[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]






                                     

                         [H.A.S.C. No. 112-16]

 
                     NAVY SHIPBUILDING ACQUISITION
                          PROGRAMS AND BUDGET
                       REQUIREMENTS OF THE NAVY'S
                     SHIPBUILDING AND CONSTRUCTION
                                  PLAN

                               __________

                                HEARING

                               BEFORE THE

             SUBCOMMITTEE ON SEAPOWER AND PROJECTION FORCES

                                 OF THE

                      COMMITTEE ON ARMED SERVICES

                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                              HEARING HELD

                             MARCH 9, 2011

                                     
[GRAPHIC] [TIFF OMITTED] TONGRESS.#13

                                     

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             SUBCOMMITTEE ON SEAPOWER AND PROJECTION FORCES

                    W. TODD AKIN, Missouri, Chairman
DUNCAN HUNTER, California            MIKE McINTYRE, North Carolina
MIKE COFFMAN, Colorado               SUSAN A. DAVIS, California
SCOTT RIGELL, Virginia               JAMES R. LANGEVIN, Rhode Island
TIM GRIFFIN, Arkansas                RICK LARSEN, Washington
STEVEN PALAZZO, Mississippi          JOE COURTNEY, Connecticut
TODD YOUNG, Indiana                  CHELLIE PINGREE, Maine
ROSCOE G. BARTLETT, Maryland         MARK S. CRITZ, Pennsylvania
J. RANDY FORBES, Virginia            HANK JOHNSON, Georgia
ROB WITTMAN, Virginia                BETTY SUTTON, Ohio
TODD RUSSELL PLATTS, Pennsylvania
                 Heath Bope, Professional Staff Member
              Phil MacNaughton, Professional Staff Member
                 Mary Kate Cunningham, Staff Assistant


                            C O N T E N T S

                              ----------                              

                     CHRONOLOGICAL LIST OF HEARINGS
                                  2011

                                                                   Page

Hearing:

Wednesday, March 9, 2011, Navy Shipbuilding Acquisition Programs 
  and Budget Requirements of the Navy's Shipbuilding and 
  Construction Plan..............................................     1

Appendix:

Wednesday, March 9, 2011.........................................    47
                              ----------                              

                        WEDNESDAY, MARCH 9, 2011
 NAVY SHIPBUILDING ACQUISITION PROGRAMS AND BUDGET REQUIREMENTS OF THE 
               NAVY'S SHIPBUILDING AND CONSTRUCTION PLAN
              STATEMENTS PRESENTED BY MEMBERS OF CONGRESS

Coffman, Hon. Mike, a Representative from Colorado, Subcommittee 
  on Seapower and Projection Forces..............................     1
McIntyre, Hon. Mike, a Representative from North Carolina, 
  Ranking Member, Subcommittee on Seapower and Projection Forces.     2

                               WITNESSES

Labs, Eric, Senior Analyst for Naval Forces and Weapons, 
  Congressional Budget Office....................................     5
O'Rourke, Ronald, Specialist in National Defense, Congressional 
  Research Service...............................................     3
Stackley, Hon. Sean, Assistant Secretary of the Navy for 
  Research, Development & Acquisition; VADM Terry Blake, USN, 
  Deputy Chief of Naval Operations for Integration of 
  Capabilities and Resources; and Lt. Gen. George Flynn, USMC, 
  Commanding General, Marine Corps Combat Development Command....    20

                                APPENDIX

Prepared Statements:

    Akin, Hon. W. Todd, Chairman, Subcommittee on Seapower and 
      Projection Forces..........................................    51
    Labs, Eric...................................................    89
    McIntyre, Hon. Mike..........................................    53
    O'Rourke, Ronald.............................................    55
    Stackley, Hon. Sean, joint with VADM Terry Blake and Lt. Gen. 
      George Flynn...............................................   120

Documents Submitted for the Record:

    [There were no Documents submitted.]

Witness Responses to Questions Asked During the Hearing:

    [There were no Questions submitted during the hearing.]

Questions Submitted by Members Post Hearing:

    Mr. Coffman..................................................   144
    Mr. Smith....................................................   145
    Mr. Wittman..................................................   139
 NAVY SHIPBUILDING ACQUISITION PROGRAMS AND BUDGET REQUIREMENTS OF THE 
               NAVY'S SHIPBUILDING AND CONSTRUCTION PLAN

                              ----------                              

                  House of Representatives,
                       Committee on Armed Services,
            Subcommittee on Seapower and Projection Forces,
                          Washington, DC, Wednesday, March 9, 2011.
    The subcommittee met, pursuant to call, at 3:10 p.m., in 
room 2212, Rayburn House Office Building, Hon. W. Todd Akin 
(chairman of the subcommittee) presiding.

 OPENING STATEMENT OF HON. MIKE COFFMAN, A REPRESENTATIVE FROM 
  COLORADO, SUBCOMMITTEE ON SEAPOWER AND EXPEDITIONARY FORCES

    Mr. Coffman. The hearing of the Seapower and Projection 
Forces Subcommittee is called to order. Representative Akin is 
tied up in a Budget Committee hearing process, so I want to 
enter his remarks into the record. Let me quickly go over them.
    Good afternoon, ladies and gentlemen. This hearing will 
come to order. Thank you for joining us today as we consider 
the fiscal year 2012 budget request for the Department of the 
Navy's shipbuilding acquisition program.
    We have two panels of witnesses testifying today. The first 
panel are national defense experts specializing in naval issues 
from the Congressional Research Service and the Congressional 
Budget Office. They are Mr. Ron O'Rourke and David Eric Labs, 
respectively. Our second panel will be officials from the Navy 
and Marine Corps, which I will welcome later.
    Reviewing the Navy's shipbuilding budget request for both 
this year and what is projected in the out-years, there are 
many things to be concerned about, and probably the most 
worrisome aspects of the Navy's budget is that it will require 
near-perfect execution in cost control, schedule adherence and 
risk-mitigation efforts to obtain the force structure necessary 
to deter hostile threats, show force when needed, and, as a 
last resort, employ lethal operations.
    Among the concerns I have revolve around issues as such: 
The new Ford-class carrier program, EMALS [Electromagnetic 
Aircraft Launch System] integration and forthcoming cost growth 
to the overall program; Ohio-class submarine replacement 
regarding its aggressive schedule and optimistic cost estimates 
so early in its program's development; our attack submarine 
inventory being nine submarines short of the requirement in the 
out-years; a shipbuilding budget estimated by CBO 
[Congressional Budget Office] that may not permit the Navy to 
achieve the 313-ship floor; and a shipbuilding industrial base 
in which 50 percent of major U.S. shipyards' future viability 
and ability to perform as needed to meet the Navy's acquisition 
plan remains in question.
    My last concern focuses on congressional and Department of 
Defense collaboration, or should I say the apparent lack 
thereof. Too many times in the recent past we have been 
excluded from Department of Defense deliberations or approached 
with hasty requests that do not afford us the luxury of 
effectively evaluating decisions, most recently, LCS [Littoral 
Combat Ship] and EFV [Expeditionary Fighting Vehicle]. Bottom 
line, this must change.
    Lastly, we are part of this problem, too. The Congress must 
finish fiscal year 2011 defense appropriations legislation 
because the implications of funding the Navy and Marine Corps 
at fiscal year 2010 funding levels in a year-long continuing 
resolution would be almost irreparable.
    All of our men and women in uniform deserve more from this 
body. It goes without saying we have the finest, most 
professional combat-honed sailors, marines, airmen and soldiers 
that any modern military has ever had within its ranks, and our 
responsibility as a subcommittee is to ensure that we provide 
them the equipment and tools necessary in meeting our Nation's 
national security requirements.
    In conclusion, I would like to note that although our 
subcommittee has had a number of closed events already, this is 
our first public hearing of the year. It is an honor to chair 
this subcommittee and to follow in the footsteps of a number of 
previous chairmen who did much to make sure that our Nation 
maintains strong sea services.
    [The prepared statement of Mr. Akin can be found in the 
Appendix on page ?.]
    Mr. Coffman. With that, I turn to my good friend and 
partner, the ranking member from North Carolina, Mike McIntyre, 
for any remarks he wishes to make.

 STATEMENT OF HON. MIKE McINTYRE, A REPRESENTATIVE FROM NORTH 
    CAROLINA, RANKING MEMBER, SUBCOMMITTEE ON SEAPOWER AND 
                      EXPEDITIONARY FORCES

    Mr. McIntyre. Thank you very much, and also thanks to our 
chairman in his absence, and thank you all for the opportunity 
to let us question you today.
    Thank you, Mr. O'Rourke from Congressional Research Service 
and Dr. Labs from the CBO for being here. We all look forward 
to your expert opinions about where the Navy is heading with 
regard to shipbuilding and acquisition strategy. I also welcome 
our Navy and Marine Corps friends who will be appearing as part 
of the second panel.
    As we begin to analyze the detail of the Navy's fiscal year 
2011 shipbuilding and acquisition plans, it is important that 
we look not only at what it proposes for this coming year, but 
also what it presents for the following out-years. Many of the 
proposed efficiencies that were recently announced depend 
heavily on our future acquisition strategy, whether that be 
multiyear procurement on ships or the development of a new 
amphibious vehicle. I am hopeful the Navy will be able to 
adhere to their proposals so that savings in those difficult 
choices may be realized.
    Like our chairman, these are areas that I remain concerned 
about. The stated goal of the Navy is a sustained fleet of 313 
ships. There has been some debate on how much it will cost per 
year to achieve this goal and to maintain it. So I am 
particularly concerned about whether the current plan is 
sustainable, especially as new programs such as the SSBN(X) 
[Next-Generation Ballistic Missile Submarine] begin to come on 
line and demand a larger portion of the shipbuilding budget.
    The fact that our submarine force, both attack and guided 
missile submarines, continues to decline is a concern, because 
their demand, as we know, is constantly increasing. I look 
forward to hearing what both panels have to say in regard to 
our future gaps in submarine requirements.
    We know our shipbuilding industrial base remains very 
fragile. We have seen how even minor changes in shipbuilding 
plans can have major impacts on the industrial base. It is 
critical that the shipbuilding workforce move to a more stable 
situation in order to provide what our great Navy needs.
    We are very aware of the stresses that the current 
continuing resolution has put on the Navy, and we have heard 
that in testimony before the larger full committee as well. I 
am hopeful that we will be able to achieve in the 2011 fiscal 
year appropriations bill--that we will be able to do what we 
need to do, but in the meantime, I appreciate any 
recommendations that you may have that would mitigate the risk 
in the interim.
    Thank you for your service. We look forward to hearing your 
testimony.
    Thank you, Mr. Chairman.
    Mr. Coffman. Thank you.
    Now we will hear from our witnesses in the first panel: Mr. 
Ronald O'Rourke, Specialist in National Defense, Congressional 
Research Service. Mr. O'Rourke.

 STATEMENT OF RONALD O'ROURKE, SPECIALIST IN NATIONAL DEFENSE, 
                 CONGRESSIONAL RESEARCH SERVICE

    Mr. O'Rourke. Mr. Chairman, Ranking Member McIntyre, 
distinguished members of the subcommittee, thank you for the 
opportunity to appear before you today to discuss Navy 
shipbuilding programs.
    Mr. Chairman, with your permission I would like to submit 
my written statement for the record and make a couple of brief 
points.
    First, it should be noted that the Navy has revised some of 
its ship force structure goals over the last 5 years, and these 
goals no longer add up to a fleet of 313 ships. In this sense, 
the 313 figure is no longer a fully accurate summation of Navy 
ship goals.
    The Navy expects to soon complete a new force-structure 
assessment which could support an official replacement for the 
313-ship plan. A replacement plan would support effective 
congressional oversight of the Navy shipbuilding by giving 
Members an official and fully accurate set of force-level goals 
against which to assess proposed Navy programs.
    My testimony outlines a number of potential shipbuilding 
execution challenges including those that would arise under the 
scenario of a year-long CR [Continuing Resolution], the 
possibility of cost growth on ship designs that are planned to 
start procurement in future years, the question of the 
disposition of Northrop's shipyards, and execution challenges 
that are specific to individual shipbuilding programs.
    But right now the one point I would like to focus on are 
the shortfalls in attack submarines and in cruisers and 
destroyers that are projected to occur in the 2020s and beyond 
even if the Navy's 30-year shipbuilding plan is fully 
implemented. These projected shortfalls are significant. If 
they occur, they could made it difficult or impossible for the 
Navy to fully perform its projected missions.
    The additional destroyer that the Navy has added in fiscal 
year 2014 will mitigate the cruiser-destroyer shortfall at the 
margin, but it would take a lot more than one extra destroyer 
to substantially redress this shortfall. Similarly, the Navy 
hopes to restore the second Virginia-class boat in fiscal year 
2018, but it would take more than one additional boat to 
substantially mitigate the attack boat shortfall.
    These projected shortfalls have been on the books since 
last year, but they haven't received much attention in public 
discussions of the Navy's shipbuilding plan. This might be 
because they look like they are far in the future, but in terms 
of issues they might pose for policymakers, that is not 
necessarily the case.
    Substantially redressing these shortfalls could involve 
putting additional destroyers and attack boats into the 
shipbuilding plan or extending the service lives of existing 
cruisers, destroyers and attack boats. These options, which 
could be combined, pose near-term policy issues for 
policymakers.
    Based on past information from the Navy, substantially 
mitigating the attack boat shortfall for wartime as well as 
peacetime operations would require adding four boats to the 
plan, and that assumes that pressures on the shipbuilding 
budget caused by the Ohio replacement program don't cause any 
currently planned Virginia-class boats to drop out of the 
shipbuilding plan, which is a real possibility.
    Substantially mitigating the even bigger cruiser-destroyer 
shortfall might require adding at least 10, and possibly closer 
to 20, additional destroyers to the plan, and that assumes no 
increase to the current force-level goal for cruisers and 
destroyers to reflect the Navy's newly expanded missile defense 
responsibilities.
    Because of the pressures that the Ohio replacement program 
could place on the shipbuilding budget, one option would be to 
add at least some, if not most or all, of these additional 
destroyers and attack boats to the shipbuilding plan in the 
years prior to the Ohio replacement boats. If so, then the 
question of whether to add these ships to the plan could become 
a near-term issue for policymakers.
    The alternative of extending the lives of existing 
cruisers, destroyers and attack boats by 10 or 15 years beyond 
their currently planned lives poses serious questions of 
feasibility and cost-effectiveness, especially for the attack 
boats. If this option were feasible, implementing it could 
require increasing, perhaps starting right away, funding levels 
for the maintenance of these ships to help ensure they will 
remain in good enough shape to eventually have their lives 
extended for another 10 or 15 years.
    This additional maintenance funding would be on top of the 
funding that the Navy has already programmed to help get these 
ships out to the end of their currently planned lives. Because 
this additional funding might need to start soon, it could 
again pose a near-term issue for policymakers.
    Implementing either of these options within the Navy's 
currently planned top line would likely compel the Navy to 
reduce other critical programs below desired levels. So the 
question of what to do about these two projected shortfalls is 
not only a potentially near-term issue for policymakers, but 
one that could also raise fundamental questions for 
policymakers about the value of naval forces in defending the 
Nation's interests and the priority that naval forces should 
receive in the allocation of overall DOD [Department of 
Defense] funds.
    Mr. Chairman, this concludes my testimony. Thank you again 
for the opportunity to testify. I will be pleased to respond to 
any questions you might have.
    [The prepared statement of Mr. O'Rourke can be found in the 
Appendix on page ?.]
    Mr. Coffman. Thank you for your testimony, Mr. O'Rourke.
    Mr. Eric Labs, Senior Analyst for Naval Forces and Weapons, 
Congressional Budget Office.
    Mr. Labs.

  STATEMENT OF ERIC LABS, SENIOR ANALYST FOR NAVAL FORCES AND 
              WEAPONS, CONGRESSIONAL BUDGET OFFICE

    Mr. Labs. Mr. Chairman, Representative McIntyre, members of 
the subcommittee, it is a pleasure to be here today to discuss 
the Navy's 2012 shipbuilding plan.
    My written testimony, which I submit for the record, 
focuses on the costs and force structure implications of the 
Navy's fiscal year 2011 30-year shipbuilding plan. CBO cannot 
yet provide a detailed analysis of the Navy's fiscal year 2012 
10-year shipbuilding plan, as it was just released early last 
week. However, because the observed changes between the two 
plans are minor, I can still speak to the long-term 
affordability of the Navy's shipbuilding program and some 
specifics about the 2012 plan.
    If the Navy receives the same amount of funding for ship 
construction in the next 30 years that it has over the last 30 
years, which is about $15 billion a year for all activities 
related to ship construction, which means new builds, carrier 
refuelings, and outfitting and postdelivery, it will not be 
able to afford all of the 276 ships that are advertised in the 
2011 shipbuilding plan.
    CBO's analysis of the 2011 plan shows that the Navy would 
need $19 billion a year in new ship construction alone and $21 
billion a year for all necessary activities in the Navy's 
shipbuilding accounts. Under its 2012 plan, the Navy plans to 
buy 106 ships over the next 10 years, compared to 104 ships 
under the same period under the 2011 plan.
    The breakdown between combat ships and support ships is 
essentially the same in the two plans. Both would buy 30 
support ships between 2012 and 2021, although the composition 
of those ships varies slightly. The 2012 plan would buy 76 
combat ships versus 74 under the 2011 plan.
    Over the next 5 years, the Navy plans to spend 9 percent 
more in real terms on new ship construction compared to the 
last 5 years. The Navy's estimates over the next 5 years, 
however, do place them in line with the longer historical 
average of about $15 billion a year in 2011 constant dollars.
    CBO's preliminary analysis of the Navy's 2012 10-year 
shipbuilding plan does not substantially change the assessment 
that the Navy continues to have a long-term funding challenge, 
particularly in the 2020s when the new class of ballistic 
missile submarines are built.
    Still, there are several reasons to believe that while the 
overall costs of the Navy's shipbuilding plan are likely to be 
somewhat lower over the 30-year period, they will be 
substantially higher than the historical average.
    The reasons why the costs might be somewhat lower include 
the following: SSBN(X) cost-reduction efforts. The Navy has 
announced that through various refinements to the preliminary 
design of the SSBN(X), it has reduced estimated costs of those 
ships by an average about $1 billion per boat. CBO has not yet 
conducted its own analysis of those changes and their potential 
impact on costs, but it is reasonable to conclude that CBO's 
estimate for those ships could go down as well.
    Second, the LCS competition and subsequent dual-award 
contracts. The reduction in the average price of the LCS from 
about $550 million in CBO's estimate of the Navy's 2011 plan 
per ship to $450 million per ship under the Navy's dual-award 
strategy for the ship's purchase from 2010 to 2016, if carried 
forward beyond 2016, would reduce the overall cost of the 
Navy's shipbuilding plan slightly over the next 30 years.
    Third, projections of long-term ship inflation declined, 
making ships in the far term less expensive than they had been 
projected last year. As CBO reports have detailed for several 
years, shipbuilding inflation has been substantially higher 
than price inflation in the economy as a whole for quite some 
time. However, projections of long-term Navy shipbuilding 
inflation declined between the 2011 plan and the 2012 plan such 
that if all other things remained equal, average annual 
shipbuilding costs would be less by about $1 billion over the 
long term. Nevertheless, even accounting for that change, that 
would still place the Navy's funding requirements well above 
the historical average.
    Overall, one can expect the Navy's total requirements for 
shipbuilding, new construction, carrier refueling and 
outfitting costs are still likely to be in the range of $19 to 
$20 billion a year.
    Finally, Mr. Chairman, I would like to make a quick 
observation about the overall number of ships in the Navy's 
fleet. Echoing what Mr. O'Rourke said, under the 2012 plan, the 
Navy's implied ship requirement of about 322 ships would be met 
by 2020, but then fall back below that force level by the late 
2020s. Significant shortfalls in the late 2020s and beyond in 
the number of surface combatants, attack submarines and 
amphibious ships would remain under the Navy's 2012 
shipbuilding plan.
    Thank you, Mr. Chairman. I would be happy to respond to any 
questions the subcommittee may have.
    [The prepared statement of Mr. Labs can be found in the 
Appendix on page ?.]
    Mr. Coffman. Thank you. Let me begin.
    First of all, I think, Mr. O'Rourke, you mentioned the 
service life extension program for some of these--I think you 
were referring to cruisers and destroyers, a shortfall in 
cruisers and destroyers--and you said that would have to go on 
top of what is currently planned to be expended.
    Can you give an idea, just any kind of rough estimate, on 
the cost burden of doing a SLEP [Service Life Extension 
Program] program?
    Mr. O'Rourke. Yes, Mr. Chairman. You are correct. I was 
referring to the fact that you would have to put additional 
maintenance funding on top of what the Navy has already put 
into their budget to help ensure that those ships at least make 
it out to the end of their currently planned lives. How much 
more they would have to add, I don't know. It would depend in 
part on the condition of the ships themselves over time and 
also exactly how many extra years they wanted to add to the 
lives of those ships.
    What the Navy would need to do is come up with a new 
integrated maintenance strategy that was designed in 
anticipation of keeping a ship in service, a destroyer or an 
older cruiser, for 40 or 45 years as opposed to some shorter 
figure. And I don't know what the delta would be in terms of 
the maintenance funding, but it would very possibly require the 
addition of that funding on top of what the Navy has in its 
budget already.
    Mr. Coffman. Mr. Labs, do you have any comment on using the 
Service Life Extension Program in lieu of or extending out the 
time in which we would have to build new ships, replacement for 
replacement?
    Mr. Labs. Well, I would agree with Mr. O'Rourke in that we 
don't know exactly how much that would cost, and that would 
indeed vary from ship to ship. Certain ships will be in better 
material condition than other ships, and the level of 
investment that would be required is going to vary, and not 
only just on the maintenance side, but whether more updates to 
the combat systems would be necessary to make sure that not 
only the ships can serve out 40 or 45 years, but they are going 
to be effective in a wartime environment out 40 or 45 years.
    In terms of being able to meet the Navy's shipbuilding 
goals, certainly maintaining existing ships in service longer 
would be less expensive than buying new ships to replace them, 
but then it becomes a question of what is the relative 
effectiveness that you are buying for the amount of money that 
you are spending, and that is something that the Navy would 
have to assess.
    Mr. O'Rourke. And it is also a less permanent solution. It 
is essentially a way of kicking the can down the road another 
10 or 15 years, but those ships, if they had their lives 
extended, would still eventually retire, and the problem with 
the cruiser-destroyer shortfall could recur at that point.
    Mr. Coffman. Just a question about the LCS and how that--
the fact that we had sort of the two-track policy, that we had 
competition between two variants of the LCS. But in doing so, 
are we having two separate training programs to do that? And 
from a career standpoint, in terms of training and the fact 
that you can't necessarily cross-deck those personnel, although 
maybe with additional training you can, to what extent is that 
a problem, and is that configured in terms of the cost savings?
    Mr. O'Rourke. Yes. The Navy acknowledged in their testimony 
last year in support of the dual-award plan that sticking with 
the production of both designs would create this situation. The 
Navy argued that they have had classes in the past of 12 ships, 
and that at a minimum they would have at least 12 ships of each 
design. They tended to argue that the costs that would be added 
on to the Navy's budget for maintaining two logistics systems 
and so on would be there, but that when calculated in net 
present-value terms, that the figure would come to about 295 
million additional dollars over the life cycle of the ships.
    Mr. Coffman. Any comment on that?
    Mr. Labs. No. I would have echoed the same statements from 
the same facts from the Navy's testimony of last year. Let me 
just sort of address the issue of cross-decking sort of the 
personnel, if you will.
    Yes, it makes that slightly more complicated to cross-deck 
personnel from one type of LCS versus the other, but in my 
judgment it wouldn't be that much different than a Flight I 
destroyer versus a Flight IIA destroyer on an Arleigh Burke 
class, or even when we used to have Spruances in the fleet, a 
Spruance versus an Arleigh Burke. There are challenges there, 
but they are challenges the Navy is well familiar with.
    Mr. Coffman. Mr. McIntyre.
    Mr. McIntyre. Thank you.
    Just some clarification. Mr. O'Rourke, you mentioned the 
idea of adding destroyers and attack submarines to the 
shipbuilding program to reduce the projected shortfalls in 
these two categories of ships. How would those additional ships 
be funded, given the constraints on future defense spending 
that we are likely to be looking at?
    Mr. O'Rourke. That is the broader issue that I mentioned 
that I think would need to be confronted if you were to embark 
upon that kind of plan. I think the reason why those ships 
don't show in the 30-year plan right now is exactly because the 
Navy is trying to show they are balancing their requirements 
while fitting under a top line. So if you were to undertake a 
project like this, it would, I think, very likely lead to a 
broader debate about the value of naval forces in defending the 
Nation's interests and what share of the DOD budget should go 
to the Navy.
    That is an argument that some observers have begun to 
articulate in recent weeks and months, and it is something that 
might be expanded on and pursued further as a part of or one 
way of getting at this situation of what to do about these 
shortfalls.
    But my focus has been to at least highlight the existence 
of these shortfalls, which have gone relatively unmentioned 
even though they were present in the 30-year plan that was 
submitted last year, and to highlight the fact that even though 
they look like they are several years in the future, the 
options for addressing them include things that may require us 
to begin making decisions in the nearer term.
    Mr. McIntyre. Okay. Dr. Labs, in your written testimony, 
you state that CBO's estimate for required funding to reach the 
313-ship minimum, the Navy will require approximately $3 
billion more than what the Navy currently plans for. What is 
the basis of your estimate, and, in your opinion, if the Navy 
remains at its currently planned levels of funding, how many 
ships do you believe the Navy will be short of its 313-ship 
planned procurement?
    Mr. Labs. Mr. McIntyre, CBO goes about estimating the cost 
of the Navy's shipbuilding plan through a variety of factors. 
We start off with sort of historical cost-to-weight 
relationships to estimate each individual ship in the program, 
and then we adjust that for the effects of learning. As you 
build more ships, you learn how to build them more efficiently 
and less expensively, hopefully. Also we adjust those estimates 
by rate, how many ships are being built of the same type in the 
same yard at the same time. The more you build, you can spread 
overhead costs, and that would come down.
    Then we also apply the effects of this as a growth factor 
on the higher long-run shipbuilding inflation over the economy 
as a whole. To my mind, that represents a real sort of cost to 
the taxpayer that needs to be accounted for in the way you 
project the long-term costs of a shipbuilding plan. And you are 
right, our estimate as of right now is $3 billion more than 
what the Navy is estimating.
    So what force results from that, if the Navy is stuck with 
the historical average of $15 billion, in other words they must 
cut substantial numbers of ships out of their program, would 
depend very much on the composition of those cuts. If they 
choose to cut very expensive ships, you could end up having a 
force not of 313 or 322, but maybe somewhere around the force 
we have today of 280. If you cut more of a mix of less 
expensive ships, it could range anywhere from 200 to 250 ships 
in the fleet. It would depend very much on what whoever would 
be the deciding authority, whether it would be the Congress or 
the Navy, what they decide to remove from the shipbuilding plan 
in order to bring that overall budgetary level over the next 30 
years into sort of an historical average line.
    Mr. McIntyre. Thank you.
    Thank you, Mr. Chairman.
    Mr. Coffman. Mr. Rigell.
    Mr. Rigell. Thank you, Mr. Chairman.
    Thank you, Mr. O'Rourke, and also Dr. Labs, for being here 
today and for your contribution to keeping our Navy strong.
    Let us see, the first question, Dr. Labs, I would like to 
direct to you. Are there any maintenance or docking space 
requirements that are unique to the aluminum-hull LCS, and, if 
so, what are the cost and basing decisions, impacts rather, to 
the Navy?
    Mr. Labs. The aluminum-hulled ship is certainly one that 
is--there are fewer maintenance yards, as I understand it from 
briefings from the Navy, there are fewer yards on either coast 
of the United States or even around the world that are capable 
of performing maintenance on those types of ships. So it is not 
that there aren't yards available, but there is going to be a 
lot less of them. So there is going to be more challenges 
involved on the part of the Navy that if a sudden breakdown 
occurs, to have a system in place where the ship receives the 
necessary maintenance that it would otherwise need to have. I 
don't have an assessment of what the costs that would be 
associated with that.
    Mr. Rigell. Okay. Thank you.
    Mr. O'Rourke, in your opening statement you mentioned that 
the Service Life Extension option--and it is intriguing, being 
able to extend the life of a ship by 10 to 15 years. And I know 
this is an option that has been carefully examined and 
considered by the Navy. And though it is very costly, it 
doesn't seem that the essential design for hulls has changed 
that radically. That is not like an airframe, for example.
    So what price do we pay in terms of performance or 
lethality of the ship being able to project power by more of a 
comprehensive overhaul and extending the life by 10 to 15 years 
rather than going with an all-new ship?
    Mr. O'Rourke. One of the things that you pay for, one of 
the downsides of this option, is that you are working with a 
ship that has probably less growth margin remaining in it than 
a brand new ship would, and consequently it is not just a 
matter of examining the material condition of the ship and 
making the ship mechanically able to operate, it is also a 
matter, as Dr. Labs mentioned, of maintaining the mission 
effectiveness of the ship and whether the ship has enough space 
and weight and power and cooling and so on to support the kind 
of modern combat systems that would keep it mission-effective 
in the future threat environment.
    Mr. Rigell. I yield back. Thank you.
    Mr. Coffman. Mr. Courtney.
    Mr. Courtney. Thank you, Mr. Chairman.
    Dr. Labs, you mentioned that you haven't done an analysis 
yet of the revised Ohio estimates that the Navy just released. 
When do you think that will be completed?
    Mr. Labs. Well, I plan to request that information, sort of 
get a detailed briefing from the Navy, and I hope that will 
occur over the next--sometime that briefing would get scheduled 
sometime over the next month. Typically those briefings occur 
with both Mr. O'Rourke and myself. And then as a follow-on to 
that, I will be doing an analysis of the Navy's then 2012 10-
year shipbuilding plan, and it would be incorporated into that 
analysis sometime over the next few months.
    Mr. Courtney. And I am just trying to remember what your 
estimates were before this revision. As I recall, you were 
still higher than the Navy in that instance as well?
    Mr. Labs. That is right. Allow me to recap for a moment. In 
the 2011 plan, the Navy had an average price of their 12 
boomers [Ballistic Missile Submarines] at $7.2 billion, which 
actually broke out to about $9 billion for the lead ship and 
6.7- or so for the follow-on ships. Today what the Navy is 
saying, they have actually--and CBO's numbers in comparison 
were about 13 billion for the lead ship and 7 or so--7.8 or so 
billion for the follow-on ships, with an average of sort of 
8.2- for the entire class, 7.2- versus 8.2- for the entire 
class.
    Now, the Navy's estimate as of this year, what they have 
been advertising so far, they said that the follow-on ships are 
now 5.6 billion, at least they think they have gotten it down 
to that point, although their lead ship did come up. Their lead 
ship is now $11.6 billion because they have increased the 
amount that was going to be allocated, sort of nonrecurring 
detail design and engineering. So they have actually come 
closer to the CBO estimate in the lead ship, and we have sort 
of parted company, at least for now, on the follow-on ships.
    Mr. Courtney. That is a pretty wide gap between what you 
have always consistently projected, which, to your credit, has 
always been consistent. Can you sort of explain where you guys 
are so divergent?
    Mrs. Labs. Well, in terms of the comparison between the 
numbers under the 2011 plan, when they had sort of a classwide 
average of 7.2- and we had a classwide average of 8.2-, our 
methods were actually fairly similar, and really the difference 
between us was sort of how we treated that long-run 
shipbuilding inflation.
    The Navy did not sort of account for--how should I put it--
they did not sort of attach an additional cost on their ships 
in constant-dollar terms to account for that long-run inflation 
the way I did. If I would factor that inflation issue out of my 
methodology, our numbers would have been exactly the same, or 
very close to being exactly the same.
    Now that the Navy has sort of gone through and what they 
have said is refined their preliminary design, they have done a 
number of things to it, like going from a 20-tube submarine to 
a 16-tube submarine, reducing the diameter of the tubes and 
several other things, they have stated that they have managed 
to reduce the costs of at least the follow-on ships somewhere 
in the neighborhood of about $1 billion a boat.
    What I don't know yet, and it could be that once I sort of 
see how they have done that and understand those details far 
better, it could be the CBO estimate could come down in a 
similar fashion, or not. I just don't know enough of the 
details to know whether that will be the case.
    Mr. Courtney. And, Ron, your report again talks and the 
chart shows what you are projecting out. If this CR somehow 
ends up with a disaster scenario where we don't implement the 
upgrade in terms of the Virginia class and also--well, we will 
set the Ohio aside--but if we don't get that through this year, 
that really just kind of creates--will that create a domino 
effect in terms of what those numbers are going to look like 
even before the shortfall that you were describing?
    Mr. O'Rourke. I think it would add an extra challenge to 
that situation, because the scenario of a year-long CR would 
create complications for both the Virginia-class program and 
the Ohio-class program, the Ohio replacement program.
    In the Virginia class, a year-long CR scenario jeopardizes 
the awarding of the second fiscal year 2011 boat, which in turn 
jeopardizes the continuation of the fiscal year 2009 to 2013 
multiyear procurement contract, which is a major source of cost 
constraint on those boats. Those boats would be subject to 
having price renegotiation, and the cost of those boats could 
go up, which would undermine a lot of the savings that were to 
have been achieved as a result of the multiyear plan.
    The scenario of a year-long CR would also cause a problem 
potentially in the Ohio replacement program because the amount 
of R&D [Research & Development] funding requested for that 
program in fiscal year 2011 was about 40 percent more than the 
amount that was provided in fiscal year 2010.
    So if R&D work on the Ohio replacement boat was funded in 
fiscal year 2011 at fiscal year 2010 levels, it would probably 
cause the Navy to postpone some of the work that had been 
planned for fiscal year 2011 into a future year. That could set 
back the development schedule for the Ohio replacement boat and 
make it more difficult for the Navy to meet what the Navy says 
is its very tight schedule for completing the development 
boat--the development of that boat in time to support an fiscal 
year 2019 lead ship procurement, which the Navy says is the 
last year that you can think about procuring the lead boat 
without causing at some point the boomer force to drop below 12 
boats at some point in the future.
    Mr. Courtney. Not good.
    Thank you, Mr. Chairman.
    Mr. Coffman. Mr. Wittman.
    Mr. Wittman. Thank you, Mr. Chairman.
    Dr. Labs, Mr. O'Rourke, thank you so much for joining us 
today, and thank you for your service to our Nation.
    Dr. Labs, I want to begin with you. In your written 
testimony, you talk about the CBO estimate for the Navy 
shipbuilding plan at 313 ships, and you say that essentially it 
is about $3 billion short of being able to meet that 313-ship 
Navy.
    In your opinion, where does that fall short as far as their 
cost estimates, and where do we end up at the current level of 
funding as far as total number of ships?
    Mr. Labs. Mr. Wittman, in terms of where they fall short, 
there is no one particular place. It is across most of the 
shipbuilding programs. There is just in some cases very 
incremental differences between this and in other cases larger 
ones. The boomers being one example under that plan, there is 
$1 billion worth of difference. In carriers, there is about $2 
billion worth of difference per carrier, but there are only 
half a dozen carriers in the plan.
    There were other programs that we were very similar. 
Virginia-class program costs estimates, and CBO's and the 
Navy's are virtually identical now, so it just depends. So it 
all kind of accumulates over a 30-year period.
    If the Navy is stuck with sort of the $15-billion-a-year 
sort of current level of shipbuilding, as I mentioned earlier, 
how that would fall out in terms of the long-term inventory of 
the fleet by 2030, 2040 would depend very much on where cuts 
would be made. Would you be making it in very expensive ships, 
would you be making it in less expensive ships, or some mix of 
the two?
    Obviously if you cut out a lot of the cheap stuff, you 
could have the Navy that falls to 200 ships. If you cut an 
aircraft carrier and maybe a couple of ballistic missile 
submarines, you save a lot of money in a big way, so you don't 
cut nearly as many ships from the inventory. So it would 
depend. The range is a considerable one, depending on what 
decisions are made.
    Mr. Wittman. But you also stated that the plan frontloads 
the less expensive ships and backloads the more expensive 
ships. So under that scenario would you say the way it is 
currently planned now that that would have any necessary 
effects as far as what would actually be built according to the 
plan?
    Mr. Labs. Because of that frontloading, one could certainly 
surmise that when the boomers start being acquired in the 
2020s, and that is where your real funding crunch hits, is that 
you are more likely going to be forced to cut more expensive 
ships from the plan, and that means destroyers and attack 
submarines most likely, simply because that is where the money 
is in that time period.
    Mr. Wittman. Mr. O'Rourke, under the current scenario, 
there are some changes going on in the shipbuilding industry. 
You see what is happening with the Northrop Grumman yards and 
some of the uncertainties that are going on there.
    Can you give us your estimate based on this current change 
scenario that we are seeing with our yards, especially there at 
Northrop Grumman, what effect would that have on the Navy's 
shipbuilding plan and their capability to carry out the 
shipbuilding plan?
    Mr. O'Rourke. In terms of assessing possible execution 
risks for the Navy's shipbuilding plan, it is worth noting as a 
starting point that the yards in question that are currently 
owned by Northrop build many of the large and complex ships for 
the Navy, aircraft carriers, submarines, destroyers and 
amphibious ships. So there are a number of programs whose 
execution is something that you would want to watch as this 
divestiture occurs.
    The Navy's interests in what the new entity turns out to 
be, I think, would be principally, although not exclusively, 
twofold. First, I think they would want to ensure that the new 
entity has the managerial skills that are necessary to properly 
run these yards, and especially the nuclear shipbuilding 
activities at Newport News, over which the Navy, I think, has a 
particularly strong interest in making sure are run without 
problem. And to the extent that the Navy is satisfied with the 
current management team at these yards, the new entity can then 
seek to satisfy the Navy on those grounds by showing that these 
people will be transferred over to the new entity.
    The Navy, I think, also will have an interest in the 
financial strength of the new entity to make sure that it can 
absorb unforeseen losses that might occur on its shipbuilding 
program, and also have enough money to make the kinds of 
investments in workforce and capital plant that the entity 
would want to make to remain competitive against General 
Dynamics' yards. So the Navy will be looking at the financial 
strength of the entity in that connection as well.
    Issues that in the press have been reported to be at issue 
as among the things that could affect the financial strength of 
the new entity include the question of pension costs and the 
question of possible cleanup costs at Avondale, should Avondale 
cease operations as an industrial facility entirely. If the new 
yard is encumbered in terms of managerial skills or financial 
strength, it could increase execution risks for the various 
kinds of ships that are built at these yards.
    Mr. Wittman. Thank you, Mr. Chairman. I yield back.
    Mr. Coffman. Thank you, Mr. Wittman.
    Mr. Critz.
    Mr. Critz. Thank you, Mr. Chairman.
    Mr. O'Rourke, you had mentioned that I guess it is the 2006 
313-ship Navy plan is, for using rough language, no longer the 
valid figure that is being talked about; that the Navy is going 
to revisit that and come back with an adjusted number, which I 
think you mention is probably in the 320-321 ship range.
    Now, is that something that you foresee you estimate, or is 
that something you are hearing that is the direction the Navy 
is going?
    Mr. O'Rourke. It is what I am hearing. The Navy has 
actually stated that publicly in some of their testimony this 
year, and they have also communicated that in briefings, that 
they do expect to be coming forward relatively soon--although 
exactly what that means, I don't know--with a new replacement 
plan. But I do think from the standpoint of ensuring the 
effectiveness of congressional oversight of Navy shipbuilding, 
it would facilitate that oversight to have an updated plan that 
has a fully accurate set of numbers against which to measure 
the Navy's proposed programs.
    Mr. Critz. Okay. And, Dr. Labs, you had mentioned that we 
are about $3 billion short a year, and I am trying to figure 
this out. I am a little confused, because obviously the 
shipbuilding plan that we have seen ranges from 313 down to 
about 280-285; that there are these hills and valleys.
    Now, the $3 billion short, will that, in your estimation, 
hit the 285 number, or does that get to the 313-ship level?
    Mr. Labs. The $3 billion shortfall is in reference to what 
I stated in my written testimony. It is against what I call the 
implied requirement that the Navy has not officially signed up 
to, but they have talked about it in other things, of around 
322-323 ships. So it is against that requirement.
    Mr. Critz. Now, the 320-322 ship, there is obviously some 
issues that it seems that the Navy is a little shy on 
amphibious ships. Does this extra eight to nine ships address 
the amphibious issues?
    Mr. O'Rourke. In general, no. The changes in the plan that 
Eric and I have been tracking over the last 5 years do not 
contemplate moving beyond the 33 ships, although it did move it 
from 31 up to 33. But if you have been briefed on this higher 
38 number, Eric and I have not seen, I don't think, any 
evidence to show that a new set of numbers will necessarily go 
to 38. I think it is going to stay at 33.
    Mr. Labs. If you look under the 2011 plan, which is the 
last 30-year plan that we had, the Navy reaches 33 amphibious 
ships about sort of midway in the period for about 8 or 9 
years, as I recall, and then it falls below that thereafter. It 
is important to note that between the 2009 and 2011 
shipbuilding plans, the Navy actually reduced the number of 
ships they were purchasing. Their implied requirement went up 
to 322 or so, but the number of ships that they were going to 
purchase to try to meet that requirement went down. So as I 
said earlier, after around the midpart of the period, you fall 
below the requirement, and you don't return to it beyond 2040.
    Mr. Critz. Is it in your estimation that the Navy is 
looking at it in financial terms or in actual needs of the 
Navy? Are they trying to, in essence, predict what the Congress 
will be able to appropriate and then trying to fit their number 
within that, or is this actually a reevaluation of the true 
needs of our Navy?
    Mr. Labs. It is hard for me to sort of know what is the 
motivation of the Navy on that part. Certainly Navy officials 
have stated in terms of discussing at least the 2011 plan that 
they were mindful of trying to put together what they called an 
affordable shipbuilding plan, and they also have begun to 
discuss the issue of sort of how do you pay for the ballistic 
missile submarine in the 2020s when there will be severe 
pressure on the Navy's shipbuilding budget. At the same time, 
they have stated this implied requirement of 322 ships, you 
know, 313 plus some additional extra. So how they are balancing 
those two, I can't tell you for sure.
    Mr. Critz. Okay. Thank you, and I yield back.
    Mr. Coffman. Mr. Langevin.
    Mr. Langevin. Thank you, Mr. Chairman.
    Gentlemen, thank you for your testimony today.
    While we are on the shipbuilding budget, I would like to 
just turn to the Navy's decision to restart the DGG-51 [Arleigh 
Burke-Class Guided Missile Destroyer] line versus purchasing 
more of the DDG-1000s [Zumwalt-class destroyers]. The Navy 
obviously is basing its decision on a set of assumptions that 
they can restart the DDG-51 line as well as incorporate all of 
the enhanced capabilities it is going to need versus going with 
more of the 1000s.
    Can you give us your assessment of how that decision is 
playing out, and what the cost assumptions are in terms of the 
restart of the line, and are those figures on target?
    Mr. O'Rourke. When the Navy first announced their desire to 
do this in July of 2008, they put together--they put forward a 
few arguments, and these arguments have evolved a little bit 
over the 2 or 3 years that have elapsed since then.
    But essentially if I were to take what the Navy has said 
and boil it down, I would say that what the Navy decided to do 
was to move to a destroyer procurement plan that, in their 
view, better met future mission emphases within the amount of 
money they had available, while also maximizing the number of 
hulls that they could get for that money.
    Now, in terms of how that question is playing out, that is 
going to depend on what the construction cost turns out to be 
for these restart DDG-51s, and the higher that cost turns out 
to be, then I think the more pressure the Navy might come under 
in terms of defending that decision. But the way the Navy 
looked at it at the time and estimated the costs of restarting 
the 51 versus continuing the 1000 and modifying the 1000 into a 
design that would more closely meet these changed mission 
needs, using the numbers they had at the time, that is what led 
them into that decision. But we don't have a lot of evidence 
yet on what the restart of 51s will actually cost to build, 
because we are just getting into that now.
    Mr. Langevin. Okay. In terms of the Navy being able to 
incorporate--I should say the 51 line being able to incorporate 
all the enhanced capabilities it is going to need to meet, for 
example, missile defense needs, is that going to be an 
effective decision? I guess maybe I will point to the fact that 
the Navy plans, obviously, to replace its Ticonderoga-class 
cruisers with the DDG-51 lines modified to the Flight III 
configuration. In order to incorporate the larger, more 
powerful radar, the Navy will have to increase the amount of 
power and cooling to the radar.
    My question on this particular thing is what is your 
assessment of risk to the Navy being able to accommodate the 
new radar on Flight III ships, and what alternative do you see 
as options for the Navy meeting missile defense requirements if 
the Navy is unable to do so?
    Mr. O'Rourke. Yes, I understand what you mean now. You are 
referring to the Flight III ships that are scheduled to go into 
procurement starting in fiscal year 2016. There are a few risks 
that the Navy faces and which they have to manage and overcome. 
One is they need to develop the air and missile defense radar 
on a schedule that would be congruent with the first of these 
ships being procured in fiscal year 2016. There have been some 
observers who have expressed concerns about the ability of the 
radar to be developed on a schedule sufficient for that.
    If the radar turns out to take longer to develop than what 
the Navy anticipates, the Navy can manage that risk by simply 
putting off the start of Flight III procurement into a future 
year and continuing to procure Flight IIA DDG-51s.
    There is a second challenge that the Navy faces, which is 
can they put the radar and the other new or revised equipment 
into the existing DDG-51 hull, including the power-generation 
and cooling equipment that you mentioned, without lengthening 
the hull? The early indications that I get from the Navy is 
they think they can do that. If that does not turn out to be 
possible, and they have to lengthen the hull and turn it into a 
slightly longer ship, that could result in a design that is 
more expensive than what the Navy might be anticipating.
    The third risk concerns the capabilities that you wind up 
with once you develop this ship and begin procuring it and 
introducing it into the fleet, and the aggregate capability 
that the Navy has as a result for air and missile defense 
operations. The Navy made a decision to go ahead with the 
Flight III ship instead of the CG(X) [Next-Generation] cruiser, 
reportedly in part because they concluded that they would be 
able in the future to augment the data collected by the ship's 
radar with data collected by off-board sensors.
    Now, if it turns out, for example, that these off-board 
sensors are not as capable as what the Navy anticipated when 
they originally made their decision, then it would raise the 
question of what your other options might be to augment the 
data on the Flight III destroyer with data collected by certain 
other now off-board sensors.
    One option for that would be to build an adjunct radar 
ship, which is a ship in auxiliary with a very large and 
powerful radar on it, somewhat similar perhaps to the Cobra 
Judy replacement ship, and some small number of these adjunct 
radar ships might be put into the shipbuilding plan and added 
to the fleet to make up for any deficiency that might emerge in 
the amount of off-board data that is available to be merged 
with the data collected by the Flight III destroyer's own 
radar.
    Two other things to look for in the Flight III destroyer is 
whether the Navy intends to design that ship to support an 
electromagnetic rail gun, because the Navy has recently stated 
that that weapon has the potential for air and missile defense 
operations, not just for naval surface fire support, and 
whether the Flight III destroyer will be designed to support a 
higher-power, solid-state laser, like a solid-state laser with 
a power of 200 to 300 kilowatts. A laser of that strength could 
have air defense applications and could help reverse the cost-
exchange ratio that the Navy now faces in terms of trying to 
shoot down targets at an affordable cost.
    So these are issues that are potential matters of oversight 
concern for the subcommittee as the Navy begins to get into the 
design of the Flight III destroyer, and it is my understanding 
from the Navy that they are going to begin preliminary design 
work on the Flight III destroyer during fiscal year 2012.
    Mr. Langevin. I see my time has expired. Thank you for your 
testimony.
    Mr. Coffman. Mrs. Davis.
    Mrs. Davis. Thank you, and thank you all for being here. I 
am sorry that I wasn't here earlier.
    I wanted to go back to the question of how many ships are 
being built and when we can reach the desired numbers. I know 
you have had concerns for some time that the Navy perhaps was 
underestimating the cost of those ships.
    Could you expound a little bit more on what you think 
really ends up being the problem? Is it a question of our 
failure to rein in spending in the shipbuilding accounts per 
se, that it is a difficult thing to do? What role does the 
Congress play?
    I know that in many cases there is a real desire to have 
some of the shipbuilding contracts more front-loaded so there 
is consistency in terms of work being done in a timely fashion.
    What are some of the things that you believe are really the 
issue here? If we are taking so much time, I think, to get to 
where we want to go, it seems that other priorities that we 
might have that come along really get put on the back burner in 
a fashion that might not be helpful. I am trying to figure out 
how we deal with that question.
    Mr. Labs. In terms of what is sort of at the root cause of 
why there are differences between the Navy's cost of ships and 
sort of CBO's, or why ships are so expensive--if I understand, 
that is sort of the core of your question--I think there are a 
myriad of factors that are going into this.
    For one thing is that the shipbuilding industry itself is 
proving to be--it is an expensive industry. Labor and materials 
cost a lot more, as we have seen in the economy as a whole, so 
that adds to the cost of the ships. The rates at which we buy 
these ships are relatively small, and that is going to force 
more overhead costs in the yard into those ships.
    The desire for a high degree of requirements on the ships, 
do we make them more and more capable, has been driving up the 
cost of the ships. Indeed, that was partly what motivated the 
rise of the LCS program was the desire to find a ship that was 
less expensive and more affordable that the Navy could buy in 
numbers to do a lot of the sort of the day-to-day-routine type 
of operations, so you are not sending a destroyer to chase down 
a drug runner or something like that.
    So there is a whole host of issues that sort of go into 
that. I personally can't sort of pinpoint necessarily one or 
two that is doing it. I would certainly not----
    Mrs. Davis. I don't expect a silver bullet. I am just 
trying to make sure that we are asking the right questions in 
some cases in terms of oversight, and whether there is just a 
real disconnect there in terms of what is really needed for the 
job and what perhaps is being put into the budgets.
    I think the other thing, just to follow up really quickly, 
the other issue really is one of the line items that a lot of 
the procurement of the Navy ships require, and I think the 
issue of flexibility, while we are not able to move some of 
that funding as well, does that, in fact, contribute to this 
problem, or is it part of the problem that we are not able to 
do that in as timely a fashion perhaps as we should?
    Mr. O'Rourke. Well, that is a problem clearly under the 
scenario of a year-long CR, because funding for shipbuilding, 
unlike funding that is appropriated for other defense 
appropriation accounts, is not funded at the full-account or 
lump-sum level. It is funded at the line-item level, and 
therefore it is managed by the Navy at that level.
    And as the Navy has pointed out, even though the total 
shipbuilding request for fiscal year 2011 was only about $1.9 
billion higher than the total amount provided in fiscal year 
2010, the funding is misaligned at the line-item level if you 
were to try to meet the specific needs of shipbuilding programs 
in fiscal year 2011. So for fiscal year 2011 programs that 
would require a funding increase over the fiscal year 2010 
level, the shortfall or the misalignment, if you will, of these 
funds totals about $5.6 billion.
    So whether it is done as a special provision in the CR or 
through some freestanding piece of legislation, the Navy would 
need transfer authority so that it could move this funding in a 
way that would better align the amount of fiscal year 2010 
funding with the specific line item needs of fiscal year 2011 
shipbuilding programs. And they would also need authority for 
quantity increases as well. This is sometimes referred to as 
the new start authority, but you can also just call it 
authority for a quantity increase.
    Mrs. Davis. You would suggest trying to figure out a way to 
change this?
    Mr. O'Rourke. Whether it is done as a part of a year-long 
CR or through some other legislative vehicle, the Navy has made 
it clear that these are the two forms of authority that would 
go a long way, although not entirely, but a long way toward 
mitigating the challenges they would face in executing their 
fiscal year 2011 shipbuilding programs.
    Mrs. Davis. Thank you.
    Thank you, Mr. Chairman.
    Mr. Akin. [Presiding.] Thank you.
    It is a pleasure to have you back again, Mr. O'Rourke. You 
did a wonderful job last hearing. This was a month ago or so. 
Very good.
    Mr. Langevin.
    Mr. Langevin. Thank you, Mr. Chairman.
    Mr. O'Rourke, time ran out before I was able to get to a 
follow-up part of our discussion. In all the things that you 
laid out in terms of analysis of alternatives that the Navy is 
going to have to go through, being able to incorporate these 
new enhanced capabilities, particularly the amount of power and 
cooling on the radar, I wanted to know, in your estimation, can 
all of these enhanced capabilities be easily added to, 
incorporated by the DDG-1000 versus the 51?
    Mr. O'Rourke. The most amount of work I think that would be 
needed, or the biggest single piece of work I think that would 
be needed to modify the DDG-1000 to better meet these changed 
mission emphases that the Navy has in mind would be to give the 
DDG-1000 a BMD [Ballistic Missile Defense] capability. And to 
do that, they would need to do a lot of code writing to put a 
new module into the ship's computer programming for BMD 
operations. And they might also need to make changes to the 
radar, especially because they have taken away one part of the 
dual-band radar that the ship was supposed to carry, and they 
would need to do some rewiring in the VLS [Vertical Launch 
System] cells on the ship.
    But it would be especially the modifications to the combat 
system and to the computer program, to include a module that is 
not there right now for doing BMD operations that might be the 
single largest change, that the Navy would have to contemplate 
making to that ship. There would be other changes as well.
    The baseline question is could that ship be modified into a 
design that would meet the Navy's newly changed areas of 
mission emphasis, and the answer is yes, and there would be a 
certain cost for doing that. The Navy reviewed those costs as 
part of the destroyer hull radar study. They briefed Eric and I 
on that. It was the Navy's conclusion that they preferred to do 
this through the DDG-51 line rather than modifying a 1000.
    Mr. Langevin. But there would be less physical 
modifications that would need to be made to the 1000 versus 
physical design changes that would need to be made to the 51 to 
do the same mission?
    Mr. O'Rourke. I guess I would answer by saying that the 
1000 has a lot more growth margin on it than the 51 hull does 
at this point, because the growth margin on the 151 hull is 
already partially consumed.
    Mr. Langevin. Thank you, Mr. O'Rourke.
    Mr. Chairman, thank you. I yield back.
    Mr. Akin. Thank you.
    I am sorry I am a little bit late getting here. I was just 
up at the Budget Committee, and they are thinking of all kinds 
of dastardly things to do to the defense budget, so we were 
doing some battle up there.
    I think because of the fact we have another set of 
witnesses coming, I am going to pass up the questions. I have 
the luxury of being able to ask a lot of these questions to 
staff and to those of you simply when I need them. So I am just 
going to pass that up and thank you all for joining us and for 
all the good work that you do.
    Let us go ahead and take a 2-minute recess, and we will 
send the next panel up.
    [Recess.]
    Mr. Akin. The committee will come back to order. And we are 
going to proceed immediately to panel two. I am going to 
dispense with any comments.
    Sean, do you want to go first, or are you going to have 
some of your witnesses? Why don't you choose whoever wants to 
go first and proceed.

  STATEMENT OF HON. SEAN STACKLEY, ASSISTANT SECRETARY OF THE 
 NAVY FOR RESEARCH, DEVELOPMENT & ACQUISITION; ACCOMPANIED BY 
  VADM TERRY BLAKE, USN, DEPUTY CHIEF OF NAVAL OPERATIONS FOR 
INTEGRATION OF CAPABILITIES AND RESOURCES; AND LT. GEN. GEORGE 
     FLYNN, USMC, COMMANDING GENERAL, MARINE CORPS COMBAT 
                      DEVELOPMENT COMMAND

    Secretary Stackley. Yes, sir. Mr. Chairman, distinguished 
members of the subcommittee, thank you for the opportunity to 
appear before you today with Vice Admiral Blake and Lieutenant 
General Flynn to discuss Navy shipbuilding. And thank you, of 
course, for your steadfast support to our sailors and marines 
and your commitment.
    I have an opening statement for the combined team here. I 
would propose to submit a longer statement for the record and 
go to our remarks.
    Mr. Akin. That will be fine. Submit it for the record, and 
then go ahead with your opening. Without objection.
    Secretary Stackley. Today's Navy is a battle force of 288 
ships, as many as half of which are under way on any given day, 
providing presence and maintaining readiness to respond to 
crisis or conflict wherever our interests are challenged.
    Our Navy's ability to reliably meet the demands that come 
with global presence and readiness rely upon three enduring 
qualities: The size of the force measured in numbers of ships 
and aircraft; the capabilities designed and built into these 
ships and aircraft; and the skill, dedication, and 
resourcefulness of our sailors and marines who put to sea in 
these ships and aircraft.
    The Chief of Naval Operations [CNO] and the Commandant of 
the Marine Corps have defined the force necessary to meet our 
Naval requirements in what has been referred to as the 313-ship 
Navy. In fact, the CNO has emphasized that 313 ships is the 
floor. So to this end, the fiscal year 2012 budget request 
includes funding for 10 ships.
    Equally important, the shipbuilding program includes 55 
ships to be constructed over the 5 years of the 2012 Future 
Years Defense Plan, an increase of 5 ships over the plan of a 
year ago. This increase reflects a priority placed on building 
the force called for by the 313-ship plan, and reflects efforts 
to improve affordability within our shipbuilding program, 
efforts which must be sustained and which must prove effective 
if we are to succeed in recapitalizing ship classes which were 
constructed during the build-up of the 600-ship Navy.
    Our budget request supports the Navy's build plans to 
deliver a new carrier every 5 years, while also refueling the 
Nimitz class, sustaining an 11-carrier force from the 
commissioning of CVN-78 [USS Gerald R. Ford] through to 2041.
    We continue with Virginia-class fast-attack submarine 
procurement at two boats per year. Sustaining this build rate 
is essential to recapitalization of our submarine force, 
essential to affordability on the program, and essential to 
ramping up the critical skills of our submarine industrial base 
as we approach construction of our next-fleet ballistic missile 
submarine.
    We sustained DDG-51 production, which adds both capability 
and capacity to our sea-based missile defense. We have been 
able to increase our plan for DDG-51 construction with the 
addition of a 2014 destroyer, which, with a planned proposal 
for a multiyear procurement in 2013, will leverage the 
stability of this mature production program, improve build 
rates for our two combatant shipbuilders, and improve 
affordability.
    The Aegis modernization efforts are equally critical to 
rapidly increasing capacity in missile defense, starting to 
increase the number of missile defense platforms from 21 today 
to 41, 36 ready for tasking by the end of the FYDP [Future 
Years Defense Program], while also improving their material 
condition to meet readiness demands in the second half of their 
service lives.
    With the strong support of this subcommittee, we are 
executing the dual-award strategy for the Littoral Combat Ship, 
increasing our build rate to four ships per year in 2012. 
Efforts to stabilize design, improve production planning, 
invest in shipbuilder improvements, and leverage long-term 
vendor agreements, all within the framework of a competitive 
fixed-price contract, have returned this program to the level 
of affordability necessary for the Navy to move forward with 
construction at efficient rates in support of the 55-ship LCS 
requirement.
    We increase our amphibious lift capability with the 
procurement of the 11th LPD-17 [San Antonio-Class Landing 
Platform Dock] class ship, and are extending service of the USS 
Peleliu to maintain nine operationally available large-deck 
amphibious ships, while awaiting fleet introduction of the lead 
ship of the America class, LHA-6.
    We are also increasing our logistics lift capability with 
the procurement of second of three Mobile Landing Platform 
class ships, or MLPs, and a joint high-speed vessel. With the 
2012 budget request, the Navy has effectively accelerated the 
MLP program to one ship per year, which should significantly 
approve affordability for this class while also directly 
addressing the workload valley confronting the shipbuilder.
    In the second half of this decade, we will need to proceed 
with recapitalization of three major ship programs. As 
announced last fall, we are accelerating introduction of our 
next fleet oiler with procurement of the T-AO(X) [Next-
Generation, Double-Hulled Fleet Oiler] beginning in 2014. T-
AO(X) will bring modern commercial design to our refueling-at-
sea capabilities, while also providing critical stability to an 
important sector of our industrial base.
    We plan to commence procurement of the replacement for the 
LSD-41 [Whidbey Island-Class Dock Landing Ship] class 
amphibious ships in 2017, following definition of lift 
requirements for this new ship class.
    Most significantly, we will procure the lead ship of the 
Ohio-class replacement in 2019. It has been a quarter century 
since completing a higher class construction, and it is vital 
that we sustain development activities for the next ballistic 
missile submarine sufficient lead times to ensure our ability 
to produce this highly complex, uniquely capable ship on 
schedule.
    It is equally vital that we address cost-risk on this 
program through every stage of its development, or we place 
other ship programs at risk. To this end we have carefully 
defined the capabilities necessary to ensure the ship's 
abilities to meet its requirements, and we have embarked on a 
focused design for affordability effort to capitalize on 
lessons learned of the Virginia program at a much earlier stage 
in the Ohio replacement program.
    The Navy shipbuilding program outlines the challenges we 
confront today and for the long term in meeting our Navy's 
force structure requirements. In the most pragmatic terms, and 
balancing requirements of risk and realistic budgets, 
affordability controls our numbers. So to this end we are 
focusing on bringing stability to the shipbuilding program, 
finding the affordable 80 percent solution when 80 percent 
meets the need. We are strengthening our acquisition workforce, 
increasing not just our numbers, but our core competency in 
critical skills.
    We are increasing emphasis and fidelity on cost estimates 
in our requirements definition process to better inform 
critical decisions at the front end to avoid breakage on the 
back end. We are continuing to improve our ability to 
affordably deliver combat capability to the fleet through open 
architecture. We are clamping down on contract design changes, 
and we are placing greater emphasis on competition and fixed-
price contracts. The benefits of competition are compelling in 
every example.
    Our goals for modernizing today's force and recapitalizing 
the fleet affordably cannot be accomplished without strong 
performance by our industry partners, and so we are working to 
benchmark performance, to identify where improvements are 
necessary, to provide proper incentives for capital investments 
where warranted, and to reward sustained strong performance 
with favorable terms and conditions.
    Now, bringing stability to the shipbuilding program also 
relies on stable budgets. So as we work with Congress on our 
2012 budget request, it is important to emphasize that there is 
an underlying assumption that the ships in our 2011 budget 
request will be fully funded. While executing our shipbuilding 
plan for 2011, we are making prudent decisions to mitigate the 
impacts of operating under a continuing resolution; however, we 
are rapidly approaching decision points where, absent necessary 
funding and new start appropriations, we will run out of line 
and need to pull back sharply on key programs.
    Specifically, 2011 is the first year we increase our build 
rate for Virginia to two boats per year. Likewise, we requested 
an increase to construct two Arleigh Burke destroyers in 2011. 
And the Mobile Landing Platform and LHA-7 Amphibious Assault 
Ship are each a new start in 2011. As well, funding limitations 
on development of the Ohio replacement and CVN-78 class 
construction place those programs' schedules at risk. Virtually 
every shipbuilding program and every shipbuilder is affected by 
the uncertainty of our top line and the absence of a line-item 
appropriation.
    In sum, the Department is committed to building the fleet 
required to support the National Defense Strategy, to which the 
fiscal year 2012 budget request addresses near-term capability 
needs, while also laying the foundation for longer-term 
requirements. Ultimately we recognize that, as we balance 
requirements, affordability, and industrial-based 
considerations, it is vital that we, Navy and industry, improve 
affordability within our programs in order to build the 313-
ship Navy needed by the future force.
    Mr. Chairman, thank you for the opportunity to appear 
before you today, and we look forward to answering your 
questions.
    [The joint prepared statement of Secretary Stackley, 
Admiral Blake, and General Flynn can be found in the Appendix 
on page ?.]
    Mr. Akin. Thank you, Mr. Secretary.
    First of all, just in terms of the problems worked by the 
continuing resolution, a number of us on this committee have 
been working to see what we can do, as we talked about, and I 
think there will be continued support to try to provide you 
with the new starts and things that are necessary to keep 
things running at least in a somewhat orderly fashion. So we 
will continue to work on that, and that we will have to do off 
line, I suppose, as different things develop and depending how 
negotiations work out. But we are aware of those problems. And 
particularly the problem that seems to be affecting 
shipbuilding and the new starts and all is absolutely critical, 
and I think there is at least some level of good support 
particularly in the Armed Services Committee overall. And I 
know Buck is working on that as well.
    The second thing, I was just curious about one of the 
things we have been paying attention to is the EMALS system on 
new carrier, and that has to be built into the hull and 
everything. And I gather the timeline on that is pretty tight. 
How is that going, and do you see any problems with that or 
not?
    Secretary Stackley. Yes, sir. We have been managing EMALS 
to the smallest detail. We were very concerned, about 2 years 
ago, that the program was not on track. Basically we have 
replaced the management team as well as ensure that the program 
is properly funded both to complete its development and also to 
support the in-yard need dates for the CVN-78.
    Today we are at a point in system development that we have 
turned over to the shipyard what is referred to as the Green 
Book, which takes all the testing that has been conducted up at 
Lakehurst, where we have a full-scale model in the ground that 
we have used to launch aircraft. So we have developed the test 
requirements, turned over that Green Book to Newport News on 
schedule so that they can continue to build the CVN-78 to 
support the test program.
    On the production side, we are carefully watching each of 
the components that need to be delivered to Newport News. We 
have 2 in particular, 2 motor-generator sets out of 12 that 
have very limited float on the in-yard need date, but we don't 
see difficulties right now in terms of meeting that. And all 
the other components have float on the order of 4 to 6 months.
    So tight, yes; closely managed, yes. Do I think the risk is 
acceptable? Absolutely. We have yet to complete the SDD [System 
Design and Development] testing. As I described, we had 
launched aircraft off the Lakehurst system in December to 
really do--stress it and to drive learning early on. And coming 
out of that, in fact, we have uncovered some dynamics 
associated between the system and the aircraft's performance 
that we have taken a pause to work more on the software side of 
correcting that issue.
    Mr. Akin. Software, in order to change the amount of force 
relative to distance that the system develops?
    Secretary Stackley. No, sir. What is beautiful about EMALS 
is it is very scalable in terms of you dial in the load that 
you are putting on it and what you want for speed at the end of 
the runway, and EMALS will do the rest.
    What we discovered in moving away from a dead load to an F/
A-18 is EMALS is a long--it is a number of linear motors that 
are in series. And in the hand-off from linear motor to linear 
motor, as the aircraft is accelerating, there is a slight gap, 
and that can be tuned in terms of the way you ramp up the load 
and then the way you drop it off to minimize that gap so it is 
not perceptible to the pilot.
    So that is an example of what we were not able to pick up 
in dead load testing, but you put a pilot on an aircraft, and 
that is the report that we received back. And so we dived into 
that to figure out what is the best way to mitigate that so 
that it is not a problem.
    So the bottom line is the test program is, frankly, in good 
shape. It is a fairly exhaustive test program. We did take a 
pause, because we did not, while we were working on these 
changes or corrections coming out of the live aircraft testing, 
we did not want to have a standing army on the test side that 
was performing inefficiently. So we took a pause. We are coming 
back with corrections and picking back up the system functional 
demonstration this month.
    Mr. Akin. Sounds good.
    Mr. Courtney.
    Mr. Courtney. Thank you, Mr. Chairman.
    And thank you, Secretary Stackley and the witnesses, for 
being here today.
    Secretary Stackley, I want to also particularly applaud the 
work that you have done with this CR crisis, really, in terms 
of these new start programs. Obviously, the Block III contract 
for Virginia class was supposed to have been funded at the end 
of January, and you worked with EB [Electric Boat] and Northrop 
Grumman to sort of, again, extend that requirement, which the 
clock is still ticking, obviously.
    You know, your testimony over the years here in terms of 
the Presidential helicopter and now this issue, I mean, again, 
I think a lot of us really appreciate how sort of level-headed 
and unflappable you usually are with a lot of these problems. 
Your language that you just used, however, a few moments ago, 
saying that if this CR goes out through the rest of this year, 
that you will have to, quote, pull back sharply from the new 
starts, which, I mean, that--again, given your, again, approach 
to things, I mean, can you describe what that means in a little 
more detail? Really, at some point this is going to result in 
shipyards having to pull back sharply in terms of their 
workforce and obviously pull back sharply in terms of our fleet 
growth.
    Secretary Stackley. Yes, sir. Let me describe a couple of 
things.
    First, the effort to minimize the impact of the CR is a 
collective effort between the Navy and industry, and, frankly, 
dialogue with Congress in particular areas.
    Some of the challenges that we have in 2011, first, we do 
have new starts that bind us. Second, as you all are aware, we 
are increasing our investment in shipbuilding. So in fact, the 
2011 shipbuilding account is above our 2010 numbers. So when we 
are executing at 2010 levels, then we don't have enough head 
room or top line to support our 2011 requirements. So we need 
both the top line amount as well as the authorities to go with 
the new starts.
    Now, in terms of contract execution and efficiency, 
frankly, what I focus on is the start fab [start of 
fabrication] date program by program, because if you line 
everything up to support the start fab date, then you will 
minimize any cost impacts, so neither the government nor 
industry has a real issue. So where we have things like 
advanced procurement or some amount of funding that allows us 
to proceed with planning and ordering material to support start 
fab and construction, then we are okay. Where we start to run 
into trouble is when we come up to that start fab date, and if 
we don't have full funding then you have some significant 
impacts.
    And there are a number of programs where we are challenged 
right now. Mobile Landing Platform is the first one that comes 
to mind. We had advanced procurement in 2010, so we have to 
expend that, and we are doing it smartly, but we are going to 
come up to a point where we don't have any further advanced 
procurement funding, and now we have got a bridge to cross.
    In the case of the Virginia, the start fab, we have the 
first Virginia under contract. The start fab for the second 
Virginia in 2011 is actually in the October timeframe. So it is 
perilously close, and we have to, like I say, manage the 
planning and material support to ensure we don't miss that 
start fab date, or there will be impacts to construction and 
impacts to the workforce.
    So program by program, you go down the line. And if you 
look at where you need to start fab, and if you have sufficient 
funding to support that in the near term, then we are pressing 
on. But, ultimately, we need both authorities in that 
increasing the top line that goes with our 2011 request.
    Mr. Courtney. As the chairman said, all of us are doing 
what we can to try and avoid that at all cost.
    Ron O'Rourke and Dr. Labs testified a short time ago about 
the out-year shortfalls, even if we are hitting all cylinders 
here, in terms of the increase in shipbuilding. And in 
particular they talked about the fact that in 2024, Admiral, 
the submarine fleet is going to fall below that 48-ship sort of 
target that the Navy has repeatedly said is needed for mission 
requirements. One issue which was pointed out with the earlier 
panel was the 2018 issue of whether we buy one or two 
submarines. I just wonder if you can comment in terms of what 
benefit that would have if we were able to make it to two in 
terms of that shortfall.
    Admiral Blake. Well, if you are able to make it to two, you 
would, of course, mitigate the situation to some degree because 
you would be able to bring that boat on line when the shortfall 
starts.
    But I think if you take it in the larger context, the 
challenge you have with the SCN [Shipbuilding & Conversion, 
Navy] account in particular with buying that second boat is you 
have to, if you will, come up with around $1 billion in the 
years preceding the buy, in 2014, 2015, 2016, and 2017, in 
order to get economic order quantity as well as your advanced 
procurement. And then you would have to come up with the 
dollars in 2018 in order to be able to buy that boat. And what 
really complicates it is that fact that you have got the 
SSBN(X), which we are putting the R&D into for our strategic 
forces, competing at that time. And, of course, as you are well 
aware, we have brought that number in within our top line as we 
were directed to do last year.
    So when you look at it from that perspective, just from the 
submarines alone, not just to take it in isolation, but then 
you have also got the balance, because we have also got issues, 
as you are well aware, with surface combatants both and as well 
as our amphib [amphibious warfare] force. So when you take it 
in that context, it is not an easy--you can't just take the 
issue in isolation. You have got to take it across the entire 
portfolio and then deal with it.
    Mr. Akin. Okay. Mr. Coffman.
    Mr. Coffman. Thank you, Mr. Chairman.
    First of all, this is to the Secretary. It is our 
understanding that the Department of the Navy officials agree 
that a 38-ship amphibious force would more fully meet the 
Marine Corps' two Marine Expeditionary Brigade amphibious 
echelon lift requirement. Such a force would include 17 
amphibious ships for each Marine Expeditionary Brigade plus 
four additional ships to account for 10 percent to 50 percent 
of the amphibious ships force being in overhaul at any given 
time.
    What risk is associated with maintaining the Navy's current 
plan of a 33-ship amphibious force?
    Secretary Stackley. Yes, sir. Let me start by describing, 
the 38-ship number has been an enduring requirement, and today 
we are at 30. So the determination has been that 33 ships would 
meet the requirement with acceptable risk. What we are 
intending to do inside of the 313-ship plan and by the end of 
this FYDP, if you look at the details inside the FYDP, is to 
get back up to a 33-ship amphibious force that is made up of 
notionally 11 big-deck amphibs, 11 LPD-17 class ships, and then 
11 LSD-41, 49, or their replacements.
    Where the risk comes in, and I am probably going to turn 
this over to General Flynn to discuss the risk piece, is 
associated with how much of the lift requirement you take to 
the fight with you. So if you are dealing with a 2-MEB [Marine 
Expeditionary Brigade] assault, if you have 30 amphibs that are 
operationally available, you are not going to be able to bring 
the full table of equipment associated with 2-MEB. And what the 
Marine Corps looks at is some of the support elements coming in 
at follow-on echelon.
    Mr. Coffman. General Flynn.
    General Flynn. Yes, sir. As Mr. Stackley said, the 38 ships 
would give you 17 ships per brigade. And we believe that we 
could effectively--because of the fiscal constraints we have, 
we could do the assault echelon and load it out on 15 ships.
    The other key part of that is it is not just for the major 
contingency operation. It is also, we believe with 33 ships, 
with an acceptable degree of risk, you can meet the day-to-day 
requirements that we are seeing in regards to presence and 
crisis response. But if you don't have that on the day-to-day 
operations, what you run into is you run into challenges that--
to ensure that you have sufficient dwell time for the crews, 
time for maintenance, and then your ability to meet emergent 
requirements. Because right now what we are seeing, based on 
the number of actions that we are having to respond to, is that 
we are stressing the force. And we are meeting the 
requirements, but that is where your risk would be in your 
ability to continue to meet the demands.
    Mr. Coffman. General Flynn, LHA-6, the next amphibious ship 
to be delivered to the Navy, is more than 1 year late past its 
planned delivery date. What impact does this have in meeting 
Marine Corps lift requirements?
    General Flynn. As Mr. Stackley said, we are on course to 
make 33 ships here starting in 2017. A key part of that is when 
the plans were built, there was the idea behind when a ship 
would reach its expected service life and then when a new 
construction ship would come on. So if there are delays in new 
construction, you then also pressurize the need to be able to 
do maintenance on ships to be able to continue their mission.
    And, for example, because of the Continuing Resolution 
right now, one of the challenges we have is the Peleliu was 
supposed to begin a yard period about a week ago. And if we 
don't have the funding to be able to do that, the Peleliu is 
the ship that is going to help us bridge the delay in 
construction in the LHA-6.
    Mr. Coffman. Vice Admiral Blake, due to the Continuing 
Resolution, the amphibious ship Peleliu's maintenance 
availability was recently cancelled. Furthermore, the Navy 
plans to extend Peleliu's decommissioning date by 1 year in 
2014. What impact will this missed maintenance availability 
have on meeting the Marine Corps' lift requirements, and what 
options are being planned to mitigate this issue?
    Admiral Blake. Sir, first, when you look at it, what we 
will have to do is we will have to look at the ships as they 
are coming up on these avails, and then we will have to juggle 
them because of the loading within the yards. So it is not just 
that there is a yard open, and we can, if you will, push 
Peleliu in.
    But it goes to even a bigger issue. Peleliu is only one of 
five ships that will not be going in the yards by the end of 
this month as the CR continues. So it goes across the entire 
force.
    In the case of Peleliu, what we are looking at right now is 
extending her an additional year, as you know, in order to--
because of the late delivery of her replacement. And what we 
will have to do is then juggle the global requirements in order 
to make sure that we are able to meet all our commitments 
worldwide.
    Mr. Coffman. Thank you, Mr. Chairman. I yield back.
    Mr. Akin. Mr. Critz.
    Mr. Critz. Thank you, Mr. Chairman.
    I am going to follow along the lines of Mr. Coffman's 
questions concerning the amphib ship lift. I am assuming that 
33 ships, which we are headed for, has the risk. But it is only 
the risk gets greater if we go to a high optempo [Operations 
Tempo] sort of thing. So do I understand correctly that 38 is 
the ideal; 33 we can live with, but if we end up with high 
levels of activity, that is where we would see the issues?
    General Flynn. Sir, I think it is fair to say that, with 
33, we should be able to meet all levels of activity with an 
acceptable rate of risk. Because sooner or later, you know, you 
have to make choices on your requirement, and we believe that 
we can meet all the requirements with 33 ships.
    Mr. Critz. And, Mr. Secretary, you had mentioned earlier 
that a 313 fleet ship force is the floor, I think is the 
terminology you used. And we were listening to testimony 
earlier that the Navy is actually going to probably come back 
with a level that is more like 320, 321, 322 as the ideal 
number. Is that something that we are going to be hearing about 
in the near future, or is this all just rumor?
    Secretary Stackley. First, I want to attribute the term 
``the floor'' to the CNO. And in terms of any future force 
structure assessment, I think Admiral Blake should probably 
address that.
    Admiral Blake. Sir, we, in fact, during the past year have 
done a force structure assessment. And what we are currently 
doing is working through the leadership both on the Department 
of the Navy side and the Department of the Defense side. And I 
expect that we should be delivering that in the near future, as 
soon as we go through the wickets with the leadership.
    Mr. Critz. Thank you.
    And so based on what the CNO said as 313 as the floor, I am 
looking at the 30-year plan of what the inventory is going to 
be, and it seems like there is quite a lot of years where we 
are well below the 313. And I am trying to figure out, as we 
look forward, is this something that we need to start 
addressing now to maintain that 313 floor?
    Secretary Stackley. Yes, sir. Let me try to break this up 
into a couple pieces.
    First, when the 313-ship requirement was established, which 
goes back to 2005, that was not 313 in 2013; that was looking 
out to the 2020s, because at the time we had a 276-ship Navy. 
So it was forward-looking to basically give us the ability to 
build up the force structure. And if you take the long-term 
plan, if you just look at the 30-year plan that the Navy 
delivered to Congress last year and break it down to three 
periods, the first decade is really a build-up period, and that 
is where you see the Navy peaking out at about 324 ships in the 
2020 timeframe. And that is good.
    Now, but at the same time what you also see is the Ohio 
replacement program entering the picture, and that has a very 
significant impact on our ability to sustain the build rates 
that you see in this first decade of the 30-year period. We 
have worked with OSD [Office of the Secretary of Defense] to 
basically put together a plan that allows some top-line 
increase during the period of the high replacement program 
construction to the tune of about $2 billion per year, but it 
is such a substantial program that it really does suppress 
build rates during that period, and so, in fact, what happens 
in the longer term is we start to come off of the peak of 324 
ships as other shipbuilding programs are drawn down in numbers. 
So it is an extremely important concern on the part of the 
Department of the Navy.
    Our near-term focus, I think, is exactly correct in terms 
of trying to drive affordability and stability into our plans. 
We have a midterm issue of having to, one, ensure that the Ohio 
replacement program does not escape in terms of cost; and then, 
two, within our top line work priorities, and to the extent 
possible, affordability to minimize the impact on the longer 
term. But we don't hesitate to describe the concern and the 
impacts to meeting our requirements in the long term associated 
with that.
    Mr. Critz. Before my time runs out, just so I have sort a 
full understanding, the 313-ship level is a level that is a 
goal, and it is a level that is based on our national security 
interests; would that be correct?
    Secretary Stackley. If I can share this response with 
Admiral Blake. But 313 is a requirement that was established 
that balances a couple of considerations. First is global 
presence. We have today 288 ships; 142 of them are under way 
today, and about half are under way at any given time. And of 
those, 40 percent of our ships are deployed. In order to 
sustain global presence, you need a force structure size that 
allows the turnaround time and allows your maintenance and 
upkeep for your force. And then the other is response to a 
major combat operation.
    So balancing those two, you arrive at the makeup of the 
313-ship force. That is requirements driven. And then in our 
shipbuilding plan, what you see is we will call it fiscal 
constraints or budget reality. When you overlay on top of that 
requirement what can we afford with reasonable expectations of 
future budgets, then the picture starts to emerge in terms of 
the build-up and then the long-term impact when the 
recapitalization of retiring ships just becomes too much in a 
limited period and has an impact on the overall size of the 
force.
    Mr. Hunter. [Presiding.] Mr. Rigell.
    Mr. Rigell. Thank you, Mr. Chairman.
    Secretary Stackley, Admiral Blake, and General Flynn, thank 
you for your service to our country. And I have the real 
privilege of representing Virginia's Second Congressional 
District, and, of course, just I like to think of it as the 
epicenter of our Navy, certainly on the East Coast, the world's 
largest naval base, and Naval Air Station Oceana, and the naval 
amphibious base at Little Creek. So the equipment that you 
procure and the ships that you are building enable our men and 
women in uniform to accomplish the mission, and I am grateful 
for your service in that regard.
    My question addresses the fiscal year 2011 continuing 
resolution and a program issue that I don't think has really 
been discussed and gotten the attention that it merits. It is 
my understanding that the CVN-78, the Gerald R. Ford, was 
authorized to be funded incrementally over 4 years, beginning 
in fiscal year 2008 with its procurement and finishing in 
fiscal year 2011. As I review the budget from fiscal year 2010 
for CVN-78, I know that approximately $737 million was 
appropriated by the Congress, and that amount is presumably a 
ceiling which the program is forced to live within while under 
this continuing resolution. And I further note that the fiscal 
year budget for CVN-78 was over $1.7 billion. So that leaves 
us, the math is pretty simple on that, a delta of over $1 
billion.
    So, Mr. Secretary, I address this to you. What, then, is 
the Navy's plan for funding the rest of CVN-78 if you are 
forced to live within the continuing resolution? And as a 
slight follow-up there, is there any specific legislation or 
legislative authority that would be required by the Navy if 
that, in fact, is the case?
    Secretary Stackley. Yes, sir. In my opening remarks, I 
refer to both the CVN-78 and 79 construction impacts associated 
with the CR, because we also have advanced procurement on the 
79 that is affected in 2011.
    With regards to the fourth year of incremental funding on 
the 78, there is a $1 billion delta between the 2010 CR levels 
and the 2011 request. So two things would have to happen if we 
have to live within that cap in 2011. We would have to have the 
balance of funding in 2012, and we would have to have the 
authority that goes with an additional year of incremental 
funding. Today we are authorized 4 years incremental funding. 
We need that fifth year. The added funding doesn't come into 
the picture until about the 2013 timeframe. So the funding that 
is in the program today gets us, including 2011 at 2010 
levels--would get us into 2013, but we would be getting into 
2013 on fumes.
    So there is a shortfall. We would have to have that 
restored in 2012. We would have to have the authorities that go 
with that. And, as you know, you have the 2012 budget request 
in your hands. So any program impact associated with the CR on 
shipbuilding, there is no room in 2012 unless you all make room 
for it to fix it in 2012 without creating a cascading impact on 
the total shipbuilding plan.
    Mr. Rigell. I appreciate your clarification on that. And 
what limited funds that we have, they are under stress because 
of operating under the CR. And I have met with senior Navy 
officers and procurement officials within the district, and we 
are going to do everything we can to straighten this out for 
you. It just pains me as a businessman who now serves in our 
Congress to see that it is just so, in some ways, almost 
irrational the way that we are going about this. So I assure 
you that I am pursuing every option that I can, and I know my 
colleagues are as well. Thank you for your testimony.
    I yield back.
    Mr. Hunter. Ms. Sutton.
    Ms. Sutton. Thank you, Mr. Chairman.
    And thank you for your service and for your testimony here 
today.
    I am going to talk to you about something that we haven't 
heard yet here and may come as a surprise. But I think a key 
component of modernizing our infrastructure and preserving our 
military assets and saving money in the process, which we hear 
a lot about, saving money in the process, is adopting a robust 
corrosion prevention and mitigation strategy. And it is not a 
glamorous topic, but it is one that is worth our time and 
attention, and, frankly, it is something that DOD is doing 
well, because they have invested in the Office of Corrosion 
Policy and Oversight. It plays a really important role, just to 
give people a little idea of the scope of corrosion in all of 
our branches as well as all on our military assets. They all 
face unique sets of challenges when it comes to corrosion.
    But including the military as well as our roads, bridges, 
highways, water systems, I mean, corrosion has a cost of some 
$276 billion a year. Two hundred seventy-six billion dollars a 
year. And for those of us in this body--that is according to a 
GAO study. Those of us in this body who are concerned about 
fiscal responsibility, it seems to me that one thing that I 
would enjoy you expounding a little bit upon is this DOD 
corrosion office that you have, because it is my understanding 
that there have been a number of demonstration projects, some 
150-plus demonstration projects, that show a return on 
investment of somewhere in the neighborhood of 55 to 1.
    So why is that important? Because it is important that we 
make cuts that are smart cuts and we make investments that are 
smart investments to get us where we are going. Specifically, 
there was an article in the San Diego Business, I think, 
Journal it was about the effects of corrosion causing us to 
retire, I believe it was, the Spruance ships at a much earlier 
date because of the lost ability to keep them viable because of 
the impact of corrosion.
    So in these days of continuing resolutions--and that is 
also another issue, isn't it? Because if you let things 
corrode, and you don't have the money to fix them now, you 
sometimes lose the capacity to fix them later.
    So if you could just sort of expand upon how we might be 
smart in investing in these technologies up front and having 
that money recaptured down the road.
    Secretary Stackley. Yes, ma'am. At great risk, I will start 
by saying that an old friend used an expression that, if you 
want to get an argument out of me, you are going to have to 
change the subject.
    Corrosion control. I have seen extraordinary numbers in 
terms of the cost impact associated with corrosion on our ships 
and aircraft to the tune of 40 percent of our maintenance 
dollars are tied to wrestling with corrosion issues. We do have 
a concerted effort, DOD, OSD has a chair, and each of the 
services contribute to a team that goes after best practices, 
investing in developing new techniques, looking at materials, 
and then how do we best implement these.
    We spend a lot of our time talking about affordability on 
the procurement side because we are trying to acquire our 
platforms, but we are placing much greater emphasis these days 
on life cycle costs, because it is starting to dominate our 
ability to operate and maintain our ships and aircraft. And 
corrosion is a key part of that.
    So inside my office I have a corrosion czar that pegs to 
the OSD team and works across programs and systems commanders 
to target smart investments and to figure out how can we either 
accelerate on what we call forward fit when we procure the 
platform, and what do we need to do on backfit in terms of 
maintenance and upgrade and also modernization.
    When we look at extending the service life for ships, a key 
part of a 313-ship Navy is holding on to the ships you have got 
for their full service life. And, in fact, we are looking at 
extending service lives on certain platforms. We don't have a 
prayer of doing that unless we get out in front of issues like 
corrosion.
    So right now, when we go through the Aegis modernization 
program, we are at the front end of the destroyers. So the 
Flight I destroyers have just entered Aegis modernization, and 
as we are tearing those ships down, we are getting a good 
material baseline to capture what the first half of their 
life's history is, but we are also looking at instrumenting so 
that as we go through and press on with upkeep for the Flight I 
ships, we are building the work package for the Flight IIA 
destroyers, because those are the ships that we are looking to 
extend beyond their initial service life. And so we are using 
this period to figure out what are those investments that are 
required, what are the key areas of the ship that need the 
attention, and then ensuring that, in the longer term, the 
dollars are there and the efforts are there to meet the service 
life expectations.
    So you hit some large numbers in terms of the number of 
initiatives. There are a large number of initiatives that span 
from investments in paint teams just to help the crews maintain 
their ships to selecting some pretty exotic materials in key 
areas where you don't have the ability to get at the point of 
corrosion, and so you really need to rely on higher-tech 
solutions.
    Ms. Sutton. Thank you.
    Mr. Akin. [Presiding.] Mr. Wittman.
    Mr. Wittman. Thank you, Mr. Chairman.
    Secretary Stackley, General Flynn, Admiral Blake, thank you 
so much for joining us today, and thank you for your service to 
our Nation.
    Secretary Stackley, I want to pick up with your comment 
about this entire picture, and I want to put it in context of 
saying that I believe with the challenges this Nation faces 
with its defense needs at the very top of the list is Navy 
capacity. And capacity provides us the ability to project 
force, and 313 is the bottom line. Obviously I think a larger 
number of ships is needed. The key is how do we get there? And 
I think it is critical that we get there.
    We talk about building ships. I want to go to your point 
about service life completion. If you look at it, it looks like 
the Navy is getting back to basics and saying, listen, we have 
got to do the training. We have to make sure that the manning 
requirements are there. And so they are moving billets from 
land back to sea. And I think that is the proper response to 
what has been a failed optimal manning plan.
    If you look at where we need to go in the future, I think 
that I am concerned in that I refuse to believe that that just 
happened overnight, that that realization was just there. To 
me, that should have happened sometime past, and that we have 
seen, I think, some history there where we have kicked the can 
down the road on maintenance and training. And I think that is 
finally coming to roost right now with where we need to be with 
this entire plan of fleet capacity, and with where we are with 
optimal manning, and seeing that that has been put by the 
wayside, and where that decisionmaking has led us.
    I just want to know, why are we just now going to general 
quarters over this? And I want to know how long it is going to 
take for our fleet to get back on course where we are going to 
be conducting effective and thorough maintenance and materials 
management and making sure that we are providing the necessary 
training for our sailors to make sure that we never get back to 
this position again. And we have seen some early science of 
that, of those problems there. I want to make sure that we have 
a clear understanding about why it took us so long to get where 
we are, and how we are going to avoid this in the future, 
because we do not get to the fleet capacity we need without 
making sure that we have a robust program for training, 
maintenance, and materials management.
    Secretary Stackley. Yes, sir. This is probably going to be 
a two-part answer where Admiral Blake is going to have part 
two.
    This is actually a fairly complex issue, and the CNO and 
Admiral Harvey, Fleet Forces Commander, have spent a lot of 
time trying to get to the root of it and have launched a couple 
of key fleet reviews to get a better understanding of what are 
the root causes, what do they trace back to, how far back do 
we, in fact, have to go to start correcting the issues. And 
then you have a large population of issues. Now you have to 
prioritize it, and then you have to resource it.
    So several things emerged. One is we went through a long 
period of implementing a number of initiatives that would bring 
certain efficiencies from a budget perspective, but placed risk 
on the fleet in terms of care and maintenance of our ships. And 
they were done somewhat individually without a recognition of 
what the cumulative impact would be, and then over time the 
issues started to manifest themselves. So in the course of the 
past, I would say, 1 to 2 years, we have been coming to grips 
with it and reversing some of those initiatives that were laid 
in place years ago.
    You mentioned some of the manning, in terms of increasing 
our ships' manning. We are looking at everything across the 
board. You hit on training. That is a key element. Parts 
support. We are going back to ensure that in our attempt to 
reduce everything from inventory to just in time, we have got 
the right understanding of reliability-based bearing, so that 
whether it is a spy radar or whether it is an LM2500 [General 
Electric gas turbine], when the trained sailor that is on board 
ship now goes to the parts bin, he has got what he needs to 
keep the ship running.
    So we are looking across the board trying to ensure we have 
got the right priorities in place while we--and it is going to 
take time--while we resource the number of things that we need 
to resource to increase our readiness and reliability system by 
system, platform by platform.
    Admiral Blake. The one thing I would add, I would say as 
you have this series of initiatives taking place, I think if 
you look back, you would say that not any one initiative taken 
in isolation would have a debilitating effect. But when taken 
in cumulation, what we started seeing, if you will, the 
indications and warnings on the material inspection side, one 
of the principal ones being in-serve, where we would go on 
board ships. And, of course, in-serves are not done every year; 
they are done over a period of time. And so you didn't get the 
trend analysis until you started seeing them coming in. And 
then the question came up, why are these ships not doing well 
on in-serve? And then you had to focus on, all right, now that 
they have not done well, have we got a trend here? So then we 
had to look at it, and then we had to isolate it, and then we 
started, if you will, working our way back.
    You mentioned moving personnel from shore to sea. Not only 
are we doing that, we are also putting a greater emphasis on 
eye-level maintenance down on the piers so that we can put more 
people there.
    We have increased the training, we have increased the 
dollars that we put in maintenance because we recognize that if 
these ships are going to make it to the end of their service 
lives, we have got to do that. And it is all the ships.
    The best example I can give you is the midlife we are doing 
on the LSD-41 class. We have got to get those ships. We tailor 
those midlifes to each individual ship, so you will have 
different amounts depending upon their material condition. And 
that is absolutely critical if we are to get those ships to the 
end of their expected service lives. Without that, you are 
going to see that ships will not be able to get there, which 
is, as one of your Members brought up earlier, why it is so 
critical to get these maintenance windows done as we are 
operating under the current CR.
    Mr. Akin. Thank you.
    Mr. Langevin.
    Mr. Langevin. Thank you, Mr. Chairman.
    Gentlemen, thank you. Admiral Blake and Secretary Stackley, 
General Flynn, thank you all for your service to our country, 
extraordinary service, and everything you have had to say here 
today.
    I was away from the beginning part of this panel, so I 
apologize if my question has already been asked. But Admiral 
Blake I would just start with you, if I could--with respect to 
a follow-on to the Ohio-class submarine, the SSBN(X). Officials 
within your organization recently described some of the 
significant schedule and cost challenges that face the program. 
Considering the importance of our ballistic missile submarine 
force to our nuclear and strategic posture, obviously it is 
clearly important that these boats be deployed on schedule. How 
confident are you that the Navy will meet its cost and schedule 
goals?
    Admiral Blake. We have a very high confidence level that we 
are going to be able to meet both our cost and our schedule 
goals, and I will give you a couple of specific examples of why 
we feel that way.
    First of all, we are leveraging what has been done in the 
past in the earlier submarine programs, specifically the 
Virginia class. We are also leveraging for the SSBN(X), the D-5 
SLEP program. So we are not starting out new. We have got a 
proven program. We are going to do an extension on those, and 
we are going to be able to put a proven system on those ships.
    When I refer to the Virginia class, we specifically looked 
at, not only their HM&E, hull maintenance and engineering, but 
also their combat system suite, and we leveraged off those 
programs in order to apply them to the SSBN(X). We recognize 
that we have to have an SSBN(X) on station, certified, ready to 
go in 2029, and we also realize that in order to do that, we 
have got to start in 2019 with the building of the first ship 
in that class.
    So what we have done is we think we have built flexibility. 
We have addressed issues up front. We have even gone to the 
detailed design on this particular class of ship, and we have 
it at the most mature level, as compared to say either the 
Virginia or the Sea Wolf class, which were not at that high a 
level in detailed design.
    So when you take all those factors into effect, I think 
what you see is that we think we are in a good place when it 
comes to both the cost and scheduling to deliver that ship, 
because there is no alternative. As you mentioned earlier, it 
is the most survivable leg of the triad, and we have to deliver 
that capability to the Nation.
    Mr. Langevin. I agree, Admiral. Thank you for your answer.
    Secretary Stackley, because of the strategic mission of the 
SSBN(X) and the fact that it remains, as we have talked about 
today, the most survivable leg of the nuclear triad, some, 
including the Chief of Naval Operations, Admiral Roughead, has 
stated support for moving the SSBN(X) funding out of the Navy 
shipbuilding into a conversion account to alleviate fiscal 
pressures on other shipbuilding programs.
    Given the fiscal pressures across all of the U.S. 
Government, can you outline how that could be accomplished 
without decreasing the top line of the Navy's yearly budget?
    Secretary Stackley. I don't have good past examples of 
being able to do that, but we have a couple of examples of 
other major programs that have been set aside, if you will, 
into a special fund. So we established--you all established the 
National Defense Sealift Fund back almost 20 years ago now to 
address the need to recapitalize our sealift fleet, and that 
has proven very effective.
    More recently, the Missile Defense Agency has been 
separately appropriated, again to fund the investments required 
on the development side and some procurement to address what is 
in fact a national security priority. So those are probably the 
two closest recent examples of separately funding something, a 
requirement that is at that level of importance and, frankly, 
that level, that size.
    We, barring any other alternatives, we have brought the 
cost of the high replacement to bear against the total 
shipbuilding top line. If it does nothing else, it addresses 
the--it brings the issue to light much earlier in the process 
so that the administration and the Congress have the 
opportunity to wrestle with, how do we fit the recapitalization 
of the higher class within the other pressing priorities that 
the Department is facing?
    Mr. Langevin. Thank you, Secretary.
    Turning to Virginia class, if I could, Admiral Blake, on 
account of the sharp drop in our attack submarine force as the 
legacy systems leave the fleet, the Navy is set to procure, as 
you know, two Virginia-class submarines per year until 2018. 
After that date, however, the force is going to begin to drop 
below the Navy's requirement for a 48-ship fleet.
    What are the possible mitigation strategies to counter this 
shortfall, and in particular, what effect would procuring an 
additional submarine in 2018 have in the Navy's attack 
submarine shortfall?
    Admiral Blake. Sir, that is sort of a two-part question. 
What have we done to this point, first of all, we have 
accelerated the delivery of the Virginia class. We have gotten 
that down from 72 months down to 60 months.
    Second, we have looked at the Virginia class, and not only 
the Virginia class but all submarines, and determined which, if 
you will, could be best in breed, and we might be able to get 
extensions out of those boats.
    Specifically to the 2018 boat, one of the real challenges 
we have there is if we were going to be able to put that boat 
in there, we would then have to come up with both economic 
order quantity and advance procurement in fiscal years 2014, 
2015, 2016 and 2017 to the tune of about $950 million to $1 
billion in those years. Then we would have to come up with the 
additional dollars in 2018 to buy that. And what really 
complicates it is we have, as you know, within our top line all 
the R&D and the initial dollars for bringing the SSBN(X) on 
line. So when you couple that in there, that is where it comes.
    If that boat were to be there, would it mitigate our 
shortfall? Absolutely. But what you have to do is you have to 
look across the entire portfolio, not only with the attack 
submarines but also with the surface units, because we have to 
balance within our portfolio; we have to be concerned about 
getting our amphib numbers there. We also have the issue coming 
between 2020 and 2030 when we have large numbers of surface 
combatants going away, and we have to replenish those stocks.
    So when you look at it, if you just take it in isolation, 
anything is possible. But when you take it and look across the 
entire portfolio, that is where the real challenge comes for 
us.
    Mr. Langevin. Thank you, Admiral.
    Thank you, gentlemen.
    I yield back.
    Mr. Akin. Mr. Hunter.
    Mr. Hunter. Thank, Mr. Chairman.
    First, General, Admiral, Mr. Secretary, thanks for your 
service and your dedication in working with us in trying to get 
the Navy where we think they need to be at and the Marine Corps 
as well.
    The first question I guess would be for General Flynn, kind 
of going off Mr. Coffman's and Mr. Critz' comments on the LHA-6 
and 7. Do you think there is any commentary on the Marine Corps 
right now, the fact that they don't have well decks, the fact 
that they can't support any kind of landing craft going out of 
them? Or do you think that kind of plays into the cancellation 
of the Expeditionary Fighting Vehicle and looking for a new one 
there?
    Is there any commentary there that the Marine Corps now has 
LHAs with no well decks?
    General Flynn. No, sir, I don't believe there is anything 
like that there. The decision to build the LHAs without the 
well decks was made probably I think about well over 5-6 years 
ago, and at the same time, the commitment, we were moving ahead 
with the Expeditionary Fighting Vehicle. So I don't see any 
commentary there at all, sir.
    Mr. Hunter. Do you think it is wise to have LHAs with no 
well decks?
    General Flynn. Sir, I believe, when you have a limited 
number of dollars to spend on shipbuilding, the more 
versatility and flexibility you can get in the ship is what we 
should look for, and that is why over the last year we have 
been working with the Department of Navy and the Navy to, when 
we build LHA-8 in 2016, we are going to put the well deck back 
in, because that will give you the most flexibility and 
versatility out of a limited number of assets.
    So, I am a believer in a well deck, and when I testified 
last year, I said we should be looking about putting the well 
deck back in, and I think we are on the path to do that, sir.
    Mr. Hunter. Thank you.
    Mr. Stackley, you concur the LHA----
    Secretary Stackley. Yes, sir. We are basically doing an 
analysis of alternatives right now looking at different 
approaches towards restoring the well deck to the LHA-8, 
considering, one, the timeframe and then, two, what is the most 
affordable method to give that ship the capability.
    Mr. Hunter. The next question is kind of broad. If you look 
at world events and where we are based at, where the Fifth 
Fleet is, countries we use for kind of bases of operations 
because we have to, and as we start pulling away from those 
places, let's say, if we start moving away from places like 
Bahrain because of their style of government, which we don't 
fully support, but we have to use them, and we do support them 
in certain ways, but as we move away from that and as we move 
into more of a, let's call it sea-based basing--last week I 
think it was Admiral Roughead said the great thing about a 
carrier or any other kind of ship is you create your runway on 
the water there. So you are based out of the water, and you can 
go anywhere, and you don't have to use these bases which we 
might not like the people in those countries that they reside.
    So the question is this: One, moving this conversation from 
what I have just stated to things like the MLP, to things like, 
hey, we have to sea base now, we are going to have to do it 
more, I frankly think we should start doing it now. Secretary 
Mabus didn't really have a great answer last week because he 
said, well, what we are doing now is based on the QDR 
[Quadrennial Defense Review]. Well, the QDR doesn't account for 
Libya, and it doesn't account for Bahrain. It doesn't account 
for Egypt. It doesn't account for all of these things that just 
happened to blow up in the last month, right? This stuff all 
just happened. It accounts for two ongoing operations but not 
in the way that it is happening now.
    So the question is, how much more important does it make 
things like having an MLP--and General Flynn, please, and 
Admiral, whoever would like to, this is my last question--so 
how much more important does world scenarios, kind of the way 
things are right now, play when it comes to total sea basing 
and things like the MLP and being able to transfer cargo and 
that thing in the ocean?
    Admiral Blake. Yes, sir. I think if you look at the Navy-
Marine Corps team, we will have always been expeditionary in 
our approach. So we like to say, we only like to play away 
games. We don't like to play home games. By that we mean, we 
want to be out there forward deployed and providing a 
deterrence presence, if you will, as we are out there.
    When you look at what we are able to do, Admiral Vernon 
Clark, when he was CNO, used to say, oh, we can go anywhere and 
we don't need a permission slip. And that is exactly where we 
want to be.
    So, as you have articulated, this combination of amphibious 
and surface combatants and aviation is what gives us that 
ability to be forward deployed and give that forward presence 
to the country, and I think it is an absolutely critical 
aspect.
    General Flynn. Sir, a key part of that is I think our 
approach to what we are doing with maritime prepositioning in 
working with the Navy and getting the MLP going and also adding 
the T-AKEs [Dry Cargo Ships] to the existing squadron is an 
example, first of all, of frugality. We are taking existing 
assets and we are making them more useful for the environment 
we are about to receive or about to see.
    So what you see by the addition of the MLP and what you see 
by the addition of the T-AKE is we will have the ability 
without going into port to do selective offload of the MPS 
[Maritime Prepositioning] ships and also to be able to do at-
sea transfer of vehicles so that you can get them to the 
connector that you need to have relevance ashore.
    So, first of all, I think it was a frugal approach, and the 
other part is I think it is going to tremendously increase our 
capability.
    Mr. Akin. Thank you.
    Ms. Davis.
    Mrs. Davis. Thank you all for being here, and perhaps just 
put in a plug for some front loading of that funding from time 
to time when it looks like we could use it. I would certainly 
ask us all; I think we have been looking at that for some time.
    I wanted to ask about the reasoning behind carrier 
homeporting decisions. I know that is a difficult one. I know 
it is complex. I know a lot of things go into that. But it is 
difficult to actually pin folks down about it, quite frankly. 
So I am going to ask you if you could tell me exactly what goes 
into the process of determining a home port, and what can 
effect a change in those decisions? Because sometimes we see 
that the Navy plans to home port ships in different locations 
or move ships, and yet then it is determined that new ships are 
coming online, so that is not a good idea to do what was 
previously thought would work.
    Tell me a little bit more about that and what we can expect 
and how sometimes delays in shipbuilding negatively affect 
those homeporting decisions as well.
    Secretary Stackley. I am going to have Admiral Blake 
address the homeporting issue, and then I will then talk about 
delays in shipbuilding.
    Admiral Blake. If we take the West Coast for an example, if 
you look, we have three home ports on the West Coast that are 
carrier-capable. We have the two up in the Northwest, and then 
we have the one down in San Diego. And if you look, our 
position to put one carrier in Bremerton, one carrier in 
Everett, and then have up to three carriers in San Diego, and 
additionally, because carriers have to go into the yard, what 
we have is we have the ability to put a carrier up in Bremerton 
in order to give it an extended yard period with a dry docking.
    Our most recent example is the Nimitz class, the Nimitz 
itself, actually. And what we have to factor in as we are, if 
you will, moving the ships around is we like to have that 
strategic balance and we like to make sure that we are filling 
all the holes, if you will, as we are moving the assets between 
locations.
    With respect to the Nimitz, it was the only yard we could 
use on the West Coast, so we pushed her up there, and then the 
decision was made to leave her up there. But if you look 
overall, the overall plan for the Navy in the long term would 
be that we would continue to use the Everett yard, the Everett 
facilities, the Bremerton facilities, and then we will also 
have up to three submarines--three carriers, correction, in the 
San Diego area. And that is how we do it. So we move them 
around.
    Mrs. Davis. But we also know that there are some delays or 
questions whether a new carrier would be coming certainly to 
San Diego. I am just trying to understand, again, whether even 
though that may be the strategic desire to have three carriers 
there, there is a reality that we are sort of waiting to see 
what is really going to happen on that front. And it almost 
feels as if there are some different decisions for the West 
Coast and the East Coast which are also strategic balance.
    Admiral Blake. I would say, if you look at San Diego, we 
have 50 ships, 70,000 personnel in San Diego alone, and there 
is no effort--not effort, that is the wrong term--but we are 
not going to walk away from San Diego. And I think it is just a 
matter of, as we move the assets around and we have to, if you 
will, place them in the various locations, and as I mentioned 
earlier, San Diego will always be up to three carriers because 
it has the capability to do it.
    Mrs. Davis. In the few remaining--just I think there is a 
minute left, I wanted to ask a littoral comment, LCS question 
as well, and whether there are any maintenance or docking space 
requirements that are unique to the aluminum-hull LCS, and what 
are the costs and basing impacts to the Navy?
    Admiral Blake. Currently what we are doing right now is we 
are looking at both East and West Coast options for the home 
porting. The initial home ports are going to be San Diego on 
the West Coast and Mayport on the East Coast. But I would tell 
you, as the inventory fills out, you know, the end inventory is 
55 ships, there is every reason to believe that we will expand 
that because you have to, because you only have a limited 
number of facilities within those two bases. So we will have to 
do the environmental assessments, and then following that, we 
will then look at additional bases.
    Mrs. Davis. Okay. My time is up.
    Thank you very much, gentlemen.
    Mr. Akin. Mr. Palazzo.
    Mr. Palazzo. Thank you, Mr. Chairman.
    Gentlemen, thank you all for being here today.
    There is no doubt there is a lot of concerns on all of 
Americans' minds, and they typically right now are centered 
around jobs, creating American jobs, the economy, our national 
debt. And they are all looking for solutions on how we are 
going to solve these issues.
    What really brings it home is when Chairman Mullen or 
Admiral Mullen actually says that the greatest threat to our 
national security is our national debt.
    Many of my colleagues are looking for ways to reduce our 
deficits and pay down our national debt. And I am afraid that 
in the flurry of trying to find ways to reduce our deficit and 
our debt, they are going to be looking at our Department of 
Defense.
    And as most of our colleagues are also, we are 100 percent 
committed to making sure that our warfighters have the best 
equipment, best training to the best value to the American 
taxpayer.
    So it kind of brings me to a question on Navy acquisition 
strategy. So my question is going to be for Secretary Stackley.
    Since coming to Congress, I have become aware of several 
recent examples of multiyear procurement contracts in Navy 
acquisition, and I am also aware that Ingalls Shipbuilding in 
Pascagoula, which happens to be in my district, recently 
completed its sea trials for its 28th Arleigh Burke-class 
destroyer which was funded under a multiyear procurement 
contract that started in fiscal year 2002. I believe the DDG-51 
restart is good for the Navy and good for the Nation, and I am 
looking forward to these ships being built very soon.
    In today's tight budget environment and with increasing 
pressure on these budgets in the future, it is important for us 
to look at funding future ships like the DDG-51 restart in the 
most efficient way possible. I understand the multiyear 
procurements are generating savings for the taxpayer and 
promoting stability for the defense industrial base. Simply 
put, I believe we need to move toward more of these types of 
contracts.
    How can this committee assist you in enabling multiyear 
procurements for programs such as the DDG-51 Arleigh Burke-
class destroyer and other programs?
    Secretary Stackley. Let me start by saying that the Burke 
programs had two multiyears, both of which were very effective 
in terms of yielding savings for the Department. And in 
establishing the strategy for the restart on the 51, through a 
series of discussions and decisions, we worked with industry to 
initiate the restart at Ingalls. So, in fact, the DDG-113, 
which is the first ship of the restart, is under negotiation 
right now with Ingalls, and when we look ahead toward getting 
past the restart and into stable production, in fact we are 
targeting a multiyear procurement in 2013.
    So in our budget exhibits, when you look out over the FYDP, 
you will see a plan for multiyear procurement. The plan is a 5-
year multiyear, which includes nine ships in those years. And a 
lot of effort went into our 2012 budget build to make room for 
a second ship in 2014, which is right in the middle of that 
potential multiyear window, to give both the volume and the 
stability that the program needs in order to yield the savings.
    So right now we are at the point in the process where we 
are working inside of the Department to address all of the 
issues that we need to certify before coming back to Congress 
notionally 1 March 2012 with a legislative proposal for 
multiyear procurement on the 51s.
    Mr. Palazzo. And you will let this committee know if there 
is any way we can assist in that acquisition strategy.
    Are there any other additional or specific authorities 
necessary for the Navy to continue pursuing this acquisition 
strategy?
    Secretary Stackley. No, sir. The 2009 WSARA [Weapon Systems 
Acquisition Reform Act] pretty well laid out what we need to do 
to certify the multiyear, and we are attacking it up front.
    Frankly, since it has been so long since we executed a 51 
multiyear--it will be a 10-year period--we are having to 
reengage portions of the Department to get back up to speed on 
the 51 program in order to support that certification.
    Mr. Palazzo. Thank you, gentlemen.
    I definitely believe that a strong, robust Navy is key and 
critical to the future of our national defense, as well as our 
global force projection. So thank you all for your all's 
service.
    I yield back my time.
    Mr. Akin. Thank you.
    Now we are going to go to Mr. Johnson.
    Mr. Johnson. Thank you, Mr. Chairman.
    And thank you members of the panel for being here today.
    I, too, understand how important it is to bulk up the 
backbone of our ability to provide security for the Nation, so 
I support this expansion.
    History shows that a strong navy is critical to a nation's 
defensive and offensive capabilities, as well as necessary for 
the protection of merchant vessels and key sea lanes of 
communication. And I think, with respect to the Navy, it is 
better that we have and not need as opposed to need and not 
have, given the amount of time it takes to build these ships.
    I do have some questions, however, regarding the 
shipbuilding program as it has been presented. I am concerned 
that we may be prioritizing quantity at the expense of quality, 
particularly given our short-term focus on light ships designed 
for use in coastal waters.
    I am concerned about unresolved questions regarding 
survivability of the LCS. I am concerned by projected 
shortfalls of cruisers and destroyers, the backbone of our 
blue-water surface combatant fleet, in out-years of the long-
term shipbuilding program. And I am also concerned that 
projected costs of expensive programs, like the DDG-1000 and 
the Ohio-class submarine, may be unrealistically low.
    Secretary Stackley, for years the Director of Operational 
Testing and Evaluation has raised serious concerns regarding 
survivability of the Littoral Combat Ship and whether the LCS 
meets its level one survivability requirement. Why are LCS full 
ship shock tests not scheduled until fiscal year 2014, when we 
will have already produced 10 or 12 ships, and why would we 
begin full scale production of this ship if there are serious 
outstanding concerns regarding its survivability?
    Secretary Stackley. Yes, sir, let me first begin by 
describing LCSs. LCS 1 and 2 are both designed to a level one 
level of survivability, and all of the analysis and testing to 
date supports the determination that they in fact meet their 
survivability requirements.
    The scheduling of the full ship shock trial on LCS in 2014 
is about right compared to all the other shipbuilding programs. 
In fact, typically in a major shipbuilding program, you don't 
shock the lead ship; you end up shocking one of the first 
follow ships.
    So, for example, the last major shipbuilding program that 
we conducted shock trials on, DDG-51, the first ship to be 
shocked was DDG-53, which wasn't delivered until 2 years after 
the 51, and by the time she was shocked, we had about 20 DDG-
51s under contract and in full rate production.
    The nature of the beast in shipbuilding is that you have 
such a large capital-intense structure that is building these 
ships that you cannot afford to stop construction and wait for 
the lead ship to be built, tested and then get around to the 
full ship shock before you start construction again. So what we 
do is we address, to the extent possible, through analysis and 
surrogate testing and developmental testing, proof out the 
design, so that by the time we get to the shock trial, the risk 
has been retired.
    In fact, if you go back and look at the results from prior 
full ship shock trials, the change activity that is driven into 
those ships' designs is relatively minimal because we have in 
fact spent so much time on the front of end of the design to 
retire that risk. And we see the same case here for LCS.
    Mr. Johnson. Thank you.
    Admiral Blake, naval aviators will tell you that over the 
course of a deployment or a career, engine failures are common 
and twin-engine aircraft can make the difference between 
ditching and saving the aircraft and maybe the life of the 
pilot.
    What steps are you taking to mitigate the risk of single-
engine carrier operations with the Joint Strike Fighter?
    Admiral Blake. Well, first of all, there has been extensive 
testing with respect to the engines, the engine for the Joint 
Strike Fighter, so that the reliability in the single-engine 
aircraft will be able to function and will provide a margin of 
safety to those pilots as they are airborne. So what we have 
done is we have taken the engine itself with the manufacturer 
and gone into a series of scenarios in order to ensure that our 
personnel are in fact safe when they are doing it.
    You are absolutely correct; a multiengine aircraft is, you 
have backup. But what we have essentially done is we have said, 
all right, we are going to look at this engine, and we have had 
single-engine aircraft in the Navy before. In the early 1960s 
we had aircraft, such as the A-4 and the Crusader, the F-8, so 
this is not new to us. We just have to deal with it from a 
reliability perspective and make sure that it meets its goals.
    Mr. Akin. Our last questioner is going to be Mr. Bartlett, 
I believe, a former chairman. The best for last.
    Mr. Bartlett. Thank you, and I apologize for being late, 
but we had an Army modernization hearing that I needed to 
chair, and I came here as soon as I could when that was over.
    In looking at the clips yesterday from the press, I noted a 
comment in one of the articles that wondered in this 
constrained environment, fiscal environment, would we continue 
to choose to spend money on things like the 20th-century 
aircraft carrier, as they noted it.
    This reminded me of a question that I have had about 
technologies and which one will run faster. The carrier, for 
instance, will our ability to defend it, for it to be defended, 
run faster than the ability of an enemy to attack it; witness 
the new Chinese anti-ship missile and the J-20 [ fifth-
generation stealth fighter aircraft], which some have suggested 
may be designed to deliver a wave-skimming, supersonic cruise 
missile.
    Regina Dugan, the new head of DARPA [Defense Advanced 
Research Projects Agency], was in my office the other day, and 
I asked her if they could help with that kind of an analysis. I 
was concerned about the deep strike heavy bomber and whether 
our ability to be stealthy or the ability of the radars to pick 
it up and the air-to-ground defenses to take us out would run 
faster, and we really wouldn't want to have the momentum of the 
past determining the future if that wasn't going to be very 
productive.
    She said, yes, they could do that kind of thing. In fact, 
they had done it. And they were looking at cyber warfare, and 
they noted that the lines of mal-code that the bad guys used 
had not increased through the years, but the lines of code that 
we were using to defend ourselves were increasing 
exponentially. And if we cannot bend that curve, the day will 
come when about all our computer systems will do, can do, will 
be able to defend themselves.
    Now, I am wondering, who in the Navy looks at that kind of 
thing down the road, looks at these technologies and the rate 
at which they will be running? And this will illuminate our 
judgment in what we ought to be building, because it is pretty 
silly to build something now that technology in 20 years from 
now will be able to neutralize. Who does this, and how do we do 
it?
    Secretary Stackley. I will start. Let met first describe 
that there are a couple pieces of this.
    First is threat assessment, in terms of where is the 
threat, and where are they going? So there is a fairly robust 
number of organizations that are trying to project the threat.
    Second is technology. Where is technology? Where is it 
going? So that when we look toward planning, bringing 
capabilities to bear against that threat, that we can target, 
where is the technology? Where is the threat going to be?
    Inside the Department of the Navy--you mentioned Regina 
Dugan from DARPA--the lead organization within the Department 
of the Navy, the Office of Naval Research, is responsible for 
looking out ahead in terms of technology and projecting, what 
are the opportunities in terms of where we can militarize 
technologies to address future threats?
    Separate from that is the requirements process, which I 
think Admiral Blake will describe.
    Admiral Blake. Yes, sir.
    Well, as Mr. Stackley just mentioned to you, we have the 
Office of Naval Research, which works in conjunction with 
DARPA, and then they provide us on the N8 [Deputy CNO 
Integration of Capabilities & Resources] side, which is the 
requirements and the integration piece, where we think we 
should be able to go or look at R&D programs where we think we 
can address and, if you will, get inside a potential opponent's 
OODA [Observe-Orient-Decide-Act] loop.
    You mentioned earlier in the process, earlier in your 
remarks, about in general anti-access. That is one of the areas 
we are particularly concentrating on, but not only in the 
scenario which you described but worldwide, because there is a 
proliferation of systems, not only in the Pacific but 
worldwide, that we have to deal with. And one of the biggest 
issues when we go into that is we have to ensure that we can't 
just look at it in isolation, if you will, in one particular 
area. We have to look across the entire spectrum, and we have 
to deal with it in the places we are likely going to have to 
go.
    So I would say, yes, you have organizations like DARPA. On 
our side of the equation, we have the Office of Naval Research. 
And then what they do is they provide us, we go into 
memorandums of understanding with them in order to be able to 
work on potential technologies in order to meet those 
requirements.
    Mr. Bartlett. Thank you.
    Thank you very much, Mr. Chairman.
    Mr. Akin. Thank you.
    I was cheating just a little bit. I have I think a couple 
of fairly quick questions.
    The first was we had 10 carrier air wings. We have reduced 
them now to nine. Is there any plan, if we are reducing carrier 
air wings, does that suggest that we are not really fully 
committed to the 11-carrier strategy?
    Admiral Blake. No, sir. I think there might be a little 
confusion on that point. When we put together the 2012 budget, 
we reduced one carrier air wing staff and one carrier strike 
group staff. We did not reduce the number of carrier air wings, 
and we did not reduce the number of carriers. So I think that 
is just a confusion point. So we would still have available the 
11 carriers and 10 air wings. But as an efficiency, we take it 
down by one, the staff.
    Mr. Akin. Thank you for clarifying that.
    My other question was sort of a larger view. Our earlier 
panel talked about the CBO had been--they are pretty good at 
estimating what things are going to cost--had been talking 
about the fact they see that the budget we are looking at is 
between $1 billion to $3 billion per year; they feel a little 
too optimistic and that maybe you are suggesting every single 
thing to go right from a cost point of view.
    Do you think you have drawn it pretty close to the line or 
maybe even a little over the line, or do you really have a good 
sense you can bring things in and not be over $1 billion to $3 
billion per year?
    Secretary Stackley. Let me start by, I should first focus 
inside of the FYDP, and the reality is that the closer the 
programs that you are estimating are to real time, the closer 
your estimates will be.
    So we put a lot of attention on to the shipbuilding 
programs that are in hand to ensure that the estimates on those 
programs are appropriate, and then the issue becomes one of 
execution.
    So I could go program by program inside of the FYDP and 
highlight where we feel very strongly in terms of our 
estimates, but similarly, there are areas where we have got 
some risk; one on the execution side, and there is another area 
of risk associated with things that we forecast and then we 
have to wrestle with, for example, escalation.
    So I think Dr. Labs pointed out a difference between CBO's 
estimates and the Navy's estimates; there is a difference in 
terms of how we account for escalation. Well, in the near term, 
that difference is de minimis. But then when you start to look 
over the long term, there is a compounding effect. So that ends 
up being a pretty significant driver in terms of the difference 
between CBO and the Department of the Navy's estimates, simply 
how we account for escalation. And that is less a matter of 
real escalation inside of shipbuilding and more a matter of 
what happens to escalation indices as programs get passed back 
and forth between the Department, OMB [the Office of Management 
and Budget], and Congress.
    When we look out in the long term, there are several risk 
areas that we have to address. We are working hard on 
stability. If you have a lot of fluctuation in your program, 
you are going to drive unnecessary cost increases to the 
programs that we don't budget for and we try to avoid. And then 
with that comes--there is an aspect associated with volume or 
business base.
    So right now we have a shipbuilding industrial base that is 
oversized for the workload coming its way, and one of our 
efforts is to, as best as possible, broadcast to industry, here 
is our plan, and we are going to stay with our plan, so that 
industry can make appropriate efforts to right-size itself so 
it can perform more efficiently within that workload.
    We also have to use every tool in the toolbox, and one that 
I think has been underutilized for some time now is 
competition. That is not just competition at the shipbuilder 
level; that is also competition in the combat systems side of 
the house and then competition down throughout the vendor base, 
where it is possible. And then you always wrestle with the 
volume issue versus the competition issue. So we look for the 
sweet spot.
    So we have put honest effort into, one, we have 
strengthened our cost-estimating team. We have put honest 
effort into estimating inside the FYDP where we are budgeting 
and then also estimating the long term so we can wrestle with 
the issues that are before us in terms of force structure 
versus affordability versus top line.
    But there are risks. And have we gone too far in terms of 
allowing risk to persist inside of our shipbuilding plan? I 
would say, not yet. The Department, frankly, is not satisfied 
with the trends of cost in the shipbuilding program, and so 
what we should not be doing is accommodating those trends of 
increasing costs. What we have got to do is wrestle them to 
ground and reverse those trends.
    So it is not simply a matter of what you forecast in the 
out-years; it is also what are you doing, Department of the 
Navy, to wrestle those trends to the ground and reverse them. 
And there is going to be 1,000 battles ahead to get there from 
here. So we start now.
    Mr. Akin. Thank you, Mr. Secretary.
    I appreciate your being there to fight all those battles as 
well.
    Thank you to our witnesses.
    As you see, we have a pretty dedicated committee here to 
last this long. So there is a lot of interest, and I appreciate 
your help. Thank you.
    [Whereupon, at 5:50 p.m., the subcommittee was adjourned.]
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                            A P P E N D I X

                             March 9, 2011

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              QUESTIONS SUBMITTED BY MEMBERS POST HEARING

                             March 9, 2011

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                   QUESTIONS SUBMITTED BY MR. WITTMAN

    Mr. Wittman. Are we investing enough in our equipment to sustain 
our position as the greatest Naval Force throughout the 21st Century? 
As you all three of you know, our Navy and Marine Corps have conducted 
cyclic combat operations for almost 10 years at a pace that we have not 
seen in the history of our fleet. Ships and aircraft are constantly 
deploying and critical life cycle maintenance is being affected due to 
the high operational tempo. Knowing there is deferred maintenance and a 
backlog of lifecycle management for our fleet, how is the past 10 years 
going to affect the service life of our ships, submarines, and 
aircraft? What is the affect going to be on the service life of an F/A-
18 super hornet that is above its planned airframe and engine flight 
hours, or the DDG that has deployed so many times to support overseas 
contingency operations, that critical hull, mechanical, electrical, and 
weapons systems maintenance is neglected and pushed to the right? What 
do you believe the long term affect is to our overall material 
readiness? Furthermore, do you feel that we are allocating the 
appropriate amount of money to focus on maintenance, modernization, and 
modification?
    Secretary Stackley. Keeping our ships, submarines and aircraft in 
satisfactory material condition is essential both to supporting current 
operations and ensuring that we are able to get the projected service 
life from these valuable national assets. It has been central to the 
United States Navy's mission to perform sufficient levels of 
maintenance in each of these areas to ensure our fleet can ``answer the 
bell'' when called upon. Certainly the last decade of high tempo 
operations have been a challenge and there have been areas where we 
were not able to do all of the maintenance we desired. However, even 
with these challenges, the Navy's ships, submarines and aircraft have 
responded to each call with the speed and efficiency desired from the 
nation's military forces.
    While we desire to do a complete maintenance package on each of our 
platforms every time it is brought in for a maintenance availability, 
there are different levels of repair and modernization required 
depending on the platform involved. In the case of aircraft and 
submarines, the nature of their operations and the inherent dangers in 
their operating environments have lead us to develop a very rigorous 
process to identify deficiencies, develop maintenance solutions and 
perform that maintenance. The same is true for the nuclear power plants 
in our aircraft carriers. Conventionally powered surface ships and non-
nuclear equipment on our aircraft carriers degrade far more gracefully 
and can be recovered in a later availability. As a result, we have 
taken more risk in these areas over the last decade as our operating 
schedules and budgets have been stretched to accommodate the tempo of 
demands placed on these assets.
    We are in the process of assessing the actual condition of our 
ships, submarines and aircraft today. There is no question that the F/
A-18 fleet has been operated much more demandingly than was anticipated 
when they were procured. Since service life for aircraft is a function 
of the number of hours flown, there will be an impact on the Navy's 
ability to operate these aircraft at some point in the future and 
service life extensions may become necessary. On the other hand, the 
procurement of aircraft today and in the future may permit the Navy to 
manage the remaining service lives of these aircraft and get them to 
the end of their service life without taking any extraordinary 
measures.
    Our submarine fleet is already managing its service life margin and 
we see very little likelihood that the operations of the last decade 
will materially impact that force. Our aircraft carriers are undergoing 
regularly scheduled maintenance and their refueling overhauls are 
providing us with a window to do major overhauls to ancillary and 
support equipment to ensure they reach the programmed end of life.
    Surface ships will be our most significant challenge but this is 
not insurmountable. Based on lessons learned from the submarine and 
aircraft carrier maintenance processes, the Surface Maintenance 
Engineering Planning Program (SURFMEPP) activity was established to 
provide the same engineered approach to surface ship maintenance. 
SURFMEPP is in the progress of performing in-depth reviews of surface 
ship maintenance requirements that have significantly improved the 
Navy's understanding of the surface ship maintenance requirement.
    In the end, we must balance current Combatant Commander force 
allocation requirements against sufficient force reserves to surge in 
response to operation/contingency plans. As the maintenance 
requirements for the DDG 51 Class and other surface ships are further 
defined, maintenance and modernization actions will be planned and 
executed to maintain readiness levels and ensure the ships reach their 
expected service life.
    Mr. Wittman. Recently it has been announced that the Navy is 
getting back to the basics with training and maintenance and that 
billets that were on shore, will be transferred back to sea to fill 
critical positions lost to a failed ``optimal manning'' plan. I know 
that changes to manning and training were reactionary to budget cuts 
and desires to move money elsewhere in the force, but I refuse to 
believe that this is just an instant revelation by the U.S. Navy. We 
have known for years that we were ``kicking the can'' on maintenance 
and training while short changing our crews with this ``optimal 
manning'' plan . . . as a result the material condition of our ships 
has suffered. Why are we just now going to General Quarters over this? 
How long is it going to take to get our fleet back on course when it 
comes to conducting effective and thorough maintenance and material 
management (3M) and providing our Sailors the training needed to 
succeed?
    Secretary Stackley. Surface Force readiness suffers from the 
effects of decisions made over the better part of two decades. 
Following troubling INSURV inspection results in 2008, the Navy 
commissioned a Surface Force Readiness Fleet Review Panel. The Panel's 
report, delivered in February 2010, provided a comprehensive review of 
Fleet training, manning, and maintenance practices. Significant 
findings included:

      Surface Ship Class Maintenance Plans (CMPs) had not been 
consistently and centrally managed or updated since Planning, 
Estimating, Repair and Alterations (PERA) Surface was deactivated as 
part of the 1993 BRAC.
      In 1996, the Surface Force reduced CNO availabilities to 
nine weeks to maximize operational availability leaving insufficient 
time to complete required life cycle maintenance.
      Optimally manned ships, a program started in 2001 to 
minimize shipboard manning, are not sufficiently manned to maintain an 
acceptable level of shipboard material readiness, especially in the 
area of corrosion control.
      The number of military personnel assigned to intermediate 
maintenance had been reduced impacting military maintenance training 
opportunity and organic capacity.
      The number of third party assessments, inspections and 
audits had decreased throughout the Surface Force.

    In response to the Panel's findings, the Navy has initiated the 
following actions:

      Established the Surface Ship Life Cycle Maintenance 
Activity in FY10, which was further expanded into the Surface 
Maintenance Engineering Planning Program (SURFMEPP) activity in FY11, 
to provide Navy with the same engineered approach to surface ship 
maintenance that is successfully employed in the submarine and aircraft 
carrier maintenance programs by:

          Documenting all required life cycle maintenance in Class 
        specific Technical Foundation Papers.
          Maintaining CMPs and ship specific long range 
        maintenance schedules (reviews of DDG 51 and LSD 41 CMPs were 
        completed in support of PB12; CG and LHD CMPs are scheduled to 
        be completed before PB13; remaining Surface Ship CMPs are 
        scheduled to be completed before PB14).
          Creating and maintaining a surface ship corrosion 
        tracking database that details the condition of surface ship 
        tanks and voids.
          Preparing maintenance availability work packages that 
        accurately reflect the preservation and corrective maintenance 
        needed.
          Formally monitoring surface ship work deferrals.

      Increased CNO availability durations from nine weeks to 
fifteen weeks (or longer) to allow time to accomplish required life 
cycle maintenance.
      Increased the number of military billets on ships by 
1,105 in FY12 to provide sufficient manning to perform required 
organizational level maintenance.
      Increased the number of military billets at the Regional 
Maintenance Centers by 285 in FY12 to start reversing the loss of 
organic intermediate-level capacity and improve military maintenance 
training.
      Launched pilot programs for Total Ship Readiness 
Assessment beginning in FY11 to establish formal, periodic, total ship 
material assessments to identify ship material conditions in time for 
proper prioritization within upcoming maintenance periods while 
training the Fleet to conduct ``self-assessments''.
      Initiated corrosion control initiatives including:

          Partnered with the American Bureau of Shipping (ABS) to 
        perform a detailed surface ships corrosion survey pilot that 
        used commercial technology and practices during FY10. Extended 
        the pilot to perform surveys on an additional 16 ships in FY11.
          Formed Corrosion Control Assist Teams designed to 
        provide tools and training for ship's force corrosion control 
        starting in FY10.
          Established the Painting Center of Excellence within the 
        Naval Sea Systems Command with responsibility for reviewing 
        commercially available corrosion control technology and 
        developing corrosion control technology and processes focused 
        on Fleet identified needs for longer life coatings and/or 
        reduced installation costs.

    Since FY10 when these corrective actions were first implemented, 
the number of Board of Inspections and Survey assessment failures has 
decreased, and a majority (12 of 19) of the inspected surface ship 
equipment areas are either trending upward or remaining in the green/
satisfactory area. Navy is actively monitoring the performance of the 
above initiatives and the Fleet is trending in the right direction. 
Navy expects to have the Fleet back on course in the next two to three 
years.
    Mr. Wittman. We have talked about investing in the crews and the 
life-cycle maintenance and management of our fleet. I believe you need 
a larger budget to reach your defined goals and set the Navy up for 
success in the 21st century. However, I also believe it is time to 
invest more money in government owned shipyards and modernize them to 
meet the workload of the future. Can I please get your thoughts on 
this?
    Secretary Stackley. The Navy is continuing to sustain, restore and 
modernize the Naval Shipyard infrastructure within today's fiscally 
constrained environment. Naval Shipyard infrastructure includes both 
mission and support facilities. The Navy has focused its investment on 
the Controlled Industrial Area, which primarily involves shops, piers, 
wharfs, and dry-docks. The most critical deficiencies are being 
addressed within the current resourcing profile.
    U.S. Code Title 10, Section 2476 requires that the Navy invest a 
minimum of 6% of the average of the previous three years of 
intermediate and depot maintenance revenue into the shipyard 
recapitalization program. The Navy has provided investments of nearly 
10% in FY08 and FY09 and 15.6% in FY10, and plans to invest another 10% 
in FY11 if the funds are appropriated in a FY 11 appropriations act. 
FY12 investments will likely be greater than the currently reported 
9.6%, based on just-released energy special project information.

    The Navy programmed $168.9M in Sustainment and Restoration and 
Modernization (RM) projects in FY12:

      Puget Sound--$6M Dry Dock Certification
      Puget Sound--$5.5M Dry Dock Certification
      Pearl Harbor--$7.8M Dry Dock Certification
      Pearl Harbor--$37.3M Building Renovation
      Pearl Harbor--$3M Dry Dock Repair
      Pearl Harbor--$7.7M Dry Dock Repair
      Norfolk--$0.8M RM Energy Projects (2)
      Portsmouth--$100M RM Energy Projects (4)

    The following Military Construction (MILCON) projects are 
programmed in FY12:

      Norfolk--$74.9M Controlled Industrial Facility
      Puget Sound--$13.3M Integrated Dry Dock Water Treatment 
Facility

    The following equipment projects ($54M) are planned for FY12:

    [GRAPHIC] [TIFF OMITTED] T5464.087
    
    Mr. Wittman. We currently have 29 amphibious ships. You have stated 
the Commandant and the CNO have determined a force structure 
requirement of 38 and the Dept of the Navy is willing to accept the 
risk of a minimum of 33. My concern is that the mission load and need 
for our amphibious fleet is not going away. I love that we are 
investing heavily in BMD and our surface combatants, but I fear we are 
not taking seriously the demand of what Gen Amos calls, the ``Ford 150s 
of the fleet''. Humanitarian assistance and disaster relief are not 
going away, and we are staring down a path that will see a MEU back in 
the Mediterranean for the foreseeable future. For the past 10 years 6th 
Fleet has been relatively quiet, I fear those days are over. There is a 
legitimate possibility that we will have a MEU supporting 6th Fleet, 
AND a MEU supporting 5th Fleet. Our ability to project power from the 
sea and put Marines on the beach is not going away, so in my mind, 
meeting the minimum number of amphibious ships is not the answer. We 
have invested in the Arleigh Burke, Virginia Class, and LCS class of 
ships . . . the expensive, hi-speed, technologically advance ships, but 
I think it is time to divert more time and attention to our amphibious 
fleet. Can I please get your thoughts on this?
    Secretary Stackley. The 33 Amphibious ships programmatic goal has 
been tested against DoD planning scenarios capturing the demands of the 
most stressful combination of wartime and peace time missions expected 
under our current strategy. The 33 ship amphibious goal meets the 
requirements of two nearly simultaneous regional conflicts.
    The QDR and force structure assessments performed by the Navy show 
that by prioritizing competing demands, the 33 ship amphibious 
programmatic goal can generate operationally available ships to meet 
the world-wide rotational demand or surge demand with acceptable risk. 
This force will support individual war plans or provide two to three 
continuously deployed Amphibious Readiness Group (ARGs) with embarked 
Marine Expeditionary Units (MEUs) to respond rapidly around the world, 
and two additional ARG/MEUs ready to surge when needed.
    The Navy and Marine Corps are continuously evaluating amphibious 
lift capabilities to meet current and projected requirements. The 
enduring challenge is to provide sufficient capacity in the Assault 
Echelon to lift the MEB's ground equipment and to accommodate the 
capacity of an Aviation Combat Element with MV-22 and JSF. CNO and CMC 
have determined that the force structure required to support a 2.0 MEB 
AE lift is 38 total amphibious assault ships. The 38 ship requirement 
was communicated to the four chairmen of the Appropriations and Armed 
Services committees by SECNAV/CNO/CMC letter dated 7 Jan 2009. Given 
fiscal constraints, DoN will sustain a minimum of 33 total amphibious 
ships. The long range shipbuilding plan meets the 33 ship force level 
by FY 2017.
    Mr. Wittman. Do you feel that that approximately $15.8 billion per 
year in FY11 dollars for the next 10 years is enough to sustain a 30 
year shipbuilding plan with a goal of maintaining 313 battle force 
ships? We have an aging Oliver Hazard Perry Class that accounts for 29 
Frigates and over 40 LA Class submarines that are past their halfway 
point of planned commissioned service (6 are currently at, or over 30 
years of service). Most, with the exception of some of the LA Class, 
will decommission 10 years from now. Is the plan for 313 battle force 
ships a realistic number and do we have the ability to reach this 
number when taking in to account the planned budget to reach that goal?
    Admiral Blake. Yes. The requirement of 313 ships remains the floor. 
The funding in place supports the Navy plan of reaching that level 
within the next 10 years.
    The Fiscal Year (FY) 2011 Shipbuilding Plan included funding for 
the ballistic missile submarine recapitalization from within its 
anticipated Total Obligation Authority. During the years in which the 
new submarine is being procured, the procurement of other ship types 
will be reduced resulting in force level and industrial base impacts. 
This plan will achieve a peak battle force inventory of 325 ships in FY 
2022, after which the force level drops as legacy cruisers, destroyers, 
submarines and amphibious ships retire, averaging about 308 ships 
between FY 2022 and FY 2041. While the threats, demands, and mission 
requirements for the far-term planning period (FY 2032 to FY 2041) are 
not well understood, the Navy will continue to consider mitigation 
strategies for these anticipated shortfalls in future plans.
    The Navy must strike a balance between investing in new, more 
capable ships for meeting current and future requirements and 
maintaining ships to their expected service life. The Navy has made a 
conscious decision to deactivate older, less capable ships that have 
become increasingly expensive to maintain and operate in order to 
support those investments in our future Fleet.
    In the near-term, delay of the FY 2011 budget has directly impacted 
maintenance, modernization and new construction of ships, which produce 
greater delays in reaching the 313 ship battle force floor.
    Mr. Wittman. Can you please talk about the two year probationary 
period that has been placed on the F-35B and how that is going to 
affect the Marine Corps Strike Fighter shortfall? If the F-35B 
struggles through test and evaluation, is there a backup plan to 
mitigate the risk of the F-35B being delayed in delivery to the USMC 
(will the USMC SLEP the AV-8 Harrier to sustain a STOVL capability or 
possibly invest in the F/A-18 E/F Super Hornet?) How would any further 
delay in this program impact the USMC amphibious lift requirements and 
future planning and design for large deck amphibious ships?
    General Flynn. The F-35B STOVL Joint Strike Fighter remains the 
tactical aircraft we need to support our Marine Air Ground Task Forces. 
Our requirement for expeditionary tactical aircraft has been 
demonstrated repeatedly since the inception of Marine aviation and as 
currently being demonstrated in Libya today.
    Slowing down the production rate of the F-35B to allow for 
responsible fixes to be designed and incorporated was prudent in light 
of the progress the Joint Strike Fighter program has made to date. The 
slower rate of production slows down our rate of transition. Currently 
we are successfully managing our strike-fighter aircraft inventory to 
meet our operational commitments. We are confident we will be able to 
continue to manage our legacy aircraft appropriately with a variety of 
service life management initiatives until the F-35B is fielded.
    On 14 March the Secretary of the Navy, Chief of Naval Operations, 
and the Commandant of the Marine Corps signed an agreement to 
redistribute the F-35C procurement within the FYDP to take the most 
efficient path available to optimize the department's Carrier Strike 
capability. The earlier than anticipated procurement of the F-35C 
allows the Marine Corps to simultaneously meet its enduring commitment 
to carrier Tactical Aircraft Integration and continue our measured 
transition to a 5th generation expeditionary capability while partially 
offsetting the delay in F-35B procurement.
    A Service Life Extension Program (SLEP) similar to the F/A-18 
requirement will not be required for the AV-8B due to the unique design 
and composition of components that normally exhibit fatigue over the 
service life of an aircraft. The F/A-18E/F though a perfect near term 
fit for the Carrier Strike mission set it is a less than optimum match 
for the expeditionary nature of Marine Corps operations. Essentially 
the F/A-18E/F is about two-thirds the capability and service life of an 
F-35 at three-fourths of the cost. Future threat and operational 
environments requires a 5th generation strike-fighter with the 
strategic longevity to avoid substantial F/A-18E/F SLEP costs for an 
increase from 6000 to 9000 hours and the extensive technological 
upgrades required for survivability.
    The potential for further delays do not effect amphibious lift 
requirements or designs of large deck amphibious ships, simply because 
conventional carrier aircraft are not compatible due to requirements 
for arresting gear and catapults that cannot be incorporated on lighter 
amphibious ships without incurring a major expeditionary operational 
capability shortfall by limiting amphibious troop and equipment lift to 
accommodate the additional ship infrastructure required for carrier 
operations.
    Mr. Wittman. Has significant testing been done with regard to the 
F-35B STOVL taking off and landing from the deck of an amphibious ship? 
If not, when do you predict that testing will take place? Do we know if 
the thrust and heat produced from the engine of the F-35B will have a 
negative effect on the steel flight deck and I-beam support of the 
deck...meaning will the deck buckle or become unstable over time?
    General Flynn. The F-35B test program has made substantial progress 
during CY 2011 to date and is on track for the first Developmental Test 
Ship Trials scheduled in October through November 2011. The 
environmental effects of the engine will be fully assessed during this 
period. After 3 years of focused analysis and preliminary tests in 
preparation for this event indicate no significant damage or 
degradation is expected. The USS Wasp has been dedicated for this test 
and instrumented to assess the flight deck, substructure, and ancillary 
deck systems. The Marine Corps along with NAVSEA, NAVAIR, and the Joint 
Program Office has collaborated extensively to ensure F-35B L Class 
operations are tested fully and representative of normal operations.
                                 ______
                                 
                   QUESTIONS SUBMITTED BY MR. COFFMAN

    Mr. Coffman. We often speak about the strategic necessity of 
maintaining amphibious force projection capabilities. To provide clear 
guidance on strategic requirements, Congress mandates the number of 
operational aircraft carriers and submarines that the Navy is required 
to maintain. What are your thoughts on Congress also mandating the 
number of operational amphibious ships the Navy is required to 
maintain?
    Secretary Stackley. I do not believe mandating the number of 
operational amphibious ships the Navy is required to maintain is 
necessary or desirable as it would affect the flexibility and force 
structure decision-making going forward that the Navy and Marine Corps 
share in providing a capable, adaptable, amphibious force. The Navy and 
Marine Corps continuously evaluate amphibious lift capabilities to meet 
current and projected requirements. Specifically:
    In the January 2009 Report to Congress on Naval Amphibious Force 
Structure, the Chief of Naval Operations and the Commandant of the 
Marine Corps reaffirmed that 38 amphibious ships are required to lift 
the Assault Echelon (AE) of 2.0 Marine Expeditionary Brigades (MEBs). 
They agreed to sustain, resources permitting, an amphibious force of 
about 33 total amphibious ships in the AE, evenly balanced at 11 
aviation-capable ships, 11 LPD 17 Class ships, and 11 LSD 41 Class 
ships. The 33 ship force accepts risk in the arrival of combat support 
and combat service support elements of the MEB but has been judged to 
be adequate in meeting the needs of all parties within the limits of 
today's fiscal realities.
    The recently completed Report of the 2010 Marine Corps Force 
Structure Review of March 14, 2011 concluded that: ``The dual demands 
of sustained forward presence and sufficient lift for the assault 
echelons of two Marine Expeditionary Brigades (MEB) result in a 
requirement of 38 amphibious ships. Given fiscal constraints, however, 
the Navy and Marine Corps have agreed to accept the risk with 33 ships, 
increasing the imperative to design a lean and effective force 
structure. We will also explore options for employing Marines from a 
wider variety of Navy ships, seeking innovative naval solutions to GCC 
requirements.''
    In addition to the Department of the Navy's internal reviews, the 
Quadrennial Defense Review Report of February 2010 determined that the 
main elements of the Navy force structure should include 29--31 
amphibious warfare ships for the duration of the Future Years Defense 
Plan (FYDP) (FY 2011--FY 2015).
    Mr. Coffman. We often speak about our shipbuilding plan building 
towards a minimum of 313 battle force ships. I am concerned about 
certain assumptions being made about the long-term affordability of the 
shipbuilding plan. The FY 2012-2016 plan seems affordable and 
sustainable, but the production of the relatively inexpensive Littoral 
Combat Ships and Joint High Speed Vessels is overrepresented during 
this period, relative to the long-term force structure goals. How will 
you address cost growth in the near future when we are producing less 
Littoral Combat Ships and more next-generation Ballistic Missile 
Submarines (SSBN-X)? Additionally, there is reporting based on early 
Navy testing that the LCS program is plagued by sever survivability 
problems. What is the extent of this problem and how much will it 
increase the unit cost of each variant of LCS?
    Secretary Stackley. We continue to look for affordability and 
efficiency opportunities as we go forward with the shipbuilding plan, 
such as revising the acquisition strategy for the Littoral Combat Ship 
(LCS) to maximize the advantage of the competitive pricing. 
Additionally, prior to Milestone A approval for the OHIO Replacement 
submarine, numerous capability trades were evaluated to reduce costs. 
As a result, the Navy made trades in the number of ballistic missile 
tubes, the diameter of those tubes, the number of torpedoes to be 
carried, acoustic sensors, and other defensive features throughout the 
design. These trades made the submarine more affordable while 
maintaining the necessary level of capability, resulting in a reduction 
of the projected cost from $7 billion to a current estimate of $5.6 
billion for follow on hulls 2 through 12 (FY 2010$). However, we need 
to go further in our efforts to drive cost out of this critical 
program, and so we have established a ``Design for Affordability'' 
program to facilitate continued focus on cost through the design phase. 
We have established a target price of $4.9 billion for follow on hulls, 
to be achieved through this effort.
    Both USS FREEDOM (LCS 1) and USS INDEPENDENCE (LCS 2) meet the LCS 
survivability requirements outlined in the Capability Development 
Document (CDD) that are consistent with the LCS operational concept. 
Navy is working with the operational test community to ensure the LCS 
CDD requirements are fully evaluated and validated in an operationally 
realistic environment. Navy does not anticipate increased unit costs to 
address survivability as both variants meet the stated requirement.
                                 ______
                                 
                    QUESTIONS SUBMITTED BY MR. SMITH

    Mr. Smith. What is the Navy's position with respect to the value of 
the mission performed by tug boats? Has the Navy developed a long-term 
plan for the use of tug boats in the execution of the overall mission 
of the Navy? If so, what is that plan? Would you support an expanded 
role for tug boats in the mission of the Navy?
    Secretary Stackley and Admiral Blake. The Navy highly values the 
utility of tug boats and their mission in support of ship movements. 
Our long-term plan is to continue to maintain Large Harbor Tug Boats 
(YTBs) and Harbor Tug Boats (YTs) in Yokosuka, the Pacific Northwest, 
Guantanamo Bay, and Portsmouth, N.H., as part of the current mix of 
commercial and Navy-owned tug boats that support harbor operations and 
ship movements. Currently, the Navy does not anticipate a requirement 
for expansion of the current Navy-owned tug inventory and existing 
commercial support.
    Mr. Smith. What is the total requirement for tug boats and what are 
the Navy's plans with respect to meeting this requirement? Based on 
information submitted with the fiscal year 2012 budget request, the 
Navy does not plan to purchase additional tug boats until fiscal year 
2016. Is that true? During fiscal years 2006-2009, the Navy has 
purchased at least one tug boat per year, with delivery of the last 
boat scheduled March 2012--what is the rationale for not purchasing at 
least one tug boat in fiscal year 2012 and the out-years? The last tug 
boat construction contract was awarded in October 2010 and the next 
planned construction award would, at best, be sometime in 2016. What is 
the rationale for this 6-year gap in production? Do you anticipate that 
such a gap in production will negatively impact the tug boat industrial 
base and increase the total cost of the program due to work stoppage at 
the construction site?
    Secretary Stackley and Admiral Blake. The Navy's total requirement 
for tug boats is met through a combination of Navy-owned Large Harbor 
Tug Boats (YTBs) and Harbor Tug Boats (YTs) in addition to commercial 
tug services. The Navy owns and operates 15 YTBs and 5 YTs. Procurement 
and recapitalization efforts for the Navy's YTB inventory included four 
new replacement tug boats during Fiscal Years (FYs) 2007-2008. Two 
additional tug boats were budgeted for FY 2009 which resulted in the 
October 2010 contract award. This effectively equates to one tug boat 
per year from 2007 through 2012. The next year Navy currently plans to 
purchase tug boats is 2016.
    The Navy does not anticipate that this production gap will have a 
significant impact to the tug boat industrial base. Navy procurement 
typically represents less than 5% of overall tug boat purchases. At 
this percentage, the Navy does not anticipate that this production gap 
will significantly increase the total cost of tug boats.
    Mr. Smith. The Committee understands that the Government of Iraq 
has approached the US Navy regarding the opportunity to purchase tug 
boats for use in harbor and shoreline security. Is this true? If so, 
what is the status of the inquiry made by the Government of Iraq? What 
other nations, if any, have expressed an interest in purchasing 
American-made tug boats? Do you believe that the type of tug boat 
constructed for the US Navy would be of benefit to other navies around 
the world? Is it the intention of the Navy to use existing acquisition 
mechanisms (foreign military sales/foreign military financing) to 
procure the tug boats for the Government of Iraq? If not, what is the 
acquisition mechanism that the Navy intends to use?
    Secretary Stackley and Admiral Blake. The U.S. Navy was tasked with 
assessing the U.S. industrial base to identify potential sources 
capable of meeting the requirements of the Ministry of Interior (Iraq) 
for the procurement of two 27--31m Tug Boats. A Request for Information 
(RFI) was released via FedBizOps on April 5, 2010 with a closing date 
of April 20, 2010. Based on the results, the Navy determined that U.S. 
industry was able to build a tug that would meet Iraqi requirements.
    The results of the RFI were presented to the Ministry of Interior 
(Iraq) and in October 2010, the Navy began to develop a Foreign 
Military Sales (FMS) case to meet the Iraqi Tug Boat requirements. The 
FMS case, if accepted, would be financed using Iraq national funds. The 
FMS case was offered in December 2010 and has not been accepted by Iraq 
to date. If the case is implemented, Navy will develop an acquisition 
strategy to meet the requirements of the Iraqi Ministry of the 
Interior.
    Currently, there are no requests from other nations for the 
procurement of new tugs. In January 2011, the Navy delivered the second 
tug of the two boat procurement to the nation of Kuwait. The two 19m 
tugs were built by Rozema Boat Works of Mount Vernon, Washington.
    Mr. Smith. The Navy has been the most forward leaning service when 
it comes to green energy initiatives. In particular, there have been 
significant efforts focused on ``greening'' the fleet with an internal 
Navy goal to convert 50 percent of its energy to fossil fuel 
alternatives by 2020. As yard tugs are a critical component to the 
fleet, particularly in areas of heavy naval vessel traffic, the 
Committee is interested the efforts underway to acquire hybrid tugs or 
other alternative fueled tugs as a means to help reach this goal? For 
example, in a place like Guam, where the number of US personnel is 
increasing significantly and there are multiple projects underway to 
``green'' the base, it would appear to be a natural fit for the home-
porting of hybrid ships. Does the Navy have any plans to add hybrid 
ships, particularly tugs, to the Fleet? If so, what is the timeframe by 
which they intend to acquire them?
    Secretary Stackley and Admiral Blake. There are no efforts underway 
to acquire hybrid harbor tugs or other alternative fueled harbor tugs.
    Decisions to home-port additional ships in Guam have not been made.
    Navy has two Hybrid Electric Drive systems for surface ships: the 
USS MAKIN ISLAND (LHD 8) Auxiliary Propulsion System (APS), already 
deployed and incorporated into the new LHA 6 Class design, and the DDG 
51 Electric Propulsion System (EPS), currently in proof-of-concept 
phase. Many Navy auxiliary force ships operated by Military Sealift 
Command use full Integrated Electric Drives with the most recent 
examples being the T-AKE class ships built by NASSCO and the T-AGS 66 
and T-AGM 25 being built at VT Halter. Similar green technologies, such 
as energy storage and Propulsion Derived Ship Service (PDSS) power are 
also under development. Lastly, the Navy is testing biofuels as an 
alternative to petroleum that will serve as drop-in replacements for 
existing fuels.
    With the implementation of Hybrid Electric Drive (HED) systems, the 
Navy is executing a key component of the Navy Secretariat's ``Great 
Green Fleet'' energy goals, as well as demonstrating quantifiable 
operational energy efficiencies.
    Mr. Smith. The USMC LAV Program Manager met with HASC staff in 
January 2010 and reported significant benefits associated with side and 
wheel-well armor kits added to the USMC fleet of LAV's. These kits were 
developed by Armatec and installed at the Barstow and Albany USMC 
Depots. The Committee was informed that these kits added needed 
survivability to the LAV's, while also extending LAV service life. The 
HASC also understands that several allied countries are incorporating, 
into their vehicle fleets, additional technologies developed by this 
company such as Mine Blast Floor and Underbelly Protection Kits, Roof 
Mounted Blast Attenuating Seats, and Armored Fuel Tanks. Are there 
plans to evaluate the technologies from recent LAV survivability 
upgrades for possible use in upgrade programs for the AAV or HUMMWV 
fleets?
    General Flynn. Yes. CD&I manages the capabilities included in the 
Ground Combat and Tactical Vehicle Strategy as a portfolio. AAV will 
benefit from the lessons learned from LAV and all other USMC vehicles 
in the portfolio, plus some Army vehicles such as the Bradley with its 
Urban Survival Kit and Stryker with its new Double Vee Hull. CD&I is 
actively connected to relevant intelligence from the National Ground 
Intelligence Center and the Marine Corps Intelligence Activity, and it 
communicates with protection experts from Army Research Labs and TARDEC 
to stay current on best practices with respect to Force Protection and 
Survivability.
    The AAV SLEP initiative is planned to improve protection against 
roadside and underbelly IEDs through a host of upgrades, including 
moving the fuel tank outboard or protecting it from catastrophic 
rupture, integrating IED jamming technology, improving fire 
suppression, adding internal and/or external belly protection, 
improving the fragment resistance of the sidewalls, integrating blast 
protected seats that are wall- or roof-mounted, while maintaining 
current water and land mobility capabilities.
    Analyses are ongoing to underpin AAV protection requirements, and 
to ensure these requirements are balanced against others such as swim 
capability, land mobility, etc. For instance, CD&I, PM AAVS, and MCOTEA 
are assessing the feasibility of protecting the occupants of the AAV 
during underbelly attacks through a deliberate study performed by Army 
Research Labs. In this study, ARL is estimating the potential benefit 
afforded by all-external applique, all-internal applique, and some 
combination of the two, using 3D modeling and simulation. Given that 
AAV has more strict swim mobility requirements than LAV, more attention 
is being paid to the second order effects of adding heavy protection to 
the belly of the AAV. CD&I anticipates leveraging Government (Naval 
Surface Warfare Center) and academia (Stevens Institute of Technology) 
to assess the effects of heavy upgrades on swim performance, and Nevada 
Automotive Test Center to assess the effects on land mobility, 
reliability, and ride quality. In addition, PM AAVS is participating in 
blast testing against the baseline/legacy AAVP7 starting this month 
(April 2011) at Aberdeen Proving Ground. This baseline data will be 
crucial for understanding where effective improvements can be made 
within cost and schedule constraints.
    Likewise, future HMMWV upgrade initiatives will benefit from the 
lessons learned from past initiatives, to include recent LAV upgrades, 
experimentation on the SCTVC (also known as ``Capsule''), ongoing 
experimentation on DARPA's Blast Mitigation System (also known as 
Structural Blast Channel or Chimney), plus the ongoing technical 
development of the new-start Joint Light Tactical Vehicle systems. The 
USMC is actively pursuing better protection for a portion of the HMMWV 
fleet, and ancitipates a recapitalization initiative that will likely 
replace older cabs with more protected ones, while improving off-road 
mobility in order to expand maneuver space, within established cost and 
transportability constraints. Knowing that protected mobility for the 
light fleet is an extremely difficult task within the USMC's unique 
transportability requirements, it will continue to leverage the 
experience of Science and Technology activities such as the Office of 
Naval Research and DARPA, from Industry through our Materiel Developers 
at Marine Corps Systems Command, and from Research and Development 
Activities such as TARDEC and ARL, to ensure a balanced and effective 
set of capabilities is fielded.

                                  
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