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



 
                    DEFENSE APPROPRIATIONS FOR 2011

                                       Wednesday, January 20, 2010.

                        ACQUISITION CONTRACTING

                               WITNESSES

PAUL FRANCIS, MANAGING DIRECTOR, ACQUISITION AND SOURCING MANAGEMENT 
    TEAM, GOVERNMENT ACCOUNTABILITY OFFICE
MICHAEL GOLDEN, MANAGING ASSOCIATE GENERAL COUNSEL FOR PROCUREMENT LAW, 
    GOVERNMENT ACCOUNTABILITY OFFICE
BILL WOODS, DIRECTOR, ACQUISITION AND SOURCING MANAGEMENT TEAM, 
    GOVERNMENT ACCOUNTABILITY OFFICE

                  Chairman Murtha's Opening Statement

    Mr. Murtha. The hearing will come to order. We welcome the 
witnesses, and I want to say that the problem we have been 
having is the acquisition process. I don't say it is broken, 
but the bigger contracts that we have had, we have had some 
real problems with them. We talked a little bit before the 
hearing started about some of the protests that have been 
sustained.
    You have got to go into some detail with us about what you 
see if there is something we can do to help this situation. You 
made some suggestions that I would like you to make officially 
about the problems you see in this area so that we can try to 
resolve them from a fiscal standpoint.
    Mr. Frelinghuysen.

                     Comments of Mr. Frelinghuysen

    Mr. Frelinghuysen. Thank you, Mr. Chairman. Welcome, 
gentlemen.
    Would you like a motion, Mr. Chairman?
    Mr. Murtha. I would like a motion.


                    motion to hold executive session


    Mr. Frelinghuysen. I move that those portions of the 
hearing today which involve proprietary material be held in 
executive session because of the sensitivity of the material to 
be discussed.
    Mr. Murtha. All in favor will say aye. Without objection, 
aye.

                    Opening Statement of Mr. Francis

    Mr. Francis. Thank you. Mr. Chairman, Mr. Frelinghuysen. I 
appreciate the opportunity to be here today to talk about a 
wide range of topics: weapons systems, contracts, workforce, 
bid protests. I have with me Mike Golden on my right, who is 
the head of GAO's bid protest unit. On my left is Mr. Bill 
Woods, who is a contracting expert. I think among us we must 
have pretty close to 100 years of experience.


                    PURSUIT OF VERY HIGH CAPABILITY


    I just have a couple of remarks to make in the beginning, 
and we will get very quickly to the questions. The condition 
that we have today has been decades in the making. I think in 
the area of weapons systems, we are looking at the effect of 
cumulative commitments to pursue very high capabilities, and we 
have accepted the high risk associated with those. We have also 
vastly expanded our capability to meet near-term commitments, 
but we have done that largely through contracting out for 
services.
    I think you could describe what we have been doing in the 
near term as institutionalizing expediency, and that is 
something that we have to look at.
    We have had, over time, the money and the flexibility to do 
so, but the question we ask ourselves today is, are we where we 
want to be? And I think the answer is, no, I don't think it is 
a sustainable path that we are on.
    If you look at weapons systems Mr. Chairman, cost growth 
and schedule delays associated with high-risk weapons are 
denying the warfighters the capabilities they need on time, and 
certainly in the quantities they need.


                         CONTRACTOR WORK FORCE


    When we have done contingency contracting and service 
contracting to expand our near-term capabilities, we have done 
so through the process of thousands of decisions. So what we 
have today is a very large contractor workforce that is largely 
been put together on an ad hoc basis. It hasn't been strategic 
at all.
    Today it is still hard for the Department of Defense to say 
how many contractors it has, where they are, and there are a 
lot of questions about what roles we play.
    Our own organic government acquisition workforce has stayed 
relatively stable in the past few years, and if you go back in 
history, has declined significantly.
    There is a move afoot to increase the acquisition 
workforce, but I think a key decision----


                     FEDERAL ACQUISITION WORK FORCE


    Mr. Murtha. Go over that again, because this committee has 
been stressing direct hires. It is cheaper, and the contracting 
has gotten out of control. So go over that one point again as 
you go along here.
    Mr. Francis. Sure. I think if you go back to the 1990s, the 
acquisition workforce was probably cut in half during that 
decade and there was a big movement to contract out for a lot 
of that activity.
    During the last 10 years, I think the workforce is down to 
around 130,000. I am trying to remember the numbers, but it may 
have been as high as 300,000 to 400,000 20 years ago. What we 
don't have a good number on today is how much that has been 
augmented by the contractor workforce in acquisition.
    But be that as it may, as we have hired more contractors to 
do work, our acquisition workforce has stayed the same. So our 
people are having to do a lot more oversight than they used to, 
and there is a real question there.
    Mr. Murtha. How do you define our acquisition workforce in 
the Defense Department?


                 KNOWLEDGE OF WORKFORCE CAPABILITY GAPS


    Mr. Francis. Defense Department, military and civilian.
    I think even more important, even as we are looking at 
increasing that workforce, the Department of Defense today does 
not really know the skill sets it needs in its acquisition 
workforce, so it doesn't really know what gaps are most 
pressing to fill. So as we in-source, it is hard to in-source 
smartness, so these are real challenges for the Department of 
Defense. It does not have good data on its own workforce.
    Another factor we have to consider is we are not going to 
have the money to sustain the way we have been conducting 
business over the last 10 years. So I don't think, again, we 
are where we want to be.


                   OPPORTUNITY TO IMPROVE ACQUISITION


    But I do think we are in a really great period of 
opportunity, and there is a lot of momentum for change. I think 
of a number of things. One is what the Congress has done with 
acquisition reform legislation and the Department of Defense in 
changing its policies. I look at what the President has done in 
his memo on contracting, and the tough decisions the Secretary 
of Defense has made on weapons systems.
    I also look at the continuity in acquisition executives 
from the last administration to this administration. I think it 
is unprecedented, and there is a level of experience there that 
I don't think we have had. We also have a QDR coming up as 
well, so there is a real opportunity and momentum for change 
here. I would say, having been around a fairly long time, there 
have been opportunities in the past that have been missed.
    Coming back to your point, Mr. Chairman, we have to think 
about programs that have gone wrong, and why they went wrong. 
If requirements were poorly conceived, perhaps too ambitious, 
then the subsequent acquisition program can't fix that. That 
acquisition program is going to be in trouble.
    If the acquisition program isn't laid out soundly, then no 
contracting type is going to fix it, so we have to go back and 
work it all the way through. It takes a lot of things to go 
right.
    Things that have been challenges in the past is when 
programs have come forward--we talked about Future Combat 
Systems--and don't measure up, yet the Department approves it 
and submits it for funding, and then it gets funding. We are 
actually reinforcing some of the things that we don't want to 
happen.
    So for us to capitalize on this opportunity that we have 
now, the key thing to sustain momentum is we have got to make 
sure our money decisions reinforce the practices and principles 
that we are espousing today. That is the most important thing 
for us.
    That is all I have to say in the beginning. We would be 
glad to answer any questions.
    [The statement of Mr. Francis follows:]

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                       AIR FORCE REFUELING TANKER

    Mr. Murtha. You go into some detail about the programs that 
have been overturned. For instance, you have got the refueling 
tanker. We have gone through this over and over and over again. 
What was the basic problem in overturning the tanker RFP?
    Mr. Francis. Okay, I will turn to Mr. Golden on the bid 
protest.

                          TANKER AWARD PROTEST

    Mr. Golden. In our written testimony, we identified six or 
seven major programs which were protested, and those cases were 
sustained. One of the common threads, I think, in all of them 
if you analyze it, is a situation where the agency sets out in 
their request for proposals certain ground rules, promises that 
they have made to the vendors. The vendors propose to those 
requirements. Ultimately, for reasons from our record we can't 
divine, the agency doesn't evaluate proposals consistent with 
those ground rules.

                            TRICARE PROTEST

    Some of the explanation may be with respect to 
requirements. But one of the examples we are talking about was 
TRICARE. In both TRICARE cases, where we sustained the protest 
and found in favor of the protester, there was a common issue 
and it involved how to evaluate the network provider discounts, 
which are discounts that the vendor negotiates. The company 
that ultimately gets the contract negotiates with doctors and 
the hospitals, and those discounts result in a lower overall 
health care cost.
    The agency basically promised to evaluate the network 
provider discount--which was a way to evaluate the savings--but 
had difficulty doing it and ultimately didn't really follow 
through in what they had promised in the solicitation. I am not 
sure why that happened, but clearly from an acquisition 
planning standpoint, it seems to me you have got to make a 
decision about what you are going to do with something like 
that.
    It is savings, and it is therefore something you want to 
consider. You have got to figure out where to consider it. Let 
people know, let the companies know where you are going to 
evaluate it so they can address it in their proposal. And then 
you have got to evaluate it and follow through.
    One of the reasons we sustained the protests and sent them 
back to the agency to take corrective action was to force it to 
determine how to evaluate that.

                 DEVELOPMENT CONCURRENT WITH PRODUCTION

    Mr. Murtha. You gave me some examples before the hearing 
started about programs where they started the production at the 
same time they started the research. Explain that to the 
committee and explain what we can do as a committee where we 
provide all the funding, so that doesn't happen in the future.
    Mr. Francis. Certainly. I think the examples we talked 
about, Mr. Chairman, were the B-1 bomber, going back a long 
time; the VH-71 Presidential helicopter and the littoral combat 
ship. I think in all three cases the Department of Defense made 
the start of development and the start of production decisions 
the same day.
    That is not a strategy for any program that requires 
development, by which I mean engineering and testing and 
proving out. It is not something that can work, because you 
can't work on a production design when you don't know if the 
basic design works. In the B-1, everything got done on time, 
but we had to do a lot of work afterward to bring that aircraft 
up to snuff. The VH-71 never was able to deliver, and there 
were a lot of requirements, increases, over/time, but it was 
not executable from the start even if there hadn't been any 
increases.
    The littoral combat ship the same way. When it got started, 
the yards that the contracts were awarded to didn't have any 
design capability. Yet the ship had to be designed and built at 
the same time. Not an executable strategy.

                     REQUIREMENT FOR TRAINED PEOPLE

    So getting to your question of what can we do about it, 
one, we have got to make sure the Department has the people 
with the technical skills who can recognize those requirements 
that are unachievable.
    You can do something like this as long as you are not 
developing a system. An example we have talked about was the 
MRAP vehicles.
    If they are off the shelf, you can go into production 
pretty quickly. But if you have to develop them, you have to 
develop first, then produce. So the Department needs the people 
to make sure that when programs are brought forth, that those 
schedules are executable.
    I think on your part, the obligation would be if they bring 
something forward that isn't ready, then you have to say no to 
the funding.

                        PRESIDENTIAL HELICOPTER

    Mr. Murtha. So if they come forward with a plan where they 
are going to research it and produce it at the same time, we 
should say, ``Wait a minute, you research it first.'' Always 
the problem we run into at the Defense Department, they have to 
have it now, there is this policy decision by the Defense 
Department, it is a national security issue.
    But we can deal with that. There are enough instances where 
it has cost so much more money, it hasn't worked out--and the 
VH-71 is a perfect example of that; if we stop at 22 aircraft 
as an example, where we had to stop it for a while, how do we 
measure that? We ask you guys to look at it or how do we 
measure when they come forward with both?
    I mean, our budget is $636 billion. You know, you lose 
sight. The VH-71, I admit I lost sight of the thing. I didn't 
realize it was escalating so much until somebody told me it was 
going to cost $500 million apiece. So how do we watch that?

                        KEY MILESTONE DECISIONS

    Mr. Francis. There are a couple of things, Mr. Chairman. 
Right now because of the legislation that has been passed over 
the past couple of years, there are two key milestone points in 
any kind of a developmental acquisition. I won't get into the 
details, but the milestone A and the milestone B decisions are 
key program start decisions. And the Department of Defense must 
now offer to the Congress certifications that certain things 
are done at those milestones. So that is one thing, to make 
sure those are done.
    The next thing is, anytime there is a new start proposed in 
the budget, that has got to get flagged and it has got to get 
reviewed, particularly on the Hill. And I think I would hold 
the Under Secretary of Defense for AT&L accountable for doing 
all the things they need to do for bringing that forward for 
funding.
    In the meantime, we look at all major acquisitions once a 
year in an annual report that we prepare for you. So we are 
keeping tabs on everything. And then we are in a position for 
individual programs where you want us to do detail work. We can 
put a team on that. So I think there are enough mechanisms out 
there to capture these programs.
    Mr. Murtha. Mr. Frelinghuysen.

                   ACQUISITION WORKFORCE PERSPECTIVE

    Mr. Frelinghuysen. From the outset you said that among the 
three of you, you have 100 years of experience. So I assume you 
have been involved in, shall we say, the life cycle of going up 
and down. Could you put a little more meat on the bones in 
terms of what did the landscape looked like when you first 
joined the ranks of those that you head up now where we are 
working--you sort of mentioned, were there 300,000 or 400,000 
people, both military and civilian that had these 
responsibilities?
    I remember reinventing government and as we go from 
administration to administration, everybody tries to put their 
mark on it. Now we are into sort of a direct hire mode, you 
know, more people that you need that are government employees. 
What was the picture like, let us say, 30 years ago? Because 
then you have to map it to far more complicated military 
equipment platforms. You point out it is about 150,000.
    What did it look like, let us say, 30 years ago?
    Mr. Francis. I think when you go back in time you did see a 
larger government workforce. And some things that you did see 
particularly was in the area of developmental testing, where 
the Department of Defense had a very big developmental test 
organization. And then when you did work in individual program 
offices, the military and civilian personnel there actually 
directly managed a lot of the testing and engineering.
    If you look in the Navy, the Navy was design----
    Mr. Frelinghuysen. And this is at a time, obviously, when 
we had a lot more military installations. This was sort of 
preBRAC, right?
    Mr. Francis. Yes.
    Mr. Frelinghuysen. Where, you know every State had some 
sort of an arsenal or a depot; is that correct?
    Mr. Francis. That is correct.
    Mr. Frelinghuysen. So you had quite a different landscape.
    Mr. Francis. It was, and there were a lot more programs, I 
think, at that time. But, for example, the Navy was designing 
its own ships. It would come up with the design by the naval 
architects, and then the yards would build to the designs. So 
over time we have made decisions through reinventing government 
and so forth to off-load.

                    COST OF OUT-SOURCING ACQUISITION

    Mr. Frelinghuysen. But not to irritate anybody. But to some 
extent if you closed down whatever was out there 30 years ago 
in the way of depots and different types of R&D facilities, you 
would have to call upon somebody to do that type of design and 
testing work; is that correct?
    Mr. Francis. Sure. The other thing that was going on was 
the belief that contracting out these functions would be less 
expensive than doing them in-house, so the thought was that it 
would be cheaper.
    I think the data supported that for the first 10 or 15 
years, but we found in the last 5 years, when we have looked at 
a particular case, we found that now contracting out can be 
more expensive than doing it in-house.
    But we can't go back to those days. We can't pull all that 
back in.
    Mr. Frelinghuysen. Most of that military-industrial complex 
is not there, either in our hands or even in the hands of many 
of the contractors that are doing the types of reviews that 
they have been doing; is that correct?
    Mr. Francis. That is right. So I think we are looking at a 
reality where we will have a blended workforce. We will have a 
mixture of contractor and government personnel. The question is 
where does the government really need to have its people to 
manage that kind of workforce?

                         FREQUENCY OF PROTESTS

    Mr. Frelinghuysen. Just one question. There is a public 
perception, we are lay people here, that there seem to be more 
protests than there used to be. Is that public perception 
correct or is it because--what's going on out there? I know 
sometimes people plan to protest even before anything is done.
    Mr. Golden. Well, I am not sure of that, but the protest 
numbers have been up the last 2 years. About 50 percent of the 
increase is related to expanded jurisdiction that we received 
with respect to task-order procurements. And we talk about the 
landscape change; in the mid-1990s, the government authorized 
IDIQs, Indefinite Delivery, Indefinite Quantity, multiple-award 
contracting, a more efficient method of contracting.
    Mr. Frelinghuysen. The government being, for example, us or 
our predecessors?
    Mr. Golden. That was part of the trade-off, I think, for 
the reduction in personnel that the Chairman was referring to 
before.
    But as a result, GAO lost jurisdiction of protests of task 
orders. That has now been restored because a lot of money went 
through the task orders in the last 4 or 5 years. And the 
jurisdiction has been restored for 3 years with a sunset 
provision. But that is a change. That accounts for virtually 50 
percent of the increase in protests.
    But having said that, the protests last year went up 10 
percent, and the year before went up about 10 or 12 percent.
    Before that, the numbers were down from the mid-1990s when 
there were, say, 3,000 protests. It is really at historical 
lows, relatively. I can explain a little bit why there were 
more protests then but it had to do with lack of debriefings 
and some other reasons which Congress fixed. Debriefings 
actually provided more information to the companies. They had 
less reason to protest, so it worked.
    But the rise is partly driven by the expanded jurisdiction 
that we have.
    Now, I will qualify also that the cases the Committee 
identified involve high contract values. And, frankly, I can 
remember in mid-1990s, we had our first $1 billion procurement, 
the Army radar procurement, and I didn't see one for another 7 
years or 8 years. Now we seem to be hitting a billion dollars 
more often than that.
    That is due to the nature of what the government is buying, 
the way they are procuring, the types of things, the bundling. 
So it is not unusual, but that is what we are seeing and those 
are the ones that we identified for the committee.
    Mr. Frelinghuysen. Thank you, Mr. Chairman.

           BALANCE BETWEEN DIRECT HIRE AND CONTRACT EMPLOYEES

    Mr. Murtha. I got the impression that there was a balance 
that you see between direct hires and contractors. Do we know 
what that balance is?
    Mr. Francis. We don't, Mr. Chairman. I don't think it is 
strictly numbers; I think it is skill sets and then roles. And 
I don't think the Department knows that yet either.
    Mr. Murtha. So you said earlier, one of the problems with 
contractors is they come and go, versus the direct hires; they 
gain experience and there is more stability. Is that accurate?
    Mr. Francis. I think that is accurate for civilian 
personnel. I think the military personnel rotate pretty 
frequently through the acquisition workforce.
    Mr. Murtha. Mr. Visclosky.

                       WORK FORCE SIZE AND SKILLS

    Mr. Visclosky. Thank you, Mr. Chairman. Now, on the issue 
of the size of the contracting force in your 2008 report, you 
talked about DOD's efforts to increase their in-house personnel 
by 20,000 in 2015. Would you want to comment, is that the right 
number, is it in the ballpark, and how are they proceeding? And 
the Chairman alluded to the skill sets, I believe, and your 
response did. Are the skills commensurate as opposed to just 
filling slots? Getting back to the balance, is that a good 
number?
    Mr. Francis. It is hard to say. I think there is a 
consensus, if you look at the studies, including the Gansler 
Commission, that the number needs to be higher. But what number 
is the right one, I don't know. The more difficult question is 
where do those 20,000 people go? And that is where we found the 
data that the Department has just isn't going to tell the 
Department where to make those investments. So I don't see 
where they have a good plan at this point for where to invest 
those people.
    I think on the one hand, you would want a really good 
inventory, but that could take years to do. I think the 
Department has to do enough analysis to find out what is really 
hurting it now. So, for example, I might suggest in program 
offices for really complex acquisitions, that might be a place 
where you want to look right away and do a skill set analysis 
there and then decide how much of that 20,000 to invest in 
those program offices. But I don't think the Department is in a 
position to know that right now.
    Mr. Visclosky. What analysis did they base that number on 
in 2008 or prior to that; do you know?
    Mr. Francis. I don't know.
    Mr. Woods. I am not real-sure where that number comes from 
either, except I think there is some desire in terms of the mix 
of contractor versus in-house personnel to return to a number 
that existed in the early 2,000s, to bring it back to the ratio 
that existed perhaps 10 years ago.
    Mr. Visclosky. Do you have a sense they are having success 
at matching up those skills? You talk about radar systems and 
things. If I was a contract officer, I would be dangerous. 
People with the requisite technical skills and business skills, 
are those matching up from your analysis today?
    Mr. Francis. I think the Department is just beginning to do 
that. We don't have any independent analysis right now to know 
how well they are doing the matching, but our understanding is 
they are just in the beginning stages of trying to decide that. 
And the Defense Acquisition University is playing a lead role 
in that.
    Mr. Visclosky. One last question. Then it is my generic 
sense that they do need additional people in-house before we 
start appropriating money for 2011. What are the best steps we 
can take to figure out a good solid number for 2011 with the 
commensurate skill sets?
    Mr. Francis. I think you would, one, have to press the 
Department on how it is going to go about the plan of hiring 
those people and what skill sets. Then you might think about 
what problems you think are most pressing that the Committee 
faces. So, for example, we are talking about weapons system 
cost growth and use of contract types. So you might think about 
cost estimating.
    For example, the Department, because of acquisition reform 
legislation, just created a new position, Director of Cost 
Analysis and Program Evaluation. They set up a new office, 
Director of Development, Tests and Evaluation, and an Office of 
Director for Systems Engineering, all really important skill 
sets.
    So I think perhaps the first question is are those offices 
going to be adequately supported with new people?
    Mr. Visclosky. Gentlemen, thank you. Mr. Chairman, thank 
you.
    Mr. Murtha. Mr. Kingston.

                               AWARD FEES

    Mr. Kingston. Thank you, Mr. Chairman.
    Mr. Francis, the GAO estimates that the DoD can save are 
those offices over $450 million a year, just in 2011 alone, by 
limiting second chances at award fees. Can you explain that to 
me?
    Mr. Woods. Do you mind if I take that? Sure, first of all, 
award fee contracting is a device to motivate excellent and 
superior contractor performance where the agency will decide on 
a base fee, often relatively low, such as 1 or 2 percent of 
estimated contract value, and then to incentivize good 
contractor performance, they will add a percentage on top of 
that, perhaps 5, 6, 7 percent, to result in a total fee.
    We started some work a few years ago to take a look at how 
that award fee process was really working, and we were not 
pleased with what we found.
    We found that officials were not tying those awards to 
actual performance; in other words, providing the award amount, 
even though performance by the contractor was not excellent but 
only merely satisfactory, or, in some cases, even 
unsatisfactory performance, and the contractor was still 
earning the award fee.

                           AWARD FEE ROLLOVER

    Mr. Kingston. But there is an OMB guideline on it----
    Mr. Woods. We have seen a series of improvements over the 
years since we started this work. And you mentioned the $450 
million figure; let me identify what that is. That deals with 
the issues of rollover.
    Rollover involves a situation where the government might 
decide not to grant the award fee in a given period because the 
contractor's performance didn't measure up to expectations; but 
they would allow, in a subsequent period, the contractor to 
earn that fee. So they would roll it over to a subsequent 
evaluation period, and a lot of people questioned whether that 
was really an effective mechanism.
    Now we have a regulation, an interim regulation issued by 
the administration, which prohibits the use of rollover.
    In our latest report on award fees, where we looked at DoD, 
we did identify that the Department, just on the eight 
contracts that we looked at, could have saved that $400 
million.
    Mr. Kingston. So has that then been addressed, or should 
this Committee put in some report language or something in the 
bill saying that we need to continue this?
    Mr. Woods. I think on that issue of rollover that we have 
reached a resolution of that with the new regulation, the 
interim regulation issued by the administration.
    Mr. Kingston. But the fee system as a general rule still is 
a productive incentive when used properly?
    Mr. Woods. Absolutely it is, yes, sir.
    Mr. Kingston. Thank you, Mr. Chairman.
    Mr. Murtha. Mr. Dicks.
    Mr. Dicks. No questions at this time.
     Mr. Murtha. Mr. Moran.

                   INHERENTLY GOVERNMENTAL FUNCTIONS

    Mr. Moran. Thank you, Mr. Chairman. If we are going to 
achieve that, the kind of balance that has been referenced, it 
seems to me the first step is to determine what is an 
inherently governmental function and what is not. There has 
been some rough assumption that we would know it if we looked 
at it. But DoD, for example, has contractors as the lead system 
integrator for ballistic missiles or the future combat system. 
It seems to me that is an inherently governmental function, 
which ought not to be performed by a contractor.
    For a lot of the cost estimating for a contract, 
contractors ought not be estimating what the government should 
be charging contractors. We have even read about situations 
where contractors were evaluating the bids of other 
contractors. So we have gone much too far in terms of what 
kinds of functions have been contracted.
    Now, it seems to me that one of the things that the 
subcommittee has emphasized is, it is time, not just for DoD, 
but governmentwide, for OMB to step in and give us a clearer 
definition of what is an inherently governmental function.
    Now, I get the sense that some of that is up to the program 
manager, and that is not good either because we have 
inconsistent policies which aren't even fair to the 
contractors.
    But I would like to know if you feel that OMB has made a 
reasonable effort or any effort in terms of better defining 
what is an inherently governmental function.
    Mr. Francis. Well, I am going to ask Mr. Woods to comment 
on that. But I would say there is pretty good guidance on 
inherently governmental. I think an area we find of increasing 
concern, however, is an area called closely supporting 
inherently governmental, which is a gray area which is not 
being very well managed.

                        LEAD SYSTEM INTEGRATORS

    Mr. Moran, you brought up a lead system integrator, which 
really is a category in and of itself. We have seen that in the 
Army, we have seen it in missile defense, we have seen it in 
the Deep Water acquisition, we have even seen it in one of the 
Navy acquisitions. And we haven't seen it work yet.
    So regardless of what the definition is of inherently 
governmental, I think when an acquisition is proposed using a 
lead system integrator, it is almost saying right up front the 
government doesn't have the capacity to manage this program. 
That is a red flag right at the beginning. I don't think it 
means don't do it. But if the government is trying to do 
something it can't manage, that is a risky project right off 
the start.
    Mr. Moran. The taxpayers are at risk as a result, I would 
assume. So in the absence of clear definitions in the areas 
that I think we would assume common sense would say this ought 
to be done by the government, it appears that they are taking 
the most simplistic approach and, for example, to in-source it, 
pulling back some of these functions.
    It appears that much of it is just on the basis of cost 
comparison. Of course, if that is the case, then you miss a 
lot. You miss elements of quality, of experience, various skill 
sets and so on. But isn't it true that much of the in-sourcing 
that is now being done to achieve that balance just seems to be 
on the basis of cost comparison rather than the ability to 
perform the mission most effectively?
    Mr. Woods. Do you mind if I take that?
    Mr. Francis. Sure, go ahead.

                   IN-SOURCING ACQUISITION FUNCTIONS

    Mr. Woods. We are still in, the early stages of in-
sourcing. That is a term that is of recent vintage. The 
Department of Defense, largely at the urging of the Congress, 
has been reviewing activities that it could possibly bring back 
in-house through in-sourcing. Cost is one issue, but there are 
many, many other issues that have to factor in there, expertise 
being one of the primary factors. But cost is on the list, but 
not a high priority item for in-sourcing.

                 ACQUISITION WORKFORCE DEVELOPMENT FUND

    Mr. Moran. Well, are they using that acquisition workforce 
development fund? That would enable us to better make these 
kinds of decisions. There is 700 million dollars in there.
    Mr. Woods. That was an initiative that the Congress passed 
a couple of years ago to actually create a funding stream to 
improve the contract workforce--the in-house government 
contracting government workforce.
    We have an effort underway in response to a congressional 
mandate to look at how the Department of Defense is using that 
fund. We look forward to reporting on that sometime this year.
    Mr. Francis. Mr. Moran, I think you raise a very good 
question. Even with the 20,000 positions, that would not be 
enough to replace all of the contractor people. So the 
government really has to look at those as investments. The 
government has to be really judicious about what highly 
leveraged positions it puts those people in and it just can't 
be a cost comparison.

                  FEDERAL ACQUISITION WORKFORCE SKILLS

    Mr. Moran. DOD needs to give us a better sense of what 
skill sets they really need. It is not just the numbers and the 
dollars, but we need to know where they are best needed. DOD 
needs to understand that, so they can use effectively the 
additional resources provided.
    You need to move on to other members, Mr. Chairman, tut 
thanks for having this hearing. This is a terribly important 
hearing. Thank you.
    Mr. Murtha. Mr. Rogers.

                        LEAD SYSTEMS INTEGRATORS

    Mr. Rogers. Thank you, Mr. Chairman, and thank you, 
gentlemen, for being here.
    Back to the management of these large programs, the lead 
systems integrator, did I hear you say that you have not found 
an instance where the lead system integrator project worked?
    Mr. Francis. That is correct. In every case that I am 
familiar with, the government decided to abandon that approach.
    Mr. Woods. That is true, not only with respect to the 
Department of Defense, but also in other agencies where we 
review the use of that concept like the Department of Homeland 
Security and its Secure Border Initiative and the Coast Guard's 
Deep Water program are also examples where it has not worked 
out as expected.
    Mr. Rogers. Well, I was going to bring those two up because 
I am familiar somewhat with them, more than others.
    What drives the government to go that route in the first 
place, the lead system?
    Mr. Francis. I will use the Future Combat Systems as an 
example. That was a case where what the Army wanted to do was 
extremely ambitious, technically. It also was trying to cut 
across its own organizational stovepipes, and it felt it did 
not have the people to manage that kind of a project with those 
skill sets.
    So it went to a lead system integrator in the belief that 
the lead system integrator would have the skills and be able to 
do the contract management needed to bring in the entire 
project.
    But I will go back to what I had said in the beginning, 
that the government was starting off with something it knew it 
couldn't manage, and so the lead system integrator was thought 
to be bringing something the government didn't have. But I 
think that is at the crux of what we are talking about. If 
those are the things the government wants to do, it should have 
the workforce to do them.
    Mr. Rogers. Yet the workforce is shrinking, correct?
    Mr. Francis. Certainly it has shrunk absolutely, and then 
relatively, to the volume of business.
    Mr. Rogers. Well, in the case of the border contract and 
Deep Water, Coast Guard; am I correct that the lead systems 
integrator in one or both of those cases also was a 
subcontractor, a contractor for services; is that correct?
    Mr. Woods. They did a substantial amount of the work. For 
example, in the Deep Water program, both of the contractors 
that formed the joint team that served as the lead systems 
integrator also got work--production work under that contract 
as well.
    Mr. Rogers. Is there a conflict of interest there?
    Mr. Woods. One could argue that there might be. There are 
provisions in place to prevent organizational conflicts of 
interest. Certainly the agencies in both of those instances 
would tell you that they reviewed and paid careful attention to 
the possibility that contractors may be favoring their own 
designs, their own capabilities, as opposed to others.
    Mr. Rogers. Surely not. Surely not.
    Mr. Moran. That would be wrong.
    Mr. Francis. Mr. Rogers, on the Future Combat System, they 
did try to set that lead system integrator up differently, 
where they went to a contractor, Boeing, whom in the beginning 
they prevented, precluded from winning any subcontracts or 
winning anything in production. So the idea was that Boeing was 
to be a developer but not a producer. Now, over time, the Army 
got away from that strategy, but up front they did recognize 
the organizational conflict of interest.
    Mr. Rogers. Well, are we still using lead systems 
integrators?
    Mr. Francis. I don't know of any projects right now where 
there is a lead system integrator.
    Mr. Woods. Nor do I. In fact, the Congress enacted 
legislation to greatly curtail the use of lead systems 
integrators a couple of years ago.
    Mr. Rogers. Do we need to do anything in this bill?
    Mr. Francis. I don't think so. I don't know of any projects 
that are operating that way. As I think Mr. Woods said, the 
legislation kicks in in 2011; am I correct?
    Mr. Woods. There are already prohibitions in place for new 
starts using the lead systems integrator.
    Mr. Murtha. The time of the gentleman has expired. Let me 
announce to the committee there are three or four votes. There 
will be a 15-minute vote, which always takes a half hour. We 
will adjourn when it gets down to 100, vote for two or three, 
and then come back.
    I think this is so important, I think it is necessary to 
come back if you folks have the time. We will be gone about 15 
or 20 minutes. We will adjourn and come right back when it gets 
down to 100, to give you some time after that.
    Ms. Kaptur.

               COST OF FEDERAL VERSUS CIVILIAN EMPLOYEES

    Ms. Kaptur. Thank you, Mr. Chairman. Welcome, gentlemen.
    Mr. Chairman, thank you for holding this hearing. I am a 
member of the Budget Committee, and we were struggling this 
morning with how to put the accounts of this Nation back in 
order. In looking at each department, I am struck by the fact 
that--how important Defense is, obviously; and by the 
authorization, Defense Authorization Act of 2008, the 
Department has to report back to Congress on various contracts 
that it has and the activities that it is performing.
    The only department that has reported back to us, according 
to the information I have, is Army, where one of the lessons 
they have learned, they say, is on average to take total cost 
of a Federal civilian employee as opposed to a contractor. The 
cost is $44,000 less costly. That is just one person, $44,000.
    When I look at page 13 of your report, you have a very 
instructive chart where you show the number, the share of 
programs that DoD administers in acquisition--in the 
acquisition unit, with cost growth of over 25 percent more than 
originally projected. Forty, over 40 percent every single year. 
That is nearly half. When one looks at the costs associated 
with that, they are staggering.
    Then you have a line there on total acquisition cost growth 
from 2003 going up from $183 billion to $296.4 billion. My 
question really is, if you look at the whole Department and 
what has happened with Defense spending, if we want to 
establish some fiscal rigor within this budget, how much could 
we save by in-sourcing? What is the whole?
    If Navy and if Air Force hadn't reported back to us, if we 
don't have accurate figures on contractors in the two war zones 
in which we are engaged, their costs versus costs of regular 
force, what data do you have that could instruct us as to how 
large this number potentially is of outsourcing versus in-
sourcing?
    Mr. Francis. Very hard to say, Ms. Kaptur. I have seen the 
$44,000 number. When we have done individual analyses we have 
found it is 25 percent cheaper to bring on a government person 
to do the job versus a contractor, which wasn't always the 
case.
    Now the question becomes, Does that scale up? In other 
words, could you bring in a government workforce at those 
savings? I think a lot of that would depend on what skill sets 
you are looking at.
    But I wonder--I think in the near term, when we expanded 
the contractor workforce, we did so by government people being 
hired by the contractors. So I have wondered personally. If you 
look at somebody who was working for DoD making $130,000 a 
year, then they retire, and if the government pays a pension, 
say, of $100,000 a year, and they work for a contractor and for 
the government to hire that contractor back, it is $200,000 a 
year. Now the government is paying the $200,000 plus the 
pension, $300,000 for somebody that used to cost them $130,000.
    So it hasn't been a good deal. But I don't know how to 
scale that up, to be honest with you, and say how much of that 
we possibly could save.
    Ms. Kaptur. Mr. Chairman, I just want to say that is my 
major concern. With the importance of the Defense budget as a 
percent of the entire Federal budget, it seems to me that we 
should be asking DoD to help get us these numbers so that we 
can make better choices here.
    Mr. Murtha. Well, if you remember, Ms. Kaptur, he said it 
would probably take 2 years to find out where the contractors 
are, what we need.
    I remember in Iraq we couldn't find out how many for months 
and months. The Under Secretary couldn't figure it out. No, 
this is a real problem.
    I don't even know where the 44,000 came from, because you 
have got people who are service contractors, who, you know, 
deliver, cut grass and things like that, versus somebody that 
is highly skilled. So I guess it is an average between each of 
them.
    Mr. Francis. Right. It is.
    Ms. Kaptur. Thank you.

                        UNDEFINITIZED CONTRACTS

    Mr. Rothman. Thank you, Mr. Chairman. Thank you for your 
service, gentlemen. Thank you for being here.
    Undefinitized contracts. This memo says that as of October 
2009, the DoD had 429 contracts that were undefinitized. Do you 
think that is an appropriate number? Do you think the DoD 
overutilizes these kinds of contracts?
    Mr. Francis. I will ask Mr. Woods.
    Mr. Woods. First of all, just for everyone's benefit, an 
undefinitized contract action is merely a technique, a 
mechanism, that an agency is permitted to use, not just DoD, 
but across government, when they are not in a position to fully 
define all of the terms and conditions of a contract but they 
need to move forward anyway. So they will enter into an 
agreement with the contractor without all of the details, 
including price, fully spelled out.
    Mr. Rothman. Do you think, though, that given all of the 
disappointments that everyone acknowledges, in terms of cost 
overruns and time delays, that undefinitized contracts with 
regards to DoD have been utilized properly, excessively, 
underutilized?
    Mr. Woods. What we have found is that based on the controls 
that are in place, they are required by regulation to 
definitize those undefinitized actions within 180 days. We find 
very, very often they fail to measure up to that. They are 
permitted to----
    Mr. Murtha. How can we assure that it falls within the 180 
days?
    Mr. Woods. How can we be sure?
    Mr. Murtha. Yes, how can this Committee be sure?
    Mr. Woods. Not sure. We can think about that and give you 
some guidance if you wish. But that requirement has been in 
place for a while. And every time we have looked at their use 
of undefinitized contract actions we consistently find that 
they fail to hit that.

                 COST GROWTH OF PRESIDENTIAL HELICOPTER

    Mr. Rothman. I won't pursue that because my Chairman has 
just asked the definitive question, and frankly we need you to 
come up with the answer.
    Also following up with something that the Chairman alluded 
to earlier, just for my edification, the explosion of costs on 
the President's helicopter, the President's future helicopter. 
How does something like that happen? How does it spin so wildly 
out of control?
    Mr. Francis. No pun intended.
    Mr. Rothman. No pun intended. We hope ours would spin under 
control, though.
    Mr. Francis. I think it goes back to signing a contract 
when you don't know enough. So I don't think the requirements 
and cost had any realism brought to them. So when we started 
the program, we had really no legitimate idea of how much that 
was going to cost. When the contractor got into it----
    Mr. Rothman. I apologize for interrupting because I know my 
time is limited. But are we going to make sure that doesn't 
happen again?
    Mr. Francis. Yes. There have been actions taken so that 
doesn't happen again, in terms of putting more people in place, 
more processes, the acquisition reform. But it is not a 
guarantee. So, again, when it comes here, you have to be 
looking at these things to see if they measure up to those 
principles.
    Mr. Rothman. Okay. But the lesson learned would be we don't 
allow carte blanche to the designers and the contractors to 
come up with something and guarantee we are going to pay for 
it.
    Mr. Francis. Right. There is a place to do that, and that 
is in science and technology. So you expect experimentation, 
discovery. Do it there. But when we go to a contract for a 
program, we need confidence.

                          ACQUISITION OF UAVS

    Mr. Rothman. Finally, real fast, UAVs and Predators. Is 
there any reason why any theater should not have as many 
Predators and UAVs at they want after all these years?
    Mr. Francis. I think there is no operational reason they 
shouldn't, other than you have to manage the airspace.
    Mr. Rothman. But in terms of acquisition?
    Mr. Francis. In terms of numbers, I think we should be 
giving the warfighter what they need. Part of the problem is 
there are now three variants of that aircraft, and the services 
are all pursuing different ones. DOD could do something more 
consolidated and get more aircraft out there for less money.
    Mr. Murtha. The time of the gentleman has expired.
    Mr. Dicks.

                         SOLE-SOURCE CONTRACTS

    Mr. Dicks. Let me ask you about sole-source contracts. Are 
we supposed to have these in here today? They would have caught 
me at the door--how often or how seldom do we use sole-source 
contracts?
    Mr. Woods. I don't have a precise number on that. It is a 
permitted technique. The overwhelming number of contract 
actions and contract dollars are awarded competitively every 
year. But there are circumstances where for a variety of 
reasons, urgency or other reasons, the Congress has provided in 
legislation that sole source contracts are permitted.
    Mr. Murtha. What is the largest sole-source contract ever 
awarded?
    Mr. Woods. I am not sure I know that, sir.
    Mr. Murtha. Will you find out for us?
    Mr. Francis. Okay, we will do that.
    [The information follows:]

    Response to Mr. Dicks' question: How often or how seldom does the 
government use sole source contracts?
    According to information available in the Federal Procurement Data 
System-Next Generation and USA Spending.gov, about 68 percent of 
obligations were under contracts awarded competitively in fiscal year 
2009. Of this amount, about 10 percent of obligations were under 
contracts awarded competitively where only one bid was received.
    Response to Mr. Murtha's question: What is the largest sole source-
contract?
    According to fiscal year 2008 obligations reported in the Federal 
Procurement Data System-Next Generation (FPDS-NG), the largest non-
competitive contract was awarded by the Army's Tank and Automotive 
Command (TACOM) to AM General for HMMWVs in November 2000. $4.2 billion 
was obligated under this contract in fiscal year 2008, and $14.3 
billion has been obligated over the life of the contract, based on the 
latest available information in FPDS-NG.

    Mr. Dicks. You could have a sole-source contract and still 
do a should-cost analysis so that the government is protected.
    Mr. Woods. Absolutely. And they are required to do that. If 
they don't have market forces at work that are providing some 
assurance that the price you pay is a reasonable price, they 
are required in most instances to get cost or pricing data and 
to do a very, very detailed analysis of what it is costing the 
contractor to produce the item, so that the government has some 
assurance that what it is paying is a fair price.
    Mr. Dicks. The contractor can help in this regard by 
allowing transparency into their cost structure, right?
    Mr. Woods. Not only can they help, they are required to 
help. They are required to produce that data for the 
government's analysis.

                            PROGRAM MANAGERS

    Mr. Dicks. I won't go any further. Just laying the 
groundwork, Mr. Chairman.
    Now, we have been doing this for many years, okay, having 
these hearings. I can remember the retired generals of the Air 
Force had their acquisition. Doesn't it get down to people, the 
quality of the program managers? I mean, you almost--every good 
program, you finally have had a good program manager; there has 
been good people at the contractor, they have had good 
management of the subcontractors.
    Then when you see a program that fails, normally the 
government had bad oversight and the program managers for the 
companies weren't very good and the subcontractors fail. I 
think a lot of this gets down to the quality of the people.
    And when we kind of diminish the value of people who were--
I can remember the Chairman of the House Armed Services 
Committee, on the floor of the House, calling these, the 
acquisition people, ``shoppers.'' He said these people are 
nothing but shoppers, and went ahead and cut 50 percent of the 
people out of the acquisition program in the 1990s.
    You know, to me, now we are still trying to recover from 
that, to get the people back, make sure they are well trained. 
What do you think? It says a lot about the people and the 
training of these people and the experience of the people that 
are running these individual programs.
    Mr. Francis. I would agree completely. In fact, even though 
GA is a critic and we find a lot of fault with programs, when 
we get in the program offices we generally find the people are 
outstanding.
    So I think you are exactly right. The people have to be 
high quality.
    And the second thing, Mr. Dicks, is we have to put them in 
a position to succeed. So a lot of times we take excellent 
people and we deal them a bad hand. So I don't think there was 
any program manager who could have made the Presidential 
helicopter succeed. Yet we put great people in those positions, 
and my concern in the long run is we grind them up, and you 
wonder why they would stay in the position.
    Mr. Woods. Could I add one thing to that? You mention 
quality o the people and that is absolutely correct; but it is 
also people with tenure. And what we found is that even good 
people are being moved around at a rate----
    Mr. Murtha. We are going to have to recess for about 15 
minutes. They have got 80 people that haven't voted.
    [Recess.]

                             COST ESTIMATES

    Mr. Dicks [presiding]. The Committee will come to order. 
The Committee will resume. On these cost estimates that we were 
talking about, you said that they are required to do these. 
This is done by the CAIG, the Cost Analysis Improvement Group, 
is that what they call it.
    Mr. Francis. Yes.
    Mr. Dicks. But is this just on the major weapons systems or 
is it on everything?
    Mr. Francis. There are independent cost estimates done on 
all weapons systems, but only the really big ones are done 
independently by the Cost Analysis Improvement Group. The other 
ones are done by the services, so the Army would have its own 
independent cost estimate, for example.
    Mr. Dicks. How accurate have these things been over the 
years?
    Mr. Francis. Well, the independent estimates are more 
accurate than the program office estimate, but we find they all 
underestimate by a significant amount. So even if every cost 
estimate aligned with the CAIG estimate, we would still have 
overruns.

                             COST OVERRUNS

    Mr. Dicks. And what are the major causes of the overruns?
    Mr. Francis. I would say, Mr. Dicks, some of the things 
that we talked about in the beginning: not knowing enough about 
the acquisition, not knowing enough about the technology and 
the systems engineering to make an informed cost estimate. And 
when you don't have the information, then you are more or less 
susceptible to optimistic assumptions. So I don't think it is 
discoveries that were unanticipated that occurred suddenly in 
the program. I think it is reality playing out.
    Mr. Dicks. A lot of times, do the departments just 
understate, knowing full well they only have so much money to 
go into the budget, and they are trying to make the budget fit 
with all the various systems? It is wishful thinking. It has to 
be, right? Isn't that part of this problem?
    Mr. Francis. I remember years ago talking to John Betti, 
who was one of the first undersecretaries of AT&L. And he said, 
in his view, programs didn't necessarily know a number was 
going to be X and then subtract from it. But he said many cost 
estimates are based on the hope of hitting seven home runs in 
the bottom of the ninth, very unlikely. But that pressure is 
there. And what we find is our budget process makes amends for 
that once a program is underway.
    Now, we have seen a couple of examples, Armed 
Reconnaissance Helicopter is one, where the unit cost was 
established by taking what the money was in the budget and 
dividing it by the number of units, and that is what we said 
the unit cost was. We have seen some instances of that.
    Mr. Dicks. Mr. Bishop.

             PAST PERFORMANCE INFORMATION RETRIEVAL SYSTEM

    Mr. Bishop. Thank you. I apologize. Has the question been 
asked about the Past Performance Information Retrieval System?
    Mr. Francis. No, it hasn't.
    Mr. Woods. Not today.
    Mr. Bishop. The history of prior performance obviously 
helps to inform contract award decisions, and that information 
is generally made available through the Past Performance 
Information Retrieval System. And your reviews of past 
solicitations indicate that factors other than past 
performance, such as technical approach or cost were the 
primary factors in awarding the contract, in making the 
decisions. And I understand that the doubts about the accuracy 
of the historical information and the difficulties in linking 
that past performance to specific new acquisitions causes the 
agencies to be reluctant to rely too much on past performance.
    So what I would like to know is what your assessment is of 
the utilization of that Past Performance Information Retrieval 
System and what actions DoD can take to improve the utility of 
it in the selection process, and whether or not funding is a 
function of that, if lack of discipline is a function of it. 
And how do you assure that contracting officers and managers 
enter the contract performance information correctly and in a 
timely manner into that information system?
    Mr. Woods. Sure. Let me respond to that if I can. We issued 
a report in April of last year that touched on a number of the 
issues that you've talked about. It is extremely important to 
have a good past performance information system because when we 
don't have a system that contracting officers can rely on, they 
are not going to use past performance as a discriminator in 
picking contractors. And what we were told is that the hallmark 
of a good past performance system is it has to be documented, 
the past performance has to be relevant, and the information 
has to be reliable. And in all three of those areas there were 
shortcomings, shortfalls in that information which led 
contracting officers to downplay the significance of past 
performance.
    Of the causes that you mentioned, I would say lack of 
discipline is critical. There was a requirement for documenting 
past performance, where contracting officers were required to 
go into the system after the completion of a contract and make 
judgments and assessments about how well the contractor did. 
And we found time after time those assessments were simply not 
done, particularly, when contractors performed on orders issued 
under the General Services Administration schedule program, 
which is for commodities and for commercial items and that sort 
of thing. The contractor officers were failing to enter that 
information into the system. There has to be more discipline in 
the system in order for it to work.
    Mr. Bishop. How do you assure that, that discipline?
    Mr. Woods. That has been an issue across the board. In some 
cases, it is workload where contracting officers need to get on 
to the next award so that wrapping up the paperwork on the 
prior contract doesn't have the same priority as moving on to 
the next award. We have got to find a way to instill that 
discipline into everybody in the system.
    Mr. Bishop. You think, it is workload, then that has to 
work do with the acquisition workforce and the contract 
officers, the number of them, and the additional 10- to 11,000 
that we are trying to put in place.
    Mr. Woods. That would help. It would help to have more 
people to share the ever increasing workload that we have seen. 
If we had more people doing those functions that would go a 
long way to easing some of that workload burden.
    Mr. Bishop. Do we have contractors performing those 
functions now?
    Mr. Woods. We have contractors that are supporting the 
acquisition function.
    Mr. Bishop. No, no, I mean doing the past performance 
evaluations.
    Mr. Woods. We didn't see contractors actually doing those 
assessments, but we saw contractors that were heavily engaged 
in various support functions at contract offices, and that 
caused us some concern.
    Mr. Bishop. So obviously, if we reduce the number of 
contractors and had that in-sourced, we could save a tremendous 
amount of money?
    Mr. Woods. Well, if we had more people doing the 
acquisition function on the government side and a more 
manageable workload, we would see greater attention paid to 
some of these details like completing the past performance 
information system assessments.
    Mr. Bishop. By the way, with regard to downsizing, making 
government smaller, that philosophy, when it comes to 
contracting and acquisition, in the Department of Defense, that 
has a reverse benefit in terms of not helping us efficiently 
and effectively manage the taxpayers' dollars.
    Mr. Woods. There were definitely some down sides to that 
downsizing of the workforce. You are right.
    Mr. Bishop. Thank you, Mr. Chairman.
    Mr. Dicks. Mr. Hinchey.

                           OMB CIRCULAR A-76

    Mr. Hinchey. Thank you, Mr. Chairman. As you know, there 
has been a lot of concern here about the Department of Defense 
use of the OMB circular A-76 process. And thanks to the 
chairman's leadership, we were able to include in the fiscal 
year 2010 defense appropriations bill a provision which 
effectively suspended the A-76 studies that started during the 
previous administration. So it is my understanding that now, 
all but two of those A-76 studies have been eliminated, been 
cancelled except for two that remain in the Navy. And I was 
just wondering if you could tell us what would be the process 
of those two that are remaining. Are they going to be 
cancelled? Does the Navy intend to finish those A-76 operations 
at some time in the near future, or do we know?
    Mr. Woods. We certainly can't speak to the Navy's intention 
with respect to those two. A couple of points though. One is, 
we have looked at that A-76 process over the course of many 
years, and we have identified a number of problems with how 
that is working. One of the problems is the lack of good data 
about the system. For example, you mentioned two remaining 
studies. We recently went into that system and found that there 
were actually seven that were in progress. The two that you 
mentioned in the Navy were included. But whether it is two or 
whether it is seven, DoD is going to have to make some 
decisions about what to do with those. Anecdotally, we can tell 
you that when we talked to the folks over at DoD, they haven't 
quite figured that one out yet.
    As you point out, there is legislation in the 
appropriations bill, and there also are various provisions in 
the defense authorization bill that speak to the issue about 
completing ongoing studies within a set period of time, about 
providing reports to the Congress on how they plan to approach 
the issue of outsourcing as well as in-sourcing. And frankly, 
they are still trying to match up all of those requirements and 
figure out where they stand with respect to specific ongoing 
studies.
    Mr. Hinchey. So you think that is the situation. They are 
not really certain where they are or what they want to do.
    Mr. Woods. Just anecdotally, from our discussion, they tell 
us that they are still looking at and figuring out what to do.
    Mr. Hinchey. I can understand that. The seven that you 
said, where are they?
    Mr. Woods. I am not sure of the exact locations. Three of 
them were in the Army, two were Navy. And this is a system 
called the defense commercial activities management information 
system, and it is available to folks that need to manage this 
process.
    Mr. Hinchey. Okay. On this issue a little bit further, the 
GAO issued two reports back in 2008, one for the Forest 
Service, one for the Labor Department. They were highly 
critical of the A-76 process, essentially saying that the costs 
of conducting the A-76 studies were understated, and that the 
savings that were alleged were overstated. GAO also offered a 
series of recommendations for reforming that A-76 process. So 
can you tell us, is it correct that the A-76 problems GAO 
identified and the recommendations that were put forth for 
reforms, that was offered by GAO are relevant for other 
agencies, including the Department of Defense? Or only the 
Department of Defense?
    Mr. Woods. The recommendations that we made in the two 
instances that you cited were specific to those particular 
agencies. But the problems that we found are by no means 
confined to those two agencies, and DoD is probably one of the 
best examples. They have the most experience of any other 
agency in conducting A-76 studies. They have been at it longer. 
Most of our work, frankly, over the course of the last couple 
of decades looking at the implementation of the A-76 process 
has been at the Department of Defense. So there is no question 
that they have lots of experience, but we have also identified 
lots of issues there as well.
    Mr. Hinchey. If the Department of Defense does, in fact, 
try to jump start those two A-76 studies after this suspension 
expires, if they do that, try to jump start that after the 
suspension expires, is there any indication that the Department 
of Defense will have corrected the problems that the GAO 
identified and that they will have begun at least to implement 
the reforms that were recommended by GAO prior to the award 
decisions?
    Mr. Woods. The suspensions that you are referring to I 
don't think were as a result of GAO recommendations. They were 
as a result of the legislation that the Congress enacted that 
told them they have to suspend A-76 activity. So it wasn't that 
we identified specific problems that needed to be corrected. It 
was that there was a prohibition on moving forward.
    Mr. Hinchey. It was the overall circumstances of that 
situation that were dealt with basically.
    Mr. Woods. Well, there are a couple of issues at play. One 
is the departmentwide bar on moving forward with A-76 studies. 
But there has also been some isolated instances where Mike and 
his team have identified flaws in specific studies, and made 
recommendations on how best to move forward, if they can, with 
those.
    Mr. Hinchey. What is your assessment, basically of the 
future of this? What is likely to happen? Do you have any idea?
    Mr. Woods. Well, Congress has been pretty direct over the 
course of the last couple of years, whether it is the 
authorizers or the appropriators, in making it very difficult 
for agencies to move forward, not just at defense but at 
agencies across the Federal Government.
    Mr. Hinchey. Okay. Well, thank you very much.
    Mr. Dicks. Mr. Frelinghuysen.

                        HISTORY OF A-76 PROCESS

    Mr. Frelinghuysen. A-76 has been around for a long time. 
How long has it been around?
    Mr. Woods. I believe since the mid 50s.
    Mr. Frelinghuysen. And how long have you been weighing in 
on the A-76 process? And I am sure it is since not 1950, but--
--
    Mr. Woods. Well, my memory does not go back that far, but 
probably in the 1960s and 1970s, DoD was moving forward for 
example, at the depots. The workload between the in-house depot 
workforce and contractors has always been an issue about what 
the right allocation is of workforce, and as long as that 
debate has been going on we have been in there providing 
oversight.
    Mr. Frelinghuysen. Part of it was to make sure that the 
work force was concentrating on what was actually important.
    Mr. Woods. Absolutely.
    Mr. Frelinghuysen. And somehow we got away from that. I 
know we are not going back to A-76 because people want to hire 
up people and promises have been made. But overall when it was 
initially rolled out and I have been around in government for a 
long time, people saw some pretty positive effects from it. So 
it is not an all-negative history. Would you agree?
    Mr. Woods. It is not all negative history. And, in fact, 
the Congress asked GAO to chair a panel looking at the A-76 
process back in 2001, and GAO spent a year doing that. We 
pulled in folks from all sides of the debate, from the unions, 
from the administration, from industry, and that is the story 
that we heard, that it is not all negative. There are positive 
aspects to that. It does force the government to sharpen its 
pencil and it forces contractors to sharpen their pencil when 
they have to compete for the work.
    Mr. Frelinghuysen. Well, that is sort of what the GAO is 
all about isn't it, sharpening the pencil, taking a look?
    Mr. Woods. We want to see the best bang for the buck, yes, 
sir.

         SKILL SETS NEEDED IN THE FEDERAL ACQUISITION WORKFORCE

    Mr. Frelinghuysen. Mr. Francis, you said earlier that we 
don't know what gaps there are. You referred to, either in 
response to Chairman Murtha or maybe in your general comments 
in Department of Defense work force. Could you sort of 
elaborate a little more on that.
    Mr. Francis. Sure. We have done some work to show that the 
Department of Defense does not know what skill sets it really 
needs in its acquisition workforce. And our understanding right 
now of the in-sourcing of the 20,000 people that will take 
place through 2015 is the department is inventorying what it 
has, looking at its current skill sets, where it has the work--
--
    Mr. Frelinghuysen. Are they actually doing it or have they 
outsourced a group to do it? I mean, I don't mean to be totally 
facetious here, but in reality, sometimes people are so busy 
over there doing what they are doing relative to the war they 
might well turn it over to somebody to do it.
    Mr. Francis. I don't know but I will hope that----
    Mr. Frelinghuysen. Might be good to get an answer from you 
on that.
    Mr. Francis. Yes. Okay.
    Mr. Frelinghuysen. So the gap issue.
    Mr. Francis. Yes. So they are working first on what they 
have now. The hard part is the normative, where do they need to 
be. And they haven't identified the skill sets they really need 
to have. So you need both pieces, where we are and what we need 
to be to identify those gaps. They are not there.
    Mr. Frelinghuysen. So you have gaps. We had somebody 
testify in here that it is difficult to find young men and 
women who are willing to go into, I won't say your line of 
work, but, you know, either to serve the military or to serve 
the military in a civilian capacity because they can do a lot 
better working at some other job. So they have not identified 
the skill sets they need, you are saying?
    Mr. Francis. Yes, that is correct.

         TIME LINE FOR HIRING ADDITIONAL ACQUISITION PERSONNEL

    Mr. Frelinghuysen. And so what would you anticipate would 
be the time period for them to be able to do that? Assuming 
they can incentivize these people to, shall we say, join up.
    Mr. Francis. Yes, they say they are going to bring the 
people in by 2015. I am not sure what a good number is, but 
you'd like to think they'd want to start doing that as soon as 
possible. So I would say, a reasonable period would be within a 
year they ought to be able to start identifying where they 
really need people. And speaking from experience at our own 
agency, we are getting a lot of people applying for positions. 
I would say 200 to one. For every vacancy there might be 200 
applications. So I actually think very positively about the 
government's ability to attract good people.
    Mr. Frelinghuysen. This is like our intelligence agencies 
who are now hearing because the economy is so poor so many 
people are out of work that they are getting a flood of 
applications. You don't think there will be any deficits in 
this area.
    Mr. Francis. I think the supply of talent is pretty good. 
And I think the economy is one thing, but we noticed in our 
agency, post-9/11, a lot more people want to do public service. 
So my prognostication would be optimistic.

                          WEB SITE FOR HIRING

    Mr. Dicks. Would the gentleman yield on that point? I 
happened to be involved in something in my State, and it was a 
company working with Lockheed, and one of the ways they hire 
these people is through a Web site. Are you familiar with this? 
The Defense Department now I am talking about.
    Mr.  Francis. Yes.
    Mr. Dicks. So if they get into a competition on who's going 
to do the website, how expensive it is, if they don't get this 
Web site set up, nobody gets hired. I mean, I think there is a 
huge number of jobs, probably in the acquisition area that are 
just not, nothing's happening. Do you have any evidence to 
that?
    Mr. Francis. We have got anecdotal evidence on how 
difficult it is, if you will, to try to work through a Web site 
like that and then how quickly the government can respond and 
going through applications and then setting up interviews. So 
the government has technically been slower in doing that than 
private industry.
    Mr. Dicks. And just so I can get another point on the A-76.
    Mr. Frelinghuysen. And of course we need to know who they 
are hiring up. I mean, obviously you just can't hire anybody 
up. You can get people planted in there.
    Mr. Dicks. But the situation here was that the company that 
was going to do the website got into a big dispute with OPM, 
the Office of Personnel Management and the Department, and it 
didn't happen. So instead of being set up and starting to bring 
people in for interviews, it went on for a year or so. So I am 
worried about the way they are handling this. You would think 
that the Defense Department would bring these people in and 
interview them. But instead they do it through a Web site. And 
if the website doesn't get set up you don't get the people.

                         A-76 POST AWARD AUDIT

    So that is worrisome to me. On the A-76, I agree with what 
has been said earlier, that there was a positive aspect of 
this. Now, way back, maybe 20 years ago, I put language in that 
said you would have to have a post audit on A-76. So if 
something was contracted out, then, a year or so afterwards, 
you'd go back and audit again when they started to renew these 
things to see if, in fact, you kept the prices down or did they 
start to escalate.
    And somehow this thing got knocked out at some point in the 
process. But I think, on the A-76, something like that, where 
you have a post contract audit to see whether, in fact, you 
achieved the savings you wanted or not. If you are going to do 
A-76 you've got to have something like that or else they'll bid 
low, get the work away from the government, and then they'll 
start increasing the cost of this in the out years. I yield 
back.
    Mr. Frelinghuysen. I yield back.
    Mr. Dicks. Mr. Moran.

                           OUTSOURCING QUOTAS

    Mr. Moran. Norm, you bring up a history that I think many 
of us have been involved in. One of the things that happened 
during the Bush administration, it wasn't just DoD, it was 
Interior Department, you will recall, that there were quotas 
given to managers, and that they would get a green light if 
they outsourced a certain percentage of their work force. And 
then they'd get a yellow light or a red light if they didn't 
and so on. The problem was it was a cookie cutter approach. 
Some missions are more inherently governmental than others. But 
there was this attitude that a certain percentage of your work 
force, whatever, that whatever skills and whatever the mission 
is, we want you to contract out. And so it was done in kind of 
a willy nilly fashion, it appeared. And so the Congress, I 
think it was a bipartisan vote, just put it into it. Now, we 
are in a situation where outsourcing, contracting out, we 
think, has gone too far in many agencies, particularly defense, 
and so now we want to do some more in-sourcing.

               HIRING CONTRACTORS TO BE FEDERAL EMPLOYEES

    Unfortunately, some of the initial reports I am getting is 
that, again, in some cases it is being done in an arbitrary 
fashion and there are some contracts, for example, where the 
contractor has invested a great deal of capital, has trained 
their personnel, has acquired quite a fair amount of 
experience, and has been judged to have been effective in 
carrying out the mission, but the program manager, wanting to 
comply with this new approach, goes in, hires the people that 
the contractor has trained, pulls them back into the 
government, pays them as much as they can, of course, but the 
employees have no option because they are told we are going to 
close down this program; we are bringing it in house. If you 
want to keep your job, you become a Federal employee.
    And we are bringing you on. So they bring on almost 
everybody, but you know, the top manager or whoever is the--
representing the contractor. That doesn't seem fair either. And 
it doesn't recognize the investment that some of the better 
contractors have clearly made in meeting the mission of the 
agency.
    So I want to get your reaction to that. Is this just 
anecdotal, or does this seem to also be taking place from your 
perspective and looking at the contracting community?
    Mr. Francis. Well, Mr. Moran, I haven't heard of that 
particular instance where the government might be taking 
employees back from a contractor.
    Mr. Moran. I have got dozens of examples that I have been 
told.
    Mr. Francis. Okay. But you raise a very good point, because 
what we have been talking about the past 20 years is the 
pendulum swinging one way to out source. We don't just want the 
pendulum to swing back to in source. It has to be thoughtful, 
and I think the guiding principle has to be what is in the best 
interests of the government. So it can't just be a numbers 
game. So the instances that you describe, these are things the 
government has to be thoughtful about because just taking what 
you said, you raised the question, is it in the government's 
best interest to reverse that?
    Mr. Moran. Yeah. Now, let me ask you----
    Mr. Dicks. Would you yield just for a second.
    Mr. Moran. Yeah, sure.
    Mr. Dicks. The thing that worries me is that the government 
could abuse its power here. This is what I saw in this website 
deal. This company, a small little company from Tacoma, 
Washington, spent a couple of million dollars getting ready to 
do this Web site, to hire, to bring all these people in. And 
they had already done it for the forest service down in 
Albuquerque, New Mexico and done it very successfully. But they 
got into a big to-do with the Federal agencies, and all of a 
sudden they cancelled. They just cancelled it. And so nobody 
gets hired. Nothing happens, and the government, I think, has 
abused this company. And I don't know what their recourse is, 
maybe a lawsuit or something. But again, we are not getting the 
people hired, we are not getting the work done.
    So I am concerned about this too and I am sympathetic with 
what the gentleman's saying because I had this example and it 
was very painful for this small company.
    Mr. Moran. And lawsuits take forever and the government can 
outlast any private contractor.
    Mr. Dicks. Right.

                          STUDY OF INSOURCING

    Mr. Moran. Let me now ask you about the study that DOD has 
done, maybe it is GAO has done it of DOD, in terms of the 
implementation of this in-sourcing initiative. I understand 
that there is a study that is ready. I don't know whether it is 
finalized. I don't think we have seen it on the subcommittee, 
but I would like to know what the status of it is and what is 
the content of it.
    Mr. Woods. The latest that we have seen, sir, is a December 
2009 report.
    Mr. Moran. That is pretty timely.
    Mr. Woods. It is a report by DOD. The House of 
Representatives required DOD to report on the status of their 
in-sourcing initiatives. We have seen that report. We haven't 
thoroughly analyzed all of its contents, but we are trying to 
stay as close as we can to that issue.
    Mr. Moran. Well, do you know, since you have seen it, what 
does it say just roughly?
    Mr. Woods. What I drew from it is they are trying to focus 
first on those positions that are inherently governmental, that 
never should have been contracted out in the first place. 
Secondly, they want to focus on positions that may not be in 
the inherently governmental arena, but are, nevertheless, 
critically important to keep in house to enable the government 
to have capacity to carry out its functions. And then thirdly, 
cost, to focus on areas where the government could save money 
by in-sourcing certain positions.
    Mr. Moran. Does our staff have a copy of that?
    [Clerk's note.--The report is printed at the end of the 
hearing.]
    Mr. Woods. We will certainly get that to the Committee. We 
will get that in PDF format and send it up.
    Mr. Francis. It has got some of our writing on it, is that 
okay?

                        CONTRACT AWARD PROTESTS

    Mr. Moran. All the better. As long as it is not profane or 
anything. One other question, Mr. Chair, if I could. One of the 
things that has troubled me, and it has been brought to my 
attention as well in this general area, is that when a smaller 
contractor wins a contract on the basis of, you know, quality, 
or oftentimes innovation, using new technology, they can do it 
less expensively, and they claim more effectively, they win the 
contract.
    If they win it against a larger contractor who was either 
bidding or has been the incumbent bidder, that contractor, if 
they are large enough, they have a whole division of 
litigators, so they automatically protest, knowing that the 
smaller contractor can only go so far in terms of litigating 
these protests and, oftentimes, will have to drop out, and 
then, in some cases, the larger contractors just bought them up 
or, you know, they will subcontract with you, we keep the 
profit, you do the work. And this is the best you can get. I 
know that has happened. Are there many examples of that, or is 
this just an aberration that I have seen more than once?
    Mr. Golden. From my standpoint in the protest area, we do 
get incumbents who protest to hold onto the contract.
    Mr. Moran. There are some that protest automatically.
    Mr. Golden. I can't say that. If you look through our 
database you'd see names of a wide variety. You wouldn't see 
that many repeats. There are companies that you would see 
repeating. But I don't think it is clear cut that that is going 
on, although I have to admit I have heard that once or twice as 
well, that a larger company just files a protest and they are 
hoping the small businesses----
    Mr. Moran. Well, there are some who are notorious among the 
industry.
    Mr. Golden. And the small businesses obviously don't have 
the same resources, but, on the other hand, the small 
businesses do have a tot of preferences, set asides, rules that 
help protect them and safeguard them in the Federal procurement 
system as well, which does help. But from our standpoint and 
obviously, from a protest standpoint, we haven't studied this. 
It is not something we necessarily know about. But I think 
ultimately, companies protest because it is in their interest, 
but they are also concerned about suing the customer. And it is 
something they think about before they protest because it does 
have implications ultimately on their relationship with the 
agencies, and so I think there's some balance. And I think the 
system is rational in that sense, at least I hope so.
    Mr. Moran. Okay.
    Mr. Dicks. Any other questions?
    Mr. Hinchey. Just one brief one.
    Mr. Dicks. Mr. Hinchey.

                   INCREASE IN CONTRACTS FOR SERVICES

    Mr. Hinchey. Just about 10 months ago, you did a report 
about goods and services and the amount of money that was being 
spent on goods and services and how, since 2001 to then, it had 
gone up by almost $400 billion. I think the number was $388 
billion. Was there an analysis as to what was causing that? Was 
it regarded as being significant? Was there any indication that 
that wasn't the only area where that cost had gone up so 
substantially? Were there other indications of anything similar 
to that?
    Mr. Woods. The biggest growth area we are seeing is 
services.
    Mr. Hinchey. Goods and services?
    Mr. Woods. The numbers that we always cite are total goods 
and services. But the differences that we are seeing over the 
course of 10, 15 years is the significant increase in services. 
That is where we are seeing most of the growth.
    Mr. Hinchey. Significant increase in services?
    Mr. Woods. Absolutely, sir. It used to be that not many 
years ago the government bought mostly hardware items and not 
services, and now we have seen that trend reverse where well 
over 60 percent of what the government buys is services and the 
rest are hardware items.

                    INCREASE IN CONTRACTING WORKLOAD

    Mr. Hinchey. The report said the number of government 
personnel remained the same in spite of the fact of that 
increase.
    Mr. Woods. That is right. And that causes a couple of 
problems. Number one is we have seen the number of contract 
actions, just the workload that they have to handle go up in 
the face of a relatively stable workforce. But secondly, the 
complexity of those acquisitions has increased because buying 
services is more difficult than buying hardware. On hardware 
items you've got a list of specifications, and it is relatively 
easy, or at least easier than buying services. Where you are 
trying to define the outcome that you are trying to achieve, to 
establish metrics for how you are going to measure the 
contractor's performance, it is much more difficult than buying 
goods.
    Mr. Francis. I am trying to remember which year it was, but 
in that data, at some point in the past few years, the amount 
of money we spent on services began to exceed what we spent on 
weapons. So the Department's major acquisitions are services.
    Mr. Hinchey. Well, that is interesting. I, mean, it is 
interesting that the amount of money that is being spent on it 
has gone up so much and what those services are would be an 
interesting piece of information. Why is that cost going up so 
much?
    Mr. Francis. Well, a fair amount of it is to build the 
capacity we needed for the near term operations in Iraq and 
Afghanistan. So a lot of that has been subcontracted. I think 
there's been a large growth in the LOGCAP contract. So a lot 
has been to augment the government's capacity to handle current 
operations.

            HIRING CONTRACTOR PERSONNEL AS FEDERAL EMPLOYEES

    Mr. Hinchey. Is there some progress being made to convert 
the kind of contractor personnel to government service?
    Mr. Woods. Well, there is the in-sourcing initiative that 
we have talked about where the Congress has directed agencies 
to, first of all, do inventories of their contractors to know 
what the contractor workforce is; and then secondly, to use 
those inventories to make the kinds of decisions you are 
talking about, of how many of those, if any, can we bring back 
in house.
    Mr. Hinchey. Okay. Thank you very much.
    Mr. Dicks. Mr. Frelinghuysen? All right. The Committee will 
stand adjourned. And we appreciate your testimony. We 
appreciate your good work.
    [Clerk's note.--Questions submitted by Mr. Murtha and the 
answers thereto follow:]

                        Undefinitized Contracts

    Question. To meet urgent needs, the Department of Defense can 
authorize contractors to begin work and incur costs before reaching a 
final agreement on the contract terms and conditions--known as 
undefinitized contract actions (UCAs), or letter contracts. As of 
October 2009, the Department of Defense had 429 contracts that were 
undefinitized. This type of contracting may not be in the best 
interests of the taxpayer since the contractors lack incentives to 
control costs while the contract is being definitized.
     In your experience, does the benefit of starting work 
sooner outweigh the loss of control experienced in a UCA?
    Answer. In some circumstances, a UCA is needed to meet an urgent 
need; in those cases, the benefits of starting work sooner may be in 
DOD's best interest (if appropriate attention is paid to definitizing 
as soon as practicable). However, based on some of the contract actions 
we have reviewed, it is not clear that DoD is using UCAs only in urgent 
situations. In some cases, UCAs may have been avoided with better 
acquisition planning. Further, we found that work is not always done 
sooner, as had been anticipated under the justification for a UCA. For 
example, in one case we reviewed, during the 13-month undefinitized 
period the contractor incurred costs equal to 2.4 percent of the total 
not-to-exceed amount, compared to the 50 percent obligated at award. In 
another case, permission was granted to obligate 100 percent of the 
not-to-exceed amount at award, however the contractor incurred costs of 
only slightly more than 1 percent of the not-to-exceed amount during 
the 11-month undefinitized period.
    Question.
     Does the shortage of contracting officers within the DoD 
impact the Department's ability to definitize UCAs?
    Answers. Contracting officers have pointed to numerous reasons for 
delays in definitization, and shortages in the acquisition work force 
are certainly among them. Contracting officers cite their heavy 
workloads, stating that once the UCA is awarded, they must turn to 
other pressing needs rather than going through the definitization 
process. They have also cited shortfalls in the government's ability to 
perform price analysis of contractor proposals. Other reasons cited for 
delays in definitizing UCAs include
         untimely or inadequate contractor proposals,
         the program offices' changing requirements (either 
        because the requirement was not adequately described when the 
        UCA was awarded or was subsequently changed after award), which 
        leads contractors to revise their proposals, and
         delays in obtaining necessary audits of contractors' 
        proposed pricing structure.
    Question.
     For cost type contracts, does DOD have a policy that 
encourages contracting officers to reduce fees when UCAs are not 
definitized in a timely manner, and thus unknowns become known and risk 
is lessened?
    Answer. DoD does have a policy requiring contracting officers to 
consider any reduced cost risk to the contractor for costs incurred 
during contractor performance before negotiating the final price. While 
there may be a requirement to consider reduced costs risks and make an 
adjustment in the profit or fee, if necessary, GAO recently reported 
that in about half the definitized UCAs we reviewed (both cost type and 
fixed price contracts)--34 of 66--contracting officers did not document 
consideration of any reduced cost risk to the contractor during the 
undefinitized period when establishing profit or fee negotiation 
objectives.\1\ For the 12 cost-plus-award fee contracts included in 
this review, we did not see any evidence in the contract files that 
there was any consideration of reduced cost risk. GAO noted that 
defense regulations do not provide a procedure for how to consider any 
reduced cost risk for cost-plus-award-fee type contracts and 
recommended the Secretary of Defense revise the defense federal 
acquisition regulation supplement (DFARS) to provide specific guidance 
on how to perform an assessment of any reduced cost risk for profit or 
fee during the undefinitized period for cost-plus-award-fee UCAs. DOD 
agreed with this recommendation and plans to revise the DFARS 
Procedures, Guidance, and Instruction to provide specific guidance on 
how to perform an assessment of any reduced cost risk during the 
undefinitized period for cost-plus-award-fee UCAs.
---------------------------------------------------------------------------
    \1\ GAO, Defense Contracting: DOD Has Enhanced Insight into 
Undefinitized Contract Action Use, but Management at Local Commands 
Needs Improvement, GA0-10-299 (Washington, D.C.: January 28, 2010).
---------------------------------------------------------------------------

Definitization Periods and Obligation Amounts on Undefinitized Contract 
                                Actions

    Question. The Federal Acquisition Regulation states that 
undefinitized contract actions (UCAs) should be definitized within 180 
days of signing the UCA or before completion of 40 percent of the work 
to be performed, whichever occurs first. However, many of these 
contracts are not definitized within the required 180 day time period. 
In some cases years have passed with still no definitization and 
oftentimes funds are obligated in excess of the limits normally 
allowed.
     What can be done to address these issues?
    Answer. GAO found that leadership emphasis and management insight 
into and oversight of the use of UCAs can be an important tool. DoD 
centralized reporting is a good step for senior leaders to gain an 
understanding of the extent to which UCAs are being used and when they 
are being definitized. GAO reported in 2007, that DoD does not track 
whether it meets the Federal Acquisition Regulation requirement to 
definitize letter contracts (one type of UCA) before 40 percent of the 
work is complete. To improve oversight of UCAs, GAO recommended at that 
time that the Secretary of Defense issue guidance to program and 
contracting officials on how to comply with the FAR requirement to 
definitize when 40 percent of the work is complete. DoD has proposed an 
amendment to the Defense Federal Acquisition Regulation Supplement 
(Case 2007-D011) to clarify that DoD letter contracts will be 
definitized using the DFARS procedures (before 180 days or prior to 50 
percent or more of the not-to-exceed amount is obligated) applicable to 
all other undefinitized contract actions. The rule was still pending as 
of January 21, 2010.

                      Sustained Contract Protests

    Question. It appears to this Committee that the number of sustained 
contract protests has increased in recent years. While certainly fair 
and equitable to the losing contractor, sustained protests have the 
effect of disrupting the fielding of critical weapons systems both in 
terms of cost and schedule.
     In your review and adjudication of acquisition contract 
protests, have you found a common thread or theme in the Department's 
awarding of these contracts that have caused the protests to be 
sustained?
    Answer. Generally, our Office sustains a relatively small number of 
protests a year. Last year, government wide, we sustained 18% of the 
fully developed protests that we decided on the merits. For DOD, in FY 
2009, we sustained 12% of the fully developed merit cases. The 
percentage of sustains decreases significantly if all protests filed, 
including the ones that are dismissed before a decision is issued, are 
counted. This means that agencies generally are doing a good job in 
conducting their procurements. However, there are areas where we 
continue to see errors being made. These include instances where 
agencies do not follow the ground rules of the competition set forth in 
the solicitation; do not adequately document their evaluations; hold 
misleading or inadequate discussions; or conduct the competition in a 
manner that is inconsistent among offerors. I should note that these 
errors exist across the government; no one agency or department 
experiences problems significantly more than others.
    Question.
     Is there any one cause that you have seen that seems more 
common when reviewing these acquisition contract protests?
    Answer. The one ground that appears to seem more common in GAO 
decisions, including the DoD procurements identified in the written 
testimony, is where the agency has not followed, or has misapplied, the 
ground rules for the competition as stated in the solicitation. Again, 
this observation applies to civilian as well as defense acquisitions 
protested.

                     Inventory of Contract Services

    Question. The law (10 U.S.C. 2330, Section 807 of the 2008 National 
Defense Authorization Act, and codified in 10 U.S.C. 2330a) requires 
the Secretary of Defense to submit to Congress (and make available to 
the public) an annual inventory of activities performed pursuant to 
contracts for services. The Department of the Army promptly complied. 
The Army examined (and continues to examine) the inventory of 
contracted services and has discovered inherently governmental 
functions which had been contracted out, and is now in the process of 
in sourcing these functions. One of the lessons learned thus far by the 
Army is that on average to total cost (pay and benefits) of a federal 
civilian is $44,000 less costly than a contractor. The Navy and Air 
Force supplied the inventory of contracted services in August of 2009 
and do not appear to have attempted to ascertain the inherently 
governmental functions being performed by contractors. The Defense 
Agencies have yet to comply with the law to supply an inventory of 
contracted services.
     What is your assessment of DoD's efforts to inventory 
contracted services and identify functions which are inherently 
governmental?
    Answer. We assessed the methodologies used by the Departments of 
the Army, Navy, and Air Force to compile service contract inventories 
for fiscal year 2008 and reported in January 2010 (GAO-10-350R) that 
the methodologies used by the military departments differed in key 
ways, including how each identified service contracts, which categories 
of services were included, and how each determined the number of 
contractor full-time equivalents. Further, we reported that all three 
of the military departments' inventories were missing data. We noted 
that the differences in each of the methodologies make comparisons 
across the military departments difficult and that DOD currently has an 
effort underway to develop a new, more consistent approach for 
compiling future inventories. We did not assess the methodologies used 
by the defense agencies to compile the inventories that the Office of 
the Deputy Under Secretary of Defense for Acquisition and Technology 
submitted in September 2009, nor did we assess DOD's efforts to use the 
fiscal year 2008 inventories to identify inherently governmental 
functions. Section 803 of the National Defense Authorization Act for 
Fiscal Year 2010 requires GAO to continue to report on DOD's service 
contract inventories in 2010, 2011, and 2012.

             Size of the Acquisition Contracting Workforce

    Question. The Department of Defense downsized the acquisition 
contracting workforce for many years without ensuring that it retained 
an adequate in-house workforce with the specific skills and 
competencies needed to accomplish the acquisition contracting mission. 
The DoD plans to more rigorously oversee additional hiring and to 
improve retention. In the Spring of 2008, the GAO reported on the 
Department's plans to convert 11,000 contractor personnel to government 
positions, and hire an additional 9,000 government personnel by 2015.
     Please assess the utility of the authority in Section 832 
of the National Defense Authorization Act, 2010, which provides for the 
use of certain unobligated balances to assist recruitment and retention 
of the DoD acquisition workforce.
    Answer. We have not evaluated the utility of the authorities 
provided in Section 832 of the National Defense Authorization Act for 
Fiscal Year 2010. We do note, however, that in order for such funds to 
be expended wisely, decisions on how and where that money should be 
spent need to be informed by data and analyses. As discussed in our 
testimony \2\ and our March 2009 report,\3\ DOD lacks key data and 
analyses on its acquisition workforce that could be used to inform such 
decisions and how best to focus resources on where the greatest 
benefits are expected.
---------------------------------------------------------------------------
    \2\ GAO, Defense Acquisitions: Managing Risk to Achieve Better 
Outcomes, GAO-10-374T (Washington, D.C.: Jan. 20, 2010).
    \3\ GAO, Department of Defense: Additional Actions and Data Are 
Needed to Effectively Manage and Oversee DOD's Acquisition Workforce, 
GAO-09-342 (Washington, D.C.: Mar. 25, 2009).
---------------------------------------------------------------------------

                     Contract Management Personnel

    Question. The Department of Defense's acquisition contracting 
workforce is losing many of its most talented and experienced personnel 
to retirement. In some cases the personnel that remain do not match up 
well with the types of major acquisition programs to be contracted.
     What is your evaluation of the personnel management effort 
in the DoD to find, recruit, hire, and develop the needed acquisition 
contracting professionals?
    Answer. According to DOD, its contracting workforce grew by almost 
6 percent from fiscal year 2008 to the end of fiscal year 2009. DOD has 
announced plans to further grow its contracting workforce over the next 
5 years.
    However, as we reported in March 2009, DOD lacks critical 
information in several areas necessary to assess, manage, and oversee 
its acquisition workforce, including those responsible for contracting, 
and ensure that its workforce is sufficient--both in numbers and skill 
sets--to meet DOD's current and future needs. We noted that DOD and the 
military services had a number of initiatives underway to respond to 
legislative requirements aimed at improving the management and 
oversight of its workforce, including developing data and processes to 
more fully assess the workforce. However, it was too early at that time 
to determine the extent to which these efforts will improve management 
and oversight of the workforce, but we questioned whether DOD would 
have the information necessary to assess and oversee the acquisition 
workforce.
    GAO is currently conducting a mandated review of the nature and 
efficacy of the acquisition workforce's training. The results of that 
review are expected by October 2010. Additionally, once DOD issues its 
human capital plan for its acquisition workforce, GAO will initiate a 
mandated review of that plan, which is to include recruiting and 
retention goals and specific strategies for developing and training the 
workforce. That review is to be completed 180 days after the plan's 
submission. These reviews will provide additional information regarding 
DOD's efforts to find, recruit, hire, and develop contracting 
professionals.
    Question.
     Are certification requirements rigorously enforced in the 
DoD?
    Answer. We have not assessed DOD's enforcement of certification 
requirements or whether the acquisition workforce is achieving the 
appropriate levels of certifications. Our mandated reviews of DOD's 
training for the acquisition workforce and the human capital plan for 
that workforce should provide additional insights regarding 
certification.
    Question.
     As private contractors increasingly are intertwined into 
the work that federal military and civilian personnel perform in 
managing acquisition contracts, how can the Department ensure these 
private contractors have adequate skills to meet the demands of the 
work?
    Answer. As we reported in March 2009, DOD has not collected 
departmentwide data on contractor personnel supporting the acquisition 
function, either in terms of their number or skill sets. While DOD has 
efforts underway to collect information on the number of contractor 
personnel supporting the acquisition function and to assess the 
competency of its government workforce, these efforts will not provide 
information on contractors' skills sets or detailed information on the 
services they perform to support the acquisition function. In response 
to our March 2009 recommendation that it collect data, such as that 
related to skill sets and functions performed, on contractor personnel 
supporting the acquisition function, DOD agreed that such data are 
needed but stated that establishing a contractual requirement to 
capture more detailed information on its contractor workforce would 
need to be carefully considered. Until DOD begins to collect and 
analyze data on the contractor workforce supporting the acquisition 
function, it is not clear how the Department can ensure that private 
contractors have the necessary skills to meet the demands of the work.
    It should also be noted that DOD has not determined as a whole what 
skills its total acquisition workforce--both government and 
contractor--need to meet the demands of the work both currently and in 
the near future. It is only by identifying its needs and conducting a 
thorough gap analysis of what it currently has versus what it needs 
that DOD can determine the appropriate size, composition, and skill set 
of its acquisition workforce.
    Question.
     How do you rate the Department's acquisition contracting 
work force in achieving the appropriate levels of skill certification?
    Answer. We have not assessed DOD's enforcement of certification 
requirements or whether the acquisition workforce is achieving the 
appropriate levels of certifications. Our mandated reviews of DOD's 
training for the acquisition workforce and the human capital plan for 
that workforce should provide additional insights regarding 
certification.

         Improvements in the Acquisition Contracting Workforce

    In a March 2009 report, the Government Accountability Office noted 
that since 2001, the amount contracted for goods and services had more 
than doubled to $388 billion but the number of government acquisition 
personnel was approximately stable. The Department of Defense (DoD) has 
begun an effort to strengthen the acquisition workforce by converting 
11,000 contractors to government positions in the near term, and by 
hiring an additional 9,000 Government personnel by 2015. However, the 
DoD lacks the information needed to identify capability gaps in the 
workforce which may impact mission accomplishment. The DoD has 
incomplete information on the skill sets of in-house personnel and the 
Navy, the Air Force and Defense Agencies have little information on 
contractor personnel. The Army has made progress in this area.
    Question.
     Please provide for the Committee an update on the progress 
being made by the DoD to convert contractor personnel to government 
service, and hire the additional 9,000 personnel?
    Answer. Given that DOD's efforts to convert and hire additional 
acquisition workforce personnel have only recently gotten underway, we 
have not had an opportunity to go in to assess what progress has been 
made. However, information regarding DOD's efforts to grow its 
acquisition workforce should be included in the department's human 
capital plan for the acquisition workforce. Once DOD issues its plan, 
GAO will initiate a mandated review of that plan is to be completed 180 
days after the plan's submission.
    Additionally, according to a December 2009 DOD report on the 
department's in-sourcing initiative, DOD plans to establish 
approximately 17,000 new manpower authorizations in fiscal year 2010 to 
perform work and services currently under contract. Of the 17,000, DOD 
estimated that approximately 3,400 authorizations will be for the 
acquisition workforce.
    Question.
     Has the DoD improved the collection and cataloging of 
information that is available on acquisition contracting personnel?
    Answer. We recently assessed DOD's efforts to collect and catalog 
information on the acquisition workforce for our March 2009 report. At 
that time, we reported that the department was hindered by the lack of 
key data to determine gaps in the number and skill sets of acquisition 
personnel. We noted that DOD had a number of initiatives underway to 
improve its oversight of the acquisition workforce. For example, DOD 
was conducting competency assessments to identify the skill sets of its 
current acquisition workforce. According to DOD, assessments have been 
completed for 3 of the 13 career acquisition career fields--including 
contracting--and there are plans to conduct assessments of the 
remaining career fields. However, while these assessments will provide 
useful information regarding the skill sets of the current in-house 
acquisition workforce, they were not designed to determine the size, 
composition, and skills sets of an acquisition workforce needed to meet 
the department's mission.

                           Types of Contracts

    Question. Some types of contracts are:
    Cost Reimbursement--Utilized for acquisitions when uncertainties in 
contract performance do not permit costs to be estimated with 
sufficient accuracy:
          Cost Plus Award Fee (CPAF)
          Cost Plus Incentive Fee (CPIF)
    Fixed Price--Optimal for acquiring commercial items or other 
equipment with reasonably definite functions or detailed 
specifications:
          Firm Fixed Price
          Fixed Price Incentive
     What are the advantages and disadvantages of each type and 
how frequently are they used?
    Answer. The principal advantage of cost-type contacts is that 
agencies can engage the services of contractors even though expected 
costs cannot be estimated with enough accuracy to permit the use of 
fixed-price arrangements. The main disadvantage of cost-type contracts 
is that the risk of cost growth is primarily on the government. In 
addition, this contract type requires that the contractor have an 
adequate system in place to accurately track contract costs.
    There are numerous variations of cost-type contracts. For example, 
a cost-plus- award-fee contact may be used when the government is 
seeking to motivate excellent performance by the contractor. It 
provides for a fee to the contractor consisting of a base amount (which 
may be zero) plus an award amount determined on the basis of a 
judgmental evaluation by the government. We have reported on the use of 
cost-plus-award-fee contracts at the Department of Defense, and have 
made several recommendations for improvement. Defense Acquisitions: DOD 
Has Paid Billions in Award and Incentive Fees Regardless of Acquisition 
Outcomes, GA0-06-66, December 19, 2005. In fiscal year 2009, the total 
value of award-fee contracts used by all federal agencies was more than 
$60 billion.
    Another example of a cost-type contract is cost-plus-incentive-fee. 
This type of contract provides for an initial negotiated fee, which is 
then adjusted later in accordance with a formula based on the 
relationship of total allowable costs to total target costs. The intent 
is to provide an incentive for the contractor to manage the contract 
effectively. In fiscal year 2009, agencies obligated more than $24 
billion on cost-plus-incentive-fee contracts.
    Fixed-price contracts are the lowest risk to the government because 
they place the cost risk on the contractor. This contract type best 
utilizes the basic profit motive of business enterprises. It is used 
when the risk involved is minimal or can be predicted with an 
acceptable degree of certainty.
    There are several types of fixed-price contracts. For example, a 
firm, fixed-price contract provides for a price that is not subject to 
any adjustment based on the contractor's cost experience in performing 
the contract. It provides maximum incentive for the contractor to 
control costs and perform effectively. It imposes the minimum 
administrative burden on the contracting parties. It requires 
reasonably definite functional or detailed specifications, however, and 
the contracting officer must be able to establish a fair and reasonable 
price at the outset of the contract. In fiscal year 2009, agencies 
obligated nearly $218 billion on firm, fixed-price contracts, by far 
the highest of all the contract types.
    Another type of fixed-price contract is fixed price incentive. This 
type of contract provides for adjusting profit and establishing the 
final contract price by a formula based on the relationship of final 
negotiated cost to total target cost. The final price is subject to a 
price ceiling negotiated at the outset. This type of contract is used 
when the contractor's assumption of a degree of cost responsibility 
will provide a positive profit incentive for effective cost control. In 
fiscal year 2009, agencies obligated just over $8 billion on fixed-
price-incentive contracts.
    Question.
     Is ``Best Value'' contracting more difficult to accomplish 
than ``Lowest Cost'' contracting?
    Answer. The Federal Acquisition Regulation defines best value as 
the expected outcome of an acquisition that provides the greatest 
overall benefit. An agency can obtain best value by using any of a 
number of source selection approaches. One approach is known as the 
tradeoff process, which permits an agency to make award to other than 
the lowest priced offer or. This process requires that the perceived 
benefit of a higher priced proposal that merits paying the higher price 
be documented in the contract file. Another approach is known as lowest 
price, technically acceptable process. Under this approach, proposals 
are evaluated for acceptability, but not ranked under the non-cost 
factors. No tradeoffs are permitted. These two differences may make the 
lowest price, technically acceptable approach somewhat easier to 
implement than the tradeoff process.

                Use of Commercial Acquisition Processes

    Question. Many urge that commercial acquisition practices be 
applied to DoD programs. However, the GAO conducted an analysis on 
Commercial and Department of Defense Space System Requirements and 
Acquisition Practices and concluded that there are key differences in 
requirements, and unique technology needs, that separate DoD 
acquisitions from the commercial sector. Further, the DoD has in the 
past tried to adopt commercial acquisition processes. In the mid-1990's 
the acquisition methodology called Total System Performance 
Responsibility (TSPR) was implemented on several major system 
acquisitions including Space Based Infrared Satellite (SBIRS) system 
and the Future Imagery Architecture (FIA) and has been subsequently 
blamed for severe cost overruns and schedule delays due to poor program 
oversight, poor cost estimating, overestimation of technology readiness 
and poor workmanship issues.
     When are commercial acquisition processes applicable to 
DoD system acquisitions?
    Answer. While commercial and DOD space system missions, 
requirements, and technology development differ in key ways, the 
commercial sector has adopted practices that could be applied to DOD 
space system acquisitions to improve cost, schedule, and performance 
outcomes. For instance, commercial firms define their requirements 
before initiating development programs, which helps to close resource 
gaps prior to program start and limit requirements growth. They tie 
contractor award and incentive fees to acquisition outcomes. They 
follow evolutionary product development approaches that enable them to 
achieve gradual gains in capability in relatively short periods while 
limiting the extent of technology risk they take on in any one 
increment. The commercial approach, overall, emphasizes gaining 
critical knowledge before making long-term commitments. GAO has already 
recommended these practices for DOD adoption. DOD, in fact, has 
recognized a need to adopt several of these practices and initiated 
efforts to do so.
    At the same time, some acquisition practices adopted by the 
commercial sector, including exclusive use of firm, fixed-price 
contracts and developing highly accurate cost estimates, may not be 
successfully applied to DOD in its current acquisition environment 
because of factors such as unique requirements and immature 
technologies at program start. For instance, the use of firm, fixed-
price contracts for procuring satellites would require a change in 
paradigm for DOD space programs--a much higher level of knowledge, 
including mature technologies and mature design--prior to the start of 
a program. Currently, however, DOD accepts greater technology and 
development risks and typically uses cost-reimbursement contracts for 
the first two satellites to be developed and produced. Some programs 
use fixed-price contracts for any additional satellites. Using fixed-
price contracts for the development phase of a program has not worked 
well, partly due to the high level of unknowns accepted at program 
start. In addition, other factors, such as launch delays, program 
funding instability, changing needs, and the diverse array of 
organizations involved in DOD space programs pose additional challenges 
to the use of firm, fixed-price contracts.

                               Award Fees

    Question. A recent GAO report on award fees indicate that from 2004 
to 2008 federal agencies spent over $300 billion on contracts that 
include monetary incentives for performance measured against subjective 
criteria. Office of Management and Budget (OMB) guidance on using award 
fees provides for limiting opportunities for earning unearned fee in 
subsequent periods; linking award fees to acquisition outcomes; 
designing evaluation criteria to motivate excellent performance; and 
not paying for unsatisfactory performance. Notwithstanding that the 
guidance has been incorporated into the Federal Acquisition Regulation 
(FAR), the application of this OMB guidance is uneven across federal 
agencies including the DoD. Most agencies continue to allow contractors 
second chances to earn fee. The GAO estimates that the DoD will save 
over $450 million through fiscal year 2010 by limiting second chances 
at award fee.
     What are the difficulties in linking fee to outcomes?
    Answer. There are two primary difficulties in linking award fees to 
acquisition outcomes. First, achieving desired program outcomes is a 
responsibility shared between DOD and its contractors. As a result, 
assigning responsibility for a particular outcome can be challenging. 
However, DOD's past difficulties in linking award fees to acquisition 
outcomes such as cost, schedule, and performance were largely based on 
poorly defined or inappropriate evaluation criteria. Criteria used in 
these evaluations did not consistently reflect a contractor's ability 
to achieve desired outcomes and the fees awarded were not always 
commensurate with a contractor's performance. For example, rather than 
focusing on acquisition outcomes, such as delivering a fielded 
capability within established cost and schedule baselines, DOD often 
placed emphasis on such things as the responsiveness of contractor 
management to feedback from DOD officials, quality of contractor 
proposals, or timeliness of contract data requirements. Current DOD 
guidance emphasizes the importance of linking award fees to outcomes 
such as cost, schedule, and technical performance, and establishes 
guidelines for evaluating contractor performance based on these 
outcomes.
    Question.
     How effectively do DoD organizations use award fee to 
motivate improved performance?
    DOD has not been able to measure how well its organizations use 
award fees to motivate improved performance. In 2005, we reported that 
DOD had not compiled data, conducted analyses, or developed performance 
measures to evaluate the effectiveness of award fees. DOD has taken a 
number of steps to address this issue. Since 2007, DOD has collected 
data on the use of award fees and identified a link between cost and 
schedule data and the amount of fee earned. However, it has not been 
able to establish metrics to evaluate the effectiveness of award fees 
in terms of performance. Additionally, individual programs are unable 
to determine the extent to which successful outcomes were attributable 
to incentives provided by award fees versus external factors, such as a 
contractor's desire to maintain a good reputation. In our 2009 report, 
GAO recommended that DOD form an interagency working group to determine 
how best to evaluate the effectiveness of award fees as a tool for 
improving contractor performance and achieving desired program 
outcomes. In response, DOD has partnered with the Departments of 
Energy, Health and Human Services, Homeland Security, and the National 
Aeronautics and Space Administration to form the Incentive Contracting 
Working Group to discuss how best to evaluate award fee data.

                         Sole-Source Contracts

    Question. We know that the government in some cases, based on 
analysis and justification, awards a sole-source contract.
      Under what circumstances is a sole-source contract 
appropriate?
     Answer. Acquisition regulations allow government agencies to 
contract without providing for full and open competition in situations 
where:
           only one responsible source is available and no other 
        supplies or services will satisfy, agency requirements
           the agency's need for the supplies or services is of 
        such an unusual and compelling urgency that the government 
        would be seriously injured unless the agency was permitted to 
        limit the number of sources from which it solicits
           the government needs to maintain a facility or 
        manufacturer in case of a national emergency or to achieve 
        industrial mobilization; to establish or maintain an essential 
        engineering, research, or development capability to be provided 
        by an educational or other nonprofit institution or a federally 
        funded research and development center; or to acquire the 
        services of an expert or neutral person for any current or 
        anticipated litigation or dispute.
           full and open competition is precluded by the terms of 
        an international agreement or a treaty between the U.S. and a 
        foreign government such as when a contemplated acquisition is 
        to be reimbursed by a foreign country that requires that the 
        product be obtained from a particular firm.
           a statute expressly authorizes or requires that the 
        acquisition be made from a specified source or through another 
        agency. Examples are statues pertaining to the Federal Prison 
        Industries; Qualified Nonprofit Agencies for the Blind or other 
        Severely Disabled; Government Printing and Binding; as well as 
        sole source awards under the Small Business Administration's 
        8(a) program (including 8(a) subsidiaries of Alaska Native 
        Corporations).
           the disclosure of the agency's needs would compromise 
        the national security unless the agency is permitted to limit 
        the number of sources from which it solicits bids or proposals.
           the agency head determines that it is not in the public 
        interest to provide for full and open competition for a 
        particular acquisition. In this case, Congress is to be 
        notified in writing of such a determination not less than 30 
        days before contract award.
    Question.
     Is it likely that a product that is procured under a sole-
source contract will cost more than if the contract was competed?
     Answer. Competition is the cornerstone of the acquisition system, 
and the benefits of competition in acquiring goods and services from 
the private sector are well established. Promoting competition--as 
opposed to sole-source contracts, where the government negotiates with 
only one source--can help save the taxpayer money, improve contractor 
performance, curb fraud, and promote accountability for results. 
Agencies are required to perform acquisition planning and conduct 
market research for all acquisitions in order to promote and provide 
for, among other things, full and open competition.
     However, GAO's work has identified situations where the government 
has not taken advantage of opportunities to compete work. For example, 
our recent review of federal agencies' use of blanket purchase 
agreements (BPAs) awarded under General Services Administration (GSA) 
Federal Supply Schedule contracts showed that agencies did not always 
consider more than one vendor when establishing these agreements. In 
some cases, the rationales for awarding a BPA directly to one vendor 
did not appear to conform to sound procurement policy. Furthermore, 
agencies rarely took advantage of additional opportunities for 
competition when placing orders under BPAs, reducing the potential to 
realize additional savings for the taxpayer. GAO recommended that the 
Office of Federal Procurement Policy (OFPP) take steps to clarify the 
circumstances under which it is appropriate to award a BPA using the 
limited source justifications of the FAR and consider opportunities for 
enhancing competition when placing orders. OFPP concurred with our 
recommendations and is taking steps to implement them. In other 
reviews, we found that the Army had issued contracts for security 
guards at U.S. military installations on a sole-source basis, and the 
State Department had issued a sole-source contract for installation and 
maintenance of security equipment at U.S. embassies worldwide. Based on 
GAO's recommendations, the contracts were put out for competition, 
which resulted in cost savings.
    Question.
     What is a No-Bid contract?
    Answer. This term is sometimes used to refer to a sole source 
contract. However, it is not an official term in acquisition 
regulations and is somewhat inaccurate since even in sole-source 
situations, the government solicits and receives a single bid or offer.

                        Requirements Definition

    Question. The Department of Defense and its contractors need to 
agree on and understand the acquisition objective and how that is 
translated into the contracts terms and conditions. Contracting 
officials write requests for proposals, analyze bids, and write 
contracts but everything the contracting official does depends on an 
accurate description of the requirement.
     To what extent is the difficulty and waste in contracting 
due to poorly defined requirements?
    Answer. Poorly defined requirements are a key factor leading to 
cost, schedule, and performance problems in major weapon programs. 
Programs often start system development with inadequate knowledge about 
the requirements and resources--funding, time, technologies, and 
people--needed to execute them. The knowledge gaps are largely the 
result of a lack of early systems engineering activities--requirements 
analysis, design, and testing--which is needed to ensure that a weapon 
system program's requirements are achievable and designable given 
available resources, such as technologies. Systems engineering helps to 
resolve performance and resource gaps before system development starts 
by either reducing requirements, deferring them to the future, or 
increasing the estimated cost for the weapon system's development. 
Because the government often does not perform the proper up-front 
requirements analysis to determine whether the program will meet its 
needs, significant contract cost increases can and do occur as the 
scope of requirements becomes better understood by the government and 
contractor.
    Question.
     Please discuss the desired balance between changing 
requirements in the contract and fielding an obsolete design. For 
example one of the reasons given for termination of the FCS Manned 
Ground Vehicles was that the vehicles had low ground clearance and flat 
bottomed hulls despite lessons learned in Iraq that a high ground 
clearance and v-hull offered much better force protection.
    Answer. DOD could achieve a better balance between changing 
requirements and avoiding obsolete weapon system designs by resisting 
the urge to achieve revolutionary and lengthy product developments and 
using an incremental approach to developing and fielding capabilities. 
In addition, constraining development cycle times to 5 or 6 years will 
force more manageable commitments, make cost and schedules more 
predictable, and facilitate the delivery of capabilities in a timely 
manner. To improve product development outcomes, a key best practice is 
to ensure that system requirements are properly defined from the outset 
and that significant requirement changes or additions are avoided after 
system development has begun. In the case of FCS, the Army never 
arrived at a stable set of system level requirements. The FCS 
development effort began about the same time as the start of the Iraq 
war and the escalation of improvised explosive device attacks. The 
manned ground vehicles were designed based on a concept where the 
information network was expected to compensate for the vehicles lower 
weight armor. Ultimately, the Secretary of Defense determined that the 
manned ground vehicles did not sufficiently incorporate lessons learned 
from operations in Iraq and the program was cancelled.

        Joint Capabilities Identification and Development System

    Question. In a September 2008 Report on Defense Acquisitions, the 
Government Accountability Office stated ``The Joint Capabilities 
Identification and Development System or JCIDS has not yet met its 
objective to identify and prioritize war fighting needs from a joint 
capabilities perspective. Instead, capabilities continue to be driven 
primarily by the individual services--which sponsored 67 percent of 
initial capabilities proposals submitted since 2003--with little 
involvement from the combatant commanders which are largely responsible 
for planning and carrying out military operations.''
     The Joint Capabilities Identification and Development 
System was implemented in 2003 and yet most acquisitions are still 
driven by the needs and perspectives of a single military department. 
Why has JCIDS not been more fully implemented?
    Answer. As we reported in 2008, the military services drive the 
determination of capability needs, in part because they retain most of 
DOD's analytical capacity and resources for requirements development. 
The functional capabilities boards, which were established to manage 
the JCIDS process and facilitate the prioritization of needs, have not 
been staffed or resourced to effectively carry out these duties. 
Furthermore, the Combatant Commands (COCOMs), which are responsible for 
carrying out military missions, have not played a significant role in 
determining requirements in part because they also lacked the analytic 
capacity and resources to become more fully engaged in JCIDS. GAO has 
recommended that DOD should determine and allocate appropriate 
resources for more effective joint capabilities development planning. 
DOD has taken steps to get the COCOMs more involved in determining 
requirements. For example, the Joint Requirements Oversight Council has 
been doing more to seek out and consider input from the COCOMs through 
regular trips and meetings to discuss capability needs and resource 
issues.
    Question. The GAO report indicated that the JCIDS process is 
lengthy, taking on average up to 10 months to validate a need. Why does 
the validation process take so long and what is the impact on the war 
fighter?
    Answer. The development of a capability proposal that may lead to a 
new major weapon system and its review and validation through the JCIDS 
process can take a significant amount of time. Prior to submitting a 
capability proposal to JCIDS, it can take a service sponsor a year or 
more to conduct the analyses necessary to support the proposal and get 
it approved within the service organization. A proposal submitted to 
JCIDS can go through several review stages before it gets validated or 
approved. Given the size and complexity and level of funding that will 
be committed to a major weapon system program, it may be warranted to 
invest considerable time and effort in developing and reviewing the 
capability proposal. However, a lengthy process to identify and 
validate requirements can undermine the department's efforts to 
effectively respond to the needs of the warfighter, especially those 
that are near term. In one case, the Army used extraordinary measures, 
going outside DOD's normal process to acquire and field the Joint 
Network Node-Network (JNN-N)--a $2 billion, commercial-based system 
designed to improve satellite capabilities for the warfighter. While 
JNN-N provided enhanced capability for the warfighter, the work-around 
allowed the Army to bypass the management and oversight typically 
required of DOD programs of this magnitude. Recently, DOD has taken 
steps to streamline the JCIDS process, by reducing the analyses 
required for submitting initial capability proposals, shortening the 
review cycle for proposals, and delegating approval authority for some 
proposals.

                    Acquisition Process Improvements

    Question. The acquisition environment in the DoD encourages 
ambitious product developments that include many technological 
unknowns. DoD organizations enter into weapons systems development 
contracts prior to having developed sound requirements. Programs are 
exposed to technology, design and production risk resulting in cost 
growth and schedule delays. Uncertainties about technology, design, 
requirements and cost lead to contract revision and eventual failure 
with wasted resources and delay in providing needed assets to the war 
fighters.
     Do you see any evidence that the Department is changing 
this practice for the better?
    Answer. Yes. In our 2009 assessment of selected weapon programs, we 
found that while most programs still proceed with far less technology, 
design, and manufacturing knowledge than best practices suggest, the 
amount of knowledge that programs attained by key decision points has 
increased in recent years. For example, since 2003, there has been a 
significant increase in the percentage of technologies demonstrated in 
at least a relevant environment by the start of system development. 
Further, all five programs in our assessment that entered system 
development since 2006 reported that all their critical technologies 
had at least been demonstrated in a relevant environment, in accordance 
with the DOD and statutory criteria.
    In addition, DOD has revised its acquisition policy and Congress 
put in place statutory requirements to improve the knowledge that 
weapon programs must have before they begin, such as more robust 
systems engineering, and cost and technology assessments. If DOD 
follows the letter and spirit of these reforms, they should increase 
the chances of weapons programs being completed on-time and at the 
anticipated cost. Specifically, DOD's December 2008 revision to its 
acquisition policy increased the rigor and discipline expected upfront 
and throughout the acquisition process. Key elements include the 
following:
           A mandatory Materiel Development Decision for all 
        programs, regardless of where they intend to enter the 
        acquisition process. This review is designed to ensure programs 
        are based on approved requirements and a rigorous assessment of 
        alternatives.
           A requirement for programs in the technology 
        development phase to implement acquisition strategies with two 
        or more competing teams producing prototypes of the system or 
        key components. This should help to reduce technical risk, 
        validate designs and cost estimates, evaluate manufacturing 
        processes, and refine requirements.
           An additional milestone decision authority 
        assessment of program progress at preliminary design review 
        (PDR). PDR is an important early systems engineering event that 
        informs requirements trades, improves cost estimation, and 
        identifies remaining design, integration and manufacturing 
        risks.

             Contract Closeout and End of Production Costs

    Question. Several Air Force aircraft procurement programs (F-22 and 
C-17) are nearing the end of their production run at the same time. In 
examining the possibility of closing the production line, an 
interesting contract clause has come to light. These contracts contain 
a clause that takes effect if the ordered quantity drops below a 
certain level or if the ordered aircraft are anticipated to be the 
final aircraft ordered. These costs (referred to as ``tail-up costs'') 
are pre-negotiated well before the end of the production run, seemingly 
before the actual costs would even be known. The contractor states that 
these costs are in place to offset the impact of lower aircraft 
quantities moving through the production line.
     The Committee has recently been made aware of a clause in 
aircraft procurement contracts referred to as ``tail-up clauses'' that 
are in place to cover reduced or final production lots. During reviews 
conducted by your agency, do you come across this type of clause 
frequently? How widespread is the use of this type of clause?
     In your opinion, does it make sense to put a price tag on 
rate impact well before the actual cost of any reduced production 
quantity may be known?
     Would it not make more sense for the cost of any reduced 
production quantities or end of production costs be negotiated at the 
same time those production lots are negotiated instead of years ahead 
of time before actual costs are known?
     What explanation was given by the Department of Defense 
during your reviews for why they structure procurement contracts in 
this manner?
    Answer. We have conducted extensive reviews of aircraft programs 
over many years, including the F-22 and C-17, but we have not evaluated 
``tail-up'' clauses in connection with those reviews. Our understanding 
from program officials, however, is that although the F-22 multiyear 
contract contained a tail-up clause, the clause was not invoked because 
the Air Force is proceeding with the next lot of aircraft. The 
officials told us that the contract for that lot does not contain a 
tail-up clause. For the C-17 program, officials told us that the agency 
is still in negotiation with the contractor.
    Our understanding is that tail up clauses may operate in a manner 
very similar to termination clauses in multiyear contracts. A multi-
year contract is used to purchase supplies or services for up to 5 
program years. Multiyear contracts typically are used in some of the 
larger programs, such as the F-22 and C-17. Performance during the 
second and subsequent years of a multiyear contract is contingent upon 
the appropriation of funds, and may provide for a cancellation payment 
if appropriations are not made. The cancellation payment is established 
at the start of the contract, and must be reduced each year in direct 
proportion to the remaining requirements. The Federal Acquisition 
Regulation specifies the types of costs that should be included in a 
cancellation payment.

                   Rapid Acquisition of MRAP Vehicles

    Question. On October 8, 2009, Mr. Michael J. Sullivan, Director, 
Acquisition and Sourcing Management, Government Accountability Office, 
and one of our witnesses today, testified before the House Armed 
Services Committee, Defense Acquisition Reform Panel on the tailored 
acquisition approach used to rapidly acquire and field MRAP vehicles. 
Mr. Sullivan briefed that, the factors contributing to success in the 
MRAP program that may be transferable to other programs were: (1) use 
proven technologies, (2) keep requirements to a minimum, (3) infuse 
competition, and (4) keep final integration responsibility with the 
government.
     Please comment on the use of proven technologies. 
Specifically, describe the balance that the program must achieve 
between including the latest technology and using proven technology.
    Answer. We have long advocated as part of our best acquisition 
practices that proven technologies are a key element to successful 
acquisition programs. We do not deny that this is a conservative 
approach and by using it, an acquisition program may not be able to use 
the latest technologies. However, the latest technologies tend to be 
less mature. This presents problems for acquisition programs because 
the pace of technological maturity is often unpredictable, and maturing 
technologies to acceptable levels can take much longer than originally 
anticipated. Furthermore, starting a program without proven 
technologies almost always results in cost and schedule problems later 
in the program. When the Army launched the Future Combat System 
program, Army officials wanted technically sophisticated systems to 
deliver desired performance characteristics. DOD approved the FCS 
program for system development in spite of the immature technologies. 
The Army believed it could mature all FCS technologies to Technology 
Readiness Level 6 in three years. This did not happen. It took the Army 
six years and an estimated $18 billion to mature FCS technologies to 
the point where they were ready to be incorporated into an acquisition 
program. Due to the FCS termination, it is uncertain when or if many of 
these technologies will be incorporated into fieldable systems. We also 
suggest that the better long term approach would be to adopt an 
incremental development strategy where the first increment would be 
designed to be readily upgradeable as more advanced technologies are 
matured.
    Question.
     Discuss the strategy of having multiple prototype vehicles 
and multiple vendors selected to produce the vehicle.
    Answer. According to the Office of the Under Secretary of Defense 
for Acquisition, Technology, and Logistics, lessons of the past, and 
recommendations of multiple reviews, emphasize the need for, and 
benefits of quality prototyping. During development, teams should be 
producing detailed manufacturing designs--not solving myriad technical 
issues. An acquisition strategy involving multiple prototype vehicles 
and multiple vendors has the advantage of reducing technical risk, 
validating designs, validating cost estimates, evaluating manufacturing 
processes, and refining requirements. A goal for development efforts 
should be a working relationship between government and industry that 
demonstrates key knowledge elements that can inform future development 
and budget decisions. This key knowledge reflects knowledge-based 
acquisition elements that GAO has promoted for years and that serve as 
key enablers for the best practices used by successful commercial 
companies.

                 TRICARE Contract Recompetition Protest

    Question. The following errors were cited as the basis for GAO 
sustaining the protest of this contract award:
    The Department of Defense failed to responsibly evaluate the 
awardee's past performance information as contemplated by the 
solicitation;
    The Department of Defense failed to perform a reasonable price/cost 
realism assessment, and failed to consider, as part of the technical 
evaluation or best value selection decision, the cost savings 
associated with the protester's proposed network provider discounts; 
and
    DOD failed to consider, in light of the agency's obligation to 
avoid even the appearance of impropriety in government procurement, 
issues stemming from the awardee's use of a high-level TRICARE 
Management Agency (TMA) employee in the preparation of its proposal, 
where the record demonstrates that this individual had access to the 
protester's non-public proprietary information.
    What was the basis for sustaining the protest in TRICARE Region 
North?
    Answer. As reflected in our decision, B-401652.3, B-40165425, we 
sustained the protest on a number of grounds: the agency performed a 
flawed past performance evaluation, price realism evaluation, risk 
assessment, and failed to adequately consider network provider 
discounts.
    Question. What was the basis for sustaining the protest in TRICARE 
Region South?
    Answer. As reflected in our decision, B-401652.2, B-401652.4, B-
401652.6, we sustained the protest because the agency failed to 
adequately consider network provider discounts.
    Question. What was the basis for sustaining the protest in TRICARE 
Region West?
    Answer. A protest was not filed at GAO concerning the West region; 
however, there was a protest filed directly with the agency.
    Question. How long do you estimate it will take for DOD to resolve 
these protests?
    Answer. The length of time to implement corrective action depends 
on a variety of factors, including the complexity of the procurement, 
the urgency of the needed services, and internal agency decisions. We 
do not have any information on the length of time that it will take DOD 
to implement corrective action in response to the sustained protests.
    What are the time frames for determining what skill sets DoD has in 
its acquisition workforce?
    DoD has a competency assessment initiative underway that is 
intended to define the critical skills and competencies of its 
acquisition workforce. The assessments consist of five phases--from 
identifying competencies for successful performance to assessing the 
proficiency of career field members against each of the field's 
competencies. To date, assessments have been completed for 3 of the 13 
acquisition career fields. Specifically, over 20,000 members of the 
contracting career field have completed assessments. In addition, 
assessments based on a statistical sample, have been completed for the 
program management and life cycle logistics career fields. Competency 
assessments for two additional career fields--(1) System Planning, 
Research, Development and Engineering and (2) business (cost 
estimating, and financial management) are projected to begin in spring 
2010. The start of these assessments was placed on hold to allow 
completion of DoD survey quality and process reviews. Upon completion 
of these reviews DoD will update its schedule for completing 
assessments and has committed to providing the updated schedule to us 
as soon as available.
    Who is conducting the competency assessments of DoD's acquisition 
workforce? What role if any do contractors have in conducting the 
assessments?
    DoD's acquisition workforce competency assessments are being 
conducted under the direction of the Director, Human Capital 
Initiatives (HCI) of the Office of the Under Secretary of Defense (USD) 
for Acquisition, Technology, and Logistics (AT&L), who also serves as 
the President of the Defense Acquisition University (DAU). The Center 
for Naval Analysis (CNA), a Federally Funded Research and Development 
Center, provides support to DoD's efforts. According to DoD, CNA staff, 
which include technical experts on organizational behavior and 
competency management, provide technical and process support for both 
updating the models and conducting assessments. However, it is the 
responsibility of senior DoD functional leaders, appointed by the USD 
(AT&L), to ensure that the competency models are updated and workforce 
members, through the assessment process, provide inputs on proficiency, 
frequency, and mission criticality of competencies.
    How many A-76 competitions are in progress and what are the 
locations of the competitions?
    At the time of our hearing, January 20, 2010, there were seven A-76 
competitions being reported as in progress in the DoD Commercial 
Activities Management Information System. Two were located in Fort 
Jackson, one was located at Fort Benning, one was located in Puerto 
Rico, and three were at multiple locations. A current update of the 
data on March 2, 2010, shows only two A-76 competitions, both being 
conducted by the Navy and involving multiple locations, reported as in 
progress in the DoD Commercial Activities Management Information 
System.
    How can Congress get DoD to comply with the 180-day definitization 
requirement for UCAs?
    As previously noted, our work has shown that contracting officers 
have pointed to numerous reasons for delays in definitization. 
Contracting officers cite their heavy workloads, stating that once the 
UCA is awarded, they must turn to other pressing needs rather than 
going through the definitization process. They have also cited other 
reasons such as shortfalls in the government's ability to perform price 
analysis of contractor proposals. Continued congressional attention to 
enhancing the size and capabilities of the defense acquisition 
workforce would help to address these issues.
    However, we have found that management attention and oversight, 
from DoD to the local command level, also can be effective in managing 
the use of UCAs. For example, we found a contracting command 
emphasizing timely definitization by decreasing the 180-day requirement 
for definitization to 150 days. According to local command officials, 
if 150 days from UCA award is surpassed, management expects continuous 
updates on the status of definitization.
    [Clerk's note.--End of questions submitted by Mr. Murtha.]


                                      Wednesday, February 24, 2010.

                      COMBAT AIRCRAFT REQUIREMENTS

                               WITNESSES

REAR ADMIRAL DAVID L. PHILMAN, U.S. NAVY, DIRECTOR, AIR WARFARE 
    DIVISION
MAJOR GENERAL DAVID J. SCOTT, U.S. AIR FORCE, DIRECTOR, OPERATIONAL 
    CAPABILITY REQUIREMENTS, DEPUTY CHIEF OF STAFF FOR OPERATIONS, 
    PLANS AND REQUIREMENTS

                      Opening Remarks of Mr. Dicks

    Mr. Dicks. The committee will come to order.
    This is maybe a little bit out of sync here, but I just 
would like us to have a moment of silence in remembrance of the 
chairman, Mr. Murtha.
    [moment of silence.]
    Mr. Dicks. Thank you.
    This morning the committee will hold an open hearing on the 
state of the Defense Department's combat aircraft programs. We 
are pleased to welcome Rear Admiral David L. Philman, U.S. 
Navy, Director, Air Warfare Division, and Major General David 
J. Scott, U.S. Air Force, Director, Operational Capability 
Requirements, Deputy Chief of Staff for Operations, Plans and 
Requirements.
    Admiral Philman and General Scott, we find ourselves at an 
interesting crossroads in the history of combat aircraft 
acquisition. The production lines for the Nation's legacy 
tactical aircraft, the F-18 and the F-22, are either shutting 
down or on the verge of shutting down. The replacement jet, the 
F-35 Lightning 2 Joint Strike Fighter aircraft is still in 
development and testing and on the verge of ramping up to high 
production numbers. However, just last month, the Department 
announced a 13-month delay in the program. This delay is 
especially worrisome for the Navy and the Marine Corps, which 
is already forecasting a Strike Fighter shortfall in excess of 
100 to 150 jets in 2014.
    The committee is anxious to hear updates on other combat 
aircraft acquisition programs, such as the Navy's E-2D Advanced 
Hawkeye early warning aircraft and the PA-8 Poseidon multi-
mission aircraft and the Air Force next generation bomber, as 
well as how the Air Force plans to satisfy future electronic 
attack aircraft requirements that are currently being satisfied 
by the Navy EA-6B Prowlers.
    Admiral Philman and General Scott, we are looking forward 
to your testimony and a spirited and informative question and 
answer session.
    Before we hear your testimony, I would like to call on the 
ranking member and our former chairman, my good friend Bill 
Young, for his comments.

                          Remarks of Mr. Young

    Mr. Young. Mr. Chairman, thank you very much, and I look 
forward to this extremely important hearing. But I wanted to 
make a comment to follow yours about Jack Murtha.
    Jack and I worked together on this committee for nearly 30 
years. I was chairman twice, he was chairman twice. But when we 
produced a bill, the bill was basically the same, no matter 
which one of us signed on as chairman. We just had that 
tremendous relationship. I am sure we will have that same 
relationship with you because of the long time that we have 
spent together.
    Anyway, thank you for recognizing a moment of silence.
    Mr. Dicks. If you would yield for one brief second, that is 
a tradition that has been on this committee. I have been on the 
committee for 31 years. That has always been the tradition, of 
working on a bipartisan basis. And at a time when that is 
difficult in some other places, I think that is something we 
really need to maintain and continue here on the defense 
committee.
    Mr. Young. Well, you know I have a tremendous respect for 
you and all of the members on our side have that same respect 
for you as well.
    But thank you very much, and thank you all for being here 
today. We look forward to your testimony.

                      Statement of Admiral Philman

    Mr. Dicks. Admiral Philman.
    Admiral Philman. Good morning, Acting Chairman Dicks, 
Ranking Member Young, and distinguished members of the 
committee. Thank you for this opportunity to appear before you 
to discuss the Navy combat aircraft requirements.
    Before I make my opening statement, I would like to convey 
to you my sincere condolences to the Murtha family. The United 
States Navy is grateful for the lifelong dedication of this 
true public servant.
    Chairman Murtha exemplified dedication to duty during his 
time in the Marine Corps as well as in the United States 
Congress. His patriotism and heartfelt concern for soldiers, 
sailors, airmen and marines helped define his life of service. 
In this time of sorrow, we will all be comforted in knowing 
that although we lost a great friend to the Navy and the 
country, his legacy will continue, as you have mentioned.
    Mr. Dicks. Thank you.
    Admiral Philman. I am pleased to share this time with my 
counterpart and good friend from the Air Force, Dave Scott. I 
am proud to report that the Navy's aviation community, 
comprised of aircraft, ships and weapons systems, continues to 
be a stabilizing force in the flexibility and capacity to span 
the globe.
    With last year's commissioning of the USS George H.W. Bush 
and the inactivation of our last conventionally-powered 
aircraft carrier, the USS KITTYHAWK, we now have an all nuclear 
powered carrier force. Currently comprised of ENTERPRISE and 10 
NIMITZ class ships, the Navy remains committed to maintaining a 
force of 11 aircraft carriers over the next 30 years.
    Our modern all-nuclear force provides an unmatched capacity 
to meet the Navy's core competencies; forward presence, 
deterrence, sea control, power projection, maritime security, 
and humanitarian assistance and disaster response. The Navy can 
execute these competencies quickly and decisively while 
operating in international waters without imposing 
unnecessarily political or logistical burdens on our allies and 
potential partners.
    Right now, Navy and Marine Corps carrier-based F-18 
aircraft are providing precision strike and support of forces 
on the ground in Iraq and Afghanistan. The Hornet and its 
brother, the Super Hornet, are the backbone of our Navy's 
ability to project power at shore. And without question, the F-
35 Joint Strike Fighter is essential to addressing our future 
Strike Fighter needs.
    Sustaining the Hornet fleet and transitioning to the F-35C, 
our first true fifth generation fighter, are critical to meet 
the Navy's national maritime strategies. We are recapitalizing 
the EA-6B Prowler with EA-18G Growler aircraft to perform 
rotational support to carrier strike groups and ashore in an 
expeditionary role.
    The Navy is procuring a total of 114 EA-18Gs to 
recapitalize the 10 fleet Prowler squadrons or 10 missile 
carriers and four in the expeditionary role. The first 
transition squadron at NAS Whidbey Island reached IOC last 
September, and full rate production was approved by OSD in 
December of 2009.
    While we continue to advance our platforms to face the 
current and future threats, we have also made great strides to 
improve our air-to-ground and air-to-air weapons systems. Joint 
weapons like the joint air-ground missile, the small diameter 
bomb, AIM-9X and AIM-120D are critical, not only to the Navy, 
but to the combatant commander's future warfighting capability 
and capacity.
    Acting Chairman Dicks, I thank you and the committee for 
allowing me to appear today. The committee's untiring 
commitment to the Navy is evident, and I thank you for your 
support today and into the future.
    I respectfully request that my statement be submitted for 
the record.
    Mr. Dicks. Without objection, it will be entered into the 
record.
    [The statement of Admiral Philman follows:]

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                       Statement of General Scott

    Mr. Dicks. General Scott.
    General Scott. Good morning, Chairman Dicks, Ranking 
Member, and members of the committee. Thank you for the 
opportunity to address this committee regarding your United 
States Air Force combat requirements. Before I give my opening 
statement, I would also like to convey my condolences to the 
Murtha family in this time of sorrow. His dedication and 
service to the Nation will always be remembered. His patriotism 
and special concern for combat troops touched those of us in 
uniform, no matter what service profoundly, and he will be 
missed.
    The Air Force remains fully committed to support today's 
global operations. Today's complex strategic environment 
requires Air Force capabilities to support the joint team 
across the full spectrum of operations.
    As you know, it is vital to remain a relevant force and 
acquire future capabilities necessary to underpin our Nation's 
long-term security. The Air Force believes the most cost-
effective plan is to accelerate the retirement of some older 
fighters to enable and reinvest into the remainder of the 
legacy fighters and bomber fleet, preferred munitions, and 
other key enablers as a bridge to the fifth generation fighter 
force, capabilities that are absolutely essential to counter 
advanced and highly lethal emerging threats.
    Our recapitalization strategy seeks to balance requirements 
for today and tomorrow. Our belief is we must improve our 
existing capabilities and pursue new, more capable systems to 
meet future threats.
    I thank you for the opportunity to address this committee 
and I look forward to your questions.
    [The statement of General Scott follows:]

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                   JOINT STRIKE FIGHTER COST ESTIMATE

    Mr. Dicks. Admiral Philman and General Scott, the cost 
estimate done by the Joint Estimating Team for the Joint Strike 
Fighter program shows a development shortfall of $3 billion 
over the previous estimate. What is being done to address these 
updated cost estimates with regard to funding the program? Will 
this funding shortfall impact the near term production 
quantities?
    General Scott. Sir, as you well know from the estimate and 
as we looked at what we need to do to reduce the risk in the 
program through the OSD and the Department and Air Force and 
Navy through the Joint Program Office, what we have looked at 
is how we can take this schedule with the funds that we have 
and move it to the position as well.
    We are taking $2.8 billion, putting it into RDT&E in the 
System Design and Development (SDD) phase, to enable us to take 
that schedule and get it further along. We are also taking that 
procurement ramp that was probably a little too aggressive and 
we are slowing it down. And what that is doing for the Air 
Force in particular is it will take about 67 aircraft out of 
our inventory, but in our mitigation plan, we are working that 
with all of our other plans with other fighters. But it will 
take us as we look at it, it will slip the ramp to 2016 before 
we will go from 48 to 80 fighters, and it also slips us to 
about 2016 for the timeframe for that.

                   JOINT STRIKE FIGHTER PROGRAM DELAY

    Mr. Dicks. Admiral Philman and General Scott, the 
Department recently announced a 13-month delay to the program 
to account for the findings of the Joint Estimating Team. How 
is it that the initial operating capability date in the program 
has not changed?
    Admiral Philman. Sir, the restructuring program is actually 
good for Navy. Since we put that procurement, those numbers are 
coming down. In the case of the Navy, or the Department of 
Navy, 55 aircraft will go back into fully funding that part of 
the program.
    The Navy has been on record for a 2014 IOC. Certainly a 13-
month slip is going to pressurize that. So with delaying 
delivery of aircraft, making it more concurrent so we have test 
aircraft delivered at the right time so we can test them on 
time and then delivered later on, I think is good, but will 
push our IOC out toward 2015, maybe later.
    CNO is tying IOC to specifically having adequate numbers of 
aircraft, having the right capability, in our case Block 3 
capability, and that testing has been done.
    Mr. Dicks. Give us a little flavor of what the reason is 
for this 13-month delay. I think we talked about modeling, the 
modeling that had been done.
    Admiral Philman. Yes, sir. The traditional development and 
testing of aircraft, you fly down data points, bring them down, 
so to speak. This program has been more advanced where we are 
using extreme amounts or large amounts of modeling so that we 
could build the aircraft and then be more predictive of the 
flight characteristics without actually having to fly the 
aircraft.
    That modeling is two things. The delivery of the aircraft 
has been slower than expected, and then what we are seeing in 
the actual flight hasn't necessarily validated the model. So 
now we are continuing to press back and have to go back and do 
more traditional testing for some time until we can get the 
aircraft mature enough to be more in line with a validated 
model.
    Mr. Dicks. Is this a software problem?
    Admiral Philman. Not within the aircraft. Now, there are 
software programs with the aircraft that continue to be 
drivers----
    Mr. Dicks. Sometimes in the past you put an aircraft there 
and do a software test for the program. Has that been done here 
on the Joint Strike Fighter? Where you have a test?
    General Scott. Sir, if I understand the question, when we 
do software modifications with an aircraft, sometimes the 
software modifications are behind the actual in the simulation 
piece, and they are behind. In this phase, they are concurrent 
with each other so they are working together. So the software 
as we do in the modeling and the software within the aircraft 
are the same. So if that answers your question----
    Mr. Dicks. But there are software issues, right? In the 
testing here----
    General Scott. Yes, sir, as with every phase of every 
aircraft we have done, there are software issues. As we go 
through the test phase, that is part of the Software Design 
Description (SDD) phase where Lockheed Martin with their 
subcontractors are looking at what those are and fixing them so 
that it can progress into the RDT&E and then into the Initial 
Operational Test (IOT) phase where the services will pick up 
the testing.
    Mr. Dicks. In the testing thus far, are there any serious 
defects in this aircraft that we have found that are a cause of 
concern?
    Admiral Philman. None to my knowledge, sir.
    General Scott. None to my knowledge in the Air Force 
either, but we will get back to you if there are any.

                 JOINT STRIKE FIGHTER PROCUREMENT COST

    Mr. Dicks. Admiral Philman and General Scott, while the 
committee applauds the attempt by the Department of Defense to 
fully fund the development portion of the program, it is not 
clear that a similar attempt has been made to properly price 
the procurement side of the program.
    Does the President's request for the Joint Strike Fighter 
program properly fund the procurement costs of the aircraft to 
include all components, such as the airframe, engine, 
government-furnished equipment, et cetera?
    General Scott. Sir, currently in the President's budget 
request for Fiscal Year 2011, yes, it does, as we look out and 
as we go across that particular time period with that. So we 
are satisfied with what we have requested in our budget from an 
Air Force perspective. I can't speak for the Navy or the 
Marines, but we are okay with that.
    Admiral Philman. Yes, sir, it is so for the Navy. It will 
be a problem in 12, and future issues are service integration, 
whether on the ships or in the training centers. That part we 
still have work to do.
    Mr. Dicks. Mr. Young.

                      AIR GUARD TACTICAL AIRCRAFT

    Mr. Young. Mr. Chairman, thank you very much. I suspect you 
are going to get a lot of questions about the Joint Strike 
Fighter today, so I am going to go in a little different 
direction. I want to talk about the Air Guard and the assets, 
fighter assets, that the Air Guard has and will have. But we 
understand that the Air Guard will begin to decommission its F-
16s in 2011. General, is that correct?
    General Scott. Sir, there is a plan for the retirement of 
aircraft starting in 2011 as we look out, and part of those 
aircraft are the older aircraft. I am sure you have heard in 
the Combat Air Forces (CAF) restructure, about 250-plus 
aircraft is what we are looking at. But in that reduction of 
aircraft, as we reduce the older fleet of aircraft, Block 25s 
and Block 30s and the F-16s, there is a plan to slide other 
aircraft into those.
    There is an Air Force plan as we work our redux, as we work 
our F-35 ramp-up, on how we will enable the Guard to maintain 
the capabilities that they have currently today. Obviously, as 
we go through a process, if we shrink the force, the force will 
shrink equitably between the active component and the Air 
Reserve component. But right now, with General Wyatt and the 
Air National Guard, they will have the capabilities.
    The other thing we are doing with aircraft as we look at 
them to mitigate some of issues if the F-35 slips further, is 
to do some modernizations in Service Life Extension Program 
(SLEP). We believe in the 2530 realm that we can increase their 
flight hours, and we call it equivalent flight hours versus 
actual flight hours, and increase their economic service life 
to about 10,800 hours, which will take them just to the outside 
of 2017 and the capability with their Block 25s and Block 30s. 
So we are looking at that mitigation plan also and how to 
incorporate that into our program.
    Mr. Young. Well, it sounds like you have given considerable 
thought to this, but the information that we have had is that 
we could have as many as half of the Air Guard fighter units 
without aircraft by 2022.
    General Scott. Sir, if you look at the flow plan with the 
Block 40s, Block 50s and the F-35s, I do not believe that is 
true. I will get back and get you the exact numbers on how that 
will occur.
    [The information follows:]

    The Air Force believes strongly in the Air National Guard, and its 
warriors are a valuable part of that Air Force total war-fighting 
capability. The Air Force plans to retain as many Air National Guard 
units as possible; however, the future composition of Air Force fighter 
forces is changing and will continue to evolve. New missions are 
emerging that will require commitments from both Active Duty and 
Reserve components. The Air Force may transition Air National Guard 
units that are losing older F-16s to a different more relevant mission 
set.
    As you know, there has recently been a restructure to the F-35 
program to overcome challenges in production and test. These may cause 
the Air Force's initial operating capability to potentially slip until 
2016. For those Air National Guard units that may receive F-35s, this 
will impact aircraft availability and will also cause us to adjust our 
timeline to transition from the F-16. Until we have greater clarity in 
the F-35 program, we will not be able to fully detail this transition.

    But there is a plan as Operations (OPS)-1 for the F-35 
stands up, which is an F-16 base, those aircraft, which are 
Block 40s, will transition to the Air National Guard, which 
will then enable us to transition older fighters and retire 
them out. So there is a plan as we move the dominoes and 
aircraft around, to allow both the Air Reserve component and 
the active component to have the right number of aircraft to 
enable them until their missions.
    Mr. Young. General, does it appear that the Air Guard will 
be without a substantial number of aircraft until that 
program----
    General Scott. No, sir, it does not.
    Mr. Young. That is good news, because we were sort of led 
to believe that that might be the case.
    General Scott. Sir, as you well know, there are five 
reports coming to Congress totally covering the fighter 
structure, the CAF restructure, and different parts of that. 
Those will start coming over here on 1 March through 1 April. 
Those go into a lot greater depth and detail of the plans we 
are looking in the CAF restructure, things that we are doing 
with the F-22 and other fighter force structure.
    Mr. Young. That will be good. One more question on the Air 
Guard. What about the F-15s?
    General Scott. Sir, what we are doing with the F-15s is 
called a long-term program. There are 176 of those aircraft 
that we will upgrade with the Active Electronically Scanned 
Array (AESA) radars. We will also give them some electronic 
warfare and Infrared Search and Track (IRST) capabilities that 
will enable them to extend their service life out to a much 
longer period of time. And in the F-15, what you will probably 
see, which you will see, is those will transition mostly to the 
Air National Guard as the F-22 aircraft stand up in the active 
component.
    Mr. Young. So you say that there will be no downgrading of 
the Air National Guard's capability to go to war with the 
regular Air Force?
    General Scott. No, sir. The F-15 long-term Eagle will have 
much better capability than the current F-15 does, and as they 
transition from Block 25-30 to 40s and 50s, they will have the 
capabilities in those aircraft also. And part of the plan as we 
look at the 40s and 50s, again looking at the F-35 program, 
there are things that we need to do to that. And there is in 
study and analysis a long time Viper F-16 program on what we 
need to do with the AESA radars, with the IRST capabilities and 
with Digital Radio Frequency Modulations capabilities.
    Mr. Young. General, thank you very much. I appreciate that.
    Thank you, Mr. Chairman.
    Mr. Dicks. Mr. Moran.

                   TACTICAL AIRCRAFT INDUSTRIAL BASE

    Mr. Moran. Thanks very much, Mr. Chairman, and thank you 
for your comments about our chairman. As you know, we wish you 
all the best and look forward to working with you. But I know 
you share all of our sentiments. This is the last way you would 
have wanted this to happen. So it is nice to recognize Jack. We 
appreciate that.
    What I would like to ask you about right now, Admiral 
Philman and General Scott, is our industrial base. After we 
complete the F-18 program, which is going to be in a few years, 
there will be one single contractor providing virtually all 
tactical aircraft, and I wonder if you have a concern. The 
committee has expressed its concern, for example, in the need 
we thought to have an alternative engine so you can have some 
measure of competition with the F-35, because we are going to 
build over 2,000 of them, we are going to be selling them 
overseas, yet we are relying upon one contractor.
    Would you address this issue, which has been of continuing 
concern to the committee, our over-reliance upon a single 
contractor, even as effective as they may be?
    Admiral Philman. Certainly that is how our economy is 
established, for competition. In the case of the fighter world, 
the folks in Lockheed Martin are building the F-35, and that is 
coming along nicely. We talked about some of the issues, but I 
predict we are going to work our way out of that.
    The Hornet line in St. Louis is there. I am comfortable 
that we are buying enough airplanes now and into the near 
future that that line will remain hot so that we can understand 
better the production capability of the Joint Strike Fighter 
and not shut that down before we have a full understanding that 
that production line is going to meet our Strike Fighter needs.
    In the case of the Navy, we are buying airplanes, F-18Es, 
Fs and Gs, through fiscal year 2013, with a delivery in 2015. 
So that gives us some flexibility, I believe.
    Mr. Moran. I hear your response, but, you know, I think the 
best example of the committee's concern was the need for an 
alternative engine. Now you say no, you don't need two, we can 
have total reliance, even though we are talking about more than 
2,000 F-35s. We are not critical of the single contractor, but 
it is kind of a philosophical issue. It really goes to the 
heart of what we are about, competition, trying to keep costs 
low, trying to ensure that there is that monitor, that we don't 
have monopolistic control.
    I suspect I know what we are going to hear, but I think it 
is important to share the concern with the committee. Did you 
have anything you wanted to say?
    General Scott. Sir, I would agree with you that, one, 
competition is extremely good, and two, we are worried about 
the industrial base. I am sure when we start talking about 
long-range persistent strike and platforms in that area, as we 
look at the funding of the industrial base. So we are concerned 
about that.
    One thing I will tell you, Admiral Philman and myself sit 
on an organization called the Joint Air Dominance Organization 
where we look at the Navy, the Air Force and the Marines and 
where we are today and where we are going in the future.
    For a tactical aircraft, we are already looking at what is 
the next generation air dominance platform. If you look at 
economic service life (ESL) timelines, we have to start 
understanding service life on the F-22 and the F-35: what are 
their economic service lives? In addition, with the F-18 and 
the F-16 and the F-15, and their ESL will approach quicker.
    So I believe that you will see, not in the very near 
future, but pretty close, you will start seeing us talking 
about where we are going in the tactical fighter realm from an 
air dominance, and what we need to look at in the future if you 
want to call it a sixth generation fighter, I will just call it 
the next generation air dominance fighter, whether it is manned 
or unmanned, will help the industrial base. I also believe the 
long-range persistent strike will help that, too.

               LONG RANGE STRIKE AIRCRAFT INDUSTRIAL BASE

    Mr. Moran. Well, that is a good point, and in that context, 
after terminating the next generation bomber this past fiscal 
year, the one we are still in, really, this next year's budget 
includes $200 million to support a long range strike industrial 
base. We don't really have any idea. What are you going to do 
with that $200 million? What is your plan for that?
    General Scott. Sir, the Assistant Secretary of the Air 
Force Acquisition staff are actually the folks that will be 
monitoring that. But what we are looking at is the technology 
we started in the next generation bomber. We want to make sure 
that base of knowledge, that industrial piece, and those folks 
that were working that, are still in place if we go in a 
similar mode as we do this next study and figure out where we 
are going with what I will call long-range strike, long-range 
strike being an umbrella, a family of systems where you have a 
penetrating capability or you have a standoff capability or you 
have what we will call a conventional prompt global strike 
capability. But those are the things we will be looking at the 
industry to look at for us through our SAF/AQ folks in 
monitoring that $200 million.

                      COUNTERING ELECTRONIC ATTACK

    Mr. Moran. Okay. Thank you. Just one last, I hope we can 
make it a quick one. But there also seems to be an over-
reliance, at least the Chief of Staff of the Air Force has 
cited an over-reliance on the GPS system in countering 
electronic attack. Do you share those concerns?
    General Scott. Sir, obviously in the environment we are in 
and at a level we can talk now, yes, we are very concerned with 
the denial of Global Positioning System (GPS). We are looking 
at that. I think you all know that we have a space adversary 
squadron that helps us in exercises so that we can exercise in 
those environments with the platforms both across all services, 
not just the Air Force as we go into the Red Flags and up in 
Alaska and down there at Nellis.
    So we understand that. We are exercising to that 
capability. We are looking at ways that we can improve our 
inertial navigation systems, or doing some encryptions with 
different things we have with our impact GPS capability.
    So we understand that. And it is not just a platform 
sensor. There is also the weapons piece of that. So as you tie 
those two together to make sure that you are working those in 
congruence, so that at the endgame, in the environment that 
could be out there, that the weapon does what it needs to do.
    Mr. Moran. Thank you.
    Mr. Chairman, thank you. Again, we look forward to 
following your leadership on this committee.
    Mr. Dicks. Mr. Frelinghuysen.

                    TACTICAL AIRCRAFT OPERATION COST

    Mr. Frelinghuysen. Thank you, Mr. Chairman. First of all, 
we all salute the combat pilots and crews and all those who do 
the remarkable work that they do each and every day. Certainly 
I believe hopefully we still have what used to be called 
overwhelming superiority. But the second comment is I worry 
about what the Russians are doing, the Chinese are doing, the 
Indians are doing, the collaboration between those military 
forces.
    But I would like to focus on what was described a few 
minutes ago as the economic service life issue, particularly as 
we look at the Joint Strike Fighter.
    It is my understanding that the Navy has developed a 
report, and I think the report's name is the Joint Program's 
Total Operating Cost Affordability Report, that indicates that 
each flight flown by the Navy and the Marines F-35s will cost 
$31,000 in 2029. This compares with $19,000 in current flight 
hour operating costs for the F-18s and Harriers.
    Admiral, can you outline or elaborate on these numbers and 
explain to the committee how worried we should be about these 
figures?
    Admiral Philman. Sir, it is a valid worry. We are looking 
very closely at that. The CNO is very, very captured by the 
total ownership cost in all of its platforms, end to end, 
manpower, flight hours, all the pieces and parts that go into 
that calculus. But that is being developed, the report you are 
talking about is being developed by Navair Systems Command, and 
I don't think I can address it directly for you, but I will get 
you that answer.
    [The information follows:]

    The Navy encourages its program managers to study the total 
ownership costs of new and existing systems, and the Naval Air Systems 
Command (NAVAIR) estimate of JSF cost per flight hour is consistent 
with goal. It is not prudent to make conclusions on the total ownership 
costs of JSF based on the NAVAIR study alone. Navy has not yet 
completed operational testing of the carrier variant and flight hour 
costs are only one aspect of JSF total ownership costs. Understanding 
and controlling total ownership costs is a priority for the US Navy and 
we will continue to pursue ways to reduce our long-term operations and 
support costs for all our ships and aircraft.

    Mr. Frelinghuysen. Well, I assume the Air Force is familiar 
with this study.
    General Scott. Sir, from a requirements perspective, no, I 
am not. I would probably say that our AF/A8, General Miller, is 
probably more aware of it, but I will get involved with it. I 
do understand the O&M costs and the significant increase that 
we have gotten when we go into the F-22, F-35.
    Mr. Frelinghuysen. I am not setting up a potential dispute, 
but I understand there is some difference of opinion between 
the services on some of the conclusions of this report. What 
worries me is that obviously we talk about delay here, and 
there has been some delay and cost overruns. We have 
international partners. Don't they have a piece of this game 
here, and they have some anticipation?
    Admiral Philman. They do. They are watching us very 
closely. Part of the cornerstone of the Joint Strike Fighter 
program is affordability, and we are watching that very 
closely. I don't think there is a separation between the Air 
Force and the Navy on this regard, but there is----
    Mr. Frelinghuysen. But Congress is of the view that this is 
joint, that maybe somebody will get it earlier than the other, 
but that the carrying costs are pretty heavy here. We are all 
for it.
    Admiral Philman. Sir, I want to reiterate, it is a valid 
question and we owe you an answer. I will get you the right 
people to answer it for you.
    General Scott. Sir, if I could comment on the joint piece, 
I will tell you that the CNO, the Chief, and the Commandant of 
the Marine Corps, went down to the Lighthouse, which is a large 
facility down in Suffolk that enables us to do things. And the 
things that they have seen to make sure that we are working on 
all things joint was that the three four-stars went down there 
to learn about the F-35, all things that were working with the 
umbrella, dealing with the connectivity, with the data links, 
with the weapons systems and how we will interact.
    We are really working very closely, both through the Joint 
Program Office, both through the requirements piece and through 
the acquisition piece to make sure that we get this right and 
do these things together.
    Mr. Frelinghuysen. Well, I think we are reassured in 
hearing that. You don't have many options out here. You have a 
shrinking industrial base, one basic line that you are going to 
be dependent on. We need to get it right and we need to 
expedite whatever we are doing.
    Thank you, Mr. Chairman.
    Mr. Dicks. Mr. Rothman.
    Mr. Rothman. Thank you, Mr. Chairman. Let me echo 
everyone's sentiments about the appropriateness of 
acknowledging the passing of our friend and great chairman, 
Jack Murtha, a truly great man, great patriot, great American, 
and he will be missed at many levels.
    I also want to associate myself with the remarks of those 
who say how much they are looking forward to working with you, 
Mr. Chairman, not only because of your experience, but also 
because of your commitment to the kind of nonpartisan approach 
to our work here, as well as the kind of accessibility that has 
been afforded to each of the members to make a contribution and 
to learn.
    Mr. Dicks. Thank you.

                    JOINT STRIKEFIGHTER CAPABILITIES

    Mr. Rothman. Admiral and General, thank you for being here. 
Thank you for your distinguished careers of service, really 
remarkable. I have said this before in other hearings, we hope 
that your present service will be the best work of your careers 
until the next level. But we need you to be operating at your 
best as well. So, good luck to you and all of those who work 
with you and under you.
    A couple of general questions, and I do understand the 
nature of this being an open hearing. Can you respond though 
generally to the capabilities of the Joint Strike Fighter 
versus the kinds of comparable aircraft that are coming out of 
Russia and China, in general terms? Will our aircraft be 
superior? Will we have a qualitative military edge? 
    Admiral Philman. Yes, sir. I believe that to be true. It is 
designed from the very beginning to work into what we call an 
anti-access environment. So all the things that are resident in 
the aircraft, designed in, the sensors, the weapons systems, 
the interconnectivity that was mentioned by General Scott 
earlier, all enable this aircraft to go deep and do this work 
at all odds.
    So, the other countries are building aircraft that are very 
capable and we keep our eye on that with good reason. So the 
whole system of systems, not only the F-35, but the Enabler, 
the E-2D and the Airborne Command Control that the Air Force 
has, our ships, our command and control over the ground, I 
think it all plays in.
    So from a greater standpoint, the F-35 fits into it to 
accommodate our ability to work unimpeded in almost any 
environment.
    General Scott. Sir, what I will give you is an example. The 
F-35 is very complementary to the F-22, different missions, but 
capability-wise and what that does. I have been a fourth 
generation kind of fighter pilot. I have flown against the F-
22, and there is no aircraft today that matches that aircraft. 
And the F-35, for the complementary missions that it does 
today, will be very similar to that. So I am very, very 
satisfied that today and where we are, that where we can fight 
and do the things, we are the best.
    Mr. Rothman. Obviously we are projecting the use of the 
Joint Strike Fighter many years out into the future, and I am 
certain that you have considered our potential adversary's work 
in the future as well. So they are not going to be staying at 
home just twiddling their thumbs. They are working on ways to 
match or overcome our Joint Strike Fighter.

                       ELECTRONIC ATTACK AIRCRAFT

    But I know my time is limited, and it fits in with the 
general pattern and what the Admiral was saying about how it 
fits into the general whole of our air superiority. But I am 
very concerned about electronic warfare and the jamming of 
their systems by us and the acquisition of our superior 
aircraft at early times by our enemies sufficient enough to 
give them the opportunity to deny us air superiority. That 
concerns me a lot.
    Are you worried about that enough, and are we doing enough 
to address what I consider to be in a way an asymmetrical 
threat, folks who don't have aircraft like ours and other 
capabilities like ours, but can acquire us far away and at 
great heights and then knock us out?
    Admiral Philman. Yes, sir. Without question the adversaries 
continue to exploit the electromagnetic spectrum at much 
reduced costs of what we do to counter their efforts. Right 
now, I mentioned that we are recapitalizing our Prowler 
squadrons the EA-18G. That is going to be 10 squadrons on the 
ships and four expeditionary squadrons, plus the Marines. That 
is an excellent platform and has great capability. But it is 
only a piece of the puzzle.
    There are other parts. The Joint Strike Fighter will have 
resident capability to be able to work within that and 
contribute that system, as will almost every other airplane we 
have. We have gone to places. We have some very good modeling 
centers. The question was asked earlier how is this working, 
are you worried about this developmentally. We worry about what 
the adversary is building, how they can counter us. We are 
trying to model their capabilities and then we will work our 
way through countering those before they ever even fly, making 
those capabilities resident in not only the F-35 and the EA-
18G, but the rest of the force as well. I believe that is true 
for the Air Force.
    Mr. Rothman. And your budget request for fiscal year 11 is 
sufficient to pursue those capabilities to your satisfaction?
    Admiral Philman. Yes, sir, for the Navy.
    Mr. Rothman. For the Air Force as well?
    General Scott. Yes, sir. I will pile on to what Admiral 
Philman said. It is a family of systems. It is not one system, 
as you said, like with the fighter itself. It is how you cover 
that entire spectrum, that electronic magnetic spectrum. What 
we don't want to do between the two and three services is to be 
redundant. There will be overlap in how we cover that spectrum. 
But we want to make sure that between the three services and 
the fiscal realities that are out there, that we have got it 
all covered. And I think we do a very good job of that with the 
organization that I previously mentioned on how we want to 
spend our funds to make sure that we are covering the spectrum 
today and as we look into the future. And in a closed session, 
Mr. Chairman, we could actually get into a lot more details 
about those capabilities.

                        MISSION CAPABILITY RATES

    Mr. Rothman. One last thing about the maintenance. You 
were, General, comparing the superior qualities of the F-22 in 
a certain way to the Joint Strike Fighter. It has been said 
that the low observable maintenance for the F-22 has led to 
substantial decreases in mission capability rates and that 
there is the same low observable maintenance proposed for the 
F-35 and there is some concern about decreases in mission 
capability rates for the Strike Fighter.
    Do you share that view?
    General Scott. What I will share with you is that if you 
look at all our stealth capabilities starting with the F-117 
and the B-2 and now the F-22 and working our way to the F-35, 
we have always started off with lower rates. We look at it from 
four areas. We look at it from the material, the system, the 
management of that system and the manpower. And part of it just 
is how are we teaching these young men and women, these young 
Airmen that are out there that are working on this material, to 
enable them to make sure that they are doing the right things.
    We have made great strides. If you go back and look at the 
F-117 and look at the mission capable (MC) rates and the 
ability that we learned from low observable (LO) maintenance 
and now we are applying it to the F-22 and we will also apply 
it to the F-35, and we are handing those lessons learned both 
to the Marines and the Navy to make sure we don't reinvent the 
wheel.
    I will tell you that the MC rates were low in the F-22. If 
you look at the trends, they have trended up. They do not 
currently meet what I will call the threshold and objectives or 
the Air Combat Command's MC rates. They are probably in the 
mid-60s. But they were well below that and the trend is up, and 
we believe we have reached that knee in the curve with the 
different places that we are working as we work those things.
    There will be different issues with different places that 
you place this aircraft. Obviously Holloman Air Force Base, New 
Mexico is a great place to have these kinds of aircraft because 
of the environment. And there are other things we are learning 
from, such as the environment and how that dictates to the 
things that happened to those kinds of materials.
    Admiral Philman. Sir, as was mentioned, the Navy is early 
to this game. The Super Hornet has some LO characteristics, but 
it is not a durable aircraft. So we are taking the lessons 
learned from the Air Force and applying it to the Navy's F-35C. 
Of course we are going to operate in a different environment, 
in the maritime, close to the water always. We will probably 
see some challenges that weren't there before, but we are 
capitalizing on every opportunity to learn from what has been 
done before.
    Mr. Rothman. Thank you, chairman.
    Mr. Dicks. Ms. Granger.

                     JOINT STRIKE FIGHTER QUANTITY

    Ms. Granger. Thank you very much. Thank you for your 
service and thank you for your appearance today.
    You have talked about the changes in the F-35 and that you 
are planning to buy 43 for 2011. My question is, the total 
requirement, it was at 2,443. Is that still the number, or has 
that changed?
    General Scott. Ma'am, I don't know the total requirement 
across the entire F-35. 1,763 is still the Air Force's program 
of record, and we are planning on buying 1,763. Across the 
Future Years Defense Program (FYDP) and where we are sitting 
right now, we are 67 less, but with the ramp up and where we 
are going to end up.
    As you well know, this is critical to the backbone of our 
Air Force. This is the replacement of the A-10 and the F-16. 
And as our Chief has said, this is the future of the fighter 
force of the United States Air Force from the global precision 
attack mode that we will be using this aircraft for. So we 
haven't changed the number.
    Admiral Philman. Likewise, ma'am, the F-35C in the case of 
the Navy is going to carry the water for us well into the next 
few decades. Our legacy aircraft will be supportive. But our 
program is 680 airplanes. That has not changed in quite some 
time. The actual mix has yet to be determined. The Commandant 
of the Marine Corps and the CNO have an agreement that we will 
address that when we have enough data to make that decision. 
When I say the mix----
    Mr. Dicks. That is both the Navy variant and the Marine 
Corps variant?
    Admiral Philman. Yes, sir, that is correct. So the 
Department of the Navy is 680 aircraft. They will be divided up 
between the Navy and the Marine Corps, the F-35B, which is the 
STOVL version, and the F-35C, which is the CV version. That 
decision is yet to be made.
    Ms. Granger. Thank you very much. I know that the previous 
plan called for as many as 80 Air Force versions and 50 Navy-
Marine Corps versions. Do you know when you will have a steady 
state annual production number?
    General Scott. What we are being told is that in 2016, the 
ramp will go from 48 to 80. That was the initial ramp, the 
initial procurement buy. And that in 2016, initially prior to 
the restructure it was 2015, and we are looking at the ramp now 
in 2016 to be at the 80 buy.
    Admiral Philman. Likewise, ma'am, the restructure will 
cause some perturbation and move it to the right to some 
extent, but the steady state I think is 50 for the Navy.
    Ms. Granger. I am sorry, what did you say?
    Admiral Philman. The steady state I think is 50, but when 
that will occur we will have to see, where there is uncertainty 
now with the restructure. But for us, for the Navy anyway, the 
restructure does allow for more logical ramp-up. So we are 
taking the ones that we are taking now in a more logical step 
so they can flow into testing and then delivery for a fleet of 
airplanes in a more logical way. So the restructure comes at a 
pretty good time for the Navy.
    Ms. Granger. Thank you both.
    Thank you, Mr. Chairman.
    Mr. Dicks. Ms. Kilpatrick.

                             AIR DOMINANCE

    Ms. Kilpatrick. Thank you, Mr. Chairman. I too want to add 
my remarks in terms of just you, who you are. I have been to 
your district. I know the commitment. For 30 years you have 
been on this committee. I am sure we will continue the legacy 
of our chairman. It is heavy for me this morning, I am sure it 
is heavy for everybody. But thank you for your service.
    Admiral, General, good morning. It has been very 
instructive, and I have been reading yesterday evening and this 
morning still to a word, and you both have said it, air 
dominance. General, are we number one or not?
    General Scott. Yes, Ma'am, by far. No one comes close.
    Ms. Kilpatrick. That is what I want to hear. Admiral?
    Admiral Philman. Yes, Ma'am. No question. No one else comes 
close.
    Ms. Kilpatrick. That is important, particularly in the 
world today and how we are going in Afghanistan. It is totally 
different, as you well know.
    General Scott. And Ma'am, I will tell you why that is 
important. Not since 1953, the Korean War, has a Soldier, 
Sailor, Marine or Airman on the ground been attacked from the 
air, and that is the air superiority that these three services 
give the folks on the ground. And it is not just soldiers. 
There are, as you well know, in Afghanistan and Iraq, all four 
services, to include the Coast Guard, are on the ground there.
    Ms. Kilpatrick. And that is important, this whole joint 
effort. And being new on the committee, just learning that and 
how you work together is awesome in my opinion. I have been to, 
as I mentioned, a few of the districts and in Iraq. I have seen 
the young men and women, 75 percent of them between 17 and 25. 
They are babies. I am a grandmom. So that is something for me, 
totally committed, doing their mission.

                 JOINT STRIKE FIGHTER ALTERNATE ENGINE

    I want to go back to the second engine thing of the F-35. 
General, I heard you say that F-22 was what you like for what 
it does. That is the aircraft you have flown and is superior.
    General Scott. I have never had the opportunity. If you can 
find a way to get me into an F-22.
    Ms. Kilpatrick. Oh, you haven't done it. I misunderstood.
    General Scott. No, Ma'am. I have flown against the F-22. 
What I will tell you, having flown against many a different 
aircraft across the inventory, the F-22 is without a doubt the 
air dominance aircraft that you want supporting your troops.
    Ms. Kilpatrick. So the F-35 we are moving to in terms of 
the Joint Striker effort?
    General Scott. It is a complementary aircraft. If you look 
at when we take the two missions and the mission sets, the two 
of them complement each other to enable them for the joint 
commander that is running the campaign to be able to do 
different things with the different fighters.
    Ms. Kilpatrick. I see. And together they increase that 
dominance?
    General Scott. Yes, Ma'am, they do.
    Ms. Kilpatrick. Chairman Murtha always talked about the 
second engine. I think this committee has put in I think it is 
over $1.7 billion to begin development of that. The Department 
has always said no, they are not going to do it and really have 
not moved. Inasmuch as we are in combat, it looks like forever, 
unfortunately, why? Can you speak to that? If that is over your 
head, if it is, just say that.
    Admiral Philman. Ma'am, there are two different models of 
the engine. With it comes your basic sustainment, your 
logistics, the expertise to install or remove the engine and 
all the things that go with that.
    In the case of the Navy, within a very large population of 
airplanes that are going to be out there for the F-35, but for 
us 680 airplanes, and the way that we envision and we do 
operate them on the amphibious ships and the aircraft carriers. 
So keeping a smaller pipeline so that we can have a more skinny 
down logistics at sea, the sustainment and the types of engines 
we would have to store on the aircraft carrier, it makes the 
most sense for us to have one engine type.
    Ms. Kilpatrick. So then should this committee withdraw its 
1.7 billion in that effort and rely on you guys who we think we 
don't know anything to move forward?
    Admiral Philman. I don't mean to insult the committee.
    Ms. Kilpatrick. I don't mean that facetiously. I am 
serious. Because one thing about this Congress, they don't 
understand $630 billion to defense when we don't have housing, 
health care, and education and other things properly funded. So 
we have to rearrange dollars. I want the most.
    I am totally committed to the national defense of this 
country and to the young men and women and their superiors who 
protect us, but I think we have to be smarter as we move 
forward. And what you just said, Admiral, and that was like a 
nice little 30 second something, that was good. I am a former 
teacher. I received it.
    But I am concerned. I don't know that we keep appropriating 
this if you are not going to use it. Chairman Murtha didn't get 
here by happenstance. He was a decorated Marine, an 
intelligence officer. So I mean he had to have some reason to 
continue the funding, and I am wondering if we ought to 
continue it.
    General Scott. Ma'am, from the Air Force perspective, and 
the Chief talked about this with the Secretary yesterday at his 
hearing, as we look at the cost of the second engine and we 
look at the cost of the aircraft, what we don't want to do is 
decrease the amount of aircraft that we buy. Competition is 
good. But the fact if you look at the F-22 is a single engine, 
if you look at the F-18, it is a single engine, we have over 
the last 30 years done a lot of work with engines, and 
currently with what we have done with this particular engine, 
we are satisfied through the tests and where it is at, that 
this will be the engine that we want. And it is in the low rate 
initial production (LRIP) right now for the first ones that are 
coming out.
    Mr. Dicks. Will the gentlelady yield just for a second? Our 
staff has been told repeatedly by the former program manager 
that the biggest problem they had was with the engine of 
record. Now, I am new to this issue, but is that true? Are most 
of the problems with the Joint Strike Fighter with the engine?
    Admiral Philman. There were issues with the engine early 
on, sir. But right now, we are beyond that. We are already 
receiving LRIP engines to be delivered to production aircraft. 
It is on the ground. The total test on the engine exceeds I 
believe 13,000 hours. So I believe the manufacturer and the 
program has gotten beyond that point. So we have a reliable 
engine that we can use right now.
    Mr. Moran. The chairman is absolutely right. The program 
manager testified to this committee it was the engine that was 
the cause of the delay.
    Admiral Philman. Yes, sir. I am not sure when that 
testimony occurred. But----
    Mr. Dicks. We are glad to hear that. We don't want this not 
to work. But we want to know what the facts are.
    Admiral Philman. To my knowledge, this engine is 
performing, and we haven't had any airborne emergencies with 
the engine, and on-the-ground testing----
    Mr. Dicks. Maybe that is the reason the program manager is 
no longer the program manager. Anyway, I yield back to Ms. 
Kilpatrick.
    Ms. Kilpatrick. That was a good way to end that. And why is 
he not the program manager any longer? Don't answer that.
    I will just go back and I am finished. Chairman Young 
mentioned, do we have enough fleet? Are we going to be short? 
Do we have enough war fleet to do the job? We are in a war and 
a half right now. I mean, the F-35 sounds like it is a good 
one, but you don't want another engine. Air dominance, can we 
sustain it?
    General Scott. Yes, Ma'am. We currently have and in the 
plan with mitigation from an Air Force perspective, if you are 
looking at our fighter force structure, we are right now at 
what we will call a 2,000 number for a total aircraft 
inventory, approximately 1,200 combat coded aircraft. If you 
look out in the outyears, there is, as the Chairman has 
mentioned, with the Navy, there is a bathtub, if you want to 
call it that, in about 2024 of about 185 aircraft. There is 
mitigation that we are working right now. One of them is with 
the 176 F-15s to increase their length. One of them is with the 
Block 40s and Block 50s to modernize that fleet. But we look 
yearly if not daily at where we sit today and where we want to 
be in different segments of our force structure.
    We also want to make sure we have the right balance. Today 
we have eight percent fifth generation aircraft. In 2024, which 
is the segment we look at, we have 51 percent fifth generation 
aircraft. As we start looking at that capability, the fleet 
size, because if you look at what those aircraft can do 
compared to the fourth generation, they can do a little bit 
more. So do we need 4.5 F-16s? And we are working those 
analyses with our folks that do that kind of stuff.
    But we are trying to make sure we have the right balance in 
the fleet. And that goes with manned and unmanned as we look 
out to the outyears. But there is work that we are doing. We 
are at a medium risk, but we are satisfied that we can support 
the Nation with the fleet that we have in the United States Air 
Force.
    Ms. Kilpatrick. We rely on you experts, who have given your 
life and dedication to your current positions and before, to 
make those determinations. That is not what we do here at this 
committee. But we certainly want to be in the realm of 
appropriating what is appropriate and at the same time safe for 
the country.
    Thank you very much for your testimony.
    Admiral Philman. Ma'am, if I could add to that from the 
Navy perspective, we have enough aircraft now to conduct our 
missions, but there is looming out there with the delay of the 
Joint Strike Fighter and as we are using up the life of our 
legacy Hornets, we are concerned about that. So we are doing 
everything we can to make sure we extend the life, use our 
aircraft appropriately, and in the case of the legacy Hornets, 
the A through D, down to the squadron level, we have a service 
life and management program where the squadron commanding 
officer actually allocates how the aircraft will be used, how 
many catapults and arrested landings it will have, what kind of 
particular mission they would be used on, so we can work our 
way through potential shortfalls.
    Ms. Kilpatrick. Thank you.
    Mr. Dicks. Mr. Visclosky.

                         NEXT GENERATION BOMBER

    Mr. Visclosky. Thank you, Mr. Chairman.
    I apologize for being late and simply would make the 
personal observation that I find myself saddened that Mr. 
Murtha is not with us obviously. It is a fundamental change as 
far as the work of the committee.
    But I appreciate your long work, your expertise, and you 
will do an excellent job, and I certainly want to be supportive 
in any way because I know also we will continue in the 
bipartisan fashion and the diligence that we have in the past, 
so I appreciate that very much.
    I have particular concerns, gentlemen, with the alternative 
engine. It is my understanding, and obviously the gentlewoman 
from Michigan has discussed it with you as well, that that has 
been covered, so I will not have specific questions except to 
reiterate my concern that I do think there is a value in 
competition.
    Having a concern generally about the industrial base in 
this country and the fact that some day we are not going to 
make anything here. And whether it is the Pentagon or the 
Department of Transportation or any other agency of the 
government, if we only make one of everything, pretty soon we 
are not going to make anything here. And I certainly want to 
add my voice of concern and to note for the record that over 
the last 4 years, the subcommittee has provided $1.7 billion 
for an alternative engine because of the importance we attach 
to it.
    What I would want to focus on at this point is the next 
generation bomber. And, General, I would like to know what the 
requirements and capability you would be looking for in that 
next generation. Would you anticipate it would be manned or 
unmanned as far as the vehicle?
    General Scott. Sir, in the manned and unmanned requirement 
that will be part of the subject that OSD is looking at. Right 
now, I would say--I don't want to say we are agnostic, but we 
are waiting. We believe that, other than personally, depending 
on what we do the capabilities of that aircraft, if that 
aircraft ends up with some type of nuclear mission, then I 
agree that it ought to be manned. And those will be things and 
those will be in the study as we look at it.
    But as you look at what is the capability, whether manned 
or unmanned, in the realm of possibility, sir, either one of 
those could work if you start to look at those kinds of 
technical maturations and where we are at. It just depends on 
what we do with it.
    Mr. Visclosky. What is your time frame and acquisition 
costs?
    General Scott. Sir, we don't have any acquisition costs 
right now. As you, know, you all helped us and we put some 
money in the industrial base for 2011. We are looking at this 
study to affect 2012, but we are looking at fiscal 2013 to 
start working the aegis of where we are going to go with this 
particular program and the requirements that we have looked at.

                    MODERNIZATION OF LEGACY BOMBERS

    Mr. Visclosky. And can I ask you about modernization 
requirements for the existing bomber fleet and what you 
anticipate that looks like over the coming 2 to 5 years?
    General Scott. Because of the ability to continue the B-1 
and the B-2 and the B-52, we kind of look at it in four realms: 
how are we going to sustain it; the lethality of the aircraft; 
the responsiveness of the aircraft; and the survivability of 
the aircraft. Of those three aircraft, bomber sustainment and 
modernization funding over the FYDP totals $5.8 billion with 
approximately $1.2 billion for both the B-1 and B-52 and $3.4 
billion for the B-2.
    As we look at the different things as we sustain lethality, 
one of the things we want to look at on these bombers is 
advanced targeting pods. Can we put those kinds of things on 
these bombers? Greater modernization on the B-2. The defense 
management systems on the B-2. Some of the connectivity as we 
look at analogue versus digital, the B-52, the B-1, and those 
three bomber fleet that we are looking at, we want them to have 
that beyond-line-of-sight capability as so they are sitting 
here working with the satellites, they can talk with the 
different aircraft that are in the air.
    So we are aggressively looking at those three aircraft in 
the modernization program across the FYDP. That is part of our 
phase, because we look at the phase of what I will call long-
range strike. We want to sustain the legacy fleet that we have 
as we start looking at the tech maturization of what will be. 
And then we also want to start looking at the standoff 
capabilities.
    In phase two, then, we are hopefully into a long-range 
strike capability standoff bombers. We might start looking at 
that point, is there a possibility of retiring? And then we get 
into the phase three where we have the long-range persistent 
strike platform.
    Mr. Visclosky. Thank you very much.
    And again, I do have a serious concern about that 
alternative engine issue.
    Mr. Chairman, thank you very much.
    Mr. Dicks [presiding]. I will yield to Mr. Hinchey. But let 
me ask one question. The B-2 can penetrate. And the others 
basically have to stand off. You use long-range cruise 
missiles. In looking at the next generation, wouldn't the 
ability to penetrate still be an important issue whether it is 
manned or unmanned?
    General Scott. Sir, from the Air Force perspective, we 
believe that this aircraft needs to be a long-range persistent 
and anti-access environment platform. In other words, it needs 
to penetrate into the anti-access environment. That is the 
requirement. We want it to be survivable. We want it to have 
the right range and payload to be able to get into the 
environment of the anti-access environment. Those are the 
requirements we have stated.
    Mr. Dicks. Is $200 million enough money to get it together 
doing the work that they have been doing, or should there be 
additional money added by the Congress?
    General Scott. Sir, currently talking with the industrial 
base, $200 million will cover that. I would say any additional 
amount will----
    Mr. Dicks. How much did we have in 2010?
    General Scott. Sir, can't get into that.
    Mr. Dicks. That is right. It is classified.
    General Scott. Yes, sir.
    Mr. Dicks. Mr. Hinchey.

                  COMBAT SEARCH AND RESCUE HELICOPTER

    Mr. Hinchey. Thank you very much, Mr. Chairman.
    And I want to express my appreciation and gratitude to you 
for taking over the responsibility of this very important 
subcommittee here. And it is a great pleasure for me to be with 
you, and I thank you for everything that you are doing.
    Gentlemen, I thank you also very much.
    I wanted to just mention the combat search-and-rescue 
helicopter program which was terminated by Secretary Gates 
sometime late last year as I remember. And I am wondering if 
there is any understanding of the need for that program. Is 
there going to be any initiatives that are going to be 
reinvigorating it? Starting it up again? The context of its use 
presently, as I understand it, there are a number of these that 
are being used for rescue operations in the context of 
Afghanistan right now.
    And I just wonder if you have any insight on this and what 
you think the next move is going to be.
    General Scott. Sir, you are right. The Resource Management 
Decision (RMD) 800 terminated CSAR-X. What it did not terminate 
is the mission itself. There are studies that are being done by 
Joint Forces Command on combat search and rescue. The Air Force 
has the combat search and rescue piece of that. All services 
have the search and rescue capabilities out there. It is the 
ability that the Air Force has to go into a lethal environment 
and hostile environment.
    The program of record is 112. There are currently, as of 
today, I believe it is 96. We are going to buy back to the 112, 
get our operational loss aircraft and get ourselves--there are 
four in the 2010 budget, and we are planning on in the program 
to continue that to get ourselves back to 112.
    With that Air Combat Command, is relooking at the analysis 
of alternatives, and what is the next generation helicopter if 
we are going to look at that? We are also working with AT&L 
through an acquisition decision memorandum to recapitalize the 
fleet with the current aircraft that we are getting, which is 
the HH-60M, which is a current line that the Army has with 
their Blackhawks.
    So we are working very closely with AT&L through the AQ 
folks, Major General Randy Fullhart and myself. And we are 
working with ACC on the requirements. But you are right. The 
dwell time on these young men and women, and it is not just the 
aviators in the front; it is the guardian angels in the back 
that are doing God's work is what I will tell you. Because it 
really isn't right now just all search and rescue. It is 
medivacs. It is that golden hour rule that we live by to make 
sure that we can get that young man and young woman on the 
ground to a facility within 60 minutes, and they are meeting 
that requirement and doing that job superbly.
    Mr. Hinchey. So the content of this material is available 
readily now, and it is in enough----
    Mr. Dicks. Congressman Hinchey, would you pull your mike up 
closer?
    Mr. Hinchey. The availability of these are standard now, 
and there is a level that is meeting the necessities, the 
requirements and specifically with regard to the circumstances 
that we are experiencing in Afghanistan, but also in Iraq to 
some extent. I assume that there are enough of these now, and 
there is a study going on I assume to figure out what is going 
to be the next move on this issue?
    General Scott. Yes, sir, we are meeting the requirement. 
What I will tell you, though, is the dwell time for these young 
men and women is as high as any dwell time we have in the Air 
Force. It is about a one-to-one dwell time. For some of them, 
it is even a little worse, about .98, and others it is about 
1:2. But that doesn't count those at the 1:2 dwell time that 
deploy to Korea and other places that they do.
    We are looking at, is there a need, or do we restructure 
and rebalance this force structure in a way that the active 
component and the ARC component how we share that wealth with 
the dwell time. So we are working that. ACC is working the new 
AOA, the analysis of alternatives, to see if the requirement is 
better. And the R&D left, I believe, about $2.6 billion in it 
to get us operational. And we are also working on the 
recapitalization on the rest of the fleet.
    Mr. Hinchey. Thank you very much.
    Mr. Dicks. Mr. Tiahrt.

                         LIGHT ATTACK AIRCRAFT

    Mr. Tiahrt. Thank you, Mr. Chairman.
    You look good in that suit. You got my vote.
    I have one concern. I picked up in the light attack 
platform, ISR platform, that currently, we have the TA6--T6A, 
excuse me, which has over a million hours on the airframe. We 
are in flight test starting in the first week of March. It has 
a light attack platform with ISR capabilities.
    But I found out that there is a program now where the Navy 
is leasing a Super Tucano; in fact, they are leasing four of 
them for $11 million a year. And the T6A platform only costs 
$10 million. So why are we spending a million dollars more to 
lease the aircraft for 1 year when we could purchase an 
American aircraft for less money?
    And I have to tell you, Wichita, where I come from, is the 
air capital of the world. We have over 20,000 aircraft workers 
laid off. This platform would get about 800 of them back to 
work. I am hard-pressed to find it acceptable for us to lease 
aircraft from Brazilians, from Embraer, when we have an 
American platform that exceeds the capability. And I am very 
concerned about the way this is progressing with the lease. The 
lease goes outside the competitive process. And I think we 
would have a better chance based on the lease cost of winning a 
competitive bid.
    I guess what I would like to know is, why are we pursuing 
this lease when we have an American capability available? And 
why are we going outside the procurement process and using a 
lease when we could have a fair and open competition?
    Admiral Philman. Thank you, sir.
    I have actually toured all of those lines out there, and I 
commend the people in Wichita. That is very impressive. You are 
speaking of Imminent Fury, which was a project that started I 
think in 2007. The Secretary of the Navy was touring the Middle 
East, and he asked the Special Operations Forces, what is it 
that you need that you don't have now? And they roughly defined 
the characteristics of a light attack airplane with some sort 
of ISR and special configurations. That became what is known as 
Imminent Fury, and phase one, which is a CONUS-based testing, 
and we are about to go into what is called phase two, which is 
combat verification.
    Those airplanes are leased, because that was the airplane 
that was available at the time. The T6B certainly is a very 
nice airplane, but it wasn't quite ready just yet.
    As they go into the combat verification, that will be 
competed. That doesn't exclude any capable aircraft from being 
considered for that combat validation, sir. So I don't have 
any--right now those aircraft are on lease, and that will be 
the plan, but that does not mean it will not be competed. As a 
matter of fact, we insist that it be competed.
    General Scott. And when he says ``those aircraft''--the 
aircraft. There is currently only one aircraft on lease. The 
other four right now are not on lease. Those will compete with 
the Navy Acquisition Program. The initial Imminent Fury 
aircraft back in 2008 time frame basically for what they needed 
to validate the mission as they were going forward, the 
particular aircraft that met that was the Super Tucano.
    Mr. Tiahrt. So you were trying to validate the mission, not 
the aircraft? Or the capability, not the aircraft?
    Admiral Philman. That is correct, sir. What is it that can 
bring instant command and control or instant support to the 
Special Operations Forces? What kind of equipment would be on 
the aircraft? And you figure out this would work; this would 
not work. Make a different modification. That is the concept, 
sir.
    Mr. Tiahrt. And it is your intent to competitively bid the 
follow-on?
    Admiral Philman. The follow-on will be competitively bid in 
the acquisition process. Yes, sir.
    Mr. Tiahrt. Thank you.
    Thank you, Mr. Chairman.

                 JOINT STRIKE FIGHTER ALTERNATE ENGINE

    Mr. Dicks. The famous JSF Stealth business case analysis, 
is it finally here? Do we have a case on the alternate engine 
much touted by Secretary Gates? We understand that it may have 
arrived. Can you summarize or tell us what is in this business 
case analysis on the alternate engine.
    General Scott. No, sir, but I will get it for the record 
for you. I have not seen it, but we will make sure that I get 
it for you.
    [The information follows:]

    The Joint Strike Fighter Engine cost/Benefit Analysis update was 
provided by Deputy Secretary of Defense to Chairman Dicks on February 
23, 2010.

    Mr. Dicks. Do we know who did it?
    General Scott. No, sir, I do not.
    Mr. Dicks. Was it a contractor, or somebody in the 
government, or do you know?
    Admiral Philman. We will have to get that. I don't know who 
did it.
    Mr. Dicks. Do you know about this if there was a business 
case? The question fundamental--one of the major issues between 
the administration and the Congress, wouldn't you know about 
this?
    General Scott. I don't know if we would know it from the 
requirements perspective, because as we state and we work 
through the Joint Capability Integration and Development System 
(JCIDS) process, I would believe that Major General Jay 
Lindell, who is the SAF/AQP who works the acquisition piece of 
the F-35, would have a better idea, and I can get with Jay and 
talk to him.
    Mr. Dicks. We want you to look at this.
    General Scott. Yes, sir, we will look at this, and we will 
get you the information we know that that has been brought up 
by several members.
    [The information follows:]

    Yes, a cost analysis was conducted by the Director of Program 
Analysis and Evaluation (PA&E), now called Cost Analysis and Program 
Evaluation (CAPE), within the Office of the Secretary of Defense.
    The analysis concluded that there would be no net cost benefits/
savings from dual source competition. Specifically, the analysis 
considered three categories of costs associated with maintaining two 
engine producers:
    1. Non-recurring development: The non-recurring Research ` 
Development investment required for a second engine source is 
approximately $2.5 billion.
    2. Production cost: The analysis concluded that splitting the 
production buys between two sources would result in an increase in 
production costs. This is due to 3 factors: (1) learning curve effect 
is reduced when significantly fewer units are produced by each source, 
resulting in production cost increases of approximately $700 million; 
(2) fixed costs are amortized over fewer units for each source: (3) 
cost of outsourced items increases due to fewer units for each source. 
The PA`E (CAPE) analysis concluded that more than a 20% competition 
cost benefit would be required to recover the non-recurring development 
cost and the additional production cost. This is consistent with the 
1998 Program Management Advisory Group (PMAG) assessment that savings 
of 16% to 22% would be required to recover the added costs of 
maintaining two sources. PA`E (CAPE) found that Department of Defense 
experience does not support this magnitude of savings.
    3. Support cost: The analysis concluded that maintaining two engine 
suppliers would result in an increase in support costs. These engines 
are not build-to-print designs. Although both engines are designed to 
have identical external interfaces to the aircraft that make them 
interchangeable, the two internal designs are almost completely 
different. Additional support costs would fall into 4 primary 
categories: (1) Spare parts--Most of the engine parts are unique, 
including the fans, turbines, combustors and compressors. This requires 
establishment of two separate spare pipelines both in the fleet and at 
the depots. (2) Organization (Fleet) level repair--The configuration 
differences drive additional training and tools for fleet maintenance 
personnel. (3) Depot level repair--Two separate depot capabilities 
would need to be stood up. This drives additional non-recurring costs 
and additional recurring unit repair costs since each repair line would 
handle fewer units. (4) Engine upgrades and imporvenents--Future 
modifications for reliability improvements, safety enhancements and 
obsolescence management would need to be done on two different engines, 
driving additional recurring and non-recurring costs.

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[GRAPHIC] [TIFF OMITTED] T5007A.042

                      JOINT STRIKE FIGHTER STATUS

    Mr. Dicks. Tell us about the Navy variant and the Marine 
Corps variant. How they are doing on Joint Strike Fighter? We 
have been getting the review of each of these programs, and 
General Scott can talk about the Air Force variant.
    Admiral Philman. Okay, sir. For the Marine Corps the F-35B, 
known as the STOVL version, we have three of those aircraft at 
Pax River right now, and they are beginning the test. So we are 
learning more. You might have heard issues about the exhaust or 
the downward plume, because it has--not only does the exhaust 
turn down, it has a lift fan in the center of the aircraft so 
it can do the vertical landings. There was some concern about 
the heat and how it might affect the flight deck of the 
amphibious ships. So that testing is being done.
    It is called the hover pit testing where they strap the 
airplane down and simulate the landing. Early report is that it 
is going to be okay. We have tested with coated and noncoated 
surfaces and various combinations to make sure that we 
understand how this aircraft would perform on the amphibious 
ships. We are also going to look at the blast and other aspects 
of the environmentals.
    We believe that is going to be okay. The Marines are 
holding to their 2012 IOC. The testing will come and prove that 
out.
    For the Navy version, it is the F-35C. A little bigger 
airplane, it has folding wings, tail hook, and launches and 
recovers from the aircraft carrier. A larger bomb bay. By 
comparison, because of the configuration of the airplane, the B 
is a little bit smaller, and of course, it has other mechanisms 
in there which is the lift fan and the other nozzles. So it has 
less fuel capacity. So if you want to compare the F-35B range 
one way and then back, is about 450 miles, whereas the Navy 
version, the C model, is 650 miles.
    So we only have one C that has been constructed just now, 
so we are the last in line. The Air Force--actually the B, the 
Marines are first, then the Air Force and then the Navy. And so 
we have a little bit of a luxury of gaining the learning that 
has been done before we build into the Navy aircraft. The 
downside is that we are last, so we are having a struggle with 
our existing fleet.
    General Scott. Sir, we are very similar with our testing. 
As you know, in the testing phase, you will do some pull 
testing, where you are sitting there checking all the qualities 
and capabilities. And then we will work into the ground testing 
phase of the program, where we complete specifically designed 
ground tests for the aircraft. Some of it is just taxiing, and 
some of it is working around. And then the air testing, and we 
have just gotten into the air portion of that. I think we are 
about six months into that.
    So as you look at the capabilities of the aircraft, it is 
meeting all of the timelines. The unfortunate piece goes back 
to what we talked about, is that the schedule of those aircraft 
has not been as fast. So we are not as far along as we would 
like to be in the SDD phase of testing for the aircraft. But 
with the portions of the testing that we have done on the air 
and the ground, we are satisfied with where we are at. This is 
where we are sitting today as we look at those kinds of things 
and where we are at.
    Mr. Dicks. That is exactly what I wanted you to do. And is 
there--I would assume that some people are going to say, 
shouldn't you slow this down and take more time in development? 
I think that is exactly what you are going to do, and then slow 
down the acquisition of----
    General Scott. Sir, I think that is exactly what the 
restructuring has done, is when we took the ramp, and we 
streamlined it down from 2015 at 80 and the other things we 
were doing and we decreased the number over the FYDP of 122 
aircraft, we have said we are going to do in the RDT&E phase 
and the SDD phase; we are going to get through this. We are 
going to add aircraft to this phase to make sure that we get 
this part right. Obviously, if you don't get that right and you 
just push it into the next phase, it just dominoes.
    So there is lots of concurrency in this program. We will, 
prior to milestone C, have started LRIP, and we will start 
having aircraft because we are able to do that with the ability 
of this particular aircraft. But we have slowed it down to make 
sure we are on the right track through the OSD's restructuring.
    Mr. Dicks. I am going to give another chance, but I want to 
go to Mr. Bishop, who has not had a chance to question.

                   TACTICAL AIRCRAFT INDUSTRIAL BASE

    Mr. Bishop. Thank you very much, Mr. Chairman.
    I apologize, I had some conflicting meetings this morning. 
But let me go back. I understand that you already touched on 
the question of whether or not the tactical aircraft industrial 
base might be compromised with the trend that we are going with 
the tactical aircraft residing in the hands of just the Joint 
Strike Fighter Program that our industrial base might arguably 
be shrinking, which might jeopardize our future.
    Admiral Philman, we just got with a single contractor, 
which I understand where we are now, provided virtually all the 
tactical aircraft after completion of the F-18 program, in a 
few years, are you really concerned or don't you think it is 
logical that our industrial base will shrink to the point that 
we might be in jeopardy?
    General Scott. Sir, I think, as we look across where we are 
going, and as we talked earlier with the sixth generation, next 
generation air dominance aircraft, and that is out there in the 
future, and that will compete. The other thing is to realize 
that the industrial base, the prime contractor is only one 
piece of that. Within that prime contractor, there are major 
subcontractors that are doing many of the different parts on 
the F-35. So as they work--as the industrial base has changed 
with numerous contractors that we used to have, a lot of them 
have been subsumed by the larger contractors.
    So we are concerned. We are working that with a long-range 
persistent strike with the funds that you all gave us to enable 
us to keep moving on those kinds of things. And many of the 
things that are in the long-range persistent strike platform 
industrial base will apply because of the qualities of low 
deliverable and what we are looking at across the spectrum. So 
I think there is concern, but I think we are working with the 
industry partners to make sure that we are doing the right 
thing.
    Admiral Philman. Likewise, sir, for the F-18, our last 
aircraft that we are buying Es, Fs and Gs through fiscal year 
2013 for delivery in 2015. That is a line that is hot, and we 
can capitalize on it.
    As the Joint Strike Fighter line matures and as we 
understand it better, and as was mentioned by General Scott, 
what is the next generation? The sixth generation of the air 
dominance platform and those people who design aircraft, who 
know how to build them, I believe they will be focusing on that 
with some confidence.

                   AIRCRAFT OPEN SYSTEM ARCHITECTURE

    Mr. Bishop. Thank you.
    I want to ask you something about open systems 
architecture. The combat systems on the surface combatant ships 
and submarines, we are moving toward an open systems 
architecture, and we are told some advantages, such as cost, 
capability, and ease of modernization.
    Admiral Philman, the majority of the Navy's sea-based 
combat systems are moving into an open architecture 
environment. Do you see the same thing in your combat aircraft 
systems? If not, does the Navy have a plan for moving towards 
open architecture for the combat aircraft? And would this save 
money in the long run?
    General Scott, are the Air Force's combat aircraft 
operating under open systems architecture? If so, tell us. If 
not, why not?
    Mr. Dicks. Would the gentleman yield? Tell us what an open 
system architecture is first and then answer his question.
    Admiral Philman. Well, that specific term is probably open 
for debate as well. But the way I understand it is that you 
have a sphere of where we move information around, and anybody 
can enter it through whatever system. Eventually, we will have 
to have more modern and sophisticated systems that are already 
plug and play. In the meantime, we need to understand better 
how existing systems can plug in.
    I like to use a three-prong plug-in to be an example. UL 
verifies it, and you plug it in, and you have electricity. So 
if the systems that we have today, which we are already 
invested in and are important to our warfighting capability, as 
we build this larger architecture, they have to be compatible. 
As a matter of fact, for the F-35 specifically, the three 
services, the Chief of Staff of the Air Force, the Chief of 
Naval Operations and the Marine Corps all collectively went 
down to the center for--known as the Lighthouse, the Center For 
Innovation in Chesapeake specifically to better understand how 
the F-35, which is going to be the best sensor that we have 
right now, at least from the aviation platform; how does it 
integrate into the rest of the system, the ships, other 
aircraft, and all the things that are involved in land and 
space? So they are very, very focused on it.
    Now, I will tell you that the CNO has restructured the 
staff, our new N2N6, which is the Deputy Chief of Operations 
for Information Dominance; that is his focus area. That is what 
he and his whole staff do.
    Anyway, a little bit of a definition and where we are, I 
think the Navy has certainly devoted itself to open 
architecture. It will have to be in the future. And as you 
alluded to, if we do it correctly, we will be able to be more 
efficient and save money in the long run.
    General Scott. Sir, and it is not just an Air Force system 
and a Navy system and a Marine system and an Army system. The 
one thing that--we were very involved in setting this meeting 
up down at the Lighthouse. We did bring the Army in, too. And 
the Army is part of this systems of systems and the open 
architecture so, as we look at this umbrella, we can end up all 
talking to each other without anybody listening to us. And we 
can do it in an anti-access environment, and we can do it in a 
passive environment.
    If you start looking at where we could be with our 
aircraft, if you are active and you transmit in this 
architecture, you no longer are invisible. And no one is 
invisible, but you just radiated. We have got to figure that 
out, and that is one of the things that the three Chiefs went 
down to the Lighthouse, working with the industry partner 
there, is, how do we create this umbrella of open architecture 
enabling what I call the kill chain? And the kill chain does 
not start with a missile hitting an aircraft or a bomb hitting 
the ground; it starts well before that as you start working 
through this with these wave forms through these platforms to 
enable that individual.
    The lucky guy that gets to fly that aircraft really is 
involved in a whole lot of architecture out there that is 
making those kinds of things happen. And we are really involved 
in it, because we have seen that we haven't been as 
interoperable as we needed to be. A platform can't talk to a 
platform, so we build a gateway enabling them to talk to each 
other. We need to get away from gateways. We will probably have 
them for a while, but we need to make sure that F-35s talk to 
F-18s, talk to F-16s, talk to Aegis Cruisers, talk to the AOC 
Air Operations Center, talk to the entire systems of systems so 
that, as I need to pass information to you, I have the ability 
to do that as quickly as the speed of light so you can then 
prosecute the attack.
    And I hope that makes sense, but we are working really hard 
jointly to do this in a correct manner through all four 
services, because the ground guy needs to have this 
information.

                      COUNTERING ELECTRONIC ATTACK

    Mr. Dicks. Thank you. Mr. Young.
    Oh, let me go back to this countering electronic attack.
    Admiral Philman, does the Department have a requirement to 
address these issues? This isn't just about our aircraft but 
also our munitions. What is the Department doing to address 
electronic attack on our munitions? GPS, you know, the whole 
thing.
    Admiral Philman. Through the satellites or the systems that 
the Air Force have, we are working closely with them in the 
information dominance. I mentioned earlier our N2N6, they are 
taking this on so that we understand better what those jamming 
possibilities are, how they affect individual weapons or the 
system of weapons. So it is very serious. The adversary is able 
to take our very sophisticated weapons and negate them with a 
very small investment, and we don't like that. I think we are 
moving forward. I don't have the----
    Mr. Dicks. Do you think we are overly reliant on GPS 
weapons systems?
    Admiral Philman. I don't believe so. Those are 
complementary weapons systems. They get us into the ballpark in 
certain situations. But terminal guidance is part and parcel of 
many of our more sophisticated weapons. You put more than one 
seeker on it. You have a GPS that gets you into the targeting 
area, and then there is more refined targeting, either through 
imaging or other ways to get the final solution.
    Mr. Dicks. General Scott, do you have anything on this?
    General Scott. Nothing to add. In another venue, I would 
like to bring back to you at a higher level some of the 
capabilities that we do have in that environment.

                        EA-18G GROWLER AIRCRAFT

    Mr. Dicks. How is the Growler doing? The F-18 Growler?
    Admiral Philman. It is doing great, sir. The first two 
squadrons have transitioned. We IOC-ed last year, and they are 
on schedule. They are delivering on time, and they are 
performing very well.
    As you might know, we were plussed up by 26 aircraft this 
year because we were going to take the expeditionary squadrons 
and decommission them, but it was determined that that mission 
was very, very important to not only the Navy but to the whole 
Joint Force and to the country. So we are extending the life of 
the Prowlers for about 2 more years as we transition those four 
expeditionary squadrons into the 18G. And then we will have 10 
on the aircraft carrier. But they are performing well.

                         P-8A POSEIDON AIRCRAFT

    Mr. Dicks. What about the P-8A? How is that doing?
    Admiral Philman. That is doing well, too. We rolled the 
first airplane last June. And we have two--well, it is going to 
be three flying test articles and two that are stress articles. 
We are looking for an IOC in 2013, and looking at milestone C 
sometime this summer, and then we will go on contract.
    Mr. Dicks. There has been a lot of discussion about 
replacing AWACS, JSTARS, a whole series of airplanes. Would 
this aircraft we are using for the P-8A be a candidate aircraft 
for a replacement of these other systems?
    General Scott. Sir, currently the Air Combat Command is 
doing what I will call a Ground Moving Target Indicator, 
Analysis of Alternatives. The Initial Capabilities Document 
(ICD) came through the Air Force Requirements Oversight Council 
(AFROC), proved through the studies down at Capes, and we are 
looking at all capabilities to look at that particular platform 
from a GMTI.
    Subsequently, while we go through that, and that will take 
probably into the summer of 2011, we have a study going on 
through a partner that is looking at other capabilities that we 
can do in the interim. As we look at MQ-9s, can we put a pod on 
an MQ-9? Because one of the Combatant Commander's needs in 
Afghanistan and Iraq is a dismount capability. A slower speed 
as we look at those capabilities and being able to pick up you 
or me walking on the ground. We are working closely with that 
from an urgent operational need on an MQ-9 or a platform of 
that sort to enable us in the interim.
    If you ask, is the P-8 Analysis of Alternatives in the 
study that ACC is doing, I am sure that will be part of the 
analysis. We will look at the current E-8 and what we need do 
with that. We will look at the P-8. We will look at, is there 
something that we can do with Global Hawk and all the other 
things they will bring to us?

                            F-22 RELIABILITY

    Mr. Dicks. On the reliability on the F-22. The F-22 was to 
have at least 3 hours meantime between maintenance. What is the 
time now?
    General Scott. Sir, that is going to change a KPP, a Key 
Performance Parameter, in the document. And to do that, they 
are looking at changing that. And I don't want to get into 
exactly what they are going to do, but it is probably going to 
decrease. But they will bring that to the Air Force Requirement 
Oversight Council because that is a change. It will probably 
decrease. They are looking at somewhere between 1.5 and 3. And 
I will bring that back to you. That will come to the March 
AFROC, which I will chair, and I will get that back to you.
    Mr. Dicks. This is still improving, right? We are getting 
better?
    General Scott. Yes, sir, we are getting better.
    Mr. Dicks. Any other questions?
    Mr. Tiahrt.

                         LIGHT ATTACK AIRCRAFT

    Mr. Tiahrt. Going back to the Imminent Fury, there is an 
existing program going on now that the National Guard is doing 
for a light attack aircraft. And I want to look at combining 
those efforts. So I just wanted you to be aware of that, 
because I think we may have a program that is already ongoing 
that is similar to what you are pursuing under this Imminent 
Fury.
    General Scott. Sir, not from the Imminent Fury, but from 
the Air National Guard piece, since that runs with the Air 
Force, we know that, and we are working congruently on all 
things light-attack armed reconnaissance. Whether it is the 
Imminent Fury, the A-26B demonstration that the Air National 
Guard is working, as you know, and we briefed your delegation 
yesterday on the light-attack armed reconnaissance the Air 
Force is looking at for building partnership capacity and the 
Afghan, the light air support aircraft that they need, and they 
are looking forward to increase their capability in their Air 
Force.
    Mr. Tiahrt. What I am picking up is some of the folks in 
the Navy, Admiral, are sort of stiff-arming one company and 
embracing the other. And I am not--I am very concerned about 
American workers right now, and I think all of us are. And I 
just want to make sure, as this moves forward, why don't we 
look at the joint capability and what we are already doing with 
the Guard and make sure that we don't exclude somebody from the 
whole process.
    Admiral Philman. No, sir. And we want to learn from any 
projects that are going on that can inform the process needs to 
be used. And if I can find out who is being noncooperative, I 
would take care of that and follow up on that, sir.
    Mr. Tiahrt. Thank you very much.
    Mr. Dicks. Thank you gentlemen. This was a very good and 
productive hearing.
    And the Committee stands adjourned until 2 o'clock tomorrow 
when we will have a closed hearing on Fort Hood.
    [Clerk's note.--Questions submitted by Mr. Dicks and the 
answers thereto follow:]

                          ACES 5 Ejection Seat

    Question. Congress provided $5.6 million in FY09 and $1.6 million 
in FY10 to qualify and test the ACES 5 seat. The FY10 National Defense 
Authorization Act conference report encourages the Air Force to 
consider the ACES 5 as a second source for the F-35 program.
    Please provide the committee with the current status of the 
appropriated funds intended for this purpose, including your estimated 
timetable for putting this funding on contract to qualify the seat?
    Answer. For the Fiscal Year 2009 Advanced Concept Ejection Seat 
(ACES) $5.6M Congressional add, the Air Force executed approximately 
$1.1M for testing and an ejection seat cost benefit analysis that 
compared the ACES II and ACES 5. A second analysis to study cost 
savings and benefits of ACES 5 for the F-35 is being considered and 
will cost an additional $500,000. Finally, the Air Force is planning to 
move the remaining Fiscal Year 2009 and Fiscal Year 2010 funds to an 
existing Navy contract. Once complete, the Fiscal Year 2009 funds 
should be obligated and on contract within two months and the Fiscal 
Year 2010 funds shortly thereafter. These funds would be used to 
conduct ACES 5 qualification and testing.
    Question. Please describe the substantial savings and benefits 
associated with qualifying and testing the ACES 5 ejection seat, 
including any acquisition and life-cycle maintenance savings, as well 
as any readiness, training, and safety benefits to the Air Force?
    Answer. While a recently completed cost benefit analysis showed the 
cost benefit of an ACES 5 would not overcome upfront costs, ACES 5 
would provide several benefits. An increased safe ejection envelope 
over the ACES II is the most substantial benefit. The safety 
improvements would result from key updates such as integrated limb 
restraints and passive head and neck protection. With these 
enhancements, the ACES 5 could effectively prevent injuries, especially 
those caused by limb flail. Other benefits of the ACES 5 include 
reduced maintenance burden and improved aircraft availability. All 
aircraft that use ACES II would realize savings with an ACES 5 due to 
reduced maintenance, but upfront costs required for ACES 5 development, 
qualification, and procurement are not recovered by maintenance 
savings.

    [Clerk's note.--End of questions submitted by Mr. Dicks.]


                                       Thursday, February 25, 2010.

                               FORT HOOD

                               WITNESSES

GENERAL CARTER HAM, UNITED STATES ARMY, ADVISOR TO THE INDEPENDENT 
    REVIEW
BRIGADIER GENERAL RICHARD W. THOMAS, ASSISTANT SURGEON GENERAL (FORCE 
    PROTECTION) OFFICE OF THE SURGEON GENERAL

                              Introduction

    Mr. Dicks. The committee will come to order. I would like 
to recognize the Ranking Member, Congressman Young, for a 
motion.
    Mr. Young. Mr. Chairman, I move that those portions of the 
hearing today which involve sensitive material be held in 
executive session because of the sensitivity of the material to 
be discussed.
    Mr. Dicks. All those in favor, say aye.
    Those opposed.
    The ayes have it. The motion is agreed to. So ordered. 
Thank you Mr. Young.

                   Chairman Dicks' Opening Statement

    Today the Defense Appropriations Subcommittee will receive 
testimony from General Carter Ham, U.S. Army, Advisor to the 
Independent Review of the Fort Hood shooting, and Brigadier 
General Richard W. Thomas, an Army physician who serves as the 
Assistant Surgeon General, Force Protection, Office of the 
Surgeon General.
    On November 5, 2009, Major Nadal Malik Hasan, U.S. Army, 
entered the Army base at Fort Hood, Texas and opened fire on a 
group of fellow soldiers. Before he could be stopped by law 
enforcement officers, Hasan fatally shot 13 members of the U.S. 
Army and injured 43 others, most of them military personnel. 
The alleged gunman, Army Major Nadal Hasan, is an Active Duty 
Army psychiatrist. He has been charged under article 118 of the 
Uniform Code of Military Justice with 13 counts of premeditated 
murder, and, under article 80 of the Uniform Code, with 43 
counts of attempted premeditated murder.
    I am troubled by the circumstances that led to the 
shooting. In part, it appears that this may have been the 
result of military officers not following existing policies and 
procedures. Specifically, there are numerous stories in the 
press that the alleged shooter's superiors failed to document 
and take action because of the negative information in his 
official record.
    We have questions. Why did it happen? Could it have been 
prevented? Was the response adequate? Are the needed resources 
available to care for the Fort Hood community? More 
importantly, we all share the same intent to ensure that 
everything possible is done so that this does not happen again.
    Gentlemen, we look forward to your testimony and to a 
spirited, informative question-and-answer question.
    Now, before we hear your testimony, I would like to call on 
the Ranking Member, Mr. Young, for his comments.

                      Opening Remarks of Mr. Young

    Mr. Young. Mr. Chairman, thank you very much, and I want to 
welcome our very distinguished guests. I usually am very 
pleased with the hearings that we have and the information that 
we gain about the defense of our Nation and the support of our 
troops. Today, I am not sure that we are going to be really 
happy to hear what we are going to hear, because we are dealing 
with a tragic incident, discussing one of our own servicemen 
who took the lives of 13 of his fellow soldiers. I know that 
weighs heavily on your mind, as it does all of us, and we are 
not suggesting or pointing the blame at anybody at this point, 
but we do have questions.
    The facts surrounding the incident appear to be clear, but 
the breakdowns and the gaps that allowed it to happen are still 
being examined, and I am sure you are anxious to get to the 
bottom of that, as we are, and whatever steps that should be 
taken to prevent a tragedy like from this happening again.
    So I thank you for your efforts and look forward to your 
testimony. We are anxious to learn as much as we can about 
this. So thank you very much.
    Mr. Dicks. General Ham, you may proceed with your 
statement.

                    Summary Statement of General Ham

    General Ham. Thank you Mr. Chairman and Congressman Young. 
Members of the committee, it is indeed an honor to appear 
before you today to discuss the findings and recommendations of 
the Department of Defense Independent Review relating to Fort 
Hood. Joining me today is Brigadier General Thomas, Army 
Assistant Surgeon General for Force Protection.
    As the Chairman indicated, on November 5, 2009, a gunman 
opened fire at Fort Hood. Thirteen people werekilled, 43 others 
wounded. It is important to remember that we extend our deepest 
sympathy to the families of the fallen, to those wounded, to their 
families, and all those touched by this tragic event. Indeed, one of 
the underlying principles guiding our efforts in conducting the review 
that we are here to discuss was that those of who are privileged to 
participate in this process felt an obligation to speak for the 13 
fallen who are no longer here to speak for themselves.
    Following the shooting, Secretary Gates established the 
Department of Defense Independent Review related to Fort Hood 
and appointed Admiral Vern Clark, United States Navy, Retired, 
and the Honorable Togo West to co-chair this effort. Since 
Admiral Clark and Secretary West could not be with you here 
today, as one of the senior military officers who participated 
in the review, I am pleased to be here as their representative.
    Events such as the Fort Hood shooting raise questions about 
how best to defend against threats posed by the external 
influences operating on members of our military community. The 
challenge for the Department of Defense is to prepare more 
effectively in a constantly changing security environment. It 
is with this challenge in mind that Secretary Gates directed 
the Independent Review to assess whether there are programs, 
policies, or procedural weaknesses within the Department of 
Defense that create vulnerabilities to the health and safety of 
our service members, our DoD civilians, and their families.
    Secretary Gates directed the review panel to take a careful 
look at personnel policies, force protection measures, 
emergency response procedures, and support to our military 
health care providers. He also tasked the Independent Review to 
evaluate the Army's application of its policies, programs, and 
processes as applied to the alleged perpetrator. The review 
focused on the noncriminal aspects of the shooting.
    Secretary Gates gave very clear direction that the panel 
not interfere with the intelligence and military justice 
investigations related to the Fort Hood incident. Secretary 
Gates stated that he intends to call upon the military 
departments to conduct an in-depth follow-on review in certain 
areas addressed in our report, and indeed that effort has 
already begun.
    The Independent Review's report to the Secretary of Defense 
was released to Congress and to the public on January 15 of 
this year. The detailed results and findings associated with 
the alleged perpetrator are found in a restricted annex that is 
not publicly released at this time. It is my understanding that 
you have been afforded the opportunity to review the restricted 
annex.
    The overall report was much broader than the assessment of 
the alleged perpetrator, however. The report includes 
recommendations to strengthen the Department of Defense's 
ability to prepare for and respond to potential threats. Before 
discussing the findings, I would like to highlight some 
observations from the co-chairs concerning the events of 
November 5.
    First, as Secretary West stated, no amount of preparation 
is ever too much. Leaders at Fort Hood had anticipated mass 
casualty events in their emergency response plans and 
exercises. The initial response to the incident demonstrated 
this. It was prompt and effective. However, DoD must be 
prepared to more diligently plan and to seek to envision the 
next incident.
    Second, the Department must be attentive to today's 
hazards. One of the most significant emerging concerns in the 
protection of our force is the internal threat. The review 
concluded that DoD needs to develop a better understanding of 
the forces that cause a person to become self-radicalized and 
to commit violent acts.
    Third, courage and presence of mind in the face of crisis 
can carry the day. This happened at Fort Hood. Courageous acts 
were key to preventing greater losses that day. And as the 
report reveals, these attributes alone are not enough to 
protect our force. DoD must exercise the foresight necessary to 
identify the menace of self-radicalization and its often 
resultant violence and to act preemptively.
    The review revealed shortcomings in the way DoD is prepared 
to deal with internal threats and, in particular, the threat 
posed by troubled and potentially dangerous individuals and 
groups. We found that commanders are essential to this effort. 
Existing policies within the Department are not optimized for 
countering these threats. The policies reflect insufficient 
knowledge and awareness required to help identify and address 
individuals likely to commit violence. And while DoD focuses 
very effectively on many things, guidance concerning workplace 
violence and the potential for self-radicalization is 
insufficient.
    DoD policy on prohibited activities is limited and only 
addresses active and physical participation in groups that may 
pose threats to good order and discipline. This lack of clarity 
for comprehensive indicators limits commanders' ability to 
recognize potential threats.
    Complicating the force protection challenge is the diverse 
nature of responsibilities that have evolved within DoD since 
9/11. Because no senior DoD official is assigned overall 
responsibility for force protection, synchronization is 
difficult. Moreover, there is a lack of DoD policy integration. 
This has resulted in a lack of well-integrated means to gather, 
evaluate, and disseminate the wide range ofbehavioral 
indicators that could signal an insider threat.
    While leaders at Fort Hood responded well under the stress 
of a rapidly evolving crisis, we are fortunate that we faced 
only one incident and at only one location. Real-time 
information will be critical should we face a situation of 
multiple events. Synchronizing the DoD Emergency Management 
Program with the Federal requirements for the National Incident 
Management System will ensure the Department can integrate 
effectively with all partners in response to any and all 
emergencies.
    Following the release of the panel's review report on 
January 15, Secretary Gates directed the Honorable Paul 
Stockton, Assistant Secretary of Defense for Homeland Defense 
and America's Security Affairs, to assess the review's findings 
and to make recommendations for implementation. Secretary Gates 
established a March deadline for the immediate fixes 
recommended in the review, and major institutional changes 
should be identified by June.
    The Secretary of Defense also forwarded the individual 
review panel report to Army Secretary John McHugh to address 
recommendations concerning holding Army personnel responsible 
for supervising Major Hasan accountable. On January 15, that 
same day, the Secretary of the Army directed me to conduct an 
accountability review to identify whether any personnel were 
responsible for failures or deficiencies in applying Army 
programs, policies, and procedures to the alleged assailant.
    The response by the Fort Hood community in the aftermath of 
this tragedy serves as a reminder of the strength, resiliency 
and character of our people. The Independent Review Panel was 
very impressed with the military civilian response. In a 
community where we may have expected the fabric of trust to 
fray, it remained intact and indeed grew stronger through 
mutual support. The thrust of the review effort is to identify 
all the possible steps that the Department of Defense can take 
to prevent similar tragedies in the future.
    Mr. Chairman, this concludes my statement. Again, I thank 
you for the opportunity to appear before you today. General 
Thomas and I look forward to your questions.
    [The statement of General Ham and DoD Independent Review 
report follow:]

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                          SELF-RADICALIZATION

    Mr. Dicks. General, thank you for a very comprehensive 
report. We, too, salute those people who dealt with this 
emergency, came in so quickly and stopped the violence. We only 
wish they could have gotten there sooner. We, too, sympathize 
with the families and the friends of all of the fallen victims 
and those that are injured and hopefully recovering.
    For a few years I served on the Homeland Security Committee 
and one of the topics that we discussed in our committee 
deliberations were self-radicalization--efforts in the United 
States where certain people become radicalized. I think that 
your report is very balanced here, saying, Should people have 
recognized this, and especially those people who were in a 
supervisory position and had to make various reports on fitness 
of Major Hasan? That is the question I have.
    When you went back and looked at this, were there any 
indications? I understand from some press reports that he was 
very outspoken in his opposition to the war in Iraq, to the war 
in Afghanistan, and made other statements that, had people been 
properly trained, they might have picked up on the fact that 
this sounds like somebody has been radicalized, and should 
there be concern by his supervisors and superiors about the 
potential things he might do.
    Now can you tell us anything about that, about thepeople 
who were in charge of his supervision; and did they make reports, or 
what happened?
    General Ham. Yes, sir, I can. If I may speak first more 
generally. It is clear in our findings that identifying the 
indicators that someone within our Department, in uniform or 
civilian, or a family member, is trending toward violent 
activity, those indicators are not well identified nor well 
understood across the force. So we have not adequately equipped 
our commanders and supervisors with the information or things 
that they ought be looking for in an individual who may be 
starting to travel on a path toward self-radicalization.
    Already, the services have taken some of that under 
advisement. The Army has already published a list that says 
these are some of the indicators that commanders and 
supervisors should be attentive to in members of their force so 
that they can then intervene, correct that behavior, and try to 
prevent someone from progressing down a path of self-
radicalization.
    With regard to the specifics of Major Hasan, first, I would 
advise that, as indicated in my opening statement, the 
Secretary of the Army has charged me with the conduct of an 
Army investigation to determine measures of accountability. 
That investigation has not yet been received by Secretary 
McHugh. So it would be inappropriate at this time for me to 
talk about the individual aspects of accountability.
    But what I would tell you, Mr. Chairman, it is very clear 
in the DoD report that there were individuals in supervisory 
positions who had the responsibility to educate, train, and 
develop Major Hasan, who did not do that effectively.

                      POLICIES FOR SELF-PROTECTION

    Mr. Dicks. Now if you are going to have policies for self-
protection, and there has been somebody named--I guess you are 
going to have somebody who is going to be in charge of force 
protection. Wouldn't this be part of every base, every unit, 
having some discussion about self-protection?
    General Ham. It would, Mr. Chairman. But I think it has to 
begin at the Department of Defense level, with adequate 
policies and guidelines to the services and the services within 
their structure, so that we have consistency of understanding 
and of application from top to bottom. And what we found is 
that is not the case. There is not at the Department of Defense 
any particular individual or office that has overall 
responsibility for force protection. But, rather, those 
responsibilities are divided amongst several of the Under 
Secretaries and Assistant Secretaries. That is probably not 
conducive to a coherent and effective system.
    Mr. Dicks. Has that been changed? Has that been changed 
yet, or is it in the process of being changed?
    General Ham. It is, Mr. Chairman. One of the 
recommendations that the co-chairs submitted to Secretary 
Gates, that he do just that; that he identify a particular 
office to lead that effort. To the best of my knowledge, that 
final determination has not been made, but I think it is 
instructive that the Secretary of Defense has appointed the 
Assistant Secretary for Homeland Security Defense to lead the 
follow-on effort of the issues that were identified of the Fort 
Hood investigation. So perhaps that is an office where those 
responsibilities might preside. But to the best of my 
knowledge, that has not been a final determination.
    Mr. Dicks. Mr. Young.
    Mr. Young. Thank you, Mr. Chairman. General, in this case 
we were dealing with an officer who had served at Walter Reed, 
a medical institution. A similar situation could possibly exist 
in some other part of the military, not just medical, in a 
hospital or a doctor. Is that correct?
    General Ham. Yes, sir, that is correct.

                          IDENTIFYING TRIGGERS

    Mr. Young. So anything that we do on the basis of 
determining what type of trigger we might look for, what type 
of activity we might look for, should not only be limited to 
Walter Reed or medical facilities, but other levels of the 
United States Military.
    General Ham. Congressman, that is exactly right. The 
recommendation from this review is that there be a Department 
of Defense-Wide effort so that all of the services, all the 
branches of service and the DoD civilians are all covered by 
whatever policy is resultant from this. It is a Department-wide 
issue.

               ESTABLISHING APPROPRIATE OFFICE FOR POLICY

    Mr. Young. I don't think we want to go on a witch hunt, and 
just because somebody has a bad day and grumbles about 
something, I don't think we necessarily want to hold them up to 
scorn. But we do have to have an effective system for creating 
a real suspicion. I assume that eventually we are going to come 
up with a list of items that should be watched for, should be 
reported, that would indicate the possibility of someone 
becoming a radical anti-American or anti-military. I assume 
that is part of the work that you are doing.
    General Ham. It is, Congressman. The recommendation in the 
report is that the Department seek to establish indicators of 
tendency toward violence, self-radicalization, extremist 
behavior, however motivated, whether that is religious or 
ideological, or other. But the report also acknowledges that 
while such an effort is helpful and instructive to commanders, 
it is not in and of itself satisfactory to completely identify 
the risks that might be developing within our force.
    It gets to the issue of judgment and officership. I think 
that is where in this report to the Secretary of Defense, 
Secretary West, and Admiral Clark focused heavily on the 
judgment or, in some cases, lack of judgment as appliedby 
officers who were in supervisory positions with regard to Major Hasan.

                   REVIEW OF SOLDIERS COMMUNICATIONS

    Mr. Young. General, in that review leading up to that 
report, did you identify some of these people that should have 
been alarmed by some of Hasan's activities and some of his 
words and statements, some of the connections that we have 
found out about, e-mail communications with Islamic leaders? Do 
you know some of the people that saw these things and sort of 
reported them?
    General Ham. Sir, we did. But there were a couple of 
cautions. First, again we were reminded by the Secretary of 
Defense that we were not to tread into or interfere with the 
Presidentially directed review of intelligence matters. So when 
we would bump up, for example, the e-mails that had been 
discussed in the public domain where Major Hasan had at least 
attempted e-mail contact with a radical imam in Yemen, we did 
not pursue that, based upon the Secretary of Defense's 
guidance.
    Mr. Young. Where did the Secretary of Defense get that 
guidance?
    General Ham. Sir, I don't know. The guidance in the terms 
of reference that the Secretary of Defense issued to the co-
chairs--to Secretary West and Admiral Clark--was explicit so as 
to not interfere with the intelligence investigation.
    Mr. Dicks. Would you yield for one second?
    Mr. Young. Sure, Mr. Chairman.

                         MAJOR HASAN'S BEHAVIOR

    Mr. Dicks. Did anybody receive a complaint about Hasan? Was 
there anyone who made a complaint about his activities?
    General Ham. Sir----
    Mr. Dicks. Chain of command or his supervisors. Did anyone 
come forward prior to this all happening and say, We think 
there's something wrong here?
    General Ham. Sir, yes. In the terms of reference and in 
discussion with the Secretary of Defense, the purpose of the 
Department of Defense review, the review we are here to 
discuss, was specifically not intended to identify individual 
accountability.
    Mr. Dicks. We are not asking you to identify it, we are 
just asking you to tell us did someone connect the dots and 
say, this person has a problem, and then other people didn't 
respond to that and didn't take appropriate action. That is 
what we want to know.

                           ARMY INVESTIGATION

    General Ham. That is correct. 'There were individuals who 
saw that Major Hasan's behavior at various stages was not 
consistent with what we expect of a military professional and 
identified that, in some cases to superiors, and subsequent to 
the Army investigation which I have been charged by Secretary 
McHugh to conduct, that was a matter for that investigation.
    Mr. Dicks. Were there any prior investigations? Did anybody 
do anything when these reports were initially made before the 
incident?
    General Ham. We found no evidence of prior investigations.
    Mr. Young. Thank you, Mr. Chairman. In fact, that was my 
last question. But then I will just ask one more question.
    Did any of those superiors who were told that there was 
some interesting behavioral practices by Hasan, did any of 
those superiors do anything about it?
    General Ham. Congressman, yes, some did. But some did not. 
It is I think clear now, from information that is widely known, 
that the actions that were taken were ineffective in modifying 
Major Hasan's behavior.
    Mr. Young. General, thank you very much. Mr. Chairman, 
thank you.
    Mr. Dicks. Mr. Visclosky.
    Mr. Visclosky. Thank you, Mr. Chairman. Generals, thank you 
very much.

                  POST-DEPLOYMENT MEDICAL ASSESSMENTS

    In your testimony and report, it mentions that the pre- and 
post-deployment medical assessments do not provide a 
comprehensive assessment of violent behavior and indicators. 
What policies and procedures do need updating or broadening to 
have that positive effect?
    General, also for the 2011 budget, do you have moneys 
included in your request to pay for any changes in updating 
that you may need?
    General Ham. Sir, if it is acceptable, I will defer to 
General Thomas.
    General Thomas. Good afternoon, sir. Sir, initially with 
the post-deployment health assessment and post-deployment 
reassessments, we found over time that the questions that are 
comprised in that questionnaire are inadequate to give us the 
full scope of measure we believe is going to give us an 
adequate picture for the mental or behavioral health states of 
returning soldiers; in this case, redeploying soldiers. What we 
have done is we are actually undertaking a comprehensive 
overview. We have modified the questionnaires, the 2900s, added 
some additional questions.
    We have also instituted a policy where we are doing more 
face-to-face behavioral health interviews with returning 
soldiers, specifically those returning from Iraq and 
Afghanistan, in this case. And we have initiated, in addition 
to that, some virtual capabilities, which is quite exciting for 
us.
    Mr. Visclosky. Is part of the problem when they fill the 
assessment out that, I want to get out, and if I cause concern, 
this is going to delay my departure from the military. Is that 
part of the problem here?
    General Thomas. Sir, that is accurate. We found 
thatinitially the timing of administering the post-deployment health 
assessments is key. If we do it immediately upon return of a unit, 
individuals oftentimes will blow through that, as you described, and 
try to get home as quickly as possible. If we delay that for a period 
of time, 7 to 14 days, perhaps, we found also a statistically 
significant increase in improvement in the accuracy of the answers 
soldiers will provide you.
    Mr. Visclosky. So that has been part of the program 
adjustment as well, the timing of the questionnaire and the 
assessment?
    General Thomas. Yes, sir, that is correct.
    Mr. Visclosky. Is there a monetary issue here that you may 
need help on, or this has been essentially addressed at this 
point?
    General Thomas. I think we are adequately funded to make 
all those adjustments that you describe.
    General Ham. Sir, if I can add. From my perspective as a 
currently serving Commander of the U.S. Army in Europe, one of 
the valuable tools that the Congress has allowed us to execute 
are these military family life consultants. And we have had a 
significant increase in the availability of those personnel 
that are available in our military communities to counsel 
redeploying soldiers and their family members. That has been a 
tremendous benefit. In my anecdotal assessment, it has been 
more beneficial to have that face-to-face discussion in a 
secure, confidential setting, than it has been the answering of 
the postdeployment surveys.

         INFORMATION-SHARING AGREEMENTS AMONG VARIOUS AGENCIES

    Mr. Visclosky. One other question, if I could, Mr. 
Chairman. On the criminal investigation and organizations, 
apparently there is limited ability to search and analyze 
information outside of DoD's own databases. What new standards 
are being put into place to establish information-sharing 
agreements with Federal, State and local law enforcement 
organizations; and, again, would there be a money issue for you 
in your 2011 budget to accomplish that?
    General Ham. Sir, two issues. First, there is a challenge 
inside the Department of Defense with information sharing as 
well. For example, there is no DoD-wide criminal database. The 
Navy's criminal----
    Mr. Visclosky. When you say that, Army would have a data 
base; Navy.
    General Ham. Yes, sir, that is correct. What we identified 
through the DoD review is that the Navy's Criminal 
Investigative Service has a pretty good model, and our 
recommendation to Secretary Gates is that he look at that for 
application across the Department so as to get intradepartment 
sharing for that database. I am not an expert, but my 
expectation is that there would be some resource implications 
should the Secretary of Defense wish to implement that 
particular recommendation of the review.
    To your larger question of interagency information sharing, 
it is also clear that the Department of Defense's ability to 
share information and to access information from outside of the 
Department of Defense is also somewhat limited. In the 
Intelligence Community there are protocols in place, but fairly 
narrowly defined.
    So one of the major findings of the DoD review was that 
information sharing, both within the Department of Defense and 
external, within the broader whole of government, are issues 
that need to be studied, and will be part of this follow-on 
review that is currently ongoing within the Department of 
Defense and, again, not part of this review. But I could not 
see how you could implement those measures without there being 
at least some resource implications.
    Mr. Visclosky. I would close on this. If there is an 
identification as to what those dollar amounts might be, if 
that could be shared with this subcommittee in anticipation of 
markup, that would be terrific.
    Gentlemen, thank you very much. Mr. Chairman, thank you.
    Mr. Dicks. Mr. Frelinghuysen.
    Mr. Frelinghuysen. Has anybody been separated from the 
service as a result of this tragedy?
    General Ham. I am sorry?
    Mr. Frelinghuvsen. Has anybody been separated from the 
service as a result of this tragedy
    General Ham. Not to my knowledge.
    General Thomas. No, sir, I am not aware of any. I could 
check on that. But there may be some folks who have medical 
separation related to injuries. I think it is premature. I 
don't think we have any, that I know of.
    Mr. Frelinghuysen. Nobody in the chain of command here.
    General Thomas. Not that I am aware of.
    Mr. Dicks. Is this because the investigations aren't 
complete?
    Mr. Frelinghuysen. Ongoing.
    General Ham. I am sorry. Perhaps I misunderstood you.
    Mr. Frelinghuysen. I wasn't talking about the injured. I am 
talking about those who were in the chain of command who should 
have known before somebody was sent to Fort Hood that this 
gentleman was sent to Fort Hood.
    General Ham. Sir, that is precisely the direction that 
Secretary McHugh gave to me, to conduct an Army investigation 
into matters of accountability. The Secretary of the Army has 
not yet received my report or recommendations. I expect he will 
soon and that he will make a decision. But to date, no, sir.

              DOD POLICY REGARDING RELIGIOUS ACCOMMODATION

    Mr. Frelinghuysen. I want to focus on page 16, finding 2.7, 
``DoD policy regarding religious accommodation lacks the 
clarity necessary to help commanders distinguish appropriate 
religious practices from those that might indicate a potential 
for violence or self-radicalization.'' That is all within 
quotation marks.
    Going on to the Discussion, which is of interest I think to 
the members, if requests--and this is in quotation, ``If 
requests for religious accommodation that compete with mission 
requirements were recorded and shared among commanders, 
supervisors and chaplains, it would likely establish a baseline 
from which to identify deviation within the services and the 
Department of Defense. At present, there is confusion about 
what is acceptable.''
    The recommendation in this section is, ``Promptly establish 
standards and reporting procedures to clarify guidelines for 
religious accommodation.''
    Where do we stand relative to those recommendations? Are 
they so recent that nobody's got around to committing enough 
time and effort to sort of rewrite the whole standard operating 
procedure here?
    General Ham. Sir, a two-part answer. First, when Secretary 
Gates announced the receipt of this review, one of the first 
things he said in his public statement was a reminder to those 
of us in the service that those of us who are privileged to 
command and exercise the supervision of our servicemembers and 
DoD civilians, we must make hard decisions and we must be 
accountable, and we must hold our servicemembers accountable 
for their actions. I think that was a clear reminder to us that 
we have authorities now to take action when we think someone's 
behavior, conduct, is outside the norm.
    Mr. Frelinghuysen. The public perception here, and this is 
a closed hearing, is that there is sort of a political 
correctness here. That people were afraid to invade that 
because they didn't want to be sort of identified with, shall 
we say, profiling, which is obviously a loaded word.
    General Ham. Sir, we did not find a culture of that, but we 
did find related to this specific finding, confusion. For 
example, there were some individuals with whom we spoke, both 
peers and supervisors of Major Hasan's, that were confused 
about First Amendment rights and the free practice of religion. 
And that is the essence of this finding.
    We owe commanders and supervisors some clearer guidance as 
to what is acceptable and what is not acceptable with regard to 
religious accommodation across the Department of Defense.
    Mr. Frelinghuysen. Thank you, Mr. Chairman.
    Mr. Dicks. On that point, and then I yield to Mr. Moran, 
what would have been the appropriate thing to have done if 
somebody who was a supervisor, commanding officer, whatever, 
had made a judgment that this behavior was not acceptable; what 
should they have done?

                      SUPERVISOR'S RESPONSIBILITY

    General Ham. Sir, my experience as a commander, when you 
have a servicemember who is out of bounds, whose behavior, 
conduct, and other activities are seemingly at odds with the 
service values and with programs and procedures that are well 
established, it is that commander's responsibility or that 
individual supervisor's responsibility, to call them on that 
and to counsel them and to say, Listen, soldier, this is not 
what we do in the service, you cannot do this.
    This occurs all the time across all services, when 
individuals, particularly young individuals--and it is 
important to remember that though at the time of the incident 
Major Hasan was a major, he had really not had any operational 
experience. He had been exclusively in the training and 
education realm. But supervisors have a responsibility to make 
sure that those under our charge understand our values, 
understand our policies and procedures, and apply them in their 
daily life. And when they don't, we have adequate remedies to 
deal with that. That did not occur.
    Mr. Dicks. Is that like court martial or something like 
that?
    General Ham. Mr. Chairman, in extreme cases, yes, if we 
have such. But more often we have, particularly, again, with 
our younger servicemembers, both officer and enlisted, it isa 
more senior member's responsibility to guide them and to counsel them 
and to try to shape their behavior in a more productive way so as to 
prevent this from getting to the level where more drastic measures such 
as nonjudicial punishment or court martial or separation may be 
appropriate.
    Mr. Dicks. Is there any indication that anybody counseled 
him?
    General Ham. There is, yes, sir.
    Mr. Young. Mr. Chairman, let me make a quick follow-up on 
your subject here. General, if a member of the military 
advocates Islamic jihad against the United States, is that 
considered religious freedom, or is that something--what I 
think it is, which is a threat to the United States?
    General Ham. Congressman, what we found in this situation 
was, again, confusion. Adding to that confusion, as mentioned 
about the confusion about religious freedoms, is compounded in 
this academic setting of what is allowable within academic 
freedom dialogue. Again, it is relatively easy now to look back 
in hindsight at some of the things we know in the public domain 
that occurred and say, This is beyond the bounds of acceptable 
behavior. But my sense is we owe better guidance to our 
personnel to allow them to make those calls.
    Mr. Dicks. Mr. Moran.

                 ACTIONS OF MAJOR HASAN PRIOR TO ATTACK

    Mr. Moran. Thanks, Mr. Chairman. Generals, I have read 
through the actions that Major Hasan took in the last several 
hours--actually, last 24 hours before this violent act. He was 
hardly being secretive. He was sending out messages. I don't 
know whether he wanted to be stopped or not, but he indicated 
to someone, ``Everything's going to change after tomorrow,'' 
and other statements like that. Even the things that he did 
immediately prior to the shooting.
    Would you go through some of that, that might have been 
indications of something dramatic to come? It is not in any of 
the stuff that you provided the committee, but I think the 
committee members might be interested. I am sure you are aware 
of his immediate actions in the hours before he murdered these 
people.
    General Ham. Congressman, actually that was beyond the 
scope of this review. Again, with the specific direction by the 
Secretary of Defense that we not interfere with the criminal 
investigation, those activities which immediately preceded the 
5th of November incident were not matters with which this 
review dealt. And so my familiarity with them, frankly, is what 
I have seen in the public domain, not anything that we 
conducted reviews of here.
    Mr. Moran. Well, the problem I have with that is that here 
we are talking about implementing all of these systemic changes 
and processes and procedures and policies, when the best way to 
deal with this might be something more direct and specific. I 
think this was something of an aberration. I don't know that it 
needs systemic change to the procedures that we are currently 
undergoing. I do think there was laxity in terms of his 
immediate superiors identifying a problem and dealing with it. 
That was missing. But he gave out lots of warning signs. They 
should have been picked up.
    Before we go transforming the way in which we conduct 
ourselves throughout the force, I think it is useful to 
consider whether there aren't more immediate things that could 
have been done. Sometimes it seems like we have a horrible 
violent act, and so we declare war, when there may be other 
ways that are more direct that would deal more appropriately 
with it.
    What do you think, General?
    Let me ask the Brigadier General.
    General Thomas. Sir, I agree with your comments. And 
specifically in relation to Major Hasan's case, I am not privy 
to the details of the investigations, other than what has been 
in the public domain, as General Ham mentioned, in the media. I 
don't have any information beyond that. But I think in general, 
your comments absolutely hold merit. I think it is an emerging 
science, and if you take a look at indicators that are out 
there that may give you some sense of whether someone is going 
to be dangerous or commit workplace violence, there is a lot of 
research that is ongoing out there now. And, quite frankly, it 
will leave you unsatisfied, Congressman.
    There is just not a lot of I think tangible evidence that 
would point to you definitively that some individual may commit 
an act. There are a lot of indicators whether someone is going 
to commit suicide or violence in the workplace, but it is an 
really an inexact science.
    Mr. Moran. Well, I appreciate that. But I would like to 
just suggest, Mr. Chairman, that before we go pursuing 
expensive transformational measures to deal with something like 
that, we really ought to consider when an individual acts in an 
abhorrent fashion, throws out signals that he is going to do 
something dramatic, indicates that everything is going to be 
different after tomorrow, he buys weapons, he acts strange in 
his house, he gives indications to his neighbors, it seems to 
me we ought to be at least privy enough to that information so 
as to consider whether this could not have been dealt with in a 
more direct, efficient manner, than considering force 
transformation policies that I don't think really apply.
    Of all the Muslims in the military, we have one guy. He was 
messed up. He had no business communicating with al-Awlaki in 
Yemen. That should have been detected. But within the 24 hours 
he committed this crime, there were so many indications for a 
superior to have gone to see him andsay, Hey, Hasan, what's 
going on here, Major? What are you up to? I think he clearly would have 
gotten an indication that something was extraordinarily wrong and 
somebody needed to intervene.
    Thank you, Mr. Chairman.
    General Ham. Mr. Chairman, may I? Congressman, I am 
absolutely in agreement with what you said. The co-chairs of 
this report made it clear that leading up to the incident, over 
the course of Major Hasan's development there were indications, 
there were signs, some of which were missed, some of which were 
ignored, that could have altered what happened on the 5th of 
November. But I think it is important also--and the 
accountability, again, the Army accountability investigation is 
focused especially on that aspect of it: Did people not do what 
they were supposed to do in that regard?
    But, secondly, in a broader sense this is a threat. Our 
programs and procedures are largely relics of our subversion 
and espionage, looking for spies. Looking for spies is still 
important. We ought to continue to look for spies. But we now 
also have to look for a different kind of threat that is 
emerging within the forces. I am confident we are good enough 
to do both.
    I agree with you, some of this is individual level 
responsibility--people who knew or should have known and should 
have taken actions that did not, and folks ought to be held 
accountable for that.
    Mr. Moran. That was a very good observation. I appreciate 
that. Both at Walter Reed and Fort Hood there were people who 
should have acted. And then within those 24 hours before this 
incident occurred, there were clear indications that should 
have been followed up on. But I thank you very much for your 
testimony.
    Mr. Dicks. Mr. Kingston.

                           PREVIOUS INCIDENTS

    Mr. Kingston. Thank you, Mr. Chairman. I wanted to 
associate myself with the comments of Mr. Moran.
    It does seem to me, General, that this is a little bit 
politics, a little bit public relations, and also an act of 
good will towards the families, which is very proper to do. But 
at the same time, it doesn't seem to me that we have to have 
new programs, new spending, new procedures. It seems to me--I 
think Mr. Moran has really hit something that is a concern of 
mine. Historically, how often has this sort of thing happened? 
We know there was an incident in Iraq several years ago with a 
man with a grenade. But historically, tell me about World War 
II, World War I. Certainly there were acts of soldiers that had 
some instability and they turned on their own men. What was 
done with it? How many incidents were there out there?
    General Ham. Sir, I don't know exactly how many incidents 
there are, but I know that one where 13 individuals were killed 
is unacceptable. And we have got to do all that we can to 
prevent a subsequent incident of this nature.
    Your point is well taken, that much of this is fundamental 
to good leadership. And good leadership, effective leadership, 
may have made a difference and probably would have made a 
difference in this individual's progress through his education, 
training, and development. But having said that, I think it is 
important for us to recognize that we do have a changed 
security environment. Again, individual acts of violence, 
whether they be motivated by Islamic extremism or other 
motivations, is something we need to better understand.
    Mr. Kingston. General, that is why I am asking you what the 
history was, Vietnam War, Korean War. Certainly, there have 
been instances of soldiers cracking, turning on their own 
troops. Correct?
    General Ham. Yes, sir, that is correct.
    Mr. Kingston. Wouldn't that be relevant to this? Because I 
think on one hand we are saying--and Mr. Frelinghuysen went up 
to the water's edge on profiling--but on one hand we are 
saying, and I am hearing you say, that it is evolving. General, 
you said it is an emerging science. But there is an insinuation 
that there is an Islamic extremist issue here. But maybe there 
isn't. Maybe you just have a soldier that went berserk. And 
couldn't there be some lessons from Vietnam or the Korean War 
or World War II that there were other soldiers that went 
berserk and was dealt with?

                             RADICALIZATION

    Mr. Dicks. Would the gentleman yield? I think there are 
plenty of examples of radicalization of individuals in the 
United States. We have already discovered in Homeland Security 
that should make this an issue of concern. The best way to deal 
with radicalization is training so people perceive it. Police 
officers went into these four or five guys' apartment and found 
all this literature. Now, had they not had training in 
radicalization, they would have just dismissed this, and these 
people would have gone and done some violent thing. But they 
saw this literature, and then there were police officers who 
had been trained, and they acted and prevented these people 
from taking violent action against others.
    So I do think there is--this is a different situation. You 
are not talking about other state actors. These are nonstate 
actors that were in the midst of trying to radicalize people in 
this country to take action against other Americans. I think 
what they are doing here, you have to train people to be aware 
of this, in my judgment.
    Mr. Kingston. That being the case, are you not profiling? 
Is that not a relevant piece of this puzzle? Areyou going to 
watch somebody a little bit closer if he comes from some background 
than somebody else?
    General Ham. One of the points identified in the DoD review 
is the challenge of balance of security; balancing that with 
our longstanding appreciation for civil liberties and 
individual privacy. That is a difficult balance.
    This will be an issue that will be addressed in now the 
ongoing review of these findings and the recommendations. It is 
difficult. And this is why I think we owe our commanders the 
best guidance that we can give them in terms of indicators of 
things to look for of folks who may be tending toward violence. 
And while religious extremism, Islamic extremism in this case, 
is a motivation, it certainly is not the only motivation that 
might drive someone to violent behavior. We have got to look at 
those other aspects as well.
    Mr. Kingston. Just in plain English, give me an example, 
being very specific. Under the new guidelines what would I do 
before I got on the list or got pulled aside and say, Hey, 
what's going on here? How would you know when I got 
radicalized?
    General Ham. In this particular case--again, in the public 
domain it has been widely reported that Major Hasan attempted 
and maybe had some successful e-mail contact with a known or 
suspected terrorist individual. Well, that has got to be item 
number one. The barrier that we have is that that information, 
while known to some in the government, was not known to his 
immediate commanders and supervisors. They didn't know he was 
doing that. Had they known, we would argue----
    Mr. Kingston. DHS knew, right?
    General Ham. I guess because we were not--we were 
prohibited from going into the intelligence investigation--I 
knew that happened, but I don't know the details of who knew 
what, when.
    Mr. Kingston. If DHS or whomever knows now, they would now 
tell DoD?

                   PROCEDURES FOR INFORMATION SHARING

    General Ham. That is what we have recommended, is that the 
Department of Defense revise its procedures for information 
sharing; again, focusing on the centrality of the commander, 
that person who is charge of making those tough decisions. We 
have also got to give that person the information upon which to 
base their actions.
    Mr. Dicks. If the gentleman would yield, this should have 
gone to the FBI and the National Counterterrorism Center. They 
should have been brought into this as soon as they found out 
that this gentleman had contact with a known terrorist, there 
should have been action taken. I don't know if people know they 
are supposed to do that.
    Again, I would argue this means we have to do more training 
so people know when somebody does that. But if it is a known 
terrorist, they have to take it to the FBI and take it to the 
National Counterterrorism Center.
    Mr. Kingston. Thank you, Mr. Chairman.
    Mr. Dicks. Mr. Bishop.

              PRE- AND POST-DEPLOYMENT MEDICAL ASSESSMENTS

    Mr. Bishop. Thank you, gentlemen. I have listened with 
great interest. The radicalization of people who are associated 
and a part of our military is very, very important and very 
relevant. But even more basic than that is the pre- and 
postdeployment medical assessments that even soldiers who are 
not radicalized, who suffer from PTSD, who come back with 
various other kinds of mental problems, still are not properly 
assessed.
    Of course, this subcommittee and the Congress has time and 
again over the last 4 years mandated the pre-deployment and 
postdeployment assessments. Several Surgeon Generals from the 
Army Department of Defense have come forward and said, Well, we 
use a self-administered form. We have technicians that go and 
review those forms postdeployment, and if anything stands out, 
then we will call the individual in for an interview.
    Well, I have always over the last 4 or 5 years questioned 
the sufficiency of that self-administered assessment in 
identifying soldiers who could pose a potential risk to 
themselves, to other soldiers, or to their families, pre- and 
postdeployment. Pre-deployment, particularly in the case of 
National Guard and Reserve units, they are going into theater. 
They may have some medical condition that is not obvious that 
might cause them to go into a coma of some sort, or some other 
mental disability that would endanger their fellow soldiers 
which, without a hands-on examination, would not be revealed 
when they come back from the first, second, or multiple 
deployments, being able to assess what changes have been made 
to that individual in a way that could pose a threat. That is 
separate and apart from radicalization.
    I think the Independent Review has made it pretty clear 
that the policies and procedures of the government governing 
the assessment of the pre- and post-deployments do not provide 
comprehensive assessment of violence indicators.
    So what kinds of reviews are necessary to assure that we 
have that sufficient information and that the people who need 
to have it are given that information and that the information 
is good?

                  RESOURCES FOR ADDITIONAL ASSESSMENTS

    Mr. Bishop. What kind of training and education do we need 
to make sure that you have resources to provide to make sure 
that happens, and what other kinds of policies and procedures 
need to be updated or broadened to look at these assessments?
    General Thomas. Congressman, I will respond to that. Thank 
you for that question.
    The behavioral health care of our force is of tantamount 
importance to us. As a physician, I can't overemphasize that. I 
also have to say that in the course of my military medical 
career, I have never been in the position where I have been 
able to take care of patients as well as we are right now, and 
thanks in large part to what Congress has provided to us.
    What we get, in my experience, is we have a lot of policies 
that come out there. The postdeployment health assessment, as 
you mentioned, is an example of one. Once that is fielded, the 
practical application of that is something else.
    So what we have done is we have taken, in my experience 
here in the Army, for example, we have seen the overall policy, 
but we know that it is inadequate. And that is a clinical 
determination. We are not identifying all these soldiers with 
PTSD, posttraumatic stress disorder, for example, or traumatic 
brain injuries.
    We have taken a panel of experts that have worked through 
the Defense Centers of Excellence, and this is civilian and 
military experts across the Nation. We have taken some 
protocols that they have been working for a period of time and 
we have operationalized those to do exactly what you described, 
Congressman, to address the need of the force.
    Our traumatic brain injury and PTS training we just 
fielded--there is a directive-type memo, as a matter of fact, 
in staff and with the DoD. We have done this as a collaborative 
effort with all the services, the joint services, the Defense 
Center of Excellence, civilian and military centers, and we 
have rolled that out to the force.
    We went ahead and stepped it ahead of the time, because the 
Army is leading the way on this, but the Navy is in lockstep 
with us, as is the Marines. The Marines are training and 
modeling their program after ours. This will enable us to 
identify early indicators of behavioral health injuries to 
soldiers.
    There is a face-to-face portion of this, too, where we 
have----
    Mr. Bishop. Is this the post-deployment assessment?
    General Thomas. Yes, sir. In the post-deployment 
assessment, actually that phase of this comprehensive plan 
includes a virtual behavioral health interview. We did a pilot 
on that in Alaska. It is actually ongoing right now. Prior to 
Alaska, we did a whole returning battalion in Hawaii, and that 
was very successful. So we have expanded it to an entire 
brigade combat team, the 4th Brigade of the 24th Infantry 
returning to Alaska, and that is ongoing at this time. We 
intend to expand that even more.
     Mr. Bishop. Ultimately you want to expand that to every 
soldier that is deployed and comes back?
    General Thomas. Yes, sir, Congressman. We are doing that 
now, 100 percent contact. If I could back up a little bit----
    Mr. Bishop. Contact virtually?
    General Thomas. Yes, sir. Well, virtual and/or face-to-
face, if you have the assets on the ground. Yes, sir.
    Mr. Bishop. Thank you. I am glad to hear that, because this 
has been a concern for the last 4 or 5 years, and it was 
really, really frustrating to have the Surgeon General come and 
sit there and say, Well, we test too much anyway; we do too 
many medical examinations anyway.
    General Thomas. Sir, I think that this is a good indication 
of how we can actually identify those folks that are most at 
risk. We have already found, our preliminary findings in this 
100 percent contact has more than doubled our referral rates, 
which is a positive thing because we are getting the soldiers 
the care that they need.
    Again, I have to thank Congress for allowing us to have the 
funds to implement these programs and to expand them.
    General Ham. Mr. Chairman, may I?
    Chairman Dicks. Go ahead.

                     FACE-TO-FACE VIRTUAL ENCOUNTER

    General Ham. Congressman, in my role as a serving 
commander, I would say we are far more sophisticated than we 
were just a few years ago, as General Thomas has indicated, 
because of the support you all have provided to us. We know 
that the initial survey is in and of itself inadequate. So as 
General Thomas has indicated, we now mandate either face-to-
face or virtual encounter for every servicemember.
    Mr. Bishop. That is now protocol.
    General Ham. I would just tell you, in my command in Europe 
that is what we are doing. We are requiring every returning 
soldier to interact face-to-face with somebody. And, not 
surprisingly, those who didn't indicate anything, reveal 
anything in their survey, may do so when they are face-to-face, 
if we have the right person doing that counseling.
    We have also learned that the immediate survey in a face-
to-face encounter immediately following redeployment is not 
sufficient to indicate what might occur 60, 90, 120 days post-
deployment, because there is a bit of euphoria, frankly,upon 
being reunited with friends and family that may mask some underlying 
issue. So a follow-on assessment is necessary, and we are doing that 
with great effect.
    Mr. Bishop. Does that involve the family members? I am 
involved with the Military Family Caucus. Of course, family 
members are directly and indirectly impacted by that. They are 
closest to the soldiers when they come back from deployments, 
and they probably could pick up on differences in behaviors 
almost immediately, but may or may not know with whom they 
should speak about it, or what the protocol for them to do that 
without offending their spouse.
    General Ham. Congressman, may I give you a personal 
example? When I redeployed, I was pretty happy and going about 
my business, and about 30 to 45 days after redeployment, my 
wife said, You need to go see somebody. And I did.
    You are exactly right; informing, educating family members 
and including them in this process. And this is, again thanks 
to you, the value of the military family life consultants has 
been extraordinarily beneficial in that regard.
    Mr. Dicks. Mrs. Kilpatrick.

                             PUBLIC DOMAIN

    Ms. Kilpatrick. Thank you, Mr. Chairman. Good afternoon, 
Generals.
    Let's see how to start this. I highly respect your work, 
what you do, your service, your career, and in this meeting, I 
love this last chair here.
    Just a few things: 13 dead, 32 wounded; someone had 
information that the major had contacted the Yemen man. It is 
in the public domain. You said a couple times, General Ham, 
today, that you aren't doing that part; that is the other 
investigation. I think I wrote down Army accountability 
investigation. They are doing the criminal part of it, I guess. 
I came today, I thought I was going to hear the criminal part. 
So I have a few questions here. How long had the major been a 
major when the incident occurred?
    General Ham. He was promoted in 2008.
    Ms. Kilpatrick. 2008. What month of 2008? Any idea? The 
incident was in 2008, or 2009.
    General Ham. In 2009, November 5, 2009.
    Ms. Kilpatrick. Over a year he had been a major?
    General Ham. I would have to double-check, Congresswoman.
    [The information follows:]

    Major Hasan was promoted to rank of Major on May 17, 2009.

    Ms. Kilpatrick. For a while. You kept referring to in the 
public domain, but we can't get much of that here in the record 
today. So you were alluding to it, and it says in the public 
domain that supervisors and fellow students continually 
expressed concern about his behavior.
    Mr. Chairman just asked, well, okay, he is contacting the 
guy overseas, we are in two wars, his supervisors andstudents 
continually reported him. I mean, you all are doing--I feel I am at the 
University of Michigan in a class with the 101 thing. You are doing an 
excellent job teaching me procedures and what needs to happen.
    But I kind of agree with Mr. Moran down there. We only have 
so much money. We have got to spend it wisely. Our men and 
women have to be protected. Fort Hood, actually the facility 
itself, they had been deployed, two, three, four times, some of 
them. So if anybody is supposed to be protected, those people 
should be. He went there; he was acting crazy.
    I mean, you don't have to get permission from Homeland 
Security and Secretary Gates, who I have the highest respect 
for, to know that something is wrong with this gentleman. The 3 
or 4 days--and we don't have that today, I think Mr. Moran also 
alluded to that, it was a dossier of things. And I am just a 
school teacher and a grandmother, and I know he is crazy, after 
reading it.
    We can't let that happen to the men and women who serve and 
protect us. As good as you guys are, and I appreciate all that 
you do, it was too big of a hole--12 dead, 32 injured, and 
countless families and children who will never be the same.
    I am not blaming you, but I don't need another dossier or 
term paper to tell me we need to do something. A phone call, 
the IT that we put all the money in? I am not blaming you. I am 
just one little member here. But it can't happen. And if we 
don't close it up today, it is going to happen again and again. 
It could be anybody.
    We are just fortunate that nothing happens. We are in two 
wars. These young people are being deployed two, three, four 
times. I have got two of them that went five, and back home 
looking the same, but they probably need some PTSD counseling 
as well.
    So I don't know that I have questions. I am just concerned 
when we have supervisors and other persons who say to you that 
this guy is crazy, that he is doing something in a foreign land 
that is not friends with us--on their face, sometimes they act 
like they are--we don't need Homeland Security to know the 
major should have been removed. He should have been, what do 
you call it, put in something by himself and counseled face to 
face, how he got to that. He has a career.
    The other part of it, I come from Michigan, where the 
largest population of Arabs live outside of the Middle East. I 
have grown up with Arabs all my life. But whenever you get one 
like this, it continues the stereotype that they are all crazy 
and bad.
    I want us to be smarter. I want to know more, Mr. Chairman, 
about the Army accountability investigation. How can he 
continue to get promoted, killing 12 and wounding 32, and 
countless children will never see their parents? It is not 
acceptable. It is just not acceptable. I don't have the answer 
for it. I believe if Jack Murtha was here, he would give you a 
wringing. I can hear him in my ear.
    So we want to work with you; certainly I do, and I know my 
counterparts do. But I am not willing to give you millions more 
dollars for papers and studies and all that unless you come 
back and rearrange your budget and what is important. It 
probably needs a whole overhaul. It probably needs a 
comprehensive overall.
    The budget, we only have limited dollars. This is the 
biggest and the best budget. It is the best committee I have 
been on in 30 years. We have to do better, because the world is 
different. We have to do better because our young men and women 
who risk their lives for us every day require that.
    Fort Hood? And that he picked Fort Hood? It was more than 
the 13 and the 32. It was the image that Fort Hood has to the 
rest of the world, and he penetrated it on the inside. I 
connect it to the Oklahoma bombing and something similar to 
that.
    Mr. Chairman, I don't have any questions per se. Thank you 
very much.
    Chairman Dicks. We appreciate your comments. Do you want to 
say anything?
    General Ham. Yes, ma'am, I agree with you. What happened 
was unacceptable, and we lost 13 and 43 were wounded. That is 
unacceptable. And it is very clear in this review that there 
are some individuals who did not do their duty.
    Ms. Kilpatrick. Who can tell us if they are still on the 
job or not?
    General Ham. To the best of my knowledge, no one has been 
separated.
    Ms. Kilpatrick. Why?
    Chairman Dicks. Because the investigations have not been 
completed yet. You have to give them a chance to do their job.
    Ms. Kilpatrick. That is probably coming from the Army 
accountability study. It is not your problem.
    General Ham. Yes, ma'am, it is; but in a different role. I 
participated in this DoD review we are here to discuss. When 
that was concluded, Secretary Gates passed allegations about 
individual accountability to the Secretary of the Army. The 
Secretary of the Army then, on that same day, appointed me to 
do that accountability investigation that does name names and 
identify individuals that I recommend to the Secretary of the 
Army be held accountable.
    That process is ongoing. The Secretary of the Army has not 
yet received that report, but he will soon and he will make 
some decisions. I am confident that when he makes those 
decisions and those actions are taken, that the Secretary of 
the Army would be glad to have me come over and talk with you 
about that process. But because it is underway, I am not at 
liberty to do that.
    Mr. Dicks. We will bring you back for another hearing to 
report to the committee.
    Mr. Rogers.
    Mr. Rogers. I pass, for the moment.

                    Questions by Congressman Carter

    Mr. Dicks. We are going to let Judge Carter, who represents 
Fort Hood, ask a few questions. He is a valued member of the 
Appropriations Committee and serves on Military Construction, 
and it is his district that was affected by this.
    Mr. Carter. Thank you, Mr. Chairman, and Ranking Member. I 
really appreciate being allowed to be here as part of this 
hearing.
    This has been a very active part of my life since November 
5th. Just as a little background, the day this happened, my 
field director, a retired colonel from the Chaplain Corps, 
Gregg Schannep--you may know Gregg--was actually at the site 
when the shooting started. He called the CO's office, one of 
multiples who called the CO to say that if you are not having a 
training exercise, there is firing going on over here. So my 
office is right in the middle of this terrible situation.
    I have visited with quite a few of the wounded soldiers. In 
fact we have a soldier right now presently in south Austin who 
just rejected a plate in his skull and they had to go in and 
refix him.
    By the way, let me say, every soldier I have met is a 
credit to the uniform, including this young man. His attitude 
is fabulous. But his mom and dad asked me the question, 
Shouldn't we expect more than our child to get this severely 
injured, or others dead, by somebody in our own uniform on our 
own base where they should be safe?
    So this is a critical situation. And because I happened to 
be there and to be in the middle of it, we have become the 
subject of an awful lot of Internet traffic with people, mostly 
veterans who live in the Fort Hood area, who are making 
comments to me. Not Active Duty soldiers. The Active Duty 
soldiers, they do their duty, and you should be very proud of 
them. And, by the way, I will fight anybody who says we didn't 
respond well once this thing happened. I don't think it could 
have been done any better.
    But getting back to this, the one thing I keep hearing 
overriding is that the ordinary soldier--you have been talking 
to us about the chain of command and the duty of the commander 
to recognize behavior and how we need to get them trained to 
learn to recognize behavior. I don't have any argument with 
that.
    What I am hearing from Gulf War soldiers, soldiers that 
have just gotten out, they believe there is an attitude that 
the ordinary soldier who might be coming in contact with the 
major and have him either proselytize them or just criticize 
the war or talk about the goodness of jihad, which it is my 
understanding happened a lot, they felt it was not--it would be 
detrimental to their career in the Army for them to go to their 
commanding officer or others to report this, and it was an 
issue of political correctness.
    As one former sergeant reported to me, he said, We have got 
a shortage of medical personnel, we need Arab speakers. These 
are prioritized people. And even General Casey, upon hearing of 
this, made the comment, Let's hope this doesn't hurt our 
diversity program.
    All those things tend to make us think that the ordinary 
soldier, we might have a culture in the Army that would make 
him think that making a report to someone of what he would 
consider bizarre behavior, might be detrimental to his career 
in the Army.
    First, I would like to know if you have run across anything 
along those lines. I recognize this is trifurcated, so you are 
just one of at least three routes that I know we are looking 
into this. But I think that is the underlying question that we 
have to ask ourselves: Would a soldier feeluncomfortable 
because of political correctness to making a report? Not an officer 
looking into someone under his command, but just a soldier who serves 
alongside, or the nurse that might serve alongside the mental health 
professional. Have you run into that, and can you answer that question?
    General Ham. Congressman, thanks for that question. I would 
just say at the outset, the co-chairs and I traveled to Fort 
Hood the day after Secretary Gates appointed this panel, and 
what the Corps Commander and all those at Fort Hood and the 
greater Fort Hood community, what they did to pull together was 
extraordinary.
    There were in fact, Congressman, allegations of 
inappropriate religious remarks conducted by Major Hasan. He 
was then a captain in residency. He was at this time in Walter 
Reed. And Secretary Gates directed us to look into that, and we 
did. And what we found is in fact patients had made a few 
comments to others, to supervisory personnel, that said, Hey, 
this guy, he said some things that made me uncomfortable.
    And this is, frankly, an instance where supervisors, at 
least as far as we can tell, did what they were supposed to do. 
There are records that indicate that he was counseled and 
advised as to the inappropriateness of making religious 
comments in a counseling session. Again, he was a resident at 
that point at Walter Reed, and there were no further instances 
of that.
    We specifically asked that question of the patients that he 
saw at Fort Hood, and similarly there were no indications from 
patients that he saw that he made inappropriate religious 
comments in his provision of medical care to them.
    Mr. Carter. Well, I am just telling you what has been 
reported to me. Also I have actually had someone who has been 
in medical school with him that said he did the same thing in 
medical school. So it is hearsay. And I am an old judge, I take 
hearsay for what it is worth. But we are in the business of 
looking into what is going on with soldiers.
    I will tell you something that I experienced on the 6th of 
November when I was there at Darnall. A nurse came up to me and 
said, ``There is something underlying this that the Army better 
remember.'' And I am sure you know this. She said, ``I just got 
an e-mail from Australia from a nurse that I served with in 
Australia, in Afghanistan, and I had just come back. And that 
nurse said, `Our soldiers are asking in Australia, Can we trust 
everybody that is wearing our uniform? Because the Americans 
can't trust everybody that is wearing their uniform.' ''
    That is a psychological barrier to fitness for our 
soldiers. And I hope and pray that we can get past having 
soldiers have those kinds of feelings about what happened, 
because the parents are feeling that way and I am sure the 
soldiers are feeling that way.
    So you guys have got a big responsibility. I am on your 
side, but I want everybody to be straight. For the first time 
since this happened, yesterday Secretary Napolitano, and again 
today in a hearing where I talked to her, acknowledged that as 
far as the homeland was concerned, that was an Islamic 
terrorist act. To this point, I haven't heard the Army say 
that. I think it would help a lot when they finish their 
investigation if they put political correctness aside and make 
truthful statements.
    Thank you.
    General Ham. Mr. Chairman, if I may, I think you are 
exactly right. There is tremendous concern. One of the reasons 
this attack is so important to us is that it is one of our own. 
It is inside the family, and a field grade officer on top of 
that. So one of the great concerns is what is that effect 
inside the service? Again, do we start to rip apart this fabric 
of trust that is so essential within the Department?
    Secondly, there is a great concern, a very valid concern, 
that says--you now say am I concerned? Do I feel comfortable? 
Am I going to go to an Army mental health provider, behavioral 
health specialist, and be open and forthright? This guy came 
from that community.
    The good news is that we haven't seen, at least in the 
conduct of the DoD review, any significant negative 
consequences from that. And I defer to General Thomas from a 
broader Army medical standpoint.
    But I think you have hit exactly the point of why this one 
is so different. This was someone who was in a position of 
trust and confidence who killed 13 of our own, and that is 
absolutely unacceptable and we must do all that we can to 
prevent reoccurrence.
    Mr. Carter. Thank you.
    Mr. Dicks. Thank you.
    Mr. Rogers.
    Mr. Rogers. Thank you, Mr. Chairman.
    I am interested in the conversation--you mentioned or, when 
he was at Walter Reed that there had been complaints. Were 
those by enlisted people?
    General Ham. Sir, I don't know off the top of my head. All 
I know, without doing a fair amount of research, is patients 
that he was seeing.
    Mr. Rogers. What was the nature----
    General Thomas. Sir, no, I don't have that information.
    Mr. Rogers. What was the nature of what they were 
complaining about?
    General Ham. The essence of it, sir, was that in his 
counsel to the patients, that the supervisors felt that he 
focused inappropriately on religion as an underlying cause--as 
an example to say, Well, if you had stronger faith in God, then 
maybe you would not be experiencing these kinds of problems. It 
wasn't outright advocacy of Islam, but it was clearly 
inappropriate to insert that conversation into the treatment of 
a patient.
    Mr. Rogers. I wouldn't think that would be altogether 
unusual though, would it be?
    General Ham. It was deemed by his supervisors--remember, he 
was now in residency. It was deemed by his supervisors at that 
point that those comments were inappropriate to the patient 
that he was seeing at that time.
    Mr. Rogers. And these people that complained, I am 
interested in the process. What was done with their complaints?
    General Ham. Twofold. First, the supervising physicians of 
Captain Hasan counseled him, advised him, that that was not 
appropriate and how he could better, more effectively provide 
mental health advice to the patients he was seeing.
    Secondly, there was an effort to go back to those patients 
to ensure that they were satisfied and were receiving the care 
that was necessary by a different provider.
    Mr. Rogers. But who did they complain to?
    General Ham. It was the supervising physicians that were 
overseeing his residency.
    Mr. Rogers. And then what did they do with the information?
    General Ham. Twofold. Counseled Major Hasan as to why he 
should not do that and why it was inappropriate to do so; and, 
secondly, to assure those patients were afforded the 
opportunity for care by another physician, to ensure they got 
the care and treatment that they required.
    Mr. Rogers. And that was the end of it, then?
    General Ham. Yes, sir. But we did again, post-November 5th, 
when Major Hasan's patients were interviewed at Fort Hood and 
also other patients that he had seen at Walter Reed, that 
specific question was asked as to whether or not they felt that 
he had made inappropriate religious comments.
    Mr. Rogers. Well, have there been changes made since Fort 
Hood about how inappropriate things that are said are reported 
and handled?
    General Ham. Within the medical community, I am unsure. I 
defer to General Thomas.
    General Thomas. No, sir. That I am aware of, there are no 
changes with respect to the training programs instituted at 
this time post the 5th of November incident. And just having 
trained residents and having been a military medical resident 
myself, typically what would happen, in general terms, if a 
patient had a complaint against me or another provider, another 
doctor, they would report it to my supervising physician, in 
this case the fully credentialed staff physician over me as a 
resident. And then, having been a supervising staff surgeon, 
patients would commonly ask to see me if they had an issue with 
one of my residents.
    Mr. Rogers. Well, I am not as much interested in the 
doctor-patient matter as I am just in the military generally. 
If a soldier sees or observes something that is suspicious, 
like this, have we changed the procedures about how he or she 
can go about reporting that and having it looked into?
    General Ham. Not to my knowledge, sir. I think instructive 
here are Major Hasan's peers as he was going through residency, 
and then in the 2 years he participated in a fellowship also at 
Walter Reed. Peers of his did, in fact, make reports to 
supervisors that said, Hey, this guy is making inappropriate 
comments.
    And that is what we want them to do. They confronted him 
also, but they also went to his supervisors. So I think the 
process was okay. In my view, what we found was that some of 
those supervisors failed to execute their duties.
    Mr. Rogers. Thank you.
    Mr. Dicks. All right, thank you, General. This was a very 
good hearing. We may ask you to come back after the decisions 
are made by the Secretary. We appreciate yourcandor and your 
good work and your service, both of you. Thank you.
    The subcommittee was adjourned.
    [Clerk's note.--Questions submitted by Ms. Granger and the 
answers thereto follow:]

    Question. The ``Protecting the Force'' report praises the Active 
Shooter Response model that helped in this horrible scenario. Those 
first responders were trained at The Advanced Law Enforcement Rapid 
Response Training (ALERRT) Center at Texas State University. The report 
also stated that current Pentagon policy does not currently take 
advantage of successful models for active shooter response for civilian 
and military law enforcement on DoD installations and facilities. What 
efforts are being made by the Department of Defense to seek out and 
partner with this existing successful training program?
    Answer. The Independent Review Related to Fort Hood found that 
responding officers attributed their actions to relatively new training 
on Active Shooter Response instituted by the Fort Hood Department of 
Emergency Services. In the wake of the Fort Hood incident, the 
Department has taken a more systematic approach to ensure that military 
and civilian police, as well as all Service members, are familiar with 
``Active Shooter'' scenario best practices. To that end, the Department 
recommended two forms of Active Shooter Training. First, in March 2010, 
DoD will incorporate a new training module addressing ``Active 
Shooter'' threats into the Antiterrorism Level 1 online training. This 
training will be standard across all Services and mandatory for all 
uniformed Service members, as well as for all General Schedule and 
contractor employees who are on TDY orders to deploy. By June 2010, the 
Under Secretary of Defense for Acquisition, Technology, and Logistics 
will issue changes to DoD Instruction 6055.17, DoD Installation 
Emergency Management (IEM) Program, directing commanders to incorporate 
the ``Active Shooter'' scenario, lessons learned from Fort Hood, and 
other workplace violence case studies into their Installation Emergency 
Management training programs.
    The Under Secretary of Defense for Personnel and Readiness will 
update DoD Instruction 5210.90, Minimum Training, Certification, and 
Physical Fitness Standards for Civilian Policy and Security Guards (CP/
SGs) in the Department of Defense, or issue a new instruction to ensure 
that ``Active Shooter'' training tasks will become part of the minimum 
law enforcement training standards for DoD military and civilian 
police. The Under Secretary will also seek ``Active Shooter'' best 
practices to provide DoD law enforcement elements with the up-to-date 
practices and protocols for that operational requirement.
    Question. Does the Department intend on implementing a standard 
active shooter response training program? Or will it be left to the 
independent Services to develop their own programs?
    Answer. The Department implemented a standard training program. The 
new training module addressing ``Active Shooter'' response protocols is 
standard across all Services. It is mandatory training for all Service 
members, as well as for General Schedule and contract employees on TDY 
orders to deploy. Overseas adult dependents are also encouraged to 
receive AT Level 1 training.
    Question. It would seem logical that any active shooter training, 
curriculum and response protocol developed by the Pentagon would be 
consistent and shared with other area law enforcement stakeholders. 
Will the Department be working with the neighboring civilian law 
enforcement stakeholders in the development of active shooter training 
and response protocols?
    Answer. It has been common practice for years for installation 
commanders to engage with local law enforcement stakeholders to 
establish memoranda of agreement and understanding on force protection 
and law enforcement issues. At the operational level, commanders 
exercise discretion as to how best to work with local law enforcement 
stakeholders. Often, as was the case with ``Active Shooter'' training 
at the Fort Hood Department of Emergency Services, installations go 
above and beyond the DoD instruction to ensure best practices are 
shared between DoD and non-DoD law enforcement practitioners and first 
responders.

    [Clerks note.--End of questions submitted by Ms. Granger.]
                                         Wednesday, March 10, 2010.

                           AIR FORCE POSTURE

                               WITNESSES

HON. MICHAEL B. DONLEY, SECRETARY OF THE AIR FORCE
GENERAL NORTON A. SCHWARTZ, CHIEF OF STAFF, UNITED STATES AIR FORCE

                              Introduction

    Mr. Dicks. The subcommittee will come to order.
    This afternoon, the committee will hold an open hearing 
concerning the current posture of the Air Force as well as the 
fiscal year 2011 budget request.
    We are pleased to welcome two distinguished witnesses, the 
Honorable Michael B. Donley, Secretary of the Air Force, and 
General Norton A. Schwartz, Chief of Staff of the Air Force. 
These gentlemen are very well qualified to discuss all aspects 
of the fiscal year 2011 budget request and answer questions the 
committee has regarding the Air Force.
    Secretary Donley, General Schwartz, thank you for being 
here this afternoon. The committee is very interested in 
hearing what you have to say about the Air Force's fiscal year 
2011 budget.
    Specifically, as you are well aware, some of us on the 
committee are anxious to hear about the status of the KC-X 
program with the announcement on Monday that one of the 
companies will not bid on the program. The Department had 
planned on a summer award, so we are interested to hear how 
this decision will affect a contract award and how such an 
award will be negotiated with the remaining company.
    Additionally, the committee is looking forward to a 
discussion on the status of the Joint Strike Fighter. The 
review conducted by the revised joint estimating team this fall 
predicted at least a 13-month schedule slip and the need for 
additional funding. To address these concerns, the Department 
of Defense has significantly decreased the number of aircraft 
it had planned to procure over the next 5 years and added 
funding to the development program. Only time will tell if the 
added time and funds will fully address the problems with this 
vital program or if the taxpayer will once again be forced to 
add additional resources.
    Another topic of concern is the continued delay in the 
development of our next long-range strike platform. The 
Quadrennial Defense Review directed further study of long-range 
strike capabilities.
    The Department of Defense initiated a next-generation 
bomber program several years ago. However, Secretary Gates 
terminated the effort last year. With the time required to 
fully develop a penetrating bomber to be in excess of a decade, 
if we were lucky, it is concerning that the Department 
continues to delay the needed investment in recapitalizing our 
current fleet of bomber aircraft. Our current bomber fleet 
consists of 163 aircraft, ranging in age from 50 years for the 
B-52 to 13 years for the B-2. While we applaud the plan to 
provide $199 million for the bomber-related industrial base, we 
are truly concerned that it is not enough.
    A continuing area of concern is the overuse of 
undefinitized contract actions by the Air Force. While these 
types of contracts are useful to satisfy critical time-
sensitive and urgent warfighter requirements in a timely 
manner, they should not be used for routine acquisition or as a 
result of poor planning. Further, the inability of the Air 
Force and industry to definitize the contracts in a timely 
manner hinders cost control efforts, which ultimately leads to 
increasing costs for multibillion dollar acquisition programs. 
We applaud the efforts you have made over the last 6 months, 
but the committee will continue to provide stringent oversight 
to ensure the Air Force continues to reform its contracting 
procedures.
    In addition to these areas, the committee remains concerned 
with the Air Force's in-sourcing plans. The Air Force budget 
request includes a $1.6 billion increase for civilian 
compensation to support an additional 26,000 Federal civilians 
and $1 billion less for contracted services. But it is unclear 
to the committee what informs the hiring plan since the Air 
Force does not have an adequate inventory of contracted 
services. In other words, we don't know who all your 
contractors are at this point.
    We look forward to your testimony and an informative 
question-and-answer session.
    Now, before we hear your testimony, I would like to call on 
Mr. Tiahrt for any comments he would like to make.
    Mr. Tiahrt. Thank you, Mr. Chairman. I welcome Secretary 
Donley and General Schwartz.
    Some of you may have heard the Marines say, you can send us 
anywhere in the globe; just make sure the airplanes overhead 
are ours. And I think that is a topic that we have enjoyed, air 
superiority. We have enjoyed that for some time, mostly because 
our pilots are the best in the word and because we have given 
them the tools to do their job safely and come home to their 
families afterwards.
    However, I remain cautious about our ability to maintain 
this advantage. Certainly our pilots will continue to be 
trained at a level far exceeding anyone else, but I am 
concerned that they will have the quality and quantity of 
airplanes needed to do their job.
    We must also maintain our ability to move troops and 
equipment. We cannot fight the enemy if we can't get to him. To 
accomplish this quickly and efficiently and safely, it is 
essential that we maintain the correct mix of assets for both 
strategic and tactical airlift.
    I think we have to address these issues to maintain the 
dominance in the sky and our global presence, and 
recapitalization of our fleet is part of that. So I am 
interested in your testimony. And thank you, Chairman, for the 
opportunity to open.
    Mr. Dicks. Thank you.
    Why don't you go ahead and proceed as you wish.
    Mr. Donley. Thank you, Mr. Chairman; General Schwartz and I 
would like to congratulate you on your election to this seat.
    Mr. Dicks. Thank you very much.
    Mr. Donley. There has been a long, distinguished series of 
Chairmen in this position; and we are anxious to work with you 
going forward.
    Mr. Dicks. Thank you.

                 Summary Statement of Secretary Donley

    Mr. Donley. Mr. Chairman, Mr. Tiahrt, members of the 
committee, it is a pleasure to be here representing almost 
680,000 Active duty, Guard, and Reserve Airmen and Air Force 
civilians. I am also honored to be here with General Schwartz, 
who has been a phenomenal partner and a tireless public servant 
as we have worked together for almost the last two years.
    Today, I am pleased to report that America's Air Force 
continues to make progress in strengthening our contributions 
as part of the joint team and in the excellence that is the 
hallmark of our service. We are requesting $150 billion in our 
baseline budget, and almost $21 billion in the overseas 
contingency operation supplemental to support this work.
    In the past year and in planning for the future, we have 
focused on balancing our resources and risk among the four 
priority objectives outlined by Secretary Gates in the recently 
released Quadrennial Defense Review (QDR).
    First, we must prevail in today's wars. Your Air Force 
understands the gravity of the situation in Afghanistan; and, 
as we continue to responsibly draw down our forces in Iraq, we 
are committed to rapidly fielding needed capabilities for the 
joint team such as surging Intelligence, Surveillance, and 
Reconnaissance (ISR) assets into theater and maximizing air 
mobility to accelerate the flow of forces into Afghanistan.
    Second, we must prevent and deter conflict across the 
spectrum of warfare. As we await the results of the Nuclear 
Posture Review and the follow-on Strategic Arms Reduction 
Treaty (START), we continue to concentrate on the safety, 
security, and sustainment of two legs of the Nation's nuclear 
arsenal. Last year, we stood up Air Force Global Strike 
Command; and we have now realigned our Inter-Continental 
Ballistic Missile (ICBM) and bomber wings under the control of 
a single commander. We also designated the Air Force Nuclear 
Weapons Center as the single point for consolidated management 
of all of our nuclear weapon sustainment activities. And to 
increase our engagement across the world, we are building 
partner capacity in Afghanistan and Iraq and developing a 
training framework that emphasizes light attack and mobility 
capabilities that can benefit other nations.
    Third, we must be prepared to defeat adversaries and 
succeed in a wide range of conflicts. We need to ensure that we 
are providing the right capabilities with our strategic airlift 
and ISR platforms and ensure our space-based assets continue to 
deliver needed capabilities for the future.
    In addition, the last two decades of sustained operations 
has strained our weapons systems. We continue to determine 
which aircraft we will modernize and sustain and which we must 
retire and recapitalize. One of our primary efforts includes 
retiring and recapitalizing many of our legacy fighters and 
tankers and replacing them respectively, with F-35s and KC-Xs. 
These decisions require tough choices, as well as the ability 
to quickly field systems that meet warfighter needs at an 
affordable price. Because acquisition underpins this effort, we 
are continuing our work to recapture excellence in this area.
    In the past year, we have made great strides in reforming 
our internal processes. We have added more program executive 
officers and are growing our acquisition workforce by several 
thousand professionals over the next five years.
    Finally, we must preserve and enhance the all-volunteer 
force. Airmen are our most valuable resource, and they have 
performed superbly in every mission and deployment they have 
undertaken.
    With the understanding that their families serve alongside 
them, in July, 2009, we began a year-long focus on our men and 
women and their families. This Year of the Air Force Family 
recognizes their sacrifices and looks todetermine how we can 
better support, develop, house, and educate them. We are determining 
which programs are performing well and where we can do better.
    Mr. Chairman, your Air Force is performing exceptionally 
well in supporting current fights, responding to growing 
demands, and shifting personnel priorities, but we are 
increasingly stressed in the Continental United States (CONUS). 
Rebuilding the nuclear expertise we need for the future will 
require continued determination and patience, and we are taking 
more risk in non-deployed force readiness. Additionally, we 
face significant challenges in modernization and in 
infrastructure.
    At the same time, however, we are developing and fielding 
new technologies and capabilities that bode well for our 
future; and I can tell you after a recent trip to the United 
States Central Command (USCENTCOM) Area of Responsibility (AOR) 
that we are recruiting and training some incredible Airmen. 
General Schwartz and I can again confirm that the Air Force is 
blessed with an outstanding civilian and military leadership 
team to address these challenges.
    Our priorities going forward are now clear. We must make 
the most of those resources available to balance capability 
against risk, balancing winning today's wars against preparing 
for tomorrow's. We need to prevail in today's fights, and we 
continue to add capability in every way possible to help ensure 
success in the ongoing conflicts.
    We must prevent and deter future conflict where we can and 
continue to be prepared and succeed across the full spectrum of 
conflict. And we must continue to preserve our Airmen and their 
families. They are truly our hedge against an uncertain future.
    Mr. Chairman, we are grateful for your and the committee's 
support; and we look forward to discussing these matters with 
the committee. Thank you.
    Mr. Dicks. General Schwartz.

                 Summary Statement of General Schwartz

    General Schwartz. Mr. Chairman, I add my congratulations, 
sir.
    And, Congressman Tiahrt, members of the committee, I am 
proud to be here representing your Air Force with Secretary 
Donley; and let me begin by reaffirming that the United States 
Air Force is fully committed to effective stewardship of the 
resources that you and the Nation have placed in our trust. 
Guided by integrity, service, and excellence, our core values, 
American Airmen are serving courageously every day with 
precision and reliability on behalf of the American people. The 
budget request supports these Airmen and continuing efforts to 
rebalance the force, to make difficult decisions on what and 
how we buy, and to sustain our needed contributions to the 
joint team.
    Secretary Donley and I established five priorities shortly 
after taking office to ensure that our entire force was focused 
on the right objectives. Most of our initial efforts centered 
on re-affirming long-established standards of excellence and 
recommitting ourselves in areas where our focus had waned. I am 
pleased to report to you today that our dedicated and talented 
Airmen understood our intent broadly and delivered in 
meaningful fashion.
    Although these initial priorities are not designed to 
change from year to year, our progress with the nuclear 
enterprise is such that we can now shift our efforts to 
sustaining the progress that we have made.
    Thus, our first priority is to continue to strengthen 
excellence in the nuclear enterprise. The rigor of our nuclear 
surety inspections demonstrates a renewed commitment to the 
highest levels of performance, but we must and we will do more 
to ensure 100 percent precision and reliability in our nuclear 
operations and logistics as close to 100 percent of the time as 
such a human endeavor will allow.
    For our second priority, that is partnering with our joint 
and coalition teammates to win today's fight, Secretary Donley 
mentioned several of the ways in which our airmen are providing 
critical air and space power for the coalition and joint team. 
Your Airmen are performing admirably wherever and whenever our 
joint teammates require, including providing battlefield 
medical support and evacuation, ordnance disposal, convoy 
security, and much more.
    Our third priority remains to develop and care for our 
airmen and their families. We initiated the Air Force Year of 
the Family, as you just heard, in recognition of the vital role 
that our families fulfill in mission accomplishment. Although 
their sacrifice is perhaps less conspicuous, their efforts are 
certainly no less noble and their contributions are no less 
substantial.
    Modernizing our inventories and organization andtraining 
are fourth priorities, among the most difficult tasks that our service 
have undertaken in these last 18 months.
    In order to achieve the balance that Secretary Gates has 
envisioned for our force, we are compelled to decision and to 
action. The budget represents a continuation of this effort.
    We set forth on a plan last year to accelerate the 
retirement of some of our older fighter aircraft. This year we 
are not retiring any additional fighters, but we are 
transitioning from some of our oldest and least capable C-130s 
and C-5s.
    We will modernize where we can, but where modernization no 
longer is cost effective, we will pursue recapitalization. KC-X 
is certainly one such example. With the recent delivery of the 
requests for proposal, our top acquisition effort to procure 
the next generation of refueling aircraft passed a significant 
milestone.
    A similar imperative goes along with the F-35. I want to 
underscore Secretary Donley's comments by noting that this 
weapons system will be the workhorse driving much of our Air 
Force and the joint force forward.
    Long-range strike is the last program among our top 
priorities and initiatives.
    The Air Force fully supports development of a family of 
systems providing both penetrating and standoff capabilities 
for the next two or three decades as described in the QDR.
    And finally, recapturing acquisition excellence, our fifth 
priority, is now only beginning to pay dividends with their 
acquisition improvement plan at the heart of the reform effort. 
While promising the initial successes must continue for a 
number of years before we can declare victory on this front, we 
are fully aware, that we must ring every bit of capability and 
value that we can from the systems that we procure. So this 
effort will require sustained focus on acquisition excellence.
    Mr. Chairman, the Air Force will continue to provide our 
best military advice and stewardship, delivering global 
vigilance, reach, and power for the Nation. Thank you for your 
continued support of the United States Air Force and 
particularly of our Airmen and their families. I look forward, 
sir, to your questions.
    [The joint statement of Secretary Donley and General 
Schwartz follows:]

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    Mr. Dicks. Well, I just wanted to comment that I was very 
pleased that both of you were there today for the presentation 
of the Gold Medal to the women aviators of World War II. That 
certainly was an amazing event. I am glad I went personally.
    And, Secretary Donley, I want to compliment you on your 
excellent remarks and recognition of these hundreds of great 
women who are still alive, who did so much during the World War 
II thing and were so little recognized for it. It just shows 
you what great people we have in this country.
    Mr. Donley. Thank you, Mr. Chairman. It was a tremendous 
day for the Nation and for our Air Force as well.

                                  KC-X

    Mr. Dicks. Now, you have Dicks and Tiahrt today, so you 
know what the first question is going to be. Can you give us an 
update on the KC-X program?
    Mr. Donley. As you noted, sir, we did receive a letter from 
Northrop Grumman indicating their intent not to bid on the 
current Request for Proposal (RFP) which is out and also 
indicating that they did not plan to protest the current----
    Mr. Dicks. Which was very welcomed.
    Mr. Donley. The Department's plan going forward is to let 
this RFP stand. This is the best way for us to get a good 
proposal from whatever offer comes in.
    Obviously, Boeing is in that mix; and we need Boeing or 
other offerers to bid on the proposal that we have put out and 
that is on the street today. So our intent is to let that 
process run its course.
    Mr. Dicks. And Boeing has not yet submitted its proposal.
    Mr. Donley. They have not. I think we have about 62 days 
left or something close to that in the current RFP.
    Mr. Dicks. Obviously, this is a very important program, and 
our committee has been involved in this thing since 2001, and I 
don't want to go through the history here. But it does point 
out one thing that you mentioned as your number five priority 
and that is what you are going to do about acquisition.
    I think we all recognize that the acquisition force within 
the Air Force and within the Department was cut back too far, 
and I know that you are increasing the number of people who are 
involved in acquisition. But when you look at all of the 
programs that are having difficulty and the Nunn-McCurdy 
breaches and the escalation in cost that represents, we really 
have to do this; and we have to get this fixed as soon as 
possible. Can you give us a sense of what you are trying to do?
    I know you are trying to bring back--increase the personnel 
so you can have more people to handle these programs, but give 
us a sense of what you are trying to do.
    Mr. Donley. Well, the acquisition improvement program that 
the Chief and I put in place just several months after we 
arrived has several components to it, but I won't go into all 
of the details.
    But the most important element is rebuilding the workforce. 
We were able to add over 700 personnel to our acquisition 
workforce last year. We are on track I believe for over 900 
[additional] this year. The focus is on bringing back specific 
expertise--contracting, cost estimating, and systems 
engineering capabilities that support the acquisition process--
and making sure that we have them appropriately deployed across 
our product centers and program offices.
    In the last year, we have added nine new program executive 
officers. It puts us at a level roughly comparable to the Army 
and Navy in terms of numbers of Program Executive Officers 
(PEOs). But this will help spread the work across a larger 
number of executives so that they do not have such a broad span 
of control. They will be able to focus on the programs for 
which they are responsible and provide improved oversight.
    Mr. Dicks. General, do you have any comment on this?
    General Schwartz. I would just speak to the thing for which 
I am responsible, which is the requirements. We have elevated 
the level at which requirements are validated and, to be sure, 
we have elevated the level at which changes to requirements are 
approved. And there will be much greater discipline applied in 
that respect, sir.
    Mr. Dicks. Mr. Tiahrt.
    Mr. Tiahrt. Thank you, Mr. Chairman.
    In the tanker program, you are going to go through the 
current schedule; you will get a bid. Do you plan on 
restructuring the contract itself? Will there be incentives put 
in place for underruns or anything different than what you plan 
to do under your current RFP?
    Mr. Donley. We do plan to incentive performance both with 
respect to delivery and with respect to fuel burn and 
performance as well. So it is still anticipated to be a firm 
fixed price at the very front end and then fixed price and 
incentive thereafter.
    Mr. Tiahrt. Have you looked at production rates? I mean, 
the optimum rate is not 12 to 15. Have you looked at 25 to 30 
as far as a delivery rate per year?
    Mr. Donley. The RFP is structured to request cost and 
pricing data on a roughly 15 airplanes per year schedule. Our 
challenge with alternative approaches, which would add 
airplanes, is that we would have to budget for increased levels 
of acquisition.
    The good part of that would be that we would get the tanker 
fleet recapitalized faster, but we would have to spend twice as 
much money every year to do it. So instead of spending in the 
neighborhood of $3\1/2\ billion per year, we would be spending 
closer to $7 billion a year on tankers; and that is a lot of 
money. So we have to balance the tanker acquisition with other 
pressing needs and other mission areas as well.
    Mr. Tiahrt. My only concern is that one Air Force officer 
told me--just to put it in perspective--that the mother of the 
last pilot of a KC-X hasn't been born yet. The only way we 
change that is if we start procuring them on a more optimum 
rate. So perhaps some study will be done so we can see what 
kind of cost savings. Maybe it is not double the amount. Maybe 
it is some reduction because of the improvement curve.
    Mr. Donley. Certainly at some point in the future one might 
consider a multiyear procurement opportunity. That is still out 
in the future to be worked at some point. But bumping up 
procurements at the levels that you are describing requires a 
lot more budget dollars than we currently have available.

                   MC-12 AND LIGHT MOBILITY AIRCRAFT

    Mr. Tiahrt. There are two programs I want to just briefly 
touch on, the MC-12 and the light mobility aircraft. The MC-12, 
Air Force purchased five in fiscal year 2010. My understanding 
is that the in fleet will be about 25 aircraft.
    General Schwartz. Sir, actually 37 total aircraft.
    Mr. Tiahrt. Thirty-seven. But there is no request for any 
aircraft in 2011. Have I got that right?
    General Schwartz. Sir, we will complete the purchase and 
the modification of all of the platforms this year.
    Mr. Tiahrt. All 37.
    General Schwartz. All 37.
    Mr. Donley. The last airplanes, sir, as I understand it, 
are an additional five in the fiscal year 2010 Overseas 
Contingency Operations (OCO) supplemental.
    Mr. Tiahrt. And in the light mobility, I think that is a 
60-aircraft fleet. And you have requested 15 in the budget, but 
there is no RFP issued yet. Is there an RFP date for the light-
mobility aircraft?
    General Schwartz. Sir, that RFP should be issued later this 
calendar year. And it is not a 60-airplane fleet. It is a 15-
airplane fleet.
    Mr. Tiahrt. Maybe I had those turned around. I apologize.
    General Schwartz. No. But the key thing is that both for 
light lift and light strike, those will be 15 aircraft fleets 
whose primary focus will be not to perform missions for the 
United States Air Force or the American Armed Forces but, 
rather, to enable our partners to build partner capacity. And 
that will be true with a platform that is something that can be 
readily assimilated by most of the air forces on the planet. I 
just would comment, sir, that not every air force can afford C-
17s.
    Mr. Tiahrt. Thank you.
    Mr. Dicks. Mr. Visclosky. I am going to run up and vote and 
come right back. But I am going to turn it over to Mr. 
Visclosky.
    Mr. Visclosky. Thank you, Mr. Chairman.
    Mr. Secretary, I may have done this in the past, but I want 
to congratulate you on your stellar education at USC as a Notre 
Dame grad. My son finally got through USC about a year ago. So 
I want to congratulate you on that.
    Mr. Donley. Congratulations. I understand that would mean 
you got a pay raise in that deal.
    Mr. Visclosky. Yes, sir.

                            ALTERNATE ENGINE

    Mr. Secretary, on the alternative engine, the Department 
has gone back to the committee with an analysis; and, from our 
perspective, it would appear to be almost a wash with some of 
the numbers used by the Department having no backup 
justification. If it is from your numbers a wash, what would be 
the continued resistance in not making sure you had a 
competitive basis here?
    Mr. Donley. Well, I think, as the Deputy Secretary's 
communication indicated, this has been closely studied; and it 
was in some respects a difficult call in the Department. We 
have looked at this issue for several years from several 
different angles; and, in summarizing that, it is the 
Department's judgment that there is still work to be done on 
the alternative engine, that the costs that need to be made in 
the near term cannot yet be seen to be recouped later. The 
near-term costs are pretty clear. The long-term savings are 
just not clear enough to warrant the investment in the second 
engine.
    I think another factor this year is the challenge that we 
are going through in restructuring the F-35 program itself, the 
underlying program and the fact that this would add additional 
costs on top of an already large and, to some extent, strained 
program. So that is where the Department came down on that 
subject.
    Mr. Visclosky. I have to vote. I would yield my time back, 
but if I could return to this issue.

                            C-5 RETIREMENTS

    Mr. Dicks. Yes, of course. As soon as you come back.
    Let us talk about C-5 retirements. Where do we stand on 
that? I know it is something that the Air Force has wanted to 
do. I am strongly in support of what you are attempting to do. 
Give us the status on this.
    General Schwartz. Mr. Chairman, we propose in 2011 to 
retire 17 C-5A aircraft; and we have certain statutory 
requirements to complete before we can activate that 
requirement process, including, among other things, to give you 
the report on the C-5 re-engining program operational test and 
evaluation (OT&E). That OT&E report is complete, and it will be 
submitted to our Office of the Secretary of Defense hires, and 
they will return that report to you sometime late summer or 
shortly after that.
    The key thing, sir, is that the mobility requirement and 
capability study has recently been delivered to the respective 
defense committees. It reflects that we have somewhat more 
capacity than we actually must have, and we find ourselves in 
the situation where we cannot have too much management reserve. 
That is the case now with 223 C-17s, ultimately, and the 111 C-
5s that are currently in the inventory. The mobility study, 
sir, has indicated that we need about 32.7 million ton miles of 
capacity.
    Mr. Dicks. 32.7 ton miles?
    General Schwartz. Million ton miles. That equates to the 
low 300s of large transport aircraft, rather than the 320 plus 
where we currently are, sir.
    Mr. Dicks. I will just tell you--and you know this better 
than I do. But you get over to Ramstein and you see all of 
those planes and you realize that, since 2001, all of those air 
lifters have been moving back and forth around the world. 
Anything about the logistics effort just to get everything into 
Afghanistan and get everything out of Iraq, I mean, it is 
extremely impressive.
    But I think up here we worry--and this mobility study 
should be enlightening for us to take a look at, and I haven't 
had a chance to take a look at it. But I think there has been 
some opposition up here I know on the retirement issue. But for 
money to buy new things and to operate the Air Force, I think 
we have to do this.
    I am going to return to Mr. Visclosky.
    General Schwartz. Mr. Chairman, if I might just say, it is 
not just the money, though. The coin of the realm is actually 
becoming manpower.
    Mr. Dicks. Personnel.
    General Schwartz. Absolutely.
    Mr. Dicks. Why don't you finish? I will go vote, and then 
we will go onto Ms. Granger.

                            ALTERNATE ENGINE

    Mr. Visclosky [presiding]. Chairman, thank you very much.
    Secretary, if I could return. You had mentioned a shorter-
term up front cost but without a clear idea of what the longer 
term savings might be. Can you quantify that as far as the 
additional investment in the short term?
    Mr. Donley. I believe the Department's analysis which was 
provided to the committee indicated there was probably about a 
$2.6 additional billion required in investment in the 
alternative engine ahead of us and that that had to be factored 
in to the total cost of potentially moving forward, and that is 
somewhat different than some of the analysis that the 
committees had looked at. That was performed by the Cost 
Assessment Program Evaluation (CAPE) office in the Office of 
the Secretary of Defense (OSD), and I think that is reflected 
in the study that has been provided to the committee.
    And, again, there is an indication, at least for some of 
the assumptions made, that there wasn't justification that was 
cited. I assume our staff could follow up with the Department 
and get those justifications.
    Mr. Donley. I believe the summary report provided by the 
Department was about three or four pages, and there were 
attachments behind it. What is available--I would be happy to 
follow up with the staff in terms of any additional info that 
would be necessary.
    General Schwartz. Sir, may I just offer a little--again, 
perhaps an operator's perspective here. There are three things 
with regard to alternate engine that concern me.
    There is a good argument that competitive pressure is a 
valuable thing. It is a valid argument in my view. The question 
is affordability. And the reality for me is, if more engines 
means less airplanes, that is not a good trade for the United 
States Air Force. Point one.
    Point two is that the reality is that the alternate engine 
will only be for the United States Air Force. The Navy is not 
going to have two engines aboard ship. Our international 
partners are not going to have two engines. So the reality is 
that if we have an alternate engine and there is a mandate for 
that, that obligation will ride primarily on the Air Force.
    Finally, we are not in 1980 any longer where high 
performance engines had suspect reliability. At the moment, 
there are at least two very successful fighter programs that 
operate on a single engine. The F-22 and the F/A-18-E/F are a 
case in point.
    And so, given those three considerations, I think we need 
to take a balanced view. That is my best advice, sir.
    Mr. Visclosky. General, following up on the proposition 
that you would end up being unable to secure as many aircraft, 
is that quantified in the justifications that were submitted to 
the committee as to how much of a shortfall you would have as 
far as aircraft from your perspective?
    General Schwartz. This is the basic argument, that if you 
have a fixed program top-lined for the F-35 and you fund the 
alternate engine out of that top line, it has the inescapable 
effect of reducing aircraft procurement.
    Mr. Visclosky. Have you quantified that in terms of number 
of aircraft?
    General Schwartz. I have not, sir.
    Mr. Visclosky. Sir, I am an accounting major. Could I do 
that myself from the report?
    Mr. Donley. I think the staff would have enough data to 
help you work through that calculation.
    But, sir, I would reemphasize the comment the Chief just 
made. Our challenge with this program has been--one of the 
challenges is that the second engine dollars continue to be 
directed into the program, have to be absorbed by the program, 
and that is a significant concern as we are trying to add money 
to development to support getting back on track with the test 
program, et cetera. So this program is costing us more going 
forward, and we need to be careful and cautious and very 
deliberate about what other capabilities and requirements we 
put on the program going forward.
    Mr. Visclosky. And, General, if I could get back--you 
mentioned reliability, but I didn't hear in that the question 
about the possible reliability of the engine. It was that you 
have at least two other aircraft with a single engine and that 
has proved reliable.
    General Schwartz. Sir, my point was that we have had 20-
plus years of development since the days of the so-called 
engine wars; and engine technology and manufacturing and what 
have you has progressed during that period. So the reliability 
of the engines is improved to the extent that at least in two 
of our frontline fighters we have chosen collectively to not 
have an alternate engine.
    Mr. Visclosky. General, the last point I would make and 
then just make a brief statement here is I appreciate also the 
observation that the Navy has no plans to do a second engine 
and that our international partners would not either. My 
supposition would be that one of the items in their mind is 
that there isn't a second engine, that there is no alternative 
engine permanently fixed in the Air Force's program, so there 
is no reason to plan for a second engine.
    General Schwartz. My point was, though, sir, that it would 
be one or the other. You will not find both engines in the 
inventory of those folks that we mentioned.
    Mr. Visclosky. Secretary and General, I appreciate your 
comments. I just must tell you generically--and it holds true 
for a range of problems. We have had shipbuilding hearings and 
others--I am very concerned that if we don't have competition 
in some of these programs, you have a hedge against risks in 
the future. I think just competition for all of us, as hard as 
all of us in this room do work, it gives you an extra edge.
    And I am very concerned about our manufacturing base, that 
if we end up having that single supplier--and I understand, 
also, there is only going to be X number of engines--is why do 
we only have six shipyards of significance in this country 
today that are building warships, is to make sure we don't lose 
that capacity. And I am very concerned about it here on the 
propulsion side.
    Thank you very much, Mr. Chairman.
    Mr. Dicks [presiding]. Ms. Granger.

                          JOINT STRIKE FIGHTER

    Ms. Granger. Thank you both for being here.
    Secretary Donley, in January, Secretary Gates announcedthe 
restructuring of the Joint Strike Fighter program. He stated there were 
no insurmountable problems, technical or otherwise, but is it your 
assessment that the measures taken so far are sufficient to guarantee 
success?
    I would ask both of you gentlemen the same thing.
    Mr. Donley. My judgment on this is yes, firmly. This has 
been a two-year process, and I think the committee is aware 
because you work so closely with this program. But F-35 has 
gotten close scrutiny for the last two years. We had an 
independent estimate delivered at the end of 2008 which 
indicated that there were challenges with the program, but we 
weren't sure how serious they were. We weren't sure how quickly 
the contractor might recover from those challenges. But, 
nonetheless, Secretary Gates added dollars to the fiscal year 
2010 budget for system development.
    But we also set in motion a second series of independent 
estimates which delivered at the end of calendar year 2009, 
just at the end of last year; and they confirmed the results of 
the first estimate, that the program indeed was behind.
    So after these two years of close assessment, the Secretary 
settled on the independent estimates going forward, which 
needed to recognize a slip in the development program, which we 
have done. So we have taken all of the measures that you would 
expect us to take, having reached that conclusion. We have 
added dollars for development. We have also lowered the ramp on 
production by 122 airplanes across the Future Years Defense 
Program (FYDP).
    That doesn't mean we are stopping production. In fact, the 
Air Force is requesting 22 aircraft in our budget for 
procurement this year for the F-35. We have also taken some 
early production aircraft and moved them over to support a 
stronger test program.
    The essence of this is the production is slightly behind, 
and that has put the test program behind, and that is really 
what we want to get through. We want to get through 
developmental tests. We want to get through operational tests 
and wring out any potential issues we have with this airplane 
before we go to full rate production.
    So I think the Department actually has done an excellent 
job in the last six or seven months, especially in getting its 
arms around this program, and that our visibility and 
management oversight of this program is now stronger than it 
has ever been.
    Ms. Granger. Thank you.
    General Schwartz. Ma'am, my take is that we are now in a 
position that we have less optimism and more realism, and that 
is a good thing.
    Ms. Granger. I will take that as positive.
    General Schwartz. It is.
    Ms. Granger. General Schwartz, your long-range plan calls 
for you to replace older aircraft with the Joint Strike 
Fighter, the F-15s, the F-16s, A-10s, because of the unique 
capabilities of the Joint Strike Fighter. Would you comment on 
what is unique about that?
    General Schwartz. There are several aspects of this.
    Clearly, it is a generation five fighter and what that 
implies is it does have low observable qualities which enable 
it to operate in defended air space with much less likelihood 
of having a successful intercept by either airborne threats or 
surface-to-air threats.
    But probably as important is that these machines will have 
sensor integration to the degree that we have only seen in a 
generation somewhat earlier in the F-22; and it is this 
capacity to integrate sensors with the low observable 
capability, in addition to having a highly maneuverable 
platform and one that, again, can succeed both in air-to-air 
and in air-to-ground role, that makes the F-35 the right 
platform on which we should base our future tactical aviation 
fleet.
    Ms. Granger. Thank you.
    I have one last question about the Joint Strike Fighter. As 
you know, I have the NAS JRB Fort Worth in my district; and I 
know that Fort Worth didn't make the short list for the Joint 
Strike Fighters operational bases in October. Can you tell me 
what the considerations will be in choosing the maintenance 
centers of excellence for the Joint Strike Fighter?
    I know that Fort Worth's location with Lockheed Martin 
being located there should be a strong contender. Can you tell 
me what considerations will be made?
    General Schwartz. I think the primary consideration will be 
the expertise. This is both human capital consideration and 
prior experience with low observable maintenance and what have 
you, and at least one of our depots currently has very 
substantial experience in that respect with the F-22.
    So I think the key thing in terms of sustaining the 
platform will be the workforce considerations, as well as the 
capacity of the depot to have the right kind of approach and 
philosophy. Because low-observable maintenance is not plug and 
chug as it is on traditional aircraft. It is a different 
formula and requires different skills and a different 
management strategy. And so I think it will depend both on 
people and the level of experience that the various candidates 
have.
    Ms. Granger. Thank you very much.
    Mr. Dicks. I may have missed this while I was out of the 
room, but I want to go back to ask this question and have you 
answer it. What are the risks of procuring over 250 aircraft, 
Joint Strike Fighters, or 14 percent of the total requirement 
in the low rate initial program?
    General Schwartz. Mr. Chairman, I think the risk is that 
you discover something in tests that is very significant and 
requires adjustments to the machines that are already produced. 
That is one of the things that the jet analyses, both one and 
two, I think have helped to smooth out.
    There is much less concurrency in this program than there 
was. It doesn't mean there is zero. If there was zero 
concurrency, it would be a 15- or 20-year development; and that 
simply is unacceptable as well. But as the Secretary suggested, 
we have reduced the production ramp and we have invested in 
accelerated development and operations tests so that we think 
that the risks are much, much better balanced than they were 
previously.
    Mr. Dicks. Mr. Rogers.
    Mr. Rogers. Thank you, Mr. Chairman.
    Mr. Dicks. Thank you.

                            NUCLEAR SECURITY

    Mr. Rogers. Last year, I asked you about the two incidents 
involving nuclear security; and we made some changes in the 
appropriations. What can you tell us today about the 
accountability actions that you have taken and if the fiscal 
year 2011 budget adequately addresses nuclear security?
    Mr. Donley. Sir, we continue to work this issue. It remains 
a very high priority for us; and, as I indicated in my opening 
remarks, I think it is going to require determination and 
patience going forward.
    In the last roughly 1 year to 15 months or so we have had, 
I think, a total of about 33 inspections. Twelve of those have 
involved unsatisfactory outcomes that required retesting. That 
retesting has been accomplished on seven units, and I think we 
still have a handful, four or five, remaining to be done.
    But this is a continuous process, and both the Chief and I 
are very committed to this work going forward. We are not going 
to back off on the inspection process. We need to stay with it 
going forward.
    Our Airmen are doing a tremendous job out there. But being 
certified for nuclear operations and being inspected for 
nuclear operations is not a once-in-5-year or 10-year process. 
It is a continuous effort to make sure that we are maintaining 
the highest standards we can, 365 days a year.
    Mr. Dicks. Would you yield just for a second on that?
    Mr. Rogers. Yes.
    Mr. Dicks. I assume, though it wasn't said, that this does 
involve a lot of training of your people. Is that accurate? Are 
we training these people? Giving them the understanding of what 
they have to do to succeed in this area?
    Mr. Donley. I believe we are, Mr. Chairman.
    General Schwartz. Absolutely. And I would say as well, just 
to amplify, that this is tough business. It is an unforgiving 
business.
    And so, sir, you asked about accountability. I don't like 
counting scalps. That is not what this is about. But we have 
taken action on seven officers over this period. But that is 
not the measure of success, in my view. The measure of success 
is assuring that our folks are well led, they are well trained, 
as the Chairman indicated, and they execute. That is the name 
of the game.
    Mr. Dicks. Mr. Rogers.
    Mr. Rogers. Well, is it correct to say that over the last 
year you have had 33 nuclear security inspections and eight of 
them unsatisfactory? Can you tell us more about that?
    General Schwartz. Sir, they ranged from a variety of 
things. For example, one persistent problem has to do with the 
personnel reliability program. That is the medical 
certification for our airmen to perform nuclear tasks. It is a 
paperwork-intensive process, and any glitch in the paperwork or 
the channels of communications is a bust. There is no middle 
ground. And, of course, in the technical operations, that is 
dealing with either maintenance or loading of weapons and so 
on, the demands are very stringent; and a deviation is a bust.
    So we have had both of those kinds of things occur. And the 
bottom line is that our inspections now are very demanding. 
They are invasive, and they do things like 100 percent 
sampling, which was not the case in the past. And so we are 
uncovering things that we overlooked before. And I don't 
apologize for turning over rocks. That is what we have to do.
    Mr. Rogers. So you established the Nuclear Weapons Center?
    General Schwartz. We did.
    Mr. Rogers. How is that working out?
    General Schwartz. I think very well.
    The basic philosophy behind this, sir, was that we had 
sustainment in the nuclear business distributed amongst three 
major commands and other activities. The same thing was true on 
the operations side. And the basic idea here was that the 
Secretary needed to have an accountable officer on the 
operations side and on the sustainment side who was personally 
vested in the performance of the enterprise, and that is now 
the case. Lieutenant General Frank Klotz is the operational 
person, and Brigadier General Ev Thomas is the accountable 
party on the sustainment side. They are carrying a significant 
load, sir.
    Mr. Rogers. Does your fiscal year 2011 budget adequately 
address nuclear security, do you think?
    General Schwartz. From the Air Force point of view, itdoes, 
sir. I would only indicate--and this is not so much in our lane, but it 
is in the broader appropriations lane--is that there are needs there 
that really are even outside the Department of Defense (DOD) realm, 
that are in the Department of Energy realm. And it is important, if I 
may recommend, for this committee to watch what happens with regard to 
the nuclear infrastructure that DOE is responsible for and those 
programs for maintaining the weapons in a safe, reliable state. That 
that, too, is adequately funded.
    Mr. Rogers. Briefly describe the interaction between DOE 
and the Air Force in this respect.
    General Schwartz. Sir, DOE fundamentally is responsible for 
the weapons, the weapon, the explosive package, if you will. We 
are responsible for the delivery systems. And that is the 
division of labor. There is some overlap there, and you have 
interfaces and so on. And, obviously, there is close 
collaboration. We have a brigadier general whose full-time job 
is to work these matters over at DOE headquarters, just an 
indication of the significance of this interaction. But to do 
this all properly requires not only resourcing the DOD side of 
this properly but, likewise, the DOE side.
    Mr. Rogers. What should we look for on DOE?
    General Schwartz. I think questions about sustaining their 
infrastructure and whether the programs related to DOD 
weapons--for us, the B61 air delivery weapon--is properly 
funded. And this has to do with renovations. It is not a new 
thing. This has to do with replacing time-limited components 
that age out.
    Mr. Donley. These are life extension programs for nuclear 
weapons.
    Mr. Rogers. Mr. Secretary, are you satisfied with the 
security now?
    Mr. Donley. I am. We always look for ways to do things 
better, and we work with the Defense Threat Reduction Agency in 
this regard. They also oversee our inspections, and they 
perform the Research and Development (R&D) for the Department 
of Defense that helps identify areas where both the Air Force 
and the Navy can improve security. But the long-term safety and 
reliability of the weapons is critical as we look toward a 
potential start follow-on agreement and we have to make longer 
term choices about what we are going to do with our ICBM force, 
with our bomber forces, and the weapons that go with them. So 
this close collaboration between the Department of Defense and 
the Department of Energy on future choices going forward and 
sustaining capabilities out for another decade and the decade 
beyond is critical work for our Nation right now.
    Mr. Visclosky. Mr. Rogers, if you would yield. I appreciate 
your line of questioning; and, gentlemen, I appreciate your 
responses.
    As most people probably understand, Mr. Frelinghuysen is 
ranking on the Energy Subcommittee and I chair it, and I do 
appreciate the active engagement of the Air Force and others at 
DOD. Because for too long, from my perspective, what has 
happened is it has been too easy in the past for DOD to simply 
say, here is what we need, because the cost is not attributable 
to them.
    Part of the problem we have on Energy is the inability of 
that Department to manage major construction projects; and what 
we have been, in a bipartisan fashion, pressing on is make sure 
we understand what that strategy is and appreciate you doing 
the review. What do you need with that strategy? That is, 
again, looking at the long term and now let's define the 
infrastructure before we start building something again when we 
can't manage the contract. So I appreciate your line of 
questioning.
    Mr. Rogers. Thank you, Mr. Chairman.
    Mr. Dicks. Mr. Boyd.
    Mr. Boyd. Thank you, Mr. Chairman. Mr. Chairman, you look 
good and comfortable in that chair.
    Mr. Dicks. Thank you very much.

                            STRATEGIC BASING

    Mr. Boyd. Secretary Donley, General Schwartz, great to see 
both of you. Thank you for your service and especially for your 
kindness to the people down in my area of the world and the 
trips you have made down there to try to understand a little 
bit better about who they are and what they do. They all 
certainly appreciate you, as their bosses, coming down there to 
visit them.
    General Schwartz, in your testimony--or I guess this is a 
combined testimony, is what it says on the front--you talk 
about strategic basing and the strategic basing process to 
ensure basing decisions are made in a manner to support new 
weapon systems acquisition and delivery schedules as well as 
organization activation milestones. Can you talk to me a little 
bit about that or the committee a little bit about who makes up 
that group? Do you provide oversight and guidance to the group? 
And who makes the final basic decisions?
    Mr. Donley. The Strategic Basing Executive Group is made up 
of several offices in our Air Force headquarters. Our 
installations and environment offices lead that, but it 
includes the A3/5, the operations folks, the programming staff, 
logistics, and other folks on the headquarters staff.
    This process was initiated after the Chief and I came in. 
The previous process in the Air Force was much more 
decentralized. It was run by our major commands who tended to 
look at potential bed-downs and basing decisions just within 
the framework of the bases under their responsibility, and we 
felt like we needed a much broader approach. We needed an Air 
Force-wide perspective on basing decisions.
    We also needed to bring to bear the expertise of 
theheadquarters and some aspects of our work--environmental work just, 
for example--where we have a broad perspective of issues across the Air 
Force that perhaps a major command doesn't have. So we set in motion a 
process at the headquarters to deliberately review our basing decisions 
and get the full corporate attention of the Air Force on those 
decisions.
    The Chief and I do oversee that process. We are briefed 
periodically, actually, every few weeks. We have a very busy 
year, with a calendar of issues that we are addressing.
    Mr. Boyd. So you folks provide the oversight and guidance, 
and then final basing decisions is made by you guys?
    Mr. Donley. We do.
    Mr. Boyd. I noticed in your testimony that you alluded to 
the F-35, using that procedure on the F-35. Now, the CAF 
realignment that we are going through, do you intend to also 
use it with the F-22 basing decisions?
    General Schwartz. Yes, we will. But the F-22 is a somewhat 
different situation than is a new start program like the F-35. 
I mean, we have delivered 165 or so airplanes, and we have 25 
or so left to go, and so this is a more mature program.
    So there are other factors I think that bear on F-22 that 
overlay the question of basing which you would have with a new 
program, specifically fleet management, and that at one time 
the Air Force had in mind 700 or 381 or even 243. We end up 
with 187, and that is a different animal than a larger fleet. 
So we will have to make choices on basing for the remaining 
aircraft and perhaps those that are already bed-down. Our best 
judgment of how to manage that now smaller fleet which will be 
187 aircraft.
    Mr. Boyd. But it is your intent to use that basing 
procedure.
    Mr. Chairman, I will save my other questions for the next 
round.
    Mr. Dicks. Thank you.
    Mr. Kingston.

                                 JSTARS

    Mr. Kingston. Thank you, Mr. Chairman.
    Secretary Donley, I wanted to ask a little bit about the 
Joint-STARS system, and what I will do is kind of ask a couple 
of questions and then let you take it from there.
    But I know that the Air Force was studying fleet viability, 
and I was wondering what the status of that was. And then I 
understand two of the airplanes are grounded, and I was 
wondering what their status was. And I also wondered what other 
platforms might be a viable option, such as the Navy's.
    And then, in terms of the engines, as you know, we have 
appropriated lots of money, $730 million, for reengineering on 
18 aircraft. But I understand now that number is up to $1.6 
billion and not exactly sure what the status of that is and 
where we are heading with that.
    So tell me about the program.
    Mr. Donley. Right. I appreciate this opportunity, Mr. 
Kingston.
    The Joint Surveillance and Target Attack Radar System 
(JSTARS), first of all, is providing great capability in the 
current war fight. It provides ground moving target radar 
coverage, which is very valuable to operations in Afghanistan 
and Iraq as well. So this is an important capability going 
forward.
    We faced three issues that were not necessarily connected, 
and this was the challenge that the Chief and I faced.
    The Department had set in motion several years ago a re-
engining program for the JSTARS aircraft. These are Boeing 707 
airframes bought used by the United States Air Force almost 20 
years ago. So they have a lot of service time on them already. 
In some cases, their provenance, where they came from and 
exactly their condition when we took possession of them, is not 
quite understood in all the detail that we would like. But, 
suffice to say, these are old airframes. So a re-engining 
program had been explored, and the Department was on a path to 
re-engine these airplanes.
    At the same time, however, there are new radars being 
developed on new platforms with a range of other capabilities 
that also do ground moving targets and also dismounted targets, 
which are of high interest in the current war fight. So the 
future radar systems available to the Department are actually a 
broad range of alternatives out there that we had yet to decide 
upon in terms of which radars we would use.
    The third issue we had in front of us was the long-term 
viability of that 707 platform.
    So the Chief and I have endeavored to slow the re-engining 
process down until we decide what the future of the radar 
capability is going to be and, as we decide that, also 
understand the future life span of these aircraft, and how much 
money are we going to put into these old 707 airframes. So we 
have an analysis of alternatives under way to assess the ground 
moving target indicator requirements, and the future radars 
that we would need, and the alternative platforms on which 
those radars might be housed. That work won't deliver until 
next year, but, in the meantime, we should get some updates to 
inform our way forward.
    Also, in the near term, we received direction from the 
Department of Defense to proceed with the re-engining, two ship 
sets originally and then two more on top, for a total of four 
ship sets of engines, new engines to re-engine airplanes. So we 
are in the process of supporting that direction as well. But it 
is sort of four ship sets on hold is sort of where we are today 
on that program. But we still have workto do to finish the 
development of the re-engining. But we have dollars to do that.
    And in the meantime, again, we are putting dollars into 
sustaining the Joint STARS going forward because it is such an 
important capability for us now.
    I apologize for that long answer, but that is the broad 
overview.
    Mr. Kingston. Well, there are actually more questions on 
it, but I know time doesn't allow. Do I have time, Mr. 
Chairman?
    Mr. Dicks. You can ask another question, certainly.

                     HH-60 COMBAT SEARCH AND RESCUE

    Mr. Kingston. On the combat search and rescue helicopter 
program, I understand that the HH-60G helicopters--we are 
cutting back on that search and rescue; and I wonder, how do 
you address that?
    General Schwartz. Sir, you are quite right that the fleet 
of now 100 available helicopters, 96 to be exact, are quite in 
demand. And just to give you a sense of that, in 2009, we had 
over 700 saves in Iraq and Afghanistan with our airplanes. And, 
by the way, there are 16 aircraft that are deployed at the 
moment. There are 6 in Iraq and 10 in Afghanistan. And they, as 
I said, over 700 saves.
    These are not sort of the traditional combat search and 
rescue kinds of things. These are picking up Soldiers and 
Marines and other Airmen outside the wire or coalition partners 
to ensure that that golden hour after they are wounded is kept 
sacrosanct as the Secretary of Defense has mandated.
    What happened was we were pursuing a platform, the Combat 
Search and Rescue (CSAR), which, as you are aware, the 
Secretary cancelled last year. And so what we have agreement on 
is to recapitalize those HH-60 aircraft not with a new start 
but essentially with an off-the-shelf kind of capability. We 
think we can get an airplane that is in production in a 
competitive fashion that will allow us to recap the CSAR fleet 
in an affordable manner.
    Mr. Kingston. We are looking at buying two more 
helicopters, is that correct?
    General Schwartz. Sir, there is actually six in this 
budget. There is three in the base and three in the Overseas 
Contingency Overseas request (OCO) for combat losses.
    Mr. Kingston. That is enough, even with the surge?
    General Schwartz. Sir, we need to recap to the 112 aircraft 
program of record.
    Mr. Kingston. Thank you, Mr. Chairman.
    Mr. Dicks. Mr. Moran.
    Mr. Moran. Thanks very much, Mr. Chairman.
    I appreciate the fact that while all of the hullabaloo is 
going on in other parts of the Capitol you are here visiting 
us.
    Mr. Dicks. It is a better place to be.

                            CONTRACTING OUT

    Mr. Moran. This subcommittee has asked all of the services 
to provide us with an estimate of how much of their 
responsibilities were contracted out, and the Army replied 
fairly completely. We had the worst problem with the Air Force. 
As I understand it, we got only an estimate of contracted 
services.
    Now we see in your budget that you plan to do some major 
hiring. There is an increase of $1.6 billion for civilian 
compensation related to insourcing, but there is only a billion 
dollars left for contractor services. You might address that, 
and I hope briefly, because I have got a couple of other 
questions as well.
    Go ahead, general or Mr. Secretary, either way.
    General Schwartz. Sir, it is important to understand that 
the insourcing is not completely done with respect to the 
contract services. For example, there is some 1,300 spaces 
associated with joint basing where we absorb civilian workforce 
from other services which increased our population. So it isn't 
exclusively related to contract services.
    Mr. Moran. But how do you estimate how many contractors you 
have?
    Mr. Donley. This is a challenge in the sense that in some 
cases we do have good visibility into how many contractors are 
working for us on a contract. Sometimes that is just a fixed 
amount of dollars that we are putting against the work, and the 
number of contractors can fluctuate over time depending on the 
level of services that we are demanding from the contractor.
    But I will follow up, Mr. Moran, because there is 
something----
    Mr. Dicks. Will the gentleman yield? Just on that point, it 
would be one thing if we could find out how many companies, but 
you are saying contractor. You are talking about every single 
individual, is that what you just said?
    Mr. Donley. Sir, I am not familiar with the details of the 
committee's request and how it was phrased. So if there is 
something that we owe you there, we will follow up to get after 
it.
    [The information follows:]

    The Air Force submitted our Fiscal Year 2008 service contract 
inventory to the Office of the Secretary of Defense (DPAP) on July 1, 
2009, and they forwarded the inclusive inventory lists for the Army, 
Navy, and Air Force to the House and Senate pursuant to section 2330a 
Title 10 United States Code on August 4, 2009.
    We provided approximately $21 billion worth of service contracts in 
this inventory. This amount was not an estimate, but rather a figure 
pulled from our official contracting system, the Federal Procurement 
Data System--Next Generation system. We estimated 141,000 contractor 
full-time equivalents (FTE) for the $21 billion inventory on standard 
factor-per-FTE applied across the total obligated amount or on 
estimates provided by Government personnel closely associated with the 
contract.
    We excluded $14 billion in the Product and Service Codes (PSC) for 
research, development, test and evaluation and military construction, 
consistent with the definition of contract services found in the Fiscal 
Year 2008 National Defense Authorization Act, Section 806. We also 
excluded approximately $3 billion in the PSCs for lease or rental of 
equipment and facilities and other special services where there is not 
an FTE or person closely associated with this action. Using the same 
standard factor-per-FTE methodology described above on these contracts 
yielded another approximately 75,000 of estimated contractor FTEs. All 
together, our final estimate is that we had approximately 216,000 
contractor FTEs on our estimated $38 billion worth of service contracts 
for Fiscal Year 2008.

    Mr. Dicks. Mr. Moran.

                              EOP TRAINING

    Mr. Moran. The authorization, the 2008 NDAA required all 
services, including the Air Force, to provide contractor 
inventory; and the Air Force has not done that. So that would 
be the best to follow up.
    The movie Hurt Locker just got an Oscar. I kind of was 
rooting--I thought Avatar was a little better. But, anyway, 
there is some relevance here to the Air Force. Because, as you 
know, we have an explosive ordnance disposal school; and it 
functions very well. And in fact there is only a 16 percent 
failure rate for the Marine Corps, 21 percent for the Navy, but 
a 47 percent failure rate for the Air Force. There is something 
wrong there. Almost all of it is for academic reasons. It must 
be that you are not submitting the quality of personnel to that 
school that the other services are, and that must account for 
the failure rate of almost 50 percent.
    Do you want to address that, General?
    General Schwartz. Congressman Moran, I would only offer 
this as sort of background.
    The Marines, for their Explosive Ordnance Disposal (EOD), 
their entry level is at the E-5 level. So more mature, they are 
proven, at least one tour, probably more in the Marine Corps, 
and so on. We do have some entry level folks go into the EOD 
field.
    Secondly, with respect to the Navy, they start their EOD 
training after they complete dive training, so they have a 
filter in front of the EOD training that--I don't know what the 
exact numbers would be, but it indicates to me that it is not 
quite apples and apples between us, the Marine Corps, and the 
Navy.
    Nonetheless, your point is that we need to scrutinize the 
skills and the potential of the folks we send to the EOD 
school, and we agree with that, and we are working that issue 
to make sure that of course they are volunteers, and they have 
an interest in this very demanding and risky discipline, but 
they need to have the academic skills in order to get there.
    Mr. Moran. Sure. Let me just ask one last question to 
conclude.
    The Air Force chose not to play an integral role in the so-
called war on extremism that the other services did. In fact, 
such missions were termed in lieu of traditional missions. Now, 
just recently you now referred to them as joint expeditionary 
tasking.
    But I think it would be useful to cite briefly and then for 
the record the scope of the Air Force's role in this battle 
against extremism. Because those are the wars that are going 
on, not any cold war or a traditional role. But it would be 
useful to know how many airmen are currently deployed in the 
Central Command area of responsibility; of that, how many are 
actually serving on the joint expeditionary tasking missions.
    General Schwartz. Sir, we have got 30,000 in the United 
States Central Command area of responsibility. And depending on 
the time of taking the inventory, it is at 4,700 and growing 
and will be at 5,300 when the surge is complete in Afghanistan.
    By the way, when we changed the name from in lieu of to 
joint expeditionary tasking, that was very deliberate, sir. The 
point was this was--if you ask the kids whether they thought 
what they were doing was worthy, of course they do. They didn't 
think what they were doing was in lieu of anything. So we 
changed the name deliberately. And we are all in, is the short 
answer.
    Mr. Moran. That is what I want to hear.
    Thank you, General. Thank you, Mr. Secretary. Thank you, 
Mr. Chairman.
    Mr. Dicks. That is a very good answer. I appreciate that 
very much.
    Mr. Hinchey.

                           STEWART ANG BASING

    Mr. Hinchey. Thank you very much, Mr. Chairman.
    I just wanted to ask you a question about the C-5 
retirements and the C-17s coming in. And I understand this 
question may have been asked before, but I just have a personal 
interest in it with regard to Newburgh. I was just wondering 
what the situation is there with regard to the changing that is 
going on in the context of Newburgh.
    General Schwartz. Sir, we have proposed to retire 17 
aircraft in this budget submission, 17 C-5s.
    In answer to an earlier question, we are using this basing 
process to determine which installation specifically will lose 
aircraft and transition to the C-17. And I don't have a 
specific answer to you whether it is Stewart or not. However, 
there will be one Air Force Reserve installation and one Air 
National Guard installation is what it looks like to me now.
    Mr. Hinchey. So this is something that we will learn over a 
short period of time as to how this evolves?
    General Schwartz. You will know that, and you will 
certainly have advance notice, not late in the game.

                           ALTERNATIVE ENERGY

    Mr. Hinchey. Thank you very much. I appreciate it.
    One of the things that we accomplished there recently was 
the establishment of what is called the Solar Farm. This is 
something that is going to generate about half of the energy 
that is needed there at the Newburgh Air Base, and we are now 
focusing on coming up with the second half at some point in the 
future. And I know this is of great interest to you, and I know 
it is something that you are engaged in.
    I wondered if you could just talk a little bit about it in 
a general way about the intentions and how we are going to be 
dealing with these energy needs and deal with them more 
efficiently.
    Mr. Donley. This is an important priority for our Air Force 
as you appreciate--I am sure the committee appreciates the 
Department of Defense is the largest consumer of fossil fuels 
in the Federal Government, and the Air Force is the largest 
consumer in the Department of Defense. So our three-pronged 
strategy here is to increase supplies where we can--to include 
looking for alternative sources of energy, to reduce demand 
where we can, and through operational profiles we can find ways 
to operate more efficiently. We have driven our energy 
requirements down over the last 5 to 10 years deliberately.
    And the third thing, which sort of wraps it all together, 
really, is to make energy use a consideration in all that we do 
in peacetime and wartime operations. We can by our own behavior 
affect the requirements for energy and also identify 
alternative sources.
    Solar is an important part of that. It is site specific. 
And one of our most recent initiatives, especially on the solar 
and wind side, is to get a little bit more proactive in 
identifying the new technologies that are coming on, working 
with State and regional and county governments to identify 
issues early in that permitting process. Because not all of 
these energy initiatives take place on Air Force property, not 
all of them take place on Federal property, but they may 
influence airspace or they may influence our operations. So we 
need to get more proactive in working with local communities to 
work through those issues so that we can get both the 
operational effectiveness we want and the benefits of new 
energy sources along the way.
    Mr. Hinchey. So this is an issue that is getting really the 
appropriate amount of attention and it is moving forward in a 
positive way.
    Thank you very much.
    Mr. Dicks. Mr. Tiahrt.

                               INSOURCING

    Mr. Tiahrt. Thank you, Mr. Chairman.
    I guess, if I understood the inserts you write, it is going 
to take $1.6 billion increase in civilian competition to do the 
job that $1 billion of contracting did.
    I think contracting is more efficient, personally. I mean, 
I don't hire somebody full time when I need somebody to come 
fix my furnace or take care of the electrical in my house. It 
just makes sense to contract for some services when you need 
them and not have somebody there full time.
    So I, for one, will try to take some of this pressure off 
of you guys for insourcing everything. Because I think it is 
less efficient and an example that was given is 37\1/2\ percent 
less efficient.

                         LIGHT ATTACK AIRCRAFT

    I want to talk about the light attack aircraft. There are 
two programs now. One is spearheaded by the Navy called 
Imminent Fury, and the other one is actually the Air National 
Guard doing a demo project.
    I think the requirement is out there for a light attack 
aircraft, but I think there could be some synergism in moving 
these programs in a parallel fashion, and I wondered if you 
would consider looking at that, maybe coordinating with the 
Navy on coming up with one program. There have been some great 
advantages shown in the Air National Guard program. If we could 
make that available for the Navy or somehow coordinate them--
and I wanted to put that on your radar screen.
    General Schwartz. Sir, as you know, we are participating 
with the Navy and the Imminent Fury demonstration. That is not 
an acquisition program. It really is a demonstration which will 
occur in Afghanistan of that capability. And, as you suggested, 
there is also a demonstration going on in the Air National 
Guard, and what we intend to do is this--is in fiscal year 2012 
start on the light strike side, go through the process, develop 
the requirements, and have a standard acquisition approach 
which will be competitive.
    Mr. Tiahrt. I think we are seeing in procurement--this is 
probably an age-old knowledge milestone that we seem to avoid 
on every new contract. If you look at the Presidential 
helicopter, we knew how to make a helicopter fly, but as soonas 
we start loading it up with new requirement, all of a sudden it became 
too heavy to fly in a program sense, not necessarily in an aerodynamic 
sense.

                    STREAMLINED ACQUISITION PROCESS

    The F-35, I think planned changes--you talk about 
concurrency, which I think is a good way to proceed, but it 
seems like we ought to be tighter on the base requirements with 
planned upgrades at PDM, for example, a bus. If you need a bus 
down to the weapons pylons, put the bus in. And if you get a 
more advanced piece of technology for a bus, then you would 
replace it at the planned program depot maintenance.
    I think one of the reasons we get into these elongated, 
expensive programs is we are not tight enough on the 
requirements for the underlying aircraft. And I may be 
mistaken, but aerodynamically it is pretty stable as far as the 
platform we need well into the future. The changes come from a 
lot of the avionics or the weapons capability. By holding the 
line on those growth ideas, we can make those planned upgrades 
without delaying the program so far and driving the price up. 
Is that part of the plan of going forward with F-35 and other 
programs?
    Mr. Donley. It is. There is a joint executive steering 
board for the F-35 program which represents all of the 
leadership, the stakeholders of the program; and they track 
very carefully the content of the program and both technical 
and cost trade-offs along the way. So this issue of controlling 
configuration is critical for F-35 and other programs. It has 
gotten a lot more attention over the last couple of years, as 
it should.
    General Schwartz. And I would only add, sir, that that 
approach is what we have in mind for long-range strike. That is 
to let the platform mature over time. We are not looking to 
have something necessarily that is 100 percent of what one 
might conceive of the need but rather to be a little bit less 
ambitious and then to improve over time.
    Mr. Tiahrt. Once the real estate is established inside the 
aircraft, then you can do a lot of things with--that given 
envelope is what we need to put some firm--as we go forward, I 
would like on the next generation bomber, I think that pattern 
would be very helpful for us.
    Thank you, Mr. Chairman. Thank you, guys.

                        UNDEFINITIZED CONTRACTS

    Mr. Dicks. Thank you.
    To meet urgent needs, the Department of Defense can 
authorize contractors to begin work and incur costs before 
reaching a final agreement on the contract terms and 
conditions, known as undefinitized contract actions or letter 
contracts. As of October, 2009, the Department of Defense had 
429 contracts that were undefinitized. Of those, over 160 were 
Air Force contracts, many of them far exceeding the time 
permitted to definitize. How are undefinitized contracts 
different from normal contracts?
    Mr. Donley. In rough terms, Mr. Chairman, they are shorter. 
They are able to be put together in a shorter period of time. 
They still commit the government to funding a program. They 
still commit a contractor to delivering certain capability. But 
they are preliminary, and they need to be followed up with a 
more permanent contract arrangement negotiated in greater 
detail on both sides. So you could provide the flexibility we 
need to start contract actions early.
    I think our challenge, as the committee is aware, is we 
have let these Undefinitized Contract Action (UCA) persist for 
too long and we have used them too easily to bridge over the 
actual negotiation of contracts that needs to take place to get 
a better handle on deliverables.
    Mr. Dicks. Look. You answered my second question. In your 
experience, does the benefit of starting work sooner outweigh 
the loss of control experienced in a UCA?
    Mr. Donley. I do believe the Department and not just the 
Air Force, but if I can extend this to the DOD level, we do 
need UCAs. We do need the flexibility to use this tool.
    And it is true that we need to tighten up on this. We have 
identified the specific areas in the Air Force acquisition 
process where this is taking too long. We have elevated the 
approval authorities to undertake UCAs so we sort of staunch 
the bleeding up front so there should be less rapid growth in 
the use of UCAs and we should be working down a backlog of 
existing UCAs and converting those to contracts as quickly as 
we can.
    Mr. Dicks. Does a shortage of contracting officers within 
the Air Force impact the Air Force's ability to definitize 
contracts?
    Mr. Donley. I think it is a factor. I think General Hoffman 
could provide a much more sharp perspective on this. But we are 
short on contracting personnel; and, in fact, if you look at 
the stressed career fields in the United States Air Force, 
contracting is near the top.
    Our contracting folks are operating on a one-to-one dwell 
in the (USCENTCOM) area of operations and actually were called 
upon to help the Department work contracting challenges in 
(USCENTCOM) that arose about three, four, five years ago; and 
where the Department needed some infusion of contracting 
expertise, they came to the Air Force to do that. So that has 
had an impact, and we are trying to build up the contracting 
workforce in our acquisition improvement program. But I think 
General Hoffman could provide more detail on that.
    General Schwartz. And, sir, if I may just add, by the way, 
those contracting assessments are joint expeditionarytaskings; 
and they are doing real work for the country. Sir, I might just say, to 
give you an example, because I know you consider us to be a bad actor 
in this regard.
    And with the Global Hawk program, for example, there are 
six undefinitized contracts all of which will be definitized 
before the end of the fiscal year. So it gives you a sense, and 
I know the staff is watching this carefully for you, but we are 
bird-dogging it as well.
    Mr. Dicks. Good. Your assurance is making me feel better.
    But just for the record here, I have to establish this, 
because this is part of our oversight responsibilities. The FAR 
states that undefinitized contract actions should be 
definitized within 180 days of signing the UCA or before 
completion of 40 percent of the work to be performed, whichever 
occurs first. However, many of the contracts are not 
definitized within the required 180-day time period. In some 
cases, years have passed without definitization and sometimes 
funds are obligated in excess of the limits normally allowed. 
For example, at the end of January, the Air Force's 
aeronautical systems command at Wright-Patterson Air Force 
Base, there were 87 open UCAs averaging 363 days open, 20 of 
the 87 in excess of 600 days.
    What reasons are there for UCA to not be definitized within 
the permitted time periods?
    Mr. Donley. Mr. Chairman, I would like to take that for the 
record. I think each of those program, each of those contract 
actions has its own story; and I need to have the experts 
characterize that for you.
    [The information follows:]

    The major reasons why undefinitized contract actions are not 
definitized within the permitted time periods include late submitted or 
inadequate proposals, audit delays, changes in requirements and 
personnel constraints.

    Mr. Dicks. Okay. Also, one final thing. Receiving a 
favorable audit from the Defense Contract Audit Agency is also 
an area that takes too long. What is the Air Force doing to 
enable the Defense Contract Audit Agency to conduct more timely 
audits?
    Mr. Donley. We continue to be in dialogue with the Defense 
Contract Audit Agency (DCAA) about how they can shorten their 
process and how we can work together to make that process more 
efficient.
    Mr. Dicks. Yeah. We have a few more questions here on that 
subject for the record.
    Mr. Tiahrt.

                   LIGHT ATTACK ARMED RECONNAISSANCE

    Mr. Tiahrt. Thank you, Mr. Chairman.
    This sort of relates to all of us. Gentlemen, I have 
requested two documents relating to the light attack armed 
reconnaissance program. Unfortunately, I have been informed 
that Members of Congress now have to file a Freedom of 
Information Act request to gain access to any document. Can you 
please provide my office and this committee with the capability 
based assessment and the component cost analysis for the LAAR 
program?
    Mr. Dicks. Is this true? Do we have to go--this can't be 
true.
    Mr. Donley. Mr. Chairman, I am not aware of any new 
policies on this subject. I think the issue--and I would let 
the lawyers answer this more carefully for the record. Ibelieve 
the issue has to do with requests from individual Members on matters 
which get close to or cross over into source selection sensitive 
information.

                         COMPASS CALL AIRCRAFT

    Mr. Dicks. We don't want to do anything, especially, Mr. 
Tiahrt and I, to cause any problems in that respect, but we 
certainly want the information for the committee.
    I have one more that I wanted to ask; and then if anybody 
else has a question, we will go to you.
    The committee is pleased to note that the Air Force has 
focused funds on the budget on electronic attack aircraft. But 
we have some concerns over the plans for converting of 45-year-
old aircraft. Specifically, the request includes funds to begin 
the modification of the WC-130H aircraft into an EC-130H 
compass call aircraft. This would increase the compass call 
inventory to 15 aircraft.
    You may have gotten into this earlier, but I want to go 
back to it. The request states that the conversion will cost 
$150 million, but it appears the Air Force is only funding a 
portion of the requirement in fiscal year 2011. Why are we 
taking an aircraft of this age to do this?
    General Schwartz. Sir, it is structurally sound. The 
compass call mission is not a mission which places great demand 
on the C-130 airframe because it is in that altitude mission 
and so on. So this approach was a way to increase the 
electronic combat capability we need at minimum cost. And it is 
$150 million over three years. It is 2011, 2012, and 2013; and 
it is funded accordingly, sir.
    Mr. Dicks. How does the Air Force justify partial funding 
of the conversion--you are saying it is complete funding? It 
appears to be incremental funding.
    General Schwartz. Sir, I am saying that the program is 
fully funded.
    Mr. Dicks. It is fully funded.
    General Schwartz. It is fully funded. I take your point 
that it is not in one fiscal year, and we will come back to you 
on the record for that.
    [The information follows:]

    The initiative to convert a WC-130H to an EC-130H was proposed in 
early Fiscal Year 2009 and some funding has been included in the Fiscal 
Year 2011 President's Budget request. Execution of this conversion 
requires three years. The first year is needed for production 
engineering and drawings, ordering long lead components, and Group A 
kits. The second year involves Group B kit production. Actual 
modification/installation occur in year three. Since these tasks are 
viewed as distinct and separable, funding for the Group B kits and 
modification would be early to need in FY11. During the Fiscal Year 
2011 Program Objective Memorandum process funding for the three phases 
is spread across Fiscal Years 2011-2013. Shown below is an updated 
program office cost estimate for the conversion of a WC-130 to an EC-
130H.
    $35.3M--Production engineering/drawing
    $11.8M--Long lead components
    $26.6M--Group A kit production
    $48.3M--Group B kit production
    $27.9M--Aircraft modification/installation
    Production engineering, long lead items and Group A kits are funded 
in Fiscal Year 2011 ($73.7M). Group B kits are programmed in Fiscal 
Year 2012 ($48.3M) and aircraft modification/installation is programmed 
in Fiscal Year 2013 ($27.9M).

                         COMPASS CALL VIABILITY

    Mr. Dicks. This past year the Air Force conducted a fleet 
viability board review of the existing fleet. What were the 
results of the review?
    Mr. Donley. Sir, we have had several. Can I ask which 
airframe the Chairman is referring to?
    Mr. Dicks. This is the same one. This is on the WC-130H 
aircraft.
    General Schwartz. Sir, the C-130 fleet viability is a 
project that is ongoing for this year. It has not yet reported 
out. The most recent fleet viability that we did was on the 
JSTARS that was referred to earlier by Congressman Kingston.
    Mr. Dicks. Are there other questions?
    Mr. Kingston first. We will go in order.

                             CYBERSECURITY

    Mr. Kingston. Thank you, Mr. Chairman.
    General, I wanted to ask about cybersecurity, and you may 
need to follow up if you don't know these numbers. But 
generally how big of a problem is it? How many break-in 
attempts do we get each day and into what systems are they 
worst? Who is doing it? And how often are they successful?
    And then, partly provincial, in my hometown, Armstrong 
Atlantic University has a cybersecurity center which they 
started about 4 or 5 years ago. I frequently get briefed by 
them; and I am always astounded, no matter how many times I 
see, the number of attacks that come in worldwide and the 
places that they come from and the freelance agents and the 
organized country effort. It just seems like it is all over the 
place. I wonder if you could----
    General Schwartz. Sir, it is a major issue in our 
unclassified networks; and we work hard, very diligently, and 
have, no kidding, some of the best talent working to defend the 
net. In fact, we stood up an organization called 24th Air Force 
to do exactly that, to defend the net.
    Now, this is both on the unclassified side where we have--I 
have been speaking for 15 seconds. We probably had 15 attempts 
to work into the system. We are reasonably secure.
    But on the classified side, I would indicate that we are 
quite secure, very secure. The dilemma is that, as you 
suggested, there are all kinds of actors out there. There are 
nation state actors. There are individuals. There is criminal-
related activity. There are fun seekers that are doing this, 
and they certainly take time on DOD networks.
    So I think if I had one comment to make to you, sir, is 
that the Secretary of Defense's initiative to stand up the sub-
unified cyber command is an essential undertaking for our 
Department to put the focus on this as a discipline and as a 
command entity.
    There is some concern that DOD might take over, might move 
outside dotmil. I don't see that occurring. But within dotmil 
and perhaps for dotgov, we need to make the best use of all of 
the talent that is available in agencies within DOD like our 
24th Air Force, like the National Security Agency and 
elsewhere.
    Mr. Kingston. Aside from the attacks on your main computer 
programs, what about listening devices or trying to get into 
individual cell phones or BlackBerrys, that has got to be out 
there as well?
    General Schwartz. It is a counter-intelligence concern and 
one that we take seriously.
    Mr. Kingston. How vulnerable do you think Members of 
Congress are, based on what you know, with our own BlackBerrys 
as we go on codels or even not leaving the United States?
    General Schwartz. I would have to tell you I would say 
vulnerable.
    Mr. Kingston. Do you use a BlackBerry?
    General Schwartz. I do.
    Mr. Kingston. Well, is that the inconsistent with what you 
just said? I am trying to figure out, should I throw mine out 
or not?
    General Schwartz. I don't think you should, but you need to 
think about what you are using it for, and that really is the 
guidance that we have provided our people.
    Now there are certain folks in the Air Force that won't use 
a BlackBerry because of the work that they do. In my case, if I 
get a pulse from the media, it is a vehicle that I use to good 
effect, in my view.
    So we train our people and instruct our people to be 
judicious. And in some cases they don't get to use it at all 
because they are in very sensitive positions. My hunch is that 
a similar sort of protocol applies here on Capitol Hill as 
well. Folks from the Intelligence Committee, for example, might 
have different rules than other committees.
    Mr. Kingston. Thank you.
    Mr. Dicks. I think that is one reason we put in this 
password, which is very annoying, but we had to do it. But it 
has to be done, and we are doing it.
    Mr. Visclosky.

                           SATELLITE PROGRAMS

    Mr. Visclosky. With these thumbs, that password is very, 
very annoying. It is just hard.
    Mr. Secretary, on the satellite programs, you have a number 
of significant systems and, apparently, there has been some 
significant schedule growth, cost increases, a lot of which may 
have to do with unrealistic cost estimates in the first place, 
questions about technical maturity. Are there simply now too 
many systems, is there too much program for the monies that you 
have for the satellite program?
    Mr. Donley. Sir, again, I think each program has its own 
story and own history. We had had I think, up until a couple of 
years ago before Secretary Gates took a closer look at this, we 
did have a number of satellite systems cued up, especially in 
the secure Satellite Communications (SATCOM) area where we had 
more technology perhaps programmed than we could afford. And 
that resulted in the cancellation of the TSAT, the 
transformational satellite program.
    We have stepped back to focus on the execution of the AEHF 
program, but we are still looking for opportunities at some 
point in the future to insert new technology, much along the 
lines as Mr. Tiahrt described, where and when we are ready to 
do that and we can afford it.
    Again, each of these programs has its own story. I think, 
right now, we are most concerned with the EELV program, the 
evolved expendable launch capability that we have enjoyed 
success with for so many years now. I think it is--I want to 
say 65 or so. But it is a string of successful launches using 
EELV.
    And we have benefited from some early multiyear contract 
arrangement which has since expired. On that program, we are 
looking at significant cost growth, which we are not happy 
with; and we are looking for alternatives going forward. And we 
are looking at additional pressure on the solid rocket motor 
and the industrial base that goes with that. With the changes 
in National Aeronautics and Space Administration's program, we 
face some significant challenges in developing an affordable 
funding profile for space launch support. So that is an area 
that we are looking at in particular right now.
    Mr. Visclosky. I don't know that we will have a hearing on 
launch per se, but are there a couple of issues and any 
monetary value that we should know or be particularly concerned 
about on the launch side before we mark up our bill?
    Mr. Donley. We will certainly support the committee's 
schedule as best we possibly can with the latest information 
that we have on the EELV.
    Mr. Visclosky. And on the satellites themselves, is there--
getting back to Mr. Rogers' line of questioning before about 
DOD and DOE--between the Intelligence Committee community and 
some of the requirements that they are asking for some of these 
satellites and in a sense overrequesting for capabilities here, 
given again technology that is available today and the dollars 
that are available today? Is there a disconnect there?
    Mr. Donley. Sir, I wouldn't speak specifically to the 
systems that are procured in the national programs, although I 
will say that we have a close relationship with the National 
Reconnaissance Office that has--we have had that close 
relationship for many years, that continues, and we continue to 
collaborate on trade-offs where we can between space-based and 
airborne systems and also identifying capabilities on the DOD 
side that can be hosted elsewhere in either the Intelligence 
Community or even on commercial satellites as well. So we are 
looking for creative alternatives for hosting DOD-required 
capabilities on different kinds of platforms, rather than just 
necessarily owning and launching and operating everything 
ourselves.
    And I should add that you will see this play out in the 
Space Posture Review, which should be delivered to Congress 
later on this spring, early summertime frame. You will see the 
policy level discussions and trade-offs on sort of organic 
government-owned versus international partnerships and 
commercial partnerships as well and the kind of judgments the 
Administration is about to make, if you will, on how to strike 
the appropriate balance in that mix.

          INTELLIGENCE, SURVEILLANCE RECONNAISSANCE PERSONNEL

    Mr. Visclosky. And we would look for that late spring.
    One last line of question, if I could, Mr. Chairman. You 
had mentioned before, Mr. Secretary, in one of your answers 
about stress specialties; and you mentioned contracting and 
acquisition. I understand you also have problems as far as 
intelligence surveillance and reconnaissance, nuclear missions. 
What are you doing to address that issue? And again is it a 
resource issue? Isthere something we ought to have particular 
concern about?
    General Schwartz. Sir, what we have done is we have made 
major moves in the ISR area--I mean, as many as 4,700 spaces--
to try to compensate for the demand there. We have moved 2,500 
spaces in Fiscal Year 2010 to strengthen the nuclear 
enterprise. We also moved roughly 2,000 spaces into aircraft 
and missile maintenance. When we went through the drawdown 
episode a couple of years ago, we overshot. So we needed to 
bring that back up to an appropriate level.
    Smaller numbers of spaces have gone to the other 
disciplines. Certainly, as you suggested, contracting, public 
affairs is a high-demand activity. Security forces is a high-
demand activity. Believe it or not, the chaplaincy is a high-
demand activity.
    And so we are doing the best we can, but I have to tell 
you, sir--and this is a significant matter for the 
appropriators--our personnel costs are a major concern to the 
Secretary and me. To the extent that if we don't watch this and 
do this carefully, our personnel costs will begin to push out 
important content elsewhere in the Air Force portfolio. So we 
need to be judicious, and the bottom line is we are not going 
to grow because we can't afford it.
    So if we have some areas in the Air Force that are 
expanding, like intelligence surveillance and reconnaissance, 
we are going to have to shrink in others; and we are going to 
have to gather manpower and financial resources from within our 
existing portfolio.
    Mr. Visclosky. Gentlemen, thank you.
    Thank you, Mr. Chairman.
    Mr. Dicks. Ms. Granger.

                          F-22 RAPTOR AIRCRAFT

    Ms. Granger. Just a couple of quick questions about the F-
22.
    General Schwartz, Secretary Gates described the F-22 as the 
critical hedge against new threat systems such as the Russian 
fifth generation fighter. I saw in your testimony that you 
invested $2 billion in improvements to upgrade the F-22. Is 
this sufficient to continue the air superiority of the F-22? 
And tell me a little bit about long-term modernization.
    General Schwartz. Ma'am, we are going to have 150 block 3 
or block 3\1/2\ quality kinds of airplanes. These will be 
machines at the very top tier of the F-22 capability.
    Training aircraft, on the other hand, so-called block 20 
aircraft, won't have all of the wherewithal that the 
operational aircraft will have. So there will be about 28 or 
so--forgive me--36 of the block 20 airplane and the remainder 
will be full-up capabilities which will have both air-to-air, 
for which the airplane was primarily designed, as well as air-
to-ground capability. And that is where some of the 
advancements will come as we go down the line.
    It is very important with the smaller fleet we have that we 
continue to invest in sustaining the F-22, both its low 
observable qualities, its avionics. We are going to put a 
different data link on the airplane that is compatible with the 
F-35. The data link that it currently has is only F-22 
specific. In the way we used to think about employing the 
airplane, that was okay. It is not anymore. It is a secure data 
link, but we need to have one that can be used throughout the 
force and particularly among generation five capable fighters.
    So those are the kinds of improvements we are making, and I 
would appeal to the committee to support us on making those 187 
airplanes as capable as they can be.
    Ms. Granger. Thank you very much. And thank you both for 
appearing and your service. Thank you, Mr. Chairman.
    Mr. Dicks. Mr. Boyd.

                              F-22 BASING

    Mr. Boyd. Thank you, Mr. Chairman.
    And, General Schwartz, this is a follow-up to what Ms. 
Granger--you and I have had many discussions about the F-22, 
and you know of my parochial interest in that. I asked you 
earlier about the Strategic Basing Executive Steering Group, 
and you have explained to me that they would be involved.
    What I didn't ask you was when, and I have asked you that 
before, and I felt it would be remiss and you would be very 
disappointed if I didn't ask you here today.
    General Schwartz. With respect to what we will do with the 
F-22 from a fleet management point of view, that is a 
summertime frame decision process.

                           PERSONNEL TRAINING

    Mr. Boyd. All right. Okay. Thank you very much, General.
    Now, to follow-up on Mr. Visclosky's line of questioning 
relative to the personnel and your concern about personnel 
pushing folks out, you are trying to redesign your whole system 
and scheme of things. The CAF, your reductions there, you have, 
I understand, according to testimony, 3,600 personnel who will 
be reassigned, retrained, go into other fields as you do this 
realignment. About one-sixth or about 600 of those, I think, 
are coming out of the F-15 schoolhouse area that I have an 
interest in. There is going to be some retraining requirements 
there. And my question really is about how long that transition 
will take. And by the time these airmen are retrained, will 
those requirements still be available?
    General Schwartz. Sir, there will be some retraining, 
clearly. There will be some sort of immediate transfers where 
the skill set is not weapon system specific or something along 
those lines, and it depends on the specific skill. If we are 
talking about F-15 pilots transitioning to another airplane, it 
might be six months. With respect to amaintainer moving to an 
F-16 or another aviation weapons system, it is probably less than six 
months. So we are talking about within the year basically of having 
people that would migrate out of their current mission assignments and 
be applied to others elsewhere in our Air Force.
    In more rare cases, you will have the kind of thing where 
people are making a hard change, maybe, for example, might go 
from maintenance to becoming a sensor operator on an unmanned 
or remotely piloted aircraft. That is probably a year plus to 
do that.
    So it depends, sir, but I would emphasize again, and 
reinforcing the comment that I made earlier, that if we are 
going to remain relevant and our capabilities are those which 
the joint team needs now in going forward, we need to begin to 
make these changes, as painful as they are, sir.
    Mr. Boyd. Thank you very much, General Schwartz, Mr. 
Chairman.
    Mr. Dicks. Mr. Rogers.

                          MOTHBALLED AIRCRAFT

    Mr. Rogers. Tell me, where do you store mothballed 
aircraft?
    General Schwartz. Sir, it is done at Davis-Monthan Air 
Force Base in Arizona at the so-called graveyard.
    Mr. Rogers. Are those planes useless?
    General Schwartz. Not at all. In fact, there are several 
layers of storage.
    Type 1,000 storage, for example, is something that you 
could bring back quite readily. There are other levels of 
storage where you get to take spare parts off these machines 
and they become less and less--the potential of recovering 
them, obviously, declines over time. So it depends what the 
status of the specific kind of storage is.
    Mr. Rogers. How many planes do we have in storage?
    General Schwartz. Sir, I would have to take that for the 
record, but it is thousands.
    [The information follows:]

    Currently, the United States Air Force has 2,205 aircraft in 
Aerospace Maintenance and Regeneration Group storage.

    Mr. Rogers. I know the chairman may not be interested in 
this very much, but could some of those planes be reused in the 
modern day need for new aircraft?
    Mr. Donley. Sir, my assessment is that that would be very 
difficult to do and very expensive.
    As the Chief outlined, I think there are options for 
putting aircraft into retirement, where one can put them into 
storage where for some period of time they can be maintained at 
a level to be brought back on fairly short notice. That is an 
expensive proposition. I don't recall off the top of my head--
we will get you an answer for the record--whether we have 
actually done that. It has been discussed, but I am not sure we 
have actually exercised that option.
    [The information follows:]

    From Fiscal Year 2006 through Fiscal Year 2009, 109 Air Force 
aircraft have been regenerated at the Aerospace Maintenance and 
Regeneration Group to support the United States Air Force, the 
Department of Defense, and foreign military sales.

    Mr. Donley. The more common use, as the Chief described it, 
is to cannibalize these airplanes over time for various spare 
parts, not just for the United States Air Force but also for 
our international partners who, through foreign military sales 
(FMS) and other programs, are operating generations of aircraft 
maybe one or two behind the United States and where there are 
no current production aircraft available to provide a spare 
parts pipeline. So this is the more common use of these 
aircraft.
    Mr. Rogers. What would be the oldest aircraft in that 
fleet?
    General Schwartz. Probably one of the ones that the Women's 
Air Force Service Pilots (WASPs) flew years ago. Sir, I don't 
know, but I will find out for you.
    [The information follows:]

    The oldest Air Force aircraft in storage by arrival date is a WB-
57F (modified Canberra B-57), serial number 63-13295, which arrived in 
July 1972.

    Mr. Donley. They go back to the 1950s, for sure. Old B-52s, 
for example.
    Mr. Dicks. I will just say to the gentleman from Kentucky, 
if we can use these airplanes or if our allies can use them, I 
am for using them. If there is a way to do it, that makes 
sense. Spare parts are very important.
    Mr. Hinchey.

                  COMBAT SEARCH AND RESCUE HELICOPTER

    Mr. Hinchey. Thank you, Mr. Chairman. Just a couple of 
quick things.
    The Air Force I understand is considering a multibillion 
dollar sole source procurement to replace the aging HH-60G Pave 
Hawk search and rescue helicopter. How is that going to happen? 
Is the Air Force conferring a sole source procurement to 
recapitalize? No?
    General Schwartz. No, sir. I think I can speak with 
authority and say that it will be a competitive process. But I 
would envision that will not be a development program, at least 
not a major development program. It will capitalize on 
something that is currently available and is modified to the 
combat search and rescue mission set.

                        UNMANNED AERIAL VEHICLES

    Mr. Hinchey. Okay. Thank you very much.
    The unmanned aircraft system is something that has gotten 
an awful lot of attention and something that, frankly, is very 
interesting. They are serving in an expanded set of operations 
in both Iraq and Afghanistan, And I understandthat some of them 
are located in Korea as well. I don't know if that is a fact, but I 
understand that may be the case. I wondered if you would share your 
vision of the future for the unmanned aerial system, especially in the 
counterinsurgency operations but also in the regular combat operations 
as well.
    General Schwartz. Sir, we believe that remotely piloted 
aircraft (RPA) are a capability that will remain. It is an 
enduring feature of our Air Force, both for surveillance 
requirements as well as strike requirements in the right kind 
of environment. So we see the inventory of these assets 
growing.
    We currently have in the neighborhood of 200 remotely 
piloted aircraft at different classes in the Air Force that 
will probably double over time. And we will have those both for 
the irregular warfare mission set that you are familiar with, 
but it will also be useful in other applications which we 
haven't completely thought through, for example, suppression of 
enemy air defenses.
    Other capable air forces in the world use these platforms 
in perhaps different ways than we have currently thought about 
and we need, again, as part of this growth process, to make 
sure that we have considered all of the possible applications. 
RPAs are not anytime, anyplace aircraft. There are certain 
environments where they simply will not survive. But that is 
only a part of the potential operating environment.
    Mr. Dicks. If the gentleman will yield, it is not just the 
Air Force. This is the Navy, the Army, Special Forces. 
Everybody is looking at these and in whole different sizes, 
shapes and capabilities, is that correct?
    Mr. Donley. Yes, sir. And many other nations as well.
    Mr. Dicks. Mr. Hinchey.
    Mr. Hinchey. Is there a shortage? Is there enough? Do you 
have enough coming in?
    General Schwartz. We are maxing production, sir. There are 
48 reapers in this budget, both in the base and in the overseas 
contingency operations account; and that is all that General 
Atomics can produce.
    Mr. Hinchey. Just one more question.
    Mr. Dicks. Will the gentleman yield on this same point?
    We are working on trying to secure the Predators because 
there was some issue with their vulnerability; isn't that 
correct?
    General Schwartz. Sir, there is no vulnerability with 
respect to the air-to-air links or the space-borne links; they 
are all secure, both in terms of command and control as well as 
the take off sensors.
    The issue you address has to do with what is provided in an 
air-to-ground sense directly to our troops, Airmen, Marines, 
and what have you on the ground. We are in the process of 
securing those links.
    But this, Mr. Chairman, is one of those cases where you 
have to balance risk. I would argue that it is better for our 
kids to know what is around the corner and worry less about 
whether somebody else is watching that, too. But we will be--in 
the next two years, we will move dramatically on securing the 
air-to-ground portion of those links as well.
    Mr. Dicks. Okay.

                          PROMPT GLOBAL STRIKE

    Mr. Hinchey. If I may just ask one last question. The issue 
of prompt global strike is something that is getting more 
attention. And I can understand it because of the way things 
are developing around this planet, and it makes life a little 
more tense and tenuous. I wonder if you could talk to us just 
for a couple of minutes maybe about what the situation is, how 
it is evolving, what progress is being made in reviewing the 
prompt global strike, what the situation is generally.
    General Schwartz. Sir, let me just start, and I am sure the 
Secretary will have something to add.
    When the Secretary mentioned the family of systems earlier 
with respect to long-range strike, prompt global strike is a 
part of that family. This is fundamentally what, at least for 
us, would be a conventional ICBM, something that would have a 
conventional warhead that we could launch and be on target in a 
matter of minutes, as opposed to hours or even longer.
    In addition, there are certain developmental kinds of 
capabilities that fall into this category like hypersonic glide 
vehicles. This is something that is new, and it is 
developmental, and, in fact, there will be a test in the coming 
months on the first launch of an experimental hypersonic glide 
vehicle.
    So this is about getting to targets very promptly with high 
kinetic effect, nonnuclear. There is a place, I think, for that 
kind of capability. I don't think that that is the sort of 
thing you would use broadly because fundamentally, what you 
don't want to have is a 300--let us just say a $300 million 
weapon applied against a $30,000 target. I mean, there is 
balance in this. But there is a place for prompt global strike, 
and we in the Air Force will be pursuing this on behalf of DOD.
    Mr. Donley. I think that the Chief has hit it right on. 
This is part of this discussion in the Department about the 
family of systems that we are looking for. The mix of standoff 
and penetration, the mix of prompt and persistent, the mix of 
manned and unmanned, and the mix of platforms, weapons, ISR 
capabilities, and electronic warfare capability, all of those 
things together make up a long-range strike family, a 
portfolio, if you will.
    So we are taking a closer look at how and where weinvest in 
that portfolio and the sequence. What should we work on first? Where 
are the threats or opportunities most pregnant that we need to address? 
What will or should take a little bit longer to decide? And so these 
are the issues the Secretary has put in motion.
    I will say, from a programmatic point of view, the prompt 
global strike work had been a little bit federated over the 
last couple of years. There have been a couple of different R&D 
lines and different projects under that umbrella, and Dr. 
Carter has asked the Air Force to help pull that together and 
manage it as a whole going forward. So we are in the process of 
assuming that responsibility. It started a little bit earlier 
this winter. So that will give the Air Force a little bit 
better visibility into the prompt global strike area.
    General Schwartz. And I would just add, sir, that this is 
not just about the Air Force. There are other capabilities. 
Conventional Trident, for example, is something that is a 
possibility. So this is not just Air Force business.
    Mr. Dicks. On that point, isn't one of the problems is how 
you would distinguish between a conventional weapon and a 
weapon that has nuclear warheads? That is one problem with this 
concept, right?
    General Schwartz. Stability is an issue, and there are ways 
to address that, either by your basing mode or where these 
would be based, what kind of awareness others might have, and 
whether it is aboveground or in ground, and so on and so forth. 
There are a lot of different ways to address the ambiguity 
issues associated with prompt global strike, and this is not 
yet completely thought through.
    Mr. Dicks. One thing with the B-2, we moved away from using 
it to deliver nuclear weapons and put it on smart conventional 
weapons; and I like what you said. In that respect, you have a 
very inexpensive weapon going after a target; and sometimes, as 
you well know, on one mission you can take out 26 targets. And 
if we get to the smaller weapons, even more. So that is a 
tremendous conventional capability that you have with a 
penetrating bomber and--but I do like what you said also on the 
UAVs and using them for suppression of enemy radar. That is not 
something I had heard about before. It sounds very interesting.

                       I-22 AIRCRAFT RELIABILITY

    I had one question on the reliability issue on the F-22. 
Thus far this year, the F-22 mission capable rate is only 62 
percent. This is significantly below expectation. What is 
driving those low rates and what is the Air Force doing to 
improve the rates?
    General Schwartz. Sir, a couple of things. This is both 
process. It is material. It is training. So there are a number 
of paths related to, in particular, low observable maintenance. 
There is efforts under way in this response to Congresswoman 
Granger's question earlier about developing materials that are 
more durable for the F-22, certainly for the F-35. That is one 
aspect.
    Mr. Dicks. We had the same issue with the B-2.
    General Schwartz. Exactly, sir. You understand that.
    Mr. Dicks. And then we improved as we went along.
    General Schwartz. Improve it as you go along, and clearly 
we need to continue to do that. Some of this is process, and it 
has to do with the facility, to have the right kind of 
facilities where--to use the slang--where you can bake the 
airplane and accelerate the repair process. So facilities, 
materiel, training for our youngsters so that they get 
proficient in identifying their skill so that they stay in the 
low observable maintenance discipline and not go out as one 
young man did that I know. He was an award winner at Elmendorf 
Air Force Base, sir, and ended up going to F-16 at Hill Air 
Force Base. Probably not the best use of this very fine Airman.
    So we have personnel processes that need to attend to as 
well.
    Mr. Dicks. Any other questions?
    The committee is adjourned until 1:30 tomorrow, Thursday, 
March 11th. At that time, we will reconvene for a hearing on 
Navy posture.
    Thank you very much. It was a good hearing, and we 
appreciate your availability.
                                                                      ?

             DEPARTMENT OF DEFENSE APPROPRIATIONS FOR 2011

_______________________________________________________________________

                                HEARINGS

                                BEFORE A

                           SUBCOMMITTEE OF THE

                       COMMITTEE ON APPROPRIATIONS

                         HOUSE OF REPRESENTATIVES

                      ONE HUNDRED ELEVENTH CONGRESS
                             SECOND SESSION
                                ________
                         SUBCOMMITTEE ON DEFENSE
                  NORMAN D. DICKS, Washington, Chairman

 PETER J. VISCLOSKY, Indiana        C. W. BILL YOUNG, Florida
 JAMES P. MORAN, Virginia           RODNEY P. FRELINGHUYSEN, New Jersey
 MARCY KAPTUR, Ohio                 TODD TIAHRT, Kansas
 ALLEN BOYD, Florida                JACK KINGSTON, Georgia
 STEVEN R. ROTHMAN, New Jersey      KAY GRANGER, Texas
 SANFORD D. BISHOP, Jr., Georgia    HAROLD ROGERS, Kentucky             
 MAURICE D. HINCHEY, New York       
 CAROLYN C. KILPATRICK, Michigan    
 TIM RYAN, Ohio                     

 NOTE: Under Committee Rules, Mr. Obey, as Chairman of the Full 
Committee, and Mr. Lewis, as Ranking Minority Member of the Full 
Committee, are authorized to sit as Members of all Subcommittees.
 Paul Juola, Greg Lankler, Sarah Young, Paul Terry, Kris Mallard, Adam 
                                Harris,
      Ann Reese, Brooke Boyer, Tim Prince, B G Wright, Chris White,
           Celes Hughes, and Adrienne Ramsay, Staff Assistants
       Sherry L. Young, and Tracey LaTurner, Administrative Aides
                                ________
                                 PART 1
                                                                   Page
 Acquisition Contracting..........................................    1
 Combat Aircraft Requirements.....................................   69
 Fort Hood........................................................  119
 Air Force Posture................................................  231
                                ________

         Printed for the use of the Committee on Appropriations
         PART 1--DEPARTMENT OF DEFENSE APPROPRIATIONS FOR 2011
                                                                      ?

             DEPARTMENT OF DEFENSE APPROPRIATIONS FOR 2011

_______________________________________________________________________

                                HEARINGS

                                BEFORE A

                           SUBCOMMITTEE OF THE

                       COMMITTEE ON APPROPRIATIONS

                         HOUSE OF REPRESENTATIVES

                      ONE HUNDRED ELEVENTH CONGRESS
                             SECOND SESSION
                                ________
                         SUBCOMMITTEE ON DEFENSE
                  NORMAN D. DICKS, Washington, Chairman
 
 PETER J. VISCLOSKY, Indiana        C. W. BILL YOUNG, Florida
 JAMES P. MORAN, Virginia           RODNEY P. FRELINGHUYSEN, New Jersey
 MARCY KAPTUR, Ohio                 TODD TIAHRT, Kansas
 ALLEN BOYD, Florida                JACK KINGSTON, Georgia
 STEVEN R. ROTHMAN, New Jersey      KAY GRANGER, Texas
 SANFORD D. BISHOP, Jr., Georgia    HAROLD ROGERS, Kentucky              
 MAURICE D. HINCHEY, New York       
 CAROLYN C. KILPATRICK, Michigan    
 TIM RYAN, Ohio                     
                                    

 NOTE: Under Committee Rules, Mr. Obey, as Chairman of the Full 
Committee, and Mr. Lewis, as Ranking Minority Member of the Full 
Committee, are authorized to sit as Members of all Subcommittees.
 Paul Juola, Greg Lankler, Sarah Young, Paul Terry, Kris Mallard, Adam 
                                Harris,
      Ann Reese, Brooke Boyer, Tim Prince, B G Wright, Chris White,
           Celes Hughes, and Adrienne Ramsay, Staff Assistants
       Sherry L. Young, and Tracey LaTurner, Administrative Aides
                                ________
                                 PART 1
                                                                   Page
 Acquisition Contracting..........................................    1
 Combat Aircraft Requirements.....................................   69
 Fort Hood........................................................  119
 Air Force Posture................................................  231
                                ________

                     U.S. GOVERNMENT PRINTING OFFICE
 65-007                     WASHINGTON : 2011

                                  COMMITTEE ON APPROPRIATIONS

                   DAVID R. OBEY, Wisconsin, Chairman
 
 NORMAN D. DICKS, Washington        JERRY LEWIS, California
 ALAN B. MOLLOHAN, West Virginia    C. W. BILL YOUNG, Florida
 MARCY KAPTUR, Ohio                 HAROLD ROGERS, Kentucky
 PETER J. VISCLOSKY, Indiana        FRANK R. WOLF, Virginia
 NITA M. LOWEY, New York            JACK KINGSTON, Georgia
 JOSE E. SERRANO, New York          RODNEY P. FRELINGHUYSEN, New
 ROSA L. DeLAURO, Connecticut       Jersey
 JAMES P. MORAN, Virginia           TODD TIAHRT, Kansas
 JOHN W. OLVER, Massachusetts       ZACH WAMP, Tennessee
 ED PASTOR, Arizona                 TOM LATHAM, Iowa
 DAVID E. PRICE, North Carolina     ROBERT B. ADERHOLT, Alabama
 CHET EDWARDS, Texas                JO ANN EMERSON, Missouri
 PATRICK J. KENNEDY, Rhode Island   KAY GRANGER, Texas
 MAURICE D. HINCHEY, New York       MICHAEL K. SIMPSON, Idaho
 LUCILLE ROYBAL-ALLARD, California  JOHN ABNEY CULBERSON, Texas
 SAM FARR, California               MARK STEVEN KIRK, Illinois
 JESSE L. JACKSON, Jr., Illinois    ANDER CRENSHAW, Florida
 CAROLYN C. KILPATRICK, Michigan    DENNIS R. REHBERG, Montana
 ALLEN BOYD, Florida                JOHN R. CARTER, Texas
 CHAKA FATTAH, Pennsylvania         RODNEY ALEXANDER, Louisiana
 STEVEN R. ROTHMAN, New Jersey      KEN CALVERT, California
 SANFORD D. BISHOP, Jr., Georgia    JO BONNER, Alabama
 MARION BERRY, Arkansas             STEVEN C. LaTOURETTE, Ohio
 BARBARA LEE, California            TOM COLE, Oklahoma          
 ADAM SCHIFF, California            
 MICHAEL HONDA, California          
 BETTY McCOLLUM, Minnesota          
 STEVE ISRAEL, New York             
 TIM RYAN, Ohio                     
 C.A. ``DUTCH'' RUPPERSBERGER,      
Maryland                            
 BEN CHANDLER, Kentucky             
 DEBBIE WASSERMAN SCHULTZ, Florida  
 CIRO RODRIGUEZ, Texas              
 LINCOLN DAVIS, Tennessee           
 JOHN T. SALAZAR, Colorado          
 PATRICK J. MURPHY, Pennsylvania    
                                    
                                    

                 Beverly Pheto, Clerk and Staff Director

                                  (ii)


                    DEFENSE APPROPRIATIONS FOR 2011

                                       Wednesday, January 20, 2010.

                        ACQUISITION CONTRACTING

                               WITNESSES

PAUL FRANCIS, MANAGING DIRECTOR, ACQUISITION AND SOURCING MANAGEMENT 
    TEAM, GOVERNMENT ACCOUNTABILITY OFFICE
MICHAEL GOLDEN, MANAGING ASSOCIATE GENERAL COUNSEL FOR PROCUREMENT LAW, 
    GOVERNMENT ACCOUNTABILITY OFFICE
BILL WOODS, DIRECTOR, ACQUISITION AND SOURCING MANAGEMENT TEAM, 
    GOVERNMENT ACCOUNTABILITY OFFICE

                  Chairman Murtha's Opening Statement

    Mr. Murtha. The hearing will come to order. We welcome the 
witnesses, and I want to say that the problem we have been 
having is the acquisition process. I don't say it is broken, 
but the bigger contracts that we have had, we have had some 
real problems with them. We talked a little bit before the 
hearing started about some of the protests that have been 
sustained.
    You have got to go into some detail with us about what you 
see if there is something we can do to help this situation. You 
made some suggestions that I would like you to make officially 
about the problems you see in this area so that we can try to 
resolve them from a fiscal standpoint.
    Mr. Frelinghuysen.

                     Comments of Mr. Frelinghuysen

    Mr. Frelinghuysen. Thank you, Mr. Chairman. Welcome, 
gentlemen.
    Would you like a motion, Mr. Chairman?
    Mr. Murtha. I would like a motion.


                    MOTION TO HOLD EXECUTIVE SESSION


    Mr. Frelinghuysen. I move that those portions of the 
hearing today which involve proprietary material be held in 
executive session because of the sensitivity of the material to 
be discussed.
    Mr. Murtha. All in favor will say aye. Without objection, 
aye.

                    OPENING STATEMENT OF MR. FRANCIS

    Mr. Francis. Thank you. Mr. Chairman, Mr. Frelinghuysen. I 
appreciate the opportunity to be here today to talk about a 
wide range of topics: weapons systems, contracts, workforce, 
bid protests. I have with me Mike Golden on my right, who is 
the head of GAO's bid protest unit. On my left is Mr. Bill 
Woods, who is a contracting expert. I think among us we must 
have pretty close to 100 years of experience.


                    PURSUIT OF VERY HIGH CAPABILITY


    I just have a couple of remarks to make in the beginning, 
and we will get very quickly to the questions. The condition 
that we have today has been decades in the making. I think in 
the area of weapons systems, we are looking at the effect of 
cumulative commitments to pursue very high capabilities, and we 
have accepted the high risk associated with those. We have also 
vastly expanded our capability to meet near-term commitments, 
but we have done that largely through contracting out for 
services.
    I think you could describe what we have been doing in the 
near term as institutionalizing expediency, and that is 
something that we have to look at.
    We have had, over time, the money and the flexibility to do 
so, but the question we ask ourselves today is, are we where we 
want to be? And I think the answer is, no, I don't think it is 
a sustainable path that we are on.
    If you look at weapons systems Mr. Chairman, cost growth 
and schedule delays associated with high-risk weapons are 
denying the warfighters the capabilities they need on time, and 
certainly in the quantities they need.


                         CONTRACTOR WORK FORCE


    When we have done contingency contracting and service 
contracting to expand our near-term capabilities, we have done 
so through the process of thousands of decisions. So what we 
have today is a very large contractor workforce that is largely 
been put together on an ad hoc basis. It hasn't been strategic 
at all.
    Today it is still hard for the Department of Defense to say 
how many contractors it has, where they are, and there are a 
lot of questions about what roles we play.
    Our own organic government acquisition workforce has stayed 
relatively stable in the past few years, and if you go back in 
history, has declined significantly.
    There is a move afoot to increase the acquisition 
workforce, but I think a key decision----


                     FEDERAL ACQUISITION WORK FORCE


    Mr. Murtha. Go over that again, because this committee has 
been stressing direct hires. It is cheaper, and the contracting 
has gotten out of control. So go over that one point again as 
you go along here.
    Mr. Francis. Sure. I think if you go back to the 1990s, the 
acquisition workforce was probably cut in half during that 
decade and there was a big movement to contract out for a lot 
of that activity.
    During the last 10 years, I think the workforce is down to 
around 130,000. I am trying to remember the numbers, but it may 
have been as high as 300,000 to 400,000 20 years ago. What we 
don't have a good number on today is how much that has been 
augmented by the contractor workforce in acquisition.
    But be that as it may, as we have hired more contractors to 
do work, our acquisition workforce has stayed the same. So our 
people are having to do a lot more oversight than they used to, 
and there is a real question there.
    Mr. Murtha. How do you define our acquisition workforce in 
the Defense Department?


                 KNOWLEDGE OF WORKFORCE CAPABILITY GAPS


    Mr. Francis. Defense Department, military and civilian.
    I think even more important, even as we are looking at 
increasing that workforce, the Department of Defense today does 
not really know the skill sets it needs in its acquisition 
workforce, so it doesn't really know what gaps are most 
pressing to fill. So as we in-source, it is hard to in-source 
smartness, so these are real challenges for the Department of 
Defense. It does not have good data on its own workforce.
    Another factor we have to consider is we are not going to 
have the money to sustain the way we have been conducting 
business over the last 10 years. So I don't think, again, we 
are where we want to be.


                   OPPORTUNITY TO IMPROVE ACQUISITION


    But I do think we are in a really great period of 
opportunity, and there is a lot of momentum for change. I think 
of a number of things. One is what the Congress has done with 
acquisition reform legislation and the Department of Defense in 
changing its policies. I look at what the President has done in 
his memo on contracting, and the tough decisions the Secretary 
of Defense has made on weapons systems.
    I also look at the continuity in acquisition executives 
from the last administration to this administration. I think it 
is unprecedented, and there is a level of experience there that 
I don't think we have had. We also have a QDR coming up as 
well, so there is a real opportunity and momentum for change 
here. I would say, having been around a fairly long time, there 
have been opportunities in the past that have been missed.
    Coming back to your point, Mr. Chairman, we have to think 
about programs that have gone wrong, and why they went wrong. 
If requirements were poorly conceived, perhaps too ambitious, 
then the subsequent acquisition program can't fix that. That 
acquisition program is going to be in trouble.
    If the acquisition program isn't laid out soundly, then no 
contracting type is going to fix it, so we have to go back and 
work it all the way through. It takes a lot of things to go 
right.
    Things that have been challenges in the past is when 
programs have come forward--we talked about Future Combat 
Systems--and don't measure up, yet the Department approves it 
and submits it for funding, and then it gets funding. We are 
actually reinforcing some of the things that we don't want to 
happen.
    So for us to capitalize on this opportunity that we have 
now, the key thing to sustain momentum is we have got to make 
sure our money decisions reinforce the practices and principles 
that we are espousing today. That is the most important thing 
for us.
    That is all I have to say in the beginning. We would be 
glad to answer any questions.
    [The statement of Mr. Francis follows:]

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                       AIR FORCE REFUELING TANKER

    Mr. Murtha. You go into some detail about the programs that 
have been overturned. For instance, you have got the refueling 
tanker. We have gone through this over and over and over again. 
What was the basic problem in overturning the tanker RFP?
    Mr. Francis. Okay, I will turn to Mr. Golden on the bid 
protest.

                          TANKER AWARD PROTEST

    Mr. Golden. In our written testimony, we identified six or 
seven major programs which were protested, and those cases were 
sustained. One of the common threads, I think, in all of them 
if you analyze it, is a situation where the agency sets out in 
their request for proposals certain ground rules, promises that 
they have made to the vendors. The vendors propose to those 
requirements. Ultimately, for reasons from our record we can't 
divine, the agency doesn't evaluate proposals consistent with 
those ground rules.

                            TRICARE PROTEST

    Some of the explanation may be with respect to 
requirements. But one of the examples we are talking about was 
TRICARE. In both TRICARE cases, where we sustained the protest 
and found in favor of the protester, there was a common issue 
and it involved how to evaluate the network provider discounts, 
which are discounts that the vendor negotiates. The company 
that ultimately gets the contract negotiates with doctors and 
the hospitals, and those discounts result in a lower overall 
health care cost.
    The agency basically promised to evaluate the network 
provider discount--which was a way to evaluate the savings--but 
had difficulty doing it and ultimately didn't really follow 
through in what they had promised in the solicitation. I am not 
sure why that happened, but clearly from an acquisition 
planning standpoint, it seems to me you have got to make a 
decision about what you are going to do with something like 
that.
    It is savings, and it is therefore something you want to 
consider. You have got to figure out where to consider it. Let 
people know, let the companies know where you are going to 
evaluate it so they can address it in their proposal. And then 
you have got to evaluate it and follow through.
    One of the reasons we sustained the protests and sent them 
back to the agency to take corrective action was to force it to 
determine how to evaluate that.

                 DEVELOPMENT CONCURRENT WITH PRODUCTION

    Mr. Murtha. You gave me some examples before the hearing 
started about programs where they started the production at the 
same time they started the research. Explain that to the 
committee and explain what we can do as a committee where we 
provide all the funding, so that doesn't happen in the future.
    Mr. Francis. Certainly. I think the examples we talked 
about, Mr. Chairman, were the B-1 bomber, going back a long 
time; the VH-71 Presidential helicopter and the littoral combat 
ship. I think in all three cases the Department of Defense made 
the start of development and the start of production decisions 
the same day.
    That is not a strategy for any program that requires 
development, by which I mean engineering and testing and 
proving out. It is not something that can work, because you 
can't work on a production design when you don't know if the 
basic design works. In the B-1, everything got done on time, 
but we had to do a lot of work afterward to bring that aircraft 
up to snuff. The VH-71 never was able to deliver, and there 
were a lot of requirements, increases, over/time, but it was 
not executable from the start even if there hadn't been any 
increases.
    The littoral combat ship the same way. When it got started, 
the yards that the contracts were awarded to didn't have any 
design capability. Yet the ship had to be designed and built at 
the same time. Not an executable strategy.

                     REQUIREMENT FOR TRAINED PEOPLE

    So getting to your question of what can we do about it, 
one, we have got to make sure the Department has the people 
with the technical skills who can recognize those requirements 
that are unachievable.
    You can do something like this as long as you are not 
developing a system. An example we have talked about was the 
MRAP vehicles.
    If they are off the shelf, you can go into production 
pretty quickly. But if you have to develop them, you have to 
develop first, then produce. So the Department needs the people 
to make sure that when programs are brought forth, that those 
schedules are executable.
    I think on your part, the obligation would be if they bring 
something forward that isn't ready, then you have to say no to 
the funding.

                        PRESIDENTIAL HELICOPTER

    Mr. Murtha. So if they come forward with a plan where they 
are going to research it and produce it at the same time, we 
should say, ``Wait a minute, you research it first.'' Always 
the problem we run into at the Defense Department, they have to 
have it now, there is this policy decision by the Defense 
Department, it is a national security issue.
    But we can deal with that. There are enough instances where 
it has cost so much more money, it hasn't worked out--and the 
VH-71 is a perfect example of that; if we stop at 22 aircraft 
as an example, where we had to stop it for a while, how do we 
measure that? We ask you guys to look at it or how do we 
measure when they come forward with both?
    I mean, our budget is $636 billion. You know, you lose 
sight. The VH-71, I admit I lost sight of the thing. I didn't 
realize it was escalating so much until somebody told me it was 
going to cost $500 million apiece. So how do we watch that?

                        KEY MILESTONE DECISIONS

    Mr. Francis. There are a couple of things, Mr. Chairman. 
Right now because of the legislation that has been passed over 
the past couple of years, there are two key milestone points in 
any kind of a developmental acquisition. I won't get into the 
details, but the milestone A and the milestone B decisions are 
key program start decisions. And the Department of Defense must 
now offer to the Congress certifications that certain things 
are done at those milestones. So that is one thing, to make 
sure those are done.
    The next thing is, anytime there is a new start proposed in 
the budget, that has got to get flagged and it has got to get 
reviewed, particularly on the Hill. And I think I would hold 
the Under Secretary of Defense for AT&L accountable for doing 
all the things they need to do for bringing that forward for 
funding.
    In the meantime, we look at all major acquisitions once a 
year in an annual report that we prepare for you. So we are 
keeping tabs on everything. And then we are in a position for 
individual programs where you want us to do detail work. We can 
put a team on that. So I think there are enough mechanisms out 
there to capture these programs.
    Mr. Murtha. Mr. Frelinghuysen.

                   ACQUISITION WORKFORCE PERSPECTIVE

    Mr. Frelinghuysen. From the outset you said that among the 
three of you, you have 100 years of experience. So I assume you 
have been involved in, shall we say, the life cycle of going up 
and down. Could you put a little more meat on the bones in 
terms of what did the landscape looked like when you first 
joined the ranks of those that you head up now where we are 
working--you sort of mentioned, were there 300,000 or 400,000 
people, both military and civilian that had these 
responsibilities?
    I remember reinventing government and as we go from 
administration to administration, everybody tries to put their 
mark on it. Now we are into sort of a direct hire mode, you 
know, more people that you need that are government employees. 
What was the picture like, let us say, 30 years ago? Because 
then you have to map it to far more complicated military 
equipment platforms. You point out it is about 150,000.
    What did it look like, let us say, 30 years ago?
    Mr. Francis. I think when you go back in time you did see a 
larger government workforce. And some things that you did see 
particularly was in the area of developmental testing, where 
the Department of Defense had a very big developmental test 
organization. And then when you did work in individual program 
offices, the military and civilian personnel there actually 
directly managed a lot of the testing and engineering.
    If you look in the Navy, the Navy was design----
    Mr. Frelinghuysen. And this is at a time, obviously, when 
we had a lot more military installations. This was sort of 
preBRAC, right?
    Mr. Francis. Yes.
    Mr. Frelinghuysen. Where, you know every State had some 
sort of an arsenal or a depot; is that correct?
    Mr. Francis. That is correct.
    Mr. Frelinghuysen. So you had quite a different landscape.
    Mr. Francis. It was, and there were a lot more programs, I 
think, at that time. But, for example, the Navy was designing 
its own ships. It would come up with the design by the naval 
architects, and then the yards would build to the designs. So 
over time we have made decisions through reinventing government 
and so forth to off-load.

                    COST OF OUT-SOURCING ACQUISITION

    Mr. Frelinghuysen. But not to irritate anybody. But to some 
extent if you closed down whatever was out there 30 years ago 
in the way of depots and different types of R&D facilities, you 
would have to call upon somebody to do that type of design and 
testing work; is that correct?
    Mr. Francis. Sure. The other thing that was going on was 
the belief that contracting out these functions would be less 
expensive than doing them in-house, so the thought was that it 
would be cheaper.
    I think the data supported that for the first 10 or 15 
years, but we found in the last 5 years, when we have looked at 
a particular case, we found that now contracting out can be 
more expensive than doing it in-house.
    But we can't go back to those days. We can't pull all that 
back in.
    Mr. Frelinghuysen. Most of that military-industrial complex 
is not there, either in our hands or even in the hands of many 
of the contractors that are doing the types of reviews that 
they have been doing; is that correct?
    Mr. Francis. That is right. So I think we are looking at a 
reality where we will have a blended workforce. We will have a 
mixture of contractor and government personnel. The question is 
where does the government really need to have its people to 
manage that kind of workforce?

                         FREQUENCY OF PROTESTS

    Mr. Frelinghuysen. Just one question. There is a public 
perception, we are lay people here, that there seem to be more 
protests than there used to be. Is that public perception 
correct or is it because--what's going on out there? I know 
sometimes people plan to protest even before anything is done.
    Mr. Golden. Well, I am not sure of that, but the protest 
numbers have been up the last 2 years. About 50 percent of the 
increase is related to expanded jurisdiction that we received 
with respect to task-order procurements. And we talk about the 
landscape change; in the mid-1990s, the government authorized 
IDIQs, Indefinite Delivery, Indefinite Quantity, multiple-award 
contracting, a more efficient method of contracting.
    Mr. Frelinghuysen. The government being, for example, us or 
our predecessors?
    Mr. Golden. That was part of the trade-off, I think, for 
the reduction in personnel that the Chairman was referring to 
before.
    But as a result, GAO lost jurisdiction of protests of task 
orders. That has now been restored because a lot of money went 
through the task orders in the last 4 or 5 years. And the 
jurisdiction has been restored for 3 years with a sunset 
provision. But that is a change. That accounts for virtually 50 
percent of the increase in protests.
    But having said that, the protests last year went up 10 
percent, and the year before went up about 10 or 12 percent.
    Before that, the numbers were down from the mid-1990s when 
there were, say, 3,000 protests. It is really at historical 
lows, relatively. I can explain a little bit why there were 
more protests then but it had to do with lack of debriefings 
and some other reasons which Congress fixed. Debriefings 
actually provided more information to the companies. They had 
less reason to protest, so it worked.
    But the rise is partly driven by the expanded jurisdiction 
that we have.
    Now, I will qualify also that the cases the Committee 
identified involve high contract values. And, frankly, I can 
remember in mid-1990s, we had our first $1 billion procurement, 
the Army radar procurement, and I didn't see one for another 7 
years or 8 years. Now we seem to be hitting a billion dollars 
more often than that.
    That is due to the nature of what the government is buying, 
the way they are procuring, the types of things, the bundling. 
So it is not unusual, but that is what we are seeing and those 
are the ones that we identified for the committee.
    Mr. Frelinghuysen. Thank you, Mr. Chairman.

           BALANCE BETWEEN DIRECT HIRE AND CONTRACT EMPLOYEES

    Mr. Murtha. I got the impression that there was a balance 
that you see between direct hires and contractors. Do we know 
what that balance is?
    Mr. Francis. We don't, Mr. Chairman. I don't think it is 
strictly numbers; I think it is skill sets and then roles. And 
I don't think the Department knows that yet either.
    Mr. Murtha. So you said earlier, one of the problems with 
contractors is they come and go, versus the direct hires; they 
gain experience and there is more stability. Is that accurate?
    Mr. Francis. I think that is accurate for civilian 
personnel. I think the military personnel rotate pretty 
frequently through the acquisition workforce.
    Mr. Murtha. Mr. Visclosky.

                       WORK FORCE SIZE AND SKILLS

    Mr. Visclosky. Thank you, Mr. Chairman. Now, on the issue 
of the size of the contracting force in your 2008 report, you 
talked about DOD's efforts to increase their in-house personnel 
by 20,000 in 2015. Would you want to comment, is that the right 
number, is it in the ballpark, and how are they proceeding? And 
the Chairman alluded to the skill sets, I believe, and your 
response did. Are the skills commensurate as opposed to just 
filling slots? Getting back to the balance, is that a good 
number?
    Mr. Francis. It is hard to say. I think there is a 
consensus, if you look at the studies, including the Gansler 
Commission, that the number needs to be higher. But what number 
is the right one, I don't know. The more difficult question is 
where do those 20,000 people go? And that is where we found the 
data that the Department has just isn't going to tell the 
Department where to make those investments. So I don't see 
where they have a good plan at this point for where to invest 
those people.
    I think on the one hand, you would want a really good 
inventory, but that could take years to do. I think the 
Department has to do enough analysis to find out what is really 
hurting it now. So, for example, I might suggest in program 
offices for really complex acquisitions, that might be a place 
where you want to look right away and do a skill set analysis 
there and then decide how much of that 20,000 to invest in 
those program offices. But I don't think the Department is in a 
position to know that right now.
    Mr. Visclosky. What analysis did they base that number on 
in 2008 or prior to that; do you know?
    Mr. Francis. I don't know.
    Mr. Woods. I am not real-sure where that number comes from 
either, except I think there is some desire in terms of the mix 
of contractor versus in-house personnel to return to a number 
that existed in the early 2,000s, to bring it back to the ratio 
that existed perhaps 10 years ago.
    Mr. Visclosky. Do you have a sense they are having success 
at matching up those skills? You talk about radar systems and 
things. If I was a contract officer, I would be dangerous. 
People with the requisite technical skills and business skills, 
are those matching up from your analysis today?
    Mr. Francis. I think the Department is just beginning to do 
that. We don't have any independent analysis right now to know 
how well they are doing the matching, but our understanding is 
they are just in the beginning stages of trying to decide that. 
And the Defense Acquisition University is playing a lead role 
in that.
    Mr. Visclosky. One last question. Then it is my generic 
sense that they do need additional people in-house before we 
start appropriating money for 2011. What are the best steps we 
can take to figure out a good solid number for 2011 with the 
commensurate skill sets?
    Mr. Francis. I think you would, one, have to press the 
Department on how it is going to go about the plan of hiring 
those people and what skill sets. Then you might think about 
what problems you think are most pressing that the Committee 
faces. So, for example, we are talking about weapons system 
cost growth and use of contract types. So you might think about 
cost estimating.
    For example, the Department, because of acquisition reform 
legislation, just created a new position, Director of Cost 
Analysis and Program Evaluation. They set up a new office, 
Director of Development, Tests and Evaluation, and an Office of 
Director for Systems Engineering, all really important skill 
sets.
    So I think perhaps the first question is are those offices 
going to be adequately supported with new people?
    Mr. Visclosky. Gentlemen, thank you. Mr. Chairman, thank 
you.
    Mr. Murtha. Mr. Kingston.

                               AWARD FEES

    Mr. Kingston. Thank you, Mr. Chairman.
    Mr. Francis, the GAO estimates that the DoD can save are 
those offices over $450 million a year, just in 2011 alone, by 
limiting second chances at award fees. Can you explain that to 
me?
    Mr. Woods. Do you mind if I take that? Sure, first of all, 
award fee contracting is a device to motivate excellent and 
superior contractor performance where the agency will decide on 
a base fee, often relatively low, such as 1 or 2 percent of 
estimated contract value, and then to incentivize good 
contractor performance, they will add a percentage on top of 
that, perhaps 5, 6, 7 percent, to result in a total fee.
    We started some work a few years ago to take a look at how 
that award fee process was really working, and we were not 
pleased with what we found.
    We found that officials were not tying those awards to 
actual performance; in other words, providing the award amount, 
even though performance by the contractor was not excellent but 
only merely satisfactory, or, in some cases, even 
unsatisfactory performance, and the contractor was still 
earning the award fee.

                           AWARD FEE ROLLOVER

    Mr. Kingston. But there is an OMB guideline on it----
    Mr. Woods. We have seen a series of improvements over the 
years since we started this work. And you mentioned the $450 
million figure; let me identify what that is. That deals with 
the issues of rollover.
    Rollover involves a situation where the government might 
decide not to grant the award fee in a given period because the 
contractor's performance didn't measure up to expectations; but 
they would allow, in a subsequent period, the contractor to 
earn that fee. So they would roll it over to a subsequent 
evaluation period, and a lot of people questioned whether that 
was really an effective mechanism.
    Now we have a regulation, an interim regulation issued by 
the administration, which prohibits the use of rollover.
    In our latest report on award fees, where we looked at DoD, 
we did identify that the Department, just on the eight 
contracts that we looked at, could have saved that $400 
million.
    Mr. Kingston. So has that then been addressed, or should 
this Committee put in some report language or something in the 
bill saying that we need to continue this?
    Mr. Woods. I think on that issue of rollover that we have 
reached a resolution of that with the new regulation, the 
interim regulation issued by the administration.
    Mr. Kingston. But the fee system as a general rule still is 
a productive incentive when used properly?
    Mr. Woods. Absolutely it is, yes, sir.
    Mr. Kingston. Thank you, Mr. Chairman.
    Mr. Murtha. Mr. Dicks.
    Mr. Dicks. No questions at this time.
     Mr. Murtha. Mr. Moran.

                   INHERENTLY GOVERNMENTAL FUNCTIONS

    Mr. Moran. Thank you, Mr. Chairman. If we are going to 
achieve that, the kind of balance that has been referenced, it 
seems to me the first step is to determine what is an 
inherently governmental function and what is not. There has 
been some rough assumption that we would know it if we looked 
at it. But DoD, for example, has contractors as the lead system 
integrator for ballistic missiles or the future combat system. 
It seems to me that is an inherently governmental function, 
which ought not to be performed by a contractor.
    For a lot of the cost estimating for a contract, 
contractors ought not be estimating what the government should 
be charging contractors. We have even read about situations 
where contractors were evaluating the bids of other 
contractors. So we have gone much too far in terms of what 
kinds of functions have been contracted.
    Now, it seems to me that one of the things that the 
subcommittee has emphasized is, it is time, not just for DoD, 
but governmentwide, for OMB to step in and give us a clearer 
definition of what is an inherently governmental function.
    Now, I get the sense that some of that is up to the program 
manager, and that is not good either because we have 
inconsistent policies which aren't even fair to the 
contractors.
    But I would like to know if you feel that OMB has made a 
reasonable effort or any effort in terms of better defining 
what is an inherently governmental function.
    Mr. Francis. Well, I am going to ask Mr. Woods to comment 
on that. But I would say there is pretty good guidance on 
inherently governmental. I think an area we find of increasing 
concern, however, is an area called closely supporting 
inherently governmental, which is a gray area which is not 
being very well managed.

                        LEAD SYSTEM INTEGRATORS

    Mr. Moran, you brought up a lead system integrator, which 
really is a category in and of itself. We have seen that in the 
Army, we have seen it in missile defense, we have seen it in 
the Deep Water acquisition, we have even seen it in one of the 
Navy acquisitions. And we haven't seen it work yet.
    So regardless of what the definition is of inherently 
governmental, I think when an acquisition is proposed using a 
lead system integrator, it is almost saying right up front the 
government doesn't have the capacity to manage this program. 
That is a red flag right at the beginning. I don't think it 
means don't do it. But if the government is trying to do 
something it can't manage, that is a risky project right off 
the start.
    Mr. Moran. The taxpayers are at risk as a result, I would 
assume. So in the absence of clear definitions in the areas 
that I think we would assume common sense would say this ought 
to be done by the government, it appears that they are taking 
the most simplistic approach and, for example, to in-source it, 
pulling back some of these functions.
    It appears that much of it is just on the basis of cost 
comparison. Of course, if that is the case, then you miss a 
lot. You miss elements of quality, of experience, various skill 
sets and so on. But isn't it true that much of the in-sourcing 
that is now being done to achieve that balance just seems to be 
on the basis of cost comparison rather than the ability to 
perform the mission most effectively?
    Mr. Woods. Do you mind if I take that?
    Mr. Francis. Sure, go ahead.

                   IN-SOURCING ACQUISITION FUNCTIONS

    Mr. Woods. We are still in, the early stages of in-
sourcing. That is a term that is of recent vintage. The 
Department of Defense, largely at the urging of the Congress, 
has been reviewing activities that it could possibly bring back 
in-house through in-sourcing. Cost is one issue, but there are 
many, many other issues that have to factor in there, expertise 
being one of the primary factors. But cost is on the list, but 
not a high priority item for in-sourcing.

                 ACQUISITION WORKFORCE DEVELOPMENT FUND

    Mr. Moran. Well, are they using that acquisition workforce 
development fund? That would enable us to better make these 
kinds of decisions. There is 700 million dollars in there.
    Mr. Woods. That was an initiative that the Congress passed 
a couple of years ago to actually create a funding stream to 
improve the contract workforce--the in-house government 
contracting government workforce.
    We have an effort underway in response to a congressional 
mandate to look at how the Department of Defense is using that 
fund. We look forward to reporting on that sometime this year.
    Mr. Francis. Mr. Moran, I think you raise a very good 
question. Even with the 20,000 positions, that would not be 
enough to replace all of the contractor people. So the 
government really has to look at those as investments. The 
government has to be really judicious about what highly 
leveraged positions it puts those people in and it just can't 
be a cost comparison.

                  FEDERAL ACQUISITION WORKFORCE SKILLS

    Mr. Moran. DOD needs to give us a better sense of what 
skill sets they really need. It is not just the numbers and the 
dollars, but we need to know where they are best needed. DOD 
needs to understand that, so they can use effectively the 
additional resources provided.
    You need to move on to other members, Mr. Chairman, tut 
thanks for having this hearing. This is a terribly important 
hearing. Thank you.
    Mr. Murtha. Mr. Rogers.

                        LEAD SYSTEMS INTEGRATORS

    Mr. Rogers. Thank you, Mr. Chairman, and thank you, 
gentlemen, for being here.
    Back to the management of these large programs, the lead 
systems integrator, did I hear you say that you have not found 
an instance where the lead system integrator project worked?
    Mr. Francis. That is correct. In every case that I am 
familiar with, the government decided to abandon that approach.
    Mr. Woods. That is true, not only with respect to the 
Department of Defense, but also in other agencies where we 
review the use of that concept like the Department of Homeland 
Security and its Secure Border Initiative and the Coast Guard's 
Deep Water program are also examples where it has not worked 
out as expected.
    Mr. Rogers. Well, I was going to bring those two up because 
I am familiar somewhat with them, more than others.
    What drives the government to go that route in the first 
place, the lead system?
    Mr. Francis. I will use the Future Combat Systems as an 
example. That was a case where what the Army wanted to do was 
extremely ambitious, technically. It also was trying to cut 
across its own organizational stovepipes, and it felt it did 
not have the people to manage that kind of a project with those 
skill sets.
    So it went to a lead system integrator in the belief that 
the lead system integrator would have the skills and be able to 
do the contract management needed to bring in the entire 
project.
    But I will go back to what I had said in the beginning, 
that the government was starting off with something it knew it 
couldn't manage, and so the lead system integrator was thought 
to be bringing something the government didn't have. But I 
think that is at the crux of what we are talking about. If 
those are the things the government wants to do, it should have 
the workforce to do them.
    Mr. Rogers. Yet the workforce is shrinking, correct?
    Mr. Francis. Certainly it has shrunk absolutely, and then 
relatively, to the volume of business.
    Mr. Rogers. Well, in the case of the border contract and 
Deep Water, Coast Guard; am I correct that the lead systems 
integrator in one or both of those cases also was a 
subcontractor, a contractor for services; is that correct?
    Mr. Woods. They did a substantial amount of the work. For 
example, in the Deep Water program, both of the contractors 
that formed the joint team that served as the lead systems 
integrator also got work--production work under that contract 
as well.
    Mr. Rogers. Is there a conflict of interest there?
    Mr. Woods. One could argue that there might be. There are 
provisions in place to prevent organizational conflicts of 
interest. Certainly the agencies in both of those instances 
would tell you that they reviewed and paid careful attention to 
the possibility that contractors may be favoring their own 
designs, their own capabilities, as opposed to others.
    Mr. Rogers. Surely not. Surely not.
    Mr. Moran. That would be wrong.
    Mr. Francis. Mr. Rogers, on the Future Combat System, they 
did try to set that lead system integrator up differently, 
where they went to a contractor, Boeing, whom in the beginning 
they prevented, precluded from winning any subcontracts or 
winning anything in production. So the idea was that Boeing was 
to be a developer but not a producer. Now, over time, the Army 
got away from that strategy, but up front they did recognize 
the organizational conflict of interest.
    Mr. Rogers. Well, are we still using lead systems 
integrators?
    Mr. Francis. I don't know of any projects right now where 
there is a lead system integrator.
    Mr. Woods. Nor do I. In fact, the Congress enacted 
legislation to greatly curtail the use of lead systems 
integrators a couple of years ago.
    Mr. Rogers. Do we need to do anything in this bill?
    Mr. Francis. I don't think so. I don't know of any projects 
that are operating that way. As I think Mr. Woods said, the 
legislation kicks in in 2011; am I correct?
    Mr. Woods. There are already prohibitions in place for new 
starts using the lead systems integrator.
    Mr. Murtha. The time of the gentleman has expired. Let me 
announce to the committee there are three or four votes. There 
will be a 15-minute vote, which always takes a half hour. We 
will adjourn when it gets down to 100, vote for two or three, 
and then come back.
    I think this is so important, I think it is necessary to 
come back if you folks have the time. We will be gone about 15 
or 20 minutes. We will adjourn and come right back when it gets 
down to 100, to give you some time after that.
    Ms. Kaptur.

               COST OF FEDERAL VERSUS CIVILIAN EMPLOYEES

    Ms. Kaptur. Thank you, Mr. Chairman. Welcome, gentlemen.
    Mr. Chairman, thank you for holding this hearing. I am a 
member of the Budget Committee, and we were struggling this 
morning with how to put the accounts of this Nation back in 
order. In looking at each department, I am struck by the fact 
that--how important Defense is, obviously; and by the 
authorization, Defense Authorization Act of 2008, the 
Department has to report back to Congress on various contracts 
that it has and the activities that it is performing.
    The only department that has reported back to us, according 
to the information I have, is Army, where one of the lessons 
they have learned, they say, is on average to take total cost 
of a Federal civilian employee as opposed to a contractor. The 
cost is $44,000 less costly. That is just one person, $44,000.
    When I look at page 13 of your report, you have a very 
instructive chart where you show the number, the share of 
programs that DoD administers in acquisition--in the 
acquisition unit, with cost growth of over 25 percent more than 
originally projected. Forty, over 40 percent every single year. 
That is nearly half. When one looks at the costs associated 
with that, they are staggering.
    Then you have a line there on total acquisition cost growth 
from 2003 going up from $183 billion to $296.4 billion. My 
question really is, if you look at the whole Department and 
what has happened with Defense spending, if we want to 
establish some fiscal rigor within this budget, how much could 
we save by in-sourcing? What is the whole?
    If Navy and if Air Force hadn't reported back to us, if we 
don't have accurate figures on contractors in the two war zones 
in which we are engaged, their costs versus costs of regular 
force, what data do you have that could instruct us as to how 
large this number potentially is of outsourcing versus in-
sourcing?
    Mr. Francis. Very hard to say, Ms. Kaptur. I have seen the 
$44,000 number. When we have done individual analyses we have 
found it is 25 percent cheaper to bring on a government person 
to do the job versus a contractor, which wasn't always the 
case.
    Now the question becomes, Does that scale up? In other 
words, could you bring in a government workforce at those 
savings? I think a lot of that would depend on what skill sets 
you are looking at.
    But I wonder--I think in the near term, when we expanded 
the contractor workforce, we did so by government people being 
hired by the contractors. So I have wondered personally. If you 
look at somebody who was working for DoD making $130,000 a 
year, then they retire, and if the government pays a pension, 
say, of $100,000 a year, and they work for a contractor and for 
the government to hire that contractor back, it is $200,000 a 
year. Now the government is paying the $200,000 plus the 
pension, $300,000 for somebody that used to cost them $130,000.
    So it hasn't been a good deal. But I don't know how to 
scale that up, to be honest with you, and say how much of that 
we possibly could save.
    Ms. Kaptur. Mr. Chairman, I just want to say that is my 
major concern. With the importance of the Defense budget as a 
percent of the entire Federal budget, it seems to me that we 
should be asking DoD to help get us these numbers so that we 
can make better choices here.
    Mr. Murtha. Well, if you remember, Ms. Kaptur, he said it 
would probably take 2 years to find out where the contractors 
are, what we need.
    I remember in Iraq we couldn't find out how many for months 
and months. The Under Secretary couldn't figure it out. No, 
this is a real problem.
    I don't even know where the 44,000 came from, because you 
have got people who are service contractors, who, you know, 
deliver, cut grass and things like that, versus somebody that 
is highly skilled. So I guess it is an average between each of 
them.
    Mr. Francis. Right. It is.
    Ms. Kaptur. Thank you.

                        UNDEFINITIZED CONTRACTS

    Mr. Rothman. Thank you, Mr. Chairman. Thank you for your 
service, gentlemen. Thank you for being here.
    Undefinitized contracts. This memo says that as of October 
2009, the DoD had 429 contracts that were undefinitized. Do you 
think that is an appropriate number? Do you think the DoD 
overutilizes these kinds of contracts?
    Mr. Francis. I will ask Mr. Woods.
    Mr. Woods. First of all, just for everyone's benefit, an 
undefinitized contract action is merely a technique, a 
mechanism, that an agency is permitted to use, not just DoD, 
but across government, when they are not in a position to fully 
define all of the terms and conditions of a contract but they 
need to move forward anyway. So they will enter into an 
agreement with the contractor without all of the details, 
including price, fully spelled out.
    Mr. Rothman. Do you think, though, that given all of the 
disappointments that everyone acknowledges, in terms of cost 
overruns and time delays, that undefinitized contracts with 
regards to DoD have been utilized properly, excessively, 
underutilized?
    Mr. Woods. What we have found is that based on the controls 
that are in place, they are required by regulation to 
definitize those undefinitized actions within 180 days. We find 
very, very often they fail to measure up to that. They are 
permitted to----
    Mr. Murtha. How can we assure that it falls within the 180 
days?
    Mr. Woods. How can we be sure?
    Mr. Murtha. Yes, how can this Committee be sure?
    Mr. Woods. Not sure. We can think about that and give you 
some guidance if you wish. But that requirement has been in 
place for a while. And every time we have looked at their use 
of undefinitized contract actions we consistently find that 
they fail to hit that.

                 COST GROWTH OF PRESIDENTIAL HELICOPTER

    Mr. Rothman. I won't pursue that because my Chairman has 
just asked the definitive question, and frankly we need you to 
come up with the answer.
    Also following up with something that the Chairman alluded 
to earlier, just for my edification, the explosion of costs on 
the President's helicopter, the President's future helicopter. 
How does something like that happen? How does it spin so wildly 
out of control?
    Mr. Francis. No pun intended.
    Mr. Rothman. No pun intended. We hope ours would spin under 
control, though.
    Mr. Francis. I think it goes back to signing a contract 
when you don't know enough. So I don't think the requirements 
and cost had any realism brought to them. So when we started 
the program, we had really no legitimate idea of how much that 
was going to cost. When the contractor got into it----
    Mr. Rothman. I apologize for interrupting because I know my 
time is limited. But are we going to make sure that doesn't 
happen again?
    Mr. Francis. Yes. There have been actions taken so that 
doesn't happen again, in terms of putting more people in place, 
more processes, the acquisition reform. But it is not a 
guarantee. So, again, when it comes here, you have to be 
looking at these things to see if they measure up to those 
principles.
    Mr. Rothman. Okay. But the lesson learned would be we don't 
allow carte blanche to the designers and the contractors to 
come up with something and guarantee we are going to pay for 
it.
    Mr. Francis. Right. There is a place to do that, and that 
is in science and technology. So you expect experimentation, 
discovery. Do it there. But when we go to a contract for a 
program, we need confidence.

                          ACQUISITION OF UAVS

    Mr. Rothman. Finally, real fast, UAVs and Predators. Is 
there any reason why any theater should not have as many 
Predators and UAVs at they want after all these years?
    Mr. Francis. I think there is no operational reason they 
shouldn't, other than you have to manage the airspace.
    Mr. Rothman. But in terms of acquisition?
    Mr. Francis. In terms of numbers, I think we should be 
giving the warfighter what they need. Part of the problem is 
there are now three variants of that aircraft, and the services 
are all pursuing different ones. DOD could do something more 
consolidated and get more aircraft out there for less money.
    Mr. Murtha. The time of the gentleman has expired.
    Mr. Dicks.

                         SOLE-SOURCE CONTRACTS

    Mr. Dicks. Let me ask you about sole-source contracts. Are 
we supposed to have these in here today? They would have caught 
me at the door--how often or how seldom do we use sole-source 
contracts?
    Mr. Woods. I don't have a precise number on that. It is a 
permitted technique. The overwhelming number of contract 
actions and contract dollars are awarded competitively every 
year. But there are circumstances where for a variety of 
reasons, urgency or other reasons, the Congress has provided in 
legislation that sole source contracts are permitted.
    Mr. Murtha. What is the largest sole-source contract ever 
awarded?
    Mr. Woods. I am not sure I know that, sir.
    Mr. Murtha. Will you find out for us?
    Mr. Francis. Okay, we will do that.
    [The information follows:]

    Response to Mr. Dicks' question: How often or how seldom does the 
government use sole source contracts?
    According to information available in the Federal Procurement Data 
System-Next Generation and USA Spending.gov, about 68 percent of 
obligations were under contracts awarded competitively in fiscal year 
2009. Of this amount, about 10 percent of obligations were under 
contracts awarded competitively where only one bid was received.
    Response to Mr. Murtha's question: What is the largest sole source-
contract?
    According to fiscal year 2008 obligations reported in the Federal 
Procurement Data System-Next Generation (FPDS-NG), the largest non-
competitive contract was awarded by the Army's Tank and Automotive 
Command (TACOM) to AM General for HMMWVs in November 2000. $4.2 billion 
was obligated under this contract in fiscal year 2008, and $14.3 
billion has been obligated over the life of the contract, based on the 
latest available information in FPDS-NG.

    Mr. Dicks. You could have a sole-source contract and still 
do a should-cost analysis so that the government is protected.
    Mr. Woods. Absolutely. And they are required to do that. If 
they don't have market forces at work that are providing some 
assurance that the price you pay is a reasonable price, they 
are required in most instances to get cost or pricing data and 
to do a very, very detailed analysis of what it is costing the 
contractor to produce the item, so that the government has some 
assurance that what it is paying is a fair price.
    Mr. Dicks. The contractor can help in this regard by 
allowing transparency into their cost structure, right?
    Mr. Woods. Not only can they help, they are required to 
help. They are required to produce that data for the 
government's analysis.

                            PROGRAM MANAGERS

    Mr. Dicks. I won't go any further. Just laying the 
groundwork, Mr. Chairman.
    Now, we have been doing this for many years, okay, having 
these hearings. I can remember the retired generals of the Air 
Force had their acquisition. Doesn't it get down to people, the 
quality of the program managers? I mean, you almost--every good 
program, you finally have had a good program manager; there has 
been good people at the contractor, they have had good 
management of the subcontractors.
    Then when you see a program that fails, normally the 
government had bad oversight and the program managers for the 
companies weren't very good and the subcontractors fail. I 
think a lot of this gets down to the quality of the people.
    And when we kind of diminish the value of people who were--
I can remember the Chairman of the House Armed Services 
Committee, on the floor of the House, calling these, the 
acquisition people, ``shoppers.'' He said these people are 
nothing but shoppers, and went ahead and cut 50 percent of the 
people out of the acquisition program in the 1990s.
    You know, to me, now we are still trying to recover from 
that, to get the people back, make sure they are well trained. 
What do you think? It says a lot about the people and the 
training of these people and the experience of the people that 
are running these individual programs.
    Mr. Francis. I would agree completely. In fact, even though 
GA is a critic and we find a lot of fault with programs, when 
we get in the program offices we generally find the people are 
outstanding.
    So I think you are exactly right. The people have to be 
high quality.
    And the second thing, Mr. Dicks, is we have to put them in 
a position to succeed. So a lot of times we take excellent 
people and we deal them a bad hand. So I don't think there was 
any program manager who could have made the Presidential 
helicopter succeed. Yet we put great people in those positions, 
and my concern in the long run is we grind them up, and you 
wonder why they would stay in the position.
    Mr. Woods. Could I add one thing to that? You mention 
quality o the people and that is absolutely correct; but it is 
also people with tenure. And what we found is that even good 
people are being moved around at a rate----
    Mr. Murtha. We are going to have to recess for about 15 
minutes. They have got 80 people that haven't voted.
    [Recess.]

                             COST ESTIMATES

    Mr. Dicks [presiding]. The Committee will come to order. 
The Committee will resume. On these cost estimates that we were 
talking about, you said that they are required to do these. 
This is done by the CAIG, the Cost Analysis Improvement Group, 
is that what they call it.
    Mr. Francis. Yes.
    Mr. Dicks. But is this just on the major weapons systems or 
is it on everything?
    Mr. Francis. There are independent cost estimates done on 
all weapons systems, but only the really big ones are done 
independently by the Cost Analysis Improvement Group. The other 
ones are done by the services, so the Army would have its own 
independent cost estimate, for example.
    Mr. Dicks. How accurate have these things been over the 
years?
    Mr. Francis. Well, the independent estimates are more 
accurate than the program office estimate, but we find they all 
underestimate by a significant amount. So even if every cost 
estimate aligned with the CAIG estimate, we would still have 
overruns.

                             COST OVERRUNS

    Mr. Dicks. And what are the major causes of the overruns?
    Mr. Francis. I would say, Mr. Dicks, some of the things 
that we talked about in the beginning: not knowing enough about 
the acquisition, not knowing enough about the technology and 
the systems engineering to make an informed cost estimate. And 
when you don't have the information, then you are more or less 
susceptible to optimistic assumptions. So I don't think it is 
discoveries that were unanticipated that occurred suddenly in 
the program. I think it is reality playing out.
    Mr. Dicks. A lot of times, do the departments just 
understate, knowing full well they only have so much money to 
go into the budget, and they are trying to make the budget fit 
with all the various systems? It is wishful thinking. It has to 
be, right? Isn't that part of this problem?
    Mr. Francis. I remember years ago talking to John Betti, 
who was one of the first undersecretaries of AT&L. And he said, 
in his view, programs didn't necessarily know a number was 
going to be X and then subtract from it. But he said many cost 
estimates are based on the hope of hitting seven home runs in 
the bottom of the ninth, very unlikely. But that pressure is 
there. And what we find is our budget process makes amends for 
that once a program is underway.
    Now, we have seen a couple of examples, Armed 
Reconnaissance Helicopter is one, where the unit cost was 
established by taking what the money was in the budget and 
dividing it by the number of units, and that is what we said 
the unit cost was. We have seen some instances of that.
    Mr. Dicks. Mr. Bishop.

             PAST PERFORMANCE INFORMATION RETRIEVAL SYSTEM

    Mr. Bishop. Thank you. I apologize. Has the question been 
asked about the Past Performance Information Retrieval System?
    Mr. Francis. No, it hasn't.
    Mr. Woods. Not today.
    Mr. Bishop. The history of prior performance obviously 
helps to inform contract award decisions, and that information 
is generally made available through the Past Performance 
Information Retrieval System. And your reviews of past 
solicitations indicate that factors other than past 
performance, such as technical approach or cost were the 
primary factors in awarding the contract, in making the 
decisions. And I understand that the doubts about the accuracy 
of the historical information and the difficulties in linking 
that past performance to specific new acquisitions causes the 
agencies to be reluctant to rely too much on past performance.
    So what I would like to know is what your assessment is of 
the utilization of that Past Performance Information Retrieval 
System and what actions DoD can take to improve the utility of 
it in the selection process, and whether or not funding is a 
function of that, if lack of discipline is a function of it. 
And how do you assure that contracting officers and managers 
enter the contract performance information correctly and in a 
timely manner into that information system?
    Mr. Woods. Sure. Let me respond to that if I can. We issued 
a report in April of last year that touched on a number of the 
issues that you've talked about. It is extremely important to 
have a good past performance information system because when we 
don't have a system that contracting officers can rely on, they 
are not going to use past performance as a discriminator in 
picking contractors. And what we were told is that the hallmark 
of a good past performance system is it has to be documented, 
the past performance has to be relevant, and the information 
has to be reliable. And in all three of those areas there were 
shortcomings, shortfalls in that information which led 
contracting officers to downplay the significance of past 
performance.
    Of the causes that you mentioned, I would say lack of 
discipline is critical. There was a requirement for documenting 
past performance, where contracting officers were required to 
go into the system after the completion of a contract and make 
judgments and assessments about how well the contractor did. 
And we found time after time those assessments were simply not 
done, particularly, when contractors performed on orders issued 
under the General Services Administration schedule program, 
which is for commodities and for commercial items and that sort 
of thing. The contractor officers were failing to enter that 
information into the system. There has to be more discipline in 
the system in order for it to work.
    Mr. Bishop. How do you assure that, that discipline?
    Mr. Woods. That has been an issue across the board. In some 
cases, it is workload where contracting officers need to get on 
to the next award so that wrapping up the paperwork on the 
prior contract doesn't have the same priority as moving on to 
the next award. We have got to find a way to instill that 
discipline into everybody in the system.
    Mr. Bishop. You think, it is workload, then that has to 
work do with the acquisition workforce and the contract 
officers, the number of them, and the additional 10- to 11,000 
that we are trying to put in place.
    Mr. Woods. That would help. It would help to have more 
people to share the ever increasing workload that we have seen. 
If we had more people doing those functions that would go a 
long way to easing some of that workload burden.
    Mr. Bishop. Do we have contractors performing those 
functions now?
    Mr. Woods. We have contractors that are supporting the 
acquisition function.
    Mr. Bishop. No, no, I mean doing the past performance 
evaluations.
    Mr. Woods. We didn't see contractors actually doing those 
assessments, but we saw contractors that were heavily engaged 
in various support functions at contract offices, and that 
caused us some concern.
    Mr. Bishop. So obviously, if we reduce the number of 
contractors and had that in-sourced, we could save a tremendous 
amount of money?
    Mr. Woods. Well, if we had more people doing the 
acquisition function on the government side and a more 
manageable workload, we would see greater attention paid to 
some of these details like completing the past performance 
information system assessments.
    Mr. Bishop. By the way, with regard to downsizing, making 
government smaller, that philosophy, when it comes to 
contracting and acquisition, in the Department of Defense, that 
has a reverse benefit in terms of not helping us efficiently 
and effectively manage the taxpayers' dollars.
    Mr. Woods. There were definitely some down sides to that 
downsizing of the workforce. You are right.
    Mr. Bishop. Thank you, Mr. Chairman.
    Mr. Dicks. Mr. Hinchey.

                           OMB CIRCULAR A-76

    Mr. Hinchey. Thank you, Mr. Chairman. As you know, there 
has been a lot of concern here about the Department of Defense 
use of the OMB circular A-76 process. And thanks to the 
chairman's leadership, we were able to include in the fiscal 
year 2010 defense appropriations bill a provision which 
effectively suspended the A-76 studies that started during the 
previous administration. So it is my understanding that now, 
all but two of those A-76 studies have been eliminated, been 
cancelled except for two that remain in the Navy. And I was 
just wondering if you could tell us what would be the process 
of those two that are remaining. Are they going to be 
cancelled? Does the Navy intend to finish those A-76 operations 
at some time in the near future, or do we know?
    Mr. Woods. We certainly can't speak to the Navy's intention 
with respect to those two. A couple of points though. One is, 
we have looked at that A-76 process over the course of many 
years, and we have identified a number of problems with how 
that is working. One of the problems is the lack of good data 
about the system. For example, you mentioned two remaining 
studies. We recently went into that system and found that there 
were actually seven that were in progress. The two that you 
mentioned in the Navy were included. But whether it is two or 
whether it is seven, DoD is going to have to make some 
decisions about what to do with those. Anecdotally, we can tell 
you that when we talked to the folks over at DoD, they haven't 
quite figured that one out yet.
    As you point out, there is legislation in the 
appropriations bill, and there also are various provisions in 
the defense authorization bill that speak to the issue about 
completing ongoing studies within a set period of time, about 
providing reports to the Congress on how they plan to approach 
the issue of outsourcing as well as in-sourcing. And frankly, 
they are still trying to match up all of those requirements and 
figure out where they stand with respect to specific ongoing 
studies.
    Mr. Hinchey. So you think that is the situation. They are 
not really certain where they are or what they want to do.
    Mr. Woods. Just anecdotally, from our discussion, they tell 
us that they are still looking at and figuring out what to do.
    Mr. Hinchey. I can understand that. The seven that you 
said, where are they?
    Mr. Woods. I am not sure of the exact locations. Three of 
them were in the Army, two were Navy. And this is a system 
called the defense commercial activities management information 
system, and it is available to folks that need to manage this 
process.
    Mr. Hinchey. Okay. On this issue a little bit further, the 
GAO issued two reports back in 2008, one for the Forest 
Service, one for the Labor Department. They were highly 
critical of the A-76 process, essentially saying that the costs 
of conducting the A-76 studies were understated, and that the 
savings that were alleged were overstated. GAO also offered a 
series of recommendations for reforming that A-76 process. So 
can you tell us, is it correct that the A-76 problems GAO 
identified and the recommendations that were put forth for 
reforms, that was offered by GAO are relevant for other 
agencies, including the Department of Defense? Or only the 
Department of Defense?
    Mr. Woods. The recommendations that we made in the two 
instances that you cited were specific to those particular 
agencies. But the problems that we found are by no means 
confined to those two agencies, and DoD is probably one of the 
best examples. They have the most experience of any other 
agency in conducting A-76 studies. They have been at it longer. 
Most of our work, frankly, over the course of the last couple 
of decades looking at the implementation of the A-76 process 
has been at the Department of Defense. So there is no question 
that they have lots of experience, but we have also identified 
lots of issues there as well.
    Mr. Hinchey. If the Department of Defense does, in fact, 
try to jump start those two A-76 studies after this suspension 
expires, if they do that, try to jump start that after the 
suspension expires, is there any indication that the Department 
of Defense will have corrected the problems that the GAO 
identified and that they will have begun at least to implement 
the reforms that were recommended by GAO prior to the award 
decisions?
    Mr. Woods. The suspensions that you are referring to I 
don't think were as a result of GAO recommendations. They were 
as a result of the legislation that the Congress enacted that 
told them they have to suspend A-76 activity. So it wasn't that 
we identified specific problems that needed to be corrected. It 
was that there was a prohibition on moving forward.
    Mr. Hinchey. It was the overall circumstances of that 
situation that were dealt with basically.
    Mr. Woods. Well, there are a couple of issues at play. One 
is the departmentwide bar on moving forward with A-76 studies. 
But there has also been some isolated instances where Mike and 
his team have identified flaws in specific studies, and made 
recommendations on how best to move forward, if they can, with 
those.
    Mr. Hinchey. What is your assessment, basically of the 
future of this? What is likely to happen? Do you have any idea?
    Mr. Woods. Well, Congress has been pretty direct over the 
course of the last couple of years, whether it is the 
authorizers or the appropriators, in making it very difficult 
for agencies to move forward, not just at defense but at 
agencies across the Federal Government.
    Mr. Hinchey. Okay. Well, thank you very much.
    Mr. Dicks. Mr. Frelinghuysen.

                        HISTORY OF A-76 PROCESS

    Mr. Frelinghuysen. A-76 has been around for a long time. 
How long has it been around?
    Mr. Woods. I believe since the mid-50s.
    Mr. Frelinghuysen. And how long have you been weighing in 
on the A-76 process? And I am sure it is since not 1950, but--
--
    Mr. Woods. Well, my memory does not go back that far, but 
probably in the 1960s and 1970s, DoD was moving forward for 
example, at the depots. The workload between the in-house depot 
workforce and contractors has always been an issue about what 
the right allocation is of workforce, and as long as that 
debate has been going on we have been in there providing 
oversight.
    Mr. Frelinghuysen. Part of it was to make sure that the 
work force was concentrating on what was actually important.
    Mr. Woods. Absolutely.
    Mr. Frelinghuysen. And somehow we got away from that. I 
know we are not going back to A-76 because people want to hire 
up people and promises have been made. But overall when it was 
initially rolled out and I have been around in government for a 
long time, people saw some pretty positive effects from it. So 
it is not an all-negative history. Would you agree?
    Mr. Woods. It is not all negative history. And, in fact, 
the Congress asked GAO to chair a panel looking at the A-76 
process back in 2001, and GAO spent a year doing that. We 
pulled in folks from all sides of the debate, from the unions, 
from the administration, from industry, and that is the story 
that we heard, that it is not all negative. There are positive 
aspects to that. It does force the government to sharpen its 
pencil and it forces contractors to sharpen their pencil when 
they have to compete for the work.
    Mr. Frelinghuysen. Well, that is sort of what the GAO is 
all about isn't it, sharpening the pencil, taking a look?
    Mr. Woods. We want to see the best bang for the buck, yes, 
sir.

         SKILL SETS NEEDED IN THE FEDERAL ACQUISITION WORKFORCE

    Mr. Frelinghuysen. Mr. Francis, you said earlier that we 
don't know what gaps there are. You referred to, either in 
response to Chairman Murtha or maybe in your general comments 
in Department of Defense work force. Could you sort of 
elaborate a little more on that.
    Mr. Francis. Sure. We have done some work to show that the 
Department of Defense does not know what skill sets it really 
needs in its acquisition workforce. And our understanding right 
now of the in-sourcing of the 20,000 people that will take 
place through 2015 is the department is inventorying what it 
has, looking at its current skill sets, where it has the work--
--
    Mr. Frelinghuysen. Are they actually doing it or have they 
outsourced a group to do it? I mean, I don't mean to be totally 
facetious here, but in reality, sometimes people are so busy 
over there doing what they are doing relative to the war they 
might well turn it over to somebody to do it.
    Mr. Francis. I don't know but I will hope that----
    Mr. Frelinghuysen. Might be good to get an answer from you 
on that.
    Mr. Francis. Yes. Okay.
    Mr. Frelinghuysen. So the gap issue.
    Mr. Francis. Yes. So they are working first on what they 
have now. The hard part is the normative, where do they need to 
be. And they haven't identified the skill sets they really need 
to have. So you need both pieces, where we are and what we need 
to be to identify those gaps. They are not there.
    Mr. Frelinghuysen. So you have gaps. We had somebody 
testify in here that it is difficult to find young men and 
women who are willing to go into, I won't say your line of 
work, but, you know, either to serve the military or to serve 
the military in a civilian capacity because they can do a lot 
better working at some other job. So they have not identified 
the skill sets they need, you are saying?
    Mr. Francis. Yes, that is correct.

         TIME LINE FOR HIRING ADDITIONAL ACQUISITION PERSONNEL

    Mr. Frelinghuysen. And so what would you anticipate would 
be the time period for them to be able to do that? Assuming 
they can incentivize these people to, shall we say, join up.
    Mr. Francis. Yes, they say they are going to bring the 
people in by 2015. I am not sure what a good number is, but 
you'd like to think they'd want to start doing that as soon as 
possible. So I would say, a reasonable period would be within a 
year they ought to be able to start identifying where they 
really need people. And speaking from experience at our own 
agency, we are getting a lot of people applying for positions. 
I would say 200 to one. For every vacancy there might be 200 
applications. So I actually think very positively about the 
government's ability to attract good people.
    Mr. Frelinghuysen. This is like our intelligence agencies 
who are now hearing because the economy is so poor so many 
people are out of work that they are getting a flood of 
applications. You don't think there will be any deficits in 
this area.
    Mr. Francis. I think the supply of talent is pretty good. 
And I think the economy is one thing, but we noticed in our 
agency, post-9/11, a lot more people want to do public service. 
So my prognostication would be optimistic.

                          WEB SITE FOR HIRING

    Mr. Dicks. Would the gentleman yield on that point? I 
happened to be involved in something in my State, and it was a 
company working with Lockheed, and one of the ways they hire 
these people is through a Web site. Are you familiar with this? 
The Defense Department now I am talking about.
    Mr.  Francis. Yes.
    Mr. Dicks. So if they get into a competition on who's going 
to do the website, how expensive it is, if they don't get this 
Web site set up, nobody gets hired. I mean, I think there is a 
huge number of jobs, probably in the acquisition area that are 
just not, nothing's happening. Do you have any evidence to 
that?
    Mr. Francis. We have got anecdotal evidence on how 
difficult it is, if you will, to try to work through a Web site 
like that and then how quickly the government can respond and 
going through applications and then setting up interviews. So 
the government has technically been slower in doing that than 
private industry.
    Mr. Dicks. And just so I can get another point on the A-76.
    Mr. Frelinghuysen. And of course we need to know who they 
are hiring up. I mean, obviously you just can't hire anybody 
up. You can get people planted in there.
    Mr. Dicks. But the situation here was that the company that 
was going to do the website got into a big dispute with OPM, 
the Office of Personnel Management and the Department, and it 
didn't happen. So instead of being set up and starting to bring 
people in for interviews, it went on for a year or so. So I am 
worried about the way they are handling this. You would think 
that the Defense Department would bring these people in and 
interview them. But instead they do it through a Web site. And 
if the website doesn't get set up you don't get the people.

                         A-76 POST AWARD AUDIT

    So that is worrisome to me. On the A-76, I agree with what 
has been said earlier, that there was a positive aspect of 
this. Now, way back, maybe 20 years ago, I put language in that 
said you would have to have a post audit on A-76. So if 
something was contracted out, then, a year or so afterwards, 
you'd go back and audit again when they started to renew these 
things to see if, in fact, you kept the prices down or did they 
start to escalate.
    And somehow this thing got knocked out at some point in the 
process. But I think, on the A-76, something like that, where 
you have a post contract audit to see whether, in fact, you 
achieved the savings you wanted or not. If you are going to do 
A-76 you've got to have something like that or else they'll bid 
low, get the work away from the government, and then they'll 
start increasing the cost of this in the out years. I yield 
back.
    Mr. Frelinghuysen. I yield back.
    Mr. Dicks. Mr. Moran.

                           OUTSOURCING QUOTAS

    Mr. Moran. Norm, you bring up a history that I think many 
of us have been involved in. One of the things that happened 
during the Bush administration, it wasn't just DoD, it was 
Interior Department, you will recall, that there were quotas 
given to managers, and that they would get a green light if 
they outsourced a certain percentage of their work force. And 
then they'd get a yellow light or a red light if they didn't 
and so on. The problem was it was a cookie cutter approach. 
Some missions are more inherently governmental than others. But 
there was this attitude that a certain percentage of your work 
force, whatever, that whatever skills and whatever the mission 
is, we want you to contract out. And so it was done in kind of 
a willy nilly fashion, it appeared. And so the Congress, I 
think it was a bipartisan vote, just put it into it. Now, we 
are in a situation where outsourcing, contracting out, we 
think, has gone too far in many agencies, particularly defense, 
and so now we want to do some more in-sourcing.

               HIRING CONTRACTORS TO BE FEDERAL EMPLOYEES

    Unfortunately, some of the initial reports I am getting is 
that, again, in some cases it is being done in an arbitrary 
fashion and there are some contracts, for example, where the 
contractor has invested a great deal of capital, has trained 
their personnel, has acquired quite a fair amount of 
experience, and has been judged to have been effective in 
carrying out the mission, but the program manager, wanting to 
comply with this new approach, goes in, hires the people that 
the contractor has trained, pulls them back into the 
government, pays them as much as they can, of course, but the 
employees have no option because they are told we are going to 
close down this program; we are bringing it in house. If you 
want to keep your job, you become a Federal employee.
    And we are bringing you on. So they bring on almost 
everybody, but you know, the top manager or whoever is the--
representing the contractor. That doesn't seem fair either. And 
it doesn't recognize the investment that some of the better 
contractors have clearly made in meeting the mission of the 
agency.
    So I want to get your reaction to that. Is this just 
anecdotal, or does this seem to also be taking place from your 
perspective and looking at the contracting community?
    Mr. Francis. Well, Mr. Moran, I haven't heard of that 
particular instance where the government might be taking 
employees back from a contractor.
    Mr. Moran. I have got dozens of examples that I have been 
told.
    Mr. Francis. Okay. But you raise a very good point, because 
what we have been talking about the past 20 years is the 
pendulum swinging one way to out source. We don't just want the 
pendulum to swing back to in source. It has to be thoughtful, 
and I think the guiding principle has to be what is in the best 
interests of the government. So it can't just be a numbers 
game. So the instances that you describe, these are things the 
government has to be thoughtful about because just taking what 
you said, you raised the question, is it in the government's 
best interest to reverse that?
    Mr. Moran. Yeah. Now, let me ask you----
    Mr. Dicks. Would you yield just for a second.
    Mr. Moran. Yeah, sure.
    Mr. Dicks. The thing that worries me is that the government 
could abuse its power here. This is what I saw in this website 
deal. This company, a small little company from Tacoma, 
Washington, spent a couple of million dollars getting ready to 
do this Web site, to hire, to bring all these people in. And 
they had already done it for the forest service down in 
Albuquerque, New Mexico and done it very successfully. But they 
got into a big to-do with the Federal agencies, and all of a 
sudden they cancelled. They just cancelled it. And so nobody 
gets hired. Nothing happens, and the government, I think, has 
abused this company. And I don't know what their recourse is, 
maybe a lawsuit or something. But again, we are not getting the 
people hired, we are not getting the work done.
    So I am concerned about this too and I am sympathetic with 
what the gentleman's saying because I had this example and it 
was very painful for this small company.
    Mr. Moran. And lawsuits take forever and the government can 
outlast any private contractor.
    Mr. Dicks. Right.

                          STUDY OF INSOURCING

    Mr. Moran. Let me now ask you about the study that DOD has 
done, maybe it is GAO has done it of DOD, in terms of the 
implementation of this in-sourcing initiative. I understand 
that there is a study that is ready. I don't know whether it is 
finalized. I don't think we have seen it on the subcommittee, 
but I would like to know what the status of it is and what is 
the content of it.
    Mr. Woods. The latest that we have seen, sir, is a December 
2009 report.
    Mr. Moran. That is pretty timely.
    Mr. Woods. It is a report by DOD. The House of 
Representatives required DOD to report on the status of their 
in-sourcing initiatives. We have seen that report. We haven't 
thoroughly analyzed all of its contents, but we are trying to 
stay as close as we can to that issue.
    Mr. Moran. Well, do you know, since you have seen it, what 
does it say just roughly?
    Mr. Woods. What I drew from it is they are trying to focus 
first on those positions that are inherently governmental, that 
never should have been contracted out in the first place. 
Secondly, they want to focus on positions that may not be in 
the inherently governmental arena, but are, nevertheless, 
critically important to keep in house to enable the government 
to have capacity to carry out its functions. And then thirdly, 
cost, to focus on areas where the government could save money 
by in-sourcing certain positions.
    Mr. Moran. Does our staff have a copy of that?
    [Clerk's note.--The report is printed at the end of the 
hearing.]
    Mr. Woods. We will certainly get that to the Committee. We 
will get that in PDF format and send it up.
    Mr. Francis. It has got some of our writing on it, is that 
okay?

                        CONTRACT AWARD PROTESTS

    Mr. Moran. All the better. As long as it is not profane or 
anything. One other question, Mr. Chair, if I could. One of the 
things that has troubled me, and it has been brought to my 
attention as well in this general area, is that when a smaller 
contractor wins a contract on the basis of, you know, quality, 
or oftentimes innovation, using new technology, they can do it 
less expensively, and they claim more effectively, they win the 
contract.
    If they win it against a larger contractor who was either 
bidding or has been the incumbent bidder, that contractor, if 
they are large enough, they have a whole division of 
litigators, so they automatically protest, knowing that the 
smaller contractor can only go so far in terms of litigating 
these protests and, oftentimes, will have to drop out, and 
then, in some cases, the larger contractors just bought them up 
or, you know, they will subcontract with you, we keep the 
profit, you do the work. And this is the best you can get. I 
know that has happened. Are there many examples of that, or is 
this just an aberration that I have seen more than once?
    Mr. Golden. From my standpoint in the protest area, we do 
get incumbents who protest to hold onto the contract.
    Mr. Moran. There are some that protest automatically.
    Mr. Golden. I can't say that. If you look through our 
database you'd see names of a wide variety. You wouldn't see 
that many repeats. There are companies that you would see 
repeating. But I don't think it is clear cut that that is going 
on, although I have to admit I have heard that once or twice as 
well, that a larger company just files a protest and they are 
hoping the small businesses----
    Mr. Moran. Well, there are some who are notorious among the 
industry.
    Mr. Golden. And the small businesses obviously don't have 
the same resources, but, on the other hand, the small 
businesses do have a tot of preferences, set asides, rules that 
help protect them and safeguard them in the Federal procurement 
system as well, which does help. But from our standpoint and 
obviously, from a protest standpoint, we haven't studied this. 
It is not something we necessarily know about. But I think 
ultimately, companies protest because it is in their interest, 
but they are also concerned about suing the customer. And it is 
something they think about before they protest because it does 
have implications ultimately on their relationship with the 
agencies, and so I think there's some balance. And I think the 
system is rational in that sense, at least I hope so.
    Mr. Moran. Okay.
    Mr. Dicks. Any other questions?
    Mr. Hinchey. Just one brief one.
    Mr. Dicks. Mr. Hinchey.

                   INCREASE IN CONTRACTS FOR SERVICES

    Mr. Hinchey. Just about 10 months ago, you did a report 
about goods and services and the amount of money that was being 
spent on goods and services and how, since 2001 to then, it had 
gone up by almost $400 billion. I think the number was $388 
billion. Was there an analysis as to what was causing that? Was 
it regarded as being significant? Was there any indication that 
that wasn't the only area where that cost had gone up so 
substantially? Were there other indications of anything similar 
to that?
    Mr. Woods. The biggest growth area we are seeing is 
services.
    Mr. Hinchey. Goods and services?
    Mr. Woods. The numbers that we always cite are total goods 
and services. But the differences that we are seeing over the 
course of 10, 15 years is the significant increase in services. 
That is where we are seeing most of the growth.
    Mr. Hinchey. Significant increase in services?
    Mr. Woods. Absolutely, sir. It used to be that not many 
years ago the government bought mostly hardware items and not 
services, and now we have seen that trend reverse where well 
over 60 percent of what the government buys is services and the 
rest are hardware items.

                    INCREASE IN CONTRACTING WORKLOAD

    Mr. Hinchey. The report said the number of government 
personnel remained the same in spite of the fact of that 
increase.
    Mr. Woods. That is right. And that causes a couple of 
problems. Number one is we have seen the number of contract 
actions, just the workload that they have to handle go up in 
the face of a relatively stable workforce. But secondly, the 
complexity of those acquisitions has increased because buying 
services is more difficult than buying hardware. On hardware 
items you've got a list of specifications, and it is relatively 
easy, or at least easier than buying services. Where you are 
trying to define the outcome that you are trying to achieve, to 
establish metrics for how you are going to measure the 
contractor's performance, it is much more difficult than buying 
goods.
    Mr. Francis. I am trying to remember which year it was, but 
in that data, at some point in the past few years, the amount 
of money we spent on services began to exceed what we spent on 
weapons. So the Department's major acquisitions are services.
    Mr. Hinchey. Well, that is interesting. I, mean, it is 
interesting that the amount of money that is being spent on it 
has gone up so much and what those services are would be an 
interesting piece of information. Why is that cost going up so 
much?
    Mr. Francis. Well, a fair amount of it is to build the 
capacity we needed for the near term operations in Iraq and 
Afghanistan. So a lot of that has been subcontracted. I think 
there's been a large growth in the LOGCAP contract. So a lot 
has been to augment the government's capacity to handle current 
operations.

            HIRING CONTRACTOR PERSONNEL AS FEDERAL EMPLOYEES

    Mr. Hinchey. Is there some progress being made to convert 
the kind of contractor personnel to government service?
    Mr. Woods. Well, there is the in-sourcing initiative that 
we have talked about where the Congress has directed agencies 
to, first of all, do inventories of their contractors to know 
what the contractor workforce is; and then secondly, to use 
those inventories to make the kinds of decisions you are 
talking about, of how many of those, if any, can we bring back 
in house.
    Mr. Hinchey. Okay. Thank you very much.
    Mr. Dicks. Mr. Frelinghuysen? All right. The Committee will 
stand adjourned. And we appreciate your testimony. We 
appreciate your good work.
    [Clerk's note.--Questions submitted by Mr. Murtha and the 
answers thereto follow:]

                        Undefinitized Contracts

    Question. To meet urgent needs, the Department of Defense can 
authorize contractors to begin work and incur costs before reaching a 
final agreement on the contract terms and conditions--known as 
undefinitized contract actions (UCAs), or letter contracts. As of 
October 2009, the Department of Defense had 429 contracts that were 
undefinitized. This type of contracting may not be in the best 
interests of the taxpayer since the contractors lack incentives to 
control costs while the contract is being definitized.
     In your experience, does the benefit of starting work 
sooner outweigh the loss of control experienced in a UCA?
    Answer. In some circumstances, a UCA is needed to meet an urgent 
need; in those cases, the benefits of starting work sooner may be in 
DOD's best interest (if appropriate attention is paid to definitizing 
as soon as practicable). However, based on some of the contract actions 
we have reviewed, it is not clear that DoD is using UCAs only in urgent 
situations. In some cases, UCAs may have been avoided with better 
acquisition planning. Further, we found that work is not always done 
sooner, as had been anticipated under the justification for a UCA. For 
example, in one case we reviewed, during the 13-month undefinitized 
period the contractor incurred costs equal to 2.4 percent of the total 
not-to-exceed amount, compared to the 50 percent obligated at award. In 
another case, permission was granted to obligate 100 percent of the 
not-to-exceed amount at award, however the contractor incurred costs of 
only slightly more than 1 percent of the not-to-exceed amount during 
the 11-month undefinitized period.
    Question.
     Does the shortage of contracting officers within the DoD 
impact the Department's ability to definitize UCAs?
    Answers. Contracting officers have pointed to numerous reasons for 
delays in definitization, and shortages in the acquisition work force 
are certainly among them. Contracting officers cite their heavy 
workloads, stating that once the UCA is awarded, they must turn to 
other pressing needs rather than going through the definitization 
process. They have also cited shortfalls in the government's ability to 
perform price analysis of contractor proposals. Other reasons cited for 
delays in definitizing UCAs include
         untimely or inadequate contractor proposals,
         the program offices' changing requirements (either 
        because the requirement was not adequately described when the 
        UCA was awarded or was subsequently changed after award), which 
        leads contractors to revise their proposals, and
         delays in obtaining necessary audits of contractors' 
        proposed pricing structure.
    Question.
     For cost type contracts, does DOD have a policy that 
encourages contracting officers to reduce fees when UCAs are not 
definitized in a timely manner, and thus unknowns become known and risk 
is lessened?
    Answer. DoD does have a policy requiring contracting officers to 
consider any reduced cost risk to the contractor for costs incurred 
during contractor performance before negotiating the final price. While 
there may be a requirement to consider reduced costs risks and make an 
adjustment in the profit or fee, if necessary, GAO recently reported 
that in about half the definitized UCAs we reviewed (both cost type and 
fixed price contracts)--34 of 66--contracting officers did not document 
consideration of any reduced cost risk to the contractor during the 
undefinitized period when establishing profit or fee negotiation 
objectives.\1\ For the 12 cost-plus-award fee contracts included in 
this review, we did not see any evidence in the contract files that 
there was any consideration of reduced cost risk. GAO noted that 
defense regulations do not provide a procedure for how to consider any 
reduced cost risk for cost-plus-award-fee type contracts and 
recommended the Secretary of Defense revise the defense federal 
acquisition regulation supplement (DFARS) to provide specific guidance 
on how to perform an assessment of any reduced cost risk for profit or 
fee during the undefinitized period for cost-plus-award-fee UCAs. DOD 
agreed with this recommendation and plans to revise the DFARS 
Procedures, Guidance, and Instruction to provide specific guidance on 
how to perform an assessment of any reduced cost risk during the 
undefinitized period for cost-plus-award-fee UCAs.
---------------------------------------------------------------------------
    \1\ GAO, Defense Contracting: DOD Has Enhanced Insight into 
Undefinitized Contract Action Use, but Management at Local Commands 
Needs Improvement, GA0-10-299 (Washington, D.C.: January 28, 2010).
---------------------------------------------------------------------------

Definitization Periods and Obligation Amounts on Undefinitized Contract 
                                Actions

    Question. The Federal Acquisition Regulation states that 
undefinitized contract actions (UCAs) should be definitized within 180 
days of signing the UCA or before completion of 40 percent of the work 
to be performed, whichever occurs first. However, many of these 
contracts are not definitized within the required 180 day time period. 
In some cases years have passed with still no definitization and 
oftentimes funds are obligated in excess of the limits normally 
allowed.
     What can be done to address these issues?
    Answer. GAO found that leadership emphasis and management insight 
into and oversight of the use of UCAs can be an important tool. DoD 
centralized reporting is a good step for senior leaders to gain an 
understanding of the extent to which UCAs are being used and when they 
are being definitized. GAO reported in 2007, that DoD does not track 
whether it meets the Federal Acquisition Regulation requirement to 
definitize letter contracts (one type of UCA) before 40 percent of the 
work is complete. To improve oversight of UCAs, GAO recommended at that 
time that the Secretary of Defense issue guidance to program and 
contracting officials on how to comply with the FAR requirement to 
definitize when 40 percent of the work is complete. DoD has proposed an 
amendment to the Defense Federal Acquisition Regulation Supplement 
(Case 2007-D011) to clarify that DoD letter contracts will be 
definitized using the DFARS procedures (before 180 days or prior to 50 
percent or more of the not-to-exceed amount is obligated) applicable to 
all other undefinitized contract actions. The rule was still pending as 
of January 21, 2010.

                      Sustained Contract Protests

    Question. It appears to this Committee that the number of sustained 
contract protests has increased in recent years. While certainly fair 
and equitable to the losing contractor, sustained protests have the 
effect of disrupting the fielding of critical weapons systems both in 
terms of cost and schedule.
     In your review and adjudication of acquisition contract 
protests, have you found a common thread or theme in the Department's 
awarding of these contracts that have caused the protests to be 
sustained?
    Answer. Generally, our Office sustains a relatively small number of 
protests a year. Last year, government wide, we sustained 18% of the 
fully developed protests that we decided on the merits. For DOD, in FY 
2009, we sustained 12% of the fully developed merit cases. The 
percentage of sustains decreases significantly if all protests filed, 
including the ones that are dismissed before a decision is issued, are 
counted. This means that agencies generally are doing a good job in 
conducting their procurements. However, there are areas where we 
continue to see errors being made. These include instances where 
agencies do not follow the ground rules of the competition set forth in 
the solicitation; do not adequately document their evaluations; hold 
misleading or inadequate discussions; or conduct the competition in a 
manner that is inconsistent among offerors. I should note that these 
errors exist across the government; no one agency or department 
experiences problems significantly more than others.
    Question.
     Is there any one cause that you have seen that seems more 
common when reviewing these acquisition contract protests?
    Answer. The one ground that appears to seem more common in GAO 
decisions, including the DoD procurements identified in the written 
testimony, is where the agency has not followed, or has misapplied, the 
ground rules for the competition as stated in the solicitation. Again, 
this observation applies to civilian as well as defense acquisitions 
protested.

                     Inventory of Contract Services

    Question. The law (10 U.S.C. 2330, Section 807 of the 2008 National 
Defense Authorization Act, and codified in 10 U.S.C. 2330a) requires 
the Secretary of Defense to submit to Congress (and make available to 
the public) an annual inventory of activities performed pursuant to 
contracts for services. The Department of the Army promptly complied. 
The Army examined (and continues to examine) the inventory of 
contracted services and has discovered inherently governmental 
functions which had been contracted out, and is now in the process of 
in sourcing these functions. One of the lessons learned thus far by the 
Army is that on average to total cost (pay and benefits) of a federal 
civilian is $44,000 less costly than a contractor. The Navy and Air 
Force supplied the inventory of contracted services in August of 2009 
and do not appear to have attempted to ascertain the inherently 
governmental functions being performed by contractors. The Defense 
Agencies have yet to comply with the law to supply an inventory of 
contracted services.
     What is your assessment of DoD's efforts to inventory 
contracted services and identify functions which are inherently 
governmental?
    Answer. We assessed the methodologies used by the Departments of 
the Army, Navy, and Air Force to compile service contract inventories 
for fiscal year 2008 and reported in January 2010 (GAO-10-350R) that 
the methodologies used by the military departments differed in key 
ways, including how each identified service contracts, which categories 
of services were included, and how each determined the number of 
contractor full-time equivalents. Further, we reported that all three 
of the military departments' inventories were missing data. We noted 
that the differences in each of the methodologies make comparisons 
across the military departments difficult and that DOD currently has an 
effort underway to develop a new, more consistent approach for 
compiling future inventories. We did not assess the methodologies used 
by the defense agencies to compile the inventories that the Office of 
the Deputy Under Secretary of Defense for Acquisition and Technology 
submitted in September 2009, nor did we assess DOD's efforts to use the 
fiscal year 2008 inventories to identify inherently governmental 
functions. Section 803 of the National Defense Authorization Act for 
Fiscal Year 2010 requires GAO to continue to report on DOD's service 
contract inventories in 2010, 2011, and 2012.

             Size of the Acquisition Contracting Workforce

    Question. The Department of Defense downsized the acquisition 
contracting workforce for many years without ensuring that it retained 
an adequate in-house workforce with the specific skills and 
competencies needed to accomplish the acquisition contracting mission. 
The DoD plans to more rigorously oversee additional hiring and to 
improve retention. In the Spring of 2008, the GAO reported on the 
Department's plans to convert 11,000 contractor personnel to government 
positions, and hire an additional 9,000 government personnel by 2015.
     Please assess the utility of the authority in Section 832 
of the National Defense Authorization Act, 2010, which provides for the 
use of certain unobligated balances to assist recruitment and retention 
of the DoD acquisition workforce.
    Answer. We have not evaluated the utility of the authorities 
provided in Section 832 of the National Defense Authorization Act for 
Fiscal Year 2010. We do note, however, that in order for such funds to 
be expended wisely, decisions on how and where that money should be 
spent need to be informed by data and analyses. As discussed in our 
testimony \2\ and our March 2009 report,\3\ DOD lacks key data and 
analyses on its acquisition workforce that could be used to inform such 
decisions and how best to focus resources on where the greatest 
benefits are expected.
---------------------------------------------------------------------------
    \2\ GAO, Defense Acquisitions: Managing Risk to Achieve Better 
Outcomes, GAO-10-374T (Washington, D.C.: Jan. 20, 2010).
    \3\ GAO, Department of Defense: Additional Actions and Data Are 
Needed to Effectively Manage and Oversee DOD's Acquisition Workforce, 
GAO-09-342 (Washington, D.C.: Mar. 25, 2009).
---------------------------------------------------------------------------

                     Contract Management Personnel

    Question. The Department of Defense's acquisition contracting 
workforce is losing many of its most talented and experienced personnel 
to retirement. In some cases the personnel that remain do not match up 
well with the types of major acquisition programs to be contracted.
     What is your evaluation of the personnel management effort 
in the DoD to find, recruit, hire, and develop the needed acquisition 
contracting professionals?
    Answer. According to DOD, its contracting workforce grew by almost 
6 percent from fiscal year 2008 to the end of fiscal year 2009. DOD has 
announced plans to further grow its contracting workforce over the next 
5 years.
    However, as we reported in March 2009, DOD lacks critical 
information in several areas necessary to assess, manage, and oversee 
its acquisition workforce, including those responsible for contracting, 
and ensure that its workforce is sufficient--both in numbers and skill 
sets--to meet DOD's current and future needs. We noted that DOD and the 
military services had a number of initiatives underway to respond to 
legislative requirements aimed at improving the management and 
oversight of its workforce, including developing data and processes to 
more fully assess the workforce. However, it was too early at that time 
to determine the extent to which these efforts will improve management 
and oversight of the workforce, but we questioned whether DOD would 
have the information necessary to assess and oversee the acquisition 
workforce.
    GAO is currently conducting a mandated review of the nature and 
efficacy of the acquisition workforce's training. The results of that 
review are expected by October 2010. Additionally, once DOD issues its 
human capital plan for its acquisition workforce, GAO will initiate a 
mandated review of that plan, which is to include recruiting and 
retention goals and specific strategies for developing and training the 
workforce. That review is to be completed 180 days after the plan's 
submission. These reviews will provide additional information regarding 
DOD's efforts to find, recruit, hire, and develop contracting 
professionals.
    Question.
     Are certification requirements rigorously enforced in the 
DoD?
    Answer. We have not assessed DOD's enforcement of certification 
requirements or whether the acquisition workforce is achieving the 
appropriate levels of certifications. Our mandated reviews of DOD's 
training for the acquisition workforce and the human capital plan for 
that workforce should provide additional insights regarding 
certification.
    Question.
     As private contractors increasingly are intertwined into 
the work that federal military and civilian personnel perform in 
managing acquisition contracts, how can the Department ensure these 
private contractors have adequate skills to meet the demands of the 
work?
    Answer. As we reported in March 2009, DOD has not collected 
departmentwide data on contractor personnel supporting the acquisition 
function, either in terms of their number or skill sets. While DOD has 
efforts underway to collect information on the number of contractor 
personnel supporting the acquisition function and to assess the 
competency of its government workforce, these efforts will not provide 
information on contractors' skills sets or detailed information on the 
services they perform to support the acquisition function. In response 
to our March 2009 recommendation that it collect data, such as that 
related to skill sets and functions performed, on contractor personnel 
supporting the acquisition function, DOD agreed that such data are 
needed but stated that establishing a contractual requirement to 
capture more detailed information on its contractor workforce would 
need to be carefully considered. Until DOD begins to collect and 
analyze data on the contractor workforce supporting the acquisition 
function, it is not clear how the Department can ensure that private 
contractors have the necessary skills to meet the demands of the work.
    It should also be noted that DOD has not determined as a whole what 
skills its total acquisition workforce--both government and 
contractor--need to meet the demands of the work both currently and in 
the near future. It is only by identifying its needs and conducting a 
thorough gap analysis of what it currently has versus what it needs 
that DOD can determine the appropriate size, composition, and skill set 
of its acquisition workforce.
    Question.
     How do you rate the Department's acquisition contracting 
work force in achieving the appropriate levels of skill certification?
    Answer. We have not assessed DOD's enforcement of certification 
requirements or whether the acquisition workforce is achieving the 
appropriate levels of certifications. Our mandated reviews of DOD's 
training for the acquisition workforce and the human capital plan for 
that workforce should provide additional insights regarding 
certification.

         Improvements in the Acquisition Contracting Workforce

    In a March 2009 report, the Government Accountability Office noted 
that since 2001, the amount contracted for goods and services had more 
than doubled to $388 billion but the number of government acquisition 
personnel was approximately stable. The Department of Defense (DoD) has 
begun an effort to strengthen the acquisition workforce by converting 
11,000 contractors to government positions in the near term, and by 
hiring an additional 9,000 Government personnel by 2015. However, the 
DoD lacks the information needed to identify capability gaps in the 
workforce which may impact mission accomplishment. The DoD has 
incomplete information on the skill sets of in-house personnel and the 
Navy, the Air Force and Defense Agencies have little information on 
contractor personnel. The Army has made progress in this area.
    Question.
     Please provide for the Committee an update on the progress 
being made by the DoD to convert contractor personnel to government 
service, and hire the additional 9,000 personnel?
    Answer. Given that DOD's efforts to convert and hire additional 
acquisition workforce personnel have only recently gotten underway, we 
have not had an opportunity to go in to assess what progress has been 
made. However, information regarding DOD's efforts to grow its 
acquisition workforce should be included in the department's human 
capital plan for the acquisition workforce. Once DOD issues its plan, 
GAO will initiate a mandated review of that plan is to be completed 180 
days after the plan's submission.
    Additionally, according to a December 2009 DOD report on the 
department's in-sourcing initiative, DOD plans to establish 
approximately 17,000 new manpower authorizations in fiscal year 2010 to 
perform work and services currently under contract. Of the 17,000, DOD 
estimated that approximately 3,400 authorizations will be for the 
acquisition workforce.
    Question.
     Has the DoD improved the collection and cataloging of 
information that is available on acquisition contracting personnel?
    Answer. We recently assessed DOD's efforts to collect and catalog 
information on the acquisition workforce for our March 2009 report. At 
that time, we reported that the department was hindered by the lack of 
key data to determine gaps in the number and skill sets of acquisition 
personnel. We noted that DOD had a number of initiatives underway to 
improve its oversight of the acquisition workforce. For example, DOD 
was conducting competency assessments to identify the skill sets of its 
current acquisition workforce. According to DOD, assessments have been 
completed for 3 of the 13 career acquisition career fields--including 
contracting--and there are plans to conduct assessments of the 
remaining career fields. However, while these assessments will provide 
useful information regarding the skill sets of the current in-house 
acquisition workforce, they were not designed to determine the size, 
composition, and skills sets of an acquisition workforce needed to meet 
the department's mission.

                           Types of Contracts

    Question. Some types of contracts are:
    Cost Reimbursement--Utilized for acquisitions when uncertainties in 
contract performance do not permit costs to be estimated with 
sufficient accuracy:
          Cost Plus Award Fee (CPAF)
          Cost Plus Incentive Fee (CPIF)
    Fixed Price--Optimal for acquiring commercial items or other 
equipment with reasonably definite functions or detailed 
specifications:
          Firm Fixed Price
          Fixed Price Incentive
     What are the advantages and disadvantages of each type and 
how frequently are they used?
    Answer. The principal advantage of cost-type contacts is that 
agencies can engage the services of contractors even though expected 
costs cannot be estimated with enough accuracy to permit the use of 
fixed-price arrangements. The main disadvantage of cost-type contracts 
is that the risk of cost growth is primarily on the government. In 
addition, this contract type requires that the contractor have an 
adequate system in place to accurately track contract costs.
    There are numerous variations of cost-type contracts. For example, 
a cost-plus- award-fee contact may be used when the government is 
seeking to motivate excellent performance by the contractor. It 
provides for a fee to the contractor consisting of a base amount (which 
may be zero) plus an award amount determined on the basis of a 
judgmental evaluation by the government. We have reported on the use of 
cost-plus-award-fee contracts at the Department of Defense, and have 
made several recommendations for improvement. Defense Acquisitions: DOD 
Has Paid Billions in Award and Incentive Fees Regardless of Acquisition 
Outcomes, GA0-06-66, December 19, 2005. In fiscal year 2009, the total 
value of award-fee contracts used by all federal agencies was more than 
$60 billion.
    Another example of a cost-type contract is cost-plus-incentive-fee. 
This type of contract provides for an initial negotiated fee, which is 
then adjusted later in accordance with a formula based on the 
relationship of total allowable costs to total target costs. The intent 
is to provide an incentive for the contractor to manage the contract 
effectively. In fiscal year 2009, agencies obligated more than $24 
billion on cost-plus-incentive-fee contracts.
    Fixed-price contracts are the lowest risk to the government because 
they place the cost risk on the contractor. This contract type best 
utilizes the basic profit motive of business enterprises. It is used 
when the risk involved is minimal or can be predicted with an 
acceptable degree of certainty.
    There are several types of fixed-price contracts. For example, a 
firm, fixed-price contract provides for a price that is not subject to 
any adjustment based on the contractor's cost experience in performing 
the contract. It provides maximum incentive for the contractor to 
control costs and perform effectively. It imposes the minimum 
administrative burden on the contracting parties. It requires 
reasonably definite functional or detailed specifications, however, and 
the contracting officer must be able to establish a fair and reasonable 
price at the outset of the contract. In fiscal year 2009, agencies 
obligated nearly $218 billion on firm, fixed-price contracts, by far 
the highest of all the contract types.
    Another type of fixed-price contract is fixed price incentive. This 
type of contract provides for adjusting profit and establishing the 
final contract price by a formula based on the relationship of final 
negotiated cost to total target cost. The final price is subject to a 
price ceiling negotiated at the outset. This type of contract is used 
when the contractor's assumption of a degree of cost responsibility 
will provide a positive profit incentive for effective cost control. In 
fiscal year 2009, agencies obligated just over $8 billion on fixed-
price-incentive contracts.
    Question.
     Is ``Best Value'' contracting more difficult to accomplish 
than ``Lowest Cost'' contracting?
    Answer. The Federal Acquisition Regulation defines best value as 
the expected outcome of an acquisition that provides the greatest 
overall benefit. An agency can obtain best value by using any of a 
number of source selection approaches. One approach is known as the 
tradeoff process, which permits an agency to make award to other than 
the lowest priced offer or. This process requires that the perceived 
benefit of a higher priced proposal that merits paying the higher price 
be documented in the contract file. Another approach is known as lowest 
price, technically acceptable process. Under this approach, proposals 
are evaluated for acceptability, but not ranked under the non-cost 
factors. No tradeoffs are permitted. These two differences may make the 
lowest price, technically acceptable approach somewhat easier to 
implement than the tradeoff process.

                Use of Commercial Acquisition Processes

    Question. Many urge that commercial acquisition practices be 
applied to DoD programs. However, the GAO conducted an analysis on 
Commercial and Department of Defense Space System Requirements and 
Acquisition Practices and concluded that there are key differences in 
requirements, and unique technology needs, that separate DoD 
acquisitions from the commercial sector. Further, the DoD has in the 
past tried to adopt commercial acquisition processes. In the mid-1990's 
the acquisition methodology called Total System Performance 
Responsibility (TSPR) was implemented on several major system 
acquisitions including Space Based Infrared Satellite (SBIRS) system 
and the Future Imagery Architecture (FIA) and has been subsequently 
blamed for severe cost overruns and schedule delays due to poor program 
oversight, poor cost estimating, overestimation of technology readiness 
and poor workmanship issues.
     When are commercial acquisition processes applicable to 
DoD system acquisitions?
    Answer. While commercial and DOD space system missions, 
requirements, and technology development differ in key ways, the 
commercial sector has adopted practices that could be applied to DOD 
space system acquisitions to improve cost, schedule, and performance 
outcomes. For instance, commercial firms define their requirements 
before initiating development programs, which helps to close resource 
gaps prior to program start and limit requirements growth. They tie 
contractor award and incentive fees to acquisition outcomes. They 
follow evolutionary product development approaches that enable them to 
achieve gradual gains in capability in relatively short periods while 
limiting the extent of technology risk they take on in any one 
increment. The commercial approach, overall, emphasizes gaining 
critical knowledge before making long-term commitments. GAO has already 
recommended these practices for DOD adoption. DOD, in fact, has 
recognized a need to adopt several of these practices and initiated 
efforts to do so.
    At the same time, some acquisition practices adopted by the 
commercial sector, including exclusive use of firm, fixed-price 
contracts and developing highly accurate cost estimates, may not be 
successfully applied to DOD in its current acquisition environment 
because of factors such as unique requirements and immature 
technologies at program start. For instance, the use of firm, fixed-
price contracts for procuring satellites would require a change in 
paradigm for DOD space programs--a much higher level of knowledge, 
including mature technologies and mature design--prior to the start of 
a program. Currently, however, DOD accepts greater technology and 
development risks and typically uses cost-reimbursement contracts for 
the first two satellites to be developed and produced. Some programs 
use fixed-price contracts for any additional satellites. Using fixed-
price contracts for the development phase of a program has not worked 
well, partly due to the high level of unknowns accepted at program 
start. In addition, other factors, such as launch delays, program 
funding instability, changing needs, and the diverse array of 
organizations involved in DOD space programs pose additional challenges 
to the use of firm, fixed-price contracts.

                               Award Fees

    Question. A recent GAO report on award fees indicate that from 2004 
to 2008 federal agencies spent over $300 billion on contracts that 
include monetary incentives for performance measured against subjective 
criteria. Office of Management and Budget (OMB) guidance on using award 
fees provides for limiting opportunities for earning unearned fee in 
subsequent periods; linking award fees to acquisition outcomes; 
designing evaluation criteria to motivate excellent performance; and 
not paying for unsatisfactory performance. Notwithstanding that the 
guidance has been incorporated into the Federal Acquisition Regulation 
(FAR), the application of this OMB guidance is uneven across federal 
agencies including the DoD. Most agencies continue to allow contractors 
second chances to earn fee. The GAO estimates that the DoD will save 
over $450 million through fiscal year 2010 by limiting second chances 
at award fee.
     What are the difficulties in linking fee to outcomes?
    Answer. There are two primary difficulties in linking award fees to 
acquisition outcomes. First, achieving desired program outcomes is a 
responsibility shared between DOD and its contractors. As a result, 
assigning responsibility for a particular outcome can be challenging. 
However, DOD's past difficulties in linking award fees to acquisition 
outcomes such as cost, schedule, and performance were largely based on 
poorly defined or inappropriate evaluation criteria. Criteria used in 
these evaluations did not consistently reflect a contractor's ability 
to achieve desired outcomes and the fees awarded were not always 
commensurate with a contractor's performance. For example, rather than 
focusing on acquisition outcomes, such as delivering a fielded 
capability within established cost and schedule baselines, DOD often 
placed emphasis on such things as the responsiveness of contractor 
management to feedback from DOD officials, quality of contractor 
proposals, or timeliness of contract data requirements. Current DOD 
guidance emphasizes the importance of linking award fees to outcomes 
such as cost, schedule, and technical performance, and establishes 
guidelines for evaluating contractor performance based on these 
outcomes.
    Question.
     How effectively do DoD organizations use award fee to 
motivate improved performance?
    DOD has not been able to measure how well its organizations use 
award fees to motivate improved performance. In 2005, we reported that 
DOD had not compiled data, conducted analyses, or developed performance 
measures to evaluate the effectiveness of award fees. DOD has taken a 
number of steps to address this issue. Since 2007, DOD has collected 
data on the use of award fees and identified a link between cost and 
schedule data and the amount of fee earned. However, it has not been 
able to establish metrics to evaluate the effectiveness of award fees 
in terms of performance. Additionally, individual programs are unable 
to determine the extent to which successful outcomes were attributable 
to incentives provided by award fees versus external factors, such as a 
contractor's desire to maintain a good reputation. In our 2009 report, 
GAO recommended that DOD form an interagency working group to determine 
how best to evaluate the effectiveness of award fees as a tool for 
improving contractor performance and achieving desired program 
outcomes. In response, DOD has partnered with the Departments of 
Energy, Health and Human Services, Homeland Security, and the National 
Aeronautics and Space Administration to form the Incentive Contracting 
Working Group to discuss how best to evaluate award fee data.

                         Sole-Source Contracts

    Question. We know that the government in some cases, based on 
analysis and justification, awards a sole-source contract.
      Under what circumstances is a sole-source contract 
appropriate?
     Answer. Acquisition regulations allow government agencies to 
contract without providing for full and open competition in situations 
where:
           only one responsible source is available and no other 
        supplies or services will satisfy, agency requirements
           the agency's need for the supplies or services is of 
        such an unusual and compelling urgency that the government 
        would be seriously injured unless the agency was permitted to 
        limit the number of sources from which it solicits
           the government needs to maintain a facility or 
        manufacturer in case of a national emergency or to achieve 
        industrial mobilization; to establish or maintain an essential 
        engineering, research, or development capability to be provided 
        by an educational or other nonprofit institution or a federally 
        funded research and development center; or to acquire the 
        services of an expert or neutral person for any current or 
        anticipated litigation or dispute.
           full and open competition is precluded by the terms of 
        an international agreement or a treaty between the U.S. and a 
        foreign government such as when a contemplated acquisition is 
        to be reimbursed by a foreign country that requires that the 
        product be obtained from a particular firm.
           a statute expressly authorizes or requires that the 
        acquisition be made from a specified source or through another 
        agency. Examples are statues pertaining to the Federal Prison 
        Industries; Qualified Nonprofit Agencies for the Blind or other 
        Severely Disabled; Government Printing and Binding; as well as 
        sole source awards under the Small Business Administration's 
        8(a) program (including 8(a) subsidiaries of Alaska Native 
        Corporations).
           the disclosure of the agency's needs would compromise 
        the national security unless the agency is permitted to limit 
        the number of sources from which it solicits bids or proposals.
           the agency head determines that it is not in the public 
        interest to provide for full and open competition for a 
        particular acquisition. In this case, Congress is to be 
        notified in writing of such a determination not less than 30 
        days before contract award.
    Question.
     Is it likely that a product that is procured under a sole-
source contract will cost more than if the contract was competed?
     Answer. Competition is the cornerstone of the acquisition system, 
and the benefits of competition in acquiring goods and services from 
the private sector are well established. Promoting competition--as 
opposed to sole-source contracts, where the government negotiates with 
only one source--can help save the taxpayer money, improve contractor 
performance, curb fraud, and promote accountability for results. 
Agencies are required to perform acquisition planning and conduct 
market research for all acquisitions in order to promote and provide 
for, among other things, full and open competition.
     However, GAO's work has identified situations where the government 
has not taken advantage of opportunities to compete work. For example, 
our recent review of federal agencies' use of blanket purchase 
agreements (BPAs) awarded under General Services Administration (GSA) 
Federal Supply Schedule contracts showed that agencies did not always 
consider more than one vendor when establishing these agreements. In 
some cases, the rationales for awarding a BPA directly to one vendor 
did not appear to conform to sound procurement policy. Furthermore, 
agencies rarely took advantage of additional opportunities for 
competition when placing orders under BPAs, reducing the potential to 
realize additional savings for the taxpayer. GAO recommended that the 
Office of Federal Procurement Policy (OFPP) take steps to clarify the 
circumstances under which it is appropriate to award a BPA using the 
limited source justifications of the FAR and consider opportunities for 
enhancing competition when placing orders. OFPP concurred with our 
recommendations and is taking steps to implement them. In other 
reviews, we found that the Army had issued contracts for security 
guards at U.S. military installations on a sole-source basis, and the 
State Department had issued a sole-source contract for installation and 
maintenance of security equipment at U.S. embassies worldwide. Based on 
GAO's recommendations, the contracts were put out for competition, 
which resulted in cost savings.
    Question.
     What is a No-Bid contract?
    Answer. This term is sometimes used to refer to a sole source 
contract. However, it is not an official term in acquisition 
regulations and is somewhat inaccurate since even in sole-source 
situations, the government solicits and receives a single bid or offer.

                        Requirements Definition

    Question. The Department of Defense and its contractors need to 
agree on and understand the acquisition objective and how that is 
translated into the contracts terms and conditions. Contracting 
officials write requests for proposals, analyze bids, and write 
contracts but everything the contracting official does depends on an 
accurate description of the requirement.
     To what extent is the difficulty and waste in contracting 
due to poorly defined requirements?
    Answer. Poorly defined requirements are a key factor leading to 
cost, schedule, and performance problems in major weapon programs. 
Programs often start system development with inadequate knowledge about 
the requirements and resources--funding, time, technologies, and 
people--needed to execute them. The knowledge gaps are largely the 
result of a lack of early systems engineering activities--requirements 
analysis, design, and testing--which is needed to ensure that a weapon 
system program's requirements are achievable and designable given 
available resources, such as technologies. Systems engineering helps to 
resolve performance and resource gaps before system development starts 
by either reducing requirements, deferring them to the future, or 
increasing the estimated cost for the weapon system's development. 
Because the government often does not perform the proper up-front 
requirements analysis to determine whether the program will meet its 
needs, significant contract cost increases can and do occur as the 
scope of requirements becomes better understood by the government and 
contractor.
    Question.
     Please discuss the desired balance between changing 
requirements in the contract and fielding an obsolete design. For 
example one of the reasons given for termination of the FCS Manned 
Ground Vehicles was that the vehicles had low ground clearance and flat 
bottomed hulls despite lessons learned in Iraq that a high ground 
clearance and v-hull offered much better force protection.
    Answer. DOD could achieve a better balance between changing 
requirements and avoiding obsolete weapon system designs by resisting 
the urge to achieve revolutionary and lengthy product developments and 
using an incremental approach to developing and fielding capabilities. 
In addition, constraining development cycle times to 5 or 6 years will 
force more manageable commitments, make cost and schedules more 
predictable, and facilitate the delivery of capabilities in a timely 
manner. To improve product development outcomes, a key best practice is 
to ensure that system requirements are properly defined from the outset 
and that significant requirement changes or additions are avoided after 
system development has begun. In the case of FCS, the Army never 
arrived at a stable set of system level requirements. The FCS 
development effort began about the same time as the start of the Iraq 
war and the escalation of improvised explosive device attacks. The 
manned ground vehicles were designed based on a concept where the 
information network was expected to compensate for the vehicles lower 
weight armor. Ultimately, the Secretary of Defense determined that the 
manned ground vehicles did not sufficiently incorporate lessons learned 
from operations in Iraq and the program was cancelled.

        Joint Capabilities Identification and Development System

    Question. In a September 2008 Report on Defense Acquisitions, the 
Government Accountability Office stated ``The Joint Capabilities 
Identification and Development System or JCIDS has not yet met its 
objective to identify and prioritize war fighting needs from a joint 
capabilities perspective. Instead, capabilities continue to be driven 
primarily by the individual services--which sponsored 67 percent of 
initial capabilities proposals submitted since 2003--with little 
involvement from the combatant commanders which are largely responsible 
for planning and carrying out military operations.''
     The Joint Capabilities Identification and Development 
System was implemented in 2003 and yet most acquisitions are still 
driven by the needs and perspectives of a single military department. 
Why has JCIDS not been more fully implemented?
    Answer. As we reported in 2008, the military services drive the 
determination of capability needs, in part because they retain most of 
DOD's analytical capacity and resources for requirements development. 
The functional capabilities boards, which were established to manage 
the JCIDS process and facilitate the prioritization of needs, have not 
been staffed or resourced to effectively carry out these duties. 
Furthermore, the Combatant Commands (COCOMs), which are responsible for 
carrying out military missions, have not played a significant role in 
determining requirements in part because they also lacked the analytic 
capacity and resources to become more fully engaged in JCIDS. GAO has 
recommended that DOD should determine and allocate appropriate 
resources for more effective joint capabilities development planning. 
DOD has taken steps to get the COCOMs more involved in determining 
requirements. For example, the Joint Requirements Oversight Council has 
been doing more to seek out and consider input from the COCOMs through 
regular trips and meetings to discuss capability needs and resource 
issues.
    Question. The GAO report indicated that the JCIDS process is 
lengthy, taking on average up to 10 months to validate a need. Why does 
the validation process take so long and what is the impact on the war 
fighter?
    Answer. The development of a capability proposal that may lead to a 
new major weapon system and its review and validation through the JCIDS 
process can take a significant amount of time. Prior to submitting a 
capability proposal to JCIDS, it can take a service sponsor a year or 
more to conduct the analyses necessary to support the proposal and get 
it approved within the service organization. A proposal submitted to 
JCIDS can go through several review stages before it gets validated or 
approved. Given the size and complexity and level of funding that will 
be committed to a major weapon system program, it may be warranted to 
invest considerable time and effort in developing and reviewing the 
capability proposal. However, a lengthy process to identify and 
validate requirements can undermine the department's efforts to 
effectively respond to the needs of the warfighter, especially those 
that are near term. In one case, the Army used extraordinary measures, 
going outside DOD's normal process to acquire and field the Joint 
Network Node-Network (JNN-N)--a $2 billion, commercial-based system 
designed to improve satellite capabilities for the warfighter. While 
JNN-N provided enhanced capability for the warfighter, the work-around 
allowed the Army to bypass the management and oversight typically 
required of DOD programs of this magnitude. Recently, DOD has taken 
steps to streamline the JCIDS process, by reducing the analyses 
required for submitting initial capability proposals, shortening the 
review cycle for proposals, and delegating approval authority for some 
proposals.

                    Acquisition Process Improvements

    Question. The acquisition environment in the DoD encourages 
ambitious product developments that include many technological 
unknowns. DoD organizations enter into weapons systems development 
contracts prior to having developed sound requirements. Programs are 
exposed to technology, design and production risk resulting in cost 
growth and schedule delays. Uncertainties about technology, design, 
requirements and cost lead to contract revision and eventual failure 
with wasted resources and delay in providing needed assets to the war 
fighters.
     Do you see any evidence that the Department is changing 
this practice for the better?
    Answer. Yes. In our 2009 assessment of selected weapon programs, we 
found that while most programs still proceed with far less technology, 
design, and manufacturing knowledge than best practices suggest, the 
amount of knowledge that programs attained by key decision points has 
increased in recent years. For example, since 2003, there has been a 
significant increase in the percentage of technologies demonstrated in 
at least a relevant environment by the start of system development. 
Further, all five programs in our assessment that entered system 
development since 2006 reported that all their critical technologies 
had at least been demonstrated in a relevant environment, in accordance 
with the DOD and statutory criteria.
    In addition, DOD has revised its acquisition policy and Congress 
put in place statutory requirements to improve the knowledge that 
weapon programs must have before they begin, such as more robust 
systems engineering, and cost and technology assessments. If DOD 
follows the letter and spirit of these reforms, they should increase 
the chances of weapons programs being completed on-time and at the 
anticipated cost. Specifically, DOD's December 2008 revision to its 
acquisition policy increased the rigor and discipline expected upfront 
and throughout the acquisition process. Key elements include the 
following:
           A mandatory Materiel Development Decision for all 
        programs, regardless of where they intend to enter the 
        acquisition process. This review is designed to ensure programs 
        are based on approved requirements and a rigorous assessment of 
        alternatives.
           A requirement for programs in the technology 
        development phase to implement acquisition strategies with two 
        or more competing teams producing prototypes of the system or 
        key components. This should help to reduce technical risk, 
        validate designs and cost estimates, evaluate manufacturing 
        processes, and refine requirements.
           An additional milestone decision authority 
        assessment of program progress at preliminary design review 
        (PDR). PDR is an important early systems engineering event that 
        informs requirements trades, improves cost estimation, and 
        identifies remaining design, integration and manufacturing 
        risks.

             Contract Closeout and End of Production Costs

    Question. Several Air Force aircraft procurement programs (F-22 and 
C-17) are nearing the end of their production run at the same time. In 
examining the possibility of closing the production line, an 
interesting contract clause has come to light. These contracts contain 
a clause that takes effect if the ordered quantity drops below a 
certain level or if the ordered aircraft are anticipated to be the 
final aircraft ordered. These costs (referred to as ``tail-up costs'') 
are pre-negotiated well before the end of the production run, seemingly 
before the actual costs would even be known. The contractor states that 
these costs are in place to offset the impact of lower aircraft 
quantities moving through the production line.
     The Committee has recently been made aware of a clause in 
aircraft procurement contracts referred to as ``tail-up clauses'' that 
are in place to cover reduced or final production lots. During reviews 
conducted by your agency, do you come across this type of clause 
frequently? How widespread is the use of this type of clause?
     In your opinion, does it make sense to put a price tag on 
rate impact well before the actual cost of any reduced production 
quantity may be known?
     Would it not make more sense for the cost of any reduced 
production quantities or end of production costs be negotiated at the 
same time those production lots are negotiated instead of years ahead 
of time before actual costs are known?
     What explanation was given by the Department of Defense 
during your reviews for why they structure procurement contracts in 
this manner?
    Answer. We have conducted extensive reviews of aircraft programs 
over many years, including the F-22 and C-17, but we have not evaluated 
``tail-up'' clauses in connection with those reviews. Our understanding 
from program officials, however, is that although the F-22 multiyear 
contract contained a tail-up clause, the clause was not invoked because 
the Air Force is proceeding with the next lot of aircraft. The 
officials told us that the contract for that lot does not contain a 
tail-up clause. For the C-17 program, officials told us that the agency 
is still in negotiation with the contractor.
    Our understanding is that tail up clauses may operate in a manner 
very similar to termination clauses in multiyear contracts. A multi-
year contract is used to purchase supplies or services for up to 5 
program years. Multiyear contracts typically are used in some of the 
larger programs, such as the F-22 and C-17. Performance during the 
second and subsequent years of a multiyear contract is contingent upon 
the appropriation of funds, and may provide for a cancellation payment 
if appropriations are not made. The cancellation payment is established 
at the start of the contract, and must be reduced each year in direct 
proportion to the remaining requirements. The Federal Acquisition 
Regulation specifies the types of costs that should be included in a 
cancellation payment.

                   Rapid Acquisition of MRAP Vehicles

    Question. On October 8, 2009, Mr. Michael J. Sullivan, Director, 
Acquisition and Sourcing Management, Government Accountability Office, 
and one of our witnesses today, testified before the House Armed 
Services Committee, Defense Acquisition Reform Panel on the tailored 
acquisition approach used to rapidly acquire and field MRAP vehicles. 
Mr. Sullivan briefed that, the factors contributing to success in the 
MRAP program that may be transferable to other programs were: (1) use 
proven technologies, (2) keep requirements to a minimum, (3) infuse 
competition, and (4) keep final integration responsibility with the 
government.
     Please comment on the use of proven technologies. 
Specifically, describe the balance that the program must achieve 
between including the latest technology and using proven technology.
    Answer. We have long advocated as part of our best acquisition 
practices that proven technologies are a key element to successful 
acquisition programs. We do not deny that this is a conservative 
approach and by using it, an acquisition program may not be able to use 
the latest technologies. However, the latest technologies tend to be 
less mature. This presents problems for acquisition programs because 
the pace of technological maturity is often unpredictable, and maturing 
technologies to acceptable levels can take much longer than originally 
anticipated. Furthermore, starting a program without proven 
technologies almost always results in cost and schedule problems later 
in the program. When the Army launched the Future Combat System 
program, Army officials wanted technically sophisticated systems to 
deliver desired performance characteristics. DOD approved the FCS 
program for system development in spite of the immature technologies. 
The Army believed it could mature all FCS technologies to Technology 
Readiness Level 6 in three years. This did not happen. It took the Army 
six years and an estimated $18 billion to mature FCS technologies to 
the point where they were ready to be incorporated into an acquisition 
program. Due to the FCS termination, it is uncertain when or if many of 
these technologies will be incorporated into fieldable systems. We also 
suggest that the better long term approach would be to adopt an 
incremental development strategy where the first increment would be 
designed to be readily upgradeable as more advanced technologies are 
matured.
    Question.
     Discuss the strategy of having multiple prototype vehicles 
and multiple vendors selected to produce the vehicle.
    Answer. According to the Office of the Under Secretary of Defense 
for Acquisition, Technology, and Logistics, lessons of the past, and 
recommendations of multiple reviews, emphasize the need for, and 
benefits of quality prototyping. During development, teams should be 
producing detailed manufacturing designs--not solving myriad technical 
issues. An acquisition strategy involving multiple prototype vehicles 
and multiple vendors has the advantage of reducing technical risk, 
validating designs, validating cost estimates, evaluating manufacturing 
processes, and refining requirements. A goal for development efforts 
should be a working relationship between government and industry that 
demonstrates key knowledge elements that can inform future development 
and budget decisions. This key knowledge reflects knowledge-based 
acquisition elements that GAO has promoted for years and that serve as 
key enablers for the best practices used by successful commercial 
companies.

                 TRICARE Contract Recompetition Protest

    Question. The following errors were cited as the basis for GAO 
sustaining the protest of this contract award:
    The Department of Defense failed to responsibly evaluate the 
awardee's past performance information as contemplated by the 
solicitation;
    The Department of Defense failed to perform a reasonable price/cost 
realism assessment, and failed to consider, as part of the technical 
evaluation or best value selection decision, the cost savings 
associated with the protester's proposed network provider discounts; 
and
    DOD failed to consider, in light of the agency's obligation to 
avoid even the appearance of impropriety in government procurement, 
issues stemming from the awardee's use of a high-level TRICARE 
Management Agency (TMA) employee in the preparation of its proposal, 
where the record demonstrates that this individual had access to the 
protester's non-public proprietary information.
    What was the basis for sustaining the protest in TRICARE Region 
North?
    Answer. As reflected in our decision, B-401652.3, B-40165425, we 
sustained the protest on a number of grounds: the agency performed a 
flawed past performance evaluation, price realism evaluation, risk 
assessment, and failed to adequately consider network provider 
discounts.
    Question. What was the basis for sustaining the protest in TRICARE 
Region South?
    Answer. As reflected in our decision, B-401652.2, B-401652.4, B-
401652.6, we sustained the protest because the agency failed to 
adequately consider network provider discounts.
    Question. What was the basis for sustaining the protest in TRICARE 
Region West?
    Answer. A protest was not filed at GAO concerning the West region; 
however, there was a protest filed directly with the agency.
    Question. How long do you estimate it will take for DOD to resolve 
these protests?
    Answer. The length of time to implement corrective action depends 
on a variety of factors, including the complexity of the procurement, 
the urgency of the needed services, and internal agency decisions. We 
do not have any information on the length of time that it will take DOD 
to implement corrective action in response to the sustained protests.
    What are the time frames for determining what skill sets DoD has in 
its acquisition workforce?
    DoD has a competency assessment initiative underway that is 
intended to define the critical skills and competencies of its 
acquisition workforce. The assessments consist of five phases--from 
identifying competencies for successful performance to assessing the 
proficiency of career field members against each of the field's 
competencies. To date, assessments have been completed for 3 of the 13 
acquisition career fields. Specifically, over 20,000 members of the 
contracting career field have completed assessments. In addition, 
assessments based on a statistical sample, have been completed for the 
program management and life cycle logistics career fields. Competency 
assessments for two additional career fields--(1) System Planning, 
Research, Development and Engineering and (2) business (cost 
estimating, and financial management) are projected to begin in spring 
2010. The start of these assessments was placed on hold to allow 
completion of DoD survey quality and process reviews. Upon completion 
of these reviews DoD will update its schedule for completing 
assessments and has committed to providing the updated schedule to us 
as soon as available.
    Who is conducting the competency assessments of DoD's acquisition 
workforce? What role if any do contractors have in conducting the 
assessments?
    DoD's acquisition workforce competency assessments are being 
conducted under the direction of the Director, Human Capital 
Initiatives (HCI) of the Office of the Under Secretary of Defense (USD) 
for Acquisition, Technology, and Logistics (AT&L), who also serves as 
the President of the Defense Acquisition University (DAU). The Center 
for Naval Analysis (CNA), a Federally Funded Research and Development 
Center, provides support to DoD's efforts. According to DoD, CNA staff, 
which include technical experts on organizational behavior and 
competency management, provide technical and process support for both 
updating the models and conducting assessments. However, it is the 
responsibility of senior DoD functional leaders, appointed by the USD 
(AT&L), to ensure that the competency models are updated and workforce 
members, through the assessment process, provide inputs on proficiency, 
frequency, and mission criticality of competencies.
    How many A-76 competitions are in progress and what are the 
locations of the competitions?
    At the time of our hearing, January 20, 2010, there were seven A-76 
competitions being reported as in progress in the DoD Commercial 
Activities Management Information System. Two were located in Fort 
Jackson, one was located at Fort Benning, one was located in Puerto 
Rico, and three were at multiple locations. A current update of the 
data on March 2, 2010, shows only two A-76 competitions, both being 
conducted by the Navy and involving multiple locations, reported as in 
progress in the DoD Commercial Activities Management Information 
System.
    How can Congress get DoD to comply with the 180-day definitization 
requirement for UCAs?
    As previously noted, our work has shown that contracting officers 
have pointed to numerous reasons for delays in definitization. 
Contracting officers cite their heavy workloads, stating that once the 
UCA is awarded, they must turn to other pressing needs rather than 
going through the definitization process. They have also cited other 
reasons such as shortfalls in the government's ability to perform price 
analysis of contractor proposals. Continued congressional attention to 
enhancing the size and capabilities of the defense acquisition 
workforce would help to address these issues.
    However, we have found that management attention and oversight, 
from DoD to the local command level, also can be effective in managing 
the use of UCAs. For example, we found a contracting command 
emphasizing timely definitization by decreasing the 180-day requirement 
for definitization to 150 days. According to local command officials, 
if 150 days from UCA award is surpassed, management expects continuous 
updates on the status of definitization.
    [Clerk's note.--End of questions submitted by Mr. Murtha.]
                                      Wednesday, February 24, 2010.

                      COMBAT AIRCRAFT REQUIREMENTS

                               WITNESSES

REAR ADMIRAL DAVID L. PHILMAN, U.S. NAVY, DIRECTOR, AIR WARFARE 
    DIVISION
MAJOR GENERAL DAVID J. SCOTT, U.S. AIR FORCE, DIRECTOR, OPERATIONAL 
    CAPABILITY REQUIREMENTS, DEPUTY CHIEF OF STAFF FOR OPERATIONS, 
    PLANS AND REQUIREMENTS

                      Opening Remarks of Mr. Dicks

    Mr. Dicks. The committee will come to order.
    This is maybe a little bit out of sync here, but I just 
would like us to have a moment of silence in remembrance of the 
chairman, Mr. Murtha.
    [moment of silence.]
    Mr. Dicks. Thank you.
    This morning the committee will hold an open hearing on the 
state of the Defense Department's combat aircraft programs. We 
are pleased to welcome Rear Admiral David L. Philman, U.S. 
Navy, Director, Air Warfare Division, and Major General David 
J. Scott, U.S. Air Force, Director, Operational Capability 
Requirements, Deputy Chief of Staff for Operations, Plans and 
Requirements.
    Admiral Philman and General Scott, we find ourselves at an 
interesting crossroads in the history of combat aircraft 
acquisition. The production lines for the Nation's legacy 
tactical aircraft, the F-18 and the F-22, are either shutting 
down or on the verge of shutting down. The replacement jet, the 
F-35 Lightning 2 Joint Strike Fighter aircraft is still in 
development and testing and on the verge of ramping up to high 
production numbers. However, just last month, the Department 
announced a 13-month delay in the program. This delay is 
especially worrisome for the Navy and the Marine Corps, which 
is already forecasting a Strike Fighter shortfall in excess of 
100 to 150 jets in 2014.
    The committee is anxious to hear updates on other combat 
aircraft acquisition programs, such as the Navy's E-2D Advanced 
Hawkeye early warning aircraft and the PA-8 Poseidon multi-
mission aircraft and the Air Force next generation bomber, as 
well as how the Air Force plans to satisfy future electronic 
attack aircraft requirements that are currently being satisfied 
by the Navy EA-6B Prowlers.
    Admiral Philman and General Scott, we are looking forward 
to your testimony and a spirited and informative question and 
answer session.
    Before we hear your testimony, I would like to call on the 
ranking member and our former chairman, my good friend Bill 
Young, for his comments.

                          Remarks of Mr. Young

    Mr. Young. Mr. Chairman, thank you very much, and I look 
forward to this extremely important hearing. But I wanted to 
make a comment to follow yours about Jack Murtha.
    Jack and I worked together on this committee for nearly 30 
years. I was chairman twice, he was chairman twice. But when we 
produced a bill, the bill was basically the same, no matter 
which one of us signed on as chairman. We just had that 
tremendous relationship. I am sure we will have that same 
relationship with you because of the long time that we have 
spent together.
    Anyway, thank you for recognizing a moment of silence.
    Mr. Dicks. If you would yield for one brief second, that is 
a tradition that has been on this committee. I have been on the 
committee for 31 years. That has always been the tradition, of 
working on a bipartisan basis. And at a time when that is 
difficult in some other places, I think that is something we 
really need to maintain and continue here on the defense 
committee.
    Mr. Young. Well, you know I have a tremendous respect for 
you and all of the members on our side have that same respect 
for you as well.
    But thank you very much, and thank you all for being here 
today. We look forward to your testimony.

                      Statement of Admiral Philman

    Mr. Dicks. Admiral Philman.
    Admiral Philman. Good morning, Acting Chairman Dicks, 
Ranking Member Young, and distinguished members of the 
committee. Thank you for this opportunity to appear before you 
to discuss the Navy combat aircraft requirements.
    Before I make my opening statement, I would like to convey 
to you my sincere condolences to the Murtha family. The United 
States Navy is grateful for the lifelong dedication of this 
true public servant.
    Chairman Murtha exemplified dedication to duty during his 
time in the Marine Corps as well as in the United States 
Congress. His patriotism and heartfelt concern for soldiers, 
sailors, airmen and marines helped define his life of service. 
In this time of sorrow, we will all be comforted in knowing 
that although we lost a great friend to the Navy and the 
country, his legacy will continue, as you have mentioned.
    Mr. Dicks. Thank you.
    Admiral Philman. I am pleased to share this time with my 
counterpart and good friend from the Air Force, Dave Scott. I 
am proud to report that the Navy's aviation community, 
comprised of aircraft, ships and weapons systems, continues to 
be a stabilizing force in the flexibility and capacity to span 
the globe.
    With last year's commissioning of the USS George H.W. Bush 
and the inactivation of our last conventionally-powered 
aircraft carrier, the USS KITTYHAWK, we now have an all nuclear 
powered carrier force. Currently comprised of ENTERPRISE and 10 
NIMITZ class ships, the Navy remains committed to maintaining a 
force of 11 aircraft carriers over the next 30 years.
    Our modern all-nuclear force provides an unmatched capacity 
to meet the Navy's core competencies; forward presence, 
deterrence, sea control, power projection, maritime security, 
and humanitarian assistance and disaster response. The Navy can 
execute these competencies quickly and decisively while 
operating in international waters without imposing 
unnecessarily political or logistical burdens on our allies and 
potential partners.
    Right now, Navy and Marine Corps carrier-based F-18 
aircraft are providing precision strike and support of forces 
on the ground in Iraq and Afghanistan. The Hornet and its 
brother, the Super Hornet, are the backbone of our Navy's 
ability to project power at shore. And without question, the F-
35 Joint Strike Fighter is essential to addressing our future 
Strike Fighter needs.
    Sustaining the Hornet fleet and transitioning to the F-35C, 
our first true fifth generation fighter, are critical to meet 
the Navy's national maritime strategies. We are recapitalizing 
the EA-6B Prowler with EA-18G Growler aircraft to perform 
rotational support to carrier strike groups and ashore in an 
expeditionary role.
    The Navy is procuring a total of 114 EA-18Gs to 
recapitalize the 10 fleet Prowler squadrons or 10 missile 
carriers and four in the expeditionary role. The first 
transition squadron at NAS Whidbey Island reached IOC last 
September, and full rate production was approved by OSD in 
December of 2009.
    While we continue to advance our platforms to face the 
current and future threats, we have also made great strides to 
improve our air-to-ground and air-to-air weapons systems. Joint 
weapons like the joint air-ground missile, the small diameter 
bomb, AIM-9X and AIM-120D are critical, not only to the Navy, 
but to the combatant commander's future warfighting capability 
and capacity.
    Acting Chairman Dicks, I thank you and the committee for 
allowing me to appear today. The committee's untiring 
commitment to the Navy is evident, and I thank you for your 
support today and into the future.
    I respectfully request that my statement be submitted for 
the record.
    Mr. Dicks. Without objection, it will be entered into the 
record.
    [The statement of Admiral Philman follows:]

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                       Statement of General Scott

    Mr. Dicks. General Scott.
    General Scott. Good morning, Chairman Dicks, Ranking 
Member, and members of the committee. Thank you for the 
opportunity to address this committee regarding your United 
States Air Force combat requirements. Before I give my opening 
statement, I would also like to convey my condolences to the 
Murtha family in this time of sorrow. His dedication and 
service to the Nation will always be remembered. His patriotism 
and special concern for combat troops touched those of us in 
uniform, no matter what service profoundly, and he will be 
missed.
    The Air Force remains fully committed to support today's 
global operations. Today's complex strategic environment 
requires Air Force capabilities to support the joint team 
across the full spectrum of operations.
    As you know, it is vital to remain a relevant force and 
acquire future capabilities necessary to underpin our Nation's 
long-term security. The Air Force believes the most cost-
effective plan is to accelerate the retirement of some older 
fighters to enable and reinvest into the remainder of the 
legacy fighters and bomber fleet, preferred munitions, and 
other key enablers as a bridge to the fifth generation fighter 
force, capabilities that are absolutely essential to counter 
advanced and highly lethal emerging threats.
    Our recapitalization strategy seeks to balance requirements 
for today and tomorrow. Our belief is we must improve our 
existing capabilities and pursue new, more capable systems to 
meet future threats.
    I thank you for the opportunity to address this committee 
and I look forward to your questions.
    [The statement of General Scott follows:]

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                   JOINT STRIKE FIGHTER COST ESTIMATE

    Mr. Dicks. Admiral Philman and General Scott, the cost 
estimate done by the Joint Estimating Team for the Joint Strike 
Fighter program shows a development shortfall of $3 billion 
over the previous estimate. What is being done to address these 
updated cost estimates with regard to funding the program? Will 
this funding shortfall impact the near term production 
quantities?
    General Scott. Sir, as you well know from the estimate and 
as we looked at what we need to do to reduce the risk in the 
program through the OSD and the Department and Air Force and 
Navy through the Joint Program Office, what we have looked at 
is how we can take this schedule with the funds that we have 
and move it to the position as well.
    We are taking $2.8 billion, putting it into RDT&E in the 
System Design and Development (SDD) phase, to enable us to take 
that schedule and get it further along. We are also taking that 
procurement ramp that was probably a little too aggressive and 
we are slowing it down. And what that is doing for the Air 
Force in particular is it will take about 67 aircraft out of 
our inventory, but in our mitigation plan, we are working that 
with all of our other plans with other fighters. But it will 
take us as we look at it, it will slip the ramp to 2016 before 
we will go from 48 to 80 fighters, and it also slips us to 
about 2016 for the timeframe for that.

                   JOINT STRIKE FIGHTER PROGRAM DELAY

    Mr. Dicks. Admiral Philman and General Scott, the 
Department recently announced a 13-month delay to the program 
to account for the findings of the Joint Estimating Team. How 
is it that the initial operating capability date in the program 
has not changed?
    Admiral Philman. Sir, the restructuring program is actually 
good for Navy. Since we put that procurement, those numbers are 
coming down. In the case of the Navy, or the Department of 
Navy, 55 aircraft will go back into fully funding that part of 
the program.
    The Navy has been on record for a 2014 IOC. Certainly a 13-
month slip is going to pressurize that. So with delaying 
delivery of aircraft, making it more concurrent so we have test 
aircraft delivered at the right time so we can test them on 
time and then delivered later on, I think is good, but will 
push our IOC out toward 2015, maybe later.
    CNO is tying IOC to specifically having adequate numbers of 
aircraft, having the right capability, in our case Block 3 
capability, and that testing has been done.
    Mr. Dicks. Give us a little flavor of what the reason is 
for this 13-month delay. I think we talked about modeling, the 
modeling that had been done.
    Admiral Philman. Yes, sir. The traditional development and 
testing of aircraft, you fly down data points, bring them down, 
so to speak. This program has been more advanced where we are 
using extreme amounts or large amounts of modeling so that we 
could build the aircraft and then be more predictive of the 
flight characteristics without actually having to fly the 
aircraft.
    That modeling is two things. The delivery of the aircraft 
has been slower than expected, and then what we are seeing in 
the actual flight hasn't necessarily validated the model. So 
now we are continuing to press back and have to go back and do 
more traditional testing for some time until we can get the 
aircraft mature enough to be more in line with a validated 
model.
    Mr. Dicks. Is this a software problem?
    Admiral Philman. Not within the aircraft. Now, there are 
software programs with the aircraft that continue to be 
drivers----
    Mr. Dicks. Sometimes in the past you put an aircraft there 
and do a software test for the program. Has that been done here 
on the Joint Strike Fighter? Where you have a test?
    General Scott. Sir, if I understand the question, when we 
do software modifications with an aircraft, sometimes the 
software modifications are behind the actual in the simulation 
piece, and they are behind. In this phase, they are concurrent 
with each other so they are working together. So the software 
as we do in the modeling and the software within the aircraft 
are the same. So if that answers your question----
    Mr. Dicks. But there are software issues, right? In the 
testing here----
    General Scott. Yes, sir, as with every phase of every 
aircraft we have done, there are software issues. As we go 
through the test phase, that is part of the Software Design 
Description (SDD) phase where Lockheed Martin with their 
subcontractors are looking at what those are and fixing them so 
that it can progress into the RDT&E and then into the Initial 
Operational Test (IOT) phase where the services will pick up 
the testing.
    Mr. Dicks. In the testing thus far, are there any serious 
defects in this aircraft that we have found that are a cause of 
concern?
    Admiral Philman. None to my knowledge, sir.
    General Scott. None to my knowledge in the Air Force 
either, but we will get back to you if there are any.

                 JOINT STRIKE FIGHTER PROCUREMENT COST

    Mr. Dicks. Admiral Philman and General Scott, while the 
committee applauds the attempt by the Department of Defense to 
fully fund the development portion of the program, it is not 
clear that a similar attempt has been made to properly price 
the procurement side of the program.
    Does the President's request for the Joint Strike Fighter 
program properly fund the procurement costs of the aircraft to 
include all components, such as the airframe, engine, 
government-furnished equipment, et cetera?
    General Scott. Sir, currently in the President's budget 
request for Fiscal Year 2011, yes, it does, as we look out and 
as we go across that particular time period with that. So we 
are satisfied with what we have requested in our budget from an 
Air Force perspective. I can't speak for the Navy or the 
Marines, but we are okay with that.
    Admiral Philman. Yes, sir, it is so for the Navy. It will 
be a problem in 12, and future issues are service integration, 
whether on the ships or in the training centers. That part we 
still have work to do.
    Mr. Dicks. Mr. Young.

                      AIR GUARD TACTICAL AIRCRAFT

    Mr. Young. Mr. Chairman, thank you very much. I suspect you 
are going to get a lot of questions about the Joint Strike 
Fighter today, so I am going to go in a little different 
direction. I want to talk about the Air Guard and the assets, 
fighter assets, that the Air Guard has and will have. But we 
understand that the Air Guard will begin to decommission its F-
16s in 2011. General, is that correct?
    General Scott. Sir, there is a plan for the retirement of 
aircraft starting in 2011 as we look out, and part of those 
aircraft are the older aircraft. I am sure you have heard in 
the Combat Air Forces (CAF) restructure, about 250-plus 
aircraft is what we are looking at. But in that reduction of 
aircraft, as we reduce the older fleet of aircraft, Block 25s 
and Block 30s and the F-16s, there is a plan to slide other 
aircraft into those.
    There is an Air Force plan as we work our redux, as we work 
our F-35 ramp-up, on how we will enable the Guard to maintain 
the capabilities that they have currently today. Obviously, as 
we go through a process, if we shrink the force, the force will 
shrink equitably between the active component and the Air 
Reserve component. But right now, with General Wyatt and the 
Air National Guard, they will have the capabilities.
    The other thing we are doing with aircraft as we look at 
them to mitigate some of issues if the F-35 slips further, is 
to do some modernizations in Service Life Extension Program 
(SLEP). We believe in the 2530 realm that we can increase their 
flight hours, and we call it equivalent flight hours versus 
actual flight hours, and increase their economic service life 
to about 10,800 hours, which will take them just to the outside 
of 2017 and the capability with their Block 25s and Block 30s. 
So we are looking at that mitigation plan also and how to 
incorporate that into our program.
    Mr. Young. Well, it sounds like you have given considerable 
thought to this, but the information that we have had is that 
we could have as many as half of the Air Guard fighter units 
without aircraft by 2022.
    General Scott. Sir, if you look at the flow plan with the 
Block 40s, Block 50s and the F-35s, I do not believe that is 
true. I will get back and get you the exact numbers on how that 
will occur.
    [The information follows:]

    The Air Force believes strongly in the Air National Guard, and its 
warriors are a valuable part of that Air Force total war-fighting 
capability. The Air Force plans to retain as many Air National Guard 
units as possible; however, the future composition of Air Force fighter 
forces is changing and will continue to evolve. New missions are 
emerging that will require commitments from both Active Duty and 
Reserve components. The Air Force may transition Air National Guard 
units that are losing older F-16s to a different more relevant mission 
set.
    As you know, there has recently been a restructure to the F-35 
program to overcome challenges in production and test. These may cause 
the Air Force's initial operating capability to potentially slip until 
2016. For those Air National Guard units that may receive F-35s, this 
will impact aircraft availability and will also cause us to adjust our 
timeline to transition from the F-16. Until we have greater clarity in 
the F-35 program, we will not be able to fully detail this transition.

    But there is a plan as Operations (OPS)-1 for the F-35 
stands up, which is an F-16 base, those aircraft, which are 
Block 40s, will transition to the Air National Guard, which 
will then enable us to transition older fighters and retire 
them out. So there is a plan as we move the dominoes and 
aircraft around, to allow both the Air Reserve component and 
the active component to have the right number of aircraft to 
enable them until their missions.
    Mr. Young. General, does it appear that the Air Guard will 
be without a substantial number of aircraft until that 
program----
    General Scott. No, sir, it does not.
    Mr. Young. That is good news, because we were sort of led 
to believe that that might be the case.
    General Scott. Sir, as you well know, there are five 
reports coming to Congress totally covering the fighter 
structure, the CAF restructure, and different parts of that. 
Those will start coming over here on 1 March through 1 April. 
Those go into a lot greater depth and detail of the plans we 
are looking in the CAF restructure, things that we are doing 
with the F-22 and other fighter force structure.
    Mr. Young. That will be good. One more question on the Air 
Guard. What about the F-15s?
    General Scott. Sir, what we are doing with the F-15s is 
called a long-term program. There are 176 of those aircraft 
that we will upgrade with the Active Electronically Scanned 
Array (AESA) radars. We will also give them some electronic 
warfare and Infrared Search and Track (IRST) capabilities that 
will enable them to extend their service life out to a much 
longer period of time. And in the F-15, what you will probably 
see, which you will see, is those will transition mostly to the 
Air National Guard as the F-22 aircraft stand up in the active 
component.
    Mr. Young. So you say that there will be no downgrading of 
the Air National Guard's capability to go to war with the 
regular Air Force?
    General Scott. No, sir. The F-15 long-term Eagle will have 
much better capability than the current F-15 does, and as they 
transition from Block 25-30 to 40s and 50s, they will have the 
capabilities in those aircraft also. And part of the plan as we 
look at the 40s and 50s, again looking at the F-35 program, 
there are things that we need to do to that. And there is in 
study and analysis a long time Viper F-16 program on what we 
need to do with the AESA radars, with the IRST capabilities and 
with Digital Radio Frequency Modulations capabilities.
    Mr. Young. General, thank you very much. I appreciate that.
    Thank you, Mr. Chairman.
    Mr. Dicks. Mr. Moran.

                   TACTICAL AIRCRAFT INDUSTRIAL BASE

    Mr. Moran. Thanks very much, Mr. Chairman, and thank you 
for your comments about our chairman. As you know, we wish you 
all the best and look forward to working with you. But I know 
you share all of our sentiments. This is the last way you would 
have wanted this to happen. So it is nice to recognize Jack. We 
appreciate that.
    What I would like to ask you about right now, Admiral 
Philman and General Scott, is our industrial base. After we 
complete the F-18 program, which is going to be in a few years, 
there will be one single contractor providing virtually all 
tactical aircraft, and I wonder if you have a concern. The 
committee has expressed its concern, for example, in the need 
we thought to have an alternative engine so you can have some 
measure of competition with the F-35, because we are going to 
build over 2,000 of them, we are going to be selling them 
overseas, yet we are relying upon one contractor.
    Would you address this issue, which has been of continuing 
concern to the committee, our over-reliance upon a single 
contractor, even as effective as they may be?
    Admiral Philman. Certainly that is how our economy is 
established, for competition. In the case of the fighter world, 
the folks in Lockheed Martin are building the F-35, and that is 
coming along nicely. We talked about some of the issues, but I 
predict we are going to work our way out of that.
    The Hornet line in St. Louis is there. I am comfortable 
that we are buying enough airplanes now and into the near 
future that that line will remain hot so that we can understand 
better the production capability of the Joint Strike Fighter 
and not shut that down before we have a full understanding that 
that production line is going to meet our Strike Fighter needs.
    In the case of the Navy, we are buying airplanes, F-18Es, 
Fs and Gs, through fiscal year 2013, with a delivery in 2015. 
So that gives us some flexibility, I believe.
    Mr. Moran. I hear your response, but, you know, I think the 
best example of the committee's concern was the need for an 
alternative engine. Now you say no, you don't need two, we can 
have total reliance, even though we are talking about more than 
2,000 F-35s. We are not critical of the single contractor, but 
it is kind of a philosophical issue. It really goes to the 
heart of what we are about, competition, trying to keep costs 
low, trying to ensure that there is that monitor, that we don't 
have monopolistic control.
    I suspect I know what we are going to hear, but I think it 
is important to share the concern with the committee. Did you 
have anything you wanted to say?
    General Scott. Sir, I would agree with you that, one, 
competition is extremely good, and two, we are worried about 
the industrial base. I am sure when we start talking about 
long-range persistent strike and platforms in that area, as we 
look at the funding of the industrial base. So we are concerned 
about that.
    One thing I will tell you, Admiral Philman and myself sit 
on an organization called the Joint Air Dominance Organization 
where we look at the Navy, the Air Force and the Marines and 
where we are today and where we are going in the future.
    For a tactical aircraft, we are already looking at what is 
the next generation air dominance platform. If you look at 
economic service life (ESL) timelines, we have to start 
understanding service life on the F-22 and the F-35: what are 
their economic service lives? In addition, with the F-18 and 
the F-16 and the F-15, and their ESL will approach quicker.
    So I believe that you will see, not in the very near 
future, but pretty close, you will start seeing us talking 
about where we are going in the tactical fighter realm from an 
air dominance, and what we need to look at in the future if you 
want to call it a sixth generation fighter, I will just call it 
the next generation air dominance fighter, whether it is manned 
or unmanned, will help the industrial base. I also believe the 
long-range persistent strike will help that, too.

               LONG RANGE STRIKE AIRCRAFT INDUSTRIAL BASE

    Mr. Moran. Well, that is a good point, and in that context, 
after terminating the next generation bomber this past fiscal 
year, the one we are still in, really, this next year's budget 
includes $200 million to support a long range strike industrial 
base. We don't really have any idea. What are you going to do 
with that $200 million? What is your plan for that?
    General Scott. Sir, the Assistant Secretary of the Air 
Force Acquisition staff are actually the folks that will be 
monitoring that. But what we are looking at is the technology 
we started in the next generation bomber. We want to make sure 
that base of knowledge, that industrial piece, and those folks 
that were working that, are still in place if we go in a 
similar mode as we do this next study and figure out where we 
are going with what I will call long-range strike, long-range 
strike being an umbrella, a family of systems where you have a 
penetrating capability or you have a standoff capability or you 
have what we will call a conventional prompt global strike 
capability. But those are the things we will be looking at the 
industry to look at for us through our SAF/AQ folks in 
monitoring that $200 million.

                      COUNTERING ELECTRONIC ATTACK

    Mr. Moran. Okay. Thank you. Just one last, I hope we can 
make it a quick one. But there also seems to be an over-
reliance, at least the Chief of Staff of the Air Force has 
cited an over-reliance on the GPS system in countering 
electronic attack. Do you share those concerns?
    General Scott. Sir, obviously in the environment we are in 
and at a level we can talk now, yes, we are very concerned with 
the denial of Global Positioning System (GPS). We are looking 
at that. I think you all know that we have a space adversary 
squadron that helps us in exercises so that we can exercise in 
those environments with the platforms both across all services, 
not just the Air Force as we go into the Red Flags and up in 
Alaska and down there at Nellis.
    So we understand that. We are exercising to that 
capability. We are looking at ways that we can improve our 
inertial navigation systems, or doing some encryptions with 
different things we have with our impact GPS capability.
    So we understand that. And it is not just a platform 
sensor. There is also the weapons piece of that. So as you tie 
those two together to make sure that you are working those in 
congruence, so that at the endgame, in the environment that 
could be out there, that the weapon does what it needs to do.
    Mr. Moran. Thank you.
    Mr. Chairman, thank you. Again, we look forward to 
following your leadership on this committee.
    Mr. Dicks. Mr. Frelinghuysen.

                    TACTICAL AIRCRAFT OPERATION COST

    Mr. Frelinghuysen. Thank you, Mr. Chairman. First of all, 
we all salute the combat pilots and crews and all those who do 
the remarkable work that they do each and every day. Certainly 
I believe hopefully we still have what used to be called 
overwhelming superiority. But the second comment is I worry 
about what the Russians are doing, the Chinese are doing, the 
Indians are doing, the collaboration between those military 
forces.
    But I would like to focus on what was described a few 
minutes ago as the economic service life issue, particularly as 
we look at the Joint Strike Fighter.
    It is my understanding that the Navy has developed a 
report, and I think the report's name is the Joint Program's 
Total Operating Cost Affordability Report, that indicates that 
each flight flown by the Navy and the Marines F-35s will cost 
$31,000 in 2029. This compares with $19,000 in current flight 
hour operating costs for the F-18s and Harriers.
    Admiral, can you outline or elaborate on these numbers and 
explain to the committee how worried we should be about these 
figures?
    Admiral Philman. Sir, it is a valid worry. We are looking 
very closely at that. The CNO is very, very captured by the 
total ownership cost in all of its platforms, end to end, 
manpower, flight hours, all the pieces and parts that go into 
that calculus. But that is being developed, the report you are 
talking about is being developed by Navair Systems Command, and 
I don't think I can address it directly for you, but I will get 
you that answer.
    [The information follows:]

    The Navy encourages its program managers to study the total 
ownership costs of new and existing systems, and the Naval Air Systems 
Command (NAVAIR) estimate of JSF cost per flight hour is consistent 
with goal. It is not prudent to make conclusions on the total ownership 
costs of JSF based on the NAVAIR study alone. Navy has not yet 
completed operational testing of the carrier variant and flight hour 
costs are only one aspect of JSF total ownership costs. Understanding 
and controlling total ownership costs is a priority for the US Navy and 
we will continue to pursue ways to reduce our long-term operations and 
support costs for all our ships and aircraft.

    Mr. Frelinghuysen. Well, I assume the Air Force is familiar 
with this study.
    General Scott. Sir, from a requirements perspective, no, I 
am not. I would probably say that our AF/A8, General Miller, is 
probably more aware of it, but I will get involved with it. I 
do understand the O&M costs and the significant increase that 
we have gotten when we go into the F-22, F-35.
    Mr. Frelinghuysen. I am not setting up a potential dispute, 
but I understand there is some difference of opinion between 
the services on some of the conclusions of this report. What 
worries me is that obviously we talk about delay here, and 
there has been some delay and cost overruns. We have 
international partners. Don't they have a piece of this game 
here, and they have some anticipation?
    Admiral Philman. They do. They are watching us very 
closely. Part of the cornerstone of the Joint Strike Fighter 
program is affordability, and we are watching that very 
closely. I don't think there is a separation between the Air 
Force and the Navy on this regard, but there is----
    Mr. Frelinghuysen. But Congress is of the view that this is 
joint, that maybe somebody will get it earlier than the other, 
but that the carrying costs are pretty heavy here. We are all 
for it.
    Admiral Philman. Sir, I want to reiterate, it is a valid 
question and we owe you an answer. I will get you the right 
people to answer it for you.
    General Scott. Sir, if I could comment on the joint piece, 
I will tell you that the CNO, the Chief, and the Commandant of 
the Marine Corps, went down to the Lighthouse, which is a large 
facility down in Suffolk that enables us to do things. And the 
things that they have seen to make sure that we are working on 
all things joint was that the three four-stars went down there 
to learn about the F-35, all things that were working with the 
umbrella, dealing with the connectivity, with the data links, 
with the weapons systems and how we will interact.
    We are really working very closely, both through the Joint 
Program Office, both through the requirements piece and through 
the acquisition piece to make sure that we get this right and 
do these things together.
    Mr. Frelinghuysen. Well, I think we are reassured in 
hearing that. You don't have many options out here. You have a 
shrinking industrial base, one basic line that you are going to 
be dependent on. We need to get it right and we need to 
expedite whatever we are doing.
    Thank you, Mr. Chairman.
    Mr. Dicks. Mr. Rothman.
    Mr. Rothman. Thank you, Mr. Chairman. Let me echo 
everyone's sentiments about the appropriateness of 
acknowledging the passing of our friend and great chairman, 
Jack Murtha, a truly great man, great patriot, great American, 
and he will be missed at many levels.
    I also want to associate myself with the remarks of those 
who say how much they are looking forward to working with you, 
Mr. Chairman, not only because of your experience, but also 
because of your commitment to the kind of nonpartisan approach 
to our work here, as well as the kind of accessibility that has 
been afforded to each of the members to make a contribution and 
to learn.
    Mr. Dicks. Thank you.

                    JOINT STRIKEFIGHTER CAPABILITIES

    Mr. Rothman. Admiral and General, thank you for being here. 
Thank you for your distinguished careers of service, really 
remarkable. I have said this before in other hearings, we hope 
that your present service will be the best work of your careers 
until the next level. But we need you to be operating at your 
best as well. So, good luck to you and all of those who work 
with you and under you.
    A couple of general questions, and I do understand the 
nature of this being an open hearing. Can you respond though 
generally to the capabilities of the Joint Strike Fighter 
versus the kinds of comparable aircraft that are coming out of 
Russia and China, in general terms? Will our aircraft be 
superior? Will we have a qualitative military edge? 
    Admiral Philman. Yes, sir. I believe that to be true. It is 
designed from the very beginning to work into what we call an 
anti-access environment. So all the things that are resident in 
the aircraft, designed in, the sensors, the weapons systems, 
the interconnectivity that was mentioned by General Scott 
earlier, all enable this aircraft to go deep and do this work 
at all odds.
    So, the other countries are building aircraft that are very 
capable and we keep our eye on that with good reason. So the 
whole system of systems, not only the F-35, but the Enabler, 
the E-2D and the Airborne Command Control that the Air Force 
has, our ships, our command and control over the ground, I 
think it all plays in.
    So from a greater standpoint, the F-35 fits into it to 
accommodate our ability to work unimpeded in almost any 
environment.
    General Scott. Sir, what I will give you is an example. The 
F-35 is very complementary to the F-22, different missions, but 
capability-wise and what that does. I have been a fourth 
generation kind of fighter pilot. I have flown against the F-
22, and there is no aircraft today that matches that aircraft. 
And the F-35, for the complementary missions that it does 
today, will be very similar to that. So I am very, very 
satisfied that today and where we are, that where we can fight 
and do the things, we are the best.
    Mr. Rothman. Obviously we are projecting the use of the 
Joint Strike Fighter many years out into the future, and I am 
certain that you have considered our potential adversary's work 
in the future as well. So they are not going to be staying at 
home just twiddling their thumbs. They are working on ways to 
match or overcome our Joint Strike Fighter.

                       ELECTRONIC ATTACK AIRCRAFT

    But I know my time is limited, and it fits in with the 
general pattern and what the Admiral was saying about how it 
fits into the general whole of our air superiority. But I am 
very concerned about electronic warfare and the jamming of 
their systems by us and the acquisition of our superior 
aircraft at early times by our enemies sufficient enough to 
give them the opportunity to deny us air superiority. That 
concerns me a lot.
    Are you worried about that enough, and are we doing enough 
to address what I consider to be in a way an asymmetrical 
threat, folks who don't have aircraft like ours and other 
capabilities like ours, but can acquire us far away and at 
great heights and then knock us out?
    Admiral Philman. Yes, sir. Without question the adversaries 
continue to exploit the electromagnetic spectrum at much 
reduced costs of what we do to counter their efforts. Right 
now, I mentioned that we are recapitalizing our Prowler 
squadrons the EA-18G. That is going to be 10 squadrons on the 
ships and four expeditionary squadrons, plus the Marines. That 
is an excellent platform and has great capability. But it is 
only a piece of the puzzle.
    There are other parts. The Joint Strike Fighter will have 
resident capability to be able to work within that and 
contribute that system, as will almost every other airplane we 
have. We have gone to places. We have some very good modeling 
centers. The question was asked earlier how is this working, 
are you worried about this developmentally. We worry about what 
the adversary is building, how they can counter us. We are 
trying to model their capabilities and then we will work our 
way through countering those before they ever even fly, making 
those capabilities resident in not only the F-35 and the EA-
18G, but the rest of the force as well. I believe that is true 
for the Air Force.
    Mr. Rothman. And your budget request for fiscal year 11 is 
sufficient to pursue those capabilities to your satisfaction?
    Admiral Philman. Yes, sir, for the Navy.
    Mr. Rothman. For the Air Force as well?
    General Scott. Yes, sir. I will pile on to what Admiral 
Philman said. It is a family of systems. It is not one system, 
as you said, like with the fighter itself. It is how you cover 
that entire spectrum, that electronic magnetic spectrum. What 
we don't want to do between the two and three services is to be 
redundant. There will be overlap in how we cover that spectrum. 
But we want to make sure that between the three services and 
the fiscal realities that are out there, that we have got it 
all covered. And I think we do a very good job of that with the 
organization that I previously mentioned on how we want to 
spend our funds to make sure that we are covering the spectrum 
today and as we look into the future. And in a closed session, 
Mr. Chairman, we could actually get into a lot more details 
about those capabilities.

                        MISSION CAPABILITY RATES

    Mr. Rothman. One last thing about the maintenance. You 
were, General, comparing the superior qualities of the F-22 in 
a certain way to the Joint Strike Fighter. It has been said 
that the low observable maintenance for the F-22 has led to 
substantial decreases in mission capability rates and that 
there is the same low observable maintenance proposed for the 
F-35 and there is some concern about decreases in mission 
capability rates for the Strike Fighter.
    Do you share that view?
    General Scott. What I will share with you is that if you 
look at all our stealth capabilities starting with the F-117 
and the B-2 and now the F-22 and working our way to the F-35, 
we have always started off with lower rates. We look at it from 
four areas. We look at it from the material, the system, the 
management of that system and the manpower. And part of it just 
is how are we teaching these young men and women, these young 
Airmen that are out there that are working on this material, to 
enable them to make sure that they are doing the right things.
    We have made great strides. If you go back and look at the 
F-117 and look at the mission capable (MC) rates and the 
ability that we learned from low observable (LO) maintenance 
and now we are applying it to the F-22 and we will also apply 
it to the F-35, and we are handing those lessons learned both 
to the Marines and the Navy to make sure we don't reinvent the 
wheel.
    I will tell you that the MC rates were low in the F-22. If 
you look at the trends, they have trended up. They do not 
currently meet what I will call the threshold and objectives or 
the Air Combat Command's MC rates. They are probably in the 
mid-60s. But they were well below that and the trend is up, and 
we believe we have reached that knee in the curve with the 
different places that we are working as we work those things.
    There will be different issues with different places that 
you place this aircraft. Obviously Holloman Air Force Base, New 
Mexico is a great place to have these kinds of aircraft because 
of the environment. And there are other things we are learning 
from, such as the environment and how that dictates to the 
things that happened to those kinds of materials.
    Admiral Philman. Sir, as was mentioned, the Navy is early 
to this game. The Super Hornet has some LO characteristics, but 
it is not a durable aircraft. So we are taking the lessons 
learned from the Air Force and applying it to the Navy's F-35C. 
Of course we are going to operate in a different environment, 
in the maritime, close to the water always. We will probably 
see some challenges that weren't there before, but we are 
capitalizing on every opportunity to learn from what has been 
done before.
    Mr. Rothman. Thank you, chairman.
    Mr. Dicks. Ms. Granger.

                     JOINT STRIKE FIGHTER QUANTITY

    Ms. Granger. Thank you very much. Thank you for your 
service and thank you for your appearance today.
    You have talked about the changes in the F-35 and that you 
are planning to buy 43 for 2011. My question is, the total 
requirement, it was at 2,443. Is that still the number, or has 
that changed?
    General Scott. Ma'am, I don't know the total requirement 
across the entire F-35. 1,763 is still the Air Force's program 
of record, and we are planning on buying 1,763. Across the 
Future Years Defense Program (FYDP) and where we are sitting 
right now, we are 67 less, but with the ramp up and where we 
are going to end up.
    As you well know, this is critical to the backbone of our 
Air Force. This is the replacement of the A-10 and the F-16. 
And as our Chief has said, this is the future of the fighter 
force of the United States Air Force from the global precision 
attack mode that we will be using this aircraft for. So we 
haven't changed the number.
    Admiral Philman. Likewise, ma'am, the F-35C in the case of 
the Navy is going to carry the water for us well into the next 
few decades. Our legacy aircraft will be supportive. But our 
program is 680 airplanes. That has not changed in quite some 
time. The actual mix has yet to be determined. The Commandant 
of the Marine Corps and the CNO have an agreement that we will 
address that when we have enough data to make that decision. 
When I say the mix----
    Mr. Dicks. That is both the Navy variant and the Marine 
Corps variant?
    Admiral Philman. Yes, sir, that is correct. So the 
Department of the Navy is 680 aircraft. They will be divided up 
between the Navy and the Marine Corps, the F-35B, which is the 
STOVL version, and the F-35C, which is the CV version. That 
decision is yet to be made.
    Ms. Granger. Thank you very much. I know that the previous 
plan called for as many as 80 Air Force versions and 50 Navy-
Marine Corps versions. Do you know when you will have a steady 
state annual production number?
    General Scott. What we are being told is that in 2016, the 
ramp will go from 48 to 80. That was the initial ramp, the 
initial procurement buy. And that in 2016, initially prior to 
the restructure it was 2015, and we are looking at the ramp now 
in 2016 to be at the 80 buy.
    Admiral Philman. Likewise, ma'am, the restructure will 
cause some perturbation and move it to the right to some 
extent, but the steady state I think is 50 for the Navy.
    Ms. Granger. I am sorry, what did you say?
    Admiral Philman. The steady state I think is 50, but when 
that will occur we will have to see, where there is uncertainty 
now with the restructure. But for us, for the Navy anyway, the 
restructure does allow for more logical ramp-up. So we are 
taking the ones that we are taking now in a more logical step 
so they can flow into testing and then delivery for a fleet of 
airplanes in a more logical way. So the restructure comes at a 
pretty good time for the Navy.
    Ms. Granger. Thank you both.
    Thank you, Mr. Chairman.
    Mr. Dicks. Ms. Kilpatrick.

                             AIR DOMINANCE

    Ms. Kilpatrick. Thank you, Mr. Chairman. I too want to add 
my remarks in terms of just you, who you are. I have been to 
your district. I know the commitment. For 30 years you have 
been on this committee. I am sure we will continue the legacy 
of our chairman. It is heavy for me this morning, I am sure it 
is heavy for everybody. But thank you for your service.
    Admiral, General, good morning. It has been very 
instructive, and I have been reading yesterday evening and this 
morning still to a word, and you both have said it, air 
dominance. General, are we number one or not?
    General Scott. Yes, Ma'am, by far. No one comes close.
    Ms. Kilpatrick. That is what I want to hear. Admiral?
    Admiral Philman. Yes, Ma'am. No question. No one else comes 
close.
    Ms. Kilpatrick. That is important, particularly in the 
world today and how we are going in Afghanistan. It is totally 
different, as you well know.
    General Scott. And Ma'am, I will tell you why that is 
important. Not since 1953, the Korean War, has a Soldier, 
Sailor, Marine or Airman on the ground been attacked from the 
air, and that is the air superiority that these three services 
give the folks on the ground. And it is not just soldiers. 
There are, as you well know, in Afghanistan and Iraq, all four 
services, to include the Coast Guard, are on the ground there.
    Ms. Kilpatrick. And that is important, this whole joint 
effort. And being new on the committee, just learning that and 
how you work together is awesome in my opinion. I have been to, 
as I mentioned, a few of the districts and in Iraq. I have seen 
the young men and women, 75 percent of them between 17 and 25. 
They are babies. I am a grandmom. So that is something for me, 
totally committed, doing their mission.

                 JOINT STRIKE FIGHTER ALTERNATE ENGINE

    I want to go back to the second engine thing of the F-35. 
General, I heard you say that F-22 was what you like for what 
it does. That is the aircraft you have flown and is superior.
    General Scott. I have never had the opportunity. If you can 
find a way to get me into an F-22.
    Ms. Kilpatrick. Oh, you haven't done it. I misunderstood.
    General Scott. No, Ma'am. I have flown against the F-22. 
What I will tell you, having flown against many a different 
aircraft across the inventory, the F-22 is without a doubt the 
air dominance aircraft that you want supporting your troops.
    Ms. Kilpatrick. So the F-35 we are moving to in terms of 
the Joint Striker effort?
    General Scott. It is a complementary aircraft. If you look 
at when we take the two missions and the mission sets, the two 
of them complement each other to enable them for the joint 
commander that is running the campaign to be able to do 
different things with the different fighters.
    Ms. Kilpatrick. I see. And together they increase that 
dominance?
    General Scott. Yes, Ma'am, they do.
    Ms. Kilpatrick. Chairman Murtha always talked about the 
second engine. I think this committee has put in I think it is 
over $1.7 billion to begin development of that. The Department 
has always said no, they are not going to do it and really have 
not moved. Inasmuch as we are in combat, it looks like forever, 
unfortunately, why? Can you speak to that? If that is over your 
head, if it is, just say that.
    Admiral Philman. Ma'am, there are two different models of 
the engine. With it comes your basic sustainment, your 
logistics, the expertise to install or remove the engine and 
all the things that go with that.
    In the case of the Navy, within a very large population of 
airplanes that are going to be out there for the F-35, but for 
us 680 airplanes, and the way that we envision and we do 
operate them on the amphibious ships and the aircraft carriers. 
So keeping a smaller pipeline so that we can have a more skinny 
down logistics at sea, the sustainment and the types of engines 
we would have to store on the aircraft carrier, it makes the 
most sense for us to have one engine type.
    Ms. Kilpatrick. So then should this committee withdraw its 
1.7 billion in that effort and rely on you guys who we think we 
don't know anything to move forward?
    Admiral Philman. I don't mean to insult the committee.
    Ms. Kilpatrick. I don't mean that facetiously. I am 
serious. Because one thing about this Congress, they don't 
understand $630 billion to defense when we don't have housing, 
health care, and education and other things properly funded. So 
we have to rearrange dollars. I want the most.
    I am totally committed to the national defense of this 
country and to the young men and women and their superiors who 
protect us, but I think we have to be smarter as we move 
forward. And what you just said, Admiral, and that was like a 
nice little 30 second something, that was good. I am a former 
teacher. I received it.
    But I am concerned. I don't know that we keep appropriating 
this if you are not going to use it. Chairman Murtha didn't get 
here by happenstance. He was a decorated Marine, an 
intelligence officer. So I mean he had to have some reason to 
continue the funding, and I am wondering if we ought to 
continue it.
    General Scott. Ma'am, from the Air Force perspective, and 
the Chief talked about this with the Secretary yesterday at his 
hearing, as we look at the cost of the second engine and we 
look at the cost of the aircraft, what we don't want to do is 
decrease the amount of aircraft that we buy. Competition is 
good. But the fact if you look at the F-22 is a single engine, 
if you look at the F-18, it is a single engine, we have over 
the last 30 years done a lot of work with engines, and 
currently with what we have done with this particular engine, 
we are satisfied through the tests and where it is at, that 
this will be the engine that we want. And it is in the low rate 
initial production (LRIP) right now for the first ones that are 
coming out.
    Mr. Dicks. Will the gentlelady yield just for a second? Our 
staff has been told repeatedly by the former program manager 
that the biggest problem they had was with the engine of 
record. Now, I am new to this issue, but is that true? Are most 
of the problems with the Joint Strike Fighter with the engine?
    Admiral Philman. There were issues with the engine early 
on, sir. But right now, we are beyond that. We are already 
receiving LRIP engines to be delivered to production aircraft. 
It is on the ground. The total test on the engine exceeds I 
believe 13,000 hours. So I believe the manufacturer and the 
program has gotten beyond that point. So we have a reliable 
engine that we can use right now.
    Mr. Moran. The chairman is absolutely right. The program 
manager testified to this committee it was the engine that was 
the cause of the delay.
    Admiral Philman. Yes, sir. I am not sure when that 
testimony occurred. But----
    Mr. Dicks. We are glad to hear that. We don't want this not 
to work. But we want to know what the facts are.
    Admiral Philman. To my knowledge, this engine is 
performing, and we haven't had any airborne emergencies with 
the engine, and on-the-ground testing----
    Mr. Dicks. Maybe that is the reason the program manager is 
no longer the program manager. Anyway, I yield back to Ms. 
Kilpatrick.
    Ms. Kilpatrick. That was a good way to end that. And why is 
he not the program manager any longer? Don't answer that.
    I will just go back and I am finished. Chairman Young 
mentioned, do we have enough fleet? Are we going to be short? 
Do we have enough war fleet to do the job? We are in a war and 
a half right now. I mean, the F-35 sounds like it is a good 
one, but you don't want another engine. Air dominance, can we 
sustain it?
    General Scott. Yes, Ma'am. We currently have and in the 
plan with mitigation from an Air Force perspective, if you are 
looking at our fighter force structure, we are right now at 
what we will call a 2,000 number for a total aircraft 
inventory, approximately 1,200 combat coded aircraft. If you 
look out in the outyears, there is, as the Chairman has 
mentioned, with the Navy, there is a bathtub, if you want to 
call it that, in about 2024 of about 185 aircraft. There is 
mitigation that we are working right now. One of them is with 
the 176 F-15s to increase their length. One of them is with the 
Block 40s and Block 50s to modernize that fleet. But we look 
yearly if not daily at where we sit today and where we want to 
be in different segments of our force structure.
    We also want to make sure we have the right balance. Today 
we have eight percent fifth generation aircraft. In 2024, which 
is the segment we look at, we have 51 percent fifth generation 
aircraft. As we start looking at that capability, the fleet 
size, because if you look at what those aircraft can do 
compared to the fourth generation, they can do a little bit 
more. So do we need 4.5 F-16s? And we are working those 
analyses with our folks that do that kind of stuff.
    But we are trying to make sure we have the right balance in 
the fleet. And that goes with manned and unmanned as we look 
out to the outyears. But there is work that we are doing. We 
are at a medium risk, but we are satisfied that we can support 
the Nation with the fleet that we have in the United States Air 
Force.
    Ms. Kilpatrick. We rely on you experts, who have given your 
life and dedication to your current positions and before, to 
make those determinations. That is not what we do here at this 
committee. But we certainly want to be in the realm of 
appropriating what is appropriate and at the same time safe for 
the country.
    Thank you very much for your testimony.
    Admiral Philman. Ma'am, if I could add to that from the 
Navy perspective, we have enough aircraft now to conduct our 
missions, but there is looming out there with the delay of the 
Joint Strike Fighter and as we are using up the life of our 
legacy Hornets, we are concerned about that. So we are doing 
everything we can to make sure we extend the life, use our 
aircraft appropriately, and in the case of the legacy Hornets, 
the A through D, down to the squadron level, we have a service 
life and management program where the squadron commanding 
officer actually allocates how the aircraft will be used, how 
many catapults and arrested landings it will have, what kind of 
particular mission they would be used on, so we can work our 
way through potential shortfalls.
    Ms. Kilpatrick. Thank you.
    Mr. Dicks. Mr. Visclosky.

                         NEXT GENERATION BOMBER

    Mr. Visclosky. Thank you, Mr. Chairman.
    I apologize for being late and simply would make the 
personal observation that I find myself saddened that Mr. 
Murtha is not with us obviously. It is a fundamental change as 
far as the work of the committee.
    But I appreciate your long work, your expertise, and you 
will do an excellent job, and I certainly want to be supportive 
in any way because I know also we will continue in the 
bipartisan fashion and the diligence that we have in the past, 
so I appreciate that very much.
    I have particular concerns, gentlemen, with the alternative 
engine. It is my understanding, and obviously the gentlewoman 
from Michigan has discussed it with you as well, that that has 
been covered, so I will not have specific questions except to 
reiterate my concern that I do think there is a value in 
competition.
    Having a concern generally about the industrial base in 
this country and the fact that some day we are not going to 
make anything here. And whether it is the Pentagon or the 
Department of Transportation or any other agency of the 
government, if we only make one of everything, pretty soon we 
are not going to make anything here. And I certainly want to 
add my voice of concern and to note for the record that over 
the last 4 years, the subcommittee has provided $1.7 billion 
for an alternative engine because of the importance we attach 
to it.
    What I would want to focus on at this point is the next 
generation bomber. And, General, I would like to know what the 
requirements and capability you would be looking for in that 
next generation. Would you anticipate it would be manned or 
unmanned as far as the vehicle?
    General Scott. Sir, in the manned and unmanned requirement 
that will be part of the subject that OSD is looking at. Right 
now, I would say--I don't want to say we are agnostic, but we 
are waiting. We believe that, other than personally, depending 
on what we do the capabilities of that aircraft, if that 
aircraft ends up with some type of nuclear mission, then I 
agree that it ought to be manned. And those will be things and 
those will be in the study as we look at it.
    But as you look at what is the capability, whether manned 
or unmanned, in the realm of possibility, sir, either one of 
those could work if you start to look at those kinds of 
technical maturations and where we are at. It just depends on 
what we do with it.
    Mr. Visclosky. What is your time frame and acquisition 
costs?
    General Scott. Sir, we don't have any acquisition costs 
right now. As you, know, you all helped us and we put some 
money in the industrial base for 2011. We are looking at this 
study to affect 2012, but we are looking at fiscal 2013 to 
start working the aegis of where we are going to go with this 
particular program and the requirements that we have looked at.

                    MODERNIZATION OF LEGACY BOMBERS

    Mr. Visclosky. And can I ask you about modernization 
requirements for the existing bomber fleet and what you 
anticipate that looks like over the coming 2 to 5 years?
    General Scott. Because of the ability to continue the B-1 
and the B-2 and the B-52, we kind of look at it in four realms: 
how are we going to sustain it; the lethality of the aircraft; 
the responsiveness of the aircraft; and the survivability of 
the aircraft. Of those three aircraft, bomber sustainment and 
modernization funding over the FYDP totals $5.8 billion with 
approximately $1.2 billion for both the B-1 and B-52 and $3.4 
billion for the B-2.
    As we look at the different things as we sustain lethality, 
one of the things we want to look at on these bombers is 
advanced targeting pods. Can we put those kinds of things on 
these bombers? Greater modernization on the B-2. The defense 
management systems on the B-2. Some of the connectivity as we 
look at analogue versus digital, the B-52, the B-1, and those 
three bomber fleet that we are looking at, we want them to have 
that beyond-line-of-sight capability as so they are sitting 
here working with the satellites, they can talk with the 
different aircraft that are in the air.
    So we are aggressively looking at those three aircraft in 
the modernization program across the FYDP. That is part of our 
phase, because we look at the phase of what I will call long-
range strike. We want to sustain the legacy fleet that we have 
as we start looking at the tech maturization of what will be. 
And then we also want to start looking at the standoff 
capabilities.
    In phase two, then, we are hopefully into a long-range 
strike capability standoff bombers. We might start looking at 
that point, is there a possibility of retiring? And then we get 
into the phase three where we have the long-range persistent 
strike platform.
    Mr. Visclosky. Thank you very much.
    And again, I do have a serious concern about that 
alternative engine issue.
    Mr. Chairman, thank you very much.
    Mr. Dicks [presiding]. I will yield to Mr. Hinchey. But let 
me ask one question. The B-2 can penetrate. And the others 
basically have to stand off. You use long-range cruise 
missiles. In looking at the next generation, wouldn't the 
ability to penetrate still be an important issue whether it is 
manned or unmanned?
    General Scott. Sir, from the Air Force perspective, we 
believe that this aircraft needs to be a long-range persistent 
and anti-access environment platform. In other words, it needs 
to penetrate into the anti-access environment. That is the 
requirement. We want it to be survivable. We want it to have 
the right range and payload to be able to get into the 
environment of the anti-access environment. Those are the 
requirements we have stated.
    Mr. Dicks. Is $200 million enough money to get it together 
doing the work that they have been doing, or should there be 
additional money added by the Congress?
    General Scott. Sir, currently talking with the industrial 
base, $200 million will cover that. I would say any additional 
amount will----
    Mr. Dicks. How much did we have in 2010?
    General Scott. Sir, can't get into that.
    Mr. Dicks. That is right. It is classified.
    General Scott. Yes, sir.
    Mr. Dicks. Mr. Hinchey.

                  COMBAT SEARCH AND RESCUE HELICOPTER

    Mr. Hinchey. Thank you very much, Mr. Chairman.
    And I want to express my appreciation and gratitude to you 
for taking over the responsibility of this very important 
subcommittee here. And it is a great pleasure for me to be with 
you, and I thank you for everything that you are doing.
    Gentlemen, I thank you also very much.
    I wanted to just mention the combat search-and-rescue 
helicopter program which was terminated by Secretary Gates 
sometime late last year as I remember. And I am wondering if 
there is any understanding of the need for that program. Is 
there going to be any initiatives that are going to be 
reinvigorating it? Starting it up again? The context of its use 
presently, as I understand it, there are a number of these that 
are being used for rescue operations in the context of 
Afghanistan right now.
    And I just wonder if you have any insight on this and what 
you think the next move is going to be.
    General Scott. Sir, you are right. The Resource Management 
Decision (RMD) 800 terminated CSAR-X. What it did not terminate 
is the mission itself. There are studies that are being done by 
Joint Forces Command on combat search and rescue. The Air Force 
has the combat search and rescue piece of that. All services 
have the search and rescue capabilities out there. It is the 
ability that the Air Force has to go into a lethal environment 
and hostile environment.
    The program of record is 112. There are currently, as of 
today, I believe it is 96. We are going to buy back to the 112, 
get our operational loss aircraft and get ourselves--there are 
four in the 2010 budget, and we are planning on in the program 
to continue that to get ourselves back to 112.
    With that Air Combat Command, is relooking at the analysis 
of alternatives, and what is the next generation helicopter if 
we are going to look at that? We are also working with AT&L 
through an acquisition decision memorandum to recapitalize the 
fleet with the current aircraft that we are getting, which is 
the HH-60M, which is a current line that the Army has with 
their Blackhawks.
    So we are working very closely with AT&L through the AQ 
folks, Major General Randy Fullhart and myself. And we are 
working with ACC on the requirements. But you are right. The 
dwell time on these young men and women, and it is not just the 
aviators in the front; it is the guardian angels in the back 
that are doing God's work is what I will tell you. Because it 
really isn't right now just all search and rescue. It is 
medivacs. It is that golden hour rule that we live by to make 
sure that we can get that young man and young woman on the 
ground to a facility within 60 minutes, and they are meeting 
that requirement and doing that job superbly.
    Mr. Hinchey. So the content of this material is available 
readily now, and it is in enough----
    Mr. Dicks. Congressman Hinchey, would you pull your mike up 
closer?
    Mr. Hinchey. The availability of these are standard now, 
and there is a level that is meeting the necessities, the 
requirements and specifically with regard to the circumstances 
that we are experiencing in Afghanistan, but also in Iraq to 
some extent. I assume that there are enough of these now, and 
there is a study going on I assume to figure out what is going 
to be the next move on this issue?
    General Scott. Yes, sir, we are meeting the requirement. 
What I will tell you, though, is the dwell time for these young 
men and women is as high as any dwell time we have in the Air 
Force. It is about a one-to-one dwell time. For some of them, 
it is even a little worse, about .98, and others it is about 
1:2. But that doesn't count those at the 1:2 dwell time that 
deploy to Korea and other places that they do.
    We are looking at, is there a need, or do we restructure 
and rebalance this force structure in a way that the active 
component and the ARC component how we share that wealth with 
the dwell time. So we are working that. ACC is working the new 
AOA, the analysis of alternatives, to see if the requirement is 
better. And the R&D left, I believe, about $2.6 billion in it 
to get us operational. And we are also working on the 
recapitalization on the rest of the fleet.
    Mr. Hinchey. Thank you very much.
    Mr. Dicks. Mr. Tiahrt.

                         LIGHT ATTACK AIRCRAFT

    Mr. Tiahrt. Thank you, Mr. Chairman.
    You look good in that suit. You got my vote.
    I have one concern. I picked up in the light attack 
platform, ISR platform, that currently, we have the TA6--T6A, 
excuse me, which has over a million hours on the airframe. We 
are in flight test starting in the first week of March. It has 
a light attack platform with ISR capabilities.
    But I found out that there is a program now where the Navy 
is leasing a Super Tucano; in fact, they are leasing four of 
them for $11 million a year. And the T6A platform only costs 
$10 million. So why are we spending a million dollars more to 
lease the aircraft for 1 year when we could purchase an 
American aircraft for less money?
    And I have to tell you, Wichita, where I come from, is the 
air capital of the world. We have over 20,000 aircraft workers 
laid off. This platform would get about 800 of them back to 
work. I am hard-pressed to find it acceptable for us to lease 
aircraft from Brazilians, from Embraer, when we have an 
American platform that exceeds the capability. And I am very 
concerned about the way this is progressing with the lease. The 
lease goes outside the competitive process. And I think we 
would have a better chance based on the lease cost of winning a 
competitive bid.
    I guess what I would like to know is, why are we pursuing 
this lease when we have an American capability available? And 
why are we going outside the procurement process and using a 
lease when we could have a fair and open competition?
    Admiral Philman. Thank you, sir.
    I have actually toured all of those lines out there, and I 
commend the people in Wichita. That is very impressive. You are 
speaking of Imminent Fury, which was a project that started I 
think in 2007. The Secretary of the Navy was touring the Middle 
East, and he asked the Special Operations Forces, what is it 
that you need that you don't have now? And they roughly defined 
the characteristics of a light attack airplane with some sort 
of ISR and special configurations. That became what is known as 
Imminent Fury, and phase one, which is a CONUS-based testing, 
and we are about to go into what is called phase two, which is 
combat verification.
    Those airplanes are leased, because that was the airplane 
that was available at the time. The T6B certainly is a very 
nice airplane, but it wasn't quite ready just yet.
    As they go into the combat verification, that will be 
competed. That doesn't exclude any capable aircraft from being 
considered for that combat validation, sir. So I don't have 
any--right now those aircraft are on lease, and that will be 
the plan, but that does not mean it will not be competed. As a 
matter of fact, we insist that it be competed.
    General Scott. And when he says ``those aircraft''--the 
aircraft. There is currently only one aircraft on lease. The 
other four right now are not on lease. Those will compete with 
the Navy Acquisition Program. The initial Imminent Fury 
aircraft back in 2008 time frame basically for what they needed 
to validate the mission as they were going forward, the 
particular aircraft that met that was the Super Tucano.
    Mr. Tiahrt. So you were trying to validate the mission, not 
the aircraft? Or the capability, not the aircraft?
    Admiral Philman. That is correct, sir. What is it that can 
bring instant command and control or instant support to the 
Special Operations Forces? What kind of equipment would be on 
the aircraft? And you figure out this would work; this would 
not work. Make a different modification. That is the concept, 
sir.
    Mr. Tiahrt. And it is your intent to competitively bid the 
follow-on?
    Admiral Philman. The follow-on will be competitively bid in 
the acquisition process. Yes, sir.
    Mr. Tiahrt. Thank you.
    Thank you, Mr. Chairman.

                 JOINT STRIKE FIGHTER ALTERNATE ENGINE

    Mr. Dicks. The famous JSF Stealth business case analysis, 
is it finally here? Do we have a case on the alternate engine 
much touted by Secretary Gates? We understand that it may have 
arrived. Can you summarize or tell us what is in this business 
case analysis on the alternate engine.
    General Scott. No, sir, but I will get it for the record 
for you. I have not seen it, but we will make sure that I get 
it for you.
    [The information follows:]

    The Joint Strike Fighter Engine cost/Benefit Analysis update was 
provided by Deputy Secretary of Defense to Chairman Dicks on February 
23, 2010.

    Mr. Dicks. Do we know who did it?
    General Scott. No, sir, I do not.
    Mr. Dicks. Was it a contractor, or somebody in the 
government, or do you know?
    Admiral Philman. We will have to get that. I don't know who 
did it.
    Mr. Dicks. Do you know about this if there was a business 
case? The question fundamental--one of the major issues between 
the administration and the Congress, wouldn't you know about 
this?
    General Scott. I don't know if we would know it from the 
requirements perspective, because as we state and we work 
through the Joint Capability Integration and Development System 
(JCIDS) process, I would believe that Major General Jay 
Lindell, who is the SAF/AQP who works the acquisition piece of 
the F-35, would have a better idea, and I can get with Jay and 
talk to him.
    Mr. Dicks. We want you to look at this.
    General Scott. Yes, sir, we will look at this, and we will 
get you the information we know that that has been brought up 
by several members.
    [The information follows:]

    Yes, a cost analysis was conducted by the Director of Program 
Analysis and Evaluation (PA&E), now called Cost Analysis and Program 
Evaluation (CAPE), within the Office of the Secretary of Defense.
    The analysis concluded that there would be no net cost benefits/
savings from dual source competition. Specifically, the analysis 
considered three categories of costs associated with maintaining two 
engine producers:
    1. Non-recurring development: The non-recurring Research ` 
Development investment required for a second engine source is 
approximately $2.5 billion.
    2. Production cost: The analysis concluded that splitting the 
production buys between two sources would result in an increase in 
production costs. This is due to 3 factors: (1) learning curve effect 
is reduced when significantly fewer units are produced by each source, 
resulting in production cost increases of approximately $700 million; 
(2) fixed costs are amortized over fewer units for each source: (3) 
cost of outsourced items increases due to fewer units for each source. 
The PA`E (CAPE) analysis concluded that more than a 20% competition 
cost benefit would be required to recover the non-recurring development 
cost and the additional production cost. This is consistent with the 
1998 Program Management Advisory Group (PMAG) assessment that savings 
of 16% to 22% would be required to recover the added costs of 
maintaining two sources. PA`E (CAPE) found that Department of Defense 
experience does not support this magnitude of savings.
    3. Support cost: The analysis concluded that maintaining two engine 
suppliers would result in an increase in support costs. These engines 
are not build-to-print designs. Although both engines are designed to 
have identical external interfaces to the aircraft that make them 
interchangeable, the two internal designs are almost completely 
different. Additional support costs would fall into 4 primary 
categories: (1) Spare parts--Most of the engine parts are unique, 
including the fans, turbines, combustors and compressors. This requires 
establishment of two separate spare pipelines both in the fleet and at 
the depots. (2) Organization (Fleet) level repair--The configuration 
differences drive additional training and tools for fleet maintenance 
personnel. (3) Depot level repair--Two separate depot capabilities 
would need to be stood up. This drives additional non-recurring costs 
and additional recurring unit repair costs since each repair line would 
handle fewer units. (4) Engine upgrades and imporvenents--Future 
modifications for reliability improvements, safety enhancements and 
obsolescence management would need to be done on two different engines, 
driving additional recurring and non-recurring costs.

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[GRAPHIC] [TIFF OMITTED] T5007A.042

                      JOINT STRIKE FIGHTER STATUS

    Mr. Dicks. Tell us about the Navy variant and the Marine 
Corps variant. How they are doing on Joint Strike Fighter? We 
have been getting the review of each of these programs, and 
General Scott can talk about the Air Force variant.
    Admiral Philman. Okay, sir. For the Marine Corps the F-35B, 
known as the STOVL version, we have three of those aircraft at 
Pax River right now, and they are beginning the test. So we are 
learning more. You might have heard issues about the exhaust or 
the downward plume, because it has--not only does the exhaust 
turn down, it has a lift fan in the center of the aircraft so 
it can do the vertical landings. There was some concern about 
the heat and how it might affect the flight deck of the 
amphibious ships. So that testing is being done.
    It is called the hover pit testing where they strap the 
airplane down and simulate the landing. Early report is that it 
is going to be okay. We have tested with coated and noncoated 
surfaces and various combinations to make sure that we 
understand how this aircraft would perform on the amphibious 
ships. We are also going to look at the blast and other aspects 
of the environmentals.
    We believe that is going to be okay. The Marines are 
holding to their 2012 IOC. The testing will come and prove that 
out.
    For the Navy version, it is the F-35C. A little bigger 
airplane, it has folding wings, tail hook, and launches and 
recovers from the aircraft carrier. A larger bomb bay. By 
comparison, because of the configuration of the airplane, the B 
is a little bit smaller, and of course, it has other mechanisms 
in there which is the lift fan and the other nozzles. So it has 
less fuel capacity. So if you want to compare the F-35B range 
one way and then back, is about 450 miles, whereas the Navy 
version, the C model, is 650 miles.
    So we only have one C that has been constructed just now, 
so we are the last in line. The Air Force--actually the B, the 
Marines are first, then the Air Force and then the Navy. And so 
we have a little bit of a luxury of gaining the learning that 
has been done before we build into the Navy aircraft. The 
downside is that we are last, so we are having a struggle with 
our existing fleet.
    General Scott. Sir, we are very similar with our testing. 
As you know, in the testing phase, you will do some pull 
testing, where you are sitting there checking all the qualities 
and capabilities. And then we will work into the ground testing 
phase of the program, where we complete specifically designed 
ground tests for the aircraft. Some of it is just taxiing, and 
some of it is working around. And then the air testing, and we 
have just gotten into the air portion of that. I think we are 
about six months into that.
    So as you look at the capabilities of the aircraft, it is 
meeting all of the timelines. The unfortunate piece goes back 
to what we talked about, is that the schedule of those aircraft 
has not been as fast. So we are not as far along as we would 
like to be in the SDD phase of testing for the aircraft. But 
with the portions of the testing that we have done on the air 
and the ground, we are satisfied with where we are at. This is 
where we are sitting today as we look at those kinds of things 
and where we are at.
    Mr. Dicks. That is exactly what I wanted you to do. And is 
there--I would assume that some people are going to say, 
shouldn't you slow this down and take more time in development? 
I think that is exactly what you are going to do, and then slow 
down the acquisition of----
    General Scott. Sir, I think that is exactly what the 
restructuring has done, is when we took the ramp, and we 
streamlined it down from 2015 at 80 and the other things we 
were doing and we decreased the number over the FYDP of 122 
aircraft, we have said we are going to do in the RDT&E phase 
and the SDD phase; we are going to get through this. We are 
going to add aircraft to this phase to make sure that we get 
this part right. Obviously, if you don't get that right and you 
just push it into the next phase, it just dominoes.
    So there is lots of concurrency in this program. We will, 
prior to milestone C, have started LRIP, and we will start 
having aircraft because we are able to do that with the ability 
of this particular aircraft. But we have slowed it down to make 
sure we are on the right track through the OSD's restructuring.
    Mr. Dicks. I am going to give another chance, but I want to 
go to Mr. Bishop, who has not had a chance to question.

                   TACTICAL AIRCRAFT INDUSTRIAL BASE

    Mr. Bishop. Thank you very much, Mr. Chairman.
    I apologize, I had some conflicting meetings this morning. 
But let me go back. I understand that you already touched on 
the question of whether or not the tactical aircraft industrial 
base might be compromised with the trend that we are going with 
the tactical aircraft residing in the hands of just the Joint 
Strike Fighter Program that our industrial base might arguably 
be shrinking, which might jeopardize our future.
    Admiral Philman, we just got with a single contractor, 
which I understand where we are now, provided virtually all the 
tactical aircraft after completion of the F-18 program, in a 
few years, are you really concerned or don't you think it is 
logical that our industrial base will shrink to the point that 
we might be in jeopardy?
    General Scott. Sir, I think, as we look across where we are 
going, and as we talked earlier with the sixth generation, next 
generation air dominance aircraft, and that is out there in the 
future, and that will compete. The other thing is to realize 
that the industrial base, the prime contractor is only one 
piece of that. Within that prime contractor, there are major 
subcontractors that are doing many of the different parts on 
the F-35. So as they work--as the industrial base has changed 
with numerous contractors that we used to have, a lot of them 
have been subsumed by the larger contractors.
    So we are concerned. We are working that with a long-range 
persistent strike with the funds that you all gave us to enable 
us to keep moving on those kinds of things. And many of the 
things that are in the long-range persistent strike platform 
industrial base will apply because of the qualities of low 
deliverable and what we are looking at across the spectrum. So 
I think there is concern, but I think we are working with the 
industry partners to make sure that we are doing the right 
thing.
    Admiral Philman. Likewise, sir, for the F-18, our last 
aircraft that we are buying Es, Fs and Gs through fiscal year 
2013 for delivery in 2015. That is a line that is hot, and we 
can capitalize on it.
    As the Joint Strike Fighter line matures and as we 
understand it better, and as was mentioned by General Scott, 
what is the next generation? The sixth generation of the air 
dominance platform and those people who design aircraft, who 
know how to build them, I believe they will be focusing on that 
with some confidence.

                   AIRCRAFT OPEN SYSTEM ARCHITECTURE

    Mr. Bishop. Thank you.
    I want to ask you something about open systems 
architecture. The combat systems on the surface combatant ships 
and submarines, we are moving toward an open systems 
architecture, and we are told some advantages, such as cost, 
capability, and ease of modernization.
    Admiral Philman, the majority of the Navy's sea-based 
combat systems are moving into an open architecture 
environment. Do you see the same thing in your combat aircraft 
systems? If not, does the Navy have a plan for moving towards 
open architecture for the combat aircraft? And would this save 
money in the long run?
    General Scott, are the Air Force's combat aircraft 
operating under open systems architecture? If so, tell us. If 
not, why not?
    Mr. Dicks. Would the gentleman yield? Tell us what an open 
system architecture is first and then answer his question.
    Admiral Philman. Well, that specific term is probably open 
for debate as well. But the way I understand it is that you 
have a sphere of where we move information around, and anybody 
can enter it through whatever system. Eventually, we will have 
to have more modern and sophisticated systems that are already 
plug and play. In the meantime, we need to understand better 
how existing systems can plug in.
    I like to use a three-prong plug-in to be an example. UL 
verifies it, and you plug it in, and you have electricity. So 
if the systems that we have today, which we are already 
invested in and are important to our warfighting capability, as 
we build this larger architecture, they have to be compatible. 
As a matter of fact, for the F-35 specifically, the three 
services, the Chief of Staff of the Air Force, the Chief of 
Naval Operations and the Marine Corps all collectively went 
down to the center for--known as the Lighthouse, the Center For 
Innovation in Chesapeake specifically to better understand how 
the F-35, which is going to be the best sensor that we have 
right now, at least from the aviation platform; how does it 
integrate into the rest of the system, the ships, other 
aircraft, and all the things that are involved in land and 
space? So they are very, very focused on it.
    Now, I will tell you that the CNO has restructured the 
staff, our new N2N6, which is the Deputy Chief of Operations 
for Information Dominance; that is his focus area. That is what 
he and his whole staff do.
    Anyway, a little bit of a definition and where we are, I 
think the Navy has certainly devoted itself to open 
architecture. It will have to be in the future. And as you 
alluded to, if we do it correctly, we will be able to be more 
efficient and save money in the long run.
    General Scott. Sir, and it is not just an Air Force system 
and a Navy system and a Marine system and an Army system. The 
one thing that--we were very involved in setting this meeting 
up down at the Lighthouse. We did bring the Army in, too. And 
the Army is part of this systems of systems and the open 
architecture so, as we look at this umbrella, we can end up all 
talking to each other without anybody listening to us. And we 
can do it in an anti-access environment, and we can do it in a 
passive environment.
    If you start looking at where we could be with our 
aircraft, if you are active and you transmit in this 
architecture, you no longer are invisible. And no one is 
invisible, but you just radiated. We have got to figure that 
out, and that is one of the things that the three Chiefs went 
down to the Lighthouse, working with the industry partner 
there, is, how do we create this umbrella of open architecture 
enabling what I call the kill chain? And the kill chain does 
not start with a missile hitting an aircraft or a bomb hitting 
the ground; it starts well before that as you start working 
through this with these wave forms through these platforms to 
enable that individual.
    The lucky guy that gets to fly that aircraft really is 
involved in a whole lot of architecture out there that is 
making those kinds of things happen. And we are really involved 
in it, because we have seen that we haven't been as 
interoperable as we needed to be. A platform can't talk to a 
platform, so we build a gateway enabling them to talk to each 
other. We need to get away from gateways. We will probably have 
them for a while, but we need to make sure that F-35s talk to 
F-18s, talk to F-16s, talk to Aegis Cruisers, talk to the AOC 
Air Operations Center, talk to the entire systems of systems so 
that, as I need to pass information to you, I have the ability 
to do that as quickly as the speed of light so you can then 
prosecute the attack.
    And I hope that makes sense, but we are working really hard 
jointly to do this in a correct manner through all four 
services, because the ground guy needs to have this 
information.

                      COUNTERING ELECTRONIC ATTACK

    Mr. Dicks. Thank you. Mr. Young.
    Oh, let me go back to this countering electronic attack.
    Admiral Philman, does the Department have a requirement to 
address these issues? This isn't just about our aircraft but 
also our munitions. What is the Department doing to address 
electronic attack on our munitions? GPS, you know, the whole 
thing.
    Admiral Philman. Through the satellites or the systems that 
the Air Force have, we are working closely with them in the 
information dominance. I mentioned earlier our N2N6, they are 
taking this on so that we understand better what those jamming 
possibilities are, how they affect individual weapons or the 
system of weapons. So it is very serious. The adversary is able 
to take our very sophisticated weapons and negate them with a 
very small investment, and we don't like that. I think we are 
moving forward. I don't have the----
    Mr. Dicks. Do you think we are overly reliant on GPS 
weapons systems?
    Admiral Philman. I don't believe so. Those are 
complementary weapons systems. They get us into the ballpark in 
certain situations. But terminal guidance is part and parcel of 
many of our more sophisticated weapons. You put more than one 
seeker on it. You have a GPS that gets you into the targeting 
area, and then there is more refined targeting, either through 
imaging or other ways to get the final solution.
    Mr. Dicks. General Scott, do you have anything on this?
    General Scott. Nothing to add. In another venue, I would 
like to bring back to you at a higher level some of the 
capabilities that we do have in that environment.

                        EA-18G GROWLER AIRCRAFT

    Mr. Dicks. How is the Growler doing? The F-18 Growler?
    Admiral Philman. It is doing great, sir. The first two 
squadrons have transitioned. We IOC-ed last year, and they are 
on schedule. They are delivering on time, and they are 
performing very well.
    As you might know, we were plussed up by 26 aircraft this 
year because we were going to take the expeditionary squadrons 
and decommission them, but it was determined that that mission 
was very, very important to not only the Navy but to the whole 
Joint Force and to the country. So we are extending the life of 
the Prowlers for about 2 more years as we transition those four 
expeditionary squadrons into the 18G. And then we will have 10 
on the aircraft carrier. But they are performing well.

                         P-8A POSEIDON AIRCRAFT

    Mr. Dicks. What about the P-8A? How is that doing?
    Admiral Philman. That is doing well, too. We rolled the 
first airplane last June. And we have two--well, it is going to 
be three flying test articles and two that are stress articles. 
We are looking for an IOC in 2013, and looking at milestone C 
sometime this summer, and then we will go on contract.
    Mr. Dicks. There has been a lot of discussion about 
replacing AWACS, JSTARS, a whole series of airplanes. Would 
this aircraft we are using for the P-8A be a candidate aircraft 
for a replacement of these other systems?
    General Scott. Sir, currently the Air Combat Command is 
doing what I will call a Ground Moving Target Indicator, 
Analysis of Alternatives. The Initial Capabilities Document 
(ICD) came through the Air Force Requirements Oversight Council 
(AFROC), proved through the studies down at Capes, and we are 
looking at all capabilities to look at that particular platform 
from a GMTI.
    Subsequently, while we go through that, and that will take 
probably into the summer of 2011, we have a study going on 
through a partner that is looking at other capabilities that we 
can do in the interim. As we look at MQ-9s, can we put a pod on 
an MQ-9? Because one of the Combatant Commander's needs in 
Afghanistan and Iraq is a dismount capability. A slower speed 
as we look at those capabilities and being able to pick up you 
or me walking on the ground. We are working closely with that 
from an urgent operational need on an MQ-9 or a platform of 
that sort to enable us in the interim.
    If you ask, is the P-8 Analysis of Alternatives in the 
study that ACC is doing, I am sure that will be part of the 
analysis. We will look at the current E-8 and what we need do 
with that. We will look at the P-8. We will look at, is there 
something that we can do with Global Hawk and all the other 
things they will bring to us?

                            F-22 RELIABILITY

    Mr. Dicks. On the reliability on the F-22. The F-22 was to 
have at least 3 hours meantime between maintenance. What is the 
time now?
    General Scott. Sir, that is going to change a KPP, a Key 
Performance Parameter, in the document. And to do that, they 
are looking at changing that. And I don't want to get into 
exactly what they are going to do, but it is probably going to 
decrease. But they will bring that to the Air Force Requirement 
Oversight Council because that is a change. It will probably 
decrease. They are looking at somewhere between 1.5 and 3. And 
I will bring that back to you. That will come to the March 
AFROC, which I will chair, and I will get that back to you.
    Mr. Dicks. This is still improving, right? We are getting 
better?
    General Scott. Yes, sir, we are getting better.
    Mr. Dicks. Any other questions?
    Mr. Tiahrt.

                         LIGHT ATTACK AIRCRAFT

    Mr. Tiahrt. Going back to the Imminent Fury, there is an 
existing program going on now that the National Guard is doing 
for a light attack aircraft. And I want to look at combining 
those efforts. So I just wanted you to be aware of that, 
because I think we may have a program that is already ongoing 
that is similar to what you are pursuing under this Imminent 
Fury.
    General Scott. Sir, not from the Imminent Fury, but from 
the Air National Guard piece, since that runs with the Air 
Force, we know that, and we are working congruently on all 
things light-attack armed reconnaissance. Whether it is the 
Imminent Fury, the A-26B demonstration that the Air National 
Guard is working, as you know, and we briefed your delegation 
yesterday on the light-attack armed reconnaissance the Air 
Force is looking at for building partnership capacity and the 
Afghan, the light air support aircraft that they need, and they 
are looking forward to increase their capability in their Air 
Force.
    Mr. Tiahrt. What I am picking up is some of the folks in 
the Navy, Admiral, are sort of stiff-arming one company and 
embracing the other. And I am not--I am very concerned about 
American workers right now, and I think all of us are. And I 
just want to make sure, as this moves forward, why don't we 
look at the joint capability and what we are already doing with 
the Guard and make sure that we don't exclude somebody from the 
whole process.
    Admiral Philman. No, sir. And we want to learn from any 
projects that are going on that can inform the process needs to 
be used. And if I can find out who is being noncooperative, I 
would take care of that and follow up on that, sir.
    Mr. Tiahrt. Thank you very much.
    Mr. Dicks. Thank you gentlemen. This was a very good and 
productive hearing.
    And the Committee stands adjourned until 2 o'clock tomorrow 
when we will have a closed hearing on Fort Hood.
    [Clerk's note.--Questions submitted by Mr. Dicks and the 
answers thereto follow:]

                          ACES 5 Ejection Seat

    Question. Congress provided $5.6 million in FY09 and $1.6 million 
in FY10 to qualify and test the ACES 5 seat. The FY10 National Defense 
Authorization Act conference report encourages the Air Force to 
consider the ACES 5 as a second source for the F-35 program.
    Please provide the committee with the current status of the 
appropriated funds intended for this purpose, including your estimated 
timetable for putting this funding on contract to qualify the seat?
    Answer. For the Fiscal Year 2009 Advanced Concept Ejection Seat 
(ACES) $5.6M Congressional add, the Air Force executed approximately 
$1.1M for testing and an ejection seat cost benefit analysis that 
compared the ACES II and ACES 5. A second analysis to study cost 
savings and benefits of ACES 5 for the F-35 is being considered and 
will cost an additional $500,000. Finally, the Air Force is planning to 
move the remaining Fiscal Year 2009 and Fiscal Year 2010 funds to an 
existing Navy contract. Once complete, the Fiscal Year 2009 funds 
should be obligated and on contract within two months and the Fiscal 
Year 2010 funds shortly thereafter. These funds would be used to 
conduct ACES 5 qualification and testing.
    Question. Please describe the substantial savings and benefits 
associated with qualifying and testing the ACES 5 ejection seat, 
including any acquisition and life-cycle maintenance savings, as well 
as any readiness, training, and safety benefits to the Air Force?
    Answer. While a recently completed cost benefit analysis showed the 
cost benefit of an ACES 5 would not overcome upfront costs, ACES 5 
would provide several benefits. An increased safe ejection envelope 
over the ACES II is the most substantial benefit. The safety 
improvements would result from key updates such as integrated limb 
restraints and passive head and neck protection. With these 
enhancements, the ACES 5 could effectively prevent injuries, especially 
those caused by limb flail. Other benefits of the ACES 5 include 
reduced maintenance burden and improved aircraft availability. All 
aircraft that use ACES II would realize savings with an ACES 5 due to 
reduced maintenance, but upfront costs required for ACES 5 development, 
qualification, and procurement are not recovered by maintenance 
savings.

    [Clerk's note.--End of questions submitted by Mr. Dicks.]
                                       Thursday, February 25, 2010.

                               FORT HOOD

                               WITNESSES

GENERAL CARTER HAM, UNITED STATES ARMY, ADVISOR TO THE INDEPENDENT 
    REVIEW
BRIGADIER GENERAL RICHARD W. THOMAS, ASSISTANT SURGEON GENERAL (FORCE 
    PROTECTION) OFFICE OF THE SURGEON GENERAL

                              Introduction

    Mr. Dicks. The committee will come to order. I would like 
to recognize the Ranking Member, Congressman Young, for a 
motion.
    Mr. Young. Mr. Chairman, I move that those portions of the 
hearing today which involve sensitive material be held in 
executive session because of the sensitivity of the material to 
be discussed.
    Mr. Dicks. All those in favor, say aye.
    Those opposed.
    The ayes have it. The motion is agreed to. So ordered. 
Thank you Mr. Young.

                   Chairman Dicks' Opening Statement

    Today the Defense Appropriations Subcommittee will receive 
testimony from General Carter Ham, U.S. Army, Advisor to the 
Independent Review of the Fort Hood shooting, and Brigadier 
General Richard W. Thomas, an Army physician who serves as the 
Assistant Surgeon General, Force Protection, Office of the 
Surgeon General.
    On November 5, 2009, Major Nadal Malik Hasan, U.S. Army, 
entered the Army base at Fort Hood, Texas and opened fire on a 
group of fellow soldiers. Before he could be stopped by law 
enforcement officers, Hasan fatally shot 13 members of the U.S. 
Army and injured 43 others, most of them military personnel. 
The alleged gunman, Army Major Nadal Hasan, is an Active Duty 
Army psychiatrist. He has been charged under article 118 of the 
Uniform Code of Military Justice with 13 counts of premeditated 
murder, and, under article 80 of the Uniform Code, with 43 
counts of attempted premeditated murder.
    I am troubled by the circumstances that led to the 
shooting. In part, it appears that this may have been the 
result of military officers not following existing policies and 
procedures. Specifically, there are numerous stories in the 
press that the alleged shooter's superiors failed to document 
and take action because of the negative information in his 
official record.
    We have questions. Why did it happen? Could it have been 
prevented? Was the response adequate? Are the needed resources 
available to care for the Fort Hood community? More 
importantly, we all share the same intent to ensure that 
everything possible is done so that this does not happen again.
    Gentlemen, we look forward to your testimony and to a 
spirited, informative question-and-answer question.
    Now, before we hear your testimony, I would like to call on 
the Ranking Member, Mr. Young, for his comments.

                      Opening Remarks of Mr. Young

    Mr. Young. Mr. Chairman, thank you very much, and I want to 
welcome our very distinguished guests. I usually am very 
pleased with the hearings that we have and the information that 
we gain about the defense of our Nation and the support of our 
troops. Today, I am not sure that we are going to be really 
happy to hear what we are going to hear, because we are dealing 
with a tragic incident, discussing one of our own servicemen 
who took the lives of 13 of his fellow soldiers. I know that 
weighs heavily on your mind, as it does all of us, and we are 
not suggesting or pointing the blame at anybody at this point, 
but we do have questions.
    The facts surrounding the incident appear to be clear, but 
the breakdowns and the gaps that allowed it to happen are still 
being examined, and I am sure you are anxious to get to the 
bottom of that, as we are, and whatever steps that should be 
taken to prevent a tragedy like from this happening again.
    So I thank you for your efforts and look forward to your 
testimony. We are anxious to learn as much as we can about 
this. So thank you very much.
    Mr. Dicks. General Ham, you may proceed with your 
statement.

                    Summary Statement of General Ham

    General Ham. Thank you Mr. Chairman and Congressman Young. 
Members of the committee, it is indeed an honor to appear 
before you today to discuss the findings and recommendations of 
the Department of Defense Independent Review relating to Fort 
Hood. Joining me today is Brigadier General Thomas, Army 
Assistant Surgeon General for Force Protection.
    As the Chairman indicated, on November 5, 2009, a gunman 
opened fire at Fort Hood. Thirteen people were killed, 43 
others wounded. It is important to remember that we extend our 
deepest sympathy to the families of the fallen, to those 
wounded, to their families, and all those touched by this 
tragic event. Indeed, one of the underlying principles guiding 
our efforts in conducting the review that we are here to 
discuss was that those of who are privileged to participate in 
this process felt an obligation to speak for the 13 fallen who 
are no longer here to speak for themselves.
    Following the shooting, Secretary Gates established the 
Department of Defense Independent Review related to Fort Hood 
and appointed Admiral Vern Clark, United States Navy, Retired, 
and the Honorable Togo West to co-chair this effort. Since 
Admiral Clark and Secretary West could not be with you here 
today, as one of the senior military officers who participated 
in the review, I am pleased to be here as their representative.
    Events such as the Fort Hood shooting raise questions about 
how best to defend against threats posed by the external 
influences operating on members of our military community. The 
challenge for the Department of Defense is to prepare more 
effectively in a constantly changing security environment. It 
is with this challenge in mind that Secretary Gates directed 
the Independent Review to assess whether there are programs, 
policies, or procedural weaknesses within the Department of 
Defense that create vulnerabilities to the health and safety of 
our service members, our DoD civilians, and their families.
    Secretary Gates directed the review panel to take a careful 
look at personnel policies, force protection measures, 
emergency response procedures, and support to our military 
health care providers. He also tasked the Independent Review to 
evaluate the Army's application of its policies, programs, and 
processes as applied to the alleged perpetrator. The review 
focused on the noncriminal aspects of the shooting.
    Secretary Gates gave very clear direction that the panel 
not interfere with the intelligence and military justice 
investigations related to the Fort Hood incident. Secretary 
Gates stated that he intends to call upon the military 
departments to conduct an in-depth follow-on review in certain 
areas addressed in our report, and indeed that effort has 
already begun.
    The Independent Review's report to the Secretary of Defense 
was released to Congress and to the public on January 15 of 
this year. The detailed results and findings associated with 
the alleged perpetrator are found in a restricted annex that is 
not publicly released at this time. It is my understanding that 
you have been afforded the opportunity to review the restricted 
annex.
    The overall report was much broader than the assessment of 
the alleged perpetrator, however. The report includes 
recommendations to strengthen the Department of Defense's 
ability to prepare for and respond to potential threats. Before 
discussing the findings, I would like to highlight some 
observations from the co-chairs concerning the events of 
November 5.
    First, as Secretary West stated, no amount of preparation 
is ever too much. Leaders at Fort Hood had anticipated mass 
casualty events in their emergency response plans and 
exercises. The initial response to the incident demonstrated 
this. It was prompt and effective. However, DoD must be 
prepared to more diligently plan and to seek to envision the 
next incident.
    Second, the Department must be attentive to today's 
hazards. One of the most significant emerging concerns in the 
protection of our force is the internal threat. The review 
concluded that DoD needs to develop a better understanding of 
the forces that cause a person to become self-radicalized and 
to commit violent acts.
    Third, courage and presence of mind in the face of crisis 
can carry the day. This happened at Fort Hood. Courageous acts 
were key to preventing greater losses that day. And as the 
report reveals, these attributes alone are not enough to 
protect our force. DoD must exercise the foresight necessary to 
identify the menace of self-radicalization and its often 
resultant violence and to act preemptively.
    The review revealed shortcomings in the way DoD is prepared 
to deal with internal threats and, in particular, the threat 
posed by troubled and potentially dangerous individuals and 
groups. We found that commanders are essential to this effort. 
Existing policies within the Department are not optimized for 
countering these threats. The policies reflect insufficient 
knowledge and awareness required to help identify and address 
individuals likely to commit violence. And while DoD focuses 
very effectively on many things, guidance concerning workplace 
violence and the potential for self-radicalization is 
insufficient.
    DoD policy on prohibited activities is limited and only 
addresses active and physical participation in groups that may 
pose threats to good order and discipline. This lack of clarity 
for comprehensive indicators limits commanders' ability to 
recognize potential threats.
    Complicating the force protection challenge is the diverse 
nature of responsibilities that have evolved within DoD since 
9/11. Because no senior DoD official is assigned overall 
responsibility for force protection, synchronization is 
difficult. Moreover, there is a lack of DoD policy integration. 
This has resulted in a lack of well-integrated means to gather, 
evaluate, and disseminate the wide range of behavioral 
indicators that could signal an insider threat.
    While leaders at Fort Hood responded well under the stress 
of a rapidly evolving crisis, we are fortunate that we faced 
only one incident and at only one location. Real-time 
information will be critical should we face a situation of 
multiple events. Synchronizing the DoD Emergency Management 
Program with the Federal requirements for the National Incident 
Management System will ensure the Department can integrate 
effectively with all partners in response to any and all 
emergencies.
    Following the release of the panel's review report on 
January 15, Secretary Gates directed the Honorable Paul 
Stockton, Assistant Secretary of Defense for Homeland Defense 
and America's Security Affairs, to assess the review's findings 
and to make recommendations for implementation. Secretary Gates 
established a March deadline for the immediate fixes 
recommended in the review, and major institutional changes 
should be identified by June.
    The Secretary of Defense also forwarded the individual 
review panel report to Army Secretary John McHugh to address 
recommendations concerning holding Army personnel responsible 
for supervising Major Hasan accountable. On January 15, that 
same day, the Secretary of the Army directed me to conduct an 
accountability review to identify whether any personnel were 
responsible for failures or deficiencies in applying Army 
programs, policies, and procedures to the alleged assailant.
    The response by the Fort Hood community in the aftermath of 
this tragedy serves as a reminder of the strength, resiliency 
and character of our people. The Independent Review Panel was 
very impressed with the military civilian response. In a 
community where we may have expected the fabric of trust to 
fray, it remained intact and indeed grew stronger through 
mutual support. The thrust of the review effort is to identify 
all the possible steps that the Department of Defense can take 
to prevent similar tragedies in the future.
    Mr. Chairman, this concludes my statement. Again, I thank 
you for the opportunity to appear before you today. General 
Thomas and I look forward to your questions.
    [The statement of General Ham and DoD Independent Review 
report follow:]

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                          SELF-RADICALIZATION

    Mr. Dicks. General, thank you for a very comprehensive 
report. We, too, salute those people who dealt with this 
emergency, came in so quickly and stopped the violence. We only 
wish they could have gotten there sooner. We, too, sympathize 
with the families and the friends of all of the fallen victims 
and those that are injured and hopefully recovering.
    For a few years I served on the Homeland Security Committee 
and one of the topics that we discussed in our committee 
deliberations were self-radicalization--efforts in the United 
States where certain people become radicalized. I think that 
your report is very balanced here, saying, Should people have 
recognized this, and especially those people who were in a 
supervisory position and had to make various reports on fitness 
of Major Hasan? That is the question I have.
    When you went back and looked at this, were there any 
indications? I understand from some press reports that he was 
very outspoken in his opposition to the war in Iraq, to the war 
in Afghanistan, and made other statements that, had people been 
properly trained, they might have picked up on the fact that 
this sounds like somebody has been radicalized, and should 
there be concern by his supervisors and superiors about the 
potential things he might do.
    Now can you tell us anything about that, about the people 
who were in charge of his supervision; and did they make 
reports, or what happened?
    General Ham. Yes, sir, I can. If I may speak first more 
generally. It is clear in our findings that identifying the 
indicators that someone within our Department, in uniform or 
civilian, or a family member, is trending toward violent 
activity, those indicators are not well identified nor well 
understood across the force. So we have not adequately equipped 
our commanders and supervisors with the information or things 
that they ought be looking for in an individual who may be 
starting to travel on a path toward self-radicalization.
    Already, the services have taken some of that under 
advisement. The Army has already published a list that says 
these are some of the indicators that commanders and 
supervisors should be attentive to in members of their force so 
that they can then intervene, correct that behavior, and try to 
prevent someone from progressing down a path of self-
radicalization.
    With regard to the specifics of Major Hasan, first, I would 
advise that, as indicated in my opening statement, the 
Secretary of the Army has charged me with the conduct of an 
Army investigation to determine measures of accountability. 
That investigation has not yet been received by Secretary 
McHugh. So it would be inappropriate at this time for me to 
talk about the individual aspects of accountability.
    But what I would tell you, Mr. Chairman, it is very clear 
in the DoD report that there were individuals in supervisory 
positions who had the responsibility to educate, train, and 
develop Major Hasan, who did not do that effectively.

                      POLICIES FOR SELF-PROTECTION

    Mr. Dicks. Now if you are going to have policies for self-
protection, and there has been somebody named--I guess you are 
going to have somebody who is going to be in charge of force 
protection. Wouldn't this be part of every base, every unit, 
having some discussion about self-protection?
    General Ham. It would, Mr. Chairman. But I think it has to 
begin at the Department of Defense level, with adequate 
policies and guidelines to the services and the services within 
their structure, so that we have consistency of understanding 
and of application from top to bottom. And what we found is 
that is not the case. There is not at the Department of Defense 
any particular individual or office that has overall 
responsibility for force protection. But, rather, those 
responsibilities are divided amongst several of the Under 
Secretaries and Assistant Secretaries. That is probably not 
conducive to a coherent and effective system.
    Mr. Dicks. Has that been changed? Has that been changed 
yet, or is it in the process of being changed?
    General Ham. It is, Mr. Chairman. One of the 
recommendations that the co-chairs submitted to Secretary 
Gates, that he do just that; that he identify a particular 
office to lead that effort. To the best of my knowledge, that 
final determination has not been made, but I think it is 
instructive that the Secretary of Defense has appointed the 
Assistant Secretary for Homeland Security Defense to lead the 
follow-on effort of the issues that were identified of the Fort 
Hood investigation. So perhaps that is an office where those 
responsibilities might preside. But to the best of my 
knowledge, that has not been a final determination.
    Mr. Dicks. Mr. Young.
    Mr. Young. Thank you, Mr. Chairman. General, in this case 
we were dealing with an officer who had served at Walter Reed, 
a medical institution. A similar situation could possibly exist 
in some other part of the military, not just medical, in a 
hospital or a doctor. Is that correct?
    General Ham. Yes, sir, that is correct.

                          IDENTIFYING TRIGGERS

    Mr. Young. So anything that we do on the basis of 
determining what type of trigger we might look for, what type 
of activity we might look for, should not only be limited to 
Walter Reed or medical facilities, but other levels of the 
United States Military.
    General Ham. Congressman, that is exactly right. The 
recommendation from this review is that there be a Department 
of Defense-Wide effort so that all of the services, all the 
branches of service and the DoD civilians are all covered by 
whatever policy is resultant from this. It is a Department-wide 
issue.

               ESTABLISHING APPROPRIATE OFFICE FOR POLICY

    Mr. Young. I don't think we want to go on a witch hunt, and 
just because somebody has a bad day and grumbles about 
something, I don't think we necessarily want to hold them up to 
scorn. But we do have to have an effective system for creating 
a real suspicion. I assume that eventually we are going to come 
up with a list of items that should be watched for, should be 
reported, that would indicate the possibility of someone 
becoming a radical anti-American or anti-military. I assume 
that is part of the work that you are doing.
    General Ham. It is, Congressman. The recommendation in the 
report is that the Department seek to establish indicators of 
tendency toward violence, self-radicalization, extremist 
behavior, however motivated, whether that is religious or 
ideological, or other. But the report also acknowledges that 
while such an effort is helpful and instructive to commanders, 
it is not in and of itself satisfactory to completely identify 
the risks that might be developing within our force.
    It gets to the issue of judgment and officership. I think 
that is where in this report to the Secretary of Defense, 
Secretary West, and Admiral Clark focused heavily on the 
judgment or, in some cases, lack of judgment as applied by 
officers who were in supervisory positions with regard to Major 
Hasan.

                   REVIEW OF SOLDIERS COMMUNICATIONS

    Mr. Young. General, in that review leading up to that 
report, did you identify some of these people that should have 
been alarmed by some of Hasan's activities and some of his 
words and statements, some of the connections that we have 
found out about, e-mail communications with Islamic leaders? Do 
you know some of the people that saw these things and sort of 
reported them?
    General Ham. Sir, we did. But there were a couple of 
cautions. First, again we were reminded by the Secretary of 
Defense that we were not to tread into or interfere with the 
Presidentially directed review of intelligence matters. So when 
we would bump up, for example, the e-mails that had been 
discussed in the public domain where Major Hasan had at least 
attempted e-mail contact with a radical imam in Yemen, we did 
not pursue that, based upon the Secretary of Defense's 
guidance.
    Mr. Young. Where did the Secretary of Defense get that 
guidance?
    General Ham. Sir, I don't know. The guidance in the terms 
of reference that the Secretary of Defense issued to the co-
chairs--to Secretary West and Admiral Clark--was explicit so as 
to not interfere with the intelligence investigation.
    Mr. Dicks. Would you yield for one second?
    Mr. Young. Sure, Mr. Chairman.

                         MAJOR HASAN'S BEHAVIOR

    Mr. Dicks. Did anybody receive a complaint about Hasan? Was 
there anyone who made a complaint about his activities?
    General Ham. Sir----
    Mr. Dicks. Chain of command or his supervisors. Did anyone 
come forward prior to this all happening and say, We think 
there's something wrong here?
    General Ham. Sir, yes. In the terms of reference and in 
discussion with the Secretary of Defense, the purpose of the 
Department of Defense review, the review we are here to 
discuss, was specifically not intended to identify individual 
accountability.
    Mr. Dicks. We are not asking you to identify it, we are 
just asking you to tell us did someone connect the dots and 
say, this person has a problem, and then other people didn't 
respond to that and didn't take appropriate action. That is 
what we want to know.

                           ARMY INVESTIGATION

    General Ham. That is correct. 'There were individuals who 
saw that Major Hasan's behavior at various stages was not 
consistent with what we expect of a military professional and 
identified that, in some cases to superiors, and subsequent to 
the Army investigation which I have been charged by Secretary 
McHugh to conduct, that was a matter for that investigation.
    Mr. Dicks. Were there any prior investigations? Did anybody 
do anything when these reports were initially made before the 
incident?
    General Ham. We found no evidence of prior investigations.
    Mr. Young. Thank you, Mr. Chairman. In fact, that was my 
last question. But then I will just ask one more question.
    Did any of those superiors who were told that there was 
some interesting behavioral practices by Hasan, did any of 
those superiors do anything about it?
    General Ham. Congressman, yes, some did. But some did not. 
It is I think clear now, from information that is widely known, 
that the actions that were taken were ineffective in modifying 
Major Hasan's behavior.
    Mr. Young. General, thank you very much. Mr. Chairman, 
thank you.
    Mr. Dicks. Mr. Visclosky.
    Mr. Visclosky. Thank you, Mr. Chairman. Generals, thank you 
very much.

                  POST-DEPLOYMENT MEDICAL ASSESSMENTS

    In your testimony and report, it mentions that the pre- and 
post-deployment medical assessments do not provide a 
comprehensive assessment of violent behavior and indicators. 
What policies and procedures do need updating or broadening to 
have that positive effect?
    General, also for the 2011 budget, do you have moneys 
included in your request to pay for any changes in updating 
that you may need?
    General Ham. Sir, if it is acceptable, I will defer to 
General Thomas.
    General Thomas. Good afternoon, sir. Sir, initially with 
the post-deployment health assessment and post-deployment 
reassessments, we found over time that the questions that are 
comprised in that questionnaire are inadequate to give us the 
full scope of measure we believe is going to give us an 
adequate picture for the mental or behavioral health states of 
returning soldiers; in this case, redeploying soldiers. What we 
have done is we are actually undertaking a comprehensive 
overview. We have modified the questionnaires, the 2900s, added 
some additional questions.
    We have also instituted a policy where we are doing more 
face-to-face behavioral health interviews with returning 
soldiers, specifically those returning from Iraq and 
Afghanistan, in this case. And we have initiated, in addition 
to that, some virtual capabilities, which is quite exciting for 
us.
    Mr. Visclosky. Is part of the problem when they fill the 
assessment out that, I want to get out, and if I cause concern, 
this is going to delay my departure from the military. Is that 
part of the problem here?
    General Thomas. Sir, that is accurate. We found that 
initially the timing of administering the post-deployment 
health assessments is key. If we do it immediately upon return 
of a unit, individuals oftentimes will blow through that, as 
you described, and try to get home as quickly as possible. If 
we delay that for a period of time, 7 to 14 days, perhaps, we 
found also a statistically significant increase in improvement 
in the accuracy of the answers soldiers will provide you.
    Mr. Visclosky. So that has been part of the program 
adjustment as well, the timing of the questionnaire and the 
assessment?
    General Thomas. Yes, sir, that is correct.
    Mr. Visclosky. Is there a monetary issue here that you may 
need help on, or this has been essentially addressed at this 
point?
    General Thomas. I think we are adequately funded to make 
all those adjustments that you describe.
    General Ham. Sir, if I can add. From my perspective as a 
currently serving Commander of the U.S. Army in Europe, one of 
the valuable tools that the Congress has allowed us to execute 
are these military family life consultants. And we have had a 
significant increase in the availability of those personnel 
that are available in our military communities to counsel 
redeploying soldiers and their family members. That has been a 
tremendous benefit. In my anecdotal assessment, it has been 
more beneficial to have that face-to-face discussion in a 
secure, confidential setting, than it has been the answering of 
the postdeployment surveys.

         INFORMATION-SHARING AGREEMENTS AMONG VARIOUS AGENCIES

    Mr. Visclosky. One other question, if I could, Mr. 
Chairman. On the criminal investigation and organizations, 
apparently there is limited ability to search and analyze 
information outside of DoD's own databases. What new standards 
are being put into place to establish information-sharing 
agreements with Federal, State and local law enforcement 
organizations; and, again, would there be a money issue for you 
in your 2011 budget to accomplish that?
    General Ham. Sir, two issues. First, there is a challenge 
inside the Department of Defense with information sharing as 
well. For example, there is no DoD-wide criminal database. The 
Navy's criminal----
    Mr. Visclosky. When you say that, Army would have a data 
base; Navy.
    General Ham. Yes, sir, that is correct. What we identified 
through the DoD review is that the Navy's Criminal 
Investigative Service has a pretty good model, and our 
recommendation to Secretary Gates is that he look at that for 
application across the Department so as to get intradepartment 
sharing for that database. I am not an expert, but my 
expectation is that there would be some resource implications 
should the Secretary of Defense wish to implement that 
particular recommendation of the review.
    To your larger question of interagency information sharing, 
it is also clear that the Department of Defense's ability to 
share information and to access information from outside of the 
Department of Defense is also somewhat limited. In the 
Intelligence Community there are protocols in place, but fairly 
narrowly defined.
    So one of the major findings of the DoD review was that 
information sharing, both within the Department of Defense and 
external, within the broader whole of government, are issues 
that need to be studied, and will be part of this follow-on 
review that is currently ongoing within the Department of 
Defense and, again, not part of this review. But I could not 
see how you could implement those measures without there being 
at least some resource implications.
    Mr. Visclosky. I would close on this. If there is an 
identification as to what those dollar amounts might be, if 
that could be shared with this subcommittee in anticipation of 
markup, that would be terrific.
    Gentlemen, thank you very much. Mr. Chairman, thank you.
    Mr. Dicks. Mr. Frelinghuysen.
    Mr. Frelinghuysen. Has anybody been separated from the 
service as a result of this tragedy?
    General Ham. I am sorry?
    Mr. Frelinghuvsen. Has anybody been separated from the 
service as a result of this tragedy
    General Ham. Not to my knowledge.
    General Thomas. No, sir, I am not aware of any. I could 
check on that. But there may be some folks who have medical 
separation related to injuries. I think it is premature. I 
don't think we have any, that I know of.
    Mr. Frelinghuysen. Nobody in the chain of command here.
    General Thomas. Not that I am aware of.
    Mr. Dicks. Is this because the investigations aren't 
complete?
    Mr. Frelinghuysen. Ongoing.
    General Ham. I am sorry. Perhaps I misunderstood you.
    Mr. Frelinghuysen. I wasn't talking about the injured. I am 
talking about those who were in the chain of command who should 
have known before somebody was sent to Fort Hood that this 
gentleman was sent to Fort Hood.
    General Ham. Sir, that is precisely the direction that 
Secretary McHugh gave to me, to conduct an Army investigation 
into matters of accountability. The Secretary of the Army has 
not yet received my report or recommendations. I expect he will 
soon and that he will make a decision. But to date, no, sir.

              DOD POLICY REGARDING RELIGIOUS ACCOMMODATION

    Mr. Frelinghuysen. I want to focus on page 16, finding 2.7, 
``DoD policy regarding religious accommodation lacks the 
clarity necessary to help commanders distinguish appropriate 
religious practices from those that might indicate a potential 
for violence or self-radicalization.'' That is all within 
quotation marks.
    Going on to the Discussion, which is of interest I think to 
the members, if requests--and this is in quotation, ``If 
requests for religious accommodation that compete with mission 
requirements were recorded and shared among commanders, 
supervisors and chaplains, it would likely establish a baseline 
from which to identify deviation within the services and the 
Department of Defense. At present, there is confusion about 
what is acceptable.''
    The recommendation in this section is, ``Promptly establish 
standards and reporting procedures to clarify guidelines for 
religious accommodation.''
    Where do we stand relative to those recommendations? Are 
they so recent that nobody's got around to committing enough 
time and effort to sort of rewrite the whole standard operating 
procedure here?
    General Ham. Sir, a two-part answer. First, when Secretary 
Gates announced the receipt of this review, one of the first 
things he said in his public statement was a reminder to those 
of us in the service that those of us who are privileged to 
command and exercise the supervision of our servicemembers and 
DoD civilians, we must make hard decisions and we must be 
accountable, and we must hold our servicemembers accountable 
for their actions. I think that was a clear reminder to us that 
we have authorities now to take action when we think someone's 
behavior, conduct, is outside the norm.
    Mr. Frelinghuysen. The public perception here, and this is 
a closed hearing, is that there is sort of a political 
correctness here. That people were afraid to invade that 
because they didn't want to be sort of identified with, shall 
we say, profiling, which is obviously a loaded word.
    General Ham. Sir, we did not find a culture of that, but we 
did find related to this specific finding, confusion. For 
example, there were some individuals with whom we spoke, both 
peers and supervisors of Major Hasan's, that were confused 
about First Amendment rights and the free practice of religion. 
And that is the essence of this finding.
    We owe commanders and supervisors some clearer guidance as 
to what is acceptable and what is not acceptable with regard to 
religious accommodation across the Department of Defense.
    Mr. Frelinghuysen. Thank you, Mr. Chairman.
    Mr. Dicks. On that point, and then I yield to Mr. Moran, 
what would have been the appropriate thing to have done if 
somebody who was a supervisor, commanding officer, whatever, 
had made a judgment that this behavior was not acceptable; what 
should they have done?

                      SUPERVISOR'S RESPONSIBILITY

    General Ham. Sir, my experience as a commander, when you 
have a servicemember who is out of bounds, whose behavior, 
conduct, and other activities are seemingly at odds with the 
service values and with programs and procedures that are well 
established, it is that commander's responsibility or that 
individual supervisor's responsibility, to call them on that 
and to counsel them and to say, Listen, soldier, this is not 
what we do in the service, you cannot do this.
    This occurs all the time across all services, when 
individuals, particularly young individuals--and it is 
important to remember that though at the time of the incident 
Major Hasan was a major, he had really not had any operational 
experience. He had been exclusively in the training and 
education realm. But supervisors have a responsibility to make 
sure that those under our charge understand our values, 
understand our policies and procedures, and apply them in their 
daily life. And when they don't, we have adequate remedies to 
deal with that. That did not occur.
    Mr. Dicks. Is that like court martial or something like 
that?
    General Ham. Mr. Chairman, in extreme cases, yes, if we 
have such. But more often we have, particularly, again, with 
our younger servicemembers, both officer and enlisted, it is a 
more senior member's responsibility to guide them and to 
counsel them and to try to shape their behavior in a more 
productive way so as to prevent this from getting to the level 
where more drastic measures such as nonjudicial punishment or 
court martial or separation may be appropriate.
    Mr. Dicks. Is there any indication that anybody counseled 
him?
    General Ham. There is, yes, sir.
    Mr. Young. Mr. Chairman, let me make a quick follow-up on 
your subject here. General, if a member of the military 
advocates Islamic jihad against the United States, is that 
considered religious freedom, or is that something--what I 
think it is, which is a threat to the United States?
    General Ham. Congressman, what we found in this situation 
was, again, confusion. Adding to that confusion, as mentioned 
about the confusion about religious freedoms, is compounded in 
this academic setting of what is allowable within academic 
freedom dialogue. Again, it is relatively easy now to look back 
in hindsight at some of the things we know in the public domain 
that occurred and say, This is beyond the bounds of acceptable 
behavior. But my sense is we owe better guidance to our 
personnel to allow them to make those calls.
    Mr. Dicks. Mr. Moran.

                 ACTIONS OF MAJOR HASAN PRIOR TO ATTACK

    Mr. Moran. Thanks, Mr. Chairman. Generals, I have read 
through the actions that Major Hasan took in the last several 
hours--actually, last 24 hours before this violent act. He was 
hardly being secretive. He was sending out messages. I don't 
know whether he wanted to be stopped or not, but he indicated 
to someone, ``Everything's going to change after tomorrow,'' 
and other statements like that. Even the things that he did 
immediately prior to the shooting.
    Would you go through some of that, that might have been 
indications of something dramatic to come? It is not in any of 
the stuff that you provided the committee, but I think the 
committee members might be interested. I am sure you are aware 
of his immediate actions in the hours before he murdered these 
people.
    General Ham. Congressman, actually that was beyond the 
scope of this review. Again, with the specific direction by the 
Secretary of Defense that we not interfere with the criminal 
investigation, those activities which immediately preceded the 
5th of November incident were not matters with which this 
review dealt. And so my familiarity with them, frankly, is what 
I have seen in the public domain, not anything that we 
conducted reviews of here.
    Mr. Moran. Well, the problem I have with that is that here 
we are talking about implementing all of these systemic changes 
and processes and procedures and policies, when the best way to 
deal with this might be something more direct and specific. I 
think this was something of an aberration. I don't know that it 
needs systemic change to the procedures that we are currently 
undergoing. I do think there was laxity in terms of his 
immediate superiors identifying a problem and dealing with it. 
That was missing. But he gave out lots of warning signs. They 
should have been picked up.
    Before we go transforming the way in which we conduct 
ourselves throughout the force, I think it is useful to 
consider whether there aren't more immediate things that could 
have been done. Sometimes it seems like we have a horrible 
violent act, and so we declare war, when there may be other 
ways that are more direct that would deal more appropriately 
with it.
    What do you think, General?
    Let me ask the Brigadier General.
    General Thomas. Sir, I agree with your comments. And 
specifically in relation to Major Hasan's case, I am not privy 
to the details of the investigations, other than what has been 
in the public domain, as General Ham mentioned, in the media. I 
don't have any information beyond that. But I think in general, 
your comments absolutely hold merit. I think it is an emerging 
science, and if you take a look at indicators that are out 
there that may give you some sense of whether someone is going 
to be dangerous or commit workplace violence, there is a lot of 
research that is ongoing out there now. And, quite frankly, it 
will leave you unsatisfied, Congressman.
    There is just not a lot of I think tangible evidence that 
would point to you definitively that some individual may commit 
an act. There are a lot of indicators whether someone is going 
to commit suicide or violence in the workplace, but it is an 
really an inexact science.
    Mr. Moran. Well, I appreciate that. But I would like to 
just suggest, Mr. Chairman, that before we go pursuing 
expensive transformational measures to deal with something like 
that, we really ought to consider when an individual acts in an 
abhorrent fashion, throws out signals that he is going to do 
something dramatic, indicates that everything is going to be 
different after tomorrow, he buys weapons, he acts strange in 
his house, he gives indications to his neighbors, it seems to 
me we ought to be at least privy enough to that information so 
as to consider whether this could not have been dealt with in a 
more direct, efficient manner, than considering force 
transformation policies that I don't think really apply.
    Of all the Muslims in the military, we have one guy. He was 
messed up. He had no business communicating with al-Awlaki in 
Yemen. That should have been detected. But within the 24 hours 
he committed this crime, there were so many indications for a 
superior to have gone to see him and say, Hey, Hasan, what's 
going on here, Major? What are you up to? I think he clearly 
would have gotten an indication that something was 
extraordinarily wrong and somebody needed to intervene.
    Thank you, Mr. Chairman.
    General Ham. Mr. Chairman, may I? Congressman, I am 
absolutely in agreement with what you said. The co-chairs of 
this report made it clear that leading up to the incident, over 
the course of Major Hasan's development there were indications, 
there were signs, some of which were missed, some of which were 
ignored, that could have altered what happened on the 5th of 
November. But I think it is important also--and the 
accountability, again, the Army accountability investigation is 
focused especially on that aspect of it: Did people not do what 
they were supposed to do in that regard?
    But, secondly, in a broader sense this is a threat. Our 
programs and procedures are largely relics of our subversion 
and espionage, looking for spies. Looking for spies is still 
important. We ought to continue to look for spies. But we now 
also have to look for a different kind of threat that is 
emerging within the forces. I am confident we are good enough 
to do both.
    I agree with you, some of this is individual level 
responsibility--people who knew or should have known and should 
have taken actions that did not, and folks ought to be held 
accountable for that.
    Mr. Moran. That was a very good observation. I appreciate 
that. Both at Walter Reed and Fort Hood there were people who 
should have acted. And then within those 24 hours before this 
incident occurred, there were clear indications that should 
have been followed up on. But I thank you very much for your 
testimony.
    Mr. Dicks. Mr. Kingston.

                           PREVIOUS INCIDENTS

    Mr. Kingston. Thank you, Mr. Chairman. I wanted to 
associate myself with the comments of Mr. Moran.
    It does seem to me, General, that this is a little bit 
politics, a little bit public relations, and also an act of 
good will towards the families, which is very proper to do. But 
at the same time, it doesn't seem to me that we have to have 
new programs, new spending, new procedures. It seems to me--I 
think Mr. Moran has really hit something that is a concern of 
mine. Historically, how often has this sort of thing happened? 
We know there was an incident in Iraq several years ago with a 
man with a grenade. But historically, tell me about World War 
II, World War I. Certainly there were acts of soldiers that had 
some instability and they turned on their own men. What was 
done with it? How many incidents were there out there?
    General Ham. Sir, I don't know exactly how many incidents 
there are, but I know that one where 13 individuals were killed 
is unacceptable. And we have got to do all that we can to 
prevent a subsequent incident of this nature.
    Your point is well taken, that much of this is fundamental 
to good leadership. And good leadership, effective leadership, 
may have made a difference and probably would have made a 
difference in this individual's progress through his education, 
training, and development. But having said that, I think it is 
important for us to recognize that we do have a changed 
security environment. Again, individual acts of violence, 
whether they be motivated by Islamic extremism or other 
motivations, is something we need to better understand.
    Mr. Kingston. General, that is why I am asking you what the 
history was, Vietnam War, Korean War. Certainly, there have 
been instances of soldiers cracking, turning on their own 
troops. Correct?
    General Ham. Yes, sir, that is correct.
    Mr. Kingston. Wouldn't that be relevant to this? Because I 
think on one hand we are saying--and Mr. Frelinghuysen went up 
to the water's edge on profiling--but on one hand we are 
saying, and I am hearing you say, that it is evolving. General, 
you said it is an emerging science. But there is an insinuation 
that there is an Islamic extremist issue here. But maybe there 
isn't. Maybe you just have a soldier that went berserk. And 
couldn't there be some lessons from Vietnam or the Korean War 
or World War II that there were other soldiers that went 
berserk and was dealt with?

                             RADICALIZATION

    Mr. Dicks. Would the gentleman yield? I think there are 
plenty of examples of radicalization of individuals in the 
United States. We have already discovered in Homeland Security 
that should make this an issue of concern. The best way to deal 
with radicalization is training so people perceive it. Police 
officers went into these four or five guys' apartment and found 
all this literature. Now, had they not had training in 
radicalization, they would have just dismissed this, and these 
people would have gone and done some violent thing. But they 
saw this literature, and then there were police officers who 
had been trained, and they acted and prevented these people 
from taking violent action against others.
    So I do think there is--this is a different situation. You 
are not talking about other state actors. These are nonstate 
actors that were in the midst of trying to radicalize people in 
this country to take action against other Americans. I think 
what they are doing here, you have to train people to be aware 
of this, in my judgment.
    Mr. Kingston. That being the case, are you not profiling? 
Is that not a relevant piece of this puzzle? Are you going to 
watch somebody a little bit closer if he comes from some 
background than somebody else?
    General Ham. One of the points identified in the DoD review 
is the challenge of balance of security; balancing that with 
our longstanding appreciation for civil liberties and 
individual privacy. That is a difficult balance.
    This will be an issue that will be addressed in now the 
ongoing review of these findings and the recommendations. It is 
difficult. And this is why I think we owe our commanders the 
best guidance that we can give them in terms of indicators of 
things to look for of folks who may be tending toward violence. 
And while religious extremism, Islamic extremism in this case, 
is a motivation, it certainly is not the only motivation that 
might drive someone to violent behavior. We have got to look at 
those other aspects as well.
    Mr. Kingston. Just in plain English, give me an example, 
being very specific. Under the new guidelines what would I do 
before I got on the list or got pulled aside and say, Hey, 
what's going on here? How would you know when I got 
radicalized?
    General Ham. In this particular case--again, in the public 
domain it has been widely reported that Major Hasan attempted 
and maybe had some successful e-mail contact with a known or 
suspected terrorist individual. Well, that has got to be item 
number one. The barrier that we have is that that information, 
while known to some in the government, was not known to his 
immediate commanders and supervisors. They didn't know he was 
doing that. Had they known, we would argue----
    Mr. Kingston. DHS knew, right?
    General Ham. I guess because we were not--we were 
prohibited from going into the intelligence investigation--I 
knew that happened, but I don't know the details of who knew 
what, when.
    Mr. Kingston. If DHS or whomever knows now, they would now 
tell DoD?

                   PROCEDURES FOR INFORMATION SHARING

    General Ham. That is what we have recommended, is that the 
Department of Defense revise its procedures for information 
sharing; again, focusing on the centrality of the commander, 
that person who is charge of making those tough decisions. We 
have also got to give that person the information upon which to 
base their actions.
    Mr. Dicks. If the gentleman would yield, this should have 
gone to the FBI and the National Counterterrorism Center. They 
should have been brought into this as soon as they found out 
that this gentleman had contact with a known terrorist, there 
should have been action taken. I don't know if people know they 
are supposed to do that.
    Again, I would argue this means we have to do more training 
so people know when somebody does that. But if it is a known 
terrorist, they have to take it to the FBI and take it to the 
National Counterterrorism Center.
    Mr. Kingston. Thank you, Mr. Chairman.
    Mr. Dicks. Mr. Bishop.

              PRE- AND POST-DEPLOYMENT MEDICAL ASSESSMENTS

    Mr. Bishop. Thank you, gentlemen. I have listened with 
great interest. The radicalization of people who are associated 
and a part of our military is very, very important and very 
relevant. But even more basic than that is the pre- and 
postdeployment medical assessments that even soldiers who are 
not radicalized, who suffer from PTSD, who come back with 
various other kinds of mental problems, still are not properly 
assessed.
    Of course, this subcommittee and the Congress has time and 
again over the last 4 years mandated the pre-deployment and 
postdeployment assessments. Several Surgeon Generals from the 
Army Department of Defense have come forward and said, Well, we 
use a self-administered form. We have technicians that go and 
review those forms postdeployment, and if anything stands out, 
then we will call the individual in for an interview.
    Well, I have always over the last 4 or 5 years questioned 
the sufficiency of that self-administered assessment in 
identifying soldiers who could pose a potential risk to 
themselves, to other soldiers, or to their families, pre- and 
postdeployment. Pre-deployment, particularly in the case of 
National Guard and Reserve units, they are going into theater. 
They may have some medical condition that is not obvious that 
might cause them to go into a coma of some sort, or some other 
mental disability that would endanger their fellow soldiers 
which, without a hands-on examination, would not be revealed 
when they come back from the first, second, or multiple 
deployments, being able to assess what changes have been made 
to that individual in a way that could pose a threat. That is 
separate and apart from radicalization.
    I think the Independent Review has made it pretty clear 
that the policies and procedures of the government governing 
the assessment of the pre- and post-deployments do not provide 
comprehensive assessment of violence indicators.
    So what kinds of reviews are necessary to assure that we 
have that sufficient information and that the people who need 
to have it are given that information and that the information 
is good?

                  RESOURCES FOR ADDITIONAL ASSESSMENTS

    Mr. Bishop. What kind of training and education do we need 
to make sure that you have resources to provide to make sure 
that happens, and what other kinds of policies and procedures 
need to be updated or broadened to look at these assessments?
    General Thomas. Congressman, I will respond to that. Thank 
you for that question.
    The behavioral health care of our force is of tantamount 
importance to us. As a physician, I can't overemphasize that. I 
also have to say that in the course of my military medical 
career, I have never been in the position where I have been 
able to take care of patients as well as we are right now, and 
thanks in large part to what Congress has provided to us.
    What we get, in my experience, is we have a lot of policies 
that come out there. The postdeployment health assessment, as 
you mentioned, is an example of one. Once that is fielded, the 
practical application of that is something else.
    So what we have done is we have taken, in my experience 
here in the Army, for example, we have seen the overall policy, 
but we know that it is inadequate. And that is a clinical 
determination. We are not identifying all these soldiers with 
PTSD, posttraumatic stress disorder, for example, or traumatic 
brain injuries.
    We have taken a panel of experts that have worked through 
the Defense Centers of Excellence, and this is civilian and 
military experts across the Nation. We have taken some 
protocols that they have been working for a period of time and 
we have operationalized those to do exactly what you described, 
Congressman, to address the need of the force.
    Our traumatic brain injury and PTS training we just 
fielded--there is a directive-type memo, as a matter of fact, 
in staff and with the DoD. We have done this as a collaborative 
effort with all the services, the joint services, the Defense 
Center of Excellence, civilian and military centers, and we 
have rolled that out to the force.
    We went ahead and stepped it ahead of the time, because the 
Army is leading the way on this, but the Navy is in lockstep 
with us, as is the Marines. The Marines are training and 
modeling their program after ours. This will enable us to 
identify early indicators of behavioral health injuries to 
soldiers.
    There is a face-to-face portion of this, too, where we 
have----
    Mr. Bishop. Is this the post-deployment assessment?
    General Thomas. Yes, sir. In the post-deployment 
assessment, actually that phase of this comprehensive plan 
includes a virtual behavioral health interview. We did a pilot 
on that in Alaska. It is actually ongoing right now. Prior to 
Alaska, we did a whole returning battalion in Hawaii, and that 
was very successful. So we have expanded it to an entire 
brigade combat team, the 4th Brigade of the 24th Infantry 
returning to Alaska, and that is ongoing at this time. We 
intend to expand that even more.
     Mr. Bishop. Ultimately you want to expand that to every 
soldier that is deployed and comes back?
    General Thomas. Yes, sir, Congressman. We are doing that 
now, 100 percent contact. If I could back up a little bit----
    Mr. Bishop. Contact virtually?
    General Thomas. Yes, sir. Well, virtual and/or face-to-
face, if you have the assets on the ground. Yes, sir.
    Mr. Bishop. Thank you. I am glad to hear that, because this 
has been a concern for the last 4 or 5 years, and it was 
really, really frustrating to have the Surgeon General come and 
sit there and say, Well, we test too much anyway; we do too 
many medical examinations anyway.
    General Thomas. Sir, I think that this is a good indication 
of how we can actually identify those folks that are most at 
risk. We have already found, our preliminary findings in this 
100 percent contact has more than doubled our referral rates, 
which is a positive thing because we are getting the soldiers 
the care that they need.
    Again, I have to thank Congress for allowing us to have the 
funds to implement these programs and to expand them.
    General Ham. Mr. Chairman, may I?
    Chairman Dicks. Go ahead.

                     FACE-TO-FACE VIRTUAL ENCOUNTER

    General Ham. Congressman, in my role as a serving 
commander, I would say we are far more sophisticated than we 
were just a few years ago, as General Thomas has indicated, 
because of the support you all have provided to us. We know 
that the initial survey is in and of itself inadequate. So as 
General Thomas has indicated, we now mandate either face-to-
face or virtual encounter for every servicemember.
    Mr. Bishop. That is now protocol.
    General Ham. I would just tell you, in my command in Europe 
that is what we are doing. We are requiring every returning 
soldier to interact face-to-face with somebody. And, not 
surprisingly, those who didn't indicate anything, reveal 
anything in their survey, may do so when they are face-to-face, 
if we have the right person doing that counseling.
    We have also learned that the immediate survey in a face-
to-face encounter immediately following redeployment is not 
sufficient to indicate what might occur 60, 90, 120 days post-
deployment, because there is a bit of euphoria, frankly, upon 
being reunited with friends and family that may mask some 
underlying issue. So a follow-on assessment is necessary, and 
we are doing that with great effect.
    Mr. Bishop. Does that involve the family members? I am 
involved with the Military Family Caucus. Of course, family 
members are directly and indirectly impacted by that. They are 
closest to the soldiers when they come back from deployments, 
and they probably could pick up on differences in behaviors 
almost immediately, but may or may not know with whom they 
should speak about it, or what the protocol for them to do that 
without offending their spouse.
    General Ham. Congressman, may I give you a personal 
example? When I redeployed, I was pretty happy and going about 
my business, and about 30 to 45 days after redeployment, my 
wife said, You need to go see somebody. And I did.
    You are exactly right; informing, educating family members 
and including them in this process. And this is, again thanks 
to you, the value of the military family life consultants has 
been extraordinarily beneficial in that regard.
    Mr. Dicks. Mrs. Kilpatrick.

                             PUBLIC DOMAIN

    Ms. Kilpatrick. Thank you, Mr. Chairman. Good afternoon, 
Generals.
    Let's see how to start this. I highly respect your work, 
what you do, your service, your career, and in this meeting, I 
love this last chair here.
    Just a few things: 13 dead, 32 wounded; someone had 
information that the major had contacted the Yemen man. It is 
in the public domain. You said a couple times, General Ham, 
today, that you aren't doing that part; that is the other 
investigation. I think I wrote down Army accountability 
investigation. They are doing the criminal part of it, I guess. 
I came today, I thought I was going to hear the criminal part. 
So I have a few questions here. How long had the major been a 
major when the incident occurred?
    General Ham. He was promoted in 2008.
    Ms. Kilpatrick. 2008. What month of 2008? Any idea? The 
incident was in 2008, or 2009.
    General Ham. In 2009, November 5, 2009.
    Ms. Kilpatrick. Over a year he had been a major?
    General Ham. I would have to double-check, Congresswoman.
    [The information follows:]

    Major Hasan was promoted to rank of Major on May 17, 2009.

    Ms. Kilpatrick. For a while. You kept referring to in the 
public domain, but we can't get much of that here in the record 
today. So you were alluding to it, and it says in the public 
domain that supervisors and fellow students continually 
expressed concern about his behavior.
    Mr. Chairman just asked, well, okay, he is contacting the 
guy overseas, we are in two wars, his supervisors and students 
continually reported him. I mean, you all are doing--I feel I 
am at the University of Michigan in a class with the 101 thing. 
You are doing an excellent job teaching me procedures and what 
needs to happen.
    But I kind of agree with Mr. Moran down there. We only have 
so much money. We have got to spend it wisely. Our men and 
women have to be protected. Fort Hood, actually the facility 
itself, they had been deployed, two, three, four times, some of 
them. So if anybody is supposed to be protected, those people 
should be. He went there; he was acting crazy.
    I mean, you don't have to get permission from Homeland 
Security and Secretary Gates, who I have the highest respect 
for, to know that something is wrong with this gentleman. The 3 
or 4 days--and we don't have that today, I think Mr. Moran also 
alluded to that, it was a dossier of things. And I am just a 
school teacher and a grandmother, and I know he is crazy, after 
reading it.
    We can't let that happen to the men and women who serve and 
protect us. As good as you guys are, and I appreciate all that 
you do, it was too big of a hole--12 dead, 32 injured, and 
countless families and children who will never be the same.
    I am not blaming you, but I don't need another dossier or 
term paper to tell me we need to do something. A phone call, 
the IT that we put all the money in? I am not blaming you. I am 
just one little member here. But it can't happen. And if we 
don't close it up today, it is going to happen again and again. 
It could be anybody.
    We are just fortunate that nothing happens. We are in two 
wars. These young people are being deployed two, three, four 
times. I have got two of them that went five, and back home 
looking the same, but they probably need some PTSD counseling 
as well.
    So I don't know that I have questions. I am just concerned 
when we have supervisors and other persons who say to you that 
this guy is crazy, that he is doing something in a foreign land 
that is not friends with us--on their face, sometimes they act 
like they are--we don't need Homeland Security to know the 
major should have been removed. He should have been, what do 
you call it, put in something by himself and counseled face to 
face, how he got to that. He has a career.
    The other part of it, I come from Michigan, where the 
largest population of Arabs live outside of the Middle East. I 
have grown up with Arabs all my life. But whenever you get one 
like this, it continues the stereotype that they are all crazy 
and bad.
    I want us to be smarter. I want to know more, Mr. Chairman, 
about the Army accountability investigation. How can he 
continue to get promoted, killing 12 and wounding 32, and 
countless children will never see their parents? It is not 
acceptable. It is just not acceptable. I don't have the answer 
for it. I believe if Jack Murtha was here, he would give you a 
wringing. I can hear him in my ear.
    So we want to work with you; certainly I do, and I know my 
counterparts do. But I am not willing to give you millions more 
dollars for papers and studies and all that unless you come 
back and rearrange your budget and what is important. It 
probably needs a whole overhaul. It probably needs a 
comprehensive overall.
    The budget, we only have limited dollars. This is the 
biggest and the best budget. It is the best committee I have 
been on in 30 years. We have to do better, because the world is 
different. We have to do better because our young men and women 
who risk their lives for us every day require that.
    Fort Hood? And that he picked Fort Hood? It was more than 
the 13 and the 32. It was the image that Fort Hood has to the 
rest of the world, and he penetrated it on the inside. I 
connect it to the Oklahoma bombing and something similar to 
that.
    Mr. Chairman, I don't have any questions per se. Thank you 
very much.
    Chairman Dicks. We appreciate your comments. Do you want to 
say anything?
    General Ham. Yes, ma'am, I agree with you. What happened 
was unacceptable, and we lost 13 and 43 were wounded. That is 
unacceptable. And it is very clear in this review that there 
are some individuals who did not do their duty.
    Ms. Kilpatrick. Who can tell us if they are still on the 
job or not?
    General Ham. To the best of my knowledge, no one has been 
separated.
    Ms. Kilpatrick. Why?
    Chairman Dicks. Because the investigations have not been 
completed yet. You have to give them a chance to do their job.
    Ms. Kilpatrick. That is probably coming from the Army 
accountability study. It is not your problem.
    General Ham. Yes, ma'am, it is; but in a different role. I 
participated in this DoD review we are here to discuss. When 
that was concluded, Secretary Gates passed allegations about 
individual accountability to the Secretary of the Army. The 
Secretary of the Army then, on that same day, appointed me to 
do that accountability investigation that does name names and 
identify individuals that I recommend to the Secretary of the 
Army be held accountable.
    That process is ongoing. The Secretary of the Army has not 
yet received that report, but he will soon and he will make 
some decisions. I am confident that when he makes those 
decisions and those actions are taken, that the Secretary of 
the Army would be glad to have me come over and talk with you 
about that process. But because it is underway, I am not at 
liberty to do that.
    Mr. Dicks. We will bring you back for another hearing to 
report to the committee.
    Mr. Rogers.
    Mr. Rogers. I pass, for the moment.

                    Questions by Congressman Carter

    Mr. Dicks. We are going to let Judge Carter, who represents 
Fort Hood, ask a few questions. He is a valued member of the 
Appropriations Committee and serves on Military Construction, 
and it is his district that was affected by this.
    Mr. Carter. Thank you, Mr. Chairman, and Ranking Member. I 
really appreciate being allowed to be here as part of this 
hearing.
    This has been a very active part of my life since November 
5th. Just as a little background, the day this happened, my 
field director, a retired colonel from the Chaplain Corps, 
Gregg Schannep--you may know Gregg--was actually at the site 
when the shooting started. He called the CO's office, one of 
multiples who called the CO to say that if you are not having a 
training exercise, there is firing going on over here. So my 
office is right in the middle of this terrible situation.
    I have visited with quite a few of the wounded soldiers. In 
fact we have a soldier right now presently in south Austin who 
just rejected a plate in his skull and they had to go in and 
refix him.
    By the way, let me say, every soldier I have met is a 
credit to the uniform, including this young man. His attitude 
is fabulous. But his mom and dad asked me the question, 
Shouldn't we expect more than our child to get this severely 
injured, or others dead, by somebody in our own uniform on our 
own base where they should be safe?
    So this is a critical situation. And because I happened to 
be there and to be in the middle of it, we have become the 
subject of an awful lot of Internet traffic with people, mostly 
veterans who live in the Fort Hood area, who are making 
comments to me. Not Active Duty soldiers. The Active Duty 
soldiers, they do their duty, and you should be very proud of 
them. And, by the way, I will fight anybody who says we didn't 
respond well once this thing happened. I don't think it could 
have been done any better.
    But getting back to this, the one thing I keep hearing 
overriding is that the ordinary soldier--you have been talking 
to us about the chain of command and the duty of the commander 
to recognize behavior and how we need to get them trained to 
learn to recognize behavior. I don't have any argument with 
that.
    What I am hearing from Gulf War soldiers, soldiers that 
have just gotten out, they believe there is an attitude that 
the ordinary soldier who might be coming in contact with the 
major and have him either proselytize them or just criticize 
the war or talk about the goodness of jihad, which it is my 
understanding happened a lot, they felt it was not--it would be 
detrimental to their career in the Army for them to go to their 
commanding officer or others to report this, and it was an 
issue of political correctness.
    As one former sergeant reported to me, he said, We have got 
a shortage of medical personnel, we need Arab speakers. These 
are prioritized people. And even General Casey, upon hearing of 
this, made the comment, Let's hope this doesn't hurt our 
diversity program.
    All those things tend to make us think that the ordinary 
soldier, we might have a culture in the Army that would make 
him think that making a report to someone of what he would 
consider bizarre behavior, might be detrimental to his career 
in the Army.
    First, I would like to know if you have run across anything 
along those lines. I recognize this is trifurcated, so you are 
just one of at least three routes that I know we are looking 
into this. But I think that is the underlying question that we 
have to ask ourselves: Would a soldier feel uncomfortable 
because of political correctness to making a report? Not an 
officer looking into someone under his command, but just a 
soldier who serves alongside, or the nurse that might serve 
alongside the mental health professional. Have you run into 
that, and can you answer that question?
    General Ham. Congressman, thanks for that question. I would 
just say at the outset, the co-chairs and I traveled to Fort 
Hood the day after Secretary Gates appointed this panel, and 
what the Corps Commander and all those at Fort Hood and the 
greater Fort Hood community, what they did to pull together was 
extraordinary.
    There were in fact, Congressman, allegations of 
inappropriate religious remarks conducted by Major Hasan. He 
was then a captain in residency. He was at this time in Walter 
Reed. And Secretary Gates directed us to look into that, and we 
did. And what we found is in fact patients had made a few 
comments to others, to supervisory personnel, that said, Hey, 
this guy, he said some things that made me uncomfortable.
    And this is, frankly, an instance where supervisors, at 
least as far as we can tell, did what they were supposed to do. 
There are records that indicate that he was counseled and 
advised as to the inappropriateness of making religious 
comments in a counseling session. Again, he was a resident at 
that point at Walter Reed, and there were no further instances 
of that.
    We specifically asked that question of the patients that he 
saw at Fort Hood, and similarly there were no indications from 
patients that he saw that he made inappropriate religious 
comments in his provision of medical care to them.
    Mr. Carter. Well, I am just telling you what has been 
reported to me. Also I have actually had someone who has been 
in medical school with him that said he did the same thing in 
medical school. So it is hearsay. And I am an old judge, I take 
hearsay for what it is worth. But we are in the business of 
looking into what is going on with soldiers.
    I will tell you something that I experienced on the 6th of 
November when I was there at Darnall. A nurse came up to me and 
said, ``There is something underlying this that the Army better 
remember.'' And I am sure you know this. She said, ``I just got 
an e-mail from Australia from a nurse that I served with in 
Australia, in Afghanistan, and I had just come back. And that 
nurse said, `Our soldiers are asking in Australia, Can we trust 
everybody that is wearing our uniform? Because the Americans 
can't trust everybody that is wearing their uniform.' ''
    That is a psychological barrier to fitness for our 
soldiers. And I hope and pray that we can get past having 
soldiers have those kinds of feelings about what happened, 
because the parents are feeling that way and I am sure the 
soldiers are feeling that way.
    So you guys have got a big responsibility. I am on your 
side, but I want everybody to be straight. For the first time 
since this happened, yesterday Secretary Napolitano, and again 
today in a hearing where I talked to her, acknowledged that as 
far as the homeland was concerned, that was an Islamic 
terrorist act. To this point, I haven't heard the Army say 
that. I think it would help a lot when they finish their 
investigation if they put political correctness aside and make 
truthful statements.
    Thank you.
    General Ham. Mr. Chairman, if I may, I think you are 
exactly right. There is tremendous concern. One of the reasons 
this attack is so important to us is that it is one of our own. 
It is inside the family, and a field grade officer on top of 
that. So one of the great concerns is what is that effect 
inside the service? Again, do we start to rip apart this fabric 
of trust that is so essential within the Department?
    Secondly, there is a great concern, a very valid concern, 
that says--you now say am I concerned? Do I feel comfortable? 
Am I going to go to an Army mental health provider, behavioral 
health specialist, and be open and forthright? This guy came 
from that community.
    The good news is that we haven't seen, at least in the 
conduct of the DoD review, any significant negative 
consequences from that. And I defer to General Thomas from a 
broader Army medical standpoint.
    But I think you have hit exactly the point of why this one 
is so different. This was someone who was in a position of 
trust and confidence who killed 13 of our own, and that is 
absolutely unacceptable and we must do all that we can to 
prevent reoccurrence.
    Mr. Carter. Thank you.
    Mr. Dicks. Thank you.
    Mr. Rogers.
    Mr. Rogers. Thank you, Mr. Chairman.
    I am interested in the conversation--you mentioned or, when 
he was at Walter Reed that there had been complaints. Were 
those by enlisted people?
    General Ham. Sir, I don't know off the top of my head. All 
I know, without doing a fair amount of research, is patients 
that he was seeing.
    Mr. Rogers. What was the nature----
    General Thomas. Sir, no, I don't have that information.
    Mr. Rogers. What was the nature of what they were 
complaining about?
    General Ham. The essence of it, sir, was that in his 
counsel to the patients, that the supervisors felt that he 
focused inappropriately on religion as an underlying cause--as 
an example to say, Well, if you had stronger faith in God, then 
maybe you would not be experiencing these kinds of problems. It 
wasn't outright advocacy of Islam, but it was clearly 
inappropriate to insert that conversation into the treatment of 
a patient.
    Mr. Rogers. I wouldn't think that would be altogether 
unusual though, would it be?
    General Ham. It was deemed by his supervisors--remember, he 
was now in residency. It was deemed by his supervisors at that 
point that those comments were inappropriate to the patient 
that he was seeing at that time.
    Mr. Rogers. And these people that complained, I am 
interested in the process. What was done with their complaints?
    General Ham. Twofold. First, the supervising physicians of 
Captain Hasan counseled him, advised him, that that was not 
appropriate and how he could better, more effectively provide 
mental health advice to the patients he was seeing.
    Secondly, there was an effort to go back to those patients 
to ensure that they were satisfied and were receiving the care 
that was necessary by a different provider.
    Mr. Rogers. But who did they complain to?
    General Ham. It was the supervising physicians that were 
overseeing his residency.
    Mr. Rogers. And then what did they do with the information?
    General Ham. Twofold. Counseled Major Hasan as to why he 
should not do that and why it was inappropriate to do so; and, 
secondly, to assure those patients were afforded the 
opportunity for care by another physician, to ensure they got 
the care and treatment that they required.
    Mr. Rogers. And that was the end of it, then?
    General Ham. Yes, sir. But we did again, post-November 5th, 
when Major Hasan's patients were interviewed at Fort Hood and 
also other patients that he had seen at Walter Reed, that 
specific question was asked as to whether or not they felt that 
he had made inappropriate religious comments.
    Mr. Rogers. Well, have there been changes made since Fort 
Hood about how inappropriate things that are said are reported 
and handled?
    General Ham. Within the medical community, I am unsure. I 
defer to General Thomas.
    General Thomas. No, sir. That I am aware of, there are no 
changes with respect to the training programs instituted at 
this time post the 5th of November incident. And just having 
trained residents and having been a military medical resident 
myself, typically what would happen, in general terms, if a 
patient had a complaint against me or another provider, another 
doctor, they would report it to my supervising physician, in 
this case the fully credentialed staff physician over me as a 
resident. And then, having been a supervising staff surgeon, 
patients would commonly ask to see me if they had an issue with 
one of my residents.
    Mr. Rogers. Well, I am not as much interested in the 
doctor-patient matter as I am just in the military generally. 
If a soldier sees or observes something that is suspicious, 
like this, have we changed the procedures about how he or she 
can go about reporting that and having it looked into?
    General Ham. Not to my knowledge, sir. I think instructive 
here are Major Hasan's peers as he was going through residency, 
and then in the 2 years he participated in a fellowship also at 
Walter Reed. Peers of his did, in fact, make reports to 
supervisors that said, Hey, this guy is making inappropriate 
comments.
    And that is what we want them to do. They confronted him 
also, but they also went to his supervisors. So I think the 
process was okay. In my view, what we found was that some of 
those supervisors failed to execute their duties.
    Mr. Rogers. Thank you.
    Mr. Dicks. All right, thank you, General. This was a very 
good hearing. We may ask you to come back after the decisions 
are made by the Secretary. We appreciate your candor and your 
good work and your service, both of you. Thank you.
    The subcommittee was adjourned.
    [Clerk's note.--Questions submitted by Ms. Granger and the 
answers thereto follow:]

    Question. The ``Protecting the Force'' report praises the Active 
Shooter Response model that helped in this horrible scenario. Those 
first responders were trained at The Advanced Law Enforcement Rapid 
Response Training (ALERRT) Center at Texas State University. The report 
also stated that current Pentagon policy does not currently take 
advantage of successful models for active shooter response for civilian 
and military law enforcement on DoD installations and facilities. What 
efforts are being made by the Department of Defense to seek out and 
partner with this existing successful training program?
    Answer. The Independent Review Related to Fort Hood found that 
responding officers attributed their actions to relatively new training 
on Active Shooter Response instituted by the Fort Hood Department of 
Emergency Services. In the wake of the Fort Hood incident, the 
Department has taken a more systematic approach to ensure that military 
and civilian police, as well as all Service members, are familiar with 
``Active Shooter'' scenario best practices. To that end, the Department 
recommended two forms of Active Shooter Training. First, in March 2010, 
DoD will incorporate a new training module addressing ``Active 
Shooter'' threats into the Antiterrorism Level 1 online training. This 
training will be standard across all Services and mandatory for all 
uniformed Service members, as well as for all General Schedule and 
contractor employees who are on TDY orders to deploy. By June 2010, the 
Under Secretary of Defense for Acquisition, Technology, and Logistics 
will issue changes to DoD Instruction 6055.17, DoD Installation 
Emergency Management (IEM) Program, directing commanders to incorporate 
the ``Active Shooter'' scenario, lessons learned from Fort Hood, and 
other workplace violence case studies into their Installation Emergency 
Management training programs.
    The Under Secretary of Defense for Personnel and Readiness will 
update DoD Instruction 5210.90, Minimum Training, Certification, and 
Physical Fitness Standards for Civilian Policy and Security Guards (CP/
SGs) in the Department of Defense, or issue a new instruction to ensure 
that ``Active Shooter'' training tasks will become part of the minimum 
law enforcement training standards for DoD military and civilian 
police. The Under Secretary will also seek ``Active Shooter'' best 
practices to provide DoD law enforcement elements with the up-to-date 
practices and protocols for that operational requirement.
    Question. Does the Department intend on implementing a standard 
active shooter response training program? Or will it be left to the 
independent Services to develop their own programs?
    Answer. The Department implemented a standard training program. The 
new training module addressing ``Active Shooter'' response protocols is 
standard across all Services. It is mandatory training for all Service 
members, as well as for General Schedule and contract employees on TDY 
orders to deploy. Overseas adult dependents are also encouraged to 
receive AT Level 1 training.
    Question. It would seem logical that any active shooter training, 
curriculum and response protocol developed by the Pentagon would be 
consistent and shared with other area law enforcement stakeholders. 
Will the Department be working with the neighboring civilian law 
enforcement stakeholders in the development of active shooter training 
and response protocols?
    Answer. It has been common practice for years for installation 
commanders to engage with local law enforcement stakeholders to 
establish memoranda of agreement and understanding on force protection 
and law enforcement issues. At the operational level, commanders 
exercise discretion as to how best to work with local law enforcement 
stakeholders. Often, as was the case with ``Active Shooter'' training 
at the Fort Hood Department of Emergency Services, installations go 
above and beyond the DoD instruction to ensure best practices are 
shared between DoD and non-DoD law enforcement practitioners and first 
responders.

    [Clerks note.--End of questions submitted by Ms. Granger.]
                                         Wednesday, March 10, 2010.

                           AIR FORCE POSTURE

                               WITNESSES

HON. MICHAEL B. DONLEY, SECRETARY OF THE AIR FORCE
GENERAL NORTON A. SCHWARTZ, CHIEF OF STAFF, UNITED STATES AIR FORCE

                              Introduction

    Mr. Dicks. The subcommittee will come to order.
    This afternoon, the committee will hold an open hearing 
concerning the current posture of the Air Force as well as the 
fiscal year 2011 budget request.
    We are pleased to welcome two distinguished witnesses, the 
Honorable Michael B. Donley, Secretary of the Air Force, and 
General Norton A. Schwartz, Chief of Staff of the Air Force. 
These gentlemen are very well qualified to discuss all aspects 
of the fiscal year 2011 budget request and answer questions the 
committee has regarding the Air Force.
    Secretary Donley, General Schwartz, thank you for being 
here this afternoon. The committee is very interested in 
hearing what you have to say about the Air Force's fiscal year 
2011 budget.
    Specifically, as you are well aware, some of us on the 
committee are anxious to hear about the status of the KC-X 
program with the announcement on Monday that one of the 
companies will not bid on the program. The Department had 
planned on a summer award, so we are interested to hear how 
this decision will affect a contract award and how such an 
award will be negotiated with the remaining company.
    Additionally, the committee is looking forward to a 
discussion on the status of the Joint Strike Fighter. The 
review conducted by the revised joint estimating team this fall 
predicted at least a 13-month schedule slip and the need for 
additional funding. To address these concerns, the Department 
of Defense has significantly decreased the number of aircraft 
it had planned to procure over the next 5 years and added 
funding to the development program. Only time will tell if the 
added time and funds will fully address the problems with this 
vital program or if the taxpayer will once again be forced to 
add additional resources.
    Another topic of concern is the continued delay in the 
development of our next long-range strike platform. The 
Quadrennial Defense Review directed further study of long-range 
strike capabilities.
    The Department of Defense initiated a next-generation 
bomber program several years ago. However, Secretary Gates 
terminated the effort last year. With the time required to 
fully develop a penetrating bomber to be in excess of a decade, 
if we were lucky, it is concerning that the Department 
continues to delay the needed investment in recapitalizing our 
current fleet of bomber aircraft. Our current bomber fleet 
consists of 163 aircraft, ranging in age from 50 years for the 
B-52 to 13 years for the B-2. While we applaud the plan to 
provide $199 million for the bomber-related industrial base, we 
are truly concerned that it is not enough.
    A continuing area of concern is the overuse of 
undefinitized contract actions by the Air Force. While these 
types of contracts are useful to satisfy critical time-
sensitive and urgent warfighter requirements in a timely 
manner, they should not be used for routine acquisition or as a 
result of poor planning. Further, the inability of the Air 
Force and industry to definitize the contracts in a timely 
manner hinders cost control efforts, which ultimately leads to 
increasing costs for multibillion dollar acquisition programs. 
We applaud the efforts you have made over the last 6 months, 
but the committee will continue to provide stringent oversight 
to ensure the Air Force continues to reform its contracting 
procedures.
    In addition to these areas, the committee remains concerned 
with the Air Force's in-sourcing plans. The Air Force budget 
request includes a $1.6 billion increase for civilian 
compensation to support an additional 26,000 Federal civilians 
and $1 billion less for contracted services. But it is unclear 
to the committee what informs the hiring plan since the Air 
Force does not have an adequate inventory of contracted 
services. In other words, we don't know who all your 
contractors are at this point.
    We look forward to your testimony and an informative 
question-and-answer session.
    Now, before we hear your testimony, I would like to call on 
Mr. Tiahrt for any comments he would like to make.
    Mr. Tiahrt. Thank you, Mr. Chairman. I welcome Secretary 
Donley and General Schwartz.
    Some of you may have heard the Marines say, you can send us 
anywhere in the globe; just make sure the airplanes overhead 
are ours. And I think that is a topic that we have enjoyed, air 
superiority. We have enjoyed that for some time, mostly because 
our pilots are the best in the word and because we have given 
them the tools to do their job safely and come home to their 
families afterwards.
    However, I remain cautious about our ability to maintain 
this advantage. Certainly our pilots will continue to be 
trained at a level far exceeding anyone else, but I am 
concerned that they will have the quality and quantity of 
airplanes needed to do their job.
    We must also maintain our ability to move troops and 
equipment. We cannot fight the enemy if we can't get to him. To 
accomplish this quickly and efficiently and safely, it is 
essential that we maintain the correct mix of assets for both 
strategic and tactical airlift.
    I think we have to address these issues to maintain the 
dominance in the sky and our global presence, and 
recapitalization of our fleet is part of that. So I am 
interested in your testimony. And thank you, Chairman, for the 
opportunity to open.
    Mr. Dicks. Thank you.
    Why don't you go ahead and proceed as you wish.
    Mr. Donley. Thank you, Mr. Chairman; General Schwartz and I 
would like to congratulate you on your election to this seat.
    Mr. Dicks. Thank you very much.
    Mr. Donley. There has been a long, distinguished series of 
Chairmen in this position; and we are anxious to work with you 
going forward.
    Mr. Dicks. Thank you.

                 Summary Statement of Secretary Donley

    Mr. Donley. Mr. Chairman, Mr. Tiahrt, members of the 
committee, it is a pleasure to be here representing almost 
680,000 Active duty, Guard, and Reserve Airmen and Air Force 
civilians. I am also honored to be here with General Schwartz, 
who has been a phenomenal partner and a tireless public servant 
as we have worked together for almost the last two years.
    Today, I am pleased to report that America's Air Force 
continues to make progress in strengthening our contributions 
as part of the joint team and in the excellence that is the 
hallmark of our service. We are requesting $150 billion in our 
baseline budget, and almost $21 billion in the overseas 
contingency operation supplemental to support this work.
    In the past year and in planning for the future, we have 
focused on balancing our resources and risk among the four 
priority objectives outlined by Secretary Gates in the recently 
released Quadrennial Defense Review (QDR).
    First, we must prevail in today's wars. Your Air Force 
understands the gravity of the situation in Afghanistan; and, 
as we continue to responsibly draw down our forces in Iraq, we 
are committed to rapidly fielding needed capabilities for the 
joint team such as surging Intelligence, Surveillance, and 
Reconnaissance (ISR) assets into theater and maximizing air 
mobility to accelerate the flow of forces into Afghanistan.
    Second, we must prevent and deter conflict across the 
spectrum of warfare. As we await the results of the Nuclear 
Posture Review and the follow-on Strategic Arms Reduction 
Treaty (START), we continue to concentrate on the safety, 
security, and sustainment of two legs of the Nation's nuclear 
arsenal. Last year, we stood up Air Force Global Strike 
Command; and we have now realigned our Inter-Continental 
Ballistic Missile (ICBM) and bomber wings under the control of 
a single commander. We also designated the Air Force Nuclear 
Weapons Center as the single point for consolidated management 
of all of our nuclear weapon sustainment activities. And to 
increase our engagement across the world, we are building 
partner capacity in Afghanistan and Iraq and developing a 
training framework that emphasizes light attack and mobility 
capabilities that can benefit other nations.
    Third, we must be prepared to defeat adversaries and 
succeed in a wide range of conflicts. We need to ensure that we 
are providing the right capabilities with our strategic airlift 
and ISR platforms and ensure our space-based assets continue to 
deliver needed capabilities for the future.
    In addition, the last two decades of sustained operations 
has strained our weapons systems. We continue to determine 
which aircraft we will modernize and sustain and which we must 
retire and recapitalize. One of our primary efforts includes 
retiring and recapitalizing many of our legacy fighters and 
tankers and replacing them respectively, with F-35s and KC-Xs. 
These decisions require tough choices, as well as the ability 
to quickly field systems that meet warfighter needs at an 
affordable price. Because acquisition underpins this effort, we 
are continuing our work to recapture excellence in this area.
    In the past year, we have made great strides in reforming 
our internal processes. We have added more program executive 
officers and are growing our acquisition workforce by several 
thousand professionals over the next five years.
    Finally, we must preserve and enhance the all-volunteer 
force. Airmen are our most valuable resource, and they have 
performed superbly in every mission and deployment they have 
undertaken.
    With the understanding that their families serve alongside 
them, in July, 2009, we began a year-long focus on our men and 
women and their families. This Year of the Air Force Family 
recognizes their sacrifices and looks to determine how we can 
better support, develop, house, and educate them. We are 
determining which programs are performing well and where we can 
do better.
    Mr. Chairman, your Air Force is performing exceptionally 
well in supporting current fights, responding to growing 
demands, and shifting personnel priorities, but we are 
increasingly stressed in the Continental United States (CONUS). 
Rebuilding the nuclear expertise we need for the future will 
require continued determination and patience, and we are taking 
more risk in non-deployed force readiness. Additionally, we 
face significant challenges in modernization and in 
infrastructure.
    At the same time, however, we are developing and fielding 
new technologies and capabilities that bode well for our 
future; and I can tell you after a recent trip to the United 
States Central Command (USCENTCOM) Area of Responsibility (AOR) 
that we are recruiting and training some incredible Airmen. 
General Schwartz and I can again confirm that the Air Force is 
blessed with an outstanding civilian and military leadership 
team to address these challenges.
    Our priorities going forward are now clear. We must make 
the most of those resources available to balance capability 
against risk, balancing winning today's wars against preparing 
for tomorrow's. We need to prevail in today's fights, and we 
continue to add capability in every way possible to help ensure 
success in the ongoing conflicts.
    We must prevent and deter future conflict where we can and 
continue to be prepared and succeed across the full spectrum of 
conflict. And we must continue to preserve our Airmen and their 
families. They are truly our hedge against an uncertain future.
    Mr. Chairman, we are grateful for your and the committee's 
support; and we look forward to discussing these matters with 
the committee. Thank you.
    Mr. Dicks. General Schwartz.

                 Summary Statement of General Schwartz

    General Schwartz. Mr. Chairman, I add my congratulations, 
sir.
    And, Congressman Tiahrt, members of the committee, I am 
proud to be here representing your Air Force with Secretary 
Donley; and let me begin by reaffirming that the United States 
Air Force is fully committed to effective stewardship of the 
resources that you and the Nation have placed in our trust. 
Guided by integrity, service, and excellence, our core values, 
American Airmen are serving courageously every day with 
precision and reliability on behalf of the American people. The 
budget request supports these Airmen and continuing efforts to 
rebalance the force, to make difficult decisions on what and 
how we buy, and to sustain our needed contributions to the 
joint team.
    Secretary Donley and I established five priorities shortly 
after taking office to ensure that our entire force was focused 
on the right objectives. Most of our initial efforts centered 
on re-affirming long-established standards of excellence and 
recommitting ourselves in areas where our focus had waned. I am 
pleased to report to you today that our dedicated and talented 
Airmen understood our intent broadly and delivered in 
meaningful fashion.
    Although these initial priorities are not designed to 
change from year to year, our progress with the nuclear 
enterprise is such that we can now shift our efforts to 
sustaining the progress that we have made.
    Thus, our first priority is to continue to strengthen 
excellence in the nuclear enterprise. The rigor of our nuclear 
surety inspections demonstrates a renewed commitment to the 
highest levels of performance, but we must and we will do more 
to ensure 100 percent precision and reliability in our nuclear 
operations and logistics as close to 100 percent of the time as 
such a human endeavor will allow.
    For our second priority, that is partnering with our joint 
and coalition teammates to win today's fight, Secretary Donley 
mentioned several of the ways in which our airmen are providing 
critical air and space power for the coalition and joint team. 
Your Airmen are performing admirably wherever and whenever our 
joint teammates require, including providing battlefield 
medical support and evacuation, ordnance disposal, convoy 
security, and much more.
    Our third priority remains to develop and care for our 
airmen and their families. We initiated the Air Force Year of 
the Family, as you just heard, in recognition of the vital role 
that our families fulfill in mission accomplishment. Although 
their sacrifice is perhaps less conspicuous, their efforts are 
certainly no less noble and their contributions are no less 
substantial.
    Modernizing our inventories and organization and training 
are fourth priorities, among the most difficult tasks that our 
service have undertaken in these last 18 months.
    In order to achieve the balance that Secretary Gates has 
envisioned for our force, we are compelled to decision and to 
action. The budget represents a continuation of this effort.
    We set forth on a plan last year to accelerate the 
retirement of some of our older fighter aircraft. This year we 
are not retiring any additional fighters, but we are 
transitioning from some of our oldest and least capable C-130s 
and C-5s.
    We will modernize where we can, but where modernization no 
longer is cost effective, we will pursue recapitalization. KC-X 
is certainly one such example. With the recent delivery of the 
requests for proposal, our top acquisition effort to procure 
the next generation of refueling aircraft passed a significant 
milestone.
    A similar imperative goes along with the F-35. I want to 
underscore Secretary Donley's comments by noting that this 
weapons system will be the workhorse driving much of our Air 
Force and the joint force forward.
    Long-range strike is the last program among our top 
priorities and initiatives.
    The Air Force fully supports development of a family of 
systems providing both penetrating and standoff capabilities 
for the next two or three decades as described in the QDR.
    And finally, recapturing acquisition excellence, our fifth 
priority, is now only beginning to pay dividends with their 
acquisition improvement plan at the heart of the reform effort. 
While promising the initial successes must continue for a 
number of years before we can declare victory on this front, we 
are fully aware, that we must ring every bit of capability and 
value that we can from the systems that we procure. So this 
effort will require sustained focus on acquisition excellence.
    Mr. Chairman, the Air Force will continue to provide our 
best military advice and stewardship, delivering global 
vigilance, reach, and power for the Nation. Thank you for your 
continued support of the United States Air Force and 
particularly of our Airmen and their families. I look forward, 
sir, to your questions.
    [The joint statement of Secretary Donley and General 
Schwartz follows:]

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    Mr. Dicks. Well, I just wanted to comment that I was very 
pleased that both of you were there today for the presentation 
of the Gold Medal to the women aviators of World War II. That 
certainly was an amazing event. I am glad I went personally.
    And, Secretary Donley, I want to compliment you on your 
excellent remarks and recognition of these hundreds of great 
women who are still alive, who did so much during the World War 
II thing and were so little recognized for it. It just shows 
you what great people we have in this country.
    Mr. Donley. Thank you, Mr. Chairman. It was a tremendous 
day for the Nation and for our Air Force as well.

                                  KC-X

    Mr. Dicks. Now, you have Dicks and Tiahrt today, so you 
know what the first question is going to be. Can you give us an 
update on the KC-X program?
    Mr. Donley. As you noted, sir, we did receive a letter from 
Northrop Grumman indicating their intent not to bid on the 
current Request for Proposal (RFP) which is out and also 
indicating that they did not plan to protest the current----
    Mr. Dicks. Which was very welcomed.
    Mr. Donley. The Department's plan going forward is to let 
this RFP stand. This is the best way for us to get a good 
proposal from whatever offer comes in.
    Obviously, Boeing is in that mix; and we need Boeing or 
other offerers to bid on the proposal that we have put out and 
that is on the street today. So our intent is to let that 
process run its course.
    Mr. Dicks. And Boeing has not yet submitted its proposal.
    Mr. Donley. They have not. I think we have about 62 days 
left or something close to that in the current RFP.
    Mr. Dicks. Obviously, this is a very important program, and 
our committee has been involved in this thing since 2001, and I 
don't want to go through the history here. But it does point 
out one thing that you mentioned as your number five priority 
and that is what you are going to do about acquisition.
    I think we all recognize that the acquisition force within 
the Air Force and within the Department was cut back too far, 
and I know that you are increasing the number of people who are 
involved in acquisition. But when you look at all of the 
programs that are having difficulty and the Nunn-McCurdy 
breaches and the escalation in cost that represents, we really 
have to do this; and we have to get this fixed as soon as 
possible. Can you give us a sense of what you are trying to do?
    I know you are trying to bring back--increase the personnel 
so you can have more people to handle these programs, but give 
us a sense of what you are trying to do.
    Mr. Donley. Well, the acquisition improvement program that 
the Chief and I put in place just several months after we 
arrived has several components to it, but I won't go into all 
of the details.
    But the most important element is rebuilding the workforce. 
We were able to add over 700 personnel to our acquisition 
workforce last year. We are on track I believe for over 900 
[additional] this year. The focus is on bringing back specific 
expertise--contracting, cost estimating, and systems 
engineering capabilities that support the acquisition process--
and making sure that we have them appropriately deployed across 
our product centers and program offices.
    In the last year, we have added nine new program executive 
officers. It puts us at a level roughly comparable to the Army 
and Navy in terms of numbers of Program Executive Officers 
(PEOs). But this will help spread the work across a larger 
number of executives so that they do not have such a broad span 
of control. They will be able to focus on the programs for 
which they are responsible and provide improved oversight.
    Mr. Dicks. General, do you have any comment on this?
    General Schwartz. I would just speak to the thing for which 
I am responsible, which is the requirements. We have elevated 
the level at which requirements are validated and, to be sure, 
we have elevated the level at which changes to requirements are 
approved. And there will be much greater discipline applied in 
that respect, sir.
    Mr. Dicks. Mr. Tiahrt.
    Mr. Tiahrt. Thank you, Mr. Chairman.
    In the tanker program, you are going to go through the 
current schedule; you will get a bid. Do you plan on 
restructuring the contract itself? Will there be incentives put 
in place for underruns or anything different than what you plan 
to do under your current RFP?
    Mr. Donley. We do plan to incentive performance both with 
respect to delivery and with respect to fuel burn and 
performance as well. So it is still anticipated to be a firm 
fixed price at the very front end and then fixed price and 
incentive thereafter.
    Mr. Tiahrt. Have you looked at production rates? I mean, 
the optimum rate is not 12 to 15. Have you looked at 25 to 30 
as far as a delivery rate per year?
    Mr. Donley. The RFP is structured to request cost and 
pricing data on a roughly 15 airplanes per year schedule. Our 
challenge with alternative approaches, which would add 
airplanes, is that we would have to budget for increased levels 
of acquisition.
    The good part of that would be that we would get the tanker 
fleet recapitalized faster, but we would have to spend twice as 
much money every year to do it. So instead of spending in the 
neighborhood of $3\1/2\ billion per year, we would be spending 
closer to $7 billion a year on tankers; and that is a lot of 
money. So we have to balance the tanker acquisition with other 
pressing needs and other mission areas as well.
    Mr. Tiahrt. My only concern is that one Air Force officer 
told me--just to put it in perspective--that the mother of the 
last pilot of a KC-X hasn't been born yet. The only way we 
change that is if we start procuring them on a more optimum 
rate. So perhaps some study will be done so we can see what 
kind of cost savings. Maybe it is not double the amount. Maybe 
it is some reduction because of the improvement curve.
    Mr. Donley. Certainly at some point in the future one might 
consider a multiyear procurement opportunity. That is still out 
in the future to be worked at some point. But bumping up 
procurements at the levels that you are describing requires a 
lot more budget dollars than we currently have available.

                   MC-12 AND LIGHT MOBILITY AIRCRAFT

    Mr. Tiahrt. There are two programs I want to just briefly 
touch on, the MC-12 and the light mobility aircraft. The MC-12, 
Air Force purchased five in fiscal year 2010. My understanding 
is that the in fleet will be about 25 aircraft.
    General Schwartz. Sir, actually 37 total aircraft.
    Mr. Tiahrt. Thirty-seven. But there is no request for any 
aircraft in 2011. Have I got that right?
    General Schwartz. Sir, we will complete the purchase and 
the modification of all of the platforms this year.
    Mr. Tiahrt. All 37.
    General Schwartz. All 37.
    Mr. Donley. The last airplanes, sir, as I understand it, 
are an additional five in the fiscal year 2010 Overseas 
Contingency Operations (OCO) supplemental.
    Mr. Tiahrt. And in the light mobility, I think that is a 
60-aircraft fleet. And you have requested 15 in the budget, but 
there is no RFP issued yet. Is there an RFP date for the light-
mobility aircraft?
    General Schwartz. Sir, that RFP should be issued later this 
calendar year. And it is not a 60-airplane fleet. It is a 15-
airplane fleet.
    Mr. Tiahrt. Maybe I had those turned around. I apologize.
    General Schwartz. No. But the key thing is that both for 
light lift and light strike, those will be 15 aircraft fleets 
whose primary focus will be not to perform missions for the 
United States Air Force or the American Armed Forces but, 
rather, to enable our partners to build partner capacity. And 
that will be true with a platform that is something that can be 
readily assimilated by most of the air forces on the planet. I 
just would comment, sir, that not every air force can afford C-
17s.
    Mr. Tiahrt. Thank you.
    Mr. Dicks. Mr. Visclosky. I am going to run up and vote and 
come right back. But I am going to turn it over to Mr. 
Visclosky.
    Mr. Visclosky. Thank you, Mr. Chairman.
    Mr. Secretary, I may have done this in the past, but I want 
to congratulate you on your stellar education at USC as a Notre 
Dame grad. My son finally got through USC about a year ago. So 
I want to congratulate you on that.
    Mr. Donley. Congratulations. I understand that would mean 
you got a pay raise in that deal.
    Mr. Visclosky. Yes, sir.

                            ALTERNATE ENGINE

    Mr. Secretary, on the alternative engine, the Department 
has gone back to the committee with an analysis; and, from our 
perspective, it would appear to be almost a wash with some of 
the numbers used by the Department having no backup 
justification. If it is from your numbers a wash, what would be 
the continued resistance in not making sure you had a 
competitive basis here?
    Mr. Donley. Well, I think, as the Deputy Secretary's 
communication indicated, this has been closely studied; and it 
was in some respects a difficult call in the Department. We 
have looked at this issue for several years from several 
different angles; and, in summarizing that, it is the 
Department's judgment that there is still work to be done on 
the alternative engine, that the costs that need to be made in 
the near term cannot yet be seen to be recouped later. The 
near-term costs are pretty clear. The long-term savings are 
just not clear enough to warrant the investment in the second 
engine.
    I think another factor this year is the challenge that we 
are going through in restructuring the F-35 program itself, the 
underlying program and the fact that this would add additional 
costs on top of an already large and, to some extent, strained 
program. So that is where the Department came down on that 
subject.
    Mr. Visclosky. I have to vote. I would yield my time back, 
but if I could return to this issue.

                            C-5 RETIREMENTS

    Mr. Dicks. Yes, of course. As soon as you come back.
    Let us talk about C-5 retirements. Where do we stand on 
that? I know it is something that the Air Force has wanted to 
do. I am strongly in support of what you are attempting to do. 
Give us the status on this.
    General Schwartz. Mr. Chairman, we propose in 2011 to 
retire 17 C-5A aircraft; and we have certain statutory 
requirements to complete before we can activate that 
requirement process, including, among other things, to give you 
the report on the C-5 re-engining program operational test and 
evaluation (OT&E). That OT&E report is complete, and it will be 
submitted to our Office of the Secretary of Defense hires, and 
they will return that report to you sometime late summer or 
shortly after that.
    The key thing, sir, is that the mobility requirement and 
capability study has recently been delivered to the respective 
defense committees. It reflects that we have somewhat more 
capacity than we actually must have, and we find ourselves in 
the situation where we cannot have too much management reserve. 
That is the case now with 223 C-17s, ultimately, and the 111 C-
5s that are currently in the inventory. The mobility study, 
sir, has indicated that we need about 32.7 million ton miles of 
capacity.
    Mr. Dicks. 32.7 ton miles?
    General Schwartz. Million ton miles. That equates to the 
low 300s of large transport aircraft, rather than the 320 plus 
where we currently are, sir.
    Mr. Dicks. I will just tell you--and you know this better 
than I do. But you get over to Ramstein and you see all of 
those planes and you realize that, since 2001, all of those air 
lifters have been moving back and forth around the world. 
Anything about the logistics effort just to get everything into 
Afghanistan and get everything out of Iraq, I mean, it is 
extremely impressive.
    But I think up here we worry--and this mobility study 
should be enlightening for us to take a look at, and I haven't 
had a chance to take a look at it. But I think there has been 
some opposition up here I know on the retirement issue. But for 
money to buy new things and to operate the Air Force, I think 
we have to do this.
    I am going to return to Mr. Visclosky.
    General Schwartz. Mr. Chairman, if I might just say, it is 
not just the money, though. The coin of the realm is actually 
becoming manpower.
    Mr. Dicks. Personnel.
    General Schwartz. Absolutely.
    Mr. Dicks. Why don't you finish? I will go vote, and then 
we will go onto Ms. Granger.

                            ALTERNATE ENGINE

    Mr. Visclosky [presiding]. Chairman, thank you very much.
    Secretary, if I could return. You had mentioned a shorter-
term up front cost but without a clear idea of what the longer 
term savings might be. Can you quantify that as far as the 
additional investment in the short term?
    Mr. Donley. I believe the Department's analysis which was 
provided to the committee indicated there was probably about a 
$2.6 additional billion required in investment in the 
alternative engine ahead of us and that that had to be factored 
in to the total cost of potentially moving forward, and that is 
somewhat different than some of the analysis that the 
committees had looked at. That was performed by the Cost 
Assessment Program Evaluation (CAPE) office in the Office of 
the Secretary of Defense (OSD), and I think that is reflected 
in the study that has been provided to the committee.
    And, again, there is an indication, at least for some of 
the assumptions made, that there wasn't justification that was 
cited. I assume our staff could follow up with the Department 
and get those justifications.
    Mr. Donley. I believe the summary report provided by the 
Department was about three or four pages, and there were 
attachments behind it. What is available--I would be happy to 
follow up with the staff in terms of any additional info that 
would be necessary.
    General Schwartz. Sir, may I just offer a little--again, 
perhaps an operator's perspective here. There are three things 
with regard to alternate engine that concern me.
    There is a good argument that competitive pressure is a 
valuable thing. It is a valid argument in my view. The question 
is affordability. And the reality for me is, if more engines 
means less airplanes, that is not a good trade for the United 
States Air Force. Point one.
    Point two is that the reality is that the alternate engine 
will only be for the United States Air Force. The Navy is not 
going to have two engines aboard ship. Our international 
partners are not going to have two engines. So the reality is 
that if we have an alternate engine and there is a mandate for 
that, that obligation will ride primarily on the Air Force.
    Finally, we are not in 1980 any longer where high 
performance engines had suspect reliability. At the moment, 
there are at least two very successful fighter programs that 
operate on a single engine. The F-22 and the F/A-18-E/F are a 
case in point.
    And so, given those three considerations, I think we need 
to take a balanced view. That is my best advice, sir.
    Mr. Visclosky. General, following up on the proposition 
that you would end up being unable to secure as many aircraft, 
is that quantified in the justifications that were submitted to 
the committee as to how much of a shortfall you would have as 
far as aircraft from your perspective?
    General Schwartz. This is the basic argument, that if you 
have a fixed program top-lined for the F-35 and you fund the 
alternate engine out of that top line, it has the inescapable 
effect of reducing aircraft procurement.
    Mr. Visclosky. Have you quantified that in terms of number 
of aircraft?
    General Schwartz. I have not, sir.
    Mr. Visclosky. Sir, I am an accounting major. Could I do 
that myself from the report?
    Mr. Donley. I think the staff would have enough data to 
help you work through that calculation.
    But, sir, I would reemphasize the comment the Chief just 
made. Our challenge with this program has been--one of the 
challenges is that the second engine dollars continue to be 
directed into the program, have to be absorbed by the program, 
and that is a significant concern as we are trying to add money 
to development to support getting back on track with the test 
program, et cetera. So this program is costing us more going 
forward, and we need to be careful and cautious and very 
deliberate about what other capabilities and requirements we 
put on the program going forward.
    Mr. Visclosky. And, General, if I could get back--you 
mentioned reliability, but I didn't hear in that the question 
about the possible reliability of the engine. It was that you 
have at least two other aircraft with a single engine and that 
has proved reliable.
    General Schwartz. Sir, my point was that we have had 20-
plus years of development since the days of the so-called 
engine wars; and engine technology and manufacturing and what 
have you has progressed during that period. So the reliability 
of the engines is improved to the extent that at least in two 
of our frontline fighters we have chosen collectively to not 
have an alternate engine.
    Mr. Visclosky. General, the last point I would make and 
then just make a brief statement here is I appreciate also the 
observation that the Navy has no plans to do a second engine 
and that our international partners would not either. My 
supposition would be that one of the items in their mind is 
that there isn't a second engine, that there is no alternative 
engine permanently fixed in the Air Force's program, so there 
is no reason to plan for a second engine.
    General Schwartz. My point was, though, sir, that it would 
be one or the other. You will not find both engines in the 
inventory of those folks that we mentioned.
    Mr. Visclosky. Secretary and General, I appreciate your 
comments. I just must tell you generically--and it holds true 
for a range of problems. We have had shipbuilding hearings and 
others--I am very concerned that if we don't have competition 
in some of these programs, you have a hedge against risks in 
the future. I think just competition for all of us, as hard as 
all of us in this room do work, it gives you an extra edge.
    And I am very concerned about our manufacturing base, that 
if we end up having that single supplier--and I understand, 
also, there is only going to be X number of engines--is why do 
we only have six shipyards of significance in this country 
today that are building warships, is to make sure we don't lose 
that capacity. And I am very concerned about it here on the 
propulsion side.
    Thank you very much, Mr. Chairman.
    Mr. Dicks [presiding]. Ms. Granger.

                          JOINT STRIKE FIGHTER

    Ms. Granger. Thank you both for being here.
    Secretary Donley, in January, Secretary Gates announced the 
restructuring of the Joint Strike Fighter program. He stated 
there were no insurmountable problems, technical or otherwise, 
but is it your assessment that the measures taken so far are 
sufficient to guarantee success?
    I would ask both of you gentlemen the same thing.
    Mr. Donley. My judgment on this is yes, firmly. This has 
been a two-year process, and I think the committee is aware 
because you work so closely with this program. But F-35 has 
gotten close scrutiny for the last two years. We had an 
independent estimate delivered at the end of 2008 which 
indicated that there were challenges with the program, but we 
weren't sure how serious they were. We weren't sure how quickly 
the contractor might recover from those challenges. But, 
nonetheless, Secretary Gates added dollars to the fiscal year 
2010 budget for system development.
    But we also set in motion a second series of independent 
estimates which delivered at the end of calendar year 2009, 
just at the end of last year; and they confirmed the results of 
the first estimate, that the program indeed was behind.
    So after these two years of close assessment, the Secretary 
settled on the independent estimates going forward, which 
needed to recognize a slip in the development program, which we 
have done. So we have taken all of the measures that you would 
expect us to take, having reached that conclusion. We have 
added dollars for development. We have also lowered the ramp on 
production by 122 airplanes across the Future Years Defense 
Program (FYDP).
    That doesn't mean we are stopping production. In fact, the 
Air Force is requesting 22 aircraft in our budget for 
procurement this year for the F-35. We have also taken some 
early production aircraft and moved them over to support a 
stronger test program.
    The essence of this is the production is slightly behind, 
and that has put the test program behind, and that is really 
what we want to get through. We want to get through 
developmental tests. We want to get through operational tests 
and wring out any potential issues we have with this airplane 
before we go to full rate production.
    So I think the Department actually has done an excellent 
job in the last six or seven months, especially in getting its 
arms around this program, and that our visibility and 
management oversight of this program is now stronger than it 
has ever been.
    Ms. Granger. Thank you.
    General Schwartz. Ma'am, my take is that we are now in a 
position that we have less optimism and more realism, and that 
is a good thing.
    Ms. Granger. I will take that as positive.
    General Schwartz. It is.
    Ms. Granger. General Schwartz, your long-range plan calls 
for you to replace older aircraft with the Joint Strike 
Fighter, the F-15s, the F-16s, A-10s, because of the unique 
capabilities of the Joint Strike Fighter. Would you comment on 
what is unique about that?
    General Schwartz. There are several aspects of this.
    Clearly, it is a generation five fighter and what that 
implies is it does have low observable qualities which enable 
it to operate in defended air space with much less likelihood 
of having a successful intercept by either airborne threats or 
surface-to-air threats.
    But probably as important is that these machines will have 
sensor integration to the degree that we have only seen in a 
generation somewhat earlier in the F-22; and it is this 
capacity to integrate sensors with the low observable 
capability, in addition to having a highly maneuverable 
platform and one that, again, can succeed both in air-to-air 
and in air-to-ground role, that makes the F-35 the right 
platform on which we should base our future tactical aviation 
fleet.
    Ms. Granger. Thank you.
    I have one last question about the Joint Strike Fighter. As 
you know, I have the NAS JRB Fort Worth in my district; and I 
know that Fort Worth didn't make the short list for the Joint 
Strike Fighters operational bases in October. Can you tell me 
what the considerations will be in choosing the maintenance 
centers of excellence for the Joint Strike Fighter?
    I know that Fort Worth's location with Lockheed Martin 
being located there should be a strong contender. Can you tell 
me what considerations will be made?
    General Schwartz. I think the primary consideration will be 
the expertise. This is both human capital consideration and 
prior experience with low observable maintenance and what have 
you, and at least one of our depots currently has very 
substantial experience in that respect with the F-22.
    So I think the key thing in terms of sustaining the 
platform will be the workforce considerations, as well as the 
capacity of the depot to have the right kind of approach and 
philosophy. Because low-observable maintenance is not plug and 
chug as it is on traditional aircraft. It is a different 
formula and requires different skills and a different 
management strategy. And so I think it will depend both on 
people and the level of experience that the various candidates 
have.
    Ms. Granger. Thank you very much.
    Mr. Dicks. I may have missed this while I was out of the 
room, but I want to go back to ask this question and have you 
answer it. What are the risks of procuring over 250 aircraft, 
Joint Strike Fighters, or 14 percent of the total requirement 
in the low rate initial program?
    General Schwartz. Mr. Chairman, I think the risk is that 
you discover something in tests that is very significant and 
requires adjustments to the machines that are already produced. 
That is one of the things that the jet analyses, both one and 
two, I think have helped to smooth out.
    There is much less concurrency in this program than there 
was. It doesn't mean there is zero. If there was zero 
concurrency, it would be a 15- or 20-year development; and that 
simply is unacceptable as well. But as the Secretary suggested, 
we have reduced the production ramp and we have invested in 
accelerated development and operations tests so that we think 
that the risks are much, much better balanced than they were 
previously.
    Mr. Dicks. Mr. Rogers.
    Mr. Rogers. Thank you, Mr. Chairman.
    Mr. Dicks. Thank you.

                            NUCLEAR SECURITY

    Mr. Rogers. Last year, I asked you about the two incidents 
involving nuclear security; and we made some changes in the 
appropriations. What can you tell us today about the 
accountability actions that you have taken and if the fiscal 
year 2011 budget adequately addresses nuclear security?
    Mr. Donley. Sir, we continue to work this issue. It remains 
a very high priority for us; and, as I indicated in my opening 
remarks, I think it is going to require determination and 
patience going forward.
    In the last roughly 1 year to 15 months or so we have had, 
I think, a total of about 33 inspections. Twelve of those have 
involved unsatisfactory outcomes that required retesting. That 
retesting has been accomplished on seven units, and I think we 
still have a handful, four or five, remaining to be done.
    But this is a continuous process, and both the Chief and I 
are very committed to this work going forward. We are not going 
to back off on the inspection process. We need to stay with it 
going forward.
    Our Airmen are doing a tremendous job out there. But being 
certified for nuclear operations and being inspected for 
nuclear operations is not a once-in-5-year or 10-year process. 
It is a continuous effort to make sure that we are maintaining 
the highest standards we can, 365 days a year.
    Mr. Dicks. Would you yield just for a second on that?
    Mr. Rogers. Yes.
    Mr. Dicks. I assume, though it wasn't said, that this does 
involve a lot of training of your people. Is that accurate? Are 
we training these people? Giving them the understanding of what 
they have to do to succeed in this area?
    Mr. Donley. I believe we are, Mr. Chairman.
    General Schwartz. Absolutely. And I would say as well, just 
to amplify, that this is tough business. It is an unforgiving 
business.
    And so, sir, you asked about accountability. I don't like 
counting scalps. That is not what this is about. But we have 
taken action on seven officers over this period. But that is 
not the measure of success, in my view. The measure of success 
is assuring that our folks are well led, they are well trained, 
as the Chairman indicated, and they execute. That is the name 
of the game.
    Mr. Dicks. Mr. Rogers.
    Mr. Rogers. Well, is it correct to say that over the last 
year you have had 33 nuclear security inspections and eight of 
them unsatisfactory? Can you tell us more about that?
    General Schwartz. Sir, they ranged from a variety of 
things. For example, one persistent problem has to do with the 
personnel reliability program. That is the medical 
certification for our airmen to perform nuclear tasks. It is a 
paperwork-intensive process, and any glitch in the paperwork or 
the channels of communications is a bust. There is no middle 
ground. And, of course, in the technical operations, that is 
dealing with either maintenance or loading of weapons and so 
on, the demands are very stringent; and a deviation is a bust.
    So we have had both of those kinds of things occur. And the 
bottom line is that our inspections now are very demanding. 
They are invasive, and they do things like 100 percent 
sampling, which was not the case in the past. And so we are 
uncovering things that we overlooked before. And I don't 
apologize for turning over rocks. That is what we have to do.
    Mr. Rogers. So you established the Nuclear Weapons Center?
    General Schwartz. We did.
    Mr. Rogers. How is that working out?
    General Schwartz. I think very well.
    The basic philosophy behind this, sir, was that we had 
sustainment in the nuclear business distributed amongst three 
major commands and other activities. The same thing was true on 
the operations side. And the basic idea here was that the 
Secretary needed to have an accountable officer on the 
operations side and on the sustainment side who was personally 
vested in the performance of the enterprise, and that is now 
the case. Lieutenant General Frank Klotz is the operational 
person, and Brigadier General Ev Thomas is the accountable 
party on the sustainment side. They are carrying a significant 
load, sir.
    Mr. Rogers. Does your fiscal year 2011 budget adequately 
address nuclear security, do you think?
    General Schwartz. From the Air Force point of view, it 
does, sir. I would only indicate--and this is not so much in 
our lane, but it is in the broader appropriations lane--is that 
there are needs there that really are even outside the 
Department of Defense (DOD) realm, that are in the Department 
of Energy realm. And it is important, if I may recommend, for 
this committee to watch what happens with regard to the nuclear 
infrastructure that DOE is responsible for and those programs 
for maintaining the weapons in a safe, reliable state. That 
that, too, is adequately funded.
    Mr. Rogers. Briefly describe the interaction between DOE 
and the Air Force in this respect.
    General Schwartz. Sir, DOE fundamentally is responsible for 
the weapons, the weapon, the explosive package, if you will. We 
are responsible for the delivery systems. And that is the 
division of labor. There is some overlap there, and you have 
interfaces and so on. And, obviously, there is close 
collaboration. We have a brigadier general whose full-time job 
is to work these matters over at DOE headquarters, just an 
indication of the significance of this interaction. But to do 
this all properly requires not only resourcing the DOD side of 
this properly but, likewise, the DOE side.
    Mr. Rogers. What should we look for on DOE?
    General Schwartz. I think questions about sustaining their 
infrastructure and whether the programs related to DOD 
weapons--for us, the B61 air delivery weapon--is properly 
funded. And this has to do with renovations. It is not a new 
thing. This has to do with replacing time-limited components 
that age out.
    Mr. Donley. These are life extension programs for nuclear 
weapons.
    Mr. Rogers. Mr. Secretary, are you satisfied with the 
security now?
    Mr. Donley. I am. We always look for ways to do things 
better, and we work with the Defense Threat Reduction Agency in 
this regard. They also oversee our inspections, and they 
perform the Research and Development (R&D) for the Department 
of Defense that helps identify areas where both the Air Force 
and the Navy can improve security. But the long-term safety and 
reliability of the weapons is critical as we look toward a 
potential start follow-on agreement and we have to make longer 
term choices about what we are going to do with our ICBM force, 
with our bomber forces, and the weapons that go with them. So 
this close collaboration between the Department of Defense and 
the Department of Energy on future choices going forward and 
sustaining capabilities out for another decade and the decade 
beyond is critical work for our Nation right now.
    Mr. Visclosky. Mr. Rogers, if you would yield. I appreciate 
your line of questioning; and, gentlemen, I appreciate your 
responses.
    As most people probably understand, Mr. Frelinghuysen is 
ranking on the Energy Subcommittee and I chair it, and I do 
appreciate the active engagement of the Air Force and others at 
DOD. Because for too long, from my perspective, what has 
happened is it has been too easy in the past for DOD to simply 
say, here is what we need, because the cost is not attributable 
to them.
    Part of the problem we have on Energy is the inability of 
that Department to manage major construction projects; and what 
we have been, in a bipartisan fashion, pressing on is make sure 
we understand what that strategy is and appreciate you doing 
the review. What do you need with that strategy? That is, 
again, looking at the long term and now let's define the 
infrastructure before we start building something again when we 
can't manage the contract. So I appreciate your line of 
questioning.
    Mr. Rogers. Thank you, Mr. Chairman.
    Mr. Dicks. Mr. Boyd.
    Mr. Boyd. Thank you, Mr. Chairman. Mr. Chairman, you look 
good and comfortable in that chair.
    Mr. Dicks. Thank you very much.

                            STRATEGIC BASING

    Mr. Boyd. Secretary Donley, General Schwartz, great to see 
both of you. Thank you for your service and especially for your 
kindness to the people down in my area of the world and the 
trips you have made down there to try to understand a little 
bit better about who they are and what they do. They all 
certainly appreciate you, as their bosses, coming down there to 
visit them.
    General Schwartz, in your testimony--or I guess this is a 
combined testimony, is what it says on the front--you talk 
about strategic basing and the strategic basing process to 
ensure basing decisions are made in a manner to support new 
weapon systems acquisition and delivery schedules as well as 
organization activation milestones. Can you talk to me a little 
bit about that or the committee a little bit about who makes up 
that group? Do you provide oversight and guidance to the group? 
And who makes the final basic decisions?
    Mr. Donley. The Strategic Basing Executive Group is made up 
of several offices in our Air Force headquarters. Our 
installations and environment offices lead that, but it 
includes the A3/5, the operations folks, the programming staff, 
logistics, and other folks on the headquarters staff.
    This process was initiated after the Chief and I came in. 
The previous process in the Air Force was much more 
decentralized. It was run by our major commands who tended to 
look at potential bed-downs and basing decisions just within 
the framework of the bases under their responsibility, and we 
felt like we needed a much broader approach. We needed an Air 
Force-wide perspective on basing decisions.
    We also needed to bring to bear the expertise of the 
headquarters and some aspects of our work--environmental work 
just, for example--where we have a broad perspective of issues 
across the Air Force that perhaps a major command doesn't have. 
So we set in motion a process at the headquarters to 
deliberately review our basing decisions and get the full 
corporate attention of the Air Force on those decisions.
    The Chief and I do oversee that process. We are briefed 
periodically, actually, every few weeks. We have a very busy 
year, with a calendar of issues that we are addressing.
    Mr. Boyd. So you folks provide the oversight and guidance, 
and then final basing decisions is made by you guys?
    Mr. Donley. We do.
    Mr. Boyd. I noticed in your testimony that you alluded to 
the F-35, using that procedure on the F-35. Now, the CAF 
realignment that we are going through, do you intend to also 
use it with the F-22 basing decisions?
    General Schwartz. Yes, we will. But the F-22 is a somewhat 
different situation than is a new start program like the F-35. 
I mean, we have delivered 165 or so airplanes, and we have 25 
or so left to go, and so this is a more mature program.
    So there are other factors I think that bear on F-22 that 
overlay the question of basing which you would have with a new 
program, specifically fleet management, and that at one time 
the Air Force had in mind 700 or 381 or even 243. We end up 
with 187, and that is a different animal than a larger fleet. 
So we will have to make choices on basing for the remaining 
aircraft and perhaps those that are already bed-down. Our best 
judgment of how to manage that now smaller fleet which will be 
187 aircraft.
    Mr. Boyd. But it is your intent to use that basing 
procedure.
    Mr. Chairman, I will save my other questions for the next 
round.
    Mr. Dicks. Thank you.
    Mr. Kingston.

                                 JSTARS

    Mr. Kingston. Thank you, Mr. Chairman.
    Secretary Donley, I wanted to ask a little bit about the 
Joint-STARS system, and what I will do is kind of ask a couple 
of questions and then let you take it from there.
    But I know that the Air Force was studying fleet viability, 
and I was wondering what the status of that was. And then I 
understand two of the airplanes are grounded, and I was 
wondering what their status was. And I also wondered what other 
platforms might be a viable option, such as the Navy's.
    And then, in terms of the engines, as you know, we have 
appropriated lots of money, $730 million, for reengineering on 
18 aircraft. But I understand now that number is up to $1.6 
billion and not exactly sure what the status of that is and 
where we are heading with that.
    So tell me about the program.
    Mr. Donley. Right. I appreciate this opportunity, Mr. 
Kingston.
    The Joint Surveillance and Target Attack Radar System 
(JSTARS), first of all, is providing great capability in the 
current war fight. It provides ground moving target radar 
coverage, which is very valuable to operations in Afghanistan 
and Iraq as well. So this is an important capability going 
forward.
    We faced three issues that were not necessarily connected, 
and this was the challenge that the Chief and I faced.
    The Department had set in motion several years ago a re-
engining program for the JSTARS aircraft. These are Boeing 707 
airframes bought used by the United States Air Force almost 20 
years ago. So they have a lot of service time on them already. 
In some cases, their provenance, where they came from and 
exactly their condition when we took possession of them, is not 
quite understood in all the detail that we would like. But, 
suffice to say, these are old airframes. So a re-engining 
program had been explored, and the Department was on a path to 
re-engine these airplanes.
    At the same time, however, there are new radars being 
developed on new platforms with a range of other capabilities 
that also do ground moving targets and also dismounted targets, 
which are of high interest in the current war fight. So the 
future radar systems available to the Department are actually a 
broad range of alternatives out there that we had yet to decide 
upon in terms of which radars we would use.
    The third issue we had in front of us was the long-term 
viability of that 707 platform.
    So the Chief and I have endeavored to slow the re-engining 
process down until we decide what the future of the radar 
capability is going to be and, as we decide that, also 
understand the future life span of these aircraft, and how much 
money are we going to put into these old 707 airframes. So we 
have an analysis of alternatives under way to assess the ground 
moving target indicator requirements, and the future radars 
that we would need, and the alternative platforms on which 
those radars might be housed. That work won't deliver until 
next year, but, in the meantime, we should get some updates to 
inform our way forward.
    Also, in the near term, we received direction from the 
Department of Defense to proceed with the re-engining, two ship 
sets originally and then two more on top, for a total of four 
ship sets of engines, new engines to re-engine airplanes. So we 
are in the process of supporting that direction as well. But it 
is sort of four ship sets on hold is sort of where we are today 
on that program. But we still have work to do to finish the 
development of the re-engining. But we have dollars to do that.
    And in the meantime, again, we are putting dollars into 
sustaining the Joint STARS going forward because it is such an 
important capability for us now.
    I apologize for that long answer, but that is the broad 
overview.
    Mr. Kingston. Well, there are actually more questions on 
it, but I know time doesn't allow. Do I have time, Mr. 
Chairman?
    Mr. Dicks. You can ask another question, certainly.

                     HH-60 COMBAT SEARCH AND RESCUE

    Mr. Kingston. On the combat search and rescue helicopter 
program, I understand that the HH-60G helicopters--we are 
cutting back on that search and rescue; and I wonder, how do 
you address that?
    General Schwartz. Sir, you are quite right that the fleet 
of now 100 available helicopters, 96 to be exact, are quite in 
demand. And just to give you a sense of that, in 2009, we had 
over 700 saves in Iraq and Afghanistan with our airplanes. And, 
by the way, there are 16 aircraft that are deployed at the 
moment. There are 6 in Iraq and 10 in Afghanistan. And they, as 
I said, over 700 saves.
    These are not sort of the traditional combat search and 
rescue kinds of things. These are picking up Soldiers and 
Marines and other Airmen outside the wire or coalition partners 
to ensure that that golden hour after they are wounded is kept 
sacrosanct as the Secretary of Defense has mandated.
    What happened was we were pursuing a platform, the Combat 
Search and Rescue (CSAR), which, as you are aware, the 
Secretary cancelled last year. And so what we have agreement on 
is to recapitalize those HH-60 aircraft not with a new start 
but essentially with an off-the-shelf kind of capability. We 
think we can get an airplane that is in production in a 
competitive fashion that will allow us to recap the CSAR fleet 
in an affordable manner.
    Mr. Kingston. We are looking at buying two more 
helicopters, is that correct?
    General Schwartz. Sir, there is actually six in this 
budget. There is three in the base and three in the Overseas 
Contingency Overseas request (OCO) for combat losses.
    Mr. Kingston. That is enough, even with the surge?
    General Schwartz. Sir, we need to recap to the 112 aircraft 
program of record.
    Mr. Kingston. Thank you, Mr. Chairman.
    Mr. Dicks. Mr. Moran.
    Mr. Moran. Thanks very much, Mr. Chairman.
    I appreciate the fact that while all of the hullabaloo is 
going on in other parts of the Capitol you are here visiting 
us.
    Mr. Dicks. It is a better place to be.

                            CONTRACTING OUT

    Mr. Moran. This subcommittee has asked all of the services 
to provide us with an estimate of how much of their 
responsibilities were contracted out, and the Army replied 
fairly completely. We had the worst problem with the Air Force. 
As I understand it, we got only an estimate of contracted 
services.
    Now we see in your budget that you plan to do some major 
hiring. There is an increase of $1.6 billion for civilian 
compensation related to insourcing, but there is only a billion 
dollars left for contractor services. You might address that, 
and I hope briefly, because I have got a couple of other 
questions as well.
    Go ahead, general or Mr. Secretary, either way.
    General Schwartz. Sir, it is important to understand that 
the insourcing is not completely done with respect to the 
contract services. For example, there is some 1,300 spaces 
associated with joint basing where we absorb civilian workforce 
from other services which increased our population. So it isn't 
exclusively related to contract services.
    Mr. Moran. But how do you estimate how many contractors you 
have?
    Mr. Donley. This is a challenge in the sense that in some 
cases we do have good visibility into how many contractors are 
working for us on a contract. Sometimes that is just a fixed 
amount of dollars that we are putting against the work, and the 
number of contractors can fluctuate over time depending on the 
level of services that we are demanding from the contractor.
    But I will follow up, Mr. Moran, because there is 
something----
    Mr. Dicks. Will the gentleman yield? Just on that point, it 
would be one thing if we could find out how many companies, but 
you are saying contractor. You are talking about every single 
individual, is that what you just said?
    Mr. Donley. Sir, I am not familiar with the details of the 
committee's request and how it was phrased. So if there is 
something that we owe you there, we will follow up to get after 
it.
    [The information follows:]

    The Air Force submitted our Fiscal Year 2008 service contract 
inventory to the Office of the Secretary of Defense (DPAP) on July 1, 
2009, and they forwarded the inclusive inventory lists for the Army, 
Navy, and Air Force to the House and Senate pursuant to section 2330a 
Title 10 United States Code on August 4, 2009.
    We provided approximately $21 billion worth of service contracts in 
this inventory. This amount was not an estimate, but rather a figure 
pulled from our official contracting system, the Federal Procurement 
Data System--Next Generation system. We estimated 141,000 contractor 
full-time equivalents (FTE) for the $21 billion inventory on standard 
factor-per-FTE applied across the total obligated amount or on 
estimates provided by Government personnel closely associated with the 
contract.
    We excluded $14 billion in the Product and Service Codes (PSC) for 
research, development, test and evaluation and military construction, 
consistent with the definition of contract services found in the Fiscal 
Year 2008 National Defense Authorization Act, Section 806. We also 
excluded approximately $3 billion in the PSCs for lease or rental of 
equipment and facilities and other special services where there is not 
an FTE or person closely associated with this action. Using the same 
standard factor-per-FTE methodology described above on these contracts 
yielded another approximately 75,000 of estimated contractor FTEs. All 
together, our final estimate is that we had approximately 216,000 
contractor FTEs on our estimated $38 billion worth of service contracts 
for Fiscal Year 2008.

    Mr. Dicks. Mr. Moran.

                              EOP TRAINING

    Mr. Moran. The authorization, the 2008 NDAA required all 
services, including the Air Force, to provide contractor 
inventory; and the Air Force has not done that. So that would 
be the best to follow up.
    The movie Hurt Locker just got an Oscar. I kind of was 
rooting--I thought Avatar was a little better. But, anyway, 
there is some relevance here to the Air Force. Because, as you 
know, we have an explosive ordnance disposal school; and it 
functions very well. And in fact there is only a 16 percent 
failure rate for the Marine Corps, 21 percent for the Navy, but 
a 47 percent failure rate for the Air Force. There is something 
wrong there. Almost all of it is for academic reasons. It must 
be that you are not submitting the quality of personnel to that 
school that the other services are, and that must account for 
the failure rate of almost 50 percent.
    Do you want to address that, General?
    General Schwartz. Congressman Moran, I would only offer 
this as sort of background.
    The Marines, for their Explosive Ordnance Disposal (EOD), 
their entry level is at the E-5 level. So more mature, they are 
proven, at least one tour, probably more in the Marine Corps, 
and so on. We do have some entry level folks go into the EOD 
field.
    Secondly, with respect to the Navy, they start their EOD 
training after they complete dive training, so they have a 
filter in front of the EOD training that--I don't know what the 
exact numbers would be, but it indicates to me that it is not 
quite apples and apples between us, the Marine Corps, and the 
Navy.
    Nonetheless, your point is that we need to scrutinize the 
skills and the potential of the folks we send to the EOD 
school, and we agree with that, and we are working that issue 
to make sure that of course they are volunteers, and they have 
an interest in this very demanding and risky discipline, but 
they need to have the academic skills in order to get there.
    Mr. Moran. Sure. Let me just ask one last question to 
conclude.
    The Air Force chose not to play an integral role in the so-
called war on extremism that the other services did. In fact, 
such missions were termed in lieu of traditional missions. Now, 
just recently you now referred to them as joint expeditionary 
tasking.
    But I think it would be useful to cite briefly and then for 
the record the scope of the Air Force's role in this battle 
against extremism. Because those are the wars that are going 
on, not any cold war or a traditional role. But it would be 
useful to know how many airmen are currently deployed in the 
Central Command area of responsibility; of that, how many are 
actually serving on the joint expeditionary tasking missions.
    General Schwartz. Sir, we have got 30,000 in the United 
States Central Command area of responsibility. And depending on 
the time of taking the inventory, it is at 4,700 and growing 
and will be at 5,300 when the surge is complete in Afghanistan.
    By the way, when we changed the name from in lieu of to 
joint expeditionary tasking, that was very deliberate, sir. The 
point was this was--if you ask the kids whether they thought 
what they were doing was worthy, of course they do. They didn't 
think what they were doing was in lieu of anything. So we 
changed the name deliberately. And we are all in, is the short 
answer.
    Mr. Moran. That is what I want to hear.
    Thank you, General. Thank you, Mr. Secretary. Thank you, 
Mr. Chairman.
    Mr. Dicks. That is a very good answer. I appreciate that 
very much.
    Mr. Hinchey.

                           STEWART ANG BASING

    Mr. Hinchey. Thank you very much, Mr. Chairman.
    I just wanted to ask you a question about the C-5 
retirements and the C-17s coming in. And I understand this 
question may have been asked before, but I just have a personal 
interest in it with regard to Newburgh. I was just wondering 
what the situation is there with regard to the changing that is 
going on in the context of Newburgh.
    General Schwartz. Sir, we have proposed to retire 17 
aircraft in this budget submission, 17 C-5s.
    In answer to an earlier question, we are using this basing 
process to determine which installation specifically will lose 
aircraft and transition to the C-17. And I don't have a 
specific answer to you whether it is Stewart or not. However, 
there will be one Air Force Reserve installation and one Air 
National Guard installation is what it looks like to me now.
    Mr. Hinchey. So this is something that we will learn over a 
short period of time as to how this evolves?
    General Schwartz. You will know that, and you will 
certainly have advance notice, not late in the game.

                           ALTERNATIVE ENERGY

    Mr. Hinchey. Thank you very much. I appreciate it.
    One of the things that we accomplished there recently was 
the establishment of what is called the Solar Farm. This is 
something that is going to generate about half of the energy 
that is needed there at the Newburgh Air Base, and we are now 
focusing on coming up with the second half at some point in the 
future. And I know this is of great interest to you, and I know 
it is something that you are engaged in.
    I wondered if you could just talk a little bit about it in 
a general way about the intentions and how we are going to be 
dealing with these energy needs and deal with them more 
efficiently.
    Mr. Donley. This is an important priority for our Air Force 
as you appreciate--I am sure the committee appreciates the 
Department of Defense is the largest consumer of fossil fuels 
in the Federal Government, and the Air Force is the largest 
consumer in the Department of Defense. So our three-pronged 
strategy here is to increase supplies where we can--to include 
looking for alternative sources of energy, to reduce demand 
where we can, and through operational profiles we can find ways 
to operate more efficiently. We have driven our energy 
requirements down over the last 5 to 10 years deliberately.
    And the third thing, which sort of wraps it all together, 
really, is to make energy use a consideration in all that we do 
in peacetime and wartime operations. We can by our own behavior 
affect the requirements for energy and also identify 
alternative sources.
    Solar is an important part of that. It is site specific. 
And one of our most recent initiatives, especially on the solar 
and wind side, is to get a little bit more proactive in 
identifying the new technologies that are coming on, working 
with State and regional and county governments to identify 
issues early in that permitting process. Because not all of 
these energy initiatives take place on Air Force property, not 
all of them take place on Federal property, but they may 
influence airspace or they may influence our operations. So we 
need to get more proactive in working with local communities to 
work through those issues so that we can get both the 
operational effectiveness we want and the benefits of new 
energy sources along the way.
    Mr. Hinchey. So this is an issue that is getting really the 
appropriate amount of attention and it is moving forward in a 
positive way.
    Thank you very much.
    Mr. Dicks. Mr. Tiahrt.

                               INSOURCING

    Mr. Tiahrt. Thank you, Mr. Chairman.
    I guess, if I understood the inserts you write, it is going 
to take $1.6 billion increase in civilian competition to do the 
job that $1 billion of contracting did.
    I think contracting is more efficient, personally. I mean, 
I don't hire somebody full time when I need somebody to come 
fix my furnace or take care of the electrical in my house. It 
just makes sense to contract for some services when you need 
them and not have somebody there full time.
    So I, for one, will try to take some of this pressure off 
of you guys for insourcing everything. Because I think it is 
less efficient and an example that was given is 37\1/2\ percent 
less efficient.

                         LIGHT ATTACK AIRCRAFT

    I want to talk about the light attack aircraft. There are 
two programs now. One is spearheaded by the Navy called 
Imminent Fury, and the other one is actually the Air National 
Guard doing a demo project.
    I think the requirement is out there for a light attack 
aircraft, but I think there could be some synergism in moving 
these programs in a parallel fashion, and I wondered if you 
would consider looking at that, maybe coordinating with the 
Navy on coming up with one program. There have been some great 
advantages shown in the Air National Guard program. If we could 
make that available for the Navy or somehow coordinate them--
and I wanted to put that on your radar screen.
    General Schwartz. Sir, as you know, we are participating 
with the Navy and the Imminent Fury demonstration. That is not 
an acquisition program. It really is a demonstration which will 
occur in Afghanistan of that capability. And, as you suggested, 
there is also a demonstration going on in the Air National 
Guard, and what we intend to do is this--is in fiscal year 2012 
start on the light strike side, go through the process, develop 
the requirements, and have a standard acquisition approach 
which will be competitive.
    Mr. Tiahrt. I think we are seeing in procurement--this is 
probably an age-old knowledge milestone that we seem to avoid 
on every new contract. If you look at the Presidential 
helicopter, we knew how to make a helicopter fly, but as soon 
as we start loading it up with new requirement, all of a sudden 
it became too heavy to fly in a program sense, not necessarily 
in an aerodynamic sense.

                    STREAMLINED ACQUISITION PROCESS

    The F-35, I think planned changes--you talk about 
concurrency, which I think is a good way to proceed, but it 
seems like we ought to be tighter on the base requirements with 
planned upgrades at PDM, for example, a bus. If you need a bus 
down to the weapons pylons, put the bus in. And if you get a 
more advanced piece of technology for a bus, then you would 
replace it at the planned program depot maintenance.
    I think one of the reasons we get into these elongated, 
expensive programs is we are not tight enough on the 
requirements for the underlying aircraft. And I may be 
mistaken, but aerodynamically it is pretty stable as far as the 
platform we need well into the future. The changes come from a 
lot of the avionics or the weapons capability. By holding the 
line on those growth ideas, we can make those planned upgrades 
without delaying the program so far and driving the price up. 
Is that part of the plan of going forward with F-35 and other 
programs?
    Mr. Donley. It is. There is a joint executive steering 
board for the F-35 program which represents all of the 
leadership, the stakeholders of the program; and they track 
very carefully the content of the program and both technical 
and cost trade-offs along the way. So this issue of controlling 
configuration is critical for F-35 and other programs. It has 
gotten a lot more attention over the last couple of years, as 
it should.
    General Schwartz. And I would only add, sir, that that 
approach is what we have in mind for long-range strike. That is 
to let the platform mature over time. We are not looking to 
have something necessarily that is 100 percent of what one 
might conceive of the need but rather to be a little bit less 
ambitious and then to improve over time.
    Mr. Tiahrt. Once the real estate is established inside the 
aircraft, then you can do a lot of things with--that given 
envelope is what we need to put some firm--as we go forward, I 
would like on the next generation bomber, I think that pattern 
would be very helpful for us.
    Thank you, Mr. Chairman. Thank you, guys.

                        UNDEFINITIZED CONTRACTS

    Mr. Dicks. Thank you.
    To meet urgent needs, the Department of Defense can 
authorize contractors to begin work and incur costs before 
reaching a final agreement on the contract terms and 
conditions, known as undefinitized contract actions or letter 
contracts. As of October, 2009, the Department of Defense had 
429 contracts that were undefinitized. Of those, over 160 were 
Air Force contracts, many of them far exceeding the time 
permitted to definitize. How are undefinitized contracts 
different from normal contracts?
    Mr. Donley. In rough terms, Mr. Chairman, they are shorter. 
They are able to be put together in a shorter period of time. 
They still commit the government to funding a program. They 
still commit a contractor to delivering certain capability. But 
they are preliminary, and they need to be followed up with a 
more permanent contract arrangement negotiated in greater 
detail on both sides. So you could provide the flexibility we 
need to start contract actions early.
    I think our challenge, as the committee is aware, is we 
have let these Undefinitized Contract Action (UCA) persist for 
too long and we have used them too easily to bridge over the 
actual negotiation of contracts that needs to take place to get 
a better handle on deliverables.
    Mr. Dicks. Look. You answered my second question. In your 
experience, does the benefit of starting work sooner outweigh 
the loss of control experienced in a UCA?
    Mr. Donley. I do believe the Department and not just the 
Air Force, but if I can extend this to the DOD level, we do 
need UCAs. We do need the flexibility to use this tool.
    And it is true that we need to tighten up on this. We have 
identified the specific areas in the Air Force acquisition 
process where this is taking too long. We have elevated the 
approval authorities to undertake UCAs so we sort of staunch 
the bleeding up front so there should be less rapid growth in 
the use of UCAs and we should be working down a backlog of 
existing UCAs and converting those to contracts as quickly as 
we can.
    Mr. Dicks. Does a shortage of contracting officers within 
the Air Force impact the Air Force's ability to definitize 
contracts?
    Mr. Donley. I think it is a factor. I think General Hoffman 
could provide a much more sharp perspective on this. But we are 
short on contracting personnel; and, in fact, if you look at 
the stressed career fields in the United States Air Force, 
contracting is near the top.
    Our contracting folks are operating on a one-to-one dwell 
in the (USCENTCOM) area of operations and actually were called 
upon to help the Department work contracting challenges in 
(USCENTCOM) that arose about three, four, five years ago; and 
where the Department needed some infusion of contracting 
expertise, they came to the Air Force to do that. So that has 
had an impact, and we are trying to build up the contracting 
workforce in our acquisition improvement program. But I think 
General Hoffman could provide more detail on that.
    General Schwartz. And, sir, if I may just add, by the way, 
those contracting assessments are joint expeditionary taskings; 
and they are doing real work for the country. Sir, I might just 
say, to give you an example, because I know you consider us to 
be a bad actor in this regard.
    And with the Global Hawk program, for example, there are 
six undefinitized contracts all of which will be definitized 
before the end of the fiscal year. So it gives you a sense, and 
I know the staff is watching this carefully for you, but we are 
bird-dogging it as well.
    Mr. Dicks. Good. Your assurance is making me feel better.
    But just for the record here, I have to establish this, 
because this is part of our oversight responsibilities. The FAR 
states that undefinitized contract actions should be 
definitized within 180 days of signing the UCA or before 
completion of 40 percent of the work to be performed, whichever 
occurs first. However, many of the contracts are not 
definitized within the required 180-day time period. In some 
cases, years have passed without definitization and sometimes 
funds are obligated in excess of the limits normally allowed. 
For example, at the end of January, the Air Force's 
aeronautical systems command at Wright-Patterson Air Force 
Base, there were 87 open UCAs averaging 363 days open, 20 of 
the 87 in excess of 600 days.
    What reasons are there for UCA to not be definitized within 
the permitted time periods?
    Mr. Donley. Mr. Chairman, I would like to take that for the 
record. I think each of those program, each of those contract 
actions has its own story; and I need to have the experts 
characterize that for you.
    [The information follows:]

    The major reasons why undefinitized contract actions are not 
definitized within the permitted time periods include late submitted or 
inadequate proposals, audit delays, changes in requirements and 
personnel constraints.

    Mr. Dicks. Okay. Also, one final thing. Receiving a 
favorable audit from the Defense Contract Audit Agency is also 
an area that takes too long. What is the Air Force doing to 
enable the Defense Contract Audit Agency to conduct more timely 
audits?
    Mr. Donley. We continue to be in dialogue with the Defense 
Contract Audit Agency (DCAA) about how they can shorten their 
process and how we can work together to make that process more 
efficient.
    Mr. Dicks. Yeah. We have a few more questions here on that 
subject for the record.
    Mr. Tiahrt.

                   LIGHT ATTACK ARMED RECONNAISSANCE

    Mr. Tiahrt. Thank you, Mr. Chairman.
    This sort of relates to all of us. Gentlemen, I have 
requested two documents relating to the light attack armed 
reconnaissance program. Unfortunately, I have been informed 
that Members of Congress now have to file a Freedom of 
Information Act request to gain access to any document. Can you 
please provide my office and this committee with the capability 
based assessment and the component cost analysis for the LAAR 
program?
    Mr. Dicks. Is this true? Do we have to go--this can't be 
true.
    Mr. Donley. Mr. Chairman, I am not aware of any new 
policies on this subject. I think the issue--and I would let 
the lawyers answer this more carefully for the record. I 
believe the issue has to do with requests from individual 
Members on matters which get close to or cross over into source 
selection sensitive information.

                         COMPASS CALL AIRCRAFT

    Mr. Dicks. We don't want to do anything, especially, Mr. 
Tiahrt and I, to cause any problems in that respect, but we 
certainly want the information for the committee.
    I have one more that I wanted to ask; and then if anybody 
else has a question, we will go to you.
    The committee is pleased to note that the Air Force has 
focused funds on the budget on electronic attack aircraft. But 
we have some concerns over the plans for converting of 45-year-
old aircraft. Specifically, the request includes funds to begin 
the modification of the WC-130H aircraft into an EC-130H 
compass call aircraft. This would increase the compass call 
inventory to 15 aircraft.
    You may have gotten into this earlier, but I want to go 
back to it. The request states that the conversion will cost 
$150 million, but it appears the Air Force is only funding a 
portion of the requirement in fiscal year 2011. Why are we 
taking an aircraft of this age to do this?
    General Schwartz. Sir, it is structurally sound. The 
compass call mission is not a mission which places great demand 
on the C-130 airframe because it is in that altitude mission 
and so on. So this approach was a way to increase the 
electronic combat capability we need at minimum cost. And it is 
$150 million over three years. It is 2011, 2012, and 2013; and 
it is funded accordingly, sir.
    Mr. Dicks. How does the Air Force justify partial funding 
of the conversion--you are saying it is complete funding? It 
appears to be incremental funding.
    General Schwartz. Sir, I am saying that the program is 
fully funded.
    Mr. Dicks. It is fully funded.
    General Schwartz. It is fully funded. I take your point 
that it is not in one fiscal year, and we will come back to you 
on the record for that.
    [The information follows:]

    The initiative to convert a WC-130H to an EC-130H was proposed in 
early Fiscal Year 2009 and some funding has been included in the Fiscal 
Year 2011 President's Budget request. Execution of this conversion 
requires three years. The first year is needed for production 
engineering and drawings, ordering long lead components, and Group A 
kits. The second year involves Group B kit production. Actual 
modification/installation occur in year three. Since these tasks are 
viewed as distinct and separable, funding for the Group B kits and 
modification would be early to need in FY11. During the Fiscal Year 
2011 Program Objective Memorandum process funding for the three phases 
is spread across Fiscal Years 2011-2013. Shown below is an updated 
program office cost estimate for the conversion of a WC-130 to an EC-
130H.
    $35.3M--Production engineering/drawing
    $11.8M--Long lead components
    $26.6M--Group A kit production
    $48.3M--Group B kit production
    $27.9M--Aircraft modification/installation
    Production engineering, long lead items and Group A kits are funded 
in Fiscal Year 2011 ($73.7M). Group B kits are programmed in Fiscal 
Year 2012 ($48.3M) and aircraft modification/installation is programmed 
in Fiscal Year 2013 ($27.9M).

                         COMPASS CALL VIABILITY

    Mr. Dicks. This past year the Air Force conducted a fleet 
viability board review of the existing fleet. What were the 
results of the review?
    Mr. Donley. Sir, we have had several. Can I ask which 
airframe the Chairman is referring to?
    Mr. Dicks. This is the same one. This is on the WC-130H 
aircraft.
    General Schwartz. Sir, the C-130 fleet viability is a 
project that is ongoing for this year. It has not yet reported 
out. The most recent fleet viability that we did was on the 
JSTARS that was referred to earlier by Congressman Kingston.
    Mr. Dicks. Are there other questions?
    Mr. Kingston first. We will go in order.

                             CYBERSECURITY

    Mr. Kingston. Thank you, Mr. Chairman.
    General, I wanted to ask about cybersecurity, and you may 
need to follow up if you don't know these numbers. But 
generally how big of a problem is it? How many break-in 
attempts do we get each day and into what systems are they 
worst? Who is doing it? And how often are they successful?
    And then, partly provincial, in my hometown, Armstrong 
Atlantic University has a cybersecurity center which they 
started about 4 or 5 years ago. I frequently get briefed by 
them; and I am always astounded, no matter how many times I 
see, the number of attacks that come in worldwide and the 
places that they come from and the freelance agents and the 
organized country effort. It just seems like it is all over the 
place. I wonder if you could----
    General Schwartz. Sir, it is a major issue in our 
unclassified networks; and we work hard, very diligently, and 
have, no kidding, some of the best talent working to defend the 
net. In fact, we stood up an organization called 24th Air Force 
to do exactly that, to defend the net.
    Now, this is both on the unclassified side where we have--I 
have been speaking for 15 seconds. We probably had 15 attempts 
to work into the system. We are reasonably secure.
    But on the classified side, I would indicate that we are 
quite secure, very secure. The dilemma is that, as you 
suggested, there are all kinds of actors out there. There are 
nation state actors. There are individuals. There is criminal-
related activity. There are fun seekers that are doing this, 
and they certainly take time on DOD networks.
    So I think if I had one comment to make to you, sir, is 
that the Secretary of Defense's initiative to stand up the sub-
unified cyber command is an essential undertaking for our 
Department to put the focus on this as a discipline and as a 
command entity.
    There is some concern that DOD might take over, might move 
outside dotmil. I don't see that occurring. But within dotmil 
and perhaps for dotgov, we need to make the best use of all of 
the talent that is available in agencies within DOD like our 
24th Air Force, like the National Security Agency and 
elsewhere.
    Mr. Kingston. Aside from the attacks on your main computer 
programs, what about listening devices or trying to get into 
individual cell phones or BlackBerrys, that has got to be out 
there as well?
    General Schwartz. It is a counter-intelligence concern and 
one that we take seriously.
    Mr. Kingston. How vulnerable do you think Members of 
Congress are, based on what you know, with our own BlackBerrys 
as we go on codels or even not leaving the United States?
    General Schwartz. I would have to tell you I would say 
vulnerable.
    Mr. Kingston. Do you use a BlackBerry?
    General Schwartz. I do.
    Mr. Kingston. Well, is that the inconsistent with what you 
just said? I am trying to figure out, should I throw mine out 
or not?
    General Schwartz. I don't think you should, but you need to 
think about what you are using it for, and that really is the 
guidance that we have provided our people.
    Now there are certain folks in the Air Force that won't use 
a BlackBerry because of the work that they do. In my case, if I 
get a pulse from the media, it is a vehicle that I use to good 
effect, in my view.
    So we train our people and instruct our people to be 
judicious. And in some cases they don't get to use it at all 
because they are in very sensitive positions. My hunch is that 
a similar sort of protocol applies here on Capitol Hill as 
well. Folks from the Intelligence Committee, for example, might 
have different rules than other committees.
    Mr. Kingston. Thank you.
    Mr. Dicks. I think that is one reason we put in this 
password, which is very annoying, but we had to do it. But it 
has to be done, and we are doing it.
    Mr. Visclosky.

                           SATELLITE PROGRAMS

    Mr. Visclosky. With these thumbs, that password is very, 
very annoying. It is just hard.
    Mr. Secretary, on the satellite programs, you have a number 
of significant systems and, apparently, there has been some 
significant schedule growth, cost increases, a lot of which may 
have to do with unrealistic cost estimates in the first place, 
questions about technical maturity. Are there simply now too 
many systems, is there too much program for the monies that you 
have for the satellite program?
    Mr. Donley. Sir, again, I think each program has its own 
story and own history. We had had I think, up until a couple of 
years ago before Secretary Gates took a closer look at this, we 
did have a number of satellite systems cued up, especially in 
the secure Satellite Communications (SATCOM) area where we had 
more technology perhaps programmed than we could afford. And 
that resulted in the cancellation of the TSAT, the 
transformational satellite program.
    We have stepped back to focus on the execution of the AEHF 
program, but we are still looking for opportunities at some 
point in the future to insert new technology, much along the 
lines as Mr. Tiahrt described, where and when we are ready to 
do that and we can afford it.
    Again, each of these programs has its own story. I think, 
right now, we are most concerned with the EELV program, the 
evolved expendable launch capability that we have enjoyed 
success with for so many years now. I think it is--I want to 
say 65 or so. But it is a string of successful launches using 
EELV.
    And we have benefited from some early multiyear contract 
arrangement which has since expired. On that program, we are 
looking at significant cost growth, which we are not happy 
with; and we are looking for alternatives going forward. And we 
are looking at additional pressure on the solid rocket motor 
and the industrial base that goes with that. With the changes 
in National Aeronautics and Space Administration's program, we 
face some significant challenges in developing an affordable 
funding profile for space launch support. So that is an area 
that we are looking at in particular right now.
    Mr. Visclosky. I don't know that we will have a hearing on 
launch per se, but are there a couple of issues and any 
monetary value that we should know or be particularly concerned 
about on the launch side before we mark up our bill?
    Mr. Donley. We will certainly support the committee's 
schedule as best we possibly can with the latest information 
that we have on the EELV.
    Mr. Visclosky. And on the satellites themselves, is there--
getting back to Mr. Rogers' line of questioning before about 
DOD and DOE--between the Intelligence Committee community and 
some of the requirements that they are asking for some of these 
satellites and in a sense overrequesting for capabilities here, 
given again technology that is available today and the dollars 
that are available today? Is there a disconnect there?
    Mr. Donley. Sir, I wouldn't speak specifically to the 
systems that are procured in the national programs, although I 
will say that we have a close relationship with the National 
Reconnaissance Office that has--we have had that close 
relationship for many years, that continues, and we continue to 
collaborate on trade-offs where we can between space-based and 
airborne systems and also identifying capabilities on the DOD 
side that can be hosted elsewhere in either the Intelligence 
Community or even on commercial satellites as well. So we are 
looking for creative alternatives for hosting DOD-required 
capabilities on different kinds of platforms, rather than just 
necessarily owning and launching and operating everything 
ourselves.
    And I should add that you will see this play out in the 
Space Posture Review, which should be delivered to Congress 
later on this spring, early summertime frame. You will see the 
policy level discussions and trade-offs on sort of organic 
government-owned versus international partnerships and 
commercial partnerships as well and the kind of judgments the 
Administration is about to make, if you will, on how to strike 
the appropriate balance in that mix.

          INTELLIGENCE, SURVEILLANCE RECONNAISSANCE PERSONNEL

    Mr. Visclosky. And we would look for that late spring.
    One last line of question, if I could, Mr. Chairman. You 
had mentioned before, Mr. Secretary, in one of your answers 
about stress specialties; and you mentioned contracting and 
acquisition. I understand you also have problems as far as 
intelligence surveillance and reconnaissance, nuclear missions. 
What are you doing to address that issue? And again is it a 
resource issue? Is there something we ought to have particular 
concern about?
    General Schwartz. Sir, what we have done is we have made 
major moves in the ISR area--I mean, as many as 4,700 spaces--
to try to compensate for the demand there. We have moved 2,500 
spaces in Fiscal Year 2010 to strengthen the nuclear 
enterprise. We also moved roughly 2,000 spaces into aircraft 
and missile maintenance. When we went through the drawdown 
episode a couple of years ago, we overshot. So we needed to 
bring that back up to an appropriate level.
    Smaller numbers of spaces have gone to the other 
disciplines. Certainly, as you suggested, contracting, public 
affairs is a high-demand activity. Security forces is a high-
demand activity. Believe it or not, the chaplaincy is a high-
demand activity.
    And so we are doing the best we can, but I have to tell 
you, sir--and this is a significant matter for the 
appropriators--our personnel costs are a major concern to the 
Secretary and me. To the extent that if we don't watch this and 
do this carefully, our personnel costs will begin to push out 
important content elsewhere in the Air Force portfolio. So we 
need to be judicious, and the bottom line is we are not going 
to grow because we can't afford it.
    So if we have some areas in the Air Force that are 
expanding, like intelligence surveillance and reconnaissance, 
we are going to have to shrink in others; and we are going to 
have to gather manpower and financial resources from within our 
existing portfolio.
    Mr. Visclosky. Gentlemen, thank you.
    Thank you, Mr. Chairman.
    Mr. Dicks. Ms. Granger.

                          F-22 RAPTOR AIRCRAFT

    Ms. Granger. Just a couple of quick questions about the F-
22.
    General Schwartz, Secretary Gates described the F-22 as the 
critical hedge against new threat systems such as the Russian 
fifth generation fighter. I saw in your testimony that you 
invested $2 billion in improvements to upgrade the F-22. Is 
this sufficient to continue the air superiority of the F-22? 
And tell me a little bit about long-term modernization.
    General Schwartz. Ma'am, we are going to have 150 block 3 
or block 3\1/2\ quality kinds of airplanes. These will be 
machines at the very top tier of the F-22 capability.
    Training aircraft, on the other hand, so-called block 20 
aircraft, won't have all of the wherewithal that the 
operational aircraft will have. So there will be about 28 or 
so--forgive me--36 of the block 20 airplane and the remainder 
will be full-up capabilities which will have both air-to-air, 
for which the airplane was primarily designed, as well as air-
to-ground capability. And that is where some of the 
advancements will come as we go down the line.
    It is very important with the smaller fleet we have that we 
continue to invest in sustaining the F-22, both its low 
observable qualities, its avionics. We are going to put a 
different data link on the airplane that is compatible with the 
F-35. The data link that it currently has is only F-22 
specific. In the way we used to think about employing the 
airplane, that was okay. It is not anymore. It is a secure data 
link, but we need to have one that can be used throughout the 
force and particularly among generation five capable fighters.
    So those are the kinds of improvements we are making, and I 
would appeal to the committee to support us on making those 187 
airplanes as capable as they can be.
    Ms. Granger. Thank you very much. And thank you both for 
appearing and your service. Thank you, Mr. Chairman.
    Mr. Dicks. Mr. Boyd.

                              F-22 BASING

    Mr. Boyd. Thank you, Mr. Chairman.
    And, General Schwartz, this is a follow-up to what Ms. 
Granger--you and I have had many discussions about the F-22, 
and you know of my parochial interest in that. I asked you 
earlier about the Strategic Basing Executive Steering Group, 
and you have explained to me that they would be involved.
    What I didn't ask you was when, and I have asked you that 
before, and I felt it would be remiss and you would be very 
disappointed if I didn't ask you here today.
    General Schwartz. With respect to what we will do with the 
F-22 from a fleet management point of view, that is a 
summertime frame decision process.

                           PERSONNEL TRAINING

    Mr. Boyd. All right. Okay. Thank you very much, General.
    Now, to follow-up on Mr. Visclosky's line of questioning 
relative to the personnel and your concern about personnel 
pushing folks out, you are trying to redesign your whole system 
and scheme of things. The CAF, your reductions there, you have, 
I understand, according to testimony, 3,600 personnel who will 
be reassigned, retrained, go into other fields as you do this 
realignment. About one-sixth or about 600 of those, I think, 
are coming out of the F-15 schoolhouse area that I have an 
interest in. There is going to be some retraining requirements 
there. And my question really is about how long that transition 
will take. And by the time these airmen are retrained, will 
those requirements still be available?
    General Schwartz. Sir, there will be some retraining, 
clearly. There will be some sort of immediate transfers where 
the skill set is not weapon system specific or something along 
those lines, and it depends on the specific skill. If we are 
talking about F-15 pilots transitioning to another airplane, it 
might be six months. With respect to a maintainer moving to an 
F-16 or another aviation weapons system, it is probably less 
than six months. So we are talking about within the year 
basically of having people that would migrate out of their 
current mission assignments and be applied to others elsewhere 
in our Air Force.
    In more rare cases, you will have the kind of thing where 
people are making a hard change, maybe, for example, might go 
from maintenance to becoming a sensor operator on an unmanned 
or remotely piloted aircraft. That is probably a year plus to 
do that.
    So it depends, sir, but I would emphasize again, and 
reinforcing the comment that I made earlier, that if we are 
going to remain relevant and our capabilities are those which 
the joint team needs now in going forward, we need to begin to 
make these changes, as painful as they are, sir.
    Mr. Boyd. Thank you very much, General Schwartz, Mr. 
Chairman.
    Mr. Dicks. Mr. Rogers.

                          MOTHBALLED AIRCRAFT

    Mr. Rogers. Tell me, where do you store mothballed 
aircraft?
    General Schwartz. Sir, it is done at Davis-Monthan Air 
Force Base in Arizona at the so-called graveyard.
    Mr. Rogers. Are those planes useless?
    General Schwartz. Not at all. In fact, there are several 
layers of storage.
    Type 1,000 storage, for example, is something that you 
could bring back quite readily. There are other levels of 
storage where you get to take spare parts off these machines 
and they become less and less--the potential of recovering 
them, obviously, declines over time. So it depends what the 
status of the specific kind of storage is.
    Mr. Rogers. How many planes do we have in storage?
    General Schwartz. Sir, I would have to take that for the 
record, but it is thousands.
    [The information follows:]

    Currently, the United States Air Force has 2,205 aircraft in 
Aerospace Maintenance and Regeneration Group storage.

    Mr. Rogers. I know the chairman may not be interested in 
this very much, but could some of those planes be reused in the 
modern day need for new aircraft?
    Mr. Donley. Sir, my assessment is that that would be very 
difficult to do and very expensive.
    As the Chief outlined, I think there are options for 
putting aircraft into retirement, where one can put them into 
storage where for some period of time they can be maintained at 
a level to be brought back on fairly short notice. That is an 
expensive proposition. I don't recall off the top of my head--
we will get you an answer for the record--whether we have 
actually done that. It has been discussed, but I am not sure we 
have actually exercised that option.
    [The information follows:]

    From Fiscal Year 2006 through Fiscal Year 2009, 109 Air Force 
aircraft have been regenerated at the Aerospace Maintenance and 
Regeneration Group to support the United States Air Force, the 
Department of Defense, and foreign military sales.

    Mr. Donley. The more common use, as the Chief described it, 
is to cannibalize these airplanes over time for various spare 
parts, not just for the United States Air Force but also for 
our international partners who, through foreign military sales 
(FMS) and other programs, are operating generations of aircraft 
maybe one or two behind the United States and where there are 
no current production aircraft available to provide a spare 
parts pipeline. So this is the more common use of these 
aircraft.
    Mr. Rogers. What would be the oldest aircraft in that 
fleet?
    General Schwartz. Probably one of the ones that the Women's 
Air Force Service Pilots (WASPs) flew years ago. Sir, I don't 
know, but I will find out for you.
    [The information follows:]

    The oldest Air Force aircraft in storage by arrival date is a WB-
57F (modified Canberra B-57), serial number 63-13295, which arrived in 
July 1972.

    Mr. Donley. They go back to the 1950s, for sure. Old B-52s, 
for example.
    Mr. Dicks. I will just say to the gentleman from Kentucky, 
if we can use these airplanes or if our allies can use them, I 
am for using them. If there is a way to do it, that makes 
sense. Spare parts are very important.
    Mr. Hinchey.

                  COMBAT SEARCH AND RESCUE HELICOPTER

    Mr. Hinchey. Thank you, Mr. Chairman. Just a couple of 
quick things.
    The Air Force I understand is considering a multibillion 
dollar sole source procurement to replace the aging HH-60G Pave 
Hawk search and rescue helicopter. How is that going to happen? 
Is the Air Force conferring a sole source procurement to 
recapitalize? No?
    General Schwartz. No, sir. I think I can speak with 
authority and say that it will be a competitive process. But I 
would envision that will not be a development program, at least 
not a major development program. It will capitalize on 
something that is currently available and is modified to the 
combat search and rescue mission set.

                        UNMANNED AERIAL VEHICLES

    Mr. Hinchey. Okay. Thank you very much.
    The unmanned aircraft system is something that has gotten 
an awful lot of attention and something that, frankly, is very 
interesting. They are serving in an expanded set of operations 
in both Iraq and Afghanistan, And I understand that some of 
them are located in Korea as well. I don't know if that is a 
fact, but I understand that may be the case. I wondered if you 
would share your vision of the future for the unmanned aerial 
system, especially in the counterinsurgency operations but also 
in the regular combat operations as well.
    General Schwartz. Sir, we believe that remotely piloted 
aircraft (RPA) are a capability that will remain. It is an 
enduring feature of our Air Force, both for surveillance 
requirements as well as strike requirements in the right kind 
of environment. So we see the inventory of these assets 
growing.
    We currently have in the neighborhood of 200 remotely 
piloted aircraft at different classes in the Air Force that 
will probably double over time. And we will have those both for 
the irregular warfare mission set that you are familiar with, 
but it will also be useful in other applications which we 
haven't completely thought through, for example, suppression of 
enemy air defenses.
    Other capable air forces in the world use these platforms 
in perhaps different ways than we have currently thought about 
and we need, again, as part of this growth process, to make 
sure that we have considered all of the possible applications. 
RPAs are not anytime, anyplace aircraft. There are certain 
environments where they simply will not survive. But that is 
only a part of the potential operating environment.
    Mr. Dicks. If the gentleman will yield, it is not just the 
Air Force. This is the Navy, the Army, Special Forces. 
Everybody is looking at these and in whole different sizes, 
shapes and capabilities, is that correct?
    Mr. Donley. Yes, sir. And many other nations as well.
    Mr. Dicks. Mr. Hinchey.
    Mr. Hinchey. Is there a shortage? Is there enough? Do you 
have enough coming in?
    General Schwartz. We are maxing production, sir. There are 
48 reapers in this budget, both in the base and in the overseas 
contingency operations account; and that is all that General 
Atomics can produce.
    Mr. Hinchey. Just one more question.
    Mr. Dicks. Will the gentleman yield on this same point?
    We are working on trying to secure the Predators because 
there was some issue with their vulnerability; isn't that 
correct?
    General Schwartz. Sir, there is no vulnerability with 
respect to the air-to-air links or the space-borne links; they 
are all secure, both in terms of command and control as well as 
the take off sensors.
    The issue you address has to do with what is provided in an 
air-to-ground sense directly to our troops, Airmen, Marines, 
and what have you on the ground. We are in the process of 
securing those links.
    But this, Mr. Chairman, is one of those cases where you 
have to balance risk. I would argue that it is better for our 
kids to know what is around the corner and worry less about 
whether somebody else is watching that, too. But we will be--in 
the next two years, we will move dramatically on securing the 
air-to-ground portion of those links as well.
    Mr. Dicks. Okay.

                          PROMPT GLOBAL STRIKE

    Mr. Hinchey. If I may just ask one last question. The issue 
of prompt global strike is something that is getting more 
attention. And I can understand it because of the way things 
are developing around this planet, and it makes life a little 
more tense and tenuous. I wonder if you could talk to us just 
for a couple of minutes maybe about what the situation is, how 
it is evolving, what progress is being made in reviewing the 
prompt global strike, what the situation is generally.
    General Schwartz. Sir, let me just start, and I am sure the 
Secretary will have something to add.
    When the Secretary mentioned the family of systems earlier 
with respect to long-range strike, prompt global strike is a 
part of that family. This is fundamentally what, at least for 
us, would be a conventional ICBM, something that would have a 
conventional warhead that we could launch and be on target in a 
matter of minutes, as opposed to hours or even longer.
    In addition, there are certain developmental kinds of 
capabilities that fall into this category like hypersonic glide 
vehicles. This is something that is new, and it is 
developmental, and, in fact, there will be a test in the coming 
months on the first launch of an experimental hypersonic glide 
vehicle.
    So this is about getting to targets very promptly with high 
kinetic effect, nonnuclear. There is a place, I think, for that 
kind of capability. I don't think that that is the sort of 
thing you would use broadly because fundamentally, what you 
don't want to have is a 300--let us just say a $300 million 
weapon applied against a $30,000 target. I mean, there is 
balance in this. But there is a place for prompt global strike, 
and we in the Air Force will be pursuing this on behalf of DOD.
    Mr. Donley. I think that the Chief has hit it right on. 
This is part of this discussion in the Department about the 
family of systems that we are looking for. The mix of standoff 
and penetration, the mix of prompt and persistent, the mix of 
manned and unmanned, and the mix of platforms, weapons, ISR 
capabilities, and electronic warfare capability, all of those 
things together make up a long-range strike family, a 
portfolio, if you will.
    So we are taking a closer look at how and where we invest 
in that portfolio and the sequence. What should we work on 
first? Where are the threats or opportunities most pregnant 
that we need to address? What will or should take a little bit 
longer to decide? And so these are the issues the Secretary has 
put in motion.
    I will say, from a programmatic point of view, the prompt 
global strike work had been a little bit federated over the 
last couple of years. There have been a couple of different R&D 
lines and different projects under that umbrella, and Dr. 
Carter has asked the Air Force to help pull that together and 
manage it as a whole going forward. So we are in the process of 
assuming that responsibility. It started a little bit earlier 
this winter. So that will give the Air Force a little bit 
better visibility into the prompt global strike area.
    General Schwartz. And I would just add, sir, that this is 
not just about the Air Force. There are other capabilities. 
Conventional Trident, for example, is something that is a 
possibility. So this is not just Air Force business.
    Mr. Dicks. On that point, isn't one of the problems is how 
you would distinguish between a conventional weapon and a 
weapon that has nuclear warheads? That is one problem with this 
concept, right?
    General Schwartz. Stability is an issue, and there are ways 
to address that, either by your basing mode or where these 
would be based, what kind of awareness others might have, and 
whether it is aboveground or in ground, and so on and so forth. 
There are a lot of different ways to address the ambiguity 
issues associated with prompt global strike, and this is not 
yet completely thought through.
    Mr. Dicks. One thing with the B-2, we moved away from using 
it to deliver nuclear weapons and put it on smart conventional 
weapons; and I like what you said. In that respect, you have a 
very inexpensive weapon going after a target; and sometimes, as 
you well know, on one mission you can take out 26 targets. And 
if we get to the smaller weapons, even more. So that is a 
tremendous conventional capability that you have with a 
penetrating bomber and--but I do like what you said also on the 
UAVs and using them for suppression of enemy radar. That is not 
something I had heard about before. It sounds very interesting.

                       I-22 AIRCRAFT RELIABILITY

    I had one question on the reliability issue on the F-22. 
Thus far this year, the F-22 mission capable rate is only 62 
percent. This is significantly below expectation. What is 
driving those low rates and what is the Air Force doing to 
improve the rates?
    General Schwartz. Sir, a couple of things. This is both 
process. It is material. It is training. So there are a number 
of paths related to, in particular, low observable maintenance. 
There is efforts under way in this response to Congresswoman 
Granger's question earlier about developing materials that are 
more durable for the F-22, certainly for the F-35. That is one 
aspect.
    Mr. Dicks. We had the same issue with the B-2.
    General Schwartz. Exactly, sir. You understand that.
    Mr. Dicks. And then we improved as we went along.
    General Schwartz. Improve it as you go along, and clearly 
we need to continue to do that. Some of this is process, and it 
has to do with the facility, to have the right kind of 
facilities where--to use the slang--where you can bake the 
airplane and accelerate the repair process. So facilities, 
materiel, training for our youngsters so that they get 
proficient in identifying their skill so that they stay in the 
low observable maintenance discipline and not go out as one 
young man did that I know. He was an award winner at Elmendorf 
Air Force Base, sir, and ended up going to F-16 at Hill Air 
Force Base. Probably not the best use of this very fine Airman.
    So we have personnel processes that need to attend to as 
well.
    Mr. Dicks. Any other questions?
    The committee is adjourned until 1:30 tomorrow, Thursday, 
March 11th. At that time, we will reconvene for a hearing on 
Navy posture.
    Thank you very much. It was a good hearing, and we 
appreciate your availability.


                           W I T N E S S E S

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                                                                   Page
Donley, M.B......................................................   231
Francis, Paul....................................................     1
Golden, Michael..................................................     1
Ham, General Carter..............................................   119
Philman, Rear Admiral D.L........................................    69
Schwartz, General N.A............................................   231
Scott, Major General D.J.........................................    69
Thomas, Brigadier General R.W....................................   119
Woods, Bill......................................................     1
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