[Senate Hearing 110-]
[From the U.S. Government Publishing Office]



 
       DEPARTMENT OF DEFENSE APPROPRIATIONS FOR FISCAL YEAR 2008

                              ----------                              


                       WEDNESDAY, MARCH 28, 2007

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 10:28 a.m., in room SD-192, Dirksen 
Senate Office Building, Hon. Daniel K. Inouye (chairman) 
presiding.
    Present: Senators Inouye, Stevens, and Cochran.

                         DEPARTMENT OF DEFENSE

                         DEPARTMENT OF THE NAVY

                        Office of the Secretary

STATEMENT OF HON. DONALD C. WINTER, SECRETARY OF THE 
            NAVY

                 STATEMENT OF SENATOR DANIEL K. INOUYE

    Senator Inouye. This morning the subcommittee meets to 
receive testimony on the fiscal year 2008 budget request for 
the Navy and Marine Corps. And, on behalf of the subcommittee, 
I welcome today's witnesses, the Secretary of the Navy, the 
Honorable Donald Winter, the Chief of Naval Operations, Admiral 
Michael Mullen, and the Commandant of the Marine Corps, General 
James Conway.
    The 2008 budget request for the Navy and Marine Corps 
includes $139.8 billion in baseline funds, which is an increase 
of 10 percent over this year's budget, and an additional $19.7 
billion in emergency funding for the costs of the wars in Iraq 
and Afghanistan.
    Despite this proposed increase in the baseline budget, the 
Navy and Marine Corps each face key challenges in fighting the 
war on terrorism and preparing for the threats that are 
expected to face our country in the future.
    The Navy's well underway on a number of programs to 
modernize its fleets of ships and aircraft, while programs such 
as the Joint Strike Fighter (JSF) and the littoral combat ship 
have key roles in preparing the Navy for new and emerging 
threats. Critics have raised many questions about whether this 
complex program is proceeding on track. I'm certain our 
witnesses today will be able to inform the subcommittee about 
the status of the efforts on each of these programs.
    In the case of the Marine Corps, the President has proposed 
an increased end strength in the Marine Corps by 27,000 over 
the next 5 years in order to relieve some of the strain caused 
by deployments to Iraq and Afghanistan. The subcommittee's 
interested to hear what is needed to recruit and to train these 
additional marines. Equally as important, we must know what 
other steps are being taken to reduce the strain of sailors and 
marines, many of whom--having served multiple tours on the 
front lines in the global war on terrorism (GWOT)--so that we 
can retain the experienced force that is needed.
    While the subcommittee today will examine the difficult 
issues before the Navy and the Marine Corps, we cannot overlook 
the extraordinary work performed by sailors and marines who 
have volunteered to serve our country. I know I speak for every 
member of this subcommittee when I say that we are committed to 
looking out for them in every way possible.
    And, once again, I thank the witnesses for their testimony 
this morning. And, their full statements will be included in 
the record.
    And, now if I may, I'd like to turn to the co-chairman of 
the subcommittee for any opening remarks he may wish to make.

                    STATEMENT OF SENATOR TED STEVENS

    Senator Stevens. Thank you very much, Mr. Chairman, 
Secretary Winter, Admiral Mullen, and Commandant Conway. I 
welcome you back and enjoy the opportunity to visit with you 
concerning this hearing.
    The demand for funding far surpasses the amounts that we 
have available, so this is going to be a very important 
hearing. I do hope we can meet the pressing needs of the Navy 
and the Marine Corps. It's going to be difficult, but we do 
appreciate your coming, once again, thank you very much.

               PREPARED STATEMENT OF SENATOR THAD COCHRAN

    Senate Cochran has submitted a statement that he would like 
placed in the record.
    [The statement follows:]
               Prepared Statement of Senator Thad Cochran
    Mr. Chairman, I am pleased to join you in welcoming Secretary 
Winter, Admiral Mullen, and General Conway to our subcommittee.
    This has been a challenging year for our military forces. We 
appreciate the role the Navy and Marine Corps play in protecting the 
United States in the global war on terrorism. The all-volunteer active 
and reserve forces and their families have performed with a high degree 
of professional distinction, and our Nation is thankful for their 
service.
    We are aware of the importance of the need for appropriate levels 
of funding to ensure that the men and women in uniform have the 
equipment and training they need to succeed and to return home safely. 
Monday, we began floor consideration of the bill making emergency 
supplemental appropriations for the fiscal year ending September 30, 
2007, and for other purposes. During your testimony, I would like you 
to provide this subcommittee with an indication of what you judge to be 
the latest date those emergency appropriations must be available to the 
Navy and Marine Corps.

                 SUMMARY STATEMENT OF DONALD C. WINTER

    Senator Inouye. Mr. Secretary.
    Mr. Winter. Chairman Inouye, Senator Stevens, thank you for 
the opportunity to appear before this subcommittee. Today I am 
joined by Admiral Mullen and General Conway, two outstanding 
leaders whose dedication to the Navy and Marine Corps is 
apparent to all who have had the pleasure of working with them. 
Each of us has prepared a statement for the record, and we 
appreciate the inclusion of that statement in the record of 
this hearing.
    These documents outline, in detail, this Department's 
priorities, the strategic thinking behind them, and the funding 
requests that are necessary to support them. Our priorities 
presented in the fiscal year 2008 budget and the global war on 
terror requests, encompass both long-term and short-term 
requirements.
    The short-term imperatives include supporting marines and 
sailors in the field, funding the urgent requirements, such as 
the Mine Resistant Ambush Protected Vehicle Program, and making 
up for the losses of vehicles, equipment, and aircraft that 
have been incurred in combat operations. At the same time, we 
must provide for the critical needs of the Navy and Marine 
Corps of the future. To that end, the Department of the Navy is 
pursuing an unprecedented modernization program across the full 
spectrum of our weapons platforms in both the Navy and the 
Marine Corps. This drive to transform the force is necessary 
and vital to our national security.
    The current transformation entails a shift from blue water-
centered fleet to one with greater brown and green water 
capabilities. This shift in focus reflects a greater demand for 
expeditionary capability, a capability that will allow us to 
operate in the littorals. The broad transformation now underway 
includes a new generation of ships, submarines, and aircraft 
with programs in development, production, or already in 
operation with the fleet.
    Some of the Department's new programs have encountered 
significant challenges. The Navy's Littoral Combat Ship Program 
and the Marine Corps' Expeditionary Fighting Vehicle Program 
are both innovative weapon platforms incorporating new 
technologies. We are working on solving the problems that have 
arisen so that we can deliver vitally needed capabilities to 
our warfighters. Both of these programs represent the kind of 
capabilities that the future Navy and Marine Corps will need to 
fight and win the wars of tomorrow. Faced with a dangerous, 
uncertain world with terrorist enemies, states that actively 
support or condone them, and rising powers with intentions and 
capabilities that lack transparency, we have no choice, but to 
improve our own capabilities.
    Mr. Chairman, the Department of the Navy's fiscal year 2008 
budget request is critical to both the short-term and long-term 
national security of the United States.

                           PREPARED STATEMENT

    Thank you for your continued support for our efforts to 
meet our constitutional obligations to provide for the common 
defense of the American people. I look forward to answering 
your questions. Thank you very much.
    Senator Inouye. Thank you very much, Mr. Secretary.
    [The statement follows:]
              Prepared Statement of Hon. Donald C. Winter
                              introduction
    Mr. Chairman, Mr. Ranking Member, and members of the committee, it 
is an honor to appear before you representing the brave men and women 
of the United States Navy and the United States Marine Corps--active, 
reserve, and civilian over 800,000 strong.
    Over the past year, I have had many opportunities to meet with 
sailors and marines who are stationed both within the continental 
United States and abroad. I have traveled three times to the Central 
Command Area of Responsibility including Iraq. During my visits I have 
had countless conversations with our young sailors and marines. I am 
continually amazed at how dedicated and committed they are to carrying 
out their duties--without question, without complaint. Our sailors and 
marines recognize the significance of their mission. They remain 
determined to win the current war and are committed to defending our 
Nation against future threats. They are the very best and they deserve 
the very best from their leadership in the Pentagon and on Capitol 
Hill.
    Today, I am here to present the Department of the Navy's plan to 
support our sailors and marines in their mission to fight the global 
war on terror and to defend our Nation against future challenges. I 
believe the President's Fiscal Year 2008 Budget request for the Navy 
and Marine Corps provides them what they need and I ask that you 
support this request--submitted to Congress on February 5, 2007.
    The Department of the Navy's budget signifies a vital investment in 
our Navy and Marine Corps. In its totality, this budget represents $160 
billion in requested funding for fiscal year 2008, including the 
estimated costs of the global war on terror.\1\
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    \1\ ``Highlights of the Department of the Navy's Fiscal Year 2008 
Budget'', p. 1-15.
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    These funds are essential in enabling the Department of the Navy to 
maintain current readiness, sustain the operational tempo in the global 
war on terror, support the quality of life of our sailors, marines and 
their families, while preparing for a future of uncertainty. Our 
priorities for fiscal year 2008 are simply stated: We will fight the 
global war on terror by investing in the present needs of our Navy and 
Marine Corps, while we prepare for future challenges by investing in 
our people, facilities, and capabilities.
    The development of this budget has not been easy--tough decisions 
have been made and continue to be made throughout the Department to 
balance risk and to be responsible stewards of the tax dollars 
entrusted to us. Yet, we believe that this budget is appropriately 
structured and is a necessary investment to successfully meet both our 
present and future challenges.
    The difficulty of preparing for future challenges has been striking 
the proper balance between building capabilities to support traditional 
and irregular warfare demands while transforming a blue water Navy into 
one that can operate, fight and win in blue, green, and brown waters, 
and expanding the lethality and reach of the Marine Corps.
    Justification of every program is important for Congress to 
understand the Department's intent and rationale, and we will do so. 
For the sake of brevity in this statement I will not go into detail on 
each program. Instead, I will call attention to areas crucial to our 
budget submission and I ask that the ``Highlights of the Department of 
the Navy's Fiscal Year 2008 Budget'' book be submitted for the record 
as part of my statement.
                        investing in the present
Fighting the Global War on Terror
    As we come before you today, I do not have to remind you that we 
are a Nation in our sixth-year of a long, irregular, and global war. 
Your naval forces--sailors, marines and civilians--are engaged at home 
and around the world today in a full spectrum of operations in support 
of this war. They have answered the call to defend the Nation and they 
are carrying out their duties superbly. Yet while focusing on the 
present needs of the global war on terror, we must also keep a keen eye 
on an ever evolving strategic environment around the globe. The pace of 
change in today's world is very rapid. We have witnessed events--such 
as North Korea's nuclear test last October and China's test of an anti-
satellite weapon this past January--that can change our strategic 
calculations overnight. Even as these changes occur, our sailors and 
marines continue to stand guard across the world.
    As I speak to you today, there are over 50,000 sailors and marines 
serving in the Central Command Area of Responsibility (AOR). Of those, 
over 21,000 marines and 12,000 sailors are serving on the ground in 
Iraq and Afghanistan. It also includes over 8,000 sailors deployed as 
Individual Augmentees (IA) and 4,500 performing ``in-lieu-of'' missions 
often serving in non-traditional capacities but adding to the 
warfighting capability of our military forces with their expertise. 
Additionally, over 700 sailors and marines are in the Horn of Africa. 
Finally, on any given day, approximately 30 percent of our ships and 
submarines and over 45,000 of our sailors are deployed worldwide 
serving in, on, or over the world's oceans.
    We are also key players in executing the President's new strategy 
in Iraq. The strategy requires increased coalition military and 
civilian resources to include an additional two battalions of marines 
to strengthen control of the Al Anbar Province. Approximately 4,000 
additional sailors and marines will be part of this effort.
    This ongoing pace of operations in fighting the global war on 
terror has had a financial impact on the Department of the Navy. 
Approximately 40-50 percent of the fleet continues to be at sea. This, 
coupled with the increased deployment of marines across the globe, has 
placed a strain on our resources. The 2008 GWOT request represents a 
critical investment in providing the adequate resources necessary to 
prosecute and win the global war on terror. The Department of the Navy 
is seeking approximately $20 billion to directly support prosecution of 
the global war on terror and to reset the force.
                  safeguarding our forces in harms way
    Before we deploy our brave men and women in harm's way we must do 
everything in our power to invest in their protection. Therefore, we 
are investing in measures to counter and protect our men and women from 
Improvised Explosive Devices (IED) with such platforms as the Mine 
Resistant Ambush Protected (MRAP) Vehicle. We are transitioning to a 
newly designed Modular Tactical Vest (MTV) and are committed to 
providing the best head protection to our warfighters. We are also 
investing in measures I am personally involved with seeking improved 
acquisition processes which will accelerate fielding of these new 
technologies.
    Unavoidably, with war comes the tragedy of loss of life and injury 
to our young men and women. We are committed to providing the best 
medical care on and off the battlefield. The treatment of patients has 
been greatly enhanced by improvements in medical capabilities at the 
personal, unit and organizational levels--yet we must never be 
satisfied with where we are. We will continue to seek advancements in 
medical care. Care for our wounded does not end at the field hospital. 
We continue to aggressively monitor post-deployment mental health 
screenings as well as, suicides, domestic violence, and divorce rates 
and to assure the quality long-term physical and psychological welfare 
of our sailors and marines.
                          resetting the force
    While we endeavor to provide what is needed, we also recognize that 
war is a costly business, and this one is no different. Our sailors and 
marines will always do what it takes, but there is a significant 
price--not only in their personal sacrifices--but also in the financial 
cost of operations and on the equipment that we provide them. We must 
continue to invest in the present needs of our warfighters.
    The ongoing intense combat operations and high operational tempo 
have had a significant impact on the quality, operability, and service 
life of Navy and Marine Corps equipment--it is imperative that we 
support our brave men and women by replacing our rapidly aging 
equipment. In many cases it makes no sense to replace aging legacy 
equipment with more of the same. In the case where it makes smart 
financial or operational sense, we are purchasing next generation 
equipment and platforms to replace combat losses. Resetting the Navy 
and Marine Corps is essential, and we are investing significant 
resources to restore our combat capability and readiness. The fiscal 
year 2008 GWOT request includes $3.8 billion--$2.1 billion for the 
Navy, $1.7 billion for the Marine Corps--toward reset requirements. 
These funds will refurbish or replace equipment damaged or lost during 
combat operations and restore the capability and readiness of the Navy 
and Marine Corps for future threats and operations. It should be noted 
that the reset requirement is dynamic and changes as conditions 
change.\2\
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    \2\ ``Highlights of the Department of the Navy's Fiscal Year 2008 
Budget'', p. 2-10.
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                        investing in the future
    As we fight the global war on terrorism, we cannot forget that the 
security challenges of the 21st century are complex and varied. They 
range from the irregular, asymmetric threats of terrorists, and rogue 
states, to the sophisticated military technology of future peer 
competitors. The Department has also been called upon to conduct 
disaster relief and humanitarian assistance missions--often being the 
first to respond to natural disasters around the world as in the case 
of the 2005 Indian Ocean tsunami, the earthquake in Pakistan and 
Hurricane Katrina in the Gulf Coast. Naval forces are uniquely balanced 
to address these diverse strategic challenges with the capability and 
capacity to rapidly project power anywhere in the world. We must 
continue to invest in this capability. We cannot allow ourselves to be 
fixated on one threat alone.
    Preparing for an uncertain future demands that the seas of the 
world remain safe for all nations. The Department of the Navy strongly 
supports U.S. accession to the Law of the Sea Convention. Joining the 
Convention, with the declarations and understandings reflected in 
Executive Report 108-10 (Senate Foreign Relations Committee), will 
enable the United States to exercise a leadership role in the future 
development of oceans law and policy. As a non-party, the United States 
does not have access to the Convention's formal processes in which over 
150 nations participate in influencing future law of the sea 
developments, and is therefore less able to promote and protect our 
security and commercial interests. Additionally, by providing legal 
certainty and stability for the world's largest maneuver space, the 
Convention furthers a core goal of our National Security Strategy to 
promote the rule of law around the world.
    This is also a time of unprecedented change in the Department of 
the Navy. We are executing a major transformation of the force at the 
same time that we are executing an array of operations in the global 
war on terror. This transformation is about people as much as it is 
about equipment.
Investing in our People
    The development and retention of quality people are vital to our 
continued success. America's naval forces are combat-ready due to the 
dedication and motivation of individual sailors, marines, civilians, 
and their families. The Department is committed to taking care of them 
by sustaining our quality of service/quality of life programs, 
including training, compensation, and promotion opportunities, health 
care, housing, and reasonable operational and personnel tempo. The cost 
of manpower is the single greatest factor in the fiscal year 2008 
budget, but it is money well spent. We must continue to recruit, 
retain, and provide for our sailors and marines.
            Recruiting and Retention
    We continue to invest in programs to recruit the right people, 
retain the right people, and achieve targeted attrition. The fiscal 
year 2008 budget requests a 3-percent raise in military base pay. This 
investment along with increased enlistment and re-enlistment bonuses, 
is necessary if we are to continue to man our forces with the highest 
levels of ability and character. These citizens are in high demand 
everywhere; since we ask so much of them, we owe them proper 
compensation. The Navy and Marine Corps are currently meeting 
recruiting and retention goals for most ratings and designators in the 
active and reserve components. In fiscal year 2006, Navy achieved 100 
percent of its overall active component enlisted recruiting goal and 
the Marine Corps also achieved over 100 percent of its accession goal.
            Navy and Marine Corps End-Strength
    To avoid an adverse toll on our sailors, marines, and their 
families, and to prevent a decrease in readiness, the Secretary of 
Defense established a 1:2 deployment-to-dwell ratio goal for all active 
component forces. Our goal for the Marine Corps is to achieve that 1:2 
deployment-to-dwell ratio for active component units and 1:5 for 
reserve units. Currently, the deployment length for marine units in 
Iraq is 7 months.
    While our recruiting remains at impressive levels, it is important 
to focus on sizing the Department to achieve its overall objectives. As 
we develop and build more efficient and automated ships, aircraft, and 
combat systems, personnel reductions are inevitable; yet the skill 
level and specialization requirements increase. The Navy has reduced 
its end strength by approximately 40,000 over the last 5 years, and as 
we look ahead to more capable ships entering service in the next few 
years, we anticipate a stabilization of that trend at an end-strength 
of about 320,000-325,000.
    For the Marine Corps the proposed increase to our active component 
end strength to 202,000 marines, by 2011, is an investment in reducing 
the strain on the individual marines and the institution of the Marine 
Corps while ensuring the Marine Corps can provide trained forces in 
support of other contingencies. Our first task will be to build three 
new infantry battalions and their supporting structure--approximately 
4,000 marines. We will then systematically build the additional units 
and individuals on a schedule of approximately 5,000 marines per year.
            National Security Personnel System
    It is important to note that while a considerable investment is 
taking place in the uniformed workforce, we are also placing emphasis 
on creating a proficient civilian workforce, whose pay and promotions 
are performance-based. Deployment of the National Security Personnel 
System began in fiscal year 2006 and continued through fiscal year 
2007. A significant portion, over 50,000 employees, are scheduled to 
transition at the start of fiscal year 2008.
            Safety
    Fundamental to taking care of our sailors, marines and DON civilian 
employees is establishing a culture and environment where safety is an 
intrinsic and critical component of all decisionmaking, both on and 
off-duty. Safety directly affects the readiness of our fighting forces 
and significant mishap reductions remains a key department-wide 
objective in fiscal year 2008. We are refining our concept of 
Operational Risk Management (ORM), which calls for assessing risks 
prior to an evolution and then implementing mitigating actions during 
the evolution, to ensure it is more widely accepted and employed by our 
younger sailors and marines when making decisions off duty. We have 
placed great emphasis on reducing Private Motor Vehicle (PMV) mishap 
rates through new policy changes we believe will help reduce needless 
PMV-related injuries and fatalities. Other safety initiatives are aimed 
at the reduction of aviation mishaps and improving safety in the 
workplace.
Investing in Our Facilities
    Essential to recruiting and retaining the right people is 
maintaining their quality of life and service. The Department of the 
Navy continues to invest in our sailors and marines by sustaining our 
quality of life/quality of service programs and by ensuring quality 
housing and facilities in which to live, work and train. We are 
developing global infrastructure plans to analyze bottom line facility 
requirements. The Department of the Navy has been aggressively 
eliminating excess facilities and is on track to its footprint of 23.9 
million square feet by 2013.
            Military Construction
    The fiscal year 2008 budget invests over $2.1 billion toward 64 
military construction projects for our active Navy and Marine Corps and 
10 projects for our reserve forces.
            Base Realignment and Closure
    The fiscal year 2008 budget continues to fund BRAC initiatives. We 
are requesting $733.7 million in the fiscal year 2008 budget submission 
to continue implementation of the 2005 BRAC Commission recommendations. 
The fiscal year 2008 request invests in construction (including 
planning and design), operational movements at key closure and 
realignment locations, and the necessary environmental studies at 
receiving locations to fulfill National Environmental Policy Act 
requirements.
            Carrier Homeporting
    Consistent with the 2006 Quadrennial Defense Review, the Navy plans 
to adjust its force posture to base at least six ``operationally 
available'' carriers in the Pacific while maintaining the flexibility 
to respond to threats around the world.\3\ The Navy will achieve the 
six Pacific carrier posture in fiscal year 2010 when the U.S.S. Carl 
Vinson (CVN 70) is homeported to the Pacific.
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    \3\ ``2006, Quadrennial Defense Review'', p. 47.
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            Realignment of our Forces in the Western Pacific
    As part of the Defense Policy Review Initiative (DPRI), a change in 
the United States-Japan alliance to the security environment, the 
United States and the Government of Japan (GOJ) signed an agreement for 
the relocation of some marines from Okinawa to Guam. This realignment 
requires a commitment to investment in our Western Pacific area of 
operations. The fiscal year 2008 budget invests $28 million for 
planning and continuation of the environmental impact analysis.
Investment in Capabilities
    To meet the demands of the global war on terror and the uncertain 
threats of the future, the Department of the Navy must also invest in 
new generation capabilities and to transform the force. We must 
continue an acquisition program which seeks to build a fleet that is 
both affordable and meets the national security challenges of the 21st 
century. It must cover all facets of the surface, sub-surface, and 
aviation requirements. We must also invest in our expeditionary forces 
providing them with the capabilities to remain always ready and always 
capable of forcible entry. Our fiscal year 2008 baseline budget invests 
almost $46 billion for procurement programs.
    As we invest in our naval force it is critical that we pursue a 
program of stable transformation. The core products that the Navy and 
Marine Corps buy face a significant time constraint--we go into battle 
with assets that are built many years in advance; and a stable 
transformation can only be achieved if the Department of the Navy, in 
conjunction with Congress, follow a long-term path of program 
stability.
            Building a Fleet for the Future
    We have initiated an aggressive investment strategy to build an 
affordable 313-ship fleet tailored to support the National Defense 
Strategy and the 2006 Quadrennial Defense Review. The Department plans 
to procure seven ships \4\ in fiscal year 2008 for the United States 
Navy, and we are serving as the executive agent for one Joint High-
Speed Vessel for the United States Army--an investment of over $14.2 
billion toward ship building and conversion.\5\ As required by 
Congress, the Department of the Navy recently submitted its 30-year 
shipbuilding plan which reinforces the 313-ship fleet introduced last 
year.\6\ The fiscal year 2008 30-year shipbuilding plan, unchanged from 
the fiscal year 2007 plan, represents the Departments commitment to 
creating programs of stability and predictability which in turn 
minimizes disruption in shipbuilding and creates efficiency and 
effectiveness in our industrial base.
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    \4\ ``Highlights of the Department of the Navy's Fiscal Year 2008 
Budget'', p. 3-5.
    \5\ ``Highlights of the Department of the Navy's Fiscal Year 2008 
Budget'', p. 1-15.
    \6\ DON 30-year Shipbuilding Plan, submitted to Congress on 
February 5, 2007.
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    The fiscal year 2008 budget continues investment in the shift to 
next generation warships. The surface ships and submarines which make 
up the fleet of the future will be more capable than ever to respond to 
enhanced threats across the globe. Several critical shipbuilding 
programs in support of the 30-year shipbuilding plan include:
  --The lead ship of the CVN 21 Program--Gerald R. Ford (CVN78) with 
        expected delivery in 2015--will replace U.S.S. Enterprise 
        (CVN65). Program funding is requested over 2 years with 40 
        percent, approximately $2.7 billion, in fiscal year 2008 and 
        the remaining 60 percent in fiscal year 2009.
  --The DDG1000 program, formerly known as the DDX, is the next 
        generation of multi-mission surface combatants. Under the dual 
        lead ship strategy, a lead ship will be constructed at both 
        Northrop Grumman Ship Systems and General Dynamics Bath Iron 
        Works. Contracts for detail design were awarded to the 
        shipbuilders in August 2006. Construction contracts of the dual 
        lead ships are expected to be awarded in fiscal year 2007. The 
        fiscal year 2008 budget provides the second increment of 
        funding, approximately $2.8 billion, required to complete the 2 
        fiscal year 2007 lead ships.
  --The Littoral Combat Ship (LCS) will be a fast, agile and networked 
        surface combatant with capabilities optimized to assure naval 
        and joint force access into contested littoral regions. The 
        Navy has awarded contracts for construction of the first four 
        LCS sea frames. LCS 1 was launched in September 2006. The Navy 
        intends to continue with a plan to procure a reduced number of 
        ships in fiscal 2008 and 2009 within existing budget resources. 
        LCS is needed now to fill critical, urgent warfighting 
        requirements gaps that exist today. Operational experience and 
        analyses indicate that potential adversaries will employ 
        asymmetric capabilities to deny United States and allied forces 
        access in critical coastal regions to include strategic choke 
        points and vital economic sea lanes.
  --In the past year the second and third Virginia Class fast attack 
        submarines joined the fleet. Construction of the Virginia Class 
        continues to be performed under a teaming arrangement between 
        General Dynamics Electric Boat Corporation and Northrop Grumman 
        Newport News Shipbuilding. Six Virginia Class submarines are 
        under construction. The fiscal year 2008 budget invests 
        approximately $1.8 billion in the tenth Virginia Class 
        submarine and is the fifth of five Virginia class submarines 
        covered under a multiyear procurement contract.
    A number of congressional authorities are necessary in order to 
maintain the stability of the 30-year shipbuilding plan. Key to 
achieving cost reductions in our Virginia Class program is the ability 
to enter into multiyear ship contracts. We are asking Congress to 
continue multiyear procurement authority for Virginia Class Submarines. 
As we modernize our carrier force to the new Gerald R. Ford Class 
(CVN78), we will drop below our carrier requirement by one ship during 
a 2 year period. Through adjustments to refueling availabilities and by 
carefully managing our Nimitz Class service life, we will be able to 
mitigate the impact of this drop in the short term and long term. We 
are asking Congress to authorize a temporary waiver of the carrier 
requirement from 11 to 10 ships.
            Enhancing Expeditionary Warfare Capabilities
    The 2006 Quadrennial Defense Review describes the reorientation of 
joint ground forces from dependence on large, permanent overseas 
garrisons toward expeditionary operations. This includes a focus on 
greater capability to conduct irregular warfare. Naval forces are 
inherently prepared for this role through our ability to project power 
ashore. Amphibious warships and MAGTF capability are essential to the 
Navy-Marine Corps ability to conduct forcible entry. The Department of 
the Navy will invest in several key procurement programs to enhance our 
expeditionary warfare capability.
  --The San Antonio (LPD 17) Class of amphibious warfare ships 
        represents the Department of the Navy's commitment to a modern 
        expeditionary power projection fleet. The rapid off-load 
        capability of the San Antonio Class will enable our naval force 
        to operate across the spectrum of warfare. The fiscal year 2008 
        budget invests $1.4 billion to fully fund the construction of 
        the ninth ship in the San Antonio Class.
  --The Marine Expeditionary Fighting Vehicle (EFV) is the Marine 
        Corps' largest ground combat system acquisition program. It 
        will replace the aging assault amphibious vehicle that has been 
        in service since 1972. The fiscal year 2008 budget invests $288 
        million from the Research, Development, Test and Evaluation 
        account toward EFV development to ensure that EFV meets all 
        requirements for performance and reliability before entering 
        into production.
  --The Mine Resistant Ambush Protected (MRAP) Vehicle is playing an 
        increased role in protecting our sailors and marines in harm's 
        way. MRAPs are employed to protect against the three primary 
        kill mechanisms of mines and improvised explosive devices--
        fragmentation, blast overpressure, and acceleration. These 
        vehicles provide the best available protection against 
        improvised explosive devices. The fiscal year 2008 GWOT request 
        procures over 255 MRAP vehicles for the Navy and Marine Corps 
        team. We continue to assess this need as is necessary.
            Recapitalizing Aviation Capacity
    The Department of the Navy requires a robust aviation capacity 
including attack, utility, and lift capabilities. The Department is in 
the midst of an extensive, long-term consolidation and recapitalization 
of all aircraft in the naval inventory in order to develop the optimum 
balance between requirements and usage. We are increasing our 
investment in our aviation programs. In fiscal year 2008 we plan to 
procure 188 aircraft for the Navy and Marine Corps team.\7\ 
Particularly critical programs include the Joint Strike Fighter (JSF), 
the F/A-18E/F Super Hornet, the EA-18G Growler, the P-8A Multi-Mission 
Maritime Aircraft (MMA), the MV-22, and helicopter programs. The 
Department also serves as the executive agent for the modernization of 
the fleet of presidential helicopters which will be replaced by the VH-
71.
---------------------------------------------------------------------------
    \7\ ``Highlights of the Department of the Navy's Fiscal Year 2008 
Budget'', p. 3-15.
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  --The Joint Strike Fighter (JSF) (STOVL, CV, CTOL) is the next-
        generation strike fighter weapons system designed to counter 
        the threats of 2010 and beyond. Low rate initial production 
        (LRIP) long lead funding for initial Conventional Take-off and 
        Landing (CTOL) aircraft was awarded in March 2006. A 
        significant upcoming milestone for JSF is the Defense 
        Acquisition Board in spring 2007 for approval of LRIP 1 full 
        funding and LRIP 2 long lead contract awards.
  --The F/A-18E/F Super Hornet is the Navy's multi-mission strike 
        fighter. Currently in its eighth year of full production, 65 
        percent of the total procurement objective has been delivered 
        (298/460). The fiscal year 2008 budget requests funding for 24 
        F/A-18E/F Super Hornets. An additional 12 F/A-18E/F Super 
        Hornets are requested in the fiscal year 2008 GWOT request to 
        bridge the projected shortfalls due to excessive operational 
        use which will shorten ESL.
  --The EA-18G Growler is the Navy's replacement for the legacy EA-6B 
        and will assume the role for airborne electronic attack. First 
        flight for the Growler occurred in August 2006. EA-18G aircraft 
        are being procured as part of the F/A-18E/F Multi-Year 
        Procurement II contract. The fiscal year 2008 budget invests 
        $1.3 billion which procures 18 E/A-18G aircraft.
  --The P8A MMA replaces the Navy's P-3C Orion and fills Combatant 
        Commander requirements for long endurance naval aircraft in 
        fulfillment of many missions in major combat operations, GWOT 
        and homeland defense. The program, now in detailed design 
        phase, will achieve initial operational capability in fiscal 
        year 2013--initial production buys will begin in fiscal year 
        2010.
  --The MV-22 Osprey Tilt Rotor aircraft will supplement and replace 
        the CH-46 with enhanced mission capabilities. The CH-46E is 
        over 40 years old, with limited lift and mission capabilities 
        to support the Marine Air-Ground Task Force (MAGTF) and the 
        GWOT. MV-22 initial operational capability is scheduled for 
        fall 2007 with a continued transition of two CH-46E squadrons 
        per year thereafter. The fiscal year 2008 budget includes a 
        request for 21 MV-22 aircraft.
  --Helicopters continue to provide essential lift capability to the 
        Navy and Marine Corps. Critical to this capability are the MH-
        60R/S and the UH-1 programs. The MH-60R will replace the aging 
        SH-60B and SH-60F helicopters with the primary mission of 
        undersea and surface warfare. The MH-60S will support the CSG 
        and ESG combat logistics, search and rescue, vertical 
        replenishment, anti-surface warfare, airborne mine 
        countermeasures, combat search and rescue, and naval special 
        warfare mission area. The fiscal year 2008 budget invests in 27 
        MH-60R and 18 MH-60S helicopters. The UH-1 continues to fulfill 
        the Marine Corps utility helicopter missions. The fiscal year 
        2008 budget supports the UH-1Y new build strategy and procures 
        20 UH-1Y helicopters.
            Research and Development
    As we look to transform our force with new generation platforms, we 
must also actively seek out new innovations and niche technology. Our 
fiscal year 2008 budget continues investment in the research and 
development, Science and Technology (S&T), and the Research, 
Development, Test, & Evaluation (RDT&E) management support accounts. In 
fiscal year 2008, the RDT&E account decreases by over 8 percent, 
reflecting technology maturation and the transition to production of 
programs previously in RDT&E. Funding for Science and Technology (S&T) 
is kept relatively constant to enhance capabilities for the naval 
forces of today, tomorrow, and the future. To maximize our return on 
S&T funding, we have developed a newly integrated naval S&T strategic 
plan focused on areas where the Department of the Navy needs to be a 
world leader and an early adopter of technologies. RDT&E accounts also 
support the transition of technologies and the development of critical 
new weapon systems. Critical shipbuilding programs include CVN 21, SSN 
774 Virginia Class Submarine, DDG 1000, LCS, LPD 17, T-AKE, and Joint 
High Speed Vessel. Critical manned aviation programs include the F-35, 
VH-71, P-8A, CH-53K, E2D, and EA-18G. As a final part of the RDT&E 
account, our test and evaluation communities are ensuring that 
technologies will perform as required in the field.
            Cultivating a Stable Acquisition Environment
    While our investment strategy is forward leaning--so must our 
procurement process be. It is clear that we must better define our 
programs early in the acquisition process. A key emphasis must be to 
properly incentivize contractors to bid in a responsible manner and 
then to diligently execute to the accepted proposal. I intend to focus 
a significant part of my remaining time as Secretary of the Navy in 
getting this right. This year we are focusing our efforts to take on 
the challenges of revising and reinstituting our policy on contractor 
performance assessment, controlling cost growth and reducing program 
volatility, and building rapid acquisition processes. We have 
established acquisition guidelines concerning urgent warfighting needs, 
addressing schedule priority, source selection criteria and contract 
performance. Specific acquisition policies emphasize rapid deployment 
capability, rapid acquisition processing, controlling cost growth, and 
contractor performance assessments. An acquisition reengineering effort 
addressing an open systems business model, accountability and portfolio 
assessment, human capital planning, and program formulation and 
capability planning has been initiated. These four threads are aimed at 
making the acquisition process more responsive and delivering the 
agreed upon warfighting capability within the agreed upon cost and 
schedule.
    In addition to acquisition reform, we are investing in methods to 
increase efficiency and maximize the return on our investments. Though 
still maturing, the Navy is developing the Navy Enterprise Framework 
which will better leverage the value streams consisting of people, 
dollars, and materiel needed to deliver warfighting readiness to Navy 
Component and Combatant Commanders. The Department is also seeking to 
use ``best practices'' of the private sector through the deployment of 
Lean Six-Sigma (LSS). LSS is being implemented throughout the 
Department to increase quality of work life, safety levels, speed of 
decisions and transactions, and to decrease total cost of ownership. 
The vision is to create a critical mass of leaders and personnel who 
routinely apply LSS methodologies for continuous process improvement.
    The Department will continue to seek ways to transform the way we 
do business resulting in improved efficiency, better decision-making, 
and an organizational culture that is performance-based.
                               conclusion
    Investing in our present needs and fighting the global war on 
terror are on the forefront of our priorities--but we must not forget 
that the world is an ever evolving environment. We must be prepared to 
respond to emerging threats of an uncertain future. To accomplish these 
goals we must continue to invest in our national defense.
    Thanks to the continuous support of the Congress our naval forces 
are superior to all others. But developing and maintaining capable 
naval forces requires our Nation to take a long-term view. It requires 
time, constant strategic planning, and significant commitment of 
resources to develop and maintain the world's premier naval force. 
Together, we have made tough decisions and I believe that this budget 
submission is adequately structured to support the needs of the United 
States Navy and the United States Marine Corps.
    Only through the collaborative efforts of the Congress and the 
Department of the Navy and with the support of the American people can 
we provide the Nation the naval force it needs to fight the global war 
on terror and prepare for the challenges of the future.
    Thank you.

    Senator Inouye. May I now recognize Chief of Naval 
Operations, Admiral Mullen.
STATEMENT OF ADMIRAL MICHAEL G. MULLEN, CHIEF OF NAVAL 
            OPERATIONS
    Admiral Mullen. Chairman Inouye, Senator Stevens, other 
distinguished members of the subcommittee. Thank you for your 
continued support of our men and women in uniform, and for the 
opportunity to appear before you today.
    I'm honored to join Secretary Winter and General Conway, 
representing the longest lasting inner-service relationship in 
our Nation's military history, the Navy-Marine Corps team. As 
the Secretary said, we are a nation at war--a maritime nation I 
might point out--fighting an elusive and adaptive enemy, bent 
on using terror and irregular tactics, to spread hatred and 
fear across the globe.
    At the same time, we are confronted by potentially hostile 
nation-states determined to develop and use sophisticated 
weapons systems. Your Navy is ready to meet these challenges. 
Sir, 2006 was a busy year. We met the demands of combatant 
commanders for well-trained, combat-ready forces around the 
world, deterring aggression and combating terrorism while 
providing international disaster relief to Pakistan and to the 
Philippines. Revisiting the tsunami-ravaged Southeast Asia with 
humanitarian relief on board hospital ship Mercy. Successfully 
evacuating over 14,000 American citizens safely from Lebanon 
and demonstrating our surge capability and partner building 
capacity in exercises Valiant Shield and RIMPAC.
    In addition to that, we monitored missile launches on the 
Korean peninsula with our aegis destroyers, sent a message of 
hope and resolve by the George Washington strike group in 
partnership of the Americas, and developed closer military-to-
military relationships with the navies of China, India, and 
Russia.
    Some of our finest warfare officers command PRTs in 
Afghanistan, and Navy admirals commanded the joint task forces 
Horn of Africa and at Guantanamo Bay. We also strengthened our 
homeland security through partnership with our Coast Guard. 
Nearly 100 of your ships and submarines are at sea today and 
more than 60,000 sailors are forward deployed. Fully one-half 
of these men and women serve in the CENTCOM AOR and almost one-
half of that number are on the ground in combat support roles. 
They are performing magnificently, each and every one.
    I had the opportunity to visit with many of them over the 
holidays in the Arabian Gulf, Iraq, Afghanistan, Bahrain, and 
the Horn of Africa. I can tell you they are focused, well 
trained, and well led. They are proud of what they are doing, 
still proud of the difference they know they are making.
    But, we have work, we have to work hard to sustain this 
readiness. Though we continue to meet or exceed almost all of 
our recruiting and retention goals, I remain concerned about 
certain shortfalls among our expeditionary forces. SEALS, 
explosive ordinance disposal personnel, our naval construction 
force, medical corps, and our naval intelligence community. 
Additionally, I am starting to see, for the first time in 
years, a drop in our first-term retention and I'm watching this 
very closely.
    As I testified to the House Armed Services Committee last 
month, the accelerated wear and tear on systems and equipment 
in a harsh physical environment requires immediate attention, 
especially on combat construction equipment for our Seabees and 
older models of our expeditionary aircraft, the P-3, the EP-3, 
and the EA-6B Prowlers. The sound investments we made to 
improve fleet capabilities have paid off. We must now continue 
to reenergize our procurement accounts to maintain those 
capabilities in the future.
    Our fiscal year 2008 budget request helps us do that, 
calling for the construction of seven new ships as well as the 
addition of 188 new operational aircraft to the inventory, 
nearly 40 more than we ordered last year. As you know, we 
submitted a shipbuilding plan to Congress last year that would 
produce a fleet of 313 ships by 2020, a fleet sized and 
balanced to meet the challenges we face at the maximum 
acceptable risk. That plan, submitted with this budget, has not 
changed--still centered on 11 and eventually 12 aircraft 
carriers, 48 submarines, and 88 surface combatants--which 
include 88 cruisers and destroyers and up to 55 littoral combat 
ships. It will provide the Nation more options and more 
flexibility than ever before, particularly in core warfighting 
areas like mine and undersea warfare and antiballistic missile 
defense.
    I appreciate the support we've received from this 
subcommittee in developing this plan and building this fleet. 
We continue to evaluate, as we must, the impact of global 
developments, global developments that we had on the plan's 
original risk assumptions. I assure you I remain committed to a 
stable shipbuilding program and to pursuing, with our partners 
in industry, OSD and here on the Hill, the efficiencies 
required to make it affordable.
    Three things have definitely not changed, Mr. Chairman. My 
priorities to sustain combat readiness, build a fleet for the 
future, and develop 21st century leaders. I know the role our 
Navy must play in helping win the war on terror, while 
providing a powerful deterrent and remaining a vital element of 
this Nation's strategic reserve. I know well our requirement to 
support those we send into harm's way with the very best 
medical care, top-notch housing, and installations, and a 
strong commitment to their professional growth.
    The 2008 budget we've submitted is not without risk. While 
other services have seen their top lines increase since 9/11, 
the Navy has experienced a $7 billion decrease in buying power 
over the last 4 years. Our 2008 budget represents the maximum 
risk we believe we can accept in four key areas; manpower, 
readiness--both ashore and afloat--our procurement accounts, 
and our reset.
    When our ground forces return from Iraq and Afghanistan, 
our Nation will increasingly depend on the core expeditionary 
capabilities of our Navy and Marine Corps team. It is what we 
have done for over 231 years, and what we must continue to 
deliver to keep our Nation safe and prosperous. I know--and I 
know you know--that a maritime nation, such as ours, depends in 
great measure, as it has for more than 230 years, on the 
flexibility, reach, agility, and lethality of a strong Navy. We 
are that Navy, Mr. Chairman, and with your continued support we 
will remain that Navy.

                           PREPARED STATEMENT

    Again, on behalf of your sailors, Navy civilians, and their 
wonderfully supportive families, I thank you for the 
opportunity before you and stand ready to answer your 
questions.
    Senator Inouye. I thank you very much, Admiral, for your 
reassuring remarks.
    [The statement follows:]
            Prepared Statement of Admiral Michael G. Mullen
    Mr. Chairman, Senator Stevens, and members of the committee, it is 
an honor to appear before you today representing the brave men and 
women, sailors and civilians, of the United States Navy. And it is with 
great pride, tempered by the urgency of war, that I report to you the 
Navy's readiness to answer all bells for our Nation's security, today 
and for generations to come. Thank you for your longstanding support.
                              introduction
    We are a maritime Nation involved in a long, irregular and global 
war that extends far beyond Iraq and Afghanistan. The threat we face 
breeds within failing states and the under-governed spaces of the world 
and preys upon those weakened by poverty, disease, and hatred. It 
thrives where there is no rule of law and spreads like a malignancy 
through cyberspace and the vast maritime commons that serve as 
connecting tissue in this age of globalization.
    We are also confronted by nation-states determined to develop 
sophisticated weapons systems, including nuclear arms. We cannot allow 
ourselves to be fixated on one threat alone. Our national security is 
dependent upon a strong Navy that can keep the sea lanes free, deter 
aggression, safeguard our sources of energy, protect the interests of 
our citizens at home and reassure our friends abroad. We must never 
relinquish overmatching capability and capacity.
    While our ground forces are engaged in Iraq and Afghanistan, the 
Navy--with its ability to deliver two unique attributes day to day--
global reach and persistent presence--will continue to support our 
responsibilities worldwide and provide a powerful deterrence, both in 
day-to-day operations as well as being a vital element of our Nation's 
``Strategic Reserve.'' As we pace the rapidly changing security 
environment, there is no alternative to a well balanced fleet.
    Much has changed in the world since I testified before this 
committee last year. Iran has been emboldened by the Israel/Shoebill 
war and continues the overt pursuit of a nuclear production capability. 
North Korea has test fired long range ballistic missiles and conducted 
an underground nuclear detonation. China has demonstrated the ability 
and willingness to conduct out of area diesel submarine operations and 
their advanced military and space technology development continues 
apace. The stated desire for, and apparent pursuit of, weapons of mass 
destruction (WMD) and advanced delivery systems has increased among 
terrorist organizations and their state sponsors. And within our own 
hemisphere, some leaders have become increasingly vocal in their 
opposition to policies of the United States.
    Last Spring I signed the Navy Strategic Plan (NSP) to better align 
budgetary decisions with future operations and risk assessments. The 
NSP also laid the foundation for the Naval Operating Concept (NOC), 
which I co-signed with the Commandant of the Marine Corps in August 
2006. The NOC is intended to define the objectives and missions of the 
Navy-Marine Corps Team and to underscore our warfighting 
interdependence.
    The President's National Strategy for Maritime Security (NSMS) 
calls for enhanced international cooperation to ensure lawful and 
timely enforcement actions against maritime threats. During the Cold 
War, our Navy was guided by a maritime strategy focused on containing 
and defeating the spread of communism and Soviet domination. It is time 
to develop a new maritime strategy based on global reach and persistent 
presence--a strategy that includes core Navy warfighting competencies 
and deterrence, strategic communication and information operations, 
shaping and stability operations, emerging and enduring partnerships.
    At the International Sea Power Symposium in September 2005, the 
Chiefs of 49 navies and coast guards, among 72 countries represented, 
discussed a new vision of sea power in the 21st century. That vision of 
sea power encourages international partnerships for maritime security 
and awareness, consisting of vessels and capabilities from partner 
nations around the world--nations with a shared stake in international 
commerce, security and freedom of the seas: the ``1,000 Ship Navy.''
    This year the U.S. Navy and Coast Guard have joined maritime forces 
around the world interested in participating in global maritime 
partnerships--a proverbial ``1,000 Ship Navy.'' Membership in this 
``global fleet'' is not proscriptive and has no legal or encumbering 
ties. It is envisioned to be a free form force of maritime partners who 
see the promise of sea power to unite, rather than to divide: 
Collective security on the oceans highways through a global maritime 
network.

    ----------------------------------------------------------------

                      United States Navy's Vision
    Americans secure at home and abroad; sea and air lanes open and 
free for the peaceful, productive movement of international commerce; 
enduring national and international naval relationships that remain 
strong and true; steadily deepening cooperation among the maritime 
forces of emerging partner nations; and a combat-ready Navy--forward-
deployed, rotational and surge capable--large enough, agile enough, and 
lethal enough to deter any threat and defeat any foe in support of the 
Joint Force.

    ----------------------------------------------------------------

                               priorities
    In last year's testimony, I identified three priorities addressed 
by our fiscal year 2007 budget. We have made progress in all three and 
our fiscal year 2008 budget reaffirms our commitment to these 
priorities. We seek your assistance as we move forward, placing 
particular emphasis on strengthening our core warfighting capabilities 
and increasing our own military capacity as well as that of our 
partners. Our three priorities remain:
  --Sustain Combat Readiness.--With the right combat capabilities--
        speed, agility, persistence, and dominance--for the right cost.
  --Build a Fleet for the Future.--Balanced, rotational, forward 
        deployed and surge capable--the proper size and mix of 
        capabilities to empower our enduring and emerging partners, 
        deter our adversaries, and defeat our enemies.
  --Develop 21st Century leaders.--Inherent in a strategy which, 
        through a transformed manpower, personnel, training and 
        education organization, better competes for the talent our 
        country produces and creates the conditions in which the full 
        potential of every man and woman serving our Navy can be 
        achieved.
                        sustain combat readiness
Fiscal Year 2006 in Review
    The Navy answered all bells in 2006. We met the demands of 
Combatant Commanders for well-trained, combat-ready forces--deterring 
aggression while conducting Operation Enduring Freedom, Operation Iraqi 
Freedom, international disaster relief, and humanitarian missions. We 
successfully evacuated over 14,000 American citizens safely from 
Lebanon and demonstrated our resolve, capability and partner building 
capacity in Exercises Valiant Shield, RIMPAC, and Partnership of the 
Americas.
    Over 10,000 Navy individual augmentees continued to make 
significant contributions around the world in all manner of joint and 
coalition billets, particularly in the CENTCOM area of responsibility. 
We continued to provide vital direct and indirect combat support to the 
Marine Corps through a variety of blue in support of green programs, 
and we supported homeland defense initiatives with the U.S. Coast 
Guard, including the development of a Maritime Domain Awareness Concept 
of Operations (CONOPS) and the establishment of three Sector Command 
Center-Joint, interagency harbor operations centers.
    Last year the Navy also made progress toward improving our core 
warfighting competencies: anti-submarine warfare, mine warfare, and 
ballistic missile defense. As the missile tests on the Korean Peninsula 
and the out of area deployment of a Chinese diesel submarine remind us, 
we must ensure we sustain our overmatching capability and capacity in 
these, and other, core warfighting mission areas.
Current Readiness
    I recently returned from a trip to Iraq, Afghanistan, Djibouti, 
Bahrain, and ships at sea in the Arabian Gulf. I visited with sailors 
conducting special operations and combat support in Iraq, flying combat 
sorties in support of OEF and OIF, providing security protection for 
oil platforms, conducting civil affairs missions in Afghanistan, 
participating in Theater Security Cooperation activities in Horn of 
Africa, and standing watches onboard U.S.S. Dwight D. Eisenhower, 
U.S.S. Anzio, and U.S.S. Boxer--reassuring our allies in the region 
while providing a formidable deterrent to Iran.
    Our Navy's readiness is superb and our sailors are performing at 
exceptional levels at sea and ashore. The men and women of your Navy 
are on watch around the world, around the clock. 



    On 15 March 2007 we had 95 ships on deployment (34 percent of the 
fleet) and 127 ships underway (46 percent of the fleet) in every 
theater of operation; this included 3 aircraft carriers, and 4 big deck 
amphibious ships (LHA/LHD), and approximately 25 submarines (Figure 1).
    That same day, 2,744 active and reserve Seabees, and 4,896 of our 
active and reserve medical corps were serving overseas, many in combat 
support roles. Additionally, 817 members of the Navy Special Warfare 
community were deployed overseas (of 3,616 deployable), as were 247 
Explosive Ordnance Disposal personnel (with 105 surge-available to 
deploy), and 744 Naval Coastal Warfare/Expeditionary Security Force 
personnel (of 2,640 deployable). Earlier this month, 167 sailors from 
the Navy's first, newly established Riverine Squadron arrived in Iraq 
to provide area security at the Haditha Dam.
    Worldwide, on March 15, 2007, there were 60,313 of our sailors 
deployed ashore and afloat worldwide, conducting strategic deterrence; 
intelligence, surveillance and reconnaissance; anti-submarine warfare 
training, ballistic missile defense, mine counter warfare, counter 
piracy and counter-drug patrols, theater security cooperation 
activities, and humanitarian assistance. On that day there were 31,120 
sailors serving in the CENTCOM AOR, 13,007 of whom, were on the ground 
building roads and schools, offering combat care and medical assistance 
to our fleet marines, providing timely intelligence support to Special 
Operations, and contributing to the myriad combat support and 
reconstruction missions ongoing in that region. No less vital are the 
sailors and civilians--the total Navy--who serve the shore-based 
infrastructure that underpins our fleet worldwide.
    Perhaps the greatest enabler of our current, and continuous, 
readiness has been the ongoing development of the Fleet Response Plan 
(FRP). FRP is an evolving, deliberate process to ensure increased and 
continuous availability of trained, ready Navy forces capable of a 
surge response forward on short notice. FRP does not change training 
requirements, operational capabilities or the amount of maintenance. 
Rather, it delivers enhanced surge capability while providing 
rotationally deployed forces to fulfill global force commitments.
    Another key enabler of our fleet readiness is family readiness. 
``Family readiness'' means sailors' families are prepared for the 
absence of their loved one. The Navy strives to reduce the uncertainty 
and apprehension experienced by our Navy families in these stressful 
times, while strengthening the programs and resources available to 
support them.
    Without the support of our families--and, without supporting them 
in return--we cannot hope to sustain combat readiness. We owe our 
sailors and their families the very best quality of life we can offer. 
This includes top-notch housing and installations, the best health care 
we can provide, and a strong commitment to child care.
Requirements to Sustain Combat Readiness
    As we adapt to asymmetric threats and the challenges of irregular 
warfare, we cannot lose sight of Navy's core warfighting competencies. 
We must continue to improve performance in anti-submarine and mine 
warfare, anti-surface warfare, anti-air warfare, strike warfare, 
ballistic missile defense, and other core maritime supremacy missions. 
We will continue to mature our Fleet Response Plan (FRP) and strengthen 
Fleet and Family Readiness--to ensure combat ready, surge-capable 
forces are available to meet any contingency. Natural disasters abroad 
and hurricanes here at home taught us valuable lessons. We need to 
extend the FRP philosophy of ``continuous readiness'' to our shore 
commands, our people, and to our families.
    To sustain our combat readiness, we seek congressional support in 
the following areas:
  --Anti-submarine Warfare.--Submarines with improving stealth and 
        attack capability--particularly modern diesel attack 
        submarines--are proliferating world-wide at an alarming rate. 
        Locating these relatively inexpensive but extremely quiet boats 
        presents our Navy with a formidable challenge. Navy is pursuing 
        a distributed and netted approach to ASW. Some of the key ASW 
        programs we must continue to develop and field as quickly as 
        possible include: the Deployable Distributed Autonomous system 
        (DADS); the Reliable Acoustic Path Vertical Line Array 
        (RAPVLA); the Surface Ship Torpedo Defense System (SSTD); the 
        Aircraft Carrier Periscope Detection Radar (CVNPDR); and, the 
        High Altitude ASW Weapon Concept (HAAWC).
  --SONAR Restrictions.--ASW is a very complex and challenging 
        warfighting competency in which to achieve and sustain the 
        required level of expertise. Therefore every opportunity we 
        have to gain and maintain proficiency at the ship/unit level, 
        and every opportunity we have to integrate units in complex 
        scenarios is crucial to our readiness. Unfortunately, our 
        ability to train in the same manner in which we fight is under 
        attack in public forums, including the courts. Thus far, we 
        have seen little scientific basis for the claims lodged against 
        the Navy. However, these allegations present the potential for 
        severe restrictions on our continued ability to train 
        effectively, as we saw in RIMPAC 2006 wherein we lost 3 days of 
        valuable ASW training with active sonar because of a court 
        restraining order. Navy is currently executing a comprehensive 
        plan of action to cover all our at-sea training areas with 
        environmental compliance documents by the end of 2009. We are 
        committed to maintaining an open dialogue, continuing to 
        advance our scientific understanding of the impacts of sonar on 
        marine mammals, and complying with the relevant statutes. We 
        have consistently made this clear as an organization in our 
        debate on this issue. Maintaining proficiency in ASW is a daily 
        challenge, and while our long-term compliance documents are 
        being developed, we cannot afford to stop training. We owe it 
        to our sailors to ensure they receive the training they need to 
        fight and win.
      The Marine Mammal Protection Act (MMPA) requires permits for 
        activities that may affect marine mammals. This includes 
        military activities, including certain Navy activities at sea. 
        The National Defense Authorization Act of 2004 included a 
        provision that authorizes the Secretary of Defense to grant 
        exemptions to the MMPA for certain military activities critical 
        to our national defense. On January 23, 2007, the Deputy 
        Secretary of Defense granted Navy a National Defense Exemption 
        (NDE) for 2 years covering mid-frequency active (MFA) sonar 
        activities for major exercises and in major operating areas, as 
        well as the use of Improved Explosive Echo Ranging sonobuoys 
        (IEER). The NDE will help Navy continue to conduct the sonar 
        training necessary for our national defense while protecting 
        marine mammals through established mitigation measures.
  --Naval Expeditionary Combat Command.--NECC is developing into a true 
        force of choice in phase zero (pre-conflict) and phase V 
        (reconstruction) operations, and as a vital part of our 
        Nation's long war against terrorism. Included in the Naval 
        Expeditionary Combat Command today are 30,363 Active and 
        Reserve component sailors including 15,339 in the Naval 
        Construction Force, 6,557 in Naval Coastal Warfare, 3,607 in 
        the Navy Expeditionary Logistics Force, 2,482 in Explosive 
        Ordnance Disposal, 712 in the Riverine Force, 591 in the Navy 
        Expeditionary Guard Battalion, 441 in Visit Board Search and 
        Seizure/Intel, 431 in the Maritime Civil Affairs Group, 85 in 
        Combat Camera, 68 in the Expeditionary Combat Readiness Center, 
        and 50 in the Expeditionary Training Group. All new forces--
        Riverine, Expeditionary Training Group, Maritime Civil Affairs 
        and Maritime Expeditionary Security Force--will meet full IOC 
        objectives in fiscal year 2007. Riverine will deploy its first 
        squadron to Iraq this month to provide area security at Haditha 
        dam and interdiction operations on the Euphrates River. Your 
        continued support of our Riverine capability and capacity is 
        vital. Our second Riverine squadron was established on February 
        2, 2007 and our third squadron will be stood up this June.
  --Sea Basing.--It would be difficult to consider any future 
        expeditionary missions without recognizing the need for a sea 
        base from which to stage Joint Forcible Entry Operations, 
        Theater Security Cooperation, and humanitarian assistance 
        activities. Sea basing provides operational maneuver and 
        assured access to the Joint Force while significantly reducing 
        our footprint ashore and minimizing the permissions required to 
        operate from host nations. These are operational 
        characteristics that will prove increasingly vital in the post-
        OIF/OEF political-military security environment. Navy is 
        exploring innovative operational concepts combining sea basing 
        with adaptive force packaging that will further support 
        national security policy and the Combatant Commanders' 
        objectives worldwide. Our 30 year shipbuilding plan provides 
        for sea basing that covers the spectrum of warfare from Joint 
        Forcible Entry to persistent and cooperative Theater Security 
        Cooperation.
  --Ballistic Missile Defense.--Missile tests on the Korean Peninsula 
        and by Iran, along with the proliferation of ballistic missile 
        technology underscores the growing need for a robust, sea-borne 
        ballistic missile defense system. Last year, the Navy made 
        further progress on our Aegis Ballistic Missile Defense (BMD), 
        the sea based component of the Missile Defense Agency's (MDA) 
        Ballistic Missile Defense System (BMDS). It enables surface 
        combatants to support ground-based sensors and provides a 
        capability to intercept short and medium range ballistic 
        missiles with ship-based interceptors (SM-3). The Sea-Based 
        Terminal Program will provide the ability to engage Short Range 
        Ballistic Missiles (SRBMs) with modified SM-2 BLk IV missiles 
        from Aegis BMD capable ships.
  --Depot Level Maintenance.--Ship and aviation depot level maintenance 
        is critical to enable the continuing readiness of our 
        warfighting capabilities. Support of our O&MN accounts will 
        ensure we don't defer critical maintenance.
  --U.S.S. George Washington.--The U.S.S. George Washington will 
        relieve U.S.S. Kitty Hawk as our forward deployed Naval forces 
        CVN in Japan in fiscal year 2008. This transition, vital to our 
        security interests in the Asian Pacific region, needs to be 
        fully funded.
  --Fleet and Family Readiness.--The Navy is addressing fleet and 
        family readiness in many critical areas, four of which are: 
        minimizing financial risk and predatory lending; improving 
        crisis management and response procedures; enhancing child care 
        programs and centers; and, improving ombudsman programs. We 
        also continue to work with those families struggling to recover 
        from the devastation of Hurricanes Katrina and Rita.
  --Steaming Days.--The fiscal year 2008 budget provides funds 
        necessary to support 48 underway days per quarter of the active 
        operational tempo (OPTEMPO) for deployed forces and 22 underway 
        days per quarter for non-deployed forces (primarily used for 
        training). Our fiscal year 2008 baseline budget estimates also 
        include reductions to peacetime OPTEMPO levels. The fiscal year 
        2008 budget supports the ``6+1'' surge readiness level from our 
        Carrier Strike Groups. As in fiscal year 2006 and fiscal year 
        2007, it is anticipated that operational requirements will 
        continue to exceed peacetime levels in fiscal year 2008.
                     ibuild a fleet for the future
Fiscal Year 2006 in Review
    In 2005 the Navy conducted extensive analysis to determine the 
minimum required force structure needed to meet the security demands of 
the 21st century with an acceptable level of risk. In February 2006, 
the Navy unveiled a new 30-year shipbuilding plan that will provide a 
Battle Force of approximately 313 ships by 2020 with more capacity and 
capability than was ever dreamed when our fleet was much larger in 
size. Stabilizing this plan, which remained essentially unchanged in 
our 2007 submission, is intended to provide the shipbuilding industry 
with sufficient predictability to maintain critical skills and to make 
business decisions that increase efficiency and productivity in order 
to meet the Navy's projected shipbuilding requirements.
    Last year we began to see our future fleet taking shape. We 
currently have 38 ships under contract for construction, and in fiscal 
year 2006 ships that had been designed a few short years ago rolled 
down the ways. We christened the first Freedom Class Littoral Combat 
Ship, amphibious assault ship Makin Island, amphibious transport dock 
ship Green Bay, guided missile destroyers Gridley and Sampson, nuclear 
fast attack submarine Hawaii, auxiliary dry cargo ships Alan Shepard 
and Sacagawea, and the aircraft carrier George HW Bush. We commissioned 
the amphibious nuclear attack submarine Texas and the guided missile 
destroyer Farragut. We also rolled out the first EA-18G Growler.
    In fiscal year 2006, the increased wartime OPTEMPO of Operations 
Iraqi Freedom, Enduring Freedom and the global war on terror continued 
to wear down Navy's aging, ``legacy'' aircraft. Expeditionary aircraft 
utilization has dramatically increased, particularly for EA-6B airborne 
electronic attack aircraft, MH-60 multi-mission helicopters, P-3 
maritime patrol aircraft, EP-3 electronic surveillance aircraft, and F/
A-18 C/D attack aircraft, thus shortening the expected service life 
(ESL) of these aging airframes.
    Improving our own capacity was only part of the Navy's focus in 
fiscal year 2006. We also pursued the broadest possible approach to 
strengthening maritime security through partnerships. This included 
closer cooperation with the U.S. Coast Guard and our other interagency 
partners, international organizations, non-governmental agencies, 
commercial shippers, and maritime nations great and small.
    Perhaps the most tangible application of Navy's global reach and 
persistent presence in building partner capacity was last year's 5 
month deployment of the hospital ship Mercy in the summer of 2006 to 
the tsunami-affected areas in South and Southeast Asia. Working with 
embarked military medical personnel from Canada, Australia, Singapore, 
India and Malaysia as well as representatives from 11 non-governmental 
organizations, Mercy's accomplishments ashore and afloat included: 
60,081 patients seen, 131,511 total services provided; 1,083 surgeries; 
19,375 immunizations; 20,134 optometry evaluations, 16,141 glasses 
distributed; 9,373 dental extractions; 236 biomedical equipment 
repairs, 254 people trained; 59 major and 177 minor medical systems 
restored to 100 percent operational capacity; and, 6,201 host nation 
students trained.
    In an August 2006 public opinion survey, conducted by Terror Free 
Tomorrow, Indonesians and Bangladeshis overwhelmingly indicated their 
support of this humanitarian mission. In Indonesia, 85 percent of those 
aware of Mercy's visit had a favorable opinion, and in Bangladesh this 
figure was 95 percent. Further, 87 percent of those polled in 
Bangladesh stated that Mercy's activities made their overall view of 
the United States more positive. These polling results provide some 
indication of the power of partnerships.
Current Force
    By the end of fiscal year 2007 we will have stopped the free fall 
of our Navy and our fleet's net size will have grown from a low of 274 
ships in March 2007 to 279, including five newly commissioned ships.
    Navy is in the process of evaluating the impact global developments 
have had on our risk assumptions, and ultimately whether or not this 
will affect the build rate of our future Battle Force. Whatever the 
outcome of this evaluation, we will work closely with our partners in 
industry to control requirements costs and provide the industrial base 
the stability it needs to become more productive.
    Future platforms and combat systems must be designed and built with 
the knowledge that we plan to continually upgrade them over their 
lifetime. An open architecture approach to software acquisition and 
development of integrated weapons systems is a critical part of this 
business model. Free and open competition in which the best idea wins 
is the goal.
    The fiscal year 2008 President's budget submission provides for 
procuring seven new ships in fiscal year 2008 and 67 new ships over the 
FYDP (fiscal year 2008-2013). To facilitate the stability required to 
achieve reduced costs in this constrained industrial sector, no changes 
in ship acquisitions were made in fiscal year 2008 from PB07 to PB08. 
The Navy has a long-range vision to reduce types and models of ships, 
to maximize reuse of ship designs and components, and to employ a 
business model that encourages the use of open architecture and mission 
systems modularity.
    The next major challenge in building a fleet for the future is to 
deliver a long range aviation procurement plan. Much work has been done 
analyzing joint warfighting capabilities and capacity based on threat 
and risk assessments driven by Defense Planning Guidance. Consideration 
has also been given to affordability, industrial capacity and 
production times associated with next generation aviation warfare. The 
Navy will work to deliver a stable aviation build plan that transforms 
and balances aviation capabilities with respect to conventional and 
irregular warfare, reduces excess capacity, and achieves technological 
superiority through cost-wise investments in recapitalization, 
sustainment and modernization programs.
    PB08 procures 188 aircraft in fiscal year 2008 and 1,295 aircraft 
across the FYDP (fiscal year 2008-2013), reduces average aircraft age 
from 74 percent to 50 percent of expected service life, and 
concentrates on resourcing critical maritime and joint effects. The 
plan is structured to support required economic order quantity 
investments and facilitate Multi-Year Procurement (MYP) contracts.
    We must include the vital contribution that can be made in securing 
the global commons by our partners with common interests. The 
President's National Strategy for Maritime Security states, that, ``The 
safety and economic security of the United States depends upon the 
secure use of the world's oceans.'' It further notes that, ``maritime 
security is best achieved by blending public and private maritime 
security activities on a global scale into an integrated effort that 
addresses all maritime threats.''
    I believe an international ``1,000 ship Navy,'' offers a real 
opportunity to increase partner nation capabilities while reducing 
transnational crime, WMD proliferation, terrorism, and human 
trafficking. Regional maritime security partnerships are already taking 
shape worldwide that support this ideal, some with and some without 
direct U.S. Navy involvement. The self-organizing evacuation of non-
combatants from Lebanon during the Israeli-Hezbollah war, in which 170 
ships from 17 countries came together, accomplished their mission, and 
dispersed is often cited as a good example of how such partnerships 
might work.
    Critical to increasing partner capacity in the war on terror, as 
well as building strong global maritime partnerships (the ``1,000 ship 
Navy'') that promote maritime security, is the Building Global 
Partnerships Act of 2007, being submitted to Congress by the Department 
of Defense as a top legislative priority. The BGP Act will 
significantly improve our ability to help friendly nations develop 
capabilities to better govern and defend their territorial waters and 
the global maritime commons, denying access to terrorists and criminal 
organizations. We encourage your support for this vital legislation 
that will further enable support for the ``1,000 ship Navy'' concept.
    Sea power in this century cannot be harnessed by a single nation 
acting alone. If we are to build a fleet for the future capable of 
keeping pace with globalization, we must leverage the capacity of our 
partners with common interests. The positive potential of sea power and 
freedom of the seas can only be achieved through a collective and 
cooperative approach focused on international rule of law and freedom 
of the maritime commons.
Requirements to Build a Fleet for the Future
    We have worked hard with Congress and industry to start to create 
stability in our shipbuilding plans and industrial base. We must 
continue to fund and build a balanced, effective Battle Force of about 
313 ships--the minimum force required to guarantee the long-term 
strength and viability of U.S. naval air and sea power with acceptable 
risk. We recognize the need to control requirements, maintain program 
stability, curb costs, and monitor best business practices. We need 
support for sustained funding of our shipbuilding account--consistent 
with the 30-year plan--that is critical to provide our partners in 
industry the stability they need to curb cost growth and sustain our 
vital shipbuilding industrial base.
    To build a fleet for the future and strong partnerships, we seek 
congressional support in the following areas:
  --11 Carrier Force.--The 30 year shipbuilding plan recognizes that as 
        a result of the retirement of U.S.S. Enterprise in fiscal year 
        2013, the number of aircraft carriers will drop to 10 for a 
        period of approximately 30 months, until the U.S.S. Gerald Ford 
        enters active service. Legislative relief is required from the 
        Fiscal Year 2007 National Defense Authorization Act requiring a 
        carrier force of 11. In developing the 30 year shipbuilding 
        plan, Navy conducted extensive analysis that concluded the 
        temporary drop to a carrier force of 10 from fiscal year 2013 
        through fiscal year 2015 is an acceptable, though moderate, 
        risk. A carrier force of 11 is recognized as minimum risk over 
        the long run.
  --Littoral Combat Ship.--The Littoral Combat Ship program remains of 
        critical importance to our Navy. Current cost estimates exceed 
        established thresholds for detail design and construction of 
        LCS 1, the lead Lockheed Martin hull. This recent cost growth 
        has provided an opportunity to reinforce the Navy's commitment 
        to providing warfighting capability through affordability. The 
        Navy is executing a pause in the construction of LCS 3, the 
        second Lockheed Martin hull, to conduct a thorough review of 
        the program, and to examine both internal and external factors 
        relating to the acquisition and contracting processes, 
        practices, and oversight and the related impact on cost. The 
        Navy remains committed to bringing Littoral Combat Ship 
        capability into the fleet quickly and by means of an 
        acquisition strategy that is executable, affordable, and in the 
        best interests of the Navy.
  --Virginia Class Multi-Year Procurement (MYP).--Navy is seeking 
        multi-year procurement authority in fiscal year 2008 for 
        Virginia Class submarine contracts beginning with the fiscal 
        year 2009 ship. Continued MYP authority will help maintain a 
        stable SCN profile and greatly aid in Virginia Class cost 
        reduction initiatives. In order to support our long-term 
        submarine force structure of 48 boats, Navy plans to increase 
        the build rate of this class to two/year beginning in fiscal 
        year 2012.
  --Split Funding for Zumwalt Class DDG.--The support of Congress for 
        last year's split funding request was greatly appreciated. This 
        year Navy requests the second half of split year funding for 
        dual lead ships of the Zumwalt Class destroyer to maximize 
        competitive efficiencies and focus design efforts. Split 
        funding will also lend stability to the shipbuilding industrial 
        base. This funding strategy supports the current budget 
        structure, enhances future competitive opportunities, and 
        limits liability for appropriations in future years.
  --Joint Strike Fighter.--The F-35 Joint Strike Fighter remains the 
        cornerstone of Navy's continuing superiority in air warfare. 
        Although risk associated with the recent 2 year slide in the 
        carrier variant of the F-35 will be mitigated by an increased 
        buy of F/A-18E,F variants, there should be no doubt that JSF is 
        a much more capable aircraft. I encourage your continued strong 
        support of this program to guard against further delays in 
        production.
  --Legacy Expeditionary Aircraft Replacement.--As our aging, legacy 
        aircraft reach the end of the service lives, funding for 
        follow-on programs becomes critical. Among these programs are 
        the P-8A multi-mission maritime aircraft, the F/A 18-E/F and 
        JSF, the EA-18G airborne electronic attack aircraft, the V-22 
        tilt-rotor aircraft, and the MH-60R/S and CH-53K helicopters. 
        Navy's RDT&E program is also vital to this effort.
  --Research and Development.--To achieve the speed of war Navy is 
        pursuing Innovative Naval Prototypes (INPs)--revolutionary 
        ``game changers'' for future naval warfare. These initiatives 
        have resulted in the development of an electro-magnetic rail-
        gun prototype; new concepts for persistent, netted, littoral 
        anti-submarine warfare; technologies to enable sea-basing; and 
        the naval tactical utilization of space.
  --Public Shipyard Loading.--As we work with industry on shipbuilding 
        cost reduction, we must ensure legislation and policy support 
        best business practices and efficiencies. Apportioning work 
        based upon funding quotas to drive work-loading in public naval 
        shipyards potentially diverts efficiency opportunities away 
        from the private sector. Public yards provide vital services 
        for nuclear propulsion and submarine work, and these critical 
        competencies must be maintained. However, our first priorities 
        in shipyard loading should be quality, efficiency, and cost 
        savings. We seek your assistance in removing restrictions on 
        our work-loading flexibility.
  --Shore Installations and BRAC V.--In addition to our ships and 
        airplanes, another critical piece of force structure is our 
        shore infrastructure, to include installations, piers and 
        support facilities, training ranges, schoolhouses, hospitals, 
        and housing. Supporting a ``Surge Navy'' demands we create an 
        infrastructure that leverages advanced technology, sound 
        investment and intelligent sustainment for the fleet, for our 
        sailors and their families. The Navy's Ashore Vision 2030 is 
        our roadmap for transforming the Navy shore infrastructure over 
        the next 25 years; it is aligned with the congressionally-
        mandated Base Realignment and Closure (BRAC) process.
      The Continuing Resolution (CR) voted into Public Law in February 
        2007, decreased Department of Defense BRAC V funding from $5.6 
        billion request to $2.5 billion. Without supplemental funding 
        to remedy the $3.1 billion reduction this law made in the DOD 
        BRAC request, Navy's BRAC V funding will essentially be cut 
        from $675 million to $291 million--a 57 percent reduction. This 
        would devastate a program entering the critical stages of 
        execution. This reduction would also delay, or in some cases 
        negate, our ability to harvest savings and reap funds from land 
        sales and transfers. Should this shortfall be remedied through 
        fiscal year 2007 Emergency Supplemental Appropriations funding, 
        Navy would do its best to minimize the impact of this delay 
        through prompt execution of funds.
  --MHC Transfers.--Legislative authority for planned ship transfers 
        are an important aspect of inter-operability with the navies of 
        our allies. These transfers also contribute to the 1,000 ship 
        Navy vision by building partner nation capacity, while reducing 
        the taxpayer costs of maintaining or disposing of 
        decommissioned ships. Navy seeks authority to transfer coastal 
        mine hunting ships (MHCs) to Lithuania and Turkey. Limited in 
        speed and endurance, the MHCs were designed as non-deploying 
        assets. With no sweep capability and without redundant 
        engineering and combat systems equipment, they are constrained 
        in their ability to conduct mine clearance operations. For the 
        MHCs to provide utility in a homeland defense role, they would 
        have to be strategically distributed across the United States 
        which would drain limited fiscal and manpower resources and 
        hamper the Navy's ability to field a responsive and capable MCM 
        force. These ships are scheduled for decommissioning in fiscal 
        year 2008 and if authority is timely, they can be ``hot 
        transferred'' which is less expensive for both the United 
        States and the recipient.
  --United Nations Law of the Sea Convention.--To interact more 
        effectively with our maritime partners, it is time to ratify 
        the Law of the Sea Convention. Robust operational and 
        navigational rights codified in the Law of the Sea Convention 
        must be preserved for the Navy to continue to maximize its 
        ability to execute the National Strategy for Maritime Security. 
        Accession to the convention is of critical importance to global 
        naval maritime and over flight mobility.
                      develop 21st century leaders
Fiscal Year 2006 in Review
    In fiscal year 2006, Navy continued to meet recruiting and 
retention goals for most ratings and designators in the active and 
reserve components. We achieved 100 percent of our overall active 
component enlisted recruiting goal, and our overall enlisted retention 
goal was exceeded at 104 percent. We met 98 percent of our overall 
active component officer accession goal and 99 percent of our active 
officer end strength goal. Navy will continue to remain vigilant in 
what is proving to be an increasingly difficult recruiting environment.
    Fiscal year 2006 was the fifth year of support for the global war 
on terror. Continued wartime OPTEMPO for Operations OIF and OEF has 
raised concern for the health and welfare of some parts of our 
expeditionary force. Medical ratings and designators, Explosive 
Ordnance Disposal (EOD) personnel, divers, Special Warfare Combat 
Crewmen (SWCC), and Seals remained recruiting challenges.
    Last year, Navy put a great deal of effort into analyzing and 
addressing the root causes of these recruiting shortfalls. New 
authorities provided in the Fiscal Year 2007 National Defense 
Authorization Act, such as increased accession bonuses and college 
stipends, are expected to help mitigate medical officer recruiting 
challenges. Increased accession bonuses for Seal/Navy Special Warfare 
ratings and improved training techniques to reduce attrition will help 
us meet future requirements in our global war on terror intensive 
ratings.
    The Expeditionary Combat Readiness Center (ECRC), a command within 
the NECC, was established in fiscal year 2006 as the single process 
owner for the deployment of Navy Individual Augmentees (IA) and In-lieu 
of (ILO) forces, of which the Navy is currently fielding over 10,000 
sailors. The ECRC helps organize, process, train, equip, and deploy 
IAs, providing reach-back support and eventually helping them re-
integrate with their parent command. Additionally, all active duty 
sailors now process through one of four Navy Mobilization Processing 
Sites (NMPS) which has greatly enhanced consistency in processing 
between our Active and Reserve components. The ECRC NMPS are helping 
Navy process IAs while meeting a goal of 60 day advanced notification 
of deployment.
    Central to Navy's ability to sustain overall readiness, 
particularly in support of the global war on terror through the 
Individual Augmentee program, was, and is, the near-seamless 
integration of our Active and Reserve components. Since September 11, 
2001, over 42,000 Navy Reservists have been mobilized in support of the 
global war on terror (GWOT), representing over 80 percent of the total 
number of sailors deployed on the ground in theater. On any given day, 
over 20,000 citizen-sailors are on some type of Active Duty (AD) or 
Inactive Duty (ID) orders at their supported commands meeting global 
COCOM requirements. This number includes about 5,000 RC sailors 
mobilized in support of OIF and OEF. Additionally, we maintain the 
capacity to rapidly increase contingency support with more than 28,000 
RC sailors yet to be mobilized.
    Navy's Active/Reserve Integration program (ARI) aligns Reserve 
Component (RC) and Active Component (AC) personnel, training, equipment 
and policy to achieve unity of command. It leverages both budgetary and 
administrative efficiencies, as well as ensuring that the full weight 
of Navy resources and capabilities are under the authority of a single 
commander. Navy Reservists are aligned and fully integrated into their 
AC supported commands, and often conduct ``flex-drilling,'' putting 
multiple drill periods together to provide longer periods of 
availability when requested. This flexibility enables our Reserve 
sailors to better balance the schedules and demands of their civilian 
employers and families while achieving greater technical proficiency, 
more cohesive units and increased readiness.
    The Reserve Component is a critical enabler of the ``Sailor for 
Life'' concept that is central to our Strategy for our People. This 
approach to recruiting, retention, and professional development 
explores innovative opportunities for career on-ramps and off-ramps, 
providing fluidity between the active and reserve components. Last 
year, Navy continued to actively pursue incentives that will develop a 
more adaptable, better educated, and more highly skilled workforce 
while encouraging sailors to serve longer and more productively.
    Based on national demographic trends and the pace of globalization, 
it is clear we must build a more diverse Navy. According to the U.S. 
Census Bureau, by 2030 African Americans will comprise approximately 14 
percent of the population nationally, Hispanics 20 percent, and Asians/
Pacific Islanders/other 10 percent. Our officer corps currently 
consists of 81 percent non-minority and our enlisted ranks are 
approximately 52 percent non-minority. To ensure we have the best 
people, from the widest talent pool available, we must do a better job 
of recruiting and retaining our Nation's young minority students.
Current Status of Our Sailors and Civilians
    Perhaps no where else in our Navy is the pace of change more 
profoundly felt than in our manpower, personnel and training 
enterprise. It is here that the dynamics of globalization, cultural 
diversity, advancing technologies, generational differences, changes in 
the labor market, and declining numbers of hard science degrees among 
America's youth combine to make recruiting and retention more 
challenging than ever.
    Currently, only three in ten high school graduates meet the minimum 
criteria for military service, including academic/mental, physical, and 
social/legal requirements. With all four armed services, a great number 
of colleges and universities, as well as corporate America seeking 
talented and qualified high school graduates, competition is stiff.
    If we are to pace the security challenges of this century, our 
sailors and civilian workforce must evolve with our weapons systems. We 
must recruit today the young men and women who will be leading the 
fleet tomorrow. This will be a more specialized, technically capable, 
better educated, more culturally diverse and aware Navy than we have 
today. And it will be smaller.
    Unfortunately, the old model of recruiting and detailing in which 
we focused on simply filling specific requirements, is no longer 
sufficient. Today, and in the future, as we reduce the size of our 
force to align it with increasingly sophisticated systems in a complex 
security environment, we must strive to fit the right person to match 
the requirements. And as we eliminate excess infrastructure ashore and 
increase our global outreach and persistent presence forward, the ratio 
of sea to shore billets will become more balanced. In order to make the 
right fit for each individual sailor, we must be mindful of providing 
geographic stability, satisfying work, personal and professional 
development, and, to the degree possible, predictability in their 
future assignments.
    Admittedly, we could adapt more easily to the rapidly changing 
security environment if we could focus on a specific enemy or choose 
between effectiveness in irregular warfare or major combat operations--
between asymmetric or conventional threats. Unfortunately, we cannot 
choose; we must prepare for both.
    Nor can we make it the responsibility of each sailor to 
individually sort out priorities or determine how to accommodate the 
greater breadth of learning and the depth of experience the future 
requires. Rather, we must adjust our personnel strategies to account 
for the dynamic nature of the demands on our people while assuring a 
predictable availability of current capability and future capacity 
suitable to the needs of the Joint Force and the Nation.
    As we develop and build more efficient and automated ships, planes, 
and combat systems, personnel reductions are inevitable, and as crew 
sizes decrease, the skill level and specialization requirements 
increase. The Navy has reduced its active end strength by some 35,000 
sailors over the last 4 years. In 2003 our active component consisted 
of 375,700 sailors; at the end of fiscal year 2007 we will have 
340,700; and, by the end of fiscal year 2008 we will have 328,400. As 
we look ahead to the smaller, more capable ships entering service in 
the FYDP, we anticipate a stabilization of that trend at an active end-
strength between 320,000 and 325,000. We are also trimming our Reserve 
component which will have gone from a total of 87,800 in 2003 to a 
total of 71,300 at the end of fiscal year 2007 and 67,800 by the end of 
fiscal year 2008. But these reductions are more about shaping the right 
force, than simply trimming its size. Our priority, then, is to recruit 
some 45,000 active sailors with the right mix of diversity, education, 
and skill sets necessary to serve our fleet in 2009 and beyond.
    The Strategy for our People provides the framework through which we 
will size, shape and stabilize the Navy Total Force. The execution of 
Navy's overarching Strategy for Our People focuses on six goals: 
capability driven management; a competency based workforce; an 
effective total force; increased diversity; being competitive in the 
marketplace; and, being agile and cost efficient. The achievement of 
these goals depends on our ability to execute our programs of record. 
This strategy will satisfy future joint warfighting needs by 
attracting, retaining, and better educating sailors and civilians 
capable of adapting and responding to mission needs anytime, anyplace, 
anywhere. [Figure 2]



    Capability Driven Manpower.--Warfighting missions and operations 
have become more complex and uncertain. Navy work and workforce 
requirements are constantly shifting and evolving with changes in 
required operational, political and strategic capabilities. Basing 
manpower requirements on current and projected warfighting needs will 
ensure we meet today's operational requirements while continuously 
updating and balancing the workforce as needs change.
    A Competency Based Workforce.--The Force Planning Concept suggests 
the joint force must develop unique capabilities that fall outside the 
realm of conventional warfighting. This means an expansion of the Navy 
workforce requirements beyond traditional roles (e.g. Maritime Civil 
Affairs Group). Developing the workforce based on competencies allows 
the Navy to continuously evaluate critical skills and create a 
workforce well-matched to the needs of the warfighters. A competency-
based workforce also enables the Navy to determine where there is 
workforce commonality (or exclusivity) across a range of military 
operations so efficiencies can be realized.
    An Effective Total Force.--A constrained fiscal environment and 
workforce reductions demand our focus on applying the best resources to 
jobs as creatively as necessary. Viewing workforce components as one 
integrated team of sailors and civilians provides flexibility and 
reduces risk while better meeting warfighting needs. Leveraging the 
strength of the Total Force provides maximum flexibility in applying 
the right skill-set to a requirement in the most cost-efficient manner.
    Diversity.--The changing demographics of the American population 
and the diversity of our missions in the world demand Navy take 
proactive steps to ensure it has access to the full range of the 
Nation's talent. Leveraging the strength of the Nation's diversity 
creates an environment of excellence and continuous improvement, in 
which artificial barriers to achievement are removed and the 
contributions of all participants are valued.
    Being Competitive in the Marketplace.--The Navy is faced with 
recruiting and retention challenges in an era of increased military 
operations, a strong civilian economy, and a decreasing propensity for 
military service. To remain competitive with the other services, 
academic institutions, and corporate America the Navy must revise and 
update its personnel policies and programs so it is attractive to the 
desired talent base and successfully competes with the private sector 
for the best talent.
    Being Agile and Cost Efficient.--Expanding capability-driven 
workforce requirements and fiscal constraints require the Navy to 
deliver a more capable, versatile force. Agility means swiftly 
developing and implementing strategies, policies and processes to 
proactively meet evolving needs and challenges while focusing on the 
skills and abilities most in demand right now. Cost-efficient means we 
do this economically and without fiscal waste.
    Education is another area that will be treated as a strategic 
investment in our future. Our education strategy must reflect the 
technological basis of our core warfighting skills, the interdependence 
of joint and combined operations, the complexity of decision-making, 
and the sophisticated regional knowledge and grasp of political-
military issues expected of Navy leaders. The objective of the 
education strategy is to enhance overall performance excellence in 
current and future joint operations and operations support by 
addressing the individual needs of those who are currently serving as 
well as the future force.
Requirements to Develop 21st Century Leaders
    The challenges we face in shaping the force are considerable. We 
must deliver on the Strategy for our People.
    To develop 21st century leaders, we seek congressional support in 
the following areas:
  --Combat Casualty Care.--The objective of Navy's combat casualty care 
        is to maximize the continuum of quality care with lifesaving 
        interventions as close to the battle space as possible and with 
        no decrease in quality of service during rehabilitation and 
        recuperation. On the battlefield this includes forward surgical 
        access and capabilities that have resulted in dramatically 
        improved survival rates; diagnosis of mild/moderate traumatic 
        brain injury/closed-head injury; improved patient care during 
        transport; and, careful monitoring of mental health surveys 
        administered during and after deployment to combat areas. After 
        leaving the combat area, there is a 99.2 percent survival rate 
        once an injured sailor reaches a Navy medical treatment 
        facility. Navy supports the Secretary's ongoing review of 
        Walter Reed Army Medical Center and the National Naval Medical 
        Center at Bethesda and is currently and separately evaluating, 
        through our Inspector General, the material condition and 
        quality of service at each of our Navy medical treatment 
        facilities.
      Our highest priority is to win the global war on terror. Second 
        only to this is our determination to take care of those wounded 
        in this fight and their families.
  --Health Care Cost Control.--The Navy is committed to ensuring our 
        sailors and their families receive top quality health care 
        throughout the continuum of service. By 2009 our Navy will not 
        only be smaller, it will be leaner. Health care costs continue 
        to rise at a rate disproportionate to inflation. DOD TRICARE 
        costs have more than doubled in 5 years from $19 billion in 
        fiscal year 2001 to $38 billion in fiscal year 2006, and 
        analysts project these costs could reach $64 billion by 2015--
        more than 12 percent of DOD's anticipated budget (versus 8 
        percent today). Yet this problem extends beyond our active 
        duty, or even our reserve, health care costs. One of the 
        significant drivers of this increased cost is the TRICARE for 
        Life program developed for the 2001 National Defense 
        Authorization Act.
      We could not have anticipated the growing number of retirees and 
        their dependents, not yet Medicare eligible, who have chosen or 
        have been driven to switch from private/commercial health care 
        plans to TRICARE in order to better cope with rising health 
        care costs. Despite greatly increased utilization rates, 
        TRICARE premiums have not changed with inflation since the 
        program began in 1995, so that total beneficiary cost shares 
        have declined substantially--27 percent of total benefit cost 
        in 1995 while 12 percent in 2005. In fact, from fiscal year 
        2008 to fiscal year 2013, Navy's accrual costs for future 
        retirees alone are expected to increase by $4 billion (a 16 
        percent increase) despite a flattened and stabilized end 
        strength over that same period of time.
      There is no longer any tolerance for inefficiencies in our 
        manpower system and very little flexibility in our MPN account. 
        This has a carry-over effect by further pressurizing our 
        procurement accounts. We again urge Congress to implement the 
        initiatives and administrative actions that will restore 
        appropriate cost sharing relationships between beneficiaries 
        and the Department of Defense.
  --DOPMA Relief.--While Navy end strength is reduced and stabilizes 
        across the FYDP, the demand continues to increase for 
        experienced officers to fill joint requirements, core mission 
        areas and jobs related to the war on terror. Navy is already 
        operating at or near control grade limits imposed by title 10, 
        resulting in billet-grade suppression. Navy currently 
        suppresses 106 captain, 279 commander, and 199 lieutenant 
        commander billets at a lower pay grade (a total of 584 control 
        grade billets). If title 10 limits were increased by 5 percent, 
        Navy would be authorized to grow 131 captains, 304 commanders, 
        and 478 lieutenant commanders. Funding to current control-grade 
        requirements would give Navy the authority to grow 25 captains, 
        25 commanders, and 279 lieutenant commanders as future control-
        grade requirements emerge. This legislation is critical to 
        Navy's ability to carry out the National Military Strategy.
  --Special Pay and Incentives.--Navy will continue to seek funding for 
        special pay, recruitment and retention bonus to maintain the 
        right balance of skills and workforce.
  --Sailor for Life.--Navy requires assistance in providing sufficient 
        flexibility in transitioning between our active and reserve 
        components as we pursue our sailor for life initiatives.
  --Path to Jointness.--The Navy is committed to pursuing a path to 
        jointness--developing joint leaders both in the officer and 
        senior enlisted communities. We are pursuing initiatives that 
        will: establish the professional military education (PME) 
        requirements for the ranks of E-1 through 0-8 across our active 
        and reserve components; ensure that PME graduates are closely 
        tracked and assigned to billets that exploit their education 
        and accelerate their development as joint leaders; assess 
        policy effectiveness by tracking the number and percentages of 
        PME graduates assigned to career enhancing billets, and require 
        100 percent fill of Navy resident student billets at all Joint, 
        Service and foreign war colleges.
  --Tuition Assistance.--The Navy is committed to supporting its 
        sailors who choose education as a path to personal and 
        professional development. The Navy provides 100 percent 
        reimbursement up to $250 and $50 per semester hour for up to 16 
        credit hours. This is an increase from previous policy which 
        only allowed reimbursement up to 12 credit hours. Tuition 
        assistance is capped by DOD at $4,500 per person per fiscal 
        year.
  --National Security Personnel System (NSPS).--NSPS is a new personnel 
        system that will create new civil service rules for the 750,000 
        Defense Department civilian workers. It strengthens our ability 
        to accomplish the mission in an ever-changing national security 
        environment. NSPS accelerates efforts to create a total force 
        (active-duty military personnel, civilian personnel, Reserve, 
        Guard, and contractors), operating as one cohesive unit, with 
        each performing the work most suitable to their skills and the 
        Department's priorities. The Department of the Navy needs a 
        human resource system that appropriately recognizes and rewards 
        employees' performance and the contributions they make to the 
        mission. NSPS gives us better tools to attract and retain good 
        employees.
      Department of the Navy deployment of the remaining portions of 
        NSPS continues. Pay and performance provisions have so far been 
        deployed to approximately 4,000 employees and another 16,000 
        will be done by Spring, 2007. Further deployment of non-
        enjoined portions of the law will continue. Specifically, the 
        pay, performance, recruiting, workforce shaping and other 
        provisions of this new personnel system will be enacted 
        throughout 2007-2008.
                               conclusion
    Our Navy is truly a bargain, costing the taxpayers less than 1 
percent of the GDP. Though we are increasingly stretched, the Navy is 
in great shape and our people are remarkable. But as we strive to 
sustain combat readiness, build a fleet for the future and develop 21st 
century leaders we cannot allow ourselves to take this for granted. We 
must be mindful of the need to maintain a strong Navy now, with our 
ground forces stretched thin in Iraq and Afghanistan, but also after 
they return home.
    Our Nation depends upon a strong Navy with the global reach and 
persistent presence needed to provide deterrence, access, and 
assurance, while delivering lethal warfighting capacity whenever and 
wherever it is needed. Our Navy is fighting the global war on terror 
while at the same time providing a strategic reserve worldwide for the 
President and our Unified and Combatant Commanders. As we assess the 
risks associated with the dynamic security challenges that face us, we 
must ensure we have the Battle Force, the people, and the combat 
readiness we need to win our Nation's wars.
    We have put the rudder over, and I believe we have the course about 
right. Simply reacting to change is no longer an acceptable course of 
action if our Navy is to successfully wage asymmetric warfare and 
simultaneously deter regional and transnational threats: Two 
challenges, one fleet. Our Nation's security and prosperity depend upon 
keeping our shores safe and the world's maritime highways open and 
free.
      Annex I.--Programs and Initiatives to Achieve CNO Priorities
                        sustain combat readiness
    Programs and practices of particular interest include (listed in 
order of fiscal year 2008 dollar value):
Mobile User Objective System (MUOS)
    MUOS is the next generation Ultra High Frequency (UHF) narrowband 
satellite communications (SATCOM) system, replacing UHF Follow-On 
(UFO). MUOS supports communications-on-the-move to small and less 
stable platforms (handhelds, aircraft, missiles, UAVs, remote sensors) 
in stressed environments (foliage, urban environment, high sea state). 
UHF SATCOM provides critical command and control connectivity and is 
the essential common denominator for all forces. $828 million in fiscal 
year 2008 keeps MUOS funded to meet all threshold requirements and is 
on track to meet an Initial Operational Capability (IOC) in 2010.
NIMITZ-Class Refueling Complex Overhaul (RCOH)
    RCOH subjects Nimitz-class aircraft carriers to comprehensive 
modernization upgrades, maintenance work, and nuclear refueling to 
extend the service life of a Nimitz-class carrier out to approximately 
50 years, about 20 years longer than its originally planned service 
life. Execution of RCOH is required to maintain an 11 aircraft carrier 
force and provide naval tactical air with an overmatch capability 
against any potential adversary. A notional RCOH consists of 3.2 
million man-days and a 36-month execution period conducted at Northrop 
Grumman Newport News, Virginia facilities. While U.S.S. Carl Vinson 
(CVN 70) completes RCOH in fiscal year 2008-2009, the fiscal year 2008 
Ship Construction-Navy (SCN) funding of $297 million primarily supports 
the advance funding and sequencing of follow-on overhauls for CVNs 71-
73.
COBRA JUDY Replacement (CJR)
    $133 million in CJR funds the acquisition of a single ship-based 
radar suite for world-wide technical data collection against ballistic 
missiles in flight. This unit will replace the current Cobra Judy/USNS 
Observation Island, which is due to leave service in 2012. Upon 
achieving initial operating capability, Navy will transfer the CJR to 
the U.S. Air Force for operation and maintenance. The CJR program has 
entered production stage.
Cooperative Engagement Capability (CEC)
    CEC is an advanced sensor netting system enabling real-time 
exchange of fire-control quality data between Battle Force units. CEC 
provides the integrated, precision air defense picture required to 
counter the increased agility, speed, maneuverability, and advanced 
design of cruise missiles, manned aircraft; and in the future, tactical 
ballistic missiles. Funding requested for fiscal year 2008 is $123 
million.
    CEC's acquisition strategy implements open architecture based 
hardware with re-hosted existing software. A critical element is the 
P3I hardware that reduces cost, weight, cooling, and power 
requirements. The Integrated Architecture Behavior Model (IABM) will be 
implemented as a host combat system software upgrade replacing the 
cooperative engagement processor functionality enabling joint 
interoperability with common track management across the services.
Distributed Common Ground/Surface Systems (DCGS)
    DCGS-N is the Navy's Intelligence, Surveillance, Reconnaissance, 
and Targeting (ISR&T) system. Funded at $107 million in fiscal year 
2008, DCGS-N will support the new Maritime Headquarters/Maritime 
Operations Center (MHQ/MOC). DCGS-N will receive and process multiple 
data streams from various ISR sources to provide time-critical aim 
points and intelligence products. It will enhance the warfighter's 
Common Operational Picture (COP) and Maritime Domain Awareness (MDA).
Deployable Joint Command and Control (DJC2)
    DJC2 is a Secretary of Defense and Chairman of the Joint Chiefs of 
Staff priority transformation initiative providing Combatant Commanders 
(COCOMs) with a standardized, deployable, and scalable Joint C2 
headquarters capability tailored to support Joint Task Force (JTF) 
operations. DJC2 enables a COCOM to rapidly deploy and activate a JTF 
headquarters equipped with a common C2 package with which to plan, 
control, coordinate, execute, and assess operations across the spectrum 
of conflict and domestic disaster relief missions. This budget request 
of $31 million provides operations and sustainment for the six existing 
systems and continued development efforts.
Navy Special Warfare (NSW) Support
    NSW programs provide critical service common support to eight Seal 
teams, two Seal delivery vehicle teams, three special boat teams and 
five NSW groups.
    During fiscal years 2007 and 2008, six pre-positioned operational 
stocks will be procured and staged, hundreds of common small arms, 
weapons mounts and visual augmentation systems will be provided to NSW 
combat elements, up to 20 standard boats will continue to replace an 
aging fleet of 61 NSW training support craft and 4 Navy-mandated 
management support systems will be funded. A total of $21 million in 
various procurement and operations support accounts is dedicated in 
fiscal year 2008.
Navy Computer Network Attack (CNA)
    Navy Computer Network Attack (CNA) develops force structure for 
operations in the cyberspace environment. This is the programmatic 
continuation of Navy Cyber Attack Team (NCAT) initiative which is 
endorsed by several Combatant Commanders. Program focus is on unique 
capabilities to address Navy warfighting gaps. Our $11 million fiscal 
year 2008 investment is required to develop the capability to access 
adversary networks and enable Information Operations (IO) in asymmetric 
warfare.
Marine Mammal Research/Sound in Water Effects
    The Navy is committed to following proactive compliance strategies 
to meet legal requirements and to identify and fund marine mammal 
research requirements--especially related to potential effects of mid-
frequency active sonar. In support, Navy has requested $10 million in 
funding for these efforts in fiscal year 2008. Compliance with Marine 
Mammal Protection Act (MMPA), Endangered Species Act (ESA), Coastal 
Zone Management Act (CMZA), and National Environmental Policy Act 
(NEPA) related to potential effects to marine animals from sound in the 
water are dependent on filling gaps in scientific data and continued 
research on acoustic criteria. However, increasing pressures related to 
restricting the use of active sonar are adversely impacting Navy 
training and readiness. Clearer, science-based standards are needed in 
future MMPA amendments to ensure environmental protection while not 
endangering our sailors.
Forward Deployed Naval Forces (Japan)
    U.S.S. George Washington (CVN 73) will replace U.S.S. Kitty Hawk 
(CV 63) as the forward deployed aircraft carrier in Yokosuka, Japan in 
2008. The move represents a strong and continuing commitment to the 
security of the Asian Pacific region and our alliance.
    George Washington will be the first nuclear aircraft carrier to 
join the Navy's permanently forward deployed naval forces (FDNF), 
replacing the conventionally powered Kitty Hawk that will retire after 
47 years of superb service. Funding of $9 million in fiscal year 2008 
supports the final of several years investments for George Washington's 
anticipated 2008 FDNF arrival.
TRIDENT
    TRIDENT is maritime intelligence production capability within the 
Office of Naval Intelligence providing tailored, focused, timely 
intelligence support to Naval Special Warfare (NSW) and other joint 
special operations forces operating in the maritime arena. For a 
relatively small investment in fiscal year 2008 of $9 million, TRIDENT 
production directly supports the global war on terror and is a response 
to ongoing initiatives to improve intelligence support to NSW. TRIDENT 
deployed its initial two Tactical Intelligence Support Teams (TIST) in 
support of Naval Special Warfare in the Spring and Fall of 2006. They 
are currently providing both forward deployed and reach back support to 
NSW forces.
Undersea Warfare Training Range (USWTR)
    The proposed USWTR is a 500-square nautical mile instrumented 
underwater training range in shallow littoral waters on each coast. 
USWTR will support undersea warfare (USW) training exercises for the 
Atlantic and Pacific Fleet Forces. Undersea hydrophone sensors will 
provide a suite to deliver real time tracking and a record of 
participants' activities used to evaluate tactics, proficiency and 
undersea warfare combat readiness. The instrumented area would be 
connected to shore via a single trunk cable.
    Pending signature of the environmental Record of Decision (ROD) for 
the East Coast USWTR in April 2008, the Navy will commence hardware 
procurement and installation in fiscal year 2008. Supporting this, Navy 
has requested $7 million in fiscal year 2008. The West Coast ROD is 
scheduled for signature in September 2008. The shallow water ranges 
planned for both coasts will be completed in fiscal year 2013.
Tactical Aircraft (TACAIR) Integration (TAI)
    Our TACAIR Integration initiative merges Navy and Marine Corps 
Tactical Aviation into a seamless naval aviation force at sea and 
ashore. This is an organizational change that ``buys'' increased combat 
capability without requiring additional investment. Naval aviation 
force projection is accomplished by increased integration of Marine 
tactical squadrons into Carrier Air Wings and Navy squadrons into 
Marine Aircraft Wings. Successful integration, also leveraging the 
common characteristics of the F/A-18s, further enhances core combat 
capabilities providing a more potent, cohesive, smaller and affordable 
fighting force.
                      build a fleet for the future
    Programs and practices of particular interest (listed in order of 
fiscal year 2008 dollar value):
RDT&E Development and Demonstration Funds
    Navy's $15.9 billion investment in various technology, component, 
and system development funds, as well as our operational development 
and testing programs provide a balanced portfolio. Not only do they 
ensure successful development of programs for our fleet for the future, 
they also leverage the fleet, systems commands, warfare centers, and 
others to align wargaming, experimentation, and exercises in developing 
supporting concepts and technologies.
DDG 1000
    This multi-mission surface combatant, tailored for land attack and 
littoral dominance, will provide independent forward presence and 
deterrence and operate as an integral part of joint and combined 
expeditionary forces. DDG 1000 will capitalize on reduced signatures 
and enhanced survivability to maintain persistent presence in the 
littoral. The program provides the baseline for spiral development to 
support future surface ships. Our fiscal year 2008 request is for $3.3 
billion in shipbuilding and research funds.
    With the Advanced Gun System (AGS) and associated Long Range Land 
Attack Projectile (LRLAP) DDG 1000 will provide volume and precision 
fires in support of joint forces ashore. A Global Positioning System 
(GPS) guided, 155 millimeter round, LRLAP will provide all weather 
fires capability out to 83 nautical miles. Its Dual Band Radar 
represents a significant increase in air defense capability in the 
cluttered littoral environment. Investment in open architecture and 
reduced manning will provide the Navy life cycle cost savings and 
technology that can be retrofit to legacy ships.
Facilities Recapitalization and Sustainment
    Facilities recapitalization is comprised of modernization and 
restoration. Modernization counters obsolescence by renewing a facility 
to new standards or functions without changing the fundamental facility 
size. Restoration includes efforts to restore degraded facilities to 
working condition beyond design service life or to fix damage from 
natural disaster, fire, etc. Restoration and modernization funding in 
fiscal year 2008 is requested at $2.0 billion.
    Facilities sustainment includes those maintenance and repair 
activities necessary to keep facilities in working order through their 
design service life.
    Navy's sustainment rate, and fiscal year funding request of $1.1 
billion, is at the level at which facilities can be maintained and 
still remain mission capable. Navy's intent is to aggressively scrub 
requirements, reduce facilities footprint and drive down costs. Our 
goal is to provide the resources required to execute wartime missions. 
Our planning and footprint reduction initiatives are intended to ensure 
that adequate facilities are available to support our mission 
requirements.
CVN 21
    The CVN 21 program is designing the next generation aircraft 
carrier to replace U.S.S. Enterprise (CVN 65) and Nimitz-class aircraft 
carriers. CVN 78-class ships will provide improved warfighting 
capability and increased quality of life for our sailors at reduced 
acquisition and life cycle costs. $2.8 billion in shipbuilding funds 
for fiscal year 2008 supports acquisition of U.S.S. Gerald R. Ford (CVN 
78), the lead ship of the class, scheduled for delivery in late fiscal 
year 2015. Additionally, the program has $232 million in research and 
development supporting work on the Electromagnetic Aircraft Launch 
System and other warfighting capability improvements.
F-35 Joint Strike Fighter (JSF)
    F-35 is a joint cooperative program to develop and field family of 
affordable multi-mission strike fighter aircraft using mature/
demonstrated 21st century technology to meet warfighter needs of the 
Navy, Marines, Air Force, and international partners including the 
United Kingdom, Italy, Netherlands, Denmark, Turkey, Norway, Australia, 
and Canada. Navy's fiscal year 2008 $1.2 billion in procurement buys 
six short take-off and landing variants. An additional $1.7 billion in 
research and development continues aircraft and engine development.
Virginia Class Fast Attack Nuclear Submarine (SSN)
    Navy needs to maintain an SSN force structure to meet current 
operational requirements, prosecute the global war on terror, and face 
any potential future threats. The Virginia class emphasizes 
affordability and optimizes performance for undersea superiority in 
littoral and open ocean missions.
    Lead ship operational performance exceeded expectations. Follow-on 
submarine performance has been even better:
  --U.S.S. Texas (SSN 775) INSURV trial was best performance by the 
        second SSN of any class.
  --Third ship (Hawaii, SSN 776) was the most complete submarine ever 
        at launch (greater than 90 percent complete), had the best 
        INSURV trial of the class, and was delivered on the original 
        contract delivery date.
    $2.6 billion in fiscal year 2008 procures one submarine. 
Additionally, the budget requests $137 million for technical insertions 
and cost reduction developments. Navy is working closely with industry 
to bring the cost per hull down to $2 billion (in fiscal year 2005 
dollars) and increase the build rate to two ships/year starting in 
fiscal year 2012. Authorization of MYP will help facilitate this. This 
will help mitigate future force level deficiencies and achieve cost 
reduction goals through Economic Order Quantity (EOQ) savings and 
better distributed overhead costs.
F/A-18E/F Super Hornet
    The Navy's next generation, multi-mission Strike Fighter replaces 
aging F-14s, older model F/A-18s, and assumes the S-3 aircraft carrier-
based aerial refueling role. F/A-18E/F provides a 40 percent increase 
in combat radius, 50 percent increase in endurance, 25 percent greater 
weapons payload, three times more ordnance bring-back, and is five 
times more survivable than F/A-18C models. Approximately 55 percent of 
the total procurement objective has been delivered (254 of 460). F/A-
18E/F is in full rate production under a second 5-year multi-year 
contract (fiscal years 2005-2009). $2.3 billion in fiscal year 2008 
procures 24 aircraft as part of this contract.
MV-22B Osprey
    MV-22 Osprey is the Marine Corps medium-lift assault support 
aircraft being procured to replace legacy CH-46Es and CH-53Ds. Current 
operational projections hold CH-46Es in service through fiscal year 
2018, and CH-53Ds through fiscal year 2013. The CH-46Es are playing a 
critical role in the war on terror, flying more than four times their 
peacetime utilization rate making delivery of the MV-22 even more 
critical. The MV-22's improved readiness, survivability and 
transformational capability (twice the speed, three times the payload 
and six times range of the airframes it is replacing) will vastly 
improve operational reach and capability of deployed forces. The 
aircraft is approved for full rate production and enters a 
congressionally approved joint 5-year, multi-year procurement in fiscal 
year 2008 with $2.0 billion procuring 21 aircraft. The total Marine 
requirement is 360 MV-22s; Navy 48 MV-22s; SOCOM 50 CV-22s.
DON Science & Technology (S&T)
    The Department of the Navy S&T supports Navy/Marine strategy and 
guides the S&T investment portfolio to meet the future needs of the 
Navy, the Marine Corps, and Combatant Commands. The fiscal year 2008 
budget of $1.7 billion is a balanced portfolio comprised of discovery 
and invention, leap-ahead innovations, acquisition enablers, quick 
reaction S&T and Defense Department partnerships. A long term strategy 
will help balance future risks.
EA-18G Growler
    The Growler is the Navy's replacement for the EA-6B. Inventory 
objective is 84 aircraft for test, fleet replacement squadron, 
attrition, pipeline and 10 operational carrier airwing squadrons to 
provide the Navy's carrier-based Airborne Electronic Attack (AEA) 
capability. The program is on schedule and budget. All Key Performance 
Parameter (KPP) and Technical Performance Measure (TPM) thresholds are 
being met or exceeded. Program achieved first flight in August 2006; 
one month ahead of schedule. $1.6 billion supports development and 
procurement of 18 aircraft in fiscal year 2008.
MH-60R/S Multi-Mission Helicopter
    The MH-60R is a cornerstone of the Navy's Helicopter Concept of 
Operations (CONOPS), which reduces from six to two the helicopter 
variants in use today. The MH-60R Multi-Mission Helicopter program will 
replace the surface combatant-based SH-60B, carrier-based SH-60F, and 
anti-surface capabilities of the S-3 with a newly manufactured airframe 
and enhanced mission systems. Sea control missions include undersea and 
surface warfare. The MH-60R provides forward-deployed capabilities to 
defeat area-denial strategies, allowing joint forces to project and 
sustain power. Full rate production was approved in March 2006. $998 
million in fiscal year 2008 procures 27 aircraft.
    The MH-60S is designed to support carrier and expeditionary strike 
groups in combat logistics, search and rescue, vertical replenishment, 
anti-surface warfare, airborne mine countermeasures, combat search and 
rescue, and naval special warfare mission areas. This program is in 
production. This fiscal year, block 2 of the program will see the IOC 
of the first of five Organic Airborne Mine Countermeasures (OAMCM) 
systems (AQS-20). The remaining four airborne mine countermeasure 
systems will IOC between fiscal years 2008-2010. An armed helicopter 
capability is also expected to enter IOC this year. $504 million in 
fiscal year 2008 procures 18 aircraft.
LPD 17
    LPD 17 functionally replaces LPD 4, LSD 36, LKA 113, and LST 1179 
classes of amphibious ships for embarking, transporting and landing 
elements of a Marine landing force in an assault by helicopters, 
landing craft, amphibious vehicles, or by a combination of these 
methods. $1.5 billion in this budget's shipbuilding request procures 
LPD 25.
LHA(R)
    LHA(R) replaces four aging LHA Class ships which are reaching the 
end of their administratively extended service lives. LHA(R) Flight 0 
is a modified LHD 1 Class variant designed to accommodate aircraft in 
the future USMC Aircraft Combat Element (ACE) including JSF and MV-22. 
The fiscal year 2008 request for $1.4 billion supports procurement of 
the lead ship in the class.
Littoral Combat Ship (LCS)
    Designed to be fast and agile, LCS will be a networked surface 
combatant with capabilities optimized to assure naval and joint force 
access into contested littoral regions. LCS will operate with focused-
mission packages that deploy manned and unmanned vehicles to execute a 
variety of missions, including littoral anti-submarine warfare (ASW), 
anti-surface warfare (SUW) and mine countermeasures (MCM). LCS will 
possess inherent capabilities including homeland defense, Maritime 
Interception Operations (MIO) and Special Operation Forces support. LCS 
will employ a blue-gold multi-crewing concept for the early ships. The 
crews will be at a ``trained to qualify'' level before reporting to the 
ship, reducing qualification time compared to other ships.
    The Navy has recently identified significant cost increases for the 
lead ship in the LCS Class (Lockheed Martin variant). A series of 
increases in the contractor estimated cost of completion, the most 
recent in December, highlighted the problem and initiated a thorough 
analysis by both Navy and industry. After nearly 2 months of in-depth 
study, the Navy has revalidated the warfighting requirement and 
developed a restructured program plan for the LCS that improves 
management oversight, implements more strict cost controls, 
incorporates selective contract restructuring, and ensures delivery 
within a realistic schedule.
    Construction of LCS Hull #3 (Lockheed Martin) will be resumed under 
revised contract terms that rebalance cost growth risk between 
government and industry. Construction on LCS Hull #4 (General Dynamics) 
will continue as long as costs remain defined and manageable. This plan 
will provide for best value to the Navy for the completion of the first 
four LCS ships, procurement of existing designs in fiscal years 2008-
2009 to fill critical warfighting gaps, and establishment of a sound 
framework for transition to a single design in fiscal year 2010. The 
Navy will work closely with Congress on reprogramming actions necessary 
to bring this program forward.
P-8A Multi-mission Maritime Aircraft (MMA)
    The P-8A replaces the P-3C Orion on a less than 1:1 basis. This 
aircraft provides lethality against submarine threats, broad area 
maritime and littoral armed anti-submarine warfare patrol, anti-surface 
warfare, and intelligence surveillance reconnaissance. The P-8A is the 
only platform with this operationally agile capability set. It fills 
Combatant Commander requirements in major combat and shaping 
operations, as well as the war on terror and homeland defense. The 
program has been executed on time and on budget. Preliminary design 
review has successfully completed and is now in the detailed design 
phase. $880 million in research and development funds is included in 
the fiscal year 2008 budget. Initial Operational Capability (IOC) is 
planned in fiscal year 2013.
E-2D Advanced Hawkeye
    The E-2D Advanced Hawkeye (AHE) program will modernize the current 
E-2C weapons system by replacing the radar and other aircraft system 
components to improve nearly every facet of tactical air operations. 
The modernized weapons system will be designed to maintain open ocean 
capability while adding transformational littoral surveillance and 
theater air and missile defense capabilities against emerging air 
threats in the high clutter, electro-magnetic interference, and jamming 
environments. $866 million in fiscal year 2008 continues development 
work and procures three pilot production aircraft. The AHE will be one 
of the four pillars contributing to Naval Integrated Fire Control-
Counter Air. The AHE program plans to build 75 new aircraft.
ASW Programs
    The Navy continues to pursue research and development of 
Distributed Netted Sensors (DNS); low-cost, rapidly deployable, 
autonomous sensors that can be fielded in sufficient numbers to provide 
the cueing and detection of adversary submarines far from the sea base. 
Examples of our fiscal year 2008 request of $24 million in these 
technologies include:
  --Reliable Acoustic Path, Vertical Line Array (RAP VLA).--A passive-
        only distributed system exploiting the deep water propagation 
        phenomena. In essence, a towed array vertically suspended in 
        the water column.
  --Deep Water Active Distributed System (DWADS).--An active sonar 
        distributed system optimized for use in deep water.
  --Deployable Autonomous Distributed System (DADS).--A shallow water 
        array, using both acoustic and non-acoustic sensors to detect 
        passing submarines. DADS will test at sea in fiscal year 2008.
  --Littoral ASW Multi-static Project (LAMP).--A shallow water 
        distributed buoy system employing the advanced principles of 
        multi-static (many receivers, one/few active sources) sonar 
        propagation.
    Further developing the Undersea Warfare Decision Support System 
(USW-DSS) will leverage existing data-links, networks, and sensor data 
from air, surface, and sub-surface platforms and integrate them into a 
common ASW operating picture with tactical decision aids to better 
plan, conduct, and coordinate ASW operations. We are requesting $23 
million in fiscal year 2008 towards this system.
    To engage the threat, our forces must have the means to attack 
effectively the first time, every time. The Navy has continued a robust 
weapons development investment plan including $293 million requested in 
the fiscal year 2008 on such capabilities as:
  --High-Altitude ASW Weapons Concept (HAAWC).--Current maritime patrol 
        aircraft must descend to very low altitude to place ASW weapons 
        on target, often losing communications with the sonobuoy (or 
        distributed sensor) field. This allows the aircraft to remain 
        at high altitude and conduct an effective attack while 
        simultaneously enabling the crew to maintain and exploit the 
        full sensor field in the process. This capability will be 
        particularly important in concert with the new jet-powered P-8A 
        MMA. A test is scheduled for May 2007.
  --Common Very Lightweight Torpedo (CVLWT).--The Navy is developing a 
        6.75 inch torpedo suitable for use in the surface ship and 
        submarine anti-torpedo torpedo defense, and the offensive 
        Compact Rapid Attack Weapon (CRAW) intended for the developing 
        manned and unmanned aerial vehicles.
    Finally, to defend our forces, key defensive technologies being 
pursued include:
  --Surface Ship Torpedo Defense (SSTD).--Program delivers near term 
        and far term torpedo defense. The planned fiscal year 2008 $16 
        million R&D investment supports ongoing development of the 6\3/
        4\ inch Common Very Lightweight Torpedo (CVLWT) which supports 
        both the Anti-Torpedo Torpedo (ATT) and the Compact Rapid 
        Attack Weapon (CRAW). Also, several capability upgrades to the 
        AN/SLQ-25A (NIXIE) are being incorporated to improve both 
        acoustic and non-acoustic system performance to counter current 
        threat torpedoes. These enhancements also support their use in 
        the littorals and are scheduled to complete in fiscal year 
        2009. The AN/WSQ-11 System uses active and passive acoustic 
        sensors for an improved torpedo Detection Classification and 
        Localization (DCL) capability, and a hard kill Anti-Torpedo 
        Torpedo (ATT) to produce an effective, automated and layered 
        system to counter future torpedo threats. DCL improvements 
        include lower false alarm rates and better range determination.
  --Aircraft Carrier Periscope Detection Radar (CVN PDR).--An automated 
        periscope detection and discrimination system aboard aircraft 
        carriers. System moves from a laboratory model, currently 
        installed on U.S.S. Kitty Hawk, to 12 units (1 per carrier, 1 
        ashore) by fiscal year 2012. Fiscal year 2008 funds of $7 
        million support this effort.
    Platform Sensor Improvements.--Against the quieter, modern diesel-
electric submarines, work continues on both towed arrays and hull 
mounted sonars. Our $410 million request in fiscal year 2008 includes 
work on the following:
  --TB-33 thin-line towed array upgrades to forward deployed SSN's 
        provides near term improvement in submarine towed array 
        reliability over existing TB-29 arrays. TB-33 upgrades are 
        being accelerated to Guam based SSN's.
  --Continued development of twin-line thin line (TLTL) and Vector-
        Sensor Towed Arrays (VSTA) are under development for mid-far 
        term capability gaps. TLTL enables longer detection ranges/
        contact holding times, improves localization, and 
        classification of contacts. VSTA is an Office of Naval Research 
        project that would provide TLTL capability on a single array 
        while still obviating the bearing ambiguity issue inherent in 
        traditional single line arrays.
Modernization
    Achieving full service life from the fleet is imperative. 
Modernization of the existing force is a critical enabler for a 
balanced fleet. Platforms must remain tactically capable and 
structurally sound for the duration of their designed service life.
Cruiser (Mod)
    AEGIS Cruiser Modernization is key to achieving the 313 ship force 
structure. A large portion of surface force modernization (including 
industrial base stability) is resident in this modernization program. 
$403 million across several appropriations in fiscal year 2008 supports 
this program.
    A comprehensive Mission Life Extension (MLE) will achieve the 
ship's expected service life of 35+ years and includes the all electric 
modification (replacing steam systems), SMARTSHIP technologies, Hull 
Mechanical & Electrical (HM&E) system upgrades, and a series of 
alterations designed to restore displacement and stability margins, 
correct hull and deck house cracking and improve quality of life and 
service on board.
Destroyer (Mod)
    The DDG 51 modernization program is a comprehensive 62 ship program 
designed to modernize HM&E and combat systems. These upgrades support 
reductions in manpower and operating costs, achieve 35+ year service 
life, and allows the class to pace the projected threat well into the 
21st century. Our fiscal year 2008 request contains $159 million for 
this effort.
    Key upgrades to the DDG 51 AEGIS Weapon System (AWS) include an 
open architecture computing environment, along with an upgrade of the 
SPY Radar signal processor, addition of BMD capability, Evolved Sea 
Sparrow Missile (ESSM), improved USW sensor, Naval Integrated Fire 
Control-Counter Air (NIFC-CA) and additional other combat systems 
upgrades.
Lewis & Clark Dry Cargo/Ammunition Ship (T-AKE)
    T-AKE is intended to replace aging combat stores (T-AFS) and 
ammunition (T-AE) ships. Working in concert with an oiler (T-AO), the 
team can perform a ``substitute'' station ship mission to allow the 
retirement of four fast combat support ships (AOE 1 Class). $456 
million in fiscal year 2008 supports funding the 11th T-AKE (final 
price will be determined through negotiations expected to be completed 
during the summer 2007). Lead ship was delivered in June 2006 and has 
completed operational evaluation (OPEVAL).
CH-53K
    The CH-53K Heavy Lift Replacement (HLR) is the follow on to the 
Marine Corps CH-53E Heavy Lift Helicopter. The CH-53K will more than 
double the current CH-53E lift capability under the same environmental 
conditions. The CH-53K's increased capabilities are essential to 
meeting the Marine Expeditionary Brigade of 2015 Ship-to-Objective 
Maneuver vision. Fiscal year 2008 research and development funds of 
$417 million supports major systems improvements of the new helicopter 
including: larger and more capable engines, expanded gross weight 
airframe, better drive train, advanced composite rotor blades, modern 
interoperable cockpit, external and internal cargo handling systems, 
and survivability enhancements.
Tomahawk/Tactical Tomahawk (TACTOM)
    Tomahawk and Tactical Tomahawk missiles provide precision, all 
weather, and deep strike capabilities. Tactical Tomahawk provides more 
flexibility and responsiveness at a significantly reduced life cycle 
cost than previous versions and includes flex-targeting, in-flight 
retargeting, and 2-way communications with the missile.
    Our $383 million in this years request sustains the Tomahawk Block 
IV full-rate, multi-year procurement contract for fiscal years 2004-
2008, yielding approximately 2,100 missiles. The projected inventory 
will accommodate campaign analysis requirements given historical usage 
data and acceptable risk.
F/A-18A/B/C/D Hornet
    The F/A-18 Hornet is naval aviation's principal strike-fighter. 
This state-of-the-art, multi-mission aircraft serves the Navy and 
Marine Corps, as well as the armed forces of seven allied countries. 
Its reliability and precision weapons delivery capability are 
documented frequently in news reports from the front lines. $331 
million in fiscal year 2008 supports improvements to the original 
Hornet A/B/C/D variants provide significant warfighting enhancements to 
the fleet. These improvements include the Global Positioning System 
(GPS), Multi-functional Information Distribution System (MIDS), AIM-9X 
Sidewinder Missile/Joint Helmet-Mounted Cueing System (JHMCS), Combined 
Interrogator Transponder, Joint Direct Attack Munition/Joint Stand-Off 
Weapon delivery capability, and a Digital Communication System (DCS) 
for close-air support. Through these improvement and upgrades, the 
aircraft's weapons, communications, navigation, and defensive 
electronic countermeasure systems have been kept combat relevant.
    Although the F/A-18A/B/C/D are out of production, the existing 
inventory of 667 Navy and Marine Corps aircraft will continue to 
comprise half of the carrier strike force until 2013, and are scheduled 
to remain in the naval aviation inventory through 2022.
CG(X)
    CG(X) is envisioned to be a highly capable surface combatant 
tailored for Joint Air and Missile Defense and Joint Air Control 
Operations. CG(X) will provide airspace dominance and protection to all 
joint forces operating in the sea base. Initial Operational Capability 
(IOC) is 2019. $227 million in research and development for fiscal year 
2008 supports CG(X) development. The ongoing analysis of alternatives 
is considering various propulsion options. CG(X) will replace the CG-47 
Aegis class and improve the fleet's air and missile defense 
capabilities against an advancing threat--particularly ballistic 
missiles.
Standard Missile-6 (SM-6)
    The Navy's next-generation extended range, anti-air warfare 
interceptor is the SM-6. Supporting both legacy and future ships, SM-6 
with its active-seeker technology will defeat anticipated theater air 
and missile defense warfare threats well into the next decade. The 
combined SM-6 Design Readiness Review /Critical Design Review was 
completed 3 months ahead of schedule with SM-6 successfully meeting all 
entrance and exit criteria. Ahead of schedule and on cost targets, our 
fiscal year 2008 budget plan of $207 million will keep this development 
effort on track for initial operational capability in fiscal year 2010.
Conventional TRIDENT Modification (CTM)
    CTM transforms the submarine launched, nuclear armed TRIDENT II 
(D5) missile system into a conventional offensive precision strike 
weapon with global range. This new capability is required to defeat a 
diverse set of unpredictable threats, such as Weapons of Mass 
Destruction (WMD), at short notice, without the requirement for a 
forward-deployed or visible presence, without risk to U.S. forces, and 
with little or no warning prior to strike. $175 million is included in 
the fiscal year 2008 request. The program and related policy issues are 
currently under review by the Office of the Secretary of Defense as 
part of the New Strategic Triad capability package.
Navy Unmanned Combat Air System (UCAS)
    The former J-UCAS program transferred from Air Force to Navy lead. 
The Navy UCAS will develop and demonstrate low observable (LO), 
unmanned, air vehicle suitability to operate from aircraft carriers in 
support of persistent, penetrating surveillance, and strike capability 
in high threat areas. $162 million in fiscal year 2008 research and 
development funds advance the programs objectives.
Joint Standoff Weapon (JSOW)
    JSOW is a low-cost, survivable, air-to-ground glide weapon designed 
to attack a variety of targets in day/night and adverse weather 
conditions from ranges up to 63 nautical miles. All variants employ a 
kinematically efficient, low-signature airframe with GPS/INS guidance 
capability. JSOW is additionally equipped with an imaging-infrared 
seeker, Autonomous Targeting Acquisition (ATA) software, and a multi-
stage Broach warhead to attack both hard and soft targets with 
precision accuracy. The $156 million in fiscal year 2008 funding 
continues production to build to our inventory requirements. A Block 
III improvement effort will add anti-ship and moving target capability 
in fiscal year 2009.
Ohio-Class SSGN
    Ohio-Class SSGN is a key transformational capability that can 
covertly employ both strike and Special Operations Forces (SOF) 
capabilities. Ohio (SSGN 726) and Florida (SSGN 728) were delivered 
from conversion in December 2005 and April 2006 respectively and are 
conducting modernization, certification, and acceptance evaluation 
testing prior to deployment. Georgia (SSGN 729) is in conversion at 
Norfolk Naval Shipyard with delivery scheduled for September 2007. The 
$134 million in the fiscal year 2008 budget request is primarily for 
testing, minor engineering changes, and to procure the final 
replacement reactor core.
Broad Area Maritime Surveillance (BAMS) Unmanned Aircraft System (UAS)
    BAMS is a post-9/11, Secretary of the Navy directed 
transformational initiative. $117 million in research and development 
funding continues Navy's commitment to provide a persistent (24 hours/
day, 7 days/week), multi-sensor (radar, electro-optical/infra red, 
electronic support measures) maritime intelligence, surveillance, and 
reconnaissance capability with worldwide access. Along with multi-
mission aircraft, BAMS is integral to the Navy's airborne intelligence, 
surveillance, and reconnaissance (ISR) recapitalization strategy. BAMS 
is envisioned to be forward deployed, land-based, autonomously operated 
and unarmed. It will sustain the maritime Common Operational Picture 
(COP) and operate under the cognizance of the Maritime Patrol and 
Reconnaissance Force.
Long Range Land Attack Projectile (LRLAP)
    Long Range Land Attack Projectile (LRLAP) is the primary munition 
for the DDG 1000 Advanced Gun System (AGS). AGS and LRLAP will provide 
Naval Surface Fire Support (NSFS) to forces ashore during all phases of 
the land battle. All program flight test objectives have been met. Six 
of nine guided test flights have been successfully completed. Test 
failures have been isolated and corrective actions implemented with 
successful re-tests fired.
    $74 million in fiscal year 2008 supports continued development. 
Current ammunition inventory estimates are based on conventional 
ammunition calculation methods. A pending ammo study will account for 
increased LRLAP range and precision to better inform decisions 
regarding procurement schedule and total inventory objective.
MQ-8B Fire Scout Vertical Takeoff UAV (VTUAV)
    The Navy Vertical Takeoff and Landing Tactical UAV (VTUAV) is 
designed to operate from all air capable ships, carry modular mission 
payloads, and operate using the Tactical Control System (TCS) and 
Tactical Common Data Link (TCDL). VTUAV will provide day/night real 
time reconnaissance, surveillance and target acquisition capabilities 
as well as communications relay and battlefield management to support 
the Littoral Combat Ship (LCS) core mission areas of anti-submarine, 
mine, and anti-surface warfare. It will be part of the LCS mission 
module packages supporting these warfare missions. $71 million in 
development and procurement funding supports engineering manufacturing 
development, operational testing and achievement of initial operational 
capability in fiscal year 2008.
Maritime Prepositioning Force (MPF) (Future)
    $68 million in research and development in fiscal year 2008 
supports our first year of procurement with (4) MPF(F) ships in fiscal 
year 2009. MPF(F) provides a scalable, joint seabased capability for 
the closure, arrival, assembly, and employment of up to the Marine 
Expeditionary Brigade of 2015 sized force. It will also support the 
sustainment and reconstitution of forces when required. MPF(F) is 
envisioned for frequent utility in lesser contingency operations, and 
when coupled with carrier or expeditionary strike groups, will provide 
the Nation a rapid response capability in anti-access or denial 
situations.
Direct Attack (DA) Munitions: JDAM, LGB, Dual Mode LGB, and Direct 
        Attack Moving Target
    Inventories of direct attack munitions include Laser Guided Bombs 
(LGB) and Joint Direct Attack Munitions (JDAM) weapons; both are 
guidance kits for general purpose bombs and strike fixed targets only. 
The LGB guides on a laser spot which provides precise accuracy in clear 
weather. JDAM provides Global Positioning/Inertial Guidance Systems 
(GPS/INS) giving accurate adverse weather capability ($34 million in 
fiscal year 2008). The Dual Mode LGB retrofit to LGB kits, procured in 
fiscal years 2006-2007, increases flexibility by combining laser and 
GPS/INS capabilities in a single weapon. The next evolutionary upgrade, 
Moving Target Weapon (MTW), will combine laser and GPS/INS guidance 
with moving target capability. Procurement is planned via a capability-
based competition, with MTW upgrading existing JDAM and/or LGB kit 
inventories. $29 million supports this on-going MTW effort in fiscal 
year 2008.
Harpoon Block III Missile
    Harpoon Block III represents the only long range, all weather, 
precise, ship and air launched, surface warfare anti-ship capability. 
$44 million in fiscal year 2008 supports development of a kit upgrade 
to existing Harpoon Block IC, the addition of a data link and GPS that 
will provide increased target selectivity and performance in the 
cluttered littorals.
Pioneer Tactical Unmanned Aircraft Sensor (UAS)
    The Pioneer UAS System is a transportable Intelligence, 
Surveillance, and Reconnaissance (ISR) asset capable of providing 
tactical commanders with day and night, battlefield, and maritime 
reconnaissance in support of Marine expeditionary warfare and maritime 
control operations. The fiscal year 2008 budget requests $38 million in 
operations and maintenance sustainment and $90 million in procurement 
for the Army's Shadow RQ-7B UAS as an interim replacement for the 
currently fielded Pioneer.
Language, Regional Expertise & Culture (LREC)
    Achieving Navy's global strategy depends in part on our ability to 
communicate with and comprehend adversaries, enduring allies, and 
emerging partners. To facilitate this capability, Navy has developed a 
way forward to transform LREC in the force. Consistent with the Defense 
Language Transformation Roadmap and the Navy Strategic Plan (NSP), the 
program incentivizes language proficiency, increases regional content 
in NPME, provides non-resident language instruction to all sailors and 
delivers in-residence training to more officers.
    Incentivization through higher foreign language proficiency pay 
rates began June 6. $33 million requested in fiscal year 2008 continues 
existing efforts and begins new initiatives of enhanced non-resident 
(on-line) and resident (for officers) language training.
Extended Range Munition (ERM)
    The concept for expeditionary operations relies on sea-based 
surface fire support to aid in destruction and suppression of enemy 
forces. The Extended Range Munition (ERM) is a 5-inch rocket assisted 
guided projectile providing range and accuracy superior to that of 
conventional ammunition. The projectile uses a coupled GPS/INS Guidance 
System and unitary warhead with a height-of-burst fuze. $30 million in 
fiscal year 2008 research and development funding includes a 20-
reliability demonstration before land-based flight and qualification 
testing. The program includes modifications to existing 5 inch guns and 
fire control systems. ERM will utilize the Naval Fires Control System 
as the mission planning tool.
Automatic Identification System (AIS)
    AIS is a commercially available shipboard broadcast Very High 
Frequency (VHF) maritime band transponder system capable of sending and 
receiving ship information, including navigation identification, and 
cargo. AIS significantly increases the Navy's ability to distinguish 
between normal and suspicious merchant ships headed towards the United 
States and allied ports. Navy warships using AIS have observed dramatic 
increases in situational awareness, safety of ship and intelligence 
gathering capability. Programmed funding started in fiscal year 2007. 
Initially funded in fiscal year 2006 from ONR Rapid Technology 
Transition initiative and reprogramming, AIS shifted to programmed 
funding in fiscal year 2007, and with our request of $28 million in 
fiscal year 2008, it transitions to become a program of record.
Global Hawk Maritime Demonstration (GHMD)
    Using an existing Air Force production contract, the Navy procured 
two GHMD Unmanned Aerial Vehicles (UAV) and associated ground control 
equipment. GHMD will be used for developing concept of operations and 
tactics, training and procedures for a persistent ISR maritime 
capability in conjunction with the manned P-3 aircraft. The GHMD return 
on investment will be risk reduction for the BAMS UAS Program. GHMD 
provides a limited, high altitude, endurance UAV platform capability 8 
years before the planned fiscal year 2014 IOC of BAMS. $18 million in 
operations and maintenance and $6 million in procurement of spares 
sustains the program in fiscal year 2008.
Remote Minehunting System (RMS)
    RMS utilizes a diesel-powered, high endurance, off-board, semi-
submersible vehicle to tow the Navy's most advanced mine hunting sonar, 
the AN/AQS-20A. The system will be launched, operated, and recovered 
from surface ships. RMS will provide mine reconnaissance, detection, 
classification, localization, and identification of moored and bottom 
mines. $23 million in fiscal year 2008 supports the fielding plan 
commencing this year providing limited systems for use on select DDGs, 
48 RMSs for the Littoral Combat Ship (LCS) mine warfare mission 
packages, and an additional 16 vehicles as part of the LCS anti-
submarine warfare mission packages.
Joint High Speed Vessel (JHSV)
    Navy, along with the Army, SOCOM and Marine Corps, is working to 
acquire a Joint High Speed Vessel (JHSV) that provides the required 
intra-theater lift capability necessary to meet each service's 
requirements. The acquisition of JHSV will address high-speed, intra-
theater surface lift capability gaps identified to implement Sea Power 
21, the Army Future Force operational concepts and SOCOM future 
operational plans. Additionally, it will improve intra-theater lift 
currently provided by Westpac Express and other leased vessels. JHSV is 
currently in the technology development phase with Joint Requirements 
Oversight Council (JROC) approval of the Capabilities Development 
Document (CDD) anticipated soon. Navy's research and development 
contribution in fiscal year 2008 is $19 million. Ultimate delivery of 
the first vessel is anticipated in 2010.
Aerial Common Sensor (ACS)--Future EPX (EP-3E Replacement)
    Navy is on a path to recapitalize the EP-3 airborne electronic 
surveillance aircraft, and our $17 million in fiscal year 2008 research 
and development funding contributes to this effort. ACS is the Navy's 
premier manned Airborne Intelligence, Surveillance, Reconnaisance 
(AISR) platform tailored to the maritime environment. ACS will provide 
data fusion and a robust reach-back capability allowing onboard 
operators to push intelligence to tactical commanders and operators in 
mission support centers. With a network-centric approach, ACS 
represents a significant capability in the maritime patrol and 
reconnaissance force family of systems including MMA and BAMS UAS.
Aegis Ballistic Missile Defense (BMD)
    Aegis Ballistic Missile Defense is the sea based component of the 
Missile Defense Agency's (MDA) Ballistic Missile Defense System (BMDS). 
It enables surface combatants to support ground-based sensors and 
provides a capability to intercept short and medium range ballistic 
missiles with ship-based interceptors (SM-3 missiles). The recently 
started Gap Filler Sea-Based Terminal Program will provide the ability 
to engage Short Range Ballistic Missiles (SRBMs) with modified SM-2 
Block IV missiles from Aegis BMD capable ships. While all development 
funding is covered under the MDA budget, Navy has committed $13 million 
in fiscal year 2008 for operations and sustainment of Aegis BMD systems 
as Navy assumes operational responsibility.
    In May, 2006, U.S.S. Lake Erie (CG 70) successfully engaged and 
intercepted a LANCE short range test target with a modified SM-2 Block 
IV missile in a Navy-sponsored BMD demonstration. As a result, the Navy 
is modifying the remaining inventory of 100 SM-2 Block IV missiles, and 
MDA is modifying the Aegis BMD program to support sea-based terminal 
engagements.
    In June, 2006, Navy successfully achieved a second engagement of a 
separating SRBM target with the AEGIS BMD system. This successful 
engagement brings the tally to seven successful intercepts in nine 
flight tests as of December 2006. Aegis BMD has been installed on 3 
cruisers and 13 destroyers. All the cruisers and three destroyers are 
engagement capable. The balance of the destroyers are Long Range 
Surveillance and Track (LRS&T) capable. Additional installations are 
planned for 2007.
    In actual operations last July, the United States and Japanese 
Aegis radar-equipped destroyers successfully monitored North Korea's 
ballistic missile tests.
21 Inch Mission Reconfigurable Unmanned Underwater Vehicle System 
        (MRUUVS)
    21 inch MRUUVS is a submarine launched and recovered, 
reconfigurable UUV system that will improve current capabilities in 
enabling assured access. It will provide a robust capability to conduct 
clandestine minefield reconnaissance and general Intelligence, 
Surveillance, and Reconnaissance (ISR) in denied or inaccessible areas. 
The MRUUVS program has been restructured, moving Initial Operational 
Capability (IOC) from fiscal year 2013 to 2016 when clandestine mine 
countermeasure capability from Los Angeles Class submarines will be 
delivered. Accordingly, the fiscal year 2008 funding request has been 
adjusted to $13 million. ISR capability and Virginia Class host 
compatibility will arrive in follow-on increments approximately 2 years 
after IOC.
Tactical Control System (TCS)
    Research and development funding of $9 million in fiscal year 2008 
continues work on the Tactical Control System. The program provides 
interoperability and commonality for mission planning, command and 
control, and interfaces for tactical and medium altitude UAV systems. 
TCS software provides a full range of scaleable capabilities from 
passive receipt of air vehicle and payload data to full air vehicle and 
payload command and control from ground control stations both ashore 
and afloat. TCS will be fielded with the Vertical Takeoff Unmanned Air 
Vehicle (VTUAV) system and key to supporting the LCS.
Utilities Privatization (UP)
    The Navy and Marine Corps have 645 utilities systems eligible for 
privatization on 135 activities/installations worldwide. Of these, 394 
have been determined to be exempt, 22 have been awarded for 
privatization, and 95 have received a Source Selection Authority (SSA) 
decision and are being processed for exemption or award. 122 systems 
are still being reviewed for an SSA decision. $3 million requested in 
our fiscal year 2008 budget supports these ongoing initiatives.
                      develop 21st century leaders
    Programs and practices of particular interest include (listed in 
order of fiscal year 2008 dollar value):
Health Care:
            Combat Casualty Care
    Combat casualty care is provided by Navy medical personnel assigned 
to and serving with Marine Corps units, in expeditionary medical 
facilities, aboard casualty receiving/treatment ships and hospital 
ships, and in military and VA hospitals. Recent advances in force 
protection, battlefield medicine, combat/operational stress control, 
and medical evacuation have led to improved survival rates and enhanced 
combat effectiveness.
    Since the start of OEF/OIF the Marine Corps has fielded new combat 
casualty care capabilities, including: updated individual first aid 
kits with QuikClot and advanced tourniquets, robust vehicle first-aid 
kits for convoy use, combat lifesaver training, and new systems to 
provide forward resuscitative surgery and en route care. Navy fleet 
hospital transformation is redesigning expeditionary medical facilities 
to become lighter, modular, more mobile, and interoperable with other 
Services' facilities.
    Naval S&T funds of $18 million in fiscal year 2008 in advanced 
technology and applied research for combat casualty care sustain our 
overall level of effort and focus on this mission. Additionally, mental 
health services have been expanded through post-deployment screenings, 
expanded briefings, and proactive interactions between providers and 
sailors and marines.
            Safe Harbor Program
    Our care for combat wounded does not end at the Military Treatment 
Facility (MTF). The Navy has established the Safe Harbor Program to 
ensure seamless transition for the seriously wounded from arrival at a 
Conus MTF to subsequent rehabilitation and recovery, whether through 
DOD or the VA. Since its inception, 114 sailors including 103 Active 
and 11 Reserve members have joined the program. Currently, 92 are being 
actively tracked and monitored including 34 severely injured last year 
in OIF/OEF. Senior medical staff personally visit and assist our 
seriously injured sailors and their families to ensure their needs are 
being met.
            Post Traumatic Stress Disorder (PTSD) and Traumatic Brain 
                    Injury (TBI)
    The Navy has focused much attention on these complex conditions 
that have resulted from combat operations. With PTSD, early 
identification and intervention are critical elements of successful 
treatment and prevention. Closely aligned with war-fighters while in 
garrison, health-care providers instruct self-aid and buddy-aid 
training. When intervention is necessary, treatment occurs via embedded 
mental health personnel in deployed units (e.g. via USMC Oscar teams 
and carrier group clinical psychologists). All sailors receive in-
theater assessment through a Behavioral Health Assessment Tool (BHAT) 
and receive a Post Deployment Health Assessment (PDHA) immediately 
following deployment, and again 90-180 days later. This treatment 
coverage is comprehensive for both Active and Reserve members.
    Navy is partnering with the other Services to establish a Center 
for Deployment Psychology to provide further education and training on 
PTSD treatment and other combat stress disorders. Our continuum of care 
in this area before, during, and after deployment, coupled with a 
review of policies and practices to ensure treatment for PTSD is 
``destigmatized,'' are critical steps in addressing the health needs of 
our deployed sailors.
    The science associated with the diagnosis and treatment of 
traumatic brain injuries (TBI) is evolving and the military is at the 
leading edge in research and treatment. Military Acute Concussion 
Evaluation (MACE) has been developed as part of field assessments and 
all casualties transitioned to Bethesda receive neuro-psychological 
evaluations with database tracking and follow-up as required.
    When members with TBI transition from military service, they may be 
transferred to one of the four Veterans Administration (VA) poly-trauma 
centers in Palo Alto, California, Richmond, Virginia, Minneapolis, 
Minnesota and Tampa, Florida--whichever facility is closest to the 
member's home of record. The four VA poly-trauma centers are among the 
premier treatment facilities for TBI in the country. In addition to VA 
tracking, when service members are transferred to the VA, they are also 
tracked by case managers from the referring Navy MTF at least bimonthly 
by the MTF case manager to maintain a coordinated care effort. 
Occasionally, the medical case management team determines in 
consultation with an individual patient and their family that the 
patient's specific condition and/or family needs dictate that the best 
location for their continued care is at a civilian hospital rather than 
a VA or an MTF.
            Quality Medical Care
    While continuing to support OIF/OEF with medical personnel, Navy 
medicine remains committed to providing quality care for all 
beneficiaries, both in deployed settings and at home. One of the main 
challenges has been ensuring sufficient numbers of providers in 
critical specialties. We continue to focus on refining and shaping our 
force to recruit, train, and retain the right mix of uniformed and 
civilian health providers thus sustaining the benefits of our 
healthcare system and meeting our obligations during this time of war. 
Despite high demands, Navy medicine meets 100 percent of its 
operational commitments, and maintains quality care to our 
beneficiaries, without any sacrifice in quality.
            Post-Deployment Health Care
    Navy medicine has developed new delivery models for deployment-
related concerns and is working with the Office of Seamless Transition 
to improve coordination with the Veterans Administration. These include 
13 Deployment Health Clinics in areas of fleet and marine concentration 
to support operational commands in ensuring medical care for those 
returning from deployment.
Navy Education
            Professional Military Education (PME)
    Our professional military education continuum provides career-long 
educational opportunities for professional and personal development 
that supports mission capabilities. It supports development of 21st 
century leaders who have the capacity to think through uncertainty; 
develop innovative concepts, capabilities, and strategies; fully 
exploit advanced technologies, systems, and platforms; understand 
cultural/regional issues; and conduct operations as a coherently joint 
force. Navy PME provides a common core of knowledge for all sailors. A 
primary level program was implemented via distance learning in June 
2006. The initial targeted audience is junior unrestricted line 
officers and senior enlisted members. Additional content is in 
development for all junior officers. Introductory and basic levels for 
more junior sailors is also under development.
            Joint Professional Military Education (JPME)
    Joint professional military education provides an understanding of 
the principles of joint warfare. Our path is designed to create a 
change in Navy culture so that it values jointness and therefore 
systematically develops a group of Navy leaders who are strategically 
minded, capable of critical thinking, and skilled in naval and joint 
warfare. JPME Phase I is a requirement for screening unrestricted line 
officers for commander command beginning in fiscal year 2009. In August 
2006, Naval War College began in-residence instruction of JPME Phase 
II. The Naval War College has implemented a Joint Maritime Component 
Commander's Course to prepare future Flag Officers to serve as Maritime 
Component Commanders. $150 million requested in fiscal year 2008 
sustains our expanded commitment to this vital professional 
development.
            The Naval Reserve Officers Training Corps (NROTC)
    The NROTC Program comprises 59 active units at 71 host institutions 
of higher learning across the Nation. With $173 million requested in 
fiscal year 2008, the program is adequately funded to provide 4 and 2 
year scholarships to qualified young men and women to prepare them for 
leadership and management positions in an increasingly technical Navy 
and Marine Corps with service as commissioned officers. The program 
continues to be a key source of nuclear power candidates, nurses, and 
increased officer corps diversity. Focus is now on increasing strategic 
foreign language skills and expanding cultural awareness among 
midshipmen.
            The United States Naval Academy (USNA)
    USNA gives young men and women the up-to-date academic and 
professional training needed to be effective Navy and Marine officers 
in their assignments after graduation. Renowned for producing officers 
with solid technical and analytical foundations, the Naval Academy is 
expanding its capabilities in strategic languages and regional studies.
            The Naval Postgraduate School (NPS)
    NPS is the Navy's principal source for graduate education. It 
provides Navy and DOD relevant degree and non-degree programs in 
residence and at a distance to enhance combat effectiveness. NPS 
provides essential flexibility in meeting Navy and Department of 
Defense emergent research needs, and the development of warfighters 
with otherwise demanding career paths and deployment cycles making 
graduate education opportunities difficult to achieve. NPS also 
supports operations through naval and maritime research, and maintains 
expert faculty capable of working in, or serving as advisors to 
operational commands, labs, systems commands, and headquarters 
activities. The $84 million requested in fiscal year 2008 sustains this 
unique national asset and provides increases for lab upgrades, distance 
learning, and IT maintenance and support.
            The Naval War College (NWC)
    The Naval War College provides professional maritime and joint 
military education, advanced research, analysis, and gaming to educate 
future leaders. Its mission is to enhance the professional capabilities 
of its students to make sound decisions in command, staff and 
management positions in naval, joint, and multinational environments. 
The $56 million requested in fiscal year 2008 is a significant increase 
to support Joint Forces Maritime Component Command/Coalition Forces 
Maritime Component Command analysis and gaming capability, the China 
Maritime Studies Institute, initial investment for Maritime 
Headquarters (MHQ)/Maritime Operations Center (MOC), support for JPME 
II accreditation, funding for JPME I at Naval Postgraduate School, and 
for NWC Maritime Operations curriculum development.
            Enlisted Retention (Selective Reenlistment Bonus)
    Retaining the best and brightest sailors has always been a Navy 
core objective and key to success. Navy retains the right people by 
offering rewarding opportunities for professional growth, development, 
and leadership directly tied to mission readiness. Navy has experienced 
significant reenlistment improvement since a 20-year low in fiscal year 
1999, reaching a peak at the end of fiscal year 2003. This improved 
retention is part of a long-term trend, allowing us to be more 
selective in ensuring the right number of strong performers reenlist in 
the right ratings. Selective Reenlistment Bonuses (SRBs) are a key tool 
enabling us to offer attractive incentives to selected sailors we want 
to retain. $359 million requested in fiscal year 2008 will provide for 
nearly 79,000 new and anniversary payments helping ensure the Navy will 
be able to remain selective in fiscal year 2008.
            Sexual Assault Victim Intervention (SAVI)
    SAVI has three major components: (1) awareness and prevention 
education, (2) victim advocacy and intervention services, and (3) 
collection of reliable data on sexual assault. Per the Fiscal Year 2005 
National Defense Authorization Act requirements, the Navy SAVI Program 
was transitioned from a program management to case management focus. 
Existing installation program coordinator positions were increased and 
became Sexual Assault Response Coordinators (SARCs), which is a 
standard title and position across the Department of Defense. SARCs are 
accountable for coordinating victim care/support and for tracking each 
unrestricted sexual assault incident from initial report to final 
disposition. Navy also provides 24/7 response capability for sexual 
assaults, on or off the installation, and during deployment through the 
use of victim advocates who report to installation SARCs. The $3 
million requested in the fiscal year 2008 budget enables us to maintain 
this expanded SAVI program fleet-wide.
            Family Advocacy (FAP)
    The Family Advocacy Program addresses prevention, identification, 
reporting, evaluation, intervention and follow-up with respect to 
allegations of child abuse/neglect and domestic abuse involving active 
duty and their family members or intimate partners. Maintaining abuse-
free and adaptive family relationships is critical to Navy mission 
readiness, maintenance of good order and discipline, and quality of 
service for our active duty members and their families.
            Sea Warrior Spiral 1
    Sea Warrior comprises the Navy's training, education and career 
management systems that provide for the growth and development of our 
people. The first increment, or ``Spiral 1'', of Sea Warrior is 
interactive detailing. This system allows sailors to have greater 
insight and engagement in identifying and applying for Navy positions 
of interest to them professionally and personally. Spiral 1 Sea Warrior 
is a funded Navy program and its develop follows the standard, rigorous 
acquisition engineering and program management processes. Additional 
Sea Warrior spirals will be developed in accordance with future 
capability needs and as clear requirements are defined.
    Because of Sea Warrior's complexity, many issues related to sea and 
shore connectivity are still being worked out. Further, before fielding 
a usable model, the Navy plans to conduct extensive beta testing of 
selected ratings. Sea Warrior is funded through the fiscal year DP and 
is not expected to reach FOC until 2016.

    Senator Inouye. May I now recognize the Commandant of the 
Marine Corps, General Conway.
STATEMENT OF GENERAL JAMES T. CONWAY, COMMANDANT, 
            UNITED STATES MARINE CORPS
    General Conway. Mr. Chairman, Senator Stevens, and 
distinguished members of the subcommittee, thank you for the 
opportunity to report to you today on the status of our Marine 
Corps.
    In our recent meetings, as well as previous testimony 
before the Congress, I pledged throughout to give you frank and 
honest assessments, and I come here today again with that as my 
watch word.
    Over the past 5 years, your Marine Corps has been immersed 
in the first battles of a long war, a generational struggle 
against Islamic extremists. Our freedom is threatened, not by 
Nazis or Communists as it was in the past, but by terrorists 
who are now determined to destroy us and our way of life.
    Further, the full array of our security threats is 
daunting. But rest assured, this generation's young Americans 
are answering the call. Over two-thirds of our Corps enlisted 
or reenlisted since 9/11, knowing full well what the Nation 
expects of marines in a time of war.
    Our marines are being pushed hard by the high operational 
tempo and frequency of combat deployments. They've been 
operating at full-bore for, roughly, the last 5 years. Despite 
this, and, in fact, maybe because of it, I can report first-
hand that the morale has never been higher. I attribute that to 
the fact that they believe they're making a difference. They 
see the evidence of your support everywhere, tangible support 
in feeling of new material, the latest equipment to protect 
them while in harm's way, and your support of the proposal to 
grow our end strength.
    Increasing the 202,000 marines will reduce the strain, both 
on the individual marine, and on our institution as a whole. It 
will require additional infrastructure, but more importantly, 
will gradually improve the deployment-to-dwell ratio in some of 
our most critical units. Currently, many of these units are 
deployed for 7 months and then home for 7, in some cases even 
less than that, before they return to combat.
    This end strength addresses much more that the current 
battles in Iraq and Afghanistan. It ensures your Corps will be 
able to deal with the uncertainties of a long war. Our Corps 
is, by law, to be the most ready when the Nation is least 
ready, the Nation's shock troops. Additional marines allow the 
dwell-time needed to train and sharpen the skills that will be 
required of us in the next contingency, reducing our 
operational and strategic risks.
    As over 70 percent of our proposed end strength increase is 
composed of first-term marines, we're making the necessary 
increases in recruiting and retention. This is a challenge, but 
our standards will remain high. We need your continued support 
for recruiting programs, such as advertising, which are 
essential for us to continue to bring aboard the best in 
America.
    Our Nation has an enduring commitment to her marines long 
after they've returned from the battle, particularly if they're 
physically or mentally scarred. Our moral imperative is to 
ensure that this support is seamless, even as marines leave our 
uniform ranks. To this end, we have formed a Wounded Warrior 
Regiment with battalions on each coast, that will hold true to 
the maxim that we never leave a marine behind.
    Ladies and gentlemen, your marines are honored to be 
serving this Nation during such an important time in our 
history. They are truly a special breed of patriots and it's on 
their behalf that I come before you today to answer your 
questions, and to help all understand how we can best support 
these tremendous young Americans.

                           PREPARED STATEMENT

    I look forward to your questions, sir.
    Senator Inouye. I thank you very much, General.
    [The statement follows:]
             Prepared Statement of General James T. Conway
    Chairman Inouye, Senator Stevens, and distinguished Members of the 
Subcommittee, thank you for the opportunity to report to you the state 
of your Marine Corps.
    Your Marine Corps is currently engaged in what we believe to be the 
opening battles in a generational struggle against Islamic extremists. 
Our commitment is characterized by diverse and sustained employment 
around the globe, particularly the central campaigns in Iraq and 
Afghanistan. Your Marines are fully engaged in this fight, and it is 
through their tremendous sacrifices--serving shoulder-to-shoulder with 
their fellow service men and women--that we will ultimately prevail. It 
is our moral imperative to support them to the hilt--always mindful 
that our forward-deployed Marines and Sailors in combat must be our 
number one priority.
    Though Marines in the operating forces have been pushed hard by the 
tempo and frequency of operational deployments, their morale has never 
been higher--because they believe they are making a difference. Thanks 
to you, Ladies and Gentlemen, your Marines know that the people of the 
United States and their Government are behind them. Support has been 
exceptional--from the rapid fielding of life-saving equipment to the 
proposed increase in end strength, and with your continued support, 
mission accomplishment will remain completely viable and achievable.
    The Long War is taking a considerable toll on our equipment and we 
have tough choices ahead of us--we must support our Marines and their 
families, while deciding whether to replace our rapidly aging equipment 
with similar platforms or to modernize with next generation equipment.
    We know these next few years will be challenging--not only in the 
immediate conflict in Iraq, but in subsequent campaigns of the Long 
War. Therefore, the Corps will balance our skill sets in order to 
remain prepared for crisis outside of Iraq and Afghanistan--to be where 
our country needs us, when she needs us, and to prevail over whatever 
challenges we face. I am confident that with your steadfast support, 
our Corps will continue to remain the Nation's force in readiness and 
fulfill its Congressionally mandated mission of being the most ready 
when the Nation is least ready.
                marine corps commitments in the long war
    Over the past year, your Marines deployed to all corners of the 
globe in support of our Nation. With more than 24,000 Marines ashore 
throughout the U.S. Central Command's Area of Responsibility, 
Operations IRAQI FREEDOM and ENDURING FREEDOM remain our largest 
commitment. In addition to those operations, the Marine Corps also 
deployed forces to: support humanitarian and disaster relief efforts in 
Pakistan and the Republic of the Philippines; participate in over fifty 
Theater Security Cooperation events ranging from small Mobile Training 
Teams in Central America to the first deployment of the Marine Forces 
Special Operations Command's Foreign Military Training Unit supporting 
our African partner nations; protect our Embassies by providing Fleet 
Anti-Terrorism Security Teams to East Timor and Lebanon; and respond to 
a Non-Combatant Evacuation from Lebanon--the largest since Vietnam.
    Achieve Victory in the Long War.--The Defense Department's 2006 
Quadrennial Defense Review (QDR) directed that we enhance our 
counterinsurgency capabilities. Our enhanced Marine Air Ground Task 
Forces and the Marine Corps component to Special Operations Command are 
part of this commitment. Other types of forces, unique to 
counterinsurgency operations, may also need to be formed. However, we 
will maintain robust contingency response forces satisfying the 
Congress' intent to be ``the Nation's shock troops''--always ready and 
always capable of forcible entry.
    I view the inherent power of the Marine Air Ground Task Force 
(MAGTF) as an irreplaceable component of this Nation's plan for success 
in the Long War. This war demands flexible organizations that apply a 
mix of combat and non-lethal actions; interagency capabilities and 
joint warfare applications; innovative use of airpower; and 
synchronization of intelligence activities. For rapid integration of 
these capabilities--as well as providing the critical boots on the 
ground--the MAGTF is better prepared than any other military formation 
to execute the full range of operations required by the current 
conflict. This is the Corps' fundamental fighting organization, 
providing the joint force a unique, additive capability--one that is 
much greater than the sum of its parts.
    To further expand the MAGTF's contribution to our Nation's 
security, I have directed my staff to develop a series of exercises 
that will further enhance the MAGTF's ability to integrate interagency 
and coalition operations throughout the spectrum of conflict. Our goal 
will be to provide a forum to develop diverse yet cohesive teams that 
can best overcome the challenges we are most likely to face in pre- and 
post-war phases of operations. These exercises will serve our Nation 
well in the Long War, in future conflicts, and in our ongoing security 
cooperation efforts.
    In February of 2006, we established Marine Corps Forces, Special 
Operations Command (MARSOC) within the U.S. Special Operations Command. 
MARSOC is already employing its five major subordinate elements: the 
Foreign Military Training Unit, two Marine Special Operations 
Battalions, the Marine Special Operations Support Group, and the Marine 
Special Operations School, and is on track to achieve full-operational 
capability by the end of fiscal year 2008. Its personnel and equipment 
assignment plan is designed to best support our Combatant Commanders in 
their prosecution of the Long War. The Foreign Military Training Unit 
was activated in 2005 and has been incorporated into MARSOC, the 2d 
Marine Special Operations Battalion was activated in May of 2006, 
followed by the 1st Marine Special Operations Battalion in October of 
2006.
    MARSOC deployed Foreign Military Training Unit teams to the 
European and Southern Command areas of responsibility last summer and 
fall. Through the end of fiscal year 2007, the Foreign Military 
Training Unit is scheduled to make twenty-seven deployments to twelve 
countries to conduct foreign internal defense and counter narcotics 
training to improve the indigenous military forces of those countries. 
Additionally, MARSOC began deploying Marine Special Operations 
Companies, associated with Marine Expeditionary Units and assigned to 
Expeditionary Strike Groups in January of this year. MARSOC provides a 
unique combination of land component and maritime expeditionary 
capabilities across a wide range of missions. As special operations 
forces continue to prosecute the Long War, MARSOC will be a significant 
partner in Special Operations Command.
    To aid in both the current execution of the campaign in Iraq as 
well as the long-term irregular warfare capability of the Marine Corps, 
we are establishing a Center for Irregular Warfare. This organization 
will serve as the focal point for integration of concepts, doctrine, 
training, education, and equipment capability development. This Center 
will also maintain close coordination with our sister Services and 
external agencies. Our goal is to enhance the Marine Air Ground Task 
Force's capabilities by training and equipping small-unit leaders to 
handle the demanding complexities and possess the adaptive mindset 
necessary to operate across the spectrum of conflict--empowering our 
``strategic corporals'' as well as all of our junior leaders to fight, 
operate, and win in this challenging security environment.
    Supporting the Plus-up for Operation IRAQI FREEDOM.--Currently, the 
Marine Corps has approximately 4,000 Marines affected by the pending 
plus-up operation in Iraq. The units affected will be extended for 
approximately 45-60 days. This change will impact our Marines and their 
families, but we believe that the support systems that we have in place 
within the units and family support systems back home will help our 
Marines and their families meet the challenges associated with this 
extension on deployment. Furthermore, between their return and next 
deployment, the addition of new infantry battalions will allow these 
units to lengthen the time at their home station.
    Battalions moved forward in the rotation cycle will complete all 
required pre-deployment training that fully qualifies them for 
employment. These battalions will be subject to the same pre-deployment 
training standards as their fellow Marines. We have accelerated the 
normal cycle through our main mission rehearsal exercise, Mojave Viper, 
to accommodate consistent training for all units rotating into theater.
    The accelerated battalions will deploy with equipment from their 
home stations, and the additional equipment required will be provided 
by cross-leveling assets in theater as well as leveraging equipment 
already positioned forward. This has resulted in some home station 
shortfalls and has hindered some stateside units' ability to train for 
other missions and contingencies. While the readiness of deployed units 
remains high, we have experienced a decrease in the readiness of some 
non-deployed units.
    There are no Marine Corps Reserve units involved in the plus-up 
operations.
                      right-size our marine corps
    To meet the demands of the Long War as well as the inevitable 
crises that arise, our Corps must be sufficiently manned in addition to 
being well trained and properly equipped. Like the Cold War, the Long 
War is a continuing struggle that will not be measured by the number of 
near-term deployments or rotations, and while we seek to capitalize on 
advances in technology, we know it is our magnificent Marines who 
invariably decide the outcome.
    In order to protect our most precious asset, the individual Marine, 
we must ensure that our personnel policies, organizational construct, 
and training are able to operate at the ``sustained rate of fire.'' 
Operating at the ``sustained rate of fire'' means that the Corps will 
be able to maintain operations indefinitely without drastic changes to 
procedures, policies, organization, or operations. The proposed Active 
Component end strength increase will significantly enhance our ability 
to operate at the ``sustained rate of fire.''
    Strain on the Individual.--Despite an unparalleled Personnel Tempo, 
the morale of our Marines and their families remains high. To avoid an 
adverse toll on our Marines and their families, and to prevent a 
decrease in readiness, the former Secretary of Defense established a 
1:2 deployment-to-dwell ratio goal for all active component forces. 
This ratio relates to how long our forces are deployed versus how long 
they are at home--the goal being for every seven months a Marine is 
deployed, they will be back at their home station for fourteen months. 
We need to relieve the strain on those superb Americans who have 
volunteered to fight the Nation's battles.
    Strain on the Institution.--The current deployment cycle requires 
commanders to focus solely on those skill sets required to accomplish 
the mission in Iraq and Afghanistan. This deterioration of capabilities 
is exacerbated by individual augments and training team requirements 
and by many units being deployed for missions outside of their normal 
duties. The result of this strain is evident in the Marine Corps' 
limited ability to provide trained forces to project power in support 
of other contingencies. Reduced training time and a necessarily 
singular focus on current contingency requirements prevents significant 
opportunities for units to train to the full range of military 
operations in varied operating environments, such as jungle or mountain 
terrain. To fulfill our mandate to be ``most ready when the Nation is 
least ready,'' our deployment cycles must not only support training for 
irregular warfare, they must also provide sufficient time for recovery, 
maintenance, and training for other contingency missions. By increasing 
the dwell time for our units and allowing them additional time at home 
stations, we can accomplish the more comprehensive training needed for 
the sophisticated skill sets that have enabled Marine Air Ground Task 
Forces to consistently achieve success in all types of military 
operations and operating environments. Our goal is to increase dwell 
time and achieve a 1:2 deployment-to-dwell ratio for our active 
forces--our Operating Forces are routinely falling short of this 
target.
    Reducing the Stress.--I would emphasize, the underlying requirement 
for an end strength increase is separate from, indeed it pre-dates, the 
plus-up operation in Iraq. The proposed increase to our Active 
Component end strength to 202,000 Marines will go a long way to 
reducing the strain on the individual Marines and the Institution. Our 
first task will be to build three new infantry battalions and their 
supporting structure--approximately 4,000 Marines. The resources for 
this force have been included in our fiscal year 2007 supplemental. 
These funds will pay for initial costs associated with the stand up of 
these infantry battalions as well as critical enablers, which are vital 
not only for the current fight, but are also critically needed to 
support long-term Marine Corps capabilities to accomplish other 
missions. These enablers include combat support and combat service 
support such as intelligence, military police, and civil affairs 
capabilities. We will systematically build the additional individuals 
and units on a schedule of approximately 5,000 per year. This plan will 
gradually increase the deployment-to-dwell ratio of some of our 
habitually high operational tempo units--enabling us to recover our 
ability to respond in accordance with timelines outlined in war plans 
for our Combatant Commanders; thereby, reducing future operational 
risks. We are initially funding this initiative with supplemental and 
baseline funding in fiscal year 2008, but have included all future 
costs in our baseline budget as of fiscal year 2009.
    Reserve Component End Strength.--Our efforts in the Long War have 
been a Total Force effort, with our Reserves once again performing with 
grit and determination. Recent policy changes within the Department of 
Defense match up very well with our existing policies and will allow us 
to use the Reserve forces as they were structured to be employed--to 
augment and reinforce our Active Component forces. To this end, my goal 
is to obtain a 1:5 deployment-to-dwell ratio within our Reserve 
Component. We currently believe our authorized Reserve Component end 
strength of 39,600 Selected Reserve Marines is adequate. As with every 
organization within the Marine Corps, we continue to review the make-up 
and structure of the Marine Corps Reserve in order to ensure the right 
capabilities reside within the Marine Forces Reserve units and our 
Individual Mobilization Augmentee program across the force. Finally, as 
our active force increases in size, our reliance on the Reserve forces 
should decrease--helping us achieve the desired deployment-to-dwell 
ratio.
    Manning the Force.--An equally important factor in sustaining a 
viable force is continuing to recruit and retain qualified young men 
and women with the right character, commitment, and drive to become 
Marines. With over 70 percent of the end strength increase comprised of 
first-term Marines, both recruiting and retention efforts will be 
challenged. A major part of this effort will involve programming 
increased funding for both the Enlistment Bonus and the Selective 
Reenlistment Bonus Programs. We will need the continued strong support 
of Congress to achieve ongoing success.
    Our recruiting standards will remain high. While exceeding DOD 
quality standards, we continue to recruit the best of America into our 
ranks--in fiscal year 2006, the Marine Corps achieved over 100 percent 
of our active component accession goal. The Marine Corps Reserve also 
achieved 100 percent of its recruiting goals, but reserve officer 
numbers remain challenging because our primary accession source is from 
officers who leave active duty. We appreciate the continued 
authorization for Selected Reserve Officer Affiliation Bonuses in the 
Fiscal Year 2007 National Defense Authorization Act--they continue to 
contribute in this crucial area.
    We forecast that both active and reserve recruiting will remain 
challenging in fiscal year 2007, particularly when viewed through the 
lens of accession missions to meet the increased end strength of the 
Marine Corps. We will need the continued support of Congress for 
programmed enlistment bonuses and other recruiting efforts, such as 
advertising, which will be essential to us continuing to meet these 
challenges.
    Retention is the other important part of manning the force. In 
fiscal year 2006, the Marine Corps exceeded its retention goals for 
both the First Term and Career Forces. For fiscal year 2007, we expect 
to exceed our goals again. This success can be attributed to the Marine 
Corps' judicious use of the Selective Reenlistment Bonus, and we now 
offer qualified first term and career enlisted Marines $10,000 in 
Assignment Incentive Pay to reenlist. To keep the very best of our 
Marines, we must increase the size of our reenlistment bonus program in 
order to ensure that we have the right grade and MOS mix to support the 
growing force. Not only will we have to retain more first-term Marines, 
but we will also have to increase the number of Marines reenlisting at 
the eight and 12-year mark. This will require a shift toward more 
programmed funding in targeted key areas in the career force.
    Military to Civilian Conversions.--Military-to-civilian conversions 
continue to provide a valuable source to send additional Marines back 
to the operating force in support of our warfighting initiatives and 
help reduce stress. We will continue to pursue sensible conversions and 
transfer Marines from non-essential billets.
    National Security Personnel System.--The Marine Corps is committed 
to successful implementation of the National Security Personnel System. 
The Marine Corps is actively participating with the Department of 
Defense in the development and implementation of this new personnel 
system and is cooperating with the sister Services so that our civilian 
employees receive the training opportunities and support necessary for 
a successful transition. The National Security Personnel System will 
enable the Marine Corps to better support the warfighter by providing a 
civilian workforce that is flexible, accountable, and aligned to the 
Marine Corps mission.
       resetting the force and preparing for the next contingency
    To meet the demands of the Long War, we must reset the force in 
order to simultaneously fight, train, and sustain our Corps. To support 
our Marines in combat, we have routinely drawn additional equipment 
from strategic stocks, which need to be replenished to remain 
responsive to emerging threats. The Congress has responded rapidly and 
generously to our requests for equipment and increased protection for 
our Marines and Sailors. It is our responsibility to manage these 
resources prudently as we transition to the modernization of our force.
    Equipment Readiness.--Extended combat operations have severely 
tested our materiel. While the vast majority of our equipment has 
passed the test of sustained combat operations, it has been subjected 
to more than a lifetime's worth of wear stemming from vehicle mileage, 
operating hours, and harsh environmental conditions. This increased 
maintenance requirement is a consequence of not only operational tempo 
and operating environments, but also the sheer amount of equipment 
employed in operations. Approximately thirty percent of all Marine 
Corps ground equipment and nearly twenty-five percent of our active 
duty aviation squadrons are currently engaged overseas. Most of this 
equipment is not rotating out of theater at the conclusion of each 
force rotation; it remains in combat, used on a near-continuous basis 
at an operating tempo that far exceeds normal peacetime usage.
    As our priority for equipment is to support Marines serving in 
harm's way, we have drawn additional equipment from the Maritime 
Prepositioning Ships and prepositioned stores from the caves in Norway; 
we have also retained equipment in theater from units that are rotating 
back to the United States. The operational results of these efforts 
have been outstanding--the average mission capable rates of our 
deployed forces' ground equipment remain above ninety-three percent--
but there is a price.
    The cost of this success is a decrease in non-deployed unit 
readiness as well as an increase in the maintenance required per hour 
of operating time. Equipment across the Marine Corps is continuously 
cross-leveled and redistributed to ensure that units preparing to 
deploy have sufficient equipment to conduct our rigorous pre-deployment 
training programs. Because the stateside priority of equipment 
distribution and readiness is to units preparing to deploy, there has 
been a trade-off in unit training for other types of contingencies. The 
timely delivery of replacement equipment is crucial to sustaining the 
high readiness rates for the Marines in theater, as well as improving 
the rates for the forces here at home. Although funded, much of this 
equipment is still many months from delivery.
    Ground Equipment.--Operations in Iraq and Afghanistan are placing 
demands on ground equipment far beyond what is typically experienced 
during training or home station operations. Some of these demands rise 
from higher usage rates, others from the rigors of extended operations 
in harsh environments. These higher demands increase the maintenance 
requirements for equipment employed in theater and continue when this 
equipment is redeployed to home stations.

          TABLE 1.--ABSOLUTE INCREASES IN UTILIZATION FOR SELECTED MARINE CORPS SYSTEMS EMPLOYED IN OIF
----------------------------------------------------------------------------------------------------------------
                                                                               Usage
                            Category                             --------------------------------  Optempo Ratio
                                                                      Pre OIF           OIF
----------------------------------------------------------------------------------------------------------------
HMMWV...........................................................             183             550             3.0
MTVR............................................................             500           2,000             4.0
LVS.............................................................             375           1,500             4.0
AAV.............................................................              83             417             5.0
Rotary-Wing Aircraft............................................              18              41             2.2
KC-130..........................................................              43              83             1.9
----------------------------------------------------------------------------------------------------------------
NOTE: Usage rates for ground vehicles are in miles per month; aircraft in flight hours per month.

    For example, in Operation Iraqi Freedom (OIF) crews are driving 
Light Armored Vehicles (LAVs) in excess of 8,700 miles per year--3.5 
times more than programmed annual usage rates of 2,480 miles per year. 
Our tactical vehicle fleet is experiencing some of the most dramatic 
effects of excessive wear, operating at five to six times the 
programmed rates.
    Aviation Equipment.--The operationally demanding and harsh 
environments of Iraq, Afghanistan, and Djibouti have highlighted the 
limitations of our aging fleet of aircraft. In order to support our 
Marines, sister Services, and coalition partners successfully, our 
aircraft have been flying at two to three times their designed 
utilization rates. Despite this unprecedented utilization, the yeoman 
efforts of our maintenance and support personnel have sustained an 
aviation mission capable rate for deployed Marine aircraft at 79 
percent over the past twelve months. The corresponding aviation mission 
capable rates for our units in garrison, who have either recently 
returned from deployment or are preparing to deploy again, have 
averaged 75 percent over the past twelve months. To maintain sufficient 
numbers of aircraft in deployed squadrons, our home squadrons have 
taken significant cuts in available aircraft and parts as they prepare 
for deployment. Reset funding has partially alleviated this strain, but 
continued funding is needed as we continue to recapitalize our aircraft 
fleets due to age, attrition, and wartime losses. Maintaining the 
readiness of our aviation assets while preparing our aircrew for their 
next deployment is and will continue to be a monumental effort and 
constant challenge for our Marines.
    We have mitigated aircraft degradation through specific aircraft 
modifications, proactive inspections, and additional maintenance 
actions enabled by reset programs. Sustaining aircraft material 
condition drives aircraft readiness and is the determining factor in 
combat aviation support provided to our Marines in harm's way. While 
these efforts have successfully bolstered aircraft reliability, 
sustainability, and survivability, additional requirements for depot 
level maintenance on airframes, engines, weapons, and support equipment 
will continue well beyond the conclusion of hostilities.
    Resetting Marine Aviation means not merely repairing and replacing 
damaged or destroyed aircraft, but getting more capable and reliable 
aircraft into the operational deployment cycle sooner. Your Marines 
rely on these aircraft on a daily basis to provide a wide array of 
missions including casualty evacuation for our wounded and timely close 
air support for troops in contact with the enemy. Production lines to 
replace legacy aircraft lost in support of the Long War are no longer 
active; therefore, it is urgent and imperative for the Marine Aviation 
Plan to remain fully funded and on schedule. Additionally, to ensure 
Marine aviation is postured to support the current needs of our 
country, the Marine Corps is working to restore war reserve aircraft 
and accelerate the upgrades of pre-production aircraft to help maintain 
aircraft inventories at minimal acceptable operating levels. For 
example, the Marine Corps is modifying pre-production MV-22s to ensure 
the transition schedule meets operational demands and deployment 
timelines. Resetting our full aviation capability will require a 
significant increase in programmed funding for repair, restoration, and 
upgrades of destroyed or damaged airframes, recovery of Pioneer 
unmanned aerial vehicle components, refurbishment of air traffic 
control equipment, replacement of targeting pods, and numerous other 
efforts to restore capability degraded in support of the Long War. 



    Reset of Prepositioning Programs.--Eleven Maritime Prepositioning 
Force (MPF) vessels from all three Maritime Prepositioning Force 
Squadrons (MPSRON) were downloaded and used in theater during initial 
Operation IRAQI FREEDOM operations. As these operations concluded, the 
Marine Corps reconstituted two of three MPSRONs to meet potential 
contingencies in other areas of the world. This reconstitution was 
conducted both in theater and at the USMC facilities in Jacksonville, 
Florida. In February 2004, MPSRON-2 was downloaded in support of 
Operation IRAQI FREEDOM II and has been partially reconstituted.
    Since the MPF offloads in support of Operations IRAQI FREEDOM I and 
II, MPSRON-1 and MPSRON-2 have gone through a complete maintenance 
cycle for attainment and supply rotation. Attainment for major end 
items is 91 percent and 48 percent respectively. Some of our major end 
item shortfalls are a result of ongoing Operation IRAQI FREEDOM/
Operation ENDURING FREEDOM equipment requirements and availability from 
the manufacturer. Our end item shortfalls in the MPF program will be 
reset during the ship's maintenance cycle as equipment becomes 
available. Readiness for all equipment loaded aboard the MPS is 
historically 98 percent or better. MPSRON-3 is currently undergoing its 
maintenance cycle and we project an attainment above 98 percent for 
equipment when completed in June 2007. MPSRON-2's maintenance cycle 
should begin in April 2008 and be completed by June 2009.
    Equipment from Marine Corps Prepositioning Program--Norway (MCPP-N) 
was used in support of Long War operations and to reset other Marine 
Corps shortfalls with a higher operational priority. The USMC will 
reset MCPP-N as soon as practical in line with USMC operational 
priorities.
    Costs of Resetting the Force.--Last year, our cumulative reset cost 
estimate was $11.7 billion, of which the Congress appropriated $5.1 
billion toward that amount. To date, Congress has appropriated a total 
of $10.2 billion for GWOT reset costs. The $11.7 figure is based on a 
point in time (October 1, 2005) snapshot of the funding necessary to 
refit the Marine Corps to a pre-Long War level of equipment readiness. 
During the summer of 2006, the Secretary of Defense standardized the 
definition of reset costs across the Services. As a result, the Marine 
Corps stopped identifying two major expenses--depot maintenance and 
attrition losses--as ``Cost of War'' and moved them into our reset the 
force estimate. This definitional change and some additional 
requirements have changed our estimate as noted in Table 2.
    The first expense to be re-categorized is the estimated cost of 
residual depot maintenance after the termination of hostilities. Our 
analysis shows that we will require at least four to six years of post-
conflict depot maintenance to bring our force to a fully reset state. 
Given the status of our equipment at this time, we estimate additional 
programmed funding will be required for post-conflict ground and 
aviation depot maintenance costs.
    The second item re-categorized because of definition changes is 
attrition losses. Prior to the re-definition, the Marine Corps had 
considered replacement and repair of attrition losses to be a cost of 
war, and had not included them in our reset estimate. We have increased 
our reset estimate to include forecasted attrition losses.
    The net effect is that the Marine Corps reset estimate, once a 
fixed point in time estimate, has now become a rolling estimate that 
includes future attrition losses and future depot maintenance 
estimates. The following table (Table 2) depicts the definitional 
changes:

                  TABLE 2.--CHANGES TO RESET DEFINITION
------------------------------------------------------------------------
                               Traditional Marine
          Category                    Corps          New OSD Definition
------------------------------------------------------------------------
Depot Maintenance...........  Reset...............  Reset
Additional 4-6 yrs after OIF  Not Included........  Reset
 I.
Field Level Maintenance.....  Cost of War.........  Cost of War
Consumables.................  Cost of War.........  Cost of War
Combat Losses...............  Cost of War.........  Reset
Annually Expended Munitions.  Cost of War.........  Cost of War
T/E Recapitalization........  Reset...............  Reset
Prepositioning Assets.......  Reset...............  Reset
------------------------------------------------------------------------

    Not all of the reset the force requirement can be executed in a 
single fiscal year. Some items such as attack and utility helicopters 
cannot be replaced until acquisition production decisions are made. 
Other requirements such as light armored vehicles cannot be fulfilled 
in a single year due to production capacity issues. Resourcing costs 
must be phased over several years. The table (Table 3) below highlights 
specific examples of this challenge.

                                                          TABLE 3.--EQUIPMENT DELIVERY LAG TIME
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  First Loss                                                      Replacement
           Capability            --------------------------------------------       Funding       ------------------------------------------    Delay
                                          Equip                 Date              Appropriated            Equip                 Date          Months \1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
Utility Helo....................  UH-1N...............  Dec 2001............  Oct 2006...........  UH-1Y..............  Apr 2009...........           88
Transport.......................  KC-130R.............  Jan 2002............  Oct 2006...........  KC-130J............  Apr 2010...........           99
Attack Helo.....................  AH-1W...............  Jan 2003............  Oct 2006...........  AH-1Z..............  Apr 2009...........           75
Medium Lift Helo................  CH-46E..............  Mar 2003............  Jul 2006...........  MV-22..............  Sep 2009...........           78
Wheeled Recon...................  LAV-25..............  Apr 2003............  May 2005...........  LAV-25.............  Dec 2007...........           56
Medium Wheeled Transport........  MTVR................  May 2003............  May 2005...........  MTVR...............  Apr 2006...........           35
--------------------------------------------------------------------------------------------------------------------------------------------------------

modernize for tomorrow, to be ``the most ready when the nation is least 
                                ready''
    As prudent stewards of our Nation's resources, we must decide the 
most effective way to modernize the Total Force. We are actively 
working through the tough decisions of whether to replace aging 
equipment with similar platforms or to procure next generation 
capabilities--such as cutting edge platforms like the STOVL Joint 
Strike Fighter, the MV-22 Osprey, and the Expeditionary Fighting 
Vehicle (EFV). Foremost and throughout our modernization efforts, we 
will maintain our Congressionally mandated contingency response forces 
to be always ready and always capable of forcible entry.
    Marine Aviation Plan.--The Marine Aviation Plan is designed to 
posture Marine Corps Aviation for future warfighting requirements in 
the near term (2007-2009), the mid-term (2010-2012) and the long term 
(2013-2015). The Marine Aviation Plan addresses these challenges by 
restructuring the force and managing current aircraft procurement 
Programs of Record.
    We will rebalance our existing Assault Support and Tactical 
Aircraft (TACAIR) structure in the reserve and active components in 
order to boost future HMH (heavy lift CH-53), HMLA (light attack UH-1 
and AH-1), and VMU (unmanned aerial vehicle) capacity. Increases to 
aviation manpower structure at the squadron, group, and wing levels 
will enhance operational readiness and better posture these units for 
combat operations and their transitions to the new H-1s, MV-22, F-35, 
KC-130J, and CH-53K. We will incorporate a fully functional and 
resourced Aircrew Training System that will align a new Training 
Transformation Plan to each Assault Support and TACAIR community as 
they transition to new aircraft in the coming years. Marine aviation 
command and control modernization will leverage our new aircraft 
capabilities by streamlining command and control functions and radar 
inventory to ensure aviation command and control remains agile, 
efficient, and responsive to the needs of the Marine Air Ground Task 
Force (MAGTF) across the spectrum of conflict. Marine aviation 
logistics process modernization applies an overarching approach to 
understanding readiness, related costs, and the removal of performance 
barriers with the goal of enhancing our warfighting capabilities while 
husbanding resources.
    The Marine Aviation Plan shapes the future of Marine Aviation to 
meet the diverse missions of today's and tomorrow's battlefields, and 
provides the Marine Air Ground Task Force with improved capabilities, 
unit manning, and a thorough safety training system to better overcome 
known and foreseeable challenges. This plan sets in place tomorrow's 
Marine Aviation as a viable and efficient force in support of the MAGTF 
on the battlefield.
    Joint Strike Fighter.--F-35 development is on track, and will act 
as an integrated flying combat system in support of our ground forces 
and will be the centerpiece of Marine Aviation. The manufacture of the 
first test aircraft (Conventional Take-off and Landing [CTOL] variant) 
is well underway, assembly times are much better than planned, and 
exceptional quality has been demonstrated in fabrication and assembly. 
The first CTOL aircraft flew in December of 2006. Five STOVL and six 
CTOL aircraft are currently in production. The JSF acquisition 
strategy, including software development, reflects a block approach. 
The F-35B Short Take-Off/Vertical Landing (STOVL) variant is a fifth 
generation aircraft that will provide a quantum leap in capability, 
basing flexibility, and mission execution across the full spectrum of 
warfare. The Marine Corps remains committed to its vision of an all 
STOVL tactical aircraft force. Fulfilling this vision will best posture 
the Marine Corps to support our Nation and the combatant commanders, by 
enabling the future Marine Air Ground Task Force (MAGTF) to accomplish 
its expeditionary warfighting responsibilities.
    MV-22.--The MV-22 is replacing the CH-46E and CH-53D aircraft. The 
CH-46E is over forty years old, with limited lift and mission 
capabilities to support the MAGTF and the Long War. In September 2005, 
the V-22 Defense Acquisition Board approved Full Rate Production. To 
date, twenty-nine Block A and fifteen Block B aircraft have been 
delivered. Much like the F-35, the MV-22 program uses a three-block 
strategy in its procurement. Block A aircraft are training aircraft. 
Block B are operational aircraft. Block C aircraft are operational 
aircraft with mission enhancements. To date, the one V-22 Fleet 
Replacement Training Squadron, one test squadron, VMX-22, and two 
tactical VMM squadrons have stood up with the third tactical MV-22 
squadron scheduled for March 2007. MV-22 Initial Operational Capability 
is scheduled for the summer of 2007 with a continued transition of two 
CH-46E squadrons per year thereafter. The MV-22's revolutionary assault 
support capability allows the MAGTF to maximize our capstone concept of 
Expeditionary Maneuver Warfare. Our forces in harm's way deserve the 
best assault support aircraft in the world--without question, the MV-22 
is that aircraft.
    KC-130J.--The KC-130J has continuously deployed in support of OIF 
since February 2005 and has provided the warfighter a state-of-the-art, 
multi-mission, tactical aerial refueling, and fixed wing assault 
support asset. The introduction of the aerial refuelable MV-22, 
combined with the forced retirement of the legacy KC-130F/R aircraft 
due to corrosion, fatigue life, and parts obsolescence, significantly 
increases the requirement for accelerated procurement of the KC-130J. 
Twenty-five new aircraft have been delivered, and the Marine Corps is 
contracted to procure a total of forty-five aircraft by the end of 
fiscal year 2013, with four KC-130J aircraft requested in the fiscal 
year 2008 budget. This is six aircraft less than the inventory 
objective of the fifty-one aircraft needed to support the operational 
requirements of MAGTF, joint, and combined forces. As the aviation 
workhorse of the MAGTF, the KC-130J's theater logistical support 
reduces the requirement for resupply via ground, limiting the exposure 
of our convoys to IEDs and other attacks.
    CH-53K.--The CH-53K program has reached ``Milestone B'' status-
initiation of system development and demonstration. The current fleet 
of CH-53E Super Stallion aircraft will reach its fatigue life during 
this decade. The CH-53K will deliver increased range and payload, 
reduced operations and support costs, increased commonality with other 
assault support platforms, and digital interoperability for the next 
twenty-five years. The CH-53K is one of the elements that will enable 
the MAGTF and joint force to project and sustain forces ashore from the 
sea. A post Milestone B System Development and Demonstration contract 
was awarded in April 2006 and IOC is planned for fiscal year 2015.
    H-1 Upgrade.--The H-1 Upgrade Program (UH-1Y/AH-1Z) is a 
comprehensive program to resolve existing operational power margin 
issues, while significantly enhancing the tactical capability, 
operational effectiveness, and sustainability of the attack and utility 
helicopter fleet. The Corps' fleet of UH-1N Hueys is reaching the end 
of their useful life. Due to airframe and engine fatigue, the Vietnam-
era Huey routinely takes off at maximum gross weight with no margin for 
error. This aircraft is long overdue for replacement; degrading our 
ability to support our Marines in harm's way. Due to significant GWOT 
operational demands on the existing squadrons and aircraft attrition, 
the Marine Corps has adapted the ``build new'' strategy for the UH-1Y 
in fiscal year 2006 and our first two production aircraft have now been 
delivered. We are also examining a ``build new'' strategy for the AH-1Z 
to preclude significant inventory shortfalls. The H-1 Upgrade Program 
will be restructured pending a Defense Acquisition Board in March 2007.
    Command and Control (C2) Harmonization.--The C2 harmonization 
strategy incorporates joint integrating concepts and C2 mandates, and 
is a holistic approach that integrates warfighter requirements into a 
common capability to deliver an end-to-end, fully integrated, cross-
functional set of capabilities including forward-deployed and reach-
back functions. The strategy's end state is a seamless capability that 
crosses warfighting functions and supports Marines from the supporting 
establishment to our Marines in contact with the enemy, taking the best 
of emerging capabilities and joint requirements to build a single 
solution.
    The first step in this direction is the ongoing development of the 
Common Aviation Command and Control System (CAC2S). CAC2S fuses data 
from sensors, weapon systems, and C2 systems into an integrated 
display. It allows rapid, flexible operations in a common, modular, and 
scalable design by reducing the current five stovepipe systems into one 
hardware solution with streamlined equipment training. CAC2S will 
enable MAGTF commanders to control timing of organic, joint, or 
coalition effects, assault support, and ISR in their battlespace while 
operating within a joint task force. With CAC2S and C2 harmonization, a 
joint task force commander will discover that his MAGTF's battlespace 
offers maximum flexibility due to its seamless integration with joint 
and coalition partners.
    Persistent Intelligence, Surveillance, Reconnaissance.--The 
Persistent Intelligence, Surveillance, Reconnaissance (ISR) strategy is 
a component of the Marine Corps ISR-enterprise supporting Marines 
across the spectrum of military operations. Its focus is the capability 
to integrate the network of air, ground, and space sensors with 
sufficient fidelity to detect, locate, identify, track, and target 
threats. This capability also reduces the effectiveness of improvised 
explosive devices (IEDs) through the identification of personnel, 
activities, and facilities associated with the manufacture and 
emplacement of IEDs. The network is enabled through unmanned aerial and 
ground systems, human intelligence exploitation teams, ground signals 
intelligence/electronic warfare, tactical fusion centers, and pre-
deployment training programs. We continue to develop capabilities in 
coordination with the Joint IED Defeat Organization's point, route, and 
area targeting concepts. Some capabilities under development include 
unmanned aerial systems, unmanned ground sensors, wide field of view 
persistent surveillance (ANGEL FIRE), and the Ground Based Operational 
Surveillance System (GBOSS). ANGEL FIRE provides enhanced situational 
awareness and support to urban warfare, disaster relief, and other 
operations. The initial deployment of this capability is scheduled for 
late spring/summer 2007. G-BOSS is a force protection camera system 
that provides a twenty-four hour day/night persistent surveillance 
capability. The G-BOSS System of Systems concept is to integrate 
command and control; commercial off the shelf and government off the 
shelf sensors to ground, airborne, and space-based platforms. The 
military objective of G-BOSS is to detect, identify, and track 
insurgent activities, specifically associated with the emplacement of 
IEDs. The initial employment of autonomous camera tower systems has 
performed admirably in theater. The integration of a fully networked G-
BOSS system of systems is anticipated to begin in spring/summer 2007.
    Ground Mobility.--The Army and Marine Corps are leading the 
Services in developing tactical wheeled vehicle requirements for the 
joint force. The defined capabilities reflect an appropriate balance in 
survivability, mobility, payload, network enabling, transportability, 
and sustainability for the light tactical wheeled vehicle supporting 
the future joint force. The Army/Marine Corps Board has proven a 
valuable forum for coordination of tactical wheeled vehicle development 
and fielding, the production of Central Command armoring kits and up-
armored HMMWVs, and rapid response to Combatant Commander's requests 
for Mine Resistant Ambush Protected vehicles. Additionally, the Army/
Marine Corps Board has been the focal point for development of the 
joint requirements for a Joint Light Tactical Vehicle focused on 
providing protected, sustained, networked, and expeditionary mobility 
to the joint force in the light tactical vehicle weight class.
    Mine Resistant Ambush-protected (MRAP) vehicles.--MRAP vehicles are 
designed with a ``V'' shaped hull and are employed to protect against 
the three primary kill mechanisms of mines and improvised explosive 
devices--fragmentation, blast overpressure, and acceleration. These 
vehicles provide the best available protection against improvised 
explosive devices and experiences in theater have shown that a Marine 
is four to five times safer in a MRAP than in an up-armored HMMWV. 
There will be three categories of new near-term MRAP vehicles. Category 
I, a Mine Resistant Utility Vehicle, will accommodate up to six 
personnel and will be employed in urban operations. Category II 
vehicles are similar to Cougar/Joint Explosive Ordnance Disposal Rapid 
Response Vehicles, and will accommodate up to ten personnel, and will 
be multi-mission capable. Category III, Buffalo vehicles, will be used 
for route clearance and explosive ordnance disposal missions.
    The MRAP is an example of our adaptation to evolving threats. It is 
an attempt to acquire the very best technology available in the 
shortest amount of time in order to protect our Marines. The USMC 
requirement is 3,700 MRAP vehicles and we are aggressively pursuing the 
acquisition of this rapidly emerging requirement.
    Joint Light Tactical Vehicle (JLTV).--In November 2006, the Army's 
Training and Doctrine Command and Marine Corps Combat Development 
Command, in collaboration with Navy, Air Force, and Special Operations 
Command representatives, received Joint Staff approval of the Ground 
Combat Forces Light Tactical Mobility Initial Capability Document, 
documenting joint forces' capability needs for the light tactical 
wheeled vehicle fleet. During December 2006, Army and Marine Corps 
combat developers staffed the JLTV Capability Development Document, 
defining requirements for the long-term HMMWV replacement.
    Marine Personnel Carrier (MPC).--MPC development is on schedule. In 
January 2007, the Marine Corps staffed the Initial Capabilities 
Document, framed the Capabilities Development Document and initiated 
planning for the Analysis of Alternatives leading to a Marine Personnel 
Carrier material solution, moving toward an Initial Operational 
Capability in the 2012 timeframe. The MPC will possess a balance 
between performance, protection, and payload and will increase infantry 
battalion protected mobility and light armored reconnaissance battalion 
striking power. It will serve as a balanced expeditionary armored 
personnel carrier easily optimized for irregular warfare, but effective 
across the range of military operations.
    M1114 HMMWV--Upgrade via Fragmentation Kit 2 and Fragmentation Kit 
5.--The Corps' already fielded M1114 fleet is undergoing an upgrade 
with Fragmentation Kits 2 and 5. Fragmentation Kit 2 enhances ballistic 
protection in the front driver and assistant driver wheel-well. 
Fragmentation Kit 5 degrades improvised explosive device effects and 
reduces armor debris that results from overmatch. Installation of both 
Fragmentation Kits is underway, with anticipated completion in March 
2007. We will continue to evaluate the U.S. Army's objective kit 
development and share information and lessons learned. All new Marine 
Corps deliveries of M1114, M1151, M1152, and M1165 HMMWV's will have 
Fragmentation Kits 2 and 5 level capability integrated.
    MAGTF Fires.--Several innovative systems related to fire support 
significantly enhance the warfighting efficiency and effectiveness of 
the Marine Air Ground Task Force (MAGTF). Such systems include the M777 
Lightweight Howitzer, High Mobility Artillery Rocket System, 
Expeditionary Fire Support System, Advanced Field Artillery Tactical 
Data System, and the Target Location, Designation, and Handoff system.
    M777 Lightweight Howitzer.--The new M777 lightweight howitzer 
replaces the M198 howitzers. It can be lifted by the MV-22 Osprey and 
the CH-53E helicopter and is paired with the Medium Tactical Vehicle 
Replacement truck for improved cross-country mobility. The M777, 
through design innovation, navigation, positioning aides, and digital 
fire control, offers significant improvements in lethality, 
survivability, mobility, and durability over the M198 howitzer. The 
Marine Corps began fielding the first of 356 new howitzers to the 
operating forces in April 2005 and expects to complete fielding in 
calendar year 2009.
    High Mobility Artillery Rocket System (HIMARS).--The HIMARS fills a 
critical range and volume gap in Marine Corps fire support assets by 
providing 24-hour, all weather, ground-based, indirect precision and 
volume fires throughout all phases of combat operations ashore. We will 
field forty HIMARS (eighteen to the active component, eighteen to the 
reserve component, and four to the Supporting Establishment). When 
paired with the acquisition of Guided Multiple Launch Rocket System 
rockets, HIMARS will provide a highly responsive, precision fire 
capability to our forces in conventional as well as unconventional 
operations.
    Expeditionary Fire Support System (EFSS).--The EFSS will be the 
principal indirect fire support system for the vertical assault element 
of MAGTFs executing Ship-to-Objective Maneuver. It is a towed 120 mm 
mortar and when paired with an internally transportable vehicle, will 
be transported aboard MV-22 and CH-53E aircraft. EFSS-equipped units 
will provide the ground component of a vertical assault element with 
immediately responsive, organic indirect fires at ranges beyond current 
infantry battalion mortars. Initial operational capability is planned 
during calendar year 2007, and full operational capability is planned 
for fiscal year 2010.
    Target Location, Designation, and Handoff System (TLDHS).--TLDHS is 
a modular, man-portable equipment suite that will provide the ability 
to quickly acquire targets and digitally transmit data to supporting 
arms elements for attack, as well as designate targets for laser-
seeking precision guided munitions and laser spot trackers. The system 
will be capable of providing target location within fifty meters and 
designating targets at 5,000 meters. TLDHS will be fielded to forward 
observer teams, naval gunfire spot teams, tactical air control parties, 
and reconnaissance teams. Block II, scheduled for fielding in late 
fiscal year 2007, will communicate with all Naval Strike aircraft, the 
AFATDS, and the Naval Fire Control System.
    Counter-Sniper technology.--The Marine Corps Warfighting Laboratory 
is leading a four-pronged approach to counter the sniper threat. 
Focused on increasing our ability to sense and warn, deny, protect, and 
respond, we are leveraging the cooperative efforts of Defense Advanced 
Research Projects Agency, our sister Services, the Marine Corps 
Intelligence Activity, and the National Ground Intelligence Center.
    Future sense and warn capabilities may include optical, acoustic, 
and infrared detection and location. We are examining different 
obscurant technologies, while our protection effort focuses on 
improving individual armor and new tactics, techniques, and procedures. 
Detection of threat optics will provide indications and warning of 
impending sniper or IED attacks, and a predictive capability to avoid 
or engage prior to sustaining friendly casualties. One potential denial 
method is through use of glare aversion devices which apply a non-
injurious, but discomforting, bright light. Assessment of the response 
can help determine hostile intent, and the glare aversion effect may be 
effective in prohibiting a sniper from visually targeting friendly 
forces. Our response capability efforts include examination of counter-
sniper vehicles and the Defense Advanced Research Projects Agency's 
sniper rifle program. Finally, we are using experimentation to combat 
the sniper threat through advanced equipment and improved tactics, 
techniques, and procedures. Ongoing joint and interagency cooperation, 
coupled with industry collaboration, will shape our future experiments.
    Secure Internet Routing Protocol Network.--The continuing evolution 
and maturation of network threats, along with the asynchronous nature 
of network intrusions and vulnerabilities, requires the Marine Corps to 
seek improvements in network defense. The Secure Internet Routing 
Protocol Network, SIPRNET, is a highly secure network, physically and 
logically separate from unclassified networks and the Internet. In the 
near future, we foresee greater reliance on the SIPRNET to enhance the 
security of Marine Corps war fighting and business operations. This 
effort will require additional resources, which will prove well worth 
the investment as we secure our networks and provide for better 
operational and force protection.
                  naval operating forces and concepts
    As the ``Arc of Instability'' is substantially a maritime domain, a 
naval force is uniquely suited to respond and provide forward-deployed 
expeditionary combat forces in response to crises. It is the Marine 
Corps' obligation to provide our Nation a naval force that is fully 
prepared for employment as a Marine Air Ground Task Force operating 
across the spectrum of conflict. The Nation invests tremendous 
resources knowing that the ability to project power from the sea is a 
prerequisite for defending our sovereignty. To maneuver from the 
freedom of the seas provides timely and reliable response solutions to 
our Nation. In concert with the U.S. Navy, we support the law of the 
sea convention, which preserves our ability to maneuver from the sea.
    As demonstrated by the Navy-Marine Corps responses to hurricanes 
Katrina and Rita, tsunami relief in southern Asia, and noncombatant 
evacuation operations in Lebanon, maneuvering from the sea is a 
relevant capability possessing the flexibility to meet our country's 
needs both around the world and at home. Marines and Sailors embarked 
from amphibious platforms provide asymmetric, sustainable, and rapidly 
responsive solutions to our Combatant Commanders.
    Working closely with our Navy and Coast Guard partners, we will 
advance the amphibious and expeditionary capabilities the Combatant 
Commanders rely on to meet their emerging challenges, strengthen 
concepts and training that enhance naval contributions to the Long War, 
and provide a naval force that is fully prepared for employment across 
the full spectrum of conflict.
    Concepts to Capabilities.--In September 2006, the Navy and Marine 
Corps published a new Naval Operations Concept (NOC), which provides 
our unified vision for the future and broadly describes how naval power 
and influence can be applied at and from the sea, across the littorals, 
and ashore. In tandem, we revised our Marine Corps Operating Concepts 
(MOC) for a Changing Security Environment, incorporating our lessons 
learned and the unified vision provided in the NOC. Building on the 
conceptual foundation for littoral power projection provided in 
Operational Maneuver from the Sea, the Naval and Marine Corps Operating 
Concepts call for more widely distributed forces to provide increased 
forward presence, security cooperation with an expanding set of 
international partners, preemption of non-traditional threats, and a 
global response to crisis in spite of challenges to access. 
Collectively, these concepts provide the foundation for selectively 
conducting either distributed or aggregated operations.
    Due to changes to the security environment and the effects of 
globalization, the Navy, Coast Guard, and Marine Corps have all 
concurred with the need to reexamine our maritime strategy. Early this 
summer, we intend to produce a new maritime strategy in order to 
articulate the ways and means by which maritime forces will support the 
Nation's strategic ends in the new security era.
    Amphibious Warfare Ships.--Amphibious warfare ships are the 
centerpiece of the Navy-Marine Corps' forcible entry and Seabasing 
capability, and have played an essential role in the Long War. These 
ships are equipped with aviation and surface assault capabilities, 
which coupled with their inherent survival and self-defense systems, 
makes them ideally suited to support a broad range of mission 
requirements. This survivability is critical to ensure the Nation has 
the widest range of response options. Not only must our naval forces 
maintain the ability to rapidly close, decisively employ, and 
effectively sustain Marines from the sea, they must also respond to 
emerging Long War requirements, crisis response, and humanitarian 
assistance missions on short notice around the world.
    For forcible entry, the Marine Corps' requirement is a single, 
simultaneously-employed two Marine Expeditionary Brigade (MEB) assault 
capability. One MEB requires seventeen amphibious warfare ships; 
however, given the fiscally constrained environment, the Navy and 
Marine Corps have agreed to assume risk by only using fifteen. 
Historical amphibious ship availability rates dictate a minimum of 
eleven ships of each of the current types of amphibious ship--a minimum 
of thirty-three total ships--resulting in a Battle Force that provides 
thirty operationally available amphibious warfare ships. In that Battle 
Force, ten aviation-capable big deck ships (LHA/LHD/LHA(R)) and ten LPD 
17 class ships are required to accommodate the MEB's aviation combat 
element.
    Amphibious Transport Dock (LPD).--The LPD 17 San Antonio class of 
amphibious warfare ships represents the Department of the Navy's 
commitment to a modern expeditionary power projection fleet that will 
enable our naval force to operate across the spectrum of warfare. The 
Navy took delivery of the first LPD 17 in the summer of 2005 and 
operational evaluation is scheduled to begin in the summer of 2007. The 
LPD 17 class replaces four classes of older ships--the LKA, LST, LSD 
36, and the LPD 4--and will have a forty-year expected service life. 
LPD 17 class ships will play a key role in supporting the ongoing Long 
War by forward deploying Marines and their equipment to respond to 
crises abroad. Its unique design will facilitate expanded force 
coverage and decreased reaction times of forward deployed Marine 
Expeditionary Units. In forcible entry operations, the LPD 17 will help 
maintain a robust surface assault and rapid off-load capability for the 
Marine Air Ground Task Force far into the future.
    Amphibious Assault Ship (Replacement) (LHA(R)).--The Tarawa class 
amphibious assault ships reach the end of their service life during the 
next decade (2011-2015). An eighth Wasp class LHD (multi-purpose 
amphibious assault ship) is under construction and will replace one 
Tarawa class ship during fiscal year 2008. In order to meet future 
warfighting requirements and fully capitalize on our investment in the 
MV-22 and Joint Strike Fighter, ships with enhanced aviation 
capabilities will replace the remaining LHA ships. These ships will 
provide enhanced hangar and maintenance spaces to support aviation 
maintenance and increased jet fuel storage and aviation ordnance 
magazines. The lead ship, LHA 6, is on track for detailed design and 
construction contract award during fiscal year 2007, with advanced 
procurement funds already provided in the fiscal year 2005 and 2006 
budgets.
    The Maritime Prepositioning Force.--Our proven Maritime 
Prepositioning Force--capable of supporting the rapid deployment of 
three Marine Expeditionary Brigades--is an important complement to our 
amphibious warfare capability. Combined, these capabilities provide the 
Marine Corps the ability to rapidly react to a crisis in a number of 
potential theaters and the flexibility to employ forces across the 
battlespace. The natural progression of this capability set, the 
Maritime Prepositioning Force (Future) (MPF(F)), is a key enabler of 
Seabasing and will build on the success of the legacy Maritime 
Prepositioning Force program. MPF(F) will provide support to a wide 
range of military operations with capabilities such as at-sea arrival 
and assembly, selective offload of specific mission sets, and long-
term, sea-based sustainment. The squadron will be capable of 
prepositioning the Marine Expeditionary Brigade's critical equipment 
and sustainment; but this capability does not constitute a forcible 
entry capability. The MPF(F) squadron composition decision was made by 
the Acting Secretary of the Navy in May 2005; the program is currently 
in the technology development phase of acquisition, with a Milestone B 
decision planned in fiscal year 2008.
    High Speed Connectors.--High-speed connectors will facilitate the 
conduct of sustained sea-based operations by expediting force closure 
and allowing the persistence necessary for success in the littorals. 
Connectors are grouped into three categories: inter-theater, the Joint 
High Speed Sealift (JHSS), which provides strategic force closure for 
CONUS-based forces; intra-theater, the Joint High Speed Vessel (JHSV) 
that enables rapid closure of Marine forces and sustainment; and the 
Joint Maritime Assault Connector, to move troops and resources from the 
sea base to shore. These platforms will link bases and stations around 
the world to the sea base and other advanced bases, as well as provide 
linkages between the sea base and forces operating ashore.
    Ship-to-Shore Mobility.--For decades, Marine power projection has 
included a deliberate buildup of combat power ashore. Only after naval 
forces fought ashore and established a beachhead would the MAGTF begin 
to focus its combat power on the joint force's operational objective. 
Advances in mobility, fires, and sustainment capabilities will enable 
greater penetration and exploitation operations from over the horizon, 
by both air and surface means, with forces moving rapidly to 
operational objectives without stopping to seize, defend, and build up 
beachheads or landing zones. The Expeditionary Fighting Vehicle, MV-22 
Osprey, and CH-53K heavy lift helicopter are critical to achieving the 
necessary forcible entry capabilities of the future.
    Expeditionary Fighting Vehicle.--The Marine Corps provides the 
Nation's joint warfighting forces with a unique, flexible, and 
effective capability to conduct forcible entry operations from the sea. 
The Expeditionary Fighting Vehicle (EFV), the Corps' largest ground 
combat system acquisition program, is the sole ground combat vehicle 
that enables projection of combat power from a sea base. It will 
replace the aging Assault Amphibious Vehicle that has been in service 
since 1972 and will become a complementary component of our modernized 
fleet of tactical vehicles that include the Joint Light Tactical 
Vehicle, the Marine Personnel Carrier, and the Internally Transportable 
Vehicle. The EFV's amphibious mobility, day and night lethality, 
enhanced force protection capabilities, and robust communications will 
help the joint force meet security challenges across the spectrum of 
conflict. The over-the-horizon capability of the EFV will also enable 
amphibious ships to increase their standoff distance, no longer 
requiring them to close within the striking distance of many coastal 
defense systems in order to launch their amphibious assault platforms. 
The EFV will be specifically well suited to maneuver operations 
conducted from the sea and sustained operations in the world's littoral 
regions.
    The Marine Corps recently conducted a demanding operational 
assessment of the EFV. It successfully demonstrated most critical 
performance requirements, but the design complexities are still 
providing challenges to system reliability. To that end, we conducted a 
comprehensive requirements review to ensure delivery of the required 
capability while reducing complexity of the system where possible. For 
example, the human stresses encountered during operations in some high 
sea states required us to reevaluate the operational necessity of 
exposing Marines to those conditions. Based upon this review, and a 
subsequent engineering design review, we will tailor final requirements 
and system design to support forcible entry concepts while ensuring the 
EFV is a safe, reliable, and effective combat vehicle.
    Supporting Capabilities.--Logistics Modernization is the largest 
coordinated and cross-organizational effort ever undertaken to 
transform Marine Corps logistics. A three-pronged improvement and 
integration initiative focusing on Marine Corps personnel, processes, 
and technology, Logistics Modernization is integrating and streamlining 
supply, maintenance, and distribution. As our roadmap for more 
effective and efficient expeditionary logistics, Logistics 
Modernization is multiplying our ability to support the Marine Air 
Ground Task Force across the spectrum of conflict, in all environments 
and across all levels of theater maturity.
     beyond the horizon--posturing the marine corps for the future
    History has proven that we cannot narrowly define the conditions 
for which our military must be ready. With little warning, our Nation 
has repeatedly called its Corps front and center--in the southern 
Pacific after Pearl Harbor, in Korea after the communist invasion in 
1950, in the mountains of Afghanistan after 9/11, and in southern Asia 
in the wake of the catastrophic tsunami of 2004. Each of these 
strategic surprises demonstrates the broad range of possibilities for 
which the Marine Corps must be prepared.
    The Long War requires a multi-dimensional force that is well 
trained and educated for employment in all forms of warfare. 
Historically, our Corps has produced respected leaders who have 
demonstrated intellectual agility in warfighting. Our current 
deployment tempo increasingly places our Professional Military 
Education (PME) programs at risk. No level of risk is acceptable if it 
threatens the steady flow of thinkers, planners, and aggressive 
commanders who can execute effectively across the entire spectrum of 
operations.
    The Future of Training and Education.--Looking ahead to the 
challenges of the Long War, we have enhanced our counterinsurgency 
capabilities while remaining vigilant that our Marine Air Ground Task 
Forces must remain ready to launch robust forcible entry operations and 
succeed across the spectrum of conflict with our naval partner. With 
Marine forces so closely engaged in an irregular fight, we will have to 
take extraordinary steps to retain this ability to serve as the 
Nation's shock troops during major conventional combat operations. Your 
support of our training and education needs will allow us to remain 
faithful to our enduring mission: to be where the country needs us, 
when she needs us, and to prevail over whatever challenges we face.
    The Training Continuum.--Some things remain constant--we continue 
to ensure that all Marines, regardless of occupational specialty, gain 
the self-confidence and skills derived from our warrior ethos ``Every 
Marine a Rifleman.'' The experience at boot camp remains legendary; 
this transformation of young Americans is a national treasure--one that 
we must preserve and guard carefully. The core values of Honor, 
Courage, and Commitment--imprinted on their souls during recruit 
training and strengthened thereafter--mark a Marine's character for a 
lifetime. To reinforce this transformation, we have focused the 
emphasis of our officer and enlisted professional military education on 
combat leadership.
    Marine training is built along a continuum that is well defined, 
well structured, and of which we are extremely proud. Marines are 
forged in the furnace of recruit training and tempered by shared 
hardship and tough training. This transformation process begins the day 
they meet their recruiter, who introduces them to the concept of total 
fitness: body, mind, and spirit. It continues through their common 
experiences at Recruit Training and its Crucible, and Marine Combat 
Training. It moves on to skill training at one of our schools or at a 
sister Service school. It culminates with assignment to an operational 
unit with its own demanding training, where a powerful bond of trust 
develops between fellow warriors as they experience the rigors of 
combat against a diverse and adaptive foe.
    The Infantry Battalion Enhancement Period Program (IBEPP).--Long 
War operations have significantly increased our training requirements. 
Marines must now train to a broader range of skills; however, due to 
high operational tempo, we face ever-decreasing timetables for Marines 
to achieve mastery of these skills. Our first major initiative to 
maximize effective use of available time was the establishment of a 
standardized and well-defined Pre-deployment Training Program. To 
bolster home station training, we took an additional step by 
establishing the Infantry Battalion Enhancement Period Program (IBEPP). 
The primary goal of the IBEPP is to facilitate better small unit leader 
training within the infantry battalion. Highlights of the IBEPP include 
expanded quotas for rifle squad leader courses (sergeants) and a new 
tactical small unit leader course focused on fire team leaders 
(corporals). Additionally, we have updated our School of Infantry 
curriculum to incorporate the additional equipment added to our new 
infantry battalion table of equipment and increased the instructor base 
at our Schools of Infantry to support the new IBEPP.
    Expansion of our Weapons and Tactics Training Program.--We find 
ourselves in a cycle of rapid innovation of weapons and tactics with 
our enemies. This cycle challenges the creativity and knowledge of 
staff officers in our ground and combat logistics battalions who must 
direct training programs or staff combat operations. Our aviation 
squadrons experienced this during the Vietnam conflict. To address 
those challenges, we created the Weapons and Tactics Training Program 
to develop and field a cadre of aviators with advanced understanding of 
weapon and tactical innovations as well as the concepts and 
requirements to train other aviators to adapt to these trends. This 
program placed prestige on training expertise and now provides an 
effective means by which Marine Aviation stays current on battlefield 
innovations. We will soon apply the fundamentals of that program to our 
ground staffs. The ground and logistics Weapons and Tactics Training 
Program will produce ground Marines expert in training and warfighting 
functions who will improve their units' ability to fight. Though we are 
assessing detailed requirements, we anticipate this effort could 
require up to 150 instructors, and increased demands on combined arms 
ranges, artillery and aviation units, simulation centers, and suites of 
operations center equipment.
    Marine Corps Lessons Learned Management System.--This adaptive 
enemy requires us to have a responsive and collaborative dialogue 
across the Corps. Our interactive and effective lessons management 
system promptly captures and disseminates the lessons being learned by 
our Marines and Sailors in complex combat actions around the globe. Our 
web-based lesson input support tool--selected by the Joint Staff last 
year to serve as the Department standard--guides this learning process. 
Capitalizing on the institutional agility that has been a hallmark of 
our success, last year we implemented changes in such areas as crew-
served weapons use, tactical questioning, evidence gathering 
procedures, command and control equipment training and procedures, 
civil-military operations, and detainee handling.
    Center for Advanced Operational Culture Learning.--An example of 
adaptation for the Long War includes our Center for Advanced 
Operational Culture Learning, which we established during May 2005 and 
recently reached its full operational capability. Both officer and 
enlisted Marines now receive education in the operational aspects of 
culture at nearly every phase of their career development. This year, 
the Center is establishing Language Learning Resource Centers at our 
eight largest bases and stations. These centers provide language 
instruction using mobile language training shelters and contracted 
professional language trainers. These efforts support the Defense 
Language Transformation Roadmap increasing our interoperability with 
partner nations around the globe. We are also expanding our Foreign 
Area Officer program, creating language and culture experts from all 
occupational specialties who can be integrated into Marine units 
deployed worldwide. We thank the Congress for its support in this 
venture, as recent supplemental funding has proved instrumental to this 
effort.
    Advisor Training.--During 2006, we institutionalized the structure, 
resources, and equipment to advance the individual skills and education 
of Marines selected to serve as advisors to partner military units. Our 
Security Cooperation and Education Training Center had already trained 
over fifty deploying advisor teams during 2004 and 2005. This formal 
establishment allowed us to increase our efforts, as we trained 
seventy-seven advisor teams during 2006. Additionally, we expanded 
advisor skills with upgrades to training in such areas as foreign 
weapon handling, medical procedures and survival, evasion, resistance, 
and escape. This year we are establishing a Civil Military Operations 
Center of Excellence within this Center, as the Marine Corps' focal 
agency for civil-military operations training and education.
    Training Marine Air Ground Task Forces.--Our continuing adaptations 
and investments in Core Values are checked once more prior to 
deployment with a series of unit mission rehearsals. These exercises 
occur during the culminating block of our formal Pre-deployment 
Training Program, which we expanded during 2004 to serve all deploying 
Marine Air Ground Task Forces. These mission rehearsals present all 
deploying personnel with increasingly complex situations designed to 
replicate the confusing swirl of combat on a complex battlefield. Role 
players, many of whom are Iraqi-Americans, portray battlefield 
civilians and insurgents alike, presenting exercise-worn Marines with 
sudden ``shoot-don't shoot'' decisions and forging within our Marines a 
sense of common cause with the civilians they will soon protect. The 
culmination of our pre-deployment training consists of three distinct 
exercises: Mojave Viper, Desert Talon, and Mountain Warrior--each 
specifically tailored to the deploying unit's destination combat 
environment.
    During 2006, we continued to modify this program with expanded 
training in force escalation and with increased integration of 
logistics combat units. To better prepare Marines to counter the threat 
of improvised explosive devices, we added more training devices, built 
new ranges, and employed electronic warfare specialists at our 
rehearsal sites. This year we are focusing our enhancements on the 
training of advisor teams and of Marine Air Ground Task Force staffs by 
increasing the use of simulation. Our planned improvements promise to 
deliver Marine forces ready to more effectively meet the emerging 
challenges faced by the Combatant Commanders as a naval force in 
readiness in joint, combined, and interagency operations.
    Modernization of Training Ranges.--With the support of the 
Congress, we also recently began the most ambitious modernization of 
our training ranges since World War II. From larger and more realistic 
urban training facilities to increased opportunities to evaluate 
advanced air-ground coordination, we have significantly improved the 
realism, safety, and capacity of our ranges and training areas. While 
our immediate focus has been to acquire infrastructure and modern 
technology, our long-term investment is in people, largely civilian, to 
both operate and maintain these facilities and to form the critical 
training cadres capable of maintaining the realism our Marine Air 
Ground Task Forces require. Your continued support of our range 
modernization efforts, as well as the support for the Department's 
programs to ensure future access to adequate sea, air, and land space 
for our training ranges, remains vital to our ability to prepare for 
the challenges of the future with our joint, coalition, and interagency 
partners.
    Marine Aviation Training Systems Program.--The Aviation Training 
Systems Program (ATSP) plans, executes, and manages Marine Aviation 
Training to achieve individual and unit combat readiness through 
standardized training across all aviation core competencies. Through 
the ATSP, Marine Aviation develops aircraft systems that enhance 
operational readiness, improve safety through greater standardization, 
and significantly reduce the life cycle cost of maintaining and 
sustaining aircraft.
    Core Values and Ethics Training.--During this past year, we also 
reviewed our efforts to instill in Marines those core values necessary 
to guide them correctly through the complex ethical demands of armed 
conflict. We have ensured that every Marine, at every phase of the 
training continuum, studies ethical leadership, the Law of War, 
escalation of force, and Rules of Engagement. Our entry-level training 
first presents these concepts in the classroom, and then tests for 
proper application of these principles under stressful field exercises. 
We further reinforce confident, ethical decision-making through the 
Marine Corps Martial Arts Program that teaches our Core Values and 
presents ethical scenarios pertaining to restraint and proper 
escalation of force as the foundation of its curriculum. We imbue our 
Marines with the mindset that ``wherever we go, everyone is safer 
because a U.S. Marine is there.''
    Building Esprit and Warrior Pride.--The Marine Corps dress blue 
uniform is as legendary as the Marines who wear it. However, while this 
well-known uniform is one of the most admired uniforms in the world, 
owning one is out of the reach of most enlisted Marines--it simply 
costs too much for them to buy on their own.
    No Marine should be denied the honor of wearing this symbol of more 
than two centuries of bravery and sacrifice. Therefore, I have ordered 
that every Marine recruit now be issued a dress blue uniform before 
they graduate from Boot Camp, and all enlisted Marines are to receive 
an appropriate clothing allowance so that they are able to purchase and 
maintain a dress blue uniform. They have earned this privilege.
      improve the quality of life for our marines and our families
    Enhancing Individual Survivability--Personal Protective 
Equipment.--The Corps will continue to pursue technological 
advancements in personal protective equipment--our Marines deserve 
nothing less. Fully recognizing the trade-off between weight, 
protection, fatigue, and movement restriction, we are providing Marines 
the latest in personal protective equipment--such as the Modular 
Tactical Vest, Quad Guard, Lightweight Helmet, and Flame Resistant 
Organizational Gear.
    Body Armor.--Combat operations in Iraq and Afghanistan have 
highlighted a need to evolve our personal protective vest system. 
Therefore, in February, we started transitioning to a newly designed 
Modular Tactical Vest or MTV. This vest is virtually the same weight as 
its predecessor, the Outer Tactical Vest, but it more easily integrates 
our other personal protection systems. It provides greater comfort 
through the incorporation of state-of-the-art load carriage techniques 
that better distributes the combat load over the torso and onto the 
hips of the Marine. The acquisition objective for the Modular Tactical 
Vest is 60,000 systems, with anticipated completion of deliveries in 
December 2007. The MTV also incorporates our existing Enhanced Small 
Arms Protective Inserts, or E-SAPI, and Side SAPI plates. These plates 
are currently provided to every Marine in theater. The E-SAPI provides 
the best protection available against a wide variety of small arms 
threats, to include protection against 7.62 mm ammunition threats.
    QuadGard.--The QuadGard system is designed to provide ballistic 
protection for a Marine's arms and legs when serving as a gunner on 
convoy duty. This system, which integrates with other personal 
ballistic protection equipment such as the Modular Tactical Vest, 
Enhanced SAPI, and Lightweight Helmet, reduces minimum standoff 
distances from the Marine to ballistic threats, particularly improvised 
explosive device fragmentation.
    Lightweight Helmet.--We are committed to providing the best head 
protection available to our warfighters. The Lightweight Helmet weighs 
less than its predecessor, and provides a high level of protection 
against fragmentation threats and 9 mm bullets. We now require use of 
the pad system as study results demonstrated it provides greater 
protection against non-ballistic blunt trauma than the sling suspension 
system. We are retrofitting more than 150,000 helmets with the pad 
system and have already fielded enough helmet pads for every deployed 
Marine. Beginning in January, all Lightweight Helmets produced by the 
manufacturer are now delivered with the approved pad system installed.
    Flame Resistant Organizational Gear (FROG).--In February, we began 
fielding FROG to all deployed and deploying Marines. This life saving 
ensemble of clothing items--gloves, balaclava, long-sleeved fire 
resistant shirt, combat shirt, and combat trouser--is designed to 
mitigate potential injuries to our Marines from flame exposure. These 
clothing items provide protection that is comparable to that of the 
NOMEX combat vehicle crewman suit/flight suit.
    With this mix of body armor, undergarments, and outerwear, 
operational commanders can determine what equipment their Marines will 
employ based upon mission requirements and environmental conditions.
    Taking Care of our Marines and Their Families.--Just as every 
Marine makes a commitment to the Corps and the Nation when they earn 
the title Marine, we make an enduring commitment to every Marine and 
Marine family. Marines are renowned for ``taking care of our own.'' 
Part of taking care of our own means we will provide for Marines and 
their families through appropriate pay and compensation, housing, 
health care, infrastructure, and community services. Strong 
Congressional support for many Administration initiatives has made 
possible the significant investments required to improve each of the 
components of quality of life. This support requires continuous 
assessment to ensure that it is both sufficient and relevant, 
particularly during war. These programs must be on a wartime footing to 
seamlessly sustain our Marines and their families for the duration--
long past the redeployment of our Marines and Sailors.
    We are scrutinizing the support for our Marines and their families 
to ensure our family support programs remain on a wartime footing--
particularly those that assist in integrating civilian, military, 
charitable, and Veterans Affairs programs. This support targets both 
Marines who suffer from the physical costs of this war, and those who 
carry unseen scars--those suffering from Traumatic Brain Injury (TBI) 
and Post-Traumatic Stress Disorder (PTSD). As I testified in my 
confirmation hearing, I feel strongly that these wounds of war should 
be characterized as any other wound--and our commitment to those 
Marines who suffer from these ailments will not falter.
    We continue to aggressively monitor post-deployment mental health 
screenings, suicides, domestic violence, and divorce rates. Marine 
commanders and noncommissioned officers at every level are charged to 
monitor these indications closely and to stay engaged on these issues. 
Our Casualty Assistance, Marine For Life, and Combat/Operational Stress 
Control Program continue to be the frontline of support to our wartime 
efforts.
    Casualty Assistance.--Each fallen Marine is a tragic loss to the 
survivors, the Corps, and our Nation. We endeavor to honor their 
sacrifices with sincerity and commitment. Our Casualty Assistance Calls 
Officers are trained to treat next of kin and other family members as 
they would their own family. Rendering casualty assistance begins with 
the basic tenet that there is no standard casualty call; each case is 
distinct, as families grieve in different ways. Assistance to surviving 
families is individually tailored to facilitate their transition 
through the stages of grief and the completion of the casualty 
assistance process.
    Wounded Warrior Regiment.--While the support to our Marine Corps 
and families has been exceptional, I intend to increase this support 
through the creation of a Wounded Warrior Regiment. This new regimental 
headquarters will provide centralized oversight of the care for our 
wounded Marines and assist in the integration of their support with 
military, Department of Veterans Affairs, charitable, and civilian 
systems. The regiment will have a battalion headquarters on each coast, 
commanded by officers personally selected by me. My criteria for this 
leadership will be rigorous, as I will seek to select only those 
officers with previous command experience. My staff is reviewing the 
fiscal program requirements for this unit now--to include facilities, 
manning, and support requirements. I view this initiative as a personal 
priority to fulfill our commitment to these valiant Americans.
    Traumatic Brain Injury (TBI).--As the quality of individual combat 
armor has increased, so have the number of blast survivors and Marines 
with Traumatic Brain Injury. Mild to moderate traumatic brain injuries 
can be difficult to diagnose and yet can cause changes in personality, 
cognition, and memory that significantly impair a service member's 
ability to make the life and death decisions required of them while in 
a combat environment. TBI and Post-Traumatic Stress Disorder (PTSD) 
have many symptoms in common, and TBI can co-occur with PTSD. Recent 
measures to mitigate the impact of traumatic brain injuries to 
individual Marines and their units include the release of a medical 
guidance letter from the Medical Officer of the Marine Corps outlining 
proper diagnosis and treatment strategies.
    Post-Traumatic Stress Disorder (PTSD).--The science of diagnosing 
and treating Post-Traumatic Stress Disorder continues to evolve. The 
Marine Corps Combat Development Command, Training and Education 
Command, Naval Health Research Center, and others are studying ways to 
identify risk and protective factors for Post-Traumatic Stress Disorder 
and to increase our resilience to stress. By improving the awareness of 
both individuals and our leaders, we can provide early identification 
and psychological first aid to those who are stress-injured. Better 
screening and referral of at-risk Marines is underway via pre- and 
post-deployment standard health assessments that specifically screen 
for mental health problems. Navy Medicine has established new 
Deployment Health Centers with additional mental health providers 
readily available to treat Post-Traumatic Stress Disorder and other 
combat stress injuries. The Department of Veterans Affairs and the 
Department of Defense have established comprehensive guidelines for 
managing Post-Traumatic Stress, which are available to all services. 
The Marine Corps, Navy Medicine, and Veterans Affairs have coordinated 
a Seamless Transition program to help our Marine veterans move smoothly 
into the Veterans Affairs treatment system to get the help they need 
and deserve. In addition, Veterans Affairs Readjustment Centers at 209 
communities around the country now provide mental health services for 
eligible active and discharged veterans and their families.
    Combat/Operational Stress Control (COSC).--Battlefields are 
familiar territory for Marines--we train Marines to excel in chaotic 
and unpredictable surroundings. Yet all Marines will experience combat/
operational stress to some extent, as transient symptoms for most, but 
as persistent stress injuries for others. Managing combat stress is 
vital to the operation of the Marine Corps as a fighting force and the 
long-term health and well-being of Marines and their families. All 
deploying Marines receive warrior preparation, transition briefs, and 
health assessments. In addition, mental health professionals or 
specially trained medical officers brief Marine leaders on the 
prevention and management of adverse stress reactions. We have also 
implemented the innovative Operational Stress Control and Readiness 
(OSCAR) program, which embeds mental health providers with ground 
forces. Operational Stress Control and Readiness provides early 
identification and treatment of combat/operational stress problems, 
attempts to defeat the stigma of combat stress, and overcomes the 
barriers to care.
    The Combat/Operational Stress Control deployment cycle resources 
for families include the Family Deployment Support Program. The 
program's components consist of Family Readiness Days, family crisis 
support services, Return and Reunion Briefs for spouses, and building a 
sense of community among our military families.
    Marine For Life.--The Marine For Life Injured Support program 
assists seriously and very seriously injured Marines, Sailors who 
served with Marines, and their families. This program bridges the gap 
between military medical care and the Department of Veterans Affairs by 
providing individualized support through the transition period.
    Individual case tracking and enduring support for our injured 
Marines and Sailors complements the Office of the Secretary of 
Defense's Military Severely Injured Center, which enables the program 
to provide around-the-clock injured support service. Marine For Life 
provides support tailored to an individual's needs, including pre- and 
post-service separation case tracking, assistance with the physical 
evaluation board process, and an interactive website that acts as a 
clearinghouse for all disability and benefit information. The program 
also provides employment assistance through a preexisting Marine For 
Life network that establishes local coordination with veterans, public, 
private, and charitable organizations that provide support to our 
injured warriors.
    In April 2005, Marine For Life integrated Marine Corps and 
Department of Veterans Affairs' handling of Marine cases by assigning a 
Marine field grade officer to the Department of Veterans Affairs 
Headquarters' Seamless Transition Office. This integrates Marines into 
the Department of Veterans Affairs system and provides service 
oversight of Veterans Health Administration care and Veterans Benefits 
Administration benefits delivery. The Marine For Life program provides 
the direct point of contact for problem resolution for Marines within 
the Veterans Administration system.
    Military Construction--Bachelor Enlisted Quarters Initiative.--
Bachelor housing is my top military construction priority for Program 
Objective Memorandum 2008. Barracks are a linchpin in the quality of 
life for our single Marines. With the help of Congress, we have tripled 
the funding for bachelor housing from fiscal year 2006 to 2007, and if 
the President's request is funded, we will double the 2007 funding in 
fiscal year 2008. We are funding barracks' furnishings on a seven-year 
replacement cycle and prioritizing barracks repair projects to preempt 
a backlog of repairs. Our $1.7 billion barracks investment plan in 
support of a 175,000 Marine end strength provides adequate billeting 
for our unmarried junior enlisted and non-commissioned officer Marines 
by 2012.
    Public Private Venture Family Housing.--Our efforts to improve 
housing for Marines and their families continue. Thanks to continuing 
Congressional support, the Marine Corps will have contracts in place by 
the end of fiscal year 2007 to eliminate all inadequate family housing.
                               conclusion
    This Nation has high expectations of her Corps--as she should. Your 
Marines are answering the call around the globe, performing with 
distinction in the face of great hardships. As they continue to serve 
in harm's way, our moral imperative is to fully support them--we owe 
them the full resources required to complete the tasks we have given 
them. Now more than ever they need the sustained support of the 
American people and the Congress to simultaneously maintain our 
readiness, reset the force during an extended war, modernize to face 
the challenges of the future, and fulfill our commitment to Marine 
families. On behalf of your Marines, I extend great appreciation for 
your support to date and thank you in advance for your ongoing efforts 
to support our brave countrymen and women in harm's way. I promise you 
that the Corps understands the value of each dollar provided and will 
continue to provide maximum return for every dollar spent.

                              DEPLOYMENTS

    Senator Inouye. I note that, Admiral, in the deployment of 
sailors, the rotation lasts for 6 months, in the case of 
marines, for 7 months. What are the factors that are used to 
determine the appropriate length of rotation?
    Admiral Mullen. The planning factors that drive us the 
most, Mr. Chairman, are the requests or the requirements from 
the combatant commanders. And in fact, while Navy deployments 
are notionally 6 months, we have started to move away from 
that. We've actually had ships which are extended well beyond 6 
months to 7 and sometimes as long as 8. We also are conducting 
deployments which are shorter than that now.
    It's really driven, more often, it's driven very strongly 
by the requirements to have a certain capability in the 
theater. And, it's also designed to, at least our scheme is 
designed, to also provide for, in the time that, through a 
cycle that a sailor is in their home port at least 50 percent 
of their time. So, it is that balance.
    We also have invested heavily in readiness in the last 
several years and we are trying to make sure we maximize the 
return on that investment, to achieve that balance.
    General Conway. Sir, our rigor goes back to late 2003, 
early 2004 when we first started to realize we were going to be 
sending marines back into Iraq after OIF. And, initially our 
comparison was with that of the United States Army, who had 
judged that they would be doing 12 month tours. Our component 
commander in the Pacific--General Grayson at the time--applied 
a great deal of rigor to the issue with his staff. And, based 
upon how long we have young marines for, tours of duty, based 
upon our culture of traditionally 6-month deployments and so 
forth, we arrived at 7 months as being the sweet spot for us in 
terms of retaining our culture, not being in theater too long 
with units, and at the same time being able to maintain a very 
effective rotation.
    Senator Inouye. I would assume that the length of the tour 
has some impact upon families and on the effectiveness of the 
troops. Is that under consideration, too?
    General Conway. Sir, it's absolutely the case, at least in 
the case of the Marine Corps. And, I can tell you my 
predecessor, General Hagee, was initially of the mind that 
perhaps 12 months would be good for us. We convinced him 
through the rigor and through discussion that 7 months was 
right. He told me afterwards, that he went both to Camp Lejeune 
and to Camp Pendleton to speak to the families and if there was 
ever any doubt in his mind, it was completely removed by his 
discussions with the families. They were very supportive of 7-
month deployments.
    Senator Inouye. Navy?
    Admiral Mullen. I would echo that, as well, Mr. Chairman. 
I, and this goes back to when I was very young as an officer 
and we were doing 9, 10, 11, 12 month deployments to Vietnam. 
And, so, certainly willing to support deployment lengths, as I 
discussed earlier, out to seven, and sometimes beyond that. 
Anything beyond that, I have to personally approve.
    And, there is a great concern for making sure we support 
the needs of our families in that regard. They have been 
incredibly supportive my whole career, but I have seen a level 
of support since 9/11 that truly has been extraordinary, and 
we've worked very hard to meet their needs in this very 
challenging time, as well.

                              SHIPBUILDING

    Senator Inouye. Admiral, in the fiscal 2008 budget request, 
you're asking for the procurement of seven new ships. There 
have been press reports coming out from the House suggesting 
that they want to add five more. Considering the cost of 
additional submarines and additional littoral combat ships, 
what number is prudent?
    Admiral Mullen. I think it would be, in responding to this, 
we look at the possibilities of being able to actually build 
ships. One of the--and it's on my unfunded priority list--the 
number one ship is an LPD, LPD-17, which would be the 10th one 
and it's a required LPD, but it's not been affordable. But, the 
ability to actually do that, I think--and, in fact, because of 
the challenges we've had as a result of Katrina with the 
shipyard in that area--it would be very challenging. And, it 
could well just, if it were added, result in essentially 
booking a ship, not really being able to build it.
    That said, it clearly would relieve some financial pressure 
that I've got in the SCN, on the, in the program in later 
years.
    To add a submarine now would be equally challenging. It 
certainly could be done, but a submarine, basically you fund in 
3 years. You fund about $200 or $400 million, $450 million in 
the first year, $250 million in the second, and then the 
remaining amount gets funded in the year that you actually 
count it. So, the earliest, theoretically, we could get two 
submarines in would be fiscal year 2010.
    That is just one submarine, and that would leave a hole of 
somewhere between $5 or $6 billion to fill out the two per year 
in 2011 and 2012, or in 2011, and right now it's scheduled for 
2012. So, it could be done.
    Another area we could add ships would be littoral combat 
ships, that said, I think you're very much aware that that's a 
program that's undergone a great deal of scrutiny. We know 
where we stand with it, and so there would certainly be some 
risk associated with that.
    DDG-1000, you could add that, however, we're at an early 
stage in the program and there's certainly risk associated with 
that. I've been very clear about not wanting to go back and 
build DDG-51s. Some have talked about that as well. It took me 
a number of years to really move away from that program.
    And so, we've built our industrial base down to such a 
level that it's a challenge, it's a significant challenge to 
try to do this. I believe it could be done, but it's a 
challenge.
    Then one other ship that probably is less riskier than any 
other would be the T-AKE, to be able to add that would be 
something that we could do, relatively easily in fiscal year 
2008.

                            INDUSTRIAL BASE

    Senator Inouye. Mr. Secretary, as the Admiral pointed out, 
the many challenges faced by the shipyards. What plans do you 
have to reinvigorate the industry?
    Mr. Winter. Well, sir, Mr. Chairman, we've put forward a 
plan here that really has three major components associated 
with that. One of which, is to try to maintain the stability of 
a plan, so that the individual shipyards are able to plan 
appropriately for the future in terms of their workforce and in 
terms of the capital investments that they make. The stability 
gives them that possibility of being able to build an 
appropriate business case.
    We've also worked very hard to be able to stabilize the 
requirements. And, I think stabilizing the requirements is very 
critical to us in terms of being able to ensure that the 
construction of ships is maintained in a cost-effective manner. 
Requirements changes have had a terrible impact in a number of 
cases, in terms of the overall cost of ship development.
    And the last thing is to be able to develop a partnership 
with the industrial base to be able to motivate the contractors 
through cost-sharing mechanisms and appropriate contract 
incentives, to be able to make the type of investments that we 
both believe is necessary in terms of technology, in terms of 
the workforce, and in terms of the capital investments that 
will serve us well in the future.
    Senator Inouye. Does your process show promise?
    Mr. Winter. I think it shows promise. I have to say I'm 
very concerned about the extent to which we have found that the 
industrial base has been impacted, as CNO just commented, by 
Katrina. And, also when I compare what I see in our industrial 
base, to what has transpired overseas in foreign shipyards and 
take a look at technology infusions that have been made there, 
it is very apparent that we lag in a considerable amount, the 
capabilities of many shipyards around the world.
    And, I think we're going to have to take another look at 
it. One of my objectives for this year is to take another look 
at our plan for the shipyards, and in particular, to take a 
look at other opportunities to appropriately motivate 
appropriate investments in these yards, and in the personnel 
that work there.
    Senator Inouye. I'd like to turn the questioning to the co-
chairman. I have a few more questions, but----

                          LITTORAL COMBAT SHIP

    Senator Stevens. Picking up on that, Mr. Secretary, you did 
tell us about the cancellation of the fourth, the fifth, and 
sixth littoral ships, and we're really proceeding with the 
construction of four. It's my understanding that the Admiral 
would be happy to settle for 10 and the commandant settle for 
12. How are we going to get to that if we continue to have 
these cost overruns?
    Mr. Winter. Well, sir, I think that managing the programs 
to avoid the cost overruns is a critical objective. I think 
that we need to be able to ensure that the requirements process 
is properly mature before we initiate the actual construction 
activities. I believe that we also have to take a good hard 
look at the contract type that we use in the actual contracting 
for the ships, and make sure that we have the opportunity to 
transfer those contracts to move from cost-reimbursable 
contracts into fixed price incentive contracts at an 
appropriate time where we can, in fact, stabilize the 
requirements and motivate the contractors appropriately to 
control their costs.
    Senator Stevens. What's the total cost overrun now?
    Mr. Winter. On the littoral combat ships, sir? Depending 
upon the reference point, it's in the 50 to 75 percent range. 
And, that's on the first two vessels.
    Senator Stevens. I hope we can find some way to get that 
straightened out, because it doesn't sound to me like you're 
going to get 10 or 12 the way it's going right now.
    Mr. Winter. We're working very hard at that, sir. We've got 
a very significant effort ongoing, to both understand how we 
got where we are right now, and what we need to do to proceed 
forward to be able to prosecute this program in a cost-
effective manner.
    One of the opportunities that we have here is that, given 
the large number of ships that we're looking at for the long 
term, a total fleet size of 55 littoral combat ships. If we're 
able to get the ship down into a cost-effective production rate 
and also a cost-effective design, we should have the ability to 
affect some significant cost savings as we get into that large 
production run.
    Senator Stevens. Tell us, we're all aware of what went on 
with Iran seizing those British, that British crew. I 
understand that we've moved a task force into that area. Is 
that right?

                              PERSIAN GULF

    Admiral Mullen. Sir, we've had, we deployed the second, at 
the direction of the President, the second carrier strike group 
earlier this year, the John C. Stennis. And, she's been in the 
area for several weeks right now, and so----
    Senator Stevens. That's not a new deployment?
    Admiral Mullen. That's not a new deployment, no, sir. We 
did it, very important to provide, to support our friends and 
allies in that area, to provide for the kind of stability that 
that area clearly needs. It's been reported in the press today, 
and I think accurately, that--both yesterday and today--there's 
an exercise, a training exercise that's ongoing in the middle 
of the gulf, which is pretty natural in terms of these kinds of 
strike groups, in terms of their operations in order to fine 
tune being able to work together.
    So, it is specifically directed at training, and it's very 
important to send a signal of both strength, while at the same 
time, no intent to escalate things in any way, shape, or form 
at this point in time.

                    WALTER REED ARMY MEDICAL CENTER

    Senator Stevens. Let me turn, then, to the Walter Reed 
situation. We have had the disagreement in Congress concerning 
the base realignment and closure (BRAC) proposal to close 
Walter Reed and to combine it with the naval facility at 
Bethesda. As I understand it, the House has added money to 
continue the use of Walter Reed. What's the position of you, 
Mr. Secretary, concerning the Walter Reed proposal to keep it 
open longer?
    Mr. Winter. Well, sir, our role in this activity is very 
limited. We are currently engaged in the environmental impact 
analysis that is associated with the additional construction 
activities and also in terms of the planning for the new 
facility. I think the, I would prefer to defer the questions on 
Walter Reed's operation and how that would be used for the 
Army, to the Department of the Army.
    One note I would try to make here is, that I recognize that 
one of the options under consideration is the possible 
acceleration of the construction of the new facility, and to 
that end, I would just request that as we go through that type 
of consideration that we ensure that we don't give short 
shrift, if you will, to the requirements development process. I 
want to make sure that as we go through this, what is perhaps a 
once in a lifetime opportunity to set up a new national medical 
facility here, that we do it right, and consider all the 
potential requirements in the future.
    Senator Stevens. Then turning to another, you're not 
supporting the action of the House and increase funding for 
Walter Reed, and delay the modernization of the naval facility?
    Mr. Winter. Sir, I have no specific position on that 
matter. I view that as really a Department of the Army 
consideration, not a Department of the Navy consideration.
    Senator Stevens. Well, it is delaying the facilities at 
Bethesda, as I understand it.
    Mr. Winter. Sir, I'm familiar with several different 
options there, including just deferring the consolidation and 
also accelerating that. Depending upon which option is chosen, 
it could delay it. I will note that we do believe that the 
concept of consolidation is a good one, being able to provide 
the critical mass, if you will, particularly as it relates to 
some of the unique specialties that are required for casualty 
care, has significant advantages. So, that said, I would prefer 
not to delay the process, but to engage in it in an appropriate 
and timely manner.

                   MARINE CORPS END STRENGTH INCREASE

    Senator Stevens. Another subject, General, you mentioned 
the increase in the number of marines. I'm told that's 27,000 
additional marines. Is that what you're seeking?
    General Conway. That's correct, sir, 27,000 over a 5-year 
period.
    Senator Stevens. Have you defined the additional equipment 
and facilities that are needed in that same timeframe for those 
people?
    General Conway. Yes, sir. Our command at Quantico is 
specifically tasked with that requirement and we're looking to 
determine what should be the development and the creation of 
those units. We would like, in the early going, to try to 
create additional units for those that are stressed most by the 
deployment tempo, and we think we can do that.
    We see some narrow neck in the hourglass, if you will, at 
our entry-level training, the ability of our boot camps at 
Parris Island and San Diego and in our marine combat training 
to be able to facilitate those additional numbers, so we're 
looking at that requirement, in addition to the billeting 
requirements based on where these people would be assigned.

                        UNMANNED AERIAL VEHICLE

    Senator Stevens. Admiral, we--staff and I--have taken two 
trips to view the facilities for the Air Force operation of the 
unmanned aerial vehicles (UAV). It's my understanding that now 
that the Air Force Chief of Staff wishes that the Air Force be 
deemed the executive exclusive agent for the medium and high 
altitude UAVs. Has that been discussed with you?
    Admiral Mullen. I've seen the memorandum. I've discussed it 
briefly with General Mosley. It's not an issue that I, that 
memorandum as I think you know, sir, was sent to Deputy 
Secretary of Defense England. And, we, the two services have 
not had a robust discussion about this.
    The way we operate now, however, is one that I'm very 
supportive of, which is essentially, the, you know, the Air 
Force writes, owns the airspace and writes the instructions on 
where we fly, but we all fly our own airplanes. Right now 
they're manned, I'm not sure that should change in the future. 
So, I've talked to General Mosley about this--we really do need 
to sit down and discuss the whys and the wherefore here. As I 
read it, I'm not supportive.
    Senator Stevens. General, what about the marines, are you 
involved in that discussion?
    General Conway. Sir, we will be involved in it, I trust, 
when it goes to the tank for discussion amongst the Joint 
Chiefs. There has been no outward discussion of it to date. As 
a former J-3, I'm aware of the fact that the Air Force sees 
some need for efficiency in theater, where there are large 
numbers of UAVs employed, and I think that's--at least a part 
of--the motivation to accomplish that.
    Our actual systems would be less involved than, probably, 
the Navy and the Air Force. We would only have one, I think, 
that probably qualifies against what the letter has stated. 
But, I'm anxious to join the discussion, as well.
    Senator Stevens. Well, as a pilot, I was really very 
interested and amazed at the large staff that's involved in the 
operation of those vehicles, particularly when they're doing, 
going into a 24-hour concept with three different ships dealing 
with one aircraft, and the basic backup staff being so large. I 
do think that, if we replicate that in all three services, or 
four services, we're going to have an enormous duplication of 
effort.
    I don't know where it should end up, but I do hope we find 
some way to eliminate the redundancy that might come from 
multiple ownership of those vehicles.

                MINE RESISTANT AMBUSH PROTECTED VEHICLE

    My last question, Mr. Chairman, is about the mine resistant 
ambush protected (MRAP) vehicles. We understand, General, that 
you have expressed some great interest in these vehicles, and 
you have an almost immediate need for this. Can you tell us 
more about that?
    General Conway. Sir, I can. The vehicle--first of all, to 
describe it--it has a higher center of gravity, a higher 
chassis than the vehicles that we use right now in theater. It 
also has a V-shaped hull, or a boat-shaped hull. We've had 
significant experience now out West with underbody explosions. 
The enemy has gone significantly to mines and pressure plate 
devices that cause explosion from underneath. What we have 
found, is that the gold standard there right now, the up-
armored Hummer vehicle, is susceptible to that.
    We had a few of these initially sent to the theater to work 
with our EOD types--it's basically a South African design--but 
what we discovered is that the same blast under these MRAP 
vehicles were having much less impact on marines and sailors 
that were riding in the vehicles. About 400 percent more likely 
to survive a blast that would, literally, take out an up-
armored Humvee.
    Our initial request was for something over 1,000 vehicles. 
Our component commander, with further review of the statistics, 
looking at the increasing potential for those types of weapons, 
has decreed that he would like to see every marine and sailor 
that goes outside the wire in the Al Anbar Province riding in 
these vehicles. We think it will significantly cut our 
casualties, to this particular form of attacks, and so we've 
gone after some 3,700 of the vehicles, sir. And the Secretary 
of the Navy, his procurement people have very much facilitated 
that effort, through opening up to other industrial capability 
and the testing that would go with rapid procurement.
    Senator Stevens. Have you determined whether it's possible 
the terrorists could just modify their improvished explosive 
devices (IED) and find a way to damage these, just like they've 
damaged the Humvees? Up-armored Humvees--that's what you're 
using now is up-armored Humvees, aren't you?
    General Conway. Yes, sir. We are following those tests, as 
well. Probably we don't need to talk too much about the 
susceptibility of the vehicle in open session, except to say 
there is some technology out there that looks like it may 
defeat the most advanced enemy capability, and we certainly 
want to make sure that the vehicle will include those kinds of 
technologies, as well.
    Senator Stevens. And what's the timeframe for your need on 
this?
    General Conway. Well, sir, we would say sooner is better. 
We see that we have a moral imperative to get these things to 
the field as soon as we can. Now, understanding their enhanced 
protection capability, part of it is commensurate on the 
ability of industry to come through with promises made that 
they think they can develop a vehicle that will sustain our 
examination, our tests--both with regard to durability, miles 
that they'll provide over time, but also, again--the force 
protection facets. Those experiments, if you will, are ongoing 
right now, as we speak, at Aberdeen.
    But, if they can do what they promise they can do at this 
point, we would like to very much expedite the procurement of 
these vehicles, and get them to the field as soon as we can.
    Senator Stevens. Thank you very much.
    Thank you, Mr. Chairman.
    Senator Inouye. Thank you.

                                 VH-71

    Mr. Secretary, I was surprised to learn that the Navy is 
considering building their entire fleet of Presidential 
helicopters overseas? I would assume that you must be having 
some problems with the production, and why this decision?
    Mr. Winter. Sir, we are not considering producing these 
vehicles overseas--one of the activities that we typically 
engage in, in terms of all-acquisition programs, especially 
those in which we are having some issues, in this case schedule 
for the delivery of the increment to aircraft--is to take a 
look at alternatives. Some alternatives were looked at, at a 
low level within the program office, associated with overseas 
production, do not believe that those alternatives are 
appropriate, and we will not be pursuing them.

                            ROLE OF MARINES

    Senator Inouye. General, in chatting with some of the old 
timers in the Marine Corps--retired officers--they've expressed 
some concern that never occurred to me. That, in this global 
war on terrorism, the role of the marines have changed from the 
traditional role of amphibious landing and jungle-fighting and 
all of that, and I gather that your focus is primarily on the 
Iraqi-type war. Is that good or bad?
    General Conway. Sir, it causes us significant concern. And, 
as I alluded to in my opening statement, we have the 
responsibility to be the Nation's first to fight. We take that 
very seriously, and I would agree with you, at this point, when 
you're back for 7 months, and getting ready to go again, most 
of our combat formations are simply preparing for the counter-
insurgency environment.
    We used to do 10 combined arms, live-fire maneuver 
exercises a year at Twentynine Palms--we don't do any of those 
now. We do very little mountain warfare training, very little 
jungle or amphibious training--which again, is our true forte. 
So, it does cause me concern. We are endeavoring to expand the 
amount of dwell-time that we have at home, so that we can 
accomplish some measure of this training, so as not to lose the 
expertise, or potentially a generation of officers and marines 
who just aren't experienced in those types of operations.
    So, we're focused on it. We're looking toward the day when 
we can get back to our more traditional form of training, but 
right now, we're simply stressed to the point where that's not 
feasible.

                        RECRUITING AND RETENTION

    Senator Inouye. Admiral and General, although the morale 
among the troops may be high, I note signs of your having 
problems with retention and recruiting. What can this 
subcommittee do to help you in this area?
    Admiral Mullen. Mr. Chairman, you've been very supportive 
of resourcing the incentivized bonuses, if you will, as has the 
Department of Defense with you--in creating authorizing 
opportunities for these, so that's been critical. And of all of 
the things that we do, we clearly are able to focus the kinds 
of re-enlistment incentives we need.
    For instance, we're struggling right now with some of our 
doctors, specialties in the medical field--and you've 
authorized us to be able to create a fairly significant bonus, 
up to--in one case that I'm aware of--up to $400,000--to 
attract a specialist--radiologist, in this particular case--who 
is clearly, you know, that's the market. So, you've allowed us 
to compete in the market, which I think is very important in 
these particular skills.
    You've been very supportive of our recruiting efforts, and 
resourcing that, as well. I'm adding recruiters right now, I 
actually have been for the past year, to hedge against the 
general concern that these things are cyclical, and that our 
good recruiting may go down in the future, and have also 
supported recruiting bonuses in specific areas that we're 
hurting in right now, particularly for our explosive ordinance 
personnel, our SOF forces, some of our Reserve, and Seabee 
ratings, for example--so, continuing that support is really 
critical. Both for the near term, and really for the long term. 
As you know, Mr. Chairman, once we create a hole, it lasts 
sometimes, a couple of decades, and that's what we really want 
to avoid.
    General Conway. Sir, our recruiting and retention is still 
pretty good. In fact, in order to be able to grow the force in 
those increments of about 5,000 a year, we've expanded our 
retention--from what is, traditionally about 25 percent--to 
about 33 percent of our requirement. And, we think we're going 
to be able to keep those great young marines aboard.
    We prefer, as a service, to incentivize on the end of a 
tour, as opposed to up-front. We want to incentivize 
established performance. And your support, thus far, has 
enabled us to do that.
    Recruiting is good right now, but I'm also pragmatic enough 
to realize that there are some danger signs out there. And as 
the Army grows, as the Navy puts more recruiters in the field--
we're essentially still going after the same set of young 
individuals.
    We, too, are going to add to our numbers of recruiters. We 
will need, I think, to enhance our advertising, and I can 
predict it will be difficult to bring in the numbers that we 
need, maintaining our standards as we feel we must. Our 
standards are even higher than DOD standards, and we are not 
willing to sacrifice those, even as we grow.

                          RECRUTING STANDARDS

    Senator Inouye. Mr. Secretary, at the hearing with the 
Army, it was noted that they've lowered their standards of 
recruiting. Up until recently, 90 percent of the recruits had 
to have a high school diploma--10 percent did not. Now, that 
number has increased to, I think, 20 percent. Are you having 
that problem with the Navy and Marine Corps?
    Mr. Winter. Sir, right now, we've been able to maintain our 
standards. The only specific category of reconsideration, if 
you will, that would be in the educational domain that's come 
to me, of late, is consideration of home schooling--whether or 
not we would treat individuals with a home-schooled experience 
and the high school equivalency exam in the same way that we 
would treat current high school graduates. That's under 
consideration right now, and relative to the principle of 
requirements, that is the only one that we're looking at, at 
this time.
    Commandant, if you want to?
    General Conway. No, that's right, sir.
    Sir, the DOD standard for high school graduates, as you 
enunciated, is 90 percent. The Marine Corps standard is 95, 
we're recruiting 96, and we want to keep it there.
    On the other end of the scale, DOD allows for what they 
call 4 percent CAT-4 Alpha Mentality Group--these, fortunately 
or unfortunately--are some young Americans who have graduated 
high school, but then can't pass our entry examinations, the 
ASVAB, if you will. We recruit 1 percent of those individuals, 
but in some cases it breaks my recruiter's heart, because they 
look at these kids and say, ``That would be a great young 
marine in 3 years, he just can't pass the test.'' Some have 
English as a second language. So, in some cases I think we're 
testing language skills, not intelligence.
    So, that's where we are. If we were to ever consider coming 
to the Secretary for an adjustment of our standards, it would 
probably be some of those young Americans, not those who fail 
to graduate high school.

                          JOINT STRIKE FIGHTER

    Senator Inouye. Mr. Secretary, all of us have been 
discussing the Joint Strike Fighter. What's the latest status?
    Mr. Winter. Well, the latest status, sir, is that we've had 
the initial flights of the conventional takeoff and landing 
version of that. The next major milestone, and one of 
particular concern to me in tracking is the STOVaL version, the 
short takeoff and landing capability. That is currently 
scheduled for June of next year, about 15 months off. We're 
tracking that very carefully. Last several months--I would say, 
the last quarter--that date has held. So, I'm starting to get a 
little bit encouraged that that date is going to wind up being 
a good date.
    The carrier version of the JSF--the first flight there--is 
scheduled for roughly 2 years from now, and we're also tracking 
that very carefully, as well.
    Senator Inouye. Next question?
    Senator Stevens. Yeah, thank you, Mr. Chairman.

                             HOME SCHOOLING

    Going back to this home schooling--we have a tremendous 
number of our young people that are home-schooled in Alaska. 
One of my junior partners when I had a law firm back in the 
last century--let's put it that way--I was amazed to find one 
of my finest young lawyers, first time he ever entered a school 
was when he went to Harvard Law School and became number one in 
his class. I think you should look at these home-schoolers--
there's a tremendous number of them now, particularly in rural 
America.

                   JOINT STRIKE FIGHTER SECOND ENGINE

    The problem I'd like to talk to you about, though, is the 
problem of the engines on the Joint Strike Fighter. I note 
we're still appropriating money for a second version of that 
engine. I'm personally, very much against having two engines 
for the same single-engine plane. You're going to end up by 
getting one in some remote part of the world, and find out that 
the only parts they have are the parts for the one that's a 
major version of the Joint Strike Fighter. I hope that you will 
really reconsider this concept of having two engines for the 
same plane. It's one thing to have competition for the engine, 
it's another thing to award the loser a percentage of the 
engines. I just don't see that at all.
    Mr. Winter. Well, sir, I tend to agree with you, one of my 
personal concerns here is the difficulty of providing a full-up 
logistical support capability at sea--on our amphibs and on our 
carriers. And, quite frankly, the difficulty of providing all 
of the parts and the spares, the documentation and the full-up 
proves that we'd have to maintain both versions of the engine, 
would be rather problematic. So, I do agree with you, sir.
    Senator Stevens. Good. Thank you.

                 DETENTION FACILITIES AT GUANTANAMO BAY

    Senator Inouye. Mr. Secretary, we've been receiving reports 
of an internal debate in the administration on the future 
detention facilities at Guantanamo. What is the present status?
    Mr. Winter. Sir, from the Navy point of view, our 
responsibility is limited to providing the facilities down 
there, I will say that I have been down to inspect those 
facilities, and I think that the Navy has done a good job of 
providing the necessary facilities, both for the detainees 
themselves, as well as the support facilities, including, in 
particular the medical support facilities. Outside of that, I 
would defer questions to those that are responsible for the 
actual detention activities, in particular, Southern Command.

                            MISSILE DEFENSE

    Senator Inouye. Admiral, congratulations on the successes 
you have experienced with the aegis missile defense system. 
What's the next step?
    Admiral Mullen. Thank you, sir. We have enjoyed--and it has 
not come without considerable work, as I know you are aware--
successes in seven of the last nine tests. And there's another 
test that's on the horizon this summer.
    I've been a very strong proponent of sea-based missile 
defense for some time. My immediate concern is at the 
operational level, the theater level, and that I'm able to 
provide some capabilities to protect those ships, and other 
capabilities who would be in the sea base. We continue to have 
a strong relationship with the Japanese in terms of missile 
development in particular, and that--I think--will get stronger 
over time. We are fielding a tracking capability in upwards of 
15 of our aegis destroyers, we've got that capability in three 
of our cruisers. We are going to expand the number of ships 
that can shoot, that can essentially launch the SM-3. I'm 
concerned about the expansion of the threat, we have a tendency 
to focus a great deal--and rightfully so--on the western 
Pacific, because of what the North Koreans did this year, 
clearly the developments in China. But I am also concerned 
about the developments in the Middle East. And you look at what 
Iran is routinely testing--not just tests going ashore, but 
also at sea.
    And so, because of the strength of what a naval capability 
brings, in terms of maneuverability, I think we need to 
continue to invest in that. We've got a terrific cadre of Navy 
people in the Missile Defense Agency, I would look to--over 
time--be able to expand that to ensure that we are well 
supported there in its development. And, obviously its focus 
has been heavily on the national missile defense side, and 
that's an important capability.
    We believe we have an awful lot to offer--very involved in 
the Korean, the most recent shots out last year that North 
Korea generated, and continued investment here, I think, is 
very, very important.

                             BUDGET PROCESS

    Senator Inouye. Gentlemen, Senator Stevens and I are well 
aware of the budgetary process that you have to go through to 
come up with your budget requests. And we know that the initial 
requests that may have come from a battalion or squadron, by 
the time it reaches the Office of Management and Budget (OMB) 
is a vastly different document. There are a lot of areas that 
are cut off. And I was listening to your statement, Admiral, 
and you said that some of the holes that we develop may take 
decades to fill up. I would like to know what your request 
would be like if you didn't have funding problems?
    Admiral Mullen. In my statement, Mr. Chairman, I alluded 
to, or spoke to where we were in fiscal year 2004. And as I 
looked at the 2008 column in that FYDP, and we thought we had 
it about right, as best we could tell with the analysis that we 
were doing, in the world that we were living in then, and then 
the world has continued to evolve. And I spoke specifically 
about the top line, the top line we didn't reach, in 2008, 
upwards of almost $7 billion.
    In doing that, and this is not--I've been very open about 
this--the Navy has chosen to accept some risk to support what's 
going on as part of the joint force. But it is risk. I have 
some fairly significant readiness challenges in the out-years 
that I'm going to have to figure out how to get at--the length 
of the problem, though, is really in the future development, 
because it takes so long to develop these systems, to buy these 
systems. Years to buy them. So, recovering from something like 
this can offer a great challenge.
    That is--and we've worked hard on efficiencies, we're 
working hard on the business side to understand where our money 
is and what it's doing, and we've made great progress there. 
We're much more efficient than we used to be. But when I 
submitted this 30-year ship building plan, and the analysis 
that underpinned it, it was an analysis that said, ``This is 
the minimum number of submarines, this is the minimum number of 
surface combatants, this is the minimum number of amphibious 
ships, and aircraft carriers and support ships.'' So, just in 
that word alone, there is inherent risk, particularly with 
respect to operations as we understand them now, and can 
project them over the next 10 to 20 years, much less those that 
we couldn't anticipate in a pretty rapidly changing world. So, 
there's risk associated with that. And that's really what I'm 
talking about, as I indicated in my statement.

                         MARINE CORPS EQUIPMENT

    Senator Inouye. General, the marines who fought in World 
War II and the Army infantry who did the same in World War II 
had the steel helmet, boots, rifle, gun belt, grenades, and I 
think the cost was about $175 in today's dollars.
    Today it's over $17,000. But the marines and the Army 
personnel carry a load into combat something like 90 pounds, is 
that correct?
    General Conway. Sir, we calculated it at 80 pounds.
    Senator Inouye. They tell us now that the future combat 
marine or combat infantryman, the cost will be in excess of 
$50,000, and the weight will be much heavier. Can the marine be 
effective with 120 pounds on his back?
    General Conway. Absolutely not, sir. There's no way. We 
have marines, in some cases, that barely weigh 125 pounds, sir. 
So, we--that's an unrealistic expectation.
    Everything that we do, Mr. Chairman, is intended to try to 
make the equipment load lighter. We just have started to put 
into theater a tear-away type of armored vest, if you will. So 
that, if a marine gets in trouble in the water, or in a vehicle 
that's submersed, he's got a way to get that load off of him.
    But, you're exactly right, sir, and your personal 
experience will tell you that the endurance factor is just 
significantly impacted if you're expected to carry that weight 
over a period of time.
    So, we've got to continue to work with industry, with the 
technology, to try to come up with lighter systems as opposed 
to heavier systems, that ideally give us the same level of 
protection, if we're going to continue to see, essentially, the 
same kinds of threats.

                             BUDGET REQUEST

    Senator Inouye. Is there anything else you'd like to add on 
to your budget request?
    General Conway. Sir, I thought about the question as the 
CNO was responding. I think there's probably three areas where 
we see some risk. We need to, ideally, get the dollars into the 
top line as soon as we can, I think, for our growth. I'm 
concerned that we not try to manage people who are enlisting on 
4-year contracts with year-to-year types of allocations or 
resources.
    A second area that we see, and it's in the out-years some, 
but we're going to experience a bit of a risk with our fixed-
wing as Joint Strike Fighter is potentially pushed to the 
right. We're going to be short 45 to 50 aircraft around 2010 or 
so, that would ordinarily be in our squadrons and able to 
respond to these contingencies. And CNO referenced it, our 
other concern, I suppose, is in the numbers of amphib ships.
    We are talking about it, we are trying to come to grips 
with how we solve the issue, but we feel that in order to 
provide the Nation a forced-entry capability of two brigades--
that's 30 operational ships should a contingency occur--in the 
out-years, unfortunately, based on affordability at this point, 
we have 30 ships available. And, at the standard rate of 85 
percent availability, that won't give us what we need. So, 
we're negotiating for 33 ships, which we think would be, 
reasonably make 30 available at all times. So--were I to say, 
not in the Marine Corps budget, but see an enhancement in the 
DON budget, it would be toward those three areas.
    Senator Inouye. Senator Cochran.
    Senator Cochran. Oh, thank you so much, Mr. Chairman.

                          LITTORAL COMBAT SHIP

    Mr. Secretary, I'm very concerned about the recent 
decisions of the Navy regarding the littoral combat ship. Now, 
no one likes to see cost overruns, but in this case, I believe 
it was not surprising. According to some observers, not only 
was the original price tag of $220 million for a ship 
unrealistically low, but I understand it that the first ship of 
any series is always more expensive than the following ships.
    To make matters worse, this ship was not even completely 
designed when Marinet Marine began construction; in fact, even 
today with the ship over 70 percent built, the design is still 
not totally complete, as I'm sure you know.
    Question, while I do not understand--what I do not 
understand is that the Navy is taking the unusual step of 
asking Lockheed Martin and Marinet Marine to settle on a fixed 
price for this first ship, even though the design--as I said--
is not complete. Marinet is not afraid of a fixed-price 
contract, it does plenty of business with the private sector 
and the Government on a fixed-price basis, but always with a 
completed and a proven design. I understand the appeal of a 
fixed-price contract, but isn't this asking the contractors to 
shoulder an unacceptable amount of risk? As a businessman, 
would you ever agree to produce a product for a certain price, 
when you were not even sure what the product would look like in 
the end?
    So, my question is--will the Navy drop its request for a 
fixed-price contract on this first ship, and settle for a 
fixed-price contract on the second ship, which should have, I'm 
sure by then, a completed design?
    Mr. Winter. Well, sir, we're right now in the middle of 
negotiations with Lockheed Martin, who is the prime contractor 
on this, relative to completion of both the first two ships 
that they have, which is LCS-1 and LCS-3. As you noted, LCS-1 
is over 70 percent complete. There are a few minor areas where 
there are some corrective actions that are being taken in terms 
of the design, but given that the first ship is very well on 
its way to completion, and the second ship also has some 
significant activities that have been taken in terms of parts 
procurement and the like, we believe that the overall risks 
associated with the cost of completion for both ships should be 
well-contained.
    What we've asked for here is not a firm fixed price, but 
what is known as a fixed-price incentive contract, where any 
overruns or underruns would be shared between the contractor 
and the Navy. And, we've agreed to sit down and negotiate the 
share ratios there--the extent to which both parties would be 
able to share in those cost risks--and we've also been willing 
to make some changes in terms of the way in which the ship is 
specified and bought off, which, we believe, would go a long 
way to mitigating the risks that Lockheed would take on.
    Senator Cochran. Well, it's my understanding that it 
usually takes about 90 days in the best of situations to 
negotiate a fixed price on a ship. And yet, I believe you're 
asking for negotiations to be completed in 30 days. Those 30 
days will run out soon--wouldn't it be fair and reasonable to 
ask Lockheed and Marinet to work with you over the course of 90 
days to come up with a new contract?
    Mr. Winter. Well, sir, we've asked to get to the point of a 
meeting of the mind, if you will, on the basic principles to 
ensure that we have a reasonable course forward, and a good 
likelihood of being able to reach an amicable agreement here 
between the parties within the time period of the 90 days that 
we are allowed within the FAR associated with the ongoing stop 
work order.
    If we're able to get to that point where we're both 
comfortable that we're going to be able to work out any of the 
residual arrangements, there are several options available to 
us, subject to mutual consent that we could follow to deal with 
that, clean up matters, and final definitization of the 
contract.
    Senator Cochran. I didn't--I'm not sure if I heard your 
answer, maybe I heard it, but not clearly enough. Will the Navy 
drop its request for a fixed-price contract on the first ship, 
and settle for a fixed-price contract on the second ship?
    Mr. Winter. Sir, right now we have one contract which 
includes both ships, and we've asked for a fixed-price 
incentive on both ships, and that's our current position.
    Senator Cochran. Last question, Mr. Secretary, I've read it 
in the press that the General Dynamics LCS is 41 percent over 
their original bid price, and that they're about 40 percent 
complete. Was the Lockheed Martin costs and overrun similar to 
that same point in construction? At that same point in 
construction? If so--and if you believe fixed-price contracts 
are not the solution to control cost growth--why have you not 
put General Dynamics under a fixed-price contract?
    Mr. Winter. Well, sir, we're looking at the General 
Dynamics activity very closely, and as we have noted to General 
Dynamics, if we see continuing cost growths there that 
replicate those that we saw at Lockheed Martin, we would seek 
the same remedy relative to General Dynamics.
    Senator Cochran. Well, Mr. Secretary, I'm not opposed to 
using fixed-price contracts; however, I am concerned that they 
are being misapplied in this case, where Marinet is building a 
first-of-its-kind vessel, from a design that is constantly 
being changed, altered, and even tweaked. Some of the cost 
growth may be the contractor's fault, but responsibility, I 
believe, also rests with the Navy. It is not fair for the Navy 
to now try and place all of the blame at the feet of Lockheed 
and Marinet, when the Navy knew it was risky to start building 
a ship that had only been in the design stages for 7 months. 
So, I believe no one should be surprised that this has not 
worked exactly according to plan.
    I believe Marinet can build its vessel at a reasonable 
price with the capabilities that will make the Navy proud, and 
I would encourage you to continue to use Marinet and negotiate 
a solution that will give them every opportunity to show you 
how they can contribute to our national security. I would 
appreciate your consideration.
    Mr. Winter. We will continue to work this, sir. And we will 
continue to work it through our prime contractor, as we are 
required to do, given the privity of contract selections.
    Senator Cochran. I thank you, Mr. Secretary.
    Mr. Winter. Thank you.
    Senator Cochran. I thank you, Mr. Chairman.
    Senator Inouye. Thank you.

                     ADDITIONAL COMMITTEE QUESTIONS

    Mr. Secretary and gentlemen, members of the subcommittee 
have submitted a request to send you questions for your 
responses, and will be doing that. And I want to thank you, all 
three of you--Admiral, Secretary, and General--for your service 
to our country, and thank you for your testimony this morning.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]
                Questions Submitted to Donald C. Winter
              Questions Submitted by Senator Thad Cochran
    Question. Mr. Chairman, I am pleased to join you in welcoming 
Secretary Winter, Admiral Mullen, and General Conway to our 
subcommittee.
    This has been a challenging year for our military forces. We 
appreciate the role the Navy and Marine Corps play in protecting the 
United States in the Global War on Terrorism. The all-volunteer active 
and reserve forces and their families have performed with a high degree 
of professional distinction, and our Nation is thankful for their 
service.
    We are aware of the importance of the need for appropriate levels 
of funding to ensure that the men and women in uniform have the 
equipment and training they need to succeed and to return home safely. 
Monday, we began floor consideration of the bill Making Emergency 
Supplemental Appropriations for the Fiscal Year Ending September 30, 
2007, and for Other Purposes.
    During your testimony, I would like you to provide this 
subcommittee with an indication of what you judge to be the latest date 
those Emergency Appropriations must be available to the Navy and Marine 
Corps.
    Answer. Based on cash-flowing GWOT Operation and Maintenance, 
Marine Corps (O&MMC) obligations with baseline funds, the Marine Corps 
would run out of funds in mid-July. The latest dates the Navy could 
receive supplemental funding, by appropriation and month follow: 
Operation and Maintenance, Navy (OMN), Operation and Maintenance, Navy 
Reserve (OMNR) and Military Personnel, Marine Corps (MPMC) in August; 
Military Personnel, Navy (MPN), Reserve Personnel, Navy (RPN) and 
Reserve Personnel, Marine Corps (RPMC) in September.
          naval flight officer strike syllabus--budget savings
    Question. Secretary Winter, the Naval Flight Officer Strike 
syllabus is currently conducted on T-2C aircraft at Pensacola which 
will be replaced with T-45s before December 2008. I have been informed 
that at least 19 T-45 Goshawk aircraft are required if the NFO Strike 
syllabus is continued at NAS Pensacola Naval Air Station in addition to 
adding simulator, infrastructure, qualified maintenance personnel and a 
costly Air Installation Compatible Use Zone study.
    Mr. Secretary, I understand Naval Air Station Meridian has excess 
capacity with its fleet of the new T-45 aircraft along with simulators, 
infrastructure, qualified instructors, and maintenance personnel. I am 
informed the Naval Air Systems Command program manager for the T-45 
concluded in a 2006 study that the Navy could save millions by 
transferring the Naval Flight Officer Strike syllabus to Naval Air 
Station Meridian. Does the budget request before us today take 
advantage of these savings identified by Naval Air Systems Command?
    Answer. The fiscal year 2008 budget request does not include funds 
to move Naval Flight Officer Strike training from NAS Pensacola to NAS 
Meridian. It funds investments that comply with BRAC 2005 language 
consolidating Navy and Air Force Flight Officer training in Pensacola. 
The Navy command charged with all Undergraduate Military Flight Officer 
(UMFO) training, Training Air Wing SIX (TRAWING-6), and all 
infrastructure required to conduct the entire UMFO training syllabus is 
currently in-place at NAS Pensacola.
    2005 BRAC legislation directed the realignment of Randolph Air 
Force Base by relocating Undergraduate Navigator Training (UNT) to 
Naval Air Station Pensacola, Florida. Specific justification included 
enhancing jointness for UNT/Naval Flight Officer (NFO) training, 
reducing excess capacity, and improving military value. Further BRAC 
guidance indicated that training resources; to include aircraft, 
simulators, personnel, and classrooms; should be shared to the maximum 
extent possible, and that similar overhead functions will be 
consolidated and unnecessary billets/positions eliminated. A single-
site UMFO training program at NAS Pensacola best meets these 
Congressionally-approved criteria.
                   littoral combat ship cost overruns
    Question. Secretary Winter, you have provided me updates on the 
cost growth of the Littoral Combat Ship program for the Lockheed Martin 
and General Dynamics ships along with actions you have taken and 
propose to take to control cost. You issued a stop work order in 
January on the third Littoral Combat Ship to analyze and identify the 
root causes of the cost growth to the program. I understand that 
analysis has been completed, the warfighting requirement for the 
Littoral Combat Ship has been reconfirmed, and you are working with 
industry to get the program back on track.
    Mr. Secretary, have you determined the root cause of the cost 
overruns. If so, what is the root cause? Mr. Secretary, I have read in 
the press that the General Dynamics LCS is 41 percent over their 
original bid price and they are about 40 percent complete. Was the 
Lockheed Martin cost overrun similar at that same point in 
construction?
    Answer. We have completed our analysis of the root cause for both 
cost drivers and cost overruns. The results of this analysis and the 
Program Management Assist Group (PMAG) identified several root causes 
that lead to cost and schedule growth in the LCS program. These factors 
include:
  --Pressure to build to schedule was strongly emphasized and generated 
        cost growth.
  --The ambitious schedule relied upon concurrent design and 
        construction that was not achieved.
  --For LCS 1, the deadline for LM's bid was prior to the finalization 
        of Naval Vessel Rules and resulted in the company 
        underestimating the scope of effort required to design and 
        build the ship.
  --The competitive environment created a disincentive for the 
        contractor to report challenges to the Department of the Navy.
    Lockheed Martin was experiencing cost overruns on LCS 1 at 40 
percent complete. However, performance deteriorated significantly later 
in construction, during the period leading up to and after launch.
    We will continue to closely monitor the cost performance on the 
General Dynamics ships, LCS 2 and 4, and will assess the need for 
further action.
                          shipboard materials
    Question. Secretary Winter, for several years now, including the 
fiscal year 2007 Department of Defense Appropriations Conference 
Report, this committee has expressed the view that the Navy should 
carefully review new materials considered for ship insulation and 
ensure that they are ``as safe as'' the materials currently in use.
    I understand there may be some concern regarding the insulation 
material being used on board the LCS-1, specifically with regards to 
its biopersistence, according to a February 9, 2007 report by the 
Institute of Occupational Medicine in the United Kingdom.
    Unlike most civilian, Army or Air Force jobs, our sailors' and 
Marines' work often requires them to live and work on a ship 24 hours a 
day, seven days a week. So, it is with the utmost care that the 
materials and equipment are selected for inclusion in their working and 
living environment.
    Will you take a look at the recent Institute of Occupational 
Medicine (IOM) study to ensure the materials being used are safe for 
our sailors and Marines?
    Answer. The Bureau of Navy Medicine and Surgery (BUMED), 
specifically the Environmental Health Effects Laboratory and the Navy 
Environmental Health Center (NEHC), reviewed the safety of the 
MasterGlas insulating material used on LCS-1 in 2003 and concluded that 
use of the product would create no more risk than use of standard 
military specification fiberglass insulation. Manufactured in the 
United States, MasterGlas is in accordance with all worker health and 
safety laws and has been installed on commercial aircraft for decades.
    NEHC reviewed the February 9, 2007, IOM study, which was ordered 
and funded by the manufacturer of a competing material, InspecFoam. The 
study concluded that MasterGlas fibers may be more biopersistent than 
the MIL-I-742 Fiberglass Hullboard. This means that the fibers are not 
dissolved in body fluids nor cleared from the body as readily. However, 
the study did not take into consideration other factors, such as work 
processes, ventilation, personal protective equipment worn, thermal 
decomposition products, and others. In addition, this single study has 
not been subjected to an independent scientific peer review process.
    MasterGlas insulation is no more harmful than other fiberglass 
products already in use by the Navy. Therefore, it would be 
inappropriate for the Systems Commands to arbitrarily prohibit the use 
of the MasterGlas product based on this one study. Nonetheless, the 
Navy will carefully monitor its use.
                                 ______
                                 
            Questions Submitted to Admiral Michael G. Mullen
            Questions Submitted by Senator Dianne Feinstein
                   u.s.s. ``carl vinson's'' homeport
    Question. What is the Navy's schedule for determining the new home 
port of the U.S.S. Carl Vinson?
    Answer. The Navy announced on March 30, 2007 that the Nimitz-class 
aircraft carrier U.S.S. Carl Vinson (CVN 70) will conduct a homeport 
change to the West Coast and intends to relocate to Naval Air Station, 
North Island in early 2010. Currently U.S.S. Carl Vinson is undergoing 
a maintenance period at the Northrop Grumman Newport News Shipyard in 
Norfolk, VA. When the Carl Vinson returns to an operational status, it 
will relocate to the West Coast. Family notifications will start 12 
months prior to the planned arrival. Permanent Change of Station (PCS) 
moves will be conducted six months prior to and six months after the 
homeport shift.
    The Navy prefers to homeport the Carl Vinson at Naval Air Station, 
North Island. This preference is consistent with the Navy's record of 
decision in 2000 to create capacity to homeport three nuclear powered 
aircraft carriers at Naval Air Station, North Island. The final 
decision on a homeport for the U.S.S. Carl Vinson will be made after 
completion of a Supplemental Environmental Impact Statement (SEIS). 
This SEIS is scheduled to be completed in January 2009 and will examine 
any changes that may have occurred since the Navy completed its 
original environmental analysis in 2000.
    Question. Does Naval Air Station, North Island remain the leading 
candidate?
    Answer. The Navy announced on March 30, 2007 that Naval Air 
Station, North Island will be the planned homeport for the U.S.S. Carl 
Vinson.
    The Navy prefers to homeport the Carl Vinson at Naval Air Station, 
North Island. This preference is consistent with the Navy's record of 
decision in 2000 to create capacity to homeport three nuclear powered 
aircraft carriers at Naval Air Station, North Island. The final 
decision on a homeport for the U.S.S. Carl Vinson will be made after 
completion of a Supplemental Environmental Impact Statement (SEIS). 
This SEIS is scheduled to be completed in January 2009 and will examine 
any changes that may have occurred since the Navy completed its 
original environmental analysis in 2000.
                        city of coronado traffic
    Question. I am aware that the City of Coronado has a very 
significant traffic congestion problem with sailors entering and 
leaving the base and that home porting a third carrier at North Island 
will further exacerbate this problem. The City has expressed concerns 
that the Navy is not adequately participating in the effort to mitigate 
this problem.
    What assurances can you give the City of Coronado that the Navy 
will participate in identifying an appropriate mitigation plan to 
address traffic congestion near North Island?
    Answer. The Navy analyzed impacts to traffic associated with 
homeporting three CVNs at Naval Air Station, North Island prior to 
making a decision in 2000 to develop the capacity to homeport three 
Nimitz Class aircraft carriers there. Prior to making a final decision 
regarding the U.S.S. Carl Vinson's homeport, the Navy will complete a 
supplemental environmental impact statement (SEIS) that will focus on 
issues such as traffic that may have changed since completion of the 
original analysis in 2000.
    The Assistant Secretary of the Navy sent a letter dated March 15, 
2007, to the Mayor of Coronado expressing the Navy's commitment to work 
with the City of Coronado and appropriate regional, state, and federal 
agencies to find ways to relieve current and forecasted travel 
congestion in Coronado. The Navy will continue to support comprehensive 
analyses of traffic volume and flow in an effort to assist those 
agencies in identifying viable, affordable traffic improvements. The 
Navy is currently serving as a cooperating agency on the environmental 
review of alternatives to relieve current and forecasted congestion in 
the State Route 75/282 Transportation Corridor.
                infrastructure improvements for carrier
    Question. Once this mitigation plan is finalized, I understand the 
funding will be required from Federal, state and local sources to 
complete the project.
    What is the Department of the Navy's position on providing funding 
for any infrastructure improvements necessitated by the home porting of 
a third nuclear carrier at North Island?
    Answer. After extensive operational, environmental, and cost 
analysis, the Navy decided in 2000 to create the capacity to homeport 
three nuclear powered aircraft carriers at Naval Air Station, North 
Island. While not all of the construction to implement that decision 
has been completed, Naval Air Station, North Island currently has most 
of the requisite infrastructure and facilities to host three Nimitz-
class aircraft carriers. The estimated cost of additional required 
military construction is $43 million. The Department of the Navy will 
address these requirements through the normal budget process.
                                 ______
                                 
               Question Submitted by Senator Thad Cochran
                          global fleet station
    Question. Admiral Mullen, I understand the United States has Navy 
Frigate and Coast Guard cutter in the Gulf Guinea, off the coast of 
Nigeria, and an amphibious ship is slated to arrive in the Gulf this 
fall.
    I have been informed this ship deployment is part of a ``global 
fleet station'' pilot project, and that the goal of this project is to 
provide support of foreign military training units, Marines, special 
forces, non-governmental organizations and medical experts in the area 
to promote stability in the region. As I understand it, this Global 
Fleet Station is a relatively new concept to our Naval Operations.
    Could you please elaborate on this type of operation (GFS) and tell 
the subcommittee about how your fiscal year 2008 budget request 
supports these types of operations?
    Answer. Global Fleet Station (GFS) is a persistent sea base of 
operations focusing on Phase 0 (shaping) operations, theater security 
cooperation, and global maritime awareness. As a pilot initiative, GFS 
represents a form of adaptive force packaging to achieve a more widely 
distributed force and an increased forward presence with the forces 
already at the Navy's disposal. This will increase regional maritime 
security through the cooperative efforts of joint, interagency, and 
multinational partners, as well as non-governmental organizations 
without imposing a footprint ashore.
    As a new concept, GFS funding is not tied to any specific budget 
line item. Additionally, GFS is intended as an operational usage of 
existing assets, utilizing operational Navy funding for support. While 
no specific line item in the budget request directly supports GFS, all 
operations and maintenance funding in the fiscal year 2008 Budget 
Request support ongoing Navy Operations of which GFS is a part. No 
additional O&M,N funding is required to execute current GFS pilots in 
the U.S. Southern Command and the U.S. European Command areas of 
responsibility.
                                 ______
                                 
             Questions Submitted by Senator Mitch McConnell
                   national surface treatment center
    Question. In my home state of Kentucky, some of my constituents 
operate the National Surface Treatment Center and technology center. 
Their expertise is applied toward helping the Navy resolve shipboard 
problems through the application of innovative products and 
technologies. This Center has helped the U.S. Navy resolve recurrent 
and costly shipboard problems through the insertion of commercial 
products and technologies.
    As you may also be aware, the National Surface Treatment Center's 
Fleet Maintenance Reduction Program has significantly reduced shipboard 
maintenance time and costs for the U.S. Navy. In fact, the work 
currently being performed by the National Surface Treatment Center has 
had a significant and positive impact on the Navy's $4 billion per year 
corrosion problem. In addition, I am informed that these projects save 
the Navy a net of $75 million every year, thus freeing up scarce 
resources for other programs that are critical to our national defense.
    Given the cost savings achieved by the work performed at the 
National Surface Treatment Center and technology center, and given the 
increased pressure placed on the defense budget, this program is a 
strong candidate for inclusion in the annual President's budget. Please 
provide some additional reasons in support of this program's inclusion 
in the President's annual budget.
    Answer. The National Surface Treatment Center (NST Center) partners 
with the Navy, Department of Defense, and industry to fight corrosion 
and solve coating problems. Since 2005 the NST Center has hosted an 
annual conference, which rotates between Louisville, KY, Norfolk, VA, 
and San Diego, CA, bringing together industry leaders in preservation 
technology to collaborate on improving corrosion control efforts.
    The President's budget represents the Navy's attempt to best 
balance scarce resources to requirements. If additional resources 
become available, the Department of the Navy (DON) would review all 
requirements and recommend funding the highest priority items 
identified on the Unfunded Program Requirements List maintained in the 
DON. Support of the NST Center is not currently listed on the UPL, 
however, the NST Center has received Congressional plus ups for the 
last four years.
                                 ______
                                 
             Questions Submitted to General James T. Conway
              Questions Submitted by Senator Thad Cochran
          mine resistant and ambush protected (mrap) vehicles
    Question. General Conway, I observed there is $1.8 billion for mine 
resistant and ambush protected vehicles in the fiscal year 2007 
supplemental and that the top item on the Marine Corps 2008 Unfunded 
Programs List is a requirement to rapidly field 2,700 of these 
vehicles. This is also the number one equipment item on the Army's 
Unfunded Programs List. There appears to be limited funding in the 
fiscal year 2008 budget request. How important are these vehicles and 
is this a fiscal year 2007 or 2008 issue?
    Answer. Government sponsored testing along with operational events 
have clearly demonstrated that the MRAP provides a superior level of 
protection over the M1114/51/52 Up-Armored HMMWV. The levels of 
protection provided by this family of vehicles against threats being 
encountered in both Iraq and Afghanistan has and will continue to save 
the lives and limbs of service members. Without these vehicles our 
soldiers and Marines will continue to conduct operations in the best 
vehicle provided to them (i.e. M1114/51/52 HMMWV). We however, will not 
have provided them the best vehicle available today.
    As a service we have worked diligently to rapidly validate the 
requirement and develop an acquisition strategy that delivers these 
vehicles to our forces in the most expeditious manner. In doing so we 
requested funding at different increments (i.e. fiscal year 2007 Bridge 
Supplemental and fiscal year 2007 Main Supplemental) to support the 
requirements as they existed at the time. In February 2007, we 
solidified our requirement for 3,700 MRAPs. Funding requests/provisions 
at that time (i.e. fiscal year 2007 Bridge Supplemental and fiscal year 
2007 Main Supplemental) did not support the final requirement. Based on 
the unit and total cost, the Marine Corps was precluded from internally 
funding the total remaining requirement and requested additional 
funding in order to meet the total requirement. This request is the 
amount currently seen in the 2008 Unfunded Programs List. A 
reprogramming action for $427.9 million (07-08 PA) was forwarded to 
Congress on March 28th for consideration. This reprogramming would 
accelerate the purchase of MRAP vehicles.
    It is accurate to say that the procurement of these vehicles is not 
an issue associated with fiscal years. It is an urgent requirement that 
we have requested funding for as the requirements process ran its 
course. Ideally, all procurement funding would be available in fiscal 
year 2007 to ensure that maximum production rates are maintained. Short 
of acceleration of funding to the fiscal year 2007 Main Supplemental, 
the 2008 Unfunded Program List is our earliest window for gaining the 
remaining funding necessary to procure these vehicles.
                   marine corps lightweight howitzers
    Question. General Conway, this budget request contains $93 million 
to complete the Marine Corps acquisition objective for lightweight 
howitzers. How does this capability enhance the operational 
effectiveness of the Marine Corps and does this funding request provide 
for the complete Marine Corps requirement?
    Answer. The M777 Lightweight 155 mm towed howitzer replaces the 
aging M198 155 mm towed howitzer which has passed its expected service 
life. It incorporates innovative designs to achieve light weight 
without sacrificing range, stability, accuracy or durability. The M777, 
with its technologically-advanced digital fire control system (DFCS), 
enhances the Marine Air Ground Task Force Commander's ability to 
provide close, supporting indirect fires through improved accuracy and 
responsiveness. In addition, the DFCS enables the employment of the 
precision munitions required on today's battlefield. The new howitzer's 
lighter weight increases its deployability and mobility, providing the 
warfighter a persistent, all-weather fire support asset throughout the 
full range of military operations.
    The current approved Marine Corps acquisition objective is 356 
howitzers. The $93 million in the fiscal year 2008 budget request will 
procure forty-seven howitzers which meets the objective of 356. The 
fiscal year 2008 Marine Corps Grow the Force initiative includes an 
additional $107.5 million to fund the increased requirement of 43 
howitzers.
               marine corps amphibious ship requirements
    Question. General Conway, President Bush requested Congress 
increase the end strength of the Army and Marines by 92,000 in 5 years 
to support the Global War on Terrorism. Obviously with this increase, 
in particular for the Marines, there will be an increased need for 
amphibious ships supporting these additional troops. The President's 
fiscal year 2008 budget proposal requests one LPD-17 amphibious ship, 
however the Navy Unfunded Programs List shows an additional LPD as 
being unfunded at the top of the list. General Conway, can you talk 
more about your future amphibious ship requirements?
    Answer. Amphibious warfare ships are the centerpiece of the Navy-
Marine Corps' forcible entry and Seabasing capability, and have played 
an essential role in the Global War on Terrorism. These ships are 
equipped with aviation and surface assault capabilities, which coupled 
with their inherent survival and self-defense systems, makes them 
ideally suited to support a broad range of mission requirements. This 
survivability is critical to ensure the Nation has the widest range of 
response options. Not only must our naval forces maintain the ability 
to rapidly close, decisively employ, and effectively sustain Marines 
from the sea, they must also respond to emerging Global War on 
Terrorism requirements, crisis response, and humanitarian assistance 
missions on short notice around the world.
    For forcible entry, the Marine Corps' requirement is a single, 
simultaneously-employed two Marine Expeditionary Brigade (MEB) assault 
capability. One MEB requires seventeen amphibious warfare ships; 
however, given the fiscally constrained environment, the Navy and 
Marine Corps have agreed to assume risk by only using fifteen. 
Historical amphibious ship availability rates dictate a minimum of 
eleven ships of each of the current types of amphibious ship--a minimum 
of thirty-three total ships--resulting in a Battle Force that provides 
thirty operationally available amphibious warfare ships. The three 
types of ships comprising the Battle Force are aviation capable big-
deck ships (LHA/LHD/LHA(R)), LPD17 class ships, and LSD 41/49 or 
equivalent ships; therefore, in that Battle Force, ten aviation-capable 
big deck ships (LHA/LHD/LHA(R)) and construction of ten LPD 17 class 
ships are required to accommodate the MEB's aviation combat element.
    Given the recognized flexibility of these platforms and requirement 
to enhance their power projection capabilities to support stability 
operations and sustained counter-terrorism efforts, many of our 
coalition partners are planning to acquire amphibious ships that can 
support both surface and aviation maneuver elements. Such efforts 
acknowledge the great utility of a robust amphibious warfare capability 
in the face of growing anti-access threats.
                      marine corps seabasing plan
    Question. General Conway, the Navy's fiscal year 2008 budget 
requests supports Research and Development of the Joint High Speed 
Vessel with acquisition beginning in fiscal year 2008 for the Army and 
2009 for the Navy. I understand these vessels are highly flexible, 
adaptable to a variety of payloads, much faster, and can operate in 
shallower ports than traditional larger vessels. I understand the Joint 
High Speed Vessels will be an important connector for the Marine Corps 
Seabasing plan. Can you provide the subcommittee with an overview of 
the important role of the Joint High Speed Vessel in the Marine Corps 
Seabasing plan?
    Answer. The Joint High Speed Vessel or JHSV is part of a family of 
vessels and craft that support Seabasing operations by connecting the 
various components of the Sea Base together and to the surrounding 
theater architecture. In major contingency operations, the JHSV self-
deploys to the theater of operations where it supports force Closure, 
Arrival (and assembly), Employment, Sustainment, and Reconstitution 
(CAESR). The following paragraphs briefly describe that support.
    Closure.--JHSVs pick up arriving Flow-in Echelon Marines and their 
equipment at Advance and/or Intermediate Staging Base(s) for transport 
to and rendezvous with the ships of the Sea Base.
    Arrival (and assembly).--As the force arrives and assembles at sea, 
JHSVs are used to move Marines and their equipment between the various 
ships constituting the Sea Base (an intra-Sea Base connector.
    Employment.--In the permissive threat ``lee'' created by assault 
echelon forces and Sea Shield, JHSVs transport units and their 
equipment from the Sea Base into austere offload ports ashore.
    Sustainment.--JHSVs move sustainment from theater logistics nodes 
to the Sea Base, within ships of the Sea Base, and from the Sea Base to 
Marines employed ashore.
    Reconstitution.--In addition to recovering Marines employed ashore 
back to the ships of the Sea Base, the JHSV moves replacement 
personnel, repair supplies, and replacement equipment to and from 
theater Advance and Intermediate Staging Bases.
    Not only do JHSVs enable support to Seabasing operations, they 
address Geographic Combatant Commanders' requirements for an intra-
theater connector in support of their Theater Security Cooperation 
Plans, Global War on Terrorism operations, theater logistics needs, and 
humanitarian assistance/disaster relief contingencies. JHSVs are also a 
key enabler for the future realignment of III MEF units out of Okinawa 
to other locations in the Pacific.

                          SUBCOMMITTEE RECESS

    Senator Inouye. The next meeting of the subcommittee will 
be on April 11, Wednesday, at 10:30 a.m. At that time, we will 
receive testimony on the National Guard and Reserves.
    Thank you very much; the subcommittee will stand in recess.
    [Whereupon, at 11:36 a.m., Wednesday, March 28, the 
subcommittee was recessed, to reconvene at 10:30 a.m., 
Wednesday, April 11.]