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



                         [H.A.S.C. No. 110-177]

                            THE F-22 PROGRAM

                               __________

                                HEARING

                               BEFORE THE
 
                    AIR AND LAND FORCES SUBCOMMITTEE

                                 OF THE

                      COMMITTEE ON ARMED SERVICES

                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS

                             SECOND SESSION

                               __________

                              HEARING HELD

                           NOVEMBER 19, 2008


                                     
[GRAPHIC] [TIFF OMITTED] TONGRESS.#13

                                     
  


                    AIR AND LAND FORCES SUBCOMMITTEE

                   NEIL ABERCROMBIE, Hawaii, Chairman
JOHN SPRATT, South Carolina          JIM SAXTON, New Jersey
SOLOMON P. ORTIZ, Texas              HOWARD P. ``BUCK'' McKEON, 
SILVESTRE REYES, Texas                   California
ADAM SMITH, Washington               JEFF MILLER, Florida
MIKE McINTYRE, North Carolina        JOE WILSON, South Carolina
ELLEN O. TAUSCHER, California        FRANK A. LoBIONDO, New Jersey
ROBERT A. BRADY, Pennsylvania        TOM COLE, Oklahoma
JIM MARSHALL, Georgia                ROB BISHOP, Utah
DAN BOREN, Oklahoma                  MICHAEL TURNER, Ohio
HANK JOHNSON, Georgia                PHIL GINGREY, Georgia
JOE SESTAK, Pennsylvania             CATHY McMORRIS RODGERS, Washington
GABRIELLE GIFFORDS, Arizona          GEOFF DAVIS, Kentucky
KENDRICK B. MEEK, Florida            W. TODD AKIN, Missouri
KATHY CASTOR, Florida                DOUG LAMBORN, Colorado
                John Sullivan, Professional Staff Member
                Lynn Williams, Professional Staff Member
                      Ben Glerum, Staff Assistant
                            C O N T E N T S

                              ----------                              

                     CHRONOLOGICAL LIST OF HEARINGS
                                  2008

                                                                   Page

Hearing:

Wednesday, November 19, 2008, The F-22 Program...................     1

Appendix:

Wednesday, November 19, 2008.....................................    35
                              ----------                              

                      WEDNESDAY, NOVEMBER 19, 2008
                            THE F-22 PROGRAM
              STATEMENTS PRESENTED BY MEMBERS OF CONGRESS

Abercrombie, Hon. Neil, a Representative from Hawaii, Chairman, 
  Air and Land Forces Subcommittee...............................     1
Saxton, Hon. Jim, a Representative from New Jersey, Ranking 
  Member, Air and Land Forces Subcommittee.......................     4

                               WITNESSES

Van Buren, David M., Principal Deputy Assistant Secretary of the 
  Air Force, Acquisition and Management..........................     6
Young, Hon. John J., Under Secretary of Defense for Acquisition, 
  Technology and Logistics.......................................     5

                                APPENDIX

Prepared Statements:

    Saxton, Hon. Jim.............................................    39
    Van Buren, David M...........................................    48
    Young, Hon. John J...........................................    42

Documents Submitted for the Record:

    Dogfight Over F-22 Requirement Reveals DOD Schisms, in 
      Aerospace Daily & Defense Report, November 18..............    53
    Letter to Hon. Robert M. Gates from the House Committee on 
      Armed Services, dated October 31, 2008.....................    56
    Lockheed Martin November 20, 2008, letter to the Aeronautical 
      Systems Center, 478th AESW/PK, Subject: Contract FA8611-09-
      C-2900--F-22 Lot 10 Production Aircraft--Advance 
      Procurement--Funding/Termination Liability (TL) 
      Requirements...............................................    58

Witness Responses to Questions Asked During the Hearing:

    Mr. Bishop...................................................    63
    Mr. Saxton...................................................    63
    Mr. Wilson...................................................    63

Questions Submitted by Members Post Hearing:

    Mr. Abercrombie..............................................    67
    Mr. Miller...................................................    71
    Mr. Saxton...................................................    71
                            THE F-22 PROGRAM

                              ----------                              

                  House of Representatives,
                       Committee on Armed Services,
                          Air and Land Forces Subcommittee,
                      Washington, DC, Wednesday, November 19, 2008.
    The subcommittee met, pursuant to call, at 12:38 p.m., in 
room 2118, Rayburn House Office Building, Hon. Neil Abercrombie 
(chairman of the subcommittee) presiding.

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

    Mr. Abercrombie. Aloha. Thank you all for coming today. I 
have an opening statement, as does Mr. Saxton, and then we will 
get right to Mr. Young and to Mr. Van Buren.
    This afternoon we indeed welcome John Young, the Under 
Secretary of Defense for Acquisition, Technology and Logistics 
(USD/AT&L), and Mr. David Van Buren, the Principal Deputy 
Assistant Secretary of the Air Force for Acquisition and 
Management, to provide testimony on the F-22 program. Mr. Young 
has been extraordinarily helpful and hardworking, I want to say 
as well, add that, not always the same thing, Mr. Young over 
the past year.
    And, Mr. Van Buren, I am happy to see you again. Your work 
before with Novasol and other high-tech innovation commitments 
as you have made before I think make you particularly helpful 
with regard to acquisition and management, and it is nice to 
see you.
    The primary issue we plan to address at this hearing is the 
Department of Defense (DOD) apparent intent to not fully 
implement section 134 of the National Defense Authorization Act 
(NDAA). Having started out in such a complimentary fashion, I 
am sure you knew, Mr. Young, that I would then follow that up 
with my observations with regard to our defense bill.
    Section 134 authorizes the obligation of up to $140 million 
to sustain F-22 long-lead component production from November 
until March, to preclude program cost growth, and to avoid 
prejudicing a decision of the incoming Administration on 
whether to procure additional F-22 aircraft beyond the 183 now 
planned.
    Earlier this year, Secretary Gates and other officials in 
the Office of the Secretary of Defense (OSD) testified that 
they wish to defer the final decision on F-22 production line, 
the closure of same, to the next Administration. However, the 
Department's budget request for the fiscal year 2009 did not 
include either advance procurement (AP) for additional F-22s in 
fiscal year 2010 to sustain production or funds to shut down 
the F-22 production line. We were told by the Air Force that 
because the Office of the Secretary of Defense did not provide 
advance procurement to sustain advance procurement of the F-22 
components, that the cost impact of the program would be $500 
million if the decision was made in March of 2009 to proceed 
with additional F-22 aircraft procurement. Since the Office of 
the Secretary did not provide the funding, Congress did, 
authorizing and appropriating $523 million for the advance 
procurement in the fiscal year 2009 National Defense 
Authorization Act of 20 additional F-22s for the fiscal year 
2010. In other words, we tried to combine a policy decision 
with the necessary funding to implement that policy as best we 
could understand it and manifest it in the defense bill.
    The authorization act limited the obligation of this $523 
million to $140 million until the next President certifies by 
March of 2009 to the congressional defense committees that 
either more F-22s--for either more F-22s or shutting down the 
F-22 production line is in the national interests of the United 
States, either procuring more or shutting down the line. And we 
would take guidance then from that, not necessarily agree to 
it. That is not the issue before us today, nor do I intend--I 
hope the Members won't necessarily pursue that argument today 
or that proposition today.
    On October 14, the authorization act was signed into law by 
President Bush. Shortly thereafter, the Air Force submitted an 
acquisition strategy proposal to the Office of the Secretary of 
Defense to obligate the $140 million, to implement section 134, 
and to support a November 27 contract award. But that request 
was denied. I hope that that will be addressed today.
    On November 10, Secretary Young, in an acquisition decision 
memorandum (ADM), directed the Air Force to proceed with 
advance procurement of only 4 aircraft, with an option for 16 
after January 21, 2009, the inauguration date, and limited that 
obligation to only $50 million, asserting this will have little 
or no cost impact to the program. This is my understanding, Mr. 
Young. The Air Force had informed the subcommittee in July that 
$140 million would be required by November to avoid a cost 
impact to the program if a decision were to be made in March.
    By the way, parenthetically, Mr. Young and Mr. Van Buren, I 
am going over all of this not because I don't think you know 
it, but there may be those observing who do not, and to make 
sure that we are coming from the same set of premises even 
though you may disagree with them or have a different 
perspective, I want to make sure that you know what my 
reasoning is and what I think the sequence of events were as I 
understood them to be.
    So to repeat, the Air Force had informed us that the $140 
million would be required--these numbers were not picked 
arbitrarily, I assure you, nor were they capriciously picked--
to avoid a cost impact on the program if a decision were to be 
made in March to proceed with additional F-22s. The Office of 
the Secretary of Defense, as mentioned, now indicates that 
instead of $140 million, $50 million is sufficient. Obviously I 
have to be concerned about that because that was not the 
information that we received from the Air Force. If there is a 
disconnect between the Office of the Secretary and the Air 
Force, we need to know it, and we need to know why and how.
    The Air Force currently estimates that with only $50 
million for obligation in November, that this will increase the 
program cost by $200 to $500 million. That is my information. 
If the decision is made to buy 20 additional aircraft, 
depending on when the decision is made--excuse me, let me--to 
increase the program cost by $200 to $500 million, if the 
decision is made to buy 20 additional aircraft, depending on 
when the decision is made after January 21, that is why I say 
$200 to $500 million. I am not trying to just slip numbers in 
to inflate the numbers. It depends when the decision would be 
made on the 20 additional. Conversely, the Office of the 
Secretary of Defense indicates there will be little or no 
additional costs. There is a huge discrepancy here.
    We hope to find out today why OSD declines to fully 
implement section 134 of the National Defense Authorization Act 
to preclude the expenditure of up to $500 million in additional 
costs if the new Administration decides to proceed with the F-
22 procurement.
    In sum, Mr. Young, Mr. Van Buren, my concern here is that 
you may be contending that the $50 million is sufficient, and 
therefore maybe could say, well, yes, we understand that the 
number in the defense bill, which we are bound to observe by 
law, is $140 million, but we can do that for $50 million. If 
so, I am going to need to know how you think you can do that in 
the light of what information we have been receiving that 
would--the expenditure of the $50 million in lieu of the $140 
million, we are told anyway, will engender a much greater cost 
of so many millions of dollars per copy of the F-22 should a 
decision be made down the line.
    And that is information we, in fact, got from the Air 
Force. We are not trying to run around you, we are just simply 
receiving information on inquiry by the staff.
    So that is where we are right now. And the implication of 
that in terms of the relationship between branches of 
government is serious. That is another reason for having the 
hearing now before we--rather than just waiting until January 
until the new Administration comes in.
    The Congress rules. The Pentagon can propose, and not only 
propose, but admonish and engender and do all kinds of--make 
all kinds of propositions and put forward recommendations. And 
as you know, Mr. Young, particularly in our relationship, I pay 
very close attention to what you have to say. I have great 
respect and consideration for your work effort and the quality 
of that work effort with the people with whom you have 
associated yourself. Nonetheless, in the end, the Congress 
makes the decisions, and we have to live with that. And this 
instance, then, it seems to be almost--I won't say willful in a 
pejorative sense, but a willful rejection of what you have been 
ordered to do.
    Now, if there is good reason for that because circumstances 
have changed, that is one thing. But that is why I think the 
hearing is so important today that we not lose sight of the 
fact that the Congress in the end writes a defense bill for a 
reason, because that is the policy that has evolved. And at 
least as far as this committee is concerned and the defense 
bill is concerned, it is a consensus document. It is not an 
arbitrary document imposed by the one party over another, let 
alone one branch of government over another. It is a considered 
document that has the input and imprint of a bipartisan 
majority, clear majority, virtually unanimous in the sense of 
this defense bill.
    And with that, and with reference to that, I want to now 
ask Mr. Saxton for his remarks and indicate yet once again for 
the public record my respect and admiration of Mr. Saxton and 
my gratitude to him for his mentorship while I served in this 
Congress, and express at the beginning of his remarks my 
sincere hopes for all the best in his future.

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

    Mr. Saxton. Mr. Chairman, thank you very much, and thanks 
for the kind words. I appreciate them very, very much.
    Mr. Chairman, you raised, not surprisingly, I suppose, 
since we have been working this issue together for quite some 
time--you raise the same questions that I would raise in my 
opening statement. And so I will refrain from going through the 
whole thing.
    I just would say, Mr. Young, I would ask you today, we hope 
you can explain how you determine that $50 million would be 
adequate to keep the long-lead suppliers under contract. That 
is the main question. Our belief is that it would cost 
something like $90 million more than that, and so, of course, 
that is the $140 million figure that Chairman Abercrombie was 
talking about. And I fear that the withholding of the $90 
million may already be impacting some suppliers and driving up 
long-term costs. And I think that is the basic question that we 
would like to dwell on here today.
    So, Mr. Chairman, I ask unanimous consent that my entire 
statement be placed in the record.
    Mr. Abercrombie. Without objection.
    [The prepared statement of Mr. Saxton can be found in the 
Appendix on page 39.]
    Mr. Abercrombie. All witnesses' prepared statements will be 
included in the hearing record. And we obviously have members 
of the full committee and members from our subcommittee that 
may be attending or are already in attendance today, and any 
statements they have we will submit to the record, without 
objection.
    And, of course, they are welcome to participate, and I ask 
unanimous consent that non-subcommittee members be allowed to 
participate in today's hearing after all committee members have 
had the opportunity to ask questions, and seeing no objection, 
non-subcommittee members will be recognized at the appropriate 
time.
    Mr. Young, before I ask you to proceed with your statement, 
then, if I can just follow up on Mr. Saxton's observations just 
a little bit, because I think I may not have made that entirely 
clear in my remarks. I am concerned, as I am sure you are, with 
the implications for suppliers. It is sometimes--it is I am not 
going to say easy, but it can occur that we have discussions 
here that tend to be somewhat abstract or observational, but 
the real-life and real-time considerations for the 
manufacturers and the suppliers of the component parts of these 
terrifically complicated and difficult military platforms in 
terms of assembly and movement, they just don't appear. They 
have to be--and they aren't just assembled. Everything from the 
raw materials to the component production is an extraordinarily 
complicated and involved operation where real lives, payrolls, 
production time schedules, management challenges and so on have 
to be met. And that is part of the reason, again, for the 
hearing, that if, in fact, there are costs associated with a 
failure to anticipate correctly what is necessary to fulfill 
the requirements of section 134 of the defense bill, if that 
is, in fact, going to take place, we need to know.
    We don't want that to happen because the adverse effect on 
people's lives would be considerable, over and above the 
efficacy of the procedures with regard to the actual production 
itself of the F-22 and the numbers that would be suitable to 
the strategic interest policy questions that are involved in 
this. Okay?

STATEMENT OF HON. JOHN J. YOUNG, UNDER SECRETARY OF DEFENSE FOR 
             ACQUISITION, TECHNOLOGY AND LOGISTICS

    Secretary Young. Chairman Abercrombie, Ranking Member 
Saxton, distinguished members of the subcommittee, I am here to 
testify about the Defense Department's plan for F-22 
production. Consistent with previous Defense Department 
decisions, the fiscal year 2009 budget nor the Defense 
Department's draft of a fiscal year 2010 budget included funds 
for purchasing additional F-22 aircraft.
    Consistent with Secretary Gates' commitment to enable 
President-elect Obama's Administration to review the F-22 
program, the Department is taking steps to sustain F-22 
production. First, I recently approved obligation of up to $50 
million as partial advance procurement for four F-22 aircraft, 
as you noted. Second, this Administration plans to propose the 
purchase of four F-22 aircraft in the second fiscal year 2009 
supplemental. These combined actions enable the next 
Administration to make a decision on purchasing additional F-22 
aircraft.
    It is my understanding, based on discussions with industry, 
personal discussions, that the taxpayer will not pay 
significantly higher costs for additional F-22 aircraft if 
decisions are made to obligate additional advance procurement 
funds in January followed by a Presidential certification and 
decision in March. Delaying these decisions could increase the 
costs of the airplanes; however, spending additional advance 
procurement at this time could waste taxpayer dollars in buying 
parts for airplanes that the next Administration may not 
purchase.
    As I understand it, the key issue for this hearing is to 
discuss whether DOD should obligate additional funds for all 20 
aircraft now, essentially prejudging the next Administration's 
decisions.
    One aspect of this discussion revolves around industry 
estimates of higher prices for F-22s based on the timing of the 
release of advance procurement funds. I would offer a caution. 
First, these are industry estimates that have not been 
negotiated. Virtually every contract discussion I have seen 
starts with higher industry prices and estimates. All such 
issues need to be aggressively negotiated, and a public hearing 
is not the place to lend credibility to these estimates or to 
conduct the negotiations.
    I question the claim that delaying obligation of $90 
million of advance procurement for long-lead items by 2 months, 
2 months that include Thanksgiving, Christmas and New Years, 
can increase the cost of airplanes by $200 million or 6\1/4\ 
percent. Further, this is only a discussion about a delay in 
the partial funding of long-lead items. If approved in the 
supplemental, four fiscal year 2009 aircraft in the 
supplemental will actually be an acceleration of the F-22 
program.
    The Department is acting responsibly consistent with 
Secretary Gates' commitment and congressional direction seeking 
to ensure that each tax dollar is used carefully and 
efficiently. I appreciate the chance to explain the Defense 
Department's actions on the F-22, and I am anxious to answer 
your questions.
    Mr. Abercrombie. Thank you.
    [The prepared statement of Secretary Young can be found in 
the Appendix on page 42.]
    Mr. Abercrombie. Mr. Van Buren, would you like to give a 
statement or supplement Mr. Young's remarks?
    Mr. Van Buren. Yes, I have a statement, Mr. Chairman.

  STATEMENT OF DAVID M. VAN BUREN, PRINCIPAL DEPUTY ASSISTANT 
     SECRETARY OF THE AIR FORCE, ACQUISITION AND MANAGEMENT

    Mr. Van Buren. Mr. Chairman, Ranking Member Saxton, and 
distinguished members of the committee, thank you for the 
opportunity to be here before you today to discuss F-22A future 
procurement. As you know, fifth-generation fighters like the F-
22A and the F-35 are key elements of our Nation's defense and 
deterrence. Both the F-22 and F-35 represent the latest 
generation of fighter aircraft. We need both aircraft to 
maintain the margin of dominance on which we have come to 
depend. It is this margin that grants our air and ground forces 
the freedom to maneuver and to attack. The F-22 and F-35 each 
possess unique complementary and essential capabilities that 
together provide the synergistic effects required to maintain 
the superiority across the full spectrum of conflict.
    The F-22 has established a world-class production program. 
Lot 6 deliveries were completed ahead of schedule at a rate of 
about two per month. Additionally, deliveries of Lot 7 Raptors 
begin this month. And the first lot of the three-year multiyear 
procurement contract we awarded in July 2007 has been started. 
When the plant delivers the last aircraft of Lot 9 in December 
2011, we will have completed the current program of record of 
183 Raptors.
    The Air Force greatly appreciates congressional support and 
the Secretary of Defense's (SECDEF) commitment to keep the F-22 
production line viable until March 2009 to allow the next 
President to decide if additional F-22As are in the Nation's 
interest. To meet this aim, the Air Force is moving forward 
with a Lot 10 of F-22A aircraft. Per OSD direction, the program 
has commenced contract actions for advance procurement of long-
lead parts and materials for 4 aircraft, with the option for 
advance procurement of an additional 16 Raptors. We believe the 
strategy meets the goal of ``setting the table'' until the new 
Administration makes a decision concerning the future of the F-
22A program.
    Based on the direction in the 10 November 2008 acquisition 
decision memorandum, or ADM, the program released the aircraft 
and engine request for proposals on 17 November and plans to 
award an undefinitized contract action, or UCA, on 26 November. 
The solicitations will be based on a ``not to exceed'' for 
advanced procurement of four aircraft, followed by a request 
for firm, fixed proposals following the 2009--March 2009 
Presidential certification.
    In addition, the solicitations also included requests for 
``not to exceed'' options for advance procurement of 16 
additional aircraft, also with delivery in calendar year 2012. 
Full funding for Lot 10 must be included in the fiscal year 
2010 budget should the next Administration's certification, 
required 1 March 2009 by the fiscal year 2009 National Defense 
Authorization Act, support continued production.
    Thank you, Mr. Chairman.
    Mr. Abercrombie. Thank you.
    [The prepared statement of Mr. Van Buren can be found in 
the Appendix on page 48.]
    Mr. Abercrombie. Before we go to questions from the 
Members, I want to, Mr. Young and Mr. Van Buren, so we are 
again on the same page and we can have a fruitful discussion--I 
want to make sure I understood what you were saying. First, 
with regard to this hearing, I certainly don't expect you to be 
conducting, nor do any Members here--conducting negotiations in 
public here, but you can't conduct negotiations with the 
committee either in public. The defense bill is not negotiable 
with the Defense Department. The defense bill is the defense 
bill, and you obey what the defense bill says. Period. That 
holds for the Pentagon and the Office of the Secretary of 
Defense.
    Now, with respect to a supplemental budget, that is not--
the defense bill is the defense bill. One of the things that 
has loused everything up--one of the things that has messed 
everything up is this constant utilization of a supplemental 
budget, and I think you agree with me on this, Mr. Young, and I 
think Secretary Gates agrees, is that we should not be doing 
regular order defense business that is the subject of the 
defense bill and the subsequent appropriations in 
supplementals. That is one of the reasons we are in trouble. 
And the defense bill, and the appropriation that was associated 
with the defense bill, clearly try to avoid doing exactly that 
by authorizing and providing funds for up to 20 F-22s. That was 
the will of the Congress both in terms of authorization and 
appropriation.
    So why we are talking about four or any number in a 
supplemental bill and referring to it as acceleration is beyond 
me. I don't know that a supplemental is going to pass, or when 
it comes, or what is involved in it. The defense bill states 
explicitly what it is that Congress expects to have done. What 
a supplemental does or doesn't do or how it arrives--and that 
don't come through this committee. A supplemental simply goes 
to the appropriations, and that is a separate issue entirely 
from what we are here meeting today.
    And finally, 4 versus 20 aircraft, again, it is the 
decision of the Congress. In your testimony here on page 4, 
this approach provides an adequate bridge until at least 
January 2009 without imposing significant costs. It is 
inappropriate to spend an additional $90 million procurement 
for the 16 aircraft the Nation may not purchase. The Congress 
has decreed that this 20 is to be what the next Administration 
deals with, whether it was a McCain Administration or an Obama 
Administration. It is not up to you or the Office of the 
Secretary of Defense to determine what an adequate bridge is. 
The Congress has determined what the adequate bridge was. The 
Congress has determined what was appropriate.
    If you can show us that there is significant savings on the 
20, that would be one thing, but to make a decision or to make 
a proposal that you have decided or the Secretary has decided 
or the Bush Administration has decided you are not going to go 
toward the 20 in my judgment says that you are not going to 
obey the law.
    What the Obama Administration does or does not do with 
respect to the production of F-22s is an issue entirely 
separate from the question of the provision of the funds for 
the procurement of the 20 aircraft, long-lead procurement of 
the aircraft.
    Now, with that, I will turn to--who is first on the list? 
Mr. Saxton.
    Mr. Saxton. Mr. Chairman, it is my intent to let the 
gentleman on my left ask questions during my time, if that is 
all right with you.
    Mr. Abercrombie. Representative Gingrey will start.
    I hope, Representative, you understand my proposition here.
    Dr. Gingrey. Absolutely.
    Mr. Chairman, thank you and Ranking Member Saxton. Thank 
you for yielding your time to me. I will direct my question to 
Secretary Young.
    Mr. Young, according to the November 18th Aerospace Daily 
and Defense Report, and I am going to quote, the Defense 
Secretary staff has told Air Force planners not to talk to 
congressional staffers and to work only through the Office of 
the Deputy Secretary of Defense, Gordon England, and 
Acquisition Chief John Young, yourself. Insiders on Capitol 
Hill contend that the Defense Department has been and is 
continuing to withhold F-22A funds, as the chairman said, in 
defiance of the law and the intent of Congress and attempt to 
punish the Air Force.
    So my question to you, Mr. Young, why the gag order? Why do 
you want the Air Force not talking to Capitol Hill?
    That is the question, Mr. Young.
    Secretary Young. I am not aware of any such gag order. So 
if I could, I have traded correspondence and discussions with 
members of this committee staff almost daily for the last two 
weeks. The Air Force, I know, has communicated with this 
committee and staff, and I am not aware of any such gag order.
    Dr. Gingrey. Reclaiming my time, Mr. Young, the article 
speaks for itself.
    And, Mr. Chairman, I ask unanimous consent to submit this 
article for the record.
    Mr. Abercrombie. Without objection.
    [The information referred to can be found in the Appendix 
on page 53.]
    Dr. Gingrey. The previous Air Force leadership was forced 
out, we know that, in large part due to their disagreement with 
you and Mr. England on this issue, and I suspect that the 
reason you don't want the Air Force talking to Capitol Hill is 
that there is an internal disagreement on the program, and the 
Air Force, in fact, feels that OSD is wrong on this issue and 
that more F-22As are needed.
    Now, look, I am looking to move on to the second point in 
this article. Let me get to the second point because my time is 
limited.
    The second point of the article, that you are acting in 
defiance of the law and the intent of Congress. That is exactly 
what the chairman just said to you.
    Mr. Young, in your opinion, what was the intent of Congress 
in section 134 of this year's Duncan Hunter National Defense 
Authorization Act? What was the intent of section 134? Now I 
will let you respond.
    Secretary Young. I am going to step back and comment on one 
comment you made, and that is Secretary Gates made a decision 
about the previous Secretary and the previous Chief. I was 
never a party to that discussion. I wasn't part of it. I wasn't 
asked my views on anything, and to my knowledge F-22 had no 
bearing on his decision. So----
    Dr. Gingrey. Fair enough, Mr. Young. Go ahead and respond 
to my question in regard to section 134.
    Secretary Young. Section 134, strictly read, said that we 
can obligate up to $140 million. It does not require us to 
obligate $140. We can obligate $140 million up to the 
certification by the President that should be delivered no 
later than March 1st and no sooner than January 21st.
    Dr. Gingrey. Mr. Young, let me reclaim my time, and maybe I 
could yield to the chairman or to the ranking member in regard 
to that. I think the language in section 134 is very specific 
in regard to that. I don't think it gives you the option to say 
that you are going to, in your own discretion, allocate $50 
million of the $140 million. The language in the bill calls for 
$500-and-something million for advance procurement and $140 
million to be allocated before the first of the year. Where are 
you coming from in regard to that?
    Secretary Young. Could I try to answer several aspects of 
this question?
    Mr. Abercrombie. Mr. Young, if you will wait a moment, Mr. 
Gingrey said he would defer to us on that issue so that it is 
clear what the question is. My understanding is that up to $140 
million, yes, if you could--if you needed to spend less than 
that to take care of the long-lead funding for the 20, nobody 
is going to argue with that. If you had to ask for more than 
that in order to fund the long-lead 20, presumably you would in 
a supplemental budget or even in the 2010 budget proposal, 
because in the question of the supplement, that, in fact, is an 
emergency, that the number that was there is not adequate and 
therefore requires more funds. That is a legitimate proposal to 
put forward or to put it in the 2010 proposal.
    But the question of the 20 was not at issue. It wasn't a--
it is not a question of whether or not you want 20. That is 
what the Congress said was going to be done. And if the next 
Administration wanted to make a decision about the F-22, to 
addition or close it or whatever it is, they would have to do 
it on the basis of the provision for the 20. If it was less 
than 140, that is one thing. But my understanding of what we 
did, and I was here when we did it, was that the bottom-line 
issue, the bottom-line number is 20 aircraft. How much needed 
to be spent in order to accomplish that task in 134 could be up 
to 140. Is that clear then, Mr. Gingrey? Are we on the same 
page?
    Dr. Gingrey. Mr. Chairman, I think we are on the same page, 
and my understanding of it, to take it a step further, the only 
stipulation that we included was that you not obligate more 
than $140 million before the new Administration reviews the 
program and they make a decision on the path forward.
    Mr. Abercrombie. That is right. It says, ``Not more''--
quoting in part, ``Not more than $140 million may be obligated 
until 15 days after the certification required by subsection 
(c) is received by the congressional defense committees,'' 
which means the decision of the next Administration.
    Dr. Gingrey. Mr. Young, your rationalization here for 
limiting it to $50 million, I think, is weak, given that you 
received a letter from the chairman and ranking member of this 
subcommittee, and it states clearly that your actions are 
largely inconsistent with statements made during the past year 
by senior Department leaders, and that not obligating $140 
million immediately would effectively preclude the procurement 
option of further F-22As by dramatically increasing the cost of 
procurement because of line closure actions that would be taken 
under your scenario that would have to be reversed. The letter 
states that the Department is expected to approve the Air Force 
obligation of $140 million for F-22 advance procurement, 
consistent, Mr. Young, with section 134 of the National Defense 
Authorization Act.
    Mr. Chairman, I ask unanimous consent to submit this letter 
for the record.
    Mr. Abercrombie. Without objection.
    [The information referred to can be found in the Appendix 
on page 56.]
    Dr. Gingrey. Let me just say, Mr. Young, in not following 
the law and the intent of this Congress, under what authority 
are you acting? Under what authority are you acting? Is it up 
to you to decide which laws the Department will follow and 
which they will flout? Why are you substituting your will for 
the will of Congress that was signed into law by the President? 
If you can explain that to this committee and this 
subcommittee, I am sure it will be very enlightening to these 
Members.
    Secretary Young. Can I----
    Mr. Abercrombie. Yes, of course.
    Secretary Young. I would ask time to answer these many 
comments that have been made.
    Mr. Abercrombie. We have time.
    Secretary Young. The key for me constantly as imposed on me 
by this committee and the Congress has been to not waste any 
taxpayer dollars. I am seeking to navigate multiple views of 
this issue. The Congress has a view as articulated in the 
language. I won't cover that again.
    This Administration, in my opening statement I articulated 
that view, which is that additional F-22s are not required. The 
law does not require me to buy these planes as 20. I have 
sought diligently to work with industry and understand if it is 
possible to buy these airplanes, the advance procurement for 
these airplanes--not the airplanes; as the chairman rightly 
said, this is a discussion about the advance procurement--can I 
buy that advance procurement as 4 plus 16 instead of 20 and 
impose no additional costs on the taxpayer and preserve the 
total flexibility and option of the next Administration to come 
and discuss with the Congress whether they want to buy the 
airplanes behind the advance procurement. And that is the 
option, having convinced myself that that is possible, we have 
sought to execute. It is consistent with the law, I believe, to 
execute the advance procurement as 4 plus 16. And so in 
January, the other 16 airplanes could be obligated, which would 
take the balance of obligation up to $140 million.
    And I believe that is reasonably consistent. If that option 
of 4 plus 16 was not totally consistent with trying to make 
sure the taxpayer didn't pay more for the airplanes, we would 
have had to look more carefully at that option. That is my 
fundamental goal here is to obligate money and preserve the 
option, as the Congress has sought to do, without incurring 
costs that are punitive to the taxpayer and without necessarily 
committing this Administration or the next Administration to 
airplanes for which it is not yet decided whether they will 
budget for those airplanes. And I do fully understand that 
Congress still has a decision to make with regard to buying 
those airplanes.
    Dr. Gingrey. Mr. Chairman, assuming that I have a little 
bit of time left to respond to that----
    Mr. Abercrombie. Yes. Then I will go to Mr. Ortiz.
    Dr. Gingrey. Thank you, Mr. Chairman.
    Secretary Young, I understand the explanation you just gave 
to the committee, and I am not questioning your sincerity at 
all in trying to--in your discretion or your opinion, you are 
trying to save the taxpayers money. I don't know that you 
really have the discretion to do that, because it would seem to 
me that when this committee passes a National Defense 
Authorization Act, and we have a defense appropriation or 
authorization act here, an appropriations act, and the 
President signs that, and you have got clear language, I just 
don't see where you--where your authority comes from.
    I have already made that point, but I am going to grant you 
the benefit of the doubt in regard to your sincerity in wanting 
to save the taxpayers money, but as we see it, as this Member 
sees it, you are doing just the opposite, because in doing so, 
you get to January, January 20th, when the new President is 
sworn in, and the long lead time, we have already--it has 
already gapped. It has already gapped. A lot of these vendors, 
particularly those involved in titanium production products, it 
would be a large cost, in the hundreds-of-millions-of-dollars, 
to start that. And then there is the issue of the tail-up 
costs.
    I think it is just not reasonable to expect that the Obama 
Administration is going to immediately on January 21st look at 
this issue and say, oh, yes, of course, now let us get the 
other $90 million for the other 16 advance procurement so we 
can get ready to make a reasonable decision to whether to 
continue the program. What you are doing inadvertently--I am 
not accusing you of doing it intentionally, but inadvertently--
you are fostering the shutdown of this program, and I think 
that could be disastrous for the defense of this Nation.
    Mr. Chairman, I yield back my time, and I appreciate your 
generosity with me.
    Secretary Young. Mr. Chairman, could I address those 
comments, please?
    Mr. Abercrombie. Not just right at this moment. Does that 
upset you?
    Secretary Young. It seems a little unfair, sir, but you are 
the chairman.
    Mr. Abercrombie. Fairness is my middle name.
    Secretary Young. Yes, sir.
    Mr. Abercrombie. Go ahead.
    Secretary Young. Okay. You are very kind.
    Mr. Abercrombie. That is the first time in my life I have 
ever been accused of being unfair as a chairman, and I wouldn't 
want to have that on the record or have you disappointed. So 
you go right ahead.
    Secretary Young. I don't think I meant to accuse you of 
being unfair, but his comments are out there, and I need to 
address them if I could. I will try to be brief, sir. Thank you 
very much.
    Twenty airplanes in a year is about 1.67 airplanes a month. 
That is about 2, 2\1/2\ months' worth of airplanes, and I did 
agree in the ADM to let the Air Force negotiate an option for 
the other 16 airplanes of advance procurement so it could be 
done seamlessly in January. I believe this gets the next 
Administration into January and beyond.
    As I said, I can't fix--the delaying decisions will take 
time, but I think the suggestion that I should make the 
decision about those 16 airplanes in that advance procurement 
over the next Administration which will have to see it through, 
manage it and budget to buy the planes behind it would be 
presumptuous on my part, so I am not sure I should make that 
choice.
    Mr. Chairman, I really appreciate the chance.
    Mr. Abercrombie. There is a clear disagreement as to what 
your duty is here with respect to how we see it from the 
defense bill side and how you think we have written it. Maybe 
the language needs to be written more clearly in the future, 
but that--I will grant you that your interpretation, I think, 
clearly is at odds with what the overwhelming majority, if not 
the unanimous, view of this Armed Services Committee is.
    Mr. Ortiz.
    Mr. Ortiz. Thank you, Mr. Chairman, and I would like to 
welcome our witnesses to our hearings.
    Mr. Abercrombie. Having fun?
    Mr. Ortiz. You know, I know that the Congress passed a 
budget last year, but I am just wondering is the Defense 
Department and Air Force talking to one another? Are you 
engaged in----
    Secretary Young. Yes, sir, on a regular basis.
    Mr. Ortiz. I think one of the reasons that we are here is 
that we are looking at the possibility of whether 20 planes 
will keep the line open or whether we can do it with $50 
million. And then we talk about the possibility--and I know 
that a lot of things are on hold now because we have a new 
Administration coming in. Are you all talking to the new 
Administration? Do you have anybody in the new Administration 
coming in that you are talking to?
    Secretary Young. Those discussions are just beginning, sir, 
and I am confident--and one of the top items on my list for 
discussion with the appropriate people in the new 
Administration is this F-22 decision, because it is a major 
decision, as the chairman has pointed out.
    Mr. Ortiz. So if we wait, I mean, if we don't keep the line 
open, and we wait to see if the Administration decides to go 
ahead and buy whatever needs to be bought, would that be too 
late in the line if we do not provide this money; would the 
line be shut down?
    Secretary Young. Sir, I think, as the chairman has tried to 
very concisely frame the issues, I believe the Department's 
actions will keep this line open and allow total open decision 
space for the next Administration. That decision that I am 
trying to make and trying not to spend 16 airplanes' worth of 
long lead before they can make that decision and spend 16 
airplanes of long lead that might not be used if they don't buy 
those airplanes, as the chairman has said, is not consistent 
with the congressional view to obligate the long lead for 20 
airplanes. But those are two separate issues. What we are doing 
unquestionably keeps the line moving forward.
    Mr. Ortiz. And I know that you say that you have been 
talking to either staff members or members of the committee 
about the issue that we are discussing now. Most of us have 
been gone for some time because we were involved in elections. 
So, you know, I am really sure this committee wants to do what 
is best, but, as Dr. Gingrey just stated a few moments ago, 
there are a lot of rumors circulating out there, oh, the 
Defense Department is punishing the Air Force for not doing 
this and not doing that. I don't think that that is the case, 
but, you know, rumors do float all over the place.
    I just hope that between now and the next few days that you 
can talk to the new Administration coming in and a decision can 
be made, because we are looking at saving money if we can, 
because once you shut that line down, it is going to be very 
costly to operate it, open it up, and the prices of the items 
and airplanes we are trying to buy might skyrocket.
    This is the only question I have, Mr. Chairman. I would 
like to yield to some of the other Members.
    Mr. Abercrombie. Thank you.
    Mr. Wilson is next, to be followed by--Ms. Giffords will be 
after that.
    Mr. Wilson. Mr. Chairman, thank you very much, and thank 
you for being here today, and I share the concerns of 
Congressman Ortiz about what we are facing.
    And, Mr. Van Buren, what is the unit procurement cost 
impact of delaying the decision on advance procurement of 16 F-
22s until March 2009?
    Mr. Van Buren. Mr. Congressman, obviously the cost of the 
Lot 10 production is going to be above the $143 million unit 
procurement cost of the multiyear procurement through Lot 9. 
And we are working through--we have had the ADM now for a 
period of about nine days. We are working through multiple 
options. We are trying to minimize the price impacts above that 
$143 million number to the taxpayer. There is a range of 
options that are being looked at now.
    I can tell you that we receive or I received just this 
morning the ``not to exceed'' prices for the advance 
procurement for those prices, and frankly we simply haven't 
gone through it and evaluated it, but it does appear to be 
consistent with the numbers that were passed in the 
appropriations bill.
    Mr. Wilson. And your response actually gives me greater 
concern as to any precise numbers. Does the Air Force agree 
that providing advance procurement for four F-22s in November 
and an additional advance procurement in January will bridge 
the F-22 program with little or no additional cost to the 
taxpayer?
    Mr. Van Buren. We are working through multiple iterations 
of that bridge right now in recommendations to take back to 
Secretary Young. And I must tell you that I have seen a lot of 
absolute numbers fly around. I am not personally comfortable 
with those numbers because I don't have firm, fixed price 
quotes. What I do have from the contractor is a ``not to 
exceed'' quote which is consistent with the numbers that were 
provided to Congress that made up the appropriations bill of 
2009.
    Mr. Wilson. Well, the general ranges or ``not to exceed'' 
would be helpful, so I hope those are provided to us today.
    Mr. Secretary, if by congressional direction $140 million 
is obligated to the F-22 long-lead items, and the new 
Administration decides to terminate the line, how much of the 
$140 million will provide parts and other items for the 
sustainment of the F-22 or production of the Joint Strike 
Fighter?
    Secretary Young. I think we would have to get an answer to 
you for the record for that.
    [The information referred to can be found in the Appendix 
on page 63.]
    Secretary Young. To be honest with you, there is a lot of 
confusion about the $140 million. It is not, as I think the 
chairman had hoped for, an analysis of the specific parts that 
need to be purchased in order to ensure that we can produce 20 
F-22s. It is an assumption that we would, under regular order, 
buy all the parts for F-22 that are required, i.e., the five 
long-lead parts, the $523 million worth, and as of March 1st 
the government's termination liability if those planes weren't 
purchased would be $140 million. There is a smaller subset of 
that $140 million, which is the set of parts we really must buy 
to avoid breaking production lines and looking suppliers.
    Mr. Wilson. As I conclude, again I want to thank you for 
being here, but I do hope that there will be greater 
specificity in terms of what the numbers are as we proceed.
    Thank you, Mr. Chairman.
    Mr. Abercrombie. Thank you, Mr. Wilson.
    Ms. Giffords had to do a room pick. She had to leave. As 
you know, where you are going to have your office takes 
precedence over everything else, otherwise you are in the 
hallway. So she has no choice on that. And I mistakenly told 
Representative Sestak he was next, and it is clearly Mr. 
Marshall, and then Mr. Sestak will follow.
    Mr. Marshall. Thank you, Mr. Chairman.
    Mr. Young, it has been pretty difficult to follow the back-
and-forth here, but your last statement seems to me to be the 
clearest one to date. Basically the idea is that of the 523, we 
said no more than 140 can be obligated, which gives the next 
Administration the opportunity to decide whether or not to 
continue with the acquisition process. And what you figured 
out, at least in your opinion, is that we can obligate a lot 
less than the 140, 50 million to be precise, and essentially 
accomplish the exact same objective at no additional cost to 
the taxpayer, and, in fact, a substantial saving to the 
taxpayer if, in fact, the new Administration decides not to 
move forward with the acquisition of additional F-22s.
    What I have heard from staff is that your decision to limit 
this to 50 million and to only four F-22s in Lot 10 could have 
the impact of adding additional cost up to $500 million if, in 
fact, the new Administration decides to move forward with 
additional F-22s.
    In your testimony, what you say with reference to that is 
that if the decision whether to move forward is delayed until 
March, and at that time the new Administration decides to move 
forward, then the Department of Defense, quote, only faces 
estimated additional costs on the order of amounts Congress has 
permitted DOD to obligate. I take that to mean--I am a little 
nervous about the ``on the order of amounts.'' It would be nice 
if you simply said it is still going to cost us more than 140 
million, and a total of 523.
    But I take that to mean basically that there are no 
additional extraordinary costs that will be incurred should the 
new Administration move forward. So in effect your strategy 
offers a savings in the event that the Administration decides 
not to, and at the same time doesn't hold out the prospect of 
large additional costs, perhaps an additional hurdle, as part 
of the decision whether to move forward with additional F-22s.
    What bothers me, of course, about that is just having heard 
the possibility that there could be huge additional costs 
associated with this decision, and could you clarify that for 
us?
    Secretary Young. Congressman, I think you have been 
extremely articulate, maybe more so than me, in explaining this 
situation.
    There are concerns, as other members have articulated. I 
think the chairman said it best. This is a very complex 
production process that starts with raw materials and builds 
sophisticated items. It is difficult to estimate all the 
aspects of this, and that is why you hear ``on the order of.''
    But I do believe we----
    Mr. Marshall. You chose not to say on the order of $500 
million as possible additional costs?
    Secretary Young. Well, to be honest with you, sir, if I say 
it is $500 million, that will be the starting point potentially 
for industry negotiation. I am trying very hard not to endorse 
those negotiations because there are other people--I actually 
have leadership members who have built airplanes that do not 
believe that some of the cost estimates for the gapping and the 
delays are legitimate, and that industry can manage those 
effectively to not have them be real.
    I am not ignoring the industry estimates, but I am also not 
granting them credibility. And so the way you said it is 
exactly the right way. If we do nothing till March, I could 
face--and that is what I was told by industry--a cost, a cost 
which I would seek to negotiate away on behalf of the 
government. I think the likelihood of that cost, a higher cost 
of the airplanes in March, is probably real. If I give them----
    Mr. Marshall. Well, could you give us your range of what 
you think those additional costs might be?
    Secretary Young. I would appeal to you, Congressman, not to 
ask me to do that. I said it was on the order of what you 
allowed me to obligate, so I have therefore clearly put it----
    Mr. Marshall. You are worried that if you go ahead and 
mention a figure that, as you put it earlier, that is going to 
be the starting point for negotiation. Fair enough.
    Mr. Abercrombie. Mr. Marshall, will you yield to me for a 
moment?
    Mr. Marshall. I don't have a choice.
    I mean, you are the committee chair with fairness in the 
middle.
    Mr. Abercrombie. In the interest of fairness, if you will 
look to--you don't have it. Let me--I am looking to J here in 
my folder. Let me give you something to work with. I think you 
got a copy.
    The Air Force gave us F-22 and F-35 procurement cost 
estimates. And I am fully accepting what Mr. Marshall and what 
you were trying to get at. The Air Force has provided an 
estimated cost, and I presume that they are just--the reason, 
they go from 143 now to--if you did, in fiscal year 2010, 20 F-
22s, it can, depending on the time frame, now, January and 
March, the figures go from 143 to 153, 163 and then between 170 
and 178. That is the Air Force figures.
    And if I recall what you told Mr. Marshall in return, that 
obviously a dispute can take place as to whether those numbers 
can be negotiated down, or negotiated up for that matter. 
Commodities prices are up and down in today's economic 
situation, energy costs, all the rest of them factor in and 
out.
    But that would give--what Mr. Marshall is asking, and why I 
asked him to yield to me, was to give him the actual numbers 
that the Air Force has provided; and perhaps then you and he 
can have a conversation at this point at least using the 
estimated costs.
    Secretary Young. So could I finish that one thought and 
then add, I do believe if we do the 50 million now, and nothing 
until March, the price of the airplanes could be higher by an 
undetermined and unnegotiated amount. I believe the government 
needs to, to avoid a cost to the taxpayer, obligate in January 
some portion, possibly all the way up to the full 140 million. 
And I think that action could insulate the government from 
additional costs, subject to our negotiation with the 
contractor.
    And I apologize to be at some possible odds with the 
chairman. I don't want to be. But I do believe a next 
Administration needs to make that decision to obligate those 
funds for those airplanes.
    With regard to the numbers he gave you, the 143 is the 
current multiyear cost, so that is a totally different--that 
was negotiated at 60 airplanes under a multiyear. The 153 is 
what the Air Force, working with industry, thinks could be a 
price that reflects inflation as a single lot buy of 20 
airplanes. And then there is estimating that is largely 
informed by industry estimates that takes 153 up to 163, based 
on the timing of advanced procurement.
    I will certainly defer to Dave Van Buren, but my 
understanding is these are not formal Air Force estimates of 
the price.
    Mr. Marshall. Let me, if I could, Mr. Chairman. Thank you.
    Section 134 mentions two dates for decisions. One is 
January 21 and one is March 1. Are you saying that prior to 
January 21, the 140 million should be--pardon me, the balance 
of the 140, the 90 should be committed?
    Secretary Young. I am saying on January 21.
    Mr. Marshall. So on January 21 it should be committed. Are 
you suggesting----
    Secretary Young. To avoid any additional cost to the 
taxpayer in the event the airplanes are bought, and that is my 
goal.
    Mr. Marshall. And are you suggesting that the new 
Administration might decide prior to January 21 that it is not 
going to ask for additional F-22s; consequently, it might not 
choose to obligate the additional 90 million, come January 21, 
and then at some time between January 21 and March, announce 
that it is not going further with the program? Is that what you 
are suggesting?
    Secretary Young. Or announce that they are going forward, 
but they don't want to decide on January 21. It is just that 
they will face some risk of the airplanes costing the taxpayer 
a little more money if they buy themselves decision space 
between January 21 and March.
    Mr. Marshall. Again, your latest little round here, the 
latest statement you made with the word ``or.'' So do you 
contemplate that the new Administration might decide prior to 
January 21 that it is not moving forward with the F-22?
    Secretary Young. I try not to contemplate what the next 
Administration will do at all. My job is----
    Mr. Marshall. Well, if it is not conceivable to you that 
they might choose, prior to January 21, not to move forward, 
then, if you are not holding out that as a possibility, it 
seems to me you might as well go ahead and commit the entire 
140 right now.
    I am a little confused as to what your strategy here is, 
and you might be able to help me out.
    Secretary Young. I am sorry, sir. Let me make sure I 
understand. It would be my view that we would obligate the 50, 
and then on January 21 or beyond, the next Administration needs 
to decide whether to obligate beyond the 50 to a 140 and decide 
whether to buy the airplanes or not. I believe all those 
options are preserved.
    Mr. Marshall. When is it that the cost jumps up? On the one 
hand, you seem to be suggesting that if the additional $90 
million is obligated January 21, there will be no significant 
additional cost. On the other hand, you seem to be suggesting 
that if there is a delay until March, we could face very 
significant additional costs. And so it seems to me your advice 
here, at least based on what you said a few minutes ago, is 
that the new Administration should obligate the additional 90 
January 21; don't delay, do it then to lock in costs. And if 
you are saying that and at the same time saying they are not 
going to make a decision by then, then it seems to me--well, 
that is why I focused on the ``or.''
    If you are not contemplating the possibility that the new 
Administration will privately, not publicly, announce--will 
privately make a decision the F-22 is not moving forward by 
January 21, and you are saying if they don't decide that by 
January 21, then they ought to obligate the additional 90, why 
not obligate it now? I guess that is the simple way of saying 
it, because the risk associated with delaying until March is, 
from what you say, quite significant. It could be that we have 
huge additional costs.
    Secretary Young. I think it is to be negotiated. I think 
the probability of additional costs, if no action is taken 
until March, is reasonably high. I think the next 
Administration can, as you said--I just really don't want to 
speak in any way for the next Administration. But I am sure 
they will contemplate this issue. They may even privately come 
to a conclusion. And they have two choices.
    On January 21 they can obligate the $90 million and decide 
there is some chance between zero and 100 that they will buy 
the airplanes, and they would rather preserve the option to buy 
the airplanes at no additional cost to the taxpayer, or they 
could choose not to obligate the $90 million and accept that 
they still have a decision to be made between then and March 
1st, but that decision may cost the taxpayer more money for 
those airplanes. They have every option available to them, and 
that is my job, to make available to them every possible 
option.
    Mr. Marshall. Thank you, Mr. Chairman.
    Thank you, Mr. Young.
    Mr. Abercrombie. Mr. Bartlett and then Mr. Sestak.
    Mr. Bartlett. Thank you very much for permitting me to sit 
in on this subcommittee hearing.
    Mr. Young, thank you very much for your many years of 
service to your country.
    I have a generic question that I need the answer to before 
I can intelligently make decisions relative to the kinds of 
things we are talking about today. I gather that in the 
development of a budget, that the size of the pie is determined 
and then the services cut into their individual pieces. That, 
obviously, is a somewhat political process, and we need to have 
the assurance that that is a rational cut. Then in trust 
service priorities are developed, and then you submit your 
budget to the Congress.
    How do we determine whether the third priority for the Air 
Force is above or below the third priority for the Army?
    We clearly cannot procure all the things that we are 
developing. We clearly do not have the money to prepare as we 
would like for the two kinds of wars that we may be faced with 
in the future. The kind of wars that we are fighting now 
require none of this really high-tech type of equipment. But we 
will one day face a peer, either a resurgent Russia or China. 
China, this year, as you know, will graduate seven times as 
many engineers as we graduate. That cannot continue for very 
long and we still remain the world's undisputed economic and 
military superpower.
    When we come to decisions like we are faced with today, how 
do we determine whether this is a higher priority than 
something that the Army wants, and we clearly don't have the 
money to support both of those?
    Secretary Young. Congressman Bartlett, my experience in 
that process is the first order is what you said: The budget is 
sliced relatively amongst the services and the services 
internally make that decision. Rarely have I seen an OSD 
decision that would significantly--would adjudicate two 
programs between two services on a relative priority basis. The 
services build the heart of the budget, and they make those 
decisions about their respective priorities.
    Certainly, one thing I have discussed with both Secretary 
Gates and Secretary England is a need for OSD to play a greater 
role to ensure the joint and crosscutting capabilities are also 
well addressed in the budget.
    Mr. Bartlett. But if OSD doesn't do that, then we have to 
do it. Where do we go for the information that would give us 
the intelligence to make these kinds of decisions? I just have 
no idea, when we are talking about a third priority for the 
Army and a third priority for the Air Force, if they are equal. 
One of them, from a national security perspective and long-time 
concerns, may be well above or below the other. And if OSD 
won't help us make those decisions, how do we make them?
    Secretary Young. I think OSD can help with you that. I 
mean, there are fundamental documents like the national 
security strategy, and then there are independent offices, the 
Office of Program Analysis and Evaluation, PA&E, and my own 
offices that have some of the data; and then the Joint Chiefs 
of Staff (JCS) team which does some wargaming and modeling to 
help inform those competing priorities in the relative warfare 
value of them. So I believe we can help you with that.
    And I think actually you are in the unique position to take 
the service input and then OSD, PA&E inputs in fact on this 
very F-22 issue, Program Analysis and Evaluation staff, I 
believe, came and briefed on their study of the need for F-22. 
You have access to the Air Force's view, as does the 
Department, and you can absorb and evaluate all that 
information. But you will potentially come to different 
conclusions than even the OSD team does about the relative 
priorities.
    Mr. Bartlett. I have the concern that too frequently I 
think the decision is made on the basis of who is the best 
lobbyist for the base or the factory that is their district. I 
don't have any base in my district that is threatened. I don't 
have any manufacturer in my district which is threatened. And I 
think that too often here the decision as to which way to go is 
made by the person that most effectively lobbies for that 
cause. That clearly is not what we ought to be doing. It ought 
to be determined on the basis of what is the best thing, 
broadly, for our military and for America.
    I would hope that in the future that we will get more help 
than we have gotten in the past. You can't--everything can't be 
top priority. We just do not have the money to fund everything; 
and in the future we are going to have even less money, so we 
are going to be faced with even tougher decisions here.
    I want to thank you for very much for your service. The 
best of luck, sir, in your future.
    Secretary Young. I hope we are doing what you are asking, 
and I think you have heard those beginnings of that from 
Secretary Gates. In his testimony he has testified that he has 
seen the analysis and he believes that we are on a path to the 
right mix of, in this particular space, F-22 and Joint Strike 
Fighters (JSF), and so we are presenting you the Department's 
view.
    There are some in the Air Force that have a different view, 
and in the Congress obviously, in providing a long lead, has 
taken a different view than the Department. That will be the 
hard thing for you all of us to adjudicate. But from Secretary 
Gates down, there has been a hard look at that analysis and a 
view that it is a higher priority to do other things in the 
Defense Department than buy additional F-22s at this time.
    Mr. Bartlett. Thank you very much.
    Thank you, Mr. Chairman.
    Mr. Abercrombie. Mr. Sestak, at long last. Sorry for the 
mix-up.
    Mr. Sestak. Thank you, Mr. Chairman.
    Mr. Secretary, for a couple of years we had, I think, 23 
aircraft one year and then the next year, single-year 
procurement, another 23 of the F-22s, I think for a total of 
56. And then we went into 3 years of multiyear procurement for 
60.
    Do you remember what the cost differential was between the 
56 that we procured those 2 years and the 60 that we are paying 
for that multiyear?
    Secretary Young. I don't off the top of my head. I can get 
that for the record.
    [The information referred to can be found in the Appendix 
on page 63.]
    Mr. Sestak. The reason I am asking is, I asked my staff, 
and the difference was $1.8 billion, which meant that a short 
while ago, the Congress did not have a problem of procuring 4 
additional aircraft, from 56 to 60, at the cost of $450 million 
for each F-22. If that is the case, I am kind of not as taken 
by these arguments on whether the additional cost of $100 
million--or even if it does go up to $500 million, where were 
we in Congress talking about the cost back then of $450 million 
per each of those 4 additional aircraft as we went from 56 to 
60?
    I bring that out because--and I am setting aside the 
constitutional issue for a moment because it seems that we have 
kind of gone ashoal here on the matter of cost. And I do think 
that is the right question, but in a much larger sphere, which 
Mr. Bartlett got to well. And that--I think Mr. Gates made the 
right decision here pragmatically. I am setting aside the 
constitutional issue for a moment, although you seem to have 
fine-tuned that with a 21 January decision date, which we know 
is not realistic for Mr. Obama to roll in and make a decision 
on that day.
    But I kind of have listened to this debate in DOD about 
more F-22s, and what Mr. Bartlett again so well brought 
forward. I mean, we have lost $12 trillion in wealth in our 
households in the last 6 months, and the costs that are 
attendant to trying to reset our military forces in the future 
after this war are enormous.
    I have watched this F-22, which some have likened to the 
Seawolf of the Skies, to where after three Seawolfs, they 
stopped and went to a Virginia class ship as the Cold War 
ended.
    But we have taken this F-22 from dogfighter to air to 
ground to close air support to cruise missile strike, and yet 
if there was ever a case study for making sure this decision 
was right, of billions of more dollars, before we either, at 
the possible loss of $100 to $500 million, I think the quiet, 
cautious brake you have put on this is well served, at least 
for that to set up the F-22 as the case study to where you have 
a Cold War-era product that has gone through four different, at 
least I think, changes from dogfighter down to cruise missile 
killer, at the end of its production line, but in the seventh 
year of a global war on terror.
    And if there was a case study to hold us all back, your 
executive branch and this Congress to say, wait a minute, we 
were willing to spend $450 million--excuse me, $1.8 billion for 
four aircraft. We went from 56 to 60 multiyear buy. Maybe it is 
worth a little bit of tax to make sure this right decision is 
made, because Mr. Bartlett--and I wasn't going this path till 
he spoke up--has laid it out well. This is bigger; I think it 
is the case study of ``wait a moment.''
    Do we really know what we are doing here when we talk about 
a new era, and I go back to that analogy of Seawolf of the 
Skies? Is there a comment on that?
    Secretary Young. Actually, I would be most grateful for the 
chance to comment.
    I think there have been some comments today raising 
concerns about the Department's support for F-22. It may be a 
finer degree of detail. You are dealing with a very appropriate 
and high-level picture. But the Department was on a path in the 
2009 budget to only have, to have 100 increment 2 and increment 
3.1 jets and then a smaller fleet of about 80 3.2 jets, 
significant differences in capability.
    To get more jets to the full increment 3.2 capability, to 
make them full-up rounds, $6.3 billion of research and 
development (R&D) is requested to go back into F-22 and approve 
that architecture and backfit all those jets. This Department 
has tentatively put that in the Program Objective Memorandum 
(POM) 10 budget to make that F-22 fleet that we have and have 
bought capable.
    And so you have very rightly highlighted some tough 
decisions. You can make different decisions and buy more F-22s 
and have a high/low mix. We have supported tentatively in this 
budget--and this budget will clearly be reviewed by the next 
Administration--but tentatively supported making the F-22s we 
do have fully capable assets at a very--at $6.3 billion of 
procurement and something on R&D and something on the order of 
$2 billion of procurement. So significant investment is still--
almost $10 billion is still going into F-22.
    Mr. Sestak. If I could, I still am taken by the argument of 
the constitutional intent, if not technicality. And I am not 
dismissing that, but if I could make one other statement, I 
think the issue that was well raised by the chairman on the 
supplemental--I have kind of been discouraged, frankly, over 
the last year or two that I have been here.
    How could we have been putting into the supplemental anti-
submarine helicopters for the Iraq war? How could we have been 
putting into the supplemental steaming days for the Navy that 
traditionally are funded at 29 days every quarter, but now we 
are slipping some of those in the supplemental? I think it is 
an atrocity to all of a sudden come forward and say we are now 
going to slip four F-22s or whatever into the supplemental that 
is supposed to be serving our men and women in uniform.
    There is a process, and I hope that as the year goes on, 
next year, we get back into the right process, if I could.
    But thanks for your comments. Go ahead if you wanted to 
comment on that.
    Secretary Young. Just one more comment on that. I won't 
address the other issues. I think we would need the Comptroller 
or others to.
    On the airplanes, the Department has sought in some cases 
to replace combat losses, and we did ask for Joint Strike 
Fighters because we have lost some fighters in the war. 
Congress denied those because it wasn't ready for production. 
So the four we are talking about, while also serving as a 
bridge on F-22, are really being asked for because they are the 
available and producible airplanes for our combat losses.
    Mr. Sestak. We procured those aircraft, and you know how it 
is done. When we buy 100 aircraft, we already figure in how 
many would be lost to combat. So that is a disingenuous 
argument, and you know that. So I have to dismiss that.
    But if I could close, I do think that how you set this up 
is wise for us to think about this F-22, because these are 
tough decisions if we really do want to--which I think Mr. 
Rumsfeld wanted to do the day he took over--transform our 
military.
    Thank you.
    Mr. Abercrombie. Mr. Bishop.
    Mr. Bishop. Thank you, Mr. Chairman. I appreciate the 
opportunity.
    Mr. Young, I appreciate you saying earlier to one of the 
other questions that obviously the analysis of how much planes 
would cost would be placed at risk if we follow the procedures 
you have outlined so far.
    One of the things that has me concerned is, we do advance 
procurement practices repeatedly, year after year, in this. And 
as I am looking at section 134 of the bill, the B section has 
the language of the $140 million.
    Would there be--if that section had not been included in 
the conference report, would there be any question in your mind 
what the intent of this Congress, especially the House Armed 
Services Committee (HASC), was as to the allocation of these 
funds and the purchasing of these planes?
    We authorized $523 million to do this program. In the 
conference committee there was a question of the 140 million 
that was placed in there. Had that language not been included 
in the conference report, would there be any question in your 
mind as to what the intent of this Congress was as to the 
procurement, advance procurement, of these F-22s?
    Secretary Young. I think I understand the intent of the 
Congress, and I am trying to comply with the intent of the 
Congress while preserving the next Administration's options, 
and I believe the 4-plus-16 path is creating that opportunity.
    Mr. Bishop. And this language was not the reason for you 
coming up with this obscure approach to get to the 20?
    Secretary Young. No, absolutely not, sir.
    Mr. Bishop. So there was something else that confused you 
as to what the intent of Congress was?
    Secretary Young. I am not confused as to the intent of 
Congress.
    Mr. Bishop. Well, that is not what I am hearing from up 
here on this part of the room. But let that be as it may.
    OSD, and especially in your report, made a great deal of 
effort on some of the studies that have been done. Can I simply 
ask you about the Whitney Bradley Brown study which was 
commissioned by OSD in 2006? It was funded by Congress and 
approved by Congress, authorized by Congress.
    Why has that study not been released?
    Secretary Young. I am not aware of that. I will get you an 
answer.
    Mr. Bishop. I am making the assumption that--and I was not 
here earlier, Mr. Chairman--but the assumption there are at 
least 30 Air Force, Air Combat Command, OSD studies, including 
the one by Whitney Bradley Brown, which have found different 
numbers than the ones you certified in your opening statement 
as appropriate for Air Force needs.
    Am I wrong in that assumption? There are that many studies 
that are out there with differing numbers?
    Secretary Young. I am not aware. I reviewed, in preparing 
for testimony, that there were at least three studies. One of 
the most recent Air Force studies is six years old, has 
fundamentally different assumptions, like two major combat 
operations. The Whitney Bradley Brown study has some different 
assumptions. The most recent is the Joint Air Dominance study 
that has one major combat operation and endorses the 183 
airplanes.
    Mr. Bishop. So has the Whitney Bradley Brown study been 
released?
    Secretary Young. I don't know. I will have to get that for 
the record, sir.
    Mr. Bishop. I would appreciate that.
    [The information referred to can be found in the Appendix 
on page 63.]
    Mr. Abercrombie. Would you yield a moment, Mr. Bishop?
    Mr. Bishop. Maybe. Are you going to be kind?
    Mr. Abercrombie. No.
    On the Whitney Bradley Brown study, Mr. Sullivan will bring 
us up to date.
    Mr. Sullivan. Mr. Bishop, staff has a copy of the Whitney 
Bradley Brown study if you need it.
    Secretary Young. Thank you for clarifying that.
    Mr. Bishop. Thank you. I appreciate that because I did not 
know its status or if it is classified, but the numbers are 
significantly different than what the gentleman has given as 
his recommendation; is that not correct?
    Mr. Abercrombie. I can't answer.
    Mr. Bishop. I can. You might as well say ``yeah.''
    Mr. Abercrombie. Well, you are asking me, and I can't 
answer with authority. But I understand what the point is. And 
it is available, so we can clarify what that comes down to.
    I can say, Mr. Young, that in all my exchanges with Mr. 
Bishop, I would never want to bet that he was going to be wrong 
when he makes an assertion. So I will take your word for it.
    Mr. Bishop. Mr. Chairman, you just don't know me well 
enough. That is the only problem.
    Mr. Young, I appreciate the opportunity of asking a couple 
of questions here, and I appreciate that. I will just simply 
close and yield back the rest of my time by saying 4 is not 20, 
and I think the intent of Congress is pretty clear.
    Thank you, Mr. Chairman.
    Mr. Abercrombie. Thank you.
    Mr. Reyes is next.
    Mr. Reyes. Thank you, Mr. Chairman. I apologize for being 
late, but I am coming from another hearing that I was chairing.
    Mr. Young, one of the, I guess--and if I go over the same 
area, I apologize. But we asked the Air Force to provide us the 
cost estimate for a bridge. And I just heard my colleague on 
the other side talk about ``4 is not 20.'' And so I don't want 
to belabor that, other than to say that we are talking about 
very important issues to our national security. And when we 
authorized and appropriated the $140 million per aircraft that 
we were told, that was the cost in order to make that bridge 
happen.
    What is the answer? And I wasn't here, so I apologize, but 
how do you answer us on that one issue in the context of the 
decisions that were made?
    Secretary Young. Well, I want to make sure you understand 
that the 140 million was actually assuming all 20 airplanes, 
the advance procurement, was under contract and it was a number 
that said if in March you stopped--and that was the termination 
liability, that is what the government would have to pay. It 
was not a number that was based on an analysis of the items and 
the suppliers I must keep working in order to ensure I have the 
opportunity to buy F-22s.
    I have sought--because the bill to buy 20 additional F-22s 
is on the order of $3 billion--that is money that is not 
presently in the budget, and I have seen the construction of 
the budget; and I would tell you, the Air Force will--it will 
lead to some difficult choices in the Air Force to buy those 
airplanes. And I want to be sure and respect that the Congress 
may make those.
    The Congress in the end will deliberate the 2010 budget, 
but in leaving decision space for the next Administration, and 
trying not to charge the taxpayer more money and trying to 
comply with the congressional intent, I sought to construct a 
strategy that would do 20 airplanes. That is 4 plus 16.
    So we are on a path to obligate advance procurement for 4 
airplanes, which is a solid initiation on the bridge on F-22, 
and then an option that can be executed in January for the 
remaining 16; and it lets the next Administration make that 
decision to execute that option, hopefully, and buy the planes 
if they choose to, with no penalty to the taxpayer, or choose 
not to buy the airplanes and engage the Congress in that debate 
about their view of F-22.
    And so my goal, as directed by Secretary Gates, is to 
create a bridge and let the next Administration have the full 
ability to make a decision.
    Mr. Reyes. So since I wasn't here, Mr. Chairman, so I 
haven't been here when we authorized and appropriated for 20 
aircraft at 140 million, we were not serious about that, or we 
weren't taken seriously about that?
    Mr. Abercrombie. You are looking in the wrong direction, 
Mr. Reyes.
    Mr. Bishop. Well, I just want to make sure I understand it.
    Mr. Abercrombie. Well, that is the contention.
    Mr. Reyes. Mr. Chairman, I would like to yield to my 
friend, Mr. Marshall, the remainder of my time.
    Mr. Abercrombie. Sure.
    Mr. Marshall. Thank you, Mr. Reyes.
    Mr. Van Buren, I would like to follow up with you the line 
of questioning that I had for Secretary Young.
    Okay. So the plan at the moment is to take 50 and obligate 
that, with the possibility of obligating the balance, 90. And 
Secretary Young suggested that the new Administration probably 
ought to make that decision by January 21, whether to obligate 
the additional 90; and if the decision was made by January 21 
to do so, there would be no significant additional cost.
    Do you agree with that?
    Mr. Van Buren. There will be a cost above the 143 multiyear 
cost, no question. What I am uncomfortable in doing right now 
is giving you an exact cost above the multiyear procurement.
    Mr. Marshall. Is it multiples?
    Secretary Young. To be clear, there will be a cost above 
the multiyear no matter what we do. Is that fair?
    Mr. Van Buren. Yes.
    Mr. Marshall. Well, I am trying to figure out--you would 
help us greatly if you would just go--Mr. Van Buren, why don't 
you try and take a shot at this, if you would simply tell us: 
if the 140 were obligated now, versus 50 now; 90, January 21, 
or 50 now; nothing until March 1, and then we scramble and try 
and do something March 1.
    And I suppose actually we should be thinking about the 
legislative process here a little bit more. And the fact of the 
matter is, if the new Administration says we are not interested 
in purchasing this next lot of F-22s, we could say we disagree. 
And that would take some time, and so there would be a 
significant additional delay during which period of time 
probably Members of Congress would be wondering whether or not 
it was so wise to stick in the 140 bridge and whether we didn't 
make a mistake by limiting the 523 at all--just do it. And then 
we will argue with the next Administration whether or not we 
should be buying additional F-22s.
    But that is for another day. For right now we are just 
trying to figure out this 140.
    So can you tell us roughly what happens if we obligate the 
140 now, versus just 50 and then 90, January 21; or we postpone 
the additional 90 until March 1?
    Mr. Van Buren. Well, I think as you change the dates by 
which you obligate the money, you start to run into greater 
risk with regard to subcontractor production lines that might 
be gapped to some degree. You run the risk that it is not as 
efficient as if, let's say, you were running a multiyear 
procurement or tailing in exactly in line with the previous 
procurement.
    The order of magnitude of that is what I am comfortable in 
giving you an exact number now. We have a not-to-exceed, which 
is consistent with our previous numbers, which I just mentioned 
we just received. We haven't done a thorough analysis of that 
to look at the parts, look at the termination liability (TL) 
component of that. And so--you have spoken of some numbers 
earlier today. We don't have those cast in concrete, but they 
are on the order of magnitude that you would look at at the 
153.
    Mr. Marshall. I didn't necessarily follow that. You said 
``not-to-exceed.'' You are comfortable enough----
    Mr. Van Buren. Congressman, you asked the question if we 
proceeded with the turn-on of the 20 right now.
    Mr. Marshall. Right.
    Mr. Van Buren. And the best estimate I have is something on 
the order of that 153 million. That is the delta between the 
multiyear procurement and if we went out on a single-year 
procurement of 20 aircraft.
    Mr. Marshall. Well, I am also asking the question because 
right now we are talking about no more than 20; we are not 
talking multiyear. And at the moment the question is simply 
whether it should be 140 obligated now or 50 obligated now. And 
so if it is only 50 obligated right now I am trying to figure 
out what happens on down the road, what additional costs. The 
Secretary is raising his hand.
    Secretary Young. At some peril to myself, but because we 
ought to answer your question, there is an industry piece of 
paper that says if we do 50 now, 90 in January, and the 
President makes a decision in March, that strategy could cost 
$200 million more.
    Two weeks ago, when I discussed this with industry, it was 
50, 90 in March, would yield probably no significant change in 
the price. If we did 50 now and nothing until March, that would 
be $200 million.
    The numbers keep moving. People are doing legitimate 
analysis of a complex program. The best indicator we can give 
you is the ``not-to-exceed the offer.''
    When I tried to construct this 4 plus 16 so the next 
Administration had complete decision space, I was told buying 4 
plus 16 advance procurement could cost more than buying 20 of 
advance procurement. The Air Force today received a not-to-
exceed estimate which is a contractually useful number that 
says, indeed, the advanced procurement obligated as 4 plus 16 
will cost no more than we thought it would cost for 20.*
---------------------------------------------------------------------------
    * The description of the not-to-exceed estimate provided by the 
witness is contrary to the not-to-exceed estimate provided to the Air 
Force, as shown in the Appendix on page 59, paragraph 8.
---------------------------------------------------------------------------
    That is excellent news. It reflects good cooperation 
between industry and the government to try to hold the prices 
for the taxpayer.
    Mr. Marshall. Does that not-to-exceed contemplate that the 
additional 90 will be forthcoming by January 21?
    Mr. Van Buren. The not-to-exceed for the four aircraft is 
valid until 26 November. The not-to-exceed for 16 aircraft and 
20 aircraft is valid until 16 March 2009.
    Mr. Marshall. Well, geez, it would have been helpful if you 
guys had just told us that a little while ago.
    But thank you, gentlemen.
    Mr. Abercrombie. Thank you very much.
    Mr. Hayes, you are next. May I just preface your inquiry by 
extending to you my aloha for your friendship and your service 
on this committee. And I say friendship first, because that is 
something that you extended to every Member of this House, and 
most certainly to me. And I want to express to you that I hope 
we will be seeing you in the future.
    Mr. Hayes. Neil, thank you very much. I reflect the aloha 
as well.
    I remember our first encounter some 10 years ago. You were 
sitting about right here, and we were talking about Hawaii 
arising out of Kosovo somehow or another. But, anyhow, you have 
been a wonderful friend, both to me and to the military.
    Mr. Young, you have gotten a number of questions, and I 
think if there was any lack of clarity, if Congress wanted to 
spend the money buying the aircraft that the Air Force is going 
to stay in the fighter business and be anywhere near 
competitive with others around the world, we certainly badly 
need these. And a few tankers to go with them would be nice.
    On the $50 million question, how--when you talk to 
industry; and I think that is a good thing--how does 50 
million, I mean, how many joints and grease fittings do they 
cover with 50 million? What is the data to keep them going at 
50 million until January 21? How does that work?
    Secretary Young. Well, as you know, the government was at 
some risk here anyway because normal order, as done on the 
previous F-22s, would be to provide full, advance procurement 
(AP) early in the year, which would have been the full 523. We 
were--you know, the money was parsed, and so at least I read 
into the intent of Congress, and this may be important, a 
limitation to 140 until the President could make a 
certification. That parsing of the AP, in and of itself, gives 
industry at least the opportunity to ask for higher prices 
associated with that.
    In reading the intent of the Congress and trying to be 
careful with taxpayer dollars, we talked with industry about a 
construct that would let us obligate the AP as 4 plus 16, and 
four airplanes of AP as a fractional basis of 140 is less than 
$50 million. But we wanted to make sure there were no 
restraints and no restrictions and no underfunding of the 
minimum supplier activities necessary for the lines to continue 
and the four airplanes to be in process with advance 
procurement, again, with the idea of having a line that is 
healthy. But it is extremely dependent on the next 
Administration to make a decision about continuing F-22 
production. So the 50 was a fractional basis with margin, if 
you will, of the 140 for four airplanes.
    Mr. Hayes. So did they give you any idea of--the 
manufacturers, of what the $50 million would be used to do and 
how it would--and at the 50 million level, rather than 523, it 
would really trickle down to the supply chain. What damage 
would be done to the supply chain?
    Secretary Young. We are certainly trying not to have damage 
done to the supply chain, and there is actually one detailed 
chart we could give you for the record that identifies the 
specific suppliers who will build parts, at what periods of 
time. And many of it, I am sure you are well aware, are some 
specialty metals and castings that have to be done.
    So the Air Force has a very good-quality understanding of 
which suppliers are critical to the front end of building 
additional F-22s; and we understand the funding addresses those 
suppliers with a need to make another funding decision, 
preferably in January.
    One issue has emerged here recently, and that is on some 
particular titanium ingot. And we are going to relook at that 
issue and make sure we understand the health of those suppliers 
to support this program, because there is a possibility that 
the work they would do could be used in other aircraft 
programs, including JSFs, if F-22 didn't continue; and 
obviously continuing with them would make sure F-22 could 
continue.
    Mr. Hayes. Mr. Van Buren, do you have any different view of 
the health of the industry and the supply chain based on your 
position with the Air Force?
    I mean, JSF and F-22 are two entirely different airplanes.
    Mr. Van Buren. Well, we have indication that there may be 
half a dozen suppliers out there for those specialty metals 
that Mr. Young mentioned that may be at risk here. And I think 
that is what we are trying to do in work--our response to the 
ADM is to identify those specific folks and what is in the best 
interest of the warfighter and the taxpayer for continuing that 
line, to leave that option open.
    Mr. Hayes. Well, with national security in mind, go back 
and get all the money, spend it, get the planes and give me 
some tankers to fuel them.
    Thank you, Mr. Chairman.
    Mr. Abercrombie. Thank you, Mr. Hayes.
    I am going to just ask a couple of questions, and then we 
will go to Mr. Gingrey to close out, unless someone wants 
another round besides Mr. Gingrey.
    Okay, just for clarification's sake--it may help us as Mr. 
Gingrey follows up and concludes--I just want to make sure that 
I understand and for the record.
    To which analysis were you referring when you made the 
decision about the four additional F-22s? I mean, why it wasn't 
three or why wasn't it five? What was the rationale?
    I think you have gone over this in effect, but I have lost 
my way. Why were you deciding on the 4 plus 16? Why isn't it 
five plus what, or et cetera?
    Secretary Young. Secretary Gates had indicated in testimony 
that he intended to request four F-22s in a supplemental, based 
on a connection to combat losses for airplanes that we have 
indeed lost. So that was the starting point for the discussion. 
That discussion continued into my discussion with industry 
about whether four and the timing would be valid with respect 
to----
    Mr. Abercrombie. Well, with respect to Mr. Sestak's 
observation and so on--I don't necessarily want to repeat that, 
but what I am driving at is that you mean it would have been 
five if there had been five losses or six or one?
    What if it had been no losses? There wouldn't have been any 
proposal for anything, and we would have just gone for the 20?
    The reason I am asking the question is, I think that Mr. 
Marshall has caused me to reflect between your answers and Mr. 
Van Buren's answers to Mr. Marshall. I am trying to figure out 
how are we even at four then? Why are we doing anything?
    Secretary Young. Well, I think you have rightly, and----
    Mr. Abercrombie. Fairly?
    Secretary Young. You have rightly and fairly provided 
advance procurement that is needed so that that line is bridged 
to the next Administration. And I must be honest with you, that 
I did read some intent in the Congress' work and legislation 
that said you did want the next Administration to be able to 
make this decision. You restricted a portion of the 523 until 
they can make the decision. And all my decisions are, I think, 
trying to be consistent with that.
    Mr. Abercrombie. But I am not--I understand that and I 
accept that. I mean, I may not accept that I agree with it, but 
I accept that that is what your reasoning is.
    What I am trying to get at, in light of the discussion that 
both of you just had with Mr. Marshall, on both occasions that 
he engaged with you, I am trying to figure out why we are doing 
anything at all, then, over and above what the intent of 
Congress might or might not have been in your estimation.
    Secretary Young. So you have provided funds to bridge the 
line. That gives the next Administration a chance. We have 
connected it to the fact that Secretary Gates and the 
Department believe we legitimately should buy four additional 
airplanes to bridge, or for the fact that we have combat 
losses. And so I think that is the essential element that you 
have provided us the opportunity to do.
    Mr. Abercrombie. Okay, I understand.
    We are right back to what Mr. Reyes, then, most recently 
put forward. We have a basic confrontation here as to what the 
intent is and whether or not you are going to fulfill that 
intent and what your interpretation is of what is required of 
you that fulfills that intent. Because otherwise it would be 
zero; if your reasoning prevails today, you wouldn't put 
anything in here at all.
    Secretary Young. I don't think, sir, it would be zero. But 
trying to balance these multiple, competing interests--some of 
which I kind of every day feel like come directly from you, to 
be honest--the one thing I can do, definitely----
    Mr. Abercrombie. They do.
    Secretary Young [continuing]. I can honestly do is, I can 
spend advance procurement for four airplanes because this 
Administration intends to at least propose that those four 
airplanes be bought.
    Mr. Abercrombie. I don't really think there is a competing 
interest here because, as I read the Constitution it is not a 
competing interest. The Congress tells you what to do.
    I grant you that there has been this idea of a unitary 
executive and so on, all of that, the warm results of that we 
have noticed ever since Watergate.
    Well then, just one more: Have you had discussions with the 
next Administration then--this also comes out as a conversation 
that has taken place to this point. Have you then had 
discussions with representatives of the next Administration 
that would lead you to think that they could make a decision by 
January 21?
    Secretary Young. I have not had those discussions yet.
    Mr. Abercrombie. Are you in discussion with the next 
Administration?
    Secretary Young. Those discussions are starting right now.
    Mr. Abercrombie. Okay. Maybe we ought to get in touch with 
them, too, to let them know what we think, because I certainly 
hope the Obama Administration is going to understand that they 
don't operate as a unitary executive either. And I am not 
talking about the President-elect, but people who, you know, 
represent him at this stage, because I think Mr. Marshall has a 
very strong thumb on this issue in the sense of--and I think 
that you have made clear today that these are very critical 
decision-making dates, January 21 and March 1. Again, for good 
or ill, that is what section 134 says. And whether it was a 
good idea to write it that way or do it that way, that is what 
is there until it is modified or altered.
    So I guess my point is that if you are having discussions 
with them, I think an emphasis to them that there are serious 
implications in the January 21st date and the March 1st date 
that need to really go forward. Not that I don't think that you 
would, but I want it on the record that this hearing today has 
made it clear to me that this has serious, down-the-line fiscal 
and policy implications, for sure----
    Secretary Young. Yes, sir.
    Mr. Abercrombie [continuing]. Over and above what agreement 
or disagreement we might have at this point.
    Well, absent anyone else requesting time, then I think I 
will go to Mr. Gingrey; and I think that will be our concluding 
exchange today.
    Dr. Gingrey. Mr. Chairman, thank you. And I want to point 
out that this is my first round. Of course, Mr. Saxton was kind 
enough to yield to me earlier.
    Mr. Abercrombie. Yes, I should have said that. I am sorry.
    Dr. Gingrey. I don't want Secretary Young to think that I 
am trying to get him with a double whammy here.
    But of course I want to point out, Secretary Young, you and 
I both are graduates of the Georgia Institute of Technology. We 
are both co-op students. You went on, of course, to Stanford 
and got a master's degree in aeronautical and astronautical 
engineering. I went to the Medical College of Georgia and 
became a medical doctor. So we do have a lot in common.
    Mr. Abercrombie. He is about to operate on you, right now.
    Dr. Gingrey. And I certainly am sharpening the scalpel, as 
the chairman says.
    Let me say this, though. I know when I was at Georgia Tech 
I had very little opportunity to take any economic or business 
courses. Now, in the last couple of months up here we have had 
to, by fire, learn a lot about the economy, a lot of terms and 
that sort of thing. But I doubt if you had much time either to 
study a lot of economics.
    But let's just say your plan that you recommended--and you 
and you alone, you suggested that to Under Secretary England; 
you worked with him in the Navy, and you are obviously close 
friends and professional associates. And this plan of--instead 
of spending the $140 million, you said, we are going to spend--
we are going to spend $50 million; and it is going to save, has 
the potential of saving $90 million.
    Now, let's say you were presenting that to the taxpayer as, 
let's say, a derivative or a credit default swap or a 
collateralized debt obligation or a mortgage-backed security; 
and the taxpayer said, well, sir, with the green eyeshades, how 
much money am I going to make if I purchase this financial 
product? And you say, well, you are going to make $90 million. 
That's the upside potential; you are going to make $90 million.
    And John Q. Public says, well, what is the downside risk; 
how much could I lose? And you say, well, it could be, you 
could lose 200 million if this contract is not settled by mid-
January, late January or early February of 2009. Or if goes 
late into March, you know, it could be $400 million.
    I think John Q. Public, taxpayer, Joe Sixpack would say to 
you, thanks, but no thanks.
    And it seems to me--I mean, we have got bright people in 
this room, and they are in the industry; and I see some Air 
Force uniforms, and I know these people understand this issue. 
But I am trying to kind of simplify it, because we have got a 
lot of discussion here, back and forth. And to me, that is what 
it is all about, aside from the fact that, to me, you are 
flaunting the law, the language is clear, the language is 
clear; and you have heard that repeatedly.
    Now, you took this action, and I do have a question in 
here, Secretary, if you just bear with me.
    For several years the President's budget has not included 
any funds for the multiengine program, alternate engine for the 
Joint Strike Fighter, right? Am I correct on that, for several 
years?
    Well, you don't have to answer because I know I am correct.
    But Congress, each year, has voted to restore funding, and 
your office has obligated that restoration. In fact, in March 
2008, your testimony before this committee on the Joint Strike 
Fighter alternate engine, you stated, ``The Department will 
comply with section 213 of the John Warner National Defense 
Authorization Act of fiscal year 2008. We will ensure that in 
each fiscal year where funds are appropriated there is 
obligation and expenditure of sufficient amounts for continued 
development and procurement of two options for the Joint Strike 
Fighter Propulsion System, the engine. However, the Department 
continues to believe that the investment required to develop an 
alternate engine is more appropriately proposed for other 
Department priorities,'' end quote.
    That is you, Mr. Young. So although you disagreed with the 
approach of Congress back then, you did act in accordance with 
the law, didn't you, and the congressional intent?
    So here's the question, finally: So why, when it comes to 
section 134 of this year's Duncan Hunter National Defense 
Authorization Act, are you not following this same logic?
    Secretary Young. Can I offer a couple of comments?
    I think, in selling the derivative investment idea, we 
should at least also talk to the taxpayer about what the 
military requirement is. And when Secretary England had a 
meeting with me and the Air Force and everyone to try to make a 
decision here about how to proceed on F-22 advance procurement, 
he said, does the Air Force want to buy F-22s or not? Do you 
need them and do you need them in the context of all your other 
competing priorities?
    And the Air Force said, we can't answer that question. We 
are working to analyze that so we can offer an opinion to the 
next Administration. They could not offer that comment.
    Dr. Gingrey. Reclaiming my time, Secretary Young, that is 
not what the Air Force testified to this committee.
    Secretary Young. I am telling you what the Air Force 
leadership, about two weeks ago, said to Secretary England to 
help inform him on making a decision here.
    And then, with regard to the second question, I would just 
tell you that because I think we have constructed a package 
that has the potential--not acknowledging all of these industry 
estimates to not cost the taxpayer more money; and I am 
constantly looking at being careful with that--we are compliant 
in executing a 4 plus 16 strategy with section 134.
    No one is ignoring the law, sir.
    Dr. Gingrey. Mr. Chairman, I am going to make a concluding 
statement.
    I think that I made my point here. The actions of Secretary 
Young--in my opinion and many members of this subcommittee, as 
expressed here today--we think these actions are counter to the 
law. They are counter to the intent of Congress and to the Air 
Force's stated requirement in regard to F-22A Raptor.
    Secretary Young's approach will not, in fact, save the 
taxpayer one thin dime; and it could inadvertently--and I will 
give him the benefit of the doubt here--it could inadvertently 
preclude the procurement option for the next Administration. 
Driving this cost up might cause them not to purchase a Lot 10 
F-22 Raptor. And I worry that this approach was, well, it will 
contribute to killing the program. And I hope, for the sake of 
our national security, that Secretary Young will very strongly 
consider reversing courses and comply with section 134.
    And with that, Mr. Chairman, I yield back.
    Mr. Abercrombie. Thank you.
    Mr. Marshall requested an opportunity just to follow up a 
moment or two, and then we will conclude.
    Mr. Marshall. Thank you, Mr. Chairman. I apologize for 
taking a little bit more time on this.
    Then not to exceed estimates that you got from industry, I 
assume industry is going to be interested in talking with 
whoever is signaled and identified in any way in the new 
Administration about this particular issue and the decision-
making time frame within which the new Administration needs to 
act if it is going to taking advantage of these ``not to 
exceed'' estimates.
    From your perspectives in the transition here, how will 
that occur if you are not going to rely on industry to let 
folks know? Will Air Force just make sure it gets done? Is that 
basically what is going to happen, the blue suits here, the 
people who are going to be around whether they are civilian or 
not, are just going to make sure with the new Administration, 
good gosh, something needs to be done by January 21? Does this 
committee need to do anything? Do we need to send a letter to 
the President-elect, that sort of thing? Could you give us 
advice?
    Secretary Young. I would let Dave Van Buren speak to this, 
but for us, Secretary Gates has given us strict orders to have 
transition documents, and I personally have an extended memo 
that says--you know, because this is just one of many decisions 
that have to be made. And so I intend in the very near term to 
talk to them and communicate those issues, Secretary Gates' 
direction to us. The President's direction is to make this 
transition go smoothly. Some of them are major issues like war, 
but acquisition has its own set of issues as we have talked 
about today, and I will make absolutely certain in every 
discussion with the transition team that this, along with 
several other issues, must receive their attention immediately, 
or certainly within the first six months. And that is how I 
have structured my paper----
    Mr. Marshall. Well, the problem with the first six months 
is obvious, what we are talking about here timewise.
    Secretary Young. I am sorry. What I have laid out is 
decisions that need to be made in acquisition in the zero-to-
six-month period and therefore require an investment of their 
time now. That range includes things other than F-22, and I am 
sure the Air Force is doing the same. I will give Dave a chance 
to comment.
    Mr. Van Buren. We also have a long list of prioritized-
action items that we are to handle with the transition team, 
and this certainly is the most immediate of them.
    Mr. Marshall. Thank you, Mr. Chairman.
    Mr. Abercrombie. In response to that, I can assure you that 
as a result of today, we are going to make sure that transition 
team knows that they better check in here, too, and not because 
you won't make the best case that you can about all the things 
that you just mentioned, but that they need to make sure that 
they triangulate here between the transition team and the 
Pentagon and the other leg of that triangle, or the other end 
of that triangle is over here, so that we can avoid this kind 
of thing as much as possible in the future.
    By the way, I do want to say that I fully recognize that 
this long language was not necessarily language that you put 
forward. This was language that was developed in a conference 
committee between the Senate and the House after all, and it is 
not necessarily the language that I would have written had I 
had my way or if Mr. Skelton had had his way out of the 
conference. We did not. And perhaps that should serve as a 
lesson to us about making sure when we come out with a 
conference bill that we understand that there is going to be 
some difficulties with language, and perhaps discussion with 
the Pentagon in the future immediately upon the conclusion of 
the defense bill might be in order, too, so that we don't get a 
cross purposes two, three months or a year down the line as a 
result of negotiations that we have to go through. It may not 
be as explicitly clear to the Pentagon what we would like to 
have happen, or we end up with people of good will and good 
faith coming to different conclusions as to what was required.
    In any event, I want to thank you both for your service. 
This is the last hearing that the 110th Congress will have and 
that we will have in this subcommittee, and I want to reiterate 
to you, Mr. Young, my personal regards and gratitude to you for 
your service. No one, to my knowledge, in government, let alone 
in the Pentagon, devotes as much of his waking hours to trying 
to do things on behalf of the interests of the Nation, and in 
this instance, even more particularly, the national security 
interests, than you. And I want to acknowledge that publicly 
and extend to you my fond aloha for all that you have helped us 
with in the 110th Congress.
    Mr. Van Buren, that is not a slight to you. We just haven't 
had the same relationship over the past year.
    One last thing on that. I think the standard that you have 
set in terms of how to go about evaluating things even if we 
don't always agree to what that evaluation is, I think, is 
something that the next Administration could well emulate.
    Secretary Young. Mr. Chairman, thank you. It is extremely 
kind, and I appreciate that.
    Mr. Abercrombie. You are more than welcome.
    With that, then, I will take my father's gavel and bring 
this hearing to an end.
    [Whereupon, at 2:25 p.m., the subcommittee was adjourned.]


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                            A P P E N D I X

                           November 19, 2008

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              PREPARED STATEMENTS SUBMITTED FOR THE RECORD

                           November 19, 2008

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                   DOCUMENTS SUBMITTED FOR THE RECORD

                           November 19, 2008

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              WITNESS RESPONSES TO QUESTIONS ASKED DURING

                              THE HEARING

                           November 19, 2008

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

      
              RESPONSE TO QUESTION SUBMITTED BY MR. WILSON

    Secretary Young. If the next administration certifies by March 1, 
2009 that it is in the Nation's best interest to terminate F-22 
production, the Air Force estimates that, of the $50M authorized by 
USD(AT&L) to be obligated for Advance Procurement of four (4) F-22 
aircraft, $22M of titanium material and electronic components could be 
transferred to F-22 sustainment and/or made available to F-35 
production. [See page 14.]
                                 ______
                                 
              RESPONSE TO QUESTION SUBMITTED BY MR. BISHOP
    Secretary Young. The Whitney, Bradley, Brown (WBB) study was 
released. The Department provided the House Armed Services Committee a 
copy of the WBB study in January 2008. [See page 23.]
                                 ______
                                 
              RESPONSE TO QUESTION SUBMITTED BY MR. SESTAK
    Secretary Young. In Dec 2005, the Department restructured the F-22A 
program by replacing the last two lots (lot 7 of 29 aircraft and lot 8 
of 27 aircraft for a total of 56 aircraft) with a three-year 
incrementally funded multiyear procurement alternative. This 
alternative added $1.6B in FY07 to complete procurement of 60 aircraft 
(lots 7-9 of 20 aircraft per lot). Due to incremental funding 
requirements, the additional $1.6B in FY07 was required to fully fund 
the MYP.
    The additional $1.6B did more than just buy 4 additional aircraft. 
It repaired many areas affected by the Department's reduction from 279 
to 179 aircraft in 2004. It provided for the Economic Order Quantity 
procurement to support the multiyear and subassembly procurement of Lot 
7 aircraft, as well as production support, logistics support, and 
diminishing manufacturing sources. Additionally, funds kept the 5th 
generation F-22 production line open an additional year, mitigated 
risk, and preserved the option to add additional production lots in the 
future. The average unit flyaway cost (UFC) of the 60 aircraft in the 
multiyear contract is $142.6M. [See page 20.]




                  Lot                              UFC                         Total Production Cost7-9 (60 aircraft)                        $142.6M                                    $8.8B (Airframes & Engines)



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


              QUESTIONS SUBMITTED BY MEMBERS POST HEARING

                           November 19, 2008

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


                 QUESTIONS SUBMITTED BY MR. ABERCROMBIE

    Mr. Abercrombie. Secretary Young, you have made a point of the 
amount needed to bring the F-22A to a common configuration. The 
subcommittee would be interested to view this in context with other 
aircraft programs. Please provide the RDT&E funds for each of the 
following programs, B-1, F-I17, B-2, F-16 (all models and blocks), F-
22A, and F-18 (all models and blocks):

    1. Total RDT&E funds obligated through FY 08.

    2. Total RDT&E funds obligated from IOC through FY 08, and

    3. Total RDT&E funds programmed in the FY 09 FYDP.

    Please provide copies of all acquisition decision memorandums 
issued for the F-22A in 2008.
    [The information referred to is retained in the committee files and 
can be viewed upon request.]
    Secretary Young. As of November 30, 2008, the F/A-18 and EA-186 
Program has provided RDT&E funding for the following models, which are 
captured in the F/A-18 Improvement Line included below:

    F/A-18 Improvements (All Models & Blocks)
    1) Total RDT&E, Navy funds obligated through FY 08: $10,482.8M
    2) Total RDT&E, Navy funds obligated from IOC to FY 08: There is no 
IOC associated with the F/A-18 improvements, because this Program 
upgrades various systems, software, avionics, etc. associated with the 
F/A-18 program. These upgrades allow for the program to respond 
effectively with emerging future threats
    3) Total RDT&E, Navy funds programmed in FY 09 FYDP: $505.2M

    F/A-18 A/B/C/D
    1) Total RDT&E, Navy funds obligated through FY 08: $6,746.3M
    2) Total RDT&E, Navy funds obligated from IOC to FY 08: $429.3M (A/
B IOC in 1983, C/D IOC in 1987)
    3) Total RDT&E, Navy funds programmed in FY 09 FYDP: No RDT&E, Navy 
funds were programmed in FY 09 FYDP because A/B and C/D development 
have completed.

    F/A-18E/F *
    1) Total RDT&E, Navy funds obligated through FY 08: $6,804.1M
    2) Total RDT&E, Navy funds obligated from IOC to FY 08: $1.21M, IOC 
in September 2001.
    3) Total RDT&E, Navy funds programmed in FY 09 FYDP: No RDT&E, Navy 
funds were programmed in FY 09 FYDP because E/F development completed 
in FY 02.

* This data captures the F/A-18E aircraft development program only. 
This does not include component improvements such as: Active 
Electronically Scanned Array (AESA), Automatic Carrier Landing System 
(ACLS), Infrared Search and Track (IRST), Distributed Targeting (DTP/
MSU) or Sensor Integration which are captured in F/A-18 Improvements 
line, above.

    EA-18G
    1) Total RDT&E, Navy funds obligated through FY 08: $1,599.9M
    2) Total RDT&E, Navy funds obligated from IOC to FY 08: No RDT&E, 
Navy funds were programmed from IOC to FY 08 because IOC is not 
projected until September 2009.
    3) Total RDT&E, Navy funds programmed in FY 09 FYDP: $232.7M


B-1 IOC September 1986
    1)  RDT&E through FY 08:                                               $ 6,340.20M
    2)  RDT&E IOC thru FY 08:                                               $ 2,676.82M
    3)  RDT&E in FY 09 FYDP:                                                  $ 309.14MB-2 IOC April 1997
    1)  RDT&E through FY 08:                                                $17,645.20M
    2)  RDT&E IOC thru FY 08:                                               $ 2,900.70M
    3)  RDT&E in FY 09 FYDP:                                                  $ 962.85MF-16 IOC October 1980
    1)  RDT&E through FY 08:                                                $ 5,716.73M
    2)  RDT&E IOC thru FY 08:                                               $ 3,211.55M
    3)  RDT&E in FY 09 FYDP:                                                  $ 769.81MF-22 IOC December 2005
    1)  RDT&E through FY 08:                                                  $ 28,500M
    2)  RDT&E IOC thru FY 08:                                                  $ 1,500M
    3)  RDT&E in FY 09 FYDP:                                                   $ 2,365MF-117 IOC October 1983**
    1)  RDT&E 2000-2008:                                                        $ 89.3M
    2)  RDT&E in FY 09 FYDP:                                                        0 M
NOTE: For comparison across the programs, all funding has been 
converted to base year 2008.

** The majority of RDT&E for F-117 was conducted under classified 
appropriations, which is not reflective in these values.

    I provided you copies of all acquisition decision memorandums for 
the F-22A in 2008 in my January 15, 2009, letter to you.
    Mr. Abercrombie. The Air Force and the prime contractor estimated 
that the cost impact to the F-22 program of executing advance 
procurement in accordance with the guidance provided in your November 
10, acquisition decision memorandum, was as much as $500 million, if a 
decision is made to proceed with the additional 20 aircraft program by 
the new administration in March 2009, while you indicated that there 
was no additional costs. Please provide an explanation of why your 
estimates of the cost impact to the F-22 program varied so 
significantly from those provided by the Air Force and the prime 
contractor.
    Secretary Young. The Not-to-Exceed (NTE) cost estimates provided by 
the prime contractor detail price ceilings for the Advance Procurement 
funding required for the purchase of four aircraft, an option for 16 
aircraft, and a total lot of 20 aircraft. These NTE costs are the prime 
contractor's best estimate at this time. The contractor's NTE estimates 
indicate that the purchase now of AP for four aircraft and subsequent 
exercise of an option for 16 will cost no more than a purchase of the 
full twenty aircraft lot today. The NTE estimates are valid until March 
16, 2009, providing the new Administration adequate time to make its 
decision on future F-22A procurement.
    Mr. Abercrombie. Please provide a listing of the items, costs, and 
quantities for all items included in the $140M cost estimate provided 
to Congress to fund advance procurement for 20 F-22s from November 2008 
to March 15, 2009.
    Mr. Van Buren. No specific itemized listing of parts was used for 
the $140M AP funds required for F-22 AP through March 15, 2009. The 
cost was determined based on historical procurement data from Lots 1-9. 
Based on these actuals, the Air Force estimated that $523M would be 
required to fully fund AP for Lot 10 of 20 aircraft. The Air Force then 
generated a combined cost and termination liability curve and estimated 
that $140M of that $523M total was required to continue AP through 
March 2009.
    Mr. Abercrombie. Please provide a listing of items, costs, and 
quantities for all items included in the November 26, 2008 contract 
with Lockheed for advance procurement for the F-22A.
    Mr. Van Buren. The entire list of long-lead AP items and their 
associated quantities, lead-times, and unit costs for two scenarios: 1) 
four aircraft only: and 2) an option to procure 16 additional aircraft, 
are detailed in the Pratt & Whitney (18 November 2008) and Lockheed 
Martin (20 November 2008) Advance Procurement-Funding/Termination 
Liability Requirements submissions (commonly referred to as the ``Not-
to-Exceed'' or NTE proposals) to the government. These NTEs identify 
all long-lead items to be procured through September 2009 based on full 
AP funding. The contractors are currently working with their suppliers 
to determine a prioritized list of long-lead items to be procured based 
on partial AP funding through 15 March 2009. The advance procurements 
are shown in the attachments for Lockheed Martin, Pratt & Whitney 
engines and Boeing through 31 Mar 09.
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                                 ______
                                 
                   QUESTIONS SUBMITTED BY MR. SAXTON
    Mr. Saxton. Secretary Young's oral testimony included the following 
statement: ``Can I offer a couple of comments? I think, in selling the 
derivative investment idea, we should at least also talk to the 
taxpayer about what the military requirement is. And when Sec England 
had a meeting with me and the AF and everyone to try to make a decision 
here about how to proceed on F-22 advance procurement, he said, does 
the AF want to buy F-22s or not? Do you need them and do you need them 
in the context of your other competing priorities? And the AF said, we 
can't answer that question. We are working to analyze that so we can 
offer an opinion to the next administration. They could not offer that 
comment.'' Mr. Van Buren, does the Air Force have a requirement for 
more than 183 F-22s to meet the National Military Strategy? If so, how 
many F-22s do you need?
    Mr. Van Buren. Congressman Saxton, the Air Force leadership is 
reviewing whether to propose a change to the current F-22 program of 
record. No decisions have been made and the Air Force leadership will 
be prepared to discuss this with incoming officials at the appropriate 
time.
                                 ______
                                 
                   QUESTIONS SUBMITTED BY MR. MILLER
    Mr. Miller. Mr. Young, in the spirit of protecting taxpayer 
dollars, it is my understanding that providing an additional $140M in 
funding for procurement of long lead F-22 items would serve ``multiple 
purposes'' and prevent line disruption, schedule delays, and 
significant cost increases. This $140M expenditure would go to multiple 
purpose items that would be:

      applied to the 20 new F-22 aircraft

      used as F-22 spare parts if the program is cancelled

      used as parts to meet F-35 requirements

    Mr. Young, have you factored in funding ``multiple purpose'' long 
lead items now that can be used as future F-22 spare parts or for F-35 
requirements if the 20 new F-22 aircraft program is canceled? Such an 
expenditure now would allow access to the open production lines and 
prevent disruption. delays and cost increases.
    Secretary Young. The Department has authorized the obligation of up 
to $50 million for Advance Procurement in the context of a plan to buy 
four F-22A aircraft as directed in a November 10 Acquisition Decision 
Memorandum (ADM) to the Air Force. In an effort to maximize all options 
for the next Administration, the ADM also allows the Air Force to 
include a priced option for additional Advance Procurement for 16 
aircraft. Furthermore, in an amendment to the aforementioned ADM, the 
Department has authorized the F-22 program, as part of Lot 10 Advance 
Procurement, to purchase long-lead titanium for 20 F-22 aircraft. These 
materials would be made available to the Joint Strike Fighter Program 
or other DoD programs requiring these materials, should the next 
Administration decide to terminate the F-22A production line.
    The Department has factored in using the Advanced Procurement 
funding for multiple purposes. However, a large portion of Advanced 
Procurement costs are related to contracting and procurement 
activities, not material acquisition. If the decision is made to 
terminate production, these sunk costs would be wasted and unavailable 
for use for any other purpose. The Department believes that committing 
any more Advanced Procurement funding would be an inappropriate use of 
taxpayer dollars until a final decision is made. Actions beyond the 
approved ADM efforts will quickly make these materials F-22 unique and 
preclude use in the F-35 program. There is no requirement for 
additional F-22 spare parts, especially if the new administration 
decides not to purchase additional aircraft. DoD has been criticized 
for buying excess spare parts.
    The Defense Department has taken actions consistent with 
congressional direction, limiting the obligation of tax dollars to 
avoid excessive sunk costs while funding the activities and materials 
that are essential to preserving F-22 pricing and production 
continuity. This is a prudent approach that preserves F-22A options 
with a conscious effort to minimize risk to the taxpayer.
    Mr. Miller. Will you release additional funds now for long lead 
items that could be applied to F22 spare parts or F-35 requirements?
    Secretary Young. I have approved the Air Force to use up to $50M 
for Advanced Procurement for four F-22A aircraft. Additionally, the Air 
Force is authorized to use a portion of the $50M for the purchase of 
long-lead titanium products for 20 F-22A aircraft. If the new 
Administration certifies that continued F-22A production is in the 
national interest, the remainder of the AP funds appropriated in FY 
2009 will be used for the additional 16 aircraft. If the new 
Administration certifies that is in the national interest to terminate 
F-22A production, the titanium materials and products purchased will be 
made available as F-22A spare parts or for F-35 requirements. No 
further funding will be authorized until the new Administration 
certifies under the timeline directed in section 134 of the FY 2009 
National Defense Authorization Act.

                                  
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