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




                         [H.A.S.C. No. 112-77]
 
     UPDATE ON KC-46A AND LEGACY AERIAL REFUELING AIRCRAFT PROGRAMS

                               __________

                                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

                            OCTOBER 13, 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:

Thursday, October 13, 2011, Update on KC-46A and Legacy Aerial 
  Refueling Aircraft Programs....................................     1

Appendix:

Thursday, October 13, 2011.......................................    17
                              ----------                              

                       THURSDAY, OCTOBER 13, 2011
     UPDATE ON KC-46A AND LEGACY AERIAL REFUELING AIRCRAFT PROGRAMS
              STATEMENTS PRESENTED BY MEMBERS OF CONGRESS

Akin, Hon. W. Todd, a Representative from Missouri, Chairman, 
  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

Van Buren, David M., Air Force Service Acquisition Executive; Maj 
  Gen Bruce Litchfield, USAF, Special Assistant to Commander, Air 
  Force Materiel Command; Maj Gen (Select) Christopher C. Bogdan, 
  USAF, Program Executive Officer, KC-46 Tanker Modernization 
  Directorate; and Shay Assad, Director, Defense Procurement, 
  Acquisition, Policy and Strategic Sourcing, Under Secretary of 
  Defense for Acquisition, Technology, and Logistics (USD AT&L)..     3

                                APPENDIX

Prepared Statements:

    Akin, Hon. W. Todd...........................................    21
    McIntyre, Hon. Mike..........................................    23
    Van Buren, David M., joint with Maj Gen Bruce Litchfield, Maj 
      Gen (Select) Christopher C. Bogdan, and Shay Assad.........    24

Documents Submitted for the Record:

    [There were no Documents submitted.]

Witness Responses to Questions Asked During the Hearing:

    Mr. Bartlett.................................................    43
    Mr. Courtney.................................................    43
    Mr. Critz....................................................    44

Questions Submitted by Members Post Hearing:

    Mr. Palazzo..................................................    49
     UPDATE ON KC-46A AND LEGACY AERIAL REFUELING AIRCRAFT PROGRAMS

                              ----------                              

                  House of Representatives,
                       Committee on Armed Services,
            Subcommittee on Seapower and Projection Forces,
                        Washington, DC, Thursday, October 13, 2011.
    The subcommittee met, pursuant to call, at 1:03 p.m. in 
room 2212, Rayburn House Office Building, Hon. W. Todd Akin 
(chairman of the subcommittee) presiding.

 OPENING STATEMENT OF HON. W. TODD AKIN, A REPRESENTATIVE FROM 
  MISSOURI, CHAIRMAN, SUBCOMMITTEE ON SEAPOWER AND PROJECTION 
                             FORCES

    Mr. Akin. The hearing will come to order and if it is all 
right with people, I am going to start it with a prayer.
    Heavenly Father, we thank you for this day, for a free 
country. We ask your blessings on our deliberation, our 
leadership. Watch over our people who serve us overseas, the 
people in uniform. And I pray in Jesus' name, amen.
    Okay. We have got the Air Force tanker hearing. I have got 
some fairly brief opening remarks. I believe the ranking member 
has some remarks. I hope they are brief. And we are talking 
about potentially a vote at like 1:30, or something like that. 
So we are going to try and roll the best we can and then pop 
back in.
    So we are going to be hearing testimony from the Department 
of Defense acquisition officials regarding the Air Force's new 
tanker program, the KC-46, and to receive an update on current 
tanker aircraft, KC-135 and the KC-10. We intend to provide 
sufficient, but not overly burdensome oversight, of this 
program, and hope that this will go into the record books as an 
acquisition model of success.
    Today we have with us Mr. Shay Assad. He is the Director of 
Defense Acquisition Policy and Strategic Sourcing. We have Dave 
Van Buren, the Air Force's Service Acquisition Executive. Major 
General Bruce Litchfield, Special Assistant to the Commander of 
the Air Force Materiel Command. And Major General (Select) 
Chris Bogdan, a Program Executive Officer for the KC-46 
program.
    Thank you all, gentlemen.
    During the hearing, we hope to gain a better understanding 
of the KC-46 program, the program risks that have been 
identified, and the oversight mechanisms in place to keep the 
program on track. And we will appreciate the need for this new 
tanker as we hear testimony regarding our aging, but still 
capable, fleet of legacy tankers, and the dedicated airmen that 
keep them flying.
    Finally, we would like to gain an understanding of the KC-
46 program impacts as budget deliberations for the future 
continue to take center stage and remain uncertain.
    With that, I turn to the ranking member of the 
subcommittee, Mr. McIntyre, for any comments that you would 
like to make, sir.
    [The prepared statement of Mr. Akin can be found in the 
Appendix on page 21.]

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

    Mr. McIntyre. Thank you, Mr. Chairman.
    I would like to also thank the witnesses for appearing 
today.
    The Air Force has waited too long, unfortunately, for a 
replacement for the KC-135, when we think about it being an 
aircraft with an average age of nearly 50 years.
    In our current environment of constrained budgets, it is 
absolutely critical we get the KC-46 acquisition process on a 
stable track and on a schedule that is realistic and will not 
lead to costly delays. The Air Force recently completed an 
integrated baseline review, and I am interested in hearing from 
the witnesses about any risks that were identified in that 
process.
    Recent press reports have estimated the KC-46 program will 
experience cost overruns of more than $300 million. We need to 
clear that up.
    I would like us to better understand today how much of 
these overruns the Government would be liable for, and what 
measures are being taken to prevent any further cost overruns. 
If you will please address that.
    As we wait for the KC-46 to come online, I am concerned 
with the viability of our current legacy aerial refueling 
fleet. Their in-theater demand, as you well know, remains high. 
It appears that trend will continue in the near term.
    I look forward to hearing from the witnesses on the 
condition of our current legacy fleet, and if you would please 
discuss their ability and capacity to meet the increased 
theater demand.
    We all know and are very aware of the fiscal constraints 
that DOD [Department of Defense] is currently facing, and our 
full committee was hearing from the Secretary of Defense about 
that this morning in testimony. To the extent possible, it is 
important that we hear from you, our panel before us right now, 
what potential impacts you believe the Budget Control Act and 
possible concerns about it will have on the overall aerial 
refueling mission.
    Thank you for your service to our country. Thank you, Mr. 
Chairman, for your prayer. Thank you for holding this important 
hearing today.
    I yield back.
    [The prepared statement of Mr. McIntyre can be found in the 
Appendix on page 23.]
    Mr. Akin. Thank you.
    And I believe we are going to have just two opening 
statements; is that correct? I think David Van Buren, the 
Acquisition Executive, first; is that correct? And then also, 
then General Litchfield is going to talk a little bit about 
where we are legacy-wise, and that sets up, of course, where we 
want to be going.
    So David, it is good for me to put kind of a face on a 
name. I understand, I think of you as the parallel to Mr. 
Stackley, who does a good job, and I am sure you do very well, 
as well. So we would like to hear your testimony, sir.

STATEMENT OF DAVID M. VAN BUREN, AIR FORCE SERVICE ACQUISITION 
EXECUTIVE; MAJ GEN BRUCE LITCHFIELD, USAF, SPECIAL ASSISTANT TO 
    COMMANDER, AIR FORCE MATERIEL COMMAND; MAJ GEN (SELECT) 
 CHRISTOPHER C. BOGDAN, USAF, PROGRAM EXECUTIVE OFFICER, KC-46 
  TANKER MODERNIZATION DIRECTORATE; AND SHAY ASSAD, DIRECTOR, 
    DEFENSE PROCUREMENT, ACQUISITION, POLICY AND STRATEGIC 
     SOURCING, UNDER SECRETARY OF DEFENSE FOR ACQUISITION, 
              TECHNOLOGY, AND LOGISTICS (USD AT&L)

STATEMENT OF DAVID M. VAN BUREN, AIR FORCE SERVICE ACQUISITION 
                           EXECUTIVE

    Mr. Van Buren. Thank you, Mr. Chairman.
    Chairman Akin, Ranking Member McIntyre, and distinguished 
members of the subcommittee, thank you for the opportunity to 
address this committee with an update on the status of our KC-
135 and KC-10 fleets, and how the KC-46 program is progressing 
now almost 8 months after contract award.
    The capitalizing of the tanker fleet remains the Air 
Force's acquisition priority. The Air Force awarded the Boeing 
Company an engineering, manufacturing and development contract 
for the KC-46 on February 24, 2011. Since contract award, the 
KC-46 team has worked with Boeing, the Federal Aviation 
Administration and many Department of Defense stakeholders to 
complete a comprehensive review of the KC-46 program.
    We have baselined the cost schedule and technical 
performance and risks of the program. As we work toward the low 
rate initial production decision scheduled for late fiscal year 
2015, we are confident that we can maintain the cost and 
schedule of this program, while mitigating the identified 
risks.
    The Air Force remains mindful of our Nation's budgetary 
challenges and fiscal constraints. This environment requires 
that we balance our capabilities between current combat 
operations and the need to address emerging threats and future 
challenges.
    We seek cost-effective systems that leverage existing 
capabilities and maximize interoperability and integration of 
legacy and future systems.
    At this point in the development program, I am pleased both 
on the performance of the Air Force program office led by 
General Bogden, the PEO [Program Executive Officer], and by the 
program execution of the Boeing Company. I understand this 
subcommittee is looking for how potential sequestration will 
affect the tanker program.
    As Congress implements the Budget Control Act of 2011, 
impacts to Air Force capabilities must be considered. Any 
reductions imposed by sequestration rules would deeply affect 
the Air Force's ability to perform its missions.
    At this point, however, it is too early to determine the 
specific impacts to aerial refueling programs, because such 
cuts would require the Air Force to rebalance its entire 
portfolio programs. However, we do know that any mandated 
significant cuts to KC-46 program would have grave consequences 
for the program. Likewise fully funding the KC-46 program under 
sequestration would be at the expense of other programs.
    We are committed to fielding the KC-X--KC-46 on time and on 
budget so the warfighter is properly supported in the future. 
In the meantime, the Air Force will continue to address new 
capabilities and upgrades needed for the legacy KC-135 and KC-
10 tanker fleets to meet future air space mandates and emerging 
technologies, resolve critical obsolescence and diminishing 
resource issues, and maintain operational relevancy.
    I appreciate the subcommittee's continued support for our 
Air Force tanker programs and we look forward to answering any 
questions you may have.
    Thank you, Mr. Chairman.
    [The joint prepared statement of Mr. Van Buren, General 
Litchfield, General Bogdan, and Mr. Assad can be found in the 
Appendix on page 24.]
    Mr. Akin. Thank you for your testimony, David.
    And then, General Litchfield.

STATEMENT OF MAJ GEN BRUCE LITCHFIELD, USAF, SPECIAL ASSISTANT 
            TO COMMANDER, AIR FORCE MATERIEL COMMAND

    General Litchfield. Thank you, Chairman Akin, Ranking 
Member McIntyre, and distinguished members of the subcommittee. 
I am pleased to be here to cover the status of our KC-135 and 
KC-10 fleets.
    The Air Force tanker fleet remains the backbone of the 
Department of Defense's global power projection and global 
reach capabilities. This venerable fleet consists of 414 KC-
135s and 59 KC-10 aircraft.
    Executing the Tanker Modernization Plan will require 
sustaining the KC-135s to an average age of over 80 years and 
KC-10s past an average age of 54.
    As such, both airframes will be in uncharted territory in 
terms of structural and systems issues attributed to age, 
obsolescence and diminishing manufacturing sources. We should 
expect keeping a fleet this long will result in greater demands 
on our airmen, higher sustainment costs and challenges to 
aircraft availability.
    The tanker fleet is in high demand as we execute operations 
across the globe and across the full spectrum of military 
operations. Because of this demand, the Air Force is executing 
a set of multistage initiatives to keep these aircraft viable 
and relevant through a combination of sustainment and 
modification efforts.
    KC-135 aircraft availability and mission capability rates 
have remained relatively steady over the last several years 
with aircraft availability near 65 percent and mission-capable 
rates near 80. For the KC-10, the aircraft availability and 
mission-capable rates are 65 percent and 79 percent, 
respectively.
    Our dedicated airmen around the world work hard every day 
to generate mission-ready aircraft. To sustain long-term fleet 
health, the tanker fleet receives routine depot maintenance and 
undergoes system modifications to address structural, systems 
and obsolescence concerns.
    We are currently executing several initiatives to keep our 
tankers in compliance with today's Federal aviation standards. 
These include modernizing air traffic management and friend-or-
foe identification systems, as well as remanufacturing obsolete 
parts.
    Even with all the maintenance activities, sustainment 
actions and planned modifications, the preponderance of our 
legacy tanker fleet remains--retains the inherent design 
concepts birthed in the 1950s. With the planned service life of 
the KC-135s and the KC-10, the challenges of sustaining these 
aging weapon systems will rise until the KC-46 comes online. In 
the meantime, we will continue to execute our long-term 
sustainment plan for our legacy fleet to ensure we meet our 
Nation's aerial refueling needs.
    I appreciate the subcommittee's continued support for our 
Air Force tanker programs. Again, thank you for the opportunity 
to appear before you to discuss this critical Air Force 
mission, and I look forward to answering your questions.
    Mr. Akin. Thank you very much, General.
    I have a couple. First of all just on the--the intro, Mr. 
Van Buren. What are we looking at until we build the first 
aircraft? There is a series of steps. You are going to assemble 
an aircraft. We are going to be flying it, doing some testing 
on it. And then we expect maybe the first aircraft will be 
coming off of the line. What are the sort of dates timewise 
that you are looking at there?
    Mr. Van Buren. Well, the contract that we currently have 
runs through 2016 for EMD [Engineering and Manufacturing 
Development]. We will have a preliminary design review in 2012, 
critical design review in 2013, build the aircraft, first 
flight of the 767-2C in 2014. And----
    Mr. Akin. So the first flight is 2014. Okay. And then?
    Mr. Van Buren. Roughly 3 years from contract award. And 
then we will have the full-up KC-46 first flight at the end of 
2014.
    And General Bogdan, any other details with regard to our 
contract that you may want to add?
    General Bogdan. Yes, sir. Thank you.
    Congressman, the only thing I would add to that is one of 
the unique aspects of the way Boeing is actually designing and 
developing the airplane is to blend both their commercial best 
practices and our defense best practices to design the 
airplane.
    And one of the manifestations of that is the Boeing team is 
50 percent from their commercial side of their business, and 50 
percent from their defense side. And as they walk through the 
design of the airplane, they are using both the review process 
from their commercial side, as well as the review process from 
the defense side. And what I am happy to say about that is that 
the Air Force is involved in both sets of those steps, watching 
them design and develop the airplane.
    So, what you may see on the master schedule is actually two 
preliminary design reviews and two critical design reviews to 
go with those two first flights. The first flight of the 
commercial derivative airplane and the first flight of the 
actual KC-46. The Air Force is involved in both sets of those 
reviews, which gives us early insight into the commercial 
portion of the airplane to ensure that the military's portion 
ends up correct.
    Mr. Akin. Well, that is encouraging to hear you say that. 
It is sort of a double check and balance then with your team. 
Now, just want to make sure I understand one thing.
    You are in charge of this program; is that right?
    General Bogdan. Yes, sir.
    Mr. Akin. That is kind of encouraging, because sometimes we 
have groups that come in and address us, and it is not really 
clear who is really in charge of building this. In other words, 
you have the authority, but also you also have the 
responsibility to make sure this comes in on time and under 
budget.
    General Bogdan. Absolutely, sir. The buck stops with me and 
I report directly to Mr. Van Buren for the execution of this 
program.
    Mr. Akin. Directly to--okay. That makes sense. And so that 
is directly connected to----
    Mr. Van Buren. The Under Secretary for Acquisition, 
Technology, and Logistics. Currently, Mr. Kendall is the acting 
Under Secretary.
    Mr. Akin. Okay. That is good. One of the--I used to work 
for IBM. And one of the things we always said was if you have 
got an important program then you have to make sure there is 
somebody in charge. So I am glad to hear that there was no 
equivocation on that particular point. And of course the other 
thing is, is that if things slip at all, you will have the 
distinct honor of being able to fly in antique airplanes, you 
know? Maybe that is not what you really want to do.
    Just one other quick question from my memory. You have the 
KC--is it 35--is the large number 500d or some of them?
    General Litchfield. KC-135s.
    Mr. Akin. One thirty-five. And that is a smaller plane than 
the 10 [KC-10], right?
    General Litchfield. It is.
    Mr. Akin. What is the difference in the number of gallons 
or capacity, or however you measure it?
    General Litchfield. The KC-135 is roughly a 200,000-pound 
fuel capacity. I think the KC-10 is about 350 [350,000 pounds]. 
So about one-and-a-half times.
    Mr. Akin. And how does the 46 [KC-46] fall in that mix?
    General Bogdan. Sir, the KC-46 when fully loaded is going 
to be able to offload or carry 212,000 pounds of gas. It 
doesn't appear like that is a whole lot more than a 135 [KC-
135]. However, a far more efficient airplane than the 135, so 
it is offload capability and its range capability far exceed 
the 135.
    And we also have to remember that the KC-46 has also been 
built for a number of other missions, to include cargo-carrying 
capability. So it has a fully loaded cargo floor and it has 
built-in ability to carry air medical patients for air medical 
evacuation.
    Mr. Akin. So it is a little bit more a multipurpose 
aircraft. And there is a certain point of no return in carrying 
fuel, right? Because there are only a certain number of planes 
you are going to refill in a certain period of time, right? So 
you don't want to carry a lot of extra fuel you don't need?
    General Bogdan. That is true, sir. We prefer to offload all 
of our fuel and land at minimum fuel than have to land with 
extra fuel. More wear and tear on the airplane.
    Mr. Akin. Yes. Thank you very much.
    And let us see. The next question to the ranking member, 
Mr. McIntyre.
    Mr. McIntyre. Thank you, Mr. Chairman. I would like on the 
panel whoever feels most qualified to answer the question that 
I alluded to in my opening remark. What impacts will the Budget 
Control Act of 2011 enacted in July of this year have on the 
KC-46 program?
    Mr. Van Buren. The exact impacts, sir, are not known yet. 
The issues of sequestration, as I mentioned in my opening 
comments, are not specifically identified by the Air Force, as 
of now.
    However, I should say that one of the features of this 
particular acquisition, which in my mind is a model, is the 
manner in which we contracted for not only the engineering, 
manufacturing and development, but also on a firm fixed-price 
basis for the two--first two production lots and a not-to-
exceed cap for the remaining production lots out for a large 
number of years, to the good work of Mr. Assad here, and 
others.
    And so, that any perturbation to that business deal or the 
business transaction that has been set up would be, in my 
opinion, very negative for the taxpayer.
    Mr. McIntyre. I also mentioned about the cost overruns, 
currently estimated at $300 million, roughly, above contract 
ceiling. Can you explain to us in simple terms whether or not 
the Government is exposed? And if it is not, then who is 
responsible for paying for those cost overruns above the 
ceiling?
    Mr. Assad. Yes, sir. I think I can answer that. The Boeing 
company is completely responsible for all costs above the 
contract ceiling price. So the taxpayers will incur no further 
cost increase on this contract should the development program 
exceed the ceiling price of the contract.
    Mr. McIntyre. Thank you. Thank you for clarifying that.
    Thank you, Mr. Chairman.
    Mr. Akin. Mr. Coffman.
    Mr. Coffman. Thank you, Mr. Chairman.
    I am wondering, can you go back again and talk about the 
$300 million cost overrun? And where, since we are under a 
fixed-price contract, what are the ramifications of that?
    Mr. Assad. Yes. The $300 million cost overrun that you are 
referring to, Congressman, was Boeing's present projection of 
where they think their costs are going to end up on the 
contract. They are trying to manage to a much lower number, but 
that is their projection. Our ceiling price, the price that the 
maximum liability to the taxpayer, is $4.9 billion.
    So to the degree that Boeing executes this contract in any 
manner that causes them to exceed that cost number, it is on 
the complete shoulders of the Boeing Corporation and not the 
taxpayer. So it is very straightforward. Anything over that 
$4.9 billion is Boeing's nickel, not ours.
    Mr. Coffman. As it should be. I believe that Boeing is also 
in development using essentially the same design or a similar 
design for what they are--to develop this same aircraft 
commercially as a cargo plane, if I am correct in that?
    Mr. Assad. They are, yes. They are using their first--as 
General Bogdan mentioned--they are developing the 767-C. They 
are using a lot of existing technology. So there is not a lot 
of risk in terms of understanding how to put that plane 
together.
    Mr. Coffman. Oh, absolutely. But I think what I am saying 
is, essentially, they will be able to recover their cost, this 
cost overrun that they will eat, and not the U.S. taxpayers. 
But the fact that they are going to be able to utilize a lot of 
technology that they are developing for the U.S. Government, 
that they will be able to utilize certainly some of that same 
technology for, or commercially--a commercial aircraft. Am I 
correct in that?
    Mr. Assad. Well, actually, most of the technology, if not 
all of it, is being brought to the table by Boeing. There are 
very few--there is some military modification to this aircraft 
that we are going to use that some--I guess they could take 
advantage of. But the fundamental plane is being brought to the 
table--that the elements of that plane--is being brought to the 
table by Boeing.
    Mr. Coffman. But did----
    Mr. Assad. There will be some benefit from the extra 
development that we are doing, but they are bringing a lot of 
that technology; for example, the 787 Dreamliner cockpit. That 
is already developed, designed and paid for by the Boeing 
Corporation.
    Mr. Coffman. I see. And so that is not part--that is not a 
part of the cost for this. But the----
    Mr. Assad. That is correct.
    Mr. Coffman. Okay, okay.
    Mr. Chairman, I yield back.
    Mr. Akin. Mr. Critz, where did--oh, okay. There you are.
    Mr. Critz. Thank you, Mr. Chairman.
    Looking at some information on the IBR [Integrated Baseline 
Review], obviously the risk assessments, cost is low because of 
the cap. That is pretty straightforward. They listed the risk 
assessment for the schedule to be moderate.
    Could somebody explain why there is risk there?
    General Bogdan. Yes, sir.
    Relative to the schedule on the contract, the requirement 
for Boeing is to deliver to the Air Force 18 fully ready to go 
to war on day one airplanes with all the support equipment, all 
the tech quarters, all of the training by August of 2017. That 
is the requirement in the contract. Boeing has set a baseline 
and attempting to deliver those 18 airplanes approximately 5 
months earlier than that in March of 2017. That is their own 
internal timeline.
    When my team baselined the program, we took a look at that 
overall schedule and the likelihood of Boeing meeting the March 
date and the likelihood of Boeing meeting the August 2017 date. 
We came to the conclusion that it is likely that Boeing will 
meet the August 2017 date, but there are about four things that 
we needed to keep our eye on to make sure that they didn't go 
off the rails, which would definitely impact them meeting that 
scheduled date.
    And let me enumerate those for you. The first thing that 
Boeing is doing a little differently on this airplane in terms 
of building it is, instead of building a basic commercial 
airplane on their production line at Everett, and then flying 
it down to Wichita and then taking it apart to put the military 
modifications on it, what they are doing is called inline 
provisioning. And that means that, as they build the airplane 
in Everett, they are going to build it with the wiring and the 
bundling and the fuel lines as if the military pieces were 
going to be fit on the line right there.
    Let me give you an example. When Boeing builds the tail of 
a 767 for a commercial customer, the tail of that airplane does 
not have a hole in it to fit a boom. But for our airplane, when 
the tail section of that KC-46 or 767-2C gets to Everett, it 
will already have the hole in it for Boeing to put the boom on 
it.
    So they are passing down through their sub-tier suppliers 
an additional requirement to build the airplane as if it were a 
military airplane, even though it is going to be put together 
on a commercial line. While Boeing does that quite often in 
their commercial airplanes, different variants, to do it on a 
military airplane with military requirements and specs, 
increases the level of risk for us in the Air Force of getting 
that done on time.
    So I have let Boeing know, and I have put them on notice, 
that I think that that inline provisioning is something that 
they are going to have to pay particular attention to, and we, 
the Air Force, are going to have to pay particular attention 
to, to ensure that their sub-tier suppliers can do the job 
right. It is less a problem with Boeing integrating, and more 
of an issue of making sure that we watch Boeing watch their 
sub-tier suppliers for this inline provisioning.
    So that is the first thing that worries me about the 
schedule, because if you don't get that right, you are not 
going to build your four test airplanes on time, and then 
everything propagates from there.
    The second thing that worries me a little bit on the 
program relative to schedule is the fact that Boeing is going 
to deliver to us an airplane that is FAA [Federal Aviation 
Administration]-certified. There are two elements to that FAA 
certification. The first is what we call an amended type 
certification, and that certification goes with the 767-2C. The 
second part of the FAA certification is called a supplemental 
type certification, and that certification goes with the 
military modifications that they are going to put on the 
airplane.
    It is very typical in the commercial world to do an ATC 
[Amended Type Certificate] certification and an STC 
[Supplemental Type Certificate] certification in serial. You do 
the ATC first. You put the military modifications on the 
airplane, and then you do the supplemental type cert. In this 
instance here, as a result of some of that inline provisioning, 
Boeing is actually going to do part of the ATC and the STC 
simultaneously. There is some concurrency there.
    The issue I have with that is, if a problem arises during 
the FAA certification on the ATC side, there is not a whole lot 
of time for them to recover before they get to the supplemental 
type cert, the STC side. And I have to have that STC 
certification before I can deem the airplane airworthy to fly. 
So that concurrency of the ATC and the STC worries me a little 
bit.
    We have been working with the FAA. The FAA has basically, 
in general, approved Boeing's process for doing this. The FAA 
doesn't have a problem with it. But we just have to make sure 
that the first time around, when they go to get that ATC 
certification there aren't too many hiccups, because that is 
going to propagate with that concurrency into the second part 
of that certification. So that is the second thing that I am a 
little bit worried about that causes some increased risk into 
the program.
    Mr. Critz. Now, you said there were four. And I see we have 
already used up my 5 minutes. So if I could, if it is possible 
to get written response to that question, I would really 
appreciate it.
    [The information referred to can be found in the Appendix 
on page 44.]
    General Bogdan. Yes, sir. And I apologize for being a 
little bit long.
    Mr. Critz. Oh, that is quite all right. It is an important 
issue.
    Thank you.
    And I yield back.
    Mr. Akin. And Mr. Bartlett is next.
    Oh, and by the way, it may be if we move along in the 
questions, it may be we could catch some of the things offline, 
just depending on who has questions.
    Mr. Bartlett. All right. Thank you very much.
    I noticed, both from your comparison chart and your spec 
sheet, that you are no longer waiving chemical and 
electromagnetic hardening, as we did during the Clinton years. 
Can you tell me to what level you are doing EMP 
[electromagnetic pulse] hardening?
    General Bogdan. Sir, currently, the military standard for 
EMP hardening for the KC-135 airplane is at a certain level, 
and for the KC-10 is at a certain level. The Department of 
Defense has undergone a rewriting of the standard, and the 
standard for us now has been slightly increased, although it is 
not at the same level as, for example, a presidential airplane. 
And that is in general terms.
    So what I would like to do is, I will take that question 
for the record and get you the actual numbers, the decimals and 
all of that, engineering numbers, that go with that. But what I 
can tell you is, the airplane--we are not going to waive the 
EMP hardening. It has to meet the current mil [military] 
standard, and that will--that is going to provide us a more 
capable and more survivable airplane than we have in the 
current tanker fleet.
    [The information referred to can be found in the Appendix 
on page 43.]
    Mr. Bartlett. The EMP Commission interviewed two Russian 
generals that told them that the Soviets had developed, and 
they had, an EMP-enhanced weapon that would produce 200 
kilovolts per meter at the ground zero. And that would be, if 
it was detonated 300 miles high over Iowa or Nebraska, that 
would be about 100 kilovolts per meter at the margins of our 
country.
    To my knowledge, that number is at least twice, and maybe 
more than twice, as large as anything that we have ever 
designed or built or tested to. How do we verify the level that 
we ought to be protecting to? The Department--the Pentagon--has 
a number. They have--and I don't know whether that number is 
classified or not--but it is substantially lower than the 
number that the Russian generals told the EMP Commission that 
they had enhanced the EMP weapons to produce.
    General Bogdan. I will just make a few quick comments about 
that, sir. The standards by which the Department of Defense 
sets the EMP levels for the airplanes are based on, as I know--
understand it--a very detailed assessment of the threats.
    Without getting into any classified information, we can 
provide you that process. And they look at the current and the 
future threats to determine that EMP level. Relative to our 
airplane, as again I said, one of the inherent capabilities of 
our airplane being a commercial derivative airplane is, every 
commercial airplane has to have a certain amount of hardening 
for lightening strikes.
    And the FAA requires that and tests that during their ATC 
and STC certifications, as I talked about. So an added 
enhancement to our airplane is not only for the normal threat 
of EMP, but on top of that the FAA certification for things 
like lightening strike will be incorporated in our airplane. 
And I will get you the information about how we determine those 
levels.
    [The information referred to can be found in the Appendix 
on page 43.]
    Mr. Bartlett. Yes. Lightening strikes are what is referred 
to as an E2. It is an E2 component of a nuclear detonation. The 
E1 has a rise time in nanoseconds. No lightning protection, as 
far as I know, provides any meaningful protection against E1. 
And airplanes probably are not so susceptible to E3, which is a 
really, really long wavelength that couples with railroad 
tracks and wires buried deeply under the ground, coupled with 
the E3.
    I am concerned, because when we really need these planes in 
a war with a peer, it is in all of their open literature, it is 
in all of their war games. One of the first things they do is a 
robust EMP lay-down to deny us the use of all of our equipment 
which is not EMP hardened, which is far too much of our 
equipment. And I am concerned that if we are going to harden, 
hadn't we not ought to the level that we are told we should 
expect.
    I will look forward to your written response to this. And 
if the level to which you are hardening is not at the level 
that was designated by the Russian generals to the EMP 
Commission, then I would like your suggestions as to why it 
should not be.
    Thank you.
    Mr. Chairman, I yield back.
    Mr. Akin. Thank you, Roscoe.
    Our next is Mr. Courtney.
    Mr. Courtney. Thank you, Mr. Chairman.
    Mr. Van Buren, you were asked earlier about the Budget 
Control Act in terms of impact on the program. How about the 
C.R. [Continuing Resolution] last year in terms of the, you 
know, fits and starts and where we are today with the C.R.? 
And, you know, has that--it is--I mean, we are right now at R&D 
[Research and Development] sort of level in terms of where the 
program is. And I am just sort of wondering if that had any 
sort of delay, interruption, cost?
    Mr. Van Buren. The continuing resolution last year did not 
impact the program.
    General Bogden, what is your assessment of this year?
    General Bogdan. Sir, we took a look at that. And if we were 
to go into a C.R. for the entire fiscal year 2012 year and 
maintain at the fiscal year 2011 levels, we would be $203 
million short of what we would need to pay Boeing in their 
progress payments for work done on the EMD contract in fiscal 
year 2012.
    Mr. Courtney. Okay. The numbers that we have here seems to 
suggest it was fairly level from 2011 to 2012. So there 
actually is a difference in terms of what you--the plan was 
for----
    General Bogdan. Yes, sir. When we originally put the budget 
in for 2012, it was long before we figured who was going to win 
this competition, because we hadn't chosen the winner. So we 
had to budget for either possibility that the other competitor 
of Boeing would win.
    And if the other competitor would have won, we would have 
needed more money in 2012 than we would have for Boeing. And in 
this instance, because Boeing won, although 2012 and 2013 are 
leveled together, they are not equal, per se.
    Mr. Courtney. Okay. Because the numbers that we have here--
--
    General Bogdan. And then, like I said, we went back, and 
based on Boeing's projected progress payments, which I have to 
validate, I have to take a look and make sure that they are 
really earning the money they claim they are earning with the 
work being completed. We will be about $200 million short on 
the progress payments for them.
    Mr. Courtney. All right.
    General Bogdan. If we are at the 2011 level.
    Mr. Courtney. That is helpful for us to know that.
    General Bogdan. Yes, sir.
    Mr. Courtney. One last question.
    General Litchfield, you talked about the operations that 
the tanker fleet has been involved in, in recent years. You 
know, looking at Libya where after the initial sort of salvo of 
ships and strike aircraft, I mean, our involvement tended to 
just sort of revert to refueling and recognizance.
    Is that because the NATO [North Atlantic Treaty 
Organization] allies don't really have that capability? I mean, 
are we the only ones that really have refueling fleets of any 
size or significance?
    General Litchfield. I think size and significance is a fair 
statement. There are other countries that have air refueling 
capability, but we are really the joint and coalition and 
allied supplier of air refueling across our partners.
    Mr. Courtney. So what percentage? I guess in terms of the 
operations of Libya, just an estimation?
    General Litchfield. I would have to get some specifics on--
--
    Mr. Courtney. Okay.
    General Litchfield. I would have to take that one for the 
record.
    [The information referred to can be found in the Appendix 
on page 43.]
    Mr. Courtney. But it is significant, as you said?
    General Litchfield. Well, I think what is the real 
important thing is that our tankers are involved globally. You 
could say Libya, but I could say the same thing about the 
humanitarian operations in Japan when they were, after the 
tsunami and the nuclear incident, we were there.
    I could talk to you about what we do on a daily basis for 
keeping the ISR [Intelligence, Surveillance, and 
Reconnaissance] for drug interdictions and all that. I could 
talk to you about getting our wounded warriors home when they 
need to get MEDEVAC [medical evacuation] from the AOR [Area of 
Responsibility] all the way to the (?), because minutes matter 
in terms of saving a life.
    I think you could talk any operation you want any day, and 
our tankers are fully engaged in keeping--in support of their 
mission.
    We can get the answer on Libya. But what I would really 
like to leave you with is there isn't a day go by that a 135 
averages passing about 5 million pounds of fuel and supplying 
about 400-plus aircraft with refueling. And that is on a normal 
day.
    Mr. Courtney. You don't have to, you know, spend your time, 
you know, chasing those numbers. But I guess the point is just 
that there really is no other ally that can sort of fill that 
hole if we don't get this program, you know, hitting all 
cylinders on time. So----
    General Litchfield. Yes, sir.
    Mr. Courtney [continuing]. Thank you, Mr. Chairman.
    Mr. Akin. Thank you.
    And next is Mr. Palazzo.
    Mr. Palazzo. Thank you, Mr. Chairman.
    Thank the witnesses for being here today, and the service 
to--that you are providing to our country. Thank you.
    Like many people, especially those along the Gulf Coast, we 
were kind of surprised about the KC-X award, but after 
reviewing the selection documents it pretty much came up to 
our--ultimately our satisfaction that the decisionmaking 
process was okay.
    I do have a few questions that I would like to ask. I did 
have a question on the $300 million overrun, but that has 
already been asked and answered.
    So just General Bogden--but anybody who wants to jump in, 
feel free--is according to some press reports, the FAA is 
proposing heightened scrutiny of the wing skin after cracks as 
large as half an inch were found on commercial 767s.
    What impact will this have on the KC-46A program, and what 
measures has the Air Force taken to ensure that the tanker can 
meet the desired capabilities in the service line?
    General Bogdan. Sir, I am not sure if you are referring to 
the most recent airworthiness directive from the FAA about 
cracks that were recently found on some 767s. If you are 
talking about that one, what I can tell you is 183 of the 
oldest 767s in the commercial fleet today have older wing 
pylons on their airplanes. And it is those wing pylons that the 
FAA has sent out an airworthiness directive on just a few weeks 
ago for increased rate of inspection.
    The reason why that won't affect us is because in 2005 the 
FAA actually found those wing cracks and sent out the original 
airworthiness directive. And that is why most of the 767 fleet 
today has the new pylons and was not affected by this most 
recent finding of cracks.
    The design of our airplane has the new wing pylons from the 
2005 airworthiness directive. So we are confident, relative to 
that particular incident, that our airplane will not meet the 
same fate.
    One of the requirements, in a broader sense, one of the 
requirements we have on this contract is that Boeing has to 
prove to us during the design, development and testing phase of 
the program that this airplane is going to last for 40 years.
    That includes a number of different engineering tests and 
analysis on the structures, the wings, the skin of the 
airplane. And the requirements to meet that 40-year lifecycle 
are not the commercial requirements. They are the military 
standard requirements, which go above and beyond in a number of 
instances from the commercial inventory.
    So I am fairly confident that Boeing understands this. I am 
also fairly confident that our overseeing of Boeing developing 
and designing the airplane to the military standard for a 40-
year lifecycle on the airplane is going to mitigate any 
problems we may see.
    Mr. Palazzo. And I have one more question, Mr. Chairman.
    What impacts would sequestration, as a result of the 
potential outcome of the Joint Select Committee on Deficit 
Reduction, have on this program, the KC-46A?
    General Bogdan. As Mr. Van Buren and Mr. Assad had already 
spoken, I will say it in very simple terms. The EMD contract on 
this program is a fixed price contract. All 175 production 
airplanes have already been priced.
    We know exactly how much we are going to pay for both EMD, 
and for every one of those airplanes. And we got a good deal.
    If we were to remove money from this program of a 
significant amount that we would have to alter the development 
program or alter our production target quantities, there is a 
chance that we would have to renegotiate both of those 
contracts. And that would put in jeopardy a significant savings 
to the taxpayers.
    Mr. Palazzo. Mr. Chairman, I yield back.
    Mr. Akin. Thank you.
    And last is Mrs. Davis. We have--there is a 15-minute vote 
and we are probably, what do you think, about 13 minutes into 
it or so, possibly?
    Mrs. Davis. Thank you, Mr. Chairman. I will try and be 
quick.
    And thank you all for being here.
    I just have a quick question to your last response. 
Wouldn't Boeing have assumed that they were building to 
military standards and not commercial; is that not a correct 
assumption?
    General Bogdan. During the proposal phase and during the 
source selection when we laid out our requirements, Boeing was 
well aware that the airplane had to meet the military standards 
for the 40-year lifecycle.
    Mrs. Davis. Okay. Thank you.
    Is there anything else besides what you suggested to the 
committee--and I may have missed this--that you learned from 
this process that informs future decisions? Because I think 
sometimes we, you know, we demonstrate that we have cut 
something and that is fine. And I think we are obviously 
looking at, you know, a tremendous number of cuts. But there 
doesn't seem to be a real systemic change to the culture of 
doing that.
    What did you learn that informs future decisions?
    Mr. Assad. In this particular program, Congresswoman, what 
we learned was that we need to use the type of procurement 
practice that we used on KC-X on as many programs, frankly, as 
we can, but that requires firm requirements.
    In this particular case, we spent a significant amount of 
time understanding from the warfighter exactly what their 
requirement was, so that the plane that rolled off the 
production line, in fact, can go to war from day one.
    And so, in those instances where we can define our 
requirements in a firm way, we need to use this type of 
contract, you know? It is appropriate to use a fixed price 
contract when you have definitive requirement and that is where 
we want to be whenever we can be there.
    Mrs. Davis. Is that--go ahead, sir. I am sorry.
    General Bogdan. Go ahead, ma'am.
    Mrs. Davis. Would anyone be challenging you on that in the 
future?
    Mr. Assad. Well, you know, there are those who never think 
a fixed price contract is the right type of a contract to use. 
And our view is, if the shoe fits on Cinderella's foot, she 
should wear it. And so, if a fixed price contract is 
appropriate, if the firm requirements are there and known and 
the risks are understood, it is an appropriate contract to use.
    Mrs. Davis. Okay, thank you.
    And I know that the--my understanding that the KC-46A will 
replace about 179 of the current 472 legacy tankers. So what 
about the others? What is the Air Force's plan to replace the 
others?
    Mr. Van Buren. The baseline, Congresswoman, has always been 
for the so-called KC-Y and a KC-Z that would go on after the 
acquisition of the KC-X program. And the whole set of 
requirements and acquisition approach will be more than a 
decade out during the period of our procurement of the KC-X 
tankers.
    Mrs. Davis. Okay.
    Thank you, Mr. Chair.
    Mr. Akin. Thank you for everybody helping on keeping the 
questions pretty short. Two more people have come in.
    Mr. Johnson, you are next. If you keep your questions to a 
couple minutes, that allows Mr. Larsen to ask one and we will 
still get to votes on time.
    Mr. Johnson. Thank you. Thank you, Mr. Chairman.
    Secretary Assad, I just heard you say that the as far as 
the KC-X and KC-Y programs, they would--you didn't say that 
they would replace the KC-135. You said they would go on after 
the KC-135. Which is the most accurate description?
    Mr. Assad. I am sorry, I might not have been as clear as I 
wanted to be. The whole replacement of the KC-135 fleet and the 
KC-10 fleet will be conducted by a series of procurements, KC-X 
being the first one, then KC-Y and then KC-Z. So there are 
three programs that will go incrementally through the years to 
replace the current tanker fleets.
    Mr. Johnson. So we will have three models that are 
replacing the current tanker fleet?
    Mr. Assad. I would want to defer that until after the 
commander--mobility command--goes through and develops those 
requirements in the out-years.
    Mr. Johnson. But we are, as it stands now, planning for 
three replacements?
    Mr. Assad. Three procurements.
    Mr. Johnson. Three procurements, all of which would replace 
the program that is in place now with just the one aircraft?
    Mr. Assad. They would replace the current legacy fleet of 
KC-135 and KC-10.
    Mr. Johnson. Looking ahead at the mix of aircraft our Air 
Force would be using in 20 or 30 years, is it possible that we 
won't need to spend billions of taxpayers' money on a new heavy 
tanker if we could accomplish our objective with the KC-46?
    Mr. Assad. That is entirely possible.
    Mr. Johnson. I have no further questions.
    I will yield back. Thank you.
    Mr. Akin. Thank you.
    And our last question goes to Mr. Larsen.
    Mr. Larsen. Thank you.
    Most of the gentlemen I have heard from you at one time or 
the other about this program, so my only concern is, and the 
only comment--it is really more of a comment. Just given the 
news of the summer and the conversations that took place in the 
media about the development phase of this, that we would be 
sure that here you stick to your contract and you make sure 
that the contractor sticks to the contract. And that the 
taxpayers aren't on the hook for anything but what is in the 
contract. That is the main point I want to make.
    Mr. Van Buren. That is our intent, sir. And that is the 
reason why we have very stringent controls with regard to 
constructive change to the contract, both at General Bogdan's 
level and at my level.
    Mr. Assad. And in addition, Representative, that is why, 
frankly, we are, we have and we will continue OSD [Office of 
the Secretary of Defense] oversight to ensure that that 
happens.
    Mr. Larsen. Yes, from OSD, not just from Air Force.
    Mr. Assad. That is correct, Congressman.
    Mr. Larsen. And we will continue congressional oversight on 
you all.
    Thanks a lot.
    Mr. Akin. Congressman Larsen, thank you.
    I just want to thank you all for being here. We just wanted 
a quick update on how the program was going. I think you did a 
great job and I wish you the very best on it. Make it the very 
best program ever.
    And so, we will stay tuned and thanks for taking the time 
with us. I am glad we got the questions done, so we do not have 
to wait and come back for anything.
    So, God bless you, have a great day.
    [Whereupon, at 1:53 p.m., the subcommittee was adjourned.]



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




                            A P P E N D I X

                            October 13, 2011

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





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


              PREPARED STATEMENTS SUBMITTED FOR THE RECORD

                            October 13, 2011

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


                     Statement of Hon. W. Todd Akin

     Chairman, House Subcommittee on Seapower and Projection Forces

                               Hearing on

     Update on KC-46A and Legacy Aerial Refueling Aircraft Programs

                            October 13, 2011

    This afternoon the subcommittee meets to receive testimony 
from Department of Defense acquisition officials regarding the 
Air Force's new tanker program, the KC-46, and to receive an 
update on current tanker aircraft, the KC-135 and the KC-10. 
Normally, we would hold this type of hearing at the beginning 
of the budget cycle, but as everyone knows, the Air Force was 
still in source selection and we felt that it was prudent to 
delay until sufficient information was available to the public. 
We also intend to provide sufficient, but not overly 
burdensome, oversight of this program and expect that this will 
go into the record books as a model of
success.
    Today we have with us Mr. Shay Assad, Director of Defense 
Acquisition Policy and Strategic Sourcing; Mr. Dave Van Buren, 
the Air Force's Service Acquisition Executive; Major General 
Bruce Litchfield, Special Assistant to the Commander of Air 
Force Materiel Command; and Major General (Select) Chris 
Bogdan, Program Executive Officer for the KC-46 program.
    I think it's safe to say that many folks have looked 
forward to this day, and more importantly, the fact that the 
Air Force has finally begun to replace its 50-year-old, 
Eisenhower-era tankers. And, that the old adage known as 
``Third Time's a Charm'' has once again been reaffirmed by the 
Air Force's acquisition professionals.
    As chairman of this subcommittee, I commend the acquisition 
corps of professionals who so diligently oversaw the process 
for this source selection and conducted what I felt to be a 
fair, open, transparent and fierce competition between two 
global competitors within the aircraft industry. I feel that 
the most affordable aircraft that met warfighter requirements 
for our Air Force was selected, and that the taxpayers' 
investment will provide many worthwhile and valuable returns.
    Air-to-air refueling is a crucial capability within our 
military and is what enables our global reach, influence and 
projection of our joint and allied air forces. Whether it is 
providing fuel for fighter aircraft to remain orbiting overhead 
our soldiers and marines on the ground in Afghanistan, or fuel 
for allied aircraft operations over Libya, or fuel for the last 
leg of that C-17 mission bringing our wounded warriors home 
from battle, air-to-air refueling will
always, and should always, remain a mainstay of our core
capabilities.
    During this hearing, we hope to gain a better understanding 
of various elements of the KC-46 program and how it will be 
carried out, as well as understand all program risks that have 
been identified and the oversight mechanisms in place to keep 
the program on track. And, we will all appreciate the need for 
this new tanker as we hear testimony regarding our aging, but 
still capable, fleet of legacy tankers and the dedicated airmen 
that keep them flying. Finally, we'd like to gain an 
understanding on KC-46 program impacts as budget deliberations 
for the future continue to take center stage and remain 
uncertain.

                    Statement of Hon. Mike McIntyre

  Ranking Member, House Subcommittee on Seapower and Projection Forces

                               Hearing on

     Update on KC-46A and Legacy Aerial Refueling Aircraft Programs

                            October 13, 2011

    I would like to thank all of the witnesses for appearing 
here today to talk about this very important topic. The Air 
Force has waited way too long for a replacement for the KC-135, 
an aircraft with an average age of nearly 50 years.
    In our current environment of constrained budgets, it is 
absolutely critical that we get the KC-46 acquisition process 
on a stable track and on a schedule that is realistic and will 
not lead to costly delays. I understand that the Air Force 
recently completed an Integrated Baseline Review, and I am 
interested in hearing from the witnesses about any risks that 
were identified in that process.
    Recent press reports have estimated that the KC-46 program 
will experience cost overruns of more than $300 million. I 
would like to better understand how much of these overruns the 
Government would be liable for and what measures are being 
taken to prevent any further cost overruns.
    As we wait for the KC-46 to come online, I am concerned 
with the viability of our current legacy aerial refueling 
fleet. Their in-theater demand remains high and it appears that 
trend will continue in the near term. I look forward to hearing 
from the witnesses on the condition of our current legacy fleet 
and discussing their ability and capacity to meet increased 
theater demand.
    We are well aware of the fiscal constraints that DOD is 
currently facing. To the extent possible, I would like to hear 
what potential impacts the Budget Control Act and possible 
sequestration will have on the overall aerial refueling 
mission.
    I would like to thank the witnesses for their service to 
our country, and I thank the chairman for holding this 
important hearing today. 
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?

      
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              WITNESS RESPONSES TO QUESTIONS ASKED DURING

                              THE HEARING

                            October 13, 2011

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

      
            RESPONSES TO QUESTIONS SUBMITTED BY MR. BARTLETT

    General Bogdan. MIL-STD-2169 addresses all aspects of the current 
EMP threat and provides detailed descriptions of the components of 
high-altitude EMP (HEMP) threat waveforms, which include E1 (prompt 
gamma HEMP), E2 (scattered and neutron inelastic gamma HEMP), and E3 
(magnetohydrodynamic (MHD) HEMP). An unclassified composite waveform of 
E1, E2, and E3 HEMP environment is shown below.

[GRAPHIC] [TIFF OMITTED] 71448.018


    Only the E1 waveform is applicable to KC-46 aircraft as it couples 
well to antennas, equipment (through apertures), conductive lines, and 
contains strong in-band signals to interfere with communication 
receivers. Due to low frequency content, the E2 and E3 components do 
not affect aircraft. The E2 component couples to overhead and buried 
long conductive lines, vertical antenna towers, and aircraft with 
trailing wire antennas. The E3 component couples to power and long 
communication lines including undersea cables.
    MIL-STD-2169 is based on all currently known EMP threats and is 
maintained and updated by the Defense Threat Reduction Agency (DTRA) 
(8725 John J. Kingman Road, Stop 6201, Ft. Belvoir, VA 22060). [See 
page 10.]
    General Bogdan. The KC-46 System Specification includes a 
contractual requirement to withstand an electromagnetic pulse (EMP) at 
least two times (6 dB) the EMP threat environment defined in the 
classified MIL-STD-2169. KC-46 aircraft will be designed and tested to 
meet this requirement. [See page 11.]
                                 ______
                                 
             RESPONSE TO QUESTION SUBMITTED BY MR. COURTNEY
    General Litchfield. Total # of Air Refueling (AR) Sorties: 6043
    Total # of USAF Air Refueling Sorties: 4256
    U.S. Percentage of Total Air Refueling Sorties: 70.42%
    [See page 12.]
                                 ______
                                 
              RESPONSE TO QUESTION SUBMITTED BY MR. CRITZ
    General Bogdan. The contractual requirement is for Boeing to 
deliver 18 aircraft ready to go to war on day one with all the support 
equipment, all the tech orders and all of the training, to the Air 
Force by August of 2017. As part of the Integrated Baseline Review 
(IBR) process, Boeing established an internal baseline schedule to 
deliver those 18 aircraft in March of 2017, approximately five months 
earlier than contractually required.
    During the IBR process, the KC-46 Directorate assessed Boeing's 
overall schedule, the likelihood of Boeing meeting their internal March 
2017 baseline date, and the likelihood of Boeing meeting the 
contractually required August 2017 date. The KC-46 Directorate came to 
the conclusion that it is likely that Boeing will meet the 
contractually required August 2017 date, but that there are four risks 
to the supporting schedule to closely manage during contract execution.
    Risk #1: In-line provisioning. Instead of building a basic 
commercial aircraft on their production line at Everett and then flying 
it down to Wichita to take it apart and install the military 
modifications on it, what they're doing is called in-line provisioning. 
In-line provisioning means that Boeing is going to build the wiring and 
the bundling and the fuel lines in the aircraft at Everett as if the 
military modifications were going to be fit on the line.
    For example, when Boeing builds the tail of a 767 for a commercial 
customer, the tail of that aircraft does not have a hole in it to fit a 
boom. But for the KC-46 aircraft, when the tail section of that 767-2C 
gets to Everett, it will already have the hole in it for Boeing to put 
the boom in place. Boeing is passing down to their sub-tier suppliers 
an additional requirement to build the aircraft as if it were in the 
military aircraft configuration even though it's going to be put 
together on a commercial line. While Boeing does this quite often in 
different variants of their commercial aircraft, doing so on an 
aircraft with military requirements and specifications increases the 
level of risk for accomplishing that work on time.
    Risk #2: FAA Certification. Boeing is going to deliver an airplane 
to the Government that is FAA certified. There are two elements to FAA 
certification. The first is an Amended Type Certification (ATC) 
associated with the commercial 767-2C. The is a Supplemental Type 
Certification (STC) associated with the military modifications that 
Boeing is going to put on the aircraft. It is typical to accomplish the 
ATC and STC in a serial manner--ATC first, install the military 
modifications, and then the STC. In this case, as a result of that in-
line provisioning, Boeing is actually going to accomplish a portion of 
the ATC and STC concurrently. If a problem arises during the FAA ATC 
process, there is not a lot of time for Boeing to recover before they 
get to the STC process, which must be done before the Government can 
deem the aircraft airworthy to fly.
    The KC-46 Directorate has been working with the FAA, and the FAA 
has basically approved Boeing's process for accomplishing the ATC and 
STC effort. However, the Government and Boeing team must collectively 
work to ensure there are no major issues with obtaining the initial ATC 
because that will--given the concurrency-- propagate into the STC 
process.
    Risk #3: Flight Test. The test program, particularly for the Aerial 
Refueling certifications, will require efficient use and 
synchronization of FAA, developmental, and operational test resources 
to avoid driving additional test events, and to finish the test program 
objectives on schedule. While the KC-46 Directorate determined that 
Boeing has adequately justified their capability to achieve the 
proposed flight hours/month and effectiveness rate for FAA 
certification of the 767-2C with 65 hours/month and 85% effectiveness 
(i.e., a 15% re-fly rate), the KC-46 Directorate has some concern with 
Boeing's ability to achieve their proposed KC-46 sortie rate of 50 
hours/month and 85% effectiveness given the amount of coordination and 
synchronization with outside resources. The KC-46 Directorate is 
working with Boeing to identify resource requirements and constraints 
to mitigate this risk.
    Risk #4: Software. Boeing plans to reuse 70%-80% of existing 
software on the KC-46 program. Although a higher reuse rate might be 
expected on a commercial derivative aircraft program, historical 
experience on military programs would typically suggest a software 
reuse rate of 20%-30%. Because of this, the KC-46 Directorate is 
focusing on software early in the program to ensure Boeing puts the 
proper emphasis on this area, especially given the modifications to the 
commercial software required to accommodate classified/unclassified 
separation, information assurance and other military capabilities. The 
program will use simulation and hardware and software integration 
laboratories to provide early indication of software effectiveness. In 
addition, the Government is driving the requirement to capture leading 
software metrics to pinpoint areas of concern such that appropriate 
expertise and resources can engage early enough to prevent significant 
impacts to the program schedule. [See page 10.]
?

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


              QUESTIONS SUBMITTED BY MEMBERS POST HEARING

                            October 13, 2011

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

      
                   QUESTIONS SUBMITTED BY MR. PALAZZO

    Mr. Palazzo. Given the experience with late deliveries of Boeing's 
Italian tanker program largely due to problems with the aerial 
refueling systems and the fact that the Government has listed the KC-46 
wing pods and the fly-by-wire boom systems as major risk items, what 
process did the Government use to evaluate the readiness level of those 
key aerial refueling systems to ensure they can be developed and 
qualified in time to meet the proposed delivery schedule?
    Mr. Van Buren, General Litchfield, and General Bogdan. The RFP 
required a technology readiness level (TRL) assessment as well as an 
assessment of the risk associated with the approach. The TRL was 
assessed in accordance with the governing TRL standard. The risk was 
assessed based on technical judgment and past experience of many highly 
experienced evaluators. Boeing's design and approach was found to be 
TRL 6 or higher with an acceptable level of risk. With respect to the 
Italian tanker, Boeing's past experience produced significant lessons 
learned for the KC-46 program. For example, the issue with the wing 
pods was discovered on the Italian program which allowed Boeing to 
start mitigating the risk before contract award. The Italian program 
also provided relevant experience with boom control laws. Additionally, 
the KC-46 boom is the same shape as the KC-10 boom which allows the use 
of extensive historical data (analysis, wind tunnel, and flight test) 
to mitigate the development risk.
    Mr. Palazzo. The documents we have reviewed indicate Boeing had 
acceptable plans to meet 577 requirements. The KC-X RFP mandates 372 
mandatory requirements and the post-contract award documents indicate 
Boeing bid less than 18 non-mandatory requirements (the number EADS 
[European Aeronautic Defence and Space Company N.V.] bid) for a maximum 
of 390 requirements. What are the other requirements?
    Mr. Van Buren, General Litchfield, and General Bogdan. There are no 
additional requirements. The difference in number of requirements is 
solely due to Boeing separating single Government requirements into 
different system specification paragraphs. Breaking down requirements 
is a standard systems engineering practice. For example, if the 
Government required a capability on the ground and in-flight, Boeing 
may have two separate paragraphs--one for the capability in-flight and 
one for the capability on the ground.
    Mr. Palazzo. The schedule appears highly concurrent and compressed. 
From the materials presented we understand first flight is scheduled 
for 3Q14, followed by the initiation of the development test program in 
2Q15, and a Milestone C decision planned for 4Q15. Thus, simultaneously 
with the occurrence of the IOT&E phase (3Q16-1Q17), 14 aircraft 
production representative aircraft must be delivered in 33 months 
(August 2017). What independent tool, process, or agency did the 
Government use to determine this was only a moderate risk schedule?
    Mr. Van Buren, General Litchfield, and General Bogdan. During both 
the KC-X source selection and the post-contract award Integrated 
Baseline Review (IBR) process, the Department used independent cross-
functional teams of subject matter experts to assess Boeing's schedule 
and test approach.
    The KC-X source selection evaluation team conducted a thorough 
evaluation of each offeror's proposal (to include each offeror's 
program schedules and test approaches), per Section M of the Request 
for Proposal, to ensure there was ``an expectation of a low to moderate 
risk of unsuccessful contract performance.'' The KC-X source selection 
evaluation team--specifically evaluated by subject matter experts from 
the KC-X program office, Air Force Flight Test Center (AFFTC), Air 
Force Operational Test and Evaluation Center (AFOTEC), AMC/TE, US Navy 
NAVAIR, Joint Interoperability Test Command (JITC), AF SEEK EAGLE 
Office (AFSEO) and reviewed by Air Force and OSD experts--concluded 
that Boeing's test schedule and test approach was acceptable, and 
therefore, represented a ``low to moderate risk of unsuccessful 
contract performance.'' These organizations and subject matter experts 
provided a cross-service, independent assessment of Boeing's schedule 
and test approach informed by experience from previous, relevant EMD 
programs.
    During the post-contract award IBR process, Boeing reiterated their 
internal baseline schedule to deliver the 18 aircraft in March of 2017, 
approximately five months earlier than contractually required. The KC-
46 Directorate (supported by the FAA and Defense Contract Management 
Agency) again assessed Boeing's overall schedule and test approach, the 
likelihood of Boeing meeting their internal March 2017 baseline date, 
and the likelihood of Boeing meeting the contractually required August 
2017 date. The KC-46 Directorate concluded that it is likely (moderate 
risk) that Boeing will meet the contractually required August 2017 
date, but that there are four risks to the supporting schedule to 
closely manage during contract execution.
    Risk #1: In-line provisioning. Instead of building a basic 
commercial aircraft on their production line at Everett and then flying 
it down to Wichita to take it apart and install the military 
modifications on it, what they're doing is called in-line provisioning. 
In-line provisioning means that as Boeing builds the aircraft in 
Everett, they are going to do so with the wiring and the bundling and 
the fuel lines as if the military modifications were going to be fit on 
the line right there.
    For example, when Boeing builds the tail of a 767 for a commercial 
customer, the tail of that aircraft does not have a hole in it to fit a 
boom. But for the KC-46 aircraft, when the tail section of that 767-2C 
gets to Everett, it will already have the hole in it for Boeing to put 
the boom in place. So Boeing is passing down to their sub-tier 
suppliers an additional requirement to build the aircraft as if it were 
a military aircraft even though it's going to be put together on a 
commercial line. While Boeing does this quite often in different 
variants of their commercial aircraft, to do so on a military aircraft 
with military requirements and specifications increases the level of 
risk for accomplishing that work on time.
    Risk #2: FAA Certification. Boeing is going to deliver an airplane 
to the Government that is FAA certified. There are two elements to FAA 
certification. The first is an Amended Type Certification (ATC) 
associated with the commercial 767-2C. The second part of the FAA 
certification is called a Supplemental Type Certification (STC) 
associated with the military modifications that Boeing is going to put 
on the aircraft. It is typical in the commercial world to accomplish 
the ATC and STC in a serial manner. You accomplish the ATC first, 
install the military modifications, and then accomplish the STC. In 
this case, as a result of that in-line provisioning, Boeing is actually 
going to accomplish a portion of the ATC and STC concurrently. If a 
problem arises during the FAA certification on the ATC side, there is 
not a lot of time for Boeing to recover before they get to the STC 
side, which must be done before the Government can deem the aircraft 
airworthy to fly.
    The KC-46 Directorate has been working with the FAA, and the FAA 
has basically approved Boeing's process for accomplishing the ATC and 
STC effort. However, the Government and Boeing team must collectively 
work to ensure there are no major missteps in the initial ATC part, 
because that will--given the concurrency--propagate into the STC part 
of the certification.
    Risk #3: Flight Test. The test program, particularly for the aerial 
refueling certifications, will require efficient use and 
synchronization of FAA, developmental, and operational test resources 
to avoid driving additional test events, and to finish the test program 
objectives on schedule. While the KC-46 Directorate determined that 
Boeing has adequately justified their capability to achieve the 
proposed flight hours/month and effectiveness rate for FAA 
certification of the 767-2C with 65 hours/month and 85% effectiveness 
(i.e., a 15% re-fly rate), the KC-46 Directorate has some concern with 
Boeing's ability to achieve their proposed KC-46 sortie rate of 50 
hours/month and 85% effectiveness given the amount of coordination and 
synchronization with outside resources. The KC-46 Directorate is 
working with Boeing to identify resource requirements and constraints 
to mitigate this risk.
    Risk #4: Software. Boeing plans to reuse 70%-80% of existing 
software on the KC-46 program. Although a higher reuse rate might be 
expected on a commercial derivative aircraft program, historical 
experience on military programs would typically suggest a software 
reuse rate of 20%-30%. Because of this, the KC-46 Directorate is 
focusing on software early in the program to ensure Boeing puts the 
proper emphasis on this area, especially given the modifications to the 
commercial software required to accommodate classified/unclassified 
separation, information assurance and other military capabilities. The 
program will use simulation and hardware and software integration 
laboratories, solely dedicated to the KC-46 program, to provide early 
indication of software effectiveness. In addition, the Government is 
driving the requirement to capture leading software metrics to pinpoint 
areas of concern such that appropriate expertise and resources can 
engage early enough to prevent significant impacts to the program 
schedule.
    Mr. Palazzo. We understand that all 4 EMD aircraft are planned to 
be instrumented for the test phase and the IOT&E period is not 
scheduled to end until 1Q17. Presumably those 4 EMD aircraft will be 
added to the 14 LRIP aircraft to fulfill the requirement to deliver 17 
[18] aircraft within 78 months after contract award.
    A. What mechanism did the Government use to ensure these aircraft 
can be de-instrumented and modified to production representative status 
and delivered by August 2017?
    B. How does this schedule risk assessment take advantage of lessons 
learned from previous concurrent EMD schedule programs?
    C. How does the Government intend to protect the warfighter's 
interest if the contractual schedule mandate (17 [18] aircraft within 
78 months after contract award) is not met (i.e., will the Government 
seek reimbursement from the contractor to offset sustainment costs 
required to maintain the legacy tanker fleet)?
    Mr. Van Buren, General Litchfield, and General Bogdan. A. Boeing's 
schedule shows a 90-day period per EMD aircraft that occurs prior to 
IOT&E for de-instrumentation and to update to a production 
representative baseline configuration as required for IOT&E per Title 
10. After completion of IOT&E, the contract calls for these aircraft to 
reset all inspection clock times to zero and have deficiencies 
identified through IOT&E corrected to meet the final product baseline 
prior to final delivery to the Air Force.
    B. During both the KC-X source selection and the post-contract 
award Integrated Baseline Review (IBR) process, the Department used 
independent cross-functional teams of subject matter experts (SME) to 
assess Boeing's schedule and test approach. These SMEs were able to 
provide lessons learned from various concurrent EMD schedule programs 
and identify risk areas with Boeing's approach.
    The KC-X source selection evaluation team conducted a thorough 
evaluation of each offeror's proposal (to include each offeror's 
program schedules and test approaches), per Section M of the Request 
for Proposal, to ensure there was ``an expectation of a low to moderate 
risk of unsuccessful contract performance.'' The KC-X source selection 
evaluation team--specifically evaluated by subject matter experts from 
the KC-X program office, Air Force Flight Test Center (AFFTC), Air 
Force Operational Test and Evaluation Center (AFOTEC), AMC/TE, US Navy 
NAVAIR, Joint Interoperability Test Command (JITC), AF SEEK EAGLE 
Office (AFSEO) and reviewed by Air Force and OSD experts--concluded 
that Boeing's test schedule and test approach was acceptable, and 
therefore, represented a ``low to moderate risk of unsuccessful 
contract performance.'' During source selection, these organizations 
and subject matter experts provided a cross-service, independent 
assessment of Boeing's schedule and test approach informed by 
experience from previous, relevant EMD programs.
    During the post-contract award IBR process, Boeing reiterated their 
internal baseline schedule to deliver the 18 aircraft in March of 2017, 
approximately five months earlier than contractually required. The KC-
46 Directorate (supported by the FAA and Defense Contract Management 
Agency) again assessed Boeing's overall schedule and test approach, the 
likelihood of Boeing meeting their internal March 2017 baseline date, 
and the likelihood of Boeing meeting the contractually required August 
2017 date. The KC-46 Directorate concluded that it is likely (moderate 
risk) that Boeing will meet the contractually required August 2017 
date, but that there are four risks to the supporting schedule to 
closely manage during contract execution.
    Risk #1: In-line provisioning. Instead of building a basic 
commercial aircraft on their production line at Everett and then flying 
it down to Wichita to take it apart and install the military 
modifications on it, what they're doing is called in-line provisioning. 
In-line provisioning means that as Boeing builds the aircraft in 
Everett, they are going to do so with the wiring and the bundling and 
the fuel lines as if the military modifications were going to be fit on 
the line right there.
    For example, when Boeing builds the tail of a 767 for a commercial 
customer, the tail of that aircraft does not have a hole in it to fit a 
boom. But for the KC-46 aircraft, when the tail section of that 767-2C 
gets to Everett, it will already have the hole in it for Boeing to put 
the boom in place. So Boeing is passing down to their sub-tier 
suppliers an additional requirement to build the aircraft as if it were 
a military aircraft even though it's going to be put together on a 
commercial line. While Boeing does this quite often in different 
variants of their commercial aircraft, to do so on a military aircraft 
with military requirements and specifications increases the level of 
risk for accomplishing that work on time.
    Risk #2: FAA Certification. Boeing is going to deliver an airplane 
to the Government that is FAA certified. There are two elements to FAA 
certification. The first is an Amended Type Certification (ATC) 
associated with the commercial 767-2C. The second part of the FAA 
certification is called a Supplemental Type Certification (STC) 
associated with the military modifications that Boeing is going to put 
on the aircraft. It is typical in the commercial world to accomplish 
the ATC and STC in a serial manner. You accomplish the ATC first, 
install the military modifications, and then accomplish the STC. In 
this case, as a result of that in-line provisioning, Boeing is actually 
going to accomplish a portion of the ATC and STC concurrently. If a 
problem arises during the FAA certification on the ATC side, there is 
not a lot of time for Boeing to recover before they get to the STC 
side, which must be done before the Government can deem the aircraft 
airworthy to fly.
    The KC-46 Directorate has been working with the FAA, and the FAA 
has basically approved Boeing's process for accomplishing the ATC and 
STC effort. However, the Government and Boeing team must collectively 
work to ensure there are no major missteps in the initial ATC part, 
because that will--given the concurrency--propagate into the STC part 
of the certification.
    Risk #3: Flight Test. The test program, particularly for the aerial 
refueling certifications, will require efficient use and 
synchronization of FAA, developmental, and operational test resources 
to avoid driving additional test events, and to finish the test program 
objectives on schedule. While the KC-46 Directorate determined that 
Boeing has adequately justified their capability to achieve the 
proposed flight hours/month and effectiveness rate for FAA 
certification of the 767-2C with 65 hours/month and 85% effectiveness 
(i.e., a 15% re-fly rate), the KC-46 Directorate has some concern with 
Boeing's ability to achieve their proposed KC-46 sortie rate of 50 
hours/month and 85% effectiveness given the amount of coordination and 
synchronization with outside resources. The KC-46 Directorate is 
working with Boeing to identify resource requirements and constraints 
to mitigate this risk.
    Risk #4: Software. Boeing plans to reuse 70%-80% of existing 
software on the KC-46 program. Although a higher reuse rate might be 
expected on a commercial derivative aircraft program, historical 
experience on military programs would typically suggest a software 
reuse rate of 20%-30%. Because of this, the KC-46 Directorate is 
focusing on software early in the program to ensure Boeing puts the 
proper emphasis on this area, especially given the modifications to the 
commercial software required to accommodate classified/unclassified 
separation, information assurance and other military capabilities. The 
program will use simulation and hardware and software integration 
laboratories, solely dedicated to the KC-46 program, to provide early 
indication of software effectiveness. In addition, the Government is 
driving the requirement to capture leading software metrics to pinpoint 
areas of concern such that appropriate expertise and resources can 
engage early enough to prevent significant impacts to the program 
schedule.
    C. The Air Force will hold Boeing responsible for all contractual 
obligations. If Boeing does not meet its contractual obligations--for 
example, meeting the August 2017 RAA date with 18 aircraft--due to a 
contract-caused delay, then the Government would negotiate an adjusted 
schedule with Boeing and seek appropriate consideration from Boeing for 
that change. FAR 49.402-4 provides the contracting officer with the 
ability to ``permit the contractor, the surety, or the guarantor, to 
continue performance of the contract under a revised delivery 
schedule.'' In conjunction with reaching an agreement on a revised 
delivery schedule, FAR 49.402-7 requires the contracting officer to 
promptly ``assess and demand any liquidated damages to which the 
Government is entitled under the contract.''

                                  
