[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]
[H.A.S.C. No. 110-169]
NAVY DESTROYER ACQUISITION PROGRAMS
__________
HEARING
BEFORE THE
SEAPOWER AND EXPEDITIONARY FORCES SUBCOMMITTEE
OF THE
COMMITTEE ON ARMED SERVICES
HOUSE OF REPRESENTATIVES
ONE HUNDRED TENTH CONGRESS
SECOND SESSION
__________
HEARING HELD
JULY 31, 2008
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SEAPOWER AND EXPEDITIONARY FORCES SUBCOMMITTEE
GENE TAYLOR, Mississippi, Chairman
NEIL ABERCROMBIE, Hawaii ROSCOE G. BARTLETT, Maryland
RICK LARSEN, Washington TERRY EVERETT, Alabama
MADELEINE Z. BORDALLO, Guam J. RANDY FORBES, Virginia
BRAD ELLSWORTH, Indiana JOE WILSON, South Carolina
JOE COURTNEY, Connecticut BILL SHUSTER, Pennsylvania
KIRSTEN E. GILLIBRAND, New York DOUG LAMBORN, Colorado
JOE SESTAK, Pennsylvania ROB WITTMAN, Virginia
Will Ebbs, Professional Staff Member
Jenness Simler, Professional Staff Member
Elizabeth Drummond, Staff Assistant
C O N T E N T S
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CHRONOLOGICAL LIST OF HEARINGS
2008
Page
Hearing:
Thursday, July 31, 2008, Navy Destroyer Acquisition Programs..... 1
Appendix:
Thursday, July 31, 2008.......................................... 57
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THURSDAY, JULY 31, 2008
NAVY DESTROYER ACQUISITION PROGRAMS
STATEMENTS PRESENTED BY MEMBERS OF CONGRESS
Bartlett, Hon. Roscoe G., a Representative from Maryland, Ranking
Member, Seapower and Expeditionary Forces Subcommittee......... 4
Taylor, Hon. Gene, a Representative from Mississippi, Chairman,
Seapower and Expeditionary Forces Subcommittee................. 1
WITNESSES
Francis, Paul L., Director, Acquisition and Sourcing Management,
U.S. Government Accountability Office.......................... 40
Labs, Dr. Eric J., Senior Analyst, Congressional Budget Office... 37
McCullough, Vice Adm. Barry, USN, Deputy Chief of Naval
Operations for Integration of Capabilities and Resources;
accompanied by Allison Stiller, Deputy Assistant Secretary of
the Navy, Ship Programs........................................ 6
O'Rourke, Ronald, Specialist in Naval Affairs, Congressional
Research Service............................................... 35
APPENDIX
Prepared Statements:
Francis, Paul L.............................................. 107
Labs, Dr. Eric J............................................. 93
McCullough, Vice Adm. Barry, joint with Allison Stiller...... 64
O'Rourke, Ronald............................................. 75
Taylor, Hon. Gene............................................ 61
Documents Submitted for the Record:
[There were no Documents submitted.]
Witness Responses to Questions Submitted During the Hearing:
Mr. Kennedy.................................................. 132
Mr. Langevin................................................. 131
Mr. Taylor................................................... 132
Mr. Taylor on behalf of Mr. Larsen........................... 131
Questions Submitted by Members Post Hearing:
[There were no Questions submitted post hearing.]
NAVY DESTROYER ACQUISITION PROGRAMS
----------
House of Representatives,
Committee on Armed Services,
Seapower and Expeditionary Forces Subcommittee,
Washington, DC, Thursday, July 31, 2008.
The subcommittee met, pursuant to call, at 10:00 a.m., in
room 2212, Rayburn House Office Building, Hon. Gene Taylor
(chairman of the subcommittee) presiding.
OPENING STATEMENT OF HON. GENE TAYLOR, A REPRESENTATIVE FROM
MISSISSIPPI, CHAIRMAN, SEAPOWER AND EXPEDITIONARY FORCES
SUBCOMMITTEE
Mr. Taylor. The hearing will come to order.
I want to welcome everyone and say this may be the most
important hearing this subcommittee has held since a year ago
January when we had the hearing on the procurement of mine-
resistant ambush protected vehicles.
I want to thank all of you for being here.
And because of the importance of this topic, the ranking
member and I have extended an invitation not only to our fellow
colleagues on the full committee and in the full House, but
also any Members of the Senate who wish to participate.
So, in accordance with the Rules of the House, I ask
unanimous consent for our colleagues to be able to participate
today.
Hearing no objection, our colleagues will participate in
regular order after all members of the subcommittee have had an
opportunity to ask questions. Because of time constraints and
the number of Members who wish to ask questions, the clerk will
maintain the five-minute clock during the question-and-answer
period for the members. We have been very fortunate, and I am
told we are not expecting any votes on the House floor for
about two hours, and so that works in our favor.
When Mr. Bartlett and I first called this hearing, the
purpose was to ensure that all the facts associated with the
capabilities and the procurement costs of the DDG 1000 and the
capabilities and the procurement costs of the DDG 51 were
discussed in an open session by a variety of expert witnesses.
We envisioned a hearing that would clear the air of rumor and
lay out all of the facts without championing any side of the
debate.
Much has changed since that time. Last week, the Secretary
of the Navy and the Chief of Naval Operations (CNO) announced
that they would stop the DDG 1000 destroyer class at two ships,
and restart the procurement of the DDG 51 class of destroyers.
They propose an additional eight ships in the five-year plan
beginning next year.
Predictably, this announcement from the Navy has generated
a fire storm. There are Members who are opposed to the
decision, and Members who support the decision. There also
appears to be significant efforts by some defense contractors
to shore up support for the DDG 1000 and Congress to overturn
the Navy's decision.
We still need to have this hearing to clear the air on
mission capabilities and cost for the two destroyer programs.
By now, I presume our Navy witness, particularly Vice
Admiral McCullough, who is a senior officer in the Navy charged
with developing future platforms and technologies, will attempt
to educate the committee on the reasons the Chief of Naval
Operations has decided that he can best support the interests
of national security with continuing the line of DDG 51 class
ships than he can with the small class of highly capable but
expensive DDG 1000s.
The committee was and remains concerned concerning the cost
estimates for the DDG 1000. But let us be perfectly clear, this
subcommittee did not recommend canceling the DDG 1000 program
as some in the press have said. This subcommittee did recommend
and the full House did adopt in May a pause for the third DDG
1000 while the development of technologies and the true cost of
construction became known. This subcommittee also recommended
allowing the option of returning to the DDG 51 class if the
Navy could prove it was in the best interest of our Nation. The
report accompanying our bill clearly states that the funding
provided in the Fiscal Year 2009 National Defense Authorization
Act could be used for either DDG 1000 advance procurement or
DDG 51 advance procurement.
I would like to make my position perfectly clear: I want
the Navy to have the finest, most capable fleet in the world. I
want the Navy to have a sufficient number of ships with the
capabilities needed to counter the next generation of threats.
I don't think we have enough submarines, and this
subcommittee has worked in a bipartisan manner to allow the
Navy to increase the production of submarines. My friends, Joe
Courtney of Connecticut and Rob Wittman of Virginia, were
instrumental in this effort.
I don't think we have enough amphibious assault ships for
our expeditionary forces, and with the support of Mr. Bartlett,
we have authorized an additional Amphibious Transport Dock Ship
(LPD) for the Navy's fleet.
And I don't think we have the correct balance in our
surface combatant force.
I understand the history of the DDG 1000. It grew out of
the DD 41 program and became the poster child for revolutionary
change of ship capabilities during the Rumsfeld era. The
question before this Congress is simple: Does this ship have
the correct capabilities that our Navy needs in the future?
Does our Navy ever envision shore-bombardment again? If not,
why design a ship which is sized for a gun that won't be used?
In this day of precision-guided munitions and air dominance,
the idea of a World War II style Naval bombardment needs to be
debated.
This leads us to DDG 51, without question, the finest
destroyer in the world today. A ship that is capable of
multiple missions, from anti-submarine warfare (ASW) to cruise
missile strike warfare to area air defense with its Aegis
weapon system, it is the premier workhorse of our fleet. And
perhaps most important, the ship is capable of serving in a
ballistic missile defense (BMD) role, which the DDG 1000 cannot
do. Again, I think this bears repeating: The DDG 51 is capable
of serving in a ballistic missile defense role; the DDG 1000 is
not.
Fifty-three of the DDG 51s are currently in the fleet. Nine
more are in various stages of construction. If the Navy wants
to build more of them, we need more information; information
not just about cost targets for new ships, but information on
the total concept of support for the entire fleet of
destroyers. The modernization program for destroyers is just as
important as the construction program. We can never allow the
decommissioning of ships, like we did with the first five Aegis
cruisers, because they could not be modernized to meet the new
threat. When a ship is retired at less than 30 years of age,
the Navy has failed and this Congress has failed in our
oversight. We can only get to a 300-ship Navy if we are
building at least 10 ships a year and we keep them in the fleet
for at least 30 years.
So this committee is interested in the DDG 51 modernization
program. We will also question why the Navy is not modernizing
these destroyers at a faster rate and doing the modernization
in construction shipyards which have the expertise and
experience to do major modifications.
We would like to know how we can use these technologies
developed in the DDG 1000 weapon system and propulsion, and
back fit them into the DDG 51s during modernization.
So we have a lot to discuss. Our Navy has a tough road
ahead. There are still some pretty large hurdles in Congress
that we will need to jump, and hopefully this hearing will
allow the Navy to explain their side of the issue.
We have two panels of experts today to walk us through all
of these issues. We are very fortunate to have Vice Admiral
McCullough give the subcommittee a brief tutorial of both
vessels at the beginning of his testimony. Members will also
find a side-by-side description of the ships in a memorandum
prepared by staff.
Our Nation needs to get this right. Our Nation needs to put
our Navy on a stable path of building ships and building them
at a time and cost as projected. Our shipyards and the
contractors who support them deserve to know what we expect
them to do and when we expect them to do it. But more
important, we need to give our Naval commanders the capability
they need to defeat all current and potential threats.
So I believe the debate needs to focus on the capabilities
of these ships, and I remind my colleagues and the public that
the numbers of ships itself is a significant capability. The
full Congress must weigh the capabilities of these ships, the
costs associated with these ships and the effects on the
Nation's national security industrial base when making the
final decisions whether to proceed or not to proceed in the
destroyer program.
I am very happy to acknowledge our first witnesses today.
The Secretary has truly sent his ``A'' team: Ms. Allison
Stiller, Deputy Assistant Secretary for Ship Programs in the
Office of the Assistant Secretary of the Navy for Research,
Development and Acquisition; and Vice Admiral Barry McCullough,
who is the Deputy Chief of Naval Operations for Integration of
Resources and Capabilities.
Our second panel also consists of witnesses well known to
this committee: Mr. Ron O'Rourke, who is the senior analyst in
Naval affairs with the Congressional Research Service; Dr. Eric
Labs, who conducts independent ship cost analyst with the
Congressional Budget Office; and Mr. Paul Francis, who heads
the Maritime Analysis Branch at the Government Accountability
Office.
I want to thank all of the witnesses for being with us
today, and I want thank the phenomenal staff that this
subcommittee has for helping get everybody here today and for
their work in preparing for this hearing.
I now want to recognize our very, very capable ranking
member, Mr. Bartlett.
[The prepared statement of Mr. Taylor can be found in the
Appendix on page 61.]
STATEMENT OF HON. ROSCOE G. BARTLETT, A REPRESENTATIVE FROM
MARYLAND, RANKING MEMBER, SEAPOWER AND EXPEDITIONARY FORCES
SUBCOMMITTEE
Mr. Bartlett. Thank you very much.
Good morning and welcome to both panels, Admiral
McCullough, Ms. Stiller; and on the second panel, Mr. O'Rourke,
Mr. Francis and Dr. Labs.
It is a pleasure to have you here with us today, and I am
sympathetic to the challenges you face.
For years now, in fact even up to a few months ago, the
Secretary and the CNO have sent you to testify before this
subcommittee to explain, and at times, to defend the Navy's
shipbuilding plan. In particular, we have long debated the
wisdom of developing the DDG 1000. But I understand, after
speaking to the CNO last week, that the Navy has finally come
to the conclusion that the Nation would be better served by
extending the DDG 51 production line and truncating the DDG
1000 line at two ships.
Now you have joined us with the daunting task of explaining
this about-face and the consequences of such a decision. It is
appropriate for Congress to question this decision and to
assume the role of devil's advocate to ensure that we do not
haphazardly embark on another deviation to the shipbuilding
plan. But I will tell you up front what I told the CNO, I for
one applaud this move.
The chairman and I have both said over and over that the
Navy will never achieve a 313-ship Navy without either top-line
relief or a significant change in the mix of platforms.
The Navy shipbuilding plan was based on several
assumptions, none of which were realistic. The Navy postulated
that, first, personnel costs would not increase because the
Navy's active end strength could be reduced. I will note this
has not proved true for any of the Navy's sister services.
Second, there would be no increase in operations and
maintenance accounts, but the price of fuel alone has
invalidated this assumption. Overall, DOD fuel expenditures
grew by 380 percent from 1997 to 2007, even though fuel
purchases only increased by 26 percent during this time frame.
Third, funding for research and development would be
reduced and stay low, in effect trading for today's
capabilities on the backs of tomorrow's sailors. But given the
challenges we have seen in developing technologies for many of
our current platforms, this, too, does not hold true.
And, fourthly, that shipbuilding funds would be protected
among the procurement accounts. One can argue that the Navy has
done this to a certain extent, but we have real shortages in
other areas, such as Naval aviation. Moreover, cost increases
within the shipbuilding accounts come at the expense of other
shipbuilding programs, as we have seen with the T-AKE (Dry
Cargo/Ammunition Ship), the Littoral Combat Ship (LCS) and LPD
17.
And fifthly, requirements in cost growth could be prevented
on future ships. Again, LCS has been a prime example of the
fallacy of this assumption.
Therefore, given that none of these assumptions have been
shown to be plausible, then the only other alternative is to
look at the mix of platforms. The DDG 1000 program is the
obvious first choice for reevaluation because it is the largest
and most expensive combatant we are building, and surface
combatants are the backbone of our battle force, and it is
undeniable that the costs for this program have grown. The
original Navy estimate for the fifth DDG(X) was between $1.06
billion and $1.23 billion. Now the Navy estimates it would cost
double that, approximately $2.3 billion.
Many independent analysts have cautioned about the
potential impacts to the Navy should the cost of the DDG 1000
continue to grow.
Some of our witnesses today are among that number, and I
will quote Bob Work from the Center for Strategic and Budgetary
Assessment who has stated, ``Indeed, even if the Navy's
optimistic ship cost estimates prove to be true, it seems
certain that the seven DDG 1000s and 19 CG(X)s will continue to
have inevitable disproportionate impacts on plans for the
future surface battle line and the larger 313-ship battle
fleet.''
Moreover, I repeatedly stated that a class of seven ships
is no class at all, but rather a technology demonstration
program on a massive scale. When I learned it was unlikely that
the DDG 1000 hull could be used in the CG(X) program, the
begrudging support I had for this program began to fade.
However, I will issue one note of caution. As we reevaluate
our platform mix, we must ensure that we choose platforms that
will optimize the capabilities of our fleet for the future
threat, not to fight yesterday's or today's wars.
We also do not want to artificially adjust the mix of hot
and multi-mission combatants and focus low-end mission ships
exclusively based on costs. In many respects, this is the
history of the convoluted DDG 21, DD(X), DDG 1000 program.
Consideration must be given to both the future operating
environment and to economics.
To that end, I want to hear more about the analysis the
Navy has done regarding future mission sets. If we do not build
five more DDG 1000s, what risk are we assuming? What will our
Navy not be able to do?
In the past, we have been told that the DDG 1000 will be
significantly more stealthy, which will be necessary for ship
self-defense and to improve the ship's land-attack mission. We
were also told that the Navy needed to reduce ship's manning.
DDG 1000 has an estimated crew size of less than half that of
the DDG 51. We were told that the introduction of an integrated
power system would improve ship survivability, reduce fuel
consumption, and open the door for a new directed energy
weapons systems.
What is to be the fate of these technologies and the
investments we have made? Are these factors no longer as
important as others?
There are many other issues than these to consider, but I
am eager to learn from our witnesses and give Members an
opportunity to ask questions.
I remind witnesses that we value and respect your opinions.
All we ask is you lay out the true warfighting requirements and
be clear about what risk we must accept with the funding
choices we will have to make.
Thank you, Mr. Chairman.
Mr. Taylor. Thank you, Mr. Bartlett.
Given the nature of today's hearing, that this is as much a
hearing as a tutorial from the Navy to this subcommittee, I am
going to recommend to the subcommittee that we waive the 5-
minute rule for our first two witnesses and allow them to speak
for 10 minutes and that for the additional speakers on the
second panel, that we give them 7 minutes.
So without objection, so ordered.
It is my understanding, Admiral, that you wish to speak for
both you and Ms. Stiller.
The Chair recognizes Admiral Barry McCullough for 10
minutes.
STATEMENT OF VICE ADM. BARRY MCCULLOUGH, USN, DEPUTY CHIEF OF
NAVAL OPERATIONS FOR INTEGRATION OF CAPABILITIES AND RESOURCES;
ACCOMPANIED BY ALLISON STILLER, DEPUTY ASSISTANT SECRETARY OF
THE NAVY, SHIP PROGRAMS
Admiral McCullough. Chairman Taylor, Ranking Member
Bartlett, and distinguished Members of Congress, I am honored
to appear before you with Ms. Stiller to discuss the Navy's
surface combatant plan.
I request our written testimony be entered into the record.
The Navy's plan to truncate the DDG 1000 program at two
ships and reopen the DDG 51 line best aligns our surface
combatant investment strategy to meet Navy and combatant
commander warfighting needs.
The reason for the change to the Navy's DDG plan is to
prioritize relevant combat capability. In this plan, the Navy
addresses the changing security environment, the dynamic
capability of the fleet, and provides for maximum stability for
the industrial base.
Modernizing the fleet's cruisers and destroyers and
executing an affordable shipbuilding plan are crucial to
constructing and maintaining a 313-ship Navy with the
capability and capacity to meet our country's global maritime
needs.
The new Navy plan is based on requirements and needed
warfighting capability and capacity. The first two DDG 1000s
will be completed as planned and additional DDG 51s included in
the Navy's shipbuilding program. This proposed decision has
acquisition and industrial base implications.
We face a growing proliferation of ballistic missiles and
anti-ship cruise missiles that demand greater integrated air
and missile defense capability. Anti-submarine warfare, anti-
ship cruise missiles, and theater ballistic missile gaps pose
increased risk to our forces. Non-state actors who in the past
have posed low-tech threats are expanding their reach with
improved high-end capabilities and advanced anti-ship cruise
missiles.
The revised DDG plan enhances ballistic missile defense,
integrated air and missile defense, and anti-submarine warfare
to crown our growing anti-access strategies. The demand from
combatant commanders is for ballistic missile defense,
integrated air and missile defense and anti-submarine warfare
best provided by DDG 51s and not the surface fire support
optimized in DDG 1000.
The Marine Corps supports the Navy's position on DDG 1000,
just as the Navy remains firmly committed to Marine Corps and
joint and combined force clearly stated surface-fires
requirements. These Naval surface fire requirements can be met
with existing precision strike capability from tactical
Tomahawk, improved aircraft delivered precision munitions, and
current surface combatants.
Additionally, the Navy is researching capability to extend
the range of current surface guns to meet ship-to-objective
maneuver required ranges. The Navy-Marine Corps team has
initiated an in-depth review to look at how surface-caught fire
capability fits into the Littoral Combat Ship. DDG 1000 does
not provide area air defense or ballistic missile defense.
Beyond addressing the capability requirements, the Navy
needs to have the right capacity to meet combatant commander
warfighting requirements and remain a global deterrent.
Combatant commanders continue to request more surface ships and
increased Naval presence to expand cooperation with new
partners in Africa, the Black Sea, the Baltic region and the
Indian Ocean. This is in addition to the presence required to
man our relationships with current allies and partners.
Therefore, the Navy must increase surface combatant capacity to
meet combatant commander demands today for ballistic missile
defense, theater security cooperation, and steady-state
security posture, simultaneously developing our fleet to meet
future demands. Africa Command capacity demands will not
mitigate growing European Command requirements and Southern
Command has consistently required surface combating presence
that in the majority goes unfilled. The Navy remains committed
to our ballistic missile defense partners around the globe,
including Japan, Korea, the Netherlands and Spain.
The 30-year shipbuilding plan was designed to field a force
structure based on the fiscal year 2020 requirements of the
National Security Strategy and the Quadrennial Defense Review.
The 313-ship force floor represents the maximum acceptable risk
in meeting the security demands of the 21st century.
In the balance of capability and capacity, the Navy has
found there are increased capability gaps, particularly in
integrated air and missile defense and ballistic missile
defense, as we continue to review our Force Structure Plan in
support of the developing fiscal year 2010 program objective
memorandum.
The DDG 1000 is a capable ship which meets the requirements
for which it was designed. There are 10 promising major
technologies in the DDG 1000 program that have potential
utility but have yet to be assessed in operational
environments. Completing the two ships under contract will
allow that assessment, most importantly, that of the new hull
form, low radar cross-section, dual-band radar, and minimal
manning initiatives. There will be an impact to DDG 1000 prime
contractors and secondary and tertiary suppliers. Developmental
costs, which make up a significant investment in DDG 1000,
specifically the total ship computing environment and dual-band
radar, will still be incurred to ensure we acquire usable
products from the DDG 1000 effort that we are incorporating in
the CVN-78 class and can leverage in future shipbuilding
programs.
The next generation cruiser, referred to as CG(X), will be
an air and missile defense battle space dominant ship and is
being developed to counter the increasingly difficult missile
threats we face and project. The technologies resident in the
DDG 51 provide extended range air defense now and, when coupled
with open architecture initiatives, will best bridge the
transition to the enhanced ballistic missile defense and
integrated air and missile defense capability envisioned in the
CG(X).
We believe this evolutionary path is correct and addresses
the capability gaps more quickly than maintaining the DDG 1000
program beyond the first two ships. Additionally, production
costs for DDG 51 are quantifiable.
Your Navy remains committed to building the fleet of the
future and modernizing our current fleet to meet increasingly
complex threats. Continuing to build DDG 51s enables us to
expand warfighting capability, reach the required 313-ship
force structure sooner and, with the technology demonstrated in
DDG 1000 and DDG 1001, best bridge to CG(X).
Within the constrained shipbuilding resources available to
the Navy, evolutionary improvement of existing proven
capabilities must take priority to restrain the decline in size
and relevant combat capability of the fleet.
If you will now refer to the two ship charts you have been
provided, I will compare the warfighting capability provided by
DDG 51 and DDG 1000.
[The charts referred to were not available at the time of
printing.]
Admiral McCullough. DDG 1000 is an approximately 15,000-ton
guided missile destroyer with a maximum speed of approximately
30 knots and a cruising endurance of approximately 4,500
nautical miles at 20 knots. It has the dual-band radar,
consisting of the S-band volume search radar and the X-band
multi-function radar. It has a vertical launch system capacity
of 80 cells and is capable of self-defense, anti-air warfare
capability with the enhanced Sea Sparrow missile. The vertical
launch system (VLS) also provides long-range land-attack
capability with tactical Tomahawk.
DDG 1000 has 2 advanced gun systems, 6-inch caliber with a
magazine capacity of 600 rounds and a firing range of
approximately 63 nautical miles with a long-range land-attack
projectile.
DDG 1000 anti-submarine capability consists of a dual-
frequency, bow-mounted active sonar, a multi-function towed
array passive sonar, a torpedo countermeasure system, and a
vertical launch anti-submarine rocket. It has a helicopter
hangar and is capable of operating two H-60 helicopters or one
H-60 aircraft with three vertical take-off unmanned aerial
vehicles.
By comparison, the DDG 51 is a 9,600-ton guided missile
destroyer with a similar maximum speed of approximately 30
knots and an endurance range of 4,500 miles at 20 knots. It has
the SPY-1D(V) radar and a vertical launch system capacity of 96
cells and is capable of a sea-based defense area anti-air-
warfare capability with SM-2 standard missiles.
Additionally, it can provide ballistic missile defense
capability with the SM-3 interceptor. The VLS also provides
long-range land-attack capability with tactical Tomahawk.
The DDG 51 has one Mark 45 gun, 5-inch caliber with a
magazine capacity of 550 rounds and a firing range of
approximately 13 nautical miles. DDG 51 anti-submarine warfare
capability consists of the SQQ-89 combat system with a triple
frequency bow-mounted active sonar, multi-function towed array
passive sonar, a torpedo countermeasure system, 6 torpedo
tubes, and a vertical launch anti-submarine rocket.
It has a helicopter hangar and is capable of operating two
H-60 aircraft.
The fuel usage for DDG 51 is approximately 30 percent less
than that projected of the DDG 1000 under the same operating
conditions.
In summary, specific capability differences include: DDG
1000 was designed to be optimized in a littoral environment and
is expected to meet the challenges it would face in that
environment in most cases more effectively than would the DDG
51. The dual-band radar has better capability in a high-clutter
environment and the low-power, high-frequency sonar is more
effective in shallow water reverberation-limited environments.
However, as currently configured, the DDG 1000 cannot perform
area-air defense and is incapable of conduction ballistic
missile defense. In addition, though significantly quieter and
superior in littoral anti-submarine warfare, DDG 1000's lower
power sonar is less effective in active blue-water anti-
submarine warfare prosecutions than is the case for the DDG 51.
The future threat, particularly from proliferated ballistic
missiles and advanced anti-ship cruise missiles, can be better
addressed by the DDG 51. Modifying the DDG 1000s to support
these missions is unaffordable from the Navy's standpoint.
Given the range of missions assigned to the Navy in the future,
the technical complexity of the threats we are to face, and the
relevant likelihood we will be called upon to execute these
missions, the greatest single threat is the proliferation of
advanced ballistic missiles followed by a burgeoning deep water
quiet diesel submarine capability by potential adversaries.
The future Navy will have to address these threats first,
and today, the DDG 51 presents more capability in these areas
than does the DDG 1000. It is particularly critical that the
Navy receive authorization of full funding for restart of DDG
51 in fiscal year 2009 to support our proposed fiscal year 2010
program objective memorandum and for the continuation of DDG
1000 essential efforts.
In the interest of time, I was unable in this opening
statement to answer specifically all of the questions posed in
your letter dated 25 July to Secretary Winter.
Ms. Stiller and I look forward to addressing your concerns
regarding mission capability, cost analysis, industrial base
and DDG 51 modernization. Thank you to each one of you and to
the Congress for supporting the United States Navy.
[The joint prepared statement of Admiral McCullough and Ms.
Stiller can be found in the Appendix on page 64.]
Mr. Taylor. Thank you very much, Admiral.
And thank you, Ms. Stiller, for being here.
I would like to remind all interested parties that the
purpose of this hearing was to clear the air between the DDG
1000 and DDG 51, and that each of the contractors involved was
given the opportunity to participate in the hearing as far as
being witnesses.
Again, I want to remind people that we invited any Senator
who wished to participate. And so the people who are on the
witness stand are those who chose to participate today. But we
want to make it perfectly clear that we have given everyone on
each side of this debate ample opportunity to say their piece.
The Chair now recognizes the gentleman from Maryland, our
ranking member, Mr. Bartlett.
Mr. Bartlett. Admiral, you kept referencing the anti-
submarine warfare capabilities of the DDG 1000 and its
capability in the littorals. How far along was the design of
the DDG 1000 before LCS came on the scene?
Ms. Stiller. From a budgetary perspective, we have had R&D
for DDG 1000--it was not DDG 1000 at the time; it was DDG(X)--
since fiscal year 1995. LCS is about 2002 time frame. I think I
have that right.
Mr. Bartlett. You kept emphasizing that if we truncate the
DDG 1000 line and go to the DDG 51, that we will have less
capability in anti-submarine warfare and in the littorals. But
wouldn't the number of LCSs that we are planning more than
compensate for that?
Admiral McCullough. The LCS has an anti-submarine package,
Congressman, and it utilizes remotely piloted vehicles, active
and passive towed arrays and helicopter support.
We have also worked for a distributed system development
that I would have to take into a closed hearing.
But the LCS ASW mission module provides very, very good
anti-submarine capability in the littoral. What I was trying to
compare here was the capability resident in the DDG 1000 as
compared to the DDG 51.
Mr. Bartlett. I understand, in 1995, when we started the
conceptual design of the DDG 1000, had we known that the LCS
was coming along, the 1000 might have been a very different
ship, might it not?
Admiral McCullough. I would be speculating if I answered
that question, Congressman. I wasn't in the Pentagon when those
decisions were made.
I will tell you, we developed a littoral combat ship for
operations in the littoral, and as we have looked at the
evolution of the threat over the past several years, it is more
in the blue-water region for anti-submarine warfare, as
recently demonstrated in the Western Pacific.
Mr. Bartlett. From 1995 on, operation in the littorals
became more and more a priority, and it resulted, of course, in
the design of a whole new class of ships, the LCS. I think that
is an important element in the Navy's decision to truncate the
1000 line and to build more 51s because a major focus of the
1000, the littorals and anti-submarine warfare, is now I think
more than adequately done by the LCS in its missions there.
This is just one of the several considerations that the Navy
used in a decision to truncate the 1000 line and to move to the
51. Also, and we do not know the final cost on either of these,
but the 51 is certainly going to cost less in most people's
projections than the 1000, and so will this move us more
quickly to a 313-ship Navy?
Admiral McCullough. Yes, sir, it will.
Mr. Bartlett. Thank you very much, Mr. Chairman.
Mr. Taylor. The Chair now recognizes the gentleman from
Connecticut, Mr. Courtney.
Mr. Courtney. Thank you, Mr. Chairman.
First of all, I just wanted to say that I think the record
should reflect that this hearing was actually scheduled before
the Navy's announcement on July 24.
And I think Mr. Taylor and Mr. Bartlett deserve a lot of
credit for the fact that they have really been on top of this
issue, and this committee has been doing a very credible job of
oversight on this program, and I think that should be noted.
I want to follow-up on Mr. Bartlett's last question. When
the Navy issued its statement on the 24th, it actually said
that the 313-ship level would be reached sooner, and you just
testified that it would. My recollection is when Admiral
Roughead appeared before the committee earlier this year, he
had pushed back the projection for a 313-ship Navy to I think
2019 was my recollection.
Admiral McCullough. Yes, sir, I believe that is correct. In
accordance with the shipbuilding plan, it was presented to
Congress with the President's Budget Request for fiscal year
2009 (PB09) submittal.
Mr. Courtney. So can you say with any more specificity
about whether this decision will change that date?
Admiral McCullough. Yes, sir, we believe it will. The plan
that we played out is a proposal in our POM submittal to the
Office of the Secretary of Defense (OSD), so this is still
being worked within the Defense Department.
My initial estimates--and I have my people working the
shipbuilding plan; it will be submitted to Congress--is that we
will be able to achieve the 313 plan approximately 2 years
earlier.
Mr. Courtney. In your opening statement, you said that one
of the goals of this change is to, I wrote it down real fast
here, is to maximize industrial base stability, was part of the
decision. This is not one of my yard's vessels, but my
understanding is that the 1000 requires more shipyard workers
than the 51. How do you envision maintaining that stability?
Ms. Stiller. We are still in the process of defining an
acquisition strategy going forward, and we will be working with
the Secretary of Defense's Office on that. Certainly,
industrial-based considerations must be weighed in that
acquisition planning, and we will do that.
Mr. Courtney. I am sure there may be some follow-up
questions to that point later.
I guess my last question is that, Admiral, you testified
that you are hoping that the Congress is going to act in the
2009 budget to sort of begin implementing this change. I think
that is how you finished your testimony; is that right?
Admiral McCullough. Sir, what I would say is, this is a
Program Objective Memorandum (POM) plan. And as one of the
gentlemen referenced, our proposal is for eight DDG 51s in the
fiscal year 2010 program, from fiscal year 2010 through fiscal
year 2015. We believe to enable that program a President's
Budget Request for 2009 (PBO9) adjustment to make it DDG 51 in
fiscal year 2009 supports our POM-10 submittal. And that is
what we would like to see happen, yes, sir. But that is in
support of our POM-10 submittal, sir.
Mr. Courtney. So what happens if we don't do that? I guess
I am trying to sort of play this out a little bit, because it
is kind of late in the process.
Admiral McCullough. Yes, sir, we understand that.
What I would say is--Allison, when was the last year we
started building the DDG 51s?
Ms. Stiller. The last DDG 51 was appropriated in fiscal
year 2005, and so the point Admiral McCullough I think is
trying to make here is, you would have a significant production
break if you wait until fiscal year 2010. So the desire is to
consider in 2009 as well. So that is part of the discussion we
are having.
If your question is if another DDG 1000 was authorized and
appropriated, from an acquisition perspective, I have an
approved acquisition strategy for the 1000 program as well.
Surface combatant in fiscal year 2009 is critical, we believe,
to the industrial base.
Mr. Courtney. Thank you.
I have no further questions, Mr. Chairman.
Mr. Taylor. The Chair recognizes, again, given the
unanimous consent request, the Chair now recognizes Mr. Saxton.
Mr. Saxton. Thank you, Mr. Chairman.
Admiral, during your testimony, you, I believe, said that
the DDG 1000 had some advantages as compared to the DDG 51 and
that the DDG 51 had some advantages as compared to the DDG
1000. I think you indicated that the DDG 1000 had some
advantages in the littoral environment, and that it had an
advantage with the dual-band radar, and it had an advantage in
shallow water, sonar in shallow water.
At the same time, you indicated that DDG 51 had some
advantages in air-to-air defense, in ballistic missile defense,
in anti-ship missile defense, in anti-submarine defense in deep
water. Did I get that all? Is that a synopsis of what you said?
Admiral McCullough. Yes, sir, that is a fair assessment.
The dual-band radar has both and S- and an X-band radar
capability. And that works very well in the cluttered
environment of the sea/shore interface.
Mr. Saxton. Here is the question that I wanted to ask.
Members of this subcommittee and members of the full committee
have followed very closely the evolution of DDG 51. I did
myself, and I saw it as a new system in the 1980's with
capabilities that were different, much less capable than the
Aegis system today. And I followed that evolutionary path until
very recently DDG 51 with the missile technology. The anti-
missile technology that it has was able to take a satellite out
of the atmosphere.
Admiral McCullough. Yes, sir.
Mr. Saxton. And that was quite a learning curve over a long
period of time and evolutionary developments that took place
that gave us capabilities today that nobody else presumably in
the world has, a package of capabilities.
So I guess this is my question: If DDG is not as good as
1000 in the littoral environment and if it is not as good in
the dual-band radar component, which I don't fully understand,
I must admit, and if it is not as good in the sonar department
in shallow water, how will we meet these three--how will DDG
and other Naval assets be able to meet these requirements?
Admiral McCullough. I will address the ASW first, sir. As
was suggested, the LCS has quite good capability in the
littoral environment from an anti-submarine warfare
perspective, both from an active and passive and a combination
of the two use of sonars and distributed systems. So we think
we have that challenge met with the ASW portion of the LCS.
The dual-band radar was specifically designed to function
at the sea-land interface in a clutter environment. What I
would tell you is it does very well there. It does exactly what
we designed it to do, and that is because of the combination of
the X-band and the S-band.
As initially configured, and as you suggest, the SPY-1A in
the early 1980's did not do well in the sea-land interface. And
we have evolved that radar from a SPY-1A to a SPY-1B to a SPY-
1D(V). And the SPY-1D(V) is capable and can meet the threats in
the littoral environment.
And as you also suggest, we have evolved that radar to
where it can shoot down satellites in outer space if that is
what we so desire. It wasn't designed for that. It wasn't
designed for ballistic missile defense, but we have evolved
that system to meet that capability set.
Now, granted, the system, the SPY system, the Aegis system
is not designed to shoot down satellites, and that was a one-
time event, but it is configured to track and engage ballistic
missiles.
People ask me what the accuracy of the thing is, and I will
tell you, we can pick where on the short- and medium-range
ballistic missiles we want to hit the target, and that is how
accurate it is.
So I think, with the combination of capability with the LCS
and the capability resident in the DDG 51, we meet the littoral
challenge. I think that is where we are.
Mr. Saxton. Mr. Chairman, if I may just follow up with one
quick.
The shallow water sonar, is there a come-along to take up
that capability?
Admiral McCullough. Yes, sir. The LCS ASW mission package
has the shallow water active and passive sonar capability. And
I believe we roll the first ASW package out in September or
October of this year.
Mr. Saxton. Thank you, Mr. Chairman.
Mr. Taylor. The Chair recognizes the gentlewoman from
Massachusetts, Ms. Tsongas.
Ms. Tsongas. Thank you, Mr. Chairman, for allowing me to
participate in this important hearing and for your continued
leadership to make our shipbuilding more effective and
affordable.
Admiral, I have a long question. Please, if you would, bear
with me before answering.
Admiral McCullough and Ms. Stiller, you have both testified
before Congress this year on the fiscal year 2009 budget and,
in particular, on the DDG 1000 program. I would like to read a
couple of your statements.
In April, Admiral McCullough, at the Senate Armed Services
Committee Seapower Subcommittee hearing, you said, ``It is, the
DDG 1000, much more capable in the littoral, given the radar
suite that we put on it, the signature reductions we have put
into the ship, and it has got less than half the crew size on
it.''
In March of 2008, Admiral McCullough and Ms. Stiller, in
your testimony before this subcommittee you said, ``The DDG
1000 will capitalize on reduced signatures and enhanced
survivability to maintain persistent presence in the littoral
and future scenarios. The program provides the baseline for
spiral development to support future surface ships. The dual-
band radar represents a significant increase in air defense
capability in the cluttered littoral environment. Investment in
open architecture and reduced manning will provide the Navy
lifecycle cost savings and technology options that can be
retrofit to legacy ships, thus allowing adaptability for an
uncertain future. The program continues to execute on cost and
on schedule.''
In March of 2008, in a hearing before this committee, ``The
DDG 51 is a very capable ship. That is true. I will tell you
the capability that we put in the DDG 1000 with performance in
the littoral, both against missile threats and to provide
surface-fire support, exceeds the capability and the capacity
that is resident in a DDG 51.''
And Ms. Stiller, at the same hearing, ``And I would also
add that the fleets do have input as we go through our budget
cycles and what the requirements are.''
Today, obviously, you see a changed threat environment.
Nevertheless, given all your testimony just three to four
months ago regarding the great warfighting capabilities the
ship delivers against current and future threats and its
capabilities that ``exceed capability resident in the DDG 51,''
do you stand by the testimony that you made before Congress so
recently?
Admiral McCullough. Ma'am, I would say everything that I
said in my testimony, and I don't want to speak for Allison,
remains.
The DDG 1000 is absolutely outstanding for the requirements
to which it was designed. The dual-band radar is better than
the SPY-1D(V) radar in the cluttered littoral environment at
the sea/land interface. The 155 gun, the 6-inch gun, has a
longer range and a better fire-support capability than a 5-inch
gun.
The total ship's computing environment that I referenced
again today is something we need to go forward with as we
develop different combat systems, and we need that to complete
the first two ships. The dual-band radar goes on CVN-78. I
wouldn't change anything I said in that testimony. In that
environment, the DDG 1000 outperforms the DDG 51.
Now when I look at developing multi-mission surface
combatants that are filling a unique role that is aligned to
one particular mission, which is fire support, and I look at
the global change in the security environment, I have to look
at where I think the capabilities should go. And the capability
resident in the DDG 51 with respect to advanced anti-ship
cruise missiles and ballistic missile defense better suits the
capability challenges we see today.
Ms. Tsongas. Before I go on to ask a question about the
sudden shift in thinking around what the threat is, Ms.
Stiller, you said that it is important that we do buy a surface
combatant in fiscal year 2009. Given what the House
Appropriations Defense Subcommittee did yesterday with $450
million for advanced procurement, no money for the DDG 51
procurement, and the fact that the Senate equivalent is likely
to be friendlier to the DDG 1000, I am not sure where the
funding for a DDG 51 is going to come from. Would you support
funding for an additional DDG 1000 instead of no surface
combatant in this year?
Ms. Stiller. Ma'am, as you know, our President's budget
submission for 2009 included DDG 1000. And yes, Admiral
McCullough said in his opening statement, we are here today to
talk about where the Navy is headed and as part of our POM-10
submission to the Office of the Secretary of Defense (OSD).
So, from an execution perspective, yes, ma'am, I can
execute a DDG 1000 in fiscal year 2009, but it comes back to a
requirement decision; does the Department support and need that
ship? But from an acquisition perspective, yes, ma'am, I
absolutely could execute either way.
Ms. Tsongas. And then I have one more question for you,
Admiral. This isn't the first major ship acquisition program
that has faced problems. Why does so much risk and
inconsistency exist? Is this a problem with the threat
assessment, or is it a budgetary issue? And what can we do to
mitigate these problems?
Before you answer, I appreciate that we must be flexible,
and I appreciate that you are under great constraints when you
testify, but shifting testimony in such a short period of time
makes it very difficult for us as a Congress to authorize and
appropriate funding for long-term programs in an effective and
efficient way.
So how do we address this so that the process is fairer for
the Navy, for the industrial base, and the taxpayer?
Mr. Taylor. Ms. Tsongas, again, we are trying to clear the
air, but you are over your five minutes.
So, Admiral, if you could give us as timely response as you
could.
Admiral McCullough. Yes, Sir.
Yes, ma'am, I understand the question. There have been some
things that have happened in the near-recent past that have
significantly changed the way we view the threat. Some of it I
would have to talk to you offline about due to the
classification level of it.
But if you look at recent ballistic missile demonstrations
or tests by potential adversaries, they have advanced greatly
since even 2000. And then if you look at an event that occurred
in the Israeli-Hezbollah war where we used to attribute high-
end or high-tech threats to nation-states, that would now
affect our ability to perform what we previously viewed as
operations in low-threat environments into a high-tech, high-
threat environment. And so this is a requirements and
capability issue based on the way we have seen the threat
adjust over the past couple of years.
We started working on this about four and a half or five
months ago, and I understand and appreciate the dilemma for the
Congress. But the Navy felt that this was the right way to go
based on the capability that we see we need to meet current and
future threats.
Mr. Taylor. Thank you, Admiral.
Thank you, Ms. Tsongas.
The Chair, again, is going to recognize Members in the
order that they were here at the gavel, and then we will go
back to Democrat and Republican.
The next person who was here at the time of the gavel is
Mr. Allen from Maine.
Mr. Allen. Thank you, Mr. Chairman. And I appreciate very
much the chance to be here and welcome members of the panel.
Bath Iron Works in my district only builds surface
combatants, so it has--and it was, my understanding was the
third DDG 1000 was intended to go to Bath Iron Works. So this
debate means a great deal to the people who work there, to the
company, and everyone who is connected to that particular yard.
Both the CNO and the Secretary of the Navy have been to the
yard. They have seen the new ultra-hull facility. They have
talked about how important Bath Iron Works is to the
shipbuilding industrial base in this country.
Ms. Stiller, I think you said that when you figure out the
acquisition strategy, the industrial base considerations will
play a role. I would ask either or both of you to speak to the
role you see for that particular yard as part of the Navy's
shipbuilding base going forward?
Ms. Stiller. Yes, sir.
Bath Iron Works is producing surface combatants for the
United States Navy; specifically, still building the DDG 51
class and the lead DDG 1000 with some work also for the second
1000. There is a work-share agreement between Northrop Grumman
Shipbuilding and General Dynamics Bath Iron Works.
Yes, sir, the Secretary has seen the ultra hull facility. I
have been up there recently. That was an investment done
through the DDG 51 program to help improve efficiencies in the
51 program. Certainly the yard has improved efficiencies over
time.
We will weigh industrial base considerations as we go
forward in our acquisition strategy formulation. So I guess I
can assure you that we will be considering that as we move
forward. But I don't have specifics yet, because we are still
in the developmental phase.
Mr. Allen. I understand, Ms. Stiller, that both yards have
indicated to you that a restart of the 51 program in fiscal
year 2009 can be executed.
Ms. Stiller. Yes, sir. As a result of my hearing this
spring before this committee, Chairman Taylor asked me to talk
with industry, because I had said I was concerned about the
subvendor implications of returning to DDG 51. Both yards came
in to meet with me. They had pulsed the subvendor base.
Now, I will tell you their assumption was the DDG 1000
continued and that the 51 would restart. The major issue that
they identified to me was a long lead time for the main
reduction gear, which would be about 50 weeks longer than what
we have traditionally seen in reduction gear fabrication. Both
yards assured me that since they had done main reduction gear
repairs, significant disruptive industrial events, they have
both done those in the recent past, they felt that if they
understood that they were going to have to build out a
sequence, they could plan for it and execute. And I believe
knowing that they have done that in the past and they could
plan in the future that, yes, sir, they could restart in 2009.
Again, they were in their assumptions, I am being truthful
here, is that they did assume the 1000 class continued.
Mr. Allen. Admiral, I had one more question. As I heard you
describe the capabilities of the 1000 and the capabilities of
the 51, it struck me that what you were really saying is that
the Navy's understanding of the national security needs of this
country, particularly how we respond to future threats, has
changed based on evolution and threats both in submarines built
by potential adversaries and also by the development of new
missiles, both cruise missiles and ballistic missiles. And I
just was struck also in your written testimony how often you
referred to the demands of the combatant commanders. And I
wonder if you would elaborate just a little bit on that fact.
What kinds of requests are you getting combatant commanders and
how has that affected your decision?
Admiral McCullough. As we reviewed the integrated priority
list from the combatant commanders that were submitted this
year, European Command (EUCOM) asked for increased air and
missile defense. Pacific Command (PACOM) asked for enhanced
ballistic missile defense. And Central Command asked for
integrated air and missile defense. And I would have to get the
lists; I don't have them in front of me. I believe PACOM asked
for improvements in anti-submarine warfare. And as we looked at
that, that sort of aligned with where we viewed the national
security environment was going.
I would also tell you that EUCOM is coming in for a request
for a 1.0 presence ballistic missile defense in the eastern
Mediterranean. There has been some discussion in policy about
putting that capability in the Baltic region. And Central
Command has a standing request for forces for 1.0 presence for
exo-atmospheric shooters, SM-3 shooters, and endo-atmospheric
shooters, SM-2 block IV shooters, which is a near-term sea-
based terminal. They have that standing requirement, as does
PACOM, have a standing requirement for almost every ballistic
missile defense asset we can put in that theater, sir.
Mr. Allen. Thank you.
Thank you both.
Mr. Taylor. The Chair thanks the gentleman.
And the Chair would also like to make a request of Admiral
McCullough.
Admiral, included in next year's budget request, I would
like the Navy to submit a cost estimate of what it would take
when the first of the DDG 51s hit 20 years, what a service life
extension program would cost to get those vessels
electronically and weaponed-wise up to speed with the next 51s
to come off the line.
Admiral McCullough. What I would tell you, sir, is DDG 51
made its first deployment in 1991. So she was commissioned in
late 1990 or early 1991. So she reaches 20 years in fiscal year
2011.
We put in a DDG modernization package as part of the
President's Budget Request for 2008 (PB08) that was approved by
the Congress to modernize not only the hull, mechanical, and
electrical systems on that ship, of those ships, to get them to
their full service lives, but to upgrade the combat systems
capability, because as Congressman Bartlett indicated, if we
don't--or maybe it was you, sir--if we don't get the ships to
be able to upgrade to meet the threat, we decommission them.
And we did. We decommissioned the Baseline One cruisers at
about 20 years; the Spruances at about 22; and the new threat
upgrade DDGs, 993 Kidd class, at 17 years because we couldn't
upgrade the combat capability in them. And the upgrade packages
we have in the combat systems, starting for the DDG 51, is
something we call Advanced Capability Build 12. And that is a
technical insertion of commercial off-the-shelf (COTS)-based
computer hardware, and it is an open architected computer
program that is developed around a projected architecture. And
it gives the ships in-stride ballistic missile defense, the
ones that don't have it, with multi-mission signal processors,
and upgrades to the original radar that was put on the first
ships, the SPY-D(V) capability, and it also puts in integrated
air and missile defense with the cooperative engagement
capability that isn't resident in that class of ships now and
provides for increased extended range area air defense with SM-
6s. And the cost of that whole upgrade, I believe, as submitted
in the 2008 budget submittal was about $215 million a ship.
And we need to get to the open architecture computer
environment so we can have an open architecture business base
that allows competition for program algorithms and hardware
updates, because we can't afford to upgrade these ships again
10 years after their current mid-lives at a cost of $200-plus
million a ship. And so that is where that program is. And I can
give you more details on that as you desire, sir.
Mr. Taylor. Admiral, for the record, I think that is very
important. Additionally, given the advances in cathodic
protection and metal coatings and what not, I think it would be
very much to the committee's interest as to, what are the
possibilities of actually extending the life of some of these
51s out to 40 years?
Admiral McCullough. Yes, sir, I can do that. We
commissioned a study by Naval Sea Systems Command (NAVSEA) to
get the ships to 40 years already, because, as I look at the
outyear plan and the shipbuilding plan, I understand how
expensive it is. And NAVSEA came back to me with that report.
And there are no show stoppers to get those ships to 40 years
estimated service life (ESL).
Mr. Taylor. Thank you very much, sir.
The Chair now recognizes the gentleman from Virginia, Mr.
Wittman.
Mr. Wittman. Thank you, Mr. Chairman.
Admiral McCullough, you have spoken a little bit about the
differences in capabilities of the DDG 51, the DDG 1000, the
surface combatant commanders' requests and what their needs
are. I want to kind of back up a little bit and talk in a
broader framework as far as the threats that this Nation faces
and in the Navy's vision of its mission needs. And can you tell
us a little bit about that and how that has led you to the
point of restarting DDG 51? How has the Navy's vision of the
mission changed? And if you can speak a little more
specifically about the Navy's role in providing ballistic
missile defense and also Naval surface fire support and how
those elements relate to the Navy's maybe change in thought
about how the DDG 51 meets those requirements versus the DDG
1000.
Admiral McCullough. Yes, sir. I will speak to that.
As we look at threat sets both from developing nations and
nations that used to be constrained to regional operations, the
proliferation of ballistic missiles is substantial. So that is
a problem. And we have recognized that over the last several
years, starting in the late 1990's or the early 2000's, when
the Missile Defense Agency took auspices of capability
development out of the services and under the agency. Prior to
that time, the Navy had something known as the Navy Area Wide
Program. So we were already embarked on what we saw an evolving
threat with the proliferation of ballistic missiles.
Working with the Aegis Ballistic Missile Defense
Directorate inside the Missile Defense Agency (MDA), the Navy
has conducted successfully 12 of 14 engagements of medium-range
and short-range ballistic missile targets out at the Pacific
Missile Range Facility. We have also modified the program with
the help of Lockheed Martin engineers, Raytheon engineers, the
Naval Surface Weapons Center in Dahlgren, and the Navy, and
executed a shoot down of an errant satellite because of the
hazardous material that was in the fuel tank.
The most recent exercise off of Kauai in November of 2007
was conducted, as we do all of them, the ship's crew is on
watch; it is not engineers. It is not specified folks. It is
folks on a watch bill, without knowledge of when the target is
going to be launched, and they launched two simultaneous short-
range ballistic missiles, and they were successfully
intercepted by Lake Erie.
So we have the capability to conduct intercept operations
today with the Aegis Ballistic Missile Defense Program 3.6 or
4.0. That capability is deployed in the Western Pacific and
contributes to the larger ballistic missile defense system
architecture that has been engineered by MDA to provide warning
for rogue nation ballistic missile launches. And it is on
station and operational today, and the combatant commanders
want more of it, sir.
Mr. Wittman. Thank you.
Mr. Chairman, one additional question. When the DDG 51s
were in production, there were a minimum of three DDG 51s
produced per year. And past studies have indicated that the
shipbuilding industry needs to produce at least three of those
surface combatant ships a year in order to sustain the
industrial base. Now, with this change in direction from the
DDG 1000 to the DDG 51, does the Navy plan in future budget
requests to request the production of at least three DDG 51s
per year into the future?
Admiral McCullough. Sir, what we have proposed to OSD as we
have worked through this plan is eight ships across the fiscal
year 2010 Fiscal Year Development Plan (FYDP). And the profile
as proposed, and not approved yet by OSD, is one ship in fiscal
year 2010; two ships in 2011; one in 2012; two in 2013; and one
in 2014 and 2015. As we build subsequent programs in the years
to come, we will look at that issue that you just laid out. But
I would tell you right now, based on competing demands within
the Department, that is what we laid in the POM-10 submittal to
OSD.
Mr. Wittman. Thank you, Mr. Chairman.
Mr. Taylor. I thank the gentleman.
The Chair intends to recognize in the following order: Mr.
Langevin, Mr. Ellsworth, Mr. Sestak, Ms. Gillibrand, and Mr.
Cummings. If our minority members wish to be recognized along
the way, just let me know.
The Chair now recognizes Mr. Langevin for five minutes.
Mr. Langevin. Thank you, Mr. Chairman.
And I want to thank you for your courtesy in allowing me to
come back on the committee for this hearing, as I am on leave
from the Armed Services Committee, on the Intelligence
Committee right now.
Admiral, I want to thank you for your testimony.
Ms. Stiller, thank you for being here as well.
Let me just say that I am certainly concerned about the
quick shift in strategy, going from the 1000s to the DDG 51s,
given all the due diligence that has gone into getting us to
the point of the recommendation of the shipbuilding on the
1000s, especially given the fact that the President's budget
seems to be going one way. As I understand it, the Sec Def has
not signed off on Navy's plan. The House Defense Appropriations
Subcommittee has recommended $450 million for the DDG 1000 and
nothing for the 51s.
In your testimony, you stated that the decision to suspend
the Zumwalt in favor of more Arleigh Burke class destroyers
resulted from the Navy's belief that the DDG 51's capabilities
better met the Navy's needs. Considering the Navy is certainly
requesting a change in the President's budget six months after
its submission in the middle of an appropriations cycle, you
know, I certainly am curious about how this decision was made
by the Navy.
You stated in your testimony that there was significant
change in threat assessments that prompted the review. You
know, I would like to follow up with you, perhaps in a
classified session or in response to my questions in writing,
in addition to what you have stated verbally already on what
the change in the threat is. Additionally, as you know, and
have stated in the past, the DDG 1000 was developed as a result
of an extensive review on budget, design, and capabilities. Did
the decisions to suspend DDG 1000 and replace it with DDG 51
undergo a Joint Capabilities Integration and Development System
(JCIDS) Review? And can you please provide for the subcommittee
a copy of that study for the record?
[The information referred to can be found in the Appendix
beginning on page 131.]
Admiral McCullough. As far as the JCIDS process, my initial
liaison with the Joint Staff has said there is no--they don't
have a requirement for us to update the capabilities
development document that was approved by the Joint
Requirements Oversight Council (JROC). I do understand that the
Vice Chairman of the Joint Chiefs of Staff is going to ask that
the Navy come and brief the JROC on why we had the shift from
DDG 1000 to the DDG 51s.
Mr. Langevin. So, Admiral, this decision was made absent a
thorough review, analysis, and study?
Admiral McCullough. We have done the analysis and study
internal to the Navy. And we do it with our analysis shop N81.
I also will tell you, when the CNO came into office last
September, he has come with vast experience in the Pacific,
both as a deputy Pacific commander for approximately a year,
the Pacific fleet commander for two years, and the Atlantic
fleet commander for some period of time, six or eight months.
And when he started to go through our program build for fiscal
year 2010, based on his experience and where we saw the threat
set going based on our analysis, long about the beginning of
March he said to me that we really need to go look at this; I
think we have an asymmetric capability mismatch between the
projected and future threats and what we are building. Our
internal analysis says we have excess capacity in Naval surface
fires that the DDG 1000 was predominantly designed for and that
we have the capacity to support the Marine Corps surface fires
requirements. And so given his experience and what our analysis
said, starting in about March, we started to work this process.
We wanted----
Mr. Langevin. Admiral, if I could, my time is limited, so
if I could ask, it is my understanding that the CNO has not in
fact signed off on Navy's recommendation transitioning, going
back from the 1000s to the 51s. Is that correct?
Admiral McCullough. It is in our budget submittal. Deputy
Secretary of Defense and the Under Secretary for Acquisition,
Technology, and Logistics, Secretary Young, said the Navy could
provide this as part of their POM-10 submittal, and that we
should start to brief Congress and industry. And the CNO and
the Secretary have made calls Members, and Ms. Stiller and I
have made calls on staffers, because we wanted to get to the
Congress before you all found out about it in the newspaper. So
the POM-10 submittal is under review by the Office of Secretary
of Defense, sir.
Mr. Langevin. Thank you. On the design changes and such, in
your testimony, if we do the 51s versus 1000s, you estimate
that the DDG 51 line could be restarted you said in fiscal year
2009 even though you also know that certain industrial base
issues need to be worked out. You said, given the long lead
time for materials, such as the main reduction gear, you said--
I was going to ask if you thought that 2009 was a feasible
estimate. You still believe that that is correct?
Ms. Stiller. Yes, sir.
Mr. Langevin. Okay. Well, you have stated that the new----
Mr. Taylor. Mr. Langevin.
Mr. Langevin. Yes.
Mr. Taylor. We are going to let you go a little bit over,
but in fairness to the other members, you are past your five
minutes.
Mr. Langevin. Thank you for your indulgence, Mr. Chairman.
I will be brief with just this last question.
You stated that the new DDG 51s could incorporate
additional technologies, but we haven't heard a clear
explanation as to what those would be. Do your cost estimates
for the future DDG 51s reflect current design and capability or
do they incorporate additional technologies, each of which
could lead to insertion or new design costs?
And finally, do your lifecycle comparisons between DDG 51
and the 1000s incorporate the increased personnel required for
the 51s? And have you developed estimates of termination costs
for DDG 1000?
Admiral McCullough. Sir, the capability set I described for
DDG 51 that would restart as DDG 113 is based on the
modernization program that we currently have funded in the DDG
modernization program. And that includes the COTS-based
computer hardware, the open architected computer program, the
multi-mission signal processor with inherent ballistic missile
defense capability and the extended-range anti-air warfare
capability with SM-6. That combat system, because of the way it
has been developed, costs less than the current combat system
that is in DDG 112. That will be available to drop into DDG 113
if it is a 2009 restart. So I am confident in the cost numbers
that we have provided in letters to what the restart costs for
a DDG 51 is. Lifecycle costs, because the DDG 1000s are
projected to come on service or in service inside this POM-10
developed fiscal year 2010 future year defense plan, we used
the N4 as models on how we project costs for ops and
maintenance and manpower on DDG 51s and the DDG 1000s. And when
we look at manpower and fuel costs and spare parts, a DDG 51
over the lifecycle is about $4 million more expensive to
operate than the DDG 1000. I will get you the exact number, but
I think it is $4 million. That is different than what is in the
Selected Acquisition Report because the SAR reflects different
requirements for lifecycle costs than we do when we do budget
development for ops and maintenance and manpower on ships.
Mr. Langevin. I know my time has long since expired, so I
want to thank the chairman for his indulgence.
Admiral and Ms. Stiller, I will have follow-up questions
that I would like a quick response for the record.
Thank you.
Admiral McCullough. Yes, sir, thank you.
Mr. Taylor. The Chair thanks the gentleman.
The Chair recognizes the gentleman from Indiana.
Mr. Ellsworth. Thank you, Mr. Chairman.
Thank you, Admiral and Ms. Stiller, for being here. I will
try to keep mine brief. Admiral, is this, in your vast
experience, the first time this has ever occurred, we canceled
a program midstream, in your years in the Navy? In the Navy or
any of the other armed services?
Admiral McCullough. First, sir, I would like to just make
one correction. We are not canceling the program. We are
truncating the program at two ships. And those will be
developed and fielded both to demonstrate the technology and to
use in operations. Allison and I just talked for a minute, I
have been in the Pentagon for about 3 years, and I have been
commissioned for a little over 33 years. And the only other
major program I can remember that has been canceled was the A-
12.
Ms. Stiller. From a truncation perspective, and not
necessarily the Department, but the Sea Wolf (Sea Wolf class
fast attack submarine) program was truncated, first, at one
submarine and then two and finally three.
Mr. Ellsworth. And Ms. Stiller, I know you are the expert
in percentage of the work being done, we have talked before,
the two ships that we have contracted, and I have not had a
chance to review the documentation, at what level, what
percentage are they in construction? Are they done? Are they at
zero?
Ms. Stiller. No.
Sir. We awarded the contracts for the dual lead ships in
February of this year. And the plan, Bath Iron Works has the
lead ship. We had always said we wanted to get to a certain
point in design before we started construction. That is about
80 to 85 percent. And they intend to start fabrication on the
lead ship up north in October of this year and about a year
later down south. So we have not started production, although
both yards have taken the design products and translated them
into usable modules that will go into the ship to prove that
the digits-to-steel translation works. And I am happy to report
it has worked incredibly well. The program is going quite well,
cost and schedule. DDG 51 is likewise a very successful
program.
Mr. Ellsworth. So we will produce two only of the DDG
1000s. Is that----
Admiral McCullough. That is the Navy's plan as submitted to
OSD, yes, sir.
Mr. Ellsworth. And when that occurs and when these ships
are fully operational, then, Admiral, would you tell me the
difficulties or challenges down the road with having 2 of one
and 33 of another, whatever the number is, of the 51s? How does
that challenge you in the training, replacement parts, running
two ships only? What are the challenges you will face in that?
Admiral McCullough. Well, any time you have a small class,
you have economy-of-scale issues. So you get a lot of DDG 51s,
you have one set of issues. When you have a small class, you
face another set of issues. That said, I will tell you the Navy
has a history of small ship classes, and we know how to deal
with it. The John F. Kennedy was a one of a class. The
Enterprise is one of a class. There were two California class
cruisers. The there were four Virginia class cruisers. There
are three Sea Wolf submarines.
Which ones did I leave out? Oh, Bainbridge is one of a
class. Truxtun is one of a class. Long Beach is one of a class.
So there are challenges, but we have the experience to deal
with it, sir.
Mr. Ellsworth. Thank you, Mr. Chairman. I will yield back.
Mr. Taylor. The Chair thanks the gentleman.
And for the record, Mr. Larsen has asked for a breakdown of
the lifecycle costs of the two vessels to be submitted for the
record.
[The information referred to can be found in the Appendix
beginning on page 131.]
Mr. Taylor. The Chair now recognizes Admiral Sestak from
Pennsylvania.
Mr. Sestak. Thanks, Mr. Chairman.
About three years ago, CNO Clark came before this committee
and said that, if we do not preserve the DDG 1000, we would be
putting at risk the sons and daughters of our Nation. For some
reason that seemed, understandably, potentially to handcuff the
Congress. We took him at his word, or they did.
Why is your credibility any better today to tell us it is
not needed and that something else can replace whatever it was
that put our sons and daughters at such risk?
Admiral McCullough. Congressman, I respect Admiral Clark
immensely. And when he testified before this committee, given
what we knew of the world situation at that time, I think he
was absolutely correct.
Mr. Sestak. What did you get to replace whatever DDG 1000
was supposed to do to protect the sons and daughters? Not that
the threat has changed. What has taken its place to do that?
Because the analyses we had over there said the other ones
couldn't do it, that led him to state that. What is taking its
place to do that?
Admiral McCullough. The surface fires analysis, first, I
have to brief you in another environment. But I would tell you
that the capacity that the DDG 1000 brought in the surface
fires for which the ship was designed is easily accounted for
by the improvements in airborne-delivered precision strike
munitions, tactical Tomahawks today as well as our current----
Mr. Sestak. If I could, Admiral, those analyses were also--
and there has been no changes in those programs of record since
he made that statement.
Admiral McCullough. Congressman, to adequately----
Mr. Sestak. With all due respect, there has not been.
Admiral McCullough. Yes, sir. But to adequately get at your
question, I have got to take it into a classified environment.
I can't discuss it here.
Mr. Sestak. But if I could, I understand that something has
moved to the left. I am not arguing that point. I am arguing
what is taking the place of DDG 1000, that it was the only
thing that could meet this need? It was the only thing that
could meet this need. Not the new threat.
Admiral McCullough. Yes, sir.
No, that is the surface fires requirement.
Mr. Sestak. My understanding is that was not just what he
was talking about, because there is also--my second question
is, to some extent, the Navy had tried to evolve over the past
years not to be a Navy of a man but to be a Navy of analysis.
Where is the area of analysis (AOA) for this proposal of yours?
Where is the AOA for the CG(X), the DDX--excuse me, I am
sorry--DDG 1000 was supposed to take us to? What about the
electric drive that was to lead to the electric magnetic gun?
And the global war of terror, which Secretary Gates came out
today and said that is the future for the next decades. And DDX
wasn't just meant for Korea, it was meant to go--DDG 21--to go
around with the electromagnetic radar gun (ERG) everywhere, to
reach into those countries with that, not just Korea, but the
concept for the Navy was to contribute to the global war on
terror. Are we making a strategic decision today on one ship?
Where is the analysis, the strategic thought, the studies and
the cost studies that will show, is this really the way to go,
or is there a different change or a better approach? I don't
think we have seen those.
Admiral McCullough. We have significant analysis on the
surface fires requirement, not only for the campaign but
elsewhere, that says----
Mr. Sestak. But this was also--I understand surface fires.
But we have also taken this ship down from 1,200 rounds to 600
rounds, from 120 VLS tubes down to 80 VLS tubes. We decremented
over these past years that surface fire support. But it was the
other things, the stealthiness of it, the range, the ability to
go with the ERG and the electromagnetic gun and what it boded
for the future. What has replaced those?
Admiral McCullough. I will tell you we will continue to
develop the integrated electric power system for use in future
surface combatants. I would also tell you the closest thing we
have with electric or electronic warfare, electromagnetic
warfare is the electromagnetic rail gun that is being
demonstrated in Dahlgren. And I don't see any potential to
weaponize that before about 2020. And I would say that the
technologies incumbent in the DDG 1000 for the fire suppression
systems, et cetera, are very applicable to any future surface
combatant and backfittable--if that is a word--we can backfit
them into current surface combatants when they are modernized.
Mr. Sestak. Could I ask another question on cost, because I
don't have much time? If you go through the various costs that
you have had in things like BMD upgrade costs in your
President's budget, or the radar upgrade costs on the Zumwalt
presentation in NAVSEA in February of 2008, and I can give you
the rest of the documents; when you work out the figures, those
costs that the Navy has provided, it appears that if you wanted
to have a baseline DDG 51 restart, that the cost, according to
your figures, would be about $3.1 billion, with an SPY-1D with
BMD capability versus dual-band radar (DBR) with BMD of--for
the Zumwalt of about $2.6 billion. Then if you bring it to the
15-plus decibels (db), the cost is about $4.8 billion for the
DDG 51 restart and about $3 billion to get to plus-15 for the
Zumwalt. My question is not that these figures are right or
wrong. Why are your figures today correct, but these figures
from your documents aren't in the past? What has changed in the
costing of these radars and these combat systems? Because,
again, I think it goes to the credibility of coming forward
today and saying, which you did, Admiral, it is going to be
unaffordable with the Zumwalt; yet just back in February, we
were saying it was affordable.
Ms. Stiller. I guess I would say that this decision is
based on the requirement and a threat, not an affordability
decision. But back to your numbers----
Mr. Sestak. Are we making this decision not based upon
affordability today? Is that what you are saying?
Admiral McCullough. Absolutely.
Mr. Sestak. So then why not go with the Zumwalt, since you
don't care about affordability? You told us earlier in the
testimony that you cared about affordability, that it would be
unaffordable was your exact words, which was part of the
reasons you weren't going to go with Zumwalt.
Admiral McCullough. I said it would be unaffordable to
upgrade the Zumwalts to the capability we need. Congressman, I
don't have the numbers in front of me that you do.
Mr. Sestak. Admiral----
Mr. Taylor. Admiral, we have been generous to everyone on
the time. But we need to be fair to some other folks.
Mr. Sestak. I guess my only comment, after having watched
AOAs and studies and capabilities and credibility is, wow, we
are turning on a dime. For a nice niche, I understand that
capabilities move to the left. But what is filling the rest of
the gap? And where are the studies attendant to that strategic
approach and the credibility of the numbers to support it?
Mr. Taylor. The gentleman's time has expired.
If I may, Admiral, the Navy may say that affordability is
not a question. In fairness, in this room, it is obviously very
much a question. I don't recall before the full committee
anyone saying, let's take some money from missile defense and
put it into ships. I don't recall anyone saying, let's take
money out of aerial tankers and put it into ships.
We have got, approximately, throughout the National Guard
they are at 60 percent of their equipment. And I don't recall
anyone saying, let's take it out of the National Guard and put
it into ships. And again, we are wrestling with about a $13
billion shipbuilding account that has been frozen for about 5
years. And even though the Defense budget has grown by $100
billion on President Bush's watch, the money for shipbuilding
has remained frozen, and the fleet has actually shrunk. So,
obviously, we live with some constraints the Admiral does not.
And again, in fairness, I just think that, until we hear the
other subcommittees and the other subcommittee chairmen coming
forward and saying, here, have some money, we have got to do
the best we can with what we have.
Having said that, I would like to recognize Ms. Gillibrand.
Mrs. Gillibrand. Thank you, Mr. Chairman.
I want to continue some of the lines that my colleague, Mr.
Sestak, started. Did you do a comparison of cost studies
between how much it would be to retrofit or to improve the 51s
with the technology that you had specifically developed for the
1000s?
Ms. Stiller. Over time, over the years we have been asked
the question about the 10 engineering development models that
were developed for--that are developed for DDG 1000, and could
they apply on DDG 51?
Mrs. Gillibrand. Right.
Ms. Stiller. Of the 10, there were 3 that we have looked at
very hard. One was dual-band radar. It will not fit on DDG 51.
We understand that. We looked at installing the gun, the
advanced gun system. And that is achievable from a Naval
architecture perspective. The magazine would be significantly
smaller than what you have on DDG 1000.
Mrs. Gillibrand. And did you run the cost for the cost of
the gun on that?
Ms. Stiller. We did cost that, but I don't have those
figures. I can get those to you. And we also looked at putting
the integrated power system on DDG 51. You can do that. There
would be some speed penalties. So that would have to be a
requirements decision on whether we would backfit that in the
modernization program. But we have looked at that in the past.
And those were the three technologies that we thought had the
most promise to go on DDG 51.
Mrs. Gillibrand. So 3 out of 10 can be transferred. And
haven't you spent $10 billion on developing the 10
technologies?
Ms. Stiller. We spent--our total program to date, from 1995
to today, and we have about $13 billion invested. Some of it is
research and development (R&D), as you mentioned, and some of
it is the shipbuilding and conversion (SCN) to buy the lead
ships.
Mrs. Gillibrand. So if those additional seven technologies
were developed because of certain requirements that we had, how
are you going to meet those requirements if you can't utilize
those seven technologies?
Admiral McCullough. Ma'am, as I said in my testimony, there
are some things associated with the reduced manning initiatives
in DDG 1000 that we will continue to look at for application
both in back fit and forward fit. I spoke specifically of the
fire suppression systems, which automatically reconfigure fire
mains and put fire mains out and allow you to reduce manning,
as well as the flight deck fire-fighting system. Ms. Stiller
spoke of the advanced gun system.
As I look through the list of technologies that I have that
we have spent money on for DDG 1000, the peripheral vertical
launch system and advanced VLS has applicability potentially
for back fit, but for definitely forward fit into CG(X). As I
look at integrated composite deck house and apertures that we
tested in the desert, that definitely has applicability to
CG(X). The infrared suppression, we could fit if we decided we
needed that. The integrated power system is available for
future fit and back fit, as Ms. Stiller just said. I spoke to
the fire-fighting systems. We think development of the total
ship computing environment is important. It needs to be
completed to make the DDG 1000s operational. And we will look
at that computing program as compared to other computing
programs and decide which way is the best way to evolve Navy
combat systems. The hull form scale model, we want to take the
ship to sea and see how the different hull form operates in a
real environment. The only one that I cannot see at this time
is the total undersea warfare system. Now there is a mine
avoidance piece of that that we would definitely look at.
Mrs. Gillibrand. Okay. So what you are saying is that, of
the seven technologies that you can't use with the DDG 51s, you
are hoping to use them in the next generation of shipbuilding--
--
Admiral McCullough. Absolutely.
Mrs. Gillibrand [continuing]. With the CG(X)s. So you are
going to skip a generation, but you are going to spend all the
taxpayer money building 51s that don't have these capabilities
that clearly we had requirements for or you wouldn't have
devised them.
So it seems to me we are wasting money investing in the DDG
51s if they don't have the technology capabilities that we
need, and we are going to in fact use those technologies, but
we are going to have skip a whole shipbuilding generation to do
it.
Admiral McCullough. There is a lot of technology that was
put in the ship because of Naval architecture constraints and
some things we were trying to do to reduce manning. The reduced
manning initiatives we will push as fast as we can. But what we
are saying to the Congress today is this is a capability
mismatch with the way we see the threat going.
Mrs. Gillibrand. So you are saying we don't need those
seven technologies.
Admiral McCullough. No, ma'am, I didn't say that. We need
the technologies to take forward. There are some we can use as
backfit into DDG 51. The capabilities to combat capabilities we
see today based on the current and projected future threat is
more suited by DDG 51. We need the technologies to take surface
combatants forward.
Mrs. Gillibrand. Okay. So your testimony at the end of the
day is that the DDG 51s meet the current needs, threat
requirements, than the 1000, than the DDG 1000.
Mr. Taylor. Ms. Gillibrand's time has expired.
Admiral, if you would please answer the question.
Admiral McCullough. Yes, ma'am, that is correct.
Mrs. Gillibrand. Thank you.
Admiral McCullough. Yes, ma'am.
Mr. Taylor. The Chair recognizes the gentleman from New
Jersey. He will be followed by the gentleman from Massachusetts
and then the gentleman from Virginia, and then we will wrap
this panel up and move on to the next panel.
Mr. Saxton. Admiral, I have spent a fair amount of my time
here on the committee dealing with the Special Operations
Command. And one of the strengths of the Special Operations
Command is that they are able to identify threats in real time
as they change and adapt their operating procedures to deal
with those threats. A good example, non-Special Operations
Command, of changing threat occurred beginning in 2001-2002
when we had to deal with the improvised explosive device (IED)
problem. We are still doing that. In order to deal with that
problem, we immediately or almost immediately established an
IED task force to adapt special procedures and make
recommendations to this committee as to how we could protect
the lives and the health of men and women who were subject to
IEDs. So we understand that threat changes. And you have said
that multiple times here today.
In the notes that we have from the Navy, there is a
paragraph here that says: We must consider the evolving
security environment in which we operate. Given the changes in
potential threats and the developing capabilities of potential
adversaries, we are making this move in order to avoid a
threat-to-capability mismatch.
Could you just specifically, as specifically as you can,
say how the threat has changed and how you believe the decision
that you made will best meet that threat?
Admiral McCullough. There are three specific areas. One is
with the increased proliferation of ballistic missiles that
provide anti-access challenges to our forces today globally,
not only the high end threat posed by potential adversaries in
the Pacific but lesser included capabilities in the Arabian
Gulf region, in Northeast Asia, and the ability--or the
proliferation of that threat globally. So the ballistic missile
threat is the first piece.
The second piece is when you see a high-tech threat
capability that is usually resident in a nation-state come off
the beach in a conflict against a non-state actor and strike a
warship and do significant damage to it. It is, where is that
capability going to go next, with what potential non-state
actor? And that happened in the eastern Mediterranean in 2006.
And I will tell you there are nations that are developing quiet
diesel submarine technology and putting it into blue water to
challenge where we operate. And we need improved capability
against the open-ocean deep-water quiet-diesel submarine
threat. And that is where we see the capability that has come
rapidly left from where it was projected. I don't think anybody
ever envisioned Hezbollah being able to launch a C-802, and
they did that quite well.
Mr. Saxton. Well, thank you, Admiral.
And before my time expires, let me just congratulate the
Navy on getting the Freedom underway here in the last week or
so. That is a good accomplishment.
Admiral McCullough. Thank you, sir. We were very pleased
with how the builders trials are going on that ship. And it was
nice to see pictures of her underway, making way with no land
in sight.
But thank you.
Mr. Taylor. The Chair recognizes, again going back to our
initial motion to allow people who are not members of this
committee to speak, the Chair recognizes the gentleman from
Massachusetts, Mr. Kennedy--gentleman from Rhode Island, my
apologies.
Mr. Kennedy. Thank you very much.
I appreciate the opportunity to say a few words. Thank the
Chair.
What I am interested in is obviously getting to the
analyses for the costs, because obviously we have seen the
Congressional Budget Office (CBO) and Government Accountability
Office (GAO) come up with very differing costs. And as the
chairman said, we have to consider the costs as much as you say
that this is about mission. So we really need to get those
costs, as much as you said you don't have the detailed analysis
in front of you, I mean, it is really crucial for us before we
make these decisions.
Admiral McCullough. Sure.
Mr. Kennedy. And frankly, when you are looking at
retrofitting, you know, DDG 51; when you are looking at
reduction loss; and timing is money; and how much you are
factoring in your ability to retrofit that without any loss in
time; being able to get those supply schedules up; do all of
that and keep to a cost schedule when you have already got, you
know, DDG 1000 in the pipeline with the schedules in line and
with costs coming down, given the fact that all your, you know,
cost redundancies have all been embedded in the first ship, and
we are starting to see that come down. I mean, obviously,
trying to compare last ship in the last class with the first
ship in the new class is comparing apples and oranges. And you
know, we know that the first Zumwalt is a very expensive ship,
but it is obviously embedded with redundant costs that aren't
going to be seen in a future ship. And we are buying, you know,
a whole generation of new, you know, technologies for all the
future oncoming generation of cruisers and the CV(N). As you
pointed out, these new technologies are going to be applicable
in other platforms. So I think we have to get all of this in
proper perspective. And it would be really helpful to us if you
did that.
I think the concern is, you know, we have got open
architecture with the Zumwalt, and yet we don't with the old
Aegis system. And you know, how do you begin to retrofit an
open system with a closed system? And obviously, that is not
something you can really do. And so this begs some questions in
terms of industrial base, you know, that I am concerned with.
And then, in terms of the--from what I understand in terms of
the BMD threats, you know, I am not certain that the case has
been clearly made to me that retrofitting DDG 51s is
necessarily less cost compared to upgrading the 1000s. I mean,
you know, like I said, you are still having to re-up the--you
know, doing it one way versus the other still needs to be
presented to me. We still haven't been given the proper
analyses. And I think we deserve to get these analyses really
put in front of us and the historic data and all of this
because, you know, we are all being given information from
various sources, and I don't think we are getting it all
clearly put to us.
So I would really just ask those from this panel and the
next panel to be giving us the straight information so that we
can all work off the same sheet of music here. That is the only
way we can go about making our decisions without making them in
the vacuum. And that is the reason why I am here, is because,
you know, obviously, we want to make these decisions. We are
talking about costly decisions if we don't make the right ones.
And you know, capabilities are very important. And we really
want to make sure we have the right capabilities. And putting,
you know, new weapons systems on old ships, we want to make
sure that--from what I have been told, that doesn't make a lot
of sense because it doesn't work. You know, trying to retrofit
modern technology with old systems doesn't really necessarily
work. And we are looking at new threats. Well, how do we
incorporate the new technology to meet those threats? So I know
a lot has been discussed today, and I am here to listen and
learn, but I am anxious to also get all the information that
you said that you are going to provide this committee as well.
Admiral McCullough. Yes, sir, we will be glad to provide
that level of detail on cost and also the technological path.
And I would say that your reference to open architecture in the
Aegis system, the older Aegis systems, are closed. It is all
proprietary Lockheed Martin. With the Congress's help, the Navy
has spent a lot of money to get the system to be open
architected so we can publish it in our library, and all the
interface standards are known by all the corporations that
allow free market competition for upgrades to both the hardware
and the software piece of the program. But we will be happy to
provide you that detail, sir.
Mr. Kennedy. And you know, that obviously is going to save
the government money in the years ahead. But time most of all
because you can, you know, be able to move in and out new
systems as the open architecture will allow. And obviously, we
are anxious to reduce the time delays and move the best and the
brightest folks to be able to take advantage of the latest in
technology and give it to our people in the field ASAP when it
becomes available. So it is a big benefit of what our last
moves have been in terms of this, you know, DDG 1000. And that
is the aspect of it that we don't want to lose if we are
talking about different hulls.
Mr. Taylor. Mr. Kennedy, if you can, wrap it up, please.
Mr. Kennedy. Okay. If you can't retrofit the old hull with
the new technology, what happens to the new technology is what
I am asking you.
Admiral McCullough. Yes, sir. We will provide you that
information. And then, one thing, when I said this is a
capabilities-based decision on the part of the Navy, I don't
mean to ever imply that we don't look at the cost based on
affordability. Because we are very gracious of the money that
the Congress provides to operate and maintain the Navy. So when
I said it was a capabilities-based decision, that is what drove
us, but we are very conscious of how much things cost. And I
will be glad to get you the information on the costs and
details as well as the technology flow.
[The information referred to was not available at the time
of printing.]
Mr. Taylor. The Chair thanks the gentleman.
The Chair now recognizes the gentleman from Virginia, Mr.
Wittman.
Mr. Wittman. Thank you, Mr. Chairman.
Just one more question for Admiral McCullough. Again,
getting a little more general, broad in scope, there has
obviously been some challenges in the costs, rising costs of
our shipbuilding programs. I was wondering, has the Navy or the
National Shipbuilding Research Program (NSRP) explored
different software applications, such as the COTS software or
other technologies, that might enable these efforts to be a
little more cost-effective both in the design, engineering, and
manufacturing of the vessel? And another part of that question,
is I know the Sec Nav and CNO often cite best practices and
lessons learned from foreign shipyards. And can you tell us a
little bit about how those best practices might succeed here in
the United States? And are we able to apply those similar
practices or technologies here?
Ms. Stiller. Yes, sir, the National Shipbuilding Research
Program that you talked about has been in place for quite a
while now. And it has evolved over the last couple of years
where we wanted more stakeholder involvement in the process. So
the program executive officers that buy the carriers and the
submarines and the surface ships for the United States Navy
have an active role with industry to define what projects ought
to be explored, where they see there would be benefit on
programs that are coming up or in process. So I would say that
is a very well run program and has really afforded us a lot of
opportunities. As for where can we learn from the foreign yards
and how they have become efficient, each of our shipbuilders
has gone and benchmarked other yards. And we have also had an
OSD study that benchmarked our yards versus the European and
Asian shipyards and has found, from 2000 to 2005, there has
been improvement in our U.S. yards in certain areas. So I think
you can see the improvements as each of the yards has brought
them in and put them into their processes. So, yes, sir, we
have certainly seen leveraging their experience into our
shipbuilding programs.
Mr. Wittman. Thank you, Mr. Chairman.
Mr. Taylor. Thank you.
And I, hopefully in fairness to all concerned, have waited
until last. And I very much appreciate all of the questions.
We have been very generous in the time. We probably are
going to stick closer to the five-minute rule in the next
round.
But a couple of observations. In the lead-up to the budget
vote of May the 9th, 2001, President Bush would repeatedly go
on television and say that some economists worried about us
paying down the debt too soon. I would like to find that
economist. He said that we could spend more, collect less, and
somehow balance the budget. We are $4 trillion deeper in debt
than when we took that vote.
Since that time, in fairness, Congress has passed a huge
prescription drug benefit bill, very expensive. We have been
involved in two very costly wars, both in human lives and in
dollars. We have had at least seven hurricanes hit our country.
Midwest floods, tornadoes, and a lot of very expensive things
happened.
What this committee has to do is struggle with the reality
that neither of the Presidential candidates is proposing a
substantial increase in the shipbuilding budget, and that every
ship that is proposed is a great ship. The question is, where
is the money for these ships going to come from?
Ms. Stiller, not that long ago, one of your colleagues, and
a man I consider to be a great national resource, Mr. Young,
made a statement before the Senate Armed Services Committee
that he felt like if we were to continue the DD 1000 program
that at some point the price would come down to about $2.6
billion per ship. We sent the Department and Mr. Young a letter
about a month ago saying that if he could find any contractor
anywhere in America who would commit to that firm price for
follow-on vessels of the DD 1000, that the committee would drop
its objections to the third vessel.
Now, we have had a month, and we have had a heck of a lot
of time for the two potential vendors to take a look at it,
come back to us with a firm, fixed $2.6 billion price. Have
either of the contractors stepped forward with that contract?
Ms. Stiller. Sir, I am not aware if they have.
Mr. Taylor. Admiral, you strike me as a very smart man, so
I am going to ask you a fairly simple question. At the moment,
what does the Navy project the cost of a DD 1000 to be when
they are delivered, the first two?
Admiral McCullough. About $3.2 billion, sir.
Mr. Taylor. What did the Navy project the cost of the LCS
to be?
Admiral McCullough. Basic construction costs were projected
to be $220 million when we started the program.
Mr. Taylor. And the cost of that fairly simple warship is
now expected to be?
Admiral McCullough. About two and a half times that, sir.
Mr. Taylor. About two and a half times, for a fairly
simple, what was intended to be a fairly simple low-cost
alternative to ships. Given that, what degree of confidence do
you have that that the DD 1000 will be delivered at $3.5
billion?
Ms. Stiller. Sir, I have a tremendous amount of more
confidence than what we saw in LCS. As you well know, the Naval
Vessel Rules were in development when we were in design on LCS.
That is not the case on DDG 1000. Naval Vessel Rules were
approved and in place. As you know, we started construction on
LCS vessels before the design was barely started. And as I said
earlier, in the case of DDG 1000, we will be 80 to 85 percent
complete with the design before we go into construction. I am
not going to tell you there won't be challenges on lead ships.
There always are. But I don't see us set up in the same way
that we were on LCS on this program.
Mr. Taylor. So you are telling me you have a fairly high
degree of confidence it is going to be delivered at $3.5
billion?
Ms. Stiller. Sir, the contract--yes, sir. It is $3.2
billion, but yes, sir, at this point in time, I see no reason
to say we won't be able to deliver. The companies, we awarded
the contracts, they feel like they can deliver for that amount
of money. So I am fairly--I am very confident at this point.
But the dynamic is, what is the future surface combatants, and
what is behind it? And that is important to the yards as well.
Mr. Taylor. The goal, the minimal size articulated by the
Navy for the surface fleet is what?
Admiral McCullough. It is 88 surface combatants plus the 55
LCSs, I believe, is what was in the 2009 shipbuilding plan.
Mr. Taylor. But the total number, and I think it was first
articulated by Admiral Clark when he was CNO and repeated by
Admiral Mullen and repeated again by Admiral Roughead, your
goal is how many total ships?
Admiral McCullough. Admiral Roughead refers to it as a
force structure floor of 313 ships. Admiral Mullen referred to
it as a 313-ship force structure plan. So 313 is the minimum
number of ships, with a maximum acceptable risk that we believe
we need.
Mr. Taylor. And just to walk the people of this Nation
through this, the fleet today is approximately 290?
Admiral McCullough. 280 ships, sir.
Mr. Taylor. 280 ships. So to get to 313 would require
approximately how many ships to be built each year, and how
long for each of those ships to remain in the service?
Admiral McCullough. Design service lives (DSLs) vary, and
the program is laid out to recap based on the service lives of
the ships. For example, combatants are about 35 years. Aircraft
carriers are 50 years. And so we program recapped it to
maintain the force level at the right capability mix. I would
tell you it is about 12, 12 and a half ships a year.
Mr. Taylor. Okay. Given that the shipbuilding account has
been frozen at roughly $13 billion a year by the President's
request, and Congress has tweaked that a little bit each year
and made it a little bit bigger, but it is still not much more
than $13 billion, given the cost of this ship at $3.2 billion
per copy, best case scenario, how many ships does that let you
build a year?
Admiral McCullough. I believe it was 7 in the fiscal year
2009 program, and we are looking at 10 in the fiscal year 2010
program that is under debate, or under submittal to the Office
of the Secretary of Defense.
Mr. Taylor. But this year's budget request was for seven?
Admiral McCullough. Yes.
Mr. Taylor. Based on the reality of these numbers.
Admiral McCullough. Yes, sir.
Mr. Taylor. The committee tweaked that up to I believe 10
by moving--by canceling the third--I am sorry, by pausing the
third DD 1000, put in an LPD and additional T-AKEs into the
mix. The committee was able to take the President's request and
get it up to 10, but still dealing with the harsh realities of
a $13 billion building account. Is that correct?
Admiral McCullough. I have seen the marks, sir, I will
defer to you on the marks.
Mr. Taylor. The point, I would remind the committee, is
that this committee, I think very wisely, is spending $18
billion on mine resistant ambush protected vehicles (MRAPs) so
that the kids who are on patrols in Iraq and over the next
years are going to be less likely to die from improvised
explosive devices. We have a huge bill coming on aerial
tankers. That alone is going to be between $35 billion and $40
billion to build the first 179. The National Guard is at about
60 percent of its equipment, and we do not operate in a vacuum.
All of these things have to happen.
Again, I personally want to commend Admiral Roughead. He
was good enough to sometime last fall throw this proposal at
me. It took me some time to think it through, and it obviously
would make a change at both the Mississippi shipyard and the
Bath shipyard. But given the harsh economic realities, I think
he made the right decision, and I think he should be commended
for that decision.
Admiral, I want to thank you for appearing, and, Ms.
Stiller, I want to thank you for being here.
Mr. Kennedy has a follow-up.
Mr. Kennedy. When you give your analysis, can you give us
ships at sea days, because when we talk about ships at sea that
are available, we are interested in the days that they can be
at sea. New technology in Zumwalt gives us a lot more days at
sea, from what I understand, because of its commercial off-the-
shelf and the embedded technology makes it so it doesn't, like
the old Arleigh Burkes, have to come in and spend a lot of time
being re-upped and reworked, and spend less lifetime in the
shipyard, so to speak. So it is more useful to the Navy more
often.
What we are talking about is total number of days that it
can actually be used by the Navy. So we want real apples-to-
apples comparison.
Admiral McCullough. Yes, sir. We can give you the current
surface combatants and the projected operational availability
of DDG 1000. We can provide that.
[The information referred to can be found in the Appendix
beginning on page 132.]
Mr. Taylor. Last, I want to remind this committee that it
was the will of this committee and the full House and the full
Senate that the next generation of surface combatant will be
nuclear-powered. Mr. Bartlett began pushing that idea when he
was the chairman of this committee, and fuel at that time was
about $70 a barrel. And last time I checked, it was over $130 a
barrel, making Mr. Bartlett's judgment at that time look even
smarter now.
Again, I commend the CNO because I think the extension of
the 51 program gets us to a nuclear cruiser quicker than the
building of the 1000. So for a lot of reasons, Admiral, I hope
you would pass on my compliments to Admiral Roughead. I think
he made a tough but right decision for the future of the Navy.
Thank you for appearing.
Mr. Taylor. The Chair now calls our second panel.
Our second panel consists of witnesses well known to this
committee: Mr. Ronald O'Rourke, a Senior Analyst of Naval
Affairs with the Congressional Research Service; Dr. Eric Labs,
who conducts independent ship cost analysis with the
Congressional Budget Office (CBO); and Mr. Paul Francis, the
head of the Maritime Analysis Branch of the Government
Accountability Office.
We thank all three of you gentlemen for being here. By
prior agreement of the committee, you will be recognized for
seven minutes apiece. Who wishes to go first?
Mr. O'Rourke, if you don't mind.
STATEMENT OF RONALD O'ROURKE, SPECIALIST IN NAVAL AFFAIRS,
CONGRESSIONAL RESEARCH SERVICE
Mr. O'Rourke. Chairman Taylor, Ranking Member Bartlett,
distinguished members of the subcommittee, thank you for the
opportunity to testify on this issue. With your permission, I
would like to submit my statement for the record and summarize
it briefly.
Mr. Taylor. Without objection, so ordered.
Mr. O'Rourke. I would like to make five basic points.
First, the recent change in what the Navy wants to do with
destroyer procurement appears rooted not just in a concern
about shipbuilding affordability, as the Navy witnesses have
stated, it also reflects a shift in thinking concerning
relative mission priorities. The Navy now wants its destroyer
procurement over the next several years to be oriented toward
improving the fleet's capabilities for, among other things, air
and missile defense.
This shift in mission priorities for new destroyers might
be rooted partly in a several-year slip in the schedule for
procuring the lead CG(X). The Navy had wanted to begin
improving the fleet's air and missile defense capabilities
through a procurement of CG(X)s starting in fiscal year 2011,
but the date for procuring the lead CG(X) now appears to have
slipped several years.
The shift in the Navy's relative mission priorities for new
destroyers also reflects a Navy reassessment of the
capabilities that will be needed in coming years to conduct
certain operations.
The DDG 1000 is a multi-mission destroyer with an emphasis
on land attack and operating in littoral waters. This mission
emphasis traces back to the program's origins in the early
1990's, and predates certain more recent developments such as,
for example, the concern that has developed in recent years
over Chinese modernization, an effort that appears aimed in
part at improving Chinese capabilities for operating in blue
waters, and includes, among other things, the acquisition of
more modern submarines, antiship cruise missiles and theater
ballistic missiles, including, as DOD has now noted, antiship
ballistic missiles.
The DDG 51 is a multi-nmission destroyer with an emphasis
on blue-water operations, including air defense and a recently
added capability for missile defense. So my first basic point
is that this change in the Navy's mission priorities for new
destroyers is a key factor in understanding and evaluating the
Navy's change in its preferred path for destroyer procurement.
My second point is that although the discussion of
restarting DDG 51 procurement has focused on building repeat
copies of the current flight to a design, there is also the
option of procuring a modified version of the DDG 51 that would
have reduced operating and support (O&S) costs. My statement
discusses three potential ways for reducing the O&S costs of
the DDG 51, and shows some estimates of the O&S savings that
might result from such steps. The key point here is that the
DDG 51's O&S cost is not written in stone. It can be reduced.
The DDG 51 design can also be modified to improve its air
and missile defense capabilities, and my statement outlines
some options for doing this, by equipping the ship with an
improved radar or additional missile launch tubes, or both.
My third point is that although the discussion has focused
on building new DDG 51s, this situation raises the question of
whether the current program for modernizing the existing DDG
51s should be altered so that the modernized ships would have
reduced O&S costs and perhaps also improved air and missile
defense capabilities.
Expanding the scope of work to be done in the DDG 51
modernization program could have implications for the
industrial base part of this situation, which I will get to in
a moment.
My fourth point is that an additional option for improving
the fleet's air and missile defense capabilities through ship
procurement over the next few years would be to procure a few
or several noncombat ships equipped with a powerful radar for
supporting the fleet's missile defense operations and perhaps
also air defense operations. The aim in procuring these adjunct
ships would be to provide the fleet in the nearer term with
some powerful missile defense radars at relatively low cost,
pending the entry into service later on of significant numbers
of CG(X)s. These noncombat radar ships could be similar to the
Cobra Judy replacement ship.
My fifth and final point concerns the shipbuilding
industrial base. Policymakers have expressed concern about the
potential impact on the shipyards of a decision to stop DDG
1000 procurement and restart DDG 51 procurement. Particular
concern has been expressed about Bath Iron Works since
construction of surface combatants is Bath's primary source of
work. As I discussed in my statement, a notional calculation
suggests that building 9 or 10 DDG 51s might provide roughly
the same number of shipyard labor hours as building the final
DDG 1000s, and that assigning 5 or 6 of those DDG 51s to a
shipyard might provide that shipyard with roughly the same
number of labor hours as it would have received if it were the
primary yard for building 3 of the final 5 DDG 1000s.
But there is more to the issue than that. In discussing the
issue regarding Bath and Ingalls, a key point is that building
DDG 1000s or DDG 51s are not the only options for supporting
these yards. To the contrary, there are several additional
options that might be used as supplements to help maintain
employment levels and preserve key shipbuilding skills.
My statement lists a number of these options, and it is not
an exhaustive list. One of those options would be to assign the
modernization of existing DDG 51s to the two yards that
originally built the ships, meaning Bath and Ingalls. I
maintain a report on the age of ship modernization program, and
as I discuss in that report, some industry sources have
advocated shifting the DDG 51 modernizations to Bath and
Ingalls. And if the scope of work in the DDG 51 modernization
program were increased to include steps like those I mentioned
earlier for further reducing the ship's O&S costs or for
improving their air and missile defense capabilities, then that
could increase the amount of supplementary work that would be
provided to Bath and Ingalls by assigning the modernization to
those two yards.
As I just mentioned, that is only one option for putting
additional work into Bath or Ingalls. There are several others.
The key point is that building DDG 1000s or building DDG 51s
are not the only way to support the yards.
Mr. Chairman, this concludes my statement. Thank you again
for an opportunity to provide my statement. I will be happy to
answer any questions the subcommittee has.
Mr. Taylor. Thank you, Mr. O'Rourke.
[The prepared statement of Mr. O'Rourke can be found in the
Appendix on page 75.]
Mr. Taylor. Dr. Labs.
STATEMENT OF DR. ERIC J. LABS, SENIOR ANALYST, CONGRESSIONAL
BUDGET OFFICE
Dr. Labs. Mr. Chairman, Congressman Bartlett, and members
of the subcommittee, I appreciate the opportunity to appear
before you today. I would like to make several points, but I,
too, would like to summarize my statement for the record and
submit the formal one.
First, the total cost of the Navy's shipbuilding program
through the period covered by the DOD Fiscal Year Development
Plan (FYDP) would be about 30 percent higher than the Navy
currently estimates.
Building the newest generation of destroyers and cruisers
probably would cost significantly more than the Navy estimates.
My third point, building two DDG 51 Arleigh Burke class
destroyers per year between 2010 and 2013 would cost less than
building five more DDG 1000s. Counting projected operating
costs over 35 years, the total ownership cost of five DDG 1000s
would almost equal of that of eight DDG 51s.
According to the budgetary information provided in the
DOD's 2009 FYDP, the Navy estimates that the cost of all its
shipbuilding activities would average about $16 billion a year
in 2009 dollars over the period covered by 2009 to 2013. That
amount is 25 percent greater than the $13 billion that Navy
spent on average for shipbuilding between 2003 and 2008.
CBO's estimates of the costs of those same activities would
be about $21 billion through 2013, or 30 percent more than the
cost projected in the Navy's plan, and about 60 percent more
than the amount the Navy has spent recently.
To the DDG 51 destroyer, the Navy had planned to buy one
DDG 1000 destroyer each year between 2009 and 2013. In addition
to the two authorized in 2007, the service's 2009 budget
suggests that the Navy expected the two ships to cost $3.2
billion each, with the average cost of the five follow-ons $2.3
billion each. CBO, by contrast, estimates the first two to be
about $5 billion each, with the average cost of the follow-ons
to be $3.6 billion each. And we used the DDG 51 program as an
analogy for estimating those costs.
The Navy has asserted that the basis for CBO's estimate may
not be valid because the DDG 51 had a number of problems in the
early stages of its construction that should not be expected to
occur during the construction of the first DDG 1000s.
Specifically, the design of the lead DDG 51 was disrupted and
delayed because a new design tool being used at the time was
incomplete and not well understood. It had to be abandoned and
the design restarted using more traditional methods. The design
of the lead DDG 51 was thus about 20 percent complete when
construction began.
By contrast, according to the Navy, the design of the DDG
1000 progressed far more smoothly. The Navy expects to have the
design 80 to 85 percent complete when construction begins this
summer.
In addition, because the DDG 51 is a smaller, more compact
ship, the Navy believes that on a ton-per-ton basis it has been
more difficult to build than the DDG 1000 class is expected to
be.
Although the Navy may not encounter the same problems
constructing the lead DDG 1000 it did when constructing the
lead DDG 51, CBO expects that the service will encounter other
problems that will increase the cost. Problems with the first
littoral battle combat ships and with the lead LPD-17
illustrate the difficulties the Navy has had. Both the LCS and
LPD-17 are much less complex technology than the DDG 1000. And,
in addition, while the designs of littoral combat ships and the
DDG 51 were only 20 to 30 percent complete at the start of
fabrication, the design of the LPD-17 was about 80 percent
complete at the start of fabrication, and it was arguably the
Navy's most troubled program over the last 20 years.
A comparison of the Navy's estimate for two additional DDG
51s and an assessment for the seven DDG 1000s which were slated
to be purchased in 2013 illustrates the risk for cost growth.
This information was provided to the Senate. The Navy stated
that if the Congress authorized the purchase of two new DDG 51s
in 2009, the cost would be about $3.3 billion, or slightly less
than $1.7 billion each.
The Navy has also stated that to build the cost of the
seventh DDG 1000 in 2013 would be about $2.4 billion in 2013
dollars. If you adjust those dollars down to the same-year
dollars, 2009 dollars, the Navy's estimates imply that the
5,000 extra tons that the DDG 1000 is larger than the DDG 51
will increase that ship's cost by only $200 million, or 10
percent, compared to a DDG 51.
If CBO's estimates prove correct, the lead ships of the DDG
1000 program would actually experience lower cost growth than
many of the Navy's lead ship programs of the past 20 years. The
Cost Analysis Improvement Group (CAIG) has done an analysis
that has shown that 5 of 8 lead ship programs experienced cost
growths of over 50 percent. And the CAIG's analysis did not
include the Virginia class program, which experienced cost
growth of 11 and 25 percent for the first two ships. Nor did it
include the LCS, which has experienced cost growth well over
100 percent.
Looking at the cost of restarting the DDG 51 program, the
subcommittee specifically asked CBO to examine those costs of
canceling the program and restarting DDG 51 production. The
Congress authorized funding for what would be the last DDG 51s
in 2005. Out of a total program of 62 DDG 51s, 9 remain under
construction.
CBO does not have sufficient information available to
determine how much it would cost to restart the production
above extrapolating the cost of the ships themselves. CBO
assumed it would cost $400 million to reestablish the lines,
and thus buying eight DDG 51s, two per year between 2010 and
2013, would cost a total of $15.7 billion. Building five DDG
1000s between 2009 and 2013 would cost $18.5 billion. Twelve
DDG 51s, or three per year between 2010 and 2013, would cost
about $21.4 billion.
With respect to total ownership costs of the DDG 1000 and
DDG 51 destroyers, the Navy has stated that total operating
cost of a DDG 51 would be about $41 million per year, or about
10 percent more than the DDG 1000 $37 million annual operating
cost. That difference is much smaller than the Navy previously
estimated. In 2005, the Navy asserted that operating a DDG 51
would cost about 30 percent more than operating a DDG 1000. In
comparison, CBO at that time testified before this subcommittee
and said that the cost difference would actually be about 6
percent more for a DDG 51 versus a DDG 1000.
CBO expects that the total ownership cost of a DDG 51 would
be about 60 percent the cost of a DDG 1000. Over the course of
a 35-year service life, the cost to buy and operate a DDG 51
would be $2.4 billion. In comparison, the total cost to build
and operate a DDG 1000 destroyer would be $3.9 billion. Thus,
the cost to buy and operate five DDG 1000s would total $19.4
billion over 35 years. In comparison, the cost to buy and
operate more DDG 51 destroyers over a period of 35 years would
be about $19.2 billion for 8 ships and $26.8 billion for 12.
Thank you, Mr. Chairman. That concludes my statement. I am
happy to answer any questions you may have.
[The prepared statement of Mr. Labs can be found in the
Appendix on page 93.]
Mr. Taylor. Dr. Labs, for the record, what was the cost of
a barrel of fuel when the CBO ran these calculations?
Dr. Labs. You are talking about the total ownership costs.
I didn't compare the cost of fuel, Mr. Chairman. I used the
statement of operating costs that the Navy used in its letter
to the Senate. So whatever the cost of fuel was when they
projected those costs.
Mr. Taylor. For the record, I would like that comparison,
because it is my understanding that the DDG 51 uses less fuel.
With the significant growth of the cost of fuel, and without a
lot of confidence that that price is going down, I think it is
a fair question to ask and something that we need to look at.
[The information referred to can be found in the Appendix
beginning on page 132.]
Mr. Kennedy. Mr. Chairman, I didn't understand what he was
saying in terms the operating in a lifetime costs, you know, it
is half the number of people on the DDG 1000 as the DDG 51.
What was the relative cost of manning the DDG 1000?
Dr. Labs. DDG 1000 is 148 crewmembers, and the DDG 51 is
about 320 or 312.
Mr. Kennedy. So over 35 years, what is the difference in
operation?
Mr. Taylor. Mr. Kennedy, you will be recognized in regular
order.
Mr. Kennedy. He just testified, and it was very unclear
what he was saying.
Mr. O'Rourke. On the question of fuel costs, I actually put
that question to the Navy. They provided that answer to me a
few days ago, and they said that the steaming cost figures that
show in Admiral Roughead's May 7 letter to the Senate reflected
an analysis done in February and reflected a fuel cost of about
$112 per barrel.
Mr. Taylor. Thank you.
The Chair now recognizes Mr. Francis.
STATEMENT OF PAUL L. FRANCIS, DIRECTOR, ACQUISITION AND
SOURCING MANAGEMENT, U.S. GOVERNMENT ACCOUNTABILITY OFFICE
Mr. Francis. I appreciate being invited here today to
participate in the discussion of surface combatants. I ask that
my written statement be submitted for the record.
Much of what I am going to talk about today comes from a
report that we issued today on the DDG 1000. At GAO, we have
not analyzed the comparison between continued construction of
the DDG 51 and the DDG 1000; however, much of what I am going
to say today is going to address the likelihood, and rather, I
would say, the unlikelihood that the Navy would have been able
to execute the DDG 1000 program within its current budget in
terms of time and money.
Let me start off by saying that I think the Navy has done
some really good things to manage the DDG 1000 program. I think
their approach to technology development has been sound. I
think their software-development program has had a very good
approach. And I believe their design process which they modeled
after the Virginia class submarine has been much better than
prior classes.
But even with these best efforts as the Navy stands to
begin construction of the first DDG 1000, the cost and the
design and the construction schedule are under strain, and let
me give you some detail on that.
In the recent schedule for the program, they have extended
the delivery of the ship by about one year, which I think is a
good thing, but within that schedule, some key events have been
pushed out two to three years. The net effect has been a lot of
the margin in the construction schedule to adjust for likely
problems has already been taken out.
For example, light off of the ship is a key event, and that
is when you turn on all of your key ship systems, hull,
mechanical and electrical, and all of your mission systems,
combat systems like your radars and gun systems and sonar.
Originally on the DDG 1000, they were all going to be lit
off in 2011. Now that has been split in two. Now the ship will
be lit off in 2011, but the combat systems will be lit off in
2013, two years later. The significance of that is it is just
before sea trials begin, so the margin between turning on the
combat systems and beginning sea trials has been compressed.
The integrated power system that provides the electricity
and the propulsion for the ship, originally the plan was to
test that on land in 2008, install it on the ship in 2009, and
then have that ready two years in advance of lighting the ship
off. The current plan now is to install on the ship in 2009,
but not complete the testing until 2011. So the test of the
integrated power system will follow installation by two years
so that problems discovered will be have to be retrofitted onto
the ship. And again, when they have those test results, it will
be just when they are ready to light off.
Dual-band radar. The original plan on that was to have both
a multifunction radar and the volume search radar tested and
installed on the deckhouse before the deckhouse was shipped
from Gulfport to either one of the yards. Now the current plan
is only to put the multifunction radar in the deckhouse first.
The volume search radar has slipped from 2010 to 2013. They
won't put the volume search radar on the ship until it is
already afloat. And again, that will be just before light off.
Finally, software has also slipped three years. So
originally we were going to have the software in 2010. Now it
will be 2013. Again, the significance of that is the software,
the volume search radar and the light off are all going to
occur in 2013, so there really is no margin for error in the
schedule.
I look at these as practical, sensible decisions the
program office has to make because the combat systems have been
delayed. They are not going to be there. But I think the
question for oversight is just before we have begun
construction, it seems like we have executed all of the
workarounds that you would normally execute during
construction. So the question is where does that leave us when
we do run into problems in construction, and I think they will
result in needing more time and money.
In the area of money, the ship construction budget is $6.3
billion for both ships. I think that is unlikely to be enough
to pay for the ships. Right now our historical analysis of lead
ships is that they overrun by about 27 percent. Most of that
cost growth occurs in the second half of construction. Even the
Pentagon's independent cost estimates say those two ships are
going to cost almost $900 million more than the Navy estimates.
Being a little more specific, the Navy has about $363
million left in unobligated money. That is money that is not
under contract; yet a couple of big things are not under
contract yet, including the volume search radar and some of the
combat systems. The cost estimates for those are ranging
between $340 million and $852 million, so the Navy has just
enough money now to cover the low end of those systems not
under contract, assuming no cost growth.
That is part of the reason why we question whether it was
prudent to go forward with contracting for the third ship in
January 2009. Our sense was there would not be enough
construction experience to validate the cost estimates and get
a good track record on the first two ships before getting a
good contract for the third ship, and, of course, setting the
prices for the remaining four. Besides that, the Navy was not
going to be able to begin construction of the third ship until
July 2010 under the best of circumstances, so that ship could
be deferred, in our view, without a major impact on the
industrial base.
Let me just wrap up by making a few comments on the Navy's
proposed decision to truncate the program. In my view, it seems
like it is a painful decision, one that is borne out of maybe
fiscal and changing requirements necessity. But the decision is
a poor reflection, I think, on the requirements, acquisition,
and budgeting processes that developed the business cases for
these ships.
I don't think it is a case of poor execution that the
program office couldn't execute the program well, but rather a
business case that wasn't executable. And it is not isolated.
It is the last in a series of business cases that we couldn't
execute for the time and money set aside. So I think we really
have to ask ourselves why is this? Why do ship systems get
approved and presented for budget that can't be executed for
the amounts that are estimated? And I think one of the reasons
is too many demands are made on the ship programs.
I think that what ends up happening is we get unrealistic
compromises to try to meet everyone's demands. I will say on
the DDG 1000, sort of a microexample where the scope of the
ship was set around mission requirements. Then the desire to
reduce manning increased the complexity of the ship further.
But the budget for the ship--the cost estimate was constrained
by the budget, and the schedule was constrained by the
shipyard's workloads. So you ended up with something that you
couldn't execute.
So just in closing, I was very much struck by Admiral
McCullough's comment that current fire support capabilities
were sufficient to meet the need, yet three years ago that
didn't appear to be the case, and that was the basis for the
ship. So we have to ask those questions. What is it about these
processes that aren't giving us the right answers at the right
time?
Thank you, Mr. Chairman.
Mr. Taylor. Thank you.
[The prepared statement of Mr. Francis can be found in the
Appendix on page 107.]
Mr. Taylor. And I am going to open this up to the panel. In
the summer of 2006, then-Chairman Bartlett took us to visit
several of the shipyards, including the Marinette shipyard. In
the summer of 2006, we were told at Marinette everything is on
track, everything is on budget, and sometime between that
visit, which I am going to guess was in August, and about
November we started getting frantic phone calls from the CNO
that we have a world of troubles. We are way over budget, we
are way behind schedule. It was several things.
So my question is given what has happened with what was
supposed to be a fairly simple, low-cost warship, is there a
professional guidepost based on a percentage of the completion
of the hull where people can look at a ship and say, okay, we
are past, let us say, the 80 percent mark, we are still on
budget, and we have reason to believe that everything is
tracking the way it should?
The reason I ask that is at what point do we pass that mark
on the DDG 1000 so that we have some degree of certainty that
the $3.2 billion number that Ms. Stiller just gave us will be
accurate and that we are more or less out of the woods?
And so if that is a fair analogy, that is what I am looking
for, because based on the LCS, I have a very low degree of
confidence that that $3.2 billion target will be met. I open
that question up to the panel.
Mr. Francis. Mr. Chairman, let me start off. We have found
it very difficult, quite honestly, to find those right way
points because it seems like every program has a different set
of points and uses a different set of terminology to describe
the design process. But nonetheless, on something like the LCS,
I would say the percentage of the design, the detailed design,
that was demonstrably done as one of those way points, and on
that one you would say not a lot of technical content, so you
wouldn't have to worry so much about technology development. So
I would take that design process and then couple it with what
the yard's experience has been in its construction time lines,
and you would have to match those then to the cost estimate. I
think you can see that up front.
So those are three things that I would list out for
something like LCS.
DDG 1000 adds the dimension of technology uncertainty. So
even though, let us say, your marker for detail design looks
really good, if your radar and your propulsion system and other
things haven't been developed and proven yet, those drawings
aren't any good. So what looks good at this point might get
undone by discoveries with technology.
If they had demonstrated those technologies as they
planned, at this point the confidence level would be very high,
assuming that they funded at a high confidence level in the
cost estimate. And at one point on the ship, they planned to
demonstrate the power system and the radar on a surrogate ship
that would have given us that confidence. So DDG 1000 is going
to be several years, especially until that radar is
demonstrated, that we will have that confidence.
Mr. Taylor. Anyone else?
Mr. O'Rourke. Just to add on a slightly different aspect of
this, I think another issue to be aware of is whether any of
the costs normally associated with building the DDG 1000 will
be deferred beyond the normal accounting period for totaling up
the ship's total procurement cost. We saw a little bit of that
happen with the lead LPD-17, and as I was able to understand
it, something like a little more than $100 million of what
normally would have been included in the end cost of that ship
was deferred beyond the accounting period and was covered
elsewhere in the Navy's budget, which gave us a distorted
understanding, if you will, of what the total cost was to build
that ship. And I think that could be an issue to look at in
connection with the DDG 1000 construction process, to make sure
that elements that are normally costed within the total end
cost of the ship are, in fact, being included there, or whether
there are any elements that are being deferred into other
accounts and other stages of the accounting process.
Mr. Taylor. Thank you.
Mr. Labs.
Dr. Labs. Mr. Chairman, I would add two things to that. I
don't have a scientifically based number. I agree with Mr.
Francis, it does vary from program to program. I sort of follow
a rule of thumb, which is based on instinct and a hunch than
anything else, which is that you want to at least see half, you
know, 60 percent or so of the ship before you are getting a
sense whether things are on cost and on target at that time.
You know, your confidence is certainly growing by that point.
Another point I would make relevant to the LCS program is
one of the big issues there, in my opinion, was that I don't
believe the Navy ever came in with a realistic approach to the
cost of that ship to start with. Any historical analogy to save
the frigate program, the FFG-7, would have told you that a ship
of that size would cost somewhere in the $400 million to $500
million range. If they had started with that premise and worked
from there, I honestly don't believe the LCS would have been in
as much trouble as it has been over the last couple of years.
Mr. Taylor. Gentlemen, we have six people, five-minute
rule. We are supposed to have a hard stop at 1 p.m. I hope the
committee will let us go five minutes over. So we are going to
strictly adhere to the five-minute rule starting with Mr.
Bartlett.
Mr. Bartlett. Thank you.
One of you mentioned that the Navy now says that they have
adequate fire support. I know that through the years there has
been a considerable difference of opinion between the Marine
Corps, whom they are supporting, and the Navy as to what
adequate fire support is. Are they now in agreement?
Mr. Francis. That is what I understand from the Navy. We
did a report for this committee, this subcommittee on that
issue two years ago, and they had finally reached agreement,
and the agreement was there was a gap that needed to be filled,
and it needed to be filled by the DDG 1000. So to hear today
that the agreement is that, in essence, gap is not there and
doesn't need to be filled by the DDG 1000 would represent, in
my view, a new agreement.
Mr. Bartlett. Thank you.
When we first envisioned the DD(X) program, how many ships
were envisioned?
Mr. O'Rourke. In the early stages when it was still DDG 21,
a number as high as 32 was mentioned. And that then became 16
to 24, and that got moved down to 12, and then it became 8 and
then became 7.
Mr. Bartlett. As I watched this occur, I was impressed that
what we ended up with was--even at seven ships, it was not a
class of ships, it was little more than a technology
demonstration platform, and I thought that two was a little
different number than seven, if, in fact, it was simply a
technology demonstrate platform.
I signed onto this program when I was assured that the hull
was going to be used in CG(X). I feel a little had now when I
am told the hull will probably not be used in CG(X), because my
original disposition was that if all it was was a technology
demonstration program, maybe we could demonstrate those
technologies on other platforms and save the cost of this class
and begin earlier or enlarge the second class.
Mr. O'Rourke, I was interested in your little charts that
showed the comparison between the cost of the DDG 1000 and the
DDG 51. Of course, where the DDG 51 fell far short was in
manning. How much of a modernization that we might use could
really reduce manpower costs to near that of the DDG 1000?
Mr. O'Rourke. I put that question to the Navy because
Admiral Roughead's May 7 letter to the Senate referred to the
fact that his chart did not include any manpower reductions
that would be realized through the DDG 51 modernization
program. And the Navy came back to me when I asked them about
that, and the understanding that I have based on the Navy's
explanation back to me is that the DDG 51 modernization program
is not officially expected to achieve any further manpower
reductions, but that the size of the DDG 51 crew for other
reasons has recently been reduced by about 18 people from the
figures shown in Admiral Roughead's letter.
So the size of the DDG 51 crew, as explained to me by the
Navy, is coming down by about 18, but not because of the DDG 51
modernization program. And my own statement talks about the
possibility of taking the crew size down further on the basis
of an industry briefing that was given to me five years ago,
and also this subcommittee's own statement along those lines
and a committee report that came out in 2004.
Mr. Bartlett. As the price of oil goes up, the Chinese are
increasing their efforts at scouring the world to buy oil, and
not just oil, but buy goodwill. Coincident with that they are
aggressively building a blue-water navy. None of this, of
course, was accurately predicted in 1995 when we began the
design of the DDG 1000 line.
In view of the fact of what China is doing, and we now have
the LCS, which was not even a dream in 1995, is this not a good
decision to go to the DDG 51, which has more of a blue-water
focus, than staying with the DDG 1000, which had a considerable
littoral focus?
Mr. O'Rourke. As a CRS analyst, I can't say whether a
decision that someone advocates is good or bad, but what I can
tell you is that there have been certain developments in the
Navy's understanding and the general understanding of what the
future operating environment might be that have occurred since
the early 1990's, which was the period when the DDG 21 program
was originally conceived. And one of those major developments
was the growing concern over Chinese naval modernization, which
is something that I track in some detail in another one of my
CRS reports.
Concerns over Chinese naval modernization did not begin to
mount in general discussion until the mid- to, I would say, in
the late 1990's, and the discussion has really only gotten
going on that, I would say, in the last five years or so. So
this, to me, is a much more recent development compared to the
date and time when the DDG 21 program was conceived.
Mr. Taylor. The Chair now recognizes Admiral Sestak from
Pennsylvania.
Mr. Sestak. If I can make a statement, I actually find
today a bit disappointing to some degree to what you spoke
about, Mr. Francis.
From what I can gather over the past months, there has been
a decision that the Intelligence Community has said something
has moved to the left, that we now need a ballistic missile
defense ship at sea to face a more nearer-term threat than we
had had from the Intelligence Community for quite a few years.
I have never met a one-armed intelligence officer because
they are always saying on the one hand, but on the other hand.
However, we are making a dramatic sea change right now, a
strategic sea change for a ship based upon some intelligence,
is what I gather from today's testimony.
Undergirding that is a concern about numbers of ships to
where I had thought, particularly under CNO Clark's tenure when
he proffered that maybe 260 to 300 ships in his 30-year
shipbuilding plan was a way to begin to come to grips as a Navy
that potentially posturing differently, let us say more ships
of BMD stationed in Guam, for whatever reason that that might
be an area of the world where you would want that capability
rather than having to rotate them, taking five to keep one
forward, could begin to give us a Navy that isn't always
turning it appears that we need more money. In fact, the 30-
year shipbuilding plan this year says we need 40 percent more
to do our 30-year shipbuilding plan for 313 ships than just
last year, and then the cost that comes with that.
So my issue today is more of credibility not of
individuals, but of a process of how can Congress truly have
credibility on two areas. One obviously, I think, is the cost.
Do we really know what this DDG Flight II will be? In your
testimony it is a standard stick-shift Flight II, but my
limited knowledge of what that radar is going to have to do if
this threat has truly moved to the left is that radar will need
a lot of upgrade to handle this threat. Where is that cost?
Second, I don't know where the strategic sense of the Navy
is today. We were going to the littorals. Just like Secretary
Gates in the front page of the Post said today for our
military, it is the global war. Now we have gone back to the
blue seas, and I gather there is a spectrum here.
I was taken by the analysis over the years in the Navy that
drove us to a certain position. I am unimpressed by the failure
to provide that same kind of analysis that Congress, I think,
should be making its decision on, not how many ships, but what
is the capability we need. And so I guess mine is more a
statement of disappointment in credibility of a process, not
only how we got here, but how do we prevent it in the future,
the most capable Navy at the least cost. And this is a
strategic sea change. And, frankly, from my limited time in the
Navy, I don't feel I have the factors in front of me to make a
decision, nor have I been able to gain them. This may be the
right decision.
Just for a question, what do you feel about the credibility
of the process that got us here? And, Mr. O'Rourke, the
credibility of the strategic sense of where the Navy is going,
the Navy of the future, because we are making a dramatic change
in integrated air and missile defense (IAMD).
Mr. Francis. Quickly, Mr. Sestak, I do think that we need
to ask some fundamental questions about requirements,
acquisition and budgeting. The discussion today, I think, was
unique in that we are talking about a change in requirements.
Part of my analysis is even had those requirements changed, we
would not have been able to execute the programs as planned. So
maybe that deals more with acquisition and funding. But when
you add the requirements piece, for ballistic missile defense,
that is a portfolio system, so we have to ask a hard question
that if there is a change in that threat, how does that
translate into an Aegis capability? And, secondarily, what did
happen with the fire support requirement for the marines?
Mr. Taylor. The Chair recognizes the gentleman from
Virginia Mr. Wittman.
Mr. Wittman. Thank you, Mr. Chairman.
Mr. Francis, you spoke earlier about the development of
these major systems on board and, because of the delay in the
development of those, those systems not being lit up until just
about the time the ship goes to sea trial. Can you explain some
of the extended concerns about that and how that may either
affect cost or affect delivery times on potentially DDG 1000s,
and how that maybe plays into the decisionmaking on DDG 51 in
the context of what the Navy is presented?
Mr. Francis. Yes, sir.
Our analysis shows that under the current schedule which
has just been readjusted as construction begins, that those key
events, like the integrated power system, the combat systems,
particularly the radar and the software, are all planned to
occur, demonstrate late in the program. If there is any delay
in those systems, light off will get pushed out, which means
the sea trials will get pushed out, which means IOC, the
initial operational capability, will get pushed out.
As the schedule delays, you incur additional costs, the
overhead of the yards, software engineers and so forth. So the
implication of that is if anything goes wrong, if any of those
things don't deliver as planned, and deliveries have been
changed a number of times, we will have cost increases, which
means then that the money we have set aside to buy at this
point the seven DDG 1000s won't be enough, and we will most
likely end up making adjustments in the near-term budget to
accommodate those increases, which will push other ships out.
So I think that is the tie between the two.
Mr. Wittman. One additional question. You had spoken that
the yards couldn't start on DDG 1002, which is the third ship
requested in the fiscal year 2009 budget, until July of 2010 at
the earliest. Do you have any sense when either yard could
start construction of a DDG 51 considering the time frame they
spoke about being able to start on DDG 1002?
Mr. Francis. That I don't, sir. I know there was a
discussion about the reduction gear time line perhaps being the
pacing item, and I thought that was set at 50 weeks. I don't
know if my colleagues have any information on that.
Mr. O'Rourke. The amount of additional long lead time for
the reduction gear is an additional--the time period is the
addition on top of what the normal lead time would be for the
reduction gear. The reduction gear is one longer pole in the
tent, and the other variable in that situation is the extent to
which--and I think Allison mentioned this--the extent to which
you can look at doing the construction of the ship through an
altered sequence that would accommodate a later delivery of the
reduction gear than would normally take place in the sequence.
So 50 weeks on top of the normal lead time.
Mr. Wittman. If 400- to $450 million were appropriated and
authorized for advantaged procurement of a destroyer in 2009,
what do you estimate the industrial base impacts might be if
that decision were made?
Mr. O'Rourke. I think it would depend on what other near-
term work would be put into the yards to make up for whatever
gap might be developing between the winding down DDG 1000 work
before you begin to wind up DDG 51 work. There will be
potentially a valley developing depending on the timing of DDG
51 restart, and then it becomes an issue what other work was
put into the yard to fill out that valley.
Mr. Wittman. Would those dollars smooth out that dip?
Mr. O'Rourke. The sooner you commit money to the 51
restart, the greater likelihood you have of mitigating the
valley between the winding down of the DDG 1000 work and the
winding up of the DDG 51 work.
Mr. Taylor. The Chair recognizes Mr. Courtney for five
minutes.
Mr. Courtney. Thank you, Mr. Chairman.
I would actually like to ask Mr. Labs a couple of
questions. Earlier Mr. Taylor was pointing out the track record
over the last four or five years of a $13 billion flat line for
shipbuilding or average cost for shipbuilding. In your report
on page 2, you estimated--well, you reported, rather, that the
Navy's shipbuilding plan projects a cost of roughly averaging
$16 billion. Your analysis is that it is probably closer to $20
billion; is that correct?
Dr. Labs. That is correct.
Mr. Courtney. If we follow this recent or this new
recommendation to switch from the DDG 1000 to the DDG 51s,
would that change your numbers?
Dr. Labs. Absolutely it would change the numbers. Would
they change the numbers significantly? I don't know. I would
have to actually sort of run those numbers, do the analysis.
Certainly there is a number of changes that the Navy is
also proposing to make, not just the cancellation or the
truncation of the DDG 1000. They are also proposing to push the
CG(X) beyond 2013. That frees up money within the FYDP. I would
need to reanalyze to tell you whether the Navy has gotten
closer to a $13 billion steady state, if that is your desired
aim, or something else.
The basis of the numbers that I have presented in my
testimony assumes two DDG 51s a year, which we assume cost more
than the Navy's estimate for DDG 1000, although I don't think
that they cost more than the CBO's estimate of the DDG 1000.
On the other hand, the Navy's profile that Admiral
McCullough talked about was not two a year; it was one, two,
one, two, something like that. So some of those individual unit
costs might be higher, but the overall annual budget cost would
be lower. I would have to run those to know what the effect is,
and whatever other effects the Navy makes in their shipbuilding
plan.
Mr. Courtney. Is your analysis based on 2008 dollars?
Dr. Labs. 2009 dollars.
Mr. Courtney. So if we are looking at the back end of the
shipbuilding plan, which is somewhere between 2017 and 2019,
and actually I am assuming there will be some inflation between
now and then, we are talking numbers that are going to be
significantly higher than even what you report?
Dr. Labs. Absolutely. The CBO analysis is in constant 2009
dollars. So if you want to see what those numbers look like in
then-year or budget-year dollars, you would have to add
inflation on top of that.
Mr. Courtney. It is certainly going to give the next
Administration a big headache coming in.
The other question, you heard Admiral McCullough testify
that this change would move up the schedule to hit the 313
fleet from 2017 to 2019. I just wonder if you had any comment
on that projection, whether or not that makes sense to you?
Dr. Labs. Doing sort of a mental calculation, that seems
plausible. Last year's schedule on the LCS program had a
different building profile, and the 313 ship goal was going to
be hit in 2016. Now with this year's shipbuilding plan, that
got pushed out by three years. If you end up putting more
destroyers in the plan versus what is currently in the budget,
it seems plausible you will reach that two years earlier.
Mr. O'Rourke. I took Admiral McCullough's comments to be
based primarily on simply the difference between getting
another five DDG 1000s and getting eight or something like that
DDG 51s. And you have an extra 3 or something ships, and if you
were getting kind of close to 313 anyway, you might get over
that number 1 or 2 years higher. That is how I understood the
comment from Admiral McCullough.
Mr. Francis. I don't have anything to add on that.
Mr. Courtney. I thank you, Mr. Chairman.
Mr. Taylor. The Chair thanks the gentleman.
Just for your information, the Chair will recognize in
order Mr. Allen, Mr. Langevin, and Mr. Kennedy, and that will
conclude the hearing.
Mr. Allen.
Mr. Allen. Thank you, Mr. Chairman. And thank you all for
being here today.
I would like to begin with a statement. This clearly was a
tough decision for the Navy made at the highest levels, but, at
least from my perspective, it seems to me the right decision. I
do believe the Navy has defended this decision in terms that
can be easily understood. You would have to be in this area not
paying attention to understand that the threat of quiet
submarines is an issue that we need to pay attention to as a
country, and that the development and the proliferation of
missile technology is something that every branch of the
service has to take into account.
If you marry that to their reevaluation of how often they
would actually use the land support firepower of a DDG 1000, I
believe the Navy has made a case.
But I have real concerns for what the decision means for
the industrial base going forward. In some ways going back to
an established program means there will be greater stability
going forward, but I am concerned about the number of ships.
As I read your testimony, Mr. O'Rourke, it sounds as if you
are saying that six DDG 51s would essentially replace the work
at Bath Iron Works of three DDG 1000s. I'm not sure that is the
right number. I think we need to know more and get some sense
of the timing.
I am also concerned if the CG(X) gets pushed out over some
period of time, there is another gap developing here. Whether
we are looking beyond this period or we are adding some more
DDG 51s into the FYDP, it does seem to me that we are going to
need more FYDPs to fill this gap, because we have to preserve
the six shipyards that we have today. I think they are a vital
component of our national security.
Having said all of that, I am interested in your
suggestions for other work, because no matter where we go,
these shipyards need some additional work, particularly Bath
Iron Works, which is dependent on surface combatants, and so I
would like to get some sense from you, Mr. O'Rourke, of what
can be done to preserve in particular that yard because it is
so dependent on surface combatants? What other work could we
move their way?
Mr. O'Rourke. That is one of the larger points that I do
try to make in my testimony. When we are looking at the
situation facing Bath, it is not one that is solely of DDG
1000s or DDG 51s, because there are a number of other possible
forms of work that could be put in these yards, and I listed a
number of these options in my testimony.
I have already spoken about the idea of assigning the DDG
51 modernization to the boatyards.
Another one is to assign the Aegis cruiser modernization to
the build yards.
A third would be to procure some number of these noncombat
adjunct radar ships that I talked about.
Another would be to have Bath Iron Works participate
somehow in the construction of the littoral combat ships that
are built to the General Dynamics design.
Another is to procure one or more LPD-17s beyond those that
are in the Navy's current shipbuilding plans and perhaps have
Bath participate in building parts of those ships, similar to
how Bath in fact is participating in the construction of one of
those LPDs already.
Another option is to procure additional LHA-type
amphibious--big-deck amphibious assault ships.
And then there were some other options I also mentioned. I
developed a list of 10, and I don't even think that is
exhaustive.
And one other key point is that even if you add something
to the shipbuilding plan and it only goes to Ingalls, that
could still help Bath because it could permit more of the DDG-
51 work to go to Bath, while still adequately supporting
Ingalls. So we have to look at the total mix of work between
both of these yards and then decide what might be the most
cost-effective path forward.
But my main point is that this is not a question of
building only 1000s or only 51s. There are a number of other
things out there that could put work into these yards to
support employment levels and to preserve critical shipbuilding
skills, including outfitting skills and combat system
integration skills.
Mr. Allen. Thank you, Mr. Chairman. I will yield back.
Mr. Taylor. Thank you.
The Chair recognizes Mr. Langevin from Rhode Island.
Mr. Langevin. Thank you, Mr. Chairman.
I want to thank the panel for being here; and, Mr.
Chairman, again I want to thank you again for holding this very
important hearing on a very complex issue.
Let me say that I have not been impressed by the process
that the Navy has gone through in making the decision to cancel
the DDG-1000 program and going to the 51s, and it seems to me
that there is a rush to judgment here without thorough
analysis.
To the panel, let me ask you this question. In the Navy's
testimony, they estimated that the DDG-51 line could be
restarted in fiscal year 2009 even though they are facing
several ship and vendor-based issues. My question is, what are
your views about the feasibility of restarting the 51 line in
fiscal year 2009 and what would you estimate the costs of
resuming production to be?
Dr. Labs. I do believe that the Navy can certainly restart
the line in 2009. The question comes as to when would the ship
deliver. If you have a delay because of the reduction gear or
other parts, other reasons, you need to get various vendors up
and running again, the ship may not deliver in four or five
years, which is what you typically see with DDG-51s today. It
may take six years for that ship to deliver. So you can
certainly begin building DDG-51s in 2009 if you choose.
If you are trying to ask me what are the exact costs of
sort of reestablishing those production lines, as I indicated
in my testimony, I don't have a good handle on that, and I am
not sure the Navy has a perfectly good handle on that yet. We
assumed for the purposes of this analysis that it would cost
around $400 million to sort of reestablish that line. The costs
could be more or costs could be less. Because there is--the
shipyards themselves have to restart production, but there is
also a number of Government Furnished Equipment (GFE)
components, government-furnished equipment, that also must be
provided. And I don't have a complete analysis of what all the
potential costs and implications of that are at this point.
Mr. Langevin. And other panel members disagree or want to
add to that?
Mr. O'Rourke. I just think it also depends in part on what
it is we are talking about when we talk about reopening the
line. It is not really just one object. It is a lot of vendors
and a lot of locations. The Navy can certainly take steps to
reopen or reestablish certain elements of that line along
certain timelines. So something could be done in fiscal year
2009. Exactly how much and, as Eric said, what effect that
ultimately has on when that first ship is delivered is a
somewhat different question.
Mr. Langevin. All right. Well, there has been, of course,
now in terms of actually restarting the line--and you are not
exactly going to be building the old 51s, because we are
talking about insertion technologies. So, you know, there has
been discussion of incorporating these new technologies and
design changes to the DDG-51, which could further increase per
unit costs over historical trends. Have you received any
information from the Navy as to what additional capabilities
the DDG-51 might have and what the cost estimates would be for
those changes? And if so, could you comment on the Navy's
estimates?
Mr. O'Rourke. Just very generally, in my own testimony I
have included discussion of options for altering the
configuration of the Flight IIA design to include additional
features, either an improved radar or more missile launch
tubes, or both. But my understanding, both prior to this
hearing and also listening to the Navy's testimony at this
hearing, is that they are proposing not to build altered DDG-
51s but more or less repeats of the current Flight IIA design
as it would exist in the DDG-12.
Mr. Langevin. Let me stop you there, if I could, because it
is my understanding that the existing design of DDG-51 is not
capable of supporting the radar that would be needed for
ballistic missile defense, which is what their--major part of
their rationale of moving back to the 51s, because it----
Mr. O'Rourke. Right. And the sense I get from the Navy's
testimony is that they are not envisioning changing the radar
on the ship. That is an option I discussed in my testimony, but
I think that the path that the Navy laid out in their testimony
is to continue getting the 51s with a SPY-1 radar, not with a
radar using active array technology. And so, although I discuss
that in my testimony, the sense I get from the Navy's testimony
is that they are looking at not doing that, not making any
major changes to the combat system of the ship as it would
exist from the DDG-112 baseline.
Mr. Francis. Mr. Langevin, there are--I know in the missile
defense budget they do put in money to modify the Aegis ships,
both the cruisers and the destroyers. So there are some
modifications associated with being compatible with the
ballistic missile defense ships (BMDS). Now whether it is
physically to the radar itself or whether they are software
upgrades or what have you, but there would be a cost that would
have to be accounted for in the new ships if in fact they are
being deployed for ballistic missile defense.
Mr. O'Rourke. Right. But the ships that the Navy is talking
about building, based on their testimony today, is a
configuration that is similar to what you get when an existing
DDG-51 comes out of the modernization program, which is the
configuration similar to DDG-112, the last of the 51s currently
under construction. That is not a ship with a different radar,
it is not a ship with additional missile tubes or any other
major configuration changes.
Mr. Taylor. The Chair recognizes the gentleman from Rhode
Island, Mr. Kennedy.
Mr. Kennedy. Thank you. Thank you, Mr. Chairman.
And, Mr. Chairman, I agree with you, frankly, on the whole
premise of your hearings, that we haven't gotten the Navy's
true answer on really the real cost of these ships. But the
same goes true with the flip side of the coin. What makes us
think, if we haven't gotten the true cost of the DDG-1000, that
we are going to get the true cost of the retrofit of the DDG-
51? Okay?
So you are going to say to us, we are going to save a lot
of money because we are not going to go down the, quote/
unquote, cost overruns of the DDG-1000, and then you are going
to give us a lot of reasons why that is so expensive. But then
we are going to avoid talking in this hearing about what Mr.
Langevin just brought up, and that is all of the costs that
have not been brought up that will be incurred from the vendor
base that will have to be restarted.
Granted we didn't even appropriate any dollars in this
year's appropriations bill for any DDG-51s. So we are talking
2005 was the last time they came off, trying to restart that
vendor base. You just pointed out that it is closed
architecture. So trying to retrofit and redesign every
subsystem of the DDG-51 so that if you are trying to upgrade
the radar you have got to do that and if you are trying to
upgrade this you have got to do that, and who knows what the
real cost of the reduction gear long lead time is? Do you guys
have any idea? I mean, I know that you quoted $400 million, but
where did that number come from? From CBO? Can you guys provide
that?
Dr. Labs. I used the $400 million number as an assumption
based on, actually, this subcommittee's mark in the
authorization bill, where you appropriated $400 million either
for DDG-1000 advanced appropriation or for surface combatant
advanced appropriation. As much as we have tried with either
the contractors or with the Navy, we haven't gotten any details
on that.
Mr. Kennedy. Okay. Well, obviously, the point being is that
we can't put our finger on anything that you are giving us if
we are not getting an apples-to-apples comparison, whether it
is talking about DDG-51 or 1000. And it is not fair for us to
be out there whacking the cost of 1000 for costs if you are not
comparing it to what the refit cost of 51 is. That is one
issue, and we are just talking costs there.
Now the second issue is what Mr. Sestak brought up; and
that is, what is the national security interests here? And it
seems as though we have had several CNOs come up to the
Congress for years and say that we needed this DDG-1000 because
the littoral environment was where our threat was. And what I
am interested in is, as Mr. Sestak said--and, by the way, Mr.
Sestak was the Deputy Chief of Naval Operations for Warfare
Requirements and Programs when he was in the Navy. So he should
have some idea of what this stuff is. And he said it baffled
him, just up here right now, what the big change in rationale
was. He was there when the intelligence was dictating the
littoral environment. He knows--when he said, why not move the
ships over to Guam, you know what he was talking about. He was
talking about the Taiwan Straits and China. He is talking about
the missile defense from China.
The DDG-1000 has the stealth capability. It looks like a
fishing vessel out there, according to the testimony. Whereas
the Arleigh Burkes look like big huge destroyers and can be
picked off like that.
When are we going to factor in the cost of 360-some odd
American lives on these vessels, too? These are all
calculations we are going to make if they are going to be
patrolling the waters. When does America not want to be looked
at like we are overbearing in those straits and instead have a
nice, calm, stealthy cruiser out there for protection, but we
don't want to have visible annoyance by having a big, big
destroyer out there? But a nice stealthy destroyer like a DDG-
1000 is just what we want in case we need it, but not in their
face, which is what we want with the Chinese. Not in their face
but there in case we need it.
These are major policy decisions on national security basis
we need to consider. And, frankly, I don't think we have really
gotten it; and so that is what I hope we get a better answer
from the Navy on.
I thank the chairman for giving us this time today to have
these hearings.
Mr. Taylor. Sure.
Mr. O'Rourke.
Mr. O'Rourke. Yeah, just very briefly, I agree with you
that we need to see a comparison of the two paths forward in
terms of costs that accounts for whatever configuration
changes, among other things, the Navy might want to make in the
51 design. They need to show those numbers.
And I agree with you also that I think the Navy needs to
explain more fully the concept that they have introduced here
in their testimony today that they have undergone a shift in
their thinking about missions. And what I gather from Admiral
McCullough's testimony today is that they feel they have done
that analysis and that they are prepared to share it. I think
they now need to share it so people can see these things and
make their evaluation.
Mr. Kennedy. With your indulgence, Mr. Chairman, one point.
Mr. Taylor. Mr. Kennedy, it is not so much my indulgence,
but the committee is going to need this room at 2 o'clock, full
committee.
Mr. Kennedy. Okay.
Mr. Taylor. But if I may, let me answer a couple of
questions that you already asked, and I think you did it--I
think you asked some great questions.
Number one, our Nation has already received--delivered over
50 DDG-51s. So I think it is fair to say that we have a very
good track record of what they cost and what all the equipment
on them cost.
Second thing, I would remind the gentleman that the 1000 is
physically one-third larger than the 51. So if it is just
looking for something--and I have got to tell Mr. Kennedy that
I am absolutely amazed on my flights overseas to visit the
troops how many ships you see as you are crossing the ocean.
Yes, it is stealthy on radar, but in the case of the Taiwan
Straits, as you mention, it is a fairly small place with a lot
of junks, a lot of nonhostile vessel traffic and, yes, a lot of
airlines up there, any one of which can hit their GPS and go,
that is your latitude and longitude of the American fleet. So,
again, just something we ought to keep in mind.
I do want to commend all of the witnesses for asking some
great questions. That was the purpose of this hearing, to clear
the air. And if any of you three gentlemen would like to answer
Mr. Kennedy's questions, and then we will let you go.
Mr. Francis. Just two points, Mr. Chairman, Mr. Kennedy.
I take at face value what the Navy said about the change in
the blue-water threat and the missile defense. I do think the
statement that the fire support requirements can be met with
existing capabilities, that came as a surprise to me.
And I think the chairman makes a good point on cost. I
think we have to be skeptical of cost estimates, but the DDG-51
has a lot of actual cost history. And I would come back to the
chairman's challenge that he mentioned in the beginning of the
hearing, ask for a fixed price and see who gives you a fixed
price contract, and I think you might get one on the 51. It is
a good question to ask, and I think it is telling that you
can't get one on the DDG-1000.
Mr. O'Rourke. Just very quickly, to sum up what I was
saying earlier, Admiral McCullough said in his testimony today
that they have done the analysis. So I think it is reasonable
for other people to ask to see that analysis.
Dr. Labs. Mr. Chairman, Mr. Kennedy, I would just simply
agree with Mr. O'Rourke and Mr. Francis. I think you are
absolutely right. You are entitled to sort of see what the
numbers are going to start those vendor bases back up again.
But we do have an awful lot of statistical and historical data
on the DDG-51 that makes it at least easier for somebody like
CBO to sort of give a better sense of what it might be than,
say, the DDG-1000, where you really have to use different kinds
of analogies.
Mr. Taylor. Again, we want to thank all of our witnesses.
We want to thank all the members who participated. And this
hearing is adjourned.
[Whereupon, at 1:15 p.m., the subcommittee was adjourned.]
?
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A P P E N D I X
July 31, 2008
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PREPARED STATEMENTS SUBMITTED FOR THE RECORD
July 31, 2008
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[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
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WITNESS RESPONSES TO QUESTIONS ASKED DURING
THE HEARING
July 31, 2008
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RESPONSE TO QUESTION SUBMITTED BY MR. LANGEVIN
Admiral McCullough. The Joint Requirements Oversight Council (JROC)
was not specifically engaged in the Navy's deliberations prior to
submission of the Navy's POM-10 proposed plan to the Office of the
Secretary of Defense. The JROC will be briefed 18 July 2008.
The Navy is concerned about evolving capability gaps in the outer
air battle in the blue water, particularly against the improved
ballistic missile capabilities of near-peer competitors. The DDG 51 is
a proven, multi-mission guided missile destroyer and the Navy's most
capable ship against ballistic missile threats. Ballistic Missile
Defense is a key capability that DDG 1000 lacks--that capability is
already being incorporated into the DDG 51 class.
The way ahead for FY 2010 and beyond will be determined by the Navy
and the Department of Defense's continuing assessment of existing and
evolving threats, ensuring that the Navy delivers those capabilities
best suited to meet our national security needs both now and the
foreseeable future. This will include, but not be limited to, defense
against missile threats and the challenging requirements to operate in
the littoral environments. As the Navy and the Department of Defense
develops its FY 2010-2015 budget, all of these considerations will be
weighed to ensure we build the right Navy for the future. [See page
21.]
______
RESPONSE TO QUESTION SUBMITTED BY MR. TAYLOR ON BEHALF OF MR. LARSEN
Admiral McCullough. The comprehensive estimate of total life cycle
costs for the DDG 51 and DDG 1000 classes is stated in the Selected
Acquisition Reports (SAR's) provided to Congress. These life cycle cost
estimates employ data from the Navy Visibility and Management of
Operating and Support Costs (VAMOSC) database. They include both direct
costs and other categories of costs that are not budgeted to a specific
program. The summary of the SAR Life Cycle Cost estimates (FY07$) for
the two classes are:
------------------------------------------------------------------------
Category DDG 1000 DDG 51
------------------------------------------------------------------------
Mission Pay and Allowance 7.2 22.8
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Unit Level Consumption 11.0 12.6
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Intermediate Maintenance 0.8 0.8
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Depot Maintenance 10.9 7.6
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Contractor Support -- 0.9
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Sustaining Support 15.4 3.3
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Indirect 4.8 12.8
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Other -- --
------------------------------------------------------------------------
Total Annual 50.1 60.8
------------------------------------------------------------------------
All costs in FY07$ based on December 2007 SAR's.
------------------------------------------------------------------------