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


                         [H.A.S.C. No. 110-128]

                                HEARING

                                   ON
 
                   NATIONAL DEFENSE AUTHORIZATION ACT

                          FOR FISCAL YEAR 2009

                                  AND

              OVERSIGHT OF PREVIOUSLY AUTHORIZED PROGRAMS

                               BEFORE THE

                      COMMITTEE ON ARMED SERVICES

                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS

                             SECOND SESSION

                               __________

                    AIR AND LAND FORCES SUBCOMMITTEE

                          meeting jointly with

             SEAPOWER AND EXPEDITIONARY FORCES SUBCOMMITTEE

                                   ON

   BUDGET REQUEST ON DEPARTMENTS OF THE NAVY AND AIR FORCE TACTICAL 
                           AVIATION PROGRAMS

                               __________

                              HEARING HELD

                             MARCH 11, 2008
                                     
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                    AIR AND LAND FORCES SUBCOMMITTEE

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

                                 ------                                

             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          JO ANN DAVIS, Virginia
BRAD ELLSWORTH, Indiana              J. RANDY FORBES, Virginia
JOE COURTNEY, Connecticut            JOE WILSON, South Carolina
KIRSTEN E. GILLIBRAND, New York      BILL SHUSTER, Pennsylvania
JOE SESTAK, Pennsylvania
                Lynn Williams, Professional Staff Member
                  Elizabeth Drummond, Staff Assistant

































                            C O N T E N T S

                              ----------                              

                     CHRONOLOGICAL LIST OF HEARINGS
                                  2008

                                                                   Page

Hearing:

Tuesday, March 11, 2008, Fiscal Year 2009 National Defense 
  Authorization Act--Budget Request on Departments of the Navy 
  and Air Force Tactical Aviation Programs.......................     1

Appendix:

Tuesday, March 11, 2008..........................................    53
                              ----------                              

                        TUESDAY, MARCH 11, 2008
FISCAL YEAR 2009 NATIONAL DEFENSE AUTHORIZATION ACT--BUDGET REQUEST ON 
    DEPARTMENTS OF THE NAVY AND AIR FORCE TACTICAL AVIATION PROGRAMS
              STATEMENTS PRESENTED BY MEMBERS OF CONGRESS

Abercrombie, Hon. Neil, a Representative from Hawaii, Chairman, 
  Air and Land Forces Subcommittee...............................     1
Bartlett, Hon. Roscoe G., a Representative from Maryland, Ranking 
  Member, Seapower and Expeditionary Forces Subcommittee.........     5
Saxton, Hon. Jim, a Representative from New Jersey, Ranking 
  Member, Air and Land Forces Subcommittee.......................     4
Taylor, Hon. Gene, a Representative from Mississippi, Chairman, 
  Seapower and Expeditionary Forces Subcommittee.................     3

                               WITNESSES

Balderson, William M., Deputy Assistant Secretary of the Navy, 
  Air Programs, Department of Defense............................    39
Darnell, Lt. Gen. Daniel J., Deputy Chief of Staff, Air, Space 
  and Information Operations, Plans and Requirements, U.S. Air 
  Force..........................................................    42
Hoffman, Lt. Gen. Donald, Military Deputy, Office of the 
  Assistant Secretary of the Air Force for Acquisition, U.S. Air 
  Force..........................................................    42
Myers, Rear Adm. Allen G., Director, Air Warfare, U.S. Navy......    39
Sullivan, Michael, Director, Acquisition and Sourcing Management, 
  Government Accountability Office...............................     8
Trautman, Lt. Gen. George J., III, Deputy Commandant for 
  Aviation, U.S. Marine Corps....................................    41
Young, John J., Jr., Under Secretary, Acquisition, Technology and 
  Logistics, Department of Defense...............................     7

                                APPENDIX

Prepared Statements:

    Balderson, William M., joint with Rear Adm. Allen G. Myers...    71
    Hoffman, Lt. Gen. Donald, joint with Lt. Gen. Daniel J. 
      Darnell....................................................   113
    Sullivan, Michael............................................   129
    Trautman, Lt. Gen. George J., III............................    98
    Young, John J., Jr...........................................    57

Documents Submitted for the Record:

    [There were no Documents submitted.]

Questions and Answers Submitted for the Record:

    Mr. Abercrombie..............................................   157
    Mr. Abercrombie and Mr. Taylor...............................   163
    Mr. Ellsworth................................................   168
    Mr. LoBiondo.................................................   168
    Mr. Miller...................................................   167
FISCAL YEAR 2009 NATIONAL DEFENSE AUTHORIZATION ACT--BUDGET REQUEST ON 
    DEPARTMENTS OF THE NAVY AND AIR FORCE TACTICAL AVIATION PROGRAMS

                              ----------                              

        House of Representatives, Committee on Armed 
            Services, Air and Land Forces Subcommittee, 
            Meeting Jointly with Seapower and Expeditionary 
            Forces Subcommittee, Washington, DC, Tuesday, 
            March 11, 2008.
    The subcommittees met, pursuant to call, at 10:05 a.m., in 
room 2118, Rayburn House Office Building, Hon. Neil Abercrombie 
(chairman of the Air and Land Forces subcommittee) presiding.

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

    Mr. Abercrombie. Aloha. Good morning, everyone.
    Good morning, Mr. Young, Mr. Sullivan. A pleasure to see 
you here today. I hope you are still smiling, for those who 
can't see. Appreciate that.
    I am going to make an opening statement, which I will 
submit further for the record, and then ask Mr. Taylor to 
submit his statement. Then we will get right to the hearing.
    This morning we are in a joint hearing of the Air and Land 
Forces and the Seapower and Expeditionary Forces Subcommittees 
to receive testimony regarding the Department of the Navy and 
Air Force Aviation Programs.
    There is an awful lot to cover today and we will conduct 
this hearing in two panels.
    Leading the first panel, as I have indicated by the 
introductions, Secretary John Young, the Under Secretary of 
Defense for Acquisition, Technology and Logistics. An 
unenviable post in these days, but one that is crucial and 
vital and I for one and very appreciative of the work you do, 
Mr. Young.
    You will be discussing issues related to the F-22 force 
structure and the Joint Strike Fighter (JSF) Program. Followed 
by Mr. Mike Sullivan from the Government Accountability Office 
(GAO), whose service to the United States and most particularly 
to the Armed Services Committee is invaluable.
    You are going to give us the GAO views on the risks 
associated with the current JSF program. Maybe risk is the 
wrong word there, but some of the challenges that are there, 
some of the perspectives that we need to take into account in 
our decision making, including an updated evaluation on the 
merits of the competitive Joint Strike Fighter engine program.
    The second panel will include Navy, Marine Corps and Air 
Force witnesses to help provide information on the major issues 
associated with their helicopter fighter and airborne 
electronic attack programs. The Navy and Air Force aviation 
includes a large number of programs--I don't know if this is 
being recorded or sent out or not, but that is one of the 
reasons why I wanted to go through a little bit in the opening 
statement of what we are going to take up, because if there is 
a television audience, they may not be as familiar with the 
subject matter as everybody in the audience might be, and some 
of the witnesses.
    Navy and Air Force aviation includes a large number of 
programs, but today we are going to focus on the Joint Strike 
Fighter, as I indicated, the F-22, tactical aircraft inventory 
and the CSARX as Air and Land Forces Subcommittee issues.
    Since 1997, the Department of Defense (DOD) has requested 
approximately $1.1 billion for the Joint Strike Fighter 
alternate engine program, which will be a key element in 
today's discussion. Congress has added $977 million to this 
amount for a total of $2.1 billion being authorized and 
appropriated through this fiscal year. We understand that an 
additional $1.3 billion would be required through 2013 to 
complete development of the Joint Strike Fighter alternate 
engine, which would provide the Department of Defense a 
competitive choice between the two interchangeable engines for 
the 2,443 Joint Strike Fighters that the Department now plans 
to buy.
    One reason Congress has supported a competitive alternate 
engine program for the Joint Strike Fighter is because of the 
benefits to DOD from the competition between the F-100 and the 
F-110 engine manufacturers beginning in the earlier eighties. 
As a result of this competition, the GAO has indicated in the 
past that the Department of Defense has saved approximately $4 
billion in lifecycle costs of 21 percent savings.
    Competition, the GAO has noted, has had other benefits, 
such as improvements in engine performance, reliability and 
maintainability. Again, it is not just Mr. Sullivan, and you, 
Mr. Young, that don't know all these things. But I think it is 
important that we have a foundation for the discussion that may 
help direct your remarks.
    I would like to note that Section 213 of last years 
authorization bill, that is to say this year's fiscal 2008 
National Defense Authorization Act, requires the Secretary of 
Defense to insure the obligation and expenditure of sufficient 
annual amounts for the continued development and procurement of 
two options for the propulsion system for the Joint Strike 
Fighter.
    Despite this provisional law, the Department has not 
included funding for a competitive Joint Strike Fighter engine 
in its budget request, and I am hoping, Mr. Young, you will 
address that issue.
    Funding for the F-22 will be another important issue for 
the subcommittee this year. The budget before us would 
authorize a final F-22 20-aircraft procurement. Although DOD 
officials have indicated the anticipated fiscal year 2009 
supplemental will include four additional aircraft, neither the 
advanced procurement funding for additional F-22s in fiscal 
year 2010 or the F-22 line shutdown cost is included in the 
budget request before us.
    And I expect that you will also address the question of why 
we are putting replacement planes in the supplemental budget 
instead of the regular budget that is before us right now. You 
already know you need it. Why is it going into a supplemental?
    The current F-22 program of record is 183 F-22s. The Air 
Force asserts that it requires a fleet of 381 F-22s to meet its 
requirements under the national military strategy. In future 
years, the defense program has presented end of production at 
183 F-22 aircraft with the possibility of an additional four 
more aircraft, as I indicated. The Joint Strike Fighter, the F-
35A, is planned to complete the remainder of the future Air 
Force fighter force structure. The F-35A is now planned to 
achieve its initial operation capability in 2013. Whether that 
is possible remains to be discussed and seen.
    The 2009 average procurement unit cost of the 20 F-22s is 
said to be $205 million in the information given to me. The 
projected cost of the F-35A is $73 million. We are much more 
certain of the cost of the F-22s, since we have an ongoing 
production line. I hope to hear from the GAO this morning on 
the high risk that the F-35 program will not achieve its cost, 
schedule or performance parameters. I hope that will be 
addressed.
    The F-22 and the F-35 have a similar 12-year development 
period. If we go back to where the F-22 was 5 years into its 
development in 1996, about where the F-35 is now in terms of 
development years, projections were for about 438 aircraft and 
an average procurement of $104 million in 2008 dollars. Today 
we are planning for 183 rather than 438, and the unit cost have 
increased 97 percent. What is the harbinger of the F-35A, we 
have to explore.
    If the cost of the F-35 increases similar to the F-22, 
costs could increase by a similar amount, if it was just the 
same, it would be $156 million per aircraft in 2008 dollars and 
that is without a reduction of the currently projected 2,443 
aircraft total procurement. Whether that number sustains itself 
is, again, something I think we need to address honestly.
    So I am asking for your assessment of the competitive 
engine program, the development and procurement challenges in 
the Joint Strike Fighter and the way forward for the F-22 
production. And then when we get to the second panel, I will go 
into further discussion.
    Before we go further then, I will ask Mr. Taylor if he has 
a statement that he would like to either submit or state at 
this time.

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

    Mr. Taylor. Thank you, Mr. Chairman.
    I would like to have a statement that I would like to 
submit for the record. Additionally, I would hope at some point 
that Mr. Young could address the situation with the P-3s over 
in Iraq, what is the Department's plan to either replace them, 
fix them or find a suitable replacement aircraft for the time 
being.
    Thank you very much, Mr. Chairman.
    Mr. Abercrombie. Thank you.
    That will be submitted for the record without objection.
    Any other members like to make an opening statement?
    Mr. Saxton.

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

    Mr. Saxton. Thank you very much, Mr. Chairman.
    I would like to begin by welcoming our witnesses, of 
course, and particularly I would like to thank Secretary Young 
for joining us today. We have worked on many programs and 
projects together over the years.
    Mr. Chairman, the President's budget request for fiscal 
year 2009 has left Congress, in my opinion at least, in quite a 
quandary. Simply put, the dollars available do not provide the 
level of support necessary to meet Air Force needs. Not only 
does the budget fail to reflect a decision on whether or not to 
buy more C-17s and F-22s, it fails to fund congressionally 
mandated programs, as you pointed out, such as the JSF 
competitive engine and a minimum required B-52 force structure.
    After reviewing the budget request, I can only come to one 
conclusion. Once again, I will state it again, there is not 
enough money in the defense top line to meet the nation's 
requirements. As a result, folks who are with us today 
testifying are faced with making what I think are impossible 
choices. I say impossible because they are charged with 
training and equipping the military forces to support the 
national military strategy, and yet they are not resourced to 
do so.
    In previous years, the Department has made things work by 
assuming risks in areas where they could, and they have tried 
to spread that risk across the Department so that no one 
capability would suffer too greatly. I believe that we are 
seeing in this year's budget request that we have stolen all we 
can from Peter and Paul is issuing foreclosure notices. We are 
up against the wall.
    Folks, we have got to increase the defense top line. We 
have failed to adequately resource the Department's 
requirements and the fiscal year 2009 budget request is a clear 
indication that they are left with impossible choices. This 
base budget says, first, we need more C-17s, but we can't pay 
for them. Second, we need more F-22s, but we can't pay for 
them. Third, we need 76 B-52s, but we can only pay for about 
40. We need a competitive engine for the JSF, but we can't pay 
for it. In fact, we need more money in the JSF program to 
ensure an adequate test and development strategy, as the 
chairman just noted, but we can't pay for that either.
    The Congress cannot allow this or any Administration to 
obscure the true strategic risks of their decisions by offering 
a snapshot of the potential threat taken through a straw. This 
budget request is an indication that they have done just that 
in my opinion. Although the budget process is complex, it is 
based on a very simple framework. You start with an 
analytically supported and agreed upon threat assessment, then 
you generate a strategy to deal with that threat. Finally, you 
allocate resources and you mitigate the risks associated with 
resource constraints.
    This budget request does things in the reverse order, and 
it simply assumes away the threat in order to balance the 
equation. I believe we have a responsibility. That 
responsibility is to adequately equip the brave men and women 
that voluntarily serve this nation, and this budget request is 
a clear indicator that we do not intend to do so, at least not 
without an unacceptable risk.
    With that, Mr. Chairman, I will repeat once again, I think 
that we need to increase the top line. And thank you for giving 
me this opportunity to make this statement.
    Mr. Abercrombie. Thank you, Mr. Saxton. We are certainly 
going to explore all of that, I assure you.
    Mr. Bartlett, my good friend, do you have an opening 
statement?

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

    Mr. Bartlett. Yes, sir.
    Thank you, Mr. Chairman.
    I know we have a number of aviation programs to discuss 
today and quite a few witnesses and I expect we will examine 
more closely a few acquisition efforts, so I will keep my 
remarks brief.
    Today the United States airpower is unrivaled. It allows us 
to hold virtually any fixed surface target, and many moving or 
buried targets, on the planet at risk. Where we used to require 
many planes to service a single target, or at least one plane 
per target, now a single aircraft can perform multiple 
missions.
    Indeed, we are no longer constrained by the physical 
location of the pilot. With the advent of unmanned aerial 
vehicles (UAV), which of course cannot replace manned aircraft 
in all circumstances, we are able to command and control 
aircraft around the world from air bases in the United States. 
In fact, it is these very advances which have led me to 
question, as have Admirals Stansfield Turner and Art Cebrowski, 
the day of the aircraft carrier may have come and gone.
    I do not pose the question to cast doubt on the need for 
naval aviation. Nor do I question the need to project power in 
access-denied environments. I have pushed for further 
examination of this issue primarily because of the vast 
improvements in combat airpower, unmanned aviation and guided 
munitions and the vulnerability our carriers face as targets in 
today's threat environment.
    With that said, we should not maintain false confidence in 
our technological superiority. Other nations such as China and 
India are fielding modern fighter aircraft, multi-level air 
defense systems and aerial surveillance systems. At the same 
time, the United States has to make difficult and expensive 
choices regarding the recapitalization of our aging aircraft. 
What is more, these choices are not confined to a single 
service. The need to replace the Air Force's F-16s and F-15s is 
arguably no greater than the need to provide new fighters to 
the Marine Corps and Navy.
    While one can certainly point to critical capability gaps 
within the Air Force, particularly given the recent issues with 
the F-15s, the Department of the Navy has a projected shortfall 
of nearly three carrier aircraft wings by 2017, yet we may not 
be able to simply buy our way out of this predicament. The 
replacement aircraft, the so-called fifth generation fighters, 
like the F-22 and the F-35, are very expensive.
    On a separate note, related to acquisition of future 
aviation platforms, I hope our witnesses will comment today 
about a recommendation from the recent Defense Science Board 
report on DOD energy strategy, ``More Fight, Less Fuel.'' As I 
am sure our witnesses know, mobility platforms consume the most 
energy used by the Department, with jet fuel representing 
nearly 60 percent of fuel consumed by all of DOD. Consequently, 
the Defense Science Board's first recommendation was that the 
Department accelerate efforts to implement energy efficiency 
key performance parameters, KPPs, for weapons systems, and use 
the fully burdened cost of fuel to inform all acquisition 
trades and analyses about their energy consequences.
    Some important steps were already taken prior to the 
release of the Defense Science Board report. In August 2006, 
the Vice Chairman of the Joint Chiefs of Staff (JCS) issued a 
memorandum endorsing a Joint Requirements Oversight Council 
(JROC) decision to establish an energy efficiency KPP. In April 
2007, a USDAT&L memorandum established that it is department 
policy to use the fully burdened cost of fuel for all 
acquisition trade analyses.
    Chief executives from ConocoPhillips and Shell oil 
companies doubt the ability for world supplies to meet demand 
by 2015, a very short time period in DOD planning horizons. Oil 
is over $100 a barrel and Goldman Sachs is among those 
estimating it could go to $150 or $200 a barrel this year.
    That is why I believe it is very important for our 
witnesses to assess the status, importance and future impact of 
creating and implementing this recommendation for an energy 
efficiency KPP and use of the fully burdened cost of fuel. How 
critical are they in every stage of our planning processes to 
achieve the Defense Science Board's proposal to reduce the 
energy intensity of our operational forces to enhance our 
warfighting capabilities.
    I understand the requirements for F-22 and F-35 are already 
long established. What is the likelihood that an energy 
efficiency KPP could be added to these programs or any other 
aviation platforms in the near term?
    Finally, as we examine these issues, I would strongly urge 
the Department to maintain transparency with Congress regarding 
the true requirements for aviation programs. We need to know 
the real cost of fulfilling these requirements. We need to know 
the amount of risk that each year's budget accepts. It does a 
disservice to the American people if requirements are masked or 
changed on the basis of what the Department of Defense believes 
it can afford. Lay out the true requirement and propose a 
budget that is the President's best attempt to balance many 
competing needs.
    We are at an important crossroads in our nation's history. 
The world around us is changing rapidly. We must be judicious 
in our choices as we face what seem to be unlimited 
requirements with a very limited budget.
    I look forward to hearing from our witnesses. Thank you all 
for being with us today.
    Thank you, Mr. Chairman.
    Mr. Abercrombie. Thank you, Mr. Bartlett.
    I might note in relation to your remarks that the last word 
I heard this morning is that speculation in oil futures have 
gone over $109 a barrel today.
    I want to thank you both for your statements, as always. 
They are clearly stated and insightful and provocative.
    With that, Mr. Young, would you like to come up and have 
the four of us go down and sit there and then you question us? 
How would that work?
    Secretary Young. That would be great.
    Mr. Abercrombie. Do you have enough--I saw you making notes 
as fast as you could, there. Do you simply want to agree with 
everybody and we can close down, or would you like to get 
started and perhaps make a statement of your own, and then we 
will go from there.

 STATEMENT OF JOHN J. YOUNG JR., UNDER SECRETARY, ACQUISITION, 
        TECHNOLOGY AND LOGISTICS, DEPARTMENT OF DEFENSE

    Secretary Young. Mr. Chairman, that would be great, I 
think.
    Chairman Abercrombie, Chairman Taylor, Ranking Member 
Saxton and Ranking Member Bartlett, and distinguished members 
of the respective subcommittees, thank you for the opportunity 
to appear before you today.
    I will try to be brief and directly address the issues 
highlighted by the committee hearing letter.
    First, as you know, the Defense Department has analyzed the 
requirement for F-22 aircraft and determined that the current 
budgeted inventory of 183 is adequate. It is critical for the 
Defense Department to move forward to the next generation of 
supportable and highly capable fighter aircraft, the Joint 
Strike Fighter.
    Frankly, the Defense Department still has work to do on the 
F-22. A number of concerns were raised during recent 
operational testing. Further, current Air Force plans do not 
upgrade 100 early F-22s to the most capable block 35 
configuration. Upgrading F-22s that DOD has already purchased 
should be considered ahead of any other F-22 options.
    The Joint Strike Fighter program, with the tremendous help 
of----
    Mr. Abercrombie. Could you repeat--I am sorry. Could you 
repeat your last statement? I want to make sure I got it 
correctly.
    Secretary Young. Upgrading F-22s that the Department of 
Defense has already purchased should be considered ahead of any 
other F-22 options.
    The Joint Strike Fighter program, with the tremendous help 
and support of this committee, has gone reasonably well. 
Indeed, I was a new member of the Pentagon leadership when the 
system development and demonstration contract was awarded in 
2001. The fiscal year 2009 budget before you requests funds for 
the 3rd year of low-rate initial production. The Congress has 
given the Defense Department and the industry a chance to 
efficiently execute this program. This is in contrast to the 
fact that the F-22 SDD contract was awarded in 1991 and low-
rate production did not begin until 2001.
    The SDD program for the F-135 Pratt & Whitney engine has 
also gone well, leveraging heavily the investment made in the 
Pratt & Whitney F-119 engine for the F-22. The engine recently 
experienced a repeat blade failure and we are confident that 
modest design modifications will correct this issue, which is 
linked to a rare flight condition, military power in the 
vertical STOVL mode.
    I believe we may need to add modest funds to the Joint 
Strike Fighter program budget to complete development. One 
major factor is the loss of $1.1 billion from the JSF SDD 
program over the last 5 years due to Pentagon budget cuts and 
Congressional marks. Pentagon and Congressional marks make a 
real impact on program execution and a well-planned program.
    The Department is proceeding with the obligation of funds 
to develop an alternate engine, consistent with congressional 
direction. In the past, I have been an advocate of the 
alternate engine program. In an unconstrained budget 
environment, the alternate engine provides some potential 
benefits to the Defense Department. However, I feel the 
pressure on me as the defense acquisition executive is to 
deliver appropriate defense capability at the lowest possible 
cost, carefully using each tax dollar.
    The alternate engine program will cost a minimum of $1.6 
billion for development and an additional $1.9 billion to 
establish production. The Defense Department, according to the 
KEG would need to save 16 to 22 percent on the planned JSF 
engine procurement in order to have a business case for the 
development of the alternate engine. The $1.6 billion to 
develop an alternate engine represents funds that can be used 
now to buy other needed capability for our warfighters and our 
Nation.
    Furthermore, the F-136 engine is not derived from the F-119 
and presents a risk of technical issues and cost growth during 
development, another risk to the warfighters capability.
    Finally, the Defense Department budget has proposed 
termination of C-17 production. After reviewing these issues in 
detail through the C-5 re-engining program, I believe this is a 
well-considered decision. In many ways, it is like the 
alternate engine decision. Purchase of additional C-17s is not 
necessary and use of funds for this purpose in a constrained 
budget environment will result in denying other capabilities to 
our warfighters.
    Again, I appreciate the chance to testify. I am sure I have 
not been able to address all of the committee's concerns, so I 
look forward to your questions.
    [The prepared statement of Secretary Young can be found in 
the Appendix on page 57.]
    Mr. Abercrombie. Thank you for a very succinct summary. 
That is one of the best I have heard. Thank you.
    Mr. Sullivan.

   STATEMENT OF MICHAEL SULLIVAN, DIRECTOR, ACQUISITION AND 
     SOURCING MANAGEMENT, GOVERNMENT ACCOUNTABILITY OFFICE

    Mr. Sullivan. Thank you, Chairman Abercrombie, Chairman 
Taylor, Ranking Member Saxton, Ranking Member Bartlett. It is a 
pleasure to be here this morning.
    My testimony is going to be more specific to the Joint 
Strike Fighter. It discusses emerging risks to the overall 
program and updates information from the analysis we performed 
last year regarding different cost scenarios for the alternate 
engine. I will briefly summarize my written statement, which I 
will submit for the record.
    Also, I would like to note that the information on overall 
program risks is taken from our annual mandated report, which 
is also being issued today.
    First, let me begin with observations on the overall 
current program cost estimate. In the past year, the Department 
reported that the Joint Strike Fighter programs procurement 
cost estimate increased by more than $23 billion due to a 7-
year extension to the procurement period, increased estimates 
of future contract prices and airframe material cost increases.
    The program's official development cost estimate remained 
about the same. However, to maintain that estimate the program 
made decisions that we believe may have increased overall 
risks.
    In order to replenish $600 million in program reserves that 
were spent too quickly, the Department has approved a plan that 
will eliminate two test aircraft, reduce flight tests and 
accelerate the reduction of the prime contractor's development 
workforce. Several prominent defense offices found the plan was 
too risky and we agree with that. Our report issued today 
recommends revisiting the plan to examine alternatives.
    The Department has stated that it believes the plan is 
manageable, but it will monitor its execution and revise it if 
necessary in the future.
    At this point in the program, we believe its cost estimate 
lacks reliability. It does not include all applicable costs. 
For example the alternate engine program is not included. It 
relies on data from deficient reporting systems, earned value 
management systems, and it is at variance with other 
independent cost estimates. The KEG, for example, and DCMA, 
also has another estimate.
    The Department has identified billions of dollars in 
unfunded requirements and the development schedule continues to 
degrade. In our report, we recommended a new, full, independent 
cost estimate be conducted so that Congress will have an 
accurate understanding of future funding needs.
    The Department generally agreed with this recommendation 
and I believe is in the process of beginning a new independent 
estimate.
    The foremost challenge for the program at this point 
continues to be affordability. From its outset, its goal was to 
field an affordable common family of strike aircraft. Since 
then, unit procurement prices have continued to rise. The 
program also makes unprecedented demands for funding from the 
defense budget, averaging about $11 billion each year for the 
next two decades. This is competing with other critical 
priorities for the shrinking Federal discretionary dollar. This 
raises concerns about how many Joint Strike Fighters we will 
eventually be able to afford.
    I would now like to briefly touch on the alternate engine 
competition. This year, the Department is again proposing 
cancellation of the Joint Strike Fighter alternate engine 
program. Under a sole-source scenario, the current estimated 
remaining lifecycle cost for the engine program is about $55 
billion. The remaining initial investment in the alternate 
engine program would require an additional $3.5 billion to $4.5 
billion over the lifecycle. However, as we reported last year, 
that investment could return at least that much in savings over 
the lifecycle of the engine.
    Our updated analysis suggests that a savings rate of 9 to 
11 percent would recoup that investment and prior experience 
indicates that it is reasonable to assume savings of at least 
that much. Last year when we did this, the estimate was, I 
believe it was 10 to 12 percent. So the savings has actually--
the savings needed to recoup has actually gone down.
    Finally, the non-financial benefits, such as better 
performance and reliability, more responsive contractors and 
industrial based stability, are more likely outcomes in a 
competitive environment.
    Just to conclude, Mr. Chairman, the upshot of our analysis 
on a Joint Strike Fighter is that the Department is challenged 
once again with weighing short-term funding needs against 
potential long-term cost savings on the program. We and others 
believe that the Department's new plan to cut test resources 
and flight tests to fund manufacturing cost overruns will add 
costs in time to the program later.
    Likewise, the Joint Strike Fighter engine acquisition 
strategy poses a critical choice between short-term funding 
needs and future rewards. The Department can use funds for 
other costs in the short term with a sole-source strategy, but 
all indications are the competition would save money in the 
long run. Such are the difficult choices that will have very 
long-lasting budget implications.
    Mr. Chairman, this concludes my statement. I look forward 
to questions.
    [The prepared statement of Mr. Sullivan can be found in the 
Appendix on page 129.]
    Mr. Abercrombie. Again, Mr. Sullivan, thank you for that 
succinct and direct response. Really, both of them are 
excellent in terms of giving us the foundation for questioning.
    It has been a while since we have had a hearing. I just 
want to remind everybody, I like to go in reverse each time, 
and I think now this time we start at the least senior members, 
which is not pejorative by way of description, I assure you, 
and we will work our way back up.
    So Mr. Akin, I think that you would be first under that 
procedure. Is that okay with you?
    Mr. Akin. Mr. Chairman, I didn't realize a bluebird was 
going to visit me this morning this way, but thank you very 
much. I appreciate that.
    I understand----
    Mr. Abercrombie. I have been called a lot of things, but 
bluebird isn't one of them.
    Mr. Akin. I wasn't saying you were the bluebird. I just 
appreciate that one flew in the window.
    Thank you, Mr. Chairman.
    I think that Mr. Sullivan's comment about difficult choices 
and long-term consequences, boy, that really seems to summarize 
where all of us are, find ourselves this morning. And I really 
think that Mr. Saxton's comments about not enough money in the 
top line is also a major piece of what we are dealing with.
    I guess the concern I had, and this might have been--this 
is something I imagine you will hear repeatedly this morning, 
and that is in terms of the difficult choices and long-term 
consequences, we have seen a number of major, major contracts 
being awarded overseas. And I guess the concern I have is, what 
happens to our industrial base?
    I guess this has become even more vivid to me because in 
the last week or two I have had a chance to visit a lot of 
small machine shops and different people who are not major 
subcontractors, they are not sub sub, they are like, way, way, 
down the food chain, but there are these jobs that are all 
networked throughout our country.
    And what you said was you are going to close down the C-17 
line. We are not going to be building U.S.-made tankers 
anymore. I assume if we need more C-17 capability, we will let 
the Europeans do it. I bet the Chinese, you know, they probably 
make a good fighter aircraft too.
    But I guess there is a certain point where it seems to me 
that there has to be some consideration of capabilities that we 
retain inside the country, and I don't know if that is part of 
your acquisition consideration or not, whether you are very 
focused on getting the very best, you know, answer to a 
particular specific contract. But I think that is a trend that 
a lot of people are paying attention to.
    That is a very general question, but one that I think is of 
grave concern to many of us.
    Another one would be, are there C-17s in the unfunded 
request? Because when I have talked to the people out at the 
airbase by us in the St. Louis area, they are saying, boy, that 
C-17 is working for us. We are using it in new ways. And we can 
use more of them. And it goes back to that old C-5 question, 
whether we can get the politics of that straightened out.
    But I guess my main concern is our industrial base, and if 
you could comment on that, I would appreciate it.
    Mr. Abercrombie. Before you do, as you gather your 
thoughts, because of the two panels, I am going to try to stay 
to 5 minutes and try to go rounds, if we can. So if you can 
keep your answers, again, as succinct as possible in the same 
tenor as your opening statements, I would be grateful.
    Secretary Young. Congressman, we do consider the industrial 
base, particularly when it comes to critical technologies that 
are necessary for our nation's defense capabilities. The 
Director of Defense Research and Engineering (DDR&E) office 
studies that issue constantly to report on it.
    In terms of larger-scope competitions, we conduct those 
competitions in accordance with the law and the Federal 
acquisition regulations. And so when bidders--those regulations 
don't necessarily consider the origin of products. They don't 
necessarily consider where the factory is. They consider 
getting good capability, best value capability to the Nation 
for a price. There are rules that have to be complied with in 
terms of U.S. content. Bidders always comply with those rules, 
so they know them. But beyond that, you know, we can't use 
competitions to structure an industrial base.
    Mr. Akin. I guess I understand that, but the thing that 
struck me is, I am talking to these people, this is a mom and 
pop shop that have these different pieces of equipment that 
they are buying. They own everything. And they are taking their 
own money and plucking $3 million or $4 million down to buy 
some great, big, you know, five or six axis, you know, 
equivalent of a milling machine, and all.
    They don't know what contracts they are going to be able to 
build parts on on that piece of equipment. They are gambling 
that somehow in the next five or seven years, they will get 
enough business to cost-justify doing it.
    Connected with that is also the technologist who has to run 
the machine. Now, if those people don't get the contracts, what 
happens is that industrial base goes away. The guy goes and 
finds another job. The machine is sent overseas or something. 
The next time we bid something, our cost is going to go up 
because we don't have the base. I mean, there is sort of a 
self-feeding. And that was why that term long-term consequences 
is of tremendous concern to me.
    I understand. I used to be in charge of maintenance of a 
steel mill. I understood the tradeoffs. But there are some that 
are a little bit less tangible but still very significant in 
terms of their implications for our country, and I certainly 
hope that we build that in somehow into our equation.
    How about the C-17? Did you have any--are there some of 
those in the unfunded request again?
    Mr. Abercrombie. Could you answer as briefly as possible?
    Secretary Young. Congressman, as part of the Nunn-McCurdy 
process for C-5, particularly started with the requirements, I 
think the requirement--we would have to talk on a classified 
basis--is substantial for the C-17. One could argue it is very 
conservative. Through the C-5 Nunn-McCurdy decision and the C-
17s we have procured, we meet that requirement with some margin 
and we have the capability to enhance the maintenance of those 
planes and overachieve that requirement, and I do believe there 
is no argument, as I said, to buy or issue C-17s for the 
Defense Department.
    Mr. Abercrombie. Thank you.
    Chairman Ortiz.
    Mr. Ortiz. Thank you, Mr. Chairman.
    Secretary Young, Mr. Sullivan, thank you so much for 
joining us this morning. We certainly thank you for your 
service.
    Secretary Young, the Navy's original long-standing 
requirement for training aircraft identified as the 234 jet 
trainers is the absolute minimum number of aircraft needed to 
support pilot training. Training requirements have continued to 
increase, yet the Navy's last budgeted procurement of the T-45 
was in 2007 with a total procurement of just 221 aircraft.
    Are 221 aircraft enough to support current and future 
training requirements, especially with the Joint Strike Fighter 
coming online? And if more T-45s are needed to meet future 
training requirements, would it be not most cost effective to 
revive the production line prior to full closing to preserve 
manufacturing experience, decrease costs and the potential 
delay of a follow-on jet trainer?
    Secretary Young. Obviously, the next panel can probably 
address that in more detail. From my time in the Navy, I have 
some experience with this, and that has been one of the stable 
requirements in the Department, is the number of T-45 jet 
trainers. In fact, a story I often tell that is of relevance I 
think to the committee is, in our budget processes, we bought 
T-45s at low rates and they cost upwards of $30 million a copy. 
We bought them at high rates, and they cost only about $20 
million a copy.
    To buy the inventory you talked about, we spent several 
hundred million dollars, more taxpayer money, to get absolutely 
no more capability. We need more discipline in rate procurement 
for our procurements, and that is one aspect of Joint Strike 
Fighter, is staying the course and trying to efficiently 
execute that program.
    But the Navy has moved increasingly and, I think, smartly, 
and it has some energy consciousness to doing more ground-based 
training and simulation-based training. So I am not aware of an 
additional requirement for aircraft training. I think the 
Department as a whole, not just the Navy, is doing a very good 
job of making greater use of those assets that are cost 
efficient and energy efficient to accomplish training needs.
    Mr. Ortiz. You know, I think it is very, very important, 
because we are inundated with a bunch of problems. And I would 
hope that by keeping the production line, not that I am really 
advocating that we do that, but I think that it is important, 
if we are going to try to save some money. But if you think 
that the aircraft that we have now is sufficient, we just hope 
that we don't come back again and say, you know what, we made a 
mistake. We have to go and open the production line. And then 
the cost of this aircraft is not going to be $20 million or $30 
million.
    I don't want to take too much time. I would like to allow 
other members to ask questions.
    Thank you, Mr. Chairman.
    Mr. Abercrombie. Thank you very much.
    Dr. Gingrey is next.
    Dr. Gingrey. Mr. Chairman, thank you.
    I am going to direct my question to the Secretary.
    Mr. Secretary, thank you for being here today.
    I think you know the situation with the F-22 better than 
anyone. The base budget for fiscal year 2009 contains no funds, 
as you said. The lines shut down our advance procurement of the 
F-22s.
    There seems to be a discrepancy between where that will 
leave us in terms of the size of the F-22 fleet and where the 
Air Force and most independent experts believe that number 
should be. That will leave us at 183 and possibly 187, as you 
indicate in your testimony an additional four F-22s in the 
supplemental request. But needless to say, the Department has 
left Congress with some work to do here to reconcile this 
discrepancy.
    Mr. Secretary, in your testimony you indicate that the 
Department's program requirement for F-22 Raptor is 183. Can 
you tell us what the Air Force's requirement for Raptors is?
    Secretary Young. I think it would be better for the Air 
Force to----
    Dr. Gingrey. Well, let me tell you. I will speak for the 
Air Force, then. It is 381. And Secretary Wynne and General 
Moseley indicated to us in previous hearings that it is 381. 
Hearing materials also indicate the Air Force needs these 381 
F-22s to meet the national military strategy, which requires 
ability to perform two near simultaneous major combat 
operations and also to perform homeland defense missions, and 
the quadrennial defense review requirements. An integral part 
of meeting the national military strategy is to outfit each of 
the Air Force's 10 air expeditionary forces with one squadron 
of 24 F-22s.
    The Air Force and the Joint Requirement Oversight Council, 
JROC, believe the force structure needed to accomplish this is 
240 assigned aircraft and 141 for testing, training and backup.
    Clearly we cannot accomplish this with 187 F-22 Raptors, 
which translates to about 110 that are operationally available. 
So I want to ask you again, Mr. Secretary, point blank, are 187 
Raptors enough to ensure the Nation can successfully carry out 
the national military strategy as I have outlined it without 
taking on substantial risks?
    Secretary Young. Congressman, 187 Raptors are adequate to 
accomplish the national military strategy. There are at least 
two other studies that look at this.
    Let me start with the threat assessment, which suggests 
after 2025 it is hard to see multiple high-end peers for those 
high-end threat engagements. A joint air dominance study looks 
at one military combat operation, not two. That two that you 
mentioned, the Air Force study, is a driver. The Air Force 
study is 6 years old. It is also driven by the force structure 
requirement to equip 10 squadrons, but not necessarily grounded 
in the intelligence assessment of the threat or the probability 
that we will simultaneously conduct two military major combat 
operations.
    Dr. Gingrey. Mr. Secretary, with all due respect, that is 
not supported by any rigorous campaign-based analysis assessing 
the most stressing scenarios and rapidly growing threats and 
that at least three independent studies commissioned by DOD 
recommended procuring significantly more than 220 Raptors, and 
the Air Force urgently needs to replace approximately, what 500 
1970 and 1980 vintage F-15A to D Eagles. Not to mention over 
the last 10 years multiple independent studies and over 20 Air 
Force studies have all recommended the Air Force requires far, 
far more than 187 F-22 Raptors to do the job previously done by 
800 F-15A to Ds.
    Secretary Young. Well, another factor in this is Joint 
Strike Fighter. And the analysis behind the DOD joint air 
dominance study makes clear that you need a certain number of 
fifth generation fighters for these high-threat military 
combat--major combat operations. But to change that mix to a 
higher-cost F-22 at the expense of the lower-cost Joint Strike 
Fighter, the studies show variation in there does not change 
our effectiveness or our loss ratios, and we need to get you 
the classified data----
    Dr. Gingrey. But, Mr. Secretary, there is a tremendous gap 
there----
    Mr. Abercrombie [continuing]. Sorry. This is a good 
discussion, but I think we are going to have to carry it on at 
another point. Do you want to----
    Dr. Gingrey. I have got a few more seconds left, Mr. 
Chairman.
    Mr. Abercrombie. You do now----
    Dr. Gingrey. Let me just conclude my remarks by saying 
that----
    Mr. Abercrombie [continuing]. Because you are such a good 
guy.
    Dr. Gingrey [continuing]. I think it is ludicrous to say 
that upgrading F-22s is more important, the existing fleet, 
upgrading them, is more important than buying additional 
planes. I mean, this is the most highly sophisticated tactical 
fighter that we have ever developed, and I mean, the upgrading 
of the existing fleet is not more important, in my opinion, 
than buying more.
    And with that, Mr. Chairman, I will yield back. I see the 
red light has come on.
    Mr. Abercrombie. That is a good point.
    We will pursue this obviously further in the course of the 
hearing and perhaps afterward, Mr. Young. The points are well 
taken in terms of trying to establish where we are going to go 
in terms of recommendation.
    I appreciate, again, trenchant analysis.
    Mr. Smith is next.
    Mr. Smith. Thank you, Mr. Chairman.
    First of all, let me just say we have more programs to fund 
than we have money to fund them. And that makes for some very 
difficult choices, which we understand on this committee quite 
well. We appreciate the best information possible.
    I do want to ask a couple of questions about the recent 
tanker decision. I know we have other hearings coming up this 
week that will focus on that directly. But it is just a lot of 
information that we can't quite get access to at this point, so 
we are looking to take this opportunity to get some answers.
    I think the biggest question I have is on the request for 
proposal (RFP) for this, because the reason I think everyone 
was so surprised is originally when the RFP was put out, it 
seemed to fit, you know, what Boeing was proposing with the 
767, a more medium-sized tanker. In fact, I think there was a 
point at which the Airbus consortium was saying because of the 
RFP they were probably not going to submit a proposal, arguably 
because they couldn't meet the RFP that was described.
    And then we here on this committee and elsewhere started to 
feel some lobbying pressure for changes in the RFP and it 
happened. It got changed in the middle of the game, which is a 
little bit unusual. And I guess the question I am asking is, 
you know, why the change? Why did the Air Force all of the 
sudden go from thinking that the medium-sized tanker--and there 
are pros and cons in terms of costs and a variety of different 
items. I would note, you know, connected to my earlier comment 
about we have so many programs, we can only afford so many--
here we went with the higher-cost option. Which, of course, 
only makes that problem worse.
    And so the question I have is, why did the RFP change in 
the middle and what is, sort of, the argument for the bigger, 
more expensive tanker as opposed to the medium-sized one that 
the original RFP had asked for?
    Secretary Young. I hope we don't tailor RFPs to products. 
That is wrong. We tailor RFPs to capabilities. That RFP was 
tailored to capability. The companies had a chance to respond 
to the draft RFP and make comments about things they thought 
were flawed in it, and the government could adjust or not 
adjust.
    So at the end, both companies accepted the RFP and proposed 
products against that RFP that they thought would be capable. 
Both companies did an excellent job, provided high-quality 
proposals and high-quality products. I think as more 
information is available, it is going to become clearer to you 
that the higher-cost product was not selected. Both products 
did meet the requirements and capabilities and the Department 
did its very best to evaluate two very high-quality proposals 
with excellent dialogue with both industry partners, and now we 
will continue the process of explaining how we made that 
choice.
    Mr. Smith. Understood. We look forward to it.
    I guess on the higher-cost item, it is a higher per-copy 
cost and it is also higher maintenance once you get it, to 
operate it. So I guess I am puzzled by you saying it is not the 
higher-cost choice.
    Secretary Young. I think the Air Force will over time talk 
to you about it, but the proposals we have in hand do not 
support the suggestion that a higher procurement cost item was 
offered.
    Mr. Smith. Okay. And did you consider the subsidy issue? 
Because one of the things that we are really wrestling with 
here is we are starting a WTO case against Airbus for unfairly 
subsidizing in competition against U.S. products. Obviously, 
the case is still in development, but for years it hasn't been 
terribly debated that Airbus is subsidized. At a minimum, you 
know, they have a bank out there that they can take risks 
against that they know will cover them, which is no small item.
    So I guess how do we balance within the government here the 
fact that we on the one hand are complaining about a subsidized 
competitor, and then on the other hand giving that subsidized 
competitor a contract, which arguably part of the reason they 
are able to keep their costs down is because they are being 
unfairly subsidized?
    Secretary Young. Again, the laws and regulations don't let 
me address really in any way a subsidy issue that will be 
settled, as you know, in another forum, on a nation-to-nation 
and international forum.
    What we evaluated was products that were proposed. I did 
have a discussion with the Air Force to try to make sure--and I 
would do this in any program, it is not just this particular 
program. We don't want industry to buy into programs, because 
usually that comes back to haunt us in terms of increase in 
cost and other factors.
    My understanding is that the Air Force has assessed both 
teams' proposals. Both teams' proposals present accurate 
assessments of their costs. And both proposals, I will tell 
you, include profit for both makers. So we believe people 
proposed their costs plus profit. We evaluated those 
performance and those cost benefits to the government.
    Mr. Smith. So just so I can clarify, your decision 
therefore was based in no way on the subsidy issue, whether 
they are subsidized or not? So in essence, what you are saying 
is, if that is an issue of public policy, then it is an issue 
of public policy that Congress will have to address. It was not 
addressed in your original decision. And I guess the same can 
be said on the domestic issue that was raised earlier, I 
forget--I think one of my colleagues raised that issue--that 
that too was something that, within your parameters, you are 
not allowed to assess.
    So, again, if that was an issue that was important to this 
country, it is something that Congress would have to deal with.
    Secretary Young. Again, we don't--procurement rules and 
regulations don't do that. We seek to assess the valid cost of 
offers from competitors, and that is what we evaluate. What 
we----
    Mr. Smith [continuing]. And so subsidies don't become a 
part of that. If we think it will cost them money that they 
didn't propose, the government assesses a higher cost to that 
proposal and----
    Secretary Young [continuing]. Well, to the extent that you 
are suggesting subsidies let them lower their costs, I am 
telling you the government independently assesses their likely 
costs and we grade proposals on their likely cost, not their 
subsidized cost.
    Mr. Smith. Understood, but wherever the money comes from, 
you know--I understand what you are saying, but the subsidy is 
not something that you consider in that situation, because what 
difference does it make to you if they--if they can deliver it 
for that cost, however they get there, then that is okay.
    Secretary Young. No. We assess what it is going to cost 
them, not what they propose it to cost. So if they find a way 
to eat costs, and I have had other competitions where companies 
come in and say we will put X-hundred million dollars on the 
table. We don't generally assess their contribution. We assess 
what it is really going to cost them to do the work.
    And I would point out, too, this is a bigger global policy 
issue, because we do have defense products that compete in 
foreign markets very successfully that were clearly developed 
by the U.S. taxpayer.
    Mr. Abercrombie. That is the end of discussion.
    Mr. Smith. My time is up. I apologize.
    Mr. Abercrombie. That is all right.
    Mr. Smith. Your first answer to that question didn't seem 
to jibe with the second answer to that question, but I will try 
to get greater clarity on that before our hearing later in the 
week.
    Thank you, Mr. Chairman.
    Mr. Abercrombie. Thanks, Mr. Smith.
    Secretary Young, before I go to the next member, for 
purposes of the record, could you clarify your role and your 
mission in the selection process you just discussed?
    Secretary Young. Absolutely. Mr. Chairman, I greatly 
appreciate the chance to do that.
    This was a Department of the Air Force source selection 
process. I am the milestone decision authority for the program, 
so I approve the milestones that let the program go forward, 
but I do not have a role in the source selection.
    I did, because of the great interest here, ask part of my 
Acquisition, Technology and Logistics (AT&L) team to observe 
the source selection process and help the Air Force, because it 
is so important to the Nation that we successfully conduct 
these source selections.
    So I have information from observing and watching and 
making sure the process was well executed, but I am not the 
source selection authority. I did not have an impact on the 
source selection.
    Mr. Abercrombie. But you are familiar with what was 
required, as the acquisition Under Secretary, right?
    Secretary Young. And based on feelings----
    Mr. Abercrombie [continuing]. So you can speak with 
authority on that part of it?
    Secretary Young. Based on a feeling that they had well-
executed a source selection process, I did approve the 
milestone B that would let them move forward and award that 
contract.
    Mr. Abercrombie. So, again, for purposes of our record here 
today, you believe that--regardless of whether the process was 
good or not, I guess that is going to be in dispute at some 
point, but from your--is it fair to say, then, that in terms of 
the specifications, that you were satisfied that both 
competitors were addressing the specifications as you outlined 
under your authority? Is that correct?
    Secretary Young. Both competitors addressed the 
specifications the Air Force issued that have been approved by 
the JROC. And in granting the milestone, I agreed that they 
were valid specifications.
    Mr. Abercrombie. Okay. Fine. Thank you very much.
    I think next will be Mr. Miller.
    Mr. Miller. Thank you, Mr. Chairman.
    Question to the chairman, I just want to make sure, my 
colleague from Washington state kind of ran over. That won't go 
against my time, will it, sir, Mr. Chairman?
    Mr. Smith. I apologize.
    Mr. Miller. I know the answer anyway.
    And I understand we are going to have a briefing, part of 
this committee, tomorrow, on tanker.
    I do want to comment on my colleague from Missouri, who has 
since left the room. Both competitors in the tanker program 
were American companies----
    Mr. Abercrombie. Time is up. [Laughter.]
    Mr. Miller. The question I have for you, Mr. Secretary, 
regarding the Joint Strike Fighter, yesterday there was a 
defense news article where Israel announced that they possibly 
intend to switch its procurement plan from the F-35A to the F-
35B short takeoff, the short take off and vertical landing 
(STOVL) version, designed for the Marine Corps.
    Israel plans to purchase up to 100 of these fighters. What 
would the impact be to the Marine Corps estimated initial 
operation capability date of 2012 if in fact Israel changed its 
procurement plans and went with a STOVL version?
    Secretary Young. I don't think it would be any impact. The 
Marine initial operational capability (IOC) is very quick. It 
is based on an initial procurement of the first airplanes. My 
belief is that any procurement by other nations, including 
Israel, would be a little further down the line. It might have 
an impact further down the line on the rate at which the Marine 
Corps build inventory, but not on the IOC.
    Mr. Miller. Would the additional hundred aircraft added to 
the 35B line delay delivery of the 35A?
    Secretary Young. No, sir. I don't believe that.
    Mr. Miller. I have a question, and this may be a little bit 
out of line, but there is a concern within the civil 
engineering support agency regarding heat problems with 
concrete on runways at basing airfields and outlying airfields. 
What is the Air Force doing in regards to making sure that the 
airbases that these airplanes are going to be at will have the 
appropriate--the Portland Cement apparently, the heat that is 
generated by the engines creates a problem whereby the runways 
degrade very quickly.
    Can you speak to that?
    Secretary Young. I can't. I would rather give you a better 
answer for the record. I do think that you are correct that the 
STOVL will put some additional loads on the runway materials, 
and we will get you a better answer for the record.
    Mr. Miller. Thank you.
    I yield back.
    Mr. Abercrombie. Are you going to provide an answer later 
on that? Is that okay?
    Mr. Larsen.
    Mr. Larsen. Thank you, Mr. Chairman.
    Mr. Abercrombie. Mr. Miller didn't take all his time, so 
you have extra.
    Mr. Larsen. Yes, I am assuming I get Mr. Miller's time in 
addition to mine.
    Mr. Abercrombie. Another Washington state guy.
    Mr. Larsen. Thank you, Mr. Chairman.
    I want to return to the tanker issue, Secretary Young.
    Mr. Abercrombie. Okay. Now your time is up.
    Mr. Larsen. So I will be as quick as I can.
    And this is less about contractors and more about impact on 
trade policy. You may not have an answer to it, but I think we 
need to--I think committee members and House members need to 
understand this, because the implications of the decisions for 
U.S. trade policy is important. The U.S. Government has 
determined that E.U. subsidies to Airbus are a clear violation 
of the WTO rules and that now is before the WTO. So this is a 
free trade argument against the tanker decision.
    The President himself has said that European nations should 
end subsidies to Airbus and instructed at the time U.S. Trade 
Representative (USTR) Bob Zoellick to ``pursue all options'' to 
end these subsidies. And one estimate, according to Trade Case, 
puts the European subsidy for the A330 and 340 programs at $5 
billion. This is for one of the platforms that the Air Force 
itself selected.
    So while this WTO case is pending now, another branch of 
the same Administration would send a conflicting message by 
offering to the European Union a $35 billion reward for the 
same planes that we say they have illegally subsidized, a 700 
percent return on investment for European taxpayers.
    So I am wondering if the U.S. case--if the U.S. wins this 
case pending before the WTO, would our government seek 
retaliatory actions if doing so would increase the cost of the 
tanker that our Air Force needs, because they have selected the 
Airbus tanker?
    And so the Air Force decision, whether or not you had 
anything to do with it, I just want to be sure you understand 
where I am coming from, puts this Administration, our 
Administration in a potential bind: live with the tanker 
decision or exercise its rights and obligations to enforce 
trade rules.
    It seems to me the Administration is right now on a 
collision course with itself on this issue. Not as much as 
Congress having to redefine this decision, but the 
Administration has to define and redefine the decision it has 
made. So where one agency, the USTR, at the direction of the 
President, is arguing that these subsidies are illegal, the Air 
Force now is buying these subsidized aircraft.
    Do you know if the U.S. Air Force agrees with the 
President's view that these subsidies are illegal?
    Secretary Young. I think I would ask the Air Force, but 
again, that is a different forum and a different set of issues 
about domestic trade. This was a product proposed to the 
Defense Department and evaluated under a fair and consistent 
set of ground rules.
    Mr. Larsen. I understand, but the policy implications go 
beyond the decision that the Air Force makes. The policy 
decision could interfere with our ability, the U.S. 
government's ability, the pursue trade remedies under the trade 
rules that we ourselves support.
    I just want to make that point, and I understand where you 
have to come from on that and where you are coming from on 
that. But can you assure the committee that the Airbus' 
proposed cost for development of the A330 and the KC-30 has in 
no way benefitted from the very subsidies that the U.S. 
Government is currently suing the European Union over at the 
WTO?
    Secretary Young. I sought to have that discussion with the 
Air Force to a level of detail. I believe the Air Force 
technical team has looked very carefully. They have cost 
insight into both proposers. And they believe that both 
proposers proposed their legitimate cost and profit and that no 
one decided to take losses or use corporate capital to deliver 
a product to the Air Force.
    Mr. Abercrombie. Would you yield a moment?
    Mr. Larsen. Yes, for a moment. I have a few more questions, 
Mr. Chairman.
    Mr. Abercrombie. For purposes of clarification, under the 
acquisition part of your title, in answering Mr. Larsen I want 
to make sure that it is clear for the record, do you take into 
account, or did you take into account possible cost variations? 
Surely the Air Force was aware, or you must have been aware, 
that there is this dispute that Mr. Larsen has outlined. Did 
you take that into account in making the decision as to whether 
or not if there was an adverse ruling it would change the cost 
figures?
    Secretary Young. Because the proposal evaluation teams did 
not have a way to assess that probability or the impact or 
other things, I do not believe it was evaluated in the proposal 
process, that there might be tariffs and penalties through 
that----
    Mr. Abercrombie [continuing]. I am afraid that might turn 
out to be a real flaw.
    Thank you.
    Mr. Larsen. Mr. Chairman.
    Secretary Young. Probably at some risk to myself, I would 
add one comment, and I--the members will hear this, but there 
is a cost difference between both proposals, so there----
    Mr. Abercrombie. I won't carry it further. That is more of 
a reason to take into account whether an adverse ruling would 
play into it.
    Mr. Larsen's time.
    Mr. Larsen. Mr. Chairman, if I may, I will just finish up 
here, seeing the red light is on.
    Mr. Abercrombie. That is all right. You can take another 
minute.
    Mr. Larsen. Thanks.
    In 2002, the Air Force publicly discussed its significant 
criticism of the KC-30 tanker, stating in a release that the 
KC-30 increase in size does not bring with it the commensurate 
increase in available air refueling offload. And the Air Force 
went on to say that ``the aircraft would demand a greater 
infrastructure investment and dramatically limit the aircraft's 
ability to operate effectively in a worldwide deployment.''
    In the six years since that statement, the KC-30 hasn't 
gotten any smaller and the availability of longer strength in 
runways around the world certainly hasn't grown. So at what 
point in the process did the KC-30 significant liabilities as a 
tanker become assets?
    Secretary Young. Those are questions I think the Air Force 
can ask. They were considered in the----
    Mr. Larsen. Or can answer.
    Secretary Young. Can answer. Sorry.
    Mr. Larsen. Thank you, Mr. Chairman.
    Mr. Abercrombie. You bet.
    Is the answer clear on the question of whether it was taken 
into account?
    Mr. Larsen. The subsidies?
    Mr. Abercrombie. Yes.
    Mr. Larsen. Yes. It is clear that I don't have an answer 
and it is clear that we will need to talk to the Air Force more 
specifically about it. That is what I understood the secretary 
to say, and I am satisfied that we will be talking to the Air 
Force later today and tomorrow about that. I appreciate that.
    Mr. Abercrombie. Again, for purposes of the record, Mr. 
Young, I just want to make sure. I am not talking sides in 
this. I want to make sure I have the correct information.
    Am I correct that you answered that to the best of your 
knowledge the decision did not take into account the possible 
cost changes should there be an adverse ruling on the question 
of subsidy?
    Secretary Young. That is correct. The proposals were 
evaluated based on what we thought their probable costs would 
be.
    And one thing I would like to ask the----
    Mr. Abercrombie. Absent that adjudication.
    Secretary Young. Right. I appreciate your help, Mr. 
Chairman. I have asked that question. I didn't get it in 
advance of the hearing. If I could, I would submit for the 
record.
    Mr. Abercrombie. Sure.
    Secretary Young. I do not know whether tariffs or other 
penalties imposed through that trade process would be allowable 
charges on a contract, so it may not be a cost that can be 
allowably attached.
    Mr. Abercrombie. Maybe you can look into it and get back.
    Secretary Young. We will get you that answer, sir.
    Mr. Abercrombie. I did say to the best of your knowledge. I 
am not trying to put you on the spot so much as I am trying to 
get an answer, because it affects what we do here.
    Mr. Larsen. Mr. Chairman.
    Secretary Young. It is not clear to me that fines and other 
such penalties are allowable charges on a DOD contract. We will 
get you that answer for the record.
    Mr. Abercrombie. Okay.
    Mr. Larsen. Mr. Chairman, I appreciate that and appreciate 
getting the answer for the record.
    I would just say, if it is not allowable under the 
contract, then why do we have trade rules and why are we 
bringing cases to the WTO? We can't even enforce the trade 
rules that we have, and that is why this is--if we can't get 
these penalties----
    Mr. Abercrombie. I understand.
    Mr. Larsen. Thank you.
    Secretary Young. I think the answer to that question is, 
the penalties will be paid by a company if the U.S. Government 
is successful, but they just can't be charged to U.S. 
Government contracts.
    Mr. Abercrombie. Well, we will find out.
    Thank you.
    Mr. Bartlett is next.
    Mr. Bartlett. Thank you very much.
    Mr. Young, I mentioned the Defense Science Board's 
recommendation that you use the fully burdened cost of fuel in 
your programs. Does a fully burdened cost of fuel include the 
cost for extra personnel and equipment, like the helicopters 
that fly overhead to protect the convoys in delivering fuel to 
Iraq and Afghanistan?
    Secretary Young. Yes, Congressman. There was a Program 
Analysis and Evaluation (PA&E) study that sought to assess the 
delivered cost of fuel. And as you rightly said, some 
circumstances that would include helicopter delivery. It is 
more costly. And so we are seeking, I believe, to apply the 
burden of cost of fuel on a situation-appropriate basis, if you 
will, to the extent we can.
    Mr. Bartlett. I understand that that can be as much as $300 
a gallon for diesel in the high mobility multi-purpose wheeled 
vehicle (HMMWV) on the ground?
    Secretary Young. That was not the conclusion of our program 
analysis and evaluation office. I have heard numbers like that. 
They concluded a smaller number. But there is a significant 
premium when you have to delivery fuel by helicopter to far 
forward deployed ground forces.
    Mr. Bartlett. As our chairman mentioned, oil this morning 
was $109 a barrel. Our country uses 22 million barrels a day. 
That is 1/4 of all the oil used in the whole world is used in 
our country. DOD uses--our government uses less than 2 percent 
of that; DOD most of what the government uses.
    If there is only one barrel of oil left in our country with 
your priorities, you would have that barrel of oil. In spite of 
that, the military is the most responsible entity in our 
country in addressing energy. Thank you very much for your 
foresight.
    Fifty-two years ago, the 8th day of this month, M. King 
Huppert predicted that the United States would reach its 
maximum oil production in 1970. Right on schedule, that 
happened. In 1979, he predicted that we would be reaching--the 
world would be reaching its maximum oil production, about now.
    Fifty-one years ago, the 14th day of this May, Admiral 
Hyman Rickover gave a speech which may very well be the most 
insightful speech given last century to a group of physicians 
in St. Paul, Minnesota. In his speech, he mentioned that we 
were then 100 years into the age of oil. He had no idea how 
long the age of oil would last, but he said the length of time 
it lasted was important in only one regard, and that was that 
the longer it lasted, the more time we would have to plan for a 
transition to non-fossil fuel energy sources.
    I just came recently from a political retreat. We had seven 
breakout sessions. One of them was on neighborhoods. None of 
them was on energy.
    Can you help me understand the denial and the silence on 
energy when oil is $109 a barrel?
    Secretary Young. Well, Congressman, there are probably 
several things to say. I will try to be quick and consistent 
with the chairman's request.
    One, I appreciate you noting the Department's efforts. We 
stood up a task force, great collaboration amongst the services 
and Office of the Secretary of Defense (OSD) on what we are 
already doing in terms of geothermal, wind, solar, and what 
could be done.
    Secretary England recently had a deputy advisory working 
group with all the Unders and the Vice Chiefs and asked that 
task force to look again at what things the Department could do 
so we could consider that as part of program of memorandum (POM 
10). So I believe the Department will keep trying to honor your 
request that we be good stewards of energy.
    Within that, you have been a leader in focusing the 
attention of the enterprise on this issue. The price of oil 
will focus us further on it, because I forget what the number 
is, but it is something, roughly $1 billion plus, of impact to 
the DOD budget correlated with a dollar plus increase, $10 
increase, in a barrel of oil.
    And so it is consuming department resources and putting 
pressure on the program. So the prices you all highlight this 
morning are going to redouble the Department's attention on 
energy. The Secretary has already asked us to do that.
    Mr. Bartlett. Thank you, Mr. Chairman.
    Mr. Abercrombie. Mr. Sestak is next.
    I can't call you Admiral Sestak while you are for Senator 
Clinton, you know. [Laughter.]
    Mr. Sestak. I don't know what to say, Mr. Chairman.
    Mr. Secretary, I had a question. For a while there, there 
was going to be a B-52 standoff jammer. Some people called it 
the EB-52. And I guess now it is kind of called the B-52 core 
component jammer. But this was to be an instrumental part of 
making sure against the fifth generation that even F-22s could 
survive. What happened to it, if it was so key, as the EA-6Bs 
are now disappearing?
    Secretary Young. I think, as you are probably aware, the 
Department budget proposal change came forward to terminate 
that effort for costs. The Department is revisiting that effort 
in light of----
    Mr. Sestak. So it is a capability that we need?
    Secretary Young [continuing]. Development efforts in the 
world. And I would encourage--I know the committee had sought 
to hear from the Program Analysis and Evaluation Office, and 
you should do that. I think in considering, again, options for 
investment, they would put improving our electronic attack 
capability near the top of the list versus options like buying 
more tactical aircraft or other things.
    Mr. Sestak. So it is a capability we need?
    Secretary Young. It is a capability we need.
    Mr. Sestak. And a capability we need for those most 
demanding scenarios, potentially Western Pacific.
    Secretary Young. Absolutely. Including the fifth generation 
fighters.
    Mr. Sestak. But it is not in the budget. And the----
    Secretary Young. Portions of it are, as you know, through 
the----
    Mr. Sestak [continuing]. Would you say it is kind of on 
life support right now in the budget?
    Secretary Young. Well, not the EA-18G program, but the 
other capabilities----
    Mr. Sestak. Yes, but the G, the Growler, is not an 
expeditionary aircraft, like the EA-6B. And the ace of radar on 
the F-22 doesn't even come close to the capability that we are 
talking about. I know there are other things there, but the 
core--would you agree that right now this was a core component 
that was needed for the most demanding of scenarios, this 
standoff jammer, but right now, as the A-6Bs go away, that is 
really on life support and it is the missing gap that needs to 
be addressed?
    Secretary Young. Well, there was an analysis of 
alternatives (AOA) that said we needed a standoff jammer, and I 
think the Department is constantly doing what you would expect, 
and that is looking at----
    Mr. Sestak. Just a simple question. Is it needed for that 
scenario?
    Secretary Young. The Department is going to review that 
analysis and see----
    Mr. Sestak. But you are not sure if it is needed?
    Secretary Young. I would not say today we absolutely have 
to go put that right back in the budget.
    Mr. Sestak. Got it.
    Secretary Young. We need additional electronic attack 
capability.
    Mr. Sestak. All right. In that area? Standoff jammer? It is 
somewhere.
    Secretary Young. To enable the concept of operations with 
tactical fighters.
    Mr. Sestak. The second question I had is, I have always 
been struck by the questions that my colleague from Georgia had 
mentioned, about the F-22 and the need for such a high-end 
aircraft. To some degree, the Navy has always prided itself on 
being forward deployed, always ready to be the first to go.
    To some degree, you see the Air Force with the argument it 
needs this really compelling aircraft, the F-22, as it goes 
against the most demanding fifth generation, you know, from the 
Russian T-50's or the Chinese, even the J-12s that are coming.
    Why not the Navy? Strategically, how have we built--if this 
is so needed for that first in, why not the Navy? The reverse 
is, why does the Air Force have it and not the Navy? Or does 
the Air Force need it if the Navy doesn't?
    Secretary Young. I think, as you know, this answer is--the 
Navy can best address it. From my personal opinion, this goes 
back to things like the A-12. And I believe it is critical for 
the Navy to move forward with Joint Strike Fighter. Joint 
Strike Fighter does put that fifth generation aircraft 
capability in the hands of the Navy.
    Mr. Sestak. So you don't need any of the F-20's? Do you get 
my point? Strategically, it just seems as though we built--we 
have two air forces. One is supposed to be the first in. And 
the Navy air force tries to--you know, goes long range and is 
the first in. But we haven't given the Navy the capability you 
say the other service needs. It just seems to be a very large 
missing strategic----
    Secretary Young [continuing]. If we get Joint Strike 
Fighter in the hands of the Navy and Marine Corps, they do now 
have that capability.
    Mr. Sestak. To go in first?
    Secretary Young. Right.
    Mr. Sestak. So then why did we need the F-22?
    Secretary Young. I believe they are very comparable 
airplanes, and we would have to have a classified session to 
say it. People distinguish the two airplanes, and there are 
some distinguishing features like the widely publicized super 
cruise. But the truth is, they are both highly capable fifth 
generation fighters with fewer distinguishing features than 
people offer.
    Mr. Sestak. The operations and maintenance funding for the 
Air Force per--I am done.
    Mr. Abercrombie. I am sorry. We are out of time. Thank you. 
You can submit the question.
    Mr. Saxton is next.
    Mr. Saxton. Secretary Young, Mr. Sullivan, you heard me say 
in my opening statement that it seems to me that the amount of 
resources that you have to spend just simply go across the 
breadth of the needs that we have for various programs, 
including C-17 and F-22 and B-52 and JSF, et cetera.
    I would like to ask a question specifically on strategic 
airlift. When our program consisted of--our future program, our 
contemplated program, consisted of 180 C-17s combined with a 
fleet of modernized, I will say, C-5s, it was the Department of 
Defense's position that the requirement of this level of 
capability, reading from your words, actually, Mr. Young, was 
adequate to meet our needs within the realm of risk.
    I always disagreed with that, as many other people who are 
involved in strategic lift arena did. Then the requirement for 
this level of capacity was reexamined during the Nunn-McCurdy 
review of the C-5 reliability and enhancement re-engining 
program and the analysis of--or the Nunn-McCurdy breech I guess 
forced a decision, my words, that we would not re-engine the 59 
C-5As, leaving them modernized only partially with the new 
aeronautic equipment.
    Now the Department, in your testimony, Mr. Young, believes 
that 189 C-17s plus 52 re-engined C-5Bs and Cs and 59 C-5As, 
not re-engined, give us the capability to do strategic lift.
    Let me just ask Mr. Sullivan, have you looked at this, Mr. 
Sullivan? What do you think of this?
    Mr. Sullivan. Sir, we are in the process right now--in 
fact, I believe it is work that has been requested by your 
subcommittee, to look at exactly what you are putting on the 
table now. So I don't have any information at this point that 
would be helpful in this hearing, but we are planning to brief 
the committee sometime in the next six weeks or so on our 
findings that we find when we go out there.
    Mr. Saxton. Does it seem reasonable to you that if you take 
a fleet of airplanes and take away a modernization program from 
25 percent of it, more than 25 percent of it, that it would 
result in the same capability as the assumption was under a 
complete modernized set of almost 200 fully modernized 
airplanes?
    Mr. Sullivan. As I said, I don't have enough information to 
be intelligent about that now, but I think it does indicate the 
affordability issues that the Under Secretary is dealing with
    Mr. Saxton. Well, I agree, and I guess that is the point 
that I am continuing to try to make.
    Secretary Young. Could I offer a comment, sir?
    Mr. Saxton. Sure.
    Secretary Young. One important piece of that that we should 
bring you is the scenarios that drive the requirement, and 
those scenarios and that requirement is not what the Department 
needs every day. In fact, the Department needs substantially 
less than that every day. And that is why I think the Air Force 
has made a very good decision to move the C-5As into the Guard 
and Reserve, maintain them at lower capability levels. And then 
if we found ourselves in one of these major combat operations, 
surge that force, maintain it better, spare it and draw on it 
to meet the requirement. But on a daily basis, we don't need 
this requirement.
    Mr. Saxton. I couldn't agree more, on a daily basis. But 
when we go to war, we go to war.
    You further justify this assumption by stating that the KC-
45 tanker could be used for lift, and I guess I raise my 
eyebrows pretty high at that thought, because when we go to 
war, when we do need all our assets--when we go to war, 
presumably we are going to use all our tankers for tanker 
missions. And so I don't quite see where that gives us 
additional capacity to enhance the strategic airlift fleet that 
we have when we surge.
    Secretary Young. Well, I think----
    Mr. Saxton. Unless we are buying more tankers than we need.
    Secretary Young. The strategic airlift fleet in terms of 
numbers of pails and ton miles of requirement is driven by 
oversized and outsized cargo. And as you rightly say, any 
tanker does not contribute to the oversize and outsize cargo 
capability.
    Mr. Saxton. Okay. I appreciate your problems, by the way. 
Thank you.
    Mr. Abercrombie. Mr. McIntyre.
    Mr. McIntyre. Thank you, Mr. Chairman.
    Thank you, gentlemen.
    Mr. Secretary, in our committee's February 27 letter 
inviting you to testify today, you were asked to articulate 
your views of the required tactical Air Force structure 
compared to the programmed tactical Air Force structure, and 
whether you believed the programmed force structure meets the 
requirements for the national military strategy.
    However, from what I can tell this request is missing from 
your statement. Could you tell us why it is missing?
    And second, would you answer the question that we requested 
you testify about?
    Secretary Young. With regard to the tactical Air Force 
sufficiency?
    Mr. McIntyre. Yes, sir, compared to the programmed tactical 
Air Force structure.
    Secretary Young. I believe the Department has submitted a 
budget that provides an appropriate aircraft tactical Air Force 
structure. Changes have been made. As you probably are aware, 
the Navy has bought some additional F-18E/F for a near-term 
need, to make sure they have adequate tactical aircraft. But on 
the whole, it is a very capable force that has been proposed. 
In fact, some of the studies referenced today have determined 
that the DOD program or record force, with F-22s, Joint Strike 
Fighters and the other aircraft, is one of the most capable 
options before us in terms of analysis of different options, 
like more F-22s.
    Mr. McIntyre. So your comments would just rely on what the 
budget proposal has been? Is there any other comment you want 
to make about it regarding your role in it?
    Secretary Young. Other than what I--you know, it is 
critical to stay the course with this process, particular on 
programs like Joint Strike Fighter, because they do bring 
important fifth generation capability to the Navy and Marine 
Corps, as well as addressing the age of the Air Force's fleet.
    As you know, JSF is critical to the replacement of F-16s 
and a very large force in the Air Force.
    Mr. McIntyre. And the JSF is going to have capabilities 
also to help replace the A-10 Warthogs or Thunderbolt 2s?
    Secretary Young. I would probably like to defer to the Air 
Force. My understanding, subject to their correction, is that 
the Air Force intends to maintain the A-10 force for a period 
of time. The aircraft has structural life and it fills a niche 
capability for the Air Force that is important to them.
    Mr. McIntyre. All right. Are you able to comment on that 
Mr. Sullivan, or not? About the A-10's? If not, I will defer to 
the next panel on that question.
    Okay. Thank you.
    Also, some of the F-22s, there is a squadron that has 
already been deployed to an Air National Guard unit. Is that 
correct?
    Secretary Young. I am sorry, sir?
    Mr. McIntyre. There is a squadron of F-22s that have 
already been deployed to an Air National Guard unit. Are you 
aware of that?
    Secretary Young. I would have to let the Air Force address 
that. I am not sure.
    Mr. McIntyre. All right. Thank you.
    Thank you, Mr. Chairman.
    Mr. Abercrombie. Mr. Wilson.
    Mr. Wilson. Thank you both for being here and thank you for 
dealing with issues that are absolutely extraordinary.
    The different types of aircraft, the engines, trade policy, 
concrete, you really deal with very interesting issues, and I 
want to thank the chairman for the way this meeting is being 
conducted because it is really bringing out a lot of very 
interesting issues and I am very grateful.
    I represent the Marine Corps air station at Buford, a joint 
base, and so we are very proud of the squadrons we have there.
    Mr. Secretary, I am concerned, and I share the concern of 
my colleague from the far north of Wilmington, North Carolina, 
Congressman McIntyre, and that is that I have two charts. One 
is from the--a reflection of Navy shortfalls. And that possibly 
by the year 2017 there would be shortfall of 175 in terms of 
Strike Fighters.
    The other is even more stark, and that is from the--with 
the Air Force, reflecting a shortfall of 625 in 2020. With an 
overlay, we are obviously dealing with a shortfall of around 
750 fighters, which could be short in the year 2020.
    Again, I would like to ask what in your view is the ability 
of America to contend with the future forecast threats that we 
have around the world? How can we meet this challenge in the 
future?
    Secretary Young. I think the Department constantly, and we 
will do so as part of the POM 10 process, is assessing the 
scenarios that are most likely and least likely because some of 
the least likely scenarios are very dangerous. You have to have 
the capability against both scenarios.
    But we also have shortfalls in capability for the most 
likely scenarios. Some of those capabilities are in what the 
Department describes as Phase 0 and Phase 1 operations, the 
ability to engage nations and help them help themselves, 
training and other things.
    So I think as rightly has been said today, within a budget 
environment, we are trying to make a set of balanced choices. 
We believe many of the analyses within the Department say we 
actually have an excess of strike capability.
    We are continuing to modernize our fighter aircraft and our 
strike capability, but I will tell you that a lot of the models 
of the most likely scenarios say we have excesses. Some of the 
analysis you have seen is strictly how many squadrons, how many 
airplanes per squadron or wing or unit. And you assume you fill 
those gaps.
    But the Nation can't make decisions, I think, strictly on 
that basis. We need to make decisions based on capabilities 
that need to be bought with the budget resources Congress 
provides.
    Mr. Wilson. Thank you very much.
    Mr. Abercrombie. Thank you.
    Mr. Taylor.
    Secretary Young. Mr. Chairman?
    Mr. Abercrombie. Yes?
    Secretary Young. Could I--because of the importance and 
interest with Congressman Larsen here, I would--in the 
electronic age, we have been able to get an answer, and my 
answer from the Department is that WTO rulings cannot be passed 
along to the Air Force or the Department of Defense as a cost 
on a contract with the Department of Defense.
    So if there is a ruling and a penalty, it can't be passed 
along to us as a cost.
    Mr. Abercrombie. I am not sure what that means, though, 
when you say it can't be passed along as a cost.
    Secretary Young. Well, it means the company----
    Mr. Abercrombie. Oh, the company can't pass it along as a 
cost.
    Secretary Young. They will have to pay it. They will have 
to pay whatever is assessed as a fine or tariff----
    Mr. Abercrombie. I see.
    Secretary Young [continuing]. But it cannot be charged back 
to the United States government on a contract.
    Mr. Abercrombie. I see. Thank you.
    Secretary Young. So it would not change the cost of the 
proposal.
    Mr. Abercrombie. I got it. Excellent.
    Thank you. That is very helpful.
    Secretary Young. Sorry to interrupt, Chairman Taylor.
    Mr. Taylor. No. Thank you, gentlemen, for being here.
    It has come to my attention that a number of the B3 
aircraft that are being used in the counter-IED mission in Iraq 
have been grounded for structural problems. My question is, 
they are obviously important. So what is the plan to replacing 
those? Does the Navy intend to fix them? Is the Navy looking at 
alternative aircraft?
    In the few times I have stepped aboard a P-3, I was amazed 
by what appeared to be a large amount of space that really does 
nothing. It was obviously built for a different era.
    And so my question would be, in your analysis of 
alternatives, what other aircrafts have you looked at? For 
example, have you looked at the C20 Gulfstream? Have you looked 
at a C-12 to perform that mission? And how quickly can you get 
something in theater to take the place of the P-3?
    Secretary Young. You may be aware, Mr. Chairman, that a lot 
of work was done on that a few years ago. We had a competition 
and a source selection, and we are in the process of developing 
the multi-mission maritime aircraft, MMA. There were at least 
two--I don't remember the endgame, but I think at least one of 
the aircraft you mentioned was a competitor at one stage and 
dropped out.
    At the end, it was two companies, and the winning proposal 
was from Boeing. It is a 737-derived aircraft. It is about 
halfway or better--the next panel could answer your question--
in the development. The Navy is looking at whether we can 
accelerate MMA procurement, which is always dangerous, 
accelerating a development program, but because of the very 
issue you have raised, if we could accelerate MMA procurement, 
that could help.
    We will still have to do things to address the very issue 
you have also raised, and that will probably involve service 
life extension or other mods to some of the P-3s we have 
because of the capability they are providing.
    Mr. Taylor. Secretary Young, I hate to sound like the cynic 
I am, but I am not so sure you answered my question as far as 
the specific need to address the counter-IED mission that the 
P-3s were performing in Iraq that apparently is either being 
done on a limited basis or not being done at all. And rather 
than us having to come back again for what would be the fifth 
chapter--first the body armor, then the up-armored HMMWVs, then 
the jammers, then the MRAPs, I would sure hate to think that 
there is something that we need to be doing as a Nation that is 
not getting done in Iraq, like this mission.
    So what is being done to perform that mission? How much of 
a mission drop off have we had with the grounding of the P-3s? 
What is the plan to get us back up to where we were prior to 
the grounding of the P-3s?
    Secretary Young. A piece of this I think I would like to 
ask to be able to talk to you offline and make sure I 
understand, because I am worried about classification issues. 
But I will tell you Secretary Gates is aggressively trying to 
increase the number of intelligence, surveillance and 
reconnaissance, or ISR orbits, that are available.
    Some of the things that I think you are talking about, how 
we deal with IEDs, can be assisted by additional ISR orbits 
from unmanned aircraft. We have brought Joint Stars to bear on 
this capability, the P-3s. And so I would like to assure you--
in fact, there is an urgent effort to buy additional Predators 
and Global Hawks in the Department and that we find the issues 
are frequently, in this case, manning the pilots necessary to 
fly the aircraft and, to some extent, ground stations. But we 
do have aircraft and ground stations and we need a bigger 
pipeline of pilots, which the Air Force is working on and can 
talk to you about.
    I think we are attacking the issue. We can redouble our 
efforts and look at it. To go a lot further starts to want to 
talk about some classified aspects.
    Mr. Taylor. Why don't we do this, if you can get with me. 
As you know, we are not in next week. I became aware of the 
situation prior to Christmas, so this has drug on for at least 
2 months, and it might have been going on for sometime before I 
even became aware of it.
    So if you or someone from your staff could get with me this 
week, let me know what the mission was prior to the groundings, 
what percentage of that mission is being completed today and 
what is the plan to get back to at least where we were prior to 
the groundings of the P-3.
    Secretary Young. I appreciate the chance to----
    Mr. Taylor. And I appreciate you looking for a long-term 
solution and trying not to just have a single shot. But in the 
short term, I would certainly hope that no one is needlessly 
dying or losing limbs because we are trying to save a couple of 
bucks.
    Secretary Young. Yes, sir.
    Mr. Taylor. Thank you.
    Mr. Abercrombie. Mr. Young, I have a series of questions, 
too many to ask in the brief time that we have. I will give 
them to you. And I would like to have answers to them.
    But unfortunately, part of the question has to be with 
regard to Section 213 of the National Defense Authorization Act 
I mentioned before.
    It directed the Department to ensure, and I am quoting, 
``the obligation and expenditure in each fiscal year of 
sufficient annual amounts for the continued development and 
procurement of the two options for the propulsion system of the 
Joint Strike Fighter.
    In your written testimony and then your commentary, you say 
that the Department ``will ensure that in each fiscal year 
where funds are appropriated, there is obligation and 
expenditure of sufficient amounts.''
    Now, do you believe this answer is consistent with the 
intent of Congress to take the actions necessary to develop and 
procure the two options for the Joint Strike Fighter?
    The reason I am asking the question is, I am not trying to 
trick you. I am not trying to get in an argument. I am very, 
very concerned that Congress be obeyed by the executive. I 
don't want to go into a long dissertation about signing 
statements and unitary Presidencies and imperial--the progress 
of the imperial Presidency. Some people seem to think we are 
electing a king. I don't want to pursue that today.
    But I will tell you, I will pursue up to and including 
contempt if I have to the Defense Authorization Bill being 
obeyed. I have got my copy of the Constitution in my satchel, 
which I carry with me, and believe me, I read it. And until 
somebody takes my place or the place of all the members here in 
the legislature, when we put a bill through, absent a veto, by 
God the executive is going to obey it.
    And so I don't--I want to know how you interpret your 
phrase in terms of what the Congress requires? Because you 
don't have this in your budget material.
    Understand, I am not trying to be combative with you. I am 
defending the principal of congressional authority here. And I 
am not asking you to comment on whether you think it is a good 
policy or not.
    Secretary Young. Yes, sir.
    The Department's reading the law in a literal manner, so we 
are obligated in expending the fiscal year 2008 funds Congress 
provided, which does do exactly what you said, make progress 
toward having a second engine source.
    The 2009 budget, as you know, does not have those funds. 
And it is within the prerogative of the President to make those 
financial choices about----
    Mr. Abercrombie. It is not. It is not her prerogative. He 
has no prerogative. His prerogative is to obey the law.
    There are no funds in there. It is required to have them. 
Is it the Secretary's position that he will not obey the law?
    Secretary Young. It definitely is not the Secretary's 
position.
    Mr. Abercrombie. Then why aren't the funds in there?
    Secretary Young. Again, I believe that literal reading says 
we will obligate and expend. So obviously, if Congress 
appropriates funds, authorizes and appropriates funds in fiscal 
year 2009, we will continue to execute the second engine 
source. It is not as clear, given other constraints on the 
President in terms of things that had to be bought for the 
Nation that the law mandates that he budget for that program at 
the expense of other capabilities.
    Mr. Abercrombie. Okay. Then your position is, and the 
secretary's position, is that so long--that you are going to do 
this only so long as the Congress appropriates the funds.
    Secretary Young. Well, the law requires us to obligate and 
expend the funds, and we will certainly obey the law.
    Mr. Abercrombie. So even though we have ordered you to do 
it, then you are saying, well, provided you give us the money. 
Is that fair?
    Secretary Young. I think that is the choices that are made 
this year in the President's budget.
    Mr. Abercrombie. Okay. I will take that as----
    Secretary Young [continuing]. We will have to revisit.
    Mr. Abercrombie. Okay.
    This next may be a policy question. In our February 27 
letter inviting you here, we asked you to articulate the views 
required of tactical air force structure compared to the 
programmed tactical air force structure and whether you 
believed the programmed force structure meets the requirement 
of the national military strategy. I don't think--are you going 
to send us an addendum? I realize that could be a rather 
theoretical construct, and that might not have been appropriate 
for your testimony.
    Secretary Young. I am not the perfect requirement source. I 
would, you know, as I commented earlier, I believe that the 
force structure that is in the President's budget, many in 
that--we will conduct additional analysis on POM 10. I will 
offer you a longer answer for the record.
    The short answer is indeed we actually in the Department 
frequently conclude we have significant strike capability and 
could take risk in these spaces relative to the other needs we 
have in the Department.
    Mr. Abercrombie. That is a good short answer, but if you 
could elaborate on it in an addendum, I would be appreciative.
    Secretary Young. Yes, sir.
    Mr. Abercrombie. Did you want to speak, Mr. Sullivan?
    Mr. Sullivan. Yes. I would like to comment that Mr. 
Wilson's questions, as well as your own now, that are around 
all of this F-22, F-35 force structure issues, you know, this 
may be stating the obvious, I am not sure, but one of the 
problems I think that the Under Secretary has and the 
Department of Defense has and I guess the Nation has is that 
the F-22 is too expensive and the Joint Strike Fighter is 
struggling through development right now.
    One of the problems that I think they have with funding the 
alternate engine program is because there are other priorities 
that have cropped up on the Joint Strike Fighter program 
because they have been struggling with the design of that 
aircraft.
    The management reserves that have been depleted over the 
past year mostly have been because of inefficiencies in 
manufacturing. All of the problems that you get when you have 
an unstable design going forward.
    They really can't afford to fund anything else right now. 
They are trying to take are of short-term funding risk, and in 
the long term that may exacerbate more of the problems we have 
with the tac air force structure, because a Joint Strike 
Fighter could be looking at further delays in the future. That 
was a point in our written statement.
    Meanwhile, the F-22, the Under Secretary here has 
affordability to think about. The warfighters have a 
requirement and a need, but it tends to be unconstrained by 
budgetary considerations. So when the Department has to begin 
to prioritize and they have to constrain themselves with what 
is available in the budget, these are very difficult decisions 
that are more or less forced on the Department because most of 
these programs tend to get out of control.
    Mr. Abercrombie. That is an excellent summary. And I can 
see Mr. Young sitting there saying please don't help me 
anymore.
    Mr. Young, do you want to go into--that fits in the context 
of Mr. Sullivan's testimony, when he spoke about the $600 
million spent too quickly. This gets to a question I was going 
to ask. And also the cost schedule continues to degrade. And 
that was actually the last question I was going to ask in this 
series, and I will submit the others to you.
    In that context, in consideration of what Mr. Sullivan just 
said, is that part of the difficulty that you are experiencing 
in terms of budget?
    Secretary Young. I really appreciate the chance to comment. 
I definitely agree with the latter comment about the 
unconstrained requirements process, you know, that forces us to 
work within a budget. And that is my request to the team. I 
want us to work within a budget, because if I have to take 
money from some other place, that denies capability in another 
area to finish something I promised to do for a cost.
    We are trying very hard to deliver Joint Strike Fighter 
within the budget. We have had some challenges. The company has 
not met schedules in the past. We have made choices and 
continue to manage. All the Members of this committee are 
familiar with these issues and programs, and I want to make 
sure I give you the right impression.
    This is a well-managed, well-run program that is working to 
delivery cutting edge fighter capability. We do believe we will 
have to put a modest amount of additional funds in the program 
to finish system development and demonstration (SDD). But we 
are----
    Mr. Abercrombie. But you are deleting two test aircraft.
    Secretary Young. Pardon me?
    Mr. Abercrombie. You are deleting two test aircraft.
    Secretary Young. And there is a--we could have a good 
discussion about that. You know, there was an original test 
program that didn't consider all the things we really needed to 
see. As we have gotten more mature in the program and more 
mature in the capabilities the aircraft delivers, the program 
team built a very solid test plan. That test plan said we did 
not need to buy the two mission systems aircraft because we 
would offload some of those testing events onto ground test 
facilities, onto what they call a cat bird, but it is a flying 
simulator aircraft of a JSF that has the radar and other 
systems onboard. And as you know, flight testing on the actual 
aircraft is very expensive.
    I believe these were valid and pragmatic choices by the 
Joint Strike Fighter to try to manage within their resources, 
delete these mission systems aircraft, conduct those tests with 
ground systems or this aircraft simulator and use the other 
aircraft for what they call flight sciences or the actually 
flight testing and envelope expansion.
    So people criticize it, but the truth is it is a more 
thoughtful and balanced test program that we believe we can 
execute.
    Mr. Abercrombie. Mr. Sullivan.
    Mr. Sullivan. I was out to Lockheed Martin this past 
summer, and at that time I sat down and talked with the Program 
Executive Officer (PEO), General Davis, and Lockheed Martin 
officials, and got kind of a top level briefing on what they 
are doing to try to make this risk reduction program work.
    And I would agree that they have worked very hard and have 
been very diligent, and the plan, you know, they believe they 
have a very sustainable plan that they can work.
    However, having said that, we have been here before. We 
have seen this movie before. In fact, if you look at the F-22 
program, F-22 program kept a lower management reserve than 
Joint Strike Fighter did, got in trouble with it and started 
the same sort of things that they are doing on the F-35 today.
    So looking--and I would also, I guess, submit that when you 
look at the director of testing and evaluation, when you look 
at the Cost Analysis Improvement Group (CAIG) analysis, when 
you look at analysis from the Defense Contract Management 
Agency and the systems engineering group within the Pentagon 
itself, I think most of them disagreed with going forward with 
this plan because of that risk.
    I think everybody in the test community and in systems 
engineering--it is very fearful when you see test resources 
beginning to degrade to make up for problems that you are 
encountering now.
    Mr. Abercrombie. You say problems. We are talking about 
variants here, right? You are talking about the short takeoff 
and vertical landing variant and the aircraft carrier variant, 
right?
    Mr. Sullivan. Right.
    Mr. Abercrombie. Well, what about the idea that you stop 
where you are? Is that variant--I mean, is it--we have got 
three variants. Maybe this expense has--what if the laws of 
physics aren't working the way you would like them to? I mean, 
we have already had two tests where it didn't work. I am told, 
well, you are going to add covering or something. You know, 
there are all kinds of engineering activity. But what if it 
isn't working?
    Mr. Sullivan. My comment on that is maybe not--I am not an 
expert on it, but looking at the programmatics on this, like 
the way that we have, I would say this program is far enough 
along, these variants, this is a program that is going to 
create these aircraft and the aircraft will eventually be able 
to perform, very similar to the F-22 and what it went through.
    I think the point that we are trying to make is that the 
program is looking at some really tough times coming up.
    Mr. Abercrombie. Yes.
    Mr. Sullivan. I mean, you know, when you take two articles 
out of the test program, when you--when you degrade the test 
points, when you look at, you know, they talk about build up 
points and then end points for the test program, they have gone 
in, in an attempt to make the test program more efficient and 
get rid of redundancies that they think are not necessary, 
which they are making judgments on that and they are dealing 
with risks, but they have got I believe around I am going to 
say 800 flight tests out of a 5,000 flight test program. I am 
not sure if I have that right. But they have reduced the test 
program quite a bit and they have taken two resources out of 
there.
    You know, one of the articles that they have taken out is 
one of the carrier variants.
    Mr. Abercrombie. Yes.
    Mr. Sullivan. They will have one test article now for 
carrier variants.
    Mr. Abercrombie. I don't want to pursue it further right at 
the moment, but we are going to--we will do it through staff.
    Mr. Sullivan. But as I said, we have seen this movie 
before. That is what everyone is looking at, is there could be 
much more additional time and cost increase as a result.
    Secretary Young. Mr. Chairman, I will try to be concise, 
but I do want to highlight, there are differences between F-22 
and JSF. We have 13 aircraft in the test program. That is a 
significantly greater number than F-22 had.
    One of the early versions of the test plan had as many as 
7,000 sorties, but it wasn't well defined. One of the more 
recent ones had 5,700 sorties. There are 5,500 in the so-called 
MCRR, mid-course risk reduction program, and then there is a 
new version of the test plan already in work that adds back 50 
sorties.
    The team of experts is trying hard to get this right and 
balanced. The test communities complaints and concerns are 
about losing test assets, but not necessarily so much about 
whether we are--I mean, we have to check the box on test points 
and mission systems and the plan does that.
    We also have operational testing and evaluation (OT&E) 
aircraft that are wired with instrumentation and could be 
brought into the test program if necessary. But I would echo 
what he said. There is no doubt in my mind this Nation can 
build a fighter and build this fighter. We have got to work our 
way through some problems and not overemphasize the problems.
    Mr. Abercrombie. If I accept all of that, and I accept the 
logic of it, then you should have the competitive engine in 
there also. They should. I mean, if I accept the logic of what 
you have just said, following all through those things in order 
to have the complete program, to make it work, we should not be 
budget driven. This should be mission driven. I mean mission 
driven in terms of legislative policy.
    Believe me, I came to this with no prejudices, honest, I 
did not.
    Secretary Young. I am well aware of that, sir.
    Mr. Abercrombie. And I think everybody can see how I 
conduct this subcommittee. I am not trying to push something or 
someone over something else. I have been convinced of this, and 
you just made an excellent case to me for having the 
competitive engine.
    And it seems to me the only reason it is not in there is 
people are worried about the money. And if that is the case, 
believe me, compared to what you are just talking about, it is 
chicken feed. And I wouldn't mind arguing that we should put in 
more money if you want to increase the test capabilities, 
because I will tell you, my instructions on this, and then I 
want to get to Mr. Larsen, he has a follow up, has to do with 
the Presidential helicopter. I will draw you a parallel.
    That is a complete mess. It has gotten in--proportions 
beyond--that is unbelievable to anybody that is trying to look 
at it in any kind of rational sense. Talk about lousing up 
testing and all the rest of it. And if it takes more money to 
do the test properly--now, if your testimony is that the mid-
course risk reduction is a sensible thing to do and that is 
what you are testifying to, then that is okay. I will accept 
that. But----
    Secretary Young. We continue to revisit and we will--we 
have added back some sorties to that plan.
    Mr. Abercrombie. Okay. But, you know, go back to the 
secretary and tell him, stop fighting. The Congress wants the 
second engine, and they are backing you up on most everything 
else, and I think we will probably do it here, too. But let's 
not get trapped in falling short on what we need to do if we 
are going to go ahead with it.
    Secretary Young. Yes, sir.
    Mr. Abercrombie. And so your final point is, is these two 
variants that you are working on right now, need to go forward?
    Secretary Young. On the Joint Strike Fighter?
    Mr. Abercrombie. Yes.
    Secretary Young. Absolutely, sir. And the progress is very 
good on these.
    There were people that said a year and a half ago, we could 
not possibly have STOVL ready to fly this calendar year. It 
will be ready to fly in the--mode this summer. And we have got 
to address the blade issue that you have rightly raised, but we 
expect to fly it in the STOVL mode in December.
    You know, people--sometimes the glass can be half empty and 
sometimes glass can be half full. It depends on where you want 
to be. But on the whole, the program is executing well. It 
definitely has technical challenges ahead of it, but we are 
going to go attack those every day.
    Mr. Abercrombie. I will tell you, though, one more thing. 
This is going to effect what happens to the F-22, because I--we 
just can't, there is not enough money. Now, I want to finance 
things differently. I will simply mention again. If we don't 
get a capital budget, then you are going to run into this 
problem over and over and over and over again. It is going to 
get worse and worse and worse.
    Secretary Young. I would--can I reemphasize, though, when 
the process of our own budget process, and with all due 
respect, sir, the Hill process, takes a billion dollars out of 
a reasonably well-programmed plan that needs that money, it 
shouldn't be a surprise to all of us that at the back end we 
need some of that billion dollars back to finish the program.
    Mr. Abercrombie. I don't dispute that, but that is why we 
don't want to get into waste, like that helicopter.
    Mr. Sullivan. I think that is an excellent point that you 
are making, about trying to find different ways to finance 
this. Because really, this program is in a position where 
really the risk reduction plan they put in place is to avoid 
additional costs right now. They are really trying to avoid an 
over-target baseline, and the reason they are doing that is 
because they will get killed in the funding process and 
politically if they have to declare that or admit to something 
like that at this point in the program.
    Mr. Abercrombie. I will finish with this, Mr. Young.
    You were inches from a clean getaway before your last 
statement. I agree with you, you might have to go back and add 
money in in order to make the picture complete. Isn't that 
essentially what you are saying, that we need to take that into 
account?
    Secretary Young. Yes, sir.
    Mr. Abercrombie. Good. Then take into account that you need 
that money for the competitive engine. Go back and add it in.
    See, I am a reasonable guy.
    Secretary Young. I definitely have that message, Mr. 
Chairman, but I think I had that message before I got here, 
sir.
    Mr. Abercrombie. Okay. Thank you.
    Mr. Larsen, and then we will go to the second panel.
    Do we want to take a break? Is there a vote right now? We 
may have to vote.
    So Mr. Larsen, and then we will go to the second panel and 
try to get started as quick as we can because apparently there 
is a vote coming up, or a series of votes.
    Mr. Larsen.
    Mr. Larsen. Thank you, Mr. Chairman. And just to be quick, 
here, I just want to say I appreciate Secretary Young getting 
back so expeditiously with an answer.
    It still begs a couple of things, a couple of questions. 
First off is that someone will carry those costs, so it is 
still incumbent upon the Congress to determine who that is 
going to be and the impacts of that.
    The second, I don't want your answer to deflect from the 
bigger issue I am trying to raise, and that is that we do have 
a trade case at WTO. We say these subsidies are illegal, and 
the Air Force is buying an airplane built with subsidies that 
the President himself says are illegal. This could blow up the 
very argument that we use at the WTO.
    That is not an issue for AT&L to deal with, not an issue 
for USAF to deal with. But it certainly kicks it upstairs, over 
and above the SECDEF's head, into the White House, and it is a 
problem. It is a serious problem that we now face as a result 
of this Air Force decision.
    So it may not be your problem to resolve, and I appreciate 
that, but the problem has got to get resolved. It could 
undermine us at the WTO, not just on this case but on future 
cases, and that is a big dang deal for this Congress to deal 
with.
    Mr. Abercrombie. Thank you.
    We have some more questions, if I could submit them to you 
and perhaps Mr. Sullivan as well, I would be appreciative if 
you could get back to us as fast as you can. It will help us to 
make our recommendations, and I assure you we will read them. 
You won't be going through the motions. We pay close attention 
to what you say and for good reason. We respect both of you and 
are very, very appreciative of your participation and the 
manner in which it is conducted. We trust both of you.
    Secretary Young. Thank you, sir.
    Mr. Abercrombie. You are dismissed.
    Here is the deal. We think there is going to be a vote 
call, probably a procedural vote. So while we reserve our right 
to criticize everybody who appears in front of us for their 
bureaucratic byzantine methodology of dealing with life, of 
course the Congress conducts itself similarly.
    We apparently have an utterly meaningless vote, which will 
cause us all to rush over to the floor. So probably the--let me 
see if it is going to be just one vote. So maybe it makes more 
sense for us to run over there right now and cast that vote and 
come right back.
    They haven't called the vote. Let's get started.
    The second panel is going to focus on a couple of issues, a 
range of aviation programs in the Navy and Air Force. Two 
issues of particular interest to our subcommittee is the Air 
Force inventory shortfalls and the Combat Search and Rescue 
Helicopter (CSAR-X).
    Air Force leadership is indicating previous testimony of 
the high operational tempo of the past 17 months in the Balkans 
and Southwest Asia has taken its toll on the service life of 
the aircraft. And that might indicate a shortfall in desired 
tactical aircraft inventory. And if the production of the F-35 
is delayed or procurement numbers are fewer than the 80 per 
year that was envisioned, the gap could come sooner and become 
larger.
    And the search and rescue program has been delayed because 
of disputes over the contract award and two protests that were 
sustained by the GAO. So the search and rescue program is 2 
years behind schedule and once again is in source selection. 
And this was Air Force's No. 2 acquisition priority after the 
airborne tanker program, which is maybe also going to get 
stalled again.
    So the rescue helicopters intended to replace the Air Force 
fleet of 101 aging HH60G rescue helicopters. So we hope to 
explore that.
    And I will ask Mr. Taylor if he had any remarks in this 
particular stage of the panel?
    We will go ahead, he doesn't have any.
    Welcome to everyone.
    Rather than go through lengthy introductions, because of 
the time period to get started, why don't I start with you, Mr. 
Balderson.
    You are a Deputy Assistant Secretary of the Navy for Naval 
Air Programs, and maybe it is best we start with you and go 
down the line.
    Mr. Balderson. Thank you, Mr. Chairman.
    Mr. Abercrombie. I appreciate all of you coming here and 
give you my fond aloha.

 STATEMENT OF WILLIAM M. BALDERSON, DEPUTY ASSISTANT SECRETARY 
        OF THE NAVY, AIR PRORGAMS, DEPARTMENT OF DEFENSE

    Mr. Balderson. Thank you, Mr. Chairman and distinguished 
Members of the subcommittees.
    I appreciate the opportunity to appear before you today to 
discuss Navy and Marine Corps aviation programs.
    I do have a written statement that I will respectfully 
submit for the record.
    Out of respect for the committee's time, I will limit my 
opening remarks to----
    Mr. Abercrombie. Without objection. Sorry.
    Mr. Balderson. Out of respect for the committee's time, I 
will limit my opening remarks to just the two following points.
    First, the Department of the Navy's acquisition team 
continues to work aggressively to identify efficiencies in the 
development, testing and procurement of the products and 
services we provide to the fleet. The fiscal year 2009 budget 
request reflects considerable effort in identifying affordable 
solutions for the Department's aviation programs and we are 
striving to address the Navy Marine Corps warfighting needs in 
the most cost effective way possible.
    Second, the fiscal year 2009 President's budget request is 
a balance between sustaining our fleet of legacy aircraft while 
also recapitalizing with newer, more capable and more reliable 
aircraft. Our proposed plan procures 206 aircraft and continues 
development of the F-35, the E2D, the P-8A, the CH-53K and a 
number of other critical recapitalization programs.
    Mr. Chairman, I will conclude by thanking these 
subcommittees for your outstanding support. The great efforts 
of our men and women in theater today and tomorrow will reflect 
a return on your investment in them and in the systems they 
take to the fight.
    Once again, thank you, and I look forward to your 
questions.
    [The joint prepared statement of Mr. Balderson and Admiral 
Myers can be found in the Appendix on page 71.]
    Mr. Abercrombie. Thank you very much.
    Admiral Myers.

 STATEMENT OF REAR ADM. ALLEN G. MYERS, DIRECTOR, AIR WARFARE, 
                           U.S. NAVY

    Admiral Myers. Mr. Chairman, distinguished members of the 
subcommittee, thank you for this opportunity to appear before 
you to discuss the Department of Navy's fiscal year 2009 
aviation programs.
    I am delighted to share this time with my colleagues from 
the Department of Navy, the Marine Corps and the Air Force to 
convey the critical needs of naval aviation in our armed 
forces.
    The Navy has been fully engaged in Operation Enduring 
Freedom (OEF) and Operation Iraqi Freedom (OIF) for the last 
six and a half years and we are prepared to continue that same 
level of operational tempo as long as it is required.
    The remarkable performance of our sailors and marines could 
not have been possible without this committee's tireless 
devotion and significant contributions not only to our Navy but 
our Nation as a whole. For that, we are truly grateful.
    Naval aviation continues to play a major role in providing 
tailored effects in support of support of operations OEF and 
OIF, as well as our broader global war on terror. The ability 
of naval aviation to shape strategic, operational and tactical 
environments is reflected by the substantive return on your 
investment in our people, our combat readiness and our refined 
spectrum of critical warfighting capabilities.
    Also, these investments in surveillance, command and 
control and persistent strike, among others, ensures that our 
tactical aircraft can operate effectively from aircraft 
carriers that exploit the vast maneuver space provided by the 
sea.
    These Navy aviation programs comprise both platforms and 
weapons, directly underpin our Navy strategic plan and directly 
support our new maritime strategy. The fiscal year 2009 
President's budget maintains the trends of balancing 
conventional and irregular warfare aviation capabilities, 
reduces excess capacity and achieves technological superiority 
through cost wise investments and recapitalization, sustainment 
and modernization programs.
    The adjustments reflected in the budget maintain sufficient 
capacity to meet global needs and warfighting requirements. It 
manages the overlap with joint capabilities and preserves our 
warfighting relevance through 2024.
    Fiscal year 2009 through fiscal year 2013 department's 
fiscal year budget request procures 1,094 aircraft and 
concentrates on resourcing capabilities that generate critical 
maritime and joint effects. Today the Navy aviation stands 
ready with the agility, the flexibility and the confidence to 
support your Navy and to do what no other navy in the world can 
do: execute a maritime strategy that is second to none.
    An example of our agility and flexibility this past year 
was never more evident than when our FA-18 Hornets increased 
projected power to shore in Operation Enduring Freedom when our 
Air Force F-15s were grounded. We are out and about doing the 
essential missions of the nation. But as Admiral Roughead said 
2 weeks ago in his first posture hearing, our operations come 
at a cost.
    Fiscal realities and operational strain on our aircraft 
contribute to the moderate risks that we assume. The recent P-3 
groundings are but one example of the operational strain. The 
new multi-mission maritime aircraft will recapitalize on the 
aging P-3s and our maritime patrol anti-submarine warfare 
capabilities. The current FA-18 Hornets are needed to mitigate 
the 2017 strike fighter shortfall.
    The 2009 budget and its associated force structure plans 
will meet our current challenges with a moderate degree of 
risk.
    Thank you again for the opportunity to appear before you 
today and thank you for your support for our naval aviation, 
our fleet which defends our great Nation today and tomorrow.
    [The joint prepared statement of Admiral Myers, and Mr. 
Balderson can be found in the Appendix on page 71.]
    Mr. Abercrombie. Thank you.
    General Trautman.

     STATEMENT OF LT. GEN. GEORGE J. TRAUTMAN, III, DEPUTY 
           COMMANDANT FOR AVIATION, U.S. MARINE CORPS

    General Trautman. Chairman Abercrombie, Chairman Taylor, 
Ranking Member Bartlett and distinguished members of the 
subcommittees, it is a privilege for me to appear before you 
today to discuss the 2009 budget submission as it relates to 
Marine Corps aviation.
    The Marine Corps is operating at its highest operational 
tempo in decades. We are flying our aircraft hard, deploying 
our marines often and doing our best to take care of families 
who are growing tired under the strain of the operational pace 
we are required to maintain.
    However, the magnificent men and women who serve our Corps 
continue to meet every challenge that comes their way. As we 
speak, the aviation combat element of the 24th Marine 
Expeditionary Unit is preparing to deploy with a force of 3,400 
marines headed to Afghanistan.
    When combined with forces already in Iraq, and those that 
are rotated through the Pacific, this year will see us reach a 
new peak with 68 percent of our squadrons either deployed or 
preparing to deploy.
    The many accomplishments of Marine aviation over the past 
year are a direct reflection of the extraordinary dedication to 
duty and tireless pursuit of mission accomplishment that is the 
hallmark of your Corps of Marines. I know that I speak for each 
of them when I thank you today for your equally tireless and 
dedicated support to those who must serve in harms' way.
    Each and every day, your marines are working hard to 
maximize the investments you have made in our aviation 
platforms and systems. As just one of the most recent examples, 
the MV-22 made its combat debut in Iraq over 5 months ago and 
the squadron has now flown over 3,000 hours, carried over 
14,000 passengers and moved more than a million pounds of cargo 
while maintaining mission readiness rates that have exceeded 
our expectations.
    The ability of the Osprey to fly farther and faster and to 
move more marines and equipment around the Al Anbar battle 
space without refueling than any other platform in history has 
provided our warriors a significantly increased combat 
capability that is most appreciated by us all.
    My respect for the accomplishments of the men and women who 
comprise Marine aviation past and present is only exceeded by 
my confidence that with your continued support we are properly 
poised to meet our future challenges.
    I would like to take this opportunity to extend, for the 
record, a job well done to all the brave warriors defending 
this great Nation both at home and abroad. No finer fighting 
force has ever been assembled, equipped and trained.
    Thank you for this opportunity to speak with you today, and 
I look forward to answering any questions that you may have.
    Thank you.
    [The prepared statement of General Trautman can be found in 
the Appendix on page 98.]
    Mr. Abercrombie. Thank you, General.
    General Hoffman.

 STATEMENT OF LT. GEN. DONALD HOFFMAN, MILITARY DEPUTY, OFFICE 
 OF THE ASSISTANT SECRETARY OF THE AIR FORCE FOR ACQUISITION, 
                         U.S. AIR FORCE

    General Hoffman. Mr. Chairman and members, I appreciate 
being here today.
    I would first like to say on behalf of Ms. Payton, who you 
originally requested to be here, she sends her regrets. The 
last week or two have been pretty busy for her and she has two 
other committee engagements today as well.
    I would only like to make one comment, and that has to do 
with what was discussed in the first panel there, and that is 
on WTO.
    There are suits in the WTO and there are countersuits in 
the WTO, so the acquisition strategy required both vendors to 
clearly state in their proposals that no matter what the 
outcome of the WTO decision, that neither one of them--neither 
one of them--would pass on a claim to the government and to the 
taxpayer.
    I look forward to your questions.
    [The joint prepared statement of General Hoffman and 
General Darnell can be found in the Appendix on page 113.]
    Mr. Abercrombie. Thank you very much.
    And General Darnell.

STATEMENT OF LT. GEN. DANIEL J. DARNELL, DEPUTY CHIEF OF STAFF, 
AIR, SPACE AND INFORMATION OPERATIONS, PLANS AND REQUIREMENTS, 
                         U.S. AIR FORCE

    General Darnell. Chairman Abercrombie, Chairman Taylor, 
Ranking Member Bartlett, thank you for the opportunity to speak 
here today.
    Your Air Force is actively engaged around the world and we 
greatly appreciate your continued support of our nation's 
airspace and cyberspace forces.
    The United States Air Force has been engaged in continuous 
combat operations for over 17 years. Your Air Force is the most 
battle tested in our history and every day your airmen find 
innovative ways to accomplish their mission more effectively 
and more efficiently.
    Your airmen are dedicated to the defense of this Nation and 
have committed themselves to go to the ends of the earth, to 
the most dangerous or austere locations, in our nation's hour 
of need or in the world's moment of despair.
    If tonight, tomorrow or 20 years from now America calls, we 
will go. And we will provide strategic deterrence, global 
vigilance, global reach and global power.
    America faces a dangerous and uncertain future because our 
enemies do not sit idly by. Instead, adversaries both declared 
and potential continue to develop and field new and better 
means to threaten our nation, our interests and stability 
around the world. At the same time, the average age of our air 
and space craft continue to rise and our ability to overcome 
future threats diminish.
    The United States of America depends on airspace and 
cyberspace power to an extent which is unprecedented in 
history. Your Air Force is already engaged today to secure the 
tomorrow, but we cannot rest on the laurels of our current 
dominance.
    Our Nation must invest today to ensure dominance of today's 
airspace and cyberspace.
    Once again, I appreciate the opportunity to speak with you 
today and I look forward to answering your questions.
    [The joint prepared statement of General Darnell and 
General Hoffman can be found in the Appendix on page 113.]
    Mr. Abercrombie. Thank you very much.
    Mr. Bartlett, Mr. Taylor and I decided to defer to you out 
of respect for your insight and your perspective.
    Mr. Bartlett. Thank you very much, Mr. Chairman. I 
appreciate you mentioning the requirements for search and 
rescue.
    Indeed, the Navy has three requirements--I am sorry, four 
requirements, actually, for helicopters, that the 60 is really 
challenged to meet. One of those is search and rescue. It does 
not hold enough fuel. It cannot go far enough or stay there 
long enough for really effective search and rescue.
    The second is medical evacuation. Again, the amount of fuel 
and its dwell time is limited. And in addition to that, it just 
isn't big enough to provide a meaningful airborne emergency 
room.
    A third mission is the mine countermeasures mission, and as 
you know the towing characteristics of the 60 limit its 
effectiveness there.
    And a fourth mission, which we usually don't talk about, 
but I think it may be the most important of the missions, and 
that is the mission package change off on the LCS. The whole 
concept of the LCS I had thought at the beginning was that it 
could change from one mission package to another at sea.
    Now without a medium lift helicopter, we just can't do 
that, and the LCS is going to have to leave the fight and steam 
to port and change mission packages, and then return to the 
fight, and it may be absent the fight for a week if it takes 
three days to steam to port and a day to change the mission 
package.
    Admiral Myers, I wanted to follow up something said by the 
Chief of Naval Operations (CNO) at last Thursday's hearing. You 
and I have discussed the importance of the Navy's helicopter 
force structure and the need for a robust medium lift 
helicopter in the fleet. You were kind enough to brief members 
of this committee in October, shortly after you took command of 
N88, of the Navy's vertical lift programs.
    In that closed briefing, several of us expressed our strong 
concern with the Navy's ability to meet current and future 
requirements with the current mix of helicopters. And the four 
missions I just mentioned were really critical there.
    I recommended for some time the Navy should invest in a 
robust heavy-medium lift helicopter that will provide 
significantly greater capability than the 860 alone at far lost 
cost than the super heavy MH-53 variants, which are several 
years off, as you know.
    Last week, CNO Roughead told our committee that Fleet 
Forces Command is currently conducting a study to determine 
whether the Navy has a need for a medium lift helicopter to 
meet current and emerging requirements.
    I want to first applaud you and Admiral Roughead for the 
way it appears you have dealt with the committee's concerns on 
this matter. It is to your credit that the Navy is examining 
this often overlooked but critical part of its force structure, 
that is helicopters.
    Could you tell us when the results of this study will be 
made available to the committee? To the extent you can, please 
elaborate on the nature and scope of the study and any other 
specifics you can provide. Can you assure the committee that 
this is a broad, across-the-enterprise analysis? Is the Navy 
conducting the study in-house, or is it being done under 
outside contract?
    Admiral Myers. Mr. Bartlett, first of all, let me thank you 
for your continued interest in the Navy's helicopter programs.
    If you don't mind, sir, can I start from the beginning of 
your first question and work my way down to Admiral Roughead's 
testimony.
    Mr. Bartlett. Yes, sir. Thank you.
    Admiral Myers. That would be terrific.
    First of all, the search and rescue requirement, it 
satisfies what the Navy needs, and that is 170 miles is the 
distance that the Navy requires for search and rescue 
helicopters. And as we have discussed, and I know you already 
know, Representative Bartlett, the 860 fits on our cruisers and 
our destroyers and our LCS platforms.
    Mr. Bartlett. Admiral, if I can interrupt for just a 
moment, it is my understanding that in preliminary tests, the 
60 has failed two of these mission requirements. Is that not 
correct?
    Admiral Myers. No, sir, that is not entirely correct. I 
think the two areas you are referring to are the ferrings and 
the ferring orienter, which was part of my discussion to this 
panel last October and also the electrodes on the Oasis towing 
device. Those were two areas that we were having difficulties, 
and that is what I reported to the committee.
    Since then, the contractor, Concurrent Technology 
Corporation, or Sea Stars, has worked with the Navy and has 
ironed out essentially all the ferring and ferring orienter 
difficulties. They have redesigned it on the 860 so that it is 
towing adequately right now. As a matter of fact, it starts 
operational tests later this month.
    And in terms of the electrodes with the aft corrosion we 
were seeing between 2 and 8 hours, and we were trying to get 
that to about 20 hours, we are still working with the company, 
EDO, and have about another year before that goes into an 
operational test.
    So we think that we are progressing well in both of the 
areas of difficulty that I talked about last October.
    Sir, does that answer your question on those two specific 
items? And then I can go on to the other items.
    Mr. Bartlett. Yes, thank you. Go on.
    Admiral Myers. I mentioned that 170 miles is adequate for 
the Navy's use for search and rescue and that also that same 
platform serves as a Medivac to move an individual off the ship 
if the ship is not in port, out at sea. We think that it is 
sized big enough. It is as big as we need and as big as our 
requirements dictate. And it also fits and can be hangared in 
our cruisers, destroyers and our littoral combat ships. And we 
think that that is very important.
    Sir, you mentioned mine countermeasure missions. There are 
five airborne mine counter-missions that the SH-60 Sierra will 
take on, and the first one, which is I mentioned a minute ago, 
begins operational tests later this month, is the ASQ-20. And 
we have had--we are at about the right towing limit and it has 
succeeded in going through the development tests, so it meets 
the parameters, we think, that is required to go into 
operational tests.
    The mission package change on the LCS, you said that you 
were surprised that they could not be done at sea. That is 
scheduled to be done in port. The con op is for the combatant 
commander and the component commander to have the flexibility 
with missions and mission packages that he can arrange them in 
the theatre how and where required.
    We are going to purchase 55 LCSs and of those 55 LCSs, we 
are going to have a mix of mission packages, 24 mission modules 
for mine countermeasure, 16 for anti-submarine warfare (ASW) 
and 16 for ASUW. So the mission packages can be moved from one 
LCS to another, but that is required to be done in port.
    We don't think it is a viable con op to do that at sea. 
When you say leave the fight, we think during a fight is not 
the appropriate time to be trying to change a mission package, 
that we would want to be postured going into the--zero and then 
the more advanced stages of any kind of tension in a designated 
theatre.
    So what we have given is the theatre commander or the 
combatant commander and his component commander the full 
flexibility with a mix of helicopters and mission package to 
tailor those LCSs for his environment.
    Mr. Bartlett. Mr. Chairman, the decision to neck down to 
the one platform was made on a business basis before 9/11. We 
suspect that the Navy is valiantly doing a very good job now of 
defending the difficult to defend, and there is no argument but 
what the presence of a medium lift helicopter would greatly 
increase our capabilities in the four mission areas that I 
developed.
    And I remember very well, sir, when the LCS was first 
pitched to this committee. It was to be a change off at sea, to 
be very versatile, so that if the nature of the figure, the 
change, that you could change the mission packages very quickly 
at sea.
    Now since we do not have a helicopter capability to do 
that, we somehow are arguing that it is okay to leave the fight 
and steam to port to change the mission package.
    We appreciate very much the fact that you are taking a look 
at this medium lift helicopter and its desirability in the Navy 
and we are looking forward to the results of that study.
    When will the study results be made available to the 
committee?
    Admiral Myers. Sir, the study that you are referring to is 
the Navy heavy lift helo con ops, and that was done--started 
last summer. Actually, I think it began just before the summer. 
And we thought that it was going to be completed last fall, in 
November. When I talked to you in October, to your committee, 
sir, we anticipated that it was going to be a month or so 
before that con op was complete.
    I am told that it has been delayed because it quite frankly 
needs some more work, and it will not be available until next 
fall. That is the timeline that fleet forces command is on, as 
I am informed.
    Mr. Abercrombie. Thank you, Admiral Myers.
    Thank you, Mr. Bartlett, for conducting the Sea Power 
Subcommittee meeting. Now you won't have to go to that.
    Mr. Taylor.
    Mr. Taylor. Gentlemen, I appreciate you sticking around.
    I had asked the previous questions about the P-3, Admiral 
Myers, and I was wondering if perhaps you were the right one to 
answer that.
    I am curious on a number of things. No. 1, what is being 
done to restore that capability in Iraq right now?
    Second question is, as you are looking for the replacement, 
the 737 just strikes me as a significantly larger airframe and 
with electronics being downsized significantly since the 
invention of the P-3, why do you need a significantly larger 
airframe to do that? And what other options, if any, is the 
Navy pursuing?
    And it kind of goes--no, it very much goes to the point 
that Mr. Bartlett has been making, that we have the world's 
finest military. We also have the world's most energy intensive 
military, which in itself becomes a vulnerability. Is replacing 
a P-3 with a large frame, like a 737, is that doing anything to 
reduce our vulnerability to having our fuel cut off?
    Admiral Myers. Sir, let me, if I could, start with a 
rundown on the P-3 and what we are--sort of the status of where 
we are, the impact overseas, and then our mitigation efforts, 
which will include the P8 and why we think that is the most 
capable platform.
    For status on the P-3s, sir, as I know you are aware, last 
December we issued a grounding notice on 39 P-3 Sea Orions. 
That represents about 25 percent of our 160 aircraft fleet of 
P-3s and it was--these aircraft were grounded based on analysis 
backed up by visual confirmation of cracking in a part of the 
wing that we had not anticipated up until this point.
    So those aircraft made up a percentage of Intelligence, 
Surveillance, and Reconnaissance (ISR) in Central Command 
(CENTCOM) with their full mission video capability and, sir, if 
I could take for record the exact percentage and the mitigation 
efforts that the combatant commander used, I think that is 
beyond the classification level of this hearing. But we are 
prepared to answer that in a separate forum.
    The Navy, when we discovered these cracks, set out on a 
three-prong approach to try to mitigate the impacts. First was 
a nonmaterial approach, which was to maximize training in 
simulators and to use our current aircraft down to the final 
hour before they were put into a depot status or put in line to 
go to one of our three depots for extended maintenance.
    Second, we accelerated our fatigue life management program 
so that we would make sure that we finish this analysis of this 
area of the wing so that we would be able to scope out exactly 
what we thought the recovery process would entail.
    The recovery of these 39 aircraft is going to be about 2 
years before we get them back to the fleet, some as early as 
about 18 months from now and some are going to be a little bit 
later. Just to give you an idea, 10 of those aircraft were 
overseas deployed, 17 were in depots, and the remainder were 
back here in some kind of a training status.
    The reason it takes longer than some of our previous 
airframes bulletins or wing cracks is because we did not have 
the abundance of the material, the planks, that were required 
for this part of the wing, so we have had to go out and talk to 
Universal Alloy and Alcoa, to make sure that we get the right 
extrusion material, and then take that and have that extrusion 
material milled. And then once it is milled, then get it to the 
depot.
    So all of that takes time, and we factored that in. And we 
are also looking very closely at efforts to maximize the depot 
throughput once the material in the form of plans is received 
and we can start to put those in the aircraft.
    We are also looking at replacing the outer wing boxes and 
working with Lockheed Martin. So we sort of have a dual-pronged 
approach, depending on the condition of the wings.
    Additionally, for a third way to try to mitigate the risk 
was to look at ways that we could advance some of the in 
particular the ASW capability of the P8, the follow-on 
aircraft, as early as possible. That aircraft was scheduled to 
IOC in 2013. So we are looking at the possibility of advancing 
some of the ASW capability as early as 15 months so that we can 
start to bring those aircraft into the fleet earlier, and then 
that would also mitigate some of the shortfalls of the P-3s as 
we get to the 2012 time frame.
    We selected the P8 based on the capability that it offered. 
We needed an aircraft that would travel, that would go a 
distance and be able to loiter in accordance with our fleet 
requirement and with major combat ops. So in the competition 
and the selection, that was the best capability and that is 
what we are using as an existing derivative of the 737. And we 
expect to take the--top open up our first squadron in the 2012 
time frame, as long as we can accelerate it with about the 15-
month forward profile that we hope to execute.
    Mr. Taylor. A quick follow up, and again, you don't have to 
get terribly detailed, but I am curious. So the selection 
criteria was, No.1, the ability to loiter? Or was it volume? 
Was it--walk me through that determination.
    Admiral Myers. If you don't mind, Chairman Taylor, I am 
going to ask Mr. Balderson, who is part of the selection 
criteria team, to expand on that. But what I was addressing is 
the capability that was required is a big driver as to why that 
platform. You asked why the size and the capacity, and it is 
the capability that it offers.
    Mr. Balderson. Mr. Chairman, Mr. Young alluded to this 
earlier. There were two competitors. He didn't remember the 
exact number. There were two competitors for this requirement. 
Boeing proposed a 737 derivative and Lockheed Martin proposed 
what they call the Orion 21, which was essentially a next-
generation P-3. And in terms of outer mold lines, very similar 
to the P-3 aircraft.
    I will tell you, it was a very, very close competition. 
Both aircraft were very capable. The evaluation criteria were 
pretty much the standard criteria, but in the technical area, 
ability to loiter, range, payload, time on station, and those 
sorts of things were key factors, as I recall. This goes back 
almost five years now, to the development contract. And then of 
course there were the other factors that we normally look at.
    Another advantage to the 737, as I recall, in the source 
selection, although not perhaps a discriminator, was the 
worldwide support system that the 737 has.
    So essentially, two very similar class airplanes competed, 
very close competition, and the 737 won on a best value 
competition.
    Mr. Taylor. Going back to the P-3 wing boxes in Iraq, how 
soon should I expect an answer on restoring that capability 
that went down in December?
    Admiral Myers. Sir, we should be able to turn that around 
in a matter of days.
    Mr. Taylor. Okay.
    Thank you, Mr. Chairman.
    Mr. Abercrombie. Obviously, you heard the vote go off. I 
will try and ask you a couple of questions, if you could just 
answer briefly, and I will submit some to you. And again, I 
assure you that your answers will be reviewed closely to help 
us make a recommendation.
    General Darnell, let me ask you, on the search and rescue 
helicopter, is the HH60G, the modification budget in 2009 and 
in the projection, is it fully funded to meet the requirements?
    General Darnell. Mr. Chairman, if you are talking about the 
HH60 and the retrofit system associated with that, yes, it is.
    In 2008 we had a congressional add of----
    Mr. Abercrombie. My understanding is, it is supposed to 
last an additional two years now. Is that right?
    General Darnell. Yes, sir. We are putting $99 million in 
upgrades into the fleet in 2008. The crew has improved data 
link capability, improved multifunction displays for flying.
    Mr. Abercrombie. Do you think you can do it?
    General Darnell. I am sorry?
    Mr. Abercrombie. Do you think you can do it?
    General Darnell. Yes, sir.
    Mr. Abercrombie. You would fly that helicopter?
    General Darnell. With these improvements, yes, sir, we can.
    Mr. Abercrombie. Would you fly it?
    General Darnell. Yes, sir. I would.
    Mr. Abercrombie. The life extension programs, I am not 
quite sure what that means, like for the F-15E and the Golden 
Eagles. The life extension program, again, are they fully 
funded for 2009 and the future years?
    General Darnell. Sir, we are partially funded in some 
areas. Structurally, I think in the F-15 program, that is 
probably the most important question, and the answer I owe you 
most. We are going to do a teardown of our aircraft. As you are 
well aware, we had a recent in-flight break up of an aircraft 
about 5 months ago. We are going to do a complete teardown of 
an aircraft and then we are also going to do a----
    Mr. Abercrombie. Do you have confidence in it? In this 
program, in this life extension program?
    General Darnell. Yes, sir.
    Mr. Abercrombie. Because I am depending, in the 
recommendations I make in my subcommittee, I am dependent on 
what you tell me. I am not going to fly them. I am not going to 
tear them down. I am not going to have to put people under my 
jurisdiction in them.
    Are you confident you can do this?
    General Darnell. We are confident, Mr. Chairman. We have 
177 aircraft that we are going to extend out to 2025. Our 
confidence, however, will be based somewhat on this structural 
teardown and fatigue testing that we will be doing in the next 
12 months.
    Mr. Abercrombie. Okay. Do you understand why I am asking?
    General Darnell. Oh, yes, sir.
    Mr. Abercrombie. I don't want to just say, well, we gave 
them the money, and then it doesn't work.
    General Darnell. Right.
    Mr. Abercrombie. If you think that this life extension 
program can't work, you have to come and tell us.
    General Darnell. We will.
    Mr. Abercrombie. In other words, there is not a right and 
wrong answer in the sense of I am demanding you do something 
that can't be done.
    General Darnell. Yes, sir.
    Mr. Abercrombie. If it can't be done, we need to know. Is 
that a fair----
    General Darnell. It certainly is, yes, sir.
    Mr. Abercrombie. Let me ask you, then, General Trautman, 
about the Venoms and the Vipers. Now, the Navy's statement 
includes the procurement objective of 180 Vipers and 100 Venom 
helicopters, right?
    General Trautman. That is right, sir.
    Mr. Abercrombie. Do these quantities have to increase as 
you evaluate the impact of increasing the end-strength? In 
other words, if we are able to move the end-strength up in the 
Marine Corps, does that 180 and that 100 turn out to be right? 
Do you have confidence in these two helicopters?
    General Trautman. I have a great deal of confidence in 
these two helicopters. As you know----
    Mr. Abercrombie. What about the numbers?
    General Trautman. The numbers are the program of record, 
100 and 180, as you described. The commandant grow the force to 
202K will increase by two Marine Light Attack Helicopter 
Squadron (HMLA) and two--well, just two HMLA squadrons for 
purposes of this discussion.
    And so we are assessing how many additional helicopters we 
may need on the----
    Mr. Abercrombie [continuing]. So we might be looking at 
increasing the expenditures there, right?
    General Trautman. We will probably in the out years have to 
do that, yes, sir.
    Mr. Abercrombie. Mr. Balderson, you folks taking into 
account this kind of change in the end-strength of the Army and 
the Marine Corps in terms of equipment needs?
    Mr. Balderson. Yes, sir. Absolutely. We are working very 
closely with the Marine Corps in the case of the 202K and of 
course in the Navy too in terms of emerging requirements.
    Mr. Abercrombie. I am asking the question, Mr. Balderson, 
excuse me, don't think I am being argumentative when I break 
in. It is because of the time frame and I don't want to hold 
you after we leave here, after we close this down.
    I am concerned with the supplemental budget, that F-22 is 
the same thing. I don't want to see this stuff appearing in a 
supplemental budget like it is an emergency we didn't know 
about. If we are going to increase the end-strength of the Army 
and the Marine Corps, we need to take into account in the 
regular budgeting process--when I say we, I mean the Congress 
certainly needs to, and we need to get your recommendations, as 
to what it will take to do that.
    Is that fair?
    Mr. Balderson. Yes, sir. I would just, from an acquisition 
standpoint, I would just comment that when we submit a regular 
budget and a supplemental, we take both into account in our 
acquisition plans. We would not submit a budget and a 
supplemental that added up, couldn't be executed by the 
industrial base.
    So with respect to H1 and other programs, we have taken all 
this into account.
    Mr. Abercrombie. I understand that. Believe me. The reason 
I don't want this kind of stuff to get into the supplementals, 
you never know when a supplemental is going to come. You never 
know when it is going to get heard. You never know when it is 
going to get passed. And you don't know what else is going to 
get jammed into. That is the reason, at least as far as I am 
concerned, in making recommendations to Mr. Skelton, to the 
subcommittee and to the whole committee and on to the 
appropriators and so on, I don't want to fool around with 
getting politics into the readiness factor with regard to--
especially when it comes to the end-strength build up.
    General Trautman, you see what I am driving at?
    General Trautman. Oh, yes, sir, I do. And we have the 2009 
budget is----
    Mr. Abercrombie. If you guys become dependent on 
supplemental budgets, you are going to be in huge trouble.
    General Trautman. There is nothing about the supplemental 
that will impact this particular discussion, Mr. Chairman.
    Mr. Abercrombie. Okay.
    General Trautman. It will be a POM 10 deliberation to 
decide how and when we can go beyond the program of record of 
180 and 100.
    Mr. Abercrombie. But you understand my concern. There has 
been a tendency lately to say, well, the supplemental budget 
will take up this stuff, especially when it comes to 
procurement and acquisition, and I think it is a terrible 
strategy, if you will. It is a terrible budgeting strategy. It 
is going to hurt you.
    Admiral Myers, you may have to answer this further on. Your 
statement says the Navy is working the Air Force on jamming 
transmitters and has leveraged previous work completed as part 
of the B-52 standoff jammer, the SOJ program, which has now 
been cancelled.
    Now, do you believe you will be able to fill the gap that 
the B-52 SOJ program was going to fulfill?
    Admiral Myers. Mr. Chairman, that is a great question. The 
Navy has remained committed to the Growler program. And as you 
know, we will retire our expeditionary capability starting in 
2010, ending in 2012. First Growlers arrive to the fleet this 
May and we will have a full operational capability (FOC) and be 
out of the EA-6 business in the fiscal year 2013 time frame.
    In the meantime, we are committed to try to do the follow-
on replacement for the ALQ-99 with the next gen jammer, and 
that process begins this spring with an analysis of 
alternatives.
    Mr. Abercrombie. In other words, you can't tell me whether 
you can fill the gap, right?
    Admiral Myers. The Navy is going to--the Navy is doing 
everything it can on our end, yes, sir.
    Mr. Abercrombie. I am sure you are. That is all. I mean, it 
is not a--I am not trying to test anybody. It is not a contest.
    The answer is, as I understand you, then, that you are not 
sure at this point. You are going to do your best. Well, we 
will follow up. It is too much to answer right now.
    Mr. LoBiondo, do you have a question? I think we have about 
six or seven minutes.
    So I will send the rest of my questions on to you, if that 
is okay.
    Admiral Myers. Yes, sir.
    Mr. Abercrombie. Because I don't want to hold you after 
this.
    This will be the last question, Frank.
    Mr. LoBiondo. Thank you, Mr. Chairman.
    I want to thank the panel for being here. It is very 
helpful.
    I have some very serious concerns about the fighter 
inventory shortfall in the Air Force in general and in the Air 
National Guard in particular.
    Mr. Abercrombie. Excuse me, Frank. Did you vote already?
    Mr. LoBiondo. Yes, I did.
    Mr. Abercrombie. Okay. I will tell you what. I have got 
about two minutes. I would like to go and vote. Can you close 
the hearing down----
    Mr. LoBiondo. Sure.
    Mr. Abercrombie [continuing]. For me, afterwards----
    Mr. LoBiondo. Sure.
    Mr. Abercrombie [continuing]. In the spirit of bipartisan 
friendship?
    Mr. LoBiondo. I would be honored.
    Mr. Abercrombie. Gentlemen, I am very grateful to you. 
Please don't think I am trying to short you. I think by the 
time this comes back and we go all over it again, I am not 
making good use of your time, and I would rather send the 
questions on, okay? And I am very appreciative.
    Thanks, Frank.
    Mr. LoBiondo [presiding]. Thank you, Mr. Chairman.
    A little bit unusual situation, but we will take it. I 
appreciate the chairman's indulgence to just get into a couple 
of questions.
    I understand that the Air Force is attempting to fill the 
gap with the so-called Golden Eagles or the F-15C and D models 
with the service life extension program. A couple of questions 
surrounding this. Is the Golden Eagle fully funded in the 2008 
budget?
    General Darnell. Mr. LoBiondo, it is partially funded. But 
our intent over at the Palm is to have it fully funded and to 
take 177 airplanes to 2025.
    Mr. LoBiondo. What roles will the Golden Eagles fill with 
the Air Force? What are your plans there?
    General Darnell. It will continue to provide air 
superiority. The assumption is, with those 177, that we have 
our program of record by 1,763 F-35 and the assumption was also 
made we would have 381 F-22s.
    Mr. LoBiondo. Will they be a part of the Air National Guard 
for the Air Sovereignty Alert Mission?
    General Darnell. That is the plan, yes, sir.
    Mr. LoBiondo. That is the plan?
    General Darnell. Yes, sir.
    Mr. LoBiondo. Do we have any idea how the Golden Eagles are 
going to be allocated for the various Air Sovereignty Alert 
Missions?
    General Darnell. Are you talking about by location?
    Mr. LoBiondo. By location.
    General Darnell. Sir, we may. I don't have any insight into 
that. I can get back to you on that.
    Mr. LoBiondo. I have a particular concern, representing the 
177th, with our strategic location and with what is happening 
with our F-16s and the ability to be able to continue that 
mission.
    One last question. Do you feel the various service life 
extension programs of the fourth generation fighters will be 
sufficient to bridge the gap between the F-22 and the F-35?
    General Darnell. Sir, our current plans carry the F-16 out 
into 2024 and the F-15E beyond 2030. That is the plan. We have 
confidence that we can make that work efficiently and 
effectively.
    Mr. LoBiondo. Because that is where some questions come in 
of how the Air Force is figuring versus the reality of what we 
are doing today.
    If you could get back to me, I would appreciate that very 
much.
    I thank you for being here.
    This hearing is now adjourned.
    [Whereupon, at 12:47 p.m., the subcommittees were 
adjourned.]
     
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                            A P P E N D I X

                             March 11, 2008
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              PREPARED STATEMENTS SUBMITTED FOR THE RECORD

                             March 11, 2008

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

                             March 11, 2008

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                 QUESTIONS SUBMITTED BY MR. ABERCROMBIE

    Mr. Abercrombie. Admiral Myers, you mention in your statement that 
the Navy is working with the Air Force on jamming transmitters, and has 
leveraged previous work completed as part of the B-52 Stand-Off Jammer 
(SOJ) program, which has now been canceled. Do you believe that the EA-
18G will be able to fill the gap that the B-52 SOJ program was intended 
to fill?
    Admiral Myers. The EA-18G was developed to replace the EA-6B in the 
carrier air wing. The Navy is executing its program of record and 
divesting its expeditionary EA-6B squadrons in accordance with the EA-
6B service MOA signed by the USN, USMC, and USAF in 2004. The EA-18G is 
not designed nor was it intended to replace the B-52 SOJ. The USAF is 
investigating a scaled down version of the SOJ that it refers to as the 
B-52 Core Component Jammer (CCJ). The Navy has leveraged off the 
previous work that the Air Force conducted in the early stages of the 
B-52 SOJ and has applied it toward technology maturation. This will 
conceptually ensure that the EA-18G with its Next Generation Jammer 
will become an essential part of the system of systems to counter enemy 
electro-magnetic capabilities.
    Mr. Abercrombie. We noted in your statement that there is a 
significant increase in Class A flight mishaps in FY 2008 compared to 
this time last year, and that you see no trends in causal factors at 
this time, but that Navy leadership has addressed a message to every 
Naval aviator emphasizing a--``back to basics'' operational risk 
management initiative. Please expand on what this ``back to basics'' 
message is, and how you believe this will help to lower the number of 
Class A mishaps.
    Admiral Myers. Thus far in FY 2008, we have had 10 Class ``A'' 
flight mishaps resulting in five fatalities and 11 lost aircraft, which 
when annualized at our current rate (20 mishaps) is above the norm for 
the past 10 years (average of 16.5 Class A flight mishaps per year). 
The causal factors for the Class A's cross the full spectrum of Naval 
Aviation mishap characterizations including G-induced Loss Of 
Consciousness (G-LOC), mid-air collisions, material failure, bird 
strike, several instances of Controlled Flight Into Terrain (CFIT), and 
loss of situational awareness. As part of the ongoing effort to arrest 
the rising mishap rate we have taken the following action:

      Commander Naval Air Training Command directed a 
Professional Excellence Standdown on 17 March.

      Commander Naval Air Forces (CNAF) took the following 
actions:

          Sent a ``Personal For'' message on 16 February to Naval 
        Aviation's Commanders, Commodores, Carrier Air Wing Commanders, 
        Commanding Officers, and Officers in Charge reemphasizing the 
        importance of getting back to the basics of naval aviation.

          Sent a ``Focus on Safety--Back to Basics'' message on 25 
        February for all of Commander Naval Air Forces commands to 
        reiterate the importance and focus on safety and the founding 
        principles of Naval Aviation--``Aviate, Navigate and 
        Communicate.'' Commander Naval Air Forces reiterated his 
        direction to refocus our aircrew and stick to our proven 
        Tactics, Techniques and Procedures (TTPs), Naval Aviation 
        Training and Operations Procedures Standardization (NATOPS), 
        Standard Operating Procedures (SOPs), and other guidance to 
        ensure safe mission accomplishment.

          Intend to direct a ``strategic human factors review'' at 
        the unit level for a comprehensive look at basic aviation 
        skills training and aircrew performance and aptitude. Details 
        are being finalized and will be presented at the O-6 Commanders 
        Conference in April. CNAF will begin the review shortly after 
        the conference and follow up with actionable feedback prior to 
        the end of May.

          Developing a Strategic Communications Plan to ensure 
        CNAF message regarding operational excellence is understood at 
        every level. The plan is currently in initial draft.

    Specifically, the Back to Basics message was provided for an 
awareness of the ongoing problem of basic mistakes made. The Commander 
Naval Air Forces wants every aviator to be aware of the issue and that 
each individual is responsible for leading Naval Aviation to 
excellence. By itself the message will do little however, it is part of 
the larger drumbeat, the other measures included above, that continues 
in the effort to keep the leadership focused and informed.
    Mr. Abercrombie. Mr. Balderson, you mention in your statement that, 
with respect to a competitive JSF engine program, ``projected savings 
from not doing competition outweigh the investment and sustainment 
costs.'' We also understand the Department of Defense has budget 
pressures and believes that there are higher priority needs, but given 
the importance of the JSF to address that Navy's strike fighter 
shortfall, how do you view the benefits of competition including better 
engine performance, improved reliability, increased contractor 
responsiveness, a more robust industrial base, and improved operational 
readiness of a two-engine JSF propulsion program?
    Mr. Balderson. The conclusions of all three 2007 Congressionally-
directed engine studies are supportive of competition in general, but 
do not obviate the Department's initial findings that the expected 
savings from competition do not outweigh the investment costs. The 
Department agrees that cited non-financial benefits have merit. 
Affordability is also a consideration for the Department.
    Mr. Abercrombie. You mentioned in your statement that the B-52 
Stand-off Jammer program was canceled in December 2005, which 
``jeopardized the ability of the Air Force to meet stand-off jamming 
requirements by 2012.'' You mention that as a result of this, that the 
Air Force proposed the core component jammer program, but that is it 
unfunded to date. Will that Air Force be able to meet stand-off jamming 
requirements by 2012? If not, how will the Air Force compensate for 
this lack of capability?
    General Darnell. The AF will be unable to achieve a stand-off 
jamming capability prior to 2012; however, we are still exploring the 
stand-off jamming mission through tech maturation efforts and possible 
FY10 program funding efforts.
    That being said, our mitigation plan includes the fielding of a 
stand-in jammer and decoy capability (MALD-J/MALD), the use of stealth 
capabilities (F-22/F-35), and the development of CONOPS to incorporate 
these capabilities. MALD is on schedule for fielding in FY10, but is 
contingent upon Congressionally deferred PBO8 War Consumable funds 
being replaced in the FY08 GWOT Supplemental. MALD-J is scheduled for 
fielding by FY 2012.
    Mr. Abercrombie. We note that your Class A mishap rate is 12 as 
compared to 10 at this time last year, and that like that Navy, you 
have also instituted a ``back-to-basics'' approach with a hard look at 
risk assessment techniques. Please further describe this approach and 
how you believe it may help to alleviate the rising Class A mishap 
rate.
    General Darnell. AF Safety has asked commanders at all levels to 
step up emphasis on a back-to-basics approach--a hard relook at our 
risk assessment techniques, to ensure our Airmen understand that rules 
and tech data are the life blood of doing things the right way. This 
approach emphasizes and evaluates Airmen's adherence to established 
normal and emergency procedures, checklist discipline, and general book 
knowledge and expertise.
    This approach reviews and emphasizes better and appropriate 
decision-making at all levels during normal and time-critical scenarios 
for our operations and maintenance Airmen. Our Airmen must be able to 
accurately and swiftly consider the risks of their activities, weigh 
whether the mission goals warrant the risk, assess whether risk 
mitigation factors are viable and in place, and make sound and solid 
decisions about whether to proceed or halt the activity. If needed, 
appropriate levels of command must decide to accept--or not accept--the 
risk. This applies whether patrolling the skies and streets of Baghdad, 
working the flight line at home station, or playing on the lake during 
spring break.
    Human factors continue to dominate our mishap causal factors, 
consistently accounting for 67% of the last 11-years' mishaps. Specific 
areas include adherence to procedural guidance, channelized attention, 
procedural error, and decision-making during operations. These 
observations are also consistent with similar observations across the 
aviation industry, and apply to all of our aircraft types. Experience 
has shown that human factors mishaps can be prevented through continued 
training and emphasis on the ``basics''.
    Mr. Abercrombie. The GAO recommends revisiting JSF's mid-course 
risk reduction plan which has removed two test aircraft, streamlined 
staffing, and proposes to use test assets more efficiently. Also, the 
GAO recommended that the JSF program revise its cost estimate. Do you 
agree with these recommendations?
    Secretary Young. The Mid-Course Risk Reduction (MCRR) plan is a 
cost effective approach to managing the Joint Strike Fighter (JSF) 
program within the budget and with manageable risk. I approved the MCRR 
plan with the knowledge that we would monitor the effects and risks to 
the program. MCRR makes enhanced use of extensive ground test 
facilities and a flying test bed to accomplish many test points. 
Further, the two test aircraft removed were flying qualities aircraft, 
not avionics and mission systems test aircraft. MCRR decisions did not 
significantly increase testing and actually helped reduce the flight 
testing workload through the efficient use of other test assets. The 
Department established metrics to evaluate contractor Management 
Reserve replenishment and use, manufacturing line progress, and 
developmental testing progress and impacts. The metrics are updated 
monthly and I am prepared to adjust the program's assets if MCRR has a 
negative impact in any of these areas.
    The Department is updating the JSF cost estimate through a joint 
Service team being led by the Department's Cost Analysis Improvement 
Group. The update will be used to support the Department's FY 2010 
budget process.
    Mr. Abercrombie. You mention that a decision must be made on F-22 
production by November to avoid increased costs. What will be the 
increased costs if the decision is made when the new Administration 
takes office after January 2009?
    General Hoffman. Unless additional aircraft buys are authorized by 
November 2008, the F-22 production line will begin to shut down. While 
the last aircraft delivery is scheduled for December 2011, the vendor 
base for subcomponents completes deliveries as early as late 2008. The 
cost impact due to a production line break would depend on the duration 
of that break. Once suppliers begin their shutdown activities, the 
highly-skilled workforce currently working on the F-22 will begin to 
transition to other programs. Some components will require redesign and 
any new suppliers will have to be qualified to deal with increasing 
diminishing manufacturing sources. If the new Administration elects to 
add Advanced Procurement for additional F-22s to the FY10 PB, the 
production break will be at least 11 months. There is an on-going RAND 
study to determine the costs and feasibility of restarting F-22 
production after plant shutdown (Estimated Completion Date: May 08).
    Mr. Abercrombie. Mr. Secretary, you noted in your prepared 
statement that the Department did not direct the Cost Analysis and 
Improvement group to update their analysis of a one and two engine JSF 
program last year and that there have been no significant changes to 
the program that would have resulted in any changes to their findings. 
Given the fact that there were two F135 engine test failures in the 
past year, both associated with the first-to-need STOVL variant, and 
the F136 engine has progressed an additional year after the Congress 
authorized and appropriated and additional $480 million last year, 
wouldn't an evaluation of costs, schedule, and performance reveal 
changes in the value of a competitive engine program to some degree 
since last year?
    Secretary Young. The Department strongly supports the many 
advantages that competition provides. However, an F-35 competitive 
engine program would cost an additional $1.4 billion to complete 
development and $1.7 billion, through Fiscal Year 2015, to establish 
production. In a constrained budget environment, the funds required for 
a competitive engine program must compete with other priorities as the 
Department seeks to provide the best taxpayer value in submitting the 
Defense budget. The Department will review all aspects of the F-35 
program, to include the F135 engine and the F136 engine, as it prepares 
the FY 2010 budget for submission, and will continue to obligate and 
expend the funds appropriated by Congress as authorized.
    Mr. Abercrombie. The Secretary of Defense, testifying before this 
committee on February 6th of this year, stated that he would review the 
development and procurement of a competitive F-35 engine in light of 
recent F135 engine test failures. Has he completed that review? If so, 
what did he conclude?
    Secretary Young. The Department acknowledges risks associated with 
a single source provider of the F-35 propulsion system but believes the 
risks are manageable. The Department is reviewing the F135 engine 
program as a precursor to releasing funds for the six F-35 Short Take-
Off and Vertical Landing aircraft in the FY 2008 Low Rate Initial 
Production Lot 2 contract. The Department will review all aspects of 
the F-35, to include the F135 and the competitive F136 engine, during 
the FY 2010 budget process.
    Mr. Abercrombie. Secretary Young, In your written testimony, you 
state that the Department believes that the C-17 production line should 
not be kept open; however, the Department removed $217.6 million that 
was to be used for production line shutdown from its FY 2009 budget 
submission. Additionally, OSD Comptroller officials have stated that 
the Department intends to leave the shutdown decision to the next 
Administration. Can you explain the difference in your written 
testimony compared to the actual actions of the Department regarding 
the C-17 production line shutdown decision?
    Secretary Young. The Department maintains a disciplined approach in 
analyzing capability requirements through the Joint Capabilities 
Integration Development System and validated through the Joint 
Requirements Oversight Council. The Quadrennial Defense Review (QDR) 
then determines force structure requirements to provide the 
capabilities needed to meet the National Military Strategy. In the last 
QDR, multiple studies indicated that we need to procure fifth 
generation aircraft to address advanced aircraft and surface-to-air 
missile threats. The DoD program contains a robust mix of fifth 
generation F-22s and F-35s in quantities sufficient to prevail against 
a range of potential foes. The QDR also balances those force structure 
requirements within a comprehensive budget plan and I believe the 
tactical air force structure programmed in the FY 2009 budget 
submission will provide a very capable force and meet the requirements 
for the National Military Strategy.
    Mr. Abercrombie. Secretary Young, You may be aware that the 2005 
MCS is considered incomplete in its analysis and recommendations by the 
GAO and many in Congress because: It did not take into account the end 
strength increases of 92,000 personnel for the Army and Marine Corps; 
it did not consider any mobility requirements of the Army's Future 
Combat System and Modularity concept of employment; it did not consider 
the fact that the Army Manned-Ground Vehicle is too large to be 
transported by a C-130 aircraft; it did not consider the 159% over-
utilization rate of the current fleet of C-17 aircraft; it did not 
consider the use of C-17s in multi-use roles for which the C-17 is 
being used extensively in current operations; and, it did not have or 
use historical mobility forces operational data in its analysis to 
verify actual mobility requirements and operations. Did you account for 
all these factors when determining whether or not to keep the C-17 
production line open?
    Secretary Young. The Department believes that the Mobility 
Capabilities Study (MCS) 2005 provides a sound basis for strategic 
airlift planning. In response to your specific issues with the report, 
I would note the following: The Department has studied the effects of 
the ground troop end strength increases, and concluded that, because 
these ground forces increases did not change the overall wartime 
defense strategy, there was no change in peak strategic airlift demand. 
The movement of Army heavy equipment is largely made by pre-positioning 
or via sealift. Again, the Department does not anticipate that the 
timing and quantity of any required air movement of these types of 
assets will drive an increase in the peak airlift demand. Our analysis 
indicates that the over utilization of C-17s is actually 106 percent. 
If the fleet continues to fly at this rate throughout its service life, 
we would need to recapitalize the fleet somewhat sooner. However, over 
history our airlift fleet is underutilized. Modest over utilization of 
the fleet for a few years will likely be balanced by periods of 
underutilization. The Department did examine multi-use roles of the C-
17 in MCS 2005, including direct delivery, intra-theater missions, and 
tactical operations. Historical. analysis was used for the study where 
it was appropriate to do so. Overall, however, the scenarios envisioned 
in the MCS were much more demanding than the actual operations that 
mobility forces have historically flown. Indeed, the scenarios used in 
MCS, and the closely spaced timing of these scenarios, may very well 
overstate the airlift requirement.
    Mr. Abercrombie. Secretary Young, We understand your written 
testimony to be inaccurate in describing what the 2005 MCS stated about 
the Department's required C-5 inventory to meet strategic airlift 
requirements. Your testimony states that the 2005 MCS concluded that a 
``fleet of 112 modernized C-5s, provided sufficient strategic airlift 
capacity'' when it actuality, the 2005 MCS states that a fleet of ``112 
modernized and reliability improved C-5s'' meets the Department's 
airlift and strategic airlift requirements. Can you explain why the 
``reliability improved'' phrase was excluded from your written 
testimony when referencing 2005 MCS findings and recommendations? Given 
the fact that only 52 of the Air Force's 111-aircraft C-5 fleet will 
receive the reliability enhancement and re-engining program, do you 
view the reduced availability of the remaining 59 C-5 aircraft 
problematic in meeting the Department's airlift requirements and how 
does this factor into your opinion to close the C-17 production line?
    Secretary Young. The Mobility Capabilities Study (MCS) 2005 
findings are based on total fleet capability. With minor exceptions, 
the C-17s and C-5s are fungible assets. The MCS recommendations for 180 
C-17s and 112 modernized and reliability improved C-5s is but one 
combination of strategic airlift that meets the projected demand. Since 
the completion of the MCS, 10 additional C-17s have been appropriated 
by Congress. Subsequent analysis performed in support of the C-5 
Reliability Enhancement and Re-engining Program (RERP) Nunn-McCurdy 
process identified total organic oversized and outsized airlift fleet 
capacity at 33.95 Million Ton Miles per Day (MTM/D), as informed by the 
MCS analysis. That analysis also shows that 189 C-17s (one of the 190 
is committed to NATO) and 111 C-5s (including 52 RERP'd C-5s) meet the 
JROC-validated requirement during surge operations with acceptable risk 
and that no other alternative provided greater capability at less cost. 
I would also point out that the programmed fleet represents a 
significant improvement over our current fleet, since we currently have 
taken delivery of only 171 C-17s and none of the C-5 fleet has been 
RERP'd. At this time, I do not believe that the entire C-5 fleet needs 
to be RERP'd to meet our strategy. However, the option of completing 
RERP on the remaining C-5As in the future is a potential source of 
additional airlift capacity should the strategy change in such a way as 
to demand more airlift. Further, there is great potential to get more 
operational utility from the C-5 aircraft through increasing spares and 
maintenance relative to the levels planned under the assignment of 
these aircraft to Reserve units. Finally, as part of the C-5 decision, 
the Air Force was directed to pursue Lean Six Sigma efforts to aid C-5 
maintenance and operations, potentially yielding even greater airlift 
capacity.
    Mr. Abercrombie. The Navy's statement includes the current UH-1Y/
AH-1Z procurement objective of 180 AH-1Zs and 100 UH-1Ys. Do you expect 
the quantities of helicopters to increase as you evaluate the impact of 
increasing the Marine Corps end strength of 202,000? If so, by how many 
helicopters?
    General Trautman. The Marine Corps has requested the H-1 Upgrades 
Acquisition Program Baseline (APB) Program of Record to increase to 226 
AH-1Zs and 180 UH-1Ys in order to support the USMC end strength 
increase to 202K. The request is supported by Marine Requirements 
Oversight Council Decision Memorandums 44-2007 dtd 29 May 07 and 51-
2007 dtd 9 Jul 07.
    Documentation reflecting the increased quantities will be revised 
in time to support the Full Rate Production decision review scheduled 
for the fourth quarter FY08.
    Mr. Abercrombie. Mr. Secretary, in our February 27th letter to you 
inviting you to testify here today, we asked that you articulated views 
of the required tactical air force structure compared to the programmed 
tactical air force structure and whether you believe the programmed 
force structure meets requirements for the National Military Strategy. 
However, we noted that this request is missing from your statement. 
Could you comment on this for the subcommittees?
    Secretary Young. The Department maintains a disciplined approach in 
analyzing capability requirements through the Joint Capabilities 
Integration Development System and validated through the Joint 
Requirements Oversight Council. The Quadrennial Defense Review (QDR) 
then determines force structure requirements to provide the 
capabilities needed to meet the National Military Strategy. In the last 
QDR, multiple studies indicated that we need to procure fifth 
generation aircraft to address advanced aircraft and surface-to-air 
missile threats. The DoD program contains a robust mix of fifth 
generation F-22s and F-35s in quantities sufficient to prevail against 
a range of potential foes. The QDR also balances those force structure 
requirements within a comprehensive budget plan and I believe the 
tactical air force structure programmed in the FY 2009 budget 
submission will provide a very capable force and meet the requirements 
for the National Military Strategy.
    Mr. Abercrombie. Mr. Secretary, as you know, section 213 of the 
National Defense Authorization Act for FY 2008 directed the Department 
to ensure the ``obligation and expenditure in each fiscal year of 
sufficient annual amounts for the continued development and procurement 
of two options for the propulsion system for the Joint Strike 
Fighter.'' However, you state in your written testimony that the 
Department will ``ensure that in each fiscal year where funds are 
appropriated there is obligation and expenditure of sufficient 
amounts.'' Do you believe this answer is consistent with the intent of 
Congress to take the actions necessary to develop and procure two 
options for the Joint Strike Fighter's propulsion system? How does the 
OSD General Counsel view the Department's conformance with section 213 
by not including funds in the budget request for a competitive JSF 
engine?
    Secretary Young. The President's annual budget request recommends 
for congressional consideration such measures as the President shall 
judge necessary and expedient. The Department will comply with section 
213 of the National Defense Authorization Act for Fiscal Year 2008. We 
will ensure that, in each fiscal year for which funds are appropriated 
for the Joint Strike Fighter (JSF) program, sufficient amounts are 
obligated and expended for continued development and procurement of two 
options for the JSF propulsion system.
    Mr. Abercrombie. You mentioned in your opening statement that the 
Department assessed the risks of the mid-course risk reduction plan, 
including the deletion of two test aircraft, as manageable since LRIP 
aircraft could be used if test validation and verification efficiencies 
were not realized. Will these aircraft be effective for the test 
mission if they are not specifically constructed with the test wiring 
and other systems necessary to most efficient capture test data? 
Additionally, do you see force structure problems in using LRIP 
aircraft for test missions rather than operational missions?
    Secretary Young. A select number of early low rate initial 
production aircraft will be instrumented with requisite test wiring and 
other systems similar to that of our developmental test aircraft. The 
instrumentation included in these select aircraft was a requirement of 
the operational test community to assist them in proper evaluation of 
the F-35 during Initial Operational Test and Evaluation. We do not 
anticipate creating any force structure issues by using one of twenty 
Operational Test aircraft for a short duration while finishing 
developmental testing prior to commencement of operational testing.
    Mr. Abercrombie. You mention in your statement that four additional 
F-22A aircraft to be requested in the FY 2009 supplemental ``will 
provide production line flexibility.'' At a current production rate of 
20 aircraft per year, this appears to be only two and a half moths of 
production. How do you believe this will provide production line 
flexibility?
    Secretary Young. The Department is working with the Air Force to 
determine the necessary actions required to keep the F-22A production 
line viable so that a new Administration, as it looks at the Defense 
budget and priorities, can make the decision to expand or not to expand 
the F-22A force.
    Mr. Abercrombie. We understand the supplemental budget request will 
include four F-22As, but this would amount to only two and a half 
months of production at the current rate of 20 aircraft per year. How 
will these four additional F-22s keep the production line open as you 
state in your testimony?
    General Hoffman. The supplemental extends production by two to 
three months by continuing the fabrication of parts at the supplier 
level. Once the parts necessary for the four aircraft are finished, 
those suppliers will shut down. A production break will ensue until the 
new administration chooses to procure additional F-22As.
    Mr. Abercrombie. We understand that the Department of Defense won't 
budget for a competitive JSF engine due to higher priority funding 
needs. What is the Air Force opinion of whether the benefits of the 
competitive engine program outweigh the costs?
    General Hoffman. The Air Force continues to believe the risks 
associated with a single source engine supplier are manageable and do 
not outweigh the investment required to fund a competitive alternate 
engine. However, the Air Force and Navy are executing the $480M 
appropriated by Congress in the 2008 budget to continue development. We 
completed the Critical Design Review for the alternate engine in 
February 2008 and we have completed over 300 hours of engine testing 
for the conventional takeoff and landing aircraft.
    Mr. Abercrombie. We understand that the Air Force has expressed a 
concern about a fighter inventory shortfall potentially beginning in 
the 2017 timeframe, but that includes service life extension programs 
for the A-10, F-15E and the 177 F-15C/Ds (so called ``Golden Eagles''). 
Are life extension programs for these aircraft fully funded in the FY 
2009 budget request and in the future years defense program?
    General Darnell. The A-10 has a two-fold approach to extend its 
service life to 16,000 hours. First, an intensive aircraft inspection 
is accomplished at 8,000 hours to strengthen or replace key structural 
components. Thereafter, aircraft undergo a structural service 
inspection every 2,000 hours. Second, the A-10 wing replacement program 
is replacing existing thin-skin wings with new thick-skin wings. The 
wings program is currently funded to replace 228 of 242 thin-skin 
wings. There are 14 wings and 3 spares on the FY09 unfunded 
requirements list.
    The F-15 does not have an official Service Life Extension Program 
(SLEP) nor is one programmed; however, aircraft receive extensive 
inspections at depot every 6 years. The 2 Nov 07 mishap led to a 
thorough evaluation of previous F-15 fatigue testing. The evaluation 
has recommended a complete aircraft teardown, full-scale fatigue test, 
and other safety modifications. This testing will require FY09 and 
future years funding which is not currently identified.
Failure modes discovered during the full-scale fatigue test could 
potentially lead to a SLEP requirement. From inspections following the 
mishap, nine aircraft were discovered to have longeron cracks. Five of 
these will undergo longeron replacement, while four will be retired due 
to their existing near-term retirement date. Recurring longeron 
inspection criteria is being developed for all F-15A-D aircraft. The F-
15 is the next aircraft to be assessed by the Fleet Viability Board 
(FVB). The FVB will forecast operational health and structural 
viability of the F-15C/D for the next 20+ years. The FVB independent 
technical assessment will inform sustainment and retirement decisions.
    Mr. Abercrombie. We note that the CSAR-X program has undergone a 
two-year delay due to GAO protests. Based on this delay, we understand 
that the 101 HH-60Gs will be required to last an additional two years. 
Is the HH-60G modification budget in FY 2009 and in the FYDP fully 
funded to meet CSAR requirements?
    General Darnell. HH-60G funding is sufficient to meet current 
requirements; however, additional outyear funding may be required if 
CSAR-X is further delayed.
                                 ______
                                 
         QUESTIONS SUBMITTED BY MR. ABERCROMBIE AND MR. TAYLOR
    Mr. Abercrombie. and Mr. Taylor. 1. Engine Competition--Do you 
believe life-cycle savings comparable to the past F100 and F110 
competition axe achievable for the JSF?
    Mr. Sullivan. It was a pleasure appearing before your subcommittees 
on March 11, 2008 to discuss the Joint Strike Fighter (JSF).\1\ This is 
our response. Our recent report on the JSF provides more details on 
these and other related issues.\2\
---------------------------------------------------------------------------
    \1\ GAO, Joint Strike Fighter: Impact of Recent Decisions on 
Program Risks, GAO-08-569T (Washington, D.C.: Mar. 11, 2008).
    \2\ GAO, Joint Strike Fighter: Recent Decisions by DOD Add to 
Program Risks, GAO-08-388 (Washington, D.C.: Mar. 11, 2008.
---------------------------------------------------------------------------
    Our analysis shows that it is reasonable to assume that competitive 
pressures would yield enough financial savings to offset the costs 
associated with ensuring competition, given the current number of 
engines to be procured, length of the program, and expected costs to 
operate and support the engines. We believe it is reasonable to assume 
at least this much savings (9 to 11 percent) based on past analysis of 
actual data from past competitions, including the F-16 engine 
competition. While we did not do a detailed comparison between the JSF 
and F-16 engine competitions, we believe the JSF competitive engine 
program with the proper structure and attention, and up-front 
investments, may achieve life-cycle savings rates similar to the F-16 
competitive engine program. Additionally, there are a number of non-
financial benefits that may result from competition, including better 
performance, increased reliability, and improved contractor 
responsiveness, that should be taken into strong consideration.
    Mr. Abercrombie. and Mr. Taylor. 2. JSF Plans and Use of Management 
Reserves (a) How did the program deplete reserves and why are 
additional funds necessary?
    Mr. Sullivan. The Joint Strike Fighter program used its management 
reserves much faster than expected to pay for development cost 
increases and schedule delays, which were the consequences of the late 
release of engineering drawings, manufacturing taking longer than 
planned, and late delivery of parts from suppliers. These in turn 
contributed to continuing cost and schedule impacts in the manufacture 
of development test aircraft, including extensive and inefficient out-
of-station work and delays in the manufacturing schedule. By mid-2007, 
the aircraft development contract had completed one-half of the amount 
of work scheduled, but had expended two-thirds of the budget, depleting 
a large portion of the reserves. Figure 1 shows how management reserves 
totaling almost $1.5 billion were applied since the major restructuring 
of the program in 2004.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    Management reserves are budgeted funds set aside for unanticipated 
development challenges and for known and unknown cost risks. 
Maintaining an adequate level of reserves throughout system development 
is prudent. At development start, the JSF program budgeted reserves at 
10 percent of contract value and expected to draw on them at about the 
same rate as contract execution. This proved insufficient as the design 
and manufacturing problems noted above decreased management reserves to 
about $400 million in 2007, less than half the amount officials 
believed necessary to complete the remaining 6 years of development. 
Moving forward, the program faced significant manufacturing and 
software integration challenges, costly flight testing, and $950 
million in other known cost risks. This presented the program with a 
likely untenable contract overrun in 2008 if no action was taken. 
Officials decided not to request more funding, and instead adopted a 
mid-course plan that reduced test assets and made other changes in 
order to replenish reserves to about $1 billion-the amount officials 
believe will be needed to complete development in October 2013.
    Mr. Abercrombie. and Mr. Taylor. (b) What could have been done to 
prevent, or at least mitigate, the setbacks in design and manufacturing 
that precipitated the depletion of management reserves?
    Mr. Sullivan. The JSF started system development before requisite 
technologies were ready, started manufacturing test aircraft before 
designs were stable, and moved to production before flight tests had 
adequately demonstrated that the aircraft design meets performance and 
operational suitability requirements. We previously reported that the 
JSF acquisition strategy incorporated excessive overlap in development 
and production, posing substantial risks for cost overruns, schedule 
slips, and late delivery of promised capabilities to the warfighter.\3\ 
The outcome was a cascading effect from late engineering drawings, 
numerous changes to drawings, late standup of suppliers, parts 
shortages, and delayed, inefficient manufacturing with substantial out-
of-station work.
---------------------------------------------------------------------------
    \3\ GAO, Joint Strike Fighter: Progress Made and Challenges Remain, 
GAO-07-360 (Washington, D.C.: March 15, 2007).
---------------------------------------------------------------------------
    We find much the same behavior, and poor outcomes, in many major 
defense programs that do not adequately follow evolutionary, knowledge-
based acquisition practices. Our recent assessment of 72 weapon systems 
found that none of them proceeded through system development meeting 
the best practices standards for mature technologies, stable designs, 
or mature manufacturing processes by critical junctures of the 
program.\4\ Figure 2 is a notional illustration, relevant to the JSF 
and other major weapon systems. It shows the negative cost and schedule 
impacts from a highly concurrent acquisition strategy that proceeds 
without requisite knowledge and compares it with an acquisition 
strategy with less concurrency that captures key design and 
manufacturing data before production begins.
---------------------------------------------------------------------------
    \4\ GAO, Defense Acquisitions: Assessments of Selected Weapon 
Systems, GAO-08-467SP (Washington, D.C.: March 31, 2008).

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    Mr. Abercrombie. and Mr. Taylor. (c) What do you see as the 
benefits and/or risks associated with DOD's decision to go ahead and 
implement its Mid-Course Risk Reduction Plan?
    Mr. Sullivan. The mid-course plan may relieve short-term funding 
pressures but at the cost of increased future risks to cost and 
schedule. Adequate management reserves throughout the development 
period are essential to handle new and unforeseen problems. 
Replenishing them likely avoided a cost overrun this year. However, we 
believe it likely that DOD will need to eventually restructure and add 
more money and time to development, a critical issue that should be 
addressed now rather than one or two years from now.
    The Director, Operational Test and Evaluation, and officials from 
other prominent defense offices perceived the plan as too risky because 
it does not provide adequate resources for development testing or 
resolve systemic problems that depleted management reserves. With 
reduced capacity and fewer flights, the time to complete development 
effectively will get more and more compressed, affecting the planned 
start of operational testing in 2012 and production decisions in 2013. 
The mid-course plan's reduction of test resources will likely result in 
design and performance problems not being found until late in 
development during operational testing and after considerable numbers 
of aircraft have been ordered. This would likely make fixes more 
expensive, requiring retrofit of already-built aircraft, and delays 
getting aircraft to the warfighter.
    We also note that the mid-course plan to reduce flight tests relies 
more on computer modeling and simulation and laboratories. However, the 
specific details on exactly how this will be done have not been 
finalized. The Rand Corporation reported in a study on testing and 
evaluation that modeling is not a substitute for flight testing.\5\ 
Rand found that even in performance areas that are well understood, it 
is not unusual for flight testing to uncover problems that were not 
apparent in simulations. Examples include flight effects on the wing of 
the F/A-18E/F and buffeting of stores externally carried by various 
aircraft.
---------------------------------------------------------------------------
    \5\ Rand Corporation, Test and Evaluation Trends and Costs for 
Aircraft and Guided Weapons (Santa Monica, California, 2004).
---------------------------------------------------------------------------
    Mr. Abercrombie. and Mr. Taylor. 3. JSF Cost Estimate--Can you shed 
further light on your concerns with the program's cost estimate? What 
is the basis for your concerns?
    Mr. Sullivan. In our latest report on the JSF, we determined that 
the official program cost estimate is not reliable when judged against 
best practice standards used in the federal government and industry.\6\ 
Specifically, the program cost estimate (1) is not comprehensive 
because it does not include all applicable costs, including $6.8 
billion for the alternate engine program; (2) is not accurate because 
some of its assumptions are overly optimistic and not supportable--such 
as applying a weight growth factor only half as large as historical 
experience on similar aircraft--and because the data system relied upon 
by the prime contractor and the program office to report and manage JSF 
costs and schedule is deficient; (3) is not well documented in that it 
does not sufficiently identify to cost analysts the primary methods, 
calculations, results, rationales and assumptions, and data sources 
used to generate cost estimates; and (4) is not credible according to 
three independent defense offices who all have concluded that program 
cost estimates are understated by as much as $38 billion and that the 
development schedule is likely to slip from 12 to 27 months.
---------------------------------------------------------------------------
    \6\ GAO-08-388. Appendix II provides a detailed analysis of our 
concerns about the reliability of the program office cost estimate.
---------------------------------------------------------------------------
    We were concerned that, despite these findings and all the 
significant events and changes that have occurred since the start of 
system development in 2001, DOD did not intend to accomplish another 
fully documented, independent total program lifecycle cost estimate for 
another 6 years. Because of the size of this acquisition, its impact on 
our and allied tactical air forces, and the unreliability of the 
current estimate, we recommended that an immediate new and independent 
cost estimate and an uncertainty analysis be done to more firmly 
establish funding requirements needed to complete development and to 
provide more confidence in the fidelity of the procurement cost 
estimate as production ramps up. DOD concurred and said that a new 
comprehensive and independent estimate is underway but did not believe 
an uncertainty analysis was needed.
    Although the new JSF Selected Acquisition Report, dated December 
2007, indicates that development and procurement costs have remained 
relatively stable from the prior year, we continue to believe that 
costs will increase significantly in the future, perhaps with the new 
comprehensive estimate being readied for the fiscal year 2010 budget 
cycle. The design and manufacturing problems that gave rise to cost and 
schedule increases and depleted management reserves will continue to 
exert pressure. The program does not expect a quick turnaround in 
production line efficiency with cost pressures persisting well into 
2009.
    There are other indicators that acquisition costs will 
substantially increase from what is now being reported to Congress. 
Specifically:

      DOD has identified billions of dollars in unfunded 
requirements that are not in the program office estimate, including 
additional tooling and procurement price hikes.

      A new manufacturing schedule indicates continued 
degradation in the schedule and further extends times for first 
flights.

      Both the aircraft and engine development contracts have 
persistent, substantial cost variances that cost analysts believe are 
too large and too late in the program to resolve without adding to 
budget.

      As discussed above, officials at three defense 
organizations independent of the JSF program office stand by their 
assessments that the program office's cost estimate is significantly 
understated and the current schedule unlikely to be achieved.

    Mr. Abercrombie. and Mr. Taylor. 4. JSF Challenges--With 90 percent 
of its planned investment remaining, what are some additional concerns 
and risks for the program is it moves forward?
    Mr. Sullivan. Only about halfway through its planned development 
period, the JSF is in its most challenging phase as it seeks to 
finalize three designs, mature manufacturing processes, conduct flight 
tests, and ramp up production toward a full-rate production decision in 
2013. The JSF program's acquisition strategy includes significant 
challenges to achieve projected cost and schedule goals. The program 
has begun procurement but not yet demonstrated that the aircraft design 
is mature, can be manufactured efficiently, and can be delivered on 
time. The flight test program has just begun, and there is always risk 
of problems surfacing and causing further delays. The degree of 
concurrency between development and production in the JSF program's 
acquisition strategy poses significant risks of cost and schedule 
overruns and late delivery of promised capabilities to the warfighter:

    Specific challenges:

      Keeper aircraft affordable. From its outset, the JSF goal 
was to develop and field an affordable, highly common family of strike 
aircraft. Rising prices and somewhat lower commonality than expected 
raise concerns that the United States and its allies may not be able to 
buy as many aircraft as currently planned. Rising prices erode buying 
power, likely resulting in reduced quantities and delaying the delivery 
of promised capabilities to the warfighter. Average unit procurement 
costs are up 27 percent since a major restructuring in 2004 and up 51 
percent since the start of system development in October 2001.

      Annual funding reguirements. The program places an 
unprecedented demand on the defense budget for an average of about $11 
billion a year for the next two decades-with attendant funding risk 
should political, economic or military conditions change. The JSF will 
have to annually compete with other defense and nondefense priorities 
for the shrinking discretionary federal dollar. To complete the 
acquisition program as currently planned, JSF will require about $269 
billion from 2008 through 2034. Annual funding requirements for 
procurement increase rapidly as production ramps up to the full-rate 
production decision expected in October 2013. During the peak years of 
production, JSF procurement funding requirements are expected to 
average about $12.5 billion per year for the 12-year period spanning 
fiscal years 2012-2023. The program is so large that even small cost 
increases have significant budget consequences.

      Operating and support costs. Once fielded, the 
maintenance and operation of the JSF fleets will require large annual 
outlays. Assuming the current operating and support cost estimate, the 
quantities now planned, and an expected 8,000hour service life for each 
aircraft fielded over time, DOD would incur outlays of nearly $29 
billion annually. DOD sharply increased its projection of JSF operating 
and support costs compared to previous estimates. The December 2007 SAR 
projected operating and support costs for all three variants at $764.1 
billion, up from $650.3 billion in the last year, and more than double 
the $346.7 billion amount shown in the December 2005 SAR. The operating 
cost per flying hour for the JSF conventional takeoff and landing 
variant is now estimated to be greater than current flying hour cost 
for the F-16, one of the legacy aircraft to be replaced.

      Containing weight growth. Weight growth early in the 
program was the most significant factor causing a $10 billion cost 
increase and an 18-month extension in development. As designs continue 
to mature and flight testing intensifies, maintaining weight within 
limits to meet warfighter capability requirements will pose a 
continuing challenge to cost, schedule, and performance goals. Aircraft 
weight generally continues to increase during the balance of the 
development period; an OSD official told us that half of all weight 
growth during the development effort can be typically expected after 
first flight but prior to initial operational capability, and that 
additional small but persistent weight increases can be expected during 
the aircraft's service life. First flight of a productionrepresentative 
JSF has not yet occurred, and weight is running very close to the 
limits as evaluated by engineering analyses and trend extrapolation.

      Unsettled quantities and mix of aircraft. The current JSF 
program shows a total of 680 aircraft to be procured by the Department 
of the Navy, but the allocation between the carrier variant and the 
short take off and landing variant has not been officially established. 
We observe that the Navy and Marine Corps have somewhat divergent views 
on the quantities, intended employment, and basing of JSF aircraft. The 
Navy wants the Marine Corps to buy some carrier variants and continue 
to man some of its carrier-based squadrons. The Marine Corps, however, 
wants to have a future strike force composed solely of the short take-
off and landing variant and has established a requirement for 420 
aircraft. During conflicts, the Marines plan to forward deploy JSFs to 
support the expeditionary ground forces.

      Navy and Marine Corps officials expressed concerns whether they 
can afford the quantities now planned at peak production rates. 
Officials told us last year that buying the JSF at the current planned 
rate--requiring a ramp-up to 50 by fiscal year 2015--will be difficult 
to achieve and to afford, particularly if costs increase and schedules 
slip. Officials told us that a maximum of 35 per year was probably 
affordable, given budget plans at that time.\7\
---------------------------------------------------------------------------
    \7\ GAO, Tactical Aircraft: DOD Needs a Joint and Integrated 
Investment Strategy, (GAO-07-415 (Washington, D.C.: Apr. 2, 2007).
---------------------------------------------------------------------------
    We look forward to our continuing work with your staffs on this 
extremely important and challenging program.
                                 ______
                                 
                   QUESTIONS SUBMITTED BY MR. MILLER
    Mr. Miller. It is my understanding that the Air Force (AF) Civil 
Engineering Support Agency predicts the heat signature of JSF 
operations, which is substantially higher than for any other aircraft 
in the inventory, will result in accelerated deterioration of airfield 
pavements at main operating bases, dual use commercial military 
airfields, such as Eglin AFB FL, and expeditionary airfields like those 
supporting the global war on terrorism. In addition to premature 
pavement failures, potentially, this could result in high instances of 
foreign object damage hazard to aircraft operations. Given the timing 
of beddown activities at Eglin AFB, what action is being taken that DoD 
develop a joint pavement solution to this situation?
    Secretary Young. The F-35 Program Office has been addressing the 
issue of heat generated by the F-35 Integrated Power Package (IPP), 
roll posts, and main engine for several years. Early in development, 
the program collected full scale F-135 engine data to better understand 
the external environment associated with Short Take-Off and Vertical 
Landing (STOVL) operations. In late 2007, one third sub-scale model 
test of the IPP was performed in the Lockheed Martin hot gas lab in 
which the IPP exhaust temperatures and velocities were quantified to 
better understand the impacts to the primary operating surfaces 
(concrete, asphalt, AM-2, ship steel and non-skid). Our initial 
assessment concluded it is possible that IPP and engine exhaust may be 
high enough to cause damage to these surfaces. We will continue to 
assess the impact of the F-35 on these operating surfaces as we begin 
flight test of the STOVL airplane later this summer.
    In the interim, we are working with the Services to develop 
mitigation plans should flight test show additional actions are 
required. One change already implemented for flight test is a software 
modification which prevents the IPP from entering one of the modes 
which could potentially damage asphalt. We are evaluating the 
acceptability of this particular mode for production airplanes.
    The largest concern is the temperatures created by the main engine 
during vertical landings. We are working with the Air Force Civil 
Engineering Support Agency, Naval Facilities Command, Office of Naval 
Research, and Air Force Research Laboratory on a joint pavement 
initiative to develop an improved heat resistant concrete. If 
successful, this initiative would develop a solution to mitigate the 
damage to concrete at bases such as Eglin Air Force Base, the first F-
35 Integrated Training Center, where pilots learn to execute F-35B 
vertical takeoffs and landings from concrete pads. Additional 
initiatives are looking at new coatings for expeditionary field matting 
and a more heat resistant non-skid surface for shipboard operations.
                                 ______
                                 
                  QUESTIONS SUBMITTED BY MR. LOBIONDO
    Mr. LoBiondo. In the event the F-22A buy remains at the current 
planned level of 183 planes, what is the plan for the 177 Golden 
Eagles? Will they remain in the USAF or will they be turned over to the 
Air National Guard for the Air Sovereignty Alert mission?
    General Darnell. If the F-22A buy remains at the current programmed 
level the Air Force will have to reassess the number of F-15Cs to keep 
in order to provide the required COCOM support to the National Military 
Strategy. The ability of the Air Force to reduce the F-15C fleet to 177 
Golden Eagles was predicated on a procurement of greater than 183 F-
22As. The F-15C Golden Eagle fleet will be used to supplement the F-
22As and will likely be called upon to forward deploy to support any 
type of large force conflict. Additional F-15Cs will need to remain in 
the inventory to provide the necessary force structure for the Air 
National Guard to perform their Air Sovereignty Alert mission. How the 
Golden Eagles are employed and by whom will be a function of the Total 
Force management practices. Through force management, the Air Force 
will closely monitor the service life and fleet health of its air 
defense-capable platforms to ensure support to ASA and expeditionary 
demands. Also we are continuing to study second and third order effects 
of the recent structural issues encountered by the F-15 aircraft to 
assess the impact to future fighter force structure.
                                 ______
                                 
                  QUESTIONS SUBMITTED BY MR. ELLSWORTH
    Mr. Ellsworth. The Navy in September 2000 designated the ALQ-214 
Integrated Defense Countermeasures (IDECMP as a core system requiring 
organic depot maintenance capability under Title 10, U.S. Code, Section 
2462. The system is currently supported by contractorprovided 
maintenance. The committee understands the total cost to stand up 
organic capability is $17.6 million but the Navy has not included any 
funding for this capability in its budget request. What is the Navy's 
plan for establishing organic depot maintenance capability for the 
IDECM system as required by law?
    Mr. Balderson. The ALQ-214 program began in 1995. The maintenance 
concept at the program start was Organizational to Depot, with the 
contractor performing as depot. The system was designated as Core in 
September of 2000. The Core logistics capabilities statute (10 U.S. C. 
Sec. 2464) requires establishment of organic depot capability by IOC + 
4 years. The system reached Initial Operational Capability (IOC) 
September 2004. The Depot Source of Repair (DSOR) analysis, completed 
in March 2007, resulted in selection of Naval Warfare Center Crane, 
Indiana, as the depot. The Navy continues working to identify funding 
resources for an organic depot capability. Due to fiscal constraints 
the requirement (approximately $17.6M) remains unfunded at this point.

                                  
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