[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]





                         [H.A.S.C. No. 111-61]

                                HEARING

                                   ON

                   NATIONAL DEFENSE AUTHORIZATION ACT

                          FOR FISCAL YEAR 2010

                                  AND

              OVERSIGHT OF PREVIOUSLY AUTHORIZED PROGRAMS

                               BEFORE THE

                      COMMITTEE ON ARMED SERVICES

                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED ELEVENTH CONGRESS

                             FIRST SESSION

                               __________

         SEAPOWER AND EXPEDITIONARY FORCES SUBCOMMITTEE HEARING

                                   ON

                     BUDGET REQUEST FOR DEPARTMENT

                        OF THE NAVY SHIPBUILDING

                          ACQUISITION PROGRAMS

                               __________

                              HEARING HELD
                              MAY 15, 2009


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]






                  U.S. GOVERNMENT PRINTING OFFICE
57-219                    WASHINGTON : 2010
-----------------------------------------------------------------------
For sale by the Superintendent of Documents, U.S. Government Printing 
Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; DC 
area (202) 512-1800 Fax: (202) 512-2104  Mail: Stop IDCC, Washington, DC 
20402-0001






             SEAPOWER AND EXPEDITIONARY FORCES SUBCOMMITTEE

                   GENE TAYLOR, Mississippi, Chairman
SOLOMON P. ORTIZ, Texas              W. TODD AKIN, Missouri
JAMES R. LANGEVIN, Rhode Island      ROB WITTMAN, Virginia
RICK LARSEN, Washington              ROSCOE G. BARTLETT, Maryland
BRAD ELLSWORTH, Indiana              J. RANDY FORBES, Virginia
JOE COURTNEY, Connecticut            DUNCAN HUNTER, California
JOE SESTAK, Pennsylvania             MIKE COFFMAN, Colorado
GLENN NYE, Virginia                  THOMAS J. ROONEY, Florida
CHELLIE PINGREE, Maine
ERIC J.J. MASSA, New York
                  Will Ebbs, Professional Staff Member
               Jenness Simler, Professional Staff Member
                  Elizabeth Drummond, Staff Assistant









                            C O N T E N T S

                              ----------                              

                     CHRONOLOGICAL LIST OF HEARINGS
                                  2009

                                                                   Page

Hearing:

Friday, May 15, 2009, Fiscal Year 2010 National Defense 
  Authorization Act--Budget Request for Department of the Navy 
  Shipbuilding Acquisition Programs..............................     1

Appendix:

Friday, May 15, 2009.............................................    33
                              ----------                              

                          FRIDAY, MAY 15, 2009
FISCAL YEAR 2010 NATIONAL DEFENSE AUTHORIZATION ACT--BUDGET REQUEST FOR 
        DEPARTMENT OF THE NAVY SHIPBUILDING ACQUISITION PROGRAMS
              STATEMENTS PRESENTED BY MEMBERS OF CONGRESS

Akin, Hon. W. Todd, a Representative from Missouri, Ranking 
  Member, Seapower and Expeditionary Forces Subcommittee.........     3
Taylor, Hon. Gene, a Representative from Mississippi, Chairman, 
  Seapower and Expeditionary Forces Subcommittee.................     1

                               WITNESSES

McCullough, Vice Adm. Barry J., USN, Deputy Chief of Naval 
  Operations for Integration of Capabilities and Resources, U.S. 
  Navy...........................................................     7
Stackley, Hon. Sean J., Assistant Secretary of the Navy 
  (Research, Development and Acquisition), U.S. Navy.............     5

                                APPENDIX

Prepared Statements:

    Akin, Hon. W. Todd...........................................    39
    Stackley, Hon. Sean J., joint with Vice Adm. Barry J. 
      McCullough.................................................    41
    Taylor, Hon. Gene............................................    37

Documents Submitted for the Record:

    [There were no Documents submitted.]

Witness Responses to Questions Asked During the Hearing:

    [There were no Questions submitted during the hearing.]

Questions Submitted by Members Post Hearing:

    [There were no Questions submitted post hearing.]
 
FISCAL YEAR 2010 NATIONAL DEFENSE AUTHORIZATION ACT--BUDGET REQUEST FOR 
        DEPARTMENT OF THE NAVY SHIPBUILDING ACQUISITION PROGRAMS

                              ----------                              

                  House of Representatives,
                       Committee on Armed Services,
            Seapower and Expeditionary Forces Subcommittee,
                              Washington, DC, Friday, May 15, 2009.
    The subcommittee met, pursuant to call, at 10:02 a.m., in 
room 2212, Rayburn House Office Building, Hon. Gene Taylor 
(chairman of the subcommittee) presiding.

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

    Mr. Taylor. The subcommittee will come to order. Good 
morning and welcome.
    Today, we need concession to receive testimony on the 
fiscal year 2010 budget request for shipbuilding programs. 
Appearing before us today are the chief acquisition officer of 
the Navy, the Honorable Sean Stackley; the chief requirements 
officer of the Navy, Vice Admiral Barry McCullough.
    Admiral, you are well-known to this committee. Welcome 
back.
    Secretary Stackley, while many know you and have worked 
with you in the past, we believe this is the first time that 
you will testify before this committee, and welcome.
    The good news is that we are not going to be interrupted by 
votes because the House stands in recess. It is my hope that 
this will allow us to have a frank and detailed discussion on 
where we are and where we need to go with our shipbuilding 
programs.
    I thank the members in attendance for staying in town to 
participate in this very important hearing.
    In previous years at this hearing, I have commented that 
the budget request and the accompanying 30-year shipbuilding 
plans were unachievable. In fact, I have stated that the long-
range plan was pure fantasy.
    It nows appears that the Navy has learned how to deflect 
criticism of the shipbuilding plan. They don't submit one. 
Although required by title 10 of the United States Code, all 
plans for future years' ship procurement are being withheld 
from the Congress. This obviously makes it very difficult for 
the Members of Congress to fulfill the Article I obligations to 
provide and maintain a Navy.
    I realize the two witnesses sitting before this committee 
today did not make that decision, and I will not continue to 
dwell on the subject. But I state for the public record that 
the failure of the Department to describe the future 
shipbuilding plan will not prevent this subcommittee from doing 
due diligence required in recommending to the full committee 
and to the full House a shipbuilding plan which will restore 
the Navy to an acceptable number of ships which will preserve 
domestic industrial capacity of the construction of warships.
    I will say that again. If the Navy chooses not to submit a 
shipbuilding plan to Congress, Congress will provide one for 
the Navy.
    With limited time, the subcommittee has to review this 
year's budget request. It appears to be somewhat better than 
previous years. The Department is requesting authorization for 
the procurement of eight new ships. And it is requesting 
advanced procurement funds for the procurement of at least 
seven more next year, including two submarines.
    If you take into account that the Littoral Combat Ship 
program (LCS) and the joint high speed vessel do not require 
advanced procurement, then the potential exists for a 12-ship 
request next year. And the following concerns, which I trust 
that our witnesses will address today--none of this should come 
as a surprise, particularly to our two witnesses, since I have 
expressed these concerns either publicly or directly to them.
    I am concerned about the Electromagnetic Aircraft Launch 
System (EMALS) program of the next aircraft carrier. Mr. 
Secretary well knows I recently visited the production 
facility, and I was favorably impressed. However, failure of 
this one system to deliver on its promises means that we are 
building the world's largest helicopter carrier. I would like 
the Secretary to address what additional oversight and 
continued out oversight envisions for the program.
    I also remain very concerned about the LCS program. I am 
not happy with either the cost or scheduled performance.
    In January, I spoke with the captain of the first ship, and 
to the credit of the shipbuilder, he is pleased with the ship 
and I am happy that he is pleased with the ship. But the fact 
remains that the ship was delivered 18 months late and two-and-
a-half times over the cost that the contractor promised. No 
one, neither the Navy nor the contractor, should be patting 
themselves on the back for the first ship or for the second 
ship, which has still not been delivered.
    I am not convinced that the costs are being properly 
monitored by the Navy. These ships are too expensive. We need 
to drive the costs down and/or we need to see who can build 
these ships for a fair price.
    I think it is important to note that everything about this 
program is different from other shipbuilding programs. The Navy 
does not contract with the shipyards building the ship. They 
have agreements with two prime contractors. The ship's 
propulsion systems; combat systems; Command, Control, 
Communications, Computers, and Intelligence (C4I) systems were 
not specified by the Navy; they were chosen by the prime 
contractors to meet performance specifications. Because of 
this, there is very little common equipment between the two 
types of ships.
    Lack of commonality costs money now, it will increase 
training costs for the sailor and it will increase overall life 
cycle costs. I request that the Admiral and the Secretary 
address this issue for lacking commonality today.
    Returning to the destroyer program, it is no secret that 
this committee last year supported the Chief of Naval 
Operations' (CNO's) desire to return to construction of the 
Arleigh Burke-class guided missile destroyer (DDG-51). Not 
everyone is happy with the final decision. We seem to now have 
a final decision for the Secretary of Defense on the way 
forward, an agreement between the two shipyards, which will 
level the industrial load. I request the Secretary explain the 
agreements and I request the Admiral give us some sense of how 
he will use these two very different types of destroyers.
    I would also like an explanation this morning of some 
fairly significant funding requests in the research and 
development accounts. The Secretary of Defense has testified 
that future procurement decisions will be based on the results 
of the Quadrennial Defense Review, and it has stated that as 
the reason to not request funds to alleviate shortfalls and 
validate requirement gaps, such as the current Strike Fighter 
shortfall of the F/A-18s.
    If the Department is requesting one-half of a billion 
dollars for the development efforts for replacement of a 
higher-class submarine before the QDR validates the 
requirement, make no mistake, this subcommittee has been the 
strongest proponent over the last three years in submarine 
construction and the preservation of our Nation's submarine 
industrial base. The subcommittee has been supportive of 
pulling forward the design of the next-generation submarine to 
ensure we do not lose our skilled-edge designer workforce. Yet 
this request goes far beyond that goal.
    I ask the witnesses to please explain why the subcommittee 
should recommend the full request for a nonvalidated 
requirement when there are very real shortfalls and other 
validated requirements today.
    These are a few of our concerns. I am sure the other 
members will express theirs.
    Again, I welcome the Secretary. I welcome the Admiral for 
being with us.
    And I now turn to my friend from Missouri, the ranking 
member, Mr. Akin.
    [The prepared statement of Mr. Taylor can be found in the 
Appendix on page 37.]

STATEMENT OF HON. W. TODD AKIN, A REPRESENTATIVE FROM MISSOURI, 
 RANKING MEMBER, SEAPOWER AND EXPEDITIONARY FORCES SUBCOMMITTEE

    Mr. Akin. Thank you, Mr. Chairman. And good morning to our 
witnesses. I had the opportunity to meet with Admiral 
McCullough for the first time yesterday. I had another good 
discussion yesterday with Secretary Stackley, also in our 
office.
    I would like to thank you again for taking time to answer 
my questions and share your thoughts regarding some of the 
shipbuilding programs proposed in this year's budget.
    I was also interested to hear the Chief of Naval Operations 
state yesterday at the full committee hearing that the Navy 
still intends to maintain the 313 ships. It had begun to sound 
as if the Secretary of Defense in his Foreign Affairs article 
and the Navy in its budget rollout were beginning to back away 
from that number. It was not clear to me how the Navy planned 
to implement the joint maritime strategy with its emphasis on 
forward presence if the Navy intended to accept fewer ships. A 
ship can only be in one place at a one time, and today's fleet 
is the smallest it has been for nearly 100 years.
    Despite the good news, however, that the Navy is not 
backing away from the goal of increasing the size of the fleet, 
the CNO also acknowledged in his written statement for fiscal 
year 2010 budget aligns with the path of our maritime strategy 
is that, ``However, we are progressing at an adjusted pace.'' 
That sounds like code to me for, this budget request doesn't 
invalidate our maritime strategy, but it will allow us to meet 
our goals.
    I see evidence of this in the budget request for 
shipbuilding. For example, the Navy will commission and 
decommission the same number of ships this year, which means no 
net increase to the number of ships. To be fair, it can't be 
blamed on the budget request, for the simple math, 300 ships 
with an average 30-year life, means that we need to commission 
and decommission about 10 ships a year. And this budget 
request, only eight ships, presents no future plan to give 
Congress any reason to believe the Navy will ever meet its 
force structure requirements.
    Our colleague, Representative Forbes, asked Secretary Gates 
and Admiral Mullen about the lack of a 30-year shipbuilding 
plan at a hearing earlier this week. Admiral Mullen stated it 
will come in the 2011 budget.
    I would say we can rely reasonably well on the 30-year 
shipbuilding plan that has been submitted before, but I count 
at least nine ways this budget diverges from the 2009 plan:
    One, moving the funding of carriers to 5-year centers drops 
the force to 10 carriers by 2039;
    Two, building three DDG-1000 destroyers instead of seven;
    Three, building one DDG-51 destroyer instead of zero;
    Not building the next-generation cruiser;
    Not building a large-deck amphib for the maritime 
prepositioning force in 10;
    Not building a mobile landing platform ship for the 
maritime prepositioning force in 2010; and then
    Seven, not shutting down the amphibious transport dock 
(LPD-17) production line at nine ships;
    But funding the final increment for the tenth ship;
    Nine, building two T-AKE ships for 10, instead of zero; and
    Investing half a billion dollars in research and 
development (R&D) for the replacement of the Ohio-class 
submarine.
    So, in fact, we cannot rely upon the last shipbuilding plan 
and evidently we don't receive a new one. We have the same 
problems on the aviation front, but I will save those comments 
for next week's aviation hearing.
    Therefore, we can only rely on the testimony you provide 
today to shed light on the analysis that went into the 
decisions that were made within the shipbuilding account.
    The investments that the Navy is making in ship 
construction and R&D were evidently a higher priority than 
addressing the Strike Fighter gap which until recently the Navy 
said was a serious concern. This may be true, but to do our 
jobs, it becomes critically important that this committee 
understand your reasoning.
    Thank you again, Mr. Chairman.
    To our witnesses, I appreciate your being with us today and 
truly look forward to our discussion.
    [The prepared statement of Mr. Akin can be found in the 
Appendix on page 39.]
    Mr. Taylor. Thank you, Mr. Akin.
    The Chair now recognizes the Secretary, Mr. Stackley.

STATEMENT OF THE HON. SEAN J. STACKLEY, ASSISTANT SECRETARY OF 
  THE NAVY (RESEARCH, DEVELOPMENT AND ACQUISITION), U.S. NAVY

    Secretary Stackley. Thank you, sir.
    Mr. Chairman, Representative Akin, distinguished members of 
the subcommittee, thank you for the opportunity to appear 
before you today to address Navy shipbuilding. If it is 
acceptable to the committee, I would propose to keep my opening 
remarks brief and submit a formal statement for the record.
    Mr. Taylor. Without objection, Mr. Stackley.
    I also want to inform that although it is the norm for the 
full committee to limit witnesses for five minutes, please take 
whatever time you feel is necessary.
    Secretary Stackley. Thank you, sir.
    Mr. Taylor. Thank you.
    Secretary Stackley. Today's Navy is a fleet of 283 battle 
force ships, as many as half of which may be underway on any 
given day, supporting combat operations, building global 
partnerships, providing international security, performing 
humanitarian assistance and disaster response, prosecuting 
piracy, testing future capabilities and training for future 
operations.
    Beyond numbers, the quality of the force--our ships, 
aircraft, weapons systems and, most importantly, our sailors 
and marines--is unmatched at sea. So it would be easy to take 
comfort in knowing that for the next decade, and certainly 
beyond, the Navy and Marine Corps stand ready to respond to 
major conflict with the most capable naval warfare systems in 
the world today. The events of the century, however, point to 
our future and must increasingly contend with irregular and 
asymmetric threats. And two, we must pace the capabilities of 
rogue states and emerging naval powers that would intend to 
challenge our influence in the regional security of our friends 
and allies.
    In the face of these growing challenges, the Chief of Naval 
Operations has outlined requirements for the future force, the 
313-ship Navy. In fact, CNO has emphasized, the 313 ships 
represents the floor if we are to meet the full range of 
missions confronting the Navy in the next decade and beyond.
    The fiscal year 2010 budget request funds eight ships, a 
modest but important step forward towards meeting the CNO's 
requirements. Again, however, it is more than numbers.
    The Navy is moving to close gaps in our capabilities. To 
this end, we will restart the DDG-51 construction in 2010 to 
provide increased air and missile defense to meet the demand 
from combatant commanders. The success of the Aegis system 
against ballistic missiles demonstrates that at-sea testing 
and, two, through real-world performance against an earthbound 
satellite provides a solid foundation for this mission.
    At the other end of the warfare spectrum, we are increasing 
production of the Littoral Combat Ship with our request to 
deliver this needed capability to the fleet. We know there are 
many challenges ahead as we ramp up construction, tackle 
affordability and learn how to best operate and support this 
new class. But we are confident that the utility and 
flexibility of this ship will prove indispensable in future 
naval operations.
    This year's request also includes the twelfth Virginia-
class fast attack submarine and two T-AKE dry cargo and 
ammunition ships. Both of these are strongly performing 
programs. The eight ships in our request is one of two joint 
high speed vessels that the Navy is jointly procuring with the 
Army.
    The budget request also funds the balance of LPD-26 and 
DDG-1002 and includes advanced procurement for seven future 
ships.
    The underlying challenge, indeed the pressing requirement 
before us today, is affordability. This is not a new challenge, 
but it has taken on new dimensions. The fact is that ship costs 
are rising faster than our top line. Per-ship costs have risen 
due to such factors as low-rate production, reduced 
competition, increased system complexity, build rate, 
volatility, instability in ship class size and challenges with 
introducing new technologies into new platforms.
    Perhaps most significantly, over the past decade, we have 
introduced 11 new class designs, 11 lead ships, each a highly 
complex prototype bringing its own unique challenges.
    And then, compounding these issues, particularly in the 
case of lead ships, where there is greater risk and 
uncertainty, we have fallen short in our ship cost estimates, 
or in certain cases, in our willingness and ability to fully 
fund to the estimate.
    All of these factors lead to inefficient production and 
cost growth. We have learned, or in certain cases relearned, 
the lessons of this experience.
    Accordingly, the Navy understands and agrees with the 
objectives of the House bill on acquisition reform, and we 
strive to meet its spirit and intent in our ongoing initiatives 
to raise the standards, to improve the processes, to instill 
necessary discipline and to strengthen the professional core 
that manages our major defense acquisition programs. And to 
this end, the 2010 Navy shipbuilding plan strives to provide 
stability, which would underpin improved performance across 
government and industry.
    The budget request builds on ship programs which are 
currently in serial production. There is renewed emphasis on 
minimizing change to requirements, minimizing change to design 
and improving our estimates for follow-up ships. This leads to 
reducing risk to the shipyard's ability to execute follow-on 
vessels and enabling the Navy to expand the use of fixed-price-
type contracts.
    We are committed to ensuring that new ship designs are 
mature enough to commence production. We are working to fully 
leverage competition at every level of our shipbuilding 
programs, recognizing at the prime there are often limited 
competitions, but we are drawing down to the first and second 
tier vendors as well.
    Within our shipbuilding contracts, we are implementing 
affordability programs, reuse of existing design and incentives 
for selected industrial capital investments and improvement 
projects. As well, open architecture, both for hardware and 
software, promises to be a powerful cost-avoidance tool as well 
as a process for improving our warfighting capability.
    The challenge before us is great, but so is the need. And 
in meeting the need, this subcommittee has been steadfast and 
unwavering in its support for a strong Navy and Marine Corps. 
We thank you for that.
    Again, I thank you for your time today and look forward to 
your questions.
    [The joint prepared statement of Secretary Stackley and 
Admiral McCullough can be found in the Appendix on page 41.]
    Mr. Taylor. Thank you, Mr. Secretary.

 STATEMENT OF VICE ADM. BARRY J. MCCULLOUGH, USN, DEPUTY CHIEF 
    OF NAVAL OPERATIONS FOR INTEGRATION OF CAPABILITIES AND 
                      RESOURCES, U.S. NAVY

    Mr. Taylor. Admiral McCullough.
    Admiral McCullough. Chairman Taylor, Representative Akin 
and distinguished members of the subcommittee, I am honored to 
appear before you this morning with Secretary Stackley to 
discuss Navy shipbuilding. I request our written statement be 
made a part of the record.
    Mr. Taylor. Without objection.
    Admiral McCullough. Mr. Chairman, before I begin, I would 
like to mention that in addition to our role in seapower, the 
Navy currently has more than 13,000 Navy personnel serving on 
the ground in Iraq and Afghanistan. They serve in traditional 
roles with the Marine Corps, but also in support of the land 
service combat support and combat service support in support of 
joint commands in the Army. We provide these sailors, in 
addition to fulfilling our commitments to the country and our 
allies to provide persistent forward presence, incredible 
combat power in support of the maritime strategy.
    Today, we have a balanced fleet capable of meeting most 
combating commander demands, from persistent presence to 
counter piracy to ballistic missile defense. Right now, we have 
40,000 sailors deployed aboard 124 ships and submarines around 
the world as part of our ever-deployed force.
    However, as we look ahead, in the balance of capability and 
capacity, we are seeing emerging warfighting requirements in 
open ocean antisubmarine warfare, antiship cruise missile and 
theater ballistic missile defense. Gaps in these warfare areas 
pose increased risk to our forces; state and nonstate actors 
who in the past have only posed limited threats in the littoral 
are expanding their reach beyond their shores and with improved 
warfighting capabilities.
    A number of countries who historically have only possessed 
regional military capabilities are investing in their navies to 
extend their reach and influence as they compete for global 
markets. Our Navy needs to outpace other navies' capabilities 
as they extend their reach.
    The Navy must be able to assure access in undeveloped 
theaters. We have routinely had access to forward staging bases 
in the past. This may not always be the case as we go forward.
    In order to align our surface combatant investment strategy 
to best meet evolving warfighting gaps, our fiscal year 2010 
budget request truncates the Zumwalt-class guided missile 
destroyer (DDG-1000) program at three ships and restarts the 
DDG-51 production line. This plan best aligns our service 
combatant investment strategy to meet Navy and combatant 
commander warfighting needs.
    The Navy must have the right capacity to meet combatant 
commander warfighting requirements and remain a global 
deterrent. Combatant commanders continue to request more ships 
and increased presence to expand cooperation with new partners 
in Africa, the Black Sea, the Baltic region and the Indian 
Ocean. This is in addition to the presence required to maintain 
our relationships with current allies and partners.
    The Navy can always be persistently present in areas of our 
choosing. We lack the capacity to be persistently present 
globally. This creates a presence deficit, if you will, where 
we are unable to meet combatant commander demands. Africa 
Command (AFRICOM) capacity commands will not mitigate the 
growing European Command (EUCOM) requirement and Southern 
Command (SOUTHCOM) has consistently required more presence that 
goes largely unfilled.
    The Navy remains committed to procuring 55 Littoral Combat 
Ships. The LCS program will deliver capabilities to close 
validated warfighting gaps. LCS's inherent speed, agility, 
shallow draft, payload capacity and reconfigurable mission 
spaces provides an ideal platform for conducting additional 
missions in support of the maritime strategy to include 
irregular warfare maritime security and antipiracy operations.
    The Navy remains committed to an 11-carrier force for the 
next three decades, which is necessary to ensure that we can 
respond to national crisis with the currently, presently 
described time lines. Our carrier force provides the Nation the 
unique ability to overcome political and geographic barriers to 
access for all missions and to project power ashore without the 
need for host-nation ports and airfields.
    The Ohio-class ballistic submarine, originally designed for 
a 30-year service life, will start retiring in 2027 after over 
40 years of service life. The Navy commenced an analysis of 
alternatives in fiscal year 2008 for a replacement Ohio-class 
ballistic submarine (SSBN). Early research and development will 
set the stage for the first ship to begin construction in 
fiscal year 2019. This time line is consistent with the 
development of the Ohio class.
    The Virginia-class submarine is a multimission platform 
that fulfills full spectrum requirements. Virginia was designed 
to dominate the undersea domain in the littorals, as well as in 
the open ocean, in today's challenging security environment; 
and it is replacing our aging 688 class submarines. Now, in its 
tenth year of construction, the Virginia program is 
demonstrating that this critical capability can be delivered 
affordably and on time.
    In this budget request, we have delayed the start of the 
follow-on cruiser program known as Future Class Cruiser (CGX). 
This requirement has been validated by the Joint Requirements 
Oversight Council (JROC), and the JROC approved the initial 
capabilities document. However, this system is dependent on 
development of certain aspects of the ballistic missile defense 
system, total architecture, specifically sensors and sensor 
netting. Thus, the analysis of alternatives remains in Navy 
staffing until we better understand the required sensors for 
this platform and our ability to deliver that capability.
    The Commandant of the Marine Corps is determined that a 
minimum of 33 assault echelon ships is necessary to support 
Marine Corps lift requirements; specifically, he has requested 
a force of 11 aviation capable ships, 11 LPD-17s and 11 LSDs. 
The Chief of Naval Operations supports the Commandant's 
requirement; however, this requirement, as well as the CGX 
requirement, will be further reviewed by the Department during 
the Quadrennial Defense Review (QDR).
    The Navy must maintain its carrier submarine and amphibious 
forces. In addition, we need to increase our surface combatant 
capacity with additional destroyers in LCS to meet combatant 
commander needs today and for ballistic missile defense, 
theater security cooperation. And then steady state security 
posture of the future.
    I thank you for this opportunity to discuss the Navy 
shipbuilding program and your support of our Navy. I look 
forward to answering your questions and, again, thank you very 
much for your support to the Navy.
    [The joint prepared statement of Admiral McCullough and 
Secretary Stackley can be found in the Appendix on page 41.]
    Mr. Taylor. Admiral, thanks for your comments and, above 
all, thanks for your many years of service to our Nation.
    I am going to turn to Mr. Akin.
    Mr. Akin. I didn't have any specific--I guess I could run 
through a couple of different things here.
    The first one is the Arleigh Burke-class guided missile 
destroyer (DDG-51). Last year, the Navy was criticized for 
proposing to restart the DDG-51 line without having revalidated 
the requirement through the Joint Requirements Oversight 
Council (JROC).
    In your opinion, was that necessary? Have you done so? Or 
is it not really necessary?
    Admiral McCullough. We took the DDG-51 brief through the 
Joint Requirements Oversight Council. There were specific 
questions about what drove the change. The change was driven by 
our evaluation of changing threats globally.
    This was conveyed to the JROC, specifically the development 
of antiship ballistic capability in the western Pacific; the 
proliferation of ballistic missiles globally; the improved 
capability in nonstate actors, specifically demonstrated by 
Hezbollah in the 2006 war with Israel when Hezbollah launched 
two C-8O2 coastal defense cruise missiles, one striking the 
Israeli ship Ahi-Hanit, and the other striking a merchant 
vessel.
    So from an area air defense perspective and an 
antiballistic defense perspective, we saw a rapid increase in 
development of threat capability and the proliferation of this 
capability.
    Additionally, we have been monitoring submarine deployments 
of potential adversaries in the Pacific and have noted an 
increase in deployment numbers and times of that potential 
adversary out into areas east of Taiwan. These are not with 
previously noted noisy-type submarines, but with increasingly 
quiet, advanced diesel electric submarines with antiship cruise 
missile capability.
    When we looked at the development of the threat and the 
fact that the development of that threat had moved to the left, 
we found it increasingly necessary to increase our capability 
and capacity in those areas.
    This goes hand in hand with the capability that we have 
developed in the DDG-51 class ship. There are those that would 
say that is older technology, and I would say that the 
capability we put in DDG-112 is substantially much better from 
a capability standpoint than what was originally put in the 
Arleigh Burke in the early 1990s. Arleigh Burke DDG-51's first 
deployment was in 1991.
    When we look----
    Mr. Akin. Is that capability that you are talking about 
stronger in terms of the ballistic defense or also submarine, 
antisubmarine?
    Admiral McCullough. Open ocean submarine warfare in the 
case of the Arleigh Burke destroyers is much better. The 
Arleigh Burke has a much more powerful, active sonar; and that 
was by design. The DDG-1000 has a lower-power sonar, but that 
is required in littoral operations, specifically in a 
reverberation environment.
    The DDG-1000 ship is an excellent ship for what we asked 
the designers to design and the shipbuilders to build, but it 
does not answer the threats we see today in antiballistic 
missile defense, cruise missile defense and open ocean 
antisubmarine warfare.
    That is why we made the change, sir.
    Mr. Akin. One other question, then.
    My understanding is that the Navy intends to spend $1.6 
billion to complete research and development (R&D) on DDG-1000, 
and that may have benefits for future platforms such as CVN-78, 
the Ford-class carrier, and help the industrial base. But since 
DDG-1000 provides a capability that is less valuable to the 
Navy in the future, can you tell me if the Navy has considered 
sacrificing some of that capability in order to save the money 
for R&D or procurement, or it could be applied elsewhere?
    Secretary Stackley. Sir, if I could take that question, let 
me break down the R&D elements of DDG-1000 into a couple of 
categories.
    First, you have an R&D stream that goes for the total 
platform that, regardless of the quantity that you build, if 
you are going to build one, we have to complete the design 
development for the class.
    There is a second R&D stream that goes to supporting 
completion of development of major systems, such as the dual 
band radar, the advanced gun system; and again, if you are 
going to field one DDG-1000, you are going to have to invest in 
those dollars. And then the dual band radar, as well, goes to 
the carrier program. So that stream would stay in place.
    But there are significant opportunities to improve on the 
total dollars, particularly when we take a look at some of the 
test and evaluation (T&E) requirements. The T&E program for 
DDG-1000 is extremely robust, and I am working with the program 
office right now. We are basically going line by line, tracing 
requirements--program requirement, platform requirements, 
system requirements--to test requirements and basically looking 
to be able to harvest some of those opportunities. Those aren't 
in the near years. You don't get heavy into T&E until the 
outyear.
    But we are attacking it, and I would be happy at the right 
time to return to the subcommittee here and give you greater 
insight into both the opportunities and the approach we are 
taking.
    Mr. Akin. Thank you very much.
    I yield back, Mr. Chairman.
    Mr. Taylor. Thank you, Mr. Akin.
    Secretary Stackley--and again you are fairly new to the 
job; when we express our disappointment in the Navy's failure 
to articulate a shipbuilding plan, you just happen to be the 
one to get the message today.
    Without the Navy articulating a plan, let me tell you what 
I think is the plan.
    Apparently, one of the centerpieces will be, as the Admiral 
mentioned, a very large purchase of LCSs. The LCS was--when the 
Navy came to Congress and said they wanted the ship, the 
centerpiece of it was, it was going to be an affordable 
warship. And the price grows from $220 to $500 or $600 or $700 
billion per ship.
    To use an analogy that the Secretary of Defense did the 
other day on a smaller aircraft, when it starts getting in the 
league, same price range as a DDG-51, and it is about one-fifth 
of the capability, then something is wrong.
    I am going to ask you for the record, what is your target 
price for the follow-on vessels in the LCS program starting 
with the seventh and the eighth?
    Secretary Stackley. Yes, sir.
    Now the 2010 budget is requesting the fifth, sixth----
    Mr. Taylor. I understand. Again, I realize this is going to 
continue to be a learning curve on the part of the 
manufacturer.
    So what is your target price since we have a goal of about 
50 of these vessels? What is your target price for the seventh 
and eighth?
    Secretary Stackley. Sir, let me describe two pieces. One is 
budget and the other is target price. Because the target price 
would be our contract price with the contractors for delivering 
the ship, and then beyond that we have additional budget 
requirements associated with government--associated with 
integrated logistic support.
    Mr. Taylor. I understand the additional packages.
    Secretary Stackley. Yes, sir.
    So we have taken the $460 million cost cap and we have used 
that, I will call it, as a ``forcing function'' in terms of 
driving to that number because that is not where we are today.
    So the numbers that you quoted, the 700 number, that would 
be a total budget number for the first two ships. We have come 
down measurably, going from the first two ships to three and 
four, and we look to make about equal strides in ships five, 
six and seven with the 2010. That means we have not hit 460 for 
total program, but we are targeting 460 or, as you describe it, 
a target price.
    Mr. Taylor. I was an early convert to Admiral Roughhead's 
decision to end the DDG-1000 program, go back to the 51s. I am 
in total agreement.
    Since that is apparently going to be our warship of choice 
for the foreseeable future, what steps are you taking for a 
multiyear procurement contract, again, to get the best 
economies that the Nation can get on this warship?
    Secretary Stackley. Yes, sir.
    If I could combine this with your opening statement with 
regards to the agreement with industry, what we are doing as a 
part of that agreement is, we have made the decision that we 
are going to restart at one location, at Northrup Grumman 
Ingall's operation. And by making that decision, we are 
coupling it with investments in terms of production planning 
and in terms of yard-wide improvements to facilitate not just 
restarting, not just building like they built the last DDG-51 
off the line, but let us look forward, at ways to significantly 
improve the way we bring this ship together in the long term--
get off to a good start--those two ships in the 2010 and, we 
project, 2011 budget request, if you will.
    And my target is to be able to move back into multiyear 
procurements in 2012 and out. That is a target; we have to work 
this through the 2011 process. We are going to have to be able 
to come back to you all to demonstrate that we are going to be 
able to achieve this significant savings.
    As well, we are going to have to put together an economic 
order quantity advanced procurement plan that would start with 
planning in 2011, as well, at the Bath Iron Works. They will 
get their first DDG-51, their equivalent of a restart, 2012, 
they would be competing with Northrup Grumman in a multiyear 
environment. That is my goal.
    Mr. Taylor. Thirdly, it has been my observation--and I will 
use the LCS program as the poster child program gone horribly 
wrong.
    For years, Mr. Bartlett, the previous chairman and ranking 
member, and I would get reports from captain or admiral, one 
after another, Everything is fine; it is all on time, it is on 
budget. And then within a week or two, the change to where the 
Democrats got control of Congress, another admiral comes into 
my office, and it is literally an ``awe-shucks'' moment, ``We 
have cut the main reduction gear backwards, everything is 
wrong, things really spun out of control on the program.''
    Part of that problem I think was that the officer in charge 
of the program, the baton would be passed to use a better 
analogy, about once a year. And every one of those officers 
left and said, Everything is fine.
    We can't afford mistakes like that anymore. As I spoke on 
the Electromagnetic Aircraft Launch System (EMALS) program, 
electromagnetic launch on the next carrier, if it fails--and I 
support your decision to go with it, but if it fails--and it is 
not a joke--we have taken what should have been a $7 billion 
aircraft carrier and we now have a $7 billion helicopter 
carrier. No one wants that to happen.
    It is my intention to recommend to the committee, as a part 
of our markup, to tell the Navy in our markup that you should 
appoint an officer who is going to be in charge of that program 
from today through the development of the prototype. Then tell 
the Navy that after that prototype is developed and accepted by 
the Navy, a second officer will be in charge of the development 
of the prototype to delivery of the vessel by the United States 
Navy in approximately five to seven years.
    What would be your reaction to that?
    Secretary Stackley. Let me describe that the program 
manager who is currently responsible for EMALS is top-notch. He 
is one of our superstars. And at this critical stage in the 
program, I have separately determined that he needs to stay 
until we complete system development demonstration.
    And so we are on that path. So what you are proposing is 
what we are doing.
    Mr. Taylor. What about for the second half?
    Secretary Stackley. Likewise, sir. We are looking at 
timing. We want to be able to bring on the relief for the 
current program manager and give him more than two weeks 
turnover, actually start to lay the groundwork, because his 
focus is going to be on transitioning from the design 
development to the ship installation and integration. And it is 
a little bit longer than a normal rotation, if you will.
    We are going to have to work that hard. But we see the 
value and the importance and the criticality.
    Mr. Taylor. Again, I am glad to hear we are in agreement.
    I think it makes perfect sense to put it in the law. Since 
people come and go, we need to see to it that the law remains 
steady and that the program is--again, that it is done right.
    I want you to know that I do support your decision to go to 
the EMALS. We want to make sure we get it right.
    Having said that, the Chair recognizes the gentleman from--
the Chair recognizes the gentleman from California, Mr. Hunter.
    Mr. Hunter. Thank you, Mr. Chairman.
    Secretary Stackley, General Dynamics-NASCO in San Diego, 
according to the Navy's view, is doing really well with their 
T-AKEs. The costs are going down, they are on schedule, and it 
is a pretty amazing job that they are doing.
    I know that funding for the last two planned ships in the 
dry cargo/ammunition ship (T-AKE) program, 13 and 14, are in 
this year's budget, and there is $120 million in advanced 
procurement funding and some R&D funding also requested towards 
the MLP, which represents a critical capability to the Marine 
Corps, and it is also NASCO's nearest-term ship they are going 
to be building after the T-AKEs.
    Secretary Gates announced last month that the procurement 
of the first mobile landing platform (MLP) ship was going to be 
deferred to 2011, as with the procurement of the eleventh 
amphibious transport dock (LPD-17) ship and the QDR, even 
though, from what understand from the Navy, they wanted the MLP 
funded in 2010.
    So the question is, do you agree that we need to do what we 
can to make sure that there is not a production gap between the 
T-AKE and the MLP, which there would be with only $120 million, 
from what I understand. That is not going to be enough to 
sustain the shipbuilder in between 2010 and when the MLP starts 
being produced; there is going to be a gap there.
    And to add on to that, too, with what is going on in the 
general economy, this is kind of just a broad question, I would 
think that the Navy and you especially, Mr. Secretary, would be 
more intent on letting the administration know what 
shipbuilding does for the local economies and where we are--it 
creates job, it helps out the economy in general.
    You hire American workers and make an American product and 
buy American steel; and I think that ties in with the entire 
state of the American economy. And if you lobby harder, maybe 
we might be able to get some of this stuff done. This creates 
jobs.
    Anyway, back to the MLP, please.
    Secretary Stackley. Yes, sir. Let me describe a couple of 
components there, first, T-AKE.
    The T-AKEs that are being requested in the 2010 budget, 
those were originally--in terms of the contract, there was a 
2010 option, a 2011 option, and then in terms of the budget, 
what we see is an opportunity to improve cost on those 
contracts by joint buying, buying two ships in the same year.
    So there is an economic decision, if you will. We are 
looking at savings of $170 million, the way we have programmed 
in the T-AKEs, two ships in the 2010 budget request. So that 
helps stabilize the shipyard. That helps stabilize the vendor 
base. And it also meets our Phase 1 Maritime Prepositioning 
Force (Future) (MPF(F)) requirement. So that is the logic and 
justification for bringing two T-AKEs into 2010.
    The MLP program, on the other hand, was originally intended 
to have been a competed program. And in fact, when we went 
through the competition process, we found ourselves quickly in 
a sole source, so we were able to improve on the schedule, if 
you will, to get to a contract, and our marching down the R&D 
line and the design development for MLP with NASCO in that 
sole-source environment. But we did not see a contract award 
prior to the fourth quarter of 2010 in that schedule.
    Mr. Hunter. What I am talking about is the R&D, the $120 
million that is being put out there now to keep them going for 
all their design change, reducing risk, trying to make--for 
once they are actually doing it right, where they are trying to 
get risks down, get everything done early, get engineering done 
early on, get everything designed so that when they actually 
start making it, there are not a bunch of changes along the way 
and then everything skyrockets like the LCS. They are actually 
doing it the right way.
    What I am saying is, there is not enough money in there in 
that 120 for them to sustain between the T-AKE and the MLP. 
There is a gap there that is going to end up costing them more 
down the line, costing the Navy more down the line, because 
they are going to have a gap in their shipbuilding.
    It is not an incredible amount of money that they will 
need. I am not sure what it is, but there is a gap there when 
it comes to what they are going to be getting between the T-AKE 
and the MLP.
    Secretary Stackley. Yes, sir, to try to tack on top of 
that:
    $120 million of R&D that goes to the shipbuilder, primarily 
to the shipbuilder, for his design and development for MLP, it 
also includes advance procurement to lead the ship 
construction. We did not see a ship construction contract, 
though, based on the design development schedule before the 
fourth quarter of 2010.
    There is a potential gap right now, looking at the workload 
at NASCO. We never like seeing a production gap at our 
shipyards. But given the choices between T-AKE and MLP--timing, 
potential savings--we believe the right answer is, put in 
advanced procurement to try to take care of the up-front 
activities so they can move quickly into a construction 
contract if, as a result of the QDR, we request an MLP in 2011; 
and we will be staged to minimize any potential gap between the 
T-AKE and the MLP.
    Mr. Hunter. Wasn't the MLP already slated for 2010, though? 
The MLP was originally asked for for 2010 by the Navy.
    Secretary Stackley. In the 2009 budget request, when you 
look in the 2010 column, you would see an MLP.
    Mr. Hunter. It was slated for then and it was pushed off to 
2011, so--okay, I understand what you are saying.
    I think you are making the wrong decision by leaving that 
gap there. If the Navy originally wanted it then, it is being 
pushed off and it is going to produce that gap. You could 
potentially see thousands of jobs lost, literally, and then you 
are also going to see production suffer in the future for the 
MLP based on that gap that exists between the T-AKE and the 
MLP.
    That is all I have, Mr. Chairman. I yield back.
    Mr. Taylor. The Chair thanks the gentleman from California.
    We now recognize the gentleman from Connecticut. Mr. 
Courtney.
    Mr. Courtney. Thank you, Mr. Chairman. I want to focus a 
minute on the Ohio research and development request.
    Again, in your opening remarks, Mr. Stackley, there was a 
comment that ``ship designs must be appreciably complete before 
the start of fabrication to avoid concurrency and rework,'' 
which Mr. Hunter referred to in his comments, is that trying to 
get the design done and finished so you don't have to change in 
midconstruction seems to be a new sort of mantra here.
    Given the fact that the Ohios are going to be coming off 
line, as the Admiral said, in 2027 and the construction is 
targeted for 2019, I mean, that is the point here, isn't it, to 
get the R&D and design work started so that we won't have that 
kind of difficulty?
    Secretary Stackley. Yes, sir. What is referred to as the 
sea-based strategic deterrent, which is the Ohio-class 
replacement boat, if you will, we are targeting 2019 
procurement; and the R&D receiving that procurement includes a 
request in 2010.
    That R&D targets a couple of things primarily. One is what 
is referred to as the common missile compartment. The U.S. and 
the U.K. are jointly developing a common missile compartment 
that will support both our requirements as well as the U.K.'s 
successor class, which will replace the Vanguard. This is 
rather unique that the U.K. is ahead of the United States in 
terms of its requirements because the successor class is due, 
basically initial operation--operational capability, in 2024. 
So they are three years ahead of us in terms of need.
    We are going to develop this jointly. So, in fact, our R&D 
is a bit ahead of historical R&D streams. So approximately 387 
million of our 495 request goes towards that joint development 
with the U.K., the balance of the request going to the front 
end of design and feasibility studies for a new reactor plant 
design for this new boat.
    Mr. Courtney. Just one question--the SSGNs are going to 
start coming off line probably pretty soon after the Ohio. And 
I guess the question--if we are going to invest in this early 
research and development, then we have got SSGN sort of right 
next in line in terms of coming off use.
    Should we maybe be focusing a little broader than just the 
SSBN in terms of R&D or--I don't know if you have any comment 
on that.
    Admiral McCullough. Sir, what I would say about that is, 
you know, we just completed the first deployment with Ohio; and 
initial indications are, that submarine did exceptionally well 
in performing its missions and what it was tasked to do. We are 
still trying to get our arms around what a follow-on strategy 
for SSGN and what the operational requirements would be.
    Now, that said, as we go forward with an Ohio replacement, 
we need to look at what else we could potentially use that 
submarine for and what it could be adapted to, to go into an 
SSGN replacement. But at the same time, we have to be very 
conscious of what the potential cost of that submarine will be. 
And if you just did the inflation from an Ohio, it would be a 
substantial piece of our shipbuilding budget if you just 
inflated the cost of the original Ohio boat into the 2015 time 
frame.
    So there will be a nuclear posture review, and I know there 
is a lot of discussion about that. But I can't see any decrease 
in requirement for the sea-based part of the strategic triad. 
You might see some reduction in the number of tubes required, 
but I don't see a reduction in that requirement.
    And so we have to look at both what we see coming out of 
the SSGNs as operational capability and how we want to go to 
backfill that capability in the future and to contain the cost 
on a replacement ballistic missile submarine, sir.
    Mr. Courtney. Thank you, Mr. Chairman.
    Mr. Taylor. The Chair thanks the gentleman. The Chair now 
recognizes the gentleman from Colorado, Mr. Coffman.
    Mr. Coffman. Thank you, Mr. Chairman.
    Mr. Secretary, one question about the--given the current 
situation the economy is in, it seems that commodity prices 
have dropped, labor prices have dropped. In terms of 
acquisition, how have we benefited from that in terms of 
reductions in cost?
    Secretary Stackley. Let me describe a couple of things. You 
said commodity and labor. In fact, we are not seeing a 
reduction in labor costs. And I will come back to that.
    Commodities--commodities have come down significantly when 
you look at where they were one to two years ago, versus where 
they are today. Now, commodities in terms of shipbuilding, as 
an example, represent a small percentage of the total cost of 
the ship. So whether you are talking steel, pipe, cable, you 
are in the less than five percent total cost for the ship, for 
the raw material. So we are going after those benefits, but 
they aren't appreciably changing the cost of the ships.
    On the labor side, it is a more complex equation. When we 
look at labor and labor rates, they are affected by several 
factors. One is the direct wage that you pay to the worker, and 
that direct wage goes up with the cost of living or labor union 
agreements that are contracts between the shipyards and the 
labor unions. Those have been going up at a steady, predictable 
rate, and so in fact what we have with the shipyards are what 
are called forward pricing rate agreements that account for 
that.
    The second major component associated with those rates is 
the overhead and indirects. Overhead is associated with the 
facilities' costs that the shipyard is operating. So they have 
a cost that comes back in their pricing for such factors as 
appreciation or capital expenses that get spread out over the 
term of the equipment; and then you have the indirect costs 
which would include such things as insurance, health insurance, 
a number of those factors that again are not coming down. Those 
are going up.
    So when I look at the categories that you just described, 
commodities, we are going after it; it is not having the big 
bang because commodities don't represent a large percentage of 
the cost. And then rates, we don't have much influence--I am 
going to say, frankly, we don't have influence on the direct 
wages that are going to the workers or some of the indirects.
    But what we do have the ability to go after are the 
overheads. So I have spent time with the CEOs of our shipyards, 
attacking that issue. Much of our overhead was sized for larger 
throughput than what we have got today, okay? Some of these 
facilities, going back to the buildup of the 1980s, some of 
them have been drawn down over time. So many of them have 
recapitalized.
    What we have to do is ensure that the shipyards that are 
building our ships are the right size for the production we 
have got going through them to bring that overhead down. It 
doesn't happen quickly. So we have to work closely with those 
shipyards to be able to drive that overhead rate down.
    The piece you didn't talk about, when you mentioned 
commodities and rates, was the rest of the material costs, in 
this case, for ships. And that is where you start to get into 
equipments, components, hardware. That is not coming down with 
the price of commodities because that, in fact, brings a lot of 
touch labor to it and it is typically highly skilled touch 
labor when you talk about whether it is gas turbine engine or 
whether it is a common equipment enclosure for electronics. In 
that case, what we have to look at is--commonality as an 
example, where we try to drive common equipments, yet the 
benefit of economic order quantities to get at that material 
cost.
    So we are tackling the equipments; commodities, we don't 
have the bang for the buck that we--you might look to see based 
on what is happening with economic rates; and we are going 
after overheads.
    Mr. Coffman. It seems like what you mentioned earlier was a 
lack of competition. It seems like that is a factor in the fact 
that we haven't been rightsizing in terms of capacity.
    Secretary Stackley. There are certain cases where you don't 
have competition. And so we have to work--we have to use other 
methods to attack some of the cost structure in the 
noncompetitive environment. But even in those cases, you go 
after the material underneath of the prime, if you will.
    So if you have a shipyard that is the only shipyard 
building that type of ship, you have to go after the whole cost 
structure, which includes everything that he buys and drive 
competition down throughout the program. Where we do have 
competition has proved to be extremely effective in motivating 
a focus on cost performance.
    Mr. Coffman. Mr. Chairman, I yield back the balance of my 
time.
    Mr. Taylor. The Chair thanks the gentleman.
    The Chair now recognizes the gentleman from New York, 
Captain Massa.
    Mr. Massa. Thank you, Mr. Chair. And I have no questions at 
this time.
    Mr. Taylor. The Chair then recognizes Ms. Pingree.
    Ms. Pingree. Thank you, Mr. Chair.
    Mr. Taylor. The gentlelady from Maine.
    Ms. Pingree. Well, thank you very much. I appreciate both 
your service and your testimony this morning. And as you 
probably know, I am one of the newer members of this committee, 
just elected in November. But I represent the First 
Congressional District of Maine. So Bath Iron Works is in my 
district, and we are very proud of the work they do and their 
ability to work with you.
    Honestly, much of what I am concerned about, of course, is 
the size of the future Navy. Some of these questions have 
already been posed to you and I appreciate your answers. I know 
that much of this won't come up until the Quadrennial Review, 
but we are very anxious, of course, to make sure that the 
industrial capacity not only for my district, but just 
generally in the shipbuilding industry continues to grow, that 
we have the competition in the business, but also we have the 
business going on in building ships. For us, the opportunity to 
continue to build ships is important.
    The plan right now clearly works well for us to build the 
DDG-1000s and to be in line to go back to building the DDG-51s.
    Ms. Pingree. But I just want to hear you talk a little bit 
more about that from our perspective. I know that we had 
Admiral Roughead visit our district recently to launch our most 
recent ship and talked about the capacity of Bath Iron Works 
(BIW) and the quality of our work. And, frankly, I just want to 
hear you say it again and say that this is important to us, 
that industrial capacity is important, that we will be hearing 
more, as has been asked today and was asked previously in our 
hearing yesterday, about, you know, continuing to build ships 
and the importance of shipyards and not losing that capacity as 
we see our work force being downsized and some of the issues 
that have gone on in the past which I think is bad for national 
security, bad for the manufacturing capacity of this country, 
and worrisome about the future.
    Secretary Stackley. Yes, ma'am.
    Let me first say that I was at that christening with 
Admiral Roughead, and I was able in my remarks to bring back to 
everybody the statement that Bath built is best built. It is 
not just a logo.
    Ms. Pingree. That is our favorite statement.
    Secretary Stackley. It is tattooed in the hearts and minds 
of every worker up there, and I say that with all sincerity.
    A couple of quick comments. We just talked about 
competition and how important competition is. When we look at 
surface combatants, Bath Iron Works and Northrop Grumman have 
been our surface combatant builders for my life, and what we 
see is we see a very robust competition between the two, not 
just in terms of costs but in terms of innovation. And when I 
look at the land level facility at Bath Iron Works and the 
investment that really turned the corner in terms of their 
performance, that was driven by competition. And so when we 
look forward to future construction of surface combatants, I 
look forward to continued competition.
    The chairman made reference to the agreement between the 
Navy, Northrop Grumman, and Bath Iron Works. An important part 
of that agreement which builds the three DDG-1000s at BIW is 
the stability that it brings to that shipyard. We are able to 
address what was a concern associated with future workload and, 
at the same time, take advantage of three ships, one learning 
curve, one shipyard, which is good for the Navy, good for the 
Nation, and just happens to be good for Bath Iron Works.
    Admiral McCullough. And if I could, ma'am, let there be no 
confusion that the Chief of Naval Operations (CNO) stated in 
his testimony and I will state it here, the minimum number of 
ships to execute the maritime strategy--global maritime 
strategy for the 21st century is 313. We have said that 
repeatedly. CNO stands by that, I stand by that, and that is 
what we need. And so that is a minimum of 313 ships.
    Ms. Pingree. Well, thank you for your thoughts. And, again, 
that has been brought up several times since I have been on 
this committee, this concern that while there is a commitment 
to increasing the size of the ships, and 313 is the number, the 
current plan does not look like we are going to get there. So I 
know there is a lot of talk about that being in the Quadrennial 
Review. I just want to say that I am anxious to see that and 
make sure that we do continue to reinforce that capacity.
    And just to add a note, I am glad you brought up the land 
level facility; and I think that is another important factor 
about Bath Iron Works. I served in the State legislature at the 
time when the State made that commitment. The State of Maine 
helped to build that part of the facility to modernize it, and 
so this is a commitment that not only is part of the companies 
that work there and the workers that work there but our State, 
too. We clearly recognize this is important to us and to the 
industrial capacity of our Nation and to the future of the Navy 
and so appreciate this partnership and look forward to it 
continuing.
    Secretary Stackley. Let me go a little bit out of bounds 
here and talk a little bit further on that. Because that land 
level facility represents a couple of things. It was the result 
of competition. Basically, General Dynamics (GD) Bath Iron 
Works knew that they had to do something different or they 
weren't staying in the game.
    But it was also the result of stability and a multi-year 
procurement that gave them the ability to commit the investment 
to the facility where they knew that they would get the return 
on investment. So we have competition, stability, and a solid 
acquisition approach that resulted in driving down the cost, as 
well as delivering to the Navy what it needed in terms of ships 
on schedule and on budget.
    Ms. Pingree. Well, thank you. It seems to have been a 
successful plan, and I can guarantee you we are committed in 
our State to continuing to be innovative and bring down costs 
and deliver best-built ships on time. So thank you.
    Mr. Taylor. The Chair thanks the gentlewoman from Maine.
    The Chair now recognizes the gentleman from Virginia, Mr. 
Wittman.
    Mr. Wittman. Thank you, Mr. Chairman.
    Secretary Stackley, Admiral McCullough, thank you for 
joining us today and thank you for your service to our Nation.
    Admiral McCullough, I will begin with you. The other day 
when Admiral Mullen came to testify before us concerning the 
authorization process, one of the questions I asked him was 
concerning a proposal to go from 11 carriers down to 10 
carriers; and I have a couple of questions along those lines 
for you.
    Is it the Navy's intention to ask for a change in the law 
which presently requires 11 carriers, or a waiver? And, if so, 
it looks like that drop from 11 to 10 would take place, 
according to Admiral Mullen, in the years 2014 and 2015 for 
about a 24-month period. Can you tell me if you believe that 
that is going to have a strategic impact on this Nation's naval 
capabilities? And, if so, what are the contingencies that you 
would put in place to make sure that there is not a drop or a 
gap in the strategic capability of this Nation?
    Admiral McCullough. Yes, sir. Thanks for the question.
    First of all, what we need to do is take Enterprise out of 
service on time; and she is supposed to go out of service in 
November of 2012. That carrier will be about 47 years old. As 
you well know, it is an eight reactor ship, one of a kind. It 
was our Nation's ability to try to put nuclear power to sea in 
an aircraft carrier that drove the design and construction of 
Enterprise, and it was very successful, and it has served in 
everything from the Cuban missile crisis to recently in the 
Arabian Sea and the Arabian Gulf.
    The ship needs to be retired on schedule. So the waiver we 
request is to be able to decommission Enterprise and inactivate 
Enterprise in November, 2012.
    Now, that will lead us to a 10 carrier level until the 
delivery of the Ford, CVN-78, which is scheduled for September, 
2015. So the question, can we mitigate our operational 
availability of the Nation's aircraft carriers during that 
period? Yes, sir, we can.
    We have moved some availabilities forward, PIAs for the 
aircraft carriers maintenance availabilities, and we have moved 
some to the right in order to produce that operational 
availability to meet the commitment of the Navy to the Nation 
during that time frame.
    I would also tell you that if we don't take Enterprise out 
and the direction is to keep her in service and we have to put 
her in the dock to do the maintenance required to continue that 
ship in service beyond 2012, it significantly disrupts the 
refueling schedules for the remaining Nimitz-class carriers. 
The one immediately impacted in that time frame is Abraham 
Lincoln, CVN-72. When Lincoln comes home from her last 
deployment prior to her currently scheduled refueling 
availability, she is out of gas, if you will. So if we put 
Enterprise in the dock to do the maintenance availability on 
her to get her beyond 2012, not only do you have that aircraft 
carrier out of service, you can't get any more operational 
availability out of Nimitz or out of Lincoln because she is out 
of fuel. And then each subsequent refueling would be delayed.
    Now, there is a compounding factor associated with that. 
Because now you have to retain Enterprise after she comes home 
from a deployment, after the maintenance availability. So if 
she went into that maintenance availability in 2012, she got 
one deployment's worth of fuel left in her. So if she deploys, 
she comes home, now, because we have delayed the refueling 
availabilities of Lincoln and beyond, we have no place to fit 
her in to do her inactivation availability.
    It is a nuclear powered warship. You can't lay it up and 
put a very reduced crew on it. You have to keep the crew on it 
to maintain the propulsion plant.
    So now we have got this carrier set aside with no 
operational availability out of it, maintaining a crew of 
around 2,000 people on it, which have to be there and can't 
contribute to the Navy elsewhere. And we looked at taking those 
people out and putting them on the follow-on ship. So the 
answer is we need legislative relief to take Enterprise out of 
service on time, and we can mitigate the operational 
availability.
    Mr. Wittman. Would that legislative relief be in the form 
of a waiver or a request to change the law?
    Admiral McCullough. I think it is in the form of a waiver, 
was what the legislative proposal was. I will get back to you 
on that for sure. I don't want to sit here and sort of give you 
a half answer.
    [The information referred to is retained in the committee 
files and can be viewed upon request.]
    Admiral McCullough. But the Nation, as I said in my opening 
statement, is committed to--or the Navy is committed to 11 
aircraft carriers for the next three decades; and Secretary 
Gates was clear on that when he talked about moving the build 
cycle to five-year centers.
    Mr. Wittman. Thank you, Mr. Chairman.
    Mr. Taylor. The Chair thanks the gentleman for a great 
question and wants to compliment the Admiral on an excellent 
answer. I appreciate, for the sake of the committee, you 
walking us through that.
    The Chair now recognizes the gentleman from Indiana, Mr. 
Ellsworth.
    Mr. Ellsworth. Thank you, Mr. Chairman; and I apologize for 
being late. If these questions were already answered, I 
apologize to you all.
    I was in a meeting--I heard Secretary Stackley say our 
favorite saying. I was in a meeting with the President about 
three weeks ago, and he said that at some point we have to 
start making decisions on national defense based on national 
defense. I hope that is up there in the top of our favorite 
sayings, also, because I think that is very true.
    I want to ask three questions, hopefully from the short 
answer up to the longer answer.
    My first question is when we plan to announce the 
propulsion system for our cruisers. If you will think about 
that one, if you can give me an answer on that.
    The second, I would like your thoughts and plans on spare 
long-lead reactor parts, addressing that issue.
    And, thirdly, and what might take the longer answer, is 
that Secretary Gates announced in April about going to the 
five-year building procurement on the carrier. I would like the 
justification and logic on that and what that might do to the 
price of these carriers.
    And if you can get all three of those in my five minutes, I 
would appreciate it, if possible.
    Secretary Stackley. Okay. Let me start with the question 
regarding the propulsion system for the cruiser.
    The cruiser, as Admiral McCullough alluded to earlier, is 
outside of the Fiscal Year Defense Plan (FYDP), and I don't 
want to try to pin down a date right now. Let me simply state 
it is outside of the FYDP.
    What we are doing in terms of preparing for the cruiser is 
identifying what the capabilities are that are required to not 
just meet the mission but we are also projecting the threat, if 
you will. So the immediate work that is going on, that is 
follow-up to the analysis of alternatives that was done about a 
year ago that is continuing to be reviewed is to identify the 
capabilities and the system and technology developments that 
are needed for that cruiser. That will inform what the 
requirements are, the larger hull, mechanical and electrical 
requirements are for the ship in terms of electrical power 
propulsion, size, displacement, et cetera.
    With that information, then you start to get into the 
design cycle for the propulsion plant or the integrated 
propulsion plant, which would also bring your power systems. So 
we don't have sufficient fidelity for those requirements to 
start serious analysis, if you will, for the propulsion plant. 
Absent that, what we are doing is feasibility studies.
    So we are quite mindful of the NDA requirement that a 
future cruiser would be nuclear powered. We have to have 
greater fidelity in terms of what size, shape, what it is going 
to look like, what it is going to operate to be able to come 
back to the committee and provide any specifics regarding our 
analysis.
    So in terms of our feasibility, what we are doing is taking 
existing propulsion plants, CVN-78 design, and scaling, if you 
will, what would half of a CVN-78 propulsion plant mean in 
terms of size of ship required, if you will, to drive that 
around, and do we have a match or do we have a mismatch with 
the systems and capabilities required for the future cruiser to 
meet its requirements against the future threat.
    The second question regarding spare long-lead reactor 
plants parts, we do have a very unique and somewhat fragile 
industrial base associated with U.S. Navy reactor plants. And 
so we are very mindful, very careful to try to avoid peaks and 
valleys regarding workload associated with, whether it is 
carriers or submarines, and we used advanced procurement, if 
you will, to try to help smooth out the workload there. So 
regarding long lead, I think we have a very healthy long-lead 
advanced procurement plan for our nuclear powered ships.
    Regarding spare reactor plant parts, I would have to get 
back to you on that. I don't know that we are not properly 
spared in that case.
    [The information referred to is retained in the committee 
files and can be viewed upon request.]
    Mr. Ellsworth. And, thirdly, just the justification logic 
for the four- to five-year announcement on the carrier 
procurement, what that is going to do, add to the cost, take 
away from the cost, how that works into the goal of the 313 
ships.
    Secretary Stackley. I think the justification is more of a 
requirements issue.
    I will just quickly touch on the cost considerations. When 
we look at Newport News and its workload for what was to be a 
2012 carrier and is now projecting to be a 2013 carrier, at 
that same point in time we will have a Refueling and Complex 
Overhaul (RCOH) ongoing at Newport News, and we are into the 
two-boat-per-year phase for the Virginia class. So there is, in 
fact, a lot of activity, a lot of work going into Newport News 
in that period of time.
    The impact on costs would be, as I was discussing earlier, 
the effect on overheads associated with pulling the work to the 
right as well as the effect associated with inflation when you 
delay procurements an additional year. So we use advance 
procurement. We have an opportunity to use advance procurement 
to offset some of those escalation impacts, and we are going to 
work around the work going on in the shipyard at the time, 
completion of CVN-78, ramping up to two submarines per year on 
the Virginia class and the RCOH to try to minimize the cost 
impacts. And I am not at this point able to give you a good 
assessment of that because we are still going through all the 
puts and takes, and it will be significantly impacted by the 
lead stream that we put into the CVN-79.
    Mr. Ellsworth. Thank you.
    I yield back, Mr. Chairman.
    Mr. Taylor. The Chair thanks the gentleman.
    Secretary Stackley, I think you are hearing a lot of 
interest on the parts of the members of this committee, a lot 
of concern about the industrial base. And I think you are 
hearing a willingness on the part of this subcommittee to make 
investments in our yards if we can turn around and tell the 
American people that, by making taxpayer investments in these 
yards, we are getting a better ship, quicker, greater 
capability and, above all, a better price for the taxpayer at 
the end of the day. I was curious what type of initiatives that 
you have in mind that we could help you with legislatively 
towards that end.
    Secretary Stackley. Yes, sir.
    Let me first walk through the way we incentivize 
investments today. I gave a generic discussion on competition. 
Competition basically drives shipyards to figure out how to get 
costs out, which means investing in facilities to improve their 
performance. Ship construction is labor intensive and it is 
capital intensive, so what that means is heavy front end load 
in terms of facilities tooling machinery that gets written off 
over time on ship construction contracts.
    So what we do there is we do a couple of things. They have 
the ability to depreciate on their contracts, their 
investments. As well, we provide what is called a facilities 
cost capital of money. If they tie money up into facilities, we 
allow that to come back on the contracts. We replace the 
equivalent earnings of that money that got tied up into 
facilities.
    And then, going beyond that, what we have done is we have 
opened up what we refer to as capital expenditure incentives, 
where we put incentives in the programs where the shipyard 
identifies a return on investment. We pay the front end in an 
incentive. When he demonstrates a return on investment, then we 
pay the back end in terms of incentives.
    Mr. Taylor. If I may, Mr. Secretary, I appreciate 
everything you said. But since most of our shipyards operate on 
basically a cost plus basis, what incentive do they have to 
identify that saving?
    I am going to disagree. I think it is our job as a Nation 
to identify those things and point it out to the shipyard, 
rather than the other way around.
    Secretary Stackley. Yes, sir.
    Mr. Taylor. That is what purchasing agents do for a 
company.
    Secretary Stackley. Yes, sir. Let me try to--let me clarify 
in terms of most of our shipyards working on a cost plus. I 
think what we have is most of our ship construction contracts 
right now are fixed-price type contracts. But we buy ships one 
year at a time. So when a shipyard is trying to make or a 
corporation is trying to decide whether or not to make a 
significant capital investment to reduce its costs, even if it 
is a fixed-price type contract, it has to be able to convince 
itself that it will get the return on investment not just this 
year but guessing what will happen in the outyears.
    So in terms of the government as the customer, as the 
buyer, what we have to do is work with industry to try to 
either offset the risks associated with an investment up front 
with nothing on the back end to justify it, and we try to do 
that through--some through incentives, some through the way we 
buy our ships. And, frankly, we struggle to get to the things 
like multi-year procurements where, when you are laying a 
multi-year, you are laying in potentially five years' worth of 
known quantity of work, and that will drive him to invest on 
the front end to get the return over the five years. Those are 
the tools that we have in hand today.
    We have chartered a separate group to do an independent 
assessment regarding investments, costs and investments in our 
shipyards. And the facts come to bear that there are 
investments pretty much across the board where there is either 
a healthy front-end stable workload or competition to drive the 
investments.
    What we don't have is a tool where we would go in and pay 
direct for a shipyard to upgrade its facilities. That starts to 
go down a path where, when you look at the industrial base, how 
would you meter that out? How would you decide where the 
government makes its investments, where the government will get 
the return on investments across the broad industry? It is a 
challenge.
    Mr. Taylor. It is a challenge, Mr. Secretary, but I think 
it is your job to do that, quite honestly. And I don't say this 
happily, but we are in a situation where our six major 
shipyards have one customer, that is the United States 
Government. Whether it is the United States Navy, the United 
States Coast Guard, they have got one customer. And as that 
customer, I think, and with the responsibility of 300 million 
people to defend them but at a price that is reasonable, I 
cannot encourage you enough to take those steps to identify 
those procedures, come to this committee with your 
recommendations, and then put the responsibility on us to make 
a pitch to the rest of the Congress to make those things 
happen. I think you are the man to do that, and I hope you will 
do that.
    Secretary Stackley. Sir, I will take it for action.
    Mr. Taylor. Thank you.
    Going back to Mr. Ellsworth's questions, it is the 
committee's decision to try to work with the Navy on the LCS 
program. I believe the committee is in agreement with the CNO 
as far as the DDG-51.
    The fact of the matter is they are both extremely capable 
warships, but they are both gas guzzlers. Last summer, when 
gasoline prices were $4 a gallon, that committee responded by 
saying that the next generation of amphibious assaults ships 
would be nuclear powered. The year before that, when gasoline 
was about $3 a gallon, this committee decided that the next 
generation of cruisers would be nuclear powered. I am of the 
opinion that gasoline is temporarily down. I am of the opinion 
that when the world economy recovers that price is going to go 
back up and that I am told that the next--that a typical 
cruiser uses about 10 million gallons of fuel per ship per 
year.
    So since I believe it is inevitable that the price is going 
up, that it is a military vulnerability to have warships that 
need to be refueled every three to five days, and that you can 
remove that vulnerability with a nuclear powered ship, I must 
express my disappointment in the Navy's decision to delay the 
building of the CGX.
    I would also like to hear your thoughts on what steps you 
are taking when we build the nuclear powered cruiser to use the 
common propulsion plant that is going into the Ford carrier, 
the A1B, in order to not only get some economies of scale on 
the manufacturing side but also get economies of scale within 
the Navy on your training.
    Secretary Stackley. Yes, sir.
    Let me start with the last question there. The Ford-class 
propulsion plant, as I was discussing earlier, the CGX research 
and development (R&D) funding that we do have, the piece of 
that that is associated with the propulsion plant is doing 
feasibility studies taking exactly a look at the Ford plant, 
scaling it in half and trying to come to grips with what that 
means in terms of a total ship.
    We don't design a ship around a propulsion plant, but the 
propulsion plant will start to put some limitations, if you 
will, on the ship design. So we have got a known configuration. 
We are figuring out what does it mean to scale it in half and 
then what does that mean in terms of driving, length, beam 
displacement for our cruiser. While, separately, we are 
attacking the issue associated with technology and systems 
development and design to meet the requirement, the capability 
warfighting requirement for that cruiser.
    Mr. Taylor. Mr. Secretary, what is the Navy's reluctance to 
just go ahead and make that decision to say it is going to be 
an A1B, and, yes, we are going to build a ship around this 
power plant?
    Secretary Stackley. Well, you start with the requirements.
    Mr. Taylor. Going back to your earlier comments about the 
problem of having at one point, I think, 12 different ships 
under construction and all the issue of costs that went that. 
If you have got a power plant that you believe works, if we all 
know the economies of scale and that there are huge benefits to 
sticking with something that you know works, I would like you 
to walk the committee through why you are reluctant not just to 
say that is going to be the power plant.
    Secretary Stackley. Yes, sir.
    Let me--I will start by offering follow up in terms of a 
classified briefing. But in an unclassified setting let me walk 
through--and Admiral McCullough might jump in here as well--
where we are in terms of the analysis of alternatives (AOA) for 
the CGX.
    The AOA was conducted a year plus ago, and there were two 
parts to the AOA, one part associated with the capability that 
is required to meet the mission, to defeat the threat, and the 
other part of the AOA was the platform that would carry the 
capability.
    A couple of significant issues emerge. First and foremost 
is cost and size of the systems that are required for that 
mission. So that informs a decision that the CGX needs to move 
outside of the Future Years Defense Plan (FYDP). We can't get 
there from here in the time where the CGX was showing up in the 
budget. So the platform moves outside of the FYDP while we look 
forward at not just looking at the technology but how do we 
best go after this threat. Because we cannot get there based on 
the costs that emerged from the AOA. We have to look at other 
alternatives.
    So the nuclear power plant piece of that discussion is 
really tied to the platform piece, while we tackle the more 
difficult issue of how do we get the threat, what technologies 
do we need. And it goes beyond a single platform. It goes 
beyond a CGX discussion.
    Admiral McCullough. The reason--one of the reasons for the 
slip at a cruiser, Mr. Chairman, was how much radar do we need 
in a ship. And some of this I will have to take off line with 
you.
    But if you look at not only ship-based sensors but land-
based sensors and overhead sensors and put them together in the 
right network, what size capability or sensitivity radar do you 
need to put on a ship? And as we worked through that, we saw no 
clear path to get to the capability we needed in the sensor for 
the ship that would get that ship built inside the Future Years 
Defense Plan (FYDP). So what pushed the ship outside the FYDP 
was no debate over the engineering plant. It was what size and 
sensitivity sensor do we need and what can we rely on from 
other sensors to mitigate the size of the one we would have to 
put on the ship.
    And, as Mr. Stackley has said, the plant--when we looked at 
nuclear power plant options, the plant that would go in that 
ship is a variant of the A1B power plant because we have that 
designed and we would not want to commit a vast amount of money 
to redesigning another power plant to put inside the ship.
    But what we really don't know is, because we haven't yet 
defined the sensor, we don't know what the electric generation 
capacity is that will be needed to drive the combat system in 
that ship. And until we can bring all the pieces of the puzzle 
together, we don't know what the length beam and the 
displacement of the ship will be and what the power density 
requirements to drive that combat system and to propel the ship 
through the water will be. And so we are working our way 
through that.
    If you look at the tankage required for extremely high-
powered radar in a fossil-fueled ship, you also have to look at 
what the rotation rate would be from that ship being on station 
and have to go alongside in order to refuel. And so what is the 
true operational availability of the platform, because you are 
going to have to take it off line to refuel it.
    And so, the cost of fuel aside, it gets down to really what 
the power density requirements are. We just haven't sorted that 
out yet, and we are working hard to get through it. So that is 
where we are, sir.
    Mr. Taylor. The gentleman from Colorado, Mr. Coffman.
    Mr. Coffman. Thank you, Mr. Chairman.
    Just one question in general, because I think the chairman 
has raised a very critical point in terms of the logistical 
complexity as well as the long-term cost of relying upon 
conventional fuels. Is it that in the short run that the 
capital cost of a nuclear power plant is more expensive than a 
conventional power plant? In addition to the issues that you 
have raised?
    Admiral McCullough. That is something we consider, sir. 
But, in the end, you have to look at the total ownership cost 
of the ship or the life-cycle cost of shipment. And when you 
make an up-front investment in a nuclear propulsion plant it 
will add acquisition cost to the ship. But then as you look at 
the projected cost of fuel over the life of that ship and if we 
are going to build a ship that we are looking at--we are 
looking at a 50-year service life on this ship, similar to an 
aircraft carrier. What would be the life-cycle cost to operate 
that ship using fossil fuel?
    So we don't just look at it from an up-front acquisition 
cost. I mean, obviously, that is an input, but we try to look 
at it from a total ownership cost. And that easily mitigates 
the up-front cost of nuclear power if you look at what we think 
the ship would require, if it requires the high-end radar.
    Secretary Stackley. One of the CNO's priorities is fuel. If 
you look at the rate at which we consume fuel, it is both 
logistics and it is cost. And so, across the board, Navy 
systems platforms, we are attacking our fuel consumption rates. 
So we are looking--you look at aircraft, you look at ships, you 
look at ground vehicles. We are trying to figure out how to get 
a better handle on the rate at which we are consuming fuel.
    Admiral McCullough. And to add on to that, we are looking 
at alternative fuels, not just fossil-based fuels. And we would 
like to get to what we call the Green Hornet sometime in the 
near term that runs off a non-petroleum-based fuel.
    Mr. Taylor. The Chair recognizes the gentleman from 
Virginia, Mr. Wittman.
    Mr. Wittman. Thank you, Mr. Chairman.
    Admiral McCullough, I go back on another issue concerning 
our carriers. And I know that--I appreciate the Navy's 
willingness in the decision making process for home porting, to 
make that decision through the Quadrennial Defense Review (QDR) 
process. I do, though, have a couple of questions that do seem 
to create some contradictions; and I would like for you to just 
elaborate a little bit on that.
    I see in the Navy's justification book it clearly indicates 
that future projects at Mayport would include a controlled 
industrial facility, ship maintenance support facilities, and 
other construction projects that would be necessary only if a 
carrier were home ported there in Mayport. So I wanted you to 
maybe explain to me. Is there maybe a disconnect there or an 
updating that is needed in the justification book between the 
budget planning process and the decision deferral?
    And then also the request for $76 million for dredging and 
dockside improvements there at Mayport that, again, you would 
question, knowing that there are other ports in the Nation 
where they could accommodate a nuclear carrier on an emergency 
basis. And certainly that $76 million might lead you to believe 
that there is the beginning of an effort there to create a 
permanent home porting facility there in Mayport.
    So I was wondering if you couldn't comment on those.
    Admiral McCullough. Yes, sir. Thank you.
    As we look at carrier facilities on the east and west 
coast, there are three bases, if you will, on the west coast 
that can accommodate a nuclear powered aircraft carrier in the 
Nimitz class. On the east coast, we currently have one; and 
that is Norfolk. So we believe that it is in the Nation's best 
interests to have an alternate carrier facility on the east 
coast to include both the ability to berth the aircraft carrier 
there and to service it as required if something would preclude 
getting in and out of Norfolk.
    Sir, as you well know, the carriers won't fit through the 
Panama Canal. So if something happened and we couldn't get a 
carrier in or out of Norfolk for some period of time and the 
ship was coming home from deployment and required service, 
based on the current distribution of bases, we would have to 
send it around South America to get it to a west coast 
facility.
    So we believe it is in the Nation's interest to have an 
alternate capability on the East Coast; and we believe the 
easiest place to do that is in Mayport, where the Navy has had 
aircraft carriers based since I believe about 1952 until the 
Kennedy was decommissioned. To get that ship in that turning 
basin with adequate bottom clearance requires dredging even to 
tie that ship up in Mayport. And that is what is in the budget 
request today.
    The pier work in Mayport is not particularly associated 
with--that is in the budget this year. The budget request this 
year is not associated with an alternate carrier facility. That 
amount of money was in the budget for other pier work in 
Mayport to support the ships that are currently there.
    As we looked at the requirement for Mayport, as you 
suggest, if we are going to truly have an alternate carrier 
facility on the east coast, you would need the ship's 
maintenance facility and the consolidated industrial facility 
to support the nuclear work. We would additionally need to do 
further upgrades to the wharf in Mayport.
    So, given we are going to look at carrier basing and global 
force dispersal, or deployment, rather, in the QDR, we think it 
is in the Nation's and the Navy's best interest to proceed with 
the dredging project, to at least have an adequate facility to 
berth a carrier in Mayport, should we need to do that.
    I know there are other ports on the East Coast that various 
folks think you could put an aircraft carrier in; and I have 
heard mention of Charleston, South Carolina, and Baltimore. The 
sea detail going in and out of Charleston in the Cooper River, 
with the flow and shape of the Cooper River, is difficult for 
attack submarine and cruiser destroyer type ships. Having 
served on Enterprise for 26 months and been the commander of 
two carrier strike groups, I would not want to have to live 
through that sea detail on a nuclear powered aircraft carrier.
    I have also heard of Baltimore. And while the Baltimore 
ship channel going up the Bay I believe is dredged to a depth 
of 50 feet, having taken a DDG 10,000-ton destroyer to 
Annapolis, I, again, would not wish that sea detail on anybody 
to put a nuclear powered--or try to get a nuclear powered 
aircraft carrier into Baltimore.
    So, given all those factors, the Navy came to the 
conclusion that Mayport is probably the best alternative for an 
additional carrier facility on the East Coast.
    Mr. Wittman. Just as a follow-up on that then, it sounds 
like then from what you are telling me is that the Navy has 
pretty much got their mind made up prior to going into the QDR 
that Mayport's going to be the place and that we are 
essentially ramping up for that by the first phase with this 
$76 million improvement there.
    Admiral McCullough. I would say we need the capability. I 
think the dredging is the first start. But the Navy and the 
Defense Department believe that needs to be looked at in the 
QDR. And while I have some ideas what the projects proposed in 
Mayport are, if the QDR decides that that is not the 
appropriate place to put the aircraft carrier, then we will 
revisit the whole issue.
    Mr. Wittman. Thank you, Mr. Chairman.
    Mr. Taylor. The Chair recognizes the gentlewoman from 
Maine, Ms. Pingree.
    Ms. Pingree. Thank you very much.
    I hadn't really intended to ask you about this, but since I 
have this opportunity and a chance to ask another question, not 
only do I have BIW in my district but I have the Kittery 
Portsmouth Naval Shipyard where we recondition submarines. I 
have only had one opportunity to visit there, but it seemed 
like there was a tremendous amount of work going on and the 
need for a fair amount of construction to handle the capacity. 
It looked to me like there was more work than they could handle 
in spite of the excellent workforce, and I know they are hiring 
more and doing more. But I didn't know if you wanted to just 
talk about a little bit about the need for that capacity and 
what is going on there.
    Secretary Stackley. Let me just describe a couple of 
things.
    We have recently submitted in a report to Congress what is 
referred to as the Shipyard Business Plan, which takes a look 
at public-private, the division of work going into the public 
shipyards, and then how do we plan and manage that workload to 
ensure that we are meeting our public-private requirements as 
well as ensuring that our shipyards are efficiently loaded.
    And at Portsmouth--and I will get the number exactly 
wrong--but I would say that there is what we call full-time 
equivalents for workload at Portsmouth looks fairly stable at 
the 4--roughly 4,000 per year rate. In the repair world, 
particularly in Portsmouth's world where most of their work--
all of their work is submarine, but most of their workload was 
tied to refuelings, and as we move--as we have moved out of 688 
refuelings and have gone to Virginia where you don't have a 
mid-life refueling plan, then it becomes more of a challenge. 
So what we are trying to do is balance that skill level, 4,000, 
to workload to ensure we are not operating the shipyard 
inefficiently. And it will be a continual challenge.
    Ms. Pingree. Thanks.
    Mr. Taylor. The Chair recognizes the gentleman from 
Missouri, the ranking member.
    Mr. Akin. We are starting to run long here, but I just had 
one quick question or concern. And that was, having been in 
charge of maintenance in a steel mill I know when there is a 
lot of budget pressure it is easy to sort of shave off the 
maintenance budget. Certainly in the last number of weeks we 
have been sensitive to a lot of budgetary pressures.
    In addition, I believe that a lot of the maintenance 
requirements have been sort of moved out of the public domain 
in a way. I guess it is just a thought or a concern that we 
make sure that, you know, you are trying to keep a 300-
something ship Navy, you have got to keep up on the 
maintenance, too. I hope that that is being balanced carefully. 
It might be something that we need to look at just to make sure 
that we are not shaving that too tight.
    Admiral McCullough. Yes, sir. Thanks very much for that 
statement.
    We look at maintenance very carefully. And as we talk about 
a 313 ship floor, as we go forward, two-thirds of that 313 is 
sitting at the pier right now. And if we don't get our ships to 
their estimated service lives we will never achieve the 313 
floor structure plan.
    In the current budget request we have funded or requested 
funding for service ship maintenance to a level of 96 percent 
of what we perceived the requirement is. And when we looked at 
the entire portfolio and the risk we were taking with respect 
to procurement and manpower and ops and maintenance, that four 
percent we believed was acceptable risk.
    But absolutely, sir, we look at that. We think it is very 
important to do the right maintenance on the ships at the right 
times. And I would tell you, as part of our 2009 execution year 
challenge, we have curtailed some operations to continue to 
fund maintenance availabilities. And that is the way we view 
that, sir.
    Mr. Akin. I appreciate your keeping that kind of balance in 
the whole thing. Because there is so much pressure for 
platforms and new technology and all that kind of thing. And, 
as you know, if you let maintenance get away from you, then it 
can really eat you alive. Because it is a preventive thing. And 
you didn't catch it early and now you have got to tear 
something all to pieces in order to get into some part you have 
got to change.
    Thank you, Mr. Chairman.
    Mr. Taylor. The Chair thanks the ranking member.
    Gentlemen, I want to compliment you on what I think has 
been one of the better presentations that I have seen in my 
time in Congress.
    Secretary Stackley, I think we are lucky as a Nation to 
have you where you are. And I would leave you with just one 
last thought. I am always amazed at the caliber of our officer 
corps and our enlisted corps. We are, as a Nation, are blessed.
    I think, though, that, over the years, the most glaring 
weakness in our Department of Defense has been the acquisition 
force. It has been my observation that a grounding, no matter 
how slight, is a career-ending move for a ship captain. I would 
hope that a program that runs over budget or fails to be 
delivered on time, that we, as a Nation, would take the same 
attitude towards those programs, that we could instill in our 
acquisition force the need to--with a Nation that is going to 
run a $1 trillion deficit this year and with a series of 
programs that have run late and well over budget, I would hope 
that one of your goals would be to get within your acquisition 
force that type of a mentality that we are going to be on time, 
we are going to be on budget, and we are going to get the best 
value for the fleet, for the sailors, and for the people who 
pay for that.
    Secretary Stackley. Sir, can I offer a comment?
    Mr. Taylor. Absolutely.
    Secretary Stackley. Thank you.
    Let me first say that, yes, sir, we have absolutely--we 
have to change course in terms of where we are going regarding 
cost and schedule performance on our major defense acquisition 
programs.
    As far as the caliber of the individuals that you have 
working for you day in and day out to achieve that, we have 
top-notch individuals who are working hard. One of the 
challenges that we face is that in the course of the past 15 
years we have taken the acquisition and work force and reduced 
it by 55 percent. So now what you have done is you have taken 
hard-working individuals and you have stretched them way too 
thin. So the Congress recognizes that, and the Department 
recognizes that, and we are taking the steps necessary to start 
the rebuild.
    The Department of the Navy has 5,000 acquisition workforce 
members that we are going after in the FYDP. We have got it 
identified in terms of critical skills, where do we need them 
placed, and we are actively going after getting the best folks 
we can to come into the government to help us take on that 
task.
    Mr. Taylor. Mr. Secretary, again, I think we are lucky to 
have you where you are. I very much appreciate the attitude you 
are taking towards this, and we are going to work with you to 
make that happen.
    If there are no other questions, then the subcommittee 
stands adjourned.
    [Whereupon, at 11:46 a.m., the subcommittee was adjourned.]



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




                            A P P E N D I X

                              May 15, 2009

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


              PREPARED STATEMENTS SUBMITTED FOR THE RECORD

                              May 15, 2009

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


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                                  
