extend their extraordinary condolence through you to the
    others, not just in the Marine Corps, but in the Special Ops.
    Certainly the marines have been out there at the cutting edge
    in Afghanistan, and all of us are very mindful of the loss of
    those lives, particularly in the last 36 hours. So I am sure
    you have a keen appreciation for the very strong admiration and
    respect that all of us have for the marines and for others who
    are facing a very challenging and difficult task and performing
    extraordinarily well and suffering the casualties. Since you
    are the representative here today, we hope that you will
    understand that that is the way that we feel and that we are
    grateful, obviously, to you for all of your service.
        General Jones. Thank you, Mr. Chairman.
        Senator Kennedy. In the hearing today, the subcommittee has
    worked diligently with the Marine Corps and the Department of
    the Navy to address some important problems involving: the fire
    support capability, including the organic Marine Corps fire
    support and Navy shore support; enhancing the tactical mobility
    of the Marine Corps; and augmenting the mine countermeasures. I
    will note for the record that this subcommittee has taken the
    lead in Congress in ensuring the Navy and Marines improve the
    existing capability in these areas, in many cases over the
    objections of senior Defense and Navy Department officials.
        Unfortunately, we have seen early signs that the Navy
    Department may be lapsing into previous unacceptable behavior.
    Some of the instances that may be forming a pattern are the
    cancelling of the Land Attack Destroyer, the DD 21, program
    that was intended to be a multi-mission ship, but was primarily
    aimed at meeting the Navy surface fire support requirements of
    the Marine Corps. DD 21 was to have been the first ship in a
    class of 32 ships with delivery starting 2010. Marine Corps
    officials have previously testified that nothing short of the
    capability of the planned DD 21 with two 155-millimeter guns
    would meet their fire support requirements.
        With the new DDX program, there is no firm commitment in
    near the Future Years Defense Program (FYDP) to build anything
    other than a demonstration ship using R&D funding. It is not
    clear when, if ever, the FYDP would lead to meeting Marine
    Corps fire support needs. That is number one.
        Second, the terminating of the fire support missile
    program, Land Attack Standard Missile (LASM). The LASM was a
    program designed to use old surface-to-air missiles to provide
    some fire support capability, particularly at longer ranges. It
    was intended to be an interim system that would have been
    replaced by the new system, the ALAM.
        Last year, it appeared the Navy was canceling the ALAM.
    However, we could not tell for sure since the budget request
    did not give any information about fiscal years after 2002.
    This year, it is clear that the Navy is canceling both
    programs.
        Third, cancellation of the shallow water minefield
    breaching system. The Navy decided last year to terminate the
    Shallow Water Assault Breaching System (SABRE) and Distributed
    Explosive Technology (DET) shallow water mine clearance
    systems. In part, they based their decision on the fact that
    the systems are too bulky to be carried continuously aboard
    ship, and that the lanes cleared through the minefields would
    not be wide enough.
        The Navy made this cancellation decision in spite of the
    fact the Navy has no near-term alternative to provide the
    capability. It is hard to understand why having no capability
    in this area would be better than at least having some
    capability, whatever the shortcomings.
        Then they have the retiring of the U.S.S. Inchon mine
    command and control ship. Several years ago, with significant
    pressure from this subcommittee, the Navy decided they needed
    to have a large aviation-capable ship that would be dedicated
    to mine countermeasures support. They converted an older
    amphibious ship, the U.S.S. Inchon, to the duty. While the ship
    served the purpose for which it was intended, the fact it was
    an older ship and was probably not the highest on the Navy's
    maintenance priority list caused an erosion in material
    condition.
        Within the last year, the crew experienced a fire in the
    ship with one person killed. Because the Navy has decided that
    fixing the ship would be too expensive, they are retiring the
    ship with no immediate replacement. Navy officials have said
    that, in the interim, they would use one of the amphibious
    ships in the regular fleet in case they need to conduct
    dedicated minesweeping operations. This was the position we
    were in before this subcommittee began pressing the Navy to
    make significant mine warfare improvements in the early 1990s.
        Unfortunately, there are other examples that I can cite,
    but in the interest of time, I will not. Each of these actions
    taken individually may have an explanation. However, taken as a
    whole, I fear they are part of a pattern of the Navy
    Department's walking away from their funding of the very
    capabilities that make the Navy and Marine Corps team so
    relevant to today's world.
        If there is a new military strategy that is charting a new
    course for the Navy-Marine team, we need to hear about and
    understand it. If there is not, then we need to ensure that the
    Department of the Navy does not march down a path of
    incrementally divesting its capability without a thorough
    understanding of where these actions will take us.
        So I would hope that perhaps, General Jones, you would give
    us your reaction to this set of circumstances.
        General Jones. Thank you, Mr. Chairman. In 1995 I was
    privileged to serve for a year as the director of expeditionary
    naval warfare on the staff of the CNO and one of my
    responsibilities during that time was appearing before this
    subcommittee to testify on mine countermeasures and the
    direction of the mine warfare program.
        The commitment that was made at that time was to try to
    leave our legacy systems, which were developed, in theory,
    many, many years ago during the Cold War, when the United
    States structured itself to have a home port breakout
    capability. The fear was that enemy mines could be placed
    around our ports so that we could not actually put our ships at
    sea. We had structured ourselves to do that.
        While I was the director of expeditionary warfare, we, I
    think, made some progress towards transitioning from this
    legacy system to an organic capability. The thinking started to
    emerge that the naval expeditionary force of the future must
    have an embarked organic capability in order to deal with the
    mine threat, not at our home ports, but in the littorals or in
    the areas of operation that we were interested in around the
    world.
        We have invested a significant amount of money in bringing
    some capabilities to the fleet, albeit not completely done. But
    the idea was to try to get away from the fleet being dependent
    on the arrival of the Inchon, which would be home ported back
    in the continental United States, and, without knowing exactly
    where the problem would be they have to, basically, go to full
    stop waiting for the mine warfare community to arrive on-
    station because there was no organic capability.
        So we have taken the leadership of this subcommittee
    seriously, because I remember how serious it was during that
    period. We recognize that during that time we had not
    sufficiently paid attention to the intent of Congress in this
    matter, and we fashioned some budget requests that were
    inviolate for the following 3 or 4 years in terms of mine
    warfare. In other words, mine warfare was fenced in the United
    States Navy for several years.
        As a result, they were able to make some exciting changes
    in trying to get to that organic capability. The shallow water
    mine countermeasures program, affectionately known as SABRE and
    DET, was not something that we walked away from without
    considerable experimentation and observation. It is a
    capability that gives you some utility, but it is very slow, it
    is extremely heavy, and it is not what I would consider an
    expeditionary program that we want to peg our future on.
        We have a target date, an IOC of 2005, to arrive at organic
    mine countermeasure capability within the carrier battle
    groups, and I believe that it is going to be exciting to get
    there. Now, in the mean time, are we going to have to accept
    some risk? Yes. But are we going to save some money by rolling
    up some legacy programs in order to get to where we want to go?
    Clearly.
        I would also say that one of the things that we should
    remember about mine warfare, particularly with the amazing
    technologies we have this year, is that, by virtue of our air
    cushion landing craft, some of our high-speed landing craft,
    and the range that technologies such as tilt rotor technology
    will bring to the expeditionary forces, we are not channelized
    nearly as much as we were in the 20th century to coming across
    a certain beach at a certain time simply because that is the
    only place we can land.
        We have access now to 85 percent of the world's landing
    beaches. We do not go up in the face of the enemy.
    Expeditionary maneuver warfare takes us to do just the
    opposite. So in many cases, finding out where the mines are is
    the first half of the puzzle, because we can go so many places
    where the mines are not.
        Now, clearly in-stride breaching is something that we want
    to bring into the United States Navy. No battle group should be
    held up because there is a floating mine that is detected in
    the water. We should be able to neutralize that mine.
        In that context, I would also offer that the progress in
    naval mine warfare outstrips the progress that we have made in
    land mine warfare considerably at this point. So not perfect,
    but certainly getting there.
        Senator Kennedy. Well, let me just remind--you do not need
    any reminder. I remember during the Iraq War being over in the
    Gulf and seeing those helicopters dragging the big chains in
    front of American resupply ships that were going three knots.
    We had American ships that were hitting those mines. Some of
    those mines were World War I mines. World War I mines! Now, we
    have been after this subcommittee, Senator Cohen and I, to talk
    about how we were going to get some help.
        Last year, I asked Admiral Fallon, what we were doing about
    it. Remember the difficulties. I mentioned the problems of mine
    warfare. We apparently believe that mines continue to present a
    threat to the Navy and the Marine force. So Admiral Fallon went
    on to say, ``We have a program in place that we are working in
    the area of new technology and, frankly, we are waiting to see
    how these things deliver.''
        I went on: ``I was interested in why the Navy was altering
    or redirecting funding on the SABRE shallow mine breaching
    system when it has no near-term alternative to field. I
    understand that it was done because they have testing problems.
    Do you want to explain?''
        He gave a long explanation: ``The recommendation is to
    pursue other technologies to try and do the job.''
        I want to know the assessment when he said we have new
    technology and we are waiting to see how things deliver. Well,
    we are a year later. I want to know how they are delivering. We
    are a continuing body and I am not satisfied with answers that
    come up every year: ``well, we are looking at this and we are
    looking at new technologies.'' Here we have the Admiral saying
    we have new technologies and we are going to assess them. Now,
    I guess we will ask the Admiral when he comes in here
    specifically. This is what they said a year ago and we want to
    know what they have been doing on it.
        I mean, that is the only way we are going to get any
    accountability. It is not as though we are all starting over
    every single year. That is what it always seems to be every
    single year. We are starting over and that is not acceptable. I
    would think you are the ones that would be the people that
    would be the most concerned about this priority in terms of
    what it is going to mean for your people. It was a matter of
    enormous concern to marines when I was out there. LaBootie, who
    you know well, has talked about this, about the limitations in
    terms of how the Americans were going to be able to deal with
    the limitations and how the marines were going to be able to
    land and perform in shallow waters on this.
        This is something that goes on every single year. I think
    that this is something that we have got to try and find out.
    Maybe we will go talk to the Navy about it, but it is something
    that is a matter of concern.
        Let me just go back to what I was talking about in terms of
    the firepower. We had heard testimony over the past the only
    solution to meeting the Marine Corps' surface fire would be the
    introduction of the capability that was going to be available
    in the DD 21, the two, as I mentioned, gun batteries. Now, Navy
    has outlined the DDX program and that will be 2005.
        So, has the Marine Corps changed its longstanding
    requirement for naval surface fire support?
        General Jones. Sir, we have not, and that is an
    identifiable shortfall that I identified in 1999 in my
    confirmation hearing. Not only is there a shortfall at sea,
    there is a shortfall on land. On land, which are the programs
    that I have the most facility to affect, we will bring,
    hopefully, on line within a very short period of time the
    Lightweight 155 and, finally, a replacement mortar, the 120-
    millimeter mortar, that will significantly help remedy the
    paucity of fire support that is critical to the operation of
    our land forces.
        At sea, we are further away from a capability that will
    reach out over the distances that we can now project forces.
    But nonetheless, it is a commitment that we must bring to bear
    and bring into the inventory as quickly as possible.
        Senator Kennedy. Well, this is an important issue and you
    have been eloquent on it. You wonder whether there is any
    prospect the Navy will be able to meet your fire support
    requirements during the current and future years in the defense
    program. I mean, that is a serious question. Given the actions
    that the Navy has taken, it is still very much up in the air.
        Now, let me indicate where this leads. If we are not really
    serious about the creditable forcible entry capability, we have
    a limited ability in fire support now, and the actions taken in
    the last year give little hope the Navy will be able to meet
    the Marine Corps fire support requirements in the foreseeable
    future. So, if we are not really serious about maintaining or
    improving the capability, it raises more questions about
    whether we need the traditional amphibious shipping or other
    Marine Corps systems.
        I mean, why should the subcommittee conclude the Department
    is really serious about maintaining and improving the forcible
    entry capability in view of the various programmatic decisions
    that appear to be eroding that capability over time?
        General Jones. Mr. Chairman, I want to emphasize that the
    naval gunfire support has been historically important to us and
    it will be important to us in the future. But I would be remiss
    if I left the subcommittee with the impression that that is the
    only thing that gives us a forcible entry capability. The
    current range of the 5-inch 54 is about 14 nautical miles. The
    Advanced Gun System has a threshold of 60-plus nautical miles
    and the Objective Gun is over 100 nautical miles, and that is
    transformational capability.
        Some years ago, the Marine Corps, recognizing that
    battleships were disappearing and naval gunfire systems were
    attriting and not being replaced, committed to remedying that
    shortfall through heavy investment in its air-delivered
    ordnance systems. We have invested heavily in close air support
    and the Marine Corps has pioneered it as far as I am concerned.
        So the utility of forcible entry with the combined arms
    force of the Marine Corps, I maintain, still is very important
    to the operational flexibility of the national command
    authority. Naval platforms give you an access capability that,
    as we saw in Operation Enduring Freedom, countries that do not
    wish for you to use their bases or put a price tag that is so
    high that you cannot ever operate from there because you do not
    want to invent a Marshall Plan all over the world. It gives you
    the access capability and the forcible entry capability that we
    need.
        Clearly, naval surface fires need to be addressed. I
    believe that is recognized. Is it going fast enough? Probably
    not as fast as we would have liked, but it is a recognized
    requirement and shortfall. The good news is on the ground side;
    we are remedying it. We need to do more on naval guns and we
    will work with the Navy to do that. I think it is recognized.
        Senator Kennedy. Let me move along. We want to give focus
    in both of these areas and follow closely and we will continue
    to do so. We want to work with you on this in terms of the
    priorities of the committee because of the reasons you have
    expressed very eloquently.
        Let me go to the V-22 program. The subcommittee was
    notified recently that the Navy is paying the contract team to
    store 19 of the V-22 aircraft already built while the fixes are
    identified and tested. So, as I understand it, we have, I
    guess, it will be 30. Is that right, 30?
        General Jones. Yes, sir, about 30, 32.
        Senator Kennedy. I think at the outset, we want to get it
    right. Here is someone who wants to get it right. We do not
    want the marines, not that you would, cutting corners to try
    and--I recognize you have the backlog and the pressures on
    this. I think we want you and the marines and the Defense
    Department to get this thing right and take the time to get it
    right. That is the basic point that I want to make.
        Now, having said that, what can you tell us about this
    fact? We are getting all of these now--we have 30. All are
    going to have to be adjusted and changed now to deal with
    whatever kinds of changes that are going to be necessary. We
    want to try and keep the line on track, obviously, in terms of
    production. We have these realities that are coming up and we
    want to hear from you about how you see this current situation
    and what you can tell the committee.
        General Jones. Thank you, Mr. Chairman. The V-22 has
    survived because of the support of this Congress over the
    years. It has been--I believe, I continue to believe it to be
    truly a transformational capability. It was thoroughly looked
    at by the defense panel and NASA, two independent bodies that
    rendered the judgment that the problems with the program were
    not due to technology being immature, but due to engineering
    changes that had to be effected in the aircraft.
        For most of the past year, we have been working on making
    those corrections, the engineering corrections. We have been
    consulting on a daily basis with the experts in industry, with
    the best minds that we can put against this problem. We have
    essentially done a major rework of the hydraulic system to
    eliminate the chafing problems that have been discovered in the
    previous V-22's that were built, and we have rectified the
    software problems that caused the flight control anomalies in
    the last crash.
        We are now to the point where probably some time in April
    we can resume testing. This is an event-driven scenario, not
    time line-driven. I have stated for the record, along with the
    Commander-in-Chief of Special Operations Command, that had we
    been able to use this technology in Afghanistan, we probably
    would have not had a considerable number of helicopter
    accidents that we have had, simply because of the range, the
    capability, the altitudes, the speed that this technology
    offers.
        Let me be very clear that I think that this is so
    transformational in terms of military capabilities that it is
    really the departure point for helicopters, who are struggling
    in Afghanistan at the heights that we are asking them to
    perform and causing us to be very creative in how we get our
    helicopters to the area of operations from the standpoint of
    fuel, maintenance, etcetera.
        So where we are is we are about to return to a testing
    mode. We will do that carefully. I would like--with your
    permission, I have just two charts that I would just like to
    show you.
        Senator Kennedy. Sure.
        General Jones. If I could have the first one, please.

        Just from a sense of perspective--and this is only for
    naval aviation--this chart shows is naval aviation mishap
    rates, which is calculated based on 100,000 flying hours. You
    can see--and hopefully you have a copy before you--that in
    1954, as a result of a very high mishap rate, in naval aviation
    776 aircraft were destroyed as a result of mishaps in 1954. In
    2001 the number was 15.
        So, this basically shows what tremendous progress we have
    made over the years in terms of flying more safely, recognizing
    that, sadly, it is never zero, but it certainly has gotten
    better.

        The second chart, though, shows you by type the accident
    rates for production aircraft within the first 5 years non-
    combat-related, starting with the F-8 on the left and all the
    way over to the V-22. I want to say these are production
    aircraft class A mishaps, not testing and evaluation. You see
    that historically speaking the V-22 is generally in the same
    envelope of performance, if not slightly better than, most of
    the other aircraft.
        This is just to simply say that aviation is still dangerous
    and, despite the progress of science, we still will make
    mistakes. But I think that we are going to be within a very
    acceptable envelope, recognizing that zero is our target.
        So we are anxious to try to bring this capability aboard.
    We have a plan with industry to retrofit the production
    aircraft that have already come off the line with the changes.
    I have personally visited Amarillo. Just recently, I have
    talked to the leaders of Bell and Boeing. I have talked to the
    program manager. The Secretary of the Navy is very involved.
    Mr. Aldridge, the Under Secretary of Defense for Acquisition,
    Technology, and Logistics, has given us his support to resume
    test flights and we are excited about the prospect of bringing
    this capability into our National inventory.
        Senator Kennedy. So, obviously, it is going to have to be
    tested and then, if it sort of works, they make the assessment
    about how the changes will be made in terms of the current
    production lines and how you retrofit the past.
        General Jones. The test aircraft will have all the changes
    in it.
        Senator Kennedy. We hope that you have a continuing
    invitation to keep our subcommittee advised as to where it is
    moving.
        General Jones. Thank you, sir. I will do so.
        Senator Kennedy. On the LHD stability issue that you are
    familiar with, the subcommittee has been informed there will be
    a ship stability issue on the LHD-1-class ships if the marines
    choose to replace the current air group with one-for-one
    replacements, the MV-22s, and Joint Strike Fighters, replacing
    the helicopters and AV-8B. Is this one of the reasons for the
    continuing discussion about the details for the LHA
    replacement?
        General Jones. Yes, sir. The LHAs are reaching the end of
    their service life and need to be replaced. So, as we do, that
    problem will certainly take care of itself over time.
        Senator Kennedy. Well, as I understand, it they will be
    replaced over the next decade or two.
        General Jones. Yes, sir.
        Senator Kennedy. The LHD-8 would presumably replace one of
    them. I understand the Department of the Navy has not come to a
    decision on the requirements for the rest of the replacement
    programs. The reports indicate that the size of the replacement
    ships range from 40,000 tons to as large as 75,000 tons. Why is
    there such a difference in the displacement among the options?
        General Jones. Well, the LHD is a significantly more
    capable ship from the standpoint of being able to accept new
    aircraft. Of course, the Joint Strike Fighter STOVL version and
    the V-22 figure in our transformational objectives. The
    Department remains committed to a 12 amphibious ready group
    capability as a floor and we, the Secretary, the CNO, and I,
    are very supportive of the follow-on programs to replace the
    LHD.
        Now, there is some discussion currently ongoing about the
    right size for the LHD of the future in order to make sure that
    we can accommodate all of the things that we want that ship to
    do. But fundamentally, it will still be an LHD.
        Senator Kennedy. Well, given the uncertainty, does it make
    a lot of sense to have advance procurement funding for the LHD-
    9 when we have not decided that configuration?
        General Jones. I think I should defer to the shipbuilding
    community with regard to whether that is a wise course of
    action. I think that the fundamental design of the ship will
    not change. What is at issue here is whether there will be a
    plug in it to make it a little longer or a little bit wider.
        Senator Kennedy. You mean the difference between 40,000 and
    75,000 tons----
        General Jones. I am not sure what the spectrum of
    difference is, but I would be surprised----
        Senator Kennedy. Well, the only point is if we are going
    for--I would think we would want to get the final decision on
    the size of it before we do much advanced procurement funding.
        General Jones. I have General Magnus here, sir, who is more
    deeply involved in the specifics.
        General Magnus. Mr. Chairman, it is a pleasure to answer
    the question for you. First off, the amount of money that you
    were referring to, Senator, was a small amount of RDT&E
    funding. This summer, approximately the June-July time frame,
    we are going to report out on the analysis of alternatives
    which covers the range of ship hull forms that you talked
    about, ranging from about a 45,000 ton ship to about a 73,000
    ton ships.
        Clearly, we have to do the cost effectiveness trades to
    determine at that range of effectiveness and wide range of
    capabilities. Until the analysis of alternatives report is out,
    we believe that, basically, we have a place-holder with a small
    amount of RDT&E. If, in fact, it is simply an LHD-8 type hull
    with a 100-odd foot plug in it, there would be less amount of
    development required. If it is a new hull form, such as a twin
    hull 70,000 ton displacement ship, a significant amount more
    development would take place.
        These ships are not only required to replace the LHA-1
    class, which the first ship would normally retire about 2011,
    but, in fact, the CNO was on board Bella Wood just a few weeks
    ago, a 24-year-old ship, and he was quite surprised in a
    negative sense about the material condition of the ship. So, we
    would prefer not to have to wait until these ships have to be
    retired. We want to get under way with a decision on the
    development, sir.
        Senator Kennedy. That is good. I think you have it about
    getting the decision on the development so that it will move
    along. I just have some concerns about putting out a good deal
    of additional funds now without the final judgment and
    decision.
        I just had a couple. My colleague has been extremely kind
    and patient here. I have just really two more areas that I
    would like to mention. One is the new prepositioning ship
    program and the modernization of the prepositioning force
    ships. We all know about the importance of those prepositioned
    ships. I understand there has been continuing discussions in
    the Navy and DOD about the set of requirements on that. If
    there is anything that you want to----
        General Jones. Sir, thank you very much.
        Senator Kennedy. I just heard the concept is something
    else. About how long is that ship going to be anchored? It is
    unbelievable. I will not take a lot of time here, but it is
    something else; what you are planning?
        General Jones. Yes, sir. The MPS program, which was funded
    some years ago as a concept, has turned out to be
    extraordinarily useful to the marines and to the joint force in
    terms of not only projecting but maintaining the combat power.
    Just to give you a perspective, it would take 2,000 C-17
    equivalent lifts to bring to bear the same amount of equipment
    that the ships of amphibious squadron, MPS squadron, bring to
    the fight.
        It is a tremendous capability. The three squadrons are
    located strategically around the globe. They are bought and
    paid for. It is a leasing program actually, and the leases run
    out as I recall, between 2009 and 2011. So the reason we are
    discussing the follow-on family of ships is that around that
    time we will have to have come up with the solution for how to
    do the MPS of the future.
        One of the fundamental requirements of the program is a
    basing function or a basing capability. We have such a
    capability in a place called Blount Island in Florida right
    now. Blount Island has been the home port for all of our
    amphibious squadrons, our prepositioned squadrons.
        The thing I want to stress about this capability is that it
    is available to the warfighter immediately on arrival. Not only
    is it available on arrival, it is loaded in such a way that the
    warfighter can say, I need a certain capability, let us say 200
    light armed vehicles. Those ships are so well-constructed that
    inside it we can roll off 200 light armored vehicles fully
    manned, operational, ready, gassed up, ready to go and without
    having to offload the entire ship.
        We also have an in-stream offloading capability. We have
    added a hospital capability. We also have a capability of
    building expeditionary airfields--all contained, all paid for.
    There is not any warfighting commander in chief who is
    contemplating using marines that does not want to bring the
    maritime prepositioned ships into the fight.
        So this is a very important program for us. It will need to
    be addressed in the years ahead. As I said, the leases run out
    on these ships starting in 2009.
        Senator Kennedy. Do they still use that cosmolene? Do they
    still wrap those old weapons in cosmolene that takes hours to
    try and get off?
        General Jones. I do not think, not on our ships. Whatever
    is on those ships is ready to go.
        Senator Kennedy. Just finally, General. This is on the LST
    retirement: this committee intervened in 1994 to keep the Navy
    Department from selling or leasing all of the tank landing
    ships, the LSTs. Otherwise the Navy's overall amphibious lift
    capability would drop below the ability to carry the 2.5 MEBs.
    Although we have been technically maintaining 2.5 MEB lift, not
    all of the ships will be immediately available.
        The LPD-17 class of ships is intended to eliminate the
    problem. This year the Navy plans to get rid of one or more of
    the Navy's LSTs, which would mean losing the vehicle-carrying
    capability an LST represents. I remember Admiral Boorda felt
    strongly about this.
        Was the Marine Corps consulted in this decision?
        General Jones. Yes, sir. We have one LST left and it is
    scheduled to be retired this year. We have, with some concern
    in the aggregate, a stated requirement of being able to lift
    the amphibious echelon of three marine expeditionary brigades.
    The fiscally constrained reality is that we have been for the
    last 8 to 10 years, I would imagine, at about 2.5 marine
    expeditionary brigades assault echelon lift capability and
    sliding a little bit below that.
        So in the aggregate, that is a concern. But the CNO and the
    Secretary are faced with the serious situation that shows that
    the ships and the airplanes of the Navy, of the Navy
    Department, are aging at the same time, but aging in an
    accelerated way. Of the two, the aircraft in the Navy are
    significantly older than the ships are. So because we neglected
    to recapitalize and modernize for so long, all of the principal
    end items are becoming obsolete at the same time or aging at
    the same time.
        So what we have tried to do is stop the bleeding, to use a
    medical term. By that is to rid our inventories of legacy
    systems. There are some LPD-4 class ships, for example. I have
    a son who is a second lieutenant in the Marine Corps and he
    will sail on the U.S.S. Denver. I sailed on the U.S.S. Denver
    when I was a captain in 1975. So we still have some legacy
    amphibious ships that simply have to be let go before we can
    recapitalize.
        The cost of maintenance on old airplanes and old equipment
    is going through the roof and we simply cannot afford it. The
    longer we hang onto them, the longer we delay being able to
    turn around and do something.
        Senator Kennedy. But we want to work with you on that
    issue. We will be in touch with you.
        General Jones. Thank you, sir.
        Senator Kennedy. I want to thank again my friend and my
    colleague, Senator Sessions. I am very grateful to him for
    chairing the hearing.
        General Jones. Thank you, sir.
        Senator Sessions. We have a $48 billion increase in defense
    spending this year, which is the largest we have had in 15, 20
    years, I suppose. But we committed a lot of that for salary and
    health and other things. Do you know what that leaves us
    fundamentally for procurement and new systems after Congress
    has mandated the pay raises and the other things that we felt
    we needed to do? How much actual new money you got to spend for
    procurement?
        General Jones. In procurement for the Marine Corps, it is
    about $465 million.
        Senator Sessions. You did better than your fellow services
    in terms of procurement budget, I believe; did you not?
        General Jones. I do not have the comparison in front of me,
    but this from fiscal year 2002 to 2003 it is a significant
    increase for us.
        Senator Sessions. Well, I do not think we got an overall
    net increase in procurement. If it did, it was not much. It was
    just because we made a lot of other commitments and we have
    some increase in research and development, but, overall, we are
    not where we need to be. The marines have done I think the best
    in those categories, but you are small compared to the other
    services also, much smaller. You are beginning at a point much
    below the others.
        General Jones. Yes, sir.
        Senator Sessions. Let me ask briefly before I close up. The
    Quadrennial Defense Review directed the Secretary of the Navy
    to develop new concepts of maritime prepositioning and high
    speed sealift and amphibious capabilities for the Marine Corps.
    What are you taking with these new concepts? Are you satisfied
    where we are going, and what are your hopes for the future?
        General Jones. Senator, I am very excited about this
    concept. I think it is wrapped up in some discussions that I am
    looking forward to having with members of the committee and the
    staff and also in partnership with the Navy. It is wrapped
    around what I think is going to be a 21st century issue around
    sea-basing and how the United States is going to have to come
    to grips with this issue.
        Simply put, it is my feeling that our access to large land
    bases in the 21st century is liable to be less than it has been
    in the 20th century in the way we have traditionally done it.
    We have seen the rise of sovereignty issues around the globe,
    nations that jealously guard their national sovereignty, and
    sometimes make it very difficult for us to position our forces
    and, if we do position our forces, use our forces in the way we
    would want to.
        Sea-basing gives you a mobility and a sustainability piece
    that, if done right, will offset those sovereignty issues that
    are in the land-based side of the house. It will go beyond the
    current configuration of the fleet. It will include a family, I
    believe, of high-speed vessels. Currently we are experimenting,
    as an example, with a high-speed vessel in Okinawa. Instead of
    waiting for strategic airlift, which is very short and very
    expensive and in great demand, as you might imagine, we can
    now, as a result of a leased ship that we obtained from
    Australia, take an entire marine battalion and all of its
    equipment, put it on a high-speed vessel, and, at a speed of 50
    knots, be in the mainland of Japan the next morning, or we can
    be in Guam a day later than that, at a significantly lower
    cost.
        So looking at this concept of sea-basing and looking at
    some of the things that were discussed in the mid-1990s, put
    aside the opportunity to build perhaps mobile offshore bases
    when you have a culture that is expeditionary like the Navy and
    the Marine Corps, where a 6-month rotation is the standard for
    our culture. If we had sea bases to go to and project our
    influence and our sovereignty around the world, I think you can
    have an exponentially different way of doing business.
        So I am very excited about the whole concept of sea-basing.
        Senator Sessions. I think that has great potential and the
    high speed movement by ship has great potential. Also, our
    subcommittee deals with airlift, too, and we know how tight
    that can be. To me, if we could supplement it significantly in
    this fashion we would be making a step forward.
        General Jones. Absolutely.
        Senator Sessions [presiding]. Senator McCain, I think I am
    acting chairman here again. So I am glad to recognize you. I
    have finished up. It is all yours.

                    STATEMENT OF SENATOR JOHN McCAIN

        Senator McCain. Thank you very much, Senator Sessions.
        Thank you, General Jones, for being here. Thank you for
    your leadership of the Marine Corps and thank you for the
    changes that you are making in the Marine Corps to help meet
    these new and very difficult challenges that I think we just
    learned in the last day or so are still quite significant.
        General Jones, could I ask you about the issue of the
    aircraft carriers. I and eight other members of the Senate went
    on a trip to Central Asia a month or so ago, including
    Afghanistan and several other countries. But, on the way back,
    we took the opportunity to go out on board the Theodore
    Roosevelt. The Theodore Roosevelt at that time was one of four
    aircraft carriers that were in the region. They were on their
    113th day of deployment without having been into port and they
    were going to have some more weeks of deployment.
        That is a very long time to be at sea. It is something that
    the officers and enlisted men and women were very enthusiastic
    about because they clearly thought they were making an
    important contribution to freedom and combatting the war on
    terrorism. But I do not think you can do that very long and
    very often and maintain men and women in the all volunteer
    force.
        As I mentioned, there were four aircraft carriers. My
    understanding is there are 11 operational aircraft carriers and
    one training carrier. Four of the 11 were on station at that
    time.
        Do you not think it would be very difficult to maintain
    that kind of OPTEMPO over an extended period of time?
        General Jones. Senator, I think the CNO and I have talked
    about those things and that is clearly a difficult, very
    challenging, and very stressful thing to do. In addition to the
    carriers, there were six amphibs that have been out there for a
    considerable period of time. I know the CNO has taken that into
    consideration and meeting General Franks' request for the
    support and the presence.
        Interestingly enough, the preponderance of TACAIR that was
    delivered and still continues to fly over the skies of
    Afghanistan are coming from those naval platforms, simply
    because of the difficulty to project TACAIR over those
    distances. But your point is well taken. It is something that
    as a percentage of our total fleet, and if you examine the
    potential requirements of the global war on terrorism and the
    role that the naval expeditionary force will play in
    prosecuting that war, then we have to make sure that we do not
    break either the capability of the ships or the capability of
    the force to sustain those operations.
        That is why we are working very hard to make sure that
    those ships get rotated in a timely manner, so that it is not
    an indefinite deployment, recognizing that 6 months straight is
    an awfully long time.
        Senator McCain. It just seems to me that perhaps we are not
    looking at the requirement for additional aircraft carriers--I
    am talking about big carriers--if that indeed is the case,
    which I think that statistics prove that it is carrier-based
    air that is carrying the majority of the load. It always seems
    to at the initial phases of conflict, until the land bases are
    established. I know we will, working with Kyrgystan,
    Uzbekhistan, etcetera, build bases that land-based air can
    operate from.
        But it seems to me that we need to consider what the
    threats are and whether we have sufficient carrier capability
    in light of the requirement for carriers to undergo
    maintenance, training, etcetera. As proud as those men and
    women are of serving, I do not think you can send them too many
    times on 6-month deployments and maintain the reenlistment
    rates. Would you agree with that?
        General Jones. Over time, committing that percentage of the
    force for that length of mission will probably cause
    difficulties in the services. But for now, because of the fact
    that we are at war, we are, in fact, dependent on them to
    provide that force from those platforms. There is not really
    any good other alternative. So I think we, recognizing the
    challenges and the stresses that places on the force, also
    celebrate the courage and dedication of those crews that are
    just doing astoundingly good work.
        But your point is well taken, that how we go on in the
    future; it just cannot be assumed that we can operate at that
    tempo forever. That is why we really have been working hard to
    make sure that we just do not do indefinite deployments,
    either, 8, 9, 10 months. That is not supportable.
        Senator McCain. Obviously and unfortunately, some of that
    is dictated by the nature of the threat as opposed to planning.
        General Jones. I mentioned earlier, Senator, that the 15th
    MEUSOC, for example, which just completed almost a 7-month
    deployment, was the first marine unit to go into Camp Rhino and
    just returned home yesterday at San Diego, and we celebrate
    that return and their great contribution. But it is time for
    those ships and the equipment on those ships to get some tender
    loving care and maintenance, and it is time to get the next
    unit ready to go out. That is what we are about.
        Senator McCain. There was an article January 28th entitled
    ``Responding to Lott, DOD Starts Funding LHD-9 and One More
    DDG-51,'' by Chris Castelli, in a publication ``Inside the
    Navy.'' The article states: ``At the urging of Senate Minority
    Leader Trent Lott, the Pentagon has made last-minute
    adjustments to the Navy shipbuilding plan in the Bush
    administration's fiscal year 2003 budget. The Pentagon put $74
    million more towards a third DDG-51 destroyer and allocated $10
    million to advanced procurement for a ninth amphibious ship,
    LHD-9, that was not previously in the budget.''
        General Jones, was a ninth LHD-9 in the Navy's budget, in
    the Navy's PBD, do you know?
        General Jones. I am sorry, Senator?
        Senator McCain. Was an LHD-9 in the Navy's PBD?
        General Jones. The advanced procurement of it was.
        Senator McCain. Was it in the Navy's PBD? I think I have a
    document here that shows that it was not.
        General Jones. It was not.
        Senator McCain. It is interesting. According to the article
    this decision was made by the comptroller, which I do not
    expect you to comment, it is just bizarre. I have never heard
    of the comptroller making these kinds of decisions. It makes
    one wonder what kind of decision-making process is taking place
    over there, particularly in light of other decisions, such as
    the procurement of--not procurement, certainly not
    procurement--leasing of Boeing aircraft without even the
    Secretary of Defense knowing that that decision was being made.
        Are you aware of an effort going on by the Department of
    the Navy to look at an analysis of alternatives to replace the
    current LHA with an LHA-R, and are you aware that the OSD
    Comptroller's Office deleted the funding for the study on the
    AoA, cutting $16 million from the RDT&E effort for the LHA
    replacement?
        General Jones. We have supported the advanced procurement
    of the LHD-9. I think that is something that we need to do. We
    can accommodate any changes for the design recommendations as
    they come about. This is an ongoing discussion and we will have
    to see where it takes us.
        Senator McCain. Well, thank you, but my question was are
    you aware that there was an analysis of alternatives that was
    cut from the RDT&E effort?
        General Jones. I am not aware of that, Senator.
        Senator McCain. Finally, tell me about the Osprey, please,
    and what your vision is, what it is going to cost, what needs
    to be done, and what is your degree of optimism is? Just give
    me a 2-minute blurb on the Osprey, please.
        General Jones. Two major independent panels, NASA being one
    and the Secretary of Defense's independent panel, concluded
    that the problems associated with the V-22 had more to do with
    engineering than mature technology. So, the technology was
    validated as being sound. Since that time we have been working
    very closely with industry to fix the engineering problems and
    re-engineer, for example, the hydraulic system, eliminate the
    chafing that was taking place within the titanium fuel lines,
    and to fix the software deficiencies that contributed to the
    anomalies that caused the last accident. We have received the
    support of the Under Secretary of the Defense for the
    Acquisition.
        Senator McCain. How about the comptroller? Have you got his
    support?
        General Jones. The funding line is satisfactory. We expect
    to resume test flying some time in April.
        Senator McCain. So you are optimistic?
        General Jones. I am optimistic that the technology is
    sound. To the extent that an infantry officer can understand
    the aeronautics and the physics of tilt-rotor technology, I
    have spent a lot of time with industry. I have walked the
    assembly plant and I have talked to the squadron. I have talked
    to the senior leadership in both Bell and Boeing who are
    partnering in this project.
        I am personally convinced that the recommendations of the
    two independent panels were persuasive, and the Secretary of
    the Navy has also been persuaded and we are planning a return
    to flight that is event-driven, not timeline-driven. Despite
    the operational need for this, what I think is a
    transformational capability that will, initially, be given to
    the Marine Corps and the Special Operations Command, I think
    that we have the potential of bringing something into our
    combat capability that will in the case of another Afghanistan
    completely transform the way we do business. Had we had it this
    time, and it is clear that we would not have had the number of
    mishaps that were caused by altitude and very, very demanding
    flight profiles that our helicopters are simply not well
    equipped to do.
        Senator McCain. What happens to the capabilities of the
    Marine Corps if the Osprey program were cancelled?
        General Jones. Then we very clearly are returning to a
    dependence on rotary wing, and we do have a general plan for
    that eventuality if it should happen. But it will clearly mean
    a step backward in terms of the potential of transformation. It
    will be essentially a modernization of existing capabilities
    that will have generally limited reach, range, and payload
    capability. But that is what we will have to do.
        Senator McCain. Is your rotary capability aging?
        General Jones. It is beyond aging in the CH-46 capability,
    which preceded my time in the service in terms of when it came
    into the inventory. So the CH-46 capability must be replaced in
    any eventuality. The 53-Echoes are a little bit--are
    considerably younger, but we definitely have to address the
    workhorse of the fleet, the CH-46, which has an average age of
    33 years as we speak. They last for a service life of 30 years,
    roughly.
        Senator McCain. So, if the Osprey were cancelled, you would
    have to make some very difficult decisions?
        General Jones. The solution that we would have to go to
    would be a rotary wing solution, yes, sir.
        Senator McCain. With a fleet that would have to be
    modernized?
        General Jones. Certainly, yes, sir.
        Senator McCain. Well, I thank you, General Jones. I hope
    that you will see your way clear to stop out at the Marine
    Corps Air Station Yuma before the weather gets too warm. You
    are welcome. You are always welcome out there. Even non-
    aviators are welcome.
        General Jones. Sir, I appreciate that. I was there 2 weeks
    ago and I talked to all the commanders, the XOs, and the
    sergeants major on the subject of safety.
        Senator McCain. I hope that you talked to them about the
    quality--do not talk to them about the quality of their
    representatives in Washington in the United States Senate.
        I thank you, General Jones, for appearing before us and I
    thank you for the job that you continue to do.
        Thank you, Senator Sessions.
        Senator Sessions. Thank you.
        If there is nothing else, we are adjourned.
        [Questions for the record with answers supplied follow:]

                   Questions Submitted by Senator John McCain

                            UPDATING TRANSPORTATION

        1. Senator McCain. General Jones, you know that I traveled to
    Afghanistan with other members of this committee. While there, I heard
    from several Navy and Marine Corps officers that the number one concern
    for replacing the LHA is safety because of a stability problem or high
    center of gravity issue, especially with deployed aircraft. Their
    concern was that even with some minor fixes with fuel compensation
    systems, the problem will be exacerbated when the Service deploys
    larger aircraft, such as the Osprey (MV-22) and the Joint Strike
    Fighter (JSF) which are replacements for the CH-46 and AV-8B
    respectively. I am told that the MV-22 is twice the weight of the CH-46
    and that the JSF is believed to be about twice the weight of the AV-8B.
        With this in mind, would you agree that the problem could be
    exacerbated with the planned future aircraft and vehicles envisioned
    for the Marine Corps?
        General Jones. In discussions with the Navy, the Fuel Oil
    Compensation Ship Alteration significantly improves LHA-1 class damaged
    stability. With this alteration, the LHA can accommodate MV-22
    integration, with aggressive control of future weight growth. The
    capability of these ships to handle JSF and associated support has not
    been determined. The LHD-1 class has improved stability characteristics
    due to design differences relative to LHA-1 class. LHD-1 class can also
    accommodate MV-22 integration with aggressive weight control measures.
    The Fuel Oil Compensation Ship Alteration is necessary in early
    numbered ships of the LHD ship class to accommodate JSF integration.
    LHD-7 has already received the Fuel Oil Compensation Ship Alteration in
    new construction and has the growth allowance available from a
    stability standpoint to accommodate MV-22 and JSF integration.

        2. Senator McCain. General Jones, is the LHD a transformational
    replacement for the LHA class of ships, considering that the ship does
    not meet the requirement in planned future vehicles and aircraft for
    the Marine Corps or our special operations community and considering
    the amphibious lift requirement of 2.5/3.0 MEB?
        General Jones. The ongoing LHA Replacement Analysis of Alternatives
    is addressing whether the LHD is a good replacement for the LHA class.
    Continuing to build LHDs, as well as ship design modifications to
    enhance the capability to operate with the new generation amphibious
    systems such as the Joint Strike Fighter, MV-22 Osprey, Advanced
    Amphibious Assault Vehicle and Medium Tactical Vehicle Replacement are
    currently being examined. The Analysis of Alternatives is also
    investigating the optimum way to reach the fiscally constrained
    amphibious lift capability of 2.5 Marine Expeditionary Brigades. It has
    long been recognized that the Marine Corps requires an amphibious ship
    force structure capable of simultaneously lifting the assault echelons
    of three Marine Expeditionary Brigades (MEB AE). The Analysis of
    Alternatives is expected to report out later this year and will present
    its conclusions at that time.

        3. Senator McCain. General Jones, it seems to me that the LHD is
    not a very transformational program, especially considering that it is
    the exact same hull of the current LHA class that is based on a 1950s
    design. It seems to me that if the LHA(R) class ship is built to have a
    life span of 50 years with no further research and development (R&D)
    invested, then LHD-9 will be a 100-year-old design when it is
    decommissioned in the 2050 time frame. Are you concerned with the level
    of R&D funding in the fiscal year 2003 budget for a major amphibious
    ship like LHA(R)?
        General Jones. In discussions with the Navy, there were programmed
    research and development funds for LHA Replacement to address new
    hullforms and other transformational issues in the fiscal year 2002 and
    2003 budgets. Subsequently, fiscal year 2003 and 2004 research and
    development funding was deleted. The Navy is addressing the fiscal year
    2004 funding issue as part of the ongoing budget process. Additionally,
    the Navy will need to increase the research and development funding
    line for LHA(R) if the results of the Analysis of Alternatives support
    a ship with more capabilities than the current LHD class.
        The LHD hull is actually a modified version of the LHA hullform.
    Although the hull structure is similar, there have been improvements
    made in the LHD hull over the LHA. Additional transformational
    improvements have been made throughout the construction of the LHD
    class. The original hullform of the LHA and LHD classes were
    constrained by a requirement to transit the Panama Canal. That
    requirement was removed in 1996 and could permit significant hull
    improvements to be made in the planned LHA(R) class. The planned life
    of the LHA(R) class, like the LHD class, will be 40 years.

                             SHORT TAKE-OFF TACTICS

        4. Senator McCain. General Jones, you have stated that a JSF
    capable of flying from an expeditionary airfield will transform the
    very foundation of tactical air power. How important is a Short Take-
    Off and Vertical Landing (STOVL) version of the JSF to the Marine
    Corps? Could marine tactical aviation continue to thrive without the
    STOVL JSF?
        General Jones. Marine tactical aviation would continue to
    accomplish its mission without the STOVL JSF but only at a 1980s
    technology level. STOVL JSF is critical to the transformation of marine
    aviation and provides the Marine Corps the only option to affordably
    reconstitute the bulk of our tactical aircraft, while providing the
    survivability, lethality, flexibility and supportability necessary to
    deal with the threat of 2010 and beyond. STOVL JSF's capability will
    provide marine aviation the tool to support the Marine Air-Ground Task
    Force in the execution of Expeditionary Maneuver Warfare. Without the
    STOVL JSF the Marine Corps and the Nation will suffer a tremendous loss
    of capability.
    Why Short Takeoff Vertical Landing (STOVL)?
        Transformation
        In 1957, General Randolph Pate, the 21st Commandant of the Marine
    Corps, committed us to the vision of becoming an all STOVL force. Such
    a revolutionary transformation will provide the Corps with unparalleled
    flexibility and enhanced operational capability. Beginning in the early
    1980s, the USMC embarked upon a neck-down strategy of reducing the
    number of type, model, and series of our fixed wing and rotary wing
    aircraft. The strategy reduces our fixed wing strike aircraft from
    seven types to one in the 2020 timeframe. Over the next decade, General
    Pate's vision will become reality as the Corps fields the STOVL Joint
    Strike Fighter (JSF), culminating our efforts to neck-down our fixed
    wing strike aircraft and to complement our MV-22 Osprey tilt-rotor
    aircraft. Today, the USMC is committed to an All-STOVL force and has
    foregone the purchase of a follow-on legacy aircraft to invest in the
    next generation of tactical fighter aircraft.
        Expeditionary Ethos
        Expeditionary Maneuver Warfare (EMW), the Marine Corps' capstone
    concept for the 21st century is built on our core competencies and
    prepares the Marine Corps, as a total force, to meet the challenges and
    opportunities of a rapidly changing world. EMW is the union of our
    maneuver warfare philosophy, expeditionary heritage, and the concepts
    by which we organize, deploy, and employ forces. Expeditionary forces
    must be adaptable, with the capacity to commit to a specific mission,
    while remaining ready to rapidly shift to an entirely different one.
    They must also be capable of rapidly increasing or decreasing the
    combat power available in an area of operations. Without a STOVL
    capability, Marine Expeditionary Forces cannot fully exploit the
    advantages of our EMW concept. The STOVL JSF represents the future of
    the Aviation Combat Element (ACE) in Marine Expeditionary Forces. Our
    long-term strategy is to replace our Harriers and F/A-18 Hornets with
    the STOVL JSF. The performance characteristics of the JSF will enable
    it to operate from the decks of both amphibious ships and aircraft
    carriers, as well as from expeditionary airfields located well forward-
    close to the ground troops it will support. Most recently, we proved
    the validity of STOVL aircraft in a tactical role with the AV-8B
    Harrier's forward deployment into Kandahar, Afghanistan. Our Harriers
    launched from Amphibious Readiness Group (ARG) shipping and forward
    based at Kandahar to provide close air support to coalition ground
    forces.
        Spectrum of Conflict
        Since 1990, Naval forces have averaged one contingency response
    every 5 weeks. These crises have ranged across the entire spectrum of
    operations, from peacekeeping and disaster relief to regional conflict.
    With STOVL JSF deployed with our Navy/Marine Corps team, we stand ready
    to respond across the full spectrum of conflict from humanitarian
    operations to major theater war. Because the hardware and software
    architectures of our current TACAIR platforms are over a decade old,
    they have a very limited ability to integrate new technology being
    developed to deal with emerging threats. While threat systems
    capabilities increase, the combination of stealth, advanced
    countermeasures, and improved pilot situational awareness provide the
    JSF the ability to fight and survive against the rapidly emerging
    Surface-to-Air Missile (SAM) threat. Specifically, as the SAM threat
    continues to evolve and proliferate, stealth will become important to
    aircraft survivability.
        Affordability
        The purpose of the JSF Program is to affordably develop the next
    generation strike fighter weapons system to meet an advanced threat
    (2010 and beyond). A 1980 Naval Air Engineering Center Sea-Based Air
    Master Study concluded that STOVL aircraft require 30 percent less deck
    space for operations. Additionally, the study reported that an Air Wing
    equipped with STOVL aircraft would generate 30 percent more sorties for
    targets out to 300nm and 15 percent more sorties for targets out to
    700nm. These findings have direct implications on affordable future
    ship design for the CVN and LHA replacement classes. The Cost and
    Operational Performance Trade Studies used in requirement development
    and the independently conducted Analysis of Alternatives have shown
    that JSF has struck the right balance between performance and
    affordability. Commonality across the family of JSF variants is the key
    to affordability. All of the variants will share a common avionics
    architecture, a common airframe, and a common core propulsion system--
    greatly reducing the manufacturing/procurement costs. JSF will replace
    almost 3,000 aircraft within the USAF, USN, and USMC and is the
    affordable solution to the TACAIR inventory obsolescence problem that
    we currently face.
        Conclusion
        The STOVL JSF incorporates leap ahead technology with developing
    concepts such as Joint Vision 2020 and our overarching concept of
    Expeditionary Maneuver Warfare to establish a truly CINC-relevant
    aircraft of choice. STOVL JSF is critical to the success of the Marine
    Corps in the 21st century, as it will solve the significant problems of
    age and attrition currently facing Marine TACAIR. The STOVL JSF will
    provide the Marine Corps with a stealthy, state-of-the-art, high
    performance, multi-role jet aircraft that can operate within the
    expeditionary environment. The Marine Corps begins receiving JSFs in
    2008 with a fully operational, deployable squadron scheduled for stand
    up in 2010. The combination of stealth, basing flexibility, and
    superior performance will revolutionize air warfare and Naval Aviation
    well into the 21st century.

                             TRAINING RESTRICTIONS

        5. Senator McCain. General Jones, the Marine Corps success in
    Operation Enduring Freedom has shown the importance of proper training
    for the air/ground team, especially close air support. With serious
    encroachment issues facing many military training ranges today,
    including land, airspace, and bandwidth, and restrictions being placed
    on training such as on Vieques Range, how has the relevance in air and
    ground combat training for Navy and Marine Corps aircrews been affected
    at the Barry M. Goldwater Range (BMGR)? What prospects do you see for
    even greater use of the BMGR in the future?
        General Jones. My most important responsibility as Commandant of
    the Marine Corps is to ensure that our marines and sailors are well
    trained and ready for the dangerous missions we routinely ask them to
    perform. This is not an abstract requirement. For the Atlantic Fleet
    Navy and Second Marine Expeditionary Force (II MEF) units, the most
    rigorous, realistic training that allows us to certify our forces as
    combat ready is provided at the training range on and around the island
    of Vieques, Puerto Rico.
        Recently, marines and sailors from the 2,200 strong 26th Marine
    Expeditionary Unit Special Operations Capable (MEU SOC) played an
    integral role in air and ground combat operations during Operation
    Enduring Freedom in Afghanistan. For these units, Vieques provided
    vital predeployment training such as naval gunfire shore fire control
    party training and other supporting arms coordination exercises. In
    addition to performing other mission essential tasks, this training
    routes aircraft from a holding position to a marine infantry unit on
    the ground that needs close air support fires. To provide this service
    requires detailed coordination. In Vieques, marine air support elements
    are truly able to master their skills. From communications with
    numerous Navy ships to controlling and directing dozens of aircraft
    into an objective area and safely out again, marines gain immeasurable
    experience and confidence in their abilities.
        If the training opportunities at Vieques are lost permanently, the
    Navy can still conduct naval gunfire training using the IMPASS system,
    an array of sonobuoys at sea. Unfortunately, this system does not
    provide the opportunity to train naval gunfire control parties, as this
    is an acoustically cued correction system vice a visually cued
    correction system. In combat, naval gunfire observers make adjustments
    onto a target using direct visual impact observations. This degradation
    of combined arms training due to encroachment will have a deleterious
    effect on our marines' combat readiness.
        The western portion of the Barry M. Goldwater Range is part of the
    Yuma Training Range Complex (YTRC), which also includes the Chocolate
    Mountains Aerial Gunnery Range (CMGR), and approximately 10,000 square
    miles of associated Special Use Airspace in Southwest Arizona and
    Southeast California. The BMGR supports intermediate and advanced level
    training in all six functions of marine aviation: assault support,
    control of aircraft and missiles, offensive air support, electronic
    warfare, tactical air reconnaissance, and anti-air warfare. Training
    conducted at BMGR provides tactical employment of MEF units and
    individual combat skills training in a high-stress, simulated high-
    threat, realistic environment. Other services also train on the range
    to include Navy, Air Force and National Guard units.
        Current capabilities of the BMGR West allow for: (1) accurate
    scoring of inert ordnance delivery on a circular raked range, unscored
    inert ordnance delivery on a realistic target complex, and simulated
    ordnance deliveries in realistic target complexes; (2) sufficient
    maneuver airspace for fixed wing and rotary wing aircraft to conduct
    tactical maneuvering; (3) response to third generation threat emitter
    systems (Fourth generation EW emitters are only available for students
    during WTI courses. The emitters are rented at high cost.); (4)
    tracking events on Tactical Air Combat Training System (TACTS) from
    medium altitude (5,000 feet above ground level) to high altitude
    (80,000 feet above ground level); and (5) limited debrief capability of
    aircrew counter-threat response effectiveness.
        Desired future capabilities for the BMGR include: (1) integration
    of BMGR East (Air Force) and West (Marine Corps) aircraft tracking
    systems; (2) tracking aircraft to the surface and vehicles; (3) fourth
    generation threat emitters; (4) target systems with multi-spectral
    cuing; and (5) use of advanced weapons systems such as Joint Strike
    Fighter, MV-22 Osprey, Joint Direct Attack Munitions (JDAM) and Joint
    Stand Off Weapons (JSOW). Intrinsic to these future capabilities are
    myriad unfunded upgrades, such as secure communications, high capacity
    fiber optics, communications and data relays, etc.
        The nearby Chocolate Mountains Aerial Gunnery Range in California
    supports live fire integration of aviation and supporting arms. The
    Marine Air Ground Task Force Training Command (MAGTFTC) in Twenty-nine
    Palms, California closely integrates the full compliment of
    capabilities for aviation and ground combat units in a live fire
    combined arms training environment. As at Vieques, San Clemente Island
    off the coast of Southern California provides for naval gunfire support
    training.
        Although the relevance of aircrew training in the BMGR will
    increase as a result of lost training opportunities at Vieques,
    prospects for greater use of the BMGR in the future are limited due to
    the effects of encroachment. Encroachment upon Marine Corps properties
    is principally due to regulatory requirements that place the burden of
    compliance/action on military installations and environmental groups/
    commercial interests. They want the government to either accept
    environmental mitigation on our land or preserve existing on-base
    conditions to the detriment of current and future mission capability.
        BMGR currently provides habitat for two species listed under the
    Endangered Species Act--the Sonoran Pronghorn antelope (designated) and
    the Flat-tailed horned lizard (proposed). The presence of these
    protected species places significant restrictions on approximately
    320,000 acres (46 percent) of the BMGR West. Similarly the Sonoran
    Pronghorn occupies 445,000 acres (42 percent) of the BMGR East, which
    is under U.S. Air Force control but is also used by fleet marine units
    and Marine Aviation Weapons and Tactics Squadron One (MAWTS-1).
    Although civilian recreational use and the two protected species have
    not prevented required training mission accomplishment, they limit use
    of certain portions of the range. For example, when Pronghorn antelope
    are present in a target area, fighters laden with ordnance and fuel
    must loiter until the antelope leave, or, cancel the sortie without
    completing their assigned mission.
        Marine Corps installations manage training areas and ranges such as
    the BMGR, and provide logistical support for all levels of the Marine
    Corps organization from the individual rifleman/aviator, all the way to
    the MAGTF. Additionally, other services deploy to our installations and
    train on Marine Corps ranges. The ability to ``train as we fight'' in
    the air, on land and sea has continually diminished since the post-
    World War II era as a result of encroachment. During the post war
    period, the complexity, range, and destructive force of weapons and
    weapons delivery systems increased exponentially. This difficulty is
    further compounded by the fact that our World War II installations and
    training areas generally did not expand as weapons increased in range,
    destructive force and lethality.
        Encroachment issues are many, complex, and involve multiple
    Federal, state and local agencies, as well as Congress and the public.
    The impact of encroachment is also broad--affecting our ability to
    execute realistic air, ground, and amphibious training across the
    Nation, as well as beyond its borders. In spite of the many
    encroachment pressures facing our ranges, we are dealing with the
    situation in order to support the current aviation training
    requirements in the BMGR. This is in no small part due to overwhelming
    support from the community, state and local government who have taken
    affirmative action, within their means, to protect DOD installations in
    Arizona from encroachment.
        The cumulative impacts of encroachment, however, cause operational
    and training restrictions. These restrictions result in less realistic
    training, which in turn degrades combat readiness. All forms of
    encroachment that restrict land, airspace, and bandwidth use degrade
    combat readiness.

                           NAVAL SURFACE-FIRE SUPPORT

        6. Senator McCain. General Jones, with the cancellations of the
    Land Attack Standard Missile (LASM) program and the Navy's DD 21 land
    attack destroyer program, what are your concerns for the future of
    naval surface fire support?
        General Jones. My concerns regarding the near-term Naval Surface
    Fire Support enhancements are two-fold. First, there is no current
    program of record that adequately addresses the Marine Corps'
    intermediate range fire support requirements. The LASM was the system
    being developed to address this requirement. The Tactical Tomahawk
    (TACTOM) missile, although technically capable of at least partially
    meeting this requirement, is foremost a strike weapon system and is
    likely to be employed in a fire support role only in extreme
    situations.
        I am also concerned that the planned procurement of Extended Range
    Guided Munition (ERGM) projectiles will be insufficient to provide
    sustained fire support for the Nation's expeditionary maneuver forces.
    At the current planned procurement rate, there will exist less than two
    ship fills of this munition per ERGM-capable ship delivered in the
    FYDP.
        My principle concern for the far-term is that DD(X) will be fielded
    with less capability and in fewer numbers than previously planned in
    the DD 21 program. Just as DD 21 was to be the key element in fully
    meeting our Naval Surface Fire Support requirements, so now is DD(X)
    and its associated weapons systems a vital element in realizing the
    full potential of Expeditionary Maneuver Warfare. The Advanced Gun
    System (AGS), with a family of extended-range 155mm projectiles, and
    the Advanced Land Attack Missile (ALAM) are essential elements of the
    fire support system that will provide responsive, all-weather fire
    support ``from the sea'' in support of forces operating throughout the
    depth of the littoral battlespace.
                                     ______

                    Questions Submitted by Senator Bob Smith

                        EQUIPMENT OPTICS AND DESIGNATION

        7. Senator Smith. General Jones, in the Marine Corps Times on
    February 18, 2002, there was an article by Christian Lowe about the
    Corps' Combat Assessment Team. I want to applaud you and the Corps
    about your efforts to critique quickly and accurately, and improve your
    own performance in the war on terrorism. Candid and unfettered
    introspection is important to get good ``lessons learned'' from combat.
    This introspection, followed by progress in fixing the problems, is
    even more impressive. The article highlighted some immediate fixes your
    assessment team may have facilitated to better support your marines in
    the field.
        One issue I do have a concern with is the marines' continued
    ability to locate, designate, and hand off targets for attack
    aircraft--a subject mentioned in the article--and the growing
    importance of night vision devices and laser target designators for the
    individual ``trigger pullers'' who are on the line each and every day.
    I understand you are actively working to better improve your ties with,
    and coordination with, Special Operations Forces, who have definitely
    ``earned their pay'' in Afghanistan by working in these areas and with
    this type of equipment. I would expect that to work with these forces,
    you, too, need comparable equipping of your marines.
        Can you please explain the Corps' plan to improve these two
    battlefield functional areas?
        General Jones. The war against terrorism highlighted the
    complementary capabilities of crisis response forces, the Marine Corps,
    and forces assigned to the United States Special Operations Command
    (SOF). Restraints imposed by today's environment magnify their
    contribution because they are unencumbered by the requirements for
    extensive regional infrastructure. Moreover, as demonstrated during the
    recent campaign, the surgical precision of SOF coupled with the
    combined arms punch of forward deployed amphibious-based Marine Air-
    Ground Task Forces prove not only their individual utility, but
    illustrate the synergy in overcoming specific challenges such as:

             the remote and austere nature of the battlefields
            where forces prosecute our Nation's campaign against terrorism.
             host nation concerns regarding the presence of
            American forces within their borders.
             the need to conduct strike operations while
            maintaining increased operational security.

        The recent events highlighted the need to establish service-level
    links between SOCOM directorates and their counterparts within the
    Marine Corps to develop detailed areas of mutual interest spanning the
    entire continuum of service level concerns. We believe this will
    enhance the mutual support our two organizations can provide one
    another. Through a recently signed Memorandum of Understanding (MOU)
    between the USMC and SOCOM, the focus of effort will be to:

             examine current capabilities and missions in order to
            leverage the unique capabilities of each organization, thus
            enhancing interoperability.
             establish and continue the interface between CONUS-
            based and theater-based SOF and deploying Marine Air-Ground
            Task Forces.
             synchronize USSOCOM and USMC warfighting developments,
            as well as material research and procurement initiatives.

        We believe the USSOCOM-USMC Board is a forum for Special Operations
    Forces (SOF) and the Marine Corps to interface and coordinate with
    regard to common mission areas and similar procurement initiatives.
        How will we continue to improve target identification and
    designation using night vision devices and laser target designators?
    There is one program of record: Target Location, Designation, and Hand-
    off System (TLDHS). TLDHS is a Modular Universal Laser Equipment (MULE)
    replacement with an IOC of 4th Quarter, fiscal year 2004. TLDHS can
    both target locate and designate and has night thermal capability. The
    Marine Corps Systems Command (MCSC) is looking at an interim Laser
    target location fix through a commercial off-the-shelf (COTS) solution
    that could make a binocular type device available this summer. An
    interim designator COTS solution would take 11 months manufacturers
    lead time to produce.
        As a result of 15th MEU Aviation Command Element (ACE) Operation
    Enduring Freedom lessons learned and back briefs from the Marine Corps
    Combat Action Team, the Commanding General, Marine Corps Combat
    Development Command, signed a Statement of Need (SON) for the immediate
    procurement of 180 precision targeting systems. Presently, the Marine
    Corps employs the AN/GVS-5 Laser Observation Set to assist fire support
    observers in determining distance to a target. The AN/GVS-5 does not
    determine azimuth or inclination, which are critical in determining an
    accurate target location (target grid coordinate generation). It does
    not possess a data interface capability. Operating force feedback and
    experimentation have identified the deficiencies of this legacy system.
    MCSC has a funded program called the Advanced Eye-Safe Laser
    Rangefinder (AEROS), which addresses the same requirement; however,
    programmatics dictate a system will not be fielded until fiscal year
    2005. Through market research, MCSC has identified a COTS solution
    (Leica Vector/Viper II) to meet the SON (also being used presently by
    SOCOM in response to their Combat Mission Needs Statement). While this
    solution does not completely meet the requirements spelled out for
    AEROS, it is immediately available in mass quantities and does meet the
    requirements of the SON. MCSC evaluated this system the week of 25
    March 2002. If funding could be identified and a production decision
    reached, the Leica Vector could be available to the operating forces as
    early as June 2002. The PTS-180 program will also serve as a test bed
    for the AEROS program, providing feedback on current capabilities and
    impacting future operational requirements. AEROS is not a redundant
    program to TLDHS. AEROS is a separate program meant to compliment TLDHS
    capabilities.

                 EQUIPMENT AND EQUIPPING--INDIVIDUAL PERSONNEL

        8. Senator Smith. General Jones, one aspect of your testimony that
    I find heartening is your stated ``highest priority''--your marines,
    their families, and civilian workforce. The ``people vs. equipment''
    balance is one of the Marine Corps hallmarks: take care of the marines,
    and the marines will take care of the mission. In this view, I would
    like to know if the current proposed budget meets the needs for some of
    the basic items--initial equipment issues, individual gear
    improvements, cold weather clothing, special use items, and so on--that
    will improve the quality of life for the marines in the field and thus
    further improve their performances.
        General Jones. The proposed budget for fiscal year 2003 meets the
    currently identified needs of the Marine Corps in the area of initial
    equipment issues over the course of the FYDP. As a result of the
    balancing required-to-fund competing requirements across all of the
    Marine Corps appropriations, many items will not be fully fielded until
    fiscal year 2008 or later, thus, additional funding would accelerate
    acquisition of the initial issue items. With new and improved gear,
    marines will gain a significant advantage in terms of their lethality,
    survivability, and mobility. Funding these equipment requirements will
    ensure that marines will maintain a competitive advantage over the
    enemy by being more mobile, lethal, comfortable, rested, and ready to
    fight.

        9. Senator Smith. General Jones, I have seen several press accounts
    indicating that we may not have had sufficient numbers of linguists
    trained in the languages spoken in Afghanistan, such as Dari and
    Pashto, to communicate with the locals as quickly as we would have
    liked. As a force provider who works for and with the regional CINCs,
    and in preparing expeditionary units ready to respond around the world,
    do you have enough foreign language speakers in the appropriate
    language skills to provide the essential link between your forces and
    the native populations? Would you have liked to have more, and do we
    need more language training programs?
        General Jones. In 1996, Headquarters Marine Corps established the
    8611 Additional Military Occupational Specialty (AMOS) to identify
    marines with critical heritage foreign language skills to serve as
    interpreter/translators. In 1999, Headquarters Marine Corps initiated
    an aggressive effort to more accurately screen and identify all
    heritage foreign language speakers as they entered our ranks. The early
    identification of heritage speakers in ``less-commonly taught''
    languages such as Dari, Urdu, and Pashto and the assignment of these
    heritage language speakers as translators were essential in allowing
    the Marine Corps to meet emerging contingency foreign language
    requirements.
        Under the Marine Corps' Language Identification Program (LIP),
    marines are screened during the recruiting process. Those determined to
    have heritage foreign language skills then have their language
    proficiency validated for potential future assignment. The success of
    this effort over the last 2 years has been demonstrated by the
    identification of thousands of native speakers who can be temporarily
    assigned additional duty as translators/interpreters, thereby ensuring
    that foreign language skilled marines in Intelligence billets can
    remain focused on their assigned primary mission.
        During 1998, in an effort to stabilize manning of the Intelligence
    Occupational Field, Headquarters Marine Corps temporarily doubled the
    number of basic language seats at the Defense Language Institute (DLI).
    As a result, the Marine Corps currently has approximately 320 Modern
    Standard Arabic (MSA) speakers in the active Force. MSA is a common
    language linking the myriad extremist groups targeted in support of
    Operation Enduring Freedom (OEF). This robust inventory of Marine MSA
    speakers is a considerable asset that can be leveraged in response to
    emerging OEF foreign language requirements.
        The Marine Corps continues to search for more efficient ways to
    identify, screen and train Marines with foreign language skills to
    support operational and intelligence requirements. The Marine Corps'
    foreign language requirements are identified by the Marine Operating
    Forces in response to planning guidance via the assignment of
    appropriate Military Occupational Specialty (MOS) billets on unit
    Tables of Organization (T/O). Given the constraints of authorized
    Marine Corps end-strength and the large set of languages required to
    meet projected military missions, the Marine Corps has traditionally
    focused its foreign language training program on those core languages
    spoken in areas where large-scale military action is either planned or
    anticipated. The small population of marines with heritage foreign
    language skills in the ``less-commonly taught'' languages such as Dari,
    Urdu, and Pashto has been augmented through the Headquarters Marine
    Corps directed action of selectively cross-training existing linguists
    at the DLI, and through the conduct of un-programmed contract language
    courses in a subsequent language. Additionally, as requirements are
    validated, marines are selectively recruited and cross-trained in these
    ``less-commonly taught'' languages during lateral moves into a new MOS
    or during reenlistments.
        During 1999, Headquarters Marine Corps initiated a comprehensive
    review of the Marine Corps' foreign language requirements. As a result
    of this review, the Marine Operating Forces were directed to determine
    their existing and anticipated foreign language requirements in an
    effort to better identify and project both the number of speakers and
    the variety of languages they require. In March 2001, the Director of
    Intelligence (DIRINT) approved a plan to restructure the Intelligence
    occupational field to meet the increase in requirements for speakers in
    ``less-commonly taught'' languages. Implementation of the plan in
    February 2002 resulted in the Headquarters Marine Corps directed
    modification of unit T/Os, leading to the addition of 122 intelligence
    linguist billets in a variety of ``less-commonly taught'' languages.
    The Marine Corps is now executing a 5-year plan to recruit and train a
    sufficient number of marines to fill thesenewly identified billets.
        Following the September 11 terrorist attacks on the United States,
    the Secretary of Defense tasked the Services to identify emerging
    language training requirements to support the OEF campaign.
    Headquarters Marine Corps compiled a list of projected language
    requirements and, in cooperation with the DLI, implemented a training
    plan in December 2001 to satisfy the identified training shortfalls.
    The aggressive assignment of heritage language speakers as translators,
    combined with the quick response of DLI in setting up language training
    courses to meet the Marine Corps' contingency training requirements,
    has allowed the Marine Corps to successfully meet its current
    operational language requirements.
                                     ______

                Questions Submitted by Senator Susan M. Collins

                           WEAPONS--GRENADE LAUNCHER

        10. Senator Collins. General Jones, the Marine Corps Warfighting
    Lab has been a great asset to introduce and prove out innovative
    technologies for the Corps and our Armed Forces. I am familiar with the
    Advanced Lightweight Grenade Launcher/Striker program (MK47Mod 0),
    which is currently being tested at the Warfighting Lab. What can you
    tell me about the Marine Corps' desire to deploy this launcher?
        General Jones. The final configuration of the MK47 has just been
    baselined this month and the Marine Corps Warfighting Lab (MCWL) took
    delivery of its first two fully capable prototype MK47 ``Striker''
    grenade launchers on 5 April 2002. These guns are of the same
    configuration as those scheduled for Operational Assessment (OA) by
    USSOCOM forces at Aberdeen Proving Grounds in May 2002.
        The Marine Corps, via MCWL, will experiment with our two weapons
    and monitor the USSOCOM OA in order to collect the data needed to
    adequately assess and evaluate the MK47's potential to increase the
    combat power of marine units.
        The decision on whether we will deploy the MK47 in the Marine Corps
    will be influenced by: (1) the performance of the MK47 during USSOCOM's
    OA; (2) U.S. Marine infantry units' operational assessment of the MK47s
    during 4th quarter fiscal year 2002 and 1st quarter fiscal year 2003;
    (3) successful development of the air-burst capability for the 40mm
    ammunition for the MK47; and (4) the level of support for the weapon
    from the Marine Corps Infantry Operational Advisory Group.
        The role MCWL plays in the Expeditionary Force Development System
    (EFDS) is to find technology that appears to have potential for
    increasing combat capabilities, then prove through experimentation,
    whether or not that technology is worth pursuing. Once experimentation
    and assessment determines the MK47's potential, the decision will be
    made on whether the weapon is a candidate for acquisition and
    deployment.

         [Whereupon, at 5:11 p.m., the subcommittee adjourned.]

    DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR
                                      2003

                                  ----------

                            TUESDAY, MARCH 19, 2002

                                   U.S. Senate,
                              Subcommittee on Seapower,
                                   Committee on Armed Services,
                                                        Washington, DC.

    MAXIMIZING FLEET PRESENCE CAPABILITY AND SHIP PROCUREMENT AND RESEARCH
                                AND DEVELOPMENT

        The committee met, pursuant to notice, at 2:39 p.m., in
    room SR-222, Russell Senate Office Building, Senator Edward M.
    Kennedy (chairman of the subcommittee) presiding.
        Committee members present: Senators Kennedy, Landrieu,
    Reed, Warner, Sessions, and Collins.
        Majority staff member present: Creighton Greene,
    professional staff member.
        Minority staff members present: Judith A. Ansley,
    Republican staff director; Gary M. Hall, professional staff
    member; Ambrose R. Hock, professional staff member; Thomas L.
    MacKenzie, professional staff member; and Carmen Leslie Stone,
    special assistant.
        Staff assistants present: Daniel K. Goldsmith and Andrew
    Kent.
        Committee members' assistants present: Brady King and
    Christina L. Martin, assistants to Senator Kennedy; Frederick
    M. Downey, assistant to Senator Lieberman; Marshall A. Hevron,
    assistant to Senator Landrieu; Elizabeth King, assistant to
    Senator Reed; Benjamin L. Cassidy, assistant to Senator Warner;
    Arch Galloway II, assistant to Senator Sessions; Kristine
    Fauser, assistant to Senator Collins; and Derek Maurer,
    assistant to Senator Bunning.

        OPENING STATEMENT OF SENATOR EDWARD M. KENNEDY, CHAIRMAN

        Senator Kennedy. The subcommittee meets this afternoon to
    discuss Navy shipbuilding programs intended to meet Navy and
    Marine Corps future operational requirements.
        We will also discuss actions that the Navy might take to
    maximize fleet presence capability in support of theater combat
    command requirements to have naval forces on station and
    operating in the areas of responsibility.
        We will hear from two panels of witnesses today. Rear
    Admiral Miles B. Wachendorf, Director of the Strategy and
    Policy Division in the Office of the Chief of Naval Operations
    will discuss the options for increasing forward presence on the
    first panel.
        On the second panel, we will hear from two witnesses about
    Navy shipbuilding and research and development (R&D) programs:
    The Hon. John Young, Assistant Secretary of the Navy for
    Research, Development, and Acquisition, and Vice Adm. Michael
    Mullen, Deputy Chief of Naval Operations for Resources,
    Requirements, and Assessments.
        While some may put the primary emphasis on the shipbuilding
    portion of today's hearing, you should give due attention to
    the important matters of ways to provide the forward deployed
    forces that our area combat commanders need to support their
    operations.
        For the shipbuilding portion of the hearing, the focus will
    be on the modernization of the Navy fleet. I believe that the
    fundamental problem that we must deal with in this subcommittee
    is achieving the proper level of modernization to support
    tomorrow's readiness.
        Without adequate modernization, we could be faced with a
    situation of having forces without necessary capabilities, or
    we could even be in a position of trying to support theater
    combat commander requirements with forces that are too small to
    meet their requirements.
        We all know that our men and women in the Armed Forces will
    respond admirably in any crisis, just as they are doing to
    support the operations in Afghanistan. However, over the long-
    term, we cannot count on making up for inadequate shipbuilding
    investment by asking our troops to stay on much longer
    deployments. They are spending less time at home with their
    families between deployments.
        This leads the subcommittee to the desire of ensuring that
    we are getting the most forward presence capability from our
    fleet, whatever the number of ships in the fleet. We owe it to
    our sailors and marines to ensure that we are doing all we can
    to avoid resorting only to longer deployments or reduced at-
    home time when we are trying to meet forward presence
    requirements.
        We also owe it to the taxpayers to ensure that they are
    getting the maximum presence capability for every dollar
    invested in the Navy. To that end, Senator Sessions and I sent
    a letter to the Secretary of the Navy and the Chief of Naval
    Operations asking them to review the question of whether
    additional operational days could be made available to the
    regional commanders in chief without increasing the number of
    ships and without increasing the length of 6-month deployments.
    Without objection, we will include a copy of that letter in the
    record of the hearing.
        [The information referred to follows:]

        Senator Kennedy. We will look forward to hearing first from
    Admiral Wachendorf on our range of options that we might
    consider for increasing the level of forward presence for a
    given fleet size.
        On the second panel, we will hear from John Young and Vice
    Admiral Mullen on the shipbuilding construction and development
    program's fiscal year 2003 budget request.
        Everyone can agree that we will continue to need strong
    naval forces to protect our interests in many areas overseas.
    We may have to change our approaches in some areas, but we will
    still need to ensure that we do not lose the very real
    advantages that our Navy and Marine Corps so skillfully
    provide.
        Within that context, there are a number of issues,
    programs, and areas that we should discuss with the witnesses
    today including: attack submarine programs and force levels,
    including the option of converting the Trident ballistic
    missile submarines to submarines that carry the cruise
    missiles; aircraft carrier modernization efforts, including the
    Navy's evolutionary development of new capabilities and
    technologies to increase future capability and reduce demands
    on our personnel and a planned delay of the CVN(X) program;
    surface combatants, including the DDG-51 Aegis destroyer and
    the Navy's program to field the next generation of combatants
    and DD(X) program; amphibious ships, including the delays and
    cost increases in the LPD-17 amphibious transport dock program;
    and the budget request to continue the incremental funding for
    the LHD-8 amphibious assault ship.
        These are all important issues, and we will look forward to
    hearing your testimony today and working with you as we work
    our way through them.
        Before I recognize the witnesses, I would like to recognize
    Senator Sessions.
        Also, it is a great pleasure to welcome the Ranking Member
    of the full committee, Senator Warner.
        Senator Warner. Thank you, Mr. Chairman.
        Senator Kennedy. Whenever a Navy flag goes up, John Warner
    is present. Any of us who think we have any authority or power
    around here are always reminded that John Warner was the
    Secretary of the Navy. [Laughter.]
        As good a job as he does in making sure we have a strong
    national security defense, we always know that he tips a little
    toward the United States Navy. We are always glad to have him
    here.
        Senator Warner. I am thankful for the very generous remarks
    of my Chairman. [Laughter.]
        You and I have jockeyed in the position of Chairman and
    Ranking Member of this subcommittee for many years.
        Senator Kennedy. Right.
        Senator Warner. I miss it. But I am here today to follow
    this with great interest, and I thank you for the introduction.
        Senator Kennedy. Thank you.
        Senator Warner. We are delighted to have our friend here,
    Senator Sessions.
        Senator Sessions. Thank you.
        Senator Kennedy. I welcome the chance to work with you on
    this subcommittee and enjoy the chance to work with Senator
    Sessions on this subcommittee, as well as Senator Collins, who
    is a fellow New Englander.

                   STATEMENT OF SENATOR JEFF SESSIONS

        Senator Sessions. Senator Kennedy, thank you for your
    leadership. We are, indeed, sharing some basic insights from
    this side of the table about ``How can we improve the Navy?'' I
    think it can be boiled down to this. We are going to need to
    increase the number of ships that we are building. We simply
    cannot maintain the level we are at over any extended period
    without substantially reducing our Navy.
        At the same time, hopefully today, we will have some
    questions answered. I believe we can expect to have some ideas
    that we could utilize more efficiently with the ships that we
    have.
        We all know that it is critical that the United States be
    able to project its power around the world. We have not been
    able to do that at any time within recent years without the
    Navy's power helping us to do that, or really being the
    cornerstone of it.
        I believe it is an investment we need to make. I will just
    note that the 2001 QDR states that the baseline force was
    assessed across several combinations of scenarios on the basis
    of a new defense strategy. The capabilities of this force were
    judged as presenting moderate operational risk, although
    certain combinations of warfighting and smaller-scale
    contingency scenarios present high risk.
        The 2001 QDR, of course, which carries with it that
    moderate or high risk includes the following ships: 12 aircraft
    carriers, 12 amphibious ready groups, 55 attack submarines, and
    108 surface combatants. I hope that the witnesses today can
    reveal the additional risk incurred by proposing a Navy ship
    force in this budget which is lower than the moderate to high
    risk included in the QDR.
        [The prepared statement of Senator Sessions follows:]
                  Prepared Statement by Senator Jeff Sessions
        I thank our Chairman, Senator Kennedy, for scheduling today's
    hearing to explore Navy and Marine Corps ship requirements, research
    and development, procurement, and improving the operational days
    underway for the ships in service.
        The September 2001 Quadrennial Defense Review (QDR) states that the
    baseline force ``was assessed across several combinations of scenarios
    on the basis of the new defense strategy and force sizing construct,
    and the capabilities of this force were judged as presenting moderate
    operational risk, although certain combinations of warfighting and
    smaller-scale contingency scenarios present high risk.'' The 2001 QDR
    force which carries with it that moderate to high risk includes the
    following ships:

            12 Aircraft Carriers
            12 Amphibious Ready Groups
            55 Attack Submarines
            108 Active Surface Combatants
            8 Reserve Surface Combatants

        However, the fiscal year 2003 budget request and accompanying
    Future Years Defense Program (FYDP) would not build sufficient ships to
    recapitalize the QDR force level both in the near- and long-terms. The
    Congressional Research Service (CRS) calculations indicate that the
    average number of ships required to be procured to maintain the QDR
    force of about 300 ships will rise to 11.2 per year starting in 2008 if
    the proposed number of ships in the FYDP are procured. That average
    would increase from the present benchmark of 8.9 ships per year. This
    vividly points out that instead of progressing toward recapitalizing
    the fleet, the proposed budget request has the opposite effect. I hope
    our witnesses today can reveal the additional risk incurred by
    proposing a Navy ship force which is lower than the moderate- to high-
    risk force included in the QDR.
        Navy witnesses have testified before the full committee that
    because the average age of ships is about 19 years, ship
    recapitalization is not the highest Navy recapitalization priority.
    Aircraft recapitalization is the highest Navy recapitalization priority
    and recapitalization of both aircraft and ships is a lower priority
    than readiness. It should be considered that using average age to make
    investment decisions may not be prudent because problem areas may be
    masked. For instance, there are ships in the Navy being used past their
    projected service life while others are retired well before the end of
    their projected service life. The average age calculation does not
    include shortfalls such as the fact that the Navy has fewer ships than
    required by the QDR.
        Given the budget request for new ship construction and a general
    agreement that the proposed funding is not adequate to recapitalize the
    fleet, we should look for ways to maximize future investments while
    ensuring we get the most out of investments already made. Senator
    Kennedy and I sent a letter to the Secretary of the Navy and the Chief
    of Naval Operations asking them to explore ways to increase the number
    of days that ships can operate. We suggested that, at a minimum, the
    Navy should explore the following four focus areas to determine if
    additional operational days could be provided to the regional
    Commanders in Chief:

             Assign additional ships and submarines to homeports
            closer to their areas of operation. This is sometimes referred
            to as forward homeporting.
             Assign a ship to remain in a forward area of
            operations and rotate crews. This is sometimes referred to as
            dual crewing, such as occurs with ``blue'' and ``gold'' crews
            on ballistic missile nuclear powered submarines (SSBN).
             Retain ships to the end of their full service life.
            This could support a Navy that is a capability and presence-
            based force rather than a threat and presence based force.
             Preposition additional ships in a forward operating
            areas.

        Mr. Chairman, if there is no objection, I would like our letter of
    March 1, 2002 entered into the record of this hearing.
        In addition to maximizing operational days for ships in the fleet,
    we should look for ways to maximize the impact of investments in this
    budget request. There are eight specific issues that we should evaluate
    as possibilities for maximizing the investment impacts.
        First, decommissioning ships which still have combat capability 10
    years prior to the end of their service life generates a requirement to
    build about eight more ships than are included in the CRS calculations
    for ship construction requirements. Therefore, we should consider the
    possibility of retaining these ships to the end of their service lives.
        Second, although Congress put in place a law that authorizes the
    Navy to save taxpayer dollars by buying submarine components in
    economic order quantity, this request does not propose such savings
    measures. Therefore, we should explore possible problems with the
    enacted legislation and additional possible legislation to maximize the
    Navy's buying power.
        Third, this request delays procurement of CVN(X) resulting in a 1
    year slip and a higher cost of the ship. Therefore, given the recent
    reminder of how valuable these ships are, and to save taxpayers
    dollars, we should explore a funding profile to save dollars and
    restore the 2013 delivery of the ship.
        Fourth, it is questionable whether or not the destroyer industrial
    base, including second and third tier vendors, can be maintained with
    the proposed destroyer construction included in this request.
    Therefore, we should review the requirement to maintain the industrial
    base and, if required, consider action to ensure its viability with a
    thorough understanding of implications for the cost of DDG-51 ships and
    future destroyers.
        Fifth, this FYDP misses an opportunity to take advantage of a
    construction option for a required auxiliary ship. This missed
    opportunity could lead to higher costs and/or stretched-out delivery
    dates. Therefore, we should explore possible fiscal year 2003 action
    that would ensure the Navy exercises the option if taxpayer dollars
    would be saved.
        Sixth, the proposal for a construction start for a new class of
    command and control ships does not appear to take advantage of
    established ship production lines of similar ships. Therefore, the
    subcommittee should determine what funding is required in fiscal year
    2003 to ensure the Navy has the information required to adjust the
    construction to a schedule most advantageous to the taxpayers while
    providing the ship at the required time.
        Seventh, it is not clear whether or not taxpayers are paying twice
    for technology efforts for future ships that are funded out of separate
    ship programs. Therefore, we should explore ways to remove restrictions
    that may exist and/or provide the means to ensure information on like
    efforts is shared between programs.
        Eighth, the delay in DD 21/DD(X) further delays providing required
    fire support for the Marine Corps. Therefore, the subcommittee should
    explore alternatives for rapidly fielding the 155 millimeter shipboard
    gun.
        Transformation is a continuous effort which is inherent in the
    research and development for future platforms and equipment, how
    equipment is used, the approach to training, and the mind-set of
    personnel. Although there are specific programs that can be described
    as transformational, this type of description is only applicable for a
    given point in time. Therefore, while being aware of transformation
    aspects of programs, our overarching focus should be on how the
    programs will contribute to carrying out the defense policy goals of:

             Assuring allies and friends;
             Dissuading future military competition;
             Deterring threats and coercion against U.S. interests;
            and
             If deterrence fails, a decisive defeat.

        The Navy and Marine Corps team are vital to carrying out all four
    of these policy goals and ships are the means by which the Navy and
    Marine Corps meet the challenge described in the QDR of ``projecting
    and sustaining U.S. forces in distant anti-access environments.''
        The performance of our men and women in the war on terrorism across
    the globe and their dedication to do what it takes to complete their
    mission is inspiring and we owe them, each day, our continuing
    gratitude and full support.
        I welcome our witnesses today and look forward to their testimony.

        Thank you, Mr. Chairman, for your leadership.
        To follow my statement, I ask that Senator Collins'
    statement be inserted into the record.
        [The prepared statement of Senator Collins follows:]

                  Prepared Statement by Senator Susan Collins

        Thank you Mr. Chairman. Seapower is among the most essential
    components of our national security posture and an important part of
    ensuring the U.S. meets its global commitments. Currently, our naval
    forces are providing immediate access and forward deployed combat power
    24/7 in support of Operation Enduring Freedom. Further, our naval
    forces are the United States' only sovereign global warfighting
    capability. As Admiral Clark so eloquently stated, ``Our naval forces
    do not need a permission slip to operate worldwide.''
        These capabilities, and the fact that two-thirds of the world's
    surface is covered by ocean, make a compelling case for robust naval
    forces. Forward presence, however, requires that the ships are
    available and ready to deter, fight, and win.
        The facts are clear--the U.S. Navy has shrunk from a fleet of 594
    ships in 1987, to approximately 318 ships today. During this same
    period, ship deployments have increased more than 300 percent. Navy
    officials have repeatedly warned that the fleet is stretched perilously
    thin and needs to be increased to at least 360 ships to meet its
    present mission requirements. The CNO has candidly testified that there
    is a strong and justifiable cause to increase our naval force structure
    to around 375 ships.
        These factors coupled with the global war on terrorism and
    defending America's national security, demand that we recapitalize our
    Navy today. President Bush and his administration have identified this
    global war on terrorism and homeland security as our highest
    priorities. As we in Congress work with the Bush administration to
    defend freedom, I will continue to encourage the replenishment of our
    naval fleet as the cornerstone of this global defense.
        The fiscal year 2003 budget provides $48 billion in overall defense
    increases, yet the Navy's budget provides for the procurement of fewer
    ships than last year. The SCN procurement numbers speak for
    themselves--$11.96 billion in fiscal year 2001, $9.5 billion in fiscal
    year 2002, and $8.19 billion in fiscal year 2003. The CNO's written
    statement before the full committee clearly states the problem,
    ``Current aircraft and ship procurement rates will, if continued,
    result in a Navy numerically smaller than today's, and significantly
    smaller than that needed to sustain the war. Such a fleet would be an
    invitation to greater operational risk and international instability.''
        The Congressional Research Service (CRS) warns us that at the
    present rate of procurement, we are facing a 47 ship-deficit and we
    will not be able to sustain the QDR critical force levels. The fact is
    that we must procure 8.9 Navy ships per year to maintain, not grow, a
    310 ship-Navy. Uneconomic procurement rates, including only two DDG-51s
    in the fiscal year 2003 budget, increase costs to the Navy and
    jeopardize our industrial base and its skilled workforce. If we are not
    committed to reversing the decline in shipbuilding rates this year, in
    a year of a $48 billion increase, then when?
        We cannot continue to defer this investment year after year. We are
    just slipping deeper and deeper into a procurement hole, and that is
    why I have proposed to look at all of the resources available in the
    Department of the Defense's budget, including the Defense Emergency
    Response Fund (DERF), or contingency fund, to begin to address this
    egregious shortfall.
        As I have stated before, numbers do matter. The number of new
    construction ships under contract 10 years ago was 110, while only 36
    ships are under construction today--this is a 66 percent decline in
    ship construction. Furthermore, while the number of ships authorized to
    be built 10 years ago was 15, today the budget request before us
    authorizes a mere 5 ships, a continued decline over the last 4 years.
        In recent years, we have been consistently under funding the naval
    shipbuilding and research and development accounts--the future force is
    at risk. Therefore, I am convinced there will be a need for even
    greater reliance on our naval forces as joint operations emerge to
    provide sovereignty to our fighting forces. Proof is in our current
    operations in Afghanistan. For these reasons and many others, I share
    the view of many of my colleagues that we must recapitalize our fleet
    to ensure that America retains her maritime power in the 21st century.
        I look forward to working with each of you in the weeks and months
    ahead to bring the procurement rate to an adequate number that will
    meet the needs of our Nation's security and provide more stability for
    our critical but increasingly fragile naval shipbuilding industrial
    base. I welcome any thoughts or comments you would care to offer the
    subcommittee on these complex issues. Thank you, Mr. Chairman.

        Senator Kennedy. Thank you.
        Admiral, we will be glad to hear from you.

      STATEMENT OF REAR ADM. MILES B. WACHENDORF, USN, DIRECTOR,
      STRATEGY AND POLICY DIVISION, OFFICE OF THE CHIEF OF NAVAL
                               OPERATIONS

        Admiral Wachendorf. Thank you, Chairman Kennedy, Senator
    Sessions, Senator Collins, Senator Warner, and members of your
    staff. It is a pleasure to be here.
        My name is Admiral Ben Wachendorf. I am the Director of
    Strategy and Policy on the CNO staff. I'm here to discuss with
    you some alternatives, some of which are already being
    implemented, to increase the presence of Navy combatant ships
    in forward areas, and to discuss other issues that are being
    studied.
        I have submitted a written statement for your review and,
    subject to your approval, I would like it to be a part of the
    record. It includes some answers to questions that were asked
    in my invitation to testimony.
        It also includes some information concerning some manning
    initiatives we are doing. Those were included because some of
    the ways to get more ships into forward areas longer is to
    increase the manning. We want to do that as a zero sum gain
    without asking for end strength increases. So we are trying to
    be smarter about the way we use our sailors.
        I would also like to just thank you and the committee
    personally for your support of the men and women of the United
    States Navy. The support Congress has given our most valuable
    asset, our people, is heard loud and clear on the deck plates
    of the United States Navy. I am very grateful for it.
        Subject to any other questions you have, I will be happy to
    answer any questions you have for me.
        Senator Kennedy. Thank you very much.
        [The prepared statement of Rear Admiral Wachendorf
    follows:]

            Prepared Statement by Rear Adm. Miles B. Wachendorf, USN

        Chairman Kennedy, Senator Sessions, and distinguished members of
    this sub-committee, thank you for the opportunity to testify today. It
    is a privilege to report to you on the status of several initiatives
    the Navy is either undertaking or exploring to increase our forward
    naval presence, and we appreciate your continuing support.
        Today, over 32 percent of our naval force is deployed in support of
    Operation Enduring Freedom (OEF) as well as normal deployments to
    maintain our global presence. Our sailors and marines continue to
    reflect the best of what America has to offer, and we are extremely
    proud of their efforts. Today more than ever we need to explore
    potential alternatives for enhancing our ability to fulfill
    requirements placed on our naval service. Earlier this month the Vice
    Chief of Naval Operations, Adm. William J. Fallon, discussed several
    initiatives the Navy is exploring to alleviate the strain on our
    current OPTEMPO. OPTEMPO has an important impact on current readiness.
    U.S.S. John C. Stennis deployed weeks early in order to support
    maritime operations in the Arabian Sea and U.S.S. Theodore Roosevelt,
    recently spent 160 consecutive days at sea without a port visit. This
    increased OPTEMPO is a concern because over time it could yield
    negative effects on retention, as well as increased wear and tear on
    equipment. While our commitment to limiting deployments to 6 months in
    peacetime remains firm, we recognize that we are in a war of
    indeterminate duration. Therefore, we currently are exploring plans to
    ameliorate the effects of this increased OPTEMPO by a variety of means.
    My goal today is to provide background information on several
    deployment posture and manning initiatives. While some are in the early
    stage of development and others have been studied at length, we are
    encouraged that several initiatives have the potential to improve not
    only OPTEMPO, but also our ability to provide additional forward
    presence with the current force:

    Issues addressed:

        1. Assign additional ships and submarines to homeports closer to
    their areas of operations. This is sometime referred to as forward
    homeporting.

        Not a new alternative, but one that must be considered is the
    homeporting of naval forces overseas. The largest example of this is
    our forward deployed naval force (FDNF) homeported in Japan. The Kitty
    Hawk battle group, with her embarked airwing and support ships along
    with the Essex amphibious ready group (ARG) are designed to provide a
    nearly continuous presence in the Western Pacific capable of executing
    missions across the entire spectrum of conflict from peacetime presence
    to major war. Over the past few years, there have been numerous studies
    completed that have looked at other potential ports within WESTPAC, the
    Indian Ocean and Arabian Gulf to homeport naval forces. The results of
    these studies are all similar; there are numerous ports throughout the
    region that have the capability and infrastructure to conduct port
    calls, but the required infrastructure to support the permanent
    homeporting is not available and would require substantial investment
    by the U.S. and the host nation. The studies also reflect zero
    potential to increase the size of the force that is forward deployed to
    Japan. Additionally, required training facilities and formal schools
    are not available overseas to meet all the requirements. The workup
    training opportunities such as fleet exercises with an aircraft carrier
    and battle group would be greatly diminished by homeporting away from
    the majority of the fleet. Exercises are the backbone for preparing
    ships and crews to conduct required operational missions. Finally, the
    loss of stateside quality of life would be significant for those
    families, both civilian and military who would be required to relocate.
    This could have an adverse impact on retention.
        However, the U.S. territory of Guam offers a near-term potential to
    increase our forward presence in the Western Pacific. Beginning in
    September 2002, the first of three refueled 688-class submarines will
    be homeported in Guam. This will provide approximately 90 additional in
    theater mission ship days per year over what could be provided by three
    submarines homeported in the Eastern Pacific. Ship and maintenance
    support is in place with the submarine tender currently homeported in
    Guam. Pier facilities and weapons support facilities are adequate. The
    housing and family support facilities on Guam will quickly support the
    first homeported SSN, and will require minor upgrading in addition to
    the current renovation plans to support all three newly assigned
    submarines.
        Personnel/training requirements will result in flying portions of
    each crew to Pearl Harbor or to Yokosuka for schools and team trainers
    at a cost of about $300,000 annually per submarine. Crew maximum tour
    length is set at 3 years and is within existing overseas assignment
    guidelines. Submarines will need to shoot exercise torpedoes about
    every 15 months to maintain proficiency. This may be accomplished by
    transit back to Pacific Missile Range Facility, Hawaii (cost is about
    15 days of operations and engagement) and by scheduled exercises in
    Seventh Fleet. Additional transits to Hawaii maybe required for nuclear
    maintenance or dry-docking. Currently, the U.S.S. Frank Cable transits
    to Japan in support of Seventh Fleet ships three times per year for a
    period of about 1 month each time. With Frank Cable's current manning
    she cannot continue this level of support outside the submarine force
    and take on the support of homeported submarines in Guam. In order for
    her to support her current Seventh Fleet level of effort, Frank Cable's
    repair and weapons department manning will be increased to meet the
    additional requirements resulting from the additional three SSNs.
    Current naval forces stationed in Guam include:

             Three SSNs to be completed by calendar year 2004.
             One tender (U.S.S. Frank Cable).
             Four Military Sealift Command (MSC) ships.
             Helicopter Combat Support Squadron FIVE (HC-5).
             Explosive Ordnance Detachment (EOD) One.
             Naval Special Warfare (NSW) Group One.
             Five pre-positioning ships off Saipan

        2. Assign a ship to remain in a forward area of operations and
    rotate crews. Although not typically rotated in forward areas, the dual
    crewing or ``blue/gold'' crews on SSBN are an example.

        Crew rotation (sometimes referred to as ``Sea Swap''): Extending
    ship deployment length while swapping crews in mid-deployment appears
    to offer significant potential for improving on-station time without
    increasing either OPTEMPO, PERSTEMPO, or to a great extent, ship wear
    and tear. Rotational crewing/sea swap is a variation on the multi-
    crewing themes referred to as ``Horizon'' suggested by the CNO
    Strategic Studies Group, Center for Naval Analyses (CNA), and others.
    The primary difference is that where most multi-crewing options involve
    more crews than ships; for example: 3 for 2 (CNA), 5 for 4 (Horizon), 2
    for 1 (SSBN) (``Blue/Gold''), or several for 2 (MCM-1), the basic unit
    of crew rotation (1 for 1) is two or more similarly configured ships
    with an equal number of similarly trained crews.
        The crew rotation scheme would extend individual ship deployments
    from 6 months to a nominal 11.5 months or longer while holding crew
    deployments at 6 months. At the 5.5-month point in the cruise, a relief
    crew from a sister ship is flown into theater to man the deployed ship.
    After turnover, the relieved crew is flown back to CONUS where it mans
    the non-deployed unit of the operational pair. The deployed unit
    remains deployed for a total of 11.5 months or longer before being
    relieved on station in traditional fashion. Essentially, sea-swapping
    crews reduces ship transit--using instead airlift to replace the crew.
    The 6-month PERSTEMPO limit is not exceeded for any crew.
        In the case of deployments from the West Coast to the Arabian Gulf,
    eliminating every other transit provides an additional 2 to 2.5 months
    of on-station time for each pair of ships without necessarily changing
    turnaround ratio or OPTEMPO for either crew or ship. Three pairs of
    ships in sea swap can create up to 20 additional on station ship months
    over 4 years when compared to the current deployment methods. The
    advantages of this concept are:

             Significantly improved efficiency in meeting CINC
            requirements for forward deployed units;
             No crew is without a ship and no ship is without a
            crew. This should improve training opportunities and
            contingency surge capability;
             Crews stay with the same ship for approximately 2
            years and with same operational pair throughout their sea tour,
            providing an improved sense of ownership compared with other
            rotational crewing plans;
             Ships return to CONUS often enough to reduce or
            eliminate the need to do major maintenance overseas;
             The capability to do major maintenance and upgrades
            (without disrupting deployment schedules) improves because
            ships enjoy longer periods in CONUS between cruises;
             Turnaround ratio--Ship 2.91:1/Crew 2.75:1; Deployment
            time--Ship 11.5 months/Crew 6 months; and
             Additional ship months generate opportunities for
            multi-ship action groups to meet emerging challenges or
            additional ship availability for employment opportunities to
            support Homeland Security/Defense.

        The Navy is currently developing a pilot program to employ the
    ``crew swap'' concept in an effort to determine the true costs and
    potential savings, while developing lessons learned to provide a firm
    analytical basis for recommendations to either expand the concept or
    look for other alternatives. In maintaining the focus on the fleet and
    the impacts that a shift in deployment methods may have, Commander,
    Surface Forces Pacific has been designated the lead for development and
    implementation of the pilot program. The current plan will employ
    Spruance-class destroyers beginning this summer with the deployment of
    the Lincoln CVBG and then expand to Arleigh Burke-class guided missile
    destroyers later this fall with the deployment of the Constellation
    CVBG. Both plans have the potential to gain an additional 100 days on-
    station for a net gain of 200 days. This will reduce total transits to
    four for six ships which cover four battle group deployment cycles. It
    is from these two experiments that we will be able to determine
    recommendations.

        3. Retain ships to the end of their full service life by investing
    in the support funding needed to keep them serviceable. For example, we
    might decide that keeping DD-963s in active service might make sense
    for the capabilities they provide (such as presence and ASW
    capability), rather than retiring them because they are not adequate to
    meet certain threats (because they do not have the very latest anti-air
    warfare systems).
    Force Structure
        The Navy must balance between transforming and building the future
    Navy to meet emergent warfighting requirements and operating the
    current force to meet existing missions, while remaining within the
    President's budget. While new ship procurement decisions dominate force
    structure recapitalization, the retention or decommissioning of ships
    has the greatest near-term impact on force structure size and
    composition. The key element in decisions to extend or contract the
    service life of a ship class is affordability versus capability.
    Service Life Considerations
        The service life of our warships has a significant impact on force
    structure. Extending service life by delaying decommissionings can
    maintain or increase force structure and, correspondingly, accelerating
    decommissioning can reduce force structure. The decision to extend or
    accelerate decommissioning of a class of ships is based on a cost/
    benefit analysis that focuses on the affordability of the platform and
    what warfighting capabilities it brings to the joint commander's tool
    box. In some cases, such as Ticonderoga (CG-47)-class cruisers and
    Perry (FFG-7)-class frigates, it is considered prudent to invest in
    conversion and modernization of ships to extend their service life. In
    other cases, such as Spruance (DD-963)-class destroyers, it makes more
    sense to decommission the ships.
    Historical Service Life vs. Estimated Service Life
        Sophisticated combat systems must keep pace with advancing threat
    technology. As the combat systems and the hull, mechanical and
    electrical (HM&E) systems of a platform age both must be maintained and
    upgraded, but the combat systems upgrades tend to be more extensive and
    expensive. Additionally, as ships age, the cost of operating and
    maintaining the ships can increase depending on the overall condition
    of the vessel. For example, if a ship has had a number of maintenance
    actions deferred over the course of its operating life, and it has
    experienced high OPTEMPO, the cumulative effects on the ship can lead
    to higher operating and maintenance costs. This must be considered in
    investment decisions. In making service life decisions, warfighting
    capability gained from an upgrade is compared to the cost of the
    upgrade and the operations and maintenance cost of the ship. Unless
    modernized, a surface combatant class' historical service life (HSL) is
    shorter than the estimated service life (ESL) established via
    instruction. For destroyers, HSL is 20 years compared to an ESL of 35
    years. In the case of frigates, HSL is 20 to 22 years compared to an
    ESL of 30 years.
    Cruiser Conversion
        The Navy has made the commitment, through the conversion program
    for Ticonderoga (CG-47)-class cruisers. The program will upgrade the
    Aegis combat systems and install warfighting improvements including
    area air defense commander (AADC) capability, and upgrades to the Aegis
    baseline to accept sea based ballistic missile defense capability
    (pending Missile Defense Agency (MDA) approval and funding of
    development), land attack, and force protection. Additionally, service
    life extension work including smart ship upgrades all electric
    alteration, weight and moment adjustments, and distributive systems
    improvements. Modernizing these ships will make them more capable to
    project theater-wide offense and defense while providing an additional
    20 years of service life beyond the HSL.
    Frigate HM&E and Self-Defense Upgrades
        In the fiscal year 2003 budget submission, Perry-class frigates
    will receive HM&E upgrades to reduce their operating costs and extend
    their service life. Additionally, the combat systems will be upgraded
    with selected ship self-defense technology. These ships with their
    relatively small crew size and low operating costs provide affordable
    warfighting capability.
    Destroyer Decommissionings
        DD-963 class is expensive to maintain because of its large crew
    size, age, and provides only marginal warfighting capability due to the
    ship's older and more focused mission combat system. These ships had an
    earlier modernization with the introduction of the vertical launch
    system (VLS), which extended the combat system relevant life beyond the
    historical 20 years. However, while the ships still provide some
    warfighting capability with two 5,,/54 guns and an anti-submarine
    warfare (ASW) suite, the higher manning requirements and operational
    costs do not justify additional funds for further modification or
    extended service life. New DDG-51 class ships being introduced to the
    fleet provide substantially more capability and an ample number of VLS
    tubes to support current Tomahawk inventory. It is not cost effective
    to keep the DD-963 class in the inventory. The currently structured
    decommissioning schedule will save the Navy about $1.25 billion over
    the Future Years Defense Program (FYDP) that can be applied to
    transformational efforts such as electric drive, advanced networks and
    stealth technology which will bring new warfighting capabilities to the
    fleet.
        However, we are funding the LPD-4 extended sustainment program.
    This program was developed to improve the dependability of HM&E systems
    and living conditions for the sailors and embarked marines.
    Additionally, it is expected that LHAs will be required to serve a
    median 42 years, significantly beyond their ESL of 35 years, before
    being replaced by the LHA(R) ships currently being studied.
        The requirement for amphibious ships is driven by two factors,
    amphibious ready group (ARG) deployment cycle and Marine Corps lift
    requirements. Today's 12 ARGs are the minimum required to meet presence
    requirements and each ARG consists of an LHA/LHD, LPD, and LSD. Overall
    lift is currently below the 2.5 Marine expeditionary brigade (MEB) lift
    programmatic goal and full requirement of 3.0 MEB lift. LPD-4s (Austin-
    class) will be required to serve an average of 41.5 years, well beyond
    their original ESL of 30 years, in order to meet amphibious
    requirements until the LPD-17 class ships deliver.

        4. Preposition additional ships in forward operating areas that
    would be maintained by very small crews during normal circumstances.
    This concept would be analogous to the manner in which certain Ready
    Reserve Force (RRF) ships are kept ready to begin operations in just a
    few days.

        The current Ready Reserve Force is maintained in a 10-20 day
    activation status, with no caretakers on board. The ships undergo a sea
    worthiness inspection by USCG every 2 years. The ships in a Reduced
    Operating State (ROS) have 4-5 day windows, as well as 30-45-90 windows
    for underway; the 4-5 day ships are manned with civilian mariners to
    maintain the ships propulsion system. The role of these ships is to
    support U.S. Transportation Command (TRANSCOM) and sealift for current
    OPLANS. The ROS and RRF ships do not have complex C\4\ISR systems or
    weapon systems that are maintained. The time required to develop
    minimum standards of crew proficiency for combat operations will take
    longer than the transit time saved.

        5. Other Studies and Initiatives:
    Manning Initiatives
        The ability to optimize the manning of our ships also will provide
    efficiencies. Within OPNAV and the fleet we are in the process of
    exploring several alternatives that will enhance our ability to man our
    ships and squadrons at optimum levels during the inter-deployment
    training cycle (IDTC) and scheduled deployment. These efforts involve
    or will involve the units within two CVBGs/ARGs and six other ships
    affecting additional CVBGs. The number of sailors directly involved or
    temporarily moved by these initiatives will exceed 2000 as manning
    levels for each are adjusted to the requirements for their respective
    initiative. These initiatives will span timelines from 15 months to 36
    months as the concepts are formulated, execution strategies developed,
    plans executed, and final data analysis is complete. The fleets are
    aggressively exploring these manning alternatives to address such
    issues as requirements determination, retention and personnel
    development, and increased operational flexibility. These efforts
    highlight the transformational research that the fleets are doing to
    help identify the true requirement.
        Fleet Manning Experiment (FME) led by Commander, Atlantic Fleet
            (CLF) and Commander, Pacific Fleet (CPF)
        The CLF/CPF FME is a bottom-up fleet review of manpower
    requirements, which identifies the true manning requirement in today's
    infrastructure and warfighting environments. The FME is not an exercise
    in shipboard manning reduction. The period of this effort is from July
    2001 to July 2003. FME test units are contained within the U.S.S.
    George Washington CVBG and Nassau ARG. These units (and the CVBG/ARG as
    a whole) will be evaluated during their IDTC, deployment and post
    deployment maintenance periods for the effects of these changes.
    Manning adjustment began in January 2002. In order to achieve the FME
    levels for rating/Navy enlisted classification (NEC) and pay grade on
    the test units, about 570 sailors are being moved within the CVBG,
    where possible. As an example of the cooperation and success of these
    efforts, general detailed (GENDET) manning for the three players
    requiring the majority of additional non-designated personnel will be
    met in May of this year. This has been an exceptional effort to
    identify the true requirements by all involved and will have
    significant impact on the way we determine manpower requirements for
    our sea units in the future.
        Optimal Manning Project (OMP) led by Commander, Naval Surface Force
            Pacific (CNSP)
        The CNSP OMP is a bottom-up review of the billets authorized (BA)
    on a DDG and smart CG in an effort to develop, from the fleet
    perspective, the ship class manning requirements for the future
    including minimal manning concepts. Reductions will be based upon
    policy and procedural changes (internal and external), technology
    insertions and shore infrastructure changes. Although most of its
    assumptions are the same as the FME, it explores a number of potential
    shore infrastructure changes that can be used to reduce overall at sea
    manning requirements. The most significant changes involve the current
    day functions and workloads associated with maintenance and personnel
    administration. The period of this effort is roughly the same as the
    FME. The OMP test units will also be evaluated during their IDTC,
    deployment and post deployment maintenance periods for the effects of
    these changes as in the FME. OMP manning reduction resulted in a
    decrease of 95 billets. Manning reductions to the OMP levels began in
    November 2001.
        Mobile Bay (CG-53) and Milius (DDG-69) are on track in the IDTC and
    have operated successfully at sea. An ashore maintenance detachment,
    which was established in October 2001 using consolidated OMP-BA excess,
    is supporting additional ship maintenance periods other than their
    parent commands. An administrative detachment using consolidated OMP-BA
    excess is conducting pay and personnel issues from ashore.
        Accelerated Sailor Achievement Program Pilot (ASAP) led by
            Commander, Atlantic Fleet and Chief of Naval Personnel (CNP)
        ASAP is directed at improving GENDET attrition and retention by:
    (1) by starting the sailor mentorship process early in the recruiting
    phase and continuing it through the sailors first sea tour and; (2)
    providing an absolute advanced school opportunity following a 24 month
    initial sea tour. Early association of the new sailors to a final
    parent command will begin as they are recruited for a specific CVBG/
    ARG, assigned earlier in the process to units within that CVBG/ARG and
    personally and professionally developed during their at-sea time for
    successful application to an advanced training school of their choice.
    We believe that this early incorporation of the young sailor into his
    first at-sea team with a very tangible reward at its completion will
    provide significant gain in this area as well as exercise our covenant
    leadership responsibilities to them. The time period for this effort
    will extend for about 36 months. The ASAP test units are tentatively
    within the Truman CVBG.
        a. Initial manning analysis indicates that 300-350 young sailors
    will participate in this pilot.
        b. This pilot holds great promise in getting at the heart of GENDET
    losses: early mentoring, command concern for the individual's well
    being and personal and professional development. It addresses near-term
    and long-term readiness by investing in our people at a point where
    career decisions are made. Although too early to tell whether this
    pilot will be a success, from a leadership perspective, this seems like
    a winner. In the final assessment, our determination of return on
    investment (ROI) should not be limited to a straightforward cost
    analysis.
    Long Deployment Initiative
        This concept involves deploying a unit for 9 months while rotating
    a contingent (about a quarter of the crew) back stateside every 2\1/4\
    months so that we can maintain our forward commitments while not
    bearing the entire burden on the backs of our sailors. This concept
    requires an increase in assigned personnel of 25 percent. The time
    period for this effort will extend for about 15 months. This concept
    has the potential to define the way ahead in sailor employment. By
    manning sea-going units to 125 percent of current levels, we keep
    sailors at sea while providing the ship with the excess capacity to
    allow their sailors the time to pursue their personal and professional
    development. At the current level of 160,000 sailors at sea in combat
    units, 40,000 billets would need to be realigned from other activities.
    We could increase sea tours for our sailors without adversely affecting
    their quality of life (QOL) or careers. Longer sea tours would increase
    unit readiness through crew stability, increased experience level,
    surge capacity, and increase skill sets onboard through shore side
    training opportunities, etc. QOL for these sailors would improve with
    additional manpower to address shipboard duties, additional opportunity
    to fully participate in the transformation envisioned by the Navy's
    Task Force Excel, training opportunities to improve shipboard skills
    with temporary additional duty (TAD) assignments to base security
    units, ship intermediate maintenance activities (SIMA), personnel
    support detachments (PSD), clinics, etc.
        I hope the background information provided today on several
    deployment posture and manning initiatives was helpful. Some
    initiatives are in the early stages of development and others have been
    studied at length. I remain optimistic that the initiatives presented
    will improve OPTEMPO and our ability to provide additional forward
    presence with the current force.

        Senator Kennedy. Admiral, the Navy has said it has to have
    these 7.6 aircraft carriers in the active fleet in order to
    support one carrier on-station full-time in the Northern
    Arabian Sea. This reflects assumptions of keeping the CNO-
    mandated operational tempo goals for down times, among others.
        The Navy also indicates that having the carrier homeported
    in Japan allows the Navy to have only 1.7 carriers in the
    active fleet providing a continuous presence of one carrier in
    the Western Pacific.
        So in your discussion of forward homeporting options, you
    discussed a number of vessels such as submarines and other
    support ships in Guam. However, you made no mention of
    relooking at options to homeporting carrier battle groups in
    locations other than the current group in Japan. I would say
    there are numerous ports throughout the region that have that
    capability and infrastructure. You have ports of call, but
    required infrastructure to support current and homeports, if
    unavailable, would require substantial investments by the U.S.
    and the host nation.
        Could you give us some idea what the estimates are and what
    the costs would be required to establish the appropriate
    infrastructure?
        Admiral Wachendorf. Sir, I'll take that to give you the
    exact numbers for the record, if I may.
        [The information referred to follows:]

        The Navy has conducted some preliminary studies to determine the
    infrastructure support required to homeport a carrier battle group
    (CVBG) in locations other than Japan. These studies estimate that the
    range of construction costs are from $3 to $6 billion, requiring
    between 7 and 10 years to complete the necessary environmental studies
    and subsequent construction. Upgrades to existing civil infrastructure
    such as roads, power, water, and waste disposal to support the
    approximately 25,000 military sailors, civilian personnel, and
    dependents could add billions more. These estimates did not account for
    the cost of land acquisition, so the availability of land was a
    constraining factor in some locations.
        The annual recurring costs to operate and support the CVBG would
    also be significant. The Navy has not entered into any formal
    discussions with potential host nations so the political feasibility of
    alternate sites cannot be determined yet.

        In general, the infrastructure required to support a
    carrier is much larger than for the submarines. In the case of
    Guam, we do presently have sufficient infrastructure with the
    submarine tender there that is capable of also supporting
    surface combatants, to accommodate three nuclear attack
    submarines: the first of which will arrive in September of this
    year, the second in October, the third to be decided, but soon
    after.
        I have discussed this with Admiral Fargo, Commander of the
    Pacific Fleet, as recently as last week. He is of the opinion
    that no further infrastructure would be needed to accommodate
    those and perhaps a few more submarines and a squadron of
    surface combatants, perhaps with missile defense capabilities,
    as those issues come online.
        For the aircraft carrier, however, there is a lot more
    infrastructure and dredging that would be required. We
    certainly could do that, but it is our intention right now to
    substitute with modern ships, whether they be aircraft carriers
    or amphibious or cruiser/destroyer force ships, in Japan with
    the latest technology, but to maintain in Japan the same number
    of ships we have there.
        A pure, very extensive support facility was built in
    Singapore, and we are now using that as a good place for ships
    to resupply. For some of the manning concepts to increase
    presence, we are considering crew swapping alternatives. It is
    our opinion that we would not need to locate a lot of intensive
    industrial support or maintenance facilities in places like
    Singapore or other locations, but we could change out the crews
    there if the ships could stay longer. That would have the
    increased presence.
        Senator Kennedy. Coming back to the aircraft carriers, you
    gave me a good survey answer about the issue. But let us just
    take the aircraft carriers now. In terms of looking at other
    kinds of ports, this is not a new issue.
        Admiral Wachendorf. No, sir.
        Senator Kennedy. Looking at decisions back in 1993, we had
    the Defense Department doing studies at that time. They were
    non-responsive to these kinds of things. We have additional
    pressures now, particularly with this budget and with this
    administration.
        So I am interested in what the costs are in terms of the
    forward part. What are we looking at? There are a number of the
    old options. We looked at Rota, which was around for a number
    of years. Crete was there, along with Perth, Australia. These
    are all harbors or ports that we had talked about at other
    times.
        I am just wondering if you are looking at this, the options
    of forward porting and, if so, what are the cost
    considerations? If not, why not? How is this balanced against
    the development of the battle carrier group? It is around $20
    billion.
        What are the kinds of thinking that is going on? How would
    you evaluate it? When was the last time you did evaluate it?
    What are the costs out there? Is it the instability in those
    regions? Is it a greater kind of danger, or is it just cost?
    What are the factors when we have the extraordinary figures in
    Japan of 1.7 carriers versus 7.6 we are keeping in the Northern
    Arabian Sea.
        Admiral Wachendorf. Yes, sir. Your numbers are exactly
    correct, sir. I would point out that we have maintained a 2.0
    carrier presence, at times 3.0 including the carrier from
    Japan, in the war on terrorism off of Afghanistan. We have
    plans to surge more carriers. To answer your question more
    specifically, there are some regional stability concerns.
        Japan has no more room for additional carriers in their
    infrastructure.
        Senator Kennedy. I understand that.
        Admiral Wachendorf. So we would have to look at places like
    Guam. It was the fleet commander's assessment that they are not
    ready to accommodate something the size of a carrier itself,
    but they could accommodate the surface combatant squadron and
    the squadron of submarines.
        The next leading contender would probably be Australia,
    because we could leverage some of their naval bases, which have
    existing facilities. We would still have to expand on them to
    accommodate our nuclear carriers, which Australia does not
    have. But they have expressed a willingness to do so.
        Senator Kennedy. Well, I know that Perth was at least one
    of the options.
        Admiral Wachendorf. Yes, sir.
        Senator Kennedy. But what I am looking for or asking is
    whether we have done a review or whether this is an ongoing and
    timely review.
        Admiral Wachendorf. Yes, sir. It is the----
        Senator Kennedy. It would seem to me that you would want
    both the review in terms of the costs in this versus what are
    going to be the costs outside of it.
        I would think you are also looking at whether you need the
    length of time in these particular regions. Do you know what it
    costs in terms of keeping the aircraft battle group in the
    Indian Ocean for 12 months? Why 12? Should it be nine?
        What are the capabilities in those regions? Do you need all
    the battle group, or some or less? Do you need all the
    personnel on those aircraft carriers with the particular
    challenges they are facing, or somewhat less?
        What I am interested in, sir, is what kind of thinking is
    going on in the Navy as we are looking at these budgets so that
    it is not just a bottom line, which we are already conscious
    of, in terms of what is happening in shipbuilding, but also
    these other kinds of alternatives as well.
        I am wondering whether the Navy is looking at these kinds
    of factors and how they are evaluating them to see if they are
    even sure there are good reasons.
        Some may be good reasons to do it, other reasons why they
    should not be done; what I am most of all looking at is to see
    whether that kind of process has been moving----
        Admiral Wachendorf. Yes, sir.
        Senator Kennedy.--ahead. I am somewhat troubled that I am
    not sure that it has been.
        Admiral Wachendorf. Two comments on that, Senator.
        Senator Kennedy. Yes.
        Admiral Wachendorf. The Center for Naval Analyses did some
    exact studies with those costs, and I will make sure they are
    available to you for homeporting options and the costs that
    would be incurred for different locations and the
    infrastructure required. I do not have that information in
    front of me.
        [The information referred to follows:]

        The following costs are provided for homeporting a four ship
    surface action group in Guam. These cost are the very lowest estimate.
    Due to Guam being a territory and infrastructure is already established
    it is the least expensive of the western pacific ports. Costing data
    for other areas in the Western Pacific are not currently available and
    are assumed to be much greater than the below Guam costs.

                            [In millions of dollars]
    Family Housing............................  109 (100 percent renovation)
    Bachelor Quarters.........................                            90
    Ship Repair Facilities....................  0 (Ship repairs in Japan/HI/
                                                                      CONUS)
    Wharf Upgrade.............................                            10
    Utilities.................................                             4
    Dredging..................................                            20
    Supply....................................                            16
    Ordnance..................................                            18
    Morale Welfare and Recreation.............                             5
    Schools...................................                            17
                                               -----------------------------
      Total...................................                    374 to 375

        The following is a breakdown of cost areas.

             Family Housing (FH) (625 Units)

                     Renovation cost = $175,000 per unit
                    625 = $109 million (includes infrastructure upgrades)

             Bachelor Quarters (BQ) (625 PN = 6-100 Personnel BQs)
            $144,000 per space  625 PN = $90 million

             Ship Repair Facility (SRF) (Renovation required =
            Assume 50 percent of Plant Replacement Value (PRV) of existing
            building. No new construction required)

                     -50 percent of PRV $289 million = $145 million
                    (does not include drydock; wharf & utilities upgrades
                    addressed separately)

             Wharf Upgrades (Romeo, Sierra, Tango)

                     From Regional Shore Infrastructure Plan (RSIP)
                    Waterfront Study, P-433 Bilge Oil Water Treatment
                    System, Steam, fiber optics, (Romeo/Sierra): $7.1
                    million
                     Underwater Inspection Report (1998) identified
                    $1.2 million for structural repairs; factor for new
                    finds, deterioration, escalation (100 percent): $2.4
                    million

             Utilities

                     Electrical--Sierra & Romeo piers renovated in
                    1999. Tango pier damaged by earthquake and has no
                    electrical. Electrical power, lighting, communications
                    as follows: Romeo $0.2 million, Sierra $0.6 million,
                    Tango $1.7 million. Total = $2.5 million
                     Water/sewer: $1.0 million

             Supply

                     Cold storage--Increase 1700 sm: $7.7 million
                     Warehouse--Increase 2700 sm: $7.8 million
                     Fuels--Assume ok

             Ordnance

                     -3 new missile magazines @ $6 million: $18
                    million

             Morale Welfare and Recreation

                     Increase 20 percent (club, Child Development
                    Center (CDC), gym, theater, bowling alley)
                     Assume 1 new CDC for 94 children = $2 million
                     Assume 20 percent expansion of gym = $3
                    million

             Schools

                     Increase 20 percent of MCON for High School
                    (HS) and Elementary/Middle School (ES/MS),
                     HS: Current MCON is $35 million  20
                    percent = $7 million
                     ES/MS: Current MCON is $50 million
                    20 percent = $10 million
                     Total = $17 million

        Another piece, sir, you mentioned it in your comment about
    longer deployments, one of the concepts we are looking at looks
    very attractive in theory. In practice, there are some
    challenges to overcome.
        If we were to take the traditional deployment length, which
    your numbers of 7.6 assume for 6 months, it takes about a month
    for a West Coast ship, surface, submarine or aircraft carrier,
    to get to the Strait of Hormuz if that is the area of interest,
    and it certainly is one of them.
        Then it takes a month to get it back. So that leaves 4
    months of operating time in a 6-month deployment, because 2
    months are spent in transit. If we were to increase the length
    of that deployment to 9 months and spend the same transit time
    over and the same transit time back, the on-station time would
    be increased from 4 to 7 months. That is a 75 percent increase
    in on-station time.
        One of the concepts that I discussed in my statement is to
    increase the manning of the ship by 25 percent and every
    quarter of a 9-month cycle, about every 10 weeks, rotate a
    quarter of the crew through, so that the concerns that you
    mention in your opening statement could be addressed with
    respect to family separation and others.
        That would allow a 75 percent increase in on-station time
    for a 25 percent manpower increase. That would make that very
    attractive.
        There are some problems here, because of the training that
    has to be done--the specialized equipment that these sailors
    and officers have to operate--but that experiment is going to
    be initiated this fall, sir.
        Senator Kennedy. My time is up, but I will be coming back
    to the Horizon Program, the----
        Admiral Wachendorf. Sir, that came out of the Horizon
    study, which was conducted by the War College, sir.
        Senator Kennedy. OK.
        Admiral Wachendorf. The Horizon concept is a little
    different. There it involves an extra crew for a given number
    of ships. We are looking at implementing that in the mine
    countermeasures force, because the crew sizes for those ships
    are smaller, sir, and we will get better data as we rotate
    those around.
        Senator Kennedy. I am going to come back to this later on.
        If you could then, let us know what you are thinking and
    what you see as the advantages and disadvantages of these. If
    you have Blue/Gold or Horizon, whatever suggestions you do
    have. I understand there are a number of other kinds of
    options, which are also being looked at. We would like to know
    what your thinking is.
        Is it cost-related? Are we going to balance off these costs
    versus the OPTEMPO in terms of the personnel? At the
    grassroots, we want to be able to make some judgments on these
    as well.
        Maybe it would be best if either Senator Sessions and I
    were to try and frame this in the form of a letter so you have
    a more precise inquiry and we could get as good information as
    we can get.
        But the point I just want to mention is that I think it is
    important for us to know what these various options are, what
    is your own evaluation of them, and what these costs are
    entailing.
        We are always mindful, obviously, of the amount of time
    personnel are away from home. They obviously need the training
    and they need it to be efficient, but we would be very
    interested in that.
        Have you considered the length of time that you leave these
    carrier battle groups on station? Is there some greater
    advantage in having 12 months, or 9 months, or is this
    difficult because of both strategic and tactical defense kinds
    of issues?
        Do you need the same ships in each of the battle groups
    when they go to the different places in the world? I mean,
    there is obviously different threats that come from Iran and
    Iraq, and missiles that come from them and capabilities than
    you might have from other places.
        Do you look at those when they actually assign these battle
    groups? Is that a consideration of it? If so, why? If not so,
    why not? Maybe I can define that a little bit as well. If you
    want to make a brief comment, then I will yield to the next
    Senator.
        Admiral Wachendorf. Yes, sir. I will make a short answer to
    that. You are correct, sir. One of the challenges we must
    overcome here is the diversity of within the surface combatants
    and other ships of the Navy. For example, there are 22
    different baselines of weapon systems on surface combatants in
    the Navy today.
        So as we rotate ships around and modernize that ship in
    Japan right now, the Kitty Hawk, it is 47 years old. It is one
    of the oldest ships in the Navy, but it has state of the art,
    what we call, C\4\ISR electronics, so it would allow it do the
    work that it did during the war on the whole setting up of
    Kandahar and that SOF mission there. She is getting ready to go
    back again with the airwing embarked instead of the rotary wing
    SOF forces that operated out there just a couple of months ago.
        So those ships that go, we try to make sure to have the
    best we can, the same common architecture of electronics. But
    we have too many different ones. It costs us too much overhead
    in the systems commands to maintain those.
        One of the things as we go toward the future--and Admiral
    Mullen can tell you more about this--is striving for open
    architecture, where the human interfaces, the displays, and the
    button pushing are more or less constant. It is the software,
    as technology grows, because we want to harvest our strategic
    advantage in information superiority, that is what changes.
    That will allow more interoperability.
        One other comment, sir. The traditional view was when a
    battle groups goes, they stay together and we do not change out
    components. One of the initiatives that we are going to be
    starting this summer does exactly that. It breaks that paradigm
    by taking three 963 destroyers, leaving one, the U.S.S.
    Fletcher, forward deployed for 18 months, and then taking two
    other crews, not extra crews, from two other like ships with
    the same capabilities, and rotating them through at 6 month
    intervals.
        When we do that over an 18 month period, we change, let's
    say, four of those transits, each a month long or 122 days of
    presence time over 18 months. There are some cultural things,
    that traditionally a crew thinks their ship is the best in the
    whole Navy. That is what we train them to do, and that is a
    good thing. So they are going to have to get used to thinking
    this other ship is a pretty good one, too, because there are
    other challenges.
        But we are trying to break that up to get more efficiency
    out of the force we have, sir. I will be glad to take for
    action, as you discussed, a more detailed response.
        [The information referred to follows:]

        The carrier battle group (CVBG) is a combat formation of ships and
    aircraft, which comprises a principal element of our national power
    projection capability. It is the essential foundation of our ability to
    conduct operations as envisioned in the most recent edition of our
    strategic concept. It includes capabilities sufficient to accomplish a
    variety of situations short of war. Simply put, our mission in
    peacetime is to conduct forward presence operations to help shape the
    strategic environment by deterring conflict, building interoperability,
    and by responding, as necessary, to fast breaking crises with the
    demonstration and application of credible combat power.
        Tasks which are critical to the success of initial crisis response
    missions are assumed to be undertaken in non-permissive environments
    characterized by multiple threats including, but not limited to,
    advanced anti-ship missiles, third/fourth generation fighter/attack
    aircraft, advanced electromagnetic sensors and jammers, modem cruise
    missile-equipped surface combatants, and attack submarines (both
    nuclear and diesel types). The CVBG is intended to be a flexible naval
    force that can operate in shallow, and narrow, waters or in the open
    ocean, during day and night, in all weather conditions, and under
    restricted emission control.
        The primary objective in defining the CVBG capabilities and
    composition is to provide the combatant commanders with adequately
    balanced capabilities to deal with a variety of present and future
    threats. The objective is to train and equip forward deploying forces
    which are balanced, sustainable, flexible, and, most importantly,
    responsive to the requirements of the supported commanders and able to
    carry out tasking from the Secretary of Defense.
        Most CVBGs are constructed nearly identical to ensure the right
    mixes of capabilities to respond to any threat, regardless of the
    geographical location. Training focuses on the most likely areas where
    the ships will be operating, but the skill sets ensure all are flexible
    enough to operate anywhere in the world on short notice when so tasked
    by the Secretary of Defense or President.

        Senator Kennedy. Thank you.
        Senator Sessions.
        Senator Sessions. Thank you.
        Admiral Wachendorf, did I correctly interpret what you are
    saying, that the Navy is, in fact, giving increased emphasis on
    these kinds of potential savings that this is something
    unusual, other than just a normal routine constant evaluation
    that I know you do?
        Admiral Wachendorf. Yes, sir. Once before, I believe about
    5, 6 years ago, we tried a variation of the Horizon concept
    that Senator Kennedy referred to. It did not work out very
    well. I attribute that to faulty leadership. It was not the
    sailors on the crews. It just was not managed well. We had
    those left behind, those forward deployed, there was too much
    segregation, and other management problems. We are learning
    from those experiments, and we are moving forward with this DD
    experiment in the fall and a similar one with the Arleigh
    Burke-class later in the year, sir. So in my 30 years of
    uniformed service to the country, I have never seen that
    before.
        Senator Sessions. I have no doubt it will get a lot of
    complications. I just believe that in the modern world we are
    in, at the level our private sector's sophistication, they
    achieve and utilize the resources that are given to them. If
    you work at it as you will, we can gain some advantage, whether
    it is 5 percent, 10 percent, in the number of actual ships out
    there available in an emergency, ready for action in the areas
    of the globe that we need to be in with the current structure.
    Then that still does not keep us up where we need to be in
    terms of the total number of ships. One of the things that is
    interesting is your testimony indicating that a cost benefit
    analysis has led the Navy to the conclusion that Spruance-class
    destroyers should be decommissioned prior to their reaching 35
    years of service life as they were projected to serve. Yet
    decommissioning those ships brings the Navy below the 116
    surface combatants which the QDR states are needed to provide
    moderate to high-risk national security.
        My question is: would you provide the subcommittee by the
    end of this month, if possible, the cost/benefit analysis
    regarding the Spruance-class destroyers, the Ticonderoga-class
    cruisers, and the Oliver Hazard Perry-class, too.
        Second, I am concerned that the Navy is not maintaining the
    QDR base force structure while it decommissions these ships
    that do still have life. This generation will have a
    requirement to build additional ships.
        Did your cost/benefit analysis determine the additional
    risk to the national security associated with dropping to 108
    surface combatants?
        Admiral Wachendorf. Sir, for your first action, we will
    have all of it to you by the end of the month, sir. We have
    done that, as you may know.
        [The information referred to follows:]

        The cost-benefit analysis regarding Spruance-class destroyers, the
    Ticonderoga-class cruisers and Oliver Hazard Perry-class frigates based
    on annual programming costs for ships operations and support follows:
    CG $34.8 million; DD $28.3 million; FFG $20.5 million. Therefore, it
    costs approximately $8 million per year more to operate a DD over an
    FFG.
        The decision to reduce the service life of the DD-963 class was
    based on affordability in the context of today's threat environment.
    DD-963 class ships are significantly less capable than the more modern
    and more survivable, Aegis-equipped DDG-51 class ships. The higher
    manning requirements and operational costs are a main driver in the
    decision process. The current average age of the DD-963 class is over
    20 years and the DDG-51 average age is 6 years. The DD-963 is more
    costly to maintain from a purely maintenance perspective, not to
    mention combat system modernization costs to make the class effective
    against today's threats. The decision to drop below to 116 was a short-
    term reduction to allow for the development and construction of more
    capable ships. Although in the short term we drop below the QDR force
    level of 116 we emerge with a more capable force beginning in fiscal
    year 2010.

        The cruisers and the FFG-7 class are being extended to the
    maximum life. You are also correct that the cost benefit
    analysis indicated in the case of the 963s that it was not
    affordable to do so. We will put that in writing to you. A
    brief summary of that has to do with the operating costs of
    those ships.
        They have 50 percent more crew than the FFG-7 Oliver Hazard
    Perry-class does. They also have five feet more draft. What we
    found is that the FFG-7 class is very valuable to us for
    tailored missions like maritime interdiction operations that we
    are doing in the northern part of the Gulf where the water is
    quite shallow. They also have helicopter capability, which is a
    valuable asset and their fuel costs are lower.
        One of the liabilities of both those ships is that they do
    not have a volume search radar like the cruisers do. So we want
    to take as much money as we can afford to invest--and Admiral
    Mullen will correct anything I say improperly--but to have a
    strategic plan that looks towards the future where we can have
    reduced manning ships, or crews of a smaller size.
        The DD(X) has approximately one-quarter of the crew size of
    the current 963 ship. We need to get there and get to the
    common architecture of combat systems that I mentioned before.
        Another factor is stealth. We need to bring the enemy that
    we know is going to come after us in close where our defensive
    systems can be most effective. To do that, we have to minimize
    the acoustic, the radar, the electromagnetic, and other
    signatures that these ships put out. It would be cost
    prohibitive to do that to the 963 class.
        We are using the FFG-7 class as a tailored mission ship
    until the littoral combatant ship comes online, and DD(X). We
    are using the cruisers for air defense and air radars. But we
    will go into more detail for you as you requested, sir.
        Senator Sessions. Well, have you analyzed the most
    effective way to stay with the QDR number of 116 ships? Are you
    sure you have made the best analysis to try to meet that
    requirement? If we cannot get enough new ships, why are we
    decommissioning the serviceable ships?
        We saw one, the O'Brien, that served ably in the Persian
    Gulf, that is set to be decommissioned soon.
        Admiral Wachendorf. Senator, you are exactly correct. These
    are hard choices to make. One point that comes in and weighs
    this investment balance of today versus tomorrow is the life-
    cycle cost of these ships.
        When the Coast Guard was doing an in-depth study of the
    deep water project, looking for their future, they determined,
    and Navy data supported, that on almost all warships, 60
    percent of the life-cycle cost is manpower, historically.
        We are trying to reduce the cost of operating our Navy by
    going towards smart ship technologies and reduced manning
    initiatives, as I discussed in my testimony, to bring that cost
    down, so that we can make a better investment on our available
    resources. To do that, that is part of this analysis, but we
    will put that all in writing for you, sir.
        [The information referred to follows:]

        Smart ship is the introduction of commercial technologies for
    reduced ship manning. The results of implementing seven smart ship
    technologies has led to the reduction of 21 personnel with an annual
    cost savings of $1.01 million per ship. Currently there are six Aegis
    cruisers that have smart ship integrated ship control consists of
    integrated bridge system, damage control quarters, machinery control
    system, wireless internal communications system, fuel control system,
    integrated condition assessment system, fiber optic local area network
    and on board trainer for engineering, damage control, and voyage
    management.

        Senator Sessions. Thank you. I do not know the answer to
    that. It may be that you are correct, that celebrating the
    transition to the more modern ships is worth the decline in the
    short-term of our combatants on the sea. But I think it is a
    question we have to ask.
        Admiral Wachendorf. Yes, sir.
        Senator Sessions. I mean, we are looking at a rather
    substantial reduction in life expectancy of those ships we are
    running now.
        Thank you, Mr. Chairman.
        Senator Kennedy. Senator Landrieu.

                 STATEMENT OF SENATOR MARY L. LANDRIEU

        Senator Landrieu. Thank you, Mr. Chairman. Thank you very
    much for calling this hearing and I appreciate having this
    opportunity. I have a full statement for the record, but I
    would like to excerpt a few things, just for comments, and then
    I have a couple of questions.
        With 32 percent of our naval force deployed in support of
    Operation Enduring Freedom and deployments to maintain our
    global presence, it is evident to me and to many Senators,
    actually, Senator Collins has spoken about this before many
    times, that we need to maintain a more robust shipbuilding
    program.
        The Navy has given the U.S. the ability to project forces
    in the most inhospitable lands, and that is only going to
    continue. It is the duty of this subcommittee, under the able
    leadership of our Chairman and Ranking Member, to equip our
    sailors and marines with a modern fleet to conduct this war.
        It is crucial that the Navy increase its ship procurement
    program to bring it in line with the minimum needed to maintain
    a fleet of 300 ships or more. But it seems to this Senator that
    no matter who is in the White House, when the Navy comes before
    Congress, they state that the Navy plans to address the
    shortfall in ship procurement the next year or the year after.
    Unfortunately, it seems like the outyears never quite come.
        I know that there are budget constraints, but I am going to
    submit this, Mr. Chairman, to the record in hopes that we can
    continue with your leadership to push on this shipbuilding
    program, because it is very important for us even as the
    threats change and emerge. It becomes almost more important to
    be able to operate in inhospitable areas, as well as to deploy
    pretty quickly.
        [The prepared statement of Senator Landrieu follows:]
                 Prepared Statement by Senator Mary L. Landrieu
        I would like to thank the Chair for holding this hearing today on
    such an important topic. I would also like to thank the panel for
    taking the time to come here today and testify.
        Thousands of years ago, when the Greeks were facing an imminent war
    with the Persians, they were advised to build a wall of wood to protect
    the city of Athens. The walls of wood were not walls surrounding a
    city, but the wooden navy of Athens. The Greeks embarked on a robust
    shipbuilding program, and soon had a Navy that was superior to the
    Persians. Their victory over the Persians ultimately came at sea, with
    the Greek navy forming an invincible wall of wood around the Greek
    homeland.
        Today, we find ourselves like the Greeks did so many years ago.
    Instead of a wall of wood, America depends upon a wall of steel to
    protect her from her enemies. This wall of steel is the United States
    Navy. Time and again, it has been the Navy and the Marine Corps that
    has erected an unbreakable wall around us. But defense is only half of
    the Navy/Marine Corps equation. The Navy projects American power to far
    away and inhospitable lands. If we do not embark on a robust
    shipbuilding program, gaps will develop in our wall of steel. As we
    increase the operational tempo of our Navy, we are decreasing the
    amount of funds allocated for ship procurement. This creates a great
    danger to America as it executes a long and difficult war on terrorism.
    No nation on Earth can equal our Navy, and it is the duty of this
    subcommittee to keep it that way.
        Current funding for the Navy's shipbuilding program is creating a
    growing gap in that wall of steel, which will threaten our ability to
    project sea power in future years. For the past few years, the Navy has
    not met its own goal of procuring 8 to 10 ships per year. In the last
    fiscal year, the Navy only procured 6 ships, and in fiscal year 2003
    the Navy is only procuring 5 ships. This is half the number of ships
    required to sustain our present force levels and is $5 billion below
    the Clinton administration's 2001 request of $11 billion for 8 ships.
    According to current projections, this gap in our defenses will not be
    effectively plugged until fiscal year 2007, when the Navy is projected
    to procure 11 ships.
        With over 32 percent of our Naval force deployed in support of
    Operation Enduring Freedom and deployments to maintain our global
    presence, it is evident that we need to maintain a robust shipbuilding
    program. The Navy has given the U.S. the ability to project forces in
    the most inhospitable lands. It is the duty of this subcommittee to
    equip our sailors and marines with a modern fleet to conduct this war.
    It is crucial that the Navy increase its ship procurement program to
    bring it in line with the minimum needed to maintain a fleet of 300
    ships. Each year, it seems that no matter who is in the White House,
    the Navy comes before Congress to state that the Navy plans to address
    the shortfall in ship procurement next year, or the year after.
    Unfortunately the outyears never come.
        I would like to close by simply pointing out that our current
    procurement levels create a gap in our wall of steel. Because it is
    difficult for our enemies to confront us conventionally, they must look
    for weaknesses in our defense. No doubt they will identify this gap in
    our naval wall, and they will exploit it. We must embark on a robust
    shipbuilding program to ensure that these gaps do not occur, and to
    maintain a modern naval fleet.

        Senator Landrieu. I have one or two questions. I wanted to
    follow up on your crew swapping pilot----
        Admiral Wachendorf. Yes, ma'am.
        Senator Landrieu.--and just to lend my support for that
    concept.
        I know that all change is difficult, and there are cultural
    changes associated, but on the Readiness and Management Support
    Subcommittee and on some other subcommittees, Mr. Chairman, we
    have really tried to focus on maximizing our deployments while
    giving people enough time at home, enough time resting, which
    is really a quality-of-life issue, as our marines and sailors
    struggle to find time with their families and to have some real
    down time with the increased operations.
        I want to say that I really encourage that kind of
    creativity in terms of ways that we can get our guys and gals
    home and give them a little more time with their families and
    some down time. If that would work, I would encourage you to
    continue it.
        In addition, I want to commend you for your comments about
    trying to, and I may be paraphrasing here, but standardizing
    your hardware----
        Admiral Wachendorf. Yes.
        Senator Landrieu.--so that we can continue to take the best
    of our research and development and take some things off-the-
    shelf. But if our hardware stays the same, it cuts down on our
    training and really makes our whole operation more efficient.
    We are seeing those efforts made across the board, and I really
    do commend you for that.
        I would just ask a question, given the new thrust of our
    efforts in terms of really facing this new and emerging threat,
    different than the threats that we faced in the past, because
    fighting this war on terrorism requires new strategies, new
    equipment.
        How did the Navy argue to the administration, or how did
    you help to frame the debate about what the Navy needs to,
    basically, position itself to be a real tool in our arsenal to
    fight terrorists? What were the arguments that you are making
    either to us or to the administration or to the general public?
    Because I would like, for one, to hear some more about that.
        Admiral Wachendorf. Yes, ma'am. Thank you for your kind
    words. I think the short answer to your question is that we are
    no longer in the threat-based environment. We argue for a
    capabilities-base. Our strategy is such that we do not know
    exactly where we are going to fight. We do not know what the
    rules of engagement are.
        I am struck by a classmate of mine from the Naval Academy
    who is an admiral. Who would have thought that on Labor Day a
    year ago, this admiral would be riding horseback with 800
    people, 700 miles inland, going up against fixed machine guns
    and rocket propelled grenades? He is the SOF commander for
    CENTCOM. Thank goodness that he had four F-14s right in front
    of him mowing the grass in a cavalry charge that prevailed in
    Mazar-e Sharif.
        Senator Kennedy. Well expressed.
        Admiral Wachendorf. We cannot predict that kind of thing.
    But we want to make sure that we have combat credible forces as
    we did 24 hours after the planes hit the Pentagon and the World
    Trade Center. We had two carrier battle groups, and we had a
    classified number, but an impressive number, of Tomahawk
    missiles, and an amphibious readiness group on-station ready to
    strike. So that is the kind of capability we want to go after.
        One other comment, Senator, about the common combat systems
    and why that is important not only for crew swapping and
    interchangeable kind of things, but in reducing the overhead I
    spoke of in our systems command and training commands and
    elsewhere, it facilitates the use of simulators. The Navy is
    going to be world class in simulators so that we can still
    maintain the quality of life as best we can for our sailors who
    spend long times away from home.
        But when they come back to their homeports, and this is
    part of the infrastructure question which related to Senator
    Kennedy's question, we want to have the facilities. There is no
    substitute for going to sea. I do not want to leave you with
    that point.
        But we could do a lot better job at training our sailors on
    the state-of-the-art skills they need to go into harm's way
    right in their own home port without taking the whole carrier
    battle group underway. That is part of this crew swapping and
    the Horizon concepts.
        Senator Landrieu. My time is up, but I do want to tell the
    Chairman that I have heard a lot of this discussion about
    switching from threat-based to capability-based. I really think
    we need to be really clear about what that means, and if we can
    actually afford what we are talking about. I am just very
    interested in pursuing that.
        I have heard this now on several subcommittees. We have
    always based our budgets on what we perceive the threats to be,
    because we have to be careful and focused with our resources--
    --
        Admiral Wachendorf. Yes, ma'am.
        Senator Landrieu.--ready to defend in whatever ways we can,
    but focused based on good intelligence and good information and
    using your brain about where the threat might come from, so our
    resources are there. It is a little worrisome that I hear about
    this capability-base, because I do not know if we are trying to
    budget to be capable to fight anything, anywhere, anytime,
    terrorists, two theater wars at the same time. So I just want
    to say that.
        Also I would like an update on Vieques when we can get to
    it, but I will come back on the second round.
        Senator Warner. Mr. Chairman, if I might interrupt, that is
    an important question. Why does he not put in the record
    exactly what that definition means from the shipbuilding
    perspective?
        Senator Landrieu. What the difference is when we ask,
    because this is facing us in all of the committees.
        Senator Warner. Sure.
        Senator Landrieu. I mean, we are either building a Navy to
    address the threats as we perceive them, or we are building a
    Navy based on this new term I keep hearing, ``capabilities.''
        But I have always thought we need to build a Navy based on
    the threat that we perceive, and that threat changes and grows.
    We are seeing that before our eyes, and in order for us to make
    you as strong as possible, we have to agree on what that threat
    is. Then I would just like to ask you that, for the record.
        Admiral Wachendorf. Yes, ma'am. Both Senators raise
    excellent points, and I will take that for action. We will
    staff through a better answer.
        But a short one to your question about the capabilities
    that I could give you now is, the Navy has a program, global
    naval force presence policy (GNFPP), which specifies exactly
    what kind of presence quantitatively in surface combatants, in
    amphibious readiness groups, in carrier presence, in Tomahawk
    strike capability, these come in different flavors, what the
    commanders in chief, the warfighters need on-station, and that
    is the capability that we are assigning up to execute.
        When I suggested that we were going away from a threat
    base, I did not mean to suggest that we were being amorphous,
    or just everything everywhere all the time. We could not do
    that.
        But what we do want to do is support the CINCs, and they do
    describe what their requirements are. That is what we are
    meeting, and we can address that more fully in an answer for
    the record, ma'am.
        [The information referred to follows:]

        The 2001 Quadrennial Defense Review Report outlined a new defense
    strategy that is built around the concept of shifting to a
    ``capabilities-based'' approach to defense. That concept reflects the
    fact that the United States cannot know with confidence what nation,
    combination of nations, or non-state actors will pose threats to vital
    U.S. interests or those of our allies and friends decades from now. It
    is possible, however, to anticipate the capabilities that an adversary
    might employ to coerce its neighbors, deter the United States from
    acting in defense of its allies and friends, or directly attacking the
    United States or its deployed forces. Moving to a capability-based
    force requires the United States to focus on emerging opportunities
    that certain capabilities can confer on the U.S. military over time.
        This applies to shipbuilding, as well. We must focus our ship
    development programs on realizing a transformed maneuver and
    expeditionary force able to overcome anti-access and area denial
    threats.
        The Unified Commanders in Chief (CINCs) influence both the
    requirements and programming process. They propose mission need
    statements, which identify deficiencies requiring material solutions to
    resolve and review every requirement--document for adequacy during
    document staffing prior to approval. The Joint Requirements Board and
    Joint Requirements Oversight Council routinely visit the CINCs
    providing an opportunity for direct CINC input into warfighting
    requirements issues. Additionally, each CINC submits issues for
    consideration into the Chairman's annual program assessment and
    recommendations, as well as provides an annual integrated priority list
    requiring response and consideration in each Service's respective
    budget submission.

        Senator Landrieu. Thank you.
        Senator Kennedy. Could the Senators give me their attention
    for a moment--the purpose of our next hearing, which is on
    April 9 at 2:30, is to receive testimony on Navy equipment
    required for fielding a 21st century capabilities-based Navy in
    review of the Defense Authorization Request. So that is going
    to be the subject of that hearing on April 9 at 2:30.
        Senator Collins.
        Senator Collins. Thank you very much, Mr. Chairman.
        Admiral, I want to follow up on the first question raised
    by my friend from Louisiana. The proposed Navy budget would
    take our surface combatants, the amphibious warships, the
    combat logistics ships, and the mine countermeasures warfare
    ships below the QDR critical force structure levels.
        This leaves the Navy's regional commanders short on
    available naval assets, increases the OPTEMPO, and results in
    even further strain on our already-stretched fleet. Now, the
    CNO has very candidly testified that the naval force structure
    ideally should be in the neighborhood of 375 ships, and today
    instead we are at about, I think it is 318 ships.
        This leads me to the conclusion that the Navy is going to
    have difficulty in meeting the CINC's current commitments. You
    said in your testimony that you are exploring several
    initiatives to alleviate the strain on our current OPTEMPO. You
    are looking at different manning requirements, different
    configurations.
        But in the final analysis, the real problem is that we do
    not have enough ships. In the final analysis, the fact is that
    numbers matter. I guess I would ask you, as much as I admire
    what you are doing to try to deal with the problems that are
    created by past and current and future budgets, what are we
    going to do to ensure that our naval forces can reach our
    recapitalization goal of eight to ten ships per year by the end
    of the Future Years Defense Program?
        Admiral Wachendorf. Well, ma'am, you are exactly right. We
    do not have enough ships. I do not want to leave you with the
    impression that these manning alternatives are going to solve
    the problem and that we can live with the shipbuilding rate
    that we are at right now and get to 375 or get a Navy that has
    the same fighting punch as 375 ships. Vice Admiral Mullen will
    follow me and give you more information on that.
        We want to be right up front and clear that these manning
    things get improvements and efficiencies. I mentioned 4 months
    out of 18, 10, 15, 20 percent improvements. We want to do that
    regardless of the number of ships in the Navy, because that is
    our job to be good stewards to public trust and get the most
    bang for the buck we can.
        We also have to be considering the surge requirements,
    because it is not just what we rotate through 365 days a year.
    If we execute a major operation, that number of aircraft
    carriers as we have in the past could be expected to increase
    significantly, more than double.
        We are ready to do that. It was just last week at the all-
    flag officer conference, Admiral Natter, the commander of the
    Fleet Forces Command in Norfolk, mentioned that the investment
    that the Navy has made in readiness, both aircraft and ships,
    to eliminate the degradation that ships and planes experience
    coming back from deployment, has allowed us to make that surge
    right now.
        We are ready; it is a classified number which we could pass
    to you separately, but to greatly increases our Navy presence,
    because those ships are maintained and ready to go.
        Tough choices were made, which Admiral Mullen can give you
    a better answer on than I. But that is one of the factors that
    went into this shipbuilding decision that we are at right now,
    because we knew we had to fix our readiness problem.
        Admiral Clark has gone on record as saying for a large
    number of years, the Navy has deliberately understated
    requirements and then deliberately underfunded understated
    requirements for readiness accounts, and we have fixed that.
        Senator Collins. I understand those tough choices, but what
    I am worried about is, until we tackle the underlying problem
    that we are not building enough ships, it does not matter how
    creative we are with the manning requirements.
        I mean, it is encouraging that on the horizon with the
    DD(X) program, that we are looking at potentially greatly
    reduced manning requirements that are going to be helpful. But
    let me go on to another issue.
        There is great concern in the community that while the
    morale of our sailors and airmen is now very high among all the
    Armed Forces, that sustained deployments with increased OPTEMPO
    is ultimately going to yield a negative effect on retention, as
    well as increased wear and tear on equipment.
        You mentioned, in your written statement, the U.S.S.
    Theodore Roosevelt, which recently spent 160 consecutive days
    at sea without a port visit. Senator Reed and I visited this
    aircraft carrier in January as part of our trip to Central
    Asia. At that point, the carrier had been at sea for 113
    consecutive days.
        One of the naval officers came up to me, and I thought he
    put it very well. He said, ``We are proud and we are happy to
    break the record this time, but we cannot do it over and over
    and over again.''
        As dedicated and patriotic as our sailors are, there is a
    limit to what we can ask of them. I would ask you, what change
    do you foresee as the most promising of the ones that you have
    looked at to ensure that increased operational days are
    available to the CINCs, and yet we are not ultimately affecting
    the quality of life for our sailors to the point where we are
    going to see recruitment and retention problems once again?
        Admiral Wachendorf. Senator, you are exactly correct. I
    agree with everything you say.
        There was a young lieutenant that just checked into my
    office who came off the Enterprise. She was one of the carriers
    that was on station when this war started. The Enterprise
    stayed out there for 7 months. They were headed home, and then
    went right back on station.
        This young lieutenant is a female graduate of the Naval
    Academy and was the Tomahawk strike planning officer for the
    airwing. She put 84 rounds right on target. Every one of them
    hit. She is better than I ever was as a lieutenant.
        I do not know where we find these people. They are great,
    let me tell you that. When she came back off of deployment, she
    normally would be allowed some stand down or R & R time.
    Because my office in the Pentagon lost 28 people out of the 42
    Navy dead, we were hurting for replacements, and she gave all
    that up just to come in and work with us and helped prepare for
    this brief, as a matter of fact.
        So that is not a direct answer to your question, but I
    wanted you to know that. When I say that people are our
    greatest asset, they really are, better than they ever were. We
    better take care of them.
        I think a more direct answer to your question, Senator,
    refers to the use of simulators. In the past, when we would go
    through this readiness degrade coming back from these long
    deployments, we would take engines out of airplanes so they
    could not fly. We would not give the ships the steaming hours
    they needed to practice their skills, and there would be a
    normal rotation of people.
        We train as a team, not individuals. So to get the team
    together, we would have to get the aircraft carrier, the
    destroyers, and every submarine, everybody to scene, to rehone
    their skills.
        The use of simulators in network-centric warfare where we
    can link up--actually in port, the U.S.S. Coronado is doing
    this in fleet battle experiments right now, using joint
    services--is not unique to the Navy. With integrating overhead
    sensors and other classified programs, we can get great
    training value and we can do it in an 8-hour working day. Then
    they can come home, so they do not have to spend so much time
    away from home. I think that is the key to the future.
        The DD(X) with the standard combat and advanced network-
    centric warfare concepts, littoral combat ship (LCS), the new
    attack submarines, CVNX and LPD-17 are all leveraging this
    technology as best we can. It is very important to the quality
    of life of our sailors.
        Senator Collins. Thank you.
        Thank you, Mr. Chairman.
        Senator Kennedy. Senator Reed.
        Senator Reed. Thank you, Mr. Chairman. I have just one
    question on Admiral Wachendorf's testimony.
        Could you summarize the one or two major points that have
    already emerged from your review of the current operations and
    how it impacts on the fleet presence in the future?
        Admiral Wachendorf. The war on terrorism, sir?
        Senator Reed. Yes.
        Admiral Wachendorf. Yes, sir. We are still studying those.
    As a matter of fact, we have a meeting tomorrow with the CNO
    and with Admiral Mullen and the leadership of the Pentagon. It
    might be a little premature for me to say these are the final
    lists. There are certainly many, and we continue to study them.
        One of them is the importance of combat credible forward
    based naval forces. Sir, I saw you just come in, but we had two
    carriers, expanded to three, an amphibious readiness group, a
    large strike force, and Tomahawk-capable platforms on station
    that were not used. I am sure there is a lot of reasons as to
    political decisions to engage were made, but they were ready 24
    hours after the tragic events of September 11.
        They were not tied to a host nation's port, or flying over
    countries or the need to operate off of air bases. That can be
    a problem as we look at different scenarios here. So that is
    one of the lessons.
        Sovereign combat-credible naval forces are something that
    are a value in this war, and as we look to the future in the
    war on terrorism, that will continue to be the case.
        The other, perhaps less--and this is my personal opinion,
    sir, which will be refined by my chain of command, I am sure--
    is the readiness bathtub. Part of that bathtub of readiness is
    we underfunded the ordnance accounts. Precision-guided
    munitions were 75 percent of all the munitions dropped in this
    engagement. That was the right thing to do. But we do not have
    enough of them. We need to buy more. There are all types.
        The good news is this is a joint ordnance thing, so we can
    get some economic order quantity procurement advantages with
    the Air Force and the Marines. That would be my second one,
    sir.
        Senator Reed. Thank you very much, Admiral.
        Thank you, Mr. Chairman.
        Senator Kennedy. John, do you want to----
        Senator Warner. Oh, thank you, Mr. Chairman. I would like
    to go ahead and hear the next panel.
        Senator Kennedy. Thank you very much, Admiral.
        Admiral Wachendorf. Thank you, sir.
        Senator Kennedy. You will be hearing from us and we will
    appreciate your responses.
        Admiral Wachendorf. My pleasure, sir.
        Senator Kennedy. Secretary Young, Admiral Mullen, we will
    be glad to hear from you at this time.
        Admiral Mullen, if you want to proceed.
        Admiral Mullen. Yes, sir.

    STATEMENT OF VICE ADM. MICHAEL G. MULLEN, USN, DEPUTY CHIEF OF
      NAVAL OPERATIONS FOR RESOURCES, REQUIREMENTS AND ASSESSMENTS

        Admiral Mullen. Senator Kennedy, Senator Sessions, Senator
    Warner, Senator Landrieu, Senator Reed, and the supporting
    staff, I greatly appreciate the opportunity today to appear
    before you and to discuss the extremely important subject of
    shipbuilding.
        Secretary Young and I have prepared a joint statement and
    would ask that it be submitted for the record. I would thank
    you for the opportunity for a brief set of opening remarks.
        As I sit here today, I could not be prouder to be in the
    uniform of our Nation's Navy. I consider it a privilege to
    still be able to serve and do so at such a critical time for
    our country and, indeed, in many respects, the world.
        The performance of our young men and women from all of the
    services has been truly spectacular. In particular, the sailors
    and marines of our modern naval forces have truly made a
    difference in the global war on terrorism and will continue to
    do so.
        As naval forces always are, we were ready on day one and
    provided the winning combat power from the sovereign decks of
    our ships that enabled initial and continuing success in the
    war in Afghanistan.
        The mobility, flexibility, and striking power of our
    carrier battle groups and amphibious ready groups were war-
    winning capabilities without which this country could not
    prosecute this war. As has been the case since ships went to
    sea, we did not have to ask permission from anyone. No visa was
    required.
        Let me elaborate with a few key statistics. As of
    yesterday, carrier-based naval aviation, Navy and Marine Corps,
    have flown 6,399 sorties over Afghanistan, over 77 percent of
    all the sorties flown. Most of these sorties were possible only
    through Air Force tanker support. These strike sorties have
    been as long as 10 hours and have averaged up to 7 hours, the
    equivalent of taking off in Washington, striking targets in St.
    Louis, and flying back.
        About 84 percent of these sorties that delivered ordnance
    hit a target; and about 87 percent of the ordnance delivered
    from the Navy was precision-guided, which is a complete
    reversal of where we were in Operation Desert Storm.
        Something like 80 percent of the Navy sorties delivering
    ordnance did it against targets unknown to the pilots when they
    launched. Naval aviation, combined with Army special forces
    ground forward air controllers, proved an unbeatable
    combination against real-time targets.
        Naval aviation provided 24/7 strike sortie coverage for our
    troops on the ground. Marines at Kandahar, one of the most
    remote cities in a landlocked country far away, were never
    without Navy top cover.
        Had I been in the position to testify before you last year,
    and had I predicted our Navy strikers would be on missions up
    to 10 hours long, flying over 1,200 miles round trip, and our
    Marines would be taking objectives over 400 miles inland from
    our ships at sea, I suspect my testimony, let us just say,
    could have possibly have had some healthy skepticism.
        But this is just another example of what I have learned in
    my 33-plus years of service. Give sailors and marines clear
    goals and good robust tools and they will move mountains. In
    Afghanistan, moving mountains has been the order of the day.
        Our ability to execute this mission is eloquent testimony
    to the long-standing support provided by you and this
    Committee, for which I, on behalf of our sailors and marines,
    are very grateful.
        Likewise, our execution is testimony to the vision of
    Secretary England and Admiral Clark. In this budget, they have
    continued to tackle the immediate priorities of manpower and
    current readiness. As a direct result, sailors are reenlisting
    at record rates, and our naval forces are operating in full
    support of the joint campaign with our Air Force and Army
    counterparts with truly awe-inspiring combat prowess.
        Committing the Navy to these priorities required tough
    choices, which were not painless. A long-term war on terrorism
    will certainly pose additional fiscal challenges, which you are
    just beginning to grasp now. Increased munitions usage,
    increased flying hours and steaming days, increased
    materialization rates are being factored into our programming
    efforts, and this budget begins to do just that.
        More to the point today, manpower and current readiness
    priorities have, in part, prevented us from investing in our
    future accounts, including both aircraft and shipbuilding
    procurement. Almost 80 percent of our topline increase was
    budgeted in these two accounts.
        Our goal has been to pay for the Navy we have today in
    order that we can fight and win today. It is doing so now. When
    Admiral Clark testified before the full committee on March 7,
    he indicated that the total acquisition funding stream was
    about $23 billion short, and that it needed to be about $33
    billion in order to recapitalize the entire fleet, aircraft,
    ships, submarines, at a rate that will maintain the Navy the
    Nation needs. It will not surprise you when I say that Admiral
    Clark is correct in his estimate.
        Admiral Clark also testified to a Navy that requires about
    375 ships. As we look to a future fleet of about this size, it
    reflects a transformed Navy with a universal situational
    awareness in a fully netted environment, a Navy with
    persistence as a byword for all of our capability from
    surveillance to strike, a Navy characterized by cycle times
    reduced by an order of magnitude in acquisition, in speed of
    command, and in strike.
        It is a Navy with fast, lethal, dispersed, netted force
    components, which can bring deadly combat capability to bear
    within seconds of contact, a Navy which will offer increased
    global presence and engagement around the world, and a Navy
    with what it takes to win.
        Such a Navy will include an expeditionary strike force
    concept that provides additional fire support and striking
    power organic to our amphibious ready groups in the form of
    surface ship and submarine escorts with 155 millimeter guns and
    Tomahawk missiles; the introduction of squadrons of littoral
    combat ships to tackle the difficult missions of mine warfare,
    anti-submarine warfare, and surface warfare; surface action
    groups with ballistic missile defense capability available
    early in the conflict; and SSGNs capable of strike and special
    operating forces campaigns.
        Meeting the requirement and finding that extra $10 billion
    for this kind of Navy is my clear charter along with the rest
    of the Navy leadership.
        I am in the midst of deliberations for the fiscal year 2004
    budget right now, and I am committed to find a large chunk of
    that money and use it to recapitalize our Navy, particularly in
    the area of shipbuilding.
        While the future is always very difficult to predict, as
    you pointed out, Senator Landrieu, I will do all in my power to
    ensure we will build more than five ships next year.
        Our current budget sets a firm foundation for the future
    that I am confident we can build on. We continue building the
    excellent Arleigh Burke-class DDGs. The wide-ranging utility of
    this platform is being validated daily. We have achieved
    production line maturity even as we have built more capability
    into later flights of the class.
        Our global war on terrorism campaign analysis and
    transformational concept of operations for the future that it
    requires indicates a solid need for more DDGs. This is also a
    platform that will potentially embed the important capability
    of area ballistic missile defense. This was a program cancelled
    in this budget.
        The warfighting requirement as stated last August by the
    Chairman of the Joint Chiefs of Staff is still a critical
    capability, which we need to restore as soon as possible.
        This budget will get the DD(X) program on track, building
    on a solid research and development base with an executable
    plan to transition seamlessly to ship procurement with a spiral
    development strategy, which keeps these ships ahead of the
    technology, capability and cost curves at the same time.
        The DD(X) spiral technology development enables the most
    efficient insertion of high payoff technologies into the future
    and in service ships with the least amount of risks. CG(X), the
    follow-on cruiser, will share a common hull form and propulsion
    plan architecture with DD(X) and will use many of the same
    innovative technologies to reduce crew size, increase joint
    command and control connectivity, and reduce operating and
    support costs.
        The littoral combat ship will benefit from DD(X) technology
    development by taking advantage of advanced automation
    technologies, high-density propulsion plans, and increased
    nodal and plants C\4\I connectivity.
        In-service surface combatants will receive technology
    upgrades to be modernized that will extend their combat
    capabilities and their service life and keep them at the
    leading edge of combat effectiveness.
        Together, the family of ships, DD(X), CG(X), and LCS, along
    with in-service Aegis ships, will extend the Navy's combat
    reach to from the upper limits of the Earth's atmosphere to the
    clutter, confusing and treacherous shoals of the littoral.
        Both of these programs speak to the ongoing transformation
    of the Navy. Transformation issues we propose investing in are
    wide-ranging, driven by our strategy of projecting sovereign
    combat power forward and have clear objectives in terms of
    delivering capability to our warfighters. Building our network-
    centric operations, our expeditionary posture and culture, and
    our technological prowess, they promise to deliver a revolution
    in warfare from the sea.
        To sum up, I want to thank you again for your continuing
    support of our Nation's Navy. I look forward to tackling the
    challenges ahead, confident in the ability of sailors and
    marines to overcome any obstacle, to move any mountain, given
    the right tools. I look forward to your questions.
        Senator Kennedy. Secretary Young.

     STATEMENT OF HON. JOHN J. YOUNG, JR., ASSISTANT SECRETARY OF
           THE NAVY FOR RESEARCH, DEVELOPMENT AND ACQUISITION

        Secretary Young. Chairman Kennedy, Senator Warner, Senator
    Landrieu, Senator Reed, and my colleagues on the staff, thank
    you. Thank you very much for the opportunity to testify on
    shipbuilding programs for fiscal year 2003 and the Navy's
    budget request.
        In 2001, the Navy and Marine Corps team represented U.S.
    interests and provided a presence throughout the world. In
    September of last year, that presence became an immediately
    available response capability. You all know well the central
    role played by naval forces in Operation Enduring Freedom by
    carriers, amphibious ready groups, sea-based aviation, and
    Marine ground forces. The people and their equipment have
    performed magnificently, delivering combat power from the sea
    against our enemies in a landlocked nation.
        The fiscal year 2003 budget preserves this demonstrated
    capability, placing first priority on sailors and marines,
    their training and the readiness of their equipment.
        Next, the budget addresses the current readiness of our
    Navy and Marine forces through investment in spare parts and
    repair activities for current systems, modernization of
    existing platforms, and procurement of new weapons, aircraft,
    and ships.
        Finally, the Navy increased the research, development,
    test, and evaluation account to make investments in new systems
    in technologies for our naval forces of the future. Within the
    available dollars, the fiscal year 2003 budget strikes a good
    balance among many competing demands. Your Navy and Marine
    Corps team are working hard to make sure that every acquisition
    dollar buys the maximum amount of capability.
        A number of key principles are guiding our efforts to
    improve and change how the Navy and Marine Corps buys advanced
    technology for weapons and platforms. First, we must improve
    and leverage the equipment that we now have and will use for
    years to come. Improving sensors, installing data links and
    networking the command and control systems on these ships
    allows our current assets to fight more effectively.
        Secretary England has testified before this committee about
    the quantum improvements in warfighting effectiveness that come
    by coupling evolutionary improvements and existing systems to
    new operational concepts and tactics.
        Second, we are working to properly fund and carefully
    manage the ongoing modernization programs. To enable the
    transition to new capabilities, we must first have a solid,
    stable funding foundation for our ongoing programs as well as a
    more business-like approach to acquisition.
        These same principles are also guiding our shipbuilding
    strategy. First, we are improving and leveraging the equipment
    that we now have and will use for years to come. Installing
    systems such as cooperative engagement capability and naval
    fires network will dramatically enhance the performance of our
    current ships.
        Second, we are working to properly fund and carefully
    manage the ongoing shipbuilding programs. As we transition to
    new capabilities, we will have this solid foundation beneath
    our programs.
        Our first priority within the shipbuilding program has been
    to control cost growth and eliminate the costs of prior year
    bills on ships. Many factors have contributed to the cost
    growth: continual configuration changes; unanticipated
    engineering challenges with lead ships; unforeseen growth in
    shipyard labor rates, cost increases for material and
    equipment; inflation and fiscal constraints; budget reductions
    or rescissions; and over-aggressive budgeting to optimistic
    targets.
        In the fiscal year 2003 budget we have taken several steps
    to forcefully address these issues. We have fully funded
    shipbuilding programs to the current CAIG, Cost Analysis
    Improvement Group, estimate or the program manager estimate.
        We have taken a round turn on change orders. Once we
    baseline a ship, any subsequent changes will be thoroughly
    reviewed for cost and schedule impacts. This applies to both
    shipbuilding programs and programs for the equipment that goes
    into these ships. We will not add changes until there is full
    concurrence with funding and justification.
        In conjunction with industry, we are reevaluating the
    efficiency of procuring small ship classes from multiple yards.
    We have also worked hard to stabilize the DDG-51 shipbuilding
    profile to allow smooth transition to DD(X) and CG(X).
        Finally, we are placing greater emphasis on understanding
    the potential for technology or requirements changes to grow
    the costs of our existing acquisition programs. Spiral
    development and backfitting of technologies may be the best
    approaches to ensure that we avoid cost growth and make the
    proper trades between competing current investment priorities.
        All of these steps are critical to our ability to build a
    ship within the planned budget. Cost growth on ship
    construction contracts has reduced the confidence of the Office
    of the Secretary of Defense and Congress in our ability to
    manage these capital programs and eroded our sound business
    foundation.
        The Navy is committed to restoring that confidence and
    building stable programs to ensure force structure requirements
    are sustained. Looking ahead, the Navy continues to focus on
    building new and transformational ships to meet our future
    needs. Our fiscal year 2003 budget request calls for
    construction of five ships, two DDG-51 class destroyers, one
    Virginia-class submarine, one San Antonio-class LPD-17
    amphibious transport ship, and one Lewis & Clark T-AKE
    auxiliary cargo and ammunition ship, plus incremental funding
    for the fiscal year 2002 LHD-8 and two SSGN conversions.
        There are 36 ships presently under contract. We also
    requested advanced procurement funding for the sixth and
    seventh Virginia-class submarines, advanced procurement for the
    CVN-70 refueling complex overhaul, the service life extension
    of three LCAC, landing craft air cushion, and one Los Angeles-
    class submarine engineered refueling overhaul, ERO.
        The budget request also fully commits the Navy to the
    conversion of all four Ohio-class SSBNs into SSGNs, by
    providing the necessary ERO funding and conversion funds for
    the four-ship program. Finally, the budget funds the
    development of the DD(X) family of ships.
        In the fiscal year 2002 budget, Congress played a critical
    role in providing the budget resources necessary to keep this
    stable foundation under our current programs, and the
    Department is grateful for your support.
        The fiscal year 2003 budget builds on that foundation and
    these principles to prepare the Navy and Marine Corps for the
    future. Today, the forces of the Navy and Marine Corps remain
    forward deployed and are protecting America's strategic
    interests near and far as an essential part of our Nation's
    joint force. We have the finest naval force in the world.
        While we face a number of challenges, such as
    recapitalizing an aging infrastructure and combatting both
    symmetrical and asymmetrical threats, we are clear of purpose
    and focus on the future.
        Thank you again for allowing me to testify, and I look
    forward to your questions.
        Senator Kennedy. Thank you very much. Without objection,
    your joint statements will be placed in the record.
        [The prepared joint statement of Vice Admiral Mullen and
    Assistant Secretary Young follows:]

     Prepared Joint Statement by John J. Young, Jr. and Vice Adm. Michael
                                  Mullen, USN

        Mr. Chairman, distinguished members of the Subcommittee, thank you
    for this opportunity to appear before you to discuss the Department of
    the Navy's fiscal year 2003 ship programs budget. The United States has
    always been a maritime nation, and our mastery of the seas, sustained
    by forward-deployed U.S. naval forces, ensures our access to our
    economic, political, and security interests overseas. Our economic
    prosperity, now more than ever before, is inextricably tied to the
    global economy--a global economy that is totally reliant upon maritime
    trade to sustain its growth. The oceans are, therefore, the ``great
    commons'' of this economy: with public access to all, and so used by
    all. The United States Navy and Marine Corps ultimately guarantee this
    freedom.
        The need for continuing our mastery of the seas was revalidated by
    the events of September 11, 2001. The United States Navy provided the
    sovereign soil to project power and protect our national interests when
    nations could not support hosting our land-based military. During
    Operation Enduring Freedom, carrier-based Navy and Marine aircraft have
    provided the preponderance of combat sorties, while Tomahawk cruise
    missiles fired from surface ships and submarines struck communications
    and air defense sites. Marines from amphibious ships provided the first
    large U.S. ground presence in Afghanistan and were supported ashore by
    naval construction battalions which restored runways and enhanced the
    conditions of forward operating bases far inland.
        Command of the seas, provided by U.S. sovereign power deployed
    forward, provides a tangible demonstration of our commitment to shared
    interests, and underwrites our political alliances and friendships
    across the globe. It is important to say that we will be there when
    needed to maintain the freedom of these shared global commons, deal
    effectively with shared problems and to respond quickly to acts of
    aggression . . . but, it means even more to be there beforehand.
        Finally, the success of future joint combat operations will require
    us to have immediate and sustained military access wherever and
    whenever it is needed. Command of the seas--which are fully two-thirds
    of the world's surface--provide that global access, which is a
    priceless strategic advantage for our Nation.
        We are building upon our tradition of expeditionary operations as
    we transform into ``network-centric''and ``knowledge-superior''
    services. Knowledge superiority is the achievement of a real-time,
    shared understanding of the battlespace by warriors at all levels of
    command. This in turn, will facilitate our ability to remain forward by
    providing the means for timely and informed decisions inside any
    adversary's sensor and engagement timelines.
        To support this strategy and our forces, the President's fiscal
    year 2003 budget request increases the amount of research, development,
    and overall procurement investment critical to maintaining our Navy and
    Marine Corps team as the pre-eminent combat force in the world. We seek
    an agile, flexible force, that can counter both the known and the
    unforeseeable threats to our national security.

                                    STRATEGY

        After years of under funding, the fiscal year 2003 budget request
    represents a significant improvement for the Department of the Navy
    (DoN). Although the DoN still had to make difficult priority decisions,
    the final request represents the best mix possible among competing
    priorities. The highest priority items are directed at our most
    valuable asset, our people. The Navy and Marine Corps are committed to
    our people and their training as well as the readiness of their
    equipment. As the next priority, we have funded systems such as
    cooperative engagement capability (CEC) and the naval fires network
    (NFN) to enhance the performance of the current warfighting systems.
    Finally, we have sought to fully fund our ship and aircraft production
    programs while adding funds to develop new capabilities such as the
    family of surface combatants led by DD(X), the Joint Strike Fighter
    (JSF) and SSGN.
        I believe current combat capability is healthy and the fiscal year
    2003 budget request provides a stable foundation from which the Marine
    Corps and Navy will continue to work with the other military services
    to determine the best path to transformation and the best aggregate
    warfighting capabilities for our country.
    Completion of Prior Year Shipbuilding Contracts
        A key component of our effort to build a stable foundation has been
    a strong emphasis on adequately estimating and managing program costs.
    During the past year, no other single issue has received more
    management attention by the top levels of the DoN than the completion
    of prior year shipbuilding account. Cost growth on ship construction
    contracts has eroded the confidence of the Defense Department and
    Congress in our estimating, budgeting, and execution process for
    current and future procurements. The Navy is committed to restoring the
    confidence of Congress and building stable programs to ensure force
    structure requirements are sustained.
        Many factors have contributed to the cost growth of current ships
    under contract, including:

             Configuration changes;
             Unanticipated challenges with the design and
            production of lead ships;
             Unanticipated growth in shipyard labor rates;
             Low rate procurement of vendor material and government
            furnished equipment;
             Inflation and fiscal constraints; and
             Budget reductions/rescissions.

        All of these factors, but particularly fiscal constraints, resulted
    in programs being aggressively budgeted. Congress provided over $700
    million in fiscal year 2002 to address those ships contracted in 1995
    to 2001 in order to deliver ships with relevant capability to the
    fleet. The fiscal year 2003 budget requests $645 million to address
    similar shortfalls in order to deliver ships appropriated in 1996 to
    2001. Also visible in the Navy's budget request are the known
    requirements through the Future Years Defense Program (FYDP) to address
    similar issues for ships appropriated through 2001. The Department will
    soon be submitting a formal report to Congress on this issue, but I
    will briefly outline the management actions taken to mitigate the
    existing condition and to prevent a reoccurrence of the situation for
    ships requested in fiscal year 2003 and future budget submissions. To
    prevent further increases to the prior-year-completion funding
    shortfall, the Navy has instituted the following corrective actions:

             In fiscal year 2003 and beyond, shipbuilding programs
            have been budgeted to the Cost Analysis Improvement Group
            (CAIG) or program manager (PM) estimate.
             Change order budgeting levels have been established to
            reflect maturity of respective programs.
             Shipbuilding and government furnished equipment (GFE)
            program managers have been directed to limit changes to a small
            number of critical safety issues.
             The Department has reestablished the Ship
            Configuration Improvement Panel (SCIP) to ensure required
            changes are validated and fully funded.
             The Department further motivated industry cost
            performance through incentives in fiscal year 2002 contracts.
             Prior decisions regarding workload splits among
            multiple yards have been reevaluated in light of the increased
            cost of having multiple ``lead'' ships.

        If costs continue to rise in spite of these management efforts, the
    Department is prepared to descope or delay capability to maintain a
    funded, executable program.
    Shipbuilding Plan
        Recapitalization of the naval force structure demands
    implementation of a shipbuilding strategy that is robust with respect
    to the capabilities of the ships and warfare systems fielded,
    innovative with respect to design, technology, funding mechanisms and
    industry participation, and stable with respect to the annual
    investment and the essential industrial base. This shipbuilding
    strategy must produce a recapitalization plan that is not just a plan
    for the next year, but a plan that is supportable and executable across
    the FYDP and sustainable into the foreseeable future. What has been
    done too often in the past, using the recapitalization funds for battle
    force ships as a surge tank to attempt to balance a wide array of Navy
    programs, can not continue.
        Our fiscal year 2003 budget request calls for construction of five
    ships and the conversion of two submarines in fiscal year 2003: two
    DDG-51 class destroyers; one Virginia-class submarine; one San Antonio
    (LPD-17)-class amphibious transport dock ship; one Lewis & Clark (T-
    AKE) auxiliary cargo & ammunition ship; and incremental funding for the
    fiscal year 2002 LHD-8, resulting in 36 new construction ships under
    contract. In addition, we have requested funding for advance
    procurement of the sixth and seventh Virginia-class submarines, advance
    procurement for the CVN-70 refueling complex overhaul, the service life
    extension for three landing craft air cushion (LCAC) craft, and one Los
    Angeles-class submarine engineering refueling overhaul (ERO). The
    budget request fully commits the Navy to the conversion of four Ohio-
    class SSBNs into SSGNs by providing the necessary funding for the ERO
    and conversion needed to execute the four-ship program. When the four
    conversions are completed, these submarines will provide
    transformational warfighting capability, carrying up to 154 Tomahawk
    cruise missiles, support sustained deployed special operating forces,
    and sustain our submarine force structure. As we move forward, there
    are four key elements to our shipbuilding strategy.
        Establish Core SCN (Shipbuilding and Conversion, Navy) Program--
    First, is the need to properly price and fund the systematic
    recapitalization of primary battle force ships. This can best be
    accomplished by using full funding in each year with a stable
    investment for quantities of known needed ships. The mix of ships must
    provide the minimum essential force structure to meet warfighting
    requirements and the minimum essential industrial base workload to
    sustain needed capacity. This systematic recapitalization forms the
    core of the shipbuilding and conversion strategy, a core that does not
    change with every budget cycle, a core that is not used as a bill payer
    for shortfalls in other appropriations. The core may be added to in any
    given year in order to build-up force structure numbers, but the core
    investment must not decrease.
        Leverage Creative Funding Methods--Second, ships need to be bought
    smartly and, where appropriate, creatively, allowing exploration and
    leveraging of the use of funding mechanisms which produce industrial
    effectiveness and efficiency. There are several such mechanisms that
    when applied judiciously will allow stabilized investment and reduce
    the periodic funding spikes and cost overruns that plague efforts to
    maintain a balanced, stable industry workforce and material acquisition
    strategy. Specifically, advanced construction in conjunction with
    advanced procurement may prove to be advantageous in smoothing out the
    periodic spikes associated with high cost capital ships, the big deck
    ships, that serve to disrupt the systematic recapitalization of other
    battle force ships and the efficient level loading of the industrial
    base. The use of research, development, test, and evaluation (RDT&E)
    appropriations for the lead ship of a class at each shipbuilder can aid
    in stabilizing a new construction program through better management of
    the inherently higher risk and capitalizing on the opportunity for
    industry collaboration. Furthermore, yearly review of RDT&E budgets
    will improve the fidelity in the execution year budget requirement and
    allow flexibility to adjust outyear budgets if critical technologies
    are delayed or require additional maturation. In an era of teaming with
    industry, leveraging of the opportunity provided by these developmental
    efforts and investments must be pursued.
        Another area that we need to look at closely is our process of
    budgeting for ships, particularly their electronic systems. The Navy is
    currently building the fiscal year 2004 budget request. Thus, the Navy
    is now estimating the cost of ships that will be authorized and
    appropriated about 18 months from now. Those ships will take 4 to 7
    years to build. So today, program managers have to select and estimate
    the cost of electronic systems that will not be installed for 2 to 4
    years. We are baselining information-technology systems for a ship 2 to
    4 years before the need for these systems. Baselining the electronics
    in a ship in year one almost guarantees that those systems will change
    over the course of the ship's construction.
        The program manager is faced with two choices. Buy the systems that
    were budgeted, building early obsolescence and capability limits into
    the ship or alternately, budget a greater amount for changes to allow
    the ship's information technology (IT) systems to be changed to pace
    technology. However, the system resists budgeting adequate funds for
    changes or management reserve.
        We are working to find more efficient ways to proceed. We cannot
    let contracts and the fear of losing money drive us to make bad
    procurement decisions. I hope to urge a review of budgeting practices
    to allow phasing of money to be more consistent with when the funds are
    required.
        Implement Cost Saving Measures. Third, it is essential to pursue
    those actions that will reduce the cost of ships. The factors that will
    achieve cost savings, or simply provide more capability per dollar, are
    understood within the industry and need to be applied by the Navy with
    discipline. Stability in design and production with reasonable cost
    targets are the most important aspects of reducing ship cost. Prior
    year shipbuilding cost increases are severely jeopardizing the ability
    to recapitalize battle force ships. The Navy and industry need to work
    together to achieve cost savings where possible and ensure that the
    cost of ship procurements are properly estimated and budgeted, and then
    executed within the established budget.
        Insert Key Ship System Technology. Fourth, implementation of
    processes that provide for the modular insertion of rapidly evolving
    technology, so that warships remain capable in the face of emergent
    threats, is needed for key ship systems. These processes must provide
    the ability to insert new technologies into ship classes at planned
    points without disrupting shipyard production or increasing cost. Such
    planned spiral development, that exponentially increases capability
    through periodic upgrades, requires the efficient and expeditious
    transition from rapid prototype to production systems. Controlling cost
    while decreasing the cycle time for technology insertion will require
    the use of open architectures, module interface standards, commercial
    processors, etc. in conjunction with strict configuration control.
    Shortening this cycle time will require simultaneous acceleration of
    requirements and acquisition processes and changes to how programs and
    budgets are developed for these systems.
        In combination, these elements of the shipbuilding strategy will
    provide for needed capability increases in the warfighting force and
    stability in the industry that is the key to the future
    recapitalization of the naval force structure. Such combat capability
    and shipbuilding stability can only come from a Navy commitment to
    define and stay the course.
        Our fiscal year 2003 shipbuilding plan provides the best available
    balance between the Department's requirements and available resources.
    The innovative teaming strategy approved by Congress for the
    construction of Virginia-class submarines, advance procurement for
    future Virginia-class submarines, and the next DDG-51 multiyear
    procurement contract all highlight acquisition strategies aimed at
    lowering costs, reducing disruptions from hiring and layoff cycles,
    while level loading employment, and encouraging capital investments.
    Our shipbuilding plan maintains the LPD-17 program and the auxiliary
    cargo & ammunition ship (T-AKE) program that will help the auxiliary
    vessel manufacturers capitalize on past and current program
    efficiencies.
        In addition, the Department's fiscal year 2003 budget plan adds six
    DDG-51 class destroyers across the FYDP to the procurement profile to
    sustain the industrial base and future surface combatant force
    structure during the transition to DD(X) production. These actions
    constitute the Navy's near-term effort to ensure the long-term ability
    of the shipbuilding industry to support our future construction
    programs.
    Submarine Force Structure
        The fiscal year 2003 budget requests $360 million for the refueling
    of U.S.S. Norfolk (SSN 714) at Portsmouth Naval Shipyard and for
    advance planning funding for future Los Angeles- and Ohio-class
    refueling overhauls and Trident D5 backfits. This refueling overhaul
    will provide important near-term attack submarine force structure. Los
    Angeles-class submarine refuelings provides the quickest and most
    affordable means of fulfilling submarine mission requirements met by
    fast attack submarines. The Navy's budget submission provides a
    submarine refueling plan for all but two of the Los Angeles-class
    submarines. Refueling Los Angeles-class submarines uses the nominal
    remaining 15 years in hull life on those submarines that do not have
    life-of-hull reactors. The Navy is continuing to identify options,
    which will support refueling the two remaining hulls.
        The Navy is equally committed to the conversion of four Ohio-class
    submarines into strike warfare and Special Operational Forces support
    platforms as transformational SSGN submarines envisioned by the 2001
    Quadrennial Defense Review (QDR). When refueled, these ballistic
    missile submarines will each provide an additional 21 to 23 years of
    service. When converted to guided missile submarines (SSGNs), these
    submarines will fulfill Tomahawk land attack missile and Special
    Operations Forces mission requirements. The fiscal year 2003 budget
    request also funds the ERO planning for U.S.S. Michigan (SSBN 727) and
    U.S.S. Georgia (SSBN 729) to be conducted in fiscal year 2004.

                                    PROGRAMS

    Arleigh Burke (DDG-51)-Class Destroyer
        The DDG-51 class guided missile destroyer program remains the
    Navy's largest surface ship program. The fiscal year 2003 budget
    request includes $2.37 billion for the procurement of two DDG-51-class
    destroyers. The request adds six additional destroyers to the
    procurement profile, two additional ships per year in fiscal year 2005
    through fiscal year 2007. The addition of the six DDGs addresses three
    issues: mitigates the industrial base gap between DDG-51 production and
    DD(X) construction from prior budgets; better stabilizes the surface
    combatant build rate as we transition to DD(X); and stabilizes future
    surface combatant force structure by 2012. A new 4 year, fiscal year
    2002 through fiscal year 2005, multiyear procurement contract
    solicitation was recently released. I anticipate a contract will be
    awarded for these eight ships, plus options, this summer.
        The two Arleigh Burke-class destroyers procured in fiscal year 2003
    will be Flight IIA ships configured with the Baseline 7 Phase I Aegis
    combat system, which we introduced on the third ship in fiscal year
    1998. This baseline incorporates new integrated mission capability and
    makes these ships more capable in the littoral than any other combatant
    in the world. The upgrades include the SPY-1D(V) radar system,
    cooperative engagement capability, the 5,,/62 gun and a remote mine
    hunting system capability. Additionally, the DDG-51 destroyers of the
    fiscal year 2002 multiyear procurement will be forward fit with
    Baseline 7 of the Mk 41 vertical launching system, the tactical
    tomahawk weapons control system and the ability to accommodate the MH-
    60R helicopter variant.
    U.S.S. Ronald Reagan (CVN-76)
        The delivery of the ninth ship of the Nimitz-class, Ronald Reagan
    (CVN-76), is planned for 2003 at Northrop Grumman--Newport News.
    Nuclear-Powered Aircraft Carrier--CVN-77
        The CVN-77, the tenth and final ship of the Nimitz-class, has a
    contract delivery date of March 31, 2008, to replace the U.S.S. Kitty
    Hawk (CV 63). CVN-77 remains the future carriers' transition ship to
    CVN(X). CVN-77 will include a flexible island design that will
    facilitate warfare system upgrades as needed during the ship's service
    life. Propulsion plant improvements include centralized electric plant
    controls and integrated propulsion plant controls. The fiscal year 2003
    budget request includes Research, Development, Test, and Evaluation,
    Navy (RDT&E, N) funding of $92 million to continue the development of
    the integrated warfare system, incorporating critical transition
    technologies into CVN-77. Technology demonstration for this effort will
    be conducted in the new Virginia Advanced Shipbuilding and Carrier
    Integration Center at Northrop Grumman--Newport News to prove new
    technologies before installation in the ship.
    San Antonio-Class Amphibious Transport Dock Ship--LPD-17
        The San Antonio-class of amphibious transport dock ships represents
    a critical element of the Navy and Marine Corps future in amphibious
    warfare, and is a cornerstone in the Department's strategic plan. The
    12 ships of the San Antonio-class will functionally replace four
    classes of amphibious ships. This plan will not only modernize our
    amphibious forces, but will also result in significant manpower and
    life cycle cost savings. Despite the challenges confronted in program
    execution, the Navy remains committed to the vital role the LPD-17
    class will play in the 21st century.
        The fiscal year 2003 budget request includes $604 million to fully
    fund the construction of the fifth ship of the class when coupled with
    advance procurement funds provided in fiscal year 2001 and fiscal year
    2002. Only one LPD-17 class ship is requested in the fiscal year 2003
    budget, compared to previous plans for two ships. Appropriation
    requests for the final three ships of the 12-ship class are planned
    beyond the FYDP. Cost growth and schedule delays caused the Navy to
    revise the procurement plan to one per year. Current metrics indicate
    the LPD-17 program team is now performing in a predictable and
    disciplined manner.
        Detail design of the lead ship is completing and fabrication has
    started on over two-thirds of the lead-ship construction units. LPD-18
    construction began in February 2002 and LPD-19 construction commenced
    last summer.
        Last fall, the Navy formally adjusted the contract delivery date
    for LPD-17 by 14 months (for a total delay of 24 months) to November
    2004 and adjusted the contract delivery dates for the other three ships
    under contract accordingly. Production progress in fabrication,
    assembly and erection of LPD-17 construction units supports the revised
    schedule.
        We are currently reviewing the efficiency of constructing this
    relatively small quantity of a single class of ships in two separate
    yards, essentially supporting two lead ships. In conjunction with our
    industry partners, we are evaluating whether there are better ways to
    load our shipyards across the entire spectrum of our shipbuilding
    efforts to provide greater efficiencies and lower costs.
    Amphibious Assault Ship--LHD-8
        LHD-8 is a gas turbine powered amphibious assault ship based on the
    successful LHD-1 class. The gas turbine propulsion with all electric
    auxiliary systems being included in LHD-8 will result in an estimated
    total ownership cost savings of $350 million--$420 million for this
    ship over its 40-year estimated service life. The Navy awarded a
    contract for detail design of the propulsion plant in July 2000.
    Procurement of long lead material and advance construction of
    components as authorized by Congress was awarded in May 2001. The
    contract for LHD-8 construction is in negotiation for a fiscal year
    2002 award. The fiscal year 2003 request includes incremental funding
    of $253 million toward the total projected LHD-8 program costs of $1.9
    billion.
    Auxiliary Cargo & Ammunition Ship (T-AKE)
        We are replacing the aging ammunition and dry stores ships (T-AEs
    and T-AFSs) with the T-AKE auxiliary cargo & ammunition ships. The
    ships that T-AKE will replace are already over 30 years old. The fiscal
    year 2003 budget request includes $389 million for the fourth ship of
    this 12-ship class. Last fall, the Navy awarded a contract for T-AKE
    lead ship detail design and construction. Lead ship delivery is
    scheduled in fiscal year 2005.
    Virginia (SSN-774)-class Attack Submarines
        Construction on the Virginia, Texas, Hawaii, and North Carolina is
    progressing on schedule. The fiscal year 2003 budget request includes
    $2.2 billion for the fifth ship and advance procurement for the sixth
    and seventh ships of the Virginia-class. The fifth and follow-on ships
    will continue to be built under the unique construction-teaming plan
    approved by Congress in 1998. The teaming plan remains unaltered by the
    merger of Newport News and Northrop Grumman. This teaming approach
    provides a cost effective low rate production while maintaining two
    capable nuclear submarine shipbuilders. The teaming arrangement also
    helps both shipbuilders achieve level manning and more economic
    material buys.
        The fifth ship is the first of the new contract the Navy is
    preparing for the next five Virginia-class submarines. The Department
    considered various contracting strategies such as the multiyear
    procurement and block buy with economic order quantity (EOQ) material
    purchases, but they were considered unaffordable because of the large,
    front-loaded budget requirements. The Department continues to assess
    contracting strategies and may revisit these alternative approaches in
    future budget submissions.
        During the past year, the Department has raised its management
    focus on three critical issues for Virginia-class program execution:
    identifying the causes for cost growth for submarines under contract,
    mitigating the effects of these unforeseen cost factors, and ensuring
    that the fiscal year 2003 budget request fully accounts for all known
    factors. The execution funding shortfall is primarily the result of the
    effects of low rate ship production on the shipbuilder and submarine
    vendor base which was inaccurately budgeted, and were fully realized as
    the shipbuilders took delivery on much of the ship equipment and
    material. The cost of these contractor furnished equipment items was
    much higher than procurement inflation indices and other cost
    estimating techniques that the Department used to budget for these
    submarines in 1997. Unbudgeted effects of labor disputes, which
    occurred after the lead ship was appropriated, contributed to the
    execution shortfall. Other significant factors included design
    performance, government furnished equipment cost growth, overhead, and
    rates. Our fiscal year 2003 budget lays out a funding plan to address
    the shortfall across the FYDP and covers the immediate funding
    requirements for the first three submarines. The cost of the fourth
    ship was addressed in the fiscal year 2002 appropriation.
        The Virginia program continues to incorporate warfare improvements
    as a result of past and on-going R&D investments as budget allows. The
    fiscal year 2003 submarine incorporates shipboard local area network
    (LAN) improvements, which will improve quality of work and advanced
    processor builds for the combat system, which will improve warfighting
    performance and reliability.
    U.S.S. Jimmy Carter (SSN-23)
        The Seawolf-class submarine program has delivered two of her three
    submarines. The U.S.S. Seawolf and U.S.S. Connecticut have completed
    deployments to the Arctic, the North Atlantic and the Mediterranean.
    The third and final Seawolf-class submarine, Pre-Commissioning Unit
    Jimmy Carter (SSN-23), is being modified with additional volume to
    accommodate advanced technology for naval special warfare, tactical
    surveillance, and mine warfare operations. The design modification is
    nearly complete and construction of the new module is on schedule.
    Overall ship construction is more than 70 percent complete, and
    delivery is targeted for 2004.
    Strategic Sealift
        The strategic sealift program is providing 19 large, medium-speed,
    self-sustaining, roll-on/roll-off ships. These ships provide for
    strategic sealift of Army unit equipment and supplies from the U.S.
    mainland for pre-positioning in the vicinity of potential objective
    areas throughout the world. Two of the three remaining ships of this
    class will deliver in fiscal year 2002, with the final ship delivering
    in mid-2003.
    Joint Command and Control Ship--JCC(X)
        JCC(X) will be the first new afloat command and control capability
    in over 30 years directly supporting the joint command and control
    elements of both the operational goals and transformational pillars of
    the 2001 QDR. It will be built around a robust, advanced C\4\ISR
    mission system that can be tailored to meet specific mission
    requirements and can rapidly and affordably incorporate new technology
    necessary to meet the demands of sustained operations at sea. The
    program entered concept exploration and definition in November 1999.
    The Navy is evaluating the best course of action based on the analysis
    presented.
    Experimental Destroyer--DD(X)
        DD(X), with its transformational technologies, will be the
    cornerstone for a family of next-generation surface combatants. These
    combatants must be affordable to produce and less costly to operate.
    They must be designed from the keel up to enable dramatic, 50-70
    percent, manpower reductions. Automated damage control systems will
    help, as will improved human interfaces and a total-ship computing
    environment.
        Equally important, the next-generation of surface combatants will
    be designed to reduce signatures across the full spectrum--radio
    frequency/radar, magnetic, acoustic, and infrared. This reduced
    signature will have implications for tactics, systems, and self-defense
    requirements.
        As for transformation, no Navy ship currently employs electric
    drive, though it is becoming common in the commercial world. Electric
    drive propulsion greatly improves design flexibility--the engine
    compartments are no longer tied to a mechanical shaft. We can disburse
    the turbines throughout the ship, improving redundancy, reliability,
    and survivability. We can also improve efficiency by allowing the crew
    to match power generation to power consumption. Finally, an integrated
    power system will enable a new generation of advanced weapons systems
    and sensors by increasing the amount of power available at any one
    time.
        Many of these technologies were intended to be incorporated into
    the DD 21 program. However, the DD 21 program allowed very little
    technical risk reduction though many of the technologies are quite
    transformational. With DD 21, we were taking a single step to full
    capability. There was a success-oriented assumption that everything
    would proceed on schedule and cost. There were limited opportunities
    for prototyping and no room for error. In the end, these factors
    resulted in a program at risk of significant cost growth. Thus, DD(X)
    was formulated to employ a broad range of strategies to make our entire
    family of next-generation surface combatants more affordable.
        To mitigate the high technical risk; the restructured DD(X) program
    adds several land-based and sea-based prototypes for the key
    technologies. This provides an excellent means of reducing risk within
    each area. The Navy will see potential problems earlier in the process,
    providing us a better chance to solve them. This strategy improves the
    chances of delivering a functional destroyer within cost and schedule.
        Additionally, the Navy plans to produce the lead ship using RDT&E
    funds. The program manager will be required to demonstrate progress on
    an annual basis to defend his budget. The Navy can react to problems
    without the risk of resorting to prior-year completion funding. The
    program manager can focus on establishing an efficient process for
    manufacturing the DD(X) class and avoid trading away producibility
    initiatives when costs increase. Being able to adjust the RDT&E budget
    for the lead ship provides the best chance to control costs and define
    a production process that allows the Navy to affordably build the
    entire class of these next-generation surface combatants.
        As you all recognize, construction of the lead ship in RDT&E is a
    significant change in the Navy's approach to shipbuilding, which the
    Navy hopes the committee will support.
        Using a spiral development approach will allow technologies to be
    fielded when they are ready through a flight approach, forged to
    capture cutting edge initiatives. As DD(X) drives the development of
    technology in many areas, we will look for opportunities to backfit
    advancements on existing platforms. Carefully focused upgrade and
    conversion programs will ensure the existing core of surface combatants
    maintain the capability for battle space dominance.
    Littoral Combat Ship
        Included in the family of multi-mission surface combatants is the
    development of a littoral combat ship (LCS). LCS will provide focused-
    mission warfighting capabilities. We are actively investigating many
    innovative hull designs that provide both the stability and speed
    necessary to enable an LCS to be effective in the littorals. LCS will
    be outfitted with network-centric capabilities, like the multi-mission
    combatants, to make this ship a combat multiplier. LCS' modular design
    will provide significant flexibility in both displacement and combat
    capability. These qualities may make it a good candidate for
    coordination with the Coast Guard's Deepwater program.
    Nuclear-Powered Aircraft Carrier--CVN(X)
        CVN(X) 1 is the next step in the evolution of improved aircraft
    carriers following CVN-77. Specifically, CVN(X) 1 will build on the
    CVN-77 design and incorporate an improved nuclear propulsion plant,
    nearly tripling electrical power generation capacity to replace
    manpower intensive steam auxiliary systems. The combination of a highly
    automated nuclear plant and the elimination of steam auxiliaries will
    reduce the manpower and lifecycle costs. Equally important to reducing
    lifecycle costs are the lower manning and maintenance requirements for
    the electro-magnetic launching system (EMALS), which will also reduce
    lifecycle costs on carrier aircraft due to reduced wear and tear.
        The next step in this spiral development effort will be CVN(X) 2,
    which will provide further improvements in flight deck performance,
    survivability enhancements, service life allowance, and continued
    reduction in total ownership costs.
        In order to support other Navy funding needs and to allow for
    further technology maturation of CVN(X) systems, the fiscal year 2003
    budget submission delays CVN(X) detailed design, construction start,
    and delivery by 1 year and split funds CVN(X) 1 construction between
    fiscal year 2007 and fiscal year 2008. The decision to delay the
    program is not attributable to program execution performance issues.
        Following Milestone I, the Navy awarded the first increment of
    CVN(X) 1 design development work. The fiscal year 2003 budget request
    provides funding required to support future CVN(X) construction in
    fiscal year 2007.
    Guided Missile Submarine--SSGN
        The Navy is committed to the conversion of four Ohio-class
    submarines into strike warfare and Special Operations Forces support
    platforms as transformational SSGN submarines envisioned by the 2001
    QDR. The fiscal year 2003 budget includes over $1 billion in
    procurement and R&D funding to start the engineering refueling
    overhauls (EROs) of the first two Ohio-class submarines in preparation
    for their conversion to SSGNs. This also funds attack weapons system
    design and begins procurement of long lead-time material for all four
    submarines. We are balancing rapid delivery of this capability with a
    fiscally responsible, business-like approach and exploring
    opportunities for public-private partnering.
    Amphibious Assault Ship Replacement--LHA(R)
        LHA(R) is planned as the next generation large deck amphibious
    assault ship to replace the aging LHAs. The mission need statement was
    validated in March 2001 and Milestone A decision reached in July 2001.
    The analysis of alternatives (AoA) is still in progress and should
    complete this summer: Options being considered are a repeat LHD, a
    modified LHD (slightly longer and wider) as well as a totally new
    design. Following completion of the AoA, Navy will select a preferred
    alternative and proceed through the acquisition process.
        The first LHA will be replaced in approximately fiscal year 2007 by
    LHD-8. We anticipate replacing the remaining LHAs by 2024. Average age
    for the 5 ships of the Tarawa-class will be 39.2 years at
    decommissioning (4.2 years average past estimated service life (ESL)).
    Ship Modernization and Technology Insertion
        While building new platforms for the future is a prime priority,
    maintaining and modernizing our current platforms enables them to
    continue to be valuable warfighting assets in the years ahead while
    concurrently trying to mitigate escalating support costs of aging
    equipment. As technological cycle times are now shorter than platform
    service life, it is fiscally prudent and operationally imperative to
    modernize the force through timely upgrades and technology insertion.
    In support of this priority, we plan to modernize the Ticonderoga-class
    cruisers, conduct planned maintenance and refueling of our Nimitz-class
    aircraft carriers and extend the service life of our air cushion
    landing craft. Our technology insertion efforts include the Smartship
    initiatives and a spectrum of new capabilities for both existing and
    in-development submarines.
        Ticonderoga (CG-47) Cruiser Conversion Plan--The Navy plans to add
    new mission capabilities and extend the combat system service life of
    the Ticonderoga-class cruisers. The fiscal year 2003 budget request
    includes $104 million in all procurement accounts to continue the
    engineering efforts and to procure systems for the first installation
    in fiscal year 2006. The upgrade of these ships will add new, and
    enhance existing, combat system capabilities for land attack,
    cooperative engagement capability, and area air defense commander
    missions. These new mission capabilities will dramatically improve the
    ability of these warships to operate in joint and coalition warfare
    environments. The program is essential to maintaining a mission-
    relevant force surface combatants.
        Aegis Open Architecture--While not quite DD(X) or LCS, one step
    that sets the stage for the Aegis fleet in the future is the upgrade of
    the Aegis weapon system into a fully open architecture. Key features of
    this Baseline upgrade will be:

             Improvements to reduce operator workload and manning;
             Upgraded radar processing; and
             A software architecture that allows for rapid and cost
            effective commercial off-the-shelf (COTS) technology insertions
            needed to pace the threat.

        This new Aegis baseline will reduce the punitive costs of
    maintaining multiple baselines across the fleet. The result will be a
    common Aegis baseline that will carry the Aegis-equipped fleet well
    into the 21st century.
        Landing Craft Air Cushion Service Life Extension (LCAC SLEP)
    Program--LCAC SLEP continues in fiscal year 2003 through the award of
    options on the second production contract. The Navy plans to award a
    second production contract this year with options for up to nine craft
    over the next 3 fiscal years. LCAC SLEP combines major structural
    improvements with command, control, communications, computer, and
    navigation upgrades, while adding 10 years to the service life,
    extending it to at least 30 years. In fiscal year 2003, LCAC SLEP is
    funded at $68 million and will extend the service life of three craft.
    The SLEP is planned for 74 craft.
        SUBTECH--The Navy continues to pursue a strategy of increasing the
    capabilities of the Virginia-class submarine force through the
    insertion of advanced technology into new construction and follow-on
    ships. The fiscal year 2003 budget request includes $107 million in
    RDT&E funding for advanced submarine technology development emphasizing
    capability improvements in sonar and major electrical/mechanical
    systems. Additionally, the Navy is pursuing R&D in other areas of
    submarine technology that address a spectrum of new capabilities for
    existing submarines, planned construction, and future submarine
    classes. The eighth Virginia-class submarine (fiscal year 2006) is
    targeted to receive a new composite advanced sail, which will provide
    space and volume for payloads and sensors. Separate efforts are
    advancing both payloads and sensors under development by two industry
    consortia for bringing revolutionary and new capabilities to the
    submarine force for battleforce access, sharing knowledge, projecting
    stealthy power from the littoral. As these technologies mature and
    prove value for submarine enhancement, they will be added to Virginia-
    class submarines.
        Both submarine shipbuilders are playing important roles by
    assisting the Department's efforts to identify additional technologies
    for insertion opportunities and by identifying design changes that
    bring a life cycle cost avoidance benefit. Last year the shipbuilders
    submitted seventeen design improvements for consideration of which
    eight were approved for further development and evaluation. Forty new
    technologies are being developed by the submarine community to provide
    these new capabilities. Two industry consortia, representing over 50
    industry partners, are currently working under a Navy agreement to
    pursue specific areas of future advanced submarine research and
    development. These efforts are a result of the 1998 Defense Science
    Board study recommending revolutionary capability advances to the
    submarine force by harnessing future technologies. In fiscal year 2001,
    these consortia began working on actual prototype demonstrations of
    selected technological concepts in an effort to mature the most
    promising advances for insertion into the submarine force. Fiscal year
    2003 should see a continuation and expansion of these demonstrations to
    further develop technologies needed to provide additional capabilities
    to the submarine fleet by 2020.
    Research & Development (R&D)
        Identifying future capabilities for naval forces will require
    robust experimentation involving systems, platforms, organizations, and
    tactics. The Department must continually examine and question how we
    operate in various strategic environments and what the future might
    entail. Extensive use of simulations, modeling, joint test facilities,
    and actual forces is necessary to maintain our technical advantage and
    continual command of the seas. Technology will never substitute for
    presence; rather, it should always address a mission requirement of
    making naval forces more effective.
        Twenty-first century technology offers enormous opportunities to
    enhance our warfighting abilities. Emerging technologies must be
    embraced, both to mitigate risk and to take advantage of new
    possibilities. Seizing these opportunities at a reasonable cost
    requires efficient organizational alignment, resolution of difficult
    interoperability and integration problems, systematic innovation using
    improved business practices, and the steady pursuit of promising
    scientific and technological initiatives.
        Electric Power for Ships--Specifically, the Department will fund
    development and at-sea demonstrations of: innovative superconducting
    and permanent magnet motor technologies for podded propulsors; advanced
    prime power, including high speed superconducting generators and fuel
    cells; and electrical auxiliaries such as electromagnetic aircraft
    launch system for CVN(X).
        Littoral Support Craft (LSC(X))--The Navy and Marine Corps will
    research advanced hull forms, cutting edge propulsion, and material and
    modular payload technologies for use in a littoral support role.
    Demonstration efforts are underway on several different vessels,
    predominantly catamaran designs. The Navy needs to expand this work and
    look at additional hull designs in order to support our future
    decisions on LCS.
        Future Naval Capabilities (FNCs)--The Navy's science and technology
    efforts are focused on FNCs, which address many aspects of future
    shipbuilding. In the areas of sensors, weapons, communications and
    radar, the Navy continues to make progress transitioning methods and
    equipment that allow leap-ahead technologies to better fight our ships
    while protecting our sailors and marines. The Navy is also pursuing
    many human systems technologies to make the man/machine interface more
    efficient in order to reduce manning on future ships. To better address
    the network-centric aspects of future warfighting, the Navy has
    combined two FNCs to bring hardware and software communities together
    in a more integrated approach. The most important leap-ahead technology
    for the future of naval warfare will be electric warship. The Navy is
    standing up a new FNC to address all aspects of electric warship to
    include the propulsion, sensors, auxiliaries and weapons.
        The Navy's science and technology (S&T) program is focused on 12
    FNCs:

        1. Autonomous Operations
        2. Capable Manpower
        3. Electric Ships and Combat Vehicles
        4. Knowledge Superiority and Assurance
        5. Littoral Anti-submarine Warfare (ASW)
        6. Littoral Combat and Power Projection
        7. Missile Defense
        8. Organic Mine Countermeasures (MCM)
        9. Platform Protection
        10. Time Critical Strike
        11. Total Ownership Cost Reduction
        12. Warfighter Protection

        The largest near-term beneficiaries of the Navy's S&T program are
    the DD(X) and CVN(X) programs. S&T investments in electric drive and
    integrated electric architecture provide the basis for similar
    ``electric ship'' technology insertions in future ship programs. Other
    examples of technology insertions that will benefit future warships
    include alternative hull forms for high-speed combatants and
    incorporation of integrated and federated apertures for improved C\4\I
    and signatures performance. The benefits for the 21st century sailor
    range from improved automation to improved quality of life. The
    benefits for the 21st century Navy are improved life-cycle costs to
    improved combat performance.
    National Shipbuilding Research Program Advanced Shipbuilding Enterprise
            (NSRP ASE)
        The Navy's NSRP ASE continues in fiscal year 2003, building on
    previous efforts initiated under DARPA's MARITECH program (1993-1998).
    Productivity improvements achieved under MARITECH have helped stimulate
    commercial business opportunities such as construction of crude
    carriers, cruise ships, and trailer ships at three U.S. shipyards. NSRP
    ASE is an innovative approach in public/private cooperation involving
    11 companies associated with the Navy shipbuilding and repair industry
    to jointly fund R&D for technologies critical to the Navy's ability to
    reduce shipbuilding, ship repair, and total ownership costs.
    Naval Surface Fires Support
        We are executing a two-phase plan to develop new weapons systems,
    advanced munitions and a naval fires control system to provide improved
    naval surface fire support (NSFS) capability. These new developments
    will provide long-range, time critical, accurate, and lethal fires in
    support of ground forces in amphibious and littoral operations through
    a combination of advanced guns, precision gun ammunition and precision
    land attack missiles.
        In the first phase, the Navy developed a 5,,/62-caliber gun and is
    currently developing the associated extended range guided munitions
    (ERGM) to engage targets between 41 and 63 nautical miles. These
    weapons and the naval fires control system will be installed on 28 new
    Arleigh Burke (DDG-51)-class destroyers and on Baseline 1 and 4
    Ticonderoga-class cruisers scheduled for modernization beginning in
    fiscal year 2006.
        The Navy was developing the land attack standard missile (LASM) to
    provide a NSFS capability out to 150 nautical miles. However, LASM
    development was terminated in the fiscal year 2003 budget request. Even
    though LASM was on track to meet all its stated program requirements,
    it would not have provided a lethal capability against all target
    types, including mobile and hardened targets.
        The second phase, to be introduced to the fleet with the DD(X) in
    fiscal year 2011, is intended to fully meet Marine Corps naval surface
    gunfire support requirements for range, accuracy, and lethality. It
    includes developing a longer range, higher volume, larger caliber
    advanced gun system (AGS), the associated increased lethality long-
    range land attack projectile (LRLAP) and a long-range, increased
    lethality advanced land attack missile (ALAM). The AGS and associated
    magazine will be fully automated and be able to deliver 12 precision-
    guided LRLAP munitions per minute to ranges up to 100 nautical miles.
    Congressional support for the DD(X) program is critical to development
    of the AGS and the LRLAP munition to lower the risk to our ground
    forces operating inland from the beachhead. Although the Navy's fiscal
    year 2003 request has no funding for the ALAM program, it provides the
    last, long-range piece to the NSFS plan. ALAM is intended to deliver
    various tactical payloads to counter mobile and armored targets at
    ranges of over 200 nautical miles. The Navy intends to fund the ALAM
    program in its fiscal year 2004 request. These ``second-phase'' weapons
    programs will fully satisfy all Marine Corps fire support requirements
    for operational maneuver from the sea/ship to objective maneuver.

                                    SUMMARY

        We are institutionalizing reforms that make acquisition success a
    common occurrence. We continue to communicate fully and openly with
    Congress, industry, our warfighters, and our acquisition professionals,
    and are doing everything it takes to make sure our sailors and marines
    are provided with the safest, most dependable, and highest performance
    equipment available within fiscal constraints. We appreciate the
    support provided by Congress and look forward to working together with
    this committee toward a secure future for our Nation. Mr. Chairman, the
    Navy and Marine Corps acquisition team is continuing to work very hard
    to build the best shipbuilding acquisition programs that maximize our
    current benefits while buying smart for the future.

        Senator Kennedy. Now, this is directed toward both of you.
    I believe the official requirement for the DDG-51 program is to
    build a total of 59 ships. In the current shipbuilding plan,
    you find a total of 64 DDG-51 destroyers or 5 more ships.
        This is presumably related to the desire to keep a
    destroyer industrial base until the DD(X) or some other such
    ships starts production. The Navy's own destroyer industrial
    base analysis indicates the industrial base would be at severe
    risk of production level of two ships per year without
    substantial additional work.
        Based on the lack of prospects for substantial additional
    work in the two shipyards, it would not appear that the Navy's
    program could be executed. Further, there is no explicit
    commitment to build more than the one DD(X) in this budget,
    nor, indeed, in the Future Years Defense Program.
        So this raises several questions. Since the plan would
    appear to fall short in support of the industrial base, why are
    we building more DDG-51 destroyers than the requirement?
        Then there seems there is no commitment to a continuing
    DD(X) program. Then what is the bridge on industrial base, and
    how do we expect to be purchasing these things?
        Admiral Mullen. Sir, I will address the requirement piece
    specifically. What we have seen in the last 2 to 3 years of
    warfighting analysis is in just about every war game, there is
    an increased need for ballistic missile defense-capable ships.
    Having them there available early is key, and that, to some
    degree, ties back to the overseas homeport that you were
    talking about with the previous witness.
        Each time we looked at that, the requirement comes in at
    about 64 DDGs. Now it is in combination with the cruiser
    conversion program, which is also in the budget; and the need
    to clearly restore the missile defense program that was
    cancelled this year, but that warfighting requirement is very
    real. We see from the standpoint of the overall DDG
    requirements to have 64 to be about right.
        In a previous life, I was the sponsor for DD 21 and what
    has now evolved to DD(X). There has been over time, a very
    concerted effort to try to look at how we fare our way both out
    of DDGs and into the new ship, meeting the new ship
    requirements, which DD(X) now represents.
        In that regard, clearly there have been long-term concerns
    with respect to the industrial base, and I will actually ask
    Secretary Young to take the industrial base aspect of this
    particular question.
        Secretary Young. Mr. Chairman, I appreciate the chance to
    comment on this issue. When I came to the Pentagon, what we had
    was a program that had DDG purchases through fiscal year 2004,
    one DD 21 in fiscal year 2005, and three DD 21s in fiscal year
    2007.
        I would submit to you there is no way the industrial base
    would survive that profile. The budget has been built and
    submitted to you in fiscal year 2003 includes two DDGs per year
    in fiscal years 2005, 2006, and 2007.
        I think some of the previous industrial base studies do not
    consider factors that are ongoing in our industrial base. One
    factor is the companies have recognized that there may be a
    period of low rate procurement, and they are working to size
    their yards for that low rate procurement. So I think those
    studies are flawed in an element of assuming that the yards
    have to stay at the same size, and therefore they have to build
    a certain amount of product to that size.
        Senator Kennedy. That may be true, but I want to see what
    your studies are, that they show that that is not the case.
        Secretary Young. OK. I have familiarized myself with one of
    the previous studies, it assumes no LPD work is done at
    Ingalls, and presently, under the Northrop Grumman acquisition
    of Avondale and Ingalls, LPD work is being done at Ingalls.
    This is good news, in my view, because Ingalls is bringing
    skills and manpower to an LPD program that is adding confidence
    in our ability to deliver that ship.
        So I believe the industrial base, that our current
    shipbuilding profile has the ability to provide enough work to
    get the yards through this period as we transition to new
    ships.
        Senator Kennedy. Now, you have studies that show that
    obviously, and you are going to make those available to us?
        Secretary Young. I will make whatever analysis available to
    the committee.
        Senator Kennedy. You have studies that deal with it, or you
    would not have done it. I mean, you have something that
    counters the earlier industrial base studies. Maybe not, but
    that is just what your earlier answers indicated that those
    were not----
        Secretary Young. I am saying the earlier studies do not
    countenance the way industry is doing business right now, as
    well as how----
        Senator Kennedy. OK. So you have other studies that show
    that the industrial base is not going to be reduced?
        Secretary Young. I can--I did not----
        Senator Kennedy. Do you have studies or not? You can just
    say, ``No, we do not, Senator. That is my conclusion.'' Then we
    can go on to----
        Secretary Young. Senator, I do not have a current study
    that looks at the industrial base.
        Senator Kennedy. So you do not have studies that override
    the other studies that have been provided to our committee with
    regard to what is necessary in terms of industrial base for
    that? You do not have those. You do not have other kind of
    studies that sustain your position that you are telling us,
    but----
        Secretary Young. I do not have----
        Senator Kennedy.--you believe that to be the case, but you
    do not have that.
        Secretary Young. I do not have new studies, but I
    definitely have assumptions, and the original studies have
    changed the way we are doing business now, sir.
        Senator Kennedy. Yes. But you can provide that, any
    information on this. We are very concerned about the industrial
    base. This decision and the DDG is going to be the best ship in
    terms of the missile defense; that decision has been made or--
    --
        Admiral Mullen. Sir, the program that was cancelled, the
    area theater ballistic missile defense program, which was
    cancelled prior to this budget cycle, is a capability that--
    again, the warfighting requirement remains out there.
        The plan at that time, at the time of cancellation, was to
    embed this in the DDGs, which is what I spoke to in my opening
    remarks, that that warfighting requirement is still there, and
    as Admiral Blair testified last week, needs to be met.
        If I could, Senator, I would like to address the DD(X)
    issue, if I may?
        Senator Kennedy. Admiral, please.
        Admiral Mullen. As the resource individual in the Navy, one
    of the things we did in this budget was we put an additional
    six DDGs in the last 3 years of the future program,
    specifically to reserve the option of DD(X) maturing and then
    moving that money from DDGs into the DD(X) as it matures.
        From a long-term warfighting requirement, the DD(X) program
    is a very important one to us, not just specifically for that
    platform, but also for the littoral combat ship and for
    incepting the technology evolution to the follow-on cruiser.
        Secretary Young. Could I add to that, Senator? I was going
    to comment----
        Senator Kennedy. When would you expect to be replicating
    your building after that? The DD(X) will be completed then--
    when?
        Admiral Mullen. It is due to hit the waves in fiscal year
    2011. It is currently a 2005 ship. So certainly my expectation
    would be that between that time frame, we would be turning to
    the production of additional ships, and actually Secretary
    Young can speak on that.
        Senator Kennedy. How many years, between 5 and 11?
        Secretary Young. Senator, the understanding I----
        Senator Kennedy. I am just trying to find out what your
    plans are with regard to industrial base now and also with
    regards to the whole issue of the extended range guided
    munition that is so important to the Marines. That has been a
    surface fire support program that has slipped with this
    decision on the DD(X). So that has slipped as well. So we just
    want to get a good idea as to what is being planned out there.
    I will send you a more precise, entire question and more
    specifics, because I am getting around the edges here, I think.
    I want to make sure we have a complete answer.
        Secretary Young. Yes, sir.
        Senator Kennedy. Senator Reed. Or John, do you want to----
        Senator Warner. No, I think I will follow the regular
    order.
        Senator Kennedy. All right.
        Senator Warner. Thank you very much, though, for the offer.
        Senator Kennedy. All right.
        Senator Warner. I will follow you, Senator.
        Senator Reed. Thank you.
        Mr. Secretary, Admiral Mullen, thank you.
        As I understand it, the Navy plans for an accelerated
    development of the Navy's unmanned underwater vehicle program,
    specifically the Navy plans to accelerate the multi-mission
    reconfigurable UUV and upgrade the AN/BLQ-11 long-term mine
    reconnaissance system.
        Can you elaborate in some details about these plans,
    because they are, I think, very important for the future in
    terms of employing more and more unmanned undersea vehicles.
        Admiral Mullen. Certainly, the future of warfighting is we
    view as a very critical piece to us is the entire spectrum of
    unmanned and autonomous remote vehicles, in the air, on the
    surface, and under the sea.
        I am not intimately familiar with this program. I know it
    has been in development for some time, and there is a very
    strong Navy commitment to this program. As far as the details
    of acceleration, I would have to take that for the record and
    get back to you specifically. But I want to strongly state the
    Navy's commitment to this kind of capability in the future.
        [The information referred to follows:]

        The Navy has plans to upgrade the baseline AN/BLQ-11 long-term mine
    reconnaissance system (LMRS) with improvements to the forward-looking
    sonar and the side-looking sonar. The improvements to these sensors are
    currently under development and will be transitioned to LMRS upon
    successful demonstration.
        The 21,, variant of the mission reconfigurable UUV (MRUUV) is the
    next generation, fully autonomous UUV. Current funding dictates an
    initial operational capability (IOC) in fiscal year 2009. Both the
    Office of Naval Research and industry are conducting UUV research and
    development efforts that can be leveraged to delivery MRUUV prior to
    fiscal year 2009. The milestone is being evaluated against other
    priorities within the Navy as part of POM04.

        Senator Reed. Are you aware of any collaboration with the
    Coast Guard in homeland defense in terms of using unmanned
    underwater vehicles for port surveillance and port security? Is
    that something that you would be considering also, Admiral?
        Admiral Mullen. I am not aware of that, Senator Reed, at
    this point. But one of the things that happened September 11th,
    Admiral Loy is fond of saying, the second call he got was from
    Admiral Clark. It has really energized both services in working
    together to support the future and the changing mission of
    homeland security and homeland defense.
        So we are paying a lot of attention to the Coast Guard
    developments. One possibility is to look at the development for
    the littoral combat ship and the Coast Guard deepwater program
    and how they will work together.
        Certainly, initiatives like you are talking about would be
    ones that, if they have applicability, and certainly it sounds
    like they do, we would want to try to participate in it.
        Secretary Young. Senator, we are working on a memorandum of
    understanding between, particularly, the LCS, DD(X), CG(X)
    programs and the deepwater, and as the Admiral said, the LCS is
    one of the first potential opportunities for cooperation,
    depending on whether it has a place in deepwater.
        Then we are looking to expand that into exactly what you
    said, both not only underwater vehicles, but also
    communications and sharing data, tracking ships, and other
    factors.
        Senator Reed. Thank you, Mr. Secretary. Mr. Secretary, it
    is my understanding that the first step in converting the SSGNs
    is for refueling, and this work will be done in public yards at
    Puget Sound and Norfolk.
        Has a decision been made on whether conversions will also
    take place at--well, let me ask it this way. After the
    refueling is completed, will these ships be moved to other
    positions for the construction and the renovation, if that is
    the right term?
        Secretary Young. There has been extensive discussion in the
    Department about that. The current plan and the program of
    record would be to refuel two submarines at Puget and convert
    those submarines there and refuel two submarines at Norfolk.
        We have staggered the two submarines at Norfolk and
    preserved an opportunity to discuss where those submarines are
    converted, whether there might be a public or private
    competition for that and other factors.
        There is also a strategy to try to take Electric Boat tiger
    teams and assign them to the submarines. The staggering is an
    approach to let that tiger team move between each conversion
    and give ourselves a chance to have some learning curve benefit
    and to control, to the maximum extent possible, the costs on
    the SSGN conversions.
        Senator Reed. Thank you Mr. Secretary, this also raises the
    question that is asked every year. We have been struggling to
    meet the requirements of the warfighters, to have a
    sufficiently sized submarine fleet, and that ultimately
    requires going to two-submarines-a-year production.
        Can you comment about whether the horizon is within sight,
    that we will get to two submarines a year?
        Secretary Young. Senator, you are well aware, in the fiscal
    year 2003 budget, the Navy made an effort to add 688 refuelings
    to try to sustain forces at the 55 submarine requirement.
        The President's budget supports the potential for three
    submarines in 2008. Those programs are continually under review
    again with my comments about ``What is the business-smart way
    to do that?''
        But there is a goal to get to two submarines per year, and
    people would like to get there as quickly as possible if
    resources and the business plans allow that.
        Senator Reed. Mr. Secretary, if I may ask one question. In
    your statement, you talk about the ways you are going to try to
    more accurately project and control costs in fulfilling the
    program, and then you have a line that says, ``If costs
    continue to rise in spite of these management efforts, the
    Department is prepared to de-scope or delay capability to
    maintain a funded executable program.''
        Can you elaborate in more detail about what precisely that
    means?
        Secretary Young. OK. The prior completion account has
    grown. This year, the request is $646 million. That is critical
    to the Navy. If we are not provided those funds, we will have
    to take scope out of other programs. It will not necessarily
    have to be in shipbuilding. It relates to the comment I made in
    my opening statement about making trades with the whole of the
    picture in mind.
        So if a ship cost grows, and if there is a change option
    and we do not have a way to pay for it, I think we will try to
    resist making that change until a future point when we have the
    funds and know what capability we would put on board.
        I think a perfect example of that is CVN-77. There was an
    option: MFR and VSR. The VSR became a high-risk, if not
    impossible, option for CVN-77. The next option down was
    potentially to put a SPY-1 radar on the carrier. There were
    estimates that said the cost of that were over $300 million,
    and that would have been a prior year completion bill for that
    carrier.
        Right now, we are going to put the legacy radars on that
    carrier, design the island in a smart flexible forward-looking
    manner so that in a future availability, or a next opportunity,
    we can install MFR and VSR on that carrier. But we cannot
    afford either the costs or the risks to put that on right now.
    So some would argue that is a good business decision, and some
    would argue that is de-scoped capability.
        Senator Reed. Thank you, Mr. Secretary.
        Thank you, Admiral.
        Secretary Young. Thank you.
        Senator Kennedy. Senator Warner.
        Senator Warner. Thank you, Mr. Chairman.
        Gentlemen, welcome.
        Admiral Mullen. Good to see you, sir.
        Senator Warner. I am fascinated to hear you talk about your
    respective responsibilities with such enthusiasm. Not much has
    changed since I had the same challenge that you have.
        Managing the shipbuilding account for the United States
    Navy is one of the most difficult jobs. We are fortunate, Mr.
    Young, that you bring an institutional memory of this
    institution as we go through our deliberations here. I think
    you have a profound respect for the old adage that the
    President proposes and Congress disposes and I am going to come
    to that momentarily.
        Admiral Mullen, I judge that your career is owing to three
    things: hard work, solid family, good luck--and maybe the
    fourth one is Joe Lopez, is that correct, Admiral Lopez?
    [Laughter.]
        Admiral Mullen. Well, he does stay in touch. [Laughter.]
        Senator Warner. He is a wonderful man.
        Admiral Mullen. Yes, sir.
        Senator Warner. This morning, our committee was briefed by
    the Director of the Central Intelligence Agency. I think by any
    objective viewpoint, this country is heading into some very
    uncertain waters in the years ahead. As I reflect on the
    threats that our previous witness talked about with respect to
    a capability versus threat-based environment, some of us old-
    timers are still very conscious of this threat and have to
    determine what you mean by ``capability-based.''
        Nevertheless, one capability that we have relied on, I
    think, more heavily than ever before is the carrier force. We
    saw that in the Afghanistan operations, where you actually
    loaned out one of your carriers to the Army as an airfield,
    which served very well in its mission.
        As you look to the future and at the uncertainties of the
    future, I frankly can see absolutely no basis for anyone to say
    that the carrier is not going to remain, if not increase, in
    its importance in terms of not only protecting our forces, but
    also deterring conflict.
        Of course, this brings me to the decision on the CVN(X). I
    am going to read from your testimony. You say, ``In order to
    support other Navy funding needs and to allow for further
    technology maturation of CVN(X) systems, the fiscal year 2003
    budget submission delays CVN(X) detailed design, construction
    start, and delivery by 1 year and split funds CVN(X)-1
    construction between fiscal year 2007 and fiscal year 2008. The
    decision to delay the program is not attributable to program
    execution performance issues.''
        Now, with all due respect, I am seriously reviewing,
    initially with this subcommittee and then to the full
    committee, a restoration of funds so that that program can be
    restored to its original posture in previous FYDPs.
        I am going to frankly ask you if Congress were to authorize
    and approve a dollar amount, and we could possibly discuss
    that, such that you could then execute, which is the will of
    Congress; can you do it, and how would it be done?
        We will start with you, Mr. Young.
        Secretary Young. Yes, sir.
        Senator Warner. You are quite familiar with the process
    here.
        Secretary Young. Yes, sir. I appreciate your kind comments,
    Senator, and on this one, I think I can answer you fairly
    specifically.
        The current program in fiscal year 2002 assumed that we
    would hire approximately 50 designers and engineers a month,
    starting in January and do so each month thereafter and
    maintain that engineering work force as we built up to be able
    to accomplish the design of CVN(X).
        When the fiscal year 2003 budget decision was made, the
    budget before you, is for a year and decreases some of the
    engineering of the R&D funds for the design of that carrier.
    The program office looked at what they had in fiscal year 2003
    and recognized that if they ramped up as planned, they would
    potentially, with the fiscal year 2002 funding, have to ramp
    down.
        Senator Warner. Well, presumably Congress would find the
    dollars.
        Secretary Young. Yes, sir.
        Senator Warner. So I ask you to start with the assumption
    that it is not a dollar issue, because Congress would add those
    funds from wherever we so desire.
        Secretary Young. It is----
        Senator Warner. So then take it back again to what you can
    do if you have been authorized those funds.
        Secretary Young. I probably would have to seek a middle
    ground. I can tell you that there is a number that, if
    additional funds were authorized and appropriated in fiscal
    year 2003----
        Senator Warner. For this purpose.
        Secretary Young.--for this purpose, the carrier, they could
    attempt to recover----
        Senator Warner. Who is ``they''?
        Secretary Young. The program office. Admiral Knapp and the
    program office.
        Senator Warner. All right. I want to be specific.
        Secretary Young. Yes, sir. They could try to recover some
    of the lost schedule in the program. I am told there is an
    estimate that says the carrier right now would deliver under
    the program of record, with the budget as submitted, in
    September 2014 and that could be pulled back to March, with the
    addition of funds in fiscal year 2003 and each following year.
        Whether that carrier could be pulled back a little further,
    if people assumed additional funds authorized and appropriated,
    there might be even more acceleration potential.
        But right now the program office is taking a business-like
    approach. I think you can understand. They do not want to hire
    people and then, if no additional funds are authorized and
    appropriated, have to lay those people off. That is a spike
    they do not want to manage.
        They are managing to the assumption that there may be only
    the President's budget level of fiscal year 2003 funds; if
    there are additional funds in fiscal year 2003 provided, there
    is that potential to pull the carrier back.
        Senator Warner. Now, let us go to the phrase ``maturation
    of systems,'' which means maturity as they come along and can
    be integrated contemporaneous with the maturing of that system.
    Address that issue, because I think somehow we can work the
    labor force issue, or the hiring, and the money, but I want to
    talk about that aspect of it.
        Secretary Young. Sir, the reactor components have already
    been advance appropriated. Therefore, there is a certain level
    of maturity, in the propulsion system of the carrier. We do
    need work on the EMALS, the electromagnetic aircraft launch
    system, and other technologies. But that is affected by this
    desire not to spike and then layoff people; I think it is, as
    much as anything, a money-driven process.
        Time will help us with that maturity and it will put less
    risk in the program, because we would like to see EMALS launch
    a plane today and you cannot do that. So adding funds and
    pulling it back will put back some risk in the program, but I
    cannot tell you it is an unacceptable level of risk.
        Senator Warner. From a technical standpoint?
        Secretary Young. Yes, sir.
        Senator Warner. Thank you.
        Admiral, your views on this and particularly, as a future
    fleet commander, or whatever the case may be in the years to
    come, suddenly you are short a carrier out in this time frame
    of when this was to be delivered. We saw this with the Kennedy.
        Admiral Mullen. Yes, sir, Senator Warner.
        Senator Warner. It was for reasons other than this, but the
    carrier schedule is just as precise as any schedule there is
    that exists in the Pentagon.
        Admiral Mullen. Actually, I would say it is probably more
    so than schedules that exist in the Pentagon, from the
    standpoint that carrier schedules really drive everything else
    in the Navy and have for many years. Certainly, this choice, as
    has been testified to by Admiral Clark, was an affordability
    issue more than anything else.
        Senator Warner. I examined Clark in detail.
        Admiral Mullen. Yes, sir.
        Senator Warner. What I am asking you is, on the assumption
    that Congress does restore funds to enable the Navy to go back
    to try and recoup some of this time and also, a subsidiary
    question, the work force, can you do it and will you do it?
        Admiral Mullen. In terms of if it can be executed, we
    certainly would accept the carrier back in 2013 rather than
    2014. We seem to be at, as well as we can predict, March 2014
    right now. It is that other 6 months that gets it back to its
    original schedule that Secretary Young was speaking about
    specifically.
        The value of the carriers. My last job was down in Norfolk
    as the fleet commander. Certainly from there as I watched the
    debate last year about the value of carriers. It was fairly
    vocal on both sides, but has certainly gone away, as it should
    have in my view, because of the value of these particular
    platforms.
        It is clearly something we will watch very carefully and
    want to manage and have as much of that capability as we
    possibly can.
        The other option we have on the front end of this--given
    the time between now and that the CVN(X) is basically supposed
    to replace the Enterprise--is to carefully manage her nuclear
    fuel. Basically, the driver for her is the nuclear fuel that
    she has.
        We cannot always do that because of the needs and she may
    have to go faster than we anticipated at certain times. But we
    have the opportunity to manage that on the front end, as well
    as to try to make this work.
        Senator Warner. Now, she has four reactors, by the way?
        Admiral Mullen. Yes, sir.
        Senator Warner. That is quite a program.
        Admiral Mullen. Yes, sir.
        Senator Warner. Mr. Chairman, if I could just add one other
    point here.
        Senator Kennedy. Yes.
        Senator Warner. I was fascinated with how you worked out a
    sharing of the labor force with Newport News and the Norfolk
    Naval Shipyard because of workload in the Newport News Shipyard
    you took the carrier, and put it into Portsmouth under an
    arrangement where that work force could work on it. Yet it is
    still, let us say, under the command of Newport News
    Shipbuilding. Now, that is quite an interesting innovation to
    balance that work force.
        Is that something we will likely see in the future, and is
    it working to your satisfaction?
        Secretary Young. Do you want me to comment?
        Senator Warner. Either one.
        Secretary Young. Go on.
        Admiral Mullen. Yes, sir. I think from the standpoint of
    the critical requirement to have that capability within our
    country and in particular, the specific skills tied to the
    nuclear industry, that kind of innovation and work-sharing
    piece is a very important part of both our current capability
    and our ability to maintain that capability in the future. Yes,
    sir.
        Secretary Young. If I could, sir, we would like to take
    advantage of that at every opportunity possible. As you well
    know better than I, Norfolk Naval Shipyard has some very unique
    facilities.
        Senator Warner. Indeed it does.
        Secretary Young. We are able to let the private sector come
    in and perform work on ships within dry docks that nobody else
    has in the world. At every opportunity where it makes sense
    from a labor cost and an overall cost to the project point of
    view, we are trying to take advantage of those opportunities.
        Senator Warner. I think it is, and perhaps it even lends
    itself to the creation of more jobs between the two yards,
    given that.
        By the way, the record should reflect port, starboard,
    fore, aft, four reactors. Fore, aft, port, starboard, eight
    total, correct?
        Admiral Mullen. Yes, sir.
        Senator Warner. Thank you.
        Thank you, Mr. Chairman.
        Senator Kennedy. I am glad we got that straightened out.
        Senator Warner. Yes, sir, I am too. [Laughter.]
        Particularly when it comes to the Navy and their terms.
    [Laughter.]
        Admiral Mullen. I knew what you meant, Senator. [Laughter.]
        Senator Kennedy. To my friend and colleague, Senator
    Sessions, if I may.
        Senator Sessions. Of course.
        Senator Kennedy. In February, during the posture hearing,
    Secretary Rumsfeld talked about the naval forces study. Could
    you give us an idea of when that is going to be ready?
        I do not know whether that this is out of the blue, and you
    did not know you were going to get asked that. So if you want
    to, you can provide it for the record. But if you can let us
    know either way.
        Secretary Young. Secretary Aldridge was asked this question
    at a previous hearing, and he has indicated within the next
    couple of months they will try to provide the results of that
    study.
        Admiral Mullen. We, in the Navy, are participating in that.
        Senator Kennedy. Is this going to be before we mark up the
    authorization bill? It would be worthwhile to have that prior
    to the time of the authorization, it seems to me, just in terms
    of our own information.
        I know, as the Chairman, if we can get that in a timely
    way, I think it would be very helpful at least for our
    committee. Hopefully, we can.
        Admiral Mullen. Yes, sir.
        Senator Kennedy. Senator Sessions. Thank you.
        Senator Sessions [presiding]. Secretary Young, can you tell
    us what the answer is to the $48 billion increase in spending
    for defense, and how it is that the Navy shipbuilding is
    sliding? What are the factors?
        I know some of them, but just for the record, what would
    you tell an American citizen who might ask that question?
        Secretary Young. Can I take a couple of minutes to do that,
    sir?
        Senator Sessions. Please.
        Secretary Young. From the start, I would tell you, the
    Secretary likes to say, we went through with the monies that
    were made available and filled up the pots, and the pots that
    were placed in order were----
        Senator Sessions. First, let me ask you: The Navy budget,
    how much did it go up?
        Secretary Young. I understand it went up about $9 billion,
    $9 billion of the $48 billion.
        So the Secretary talks about filling up the pots and they
    were in priority order, the manpower pot to pay our people, the
    readiness pot to train people, provide spares for them and have
    the equipment ready to perform. We had health bills that we had
    to pay.
        In fact, I could be fairly specific. There was $4 billion
    of the increase that went to the Navy that was asked for
    military personnel salary, health, sea pay, housing allowances;
    $3.4 billion went into steaming hours, flying hours and spares;
    $1 billion went into munitions; and then, about $1.1 billion
    went into RDT&E, which would include increases for programs
    like the joint strike fighter and DD(X).
        So when we filled all those pots with the monies were given
    us, we did everything we could with the monies that were
    available, and we certainly could have used more. So then the
    question becomes, ``Okay. Why did you not buy ships?'' The
    answer is, ``We certainly would have liked to have bought
    ships.''
        But let me add some detail to that, and I am going to start
    back a little on the history here. A couple of years ago, two
    LPDs were requested and they were taken out, because the
    program was not mature enough in people's view to fully fund
    the program.
        Last year, fortunately, we did get full appropriation for
    our T-AKE, but there was a chance we would lose a T-AKE. The
    picture I am painting to you is: we have to think about what
    can be authorized and appropriated in Congress and we can
    reasonably request.
        We have four LPDs fully funded right now and advanced
    procurement for two more. We have four Virginia-class
    submarines fully funded in advanced procurement. We have three
    T-AKEs funded.
        Each of these, Senator, are new classes of ships. So we are
    transitioning from older production to new production classes,
    and we are struggling, as I said in the beginning, to try to
    build our confidence and your confidence in our ability to
    deliver those ships.
        In each of those cases, I think it would be premature to
    have made the first priority to increase the rates in those
    programs in fiscal year 2003. That is not the case in fiscal
    year 2004 and out. As Admiral Mullen testified, we will be
    working aggressively in the fiscal year 2004 program budget
    development process with the programs that we now have more
    confidence in and can come to you and tell you we can deliver,
    to look at increasing those quantities.
        But it seemed incumbent on us to build your confidence in
    the programs we have now. We do have ships in the pipeline in
    these new programs, and we just have to deliver them to you.
        But in fiscal year 2004 and out, I hope we will be
    testifying that we have great confidence in LPD, Virginia-
    class, and T-AKE, and I hope we will bring you a program that
    has additional ships.
        Senator Sessions. When you look at about 300 or so
    requests, you wanted to do 8.9 a year. That is the QDR number,
    right?
        Secretary Young. Yes, sir.
        Senator Sessions. So we were at six last year; six this
    year; five, 2003; five, 2004; seven, 2005; seven, 2006. Is that
    about right?
        Secretary Young. Yes, sir.
        Senator Sessions. So, Admiral Mullen, I guess you have had
    to deal with balancing these issues, too. Do you have any
    thoughts about where we are? Are we making the right decisions
    on this budget? If you were given more money, in your view,
    should it go to increasing the number of the ships, or do you
    have other readiness or research and development issues that
    would still take priority over ships?
        Admiral Mullen. I would like to take just a second to
    commend Secretaries England and Young. I have been working with
    both now for the last half year. I have been in and out the
    shipbuilding business, coming out of the building since 1995,
    and I really do applaud the business approach that Secretary
    Young and Secretary England have taken to try to get this
    right, because we have sometimes bit off more than we can chew.
        We need the ships. There is no question about that. The
    indication, as I specifically testified, is I am working very
    hard in the 2004 budget right now to find a way to come over
    here with more ships.
        That said, both the Secretary and the CNO have stated that
    their first dollar would both go to aircraft or airplanes; and
    the next dollar after that would go to ships.
        I do not want to draw too thick a line through those two,
    because both of those are required for us to recapitalize the
    Navy. So the efforts that are ongoing right now are to find
    funds to commit to both of those procurement accounts, so that
    we can get well above what we are right now.
        Senator Landrieu stated earlier that things always seem to
    be brighter in the outyears, and so I do understand that. I do
    not want to be Pollyannaish about what is available to us in
    the outyears. I just want to restate my commitment to work very
    hard in the 2004 budget to make sure that we have the direction
    headed that we are going up, and then we do not show up over
    here a year from now talking to you about five ships.
        Senator Sessions. Secretary Young, I believe the CNO
    indicated at a previous hearing that he was having to pay down
    some carryover expenses, such as air time and training time
    that were not made part of the fiscal year budget that should
    have been. Therefore, it was behind and there were other
    factors. Is that something that you are going to? Does this
    budget end that?
        Are we going to be able to pay, in this year's time frame,
    our training and other obligations and not to carry that over
    as an obligation in the future? If we were paying that off, I
    believe he said in the next 2 years, will that not free up some
    money for our budget as intended?
        Secretary Young. I think Secretary England has shared the
    CNO's view, and I think Admiral Mullen would like to comment on
    this.
        The thing I would tell you is, once you agree to sustain a
    force at a level, and you have decided it requires a certain
    amount of funds in terms of personnel, pay, flying hours,
    training hours, and spares that you do not buy it and then take
    a holiday on that.
        We are undertaking a review of our programs and processes,
    and I have asked all the SYSCOMs to take a hard look at what we
    are doing now that maybe we do not need to do. How can we do
    business more smartly? I think we need to find ways to save
    money within our resources and within our programs to try to
    enable what Admiral Mullen is talking about, which is buy
    airplanes and ships.
        I do not know what we will find, but we will look for
    savings in the training budget and other segments of the budget
    to try to do things smarter everywhere, not just in
    acquisition.
        Senator Sessions. Well, the simulators have some potential
    for saving, do they not----
        Admiral Mullen. Yes, sir.
        Senator Sessions. --both in ships and aircraft?
        Admiral Mullen. Correct.
        Senator Sessions. Secretary Young, there appears to be
    ships ready to buy. Your unfunded priority list indicates there
    are ship programs to buy, a DDG-51, plus Virginia-class advance
    procurement, and you delayed the CVN(X) due to funding. So do
    you not have ships that do require more funding for 2003?
        Secretary Young. Yes, sir. Secretary England has testified
    that one of his high priorities, if additional funds were made
    available, would be to buy an additional DDG. We have worked
    hard to put at least some advanced procurement with the
    advanced procurement that Congress provided in fiscal year 2002
    towards a third DDG in 2003, if you will. So that is his
    highest priority.
        Then likewise as I mentioned to you, I think our confidence
    in LPD-17 and in Virginia-class is going up substantially.
    Could those programs--I cannot tell you--I can just tell you
    that our confidence is getting to the level that they will be
    part of our discussion in the fiscal year 2004 budget bill,
    whether we need to go back and look at two a year, particularly
    in LPD-17, which replaces ships that are 35-plus years old.
        Senator Sessions. Let me just ask and see if your answer to
    this is yes and if you have a figure, that would be fine. If we
    were to contract, with absolute brilliance and good foresight,
    and knew what we wanted to buy and set about to buy that, and
    we bought it and bid it, over our sustained building program,
    could we get more ships for less money? Could we get more bang
    for our buck than we are? Or are we still losing money because
    of up and down spending, delayed contracts, not following
    through on things, and those kinds of things?
        Secretary Young. I think there are a couple of cases where
    that is true, and we are working to change some of that.
        Senator Sessions. Would you say that it has cost us more as
    a result of delays?
        Secretary Young. There is no question LPD-17 would have to
    lead the list, sir. I regret that your colleagues are not here,
    but in that case, it has been discussed in the media and we are
    talking to the companies. If everybody can agree, we will work
    hard to create a situation where we build all the LPDs at
    Avondale and Ingalls; and in exchange for the four LPDs: two
    that are known right now, i.e, within the current program that
    move south, if you will, two DDGs will move north.
        We will still have both yards, Ingalls and Bath, build
    DDGs, but we will offset the loss of LPD work at Bath with DDG
    work. I think it is more efficient to build 12 ships when you
    have a small class at a single yard.
        Right now, we are in the process, because of the delays in
    LPD-17, of essentially building two lead ships, LPD-17 in the
    south and LPD-19 in the north, if you will.
        There are significant inefficiencies in that class of
    ships, and if the companies can agree this is a reasonable
    business proposition for them, I hope we will reach this
    agreement.
        Senator Sessions. Well, ideally we should be able to plan
    those things out and get a kind of quantity order that can get
    us the cheapest buy on the product possible. Let me mention one
    more thing, and that is our precision-guided munitions.
        I believe we have learned one thing and that is the older
    platform with a superior munition is probably superior to a
    more modern platform with an old outdated munition. Would you
    agree with that?
        Secretary Young. Absolutely.
        Admiral Mullen. Yes, sir.
        Senator Sessions. The fact that you got $1 billion extra
    for precision-guided munitions gives me some comfort, but is
    that enough to keep you where you think you need to be in
    precision-guided munitions?
        We do not want to be in an Afghanistan-type conflict that
    is more sustained and has more targets; they do not even have
    targets in Afghanistan. We really need a lot of precision, and
    we do not have enough. To what extent is the Navy responsible
    for purchasing in your budget? Whose budget supplies most of
    these?
        Admiral Mullen. We recognize this as a serious deficiency
    in the previous budgets, and we have taken a significant round
    turn in that investment with respect to the future. We have
    been well-supported by you and your colleagues here on the Hill
    with respect to the emergency funds, with respect to the war.
        It is known fairly widely and publicly that we did not have
    all the munitions we wanted when this started. We have
    committed in the budget--and it is back to the very painful
    choices we had to make that included the current readiness, in
    which we have actually purchased a significant increased
    quantity of precision munitions, in particular laser guided
    bombs and JDAMs, as well as Tomahawks, which are the three
    leading munitions right now that we need to make sure our
    magazines are full.
        That includes ramp-ups at the contractors, investments to
    do that, to get to a maximum production capability, that tied
    to your shipbuilding question earlier, will get us the best
    price for each one of those units. We are on the other end of
    that spectrum.
        Senator Sessions. Let me just ask you. These older ships
    are properly equipped and can project our forces exceedingly
    well. Would that not be a cost effective way to help get our
    numbers up, through using the most sophisticated weaponry even
    if we have to use an older platform?
        Admiral Mullen. Yes sir, and I think this speaks to the
    decision in this budget to decommission the 963s, and you had
    talked about your time on O'Brien, which you were impressed,
    and rightfully so.
        Clearly, that was a trade we made to take some near-term
    risk in terms of being able to garner about $1.5 billion in the
    DD-963 program, people and program, and invest that in the
    future, in the kinds of future ships that we need to invest.
    That was an internal decision to accept risk there. The
    specific capability----
        Senator Sessions. Sure, but was that an attempt to do what
    the President suggested, leap a generation? Are you taking a
    chance to leap forward?
        Admiral Mullen. Clearly, into the----
        Senator Sessions. But is it a good risk?
        Admiral Mullen. I think it is a good risk, yes, sir, into
    not just DD(X), but also the littoral combat ship and the
    technology and the real warfighting mission needs we have in
    anti-submarine warfare, mine warfare, and surface warfare that
    that ship will provide.
        Additionally, the precision capability that the 963s can
    also be provided by many other ships. The trade, very
    specifically, is about the same number of vertical launch cells
    or Tomahawk cells for the SSGN investment as we bring those
    online towards the end of FYDP, and the Spruances are retired.
    But the Spruances have become a very expensive platform for us
    to operate.
        Senator Sessions. I have some questions along those lines
    that I would like to submit to you.
        Admiral Mullen. Sure.
        Senator Sessions. We thank you very much for your candid
    and thoughtful comments. There are no easy answers; there is no
    free lunch.
        Any initiative you take when you have a limited number of
    dollars means some other initiative did not get advanced like
    perhaps its defenders would like.
        We are trying to ask, Senator Kennedy and I are, two
    things: can we build more ships, and how can we find the money
    to do so? Can we avoid inclining our numbers to at least some
    degree through forward deployment, through keeping all the
    ships? Maybe there is a skeletal troop situation on the forward
    deployed ships that we could have people back home with their
    families, but if a crisis occurred, they could be immediately
    moved out to move forward.
        I just think you are apparently making some rather historic
    efforts to evaluate those kinds of possibilities, which I would
    support, and, I believe, Senator Kennedy supports.
        So thank you for your service. Thank you for the effective
    way you have helped us be successful in Afghanistan.
        Do you have anything that you would like to add for the
    record or otherwise at this point?
        Admiral Mullen. No, sir.
        Secretary Young. No, sir.
        Senator Sessions. All right. There are no other questions
    and no other members here, so we are adjourned.
        Admiral Mullen. Thank you, sir.
        Secretary Young. Thank you very much.
        Senator Sessions. Thank you.
        [Questions for the record with answers supplied follow:]

                Questions Submitted by Senator Edward M. Kennedy

                              CARRIER HOMEPORTING

        1. Senator Kennedy. Admiral Wachendorf, the Navy has said that the
    Navy has to have 7.6 aircraft carriers in the active fleet in order to
    support one carrier on station full-time in the Northern Arabian Sea.
    This reflects assumptions about keeping the CNO-mandated operational
    tempo goals and maintenance down times, among others. The Navy also
    indicates that having the carrier homeported in Japan allows the Navy
    to have only 1.7 carriers in the active fleet provide a continuous
    presence of one carrier in the Western Pacific.
        In your discussion of the forward homeporting options, you
    discussed a number of vessels such as submarines and other support
    ships in Guam. However, you made no mention of re-looking at options to
    homeporting carrier battle groups in locations other than the current
    group in Japan, other than to say, ``There are numerous ports
    throughout the region that have the capability/infrastructure to
    conduct port calls, but the required infrastructure to support the
    permanent homeporting is not available and would require substantial
    investment by the U.S. and the host nation.'' Could you give us some
    estimates of the costs that would be required to establish the
    appropriate infrastructure?
        Admiral Wachendorf. Initial estimates for building the required
    port facilities and supporting infrastructure to homeport a CVBG, with
    an air wing assigned, in Guam would cost approximately $3 billion.

        2. Senator Kennedy. Admiral Wachendorf, how recent are these
    estimates?
        Admiral Wachendorf. These estimates were developed in September
    2001.

        3. Senator Kennedy. Admiral Wachendorf, how would these costs
    compare with the costs of the number of carrier battle groups that
    would have to be maintained in the inventory to provide equivalent
    forward presence?
        Admiral Wachendorf. It would take three to five times the number of
    carrier battle groups based on the west coast and Hawaii to provide the
    same presence and crisis response capability as is currently provided
    by the forward deployed naval forces (FNDF) in Japan. The procurement
    cost of one CVN alone exceeds the initial cost estimates for
    homeporting a CVBG and air wing in Guam.

                  DD-963 WARFIGHTING CAPABILITY AND RETIREMENT

        4. Senator Kennedy. Admiral Wachendorf, your statement would appear
    to minimize the contribution of the DD-963. You said in the prepared
    statement that the DD-963 ``provides only marginal warfighting
    capability due to the ship's older and more focused mission combat
    system.'' These destroyers have been providing a significant
    contribution to the Navy's ability to maintain the required number of
    Tomahawk missiles in theaters to support requirements of the theater
    commanders in chief under the global naval force presence policy
    (GNFPP). In fact, I believe that several DD-963s just returned from
    operations in the Afghanistan operations, having fired a number of
    Tomahawk missiles against priority targets. Since there is no chance
    that the Navy will have additional Tomahawk missile carrying capability
    in the near-term, isn't this action going to complicate the Navy's
    ability to maintain the required number of Tomahawk missiles in
    theaters to support requirements of the theater commanders in chief
    under the Global Naval Force Presence Policy?
        Admiral Wachendorf. The DD-963 class destroyers are contributors to
    both our current operations and the GNFPP. DD-963 class ships do not
    have the flexibility that the newer Arleiqh Burke-class DDGs have, but
    DD-963 class ships will continue to deploy, carry Tomahawk missiles and
    be counted in the GNFPP. The DD-963 class ships will continue to be
    major contributors to our operations until decommissioned. With the
    decommissioning of the DD-963-class ships, the Tomahawk missile
    requirements in the GNFPP will be carried out, by the more flexible and
    newer Burke-class DDGs as well as cruisers and submarines. The Navy
    will be able to maintain requisite quantities of Tomahawk missiles in
    theater to support the requirements of the theater commanders in chief
    under the GNFPP, given the current DD-963 decommissioning schedule. The
    Navy is commissioning new DDG-51 class destroyers through the FYDP.
    These ships have launcher capacities of 96 Tomahawk-capable, vertical
    launch cells, as opposed to the 61-cell capacity of the DD-963 class
    ships. The current DDG-51 program of record commissions five ships in
    fiscal year 2003, three in fiscal year 2004, four in fiscal year 2005,
    and two in fiscal year 2006, for a net gain of 1,344 launcher cells by
    the end of 2006. This schedule produces a yearly net increase of
    launcher cells, and an overall net gain of 185 Tomahawk-capable,
    vertical launch cells by the end of DD-963 class service.

        5. Senator Kennedy. Admiral Mullen, Admiral Wachendorf raised the
    issue of the early retirement of the DD-963 destroyers. These
    destroyers have been providing a significant contribution to the Navy's
    ability to maintain the required number of Tomahawk missiles in
    theaters to support requirements of the theater commanders in chief
    under the GNFPP. What steps is the Navy going to have to take to make
    up for the loss of the missile launchers in trying to meet the GNFPP
    requirements?
        Admiral Mullen. Due to the continual commissioning of DDG-51 class
    destroyers as replacements for the DD-963 class destroyers, Navy incurs
    no net decrease in missile launcher cells under the program of record
    (PB 03). Navy will experience a minimal, 1-year launcher cell loss
    under a worst-case accelerated decommissioning-schedule, but will
    continue to be able to meet the GNFPP requirement. If all DD-963 class
    ships are  decommissioned by the end of 2004, there will be a net
    launcher cell loss of 391 cells which will be recovered, through DDG-51
    commissionings by the end of 2005.
        Navy currently maintains a reserve capacity in the launchers of
    most deploying DD, DDG, and CG class ships. Increasing the TLAM loads
    on the remaining deployers will maintain theater GNFPP levels until the
    net launcher cell loss is recovered without negatively impacting other
    weapons loads.

                    ``BLUE/GOLD'' CREWS--``HORIZON'' CONCEPT

        6. Senator Kennedy. Admiral Wachendorf, in your statement you
    mentioned the Horizon concept, which is similar to Blue/Gold manning on
    Trident ballistic missile submarines where there are two crews for one
    submarine. However, you did not appear to give the Horizon concept much
    consideration as a viable alternative for crew manning to support
    presence requirements. While I am not ready to recommend the Horizon
    concept as THE answer, I am concerned that, if we try to meet our
    national security requirements with a smaller fleet that is implied by
    the current shipbuilding plan, or even try to meet increased
    requirements associated with the war on terrorism with our current
    force, we may be trying to do this at the expense of our sailors and
    marines.
        I know that our men and women in the services will make sacrifices
    in defense of the country, but I do not believe that we should base our
    plans on the expectation that they should continue to make such
    extraordinary sacrifices for the foreseeable future. Is there a firm
    Navy plan for fleshing out these analyses that would provide more
    thorough reviews of such approaches as the horizon concept and other
    options for increasing forward naval presence?
        Admiral Wachendorf. Yes, the Navy is fleshing out these theories by
    conducting two pilot programs in the Pacific Fleet employing the
    deployment of Spruance-class destroyers beginning with the Abraham
    Lincoln battle group and Arleigh Burke-class guided missile destroyers
    beginning with the Constellation  battle group. Both groups of ships
    will swap crews at approximately 5.5 months deployed. The crews will
    again swap once more at the 10.5 month deployed point. At the end of
    these pilots, various factors concerning crew morale, welfare, and
    effectiveness as well as ship performance and maintenance, will be
    evaluated to ensure that our attempt to relieve OPTEMPO stress on our
    sailors ship is, in fact, accomplished. If we find our pilot did not
    meet our expectations, we will discontinue this initiative.

                       DE-SCOPING TO REMAIN WITHIN BUDGET

        7. Senator Kennedy. Admiral Mullen, your prepared statement on page
    three says that the Navy is prepared to live within the budget for a
    ship program by de-scoping or delaying capability to maintain the
    funded, executable program. How is this statement consistent with
    statements by the Chief of Naval Operations that we need to build the
    correct numbers of ships, but we also need to ensure that they have the
    right capabilities as well?
        Admiral Mullen. I am in complete agreement with the Chief of Naval
    Operations when he stated that we must build the correct number of
    ships with the right capabilities. However, both the CNO and I also
    recognize that until we have fully institutionalized plans to control
    cost growth and achieve stability in our shipbuilding programs, we may
    have to resort to descoping or delaying capability to deliver our
    ships. We are taking appropriate management actions such as funding
    shipbuilding programs to realistic, independent cost estimates,
    properly budgeting change orders and working closely with industry to
    mitigate the growth of costs in our shipbuilding programs and to
    prevent a recurrence of the creation of prior year bills for ships,
    requested in fiscal year 2003 and future budget submissions. If costs
    continue to rise in spite of these management efforts, the Department
    is prepared to descope or delay capability to maintain an executable
    program within budget constraints.

                              DDG-51 REQUIREMENTS

        8. Senator Kennedy. Admiral Mullen, you indicated that the
    requirement for buying DDG-51 destroyers had been raised to meet a
    requirement for providing missile defense capability. Is there an
    official requirements document that has been vetted through the Navy
    Requirements Oversight Council or the Joint Requirements Oversight
    Council to validate this requirement?
        Admiral Mullen. The additional requirement for DDG-51s stems from 3
    years of OPNAV warfare analysis. This analysis was driven, in part by
    the requirement (as stated in the 2003 Defense Planning Guidance (DPG))
    for Navy to study the forward basing of ballistic missile defense (BMD)
    (formerly theater ballistic missile defense) capable surface
    combatants. Capability shortfalls identified in these analyses
    (amphibious ready group/combat logistics force escort, as well as BMD,
    littoral anti-submarine warfare and mine warfare) are those normally
    delivered by multi-mission surface combatants (e.g., DDG-51).
        The Navy is developing a new concept of operations that provides a
    global response capability by adding surface escorts to the amphibious
    ready group (forming the expeditionary striking force) and by standing
    up dedicated surface action groups (strike/land attack in the near-
    term, becoming BMD capable as weapons and technologies mature). These
    additional DDGs (Aegis) are required in order to support the carrier
    battle group, expeditionary striking force, and surface action groups
    that form the key force elements of this concept.

        9. Senator Kennedy. Admiral Mullen, since the Defense Department
    has canceled the Navy area missile defense program, I presume that your
    requirements for missile defense capability are tied to meeting the
    sea-based mid-course program requirements within the Missile Defense
    Agency's portfolio? Has the Navy chosen the DDG-51 as the preferred
    platform to carry the sea-based mid-course missile defense capability?
        Admiral Mullen. No. DPG 2003 calls for the ability to provide
    mobile, projected missile defense, a capability that can only be
    delivered by ships. While the increased number of DDG-51s could
    possibly provide this capability, the necessity for ensuring access in
    light of the evolving BMD threat, as well as ensuring a global presence
    and response capability drives the number of DDGs required.
        The current sea-based mid-course program is undergoing an extensive
    concept definition review to characterize the system that will
    transition to the Navy. Current plans are to deploy sea-based mid-
    course capability on cruisers. Although the Navy area program planned
    for deployment on cruisers and destroyers was canceled, the requirement
    remains for a Navy terminal defense capability. Missile Defense Agency
    is evaluating alternatives for a sea-based terminal defense capability.

                     DESTROYER SHIPBUILDING INDUSTRIAL BASE

        10, 11. Senator Kennedy. Secretary Young, during the hearing we
    discussed the prospects for maintaining the destroyer industrial base
    with the current Navy shipbuilding plan that includes only two DDG-51s
    per year through fiscal year 2007, and a DD(X) in fiscal year 2005. I
    believe you indicated that we should perhaps discount the conclusions
    of the previous Navy studies since they contained flawed or out-of-date
    assumptions about the shipyards or the workloads in the shipyards.
    Could you tell which assumptions you believe are flawed?
        Is it the Navy's assessment now that the current shipbuilding plan
    is adequate to support the destroyer industrial base?
        Secretary Young. The Navy's November 2000 Update to the 1993 DDG-51
    Industrial Base Study reaffirmed that both DDG-51 class shipyards can
    rcmain viable with the shared, annual workload of three new procurement
    DDG-51s, plus additional work. The report was based on the PB01 budget
    profile and pointed out a severe risk due to the workload problem
    during the transition from the DDG-51 program to the DD 21 program.
        There have been changes both in shipbuilding budgeted quantities
    and corporate structure since the last update that need to be taken
    into account when assessing the adequacy of the shipbuilding plan to
    support the destroyer industrial base.
        Quantitative Assumption Changes Since the Last Update:

             PB02 increased the DDG quantity procured in fiscal
            year 2002 to three.
             PB02 provided incremental funding for LHD-8 starting
            in fiscal year 2002 in lieu of the PB01 planned date for LHA(R)
            in fiscal year 2005.
             PB03 added six DDGs and deleted three DD 21 surface
            combatants from the PB02 surface combatant profile. That helped
            to mitigate effects on the industrial base of the PB01 profile.
             Ingalls and Bath Iron Works have both implemented
            leanmanufacturing programs to manage efficiently at low rate
            production.
             The U.S.S. Cole that was repaired at Ingalls, created
            significant unplanned work.

          The addition of six DDGs to the shipbuilding profile in PB03 has
    stabilized and somewhat mitigated the severe industrial base transition
    risk to DD(X).
        Also, since the respective mergers with General Dynamics (GD) and
    Northrop Grumman (NG), Bath Iron Works (BIW), and Ingalls (ISI) can no
    longer be treated as stand-alone companies. Today, General Dynamics and
    Northrop Grumman are treating BIW and ISI as part of their larger
    shipbuilding divisions and are working hard to mitigate workload
    imbalances by allocating work across their entire shipbuilding
    operation, taking advantage of the centers of excellence that exist
    within those companies.
        Examples of Industry Action to Mitigate Workload Imbalances
             Northrop Grumman has transferred some LPD-17 module
            construction and outfitting from Avondale to Ingalls to take
            advantage of the experienced and under utilized combatant
            workforce.
             It is anticipated that some additional work will go to
            Ingalls, if the Navy moves all LPD-17 work to NG.
             GD is exploring the merits of using their state-of-
            the-art Quonset Point steel fabrication facility to support BIW
            surface ship construction.
             Both corporations are examining steps required to
            ``right size'' their surface ship workforce for a low rate
            production environment of two per year reflected in PB03.
             Both companies are also aggressively incorporating
            lean manufacturing techniques and processes that should improve
            their production efficiencies in years of lower production
            rates.
             GD has invested in construction of a state-of-the-art
            land-level fabrication facility, which will facilitate enhanced
            construction efficiency and reduce the man hours historically
            required to construct surface combatants.

        However, a two ships per year DDG procurement rate is not without
    cost to the Government, which will pay increased unit costs.
    Furthermore, once the shipbuilders have downsized to accommodate low
    rate production, additional non-recurring costs would likely be
    incurred to restore an increased level of production if surface
    combatant procurement rates increased outside the FYDP.

                                  DD(X) IN R&D

        12. Senator Kennedy. Secretary Young, your new strategy for buying
    the DD(X) is to purchase a ship in fiscal year 2005 using research and
    development funds. Using this approach, you said that, ``Being able to
    adjust the RDT&E budget for the lead ship provides the best chance to
    control costs and define a production process that allows the Navy to
    affordably build the entire class of these next-generation surface
    combatants.'' It would appear that this would entail waiting until
    building the lead ship is fairly advanced in the production process to
    ensure that follow-on production efforts realize the benefits of these
    developments on the first ship. Under this approach, when would you be
    ready to start building the follow-on production ships?
        Secretary Young. A follow-on DD(X) ship production decision will be
    based upon several factors, including the maturity of the technology
    prototype development, component/system testing and progress of the
    ship's design. Progress in these areas will be assessed through the
    preliminary and critical design process, balanced against the
    validated, time-phased operational requirements document, which in turn
    will facilitate an informed follow-on ship start of production
    decision.

        13. Senator Kennedy. Secretary Young, how would this differ from
    current practices of providing a single gap year between lead ship and
    the first follow ships?
        Secretary Young. Funding the lead ship in RDT&E provides greater
    program flexibility than the current practice of providing a gap year
    between the lead ship and first follow ship, both funded in SCN. There
    will be opportunities with funding the lead ship in RDT&E, for annual
    reviews and adjustments to program capability and associated funding
    requirements, based upon the status and schedule for technology
    development and component/system testing. Depending on acquisition
    strategy and ship quantity profile, it may also be useful to fund the
    first follow ship in RDT&E. For example, this approach may be used if
    there is a lead yard/follow yard acquisition strategy or the first
    follow ship is procured in the year immediately following the lead
    ship.

        14. Senator Kennedy. Admiral Mullen, there would appear to be no
    explicit commitment to building more than the one DD(X) in R&D in the
    Future Years Defense Program (FYDP). Is there any specific commitment
    from the Office of the Secretary of Defense to build more than one
    DD(X) if the technologies in the DD(X) research and development program
    yield capabilities that can be fielded?
        Admiral Mullen. The number of DD(X)s that will be built has not yet
    been determined. The size of the DD(X) class will be based on several
    factors, such as current force structure requirements, rate of
    decommissioning other surface combatants and the budgetary balance
    between fleet maintenance and force recapitalization requirements. The
    FYDP submitted with the fiscal year 2003 President's budget provides
    research and development funding for construction of the first DD(X)
    commencing in fiscal year 2005. In order to provide an orderly
    transition to DD(X), as its technology matures, the fiscal year 2003
    President's budget includes an additional six DDG-51s in fiscal years
    2005 to 2007. The funds set aside for these destroyers in the FYDP
    could be transitioned to build DD(X)s in the outyears.

                         NAVY'S FIRE SUPPORT CAPABILITY

        15. Senator Kennedy. Admiral Mullen, the subcommittee has heard
    testimony over the past several years that the only solution to meeting
    the Marine Corps' surface fire support requirements would be the
    introduction of the capability that was going to be available on the DD
    21, specifically the two 155 millimeter gun batteries that DD 21 was
    supposed to provide. Now the Navy has outlined a DD(X) program that
    would build a demonstration ship in R&D in fiscal year 2005, with no
    explicit plan to buy any more new design DD(X) vessels after that. We
    also know that the extended range guide munition has slipped again, the
    Navy has canceled the land attack standard missile, and there is no
    funded plan to build the advance land attack missile. Is there any
    prospect that the Navy will be able to meet the Marine Corps' fire
    support requirements during the current FYDP? If so, when would that
    be?
        Admiral Mullen. No, the Navy will not fully meet the Marine Corps'
    requirements for NSFS until outside the FYDP when DD(X) enters the
    fleet. DD(X) will have the capacity to carry the variety and volume of
    offensive, precise firepower that will enable our United States Marine
    Corps and light mobile United States Army Forces to complete their
    littoral missions. The 155mm advanced gun system (AGS), with ``fully
    automated'' ammunition handling system and a family of munitions/
    propelling charges, will achieve ranges of up to 100 nautical miles.
    With AGS, DD(X) will have the ability to deploy a high volume of
    affordable, precision-guided munitions with significantly improved
    ranges, accuracy, volume, firing rates and response times compared to
    the current generation of NSFS systems. Additionally, the Navy is
    assessing the affordability of submitting a future budget request for
    an ALAM program, which would be fielded with DD(X).

                           LPD-17 PROGRAM RESTRUCTURE

        16. Senator Kennedy. Secretary Young, you mentioned during the
    hearing that the Navy and the LPD-17 contracting team is considering
    moving LPD-17 construction from General Dynamics (Bath) to Northrop
    Grumman (Avondale and Ingalls). In consideration for this, construction
    of one DDG-51 would be transferred from Northrop Grumman to General
    Dynamics for each LPD-17 shifted.
        You indicated that it might be more efficient to build all LPDs in
    the Northrop Grumman yards. What wasn't clear from your testimony was
    what is required from the Federal Government's side to make this
    agreement work. Does your analysis of what is more financially
    attractive to the Navy include the costs of any extra DDG-51s that are
    not in the current shipbuilding plan that might be necessary to make
    this transfer work?
        Secretary Young. There is no Federal Government action required to
    shift the LPD-17 class ship construction work from General Dynamics to
    Northrop Grumman, since the contractual arrangement for LPD-17 class
    ships built by BIW is between Northrop Grumman and BIW. However,
    because of the different rates/workforce mix at Northrop Grumman, the
    Government would negotiate a contract modification to its contract with
    Northrop Grumman to establish a new cost/incentive structure for
    construction of the BIW ships transferred to Northrop Grumman.
        Our analysis did not include the costs associated with any DDG-51
    ships that are not in the current shipbuilding plan. However, the Navy
    will benefit from these additional ships, which are necessary to
    maintain surface combatant force structure and benefit the industrial
    base.

                    LHA REPLACEMENT PROGRAM DECISION PROCESS

        17. Senator Kennedy. Admiral Mullen, the five amphibious assault
    ships in the LHA class will have to be replaced over the next decade or
    so. LHD-8 would presumably replace one of them. I understand that the
    Department of the Navy has not come to a decision on the requirements
    for the rest of the LHA replacement program. Reports indicate, for
    example, that the size of a potential replacement ship ranges from
    roughly 40,000 tons to as large as 75,000 tons. Why is there such a
    difference in displacement among the options that are under
    consideration?
        Admiral Mullen. The DOD acquisition process for major new systems
    is designed to ensure careful consideration of mission requirements,
    system capabilities, and costs. The process includes specifying the
    mission need for a new system, considering a broad range of alternative
    systems in a formal analysis of alternatives (AoA), and specifying
    goals and thresholds for key performance parameters in an operational
    requirements document (ORD) that is reviewed by the Services and CINCs,
    and ultimately approved by the JROC.
        AoAs are intended to consider a wide range of alternatives in terms
    of capabilities and costs. The LHA(R) AoA is considering broad
    categories of alternatives including a repeat LHD-8 (with fact-of-life
    changes), a modified LHD, and new ship designs. There is a fairly broad
    range in the full-load displacement of the alternative ship designs,
    which is due to differences in the following factors: amphibious lift
    capacity, aviation capabilities, service life allowances, habitability
    standards, and survivability features. The AoA will show how variations
    in these types of factors affect the size and cost of the system and
    its ability to carry out the types of missions identified in the LHA(R)
    mission need statement (MNS), and thereby provide DON and DOD decision
    makers with clear and consistent information on cost and operational
    effectiveness for a range of choices. This information is intended to
    help them understand the choices and execute sound judgment on the
    appropriate balance of capability and affordability, taking into
    account the many competing requirements and budgetary demands. LHA(R)
    AoA results are due in summer 2002.

        18. Senator Kennedy. Admiral Mullen, when can we expect to see some
    resolution of the issues behind such a disparity in sizes of potential
    LHA replacement ships?
        Admiral Mullen. LHD-8 will replace one of the aging LHA-class ship.
    The other four LHAs will be replaced by LHA(R). The ongoing LHA(R) AoA
    process is considering a range of options including a repeat LHD-8
    (with fact-of-life changes), a modified LHD, and new ship designs.
    Based on the analysis presented in the AoA, results of which are due in
    summer 2002, the Navy will determine the optimal alternative for the
    LHA(R).

        19. Senator Kennedy. Admiral Mullen, why should we be budgeting
    advance procurement funding in Shipbuilding and Conversion, Navy for
    LHD-9 when we have not decided on a configuration for the LHA
    replacement program, and when we have not paid off the rest of the $500
    million+ we will owe on LHD-8 even after the funds in the fiscal year
    2003 budget for LHD-8 are provided?
        Admiral Mullen. The LHA replacement analysis of alternatives is
    ongoing and will report out later this summer. The configuration for
    LHA(R) will not be determined until then.
        The $10 million in SCN AP funding was shifted to LHD-9 by the
    Undersecretary of Defense Comptroller's office during the fiscal year
    2003 OSD budget review process. Full funding of the LHD-8 in fiscal
    year 2003 is a high priority item on the CNO's Unfunded Requirements
    List.
                                     ______

                Questions Submitted by Senator Mary L. Landrieu

                            INNOVATIONS IN MANPOWER

        20. Senator Landrieu. Admiral Wachendorf, the portion of your
    testimony that deals with crew swapping is very interesting to me. I
    have always urged the various services to find innovative ways to
    increase operational tempo (OPTEMPO) where needed. I am excited to hear
    that Vice Admiral Lafleur is undertaking the first pilot program in
    this area. Does the Navy view crew swapping as a long-term plan to
    increase OPTEMPO or is it meant to meet the needs of our current
    situation in the war on terror?
        Admiral Wachendorf. The general area of increasing presence via
    alternative manning concepts was being studied prior to September 11.
    As such, it is potentially part of a long-term plan to increase OPTEMPO
    without the negative impacts on individual OPTEMPO. It could also be
    viewed as a means of maintaining pre-September 11 presence levels with
    a smaller force structure. The crew swaps described are two pilot
    programs in the Pacific Fleet employing the deployment of Spruance-
    class destroyers with the Abraham Lincoln battle group and Arleigh
    Burke-class guided missile destroyers with the Constellation battle
    group. Both groups of ships will swap crews at approximately 5.5 months
    deployed. The idea is to take Fletcher (a Spruance-class destroyer in
    the Lincoln battle group) and replace that crew with the Kincaid crew
    (a Spruance-class destroyer in Constellation battle group). The ship
    (Kincaid) would not deploy, but the (Kincaid) crew would fly out to
    Australia, Singapore or another location to take over the ship from the
    currently deployed crew. The Oldendorf crew from the Nimitz battle
    group will relieve the Kincaid crew. There may be one more iteration
    with a ship from the Vinson battle group.
        Similarly the crew of Higgins (a DDG in the Constellation battle
    group) will be relived on station by the crew of John P. Jones (Nimitz
    battle group) and then by Benfold (Vinson battle group).
        At the end of these pilots, various factors concerning crew morale,
    welfare, and effectiveness will be evaluated to ensure that our attempt
    to relieve individual OPTEMPO stress on our sailors ship is; in fact
    accomplished. If we find our pilot did not meet our expectations, we
    will discontinue this initiative.

        21. Senator Landrieu. Admiral Wachendorf, even though crew swapping
    will result in a longer period of time in port between cruises that
    will allow maintenance and necessary upgrades to be done, will the
    longer time at sea put more wear and tear on our ships and increase
    operations cost?
        Admiral Wachendorf. Although the crew swapping initiative will
    reduce time spent transiting to and from forward areas, the anticipated
    longer times at sea and the longer times between homeport periods may
    put additional wear and tear on our ships and increase operations
    costs. This is one of the aspects of the pilot program that will be
    evaluated before the Navy makes a decision regarding expansion and/or
    adoption.

               HISTORICAL SERVICE LIFE VS. ESTIMATED SERVICE LIFE

        22. Senator Landrieu. Admiral Wachendorf, in your testimony, you
    point out that there is a disparity between the historical service life
    of a ship and the estimated service life. I think this is a difficult
    fact to stomach, as it seems to indicate that we are consciously making
    rosy estimates for a ship's length of service. If this is so, something
    must be done to bring our estimated service life even with the
    historical service life. You do point out that this disparity is mainly
    present in ships that have not been modernized. When one of our ships
    does receive the necessary upgrades, does it, in fact, fill out its
    estimated service life or does it still fall short?
        Admiral Wachendorf. With appropriate upgrades and modernization
    packages, many of our ships have met or exceeded estimated service life
    (ESL). For example, having undergone periodic scheduled maintenance and
    upgrades, Austin-class amphibious transport dock ships will have served
    nearly four decades when they are replaced by LPD-17. Other ship
    classes such as Farragut and Adams-class guided missile destroyers,
    which were retired at 31 to 33 years of service, benefited from a
    series of planned combat systems upgrades. The new threat upgrade (NTU)
    package was considered for these ships, but was terminated since
    modernization would not have been cost effective given the limited
    service life remaining. Most destroyer classes, including Spruance-
    class with vertical launch system capability added, have been
    modernized to last 29 to 30 years, just short of the 35 year ESL.
    Generally, the decision to retire a ship early or to modernize it to
    reach ESL is a function of the continued relevance of its combat
    systems to emergent threats versus modernization, operational and
    support costs.

        23. Senator Landrieu. Admiral Wachendorf, is this disparity taken
    into consideration when the Navy projects fleet strength for future
    years?
        Admiral Wachendorf. Estimated service life is the primary factor
    used for long-term estimates of fleet strength. The referenced
    disparity between estimated service life and historical service life is
    a fact of life resulting from a ship's operational tempo, maintenance,
    and most significantly the continued relevance of installed technology
    to emergent threats that cannot be accurately estimated very far into
    the future. Typically, near-term investment decisions are based on
    warfighting capability to be maintained or gained versus acquisition
    and operational costs.

                               NEW OVERSEAS BASES

        24. Senator Landrieu. Admiral Wachendorf, when you discussed the
    augmentation of Navy presence at pre-established installations, you
    only mentioned the Pacific. Did you consider increasing U.S. presence
    in any other theaters, specifically, the Atlantic/European region?
        Admiral Wachendorf. Requirements for augmentation of Navy presence
    at pre-established installations in the Pacific were developed in
    concert with the Joint Staff and CINCs and were based on regional
    stability concerns throughout the world.

                            OVERALL SHIP PROCUREMENT

        25. Senator Landrieu. Secretary Young and Admiral Mullen, your
    budget for ship procurement requests just $6.1 billion for five ships.
    This is half the number of ships required to sustain your present force
    levels and is $5 billion below the Clinton administration's plan for
    fiscal year 2003 request of $11 billion for eight ships that was
    included in the fiscal year 2001 request. Each year, no matter who is
    in the White House, the Navy comes before Congress to state that the
    Navy plans to address the shortfall in ship procurement next year, or
    the year after. Unfortunately the outyears never come. Would you please
    submit for the record a copy of the Navy's shipbuilding plans included
    in the Future Years defense Program for each of the last 8 years?
        Secretary Young and Admiral Mullen. Navy's shipbuilding plan is
    reviewed annually and programmed quantities can vary widely from year
    to year as funding priorities change. For a given year, the following
    table compares the projected quantities of new ship construction when
    first programmed in the FYDP versus the actual budgeted quantities for
    that year.

    ----------------------------------------------------------------------------------------------------------------
                                                                            Fiscal Year
                Quantity of Ships            -----------------------------------------------------------------------
                                               1995    1996    1997    1998    1999    2000    2001    2002    2003
    ----------------------------------------------------------------------------------------------------------------
    Projected...............................      10       9       8       6       7       7       6       5       6
    Budgeted................................       4       3       4       4       6       6       6       6   5 \1\
    ----------------------------------------------------------------------------------------------------------------
    \1\ Requested.

        26. Senator Landrieu. Secretary Young and Admiral Mullen, if
    additional funding were available, what would your priorities for
    shipbuilding be?
        Secretary Young and Admiral Mullen. If additional funding were
    available for shipbuilding, Navy would invest in a combination of new
    construction, conversions, and overhauls to maintain force structure
    and required warfighting capabilities, as well as to provide workload
    stability in the shipbuilding industry. The Department's priorities for
    shipbuilding are as follows:

             DDG-51: Add third ship in fiscal year 2003.
             DDG-51 AP: Add AP for third DDG in fiscal year 2004.
             LPD-17: Add second ship in fiscal year 2003.
             Submarine Engineered Refueling Overhauls (ERO): Add
            one ERO in fiscal year 2003.
             LHD-8: Fully fund the ship in fiscal year 2003
            (liquidates fiscal year 2004-fiscal year 2006 incremental
            funding tail).
             Virginia-class Submarine AP: Procure an additional
            ship set of nuclear AP and non-nuclear AP for a future ship.
             CVN-69 RCOH: Fund $24 million of work removed from the
            original overhaul package due to funding constraints. (Assumes
            congressional support for $59 million ``cost of war'' request
            contained in Fiscal Year 2002 Supplemental Request.)
             CG Conversion: Fund two Baseline four conversions and
            non-recurring engineering costs in fiscal year 2003.

                                     LPD-17

        27. Senator Landrieu. Secretary Young and Admiral Mullen, it seems
    to me one of the reasons the shortfall for readiness funding is so high
    is that we are stuck operating ships with higher operating and manning
    costs. The 12 ship LPD-17 class is scheduled to replace 41 older
    obsolete ships. The LPD-17 class will operate with roughly one third
    the manpower (4,344 sailors versus 13,000 sailors). Can't we get our
    operations, maintenance, and personnel costs under control by
    continuing to move forward with modernization programs like LPD-17?
        Secretary Young and Admiral Mullen. You are correct that moving
    forward with our ship modernization program will have a dramatic affect
    on operations, maintenance, and personnel costs. In the specific
    example you bring up, the LPD-17 functionally replaces four classes of
    ships (LKA-113, LPD-4, LSD-36, and LST-1179 classes) resulting in a net
    savings to the Navy of almost 9,000 sailors and an operations and
    support cost avoidance of over $4 billion once the final LPD-17 ship is
    delivered.
        In the particular area of ship personnel reductions, modernization
    will pay large dividends for all our programs with the side benefit of
    improved quality of life for sailors. The DD(X), JCC(X), and CVN(X)
    platforms will operate with 20-50 percent fewer sailors per ship
    compared to the ships they will replace.

                               ADEQUATE TRAINING

        28. Senator Landrieu. Admiral Wachendorf, I understand that Admiral
    Natter and Admiral Fargo have developed a schedule to sustain two
    carrier battle groups and two amphibious ready groups in the war zone,
    but that is being done by shrinking the inter-deployment training
    cycle. I am concerned that, over time, this will result in our
    deploying forces being less well-trained. What force structure of
    carrier battle groups and amphibious ready groups is required to
    maintain this level of presence without shortening the inter-deployment
    training cycle or extending deployment lengths beyond 6 months?
        Admiral Wachendorf. Navy is capable of maintaining two aircraft
    carriers in the war zone with the current fleet composition (12 CVBGs
    and 12 ARGs) by changing most peacetime assumptions to those
    appropriate for combating the war on terrorism. These changes include:
    increasing transit speeds to theater; compressing training and
    maintenance timelines; and reducing at home and at sea quality of life
    stand-downs and port visits. Although the benchmarks of peacetime
    PERSTEMPO, 6-month deployments and two to one turn-around ratios are
    maintained; the maintenance, training, and personnel costs associated
    with the increased OPTEMPO will grow.
                                     ______

                  Questions Submitted by Senator Jeff Sessions

                           VIRGINIA-CLASS SUBMARINES

        29. Senator Sessions. Secretary Young, what are the savings that
    could be achieved for Virginia-class submarines fiscal year 2003
    through fiscal year 2007 by applying multiyear procurement?
        Secretary Young. The savings associated with multiyear procurement
    of Virginia-class submarines varies from about $70 million per ship,
    based on a five-ship contract, to about $115 million per ship, based on
    a seven-ship contract. The savings are dependent on the use of material
    and equipment buys in economic order quantities (EOQ).

        30. Senator Sessions. Secretary Young, what are the savings that
    could be achieved for Virginia-class submarines fiscal year 2003
    through fiscal year 2007 by buying equipment in economic order
    quantities?
        Secretary Young. The saving associated with a ``block buy''
    procurement of Virginia-class submarines with EOQ ranges from about $35
    million per ship, based on a five-ship contract, to about $60 million
    per ship, based on a seven-ship contract.

        31. Senator Sessions. Secretary Young, what is the acquisition
    strategy for the Virginia-class submarines included in the budget
    request, and if not using economic order quantity authority provided in
    fiscal year 2002 legislation, why not?
        Secretary Young. The President's fiscal year 2003 budget request
    was based on procurement of one ship as part of a five-ship block buy
    procurement through fiscal year 2007. The submarines would be built by
    Electric Boat with Newport News Shipyard as a major sub-vendor in
    accordance with their teaming agreement. The fiscal year 2003 request
    includes advance procurement for 2-year long lead-time material for one
    ship in fiscal year 2005 and 1-year advance procurement for one ship in
    fiscal year 2004. EOQ investment was not included because the magnitude
    of the offsets required to fund this strategy was not affordable within
    the Department's fiscal year 2003 budget request.

                             SUBMARINE PROCUREMENT

        32. Senator Sessions. Secretary Young, what amount of advance
    procurement would be required in fiscal year 2003 to initiate a
    multiyear procurement for the next 5 submarines?
        Secretary Young. The President's fiscal year 2003 budget request
    includes advance procurement (AP) in fiscal year 2003 of $706.3 million
    for long-lead-time materials (LLTM) for the fiscal year 2004 and fiscal
    year 2005 ships. It assumes a block buy contract approach for the next
    five submarines built at a rate of one per year.
        To initiate a multiyear contract that includes economic order
    quantity (EOQ) procurement of material for the next five submarines,
    additional AP in the amount of $300 million is required in fiscal year
    2003. Additional EOQ funding increments are required in the outyears to
    fully fund the material ordered in fiscal year 2003. The material
    ordered in quantity in fiscal year 2003 would be valued at
    approximately $500 million per ship.

        33. Senator Sessions. Secretary Young, what amount of advance
    procurement would be required in fiscal year 2003 to initiate a
    multiyear procurement for the next 7 submarines?
        Secretary Young. The President's fiscal year 2003 budget request
    included AP in fiscal year 2003 of $706.3 million for LLTM for the
    fiscal year 2004 and fiscal year 2005 ships. It assumes a block buy
    contract approach for the next five submarines built at a rate of one
    per year. A multiyear contract, by statute, cannot be for more than 5
    years. Therefore, if the number of ships in a 5-year multiyear were
    increased to 7, additional AP funding for LLTM would be required for 2
    years and 1 year prior to the increase (i.e., in fiscal year 2004 and
    fiscal year 2005 for an additional fiscal year 2006 ship).
        To initiate a multiyear contract that included EOQ procurement of
    material for the next seven submarines, additional AP in the amount of
    $400 million is required in fiscal year 2003. Additional EOQ funding
    increments are required in the outyears to fully fund the material
    ordered in fiscal year 2003. The material ordered in quantity in fiscal
    year 2003 would be valued at approximately $500 million per ship.

                          T-AKE AND COST IMPLICATIONS

        34. Senator Sessions. Secretary Young, if the Navy does not
    exercise the option for the second option T-AKE ship in fiscal year
    2004, what is your assessment of the cost implications for that ship?
        Secretary Young. The estimated cost impact of delaying the second
    option ship in fiscal year 2004 is an increase of approximately $30
    million to the cost of that ship. The cost increase is due to inflation
    and the impacts to shipyard contracts with suppliers and shipyard
    production.
        The contract impacts result from the shipyard renegotiating
    supplier subcontracts due to the stretch in schedule. Currently all
    vendor solicitations include option quantities timed to reflect the
    contract option exercise schedule. Changing the procurement schedule
    for the ship necessitates a change in the vendor procurement schedule
    causing an increase in the associated subcontract.
        The production impact results from the sub-optimal workload in the
    shipyard. The current design and construction schedule under contract
    results in an evenly distributed workload that matches National Steel
    and Shipbuilding, Co., production capacity. Disturbing the even
    distribution results in inefficiencies and higher costs.
        The contract and production impacts affect more than just the
    second fiscal year 2004 ship option, since the remaining ships bear the
    increase in costs associated with disturbing the evenly distributed
    workload. The total impact on the T-AKE program procurement costs due
    to anticipated changes to contract delivery schedules is an increase of
    between $50-$70 million.

                         JOINT COMMAND AND CONTROL SHIP

        35. Senator Sessions. Secretary Young, when will you have the
    information required to ask for proposals to acquire the joint command
    and control ship?
        Secretary Young. The President's fiscal year 2003 budget request
    includes a lead ship in fiscal year 2006 and two ships in fiscal year
    2007. The acquisition strategy currently under development plans an
    initial request for proposal for preliminary design efforts in early
    fiscal year 2003 to support a competitive award for detail design and
    construction in fiscal year 2006.

        36. Senator Sessions. Secretary Young, is there adequate funding in
    this request for gathering that required information?
        Secretary Young. Efforts are currently underway to support
    requirement definition for the joint command and control ship and
    adequate funding exists in the PB03 request to support an award for
    preliminary design efforts in fiscal year 2003.

        37. Senator Sessions. Secretary Young, what type of acquisition
    strategy will the Navy pursue?
        Secretary Young. The acquisition strategy is currently in
    development, but will include a competitive procurement. Due to the
    limited planned quantities for this class, the winning competitor is
    envisioned to build all the ships.

                         SHIPBUILDING COSTS--TRADE-OFF

        38. Senator Sessions. Secretary Young, how will you ensure that
    program managers do not trade-off capability to avoid creating a prior
    shipbuilding cost?
        Secretary Young. Control of prior year shipbuilding cost growth is
    one of the Department's top priorities. I have provided specific
    guidance to all shipbuilding program managers delineating their
    responsibility for executing the complete scope of the program within
    budget, specifically configuration control of the approved baseline.
    The guidance is very specific on what changes to the program baseline
    that the program manager may approve. It is anticipated that this very
    detailed direction and guidance will enable the program managers to
    operate within established change order budgets. Any increased cost
    change to the baseline that does not meet the criteria of an approvable
    change will be submitted to the Ship Characteristics Improvement Panel
    for consideration and must be accompanied by funding recommendations.
    Through this tight control of changes or upgrades to the approved
    baseline, it is expected that increased change order requirements will
    not be a source of prior year shipbuilding cost growth. Before program
    managers are allowed to descope warfighting capability to avoid
    creating a prior year bill, senior civilian and uniformed Navy
    leadership would meet and agree on any deleted capability.

        39. Senator Sessions. Secretary Young, does the Navy intend to
    obtain congressional approval prior to changing (cost/capability trade-
    off) a congressionally appropriated and authorized configuration for
    ships?
        Secretary Young. Congress will be informed of significant changes
    to the cost/capabilities of authorized and appropriated ships through
    Selected Acquisition Reports, the annual budget review briefings and
    whenever information is requested.

                                      t-5
        40. Senator Sessions. Secretary Young, on the T-5 tanker buy-out
    proposal, what other alternatives did you consider other than buying
    out the T-5 tanker leases and what savings do you expect from the buy-
    out?
        Secretary Young. Various alternatives were examined. First, we
    considered the costs of letting the current leases run their course
    through 2005 and 2006 and replacing the ships by going to the tanker
    charter market after that. Second, we considered extending the current
    charters for an additional 5 or 10 years. Lastly, we looked at a
    construction program for replacement tankers.
        Assuming the ships can be used for an additional ten years, we
    estimate that exercising the Navy's purchase options will save $440
    million (net of purchase price) over the life of the ships as compared
    to the first alternative. We estimate that both an extension and a new
    construction program would yield half of that.

        41. Senator Sessions. Secretary Young, have thorough surveys of
    these ships been completed to determine what the maintenance costs will
    be once these ships are owned by the Navy and that they are worth
    buying?
        Secretary Young. These ships are under a continuous survey program
    through the American Bureau of Shipping. Each of the five ships
    involved in the purchase have been surveyed in the past year and all
    were determined to be in very good condition. The Navy has directly
    reimbursed the maintenance of these ships over the years and we believe
    that they are, and will continue to be, in very good condition. In our
    analysis, we presumed that maintenance costs would gradually rise as
    the ships get older and our savings estimates account for those rises.

                             SHIPBOARD FIRE SUPPORT

        42. Senator Sessions. Secretary Young, has the Navy considered
    alternatives which would enable the Navy to deploy the shipboard fire
    support required by the Marine Corps and resident in the 155 mm gun by
    the original fiscal year 2009 target date?
        Secretary Young. Due to the large increase in weight from current
    guns to the 155 millimeter advanced gun system (AGS), it does not
    appear to be practical to install AGS on any existing surface combatant
    without significant ship modification. As such, there does not appear
    to be an opportunity to deploy the capabilities inherent to AGS until
    it enters the fleet with DD(X) in 2012.
        To illustrate, the AGS with 600 (long range land attack projectile)
    rounds would weigh approximately 400 tons. With two AGS guns with one
    600-round magazine each on DD(X), the weight would total 800 tons. In
    order to accommodate this significant load, DD(X) has been designed as
    a total ship system with gun placement a primary consideration in the
    ship architecture. In comparison, the 5,,/62-caliber Mark 45 Mod 4 gun
    with 232 extended range guided munitions rounds and 210 conventional
    rounds currently weighs approximately 60 tons.

        43. Senator Sessions. Secretary Young, what investment would it
    take to take advantage of a wider application of spiral development to
    push forward with the new hull, gun, and radars for the first 10 ships
    and move up the delivery date of the DD(X) destroyer?
        Secretary Young. Spiral development is the defining characteristic
    of the restructured DD(X) program. However, preliminary and critical
    ship design timelines and the schedule for engineering development
    modules prototype risk reduction testing make it impractical and risky
    to start construction of the lead DD(X) any earlier than fiscal year
    2005. Spiral development will play a key role in defining the level of
    warfighting capability that will be delivered with the first flight of
    DD(X) in fiscal year 2011, but the Navy believes that the current
    program schedule provides the best balance between program development
    risk and future fleet force structure requirements.

                               BUDGET MANAGEMENT

        44. Senator Sessions. Secretary Young, what processes and policies
    prevent two or more program managers from developing like capabilities
    resulting in the taxpayer paying twice for the same technology?
        Secretary Young. We certainly don't want to pay twice for
    developing the same technology. However, we often want to develop
    different technologies that achieve a similar capability. Pursuing
    families of technologies is prudent, and we do it intentionally. It
    reduces risk and gives the taxpayer the best return on investment.
        To avoid buying the same technology twice, the Office of Naval
    Research (ONR) uses a five-step oversight cycle:
        1. Division heads exercise administrative oversight of the program
    officers.
        2. Department heads exercise administrative oversight of their
    divisions and program officers.
        3. ONR's Program Council exercises routine corporate-level
    oversight by approving individual awards.
        4. The Departments' boards of visitors--distinguished groups of
    outside expert who function a bit like university accreditation teams--
    provide an external review of our programs.
        5. At the DOD level, we participate in the Department-wide planning
    and assessment process (Defense S&T Reliance) which provides the same
    oversight coordination desired above for the entire DOD.
        Finally, we not only want to avoid duplication of effort, but we
    also want to be able to take advantage of advances and opportunities
    across a broad spectrum of scientific fields. Tracking specific awards
    within our overall scientific strategy helps ensure communication
    between program officers, and helps ensure multidisciplinary
    integration occurs.

                               SURFACE COMBATANTS

        45. Senator Sessions. Admiral Mullen, what will be the impact on
    the remaining 108 surface combatants of decommissioning ships early?
        Admiral Mullen. The 2001 QDR presented a force structure of 108
    active and 8 Reserve surface combatants. This force structure was
    assessed across several combinations of scenarios on the basis of the
    new defense strategy and force-sizing construct, and the capabilities
    of this force were judged as presenting moderate operational risk.
        The Navy's goal is to continue to maintain current OPTEMPO
    standards while accepting moderate operational risk to recapitalize the
    force during this time to meet future requirements, achieving 116
    surface combatants by 2010.
        This strategy is the groundwork for the onset of the family of
    ships transition that bridges the gap between existing force structure
    and future ships. This does reduce the number of ships, in the near-
    term, but includes the additional enhanced warfighting capability that
    the multi-mission DDG-51-class has over the retiring DDs. Adding more
    DDG-51s and introducing initiatives, like sea-swap in the DDs and DDGs,
    to improve OPTEMPO and on-station time, reduces the risk by adding more
    strike, force protection, and undersea warfare capability to the
    existing force both forward deployed and at home.

        46. Senator Sessions. Admiral Mullen, what additional funding would
    be required, by fiscal year, to keep a base force of 116 surface
    combatants throughout the FYDP, and what would be the recommendation
    for composition of that base force by fiscal year?
        Admiral Mullen. The actual composition of the force would depend on
    multiple assumptions (dominated within the FYDP by decommissionings
    versus new construction) and funding options. However, one option to
    reach 116 surface combatants would be to maintain the current mix of
    CGs, DDGs, and FFGs and postpone the scheduled decommissioning of 16
    Spruance-class destroyers:

    ----------------------------------------------------------------------------------------------------------------
                                                                                         Fiscal Year
                                   Class                                --------------------------------------------
                                                                           2003     2004     2005    2006      2007
    ----------------------------------------------------------------------------------------------------------------
    - NRF-FFG..........................................................        8        8        8        8        8
    - FFG..............................................................       22       22       22       22       22
    - DD-963...........................................................       16       16       13        9        5
    - CG-47............................................................       27       27       27       27       27
    - DDG-51...........................................................       39       43       46       50       54
                                                                        --------------------------------------------
      Total............................................................      112      116      116      116      116
    ----------------------------------------------------------------------------------------------------------------

        The cost to crew, maintain, and operate a Spruance buy-back plan
    that yields a surface combatant force level of 116 is $1.2 billion as
    articulated by the table below.

    ----------------------------------------------------------------------------------------------------------------
                                                                      Fiscal Year
                  Total Savings              ------------------------------------------------------------    Total
                                                 2003        2004        2005        2006        2007
    ----------------------------------------------------------------------------------------------------------------
    - Ship Operations.......................        14.9        48.3        74.8        68.4        46.5       252.9
    - Maintenance...........................        23.9        41.0        87.1        81.3        67.0       300.3
    - Manpower..............................        13.6       117.8       192.5       201.2       134.6       659.7
                                             -----------------------------------------------------------------------
      Total.................................        52.4       207.1       354.4       350.9       248.1     1,212.9
    ----------------------------------------------------------------------------------------------------------------

        The Spruance decommissioning decision is driven by affordability.
    Under the program of record, the force level decreases over the FYDP
    largely due to the decommissioning of the more costly (manpower and
    maintenance), less capable (older technology) DD-963 class ships.
    However in fiscal year 2010, the force will exceed the 116 goal with
    the continued commissioning of new DDGs and the first DD(X). Although
    in the short-term the force level drops below the QDR level of 116, the
    Navy emerges with a more capable and more affordable force beginning in
    fiscal year 2010.

        47. Senator Sessions. Admiral Wachendorf, did the Navy's cost/
    benefit analysis on reducing surface combatant force structure
    determine the additional risk to national security associated with
    dropping to 108 surface combatants? If so, provide the determination,
    and if not, what is the Navy's current assessment?
        Admiral Wachendorf. The cost/benefit analysis to reduce the number
    of surface combatants to 108 was primarily based on affordability in
    the context of today's threat environment. The decision to drop below
    116 was a short-term reduction to allow for the development and
    construction of more capable ships. Although in the near-term we drop
    below the QDR force level of 116, we emerge in fiscal year 2010 with a
    more capable force. This more capable force includes over 60 DDGs, 27
    Aegis cruisers, and a more common architecture of combat systems with
    capabilities specific to the threat of 2010 and beyond. In addition,
    the restructuring of the force will allow for new ships to be built to
    a reduced manning standard and will improve life cycle management costs
    well into the future. This incurs a moderate risk associated with a
    near-term drop in ship structure to allow for a long-term capability
    growth in the force.

                                POTENTIAL BASES

        48. Senator Sessions. Admiral Wachendorf, are there any overseas
    locations that have been analyzed to provide a forward base for quick
    reaction missile defense, maritime interdiction, and/or Tomahawk
    capability of a few ships that would not be attached to a battle group
    such as the ships in the Persian Gulf that perform those duties on a
    rotational basis?
        Admiral Wachendorf. There are several alternatives for homeporting
    3-4 surface combatants in WESTPAC to provide a forward base for quick
    reaction missile defense. Singapore, Darwin, Australia and Chinhae,
    South Korea are all politically amenable to having strong U.S. force
    presence. They all have piers and harbor  facilities that can
    accommodate Aegis ships. However all of these ports would need
    significant infrastructure improvement to properly support the
    stationing of U.S. ships. For example, pier electricity, CHT waste
    facilities, oily waste, refueling storage and delivery, NIPRNET/SIPRNET
    connectivity and all of the required base support services such as
    housing, medical, schools, exchanges and maintenance facilities would
    need to be constructed and manned. Additionally, land would need to be
    purchased to support basing options. Since there are no U.S. facilities
    in place in these harbors, it would be a large investment to develop
    the infrastructure to support 3-4 ships.
        Japan has several ports that can facilitate U.S. ships. There would
    be significant political opposition to increasing forces anywhere in
    Japan. Yokosuka, Japan, is the current homeport for the forward
    deployed naval forces (FDNF) carrier battle group. The Yokosuka Naval
    Base is jointly operated by the U.S. and Japan. It possesses the
    infrastructure for basing and maintenance, but lacks the pier space to
    support additional ships. Ship changes are done on a one-for-one basis.
        The Japanese government provides support each year to offset costs.
    The Japanese are under an economic strain and would like to reduce the
    amount they contribute towards supporting all U.S. forces. The local
    Japanese workforce is extremely well disciplined and skilled; the
    maintenance they provide is equal or superior to that found stateside.
    Logistics support for U.S. forces is enshrined in Japanese law, and a
    massive infrastructure for dependents-support and R&R has been
    established.
        Guam as a U.S. territory also provides potential. It is the United
    States' only guaranteed failsafe against the loss of basing rights in
    East Asia. The revenue increases to Guam would be a significant benefit
    for its economy. Housing and amenities for U.S. personnel/dependents
    are adequate, though expansion and renovation (of existing housing
    stock) would be required. Since Guam was a large naval base in the past
    and already has infrastructure to support U.S. forces, it was used as a
    model to benchwork costs for forward basing ships. With the exception
    of Japan, costs in all other areas would exceed projected costs in
    Guam. In addition to infrastructure upgrades, a costly environmental
    impact assessment would need to be conducted. Estimated timeframe to
    achieve environmental approval and build the necessary typhoon/
    earthquake hardened infrastructure is a minimum of 7 years. A major
    concern in achieving upgrades to infrastructure overseas is the ability
    to divert the workforce. In addition to the local workforce, both
    skilled and unskilled labor would have to be brought into the country
    to support efforts.
        Excluding Japan, Guam is the most cost effective location to
    station additional combatants with TMD capability and closest to
    support East Asian missions. The Guam decision would reverse a 1995
    BRAC decision to reduce facilities. Japan is the most cost effective
    and closest location to support a TMD mission in East Asia. We already
    have established facilities to support ships and personnel. The quality
    of life available in Japan is far superior to that offered in other
    WESTPAC locations. Training opportunities already exist in Japan.

                        EMPLOYMENT ALTERNATIVES FOR SSGN

        49. Senator Sessions. Admiral Wachendorf, what operational
    employment alternatives is the Navy considering to get the maximum
    operational days out of the SSGN converted submarines?
        Admiral Wachendorf. Four Ohio-class fleet ballistic missile
    submarines (SSBN) are funded for refueling and conversion to SSGN.
    These submarines will have a 70 percent operational tempo allowing them
    to spend 14 years of their remaining 20 year lifetime forward deployed.
    In other terms, their high operational tempo will allow between two and
    three SSGNs to be in theater continuously for 20 years beginning in
    2007/2008. This operational tempo is achievable by employing the
    following concept of operations:

             SSGNs will retain the two-crew concept currently
            employed onboard our SSBNs and leverage off the training and
            maintenance infrastructures already in place in Kings Bay,
            Georgia and Bangor, Washington.
             Crew exchange and limited scope maintenance evolutions
            will be conducted ``in theater'' (e.g. at forward bases) to the
            maximum extent. SSGNs will only return to CONUS (Bangor or
            Kings Bay) for long-term maintenance, the frequency of which is
            under review.

       ``INCREASE THE MISSION CAPABILITY OF THE ATTACK SUBMARINE FORCE''

        50. Senator Sessions. Admiral Wachendorf, what are the Navy's
    comments regarding the conclusions of the Congressional Budget Office
    March 2002 study ``Increasing the Mission Capability of the Attack
    Submarine Force''?
        Admiral Wachendorf. Although not fully exploring all of the details
    of each area, the CBO study provides an informative analysis of SSN
    force structure and recommends three options to improve the
    effectiveness of our submarine force. Each of these recommendations
    have already been implemented in various degrees as follows:
        1. Conversion of four Ohio-class fleet ballistic missile submarines
    to SSGN. This is a funded program today for delivery of SSGN starting
    in 2007. A future SSGN/SSN force will meet today and future mission
    requirements will be studied over the next several years.
        2. Multi-crew manning of attack submarines. There are several
    unique issues that are not fully explored by the study. Dual/multi-
    crewing of SSNs is challenging for several reasons. An independent
    study that provides more depth is in the final stages of development.
    Of note, the submarine force has experience with dual-crewing onboard
    single mission SSBNs and is currently working through how this concept
    will transition to multi-mission forward deployed SSGNs.
        3. Forward-basing attack submarines in Guam. The force will be
    basing SSNs in Guam for the first time starting in 2002. By early 2004,
    three SSNs will have been refueled and moved to Guam. The three SSNs
    are all first flight 688s that will have sufficient fuel to allow them
    to be operated at a higher OPTEMPO until their end of life. Over the
    next several years as the SSNs are operated from Guam, the submarine
    force will further explore the lessons and benefits from this type of
    force employment and its applications to other classes of submarines.
    These three SSNs will leverage off the current base infrastructure in
    Guam. Homeporting additional SSNs in Guam would require upgrading the
    base facilities at significant expense to the government.

        51. Senator Sessions. Admiral Wachendorf, would applying the
    applicable concepts to surface combatants have a similar effect on
    their operational days?
        Admiral Wachendorf. In line with the CBO study on ``Increasing the
    Mission Capability of the Attack Submarine Force,'' Navy is conducting
    two pilot ``crew swap'' projects programs in the Pacific Fleet whereby
    individual ship deployments would be extended to 11.5 months or longer
    while holding crew deployments at 6 months. In essence, crews would
    swap at mid point of the ship's deployment. Through the pilot programs,
    Navy hopes to determine the true costs and potential savings, while
    developing lessons learned to provide a firm analytical basis for
    recommendations to either expand the program or look for other
    alternatives.

                   HISTORICAL LIFE V. ESTIMATED SERVICE LIFE

        52. Senator Sessions. Admiral Wachendorf, is the Navy the using
    historical life or estimated service life in the calculations for
    determining required investment to maintain about 300 ships?
        Admiral Wachendorf. Estimated service life (ESL) is one of several
    criteria the Navy uses to determine when and how much to invest in
    recapitalization to maintain our force structure. We also consider
    average age of the fleet and acquisition rates required to maintain
    core warfighting capabilities. Based on ESL alone, assuming a fleet-
    wide average ship service life of about 35 years, the Navy needs to
    procure about 8.9 ships per year at a cost of about $12 billion per
    year to maintain about 310 ships.

        53. Senator Sessions. Admiral Wachendorf, what is the impact on the
    annual number of ships the Navy will have to build and the resulting
    annual investment required if historical instead of estimated service
    life is used, and which should the Navy use to calculate their
    investment requirements?
        Admiral Wachendorf. Based on actual decommissioning data for all
    battle force ships over the last 10 years and projected service life of
    ships in commission, average historical service life (HSL) is about 30
    years versus an average ESL of 35 years. Using the average HSL to
    determine shipbuilding requirements, the Navy would have to procure
    about 10.3 ships per year and invest about $12-$14 billion per year to
    maintain a 310 ship fleet.
        Service life by itself is not used to determine investment
    requirements. Needed warfighting capabilities, projected investment
    requirements to maintain/operate existing fleet assets, sustaining the
    shipbuilding industrial base and the available Navy TOA in addition to
    service life are variables Navy relies upon in determining when and how
    much to invest.

                              TRAINING ON TRANSIT

        54. Senator Sessions. Admiral Wachendorf, your written testimony
    regarding pre-positioning ships in forward operating areas suggests
    that combatants could not be pre-positioned because they have complex
    command, control, communications, computers, and intelligence,
    surveillance, and reconnaissance (C\4\ISR) and weapons systems aboard
    and that a crew flown in would have to take time to develop
    proficiency. This time would negate the time gained in not having to
    transit with the ship. Are there ships in the Navy for which this
    concept would be applicable such as auxiliary and support ships; and
    for combatants, whether or not the concept would provide a capability
    to the Navy, if the crews that flew out to man the ships were trained
    in a similar platform in the U.S. prior to flying out to the ship?
        Admiral Wachendorf. Unit readiness depends on both the ability of
    sailors to perform their individual specialties and on their
    integration into a proficient team that is able to fully employ the
    capabilities of their ship. This proficiency is developed through
    training during the inter-deployment training cycle and transit. Ship
    configurations are not identical; there are differences in both the
    individual skill requirements and the mix of specialties even between
    ships of the same class. As a result, some period of familiarization
    and team training on the systems unique to that ship will be required
    to achieve full crew proficiency on any new ship. In general, the less
    complex the ship systems and smaller the differences between the old
    and new ship, the less training will be required on arrival. The
    training required to achieve full crew proficiency would likely be less
    for auxiliary and support ships than for combatants. For all ship
    classes, having crews trained on similar platforms in the U.S. prior to
    joining the ship would reduce, but not eliminate, the time required to
    develop proficiency once onboard.
                                     ______

                   Questions Submitted by Senator John McCain

                  SENATOR LOTT'S ROLE IN THE SHIPBUILDING PLAN

        55. Senator McCain. Admiral Mullen, in a January 28, 2002 article
    ``Responding to Lott, DOD Starts Funding LHD-9 And One More DDG-51'' by
    Chris Castelli in the publication Inside the Navy, the article states:

            ``At the urging of Senate Minority Leader Trent Lott
            (Republican--Mississippi), the Pentagon has made last minute
            adjustments to the Navy's shipbuilding plan in the Bush
            administration's fiscal year 2003 budget. The Pentagon put $74
            million more toward a third DDG-51 destroyer and allocated $10
            million in advance procurement for a ninth amphibious ship--LHD
            9--that was not previously in the Navy's budget.''

        Is this true, yes or no?
        Admiral Mullen. The OSD Comptroller made two late changes to the
    Navy's fiscal year 2003 shipbuilding budget request by adding $74
    million in advance procurement funding for a third DDG-51 destroyer in
    fiscal year 2004, and shifting $10 million for advance procurement
    funding for a fiscal year 2008 LHD-9. Any specific questions on the
    factors that precipitated the decision for these shifts should be
    referred to the OSD Comptroller.

                       AOA IN CONCERN TO LHA REPLACEMENT

        56. Senator McCain. Admiral Mullen, can provide the status of the
    AOA to replace the current LHA with an LHA(R)?
        Admiral Mullen. The LHA replacement [LHA(R)] AoA is scheduled to
    complete in the summer of 2002. The AoA is evaluating several
    alternatives including a repeat LHD-8, a modified LHD-8, and an
    entirely new ship design.

        57. Senator McCain. Admiral Mullen, are you also aware that the
    Comptroller in the Office of the Secretary of Defense deleted the
    funding for the study on the AOA-cutting $16 million from the RDT&E
    effort for the LHA replacement?
        Admiral Mullen. Yes, the Department is aware of this situation.
    During the November 2001 review of the Navy's Fiscal Year 2003 budget,
    the OSD Comptroller's office deleted fiscal year 2003 and 2004 research
    and development (R&D) funding for the LHA(R) program.
        LHA(R) R&D funding throughout the FYDP was briefed to and approved
    by OSD (including the OSD Comptroller) at milestone A as the minimum
    R&D funding necessary to support the least expensive LHA(R) AoA
    alternative--a repeat LHD-8. Since the AoA completes in fiscal year
    2002, this fiscal year 2003-2004 research, development, test, and
    evaluation (RDT&E) deletion does not directly impact the AoA study, the
    AoA final report or the Navy's ability to decide which LHA(R)
    alternative to pursue. However, the Department of the Navy will select
    a preferred alternative based on the results of the AoA and adjust
    RDT&E and SCN profiles as required to move forward.

        58. Senator McCain. Admiral Mullen, does the $10 million in advance
    procurement for LHA-9 that was added by the OSD Comptroller according
    to the Castelli article predetermine the results of the AOA?
        Admiral Mullen. No. The results of the LHA(R) AoA are not
    predetermined. The preferred alternative may or may not be based on the
    LHD-8. The LHA(R) AoA is ongoing and will report out in summer 2002.
    Alternatives being considered include: repeat LHD-8 with evolutionary
    modifications, modified LHD-8 upgraded to enhance the ability to
    operate the larger and/or heavier new generation amphibious systems,
    and new ship designs spanning a wide range in size and capability.
    Based on the analysis presented in the AoA, the Navy will determine the
    optimal alternative for the LHA(R) as part of the LHA(R) program. The
    $10 million in the fiscal year 2003 budget request allows the Navy to
    begin refining the AoA selected alternative's detailed capabilities/
    characteristics and other developmental work.

                              COMPARING LHA TO LHD

        59. Senator McCain. Admiral Mullen, you know that I have traveled
    to Afghanistan with other members of this committee. While there, I
    heard from several Navy and Marine Corps officers that the number one
    concern for replacing the LHA is safety because of a stability problem
    or high center of gravity issue, especially with deployed aircraft.
    Their concern was that even with some minor fixes with fuel
    compensation systems, the problem will be exacerbated when the Service
    deploys larger aircraft, such as the Osprey (MV-22) and the Joint
    Strike Fighter (JSF) which are replacements for the CH-46 and AV-8B
    respectively. I am told that the MV-22 is twice the weight of the CH-46
    and that the JSF is believed to be about twice the weight of the AV-8B.
    Does the LHD class have similar stability problems as the LHA class?
        Admiral Mullen. The seven ships of the LHD class have improved
    stability characteristics over the LHA class and, therefore, do not
    experience weight and center of gravity issues to the same extent as
    the LHA. For example, LHD-7, commissioned in 2001, has greater than the
    required 1000 long tons of service life weight growth allowance.

        60. Senator McCain. Admiral Mullen, would you agree that the
    problem could be exacerbated with the planned future aircraft and
    vehicles envisioned for the Marine Corps?
        Admiral Mullen. LHDs have the growth allowance to accommodate MV-22
    and JSF with aggressive weight control measures and the fuel oil
    compensation ship alteration although LHDs have less vehicle storage
    space (square footage) than LHAs.
        The Navy's five LHAs need to be replaced as soon as possible, as
    they are rapidly reaching the end of an already extended service life.
    The LHA(R) AoA was initiated to ensure that both Marine Corps and Navy
    21st century requirements are addressed, including the issues the
    Senator raises regarding the impact of heavier and larger aircraft/
    vehicles and overall amphibious force vehicle storage area. An LHD
    repeat is just one of several alternatives being considered in the
    LHA(R) AOA to meet requirements.

        61. Senator McCain. Admiral Mullen, what growth percentages are
    currently planned for the LHD class of ships?
        Admiral Mullen. The CNO-specified minimum service life allowance
    for the LHD class at delivery from the building yard is 0.5 feet KG (KG
    = ship's center of gravity above the keel) and 1,000 long tons of
    displacement service life (about 2.5 percent). The requirement is
    documented in the LHD class top level requirements document of August
    2, 1991.

        62. Senator McCain. Admiral Mullen, is the LHD a good replacement
    for the LHA class of ships, considering that the ship does not meet the
    requirement in planned future vehicles and aircraft for the Marine
    Corps or our special operations community and considering the
    amphibious lift requirement of 2.5/3.0 MEB?
        Admiral Mullen. Among several alternatives, the ongoing AoA is
    addressing whether the LHD is a good replacement for the LHA class.
    Continuing to build LHDs, as well as ship design modifications to
    enhance the capability to operate the larger and heavier new generation
    amphibious systems such as the Joint Strike Fighter, MV-22 Osprey,
    advanced amphibious assault vehicle and medium tactical vehicle
    replacement is currently being examined. The AoA is also investigating
    the optimum way to reach the fiscally constrained amphibious lift
    requirement of 2.5 Marine expeditionary brigades. The AoA is expected
    to report out later this year.

        63. Senator McCain. Admiral Mullen, because of the well deck inside
    the LHD, isn't the LHD available square footage less than the LHA?
        Admiral Mullen. LHD available vehicle stowage space is
    approximately 4,500 square feet less than the LHA. Both ship classes
    have large well decks, which are approximately the same length.
    Modifications to the LHD well deck design allow LHDs to carry two
    additional landing craft air cushion (LCACs) compared to the LHA. While
    giving up vehicle stowage space in the LHD, other design changes were
    made to improve the aviation capabilities and provide more protection
    for critical command and decision spaces in the LHD.

                                  R&D FUNDING

        64. Senator McCain. Admiral Mullen, it seems to me that the LHD is
    not a very transformational program, especially considering that it is
    the exact same hull of the current LHA class that is based on a 1950s
    design. It seems to me that if the LHA (R) class ship is built to have
    a lifespan of 50 years with no further R&D invested, then LHD-9 will be
    a 100-year old design when it is decommissioned in the 2050 timeframe.
    Would the Navy develop an aircraft carrier (CVN), destroyer (DD), or
    submarine (SSN) without a robust R&D effort?
        Admiral Mullen. No, the Navy would not build a new ship class
    without a robust R&D effort. The LHA replacement AoA is ongoing and
    will report out later this summer. The Navy plans to use the $10
    million added by OSD for LHD-9 in the fiscal year 2003 President's
    budget request to initiate engineering development of the LHA(R) AoA
    preferred alternative, regardless of which alternative is selected. In
    addition, RDT&E resources will need to be adjusted to reflect the
    preferred alternative.

        65. Senator McCain. Admiral Mullen, where is the R&D funding for a
    major amphibious ship like LHA(R)?
        Admiral Mullen. R&D funding was deleted from the fiscal year 2003
    budget under the misconception that Navy was leaning toward an LHD-8
    repeat as the preferred replacement for LHA-class ships and would not
    require as much R&D and not until later in the FYDP. If the results of
    the AoA support a modified repeat LHD or new ship design, additional
    RDT&E funds will be required. At that time, it may be necessary to
    revisit the current plan to use the $10 million in fiscal year 2003 SCN
    AP for a LHD-9.

        66. Senator McCain. Admiral Mullen, are you not relegating the
    amphibious Navy to non-transformational status?
        Admiral Mullen. No. While the LHA(R) hull shape may be close to the
    original, its combat systems suite, communications gear and information
    technology set up will be state of the art. What we envision for
    LHA(R)--advanced command and control capabilities, network centric
    warfare systems, Joint Strike Fighter, onboard targeting--will enable
    LHA(R) to support expeditionary maneuver warfare in a manner that was
    not imaginable when the LHAs were designed. The planned service life of
    the LHA(R) class, like the LHD class, will be 40 years.

                               BUYING T-5 TANKERS

        67. Senator McCain. Admiral Mullen, on February 8, Rear Admiral
    Church, USN, delivered to Congress the Department of the Navy's
    ``Fiscal Year 2003 Budget Overview.'' On page 18 of the Navy's budget
    brief is a slide called ``Promote Better Business Practices, Managing
    the Department in a Business-like Manner.'' I noticed a bullet that
    states ``T-5 Tanker Buyout.'' Will you please tell the me why the Navy
    has decided in its fiscal year 2003 budget to buy the T-5 tankers
    rather than to continue to lease them as was the plan several years
    ago?
        Admiral Mullen. The T-5 tankers were leased in the early eighties
    rather than purchased because of the budgetary circumstances that
    existed at the time. When the ships were leased, the Navy negotiated
    for favorable purchase options that, conditions permitting, could be
    exercised at the appropriate time. Those conditions exist and that time
    is now. We have a continuing need for these vessels beyond their lease
    terms, which end in 2005 and 2006. If we let our options expire, we
    will end up chartering (leasing) higher cost replacement tankers.

                            PURCHASING CRUISE SHIPS

        68. Senator McCain. Admiral Mullen, there are reports that the Navy
    is being approached to purchase a pair of unfinished cruise ships at
    the Northrop Grumman Shipyard in Pacagoula left behind when American
    Classic Voyages went bankrupt for use as mobile housing or hospital
    ships. Is the Navy in any way interested in purchasing such ships?
        Admiral Mullen. The Maritime Administration, which now ``owns'' one
    of the two ships due to the default on Title XI loans, has inquired
    about the Navy's interest in acquiring the incomplete passenger cruise
    ships available as a result of the bankruptcy of American Classic
    Voyages, Inc. The Conference Report accompanying the Fiscal Year 2002
    Department of Defense Appropriations Act also addressed this issue.
        A team of Navy engineers recently visited the partially completed
    passenger ships in Pascagoula, Mississippi, and concluded that the
    ships are not suitable for use as command and control ships due to
    their structural design and lack of military survivability features. We
    also explored the ship's utility for other non-combat ship missions and
    found that while it may be technically feasible to modify the ships for
    use as hospital, recreational, or berthing vessels, the Navy does not
    anticipate a requirement for additional ships of this type.
    Accordingly, the Navy has declined the offer to acquire or use the
    cruise ships under construction.

        69. Senator McCain. Admiral Mullen, is there a need for such ships?
        Admiral Mullen. No. We looked at the ships' utility for non-combat
    ship missions and found that while it may be technically feasible to
    modify the ships for use as hospital, recreational or berthing vessels,
    the Navy does not have a requirement nor the need for any more of these
    ship types today.
                                     ______

                  Questions Submitted by Senator Susan Collins

                     THE VALUE OF DD(X) AND FAMILY OF SHIPS

        70. Senator Collins. Secretary Young and Admiral Mullen, DD(X) is
    expected to make a significant contribution in the Navy's ability to
    achieve affordability breakthroughs with dramatic reductions in fleet
    O&M including personnel costs, and DD(X) should allow the Navy to field
    a fleet of highly capable and affordable warships. Would you discuss
    the value that you believe DD(X) and its family of ships will provide
    the Navy team, and further comment on the criticality of the $961
    million investment proposed in the fiscal year 2003 budget for this
    family of ships?
        Secretary Young and Admiral Mullen. Maritime dominance in the 21st
    century requires a naval force capable of projecting power and
    defeating anti-access threats. U.S. naval forces will be required to
    project power forward, provide assured access in the littoral
    environment and support a wide variety of joint and combined
    operations. Defeating and deterring future national threats will
    require a wide range of capabilities provided from a family of ships.
    These ships will be required to provide:

             Precision strike and volume fires;
             Anti-access littoral missions; and
             Missile defense.

        In order to accomplish these complex and challenging missions, the
    future surface naval force will consist of four elements:

             Advanced, multi-mission destroyers, DD(X), capable of
            providing precision strike and volume fires,
             Advanced cruisers, CG(X), providing sustained air
            superiority against air-breathing and ballistic threats,
             Agile littoral combat ships (LCS) capable of defeating
            enemy littoral defenses including mines, small boats, and
            diesel submarines, and
             In-service Aegis-equipped surface ships.

        Transformation of the future naval force starts with the DD(X)
    technology development effort. Many of the cutting edge and future
    technologies that will assure maritime dominance are being developed
    under the DD(X) program for the future family of ships.
        The fiscal year 2003 budget request for DD(X) supports provides
    funding to support the downselect to a single design agent in Spring
    2002 and the development of transformational systems. The DD(X) design
    agent will focus on the development of engineering development models
    (EDMs) during fiscal year 2003 including:

             Advanced gun system and magazine;
             Integrated power systems;
             Radar suite (multi-function radar/volume search
            radar);
             Total ship computing environment;
             Advanced vertical launch system;
             Integrated deckhouse and apertures;
             Autonomic fire suppression system;
             Infrared mock-ups;
             Hull form scale model; and
             Integrated undersea warfare system.

        In fiscal year 2003, the design agent will also perform design
    studies to support the spiral design review/requirements revalidation
    and the integration/evolution of the overall DD(X) ship design. Full
    funding is critical to achieve the innovation and transformational
    technologies that DD(X) will bring to the fleet.

                                DDG-51 AND FF6-7

        71. Senator Collins. Secretary Young and Admiral Mullen, please
    delineate the Navy's plans for funding near-term efforts on the DDG-51
    destroyer optimized manning initiative and for FF6-7 frigate
    modernization. In the case of DDG-51, the plan to implement optimized
    manning initiative can enhance operational readiness and significantly
    but safely reduce crew-size. This initiative, I understand, has great
    potential to dramatically reduce Navy ship O&S costs, while at the same
    time enhancing sailor quality of service, and in the case of FF6-7
    modernization--an acceleration of planned activities, including force
    protection upgrades. The plan would maintain mission functionality,
    improve reliability/maintainability and safety, and upgrade combat
    detection and ship self-defense capabilities. This initiative, I
    understand, is crucial given Navy leadership's decision to maintain the
    remaining 33-ship FFG force, in part because of the expectation these
    ships may have roles related to the evolving homeland defense mission.
    Please comment on the more general question of whether investing in or
    accelerating both initiatives is likely to pay larger dividends in
    terms of a more capable and affordable surface force in the long-term.
        Secretary Young and Admiral Mullen. Last year, N76 tasked Program
    Executive Office Theater Surface Combatants (PEO TSC) to ``. . .
    examine technologies, both current and prospective that have a
    potential of reducing the manning of the DDG-51-class combatants'' and
    ``. . . examine policies and procedures that could also affect
    manning.'' In response, PEO TSC chartered a DDG-51-Class Manning
    Assessment Panel to begin defining and evaluating options to reduce
    manning on Arleigh Burke-class combatants. Their initial findings and
    recommendations are currently being briefed to Navy leadership. In
    parallel with this undertaking, each fleet CINC is conducting an
    ``experiment'' to reduce manning on one cruiser and one DDG in their
    respective fleets. This ``experiment'' is ongoing and two of the ships
    should deploy soon. The goal is to take lessons learned from these
    reduced manning experiments and evaluate the results in conjunction
    with the studies being conducted by the DDG-51 Manning Assessment Panel
    to determine the best long-term solution for DDG manning. Once these
    evaluations are complete the most beneficial technology projects could
    be considered for funding. Preliminary findings to date, however, make
    it clear that any one technology application alone will not
    significantly reduce manning, but can act as an enabler.
        The Navy has committed to modernizing the FFG class by upgrading
    both its hull, mechanical, and electrical (HM&E) as well as topside
    combat system enhancements for 24 ships in the class. Through 1999
    efforts, the Navy determined its lead maintenance concerns with the
    class and is moving forward with contract awards to address those
    concerns. These HM&E efforts include: re-engine the ships service
    diesel generators; 6,800 GPD reverse osmosis desalinization capability;
    and replacement of the rigid hull inflatable boat (RHIB) davit with a
    slew arm davit (SLAD) to improve both RHIB launch safety and decrease
    the high maintenance cost of the existing davit. Additional
    enhancements include installation of self-contained breathing apparatus
    (SCBA) and ventilation modifications to the ships main spaces.
        Combat system improvements include installation of the close-in
    weapons system block 1B with surface firing capability and the
    installation of Nulka anti-ship missile decoy launching system.
    Fielding for both of these modernization efforts will take place
    between fiscal year 2003 and fiscal year 2007. Additional modernization
    efforts for the remaining ships in the class are being carried above
    core during the fiscal year 2004 budget development process. Force
    protection upgrades have been recently defined as an additional MK-38
    25mm chain gun and the installation of two additional .50 caliber
    machine gun (MG) mounts with their associative ammunition storage
    lockers and communications circuits required. Costs to install those
    defensive systems are being developed and should mature in time for
    installation during the timeline for the above-mentioned modernization
    efforts.

                                  A THIRD DDG

        72. Senator Collins. Secretary Young, the President's fiscal year
    2003 budget request proposes making an additional down payment on a
    third fiscal year 2003 DDG. The $74 million advanced procurement added
    to the $125 million appropriated by Congress late last year provides a
    meaningful commitment and another building block to funding and
    executing a shipbuilding contract for a third fiscal year 2003 DDG-51-
    class ship this year. Also of note is the fact that the Navy's unfunded
    requirements list for fiscal year 2003 includes full funding of the
    third fiscal year 2003 DDG-51-class ship and AP for a third ship in
    fiscal year 2004 as very high priorities to the Navy leadership. How
    high a priority is funding a third DDG in the shipbuilding unfunded
    request?
        Secretary Young. Adding a third DDG in fiscal year 2003 is the most
    appropriate candidate for additional new shipbuilding construction
    funding in fiscal year 2003.

        73. Senator Collins. Admiral Mullen, the Navy's fiscal year 2003
    unfunded requirements list recently provided to Congress, placed a very
    high priority on adding funds to sustain the three-DDG procurement rate
    in fiscal year 2003 and fiscal year 2004. The rationale provided in the
    Navy's UFR for increasing funding for the third fiscal year 2003 DDG-51
    destroyer states that these funds are necessary to: ``support
    recapitalization of the Surface Combatant Force, and to maintain
    surface combatant industrial base.'' You may be aware that the CNO and
    Navy Secretary have gone on record expressing strong support for
    addition of a third fiscal year 2003 DDG, and I believe it is critical
    that this issue be considered in terms of meeting military
    requirements, and as it relates to efforts to preserve the specialized,
    but fragile surface combatant industrial base. Please describe the
    operational, force structure, and multi-mission value of our front-line
    DDG-51 Burke-class Aegis destroyers. Specifically, how are they
    contributing to military effectiveness and force flexibility today and
    why do you believe is it important to ``support recapitalization of the
    Surface Combatant Force''--as noted on the Navy's UFR?
        Admiral Mullen. The mission of the Arleigh Burke-class destroyer
    (DDG-51) is to project power simultaneously in multiple dimensions of
    naval warfare. These include the destruction of enemy cruise missiles,
    aircraft, surface ships, and submarines and to attack land targets in
    support of joint or combined operations .
        The DDG-51 class destroyer is designed to be a battle group asset
    and a multi-purpose surface combatant capable of sustained operations
    in threat areas outside the umbrella of battle group operations
    including the littorals. They feature extraordinary seakeeping and low
    observability characteristics. Today, we are seeing this multi-mission
    platform conduct maritime interdiction operations (MIO) in the Arabian
    Gulf and Eastern Mediterranean, Tomahawk strikes, and battle group
    defense all in support of the war on terrorism.
        The 2001 Quadrennial Defense Review (QDR) revalidated the
    requirement for 116 surface combatants to meet all expected peacetime
    and warfighting missions. However, this force structure, which
    contained only 57 DDG-51 class destroyers, was considered a moderate
    operational risk. Adding more DDG-51s would reduce that risk by adding
    more strike, force protection and undersea warfare capability to the
    existing force. Additionally, due to the accelerated retirement of less
    capable and more costly to operate Spruance-class destroyers and the
    transition to DD(X), additional DDGs are needed and can be delivered
    more rapidly in the near-term than other shipbuilding programs thus re-
    capitalizing the surface combatant force in both numbers and improved
    capability. Re-capitalization of the force is necessary if we are to
    maintain both a quantitative and qualitative edge and support a
    diminishing industrial base.

                             DELAYS IN SHIPBUILDING

        74. Senator Collins. Secretary Young, the CNO testified that the
    fiscal year 2003 proposed priorities invest in current readiness for
    our naval forces. However, I am aware that there have been some
    deferred depot maintenance periods due to current operations (i.e.,
    combating terrorism) on the Los Angeles-class submarines in fiscal year
    2002, which will impact fiscal year 2003 and outyear workload
    schedules, placing the fleet ready submarines at risk to meet future
    missions as required by the CINCs. These delays can not only adversely
    affect fleet readiness, they can also cause dramatic workload
    imbalances at our shipyards. I am concerned that continued shifts in
    the workload to future years will place undue stress on the fleet and
    the yards. Therefore, I would like your commitment that your workload
    plans will be adjusted to maintain a stable workload and workforce at
    the shipyards.
        Secretary Young. Ship depot maintenance plans are continuously
    updated to incorporate actual execution, operational impacts, and
    financial resources. Availabilities are deferred only after the risk to
    Fleet readiness associated with deferring the work is determined and
    deemed acceptable.
        The Navy actively works to refine and schedule ship depot
    availabilities for effective shipyard execution. Keeping the shipyard
    workload level is essential to efficient operation and is a key
    consideration in scheduling availabilities.
        A skilled and motivated shipyard workforce is essential to maintain
    the Navy's high state of material readiness. Recognizing that many in
    the public shipyard workforce are rapidly approaching retirement
    eligibility, a primary focus of the Navy's depot maintenance program is
    maintaining a stable workforce with the skills we need. In view of
    these needs, we appreciate the support Congress has given the naval
    shipyard apprentice programs which will provide the skilled workers we
    will need in the future.

                                  LCS CONCERNS

        75, 76. Senator Collins. Admiral Mullen, I have been recently
    hearing discussions that the Navy may be accelerating the littoral
    combat ship (LCS) to deploy ahead of the development of DD(X). DD(X),
    as I understand it, is to be the engine and the lead shipbuilding
    program that will drive the rest of the family of ships. While LCS may
    indeed have a unique, contributory niche role in that future netted
    force, I am concerned that the Navy may be getting ahead of itself in
    ascribing characteristics to LCS for which a requirements assessment
    has yet to be conducted or a concept validated. Has the Navy performed
    the traditional analysis of alternatives requirements on the LCS ship?
    Can you respond to my concerns regarding this member of the DD(X)
    family?
        Admiral Mullen. The Navy has not yet conducted a traditional AOA
    for the LCS.
        However, the Navy is developing a draft surface combatant family of
    ships capstone requirements document (CRD). This document will be an
    overarching requirements document from which the individual operational
    requirements documents for the DD(X), CG(X), and the LCS will be
    derived. Although a traditional AOA has not been conducted, the Navy is
    leveraging off the CRD and a number of studies to help define the LCS
    requirements.
        The Navy is in the early process of exploring technologies and
    potential characteristics for the LCS. As an example, the Naval War
    College (NWC) was tasked to recommend characteristics best suited for
    LCS; and, if the technology exists, or will exist in the near-term, it
    will support these characteristics. The Navy plans to use the data from
    these studies as contributory material in the development of the ORD to
    support the LCS acquisition. A formal ORD development and validation
    process, along with the required supporting analysis, is beginning.
    This will be a necessary part of the acquisition documentation needed
    for LCS Milestone decisions.

                               FACTORY EFFICIENCY

        77. Senator Collins. Admiral Mullen, the submarine factory workload
    is seeing a rise in anticipated future requirements, particularly in
    light of the Trident submarine conversions and the increased number of
    Los Angeles-class refuelings over the next few years. I believe that
    this influx of work should be providing additional opportunities across
    the submarine factory. However, the yard located in my state is at risk
    of seeing dramatic peaks and valleys in its workload during fiscal year
    2003 and fiscal year 2004. This is simply unacceptable. Are you looking
    into ways that the Navy can more efficiently utilize the yards
    supporting the submarine factory to ensure a level workload at all of
    the naval shipyards is implemented to ensure that the submarine factory
    is operating at it maximum efficiency?
        Admiral Mullen. The contribution provided by the workers of the
    naval shipyards is important to the Navy and the Nation. The innovation
    and dedication to quality submarine maintenance by the workers at
    Portsmouth Naval Shipyard (PNSY) is greatly appreciated by the
    Department.
        The fiscal year 2003 workload phasing challenge at PNSY is
    primarily driven by the difficult decision to delay the U.S.S.
    Annapolis depot modernization period (DMP). Delaying this DMP was
    considered the best available option to fund Navy operational
    priorities. This option limited the effect to a single submarine.
        The Navy is continuously evaluating the scheduling of ship
    availabilities to achieve the highest state of readiness balanced
    against shipyard workload and efficiency considerations. In formulating
    the fiscal year 2003 budget the Navy carefully considered workload at
    PNSY. The budgeted workload is consistent with fiscal year 2002
    budgeted levels. The Department considers several factors when
    assigning submarine availabilities. They include:
        a) Assignment of effort to an industrial facility near the ship's
    homeport;
        b) Maintaining reactor servicing skill levels; and
        c) Avoiding, to the extent practical, major shifts in workload
    levels across all the shipyards.
        The Department is in the process of evaluating availability
    assignments through the FYDP. All four of the naval shipyard commanders
    are part of the planning process. Their inputs are extremely valuable
    as the Department goes through the difficult effort of achieving the
    optimum balance between fleet readiness, fiscal realities, and shipyard
    workloading.

        [Whereupon, at 4:34 p.m., the subcommittee adjourned.]

    DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR
                                      2003

                                  ----------

                             TUESDAY, APRIL 9, 2002

                                   U.S. Senate,
                              Subcommittee on Seapower,
                                    Committee on Armed Services
                                                        Washington, DC.

    NAVY EQUIPMENT REQUIRED FOR FIELDING A 21ST CENTURY CAPABILITIES-BASED
                                      NAVY

        The subcommittee met, pursuant to notice, at 2:37 p.m. in
    room SR-222, Russell Senate Office Building, Senator Edward M.
    Kennedy (chairman of the subcommittee) presiding.
        Committee members present: Senators Kennedy, Reed, Warner,
    McCain, Sessions, and Collins.
        Committee staff member present: David S. Lyles, staff
    director.
        Majority staff members present: Creighton Greene,
    professional staff member; and Christina D. Still, professional
    staff member.
        Minority staff members present: Judith A. Ansley,
    Republican staff director; Edward H. Edens IV, professional
    staff member; Gary M. Hall, professional staff member; Ambrose
    R. Hock, professional staff member; and Thomas L. MacKenzie,
    professional staff member.
        Staff assistants present: Daniel K. Goldsmith and Andrew
    Kent.
        Committee members' assistants present: Brady King and
    Christina L. Martin, assistants to Senator Kennedy; Frederick
    M. Downey, assistant to Senator Lieberman; Elizabeth King,
    assistant to Senator Reed; Benjamin L. Cassidy, assistant to
    Senator Warner; Christopher J. Paul, assistant to Senator
    McCain; Arch Galloway II, assistant to Senator Sessions;
    Kristine Fauser, assistant to Senator Collins; and Derek
    Maurer, assistant to Senator Bunning.

        OPENING STATEMENT OF SENATOR EDWARD M. KENNEDY, CHAIRMAN

        Senator Kennedy. Senator Sessions will join us shortly and
    we will proceed. The subcommittee meets this afternoon to
    discuss the Navy-Marine Corps equipment issues and needs in
    order to meet their future operational requirements. We will
    hear from two panels of witnesses. The subcommittee invited
    Admiral Vern Clark, the Chief of Naval Operations, to discuss
    the overall strategic context in which the Navy Department is
    making specific hardware choices in the budget and the future
    years defense program and how the Navy budget supports fielding
    a 21st century capabilities-based Navy.
        On the second panel we will hear from four witnesses about
    the specific equipment programs that will support the
    Department of the Navy's 21st century capabilities: Major
    General William Whitlow, Director of the Expeditionary Warfare
    Division; Rear Admiral Phillip Balisle, Director of the Surface
    Warfare Division; Rear Admiral Paul Sullivan, Director of the
    Submarine Warfare Division; and Rear Admiral Michael McCabe,
    Director of the Air Warfare Division. I welcome each of our
    witnesses and look forward to their testimony.
        I believe the world we face will continue to be one of
    uncertainty and unrest. Therefore, I continue to believe that
    greater emphasis should be placed on lighter, more lethal
    forces and on mobility forces. We have seen proof during the
    last year that this is a job at which the Navy and Marine Corps
    excel.
        However, we must not let the outstanding performances by
    the Navy and Marine Corps distract our attention from some very
    real problems that face the sea services. This subcommittee has
    been working diligently with the Department of the Navy to
    address some of the very important problems, including
    improving fire support capability, organic Marine Corps fire
    support and Navy shore fire support, and augmenting our mine
    countermeasures capability both for sea and land combat.
        I note for the record this subcommittee has taken the lead
    in Congress in ensuring that the Navy and Marine Corps improve
    existing capabilities in these areas, in many cases over the
    objections of senior Defense and Navy Department officials.
        Unfortunately, we are seeing early signs that the Navy
    Department may be lapsing into previous unacceptable behavior.
    Some of the instances that may be forming a pattern are:

             Cancelling the planned and attack destroyer,
            the DD 21 program. DD 21 was intended to be a multi-
            mission ship. It was primarily aimed at meeting the
            Navy surface fire support requirements for the Marine
            Corps. DD 21 was to have been the first ship in a class
            of 32 ships, with delivery starting fiscal year 2010.
              Marine Corps officials had previously testified that
            nothing short of the capability of the planned DD 21
            with two 155-millimeter guns would meet the fire
            support requirements.
              With the new DD(X) program, there is no firm
            commitment in the new future years defense program to
            build anything other than a demonstration ship using
            reseach and development (R&D) funding. It is not clear
            when or if the future years defense program (FYDP)
            would lead to meeting the Marine Corps fire support
            needs.
             Terminating the fire support missile program,
            the Land Attack Standard Missile (LASM). The LASM
            program was a program designed to use old surface-to-
            air missiles to provide some fire support capability,
            particularly at longer ranges. LASM was intended to be
            an interim system that would have been replaced by a
            new system, the advanced land attack missile (ALAM)
            system. Last year it appeared that the Navy was
            cancelling ALAM. However, we could not tell for sure
            since the budget request did not give any information
            about fiscal years after 2002. This year it is clear
            the Navy is cancelling both the ALAM and the LASM.
             Cancellation of the Shallow Water Minefield
            Breaching System. The Navy decided last year to
            terminate the Shallow Water Assault Breaching System
            and distributed explosive technology, the Shallow Water
            Mine Clearance System. In part, they based this
            decision on the fact that the systems were too bulky to
            be carried continuously aboard ship and the lanes
            cleared through the minefield would not be wide enough.
              The Navy made this cancellation in spite of the fact
            that the Navy has no near-term alternative to provide
            this capability. It is hard to understand why having no
            capability in this area would be better than at least
            having some capability, whatever the shortcomings.
             Retiring the U.S.S. Inchon mine command and
            control ship. Several years ago, with significant
            pressure from this subcommittee, the Navy decided they
            needed to have a large aviation-capable ship that would
            be dedicated to mine countermeasures. They converted an
            older amphibious ship, the U.S.S. Inchon, to this duty.
            While the ship served the purposes for which it was
            intended, the fact that it was an older ship and was
            probably not the highest on the Navy maintenance
            priority list caused an erosion in the material
            condition.
              Within the last year, the crew experienced a fire on
            the ship, with one person killed. Because the Navy has
            decided that fixing this ship would be too expensive,
            they are retiring the ship with no immediate
            replacement. Navy officials have said that in the
            interim they would use one of the amphibious ships in
            the regular fleet in case they need to conduct
            dedicated minesweeping operations.

        This was the position we were in before the subcommittee
    began pressing the Navy to make a significant mine warfare
    improvement in the early 1990s.
        Unfortunately, there are other examples I could cite, but
    in the interest of time I will not. Each of these actions taken
    individually may have an explanation. However, taken as a
    whole, I fear they are part of a pattern of the Navy
    Department's walking away from their funding of the very
    capabilities that make the Navy and Marine Corps team so
    relevant in today's world.
        If there is a new national military strategy that is
    charting a new course for the Navy-Marine Corps team, we need
    to hear about it and understand it. If there is not, we need to
    ensure that the Department of the Navy does not march down a
    path of incrementally divesting capability without a thorough
    understanding of where these actions would take us. I hope we
    can explore these and other issues with Admiral Clark today.
        During the second panel we will hear from individual
    warfare area sponsors more specifically about the capabilities
    that this budget supports.
        Before we begin with Admiral Clark, I would be glad to
    recognize Senator McCain.

                    STATEMENT OF SENATOR JOHN McCAIN

        Senator McCain. Thank you, Mr. Chairman. I will be very
    brief.
        I welcome Admiral Clark and the next panel of witnesses.
    Admiral, I am very concerned from a macro sense the lack of
    proposed increases in shipbuilding. I had the privilege along
    with nine of my colleagues to visit the U.S.S. Theodore
    Roosevelt and I was proud of the fact that their morale was so
    high. It was an exhilarating experience. We also know that they
    set a record for longest time at sea.
        If you believe that there is a possibility of further
    crises like this around the world in the war on terrorism, it
    seems to me it has been made obvious that we do not have enough
    aircraft carriers. I hope in your remarks you can address that
    issue. Admiral Blair, I believe, made similar comments recently
    as we were left uncovered in certain areas as far as a carrier
    presence is concerned.
        So I am concerned about the rate of overall shipbuilding
    and I will have some specific questions. But I think there are
    many lessons we have learned from this latest conflict and one
    is that there needs to be air power from ships available for
    the area commanders to use when absolutely necessary.
        Thank you, Mr. Chairman.
        Senator Kennedy. We always welcome the former chairman of
    our committee and now the ranking member, Senator Warner.
        Senator Warner. I join you in welcoming our witnesses.
        Senator Kennedy. We welcome any comments that you would
    like to make. Before you begin, Admiral Clark, I would like to
    recognize our subcommittee's ranking member, Senator Sessions.
        [The prepared statement of Senator Sessions follows:]

                  PREPARED STATEMENT BY SENATOR JEFF SESSIONS

        I thank our Chairman, Senator Kennedy, for scheduling today's
    hearing and join him in welcoming Admiral Clark, the Chief of Naval
    Operations, and his requirements officers.
        Our men and women of the Navy will depend on the strategy,
    doctrine, and equipment that we will be discussing today to carry out
    their missions. The strategy and doctrine must be sound. The equipment
    must be the best we can provide and it must be provided in sufficient
    quantities to make a difference.
        We have a great challenge before us. The Department of Defense
    decided during the 2001 Quadrennial Defense Review to adopt a
    capabilities-based approach to planning instead of using a threat-based
    approach. Tomorrow's force must have the capability to handle the most
    challenging scenarios of the future. While it is prudent to understand
    the lessons learned from Operation Desert Storm, previous conflicts,
    and of the current war on terrorism, it is imperative that we resist
    the temptation to equip tomorrow's forces based solely on lessons of
    the past. We do know from experience that the one thing we cannot
    predict is the nature of the next conflict.
        We also know, from over two centuries of operations, that a strong
    Navy and Marine Corps are vital to national security. The American
    people have seen vivid images on their televisions and in newspapers
    and magazines of the Navy and Marine Corps conducting strikes in
    Afghanistan. These vivid images underscore, once again, the importance
    of ships and marines at sea that can respond quickly to the operational
    commander's requirements and conduct continuous joint combat
    operations.
        The Navy and Marine Corps team's ability to provide forcible entry
    and to strike quickly and with deadly accuracy deters potential
    adversaries from taking offensive action. The men and women of the Navy
    and Marine Corps require information superiority to carry out the full
    range of missions from forward-deployed presence to full scale war.
    This information superiority provides strategic and tactical advantage
    and enables rapid, precise, and effective action.
        Presence, and the resulting information superiority, is possible
    through our ships and aircraft exercising freedom of navigation in the
    littorals and on the high seas throughout the world. Forward deployed
    ships provide the sovereign territory from which power can be projected
    on short notice. They provide the regional commanders in chief a
    rapidly scalable and sustainable range of options to support our
    national interests.
        The requirements for equipment on those ships and aircraft are
    researched, developed, tested, and then procured to support anticipated
    Navy and Marine Corps missions. Every development and procurement
    program attempts to provide what is needed to meet a valid military
    requirement. Decisions on the capabilities and reliability provided by
    a given program are often made years before the equipment is fielded.
        Requirements officers and program managers face a number of
    challenges in providing the required equipment. They must decide
    whether to: upgrade aging equipment or buy new; develop equipment or
    buy off-the-shelf; provide exact specifications or provide performance
    parameters; design the equipment to accept rapid technology changes or
    delay procurement to provide added capability; and fix the cost for
    development or provide cost incentives for improved development
    performance. They look for ways to shorten the acquisition cycle and
    leverage funding from other programs.
        The requirements officers' newest challenge is to adjust their
    programs to provide a specific capability rather than to provide a
    counter for a specific threat. Our challenge is to review the
    development and procurement proposed in this budget request to ensure
    our forces are adequately equipped for future operations. The most
    common way to evaluate programs for this type of review is to compare a
    future capability requirement to the program cost and performance
    indicators. Although it is easiest to make evaluations from the
    perspective of the individual program or its specific warfare area,
    future operations require us to broaden our perspective to include
    evaluation of how the capability supports joint, coalition, and other
    warfare specialty operations.
        The following are key questions which will assist us in these
    reviews and evaluations:
        1. Will Navy and Marine Corps plans for mine warfare capabilities
    enable timely access for joint operations?
        2. What is the Navy's plan for ensuring P-3 and SH-60 aircraft
    capabilities and availability for joint and coalition forces?
        3. Is the plan for modernization adequate to support the tempo and
    nature of expected operations, given the lagging plans to buy new ships
    and aircraft?
        4. What capabilities directly support joint and coalition
    operations, and should the proposed capabilities include seamless
    communications and operations with Navy and Marine Corps operational
    units?
        5. Can the Navy's plan to provide land attack weapons in support of
    joint operations be accelerated?
        Again, welcome to our witnesses today. I look forward to their
    testimony.

        Senator Sessions. Mr. Chairman, I also have a statement
    from Senator Collins.
        [The prepared statement of Senator Collins follows:]

                  Prepared Statement by Senator Susan Collins

        Thank you Mr. Chairman. I would like to thank the distinguished
    chair and ranking member for calling this very important hearing on the
    topic of Navy equipment required for fielding a 21st century
    capabilities-based Navy. As we predicted, the battleground and
    warfighting requirements are changing and so must the naval forces of
    today. As I have stated many times, seapower is among the most
    essential components of our national security posture and an important
    part of ensuring the U.S. meets its global commitments.
        Currently, our naval forces are providing immediate access and
    forward-deployed combat power, 24/7, in support of Operation Enduring
    Freedom, but our current capabilities and equipment must evolve as the
    threat continues to evolve. Our naval forces of tomorrow must stand
    ready to assure access and to project joint and combined power in
    support of national policy.
        The fact is that we will face a variety of challenges in the 21st
    century. These challenges, such as cyberwarfare, weapons of mass
    destruction, and continued international terrorism, define not only an
    unpredictable future, but one that will require our naval forces to
    operate with new deterrence options and require a significant
    investment in next-generation research and development capabilities and
    platforms. These platforms and capabilities will have to be survivable,
    cost effective, and agile enough to allow for a highly capable, easily
    maintained, and modernized force for years to come.
        These capabilities, and the fact that two-thirds of the world's
    surface is covered by ocean, make a compelling case for robust naval
    forces. Forward presence, however, requires that our ships, subs, and
    aircraft are available and ready to deter, fight, and win. I have said
    and will continue to state, that in order to meet the challenges of the
    21st century we must recapitalize and invest in the naval forces of
    tomorrow today!
        America's national security demands that we recapitalize our Navy
    today. President Bush and his administration have identified this
    global war on terrorism and homeland security as our highest
    priorities. As we in Congress work with the Bush administration to
    defend freedom, I will continue to encourage the replenishment of our
    naval fleet as the cornerstone of this global defense.
        We cannot continue to defer this investment year after year, as we
    are just slipping deeper and deeper into a procurement hole, and that
    is why we must look at all of the resources available in the Department
    of the Defense's budget, including the Defense Emergency Response Fund
    (DERF), or contingency fund, to begin to address this egregious
    shortfall.
        If we continue to underinvest in our critical naval forces--i.e.,
    our naval shipbuilding and research and development accounts--the
    future force is at risk. Therefore, I am convinced there will be a need
    for even greater reliance on our naval forces as joint operations
    emerge to provide sovereignty to our fighting forces. Proof is in our
    current operations in Afghanistan. For these reasons and many others, I
    share the view of many of my colleagues that we must recapitalize our
    fleet today to ensure that America retains her maritime power in the
    21st century.
        I will close by welcoming each of the distinguished witnesses to
    the committee, and I look forward to working with each of you in the
    weeks and months ahead, to not only bring the procurement rates of our
    platforms up, but also to ensure that we are investing in the force of
    tomorrow. I look forward to your testimony this afternoon. Thank you,
    Mr. Chairman.

        Senator Kennedy. Thank you. Admiral Clark, I enjoyed
    getting a chance to talk with you recently and valued those
    conversations and insights. We welcome you here before the
    subcommittee and look forward to your testimony.

        STATEMENT OF ADM. VERNON E. CLARK, USN, CHIEF OF NAVAL
                               OPERATIONS

        Admiral Clark. Thank you very much, Mr. Chairman, Senator
    McCain, and Senator Warner. Good to see you this afternoon.
    Speaking on behalf of the rest of the team in Panel Two which
    is going to be here in a few minutes and the members of our
    staff, we appreciate the chance to come up and see you this
    afternoon.
        Mr. Chairman, I have submitted an extensive statement that
    addresses a number of the things that you spoke about and, with
    your concurrence, I would ask that we submit that for the
    record. Since I appeared before the full committee on March 7,
    I will keep my opening comments brief.
        Senator Kennedy. Without objection, that is so ordered.
        Admiral Clark. I want to start by just saying that it is
    clear to me, reinforcing Senator McCain's comments, that our
    success in Operation Enduring Freedom has been caused first and
    foremost by the dedication and the professionalism of the men
    and women who are serving in our Navy, certainly the finest
    navy in the world, second to none.
        Second, I believe that our success in Operation Enduring
    Freedom is the result of the significant investments that have
    been made in current readiness and manpower, improvements to
    those accounts, and those changes supported by this committee
    and the rest of Congress.
        I also believe that this war on terrorism is certainly a
    powerful demonstration of why our country needs a navy. I
    believe that it is a vivid illustration of the relevance of
    operating from the maritime domain, the need for maritime
    dominance. We are taking our Nation's sovereignty to the far
    corners of the Earth, specifically off the coast of Pakistan
    and Afghanistan, and the beauty of that is that we are doing it
    without a permission slip. We are doing it without getting the
    permission of some country that can say yes, you can, or no,
    you cannot.
        To me that means that ``anywhere, any time'' is not just a
    bumper sticker. In the case of the United States Navy and its
    number one partner in jointness, the United States Marine
    Corps, it is a reality.
        Now, when I appeared before the full committee on March 7,
    I talked about the fact that the Navy and Marine Corps team had
    been a key player, and I am sensitive to the use of words that
    sound self-aggrandizing, that sound like we think that we might
    be able to do it all by ourselves. I think I want to emphasize
    that none of the services in my view can do it all by
    themselves and certainly we cannot.
        But I do believe that Operation Enduring Freedom has been
    an excellent example of the things that I have already spoken
    to and have demonstrated, that the United States Navy and its
    ability to operate out of the maritime domain has made it a key
    factor in the successes that we have realized in operations in
    Afghanistan. From the issues of tactical strike to being a lead
    player in overland manned surveillance, not something that you
    would normally think about when you talk about the United
    States Navy, a key player on the ground side--many people are
    unaware of the fact that we had 750 Navy people on the beach,
    central to the Special Operations Forces mission, from Kitty
    Hawk to our own Special Forces.
        Then, of course, we are a leader in the maritime coalition.
    At times there have been upwards of 105 ships, Navy ships from
    the various nations, present in those operations. They want to
    be partners, first and foremost, with one Navy, and that is the
    United States Navy.
        Moreover, I believe that this war has been showcasing what
    it means to be a capabilities-based Navy. It is highlighting
    our flexibility, precision, reach, and persistence. Admiral
    Mullen spoke before this subcommittee a few days back and
    talked about the fact that 80 percent of the Navy strike
    sorties, the operations conducted, when the sorties were
    launched the pilots were unaware of the specific targets that
    they were going to hit; that 93 percent of Navy TACAIR ordnance
    was precision guided--certainly reemphasizing the importance of
    the decision to focus on precision after Operation Desert
    Storm.
        Then, more significantly, there is the issue of combat
    reach. The average sorties have been 7 hours in the cockpit for
    fighter pilots flying missions over Afghanistan, sometimes as
    long as 12 hours.
        Then the whole issue of persistence, one of my favorite
    words these days, focusing on the importance of being there,
    the importance of being able to respond at a moment's notice,
    and especially when you have thousands of Americans committed
    to a particular operation.
        This year's budget, the budget that we are here to talk
    about today, was constituted with some real tough choices, I
    believe the correct choices, given the top line that we had to
    work with. It does prioritize current readiness. It does
    prioritize investments in manpower. When somebody asks the
    reason why, as I talked about some on March 7, it is because
    our Navy must be ready to go to sea, fight and win on a
    moment's notice. That is what these priorities do.
        That being said, it is very clear still that we have to
    keep our eye on the future. We must understand that in order to
    have a Navy in the future we have to have ships and we have to
    procure aircraft. Clearly, this budget does not have us where
    we would like to be and where we would desire to be, and that
    is the biggest challenge that we face in the procurement side
    in our Navy today.
        I do want to say that I do not believe that it is all about
    numbers. I do believe that numbers count, numbers have a
    quality all their own. There is no question about that. But it
    is more important that we buy the right kinds of capabilities
    in the ships that we are procuring in the future; and that is
    what we need to focus on and ensure that we are doing.
        We are fully engaged in transforming this Navy into a 21st
    century fighting force, and to that end we have terminated some
    programs. Mr. Chairman, you have mentioned some of those in
    your opening remarks. We have terminated 7 programs and
    restructured 12 others over previous years. We have done this
    to capture efficiencies, but also to prioritize the investment
    in the areas that we believe will produce for us the most
    warfighting capability.
        When I think about the future and I think about where our
    Navy is going in the future--and this is not tomorrow's Navy,
    but it is a Navy of a generation away--I think about a Navy
    that has more of the kinds of capabilities that I think that we
    are demonstrating today in Afghanistan. That is about
    flexibility and precision and combat reach and persistence and
    expeditionary mobility.
        I believe the future is about Joint Strike Fighter, the
    Littoral Combatant Ship, and DD(X), and I believe that these
    platforms will play huge and important roles in increasing our
    ability to dominate a battle space in the future and improve
    our combat effectiveness. It is about CVN(X) and it is about F/
    A-18E and it is about the new submarine programs. It is about
    research and development into our future.
        I would just say that, with regard to DD(X), the output
    from the research and development in this program will produce
    a family of ships that is going to define what the United
    States Navy is all about for, in my opinion, the next four
    decades, and it is of utmost importance and we solicit your
    support in this regard.
        I believe that DD(X) and the R&D that is in DD(X) will also
    help our maritime partner, the United States Coast Guard, in
    its modernization and transformation efforts.
        Further, to the greatest extent possible, new technologies
    developed along the way must be incorporated into legacy
    platforms, ensuring that we transform the hulls that we own
    today. I think it important to point out that over 60 percent
    of the hulls that we own today will be in our Navy in the year
    2020. We must ensure that we take the steps to modernize that
    capability so that they are viable throughout their lifetime.
        So for the future, I see a Navy that is all about being
    able to climb into the ring with an enemy. We are about
    ensuring access. It means that we must be able to climb in the
    ring with an enemy and operate in high-risk environments, and
    the littoral can be a high-risk environment, with robust mine
    warfare and shallow water ASW capabilities.
        I see a Navy in the future that works more smoothly and
    effectively with our number one partner, the United States
    Marine Corps, in our newly designated expeditionary strike
    groups. I hope that we get a chance to talk more about that in
    the question and answer session.
        I see a Navy that plays a key part in homeland security and
    missile defense, and I see a Navy that is fully networked, with
    all the implications that suggests even more responsive and
    even more lethal in the future.
        In short, I see a Navy more effective than the Navy that we
    have today, a capabilities-based Navy that, like today, is
    preeminent in the maritime domain and can fight and win to
    preserve the blessings of peace that we enjoy in our country
    today and that we want to enjoy in the future for our children
    and our children's children.
        Mr. Chairman, I thank you again for the chance to be with
    you today and I look forward to responding to your questions.
        [The prepared statement of Admiral Clark follows:]

                Prepared Statement by Adm. Vernon E. Clark, USN

        Mr. Chairman and members of the subcommittee, I appreciate this
    opportunity to appear before you. Your support of America's Navy has
    been vital to accomplishing our missions around the world--including
    swift and effective response to the attacks of 11 September 2001--and I
    thank you.

                             THE STRATEGIC CONTEXT

        The global war on terrorism is America's first war of the 21st
    century. Violent horizons lie before us, harboring profound challenges
    including the threat of cyberwar, weapons of mass destruction,
    continued international terrorism, and the havoc accompanying failed
    states. Importantly, such threats do not replace the specter of state-
    on-state conflict. They add to the danger and uncertainty, providing
    new sparks to already combustible situations.
        This terrorist-filled world is more dangerous in many ways than
    that which existed when we faced the global strike and sea denial
    capabilities of the Soviet Union. We no longer counter a peer adversary
    that maintains order within its geopolitical orbit. Rather, the
    international landscape today is comprised of multiple actors whose
    interests form a complex pattern of interwoven and explosive tensions.
        Potential adversaries today include other states, informal
    alliances of states, and terrorist elements that range from state-
    sponsored to state-opposed. Such terrorists may be local actors or
    integrated into global federations dedicated to the export of killing.
    Catalysts motivating potential enemies include religious fervor,
    political ideology, aspirations of regional dominance, dedication to
    fomenting domestic revolutions and, conversely, efforts at sustaining
    domestic order by deflecting internal tensions outward.
        Little is certain in this new world beyond the fact that such
    tensions can be expected to lead to repeated crises, quite often with
    minimal warning or predictability regarding size, location, or
    intensity. It can also be presumed that given America's peerless
    military power, strikes against our Nation, people, or interests will
    be delivered in an asymmetric manner, such as the attacks that took
    place last September in New York and Washington, or the previous
    October in Yemen against U.S.S. Cole.

                      THE NAVY'S ROLE IN THE 21ST CENTURY

        Forward deployed naval forces will continue to be a vital part of
    America's defense as we move into the 21st century, a time during which
    the range of threats will in all likelihood grow in volatility and
    unpredictability. Thus America's Navy must remain prepared to conduct
    combat operations anytime, anywhere with maximum effectiveness and
    minimum risk.
        Yet accomplishing our missions has become steadily more
    challenging. Our Navy's force structure declined 41 percent since 1991,
    from 538 to 315 ships, while the global war on terrorism has increased
    the call for forward-deployed naval forces. The introduction of a new
    class of smaller combatant--the Littoral combat ship (LCS)--will help
    ease the strain and could lead to a war-sustaining fleet of
    approximately 375 ships.
        The current pace of operations is very high. Approximately half of
    the fleet is at sea every day. Nearly one-third of the fleet is
    deployed forward around the world, while the remainder is operating off
    our coasts, conducting training or homeland defense missions with the
    United States Coast Guard.
        In view of this taxing requirement, we are exploring innovative
    methods of increasing the presence and striking power of naval forces.
    One construct is to complement amphibious ready groups with surface
    combatants and submarines, producing expeditionary strike groups
    equipped to destroy terrorist elements wherever they may be found.
        We are also experimenting with flexible manning techniques to
    produce greater efficiencies in conducting prolonged on-station
    missions, such as guarding international straits or other locations of
    exceptional strategic value.
        At home, fleet commanders are taking measures to minimize the loss
    of readiness that traditionally occurs between deployments.
    Historically, deployed readiness has been achieved at the expense of
    the non-deployed segment of our force structure. That is no longer
    acceptable and, thanks to Congressional support, we have made
    significant progress over the past several years in correcting long-
    standing shortfalls in spare parts, munitions, and training.
        Fiscal year 2003's budget submission continues that trend, adding
    $2.7 billion to manpower accounts, $2.8 billion to operations and
    maintenance accounts, over $1 billion to research and development, and
    over a half billion dollars to procurement. We have also programmed
    $2.6 billion to buy munitions and $1.3 billion for homeland defense.

                         NAVY TRANSFORMATIONAL CONCEPTS

        Sustaining warfighting effectiveness in this uncertain strategic
    environment will require continued global presence by sovereign naval
    forces that are prepared to counter whatever capabilities the enemy may
    bring to bear. Quantity has a quality all its own in this regard, and
    our Navy will remain on-station around the world, prepared to fight and
    win.
        The dynamic and unpredictable nature of potential enemies demands
    that we continually develop new and more effective capabilities to
    prevent crises and--should deterrence fail--project offensive and
    defensive power ashore. The 21st century Navy must be strategically and
    operationally agile, technologically and organizationally innovative,
    networked at every level, highly joint, and effectively integrated with
    allies.
        Three core operational concepts are key to achieving Navy
    transformation: the application of precise and persistent global
    striking power, the ability to assure access to the littorals and
    project defense overland, and the capability to conduct sustained
    operations from sea bases.
        Precise and persistent global striking power is the offensive
    element of the 21st century Navy. Its effectiveness is derived from
    network-centric operations in which platforms and sensors are fully
    integrated to form seamless warfighting knowledge. Situational
    awareness generated from this network provides rich understanding of
    the adversary that enables the tailored application of power, allowing
    our forces to sustain the initiative, disrupt enemy timelines, and
    deliver operational success.
        Concurrently, the ability to assure access to the littorals and
    project defense overland provides battlefield dominance, assuring
    allies and deterring adversaries. Such battlefield dominance exploits
    expeditionary sensor grids that sweep from seabed to space, cueing
    coordinated air, surface and subsurface combatants to neutralize enemy
    threats. This element of naval power relies upon control of the seas,
    allowing us to guard the flow of trade while identifying, tracking, and
    intercepting threats long before they reach our shores.
        Finally, leveraging the mobility and security of ships on the vast
    oceans in the form of sea basing assures the effective projection of
    sovereign American power. At the operational level of war, sea basing
    serves as a secure foundation from which to project expeditionary
    warfare, while minimizing the requirement to stage vulnerable forces
    and supplies ashore.
        Achieving Navy transformation will include both new procurement and
    aggressive modernization. Nearly 60 percent of the ships in the Navy
    today will be in the fleet in 2020. Thus a significant portion of
    Navy's transformation will occur within existing hulls, placing an
    emphasis on new systems and capabilities that can be inserted through
    modernization. These upgraded platforms will complement new ships and
    aircraft joining our fleet.
        Examples of exciting new technologies that will accelerate our
    transformation toward a fully networked Navy include the DD(X)
    destroyer and its related family of ships, Joint Strike Fighter,
    unmanned aerial vehicles, unmanned underwater vehicles, Tactical
    Tomahawk, advanced gun system, theater ballistic missile system,
    cooperative engagement capability, Navy-Marine Corps intranet, and SSGN
    strike submarine, among others. These systems, in turn, will be
    employed in innovative ways via concepts validated in the fleet battle
    experiment series coordinated by the Navy Warfare Development Command
    in Newport, Rhode Island.
        As it progresses, the process of Navy transformation will yield a
    dispersed and networked fleet that enhances deterrence, assures access,
    conducts precision strikes, gathers real-time intelligence, exercises
    joint command and control, and leverages the priceless advantage of sea
    control. In short, it will be a fleet that serves as the leading edge
    of America's defense--around the world, around the clock.

                         NAVY READINESS AND PROCUREMENT

        As promised in previous testimony, the Navy's budget funds manpower
    and current readiness first and fullest because those accounts are key
    to mission accomplishment around the world. Our operational success in
    Afghanistan is a direct reflection of these investment priorities, as
    supported by Congress.
        To sustain the size of the current fleet, we would need to buy an
    average of 180-210 aircraft and 9 ships a year. We are currently
    procuring significantly less than that. The fiscal year 2003 budget
    will, if approved as submitted, provide just 5 ships and 83 naval
    aircraft.
        Harvesting efficiencies within our Navy is key to increasing
    procurement and we will focus a major effort toward that goal over the
    next 2 years. Failure to free such resources would have a profoundly
    negative effect on the fleet.
        Naval aviation, in particular, would suffer as that community faces
    the greatest near-term challenges. Our current aviation force contains
    the oldest mix of type/model/series aircraft in naval history. Yet
    these aircraft are being tasked to unprecedented levels in on-going
    conflict. The F/A-18 force, for example, has been flown well in excess
    of planned utilization rates and more than 300 F/A-18 aircraft will
    require service life extensions earlier than planned. The best way to
    address such problems is to introduce new aircraft into the fleet as
    soon as possible
        While our surface and subsurface combatant fleet is, on average,
    fairly young, the rate of ship recapitalization bears watching. The
    following chart illustrates the dramatic decline in authorized ships
    since 1980.

        The impact of the current low procurement rate goes beyond force
    levels. It adversely affects the stability of our defense industrial
    base, and we are paying a premium in program cost due to the small
    number of units being built.
        On a more positive note, maintenance and modernization efforts are
    progressing well due to solid increases in current readiness funding
    over the past several years. The fiscal year 2003 budget requests the
    following additional dollars over the fiscal year 2002 budget: $804
    million for ship operations and maintenance, $119 million for flying
    operations and maintenance, $276 million for combat and weapons
    support, and $310 million for base support.
        Additionally, the ships and aircraft being developed are superb and
    will serve us well as the core capability of our force in the coming
    decades. DD(X), CVN(X), JSF, F/A-18E/F, LPD-17 and the Virginia-class
    SSN present impressive technological leaps in warfighting capability,
    innovation, and reliability. Program specifics include:
        DD(X)/CG(X)/LCS. Maritime dominance in the 21st century requires a
    naval force capable of projecting power and defeating anti-access
    threats. To accomplish these missions, the future surface naval
    combatant force will consist of four elements: DD(X) advanced multi-
    mission destroyers that provide precision strike and volume fires;
    CG(X) advanced cruisers to achieve sustained air superiority against
    airborne threats and ballistic missiles; agile Littoral combat ships to
    defeat enemy defenses such as mines, small boats, and submarines; and
    today's Aegis fleet kept current through the insertion of developing
    technologies. Cutting-edge systems integral to this family of ships
    include the advanced gun system, multi-function radar/volume search
    radar, integrated power system electric drive, and revolutionary hull
    forms.
        CVN(X). The fiscal year 2003 budget provides RDT&E and advance
    procurement for the first CVN(X). CVN(X) will replace U.S.S. Enterprise
    in fiscal year 2014 when that ship is in her 53rd year of commissioned
    service. Design objectives for the CVN(X) class include a significant
    reduction of total ownership costs during the carrier's 50-year
    expected service life, reduced manning, and incorporation of a flexible
    infrastructure that will allow the insertion of new capabilities as
    they evolve.
        JSF. The Joint Strike Fighter contract was signed in 2001. It will
    provide an aircraft with unprecedented stealth and range to the fleet
    as part of a family of tri-service, next-generation strike aircraft
    with an emphasis on commonality and technological superiority at an
    affordable price. The fiscal year 2003 budget supports procurement of
    the initial variant in fiscal year 2006.
        F/A-18E/F. The F/A-18E/F will replace older F/A-18s and all F-14s.
    There is extensive commonality of weapons systems, avionics, and
    software between F/A-18 variants, and the infrastructure supporting the
    Super Hornet builds upon existing organizations.
        LPD-17. Although we have experienced design and production
    difficulties with the lead ship, we remain fully committed to this key
    program. LPD-17 supports vital littoral warfighting requirements and
    promises relief from the escalating costs of our aging amphibious
    ships. The LPD-17 class will replace four older classes of ships and
    serve as a central element of future amphibious ready groups/
    expeditionary strike groups. We need to accelerate development of these
    ships as rapidly as design and production facilities will allow.
        Virginia-class submarine (SSN-774). This class will replace Los
    Angeles-class (SSN-688) attack submarines as they leave the fleet. SSN-
    774s are designed for multi-mission littoral operations, as well as
    traditional open-ocean anti-submarine and anti-surface missions. They
    will also incorporate new technologies as they become available,
    ensuring future effectiveness. The fiscal year 2003 budget procures one
    submarine per year and continues RDT&E. This pace of procurement will
    have to be increased beyond the current FYDP to maintain the required
    attack submarine force level over the long term.

                        SAILORS: OUR MOST VALUABLE ASSET

        Winning the global war on terrorism is our primary goal, and Navy's
    fiscal year 2003 budget prioritizes manpower and current readiness
    above future readiness and infrastructure needs for that reason. As
    noted earlier, the fiscal year 2003 budget submission adds $2.7 billion
    to manpower accounts over fiscal year 2002 levels and an additional
    $2.8 billion in operations and maintenance funding.
        Thanks to the unequivocal support of Congress--including increases
    to base pay and bonuses, retirement reforms, and better medical
    benefits--sailors are staying Navy in record numbers. In 2001, we
    retained 58 percent of all eligible sailors at the end of their first
    enlistment, 67 percent of sailors with 6-10 years of service, and 83
    percent of sailors with 10-14 years of service. Additionally, 1,512
    more sailors were advanced in 2001 than the year before.

        The Navy also met our overall recruiting goals in fiscal years
    1999, 2000, and 2001, and this year we are well ahead of the record-
    setting pace of fiscal year 2001. Thanks to these successes, battle
    groups are deploying better manned than ever before.
        We are winning the battle for people, but important challenges
    remain. Officer retention in most line communities is below required
    levels and recruiting shortfalls exist in officer specialty areas and
    critical enlisted ratings.
        We are also dedicated to continuing the fight against attrition.
    The annual attrition rate for first-term sailors has been reduced from
    over 14 percent to 10 percent since 1998, retaining thousands of young
    men and women for service. Yet we can--and will--do better. Concerned,
    involved leadership is central to minimizing attrition without
    compromising standards. To make this happen, I have directed Navy
    leaders to take every measure to ensure our people succeed and prosper.
        Key to achieving that goal is cultivating a command climate
    throughout the Navy that offers plentiful opportunities, encourages
    participation, and is conducive to personal and professional growth. We
    are striving to minimize the increased wartime operational tempo of the
    fleet via careful planning and innovative training. This is the first
    time in modern history that the Services have faced a prolonged
    conflict with an all-volunteer force, and we must protect the integrity
    of our fleet.
        Two initiatives have been launched during the past year to help us
    fully utilize our sailors' potential:
        Task Force EXCEL (Excellence through our Commitment to Education
    and Learning) is making impressive progress in developing processes,
    policies, and structures to fully realize the capabilities of every
    sailor. Seventeen ratings are currently under review to find ways to
    expand professional learning, earn certifications that are recognized
    by the civilian community, and enhance personal growth. The goal is to
    provide a comprehensive development plan for every sailor based upon
    education that takes place in the classroom and on the internet as part
    of a culture of continual learning.
        Project SAIL (Sailor Advocacy through Interactive Leadership) is a
    new program that will have a major impact on how the Navy assigns our
    personnel. Using a team detailing process that includes sailor
    advocates, enhanced internet connectivity, and billet incentivization,
    Project SAIL will strengthen efforts to find the best set of orders for
    every one of our sailors, leading to assignments that are both
    professionally rewarding and personally fulfilling.
        The shared focus of these initiatives is an appreciation that
    combat success in the 21st century will rely heavily on knowledge
    management derived from a highly educated and motivated volunteer
    force, a force that is empowered in their career decisions and
    encouraged to contribute to a climate of warfighting excellence.

                      CONCLUSION: A COMMITMENT TO VICTORY

        Our national leaders have repeatedly told the American people that
    the war against terrorism will be neither easy nor short. In addition
    to targeting international terrorist networks, the President has
    singled out states sponsoring terrorism for military action should they
    threaten international peace.
        This struggle promises to be global in scope and simultaneous in
    execution. It will require the full might of America's armed forces. In
    pursuing victory, the United States Navy--forward-deployed, highly
    capable, and poised for action--will play a leading role.
        I thank the subcommittee for your continued strong support of our
    Navy and our sailors. Working together, I am confident that we will win
    the global war on terrorism, leading to a more stable and peaceful
    world.

        Senator Kennedy. Thank you very much, Admiral Clark.
        I ask Senator Sessions if he wants to say a word.
        Senator Sessions. Thank you, Mr. Chairman. I am sorry I
    missed the beginning.
        I would just say that we know that we did not achieve as
    much as we would like in shipbuilding, new ships, and that the
    QDR rate is not being met. You made a decision under the
    circumstances that I suspect was the right decision, which was
    to focus on readiness and other matters, not to cut that in
    order to build a new platform. So I guess our hearing today
    will be how are you doing? Are you actually improving your
    readiness, new equipment, technologies and enough? Or is that
    just one more thing that we are not reaching the appropriate
    level?
        Thank you, Mr. Chairman, for having this hearing and thank
    you for your leadership in general. I know you care about this
    issue. You have studied it for many years and we appreciate
    you.
        Senator Kennedy. I will ask the staff to time 7-minute
    rounds for questions if you would, please.
        Admiral, in our conversation that we had yesterday I talked
    with you about the fire support capabilities for the Marines.
    That was outlined to this subcommittee a number of years ago
    and we have tried to follow this issue closely during this time
    and during the time when Senator Cohen was the chairman of the
    subcommittee. There was a great reliance on the DD 21 in terms
    of the fire support for the Marines.
        But nonetheless, we saw the cancellation of the DD 21, now
    it is the DD(X). It is going to be later, uncertain as to what
    is going to be the follow-on, and that is going to take us down
    into the out years, 2011 to 2012, in terms of the DD(X).
        What can you tell us? Those requirements are still there.
    They are enormously important, obviously, in terms of the
    Marines and their effectiveness. What can you tell us about
    this? The requirements have not changed. With the Navy program
    in terms of its support or filling that requirement, the 155-
    millimeter gun batteries which were on the DD 21, what can you
    tell us about how you intend to meet that particular
    requirement?
        Admiral Clark. Well, thank you, Mr. Chairman. I believe
    that DD(X) is vital to our future, as I said in my very brief
    opening remark. One of the key reasons is because of the
    existence of the new technology that exists in the gun system.
    When Admiral Balisle testifies on panel two he can talk to some
    of the detailed specifics of the programmatics. If you want to
    talk dollars and those kind of things, I do not have those kind
    of things with me.
        But let me talk about the broader strategic approach to
    this. The requirements are valid. The Marine Corps has stated
    what kind of combat reach that we need. Today from our gun
    systems--and thinking about what we would do in an open session
    like this, our gun systems are incredibly--in DD(X) has an
    incredible improvement in combat reach, one of those
    characteristics that I discussed in my opening statement.
        We need that capability. I have every expectation that we
    are going to down-select that ship this month. The acquisition
    executive has testified earlier to that objective, to down-
    select in April. That down-selection will lead to the
    development and the building of a ship that in this case will
    be done in research and development. But as our acquisition
    executive said recently, as this ship moves along successfully
    we fully expect it to then transition into a class of ships
    that we need in these new expeditionary strike groups that I
    talked about.
        I believe that today's amphibious ready group does not have
    enough striking power in it. It needs the capability that we
    are going to bring to it by bringing cruisers or DDGs into it
    that have the ability to reach and strike with Tomahawks, that
    have the ability to better defend itself from air-to-surface
    attack; we are bringing submarines into the group that have the
    same type of capability.
        It is all about responding to the challenges that exist to
    us in the future. Now, when we look at future systems--and you
    mentioned the cancellation of LASM--I believe that we have to
    look at the array of systems that we have available to us.
    General Jones has indicated that he very much would like to see
    us procure a system that the Army has for the Marine Corps and
    that is the gun system in the 130s, which brings that kind of
    artillery capability to the air and able to apply it in the
    battlefield.
        We have Tomahawks and we are going to have the Advanced Gun
    System in DD(X). So one of the issues is how many systems do
    you need? My fundamental conviction is that we were
    overprogrammed. We had more programs than we can deliver. The
    analysis of LASM was that it was that it did not have the kind
    of combat effects that we needed to continue to invest in it.
        I believe, in response to your question, that the
    requirement has not changed one bit. We have to have the kind
    of reach that we are going to deliver in DD(X) and other
    systems that are in the program.
        Senator Kennedy. Well, clearly with regard to DD(X) this is
    going to provide that kind of support. The real question is
    what is going to happen in the interim period. I guess I
    understand from your response that you believe, and as I
    understand speaking for the Marines believe, that you have
    sufficient kind of variety of support from other systems to
    meet that particular requirement.
        That has been a requirement that the subcommittee has taken
    very seriously over a long period of time. It was one of the
    principal aspects of the DD 21 as well as the DD(X). My
    question really relates to what happens in this interim period
    of time to the support. It is a matter of concern to us.
        A broader issue would be the general capability for what we
    call the forcible entry capability. In my opening statement, I
    listed a number of the program cancellations and restructurings
    that would cause one to conclude that we may be moving
    incrementally away from the credible forcible entry capability.
    We have limited ability to conduct fire support now. The
    actions taken last year, including the DD 21 cancellation, give
    little hope the Navy will be able to meet the Marine Corps'
    foreseeable fire support requirements.
        We also raise the questions about the implications of the
    actions in terms of the mine warfare and where we are on this
    program, which has been something that we have talked on in
    terms of the mine warfare deficiencies as well.
        I am just interested in whether we ought to be drawing any
    kind of conclusions if we say that the shore fire capability
    immediately is of continuing concern certainly to the Marines,
    and that the mine warfare still is very much up in the air. We
    have had responses that we have new technologies that we are
    looking at, but we have not heard very much of anything in this
    committee about real progress in that area other than some
    observations that, with the high altitude bombing now, we may
    be effective in bombing particular pathways in the entrance
    into certain kinds of areas. I do not know whether that is the
    answer.
        But I suppose the question is, is there some flagging in
    terms of the determination for the forcible entry capability?
    If there is, then obviously that leads to other kinds of
    questions about the need for other kinds of advanced amphibious
    assault vehicles and amphibious assault ships and whether we
    could not buy other ships that are a lot cheaper, like cargo
    ships for example.
        I am interested in hearing you out just on that issue
    perhaps for another minute or two, and then my time is up.
        Admiral Clark. Well, certainly it is a fundamental
    requirement, I believe, for this Nation to have a forcible
    entry capability, and I believe that the capability the United
    States Marine Corps brings to this Nation is vital. When you do
    not have, as we do not today, a long-range gun system, a system
    with the kind of combat reach we are envisioning in DD(X), it
    forces you to an approach, and that is what a capabilities-
    based force is all about. You bring whatever capability you
    have to whatever task that you have been given.
        But it has required us to then utilize aircraft and in
    effect, if you talk to the Marine Corps, they will tell you
    they gave up their artillery years ago and substituted Marine
    air, because you did not have the kind of reach that they
    believed that they needed in order to execute forcible entry.
        The joint world we operate in today, the Marines are going
    to be supported by combat air when forcible entry operations
    are required. So we are not flagging from that requirement. To
    the contrary, I want my comments to be interpreted that it is a
    priority that we fund and deliver DD(X) and that DD(X) becomes
    a class of ships that supports our expeditionary striking
    groups, that gives us the kind of capability that you speak to.
        Senator Kennedy. Thank you very much.
        Senator Sessions.
        Senator Sessions. Just to follow up on the DD(X), we went
    from DD 21, which had plans to move forward, to DD(X), which is
    more research, I suppose. Can you tell us whether or not the
    proposed ship is going to be better for this transition to
    DD(X) than it would have been with the DD 21?
        Admiral Clark. Well, I do not know how to answer that,
    Senator, because in the down-select and in the decisions we
    have made in tradeoffs in the program, I do not know how to
    distinguish specific equipments and components. For example,
    the analyses of the number of gun systems and so forth. I just
    do not, I have no way to predict what those are going to be.
    But I have every expectation of tradeoffs, and they are being
    done by a committee. I am not involved in that. It is part of
    the acquisition process.
        But validating the requirement is for effective combat
    reach with the gun system. I have every reason to believe that
    the gun system is going to be there. I have every reason to
    believe--and I have testified to this statement--that the spec
    calls for this to be a ship with a very low radar cross-
    section. That is going to make it extremely difficult for an
    enemy to deal with. It has been talked about, a radar cross-
    section that is smaller than a fishing boat; that with a
    signature that it is so quietly operated that it is going to be
    like a 688 submarine, that the transformation to all-electric
    power is going to open up potentials for the future that we do
    not even see yet.
        I have every reason to believe that this is going to be the
    ship with the technology that is going to deliver and that the
    ship is going to be the definer of the next four decades of
    what our Navy looks like.
        Senator Sessions. I guess we have a delay in moving forward
    with it, which is a billpayer of sorts and is not totally
    insignificant. But you cannot say at this point that we are
    going to have a better vessel because of it?
        Admiral Clark. I have every reason to believe that it is
    going to be a great ship and it is going to deliver the
    capability that we need. I regret the delay, Senator----
        Senator Sessions. Let me go back. I understand we are all
    confronted with realities.
        The general concept for my thinking is that an older
    platform with a newer and better weapon system may be, at least
    financially, more critical for us than new platforms. How are
    we in terms of our equipment making sure that our existing
    aircraft and vessels are equipped with the latest technology,
    and are you satisfied with our present stocks of weaponry? If
    we do not have bullets to fire in the gun, the gun is not very
    valuable. I am talking about the precision-guided munitions.
        Admiral Clark. Let me take the first part of that first
    question. There are limits to what you can do with an old
    platform. A good case would be to look at the alternative. If
    you decided that you were not going to build DD(X) and you were
    going to continue to build or you were going to invest in our
    older cruisers and meet the need with that kind of a system,
    you could not ever have the gun systems. But let us say you
    were going to try to do that.
        As we move to the future and we study science and
    technology applications, one of the clear issues is that future
    solutions are going to require great power. As we look to
    potential breakthroughs in technology, power is always a
    limiting thing. So power limits what you are able to do in
    older platforms.
        Then other things wear out inside of a ship. I have had the
    privilege and the challenge of steaming around when my first
    ship was a World War II destroyer.
        Senator Sessions. I think you were responding realistically
    to the question I asked, but I will be a little more specific
    about it. I guess my concern is in the next year, in the next
    18 months, do we have in place on ships that are going to be in
    the inventory for some years to come the capabilities that we
    ought to have on them, considering the funding problems we
    have?
        Admiral Clark. We have the systems on that we can have. We
    cannot create systems anew in a year, a year and a half. Your
    question gets to the heart of the readiness challenge: Are the
    ships going to be ready? They are, and let me tell you that we
    are eating away at a maintenance backlog that we had in the
    accounts, and the current readiness budget is allowing us to do
    that.
        The second part of your question had to do with munitions.
    This budget expands the production capability so that we can
    buy the munitions, the precision munitions, that we need, and
    we earnestly need the support of Congress in the approval of
    that. Some of that has been done in the 2002 emergency funding
    and we need to continue that application of funding in the 2003
    budget.
        Senator Sessions. Well, they say that we may be moving to
    capacity at our plants for munitions, but why can we not build
    new plants if we need to? Are we at what we need for a
    sustained military operation? The world is looking awfully
    dangerous right now. We could find ourselves in a prolonged
    conflict with a lot more targets than we found in Afghanistan
    to utilize.
        Do we need to think bigger, much bigger, in terms of what
    we need in terms of precision-guided munitions?
        Admiral Clark. I believe that, first of all, do we need to
    think bigger? We have and are making changes and the emergency
    funds are being applied to do that. So we are increasing our
    capacity. It is very important that we do that because we did
    not have enough capacity to meet, in my estimation, the needs.
    The judgment of the leadership supports that because the
    investments are being made to increase our ability to produce
    precision rounds.
        Senator Sessions. Mr. Chairman, you have to have the
    bullets and the gun. We have the capability. We do not want to
    find ourselves in some very serious matter and not have all the
    munitions we could have.
        In terms of the size of a $379 billion, a couple of billion
    dollars more to make sure that our stocks are very ample and
    would be a good investment, I think.
        Admiral Clark. If I could just follow up, there was an
    article that I saw in the paper today that went into some
    detail about JDAM, that we did not have enough, and it related
    to Kosovo operations. We need to make wise investments for the
    Nation, too. JDAM just came on line when we started in Kosovo.
    So a ramp-up is clearly the way this is going to be produced.
    You cannot suddenly have zero one day and then have 5,000 of
    them the next day.
        So the investment being made has to be one that makes sense
    that we do not create a capability that then is going to go
    idle also. We need to reach the balance between the requirement
    and ramping up at a smart and effective rate that meets the
    requirement. I believe the investments that are being made
    today have us on that ramp. We must continue to analyze that to
    be sure.
        Senator Sessions. I am thinking we need to leap up, not
    ramp up.
        Senator Kennedy. Senator Reed.
        Senator Reed. Thank you very much, Mr. Chairman.
        Thank you, Admiral Clark. The Navy has a daunting challenge
    with legacy systems to try to harmonize them. But at least
    going forward, is your RDT&E consciously trying to make all of
    our new platforms interoperable, and not just within the Navy
    and the Marine Corps, but also with the other services,
    principally I would assume by information technology? Is that
    something that is conscious, deliberate, proceeding forward?
        Admiral Clark. Yes, sir, absolutely.
        Senator Reed. Can you comment on some of the aspects of
    that or some of the challenges that you face in that regard?
        Admiral Clark. Well, I can certainly. Interoperability--in
    order to take advantage of the technological advantage that the
    United States of America has, it is about information becoming
    knowledge. For us to do that, our systems have to be
    interoperable, and they are not all interoperable today. By
    that I am talking now about the power of second and third order
    interoperability.
        For example, we certainly have interoperability in our
    forces today, but we see things that we could do in the future
    that will make us much more effective. For example, a pilot
    flying over Afghanistan that gets input from a Special Forces
    operator on the ground, that lases the target, and all this
    action takes place that we saw happen in Afghanistan.
        The future will allow us to do this with the touch of a
    button, as opposed to verbal orders and those kinds of things.
    That is where we all want to go. We have to do this with web-
    based capability. We have mandated in our Navy, for example,
    that we are not going to spend money on applications that are
    not web-based in the future. You cannot afford to do that. The
    taxpayers' investment in our warfighting capability has to
    produce that kind of interoperability and that is where we are
    all going.
        Senator Reed. What is your perception of the other services
    in terms of linking up?
        Admiral Clark. A common objective. We have challenges with
    legacy systems and the issue always becomes how much do you
    spend on the legacy system to bring it up to how you would
    deliver it if you were procuring it today; it is a case-by-case
    basis, Senator.
        Senator Reed. Also, Admiral, you are experimenting with new
    types of hull designs, particularly for the littoral ships, the
    logistical vessels. Can you comment upon how that is going and
    what you see in the next several years about the deployment of
    these innovative hulls, like catamarans, etcetera?
        Admiral Clark. Yes, sir. Well, I believe I mentioned DD(X)
    and the family of ships and this concept has us spiraling the
    research and development result into three platforms; one of
    them is the Littoral Combatant Ship, the other will be the
    follow-on missile defense cruiser, the CG(X). Very clearly, we
    need a platform--and this gets to the chairman's concern and
    interest in mine warfare--that is able to operate in a near-
    land area that can take this on directly.
        We have in the program the ability and we are working
    toward the availability of organic mine warfare capability in
    our battle group by 2005. But my view was that we needed a
    class of ships that goes on and takes on this asymmetric threat
    that we are going to be dealing with in the 21st century. I am
    not sure what this hull looks like exactly. I am not sure it is
    going to be steel, aluminum, a composite, what it is going to
    be.
        What I want is an effective combat capability that will
    enable us to go in there and take on the enemy and fight and
    win. So we have leased a couple of these vessels. We are
    conducting experiments and they are going very well. We have
    one that has now been turned over for Army use. We took it to
    Europe. It is now conducting operations there and it will be
    operating in other parts of that part of the world.
        Senator Reed. One of the other aspects of mine warfare, and
    I share the chairman's concern, is the rapid use of unmanned
    undersea vehicles, not only in mines but also in other types of
    operations. I know that you are planning to accelerate the
    Multi-Mission Reconfigurable unmanned undersea vehicle (UUV)
    and also the Long-term Mine Reconnaissance System, the LMRS.
    Specifically with those systems and in general about UUVs, your
    comments about where you are now?
        Admiral Clark. I think with unmanned vehicles, there is a
    great future and we should be exploring this kind of technology
    under the water, on the surface, and in the air. It is also
    clear to me that the Littoral Combatant and the marriage of
    unmanned vehicles, potentially manned vehicles also, but
    unmanned vehicles to do certain missions that I believe the
    future in technology will prove to us that is better done by
    unmanned vehicles and the ability to do off-base, off-hull,
    off-the-ship kind of sensor operations that will tremendously
    advance our warfare and combat capability.
        So I see the LCS delivering--delivering and introducing--
    this into the capability as rapidly as possible in a hull form
    that will enable us to conduct these kinds of operations. I
    believe it will be required for mine warfare as well as near-
    land ASW.
        Senator Reed. Thank you.
        Thank you, Mr. Chairman.
        Senator Kennedy. Senator McCain.
        Senator McCain. Thank you, Mr. Chairman.
        Admiral, thank you again for being here today. Admiral,
    last month the OSD Comptroller, Dr. Zakheim, testified before
    the Subcommittee on Readiness and Management Support that the
    decision to begin funding LHD-9 in the 2003 budget was done
    completely in conjunction with the Navy. Were you involved in
    those discussions?
        Admiral Clark. You mean specifically with Dr. Zakheim?
        Senator McCain. Yes.
        Admiral Clark. No, sir, I do not recall any discussions on
    LHD-9, no.
        Senator McCain. I see.
        Admiral Clark. I would say, Senator, I do not know if he
    said me in particular or if he said the Navy.
        Senator McCain. Oh, no, he just said done completely in
    conjunction with the Navy, which one might assume that that
    would be the Chief of Naval Operations.
        Admiral Clark. No, sir, I did not have those discussions.
        Senator McCain. So the first you heard of it was when it
    became published in the media?
        Admiral Clark. Well, in the closing days as we were putting
    this budget to bed, we were dealing with major and a large
    number of issues, Senator, as you can well imagine--you have
    been through this--dealing with a number of ships and billion
    dollar kinds of things. Frankly, that issue did not come up at
    all. When I heard about it, it was in response to what was this
    particular funding line about, and it was my belief and the
    belief of those members of my staff that it was all about the
    replacement for the amphibious assault ship (LHA); that that
    was the intent.
        Senator McCain. I see. I appreciate that.
        You and I have discussed what I feel is a shortage of
    carrier presence during this crisis. If you had your choice,
    would you rather have an LHD-9 or a CVN?
        Admiral Clark. Well, if all things were equal, certainly I
    would love to have another carrier.
        Senator McCain. How do you feel about this shortage?
    Because when you look back at the last several crises we have
    been in recently, we have had to uncover a certain area,
    whether it be the Western Pacific or, in the case of the P-3
    incident that took place with China, we had to uncover the
    Mediterranean, I believe.
        How do you feel about that? What are the Navy's plans for
    additional carrier construction?
        Admiral Clark. Well, first of all let me answer the second
    part, how do I feel about future construction. Certainly CVN(X)
    I believe brings the kind of technology along that we need in
    the future, because it brings a lot of----
        Senator McCain. When would you like to see that happen?
        Admiral Clark. Well, it is in the existing budget. It is a
    2007 and a 2008 kind of a funding line. That program slipped,
    principally for affordability issues. It did not have enough
    top line to keep it where it was before.
        With regard to how I feel about these challenges, every
    time one of these challenges comes up I make a judgment and a
    recommendation on how we in the Navy can surge to meet a
    particular requirement. We have been operating at a fairly
    intense rate for routine, maintaining two carriers in the
    Indian Ocean. We could certainly get more carriers there.
        But the key to our Navy is that we are a rotational force,
    and we continue to have that presence there. So you were not
    here at my confirmation hearing, but it was in this room,
    Senator, and I said that day, and I believe the same rule
    applies today, the Nation decides how much of this Navy they
    are going to have and what kind of Navy that they are going to
    have.
        With a 12-carrier force, we can be in a place, the number
    of places where 12 carriers will allow us to be represented.
    Obviously, if we had more it would change that calculus.
        Senator McCain. You would agree with me, though, it is
    wonderful to have a carrier break the record for the longest
    period of time at sea, I guess since World War II, is that
    right, the Theodore Roosevelt?
        Admiral Clark. Yes, sir, that is correct.
        Senator McCain. But is it wonderful to force a number of
    other aircraft carriers to break that same record?
        Admiral Clark. No, sir, it is not, certainly not.
        Senator McCain. Is it possible to retain qualified men and
    women? I note there were 800 women on board the U.S.S.
    Roosevelt. Is it possible to retain qualified men and women in
    the Navy when you are asking them to stay for over 6 months at
    sea?
        Admiral Clark. Well, that is difficult for me to project,
    but I believe that--you were on the ship and you know how----
        Senator McCain. Senator Collins was with us on that trip.
        Admiral Clark. I remember the discussion, the discussion I
    had with the battle group commander, because I was over there
    shortly after you were: When are you taking this ship into
    port? He said: They want the record. They were proud of what
    they were doing. That does not discount your concern.
        Senator McCain. Yes, but my question was do they want it
    twice.
        Admiral Clark. No. I understand your point and that is
    where I am. This is not something that we want to be doing on a
    routine basis.
        Senator McCain. If you go through these crises, if history
    is any guide, you are going to have more of them in the future,
    and then you are going to have continued inordinate amounts of
    time at sea and away from home in an all-volunteer force.
        Admiral Clark. We have done some analysis to figure out
    what the people impact is. I believe that one of the reasons we
    have been so successful in our retention, recruiting, and
    objectives, Senator, is that our people really do understand
    service. We have been studying, and I recall during the Vietnam
    campaign that my first deployment was 9 months. It is a long
    time.
        We know that if you get in the habit of having those kinds
    of deployments, people are going to vote with their feet. So
    this is a decision that the national leadership makes about how
    they are going to commit the force, sir.
        Senator McCain. There are reports that the Navy is being
    approached to purchase a pair of unfinished cruise ships at the
    Northrop Grumman shipyard in Pascagoula, left behind when
    American Classic Voyages went bankrupt, for use as mobile
    housing or a hospital ship. Is the Navy in any way interested
    in purchasing these ships?
        Admiral Clark. We were asked about these ships. We sent our
    engineers down to look at the ships. The ships are not suitable
    for the kind of platforms that we need and we are not
    interested in them.
        Senator McCain. Thank you, Mr. Chairman.
        Senator Kennedy. Thank you.
        Senator Warner.
        Senator Warner. I thank the chair.
        Chief, my good friend, I will get directly to the point, a
    follow-on to the very good questioning you had with your fellow
    sailor, Senator McCain, about the carriers. It is my
    expectation, I hope, that a recommendation which I will be
    forwarding to the chairman and ranking member of this
    subcommittee to find the funds to restore the carrier to the
    original position it once had in our budget process.
        I do so by no means to be confrontational with the
    Secretary and/or yourself. You had your framework of decisions.
    But as you recognize, being a coequal branch, we have our
    framework of decisions. It is my hope and expectation that
    eventually this subcommittee and the full committee will
    restore those funds.
        My direct request to you, assuming that it becomes a part
    of the authorization bill, would you be willing to support that
    law and go forward with the restoration of that program as it
    once was?
        Admiral Clark. Well, of course I am going to implement the
    law.
        Senator Warner. Good.
        Admiral Clark. May I comment further?
        Senator Warner. No, I do not know that there is any need.
    [Laughter.]
        The question was very clear and the response was equally
    clear. But I hope that in doing so that you feel that it is
    consistent with your goals as the top sailor in the Navy to put
    our carrier force in the strongest position possible to again,
    if necessary, carry out the missions it has here in the last 90
    to 120 days.
        Admiral Clark. The move on the CVN(X) was an affordability
    issue.
        Senator Warner. We have been all over that.
        Admiral Clark. We have.
        Senator Warner. The record is clear on that. I thank you
    for your responses.
        I thank the chairman and members of the committee.
        Senator Kennedy. Senator Collins.
        Senator Collins. Thank you, Mr. Chairman.
        Admiral Clark, welcome. It is a pleasure to have you here
    today. I was very pleased to hear your strong statement of
    support for the DD(X) and the family of ships that its
    technology will support. In the last year, there has been a lot
    of focus on the technology associated with the DD 21 or the
    DD(X), but less discussion about the need for this next
    generation destroyer.
        So just to underscore what you have said today, it is not
    just the technology the you need. You need a new generation,
    next generation destroyer. You need DD(X). Is that correct?
        Admiral Clark. Absolutely.
        Senator Collins. The second question I want to ask you,
    though, has to do with some manning initiatives for the DDG-51
    and the FFG-7 frigate modernization program. One of the
    advantages of the DD(X), of course, is that it could operate
    with a much smaller crew size. Would you discuss for a moment
    the Navy's need for an optimized manning initiative for the
    DDG-51 and for the FFG-7 and talk about the advantages of
    perhaps investing such that we could reduce the crew sizes for
    those, which are particularly important in view of the Navy
    leadership's decision to maintain the remaining 33-ship FFG
    force, in part because of the expectation that these ships may
    have a new role to play in homeland security?
        Admiral Clark. Well, first of all, Senator, one of the
    actions that we took immediately after September 11 was I had
    an FFG that was scheduled to be decommissioned. We put that on
    hold because of the very point that you make, that this has a
    potential role to play in homeland defense. So I think that
    there is no question that the FFGs have a role to play.
        Point two, what am I doing with the optimum manning
    experiment? It is just exactly that. I have been at sea, I have
    been in the Navy for 33 years. I have to be the CNO and I had
    the conviction that I was on some ships that I did not think
    the manning document was laid out correctly. I put out in my
    guidance this year that we are going to zero-base every billet
    that we have in the whole Navy and that on particular ships, I
    want to run some experiments making sure that we have made
    moves to adjust the manning after we have made policy changes
    that changed the requirements.
        So that is what that particular experiment is about. Do we
    have it right and, if there is a question, let us run the test
    and then adjust, not just jerk the people off. Run the test and
    see what happens.
        Point three, I think, is about an investment to reduce
    manning. That is something that I believe. We need to capture
    technology. I believe that when I talked about what tomorrow's
    Navy looks like, it is a Navy that is a more senior Navy. It is
    a Navy that is very high tech with high tech people. Frankly, I
    want every job that we have to offer people to be a very
    rewarding and challenging one, and I want to get rid of jobs
    that are not that way to the maximum extent that I can.
        This will include investing in technology that would allow
    us to get rid of some of those less rewarding and fulfilling
    assignments.
        Senator Collins. Thank you.
        The third issue I want to raise with you really piggybacks
    on some of the concerns that Senator Warner has raised with you
    about the low level of ship procurement. I know that you have
    been very frank with your concerns about the low procurement
    rates. It obviously has an adverse impact on the stability of
    our industrial base as well as the size of our fleet.
        I also think that the Navy is paying a premium in program
    costs due to the small number of units being built. Could you
    discuss perhaps, to follow up on Senator Warner, what your
    priorities would be if additional funding is forthcoming, for
    example for the need to procure three DDG-51s this year rather
    than two, as put forth in the budget? How high on your priority
    list of unmet needs is that?
        Admiral Clark. I do not remember, Senator. I sent an
    unfunded list over here and I had the DDG on it and it is near
    the top. I do not remember the exact number, but it is very
    near the top.
        Let me just go on record once again with this comment. I
    have stated that we need to be investing $12 billion a year in
    new ship construction. I do not know how to make it any clearer
    than that, so I say it again. We should be doing $12 billion a
    year in new construction, not just SCN. SCN can be repair and
    modernization, for example, refueling overhauls and so forth.
    That is my belief.
        My analysis shows that that is what we need to sustain the
    force. I could not get there. I also told you all on the first
    day that I came to this very room that I was going to pay the
    current readiness bill. I told you that is what I was going to
    do, because I had lived in a Navy where it was not done that
    way and I am not going to be the CNO of a Navy that does not
    stand up and make that claim. I am not going to send the young
    men and women of this Nation out to serve on ships and aircraft
    that are not ready.
        So I did not have enough money to get there and that is why
    we do not have $12 billion in the account and in the program.
        Senator Collins. I think many of us on this subcommittee
    are committed to helping you get there because we are truly
    concerned about the impact of the low procurement rate. I
    understand you had a lot of very difficult choices to make, but
    I hope we will be able to make some adjustments to deal with
    the shipbuilding budget as well.
        Finally, Admiral, and I know my time is about to expire, I
    want to let you know that yesterday I was at the Portsmouth
    Kittery Naval Shipyard on the border in Maine. The Supreme
    Court has finally settled that issue once and for all and we
    now call it the Portsmouth Kittery Naval Shipyard. The men and
    women working there just set two national records for
    completing the overhaul and refueling of two Los Angeles-class
    submarines in record time. I wanted to share that
    accomplishment with you and it suggests that we should keep
    that shipyard very busy because the work load for that shipyard
    is troubling over the next couple of years, and yet they are
    setting performance records that have not been matched by any
    other shipyard. So I am very proud of the work they are doing.
        Thank you.
        Admiral Clark. Yes, ma'am.
        Senator Kennedy. Just a final question on my part, Admiral.
    This is on the issue of aircraft carrier homeporting options.
    We know the relationship, 7.6 carriers in the northern Arabian
    Sea, 1.7 to keep one for the Western Pacific. I asked the
    Admiral at the last hearing about forward homeporting options
    and he talked about submarines and other support ships in Guam,
    but he made no mention about looking at other options for
    homeporting carrier battle group.
        I am just wondering if you can give us assurance the Navy
    will give serious attention to all the options for increasing
    forward presence. Senator Sessions and I wrote you a letter I
    believe earlier this year and we would be interested in
    assurances from you that you are going to look at the range of
    different options.
        Admiral Clark. Yes, sir. I do not remember if your letter
    prompted the particular guidance that I put in my 2002 guidance
    to our Navy or not. I have to go back and check the time line.
    But looking at options, we will this year, and it is in the
    guidance that I put out to our Navy, commence again experiments
    to look at alternative manning concepts. These are
    fundamentally to reduce the amount of time spent in transit and
    increase the time that is forward. We are going to do that
    starting this summer.
        We have not looked at the carrier specifically because it
    is much more difficult because of the size of the carrier to
    do. There are huge implications in this. We do it now with
    blue-gold crews on submarines. You are very aware of that. I
    will not take up all the time to explain what the issues are,
    but they are training and maintenance specifically.
        I intend to continue those experiments and to look, and the
    guidance that I have given our Navy is challenge every
    assumption that we have ever made about the way that we do
    this.
        Senator Kennedy. We would appreciate that. We outlined in
    our letter at least some of these policy issues. We welcome
    making sure that you will, which I am sure you would, that you
    will give your full focus and attention to it.
        Are there other questions from our subcommittee members?
        Senator Sessions.
        Senator Sessions. Yes, briefly.
        When is the next carrier coming on line? When do we
    project, do you recall?
        Admiral Clark. I will have to get the specifics, but the
    Ronald Reagan delivers next. The next panel will give you the
    specifics.
        Senator Sessions. But is it the firm plan now to take the
    Kitty Hawk out of the fleet as soon as the Reagan comes on
    line?
        Admiral Clark. The next ship out is the Constellation.
        Senator Sessions. The Constellation.
        Admiral Clark. Yes, sir. We have done the analysis to see
    what it would take to retain her in terms of finances.
        Senator Sessions. So if you could maintain that ship you
    would have an additional carrier.
        Admiral Clark. That is correct.
        Senator Sessions. If we got back on line with the
    commitment, the QDR level I guess, on the carriers that we cut
    back on in this budget, I understand it would be about $239
    million additional funds we would have to come up with this
    year?
        Admiral Clark. I have to check the number, Senator. I would
    be happy to provide it for you, but I do not have it here.
        [The information referred to follows:]

        The correct amount to get CVNX back ``on line'' is $229 million.
    The CVNX-1 PB02 program of record schedule (fiscal year 2006
    construction start/later fiscal year 2013 delivery) would have required
    Northrup Grumman Newport News (NGNN) to start their design team ramp up
    on January 2002. However, adjustments made to the CVNX-1 program of
    record in PB03 delayed the start of construction until fiscal year 2007
    and, as a result, NGNN has not started their design team ramp up. If
    Congress were to provide additional funding in fiscal year 2003 for
    CVNX-1 and implement the revised funding profile, the earliest CVNX-1
    could be delivered would be March 2014 due to the 9-month loss of
    design team ramp up in fiscal year 2002.

        Senator Sessions. Thank you.
        Senator Kennedy. If there are no further questions, thank
    you very much.
        Admiral Clark. Thank you, Mr. Chairman. It is always a
    pleasure to appear before the subcommittee.
        Senator Kennedy. We appreciate it very much.
        Admiral Clark. We very much appreciate your support.
        Senator Kennedy. Thank you very much.
        Our next panel, Major General Whitlow, Rear Admiral
    Balisle, Rear Admiral Sullivan and Rear Admiral McCabe.
        We will start off with General Whitlow. We will hear a
    brief presentation from each of the panelists. We will file the
    statements in the record, and then proceed to the questions.

      STATEMENT OF MAJ. GEN. WILLIAM A. WHITLOW, USMC, DIRECTOR,
     EXPEDITIONARY WARFARE DIVISION, OFFICE OF THE DEPUTY CHIEF OF
         NAVAL OPERATIONS FOR WARFARE REQUIREMENTS AND PROGRAMS

        General Whitlow. Mr. Chairman and distinguished members, I
    have a very brief statement if you would allow me.
        Senator Kennedy. Fine.
        General Whitlow. Mr. Chairman and distinguished members of
    the Seapower Subcommittee, I am Major General Bill Whitlow,
    Director of Expeditionary Warfare Division. I appreciate the
    opportunity to appear before you today. I must warn you, I just
    had a root canal and some oral surgery, so if I appear to be
    drooling I am going to use that as my excuse and will stick
    with it.
        Senator McCain. Would you rather have the root canal than
    be here? [Laughter.]
        General Whitlow. I am truly on drugs, sir.
        But seriously, to maximize operational effectiveness, we
    have pursued programs that enhance our capability to be fast,
    flexible, and lethal. Underpinning these operational
    imperatives is the requirement for the amphibious lift. By
    doctrine and prudent analysis, execution of our Nation's
    military strategy relies on the availability to deploy three
    marine expeditionary brigades.
        As this committee knows, we have not been able to meet the
    3.0 marine expeditionary brigade requirement because of fiscal
    constraints and instead have focused on the less capable goal
    of maintaining lift for 2.5 marine expeditionary brigades. This
    is a deficiency that must be addressed and strikes at home in
    our shipbuilding accounts.
        The ability to conduct expeditionary warfare is tied to the
    size and composition of our naval force. The amphibious fleet
    remains the oldest in the Navy and must be enhanced. Key to
    this effort is the LPD-17 program. According to the current
    ship construction plan, the 2.5 marine expeditionary brigades'
    worth of lift capability will not be achieved until the
    delivery of the twelfth LPD-17, now estimated for delivery in
    the year 2015. As such, the Navy is forced to retain the aging
    and increasingly unreliable 35-plus year old LPD-4 class of
    ships, ships that are plagued with problems of poor
    habitability and deteriorating working conditions. These
    conditions have a direct impact on the morale and effectiveness
    of their assigned personnel.
        Another initiative that impacts every aspect of
    expeditionary warfare is the LHA replacement program. An
    ongoing analysis of alternatives is due to be completed 2
    months from now during June and should lead to the selection of
    a design of an LHA replacement. The LHA replacement ship class
    will be multi-functional and highly versatile. It is prudent to
    improve the baseline capability of the LHD-8, a transition ship
    with limited capacity for future growth. A smooth transition
    from LHA to LHD-8 to the LHA replacement is critical if we are
    to leverage technology to garner adequate ground combat power
    in order to maintain forcible entry capability. Unless we like
    playing home games, which I do not believe we do, forcible
    entry capability is at the heart of this Nation's national
    strategy.
        Navy leadership has openly discussed the difficulties
    associated with mine countermeasures warfare operations,
    especially in the surf zone, as the chairman has articulated
    earlier. Unfortunately, recent efforts to develop a mine
    clearance, mine destruction system in the surf zone proved
    unsuccessful. That was the shallow water assault breaching-
    distributive explosive technology (SABRE-DET) previously
    mentioned. That is not to say that we do not have a surf zone,
    very shallow water capability. Unfortunately, we are forced to
    conduct such operations using special warfare divers and
    mammals.
        As this committee knows, a decision was made to terminate
    development of the SABRE and DET systems, two R&D programs that
    early on demonstrated great potential. To remedy this
    unsatisfactory situation and provide a badly needed capability,
    the Navy has instituted a corrective three-track program. These
    tracks seek to improve systems for immediate possible use as
    well as develop more capable systems in the near and long-term.
        Thank you for the opportunity to testify today. I am
    standing by for your questions, sir.
        [The prepared statement of Major General Whitlow follows:]

            Prepared Statement by Maj. Gen. William A. Whitlow, USMC

        Mr. Chairman, distinguished members of the Seapower Subcommittee, I
    am Major General Bill Whitlow, Director of the Expeditionary Warfare
    Division. It is truly an honor to represent the men and women of your
    United States Navy and Marine Corps expeditionary team. As head of the
    division that identifies and validates resource requirements necessary
    to conduct expeditionary warfare, I provide this testimony on their
    behalf.
        History is replete with incidents that galvanize a nation. The
    events that took place 7 months ago stunned our sense of domestic
    tranquility. They also aroused our collective anger, eliciting a
    national call to arms to eliminate a vengeful enemy eager to wreak
    carnage onto the American public. Our military response has been
    powerful, yet focused; lethal, but mindful of the ideals that form the
    foundation of our Nation. Over the years, this committee has supported
    and provided valuable guidance on many of the systems now being
    employed in defense of our country. You should take great pride, as I
    do, in the sailors and marines who are faithfully and professionally
    performing their assigned duties overseas today. Their performance is a
    reflection of the support they have received from their countrymen and
    elected leaders.
        It is worthy of our time to pause and examine how our Nation has
    chosen to respond to the war on terror. Well before my tenure as
    Director of the Expeditionary Warfare Division, Navy and Marine Corps
    leaders have spoken of the operational advantages of possessing a force
    that is lethal, flexible and self-sustaining. Events in Afghanistan
    have demonstrated that the maritime strategy ``forward . . . from the
    sea'' is valid even when conducting warfare in a country that is
    landlocked and located 400 miles from a major body of water. Despite
    Afghanistan's isolation, the first sustained U.S. military operation
    ashore was conducted by the 15th and 26th Marine Expeditionary Units,
    an expeditionary force that was deployed, organized and launched from
    the U.S.S. Peleliu and U.S.S. Bataan amphibious ready groups (ARGs). As
    you recall, the mission of these two MEUs was to seize the first in-
    country staging base (Rhino), secure the Kandahar airport and establish
    a base from which quick-reaction operations could be conducted to
    further track down Taliban and al Qaeda forces.
        The MEUs' conquest is simply the latest example of a long history
    of expeditionary warfare. The term ``expeditionary'' refers to a menu
    of forces (air, ground, and sea) that are forward or rapidly deployed
    to achieve a specific national security objective. These forces are
    trained and configured to respond to the full spectrum of military
    operations, from humanitarian assistance to small-scale contingencies
    through major theater war. To be effective in these different and
    challenging operations, expeditionary warfare forces must be capable,
    mobile and extremely versatile. While the concept of ``expeditionary
    warfare'' may seem new or revolutionary, in reality it is how this
    Nation's sea services have operated for all of its 226-year (plus)
    history.
        To maximize operational effectiveness while minimizing the threat
    to safety, we have pursued programs that enhance our capability to be
    fast, flexible and lethal. Underpinning these operational imperatives
    is the requirement for lift. Lift drives everything. It permits us to
    respond quickly, decisively, and without first having to obtain host
    nation support. Lift also allows us to be on station to monitor and
    hopefully deter events before they escalate. The naval amphibious
    assault ships that provide the critical lift are designed to conduct
    sea-based operations with a minimal reliance on host or allied nation
    support. Amphibious ships with embarked Marine forces are one of the
    most formidable power projection capabilities in the world and
    represent our Nation's only sustainable forcible-entry capability.
        By doctrine and prudent analysis, execution of our Nation's
    military strategy relies on the availability and readiness to deploy
    three Marine expeditionary brigades (MEB) assault echelons, the so-
    called ``3.0 MEB lift.'' However, it should be emphasized that the 3.0
    MEB requirement is based on a single major theater war (MTW) scenario
    and this force is not intended to act as a swing force in the event of
    a second contingency or second MTW. As this committee is aware, we have
    not been able to meet the 3.0 MEB requirement because of fiscal
    constraints and instead have focused on the less capable goal of
    maintaining 2.5 MEB. The fiscally constrained 2.5 MEB goal was supposed
    to be a temporary situation; a ``strategic pause'' permitted following
    the end of the Cold War and Operation Desert Storm. It was not intended
    to replace, nor should it be seen as an acceptable alternative to, the
    3.0 MEB requirement. Unfortunately, I must report that we have not been
    able to maintain the 2.5 MEB capability in the active force. Today,
    your expeditionary forces are only equipped at 2.1 MEB lift equivalent
    with the corresponding risk and dangers inherent in such a reduced
    posture. I want to emphasize that a 2.5 MEB capability is neither
    dependent on, nor significantly affected by, changes to the two MTW
    strategy.
        So what? So why should Congress and the American public be
    concerned if our military falls even further from the required 3.0 MEB
    lift? Among the capabilities that expeditionary forces--and in many
    cases, expeditionary forces alone--provide is assured access. As the
    number of overseas U.S. bases has decreased, the importance (and
    difficulty) of gaining and sustaining entrance into foreign hotspots
    has increased. Expeditionary warfare, with its diverse, tailored
    packaging of forces represents our Nation's only forcible entry
    capability as well as the enabling force for the introduction of
    heavier and more specialized forces into a theater conflict. As such,
    without adequate amphibious shipping we run the risk that access will
    be blocked or achieved only at great human cost.
        The ability to conduct expeditionary warfare is tied to the size
    and composition of our naval force. The amphibious fleet remains the
    oldest in the Navy and must be replaced and enhanced. Key to this
    effort is the LPD-17 program. The LPD-17 San Antonio-class ship is a
    highly versatile, wet-well platform that is capable of conducting both
    air and landing craft air cushioned (LCAC) operations. According to the
    current ship construction plan, the 2.5 MEB lift capability will not be
    achieved until delivery of the twelfth LPD-17, now estimated for the
    2015 timeframe. As such, the Department of the Navy is forced to retain
    the aging and increasingly unreliable LPD-4 class of ships. All of
    these ships are currently 31-37 years old and are not expected to be
    decommissioned until they reach an average age of 41.5 years--6.5 years
    beyond their expected service life. Not surprisingly, the LPD-4 Austin-
    class ships are plagued with problems of poor habitability and
    deteriorating working conditions that have a direct impact on the
    morale and effectiveness of assigned personnel. Additionally, these
    ships require costly C\4\I upgrades to be interoperable with other C\4\
    advances being implemented throughout the fleet.
        I cannot stress enough the importance of maintaining, if not
    accelerating, the construction schedule of the LPD-17. Relative to the
    LPD-4s, delivery of LPD-17s will have a direct and immediate increase
    in our warfighting capability. The LPD-17s will provide increased
    vehicle and LCAC capacity, improved aviation and C\4\I capability,
    improved survivability, and improved shipboard quality of life. They
    are a vital asset and a prudent investment.
        Another initiative that impacts every aspect of expeditionary
    warfare is the LHD-8/LHA Replacement (LHA(R)) program. The five Tarawa-
    class LHAs are rapidly approaching the end of their service life and
    face block obsolescence at the rate of one per year from 2011-2015.
    Under the recapitalization plan, we project that some of the LHAs will
    not be retired until they are as much as 10 years beyond their 35-year
    service life. LHD-8 (Wasp-class) is scheduled to begin construction in
    fiscal year 2002 with an expected delivery during fiscal year 2007.
    Once operational, LHD-8 will replace one of the Tarawa-class LHAs. Yet,
    as this committee well knows, the LHD-8 is a ``transition'' ship--a
    ship designated to develop and demonstrate technology that will be
    incorporated into the follow-on LHA replacement ship. An ongoing
    analysis of alternatives (AoA) is due to be completed in June 2002 and
    should lead to the selection of a design for the LHA(R). As the
    centerpiece of the amphibious ready group, the big deck LHA(R) ship
    will be multi-functional and highly versatile. It is prudent, however,
    to improve the baseline capability of the LHD-8 and leverage technology
    to garner more vehicle and air capacity. A smooth transition from LHA
    to LHD-8 to LHA(R) is reliant on continued funding of the LHA mid-life
    sustainment program. This upgrade program extends to 35 years the
    useful life of the aging LHA-class ships and provides the time
    necessary to pursue the LHA(R) in a fiscally responsible manner.
        From an operational point of view, lift (and the ships that
    constitute our lift) is necessary to transport and sustain the
    expeditionary amphibious triad. The triad consists of LCAC, the
    advanced amphibious assault vehicles (AAAVs), and the MV-22 tilt-rotor
    aircraft. The versatile LCAC is the primary platform for high speed,
    over-the-horizon transport of troops, vehicles and material. The LCAC's
    high speed and ability to access over 70 percent of the world's
    coastlines (compared to 17 percent for conventional landing craft) is
    key to our ability to execute the maneuver warfare doctrine of seeking
    out and landing at the enemy's weakest point. The LCAC fleet is
    undergoing a service life extension program (SLEP) to correct hull
    fatigue and corrosion, extending the hull life up to 20 years. In
    addition, the SLEP includes an upgrade to its command/control/
    communication/computer and navigation (C\4\N) suite and enhanced
    engines that will increase its interoperability and performance. I'm
    pleased to report that in December 2000, the Navy received its first
    successful SLEP craft, LCAC 91, providing a good template for future
    LCACs. This program makes good business sense and is widely endorsed by
    fleet commanders. Our conventional landing craft now average 35 years
    of age. The LCU replacement program is on track for a fiscal year 2005
    start to replace these craft.
        The attack on the World Trade Centers, preceded by the 1999 attack
    on the U.S.S. Cole, illustrate the type of asymmetric threat our
    sailors and marines face as they carry out their duties in support of
    our national objectives. All of our commanders place the protection of
    their sailors and marines on top of their priority lists, and it is my
    task to provide the support necessary to optimize their ability to
    deter and counter such an attack and to minimize the consequences
    should one occur. The solution lies in a combination of complimentary
    efforts, ranging from doctrine and training to manpower and equipment.
    While there is no single program that can entirely eliminate our
    vulnerability to a terrorist attack, there are several ongoing
    initiatives within expeditionary warfare that will improve our ability
    to both deter and defeat terrorist attacks.
        For the past year and a half, our naval coastal warfare forces
    (NCWF) have been called upon to conduct expeditionary harbor defense
    and coastal surveillance at critical locations throughout the globe. It
    is important to note that the NCWF is almost completely manned and
    managed by Naval reservists and is a prime example of the integration
    between active duty and Reserve Forces. Using their core elements of
    mobile inshore undersea warfare units, inshore boat units, and Harbor
    Defense Commands, the naval coastal warfare forces have provided us the
    flexibility and capability to tailor units to meet specific
    requirements based on the deployment location and threat. These
    deployments, however, have revealed critical readiness shortfalls,
    primarily in equipment deficiencies, that have accumulated since their
    last major employment during Operation Desert Storm. Providing
    sufficient resources to attain sustainable readiness for this small but
    essential force is one of my most immediate priorities.
        This group of highly motivated naval reservists has largely
    volunteered to defer their personal and professional lives so that they
    may contribute to our Navy's immediate security. This increased force
    protection posture, however, is not indefinitely achievable solely
    through a Reserve Force, however motivated. To that end, we have
    resourced the establishment of an active duty ``mobile security force''
    that will provide our naval commanders with a flexible, rapidly
    deployable, and immediately available capability. This force is
    designed to provide defensive security augmentation during heightened
    force protection conditions in locations where the U.S. or the host
    nation's security infrastructure is inadequate to meet the temporary
    heightened requirement. This new force has been fully resourced to the
    identified requirement. The first detachment is expected to reach
    initial operational capability early in fiscal year 2003, and all 12
    detachments will become fully operational by fiscal year 2005. While
    this new Active-Duty Force will not replicate the robust surveillance
    and command and control capability of our Reserve naval coastal warfare
    force, it will relieve them of the security augmentation role they have
    been filling, allowing us to sustain heightened force protection
    requirements and conduct extended harbor security and overseas littoral
    surveillance operations.
        Equally important to our ability to maintain a heightened security
    posture in locations where our expeditionary forces operate, is the
    requirement to detect, identify and defeat weapons most commonly
    employed by terrorist organizations. Such weapons include the full
    spectrum of chemical, biological, nuclear, radiological (CBNR) and
    enhanced explosive devices. This difficult task lies primarily with
    another of our Navy's small but critical forces: explosive ordnance
    disposal (EOD) units. To improve the capabilities and safety of these
    highly specialized forces, we are developing unmanned ground and
    underwater vehicles to assist in conducting dangerous EOD operations at
    sea or on land, in hostile and contaminated environments. We are also
    funding increased EOD force levels as the demand for these uniquely
    skilled operators increases across the spectrum of naval operations.
    The Navy is not the only service feeling the increased demand for EOD
    capabilities. As the single manager for joint service EOD technology
    and training, the Navy is expanding and improving the curriculum for
    joint service advanced improvised explosive device training and
    developing technologies to further enhance the joint service capability
    to detect, identify and defeat terrorist devices.
        While much of the current discussion of asymmetric threats involves
    terrorist activities, perhaps the greatest asymmetric threat to
    expeditionary operations continues to be the anti-ship mine. To address
    the challenges posed by sea mines, the Navy-Marine Corps team is
    maintaining a dedicated mine countermeasure (MCM) force while
    simultaneously developing and introducing new organic MCM capabilities.
    Dedicated and organic assets are complimentary and are designed to
    address two different missions. Organic MCM systems are being developed
    to permit naval forces to operate/transit in a mined environment
    without having to await the arrival of dedicated MCM forces. Focusing
    primarily on the area that stretches from deep water to the 40-foot
    curve, organic assets will provide a highly capable, albeit reduced,
    capacity across the MCM requirements spectrum. Specifically, the
    carrier battle group commander will have a full range of organic MCM
    capabilities embarked as an integral part of the battle group. These
    ship-borne assets will give forward-deployed forces the ability to
    conduct timely MCM operations, allowing for unencumbered transit and
    minimizing the operational delay or impact of mines on a mission.
        Dedicated MCM forces are equipped, manned and trained to provide a
    sustainable capability for larger missions such as detecting and
    clearing mines in a broad geographical area. Dedicated forces will
    continue to provide highly capable assets in sizes and quantities that
    effectively address the sustained, large area MCM efforts required for
    creating areas necessary for both fleet operations (e.g. large carrier
    operational areas or major Q-route shipping lanes) and amphibious task
    force operations (principally large landing architectures). It is the
    Department of the Navy's position that both organic and dedicated
    forces are needed to safely and efficiently prosecute MCM missions.
        The Navy leadership has openly discussed the difficulties
    associated with MCM operations. Contained in the Fiscal Year 2003 U.S.
    Naval MCM Certification Plan is the admission that, ``given the
    complexity and proliferation of the mine threat and the myriad of
    environmental influences on MCM system performances, mine
    countermeasures represents one of the Navy's most significant
    operational and tactical challenges.'' To address these challenges the
    Navy has developed a plan that seeks to maintain current assets while
    aggressively developing and fielding new capabilities. The overarching
    goals of this plan are to (1) shorten the MCM tactical timeline and (2)
    reduce and eventually eliminate manned MCM operations in mine threat
    areas.
        Current capabilities are well established in the ``blue water''
    operational area. These capabilities are resident in the current MCM
    triad force of surface mine countermeasures (SMCM) ships, airborne mine
    countermeasures (AMCM) helicopter squadrons, and underwater mine
    countermeasures (e.g., EOD MCM detachments and marine mammal systems).
    This multi-faceted force operates synergistically and is well suited
    for mine hunting and minesweeping in deep waters. The Triad offers not
    only a capable force, but also a sustained high capacity to conduct
    large area and long endurance MCM efforts. These forces are
    collectively known as ``dedicated MCM.'' In many respects, this
    capability is the legacy of efforts begun in the late 1980s and early
    1990s to reconstruct a viable world-class U.S. MCM force. Specifically,
    the Avenger-class MCM ships, Osprey-class MHC ships, and the MH-53E Sea
    Dragon aircraft were all introduced or in procurement prior to
    Operation Desert Storm.
        These combined forces possess the requisite capability to
    successfully hunt and neutralize or sweep mines from the deepest ASW
    weapons to those threats generally employed in the vicinity of the 40-
    foot curve. However, inside the 40-foot point the efficacy of these
    dedicated sensors and platforms, particularly SMCMs and their systems,
    can be significantly impacted by a number of factors.
        Unfortunately, recent efforts to develop a mine clearance/mine
    destruction system in the surf zone (defined as the area from 10 feet
    of water depth to the high water mark) proved unsuccessful. As this
    committee knows, a decision was made in the summer of 2000 to terminate
    development of the shallow water assault breaching (SABRE) and
    distributive explosive technology (DET) systems, two R&D programs that
    early on demonstrated great potential. Knowing Congress's and this
    committee's keen interest in these programs, we have attempted on
    several occasions to outline and explain the rationale to terminate.
    Ultimately, the decision was made because the military utility of these
    programs was judged too low to justify the cost. Studies proved that
    these programs were ineffective against specific threats, could not be
    operated in the presence of even light obstacles, required an extensive
    number of LCAC missions to employ, proved problematic to handle onboard
    ship, and required the displacement of an unacceptable quantity of
    combat power to embark aboard amphibious shipping. While cancellation
    of these two programs was clearly the right thing to do, it also left
    the Navy-Marine Corps team without an effective assault breaching
    system. As such, the Navy's current capability in the surf zone is
    deemed unsatisfactory. To remedy this unsatisfactory situation and
    provide badly needed capability in the critical surf zone area, the
    Navy has instituted a corrective ``three track'' program.
        Track one is known as the operator's track. Under this track the
    Navy seeks to identify, refine, and improve existing breaching and
    clearance tactics that currently provide limited surf zone mine
    countermeasure capability (SZ MCM). Beginning in December 2001,
    commanders of the Navy amphibious groups and Marine expeditionary
    forces began briefing N-75 staff on current concept of operations for
    SZ MCM. With a thorough understanding of the fleet's current tactics,
    budgetary resources will be focused to support and enhance these
    capabilities with the aim of maximizing their effectiveness. While a
    complete solution is not expected from this track, it is anticipated
    that a better, more realistic approach can be developed that can
    immediately be employed should the need arise.
        Track two, known as the near-term track, seeks to develop and
    exploit a ``family of capabilities''. At a minimum, desired/required
    capabilities include: enhanced ISR tools, data fusion applications,
    mine-obstacle detection and location systems, precision navigation &
    maneuvering systems, area/lane/object marking systems, mine-obstacle
    kill mechanisms, and common C\4\I systems.
        Within 18-24 months, existing technology promises to provide
    answers to some of these requirements. For example, the Navy is
    confident that current commercial off-the-shelf/government off-the-
    shelf (COTS/GOTS) technology exists to equip landing craft/vehicles
    with precision navigation systems. Further illustrating the potential
    of this approach is the airborne laser mine detection system (ALMDS), a
    program that is already under development and represents the next
    generation of airborne mine hunting systems. ALMDS has demonstrated
    that, with certain modifications, it will be capable of rapidly
    detecting mines in the very shallow water region.
        Recent efforts by the Office of Naval Research (ONR) further
    demonstrate our belief that evolving technology can provide a robust,
    near-term MCM capability. In January 2002, ONR released a broad agency
    announcement (BAA) soliciting technology concepts from industry,
    government labs, and academia. Paramount to concept submission was the
    requirement that the proposed technology must be demonstrated within 18
    months of contract award and fielded to the fleet 3 years thereafter.
    Thirty ``white papers'' were received in response to the BAA. A
    comprehensive evaluation panel involving fleet operators met and
    selected three promising concepts to pursue. Full proposals are due
    from these three in mid-May with funding for the 18-month development
    phase commencing in fiscal year 2003. If successfully demonstrated, a
    mine and obstacle kill capability could be fielded to the fleet by
    2006.
        The third track is a long-term approach and is based upon a
    standard acquisition model (normally 10-15 years) for developing and
    fielding mine-obstacle ``kill'' mechanisms. This process encompasses
    early science and technology (S&T) development work and concept
    demonstration, and involves clearly delineated milestones such as a
    full ``mission area analysis'' (MAA), a subsequent ``mission needs
    statement'' (MNS), an ``analysis of alternatives'' (AoA), and
    eventually an ``operational requirements document'' (ORD). This process
    ensures that the testing, acquisition, and fielding of a system will
    meet ORD/Fleet requirements.
        In December 2001, the Navy established a MAA team, instituted an
    over-arching O-6-level oversight board and initiated an integrated
    process team for the purpose of developing required operational
    capabilities for a family-of-systems to perform amphibious MCM by 2015.
    The MAA is on track to be completed by the end of fiscal year 2003 and
    will lead into a fiscal year 2004 AoA. Aircraft and ship-based concepts
    are currently being examined through the S&T and concept demonstration
    phase and will be evaluated during the AoA process.
        While expediting the overall process is a key priority of this
    track, particular care will be taken to ensure acceleration does not
    result in a quick but unsatisfactory product. This track is expected to
    result in acquisition of the final MCM piece--obstacle and mine kill
    mechanisms--which, with the other required capabilities, will complete
    the MCM tool set.
        As stated in the Navy's Strategic Planning Guidance (NSPG),
    establishing an ``organic capability of surface forces to detect, avoid
    and/or neutralize mines within operationally acceptable timelines and
    with acceptable levels of operational risk'' is a top Navy priority.
    The MH-60S, next generation MCM systems, the remote mine hunting system
    (RMS) deployed from surface combatants, and the submarine-based long-
    term mine reconnaissance system (LMRS) address this priority.
        The RMS represents the most effective mine hunting system ever
    carried onboard a non-MCM Class ship. The RMS, an unmanned surface
    vehicle (USV) towing an AQS-20X sonar system (practically identical to
    the system operated from the MH-60S), will provide long-duration
    unmanned operations under the direction of host ship operators or in a
    pre-planned autonomous mode. The USV ``tow vehicle'' is almost entirely
    submerged with only a snorkel/antenna piercing the surface of the
    water. As such, the RMS is considered to be ``low-observable'' and very
    tolerant of sea states that can adversely effect other USVs.
        The LMRS is an autonomous UUV system that will be operated from
    both Los Angeles-class submarines (SSN-688) and Virginia-class
    submarines (SSN-774). Using mine detection and classification sonars,
    the LMRS will be used at extended ranges as a clandestine, forward-
    deployed asset, to determine the extent and size of the mine threat, as
    well as to determine the safety of anticipated operating areas.
        It should be noted that in addition to fielding the MH-60S AMCM
    aircraft as an organic asset, the Navy is evaluating whether to
    transition its dedicated AMCM force from the MH-53E to the MH-60S. One
    advantage of transitioning from the MH-53E to the MH-60S is airframe
    commonality between the dedicated and organic fleet AMCM force
    operations, training, and logistics. Many significant issues are being
    evaluated including the ability of the MH-60S to conduct the AMCM-
    required missions as well as the total cost of completely
    recapitalizing the force into an MH-60S dedicated force. We expect a
    decision in PR-05.
        As this subcommittee is well aware, the Navy converted U.S.S.
    Inchon (LPH-12) to serve as a mine countermeasures command and support
    ship (MCS-12) in 1994. The intent was to use this ship, the last of her
    class, to bridge the Navy to a future MCS platform prior to 2005. The
    rapid aging of U.S.S. Inchon, particularly its engineering plant and
    equipment, resulted in sub-optimal material readiness and high
    operating/repair costs. Ongoing safety concerns and a recent major fire
    in its engineering spaces further reduced the ship's utility. Already
    planned for decommissioning in 2005, the Inchon's age, difficulty in
    effecting repairs while in homeport, and the immediate need for
    extensive engineering upgrades combined to lead the Navy to a decision
    to accelerate the decommission plan to fiscal year 2002.
        In the absence of a dedicated MCS platform, the Commander, Fleet
    Forces Command (formerly Commander, Atlantic Fleet) coordinated a plan
    with the numbered fleets and Commander, Mine Warfare Command to employ
    large deck amphibious ships (LHAs and LHDs) in a surrogate MCS role.
    Upon decommissioning of MCS-12, various key operational capabilities
    inherent to U.S.S. Inchon will be retained in expeditionary
    detachments. This plan has already been promulgated and will be
    exercised on a regular basis. Use, however, of amphibious shipping as
    surrogate MCS will pose additional constraints on MEB AE lift
    requirements. When embarked, MCM assets will greatly increase the size
    of the naval support element and will encroach on aviation and vehicle
    storage space--a situation that must be watched and managed closely.
        Concurrent with the employment and refinement of this interim MCS
    concept, the Navy is conducting a MCS mission area analysis (MAA) with
    Johns Hopkins University. This MAA will lead to a refined mission need
    statement supporting an analysis of alternatives for a follow-on MCS
    platform. Additionally, the Navy continues to experiment with
    transformational concepts like the high speed vessel to understand how
    such a concept/platform might serve in an MCS role.
        In closing, I first want to echo and reinforce what General Jones
    stated to this committee on March 5, 2002. The long recognized
    requirement for the amphibious force structure is the ability to lift
    the assault echelons of three Marine expeditionary brigades. Today, we
    can barely lift two brigades--a mere two-thirds of the requirement. I
    second the commandant's recommendation that we recapitalize our
    amphibious fleet as a matter of urgent priority. Two programs that I
    have testified about today will move us closer to meeting this critical
    requirement. We need delivery of at least 12 LPD-17s and replacement of
    the LHAs as they approach the end of their expected service life.
    Second, I want to reemphasize the need to ensure the safety and welfare
    of our sailors and marines. The way to do this is to ensure that the
    equipment and shipping they use is modern, capable and habitable.
    Again, LPD-17 and LHA(R) address these priorities, as does our
    continuing endeavor to remove the ``man and mammal from the
    minefield.'' We can ill afford not to fully exploit these programs. The
    gain far exceeds any short-term financial pain caused by investing in
    the safety and welfare of our most precious asset--our sailors and
    marines. I am grateful for your support and look forward to supporting
    you and the American people in the years to ahead.

        Senator Kennedy. Admiral Balisle.

       STATEMENT OF REAR ADM. PHILLIP M. BALISLE, USN, DIRECTOR,
            SURFACE WARFARE DIVISION, DEPARTMENT OF THE NAVY

        Admiral Balisle. Mr. Chairman, members of the subcommittee,
    thank you for the opportunity to appear before you today to
    discuss the Department of the Navy's fiscal year 2003 surface
    warfare systems budget. I would also like to thank the
    committee for your strong and enduring support for surface
    warfare programs and, more importantly, for your support of our
    truly outstanding surface warriors. These young men and women
    who stand watch today on ships and at support bases around the
    world in the defense of freedom are the heart and soul of
    surface warfare and are the key to our success.
        Surface warriors and our systems have played a key role in
    the recent successes in the war on terrorism. The status of
    surface warfare today is healthy and improving. We have a
    credible combat-ready force that emphasizes forward-deployed
    operations. This year's budget submission shows real progress
    in fiscal year 2003 and through the future years defense plan
    in support of our strategy to provide a robust warfighting
    capability necessary to pace the threat and support worldwide
    assured access for joint forces.
        We are focused on providing the greatest flexibility for
    the least investment. For our fiscal year 2003 budget, we seek
    improvement in current and future readiness, with emphasis on
    transformational technologies and concepts, to provide
    affordable solutions to our warfighting requirements. More
    importantly, we will endeavor to get those solutions rapidly
    into the fleet.
        My written testimony describes our investment strategy and
    details the impact of this budget submission on the full range
    of surface warfare programs. But I would like to very briefly
    highlight our efforts in three important areas: readiness,
    network-centric warfare, and the future fleet.
        This year we are making solid progress in addressing
    longstanding readiness issues, thanks to the leaders and
    sailors in the fleet and the support of this Congress. Surface
    warfare manpower, training, and maintenance accounts have
    recently posted significant levels of improvement, an
    achievement reflected in the persistent performance of our
    ships in the ongoing war on terrorism. The fiscal year 2003
    budget submission continues this improvement trend in these
    critical readiness areas.
        The Navy's cornerstone warfighting concept of network-
    centric warfare derives maximum force warfighting potential
    through rapid and robust networking of diverse, well-informed,
    and geographically dispersed warfighters. The Navy's
    cooperative engagement capability (CEC) system and the naval
    fires network are leading the way in making network-centric
    warfare a reality in the fleet.
        The John F. Kennedy battle group deployed with CEC last
    month and we added in this budget submission significant
    funding to accelerate fielding and further development of CEC
    and other sensor-netting technologies.
        The naval fires network digitally connects sensors through
    decision makers to shooters. This provides time-critical strike
    and time-critical targeting capabilities and enhances every
    area of our warfare missions. Using the Defense Emergency
    Response Fund provided by Congress this year, we have
    accelerated deployment of this vital system and our current
    budget request ensures continued rapid deployment and
    development of this significant situational awareness and time-
    critical targeting capability.
        The report of the Quadrennial Defense Review study and the
    Navy's leadership have recognized that assuring access to key
    regions abroad and projecting power in its various forms
    requires a broad range of naval capabilities. To achieve this,
    our 21st century Navy must be comprised of affordable force,
    reflecting state-of-the-art capabilities and technologies.
        The cornerstone of this force is the timely fielding of the
    DD(X) destroyer as the lead ship of an evolving class of multi-
    mission threat-capable, and cost-efficient surface combatants.
    The application of a proven Spruance-to-Aegis evolutionary ship
    development approach in a new class of 21st century combatants
    is absolutely essential for tomorrow's Navy. Together with the
    cruiser conversion program and the upgrade of our DDGs, these
    future ships will provide the joint force commander with a
    toolbox of capabilities he needs.
        In conclusion, sir, once again I would like to thank you
    and the members of this committee on behalf of the surface
    warriors in our Navy. I want to offer my sincere thanks for
    this opportunity to speak before you today and I stand by for
    your questions.
        [The prepared statement of Rear Admiral Balisle follows:]

              Prepared Statement by Rear Adm. Phillip Balisle, USN

        Chairman Kennedy, Senator Sessions, distinguished members of the
    Senate Seapower Subcommittee, thank you for the opportunity to address
    you today on the status of the surface Navy. I greatly appreciate the
    excellent and continued support your committee has given the surface
    Navy which has allowed our Surface Warriors to contribute significantly
    to America's Navy's accomplishment of our missions around the world--
    including the swift and effective response to the attacks of last
    September--while continuing to advance our strategy to transform the
    Surface Forces to meet the challenges of the future.

          THE UNITED STATES NAVY--PRESENCE . . . POWER . . . PRECISION

        Our Navy's response to the events of September 11 highlights the
    mobility, lethality and reach of naval forces.
        On the home front, aircraft carriers, Aegis cruisers and
    destroyers, and numerous other ships rapidly responded to take station
    off the east and west coasts of the United States to guard the air and
    sea approaches to our shores in coordination with the U.S. Coast Guard
    and other military and civilian agencies ashore.
        Forward deployed, U.S. naval forces were first on the scene and led
    the way for the joint force effort in Operation Enduring Freedom.
    Tomahawk shooters suppressed enemy air defenses while carrier strike
    aircraft projected power with precision munitions hundreds of miles
    beyond the sea. Marines, Navy SEALS, Seabees, and Special Operations
    Forces sustained by Navy forces from the sea all played key roles in
    freeing Afghanistan from the Taliban regime and the al Qaeda terrorist
    network.
        The extraordinary warfighting flexibility demonstrated by U.S.
    naval forces this year is the result of the dedicated service of our
    active and Reserve Sailors and Marines and their civil service team
    members. It is a testament to our commitment to mission accomplishment.
    The U.S. Navy is ready to fight and win.
        Forward deployed combat forces provide this nation with speed of
    response to an emerging crisis from forces that can be immediately
    employed from within a region. Before the most recent action in
    Afghanistan, naval forces had provided the same type of timely response
    on 86 occasions in the last decade alone, including 11 different combat
    operations. In fact, even before the events of September 11, the last
    10 Navy carrier battlegroups to deploy, a span that began in 1998, have
    engaged in combat as part of Operation Allied Force in Southeastern
    Europe and/or operations in the Middle East. Additionally, in that time
    span, naval forces conducted non-combatant evacuation operations,
    conducted thousands of boardings in support of U.S. drug policy and
    United Nations sanctions, and participated in numerous humanitarian
    assistance operations. During crisis or conflict, forward-deployed and
    forward-based naval forces are positioned for timely response. The
    Navy-Marine Corps team stands ready, at the ``tip of the spear,'' to
    assure access and to project joint and combined power in support of
    National policy.

                 STRATEGIC ENVIRONMENT AND NAVY TRANSFORMATION

        The 2001 Quadrennial Defense Review (QDR) sets clear goals to
    assure allies and friends that the United States is a reliable security
    partner, to dissuade future military competition from potential
    adversaries, to deter threats and coercion against U.S. interests and
    decisively defeat any adversaries who have not been deterred from
    attempting to impose their will on the U.S., its allies or its friends.
    The QDR requires that we restore and then improve current readiness
    while transforming to address the circumstances of the 21st century. To
    support these goals, our sovereign naval forces must be able to enhance
    deterrence and, should that fail, assure sea-based joint force access
    to project offensive and defensive power ashore to defeat all
    adversaries.
        New challenges, including the threat of cyberwar, weapons of mass
    destruction, continued international terrorism and the havoc wrought by
    failed states, define a most unpredictable future. These and other
    emerging threats will call for new deterrence options spanning the full
    range of threats facing our Nation. Technical advances in area-denial
    forces including mines, small boats, diesel submarines, sophisticated
    anti-ship cruise missiles, land-based aircraft and ballistic missiles
    have expanded the challenge in the littoral areas where naval forces
    must operate in order to maintain the ability to project power in
    support of national objectives.
        To counter these challenges in the littoral, robust Surface Force
    warfighting capabilities must be maintained to guarantee the Navy's
    ability to sail into harm's way, and enable our assured access in the
    littorals throughout the world. These capabilities are achieved through
    multi-layered defense-in-depth, active and passive measures, teamwork
    and force synergy. The evolution of our warfighting systems must be
    kept ``lock step'' ahead of the emerging threat. As the threat evolves
    and becomes more capable, so must the Navy's combat systems. To remain
    ahead of this evolving threat we must field state-of-the-art
    capabilities as we continue to invest in next-generation research and
    development.
        The Navy will meet the challenge of an uncertain future by
    continuing to transform our concepts, organizations, doctrine,
    technology, networks, sensors and platforms, weapons systems, training,
    education and our approach to manning. At the heart of this wide-
    ranging transformation is the implementation of network-centric
    warfare. This integration of sensors, information systems, platforms
    and weapons to achieve major increases in warfighting effectiveness
    will provide the framework for a transformed, balanced total force that
    will provide the Joint Force Commander with the ``tool box'' of
    capabilities necessary to fight and win against current and emerging
    threats.
        The Surface Warrior's contribution to the joint commander's ``tool
    box'' of capabilities supports a family of shaping, offensive and
    defensive missions including assurance and deterrence, maritime
    strategic fires, expeditionary maneuver warfare, maritime strategic
    defense, ship self-defense, undersea warfare, and homeland security.

             Assurance and Deterrence--The enduring Navy-Marine
            Corps contribution to national security is combat-credible
            forward presence. surface Navy forces present and engaged
            forward--where our most vital economic, political, and military
            interests are concentrated--routinely provide a framework of
            security and stability that helps other instruments of national
            power to assure our allies and friends and to dissuade
            potential military competitors.
             Maritime Strategic Fires--The surface Navy provides
            cruise missile precision strike and naval surface fires
            capabilities vital to integrated joint operations across the
            spectrum of warfare.
             Maritime Strategic Defense--The surface Navy with a
            variety of existing and developing capabilities is postured to
            project defense over sea-based and land-based U.S. and Allied
            forces including theater air defense and theater ballistic
            missile defense.
             Expeditionary Maneuver Warfare--surface Navy forces
            play a vital role on the Navy-Marine Corps team that stands
            ready to project sea-based power ashore in support of joint,
            naval, or multi-national operations.
             Ship Self-Defense--This capability enhances the
            ability of all fleet units to survive and operate in an enemy
            area-denial environment and is at the core of the sea-basing
            concept that affords sustained access to naval forces and
            supports maneuver along the length and breadth of the joint
            littoral operations area unconstrained by political or
            sovereignty issue.
             Undersea Warfare--Command of the seas in both the open
            ocean and in the littorals is a pre-requisite for sea-basing
            and the surface Navy fields an array of existing and developing
            capabilities in anti-submarine and mine warfare to ensure
            freedom of maneuver, access, and freedom of trade on the sea.
             Homeland Security--The surface Navy is coordinating
            with numerous other government and military agencies,
            especially the Coast Guard to defend the air and surface
            approaches to our coast, ports, and waterways.

                             A CONTINUING CHALLENGE

        The status of Surface Warfare today is healthy and improving. We
    are still the greatest Navy in the world. We have a credible, combat
    ready force with our primary emphasis on deployers. This year's budget
    submission shows real progress for fiscal year 2003 and through the
    Future Years Defense Program (FYDP) in support of our strategy to
    provide the robust warfighting capabilities necessary to pace the
    threat and support assured access. We are focused on providing
    warfighting capability and on providing the greatest flexibility for
    the least investment.
        The Nation must continue to have a credible sea-based warfighting
    capability in the 21st century, ships that can go in harm's way and
    accomplish the mission to support the National Security Strategy. We
    must have sufficient force structure in both quantity and quality and
    be able to put the right mix of ordnance in sufficient numbers on
    target.
        We have made progress over the last year in many areas but there is
    still significant work to be done. We will continue to seek improvement
    in current and future readiness with emphasis on transformational
    technologies and concepts to provide affordable solutions that will
    allow us to execute all of our missions and requirements. More
    importantly, we will endeavor to get those solutions rapidly into the
    fleet.
        In my testimony below, I will first review our progress in
    maintaining and improving readiness before discussing our contribution
    to the Navy's network-centric warfare concept and our progress in
    support of the vital mission areas: maritime strategic fires, maritime
    strategic defense, ship self-defense, undersea warfare, and homeland
    security.

               READINESS--MANPOWER, MAINTENANCE, AND FUTURE FLEET

        We are making solid progress in addressing long-standing readiness
    issues thanks to the leaders and sailors in the fleet and the support
    of the American people and Congress. Manpower, training, and
    maintenance posted significant levels of improvement over the last year
    and continued improvement is supported in the fiscal year 2003 budget
    submission. Although maintaining force structure will be a challenge,
    the Surface Ships joining the fleet today are the best in the world and
    we have a solid plan for the future with the DD(X) family of ships.

                               MANPOWER/TRAINING

        Manpower is our biggest investment, comprising nearly one-fourth of
    our allotted budget. We must continue to look for economical and
    efficient methods for manning our ships. The surface Navy has no
    alternative but to transition from manpower- and workload-intensive
    ships to ships such as DD(X) and the LCS (which will be introduced in
    next year's budget submission) that will leverage new technologies to
    expand our warfare capabilities while optimizing manning levels.
    Roughly two-thirds of our community billets are at sea and the
    preponderance of these billets are in our Aegis ships. This coupled
    with the relatively long life expectancy of the Aegis Fleet has guided
    us to introduce the Smartship program into the fleet and our Aegis
    force. The Smartship program, which takes advantage of select
    technological enhancements to reduce manning requirements, is a useful
    vehicle to facilitate this transition from today's manpower intensive
    fleet to the optimally manned fleet of the future, designed around the
    principles of human-centered design (HCD) and human systems integration
    (HSI).

                               TRAINING STRATEGY

        In addition to researching and adopting technologies to achieve
    optimal manning, and critical to our retention efforts, we must focus
    on development of our most valuable resource, the sailor. We are still
    engaged in a battle for people. To win this battle, we must deliver
    educational and personal growth opportunities for our sailors.
        The surface Navy has adopted a strategy to reverse a trend that has
    seen training facilities and equipment become increasingly outdated and
    ineffective. The ultimate objective of this strategy is to provide
    optimally trained sailors to the fleet at the right time, establish and
    maintain their proficiency, and promote personal and professional
    development throughout their careers. This strategy focuses on tailored
    training, robust integrated training systems, mission area training and
    distance support. Through detailed billet and watch station task
    analysis and the installation and use of modern re-configurable
    trainers, we will be able to properly train sailors while at the same
    time replace outdated technical training equipment, rapidly update
    curricula, and phase out outdated training methodologies. Emphasis on
    mission area training will address fleet training requirements at the
    earliest stages of system design and acquisition, an approach that has
    proven successful for Aegis combat system training. Distance support
    will be essential for providing training ``on demand'' to support
    sailors' personal and professional development and to move all training
    administration off the ship.
        To achieve these objectives, in the fiscal year 2003 budget
    submission we have accelerated installations of our principle shipboard
    tactical team trainer, Battle Force Tactical Trainer (BFTT), and
    invested significantly in training re-engineering projects that will
    lead to replacement of costly and out-of-date technical training
    equipment in our technical schools, earlier qualification of our junior
    officers as surface warfare officers and increased navigation, ship
    handling and seamanship proficiency training in our fleet concentration
    area schoolhouses as well as onboard the ships themselves.

                            JUNIOR OFFICER RETENTION

        Junior officer retention is critical to the future of surface
    warfare and, though we are pleased with recent progress, there is still
    significant work to be done in this critical area. Junior officer (JO)
    retention remains at the top of our manpower concerns.
        We monitor JO retention by comparing the number of officers that we
    accessed in a particular year with the current inventory for that same
    ``Year Group.'' Our retention requirements are thus different for each
    Year Group, generally falling between 34 and 38 percent of officers
    remaining on active duty in the surface community at about the 7-year
    point. Our shipboard department head requirements are relatively
    stable. We require 245 officers to become department heads every year
    to fill our at-sea requirements without significantly over-touring
    these officers and gapping billets elsewhere in the Navy. To avoid
    confusion among different retention percentage requirements for
    different Year Groups, I will tailor my remarks to discuss our ability
    to meet the relatively stable at-sea requirements of 245 department
    heads per year for each Year Group.
        In recent years, just under 200 officers a year were electing to
    continue their service as department heads. This led to increasing
    department head tour lengths to an average of 40 months and in some
    instances to as much as 50 months in order to cover all of our
    requirements. These extended tours led to significant junior officer
    dissatisfaction and worked further against our retention goals. To
    break this negative cycle, we established several innovative programs.
        Surface Warfare Officer Continuation Pay (SWOCP) offers significant
    financial incentives to remain on active duty in the surface warfare
    community through two department head tours. 1,699 of the 1,713
    available SWOCP contracts offered over the past 2 years were accepted,
    additionally 161 of the 275 contracts available this year have already
    been completed. Additionally, our ``early roller'' program accelerated
    careers of outstanding division officers to department head tours to
    cover some of these critical sea-going requirements. 115 outstanding
    young Division Officers have stepped forward and participated in this
    program to date.
        We believe our strong commitment to graduate education for surface
    warfare junior officers is having a positive retention effect as well.
    We have increased the numbers of junior officers participating in
    graduate programs from 155 in fiscal year 2000 to 200 in fiscal year
    2001, and already have 133 officers participating in fiscal year 2002.
    In addition, we have allocated funds to support 40 Graduate Education
    Vouchers (GEV), paying officers tuition up to $20,000 per year for 2
    years. Our assessment to date indicates that graduate education and
    SWOCP are a powerful retention tools, and we continue to monitor our
    retention progress closely.
        These efforts have been effective in reversing our declining Junior
    Officer population trends of recent years and we are approaching our
    goal of 245 officers per Year Group continuing their service through
    two Department Head tours. The average number of department heads
    produced by YGs 91 through 94 was 179--much lower than the goal of 245.
    YGs 95 and 96 on the other hand already have 219 and 223 contracted
    department heads. Except for the early rollers, these officers can be
    expected to start their department head tours over the next 2 years.
        We are also continuing an aggressive resignation withdrawal
    campaign that has borne much fruit over the last several years. 27
    officers have reconsidered their resignations in the first 3 months of
    fiscal year 2002. This is particularly significant when added to the
    163 officers that withdrew their resignation requests over the previous
    2 years.
        We are not meeting our junior officer retention requirements yet,
    but we are trending in the right direction. Junior officers are our
    future; we will continue to focus our energies and innovations in
    retaining our best. We believe the future of the surface warfare
    community is at stake.

                               FLEET MAINTENANCE

        Fleet maintenance is a pillar of current readiness. Recent world
    events have reinforced the need to maintain our ships mission ready to
    sail in support of national tasking. This is not an easy task in
    today's fiscal environment as we continually strive to balance the
    needs of today's Navy with the requirement to modernize and re-
    capitalize our fleet. With our smaller force, we must also focus on
    maintaining our ships with minimal disruption to ships' operational
    schedule to provide the maximum flexibility to our Fleet Commanders.
        Our ability to predict ship maintenance requirements continues to
    improve. The Maintenance Requirements System (MRS) is in its third year
    of use and has matured considerably since its introduction. This system
    uses historical return costs and documented deferred maintenance to
    project future maintenance requirements. Under the guidance of the MRS
    Alliance, MRS is yielding a firmer, more rigorous requirement. This
    more credible requirement provided the needed rationale to increase our
    investment in depot maintenance in fiscal year 2003 budget submission.
        Condition-based maintenance (CBM) processes and our ships' class
    maintenance plans further define our surface ship maintenance
    requirements. The maintenance support community has embraced CBM and is
    working hard at improving water-front maintenance assessment processes
    and our ability to determine maintenance requirements based on evidence
    of need. Material condition information from these assessments is
    directly fed back into the programming process to ensure adequate
    resources are devoted to ship maintenance. This information is also
    being used in new ship design efforts to reduce overall lifetime costs.
    Programs such as Capital Investment for Labor (CIL) and Cost Reduction
    and Effectiveness Improvement (CREI) are also investing in new
    technologies and ways of doing business that will directly affect
    maintenance requirements and sailor workload. A recent example of this
    is our fiscal year 2003 budget submission investment in magnetic
    couplings, a new technology that eliminates the requirement for our
    sailors to perform a time consuming alignment procedure. In the
    President's budget submission, we are planning to procure and install
    176 magnetic couplings per year for the next 4 years. This initiative
    not only has a high maintenance return on investment, but also
    significantly reduces the sailor workload. This is a win-win for both
    the sailor and the maintenance community and demonstrates our
    commitment to reducing sailor workload and improving quality of
    service.
        In the fiscal year 2003 budget submission, we funded depot
    maintenance to 91.6 percent and intermediate maintenance to 95 percent
    of the OPNAV assessed requirement. Although deferred maintenance is
    expected to grow when funded at less than a 100 percent investment
    level, MRS captures this shortfall and includes a portion of the
    deferred maintenance in the annual continuous maintenance (CM)
    requirement.
        We remain committed to providing ships that are supported to a
    realistic and executable maintenance requirement and ready to respond
    to operational tasking.

                        BUILDING THE FLEET OF THE FUTURE

        As the Chief of Naval Operations has pointed out in his previous
    congressional testimony, the surface combatant fleet is, on average,
    relatively young, but the rate of ship recapitalization bears watching.
    We must procure an average of nine ships per year in the later years of
    the FYDP to sustain today's fleet and to provide stability for our
    defense industrial base. As VADM Mullen, DCNO for Resources,
    Requirements and Assessments, stated in his previous congressional
    testimony, Navy leadership is committed to improving the
    recapitalization rate of the Navy, particularly in the area of
    shipbuilding. Our current budget sets the foundation for the future by
    investing in impressive programs that will comprise the core
    capabilities of our force in the years to come. The continuing
    production of Arleigh Burke destroyers, the planned production of a
    family of new surface combatants--the advanced destroyer, DD(X), the
    advanced cruiser, CG(X), and the LCS--the Ticonderoga Cruiser
    Conversion program, and the Joint Command and Control Ship JCC(X)
    program present impressive technological leaps in warfighting
    capability, innovation, and reliability.

                                     DDG-51

        The DDG-51 class guided missile destroyer program remains the
    Navy's largest surface ship program. The fiscal year 2003 budget
    request includes $2.29 billion for the procurement of two DDG-51 class
    destroyers. The request adds six additional destroyers to the
    procurement profile, two additional ships per year in fiscal year 2005
    through 2007. The addition of the six DDGs addresses three issues:
    mitigates the industrial base gap issue between DDG-51 production and
    DD(X) construction that was evident in prior budgets; better stabilizes
    the surface combatant build rate as we transition to DD(X); and
    stabilizes future surface combatant force structure in the 2012 time
    frame. A new 4 year, fiscal year 2002 through 2005, multiyear
    procurement contract solicitation draft has been recently released. It
    is anticipated that a contract will be awarded for these eight ships
    plus options this summer.
        The two Arleigh Burke-class destroyers procured in fiscal year 2003
    will be Flight IIA ships configured with the Baseline 7 Phase I Aegis
    combat system, which we introduced on the third ship in fiscal year
    1998. This baseline incorporates new integrated mission capability and
    makes these ships more capable in the littoral than any other combatant
    in the world. The upgrades include the SPY-1D(V) radar system,
    Cooperative Engagement Capability, and a 5,,/62 gun. Additionally, the
    DDG-51 destroyers of the fiscal year 2002 multiyear procurement will be
    forward fit with Baseline 7 of the Mk 41 Vertical Launching System, the
    Tactical Tomahawk Weapons Control System and the ability to accommodate
    the MH-60R helicopter variant.

                              THE FAMILY OF SHIPS

        The Report of the Quadrennial Defense Review Study and the Navy's
    leadership have recognized that assuring access to key regions abroad
    and projecting power, in its various forms, requires a broad range of
    naval capabilities. These disparate capabilities can best be satisfied
    by a family of ships, each of which, while capable of multiple missions
    as necessary and prudent, is optimized to perform a key function:

            - Advanced Multi-mission Destroyer, DD(X), for delivery of
            precision strike and volume fires to support assured access and
            maneuver warfare.
            - Advanced Cruiser, CG(X), to provide air superiority against
            cruise missile and ballistic missile threats over the total
            force.
            - Littoral combat ship, LCS, capable of defeating littoral
            defenses including mines, fast small boats and diesel
            submarines. (fiscal year 2004 program start)

        Power projection ashore at the high end of the spectrum of conflict
    (as well as concomitant force-protection and assured-access
    requirements) demands the high-volume firepower, long-range precision-
    strike capability, ample magazine capacity, and enhanced endurance of
    sizeable multi-mission combatants.
        However, the intricacies of the littorals demands more expansive,
    detailed ``coverage'' inshore which, as currently envisioned, may be
    satisfied by a multiplicity of smaller, high-speed, and highly
    maneuverable ships working in close concert with a distributed, netted
    force of multi-mission ships.
        DD(X) and CG(X) will be larger, multi-mission warships, with
    specialized mission systems and significant ordnance payloads. They
    will be optimized to deliver ``fires for effect'' in both land attack
    and high-end force protection. They will be designed to be highly
    survivable in expeditionary operations and will provide defense-in-
    depth for smaller focused-mission ships.
        LCS will be a smaller ship with an advanced hull design, optimized
    specifically to operate close inshore. Key attributes of LCS will be
    stealth, speed, and maneuverability. Missions envisioned for LCS
    include mine warfare, anti-surface warfare, and anti-submarine warfare
    against quiet diesel submarines. LCS will be capable of operating self-
    sufficiently for extended periods in a low-threat environment,
    including homeland security/defense missions in conjunction with USCG
    forces. LCS is a new program that will be addressed in the fiscal year
    2004 budget submit. Nevertheless, it is appropriate to address it in
    this fiscal year 2003 supporting testimony as it will play a
    significant role in the 21st century Navy force structure.
        In-service Aegis ships, also within this family of ships, will be
    upgraded through evolutionary upgrades and back fit of technologies in
    the DDG-51 production line and by back fit of CGs in the Cruiser
    Conversion program to keep them current and viable in the littoral for
    their entire life span.

                           SPIRAL TECHNOLOGY TRANSFER

        Using a spiral development approach will allow technologies to be
    fielded when they are ready through a flight approach and lessons
    learned/technology sharing between programs, forged to capture cutting
    edge initiatives. As DD(X) drives the development of technology in many
    areas, we will look for opportunities to backfit advancements on
    existing platforms. Carefully focused upgrade and conversion programs
    will ensure the existing core of surface combatants maintain the
    capability for battlespace dominance. The spiral technology development
    process of DD(X) and LCS will enable the most efficient insertion of
    high pay-off technologies into the Family of Ships with the least
    amount of risk. DD(X) and LCS will be developed in parallel and on
    complementary time lines.

            - CG(X) will share a common hull form and propulsion plant
            architecture with DD(X) and will use many of the same
            innovative technologies to reduce crew size, increase joint
            C\4\I connectivity, and reduce operating and support costs.
            - LCS will benefit from the DD(X) technology development by
            taking advantage of advanced automation technology, high
            density propulsion plants and increased nodal and C\4\I
            connectivity.
            - In-service Aegis surface combatants will receive technology
            upgrades that will extend their combat capabilities and keep
            them at the leading edge of combat effectiveness.

                            DD(X) ADVANCED DESTROYER

        DD(X) will introduce a wide range of technology for naval ships
    but, moreover, it will be the first deploying combatant ship of a new
    family of 21st century multi-mission ships. DD(X) will integrate
    advanced command, control, communications, intelligence, surveillance,
    and reconnaissance systems to achieve an unprecedented level of
    knowledge of the battlefield. To ensure effective operations within the
    littoral, DD(X) will employ state-of-the-art sensors combined with
    unsurpassed radar, acoustic, magnetic, and infrared signature
    reductions exceeding those of all previous warships, including DDG-51.
    Active and passive self-defense systems, as well as cutting edge
    survivability features (including modular ship systems and in-stride
    mine avoidance) will enable DD(X) to fulfill the full spectrum of
    battlegroup missions assigned to our destroyers today, and to fight
    through damage.
        DD(X) will have the capacity to carry the variety and volume of
    offensive, precise firepower, which will enable our Marine Corps and
    light, mobile Army forces to complete their missions. These systems
    include Tactical Tomahawk and the Long Range Land Attack Projectiles
    (LRLAP) with a range of 100 miles, and will have the growth potential
    to include an ALAM. DD(X)'s ability to deploy a high volume of
    precision-guided munitions will provide Joint Force Commanders with
    significantly improved ranges, accuracy, volume, firing rates and
    response times compared to current-generation ships.
        In order to ensure the ship's ability to perform its primary naval
    fires mission, the DD(X) design is structured to incorporate several
    ``leap ahead'' technological advances. This represents a ``win-win''
    investment for the Navy as many of DD(X)'s advanced technology
    developments will benefit other ship classes. DD(X) will be the
    catalyst for:

            - Integrated Power System (IPS)/Electric Drive: All-electric
            architecture that provides electric power to the total ship
            (propulsion and ship service) with an integrated plant.
            Benefits include reduced operating costs, improved warfighting
            capability, and architectural flexibility.
            - Advance Gun System: 155mm gun with ``fully automated''
            ammunition handling system and a family of munitions/propelling
            charges specified to achieve ranges of up to 100 nautical
            miles. AGS will provide high rate-of-fire (approximately 12
            rounds per minute) with a magazine capacity sufficient in size
            to meet USMC operational requirements. Features of the AGS
            design will provide the basis for future naval gun systems.
            - New Radar Suite (Multi-Function Radar (MFR)/Volume Search
            Radar (VSR): MFR provides DD(X) and other applicable surface
            combatants with affordable, high performance radar for ship
            self-defense. The MFR will greatly enhance ship defense
            capability against all threats envisioned in the littoral
            environment. VSR provides DD(X) and other applicable surface
            ships with an affordable, high performance air search radar.
            Both MFR and VSR should reduce manning and life-cycle costs
            compared to the multiple systems that perform these functions
            today.
            - Optimized Manning through Automation: Use of initiatives,
            such as advance system automation, robotics, human centered
            design methods, and changes in Navy personnel policies, will
            allow DD(X) to meet mission requirements with significantly
            reduced crew size while improving the sailor's quality of
            service. Lessons learned from DD(X) can be applied to future
            surface ship and submarine designs.
            - Total Ship Computing/Software Development: Key to meeting
            optimal manning requirements is affordable open systems
            architecture technology insertion/upgrades to future ships. By
            taking advantage of commercial advances in computer processing
            power, distributed/integrated data networks and software
            development, total ship computing enables a ``plug and play''
            environment for all internal and external user systems.
            - Integrated Apertures: In addition to reducing the ship's
            radio frequency (RF) signature, shared apertures will reduce
            topside antenna crowding, decrease topside weight, and simplify
            antenna maintenance. Shared aperture technology has the
            potential to benefit many other Navy programs.
            - Survivability: DD(X) is developing system and protection
            concepts that are intended to reduce vulnerability to
            conventional weapons and peacetime accidents under reduced
            manning conditions. Development areas include damage control
            computer-based systems that provide rapid systems restoration,
            fire protection devices that improve probability of survival
            with a reduced crew ship, and ship protection concepts that
            reduce magazine and commercial equipment vulnerability.
            - Stealth: Operations in the littoral battlespace has made
            stealth an essential element of new combatant design,
            particularly radar cross-section reduction. The lessons learned
            by DD(X) will provide new insight toward all aspects of ship,
            sensor and weapons design.

        The DD(X) family, with its transformational technologies, will be
    the cornerstone for a family of next-generation surface combatants.
    These combatants must be affordable to produce and less costly to
    operate. They must be designed from the keel up to enable dramatic, 50
    to 70 percent, manpower reductions.
        Many of these technologies planned for DD(X) were intended to be
    incorporated into the DD 21 program. However, the DD 21 program allowed
    little technical risk reduction, though many of the technologies are
    quite transformational. With DD 21, we were taking a single step to
    full capability. There was a success-oriented assumption that
    everything would proceed on schedule and cost. There were limited
    opportunities for prototyping and little room for error. In the end,
    these factors resulted in a program with unacceptable cost growth risk.
    Thus, DD(X) was formulated to employ a broad range of strategies to
    make our entire family of next-generation surface combatants, the
    DD(X), CG(X) and LCS, more affordable.
        To mitigate the high technical risk; the restructured DD(X) program
    adds several land-based and sea-based prototypes for the key
    technologies. This provides a practical means of reducing risk within
    each area. The Navy will see potential problems earlier in the process,
    providing us a better chance to efficiently solve them. This strategy
    improves the chances of delivering a functional destroyer within cost
    and schedule.
        Additionally, the Navy plans to produce the lead ship using RDT&E
    funds. RDT&E funding recognizes that the lead ship design will mature
    during the design and construction process and may require a more
    flexible funding medium than SCN to compensate for technology
    development or schedule issues. This approach is supported by ASN (RDA)
    and USD (AT&L).
        The Navy can react to problems without the risk of resorting to
    prior-year completion funding. The program manager can focus on
    establishing an efficient process for manufacturing the DD(X) class and
    avoid trading away production initiatives if costs increase. Being able
    to adjust the RDT&E budget for the lead ship provides the best chance
    to control costs and define a production process that allows the Navy
    to affordably build these next-generation surface combatants.
        Construction of the lead ship in RDT&E is a significant change in
    the Navy's approach to shipbuilding, which the Navy hopes the committee
    will support.
        Navy's fiscal year 2003 shipbuilding program also provides
    flexibility for a smooth transition in DD(X) production. Given
    production approval by Navy and OSD, SCN funds allocated to fiscal year
    2006/fiscal year 2007 DDG-51 class destroyers may be reallocated in
    future budget submissions to provide uninterrupted follow-on class
    production of the fiscal year 2005 RDT&E lead ship.

                             CG(X) ADVANCED CRUISER

        The CG(X) will be built with the same hull and propulsion plant as
    DD(X). The combat system will take advantage of emerging technologies
    to provide sustained, theater-wide strategic defense against aircraft,
    anti-ship cruise missiles, and theater ballistic missiles.

                           LITTORAL COMBAT SHIP (LCS)

        The LCS will be a focused-mission ship. Built on a time line
    complementary to, but shorter than, that of the DD(X)/CG(X) family, it
    will be a practical, significantly smaller surface combatant capable of
    performing focused missions in places where it would be impractical or
    unwise to commit a larger, multi-mission surface combatant. Commercial
    hull technologies will be leveraged to develop these modular mission
    package platforms, primarily focused on missions related to battle
    space access.
        In a sense, this is new ground and a significant opportunity, as we
    will be building our 21st century surface combatant fleet from the keel
    up with the full awareness that it will operate as a netted,
    distributed force. We will need the focused-lethality of the Littoral
    combat ship to accomplish specific missions, while the multi-warfare,
    multi-mission DD(X) and CG(X) platforms provide the wide area battle
    space dominance for which they are uniquely suited. Away from home
    waters and particularly in water space immediately adjacent to
    adversarial coastlines, access will be a challenge. Area denial
    defenses close to land will be neutralized by multi-mission surface
    combatants working in close coordination with specially designed,
    netted and configured Littoral combat ships, exercising the capability
    to counter mines, small surface combatants and the shallow water
    warfare threat posed by diesel submarines.
        Importantly, with its size, speed and modular design
    characteristics, LCS has the potential to serve as a platform for
    mutual development with the United States Coast Guard's Deepwater
    Program. In this capacity LCS may provide the foundation for the
    Nation's interoperable U.S. Navy and U.S. Coast Guard force engaged in
    homeland defense. We are continuing to explore these possibilities with
    the Coast Guard as we both move forward with these important ship
    development programs. LCS will also be particularly suitable for
    foreign military sales, potentially providing our coalition partners
    with a state-of-the-art surface combatant that will ensure continuing
    interoperability among our navies. In fiscal year 2003, the LCS program
    consists of the analysis of several ongoing experimental ship efforts.
    Development and production funding will be addressed in the fiscal year
    2004 budget submission.

                               CRUISER CONVERSION

        While building new platforms for the future is a prime priority,
    maintaining and modernizing our current platforms enables them to
    continue to be valuable warfighting assets in the years ahead while
    concurrently trying to mitigate escalating support costs of aging
    equipment. As technological cycle times are now shorter than platform
    service life, it is fiscally prudent and operationally imperative to
    modernize the force through timely upgrades and technology insertion.
    In support of this priority, we plan to modernize the Ticonderoga-class
    cruisers. Our technology insertion efforts include the Smartship
    initiatives and a spectrum of new capabilities on other combatants for
    both existing and in-development ships to be used to extend the combat
    system service life of these vital multi-mission platforms. The fiscal
    year 2003 budget request includes $104 million in RDT&E funds to
    continue the engineering efforts to meet the schedule for the first
    installation, which will occur in fiscal year 2006. The upgrade of
    these ships will add new, and enhance existing, combat system
    capabilities for maritime strategic fires, cooperative engagement
    capability, force protection, and area air defense commander missions
    as well as increase service life with hull, mechanical, and electrical
    upgrades. These new mission capabilities will dramatically improve the
    ability of these warships to operate in joint and coalition warfare
    environments and the littorals. The program is essential to maintaining
    a mission-relevant force of approximately 116 surface combatants over
    the next 20 years.

                                     JCC(X)

        JCC(X) will provide the JFC and staff with enhanced mission
    capability for joint campaign management. It will also provide naval
    component commanders with capabilities for operational control of
    assigned naval and allied forces. JCC(X) will support planning and
    command and control of a full spectrum of joint and multi-national
    efforts including:

            - Major Theater War
            - Forward Presence/Peacetime Engagement
            - Peacekeeping/Peace Enforcement
            - Humanitarian Assistance/Disaster Relief
            - Non-Combatant Evacuation Operations

    The program entered concept exploration and definition in November 1999
    and has developed a range of alternatives which will be used to decide
    the controlling characteristics of the ship. The fiscal year 2003
    budget request supports construction of the JCC(X) within the FYDP. The
    final definition of the program will be addressed in the fiscal year
    2004 budget submission.

                            NETWORK-CENTRIC WARFARE

        The Navy's cornerstone warfighting concept of network-centric
    warfare derives maximum force warfighting potential through rapid and
    robust networking of diverse, well-informed and geographically
    dispersed warfighters. This requires the integration of systems,
    weapons and communications networks in which the right information is
    available to the right system or operator at the right time. Naval
    forces, dispersed or concentrated, with shared awareness of the battle
    space and a solid understanding of the commander's intent, are prepared
    to exploit opportunities as they arise without reliance on centralized
    control procedures. The command and control environment of the future
    must be capable of contending with the complexity of the battle space.
        Network-centric operations are based on a robustly networked system
    of sensors, decision aids, weapons, warriors, and supporting systems to
    support joint and naval forces in their execution of missions across
    the entire range of military operations. FORCEnet is the Navy's
    overarching, integrating concept through which network-centric
    operations will be implemented by Naval forces. It will provide the
    architecture of networks, the joint infostructure, web-based
    infrastructure, and network security for the conduct of network-centric
    warfare.
        The surface Navy's cooperative engagement capability (CEC) system
    will contribute significantly to the force level integration that
    FORCEnet is introducing and ensuring interoperability of this and other
    systems at the battle group, fleet, and joint levels is a major
    initiative to support network-centric operations. Sea-based joint
    command and control is another pillar of the FORCEnet concept and the
    area air defense commander (AADC) program and the naval fires network
    (NFN) program are prime examples of the type of transformational
    systems the Navy is fielding to advance our goal of universal
    situational awareness. We have made significant progress in CEC,
    interoperability, AADC, and NFN over the last year and, through the
    fiscal year 2003 budget submission, we are postured to continue to
    advance these revolutionary capabilities.

                       COOPERATIVE ENGAGEMENT CAPABILITY

        Cooperative engagement capability is a system, in the fleet today,
    which provides a revolutionary capability in force-level integration
    for area defense and ships self-defense. Given increased speed and
    kinematics of the evolving threat, CEC integrates existing sensors and
    weapons more effectively across the force. The sensor netting approach
    employed by CEC allows many sensors throughout the force to work
    together to form a single composite track for each target in the battle
    space. As a result, CEC delivers significant improvement in force level
    detection and tracking, including improved track identification (ID)
    continuity, improved track accuracy, and improved situational awareness
    for all ships and aircraft in the force. Additionally, because CEC
    generates real-time fire control quality tracks, it brings significant
    engagement improvements including increased depth of fire, engagement
    of targets not held by own ship sensors, increased reaction time and
    maximized performance against the most stressing targets. As the only
    system based on shared fire control quality information, CEC provides
    the cornerstone to build the single integrated air picture (SIAP). This
    capability not only contributes to the ship self-defense of the
    platforms on which it resides, it also protects all naval units by
    ``buying back'' battle space, the capability of greatest value in
    countering a fast moving threat. It provides time for alertment,
    decisions and actions and allows our weapons to shoot to the maximum
    flight capability of the missile rather than to the limit of one ship's
    sensors.
        Over the past 2 years, CEC has been rigorously tested to ensure
    full integration across current fleet combat systems and data links.
    The system successfully completed the largest operational evaluation
    conducted by the Navy to date in the spring of 2001 and was found both
    operationally effective and operationally suitable by the Commander,
    Operational Test and Evaluation Force. This highly robust and
    operationally realistic test series consisted of 10 underway test
    events over 2 years involving 10 warships, hundreds of aircraft sorties
    in support of challenging test scenarios, and nearly 30 missile
    firings.
        Subsequently, the Joint Requirements Oversight Council (JROC) has
    re-validated the system's operational requirements and we have
    continued to work closely with the Office of the Secretary of Defense
    to ensure compatibility with the evolving global information grid (GIG)
    architecture. The GIG architect has concurred that CEC is compliant
    with the 2003 GIG architecture although some work remains to ensure
    that CEC keeps pace as the GIG continues its evolution. Further, we are
    currently anticipating a favorable decision from the Defense
    Acquisition Board (DAB) that approves full-rate production of our
    surface-based CEC units and continues low rate initial production of
    the airborne units for the E-2C Hawkeye aircraft.
        The way ahead for this vital system consists of continuing the
    spiral development of CEC as we increase the number of cooperating
    nodes in the CEC sensor network (potentially including joint assets);
    examine CEC's potential as the foundation of the joint composite
    tracking network that will facilitate the development of a single
    integrated air picture (SIAP); ensure continued compliance with the GIG
    architecture; and examine alternative, potentially bandwidth-reducing,
    technologies. In short, Navy stands ready to field a system that is and
    will remain:

            - Operationally effective
            - Operationally suitable
            - GIG-compliant
            - JROC-validated

    CEC is a dramatic improvement in area and ship self-defense for
    multiple ship classes.
        There is also growing international interest in this revolutionary
    new capability. This past summer, the U.S. Navy signed a memorandum of
    understanding with the United Kingdom that will ultimately lead to CEC
    being installed on Royal Navy frigates and destroyers. Additionally,
    other Allied Nations including Australia, Spain, Italy, Germany,
    Netherlands, and Japan have also expressed interest in CEC. Specific
    requests by these nations will be handled on a case-by-case basis.
        The CEC program has been a success story this year. The John F.
    Kennedy battle group deployed with CEC last month and we added
    significant funding to accelerate fielding and further development of
    CEC and sensor netting technologies in this budget cycle. This
    revolutionary capability will now be installed in most battle groups by
    fiscal year 2007.

             FORCE INTEROPERABILITY--DISTRIBUTED ENGINEERING PLANT

        The force-level integration generated by systems like CEC provides
    vast improvements in ship self-defense by buying back battle space that
    allows extra time for decisions and actions in today's challenging ASCM
    environment. The integration of multiple systems in a force with
    different levels of capability creates a challenge to ensure
    interoperability between all the units in a force. The objective of the
    Navy's force interoperability program is to engineer interoperability
    into our systems. Improved interoperability brings significant
    warfighting capability through increased situational awareness,
    enhanced weapons coordination, and reduced fratricide, enabling our
    combat systems to operate at their full design performance level and
    contributing to the development of a SIAP. This is critical to close-in
    ship self-defense but even more critical to timely engagement of the
    ``archer'' vice the ``arrow'', the ultimate ship self-defense
    objective.
        The Navy's force interoperability program is divided into three
    functional areas: assessments, readiness, and warfare systems
    engineering. The foundation of this effort has been the establishment
    of a series of a land-based test sites that support testing of
    essential fleet combat system upgrades before they are introduced in
    the fleet. By networking these sites together into a distributed
    engineering plant (DEP), we can conduct rigorous force wide
    interoperability testing and engineering among different combat
    systems, including the examination of specific battle force
    configurations, before the software is deployed at sea. The DEP
    continues to evolve, leveraging existing engineering infrastructure to
    transform the Navy. Since 1998, when the Navy initially linked existing
    land-based combat system facilities together to conduct realistic
    battle force interoperability testing, the program has evolved to
    include tailored interoperability testing for every deploying battle
    group. This testing has enabled the development of interoperability
    measures of effectiveness (MOEs), and the ability to relate these MOEs
    to operational performance in terms of extended warfighting battle
    space.
        The Navy has initiated the correction of the prioritized
    interoperability deficiencies found during DEP testing. Beginning in
    fiscal year 2003, we have ``closed the loop'' from identification of
    deficiencies, to collection and analysis of data, to identification of
    root causes, to implementation and follow-up testing of prioritized
    fixes which yield the greatest warfighting return on our investment.
        As we draw lessons from the interoperability testing of today's
    combat systems, we are simultaneously feeding the results into the
    development of tomorrow's combat system baselines. As we explore the
    transformation of the existing Aegis Baselines into an open
    architecture, distributed processing combat system, we intend to build
    these interoperability enhancements into our new systems from the
    ground up. Following the successful transition to a complete COTS
    computing environment on our new construction Aegis DDGs, Aegis
    baseline development will introduce an open architecture, high
    performance, interoperable and network ready software architecture,
    which will eliminate many of the interoperability limitations of
    today's combat systems.
        As the DEP has continued to mature and expand, it has become
    evident that the role of this powerful engineering tool must be
    expanded to support the Navy acquisition process, in addition to the
    deploying forces. From its inception in 1998 through 2000, the full
    efforts of the DEP remained focused on battle group interoperability
    testing. However, beginning in 2001, the DEP team established new
    initiatives--in addition to full battle group testing operations--to
    help program managers find and resolve problems earlier in the
    acquisition cycle. In fact during 2001, for the first time, 45 percent
    of DEP utilization was dedicated to supporting development work. For
    example, the cooperative engagement capability program, which has
    rapidly become the DEP's second largest user, has been able to test 46
    percent of CEC's interoperability requirements in the DEP,
    substantially reducing requirements to do live shipboard testing, and
    therefore shifting this burden from the fleet to the shore
    infrastructure.
        The fiscal year 2003 budget submission continues to support this
    most important interoperability testing and engineering development
    effort.

                             JOINT INTEROPERABILITY

        In addition to the Navy's force interoperability program, last year
    the Joint Requirements Oversight Council (JROC) established the Office
    of the SIAP System Engineer, modeled after the Navy's SIAP Engineer
    effort, to begin working interoperability issues across the Services.
    The office has been established as a Navy-led joint program office,
    whose initial focus will be resolving interoperability issues currently
    existing in the tactical data links used by all the Services. Navy
    remains closely aligned with this joint initiative as we move forward
    in addressing interoperability issues.

                          COMMAND AND CONTROL SYSTEMS

        Installing new or improved weapons systems and integrating them at
    the shipboard and force level will dramatically improve naval forces
    ability to project power and to provide area and ship self-defense. New
    and innovative command and control systems will significantly enhance
    warfighting effectiveness by reducing confusion and coordinating the
    efforts of all the units in a force. Examples of such command and
    control systems are the area air defense commander program and the
    naval fires network program which have both been accelerated over the
    last year and are fully supported in the fiscal year 2003 budget
    submission.

                           AREA AIR DEFENSE COMMANDER

        The area air defense commander (AADC) program will provide naval
    forces significant new joint integrated air defense (JIAD) capability
    and buy back more battle space and decision time. The objective of AADC
    is to provide an essential joint air defense planning and execution
    tool. AADC provides a means to conduct detailed and comprehensive air
    defense planning, including air space deconfliction and the optimal
    stationing of air defense and theater ballistic missile defense assets.
    AADC is being developed to be fully interoperable with the Army and Air
    Force air defense planning systems. Through high-resolution displays
    and robust communications, the AADC module also provides the capability
    to serve the air defense commander through the entire range of conflict
    from minor crisis to major theater conflict.
        In the wake of the September 11 attack, we identified AADC as one
    of the systems that would better enable our forces to conduct forward-
    deployed operations and homeland defense and re-baselined the program
    to develop and deliver a system to the fleet today vice the scheduled
    fiscal year 2005 introduction date. Through this realigned program, we
    installed one unit this year on U.S.S. Blue Ridge and intend to
    continue installs into next year and across the FYDP, significantly
    accelerating the delivery of this revolutionary warfighting capability
    to the fleet and, potentially, joint forces. This rapid fielding
    strategy increased planned unit procurements by an additional 6 units
    to a total of 17 units across the FYDP.

                              NAVAL FIRES NETWORK

        Within the specter of command and control enhancements, the naval
    fires network (NFN) was developed to provide the network-centric
    infrastructure and processing capability (software and hardware)
    required to support CVW strike, surface strike, land attack,
    expeditionary fire support, and anti-submarine missions in support of
    joint and coalition forces. NFN will be integrated into all phases of
    the time-critical strike/targeting (TCS/TCT) process, connecting the
    sensor grid, information grid, and weapons grid. NFN's overarching
    goal, integrated with the distributed common ground station (DCGS)
    architecture, is to collect, process, facilitate fusion of and
    disseminate data from a variety of disparate, geographically-separated,
    dissimilar joint sensors (including space-based sensors) and provide it
    to the warfighting community in a timely enough manner to identify,
    target, engage (re-engage, if necessary), and destroy enemy targets.
    NFN's multiple sources of fused intelligence, distributed throughout
    the battle-space, ultimately builds commanders' confidence,
    facilitating rapid decision-making. This common picture, the basis for
    engagement decisions, is electronically linked to mission planning and
    engagement systems. NFN digitally connects sensors, through decision
    makers, to shooters. This provides a TCS/TCT capability and enhances
    our deliberate targeting ability in every area of warfare including
    ship self-defense. NFN provides the commander with time critical
    intelligence, yielding enhanced situational awareness and therefore,
    better force posturing for self-defense.
        Using the Defense Emergency Response Fund (DERF) provided by
    Congress, we have accelerated deployment of this vital system. Our
    budget request ensures continued rapid deployment of this significant
    situational awareness and time critical targeting capability.

              MARITIME STRATEGIC FIRES--PROJECTING PRECISION FIRES

        Our Navy continues to be a ready and relevant offensive maritime
    force, with increased emphasis on precision strike and naval fires as a
    vital, emerging mission area to support joint and expeditionary
    warfare. We will continue to develop our long-range precision strike
    arsenal, and be capable of conducting precision land attack in concert
    with joint and coalition forces.
        This naval fires mission area includes several existing and new
    capabilities, such as long-range strategic precision strike provided by
    the Tomahawk cruise missile, and precision naval surface fire support
    to Marines and other ground forces delivered by a combination of gun
    systems.
        Our surface naval fires programs are addressing Navy, Marine Corps,
    and Army needs for today, tomorrow, and the future. Naval fires include
    a combination of guns, projectiles, and missiles to meet expeditionary
    maneuver warfare and Army transformation force requirements. These gun
    and missile capabilities complement each other and together will
    continue to improve and meet Marine Corps and Army requirements in
    terms of range, lethality, accuracy, and responsiveness.

                                    TOMAHAWK

        Since the success of the initial 1991 Operation Desert Storm
    firings, Tomahawk has transformed our Nation's tactical approach to
    modern warfare. Today, Tomahawk is a vital CINC asset--the Nation's
    premier deep strike weapon. Tomahawk provides long-range, highly
    survivable, unmanned, all-weather precision strike capability from
    warships at sea. As a result, the Nation has come to rely on Tomahawk
    to meet an ever expanding number of key warfighting mission
    requirements, including suppression of enemy air defenses, destruction
    of vital C\4\I nodes, proportionate and surgical destruction of
    critical warfighting infrastructure, and engagement of time-critical
    targets.
        With an average of over 100 Tomahawk missiles expended each year in
    conflict, Congress approved a 1998 reprogramming of existing Tomahawk
    funds to field the Tactical Tomahawk (Tactom) weapon system--the
    follow-on to the Block III missile. Applying modern manufacturing
    technologies to Tomahawk's core competencies, Tactical Tomahawk reduces
    unit production cost ($569,000 in fiscal year 1999 dollars) while
    lowering life cycle cost and increasing the weapon's tactical
    flexibility. Tactom improves responsiveness and flexibility by
    providing an improved anti-jam GPS capability, a satellite data link,
    reduced mission load and alignment times, increased accuracy, improved
    reliability, the capacity to loiter and then engage on demand, an
    ability to flex via the data link to a preplanned alternate target or
    to a real-time emerging target, and a flexible design that can carry
    alternate payloads in the future. Tactom, the associated Tactical
    Tomahawk weapon control system (TTWCS) and the Tomahawk planning system
    (TPS) will ensure Tomahawk continues to expand in capability to meet
    tomorrow's land attack warfighting challenges head on.
        Commencing with the first Tomahawk wartime expenditures during
    Operation Desert Storm in 1991, the Navy has fired more than 1,100
    Tomahawk missiles in combat. Most notably, the Navy fired over 600
    missiles in fiscal year 1998/1999 during Operations Desert Fox and
    Allied Force and recently, more than 80 Tomahawk missiles in the first
    phase of Operation Enduring Freedom. Approximately 90 percent of all
    Tomahawk missiles expended in Operations Desert Fox and Allied Force
    and 70 percent fired in Operation Enduring Freedom were launched from
    surface ships. These surface ship expenditures represent approximately
    20 percent of the total Tomahawk inventory produced to date.
        As a direct result of the high combat expenditures in Operations
    Desert Fox and Allied Force--and in recognition of Tomahawk's
    increasingly important contribution towards achieving our warfighting
    objectives--Congress provided a fiscal year 1999 emergency supplemental
    of $431 million. This supplemental funded the conversion of 424 Block
    II missiles to the preferred Block III GPS variant as well as the
    remanufacture of 200 Tomahawk anti-ship missiles (TASM) to the Block
    III configuration. The induction of these missiles into the depot
    commenced October 1999. This effort, known as REMAN I, will complete in
    May--7 months early.
        Earlier this year, as a result of actual and anticipated Enduring
    Freedom expenditures, a second conversion/remanufacturing effort was
    funded with $350 million from the fiscal year 2002 emergency
    supplemental. This effort, known as REMAN II, will convert the
    remaining Block II missiles and will remanufacture additional TASM and
    former surface nuclear Tomahawks missiles. REMAN II will deliver the
    first of 450 additional Block III missiles in January 2003, completing
    approximately 15 months later. Approximately 330 TASM and former
    surface nuclear missiles will remain as candidates for a third
    remanufacture effort if funding becomes available this year or next.
        In the wake of the 11 September attack, we also increased the
    Tactom procurement profile. We added 362 missiles to the 1,353 missiles
    funded by the fiscal year 2002 profile. The PB03 profile now procures
    1,715 Tactom missiles through the FYDP. The first of these Tactom
    missiles delivers in May 2004.
        We are also teaming with the Defense Threat Reduction Agency to
    field a Tactical Tomahawk penetrator variant (TTPV). TTPV will address
    a substantial portion of the weapons of mass destruction hardened and
    deeply buried target set. The initial buy is programmed for 130
    missiles, with an IOC scheduled for fiscal year 2005.
        The two Block III remanufacture efforts, coupled with the increased
    PB03 Tactom missile procurement profile, will increase missile
    inventory to approximately 2/3 of the Navy's Tomahawk requirement by
    fiscal year 2009--assuming no future expenditures. While this approach
    of combining Remans and Tactom is clearly the best way ahead, current
    funding does not yet fulfill warfighting requirements.
        Just as Tomahawk has provided the national strike weapon, Tactical
    Tomahawk, with its capabilities for loiter and in flight retargeting,
    will also provide a significant land attack weapon, especially suited
    for targets beyond the 100 nm range of future guns.

                               NAVAL GUN SYSTEMS

        The Navy's approach for tomorrow's fleet is to develop a set of
    NSFS weapon systems to install in existing Aegis ships. These weapon
    systems include the 5,,/62-caliber gun and the extended range guided
    munitions (ERGM). These NSFS capabilities are expected to meet USMC
    requirements in accuracy, lethality, and responsiveness.

                               5,,/62-CALIBER GUN

        The 5,,/62-caliber gun is already installed in eight Arleigh Burke-
    class ships, commencing with U.S.S. Winston S. Churchill (DDG-81). The
    gun was successfully tested during a firing exercise in DDG-81 in fall
    2001. This new gun will provide significantly better reliability,
    require less maintenance, and will fire the ERGM to an objective range
    of 63 nm.
        As mentioned above, the 5,,/62 gun is already in the fleet on
    recently commissioned DDG-51 class ships and the fiscal year 2003
    budget request supports installation of 5,,/62 guns on all following
    DDGs. 5,,/62 installation is also planned for some Ticonderoga-class
    cruisers as part of cruiser conversion.

                     EXTENDED RANGE GUIDED MUNITIONS (ERGM)

        ERGM has overcome significant technical challenges and stands as a
    most important naval surface fires system program. A December 2001
    controlled vehicle test shot yielded successful rocket motor
    performance and proper functioning of the ERGM's guidance package which
    uses GPS to guide to target. Testing continues during 2002.
        Navy made a recent decision to change ERGM's payload to a unitary
    warhead vice the originally planned submunitions, improving lethality
    against the target set. The ERGM IOC will shift to fiscal year 2006 to
    support development of the unitary warhead, and will provide precision
    fires in support of expeditionary maneuver warfare. ERGM extends gun
    ranges to 63nm--a significant improvement over the 13nm range afforded
    by conventional 5'' rounds.

                          ADVANCED LAND ATTACK MISSILE

        To meet the full set of USMC NSFS requirements,--an AoA for an ALAM
    was conducted. We envision that ALAM will be fielded in DD(X) as a
    spiral development and may be backfit in our current Aegis ships, and
    potentially submarines. The AoA provided Navy and OSD leadership with
    potential technical options. We anticipate ALAM will completely address
    the full NSFS target set, including mobile/moving targets, and hardened
    and deeply buried targets. Competing priorities precluded inclusion of
    ALAM in the fiscal year 2003 budget submission. Navy is addressing the
    initiation of an ALAM program in the fiscal year 2004 budget
    development process. As an interim effort to meet near term NSFS
    requirements, the fiscal year 2003 budget submission fully funds the
    Tactical Tomahawk program, providing the most efficient balance for
    strike and NSFS requirement.

                           NAVAL FIRES CONTROL SYSTEM

        In order to safely and effectively employ long-range, precision-
    guided weapons in support of complex amphibious and joint land battle
    operations, we are developing the naval fires control system (NFCS).
    NFCS is a battle management system that will automate NSFS functions
    and be the enabler for surface land attack in net-centric warfare. NFCS
    will support mission planning for the 5,,/62-caliber gun, ERGM, as well
    as conventional rounds, and support evolving expeditionary warfare
    capabilities, tactics, and doctrine. NFCS will be interoperable and
    consistent with joint C\4\ISR systems. NFCS ties the Navy into the
    digital battlefield, and will be completely interoperable with the Army
    and Marine Corps' advanced field artillery tactical data system
    (AFATDS). NFCS will IOC in fiscal year 2003. The first NFCS suite was
    installed in U.S.S. Lassen (DDG-82) in September 2001.
        The fiscal year 2003 budget submission supports installation of
    NFCS on DDG-81-108, and selected CGs as part of cruiser conversion.

                           FUTURE NAVAL FIRES SYSTEMS

        For the future, DD(X) will have the capacity to carry the variety
    and volume of offensive, precise firepower, which enable our Marine
    Corps and light mobile Army forces to complete their missions. These
    systems include the Tactical Tomahawk (Tactom) and the advanced gun
    system (AGS), firing the long-range attack projectile (LRLAP) to
    distances of 100 miles. DD(X) will also have the growth potential to
    include the ALAM. DD(X)'s ability to deploy a high volume of precision-
    guided munitions will provide joint force commanders with significantly
    improved ranges, accuracy, volume, firing rates, and response times
    compared to current-generation ships.
        The 155mm gun, with fully automated ammunition handling system and
    a family of munitions/propelling charges, is specified to achieve
    ranges of up to 100 nautical miles. AGS will provide high rate-of-fire
    (approximately 12 rounds per minute) with a magazine capacity
    sufficient in size to meet USMC operational requirements. The AGS
    design will provide the basis for future naval gun systems.

              MARITIME STRATEGIC DEFENSE--PROJECTING AREA DEFENSE

        Building on the ``backbone'' of CEC to network fire control quality
    data throughout the battleforce and Standard missile enhancements,
    surface combatants will be able to conduct lethal engagements of large
    numbers of cruise missiles and aircraft over water around the sea base
    and, in selected cases, over land around joint forces ashore. Combining
    the track data from CEC with that of other services in a joint single
    integrated air picture will permit profound advances in tactical
    decision speed and accuracy.
        To achieve synergy at a local level, combat systems are integrated
    at a shipboard level by systems designed to network sensors and systems
    within the lifelines. Programs that support this shipboard-level
    integration effort include the ships self-defense system (SSDS) and the
    Aegis Weapons system. Combined with the Standard missile program, data
    link systems and CEC, these cutting edge combat systems form the basis
    for area air defense that is expanding to the kinetic range of our
    missiles.

                          JOINT INTEGRATED AIR DEFENSE

        The readiness of naval forces to perform joint integrated air
    defense (JIAD) missions remains a central focus for surface warfare.
    The objective of JIAD is to ensure assured access and projected defense
    as our military forces move essential combat and logistic forces
    through the littoral and into the sea and air ports of debarkation
    (SPODs and APODs). The Navy's forward presence, strategic and tactical
    mobility, and ability to conduct sustained sea-based combat operations
    form the basis for our significant contributions to JIAD and are
    essential to support U.S. national strategy.
        Today's naval forces remain positioned to lead the JIAD effort with
    systems such as CEC, naval fires network (NFN), and area air defense
    commander (AADC). Our ability is also tied to the robust warfighting
    capability inherent in combat systems such as the Aegis weapons system
    and the ship self-defense system which continue to pace the emerging
    threat, in parallel with focused major modernization programs such as
    cruiser conversion, DDG-51 shipbuilding and force interoperability
    enhancement programs.

                        SHIP SELF-DEFENSE SYSTEM (SSDS)

        The ship self-defense system (SSDS) is the combat system of the
    future for all Nimitz class aircraft carriers and LSD-41, LHD-1, and
    LPD-17 ship classes. SSDS is a physically distributed, open
    architecture computer network consisting of commercially available
    hardware. It includes operator consoles using the Navy's AN/UYQ-70
    standard display family for human-machine interface, commercially
    available circuit cards and fiber optic cabling. SSDS, significantly
    expands the capability of both advanced combat direction system (ACDS)
    Block 0 and Block 1, performing the integration function for detection
    and engagement as well as performing automated detection and quick
    reaction functions, emphasizing performance in the littoral
    environment. SSDS also serves as the integration point for the
    cooperative engagement capability (CEC) and the tactical data links
    (TADILS) on these ships.
        Following operational requirements approval in 1995, SSDS
    development began for the LSD-41 class ships. Designated SSDS Mk 1,
    this system provided integration and automated operation of the combat
    system elements of these ships, including the SPS-49 radar, SLQ-32
    electronic warfare system, close-in weapon system, and the rolling
    airframe missile Block 0. Following a successful OPEVAL in 1997, the
    system was approved for full rate production, and has subsequently been
    fielded on all 12 ships of the class, providing them with a robust
    anti-ship cruise missile defense capability.
        After the successful deployment of SSDS Mk 1, the Navy began the
    development effort to expand the SSDS system to meet the evolving
    requirements of aircraft carriers and large deck amphibious ships.
    Designated SSDS Mk 2, this system will integrate additional weapons and
    sensors including the SPS-48E air search radar, the SPQ-9B ASCM radar,
    re-architectured NATO Sea Sparrow missile system (NSSM), and RAM Block
    1. Additionally, SSDS Mk 2 provides the integration of the cooperative
    engagement capability and the tactical data links (TADILS) for these
    ships, providing a powerful ASCM capability as well as enhanced command
    and control capabilities to embarked Battle Force commanders.
        The Navy has increased its investment in the SSDS program to ensure
    complete combat system integration, testing, and certification for
    U.S.S. Ronald Reagan (CVN-76) and U.S.S. San Antonio (LPD-17). These
    new construction ships will be the first built with the SSDS Mk 2
    combat system, ensuring their ability to pace the increasingly lethal
    anti-ship cruise missile threat. Additionally, funds were added to
    equip land-based training sites on both coasts as well as to initiate a
    technology refresh process for this COTS-based system.
        The fiscal year 2003 budget submission adds funds to accelerate
    fielding of this important combat system.

                                  AEGIS SYSTEM

        The Aegis weapons system brings immense warfighting capability to
    defeat the emerging threat and represents the backbone of the surface
    fleet. Over 50 percent of today's surface combatants are Aegis ships
    and by 2010, that figure will grow to 75 percent. Additionally, the
    profound role of Aegis lies in new advances in warfighting capability,
    including TBMD, CEC, and expanded land attack capabilities, which will
    all be introduced through the Aegis combat system.

               AEGIS BASELINE CONSOLIDATION AND OPEN ARCHITECTURE

        As the number of Aegis ships grows and new capabilities are
    introduced, the complexity of the combat system is increased, and we
    are faced with rising life-cycle costs. If not addressed, these costs
    have the potential of eroding warfighting readiness. Additionally, a
    threat to Aegis warfighting readiness stems from costs necessitated by
    replacement of COTS computing hardware. As industry has incorporated
    new hardware to meet the advanced computing requirements of our new
    Aegis combat systems, the myriad of computer boards and processors
    needed to drive the sophisticated Aegis combat system have become
    increasingly COTS based. Because this COTS hardware technology
    continuously changes as the marketplace rapidly introduces new
    computing technology, we must conduct COTS refresh of our shipboard
    systems every 2 to 5 years on average to avoid component obsolescence.
    Available data indicates that these COTS refreshes will come at a cost
    of $60 to $75 million per Aegis baseline. This cost is unavoidable due
    to the extensive research and development effort required to integrate
    COTS hardware with other existing Aegis combat system software and
    hardware interfaces.
        The surface Navy is exploring new ways to mitigate these spiraling
    life-cycle costs. One way that offers the most potential is
    transitioning the Aegis combat system to an open computing system
    architecture. Open architecture would transition the existing Aegis
    centralized software and interfaces to a software design using a modern
    commercial language and software development techniques. Once in an
    open architecture configuration, changes to the Aegis combat system
    hardware and software, whether required due to component failure or
    age, or to support expansion of the system to perform new warfighting
    capabilities, could be done much more quickly and cheaply than with
    today's legacy architecture. In a real sense, open architecture is the
    key to maintaining the warfighting readiness of the Aegis combat
    systems over the life of these ships. Additionally, as we explore the
    transition of the existing Aegis baselines into an open architecture,
    distributed processing combat system, we intend to build in
    interoperability enhancements from the ground up, as well as
    integrating new capabilities to fully enable the transformation to
    network-centric warfare operations of the future.

                            SPY-1D (V) RADAR SYSTEM

        The AN/SPY-1 radar system is the primary air and surface radar for
    the Aegis combat system installed in the Ticonderoga (CG-47) and
    Arleigh Burke (DDG-51) class warships. It is a multi-function, phased-
    array radar capable of search, automatic detection, transition to
    track, tracking of air and surface targets and supporting missile
    engagements. The third variant of this radar, AN/SPY-1D(V), known as
    the littoral warfare radar, will improve the radar's capability against
    low altitude, reduced radar cross-section targets in heavy clutter
    environments and in the presence of intense electronic countermeasures.
    SPY-1D(V) will be fielded on DDG-91 and follow-on DDGs. It will be
    delivered to the Navy in October 2003. SPY-1D(V) will go through land
    based developmental and operational testing during the summer of 2003,
    followed by shipbuilder trials in the fall. When netted with other
    ships through the cooperative engagement capability system, this radar
    will improve the self-defense capabilities of all the ships in the
    network.

                           FUTURE AIR DEFENSE RADARS

        The multi-function radar (MFR) and the volume search radar (VSR)
    are crucial stepping-stones to the future theater air and missile
    defense (TAMD) radar and will allow us to neck-down our family of in-
    service radars and illuminators. As an integrated radar suite, MFR/VSR
    will provide radar functionality for a wide range of ship classes at
    the best overall value to the Navy. The suite will generate significant
    space and weight savings and reduce shipboard radar signature.

                              MULTI-FUNCTION RADAR

        Before the fleet can engage with weapons systems, we must first
    detect hostile aircraft and missiles. Among the detection systems under
    development in the DD(X) program is the multi-function radar/volume
    search radar (MFR/VSR). This radar suite provides a high power, solid
    state, wideband (X-Band for MFR and L-Band for VSR) active phased array
    radar system suite optimized for the littoral mission. It will replace
    up to nine in-service radars and illuminators, while providing
    autonomous horizon search, long-range volume search, and fire control
    tracking. MFR is also designed for surface search, periscope detection,
    and navigation. MFR will enable counter-fire support, electronic
    protection, and air traffic control/air intercept control functionality
    for the close approach control function required of air capable ships.
    As the primary ship defense AAW radar element of the host combat
    system, the MFR will conduct automatic detection, ID, tracking, and
    illumination of low altitude anti-ship cruise missiles in adverse
    (multi-path, lobing, and ducting) propagation conditions typically
    found in littoral environments. It will provide missile uplink and
    terminal homing illumination for ESSM and SM, as well as non-
    cooperative target recognition (NCTR) and kill assessment. MFR brings
    all this capability to the combat system in littoral clutter, heavy sea
    state, rain, and difficult radar propagation environments. It will do
    this with less manpower, lower life cycle costs, and a higher
    operational availability than current systems. MFR is designed to be
    scalable for possible future applications and, along with VSR, has
    application for a wide range of ship classes.

                              VOLUME SEARCH RADAR

        The volume search radar (VSR) is an L-band active phased array
    radar using COTS based technology. It will provide long-range
    situational awareness with above horizon detection, and air control
    (marshalling) functionality. The VSR will replace the functionality of
    today's SPS-48E, SPS-49, and SPN-43 radars. Additionally, because it
    will be a non-rotating phased array radar, VSR will provide the
    required track revisit times to deal with fast, low/very low
    observable, high diving missile threats as well as reducing ships
    signature. VSR will provide cueing for MFR to conduct functions above
    the horizon. It too is designed to reduce ship manning and life cycle
    costs.

                             STANDARD MISSILE (SM)

        The Standard missile (SM) is a primary defense-in-depth weapon in
    the ship self-defense family of capabilities, providing hard kill self-
    defense at two levels. At the area air defense level, SM-2 Block IV can
    be used at extended range to engage the ASCM carrying aircraft. Closer,
    but still at significant range, SM-2 Block III, IIIA, and IIIB variants
    of the missile have significant ASCM capability as well as improved
    capability against surface targets. These missiles, historically
    limited in performance to the range of their own ship organic sensors,
    are now, in conjunction with cooperative engagement capability (CEC),
    able to engage targets at considerably greater ranges, markedly
    enhancing defense-in-depth and multiple engagement opportunities.

                           EXTENDED AREA AIR DEFENSE

        The Navy has an ongoing effort to deploy next-generation extended-
    range AAW capability which adds a robust outer layer to fleet air
    defenses. The SM-2 Block IV is a kinematics improvement of the proven
    Standard missile family, incorporating a thrust-vector-controlled
    rocket booster, a more robust airframe, and guidance and control
    modifications for improved altitude/range/cross-range coverage against
    high-performance, low radar cross-section threats in an electronic
    countermeasures (ECM) environment.
        The SM-2 Block IV has been delivered to the fleet and is presently
    deployed in small quantities to the Arabian Gulf and Mediterranean.
    Block IV production was terminated at the end of low rate initial
    production (LRIP) in favor of Block IVA development.
        SM-2 Block IVA, cancelled in December 2001, was to have added
    endoatmospheric theater ballistic missile defense (TBMD) and improved
    air defense capabilities to the proven Block IV baseline. In the
    Acquisition Decision Memorandum which cancelled the Navy Area TBMD
    program and the SM-2 Block IVA, the Under Secretary of Defense for
    Acquisition, Technology and Logistics recognized a continuing
    requirement to ``address the need for extended-range anti-air warfare
    capability against cruise missiles and aircraft in light of this
    cancellation.'' While the details of the extended-range advanced AAW
    follow-on missile are still being defined, this missile could build on
    the proven airframe and propulsion stack developed for the SM-2 Block
    IV/IVA missiles.

                         STANDARD MISSILE--ASCM DEFENSE

        A robust area air defense missile is a prerequisite for maintaining
    forward naval presence, operating in the littorals, and projecting and
    sustaining U.S. forces in distant anti-access or area-denial
    environments. The Standard missile-2 (SM-2) is the Navy's primary
    weapon for anti-ship missile defense and theater air warfare. Deployed
    SM-2 Block III, IIIA, and IIIB configurations are all-weather, ship-
    launched, medium-range surface-to-air missiles employed by all Aegis CG
    and DDG ships.
        Each of the blocks is progressively more capable against more
    challenging threats and in more difficult electronic countermeasures
    (ECM) environments. SM-2 variants employ inertial mid-course guidance
    with command updates from the shipboard fire control system with an
    ECM-resistant monopulse receiver for semi-active radar terminal homing.
    Block IIIA features significantly enhanced performance and lethality
    against sea-skimming threats due to a new warhead and fuze design in
    addition to enhanced trajectory shaping. Block IIIB builds on the Block
    IIIA improvements by adding an infrared (IR) guidance mode capability
    to improve performance in a stressing electronic countermeasures
    environment. Blocks IIIA/IIIB will be the heart of the SM inventory for
    the next decade.
        Block IIIB is the only variant presently in production for the U.S.
    Navy, although Block IIIA is still produced for foreign military sales.
    Block IIIBs are being produced as new all-up rounds, and as upgrades
    from older Block II and III missiles. The fiscal year 2003 budget
    submission for SM-2 Block IIIB begins an increase in SM production
    which promises to nearly double procurements through the FYDP compared
    with fiscal year 2002 projected levels.
        The loss of the SM-2 Block IVA development poses a significant
    challenge in achieving an extended-range air defense capability for
    naval forces which will have to be addressed in the fiscal year 2004
    budget submission.

                               SHIP SELF-DEFENSE

        Ship self-defense is integral to a layered defense concept that
    evolves as naval assets move toward and establish presence and sea base
    in the littorals. Force defense starts with preemptive strikes by
    airborne assets such as Tomahawk cruise missiles and strike aircraft to
    neutralize the threat. As ships move closer, defense migrates to
    defensive aircraft and area defense assets such as Aegis cruisers and
    destroyers. Finally, as naval assets move in closer to the threat,
    protection is based on ship self-defense systems. Ship self-defense is
    a fleet wide requirement and all ship types, including aircraft
    carriers, surface combatants and amphibious ships, are included in our
    strategy. Ship self-defense for anti-submarine warfare and mine warfare
    will be discussed in the Undersea Warfare section below so this
    discussion will focus on systems that support self-defense and close-in
    defense of naval assets against aircraft, the anti-ship cruise missile
    (ASCM) threat and small fast surface combatants.

                    ANTI-SHIP CRUISE MISSILE (ASCM) DEFENSE

        Our ASCM defense strategy involves enhancing the capabilities of
    our existing ship self-defense weapons and introducing new ship self-
    defense systems while simultaneously integrating these systems within
    the ship and among ships throughout the force to achieve exponential
    levels of improvement in our capabilities. All three levels of
    integration--stand alone system, ship-level integration and force-level
    integration--are important and are being advanced in this year's budget
    submission. Current and near-term programs will be discussed first at
    all three levels of integration before moving on to a general
    discussion of future programs.

                  SHIP SELF-DEFENSE WEAPONS SYSTEMS--HARD KILL

        Hard kill systems are designed to detect, engage, and destroy ASCMs
    or small surface craft. The Navy significantly increased funding for
    hard kill ship self-defense weapons in the fiscal year 2003 budget
    request. A common theme in our effort to increase our hard kill
    capabilities was to ramp up funding of missiles to achieve economic
    order quantity as soon as feasible. This allows us to buy missiles more
    efficiently, meaningfully address our ship fill requirements and
    optimize the use of available funds. Specific examples of this
    investment are explained below.

                         ROLLING AIRFRAME MISSILE (RAM)

        In terms of capability and performance, the RAM is our premier
    close-in hard kill system. RAM is deployed aboard 39 U.S. ships,
    including LHAs, LHDs, LSDs, DDs, and CV/CVNs and is planned to be
    installed aboard LPD-17 class ships. The RAM Block 0 missile is a
    highly capable missile with low altitude capability and dual RF/IR
    guidance that does not require fire control illuminators. RAM Block I
    adds an IR all-the-way capability and a helo/air/surface (HAS) mode
    which should begin to enter the fleet next year. This HAS mode will
    allow RAM Block I to engage single engine propeller aircraft,
    helicopters, and small coastal patrol surface craft, while preserving
    point defense ASCM mission priorities. This missile has exceeded
    expectations since its successful operational evaluation (OPEVAL)
    aboard the self-defense test ship with a record of 181 successes out of
    192 firings, including 23 of 25 firings of the most advanced Block I
    missile. RAM Block 0 ships will complete upgrade to Block I over the
    FYDP. The RAM development program is an example of the benefit of
    international cooperation. It was developed in cost-effective
    partnership with Germany with the U.S. paying only 50 percent of the
    development cost.
        In the fiscal year 2003 budget submission, the procurement profile
    for RAM includes the purchase of both all-up round RAM Block I missiles
    and RAM alteration kits (converting existing Block 0 missiles to Block
    1) that will result in a significant increase in the RAM inventory over
    the FYDP.

                       EVOLVED SEA SPARROW MISSILE (ESSM)

        NATO Sea Sparrow, the forerunner of the ESSM, still provides ample
    self-defense against the significant preponderance of the near-term
    threat and is one of the world's most widely deployed ship self-defense
    systems. It is currently deployed on 50 U.S. ships and 110 other ships
    worldwide. It has an all-environment engagement capability against non-
    emitting, non-radiating, non-cooperative targets, including low-to-high
    speed surface vessels, rotary and fixed wing aircraft, and low radar
    cross-section anti-ship cruise missiles in a regime from sea level to
    an altitude of 25,000 feet.
        The ESSM has its roots in the NATO Sea Sparrow and is another
    example of the Navy's ability to take advantage of international
    cooperation to defray the cost of improving and upgrading hard kill
    self-defense systems. Ten Sea Sparrow Consortium nations have invested
    in the ESSM with the U.S. paying less than half the development costs.
    A new rocket motor, tail control, and warhead have improved the ESSM's
    speed, range, and lethality. ESSM is delivered in a quad-pack canister
    container of four missiles, with each quad-pack designed to be inserted
    into a single Mk 41 vertical launcher system (VLS) cell. Follow-on
    launcher options are being examined for application on non-VLS equipped
    ships (CVN/LHDs). The program has enjoyed a most successful year of
    development and testing, highlighted by highly successful land-based,
    live-fire testing completed last December at White Sands Missile Range.
    Low rate initial production approval was granted in early March.
        The fiscal year 2003 budget submission improves the fielding
    profile for ESSM, supporting installation on 17 ships across the FYDP,
    including CVN-77, cruiser conversions, and DDG backfit (DDG-79-84).
    fiscal year 2003 ESSM missile procurement was increased by nearly 50
    percent over fiscal year 2002 projections.

                     CLOSE-IN WEAPONS SYSTEM (CIWS) UPGRADE

        Another hard kill system that has matured to meet both the evolving
    threat and the changing tactical environment of the littorals is the
    CIWS. After nearly 20 years of CIWS service, the Navy continues to
    upgrade the CIWS to expand capability and improve maintainability and
    reliability. The Block 1A variant of CIWS, introduced to the fleet in
    1996, possesses new high order language computer hardware and software
    to counter maneuvering targets, providing increased firing rates,
    better receiver sensitivity, electromagnetic interference (EMI)
    hardening, and other significant improvements. In the fiscal year 2002
    budget and the fiscal year 2003 budget submission, the Navy has
    accelerated upgrade of the CIWS system to the Block 1B variant. CIWS
    Block 1B continues the evolutionary upgrade of this system with the
    incorporation of a thermal imager, an automatic acquisition video
    tracker, and a stabilization system for the tracker to provide threat
    detection both day and night. The thermal imager improves the accuracy
    of angle tracking information, and the fusing of radio frequency (RF)
    and electro-optical (EO) sensor systems provides a marked improvement
    in anti-air warfare (AAW) capability, including increasing the number
    of hits per engagement, extending initial hit range, and countering the
    effects of multi-path propagation. Block 1B is outfitted with an
    optimized gun barrel (OGB) and is able to fire enhanced lethality
    cartridges. Most notably, CIWS-1B brings a day and night surface mode
    capability (PSuM) to this proven air defense weapons system, allowing
    highly responsive engagement of threats such as small boats, jet skis,
    and floating mines out to a range of 4,000 yards.
        The fiscal year 2003 budget submission initiates a CIWS Block 1B
    procurement and conversion program geared to expeditiously deliver
    significantly enhanced ship self-defense and terrorism/force protection
    to our amphibious ships, surface combatants and carrier force. Our
    fiscal year 2002 and fiscal year 2003 funding plan is postured to
    ``jump start'' conversion of CIWS gun mounts to Block 1B and our
    objective is to provide Block 1B capability across the surface force
    within the FYDP.

                  SHIP SELF-DEFENSE WEAPONS SYSTEMS--SOFT KILL

        Layered force defense is made more robust by the combination of
    soft-kill systems with the hard kill systems. These systems defeat the
    ASCM electronic systems through jamming or deception. In the fiscal
    year 2003 budget submission the Navy significantly accelerated the
    fielding of the highly effective Nulka decoy system and funded moderate
    upgrades of the AN/SLQ-32 electronic warfare system while continuing
    development of the next-generation advanced integrated electronic
    warfare system (AIEWS).
      nulka off-board decoy/advanced integrated electronic warfare system
        Another success story of international cooperation to speed
    development and reduce unit cost is the Nulka active, off-board, ship-
    launched decoy system. Developed in cooperation with Australia
    (Australia paid half the development cost) to counter current and
    future radar-guided, anti-ship cruise missiles, Nulka employs a
    broadband radio frequency repeater mounted atop a hovering rocket
    platform. Nulka radiates a large, ship-like radar cross-section while
    flying a trajectory that seduces and decoys incoming ASCMs from their
    intended targets. Nulka is planned for installation in CG-52 through
    73, DD(X), DDG-51, LPD-17, and LSD-41 class ships. During recent
    testing Nulka provided impressive protection against multiple missile
    attacks.
        The fiscal year 2003 budget submission adds funding to upgrade 20
    FFGs with Nulka and continues funding for the installation on new
    construction ships and procurement for an ongoing backfit program
    throughout the fleet.

                  AN/SLQ-32 ELECTRONIC WARFARE SYSTEM UPGRADES

        The soft kill ``workhorse'' of the fleet is the AN/SLQ-32
    electronic warfare system. The AN/SLQ-32(V) electronic countermeasures
    set is a family of modular radar warning receivers and jamming systems
    that support the three anti-ship missile defense (ASMD) elements of
    detect, control, and engage. Ships use AN/SLQ-32(V) to detect and
    identify threat radars and, in later variants, to engage or jam these
    radars or deploy decoys against them. AN/SLQ-32(V) program started in
    1973 and resulted in five variants of AN/SLQ-32(V). Variants (V)1 and
    (V)2 are computer controlled, radar warning receiver systems that
    detect, sort, classify, identify, and indicate the presence of enemy
    and friendly radars. Variants (V)3, (V)4, (V)5 include all of the
    receive capability of variants V(1) and (V)2 and add integrated radar
    jamming equipment. All variants of the AN/SLQ-32(V) interface directly
    to the Mk 36 or Mk 53 decoy launchers. Through this interface, the AN/
    SLQ-32(V) controls and coordinates the launching of off-board
    countermeasure decoys. Off-board countermeasures include radio
    frequency (RF) chaff, Nulka (rocket-propelled, active jamming decoy),
    and infrared (IR) decoys.
        This year we have added funding to upgrade the AN/SLQ-32 to address
    shortfalls in the threat emitter library. Additionally, we are
    assessing new technologies developed in the advanced integrated
    electronic warfare system for potential insertion into the AN/SLQ-32
    system.

             ADVANCED INTEGRATED ELECTRONIC WARFARE SYSTEM (AIEWS)

        As with hard kill systems, soft kill systems also must pace the
    threat, which is becoming smaller, faster, lower, and more
    maneuverable. Next generation soft kill technologies are being explored
    in the AIEWS program. These technologies include an advanced display,
    improved emitter processing, enhanced combat system integration, a new
    receiver capability, and improved emitter identification. The AIEWS
    program has provided ``leading edge'' technology development that is
    providing an exceptional array of technologies with significant promise
    to improve surface electronic warfare capabilities in the legacy and
    future systems.

                            REDUCED RADAR SIGNATURE

        Reducing the radar signature of our combatants buys battle space by
    complicating threat targeting and acquisition. The DDG-51 class hull
    and superstructure were designed to significantly reduce radar
    signature to enhance survivability in an ASCM environment. Building on
    this concept which lowered the DDG radar cross-section to less than
    that of a FFG, the DD(X) is being designed to further reduce radar and
    IR signatures. Through integrated topside design (ITD) and new hull
    forms making use of the latest technologies including composite
    materials and aperture control, DD(X) is expected to achieve
    significant multi-spectral signature reduction that will greatly
    enhance self-defense and survivability in the littoral. Such signature
    reduction provides dramatic advantages on the battlefield but, more
    over, makes future self-defense systems markedly more affordable and
    practical to build.

                        SHIP SELF-DEFENSE SENSOR SYSTEMS

        Complementary to our hard kill and soft kill weapons programs, the
    Navy is developing and upgrading selected sensor systems to enhance
    ships self-defense. These systems include improvements to the AN/SPQ-9B
    search and gunfire control radar, the SPY-1D radar system, the Mk 46
    optical sight and the thermal imaging sensor system.

                          AN/SPQ-9B GUN CONTROL RADAR

        The AN/SPQ-9B is state-of-the-art detection system being developed
    to counter the emerging air and missile threats. AN/SPQ-9B detects and
    tracks low-flying, high speed, small radar cross-section anti-ship
    cruise missiles in heavy littoral clutter. It detects and tracks small,
    high speed maneuvering surface craft in sea clutter as well. The result
    is a significant extension of a ship's battle space to conduct self-
    defense engagements. The first unit was installed aboard U.S.S.
    Oldendorf (DD-972) and has met all requirements with impressive
    results. Its configuration is based on the original Naval Research
    Laboratory design with a parabolic reflector antenna that is larger and
    heavier than the antenna of the AN/SPQ-9A. In a mid-deployment report,
    Oldendorf stated AN/SPQ-9B was an excellent development in radar
    systems and the improvement of the 9B over the 9A was ``tremendous''
    noting ``the AN/SPQ-9B has become Oldendorf's premier radar.'' To
    provide installation flexibility, we have completed development of a
    rotating slotted array lightweight antenna designed to provide
    comparable performance to the antenna deployed on Oldendorf but with
    significantly lower topside weight.
        This year we have added funding to procure additional AN/SPQ-9B
    systems to backfit fleet units and will install AN/SPQ-9B on all
    cruisers as part of the cruiser conversion program.

                              MK 46 OPTICAL SIGHT

        Mk 46 optical sight system is a central component of the Mk 34 gun
    weapon system, providing electro optical/infrared detection and
    tracking capability in support of gun engagements. Ancillary uses
    include night/low visibility surveillance, navigation/ship handling,
    search and rescue, and in-port security. Over 40 Mk 46 optical sights
    are fielded in the DDG-51 class.
        In the fiscal year 2003 budget submission, we commenced the
    fielding of Mk 46 upgrades, including an eyesafe laser range finder, 3-
    5 micron FLIR, and azimuth motor upgrade, that will significantly
    enhance system reliability and performance. These warfighting
    improvements will provide Aegis DDGs increased ship self-defense and
    force protection capabilities.

                         THERMAL IMAGING SENSOR SYSTEM

        The thermal imaging sensor system (TISS) also provides ships with a
    24-hour visual surveillance capability to be used for situation
    awareness, target detection and identification, and critical
    capabilities for challenging littoral environments. Efforts are
    underway for integration of this system into current and future combat
    systems for both fire control and target identification. TISS is
    currently deployed in limited numbers in the fleet, but the response
    from crews of ships with this system has been enthusiastic. TISS is a
    beneficial anti-terrorism/force protection asset. In the Arabian Gulf,
    TISS is the system of choice for monitoring and identification of
    shipping in our maritime interdiction operations (MIO). TISS's
    detection and surveillance capabilities are also of great benefit to
    units conducting counter-drug operations in this hemisphere. As funds
    permit, we are continuing a systematic program directed to outfit every
    forward-deployed ship in the fleet with a low light surveillance (EO/
    IR) system like TISS.
        The fiscal year 2003 budget submission maintains support for this
    significant sensor capability at fiscal year 2002 projected levels.

                        FUTURE SHIP SELF-DEFENSE SYSTEMS

        To pace the threat, continued development of future ship self-
    defense systems is incorporated in the spiral design of DD(X) which
    will be developed as one of a family of ships that will also include
    two other future surface combatants, the advanced cruiser CG(X), and
    the LCS. The DD(X) program in fiscal year 2003 is fully funded with
    emphasis on risk mitigation and timely deployment. The combination of
    the stealth characteristics gained in signature reduction technology
    and state-of-the-art radar technology will significantly enhance the
    self-defense capabilities of the DD(X) and, through netting, the other
    ships in the force. The LCS, to be built from the start as a networked
    and distributed platform with open, modular architecture, will rely on
    networks, speed, stealth and maneuverability to enhance its own self-
    defense, while, through those same capabilities and its organic sensors
    and weapons, contributing to the self-defense of other ships of the
    force. This is network-centric warfare in a most tangible and
    meaningful way.

                    MULTI-FUNCTION RADAR/VOLUME SEARCH RADAR

        As discussed above, multi-function radar (MFR) and volume search
    radar (VSR) associated with the DD(X) program are optimized for the
    littoral environment and will provide autonomous horizon search, long-
    range volume search, and fire control track. MFRs have the ability to
    provide surface search, periscope detection and navigation and enable
    counter-fire support and electronic protection in ship self-defense.
    MFR will automatically detect, ID, track and illuminate low altitude
    anti-ship cruise missiles in littoral environments. It will support
    ESSM and SM and provide non-cooperative target recognition (NCTR) and
    kill assessment. The VSR will provide long-range situational awareness
    and the required track revisit times to deal with fast, low/very low
    observable, high diving missile threats to enhance ship self-defense.

                    INFRARED SEARCH AND TRACK (IRST) SYSTEM

        The Navy is investing in electro-optical and infrared (EO/IR)
    detection and tracking systems to provide a key capability to
    complement traditional radar and RF systems. The integration of
    multiple, layered force defense systems allows a ship to defeat a wide
    variety of threat missiles across the spectrum of radar cross-sections,
    IR signatures, and seeker types. Each system is affected differently by
    weather, environment, or ducting. A performance null experienced by one
    type of system due to its environment can be filled by another system's
    capability.
        The IRST system is a sea-skimming anti-ship cruise missile
    detection system that adds significant improvements to the shipboard
    sensor suite. It improves ship survivability by providing 360-degree
    passive horizon surveillance, automatically detecting and tracking
    subsonic and supersonic threats.
        The developmental system will provide ships with a 24-hour visual
    surveillance capability to be used for situational awareness and target
    detection and identification. Additionally, tests have been conducted
    to integrate this system into current and future combat systems for
    both fire control and target identification. The first developmental
    model was successfully tested aboard the self defense test ship in 1997
    and 1998, and on U.S.S. O'Bannon (DD-987) in 1999.
        In the fiscal year 2003 budget submission we have added funding to
    complete a second engineering development model of the IRST system.

         SHIP SELF-DEFENSE--PATROL BOATS AND SMALL, FAST SURFACE CRAFT

        Small, fast surface combatants are a serious threat in the littoral
    environment. The guided missile patrol boat (PTG) is a vessel generally
    between 50-70 meters and capable of carrying 4-8 ASCMs. The surface
    Navy possesses adequate capability to counter both the PTG and their
    associated missiles. Significantly smaller boats, 5-27 meters and armed
    generally with shoulder-fired and/or smaller weapons, are an emerging
    threat. In numbers, these boats could present a challenge to single
    ships operating in close-in littoral waters. Situational awareness, air
    assets (organic or shore based), and netted multi-ship formations
    mitigate this challenge. Our strategy to counter this threat parallels
    our efforts to pace the ASCM threat, including the layered defense
    concept of operation, and hinges largely on leveraging the same weapons
    systems and integration advantages that were discussed above for the
    ASCM threat. As previously mentioned, several weapons developed for
    ASCM self-defense also have surface capability, most notably Standard
    missile, ESSM, and RAM against the PTG and RAM Block 1 (HAS) and CIWS
    1B against the smaller boats. Additionally, the new LCS will be
    designed specifically to counter this threat, leveraging networks,
    speed and agility.
        Immediate measures to respond to the small surface craft threat
    include, providing additional 23mm chain guns, installing TISS systems
    on deployers and introducing organic armed helicopters to surface
    combatants. Each 23mm chain gun-equipped ship will be provided with two
    gun mounts to ensure 360-degree coverage for this anti-surface weapon.
    The TISS system, described above, is being fielded on our ships
    deploying into high threat areas such as the Arabian Gulf. We have also
    already deployed light airborne multi-purpose system (LAMPS) SH-60
    helicopters with Hellfire missile capability into the fleet. In the
    near-term, we are accelerating the conversion of CIWS mounts to the
    Block 1B variant and providing the HAS capability to the RAM capable
    ships.
        Future enhancements that will continue to improve our anti-small
    boat capability include introduction of the AN/SPQ-9B, the Multi-
    Function Radar (MFR) and the LAMPS MH-60R helicopter. The AN/SPQ-9B
    gunfire control radar, described above, is specifically designed to
    provide better detection of small surface craft and to allow the 5,,/54
    gun system to engage them. The MFR, designed to function in the
    littoral, will provide the automatic tracking, auto-identification and
    periscope-level sensitivity necessary to detect, track and target
    small, fast surface craft. Though not possessing the requisite
    algorithms for periscope detection, in certain environmental
    conditions, AN/SPQ-9B has demonstrated promising capability during at
    sea testing. Finally, the MH-60R helicopter, employed from in-service
    cruisers, destroyers and frigates or future platforms like LCS, and
    armed with Hellfire missiles, offers considerable capability against
    small surface craft.
        The LCS is being developed to conduct this type of difficult,
    focused littoral mission as a complement to our current and future
    multi-mission surface combatants in the balanced total force. As part
    of a netted and distributed force, the LCS will use its speed and
    agility to enhance its own self-defense and contribute to the self-
    defense of other platforms in the network. We are leveraging work in
    other programs to start work on LCS related technologies now and expect
    to formally fund the program next year.

                                UNDERSEA WARFARE

        Undersea warfare (USW), which includes antisubmarine warfare (ASW)
    and mine warfare (MIW), is and will remain a Navy core competency and
    is critical to assured access. The littoral environment provides a
    challenge for ASW. The proximity to coastal waterways, harbors, and
    shipping lanes increases ambient noise and significantly complicates
    the already difficult challenge of undersea acoustic detections. This
    continued acoustic space complicates the problem of sorting legitimate
    target echoes from random background echoes. Littoral sonar performance
    and prediction are highly problematic. Now more than ever, ASW requires
    a team effort as the harsh littoral requires exploitation of each
    detection opportunity.
        In our shipboard sonar program, we are pursuing an aggressive two-
    pronged strategy. First, we intend on taking full advantage of the
    enormous advancements in computing power and networking. We have
    targeted these technologies for the AN/SQQ-89(V)15 and the AN/SQQ-
    89A(V)15 with the multi-function towed array (MFTA) undersea warfare
    suite. Through analysis we have learned that our best payoff is gained
    by employing active sonar in conjunction with active acoustic
    processing techniques and optimizing our passive sonar arrays to
    operate in the noisy and complex waters of the littoral. Second, we are
    investing in systems that afford surface combatants mine hunting
    capability. History has shown time and again that mines are the most
    effective asymmetric threat in the littoral environment. Their vast
    diversity and increased proliferation, coupled with abundance of mine-
    like clutter, present in the littorals demand that we equip our Fleet
    with the ability to find and avoid this threat. The concept in which we
    are engaged is called remote mine hunting and, when executed
    successfully, will allow us to sail in seas heretofore closed to us,
    simply because mines might be present. Add to the ASW sensors described
    above, improvements in ship torpedo defensive systems, the improved MH-
    60R helicopter program, and the new Mk 54 lightweight hybrid torpedo,
    and it is clear this budget submission is focused to enhance surface
    combatant ASW effectiveness.

                               AN/SQQ-89 PROGRAM

        In the near-term, our ASW focus centers on upgrading the existing
    AN/SQQ-89 sonar suites to meet future undersea challenges. The upgrade,
    designed to counter the quiet diesel-electric submarine threat in the
    littoral, enhances existing capabilities for shallow-water prosecution
    and adds new, robust capabilities such as torpedo recognition and
    alertment, and cross-layer active detection using broadband waveforms.
    The system will capitalize on open system network architecture, and
    commercial off-the-shelf (COTS) functional enhancements to reduce
    procurement and development costs, and also simplify future capability
    upgrades. The AN/SQQ-89 undersea warfare control system provides a
    fusion point for sonar data, bottom topography, and non-acoustic
    sensors. With the AN/SQQ-89, surface warriors will have superior data
    fusion and processing, combined with more effective sensor coverage.
        Critical to future ASW is the multi-function towed array (MFTA),
    developed in concert with the submarine and IUSS communities, it will
    provide warfighters with a below-layer active/passive detection sensor
    and a torpedo detection receiver optimized for shallow water
    environments. Unlike previous towed arrays that were restricted to
    deeper water, the MFTA is designed to serve as a receiver for the hull
    mounted AN/SQS-53 sonar, extending the reach of the hull sonar away
    from own ships noise. Additionally, surface combatants will receive the
    MH-60R with its advanced ASW suite, including the AQS-22 airborne low
    frequency sonar (ALFS). The SQQ-89(V)15 working in a coordinated manner
    with the MH-60R carrying the new Mk 54 digital torpedo will give
    surface warriors a powerful ASW capability in any ASW environment.
        The fiscal year 2003 budget submission represents a significant
    change of strategy for SQQ-89A(V)15 fielding. Under this new strategy,
    these systems will now be installed in Ticonderoga-class cruisers as
    part of the cruiser conversion program in addition to the installation
    plans for DDGs. OPN funding levels were revised downward as part of
    this budget to reflect the shift of funds to the CG Conversion SCN
    account.

                                 MK 54 TORPEDO

        As the shallow waters of the littoral environment have become
    better understood, it is clear that ASW acoustic torpedoes require more
    robust detection and signal processing capabilities to further enhance
    performance in littoral environments. With defense-wide fiscal
    constraints prevailing, a new ``bottom up'' development program has not
    been feasible. The determination was made that state-of-the-art COTS
    processors combined with technologies and performance features already
    incorporated into the Mk 50 lightweight torpedo and Mk 48 (ADCAP)
    heavyweight torpedo, if effectively adapted to inventory units of the
    Mk 46, provide the most cost-effective alternative to counter today's
    threat. In 1995, the Mk 54 lightweight hybrid torpedo program was
    initiated to provide a cost-effective shallow water performance upgrade
    to the lightweight torpedo inventory of Mk 46 and Mk 50 torpedoes.
        For the Mk 54 the incorporation of non-developmental item
    technologies from existing weapons and commercial industry has resulted
    in a significantly improved shallow water performance while reducing
    total ownership cost. Extensive use of COTS and open systems
    architecture enables the Mk 54 to be readily upgraded via technology
    insertion and software upgrades to counter future threats. CG-47, FFG-
    7, and DDG-51 class combatants, the SH-60B/F, MH-60R, and the P-3
    aircraft will all employ the Mk 54.
        The Mk 54 is planned to IOC in fiscal year 2003, with full rate
    production commencing in that year. We significantly accelerated the
    procurement of the Mk 54 in the fiscal year 2003 budget submission to
    achieve significant savings through procurement at economic order
    quantities (EOQ), and to obtain a significant improvement in capability
    within the FYDP.

                                   AN/SLQ-25A

        The advances in computing technology have allowed an increased
    sophistication and enhancement to our underwater defensive systems,
    specifically the AN/SLQ-25A. Central to our future undersea defensive
    systems will be a focus on the existing AN/SLQ-25A, which will be
    enhanced with state-of-the-art acoustic sensors and automated
    processing.
        The AN/SLQ-25A system is currently a soft-kill countermeasure
    system that acts as a decoy to confuse incoming homing torpedoes. It is
    the most widely used torpedo countermeasure system fielded on our
    ships. The AN/SLQ-25A is a towed system that operates at all times when
    the ship is at risk of torpedo attack, and unlike some of the more
    sophisticated countermeasure systems, the AN/SLQ-25A in its current
    state does not rely on cueing from an anti-submarine warfare (ASW)
    system.

                       TORPEDO RECOGNITION AND ALERTMENT

        If a ship is to react to a torpedo fired against it, there must be
    a way for the ship to detect the torpedo. Our surface combatants, using
    input from both the hull sonar and towed arrays, employ a processor and
    display system to gain alertment and recognition of torpedo acoustic
    emanations. The alertment and recognition system is used in conjunction
    with ship maneuvers to evade the torpedo and deployable countermeasures
    to effect a soft-kill of the incoming torpedo. The AN/SQQ-89 anti-
    submarine warfare combat system torpedo recognition and alertment
    functional segment (TRAFS) will detect and localize torpedoes at
    tactically significant ranges when torpedo acoustic noise is received
    by the towed array or the hull sonar. In the development of this
    important system, recent advances in acoustic sensors and computing
    have provided promise that the AN/SLQ-25 can be adapted to provide a
    significant improvement to torpedo alertment.

                           ANTI-TORPEDO TORPEDO (ATT)

        The ATT is the only near-term, hard kill countermeasure that
    promises to be effective against all threat torpedoes. The ATT will
    soon complete a fiscal year 2001 advanced technology demonstration
    (ATD). The Navy Staff has worked very closely with the Office of Naval
    Research on further development of this promising weapon system, as
    well as the potential to integrate this capability into shipboard
    systems for torpedo defense. The torpedo detection programs previously
    discussed lay the foundation for introduction of an ATT capability as
    it materializes.

                           REMOTE MINEHUNTING SYSTEM

        While it is preferable to avoid mined areas (using our knowledge
    superiority), military objectives may require operations in close
    proximity to mined waters. The Navy will continue to aggressively
    research and prepare mine countermeasure (MCM) systems to ensure
    effective operational capability in littoral waters in support of land
    campaigns. Countermeasure technology must keep pace with the increased
    sophistication in mine fusing and stealth technology.
        For surface combatants, a new addition to the AN/SQQ-89 USW suite
    will be the AN/WLD-1, remote minehunting system (RMS). The first RMS
    deployment is presently planned for DDG-91 in fiscal year 2005 and
    represents the first generation of organic mine countermeasures (OMCM)
    systems for surface combatants. RMS is a semi-submersible vehicle that
    tows a mine hunting sensor suite to detect, classify, locate, and
    identify mines in the water column and on the sea bottom. RMS can
    operate autonomously and maintain a radio frequency link to the ship to
    allow sufficient forward deployment from the host ship, thereby
    reducing risk and minimizing interference with other ship missions.
    Through the AN/SQQ-89 and global command and control system-maritime
    (GCCS-M), RMS will communicate mine location information to the rest of
    the fleet, supporting the integration of organic and dedicated mine
    warfare forces. RMS represents leading edge technology in organic mine
    hunting which must be leveraged into our future ships to provide
    optimum operational capability and flexibility.

               MH-60R LIGHT AIRBORNE MULTI-PURPOSE SYSTEM (LAMPS)

        An important piece of undersea warfare and force protection is the
    LAMPS SH-60B and its next generation, the MH-60R helicopter. These
    helicopters play a significant role in our ``assured access'' strategy.
    The MH-60R will provide improved capability in littoral--specifically
    in improving to situational awareness and providing defense against an
    increasing threat from small surface combatants and quiet diesel
    submarines. The MH-60R will bring an inverse synthetic aperture radar
    (ISAR) capability, the advanced ALQ-210 EW suite, and an integrated
    AQS-44 FLIR capability to our surface force. The MH-60R and its AQS-22
    dipping sonar, along with an improved COTS-based acoustic processor
    will enable the execution of multi-static ASW, contributing to our
    ability to detect threats in harsh littoral environments. In addition
    to these significant mission avionics capability upgrades, the decision
    was made last year to shift to a new manufacture program geared to
    directly improve the readiness and operational availability of these
    helicopters. This program provides a critical warfighting component for
    our surface combatants.

                                   CONCLUSION

        Our surface Navy remains a pre-eminent maritime fighting force in
    an ever changing and dangerous world that continues to be characterized
    by instability, uncertainty and ever increasing asymmetric threats.
    Today's Navy possesses the mix of capabilities required to carry out
    our Nation's maritime strategy. But we must do more to pace tomorrow's
    inevitable challenges. The surface Navy we are building for the 21st
    century will be characterized by speed, agility, strategic reach, and
    an enhanced ``toolbox'' of capabilities all designed to assure access,
    project power and project defense. The ``family of ships'' in our 21st
    century surface Navy will be truly transformational and will dominate
    the battle space, undersea, on the surface and in the air. This
    ``family of ships'' will be a force designed from the keel up to
    operate as a distributed, netted force. Today, we are on our way to
    realizing the full benefits of network-centric warfare with
    capabilities such as CEC, AADC and NFN operating at sea, and we will
    build upon our successes to move towards the more enhanced and
    transformational networked architecture of FORCEnet.
        In a challenging world, our surface Navy remains a critical force
    in defending U.S. interests abroad and our citizens at home.
        On behalf of surface warriors and our Navy, I want to offer my
    sincere thanks for your continued support and thank you for this
    opportunity to speak before you on the state of surface warfare. We
    have met and are meeting the challenges of the Cold War, the conflicts
    of the 1990s and now the first war of the 21st century, the War on
    Terrorism. In doing so, the message is clear: be prepared for the
    unexpected. We continue to strive earnestly to do just that.

        Senator Kennedy. Admiral Sullivan.

        STATEMENT OF REAR ADM. PAUL F. SULLIVAN, USN, DIRECTOR,
    SUBMARINE WARFARE DIVISION, OFFICE OF THE DEPUTY CHIEF OF NAVAL
                   OPERATIONS, DEPARTMENT OF THE NAVY

        Admiral Sullivan. Mr. Chairman and distinguished members of
    the Seapower Subcommittee, thank you for this opportunity to
    discuss submarine shipbuilding acquisition programs. Thank you,
    too, for your continued strong support of our sailors, their
    families, and our submarine force.
        To understand the important contributions our force is
    making in defense of our freedoms, we need to look no further
    than the role that submarines played in the early phases of
    Operation Enduring Freedom. Following the attacks of September
    11, the U.S.S. Providence and her sister ship, U.S.S. Key West,
    were among the first on the scene.
        Providence is particularly an excellent example of the
    success of recent congressionally-funded submarine programs and
    initiatives. Providence was at the end of a 6-month deployment
    and on her way home when the attacks occurred. Upon receiving
    word of the attacks, the skipper and his crew were directed to
    return to station off the coast of Afghanistan at best speed.
        The very next day, the well-trained crew of Providence was
    on station preparing the battle space for upcoming naval combat
    operations and stood ready to launch Tomahawk cruise missiles.
    Providence positioned close in, providing important cuing to
    the Enterprise and Vinson battle groups, recorded and forwarded
    intelligence, surveillance, and reconnaissance information, and
    rapidly executed time-critical strike missions when called
    upon.
        Recent modernization initiatives, including the submarine
    high data rate antenna, the ARCI sonar system, the advanced TB-
    29 towed array, and IT-21 local area network, were all critical
    to her success. These initiatives, combined with the strong
    long-term maintenance plan, provided Providence the endurance
    to stay on station well beyond the normal 6-month deployment
    and launch nearly one-third of the initial strike weapons while
    conducting surveillance activities ashore and at sea.
        With the increased demand signal from the warfighting
    combatant commanders since September 11 and a present force
    structure of only 54 attack submarines, how do we ensure
    similar success in the future? The key is to continue to deploy
    similar capabilities on all our submarines--SSNs, including
    future Virginia class submarines, SSBNs, and future SSGNs.
        Therefore, it is imperative that as a top priority we
    maintain a core modernization plan for our ships that utilizes
    COTS equipment and open architecture systems whenever possible
    to allow the ability to rapidly update. With this as a
    priority, we will be best positioned to handle the biggest
    challenges today involving access to littoral waters when
    threatened by mines and quiet diesel submarines.
        As a result of the post-September 11 successes and
    recognizing the need to transform for the future, our PB03
    budget focuses on investing in upgrades such as sonar, ARCI and
    its annual programs, command, control, communications,
    computer, intelligence systems, including our common submarine
    radio room, improved antennas, as I mentioned the high data
    rate antenna, and the new OE-538 antenna, combat control
    systems, which are envisioned to be more than just fire control
    systems, but provide tactical control and information
    management systems, periscopes and imaging----
        Senator Kennedy. Admiral, I am going to have to just recess
    for just a moment. As you can see, there is a vote over in the
    Senate. I will go over and vote, and then we will go ahead with
    the remainder of your testimony here, Admiral.
        The committee will be in recess. [Recess from 3:50 p.m. to
    4:09 p.m.]
        We will come to order. Admiral Sullivan, I recognize you.
        Admiral Sullivan. Yes, sir. I was discussing the
    investments we are doing to upgrade our ships' capabilities. I
    left off with we are investing considerably in updating our
    periscopes and ability to do imaging through some automatic
    low-intercept radars, some infrared imaging.
        We are also investing in signals intelligence to allow us
    to conform to the threat.
        Away from submarines, we are also integrating or updating
    our integrated undersea surveillance systems, both the fixed
    systems and the advanced deployable systems.
        With all this, we are continuing to emphasize our
    maintenance, force protection, and our payloads, particularly
    the tactical Tomahawk and undersea unmanned vehicles.
        On the strategic side of our business, the recent Nuclear
    Posture Review clearly reinforced the importance of the
    survivable sea-based deterrence provided by the Trident SSBNs.
    Recently the U.S.S. Alaska was backfitted to accommodate the
    Trident II D5 missile and completed a highly successful
    demonstration and shakedown operational missile test.
        We also are investing in D5 missile life extension programs
    to ensure adequate missile inventory for the life of our
    Trident submarine programs.
        Mr. Chairman, thank you again for the privilege of
    testifying today. The capabilities we are building into our
    ships and undersea systems are critical to meeting the threats
    of today and those of the future. Innovative modernization of
    our current SSNs and SSBNs, continued development of the superb
    Virginia class, transformation of the four Ohio class fleet
    ballistic missile submarines to SSGNs, and a robust yet focused
    research and development investment will ensure the U.S.
    remains the preeminent submarine force.
        With your continued support, we will be able to modernize
    and maintain our platforms as the most advanced technologically
    sophisticated submarine force in the world.
        Thank you, sir.
        [The prepared statement of Rear Admiral Sullivan follows:]
             Prepared Statement by Rear Adm. Paul F. Sullivan, USN
        Mr. Chairman and distinguished members of the Seapower
    Subcommittee, thank you for the opportunity to discuss submarine force
    non-shipbuilding acquisition programs. Thank you too for your continued
    strong support of our sailors, their families, and our submarine force.
        As the Navy's Director of Submarine Warfare, it is my principal job
    to determine the capabilities required of our undersea forces across a
    wide spectrum from peace through deterrence to conflict. Inherent in
    this job is the responsibility to ensure the programs and initiatives
    we are pursuing are an efficient and effective use of limited defense
    resources. My remarks today will include a description of the enduring
    characteristics of nuclear powered submarines, the strategic concepts
    that form the submarine force's vision for the future and the
    capabilities we are pursuing for our systems.
        The focus of our acquisition programs in Presidential budget 2003
    is to improve the joint warfighting effectiveness of our submarines and
    undersea systems to meet current and future Commander in Chief (CINC)
    and National requirements. In addition to shipboard programs, I will
    also discuss submarine rescue systems, fixed acoustic arrays and other
    off-hull undersea warfare sensors and systems for which I am
    responsible.
        To understand the importance of today's submarine force, we need
    look no further than the contributions of our submarines during the
    early phases of Operation Enduring Freedom (OEF). Following the attacks
    of September 11, U.S.S. Providence (SSN-719) and her sister ship U.S.S.
    Key West (SSN-722) were among the first on the scene. Recent submarine
    force initiatives including the high data rate (HDR) antenna, acoustic
    rapid COTS insertion (ARCI) sonar system, advanced TB-29 towed array
    and IT-21 local area network were critical to the successes of these
    ships in preparing the battle space, providing anti-diesel cueing to
    the U.S.S. Enterprise and U.S.S. Carl Vinson battle groups, recording
    and forwarding intelligence, surveillance, and reconnaissance (ISR)
    information and rapidly executing time-critical strike missions. I will
    include a discussion of each of these acquisition programs and
    initiatives later.

                       ENDURING SUBMARINE CHARACTERISTICS

        The ability of our submarines to conduct surprise operations has
    been critical to success during the War on Terrorism and will prove a
    key capability in unforeseeable future conflicts involving mobile
    adversaries operating without regard to national borders. Our
    submarines make use of their unique stealth, endurance, and agility to
    provide critical and irreplaceable capabilities, in support of joint
    forces, against the emerging threats and challenges of today and
    tomorrow.

             Stealth. Uniquely undetectable and survivable, U.S.
            submarines can operate covertly or overtly, creating surprise,
            fear, and uncertainty among adversaries and assuring access for
            friendly naval and joint forces. Of the five military domains
            (land, surface-sea, undersea, the atmosphere and space),
            undersea operations are the least visible and therefore the
            stealthiest. U.S. submarines remain virtually undetectable by
            other forces and their sensors, enabling them to operate with
            impunity--covertly when required, or overtly if desired--inside
            an adversary's threat envelope in advance of less survivable
            joint forces. Their stealth also gives them inherent protection
            from precision-guided missiles, electro-magnetic pulses (EMP)
            and chemical, biological, radiological, nuclear and enhanced
            high explosive (CBRNE) weapons. Under stealthy cover, the
            submarine's ability to deliver payloads in hostile or denied
            areas is singularly unique, providing the CINCs with survivable
            ground-truth sensors inside the enemy's battlespace as well as
            credible combat power for use against naval and land-based
            targets.
             Endurance. U.S. submarines conduct sustained,
            independent operations within an enemy's battlespace. They
            often operate alone in areas where detection or risks from
            hostile forces prevent other forces from operating. Their
            endurance, combined with their stealth, enables them to operate
            with no defensive or logistics support from other forces for
            months at a time. With their advanced sensors and precision
            firepower, they have a remarkably high ``tooth-to-tail'' ratio.
             Agility. Robust in capability and highly maneuverable,
            U.S. submarines carry out unique national, operational and
            tactical missions across the spectrum from peace to deterrence
            to war. Their ability to surge between theaters with sustained
            speed is a key capability in providing responsive, forward-
            deployed forces. Often ``first in and last out,'' they provide
            presence, 24/7 intelligence collection and improved situational
            awareness through special operations during peacetime and pre-
            hostility phases. Able to transition to emerging missions on
            station, they also provide credible conventional deterrence,
            dominant undersea warfare and early and covert precision strike
            when conflicts arise. A single U.S. nuclear submarine can
            conduct a wide range of missions in one deployment.

       SUBMARINE FORCE JOINT STRATEGIC CONCEPTS AND VISION FOR THE FUTURE

        The submarine force's vision is to leverage the unique attributes
    of our ships to provide critical and irreplaceable capabilities, in
    support of joint forces, against the emerging threats and challenges of
    today and tomorrow. To support this, we emphasize four strategic
    concepts:

             U.S. submarines assure access for joint forces.

              Our submarines operate ``out front'' and prepare the battle
            space in denied, hostile or sensitive areas. Because they can
            operate where other platforms cannot, submarines neutralize
            enemy anti-access systems or operate in spite of them, often
            enabling attacks against time-sensitive targets. Information
            provided by submarines, in conjunction with that available via
            integrated undersea surveillance systems (IUSS) and Surtass
            ships, provides valuable expeditionary capability for assuring
            access for joint forces.

             U.S. submarines exploit their unique access to develop
            and share knowledge.

              Able to operate undetected very close to a potential
            adversary's forces or territory, our submarines collect
            information and provide real-time high data rate reporting
            about adversaries and their capabilities that other assets
            cannot--improving national and theater-level situational
            awareness.

             Stealth, access, knowledge, and firepower make U.S.
            submarines a potent deterrent.

              In addition to strategic nuclear deterrence, our submarines
            provide the CINCs and the Secretary of Defense with
            unlocatable, close-in presence in support of diplomatic and
            military objectives. Accurate and timely knowledge combined
            with early and unpredictable conventional attack capabilities
            from our submarines strengthen our leaders' deterrent options
            against aggression.

             Undetected presence and access enable U.S. submarines
            to project power with surprise from close-in.

              Stealthy and survivable, our submarines provide an early and
            rapid precision strike capability against time-sensitive
            targets, as well as attack capabilities within contested or
            sensitive areas.

                      PURSUING A CAPABILITIES-BASED FORCE

        Armed with this vision, the submarine force, in close coordination
    with industry and government laboratories, is moving forward to
    identify and invest in programs and technologies that bring the needed
    capabilities to our submarines and undersea systems. Through an
    enduring and comprehensive process, this consortium of warfighters,
    shipbuilders and technologists share ideas and a consistent focus. This
    process, called SUBTECH, ensures all current and future submarine
    program efforts are geared toward achieving our vision for the future.
    The capabilities that we are pursing can be summarized under three
    themes; extended reach, fully netted, and greater adaptability:

             Extended reach to increase the submarine's tactical
            horizon and collection capabilities, enabling better
            penetration of hostile or inaccessible areas to improve
            situational awareness and provide more information in support
            of CINC and national tasking. Current initiatives include the
            upgrade and modification of existing shipboard acoustic and
            command, control, communications and computer (C\4\) ISR
            systems and development of off-board sensors.
             Submarine information systems fully netted with
            national and theater level assets to improve processing
            capabilities and provide integrated data for onboard and off-
            hull interpretation and knowledge sharing. Fully netted systems
            allow the data collected by submarines and their organic and
            off-board sensors to be distributed to joint forces and
            national agencies, while also allowing real-time reach-back
            from submarines deployed in forward regions to central
            intelligence and cueing resources.
             Greater adaptability to provide the submarine force
            with more mission flexibility and volume of firepower to adapt
            to emerging threats and technology. The development of modular
            concepts and designs and incorporation of interoperable COTS
            technology that can be rapidly upgraded and/or reconfigured
            will aid in supporting this concept.
             irreplaceable submarine missions and joint warfighting
        Leveraging their enduring characteristics and guided by the above
    strategic concepts, submarines and undersea systems play a unique and
    thus irreplaceable role in joint warfighting and in fulfilling CINC and
    National requirements in the following primary areas: undersea
    superiority, battlespace preparation (including ISR and SOF), covert
    early strike, and global deterrence. I will now discuss our President's
    budget 2003 programs and initiatives in the context of these four
    mission areas. Although many of the programs and initiatives are
    applicable to more than one mission area, I will only include each
    under its primary mission area.
    Undersea Superiority
        U.S. submarines penetrate conventional enemy defenses to ensure
    undersea superiority and sea control, defeating enemy area denial
    capabilities. Our submarines are critical to the Navy's ability to
    wrest control of the sea from a determined enemy employing mines,
    cruise missiles and/or quiet, advanced diesel submarines. They can
    disrupt and destroy our adversaries' military and commercial operations
    at sea, ensuring maritime dominance for the U.S. or its allies. Over a
    number of years, our submarines have established unparalleled anti-
    submarine and anti-surface capabilities. Armed with significantly
    improved sensors and weapons, today they provide an even greater
    ability to locate, track and if necessary destroy submarines, surface
    ships and shipping in both the open ocean and the littorals.
        Undersea superiority enables the safe arrival and employment of
    joint forces in distant theaters of operations. Our submarines and
    other undersea surveillance assets (e.g. integrated undersea
    surveillance systems (IUSS)) are critical to the Navy's ability to
    ensure freedom of the seas and the flow of forces in support of joint
    operations in the face of an adversary's maritime threat.
        President's budget 2003 acquisition programs and initiatives to
    support continued undersea superiority include the following:

             Underwater Acoustics

              Acoustic superiority over modern diesel and advanced nuclear
            submarines is fundamental to control of the seas, underwater
            dominance and assured access for our naval and follow-on
            forces. Current initiatives include use of a standard sonar
            system (TB-29 towed array with COTS technology) for all
            submarine classes, integrated undersea surveillance systems
            (IUSS) and Surtass ships, and continued development and
            installation of acoustic rapid COTS insertion (ARCI) sonar
            systems to maximize collection of acoustic data.
              Annual updates via the advanced processor build installation
            and management plan have proven effective in steadily
            maintaining ARCI systems up to date. Shipboard installations
            are being done in a 2-year cycle to best fit submarine
            deployment and operational schedules.
              All deploying SSNs will have towed array ARCI (Phase II) by
            October 2003 and hull mounted ARCI (Phase III/IV) by October
            2005. All SSBNs will have towed array ARCI by October 2006 and
            hull mounted ARCI (Phase III) by October 2010. SSGNs will have
            towed array and hull mounted ARCI installed after conversion.

             Submarine Weapons

              Submarine-launched torpedoes provide essential combat power
            for sea control missions. Submarine-launched Mk 48 advanced
            capability (ADCAP) heavy-weight torpedoes are the most
            effective anti-shipping weapons in the Navy. Advancements in
            submarine weapons to ensure continued undersea superiority and
            sea control in response to emerging threats in the littoral
            waters include the following:

             Improvements to the Mk 48 ADCAP. Modifications are in
            progress to upgrade the current inventory of ADCAPs from Mod 5
            to Mod 6, yielding significant improvements in weapon guidance/
            control and propulsion systems and improved performance in the
            difficult littoral environment. The Mod 6 guidance and control
            section has four times the memory and processing speed of its
            predecessor to support continual software updates for enhanced
            weapon performance. These software improvements, coupled with
            hardware developments that support installing updates onboard
            the submarine, will enable improved capability at a reduced
            cost. Propulsion system improvements include sound-quieting to
            reduce weapon operating noises and reduce target alertment,
            yielding a significant tactical advantage for our submarines.
             Development of the common broadband advanced sonar
            system (CBASS) torpedo as the next improvement to the Mk 48
            ADCAP. CBASS takes advantage of improved sonar technologies and
            processing capabilities and is deliberately designed to defeat
            the submerged adversary of the future (very quiet, low
            operating speed, diesel or air independent propulsion (AIP)
            platform, capable of high speed evasions, deploying
            countermeasures, operating in a high noise, high contact
            density, very shallow water environment). Initial operational
            capability (IOC) for CBASS is 2007.
             Submarine Countermeasures. Work continues on making
            submarine countermeasures uniform in dimension so every
            submarine can fire all countermeasures in the inventory. The
            new 6,, countermeasures offer increased performance and
            endurance over the previous generation. Additionally, progress
            continues on the anti-torpedo torpedo, a joint submarine and
            surface force weapon, with first at-sea testing scheduled in
            2006.

             Submarine Combat Control Systems (CCS) Modernization

              Current CCS enhancements will enable full capability for
            tactical Tomahawk (Tactom) and use of the IT21 communications
            system, deliver significant improvements in high contact
            density littoral areas and enable periodic improvements in
            capability. The program implements an open architecture system
            similar to ARCI sonar that is more conducive to competition for
            software and hardware development.
              Today's CCS integrate two different functions: contact
            tracking and management and control of weapons. Our ultimate
            goal is to split these functions so that contact management
            upgrades are not tied in with costly and time-consuming testing
            requirements for upgrades to weapon control systems. We fully
            intend to apply the lessons learned from our experience with
            the ARCI sonar system in developing the architecture and the
            advanced processor build process for the CCS.
              Equally important is the installation of phase 2 of the
            tactical integrated digital system (TIDS), a mission critical
            digital network incorporating the Navy's first on-board
            tactical network. It will provide robust, survivable servers
            and network hardware that will serve as a ready host for a wide
            range of future applications. It is a fundamental building
            block to achieving network-centric warfare capability on
            submarines. The first installations have been completed, and
            the program is aiming to complete fleet wide installation
            within the FYDP.

             Off-board Sensors

              Recent efforts have accelerated experimentation, development
            and fielding of UUV, unmanned aerial vehicles (UAV) and
            deployable systems to expand the submarine's payload and reach.
            Autonomous, off-board vehicles and sensors deployed from
            submarines will allow covert penetration of denied/hostile
            areas with leave-behind persistent intelligence collection
            capabilities in support of the warfighting CINCs. Off-board
            vehicles and sensors will improve the situational awareness and
            multiply the operational impact and flexibility of their host
            platform--and the supported joint forces--at significantly
            reduced risk.

             The long-term mine reconnaissance system (LMRS) is an
            autonomous UUV currently under development that will enable our
            submarines to search for mines in denied littoral waters and
            other areas while remaining covert and out of danger. LMRS is
            scheduled for IOC in 2005.
             The mission reconfigurable UUV (MRUUV) is a next-
            generation UUV that will provide the ability to greatly extend
            the range and variety of off-board sensors. MRUUV will be the
            Navy's first fully autonomous vehicle that has specified
            interface standards to enable acceptance of a wide array of
            sensor payloads.
             Cueing provided by the integrated undersea
            surveillance system (IUSS) is essential to the Navy's undersea
            warfighting capability. Current fixed and mobile systems
            provide persistent maritime surveillance worldwide.

               IUSS fixed systems, the legacy sound surveillance
            system (SOSUS) and the newer fixed distributed system (FDS),
            provide long-term, forward-deployed covert surveillance. Cost
            of these systems is typically shared with our allies.
               For our mobile IUSS component, SURTASS ships will be
            even more capable with the installation of highly effective TB-
            29A twin line arrays, with first installation scheduled to
            occur in fiscal year 2004. Additionally, after receiving
            authorization from the National Maritime Fisheries Service, we
            expect to begin low frequency active sonar operations this
            year.
               Development of advanced deployable system (ADS), a
            transformational system that provides rapid deployability,
            continues with initial delivery of an operational system to the
            fleet in fiscal year 2005. For the future, we are developing a
            variant of ADS that will not require a cable link to shore.

             Submarine Rescue

              Following the sinking of the Russian submarine Kursk and
            subsequent loss of lives, the Navy conducted a thorough
            analysis of the safety and habitability of our submarines
            following a major casualty. While we had already taken a
            proactive role in this area including installing new escape
            equipment and developing a new rescue system, fiscal year 2003
            provided an opportunity to further improve our capability. The
            Navy has increased funding to procure and install new carbon
            dioxide removal equipment to allow sailors to survive until
            escape or rescue. Additionally, we have accelerated the
            installation of an improved escape suit by 2 years from 2007 to
            2005 and are pursuing initiatives to re-establish pressurized
            escape training for our sailors.
    Battle Space Preparation, including ISR and support of Special
            Operation Forces (SOF).

             ISR. Space-based and airborne signals interception is
            complemented in critical ways by our submarine intercepts. Our
            submarines can position themselves to capture electromagnetic
            emissions or observe maritime activities or tests that would
            elude other sensors and systems. They are critical assets in
            ensuring comprehensive, persistent surveillance of many
            information domains (visual, acoustic and electronic), ensuring
            complete situational awareness and precluding enemy sanctuary.
            Submarines also provide sole-source ``tip-off'' information,
            which enables the intelligence community to optimally allocate
            other collection assets.
              U.S. submarine-gathered intelligence focuses military
            planning and operations and minimizes threats to national
            assets. Operating closely and continuously to observe
            activities without the adversary's knowledge, submarines
            provide battle group and joint force commanders real-time
            information that helps define and prepare the battle space.
            Intelligence gleaned from such operations ranges from the
            highly technical details of military platforms to knowledge of
            a potential adversary's military doctrine and intentions. Their
            non-provocative and non-escalatory presence also enables them
            to gain ``ground-truth'' intelligence that aids diplomatic
            efforts and helps anticipate (and preclude) hostilities.
              Programs and initiatives to enhance submarine ISR
            capabilities include the following:

             Submarine Communications

              The submarine IT21 communications suite significantly
            improves connectivity via wideband (128 kbps) and narrowband
            (32-48 kbps) internet protocol (IP) technology. IT21
            communications provide secure, covert connectivity in the
            littorals and more efficient use of limited satellite resources
            while enabling our submarines to be fully netted with the
            carrier battle group. Submarine IT21 is being outfitted on all
            submarines deploying with the battle group; and, to date
            approximately 20 percent of the SSN fleet has this capability.
            The goal, as supported by the program of record, is for all
            submarines (SSN, SSBN, and SSGN) to be modernized with this
            capability by the end of fiscal year 2007.

             Submarine Imagery and Signals Intercept

              Current efforts in the areas of tactical imagery and visual
            intelligence (VISINT) will significantly advance the
            submarine's capability from World War II era optics to state-
            of-the-art imaging technologies. Efforts include real-time
            rangefinding, continuous video output (both visual and
            infrared) and digital still camera imaging. This high quality
            digitalization of imagery will enable the submarine to gain
            greater tactical control while operating at periscope depth in
            high contact density, littoral areas and also provide high
            resolution VISINT to theater and national intelligence networks
            quickly.
              Submarine operations since September 11 have highlighted the
            critical importance of sensitive, state-of-the-art signals
            intelligence (SIGINT). To ensure maximum capability in this
            area, we have greatly accelerated procurement and installation
            of the state-of-the-art AN/BLQ-10 SIGINT suite which provides
            our submarines the capability to exploit the entire spectrum of
            signals.

             Submarine Geospatial Information

              The submarine force continues to pursue improvements in
            precision position/attitude/time determination and geographic
            reference that are critical to exchanging relevant contact
            information in a tactical or national network. Nearly all
            operational SSNs have been upgraded to the AN/BPS-15(H)
            integrated radar and digital chart system, which has
            significantly enhanced ship's safety during surfaced and
            submerged operations in high contact density environments. All
            remaining SSNs will be upgraded to the AN/BPS-15(H) by 2004.
            The AN/BPS-15(H), in conjunction with ring laser gyro
            navigator, the replacement for the legacy electronically
            suspended gyro navigator, will provide seamless integration
            with geospatial standards and will meet Navy goals for
            electronic navigation.
             SOF. U.S submarines are excellent platforms to deploy
            and retrieve covert forces. Our submarines' inherent stealth
            and endurance--as well as their sophisticated communications
            equipment, sensors, and navigation suites--make possible the
            secure, precise and reliable insertion and extraction of SOF
            (SEALS, Rangers, and Recon Marines) close to shore objectives.
            These covertly placed personnel can plant remote sensors,
            collect intelligence, exploit and/or disable weapons and
            communication systems and perform other classified missions
            inside denied areas. OEF has demonstrated conclusively the
            importance of being able to deploy SOF quickly and covertly in
            places and situations that cannot be anticipated.
              The submarine force has always had the capability to insert
            SOF, but the recent decommissioning of U.S.S. Kamehameha has
            limited our capability to short duration employments with small
            teams of special forces. SSGN, in combination with the advanced
            seal delivery system funded by SOCOM, will enable us to achieve
            a quantum increase in our capability to insert and support
            Special Forces from submarines. The prospects are exciting, and
            we are beginning to lay the foundations for reaping significant
            operational capability benefits from the synergy of SSGN and
            SOF. To support this, we have updated nearly all of our non-
            shipbuilding procurement programs to give SSGN the same
            capability as SSNs in acoustics, imaging, combat control and
            communications.

             Covert, Early, Conventional Strike

              Submarine-launched land-attack missiles provide essential
            combat power for strike missions. U.S. submarines provide
            combat-credible presence with responsive and reliable
            delivery--early strike, with surprise, from close-in. Littoral
            access and survivability enable unique strike capabilities with
            reduced risk to personnel.
              Our submarines are not threatened by area denial weapons such
            as coastal cruise and tactical ballistic missiles or weapons of
            mass destruction, thus delivering a conventional punch with
            impunity. They can execute attack operations against targets
            that might otherwise be alerted by a visible naval presence.
            Historically, submarines have deployed one-third of the Navy's
            Tomahawk land-attack missiles, and submarines launched nearly
            38 percent of all Tomahawk cruise missile strikes during the
            first phase of OEF.
              The development of Tactom will enable our submarines to
            project power more swiftly with precision against defensive
            systems and other time-sensitive targets. In the future, SSGN,
            loaded with deployable sensors (e.g. unmanned vehicles),
            Tactoms, future land-attack missiles and miniature air-launched
            decoys and jammers, will provide robust capability to destroy
            an integrated air defense system (IADS) or any other anti-
            access system from within the adversary's threat envelope.

             Global Deterrence

              U.S. submarines fulfill a unique role in our Nation's ability
            to deter aggression. Asymmetric in concept and capability, our
            submarines provide an unlocated but certain strike capability--
            both nuclear and conventional--whose time and place of
            employment is completely uncertain in the mind of a would-be
            adversary. The survivable offensive strike weapons carried by
            our nuclear submarines play a pivotal role in achieving global
            deterrence as part of the Nation's new strategic triad.
              Ballistic missile submarines (SSBNs) are our Nation's choice
            for nuclear deterrence. Our SSBNs are virtually undetectable.
            They comprise greater than 50 percent of our Nation's nuclear
            deterrent, and 100 percent of our Nation's survivable
            deterrent, using only 34 percent of our strategic budget and
            less than 1.5 percent of our naval personnel.

               The Presidential Budget for Fiscal Year 2003 fully
            funds a service life extension program to match the life of D5
            submarine-launched ballistic missiles (SLBM) to the recently
            extended 44-year life of Ohio-class SSBNs. This program
            refreshes the missile guidance and electronics systems to
            prevent obsolescence and procures additional missiles for
            required flight testing. The D5 life extension program will
            ensure maximum weapon system reliability and accuracy for this
            critical strategic deterrent.

        In addition to traditional strategic deterrence provided by SLBMs,
    Tomahawk cruise missiles carried onboard Los Angeles- and Seawolf-class
    attack submarines (and Virginia-class submarines, when delivered)
    provide a capable conventional deterrent. SSGN will add up to 154
    Tomahawk or future Tactom cruise missiles per platform to advance our
    capabilities in this area.

              ENDURING PROCESSES FOR INNOVATION AND TRANSFORMATION

        The submarine force has incorporated innovative processes to ensure
    our submarines have the necessary tools to meet the challenges of today
    as well as those of the future.
        As I have already referred to, SUBTECH is a collaborative
    organization comprised of OPNAV, industry, acquisition community and
    fleet representatives developed to identify and prioritize promising
    technologies consistent with the submarine force vision. Working hand-
    in-hand with SUBTECH, the submarine force's Experimentation Working
    Group ensures our vision is pursued through an end-to-end process that
    guides concept development, war gaming, science and technology,
    experimentation and research and development to deliver the required
    fielded capabilities to the fleet and transform the force vision into
    reality.
        The payloads and sensors program uses the above processes,
    leveraging and integrating technologies developed by others, to
    identify submarine payloads and sensors for the future. The SSGN
    payloads and sensors program will make use of SSGN's large ocean
    interface--22 large-diameter, 44-feet tubes--to develop future payloads
    and sensors to be deployed by SSGN. Additionally, SSGN will serve as
    the transformation ``bridge'' to provide these and future advanced
    joint payloads, including mission-specific weapons and sensors, via the
    technology insertion program, to Virginia-class submarines with
    reconfigurable torpedo rooms, advanced sails and large payload modules.

                                  CONCLUSION.

        Mr. Chairman, thank you for the honor of testifying today. I would
    like to close by reiterating the critical need for submarine-delivered
    capabilities as a vital component of our Nation's defense. The
    capabilities we are building into our ships and undersea systems today
    and those that are planned for tomorrow are crucial to meeting the
    threat today and in the future. Our submarines are stealthier and more
    capable than any ships in the world. Our relevance in regional peace or
    conflict enabled by our stealth and combined with the endurance and
    agility that nuclear power brings are absolutely necessary to support
    CINC and National mission tasking.
        Innovative modernization of our current submarines, continued
    development of the superb Virginia-class and transformation of four
    Ohio-class fleet ballistic missile submarines to SSGNs will ensure the
    U.S. remains the preeminent submarine force. With your support, we will
    continue to upgrade and maintain our platforms as the most advanced,
    technologically sophisticated submarines in the world.

        Senator Kennedy. Thank you very much.
        Admiral McCabe.

     STATEMENT OF REAR ADM. MICHAEL J. McCABE, USN, DIRECTOR, AIR
                WARFARE DIVISION, DEPARTMENT OF THE NAVY

        Admiral McCabe. Senator, I am honored to be in front of you
    today and have a chance to talk about naval aviation. I have a
    short statement for the record I would like to submit.
        Senator Kennedy. Please.
        Admiral McCabe. I would echo the comments of the CNO and
    the prior witnesses on the challenges and the opportunities
    facing the Navy today, and I look forward to your questions.
        [The prepared statement of Rear Admiral McCabe follows:]

             Prepared Statement by Rear Adm. Michael J. McCabe, USN

        Mr. Chairman and distinguished members of the Seapower
    Subcommittee, thank you for the opportunity to discuss the state of
    naval aviation, with specific emphasis on the programs and plans to
    sustain and modernize our P-3 and MH-60 platforms and equipment.
        When I appeared before this subcommittee last year, I spoke of how
    the leading role played by naval expeditionary forces in responding to
    crises pointed to an increasing demand for what the Navy-Marine Corps
    team and naval aviation bring to the fight. Clearly in this past year,
    this trend has continued--even accelerated--as our forward-deployed
    carrier battle groups and amphibious ready groups have served the
    Nation's interests in support of Operations Noble Eagle and Enduring
    Freedom.
        Our remarkable success in these operations validates the
    requirement for unconstrained, sustained and forward naval maritime
    forces. The lion's share of the credit rests with the sailors and
    marines who serve with distinction and honor--meeting the challenge of
    increased operations tempo despite the effects of a prolonged drawdown
    of personnel and equipment. I appreciate the actions by members of this
    subcommittee, the Senate, and the administration to meet our most
    pressing personnel and readiness needs. I am mindful of the choices we
    need to make to balance the modernization and recapitalization efforts
    necessary to ensure naval aviation and naval maritime forces remain
    capable of meeting the Nation's security requirements into the 21st
    century and beyond.

                       MARITIME PATROL AND RECONNAISSANCE

        Maritime patrol and reconnaissance aircraft (P-3/EP-3) continue to
    fulfill critical warfighting roles, including: undersea warfare;
    surface warfare; electronic warfare; intelligence, surveillance, and
    reconnaissance; maritime interdiction; littoral strike and targeting.
    Enhanced connectivity and integration into battle group concept of
    operations (CONOPS) places a premium on these aircraft as we move into
    the future. A key modernization effort for both the maritime patrol and
    reconnaissance fleet is the replacement of mission systems in our
    legacy aircraft to give the warfighter the capability to conduct anti-
    submarine warfare (ASW), anti-surface warfare (ASUW) and intelligence,
    surveillance, and reconnaissance (ISR) in the 21st century.
        The P-3 ASUW improvement program (AIP) is an upgrade to the P-3
    weapons system which was designed to provide a more robust anti-surface
    warfare capability. The COTS sensor and connectivity improvements
    allowed for rapid fleet introduction that proved their value during
    multiple worldwide operations, most recently Operation Enduring Freedom
    (OEF). P-3 AIP-equipped aircraft collected, analyzed, and disseminated
    time critical intelligence to joint and coalition forces in OEF, while
    also participating in leadership interdiction and maritime interdiction
    operations in the Persian Gulf and Indian Ocean. Our investment in AIP
    is well leveraged, as this aircraft has performed well in unique roles
    in the global war on terrorism, including overland and overwater ISR
    operations, littoral surveillance, maritime interdiction operations,
    and full support of joint task forces. AIP is a suite of sensor
    upgrades that significantly and rapidly increases capabilities not only
    in ASUW, but also for over-the-horizon targeting (OTH-T); command,
    control, communications, computers, and intelligence (C\4\I); and
    survivability. By protecting the battle group from surface and sub-
    surface threats, our P-3 aircraft in conjunction with organic
    helicopter assets, allowed the carrier air wing's tactical aircraft to
    focus exclusively on power projection.
        Our EP-3E electronic warfare and reconnaissance aircraft continue
    to meet critical CINC ISR collection requirements. The primary mission
    of these aircraft is to detect and report tactically significant
    communication and radar signals then associate these signals with enemy
    warfare activity or potentially hostile units. A P-3C to EP-3E
    conversion program is in place and fully funded to meet the inventory
    requirement of 16 aircraft. There are two planned upgrades to the EP-3E
    force. The sensor system improvement program (SSIP) integrates and
    installs new tactical communications, electronic signals monitoring
    (ESM), and special signal processing and exploitation systems. The
    second effort is the joint airborne signals intelligence (SIGINT)
    architecture (JASA) block modernization program (JMOD). The JMOD
    program is an extensive systems upgrade designed to keep the EP-3 ahead
    of the projected threat and is the bridge to future Navy manned and
    unmanned ISR programs.

                        MULTI-MISSION MARITIME AIRCRAFT

        The multi-mission maritime aircraft (MMA) program plan presents a
    path forward to recapitalize the capabilities currently provided by the
    maritime patrol and reconnaissance force. The Navy has completed the
    AoA, identifying a manned aircraft as the key element of the system.
    The analysis also identified the potential application of unmanned
    aerial vehicles (UAV). In the interim, the legacy P-3C force is going
    to be kept viable through sensible modernization until the introduction
    of MMA. This approach will enable the Navy to deliver more reliable and
    capable replacement aircraft faster, minimize costs and technical
    risks. Our schedule has the selection of the preferred alternative for
    development in fiscal year 2004 with the goal for introduction to the
    fleet in the 2010-2012 timeframe.

                         UNMANNED AERIAL VEHICLE (UAV)

        In August of this past year, the Secretary of the Navy announced
    his intent to increase the Navy's emphasis on unmanned systems. With
    increased emphasis on this key transformational area, the Navy and
    Marine Corps re-examined their UAV requirements and priorities. The
    resulting naval UAV strategy has both a short-term plan to capitalize
    on existing systems and a longer term plan to develop a family of
    unmanned vehicles.
        The Navy has initiated an accelerated procurement of a Global Hawk
    system as part of the broad area maritime surveillance (BAMS)
    requirement to satisfy the Long-Dwell-Standoff ISR mission area. This
    will be a two-phased process. Phase I will be procurement of an Air
    Force production line Global Hawk system which will have modifications
    to the existing sensor package to make it more compatible with a
    maritime environment. A system will consist of two air vehicles with
    payloads, a launch and recovery element and mission control element.
    The system will be used primarily for experimentation and CONOPS
    development leading to phase II. Phase II (now called BAMS UAV) will
    leverage from the broad area maritime and littoral armed intelligence,
    surveillance, and reconnaissance mission needs statement and AoA to
    competitively acquire high altitude, long endurance vehicles with
    robust and fully capable maritime sensor payloads. The thrust of BAMS
    UAV will be towards developing sensor/payload capability or identifying
    existing sensor/payloads capable of performing BAMS missions. The Navy
    intends to explore all non-developmental options for the vehicle. A
    competition may result if multiple vendors can provide vehicles
    appropriate to the Navy's requirement.

                               MH-60 HELICOPTERS

        The CNO recently approved a fleet proposal to restructure our Navy
    helicopter forces around the two linchpin airframes to the Helicopter
    Master Plan, the MH-60R and MH-60S. This new concept of operations
    (CONOPS) will align the leadership of helicopter aviation with the
    carrier air wing and bring about warfighting efficiencies. Our
    helicopter force will downsize from seven type/model/series to two,
    while meeting our littoral warfighting requirements. Capitalizing on
    efficiencies of singular maintenance, logistics, and training systems,
    our plan satisfies the needs of both our Active and Reserve Forces.
        The MH-60R multi-mission helicopter is the future aircraft for the
    Navy's tactical helicopter community supporting surface combatants and
    aircraft carriers. The MH-60R will eventually replace the Navy's
    existing fleet of SH-60B and SH-60F helicopters. The warfighting
    systems will provide an advanced multi-mode inverse synthetic aperture
    radar (ISAR), the airborne low frequency (dipping) Sonar (ALFS), a
    greatly enhanced electronic support measures and self-defense sensor
    suite, and upgraded mission computers. In June 2001, the MH-60R program
    received approval from ASN(RDA) to revise the acquisition strategy from
    remanufactured airframes to new production aircraft. The acquisition
    program rebaseline, incorporating this new manufacture strategy and
    extension of the schedule to allow further subsystem testing and
    maturity, has been approved.
        The MH-60S multi-mission combat support helicopter is the future
    aircraft for organic airborne mine countermeasures, combat search and
    rescue, special operations, and logistics support. The MH-60S will
    replace the Navy's aging fleet of H-46, H-1, H-3, and HH-60H
    helicopters. This spring, we certified the fleet replacement squadron
    ``ready-to-train'' and we plan to introduce initial operational
    capability of the MH-60S in the fall of 2002. Retirement of the CH-46D,
    the Navy's logistic workhorse (in its 34th year of service) is targeted
    for August 2004. Follow-on systems changes will introduce the network,
    sensors, weapons and survivability suites necessary for the multi-
    spectral battle group tasking.

                                    SUMMARY

        America's global security interests, recent world events and on-
    going operations in the Northern Arabian Sea and Afghanistan are
    validating both our past decisions with regard to aircraft, weapons and
    personnel, as well as our commitment to sustaining the readiness of our
    forces, which now routinely deploy in harm's way. Forward presence,
    maritime dominance, and decisive landward power projection in the
    littorals require modern aircraft and weapons systems capable of
    responding rapidly to a wide range of missions in an increasingly
    complex and demanding threat environment. We must plan, invest, and
    equip our maritime forces so they are shaped to bring overwhelming
    force to the fight. Naval aviation continues to make extraordinary
    contributions to the Nation's defense. We are committed to keeping
    naval aviation robust and relevant and we will keep faith with our
    warfighters in the fleet to ensure they have the aircraft and equipment
    necessary to engage in combat and prevail.

        Senator Kennedy. Maybe I could talk, Admiral McCabe, about
    the purchase of the F-18s. What is on the horizon now in terms
    of that issue?
        Admiral McCabe. We are very happy with the F/A-18E/F. The
    first E-F squadron and F-18E squadron deploys on Lincoln this
    June. The contractors provided for us exactly the airplane we
    asked of them, so we are very happy with it. We would like to
    buy it as fast as possible. With some of the challenges the CNO
    talked about and the framework of decision we face with paying
    for the manpower and then the readiness, we had to make some
    late decisions on the quantities that we were buying. But it is
    a top priority for us to buy that aircraft. We would like to
    replace the F-14s as rapidly as possible. The F/A-18E/F is half
    the cost of an F-14 to operate and so, while the F-14 has
    performed brilliantly even in Operation Enduring Freedom, it is
    time the move on to the new technologies. So we strongly
    support that airplane, Senator.
        Senator Kennedy. We might come back with you on that, on
    that issue. I would be interested in the justification and the
    changes that have been suggested.
        Admiral McCabe, we are obviously saddened by the loss of
    life in the V-22s over the last year. We heard from the panel
    to review the V-22 last year during the time we were trying to
    work out the problems. Can you describe now what the Navy and
    Marine Corps will need to do to ensure that the CH-46 fleet
    will support operating squadrons in the interim before we get
    to the V-22?
        Admiral McCabe. A great concern, more for the Marine Corps
    than us. We are going to replace our H-46s with the MH-60S and
    we will have our H-46s out of service by 2004 in September/
    October. The Marine Corps because of the V-22 delays will have
    to fly the H-46 for some time longer. Some of the engines in
    the H-46 case have been overhauled as many as ten times and so
    it is a concern. They have an engine improvement program, a
    monitoring system that is in place. But based on some of the
    recent challenges we have had, that bears close watch and it is
    a concern because of the age of those aircraft. I believe
    General Jones has said before there are H-46s that have been in
    service longer than he has.
        So it is something that NAVAIR SYSCOM pays very close
    attention to, probably more than any of the other aircraft we
    have.
        Senator Kennedy. Can you give us the update on the V-22?
        Admiral McCabe. Right now everything is on track for them
    to resume flying. The directed inspections and the
    improvements, the oversight----
        Senator Kennedy. Resume flying when?
        Admiral McCabe. I am not sure, Senator. I would have to----
        Senator Kennedy. There was a squib in the paper recently
    that it is very soon and we are interested in when that is
    going to take place. Also, as you are aware, the Feingold
    amendment required notification to Congress, I guess, 30 days
    before the flight.
        Admiral McCabe. Yes, sir. I do not believe they are that
    close, but they are making progress. I will get back to you
    with the specifics.
        But I know that we meet regularly with a broad audience at
    NAVAIR reviewing the progress of the airplane with oversight
    from OSD and senior Department of the Navy officials.
        Senator Kennedy. What is your conclusion on this? What is
    the progress that has been made?
        Admiral McCabe. I believe that the program manager is
    making good, steady progress, but from my standpoint on the
    Navy--the Marine Corps may have a different view--we need to
    proceed very carefully here and not rush back into operations
    and make sure that they have met every milestone and we are
    very confident that they will be successful from this point on.
    I do not believe we can accept any more failures.
        Senator Kennedy. That is true. But you will let us know
    about the time, because I understand that it is very soon. We
    are interested in your assessment as well, obviously, of the
    flight.
        Admiral McCabe. Yes, sir.
        [The information referred to follows:]

        As a result of two tragic mishaps that occurred, flight-testing was
    suspended while the V-22 Osprey program underwent an extremely
    rigorous, all encompassing USD(AT&L) directed review. This effort
    included two safety mishap investigations, a Blue Ribbon panel, a NASA
    independent review, and GAO and DODIG investigations and audits. These
    investigation teams, which included aviator. and testing experts from
    across industry, government agencies and academia, recommended many
    improvements to the program. Through this process the V-22 program and
    aircraft was modified to ensure safe flight operations. The return to
    flight report was delivered to Congress by the Defense Department via
    the acquisition chain of command on April 5, 2002, and the first flight
    is currently scheduled for mid-May 2002.
        After a detailed review of the program with the program manager and
    other officials involved in the review process, I believe the systems
    engineering approach established to address acceptable risk has been
    scrutinized and is sound. Senior leadership from both the Department of
    the Navy and Air Force have been following the review very closely and
    have expressed unanimous support. An active executive committee, with
    participation by Navy, Air Force, Marine Corps requirements and
    acquisition executives, testing agencies, and safety centers, along
    with industry representatives, has meet six times since June 2001 and
    will continue to provide detailed oversight to the testing and
    acquisition process. The consensus is that government and contractor
    management teams are well qualified, well led and motivated to make the
    program succeed.
        The OSD-directed review was rigorous and included 7,800 hours of
    scrutiny and analysis of the flight control system and 1,700 hours of
    lab tests to include pilot-in-the-loop simulation. The process included
    a ``triple lab'' analysis, which tied together a flight simulation lab,
    avionics integration lab and a flight control systems integration rig.
    This system, which tests actual flight control components in a
    laboratory environment, has been so successful that the Boeing Company
    plans to incorporate the process to verify flight control systems on
    their other platforms.
        Specific design changes incorporated as a result of the
    investigations include modifications to the hydraulic system, flight
    control system and software, and pilot emergency action procedures.
    Modifications were made to the hydraulic system including re-routing
    lines to improve clearances and reduce line chaffing. The system
    includes triple redundancy equivalent to commercial airliners systems.
    Modifications were made to the warnings, cautions and advisory
    annunciations and all 147 pilot emergency procedures were revalidated.
        The number of pilots involved in flight test has been reduced to
    ensure they are receiving adequate flight time for improved proficiency
    and a greater safety margin. The ground-testing program has been robust
    and included over nine hours of rotor turn time to ensure all systems
    are ready for flight. As a result of the depth and breadth of these
    positive changes, I am confident that the flight test program is ready
    to move forward.
        My assessment of the program is that it's back on track and, if
    they continue to meet cost, schedule and performance milestones safely,
    should continue to receive service, OSD and congressional support.

        Senator Kennedy. You have been following the progress and
    your top people have been monitoring that as well. If there is
    any difference in terms of it, we want to certainly know and
    have your input on that as well.
        Admiral Balisle, I want to talk a little bit about the ERGM
    program. Two years ago the Navy was projecting the ERGM program
    that would achieve initial operational capability in 2004. It
    slipped some 2 years from the original course last year. The
    Navy informed the subcommittee that ERGM will achieve IOC in
    2005. I know this has been an important part of the plans for
    improving fire support capability, but we seem to be
    experiencing continuing delays in the program.
        So how confident are you that the ERGM contracting team can
    solve the problems and remain on schedule?
        Admiral Balisle. Senator, ERGM is definitely a high tech
    program and is a new technology for our gun-fired ordnance, and
    it has had problems in the past as a result of that technology
    edge. We think the program has made considerable progress in
    the last year. It is now passing its tests. We believe that the
    design is sound. We have recently made a change in the ERGM
    projectile to go from a submunition to a unitary warhead, which
    is a more lethal warhead for the target set and also reduces
    risk, we feel, in that particular round.
        We believe fiscal year 2005 in the program, the way it is
    aligned now, is a reasonable target. But we certainly believe
    that the technology base now is solid and we think it will be
    successful.
        Senator Kennedy. The obvious concern is whether down the
    line we are going to have similar kinds of problems with the
    155 mm gun on the new destroyer.
        Admiral Balisle. Yes, sir.
        Senator Kennedy. Are there lessons to be learned from this
    that can be helpful so we can avoid problems?
        Admiral Balisle. Sir, we certainly think there are lessons
    to be learned. The technology in these rounds, GPS-guided
    projectiles and projectiles that have to be fired at a very
    high force when they come out of the gun, were all part of the
    learning curve. They will be common problems for the 155 mm
    gun. So it is our hope and belief that there will be a
    significant learning curve as we go to that technology.
        Senator Kennedy. Well, we want to keep abreast of that
    because that has important implications down the road.
        General Whitlow, on our mine warfare capability--as you
    well know, our continuing interest in this issue--Admiral
    Fallon indicated that the recommendation was to pursue other
    technologies to do the job. He is not specific about the
    program or programs that would meet the requirement. Your
    prepared testimony mentions a three-track corrective action
    program.
        So could you describe in some detail what are the program
    efforts under the three-track approach?
        General Whitlow. Yes, sir. I truly appreciate, Mr.
    Chairman, your continued interest in this very vital and
    important area, in particular since we are so involved with the
    littoral and shallow areas nowadays in our war on terrorism.
        Basically, as I spoke to earlier, the SABRE-DET program,
    very shallow, 10 feet and on, was cancelled for two reasons,
    and I will highlight that. There is some confusion that we do
    not have that type of capability, unfortunately. We do have the
    capability to clear mines in that arena; it is just not the
    capability we would like to have. We have to use special
    warfare divers and EOD type of divers to clear as well as
    mammals to work that region.
        But what we have done on the three-track program is step
    back once SABRE-DET was cancelled and look at where we were
    across the mine warfare spectrum, in particular the very
    shallow water. What we realized was, even if we would have been
    able to successfully employ and deploy the SABRE-DET system,
    which unfortunately while it was under development we did not
    look at other systems, we did not have the navigation systems
    in our assault craft to navigate down those lanes that we would
    have cleared.
        So the first track we are looking at is ensuring that we
    have the proper precision navigation in our craft. That is
    everything from the Marine Corps AAAV program to all of our
    landing craft the LCAC and the LCU.
        The second track we are looking at is exploring other
    options. One of the options you mentioned earlier----
        Senator Kennedy. Do you not have that? I mean, is that not
    the whole GPS, accurate, sufficiently accurate now with the
    progress made that it gives you an accuracy?
        General Whitlow. Yes, sir, we have the accuracy.
        Senator Kennedy. What is the problem, then?
        General Whitlow. Well, the problem we are exploring through
    the acquisition process, experimentation process, is delivery
    mechanisms and the lane marking. Once we drop the ordnance to
    clear such lanes, then marking those lanes so approaching
    craft--and being familiar with the sea, you certainly
    understand how difficult that can be. So sufficiently taking
    care of the mines below the surface in very shallow and then
    marking the lane at the same time to ensure that the aircraft
    and the landing craft have the same type of coordinates and are
    married up accurately enough not to put our combat forces in
    danger.
        The other area we are looking at is long-term and has
    already been--Senator Sessions has mentioned earlier the
    unmanned vehicles. That will be more long-term as we are just
    coming into the realization of how to appropriately use and
    deploy and retrieve if possible those types of systems. Such
    systems as the LMRS and the remote mine-hunting system will
    certainly help us along those ways to accomplish that mission.
        So we have the near-term----
        Senator Kennedy. How does that work, just conceptually?
        General Whitlow. Well, sir, what we are looking at, the CNO
    hit on it a little bit. We are looking at the littoral support
    ship being a class of ships. One of those class of ships, it
    would actually host a family of these systems, everything from
    the RMS, which is a fairly large remote mine-hunting system,
    would go out, deploy, and then it could possibly deploy sub-
    crawlers, if you will, to go into the very shallow water, not
    only to clear, detect and clear the mines, as well as mark the
    lanes.
        So we are looking at an entire family of systems. As I
    said, that is more long term, but the littoral support craft,
    if you will, will serve as the host to that. Those are
    basically the three tracks we are looking at.
        Senator Kennedy. The third one then is?
        General Whitlow. Unmanned. Yes, sir.
        Senator Kennedy. Then two is establishing the channels
    going in?
        General Whitlow. Yes, sir.
        Senator Kennedy. What is the third?
        General Whitlow. It is the step marking the channels and
    navigating the channel. Of course, the near-term third track is
    not only the precision navigation, there are off-the-shelf
    systems. If you fly a local Cessna, you can get a GPS system.
    But we need something a little more precision than that, but
    those types of systems for our landing craft.
        Of course, our near-term answer is the countermeasure
    systems we have now for neutralization, is our SEALs and EOD
    divers and mammals in the water, which is what we are trying to
    get away from as soon as possible.
        Senator Kennedy. My time is up. We will continue to pursue
    and follow. I must say, when I was out in the Gulf and I saw
    those mammals. That is one of the most mind-boggling
    experiences. Everyone sees those kinds of mammals down in the
    sea lanes or take our children to them. But to see how they
    were used at that time to be in patrol, for example, in order
    to detect, protect ships, was just enormously impressive. I did
    not know they were still using them.
        General Whitlow. They are very effective. But we would like
    to as soon as possible get them out of that business.
        Senator Kennedy. Yes. Thank you.
        Senator Sessions.
        Senator Sessions. Thank you, Mr. Chairman. I thank you for
    constantly keeping an eye on the question of mines. I was in
    the Persian Gulf last year on the mine countermeasures ship,
    the Ardent, which I understand is forward-deployed. It
    certainly would not be worthwhile to bring that rather slow
    ship all the way back to the United States. But it has worked
    well and I was impressed with that.
        Yesterday on an airplane flying back to Washington, I sat
    by a young Navy civilian who is also a naval reservist and
    works at the Mine Countermeasures Research Center, in Panama
    City.
        I talked with him all the way coming back. He graduated
    from Tuskegee Institute in Alabama and has done very well. I
    was impressed with all they had ongoing.
        First let me say I agree with Senator Kennedy. If there is
    a breakthrough in the capability of mines against American
    surface ships, then we have had a major strategic alteration of
    our military power, and our ability to project our power around
    the world as we would like.
        Are you satisfied that you have the equipment and the
    research funds necessary to make sure we stay ahead of that
    threat?
        General Whitlow. Yes, sir, I am. As you mentioned, the CSS
    system down at Panama City is doing tremendous work. We are
    funded correctly. The CNO has ensured that. The Secretary of
    the Navy has ensured that. I am not satisfied and will not be
    satisfied personally until we have solutions. But as far as
    funding goes, Senator, we are funded correctly. If I put more
    money toward the systems, frankly, I would probably be
    overfunded, because we have some physics issues that we just
    are not there yet, and some technology issues we just are not
    there yet.
        But as far as funding goes, we are funded correctly.
    Unfortunately, physics is standing in our way. But there is
    some tremendous progress and the remote vehicles as well as
    remote sensing is showing tremendous progress. You mentioned
    Panama City. That is where it is all taking place.
        Senator Sessions. Admiral Sullivan, although operations in
    the littorals are not new for submarines, the focus on
    submarines operating as a part of a battle group in the
    littorals is evolving. What is being done to address the
    challenges in submarine weapon and combat system development to
    make them more effective operating against littoral threats as
    part of a battle group there?
        Admiral Sullivan. Sir, as I mentioned in my opening
    statement, one thing we are doing is with our sonar systems,
    which are COTS-based, open architecture, and we are doing that
    with all our combat systems, including our weapons.
        If I could talk some about the LMRS, which is the mine-
    finding system that I sponsor and pay attention to, I think
    this is truly going to be the first autonomous vehicle that
    will go off and do 40-hour missions and be able to pass its
    data to the net, if you will, the satellites. You will be able
    to reprogram it.
        The sonar system that will be used to find mines is the
    LMRS precision underwater mapper (LPUMA) system, which is a
    high frequency, high resolution sonar system that we have
    tested at sea, most recently on the U.S.S. Scranton. We have
    had very good results with this. We are much further with the
    computer power we have to look for mine-like objects. This, if
    you will, is an underwater mapping system that has the
    resolution to be able to navigate and relocate mines. You would
    take this system and go survey areas. Particularly I would like
    to think of it that one of the missions of an SSGN with its
    payloads, it would be able to take a number of these vehicles
    to sea, survey an area. Then say you come back in a number of
    months and you want to use it for actual combat operations, you
    could survey it again and have the technology to take the
    difference, using a computer to see what was there before and
    what has changed and be able to figure out where the mines are
    so you could avoid them.
        On the weapons side of the systems, clearly a slow
    submarine or a submarine on the bottom is a very difficult
    target in the littoral. That is where we have made significant
    advances in the ADCAP Mod 5 and 6, which is more quiet and has
    more advanced sonar. But the real key will be the development
    of the CBASS torpedo, which will have a broad-band sonar to be
    able to operate successfully much better against a low doppler,
    a low, slow-moving target in the littoral. But that is clearly
    the most difficult challenge for a heavyweight torpedo to take
    out that type of target.
        As far as working with the battle group, as I mentioned,
    with our ability, submarines have always been considered
    disadvantaged communicators. We never really had the bandwidth
    or the ability to communicate with the battle group. As I
    mentioned with the Providence in her operations off
    Afghanistan, we really are not considered a disadvantaged user
    anymore. With the high data rate antenna, we are able to
    communicate on a par with the remainder of our surface forces.
        So I look at this as it is a significant challenge. We
    worry mostly, again, about the mine threat and also for the
    slow diesel submarine, because we are all about access. We have
    been making significant progress and the programs that we have
    in place are the right ones and funded correctly.
        Senator Sessions. As we focus this hearing to some degree
    on funding and making sure we have the kind of equipment and
    readiness that we desire, are you sufficiently funded to outfit
    your submarines with the technologies that have proven
    effective at this time?
        Admiral Sullivan. Sir, of course the answer is a bit open.
    You could always use more money, but I will use the ARCI as the
    best example. That system costs about one-thirtieth of the cost
    of the legacy systems. It has the equivalent of about 140 times
    the capability of one given ship 5 years ago. With our present
    programs, the last ship to deploy without that system on board
    overseas, the last SSN, will be in the fall 2003.
        So we have put a lot of money against our combat systems,
    systems that have proven to give us much greater capability.
    That is just one example, but we are pretty much on a good
    track, about as fast as we can.
        Another one is of course periscopes and digital systems. We
    have put a lot of money against that to be able to operate in
    the littoral among a lot of ships, a lot of fishing ships, a
    lot of contact avoidance, and shallow water. So I feel good
    about where we are, sir.
        Senator Sessions. Good. I think it is important that as we
    bring this new technology on. Oftentimes it is not that
    expensive to actually place it on vessels and other ships and
    vehicles, and we need to make sure we have that money.
        Thank you, Mr. Chairman. I will submit some additional
    questions for the record.
        Senator Kennedy. Senator McCain.
        Senator McCain. Thank you, Mr. Chairman.
        I just would like to ask Admiral McCabe a couple of
    questions. I know this has been a long hearing. Admiral McCabe,
    I understand there is a demonstration program in progress to
    provide contract in-flight refueling for Navy tactical
    aircraft. The Secretary of Defense in PBD-824 directed the Navy
    to conduct a pilot program for aerial refueling, including
    tanker aircraft.
        Has the demonstration provided responsive tanking and would
    you provide us with a few details?
        Admiral McCabe. Senator, Omega Air is a commercial 707
    reconfigured for tanking. It has been used primarily on the
    East Coast for fleet exercises to support tanking during those.
    We have used it for logistics flights nonstop from West to East
    Coast with some EA-6Bs and in fact used it to take the E-F over
    to the Singapore Air Show, to support that mission.
        To date the study is supposed to conclude in December, with
    a report back to us on the business case and effectiveness and
    the cost data in the January-February time frame next year. But
    I can report that the fleet is very happy with the performance.
    They have met all their commitments and there have not been any
    problems.
        Senator McCain. I have been briefed that the cost per
    flight hour is half the cost of an Air Force tanker. Is that
    correct?
        Admiral McCabe. I do not have specific cost data or
    information myself yet, Senator. I can check on that.
        Senator McCain. What has been the feedback from the fleet
    users?
        Admiral McCabe. Very positive. In fact, my EA is a former
    air wing commander from the East Coast who had opportunity to
    use that with his air wing and he was very positive about it.
        Senator McCain. What would it require to, for example,
    provide the required refueling capability throughout the Navy?
        Admiral McCabe. Well, we have a different problem in terms
    of the naval approach in tanking. We have used contract
    services for jamming, for fleet exercises. We use range
    clearance contract services. So close to the continental U.S.
    we have a decidedly different approach than we do on
    deployment, where we generally will use tanking. One of the
    reasons we like the E-F is it brings back A-6-level mission
    tanking and maxi-tankers. So we tend to tank carrier-based
    unless there is a joint asset from the Air Force available.
        Senator McCain. Would you provide for the record, please,
    the cost per hour of this contracting out of refueling so that
    we can compare it both with the Navy cost when the Navy is
    providing these services and the Air Force?
        Admiral McCabe. I would be happy to do that, Senator.
        [The information referred to follows:]

        The current study is scheduled to continue throughout this year,
    concluding in December. The findings will be published early in 2003.
        The cost of the commercial. tanker is relative to a United States
    Air Force tanker. The dry cost (no fuel) is $6,145 per flight hour for
    the Omega Air 707 versus $13,035 (with $2,125 of indirect support costs
    included) per flight hour for the KC-135. Additional per diem and
    travel costs for both are approximately equal while fuel consumption is
    1,500 gallons per flight hour for the KC-135 (with its most efficient
    engine) and 2,000 gallons per flight hour for the Omega Air 707. An
    informal study of Navy organic aircraft carrier tanker support costs
    provided by the S-3 Viking aircraft reveals a rough estimate of cost
    per flight hour to be approximately $12,627. The basis for cost
    comparison is difficult to fully rationalize due to the different
    missions and profiles of the S-3 when measured against tanker aircraft
    missions and profiles.
        To date, Omega Air has flown 90 tanking missions providing 1,056
    aircraft with 3.5 million pounds of fuel. They have met 100 percent of
    their scheduled events including east coast fleet exercises, JTFEX,
    COMPTUEX, Carrier qualification support, airwing repositioning cross-
    country, and escorting two F/A-18E/F aircraft from the United States to
    Singapore. All indications and reports from the fleet users are that
    they are satisfied with the performance of Omega Air.
        As I have mentioned, this study is incomplete as yet and the
    numbers and dollar figures provided are subject to change when the
    final report is issued. However, at this time this appears to be a very
    positive experiment with potential for the fleet.

        Senator McCain. I thank you.
        I thank you, Mr. Chairman. I thank the witnesses.
        Senator Kennedy. We want to thank all of you. We are very
    grateful for your presence and your presentation. We will look
    forward to working with you.
        The subcommittee is adjourned.
        [Questions for the record with answers supplied follow:]

                Questions Submitted by Senator Edward M. Kennedy

                            LHA REPLACEMENT PROGRAM

        1. Senator Kennedy. General Whitlow, 2 years ago at the request of
    the Department of the Navy, Congress provided $25 million and directed
    the Navy to conduct an AoA for replacing the aging Tarawa-class
    amphibious assault ships (LHA-1). You state in your written testimony
    that you expect to know the results on the AoA in June 2002, and yet
    the DOD budget proposal contains $10 million for advance procurement of
    LHD-9. Does this funding request prejudge the outcome of the AoA?
        General Whitlow. No. The results of the LHA(R) AoA are not
    predetermined. The preferred alternative may or may not be based on the
    LHD-8. The LHA(R) AoA is ongoing and will report out in summer 2002.
    Alternatives being considered include: repeat LHD-8 with evolutionary
    modifications, modified LHD-8 upgraded to enhance the ability to
    operate the larger and/or heavier new generation amphibious systems,
    and new ship designs spanning a wide range in size and capability.
    Based on the analysis presented in the AoA, the Navy will determine the
    optimal alternative for the LHA(R) as part of the LHA(R) program. The
    $10 million in the fiscal year 2003 budget request allows the Navy to
    begin refining the AoA selected alternative's detailed capabilities/
    characteristics and other developmental work.

        2. Senator Kennedy. General Whitlow, have you any insight into the
    findings of the AoA?
        General Whitlow. At this time I do not have any details beyond
    those mentioned above. But I can share my full confidence that the
    process will yield a range of alternatives from which the Navy and
    Marine Corps leadership can select the preferred solution that will
    best meet the needs of the Navy and Marine Corps current and future
    requirements.

                               P-3 MODERNIZATION

        3. Senator Kennedy. Admiral McCabe, I believe that we need to
    address the question of the P-3 community force structure. The P-3
    forces that operated in Kosovo acquitted themselves very well, and
    demonstrated the attractiveness of the anti-surface warfare improvement
    program, or AIP. Once again in Afghanistan, the P-3 AIP aircraft were
    star performers. Over the past decade, there does not appear to have
    been a substantial commitment to supporting the resources required to
    keep these aircraft forces modernized. Given how well these aircraft
    have performed in recent operations, why has the Navy chosen to buy
    only four P-3 AIP upgrade kits in the fiscal year 2003 budget?
        Admiral McCabe. In spite of the acknowledged effectiveness of the
    P-3C AIP in recent operations, competing priorities within naval
    aviation continue to preclude funding AIP at optimal rates. The four
    kits requested are viewed as representing the best balance attainable
    between requirements and affordability. Navy is however, continuing to
    examine funding options for this important capabilities upgrade. As an
    indication of the importance placed on this program, AIP requirements
    are included in the Chief of Naval Operations' Fiscal Year 2003
    Unfunded Requirements List submitted on 20 February 2002.

                  MARINE CORPS HELICOPTER PROGRAM COST GROWTH

        4. Senator Kennedy. Admiral McCabe, we understand that the program
    to upgrade the Marine Corps' utility helicopter and attack helicopter
    fleets has been experiencing cost growth again this year. It is not
    clear whether this is just the engineering and manufacturing
    development (EMD) portion of the program, or whether this may translate
    into higher recurring procurement costs. This contractor is also one of
    the prime contractors for the V-22 program. Can you describe what is
    the extent of the cost and/or schedule problems in this program?
        Admiral McCabe. The program has experienced an increase in both EMD
    and production costs. The EMD cost growth of $256 million (TY$)
    represents approximately 16 percent of the total program cost growth
    ($161 million) and includes funding for 10 months of additional
    schedule, risk reduction for OPEVAL, and requisite support funding to
    match the revised schedule. The production cost growth of $1,361
    million (TY$) represents approximately 84 percent of the total and is
    largely due to an update of the production estimate to reflect EMD
    actuals and updated pricing for the bill of materials.

        5. Senator Kennedy. Admiral McCabe, can you provide an assessment
    of what impact the delay in the V-22 program will have on the utility
    and attack helicopter upgrade program?
        Admiral McCabe. The delay in the V-22 program did impact the
    procurement of the AH-1Z/UH-1Y helicopters. However, the increased
    engineering and manufacturing development (EMD) effort on V-22 provided
    some offset to the reduction in V-22 aircraft quantities. The latest
    forward pricing rate agreement (FPRA) provided by Bell included
    adjustments supporting the current delay of the V-22 program. This FPRA
    was utilized to accurately adjust the H-1 cost estimate. The fiscal
    year 2003 budget has been adjusted consistent with the budgeted profile
    for V-22.

                         DD-963 WARFIGHTING CAPABILITY

        6. Senator Kennedy. Admiral Clark, Navy statements regarding early
    retirement of ships have tended to minimize the contribution of the DD-
    963. These destroyers have been providing a significant contribution to
    the Navy's ability to maintain the required number of Tomahawk missiles
    in theaters to support requirements of the theater commanders in chief
    under the Global Naval Force Presence Policy (GNFPP). In fact, I
    believe that several DD-963s just returned from Afghanistan operations
    having fired a number of Tomahawk missiles against priority targets.
        Since there is no chance that the Navy will have additional
    Tomahawk missile carrying capability in the near-term, isn't this
    action going to complicate the Navy's ability to maintain the required
    number of Tomahawk missiles in theaters to support requirements of the
    theater commanders in chief under the GNFPP?
        Admiral Clark. The Navy will be able to maintain requisite
    quantities of Tomahawk missiles in theater to support the requirements
    of the theater commanders in chief under the GNFPP, given the current
    DD-963 decommissioning schedule and the potential for further
    acceleration of DD-963 decommissionings. The Navy is continually
    commissioning new DDG-51 Class destroyers through the FYDP. These ships
    have launcher capacities of 96 Tomahawk-capable, vertical launch cells,
    as opposed to the 61-cell capacity of the DD-963 Class ships. The
    current DD-963 program of record decommissions assets at a rate of six
    ships per year. The last ship departs service in 2006 leaving the Navy
    with a loss of 1,159 launcher cells. The current DDG-51 program of
    record commissions ships in fiscal year 2003, three in fiscal year
    2004, four in fiscal year 2005, and two in fiscal year 2006, for a gain
    of 1,344 launcher cells by the end of 2006. This schedule produces a
    yearly net increase of launcher cells, and an overall net gain of 185
    Tomahawk-capable, vertical launch cells by the end of DD-963 class
    service.
                                     ______

                Questions Submitted by Senator Mary L. Landrieu

                                     LPD-17

        7. Senator Landrieu. General Whitlow, in your prepared testimony,
    you go to great length to stress the need to increase our amphibious
    lift capabilities. You state that the Marine Corps will not reach the
    2.5 MEB lift capability until the delivery of the 12th LPD-17. This is
    still .5 under the 3.0 MEB capability required to fully meet the threat
    of a major theater war. You comment that an acceleration of the LPD-17
    program will immediately increase our warfighting capability. At what
    rate would the LPD-17 program have to be accelerated in order to
    achieve a discernable difference in our warfighting capability?
        General Whitlow. Increasing the LPD-17 production rate to the
    original President's budget 2001 rate of two per year (currently one
    per year fiscal year 2004 through fiscal year 2009 with two ships in
    fiscal year 2008) would allow earlier decommissioning of the LPD-4
    class ships (five of which have already exceeded service life) and
    increase amphibious lift capabilities to the 2.5 MEB-assault echelon
    level by fiscal year 2012.

                          LANDING CRAFT AIR CUSHIONED

        8. Senator Landrieu. General Whitlow, I am very pleased to see that
    the LCAC is manufactured in New Orleans. The LCAC is, in essence, the
    successor vehicle to the Higgins Boats, which made an important
    contribution to victory in World War II, and was also manufactured in
    New Orleans. Today the LCAC is the primary platform for high speed
    transport of troops and equipment. With an ability to reach over 70
    percent of the Nation's coast lines, the LCAC is the key to executing
    expeditionary maneuver warfare. Currently, the President's budget calls
    for putting three LCACs through the SLEP. Is this enough to meet the
    Marine Corps' current needs, and, if not, how many more LCACs would
    have to go through the SLEP program in order for the Marine Corps' need
    to reach capacity?
        General Whitlow. The LCAC will continue to be a vital leg of our
    mobility triad providing high speed, over the horizon surface assault
    ship-to-shore movement of troops and equipment. The LCAC delivers the
    bulk of the rolling stock and combat equipment needed to generate the
    necessary rapid buildup of combat power ashore. The speed, range, and
    beach access afforded by the LCAC make it a key component in executing
    maneuver warfare from the sea. The LCAC SLEP program will extend the
    hull life of the craft to at least 30 years.
        The fleet commanders have determined 74 active LCAC are required.
    The Navy will concentrate its resources on ensuring a 30 year life can
    be achieved as well as incorporating urgently needed communication and
    navigation upgrades. The optimal time to SLEP the craft is between 18
    to 20 years of service life. Congress has authorized and appropriated
    four LCAC SLEPs through fiscal year 2002. The fiscal year 2003 request
    is for SLEPs number five to seven. To SLEP the craft at the 18 to 20
    years of service life point requires averaging between four to six
    SLEPs per year over the next 13 years. The minimum factory economic
    order quantity rate is four SLEP per year. Thus, an LCAC SLEP program
    that builds up to a steady state of six craft per year is both
    efficient and optimum for supporting the fleet commanders' needs.

                                 PERSONNEL GEAR

        9. Senator Landrieu. General Whitlow, most of our comments today
    have focused on the larger systems that are necessary for conducting
    war, but I think it is important that we focus on the personnel gear
    that the individual sailor and marine is issued. In the Emerging
    Threats and Capabilities Subcommittee, we have heard testimony from
    Special Operations Command on integrating off-the-shelf technology into
    our forces. There have been news reports out of Afghanistan (Marine
    Corps Times, February 18, 2002) that some of the new gear that the
    Marine Corps has developed recently simply did not stand up to the
    harsh conditions of the Afghan environment. Specifically, the new MOLLE
    packs that have been put into the fleet were reported to fall apart in
    the field. Is the expeditionary warfare Division aware of this problem
    and is it taking the proper steps to ensure that our marines are
    adequately equipped once they hit the ground?
        General Whitlow. As a marine, I am concerned that the equipment we
    develop, procure, and issue to our marines and sailors adequately meets
    the demands of the mission and environment. As the Director of the
    expeditionary warfare Division, I do not have influence or involvement
    with the development, selection, or procurement of basic issue and
    field equipment for our marines. However, I understand that Marine
    Corps Systems Command is working in conjunction with all intra-Marine
    Corps agencies to ensure all current and future equipment adequately
    addresses our marines' requirements to accomplish the mission in any
    assigned area or environment.

        10. Senator Landrieu. General Whitlow, are you looking at acquiring
    off-the-shelf technology to answer these problems?
        General Whitlow. I am certain that these issues are currently being
    addressed by Marine Corps Systems Command.
                                     ______

                  Questions Submitted by Senator Jeff Sessions

                       NAVAL GUN FIRE SUPPORT FOR MARINES

        11. Senator Sessions. General Whitlow and Admiral Balisle, the
    Marine Corps requirements for gun fire support were clearly stated in a
    1999 Marine Corps Development Center letter from General Rhodes to the
    Chief of Naval Operations. Admiral Balisle, your written statement is
    unclear regarding the Navy's ability to meet the Marine Corps
    requirements for fire support. Do you concur with previous Marine Corps
    witnesses who testified that the 155 advanced gun system is the only
    system that will meet all Marine Corps fire support requirements?
        General Whitlow and Admiral Balisle. The Marine Corps position on
    naval surface fire support (NSFS) requirements was recently updated in
    a March 2002 letter signed by Lt. Gen. Hanlon, Commanding General of
    Marine Corps Combat Development Command (MCCDC). Navy concurs with
    Marine Corps NSFS requirements.
        The development program for the 155mm advanced gun system (AGS)
    and munitions is focused on meeting Marine Corps NSFS gun requirements.
    However, Marine Corps NSFS requirements also call for other NSFS
    systems (missiles, rockets, other) with ranges objectively to 262nm in
    the 2010-2019 timeframe. In the near term, Navy is meeting the sea-
    based portion of the naval fires family of systems with the deployment
    of the 5,,/62 gun on DDGs and CGs, the introduction of the extended
    range guided munition in fiscal year 2005, and the introduction of
    tactical Tomahawk in fiscal year 2004. To meet future requirements,
    Navy will introduce the advanced gun system (AGS) and long-range land
    attack projectile in DD(X) while also considering options for a follow
    on ALAM.

        12. Senator Sessions. Admiral Balisle, your written testimony
    states that the 5,,/62-caliber gun and the extended range guides
    munitions ``are expected to meet USMC requirements in accuracy,
    lethality, and responsibility.'' Are there Marine Corps requirements
    that the 5,,/62-caliber gun and the extended range guides munitions
    will not meet?
        Admiral Balisle. The combination of the 5,,/62-caliber gun
    (presently being deployed on new construction DDGs and programmed for
    backfit on CGs as part of cruiser conversion) and the ERGM, (IOC fiscal
    year 2005) are Navy's programs to address Marine Corps near term and
    mid-term naval surface fire support (NSFS) gun requirements. Marine
    Corps NSFS requirements include responsiveness, range, accuracy, and
    lethality. Marine Corps gun range requirements are provided in a table
    below. 5,,/62 and ERGM meet Marine Corps NSFS requirements for
    responsiveness, accuracy, and lethality. They will be deployed to meet
    near and mid term threshold range requirements of 41nm and 63nm
    respectively. The advanced gun system (AGS) and munitions, planned for
    installation in DD(X), will focus on meeting all Marine Corps NSFS gun
    requirements.

    --------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                           Near-term  (fiscal     Mid-term  (fiscal      Far-term  (fiscal
                                                                                            year  2004-2005)       year  2006-2009)       year  2010-2019)
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    Range..............................  Naval Guns............  Threshold.............  41nm.................  63nm.................  97nm
                                                                 Objective.............  63nm.................  97nm.................  Limits of Technology
    --------------------------------------------------------------------------------------------------------------------------------------------------------

                          NAVAL COASTAL WARFARE FORCE

        13. Senator Sessions. General Whitlow, your written testimony
    points out there are ``critical readiness shortfalls, primarily in
    equipment deficiencies'' in the naval coastal warfare forces tasked
    with homeland defense. What are the shortfalls and how long will
    reservists continue to man and manage these efforts?
        General Whitlow. The naval coastal warfare force resides in the
    Reserve component and is comprised of three types of commissioned,
    hardware-equipped units that normally operate together as the NCW force
    package. These units are: (1) harbor defense command units (HDCU) that
    conduct command and control, communications, computers, and
    intelligence (C\4\I) operations using the Reserve-mobile ashore support
    terminal (RMAST) system; (2) mobile inshore undersea warfare units
    (MIUWU) that conduct littoral surface and subsurface surveillance
    operations using the radar-sonar surveillance center (RSSC) system with
    mobile sensor platforms (MSPs); and (3) inshore boat units (IBU) that
    conduct harbor patrol and interdiction operations using small boats.
    Units of each type in the existing force structure lack major equipment
    sets as indicated below.
        The inventory objective for NCW major equipment to complete initial
    outfitting of all units is as follows:

             22 radar-sonar surveillance centers (RSSC V.4) systems

             44 mobile sensor platforms (MSP) systems (2 per unit)
             11 Reserve mobile ashore support terminal (RMAST)
            systems (84)
             IBU small boats (six boats per unit).

        The inventory at the end of fiscal year 2003 is projected as
    follows:

             5 radar-sonar surveillance center (RSSC V.4) systems
             17 radar-sonar surveillance center (RSSC V.3) systems
            (*)
             28 mobile sensor platform (MSP) systems
             6 reserve mobile ashore support terminal (RMAST)
            systems
             64 IBU small boats.
        * Note: RSSC V.3 van systems require upgrade to V.4 configuration
    (HMMWV mounted)
        The balance of the inventory objective to be completed by the end
    of the FYDP is as follows:

             17 radar-sonar surveillance centers (RSSC V.4) systems
             16 mobile sensor platforms (MSP) systems
             5 reserve mobile ashore support terminal (RMAST)
            systems
             16 IBU small boats.

        Navy has funded and is currently in the process of equipping and
    manning a new active capability within the naval coastal warfare
    organization called the mobile security force. Once this new Active
    component is fully stood up and ready for deployment Reserve NCW units
    will no longer exclusively fill the homeland defense role but will
    continue to assist in the naval coastal warfare mission.

        14. Senator Sessions. General Whitlow, have the equipment
    shortfalls been addressed either by the supplemental for fiscal year
    2002 or this budget request?
        General Whitlow. Part of the equipment shortfalls identified above
    have been addressed by the fiscal year 2002 supplemental and the fiscal
    year 2003 budget request. Specifically, $14.4 million in supplemental
    Defense Emergency Response Fund (DERF) funds have been allocated to the
    NCW program. These funds are being used to procure 36 small boats to
    outfit inshore boat units (IBU) to the six-boat standard required for
    sustained port security operations. Delivery of these boats should
    begin in first quarter fiscal year 2003. Funding for an additional four
    boats is included in the fiscal year 2003 budget request. Additional
    funding will be needed for 16 boats to complete outfitting of all 14
    IBU units. Funding for procurement of one additional mobile sensor
    platform (MSP) is also included in the fiscal year 2003 budget request.
    Funding for an additional 15 MSPs will be needed to complete outfitting
    of all 22 MIUW units. No funding is available at present to address
    shortfalls in RMAST systems or to provide for conversion of existing
    RSSC V.3 van systems to RSSC V.4 HMMWV configured systems. These
    shortfalls will be addressed in future budget requests.

                       COMMON REQUIREMENTS AND EQUIPMENT

        15. Senator Sessions. General Whitlow, Admiral Balisle, Admiral
    Sullivan, and Admiral McCabe, your divisions have requirements for
    unmanned undersea vehicles and aircraft-towed unmanned vehicles. What
    is done within your organizations and the corresponding field
    activities to ensure that the taxpayer is not paying more than once for
    development of common subsystems for unmanned vehicles and how do you
    share information with the unmanned vehicle efforts from other
    services?
        General Whitlow, Admiral Balisle, Admiral Sullivan, and Admiral
    McCabe. N70, the Warfare Integration and Assessment Division, has
    responsibility for assuring coordination of unmanned vehicle activities
    across all the Chief of Naval Operation divisions. This includes N75,
    N76, N77 and N78. N70 oversight facilitates the sharing of program and
    technology information in unmanned systems. A key example of this is
    the tactical control system (TCS). TCS is a joint Service program
    sponsored by N78 to provide a common software architecture for unmanned
    aerial vehicle (UAV) ground control stations (GCSs). TCS, when fully
    implemented, will allow UAV GCS personnel to operate and share data
    from any of the Services' UAVs. This same architecture is now being
    considered for application to naval unmanned surface vehicles (USVs)
    and UUVs.
        N78, the Air Warfare Division, is responsible for Navy UAVs and
    aircraft-towed unmanned vehicles, which include decoys and a variety of
    sensors used in undersea warfare. UAVs are vehicles that are controlled
    from the ground and fly under their own power and are different from
    towed decoys and sensors.
        Based on a memorandum of agreement last year, N75, the
    expeditionary warfare Division, transferred all their concerns and
    responsibilities for UAV platforms to N78. Warfighters in N75 mission
    areas will be users of common fleet UAV assets. N75 retains the
    responsibility to set naval expeditionary warfare requirements that can
    be fulfilled by N78-developed UAVs.
        N75's requirements may also be met through the use of unmanned
    surface or undersea vehicles. In very shallow water, N75 develops
    programs for mission requirements in mine countermeasures (MCM) and
    amphibious assault. N75 is developing man-portable very shallow water
    (VSW) UUVs for EOD mission areas in MCM.
        N75 is the sponsor for mine warfare systems in the fleet's
    dedicated and organic MCM forces, including the semi-submersible remote
    minehunting system (RMS), deployed by surface ships. As an example of
    system interoperability, the RMS will tow the same AQS-20(X) sonar
    system that is being developed for the MH-53E and MH-60S helicopters.
    N75 coordinates transition plans for emerging platforms and payloads
    through membership in the Organic Mine Countermeasures Future Naval
    Capabilities Integrated Product Team. N75 develops the annual U.S.
    Naval Mine Countermeasures Certification Plan, annually forwarded by
    the Secretary of Defense to the Congress.
        Although N76, the Surface Warfare Division, has requirements for
    unmanned vehicles in future ships, the division has no unmanned vehicle
    programs of its own. N76 intends to leverage the development of
    unmanned vehicles from existing programs in the Navy and other
    services.
        N77, the Submarine Warfare Division, is responsible for unmanned
    undersea vehicles. N77's UUV efforts include the long-term mine
    reconnaissance system (LMRS) and the mission reconfigurable UUV
    (MRUUV), both of which are unique systems satisfying specific
    requirements. There are no other efforts among the Warfare Divisions
    that duplicate these systems.
        There are a number of other venues that the Navy and the other
    Services use to share information, collaborate on joint efforts, and
    avoid duplication of efforts in unmanned systems. DOD/Service
    laboratories, System Commands, and other field activities participate
    in all these venues. These include:

             The Autonomous Operations (AO) Future Naval
            Capabilities (FNC) Integrated Product Team (IPT) includes
            membership from N76, N77, N78, the Marine Corps, and the Office
            of Naval Research (ONR). The AO IPT provides senior level
            oversight and direction to assure that exploratory and advanced
            development investments made by ONR support warfighter needs.
            Field activities such as the Naval Research Laboratory, Naval
            Air Systems Command, Naval Sea Systems Command, Marine Corps
            System Command, and Space and Naval Warfare Systems Command
            participate in the IPT and manage and perform the work efforts.
            In addition to air, water surface, and underwater unmanned
            vehicle systems, the IPT also addresses unmanned ground
            vehicles (UGVs) in support of the Marine Corps. The focus of
            the AO IPT is development of autonomous system architecture and
            software, sensors, and advanced propulsion systems that have
            applicability to all unmanned systems. Unmanned systems are
            also addressed in other FNC IPTs including time critical strike
            and total ownership costs.
             In April 2000, the Assistant Secretary of the Navy for
            Research, Development, and Acquisition and the Vice Chief of
            Naval Operations (VCNO) designated N77 as the primary point of
            contact for unmanned undersea vehicles for the purpose of
            developing synergy for the Navy's various UUV programs. N77 is
            the chair of the UUV Executive Steering Group (UUV ESG) that
            meets at least annually to provide a forum for coordination of
            UUV issues within the Department of the Navy. N75, N76 and N78
            are charter members of the UUV ESG.
             At the Office of Secretary of Defense (OSD) level, the
            Under Secretary of Defense for Acquisition, Technology, and
            Logistics (USD(AT&L)) provides oversight management of Service
            UAV and UGV programs to promote synergies in areas of common
            interest and avoid duplication of efforts. In particular,
            USD(AT&L) chairs the UAV Planning Task Force that is chartered
            as the focal point to assure that UAV programs proceed in a
            coordinated manner. The Planning Task Force has initiated a
            number of IPTs addressing: communications; sensors; small UAVs;
            airspace operations; tasking, processing, exploitation, and
            dissemination; platforms; weaponization; technology, and
            standards/formats. All the Services, the Joint Staff, the
            Service Laboratories, and Defense Agencies such as the Defense
            Advanced Research Projects Agency (DARPA), the National
            Security Agency (NSA), and the National Imagery and Mapping
            Agency (NIMA) participate in the IPTs. IPT results will be
            incorporated into the next version of the OSD UAV Roadmap that
            is expected to be published by the end of calendar year 2002.
             UAV matters are also reviewed by the Joint Staff-
            sponsored UAV Special Studies Group (SSG). The UAV SSG is a
            two-star level group with representatives from all the Services
            requirements organizations that meets on an as-needed basis to
            address UAV requirements, areas of common interest, and issues
            requiring resolution.
             All unmanned system requirements having joint service
            interest or potential interest are reviewed and validated the
            Joint Requirements Oversight Council (JROC). The JROC is four-
            star level body consisting of the vice/assistant chiefs of all
            the Services.
             Lastly, in order to share technology and program
            information and ideas with the unmanned systems industrial
            base, the Navy sends representatives to public meetings of the
            Association of Unmanned Vehicle Systems International (AUVSI).
            AUVSI sponsors symposia and meetings that review unmanned
            system programs and technology. Many of these symposia and
            meetings are attended by over 1,000 government and industry
            participants.

                      BATTLE GROUP COMBAT SYSTEMS TESTING

        16. Senator Sessions. Admiral Balisle, it is not clear that the
    pre-deployment battle group integrated combat system testing and
    resulting correction plans are achievable given the expected compressed
    inter-deployment cycles. What is the importance of integrated combat
    systems testing through the Distributed Engineering Plant, and what is
    the status of that testing for battle groups deploying in the next 18
    months?
        Admiral Balisle. Importance of Testing in the Distributed
    Engineering Plant: In May 1998, the Chief of Naval Operations (CNO)
    assigned the Commander, Naval Sea Systems Command (COMNAVSEASYSCOM)
    responsibility for addressing interoperability issues within the
    Systems Commands (SYSCOMs) and the Program Executive Offices (PEOs).
    The CNO also tasked COMNAVSEASYSCOM with coordinating the resolution of
    interoperability issues with the fleet. Specifically, COMNAVSEASYSCOM
    was tasked to develop policy and architecture for battle force warfare
    systems engineering, implement a common warfare systems engineering
    process, and provide top level direction for fielding and support of
    balanced combat systems for ships and submarines. COMNAVSEA has
    responded with processes and tools that include:

             The deployment minus 30 months battle force
            certification process (D-30 Process)--a disciplined process to
            maintain configuration management for deploying battle forces
             The distributed engineering plant (DEP)--a nation-
            wide, shore-based test network designed to test
            interoperability at the battle force level
             Battle force interoperability test (BFIT)--testing
            which is executed on the DEP in an effort to identify and
            characterize interoperability problems within the deploying
            battle force
             Battle force interoperability requirements (BFIR)--a
            metric used to measure and predict the total force performance
            and interoperability
             BFIT Analysis Review Panel (BARP)--responsible for
            analyzing BFIT results, and for the direct reporting of trouble
            reports, workarounds, capabilities/limitations, and BFIR
            performance metrics to each deploying battle force staff
             Battle force capabilities and limitations (CAPS/LIMS)
            document--a document which captures the results of BFIT
            testing, supports the optimizing of system configurations and
            supports warfighter training, based on realized capabilities of
            systems and computer programs available within the BG/ARG/MEF
             Operational Advisory Group (OAG)--the senior military
            and civilian stewards of the Force interoperability problem
            resolution process.

        BFIT certification of deploying battle group configurations is
    accomplished through the utilization of the Navy's distributed
    engineering plant (DEP). The plant provides a shore-based operational
    mock-up of combat systems located at multiple Navy land-based sites
    connects them via asynchronous transfer mode (ATM) networking
    technology. The DEP provides the only opportunity for comprehensive and
    repeatable interoperability testing of combat system and command,
    control, communications, and intelligence (C\4\I) items prior to
    shipboard delivery for operational use in surface combatant platforms
    and battle group units. Since its inception, the DEP, in concert with
    these force systems engineering tools, has proven indispensable for the
    development of interoperable and effective naval forces.
    Interoperability and capability improvements to date have been
    noticeable to the operators as well as quantifiable via the BFIR
    metrics. Translated into operational terms, Navy can quantify, with the
    DEP, battle space ``bought back'' through implementation of
    interoperability fixes. Highly favorable fleet feedback has been
    continuous and documented in many forms.
        Status of Testing in next 18 Months due to Accelerated Deployments:
    The DEP and BFIT testing process was established prior to the
    implementation of CINCLANTFLT/CINCPACFLT Instruction 4720.3A which
    instituted the D-30 process. The BFIT process, established against an
    accelerated pace of deployments, stands ready to handle the dynamics of
    the wartime tempo and has proven its ability to adjust to any level of
    change. The DEP teams have dealt with changing dynamics of battle force
    configurations since the first BFIT. Since the events of September 11,
    2001, the DEP teams have successfully dealt with perturbations in
    operating tempo of the following magnitude:

             Major battle force composition changes 2 weeks prior
            to DEP testing
             Multiple battle force platform configuration changes
             Three battle groups tested and reported in one BFIT--
            included were the U.S.S. Kitty Hawk (CV-64) forward deployed
            naval force, and the Lincoln and George Washington battle
            groups (fall fiscal year 2001)
             BFIT Regression test of the U.S.S. John F. Kennedy
            (CV-67) battle group (December fiscal year 2001)
             Two battle groups tested and reported in one BFIT
            (Spring fiscal year 2002)
             Numerous engineering and developmental events
            conducted/supported
             Preparation for U.S.S. Nimitz (CVN-68) BFIT in late
            summer.

        The upcoming battle force deployment schedules are no more
    stressful than the schedule already encountered. Given the processes,
    efficiencies and capabilities established by the DEP teams and the
    associated force systems engineering teams over the past 4 years, the
    outlook for the next 18 months of battle force deployments is certainly
    achievable given sustained funding of the COMNAVSEA programs. COMNAVSEA
    currently has an unfunded requirement on the fiscal year 2002
    supplemental list for its efforts in response to the increased wartime
    posture and tempo.

                   U.S.S. COLE DAMAGE CONTROL LESSON LEARNED

        17. Senator Sessions. Admiral Balisle, the Senate report
    accompanying our bill last year directed the Secretary of the Navy to
    provide: (1) battery powered, long distance emergency communications
    capability to all units before they deploy overseas; and (2) self-
    contained emergency breathing apparatus to all vessels during their
    next scheduled selected restricted availability. Also, recent feedback
    from the an officer in the operating fleet indicates there have been no
    U.S.S. Cole damage control lessons learned promulgated to ships. Has
    the Navy complied with the Senate's direction on providing ships the
    communications and emergency breathing equipment?
        Admiral Balisle. Prior to U.S.S. Cole, OPNAV N6 procured 97
    manpack-type UHF SATCOM or line-of-sight (LOS) capable battery powered
    radio units (AN/PSC-5 produced by Raytheon and PRC-117F produced by
    Harris) to augment the fleets communications ability. These units were
    provided to the fleet CINCs for distribution as appropriate. Following
    U.S.S. Cole,  an additional 200 Iridium satellite-based telephones were
    acquired and provided to the fleet CINCs for distribution as
    appropriate.
        Significant funding ($85 million fiscal year 2003 to fiscal year
    2007) was added in PR03 to accelerate installation of SCBAs on USN
    ships. Additionally, $4 million of fiscal year 2002 Defense Emergency
    Response Fund (DERF) funds were provided to further accelerate this
    Cole lessons learned item. This funding will allow all USN ships to be
    outfitted with SCBAs by fiscal year 2008. The current funding profile
    will not support installing SCBAs in every ship during its next SRA.

        18. Senator Sessions. Admiral Balisle, what is the status of
    promulgating damage control lessons learned including equipment to
    ships?
        Admiral Balisle. Cole survivability lessons learned were
    promulgated via secret naval message in July 2001 (DTG 061824Z July
    2001). Additionally, PEO (Theater Surface Combatants) provided a
    detailed briefing to the following: NAVSEA, SURFLANT, SURFPAC, DESRON
    22, CINCLANTFLT N43, SWOS, SPAWAR, selected congressional staffers,
    LANTFLT Type desk DC, and Afloat Training Group (Norfolk, Mayport, San
    Diego).
        As a result of Cole lessons learned, several items were proposed to
    either increase the ships outfitting or to provide a new capability in
    order to increase crew safety and ship survivability. The Navy was
    provided $6 million of fiscal year 2002 DERF for the procurement and
    distribution of this equipment. The table below lists the items being
    procured and the planned delivery date. These items will be delivered
    to 122 ships in two separate ``kitted'' shipments with all material
    being delivered by the end of fiscal year 2002.

                       Item                      Expected Delivery to Ships

     1. Leather Palm Gloves...................  June 2002
     2. Forcible Entry Tool...................  June 2002
     3. Web Belt (Tool belt)..................  June 2002
     4. P100 Pump Adapter.....................  June 2002
     5. Reflective Marker Tape................  June 2002
     6. Digital Camera........................  June 2002
     7. Non-Skid for Escape Trunk.............  August 2002
     8. Damage Control Light Streamers........  August 2002
     9. Diesel Generator......................  August 2002
    10. Additional Emergency Egress Breathing   August 2002
     Devices (EEBD).

     SURFACE SHIP SELF-DEFENSE/ADVANCE INTEGRATED ELECTRONIC WARFARE SYSTEM

        19. Senator Sessions. Admiral Balisle, what is your assessment of
    the present electronic warfare ship self-defense capabilities and
    programs, and have you adjusted any programs recently?
        Admiral Balisle. Although aging, our EW self-defense capability is
    sufficient to counter today's threat, which is becoming smaller,
    faster, lower, and more maneuverable. The continued installation of the
    Nulka active off-board decoy on our CGs/DDGs ensures our deploying
    battle groups have an effective measure of self-defense against today's
    deployed threats. Upgrades to the Nulka decoy payload will ensure we
    remain ahead of the threat. We will additionally begin installations on
    FFG and LPD-17 class ships. With respect to program adjustments, the
    Navy has regretfully decided to cancel the AN/SLY-2 advanced integrated
    electronic warfare system (AIEWS) program because of program
    instability, cost growth, and development delays that were adversely
    impacting the Navy's ability to field urgently needed surface EW
    improvements to the fleet. The AIEWS program provided ``leading edge''
    technology development, yielding an exceptional array of technologies
    with significant promise to improve surface electronic warfare
    capabilities in legacy and future systems. The Navy is instituting a
    block upgrade improvement approach for surface ship electronic warfare
    (EW) that will provide incremental upgrades to the fleet, using the
    current AN/SLQ-32 (V) system as the starting framework. This strategy
    will facilitate a greater number of ships receiving much needed EW
    improvements in the near-term, while additional improvements will
    continue to be competitively developed and fielded as both
    technological advances and budgetary resources allow. This will consist
    of block capability upgrades pacing the threat and developing an
    advanced EW capability eventually replacing the AN/SLQ-32(V) system.
    Preliminary planning is for five overlapping blocks. Block 1 will
    provide improved human/computer interface (Q-70 consoles) and a new
    computer for better processing. Block 1A will include specific emitter
    identification (SEI) capability. Block 2 will include a new receiver
    package that includes a special signal receiver and new computer
    language. Blocks 3 and 4 will include receiver replacements and an
    advanced RF and IR electronic attack subsystem with advanced offboard
    countermeasures. This approach will feature an open system architecture
    allowing the insertion of new technologies and capabilities without
    major system redesign.

                   FIRE SUPPORT WEAPONS REPLENISHMENT AT SEA

        20. Senator Sessions. General Whitlow and Admiral Balisle, the Navy
    and Marine Corps have not previously agreed on the requirement to
    replenish fire support weapons at sea. The 1999 Marine Corps
    Development Center letter from General Rhodes to the Chief of Naval
    Operations described the Marine Corps requirements for naval surface
    fire support as follows: 63 nautical mile range, 2.5 minute response
    time, ``high volume suppressive and neutralizing fire . . . there must
    be a capability to provide inexpensive munitions that satisfy the high
    volume of fire requirement,'' and the ``Marine Corps requires that all
    surface fire support weapons be easily sustainable via underway
    replenishment'' at sea. The Navy's position was never clear regarding
    the replenishment capability for fire support missiles. What is the
    current status of at sea replenishment requirements for fire support
    weapons?
        General Whitlow and Admiral Balisle. The ability to sustain surface
    fire support systems via underway replenishment is an important
    warfighting requirement. The Navy is very capable of at sea
    replenishment of the naval gun ordnance needed to support the naval
    surface fires mission, which includes support of marines ashore.
        There are no research and development investments planned to fund
    improvements to the replenishment systems currently fielded to support
    UNREP of VLS celled missiles. There is, however, an ongoing future
    naval capability (FNC) initiative to develop a heavier underway
    replenishment (UNREP) lift capability from the existing 5,700-pound
    system to 12,000-pound capability. Navy has also identified transition
    funding to bring this capability into the logistics force ships,
    starting with a backfit to the Lewis & Clark (T-AKE)-class combat cargo
    and ammunition ship in the fiscal year 2008 to fiscal year 2009
    timeframe. To optimize NSFS deployment, available near term funding is
    being directed toward increasing ordnance inventory and fielding NSFS
    systems. Development of an UNREP capability for NSFS missiles continues
    to be assessed in terms of warfighting benefit and affordability.
                                     ______

                   Questions Submitted by Senator John McCain

                                  T-5 TANKERS

        21. Senator McCain. Admiral Clark and Admiral Balisle, on February
    8, Admiral Church, USN, delivered to Congress the Department of the
    Navy's ``Fiscal Year 2003 Budget Overview.'' On page 18 of the Navy's
    budget brief is a slide called ``Promote Better Business Practices,
    Managing the Department in a Business-like Manner.'' I noticed a bullet
    that states ``T-5 Tanker Buyout.'' Will you please tell why the Navy
    has decided in its fiscal year 2003 budget to buy the T-5 Tankers
    rather than to continue to lease them as was the plan several years
    ago?
        Admiral Clark and Admiral Balisle. The T-5 tankers were leased in
    the early eighties rather than purchased because of the budgetary
    circumstances that existed at the time. When the ships were leased, the
    Navy negotiated for favorable purchase options that, conditions
    permitting, could be exercised at the appropriate time. Those
    conditions exist and that time is now. We have a continuing need for
    these vessels beyond their lease terms, which end in 2005 and 2006. If
    we let our options expire, we will end up chartering (leasing) higher
    cost replacement tankers.

        22. Senator McCain. Admiral Clark and Admiral Balisle, so let me
    understand you--``it is cheaper to buy the tankers and MPS (maritime
    pre-positioning ships) outright than it is to continue to pay the
    lease''--is that correct? I think I agree with the Secretary of the
    Navy and OMB Director Mitch Daniels who blames free-wheeling leases for
    outlandish cost overruns in government programs in the past.
        Admiral Clark and Admiral Balisle. Yes. Exercising our lease
    options to purchase will provide significant cost savings. It is
    cheaper to purchase these ships than to continue leasing. However,
    purchase requires a large expenditure in the year that the ships are
    purchased. Due to the nature of the Navy's T-5 purchase options, we get
    the greatest overall savings if we buy the ships and end their leases
    two years before the conclusion of the present 20 year terms--when that
    is coupled with a continued use of the ships. The same is true for the
    MPS, but their lease terms are 25 years and we estimate that their
    optimum buyout point will be in fiscal year 2007. The key is to
    purchase the ships when they are most affordable during the lease cycle
    in order realize the optimal future stream of savings.

                                     LHD-9

        23. Senator McCain. General Whitlow and Admiral Balisle, in a
    January 28, 2002 article, ``Responding to Lott, DOD Starts Funding LHD-
    9 And One More DDG-51,'' by Chris Castelli in the publication Inside
    the Navy, the article states:

            ``At the urging of Senate Minority Leader Trent Lott
            (Republican--Mississippi), the Pentagon has made last minute
            adjustments to the Navy's shipbuilding plan in the Bush
            administration's fiscal year 2003 budget. The Pentagon put $74
            million more toward a third DDG-51 destroyer and allocated $10
            million in advance procurement for a ninth amphibious ship LHD
            9--that was not previously in the Navy's budget.''

        Is this true, yes or no?
        General Whitlow and Admiral Balisle. The OSD Comptroller made two
    late changes to the Navy's fiscal year 2003 shipbuilding budget request
    by adding $74 million in advance procurement funding for a third DDG-51
    destroyer in fiscal year 2004, and shifting $10 million for advance
    procurement funding for an fiscal year 2008 LHD-9. Any specific
    questions on the factors that precipitated the decision for these
    shifts should be referred to the OSD Comptroller.

                                LHA REPLACEMENT

        24. Senator McCain. General Whitlow and Admiral Balisle, can you
    provide the status of the AoA to replace the current LHA with an LHA
    (R)?
        General Whitlow and Admiral Balisle. The LHA Replacement [LHA(R)]
    AoA is scheduled to complete in the summer of 2002. The AoA is
    evaluating several alternatives including a repeat LHD-8, a modified
    LHD-8, and entirely new ship designs.

        25. Senator McCain. General Whitlow and Admiral Balisle, are you
    also aware that the Comptroller in the Office of the Secretary of
    Defense deleted the funding for the study on the AoA cutting $16
    million from the RDT&E effort for the LHA replacement?
        General Whitlow and Admiral Balisle. The Department is aware of
    this situation. During the November 2001 review of the Navy's fiscal
    year 2003 budget request, the OSD Comptroller's Office deleted fiscal
    year 2003 and fiscal year 2004 research, development, test, and
    evaluation (RDT&E) funding for the LHA(R) program.
        LHA(R) R&D funding throughout the FYDP was briefed to and approved
    by OSD (including the OSD Comptroller) at Milestone A as the minimum
    RDT&E funding necessary to support the least expensive LHA(R) AoA
    alternative--a repeat LHD-8. Since the AoA completes in fiscal year
    2002, this fiscal year 2003-2004 RDT&E deletion does not directly
    impact the AoA study, the AoA final report or the Navy's ability to
    decide which LHA(R) alternative to pursue. However, the Department of
    the Navy will select a preferred alternative based on the results of
    the AoA and adjust RDT&E and SCN profiles as required to move forward.

        26. Senator McCain. General Whitlow and Admiral Balisle, does the
    $10 million in advance procurement for LHA-9 that was added by the OSD
    Comptroller according to the Castelli article predetermine the results
    of the AoA?
        General Whitlow and Admiral Balisle. No. The results of the LHA(R)
    AoA are not predetermined. The LHA replacement analysis of alternatives
    is ongoing and will report out in summer 2002. Alternatives being
    considered include: repeat LHD-8 with evolutionary modifications,
    modified LHD-8 upgraded to enhance the ability to operate the larger
    and/or heavier new generation amphibious systems, and new ship designs
    spanning a wide range in size and capability. Based on the analysis
    presented in the AoA, the Navy will determine the optimal alternative
    for the LHA replacement as part of the LHA(R) program. The preferred
    alternative may or may not be based on the LHD-8. The $10 million in
    the fiscal year 2003 budget request allows the Navy to begin refining
    the AoA selected alternative's detailed capabilities/characteristics
    and other developmental work.

        27. Senator McCain. General Whitlow and Admiral Balisle, you know
    that I have traveled to Afghanistan with other members of this
    committee. While there, I heard from several Navy and Marine Corps
    officers that the number one concern for replacing the LHA is safety
    because of a stability problem or high center of gravity issue,
    especially with deployed aircraft. Their concern was that even with
    some minor fixes with fuel compensation systems, the problem will be
    exacerbated when the service deploys larger aircraft, such as the
    Osprey (MV-22) and the Joint Strike Fighter (JSF), which are
    replacements for the CH-46 and AV-8B respectively. I am told that the
    MV-22 is twice the weight of the CH-46 and that the JSF is believed to
    be about twice the weight of the AV-8B. Does the LHD class have similar
    stability problems as the LHA class, and would you agree that the
    problem could be exacerbated with the planned future aircraft and
    vehicles envisioned for the Marine Corps?
        General Whitlow and Admiral Balisle. The seven ships of the LHD
    class have improved stability characteristics over the LHA class and
    therefore do not experience weight and center of gravity issues to the
    same extent as the LHA. For example, LHD-7, commissioned in 2001, has
    greater than the required 1,000 long tons of service life weight growth
    allowance.
        LHDs have the growth allowance to accommodate MV-22 and JSF with
    aggressive weight control measures and the fuel oil compensation ship
    alteration although LHDs have less vehicle storage space (square
    footage) than LHAs.
        The Navy's five LHAs need to be replaced as soon as possible, as
    they are rapidly reaching the end of an already extended service life.
    The LHA(R) AoA was initiated to ensure that both Marine Corps and Navy
    21st century requirements are addressed, including the issues you raise
    regarding the impact of heavier and larger aircraft/vehicles and
    overall amphibious force vehicle storage area. An LHD repeat is just
    one of several alternatives being considered in the LHA(R) AoA to meet
    requirements.

        28. Senator McCain. General Whitlow and Admiral Balisle, what
    growth percentages are currently planned for the LHD class of ships?
        General Whitlow and Admiral Balisle. The CNO-specified minimum
    service life allowance for the LHD class at delivery from the shipyard
    is 1/2 foot for vertical center of gravity reserve and 1,000 long tons
    (about 2.5 percent) of displacement service life reserve. The
    requirement is documented in the LHD Class Top Level Requirements
    document.

        29, 30. Senator McCain. General Whitlow and Admiral Balisle, is the
    LHD a good replacement for the LHA class of ships, considering that the
    ship does not meet the requirement in planned future vehicles and
    aircraft for the Marine Corps or our special operations community and
    considering the amphibious lift requirement of 2.5/3.0 MEB?
        Because of the well deck inside the LHD, isn't the LHD available
    square footage less than the LHA?
        General Whitlow and Admiral Balisle. The ongoing LHA(R) analysis of
    alternatives is addressing whether the LHD is a good replacement for
    the LHA class. Continuing to build LHDs, as well as ship design
    modifications to enhance the capability to operate the larger and
    heavier new generation amphibious systems are currently being examined
    as options. The analysis of alternatives is also investigating the
    optimum way to reach the fiscally constrained amphibious lift
    requirement of 2.5 Marine expeditionary brigades. The analysis of
    alternatives is expected to report out later this year and will present
    its conclusions at that time.

        31. Senator McCain. General Whitlow and Admiral Balisle, it seems
    to me that the LHD is not a very transformational program especially
    considering that it is the exact same hull of the current LHA class
    that is based on a 1950s design. It seems to me that if the LHA (R)
    class ship is built to have a lifespan of 50 years with no further R&D
    invested, then LHD-9 will be a 100-year old design when it is
    decommissioned in the 2050 timeframe. Would the Navy develop an
    aircraft carrier (CVN), destroyer (DD), or submarine (SSN) without a
    robust R&D effort?
        Where is the R&D funding for a major amphibious ship like LHA (R)?
        Are you not relegating the amphibious Navy to non-transformational
    status?
        General Whitlow and Admiral Balisle. The Navy is currently
    conducting an AoA for LHA(R). Numerous alternatives are under
    consideration, including a LHD-8 repeat design. If the results of the
    AoA support a mod repeat LHD or new ship design, additional RDT&E funds
    will be required. At that time, it may be necessary to revisit the
    current plan to use the $10 million in fiscal year 2003 SCN AP for a
    LHD-9.
        While the LHA(R) hull shape may be close to the original, its
    combat systems suite, communications gear and information technology
    set up will be state of the art.

                                 WASP-CLASS LHD

        34. Senator McCain. General Whitlow and Admiral Balisle, last
    month, OSD Comptroller Dov Zakheim testified before the Senate Armed
    Services Subcommittee on Readiness and Management Support that the
    decision to begin funding LHD-9 in the fiscal year 2003 budget was
    ``done completely in conjunction with the Navy.'' He also stated that
    he doesn't ``like to blindside people. And [he] didn't blindside the
    Navy.'' General Whitlow, as the resource and requirements sponsor for
    amphibious ships, you no doubt were fully aware and closely involved
    with this decision. Given the fact that a Wasp-class LHD provides less
    lift capacity than the amphibious ship it would replace, would you
    please explain why Congress should support advance procurement for LHD-
    9? Admiral Balisle, would you care to comment?
        General Whitlow and Admiral Balisle. As you are aware, the LHA(R)
    AoA is being conducted to determine the most suitable platform to
    replace the aging Tarawa-class LHAs. That study will report out in late
    June of this year. LHD is one of many of the alternatives being
    considered. If the advance procurement funding tied the Navy to a
    repeat, ``straight stick'' LHD design, it would indeed be
    predetermining the outcome of the AoA. However, I believe that the
    advanced procurement funding you are referring to will be utilized to
    conduct required R&D for the design determined to be best suited to
    replace the LHA and meet the requirements of expeditionary assault
    forces well into this century. That determination and decision is
    pending.

                            PURCHASING CRUISE SHIPS

        35. Senator McCain. Admiral Balisle, there are reports that the
    Navy is being approached to purchase a pair of unfinished cruise ships
    at the Northrup Grumman Shipyard in Pascagoula left behind when
    American Classic Voyagers went bankrupt for use as mobile housing or
    hospital ships. Is the Navy in anyway interested in purchasing such
    ships and is there a need for such ships?
        Admiral Balisle. A team of Navy engineers recently visited the
    partially completed passenger ships in Pascagoula, Mississippi, and
    concluded that the ships are not suitable for use as command and
    control ships due to their structural design and lack of military
    survivability features. We also looked at the ships' utility for other
    non-combat ship missions. While the ships are viable with modifications
    for use as hospital, recreational or berthing vessels, the Navy does
    not have a requirement or need for any more of these ship types today.
    Accordingly, the Navy has declined the offer to acquire or use the
    cruise ships under construction.
                                     ______

                    Questions Submitted by Senator Bob Smith

                           NAVAL SURFACE FIRES SYSTEM

        36. Senator Smith. Admiral Balisle, when the Navy in 1992 shifted
    to a ``brown water'' strategy from a ``blue water'' one, two Navy
    missions loomed large: providing our troops in the littoral with
    effective Naval Surface Fire Support (NSFS) and providing a forward
    presence show of force. The Navy has failed on both counts. In the
    meantime, we are in a state of war that could well bring us into a
    littoral conflict. All we would have is air support which often is too
    slow for tactical response and can be wiped out by bad weather (we saw
    both happen in Kosovo, for example). In a September 2001 interview,
    General Jones identified the ``absence of naval gunfire'' as the
    Marines' number one issue. I believe that the solution to both of these
    deficiencies is major caliber guns (12,, and above) and enough ship
    survivability for a visible show of force in high threat situations,
    which is especially important in our war on terrorism. What is the
    status of the NSFS in the mid-term, 3-7 years?
        Admiral Balisle. To address Marine Corps naval surface fire support
    requirements in the next 3-7 years (2005-2009), Navy is developing and
    fielding the following systems in the fiscal years indicated:
        Fiscal Year 2002--The 5,,/62-caliber Mk-45 Mod 4 gun is an improved
    version of the 5,,/54-caliber gun and incorporates structural
    improvements to accommodate higher energies required to fire the ERGM.
    In addition to firing the ERGM, the Mk-45 Mod 4 gun retains the
    capability to fire the current inventory of conventional 5,, ballistic
    ammunition. The Mk-45 Mod 4 gun is presently being fielded in Arleigh
    Burke-class destroyers (DDG-81-112) and is programmed for backfit in
    Ticonderoga-class cruisers as part of the cruiser conversion program.
        Fiscal Year 2002--Naval fires network (NFN) is being deployed to
    provide the network-centric infrastructure and processing capability
    (software and hardware) required to support carrier strike, surface
    strike, expeditionary, and fire support missions in support of joint,
    allied, and coalition forces. Its overarching goal, integrated with the
    distributed common ground station (DCGS) architecture, is to collect,
    process, facilitate fusion, and disseminate data from a variety of
    disparate, geographically separated, dissimilar joint sensors
    (including space-based sensors) and provide it to the warfighting
    community in a timely enough manner to identify, target, engage, and
    destroy enemy targets.
        Fiscal Year 2003--Naval fires control system (NFCS) is being
    deployed to provide naval surface fires mission planning and fire-
    support coordination functions to support the extended ranges and
    precision accuracy of the improved Mk-45 Mod 4 (5,,/62-caliber) gun,
    ERGM, and potentially advanced gun system (AGS) and ALAM. This system
    provides the path and coordination functions for bringing naval guns
    and land attack missiles into the realm of network-centric warfare by
    receiving and executing digital fire missions directly from marines and
    soldiers ashore, from the USA/USMC advanced field artillery tactical
    data system (AFATDS) ashore and afloat, and from the Naval Fires
    Network ashore and afloat. NFCS will be fielded in Arleigh Burke-class
    destroyers (DDG-81-112) and backfit in Ticonderoga-class cruisers as
    part of the cruiser conversion program.
        Fiscal Year 2005--The ERGM is a 5,,, guided, rocket-assisted
    projectile that is shot from a 5,,/62-caliber gun. Using the global
    positioning system (GPS), ERGM receives target location and satellite
    information prior to launch. During flight, the ERGM receives GPS
    information and updates its inertial navigation system. ERGM far
    exceeds the current range of ballistic projectiles (13nm) through the
    use of rocket assisted propulsion, aerodynamic shape, glide and
    increased initial velocity provided by a high energy propulsion charge
    in a 5,,/62-caliber gun. ERGM will be fielded in Arleigh Burke-class
    destroyers (DDG-81-112) and backfit in Ticonderoga-class cruisers as
    part of the cruiser conversion program.
        In the longer term, beyond fiscal year 20O9, DD(X) with the
    advanced gun system/long-range land attack projectile (AGS/LRLAP) will
    bring objective level naval fires capability to the force.

        37. Senator Smith. Admiral Balisle, have you given consideration to
    re-activating the U.S.S. Iowa and U.S.S. Wisconsin to fulfill this
    critical task of national defense?
        Admiral Balisle. The Navy has considered the relative advantages of
    reactivating the two battleships, listed on the Naval Vessel Register.
    However, the battleships do not meet future USMC naval surface fire
    support (NSFS) requirements (attachment 1) for expeditionary maneuver
    warfare. The Navy has undertaken an alternative strategy to better
    address NSFS requirements generated by the new operational concepts of
    operational maneuver from the sea (OMFTS) and ship to objective
    maneuver (STOM). Future weapons and platforms will be expected to
    routinely support operations hundreds of miles inland. The battleships
    provide outstanding support up to 27 miles. The current concept of
    operations for expeditionary warfare requires a much greater range to
    support greater maneuver and lift capabilities of our modern Marine
    forces.
        Two battleships (U.S.S. Iowa and U.S.S. Wisconsin) could not
    provide continuous world-wide, forward-deployed coverage, would not
    meet the emerging needs of warfare in the 21st century, and would be
    prohibitively expensive to operate, maintain, and support. Technology
    insertions required to upgrade battleships for interoperability with
    modern naval forces would be cost prohibitive. Battleships are manpower
    intensive and require more than three to five times the manning of a
    modern surface combatant. If reactivated, they would be unique in the
    fleet (unique weapon systems, engineering plants, training
    requirements, etc), and require an expensive infrastructure for support
    of only two ships. Therefore, reactivated battleships would compete for
    scarce funding with other critical surface Navy programs and reduce the
    total force capabilities available for littoral land attack operations.
    The high costs of operation, combined with limited battleship
    capability versus current USMC NSFS requirements, make battleship
    reactivation a high cost program of little military value.
        The Navy is moving forward from World War II vintage battleship
    capability with the following plan for developing systems to address
    Marine Corps NSFS requirements and fielding those systems in the fiscal
    years indicated:
        Fiscal Year 2002--The 5,,/62-caliber Mk-45 Mod 4 gun is an improved
    version of the 5,,/54-caliber gun and incorporates structural--
    improvements to accommodate higher energies required to fire the ERGM.
    In addition to firing the ERGM, the Mk-45 Mod 4 gun retains the
    capability to fire the  current inventory of conventional 5,, ballistic
    ammunition. The Mk-45 Mod 4 gun is presently being fielded in Arleigh
    Burke-class destroyers (DDG-81-112) and is programmed for backfit in
    Ticonderoga-class cruisers as part of the cruiser conversion program.
        Fiscal Year 2002--Naval fires network (NFN) is being deployed to
    provide the network-centric infrastructure and processing capability
    (software and hardware) required to support carrier strike, surface
    strike, expeditionary, and fire support missions in support of joint,
    allied, and coalition forces. Its overarching goal, integrated with the
    distributed common ground station (DCGS) architecture, is to collect,
    process, facilitate fusion, and disseminate data from a variety of
    disparate, geographically separated, dissimilar joint sensors
    (including space-based sensors) and provide it to the warfighting
    community in a timely enough manner to identify, target, engage, and
    destroy enemy targets.
        Fiscal Year 2003--Naval fires control system (NFCS) is being
    deployed to provide naval surface fires mission planning and fire-
    support coordination functions to support the extended ranges and
    precision accuracy of the improved Mk-45 Mod 4 (5,,/62-caliber) gun and
    ERGM. This system provides the path and coordination functions for
    bringing naval guns and land attack missiles into the realm of network-
    centric warfare by receiving and executing digital fire missions
    directly from Marines and Soldiers ashore, from the USA/USMC advanced
    field artillery tactical data system (AFATDS) ashore and afloat, and
    from the naval fires network ashore and afloat. NFCS will be fielded in
    Arleigh Burke-class destroyers (DDG-81-112) and backfit in Ticonderoga-
    class cruisers as part of the cruiser conversion program.
        Fiscal Year 2004--The tactical Tomahawk (Tactom) weapons system
    provides a precision, all weather, unmanned, deep strike capability,
    and will greatly increase flexibility and responsiveness. The emerging
    requirement to engage targets from 100 to 200 nm will be met with the
    introduction of Tactom, as an interim NSFS missile solution. Tactom's
    loiter and enroute re-targeting capabilities provide support over
    extensive maneuver areas. New capabilities will include a two-way
    satellite communications link. This communications link will enable
    Tactom missiles to be redirected in flight. The data link will also
    enable the missile to report its in-flight status and anticipated
    impact accuracy. In addition, the missile will provide near real-time
    lookdown battle damage imagery enroute to its target.
        Fiscal Year 2005--The ERGM is a 5,, guided, rocket-assisted
    projectile that is shot from a 5,,/62-caliber gun. Using the global
    positioning system (GPS), ERGM receives target location and satellite
    information prior to launch. During flight, the ERGM receives GPS
    information and updates its inertial navigation system. ERGM, which
    will achieve ranges over 50 nm, far exceeds the current range of
    ballistic projectiles (13nm) through the use of rocket assisted
    propulsion, aerodynamic shape, glide and increased initial velocity
    provided by a high energy propulsion charge in a 5,,/62-caliber gun.
    ERGM will be fielded in Arleigh Burke-class destroyers (DDG-81-112) and
    backfit in Ticonderoga-class cruisers as part of the cruiser conversion
    program.
        In the longer term, DD(X) with the advanced gun system/long-range
    land attack projectile (AGS/LRLAP) and an ALAM will bring objective
    level naval fires capability to the force.

                      JOINT STRIKE FIGHTER VARIANT V/STOL

        38. Senator Smith. Admiral McCabe, I would like to get your
    response to a Wall Street Journal report and a Lexington Institute
    report. The reports state that the Navy may be considering a 37 percent
    reduction in the production and procurement of the Joint Strike Fighter
    (JSF) from 1,089 aircraft to 680. Perhaps this cut is driven by a
    desire to generate some sizeable cost savings as full production ramps
    up at the end of the decade. However, the reports raise the specter
    that the Navy may want to cut the Marine Corps V/STOL version of the
    JSF due to some questions about its perceived differences--fuel load,
    payload capacity, and so forth that were modified to get the V/STOL
    abilities. What is the validity of this report, and what is the Navy
    position on the Marine Corps V/STOL JSF variant?
        Admiral McCabe. In response to Defense Planning Guidance, the
    Department of the Navy has been hard at work on a study to analyze
    efficiencies and effectiveness of integration of Navy and Marine Corps
    tactical aviation. This study will provide valuable insight and a
    method to challenge our assumptions of the past in order to formulate a
    strategy for the future. The study's recommendations are under review
    by the Department of the Defense. It would be inappropriate to comment
    further until that review is complete.

                                   SPACE USE

        39. Senator Smith. Admiral McCabe, what is the general status and
    intent of the Navy's plan for the use of space as an enabler and the
    defense of these assets that are becoming more and more important as we
    head into the era of netcentric?
        Admiral McCabe. In today's environment, naval forces have to think
    about many things in order to project power ashore: things like battle
    space characterization, target recognition, location and targeting,
    time critical strike, attack asset coordination and deconfliction,
    weapon selection, and then battle damage assessment.
        The Navy information technology for the 21st century (IT21)
    initiative accelerates the transition to an intranet and PC-based
    tactical and support warfighting network, enabling the reengineering of
    Navy mission and support processes. This strategy provides secure and
    unclassified internet protocol (IP) network connectivity for mobile
    Naval forces using satellite communications (SATCOM), direct line of
    sight communication paths, and commercial IT hardware and software.
    This is a major step towards quickly achieving the goals and standards
    of the global information grid, and a quantum leap forward into
    creating the infrastructure necessary to embark on true network-centric
    operations and knowledge management.
        The naval network is the convergence of afloat and ashore networks
    into a single, seamless network. This represents one of the first
    evolutionary steps towards transformation to network-centric
    operations. This network includes elements from the Marine Corps
    networks, Navy-Marine Corps intranet (NMCI) outside of the continental
    United States (OCONUS), and interfaces with the global information
    grid.
        The bottom line, we have to use assets in space to support naval
    forces as well as forces ashore to provide high data rate
    communications, meteorological and oceanographic support, navigation,
    precise time and non-organic intelligence, surveillance,
    reconnaissance, and targeting (ISRT).
        Ensuring the freedom of space and protecting U.S. national security
    interests in the medium are priorities for space use and space related
    activities. U.S. space systems are national property afforded the right
    of passage through and operations in space without interference in
    accordance with applicable U.S. and international law.
        Purposeful interference with U.S. space systems will be viewed as
    an infringement on our sovereign rights. The U.S. may take all
    appropriate measures, including, if directed by the President and
    Secretary of Defense, the use of force, to respond to such an
    infringement on U.S. rights, in accordance with applicable U.S. and
    international law.
        Consistent with applicable U.S. and international law, space
    control capabilities will be developed, operated, and maintained to
    ensure freedom of action in space for the U.S. and its allies and, if
    directed, deny such freedom of action to adversaries. These space
    control capabilities will include capabilities for protection,
    prevention, negation, surveillance of space and the supporting battle
    management, command, control, communications, computers, intelligence
    surveillance, and reconnaissance.

        [Whereupon, at 4:36 p.m., the subcommittee adjourned.]