[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]


                         [H.A.S.C. No. 110-99]
 
                    CURRENT STATUS OF THE JOINT MINE 

                   RESISTANT AMBUSH PROTECTED (MRAP) 

                            VEHICLE PROGRAM 

                               __________

                             JOINT HEARING

                               BEFORE THE

             SEAPOWER AND EXPEDITIONARY FORCES SUBCOMMITTEE

                          MEETING JOINTLY WITH

                    AIR AND LAND FORCES SUBCOMMITTEE

                                 OF THE

                      COMMITTEE ON ARMED SERVICES

                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS

                             FIRST SESSION

                               __________

                              HEARING HELD

                            NOVEMBER 8, 2007

                                     
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             SEAPOWER AND EXPEDITIONARY FORCES SUBCOMMITTEE

                   GENE TAYLOR, Mississippi, Chairman
NEIL ABERCROMBIE, Hawaii             ROSCOE G. BARTLETT, Maryland
RICK LARSEN, Washington              TERRY EVERETT, Alabama
MADELEINE Z. BORDALLO, Guam          J. RANDY FORBES, Virginia
BRAD ELLSWORTH, Indiana              JOE WILSON, South Carolina
JOE COURTNEY, Connecticut            BILL SHUSTER, Pennsylvania
KIRSTEN GILLIBRAND, New York         DOUG LAMBORN, Colorado
JOE SESTAK, Pennsylvania
               Jesse Tolleson, Professional Staff Member
                    Jason Hagadorn, Staff Assistant
                                 ------                                

                    AIR AND LAND FORCES SUBCOMMITTEE

                   NEIL ABERCROMBIE, Hawaii, Chairman
JOHN SPRATT, South Carolina          JIM SAXTON, New Jersey
SOLOMON P. ORTIZ, Texas              HOWARD P. ``BUCK'' McKEON, 
SILVESTRE REYES, Texas                   California
ADAM SMITH, Washington               JEFF MILLER, Florida
MIKE McINTYRE, North Carolina        JOE WILSON, South Carolina
ELLEN O. TAUSCHER, California        FRANK A. LoBIONDO, New Jersey
ROBERT A. BRADY, Pennsylvania        TOM COLE, Oklahoma
JIM MARSHALL, Georgia                ROB BISHOP, Utah
DAN BOREN, Oklahoma                  MICHAEL TURNER, Ohio
HANK JOHNSON, Georgia                CANDICE S. MILLER, Michigan
JOE SESTAK, Pennsylvania             PHIL GINGREY, Georgia
GABRIELLE GIFFORDS, Arizona          CATHY McMORRIS RODGERS, Washington
KENDRICK B. MEEK, Florida            GEOFF DAVIS, Kentucky
KATHY CASTOR, Florida                W. TODD AKIN, Missouri
                 Heath Bope, Professional Staff Member
                Lynn Williams, Professional Staff Member
                       Ben Kohr, Staff Assistant




































                            C O N T E N T S

                              ----------                              

                     CHRONOLOGICAL LIST OF HEARINGS
                                  2007

                                                                   Page

Hearing:

Thursday, November 8, 2007, Current Status of the Joint Mine 
  Resistant Ambush Protected (MRAP) Vehicle Program..............     1

Appendix:

Thursday, November 8, 2007.......................................    53
                              ----------                              

                       THURSDAY, NOVEMBER 8, 2007
  CURRENT STATUS OF THE JOINT MINE RESISTANT AMBUSH PROTECTED (MRAP) 
                            VEHICLE PROGRAM
              STATEMENTS PRESENTED BY MEMBERS OF CONGRESS

Abercrombie, Hon. Neil, a Representative from Hawaii, Chairman, 
  Air and Land Forces Subcommittee...............................     3
Bartlett, Hon. Roscoe G., a Representative from Maryland, Ranking 
  Member, Seapower and Expeditionary Forces Subcommittee.........     6
Saxton, Hon. Jim, a Representative from New Jersey, Ranking 
  Member, Air and Land Forces Subcommittee.......................     6
Taylor, Hon. Gene, a Representative from Mississippi, Chairman, 
  Seapower and Expeditionary Forces Subcommittee.................     1

                               WITNESSES

Heebner, David K., President, General Dynamics Land Systems......    32
Hudson, Linda P., President, Land & Armaments Systems, BAE 
  Systems........................................................    27
Massicotte, Archie, President, International Military and 
  Government, LLC................................................    34
McGilton, Gordon, CEO, Force Protection, Inc.....................    29
Young, Hon. John J., Jr., Acting Under Secretary of Defense for 
  Acquisition, Technology, and Logistics, Director, MRAP Task 
  Force; Bill Greenwalt, Deputy Under Secretary of Defense for 
  Industrial Policy; and Captain Cloyes R. ``Red'' Hoover, 
  Commanding Officer, Space and Naval Warfare Systems Center 
  (SPAWAR) Charleston, U.S. Navy.................................     8

                                APPENDIX

Prepared Statements:


    Heebner, David...............................................    99
    Hudson, Linda P..............................................    76
    Massicotte, Archie...........................................   106
    McGilton, Gordon.............................................    87
    Young, Hon. John J., Jr., joint with Bill Greenwalt and 
      Captain Cloyes R. ``Red'' Hoover...........................    57

Documents Submitted for the Record:

    [There were no Documents submitted.]

Questions and Answers Submitted for the Record:


    Mr. Forbes...................................................   128
    Mr. Shuster..................................................   129
    Mr. Taylor and Mr. Abercrombie...............................   117
  CURRENT STATUS OF THE JOINT MINE RESISTANT AMBUSH PROTECTED (MRAP) 
                            VEHICLE PROGRAM

                              ----------                              

House of Representatives, Committee on Armed Services, Seapower and 
   Expeditionary Forces Subcommittee, Meeting Jointly with Air and 
   Land Forces Subcommittee, Washington, DC, Thursday, November 8, 
                                                              2007.
    The joint subcommittee met, pursuant to call, at 2:04 p.m. 
in room 2118, Rayburn House Office Building, Hon. Gene Taylor 
(chairman of the Subcommittee on Seapower and Expeditionary 
Forces) presiding.

 OPENING STATEMENT OF HON. GENE TAYLOR, A REPRESENTATIVE FROM 
   MISSISSIPPI, CHAIRMAN, SEAPOWER AND EXPEDITIONARY FORCES 
                          SUBCOMMITTEE

    Mr. Taylor. The joint subcommittee will come to order.
    Congresswoman Carol Shea-Porter, a member of the full 
committee, has requested permission to join us today during 
this important briefing.
    Without objection, I would like to make it in order for her 
to participate. So moved.
    Today, the Seapower and Expeditionary Forces Subcommittee 
joins the Air and Land Forces Subcommittee to receive testimony 
on the current status of the Mine Resistant Ambush Protected 
vehicle, MRAP. This hearing continues our formal series of 
oversight activities on the mine resistant vehicle. Force 
protection will always be at the forefront of these 
subcommittee meetings and brings us here today.
    The United States of America has over 164,000 troops still 
operating in Iraq. Improvised Explosive Devices (IED's) 
constitute about 70 percent--or are responsible for about 70 
percent of the casualties in Iraq; and, regrettably, more than 
half of those, or close to half of those, are caused by 
underbelly attacks on vehicles in Iraq.
    The MRAP family of vehicles offers significantly more 
protection and survivability for our troops. This is due to 
several factors: vehicle height, increased weight of the 
vehicle, the V-shaped underbody which helps deflect the force 
of the blast away from the body of the vehicle.
    We are aware that a total, integrated approach using all 
available technologies to combat IEDs is vital, but the last 
line of defense for our troops in the IED chain is an armored 
vehicle. Right now, MRAP should be that vehicle.
    It is no secret that I, along with many other members of 
this committee, have not been satisfied with the response of 
this administration to force protection needs of our troops. 
During our last hearing, we raised concerns over settling an 
artificially low theater requirement, repeating past mistakes 
in terms of vehicle production, adequately mobilizing the 
industrial base, and failing to properly fund the program.
    Three weeks ago, I had the pleasure of meeting with 
Secretary Young in my office; and the information he briefed me 
on showed me a substantial improvement in DOD's execution of 
the mine resistant vehicle program. At the time of the July 
19th hearing, just over 240 MRAPs had been produced and only 
176 had been fielded to Iraq. There is an unfunded requirement 
of over 5 billion.
    Today, over 1,500 MRAPs have been produced and close to 700 
vehicles have been fielded. The Department of Defense 
requirement now stands at 15,000 vehicles, up from the initial 
request by this administration just 1 year ago of only 4,000. 
The amended supplemental now requests full funding for this new 
equipment.
    From day one, Congress has said to tell us what it would 
take for MRAP and we will provide the money you need. We want 
to reiterate that statement.
    Now is not the time to be complacent. We still have major 
production fielding and sustainment challenges ahead of us. 
Over the next few months, there will be a steep increase in the 
production of MRAPs. Over the next two months, production is 
scheduled to jump from 440 vehicles per month to a steady 1,100 
per month. This 700-vehicle increase is critical to the MRAP 
fielding, and these subcommittees seek to be reassured that 
this increase will proceed without a hitch.
    If there are any potential problems that might disrupt 
these ambitious goals, now is the time to state those concerns 
so that we can help mitigate them. The subcommittees expect to 
be reassured that industry has been mobilized to meet these 
ambitious production goals.
    The issue of MRAPs goes a heck of a lot farther than just 
vehicles and people and production lines and kids in theater. 
This young man is Sean Cooley; and, to my knowledge, he was the 
first Mississippi guardsman to die. He was deployed in February 
of 2003--I'm sorry February of 2005--his unit, the 155th; and 
he died in a Humvee from a blast underneath that vehicle.
    A few months later, the day after Easter to be exact, this 
young man, William Brooks, was the driver of a Humvee. His 
vehicle was blown up, again from a blast from underneath. 
William lost both legs. To tell you what a unique individual 
this young man is, he was saved by the heroic work of a 
Sergeant Anthony and another sergeant who were able to get two 
tourniquets on him in a minute. While recovering from his 
wounds at Walter Reed, William volunteered to help in my office 
to man the phone after Hurricane Katrina.
    William is walking, as seen in this shot, on his 
prostheses. His short-term goal is to finish Mississippi State 
University and to walk across the stage to get his diploma on 
these legs.
    I think the sad fact is that Sean would probably be alive 
and William would probably have his legs if MRAPs had been 
fielded sooner.
    Now there are 168,000 Seans and Williams in theater today. 
So if this committee loses its temper, gets a little short for 
people who aren't working as fast as we think they should or 
funding that isn't there when it should be, I hope you 
understand why.
    I have had the pleasure to visit two of the facilities that 
are building MRAPs in the past week. I want to first say, as 
someone who has worked on a production line, I was impressed by 
how hard the individuals were working. There is absolutely no 
complaint there.
    I was not impressed by the facilities themselves. There was 
good equipment. There was a pretty good plan. But, quite 
frankly, particularly what was done at Space and Naval Warfare 
Systems Center (SPAWARs), where they are putting the 
government-furnished equipment onto these vehicles, looked more 
like a custom cycle shop than Honda mass producing motorcycles.
    This isn't a jobs program. This isn't about feathering 
somebody's nest or putting some jobs in somebody's district. 
This is a rescue mission.
    The most likely way for a young person serving our country 
in Iraq or Afghanistan to die or be maimed is from an underbody 
blast to a Humvee. We know that, and the enemy knows that, and 
we have got to solve that problem.
    Now, as someone who has been through a product of base 
closure and having to lay off 1,300 people in my district, 
believe me, I understand the misery of having to let people go. 
But this isn't a jobs program, and we want the vendors to know 
this. We want the Congress to know this. But, above all, we 
want the troops to know this is a rescue mission; and we are 
expecting the folks to tell us today how they are going to 
perform this mission quickly, efficiently, and then we move on 
to other challenges that face our Nation.
    With that, I yield to the ranking member--I'm sorry--to the 
subcommittee chairman of Air and Land, Mr. Abercrombie.

   STATEMENT OF HON. NEIL ABERCROMBIE, A REPRESENTATIVE FROM 
       HAWAII, CHAIRMAN, AIR AND LAND FORCES SUBCOMMITTEE

    Mr. Abercrombie. Thank you. Thank you very much, Gene.
    At our hearing July 1st, I indicated that we were having 
difficulties reconciling MRAP vehicle program office provided 
data on production schedules. At the time, I noted this as 
indicative of the challenges involved with a program of this 
size moving at such a rapid pace.
    Since July, the program office and the Department seem to 
have made significant improvement in responding to those 
difficulties and providing accurate information; and I commend 
that effort. However, the MRAP vehicle program continues to 
present a major acquisition challenge that has broader 
implications regarding the Department of Defense's tactical 
vehicle acquisition strategy, expected future combat 
environments and, of course, how that relates to future budget 
requirements.
    Mr. Chairman, I don't propose at this hearing to pursue 
with our guests today the question of capital budgeting, but I 
can assure you that at some point we have to come to grips in 
the Department of Defense and the Congress has to come to grips 
with the question of how we finance what we are doing, 
particularly in capital acquisition of assets such as MRAPs.
    We have to have a differentiation between a capital budget 
and an operational budget; and failure to do that I think is 
severely undermining everything that Mr. Young, for example, is 
going to try to accomplish, I can assure you. We will pursue 
that at another time, but I think it is fair to say that at not 
quite subliminal level in today's hearing the question of how 
we finance affects policy with regard to what we finance and 
when we finance it.
    In any event, not so many months ago the Army was reluctant 
to embrace major procurement for MRAP vehicles and has only 
recently done so, with the caveat that the MRAP program is not 
a program of record, indicating that the MRAP vehicles only 
apply to the current circumstances in Iraq and implying 
possibly no further use of the vehicles after their use in 
Iraq.
    I know that that is not necessarily the full intention, and 
for those who are not necessarily familiar with what a program 
of record is and why we have it and what its implications are, 
this may seem a bit esoteric. But I think it is fundamental to 
our discussion not just about MRAPs but in the broader 
discussion that I have already alluded to.
    I am perfectly aware of the fact that the Army is going to 
have further uses and sees a bigger picture but is also 
constrained by the institutional requirements that it has, 
especially if it does not have a program of record, precisely 
because you get into conflicts over what gets funded and when.
    Given that the Department of Defense has determined that 
the MRAP vehicles are its number one acquisition requirement of 
the moment, how is it that it appears that future combat 
requirements are so much different than an MRAP-like vehicle 
capability will not be required?
    Now, again, I won't pursue that at any great length during 
this hearing, but I assure you that I am going to need and I 
think the committee is going to need--the committees will need 
some indication as to why these kinds of vehicles with the kind 
of armament protection that is proposed in the design protocols 
that are proposed will not be useful in multiple environments 
wherever--in warfare, guerrilla warfare--the current kind of 
proclivities of those we might find ourselves in conflict with 
might be utilizing.
    The DOD has characterized the MRAP as a major defense 
acquisition program in the highest category, with Secretary 
Young as the primary acquisition executive, which, 
parenthetically, I am very happy with and glad of, which 
probably sends him on a path of doom almost immediately.
    I am curious as to why shouldn't this program be considered 
a program of record? Where do the MRAP vehicles fit into future 
tactical wheeled acquisitions? Will the fiscal 2009 budget and 
future years' defense program include appropriate levels of 
operations and maintenance funding for the MRAP vehicle 
inventory?
    If we are going to make demands on the private 
manufacturing sector of this Nation, they need to know just 
exactly what it is that we want, what kind of priority are we 
giving it and what plans can they make accordingly. That is 
absolutely fundamental, it seems to me, if we are going to ask 
the Nation to mobilize on behalf of the soldiers that Gene has 
indicated are utterly and totally and completely dependent on 
our good judgment.
    I might note that the Stryker vehicle was once considered 
an interim solution. I think that bears repeating, Mr. 
Chairman. Other instances can be cited where something of the 
instance became something of permanence.
    Given the planned $25 billion commitment to MRAP vehicles, 
a commitment that is likely to grow if history holds precedent, 
and given the lack of proven armored technology that 
significantly changes current correlation between weight, 
height and vehicle protection, we had better plan on MRAP 
vehicles as more than an interim throwaway solution for force 
protection.
    I am also curious as to when and how MRAP-2 vehicles fit 
into the current strategy and what impacts this program will 
have on the industrial supply base. Will the MRAP-2 vehicle 
program be a program of record?
    One other issue is that the MRAP program--that this program 
has highlighted and which is of continuing concern to me is 
fundamental to the broader issue of joint programs. Many of the 
current defense acquisition programs are called joint programs. 
Anytime, by the way--I'm sorry to say, Mr. Young, I keep 
looking at you here--I'm sorry to say every time I see the word 
``joint'' in front of it I figure, uh-oh, the smoke screen is 
going up. We will use the word ``joint'' and then watch all the 
in-fighting take place. They are labeled joint programs. 
However, if you peel back a layer, you find that the program is 
joint only in name.
    While MRAP vehicles are being procured jointly, there is a 
lack of standardization among the mission-essential equipment 
being integrated into the vehicles. The MRAP vehicles are all 
being used against the same threat in similar operational 
environments, yet each military service and Special Operations 
Command has its own specific equipment package. As a result, a 
facility doing the installation work is potentially having to 
integrate, at least by my count, now 24 different vehicle 
configurations.
    I don't see how that can be done. I am not sure it should 
be done. I am open, I am not an engineer, I am not an 
automotive engineer, certainly not an expert in this by any 
stretch of the imagination in terms of manufacture and 
configurations, but it strikes me that 24 different vehicle 
configurations at a minimum causes enormous logistical 
difficulties for the manufacturer and those we are asking to do 
the production, let alone what the doctrinal implications of 
that are in terms of jointness.
    As monthly production numbers increase dramatically, these 
many configurations could generate, I believe, major problems 
once the basic vehicles are delivered to where the final 
integration is done. Ultimately, this I think will result in 
delay in the vehicles being delivered to Iraq or elsewhere.
    If there was one standardized mission equipment package or 
at least fewer configurations than currently planned for all 
the services and the Special Operations Command, this could 
potentially accelerate, I believe, the installation process 
and, in turn, get more vehicles to Iraq and elsewhere at a much 
faster rate. It is imperative in my judgment that the civilian 
leadership and the Department of Defense effectively address 
the problem of joint acquisition programs which may be in name 
only.
    I am hoping the witnesses today will be able to respond to 
these issues, particularly the programs of record and the 
question of joint acquisition programs and their efficacy, and 
assure the subcommittees that every option is being pursued to 
produce and field these vehicles since what we are really 
discussing today, as the chairman has so eloquently expressed, 
is the protection of our men and women in uniform.
    Thank you for your indulgence, Mr. Chairman.
    Mr. Taylor. Thank you Mr. Abercrombie.
    The Chair recognizes the ranking member and former chairman 
of the Seapower Subcommittee, Mr. Bartlett.

  STATEMENT OF HON. ROSCOE G. BARTLETT, A REPRESENTATIVE FROM 
  MARYLAND, RANKING MEMBER, SEAPOWER AND EXPEDITIONARY FORCES 
                          SUBCOMMITTEE

    Mr. Bartlett. Thank you, Mr. Chairman.
    Mr. Chairman, I also want to thank our panel for being with 
us today. Mr. Chairman, thank you for continuing to have these 
MRAP hearings. The information we learn is invaluable.
    During the last two MRAP hearings, I mentioned in my 
opening statements that I wanted to hear assurances from our 
witnesses that the industrial base was being positioned to 
support this critical MRAP requirement. Based on the increased 
requirement and the recent decision to down-select from five to 
three MRAP vendors, I still have questions about the industrial 
base; and I am very pleased that we have two distinguished 
panels before us today to address my concerns. We need to gain 
a better understanding of any industrial base constraints and 
what mitigating measures are being pursued to remedy potential 
choke points.
    Thank you for being here, and I look forward to your 
testimony.
    Thank you, Mr. Chairman.
    Mr. Taylor. Thank you, Mr. Bartlett.
    The Chair now recognizes the gentleman from New Jersey, the 
Ranking Member of the Air and Land Subcommittee, Mr. Saxton.

STATEMENT OF HON. JIM SAXTON, A REPRESENTATIVE FROM NEW JERSEY, 
        RANKING MEMBER, AIR AND LAND FORCES SUBCOMMITTEE

    Mr. Saxton. Today he is the cleanup guy.
    Thank you all for being here. This is indeed an important 
hearing and an important topic.
    I often think to myself of the changes, the dramatic 
changes in warfare that have occurred since I first sat here in 
this room at hearings like this one; and today is a hearing 
that is intended to help us develop the capability to deal with 
some of those changes. The MRAP program obviously is important 
for those reasons.
    At end of the day, I think we need to know the following: 
Number one, is the recent decision to down-select from five to 
three vendors in the best interest of our warfighters? Two, is 
the defense industrial base postured to meet the current 
requirement of approximately 15,000 MRAPs and by when? Three, 
what are the potential bottlenecks and how can we help 
alleviate them if there are some? And, finally, four, have we 
provided you with the necessary funding in a timely manner to 
execute all of the necessary requirements that you have?
    I would like to just for a moment turn to another subject. 
As I mentioned just a minute ago, things change quite rapidly. 
One of the changes that I have seen happen is that this year we 
will spend approximately 70 percent of our Defense budget on 
operations and support and 30 percent on modernization. This is 
different. In 1985, this was not the case. In the 1980's, we 
spent about 55 percent of our budget on operations and support 
and 45 percent on modernization. We established a 30 percent 
modernization budget in the 1990's, and that is where we are 
today.
    Recently, General Casey and Secretary Geren were here; and 
their message was that the Army is out of balance. I believe 
that it is not just the Army that is out of balance, I believe 
that it is our defense structure that is out of balance. It 
seems to me that the situation that we are in today in terms of 
our tactical wheeled vehicle fleet is a microcosm of this out-
of-balance theme.
    And, without prolonging this, let me just say that it seems 
to me that as we proceed down the road with MRAP, which we all 
believe is a necessary element to protect our warfighters and 
help them be successful, we also have recognized, as one of the 
previous speakers said, that MRAP does not provide us with all 
the answers. It has problems in urban terrain. It has problems 
being agile. And it seems to us seems to me at least that we 
need a fleet of MRAP-type vehicles or at least with MRAP-type 
armor with different capabilities to enable our warfighters to 
do the variety of tasks that we expect them to do.
    This is not the place to talk about a future program, but I 
want to make sure that in the future, regardless of the type of 
mission environment that these light tactical vehicles must go 
into, that every soldier and every marine has MRAP-like or 
better protection, not just the heaviest variants. In other 
words, the lighter vehicles that we have armored up today have 
some advantages and the MRAP vehicle also has some advantages, 
but they all can't do the same mission.
    So it seems to me that what we ought to be looking at 
beyond today, beyond today's hearing, is a vision for where we 
need to go with armored vehicles and the various types of 
missions that we expect our warfighters to carry out with them.
    Mr. Taylor. The Chairman thanks the gentleman from New 
Jersey.
    We are fortunate to have a very distinguished panel of 
witnesses with us today, and I mean that. We are also lucky to 
have you gentlemen working for our Nation. I hope you 
understand that.
    First is the Honorable John Young, the Under Secretary of 
Defense for Acquisition, Technology and Logistics and the 
Director of the MRAP Task Force. Second is Mr. Bill Greenwalt, 
Deputy Under Secretary of Defense for Industrial Policy. Third 
is Captain ``Red'' Hoover, United States Navy, Commanding 
Officer, Space and Naval Warfare Systems Center, pronounced 
SPAWAR, Charleston, South Carolina.
    Mr. Young, we have about 10 minutes before we have to go 
for these votes. It is going to be three votes. That is going 
to kill about a half an hour, I regret to say. So I will leave 
it up to you. If you would like to get started, we can do that. 
If you prefer to wait, we can do that, too.

STATEMENT OF HON. JOHN J. YOUNG, JR., ACTING UNDER SECRETARY OF 
 DEFENSE FOR ACQUISITION, TECHNOLOGY, AND LOGISTICS, DIRECTOR, 
  MRAP TASK FORCE; BILL GREENWALT, DEPUTY UNDER SECRETARY OF 
 DEFENSE FOR INDUSTRIAL POLICY; AND CAPTAIN CLOYES R. ``RED'' 
  HOOVER, COMMANDING OFFICER, SPACE AND NAVAL WARFARE SYSTEMS 
             CENTER (SPAWAR) CHARLESTON, U.S. NAVY

    Secretary Young. Mr. Chairman, I will make a brief opening 
statement, probably well less than 10 minutes; and then proceed 
as you will.
    Mr. Taylor. The Chair recognizes the Under Secretary of 
Defense.
    Secretary Young. Chairman Taylor, Chairman Abercrombie, 
Ranking Members Bartlett and Saxton and distinguished members 
of the subcommittees, thank you for the opportunity to discuss 
the Mine Resistant Ambush Protected vehicle program with you 
again. I will try to be brief while highlighting a few key 
points.
    Since I was last here, Secretary Gates has continued to 
push the Department to build and deliver the maximum number of 
MRAPs possible this year. In response, the MRAP team has 
labored tirelessly to move forward aggressively while ensuring 
the quality and effectiveness of these vehicles in theater.
    The Congress has truly been integral in our MRAP efforts. 
The Congress moved the MRAP reprogramming in days, provided 
$5.2 billion in a continuing resolution, and has included $11.2 
billion in the fiscal year 2008 defense appropriations 
conference report. These are unprecedented actions. With these 
funds, we are making significant progress in delivery and 
production of MRAPs.
    In December of 2006, we had the industrial capacity to 
build less than 10 MRAP vehicles per month. We produced 161 
vehicles in July. Between October 1st and November 4th, we have 
taken delivery of about 550 vehicles. We are closing in on our 
goal of producing roughly 1,100 MRAPs per month by the end of 
the calendar year. In doing so, the defense industrial base is 
displaying remarkable agility and exceeding commercial 
industrial standards.
    For example, I am told that Toyota took three years from 
concept to manufacturing to reach a rate of 2,000 vehicles per 
month for the Prius hybrid vehicle. Our industry partners are 
leaning forward to accelerate deliveries, and the men and women 
serving this Nation are counting on their continued success.
    The MRAP program is perhaps the most significant rapid 
acquisition program the Department has conducted since the end 
of World War II; and, as a result, we are constantly confronted 
with new challenges.
    If we execute our plans, we will build over 15,000 MRAPs by 
October of 2008. With each challenge, the Department has proved 
to have the agility to adapt and react. The dedicated MRAP team 
has worked to address the availability of steel, tires, axles, 
transportation to theater and within theater, government-
furnished equipment installation, spare parts, maintenance, 
operator training, and all the other issues necessary for the 
program to deliver reliable, safe, and survivable vehicles.
    Our unprecedented journey will inevitably include 
challenges we cannot foresee today, but everyone is committed 
to fielding these vehicles on time. We know our warfighters are 
counting on us.
    I want to recognize and thank all the members of the MRAP 
enterprise, starting with Paul Mann of the joint MRAP program 
office and his team, General Brogan and the Marine Corps 
Systems Command, the vehicle manufacturers and their raw 
material and subcomponent suppliers, the men and women of Space 
and Naval Warfare Systems Center in Charleston, the entire 
network of transportation professionals represented by U.S. 
Transportation Command, the vast network of logistics experts 
from the Pentagon to Iraq and the talented military and 
civilian staff in the services and the Office of the Secretary 
of Defense involved with this program.
    Finally, I would again like to thank you and the other 
Members of Congress and their staffs for your clear and 
unambiguous support for this vital program. Together, we should 
be able to increase and maintain a high level of production, 
fielding, and sustainment of these vehicles and provide them to 
our soldiers, sailors, airmen and marines.
    Thank you for your time and attention, and I look forward 
to your questions.
    Mr. Taylor. Thank you, Secretary Young.
    [The joint prepared statement of Secretary Young, Mr. 
Greenwalt and Captain Hoover can be found in the Appendix on 
page 57.]
    Mr. Taylor. Will there be any other members of your panel 
speaking?
    Mr. Greenwalt. No, sir.
    Mr. Taylor. Secretary Young, thank you again for being 
here; and I do value your service and each of the panelists' 
service to our Nation.
    My frustration comes in that it was about two years ago 
when a former head of the Army Liaison Office came to me, 
Colonel Littig, and said that we need to be doing better, that 
the South Africans came up with a vehicle 20 years ago to 
deflect mine blasts and the Russians came up with it in 
approximately the same time line and then here we were two 
years into a very, very--conflict in Iraq where people were 
dying on a daily basis and we as a Nation had not responded.
    Like everyone else in this room, I am pleased that finally 
we are getting into line, but I am still not convinced that we 
are doing everything that we can do. Like I said, I was able to 
visit a facility in Charleston last week. I was able to go to 
SPAWARs. In both instances I saw people who were working hard, 
and I know the difference between people going through the 
motions and people working hard. These guys were working hard 
and these ladies were working hard. There was a lot of good 
equipment on those production lines, and I would invite each of 
the members of the committee to visit not only that plant but 
the other plants.
    But, as somebody who came from manufacturing, what I did 
not see was that process being done in the most expeditious 
manner. Congressman Abercrombie touched on it, and he raised an 
excellent point. Why are there 24 different variants? Not that 
long ago, a former Secretary of the Navy came before the 
committee and talked about the need to build ships or build 
anything, airplanes, in series. When we are trying to rush 
something to the theater so that people don't lose their life 
or their limbs, what in the heck are we doing coming up with 24 
variants? Part of me says that somebody is trying to do this on 
the cheap. Why don't we just build the best variant and make it 
available and those people that don't need all of those 
features just don't use them?
    I will use the example that I tend to buy common cars. I 
have an old Chevy Malibu. It has the same wiring harness as if 
I had bought every nice option for that vehicle, because the 
folks at GM know that it is cheaper to buy a whole lot of one 
thing and run it through the factory and if you need those 
additional wires for things then they are there. Why are we 
coming up with the equivalent of 24 different wiring harnesses 
and why are we coming up with so many different shapes?
    Believe me, I very much appreciate and I want the American 
people to appreciate the difficulty of your task. I could very 
quickly understand the importance of a V-bottom to deflect the 
blast. I did not see the importance--and I appreciate you folks 
walking me through the importance--of getting rid of the fuel 
tanks. Because it makes no difference if you survive the blast 
only to incinerate the crew inside.
    So you have got some challenges. I want to walk this 
committee through those challenges. But there are simple 
manufacturing processes that I don't see in place that need to 
be in place.
    And, again, I have got to believe that it is very difficult 
to hire somebody and tell them this is just to get a job done. 
This isn't forever. This is a task that is going to be for one 
year. That is just the way it is. This is a rescue mission for 
168,000 Americans in Iraq and the other 30,000 in Afghanistan. 
And you know what? People did come down to south Mississippi 
and New Orleans for one-year jobs cleaning up after Katrina.
    This can be done and absolutely has to be done. What I want 
to hear today is what steps are we going to be taking every day 
to make that process faster, to make it more efficient? And 
what do we as a Congress need to do to help you in your job? 
Because this is not about beating you up. This is about solving 
a problem.
    Secretary Young. Maybe I will offer a few comments, Mr. 
Chairman, and see if I have addressed your question.
    One of the ways--I mentioned we delivered 161 vehicles in 
July. We did that because we had multiple vendors. And, indeed, 
we have two categories of variants. The Category 1's carry two 
operators and four passengers. The Category 2's carry two 
vehicle operators and eight passengers. So five vendors and 
most of them have both categories, so you are up to 8 or 10 
different types. And then if you have Army and Marine Corps 
unique installations of those vehicles, a lot of variants.
    We took the approach to get vehicles as fast as possible to 
utilize all the manufacturing capacity that could produce safe 
vehicles and get that 161. It was with some careful thought 
that we made a decision with the October orders for which the 
Congress provided funds in the continuing resolution that we 
went down to three vendors, two category 1 types and two 
category 2 types. They are the vehicles with the largest 
payload.
    At that point in time, there were two factors to that. One, 
those vehicles having the largest payload have the best 
capacity to carry additional armor and additional equipment; 
and, two, because we have now moved from July to August, 
September and October, those vendors can now keep and build 
toward that rate and satisfy the desire to build 1,100, 1,200 
vehicles a month.
    So we believe this is the fastest path to the most vehicles 
at rate and to address the issues you are properly raising. 
Those were exactly our choices in making that decision, is if 
we reduce the number of variety of vehicles we can process them 
through the SPAWAR installation process of government-furnished 
equipment faster, get them to the field faster and reduce the 
burden on the troops in the field of having different vehicles, 
each with some different installation which might have to be 
repaired. They have a job to do, and it is not to work on these 
vehicles.
    So we are making choices to get there; and it also 
addresses Chairman Abercrombie's point as we studied this and 
make the decision, if we make this choice now, our long-term 
inventory at end, the 15,000, will be mostly of single types of 
vehicles that have large payload capacities and can potentially 
serve us in the long term.
    So we tried to address the short-term demand to get as many 
vehicles as fast as possible if they provided better protection 
than uparmored Humvees. We did that. We are now narrowing the 
scope to continue to build as fast as possible but deliver a 
smaller set of variants so that they can be more easily 
outfitted in Charleston and more easily supported in theater.
    Those are the two strategies that we have addressed to 
address both of your concerns, Mr. Chairman.
    Mr. Taylor. Mr. Young, again, as I mentioned, we have three 
votes. We will try to get through them as quickly as possible.
    The committee is going to declare a 30-minute recess. We 
will be back at five minutes after the hour. Thank you.
    [Recess.]
    Mr. Taylor. The hearing will come to order again. We want 
to again thank our witnesses for being here.
    Secretary Young, I want to open this up to you, either you 
or the Captain. It is obviously a frustration to a number of us 
that we are delivering these vehicles one at a time, that we 
are putting several of them on an airplane. I think all of us 
would much prefer to see shiploads of these vehicles being 
delivered to ports in Kuwait or coming down from Turkey. And 
one of the things that I feel is a part of this jam is what is 
going on in SPAWARS.
    I, for one, am frustrated that we have 24 different 
variants, and I am curious as to why we are doing that. I am 
also frustrated--Captain, I want to give you an opportunity to 
comment on this--that when you have 24 different variants, that 
means in many instances different brackets, different holes 
that have to be drilled through high-tempered steel, just a lot 
of things that are done on a custom, one-by-one, very slow 
basis, when we have a problem that needs a mass production 
answer.
    I am told by Retired Colonel Roach, and my observation in 
Northrop Grumman Shipbuilding in Ingalls is that government-
furnished, very high-tech, very classified equipment is 
installed on those destroyers, on those fighters, at the 
manufacturer. I am curious, why, on a program where we really 
need to be moving--as a former Chief of Naval Operations (CNO) 
said, at the speed of light--why we are building the vehicle in 
one place, shipping it to another, then adding the government-
furnished equipment. And in some instances, I have got to admit 
it, it kind of reminded me of the middle of the night before 
Christmas assembling my kids' toys, someone looking at a manual 
and walking over to the vehicle.
    Again, we need to be doing better than that.
    So why don't you walk the committee through why we are 
doing this, why so many variants, and what can we do to move 
this along faster.
    Secretary Young. Maybe I could start and let the Captain 
add to it; and this gives me an opportunity to continue part of 
the answer I offered before.
    We have, I want to assure you, made a pretty determined 
effort to create common equipment installations for these 
vehicles. And there is a common turret; the Army and Marine 
Corps agreed to install the same turret on these vehicles. Both 
services will have Blue Force Tracker; both services are using 
the same radio racks; and for a period of time we had an 
agreement to install the same intervehicle intercom system or 
radio system. But then the Army came back through the Vice 
Chief of Staff of the Army and said, Army soldiers are trained 
on their particular system; it is in all their other vehicles. 
The common decision was to go with the Marine Corps system. The 
Army was very worried about having to do differential training 
for their soldiers in the field and their next-to-deploy, and 
they said, can we please go back.
    So I am pushing as hard as I can to get common to ease 
installation issues at SPAWAR, but at the end of the day I have 
to respect the senior military leaders' decision that says 
certain things have to be unique.
    And another piece of uniqueness is the jammers. The Marine 
Corps has a different operating concept in theater, and so it 
is currently using a different jammer than the Army is. That is 
a significant difference, because the differences between those 
two jammers are substantial in size, weight, and power. That 
forces another different install.
    If we get to the new Joint IED defeat organization CREW 2 
jammer, which will be common between the Army and Marine Corps, 
we will be able to ease that problem.
    So all of these are those challenges. We are confronting 
them, we are dealing with them as fast as we can.
    To your specific question about installation, the jammers 
and other things create circumstances--I only want to go so far 
in the open hearing, and would be happy to talk to you more, 
but there are a lot of radio emissions from this vehicle. And 
so SPAWAR is, I think I would say, uniquely qualified from a 
facility point of view and all to install this equipment, test 
it on a range, make sure there are not interferences, make sure 
the radio patterns that are produced by the vehicle are 
sufficient for all the purposes desired, and move forward.
    Every manufacturer doesn't have that kind of facility, and 
so you would find yourself shipping vehicles from a 
manufacturer where the equipment is installed; test it; if it 
doesn't work, ship it back; and other things.
    So I believe there are some significant efficiencies to 
massing the government furnished equipment (GFE) at SPAWAR, 
having people that have installed GFE in one vehicle install it 
in the next vehicle and the next vehicle. Even though the 
vehicle is somewhat different, it doesn't involve differential 
training.
    But to assure you of the next step, the team is making 
those choices every day. They look at what could be done at the 
vendor, and they are pushing things back to vendors that can be 
done at the manufacturing site and, I believe legitimately, 
only trying to do the things at SPAWAR that they feel they have 
to do, or that are most efficiently done there because one 
person can install all the jammers, all the radios, all the 
other things.
    Let me please give the Captain a chance to add to that.
    Mr. Taylor. Captain Hoover.
    Captain Hoover. Yes, sir. To add to the part about 
commonality. We are already seeing successes every day in the 
improvements of, the commonality of the various different 
vehicles and the systems we are putting in. Our role, 
obviously, is in the area of electronic engineering and 
integration, and that is what we specialize in, in our 
expertise in the testing and understanding of putting 
complicated systems together in a small, confined area.
    The biggest challenge that we have had to the different 
configurations was doing the prototyping and getting through 
those processes for all the different configurations.
    The good side of where we are at today is, we have 
completed a large number, especially a large volume of the 
vehicles that we are going to be seeing; and so now--as a 
matter of fact, every day--we are seeing a marked improvement 
on the speed of that integration getting to those vehicles.
    We still have challenges in working through those with a 
very good teaming arrangement with our manufacturers. We have 
recently seen a large number of engineering changes that we 
have put changes back for brackets and those sorts of things, 
and cable penetrations for the manufacturers--for those, to do 
those in line with their processes, so that we can improve the 
speed that we can do the electronic integration.
    We have also had, working with a large group of industrial 
engineers, to come in and look at our processes, seeing what 
else we can do. And, again, that is a daily review, looking for 
opportunities to continually improve.
    And so the continual process, improvement, the engineering 
changes back to the manufacturers. And then the learning curve 
from now that we are through the biggest bulk of the 
prototyping that we will see every day. Again, every day, our 
numbers of production of doing the electronic integration are 
improving.
    Mr. Taylor. Captain, as a quick follow-up, and Secretary 
Young touched on this: I very much appreciate the challenges of 
the need for interoperability of the different electronic 
components; and the folks that work with you did a very good 
job for talking about the need for stand-off distances. But 
once you have made the determination that this is where this 
antenna needs to go, this is where the jammer needs to go, why 
not send that work back to the factory?
    It is my understanding that in the fall of 1989, Charleston 
was hit with a very significant hurricane. It is also my 
understanding that sometime in the history of that city they 
have had a very dramatic earthquake there and that people in 
the Charleston area still worry about that sort of thing.
    Does it really make sense to have that as one focal point 
where five or six manufacturers all send their equipment to be 
put together? Doesn't that become a vulnerability? And what are 
we doing? Since, again, I recognize that vulnerability, I would 
hope you would.
    So what are we doing to spread the work and to get this--
and, again, the whole idea is to get it done right and to get 
it done quickly.
    Captain Hoover. Sir, as far as the natural disaster from 
the Charleston area, we have another alternate facility about 
60, 70 miles outside of Charleston in a different part of the 
State, the same square footage size, the same type of 
industrial capability from an electronic integration-type 
facility. So that is what we have in place.
    And we are putting right now--between now and Christmas, we 
will have in place an additional capacity for another 305 
lines, actually above what our current plan was of the 50 lines 
that we have already told folks about. And that will be 
additional capacity and a backup plan if there ever was a 
natural disaster, with a 72-hour plan to be able to relocate to 
another continuing operations-type facility.
    Mr. Taylor. The Chair will yield to the gentleman from 
Maryland, Mr. Bartlett.
    Mr. Bartlett. Thank you very much.
    How many MRAPs will be in theater by year's end?
    Secretary Young. Mr. Chairman, I believe in a previous 
press conference, Secretary Gates indicated that he thought 
there would be at least 1,500 in theater. I think we will do 
much better than that, but I would really rather not predict at 
this time.
    But our production schedule calls for us to produce--for 
industry to build and deliver almost 3,600 MRAPs by December 
31.
    I think Chairman Taylor rightly pointed out that if SPAWAR 
is very successful, and they have plans and they have applied 
Lean Six Sigma processes to it, that they can process those 
vehicles. Then you have to factor in the shipment times and 
some variability in the vessels.
    So I have been very hesitant to put a final number. I think 
it is significantly more than that 1,500, but if need be, we 
could get you something for the record that we would be, I 
think, conservative and comfortable with until we get closer to 
December.
    Because the other thing is, I have to build 1,000 vehicles 
in November and 1,200 vehicles in December. That is the real 
goal. Having built 500 in the last month, we are optimistic 
about that, but I am very dependent on my industry partners to 
be able to make the next jump from 500 to 1,000 and then to 
1,200.
    That is critical before I can answer your question as to 
how many will be in theater.
    Mr. Bartlett. It will be somewhere between the 1,500 and 
the 3,600?
    Secretary Young. That is probably a good estimate.
    Mr. Bartlett. Thank you very much.
    Acknowledging the significant work that has been done to 
produce MRAPs, how are you dealing with the variation that you 
find when the trucks arrive in Charleston that are not ready 
for integration?
    Secretary Young. Maybe I would ask Captain Hoover. He would 
be best able.
    Captain Hoover. Yes, sir. That has been a very good teaming 
arrangement between DCMA, the vendors. We have field service 
reps from each of the vendors right in Charleston working with 
us. And in almost all cases we are able to get the prototyping 
done, we can get the integration done in a parallel process, 
working with the manufacturers to get the vehicles done in a 
short amount of time.
    Mr. Bartlett. Are they not inspected before they are 
shipped? Or what is the problem that they arrive not ready for 
integration?
    Captain Hoover. Yes, sir, they are inspected. It is not a 
problem.
    It is basically that some of the vehicles were awaiting 
some components, for some of the equipment like an air 
conditioning unit or whatever. And so, due to the speed that we 
are trying to go and paralleling our processes, we go ahead and 
conditionally accept the vehicles. And then, again, the field 
service reps come and work alongside our folks in our 
facilities so that we can work together in a teaming 
arrangement so that we can complete the vehicles.
    Mr. Bartlett. Is there anything that we can do to help?
    Captain Hoover. Continuing to support our efforts on what 
we are doing I think is a great thing.
    Mr. Bartlett. Mr. Taylor asked the next question I was 
going to ask, and that is, why can't you have the C4I equipment 
installation done at the manufacturers and avoid this 
additional step?
    And I think that you answered that question.
    Is SPAWAR Charleston opening an MRAP integration facility 
in Orangeburg, South Carolina?
    Captain Hoover. Sir, in Orangeburg, South Carolina, is 
where we have our continuing operations facility that we have 
put in place. Again, it is similar, as far as capacity, to the 
building that we are using now. And it is meant to be the 
emergency backup facility if there was a natural disaster.
    But also what we are doing in order to make that run as 
smoothly and efficiently as possible, if we ever need to call 
upon it, we are putting a limited number of lines over into 
that facility. The other benefit of that is, it gives some 
additional capacity above what we currently have.
    Mr. Bartlett. Mr. Chairman, I have an obvious question to 
ask. If we were really wanting to get MRAPs as quickly as 
possible and if we have this fallback facility that we could 
use in the event that we lost the primary one due to a natural 
disaster, why aren't we using both of them so we are producing 
more vehicles?
    Captain Hoover. Yes, sir. That is the plan. Right now, the 
other important portion of the location of the facility that we 
are using now is the closeness to the testing, the electronic 
testing that we need to do, only a couple miles away. And now 
that is part of the prototyping; it is also part of the 
engineering change process that we need to do for the 
electronic testing.
    As we get over the major hurdles in the completion of all 
that testing, then we will be able to do more, basically, at a 
more remote site away from the testing facility.
    Mr. Bartlett. Is it a manpower shortage that prohibits you 
from manufacturing at both facilities now?
    Captain Hoover. No, sir.
    Mr. Bartlett. I am just curious. We have a fallback 
location that we could ramp up very quickly in the event we 
lost the primary one. If we really want to get MRAPs in the 
field very quickly, I think the obvious question is, why aren't 
we using both of them now?
    Captain Hoover. Yes, sir. Again, it is just the time it is 
taking us to get the other facility up and running and ready to 
go, and also where we are at in the prototyping process and the 
maturity of the process.
    Mr. Bartlett. I am still not getting a clear understanding 
of what keeps us from doing it.
    Secretary Young. Congressman, maybe I might add a couple of 
comments to that.
    One, we are anxious about some of the issues you all are 
raising. I asked recently that the Army look, given its 
experience in handling up-armored Humvees and kitting them with 
Frag Kits, to look at what facilities they have and whether 
they could participate in the MRAP program GFE equipment 
installation.
    So they are taking a look at that, and I am waiting for an 
answer about that, because I would see them as either a backup 
facility or a potential augmentation to the current capacity.
    SPAWARS's estimates say that at the single Charleston 
facility they can process the full vehicle rate of 1,200 per 
month. I think we all have--you know, this is one of the risk 
areas and a continuing learning experience. We need industry to 
deliver 1,200. Then we need to see SPAWARS progress 1,200. They 
are making very good process and have demonstrated the ability 
to process as many as 20 a day right now, I think.
    So it is not clear to us SPAWARS won't be able to handle 
the workload, but we are looking at options for backup, either 
through the alternate SPAWARS facility and/or Army facilities.
    Mr. Bartlett. Thank you, Mr. Chairman.
    Mr. Taylor. Captain, if I could follow up, I heard this 
comment last Friday and I heard you say it again today when you 
talked about 50 different production lines. My observations 
were that there were, indeed, 50 lines, but it looked more like 
50 different custom, one-of-a-kind events going on, as opposed 
to even one straight production line where, at this station, 
this is done; at the next station, the antenna is added; at the 
next station, the weapons are added.
    Truly--and, again, I very much respect your service to our 
Nation, but I don't think we are going to get anywhere near the 
results that this Nation needs with the situation that exists 
at SPAWARS.
    And I was curious, to what extent have you gone out to the 
private sector, to folks who work at Toyota, Ford, GM, whoever, 
folks who are in the business of mass production? You are in 
the business of being a great sailor, and I understand that we 
have asked you to do something on top of your normal role. But 
to what extent have you tried to involve industry experts to 
expedite this process?
    Because I am not saying this to belittle the efforts of 
anyone in your organization. I am saying this because kids are 
dying in Iraq for lack of these vehicles, and we need to do 
better. Tell me how you are going to do better.
    Captain Hoover. Yes, sir. We have teamed with a large group 
of outside industrial experts.
    Mr. Taylor. Walk us through this. This is a chance for this 
committee to learn something.
    Captain Hoover. Yes, sir.
    George Group, for one, who are experts in the Lean Six 
Sigma processes, understands industrial engineering processes, 
have teamed with them, have come in and are continually 
observing our processes.
    We also have local resident experts in the area of Lean Six 
Sigma and process engineering.
    And so that is a daily effort, to look through our 
processes, to look for that continual improvement. And, again, 
there are numerous examples on where we have had those 
improvements in the tooling areas, in measuring the drumbeat, 
the rate of the vehicles going through those efforts.
    Also, working with the manufacturers on those engineering 
changes and working with their team, their team of engineers, 
on--already putting more of the brackets and the drilling and 
the welding and those sort of things back into the inline 
process of the building of the vehicles.
    Mr. Taylor. Are you certain that when, on the industrial 
side, on the manufacturing side, they get to full production, 
that you have the people, the equipment, and the process in 
place to match their production so as to field these so that 
every time one rolls into Charleston, you are ready to take it, 
and within a day or two it is going out to the field?
    Captain Hoover. Yes, sir.
    Mr. Taylor. You have everything you need? If you come back 
before this committee in March, are you going to tell me that 
you don't need any additional equipment, you don't need any 
additional resources, you don't need any additional people? 
Because now is the time to clear the air on this.
    Captain Hoover. We have the people and the resources. We 
need to continue the teaming relationship; and we need a tight, 
close, working relationship effort with the manufacturers, 
obviously, for us all to be successful.
    That is a very important team, and I fully expect that that 
will continue and only continue to improve.
    Mr. Taylor. The Chair recognizes the gentleman from Texas, 
Mr. Ortiz.
    Mr. Ortiz. Thank you, Mr. Chairman.
    Secretary Young, thank you for being with us today--all 
three of you.
    As chairman of the Readiness Subcommittee, we want to be 
sure that our troops get the best equipment that we can give 
them. And I understand that the MRAP contains some of the 
newest, latest technology. But I see a chess game. We move, 
they move. We come up with a new technology or new equipment, 
then they come up with different ways to destroy our equipment.
    I am pretty sure that as we are moving along and we are 
using the MRAPs--and I know that there have been some attacks 
on some of the MRAPs and, thank God, that some of our Marines 
and soldiers have been able to walk away and not to be maimed 
or injured like before. But the enemy has always been able to 
adapt real quick.
    Can we avoid that? As we are learning from experiences with 
the MRAP there, are we telling our engineers, do they know 
exactly what happens? How can we provide the information 
learned from these experiences so that we can--because we are 
providing the same vehicle all the time. It defeats the 
purpose. We need to make adjustments as we move along. And 
maybe you can give me a little insight on that.
    Secretary Young. Congressman, probably a couple important 
points to that.
    One, the MRAP team has a competition under way for an MRAP 
2 vehicle, giving people--to provide vehicle options against a 
higher standard of protection.
    Then I think you would be encouraged to hear that we are 
testing the existing MRAPs against that higher standard, and 
that testing is informing the team and leading people to make 
changes on some of these vehicles. So the next orders of 
vehicles will potentially have changes that will make them more 
like this MRAP 2 standard we would like to achieve.
    And so we are constantly testing and providing that data. 
And then we get information from the field, as you said, and we 
have the opportunity to make changes to the vehicles.
    I would tell you, as General Brogan told me just during the 
break in the hearing, the second series of development testing 
on the existing MRAPs is going very well and showing that these 
vehicles are very capable.
    In addition to that process, we are working with the 
supplemental funds that you all have provided to add additional 
armor protection to those vehicles, to pace some of the threat 
we see in the theater.
    So we are taking all those steps, and we will probably 
provide you with additional details in a different forum.
    Mr. Ortiz. You know, we read in the newspaper about 
individuals saying, well, we might be able to use it here in 
this type of terrain. But if we go someplace else, we might not 
be able to use it. But I am pretty sure that as we move along, 
we will be able to make some changes to where, if we fight--and 
I hope that it never happens that we have to fight a different 
war, different techniques--that maybe we can continue to use 
some of these vehicles.
    Secretary Young. Maybe I would add a couple of additional 
comments to that.
    I mean, the vehicles have good survivability because of the 
features that Chairman Taylor mentioned and, also, they are 
heavy. They range from 30,000-plus pounds to 80,000 pounds at 
the extreme end. That gives them some of the survivability 
also.
    That also deters to some degree their mobility and their 
speed, and in certain terrain environments MRAPs are proving 
not as effective for soldiers. And we are getting reports from 
the field that some places they want to keep the up-armored 
Humvees. They need those for mobility and speed and other 
factors.
    So the force is going to keep informing us about what best 
lets them do their mission, and we will work toward that. And 
then out of both of these programs, we are pulling knowledge--I 
think it goes to Chairman Abercrombie's comment--we are going 
to build a replacement for the Humvee. We call it the Joint 
Lightweight Tactical Vehicle.
    I recently urged that we look at building prototypes of 
those vehicles and testing to see how survivable we can make 
those vehicles. There is a desire for those vehicles to be 
small and light and mobile like Humvees, but have MRAP-like 
protection. Well, those are inconsistent goals, but with some 
technology and design work, maybe we can get part of that. We 
need to build prototypes, test them, and see how close we can 
come; let that inform the requirement. And if any vehicles are 
successful, we will move forward with developing those vehicles 
to have a Humvee replacement.
    So it is constantly improving the MRAPs. We will continue. 
There is a Frag Kit 6 now for Humvees. We will keep gathering 
information, test in the theater and make improvements on what 
we have.
    And then we are looking forward to the next generation of 
vehicle.
    Mr. Ortiz. Thank you, Mr. Chairman.
    Mr. Taylor. The Chair thanks the gentleman from Texas.
    The Chair now recognizes the gentleman from Hawaii, Mr. 
Abercrombie.
    Mr. Abercrombie. Thank you, Mr. Chairman.
    Let me work backwards, Mr. Young. You just mentioned the 
question of prototypes, which takes me to a--some of the area 
that I don't want to go into at great length today, because I 
don't think the hearing warrants it.
    But you have a unique background. I won't go over all of 
your biography, but for those in the audience and those 
listening in or paying attention to this today, they may not be 
fully aware of it. You have, I think, a unique and very useful 
background in the sense of having worked on the Defense 
Appropriations Committee.
    Your familiarity with acquisition comes from both an 
academic background and familiarity with the engineering side 
of things, as well as the political side of things. And I don't 
mean that in a pejorative sense. I am talking about the process 
that is necessary, particularly from an appropriations point of 
view; you are familiar with the history, the legislative 
history.
    So when you mentioned the prototype, I think--if you are 
not aware, you will be at the end of my remarks that I am very 
much in favor of what you are trying to achieve because I think 
it makes good sense. That is why I wasn't quite sure what you 
meant when you said that someone might, with regard to Humvee 
replacement and the Joint Lightweight Tactical Vehicle, that 
the prototype might be seen by some as looking at inconsistent 
goals.
    Could you enlighten me? Or did I misunderstand what you 
were trying to get at? I do not see, in other words, the 
establishment of a prototype process as being inconsistent with 
anything other than good fiscal--sound fiscal policy and sound 
legislative policy with regard to what we should fund and how 
we should do it.
    Secretary Young. Mr. Chairman, I am very grateful for your 
comments. I think what you sensed in my comments is, the 
Department had embarked on a strategy that said we would like 
to have a competition, pick someone based on a paper proposal 
to build a vehicle to replace the Humvee, and have that vehicle 
cost half or less of what MRAP cost and be more survivable or 
as survivable as an MRAP.
    I said, I am not sure technology supports that. Even if it 
does, I think, consistent with your comments, I, as the acting 
under secretary, said it is a better strategy, given the times 
we have gone into later stages of development with immature 
technology, to do prototyping work and convince ourselves that 
technology will support and meet the requirement and we 
understand about what it will cost, and then move into that 
later stage of development to try to avoid schedule slips, cost 
growth, and the other bad things.
    So across the Department, I am urging we look very hard at 
applying prototyping strategies, which I am actually very glad 
to hear that might be consistent with your view.
    Mr. Abercrombie. Too bad I am not a Senator that can 
confirm you.
    Secretary Young. I would agree with that also, sir.
    Mr. Abercrombie. But I have an idea that anybody in the 
listening public, listening to what you are saying, would be a 
little bit shocked and maybe a little perturbed that that is 
not what we are doing right now.
    The assumption, I expect, particularly in the private 
sector, would be, let alone in the taxpaying public, would be, 
isn't that the way we do things anyway? And, of course, the 
answer is ``no.'' So what you are really talking about here, 
are you not, is a change of culture.
    Secretary Young. Yes, sir.
    Mr. Abercrombie. A change in approach?
    Secretary Young. Yes, sir.
    Mr. Abercrombie. That is more than tinkering with the 
process. It is an entirely different concept of what 
constitutes the capacity to utilize--even create technology, 
let alone utilize technology, on behalf of the national 
security mission.
    Secretary Young. Maybe I could add more.
    What I particularly want to do is, I want to learn lessons 
and make mistakes. Because we do have to learn, especially in 
technically risky things. I want to learn those lessons and 
make those mistakes when I am spending at lower monthly rates 
of taxpayer dollars' expenditure in a prototyping phase, and 
hopefully, not learn those lessons when I am spending money at 
much higher rates in the very costly design and development 
phase.
    Mr. Abercrombie. Not only that. But you are also dealing 
with the context of the military industrial complex. And, 
again, I don't use that in the pejorative sense. I use that in 
the sense of the warning that was issued by President 
Eisenhower at the end of his term.
    As someone who understood, as much as he helped create, the 
military-industrial complex, he understood that there were 
consequences and implications of it. There are sound reasons 
for that, right?
    And that is why I said, it is not pejorative on my part. It 
is too easy a philosophical or ideological position to take.
    But the reason I want to just pursue it a moment or two 
more in this context of the MRAP. We don't want to be in a 
situation, whether it is MRAP or anything else you may be 
contemplating, what these subcommittees will have to deal with.
    Hasn't part of our difficulty been that we hand out these 
contracts, have a goal on a piece of paper, and then say, okay, 
you go try to accomplish this? And what happens is, we start 
spending not thousands or millions but sometimes billions of 
dollars. You then create--and Mr. Taylor made it very clear, 
this is not a jobs program we are looking at here. Some jobs 
will come, some jobs might. They might be in some districts, 
they might not be in others. They might change.
    I have had discussions with some of the people on our 
second panel, for example, saying, are you prepared, do you 
understand that you may gear up to a very high percentage of 
turnout--build-up and overhead both in terms of personnel and 
investment--which may have a termination point, which may have 
some kind of serious consequences for you financially? That is 
one of the reasons that I am so interested in the question of 
capital budgeting and so on.
    But in this instance, then what happens--this is my 
understanding of what you are driving at here--is that you then 
get a vested political interest in continuing what is going on. 
And it is hard, and I have full understanding of any Member's 
situation when somebody comes and says, look, Congressman, 
look, Senator, we have got 1,000 jobs here and this investment 
is going.
    Of course, nothing is being accomplished. We are not really 
getting the helicopters, we are not really getting the planes, 
we are not really getting the tanks. We think we are. Maybe we 
will. Or we have got to slip it another four years or five 
years, but you have got to keep giving us the money.
    And then what happens is that the capacity to do what we 
are talking about right now, this rescue mission that Mr. 
Taylor is speaking of, is compromised. And it finds itself in 
extraordinary difficulty or requires us then to move very 
rapidly in another direction in terms of funding which, more 
often than not, will involve a supplemental budget because we 
didn't anticipate it during the regular budget process.
    Am I being unfair in characterizing this?
    Secretary Young. It is very fair.
    Mr. Abercrombie. And if I am not, am I correct in saying 
that you want to try and change that, that kind of doing 
business?
    Secretary Young. Yes, sir.
    Mr. Abercrombie. Okay. Does that then apply toward the MRAP 
2?
    Secretary Young. I think most aspects of MRAP are aligned 
with some of the things we are talking about.
    They asked multiple vendors to bring vehicles to test in 
the first phase of MRAP. And, indeed, we leaned forward and 
bought vehicles from some of those vendors, and one or two of 
those vendors didn't pass the testing. And we have some of 
their vehicles----
    Mr. Abercrombie. And that's the way it is.
    Secretary Young [continuing]. We are going to use for 
training purposes so the taxpayer money is not wasted. But they 
are not going to get more contracts.
    Mr. Abercrombie. So if Members of Congress are serious 
about wanting to limit government and wanting to spend the 
dollar in the correct way, of wanting to utilize, we are going 
to have to rely on some cold, hard judgments being made; and 
that means some of us may have to say to our people, we don't 
get this, maybe we will get something else. We will have to 
move in another direction, as Mr. Taylor already indicated.
    More than one of us have been through a situation where you 
told 1,300 people or whatever it is, this is not going to 
happen any longer. So, okay. So we are going to get rid of that 
jobs approach here, per se.
    Then the last question I have--thank you, Mr. Chairman, for 
allowing it--we are getting lessons. You are talking about, 
like, the 24 variations and so on. Without taking a whole lot 
of time, maybe, that would be better spent in another hearing, 
is it fair for me to say, or do you have then a kind of 
lessons-learned concept or approach with regard to your 
experience now with this singular focus on MRAPs and the 
congressional push that is going on with it in the sense of 
applying lessons in terms of the survivability?
    Are you testing out in the field? That is what I am trying 
to get at. Are we following up? Do I understand you correctly 
that we are following up in the field, asking for the soldiers 
in the field to give us information as to whether or not what 
we are giving them actually is accomplishing what they need?
    Or because I gleaned from what you were saying, in some 
instances, a lighter vehicle, maybe not quite as armored, is 
something that is seen as useful and applicable; and in other 
instances, they are going to need something else.
    Secretary Young. We are looking for that feedback. For the 
MRAP program, per se, there has been a first round in 
development tests; a second round which four of the vehicle 
vendors are still in the process of.
    Mr. Abercrombie. I am not talking about testing in a field 
sense. I am talking about testing in a theater sense.
    Secretary Young. Right. I wanted to, if I could, gradually 
work my way there.
    There is a third round. Those development tests are defined 
by what we are seeing in the theater in terms of explosive 
types and other things.
    And then the actual results and experience in the theater, 
we get that data and process that, both to define our tests and 
to learn what we need to do about vehicles going forward.
    So, yes, sir, that happens.
    Mr. Abercrombie. And, Mr. Greenwalt, you escaped most of 
the attention today. I presume you are Mr. Young's strong arm 
or his associate in this? Do you associate yourself with this 
approach?
    Mr. Greenwalt. Yes, sir, I do. And I think it is the 
lessons learned from this particular procurement: that our 
industrial base is agile, that we rely on commercial products 
and commercial vendors, and we have been able to pull together 
in a very rapid period of time so you can rapidly prototype 
with existing technologies and existing manufacturers.
    And I think----
    Mr. Abercrombie. I think the country and the Department 
will be well served, Mr. Young, if you are able to move forward 
with this.
    Thank you, Mr. Chairman.
    Mr. Taylor. The Chair thanks the gentleman from Hawaii.
    We now recognize the gentleman from South Carolina, Mr. 
Wilson.
    Mr. Wilson. Thank you, Mr. Chairman.
    And thank all of you for being here today. I am so 
interested in the MRAP program. And I am interested as a Member 
of Congress. I am a veteran myself, but I am particularly 
interested in that I have four sons serving in the military. 
One served for a year in Iraq, another is on his way to Iraq, 
and so I am interested for our troops. And so much of the 
feelings that I have are to provide the best equipment we can 
to protect our troops. And what you are doing is so important; 
and I want to thank you for your efforts.
    In particular, I have had the opportunity, thanks to 
Congressman Abercrombie, to recently be in Iraq and 
Afghanistan. My National Guard unit is in Afghanistan. In my 
visits--eight times to Iraq, four times to Afghanistan--as he 
was talking with persons in theater to find out how successful 
and how helpful the equipment that our young servicemen and -
women have, it is just really heartwarming. And so you are 
making such a difference.
    Also, Captain Hoover, I want to thank you. I have had the 
opportunity to visit SPAWAR. You have excellent personnel. They 
are so enthusiastic.
    And, of course, I am a bit partial. The chairman has had 
two daughters go to the College of Charleston. I had the 
extraordinary opportunity to be born in Charleston. So I am 
very pleased about what you all are doing.
    As we look ahead, I am very interested in finding out, what 
is the planning for long-term sustainment of the MRAP program? 
And any of you could answer that.
    Secretary Young. Congressman, I think, unfortunately, none 
of us is exactly the right person to answer that question. The 
service chiefs have indicated and Secretary Gates has asked 
them to think about that very issue: How will you, long term, 
integrate MRAPs in the force structure? And I think those 
deliberations have not concluded yet.
    In general, the chiefs have indicated these are heavy and 
large vehicles, and for some of their operational concepts--
very expeditionary, mobile--they don't fit well. They fit very 
well, obviously, for the circumstances in Iraq. So some of the 
vehicles, the service chiefs have indicated, will be stored for 
a period of time.
    We might not need as many as we are buying for the Iraq 
situation if we are successful in continuing to stabilize Iraq 
and the force mission changes there. But those decisions are 
being deliberated on and made as we talk; and Secretary Gates 
is working on it.
    I can't give you much more commentary than what I have 
offered.
    Mr. Wilson. Mr. Abercrombie touched on this, too. And that 
is, when do you require another influx of funds in order to 
preclude a possible production break in the MRAP program?
    Secretary Young. The funds that I understand are in the 
fiscal year 2008 Defense Appropriations conference report that 
is before, I believe, the Congress--today, even--give us what 
we need for fiscal year 2008, which is really, to be candid, 
awesome and incredible. In a matter of months here, the 
Congress has provided $22 billion to buy these vehicles. It is 
far and away the biggest program activity in a space of time in 
the Department. So the Congress has been extraordinarily 
helpful on this program.
    Mr. Wilson. And, again--I know I am very supportive of what 
this can mean to protect our troops.
    The final question I have: Are you experiencing any supply 
problems at the sub-tier supply base?
    Mr. Greenwalt. In April and then just recently, a few 
months back, I tasked the Defense Contract Management Agency to 
look for potential bottlenecks, and they have identified a 
number of them. But the most recent report is that these 
problems are manageable, and that we are able to work our way 
through them.
    But there are potential choke points in steel, in tires, in 
axles, and a few subcomponents. But, again, these problems are 
being worked through on a daily basis.
    And because the MRAP program has a DX rating, which is 
essentially the MRAP program obtains priority to all of these 
components and materials, we are not seeing the supply 
disruptions that could have occurred.
    So I think we are doing--it is a tremendous job that is 
going on out there by the vendors and by government personnel, 
and we have got our hands on it.
    Mr. Wilson. Again, I want to thank you as a veteran and 
thank you as a member of a military family. We want the best 
for our troops, to protect our troops.
    And thank you very much, Mr. Chairman.
    Mr. Taylor. The Chair thanks the gentleman from South 
Carolina.
    We want to thank our witnesses.
    We also want to recognize we are lucky to have former 
Representative Dave Martin with us today, keeping us on our 
toes.
    Captain, last question. I am curious, what was your flow-
through SPAWAR in September? How many vehicles? In other words, 
how long did it take a vehicle to enter your facility, to leave 
your facility in theater, in September?
    How long would it take that same vehicle to flow through 
your facility today? And what is your anticipated time for 
January?
    Because, again--I hope I am dead wrong; I hope you are 
exactly right; I hope there is not a train wreck on the way--
but I want to hear from you that you have a plan. And give me 
an idea how these things are proceeding through your facility 
quicker, so that we don't have a problem there.
    Captain Hoover. Yes, sir. Right now, I will start with our 
goal.
    Our goal is to get from time of receipt to embarkation in 
seven days, a seven-day flowing process. I do not recall the 
exact numbers on average for the month of September. For the 
end of the month of October, it was roughly 21 days; and the 
reason for that, the difference--September was a little slower 
than that. And the reason for the difference and the reason why 
it is much longer than what we want it to be or require it to 
be is because in August, September, even up through October, we 
have been heavily involved in the prototyping process which 
goes into the average flow rate, the calculation of those 
numbers. And so when we have a group of vehicles coming in from 
the manufacturers, as we are going through the prototyping 
process, which takes us several more days than just doing the 
integration itself, basically we have vehicles there that are 
waiting to get into the integration process once the 
prototyping is done.
    Now that we are over the majority of those hurdles and we 
are over the majority of those prototyping processes, from the 
raw vehicle number at over 80 percent that now we are seeing--
and we are right where we thought we would be at this point, 
knowing that November was our big month, knowing that we needed 
to get through most of the prototyping so that when, in 
November, the largest volume that we have seen to date, starts 
to flow, we can continue to narrow down that 21-day time.
    And it is not 21 days of integration, but that is from the 
time that it arrives to the time that it departs, basically, to 
get that down to that 7-day process. And now we are seeing 
daily an improvement on that speed. And, again, that is due a 
lot to the successes in getting through the prototyping, 
working with the manufacturers, and now working on just that 
continual process improvement to make sure we are making our 
goals.
    Mr. Taylor. When do you anticipate your facility will be at 
that 7-day target?
    Captain Hoover. Sir, by the end of the month of November, 
we should have the capacity we estimate, that our capability 
will be at 40 vehicles a day. So it is more that we are 
tracking it, than the whole entire process, because we are 
looking more at keeping up with the flow of, the drumbeat of, 
the number of vehicles processing through. And then, by mid-
December is when we believe--we are showing right now that we 
will be at the full 50-a-day vehicles, which is what we are 
required to do to keep up with the drumbeat of, the flow of the 
vehicles--keep pace.
    Mr. Taylor. I have got to believe that you supply these 
numbers of what is flowing through your facility to someone on 
almost a daily basis. Is that correct?
    Captain Hoover. Yes, sir.
    Mr. Taylor. I would like to request that you also supply 
those numbers to this committee.
    Would you have a problem with that, or would Mr. Young have 
a problem with that? Okay.
    And, again, we very much appreciate all of you.
    Yes, Mr. Young.
    Secretary Young. Could I just add, every time I brief the 
Secretary, he shares the concern you have.
    I have also visited SPAWAR. They are pacing the vehicles. 
They have had to deal with the fact that we contracted for new 
vehicle types that showed up. But this is the metric we want to 
watch, and this is why it is important for us to have some 
backup plans, too.
    It is of concern to Secretary Gates. And I share your 
concern; I am happy to share that data with you.
    [The information referred to can be found in the Appendix 
beginning on page 117.]
    Mr. Taylor. Captain, either you or somebody in your 
organization last Friday mentioned that you see on the 
deliveries that come to your facility, that it starts out kind 
of slow and then toward the end of the month you tend to get a 
wave of vehicles coming in, which certainly makes it harder on 
your organization to process them in a straightforward, timely 
manner. What is being done?
    And I am also going to give our vendors an opportunity up 
front to let them know this is part of their questioning.
    What is being done to change that, to get it more balanced 
out, one-quarter of a month's production in each week coming 
from your vendors, again, to lessen the load on your people so 
that it is neither too little nor too much?
    Captain Hoover. Sir, I am only going to speak from what we 
are seeing in our facility.
    In the month of October, we saw an improvement, although at 
the end of the month of October we did have a bigger bulk at 
the end of the month, but not as bad as it was in the month of 
September. Already in the month of November we are seeing 
marked improvement on a steady flow, almost a daily delivery of 
vehicles coming through.
    So the program office has done a great job on changing 
that. And we are seeing--again, at our facility, we are already 
seeing a significant difference. Especially this month right 
now in just this short month that we have started, we are 
seeing an improvement in that area.
    Secretary Young. Maybe I can add, because that is a 
challenge for SPAWAR, and in anticipating this, I tried to get 
that data. In the first 5 days of October, 21 vehicles were 
delivered. In the last 5 days of October--maybe, actually, 7 
days--231 vehicles were delivered. That was a very big wave at 
the back end.
    In the first seven days of November, so far, already 100 
vehicles have been delivered from industry. That is a very 
positive sign. Paul Mann and General Brogan and the MRAP team 
have tried to move the contracts to be weekly-based deliveries 
and are even looking at daily-based deliveries.
    So we are going to try to force, through the contract, that 
discipline, and work with the vendors to get to that steadier 
flow.
    Mr. Taylor. Thank you, Mr. Secretary.
    Any additional questions?
    Mr. Secretary, we very much appreciate you and this panel 
being here. We appreciate your service to our Nation.
    And I want to give you one last opportunity. If there is 
anything you need from this committee, tell us now.
    Secretary Young. I have one thing I need, but it is better 
to talk to you.
    Mr. Taylor. If you prefer to do it off the record.
    But, again, this is a United States of America problem, and 
we want to do our part. We expect you to do your part. If there 
is anything this Congress is not doing, we need to know about 
it.
    Secretary Young. Let me not leave you with the wrong 
impression. If the appropriations bill provides that $11 
billion, we have the tools we need. We will have to work some 
processes in the Department to execute it, and we will do that 
and move forward.
    Mr. Taylor. Again, we want to thank the panel for being 
here. Thank you for your service to our Nation. The first panel 
is dismissed.
    The Chair would now like to welcome before the committee 
our second panel. We are very fortunate to have a number of 
representatives from industry, who are involved in the 
manufacture of the Mine Resistant Ambush Protected Vehicle. 
They include Ms. Linda Hudson, President of Land & Armaments 
Systems, BAE Systems; Mr. Gordon McGilton, Chief Executive 
Officer of Force Protection; Mr. David Heebner, President of 
General Dynamics Land Systems; and Mr. Archie Massicotte, the 
President of International Military and Government (IMG), LLC.
    We want to welcome you here. It is normally the practice of 
this committee to limit witnesses to five minutes. I am willing 
to be flexible on that, but I would hope that you keep in mind 
that there will be additional votes today. So, in fairness to 
all of our witnesses, please try to do it as expeditiously as 
you can, but we are willing to be flexible on the five-minute 
rule.
    The Chair now recognizes Ms. Linda Hudson.

   STATEMENT OF LINDA P. HUDSON, PRESIDENT, LAND & ARMAMENTS 
                      SYSTEMS, BAE SYSTEMS

    Ms. Hudson. Thank you. Chairman Taylor, Chairman 
Abercrombie, Ranking Member Bartlett, I appreciate the 
opportunity to address your committees. Having submitted my 
statement for the record, I would like to provide a few opening 
comments.
    I appear before you today to discuss the MRAP systems 
produced by BAE Systems. Before beginning, on behalf of BAE 
Systems, I would like to thank the subcommittees and this 
Congress for your support of the MRAP program.
    I am the President of BAE Systems Land & Armaments 
Operating Group. During my 35 years in the defense industry, I 
have never seen industry and government accomplish so much so 
fast. My organization has 18,000 employees across 17 States in 
the United States, as well as the United Kingdom, Sweden, and 
South Africa. All of my employees and the employees of the 
greater BAE Systems Corporation have made MRAP our number one 
priority.
    Our global business designs, produces, resets, upgrades, 
and provides worldwide support for combat vehicles, tactical 
vehicles, military armaments, naval fire support systems, 
advanced armor solutions, and individual soldier survivability 
systems for the United States and our allies. We bring all of 
those resources to the MRAP program.
    Having recently acquired Armor Holdings, we now provide the 
Family of Medium Tactical Vehicles, or FMTVs, and have played a 
major role in improving Marine and soldier survivability by up-
armoring Humvees and providing advanced body armor on an 
accelerated schedule to meet the evolving threat. The 
combination of BAE Systems and Armor Holdings has resulted in 
unmatched capabilities in warfighter and vehicle survivability. 
To date, we have received orders for 2,933 MRAP vehicles. Allow 
me to summarize our three MRAP systems currently under 
contract.
    First, the RG-31 vehicle has been produced since 1996 in 
our Land Systems South Africa business. Our legacy of building 
mine-resistant vehicles in South Africa goes back 30 years. We 
have a business relationship with General Dynamics to allow 
them to market and coproduce the RG-31. I will defer to my 
colleague from GD to comment further on this contract.
    Second, building upon our RG-31 experience in South Africa, 
technology was transferred to our ground systems business here 
in the United States, and a next-generation mine-resistant 
vehicle called the RG-33 was developed by BAE Systems. This 
design incorporates unprecedented survivability features 
tailored for our U.S. forces. The RG-33 is currently being 
supplied in four different variants, including the generic 
Category I and II systems, and an ambulance and a SOCOM 
variant. The contracted production currently under way runs 
through April of 2008.
    And, finally, as I mentioned previously, in July 2007 BAE 
Systems acquired Armor Holdings. That acquisition added an MRAP 
variant known as the Caiman, based upon the design of the U.S. 
Army's Family of Medium Tactical Vehicles. In addition to 
meeting the MRAP survivability requirements, this vehicle has 
been designed to have parts commonality with the FMTV, 
resulting in enhanced supportability. The contracted production 
for Caiman runs out in February of 2008.
    Congress, the Office of the Secretary of Defense, and the 
services should be commended for recognizing this critical need 
to protect our troops and providing the necessary priority and 
funding.
    BAE Systems has been leaning forward, often self-funding 
activities in advance of contract, with the sole focus of 
rapidly delivering the most survivable vehicles to protect our 
troops. These efforts have been challenging, with requirements 
to deliver vehicles within weeks of contract award and only 
months after initial design.
    For example, we delivered Caimans 43 days after contract 
award. We designed and delivered RG-33 in less than 7 months; 
and subsequently, the ambulance variant, 13 weeks after 
contract award.
    We have five principal MRAP manufacturing sites: York, 
Pennsylvania; Aikin, South Carolina; Sealy, Texas; Fairfield, 
Ohio; and Johannesburg, South Africa. Assuming receipt of 
additional orders in time to ensure continuous production, we 
will achieve our currently planned maximum rate of 600 vehicles 
per month in April of next year.
    Moreover, activity is under way to ensure that components 
of our MRAP variants can be built in all of our major 
facilities. BAE Systems is prepared to make additional capital 
investments to increase capacity.
    Last, we stand ready to further expand monthly MRAP 
production by allowing other manufacturers to produce our MRAP 
design variants under license if so desired.
    I would like to single out the MRAP program manager, Mr. 
Paul Mann, for his unceasing leadership. It is noteworthy that 
normal contractual practices could not possibly keep up with 
the fast pace of this program. We have maintained an open, 
direct, and professional relationship with Mr. Mann and his 
program office. This collaboration within the framework of the 
contract deserves commendation.
    We are prepared to collaborate with the other prime 
contractors to improve survivability, accelerate production and 
fielding, and enhance sustainment of the MRAP vehicles. We are 
already collaborating with the other prime contractors here to 
cross-train our field service representatives on all the 
vehicle variants to optimize in-theater support. We stand ready 
to work with our colleagues here today to better meet the needs 
of the troops.
    In closing, and on behalf of BAE Systems and the Land & 
Armaments team, I would like to thank you for this invitation 
to come tell our MRAP story. We are very proud to be a part of 
the MRAP program, providing these highly survivable vehicles to 
the warfighters, and we are well positioned to respond rapidly 
to the continuing program needs.
    Thank you, Mr. Chairman.
    Mr. Taylor. Thank you, Ms. Hudson.
    [The prepared statement of Ms. Hudson can be found in the 
Appendix on page 76.]
    Mr. Taylor. The Chair now recognizes Mr. Gordon McGilton, 
Chief Executive Officer of Force Protection.

   STATEMENT OF GORDON MCGILTON, CEO, FORCE PROTECTION, INC.

    Mr. McGilton. Thank you, Chairman Taylor, Chairman 
Abercrombie, and members of the House Armed Services Committee. 
Force Protection Industries appreciates this opportunity to 
update with regard to the critical MRAP program.
    As of the 1st of November, Force Protection has delivered 
1,389 Cougar and Buffalo mine protected vehicles to our 
servicemen and -women. They are as follows: 146 Buffalo route 
clearance vehicles; 153 Cougar Iraqi light armored vehicles; 28 
Cougar hardened engineer vehicles; 216 Cougar joint EOD rapid 
response vehicles; 5 Cougar engineered vehicles delivered to 
Canada; 108 Cougar Mastiffs for the United Kingdom; and 734 
Cougar MRAP Category I and II vehicles.
    In order to put the delivery of those vehicles into some 
perspective, I will provide a brief synopsis of our history 
relative to building mine protected vehicles.
    Force Protection's sole mission is to manufacture, deliver, 
and maintain vehicles that feature the best protection 
available to the American and Coalition servicemen and -women 
facing the threat of improvised explosive devices. MRAP 
manufacturing is not an additional business line for us; it is 
our only job. Every action we take, including investments and 
partnerships, is designed to help fulfill this mission.
    Force Protection Industries was incorporated in early 2005. 
At that time, we employed 200 people and occupied 100,000 
square feet of manufacturing space in South Carolina.
    By the end of 2005, we expanded to 250,000 square feet of 
space and 350 employees. Most importantly, we had delivered 60 
vehicles. By the end of 2006, we had quintupled the number of 
vehicles delivered to 296. In 2006, we also had expanded our 
manufacturing facilities to 450,000 square feet and added 400 
employees for a total of 750 employees.
    Today Force Protection employs 1,800 workers and occupies 
nearly a million square feet of manufacturing space in four 
facilities in South Carolina and North Carolina. These 
manufacturing facilities are also supported by a significant 
research and development facility and a 300-acre blast and 
ballistics testing facility also located in South Carolina.
    In addition, we formed a new company, Force Dynamics, 
through a joint venture with General Dynamics Land Systems. 
This partnership gives us access to General Dynamics' 
substantial manufacturing capabilities and as a result there 
are now multiple facilities manufacturing Cougars. Our supply 
chain has been expanded and our ability to rapidly incorporate 
design improvements is greatly enhanced.
    Of particular note, we have been able to reduce the price 
of a Cougar by roughly $150,000 per vehicle to a current price 
of under $490,000. We have expanded the enterprise to include 
additional manufacturing by using subcontracting and licensing 
agreements.
    Because of the potential demand for MRAP we focused on two 
program goals. The first was to establish enough manufacturing 
capacity within our joint venture with General Dynamics so that 
we could deliver roughly 500 vehicles a month. The second goal 
was to license production to other commercial and military 
industrial contractors to expand or contract our delivery 
capacity as necessary to meet the demands that are likely to 
change periodically.
    Additionally, teaming allows us to spread our manufacturing 
capability to ensure that we are not too reliant any one 
supplier or any one plant. In fact, Mr. Chairman, this kind of 
teamwork has been a hallmark of Force Protection's story. It 
has provided tremendous benefits for our men and women in 
harm's way.
    The following is a summary to date of Force Protection's 
interaction with other manufacturers. Through our joint venture 
with General Dynamics, Force Protection has increased capacity 
across all functional areas, including engineers manufacturing 
supply management logistics planning and execution and 
sustainability. GDLS produced more than 60 Cougar vehicles in 
the month of October 2007 and will reach 194 vehicles a month 
by February of 2008.
    Through Force Protection's cooperation with Spartan Chassis 
we have been able to expand our robust automotive and final 
assembly capability. As a consequence, our enterprise can now 
rely on Spartan to help us deliver several hundred Cougars per 
month.
    Working with Armor Holdings, formerly Stewart and Stevenson 
and now BAE, Force Protection today has delivered 200 
additional Cougar vehicles. This capacity could be available 
for continuing delivery should sufficient orders require.
    Force Protection along with Marine Corps Logistics Base at 
Albany, Georgia, performs Cougar capsule manufacturing. This 
military depot is in production and is a valuable part of our 
enterprise.
    By licensing our Cougar designs to BAE Ground Systems 
Division, we have jointly delivered over 350 additional ILAV 
vehicles to the Iraqi Army. Force Protection continues to 
produce and support these vehicles in conjunction with BAE.
    Ongoing discussions between Force Protection and Red River 
Army Depot will facilitate the establishment of an Army MRAP 
maintenance and training facility. We have also looked into Red 
River's manufacturing capacity in some fashion to manufacture 
Cougars should the demands dictate.
    Likewise, Force Protection has an existing agreement with 
Textron to manufacture Cougars. Although this agreement has not 
been executed due to the lack of orders the opportunity is 
still available to us. Should the demands of the program 
warrant it, we will quickly add Textron to our team and expand 
the manufacturing base for Cougar MRAPs.
    Finally, Mr. Chairman, Force Protection is working with the 
Medical University of South Carolina, MUSC, to help fund the 
establishment of a research center to improve the medical 
technology available for diagnosing and treating traumatic 
brain injury resulting from IED attacks. Through this 
agreement, MUSC will learn more about the physics of a blast 
using our South Carolina test range. We hope to learn more 
about the physical effects on the soldiers, thus enhancing the 
vehicle designs in an effort to prevent the injuries from 
occurring in the first place and also to try to minimize them 
before they happen.
    In June of 2007, representatives of the Department of the 
Navy asked Force Protection to determine the maximum production 
rates we could achieve by December 31st of 2008. Our exhaustive 
review of every production aspect, including availability and 
training of new employees and access to critical parts for the 
Cougar, led us to conclude that the Force Protection led team 
could produce 500 vehicles per month by April of 2008 and 1,000 
vehicles per month by July of 2008. That would be for a total 
of 12,100 MRAPs by the end of 2008.
    Our analysis did find two areas of concern: Tapered roller 
bearings which are used to manufacture our transfer cases and 
axles. The conclusion of the DX DPAS rating has eliminated the 
roller bearing concern and we have identified alternative axle 
suppliers. Our analysis found no other show stoppers that would 
prevent us from achieving production rates of approximately 
1,000 vehicles a month, including steel, armored steel, 
engines, transmission, glass, tires and wheels.
    Force Protection has enjoyed a highly professional 
relationship with all of our customer program offices 
throughout three-plus years of providing these vehicles. Each 
and every one of the program offices has undertaken ways to 
facilitate our ability to deliver more efficiently. I would 
like to publicly express my appreciation to Brigadier General 
Brogan, Major General Catto,along with Mr. Barry Dillon at 
Marine Corps Systems Command; Mr. Paul Mann, the current MRAP 
Program Director and his predecessor, Marine Colonel Michael 
Micucci, along with their staffs; brigadier General John 
Bartley and his staff at the Army Tank Command and the Defense 
Contract Management Agency that works so well with us to get 
these vehicles out the door in the quality they need to be in.
    The kind of growth that we have been able to maintain is 
replete with challenges which stem from establishing the 
requisite capacity, acquiring the necessary facilities, and 
deploying the needed processes and procedures to manufacture in 
a reliable repeatable fashion. Despite these challenges each 
and every one every of our customer agencies has demonstrated a 
willingness to focus on the end result: Delivery of these 
lifesaving vehicles.
    Today we have an established open line of communication 
with our Marine Corps, Army, and DOD customers and work closely 
with them in forecasting future demands to the maximum extent 
that it is known.
    Now, Mr. Chairman, I have been asked what can the 
government do to help? The government can provide greater 
visibility into the long-term plans for this program. That is 
crucial for us to know what is coming down the pike. I think it 
would be the same for all of us.
    By the second half of this fiscal year the government can 
facilitate the introduction of friendly foreign customers as a 
means to further stabilize the program and allow industry to 
achieve maximum utility for the capacity we are creating. 
Likewise, the government can take advantage of long lead time 
material orders as a means of enabling us to secure critical 
supply deliveries in advance of production orders.
    It has been and remains our distinct pleasure and privilege 
to be able to play a small but critical role in helping to 
ensure our servicemen and servicewomen execute their missions 
and come home to their loved ones. We are rightly proud of the 
efforts of our people and of their dedication to such an 
inspiring cause.
    Both Cougar and Buffalo vehicles perform extremely well in 
our active theaters of operation. But as I said, Force 
Protection's most important measure, the one that we take home 
at the end of every day is simple: It is the number of lives 
that our vehicles save. That is the mission that we live with.
    Thank you for the opportunity to provide this update. On 
behalf of all of the employees of Force Protection and all of 
our partners, we look forward to continuing being a part of 
this strategically important program. Thank you, Mr. Chairman.
    [The prepared statement of Mr. McGilton can be found in the 
Appendix on page 87.]
    Mr. Taylor. Thank you, Mr. McGilton. The Chair now 
recognizes Mr. David Heebner, President of General Dynamic Land 
Systems.

STATEMENT OF DAVID K. HEEBNER, PRESIDENT, GENERAL DYNAMICS LAND 
                            SYSTEMS

    Mr. Heebner. Thank you, Chairman Taylor, Chairman 
Abercrombie, Ranking Members Bartlett and Saxton, for inviting 
us to testify today. My name is David Heebner and I am 
President of General Dynamics Land Systems.
    It is an honor for me to represent General Dynamics Land 
Systems employees and our component suppliers who are building 
MRAP vehicles for American forces. My objective here today is 
to report to you that GDLS and our partners are focused on 
meeting or exceeding the extremely aggressive plan to deliver 
MRAP vehicles to our fighting forces.
    We have added manufacturing facilities, hired and trained 
employees and qualified suppliers, and are helping suppliers 
increase their capacity. We have encountered issues common to 
start-up programs, but we have dealt with them and have 
continued to ramp up production.
    I know you are aware that I have submitted a written 
statement for the record, so in the interest of brevity please 
let me simply address your specific questions in the next few 
minutes.
    I am going to answer the last question in your letter 
first. Specifically, are we willing to communicate and interact 
with our other MRAP suppliers to share best practices for MRAP 
vehicles? The answer, Mr. Chairman, is absolutely. There are 
minor contract terms that would need to be worked out, but we 
are ready to collaborate if doing so improves the survivability 
or production rates of these vehicles.
    We are already cooperating in specific ways. For example, 
at the Red River Arsenal our service employees and those of 
other manufacturers are being cross trained in performing 
maintenance on all MRAP vehicles that are being deployed. So 
are the military mechanics. That means that no matter which 
vehicle they might need to support the maintenance personnel 
will have the training to keep MRAP vehicles in service.
    In response to your question about relationship with the 
program office, communication and cooperation with the MRAP 
program office has been highly intense, professional and 
effective. While we would have preferred earlier larger 
contract awards, the program office provided early insights of 
potential awards to enable our planning and rapidly issued 
contracts as soon as funds became available.
    Our product performance feedback from field testing and 
insights on emerging threats has been shared. GDLS compliments 
the program office for its responsiveness to changing 
conditions and for their energetic and timely resolution of 
issues requiring immediate attention.
    You also asked about our industrial capacity, material 
chokepoints at the subtier supplier level and the expansion of 
GDLS Canada's industrial capacity. GDLS Land Systems is 
producing two different types of vehicles for the MRAP program: 
The improved RG-31 vehicle is under contract to General 
Dynamics Land Systems Canada. We have established a U.S. 
production site at Demmer Corporation in Michigan which will 
allow us to deliver 600 RG-31 MRAP vehicles by March 2008. This 
is an example of cooperation between two major defense 
companies, General Dynamics and BAE, to provide urgently needed 
capability to our forces.
    The Cougar MRAP Category 1 and 2 vehicles are built in 
partnership with Force Protection Industries of South Carolina. 
With FPI's full support and less than 120 days following 
contract award, GDLS capitalized, installed tooling, 
established process documentation, hired and trained hundreds 
of employees, and delivered its first complete MRAP vehicle 
from a new production site in Alabama.
    In addition, we established production at Spartan Motors in 
Michigan which, together with our Alabama site, will produce 
105 vehicles this month and their combined monthly rate will be 
226 by April of 2008.
    The Force Dynamics joint venture has combined the strengths 
and full capabilities of both companies to better manage, 
produce and successfully deliver MRAP Cougar vehicles. We are 
currently 55 Cougar MRAP vehicles ahead of schedule and will 
continue to accelerate production. Together the joint venture 
will deliver more than 2,700 vehicles by April of next year.
    Addressing your question about material chokepoints at the 
subtier supplier level, axles and high hard steel supplies have 
been challenges for us at times, and we are developing 
alternative supply lines to overcome the issues.
    For vehicle axles we are work with Arvin Meritor, American 
Axle & Manufacturing, Axle Tech, Dana Corporation and Magna to 
augment our current suppliers.
    Similarly, we are bringing on second source for high hard 
steel, Algoma, to complement the existing supplier, Mittal. We 
constantly take the pulse of our supply chain monitoring to 
ensure orders are placed inside our material lead times.
    In summary, permit me to assure you that we share your 
commitment to protecting our warfighters through the MRAP 
program. We are doing everything possible to meet or exceed 
planned deliveries and we are willing to share best practices 
among MRAP suppliers. Maintaining high quality production 
momentum is our most critical objective, which means that 
funding for new orders must be in place and contracts awarded 
by early December to avoid disruption at the Alabama, Michigan, 
Ohio, and South Carolina production plants.
    Thank you for this opportunity, and I look forward to your 
questions.
    [The prepared statement of Mr. Heebner can be found in the 
Appendix on page 99.]
    Mr. Taylor. The Chair thanks the gentleman. The Chair now 
recognizes--you are going to have to help me out, sir. Mr. 
Archie----
    Mr. Massicotte. Massicotte. You got it right.
    Mr. Taylor. President, International Military and 
Government.

   STATEMENT OF ARCHIE MASSICOTTE, PRESIDENT, INTERNATIONAL 
                  MILITARY AND GOVERNMENT, LLC

    Mr. Massicotte. Mr. Chairman, distinguished members, it is 
an honor to be here in front of the committee, and thank you 
for all you are doing in support of this program and the 
oversight.
    I am Archie Massicotte. I have 30 years experience with the 
company within Navistar both from the engine side as well as 
the truck manufacturing side. I have since taken over as 
President of the Defense Group here, and it is quite an honor.
    People may recognize us as International Harvester back in 
our day, and for over 100 years we have been manufacturing 
vehicles. In fact, in 2006 we manufactured 160,000 commercial 
vehicles and 560,000 diesel engines that have been in all our 
products, as well as supported other customers, and you see our 
product all over the streets today.
    When you look at our global presence, we have dealers in 
over a thousand different states as well as in North America 
and outside of the globe. And when you look at the dealers that 
we have in other countries, we are in over 75 different 
countries, including Iraq and Afghanistan. When you look at the 
spare parts support and the things that we bring, we bring a 
global presence from a commercial base.
    We are not new to the defense business. We have been in the 
defense business since World War I. In you look at the trucks 
that were in World War I and World War II and some of the other 
conflicts, we have been there. But the MRAP experience that we 
have experienced, on May 31 is when we first received our first 
contract. Since that date, May 31, 165 days later, we have 
delivered 407 vehicles and 95 of those vehicles today are in 
theater and there is more in the pipeline, obviously you heard 
with SPAWAR as well as our manufacturing facility.
    We are on the path to achieve 500 per month by the end of 
February, and that is what we are under contract to deliver. We 
have parts on the ground today within the military. We have 
delivered 58,000 part numbers to Red River Army Depot to be 
deployed.
    In response to your questions regarding some of the 
adequate funding and of the other concerns we have, I think as 
my other colleagues here, we are concerned beyond April as to 
whether or not there is going to be adequate funding to keep 
these lines hot and making sure that we don't have a disruption 
or a hiccup in the system that would cause us to idle the 
facility.
    When you look at the industrial base and where we are at 
today, our issue is not building chassises, it is not getting 
product, and it is not manufacturing at West Point. Our issue 
today is bringing the supply base with us to achieve that 500 a 
month goal. And when I talk about the supply base I am 
primarily talking about armored steel and manufacturing that 
armored steel into our product.
    When you look at the cooperation that we see from the 
program office, I, like my colleagues, General Brogan, Mr. 
Dillon, and Mr. Mann, it has been outstanding. It has been an 
open door policy. We pick up the phone if we have an issue, the 
phone rings, they answer it and we get a resolution fairly 
quickly.
    The SPAWAR integration process that we are working with 
that you spoke about today, we have had a collaborative 
relationship with them and we are on the ground with them today 
doing integration from our facility today and we have been 
since September. So we have been incorporating some of that 
SPAWAR integration into the product and so it does speed 
through SPAWAR.
    Leaning forward, that is one of the things that got us the 
depth that we have today in being able to aggressively go out 
and manufacture vehicles. We as a corporation took that risk 
and we continue to take that risk. When we look at the 
collaboration with the Red River Army Depot and doing all the 
collaborative training, that has been a very wholesome 
environment and I think working with TRACOM and some of the 
folks there to get that message across and get field training 
done across all of our products, and being able to train at Red 
River Army Depot folks as well as putting FSRs in theater has 
all been working very well.
    Mr. Chairman, we took this contract on back in May. We told 
our people, this isn't a contract, this is a privilege. And we 
today at International look at that as truly a privilege. We 
welcome the opportunity to continue. We look for the continued 
support with the armed services that we are working with today.
    And I close with, Mr. Chairman, you asked me to provide a 
video, I don't know where that fits in this committee but we 
are able to provide that if you choose.
    [The prepared statement of Mr. Massicotte can be found in 
the Appendix on page 106.]
    Mr. Taylor. With unanimous consent, since most of the 
members of the subcommittee have not had an opportunity to see 
one of these facilities I would like to give the gentleman the 
opportunity to show it to give us some idea and give the 
American public some idea of what is involved in building an 
MRAP if there are no objections. Without objection.
    Mr. Massicotte. Thank you.
    [Pause.]
    Mr. Taylor. In the interest of time, if it starts we will 
go ahead and we will stop. Again I want to thank all of our 
witnesses for being with us. I hope they can get this going.
    Mr. McGilton, while they are working on this and we 
certainly want this to be shown, you mentioned some challenges 
with long lead items and I would ask that you could clarify 
that at this time. The point of this hearing is to express our 
frustration, but it is an American frustration. And anything 
that this Congress can do to help you in your efforts, we would 
like to know now. If you could while we are waiting for the 
video, walk us through what those frustrations are and let us 
know what we can do to help with that.
    Mr. McGilton. Well, sir, I am not sure who would be the 
responsible people, so I will tell you what the challenges are 
and you can determine if you are the right people. The four of 
us that you see sitting on the panel today we had lunch before 
we came to this and we had a telephone conversation prior to 
that lunch. And the two things that we all agreed: First of 
all, the cooperation on this has been tremendous. The barriers 
that we have are the visibility. I believe that many of the 
members have asked questions about visibility, how this program 
needs to be a program of record. There needs to be visibility.
    I think that this particular committee appears to have a 
great understanding of what is necessary in manufacturing. So 
the thing that we need most is visibility. We need to know what 
is going to happen with the program. We can't operate month to 
month. That is extremely difficult for us to make these 
investments. I believe each and every one of us at this table 
have leaned forward. We have purchased steel and components and 
very expensive items in the belief that there was going to be a 
need for these vehicles.
    So the single most important thing for us is visibility 
going forward. If we can resolve that issue, we are all 
professional manufacturing people. That is the part that we 
need. Everything else is up to us. Everything else is up to us. 
We have resolved those issues up to this point by writing 
checks out of our own small checkbooks at some times. Our 
particular company does not have the luxury of some of these 
companies. We have been around for three years. So when we 
write a check for tens of millions of dollars, it is a big 
deal.
    So I would say, visibility. There is nothing else that 
would be more valuable to us than that.
    Mr. Taylor. As I am sure you know,--just a second, I am 
sure the gentleman knows that just today by a very large vote 
the House approved the defense appropriations bill for next 
year, approximately $435 billion.
    Mr. McGilton. Yes, sir.
    Mr. Taylor. Do the provisions of that bill give you the 
certainty that you seek to keep your program going for the next 
fiscal year? And if not, what else do you need?
    Mr. McGilton. Sir, I would have to see the provisions of 
the bill. I am not familiar with it. Once I see the provisions 
of the bill I could give you a better answer.
    Mr. Taylor. For the record we would welcome your comments 
toward that, because I would guess that there will be a 
supplemental at some point. If we need to address it we need to 
know specifically what you need.
    Mr. McGilton. Yes, sir. We will get back to you with that 
information. As soon as I see the details and we can understand 
how the business is going to be awarded, I can give you an 
accurate answer.
    Mr. Taylor. I think we are ready. Could we have some 
confirmation from down below? Are you ahead to show this?
    [Pause.]
    Mr. Taylor. Again, I apologize that this is taking longer 
than anyone would have liked. So let me ask the next question.
    About a month ago I was able to visit Aberdeen. I thought 
that the folks there gave an excellent briefing. One of the 
documents that they provided to me that unfortunately is 
classified, but that each of you are probably familiar with, is 
it listed the potential vendors across the top. And about eight 
different requirements for each of the vehicles that they 
sought. It gave a pass or failing grade and it even rated it 
within the passing and failing whether it was marginal or did 
the job well. And it was things like getting rid of the fuel 
tank in the event of an explosion, are the seats designed the 
best way to minimize the casualties to men and women on board.
    What I found interesting was that one company only did one 
thing well, but they got like an A-plus on that one criteria. 
Several of your companies did several things well. And I asked 
the people at Aberdeen then who were government employees 
working with your products to what extent were they sharing the 
information to all of the vendors and saying okay, you are 
doing five things really well. This company over here is doing 
that better and we want you to do that because at the end of 
the day it is all about the troops. It is not about your 
companies. It is not about this Congress. And it was about the 
troops, and I was assured at that time that they were going to 
be sharing that information, that they were going to get 
together with each of your companies and get with your legal 
staffs.
    The Nation is paying for this information and the Nation is 
paying for these vehicles. To what extent has that happened? To 
what extent are they maximizing things that each of your 
companies does well, but also enable to you do something better 
if they say see another company managing a little bit better 
than you? Or is that happening at all? Because I was told it 
was going to happen.
    You want to start, Ms. Hudson?
    Ms. Hudson. We have not received any test result or 
information about our colleagues' test results. To the best of 
my knowledge, we have not seen any of that comparative data. 
Let me confirm that with my colleagues.
    They confirmed that we have not received.
    Mr. Taylor. Ms. Hudson, as the President of one of the 
competitors, would you object or would you approve of sharing 
that information? Since at the end of the day it is about 
saving lives and limbs in Iraq and Afghanistan.
    Ms. Hudson. We are willing to support anything, sir, that 
supports improving the survivability of MRAP and saving lives.
    Mr. Taylor. Speaking on behalf of your organization?
    Ms. Hudson. Absolutely.
    Mr. Taylor. Mr. McGilton.
    Mr. McGilton. Yes, sir, we are certainly willing to share 
it.
    Mr. Heebner. Yes, sir, we are.
    Mr. Massicotte. Absolutely.
    Mr. Taylor. What I would ask is for the other vendors who 
may not be with us today, I am going to ask the staff to get 
with them. If you could submit something to this committee and 
to the DOD in writing to that effect, again I think it is in 
the best interest of everyone.
    The gentleman of Hawaii has some questions, and I yield to 
him.
    Mr. Abercrombie. Mr. McGilton, I want to make sure I 
understand. You said you have two points, and I think we got to 
one.
    [Phone rings.]
    Mr. Abercrombie. I have got domestic tranquillity to 
handle. ``I'll call you right back.''
    Mr. McGilton. Sometimes when the message comes in from the 
mother ship you have to take it.
    Mr. Abercrombie. Can I get a witness on domestic 
tranquillity? Didn't someone running for President do that? 
Have to answer the cell phone? I commute 5,000 miles one way, 
so you better believe that I am going to preserve domestic 
tranquillity.
    You said visibility. By that did you mean that you would 
like some clarification on whether this is going to be a 
program of record?
    Mr. McGilton. Certainly, if it became a program of record 
that would be a vehicle through which we would all have 
clarity. Without assuming that it is a contract or a commitment 
to us, the more visibility we have to the total program, the 
better off we all are. Certainly, anything that is specific to 
our company or any of my colleagues' companies, that is a 
further help.
    The next thing is that the program actually have some 
duration to it. Managing a program from month to month is 
extremely difficult. I personally am delighted regardless of 
how the mix of contracts are awarded, I am personally delighted 
that we have down selected to three, with a fixed universe of 
vehicles that you are going to buy. To spread them out over a 
large number of people can do nothing but introduce variation 
and reduce the size of the opportunity that we get to invest 
in.
    So those two things. It was have visibility to the program 
in large, but make the orders--don't manage the program on a 
monthly basis with a series of small orders. I think you do 
that in the beginning so that you get an understanding of who 
can perform and who can't. But once you get that understanding, 
it is to everyone's benefit to then issue long-term, larger 
orders so we can gear up. We have built these machines. Let us 
turn them on. Let us turn them on. So it was a two-part; 
basically the same thing.
    Mr. Abercrombie. Thank you.
    Mr. McGilton, you have an extraordinarily interesting 
background, I think, in terms of you are someone who can say 
literally that you started out and where you are today is the 
result of a very extensive line of experience going back to 
being in the Marine Corps in the 1960's. Is that a fair 
statement?
    Mr. McGilton. Yes, sir. Yes, sir.
    Mr. Abercrombie. Now obviously being an infantryman in the 
1960's is not necessarily the same thing today. But some of the 
principles still apply; right?
    Mr. McGilton. Yes, sir.
    Mr. Abercrombie. Can you give me your perspective from 
where you sit today based on, from my point of you, your 
extraordinary experience as a tool maker subsequent to your 
service in the Marine Corps and on through all the various 
manifestations. You have been through almost every 
manufacturing existence there is. Is that a fair statement? I 
don't think I have seen anyone come before the committee that 
has more extensive experience than you with regard to literally 
every aspect of manufacture leading to this MRAP manufacture 
today. In fact, it almost seems that what you are doing today 
is almost the culmination of a lifetime of experience. Is that 
a fair characterization?
    Mr. McGilton. Well, sir, when my family characterizes it 
they call me unstable. But to answer your question seriously, 
yes, sir, everything I have done to date prepared me for what I 
had to do, which is take a company that virtually did not exist 
three years ago. We had to build a company while building the 
product and it wasn't one thing that had to be done. Everything 
had to be done. Any system that we needed had to be created 
before we could use it. And we had to introduce a product that 
did not exist before and ramp up the production capability to 
support this enormous demand that is created.
    Mr. Abercrombie. What is your evaluation of the MRAP 
vehicle? We all think we know what we are talking about but it 
is a mine resistant vehicle, right? And it is assault 
protective vehicle. What does that mean? There are people 
listening to us, taxpayers, interested citizens. What does it 
mean? What are you doing? And what is your evaluation of the 
vehicle that you are building?
    Mr. McGilton. My evaluation of the vehicle that we are 
currently building is we have applied all of the technology. 
The threat that we are seeing today in this war is not a threat 
that is new in the world. We have become aware of it in the 
Western world as a result of the most recent conflict. But all 
of the terrorist countries around the world have been 
experiencing these threats. So the threat is more than 40 years 
old.
    The vehicles that we build today at Force Protection and 
that our colleagues build, our vehicle is under license and 
their version of the same vehicle, it is generally building 
around a ballistic capsule. We build a ballistic capsule to 
protect the people and the equipment that is inside of it. We 
consider everything on the exterior to be expendable and we 
also design it in such a way that it is reusable.
    The total cost for the reuse of a monocot construction, 
which is the kind of construction we use to built our ballistic 
capsule, the vehicle goes into harm's way and experiences a 
threat that takes place in such a short time frame you cannot 
imagine the speed with which these events take place.
    Mr. Abercrombie. And what happens?
    Mr. McGilton. Well, sir, I am going to describe it, I am 
going to try to describe it as best I can without running afoul 
of any of the restrictions that are placed on me relative to 
describing the performance of the vehicle.
    Either from the side or below the vehicle there is an 
explosive force that can vary by tremendous amounts. The speeds 
with which this takes place, there can be energy traveling at 
maybe up to 7,000 meters per second. Everything that is in the 
path of this energy is going to turn into a projectile. It can 
come from the side or the bottom. There is an enormous blast of 
hot gas. The force and the concentration of the force will take 
just about anything in its way and it will do one of two 
things. It will either rip it apart or hurdle it at great 
speeds.
    The acceleration that takes place in one of these vehicles 
during one of these events it is almost unimaginable. That is 
why the people inside have to be buckled in and you have to put 
them in a capsule that regardless where it is thrown, they 
still have to be safe when it lands.
    Mr. Abercrombie. And the human bodies inside are subject to 
explosive trauma; is that right?
    Mr. McGilton. It is more acceleration. If there is a 
penetration it could be explosive trauma by something coming 
through and damaging the tissue. But by and large, if you can 
maintain the integrity of the hull and keep the people strapped 
in, they may suffer from injuries but they are likely to come 
home alive.
    Mr. Abercrombie. So this is about as basic as it can be for 
an infantryman in a vehicle; is that correct?
    Mr. McGilton. Yes, sir. Yes, sir. I would draw this 
analogy.
    Mr. Abercrombie. All right, draw the analogy.
    Mr. McGilton. The analogy between the feelings I had when I 
was in the military and the people that followed me was looking 
at a life of 24 hours a day 365 days a year of terror. Because 
no matter where you were someone was trying to kill you. They 
might be your friend during the day but at night they might be 
your enemy. They would kill you while you were sleeping or they 
would kill you while you were on liberty. And to have that kind 
of fear for such an extended period of time and to wonder is 
the government doing everything that they can do to protect me?
    And I think that awareness of that fear when I walked into 
Force Protection the first time, I wasn't looking for a job, I 
did not need a job, and I did not want a job. But when I walked 
in and saw how much this technology could address the fear that 
I know people feel when they are at war, and that somebody had 
to stay and get the government to buy these vehicles, and then 
build a manufacturing facility to build these vehicles, it was 
a moral imperative for me to not go home.
    I arrived at my company with one pair of trousers, two pair 
of underwear and two shirts. That was three years ago. I 
haven't been home since. I came just to give some advice, and 
when I saw how effective this technology was and I understood 
how much alleviation of fear we could give to anyone that 
climbed into one of our vehicles, I couldn't go home. And I 
still can't go home and I won't be able to go home until the 
last person comes back from there or until there is enough 
trucks over there that I feel that the people that need to go 
on patrol without fear will have the ability to go on patrol 
without fear.
    Mr. Abercrombie. Thank you. Sometimes when you submit your 
background, you might think who is going to read this? But I 
did.
    Mr. McGilton. Thank you, sir.
    Mr. Abercrombie. And I appreciate it. I think people who 
may not know exactly what we are doing here now have a good 
idea what this is all about and why this is important.
    Mr. McGilton. Sir, I would add this one thing. What I do is 
far less important than what the people at the company that 
have their names over their pocket do. If I did not show up, it 
probably wouldn't make that much difference. But if they did 
not show up things would not happen. And so I come here as 
their representative. And I don't deserve any of the credit of 
what is going on, but I represent the people who do deserve the 
credit.
    Mr. Abercrombie. I think you have done that very well here 
today.
    Mr. Taylor. The Chair thanks Mr. Abercrombie. Apparently 
our technical difficulties have been solved and thank you, sir, 
for excellent responses to his questions and for excellent 
questions. Technical problems have been solved.
    Mr. Massicotte, if you could narrate what is going on, 
please.
    [Video shown.]
    Mr. Massicotte. Sir, this is our Melrose Park engine plant. 
This is where we produce the engines that are going into the 
MRAP today. But this is also going back to our commercial base 
as well. And this is just the manufacturing facility that 
produces MRAP engines about three days before the chassis is 
manufactured in Garland, Texas, and you will see that when it 
comes up in the next slide.
    It is very lean manufacturing. Just-in-time. All engines 
are tested prior to being shipped and when they arrive at the 
factory they arrive in the Garland assembly plant in Garland, 
Texas. This is where the assembly line is that builds the 
chassis. This chassis plant alone produces 60,000 vehicles a 
year. And this is where the first truck could be a garbage 
truck, a cement mixer and the third truck in the line could be 
an MRAP.
    And this plant has plenty of capacity. We are running it 4 
days a week, 10-hour shifts, so we have plenty of capacity 
either to go to a second shift or a Friday or Saturday in 
overtime.
    This is where the vehicle gets the integration done with 
the armor. And this is the West Point, Mississippi, facility. 
This was coengineered with Mississippi State University that 
helped us do the process integration in that factory. And this 
is literally an assembly line. This plant is facilitized for 
500 a month and we are right now running at the current rate 
next month of about, I think it is 250 vehicles is what we are 
obligated to by contract.
    We have got roughly 500 employees in that facility today. 
When we get to the 500 a month coming in February, we will be 
roughly about 900 employees strong. Many of the employees on 
that line today have either relations or brothers or sisters 
serving in Iraq. And these people are very proud people to be 
able to provide this type of service.
    This is the other line that we have just established when 
we are doing the SPAWAR integration where we are taking the 
work that we spoke to earlier and putting the SPAWAR 
integration into the vehicle before it leaves our facility. 
Every truck is road tested and BCMA goes through that. That is 
our first delivery in theater. And I guess that is the real 
test right there when the soldiers get in it and, as Mr. 
McGilton said, bring them home safely, and we are not done 
until we get everyone home.
    Mr. Taylor. Thank you very much. The Chair now yields to 
the gentleman from Maryland, Mr. Bartlett.
    Mr. Bartlett. Thank you very much. Mr. Chairman, I don't 
know how much more quickly we could have manufactured these 
vehicles if there was no limitation on the availability of 
subcontractors with the materials they need or if you had no 
limitation on the materials that you need. As we are sitting 
here discussing this, I thought back through my 81 years of 
life and I am probably the only person in the room here that 
lived through World War II. And I will tell you, Mr. Chairman, 
our country is not at war. The military is at war, our military 
families are at war. But our country is not at war.
    Had this been World War II, we would have stopped turning 
out these silly SUVs and pickup trucks for personal 
transportation and those assembly lines would have been 
producing these MRAP vehicles.
    I think that might have been good for the American people 
because they are not at war. Our military is at war. Our 
military families are at war, but the average person in this 
country, you know all they know about the war is what they see 
on television and their life has not been impacted one bit. And 
I think it would have been nice, Mr. Chairman, if we had had 
high enough priority that maybe we could have impacted the 
lives of the citizens of our country. I think they might have 
appreciated the sacrifice that is made by our service people 
and our service families.
    I want to thank you all very much for the contribution that 
you are making. You are kind of forced to do this at the 
fringes. Thank you very much for your contribution, and I hope 
that if we have another war, Mr. Chairman, that our country 
will be at war.
    We haven't been at war since World War II. We have fought a 
number of wars since then but the country has not fought those 
wars. Thank you very much for your service to our country.
    Mr. Taylor. Thank you, Mr. Bartlett, for some excellent 
remarks. The gentleman from Hawaii.
    Mr. Abercrombie. Mr. Heebner and Mr. Massicotte and Ms. 
Hudson, in terms of size, if you will, in terms of reach, 
corporate reach, the three of you as opposed to our friend who 
spoke previously are in much different corporate positions. And 
I just want to make sure, especially in the context that Mr. 
Bartlett has just enunciated for us, if I understood 
particularly Mr. Massicotte's remarks. Do we have the 
assurance, regardless of whether we move forward on a policy 
side about program of record and legislative activity that 
assures funding and reach, what about the question of the 
logistics of supply? I believe steel was mentioned and of 
course we have a particular kind without going into the 
classified side of things, the steel not--all steel is not 
created equal. And what is required of the components in the 
Mine Resistant Assault Protected vehicles is different than the 
SUVs that we are talking about, et cetera.
    Are we assured or are you assured, particularly so with 
International's reach, are we assured that your cooperative 
agreements with one another are such that the supply side of 
things will be there, that the materiel side of things will be 
there and if we are able to achieve the kind of visibility and 
continuity, if you will, in terms of policy that you will be 
able to complete the task of providing these vehicles?
    Mr. Massicotte. Congressman, if I may, we have today 
secured adequate supply throughout our contract that we have 
today. When we get into the expanded capability of the next 
threat level where it is going to require more steel, there is 
a concern that we are tapping the industry and we believe that 
there is going to have to be a global review of where else can 
we get high hard steel. I think when you look at the capacity 
constraints, I am sure all of us here are using a lot of the 
same supply chain. That supply chain only has got so much 
capacity. And I think one of the concerns I have, and I am sure 
my colleagues do as well, is that when you get into the next 
threat level and it requires more steel, more capacity----
    Mr. Abercrombie. What do you mean when you say the next 
threat level? What universe are you looking at?
    Mr. Massicotte. I am going to talk about that without 
getting into the threat itself, but more of MRAP 2, it is going 
to require much harder, broader base on the armor side. That is 
going to bring----
    Mr. Abercrombie. In other words, this will have logistical 
implications in terms of supply, possibly in terms of pricing?
    Mr. Massicotte. I think we are going to exceed capacity--
that is where I am coming from--of the steel supply.
    Mr. Abercrombie. Mr. Heebner, do you have an observation 
that you can share in that context?
    Mr. Heebner. I would like to make an observation that 
relates back to the comment that you made in the earlier panel 
about whether or not program of record was an important element 
of this program. As we look at the program of record issue, 
what it really means is that you have the opportunity to gain 
insight into the program's future. That allows you to 
communicate with your supplier base, inform them of your needs, 
and to ensure that the capacity is there when you need it.
    The first point I would make is that is--my compliments to 
Paul Mann and his team, because to the degree they have 
information they did share it with us early in the process that 
allowed us to communicate with our supply base. That is what 
allowed us to go from an empty factory to production in less 
than 120 days.
    The second issue that once you have that supply base 
conditioned for your program, having the timely receipt of 
funding is imperative to be able to keep that supply base going 
so that we have continuity of effort on their parts.
    That is why in my comments I made the comment that the 
earlier and the larger the contract elements can be, the more 
we can condition that supply base to make the investments 
necessary to move forward more quickly.
    Mr. Abercrombie. You too in your biography you bring some 
unique characteristics to the table. You have more than three 
decades of experience in the Army, much of which prepared you 
or caused you during your professional life in the service to 
direct your attention to items like this; right? So when you 
speak about the program of record you are not just speaking 
from the point of view of what is convenient for you now in 
your present capacity, but from your experience, I take it, 
from your, as you say, your more than three decades of 
professional focus.
    Mr. Heebner. Thank you, Mr. Chairman, for mentioning that. 
I did spend more than 32 years on active duty with the United 
States Army. And in that period, I fell in love with soldiers. 
And my concern for soldiers continues today in what I do.
    But the point that I would make with you that is most 
relevant to the discussion of this committee today is that the 
employees of General Dynamics today who I oversee, and those I 
am sure in other panel members' employ, share the same concern 
for the soldiers that are out there in harm's way in the global 
war on terror. So having worn the uniform does give me a 
special credential, and I am proud of that, but working with 
the employees who care as much about what they do in providing 
a service to our deployed forces is equally rewarding.
    Mr. Abercrombie. So the program of record is not just a 
phrase of art that we are tossing around here today; it has 
real consequences on both sides of the equation then, both in 
the private sector and in terms of the direction for the 
military service for which the term is being employed?
    Mr. Heebner. That is correct, Mr. Chairman, and just making 
sure that we see as far as possible into the future of the 
program needs allows us to harness the full capabilities of our 
companies and our employees to be there when we are needed.
    Mr. Abercrombie. Ms. Hudson, in your testimony you paid 
particular attention to the discussion we are having now; is 
that a fair summary?
    Ms. Hudson. Yes, Mr. Chairman, it is. And with regard to 
your questions about the supply chain, at the moment we have 
been able to ramp up our supply chain where we are able to meet 
our commitments and our supply chain is committed to the 
production schedules that we need to execute the contracts that 
we have today.
    But I echo Mr. Heebner's comments about the need to have 
some visibility. Chairman Taylor talked about production 
planning and execution. Where you are going to have the most 
effective production, where we can have the opportunity to 
maximize our production rate, we need insight into what is 
going to come so that we can place orders for material in a 
timely way, so that we don't ramp up to max production and then 
have to stop for a month and then pick it back up again to meet 
the coming orders and needs.
    So to the extent any of you and our program management 
staff on the government side can assist us with information 
that will allow us to plan more effectively to keep these 
production lines that we have worked so hard to get in place 
and ramped up to maximum speed, to keep them going for as long 
as the MRAP need requires, that would be very, very helpful in 
executing the balance of the requirements for this program.
    Mr. Abercrombie. Thank you, Mr. Chairman.
    Mr. Taylor. The Chair yields to the gentleman from 
Maryland, Mr. Bartlett.
    Mr. Bartlett. Mr. Chairman, I would just like to note what 
I meant by a country being at war.
    We had daylight savings time in World War II so you could 
grow a Victory garden, and if you did not you weren't a 
patriot. Everyone I knew had a Victory garden. There were no 
automobiles made in 1943, 1944, and 1945. Gasoline was 
rationed. Sugar was rationed. We saved our household grease and 
took it to a central repository. Everybody knew we were at war 
because everybody sacrificed.
    Today, I am afraid that the images of war that we see on 
the television has little more relevance to many of us than the 
images on a video game. I think it is quite unfortunate that 
our military and our military families are bearing such a heavy 
burden and life continues just as it did before for most of the 
citizens of our country.
    I hope the next time we are in a war, Mr. Chairman, that 
our country is at war, and not just our military and our 
military families. Thank you.
    Mr. Taylor. The Chair thanks the gentleman from Maryland.
    Captain Hoover, and again I want to thank him for his 
service to our Nation. But he didn't get to be a captain by 
saying, ``I can't do it,'' or, ``We can't do it.'' He was 
rewarded for getting things done and saying he could get things 
done, and that is why he has achieved the very high rank.
    I have got to admit that, having seen that facility, I 
remain concerned that when each of your organizations is up to 
full capacity, that they will lack the capacity to keep up with 
you, and, therefore, the vehicles won't be delivered on time. I 
hope I am wrong.
    My question to each of your organizations is what could 
your organization do that is now being done at SPAWAR in an 
effort to minimize what has to happen there, speed up 
production, make best use of your facilities? I will open it up 
to any of you or all of you.
    Mr. Massicotte. If I may.
    Mr. Taylor. Yes, sir, Mr. Massicotte.
    Mr. Massicotte. We have worked with Captain Hoover and his 
team up at SPAWAR in a very collaborative effort, and one of 
the things that we were able to do with our engineering groups 
that have been up there is that we have been able to integrate 
back into the manufacturing processes at our West Point 
facility the things that they were doing. And I echo what he 
said earlier: The process is improving, and I am sure that the 
vehicles are getting through that operation much quicker than 
they were.
    With regard to could we do more, we would be happy to look 
at it and see what opportunities there are, whether or not the 
entire integration could be done. We would be happy to look at 
that and come back to Paul Mann and his group and work with him 
and see what could be done. I am sure there is more that could 
be done. Right now we are willing to step up and do what is 
needed. So, right now we are integrating that kind of tech into 
our vehicle today in the process. And whether or not we take on 
the additional load of doing what they are doing up at SPAWAR, 
that is going to have to be done through the program office.
    Mr. Taylor. Mr. McGilton, just one ``for instance'' was for 
some of the variants that they had to go back and use an 
acetylene torch or possibly plasma cutter to make some holes in 
the vehicle. They expressed the problem that, well, we have to 
now wait to put the wiring harness on later so they wouldn't 
burn it during this process. To what extent did they make their 
predicaments your knowledge; and to what extent did they 
include you in that process and give you or any of you vendors 
the opportunity to say, we can do that at the factory?
    Mr. Massicotte. Sir, we are doing that. And I think with 
Captain Hoover's people, that was one of the things that we 
looked at together. If we are sending a vehicle up there, and 
they are taking it apart to install their equipment, we are now 
integrating their equipment or that harness in our vehicle 
before it leaves the factory. So I think that kind of 
integration and the cooperation that we are getting with 
Captain Hoover's team is working quite well.
    Ms. Hudson. Just like Mr. Massicotte's team, we have been 
working with the SPAWAR people as well, moving work that was 
done there back into the factory, and that is an ongoing 
dialogue as we all learn with these initial vehicles what can 
be done better earlier in the process.
    Mr. Taylor. Ms. Hudson, let me ask you a real simple 
question. Is there anyone from your organization who is given 
access to what is done at SPAWAR who can actually walk that 
assembly line and say, we could have done that back at the 
factory?
    Ms. Hudson. We have had a number of people at SPAWAR 
working with the team there, and suggestions have come out of 
that activity back into the factory.
    Mr. Taylor. Would other members of the panel wish to 
comment on that?
    Mr. McGilton. We have the luxury of being just down the 
road from SPAWAR, as you know, and we have a manufacturing 
engineer that is either full-time there or near full-time 
there, and his only job is to identify opportunities like that 
and bring them back. We have processed within the last 30 
days--I think we initiated 9 engineering change requests, 7 of 
which, I believe, have been implemented, 2 of which may be 
implemented by the time we get back. And every time we find 
one, we will put it in. We have someone assigned to do just 
exactly that.
    Mr. Taylor. Mr. Heebner.
    Mr. Heebner. I think the particular motivation that we have 
is to make sure that in the processes that are performed at 
SPAWAR, that there is not any disassembly work done and then 
reassembly required. Trying to minimize that.
    Mr. Taylor. I can assure you, there is disassembly going 
on. There are holes being cut, and then things get welded, 
things have to be reassembled, things have to be repainted, 
which is what leads me to believe many of these things should 
be getting done at your facilities before they get to 
Charleston. So my question is to what extent are you, the 
manufacturer, given an opportunity to make that observation and 
fix that problem before it gets to Charleston?
    Mr. Heebner. My comments on a direct answer to that would 
be exactly parallel with Mr. McGilton's, because we are joint-
ventured to produce the same Cougar vehicle, so we use the same 
processes. And as he suggested, there have been a number of 
engineering changes already in place because of that, which 
simply reflects the fact that there is a process in place to do 
that. And the integration or interaction between the SPAWAR 
people and our own people is not inhibitive in any way that I 
am aware of.
    Mr. Taylor. The Chair recognizes the gentleman from South 
Carolina Mr. Wilson.
    Mr. Wilson. Thank you, Mr. Chairman. And I regret I had to 
run off to another meeting, but wanted to come back. And I 
particularly wanted to come back, Mr. Chairman, because I 
appreciate the private sector, how they have really come to 
play such an effort to protect our troops. And I have actually 
visited the facilities of BAE and am really grateful. I was 
present, Mr. Chairman, at the 25th anniversary of the BAE 
existence. It is adjacent to the district I represent in Aiken. 
Wonderful people, dedicated, working there. And then Force 
Protection, I feel like I was with them when they were born. 
And so I have had the privilege of even going ahead of the 
Chairman to drive one of the Cougars and Buffalos. It is hard 
to get ahead of Chairman Taylor, but I was. But we appreciate 
so much, and General Dynamics and all of what you are doing to 
protect our troops and provide for protection.
    There has been discussion about the monthly production 
contracts and working with SPAWARs and how to avoid the end-of-
the-month congestion. Is there any way to move toward weekly 
production on contracts or even daily? And any of you who could 
answer that would be good.
    Mr. McGilton. I would be glad to answer that.
    Earlier in the meeting we provided the statistics to show 
how much of an improvement there had been to get away from the 
hockey puck production delivery. Last month, by the middle of 
the month. We delivered half of our vehicles, exactly what we 
should have done.
    In Force Protection, we are moving in the direction of 
doing weekly and even daily production schedules. It is fraught 
with a lot of risk when you do that, because on any given day, 
if anything goes wrong, it is going to be a really bad day, and 
there is going to be a lot of visibility relative to what went 
wrong on that day. That is not necessarily a bad thing. All of 
us in manufacturing understand that every day when you go in it 
is a street fight. The number of variables that can work 
against you, any one of them can stop the entire system. So we 
are willing to do it. That is the direction we are working in.
    But just the act of going to a daily production schedule 
won't solve the problems that are created. You have got to 
modify the processes that make it possible to do a daily 
production schedule. But that is exactly what we are doing. 
That is what all of us are trying to do. There is nothing that 
would make us happier than every day when we go in, everything 
happens on autopilot. It just isn't the case when you bring in 
a new technology with as many variables as we have as fast as 
we have to bring them together.
    So any resistance to doing it is not founded in a 
resistance to do it, it is that we may not in every case have 
our entire supply base in a state that they can operate that 
way. And there are varying processes. You don't make steel by 
the day; you make steel by the heat. So somebodyis going to 
deliver you 10,000 pounds of steel, and that has all got to be 
processed. And so it is kind of the Catch-22. Some things come 
to you in big bulks and you have got to manage them, and 
sometimes the bulks don't show up. But there certainly isn't 
any resistance to doing it from our side, but there certainly 
is a lot of difficulty in doing it.
    We are not a mature industry, and that is why it is 
difficult to set up the daily consistent process. If we were 
building Hondas or Camrys, and we had five years to design the 
processes and get the supply chain in place, it would be a 
snap. It is not that we are unaware that that is a better way 
to run a business, it is that the time in order to get the 
stability necessary to let your business operate that way has 
not been afforded to any of us. The war didn't wait for us to 
do it.
    Mr. Wilson. And, Mr. McGilton, you itemized the different 
vehicles that have been provided to American forces, Iraqi 
forces, allied coalition forces, the different types of 
vehicles. And I think, I know it would be reassuring to persons 
who have young people serving overseas; can you tell us how the 
performance of your vehicles have been that have been deployed?
    Mr. McGilton. I have certain restrictions placed on me 
about discussions of the performance of the vehicles. I think 
everybody in this room can understand why.
    Our belief and understanding is that within our vehicles, 
when properly used, properly deployed, and the people properly 
belted in, the survivability rate is amazingly high. I can't 
get any more precision than that. It is amazingly high. We are 
very proud of our record of survivability, and we won't 
compromise in that measurement of interest in any way, shape, 
or form.
    The second thing I will say relative to the performance of 
the vehicle; thus far, we have been able to enjoy a 95 percent 
vehicle readiness rate. That is extremely important, because 
these vehicles are only valuable when they are available. The 
design of our vehicles allows the vehicle to experience a 
blast, to sacrifice the external components. A truck comes and 
picks up the capsule, but we protect the engine, the 
transmission, the transfer case, and the important drive line 
items. We take it back to the motor pool, and then the field 
service reps from our company and those of our associates 
restore that vehicle and put the vehicle back into service. 
Very few of our vehicles have been taken completely out of 
service. So the total cost to operate a ballistic capsule-type 
design is significantly less than any other style of vehicle 
because it is reusable.
    Mr. Wilson. Again, I thank all of you for what you are 
doing to protect the American and coalition forces. Thank you 
very much.
    Mr. Taylor. I thank the gentleman from South Carolina.
    I got the impression that Ms. Hudson wanted to say 
something.
    Ms. Hudson. I was just going to comment on the weekly 
deliveries versus the monthly deliveries. And Mr. McGilton's 
comments were absolutely correct. Early on we were not in a 
steady production flow. It was difficult to get material in, 
and I believe that exacerbated the problem you mentioned. But I 
did want to state that on our Caiman, MRAP system, we started 
performing to a weekly delivery schedule in September, and we 
plan to go to a weekly delivery schedule in February on our 
RG33 variant as well. So it is important to us to have a steady 
flow in the factory, as important as it is to our customers and 
to SPAWAR in terms of receiving the vehicles. So that is the 
direction we are heading in.
    Mr. Taylor. Mr. Heebner.
    Mr. Heebner. Mr. Chairman, if I might add just a slightly 
different aspect in response to that question, and I do this 
both for the committee's benefit and also for the employees who 
work on MRAP vehicles around the country and, frankly, around 
the world, and that is we do not need additional motivation to 
build these vehicles as quickly as we possibly can. Our 
employees are committed to doing this as rapidly as it is 
possible.
    What happens on occasion is that we will nearly complete a 
vehicle, and there will be a component that is deficient 
because the supply system hasn't gotten there quite on the 
schedule that we had anticipated, and that occasionally results 
in the delivery to SPAWAR of a significant number of vehicles 
at one time. Obviously, we try to minimize that. But our 
commitment and the commitment of our employees is to move just 
as quickly as we possibly can. And, believe me, we are 
motivated to do that, and it would not take a different type of 
contract to cause us to do that.
    Mr. Taylor. I very much appreciate that, which leads to one 
of the final questions.
    Former Chairman Hunter, I think, did this committee a very 
good service in looking into the delays in the up-armored 
Humvees. One of the things that he and the staffers that he 
dispatched to look into the problem discovered was that in many 
instances the supplier did not know that what they were making 
was going into something that was going to save the lives of 
young Americans in Iraq and Afghanistan. And, quite frankly, 
the committee was very disappointed to hear that.
    Since that problem has already happened once, we sure don't 
want it to happen again. Are you confident that each of your 
suppliers is aware of what that component is expected to do, 
why it is there, why we need it, and why they should be given a 
priority?
    And I hope you are also aware that our President and the 
Secretary of Defense has the legal authority right now to walk 
into any factory in the United States of America and say, the 
troops need this, and I want you to put it to the top of the 
list. And we want you to know that. I am sure you already do. 
But we want each of our suppliers involved in this program to 
know that. And we want this committee to be notified if that is 
the message we need to relay to the Secretary of Defense or the 
President to make sure that you get the things that you need to 
make the product that is so important to troops.
    So I guess going back to the first question: Do you feel 
like your suppliers know the importance of what they are doing 
and how important the product you are making is for the troops?
    Mr. Heebner. Mr. Chairman, I don't believe I could answer 
that question with certainty for all of our suppliers. What I 
can tell you is that in those areas where we have felt 
challenged for the supply of specific components, the fact that 
these parts are a part of the MRAP program and the importance 
of velocity in developing and completing these vehicles has 
been communicated throughout our supply chain, and that we get 
a very positive and prompt response from any inquiries we have 
about the conditions of the supply base.
    Ms. Hudson. Mr. Chairman, if I may add as well, given that 
this program has a DX rating, the most important rating in the 
country, and we have had the opportunity to work with our 
suppliers on the implementation of the important priority 
through a contractual arrangement and also through informal 
arrangements, part of that is a discussion of why we are doing 
what we do.
    At BAE, we have a saying: We protect those that protect us, 
and that the only thing that matters is doing the best thing 
for the troops in the field. We talk about that every day. Our 
employees embrace it, and our supply chain embraces it as well.
    We do know why we are doing what we do, and it matters. We 
talk every day about what we do is saving lives in theater and 
protecting family members and friends, and it is ingrained in 
each and every one of us.
    And to Mr. Bartlett's comments. The general public may not 
feel like we are at war, but I can assure you that we at BAE 
Systems do. We have people that haven't had a day off since the 
day MRAP started. We work around the clock, 7 days a week, and 
there is absolutely no question that we understand the 
importance.
    Mr. Taylor. Thank you.
    Mr. Massicotte. We supply a lot of our product that we put 
into the vehicles. So as it goes across the various divisions 
within the corporation, we absolutely know the importance of 
this program. When you reach out beyond that to the supply 
base, our dealer counsel and the people that we work with in 
the supply community, we make sure that they understand what 
the parts they are supplying and the DX rating, as you stated, 
is absolutely out there in front of the curve of any production 
material that we use today. We have a solid supply chain behind 
us, and right now, just getting the production base up to speed 
at the levels that we talked about earlier to get to the higher 
levels of production is really all we have to do.
    Mr. Taylor. To what extent--now that the vehicles are being 
deployed and hopefully will be deployed in much larger numbers, 
what is your mechanism for staying in touch with the field so 
that, as things wear out, be it tires, ball joints, whatever, 
as things wear out, that the factory becomes aware of that and 
can replace those things in a timely manner? What do you have 
in place to make sure that that happens?
    Mr. McGilton. Currently Force Protection alone has 
approximately 200 field service reps in theater. We have in 
excess--I believe we have almost $100 million in inventory in 
our warehouse awaiting to be shipped at any time it is 
requested. We cross-trained with all of our partners. General 
Dynamics have an enormous infrastructure of technical people to 
do the restoration on the vehicles. We can't think of another 
thing that we could do to address the issue. It is those 
actions that have allowed us to keep our 95 percent readiness 
rate. And we are not happy with 95 percent, so we are going to 
continue to improve things. But it is the relationship that we 
have with our partners that have this massive reach that allows 
us to accomplish that.
    I would also like to go back and address what Mr. Heebner 
said; your question, and then one thing that Mr. Heebner said. 
The way we made sure that all of our suppliers understand how 
important it is, we had a supplier conference and we brought in 
100 percent of our suppliers. And I didn't want their salesmen. 
I brought in someone that was in a significant position of 
management, and they spent a day with us. And we explained to 
them what we were doing; we showed them videotapes; we 
explained to them about our theory and our philosophy for 
running our business, what part they played in it, and how they 
could make our entire system fail. No matter how big or small 
the part was that they manufactured, the entire system stops if 
they don't perform. We spent a great deal doing that.
    I would like to talk about Mr. Heebner's statement about 
motivation. At one point in the program not too long ago, 
people were concerned that we weren't motivated enough at Force 
Protection. And in an effort to get us to work faster and 
harder, the United States Government saw its way fit to offer a 
$1 million incentive payment if we would improve our 
performance. I am afraid I am going to cause significant chaos, 
at the risk of challenging my relationship with Mr. Dillon. 
When we got the offer, we felt insulted. And what we said was 
that we weren't interested in an incentive; if you needed us to 
do more, just tell us, and we will do everything we can. We are 
already doing everything we can.
    The more that they asked us to do we were able to 
accomplish. And they came back to us again and said, you are 
causing a problem because you won't agree to accept a contract 
that has an incentive built into it. After a lot of 
deliberation, I agreed that I would accept a contract with the 
offer of the $1 million acceleration incentive in it as long as 
I didn't have to invoice for the $1 million after I 
accelerated.
    So we accelerated, we improved the delivery, and we still 
to this day have not submitted the invoice to claim the $1 
million. We were going to do it anyway. The money didn't make 
any difference.
    Ms. Hudson. With regard to getting feedback from the field, 
we have an established infrastructure for the Bradley fighting 
vehicle with field service reps in theater. We are also 
supplying field service reps for the MRAP program in theater as 
well. And even though we have multiple variants of MRAP, we 
have one program manager in charge of all the BAE Systems field 
service reps working on MRAP. So we get daily feedback on what 
is happening in theater so we know if we need to make any 
changes or fixes into our manufacturing processes or our 
design.
    And I might also add that we have had two of our senior 
executives in Iraq in the last month to personally assess the 
situation and make sure there were no barriers that we couldn't 
control and in having an effective infrastructure set up in 
Iraq.
    Mr. Taylor. Again, I do want to thank each of you for what 
you are doing. I very much appreciate your walking this 
committee and the American people through the importance of 
this program, how we are addressing it. I want to extend the 
invitation that anything that this committee can do to help you 
be more productive as you encounter challenges, we want to 
extend that invitation.
    And, last, I want to apologize. I misspoke earlier. I am 
certain that Sean Cooley wasn't the first Mississippi guardsman 
to die in Operation Iraqi Freedom. And any pain I may have 
caused to his family or any other family by misspeaking, I want 
to apologize now.
    So with that, this committee stands adjourned.
    [Whereupon, at 5:30 p.m., the subcommittee was adjourned.]
     
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                            A P P E N D I X

                            November 8, 2007

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              PREPARED STATEMENTS SUBMITTED FOR THE RECORD

                            November 8, 2007

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[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
      
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             QUESTIONS AND ANSWERS SUBMITTED FOR THE RECORD

                            November 8, 2007

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         QUESTIONS SUBMITTED BY MR. TAYLOR AND MR. ABERCROMBIE

    Mr. Taylor and Mr. Abercrombie. There has been a lot of debate 
about the ability of the industrial base to meet MRAP production 
requirements. Concerns include having sufficient ballistic steel, 
tires, axles, transmissions, and engines to name a few. What is the 
most likely production rate that the base can support and how confident 
are you that it can be achieved? How does this match up with the rate 
necessary to meet current requirements?
    Secretary Young. Reaching a production rate above 1,000 vehicles 
per month by the years end is a significant challenge. However, it is 
achievable. By engaging with prime contractors, their key suppliers, 
and with prospective new suppliers, we have helped industry put plans 
in place to grow capacity in order to achieve our aggressive MRAP 
delivery schedule.
    Over the past nine months we have worked closely with the armor 
steel, tire, and other industries to develop aggressive production and 
delivery ramp-up rates to sustain MRAP growth. In particular, ballistic 
grade steel plate for the MRAP baseline vehicle has required close 
scrutiny. Production rates above 1,000 vehicles per month and 
simultaneous fielding of add-on armor kits for MRAP and other ground 
vehicles in our fleet will likely result in some temporary, but 
manageable, steel plate shortages the first quarter of 2008. However, 
in the broader sense, industrial capacity is sufficient to meet current 
requirements.
    As necessary, we will use the Department's Priority Allocation of 
Industrial Resources Task Force to evaluate and manage shortages of 
steel and any other MRAP commodities. With the assistance of the 
Department of Commerce, we will use the Defense Priorities and 
Allocations System to execute the decisions of the Task Force by 
managing the distribution of steel and other critical components and 
materials to ensure our highest priority needs continue to be met.
    Mr. Taylor and Mr. Abercrombie. To what extent did DOD's assessment 
of the industrial base include vendors for the various items of mission 
equipment? What are the potential challenges in producing this 
equipment?
    Secretary Young. The MRAP Joint Program Office monitors mission 
equipment requirements and vendor delivery status with the help of the 
mission equipment buying activities and the Space and Naval Warfare 
Systems Center at Charleston. The MRAP industrial capability assessment 
performed by the Defense Contract Management Agency did not include 
mission equipment except for the ballistic steel used in the 
fabrication of gun shields. There are no known challenges at this time 
with receiving timely delivery of mission equipment except for 
ballistic steel which has been mitigated through other proactive 
measures.
    Mr. Taylor and Mr. Abercrombie. An adequate supply of ballistic 
grade steel appears to be a major concern. Is there sufficient global 
capacity to meet the needs of the baseline MRAP vehicle in the context 
of DOD's other demands for the same kind of steel? What about meeting 
the demand if a more robust design dictates the need for more steel?
    Secretary Young. There is enough global production capacity of 
ballistic steel to meet MRAP program needs. This is because when a 
delivery conflict for ballistic steel occurs, an MRAP order 
automatically gets filled first. The joint MRAP and similar Army Route 
Clearance vehicles are the only ground vehicle programs currently 
authorized to use the Defense Priorities Allocations System (DPAS) 
``DX'' priority rating on their contracts and purchase orders. This 
highest priority designation means that MRAP and MRAP-like orders for 
ballistic steel receive preferential treatment over all other DPAS 
lower rated ``DO'' and unrated orders.
    Over the next few months, ballistic steel mills may not be able to 
accept or meet delivery need dates for some new DO rated and unrated 
ballistic steel orders. This is because the combined demands of MRAP 
production, MRAP armor kit development, and all other DoD requirements 
are expected to temporarily exceed available steel mill capacity. 
However, when an unacceptable delivery delay occurs, a program may 
request DPAS Special Priorities Assistance and adjustments are made to 
delivery schedules to best meet operational needs.
    To minimize delivery disruptions on DO rated orders that compete 
with MRAP for ballistic steel, a DPAS Priorities and Allocations of 
Industrial Resources taskforce has been monitoring and maintaining a 
Department-wide forecast of thin gauge steel armor plate requirements 
and an inventory of available steel mill production capacity. Working 
closely with the Services and the ballistic steel producing mills has 
enabled the task force to gradually expand production capacity and 
balance the timing and placement of orders.
    Mr. Taylor and Mr. Abercrombie. Ramping up to meet requirements 
will include hiring additional workers and some will need specialized 
skills and certifications, such as in welding. How many more workers 
will be needed in the coming months to support production rates and how 
will they be trained to ensure they have the necessary skills?
    Secretary Young. Current production rates show that the 
manufacturers' production ramps are not being affected by lack of 
labor, hiring or training of personnel. Individual manufacturers can 
provide their further assessment if desired.
    Mr. Taylor and Mr. Abercrombie. MRAP vehicles have been undergoing 
developmental testing since early this year and operational testing is 
scheduled to start soon. DOD has on order about 8,000 vehicles and the 
JROC has approved up to 15,000. The Director, Operational Test and 
Evaluation has expressed some concerns about certain aspects of 
testing, including the low number of armor ``coupon'' samples and the 
low number of miles for the automotive tests. How are you addressing 
these concerns? Has the department granted any waivers?
    Secretary Young. In March 2007, the Director, Operational Test and 
Evaluation (DOT&E) recommended that the MRAP Program add additional 
test vehicles to get more automotive miles and survivability testing. 
The Program Office accepted these recommendations and modified the 
testing approach. DOT&E concerns have been addressed. DOT&E approved 
the MRAP Test and Evaluation Master Plan, the MRAP Live Fire Strategy, 
and the MRAP Initial Operational Test and Evaluation (IOT&E) Test Plan 
in September 2007. No Live Fire or Operational Testing waivers have 
been requested or granted.
    The Joint Program Office (JPO) and the DOT&E organization have 
established a Joint testing Integrated Product Team (IPT) to determine 
the path forward for all testing of MRAP vehicles and to develop test 
plans.
    Mr. Taylor and Mr. Abercrombie. What human factors issues have been 
raised by developmental testing, such as limits on the size of the crew 
or passengers or their ability to get in and out of the vehicles 
safely?
    Secretary Young. Some non-mission critical human factors were 
identified during testing and accepted temporarily in order to rapidly 
field MRAP vehicles. We are pursuing Engineering Change Proposals to 
correct deficiencies and improve performance. In the interim, these 
issues have been mitigated by placing appropriate limitations on 
vehicle operations.
    The JPO recently stood up the Human Systems Integration--Integrated 
Product Team (HIS-IPT) which had its first meeting on 13 Dec 07. The 
HIS-IPT will be the focal point for addressing all human factors 
issues--those raised during developmental testing and any issues 
encountered in the field and will work with the manufacturers to 
implement the changes necessary to incorporate human factors 
improvements.
    Mr. Taylor and Mr. Abercrombie. What is the status of the material 
safety release for the variants currently on order? What human factors 
issues have been raised for vehicles already in the field?
    Secretary Young. Every fielded MRAP vehicle has completed the 
``Urgent'' safety release process and continues through our safety 
program in order to complete the full safety release process.
    In order for the Department to urgently obtain MRAP vehicles as 
fast as we have, we accepted commercially designed, and commercially 
manufactured vehicles. These vehicles vary and all have some human 
factors issues. Issues that have been identified are: door handles 
facing the wrong way, fire extinguishers placed in odd places or not 
covered adequately, and lack of internal storage spaces or tie down 
points.
    The Joint Program Office (JPO) recently stood up the Human Systems 
Integration-Integrated Product Team (HSI-IPT) which had its first 
meeting on 13 Dec 07. The HSI-IPT will be the focal point for 
addressing all human factors issues and will work with the 
manufacturers to implement the changes necessary to incorporate human 
factors improvements.
    Mr. Taylor and Mr. Abercrombie. Orders for these vehicles were 
placed without being fully informed of the vehicles capabilities and 
limitations. What risks are you assuming if these vehicles are fielded 
without this knowledge?
    Secretary Young. Risks associated with our aggressive fielding 
schedule are mitigated by a phased testing plan and the use of 
temporary, non-mission critical operational limitations. To mitigate 
these risks, safety directives are prepared and promulgated to the 
Joint Forces that prescribe operating limits until correction via 
vehicle modifications are complete.
    Early testing, which informed initial production orders, ensured 
that vehicles were survivable, and that no major limitations relative 
to mission requirements were present. The current phase of testing 
fully characterizes vehicle capabilities and limitations. Issues 
identified by the follow-on operational tests would be addressed 
through retrofit of engineering change proposals (ECPs) on fielded 
vehicles and with cut-in of the ECPs to production lines as they are 
identified.
    Capabilities and Limitations (C&L) reports are being written and 
updated as we continue through the test phases. We do not view the C&L 
Report as a one time event, but consider it a living document populated 
with the latest information to inform Commanders (owners) of the MRAP 
vehicles once fielded.
    Mr. Taylor and Mr. Abercrombie. Even as MRAP production began, DOD 
acknowledged that the threat was changing and is now developing a 
solution for that threat. How will this impact the current test 
schedule and resources?
    Secretary Young. Completion of testing for initial MRAP vehicle 
designs is, and has remained, our priority. The original MRAP designs 
are completing the developmental testing phase of the testing regimen 
and migrating to operational test. These tests require different assets 
and resources.
    Testing for additional survivability solutions to meet the changing 
threat have been, and continue to be, worked into the testing schedule. 
While this has been difficult, and not without challenges, the 
personnel at Aberdeen Test Center have conducted all testing within the 
timelines required to provide decision makers with the data to make 
appropriate decisions.
    While this effort has required long hours, hiring of additional 
personnel, and some prioritization of efforts, the schedule and 
resource impact has been managed to ensure rapid fielding of survivable 
vehicles to theater.
    Mr. Taylor and Mr. Abercrombie. MRAP vehicles come from the 
manufacturers without any mission equipment. That is being integrated 
under contract at the Naval Space and Warfare Center. The equipment is 
being bought under other contracts and then shipped to the center for 
installation. From there, vehicles are shipped to theater by air for 
fielding. However, DOD is considering an option for contractors to 
install the mission equipment at their own facilities. How many 
vehicles can be equipped with the mission equipment that is already on 
hand at the integration facility? How much more equipment is needed to 
outfit the vehicles on order and is that equipment on order? How 
confident are you that the vendors that produce the mission equipment 
can meet the demand?
    Secretary Young. In cooperation with mission equipment system 
managers, the MRAP vehicle Joint Program Office (JPO) developed a 
detailed plan that supports the current integration schedule. Equipment 
on hand plus equipment that has been reserved from on-going production 
lines is sufficient to support mission equipment integration for MRAP 
vehicles per the current delivery schedule. Because of the pace and 
flow of individual pieces of equipment, it is better to discuss the 
availability of critical pieces of equipment to meet integration 
schedules. The JPO attempts to maintain at least a 30-day supply of 
critical equipment. While we watch this closely, we have not seen any 
issues suggesting contractors will be unable to meet the required flow.
    Mr. Taylor and Mr. Abercrombie. How long is it taking to equip 
vehicles with the mission equipment once they arrive at the center? How 
much of that time is ``non-value added'', or time that a vehicle is 
just sitting around waiting for parts or repair or a place in the 
queue? To what extent is once-a-month delivery of vehicles contributing 
to non-value added time and how can this be mitigated?
    Secretary Young. I would like to take a broad view to this 
question. The time it takes to integrate a vehicle at SPAWAR varies 
from variant to variant, but since the hearing, we have data from late 
November to mid December which provides a sense of where we are with 
respect to integration time. Many of the MRAP variants are now taking 
only one to two days to fully equip a vehicle once integration begins. 
SPAWAR integration is pacing manufacturer deliveries.
    The JPO continues to work with the vendors to deliver a smooth 
delivery of vehicles. Additionally, the vehicle processing throughput 
at SPAWAR has expanded to between 40-50 vehicles a day. This production 
rate is sufficient to maximize airlift and provide MRAPs for sealift.
    Mr. Taylor and Mr. Abercrombie. What is the status of your effort 
to prototype installation of mission equipment on each version of the 
vehicle DOD is buying and fielding?
    Secretary Young. Prototyping is complete on all vehicles except for 
General Dynamics Land Systems--Canada's (GDLS-C) RG-31s.
    Mr. Taylor and Mr. Abercrombie. What are the advantages and 
disadvantages of installing mission equipment at other locations, such 
as the prime contractors--facilities?
    Secretary Young.  All mission equipment (also referred to as C4I 
equipment or Government Furnished Equipment--GFE) is currently 
installed at SPAWAR, Charleston, SC.

    Potential Advantages to Integration Performed by Manufacturers:

       DOD receives fully integrated vehicles direct from 
manufacturer

       No one choke point for GFE installation

       May experience some cost savings due to competition 
between GFE installing entities

       May cut down on total enterprise integration over time 
as manufacturers go through learning curve

    Disadvantages:

       Tracking and accounting for GFE in numerous locations is 
complicated and reduces flexibility in creating GFE kits. Manufacturers 
are armored truck builders not GFE installers.

       Manufacturers would need to ramp up capabilities, 
personnel, space, integration process, etc. The program would be 
managing numerous learning curves rather than maximizing process and 
progress made at SPAWAR.

        New secure space for GFE would need to be located, 
established and managed at multiple locations across the country.

       All transportation times, inspections, and other steps 
are still required (time to get vehicles to theater is still the same).

       Having to gather and input transportation management 
data gets more difficult due to multiple sources of the data vice one--
SPAWAR.

       SPAWAR represents a unique, tested capability for C4I 
installation and has ramped up a skilled workforce to meet MRAP program 
needs. Establishing integration sites at multiple additional locations 
would require a similar investment of time, facilities and personnel.

    Mr. Taylor and Mr. Abercrombie. If SPAWAR were to reach capacity or 
if facility had to shut down or was unable to operate for more than a 
few days, where else could integration of the OFE take place and what 
would be the challenges?
    Secretary Young. The Joint Program Office (JPO) and SPAWAR 
established a Continuity of Operations (COOP) site for this exact 
purpose. The COOP facility is set up to serve as a complete SPAWAR 
Charleston replacement of all 25 lines within 72 hours. Several sites 
were examined, and the Orangeburg, SC location was chosen due to its 
large square footage and immediate availability for occupancy.
    Mr. Taylor and Mr. Abercrombie. What can the committee do to help 
all stakeholders meet this urgent need?
    Secretary Young. The strong support and commitment of the Committee 
and the Congress has been the key to our success in producing and 
fielding these life-saving vehicles at a rate that will result in more 
than 1,500 MRAPs in theater by the end of this calendar year. Your 
support of budget requests, reprogramming actions and an unprecedented 
allocation of funds in the Continuing Resolution has allowed us to 
``lean forward'' in a program that is essential to our brave men and 
women in harms way. The Department asks for continued support for this 
program to the same degree that has been demonstrated thus far. On 
behalf of the men and women protected by these vehicles, we thank you.
    Mr. Taylor and Mr. Abercrombie. Are there any plans to offer an 
MRAP configured cargo/logistics variant to Army and Marine Corps forces 
in the immediate future?
    Secretary Young. No, there has been no requirement from the 
operating forces to configure MRAP vehicles into a cargo variant. MRAP 
vehicles could be made capable of carrying cargo instead of personnel 
at the discretion of commanders.
    Mr. Taylor and Mr. Abercrombie. What is the near term acquisition 
strategy for the MRAP II program, e.g. when do you plan to stop 
ordering MRAP I vehicles and begin ordering MRAP II vehicles? Is the 
industrial base primed to support large contract orders for the MRAP II 
vehicle?
    Secretary Young. The acquisition strategy for MRAPs (both MRAP I 
and MRAP II) is continually being shaped by the operational 
requirements from theater. The significance of MRAP II is that this 
vehicle provides options for the commanders in terms of protection and 
mobility. We are progressing with MRAP II testing as the theater is 
undertaking requirement reviews.
    Mr. Taylor and Mr. Abercrombie. How are you capturing the lessons 
teamed from the performance of MRAP vehicles in theater and how are you 
applying those lessons in terms of survivability to the existing fleet 
of tactical wheeled vehicles?
    Secretary Young. The Army and Marine Corps have ``Centers for 
Lessons Learned'' that assess forward area operations and report 
trends, findings and issues to combat developers and program managers. 
The MRAP Joint Project Office also has a ``forward presence'' to 
evaluate MRAP performance in the theater and note any shortcomings.
    In addition, The National Ground Intelligence Center produced an 
extensive predictive threat analysis of likely adversary actions during 
the next 12-48 months. The classified report of the analysis was 
distributed to combatant commanders, senior decision makers and program 
managers within the Department and was used to energize Science and 
Technology; Research, Development and Testing communities; and industry 
to proactively develop and produce counter-measures to mitigate 
emergent threat weapons and tactics. Examples of these proactive 
efforts include incremental development of armor protection and 
electronic warfare capability.
    Mr. Taylor and Mr. Abercrombie. Have you engaged with industry 
about the sharing of technical designs in order to produce the most 
effective and complete MRAP vehicle?
    Secretary Young. There are several methods by which the Government 
may encourage ``best of breed'' data a sharing between MRAP 
contractors. These include encouraging MRAP contractors to enter into 
cross licensing technical data sharing agreements; and structuring 
future MRAP contract competitions to allow Government evaluation of 
MRAP technical data lifecycle costs as part of the contract source 
selection evaluation process.
    To facilitate sharing of best practices among MRAP vehicle 
manufacturers, the Joint Program Office (JPO) recently held a unique 
performance review session consisting of two days of discussions on 
test results and technical data. The first day consisted of one-on-one 
reviews with each manufacturer of test results, successes or 
challenges. This was followed by development of a briefing package for 
the manufacturer to share with the other MRAP vehicle manufacturers. 
During the second day, we briefed these packages to all manufacturers 
and discussed issues and possible solutions. The interchange was open 
and honest, and included feedback from the government engineering and 
test teams. It led to improved insights on vehicle performance and 
design, and identified potential solutions. Issues discussed included 
vehicle floor and seat designs, and potential solutions to improve 
recovery capability. We encouraged the manufacturers to work together 
to share solutions and intend to continue regular performance and 
design exchange meetings.
    Mr. Taylor and Mr. Abercrombie. How are you incentivizing industry 
to accelerate production and facilitate their production and 
manufacturing processes?
    Secretary Young. Companies that demonstrate readiness to produce 
vehicles that meet MRAP requirements receive significant production 
orders. This incentive has been effective for a highly competitive 
industry. After delivery orders are issued, the Navy and DCMA work 
closely with contractors to monitor production progress to ensure that 
promised performance is delivered.
    We've also worked directly with MRAP suppliers to help them 
accelerate production. For example, the Department authorized a DX 
industrial priority rating for the MRAP program to assure priority 
access to available material. Additionally, to increase the 
availability of armor steel plate and thin gauge, quenched and tempered 
steel from about 8,400 tons per month to about 21,000 tons per month, 
the Department made slight specification changes to increase throughput 
and encouraged steel producers to make modest capital investments. In 
the cases where domestic source restrictions limited access to the 
steel we need, the Department used the available waiver processes to 
tap otherwise non-compliant domestic sources as well as reliable non-
domestic sources. We've also worked directly with industry to increase 
tire capacity from about 1,000 tires per month to about 17,000 tires 
per month by adding Goodyear as a second source and supporting the 
addition of more tire molds at both Michelin and Goodyear.
    Mr. Taylor and Mr. Abercrombie.  How is the theater receiving, 
processing, and distributing MRAPs?
    Secretary Young. Once MRAP vehicles receive Government Furnished 
Equipment (GFE) integration at SPAWAR, SC, they are prepared for 
shipping into the U.S. Central Command (USCENTCOM) Area of Operations. 
Up to 360 vehicles per month will be shipped via strategic airlift from 
the United States to destinations in Iraq. The destination depends on 
the fielding location. Three major hubs employ strategic airlift 
(Forward Operating Base (FOB) Balad, FOB Liberty, and Al Asad). MRAP 
vehicle shipments, beyond the 360 designated by strategic airlift, 
depart via seagoing vessels to Kuwait. Once in Kuwait, the vehicles are 
de-processed and loaded into intra-theater aircraft and sent into Iraq.
    The Joint Program Office (JPO) MRAP develops the fielding schedule 
in coordination with USCENTCOM priorities and objectives and JPO MRAP 
production capabilities. MRAP vehicles are distributed in line with the 
fielding schedule at the direction of USCENTCOM's priorities.
    Mr. Taylor and Mr. Abercrombie. Does the theater possess adequate 
capacity to process the influx of MRAPs that will surely result from 
the dramatic increase in production from now through February.
    Secretary Young. Central Command developed and implemented a 
fielding process with the capacity to support the fielding of MRAP 
vehicles at a flow-rate based on the current production schedule. This 
effort has been accomplished in coordination with the MRAP Joint 
Program Office (JPO), and US Transportation Command. Theater validated 
the fielding process through the conduct of two Rehearsal of Concept 
(ROC) drills and shipment of 48 vehicles by surface in early Nov 07.
    The MRAP JPO, serving as the Department of Defense lead agency, 
will ship MRAP vehicles from the Space and Naval Warfare Systems 
(SPAWAR) Center in Charleston, SC via strategic air and sealift 
directly to Theater. There will be a total of nine fielding sites. The 
first four fielding sites also serve as Regional Support Activities 
sites where all limited Depot level maintenance and repairs will be 
conducted in Theater. The strategic air shipment delivers MRAP vehicles 
directly to Air Port of Debarkation (APODs) in the vicinity of each 
MRAP fielding site. MRAPs delivered via sealift to the Surface Port of 
Debarkation (SPOD) in Kuwait will be transported to a local facility 
for deprocessing and staging for onward intra-theater movement to the 
fielding sites in Iraq. Intra-theater transport from Kuwait to fielding 
sites will be primarily completed via contract air. Surge vehicles will 
be moved via ground Common User Land Transportation (CULT) assets. The 
Marine Corps and Navy have been fielding vehicles in Iraq since Mar 07 
and plan to continue under their current concept of operations. Upon 
arrival at the appropriate fielding site, and completion of vehicle 
deprocessing, USMC and USN vehicles are delivered to the user. The Army 
and Air Force conduct delivery of vehicles to the user in a more 
centralized manner at each of the fielding sites. As each Company 
arrives at one of the fielding sites, they begin the five day process 
of equipment turnover and user and maintenance training before 
returning to their bases with the MRAP vehicles as a unit.
    Mr. Taylor and Mr. Abercrombie. What are the positives and 
negatives to moving from monthly production contracts to weekly 
production contracts? What about daily?
    Secretary Young. The intent of moving from monthly to weekly 
production contracts is to provide an even flow of vehicle deliveries 
from the manufacturer to SPAWAR and allow for a smooth throughput 
throughout the vehicle pipeline from production to end user.

    Benefits of Weekly Production Deliveries:

       Causes manufacturers to stabilize their production 
processes.

       Provides SPAWAR with a steady stream of vehicles.

       Reduces wait time for integration at SPAWAR.

       Expedites DCMA inspection and acceptance.

       Provides smooth, predictable flow of vehicles throughout 
the pipeline from production, through integration, to transportation 
and deprocessing and into the hands of the end user.

    Potential Challenges to Contracted Weekly Production Deliveries:

       Manufacturers were pursuing steep production ramps to 
meet aggressive monthly delivery schedules and may experience 
challenges in shifting--production processes, timing, supplier orders, 
supplier deliveries, etc.--to meet equally aggressive weekly schedules.

       Manufacturers may experience initial delays in meeting 
weekly targets during the transition; the risk increases if we require 
a contract that binds them to new or changed requirements.

       Increases management and transaction demand on the Joint 
MRAP Program contracting team.

    Daily:

       Contracted daily delivery schedules would not provide 
benefit to the Department or the program schedule to counter the 
increased cost in managing such deliveries.

       Manufacturers are shipping vehicles on a regular basis 
and deliveries to SPAWAR are leveling throughout the month.

       Daily delivery schedules would be difficult to negotiate 
with the individual manufacturers and would put an undue burden on both 
the manufacturers and the government contracting personnel required to 
manage daily delivery schedules.

       Manufacturers are still transitioning to a weekly 
schedule, as described above, and realigning their processes, supply 
chains, orders, deliveries, etc. would take an additional amount of 
time and would not impact the system until several months from now if 
at all.

    Mr. Taylor and Mr. Abercrombie. Do you expect MRAP vehicle 
requirements to increase in the preceding months?
    Secretary Young. Assessment by the military services of future 
vehicle requirements is in progress. Tie final MRAP requirement will be 
shaped by continual theater commander's evaluation of the vehicles 
capability, the threat and the strategic landscape.
    The Marines have been operating their vehicles in Anbar province 
for several months and have made assessments based on the operational 
performance as well as tactics used and will brief their proposed 
requirements change to the Joint Requirements Oversight Council (JROC) 
in the near future.
    The Army will perform an operational assessment of the vehicles in 
February 2008 after all variants have been fielded. Any change in the 
Army's vehicle requirement from their current interim requirement of 
10,000 vehicles will be predicated on the results of the operational 
assessment, evolving force structure, and vehicle tactics, techniques 
and procedures used in Theater.
    Mr. Taylor and Mr. Abercrombie. Producing enough vehicles to meet 
DOD requirements will necessitate a steep ramp up of production between 
now and February next year. How confidant are you that you can achieve 
the ramp up necessary? Are your sub-tier contractors on board, 
especially considering you have some in common with one another?
    Ms. Hudson. From the perspective of Caiman we are already at the 
contract-required rate of production for the most recent award. We have 
a high level of confidence that we'll continue to deliver on schedule. 
Regarding our sub-tier contractors, XPA armor is inhouse and the 
government has funded the setting up of extra lines for XPA production.
    From the perspective of RG33, the rate of production has been 
negatively impacted due to the scope of customer changes, to the SOCOM 
vehicle variant.
    Mr. Taylor and Mr. Abercrombie. Ramping up to meet requirements 
will include hiring additional workers and some will need specialized 
skills and certifications, such as welding. How many more workers will 
be needed in the coming months to support production rates and how will 
they be trained to ensure they have the necessary skills?
    Ms. Hudson. We are fully staffed and fully trained to deliver the 
required numbers.
    Mr. Taylor and Mr. Abercrombie. What are the advantages and 
disadvantages of installing mission equipment at other locations, such 
as the prime contractors' facilities?
    Ms. Hudson. We have already worked with the Joint Program Office 
(JPO) and SPAWAR to cut into production most of the required changes. 
The integration of Government Furnished Equipment is still being done 
at SPAWAR and SPAWAR have no difficulty in coping with that task.
    Mr. Taylor and Mr. Abercrombie. Have you been by the MRAP Task 
Force or MRAP program management office regarding the sharing of 
technical designs in order to produce the most effective and complete 
MRAP vehicle? Would you be willing to share this type of information 
with your fellow prime contractors?
    Ms. Hudson. Yes, we have had two sessions with the JPO. The first 
involved the sharing of data and the second was specifically aimed at 
increased levels of protection. As for sharing this information with 
our fellow contractors, we are willing and have already done so during 
the JPO session.
    Mr. Taylor and Mr. Abercrombie. How are you incentivizing industry 
to accelerate production and facilitate their production and 
manufacturing processes?
    Ms. Hudson. The supply base is set up to sufficiently supply the 
required volumes and do not need further incentivizing.
    Mr. Taylor and Mr. Abercrombie. How do you feel about moving from 
monthly production contracts to weekly production contracts? What about 
daily?
    Ms. Hudson. The Caiman vehicle has been on a weekly production 
schedule since September 2007. We have provided a weekly production 
schedule for the new contract award and are contracted to it. We do not 
feel that anything can be more significantly achieved going to a daily 
production schedule, considering the transportation requirements 
associated with the delivery of each vehicle to SPAWAR.
    Mr. Taylor and Mr. Abercrombie. Producing enough vehicles to meet 
DOD requirements will necessitate a steep ramp up of production between 
now and February next year. How confident are you that you can achieve 
the ramp up necessary? Are your sub-tier contractors on board, 
especially considering you have some in common with one another?
    Mr. McGilton. We were supremely confident in our ability to achieve 
the ramp and had all mechanisms in place to ramp up to a delivery 
schedule of 500 vehicles per month. All of our sub-tier contractors and 
suppliers were fully prepared to execute this ramp. The actions we 
took, at the urging of both the Under Secretary of Defense and the U.S. 
Congress, led us to create a network of manufacturing capacity that is 
today the only organization reliably producing ahead of schedule. We 
have been led to believe that the Department is no longer planning to 
have us continue our ramp. We are consequently initiating planning and 
actions to reduce the network and scale back our manufacturing capacity 
to achieve rates of roughly half, or less, of our original estimates. 
The information that we have access to, appears to indicate that there 
is no further level of demand that will sustain the need for our 
production capacity. This seems, from our perspective, inconsistent 
with the message we have repeatedly been given relative to the MRAP 
program; specifically at a time when we are the only OEM reliably 
producing ahead of schedule for what has been described as a ``rescue 
mission,'' it defies our understanding as to why we would now be asked 
to halt our efforts and eliminate precious manufacturing capacity.
    Mr. Taylor and Mr. Abercrombie. Ramping up to meet requirements 
will include hiring additional workers and some will need specialized 
skills and certifications, such as in welding. How many more workers 
will be needed in the coming months to support production rates and how 
will they be trained to ensure they have the necessary skills?
    Mr. McGilton. We had plans in place to continue the steady increase 
in manpower across all functional skills (welders/fitters, mechanics, 
integrators/assemblers, engineers) at each of our network and 
subcontractor locations. Based on the Department's current direction, 
we have halted all hiring and are planning to initiate workforce 
reductions across the next 90-120 days in order to scale back the 
workforce to the size needed to meet the diminished demand placed 
against our vehicles.
    Mr. Taylor and Mr. Abercrombie. What are the advantages and 
disadvantages of installing mission equipment at other locations, such 
as the prime contractor's facilities?
    Mr. McGilton. The advantages are reducing the delays in fielding 
the vehicles and offering the potential for elimination of a single 
point of failure by introducing multiple sites for installation of 
government furnished equipment (GFE). Disadvantages include multiple 
ship to locations of materials and causing the potential complexity 
from having to provide GFE to multiple locations (vice a single 
location as it is currently executed) and potentially introducing 
multiple points for failure.
    Mr. Taylor and Mr. Abercrombie. Have you been contacted by the MRAP 
Task Force or MRAP program management office regarding the sharing of 
technical designs in order to produce the most effective and complete 
MRAP vehicle? Would you be willing to share this type of information 
with your fellow prime contractors?
    Mr. McGilton. Yes, before and since our appearance at the HASC, we 
have been in contact with the MRAP Joint Program Office and 
participated in a joint OEM review of test data. As we said during our 
appearance, we are fully committed to any and all actions that will 
lead to the improvement of MRAP vehicles across all OEMs. As a result 
of this review, we have, however, uncovered what appears to be 
potential inconsistencies in the application and gathering of the test 
data and are responding through the MRAP program office with the aim of 
ensuring decisions made are a result of accurate and consistent 
evaluation. Without the urging of your committee to see that the test 
data was shared, we feel strongly that we would not have become aware 
of these issues. The HASC deserves credit for the oversight it 
exhibited on this specific issue.
    Mr. Taylor and Mr. Abercrombie. How are you incentivizing industry 
to accelerate production and facilitate their production and 
manufacturing processes?
    Mr. McGilton. Mr. Chairman, as I stated in my previous testimony, 
and I can only speak for Force Protection, Inc., ``no incentives were 
necessary, nor would they have helped us do a better job than we did''. 
We viewed it as our job, our only job, to do everything we could to get 
these vehicles into the hands of the troops! The only additional 
assistance necessary from the DOD was having a firm understanding of 
the long term plan for this critical program, so we could invest in 
material and other resources to meet the need. As my peers and I said 
repeatedly, small incremental orders would be the worst possible 
scenario for ALL contractors. It now appears that the pleas for 
``visibility'' and ``larger orders'' fell on deaf ears, at least as it 
relates to Force Protection. To date, we still do not have visibility 
or substantial orders for our vehicles. What we do have, is what was 
requested, the capacity to deliver hundreds of vehicles each month. Our 
repeated monthly performance of shipping ahead of schedule is the 
objective evidence of that capacity. Our expectation, and what we were 
repeatedly told, was that ``business would be awarded to those that 
performed''. The majority of the business has now been awarded to those 
that we outperformed, and continue to outperform.
    Sir all of these issues may NOT be of concern to you, but some of 
them certainly should be. I trust the wisdom of the committee to decide 
which is which.
    Mr. Taylor and Mr. Abercrombie. How do you feel about moving from 
monthly production contracts to weekly production contracts? What about 
daily?
    Mr. McGilton. We are already entering into weekly production 
contract schedules with the MRAP program office but with the reduction 
of orders we are experiencing it hardly seems to matter now.
    Mr. Taylor and Mr. Abercrombie. Producing enough vehicles to meet 
DOD requirements will necessitate a steep ramp up of production between 
now and February next year. How confident are you that you can achieve 
the ramp up necessary? Are your sub-tier contractors on board, 
especially considering you have some in common with one another?
    Mr. Heebner. We have positioned ourselves to meet the ramp-up goals 
at our manufacturing sites and within our supply base. This effort is 
apparent in our current production, where we are ahead of schedule on 
the production of Cougars by about 56 vehicles. Startup of North 
American production of the RG31 is proceeding with expected completion 
of contract deliveries in March 2008. In addition, we have identified 
external vendors for items that would typically be handled internally, 
providing us with the necessary flexibility to support both MRAP 
vehicle demands.
    We are confident the General Dynamics Land Systems (GDLS) and GDLS-
Canada enterprise can successfully attain previously stated surge 
rates. We've already increased monthly production rates for Cougar. The 
RG-31 North American and South African suppliers are well established 
and producing products to support vehicle production in two locations.
    Major Cougar assembly elements (such as capsule fabrication, auto 
integration and final assembly) are mature and stable, inclusive of the 
workforce and facilities. RG-31 production is on the same path.
    Mr. Taylor and Mr. Abercrombie. Ramping up to meet requirements 
will include hiring additional workers and some will need specialized 
skills and certifications, such as in welding. How many more workers 
will be needed in the coming months to support production rates and how 
will they be trained to ensure they have the necessary skills?
    Mr. Heebner. We have been able to hire the additional manpower 
required and we have developed internal training programs for required 
specialty skills such as welding to support both our internal and 
external manufacturing needs.
    Mr. Taylor and Mr. Abercrombie. What are the advantages and 
disadvantages of installing mission equipment at other locations, such 
as the prime contractors' facilities?
    Mr. Heebner. There are essentially four advantages to installing 
mission-equipment packages at prime contractor/original equipment 
manufacturer facilities: experience, reach-back, facilities and 
accountability.
    Experience comes in two forms. The first is experience as the 
manufacturer of the vehicle. An OEM's thorough knowledge of the 
vehicle's manufacturing process flow, assembly operations sheets and 
skills required in production allow them to integrate mission equipment 
packages in the most efficient and economical manner. The second and 
equally important aspect is experience as a systems integrator. OEMs 
have years of experience integrating complex subsystems and components 
into vehicles. OEMs understand their systems' performance better and 
have a better ability to model, analyze and assess system level-impacts 
of integration strategies in order to ensure the most effective 
integration scheme for a given mission equipment package or a 
combination of them. OEMs completely understand how mission-equiprnent 
packages impact a vehicle's weight, space and power capacities and the 
subsequent impact they have on system-level performance in mobility, 
survivability, lethality and supportability.
    The second advantage that integration of mission-equipment packages 
at OEM facilities provides is reach-back to the point of installation 
on the vehicle assembly line. Should problems arise during integration, 
OEM have on-site systems engineers, design and manufacturing 
engineering expertise, plant equipment and process and quality experts, 
logisticians and a responsive supply chain all with experience focused 
on the vehicle and similar vehicles/products. They combine with a 
dedicated program manager to form a team that can easily and quickly 
meet in the manufacturing facility if necessary, analyze problems and 
develop solutions. Such a rapid response minimizes the impact to 
production flow, system-level performance and cost. This team's 
experience makes them better prepared to react and adapt to unknowns 
because of their experience and broad perspective on the system.
    An additional advantage to the integration of mission-equipment 
packages at OEM locations are the facilities. OEMs production 
facilities are geared toward providing integrated products. The 
facilities are flexible, expandable and in most cases already equipped 
for the work. That allows us to streamline the production process and 
adapt to change quickly. The production facilities are already 
structured for an efficient vehicle flow and incorporating mission-
equipment package integration into that flow would also be done with 
efficiency in mind. Plants also have the capability to fully check 
integrated system performance through their quality system before 
handing off to the government.
    Finally, having the OEM serve as mission equipment package 
integrator establishes a single point of ownership and accountability 
for the vehicle before it is handed off to soldiers and marines. The 
OEM has responsibility for the entire vehicle and its performance. As a 
result, the company must coordinate with its vendor network and the 
mission equipment package provider to ensure the system meets 
government needs. The use of a third party integrator complicates the 
process and increases the likelihood for errors and slower response 
times.
    Mr. Taylor and Mr. Abercrombie. Have you been [approached] by the 
MRAP Task Force or MRAP program management office regarding the sharing 
of technical designs in order to produce the most effective and 
complete MRAP vehicle? Would you be willing to share this type of 
information with your fellow prime contractors?
    Mr. Heebner. General Dynamics Land Systems remains open to sharing 
technology across the MRAP fleet given that the proper contractual 
terms and conditions exist, especially in areas where we do not own the 
intellectual property.
    I have expressed my corporate and individual commitment to 
supporting the MRAP program to Secretary Young and the Joint Program 
Office. General Dynamics has not been approached by the government 
about sharing MRAP vehicle designs.
    Mr. Taylor and Mr. Abercrombie. How are you incentivizing industry 
to accelerate production, and facilitate their production and 
manufacturing processes?
    Mr. Heebner. The GDLS strategy to accelerate the current production 
rate is to utilize existing idle capacity throughout industry, and 
involve the current GDLS supply base from legacy products such as 
Abrams and Stryker. We also explained to a select group of suppliers 
that future business with GDLS is contingent on demonstrated 
performance in the manufacturing of MRAPs. This approach coupled, with 
an established Cougar supply base, enhanced our ability to achieve and 
exceed monthly contract schedules.
    A similar approach was used by GDLS-C in its relationship with BAE 
Systems OMC, and the established supply base in North America.
    Communication and loyalty to our key partners has been the 
cornerstone for moving forward. Through efficiency already achieved, 
the supply chain focus is to reduce current product span time and 
increase core capacity for these platforms.
    Mr. Taylor and Mr. Abercrombie. How do you feel about moving from 
monthly production contracts to weekly production contracts? What about 
daily?
    Mr. Heebner. We have structured our delivery plan to support the 
need for mission-package integration at Space and Surface Warfare 
Charleston, realizing that large-quantity, month-end deliveries do not 
support the overall program objective. In most cases we have been able 
to provide a uniform delivery rate of MRAPs to Charleston throughout 
each month and will continue to pursue uniform vehicle delivery rates 
to assure the components are available for mission-package integration. 
As responded to in question three, by performing mission-package 
integration at the manufacturers' facility, we gain efficiencies in 
several areas. That could result in faster vehicle delivery to the 
theater.
    Mr. Taylor and Mr. Abercrombie. What impact is the UAW strike 
having on the IMG MRAP production and delivery schedules?
    Mr. Massicotte. On December 16, 2007, International Truck and 
Engine Corporation and the UAW settled their dispute and all aspects of 
production have returned to normal. There was no impact to MRAP or to 
our delivery schedule.
    Mr. Taylor and Mr. Abercrombie. Producing enough vehicles to meet 
DOD requirements will necessitate a steep ramp up of production between 
now and February next year. How confident are you that you can achieve 
the ramp up necessary? Are your sub-tier contractors on board, 
especially considering you have some in common with one another?
    Mr. Massicotte. Since the date of our testimony we have 
successfully increased MRAP production and in December 2007 we exceeded 
our monthly commitment of 349 MRAPs. This monthly total is the highest 
total vehicles produced by any contractor in any month.
    We plan to produce 430 vehicles in January and 500 vehicles in 
February. These increases in production remain a challenge that we work 
towards achieving each and every day. Additionally we work closely with 
each of our subcontractors individually to ensure they are prepared to 
increase demand along with us. This is not an easy task but I am 
confident that we will produce and deliver our future commitments. 
Furthermore I assure you that we will maintain an open channel of 
communication with the MRAP Program Office to identify potential 
problems as soon as possible and work together to resolve issues before 
they affect production.
    Mr. Taylor and Mr. Abercrombie. Ramping up to meet requirements 
will include hiring additional workers and some will need specialized 
skill and certifications, such as welding. How many more workers will 
be needed in the coming months to support production rates and how will 
they be trained to ensure they have the necessary skills?
    Mr. Massicotte. The MaxxPro is a unique MRAP vehicle. The chassis 
is assembled in our Garland Assembly Plant, in Garland Texas. This 
plant is a commercial plant and the assembly of the MaxxPro chassis 
does not require any unique skills. In addition, the MaxxPro 
incremental volume to this facility does not have a staffing impact. 
The armored capsule of the MaxxPro is assembled in our dedicated 
armoring facility in West Point, Mississippi. Our armoring process 
requires no welding and is assembled by bolting and bonding armored 
parts on the chassis. Our workforce in West Point, Mississippi, that 
assembles the armored capsule is 750 strong and can produce at our 
practical plant capacity of 600 per month with little or no additional 
hiring. We have invested in the existing workforce by carefully 
interviewing, screening, selecting and training our employees to build 
the MaxxPro vehicle. The skills required are basic automotive assembly 
skills. We've matched individual aptitude with appropriate production 
tasks. Our employees take great pride in the vehicles we produce and 
the support we provide to our armed forces.
    Mr. Taylor and Mr. Abercrombie. What are the advantages and 
disadvantages of installing mission equipment at other locations, such 
as the prime contractors' facilities?
    Mr. Massicotte. The advantages of installing mission equipment at 
our factory are significant and include time savings, reduced 
government costs and expedited delivery of vehicles to the Warfighters. 
Working closely with SPAWAR we have already identified and implemented 
19 GFE (government furnished equipment) pre-integration activities that 
are being performed at West Point which enable the Government to 
perform only `plug-and-play' tasks at SPAWAR and to ship the trucks to 
theater more expeditiously. These activities have been performed on all 
vehicles delivered since October. IMG is also poised to integrate the 
full suite of GFE if this is desired by the government.
    Mr. Taylor and Mr. Abercrombie. Have you been contacted by the MRAP 
Task Force or MRAP Program Management office regarding the sharing of 
technical designs in order to produce the most effective and complete 
MRAP vehicle? Would you be willing to share this type of information 
with your fellow prime contractors?
    Mr. Massicotte. Yes, we have been contacted and have in fact had an 
open session with the Program Management office and our fellow prime 
contractors regarding vehicle test characteristics and results. Even 
though each prime contractor has different survivability systems 
embedded in their designs, I believe there is a shared interest in 
collaborating and in providing the Warfighters with the very best 
equipment possible. International is willing to participate in any 
event sponsored by the Program Office or MRAP Task Force that promotes 
product improvement and effective sharing of lessons learned.
    Mr. Taylor and Mr. Abercrombie. How are you incentivizing industry 
to accelerate production and facilitate their production and 
manufacturing processes?
    Mr. Massicotte. As a worldwide leader in commercial truck 
manufacturing, we have a dedicated and attentive supply base that is 
well positioned to meet our production needs. For our new or non-
commercial suppliers we have advanced millions of dollars to 
subcontractors, at our own risk, to prebuy and prepare for production; 
we have hired outside manufacturing expert consultants and assigned 
them to work specifically on improving sub-contractor manufacturing 
capabilities; we have dedicated significant engineering resources to 
suppliers to develop capabilities and set up pre-agreements to perform 
as required. In short we have worked very closely with each supplier of 
critical components to `bring them along with us' to meet the steep 
production challenges. The incentive for all our suppliers is to be 
with IMG as IMG continues to grow in the military arena and also it's 
the potential to either expand their current relationship or to become 
a new supplier to Navistar's multi-billion dollar commercial truck 
business.
    Mr. Taylor and Mr. Abercrombie. How do you feel about moving from 
monthtly production contracts to weekly production contracts? What 
about daily?
    Mr. Massicotte. We are building MaxxPro MRAP vehicles as quickly as 
we are able. At IMG we are motivated to get them built and delivered so 
that we can complete the transaction and move on to produce more 
vehicles. For right now, during an aggressive launch phase, I do not 
think that moving to a more definitive schedule would enable us to move 
any more quickly. But, once we achieve a successful ramp-up and our 
suppliers are stabilized IMG will provide and deliver to a more 
definitive schedule. Please note that IMG is communicating daily with 
Program Management office and DCMA to ensure that downstream activity 
is coordinated with vehicle delivery.
                                 ______
                                 
                   QUESTIONS SUBMITTED BY MR. FORBES
    Mr. Forbes. Are you finding variation in trucks that arrive in 
Charleston, SC that are not integration ready? If yes, how are you 
dealing with that variation? Is there any congressional action that can 
help you in this area?
    Secretary Young. We are not experiencing variation of trucks 
arriving at SPAWAR Charleston, SC wit m each manufacturer's vehicles. 
The Defense Contracts Management Agency conducts quality assurance 
checks prior to acceptance of the vehicles. Additional quality checks 
are conducted during the integration process.
    There is variation between the manufacturer's vehicles that 
required us, in the past, to conduct a prototype install of Government 
Furnished Equipment (GFE) for each manufacturer's variant. At this 
point, all vehicles except General Dynamics Land Systems--Canada's 
(GDLS-C) RG-31s, have been through prototyping and are progressing 
steadily through the integration pipeline.
    The Department does not need congressional action with regard to 
vehicle variations.
    Mr. Forbes. Why shouldn't we have C4I equipment installation done 
at the manufacturers rather than sending the trucks to Charleston?
    Secretary Young. All C4I equipment, referred to as Government 
Furnished Equipment (GFE), is procured by the individual Services. We 
determined it would be prudent for the Joint Program Office (JPO) to 
have one common place to receive, store, inventory, account for, 
secure, and integrate this GFE. That entity is SPAWAR. Completing all 
these tasks at multiple sights would have complicated the GFE tracking 
and accounting process.
    Armored vehicle manufacturers do not inherently have the requisite 
skills at their vehicle manufacturing plants for detailed installation 
of C4I equipment or GFE. The JPO focused each manufacturer on its 
``core'' capability to produce MRAP vehicles as fast as possible. The 
production ramp was very steep and included some level of risk. Asking 
a vehicle manufacturer to ramp up a specialized integration capability 
as well as produce MRAP vehicles would have increased the risk of 
receiving these trucks on time.
    Now that the vehicles have all been prototyped (except General 
Dynamics Land Systems--Canada (GDLS-C)) and the manufacturers are 
achieving production ramps, the JPO is initiating an integration pilot 
with one manufacturer. Transition to integration by a manufacturer must 
be handled with great precision and planning to avoid any disruption to 
the pipeline of MRAP vehicles to theater.
    Mr. Forbes. Is SPAWAR Charleston opening a MRAP integration 
facility in Orangeburg, SC? And if so, what is the purpose for doing 
so?
    Secretary Young. Yes. The Joint Program Office (JPO) and SPAWAR 
established a Continuity of Operations (COOP) site for immediate 
relocation of the entire integration effort from SPAWAR in the case of 
natural disaster such as a hurricane. Several sites were examined, and 
the Orangeburg, SC location was chosen due to its large square footage 
and immediate availability for occupancy. Establishing several 
integration lines at this COOP facility allows for seamless and 
continuous operations of MRAP vehicle integration without impacting the 
flow of MRAP vehicles to theater.
                                 ______
                                 
                   QUESTIONS SUBMITTED BY MR. SHUSTER
    Mr. Shuster. In response to my questions at the July 19 hearing on 
Department of Defense plans to sustain and maintain the MRAP and what 
depots are involved in the planning process, I received a response that 
vehicles would initially be sustained and maintained via contractor 
logistics support (CLS). However, the Department would conduct a Depot 
Level Source of Repair (DSOR) analysis and a core logistics 
capabilities assessment, which will also consider Performance Based 
Logistics and public-private partnerships in determining the most 
effective sustainment support. Has the Department of Defense started 
the Depot Level Source of Repair Analysis (DSOR) and, if not, when do 
you plan to begin this analysis? Will you consider the Letterkenny Army 
Depot (LEAD) as a sustainment site? As you know, Letterkenny finished 
number one in military value for tactical vehicles in the 2005 BRAG 
analysis.
    Secretary Young. Yes, we have started the Depot Level Source of 
Repair Analysis and the Core Logistics capabilities assessment.
    Yes, Letterkenny Army Depot, Red River Army Depot, Marine Corps 
Depot at Albany, GA and Barstow, CA are all being considered by the 
Joint community as potential depots for MRAP vehicle sustainment.
    Mr. Shuster. Please tell me under your current contract when 
production of your vehicle ends. Would there be a production break if 
you received orders for new vehicles by the end of November. If so, 
what would that break be? Would there be an additional cost to you of 
ending and then restarting production?
    Ms. Hudson. Since my testimony at the 8 November MRAP hearing, BAE 
Systems has received two additional contracts, thus pushing forward 
contract end-dates and, consequently, anticipated breaks in production. 
Dates and production details for both the RG33 and Caiman vehicles are 
outlined below.
    RG33: The follow-on contract for RG33 has a projected completion 
date of July 2008. We do not anticipate any break in production for 
current contracts.
    Caiman: The follow-on contract for Caiman is schedule to be 
produced in May, June, and July 2008. We do not anticipate any break in 
production for current contracts.

                                  
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