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


                                     

                         [H.A.S.C. No. 110-42]

                                HEARING

                                   ON

                   NATIONAL DEFENSE AUTHORIZATION ACT

                          FOR FISCAL YEAR 2008

                                  AND

              OVERSIGHT OF PREVIOUSLY AUTHORIZED PROGRAMS

                               BEFORE THE

                      COMMITTEE ON ARMED SERVICES

                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS

                             FIRST SESSION

                               __________

                    AIR AND LAND FORCES SUBCOMMITTEE


                          meeting jointly with

             SEAPOWER AND EXPEDITIONARY FORCES SUBCOMMITTEE

                                   ON
 
       BUDGET REQUEST ON DEPARTMENT OF DEFENSE AIRCRAFT PROGRAMS

                               __________

                              HEARING HELD

                             MARCH 22, 2007

                                     
[GRAPHIC] [TIFF OMITTED] TONGRESS.#13

                                     
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                    AIR AND LAND FORCES SUBCOMMITTEE

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

                                 ------                                

             SEAPOWER AND EXPEDITIONARY FORCES SUBCOMMITTEE

                   GENE TAYLOR, Mississippi, Chairman
NEIL ABERCROMBIE, Hawaii             ROSCOE G. BARTLETT, Maryland
RICK LARSEN, Washington              KEN CALVERT, California
MADELEINE Z. BORDALLO, Guam          TERRY EVERETT, Alabama
BRAD ELLSWORTH, Indiana              JO ANN DAVIS, Virginia
JOE COURTNEY, Connecticut            J. RANDY FORBES, Virginia
KIRSTEN E. GILLIBRAND, New York      JOE WILSON, South Carolina
JOE SESTAK, Pennsylvania
                 Heath Bope, Professional Staff Member
                John Sullivan, Professional Staff Member
                Lynn Williams, Professional Staff Member
                       Ben Kohr, Staff Assistant


                            C O N T E N T S

                              ----------                              

                     CHRONOLOGICAL LIST OF HEARINGS
                                  2007

                                                                   Page

Hearing:

Thursday, March 22, 2007, Fiscal Year 2008 National Defense 
  Authorization Act--Budget Request on Department of Defense 
  Aircraft Programs..............................................     1

Appendix:

Thursday, March 22, 2007.........................................    65
                              ----------                              

                        THURSDAY, MARCH 22, 2007

FISCAL YEAR 2008 NATIONAL DEFENSE AUTHORIZATION ACT--BUDGET REQUEST ON 
                DEPARTMENT OF DEFENSE AIRCRAFT 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.........    10
Saxton, Hon. Jim, a Representative from New Jersey, Ranking 
  Member, Air and Land Forces Subcommittee.......................     6
Taylor, Hon. Gene, a Representative from Mississippi, Chairman, 
  Seapower and Expeditionary Forces Subcommittee.................     8

                               WITNESSES

Ahern, David G., Director, Portfolio Systems Acquisition, Office 
  of the Under Secretary of Defense for Acquisition, Technology 
  and Logistics..................................................     1
Mundt, Brig. Gen. Stephen D., USA, Director of Army Aviation, 
  Office of the Deputy Chief of Staff, G-3/5/7, U.S. Army; 
  William Balderson, Deputy Assistant Secretary for Naval Air 
  Programs, Office of the Assistant Secretary of the Navy for 
  Research, Development, and Acquisition; Rear Adm. Bruce W. 
  Clingan, USN, Director, Air Warfare Division (OPNAV 88), 
  Headquarters, U.S. Navy; Lt. Gen. John G. Castellaw, USMC, 
  Deputy Commandant for Aviation, Headquarters, U.S. Marine 
  Corps; Lt. Gen. Carrol H. ``Howie'' Chandler, USAF, Deputy 
  Chief of Staff for Operations, Plans, and Requirements, 
  Headquarters, U.S. Air Force; Lt. Gen. Donald J. Hoffman, USAF, 
  Military Deputy, Office of the Assistant Secretary of the Air 
  Force for Acquisition, beginning on page.......................    25
Sullivan, Michael J., Director, Acquisition and Sourcing 
  Management, Government Accountability Office...................     4
Woolsey, James P., Assistant Director, Cost Analysis and Research 
  Division, Institute for Defense Analyses.......................     3

                                APPENDIX

Prepared Statements:

    Ahern, David G...............................................    69
    Balderson, William...........................................   130
    Castellaw, Lt. Gen. John G...................................   148
    Clingan, Rear Adm. Bruce W...................................   140
    Hoffman, Lt. Gen. Donald J., joint with Lt. Gen. Carrol H. 
      ``Howie'' Chandler.........................................   162
    Mundt, Brig. Gen. Stephen D..................................   112
    Sullivan, Michael J..........................................    90
    Woolsey, James P.............................................    84

Documents Submitted for the Record:

    [There were no Documents submitted.]

Witness Responses to Questions Asked During the Hearing:

     Mr. Abercrombie.............................................   175
    Mr. Bartlett.................................................   176
    Mr. Miller of Florida........................................   177
    Mr. Sestak...................................................   177

Questions Submitted by Members Post Hearing:

    Mr. Abercrombie..............................................   181
    Ms. Giffords.................................................   193
    Mr. Larsen...................................................   191
    Mr. Taylor...................................................   191


FISCAL YEAR 2008 NATIONAL DEFENSE AUTHORIZATION ACT--BUDGET REQUEST ON 
                DEPARTMENT OF DEFENSE AIRCRAFT PROGRAMS

                              ----------                              

        House of Representatives, Committee on Armed 
            Services, Air and Land Forces Subcommittee, 
            Meeting Jointly with Seapower and Expeditionary 
            Forces Subcommittee, Washington, DC, Thursday, 
            March 22, 2007.

    The subcommittees met, pursuant to call, at 2:06 p.m., in 
room 2118, Rayburn House Office Building, Hon. Neil Abercrombie 
(chairman of the Subcommittee on Air and Land Forces) 
presiding.

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

    Mr. Abercrombie. I am going to bring the hearing to an 
opening. I am very pleased to be here with my good friend, Mr. 
Taylor, on the Joint Air and Land and Seapower and 
Expeditionary Forces Subcommittee hearing.
    I am going to forego opening statements. We will put those 
in the record or get to them later. Why don't we get started 
right away with Mr. Ahern?
    Mr. Ahern. Good afternoon.
    Mr. Abercrombie. If we could get the summary of your 
statement right away, maybe we can get this in before the vote 
starts.
    Roscoe, do you have an opening statement that we could 
postpone? [Laughter.]
    Yes, we will put it in the record.
    I am sorry. I was discourteous to Mr. Bartlett, which I 
never want to do, believe me. I have great respect and 
admiration for him, both personally and collegially. I 
appreciate that.
    Mr. Ahern.

   STATEMENT OF DAVID G. AHERN, DIRECTOR, PORTFOLIO SYSTEMS 
   ACQUISITION, OFFICE OF THE UNDER SECRETARY OF DEFENSE FOR 
             ACQUISITION, TECHNOLOGY AND LOGISTICS

    Mr. Ahern. Mr. Chairman, yes, sir, I do have a brief 
opening statement. I have submitted a statement for the record.
    Mr. Abercrombie. Please, yes, and that will be entered. 
Thank you.
    Mr. Ahern. I am here this afternoon to give you an overview 
of the Department of Defense (DOD) Cost Analysis Improvement 
Group (CAIG) study on the F-35 Joint Strike Fighter (JSF) 
propulsion system. The Department appreciates the committee's 
high level of interest in this issue. I hope you find the 
results of the CAIG analysis helpful.
    Before I turn to the results, I will note that the 
Department followed the committee's direction in conducting the 
study, as well as supporting the Institute for Defense Analyses 
(IDA) and Government Accountability Office (GAO) studies that 
the Congress requested.
    The Department kept the three studies completely 
independent of each other per the congressional direction. We 
also arranged for program officials and contractors to provide 
GAO and IDA extensive amounts of briefings, historical 
materials, and cost data, and allowed plenty of time for 
follow-up technical and cost discussions.
    We also did not change the acquisition strategy of the 
engines, moving forward through fiscal year 2007 with the 
development of the second engine.
    Let me turn now to the results of the CAIG study. Generally 
speaking, I believe the CAIG results support the department's 
view that we should cancel the F-35 alternative engine program. 
The CAIG finds an alternative engine for the F-35 will not 
result in a net cost savings. Instead, their analysis shows a 
net additional cost in both base year 2002 dollars, and in net 
present value terms, recognizing a small return on investment 
in then-year dollars.
    In some of the highlights of the study, the CAIG did a 
historical look at many studies on economics or competition 
across a variety of defense programs. The results are decidedly 
mixed. In some cases, the Department of Defense saved money. In 
some cases the Department did not recoup the investment. The 
CAIG found that the behavior of defense firms on the 
competition is very complex.
    Even given this uncertainty in the aspects of competition, 
for this analysis the CAIG made assumptions that are generally 
favorable to competition. Among these were an immediate five 
percent discount rate in the price of the particular system, 
and a steeper cost improvement curve. Annual procurement with a 
60/40 split, and savings achieved in the procurement phase 
would carry over in the sustainment phase for components and 
spare parts.
    The conclusions of the CAIG study are presented in written 
testimony, and what you see in the final report shows that 
competition in the case of the F-35 engine does not save the 
taxpayer money, even given generous assumptions that weigh the 
study favorably toward competition.
    That is not to say that the CAIG did not find other less 
tangible benefits to competition. While the Department would 
realize a net loss, it would gain other benefits such as 
increased contractor responsiveness, better technological 
innovation, and a more robust industrial base. The CAIG 
believes there are risks in the JSF program, particularly from 
a weight perspective, and perhaps from an operational readiness 
perspective, and that having an alternative engine would hedge 
those risks.
    In its preparation for submittal of the fiscal year 2008 
President's budget, the Department as a whole had already 
reached many of the same conclusions as the CAIG. While the 
CAIG study did provide more substantial detail and analysis, 
the Department still finds weighing the costs against the 
benefits that there is an acceptable risk in moving forward 
with an alternate engine program.
    The question is not whether or not competition is good. It 
clearly is. The question is whether the Department at this 
particular time can afford the competition. We believe in this 
particular case the Department cannot.
    Mr. Chairman, that concludes my remarks. I look forward to 
questions you may have.
    [The prepared statement of Mr. Ahern can be found in the 
Appendix on page 69.]
    Mr. Abercrombie. I appreciate that summary. Thank you very 
much.
    Mr. Woolsey.

    STATEMENT OF JAMES P. WOOLSEY, ASSISTANT DIRECTOR, COST 
 ANALYSIS AND RESEARCH DIVISION, INSTITUTE FOR DEFENSE ANALYSES

    Mr. Woolsey. Thank you.
    Chairman Abercrombie, Chairman Taylor and members of the 
subcommittee, it is a pleasure to appear before you today.
    The John Warner National Defense Authorization Act of 
fiscal year 2007 directed the Secretary of Defense to select a 
Federally Funded Research & Development Center (FFRDC) to 
conduct an independent cost analysis of the Joint Strike 
Fighter engine program. The Office of the Under Secretary of 
Defense of AT&L [OSD(AT&L)] asked IDA to perform this analysis. 
I will summarize this work briefly today. We do expect to be 
providing a more detailed description of the analysis in a 
briefing to committee staff in the near future.
    Our analysis first considered the investments required to 
execute a competitive engine program. These would occur in all 
phases of the life-cycle, and include both direct investments 
such as development costs for the second engine and also 
opportunity costs, such as the loss of economies inherent in 
larger production quantities.
    We then determined the savings that competition would have 
to produce in order to recover this investment. We compared 
these required savings to what has been seen in other 
competitive programs. And finally, we evaluated potential 
benefits of competition beyond those price reductions.
    We found that the direct investment and opportunity costs 
required to execute a second program summed to approximately 
$8.8 billion in constant 2006 terms. About $2 billion of this 
would be required over the next five budget years. Competition 
in procurement alone cannot be expected to recover this 
investment. To have the potential for recovering this 
investment over the JSF's life-cycle, both procurement and 
Operation and Support (O&S) services would have to be competed 
effectively. This competition would have to save about 18 
percent of the total procurement and O&S cost.
    This is at the upper range of procurement savings we found 
in our analysis of past programs, but the Department of Defense 
has little experience integrating both procurement and O&S into 
competitions, so we have no basis for estimating the plausible 
savings that would occur in such an arrangement.
    Competition can be expected to bring non-financial 
benefits. A second engine program would decrease the dependence 
of our force structure on a single engine, reducing risks to 
fleet readiness. It is generally also agreed that competition 
for F-16 engines improved contractor responsiveness, which 
would be another non-price benefit of competition.
    And finally, continuation of the F136 program would ensure 
that General Electric remains in the industrial base for high-
performance military aircraft engines. Without the 136, GE's 
incentive and ability to maintain the skills unique to these 
types of engines would be uncertain, although General Electric 
would certainly remain a leading supplier of commercial 
aircraft engines.
    That concludes my remarks. I have provided a more extensive 
statement that I ask be included in the record. I will be happy 
to answer your questions.
    [The prepared statement of Mr. Woolsey can be found in the 
Appendix on page 84.]
    Mr. Abercrombie. Thank you. We will do that.
    Mr. Sullivan.
    Are you and Mr. Sullivan here in cahoots with one another? 
[Laughter.]
    Mr. Woolsey. Not at all, sir.
    Mr. Sullivan. No, sir.
    Mr. Abercrombie. Okay.
    Do you agree? Okay, good.
    Mr. Sullivan. Not one bit.
    Mr. Abercrombie. Okay.

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

    Mr. Sullivan. Thank you, Mr. Chairman. I am pleased to be 
here today to discuss the engine program. I will make a brief 
opening statement, as my written statement has been submitted 
for the record.
    My testimony focuses on our cost analysis performed in 
response to Section 211 of the Defense Authorization Act of 
fiscal year 2007, and examined sole-source and competitive 
alternatives for engine development, production and 
sustainment, the results of past engine programs, and impacts 
on the industrial base if the alternate engine program is 
cancelled.
    In analyzing the cost for a sole-source acquisition and 
sustainment strategy, we estimated a remaining cost of $53.4 
billion to use Pratt & Whitney as a sole-source provider of the 
Joint Strike Fighter engine throughout the aircraft's life-
cycle, and we base that on current Joint Strike Fighter Program 
Office data.
    In analyzing the potential costs and benefits of 
competition, we first use the number of U.S. aircraft expected 
for production, which is 2,443. We then estimated costs under 
two competitive scenarios: a 50-50 split and a 70-30 split of 
total engine purchases to either contractor. Without 
consideration of potential savings, an additional investment of 
$4.5 billion under the first alternative, and $3.6 billion 
under the second alternative may be required based on our 
analysis.
    When we assumed savings due to competition, our analysis 
indicated that recoupment of those investment costs could occur 
at somewhere between 10 and 13 percent, depending on the number 
of engine sales awarded to each contractor. We believe it is 
reasonable to assume at least this much savings in the long run 
based on analysis of actual data from the F-16 engine 
competition, which indicates that competitive pressures can 
generate financial benefits of up to 20 percent during the 
life-cycle of an engine.
    Other than the F-16 engine competition, there have been a 
number of competitions for modern fighter engines, including 
the F-15, the FA-18, and the F-22A. For example, the GE F404 
engine, which today powers the Navy F-18 and the Air Force F-
117A was competed in the mid-1980's and provided some 
improvements in contractor responsiveness. However, it was not 
optimal because it did not compete engine designs. It was a 
build-to-print competition.
    Competition may also provide benefits that do not translate 
directly into financial savings, but may result in reduced 
costs or other positive outcomes to the program over time. DOD 
and others have performed studies and have widespread 
concurrence as to these other benefits, which include better 
engine performance, enhanced operational readiness, and 
improved contractor responsiveness.
    With regard to the industrial base, the economic stakes in 
the Joint Strike Fighter engine program are high. While Pratt & 
Whitney is the sole-source provider right now of the engine for 
the Air Force F-22A, production is likely to end on that 
program in 2012. Pratt & Whitney will clearly remain a player 
in the Joint Strike Fighter program, whether or not the fighter 
engine team remains a competitor.
    General Electric is a significant entity in the market for 
large commercial engines. However, it faces declining 
production within its fighter engine programs. While the 
overall health of the company is very strong, business 
decisions as to where to invest company resources could favor 
the commercial side should military business decline 
substantially.
    To summarize, DOD officials noted last year that cancelling 
the F136 engine program would save DOD about $1.8 billion in 
development costs over the next 7 years. Today, we estimate 
that short-run cost at about $1.4 billion and estimate about $2 
billion to $3 billion of further investments in production 
support to ensure competition in the long run.
    Our analysis indicates that those investments may be 
recouped under a competitive approach that can generate savings 
between 10 and 13 percent, and we believe it is reasonable to 
assume savings of that much. Recent DOD studies and analyses 
also suggest that these investments can potentially provide 
non-financial benefits such as improved reliability and 
responsiveness.
    The challenge now facing DOD is prioritizing its short-term 
needs within current budget constraints, that is, the need for 
the $3.6 billion to $4.5 billion to invest, versus potential 
long-term payoffs that may provide positive returns in the long 
run. However, they will be years out before you start getting 
those returns on investment.
    Mr. Chairman, this concludes my prepared statement. I will 
be happy to answer any questions.
    [The prepared statement of Mr. Sullivan can be found in the 
Appendix on page 90.]
    Mr. Abercrombie. Thank you very much.
    It appears that votes that we anticipated have now been 
postponed for a while, so we are just going to keep going 
ahead.
    I didn't ask, Mr. Saxton, whether you had a statement to 
put in? We postponed our other statements, and we will enter it 
in the record if you do.

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

    Mr. Saxton. Thank you, Mr. Chairman. If you could put it in 
the record, that will be fine.
    Mr. Abercrombie. Fine.
    Then let's go right to questions.
    We will start with you, Mr. Saxton.
    Today, by the way, for members, we are going in reverse 
order. Before, the newest members got to ask questions first in 
the last hearing, and now in this hearing we will go back and 
we will go by seniority, and then in the next hearing we will 
go back to the newest members.
    Mr. Saxton. Mr. Ahern, would you just be kind enough to 
expand on your thoughts relative to the cost analysis which 
your organization did on the matter of the engining?
    Mr. Ahern. Yes, sir. We looked, as directed in the 
authorization and as directed by the Congress, at the cost of 
developing the 135 as the sole source. We looked at developing 
the 135 and the 136 as the current acquisition strategy. We 
looked at it from the standpoint of the acquisition writ large, 
both the phase currently, the Research & Development (R&D) 
phase, as swell as the procurement phase out through the 
outfitting of the three variants of the aircraft, with a 
projected buy at this point. And then we looked at the O&S 
costs out through 2064, if I recall correctly.
    As we looked at it in the base-year dollars, the delta cost 
to the government was about $300 million over that sum total of 
the additional investment, the procurement, and the O&S. That 
would be in the base-year dollars. In the net present value, 
the difference was, again it cost the government money of about 
$1.2 billion. I think the net present value is a typical way to 
do this sort of analysis, but as you recall, the language asked 
for it to be done in all three ways.
    So I think the CAIG using the historical models that they 
have, as well as the assumptions that I stated, particularly to 
weigh competition as favorably as possible in terms of the 60-
40 in annual buys, a shift and rotate on the cost curve, and 
continuing the savings on into the O&S phase, gave the 
opportunities for competition the most favorable light. But at 
the end of their analysis, as I indicated in both the 2002 base 
year as well as in net present value terms, it came out to cost 
the government money.
    Mr. Saxton. Mr. Woolsey and Mr. Sullivan, any comments 
relative to Mr. Ahern's comments?
    Mr. Woolsey. The way that we structure our analysis was 
similar. The 18 percent I referred to is the net present value 
number, rather than a constant dollar number. But we also 
created two situations essentially, one where we are going to 
build an F135 only; and another where you are going to build 
two engines at the same time. We structured the analysis so 
that the first step in that second case was to assume nothing 
else changed except that we are buying 1,500 engines from two 
sources rather than 3,000 from one. So there are no competition 
effects taken into account in the initial stage.
    When we talk about investments, we are talking about all 
the cost differences that happen in that case between the two 
and the one engine case. Then we go back and look at the 
savings that would be acquired from competition to make those 
two cases equal, to recover all those investments, both the 
direct investments and the opportunity costs that would happen. 
That is how we got to the result that we did.
    The methodology was not entirely different than the CAIG's. 
We have only had one day to look at their analysis, but if I 
understand what happened correctly, the differences between us 
are relatively small.
    Mr. Saxton. So the advantages to having competition is you 
have two sets of engines in case one set for some reason 
doesn't work out as we expect. Yes?
    Mr. Woolsey. Yes, sir. That was one of the non-financial 
benefits. Our force structure is going to be very dependent on 
the JSF in future years, as you know. Should there be a problem 
with an engine, the question is how much of that force 
structure would be affected. Clearly, with two engines, the 
problem would only be half as severe. That is the readiness 
benefit that I referred to.
    Mr. Saxton. And on costs, tell us again what your 
conclusions were on the cost of proceeding along the two lines.
    Mr. Woolsey. The conclusion on cost was that if you can 
save 18 percent on both procurement and O&S through 
competition, that it becomes a break-even case for finances. 
That second part about O&S is critical, however. We have never 
competed O&S in this way where you would tie the support 
services to a procurement contract in order to maximize 
competition between two independent engines and two independent 
support structures. So we can't estimate what savings are 
possible with that. All we can say is that if you get 18 
percent across both parts, procurement and O&S, that you would 
break even.
    Mr. Saxton. What is the incentive to work toward 18 
percent?
    Mr. Woolsey. In a competition case, if you tie the O&S to 
the procurement, you can envision an acquisition strategy where 
in a given year the contractors are faced with the opportunity 
to bid some number of engines and support for those engines 
over some number of years at a given price. So then they have 
an incentive to offer a low price on O&S. We have no idea what 
the effect of that competition would be, but that is the 
structure.
    Mr. Saxton. Going into the process, would each of the 
competitors have reason to expect that there would be an engine 
buy of some number from their side of the competition?
    Mr. Woolsey. That would depend on the specifics of the 
acquisition strategy. My understanding is that what is 
envisioned now is something like a 30 percent minimum, 70 
percent maximum year-by-year arrangement, but that depends on 
the details of the acquisition strategy.
    Mr. Saxton. This is kind of a new set of issues for me, but 
it just seems to me that one of the competitors or both of the 
competitors could certainly factor in as a major component its 
profit if it is guarantee some buy, and not have to worry so 
much about what the savings are.
    Mr. Woolsey. Are you referring to the idea that a 
competitor could settle-in at the 30 percent rate and charge--
clearly, you would have to have an off-ramp in the acquisition 
strategy so it is not a guarantee of 30 percent in perpetuity. 
Our job was not to design an acquisition strategy--I want to be 
clear about that--but that seems like a solvable problem.
    Mr. Saxton. Thank you, Mr. Chairman.
    Mr. Abercrombie. Thank you.
    Mr. Taylor.
    Mr. Taylor. Thank you, Mr. Chairman.
    Mr. Abercrombie. I want to say that we will pursue some of 
the implications of this as we go along. We are just trying to 
stay between five and six minutes for purposes of the opening 
round. Mr. Taylor will be next.

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

    Mr. Taylor. I want to thank our panelists. I deeply regret 
your last words, Mr. Woolsey, when you said your job was not to 
design an acquisition strategy, because I am going to go 
straight to that point.
    As you know, the Marines are looking at vehicle called the 
mine resistant ambush protected vehicle (MRAP). They have eight 
competitors. They are going to down-select to two, and then 
they are going to select the vehicle they want, but they are 
going to own the rights to the plans, which means they can turn 
around and take those plans, put them out on the market, who 
can build a lot of these in a hurry, and what is your price.
    I was wondering, with that in mind, did any of your 
calculations include the possibility that you compete two 
engines, that the Nation selects the better of the two engines, 
but owns the specifications and the plans for that engine, and 
owns the right to then put it out for bid for the manufacturer 
of that engine. Was that ever worked into your equation? If it 
was not, why not? Because that seems to me to get the best 
value for our Nation.
    Mr. Woolsey. We did not explicitly work that into our 
equation. The difficulty in that would be to determine how much 
the one vendor would charge for the data rights to that.
    Mr. Taylor. Let's back up. Aren't we paying them to develop 
this engine? Isn't a substantial amount of the American 
taxpayers' money being paid to these people to develop an 
engine?
    Mr. Woolsey. I am not familiar with the specifics of the 
contract in this case, but it is not unusual that the data 
rights are a separate issue that is negotiated in or not.
    Mr. Taylor. That is not the question. Okay, so what would 
prohibit us from doing it that way? To your knowledge, is there 
anything, since we are able to do that with the MRAP, since 
apparently that is the game plan for the acquisition of the 
LCS, what would prohibit, if anything, our Nation from doing 
that in this instance?
    Mr. Woolsey. I am not aware of anything that would prevent 
it.
    Mr. Taylor. Okay. So what you are telling me is that that 
scenario, you never put a pencil to that scenario.
    Mr. Woolsey. No, sir.
    Mr. Sullivan. Sir, if I might. When we were looking at 
this, the mandate that we were working on here, we did come 
across, I think the F404 engine, for example, is an engine that 
GE--
    Mr. Abercrombie. Could you put the microphone a little 
closer to you, Mr. Sullivan, please?
    Mr. Sullivan. Yes. The F404, which is currently on some F-
18s, and I think it is on the F-117A, was GE's engine and it 
was a sole-source engine at the start of that program. They did 
exactly what you are talking about. They took the blueprint of 
that engine and gave it to another contractor to manufacture. 
And they got improvements in mostly the non-tangibles that we 
talk about--contractor responsiveness, reliability, things like 
that that were improvements.
    There wasn't a lot of cost improvement, though, because I 
think in order to really leverage cost improvements into a 
program, you have to also compete that design, because there is 
a lot of savings that can be built into a design itself if you 
have two people competing.
    Mr. Taylor. Mr. Sullivan, I am not doubting that. I could 
very much envision where someone can come up with a better 
engine, a more fuel efficient engine, a more reliable engine, 
more thrust-per-pound engine. I can see a lot of scenarios 
where one would be better than the other.
    But once you get past that, and once you have blessed one 
as better than the other, why wouldn't it make sense for our 
Nation to then turn around and say we own the specifications to 
this engine; we have paid for its research and development; and 
now we are going to put it out for bid. And actually you could 
bid it several ways. You could bid for 3,000 engines. You could 
also get a price for 1,500 from each of the potential vendors. 
And then build in an incentive for them to give you a better 
price on the total buy.
    So again, I am asking this in the form of a question. What 
would be the downside to that? Because I don't see a downside 
just yet.
    Yes, sir. I will open that up to the panel.
    Mr. Sullivan. Are we talking about for the Joint Strike 
Fighter Program now?
    Mr. Taylor. Sure. Yes.
    Mr. Sullivan. I would just say kind of off the top of my 
head, I don't think there would necessarily be a downside, but 
I don't think you would get all of the leverage that you could 
get if you had two contractors competing from concept all the 
way out, because they would compete reliability into the basic 
design itself.
    Mr. Taylor. Is it possible that one would have a better 
design shop and another a better manufacturing capability? 
Right?
    Mr. Sullivan. Theoretically, I think yes. Like I said, I 
don't think there is necessarily a downside.
    Mr. Taylor. Is there anything in the present contract that 
would preclude that from happening, that you know of?
    Mr. Sullivan. I don't know that right now. We can get that 
information, though.
    Mr. Taylor. Would you please?
    Mr. Sullivan. Yes.
    Mr. Taylor. Thank you very much.
    [The information referred to can be found in the Appendix 
on page 191.]
    Mr. Abercrombie. Thanks.
    Mr. Bartlett is next.

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

    Mr. Bartlett. Thank you very much.
    So that it is clear why we are here today, I have just one 
very simple request. If you would tell us, please, why this 
program had originally anticipated a competition between two 
engines; how we got to where we are today, that there isn't any 
funding for the second engine; and what risks we have if we 
don't put funding in so that we do have competition.
    Mr. Ahern. Yes, sir. I will try to answer that question. My 
recollection of the original strategy was that there were three 
aircraft manufacturers and each of them chose an engine 
manufacturer in the original competition, and it was a Pratt & 
Whitney engine, and Lockheed Martin was selected to develop the 
aircraft, and Pratt & Whitney was selected to develop the 
engine.
    From that point, there was a decision to fund the second 
alternative engine development about four years after the first 
engine development started, if I recall correctly. And that 
second engine continues along, as I said earlier, through 2007. 
And then finally, your question, as I recall, the risk that we 
would incur if we don't continue with the second engine.
    I think that the intangible values that I presented and 
that the other panelists presented, are the ones that I would 
recognize--the responsiveness of the contractor in the face of 
competition; the technological investment that the contractors 
will tend to make in competition; and the fact that if there 
were a catastrophic failure, a discrepancy to an engine that 
was the only engine on the jets, that that could ground the 
fleet for some period of time.
    So those are the risks, I think, inherent that we are 
accepting. But as I said earlier, it is an affordability 
situation with a very mature technology in the F135 engine. I 
hope that I have answered your question, sir.
    Mr. Bartlett. You indicated risk. Would that be low, 
moderate or high, if we don't proceed with funding the second 
engine?
    Mr. Ahern. I think, and this is based on my experience, and 
I was an aviator, as well as maintenance officer in the Navy, I 
think that the risk of going forward with a single engine will 
be low. I think that the 135, and this is a generation or more 
since I flew, the engine technology has advanced significantly. 
The 135 is derivative of the 119 that is flying on the F-22s 
now. And though there remains development to be done, I think 
that the risk in going forward with the 135 only is low.
    Mr. Bartlett. Thank you, Mr. Chairman.
    Mr. Abercrombie. Mr. Ortiz.
    Mr. Ortiz. Thank you, Mr. Chairman.
    Mr. Ahern, in your testimony, you did not address the 
effect the alternate engine program would have on current and 
future international participation, including foreign military 
sales (FMS). I was just thinking maybe you could address this. 
I think that there are several countries who are involved in 
this project, when we look at the overall Joint Strike Fighter. 
I was just wondering if the longer you wait, and of course you 
have to do your job, but the longer you wait, the more costly 
it becomes. I know that I read some testimony that it will save 
40 percent to 20 percent.
    But what is this going to do to foreign military sales and 
those people that are involved in this project? Maybe you can 
elaborate a little bit on that.
    Mr. Ahern. Yes, sir. I will make an attempt to capture it 
as I see it. There are, of course, partners in the F-35 
development, so it is not really an exact analogy to a foreign 
military sale. My understanding of the situation is that it is 
in the U.S. that is looking for and funding the alternative 
engine. Rolls Royce, as you know, is a part of the industry 
consortium as it is going forward now. They are a sub to Pratt 
& Whitney in developing the lift fan. They are teamed with 
General Electric on developing the F136.
    I am not able to address the other international 
participation in either the 135 or the 136, but I think 
recognizing that the engine itself, the propulsion system, is 
perhaps 20 percent of the total content of the jet. I think 
focusing only on the propulsion system as we are discussing 
this in terms of foreign involvement, industrial base 
involvement, would probably miss the total picture.
    So I think that the other governments that are involved as 
partners with the United States in developing the 135 have 
evinced interest in an alternative engine, but have not evinced 
so much interest that they want to participate in the funding 
of it.
    That is all, sir.
    Mr. Ortiz. My time is up.
    Thank you, Mr. Chairman.
    Mr. Abercrombie. Thank you, Mr. Ortiz.
    Mr. Miller.
    Mr. Miller of Florida. Thank you, Mr. Chairman.
    Mr. Ahern, have any of the congressional actions dealing 
with the budget on JSF hurt DOD's working with international 
partners, either retaining them or acquiring them, all of the 
machinations that have been taking place?
    Mr. Ahern. Not that I am aware of, sir.
    Mr. Miller of Florida. Could you comment? We have seen a 
lot in the press about the GAO's report. But can you comment 
what your thoughts are on the GAO report?
    Mr. Ahern. The current GAO report that is the subject of 
this hearing, sir?
    Mr. Miller of Florida. Yes.
    Mr. Ahern. Frankly, I only became aware of it, of course I 
knew that they were involved, but I only saw just a little bit 
of the top surface of it yesterday afternoon. I can't comment 
too much further. What we saw in doing our analysis, the CAIG 
analysis, which we looked at, as I said in my written 
statement, a need to achieve a 21 or so percent savings across 
the acquisition in order to get to the break-even point, which 
as was characterized by my colleague to the left, Mr. Woolsey 
from IDA, he characterized 18 percent as high, and 21 percent 
as unlikely.
    In my preparations for this hearing, I discussed with the 
CAIG some of their experiences on competition. Again, as I said 
in my written testimony, there is wide variety from 20 percent 
more cost to the government, to a savings of 40 percent in 
competition. So my takeaway from that entire thing is that I 
think the CAIG and, as I understand, IDA looking at it from the 
same perspective, that the opportunity to get back the savings 
is going to require a savings that is not all that likely.
    GAO postulates a lower savings number required. Without an 
opportunity to look carefully at the GAO report, which I think 
we will probably do, I wouldn't really be able to comment any 
farther.
    Mr. Miller of Florida. I would hope that you would look 
very carefully at the GAO report, and if you would for the 
record, take that question. I would be interested in knowing 
what your thoughts are after you have had an opportunity to go 
further than just the top few pages.
    Mr. Ahern. Yes, sir. I will take that for the record.
    [The information referred to can be found in the Appendix 
beginning on page 177.]
    Mr. Miller of Florida. That is all, Mr. Chairman.
    Mr. Abercrombie. Mr. Ahern, for the benefit of the record 
and for those who may not be familiar with it on the committee, 
we have new members as well. You are referring to, and others 
have referred to the Cost Analysis Improvement Group, the CAIG. 
Can you state for the record what the relationship is of the 
Cost Analysis Improvement Group? What it is, who it is, in 
relation to the portfolio systems acquisition, and perhaps to 
Mr. Woolsey's Institute for Defense Analyses--if he doesn't 
mind you characterizing it for him.
    Mr. Ahern. Yes, sir, Mr. Chairman. The Cost Analysis 
Improvement Group works for the secretary of defense and is an 
adviser to Mr. Krieg on matters of cost of the investments. Mr. 
Krieg, of course, is the under secretary of defense for 
acquisition, technology and logistics.
    I work for Mr. Krieg. Actually, I work for the deputy under 
secretary of defense, Dr. James Finley, who is the acquisition 
and technology. Portfolio systems represents the warfare 
offices, if you will. I am responsible for the oversight on 
behalf of Mr. Krieg and Dr. Finley of the major Department of 
Defense programs in air, land, sea and in strategic weapons.
    So I work with the CAIG as we are moving forward programs 
toward milestone decisions, where as I said earlier, the CAIG 
advises Mr. Krieg.
    Mr. Abercrombie. Do you consult with or stay in touch with 
or acknowledge in passing Mr. Woolsey and his institute?
    Mr. Woolsey. Yes. I wanted to clarify two things. First 
about the savings rates, we didn't characterize it as likely, 
unlikely or otherwise. We did look at some engine programs in 
the past and competitions that occurred, and found a range of 
savings there of 11 percent to 18 percent. Obviously, our 
number of 18 percent is the upper end of that range. I want to 
make it clear we are not characterizing it at all, and that the 
O&S savings and the possibilities there put a lot of 
uncertainty on the possible savings, but it goes in both 
directions.
    Mr. Abercrombie. Yes, but aside from that, and I appreciate 
that clarification. For purposes of institutional placement, 
and again for the benefit of the members and for those 
observing who may not be familiar, you provide an independent 
analysis in your institute. Right?
    Mr. Woolsey. Yes.
    Mr. Abercrombie. I merely want to establish for the record 
institutionally how you fit in.
    Mr. Woolsey. Yes, sir. We are a federally funded research 
and development center, which means that we are a nonprofit 
organization. We work for the Office of the Secretary of 
Defense and some other Defense agencies. In this case, we 
worked for Ms. Diane Wright, who was our sponsor, who works in 
Mr. Ahern's office.
    But everyone acknowledges the unusual situation here, while 
we were doing work directed by Congress, in a discussion that 
OSD had an interest, the sponsor took a distinctly hands-off 
approach to our work. They did not inquire as to what our 
results were, and made no effort to guide the results. So 
although formally we were sponsored by OSD, they did not try to 
guide our results in any way.
    Mr. Abercrombie. And that was required by the legislation?
    Mr. Woolsey. Yes.
    Mr. Abercrombie. Okay. Is that clear to everybody then? Mr. 
Sullivan, does that seem like a fair summary to you, speaking 
as an outside observer?
    Mr. Sullivan. Of their relationship?
    Mr. Abercrombie. Yes.
    Mr. Sullivan. I really don't have any working knowledge of 
that. Yes, it seems fair to me.
    Mr. Abercrombie. Okay.
    Mr. Sullivan. As we did this, I think we all pretty much 
stayed to ourselves.
    Mr. Abercrombie. Okay. Excellent. Thank you.
    Next would be Mr. Marshall.
    Mr. Marshall. Thank you, Mr. Chairman.
    I want to follow up a little bit on what Mr. Taylor asked 
about data rights. It sounds as if there had not been a lot of 
thought given to the question of whether it would be more cost-
effective for us to compete for design, acquire data rights, 
and then contract for the actual manufacture of the machine, 
the engine that we own.
    That brings up a subject that is fairly near and dear to my 
heart. Long-term sustainment, maintenance and modernization of 
engines probably isn't as significant a challenge as platforms 
themselves. But do you, in competing this for these engines, do 
you take into account the long term?
    Who is going to maintain, modernize--if there is going to 
be any modernization on an engine--who is going to be 
sustaining the engine over the long haul? Is that going to be 
done in-house, by contractors? Do we figure out whether or not 
we are going to buy this engine fairly inexpensively now, but 
then pay an awful lot of money over the long haul for it to be 
upgraded, modernized, sustained? That sort of thing?
    Or do we take all of that into account right now in 
deciding what the purchase price is? Who is offering us the 
best deal? Any of you gentlemen. This is maybe not quite where 
you were in the study you were asked to do, but it sure would 
be helpful to me to hear your thoughts on that.
    Mr. Sullivan. Yes, if I understand the question we are 
talking about----
    Mr. Marshall. It is probably inartfully phrased.
    Mr. Sullivan. Sustainment costs.
    Mr. Marshall. Well, we know that if we acquire an asset 
that we are going to have around for a long period of time, we 
will have to maintain that asset and will incur costs doing 
that, and we may decide to upgrade that asset at some point in 
the future, and we can anticipate that we might do that.
    Do we take all of that into account in the contracting 
process, so that we best posture the taxpayers in the long run 
cost-wise? Or do we not, and we look for less cost now. Let's 
acquire it and not worry about we are going to have higher 
costs on down the line, maybe contractor maintenance and that 
sort of thing.
    Mr. Sullivan.
    Mr. Sullivan. Well, when we did this study, we made an 
assumption about the life-cycle of the program, the O&S costs, 
if you will, that pretty much piggybacked off what the program 
office strategy is right now. That is to compete on an annual 
basis, I believe. If they do go to competition, then the 
competition would be aligned in a way where they would compete 
the sale of the engine, along with a competing price for the 
maintenance of the engine as well.
    I don't know if the phrase ``power by the hour'' is 
appropriate here, or if it is something that you would 
understand, but on the F-16, for example, that was kind of the 
way that they did that competition. So that the contractor who 
is responsible for a set cost will maintain the engines through 
the life-cycle.
    Mr. Marshall. Is this the kind of thing you can anticipate, 
that it is going to need maintenance at 100 hours of 1,000 
hours, and it is going to need this kind of maintenance, so it 
is very easy to expect what is going to occur?
    Mr. Sullivan. The numbers that we used in making our 
assumptions was I think the program office looks at 300 flight 
hours per year over a 30-year period. So basically, the costs 
are going to be based on that 300 flight-hour number.
    Mr. Marshall. And then you just discount to the present 
what they are saying they will do the maintenance for? I am 
trying to figure out what is best value.
    Mr. Sullivan. I am not sure. The program office's 
acquisition strategy will play all that out, I assume. I don't 
have a whole lot of information on how they are going to 
compete those things, but it will be an annual competition 
throughout the 30 years of the manufacture.
    Mr. Marshall. Thank you, Mr. Chairman.
    Mr. Abercrombie. Mr. Davis.
    Mr. Davis of Kentucky. Thank you, Mr. Chairman.
    Mr. Abercrombie. Don't feel all alone down there.
    Mr. Davis of Kentucky. I am just sitting here at seniority 
OP-forward right now. [Laughter.]
    Mr. Abercrombie. You are the point of the spear right now.
    Mr. Davis of Kentucky. I have felt the point of the spear, 
too, but with you at my back, Mr. Chairman, I know no fear at 
the moment, so thank you for your leadership. [Laughter.]
    We hope you hold a retreat on this in your home state so we 
can discuss this issue further out there.
    I would like to come at this from two ends, one as a former 
military aviator, seeing one of my former colleagues out in the 
audience right now, but also as a manufacturing professional. 
Coming from both of those worlds, I would really like to 
highlight Congressman Taylor's comments. The gentleman from 
Mississippi I think made a very, very valid point, particularly 
in the diversity of operations.
    Having seen a little bit of the inside of the defense 
contracting world in aerospace and also been at the receiving 
end of the military, where we watched one entire aircraft fleet 
go down. Had it not been for the 1957 Chevy of helicopters, the 
UH-1 HUEY, there wouldn't have been any flying for about a 
four-month period due to a significant contractor error.
    My concern in particular is about this elimination of 
competition. I really can sense a lack of creativity, a lack of 
initiative among operating units. In particular, one's design 
and prototyping function might be quite robust and might be 
innovative, but their manufacturing might be somewhat 
antiquated. I have been on the inside of contractors and seen 
this, having done Lee Manufacturing implementations for many 
years.
    On the other hand, the other contractor that might not be 
so robust in the development side, could be extremely powerful 
and strong on value engineering, sustainment, logistical 
support, the ongoing engineering for parts redesign, 
improvements in efficiency and upgrades.
    That being said, first for Mr. Ahern, do you believe it is 
really wise and sound from an acquisition policy standpoint to 
forego competition--considering many of these values that I 
don't think have been quantified necessarily in the DOD 
studies--and award Pratt & Whitney a sole-source contract, and 
effectively put them in a monopolistic position?
    Mr. Ahern. Yes, sir. I understand your question. I do think 
that the department understands, as you have articulated, the 
tangible-intangible benefits of continuing competition. 
However, considering the other requirements on the department's 
resources, the affordability issue, and the good performance on 
the 135----
    Mr. Davis of Kentucky. How about if we gave you the money 
and we take the affordability issue off the table?
    Mr. Ahern. Yes, sir. I understand that, but the 135 has 
done well. It is, as I said, derivative of the 119 that is 
flying in the F-22 now. I do think that considering the 
maturity of the engine, the affordability issue, and factoring 
in the risk, that it is a well-founded decision.
    Mr. Davis of Kentucky. I would tend to disagree with that. 
I think from a strategic perspective in the long run, I think 
cross-pollinating between the manufacturing businesses is more 
valuable to the Nation than perhaps the shareholders will be. 
But I think we have some other issues that we have to 
concentrate on. I just met with the Under Secretary of the Air 
Force, Dr. Sega, yesterday, talking about the need for math and 
science specialties.
    I think one of the impacts that we are going to have is by 
going sole source, we also are going to see a lot of engineers 
leave the aerospace and defense field that we desperately need 
to compete with emerging powers in Asia and India, other 
threats as well from a competitive standpoint.
    Those skills are somewhat unique and arcane to this 
business versus the commercial world. I would say I believe 
this committee would fund a relatively small shortfall like 
that, particularly knowing what we are doing on throwing money 
into other things, to get a defense spending bill passed.
    In that same vein, I would like to redirect a question to 
Mr. Woolsey and Mr. Sullivan for one moment on this. Other than 
cost, just raw dollars based on the criteria that had been used 
internally to do this, I think there are some hidden long-term 
costs that emerge by doing sole source. What conclusions did 
your study reach about the value of competition, if we might 
take a more macro view of it?
    Mr. Woolsey. We found three benefits that could come from 
competition outside of price, and those were the readiness 
issue that you allude to. Obviously when a large part of your 
force structure is dependent on one airplane, if there are two 
different engines, an anomaly is only going to affect half as 
much of the fleet, whether that is a catastrophic anomaly that 
requires groundings or a chronic one that requires continued 
readiness work. That is a benefit that comes from competition 
outside of price.
    The ability to ensure that GE stays in the fighter engine 
business is another benefit. That brings resources to the DOD 
problems that may or may not otherwise leave. They are going to 
have to make a business decision about whether they want to 
keep the military-unique skills should this program be 
cancelled. So that is certainly a benefit.
    And then from the earlier great engine war, all parties 
seem to agree that the general way that the contractor worked 
with the department changed when competition began. If that 
were to occur again here, that would also be a non-price 
benefit.
    Mr. Abercrombie. Mr. Sullivan, could you give a 30-second 
answer?
    Mr. Sullivan. Yes, sir. First of all, the F135 engine has 
really just begun testing, so I think there is still a lot of 
concerns about the ability for that engine to get through all 
the hoops it needs to get through. About half it is ground 
testing, and it has just begun flight testing.
    There are always weight concerns on aircraft programs and 
the engine has an impact on that. So that is one thing right 
now that, if you had another engine competing with that, I 
think, as has just been stated, if you have a single point of 
failure, you have less trouble.
    In addition to that, I think competition will drive 
innovation and improvements in value engineering, and a lot of 
the things that you talked about if on an annual basis they 
have to compete, not only for procurement of the engines, but 
for maintaining the engines as well. Two people competing for 
that will tend to drive reliability, and contractor 
responsiveness historically has gone up if you have 
competition. The ``great engine war'' I think is where you 
really saw that in spades.
    Mr. Abercrombie. Thank you, Mr. Sullivan.
    Mr. Davis of Kentucky. Mr. Chairman, if I could just beg 
your indulgence for 30 seconds to just make a quick 
parenthetical statement?
    Mr. Abercrombie. Sure.
    Mr. Davis of Kentucky. I know my bias toward competition is 
very clear. It is no slight to the high-quality product that 
Pratt & Whitney has produced, but one thing I would like to 
make a statement from that I saw first-hand in the late 1980's 
in the most rapid helicopter-arming program since the early 
stages of the Vietnam War for a special operations community 
project that helped this country greatly.
    The prime contractor, who happened to be the sole source on 
the aircraft for principal aircraft components, was so sluggish 
in its ability to respond that the Defense Department needed to 
step outside to a series of small, what I might call high-tech, 
mom-and-pop, homegrown contractors who effectively built a 
state-of-the-art product in a couple of months in a series of 
garages.
    Having seen that first-hand and how quickly it was able to 
be flight-tested, certified and taken to the field reiterated 
to me the importance of competition.
    With that, I yield back. Thank you, Mr. Chairman.
    Mr. Abercrombie. Thank you.
    Mr. Courtney. And Mr. Ellsworth will follow.
    Mr. Courtney. Thank you, Mr. Chairman.
    Just to follow up the last line of questioning, there is a 
suggestion that somehow going sole source is something 
different or new. The fact of the matter is even with that 
experience in the 1980's, the Department of Defense has still 
pursued sole-source purchasing for engines for many programs. 
In fact, General Electric has benefited from some of those 
decisions--the F/A-18 and the Blackhawk.
    I would just ask Mr. Ahern, the decision to go sole source 
is not like we are deviating from some pattern that we have 
been following for some period of time. Isn't that correct?
    Mr. Ahern. That is correct. Yes, sir. That is a correct 
statement. At some point in almost every development or 
acquisition, we eventually do go sole source.
    Mr. Abercrombie. Mr. Ahern, I am sorry. I believe your 
microphone is not on.
    Mr. Ahern. Yes, sir. You have characterized the 
department's acquisitions in general, that either in the 
beginning or at some point early on, we tend to go to sole 
source. As you indicated, the F/A-18 is an example of that, 
where we have General Electric as a sole source for those 
engines.
    Mr. Courtney. Just to follow up on that, Mr. Sullivan in 
your report, you raise the question of industrial base in terms 
of GE's future. The fact of the matter is they have got 
actually a fairly robust schedule of producing engines for the 
F/A-18 and the Blackhawk into the 2020's. So it really isn't 
like there is some major decline that they are facing in the 
immediate future, sitting here in 2007, is there?
    Mr. Sullivan. GE is a very healthy company, especially on 
the commercial side, they are extremely healthy right now. On 
this issue of supplier base, GE, what it would do for GE is I 
think it might give them a mindset where they may want to 
reallocate dollars. I don't think it would crush them. As you 
said, they still do have military engine production. But I 
think it would give them cause to perhaps reallocate. Long 
term, I think it could have an impact on the industrial base 
down the road.
    Mr. Davis of Kentucky. Would the gentleman yield for just 
one second?
    Mr. Courtney. Sure.
    Mr. Davis of Kentucky. Just on that point, I recognize the 
great benefits to the state of Connecticut and the affiliated 
tier one and tier two manufacturer supporting Pratt & Whitney. 
This is really a bigger issue about manufacturing expertise, 
agility and adaptability going out in to the future.
    Mr. Sullivan. I think the thing is, GE knows how to make 
engines really, really well, and there is an awful lot of 
commonality between making commercial engines and making 
military, but there are unique things about making military 
propulsion systems that GE may decide if they do reallocate 
their dollars, they may lose some of the learning that they 
have in those areas.
    Mr. Courtney. Thank you. I just actually wanted to go back 
to Mr. Ahern, because you described the 135 as mature, or 
something that is achieving maturity in terms of its 
reliability, which obviously is an important concern that we 
don't have some type of failure. Mr. Sullivan seemed to 
indicate that maybe it is not that far along. I just wonder if 
you could just respond to his comment about whether or not we 
have something here that the taxpayers or pilots can rely on.
    Mr. Ahern. Yes, sir. As I indicated earlier, the 135 is 
derivative, an extension, if you will, of the 119. It has been 
flying on the first of the conventional takeoff and landing 
jets. I believe some number of them have been delivered and are 
in ground test and to my knowledge, progressing through the 
ground test in a good fashion.
    Mr. Courtney. And last, Mr. Sullivan, looking again at 
these break-even numbers here in the three reports, which 
obviously there is quite a bit of spectrum here, I just wonder 
if you could respond to the other report's suggestion that the 
break-even percentages are going to have to be a lot higher for 
the taxpayer to see savings.
    Mr. Sullivan. Yes, thank you for asking. First of all, I 
think one of the key assumptions that we made is we did not 
include costs already sunk in the program. I am not sure how 
much money that eliminates, but if I am not mistaken the other 
two studies may have included some of those sunk costs, which 
means there are costs that they included in this that are gone 
already. We believe that we should just do what is left, what 
the Congress will have to invest in this. So that is first.
    The next thing we did is we took the sole-source scenario 
and said, what has to happen here if you want to infuse 
competition into this program from this point forward, not from 
fiscal year 2007 and back--that is the sunk cost. What has to 
happen in that scenario is I believe there is another $1.4 
billion that have to be invested in systems development and 
demonstration for the jet engine team's engine. So there is 
$1.4 billion.
    And then the other costs associated with infusing 
competition is you are going to have under the two scenarios we 
used, we looked at if one contractor got 70 percent, then 
another got 30 percent, and then we looked at if each 
contractor got 50 percent. Those were the two data points that 
we went after. When you look at that, you have to assume a loss 
of learning on the part of the sole-source contractor if they 
now have less engines to learn over, so that the learning curve 
is going to be less steep.
    When you include those, what we call ``investment costs,'' 
under the 70-30 scenario, I believe it was an additional $2 
billion. Under a 50-50 scenario, it would be $3 billion. So in 
other words, you would have less learning from both of them if 
you had 50-50. It gets down to the fact that what you have is 
in order to infuse competition into this program, there is an 
additional approximately $3.7 billion to $4.5 billion that will 
have to be kind of up front investment.
    Once we did that, we looked at a sensitivity analysis. We 
basically just said, okay, let's just assume zero percent 
savings, 10 percent savings. I think we did 15 percent savings 
and 20 percent savings. And we simply did that linearly across 
the life-cycle of the program. In our written statement, you 
guys have the slide that shows the results of that.
    If you do that, you get to a break-even point on this at 
10.3 percent if you have a 70-30 split. And I believe it is 
13.2 percent or something like that if you have a 50-50. That 
happens I think somewhere out in the late 2020's. That is the 
point under either one of those scenarios where you would have 
recouped that $4.5 billion. From that point on, you would be 
getting a return on your investment.
    We then looked at the ``great engine war'' really as kind 
of the benchmark for this because it was the only competition 
we could find that was similar to this. It does share a lot of 
similarities. When they competed that program, they got a 30 
percent cost savings in the acquisition portion, and then they 
got I believe--it is in our stuff--but I think it was a 16 
percent savings in O&S because they had competition in 
maintaining the engine.
    As a result, overall they had about a 20 percent cost 
savings after they competed that. The break-even point is 
somewhere between 10 percent and 13 percent, if you don't 
include the sunk costs in the program. That led us feel safe in 
assuming that, having this historical data in hand, that you 
should be able to achieve those kind of savings.
    Mr. Abercrombie. I will have to let it rest with that, 
which was very thorough.
    Mr. Woolsey. If I might, he did say something that was 
incorrect about what we had done, so if I could take a chance 
on that, I would appreciate it.
    Mr. Abercrombie. Sure.
    Mr. Woolsey. We did not include sunk costs in our analysis, 
so that is not the difference between our study and GAO's. In 
my look at what they have done, the key difference is that we 
had costs associated with the second engine in the O&S portion 
that they did not include. These are the costs to improve the 
engine, referred to at CIP or Cost Improvement Program; 
sustaining engineering; and the cost of spare parts would go up 
in the two cases. That is what I saw as the difference between 
our studies.
    Mr. Abercrombie. Right. The difference for us, though, Mr. 
Woolsey at this point, is we have Mr. Sullivan's report in hand 
and we don't have yours.
    Mr. Woolsey. We will remedy that very soon, sir.
    Mr. Abercrombie. Your summary is as you presented it to us 
in the material given to us. I appreciate that. Your memory is 
good. As I say, I know there should be follow up on that, and 
there will be, but for purposes, before we go to Mr. Ellsworth 
then, what you are taking into account in that last statement 
is not just procurement costs, but life-cycle. If I had to 
summarize it in layperson's terms, you are reflecting on the 
entire life-cycle and what the possible savings and/or costs 
are. Right?
    Mr. Woolsey. Yes, we are. We are relying heavily on a 
``great engine war'' actually.
    Mr. Abercrombie. Yes, I understand. You are drawing a 
parallel there, not necessarily an analogy.
    Mr. Woolsey. Right.
    Mr. Abercrombie. Okay.
    Mr. Ellsworth.
    Mr. Ellsworth. Thank you, Mr. Chairman.
    Hearing a couple of my questions already, I would just like 
to make a brief statement and just say that I concur with Mr. 
Davis. I have seen programs before where the specs have been 
written to provide for sole-sourcing, and certainly when I am 
provided with charts like this that show the competition and 
what competition can say, we are talking about $100 billion. 
DOD is one of their biggest projects, and certainly the 
competition is going to be healthy.
    I don't have a question at this time. They have been 
answered.
    Mr. Abercrombie. Thank you. Thank you very much.
    And then we will go to Mr. Wilson, who may not be quite 
ready at this moment. That is all right. Would you like me to 
go ahead, or are you ready?
    Mr. Wilson. I would certainly defer to the chairman.
    Mr. Abercrombie. No, no.
    Mr. Wilson. No, no. I definitely want to defer to the 
chairman.
    Mr. Abercrombie. Okay. [Laughter.]
    Is Mr. Larsen here? Sorry. I didn't see you, Rick. I beg 
your pardon.
    Mr. Larsen. I have no questions.
    Mr. Abercrombie. Okay, no questions.
    Then I will take advantage and give Mr. Wilson a chance to 
catch his breath on this.
    I mentioned about the reports. Here is our difficulty, and 
I do want to make it clear. The legislation last year said that 
the reports had to be here March 15. Now, you have given us a 
summary and I am appreciative of that. The staff is 
appreciative of that, but we are still operating on a little 
bit of a disadvantage because we have to make a recommendation 
on a mark, and we do value what you have to say, and are 
listening very, very closely to it.
    And the report, it is there in the legislation. It is not a 
``let's hope we can do it'' or something like that. It should 
have been here on the 15th. Obviously, you were able to make 
very effective summaries based on what is clearly a lot of hard 
work by a lot of people to get to this stage. When is the 
report going to be here so we can get the same kind of 
briefing, if you will, that we were able to get from Mr. 
Sullivan?
    Mr. Woolsey. In my opening statement, when I referred to 
the briefing we would offer the staff next week, that will be a 
report in itself. It will be 50 pages with a lot of detail 
about what we have done.
    Mr. Abercrombie. Is it the report?
    Mr. Woolsey. Yes, sir.
    Mr. Abercrombie. Required by the legislation?
    Mr. Woolsey. Yes.
    Mr. Abercrombie. How about you, Mr. Ahern?
    Mr. Ahern. Yes, sir. We are able to offer a briefing to the 
staffers as early as next week, but when I checked with the 
CAIG, their report won't be ready next week. But we would like 
to take the opportunity to meet with your staff.
    Mr. Abercrombie. What am I going to do? It says it has to 
be here by the 15th. Do I have to go over and put people in 
stocks?
    Mr. Ahern. No, sir. The CAIG has worked me through a very 
extensive overview of exactly what they did, that I then was 
able to make the written testimony out. There is a difference, 
in my mind, between all the analysis and data is ready I think 
for them to work with or show to your professional staff. The 
bound final report going through that process won't be ready as 
rapidly. We would like to meet with your professional staff to 
get all the information on the table.
    Mr. Abercrombie. Can I have your assurance, from both of 
you, that the briefing that you will give the staff next week 
will be the equivalent of what would have been presented in 
this report that was due on the 15th?
    Mr. Ahern. Yes, sir.
    Mr. Woolsey. Yes.
    Mr. Abercrombie. And that we can make decisions based on 
that?
    Mr. Woolsey. Certainly.
    Mr. Ahern. Certainly, yes, sir.
    Mr. Abercrombie. Okay. Now, I have 10 questions in relation 
to that report. I don't expect you to give me an answer 
necessarily today on it. I am going to submit them to you 
today, and I would appreciate it if you would be prepared in 
the course of the presentation next week to answer those 
questions.
    In other words, we don't want to surprise you next week 
when you come in. It is not a contest, all right? I will give 
you these questions, and some of these questions you have 
already in effect answered, or you have alluded to in both the 
summaries and the statements that you submitted today. So I 
don't think there will be anything particularly surprising to 
you in this.
    I don't know that it is efficacious to necessarily read 
them all. It includes things like did the analysis consider not 
just procurement costs, but life-cycle costs. You have already 
mentioned some of those things already. The time period of the 
life-cycle 2008 through what year--those kinds of things. I 
don't think it will be anything but a standard inquiry anyway, 
but there are 10 things there that I will give you today. Okay?
    Mr. Ahern. Yes, sir.
    Mr. Abercrombie. And be prepared to deal with that next 
week.
    I think I am prepared to go to Mr. Wilson. No?
    I should give the rest of the committee, though, an idea of 
what we are looking for. We want to know what the time period 
or life-cycle for the analysis was, 2008 through what year; how 
many total engines did the analysis assume would be procured 
over the life-cycle of the Joint Strike Fighter Program; the 
estimated dollar value of the engines procured over the 
lifetime of the Joint Strike Fighter program; with and without 
a competitive procurement, what conclusions did each of the 
studies reach about the value of competition other than cost.
    Again, we have run through a lot of this verbally right 
now. But I am sure you can appreciate how much more useful that 
will be if we get it in a structured framework, so that the 
staff can present back to us the conclusions and 
recommendations that they reach, and then I can communicate 
with the other members of the committee what we might want to 
do on this. Because this is a collaborative effort on our part, 
I assure you. I don't just come up with recommendations out of 
the blue.
    The last has to do with, if you don't mind, some of the 
remarks that have been made to this point. The remarks of 
everybody today makes the point that commercial buyers of 
engines include engine operations and support cost metrics for 
their procurement selection criteria. Is it a correct statement 
that the DOD has less experience in integrating procurement and 
operations and support costs in competitions?
    Mr. Woolsey. Certainly.
    Mr. Abercrombie. That is a correct statement?
    Mr. Ahern. Yes.
    Mr. Abercrombie. I wasn't as familiar with it as I am now, 
after listening to you today. I want to make sure that I am 
correct in that.
    Mr. Woolsey. Yes, you are.
    Mr. Abercrombie. So when Mr. Courtney was making a point 
about single source procurements, et cetera, before, that has 
been more the norm than the competition kind of thing. Right?
    Mr. Woolsey. Yes.
    Mr. Abercrombie. Is silence assent, Mr. Ahern?
    Mr. Ahern. No, sir.
    Mr. Abercrombie. I thought you were taking the Thomas More 
approach there.
    Mr. Ahern. I want to say, the support structure for the 
various equipments of the Department of Defense has ranges from 
organic--we do it ourselves--through the depots and the 
uniformed services, all the way through performance-based 
logistics. In the F-35, they are looking at performance-based 
logistics, but we don't have that much experience in that 
paradigm over a long period of time.
    Mr. Abercrombie. Okay.
    Mr. Ahern. Separately, and that is why the CAIG anyway was 
reluctant, though they used, obviously, the life-cycle cost 
estimates in the total estimating, estimating the savings from 
performance-based logistics is not something that they have 
much experience with.
    Mr. Abercrombie. Fair enough.
    Mr. Ahern. And so they are very reluctant to go out on that 
limb.
    Mr. Abercrombie. Okay. That is fair. But I do think that we 
have to, and I will appropriate from Mr. Davis's remarks, I do 
think though when we make this decision, or at least make this 
recommendation to the committee, we do have to I think take 
into account whether we should incorporate operations and 
support costs in competitions, and the whole idea of operations 
and support costs--competition or no competition--in trying to 
make a determination of what direction we should go starting in 
2008.
    Is that fair?
    Mr. Ahern. Yes, sir. That is fair. And we did also, all 
three of us did include it.
    Mr. Abercrombie. We can deal with that next week.
    Mr. Ahern. Yes, sir.
    Mr. Abercrombie. I am sure we all realize the implications 
from this go beyond this immediate issue, whether we start 
talking about competitions.
    Mr. Ahern. Yes, sir.
    Mr. Abercrombie. Right? For a whole lot of things that 
might come out of this. I don't think it is going to be 
isolated around this engine. I think, again I will appropriate 
from Mr. Davis's remarks that this is not a theoretical 
discussion. It is, if you will, a philosophical approach that 
is going to have implications for what we do in terms of 
recommendations on military platforms. Would you agree?
    Mr. Ahern. Yes, sir.
    Mr. Abercrombie. So you may be the pioneers here. So if it 
all works out, you can take credit for it. And if it doesn't, 
they can all blame you for starting the ball rolling.
    I see you are taking the Thomas More approach again. 
[Laughter.]
    Mr. Davis of Kentucky. Mr. Ahern, I would just say that he 
is playing the role of Henry VIII right now, so you better be 
careful. [Laughter.]
    Mr. Ahern. Mr. Chairman, I thought you were talking to your 
colleague, Representative Davis, not to me.
    Mr. Abercrombie. Okay. That is all right.
    Mr. Ahern. I understand the implications of competition. I 
have been involved both in government and the defense industry 
for a number of years. There is a question of the industrial 
base. There is a question of competition. There are a number of 
intangibles. But at the end of the day, it gets down to how 
many do you intend to buy and the affordability issue. And 
though we might want to have many purveyors of many of the 
items that eventually buy, we get down to sole source, as with 
the F/A-18 as was mentioned earlier, after we have had a 
competition between a number of vendors.
    Mr. Abercrombie. Right. And that goes back to Mr. Taylor's 
contention, that what happens when you get to where this is the 
best we can get.
    Mr. Ahern. Yes, sir.
    Mr. Abercrombie. And we are satisfied with it, then how do 
we approach it in terms of funding.
    Fair enough. Thank you.
    Now, Mr. Wilson.
    Mr. Wilson. Thank you, Mr. Chairman.
    I have been advised that you have truly led an excellent 
interrogation of our panel. I at this time waive, in the 
interest of the next panel being presented. Thank you, Mr. 
Chairman.
    Mr. Abercrombie. Very good.
    Anybody else have another round? Or other questions they 
want to go to? Then we will submit these to you, okay? And I 
will give it to you, too, Mr. Sullivan. Why don't you take a 
look and see if there is something you would care to amplify 
from that. Okay?
    Mr. Sullivan. Yes, sir.
    Mr. Ahern. And if I may say, thank you very much, Mr. 
Chairman. I was honored to be here, and don't feel I was 
interrogated at all. [Laughter.]
    Mr. Abercrombie. To think you were inches from a clean 
getaway. So we will have the reports next week though, right?
    Mr. Woolsey. Yes.
    Mr. Abercrombie. Okay.
    Mr. Ahern. Yes, sir. I am committed to having the CAIG meet 
with your staff, but there is a difference between where it is 
now and then the report. But they have all the data, all the 
information, in a form that your staff will find useful.
    Mr. Abercrombie. All right. At that point, then, can I get 
a definitive recommendation from you as to whether the Congress 
should continue to require the development of the alternative 
engine?
    Mr. Ahern. From the Department of Defense, sir?
    Mr. Abercrombie. Yes.
    Mr. Ahern. I will take that, I think, sir. Yes.
    Mr. Abercrombie. We can get that. In effect, we have it 
now, but after all, if you are going to do another briefing 
next week, between now and next week you may have some 
refinements you want to deal with. Okay?
    Mr. Ahern. Yes, sir.
    Mr. Abercrombie. Thank you.
    Let's go to the next panel, then. I think we will have a 
few minutes before we get to the vote.
    While the panel is getting settled, I will just announce 
who they are. Why don't we go in reverse order of questions? We 
will start with Mr. Wilson and work back up, if he is still 
here.
    General Mundt, then we will go to Mr. Balderson, Admiral 
Clingan, General Castellaw, General Chandler, and then General 
Hoffman. In that order, okay? If we work expeditiously here, 
maybe we can get all the statements in and get to the questions 
or observations from the members.
    General Mundt, I don't mean to be precipitous with you 
folks, but why don't we just move right into your summary? We 
will accept everybody's statements, of course, in full. If you 
can summarize for us, then we will go right down the line. I 
would be very grateful.
    General Mundt. Sir, clearly I can. What I would ask is, I 
have a written statement here that was summarized from the 
former written, and I would like to add that because of the ARH 
developments. It has some words in here that were not in the 
original statement submitted to you. So I would like to add 
this piece of paper for the record.
    Mr. Abercrombie. Without objection.

  STATEMENTS OF BRIG. GEN. STEPHEN D. MUNDT, USA, DIRECTOR OF 
 ARMY AVIATION, OFFICE OF THE DEPUTY CHIEF OF STAFF, G-3/5/7, 
 U.S. ARMY; WILLIAM BALDERSON, DEPUTY ASSISTANT SECRETARY FOR 
 NAVAL AIR PROGRAMS, OFFICE OF THE ASSISTANT SECRETARY OF THE 
  NAVY FOR RESEARCH, DEVELOPMENT, AND ACQUISITION; REAR ADM. 
 BRUCE W. CLINGAN, USN, DIRECTOR, AIR WARFARE DIVISION (OPNAV 
88), HEADQUARTERS, U.S. NAVY; LT. GEN. JOHN G. CASTELLAW, USMC, 
   DEPUTY COMMANDANT FOR AVIATION, HEADQUARTERS, U.S. MARINE 
  CORPS; LT. GEN. CARROL H. ``HOWIE'' CHANDLER, USAF, DEPUTY 
    CHIEF OF STAFF FOR OPERATIONS, PLANS, AND REQUIREMENTS, 
HEADQUARTERS, U.S. AIR FORCE; LT. GEN. DONALD J. HOFFMAN, USAF, 
 MILITARY DEPUTY, OFFICE OF THE ASSISTANT SECRETARY OF THE AIR 
                     FORCE FOR ACQUISITION

            STATEMENT OF BRIG. GEN. STEPHEN D. MUNDT

    General Mundt. Chairman and Mr. Saxton and Mr. Taylor, one, 
thank you very much. I am happy to be here today. Our Army 
today is deployed worldwide and operating----
    Mr. Abercrombie. General, I will tell you we have 15 
minutes to the vote, so if everybody can get in within that 
time, I would be grateful.
    General Mundt. Bottom line, let me just go to the one 
paragraph in the back of the statement that says: The Army 
reconnaissance helicopter right now, with Bell Helicopters, we 
have given them notice due to cost, schedule and performance 
issues, and we have asked them to come back in 30 days and 
describe a strategy on how they are going to move the cost and 
the schedule into a positive direction. Our Armed 
Reconnaissance Helicopter (ARH) is more important today than it 
has ever been at any time prior to this. It is part of our 
modernization plan and it is part of the Comanche termination 
dollars that you have allowed us to keep and reinvest.
    Sir, with that, I will defer to my colleagues.
    [The prepared statement of General Mundt can be found in 
the Appendix on page 112.]
    Mr. Abercrombie. Mr. Balderson.

                 STATEMENT OF WILLIAM BALDERSON

    Mr. Balderson. Yes, sir, Mr. Chairman. Thank you very much.
    Out of respect for the time, I will be very brief. I can 
get through this in about a minute-and-a-half.
    I do want to start by thanking the members of the 
subcommittee for your outstanding support of the Navy and 
Marine Corps programs. Your Navy-Marine Corps team continues to 
play a major role in the global war on terror with significant 
involvement in Operations Enduring Freedom (OEF) and Iraqi 
Freedom (OIF). These efforts are reflective of the substantial 
return on your investment in our combat readiness, our people, 
and our unique maritime warfighting capabilities.
    The fiscal year 2008 President's budget request balances 
continued recapitalization and attaining new capabilities, 
while simultaneously sustaining the legacy fleet of aircraft 
that are performing magnificently in current operations. We 
continue to execute numerous multi-year procurements to achieve 
significant savings in procurement accounts. The department's 
fiscal year 2008 budget request continues multi-year 
procurement arrangements for the F/A-18E/F, KC-130J, and the V-
22.
    Our proposed plan will procure 117 fixed-wing aircraft, 65 
rotary-wing aircraft, and 3 unmanned air vehicles. The plan 
also continues development of the F-35 Joint Strike Fighter, 
the E-2D Advanced Hawkeye, the EA-18G Growler, the P-8A Multi-
mission Maritime Aircraft, the VH-71 Presidential Helicopter 
replacement, and the CH-53K Heavylift replacement.
    The fiscal year 2008 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. The department's aviation acquisition team continues 
to work aggressively to identify efficiencies in development, 
testing and subsequent procurement of platforms, components and 
weapons systems in order to ensure investments made result in 
quality products and services provided to the fleet.
    Mr. Chairman, this concludes my remarks. Thank you again 
for your outstanding support. I look forward to your questions.
    [The prepared statement of Mr. Balderson can be found in 
the Appendix on page 130.]
    Mr. Abercrombie. Thank you very much.
    General Castellaw.
    Oh, Admiral Clingan. I am sorry, I went down one name.

            STATEMENT OF REAR ADM. BRUCE W. CLINGAN

    Admiral Clingan. Mr. Chairman, thank you, and the 
distinguished members of the subcommittee. Thank you for the 
opportunity to appear before you today to testify in regard to 
tactical aviation.
    The fiscal year 2008 President's budget balances 
conventional and irregular warfare aviation capabilities, 
reduces excess capacity, and achieves technological superiority 
through cost-wise investments in recapitalization, sustainment 
and modernization programs. I have prepared a written statement 
and request that it be submitted.
    Mr. Abercrombie. Without objection, all statements will be 
in.
    Admiral Clingan. Thank you, sir.
    In the interest of reserving time for questions, I will 
forego any more opening statements.
    [The prepared statement of Admiral Clingan can be found in 
the Appendix on page 140.]
    Mr. Abercrombie. Thank you very much, Admiral.
    Now, General Castellaw. Excuse me.

            STATEMENT OF LT. GEN. JOHN G. CASTELLAW

    General Castellaw. Yes, sir. I can understand how you could 
misidentify the admiral and myself, sir. I am better looking. 
[Laughter.]
    Sir, my statement----
    Mr. Abercrombie. I was with you right up until that last 
comment. [Laughter.]
    General Castellaw. Again, I appreciate entering the 
statement in the record. We will defer any additional comments 
to questions. Thank you.
    [The prepared statement of General Castellaw can be found 
in the Appendix on page 148.]
    Mr. Abercrombie. Thank you.
    General Hoffman.
    General Hoffman. Mr. Chairman, I have no opening remarks.
    Mr. Abercrombie. And General Chandler.

       STATEMENT OF LT. GEN. CARROL H. ``HOWIE'' CHANDLER

    General Chandler. Mr. Chairman, thank you also for the 
opportunity to be here today. I know we have a number of 
important programs that are important not only to you, but to 
our Air Force that involve our Air Force fighter fleet, 
bombers, missile and standup jammer programs.
    I would simply like to thank you and the members for the 
support that you have given to your Air Force. Please be 
assured the young men and women that are in the field today are 
doing a great job on behalf of this Nation. I would reserve any 
other comments pending your questions.
    [The joint prepared statement of General Chandler and 
General Hoffman can be found in the Appendix on page 162.]
    Mr. Abercrombie. Thank you very, very much.
    I will say there are three programs of particular interest 
to the Air and Land Forces Subcommittee: the Armed 
Reconnaissance Helicopter, the CSAR-X in the Air Force--the 
combat search and rescue helicopter--and the Air Force proposal 
on the retirement of the B-52s. We will get to that.
    We are go and in reverse order, then, from the first panel. 
That means this is Dr. Gingrey's lucky day. He will be the 
first to talk, although apparently an impostor is sitting in 
his seat, because he clearly does not have the same physiogamy 
that we are used to.
    Dr. Gingrey. Mr. Chairman, could I defer?
    Mr. Abercrombie. Certainly. Okay.
    Then I think we are going back to Mr. Larsen.
    Mr. Larsen. Thank you. Are we under the five-minute rule?
    Mr. Abercrombie. No, actually we are going to go like a 
two-minute rule, because we are going to have the votes. So I 
am trying to get as many people in. Let's just limit it to one 
question and an answer, even if you have to go to more than one 
person.
    Mr. Larsen. Okay, I have 1 question that has 19 parts and I 
would like to----
    [Laughter.]
    Mr. Abercrombie. We will come back. I think it is just one 
vote, and we will come back. Don't worry about that.
    Mr. Larsen. All right.
    Representing a district with a couple of Navy bases, one of 
which, Naval Air Station Whidbey Island, which is home of the 
Prowlers; and next after that, the E-18Gs; and then the multi-
mission aircraft (MMA) being built in Washington state to 
replace P-3s. I am pretty well up to speed on a lot of our 
electronic warfare platforms and the technology.
    I guess for my one question pre-vote I would just ask the 
Navy, Admiral Clingan, about this. In somebody's testimony, you 
were talking about the Navy's coordination with the Air Force 
on jamming transmitters. Of course, the Air Force has been 
through discussions on Stand-off Jammers or not Stand-off 
Jammers, recently deciding not to do a Stand-off Jammer. This 
testimony here, I think it is under Admiral Clingan's 
testimony, is that the Navy is working with the Air Force on 
jamming transmitters.
    I guess I would like a straight story--not a straight 
story. It is not that anyone hasn't given me a straight story, 
I just hear a lot of things. Is the Air Force continuing to 
pursue electronic warfare stand-off jamming with the Navy? Is 
that going to be the Navy's role? I know the Marine Corps is 
eventually doing to cycle out of their Prowlers and look to the 
Navy to supply that platform.
    Can someone answer that question for me?
    General Chandler. Sir, if I may, I will start. The Air 
Force is committed to the department's system of systems 
electronic attack. You are exactly right. We cancelled the 
first attempt at the B-52 Stand-Off Jammer primarily for cost-
growth reasons. It was a $7 billion program, and frankly it was 
trying to meet too many needs at the cost of what we really 
needed it to do.
    We have gone back in a program we call the CCJ, which again 
is based on modifying 30 B-52s with 24 ship-sets of jamming 
pods.
    Mr. Abercrombie. ``CCJ'' is the core component jammer?
    General Chandler. I am sorry. Yes, sir, the core component 
jammer, which basically gives us the capability to get at the 
low-band, high-powered jamming problem that we think we are 
faced with. I will be honest and tell you that because of the 
cancellation of the B-52 program the first time, we are now in 
a situation where we find ourselves coming up on 2012, when the 
Navy and the Air Force memorandum of understanding (MOU) 
regarding jamming with Prowlers is coming to an end.
    So we are in a situation where we are going to continue to 
work with the Navy to fill that gap between 2012 and about 
2015, where we think we can bring the core component jammer 
program into play. We will have an opportunity to do that with 
a Program Assessment & Evaluation (PA&E) analysis that is due 
back sometime in May, I believe. And then we have some senior 
leader talks in April with the Navy where this will be a 
discussion topic.
    Mr. Larsen. Admiral Clingan.
    Admiral Clingan. Congressman, the Navy continues to move 
ahead on its EA-18G program. It is in fact performing on cost 
and ahead of schedule to deliver the Navy element of that 
system of systems that my colleague referred to. We will reach 
full operating capacity or capability in fiscal year 2012 in 
accordance with that memorandum.
    In the technology development realm, we continue to partner 
with the other services as we look to field that system of 
systems. So we are leveraging the complementary efforts in that 
realm.
    Mr. Abercrombie. Thank you very much.
    Mr. Wilson.
    Mr. Wilson. Thank you, Mr. Chairman.
    Any of you may answer this, but there was a report today in 
Inside Defense that the VH-71 Presidential Helicopters could be 
built overseas instead of in the United States. Is anyone 
familiar with this issue?
    Mr. Balderson. Congressman, I will take that one. As you 
saw from the fiscal year 2008 budget submit that the Navy-
Marine Corps submitted, it is incomplete with respect to VH-71. 
If I could give you a minute's history of why that is true and 
what the way forward it, I think you will understand where we 
are with respect to restructuring some decisions we have to 
make.
    We have had discussions with this subcommittee, with GAO 
and others in the past about the challenge in the VH-71 
schedule. The fact is, we recognized in the October-November 
timeframe that the increment two schedule in our program of 
record was not executable. We submitted a budget that removed a 
significant amount of fiscal year 2008 funds because we knew 
that we could not execute that program.
    The problem is we did not have enough information at the 
time to complete the restructure of the program and vet that 
through the approval process within the Pentagon. The real 
problem is, because of our focus on increment one, the 
increment two design is immature and we are not in the position 
yet to do the detailed analysis that we need to do to make a 
final determination as to what schedule and what cost the 
increment two could operate to.
    The key event that is going to happen in about two weeks is 
what we call a ``systems requirements review.'' It is very 
significant because that is the point at which the Navy and 
Lockheed Martin will sit down and they will make sure that we 
already understand the requirements. This is when we understand 
the detailed engineering approach to how the contractor will 
meet those requirements. Once we have all of that nailed down 
in the next couple of weeks, we then will go in and evaluate 
that against the current schedule.
    What we do know is that we are not going to be able to 
execute the schedule that we are on now. The timing of that 
will be to go through a Defense Acquisition Board review in the 
fall. We will come over and brief the committee staff on that 
re-plan and restructure as part of the submittal of the 2009 
budget. The fiscal year 2009 budget, then, will reflect the re-
plan strategy.
    Mr. Abercrombie. Excuse me. Are you answering Mr. Wilson's 
question?
    Mr. Balderson. I am getting ready to, sir. Part of the 
consideration that we have gone through is a consideration of 
risk. A part of that consideration is the risk of whether or 
not it would be more risky to build--the current strategy calls 
for building the first five helicopters in Agusta-Westland, and 
moving all the remainder helicopters to Bell. That is still our 
acquisition strategy. That has not changed. We have done an 
end-to-end review of this program, and that continued 
assessment will unfold over the next few months.
    One of the things we have looked at is whether or not that 
adds risk to the program, or whether or not bringing the 
helicopters back to Bell for the first low rate initial 
production (LRIP) of increment two is still the appropriate 
thing to do. We are still in the process of that evaluation. 
Any information that we have changed that acquisition strategy 
is premature. Once we decide on the approach, we will come over 
and share all that information.
    Mr. Abercrombie. I don't want to take Mr. Wilson's time, 
but wait a minute. Didn't he just ask you, ``Are you going to 
build this helicopter overseas, out of the country?''
    Did I misunderstand your question?
    Mr. Wilson. That was the question.
    Mr. Balderson. Sir, the program of record is to build the 
first five helicopters overseas at Agusta-Westland. That has 
always been the program of record. And then it is to bring all 
of the increment two aircraft back to the United States to be 
built at Bell. That is still the program of record and that is 
still the acquisition strategy.
    Mr. Abercrombie. That is not the final helicopter?
    Mr. Balderson. No, sir. The first five that will be built 
at Agusta-Westland will be operational aircraft. They will be 
the first increment that the President will fly in. Then we 
will move to what we call the increment two, which is the much 
more extensive capability. We will build 18 increment two 
aircraft.
    Mr. Abercrombie. I understand. Wait. Mr. Wilson, can we 
work this together?
    Mr. Wilson. Yes.
    Mr. Abercrombie. We did this before.
    Mr. Wilson. You are doing good. [Laughter.]
    Mr. Abercrombie. You understand, I have a particular 
interest in this?
    Mr. Balderson. Yes, sir.
    Mr. Abercrombie. You remember that?
    Now, we have had a classified briefing about what we are 
talking about in this second increment.
    Mr. Balderson. Yes, sir.
    Mr. Abercrombie. I didn't like the first one, but that is 
all right. I don't like a lot of things, but I don't 
necessarily get my way. But I will tell you this: You are not 
building any final helicopters for the President of the United 
States outside this country, not as far as this member is 
concerned.
    Now, I don't know what the hell I have to do to prevail on 
that, but I will tell you right now you are not building, as 
far as I am concerned, any helicopters outside of this country 
for the President of the United States.
    Mr. Balderson. The current strategy, sir, is----
    Mr. Abercrombie. I don't care what your current strategy 
is. I am telling you what my strategy is. I am not the only 
one.
    Now, how the hell long does it take to get that message 
into the Pentagon? Am I missing something here, Mr. Wilson?
    Mr. Wilson. No, I appreciate your pursuing it.
    Mr. Balderson. Mr. Chairman, I respect and appreciate that 
and we need to continue this dialogue. I would only say that we 
have testified consistently----
    Mr. Abercrombie. I know how you have testified, and you 
guys know how we feel about this. We had this classified 
briefing and I know what you expect to have in that classified 
briefing, and if you think for a second that a helicopter that 
the President of the United States is going to fly in, 
particularly as a result of the information that we got from 
that classified briefing, is going to be built overseas, where 
we can't control the circumstances under which the helicopter 
is built, you have to be dreaming.
    Do you get a clear idea of what happened when we got into 
this business of ports being owned overseas, by overseas 
companies and so on? You are not going to build a helicopter 
for the President of the United States overseas.
    Mr. Balderson. Mr. Chairman, let me clarify, because I may 
be mis-communicating. I understand. All of the helicopters' 
final assembly will be in the United States at Lockheed Martin-
Owego. So all 23 of the helicopters' final assembly; all of the 
missionization and final acceptance will be in the United 
States.
    Mr. Abercrombie. What about all the components that are 
going into that helicopter?
    Mr. Balderson. The current strategy is for the helicopters, 
only the first five, to be built in Yeovil, England. Once we 
get through building, then the last 18--those first 5 will have 
to be rebuilt because frankly the difference in configuration 
in the first increment and second is so great.
    Mr. Abercrombie. I understand that. I didn't like it. Mr. 
Wilson and other people didn't like it, but we are willing to 
go along with it. But I thought we made it clear. Now, if we 
didn't--I thought we made it clear.
    Am I wrong, Mr. Wilson?
    Mr. Wilson. No. I agree.
    Mr. Abercrombie. I thought we made it clear that the 
helicopters after that were going to be built in the United 
States under our control. I don't understand. It is the 
President of the United States. Why on Earth would we want to 
build anything for the President of the United States that 
anybody else, particularly in this global war on terror, why on 
Earth would we want to build something outside the United 
States for the President of the United States to fly in?
    I will tell you, when this helicopter gets built, according 
to what is supposed to be in there from the point of view of 
the classified briefings that we received on this, that is 
going to have to built under circumstances where we know 
explicitly who is going to be working on it.
    Again, am I missing anything?
    Mr. Wilson. No.
    Mr. Abercrombie. It is going to be under circumstances in 
which the people going in there are going to be vetted, and as 
far as I am concerned--and I am not the only one--that 
helicopter has to be built under very strict protocols with 
regard to who has access to how it is being built and under 
what circumstances.
    Mr. Balderson. Yes, sir.
    Mr. Abercrombie. Do we have to write this into the 
language? Because I am not going to go fool around. Believe me, 
I am not going to go fool around with this and leave it to 
chance. I will write language that will put a fence around this 
that you will never get through, if we have to. I don't want to 
get into this kind of a deal. Come on. Don't fool around with 
this. Okay?
    Mr. Balderson. Yes, sir.
    Mr. Abercrombie. I am taking too much time, but don't fool 
around with this Presidential helicopter. Don't play games with 
the helicopter. I don't care who has what kind of deals made 
with who about this. The helicopters for the President of the 
United States are going to be built in this country. They are 
going to be built under circumstances in which we control 
exactly and explicitly what goes into those helicopters and 
under what circumstances they are built.
    Now, if we have to go into some kind of particular language 
to put this together, I will. If people want to go and vote 
against that, they can be my guest. I can guarantee you right 
now--guarantee you right now--that at least as far this member 
is concerned, that is the way it is going to be. If the rest of 
the Congress wants to vote me down and take chances on who 
builds the Presidential helicopter and who has access to what 
goes into it, and how it goes into it, then they can go vote 
that way. But I don't think you are going to find many members 
who are going to do that.
    Mr. Balderson. I understand, Mr. Chairman.
    Mr. Abercrombie. Stop fooling around with this. The mere 
fact that you had to go into three or four minutes of an answer 
to a very simple question tells me that somebody out there must 
know.
    I am not blaming you, Mr. Balderson. Please don't think 
this is personal with you. Honest, it isn't. You did a very 
good job of making a very elliptical approach to this.
    And you are saved because I hear the bell going off for the 
vote. We will come back into the hearing, and I promise I won't 
arm wrestle with you. Okay?
    Mr. Balderson. All right.
    Mr. Abercrombie. But is that message clear enough, Mr. 
Wilson? I took your whole time.
    Mr. Wilson. Yes. Thank you, Mr. Chairman.
    Mr. Abercrombie. We have to go into recess. It is a 15-
minute vote on the rule on the supplemental appropriations 
bill, so it might take a little bit longer because I am sure 
they will want to let everybody come and vote. And then there 
are two five-minute votes, which I think probably won't take 
much more than five minutes each. But that probably means it is 
going to be a half-hour or 40 minutes, I would guess, before we 
come back.
    I am awfully sorry. Obviously, we haven't even begun to get 
to all the questions. Is that okay with everybody? We will come 
back within five minutes after the third vote.
    Dr. Gingrey. Mr. Chairman? Do we have time for possibly a 
quick question?
    Mr. Abercrombie. Oh, sure. We can go probably for 10 or 12 
minutes more. Yes. In fact, Mr. Ellsworth is next, and that 
will be followed by Mr. Davis. So can we keep in mind we have 
about 12 minutes?
    Mr. Ellsworth. Thank you, Mr. Chairman.
    With all due respect to you and the President, I would be a 
little concerned on any helicopter that any of our warfighters 
are flying in on their safety as well. I don't think it is any 
secret that it is very possible to program some of those 
components that could then feed back into our systems.
    Is it not possible--and anybody can take this--that, say, a 
plane would go down overseas or a foreign entity could get a 
hold of our equipment and program those computer chips and/or 
layers deep enough in those layers that when we get that plane 
back, and they have built it back, that it could then mess up 
our systems when the programming starts? Is that possible?
    Mr. Balderson. Congressman, if you are referring to the VH-
71--and I can't get into the details in unclassified mode--but 
the sophistication of the anti-tamper techniques and the 
control of those parts is unparalleled. So I think it is very 
unlikely that those parts would get into any other hands. And 
certainly the control of these parts is such that none of the 
parts of the VH-71 would ever get into any other U.S. aircraft.
    Mr. Ellsworth. But if their parts were designed and/or 
constructed somewhere else in layers, a computer expert with as 
much expertise as we might have could lay something in a layer 
of those chips and/or pads that could make it into our 
airplanes, or even into the system, when we are analyzing the 
system, through the computers.
    Maybe I am not being perfectly clear.
    Mr. Balderson. No, sir. I understand. I would only say 
again, we can't go into all the details of the clearance and 
the protection, but it is a very sophisticated and robust anti-
tamper. I will tell you that today on the H-3, a considerable 
number of those parts are not made in the U.S., but the control 
is very, very, very tight, and the types of clearances those 
people have that are step-functions above anybody else, and the 
controls all the way from the manufacturing process through 
incorporation and the maintenance and so on and so forth is 
extremely robust.
    Mr. Ellsworth. Okay. Thank you.
    Admiral Clingan, during the last panel, we talked a lot 
about competition and sole sourcing. I notice on page three of 
your document, as it relates to JSF and F136, that in the 
second line you are talking about the alternate engine for the 
JSF is undesirable for a variety of reasons. Could you 
elaborate on that a little bit? I think you were sitting in the 
first panel and heard about sole sourcing and the spirit of 
competition. Could you elaborate on that a bit?
    Admiral Clingan. Yes, thank you for the opportunity to 
comment.
    There are about three factors at the top level that we 
consider. One is the nonrecurring developmental costs 
associated with the second engine in the context as we balance 
the opportunity costs associated with that investment, versus 
investing elsewhere across the portfolio with similarly 
imperative needs. Those costs were discussed at length in the 
first panel. I won't venture into that realm except to say that 
there is an opportunity cost.
    If you look at the production phase, the cost of standing 
up two production lines, and then the diminished learning 
curves as both of the sources make their way through their 
build and production runs, you lose some savings and 
efficiencies there that you would get with a single source. And 
then the dual logistics trains to support the two engines are a 
concern to us as well.
    Historically, it is not uncommon to have a single engine 
provider for a tactical airplane. Two recent examples are the 
F-18E&F, which has been alluded to, but the F-22 as well. The 
F-22 engine is the F119. It has about 18,000 hours on it and it 
is running very reliably. With respect to modern technology, we 
see great leaps and bounds from what we did 10 or 15 years ago.
    Mr. Abercrombie. We will have to let it go at that point, 
Admiral. Sorry.
    Mr. Ellsworth. Thank you, Admiral.
    Mr. Abercrombie. We will go to Mr. Davis.
    Mr. Davis of Kentucky. Thank you, Mr. Chairman.
    I think if Chairman Abercrombie wasn't so shy and retiring, 
he might have made his point more clear on the VH-71s. So I 
would like to follow on his line of reasoning and also echo 
that it is not a partisan issue. We feel very strongly in this 
committee that the President's aircraft will not be constructed 
overseas. I would ask you, and this is just one more example of 
some administration shortfalls that have been quite regrettable 
for lack of advanced political communication with us here on 
Capitol Hill to talk about how we communicate this back to our 
citizens, who do have some fairly strong feelings on this.
    I agree that on our side, we will help in any way possible 
to craft the language to assure that that aircraft is not built 
there. We might as well build it in France--what the heck?--
under the circumstances. This is a patriotic issue. I am very 
well aware of the quality of foreign-constructed aircraft, 
having flown them myself in the military, but this is something 
very visceral with the American psyche.
    I think that having the American people told that they are 
going to be flying on a British aircraft is unacceptable, 
despite that they are our allies. Although we might have some 
type of exchange if the prime minister and the queen would like 
to fly on American aircraft built in the United States, I think 
we would find a similar response from the British as well.
    I would like to actually direct my question to General 
Mundt. One of the test aircraft of the Armed Reconnaissance 
Helicopter recently crashed. Contract options starting last 
December have been allowed to lapse in certain cases. The Army 
held an acquisition review of the program this week. I was just 
wondering if you could comment on the status of the program, 
including what would be at least a quick summary of cost and 
schedule information.
    General Mundt. Thank you, Mr. Davis. I will comment on it.
    The crash on the one System Development and Demonstration 
(SDD) developmental aircraft is still under investigation by 
the National Transportation Safety Board (NTSB), so we don't 
have the final results. What we do know is there was a fuel 
blockage and that is why the engine shut down, and that is why 
it landed on the golf course.
    Now, in terms of the cost, schedule and performance, what 
we know at this point is that we went to a competition and were 
looking for an aircraft that could be developed, because we are 
going to go commercial off the shelf, add some mission 
equipment packages, and get it fielded quickly to replace an 
aging aircraft in terms of the OH-58 Delta. And we expect to be 
able to buy that at a relatively low cost.
    We did have a number of competitors that came in and bid on 
that. Bell won the competition. Bell's initial going-in 
position was that this aircraft was going to be built for $5.2 
million. They are now indicating that that cost could be as 
high as $9 million to $10 million. The schedule was that it 
would be delivered not later than December.
    The contract that we wrote, because we were trying to pull 
this aircraft as far to the left as we could, and that was 
going to be December of 2009, the contract we wrote was for 
October of 2008. We right now question whether or not they will 
make the December 2009 timeline. So now we have lost almost a 
year of schedule, and we have some cost increases.
    Now, whether or not that is all true, that is what Bell has 
been given 30 days now to come back to the department and 
explain to us if there is a cost increase, why there is a cost 
increase, what the schedule implications are, and what Bell and 
Textron are going to do to mitigate those. In 30 days, we will 
come back to you with their response and then we will show you 
our path ahead within the next 45 days.
    Mr. Davis of Kentucky. Would you mind sharing that 
information directly with my office as well?
    I have just one other question that I will ask you, just 
for the sake of time, if you could consider responding in 
writing, too? This is regarding other potential DOD or Army-
specific concerns with the contractor's ability to perform on 
this program, based on some of the challenges they have had 
with the UH-1Y and AH-1Z programs.
    General Mundt. Sure. We will take that for the record.
    [The information referred to can be found in the Appendix 
on page 184.]
    Mr. Davis of Kentucky. Okay. Thank you.
    I yield back, Mr. Chairman.
    Mr. Abercrombie. Thank you very much.
    General Mundt, our problem here is we have about 30 days 
before we have to come up with recommendations. So we need to 
talk, okay, about how we deal with this situation to try to 
make it work out right.
    Let's go to Dr. Gingrey. We are down to about five minutes. 
I understand you have something real quick you need to get in. 
We will come back after this.
    Dr. Gingrey. Mr. Chairman, I thank you for that courtesy. I 
certainly appreciate it. It is a real quickie.
    General Hoffman, the authorization language last year calls 
for the Secretary of Defense to sign a multi-year contract on 
the F-22, but of course certification in regard to cost 
savings. I am just very curious where we are in that process, 
how close we are being to getting that accomplished. I thank 
you so much.
    General Hoffman. Yes, sir. That process is working forward. 
We are on-contract for lot six, as you know, and we are now in 
negotiation with the vendor for lot seven and for the multi-
year, so that comparison between an individual lot and the 
first of a multi-year lot can be made. We are tracking to have 
all that information on time for the Secretary to certify that, 
with 30 days notice, and then go on-contract by August. That is 
the timetable we are holding to.
    Dr. Gingrey. Did I hear you say ``by August''?
    General Hoffman. August. Yes, sir.
    Dr. Gingrey. Thank you, General.
    Mr. Chairman, thanks again for your courtesy.
    Mr. Abercrombie. You bet.
    Thank you in advance for your patience. We will be back as 
soon as we can. We will just take a recess for these votes.
    [Recess.]
    Mr. Abercrombie. I am going to take advantage of the 
stragglers to let Mr. Larsen get in out of sequence, because he 
has a short question and some other responsibilities to get to. 
I am sure all of his colleagues will acquiesce to his need.
    Mr. Larsen. All of my colleagues will acquiesce. 
[Laughter.]
    Thank you, Mr. Chairman.
    Mr. Abercrombie. Excuse me. We are calling the hearing back 
into session. I think I should say that.
    Mr. Larsen, please.
    Mr. Larsen. Yes.
    Unfortunately, part of the question would have included an 
Air Force answer, but it does include the Navy and the Air 
Force. It is really the follow-up to the question I asked last 
time with regard to the electronic warfare capability and the 
platforms, and that 2012-2015 timeframe for the Air Force. 
Admiral Clingan, you can get started on this answer.
    The MOU with the Navy and Air Force ends in 2012. What are 
you anticipating happening from a Navy perspective after 2012 
with regards to the Air Force? Are you anticipating 
renegotiating, extending, finding other platforms to help the 
Air Force fill that need? Or is that something the Air Force 
has to do basically on their own?
    Admiral Clingan. When the services are faced with 
capability gaps, we move forward through a process where we 
make sure that we understand the gap, and we have a 
requirements process that helps us move forward coherently to 
field solutions.
    In the case of the electronic attack (EA) realm, the system 
of systems, the EA-18G has a wonderful capability across the 
spectrum in terms of radar jamming and com-jamming and those 
types of things, but it is a tactical airplane and all that 
that implies. And so the system of systems also includes a 
long-range, long-dwell persistent required capability.
    So we will be partnering with the Air Force and the rest of 
the joint force to bridge this gap, but the Growler itself is 
not the perfect solution for that.
    Mr. Larsen. Right. General, I was just asking the question 
about that 2012-2015 gap for the Air Force, so the likely 
follow-up to my previous question here, is what the Air Force 
and Navy anticipates doing to fill that, or is that going to be 
an Air Force task to fill through 2015, assuming the core 
component jammer technology matures to the point where you can 
actually field it in 2015.
    General Chandler. Sir, we feel like that is an Air Force 
niche to fill based on the persistence that we talked about, 
and based on the high-power, low-band jamming requirement for 
surveillance radars.
    Mr. Larsen. So can you talk about just quickly the steps 
then? You are obviously thinking about it. When do you actually 
start taking steps to field something in 2012 through 2015?
    General Chandler. Sir, what we have done is go back through 
our system. We have asked for money in our unfunded priority 
list to start technology maturation to allow us to begin in 
2009 to be able to field by 2015. That is our plan right now.
    Mr. Larsen. What about 2012 through 2015?
    General Chandler. Sir, obviously we are not going to have a 
core component jammer at that point. We are going to have to 
rely on the Navy to continue to do what they are doing with the 
E-6B or the EA-18 Growler. As I indicated, we will have to sit 
down with them and talk about the MOU which expires this year.
    Mr. Larsen. If I may, Mr. Chairman, then from the Navy's 
perspective, I am hoping the Growler is flying, but the Initial 
Operational Capability (IOC) is supposed to be 2009 for the 
first couple, and then we cycle into 2012 and so on. We are 
talking about having a persistent presence with the Stand-Off 
Jammer. As you said, the EA-18G is derivative of the F/A-18, 
and so it is not necessarily designed to float around silently 
or quietly and provide that persistent long-range jamming.
    So I guess I am still not understanding fully what happens 
between 2012 and 2015, from a platform-use perspective, to 
provide an important role for persistent long-range jamming, 
when we have capabilities that may be on platforms that are not 
necessarily designed for that.
    Have I defined the problem pretty well?
    General Chandler. Yes, sir. You have, and you have hit the 
nail on the head. There is a gap between 2012 and 2015 for a 
low-band, high-powered jammer.
    Mr. Larsen. And not necessarily a platform as well to 
provide that? Admiral.
    Admiral Clingan. Congressman, clearly the Growler has 
capability across the full spectrum. It can achieve the effects 
that we need. What you are referring to is the capacity gap, a 
gap in the long-range persistent realm.
    Mr. Larsen. Right.
    Admiral Clingan. We have to work through the joint process 
to determine whether we are going to assume the risk associated 
with that shortfall in capacity between 2012 and 2015, or 
whether we are going to come up with some mitigation way 
forward, which to date has not been determined.
    Mr. Larsen. Okay. I know this is obviously a matter that 
perhaps warrants further discussion in a different setting, in 
some respects. I know it is a combination of platforms and 
capabilities, and the right mix and so on. The reason I am 
asking this question, one reason obviously I am asking these 
questions is I want you all to know that there is at least one 
person on the committee--there are several others--who has an 
interest in this and interest in helping you move forward and 
helping define that and get the support necessary to move 
forward.
    To the extent that you can keep me up to speed on that, I 
would very much appreciate it.
    General Chandler. Sir, we will take that, if you like, and 
we can come back and give you our overall look if that would 
help.
    Mr. Larsen. That would be extremely helpful. Thank you.
    Thank you, Mr. Chairman.
    Mr. Abercrombie. Thank you, Mr. Larsen.
    Mr. Bartlett.
    Mr. Bartlett. Thank you very much.
    Gentlemen, thank you very much for your patience. I have a 
short series of questions. I believe that they should be 
directed at General Hoffman, but others may wish to respond.
    A couple of days ago, Secretary Wynne told the Senate Armed 
Services Committee (SASC) that the Air Force commits to re-
solicit fully revised bids from the three current CSAR-X 
industry competitors. However, today there are press reports 
indicating that the USAF intends to issue an amended Request 
for Proposal (RFP) soon that will only ask the bidders to 
revise and resubmit their O&S costs. Later, pending a GAO 
review and ruling on additional protest points, the Air Force 
might again amend the RFP to incorporate those additional 
corrective actions.
    This seems inconsistent--a broad reevaluation of fully 
revised bids, versus narrowly amended bids including only 
revised O&S data. So which is it? Can you clearly explain to 
this panel the Air Force's intent regarding how it will enact 
the official recommendation of the GAO to amend the RFP, reopen 
discussions with the bidders, and request fully revised 
proposals for CSAR-X?
    General Hoffman. Thank you. I agree there is a lot of 
confusion in this process. Just to back up a little bit, we 
have a source selection process. We picked a winner. The other 
two vendors protested. The GAO then addressed that protest and 
they came back with a sustained protest on the one item, and 
that is how you figure manpower in life-cycle costs, the O&S 
costs you talked about there. But they did not address the 
remaining protestations that were on the table.
    So the Air Force has gone back to the GAO and said, ``Would 
you please reconsider and give us your decision on the other 
areas there.'' So if we work just that one issue, are we done? 
Or then do we move on to the next protest item and the next 
protest item and the next protest items in series. So we asked 
the GAO.
    Today, a bunch of letters have gone out to the three 
vendors announcing our intentions here, also the GAO and to 
various Members of Congress that have asked us about this over 
the last week or so, in addition to the press release that you 
talked about there.
    The GAO said they will rule on the remaining issues in an 
expeditious manner, and they gave us a date of about mid-June 
that they will rule on that. We intend at that point, if 
necessary, to send out an amended RFP. Between now and then, we 
will address that single issue we have with dialogue with the 
vendors on the single issue that we know has been sustained, 
and that is the O&S costs, the manpower element of O&S costs, 
but we don't know if that is the only step we have to take, or 
if there are additional steps. So when the GAO responds on the 
additional protest items, then we will have a clearer path 
ahead.
    Mr. Bartlett. Now, Mr. Chairman, I have a series of short 
questions. I think they will require only pretty short answers.
    Given the evolution of the Seapower 21 doctrine with 
increased numbers of surface ships and mission requirements, 
does the current helicopter master plan with just H-60 
helicopters have the right quantity and type of rotary-wing 
lift needed by the Navy?
    Admiral Clingan. Congressman, I will take that question. We 
are currently undergoing a helicopter force structure study, 
which will report out this month, which will take the programs 
of record that informed the President's budget 2008 and make 
adjustments to include those demands which you alluded to which 
were not mature, for example, the helicopter complement 
required to support the littoral combat ship, some of our 
growth in Navy special warfare requirements, the support 
requirements for our Naval Expeditionary Combat Command.
    We are reaching the conclusion of that study and it will 
warrant an adjustment to the program of record for our 
helicopter procurement of both variants--the 60 Sierra and 60 
Romeo.
    Mr. Bartlett. Is it fair to say if you thought the H-60 
would meet all of our needs, you wouldn't be doing the study?
    Admiral Clingan. It is not a matter of whether those two 
variants are meeting our needs. They do. It is a matter of how 
many helicopters we need to support the mission. And so it is a 
number issue, not a capability issue.
    Mr. Bartlett. Types of helicopters are not an issue?
    Admiral Clingan. No, we are fielding the 60 Romeo and the 
60 Sierra. Those two types meet our mission requirements.
    Mr. Bartlett. I understand an Analysis of Alternatives 
(AoA) to define helicopter lift for airborne resupply of 
seabasing was completed last year and concluded that a minimum 
lift helicopter was needed to supplement the capability of the 
H-60 fleet. What is the Navy doing about obtaining that 
additional capability?
    Admiral Clingan. We are currently looking at heavy-lift 
requirements to replace the H-53s that have been used to 
support the seabase. That effort is a joint effort as well. 
Beyond that comment, I will take the question.
    [The information referred to can be found in the Appendix 
beginning on page 176.]
    Mr. Bartlett. I appreciate that. There appear to be several 
mission areas of the Navy engaged in the global war on terror 
and rising to the challenges of the new doctrine that could 
potentially require greater lift capability than that available 
in the H-60 fleet.
    Does the Navy plan to do a comprehensive review of all 
helicopter lift requirements to determine what is needed? In 
what quantity will current acquisition plans be adjusted until 
such a review is completed and the requirements verified?
    Admiral Clingan. There are two aspects to that. The 
helicopter force structure study that I referred to previously, 
which we will complete this March, looks at the non-heavylift 
slice of that requirement. The heavylift requirement is being 
pursued through the joint forum.
    Mr. Bartlett. Are current acquisition plans being adjusted 
consistent with that review?
    Admiral Clingan. They will be in the future when those 
reviews are completed, sir.
    Mr. Bartlett. The littoral combat ship (LCS) is identified 
as a crucial element of the future Navy force structure and 
mission modules are carried on board to rapidly employ the LCS 
in a variety of roles. Is the current plan to use the H-60 
helicopter for all rotary-wing missions aboard the LCS? And can 
the H-60 be re-rolled between Anti-Submarine Warfare (ASW) 
detecting and destroying, and Anti-Surface Warfare (ASUW), 
utility missions, mine-hunting and destroying and special 
operations? And is the H-60 capable to perform all rotary-wing 
missions on LCS?
    Admiral Clingan. The two variants of the 60 that we are 
fielding, the Sierra and the Romeo, have different mission 
sets. The 60 Romeo is our primary anti-submarine warfare 
variant, and it has some ASUW, or anti-surface capability. The 
Sierra is a logistics helicopter and it is our primary counter-
mine helicopter and our armed helicopter.
    So depending on the mission that is anticipated for the 
littoral combat ship, the appropriate mission modules, the 
complementary helicopter type will be loaded.
    Mr. Bartlett. But since we can't roll from one helicopter 
to another these mission packages, that would require then that 
we had two helicopters on the LCS?
    Admiral Clingan. We are actually buying approximately, and 
the study will inform this, approximately 55 helicopters that 
will resource the littoral combat ship. There is a mix of 
Romeos and Sierras that are aggregated to account for those 55.
    Mr. Bartlett. Since the LCS is pretty tightly packed and is 
a relatively small ship with a number of mission packages, is 
there room on the LCS to carry two helicopters and required 
flight and maintenance crews?
    Admiral Clingan. Currently, we imagine that the littoral 
combat ship will carry one helicopter. It may be augmented with 
our unmanned vehicle, a vertical takeoff unmanned system.
    Mr. Bartlett. So for another mission, we would have to get 
another helicopter?
    Admiral Clingan. Well, we intend to anticipate the mission 
requirement. If they re-roll the LCS to perform another 
mission, we can swap helicopters between the ships if 
necessary, or draw from the shore establishment. Neither of 
them are immediate, but with proper planning could be 
accomplished just as if we were changing out the mission 
modules.
    Mr. Bartlett. Thank you. One last quick question.
    It has been reported the H-60S has experienced some 
structural integrity problems in the airframes. Has the cause 
of the structural cracks been determined, and are they of a 
safety nature to put the life of air crews and mission success 
at risk? Has the Navy slowed the delivery of the H-60S until 
these structural cracks have been eliminated?
    Admiral Clingan. The engineering solution to the structural 
cracks through an itegrative process, the very first solution 
was not wholly successful. The second solution, called an I-
beam or something of that sort, is successful. The aircraft 
that experienced these cracks is flyable to a certain extent, 
and then must be grounded. We are in fact rotating the 
airplanes in for this corrective repair, which is currently 
being borne the cost of that by the contractor.
    Mr. Bartlett. Thank you, Mr. Chairman.
    Again, gentlemen, thank you very much for your patience.
    Mr. Abercrombie. Thanks for the thoroughness of your 
questions, Roscoe. You always do a terrific job. It is a 
pleasure working with you.
    I will now go to Chairman Taylor.
    Mr. Taylor. Who he, incidentally, has never enjoyed working 
with, but----
    [Laughter.]
    Mr. Taylor. Mr. Balderson, I want to follow up on what the 
chairman had to say. We have been here in the course of this 
war, we have had several shortfalls on equipment. First, to my 
knowledge, was the Small Arms Protective Inserts (SAPI) plates, 
followed by up-armored Humvees, followed by electronic jammers, 
and now with the Mine Resistant Ambush Protected Vehicles 
(MRAPs).
    In every instance, someone in a position of authority, be 
they in uniform or out of uniform, will bemoan the lack of 
industrial capacity in this country and cite that as a reason 
why we are late. Fill in the blank what the issue was, whether 
they are SAPI plates in the ceramic industry, whether it is 
ballistic glass on the up-armored Humvee, whether it was high-
test steel on the up-armored Humvee and quite possibly the 
MRAP.
    So I really do want to follow up. I find it incredibly 
inconsistent on the part of this Administration on one day to 
blame not supply the troops properly because of a diminished 
American industrial base, and then on the other making a 
decision to contribute to the diminishing industrial base by 
purchasing helicopters overseas.
    I do want to follow up on the remarks of the gentleman. We 
have had a discussion over jurisdiction. Apparently, that 
helicopter will fall under the jurisdiction of the Seapower 
Subcommittee. I don't know how my subcommittee will vote, but I 
can tell you how the mark will be presented to them. For the 
reasons that I have just outlined, it will call for an 
American-made helicopter.
    Now, again, my committee may shoot it down. The Senate may 
shoot it down. But this isn't something just to beat you up on. 
This is serious. Kids died for lack of body armor. Kids died 
for lack of up-armored Humvees. There was a legitimate beef 
about the lack of an industrial base, but they go hand-in-
glove. We can't on one day bemoan that we don't have, and on 
the next day order something overseas and act like it doesn't 
affect the first problem.
    To the next question. Part of the presentations I have been 
given tells us that we are going to have a deficit of about 90 
strike aircraft as soon as 2010. Given that I don't see the 
industry, the Congress, the combination of the two, progressing 
with the Joint Strike Fighter to the extent that we would like 
to, to what extent has the Navy come up with a plan to purchase 
more F-18E&Fs should that need arise, rather than just living 
with a deficit in fighter aircraft? I will open that up to 
anyone who chooses to respond.
    Admiral Clingan. Congressman, I will respond to that 
question.
    The strike fighter shortfall that we share across the 
Department of the Navy is reflected in our legacy F-18s, the A, 
B, C, and D variants. The shortfall in that has expressed 
itself now. We have an existing shortfall in regard to the F-
18D and the AV-8B. It peaks in about the 2011 timeframe. The A, 
B, C models that we take to the carrier, that peak in the 
shortfall is more in the 2017 or 2018 timeframe.
    Our current strategy is two-fold. First, we are working to 
extend the service life of our legacy Hornets. We have an 
ongoing service life assessment program which we will complete 
in December of this year. Concurrently, to the best of our 
ability, but most of the work will be done subsequently, we 
will develop the engineering changes that will then be 
incorporated in these airplanes to get them presumably to 
10,000 flight hours for their service life. That is the first 
step in mitigating the strike fighter shortfall.
    The second step is buying the JSF program of record as we 
had laid it in in the President's budget 2008. In that budget, 
we have purchased, or we have requested the procurement of 28 
additional F-18E&Fs as yet another step toward mitigating the 
Strike fighter shortfall. So we project using a model that that 
shortfall will be 50 Strike fighters, again in the 2017 
timeframe.
    In the work that we have ongoing now to prepare for POM 10, 
we are going to complete the assessment on what is the best way 
forward to eliminate or at least mitigate that shortfall to the 
extent that we can tolerate the operational risk. That work is 
ongoing. It may include buying additional E and F fighters 
above what we have in the budget before you, and it may include 
adjusting the JSF buy-rate. That work is ongoing, sir.
    General Castellaw. Sir, I would ask to be able to address 
that.
    Mr. Taylor. Yes, sir.
    General Castellaw. Because the Marine Corps right now is 
experiencing the effects of the bathtub (a shortage of aircraft 
on a chart of numbers over time), we have not purchased a 
Tactical Aircraft (TACAIR) jet in 10 years. The six Short 
Takeoff/Vertical Landing Variants (STOVLs) that are in the 
budget in 2008 are the first TACAIR that we have purchased in 
10 years. We are doing other things to mitigate the loss. We 
are going to cadre two squadrons this year and reinvest the 
aircraft into the other squadrons.
    In the Marine Corps, there are only three types of 
squadrons: squadrons that are deployed; squadrons that are 
getting ready to deploy; and squadrons that are coming back. We 
are committed to the F-35, particularly the Bravo. I understand 
about the numbers, but it is also a matter of quality. We 
believe, and the committee has been very supportive, that we 
must keep the F-35 STOVL on schedule and bring that aircraft 
in.
    It is not only the numbers, as I said. It is also the 
capabilities of that fifth generation fighter brings us.
    Thank you, sir.
    Mr. Taylor. Gentlemen, going back to the first panel that 
came before us, and the question I posed to them: What would be 
the downside of a competition for design, and the Nation buying 
that design since we are paying probably the preponderance, if 
not all of the cost of developing that design; putting that 
design out for bid, either on a winner-take-all or shared 
allotment, and seeing who would make the Nation the best deal?
    The reason I pose this, it is my understanding that a lot 
of these changes came about because of Secretary Rumsfeld. 
Every year, I see very bright young kids walk into my 
congressional office trying to get an appointment to West Point 
or a letter of recommendation for Reserve Officer Training 
Corps (ROTC) programs. Then we as a nation spend a heck of a 
lot of money to educate them, some of the toughest schools in 
America.
    Then we send them to sea or to go fly, but they get a 
lifetime of experience on what works and what doesn't work. And 
then when they get to the twilight of their career, in my 
opinion, they are the most qualified people in America to tell 
us what the next generation of ships or planes or helicopters 
ought to look like, for all of those reasons.
    But for some reason, mostly during the Rumsfeld years, that 
decision has been deferred to the private sector. He may have a 
pretty good engineering degree, who may have shared some of 
those experiences, but at the end of the day he is not 
responsible for the lives of the men and women who are going to 
use them. You are.
    And so my question is, the Coast Guard just in the past 
week has backed away from their design-build on the smallest of 
the new cutters they are going to buy. I congratulate that 
decision. To a certain extent, the Navy, the feeling I am 
getting from my conversations with the Secretary of the Navy, 
the Navy is going to move to the greatest extent possible those 
decisions back in-house when it comes to ships. I applaud that 
decision.
    To what extent have you gentlemen followed about the same 
thing? Because quite frankly, I think you are the expertise for 
the Nation. I trust your judgment absolutely, and you don't 
have a profit incentive, and quite frankly, you don't have to 
explain to the shareholders. You have to explain to the moms 
and dads of the kids who may not have come home. I think that 
is the greatest incentive of them all.
    So what changes, if any, in the aviation community are you 
contemplating to mirror what is going on in the Coast Guard 
with shipbuilding and the Navy with shipbuilding?
    Mr. Balderson. Mr. Chairman, I would offer a couple of 
comments. First, speaking as a Navy employee, I have had 
discussions with Secretary Winter also, and I have had 
discussions with my boss, Dr. Etter. They both view this 
problem very seriously and it is one of Dr. Etter's priorities. 
In fact, one of her strategic goals is to upgrade and maintain 
the proper technical and business acumen within the government, 
both in terms of numbers and in terms of level of experience.
    One of the things that we have done in the aviation 
industry, and there is no question but that there has been some 
reduction in the acquisition workforce, mostly going back to 
the 1980's and 1990's when we went on a procurement holiday and 
there were people that felt like the technical talent and the 
number of government employees in the acquisition workforce 
ought to be commensurate with our total obligation authority 
and the amount we were buying at the time.
    We found ourselves in a position in the mid-1990's when we 
began to recapitalize within naval aviation at I think we would 
all agree a pretty high rate, that we might have come down a 
bit too far. I think we have been in a mode in the last five or 
six years to not only recognize that problem by trying to build 
that workforce back up in terms of numbers and experience, but 
we have done two other things that I would like to mention.
    First of all, we have taken every opportunity within naval 
aviation to try to capitalize on some technologies and 
efficiencies that would enable us to have what I would call a 
multiplier effect on our workforce and our people. We have gone 
very much now, and I will speak to Naval Aviation (NAVAIR) as a 
large acquisition organization, we have gone to effective use 
of integrated program teams now, where we bring a wide variety 
of people in an integrated fashion to bear on our most 
important programs. We have tried to put our most experienced 
and qualified and best technical people on our highest priority 
and our most complex programs.
    The other thing we have done in information technology has 
helped us do this. We have been able to network these 
organizations and our programs together so that now if we are 
working a weapon program, we can have an engineer at China Lake 
or a program manager at China Lake just as effectively support 
our program offices at Patuxent River, as a Patuxent River 
engineer.
    So we have tried to make sure that we have the right level 
of people looking at our most difficult problems. In some 
cases, multiplexing those people so that they not only are 
looking over our difficult programs, but then also training the 
next level of workforce down so they will have the experience 
the next time we go through this.
    And then the last thing I would tell you is that we do 
project within naval aviation between now and fiscal year 2009, 
we do project, albeit probably a modest one, but we do project 
an increase in the acquisition workforce. What we have not done 
in aviation, I believe, and we have been very careful not to 
do, is off-load decisions about what we buy and how we buy it 
to industry. In fact, we have been very careful about this 
lead-systems integrator approach to make sure that we retain 
that responsibility and we retain that insight on that 
decision-making ability on our programs.
    Mr. Taylor. Let's talk specifically, Mr. Balderson. I 
understand that there have been a lot of delays in the ARH 
program. Again, based on what I said--and I am not blowing 
smoke, this is a sincere compliment--based on all the things I 
said, I really find it incredulous that between the people who 
are serving our Nation, that someone can't sit down and design 
what that helicopter ought to look like, and then among the 
services that are going to use it and buy it, and say, ``this 
is what we want,'' present that design to the private sector, 
give us a price on it, how quickly can you do it, and let's get 
going with this. Rather than counting on the private sector 
that is often more responsible to the shareholders than they 
have been to the Nation.
    In that specific instance, why hasn't something like that 
happened?
    Mr. Balderson. Mr. Chairman, ARH is not a Navy program, so 
I wouldn't be able to comment on that.
    Mr. Taylor. Okay. I will open it up to the panel.
    General Mundt. Sir, ARH is an Army program. It is the Armed 
Reconnaissance Helicopter. What you ask and what you have said 
is what I believe we in fact did. We defined the key 
performance parameters of things that we, the warfighters, 
required in an armed reconnaissance helicopter, to fight and 
gain information and be able to know where the enemy is, and to 
do it in a safe and efficient manner for the sons and daughters 
of America. We did that.
    Mr. Taylor. Okay. To that point, General Mundt, for example 
I have to believe that your guys could easily have said, ``I 
want this engine; I want this transmission; I want my blade to 
look like this; I want this weapons system on board; I want 
these countermeasures; I want these types of communications 
gear.'' To what extent to you all lay that out, and then say, 
``Give me a price on it''?
    General Mundt. Yes, sir. The question is a very sound 
question. What we did is you had a series of risks that you had 
to look at, and you had to decide whether or not you wanted to 
take a commercial frame, in this case the 407, which is what 
Bell bid. There were other people that bid. And whether you 
wanted to take that commercial frame and then integrate a 
mission equipment package. We have done that on Little Birds in 
the Army and the special operations community for a long time. 
We know how to do that.
    We know what we expect the costs to be, and we knew how 
hard the integration was going to be. And we believe we came in 
with a program baseline to you and the committee, and said, 
``We can do this for this cost on this schedule.'' Now, anytime 
you are an SDD, you understand that you write a cost-plus 
contract because you don't know what you are going to discover 
in some cases. It is just like if I take my car to an auto 
shop, a guy says $250. Until he gets inside that, I don't know 
for sure what he is going to charge me, but I know what he 
expects to charge me. Then I have to make a decision.
    In this case, we knew what I could buy a Bell 407 for. You 
can buy a Bell 407 airframe right now today for $2 million. I 
think that somewhere between $3 million and $4 million to put 
the mission equipment package on and be able to integrate that 
is a reasonable cost. That is my professional opinion.
    So what we have done, the Army, we have gone back to Bell 
and said, ``You have come in and said there is a difference in 
opinion, and you need to show us that in the next 30 days as to 
why we at such odds, because we don't believe that that is 
going to be true.''
    Mr. Taylor. Even though it is the chairman's jurisdiction, 
I would very much appreciate a follow-up visit with you on how 
that works, because we are headed for a monumental train wreck 
in every single department of the DOD. The Nation is $8 
trillion, creeping up on $9 trillion in debt.
    So I think we have a responsibility to the men and women 
who serve and the men and women of this country who pay for 
those who serve, we have to do better. I think you will find a 
willingness on the part of this committee to do a better job 
with the taxpayers' money, and we would very much welcome your 
guidance in how to do that.
    General Mundt. Sir, we will come back to you and do that. I 
think the other piece, it is important to note. We get in some 
of these situations because of decisions we made in the past. 
We as a nation together, both industry, Congress and the 
department, made decisions that said it is clearly more 
efficient to take and outsource a lot of the things that we 
used to do, because our number one driving cost was personnel 
bills.
    And now what we are doing, in all honesty, is we are at 
war, and industry is not on a war footing, and we are trying to 
ramp up to that. We are going to live through those mistakes. 
What I would caution people is as we learn this time, we cannot 
go back and repeat that again in the future.
    Mr. Abercrombie. We will carry on this dialogue. There is a 
reason that the committees are meeting jointly. Mr. Taylor and 
I work hand-in-hand on this. We don't necessarily walk down the 
hallway hand-in-hand, but I can assure you that metaphorically 
we do.
    Now, Admiral Clingan, two years ago about this time, 
Representative Sestak was sitting in exactly that, maybe not 
that chair, but sitting in exactly that same place. Now, I 
don't know if he necessarily now thinks that he has advanced 
himself any by sitting in the chair he is in right now. He may 
be having second thoughts after last November.
    In any event, it is now his opportunity to address the 
panel. We are very, very pleased. I can tell you from my own 
personal point of view, I am very pleased that he is sitting on 
this side of the room and addressing the panel.
    Mr. Sestak. Thanks, Mr. Chairman.
    Good afternoon. I wanted to ask a question to the Navy and 
the Air Force. We have done a lot of good, you have all done a 
lot of good work on what may be the last manned tactical 
aircraft, the JSF, to make it ``joint'' as much as possible 
with the Marine Corps. Why have we walked away from the first 
unmanned tactical, from my understanding, the Joint Unmanned 
Combat Aerial Vehicle (UCAV)?
    My understanding is that has now become two separate 
programs--one for the Air Force, one for the Navy. Why as we go 
into the future, having finally after decades come together on 
the Joint Strike Fighter, haven't we remained on the joint 
first unmanned strike vehicle? Yes, sir?
    Admiral Clingan. Congressman, one of the recommendations 
out of the Quadrennial Defense Review (QDR) was to take the 
Joint Unmanned Combat Aerial System (UCAS) program and split it 
apart into----
    Mr. Abercrombie. Can you speak into the mic a little bit 
more, Admiral?
    Admiral Clingan. Yes, Mr. Chairman.
    Mr. Abercrombie. Thank you.
    Admiral Clingan. A recommendation out of the QDR was to 
split the Joint-UCAS program into an Air Force program and a 
Navy program. Although the program offices were going to become 
separate entities, that has not stopped the collaboration in 
terms of the technology maturation and other efforts that are 
leveraged between the two programs and other programs across 
the whole joint unmanned portfolio.
    From the Navy's perspective, we are moving ahead in 
response to the QDR to do a couple of things that are funded in 
the President's budget 2008.
    Mr. Sestak. Admiral, if I could, why was that decision 
made? I mean, there has been such an effort to make us more 
joint. Why was that decision made? What was incompatible?
    Admiral Clingan. I will have to take that question for the 
record.
    [The information referred to can be found in the Appendix 
beginning on page 177.]
    General Hoffman. Sir, if I could add a little bit. It is 
not so much that it was a program and now there are two 
programs. It was a demonstrator effort, and now there really is 
no Air Force program. We are pursuing some technologies that 
were started in that demonstrator effort.
    We are looking at automated unmanned aerial refueling 
because we think that is a valuable capability for even manned 
aircraft at some point, but certainly for a growing fleet of 
unmanned aircraft that we see in the future. The Navy has some 
unique requirements on getting on-off a ship, so what we get 
on-off a ship----
    Mr. Sestak. So the Air Force has walked away from an 
unmanned tactical air vehicle?
    General Hoffman. No, it was not a program. The Air Force 
did not walk away. This was one of the fiscal realities coming 
out of the QDR and some budget decisions.
    Mr. Sestak. So it was a budget decision is why the Air 
Force is----
    General Hoffman. We have not walked away from unmanned 
strike aircraft.
    Mr. Sestak. All right.
    Mr. Balderson. Congressman, could I just add one thing to 
that?
    Mr. Sestak. Yes, please.
    Mr. Balderson. As General Hoffman said, my take on it, and 
I am not going to speak for the QDR, but my take on this in 
deliberations with OSD and the services is that it was 
determined that since UCAS was not a program, it was a 
demonstration, that it was more----
    Mr. Sestak. I am sorry--UCAS. It is UCAS, yes?
    Mr. Balderson. It is UCAS now.
    Mr. Sestak. Sorry.
    Mr. Balderson. Aerial systems as opposed to aerial vehicle.
    Since what we are all about is maturing and demonstrating 
technologies to inform a program decision in the future, that 
it was a more efficient use of funding for the Air Force to 
take the lead in maturing certain technologies, and for the 
Navy to take the lead in certain technologies, to include 
propulsion and of course the all-important thing of getting the 
vehicle on and off the carrier, which as Admiral Clingan was 
saying, is our demo.
    Those paths between the Air Force and the Navy will go in 
parallel and there has been great collaboration. When we get to 
the point in the future, and we mature these technologies and 
we have done the demos, and we are informing a decision on a 
future acquisition program, there has been no decision or even 
any discussion about anything that would preclude joint 
programs at that point in time.
    Mr. Sestak. So you may still end up with some commonality?
    Mr. Balderson. I would say we may still end up with some 
commonality and could end in a joint program.
    Mr. Sestak. General, to understand better what the Air 
Force is doing, is that a discussion for another time?
    General Hoffman. I would say yes, sir.
    Mr. Sestak. All right. The Air Force long-range bomber, 
Andy Marshall, and others have said this is something we really 
need to go deep. I really wasn't a budget person, but my 
limited understanding is we really in the 2007 budget had very 
little when the 2007 came over. As a matter of fact, I don't 
think there was anything. And now for the 2008 and out, there 
is just a little bit.
    This is supposed to be online in 2018 or something. Where 
are you going to go for the funding for this, if it is not even 
in the budget?
    General Chandler. Sir, if we could, we would like to take 
that one for the record also. I think that would be more 
appropriate in another forum.
    [The information referred to can be found in the Appendix 
beginning on page 177.]
    Mr. Sestak. All right. The other one I had was for the 
Navy. In 2007 through 2011, a rough estimate is like $11.5 
billion per year averaging for aircraft. When you look out to 
2020 to 2024 and you start looking at the Selected Acquisition 
Reports (SAR)--you know, what is there and making some 
assumptions--it appears as though you are down to about $7 
billion or $7.5 billion per year.
    You have taken 145 aircraft out of your program and just 
came across here, as compared to similar years when the 2007 
program came across. You placed 45 in the emergency defense 
budget Quinlan-size submarine Hi-Low, but it is still not the 
100 others potentially.
    Your budget is going to go down in fiscal year 2010. And 
yet you have already taken 100 aircraft out in this year, and 
you are going to drop over 40 percent, it appears, in what is 
being planned for your aircraft recapitalization. How will you 
address that issue, particularly in view of the desire of the 
Navy to recapitalize its fleet up to 308 ships?
    Admiral Clingan. Congressman, the analytic work and the 
planning that went into the budget submission that is before 
you took a look at the challenge that we faced with concurrent 
recapitalization across almost the entire aviation portfolio, 
and made an effort to reduce the total cost of that concurrent 
recapitalization by expanding the timeframe over which we were 
going to field the replacement aircraft. We called that 
suppressing the procurement bow wave. We took out of the Navy 
portfolio a bow wave of about $4.2 billion.
    Underpinning those adjustments was campaign analysis and 
other studies which allowed us to understand the combatant 
commanders' demand signal for the various capabilities, both 
today and in the future, in the next decade. And we have laid 
in a procurement profile that is certainly lean, but meets the 
resourcing requirements for capability that we expect our 
combatant commanders to levy against our capability.
    Mr. Sestak. So the aircraft that had been removed, the 145, 
that wasn't for fiscal reasons. That meets your capability. 
They are not being moved down the path to be procured later.
    Admiral Clingan. They are in fact being moved out. The 
programs of record and the inventory objectives for the----
    Mr. Sestak. If I could, Admiral, if it is going outside the 
Fiscal Years Defense Plan (FYDP), why do we drop 40 percent in 
our recapitalization plans after the FYDP for aircraft? Or has 
that not been factored in quite yet?
    Admiral Clingan. We will be making adjustments to continue 
the recapitalization effort.
    Mr. Sestak. Your ships, to get the number you want, is 
based upon no increase in price or cost of them. If these 
aircraft have not been factored in, then what does that say 
about the ship remodernization plan?
    Admiral Clingan. Two points, one, the work that we are 
doing in preparation for POM 10 is doing an assessment in 
regard to the warfighting requirement, the cost to keep the 
modernization of our fielded aircraft relevant, and it will be 
balanced against the equally competing imperatives in the 
ships.
    Mr. Sestak. All right. The number of ships and aircraft, an 
input or an output of that?
    Admiral Clingan. Could you repeat the question?
    Mr. Sestak. The question is--and I am probably going over--
if I could, one other one. The Navy-Marine Corps----
    Mr. Abercrombie. That is all right.
    Mr. Sestak. You have done great work in TACAIR integration. 
Could you address the flight hour issue? I believe both 
services approach it a little differently. Admiral.
    Admiral Clingan. Our flight hour program is designed to 
achieve certain levels of readiness, depending on when a 
squadron and its air wing, where they are in our fleet response 
plan.
    Mr. Sestak. So if you are back here at home, and you don't 
deploy for a year-and-a-half, your flight hour pay is lower.
    Admiral Clingan. Correct.
    Mr. Sestak. You do less, and you ramp up as you deploy.
    Admiral Clingan. Correct.
    Mr. Sestak. General, how does the Marine Corps do it?
    General Castellaw. Sir, as I indicated before, there are 
three types of squadrons: those that are deployed; those that 
are coming back; and those that are getting ready to go. We 
have all our squadrons level-loaded so that we are prepared to 
deploy as needed. Our op tempo right now supports that 
philosophy.
    Mr. Sestak. So when the Marine Corps comes back, even if it 
was peacetime, your flight hours are constant across the whole 
continuum?
    General Castellaw. Yes, sir. We try to achieve a 2.0.
    Mr. Sestak. Should the Navy and the Marines do it the same 
way? Why is there a difference? You both go forward to fight 
our Nation's wars.
    General Castellaw. Sir, in our view, we are a ready force 
prepared to go, and so it is our mission----
    Mr. Sestak. So it is a different operational ethos? You are 
ready 100 percent of the time. The Navy is periodic for 
readiness. Correct, Admiral?
    Admiral Clingan. We have a variety--not a variety--a 
sequence of phases that characterize our fleet response plan: a 
maintenance phase, a training phase, a surge phase prior to 
deployment, a deployment phase, and a post-deployment sustained 
phase. In the surge deployment and post-deployment sustained 
phases, we have achieved the readiness necessary to deliver the 
effects expected of the maritime forces.
    Mr. Sestak. General, beyond reconnaissance, and I think 
that has already been addressed before I got here, correct?
    Well, one more then, since I had a couple of questions that 
have probably already been asked. Have we learned anything 
differently from Iraq about the utilization of our helicopters 
and reliance upon them? It has been a challenging environment.
    General Mundt. The short answer is ``yes.'' It is one of 
the most harsh environments that any of us has experienced, not 
just because of the enemy, but also because of the environment 
itself. Part two is we are finding ourselves flying at three to 
five times the op tempo that we had ever anticipated as we 
built the force and designed the aircraft. So we understand 
that.
    A lot of lessons are learned on reliability, 
maintainability, what do you have to do to reduce the burden on 
the soldier in the fight. We are applying those lessons to the 
aircraft that we are purchasing now. So yes, sir, I think we 
are learning a lot of lessons in those helicopters and taking 
those back and putting them in the designs as we can.
    Mr. Sestak. In the defense of them?
    General Mundt. Sir?
    Mr. Sestak. In the defense of them?
    General Mundt. Well, in the defense, of course, the 
aircraft survivability equipment, we are dealing with a 
thinking enemy, so I will tell you right now that the best 
available aviation survivability equipment are on our aircraft, 
but each and every day we learn. The enemy, as he changes his 
tactics, techniques and procedures (TTPs), some of those things 
we will change in the way that we fly--speeds, altitudes, 
varying routes. Other pieces are hardware pieces.
    We will come back to you about a fifth sensor, and that is 
because we are changing the way that we fly and we want to make 
sure we provide the best protection for those aircraft we can.
    Mr. Abercrombie. I think we will have to bring it to a 
conclusion with that.
    Mr. Sestak. Thank you very much.
    Mr. Abercrombie. I just have a couple that I would like to 
go through, and we will send some others on to you, if that is 
all right. It is late in the day. Again, I personally thank you 
for your patience in letting us go.
    Just a quick follow-up. There are classified dollars with 
the long-range strike aircraft. Isn't that correct?
    General Chandler. Yes, sir.
    Mr. Abercrombie. Right? Maybe we can follow up separately 
with you on that, and provide a little bit more in the way of 
perspective for Representative Sestak. Okay? And for ourselves.
    General Chandler. Yes, sir.
    Mr. Abercrombie. Because I am not quite clear myself where 
that fits into what the requests are right now. Okay?
    General Chandler. Yes, sir. We will take that for the 
record.
    [The information referred to is classified and retained in 
the committee files.]
    Mr. Abercrombie. Okay. And just give brief answers, not 
that you wouldn't anyway, but I meant you need not elaborate 
for this because we going to hand these questions on to you for 
more elaboration, but in order to get something on the record 
now.
    I am discerning from your commentary today, General Mundt, 
that there might have been other Department of Defense concerns 
with the contractor's ability to perform where the armed 
reconnaissance helicopter was concerned, given the problems 
with the program. Is that a fair deduction?
    General Mundt. Sir, I would have to let the department, the 
secretary's office, answer their concerns, but I would say it 
is fair to say that many of us share concerns about the 
processes and how they approach putting aircraft together right 
now. That is a concern. Yes, sir.
    Mr. Abercrombie. Okay. Then Mr. Balderson, you have borne 
the brunt mostly of a lot of inquiry today that wasn't easy to 
answer, so I might as well give you one more. Does the 
Department of Defense, from your perspective, have a view with 
the alternate engine program for the Joint Strike Fighter?
    Mr. Balderson. Yes, sir. Just a couple of quick points, 
Congressman. We agree that we believe it is unlikely that we 
could recoup the $1.6 billion investment during the life of the 
program. That attributes largely to some things that have been 
said. When you split the procurement, the cost is going to go 
up and frankly the other thing, Mr. Chairman, in my experience. 
I draw back to my Tomahawk experience. Very often in these 
programs you get to a point after a few years where you have a 
clear leader and a clear follower. At that point, I think one 
of the reports--I can't remember which one----
    Mr. Abercrombie. Do you think we are at that point with 
this?
    Mr. Balderson. No, sir. I am saying that that usually 
happens when we try to carry. We very seldom try to carry dual 
sources. That makes it more difficult to get competitive 
pricing.
    Mr. Abercrombie. But that comes a little bit further down 
the line, right? If you are having the competition.
    Mr. Balderson. It is further down the line, but the whole 
issue, as I read these three reports and other cost reports, 
the whole issue is how are the contractors going to react in a 
competitive environment, how are they going to behave in a 
competitive environment, and will they behave such that you 
would recoup that $1.6 billion investment. My opinion is that 
they would not and we would not recoup the investment.
    Mr. Abercrombie. Okay. Again, I say, we don't have to get 
into an extended dialogue today, but I think you all heard from 
some of the members here, whether there is more expenses or not 
is not necessarily our issue. The issue for us is can we get a 
manufacturing industrial base that we can count on in the 
future; and can we put together an industrial and manufacturing 
base that will continue to try to look for innovation and 
making the best engine possible.
    That doesn't necessarily mean we are going to save money. 
We may spend more money as a result, but we may get a better 
engine. I realize that that can be a conundrum in some 
respects, not easily resolved. I wanted to go to Admiral 
Clingan to make sure that I understand. The Navy now plans, is 
it 84 EA-18Gs?
    Admiral Clingan. Yes, Mr. Chairman, it is.
    Mr. Abercrombie. That is a decrease.
    Admiral Clingan. That is.
    Mr. Abercrombie. Why is there a decrease? This maybe goes 
along with my questions about competitiveness and all the rest 
of it. One of the things I can't come to grips with, even after 
all this time on the committee, is that one year the decline 
and fall of Western civilization is at stake with 84, and then 
the next year apparently we are not going to decline quite as 
fast even if we have six less. Is it a procurement problem? Is 
it a competition with other platforms? How can you get along 
with six less this year?
    Admiral Clingan. The procurement objective for the Growler, 
the EA-18G, is the result of campaign analysis that was done to 
inform the President's budget 2008.
    Mr. Abercrombie. Were you being driven by the budget 
numbers you were given? Or were you program-oriented and 
mission-oriented, and then came up with the six less?
    Admiral Clingan. We were completely driven by the 
capability and capacity required to fight and win.
    Mr. Abercrombie. So how come it is different this year than 
last year, that you would come up with six less?
    Admiral Clingan. The process involved a decision that said 
we have 10 carrier air wings and each would be equipped with 
five Growlers. However, as a squadron makes its way through 
that fleet response plan (FRP), the entitlement for the 
squadrons is not the same. They are fully outfitted when they 
are in the pre-deployment surge, when they are deployed, and 
when they are in the post-deployment sustained phases.
    Prior to that, in the maintenance and training phases, 
their entitlement for aircraft is less than the full 
complement. This is a way for us----
    Mr. Abercrombie. You didn't know that a year ago?
    Admiral Clingan. Not to my knowledge.
    Mr. Abercrombie. It sounds like a pretty standard analysis 
to me.
    Admiral Clingan. That is one aspect of it, sir. We also are 
continually working to lean our force structure requirement as 
we become more efficient.
    Mr. Abercrombie. Weren't you doing that last year?
    Admiral Clingan. Yes, sir, but we get better.
    Mr. Abercrombie. So you got better at it this year?
    Admiral Clingan. Yes, sir.
    Mr. Abercrombie. Six planes better?
    Admiral Clingan. Yes.
    Mr. Abercrombie. Are you talking to the Air Force about 
this? Representative Sestak has focused in on the joint aspect 
of this, and other members have today. Does the Air Force 
agree? Does the Air Force have an opinion on this?
    General Chandler. Sir, we have many of the same lean 
processes that the Navy does, quite truthfully. And we look at 
things the same way in terms of aircraft procurement.
    Mr. Abercrombie. What do you think about this decrease of 
six?
    General Chandler. Sir, I can't speak for the Navy and the 
EF-186.
    Mr. Abercrombie. I know you can't. Do you have any needs in 
this area?
    General Chandler. Yes, sir, in terms of fighters. We are 
looking at the same issues that the Navy is looking at in terms 
of an aging fleet. As you know, our planning number for the F-
22EA is 381. The programming number is 183. We feel like we 
need 381----
    Mr. Abercrombie. What was the number last year?
    General Chandler. The same number, sir.
    Mr. Abercrombie. The same number this year?
    General Chandler. Yes, sir.
    Mr. Abercrombie. You didn't get any leaner this year?
    General Chandler. Not in terms of F-22s, no sir.
    Mr. Abercrombie. All right. Thank you very much.
    Maybe this will help me, General Castellaw. Last year, I 
have already referred to the Yankee Zulu program. They 
submitted a budget request, program request for procurement of 
18 helicopters. Right? The contractor produced 11. This year 
the budget request includes $519 million for helicopters, and 
what is referred to as the global war on terror request 
includes $123 million for 6 helicopters.
    Now, my best guess is this is a ramp up of 11 to 26. Now, 
if the contractor was only capable of producing 11, even though 
last year you thought they could produce 18, am I misconstruing 
that you are thinking that they can go from 11 to 26 this year? 
And if so, what makes you think they can do that?
    General Castellaw. Sir, I think you know that Bell has had 
leadership changes within the last several months. The new 
leadership has come in and provided us with a reschedule. Right 
now, from the information that they have provided us, we feel 
that they can get back on schedule.
    Mr. Abercrombie. Does that put you at odds with what the 
Army's perception is of what they are capable of?
    General Castellaw. That is what our perception is.
    Mr. Abercrombie. Has it put you at odds with what you have 
heard even today from what the Army's conception is?
    General Castellaw. That is what my perception is, sir, is 
that Bell is going to be able to get back on schedule.
    Mr. Abercrombie. And that is what your answer is to my 
question? Would you say you are being responsive to my 
question? Or would you prefer not to? If you say you prefer not 
to answer the question, it is okay with me. You are not going 
to hurt my feelings.
    General Castellaw. Sir, that is my best answer.
    Mr. Abercrombie. Okay. That is good. That was sharp. But 
you see my difficulty here, when we are trying to make 
decisions on this. It is very difficult for me to make a 
recommendation to the subcommittee or on to the rest of the 
committee about funding like this if we see the numbers change.
    We will go from 84, and all of a sudden we have gotten 
leaner by 6. Well, maybe we should have been leaner in what we 
proposed to fund, procure, and recommendations we should make 
to the appropriations committee. Same here. Can you understand, 
General, I won't say my reluctance, but my standing back a 
little to say: Do we really want to make a recommendation to go 
to 26 helicopters?
    General Castellaw. Sir----
    Mr. Abercrombie. I am not trying to get in a contest with 
you. You understand. I am trying to be as open and honest as I 
can with you about the dilemma we face in trying to figure out 
just exactly what do we recommend when we are competing for 
dollars.
    General Castellaw. Right now, sir, I have units that are 
deploying that are deployed for seven months, and they are back 
for five months. And one of the reasons that we are doing that 
is because we are being asked to do that. What we need is to 
increase our capabilities.
    Mr. Abercrombie. But that takes us back to whether we are 
serious in this country about going to war.
    General Castellaw. Yes, sir. And I think we are. We are 
going to 202,000 in the Marine Corps. We are going to grow it, 
and part of that growing is----
    Mr. Abercrombie. I am talking about the manufacturing 
capabilities, the industrial base of the country.
    General Castellaw. Yes, sir. I understand that. In order to 
do that, then we are asking, and I looked at the president of 
Bell, Mr. Miller, and I looked him in the eye and told him that 
what I was depending on him to do was straighten out the mess 
at Bell and produce helicopters because young men and women 
Marines and sailors are depending on that company to get their 
stuff together and produce the equipment.
    Right now, that is the fastest way I can get my forces with 
the equipment they need, is for Bell to do it. Bell has come 
back to me and said they will. I am right now----
    Mr. Abercrombie. Let's take that as a premise that we can 
both agree on. Can they do it on their present manufacturing 
schedule? Let me tell you why I am asking that. I am going to 
draw a parallel. When we were down at the depots in Corpus 
Christi and Anniston, and saw the work being done down there, 
which I think is first-rate, by the way.
    It is very clear to me, and I don't know if you have had an 
opportunity to visit those depots, but to the degree depots 
anywhere in the country are reflected in what they are doing 
down there, you have very, very dedicated people, highly 
professional, very focused, and now they are working 22 hours a 
day, as much as they can.
    Now, do we need to increase the shifts? Do we need to put 
money in and say to Bell, okay, we expect you to work double 
shifts, or two-and-a-half shifts or three shifts to get this 
done? Do we need to go to the country and say to them, look, if 
you are going to do this and you expect the armed services, no 
matter what the service is in the armed services, to do this, 
setting aside arguments about whether we should or should not, 
or what the course of events should or should not be militarily 
speaking.
    Do we need to then say to the country, look, we are going 
to put money in to get this to go to double shifts or triple 
shifts, and tell people they have to do it because otherwise we 
can't sustain the support for the armed forces that they 
deserve?
    General Castellaw. Sir, I am looking for the aircraft. I am 
depending on others to make sure that the resources are there 
to provide the aircraft.
    Mr. Abercrombie. Okay. You understand where I am going with 
this? It is serious. The longer I sit here and the more I talk 
with my colleagues, and the more I see out there now, the less 
I believe that we are on a war footing in terms of our 
industrial capacity. Industrial capacity might be there, but in 
terms of our industrial output.
    Well, let me put it this way. Would you object to me going 
to the Bell people to see whether they can produce the 26--
convince me? I would be hesitant to argue with you. If you came 
and told me I needed 26 helicopters, I doubt that I would tell 
you, ``Hell, no, I don't think I can do it.'' I wouldn't want 
to be on the other side of your wrath on that.
    But I think it might be a good idea for us maybe to get 
these folks in here. What do you think?
    General Castellaw. Sir, I think that would probably be a 
good idea.
    Mr. Abercrombie. Okay.
    General Castellaw. By the way, sir, I was in KB the other 
day flying 53-Ds out around Diamond Head and down Waikiki, and 
Hawaii is still in good shape.
    Mr. Abercrombie. Yes.
    Let me ask you this, then, in that context. Are you happy 
with the housing that we have put up at Kaneohe Bay?
    General Castellaw. Sir, more importantly, the Marines and 
sailors who are living in them are happy with them. Thank you.
    Mr. Abercrombie. Good. That has changed considerably. I 
remember speaking with General Krulak when he was commander at 
Kaneohe Bay at one point, on his way to ultimately being 
commandant. I remember when he went back to see it after I had 
told him what we would do with the housing out there. I know he 
was very pleased with the result.
    General Castellaw. It was good to see all that mess cleared 
out, bulldozed down, going out the back gate toward Kailua and 
the new stuff there.
    Mr. Abercrombie. Thank you very much.
    General Chandler, I have a couple of things here. On the B-
2 radar frequency, and you have to help me out here because I 
am new to this. I understand that the B-2 is undergoing a $1.4 
billion or $1.5 billion upgrade as they relocate the B-2 radar 
frequency because it is not the primary user of that frequency. 
How the hell did that happen?
    General Hoffman. Sir, if I could take this. It is more of 
an acquisition question here. It points out the importance of 
spectrum and the value of spectrum. The DOD does not own all 
the spectrum that we need.
    Mr. Abercrombie. Then how was it chosen in the first place? 
I am a lay person in this. When I was told this, when I was 
being briefed by the staff, I thought, how could that happen?
    General Hoffman. Because there is not enough spectrum for 
the DOD to do all the needs that it has. We are secondary 
users.
    Mr. Abercrombie. Did people know that when they did this?
    General Hoffman. They did.
    Mr. Abercrombie. Then how did it happen?
    General Hoffman. Because they didn't have a spectrum they 
could become a primary user on. We do not own the spectrum. We 
have to compete with all the other users of the spectrum area, 
and it is allocated by a process outside the DOD control.
    Mr. Abercrombie. It is difficult for me, when you say 
``outside the DOD,'' but then if that was the case, why wasn't 
it brought to our attention? I don't do this every day. I am 
not down there with those guys in the spinner. Why wasn't it 
brought to our attention in the first place, that they said, 
``Look, this isn't under our control; we have to compete with 
these other spectrum users or would-be users; and it is going 
to cause us a real problem unless we can get a dedicated 
section of it.''
    Then we could have either drafted legislation to make that 
happen or whatever else we needed to do. I am not saying you 
did it, but somebody did it.
    General Hoffman. Well, there is more of this going on. We 
can give you a list of where we are not primary users.
    Mr. Abercrombie. Okay. Would you?
    General Hoffman. Sure.
    [The information referred to can be found in the Appendix 
beginning on page 175.]
    Mr. Abercrombie. Yes, because are we going to run into this 
again?
    General Hoffman. Especially domestically here. It varies 
country by country because even though we may control spectrum 
within this Nation, there are other countries that control 
their spectrum.
    Mr. Abercrombie. How do I know that this upgrade and 
relocation is going to not put us right back in the same 
position?
    General Hoffman. In this case, we are primary users, at 
least from the perspective of the U.S. we have primary status.
    Mr. Abercrombie. What happens when you leave the U.S.?
    General Hoffman. Just like we conquer air space, as we go 
into some place, we also conquer spectrum.
    Mr. Abercrombie. Well, you are going to have to tell me a 
lot more about this. My staff couldn't give me answers that I 
could----
    Let me ask you this, if we do this, is this the last time I 
will hear about this?
    General Hoffman. This will not be the last time you hear 
about a spectrum challenge. I can't guarantee that the B-2 will 
have to move in 40 years somewhere else. We are comfortable 
that we are moving to the right frequency here, but spectrum is 
a challenge across the entire commercial and military 
enterprise.
    Mr. Abercrombie. What do we have to do to make it not a 
challenge?
    General Hoffman. Technology is helping. You can share 
spectrum if you do certain technologies like managing your 
power, managing the range of this.
    Mr. Abercrombie. Why can't we dedicate a portion of the 
spectrum for defense purposes and tell everybody else to get in 
line afterwards?
    General Hoffman. I am all for that as a defense member, but 
I don't think the Department of Commerce would be with you.
    Mr. Abercrombie. What do I care what the Department of 
Commerce thinks?
    Okay. You are answering my question. In other words, you 
have had this need and the Department of Commerce has told the 
Department of Defense that it has to take second place to 
commercial interests?
    General Hoffman. They are the ones that control the selling 
of the spectrum. There are other agencies that also have a 
role.
    Mr. Abercrombie. Okay. Does it take legislation to change 
that?
    General Hoffman. I think it probably would. I am not a 
spectrum expert.
    Mr. Abercrombie. I am not going to ask you any more 
questions because I figure you are already thinking, oh, boy, I 
am sliding right into a real deep well.
    General Hoffman. No, sir. I would be glad to have further 
discussion on this. This is a challenging problem.
    Mr. Abercrombie. Okay. I am going to tell you right now----
    General Hoffman. I am looking at unmanned vehicles, which 
use a lot of spectrum to command and control them and to get 
the value of their sensors off-board. There are some countries 
we can't operate certain vehicles in.
    Mr. Abercrombie. Well, then poor Mr. Balderson has already 
gone through here about what I think the country will put up 
with or not put up with, and the same here. I cannot believe 
that there is any citizen of the United States that is going to 
say to the Department of Defense with respect to occupation of 
spectrum for purposes of the defense of this country, needs to 
take second place or have to compete with or argue with or arm 
wrestle with the Department of Commerce over spectrum.
    General Hoffman. Sir, it is the citizens of this country 
that use spectrum--garage door openers, cell phones, HDTV.
    Mr. Abercrombie. People flying the B-2 or anything else, 
they will want to have that spectrum used by you for purposes 
of defending the Nation's strategic interests. I am sure of 
that. And those who don't want to do that, I would be happy to 
hear from them and we will see how many of them there are, but 
I bet they are going to be few and far between.
    So my offer to you is please give us some enlightenment as 
to what the difficulties are with the use of spectrum for 
purposes of defense of the Nation, and we will see what we can 
do to be helpful to you.
    General Hoffman. Yes, sir.
    Mr. Abercrombie. Or anybody else, for that matter.
    Do you have a follow-up on that, Mr. Sestak?
    Mr. Sestak. I just had one follow-on question, sir, if you 
don't mind.
    Mr. Abercrombie. Sure.
    Mr. Sestak. I just have to go to somewhere else.
    Mr. Abercrombie. Sure. Go ahead.
    Mr. Sestak. Thank you.
    Admiral, I wanted to follow up on the question the chairman 
had. In this campaign that made you re-look at the number of 
Growlers, if I caught the conversation correctly, the Growlers 
are such import out there. What was it in that campaign 
analysis--a different scenario--that made you say that eight 
less, or whatever it was, is needed?
    Admiral Clingan. The basis for the change was not just 
resident in the campaign analysis. We also look at the other 
aspects that make up the inventory.
    Mr. Sestak. Maintenance and attrition rate and all of that?
    Admiral Clingan. Yes, sir.
    Mr. Sestak. Is that what you are saying?
    Admiral Clingan. Yes, sir.
    Mr. Sestak. So it was all embedded in that. I thought I had 
heard that. So was it at all, do you know, part of the 
scenarios, part of how warfare is to be done? Or was it purely 
more the pipeline and the maintenance as you have done your 
lean six and all that? Was it the latter or the former?
    Admiral Clingan. The latter was the predominant. The 
campaign analysis confirmed that we need five per air wing. In 
terms of the number of aircraft allocated through the FRP----
    Mr. Sestak. That is good. The reason I am asking is to the 
Air Force's answer on the UCAV. Are we still pursuing this 
joint approach with the Navy and the Air Force, of the 
combination of the Growler, the UCAV, the B-52 all being the 
spectrum in future warfare of jointness as we head into what 
has up until now fairly been placed within the Growler--not the 
Growler--the Prowler?
    General Chandler. Yes, sir.
    Mr. Sestak. Can you describe it? Is it funded for the B-52? 
I may have missed it in the budget.
    General Chandler. Sir, that is a $35 million unfunded 
priority for us to get at funding the core component jammer, 
but as you know, that is all part of the system of systems. 
That is the piece that does the high-powered low-band jamming. 
Compass Call does communications jamming, all the way down 
through stand-in jamming and then all the way into the 
Miniature Air Launched Decoy (MALD) system.
    Mr. Sestak. And it is unfunded?
    General Chandler. At this point, there is some funding for 
it, but there is a $35 million unfunded.
    Mr. Sestak. But isn't your portion of this dependent 
somewhat upon their having these elements in the system of 
systems from the UCAV? At least the last time I looked at it, 
there was a timeframe here, as you lose your Prowlers. I have 
forgotten all this. But there is a system of where these pieces 
are supposed to be coming together for the joint family to be 
out there.
    Admiral Clingan. You are correct, Congressman. But there is 
a bit of a separation, sir. UCAV, and I appreciate the 
correction by my colleagues that we have ongoing 
demonstrations. In the case of the Navy, the carrier 
suitability demonstration will plan far more than form our 
decision to go forward with it in UCAS, as we are calling it.
    Mr. Sestak. Sorry.
    Admiral Clingan. But the primary role of that platform in 
the Navy's view will be persistent penetrating----
    Mr. Sestak. Correct. SFers (Special Operations Forces) will 
have the jammer. Correct?
    Admiral Clingan. Well, in the Airborne Electronic Attack 
(AEA), electronic attack system of systems, there are about 
four or so phases. One is stand-off, long-dwell persistent. 
That one----
    Mr. Sestak. And that is not funded?
    Admiral Clingan. Correct, sir.
    Mr. Sestak. So system of systems has a portion not funded.
    Admiral Clingan. Correct. The Growler fits the escort part 
of the system. Then there is the penetrating slice of the 
system which actually goes into the denied area.
    Mr. Sestak. That is the UCAS, correct?
    General Chandler. Sir, the actual stand-in portion of that 
is the launch decoy. And then as you move outward through the 
penetrating escort, typically----
    Mr. Sestak. Does the UCAS still have a role in this AEA 
system?
    General Hoffman. That was just going to be a technology 
demonstration for that system. That was never designed to be a 
force structure element that hears so many----
    Mr. Sestak. So it is not the penetrator?
    General Hoffman. It could penetrate if we would choose to 
build a force structure around it, but we were just using it as 
a demonstrator vehicle.
    Mr. Sestak. And UCAS will not be what for the Air Force?
    General Hoffman. Well, there is none, as I said before----
    Mr. Sestak. Oh, that is right. There is none.
    General Hoffman. Yes. We are taking some of the 
technologies there and we are trying to harvest those 
technologies and mature them for future force structures.
    Mr. Sestak. To the AEA, if I have it right, that has been 
modified and is not fully funded.
    Admiral Clingan. Well, there is a difference, Congressman, 
between the concept and the material solutions that are filling 
the elements of the concept. So currently the, if you will, the 
penetrating, there are unmanned solutions, expendable solutions 
being considered to penetrate deep into the denied areas. We 
have fielded the slice of the systems of systems that the 
Growler fills. We are bringing strike fighter capabilities 
along in our F-22s, JSF, and the F-18E&F block two with AESA. 
So that slice of it.
    Mr. Sestak. If I could, I would be very interested in 
seeing what the Air Force program is. If I have to come over 
there or something, I would be happy to.
    General Chandler. Sir, we can bring that to you. We will 
take that for the record.
    [The information referred to is classified and retained in 
the committee files.]
    Mr. Sestak. And also the AEA. I have forgotten what the 
system of systems and the jamming was called. AEA?
    General Chandler. Airborne electronic attack.
    Mr. Sestak. Yes. I would be curious. Thanks for the time 
very much.
    Mr. Chairman, thank you.
    Mr. Abercrombie. Yes, thank you.
    What I still don't quite grasp, though $35 million in this 
context is nothing. Why is that unfunded? When we generally say 
the word ``unfunded,'' it means that Congress has denied you 
the money.
    General Chandler. No, sir. I wouldn't say it that way. I 
would be honest to say that last year in terms of trying to put 
the program together, we didn't meet the budgeteers' timing. We 
need to get our program in in 2009 to be able to field 
something in 2015.
    Mr. Abercrombie. But $35 million--how much is expended 
right now? You have to help me, because I am a lay person in 
this and you are all much more familiar with it. How can you 
put all this together if you have that unfunded component?
    General Chandler. As we said earlier, sir, there is a gap 
between 2012 and 2015 before we can bring this on line.
    Mr. Abercrombie. Is the $35 million preventing that?
    General Chandler. No, sir. That is simply technical 
maturation to get us started with the program. Obviously, the 
program is going to cost somewhere between $3 billion and $4 
billion.
    Mr. Abercrombie. Am I missing something here? Why would $35 
million then be in the way? I can't imagine if you are talking 
about a multi-billion dollar program that you would let $35 
million get in the way.
    General Hoffman. Well, the multi-billions aren't there 
either.
    Mr. Abercrombie. Well, there are not apparently going to be 
if you don't get your $35 million. That is what I am driving 
at.
    General Hoffman. This is the leading edge of what we need 
to develop the program.
    Mr. Abercrombie. I feel like I am going into the spectrum 
argument again. I don't understand. You have to help me with 
this. I don't understand. Did you ask for the $35 million and 
it was denied?
    General Hoffman. Not from Congress, no, but it fell below 
the prioritization process that occurs within the service and 
the Department of Defense.
    Mr. Abercrombie. Within the service, the $35 million was 
denied?
    General Hoffman. It was below the priority line.
    Mr. Sestak. Mr. Chairman, would you yield for a moment?
    Mr. Abercrombie. Sure.
    Mr. Sestak. Let me make sure I understand, because this $35 
million, are you saying that there is this gap--I have 
forgotten the figures--but there is some gap that is emerging, 
whether it the 2012 to 2015 gap, where your Prowlers, if I have 
it right, would go away. Correct?
    Am I still here? And is that the capability gap? You are 
talking about a capability gap here--correct?--of jamming that 
we have had for quite some time, ever since the Air Force and 
the Navy came together in a joint way to some degree to have 
the Prowlers be one force.
    I think the chairman's question is, if for want of $35 
million--and I know it is not a simple answer--but we have an 
impending capability gap for a number of years. Is that 
correct? And it isn't just the $35 million. It is also 
something else that is not coming on line, isn't it?
    General Hoffman. The gap starts to manifest itself when the 
Navy's Prowlers age out in 2012. Up to this point, when we did 
away with the EF-111s, that used to be in the Air Force force 
structure, the Navy through this MOU said that we would assume 
the joint responsibilities for stand-in jamming.
    Mr. Sestak. But the agreement was that by 2010, the Air 
Force would have picked up this capability gap again. Is that 
correct, Admiral?
    Admiral Clingan. In 2012.
    Mr. Sestak. In 2012. But now we have a capability gap 
between 2012 and 2015, because of--I know it is not all--some 
because of the $35 million, but there is something else missing 
in this piece. What is it? Or is it only the $35 million?
    General Hoffman. No, it is $3 billion to $5 billion.
    Mr. Sestak. Which is which capability? What you are going 
to put on the B-52?
    General Hoffman. That would be for the B-52 core component.
    Mr. Sestak. So what is the military going to do with this 
capability gap?
    General Hoffman. Like all other capability gaps, we will 
use the other elements of AEA. Maybe it takes more model J's. 
Maybe it takes more risk to the crews that have to operate in 
this environment. Maybe it is a different Concept of Operations 
(CONOPS) and strategy.
    Mr. Sestak. But if it is not that significant, why did we 
bother thinking of filling it for some time up until now? 
Admiral, are you concerned? This gap is okay?
    Admiral Clingan. We are concerned about the gap, so we have 
a concept that meets the warfighters' needs in the out-years as 
we look forward to the threat and the effects we are required 
to generate to deal with the threat. We have an MOU that we 
have been----
    Mr. Sestak. With the Air Force.
    Admiral Clingan [continuing]. With the Air Force that is 
coming to its conclusion in fiscal year 2012. So we have really 
two things: a capacity issue and a capability issue.
    Mr. Sestak. A capability issue.
    Admiral Clingan. The capability issue is long-range, long-
persistent jamming in the standoff-jamming role as part of the 
system of systems. The capacity is an issue of when we----
    Mr. Sestak. If I could, the only reason I am concerned is I 
think the tragedy, one of the tragedies of Iraq is the failure 
to complete what the Air Force and other services wanted to 
transform toward. You have mentioned the cost and the other 
things. I asked you about scenarios, particularly the Western 
Pacific.
    And the scenarios often, as you prepare for the future, 
watch the synergy among the services. This MOU is more than a 
piece of paper. It really is how we are going to fight in the 
future. This is, for a certain scenario, a pretty big gap. Am I 
wrong, Admiral?
    Admiral Clingan. In that scenario, the capability to 
achieve the effects is inherent in the Growler. We will have a 
capacity challenge which we will address through force 
allocation in the joint arena with the combatant commander.
    Mr. Abercrombie. We are moving into a bit more of the 
policy side, which is important, but again, you have been here 
for a long time and are patient on it.
    Let me go back to see if I can understand correctly. It is 
less that you didn't have the $35 million or were unwilling to 
put the $35 million forward, so much as you were saying when it 
got to $3 billion or $4 billion, you decided that perhaps there 
was an alternative way of doing it. Is that correct?
    General Chandler. No, sir. I would say that once it got to 
$7 billion, when it was the B-52 stand-off jammer, is when the 
program became unexecutable for us.
    Mr. Abercrombie. So you decided that you didn't want to 
pursue that particular----
    General Chandler. Once we did not pursue----
    Mr. Abercrombie. Okay. It wasn't that you weren't moving 
forward for lack of the $35 million. It was a decision based on 
the assessment of the expenditure versus the outcome. You made 
a decision that you needed to do something else. Is that 
correct?
    General Chandler. Yes, sir. That is correct.
    Mr. Abercrombie. Okay. That is fair enough. How much got 
spent up to that point?
    General Chandler. Sir, I will have to take that for the 
record and let you know.
    [The information referred to can be found in the Appendix 
beginning on page 176.]
    Mr. Abercrombie. I am not upset by it, but it is better to 
stop if you think that it was getting out of hand.
    General Chandler. It wasn't a total loss. Some of that is 
transferable, but I would tell you that the program was not 
worth the $7 billion it was going to cost us.
    Mr. Abercrombie. I wasn't thinking in terms of it being a 
total loss. I doubt that many of that was. A lot of what you 
are learning prevents you from going in wrong directions 
presumably. Right?
    General Chandler. Yes, sir.
    Mr. Abercrombie. Okay. I think that the length of the 
discussion has resulted in you being freed from further service 
here this afternoon. We will send some of the questions on, 
then, and if we could get the answers in a timely way, it will 
be helpful.
    I learned an awful lot today that I hope will manifest 
itself in good recommendations that will be helpful to you and 
the men and women that we all serve by way of trying to look 
out for them and their warfighting capabilities and their 
safety, to make sure that those who love them and care for them 
have confidence in us, that we are doing our best on their 
behalf.
    You certainly did your best on their behalf today. Whatever 
shortcomings there are are on this side of the table, I can 
assure you, not on yours. I repeat that I learned an awful lot 
today and will try to put it to very good use on your behalf 
and on their behalf.
    Unless there is any closing thoughts or remarks you would 
like to make, I will bring the hearing to a close.
    And thank you once again for your service to the Nation.
    [Whereupon, at 6:00 p.m., the subcommittees were 
adjourned.]
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                            A P P E N D I X

                             March 22, 2007

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              PREPARED STATEMENTS SUBMITTED FOR THE RECORD

                             March 22, 2007

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

      
      
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              WITNESS RESPONSES TO QUESTIONS ASKED DURING

                              THE HEARING

                             March 22, 2007

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

      
          RESPONSES TO QUESTIONS SUBMITTED BY MR. ABERCROMBIE

    General Hoffman. Management of the electromagnetic spectrum divides 
the entire spectrum into frequency bands called allocations. The 
allocations specify the allowed use of the frequencies in the band. 
These uses are referred to as radio services (e.g., fixed, mobile, 
broadcasting, radiolocation, radionavigation, amateur, satellite, radio 
astronomy, etc.).
    In the United States, the electromagnetic spectrum is regulated by 
the Federal Communications Commission, for commercial and non-Federal 
government spectrum, and the Department of Commerce, for Federal 
government spectrum. Frequency bands are allocated primary and 
secondary services. Users of the primary service have priority over the 
users of the secondary service. Users of secondary services are usually 
required to operate with greater restrictions to avoid causing 
interference and must accept interference from the primary users. 
Exceptions to allocations may also occur and appear as footnotes. These 
footnotes allow uses of bands under specific conditions for other 
services and users than listed as primary.
    U.S. frequency allocations are divided further into Federal 
government and commercial/non-Federal government use. Unique in this 
allocation is the subdivision of spectrum into designations where the 
primary use is exclusively for non-Federal government, Federal 
government, and shared Federal government and commercial/non-Federal 
usage.
    Table 1 contains bands where the Federal government has exclusive 
primary status. Many of these bands, however, allow non-Federal use of 
the spectrum either in a secondary status or a primary status through a 
footnote in the regulations.

                     Table 1. Frequency bands where government has exclusive primary status
----------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------
                14-19.95 kHz          25.33-25.55 MHz         26.48-26.95 MHz                 27.54-28.00 MHz
----------------------------------------------------------------------------------------------------------------
             28.89-29.91 MHz             30-30.56 MHz               32-33 MHz                       34-35 MHz
----------------------------------------------------------------------------------------------------------------
                   36-37 MHz             38.25-39 MHz               40-42 MHz                     46.6-47 MHz
----------------------------------------------------------------------------------------------------------------
                 49.6-50 MHz              138-144 MHz        150.05-150.8 MHz       157.0375-157.1875 MHz \1\
----------------------------------------------------------------------------------------------------------------
      162.0125-173.2 MHz \1\            173.4-174 MHz           225-328.6 MHz                 335.4-399.9 MHz
----------------------------------------------------------------------------------------------------------------
         410.0-450.0 MHz \1\          902-928 MHz \2\           1.215-1.3 GHz                   1.35-1.39 GHz
----------------------------------------------------------------------------------------------------------------
             1.429-1.435 GHz          1.755-1.850 GHz         2.200-2.290 GHz                     2.7-2.9 GHz
----------------------------------------------------------------------------------------------------------------
                3.1-3.65 GHz              4.4-4.5 GHz            4.8-4.94 GHz                   5.25-5.35 GHz
----------------------------------------------------------------------------------------------------------------
          5.65-5.925 GHz \2\           7.125-8.45 GHz            8.4-8.45 GHz                     8.5-9.0 GHz
----------------------------------------------------------------------------------------------------------------
               9.5-10.45 GHz           14.4-15.35 GHz           15.7-17.2 GHz                     33.4-36 GHz
----------------------------------------------------------------------------------------------------------------
                                                  43.5-45.5 GHz
----------------------------------------------------------------------------------------------------------------
\1\ Exceptions in these bands allocate primary use to some non-Federal users.
\2\ These bands are also allotted for industrial, scientific, and medical (ISM) use.


    The DOD is automatically in a secondary status when it tries to use 
spectrum in the non-Federal bands. This has relevance when the DOD 
wants to use its equipment in non-Federal bands.
    The DOD currently operates in most government exclusive spectrum 
bands as well as in many shared spectrum bands. The vast majority of 
DOD spectrum use is below 6 GHz due to the fact that spectrum in this 
range is very conducive to supporting terrestrial mobile operations 
with reliable, moderate capacity communications links and with many 
bands providing excellent propagation characteristics through dense 
foliage. The DOD also employs a number of spectrum bands above 6 GHz 
for critical functions and applications. Figure 1 below provides a 
graphical depiction of the many spectrum bands where DOD has critical 
operations.

[GRAPHIC] [TIFF OMITTED] T3751.105


    The regulatory body for international spectrum use is the United 
Nations' International Telecommunication Union (ITU). The frequency 
management administrations of ITU member nations generally develop 
national frequency allocation policies consistent with the ITU 
regulations. Use of the electromagnetic spectrum is the sovereign right 
of each individual nation.
    The DOD uses spectrum worldwide. Conditions for use in the United 
States and Possessions (US&P) only apply to the US&P. The DOD can use 
spectrum worldwide, only after coordination with applicable countries. 
DOD equipment must be developed to operate on the spectrum that will be 
available in applicable countries.
    U.S. military forces are stationed in foreign countries around the 
world. These forces operate their radio systems in accordance with the 
laws, regulations, and allocations of the host nations. Since no other 
country maintains a military force on the scale of the U.S. forces, 
most countries do not maintain an extensive allocation for military 
uses, and such allocations that exist differ between countries. 
Combatant commanders are responsible for coordinating the use of 
spectrum with host nations. [See page 56.]
    General Chandler. A total of $21M was spent on the B-52 Stand-Off 
Jammer program before it was terminated. The majority of that funding 
was spent on technology maturation efforts that will benefit any future 
stand-off jammer program. [See page 62.]
                                 ______
                                 
             RESPONSE TO QUESTION SUBMITTED BY MR. BARTLETT

    Admiral Clingan. Existing heavy lift rotary requirements are being 
met by the MH-53E. The Airborne Re-Supply/Logistics for the Sea Base 
(AR/LSB) Analysis of Alternatives (AoA) is currently being finalized. 
The AoA concluded that the MH-53K was the best option to meet the Heavy 
Lift/Medium Range requirement in support of the Joint Sea Base. 
Additionally, the Navy is currently conducting a comprehensive analysis 
to determine rotary heavy lift requirements for both existing and 
future mission areas. The information obtained, in conjunction with the 
AR/LSB AoA, will be used to determine the cost and benefit of procuring 
a follow-on heavy lift aircraft. Preliminary analytic results will be 
available to support the upcoming Fiscal Year Program Objective 
Memorandum (POM). Therefore, current acquisition plans have not been 
adjusted. [See page 40.]
                                 ______
                                 
        RESPONSE TO QUESTION SUBMITTED BY MR. MILLER OF FLORIDA

    Mr. Ahern. It appears the GAO did not include the technology and 
reliability improvement costs required by a two engine program and they 
assumed sustainment costs per flight hour would be the same for both 
the sole source and competitive cases. These required costs may explain 
some of the differences between the CAIG, IDA and GAO reports. It seems 
likely that each independent team also had other embedded assumptions. 
[See page 12.]
                                 ______
                                 
             RESPONSES TO QUESTIONS SUBMITTED BY MR. SESTAK

    Admiral Clingan. The 2005 Quadrennial Defense Review (QDR) of the 
future force requirements for the United States military directed 
reorienting the Joint Unmanned Combat Air Systems (J-UCAS) capability 
demonstrations program and transitioning those technologies into other 
programs. The decision was made to transition this program in order to 
focus on maturing technologies and capabilities not yet demonstrated. 
The J-UCAS X-45A performed limited demonstrations of precision weapon 
drops, multi-ship coordinated flight, and collaborative targeting 
technologies, illustrating the potential for future UCAS developmental 
programs. UAS currently deployed in the Global War on Terror have 
provided a significant level of confidence in Concept of Operations 
development, data dissemination, and reach-back operations. However, 
there are still capabilities needing demonstration. Accordingly, the 
Navy will focus on specific areas of the overall joint capabilities 
portfolio to advance technology and facilitate additional capability 
for the warfighter. For the initial phase, the Navy will focus on a 
demonstration of carrier operations suitability of a low-observable 
Navy Unmanned Combat Air System. These efforts leverage the work, 
accomplishments and technology of the former J-UCAS program. [See page 
47.]
    General Chandler. The Air Force will leverage all available 
technology development efforts including F-35, F-22, B-2, Global Hawk, 
Predator, and other science and technology investments in order to 
field a new bomber by 2018. The Air Force envisions that the new bomber 
will be a manned, land based highly survivable, penetrating, long-range 
strike aircraft. The Air Force will also pursue unmanned technologies 
and operating concepts to apply to this aircraft.
    Currently, funding in the Future Years Defense Program begins in 
fiscal year 2011. [See page 48.]
?

      
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              QUESTIONS SUBMITTED BY MEMBERS POST HEARING

                             March 22, 2007

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

      
                 QUESTIONS SUBMITTED BY MR. ABERCROMBIE

    Mr. Abercrombie. Given the potential for increased weight in the 
STOYL aircraft do you think keeping the engine competition is a good 
strategy for reducing this risk or are there other strategies that 
should be considered?
    Mr. Ahern. The Department believes the cost of competition in this 
program outweighs the benefits. Further, the Department is satisfied 
with the program's strategy to control weight.
    The CAIG analysis found a potential for STOVL weight growth in the 
F-35 program, and concluded that having a second engine would mitigate 
that risk. If there is additional near-term weight growth, the STOVL 
lift fan (common to the F135 and F136 engines) is the first component 
that will need to be upgraded, not the engine turbomachinery that would 
be subject to a competition.
    In the long-term, F-35 engine competition would increase 
technological innovation. However, these benefits do not outweigh the 
cost of competition in this case.
    Mr. Abercrombie. Given your analysis shows the cost difference 
between competition and sole source is negligible do the other benefits 
you discuss (industrial base, insurance against risk, contractor 
responsiveness) provide a sufficient incentive to continue the 
alternate engine? Did you find any measure of these benefits in your 
look at competition history?
    Mr. Ahern. The Department believes the cost of competition in this 
program outweighs the benefits. The Department considered all of the 
intangible benefits and determined that these other benefits were not 
sufficient to warrant an engine competition for the F-35.
    While the CAIG acknowledged the benefits of competition within the 
industrial base, the CAIG did not find a reliable measure of intangible 
benefits in their study of competition history.
    Mr. Abercrombie. Your statement was silent on international 
participation and the benefits or negative benefits of the alternate 
engine program to their current or future participation, this would 
include future foreign military sales. Would you care to comment on 
this?
    Mr. Ahern. The F-35 international partners support the overall 
direction the program is headed, as evidenced by all eight partners 
signing the Production, Sustainment, and Follow-on Development 
Memorandum of Understanding.
    Mr. Abercrombie. Do you have any more detailed thoughts on the 
impact on the industrial base and the impacts on future jet engine 
development efforts for DOD if the JSF becomes a sole source contract 
for just one of the two remaining major engine manufacturers?
    Mr. Ahern. The CAIG found that the jet engine industrial base would 
be improved if there was engine competition in the F-35. However, the 
CAIG believes that benefits such as an improved industrial base do not 
outweigh the investment costs.
    Pratt and Whitney (P&W) and General Electric (GE) are competitive 
in both the military and commercial jet engine business. GE has been 
more dominant on the commercial side since the late 1990s with 2007 
production at 1000, compared to P&W at 220. P&W's U.S. business is 
more heavily dependent on military sales (50% of direct sales in 2006) 
than General Electric (15% of direct sales in 2006). The Defense 
Contracts Management Agency (DCMA) estimates that approximately 350 of 
the 4500 GE engineering staff would be unable to transfer their skills 
to the commercial engine business.
    The Department's VAATE (Versatile Affordable Advanced Turbine 
Engines) has more than 20 technology programs in early science and 
technology that would feed into future engine technologies and help to 
mitigate industrial base issues.
    The goal of the VAATE program is to develop, demonstrate, and 
transition advanced multi-use, turbine engine technologies that provide 
a revolutionary improvement in affordable capability to a broad range 
of legacy, emerging and future military propulsion and power needs. 
Both General Electric and Pratt Whitney participate in this program. 
The Department has invested over a billion dollars in the FYDP into 
developing more advanced engine technologies.
    Since VAATE represents a combined effort between government and 
industry in researching advanced engine technologies, continued 
Department support could mitigate industrial base concerns over loss of 
the F136 business base.
    Mr. Abercrombie. IDA makes the point that commercial buyers of 
engines include engine operations and support cost metrics in their 
original procurement selection criteria. IDA further indicates DOD has 
little experience in integrating procurement and operations and support 
costs in competitions. Given the billions of dollars that DOD spends on 
engine procurement and operations and support, why do you think that is 
and should OSD and the military services incorporate operations and 
support costs in competitions?
    Mr. Ahern. The Department of Defense and the commercial sector face 
different conditions when bidding for equipment and services and 
dramatically different requirements. Uncertainty and variability in 
engine and platform utilization rates, operating environments, system 
reliability, and sustainment strategies over the extensive life cycle 
of a weapon system make it challenging to fully integrate O&S costs 
into procurement selection decisions for military items. However, OSD 
and the military services do emphasize the incorporation of O&S costs 
in program decision making given the significant percentage of life 
cycle costs incurred after production/delivery of the product.
    Most commercial firms get a satisfactory outcome because they 
specify only one or a small number of performance requirements, which 
allow engine manufacturers wide latitude in determining an optimum mix 
of investment for design, manufacturing and support.
    On the other hand, the Department's requirements are often more 
numerous, complex and stringent for aircraft, which reduces contractual 
flexibility. Additionally, the Department must obtain permission from 
Congress prior to transferring any funding among appropriations 
(development, procurement, and operating funds) which does limit 
contract flexibility compared to the commercial sector.
    The CAIG found that in the Department's limited experience with 
Performance Based Logistics (PBL) contracts, the PBL arrangements 
resulted in increased operational availability, but no cost savings.
    Mr. Abercrombie. The GAO has reported that many of the Department 
of Defense's current and past programs have experienced significant 
cost over runs for a variety of reasons. Do you think competition would 
help diminish the probability of cost over runs in the JSF engine 
program?
    Mr. Sullivan. Our testimony on March 22, as well as past studies by 
others, identifies some non-financial benefits of competition that 
could reduce the risk of cost over runs. One of these benefits is the 
ability of the program office to instill contractor incentives for 
better performance, which could help control cost growth. Another 
benefit of competition that could diminish the probability of cost 
overruns is the presence of a viable alternate engine for use in JSF if 
one engine develops problems that require additional time and funding 
to correct.
    Mr. Abercrombie. In its analysis, the Department of Defense 
expressed some concern about the F-35B STOVL variant having some weight 
growth and that improved engine performance may be required to address 
this situation. Do you believe that a two-engine program would help 
ensure that the F-35B could meet performance parameters?
    Mr. Sullivan. Sustaining a two-engine program could help ensure the 
F-35B meets its performance parameters if the competition results in 
better engine performance or increased contractor responsiveness, two 
benefits which could accrue from competition as indicated in our 
testimony. Better performance could benefit the F-35B by providing the 
thrust needed to at least partially offset any weight growth. Better 
contractor responsiveness could ensure that the government is better 
able to work with contractors to proactively improve engine designs and 
account for any weight growth prior to potential costly design changes.
    Mr. Abercrombie. In your analysis did you consider not only 
procurement costs but life cycle costs?
    Mr. Sullivan. Yes, we considered life cycle costs in our analysis 
by examining the remaining costs to complete system development and 
demonstration, the production costs of the engines, the costs to 
support production through activities like the purchase of initial 
spares and establishment of depots, and the costs to sustain the 
engines through the lifetime of the aircraft.
    Mr. Abercrombie. Did you assume sunk costs in your analysis? If so, 
why?
    Mr. Sullivan. We considered all costs for development of both 
engine designs through 2007 to be sunk costs and did not factor them 
into our analysis. We have stated previously that it is inappropriate 
to consider sunk costs in a break even analysis of the benefits of 
competition as that money has already been expended.
    Mr. Abercrombie. What was the time period or life cycle for your 
analysis, 2008 through what year?
    Mr. Sullivan. In our analysis, production begins in 2007 and ends 
with delivery of the last full-rate production engines in 2036. 
Sustainment of the engines continues through the approximate 30 year 
lifecycle of the aircraft to 2067.
    Mr. Abercrombie. How many total engines did your analysis assume 
would be procured over the life of the JSF program? What is your 
estimated dollar values of the engines procured over the lifetime of 
the U.S. JSF programs in then year dollars with and without a 
competitive procurement?
    Mr. Sullivan. We did not calculate the total number of engines used 
over the life of the JSF program. By using a performance based 
logistics concept, the JSF program will place responsibility for engine 
replacement on the contractor, and will include the costs for related 
parts or modules in the negotiated sustainment price. As such, we 
calculated the number of installed engine quantities--2,443--to arrive 
at a cost for production, then calculated a cost for production support 
which includes the cost to procure initial spares (which equates to 
about 1 engine per squadron), and a cost per engine flight hour for 
sustainment which includes the purchase of additional engine parts or 
modules as needed. For competitive scenarios we then applied a range of 
potential cost savings of 10 to 20 percent based on savings from past 
engine programs.
    Mr. Abercrombie. What conclusion did your study reach about the 
value of competition, other than cost?
    Mr. Sullivan. As stated in our testimony on March 22, and agreed to 
by both DOD and IDA witnesses, competition may also provide a number of 
benefits that do not result in immediate financial savings, but may 
result in reduced costs or other positive outcomes to the program over 
time. These benefits could include; better engine performance, 
increased reliability, improved contractor responsiveness, enhanced 
readiness, enhanced international participation, and a stable 
industrial base.
    Mr. Abercrombie. Given the anticipated increased weight in the F-
35B aircraft, do you think the F135 engine will allow the F-35B to meet 
its key performance parameters? Would the F136 increase the likelihood 
that the F-35B will meet its key performance parameters?
    Mr. Sullivan. Our analysis of the JSF engine focused on the costs 
and benefits of competition and did not investigate the technical 
parameters or performance specifically associated with either engine 
design or aircraft variant. If, however, the F-35B aircraft does exceed 
the current target weights by about 2,000 pounds and requires 
propulsion system thrust growth, as stated as a possibility by DOD on 
March 22nd, then we believe competing the engine program could have 
benefits that help ensure the F-35B meets its performance parameters, 
as mentioned above.
    Mr. Abercrombie. The IDA study makes the point that commercial 
buyers of engines include engine operations and support cost metrics in 
their procurement selection criteria. The study, however, further 
indicates ``DOD has little experience in integrating procurement and 
operations and support costs in competitions.'' Given the billions of 
dollars that DOD spends on engine procurement and operations and 
support, why do you think that is and should DOD incorporate operations 
and support costs in its competitions?
    Mr. Sullivan. DOD has not integrated procurement, operations, and 
support costs for competitions in the past because it has not developed 
a ``single line of accounting'' that would provide the needed 
flexibility to efficiently fund such a contract. DOD has begun 
initiatives to address ``single line of accounting'' concerns, and the 
JSF program hopes to further these efforts to combine the traditional 
support related procurement, replenishment spares, retrofit, support 
and flying hour funding lines. According to the program's acquisition 
strategy, the JSF approach would necessitate both military service 
acceptance of restructured funding lines and changes in legislation to 
allow the approach. The JSF program has stated in its acquisition 
strategy that it intends to award a combined production and performance 
based logistics contract if possible, and could include criteria such 
as other costs, reliability, and sustainability in the competition. In 
the event that the program cannot get approval for such an approach, a 
performance based logistics contract could still be used with a legacy 
approach of multiple funding lines which the program considers to be 
sub-optimal.
    Mr. Abercrombie. One of the test aircraft for the Armed 
Reconnaissance Helicopter program recently crashed, contract options 
starting last December have been allowed to lapse, and the Army held an 
acquisition review of the program earlier this week, can you provide us 
the status of the program, including current cost and schedule 
information?
    General Mundt. Schedule delays, contract cost growth, and Low-Rate 
Initial Production pricing disagreements between the contractor and the 
government resulted in the Army issuing a stop work order on the System 
Development and Demonstration contract with Bell Helicopter/Textron 
Inc. (BHTI). Subsequently the stop work order was rescinded allowing 
Bell and its suppliers to work within the Limitation of Funds on the 
contract. On April 23 BHTI presented a plan to the Army that maximizes 
contract performance while minimizing contract cost.
    Since testimony, during the ARH Special Army Systems Acquisition 
Review Council (ASARC) held on May 18, the Army evaluated and 
considered options in the procurement of the ARH to replace the rapidly 
aging and depleted fleet of OH-58D Kiowa Warriors. The ASARC, after 
evaluation of available options, recommended that the Army continue 
with BHTI as the prime contractor for the Armed Reconnaissance 
Helicopter.
    The recommendation by the ASARC, approved by the Acting Secretary 
of the Army, maximizes contract performance while minimizing negative 
cost and schedule impacts to the government. First Unit Equipped is 
planned for no earlier than April 2010. The Army will report the 
recommendation to the Defense Acquisition Executive.
    Mr. Abercrombie. Were there other Department of Defense concerns 
with the contractor's ability to perform for the Armed Reconnaissance 
Helicopter given the problems with the UH-1Y/AH-1Z program?
    General Mundt. Certainly, performance issues with other Bell 
programs are a concern. The Army wants creditable assurance that issues 
seen on other Bell programs are not going to be repeated on ARH. [See 
also question submitted during the hearing by Mr. Davis of Kentucky, 
beginning on p. 35.]
    Mr. Abercrombie. Were these concerns considered in the selection of 
the contractor for the Armed Reconnaissance Helicopter?
    General Mundt. Contractor Past Performance was considered as part 
of the source selection process.
    Mr. Abercrombie. IDA makes the point that commercial buyers of 
engines include engine operations and support cost metrics in their 
original procurement selection criteria. IDA further indicates ``DOD 
has little experience in integrating procurement and operations and 
support costs in competitions.'' Given the billions of dollars that DOD 
spends on engine procurement and operations and support, why do you 
think that is and should OSD and the military services incorporate 
operations and support costs in competitions?
    General Mundt. Sustainment cost is a significant consideration 
during the acquisition selection process by the Army, and the life 
cycle cost of a major subsystem such as an engine supporting a new 
aircraft platform is evaluated during the source selection process.
    Army Aviation's emphasis on operating cost in contracting for 
engines can be tracked to the Blackhawk engine upgrade in the mid 
1980s. The Operation and Sustainment (O&S) costs of that engine, 
coupled with the Specific Fuel Consumption (SFC)/performance 
improvements, were included in the Request for Proposal (RFP) 
evaluation criteria considered by the Source Selection Evaluation Board 
and were critical drivers for the selection of the engines. As a 
function of contractual compliance, the reliability requirements in the 
engine specifications could be enforced if not met.
    The Army's latest competitive procurements have been geared to 
utilize COTS/NDI aircraft to the maximum extent. These procurements 
considered both procurement and operations and support cost in the 
contractor selection process. The cost of engine procurement and 
support was not a separate entity but was included in the overall 
operations and support price.
    Mr. Abercrombie. From your perspective, do you believe the 
Department of Defense should proceed with an alternate engine program 
for the Joint Strike Fighter?
    Mr. Balderson. The Department's decision to cancel the F-136 
program is strictly based on affordability, providing the best balance 
of risk and cost. Recent experience with engine development indicates 
there is low operational risk to the warfighter with a single engine 
supplier. The studies required by the FY 2007 Authorization Act have 
been completed. The conclusions, while supportive of competition in 
general, support the Department's initial findings that the expected 
savings from competition do not outweigh the investment costs. The 
studies also concluded that other benefits might result from 
competition. The Department believes the cost of competition outweighs 
the benefits. The Department considered all of the intangible benefits 
and determined that the other benefits were not sufficient to warrant 
an engine competition for the F-35.
    Mr. Abercrombie. We noted that the Navy's F/A-18EIF program 
increased from 462 aircraft to 490 aircraft with an additional 28 F/A-
EIFs programmed in 2011 and 2012. Based on the strike fighter 
shortfall, should the F/A-ISEIE procurement program be further 
increased in years earlier than 2011 to 2012?
    Mr. Balderson. No, the peak years for the strike fighter shortfall 
are expected to be from 2016 to 2020. Delivery of aircraft by 2014 are 
required to partially mitigate the shortfall. The additional 28 F/A-
18E/F aircraft would be delivered in 2012, 2013 and 2014.
    Mr. Abercrombie. The budget request includes $217 million for the 
VH-71 program. Is this amount executable in 2008?
    Mr. Balderson. Yes, the requested FY 2008 RDT&E amount of $271M for 
the VH-71 program, vice the cited $217M, is executable in FY 2008. 
However, the FY 2008 funding level is sufficient only given that all FY 
2007 carryover funds remain within program accounts.
    Mr. Abercrombie. We understand that the Navy is in the process of 
revising its government cost estimate. Are VH-71 program costs expected 
to increase?
    Mr. Balderson. The program is in the process of reassessing 
Increment 2 culminating with a Systems Requirements Review and revised 
government cost estimate. Assessment recommendations will be forwarded 
to adjust, as required, fiscal years beyond FY 2008 during the FY 2009 
budget development process. Preliminary assessments show a minimum two-
year slide, to address concurrency issues with Increment 1 development, 
design, and production, to the Increment 2 Initial Operating Capability 
(IOC) which will result in increased program costs. The program office 
is awaiting further contractor data to complete the government cost 
estimate prior to making any formal assessment recommendations.
    Mr. Abercrombie. IDA makes the point that commercial buyers of 
engines include engine operations and support cost metrics in their 
original procurement selection criteria. IDA further indicates ``DOD 
has little experience in integrating procurement and operations and 
support costs in competitions.'' Given the billions of dollars that DOD 
spends on engine procurement and operations and support, why do you 
think that is and should OSD and the military services incorporate 
operations and support costs in competitions?
    Mr. Balderson. The Department of Defense does consider operations 
and support costs in competitions. Specifically, O&S costs are embedded 
in the source selection process and are included in the weighting of 
proposals under the cost parameter.
    O&S cost considerations, to include reliability/maintainability 
performance parameters, are always considered in program decision 
making given the significant percentage of life cycle costs incurred 
after production/delivery of the product. The difficulty resides in the 
Department's ability to accurately forecast the life cycle costs of a 
particular program early in the decision-making process vis a vis 
source selection. Uncertainty and variability in engine and platform 
utilization rates, operating environments, inherent system reliability, 
and sustainment strategies over the extensive life cycle of a weapon 
system make it difficult for either industry or DOD to fully integrate 
O&S cost into procurement selection decisions for military items.
    It is also important to note that DOD and the commercial sector 
face dramatically different conditions and requirements when sourcing 
equipment and services. Most commercial firms get a satisfactory 
outcome because they specify only one or a small number of performance 
requirements, which allow engine manufacturers wide latitude in 
determining an optimum mix of investment for design, manufacturing and 
support. DOD requirements are often more numerous, complex and 
stringent for aircraft, which reduces contractual flexibility.
    Finally, while supportability is factored into engine procurement 
competitions, DOD must also address Core/Title-10 and self-sustainment 
considerations for the selected solution.
    Mr. Abercrombie. Under the most optimistic conditions, the Navy 
will face a strike fighter shortfall of 60 aircraft in 2010. What 
actions is the Navy taking to mitigate this situation?
    Admiral Clingan. In 2010, the large majority of the strike fighter 
shortfall resides in the Marine Corps, in particular with their FA-18D 
and AV-8B fleets. The USMC TACAIR strategy does not include procurement 
of the FA-18 Super Hornet, so mitigation of their shortfall rests 
primarily with recapitalization with Joint Strike Fighter. The PB08 DoN 
JSF procurement plan minimizes the impacts of this strike fighter 
shortfall by ensuring the STOVL IOC remains in FY 2012.
    Mr. Abercrombie. Could the Navy move up its planned 2013 initial 
operational capability for the F-35C to help address the strike fighter 
shortfall?
    Admiral Clingan. The F-35 procurement profile in the FY 2008 
President's Budget request results in delay of Navy Initial Operational 
Capability (IOC) for the F-35 CV variant from mid-2013 to mid-2015. The 
IOC slide results from delaying initial F-35 CV procurement from LRIP 
III in FY09 to LRIP IV in FY10, coupled with reduced planned CV 
quantities in the early LRIPs. The decision to delay CV procurement was 
based on assessment of CV design maturity. The reduction in FYDP 
planned CV procurement quantities was based on increased projected 
costs and fiscal constraints, and the DoN emphasis on procuring F-35 
STOVLs to help address USMC near term strike fighter shortfalls. 
Returning Navy IOC to 2013 is not possible based on LRIP IV delivering 
in 2012. Accelerating Navy IOC to 2014 would require LRIP IV and V 
additional procurement of approximately six CVs, which are not 
budgeted. The DoN has included the purchase of an additional 28 F/A-
18E/Fs in FY 2010-2012 to help mitigate the shortfall.
    Mr. Abercrombie. The Navy now plans 84 EA-18Gs, a decrease of 6 
from last year. Could the Navy increase its procurement of EA-18Gs to 
help address Air Force shortfalls in electronic attack? Are you 
discussing this situation with the Air Force?
    Admiral Clingan. The Navy is executing its program of record as 
laid out in POM04 to replace carrier-based EA-6Bs with the EA-18Gs by 
2009. The initial aircraft inventory objective was for 90 aircraft. 
Based on Productive Ratio Aircraft Entitlement and the expectation that 
Air Force expeditionary Airborne Electronic Attack (AEA) would be 
funded, the Navy reduced the EA-18G inventory objective from 90 carrier 
based aircraft to 84 carrier based aircraft.
    The Air Force has not indicated a requirement for the Navy to 
support Air Force expeditionary AEA. Should the Air Force require Navy 
AEA support for expeditionary AEA, additional funds would be required 
to procure EA-18Gs since this requirement is above the Navy's current 
program of record.
    The Navy and the Air Force continue to work toward a solution to 
mitigate AEA risk until the Air Force can field an expeditionary AEA 
capability.
    Mr. Abercrombie. IDA makes the point that commercial buyers of 
engines include engine operations and support cost metrics in their 
original procurement selection criteria. IDA further indicates ``DOD 
has little experience in integrating procurement and operations and 
support costs in competitions.'' Given the billions of dollars that DOD 
spends on engine procurement and operations and support, why do you 
think that is and should OSD and the military services incorporate 
operations and support costs in competitions?
    Admiral Clingan. The Department of Defense does consider operations 
and support costs in competitions. Specifically, O&S costs are embedded 
in the source selection process and are included in the weighting of 
proposals under the cost parameter.
    O&S cost considerations, to include reliability/maintainability 
performance parameters, are always considered in program decision 
making given the significant percentage of life cycle costs incurred 
after production/delivery of the product. The difficulty resides in the 
Department's ability to accurately forecast the life cycle costs of a 
particular program early in the decision-making process vis a vis 
source selection. Uncertainty and variability in engine and platform 
utilization rates, operating environments, inherent system reliability, 
and sustainment strategies over the extensive life cycle of a weapon 
system make it difficult for either industry or DOD to fully integrate 
O&S cost into procurement selection decisions for military items.
    It is also important to note that DOD and the commercial sector 
face dramatically different conditions and requirements when sourcing 
equipment and services. Most commercial firms get a satisfactory 
outcome because they specify only one or a small number of performance 
requirements, which allow engine manufacturers wide latitude in 
determining an optimum mix of investment for design, manufacturing and 
support. DOD requirements are often more numerous, complex and 
stringent for aircraft, which reduces contractual flexibility.
    Finally, while supportability is factored into engine procurement 
competitions, DOD must also address Core/Title-10 and self-sustainment 
considerations for the selected solution.
    Mr. Abercrombie. Last year, the UH-1Y/AI-I-1Z program submitted a 
budget request for the procurement of 18 helicopters, but the 
contractor was capable of producing only 11. This year, the budget 
request includes $519 million for helicopters and the FY 2008 GWOT 
request includes $123 million for 6 helicopters. That's a ramp from 11 
to 26. Is the contractor capable of executing this ramp given the 
problems with this program and the Army's ARH program?
    General Castellaw. The H-1 Upgrades PB08 supports 11 aircraft (9 
UH-lY/2 AH-1Z) in FY07 and ramp to 20 aircraft (15 UH-1Y/5 AH-1Z) in 
FY08 at Full Rate Production (FRP) Decision. Both the UH-lY and the AH-
1Z production lines are operating under capacity, and would be able to 
produce the additional aircraft. The program office would recommend a 
mix that would include additional AH-1Zs to optimize the AH-1Z 
production line throughput.
    Mr. Abercrombie. The Navy's FY 2007 Supplemental request includes 
$50 million for non-recurring engineering. If that request is 
disapproved, will the UH-1Y/AH-1Z program be able to execute the 
increase in procurement from 11 to 26 helicopters in FY 2008?
    General Castellaw. If the request is disapproved, UH-1Y/AH-1Z 
procurement will be unaffected. (The $50M has no impact on the ability 
to produce UH-1Y and AH-1Z aircraft.) However, the AH-1Z production 
strategy will be affected. If the request for $50M is disapproved, 
near-term AH-1Z procurement will be sourced from remanufactured AH-1Ws 
which will cause a significant drain on the number of attack 
helicopters currently supporting combat operations. The $50 million 
will fund non-recurring engineering for an AH-1Z ``build new'' 
production strategy, which will mitigate the operational risk of 
pulling operational AH-1Ws from the Fleet until enough AH-1Zs are 
available to sustain the full complement of attack helicopters required 
by the Marine Corps. The ``build new'' will also provide the ability to 
replace attrition aircraft over the life of the program and maintain 
sufficient numbers of aircraft in the fleet squadrons.
    Mr. Abercrombie. Does the prime contractor's poor performance on 
the UH-1Y/AH-1Z program have any affect on their ability to produce V-
22 aircraft?
    General Castellaw. Bell Helicopter and Boeing IDS are a Joint 
Venture for the V-22 Program. Bell Helicopter's performance on the UH-
1Y/AH-1Z program has had minimal affect on their ability to produce V-
22 aircraft to date. Recent leadership changes at Bell Helicopter have 
instilled renewed confidence in the H-1 Upgrades Program. USMC has 
confidence that Bell has turned the corner with the H-1 Upgrades 
Program and will be able to maintain satisfactory performance on the V-
22 Program.
    Mr. Abercrombie. IDA makes the point that commercial buyers of 
engines include engine operations and support cost metrics in their 
original procurement selection criteria. IDA further indicates ``DOD 
has little experience in integrating procurement and operations and 
support costs in competitions.'' Given the billions of dollars that DOD 
spends on engine procurement and operations and support, why do you 
think that is and should OSD and the military services incorporate 
operations and support costs in competitions?
    General Castellaw. The Department of Defense and the commercial 
sector face different conditions and requirements when bidding for 
equipment and services. Most commercial firms achieve satisfactory 
outcomes because they specify only one or a small number of performance 
requirements. This allows engine manufacturers wide latitude in 
determining an optimum mix of investment for design, manufacturing and 
support.
    Conversely, the Department's requirements are often more numerous, 
complex and stringent for aircraft, which reduces contractual 
flexibility. Additionally, the Department lacks flexibility in the 
budget and appropriations process to transfer or combine ``colors of 
money'' between development, procurement, and operations, further 
limiting contract flexibility.
    The CAIG found that in the Department's limited experience with 
Performance Based Logistics contracts, they resulted in increased 
operational availability, but no cost savings.
    Uncertainty and variability in engine and platform utilization 
rates, operating environments, inherent system reliability, and 
sustainment strategies over the extensive life cycle of a weapon system 
make it difficult for either industry or DOD to fully integrate O&S 
cost into procurement selection decisions for military items. However, 
OSD and the military services should, and often do, incorporate O&S 
costs in program decision making given the significant percentage of 
life cycle costs incurred after production/delivery of the product.
    Mr. Abercrombie. B-2 Radar Frequency--The subcommittee understands 
that the B-2 is undergoing a $1.4 billion upgrade to relocate the B-2 
radar frequency because it is not the primary user of that frequency. 
Can you provide the subcommittee background of how the original 
frequency was chosen and what occurred between development and now to 
require the B-2 to change radar frequencies?
    General Chandler. Initially, the B-2 radar frequency was allocated 
due to its infrequent and improbable use by other users. Over the last 
20 years growing worldwide demand for radio frequency spectrum 
bandwidth led the World Radio Conference to a series of more specific 
user frequency allocations that will populate the band with competing 
``primary'' users. The frequency band used by the B-2 radar has 
subsequently been re-allocated to a different primary user. This places 
the B-2 as a secondary user. A secondary user operates on a non-
interference basis and is subject to penalties for interfering with 
primary users. This allocation change eliminates the B-2s ability to 
operate its current radar frequency in a training environment.
    Mr. Abercrombie. How serious is the aft deck cracking of the B-2 
and is it still possible to meet its service life of 20,000 hours based 
on this issue?
    General Chandler. Cracks are a serious problem as the aft decks are 
the load-carrying structure of the airframe and critical to maintaining 
Low Observable (LO) capability. Considerable engineering time and 
effort is being spent to mitigate and resolve all known deficiencies 
through a comprehensive three pronged approach, to ensure the B-2 can 
reach 20,000 hours. First, we are reinforcing the deck and surrounding 
structure with doublers and stiffeners to slow crack growth. Second, we 
are redesigning the aft deck assembly to reduce susceptibility to 
cracking. Finally, we are qualifying new repair technologies and 
investigating research opportunities for LO-compatible crack repairs.
    Mr. Abercrombie. Last year the Air Force wanted to retire 38 B-52s 
in fiscal year 2007 and fiscal year 2008, but the committee restricted 
retirement to 18 aircraft based on not being able to meet conventional 
strike requirements for the regional combatant commanders for 2 
simultaneous major combat operations without assuming a high 
operational risk. Has anything changed within the last year that would 
permit retirement of more than 18 aircraft until the Next Generation 
Bomber is fielded in 2018?
    General Chandler. There has been no significant change to the 
combatant commanders' conventional strike requirements or the overall 
security environment within the last year. However, the Air Force has 
been moving forward to enhance its Long Range Strike capability by 
implementing a comprehensive three-phased strategy which addresses 
near-term issues and prepares for future operational needs.
    Phase I of this strategy is to modernize the remaining legacy 
bomber force. The B-1, B-2 and B-52 will undergo upgrades focused on 
sustainability, lethality, responsiveness, and survivability that 
enhance their capabilities to provide combat power for the COCOM. For 
instance, in PB08 (FY08-FY13) the B-52 has the following enhancements 
programmed: Avionics Midlife Improvement (AMI), Advanced Weapons 
Integration (AWI), Combat Network Communication Technology (CONECT), 
Electronic Countermeasures Improvement (ECMI), and Miniature Air 
Launched Decoys (MALD). These upgrades will allow the B-52 to carry and 
employ the LITENING II advanced targeting pod, rapidly re-target J-
series weapons in-flight, increase communications capability and 
connectivity, and provide enhanced capability against enemy threat 
systems. As well, the B-1 and B-2 are programmed to receive similar 
upgrades that will result in increasingly capable aircraft. In the 
near-term, the Air Force will present a more capable bomber force to 
the combatant commanders for their employment.
    This modernized legacy bomber force will serve to mitigate the risk 
until Phase II of our Long Range Strike strategy fields the next 
generation bomber in 2018. Additionally, the Bomber Force Structure 
Study directed by Congress to be accomplished by the Institute for 
Defense Analyses is underway and we expect initial findings to be 
available by August 2007.
    Mr. Abercrombie. The Air Force budget request wants to maintain a 
fleet of 44 combat coded aircraft using only 56 total aircraft. In the 
past, the Air Force has needed 76 aircraft to meet a fleet of 44 combat 
coded, and the Air Force is prohibited maintaining less than 76 
aircraft under current law. How does the Air Force plan to meet a 
requirement of 44 combat coded aircraft with only a fleet of 56 total 
aircraft in the inventory? What will you do with the other 20 aircraft?
    General Chandler. The Air Force is requesting to reduce the number 
of B-52s in order to divest legacy aircraft for the purpose of 
modernization and recapitalization. The Air Force's Air Combat Command 
(ACC) has stated that they can provide 44 combat coded aircraft with 56 
bombers. There has been no significant change to the combatant 
commanders' conventional strike requirements or the overall security 
environment within the last year. With a reduced B-52 force, the Air 
Force would still retain the ability to meet any COCOM requirement from 
a total force perspective. The bomber's ability to swing from one AOR 
to another and the ability to introduce different force structures to 
provide the same effect will allow the Air Force to provide the forces 
to the COCOM required to meet their requirements.
    The FY08 PB includes the planned retirement of 20 B-52s in FY08. 
The Fiscal Year 2007 National Defense Authorization Act (NDAA) language 
limited the AF to retiring not more than 18 B-52s and maintaining 44 B-
52s as Combat Coded. To remain in compliance with NDAA 07 language 
while maintaining 56 aircraft Total Aircraft Inventory (TAI), the Air 
Force will place the 20 aircraft in XJ Status, which is defined in AFI 
21-103 as being excess to requirements and awaiting disposition 
instructions. Additionally, the Air Force will maintain the aircraft in 
a serviceable condition.
    Mr. Abercrombie. The Navy has informed the committee of a strike 
fighter shortfall beginning as early as 2010. Does the Air Force have 
any similar concerns about shortfalls in its strike fighter inventory?
    General Chandler. The AF has a critical need to recapitalize its 
fighter/attack forces. Joint analysis from the 2006 QDR reported that 
demand for AF Fighter/Attack assets will be higher than the force 
structure produced in our projected resource-constrained plans. The 
bottom-line: the AF has a concern in FY17 and beyond that we will have 
insufficient resources to field required capabilities, and be forced to 
execute costly Service Life Extension Programs (SLEPs) to maintain an 
aging fighter/attack inventory. The AF is currently conducting that 
will provide more definitive answers.
    Mr. Abercrombie. The Air Force and the Navy have had a long-
standing Memorandum of Agreement (MOA) that provides EA-6B assets to 
the Air Force for training and operational requirements. As the Navy 
continues with its plans to retire the EA-6B by year 2011, how will 
this retirement affect the Air Force meeting its electronic attack 
requirements?
    General Chandler. The current EA-6B support Memorandum of Agreement 
(MOA) states that ``Navy expeditionary EA-6B squadrons will 
decommission between FY2009 and FY2012, replaced by indigenous USAF 
Electronic Attack (EA) capability.'' The USAF will not be able to 
provide a Stand-off jamming capability by FY 2012. This situation will 
be discussed at the 2007 Navy/Air Force Senior Leader Talks. However, 
EA-6B/EA-18G capabilities will not meet the Air Force's 2012 Airborne 
Electronic Attack (AEA) requirements.
    Mr. Abercrombie. Do you intend to enter into a similar MOA with 
regard to service sharing the EA-18G? If not, how do you intend to fill 
the capability gap generated by the EA-6B retirements?
    General Chandler. Due to the fact that the Air Force will be unable 
to provide a Stand-off jamming capability by 2012, this situation will 
be discussed at the 2007 Navy/Air Force Senior Leader Talks in order to 
mitigate the resulting risks.
    Mr. Abercrombie. It is my understanding that the MALD and MALD-
Jammer are air-launched, non-recoverable vehicles that are programmed 
with mission data before launch. Can you reprogram these assets, change 
jamming frequencies, or turn off the jammer if required after launch? 
If not, is this a reasonable design approach?
    General Chandler. MALD-J cannot be reprogrammed after launch; 
however it encompasses technological characteristics that allow it to 
effectively accomplish its stated mission. These characteristics 
include the ability to:

        1.  Utilize Radio Frequency (RF) signal discrimination in order 
        to only affect prioritized enemy signals.

        2.  Perform reactive jamming in response to prioritized 
        signals.

        3.  Employ low power in order to apply ``smart'' jamming 
        techniques.

        4.  Operate in lead of friendly forces in the anti-access 
        environment.

    This is a reasonable design approach in order to provide an 
affordable, expendable, stand-in jammer capability.
    Mr. Abercrombie. IDA makes the point that commercial buyers of 
engines include engine operations and support cost metrics in their 
original procurement selection criteria. IDA further indicates DOD has 
little experience in integrating procurement and operations and support 
costs in competitions. Given the billions of dollars that DOD spends on 
engine procurement and operations and support, why do you think that is 
and should OSD and the military services incorporate operations and 
support costs in competitions?
    General Chandler. The military services incorporate operations and 
support cost considerations into major acquisitions in accordance with 
Title 10 USC 2434, and Title 10 USC 2464. However, the accuracy of such 
estimates is directly dependent on the maturity of the technology 
involved.
    With regard to the consideration for the incorporation of support 
costs into the procurement process for the purpose of competitions, the 
following factors are considered:

        1)  Procurement Management is required to base major decisions 
        on system-wide analyses and the lifecycle of those decisions on 
        system performance and affordability. Examples of these 
        analyses are the business cases and cost estimates that support 
        the acquisition (i.e., affordability assessments, analyses of 
        alternatives, cost-performance trades, and iterative 
        establishment of program cost goals). The refined, detailed, 
        and discrete lifecycle cost estimates used within the program 
        office should support internal, program office decision making 
        such as the evaluation of engineering changes or in competitive 
        source selections. Depot Source of Repair (DSOR) decisions are 
        another major input into Program Management assessments, along 
        with tech data requirements, support equipment, and other 
        factors. DSOR decision considers core workload and the 
        limitations on contractor repair directed in Title 10.

        2)  A system's ability, regardless of the application of design 
        for sustainment, will suffer varying stresses during the actual 
        operational deployment and use. The latter is especially true 
        in the case of immature systems because the conceived 
        operational environment may dramatically differ from the actual 
        environment/ops tempo initially projected.

        3)  In the case of engines specifically, the data concerning 
        operations and support cost may not be available or conceived 
        in a military use even though it may be accurate for commercial 
        products operating in a commercial atmosphere. The Air Force 
        uses best available cost estimates when preparing the DSOR 
        package and analyses. Another factor for consideration is the 
        degree that engine specific operation and support cost is 
        considered when that engine is procured as a subcomponent to a 
        larger system, i.e., C-17, or Global Hawk (RQ-4).

    Mr. Abercrombie. From your perspective, do you believe the 
Department of Defense should proceed with an alternate engine program 
for the Joint Strike Fighter?
    General Hoffman. The Air Force supports DOD's decision to manage 
the risk with a single engine supplier as the best use of available 
resources. Subsequent to the decision, Congress directed three studies. 
One of these studies determined that 8.8 billion in constant FY06 
dollars would be required for a second engine and that offsetting this 
amount through procurement savings from competition appeared 
implausible. A combination of savings from procurement and operations 
and support (O&S) would be necessary to offset the $8.8 billion cost of 
a second engine supplier. Because the Department of Defense has not 
typically linked procurement and O&S costs in a single competition, the 
study found no historical data with which to estimate plausible O&S 
savings under such an acquisition strategy. The study did assess, 
however, that competition can be expected to bring non-financial 
benefits in the form of fleet readiness, contractor responsiveness, and 
industrial base robustness.
    Mr. Abercrombie. How long do you anticipate the CSAR-X program will 
be delayed to address these GAO concerns?
    General Hoffman. A schedule impact is anticipated, but we will not 
know the full extent of it until the Air Force issues an RFP amendment, 
conducts discussions with the offerors and completes an integrated Best 
Value assessment of the proposals.
    Mr. Abercrombie. Give the long development cycle of most major 
acquisition programs incorporating new technologies into weapons 
platforms, will the technology being integrated into the Next 
Generation Bomber be mature enough to meet an Initial Operational 
Capability of 2018 . . . only 11 years from now?
    General Hoffman. Yes. In order to field the Next Generation Bomber 
in 2018, it is imperative to leverage and incorporate mature 
technologies. Technology maturity, both in terms of Technology 
Readiness Levels (TRL) and demonstrated Technology Integration 
Readiness, was explicitly assessed throughout the concept definition 
efforts supporting the Next Generation Long Range Strike Analysis of 
Alternatives. Technology maturity informed the risk ratings assigned to 
all technologies, the technology development strategy, and the 
potential future acquisition increments which would incorporate 
technology deemed not mature enough for 2018 fielding. We only plan to 
take forward those technologies that are at TRL6 by FY09.
    Mr. Abercrombie. Regarding the F-22, what is the schedule for 
accomplishing the Secretary of Defense certification on cost savings, 
and signing the F-22 multiyear contract that was authorized in last 
year's authorization bill?
    General Hoffman. The Under Secretary of Defense for Acquisition, 
Technology and Logistics and his staff are working very closely with 
the Air Force on all of the requirements which must be satisfied before 
award of the F-22A multiyear procurement (MYP) contracts. We are 
currently on track to complete contract negotiations and make the 
certifications, required by Section 134 of the Fiscal Year 2007 
National Defense Authorization Act, in July 2007 to permit contract 
award in August 2007. The Act also requires the Secretary provide for a 
new federally funded research and development center cost report on the 
MYP savings to be submitted no later than 30 days prior to contract 
award. The Department commissioned RAND to complete the required 
report, which is on schedule to be delivered in July 2007.
    Mr. Abercrombie. The B-52 Stand-off Jammer program was cancelled 
last year when it was deemed unaffordable as cost estimates came in at 
near $7 billion. In light of this, what are the estimated costs for the 
Core Component Jammer program? What has changed, other than the name, 
to insure affordability of this program?
    General Hoffman. The estimated cost of the Core Component Jammer 
(CCJ) program is approximately $1.4B-$1.8B within the FYDP and $3.8B 
overall. There are three main reasons why the CCJ program is more 
affordable than the B-52 Stand-off Jammer (SOJ) program: reduced 
procurement quantities, narrowing of frequency jamming coverage, and 
maturing receiver technology. The CCJ program plans to modify 30 
aircraft and build 24 jamming shipsets (48 pods), whereas the B-52 SOJ 
program planned to modify 76 aircraft and build 40 jamming shipsets (80 
pods). After the termination of SOJ, we continued to refine the 
requirements analysis. This allowed us to reduce the number of aircraft 
modifications and shipsets. B-52 SOJ included a low, mid, and high band 
jamming capability. CCJ will have room for growth; however, it will 
initially concentrate on a low and mid band jamming capability. 
Finally, the B-52 SOJ planned to compete and develop a new receiver 
while CCJ leverages USN EA-18G development by using a version of the 
ALQ-218 receiver.
                                 ______
                                 
                   QUESTIONS SUBMITTED BY MR. TAYLOR

    Mr. Taylor. Is there anything in the present contracts for the 
Joint Strike Fighter engines that would preclude the government from 
allowing one contractor to produce another contractor's design?
    Mr. Sullivan. According to the Office of the Secretary of Defense 
and the Joint Strike Fighter program office, some of the government's 
rights to engine technical data are limited and may preclude a strategy 
where one contractor produces another contractor's design. As both 
contractors used their own independent research and development funding 
to support portions of the engine designs, the government is restricted 
(per the relevant Defense Federal Acquisition Regulation Supplement 
incorporated into the contracts) in its use, release, or disclosure of 
some technical data for the Joint Strike Fighter engines. Unless the 
government is able to negotiate another arrangement, which is likely to 
be cost prohibitive, the contractors could deny the government the 
ability to transfer technical data to another source for production.
                                 ______
                                 
                   QUESTIONS SUBMITTED BY MR. LARSEN

    Mr. Larsen. The Navy is the only service that has a clear, long-
term plan for joint AEA. The USAF will not have a Stand Off Jammer 
(SOJ) capability by 2012. The USMC is investing in ICAP III Prowlers 
for the near-term, but they still haven't decided what their ``next-
generation'' EW platform will be. I expect that there will be a 
significant capability gap in 2012, and it will significantly impact 
our ability to execute our mission. If the USAF does not have an SOJ 
capability, how does that affect the Navy's ALA mission, especially 
against air defense systems? In other words, how much does the Navy 
need a next generation SOJ to fulfill mission requirements?
    Mr. Balderson and Admiral Clingan. Cancellation of the B-52 SOJ 
does not directly impact the Navy's AEA mission. The EA-18G is part of 
the carrier air wing/carrier strike group. The carrier strike group 
supports the joint fight. As part of the carrier strike group, the Navy 
provides its own AEA support with the EA-18G. The Air Force SOJ was 
intended to support long range global strike requirements. In this 
role, the B-52 SOJ contributed to its portion of the AEA system of 
systems. SOJ is complementary to Navy strike AEA.
    Mr. Larsen. Could more EA-18G Growlers fill the capability gap 
created by the SOJ's demise? Could the right technology, with the right 
people and the right number of EA-18Gs do the job?
    Mr. Balderson and Admiral Clingan. The EA-18G is planned to replace 
carrier based EA-6Bs. There are no plans to replace Navy expeditionary 
EA-6Bs. Any tasking to fill a gap as a result of the B-52 SOJ demise 
will be above current program of record and planned utilization of the 
EA-18G force structure. The Air Force is exploring the Core Component 
Jammer (CCJ) as the alternative to SOJ as it replacement. The Air Force 
has not requested that the Navy provide support for Air Force 
expeditionary AEA beyond 2012. Any additional requirements beyond the 
Navy's current program of record will require coordination with the Air 
Force, in order to identify all mission requirements, and appropriate 
increases in funding.
    Mr. Larsen. Hypothetically, what if the Navy is the only service in 
2012 with stand-off/support jamming capability? Assuming that the Navy 
will need more than 90 aircraft, how many will they need, and when does 
the Navy need to know to ensure enough Growlers are operational in 
time?
    Mr. Balderson and Admiral Clingan. To replace the three-squadron 
Navy expeditionary force with EA-18Gs would require 22 aircraft. This 
would be above the Navy's current program of record and would require 
additional procurement funds as well as operational and support 
funding.
    Mr. Larsen. Once the Joint Strike Fighter (JSF) comes on line, will 
there be a plan to keep the Growler community separate and distinct 
from the JSF community? Will there be an emphasis on maintaining core, 
centralized LW expertise at the various service levels?
    Mr. Balderson and Admiral Clingan. The EA-18G Growler community 
will remain as a distinct community for the foreseeable future. 
Airborne Electronic Attack will remain a core capability within the 
Navy that is required to support the strike mission, inclusive of the 
JSF.
    Mr. Larsen. The Navy requirement of 90 Growlers does not provide 
for a reserve squadron. The Navy Reserve squadron will be deactivated 
along with the expeditionary squadrons in 2012. What is the rationale 
for this decision? Will it negatively affect training or readiness?
    Mr. Balderson and Admiral Clingan. The Navy is completely divesting 
the EA-6B. To keep a single Navy squadron of EA-6Bs would be cost 
prohibitive. There is no impact to training or readiness as a result of 
disestablishing the reserve EA-6B squadron. Each carrier air wing will 
have an associated EA-18G squadron to meet operational requirements.
    Mr. Larsen. The GAO has expressed some concerns about the Growler 
vs. the ICAP III Prowler. What is the capability ratio between ICAP III 
Prowlers and Growlers? 1:1? What is the comparison between the two in 
terms of Service life and O&M/cost per flight hour?
    Mr. Balderson and Admiral Clingan. The EA-18G platform provides 
capabilities exceeding those in the EA-6B. The Growler has nine 
available weapons stations for carriage of ALQ-99 pods, fuel, HARM, and 
AIM-120 missiles. The EA-6B has no air-to-air capability and only five 
stations for its stores, requiring a trade-off of electronic attack 
capability when carrying HARM. The Growler has greater aircraft carrier 
launch and landing weights than the EA-6B that permit it to carry the 
additional payload. Airborne, the Growler is faster and more 
maneuverable. Growler's F/A-18F heritage (i.e. common avionics, 
sensors, and flight characteristics) enhances integration with the 
strike force in an escort mission, increasing probability of mission 
success. The Growler is also more survivable than the EA-6B, as it 
possesses a lower radar signature, improved defensive countermeasures, 
and greater agility to evade threats from the air and ground.
    In terms of service life the EA-6B is approaching its end and will 
not be capable of supporting existing AEA force structure by 2015. The 
EA-18G will IOC in 2009 and will have a full service life ahead of it.
    Cost per flight hour on the EA-18G is approximately $5,000 less 
than that of the Prowler. Finally, the EA-18G is 85% common with the F/
A-18F, which provides additional cost savings, as opposed to operating 
two separate aircraft models.
    Mr. Larsen. Who strategically looks at our EW requirements at the 
Joint Staff level and pushes the services to maintain joint EW 
capability? Is there a flag officer tasked with keeping joint ABA 
together?
    Mr. Balderson and Admiral Clingan. It would be inappropriate for me 
as the Deputy Assistant Secretary of the Navy for Air Programs, or for 
RADM Bruce Clingan, Director, Air Warfare, to attempt to articulate 
Joint Staff requirements process. We recommend that this question for 
the record should be referred to the Joint Staff Joint Capabilities 
Division J-8, for a response.
    Mr. Larsen. What role do combatant commanders have on influencing 
joint AEA within the Joint staff?
    Mr. Balderson and Admiral Clingan. It would be inappropriate for me 
as the Deputy Assistant Secretary of the Navy for Air Programs, or for 
RADM Bruce Clingan, Director, Air Warfare, to attempt to articulate 
COCOM relationships with the Joint Staff. This question for the record 
should be referred to the Joint Staff's Joint Capabilities Division J-
8, for a response. Navy remains informed by the COCOM's demand signal 
for capabilities inherent within existing designs for AEA procurement.
    Mr. Larsen. The Growler requirement stands at 90 aircraft. Last 
year, 4 were cut by Congress from the FY07 budget and then the Navy cut 
6 more for its program of record which is now down to only 80. Given 
the alarming joint AEA capability gap 2012 and beyond, how is the Navy 
going to get back up to its requirement of 90 aircraft across the FYDP?
    Mr. Balderson. Based on Productive Ratio Aircraft Entitlement and 
the expectation that Air Force expeditionary Airborne Electronic Attack 
(AEA) would be funded, the Navy reduced the EA-18G inventory objective 
from 90 carrier based aircraft to 84 carrier based aircraft. Congress 
swapped four EA-18Gs for four F/A-18E/Fs in FY07. As a result of the 
swap, EA-18G inventory was reduced to 80. The Navy's inventory 
objective remains 84. The Navy intends to address the four additional 
aircraft during the PR-09 process.
    Mr. Larsen. How many flight hours have ICAP III Prowlers logged in 
the GWOT? What is current month estimate?
    Admiral Clingan. Since reaching Initial Operational Capability 
(IOC) in December 2005, ICAP III Prowlers have logged 3,740 flight 
hours in the GWOT. As of April 20, 2007, the current estimate of ICAP 
III flight hours logged for the month of April 2007 is expected to 
reach a total 400 for the 10 ICAP III aircraft that are active.
    Mr. Larsen. How does the op tempo of ICAP III Prowlers effect 
Prowler sustainment in the near-term and long-term (especially if they 
will be called upon in service until possibly 2019)?
    Admiral Clingan. Current op tempo of ICAP III Prowlers is 
sustainable for the near-term. The 10 operational ICAP III Prowlers 
will be supplemented with 5 additional aircraft by the end of FY08. 
Those 15 ICAP III systems will be mixed with less capable ICAP II 
Prowlers unless the FY07 and FY08 supplemental funds are provided to 
acquire 7 and 10 additional ICAP III installations respectively.
    Long term efforts will require additional readiness investment to 
facilitate cost-wise readiness improvement initiatives. These 
initiatives have proven very effective at staving off a steady decay in 
aircraft availability since 2004, yielding a 6% improvement in 
operational availability. Additionally, as Navy transitions to the EA-
18G, they will select ``best of breed'' aircraft for Marine Corps use; 
parts from aircraft taken out of the inventory will be introduced into 
the supply system as part of the long term sustainment strategy.
                                 ______
                                 
                  QUESTIONS SUBMITTED BY MS. GIFFORDS

    Ms. Giffords. The Air Force budget submission for FY08 requests 
$69.2 million for the A-10 Wing Replacement Program. However, the Air 
Force's Unfunded Priority List includes an additional S37.5 million for 
Fiscal Year 2008, to purchase six additional wings. Close Air Support 
is one of the Air Force's most important combat missions in Iraq and 
Afghanistan. What degree of risk does slowing the rate of A-10 
recapitalization create for the readiness of the A-10 fleet and the 
Close Air Support mission in Iraq and Afghanistan?
    General Chandler. The FY08 President's Budget leaves as many as 24 
aircraft at risk of grounding in FY11. Funds have been requested in 
FY07 Global War on Terror (GWOT) and FY08 Unfunded Priority List (UPL) 
to address the A-10 wing modification and repair. This is expected to 
reduce grounding by approx 50%. The risk of not accelerating the wing 
replacement (FY07 GWOT + FY08 UPL) could ground an estimated 5% of the 
fleet; increase hours on flyable aircraft which in turn could 
accelerate further grounding of a key GWOT asset; limits assets for 
test and training during AEF reconstitution; and potentially increases 
Ops Tempo of other units.
    Ms. Giffords. Senior Air Force officials have recently proposed the 
creation of a lead UAV agency within DOD. The proliferation of Army 
UAVs has given commanders in the field more options and greater 
flexibility. What would be the overall positive or negative impact on 
Army UAV programs if such an office were created?
    General Mundt. The impact would be NEGATIVE. Dedicated, responsive 
availability of Unmanned Aircraft Systems (UAS) to the tactical 
commander would be reduced. The importance of dedicated UAS for Land 
Forces cannot be overstated. Today, the Army sees a direct application 
of UAVs in most combat arms. Army Centers of Excellence in Infantry, 
Aviation, Artillery, Signal and Intelligence, as the primary 
benefactors of UAVs, are currently developing detailed tactics, 
techniques, and procedures (TTPs) for their use. UASs will also be 
integrated into most other battlefield functions, including logistics 
missions such as emergency medical resupply and engineering operations. 
In this decade, the Army will rely on UASs as a cornerstone of network 
operations to provide the basis for its communications architecture. 
All of our experiences with UASs to date and analysis of future 
requirements reinforce the importance of this capability to Army forces 
of all echelons. All enemy attacks are no conducted by unconventional, 
insurgent, small units with little or no warning--with their reduced 
footprint insurgent attacks are very difficult to predict. As such, as 
a force protection asset, dedicated immediate response, UAS 
availability must be assured. Because of their critical importance and 
level of responsiveness demanded by close combat maneuvers, the 
commander's requirement to directly control their use is non-
negotiable--this is the consistent feedback from the warfighting 
commanders now.
    Ms. Giffords. What are the fundamental similarities and differences 
between the UAV requirements as defined by the Army and the Air Force?
    General Mundt. The Army's Unmanned Aircraft System (UAS) 
requirements cannot be fully satisfied by the Air Force alternate 
proposal. The Air Force would create a single purpose full motion video 
system using the Predator aircraft which does not meet the Army's 
concept of operations (CONOPS). The Air Force alternative would 
transfer the Army's investment in UAS to the Air Force. This organic 
capability within the division battlespace and the control over future 
system capabilities such as Weaponization and Communications Relay--are 
critical requirements for the tactical commander.
    Within the division tactical battlespace, the Army's multi-role 
(Intelligence, Surveillance, Reconnaissance, and Target Acquisition 
(ISR-TA), Communications Relay, Weapons, and Manned-Unmanned Teaming) 
UAS CONOPS fully meets the Joint Requirements Oversight Council (JROC) 
approved requirements. The Air Force alternative stitches together 
combinations of various systems such as the Predator A and Predator B 
with complex command and control inversely responsive to the tactical 
tempo. For example, after launch from local sites the aircraft would 
then be operated by a central operations command at Nellis AFB and 
Langley, VA. The Army's UAS provides an integrated capability 
deliberately linked to common personnel, training, qualifications, 
sensors, logistics, throughout the division battlespace. Furthermore, 
each Army UAS is inherently linked to the Army's other UAS (TUAV, SUAV, 
FCS Systems), manned aviation, ground mounted and dismounted Soldiers.
    The Air Force's precept of apportioned and allocated support is 
fundamentally counter to the Army's responsibility to close with and 
destroy the enemy. The Air Force definition of interdependence can be 
summarized as an Air Force owned, operated, allocated and apportioned 
capability determined by a mathematical model using the factors of 
priority and resource assignment. This concept is suitable for 
operational and strategic missions and unsuitable for tactical missions 
occurring in the close battle at the mounted and dismounted maneuver 
unit level.
    Ms. Giffords. Do you believe that there are sufficient 
opportunities for joint design and acquisition that justify the 
creation of a lead UAV agency for all of DOD?
    General Mundt. No. The Department of Defense (DOD) should continue 
on its present course of developing inclusive, synergistic strategies 
to exploit the Unmanned Aircraft System (UAS) capabilities of each 
Service. The Army, the Navy and the Marine Corps fully support the 
current process to determine the most functional and capable UAS 
platform to meet their operational and tactical needs. If all services 
would subscribe to this process, the maximum cost avoidance through 
shared, redundant collaborative engineering and design can be obtained. 
We need to preserve discussions regarding our shared objective to 
maximize combat power at the decisive point and time on the battlefield 
to ensure our military forces can conduct decisive and lethal 
operations. The Joint UAS (JUAS) Materiel Review Board and the JUAS 
Center of Excellence has and will continue to work and achieve the 
executive agency goals. With full support, these organizations will 
enable full joint service buy-in and resolution of issues. 
Additionally, to continue the research and development of UAS and meet 
the Department of Defense's UAS requirements, we must create an 
environment of competition within industry. Competition promotes 
innovation, challenges industry to achieve a higher level of 
technological achievement, and spurs investment. The Army, USN, USMC, 
and Special Operations Forces have all benefited from competitively 
selected solutions and are already sharing UAS training, logistics, and 
systems development in three formal programs. The Department of Defense 
should continue on its present course of developing inclusive, 
synergistic complementary capabilities to fuse the contributions of 
each Service.

                                  
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