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



                                     

                         [H.A.S.C. No. 112-119]

                                HEARING

                                   ON
 
                   NATIONAL DEFENSE AUTHORIZATION ACT

                          FOR FISCAL YEAR 2013

                                  AND

              OVERSIGHT OF PREVIOUSLY AUTHORIZED PROGRAMS

                               BEFORE THE

                      COMMITTEE ON ARMED SERVICES

                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             SECOND SESSION

                               __________

          SUBCOMMITTEE ON TACTICAL AIR AND LAND FORCES HEARING

                                   ON

  FISCAL YEAR 2013 NAVY, MARINE CORPS AND AIR FORCE TACTICAL AVIATION 
                                PROGRAMS

                               __________

                              HEARING HELD
                             MARCH 20, 2012


                                     
[GRAPHIC] [TIFF OMITTED] TONGRESS.#13

                                     
  


              SUBCOMMITTEE ON TACTICAL AIR AND LAND FORCES

                 ROSCOE G. BARTLETT, Maryland, Chairman
FRANK A. LoBIONDO, New Jersey        SILVESTRE REYES, Texas
JOHN C. FLEMING, M.D., Louisiana     MIKE McINTYRE, North Carolina
TOM ROONEY, Florida                  JIM COOPER, Tennessee
TODD RUSSELL PLATTS, Pennsylvania    NIKI TSONGAS, Massachusetts
VICKY HARTZLER, Missouri             LARRY KISSELL, North Carolina
JON RUNYAN, New Jersey               MARTIN HEINRICH, New Mexico
MARTHA ROBY, Alabama                 BILL OWENS, New York
WALTER B. JONES, North Carolina      JOHN R. GARAMENDI, California
W. TODD AKIN, Missouri               MARK S. CRITZ, Pennsylvania
JOE WILSON, South Carolina           KATHLEEN C. HOCHUL, New York
MICHAEL TURNER, Ohio                 JACKIE SPEIER, California
BILL SHUSTER, Pennsylvania
DOUG LAMBORN, Colorado
                John Sullivan, Professional Staff Member
                  Doug Bush, Professional Staff Member
                     Scott Bousum, Staff Assistant
                            C O N T E N T S

                              ----------                              

                     CHRONOLOGICAL LIST OF HEARINGS
                                  2012

                                                                   Page

Hearing:

Tuesday, March 20, 2012, Fiscal Year 2013 Navy, Marine Corps and 
  Air Force Tactical Aviation Programs...........................     1

Appendix:

Tuesday, March 20, 2012..........................................    23
                              ----------                              

                        TUESDAY, MARCH 20, 2012
  FISCAL YEAR 2013 NAVY, MARINE CORPS AND AIR FORCE TACTICAL AVIATION 
                                PROGRAMS
              STATEMENTS PRESENTED BY MEMBERS OF CONGRESS

Bartlett, Hon. Roscoe G., a Representative from Maryland, 
  Chairman, Subcommittee on Tactical Air and Land Forces.........     1
Reyes, Hon. Silvestre, a Representative from Texas, Ranking 
  Member, Subcommittee on Tactical Air and Land Forces...........     2

                               WITNESSES

Holmes, Maj Gen James M., USAF, Assistant Deputy Chief of Staff 
  for Operations, Plans and Requirements, U.S. Air Force; and Maj 
  Gen John D. Posner, USAF, Director of Global Power Programs, 
  Office of the Assistant Secretary of the Air Force for 
  Acquisition....................................................    19
Kendall, Hon. Frank, Acting Under Secretary of Defense for 
  Acquisition, Technology, and Logistics, Office of the Secretary 
  of Defense.....................................................     5
Skinner, VADM W. Mark, USN, Principal Military Deputy Director to 
  the Assistant Secretary of the Navy (Research, Development, and 
  Acquisition), U.S. Navy; LtGen Terry G. Robling, USMC, Deputy 
  Commandant of the Marine Corps for Aviation, U.S. Marine Corps; 
  and RADM Kenneth E. Floyd, USN, Director of the Air Warfare 
  Division, U.S. Navy............................................    17
Sullivan, Michael J., Director, Acquisition and Sourcing, U.S. 
  Government Accountability Office...............................    10
Van Buren, David M., Acting Assistant Secretary of the Air Force 
  for Acquisition, U.S. Air Force................................     7
Venlet, VADM David J., Program Executive Officer for the F-35 
  Lightning II Program, U.S. Department of Defense...............     8

                                APPENDIX

Prepared Statements:

    Bartlett, Hon. Roscoe G......................................    27
    Holmes, Maj Gen James M., joint with Maj Gen John D. Posner..   112
    Kendall, Hon. Frank, joint with David M. Van Buren and VADM 
      David J. Venlet............................................    33
    Reyes, Hon. Silvestre........................................    29
    Skinner, VADM W. Mark, joint with LtGen Terry G. Robling and 
      RADM Kenneth E. Floyd......................................    76
    Sullivan, Michael J..........................................    51

Documents Submitted for the Record:

    Attachment 1: Prior GAO Reports and DOD Responses............   131

Witness Responses to Questions Asked During the Hearing:

    Mr. Turner...................................................   135

Questions Submitted by Members Post Hearing:

    Mr. Bartlett.................................................   139
    Mr. Critz....................................................   179
    Mr. Jones....................................................   171
    Mr. LoBiondo.................................................   176
    Mr. Turner...................................................   177
    Mr. Wilson...................................................   176
  FISCAL YEAR 2013 NAVY, MARINE CORPS AND AIR FORCE TACTICAL AVIATION 
                                PROGRAMS

                              ----------                              

                  House of Representatives,
                       Committee on Armed Services,
              Subcommittee on Tactical Air and Land Forces,
                           Washington, DC, Tuesday, March 20, 2012.
    The subcommittee met, pursuant to call, at 3:27 p.m., in 
room 2118, Rayburn House Office Building, Hon. Roscoe G. 
Bartlett (chairman of the subcommittee) presiding.

OPENING STATEMENT OF HON. ROSCOE G. BARTLETT, A REPRESENTATIVE 
FROM MARYLAND, CHAIRMAN, SUBCOMMITTEE ON TACTICAL AIR AND LAND 
                             FORCES

    Mr. Bartlett. Good afternoon. Our hearing will come to 
order. The subcommittee meets today to receive testimony on the 
Navy, Marine Corps and Air Force budget request for tactical 
aircraft programs for fiscal year 2013.
    We have a number of issues to cover today, but my opening 
remarks will focus on the F-35 program. The F-35 program is 
what has been called the centerpiece of DOD's [Department of 
Defense] long-term tactical aircraft planned force structure, 
with a major commitment of the Department's projected budget 
dedicated to F-35 acquisition and operations.
    To date, significant technology and manufacturing 
capabilities have been demonstrated. Yet, after having already 
made a major commitment of resources to the program, progress 
in the development and early procurement of the F-35 has fallen 
significantly short of expectations.
    Since the beginning of the final phase of development in 
2001, the projected cost of the total research and development 
and procurement program has grown from $233 billion to nearly 
$400 billion. Compared to the currently approved baseline, 
full-rate production had been delayed 5 years.
    The committee has supported, and continues to support, the 
F-35 program because of the high priority placed on the program 
by the Navy, Marine Corps and Air Force, and the recognition 
that a fifth-generation fighter is required to operate and 
achieve the effects necessary in the projected future threat 
environments.
    However, early on in the F-35 program the committee had 
concerns with the acquisition strategy. In 2005, we disapproved 
the Department's request for the first procurement funds for F-
35s, citing the request as premature, given the maturity of the 
development program. Each year, we have continued to express 
concerns regarding rushing into procurement too soon and 
planning an aggressive increase in annual production before 
required technology was demonstrated, design stability was 
achieved, and flight testing was complete.
    Unfortunately, the committee's and others' concerns 
regarding the program were well justified. As the Government 
Accountability Office reports, because of delays in research 
and development, and flight testing, the Department of 
Defense's projected request for procurement of F-35 aircraft 
through 2017 have been reduced by approximately 75 percent 
compared to the original schedule when the program began in 
2001.
    Compared to last year, the Department has removed 
procurement of 179 F-35 aircraft from its budget plan for 
fiscal years 2013 to 2017. Expectations for the F-35 program 
remain very high. There has been a significant commitment of 
this Nation's resources to the F-35 program, with major 
financial commitments required in the future.
    Much of the promised capability of the F-35 has yet to be 
demonstrated and, consequently, the future performance of the 
F-35 acquisition program remains of major concern. Our 
witnesses have an extraordinary challenge and responsibility in 
the execution of the F-35 program, and we appreciate their 
personal commitment--professional commitment to the task.
    Before we begin, let me call on the ranking member of the 
subcommittee, Mr. Reyes, for his opening remarks.
    [The prepared statement of Mr. Bartlett can be found in the 
Appendix on page 27.]

STATEMENT OF HON. SILVESTRE REYES, A REPRESENTATIVE FROM TEXAS, 
  RANKING MEMBER, SUBCOMMITTEE ON TACTICAL AIR AND LAND FORCES

    Mr. Reyes. Thank you, Mr. Chairman. And gentlemen, welcome 
this afternoon to this very important hearing.
    Today's hearing on Navy, Marine Corps and Air Force 
tactical aviation programs will focus on some, as the chairman 
just articulated, very challenging issues. First among these 
issues is how to keep the F-35 program on track, while we also 
modernize the rest of our tactical aviation fleet.
    However, I think that keeping the big picture in 
perspective is also important. Despite the recent round of 
proposed reductions, it appears to me that the United States 
will remain the world's undisputed leader in military aircraft 
capability for many years to come. We retain that lead not just 
because of the aircraft that DOD buys, but also because of the 
decades of knowledge our aviation industrial base has with 
respect to building sensors, advanced weapons, stealth 
capability and other aircraft features that other nations can 
only hope to some day have available.
    We also retain this lead because of the quality of our 
personnel, both in the air and also on the ground. A final 
reason we remain the preeminent military aviation power is the 
quality of our training, the quality of which is far beyond 
anything other nations even try to achieve. Simply put, we hold 
ourselves--as I think we should--to a very, very high standard.
    As a result, the challenges that we face in producing, 
manning and maintaining combat aviation capability must be put 
in the proper context. Overall, although I have some 
reservations about a few proposals, I believe that the budget 
request before the subcommittee will allow the United States to 
maintain its current dominance in the air for the foreseeable 
future.
    With respect to the topic of the first panel of witnesses 
here before us, the F-35 Joint Strike Fighter, I think it is 
important to keep a few critical issues in mind as Congress 
considers a way forward. For any major program, there is a 
constant balance to be struck between the urgency of the need 
for that program, the technical risks of the program and also, 
of course, the cost of the program.
    For the F-35, I think the need for the program is 
absolutely clear. The aircraft that we build in the next 10 
years will be fighting the wars of the future. We have to think 
about the long term. Given the likely dispersion of various 
antiaircraft systems over the upcoming decades, it seems clear 
to me that unless the United States maintains its edge in 
stealth and other technologies that we simply won't be able to 
project power, to deter aggression, and protect allies in the 
future.
    In short, to deter future enemies and win the wars of the 
future we need a large number of fifth-generation fighter 
aircraft, and the F-35 is the only program that we have to 
accomplish this goal. The second and third issues--technical 
risk and cost--can be summed up in the much talked about issue 
of concurrency, which refers to the simultaneous large-scale 
production and flight testing of the F-35 aircraft.
    While many Members are frustrated with the added costs of 
this approach to production and testing, it is important to 
point out that many of the decisions that led DOD to the 
current situation were made more than a decade ago. And 
significantly, over many years these decisions were, to a large 
degree, underwritten and endorsed by Congress.
    In my view, these decisions cannot now be undone without 
fundamentally breaking the program. However, much can be done 
to put the program on a better path. DOD has already cut back 
production of the F-35 dramatically in an effort to reduce the 
concurrency many Members here are worried about. Of course, 
this is also a limit to how far that F-35 production can be 
reduced before the program's production effort begins to 
unravel.
    DOD's current plan appears to be a good compromise between 
reducing concurrency and keeping production at a viable rate. 
While I would like to see higher production rates, I think that 
this plan is a responsible one and I intend to support it.
    However, while I support the need for the program, and 
DOD's concurrent effort to fix the problems that it is 
encountering, I do not believe the F-35 program deserves what 
is commonly referred to as a blank check. This program has 
changed dramatically. As an example, it is important to 
remember that according to the original schedule for the F-35 
we should be procuring 200 F-35s in fiscal year 2012, but 
instead we are procuring just 29.
    The program also faces significant challenges in terms of 
meeting critical technology requirements, keeping software 
development on time and on schedule, and reducing production 
costs. Overall, costs must be reduced, development must stay on 
schedule, and the government and the contractor must work 
together in a constructive manner in order to keep the program 
on track.
    For the many other programs we will cover in today's 
hearing, after reviewing the budget proposals I think the 
aviation programs for the Navy and Marine Corps are in 
relatively good shape. The Marines are on track to continue V-
22 production at slightly lower rates, and continue upgrades to 
Harriers and F-18s, while also continuing to invest in the 
future, with various unmanned aircraft R&D [research and 
development] efforts.
    The Navy's aviation portfolio also appears healthy, with 
fighter aircraft, helicopter and UAS [unmanned aerial systems] 
development and production remaining on track, when compared to 
last year. The Air Force, on the other hand, has proposed some 
changes that I am not yet fully convinced are in the Nation's 
best interest.
    Chief among those changes is the decision to mothball a 
practically new, brand-new, fleet of Global Hawk Block 30 
aircraft, each of which was procured at a cost in excess of 
$100 million. Just a few months ago, Congress was told that the 
Global Hawk Block 30 was a program critical to protecting our 
Nation, and that they were no--that there were no alternatives 
to achieve its requirements at a lower cost.
    We are now being told precisely the opposite, largely based 
on just a few changes to operational requirements which appear 
to be on shaky ground in terms of real-world needs. A change 
this dramatic, in such a short time, suggests a purely budget-
driven decision rather than one that reflects the appropriate 
balance of budget reality and operational requirements.
    Regardless of how the decision was reached, in my view no 
matter what the future holds, we will need more intelligence 
gathering capability and not less. If the United States does 
not reduce its forces in Afghanistan it will need even more ISR 
[intelligence, surveillance, and reconnaissance] capability to 
hunt for terrorists and deter potential enemies, and give our 
combat commanders the intelligence they need to properly advise 
the Commander in Chief. Given this high demand for ISR assets, 
I think a more gradual approach to the Global Hawk program may 
be required.
    So I look forward to today's testimony to seek further 
information on this and many other issues. And with that, Mr. 
Chairman, thank you for calling this hearing, and I yield back 
my time.
    [The prepared statement of Mr. Reyes can be found in the 
Appendix on page 29.]
    Mr. Bartlett. Thank you. We have two panels of witnesses 
this afternoon. The first panel will provide testimony on the 
F-35 program. The second panel will include Navy, Marine Corps 
and Air Force acquisition and requirements officials to provide 
testimony on their respective tactical aircraft programs. We 
welcome our witnesses today.
    We have an administrative challenge in our hearing today. 
We just finished a series of votes. In a little more than an 
hour we expect them to call another series of votes. That will 
be the last series of votes. It will last for roughly an hour. 
And after that, there is an off-the-Hill event that will take 
at least half of the members away from our committee.
    So we will--without objection, your written testimony, of 
course, is a part of the permanent record. We will proceed with 
your oral testimony. We will abbreviate our questions and, with 
your permission, we will give you questions for the record 
because there are questions which we must have answered in our 
oversight responsibility.
    We will submit those for the record, and then we will 
proceed with the second panel so that we can get their 
testimony on the record and some abbreviated questions before 
the expected votes in a little more than an hour.
    Panel one, the Honorable Frank Kendall, Acting Under 
Secretary of Defense for Acquisition, Technology and Logistics; 
Mr. David M. Van Buren, Acting Assistant Secretary of the Air 
Force for Acquisition; Vice Admiral David Venlet, a Program 
Executive Officer for the F-35 aircraft program; and Mr. 
Michael J. Sullivan, Director of Acquisition Sourcing and 
Government Accountability Office.
    Gentlemen, you may proceed. Thank you.

  STATEMENT OF HON. FRANK KENDALL, ACTING UNDER SECRETARY OF 
 DEFENSE FOR ACQUISITION, TECHNOLOGY AND LOGISTICS, OFFICE OF 
                    THE SECRETARY OF DEFENSE

    Mr. Kendall. Chairman Bartlett, Ranking Member Reyes, 
members of the subcommittee, we appreciate the opportunity for 
the Department to testify today on the Joint Strike Fighter 
program. I am Frank Kendall, Acting Under Secretary of Defense 
for Acquisition, Technology and Logistics.
    With me, of course, are Mr. David Van Buren, as you 
mentioned the Air Force acquisition executive, who currently 
serves as the acquisition executive for the Joint Strike 
Fighter program; and Vice Admiral David Venlet, the Program 
Executive Officer for Joint Strike Fighter.
    I would like to mention that next week Dave Van Buren will 
depart the Department of the Air Force after 4 years of 
incredibly valuable service in the Air Force's acquisition 
leadership. We in the Department are tremendously thankful for 
the contributions Dave has made across the board in 
strengthening Air Force acquisition, by bringing strong 
professional technical management and business skills and 
acumen to everything that he does.
    Dave will be greatly missed, and the Department and I are 
very thankful for his service to the Nation. Vice Admiral 
Venlet came on board to run the Joint Strike Fighter program 
early in 2010, and we are also deeply grateful for his 
leadership on this program.
    The Joint Strike Fighter is the centerpiece of our future 
tactical aviation capability, and a key to implementing our 
recently published strategic guidance. Last fall, the 
Department engaged in a strategy and budget review in which 
everything, and I do mean everything, was on the table. After a 
careful look at the Joint Strike Fighter [JSF] program, the 
Department determined that we do need the JSF, that we need all 
three variants of the fighter, and that we need the planned 
inventory of 2,443 jets.
    It is essential for the Department to deliver a program 
that both meets these needs and is also affordable. 2011 was a 
year of strong progress in the Joint Strike Fighter test 
program. The program made continued progress in technical and 
production maturity. However, you must recognize that there is 
still a long way to go for JSF.
    The flight test program is approximately 20 percent 
complete, and many of the more challenging elements of flight 
test are still ahead of us. Our focus is reflected in the 
written testimony. It is on managing risk and controlling 
program production and sustainment costs. The JSF program is 
undergoing the critical transition from development to 
production.
    Historically, this is always a difficult phase for any 
program, but particularly so for a high-performance aircraft. 
The JSF, however, has been more difficult because the program 
began production very early, as was mentioned when we discussed 
concurrency, well before flight testing had begun.
    This decision resulted in an unprecedented level of 
concurrency, which has subsequently driven the need for 
significant changes in the program. With this year's budget, I 
believe we are now set on a course for program stability. The 
JSF program is now operating on a baseline that does account 
for the risk of additional design changes.
    The technical baseline review has given us a devolvement 
program that is realistic and includes margin to deal with 
unknown issues that may, and are likely to, arise. The 
production adjustments in the fiscal year 2013 budget give us a 
procurement profile that balances production efficiency to 
concurrency risk and delays production ramp-up until testing is 
more complete.
    The decision to adopt this profile was based, in part, on a 
quick-look review, which I commissioned last fall, and looked 
in detail at the concurrency risk in the program and the 
knowledge points that we need to achieve to retire that risk. 
Another step we are taking to manage that risk is that for 
production lots 6 and 7 we have developed a contracting 
approach that allows us to make event-based production 
commitments.
    Our contracting strategy also provides strong incentives 
for Lockheed to accelerate the incorporation of concurrency 
changes and retire concurrency risks as soon as possible, by 
ensuring that they share in concurrency costs starting in the 
fifth production lot. David Van Buren will go into more detail 
on our contracting approach in his statement.
    In 2012, we are continuing to increase our focus on 
sustainment costs, which will ultimately be the largest element 
of cost in the program. The program office, my staff, and the 
services began to tackle this issue over the last year, 
carrying out an initial review of the O&S, operation and 
support, costs. This effort focused on flying hours, repair 
parts, manpower and depot-level repairable items and 
consumables.
    The Air Force is also currently reevaluating its basing 
plans for F-35, another significant cost driver. This year, we 
will complete the business case analysis for sustainment, and 
take additional action to reduce costs. We will continue to 
attack Joint Strike Fighter operations and support costs 
throughout the program's full life cycle.
    Let me close by saying that I appreciate the work this 
subcommittee has done in providing oversight to the Joint 
Strike Fighter program. We deeply appreciate the support you 
give to the men and women of the armed services and to the 
Department generally day in and day out.
    With your permission, I would like to ask Mr. Van Buren to 
briefly discuss our contracting strategy, and Admiral Venlet to 
discuss the status of the development and production elements 
of the program.
    [The joint prepared statement of Mr. Kendall, Mr. Van 
Buren, and Admiral Venlet can be found in the Appendix on page 
33.]

STATEMENT OF DAVID M. VAN BUREN, ACTING ASSISTANT SECRETARY OF 
         THE AIR FORCE FOR ACQUISITION, U.S. AIR FORCE

    Mr. Van Buren. Mr. Chairman, Ranking Member Reyes, members 
of the committee, thank you for the opportunity to address this 
committee again regarding the F-35. Mr. Chairman, I would also 
like to thank you for your leadership in support of small 
business forums in which I was privileged to participate while 
I was in my position.
    Events such as these are vital for our national economy. I 
would like to echo Mr. Kendall's comments regarding the 
importance of the F-35 program. Having been the F-35 
acquisition executive since 2009, I believe the Department has 
taken numerous proactive steps in the management of the 
program.
    These modified business strategies over this time period 
include the following: number one, a complete restructure of 
the remaining development fee to be paid only when on-schedule 
accomplishment by the industry team is accomplished; number 
two, a change from a cost-plus incentive fee to a fixed-price 
incentive fee in LRIP [low-rate initial production] contract 
number four, which was 2 years earlier than had been planned.
    That new contract structure included a 50-50 share line and 
a tight, 120 percent ceiling. Number three, in December of last 
year contracts for Lot 5 were initiated via undefinitized 
contract actions, or UCAs, which will be definitized as fixed-
price incentive fee contracts.
    In addition, the government's cost risk is being mitigated 
by transferring some responsibility for concurrency cost risk 
to the prime contractor for the first time. Number four, the 
Department's Director of Defense Pricing led an LRIP-5 should-
cost review of the contractor's submitted proposal. This effort 
has proved essential in informing Lot 5 negotiations.
    We hope to definitize this contract in the first half of 
the year. Five, the Department is implementing an event-based 
contracting strategy for LRIP Lot 6 and 5 that buys aircraft 
production quantities based upon development and test progress. 
First, we will award 25 aircraft in Lot 6 out of 31 authorized 
and appropriated in fiscal year 2012.
    Second, we will provide a means to procure anywhere from 
zero to six of the remaining fiscal year 2012 funded Lot 6 
aircraft, concurrent with the Lot 7 contract award in 2013. We 
will link the total aircraft quantity ultimately procured in 
Lot 6 to Lockheed's development performance and concurrency 
cost risk reduction efforts.
    Number six, the initial Lot 6 contract award for 25 
aircraft will require a UCA to ensure that the production flow 
is not disrupted. However, the Department does not intend to 
award the Lot 6 UCA for 25 aircraft until essential agreement 
is reached for Lot 5. The Department intends to award the 
remaining Lot 6 variable quantity aircraft, as well as Lot 7 
aircraft, through fully definitized contract actions in fiscal 
year 2013.
    It is important that the industrial team demonstrate 
performance and help us to further confidence in the execution 
and affordability of the program. From my perspective, 
affordability for both production and sustainment of the F-35 
has our greatest attention to ensure that the warfighters have 
a force structure that meets operational needs.
    Thank you, and I will look forward to your questions.
    [The joint prepared statement of Mr. Van Buren, Mr. 
Kendall, and Admiral Venlet can be found in the Appendix on 
page 33.]
    Mr. Bartlett. Thank you very much for your testimony.
    Admiral Venlet.

 STATEMENT OF VADM DAVID J. VENLET, PROGRAM EXECUTIVE OFFICER 
 FOR THE F-35 LIGHTNING II PROGRAM, U.S. DEPARTMENT OF DEFENSE

    Admiral Venlet. Thank you, Chairman Bartlett, Ranking 
Member Reyes, and members of the committee for inviting me to 
appear before you today on the F-35. It is my great honor to 
serve as the program executive officer with an outstanding Air 
Force, Navy, Marine, and international program team and 
supported by the world's best technical knowledge workforce 
found in the Air Force Aeronautical Systems Center at Dayton, 
Ohio, and Naval Air Systems Command at Patuxent River, 
Maryland.
    That support, integrated into the daily actions of the 
joint program office team, made it possible to create the 
adjusted, realistic program plan and is critical to future 
dependable program performance. The performance of the F-35 
industry team for the Department of Defense and our allies in 
engineering and testing fundamentals, in business fundamentals, 
and in sustainment will be successful to the degree our 
government technical knowledge workforce remains intimately 
involved in the program every step of the way.
    I carry within me an understanding that what people believe 
about the F-35 is affected, and depends in some measure, upon 
what I believe and what I transparently communicate about the 
program. So let me begin with what I believe about the F-35.
    I believe the F-35 is a critical presence in the combined 
force battlespace. It makes many other systems and capabilities 
and effects better because of the presence of the F-35 sensors. 
It is a critical presence in many nations as a powerful 
combined force capability to act and protect like-minded 
nations that want their people to live safe from aggression in 
freedom and opportunity.
    I believe the F-35 is a bond of joint strength across all 
our services. It is a bond of capability and a bond 
economically across many nations that raises the level of 
technology benefit in our militaries and our industries. I 
believe the F-35 is an assurance of powerful effectiveness, it 
is an assurance of immediate powerful effectiveness as soon as 
it is initially fielded, and it is the best possible growth 
platform to incorporate future advances in weapons sensors and 
networks for the next decades ahead.
    It is an assurance for the men and women in all our 
services, and those we are still raising who will volunteer to 
serve something greater than themselves that they will succeed 
in every mission and return home safely to their loved ones. 
With that context, it is less what keeps me awake at night and 
more what makes me eager to be at work every day.
    The F-35 has schedule and budget realism now, going 
forward. It is transparent in the discovery and correction of 
issues arising in tests that are typical in all fighter 
aircraft development. The service systems commands are closely 
involved and contributing to the correction of issues in view 
now and that will arise in remaining tests.
    That creates confidence in delivering required capabilities 
suitable and effective from the sea and around the world. There 
is data and demonstrated performance in hand that gives 
confidence the F-35 basic design is sound and has clear 
potential to deliver the capability we expect. There is a lot 
of tests ahead.
    Integrating the systems and sensors and expanding the 
envelope will bring discovery that sound systems engineering 
will solve. There has been very good engine and airframe 
contractor responsiveness and progress in many areas since we 
appeared before your committee last year. STOVL [short take-
off/vertical landing] flight tests met plans and expectations, 
and completed a highly successful initial sea trial aboard USS 
[United States Ship] Wasp.
    In addition to the impressive stability, control and 
performance of the STOVL in slow flight and vertical landing, 
the F-35 has flown to its maximum speed and hardest turn 
limits. It is a testimony to the very effective and impressive 
marriage of engine and airframe.
    Three leading program issues occupy my focus for 2012. 
Technical and cost issues and challenges all certainly exist; 
all are being worked. I mention here what are the critical and 
significant few that, if successfully advanced, will bring 
beneficial tailwind for the entire program and genuine value 
for the Department and our partner nations.
    First, software development and performance, and its 
dependable delivery of capability. Second, concurrency-changing 
corporation improvement and delivery of affordable full service 
life jets. Third, production quality, and its ultimate result 
on affordable price for the U.S. and our allies.
    All three have a common fundamental that will advance the 
external result and performance, and keep reality clearly in 
view. Systems engineering-based, close-loop analysis and 
corrective action will be required in steady and committed 
execution throughout the industry team, primes and suppliers.
    Rigorous management control by the joint program office, 
supported by the service systems commands, will be applied with 
a development dial-in production, reality and database 
negotiations and focus on affordable delivered capability, 
which is our only meaningful external result.
    Presently, in the program, performance is all that matters. 
I look forward to your questions.
    [The joint prepared statement of Admiral Venlet, Mr. 
Kendall, and Mr. Van Buren can be found in the Appendix on page 
33.]
    Mr. Bartlett. Thank you very much.
    And now Mr. Sullivan from the Government Accountability 
Office. Thank you.

  STATEMENT OF MICHAEL J. SULLIVAN, DIRECTOR, ACQUISITION AND 
        SOURCING, U.S. GOVERNMENT ACCOUNTABILITY OFFICE

    Mr. Sullivan. Good afternoon, Chairman Bartlett, Ranking 
Member Reyes, members of the subcommittee. It is a pleasure to 
be here today to discuss the status of the F-35 acquisition.
    Everyone is aware of the past history of the program. The 
chairman related additional costs and schedule growth on this 
program since its inception. Seventy percent cost growth since 
2001, a full-rate production date that has been delayed by 
about 6 years. The program has been beset with problems as a 
result of concurrent development, testing and procurement.
    Rather than dwell on how we got here for this statement, I 
would like to make a few points about what we believe the road 
looks like moving forward. The Department has taken positive 
steps to restructure the program over the past few years, and 
we believe the new strategy has reduced risk from the effects 
of concurrency by reducing the number of aircraft that we will 
buy while it is still testing.
    The original strategy would have had almost 1,600 aircraft 
on contract by the end of flight testing in 2017. The new 
strategy has reduced that number to 365. While this delays 
capability to the warfighter, it also reduces the risk of 
incurring additional modification and retrofit cost to the 
aircraft and to the taxpayer.
    In addition, the revamped test program has gained much 
momentum in the past year, and has now completed about 20 
percent of its flight testing. While we are encouraged by these 
signs of momentum, plenty of risk remains as the program moves 
forward with concurrent testing and production.
    We have identified five areas of concern that we believe 
are most important at this point. First, software development 
is behind schedule. The software complexity on this program has 
no rival. The lines of code now needed to achieve full 
capability is estimated at $24 million, three times that of the 
F-22 Raptor. And delivery of the final block of software--that 
which gives the aircraft most of its advanced capabilities--is 
still very much at risk.
    Second, engineering changes from flight testing continue to 
be abnormally high for this point in production, which 
continues to put pressure on both development and procurement 
costs. The program will not know the true cost to produce the 
F-35 until these changes tail off and the manufacturing 
processes can stabilize.
    Third, funding assumptions for the program now average 
about $13 billion per year for the next 23 years. This, during 
a time of extreme budgetary pressure. Fourth, mission system 
development is only about 4 percent validated at this point, 
and two critical systems--the helmet-mounted display and the 
logistic known as ALIS [Autonomic Logistics Information 
System]--are continuing to be problematic for the program.
    And fifth, the supplier base for the F-35 is large, global, 
and complex. It will continue to challenge the program's 
management capacity as production ramps up in the future. The 
restructured program has already calculated the impacts of 
concurrency on cost and schedule so far.
    Cost overruns on the first four annual procurement 
contracts now total more than $1 billion, $673 million of which 
is the government's share. This adds about $11 million to the 
price tag of each of the 63 aircraft purchased under those 
contracts. In addition, the program now estimates the cost to 
retrofit aircraft produced before the completion of flight 
testing is about $373 million.
    As I said earlier, this retrofit cost will grow as 
information from flight testing creates additional engineering 
changes that must be absorbed by a manufacturing process that 
is struggling for stability. The planned completion of flight 
testing is now set for 2017. This means four more years of 
potential engineering changes.
    So we believe the Department has improved the outlook for 
the program to deliver aircraft more predictably in the past 2 
years by adding time and money, and by reducing near-term 
purchases of the aircraft. However, there are still significant 
risks owing to the F-35's complexity, remaining concurrency 
between testing and production, and its requirement for large 
amounts of funds on an annual basis moving forward.
    Mr. Chairman, this concludes my opening statement. I look 
forward to questions.
    [The prepared statement of Mr. Sullivan can be found in the 
Appendix on page 51.]
    Mr. Bartlett. Thank you all very much for your statements.
    As is my custom, I will reserve my questions until others 
have had a chance to ask theirs, hoping they will have asked 
the ones I would have asked.
    Mr. Reyes.
    Mr. Reyes. Thank you, Mr. Chairman. I have a number of 
questions that I want to include for the record, but I did want 
to start maybe with a question to Mr. Sullivan. You know, given 
the complexity of the technologies incorporated into the F-35 
program, would it be reasonable for anyone to think that this 
program could conceivably have a normal testing period?
    And specifically, what are the chances that it won't be 
completed by 2017, as you just testified to?
    Mr. Sullivan. I think, given the complexity of the 
technologies they are trying to bring together, I would say 
that probably the program has been through most of the--the 
real tough discovery in terms of technologies that they have 
had to integrate. So as I said in my statement, past history 
has been tough on this program.
    I probably am a little optimistic that they have been 
through an awful lot of that. And I would focus most of the 
problem now on software. I think software--the development of 
the software that they need to make this aircraft fully combat-
capable--is still as complex as anything on earth, I think it 
is going to drive the test program. The test program still has 
risk in it, as a result of that. The mission systems that are 
laden with software, as well, are driving the test program. The 
program has to stay on top of software and these mission 
systems in order to make sure the test can complete in a timely 
fashion.
    It is still very risky, I think.
    Mr. Reyes. From your viewpoint and your experience, is 
there any kind of--or is there a way to compare this to past 
programs, for instance the F-22 program? Did it ever, in terms 
of comparison, have the same kinds of challenges and----
    Mr. Sullivan. Yes, oh yes. I think there are comparisons 
you could make to the F-22. I would say the F-22, in many ways, 
was more complex than this program. I think this program 
probably started with more mature technologies across the 
board.
    But again, I will go back to the software on this program 
that I think is more complex than the F-22. And I think that 
typically what happens on these big programs, like the F-22 and 
the JSF, if this concurrency that you run into, you have 
concurrent flight testing as you are trying to ramp up 
production.
    The manufacturing process just are never able to get stable 
because there is so much information coming in from testing and 
so many engineering changes that are going on. That, on this 
program, is very similar to what took place on, for example, 
the F-22.
    Mr. Reyes. Of the five concerns that you raised, I was 
mostly struck by the supplier base being large, global and 
complex. Did you give those issues to us in rank order of 
concern, or were they just five issues that you have----
    Mr. Sullivan. They were--you know, I didn't think of it 
quite--I would say that software is number one.
    Mr. Reyes. Number one, right?
    Mr. Sullivan. It is probably in some rank order there. I 
would say that the supplier base is a concern, but maybe the 
fifth one of those. Yes, it is a very complex global system.
    Mr. Reyes. Okay. Thank you, Mr. Chairman.
    Mr. Bartlett. Thank you very much.
    Dr. Fleming.
    Dr. Fleming. Yes, thank you, Mr. Chairman.
    Secretary Van Buren, in my district is Barksdale Air Force 
Base, which is a long-range bomber. So I am going to take this 
opportunity to ask you a couple of questions about that, if it 
is okay. I am encouraged by the support in the fiscal year 2013 
budget request to continue development of the long-range 
bomber.
    I want to help make the Department, make this program, a 
success, and invite you to stay in touch, as we are very 
interested in what is going on with that. In recent years, we 
have heard a variety of thoughts from the Air Force on this 
bomber. It may be manned, unmanned, or both; maybe nuclear-
maybe conventional-capable, or both.
    And it will have penetrating capabilities for anti-access 
environments. It may have a significant intelligence 
surveillance and reconnaissance capability. The Secretary of 
Defense has mentioned figures of 80 to 100 aircraft, at a unit 
cost of $550 million, with a target delivery for the mid-2020s.
    He also mentioned the program would allow a streamlined 
acquisition process. My question is, can you share with the 
committee your level of confidence that a new bomber will be 
designed in such a way to minimize risks and to avoid 
requirements creep?
    Mr. Van Buren. At this particular stage of the development, 
the program is on track. As you well know, sir, many of the 
details of the development activity are classified. What is not 
classified is the overall funding level for the 5-year defense 
plan is roughly $6.3 billion.
    I have every confidence that the way we are proceeding on 
this would not--taking on too much risk gives the program a 
much higher probability of success in achieving the goals that 
Secretary Gates wrote when he wrote that guidance in the 
beginning of last calendar year.
    So at this particular point, I would have to defer to 
another venue for more details on the program. But I have 
confidence in the way the program is being currently run.
    Dr. Fleming. You know, 80 to 100 bombers, at $550 million. 
That really sounds good. But, you know, in the past, with the 
B-2 and other programs, we have had requirement creeps which is 
sort of a pejorative, where we start in one direction and we 
begin adding on more capabilities, or attempt to, and then the 
costs go out of sight.
    Do you have reassurance that that is not going to happen in 
this case?
    Mr. Van Buren. I believe the Department has been much more 
proactive and disciplined with regard to requirements. As you 
probably know, I worked on the B-2 for 9 years. I can say that 
an evidence of that is with regard to the KC-46A tanker which, 
since contract award a little bit more than a year ago, has had 
zero contract changes due to requirements changes.
    And so I feel good about where we are with the development 
and the stability of our current design approach.
    Dr. Fleming. And the number 80 to 100, do you agree with 
that number?
    Mr. Van Buren. That is the guidance from the Secretary, in 
which we embarked on the program.
    Dr. Fleming. Okay, well, again I would love to stay in 
touch with your office on this. We want to monitor this. 
Obviously, we have an aging B-52 fleet which is a wonderful 
bomber, but it is being flown by the grandsons of the builders. 
And someday it will have to be replaced. And even if we start 
today, it will be another decade at least.
    So we definitely want to keep helping this along to make 
sure it stays on target.
    Mr. Van Buren. Yes.
    Dr. Fleming. With that, I yield back, Mr. Chairman.
    Mr. Bartlett. Thank you. As per committee rules, those 
present at gavel fall are recognized in the order of their 
seniority on the committee. Those arriving after gavel fall, in 
their order of appearance in the committee.
    Mr. Runyan.
    Mr. Runyan. Thank you, Mr. Chairman. Just a few questions 
for Assistant Secretary Van Buren. What major weapons systems 
have you successfully procured over the last 10 years?
    Mr. Van Buren. I have been in the position in the 
government for 4 years. I would say the procurement of the 
tanker, the development of the tanker, a success. I would say 
the JASSM [Joint Air-to-Surface Standoff Missile] missile is 
running well now, after some production difficulties.
    I would say that the Project Liberty aircraft, 37 aircraft, 
were procured for the warfighter in a span of 22 months. Of the 
Predator and Reaper, we currently have 120 Reaper aircraft in 
high-rate production. Obviously, the MQ-1/MQ-9 fleets are 
around the world doing ISR missions on a daily basis. Those 
would be some.
    Mr. Runyan. And how many of them have been at cost and on 
time?
    Mr. Van Buren. Project Liberty was certainly on time, even 
at accelerated rate. The cost-effectiveness of MQ-1 and MQ-9, I 
think, are very, very good. In fact, at certain times the 
manufacturer has been producing aircraft ahead of schedule. The 
production of the air vehicles are not a limiting factor.
    And there have been others. BACN [Battlefield Airborne 
Communications Node], a platform based on the Global Hawk Block 
20, was a JUON [joint] urgent operational need, which went to 
field in a span of approximately 8 months.
    Mr. Runyan. So I just really asked those questions not only 
for the Air Force, but many other branches also. That there is 
a systemic procurement problem in the Department and throughout 
each branches. And it is, frankly, not being addressed. We kind 
of take it as this is how we are going to conduct business.
    And at the end of the day, our responsibility and the 
oversight that we have to the taxpayers is, I think many of us 
feel, being ignored. As you said there, even being the on-cost 
and on-time, that list is nowhere near the original procurement 
list that you gave me.
    And it is something that I know needs to be addressed, and 
I just wanted to put that out there. Because it gets 
frustrating, day in and day out.
    I guess, Chairman, I am going to actually yield back so we 
can move on. Thank you.
    Mr. Bartlett. Thank you very much.
    Mr. Turner.
    Mr. Turner. Thank you, Mr. Chairman.
    Doctor Kendall, the Department of Defense, DOD, has been 
the catalyst in the development of the unmanned aerial aircraft 
system, UAS, and it's certainly its market. The volume of UAS 
flights for commercial and governmental non-military 
applications could equal those being flown by military 
operations.
    Future growth of the civilian UAS market is dependent on 
the ability of non-military UAS proponents to operate their UAS 
systems in the National Airspace System. As such, there is a 
strong innovative growth market for testing, research and 
development.
    Inability to adhere to the FAA [Federal Aviation 
Administration] regulatory requirements is the major problem 
facing the military and commercial UAS sector in operating in 
domestic U.S. space. More specifically, flight rule 14 requires 
a sense-and-avoidance capability. Manned aircraft systems 
operating with specified FAA-controlled--within FAA-specified 
control areas, or with sense-and-avoid equipment, are able to 
adhere to this rule.
    Since UASs do not have pilots on board or collision and 
avoidance technology, they are not currently able to adhere to 
FAA rules. Congress has placed the requirement on FAA 
administrator to develop plans to accelerate the integration of 
unmanned aerial systems into the National Airspace System.
    Currently, the NDAA [National Defense Authorization Act] 
budget request contains $34.6 million for sense-and-avoidance 
development to further UAS operations in the National Airspace 
System.
    Dr. Kendall, do you believe that the FAA has articulated 
and documented the sense-and-avoid technology requirements in 
sufficient detail to allow the DOD to develop a solution that 
will allow UAS operations in these new airspaces? In other 
words, is the $34.6 million being spent on sense-and-avoid 
technologies going toward the fulfillment of a documented FAA 
requirement with a defined acceptable solution?
    Given the current FAA safety of flight requirements, sense-
and-avoid requirements, and our technological capabilities, how 
long do you think that it might take before we would be able to 
integrate UAS into the National Airspace System, and do you 
also similarly have concerns as to the coordination between DOD 
and the FAA with respect to our National Airspace System and 
UAS integration?
    Thank you.
    Mr. Kendall. Thank you, Congressman Turner. I am going to 
have to take a lot of that for the record because I wasn't 
prepared to testify on that today. But I can tell you that we 
are aware of the statutory requirements and the Department is 
working closely with the FAA to address the issues that you 
described.
    But I am going to have to get the details back to you for 
the record, if that is all right.
    Mr. Turner. That is fine. Thank you, Mr. Chairman.
    [The information referred to can be found in the Appendix 
on page 135.]
    Mr. Bartlett. Mrs. Hartzler.
    Voice. She is gone.
    Mr. Bartlett. Oh, she is gone? Okay. She is back. Okay, 
there you go.
    Mrs. Hartzler. Thank you, Mr. Chairman. Sorry.
    I appreciate the work that you are doing there. I know 
everyone has been kind of frustrated with the development of 
the F-35 and its hitches along the way. I just wanted to 
clarify, when do you anticipate that they will be operational--
2017, is that----
    Admiral Venlet. The IOCs [initial operational capability] 
are not declared in our program baseline, but the production 
will proceed to deliver a number of jets. The Block 2 initial 
warfighting capability in our current plan is projected to be 
released to the fleet for all three variants in 2015. And Block 
3, in our schedule, will be released to the fleet in 2017.
    There will be the detailed initial operational tests to go 
on after that, but the production will produce a significant 
number of aircraft with those capabilities in those years.
    Mrs. Hartzler. Okay. What are the key issues in 
deficiencies in the aircraft and engine manufacture that need 
to be addressed in order to ramp up production?
    Admiral Venlet. The principal benefit we are getting from 
these years of level quantities that Mr. Sullivan spoke about, 
I believe, are a base camp time that are going to bring the 
benefit of getting that supplier base to perform dependably. 
There is the need to get world-class quality aspects to emerge 
in the aircraft production side.
    It is doing much better in the engine side. I don't have 
any concerns with the engine production or quality at this 
point. And I don't have deep, long-term concerns, but it needs 
to appear quicker on the aircraft side. And I believe this 
range of level quantity in this--about 30 for these next couple 
years--will help that.
    Mrs. Hartzler. Okay. What are contractors and suppliers 
doing to improve, and what time frame are we looking at?
    Admiral Venlet. They are addressing the--particularly, 
software is important to production. We need to produce 
productionized, fleet-releasable software each year because we 
are accepting production aircraft. So that adds a complexity to 
the development.
    You just don't work on your software for the test program. 
You have to do it for production acceptance, as well. So that 
is being worked on. The software also in the off-board system, 
called ALIS that Mr. Sullivan mentioned, that is the ground 
maintenance information system that is not present in any 
aircraft system in the fleet today.
    It is critical to F-35. Those would be the most important 
things.
    Mrs. Hartzler. Okay. Mr. Sullivan mentioned that some of 
the suppliers are global, and that kind of caught my attention. 
What aspects of the F-35 are being supplied by foreign 
companies?
    Admiral Venlet. The most visible, when you look at the 
aircraft, is the aft fuselage by BAE [British Aerospace 
Industry] Systems. And there are smaller components--the 
ejection seat, also, from Martin-Baker in the United Kingdom. 
Turkey is contributing to center fuselage to Northrop Grumman. 
Alenia in Italy is commencing early work on wings, just to name 
a few of the more significant ones.
    Mrs. Hartzler. What is the policy of our country towards 
making sure that our suppliers are American-based?
    Admiral Venlet. That is a very much important part of the 
program. This program was conceived and initiated with eight 
other partner countries at the outset. And there is not a work-
share. There is a concept of best value from the source of 
supply to produce the end airplane.
    So I do not speak to industry about sharing the work around 
our partner countries. I speak to them on the basis of the best 
price and the best quality, and leave that to them to deal 
with.
    Mrs. Hartzler. Okay. Thank you, gentlemen.
    Thank you, Mr. Chairman.
    Mr. Bartlett. Thank you very much.
    There are several additional questions that we need to ask. 
In the interest of time, since there are going to be votes 
fairly quickly, we will ask those questions for the record.
    I just have one request. What we do here seems to fit 
Albert Einstein's definition of insanity. I have been here 
nearly 20 years now, and every program--essentially every 
program--I have watched here has run over in both time and 
dollars, sometimes monstrously.
    I hope that when you are pursuing this program that you 
will keep your records so that when we do a post mortem when it 
is finished it will have a prescription so as how not to do 
this in the future.
    Thank you very much, and now we will take a brief recess 
while we excuse you and we empanel our next set of witnesses.
    Admiral Venlet. Thank you, Mr. Chairman.
    [Recess.]
    Mr. Bartlett. Our subcommittee will come to order again. We 
will now have our second panel of witnesses. Vice Admiral Mark 
Skinner, USN [United States Navy], Principal Military Deputy to 
the Assistant Secretary of the Navy for Research, Development 
and Acquisition.
    Lieutenant General Terry Robling, Deputy Commandant of the 
Marine Corps for Aviation; Rear Admiral Kenneth Floyd, Director 
of the Air Warfare Division of the U.S. Navy; Major General 
James Holmes, Air Force Assistant Chief of Staff Operations, 
Plans and Requirements; and Major General John Posner, Air 
Force Director of Global Power Programs.
    Without objection, all witnesses prepared statements will 
be included in the hearing record.
    And we will now begin the testimony with Admiral Skinner.

  STATEMENT OF VADM W. MARK SKINNER, USN, PRINCIPAL MILITARY 
   DEPUTY TO THE ASSISTANT SECRETARY OF THE NAVY (RESEARCH, 
   DEVELOPMENT, AND ACQUISITION), U.S. NAVY; LTGEN TERRY G. 
   ROBLING, USMC, DEPUTY COMMANDANT OF THE MARINE CORPS FOR 
 AVIATION, U.S. MARINE CORPS; AND RADM KENNETH E. FLOYD, USN, 
           DIRECTOR OF WARFARE INTEGRATION, U.S. NAVY

               STATEMENT OF VADM W. MARK SKINNER

    Admiral Skinner. Chairman Bartlett, Ranking Member Reyes, 
distinguished members of the subcommittee, it is our honor to 
appear before you today to discuss the Department of the Navy's 
tactical aviation procurement programs. Testifying with me 
today are Lieutenant General Terry Robling, Deputy Commandant 
for Marine Corps Aviation, and Rear Admiral Kenneth Floyd, the 
Navy's Director of Warfare Integration.
    With the permission of the committee, I will keep our oral 
remarks brief. The fiscal requirement in the Budget Control Act 
of 2011 required hard choices to be made. In response, the 
Department of the Navy deferred procurement of F-35s, P-8s, E-
2Ds,
F/A-18Es-Fs and MV-22s, and terminated the MRMUAS [Medium Range 
Maritime Unmanned Aerial System] program and JAGM [Joint Air-
to-Ground Missile] investment in this President's budget 
request.
    We are facing tremendous challenges--the budget reductions 
necessitated by the Budget Control Act, and aging aircraft 
inventory and significant threats. During these austere times, 
we must persist in modernizing and recapitalizing our naval 
aviation forces and increase our capability through force 
multipliers such as Naval Integrated Fire Control-Counter Air 
and using the should-cost/will-cost methodology to bring more 
affordable systems to our warfighters.
    Affordability will be our business focus over this FYDP 
[Future Years Defense Program] so we can continue to deliver 
capabilities and meet the warfighters' needs. With your 
assistance, we are leveraging our buying power with successful 
multi-year procurements on the F/A-18, B-22 and H-60. And 
together, we are saving the taxpayers over $1.5 billion.
    Last year, we embraced our past history as naval aviation 
celebrated our centennial. This year, Marine Corps Aviation 
will do the same. New history was also written this past year, 
when we conducted the first F-35 shipboard operations very 
successfully aboard the USS Wasp.
    We deployed the first EA-18G Growler expeditionary squadron 
to Iraq in November of last year, and then successfully 
redeployed the squadron on short notice to support Operation 
Odyssey Dawn. We commenced E-2D advanced Hawkeye initial 
operational tests and evaluation, while the V-22 fleet reached 
130,000 flight hours.
    And we delivered the first P-8 Poseidon and the 500th Super 
Hornet and Growler on cost and on schedule. The Naval Air 
Systems Command hired 155 wounded warriors into the acquisition 
workforce ranks. We also continued to actively manage our 
TACAIR [Tactical Aviation] inventory.
    The first Hornet will be inducted into SLEP [Shelf Life 
Extension Program] late on this year, and both SLEP and future 
aircraft procurements must continue on schedule to mitigate the 
Strike Fighter shortfall with manageable risk through 2028. The 
Navy will transition three Navy F-18 Charlie squadrons to F-18 
Echo squadrons.
    And the Marine Corps will reduce their force structure by 
four squadrons and delay the retirement of the AV-8B until 
2030. And this year, we will begin an analysis of the Super 
Hornet's replacement, the F/A-XX, to ensure we have sufficient 
and viable TACAIR forces beyond 2028.
    Thank you, and we welcome your questions on the Department 
of the Navy's Tactical Aviation Procurement programs.
    [The joint prepared statement of Admiral Skinner, General 
Robling and Admiral Floyd can be found in the Appendix on page 
76.]
    Mr. Bartlett. Thank you very much. They have not supplied 
us with the world's best microphones. If you will turn them on 
and pull them closer it will be helpful.
    General Robling.
    General Robling. Sir, we are going to--that was a dual 
statement for the Navy and the Marine Corps.
    Mr. Bartlett. Okay.
    General Holmes.

 STATEMENT OF MAJ GEN JAMES M. HOLMES, USAF, ASSISTANT DEPUTY 
CHIEF OF STAFF FOR OPERATIONS, PLANS AND REQUIREMENTS, U.S. AIR 
  FORCE; AND MAJ GEN JOHN D. POSNER, USAF, DIRECTOR OF GLOBAL 
 POWER PROGRAMS, OFFICE OF THE ASSISTANT SECRETARY OF THE AIR 
                     FORCE FOR ACQUISITION

              STATEMENT OF MAJ GEN JAMES M. HOLMES

    General Holmes. Chairman Bartlett, Ranking Member Reyes, 
and distinguished members of the subcommittee, thank you for 
the opportunity to provide an update on the Air Force's 
tactical, remotely piloted, and intelligence surveillance and 
reconnaissance aviation programs.
    I am joined this afternoon, as you said, by Major General 
Posner, the Director of Global Power Programs for the Office of 
the Assistant Secretary of the Air Force in Acquisitions. 
Today, the Air Force is fully engaged in operations across the 
globe, supporting combatant commander requirements while 
maintaining our ability to defend the homeland.
    Our airmen continue to excel on the battlefield with 
exceptional results. As you are well aware, the Air Force made 
cuts in response to both new strategic guidance and budget 
reductions directed by the 2011 Budget Control Act. Although we 
will become a smaller force, we are committed to maintaining 
the agility, flexibility and readiness required to engage a 
full range of contingencies and threats.
    We continue to provide the joint force and its commanders 
unparalleled support for strike and ISR through our weapons 
system programs, and the phenomenal dedication and 
professionalism of our total force airmen. Thank you for your 
time and for your continued support of our Air Force and our 
teammates in the Army, Navy and Marine Corps.
    And we stand by for your questions.
    [The joint prepared statement of General Holmes and General 
Posner can be found in the Appendix on page 112.]
    Mr. Bartlett. Thank you all very much for your testimony. 
For those who have not testified, thank you for your 
preparation and your willingness to be here to answer our 
questions. Again, as is my custom, I will reserve my questions 
so others have had a chance to ask theirs.
    Mr. Reyes.
    Mr. Reyes. Thank you, Mr. Chairman, and thank you gentlemen 
for being here.
    The budget request includes a plan to mothball the current 
fleet of 14 Global Hawk Block 30s as well as the 4 Block 30s 
that are still in production. With these aircraft procured at a 
cost of more than $100 million each, this seems like an odd 
decision.
    As an aside, from the potential loss of ISR capability, it 
is DOD decisions like this that reflect to people, including 
Members of Congress, the waste of millions of dollars, and can 
make it a challenge for Members who want to support more 
defense spending. The committee understands that up until this 
year the Air Force planned to operate both the Global Hawk 
Block 30 and the U-2 through the end of fiscal year 2014.
    My question, General Holmes, is--well, several questions. 
One, why not continue with that plan, and defer a decision on 
retiring the Global Hawk Block 30 fleet? Secondly, are there 
other options beyond putting these brand-new $100 million 
aircraft into storage? Has there ever been a precedent for 
moving aircraft directly from TAC reproduction, literally from 
the production line, into storage?
    And how much would it cost for the Air Force to continue 
Global Hawk Block 30 through fiscal year 2013 as it was 
originally planned?
    General Holmes. Thank you, Congressman Reyes. The decisions 
that the Air Force made this year on force structure cuts, we 
tried to balance the force structure, we tried to balance our 
modernization accounts, our readiness accounts, and then take 
care of our airmen through the personnel accounts.
    Faced with a bill of about $50 billion over 5 years, we 
believed we needed to save about $8.7 billion in force cuts. 
And the cuts to the Global Hawk program account for more than 
$2 billion of that $8.7 billion over the FYDP. We built systems 
to meet the joint requirement as established by the Joint 
Requirements Oversight Council, the JROC.
    And in this case, the JROC adjusted that requirement. And 
the requirement is set for sensor capability, for the distance 
that you have to fly to a station, and for the number of caps. 
The adjustment they made is classified, and we can come talk to 
you in person in a smaller group and go through that in detail 
at your convenience.
    But under that new requirement, and under the pressure of 
the fiscal guidance, we believe that it was more cost effective 
to fly the U-2 and not fly both airplanes at the same time. And 
that we can meet the JROC requirement with the U-2 through the 
FYDP.
    Mr. Reyes. So is there any precedent to this decision, 
other than for budgetary issues?
    General Holmes. Well, with a history degree, Congressman, I 
think there have been times in our high times where we were 
buying airplanes more than we needed and we sent them almost 
directly into storage. I can't think of a recent precedent.
    As we put the aircraft into storage, as you know there are 
several classes of storage. And the aircraft that we are 
retiring we have programmed to put them initially into Class 
1000 storage, which means that they are returnable to action if 
we need to reverse the decision.
    We will make decisions about exactly how many of the 
aircraft that are cut, then we will transition quickly into 
other forms of storage. But we initially programmed to put them 
into the storage class. It is the most easily reversible. And 
the savings that we achieve over the FYDP by retiring the Block 
30 Global Hawk are more than $2 billion worth.
    Mr. Reyes. A little over $2 billion?
    General Holmes. Yes, sir.
    Mr. Reyes. Okay. I have got another question, but I will 
wait for the second round. Thank you, Mr. Chairman.
    Mr. Bartlett. Okay. Thank you very much.
    We have almost 7 minutes remaining in the vote, so there is 
time for questions from Mr. Critz. And then we may have to give 
the rest of our questions to you for the record.
    I want to apologize for the inconvenience. We do not 
control votes from our level. Thank you all so much for your 
attendance here and your preparation. And be sure that your 
prepared testimony, your oral testimony, and your answers to 
our questions, will be part of a record that will be pored over 
by a number of people for a long time.
    Mr. Critz.
    Mr. Critz. Thank you, Mr. Chairman.
    General Holmes, the Advanced Medium Range Air-to-Air 
Missile, AMRAAM, production. The AIM-120D missiles experienced 
significant production delays. And from what I am told, it is 
mostly due to rocket motor production. As a result, the budget 
request for fiscal year 2013 and beyond has been substantially 
reduced.
    However, the capability the AIM-120D will bring to the Air 
Force and Navy appears to be very important, given the air-to-
air threat. Can you give me an update, give us an update, on 
the production? What steps are being taken to get production 
back on schedule?
    And then when will the Air Force and Navy have this weapon 
in the field?
    General Holmes. Thank you, Congressman. You are exactly 
right that the AIM-120D is a very important requirement. And 
from an operator's perspective, it is key to our ability to 
operate in the anti-access and area denial threat that we 
expect to face in the future.
    With your permission, I am going to hand that question off 
to General Posner.
    Mr. Critz. Sure.
    General Posner. Thank you, Congressman. With respect to 
your question, you are exactly right. The AMRAAM has suffered 
some production problems. These problems are specifically 
related to the rocket motor. There has been a very aggressive 
initiative on the part of the companies to try and solve that 
particular problem.
    I think it is important to note that the front end of the 
missile, the guidance and navigation and all the electronics 
continuing to be built, those production pieces are in storage 
awaiting mating to the rocket motors when those problems in the 
rocket motor are identified and solved.
    Currently, we have 359 missiles versus the 552 that are on 
contract. So we are about 193 behind. In that regard, the 
contractor, Raytheon, has worked very, very diligently to come 
up with several options to work solutions towards this 
particular problem.
    They have now provided a plan to recover. We are satisfied 
with the plan, and we will monitor them closely to make sure 
that the performance for the rocket motors matches the plan. We 
hope to solve the problem with the rocket motors quickly.
    It should be a fairly simple matter, once the rocket motors 
are certified as operational, to get them mated to the front 
ends. And we hope to see recovery to the production schedule 
quickly.
    Mr. Critz. Who makes the motors? It is not Raytheon, is it?
    General Posner. No, sir. That is a subcontractor, ATK.
    Mr. Critz. ATK.
    General Posner. Yes, sir.
    Mr. Critz. Thank you.
    Well, considering our time allotment, Mr. Chairman, I yield 
back.
    Mr. Bartlett. Thank you. Thank you very much. And let me 
apologize again for the shortness of the time, and to thank you 
for your preparation. We will have a number of questions for 
the record in our oversight responsibility, and be assured that 
we will be looking at those, and a number of others looking at 
those, for a long time.
    Thank you all so much for your preparation, your attendance 
here. And we now stand in adjournment.
    [Whereupon, at 4:33 p.m., the subcommittee was adjourned.]


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                            A P P E N D I X

                             March 20, 2012

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              PREPARED STATEMENTS SUBMITTED FOR THE RECORD

                             March 20, 2012

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                   DOCUMENTS SUBMITTED FOR THE RECORD

                             March 20, 2012

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              WITNESS RESPONSES TO QUESTIONS ASKED DURING

                              THE HEARING

                             March 20, 2012

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              RESPONSE TO QUESTION SUBMITTED BY MR. TURNER

    Mr. Kendall. The Department of Defense (DOD) is developing 
standards and safety case analyses to develop and field ground and 
airborne unmanned aircraft system (UAS) sense-and-avoid technology. In 
the short term, the Department is actively engaged with the Federal 
Aviation Administration (FAA) to improve incrementally UAS access to 
the National Airspace System (NAS) through changes to policy and 
procedures. While the FAA has not articulated and documented sense-and-
avoid requirements, the Department, as a public agency, has the 
authority and proven ability to self certify aircraft and systems for 
safe operations. The sense-and-avoid funding in the National Defense 
Authorization Act for Fiscal Year 2012 allows the Department to 
continue its Sense and Avoid (SAA) standards and technology 
development. The Department is sharing the results of its SAA standards 
and technology development with the FAA and other public agencies so 
that they can leverage our work while developing sense-and-avoid 
technology requirements for the civil community.
    The Department has made measured progress in increasing public UAS 
access to the NAS through the UAS Executive Committee and changes to 
the FAA's policies and Certification of Waiver or Authorization 
processes. The Department is also working with the FAA on updating the 
DOD-FAA UAS Memorandum of Agreement for Operations of UAS Systems in 
the NAS to increase access for specific operations, particularly for 
small UAS which make up the predominance of DOD UAS. DOD is also 
currently working with the FAA through the UAS Aviation Rulemaking 
Committee and the Next Generation Air Transportation System Joint 
Planning and Development Office to develop the congressionally directed 
FAA Civil/Public UAS NAS Integration Roadmap and Comprehensive Plan to 
safely integrate civil UAS into the NAS. The roadmap and plan will 
provide a timeline for the phased in approach to UAS integration into 
the NAS. [See page 15.]
?

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


              QUESTIONS SUBMITTED BY MEMBERS POST HEARING

                             March 20, 2012

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

      
                  QUESTIONS SUBMITTED BY MR. BARTLETT

    Mr. Bartlett. Just 7 months ago, Deputy Secretary Carter certified 
in writing to the Congress that the Global Hawk system was ``essential 
to national security,'' there was no other acceptable capability to 
meet the requirement, and the Global Hawk was $220M cheaper per year to 
operate than the U-2. Then the recommendation to terminate Block 30 is 
a complete reversal of the USAF position just 7 months ago. Please 
explain how an asset can be critical to national security and cost less 
than the alternative, but just 7 months later be terminated?
    Mr. Kendall. It is accurate that the RQ-4 can fly longer and 
further than the U-2, and in last year's Nunn-McCurdy certification, 
the RQ-4 was found to be $220-million less expensive per year to 
operate that the U-2. However, the DOD Cost Assessment and Program 
Evaluation office based this analysis on a high-altitude orbit 1,200 
miles from the launch base. During the most recent analysis done in 
support of the FY 2013 budget review, the launch base for the RQ-4 and 
U-2 was assumed to be from their normal operating locations. Coupled 
with the fact that the cost-per-flying hour of the RQ-4 and U-2 is 
roughly equivalent at $32 thousand per hour, per information contained 
in the Air Force Total Ownership Costs Database, the RQ-4 did not offer 
a cost advantage over the U-2 in the FY 2013 budget review.
    After the Nunn-McCurdy Review, the DOD Joint Requirements Oversight 
Council reviewed recent adjustments in military strategy and determined 
that, in the context of all space-based and airborne Intelligence, 
Surveillance, and Reconnaissance (ISR) capabilities, conventional high 
altitude ISR requirements could be reduced. The Air Force further 
determined the U-2, properly resourced, will remain viable until at 
least 2040 and is sufficient to meet those national security 
requirements for high-altitude ISR with this newly reduced force 
structure.
    Ultimately, continued investment in the RQ-4 Block 30 was not 
prudent given there is no difference in the operating costs between the 
RQ-4 and U-2 when operating from their normal operating locations and 
the U-2 meets the new requirement. This drove the decision to divest 
the RQ-4 Global Hawk Block 30, resulting in a $3.8-billion savings. 
Although money was saved with the decision to divest Global Hawk Block 
30, $1.3 billion was needed to continue to operate and sustain the U-2 
through the FYDP. This resulted in a net savings to the taxpayer of 
$2.5 billion.
    Mr. Bartlett. Global Hawk was the first intelligence asset to the 
Japanese Earthquake/Tsunami Relief effort and first to Libya, and by 
all accounts it performed very well. In both of these cases, the Global 
Hawk was able to fly into areas too risky for manned aircraft (an 
active Surface to Air Missile site in Libya and a nuclear environment 
in Japan). How will the USAF compensate for losing this 
transformational capability?
    Mr. Kendall. The Air Force will continue to address the operational 
needs of the Combatant Commands through the Global Force Management 
Process. The Joint Requirements Oversight Council adjustment affirms 
the modified high-altitude Intelligence, Surveillance, and 
Reconnaissance requirement is sufficient to address most future 
contingencies.
    Mr. Bartlett. The Department's combatant commanders have an 
insatiable need for ISR. Intelligence data is routinely the number one 
unmet requirement. While budget pressures require tough choices, the 
decision to pull 18 Global Hawk Block 30 aircraft out of the active 
inventory seems short-sighted. I question the proposal to scrap 
aircraft currently providing intelligence support to our warfighters, 
including those purchased as recently as last year. Can you tell me why 
it is necessary to take these assets out of commanders' hands and 
instead send them to the desert to rust?
    Mr. Kendall. In September 2011, the DOD Joint Requirements 
Oversight Council reviewed recent adjustments in military strategy and 
determined that, in the context of all space-based and airborne 
Intelligence, Surveillance, and Reconnaissance (ISR) capabilities, 
conventional high altitude ISR requirements could be reduced. The Air 
Force further determined the U-2, properly resourced, will remain 
viable until at least 2040 and is sufficient to meet those national 
security requirements for high-altitude ISR with this newly reduced 
force structure.
    Ultimately, continued investment in the RQ-4 Block 30 was not 
prudent given that the U-2 meets the new requirement and the 
significant reduction in the Department's budget. This drove the 
decision to divest the RQ-4 Global Hawk Block 30, resulting in a $3.8 
billion savings, through the FYDP; $1.3 billion, however, was needed to 
continue to operate and sustain the U-2 through the FYDP, resulting in 
a net savings to the taxpayer of $2.5 billion. Finally, some of the $4 
billion investment made in Block 30s will continue to benefit the Block 
20 BACN and Block 40/Multi Platform Radar Technology Insertion 
Programs, as well as NASA Block 10, NATO Alliance Ground Surveillance, 
and Navy Broad Area Maritime Surveillance programs.
    A modified requirement where the U-2 is sufficient and a reduced 
budget where the Department could no longer afford to keep investing in 
RQ-4 Global Hawk Block 30 drove the retirement decision.
    Mr. Bartlett. Congress has provided funds for 21 Global Hawk Block 
30 aircraft at a cost of approximately $4 billion. Fourteen of these 
aircraft have been built and are flying operational missions. My 
understanding is that this budget proposes to eliminate the funding for 
future Global Hawk Block 30s and to mothball these relatively new 
aircraft in favor of a Cold War-era system. Can you explain why the DOD 
is poised to waste the $4 billion we have already spent on these 
aircraft that are currently providing valuable intelligence to the 
warfighter?
    Mr. Kendall. In September 2011, the DOD Joint Requirements 
Oversight Council reviewed recent adjustments in military strategy and 
determined that, in the context of all space-based and airborne 
Intelligence, Surveillance, and Reconnaissance (ISR) capabilities, 
conventional high altitude ISR requirements could be reduced. The Air 
Force further determined the U-2, properly resourced, will remain 
viable until at least 2040 and is sufficient to meet those national 
security requirements for high-altitude ISR with this newly reduced 
force structure.
    Ultimately, continued investment in the RQ-4 Block 30 was not 
prudent given the U-2 meets the new requirement. This drove the 
decision to divest the RQ-4 Global Hawk Block 30, resulting in a $3.8-
billion savings. Although money was saved with the decision to divest 
Global Hawk Block 30, $1.3 billion was needed to continue to operate 
and sustain the U-2 through the FYDP. This resulted in a net savings to 
the taxpayer of $2.5 billion.
    Furthermore, the decision to sustain the U-2 leverages $1.7 billion 
that has been invested to modernize the weapon system. The U-2 f1eet in 
its current state has been certified to 75,000 flight hours (2040 and 
beyond at current utilization rates). In addition to the new engines in 
1994-1998, the entire fleet has completed new power distribution 
(wiring), 21st century glass cockpit and modern avionics processor 
upgrades. The U-2s are currently on a 4000-hour programmed depot 
maintenance cycle included in the budgeted operating costs.
    Finally, some of the $4-billion investment made in Block 30s will 
continue to benefit the Block 20 Battlefield Airborne Communication 
Node and Block 40/Multi-Platform-Radar Technology Insertion Programs, 
as well as NASA Block 10, NATO Alliance Ground Surveillance, and Navy 
Broad Area Maritime Surveillance programs.
    Mr. Bartlett. A recent CSBA report said that eight manned aircraft 
with otherwise identical characteristics to a Global Hawk would be 
necessary to maintain the same orbit as three unmanned Global Hawks. If 
this is the case, how can it be that you determined the manned aircraft 
to be the most cost-efficient solution? How does the Global Hawk Block 
30 compare to the U-2 on a cost-per-ISR-hour basis?
    Mr. Kendall. The operating characteristics of the U-2 are not 
identical to those of the Global Hawk, including operating altitudes, 
sensor capabilities, stand-off ranges, and mission effectiveness. A 
nominal RQ-4 Combat Air Patrol (CAP) is four aircraft, and a nominal U-
2 CAP is five aircraft.
    The Global Hawk Block 30 has not matured to the point where a true 
comparison of operational costs is possible. Nevertheless, the 
Department conducted an analysis during the FY 2013 budget review using 
data from previous Air Force and Department efforts. The Air Force 
Total Ownership Cost database figures in FY 2011 show both the U-2 and 
RQ-4 at $32 thousand per hour. The Air Force did not begin flying the 
RQ-4 Block 30 until March 2011, so there is only 6 months of 
representative flying hour information in the database. Also, the Air 
Force did not fly the RQ-4 Block 30 with the signals intelligence 
(SIGINT) sensor in 2011. The Air Force began flying with this payload 
in April 2012, and updated costs including SIGINT are not currently 
available.
    Given comparable flying hour costs and the large investment 
required for the RQ-4, the Air Force chose to divest the Block 30 
program and save a net of $2.5 billion.
    Mr. Bartlett. How have the Department's decisions to reduce Block 
30 quantities while at the same time increasing requirements 
(increasing the number of simultaneous sensors required) contributed to 
the increased system cost of Global Hawk?
    Mr. Kendall. The Air Force decision to terminate the Block 30 
program was based upon a reduced requirement rather than an increased 
requirement. The requirement for the Global Hawk Block 30 aircraft is 
to simultaneously execute electro-optical/infrared, synthetic aperture 
radar, limited moving target indicator, and signals intelligence 
missions.
    In September 2011, the DOD Joint Requirements Oversight Council 
reviewed recent adjustments in military strategy and determined that, 
in the context of all space-based and airborne Intelligence, 
Surveillance, and Reconnaissance (ISR) capabilities, conventional high 
altitude ISR requirements could be reduced. The Air Force further 
determined the U-2, properly resourced, will remain viable until at 
least 2040 and is sufficient to meet those national security 
requirements for high-altitude ISR with this newly reduced force 
structure. Continued investment in RQ-4 was not warranted given a 
significant reduction in the Department's budget and an alternative 
system, the U-2, is still operationally viable at considerably lower 
total cost over the FYDP.
    Mr. Bartlett. When my staff looks at the Air Force Total Ownership 
Cost data for U-2 and Global Hawk, we see that in 2011 the cost per 
operational hour (that is, the cost per hour executing missions) for 
Global Hawk is lower than U-2. This seems to be a much more relevant 
number than cost per flying hour. How does this square with your claim 
that Global Hawk operating costs are higher?
    Mr. Kendall. We have looked at costs per operational hour and still 
find the Global Hawk Block 30 and U-2 roughly equivalent. More 
importantly, the total cost of keeping the Global Hawk and continuing 
the investment was more expensive than keeping the U-2. As a result, 
the Department chose to save $2.5 billion across the Future Years 
Defense Program in a reduced budget environment since the U-2 is 
sufficient to meet the requirement and remains viable through 2040.
    Mr. Bartlett. What is the cost comparison for operating U-2 
compared to Global Hawk? What is the difference in the cost per mission 
for each? How much of the U-2 fleet is available to perform all ISR 
missions?
    Mr. Kendall. The cost per flight hour is the same. The U-2 costs 
$320 thousand per 10-hour multi-intelligence mission and the RQ-4 costs 
$640 thousand per 20-hour single-intelligence mission. There are 27 U-2 
``single seaters'' of which 3-5 are rotating through depot-level 
maintenance, and two utilized as test birds (capable of flying missions 
but not typically utilized for that purpose). Thus, there are typically 
22 mission-capable U-2 aircraft at any given time.
    Mr. Bartlett. If the U-2 is extended until 2025, and the system 
that was slated to replace it is cancelled, what is your plan for 
replacing the U-2? How much will it cost to modernize and maintain the 
Cold War-era U-2 for another 15 years?
    Mr. Kendall. There is no projected U-2 retirement date. The U-2 
weapon system, properly resourced, remains viable until 2040 and meets 
all sensor requirements currently tasked by the Combatant Commands. The 
Air Force will invest approximately $60-80 million per year in 
sustainment and enhancement modifications to ensure platform 
modernization and maintenance.
    Mr. Bartlett. I understand the Department's Cost Assessment and 
Program Evaluation (CAPE) performed a detailed cost analysis associated 
with the decision to terminate and mothball the Global Hawk Block 30 
program. Please share this analysis with the Congress so it can better 
understand the analytical foundation of this decision. Provide a 
detailed cost assessment including the basis of costs for both 
sustainment and procurement through 2025.
    Mr. Kendall. CAPE has provided their analysis, covering the time of 
the Future Year Defense Program (FY 2013-FY 2017), to the House Armed 
Services Committee during a previous briefing in March of this year. 
This analysis is the most detailed and complete information available.
    Mr. Bartlett. Given our alarming and unsustainable national debt, 
American taxpayers expect and deserve that Congress will make the 
difficult decisions to restore fiscal responsibility. However, these 
decisions cannot be short-sighted or made at the expense of our long-
term budget or national security needs. Please detail how terminating a 
new cutting-edge platform, Global Hawk Block 30, is less expensive than 
extending the life of an aging platform, U-2, which will require 
increased investments in coming years is a fiscally responsible 
decision over the next decade.
    Mr. Kendall. In September 2011, the DOD Joint Requirements 
Oversight Council reviewed recent adjustments in military strategy and 
determined that, in the context of all space based and airborne 
Intelligence, Surveillance, and Reconnaissance (ISR) capabilities, 
conventional high-altitude ISR requirements could be reduced. The Air 
Force further determined the U-2, properly resourced, will remain 
viable until at least 2040 and is sufficient to meet those national 
security requirements for high-altitude ISR with this newly reduced 
force structure.
    Ultimately, continued investment in the RQ-4 Block 30 was not 
prudent given the U-2 meets the new requirement and the significant 
reduction in the Department's budget. This drove the decision to divest 
the RQ-4 Global Hawk Block 30, resulting in a $3.8-billion savings. 
Although money was saved with the decision to divest Global Hawk Block 
30, $1.3 billion was needed to continue to operate and sustain the U-2 
through the FYDP. This resulted in a net savings to the taxpayer of 
$2.5 billion. Finally, some of the $4-billion investment made in Block 
30s will continue to benefit the Block 20 Battlefield Airborne 
Communication Node and Block 40/Multi-Platform-Radar Technology 
Insertion Programs, as well as NASA Block 10 aircraft, NATO Alliance 
Ground Surveillance, and Navy Broad Area Maritime Surveillance 
programs.
    Mr. Bartlett. Our budget crisis demands that we maximize the 
efficiency for every program. At a macro level it is clear that an 
unmanned system can fly longer and further than a manned system. A 
recent CSBA analysis showed in great detail how unmanned systems 
feature one-third the life cycle cost of manned systems. Explain how it 
is in the long-term budgetary and national security interests of our 
nation to abandon an unmanned system that by all accounts is performing 
exceptionally well in theater for a five-decade-old manned system.
    Mr. Kendall. It is accurate that the RQ-4 can fly longer and 
further than the U-2, and in last year's Nunn-McCurdy certification, 
the RQ-4 was found to be $220-million less expensive per year to 
operate than the U-2. However, the DOD Cost Assessment Program 
Evaluation office based this analysis on a high-altitude orbit l,200 
miles from the launch base. During the most recent analysis done in 
support of the FY 2013 budget review, the launch base for the RQ-4 and 
U-2 was assumed to be from their normal operating locations. Coupled 
with the fact that the cost per flying hour of the RQ-4 and U-2 is 
roughly equivalent at $32 thousand per hour, per information contained 
in the Air Force Total Ownership Costs Database, the RQ-4 did not offer 
a cost advantage over the U-2 in the FY 2013 budget review.
    After the Nunn-McCurdy Review, the DOD Joint Requirements Oversight 
Council reviewed recent adjustments in military strategy and determined 
that, in the context of all space-based and airborne Intelligence, 
Surveillance, and Reconnaissance (ISR) capabilities, conventional high 
altitude ISR requirements could be reduced. The Air Force further 
determined the U-2, properly resourced, will remain viable until at 
least 2040 and is sufficient to meet those national security 
requirements for high-altitude ISR with this newly reduced force 
structure.
    Ultimately, continued investment in the RQ-4 Block 30, was not 
prudent given there is no difference in the operating costs between the 
RQ-4 and U-2 when operating from their normal operating 1ocations and 
the U-2 meets the new requirement. This drove the decision to divest 
the RQ-4 Global Hawk Block 30, resulting in a $3.8-billion savings. 
Although money was saved with the decision to divest Global Hawk Block 
30, $1.3 billion was needed to continue to operate and sustain the U-2 
through the FYDP. This resulted in a net savings to the taxpayer of 
$2.5 billion.
    Mr. Bartlett. Can you please provide us details on how the Global 
Hawk has been used to support operations worldwide over the past year? 
Please provide both classified and unclassified details of how Global 
Hawk is being used
    Mr. Kendall. In Libya, Global Hawk provided electro-optical, 
infrared, and synthetic aperture radar data and was used in a 
traditional Intelligence, Surveillance, and Reconnaissance (ISR) role 
with dynamic responsiveness due to its enhanced duration/dwell time and 
the ability to fill gaps between other ISR collects. Overall, Global 
Hawk was successful in Operation ODYSSEY DAWN and in its continued 
support for Operation UNIFIED PROTECTOR. Assessment details can be made 
available at a higher classification.
    In the U.S. Central Command (USCENTCOM) theater, Global Hawk 
continues to support the Combatant Command with both theater and 
tactical ISR. To date, RQ-4 has flown more than 50,000 combat hours in 
support of USCENTCOM operations.
    In a humanitarian/disaster relief support role, Global Hawk 
leveraged its range and endurance as an ISR first-responder. Following 
the Haiti earthquake, Global Hawk executed a response mission in 12 
hours, effectively providing initial situational awareness information, 
highlighting earthquake damage and the status of critical 
infrastructure, and identifying food/aid drop zones and indicators of 
mass population migrations. Eight missions were flown, satisfying 2,621 
targets.
    In Japan, Global Hawk capitalized on its range and endurance to be 
overhead in 21 hours. Imagery products were provided to the Secretary 
of State within 40 minutes of request. In addition to infrastructure 
damage assessment, supply route analysis, and real-time monitoring of 
evacuation support, Global Hawk collection focused on the Fukushima 
nuclear power plant. Because it is a remotely piloted aircraft, Japan 
allowed the U.S. Pacific Command to use the Global Hawk within the 20-
kilometer nuclear engagement zone. Infrared imagery taken directly over 
the top of the reactors allowed engineers to frequently monitor core 
temperature levels. In 21 missions and 300 on-station hours, Global 
Hawk collected more than 3,000 images.
    Mr. Bartlett. The Department based its Global Hawk Block 30 
divestment decision on it being more expensive to operate than the U-2. 
Can you explain how the Department determined these costs?
    Mr. Kendall. The Department of Defense conducted an analysis during 
the FY 2013 budget review using data from previous Air Force and DOD 
efforts. The Air Force Total Ownership Cost database figures in FY 2011 
show the U-2 at $32 thousand per hour and the RQ-4 also at $32 thousand 
per hour. However, costs for the U-2 included signals intelligence 
(SIGINT) sensors, but the Air Force did not fly the RQ-4 Block 30 with 
its SIGINT sensors in 2011. The Air Force began flying Global Hawk 
Block 30 with SIGINT sensors in April 2012. Data to determine long-term 
flying hour costs for Global Hawk have not yet been collected. Given 
comparable flying hour costs and the large investment required for the 
RQ-4, the Air Force chose to divest the Block 30 program and save a net 
of $2.5 billion.
    Mr. Bartlett. General Schwartz mentioned Operations and Support 
costs are issue for the Global Hawk program. When the decision was made 
to retire the U-2 a few years back, specific costs (base support, 
infrastructure and indirect support) were allocated to Global Hawk. As 
a result, these costs have inflated the Global Hawk cost per flight 
hour while the U-2's cost per flight hour has decreased. Did the USAF 
look at doing an apples-to-apples comparison of costs for both systems? 
If not, why not?
    Mr. Kendall. The Department of Defense (DOD) conducted an analysis 
during the FY 2013 budget review using data from previous Air Force and 
DOD efforts. The Air Force Total Ownership Cost database figures in FY 
2011 show the U-2 at $32 thousand per hour and the RQ-4 also at $32 
thousand per hour. However, costs for the U-2 included signals 
intelligence (SIGINT) sensors, but the Air Force did not fly the RQ-4 
Block 30 with its SIGINT sensors in 2011. The Air Force began flying 
Global Hawk Block 30 with SIGINT sensors in April 2012. Given 
comparable flying hour costs and the large investment required for the 
RQ-4, the Air Force chose to divest the Block 30 program and save a net 
of $2.5 billion.
    Mr. Bartlett. The Department has committed a significant portion of 
its planned budget for aircraft procurement to the F-35 program. In the 
case of the Air Force, major expenditures are planned on the F-35 while 
at the same time the Air Force seeks to acquire a new airborne tanker 
and a bomber aircraft. Given the budget environment faced by the 
Department, are you at all concerned that what you are proposing is 
doable?
    Mr. Kendall. I am concerned that future budget projections will 
make much needed modernization efforts unaffordable. My job is to 
ensure that our acquisition programs are as affordable as possible so 
that the Services have the flexibility and available options to make 
the appropriate decisions in determining how to meet their 
requirements. Therefore, I have directed the incorporation of 
procurement and sustainment affordability targets for all programs. In 
the case of the F-35 program, we are actively addressing the costs due 
to concurrency. As the program completes more testing, we are 
progressively reducing concurrency risks. This is a direct result of a 
more mature design through incorporation of discovery based design 
changes. Earlier aircraft are open to a greater need for changes, and 
as succeeding Low-Rate Initial Production (LRIP) lots are built, their 
cumulative requirements for retrofit modifications decline. 
Additionally, the flattening of the production ramp in the coming years 
will minimize the cost of upgrading these early LRIP aircraft. The 
Department is also pursuing a strategy regarding LRIP 6 and 7 
negotiations that incentivizes Lockheed Martin to reduce concurrency 
costs by holding back the purchase of six LRIP 6 jets until the 
contractor can prove performance. In addition, the program and the 
Department are working diligently to reduce F-35 life-cycle costs. 
Based on maturation of the technical baseline and focused affordability 
initiatives, the Department expects greater accuracy in the O&S portion 
of the cost estimate. Potential areas for reductions include: revised 
bed-down plans; improved spares pricing; detailed reviews of manpower 
requirements; technical refresh strategies; and future Service training 
requirements, such as the number of annual flight hours per aircraft. 
The cost risks in the tanker and bomber programs have also been 
addressed, in the case of the tanker, through use of a competitively-
awarded fixed price contract.
    Mr. Bartlett. Earlier this year, you labeled the concurrency of the 
F-35 program as ``acquisition malpractice.'' Why did you choose those 
words, and what action has been taken by the Department taken to 
address your concerns?
    Mr. Kendall. The decision to begin production well before testing 
began was a clear departure from well-established principles of sound 
program management. I have taken several steps to improve 
accountability in the acquisition system, encourage well-informed 
decisions, and improve the process in order to make sure we make better 
decisions moving forward. I chartered a Quick Look Review that assessed 
the risks in upcoming production decisions given the high degree of 
concurrency associated with the F-35 program. Those results aided the 
January 2012 Defense Acquisition Board (DAB) initial review of the post 
Nunn-McCurdy baseline. The DAB will continue to conduct annual Interim 
Progress Reviews to assess how risk is being mitigated and provide 
additional guidance. Additionally, the flattening of the production 
ramp in the coming years will minimize the cost of upgrading these 
early Low-Rate Initial Production (LRIP) aircraft. The Department is 
also pursuing a strategy regarding LRIP 6 and 7 negotiations that 
incentivizes Lockheed Martin to reduce concurrency costs by holding 
back the purchase of six LRIP 6 jets until the contractor can prove 
performance.
    Mr. Bartlett. Your predecessor, Dr. Carter, stated that the JSF 
program--both the government and contractor--lost its focus on 
affordability and that getting back that focus is paramount to 
improving the JSF program as it moves forward. From your perspective, 
did the program lose its focus on affordability? What were the main 
indicators of problems that were overlooked and what finally brought 
them to light? What are the key steps to regaining and sustaining a 
strong focus on affordability? What initiatives are underway to drive 
down JSF operations and support costs? Assuming the latest projections 
will show that the JSF will cost more to operate and maintain than 
legacy fighters, what implications does this have on future budgets and 
how the military services will pay this future bill?
    Mr. Kendall. I do believe that the F-35 Program--both Government 
and contractor--lost the focus on affordability. The program was 
initiated with a high degree of concurrency, and the risks and costs 
due to concurrency were not accurately predicted nor planned. The 
Department has taken steps to minimize the risks and reduce the costs 
associated with concurrency. We have done this through reduced 
procurement of aircraft while concurrent development and test 
continues. Additionally, we initiated the transition to fixed-price-
type procurement contracts and are ensuring that costs associated with 
concurrency are shared more between the Government and contractor. The 
F-35 program and the Department are working diligently to reduce F-35 
operations and support costs. Based on maturation of the technical 
baseline and focused affordability initiatives, the Department expects 
greater accuracy in the operations and support portion of the cost 
estimate. Potential areas for reductions include: revised bed-down 
plans; improved spares pricing; detailed reviews of manpower 
requirements; technical refresh strategies; and future Service training 
requirements, such as the number of annual flight hours per aircraft. 
Recently, I directed procurement affordability targets that will help 
ensure that, as the F-35 program reaches the point that it is ready for 
Full-Rate Production; the Department will be able to afford to procure 
the quantities it needs.
    Similarly, I established sustainment affordability targets that 
will allow us to communicate expectations to the contractor so we can 
control the cost to operate each aircraft, the annual costs to the 
Services, and how much investment will be required over the total 
lifecycle of the F-35 program. These affordability targets and, more 
importantly, the actual costs that we realize over the coming years 
will provide us a better understanding of whether we can afford to buy, 
fly, and sustain the current total requirement. An affordable F-35 
program will allow the Department to replace legacy aircraft with 
fewer, more capable, multi-role strike fighter aircraft well suited to 
meet the leaner requirements of the new strategic guidance.
    Mr. Bartlett. The Department took the STOVL off probation after one 
year. Why do you think it was appropriate to end probation? What 
specifically did the STOVL accomplish in 2011 that gives you confidence 
about its future? What do you feel are the primary risks remaining with 
the STOVL development?
    Mr. Kendall. Based on the assessment that the F-35B had made 
sufficient progress in development, test, and production, such that no 
uniquely distinguishing issues required more scrutiny than the other 
two variants of F-35, I believe it was appropriate to remove the F-35B 
from ``probation'' status.
    Successful F-35B performance ashore and at sea has very positively 
advanced the state of demonstrated capability in 2011. The F-35B is 
making good progress in flight test metrics, resolving technical 
issues, and meeting performance requirements.
    In October 2011, the F-35B satisfactorily executed a limited 
demonstration of ship suitability when two aircraft completed the 
initial sea trials on the USS WASP. Testing included flight envelope 
expansion, airborne and deck handling qualities, and the aircraft 
effects on the shipboard environment. The sea trials were very 
successful. Flight deck heating and exhaust jet blast velocity 
demonstrated satisfactory results.
    In 2011, the F-35 System Development and Demonstration (SDD) 
program baseline was restructured and resourced with adequate margin to 
accommodate current known and future unknown technical challenges and 
changes across all variants. Anticipated developmental costs associated 
with unique F-35B technical challenges and changes have been addressed 
in the program restructure. In addition, the Department reduced F-35B 
production in FY12 to accommodate the time it takes to complete 
engineering solutions, produce the necessary hardware, and assess the 
operational impact of the changes. This reduction in quantity balances 
the risk of retrofit costs with the need to ensure continuity in the 
engineering workforce involved in assembly of the F-35B in Fort Worth; 
and to sustain the supplier base of F-35B unique parts.
    F-35B weight has changed in very small amounts since January 2011 
and remains essentially stable. In addition, engine performance data 
collected has allowed credit for better lift performance and the 
Vertical Landing Bring Back Key Performance Parameter has maintained 
consistent positive margin.
    In 2011, the F-35B performed on or ahead of the test plan. Total 
flights planned versus actual were 293/333, and total test points 
planned versus actual were 2272/2636. Additionally, the F-35B 
accomplished 268 Vertical Landings, 395 Short Take Offs, and 156 Slow 
Landings.
    The FS 496 bulkhead has been redesigned for production beginning 
with Low-Rate Initial Production Lot 4, with fixes identified for 
retrofit as needed. F-35B fatigue testing (also known as durability 
testing) resumed in the 1st quarter of 2012. The test was halted for 
new bulkhead fabrication and instrumentation and test article 
reconstruction in November 2010.
    The redesigned upper auxiliary air inlet door hardware began flight 
testing in December 2011. Analyses of the results from early test 
flights are promising. Weather and the pace of flights will determine 
when this is complete. Additionally, ordering of modification kits for 
aircraft retrofit began in parallel with this testing in order to gain 
clearance for fleet STOVL mode operation as soon as possible.
    Airworthiness concerns with the lift fan clutch heating issue have 
been mitigated by the incorporation of a temperature sensor that alerts 
the pilot to take corrective action if a clutch exceeds acceptable 
temperatures. At the same time, a detailed root cause investigation for 
a permanent fix to eliminate clutch heating is underway.
    The vertical lift propulsion system driveshafts are being custom 
fitted with spacers to ensure the shaft can accommodate the airframe 
thermal expansion and contraction. While this is currently a 
maintenance burden, it eliminates the airworthiness concerns with the 
current driveshaft design. A new driveshaft that can meet the actual 
aircraft environmental requirements is in the early phases of the 
design process.
    The airworthiness risk associated with roll post actuator heating 
has been mitigated by insulating the actuator with a thermal blanket. A 
new actuator design that will eliminate the need for a thermal blanket 
completed critical design review in January 2012.
    Our observations and assessments over the past year give us reason 
to believe the basic aircraft designs are sound and will deliver. The 
remaining development is focused on testing and integration. Software 
development, coupled with flight test execution, will remain the major 
focus of the F-35B and the overall F-35 program execution in the coming 
year and through the completion of SDD.
    Mr. Bartlett. In the December 2011 F-35 Selected Acquisition 
Report, we noted that F-35 airframe and engine costs increased about 
$6.2 billion due to a slower near-term production ramp. How does this 
increase compare with the increase in costs for expected concurrency 
modifications if the production ramp were not changed from the 
Department's position for fiscal year 2012?
    Mr. Kendall. The $6.2 billion value quoted in the December 2011 F-
35 Selected Acquisition Report reflects the increase across 30 years of 
production and inflation to include an additional 2 years of 
production. In the FY 2013-2017 Future Years Defense Program (FYDP), we 
are satisfied the recommended production rate is the best use of the 
Department's funding.
    The concurrency costs for the Low Rate Initial Production (LRIP) 
Lot 7 aircraft in FY2013 range from $7 million per aircraft, if only 
the ``must fix'' changes are incorporated, up to $15 million per 
aircraft if all changes are incorporated. Importantly, while the 
deferment of aircraft did result in a unit recurring flyaway cost 
increase of approximately $10 million per aircraft in for LRIP 7, we 
believe the realignment of the pace of production balances the need for 
a stable industrial base with the realities of otherwise increasing 
concurrency modification costs and a resource-constrained fiscal 
environment.
    Mr. Bartlett. Just 7 months ago, Deputy Secretary Carter certified 
in writing to the Congress that the Global Hawk system was ``essential 
to national security,'' there was no other acceptable capability to 
meet the requirement, and the Global Hawk was $220M cheaper per year to 
operate than the U-2. Then the recommendation to terminate Block 30 is 
a complete reversal of the USAF position just 7 months ago. Please 
explain how an asset can be critical to national security and cost less 
than the alternative, but just 7 months later be terminated?
    Mr. Van Buren. It is accurate that the RQ-4 can fly longer and 
further than the U-2, and in last year's Nunn-McCurdy certification, 
the RQ-4 was found to be $220M less expensive per year to operate than 
the U-2. However, OSD CAPE based this analysis on a High Altitude orbit 
1,200 miles from the launch base. During the analysis done in the FY13 
Budget Review, the launch base for the RQ-4 and U-2 was assumed to be 
from their normal operating locations. Coupled with the fact that the 
cost per flying hour of the RQ-4 and U-2 is roughly equivalent at $32K 
per hour, per information contained in the Air Force Total Ownership 
Costs Database, the RQ-4 did not offer a cost advantage over the U-2 in 
the FY13 Budget Review.
    After the Nunn-McCurdy Review, the DOD Joint Requirements Oversight 
Council reviewed recent adjustments in military strategy and determined 
that conventional high-altitude ISR requirements could be reduced. The 
Air Force further determined the U-2, which remains viable until at 
least 2040, was sufficient to meet those national security requirements 
for high-altitude ISR with this newly reduced force structure.
    Ultimately, continued investment in the RQ-4 Block 30 was not 
prudent given there is no difference in the operating costs between the 
RQ-4 and U-2 when operating from their normal operating locations and 
the U-2 meets the new requirement. This drove the decision to divest 
the RQ-4 Global Hawk Block 30, resulting in a $3.8B savings. Although 
money was saved with the decision to divest Global Hawk Block 30, $1.3B 
was needed to continue to operate and sustain the U-2 through the FYDP. 
This resulted in a net savings to the taxpayer of $2.5B.
    In September 2011 following the Nunn-McCurdy certification, the DOD 
Joint Requirements Oversight Committee modified the high-altitude ISR 
requirement where the U-2 was deemed sufficient to meet that amended 
requirement. Coupled with the austere budget environment, the 
Department decided it could no longer afford additional investment 
required for the RQ-4 Global Hawk Block 30.
      Requirement: The Air Force further determined the U-2 
(which remains viable until at least 2040) was sufficient to meet the 
reduced force structure requirements. Continued increased investment in 
the RQ-4 is required to field a comparable capability to the U-2 and 
was determined to be unaffordable.
      Budget: The Budget Control Act was passed in August 2011. 
Additional investment in the RQ-4 is not warranted given a significant 
reduction in the Department's budget and because the U-2 remains 
operationally viable to satisfy the reduced JROC requirements at 
considerably lower total cost over the FYDP.
    Mr. Bartlett. Global Hawk was the first intelligence asset to the 
Japanese Earthquake/Tsunami Relief effort and first to Libya, and by 
all accounts it performed very well. In both of these cases, the Global 
Hawk was able to fly into areas too risky for manned aircraft (an 
active Surface to Air Missile site in Libya and a nuclear environment 
in Japan). How will the USAF compensate for losing this 
transformational capability?
    Mr. Van Buren. The Air Force will continue to satisfy the 
operational needs of the Combatant Commands through the Global Force 
Management Process. The Joint Requirements Oversight Council adjustment 
affirms the modified high-altitude ISR requirement is sufficient to 
address any such future contingency.
    Mr. Bartlett. The Department's combatant commanders have an 
insatiable need for ISR. Intelligence data is routinely the number one 
unmet requirement. While budget pressures require tough choices, the 
decision to pull 18 Global Hawk Block 30 aircraft out of the active 
inventory seems short-sighted. I question the proposal to scrap 
aircraft currently providing intelligence support to our warfighters, 
including those purchased as recently as last year. Can you tell me why 
it is necessary to take these assets out of commanders' hands and 
instead send them to the desert to rust?
    Mr. Van Buren. In September 2011, the DOD Joint Requirements 
Oversight Council reviewed recent adjustments in military strategy and 
determined that conventional high-altitude ISR requirements could be 
reduced. The Air Force further determined the U-2, which remains viable 
until at least 2040, was sufficient to meet those national security 
requirements for high-altitude ISR with this newly reduced force 
structure. Ultimately, continued investment in the RQ-4 Block 30 was 
not prudent given that the U-2 meets the new requirement significant 
reduction in the Department's budget. This drove the decision to divest 
the RQ-4 Global Hawk Block 30, resulting in a $3.8B savings where $1.3B 
was needed to continue to operate and sustain the U-2 through the FYDP. 
This resulted in a net savings to the taxpayer of $2.5B. Finally, some 
of the $4B investment made in Block 30s will continue to benefit the 
Block 20 BACN and Block 40/MP-RTIP programs, as well as NASA Block 10 
aircraft, NATO AGS and Navy BAMS. A modified requirement where the U-2 
is sufficient and a reduced budget where the Department could no longer 
afford to keep investing in RQ-4 Global Hawk Block 30 drove the 
retirement decision. Requirement: In September 2011, the DOD Joint 
Requirements Oversight Council reviewed recent adjustments in military 
strategy and determined that the high-altitude ISR requirement 
structure could be modified. The Air Force further determined the U-2, 
which remains viable until at least 2040, was sufficient to meet these 
reduced requirements. Continued increased investment in RQ-4 was 
required to field a comparable capability to U-2 and was determined to 
be unaffordable. Budget: Continued, increased investment in RQ-4 was 
not warranted given a significant reduction in the Department's budget 
and an alternative system, the U-2, still operationally viable at 
considerably lower total cost over the FYDP.
    Mr. Bartlett. The Congress has provided funds for 21 Global Hawk 
Block 30 aircraft at a cost of approximately $4 billion. Fourteen of 
these aircraft have been built and are flying operational missions. My 
understanding is that this budget proposes to eliminate the funding for 
future Global Hawk Block 30s and to mothball these relatively new 
aircraft in favor of a Cold War-era system. Can you explain why the DOD 
is poised to waste the $4 billion we have already spent on these 
aircraft that are currently providing valuable intelligence to the 
warfighter?
    Mr. Van Buren. In September 2011, the DOD Joint Requirements 
Oversight Council reviewed recent adjustments in military strategy and 
determined that conventional high-altitude ISR requirements could be 
reduced. The Air Force further determined the U-2, which remains viable 
until at least 2040, was sufficient to meet those national security 
requirements for high-altitude ISR with this newly reduced force 
structure. Ultimately, continued investment in the RQ-4 Block 30 was 
not prudent given the U-2 meets the new requirement. This drove the 
decision to divest the RQ-4 Global Hawk Block 30, resulting in a $3.8B 
savings. Although money was saved with the decision to divest Global 
Hawk Block 30, $1.3B was needed to continue to operate and sustain the 
U-2 through the FYDP. This resulted in a net savings to the taxpayer of 
$2.5B. Furthermore, the decision to sustain the U-2 leverages $1.7B 
that was has been invested to modernize the weapon system. The U-2 
fleet in its current state has been certified to 75,000 flight hours 
(2040 and beyond at current utilization rates). In addition to the new 
engines in 1994-1998, the entire fleet has completed new power 
distribution (wiring), 21st century glass cockpit and modern avionics 
processor upgrades. The U-2s are currently on a 4000-hour programmed 
depot maintenance (PDM) cycle included in the budgeted operating costs. 
Finally, some of the $4B investment made in Block 30s will continue to 
benefit the Block 20 BACN and Block 40/MP-RTIP programs, as well as 
NASA Block 10 aircraft, NATO AGS and Navy BAMS.
    Mr. Bartlett. A recent CSBA report said that eight manned aircraft 
with otherwise identical characteristics to a Global Hawk would be 
necessary to maintain the same orbit as three unmanned Global Hawks. If 
this is the case, how can it be that you determined the manned aircraft 
to be the most cost-efficient solution? How does the Global Hawk Block 
30 compare to the U-2 on a cost-per-ISR-hour basis?
    Mr. Van Buren. The operating characteristics of the U-2 are vastly 
different than those of the Global Hawk including operating altitudes, 
sensor capabilities, stand-off ranges and mission effectiveness. A 
nominal RQ-4 Combat Air Patrol (CAP) is four aircraft, and a nominal U-
2 CAP is five aircraft. The Global Hawk Block 30 has not matured to the 
point where a true comparison of operational costs is possible. 
Nevertheless, the Department conducted an analysis during the FY13 
budget review using data from previous Air Force and Department 
efforts. The Air Force Total Ownership Cost (AFTOC) database figures in 
FY11 show both the U-2 and RQ-4 at $32K per hour. The Air Force did not 
begin flying the RQ-4 Block 30 until March 2011, so there is only six 
months of representative flying hour information in the database. Also, 
the Air Force did not fly the RQ-4 Block 30 with the SIGINT sensor in 
2011. The Air Force will begin flying with this payload in April 2012 
and expects the RQ-4 flying hour costs to be greater than those for the 
U-2. Given comparable flying hour costs, and given the large investment 
required for the RQ-4, the Air Force chose to divest the Block 30 
program and save a net of $2.5B.
    Mr. Bartlett. How have the Department's decisions to reduce Block 
30 quantities while at the same time increasing requirements 
(increasing the number of simultaneous sensors required) contributed to 
the increased system cost of Global Hawk?
    Mr. Van Buren. The Air Force decision to terminate the Block 30 
program was based upon a reduced requirement rather than an increased 
requirement. The requirement for the Global Hawk Block 30 aircraft is 
to execute electro-optical/infrared (EO/IR), synthetic aperture radar 
(SAR), limited moving target indicator (MTI) and signals intelligence 
(SIGINT) missions simultaneously. No change to the Block 30 requirement 
factored into the decision to terminate the program. In September 2011, 
the DOD Joint Requirements Oversight Council reviewed recent 
adjustments in military strategy and determined that conventional high-
altitude intelligence, surveillance, and reconnaissance force structure 
could be reduced. The Air Force further determined the U-2, which 
remains viable until at least 2040, was sufficient to meet these 
reduced force structure requirements. Continued increased investment in 
RQ-4 would have been required to field a comparable capability to U-2 
and therefore, the RQ-4 was determined to be unaffordable. Continued, 
increased investment in RQ-4 was not warranted given a significant 
reduction in the Department's budget and an alternative system, the U-2 
is still operationally viable at considerably lower total cost over the 
FYDP.
    Mr. Bartlett. When my staff looks at the Air Force Total Ownership 
Cost data for U-2 and Global Hawk, we see that in 2011 the cost per 
operational hour (that is, the cost per hour executing missions) for 
Global Hawk is lower than U-2. This seems to be a much more relevant 
number than cost per flying hour. How does this square with your claim 
that Global Hawk operating costs are higher?
    Mr. Van Buren. The total cost of keeping the Global Hawk Block 30 
and continuing the investment to improve the RQ-4 to reach a comparable 
capability with U-2 was more expensive than keeping the U-2. As a 
result, the Department chose to save $2.5B across the FYDP in a reduced 
budget environment since the U-2 is sufficient to meet the requirement 
and remains viable through 2040. The Joint Requirements Oversight 
Council reduced the high-altitude ISR requirement, and the AF budget 
reduced to where the Department could no longer afford to keep 
investing in the RQ-4 Global Hawk Block 30. Requirement: In September 
2011, the DOD Joint Requirements Oversight Council reviewed recent 
adjustments in military strategy and determined that conventional high-
altitude ISR requirements could be modified. The Air Force further 
determined the U-2, which remains viable until at least 2040, was 
sufficient to meet these modified requirements. Continued increased 
investment in RQ-4 was required to field a comparable capability to U-2 
and was determined to be unaffordable. Budget: Continued, increased 
investment in RQ-4 was not warranted given a significant reduction in 
the Department's budget and an alternative system, the U-2, is still 
operationally viable at a considerably lower cost over the FYDP. 
Additionally, the actual cost per flying hour (CPFH) data, when the U-2 
is employed at its normal operational distance, shows the U-2 cost is 
comparable to the RQ-4 cost. The latest actual CPFH data shows that 
both platforms are operating at $32K per hour.
    Mr. Bartlett. What is the cost comparison for operating U-2 
compared to Global Hawk? What is the difference in the cost per mission 
for each? How much of the U-2 fleet is available to perform all ISR 
missions?
    Mr. Van Buren. The cost per flight hour is roughly the same. The U-
2 costs $320K per 10-hour Multi-INT mission and the RQ-4 $640K per 20-
hour Single-INT mission. There are 27 U-2 ``single seaters'' of which 
one is always rotating through depot level maintenance, and two 
utilized as test birds (capable of flying missions, but not typically 
utilized for that purpose). Thus, there are 24 mission-capable U-2 
aircraft at any given time.
    Mr. Bartlett. If the U-2 is extended until 2025, and the system 
that was slated to replace it is cancelled, what is your plan for 
replacing the U-2? How much will it cost to modernize and maintain the 
Cold War-era U-2 for another 15 years?
    Mr. Van Buren. There is no projected U-2 retirement date. The U-2 
aircraft remains viable until 2040 and meets all sensor requirements 
currently tasked by the Combatant Commands. The Air Force will invest 
approximately $68 million per year in sustainment and enhancement 
modifications to ensure platform modernization and maintenance.
    Mr. Bartlett. I understand the Department's Cost Assessment and 
Program Evaluation (CAPE) performed a detailed cost analysis associated 
with the decision to terminate and mothball the Global Hawk Block 30 
program. Please share this analysis with the Congress so it can better 
understand the analytical foundation of this decision. Provide a 
detailed cost assessment including the basis of costs for both 
sustainment and procurement through 2025.
    Mr. Van Buren. In support of the FY13 President's Budget Request 
(PBR), the USAF analyzed the operational output of both the RQ-4 and 
the U-2 using existing CONOPS for both aircraft and determined that U-2 
capability was sufficient for operational needs. When analyzed in this 
context, the U-2 and RQ-4 operating costs were nearly equal. Given 
comparable flying hour costs, and given the large investment required 
for the RQ-4, the Air Force chose to divest the Block 30 program and 
save a net of $2.5B. The CAPE conducted their own independent cost 
analysis based on three scenarios to come to the conclusion that the U-
2 was the more affordable option to meet the newly reduced requirement. 
The Air Force will defer to CAPE to provide Congress the details of 
their independent cost analysis.
    Mr. Bartlett. Given our alarming and unsustainable national debt, 
American taxpayers expect and deserve that Congress will make the 
difficult decisions to restore fiscal responsibility. However, these 
decisions cannot be short-sighted or made at the expense of our long-
term budget or national security needs. Please detail how terminating a 
new cutting-edge platform, Global Hawk Block 30, is less expensive than 
extending the life of an aging platform, U-2, which will require 
increased investments in coming years is a fiscally responsible 
decision over the next decade.
    Mr. Van Buren. In September 2011, the DOD Joint Requirements 
Oversight Council reviewed recent adjustments in military strategy and 
determined that conventional high-altitude ISR requirements could be 
reduced. The Air Force further determined the U-2, which remains viable 
until at least 2040, was sufficient to meet those national security 
requirements for high-altitude ISR with this newly reduced force 
structure. Ultimately, continued investment in the RQ-4 Block 30 was 
not prudent given the U-2 meets the new requirement and the significant 
reduction in the Department's budget. This drove the decision to divest 
the RQ-4 Global Hawk Block 30, resulting in a $3.8B savings. Although 
money was saved with the decision to divest Global Hawk Block 30, $1.3B 
was needed to continue to operate and sustain the U-2 through the FYDP. 
This resulted in a net savings to the taxpayer of $2.5B. Finally, some 
of the $4B investment made in Block 30s will continue to benefit the 
Block 20 BACN and Block 40/MP-RTIP programs, as well as NASA Block 10 
aircraft, NATO AGS and Navy BAMS. The total cost of keeping the Global 
Hawk Block 30 and continuing the investment to improve the RQ-4 to 
reach a comparable capability with U-2 was more expensive than keeping 
the U-2. As a result, the Department chose to save $2.5B across the 
FYDP in a reduced budget environment since the U-2 is sufficient to 
meet the requirement and remains viable through 2040. The Joint 
Requirements Oversight Council reduced the high-altitude ISR 
requirement, and the AF budget reduced to where the Department could no 
longer afford to keep investing in the RQ-4 Global Hawk Block 30. 
Requirement: In September 2011, the DOD Joint Requirements Oversight 
Council reviewed recent adjustments in military strategy and determined 
that conventional high-altitude ISR requirements could be modified. The 
Air Force further determined the U-2, which remains viable until at 
least 2040, was sufficient to meet these modified requirements. 
Continued increased investment in RQ-4 was required to field a 
comparable capability to U-2 and was determined to be unaffordable. 
Budget: Continued, increased investment in RQ-4 was not warranted given 
a significant reduction in the Department's budget and an alternative 
system, the U-2, is still operationally viable at a considerably lower 
cost over the FYDP. Additionally, the actual cost per flying hour 
(CPFH) data, when the U-2 is employed at its normal operational 
distance, shows the U-2 cost is comparable to the RQ-4 cost. The latest 
actual CPFH data shows that both platforms are operating at $32K per 
hour.
    Mr. Bartlett. Our budget crisis demands that we maximize the 
efficiency for every program. At a macro level it is clear that an 
unmanned system can fly longer and further than a manned system. A 
recent CSBA analysis showed in great detail how unmanned systems 
feature one-third the life cycle cost of manned systems. Explain how it 
is in the long-term budgetary and national security interests of our 
nation to abandon an unmanned system that by all accounts is performing 
exceptionally well in theater for a five-decade-old manned system.
    Mr. Van Buren. It is accurate that the RQ-4 can fly longer and 
further than the U-2, and in last year's Nunn-McCurdy certification, 
the RQ-4 was found to be $220M less expensive per year to operate than 
the U-2. However, OSD CAPE based this analysis on a High Altitude orbit 
1,200 miles from the launch base. During the analysis done in the FY13 
Budget Review, the launch base for the RQ-4 and U-2 was assumed to be 
from their normal operating locations. Coupled with the fact that the 
cost per flying hour of the RQ-4 and U-2 is roughly equivalent at $32K 
per hour, per information contained in the Air Force Total Ownership 
Costs Database, the RQ-4 did not offer a cost advantage over the U-2 in 
the FY13 Budget Review. After the Nunn-McCurdy Review, the DOD Joint 
Requirements Oversight Council reviewed recent adjustments in military 
strategy and determined that conventional high-altitude ISR 
requirements could be reduced. The Air Force further determined the U-
2, which remains viable until at least 2040, was sufficient to meet 
those national security requirements for high-altitude ISR with this 
newly reduced force structure. Ultimately, continued investment in the 
RQ-4 Block 30, which still needed approximately $800M in investment to 
achieve sensor parity with the U-2, was not prudent given there is no 
difference in the operating costs between the RQ-4 and U-2 when 
operating from their normal operating locations and the U-2 meets the 
new requirement. This drove the decision to divest the RQ-4 Global Hawk 
Block 30, resulting in a $3.8B savings. Although money was saved with 
the decision to divest Global Hawk Block 30, $1.3B was needed to 
continue to operate and sustain the U-2 through the FYDP. This resulted 
in a net savings to the taxpayer of $2.5B.
    Mr. Bartlett. Can you please provide us details on how the Global 
Hawk has been used to support operations worldwide over the past year? 
Please provide both classified and unclassified details of how Global 
Hawk is being used
    Mr. Van Buren. In Libya, Global Hawk provided electro-optical, 
infrared, and synthetic aperture radar and was used in a traditional 
ISR role with dynamic responsiveness due to its enhanced duration/dwell 
time and the ability to fill gaps between other ISR collects. Overall, 
Global Hawk was successful in Operation Odyssey Dawn and in its 
continued support for Operation Unified Protector. Assessment details 
can be made available at a higher classification. In the CENTCOM 
theater, Global Hawk continues to support the combatant command with 
both theater and tactical ISR. To date, RQ-4 has flown over 50,000 
combat hours in support of CENTCOM operations. In a humanitarian/
disaster relief support role, Global Hawk leveraged its range and 
endurance as an ISR first-responder. Following the Haiti earthquake, 
Global Hawk executed a response mission in 12 hours effectively 
providing initial situational awareness information, highlighting 
earthquake damage, status of critical infrastructure and identifying 
food/aid drop zones and indicators of mass population migrations. Eight 
missions were flown, satisfying 2,621 targets. In Japan, Global Hawk 
capitalized on its range and endurance to be overhead in 21 hours. 
Imagery products were provided to the Secretary of State within 40 
minutes of request. In addition to infrastructure damage assessment, 
supply route analysis, and real-time monitoring of evacuation support, 
Global Hawk collection focused on the Fukushima nuclear power plant. 
Because it is a remotely piloted aircraft, Japan allowed PACOM to use 
the Global Hawk within the 20 km nuclear engagement zone. Infrared 
imagery taken directly over the top of the reactors allowed engineers 
to frequently monitor core temperature levels. In 21 missions and 300 
on-station hours, Global Hawk collected more than 3,000 images.
    Mr. Bartlett. General Schwartz mentioned Operations and Support 
costs are issue for the Global Hawk program. When the decision was made 
to retire the U-2 a few years back, specific costs (base support, 
infrastructure and indirect support) were allocated to Global Hawk. As 
a result, these costs have inflated the Global Hawk cost per flight 
hour while the U-2's cost per flight hour has decreased. Did the USAF 
look at doing an apples-to-apples comparison of costs for both systems? 
If not, why not?
    Mr. Van Buren. The Department of Defense conducted an analysis 
during the FY13 budget review using data from previous Air Force and 
DOD efforts. The Air Force Total Ownership Cost (AFTOC) database 
figures in FY11 show the U-2 at $32K per hour and the RQ-4 also at $32K 
per hour. However, costs for the U-2 included SIGINT sensors, but the 
Air Force did not fly the RQ-4 Block 30 with its SIGINT sensors in 
2011. The Air Force will begin flying Global Hawk with SIGINT sensors 
in April 2012 and expects the RQ-4 flying hour costs to become greater 
than those for the U-2. Given comparable flying hour costs, and given 
the large investment required for the RQ-4, the Air Force chose to 
divest the Block 30 program and save a net of $2.5B.
    Mr. Bartlett. You recently proposed a change in the contracting 
strategy for the fiscal year 2012 and 2013 procurement of F-35 
procurement that would provide a means to have control on production 
that is based prime contractor demonstrated performance in 
developmental activities relative to the 2012 plan and concurrent risk 
reduction. Can you describe your proposal, why you think it is 
necessary, and the criteria you would use as a basis for executing the 
proposed contract strategy?
    Mr. Van Buren. The Department is implementing an event based 
contracting strategy for low rate initial production (LRIP) Lots 6 and 
7 that buys aircraft production quantities based upon development and 
test progress. This strategy provides a means to have control on 
production that is informed by demonstrated development performance 
against the 2012 plan and concurrency cost risk reduction. The 
Department will request Lockheed Martin provide a consolidated proposal 
for LRIP Lots 6 and 7 based on an innovative structure. First, we will 
award 25 aircraft in Lot 6, out of 31 authorized and appropriated in 
FY12. Second, we will provide a means to procure from 0 to 6 of the 
remaining FY12-funded Lot 6 aircraft concurrent with the Lot 7 contract 
award in 2013. Lastly, we will link the total aircraft quantity 
ultimately procured in Lot 6 to Lockheed Martin's development 
performance and concurrency cost risk reduction efforts. The Department 
will decide to award the additional aircraft based on progress expected 
in 2012, as planned and resourced in the development program Integrated 
Master Schedule. This schedule is executable, appropriately resourced, 
includes sufficient margin for issues that are normal in a development 
program, and has been agreed to by both Lockheed Martin and the F-35 
program office. Specific decision criteria include, but are not limited 
to, the following: 1) Planned 2012 System Engineering Technical Reviews 
for Block 3 software 2) Lockheed Martin progress improving concurrency 
change incorporation, both forward into production and back it post 
delivery modification engineering 3) Planned 2012 progress in F-35A, F-
35B, and F-35C durability testing 4) Planned 2012 progress in flight 
test 5) Planned 2012 line replaceable units (LRU) qualification 
Currently appropriated FY12 funding is necessary to implement this 
contracting strategy. The variable quantity of up to 6 additional Lot 6 
aircraft will be paid for with the FY12 funds originally authorized and 
appropriated for their purchase; however, these funds will not be 
obligated on contract until FY13. The Department intends to award Lot 7 
aircraft and the Lot 6 variable quantity aircraft through fully 
definitized contract actions in FY13. The initial Lot 6 contract award 
for 25 aircraft will require an Undefinitized Contract Action (UCA) to 
ensure production flow is not disrupted. However, the Department does 
not intend to award a UCA for the 25 aircraft in Lot 6 until essential 
agreement is reached for Lot 5. We believe our plan for negotiations 
for LRIP 6 and 7 will allow us to control production quantity based on 
the performance of the development program. It is important that 
Lockheed Martin demonstrate performance and help us to establish the 
confidence that the F-35 is a stable and capable platform.
    Mr. Bartlett. What is the status of the lot 5 negotiations for the 
fiscal year 2011 buy of F-35s? What are the major issues under 
negotiation?
    Mr. Van Buren. The contract for the low rate initial production 
(LRIP) Lot 5 aircraft is still being negotiated. We expect the 
negotiations to be completed by late spring 2012. Due to the sensitive 
nature of the negotiations, we are not able to provide any details of 
the negotiations. The Government negotiators are working to find the 
right balance between best value for the taxpayers and adequate profit 
for Lockheed Martin and its shareholders.
    Mr. Bartlett. Mr. Secretary, the Congress has provided funds for 21 
Global Hawk Block 30 aircraft at a cost of approximately $4 billion. 
Fourteen of these aircraft have been built and are flying operational 
missions. My understanding is that this budget proposes to eliminate 
the funding for future Global Hawk Block 30s and to mothball these 
relatively new aircraft, four right off the production line. The Global 
Hawk system was only declared operationally ready 8 months ago. Just 7 
months ago, Deputy Secretary Carter certified in writing to the 
Congress that the Global Hawk system was ``essential to national 
security.'' Can you explain why the DOD is poised to waste the $4 
billion we have already spent on these aircraft that are currently 
providing valuable intelligence to the warfighter?
    Mr. Van Buren. In September 2011, the DOD Joint Requirements 
Oversight Council reviewed recent adjustments in military strategy and 
determined that conventional high-altitude ISR requirements could be 
reduced. The Air Force further determined the U-2, which remains viable 
until at least 2040, was sufficient to meet those national security 
requirements for high-altitude ISR with this newly reduced force 
structure. Ultimately, continued investment in the RQ-4 Block 30 was 
not prudent given the U-2 meets the new requirement. This drove the 
decision to divest the RQ-4 Global Hawk Block 30, resulting in a $3.8B 
savings. Although money was saved with the decision to divest Global 
Hawk Block 30, $1.3B was needed to continue to operate and sustain the 
U-2 through the FYDP. This resulted in a net savings to the taxpayer of 
$2.5B. Furthermore, the decision to sustain the U-2 leverages $1.7B 
that was has been invested to modernize the weapon system. The U-2 
fleet in its current state has been certified to 75,000 flight hours 
(2040 and beyond at current utilization rates). In addition to the new 
engines in 1994-1998, the entire fleet has completed new power 
distribution (wiring), 21st century glass cockpit and modern avionics 
processor upgrades. The U-2s are currently on a 4000-hour programmed 
depot maintenance (PDM) cycle included in the budgeted operating costs. 
Finally, some of the $4B investment made in Block 30s will continue to 
benefit the Block 20 BACN and Block 40/MP-RTIP programs, as well as 
NASA Block 10 aircraft, NATO AGS and Navy BAMS.
    Mr. Bartlett. Mr. Secretary, nine Global Hawk Block 30s are 
currently supporting counterterror operations in three combatant 
commands. While budget pressures require tough choices, the decision to 
pull 18 Global Hawk Block 30 aircraft out of the active inventory seems 
short-sighted, when they are being used to support the warfighter. Can 
you explain the rationale for grounding and storing these aircraft when 
there is a demonstrated need by our combatant commanders for their 
capabilities?
    Mr. Van Buren. It is understood by the Air Force that this hearing 
question was directly posed to Maj Gen Posner, Director of Global Power 
Programs Office of the Assistant Secretary of the Air Force for 
Acquisition. The Witness Panel did not include the Secretary of Defense 
or the Secretary of the Air Force. In September 2011, the DOD Joint 
Requirements Oversight Council reviewed recent adjustments in military 
strategy and determined that conventional high-altitude ISR force 
structure could be reduced. The Air Force further determined the U-2, 
which remains viable until at least 2040, was sufficient to meet these 
reduced force structure requirements. Approximately $800M is required 
to field 18 Global Hawk Block 30 aircraft with comparable sensor 
capability to the U-2. Additionally, some of the $4B investment made in 
the Block 30 program will continue to benefit the Block 20 BACN and 
Block 40/MP-RTIP programs, as well as NASA Block 10 aircraft, NATO AGS 
and Navy BAMS.
    Mr. Bartlett. Can you describe the scope of the F-35 software 
program relative to other currently fielded fighter aircraft, whether 
the software schedule, based on the new technical baseline review 
schedule, is being met, and whether needed capabilities are being 
included in software deliveries?
    Admiral Venlet. The scope of F-35 software is unprecedented. Taken 
solely in terms of quantity, it is a large departure from previous 
fighter aircraft. The F-35 is projected to utilize 9.3 million source 
lines of code (MSLOC) on board the aircraft in its final configuration. 
By comparison, the FA-18E/F (Block II with AESA radar) has 
approximately 6.6 MSLOC onboard, and the F-22 has approximately 5.5 
MSLOC. The main differences in F-35 scope compared to legacy aircraft 
are tri-variant commonality, fully integrated software suite (FA-18 is 
federated), Helmet Mounted Display System complexity, broader mission 
capability (compared to F-22), increased number of data links, and 
multi-level security. Additionally, the F-35 significantly expands on 
the capabilities of legacy aircraft. In addition to on-board software, 
the F-35 will have approximately 14.8 MSLOC of ground-based software to 
support training systems, off-board mission planning, autonomic 
logistics and ground based support equipment, and another 4.5 MSLOC of 
non-deliverable software to operate labs, test stations, trainers, 
simulators, and flight test support.
    Relative to the 2011 re-baseline, Block 1B (supporting Low-Rate 
Initial Production (LRIP) 3 aircraft) software delivery to verification 
test is approximately 3 months behind schedule with only 75 percent of 
the fully planned content across the air system being provided. LRIP 4 
software content (Block 2A) is currently estimated to be 3 months 
behind plan. Recommendations for the F-35 software program put forward 
by the 2010 Technical Baseline Review have been implemented (e.g. 
additional lab testing capacity, added resources for software rework 
and integration). In addition, over the past 6 months, Lockheed Martin 
has introduced several process and organizational initiatives to 
improve its software development and address current schedule pressure. 
Some of these initiatives have long-term implementation paths requiring 
deep changes, although we are already seeing positive indications from 
the efforts to date.
    Prompted by the program office, Lockheed Martin initiated action to 
track software development by capability to facilitate early warnings 
on capability at risk. Block 2A is being closely monitored on a 
capability by capability basis, with assigned JPO counterparts to 
ensure government input on prioritizing needed capabilities. These 
teams are actively working through all contracted Block 1B and 2A 
capabilities to support the final Block 2A release to flight test.
    Mr. Bartlett. What is the status of the software for the logistics 
system to support F-35 maintenance so that the desired operational 
capabilities can be achieved?
    Admiral Venlet. The current Autonomic Logistics Information System 
(ALIS) software release (1.0.2E3) provides basic aircraft maintenance 
and mission planning capabilities for both System Development and 
Demonstration (SDD) and Low-Rate Initial Production aircraft. The 
follow-on release (1.0.3), which is already developed and laboratory 
tested with Independent Verification and Validation (IV&V) testing 
completed, constitutes the first instance of the integrated sustainment 
support solution. This release has been delayed and changes are being 
incorporated to address the findings from the IV&V. Introduction of the 
updated ALIS release to SDD flight test sites is projected for the 
third quarter of CY 2012 and to operational sites in the first quarter 
of CY 2013. After this release is fielded, the program has two 
additional major software releases (2.0 and 3.0) on schedule to bring 
ALIS to full requirements capability.
    Mr. Bartlett. Secretary Gates put the Marine Corps F-35B on 
probation due to concerns over deficiencies in development. Secretary 
has removed the probation. When will all of the recommended fixes to 
the F-35B be complete and tested?
    Admiral Venlet. The principal STOVL issues of concern in January 
2011 were:
      FS 496 Bulkhead Crack
      Auxiliary Air Inlet Buffet Door Vibration
      Lift Fan Drive Shaft
      Lift Fan Clutch Heating
      Roll Nozzle Actuator Heating
    Fixes tested and implemented are as follows:
      FS 496 Bulkhead Crack
          Redesigned for production beginning in Low Rate Initial 
        Production (LRIP) Lot 4 for F-35B, with fixes identified for 
        retrofits as needed
          Fatigue test (AKA durability testing) resumed on January 
        19, 2012
          Durability testing (2nd life) will be complete in 
        December 2014
          Depot retrofits are planned to begin in 2012 and 
        conclude in 2016
      Auxiliary Air Inlet (AAI) Buffet Door Vibration
          Redesigned upper AAI Door hardware began flight test in 
        December 2011
          Early test flight results are promising; testing will 
        complete in 2012
          New door design will be placed into production in 
        October 2013, with a first delivery forecast for March 2014
          Retrofits on existing aircraft are planned for 2012 
        through 2014
      Lift Fan Drive Shaft
          Custom fitted spacers are being used to accommodate the 
        airframe thermal expansion and contraction (interim solution)
          Qualification testing of new design will be completed by 
        January 2014
          New design will be broken into production in LRIP Lot 7
          Retrofits will be accomplished by attrition. The current 
        driveshaft with class spacers as an interim solution allows 
        safe operations throughout the flight envelope. The new 
        driveshaft will save weight, cost, and maintenance workload, 
        but does not warrant early replacement.
      Lift Fan Clutch Heating
          Interim solution is heat monitoring sensor; alerts pilot 
        when acceptable temperature is exceeded
          Detailed root cause investigation for permanent fix is 
        underway
          Testing for optimal spacing will be complete in August 
        2012
          JPO has not determined when the production break-in will 
        occur (if required); retrofits will occur by attrition
      Roll Nozzle Actuator Heating
          Airworthiness risks mitigated by insulating actuator 
        with thermal blanket
          Critical design review for new design was completed in 
        January 2012
          Quality testing of the improved actuator will be 
        completed December 2012
          New design will begin production break-in in LRIP Lot 7
          Retrofits will be accomplished through attrition
    Mr. Bartlett. We understand that significant development problems 
occurred with the helmet mounted display, potentially affecting the 
concept of operation of the F-35. Will you be able to resolve the issue 
and when will the helmet mounted display be fully tested?
    Admiral Venlet. There are three main technical issues identified 
affecting the operation of the GEN II Helmet Mounted Display System 
(HMDS). The technical issues are jitter, data latency, and acuity. The 
HMDS program has been modified to incorporate technical changes which 
are intended to solve these three issues. Accordingly, we are tracking 
a HMDS program risk which tracks the burn down of these issues. The 
program office plans to complete a Critical Design Review in late 2012 
for these improvements. To further reduce risk, the program has 
developed a second helmet using legacy technology to ensure there is 
capability prior to Operational Testing.
    Mr. Bartlett. The November 2011 Quick Look Review of F-35 Joint 
Strike Fighter Concurrency recommended that further decisions about F-
35 production be event driven, based on the achievement of sufficient 
test data demonstrating design maturity and well-controlled processes 
for executing and minimizing design changes across concurrent 
production. Going forward, what action does the program plan to take to 
minimize risks of flight test and production concurrency and the 
associated government exposure to additional costs on future 
procurement contracts?
    Admiral Venlet. The program is taking several actions to minimize 
our exposure to additional costs on future procurement contracts. From 
a contracting perspective, we have introduced cost-sharing for 
concurrency changes that are discovered and known prior to a Low-Rate 
Initial Production (LRIP) period of performance. This applies initially 
to the LRIP 5 period of performance and is a 50-50 share ratio with 
Lockheed Martin. In System Design and Development, we are implementing 
an incentive fee directly related to the reduction in span time between 
a declared deficiency and its corresponding implementation on the 
production line. By shortening the span time to implement a change, we 
will minimize the number of aircraft that will have to be modified in 
the future.
    During the Quick Look Review, the flight testing remaining and 
those areas that exhibit potential for discovery (such as transonic 
roll-off, high angle-of-attack, and buffet) that might have concurrency 
impact if there is discovery were deeply analyzed. The test program is 
executing the plan of record and has capacity to add test points to 
allow for refly and discovery if additional test is necessary to 
resolve anomalies.
    The program is proactively participating in the concurrency change 
process. JPO engineers participate with their Lockheed Martin 
counterparts in Engineering Review Boards, convened on a weekly basis 
to review and approve all change requests and culminating with the 
implementation of the change in the production line after final 
approval by the Configuration Control Board.
    The program office is working with Lockheed Martin to improve the 
end-to-end change implementation process. The program office, working 
with Lockheed Martin, is collecting and tracking metrics to capture 
change attributes to gain visibility and transparency into the change 
process. Using data-driven metrics will allow a more in-depth 
understanding of how deficiencies are reported and the span time 
required to formally cut changes into production. This understanding 
will improve management control by identifying process anomalies that 
will become candidates for mitigation.
    Mr. Bartlett. Are the F-35 production aircraft currently being 
delivered by the contractor on schedule and with the capabilities 
prescribed in the respective Lot contract?
    Admiral Venlet. No. The F-35 Low Rate Initial Production (LRIP) 
delivery schedule was re-baselined in September 2010. Current LRIP 
aircraft are being produced and delivered from the factory to the 
flight line in Forth Worth approximately 1 month behind the re-
baselined schedule. Once delivered to the flight line there is an 
additional average 6-month delay to Government acceptance (DD-250). The 
additional 6-month delay is caused by:
      Maturation of the final finishes processes;
      Traveled work to field operations (including planned 
Block 1B modifications for the first six LRIP 3 aircraft);
      Quality issues;
      Maintenance and repair of aircraft subsystems, and
      Reconciliation and approval of major variances.
    Since award of the LRIP contracts, the System Design and 
Development (SDD) program was also re-baselined. As a result of the re-
baseline and the adjusted timing of capability delivery, some of the 
capabilities that were expected to be qualified in SDD and delivered to 
production aircraft are not available. This has prevented Lockheed 
Martin Aeronautics from delivering F-35 production aircraft to the 
originally contracted capabilities.
    Mr. Bartlett. In his acquisition decision memorandum of March 28, 
2012, the Under Secretary of Defense for Acquisition, Technology and 
Logistics tasked the Director, Cost Assessment and Program Evaluation, 
in collaboration with the Navy, Air Force, Joint Program Office, and 
the Assistant Secretary of Defense (Logistics and Material Readiness) 
to develop a plan that identifies and quantifies opportunities to 
reduce operating and support costs. From your perspective, what are the 
primary drivers of F-35 support costs, and how is the F-35 development 
program addressing these issues?
    Admiral Venlet. The largest sustainment cost drivers are Unit Level 
Consumption (primarily depot-level repairable and consumable) and 
Manpower. The Joint Strike Fighter Program Office (JSFPO) is performing 
a review of contractor manpower requirements to assess their 
reasonableness and realism relative to achievable ramp up, steady state 
scope, and appropriate skill mix. An additional area of investigation 
continues to be the ground rules and assumptions associated with how 
the Services plan to operate F-35 to ensure that the design of the F-35 
air system and sustainment solution is maximized to drive efficiencies.
    The JSFPO is currently implementing an affordability strategy that 
includes a formal F-35 Affordability Management Plan (AMP). The AMP is 
focused on: reducing the costs of support products such as support 
equipment, spare parts and training devices; baselining requirements 
with the Services and leveraging increased efficiency opportunities; 
and addressing reliability and maintainability.
    The JSFPO is executing the second phase of a formal Business Case 
Analysis (BCA) and Targeted Affordability Program (TAP). Phase 1 of the 
BCA and TAP produced sustainment labor rates and labor mix 
recommendations that were captured in the FY11 annual estimate. 
Additionally, the analysis produced alternatives for aircraft 
utilization, deployment planning, and squadron manning that were 
included in the cost reductions.
    The 2012 phase 2 BCA and TAP efforts will build on the FY11 work 
and focus on the following:
      BCA--ALIS, Depot Maintenance, Repair, Overhaul & Update 
(MRO&U) planning, support equipment, software management and training.
      TAP initiatives--Matching Life Cycle Cost Estimate fee 
assumptions and labor rates to the Phase 1 BCA findings, Manpower Basis 
of Estimate's, ALIS and Training labor rates, Spare Parts Unit Database 
deep dive, Global asset pooling, and contract structure/incentive fees 
(initial focus on Supply Chain Management).
    Mr. Bartlett. As you know, the JSF program has had a host of 
problems over the past years resulting in significant cost growth, 
schedule slips, and, most importantly, delays in fielding capabilities 
to the warfighter. From your observations, what have been the primary 
causes to the JSF's development problems and challenges to date? Has 
the F-35 Joint Program Office been receptive to your past advice and 
recommendations for establishing a knowledge-based acquisition process? 
What future steps can the Department take to ensure the JSF program 
does not repeat its mistakes from the past and achieve a more 
predictable and successful outcome? What steps can be taken to place 
bounds on the programs and to help improve management and oversight of 
the program?
    Mr. Sullivan. JSF development problems and challenges can largely 
be traced to its extremely risky acquisition strategy, poor decisions 
at key junctures, and a management environment that was slow to 
acknowledge and address problems. JSF officials adopted a ``single 
step'' acquisition strategy to develop and acquire full combat 
capabilities on a very aggressive, risky schedule with substantial 
concurrency among development, testing, and production activities. The 
JSF program started system development before requisite technologies 
were ready, started manufacturing test aircraft before designs were 
stable, and moved to production before flight tests adequately 
demonstrated that the aircraft design met performance and operational 
suitability requirements. The late release of drawings--and continuing 
high rate of changes--resulted in a cascading of problems in 
establishing suppliers and manufacturing processes, which led to late 
parts deliveries, delayed the program schedule, and forced inefficient 
manufacturing processes to workaround problems. These issues are 
lessening now but the impacts are still felt in higher costs, late 
deliveries of test and production aircraft, and a much-delayed 
development test schedule.
    As part of its June 2010 Nunn-McCurdy certification to the 
Congress, DOD provided a root cause analysis for cost and schedule 
growth that identified similar factors. Specifically, the analysis 
cites a very aggressive and concurrent development schedule, 
unrealistic cost and schedule estimates, flawed and over-optimistic 
assumptions, and management's reluctance to accept unfavorable 
information, slowing down the ability of the contractor and government 
to recognize and respond to problems.
    For a number of years, the Department had not been very receptive 
to our findings and recommendations. Starting in 2001 with a debate 
about the initial business case for the F-35, defense officials have 
often non-concurred with our recommendations and, even when somewhat 
agreeable, did not usually fully implement them. For example, while 
officials generally acknowledged the merits of knowledge-based 
acquisitions and agreed that the JSF strategy was very risky, they 
chose to continue moving forward with the intent to manage the risks. 
They did not delay development start even though technologies were not 
ready and did not delay or reduce procurement when designs were not 
stable nor manufacturing processes mature. This attitude started 
changing ca. 2009 after internal reviews leading into 2010 
restructuring. Attachment 1 provides a listing of our recommendations 
since 2001 and the department's response to those recommendations [see 
Appendix pages 131-132].
    Over the last two years, JPO and OSD management have been 
significantly more receptive to our findings and recommendations than 
in previous years. This is a welcome change. Defense officials lately 
recognized numerous technical, financial, and management shortcomings 
and significantly restructured the program, making changes we support 
and, in quite a few cases, had earlier recommended. Restructuring 
actions were supported by a comprehensive, bottoms-up systems 
engineering review, which is a key knowledge-based practice. This 
recognized the need to spend more time and money to fix design and 
manufacturing processes and more thoroughly flight test aircraft before 
accelerating production further. Also, an OSD concurrency study 
corroborated our concerns about the immature design and the concurrency 
costs DOD is incurring as a result of the highly risky acquisition 
strategy not in compliance with knowledge-based practices.
    A new and sustained focus on affordability, effective 
implementation of restructuring actions, successful mitigation of 
design and manufacturing risks identified by independent panels, and 
more active and involved oversight by OSD and military services should 
lead to more predictable and achievable outcomes. Regaining and 
aggressively pursuing affordability--both in terms of the investment 
costs to acquire the JSF and the continuing costs to operate and 
maintain it over the life-cycle--will be very challenging, but is 
paramount to future success. Restructuring actions include the adoption 
of more realistic cost and schedule estimates, a more robust flight 
test program, and directed implementation of critical improvements 
needed in the aircraft and engine manufacturing and supplier management 
processes. Officials need to hold the line on annual procurement 
quantities and only ramp up production rates upon firm and confirming 
evidence from test results and performance indications that the 
production process is mature.
    Implementing the ``system maturity matrix'' we recommended in March 
2010 would provide a forcing tool to help senior defense officials and 
the Congress make annual budget and aircraft quantity decisions based 
on actual progress in building and testing the aircraft. The matrix is 
designed to provide criteria and conditions for comparing documented 
test and manufacturing results to expected progressive levels of 
demonstrated weapon system maturity in relationship to planned 
increases in future procurement quantities. This would help justify a 
ramp up of procurement quantities and corresponding funding levels 
leading up to full-rate procurement, now planned for 2019.
    OSD's F-35 Joint Strike Fighter Concurrency Quick Look Review, 
dated Nov. 29, 2011, makes a similar recommendation. The report 
determined a lack of confidence in design stability and concurrency 
costs of required fixes supported serious reconsideration of 
procurement and production planning. It recommends that further 
decisions about F-35 concurrent production be event driven, based on 
the achievement of sufficient test data to support increased confidence 
in design maturity and of a well-controlled process for executing and 
minimizing design changes across concurrent production.
    If the program's development costs continue to grow under the 
cascading effects of late drawings, design changes, and labor 
inefficiencies, the Department or Congress may need to consider, at 
some point, the idea of limiting any additional funding for 
development. The current funding levels of the F-35 are already testing 
the limits of realism. Any additional cost growth during development 
should be absorbed by the program, rather than add to the taxpayer's 
burden.
    Mr. Bartlett. DOD has been engaged in a comprehensive restructuring 
of the program for the past 2 years. In testimony last year before this 
Subcommittee, you said that GAO supports these actions. Do you still 
support the restructuring efforts, including the most recent ones added 
by the Secretary in January 2012? Have you seen concrete examples of 
improvements from these actions?
    Mr. Sullivan. Yes, we still support the restructuring actions, 
although we continue to be concerned about the viability of future 
annual funding rates. Starting in January 2010, restructuring actions 
by the Department have placed the JSF on a more achievable course, 
albeit a lengthier and more expensive one. The Department has 
progressively lowered the production ramp-up rate and cut near term 
procurement quantities; fewer aircraft procured while testing is still 
ongoing lowers the risk of having to modify already produced aircraft. 
The new development flight test schedule is more realistic and better 
resourced, using more conservative assumptions about fly rates and test 
point achievements and providing for more flights and more test assets. 
This has paid off with relatively good test flight performance in 2010 
and 2011. Undergirding restructuring actions was the technical baseline 
review done by the program office--a needed and comprehensive systems 
engineering review of the entire program that identified numerous 
disconnects in functions and information. In addition, several positive 
accomplishments by the prime contractor may spur improved future 
performance. Lockheed Martin implemented an improved and comprehensive 
integrated master schedule, loaded the new data from restructuring, and 
completed a schedule risk assessment, as we recommended several years 
ago. Also, DCMA and program officials believe that Lockheed has made a 
concerted effort to improve its earned value management system in 
compliance with federal standards. Initial reviews of the new 
procedures, tools, and training indicate that the company is on track 
to have its new system and processes approved in 2012.
    Mr. Bartlett. As you know, the JSF acquisition program is expected 
to still require over $300 billion to complete the acquisition.
    How do you view affordability as a challenge for the program?
    Mr. Sullivan. Overall program affordability--both in terms of the 
investment costs to acquire the JSF and the continuing costs to operate 
and maintain it over the life-cycle--remains a major risk. The long-
stated intent that the JSF program would deliver an affordable, highly 
common fifth generation aircraft that could be acquired in large 
numbers could be in question. Total U.S. investment in the JSF is now 
estimated at $395.7 billion to develop and procure 2,457 aircraft over 
several decades and will require a long-term, sustained funding 
commitment. As the JSF program moves forward, unprecedented levels of 
funding will be required during a period of more constrained defense 
funding expectations overall. As the program continues to experience 
cost growth and delays, projected annual funding needs are 
unprecedented, averaging more than $12.5 billion a year through 2037. 
The Air Force alone needs to budget from $6 to $11 billion per year 
from fiscal year 2016 through 2037 for procurement. At the same time; 
the Air Force is committed to other big-dollar projects such as the KC-
46 tanker and a new bomber program.
    In addition, current JSF life-cycle cost estimates are considerably 
higher than the legacy aircraft it will replace; this has major 
implications for future demands on military operating support budgets 
and plans for recapitalizing fighter forces. The most recent estimate 
by the Director of Cost Assessment and Program Evaluation projects 
total U.S. operating and support (O&S) costs of $1.1 trillion for all 
three variants based on a 30-year service life and predicted usage and 
attrition rates. Defense leadership stated in 2011 that sustainment 
cost estimates of this magnitude were unaffordable and simply 
unacceptable in this fiscal environment. Our military services and the 
international partners have all expressed concerns about long-term 
affordability. The program has undertaken efforts to address this life-
cycle affordability concern, however, until DOD can demonstrate that 
the program can perform against its cost projections, it will continue 
to be difficult for the U.S. and international partners to accurately 
set priorities, establish affordable procurement rates, retire aged 
aircraft, and establish supporting infrastructure.
    Mr. Bartlett. DOD has been engaged in a comprehensive restructuring 
of the program for the past 2 years. In testimony last year before this 
Subcommittee, you said that GAO supports these actions. Several actions 
seem the same or similar to GAO's recommendations from years ago. What 
are some of these and why did the Department not previously implement 
your recommendations?
    Mr. Sullivan. Several actions are similar:
    Our March 2008 report criticized the ``Mid-Course Risk Reduction'' 
effort that cut flight test assets and reduced the number of 
development flights. We recommended that DOD revisit this effort to 
address our concerns about testing, use of management reserves, and 
manufacturing deficiencies. Instead, DOD replenished management 
reserves from within the program baseline and did not revise its plan, 
nor fix the problems. Consequently, management reserves were again 
depleted. Recent restructuring actions since 2010 added more test 
resources, increased the number of flight tests, and extended the 
schedule, effectively reversing the mid-course plan.
    Also in 2008, we determined that the program cost estimate was not 
reliable and likely underestimated and recommended that a new 
comprehensive independent cost estimate and schedule risk assessment 
are needed. We reiterated these concerns in subsequent reports, 
including the need to make a better projection of life-cycle operating 
and support costs. DOD's joint estimating team did provide better cost 
estimates in the interim, but it was not until this year (and after a 
Nunn-McCurdy cost breach) that a comprehensive independent cost 
estimate for the program to completion were completed. The CAPE's 
independent cost estimate and a new estimate by the JPO supported a new 
acquisition program baseline that is substantially larger than the 
previous baseline and which delays key milestones. The CAPE also 
provided a new estimate of military construction costs and projected 
O&S costs of $1.1 trillion over 30 years given certain assumptions.
    Since 2006, we have consistently warned against procuring 
quantities of aircraft much ahead of testing results and the 
demonstrated ability of the manufacturing process to produce at higher 
rates. For example, in 2009 we reported on the risks posed by DOD plans 
to further accelerate procurement and to do so on cost reimbursement 
contracts. DOD responded that planned procurement rates were efficient 
and feasible and also declined to establish a firm plan for 
transitioning to fixed-price contracts. We were gratified when Defense 
leadership substantially reduced near term procurement, decreased ramp 
rate from one year to the next, and awarded the first fixed-price 
production contract. DOD has now reduced near-term procurement 3 times 
in the last 3 years in recognition of the need to stabilize design and 
fix deficiencies found in testing before ramping up production.
    More recently, we recommended comprehensive schedule risk 
assessments, independent software studies, and moving to fixed-price 
contracts for production. The Department implemented the latter in its 
first stage of restructuring ca. February 2010 and recently completed 
the first two.
    For years, program leadership was slow to recognize problems and 
was generally unresponsive to other DOD organizations as well as us. 
For example, the CAIG and DOT&E also warned against cutting flight test 
resources. Rather than implementing ours and other recommendations, 
defense officials usually acknowledge the concerns, but stated they 
were managing the risks.
    Mr. Bartlett. DOD has been engaged in a comprehensive restructuring 
of the program for the past 2 years. In testimony last year before this 
Subcommittee, you said that GAO supports these actions. Going forward, 
what critical challenges remain for the program from a cost and 
schedule standpoint?
    Mr. Sullivan. As I stated at the hearing, I see 5 areas of concern 
moving forward. These are: software development; continued engineering 
changes emanating from flight test; funding assumptions that average 
about $12.5 billion per year through 2037; mission systems development, 
most significantly the helmet mounted display; and the contractor's 
ability to manage a large, global supply chain. Contract cost overruns, 
delayed aircraft deliveries, and continued concurrency costs are 
expected to continue for several more years. The program has not yet 
demonstrated a stable design and manufacturing processes capable of 
efficient production. Engineering changes are persisting at relatively 
high rates and additional changes are likely as testing continues. 
There is risk of future cost growth from test discoveries driving 
changes to design and manufacturing processes. Until manufacturing 
processes are in control and engineering design changes resulting from 
information gained during developmental testing are reduced, there is 
risk of more cost growth. Manufacturing processes and performance 
indicators show some progress for improved performance. Even with the 
substantial reductions in near-term procurement quantities, DOD is 
still investing billions of dollars on hundreds of aircraft while 
flight testing has years to go.
    Software development and integration--essential to JSF 
capabilities--will continue to be major factors driving JSF costs and 
schedule. JSF software development is one of the largest and most 
complex projects in DOD history, and it has grown in size and 
complexity, and is taking longer to complete than expected. Developing, 
testing, and integrating software, mission systems, and logistics 
systems are critical for demonstrating the operational effectiveness 
and suitability of a fully integrated, capable aircraft and pose 
significant technical risks moving forward. In attempting to maintain 
schedule, the program has deferred some capabilities to later blocks. 
Deferring tasks to later phases of development adds more pressure and 
costs to future efforts and likely increases the probability of defects 
being realized later in the program, when the more complex capabilities 
in these later blocks are already expected to pose substantial 
technical challenges.
    Going forward, Lockheed Martin's and Pratt & Whitney's abilities to 
manage an expanding global supplier network are fundamental to meeting 
future production rates and throughput expectations. DOD's Independent 
Manufacturing Review Team in 2009 identified global supply chain 
management as the most critical challenge for meeting production 
expectations. The cooperative aspect of the supply chain provides both 
benefits and challenges. The international program structure is based 
on a complex set of relationships involving both government and 
industry from the United States and eight other countries. Overseas 
suppliers are playing a major and increasing role in JSF manufacturing 
and logistics. For example, center fuselage and wings will be 
manufactured by Turkish and Italian suppliers, respectively, as second 
sources. In addition to ongoing supplier challenges--parts shortages, 
failed parts, and late deliveries--incorporating international 
suppliers presents additional challenges. In addition, the program must 
deal with exchange rate fluctuations, disagreements over work shares, 
technology transfer concerns, different accounting methods, and 
transportation requirements that have already caused some delays. Also, 
suppliers have sometimes struggled to develop critical and complex 
parts while others have had problems with limited production capacity.
    Mr. Bartlett. Regarding manned and unmanned intelligence, 
surveillance and reconnaissance programs, has the Navy completed a 
comparative analysis of life cycle cost and operational effectiveness 
of manned and unmanned systems like the P-3, P-8 and Broad Area 
Maritime Surveillance aircraft?
    Admiral Skinner. The P-3 aircraft has been flying for over 50 years 
and is the baseline for measuring Life Cycle Cost and Operational 
Effectiveness of Navy's new ASW/ISR platforms (P-8 and BAMS). Predicted 
cost and effectiveness was fully evaluated during the Analysis of 
Alternatives (AoA), completed for P-8 in 2002 and BAMS in 2003.
    Mr. Bartlett. The Navy's Broad Area Maritime Surveillance Program 
had assumed cost savings in production and operations and maintenance 
because of Global Hawk program shared overhead, training, basing costs, 
and other operations and sustainment costs. In addition, there is the 
possibility of a break in the production line, with Global Hawk Block 
30 termination, given the current BAMS production schedule. Do you know 
what these costs will be?
    Admiral Skinner. With regard to operations, maintenance, training, 
and basing costs, the BAMS UAS Program as reflected in the President's 
Budget request for FY13 accounts for the cost of continuing as a Navy-
only acquisition. BAMS operations, maintenance, training, and basing 
are independent of the Global Hawk support structure. The procurement 
cost estimate is similarly based on proceeding without concurrent USAF 
Global Hawk production. At Milestone B, the BAMS Program was estimated 
forward without shared savings, assuming a transition of the Q4 
production line from Air Force RQ-4 UAs in FY13 to Navy-only quantities 
of MQ-4C UAs in FY14. Since the estimate assumed stand-alone 
production, a decision to continue Global Hawk production beyond FY13 
could have resulted in savings of up to $150M across the FYDP. Those 
savings did not materialize because Global Hawk Block 30 production was 
terminated. The estimate did assume savings based on reuse of existing 
tooling and special test equipment; these efficiencies will still be 
captured since the necessary equipment will transition to Navy custody 
as required to support the ongoing BAMS UAS acquisition. The residual 
risk to production continuity is related to terminating Global Hawk 
Block 30 after Lot 10, since this invalidates the BAMS UAS estimate of 
a seamless production transition from USAF RQ-4B Global Hawk to MQ-4C 
BAMS UAS. A production break created by Air Force Global Hawk Block 30 
termination is estimated to cost approximately $42 million. This value 
assumes that NATO AGS awards as scheduled and the resulting gap 
requiring coverage is 3.5 months.
    Mr. Bartlett. Can you describe the Navy and Marine Corps program 
and funding of unmanned aircraft vehicle sense and avoid programs to 
further operation of unmanned aircraft systems in the National Airspace 
System?
    General Robling. The Marine Corps' Ground Based Sense-And-Avoid 
(GBSAA) initiative is in direct support of Marine Unmanned Aerial 
Vehicle Squadron 2 (VMU-2) based at Marine Corps Air Station Cherry 
Point. Current Federal Aviation Administration (FAA) regulations limit 
DOD unmanned aircraft (UA) operations to Restricted Airspace unless the 
UA are operating under a Certificate of Authorization (COA) issued by 
the FAA. Currently, FAA internal guidance requires visual observers or 
chase planes as a condition for approving a COA for an 11 miles transit 
to the nearest Restricted Area. The result is reduced training 
opportunities due to the inability to directly access training areas 
from its home station. While ground embarkation and transport of VMU-2 
aircraft and equipment into local Restricted Areas has been employed as 
an alternate solution, this method is costly, time consuming, and 
increases wear on all components. The Cherry Point GBSAA program was 
funded by the OSD (AT&L) UAS Task Force as a solution to VMU-2 training 
deficiencies, and as a charter initiative to demonstrate capabilities 
in support of DOD National Airspace System UAS integration efforts. If 
approved for use, the system will utilize an existing radar feed to 
sanitize narrow corridors of airspace between Cherry Point and local 
Restricted Areas to allow the safe airborne transit of VMU-2 unmanned 
aircraft. All GBSAA equipment has been installed at MCAS Cherry Point, 
certified by DOD for its intended use, and has been demonstrated in an 
operationally relevant environment using trained USMC operators. 
Discussions are ongoing with the FAA regarding this system providing a 
sense-and-avoid capability as a condition of FAA granting the required 
COA. OSD provided $3.1 million of RDT&E funding (FY 2012-FY 2012) for 
this effort. Formal requirements development based upon the 
demonstrated Cherry Point capability, other DOD airspace integration 
efforts, as well as anticipated USMC future operational needs are 
underway in support of resourcing decisions. Specific information on US 
Navy sense and avoid programs can be provided by appropriate Navy 
staff.
    Mr. Bartlett. In your statement you note that F-35B and F-35C 
initial operational capability (IOC) dates have not been determined by 
leadership but you describe capabilities for IOC such as 10 F-35B 
aircraft with software block 2B for the Marine Corps, and 10 F-35C 
aircraft with software block 3F for the Navy. Based on the current F-35 
development and procurement schedule, can you estimate what year the F-
35B and F-35C will be declared IOC?
    General Robling. The IOC date for the F-35B and F-35C has not yet 
been determined by the CMC or CNO. The Navy and Marine Corps require 
Service specific operational capabilities as defined in the F-35 
Operational Requirements Document (ORD) prior to considering 
declaration of IOC. Achieving these capabilities are event driven and 
dependent upon the progress of the re-baselined JSF Program. Based on 
the current JSF Program Office development plans we anticipate an F-35B 
IOC in 2015 and an F-35C IOC at the completion of Initial Operational 
Test and Evaluation in 2018.
    Mr. Bartlett. Can you describe the Navy and Marine Corps program 
and funding of unmanned aircraft vehicle sense and avoid programs to 
further operation of unmanned aircraft systems in the National Airspace 
System?
    Admiral Floyd. The Navy is funding on the order of $175M for 
development and hardware procurement efforts associated with 
integrating the Broad Area Maritime Surveillance (BAMS) aircraft into 
the National Airspace System (NAS). These efforts include the BAMS 
Program development of a Pilot-in-the-Loop Due Regard capability 
providing a first generation Sense-and-Avoid system to be deployed 
operationally in international airspace beginning in FY 2015. The Navy 
is also leading a Central Test Evaluation and Investment Program 
(CTEIP), developing a DOD-wide common Modeling and Simulation and Test 
& Evaluation infrastructure for UAS programs. Additionally, the Navy is 
working in coordination with NASA, the FAA, and other Services in the 
development of standards and procedures for integrating UAS into the 
NAS.
    Mr. Bartlett. In your statement you note that F-35B and F-35C 
initial operational capability (IOC) dates have not been determined by 
leadership but you describe capabilities for IOC such as 10 F-35B 
aircraft with software block 2B for the Marine Corps, and 10 F-35C 
aircraft with software block 3F for the Navy. Based on the current F-35 
development and procurement schedule, can you estimate what year the F-
35B and F-35C will be declared IOC?
    Admiral Floyd. Not at this time. F-35B and F-35C IOC will be based 
on the development and test program performance (in addition to how the 
Department of the Navy defines IOC as discussed in your question 
above). The Department is pleased with the F-35 progress in 2011, but 
we require more definition in the program schedule, to include 
operational test dates, before targeting a timeline with a specific IOC 
date.
    Mr. Bartlett. Just 7 months ago, Deputy Secretary Carter certified 
in writing to the Congress that the Global Hawk system was ``essential 
to national security,'' there was no other acceptable capability to 
meet the requirement, and the Global Hawk was $220M cheaper per year to 
operate than the U-2. Then the recommendation to terminate Block 30 is 
a complete reversal of the USAF position just 7 months ago. Please 
explain how an asset can be critical to national security and cost less 
than the alternative, but just 7 months later be terminated?
    General Holmes. It is accurate that the RQ-4 can fly longer and 
further than the U-2, and in last year's Nunn-McCurdy certification, 
the RQ-4 was found to be $220M less expensive per year to operate than 
the U-2. However, OSD CAPE based this analysis on a High Altitude orbit 
1,200 miles from the launch base. During the analysis done in the FY13 
Budget Review, the launch base for the RQ-4 and U-2 was assumed to be 
from their normal operating locations. Coupled with the fact that the 
cost per flying hour of the RQ-4 and U-2 is roughly equivalent at $32K 
per hour, per information contained in the Air Force Total Ownership 
Costs Database, the RQ-4 did not offer a cost advantage over the U-2 in 
the FY13 Budget Review.
    After the Nunn-McCurdy Review, the DOD Joint Requirements Oversight 
Council reviewed recent adjustments in military strategy and determined 
that conventional high-altitude ISR requirements could be reduced. The 
Air Force further determined the U-2, which remains viable until at 
least 2040, was sufficient to meet those national security requirements 
for high-altitude ISR with this newly reduced force structure.
    Ultimately, continued investment in the RQ-4 Block 30 was not 
prudent given there is no difference in the operating costs between the 
RQ-4 and U-2 when operating from their normal operating locations and 
the U-2 meets the new requirement. This drove the decision to divest 
the RQ-4 Global Hawk Block 30, resulting in a $3.8B savings. Although 
money was saved with the decision to divest Global Hawk Block 30, $1.3B 
was needed to continue to operate and sustain the U-2 through the FYDP. 
This resulted in a net savings to the taxpayer of $2.5B.
    In September 2011 following the Nunn-McCurdy certification, the DOD 
Joint Requirements Oversight Committee modified the high-altitude ISR 
requirement where the U-2 was deemed sufficient to meet that amended 
requirement. Coupled with the austere budget environment, the 
Department decided it could no longer afford additional investment 
required for the RQ-4 Global Hawk Block 30.
      Requirement: The Air Force further determined the U-2 
(which remains viable until at least 2040) was sufficient to meet the 
reduced force structure requirements. Continued increased investment in 
the RQ-4 is required to field a comparable capability to the U-2 and 
was determined to be unaffordable.
      Budget: The Budget Control Act was passed in August 2011. 
Additional investment in the RQ-4 is not warranted given a significant 
reduction in the Department's budget and because the U-2 remains 
operationally viable to satisfy the reduced JROC requirements at 
considerably lower total cost over the FYDP.
    Mr. Bartlett. Global Hawk was the first intelligence asset to the 
Japanese Earthquake/Tsunami Relief effort and first to Libya, and by 
all accounts it performed very well. In both of these cases, the Global 
Hawk was able to fly into areas too risky for manned aircraft (an 
active Surface to Air Missile site in Libya and a nuclear environment 
in Japan). How will the USAF compensate for losing this 
transformational capability?
    General Holmes. The Air Force will continue to satisfy the 
operational needs of the Combatant Commands through the Global Force 
Management Process. The Joint Requirements Oversight Council adjustment 
affirms the modified high-altitude ISR requirement is sufficient to 
address any such future contingency.
    Mr. Bartlett. The Department's combatant commanders have an 
insatiable need for ISR. Intelligence data is routinely the number one 
unmet requirement. While budget pressures require tough choices, the 
decision to pull 18 Global Hawk Block 30 aircraft out of the active 
inventory seems short-sighted. I question the proposal to scrap 
aircraft currently providing intelligence support to our warfighters, 
including those purchased as recently as last year. Can you tell me why 
it is necessary to take these assets out of commanders' hands and 
instead send them to the desert to rust?
    General Holmes. In September 2011, the DOD Joint Requirements 
Oversight Council reviewed recent adjustments in military strategy and 
determined that conventional high-altitude ISR requirements could be 
reduced. The Air Force further determined the U-2, which remains viable 
until at least 2040, was sufficient to meet those national security 
requirements for high-altitude ISR with this newly reduced force 
structure. Ultimately, continued investment in the RQ-4 Block 30 was 
not prudent given that the U-2 meets the new requirement significant 
reduction in the Department's budget. This drove the decision to divest 
the RQ-4 Global Hawk Block 30, resulting in a $3.8B savings where $1.3B 
was needed to continue to operate and sustain the U-2 through the FYDP. 
This resulted in a net savings to the taxpayer of $2.5B. Finally, some 
of the $4B investment made in Block 30s will continue to benefit the 
Block 20 BACN and Block 40/MP-RTIP programs, as well as NASA Block 10 
aircraft, NATO AGS and Navy BAMS. A modified requirement where the U-2 
is sufficient and a reduced budget where the Department could no longer 
afford to keep investing in RQ-4 Global Hawk Block 30 drove the 
retirement decision. Requirement: In September 2011, the DOD Joint 
Requirements Oversight Council reviewed recent adjustments in military 
strategy and determined that the high-altitude ISR requirement 
structure could be modified. The Air Force further determined the U-2, 
which remains viable until at least 2040, was sufficient to meet these 
reduced requirements. Continued increased investment in RQ-4 was 
required to field a comparable capability to U-2 and was determined to 
be unaffordable. Budget: Continued, increased investment in RQ-4 was 
not warranted given a significant reduction in the Department's budget 
and an alternative system, the U-2, still operationally viable at 
considerably lower total cost over the FYDP.
    Mr. Bartlett. The Congress has provided funds for 21 Global Hawk 
Block 30 aircraft at a cost of approximately $4 billion. Fourteen of 
these aircraft have been built and are flying operational missions. My 
understanding is that this budget proposes to eliminate the funding for 
future Global Hawk Block 30s and to mothball these relatively new 
aircraft in favor of a Cold War-era system. Can you explain why the DOD 
is poised to waste the $4 billion we have already spent on these 
aircraft that are currently providing valuable intelligence to the 
warfighter?
    General Holmes. In September 2011, the DOD Joint Requirements 
Oversight Council reviewed recent adjustments in military strategy and 
determined that conventional high-altitude ISR requirements could be 
reduced. The Air Force further determined the U-2, which remains viable 
until at least 2040, was sufficient to meet those national security 
requirements for high-altitude ISR with this newly reduced force 
structure. Ultimately, continued investment in the RQ-4 Block 30 was 
not prudent given the U-2 meets the new requirement. This drove the 
decision to divest the RQ-4 Global Hawk Block 30, resulting in a $3.8B 
savings. Although money was saved with the decision to divest Global 
Hawk Block 30, $1.3B was needed to continue to operate and sustain the 
U-2 through the FYDP. This resulted in a net savings to the taxpayer of 
$2.5B. Furthermore, the decision to sustain the U-2 leverages $1.7B 
that was has been invested to modernize the weapon system. The U-2 
fleet in its current state has been certified to 75,000 flight hours 
(2040 and beyond at current utilization rates). In addition to the new 
engines in 1994-1998, the entire fleet has completed new power 
distribution (wiring), 21st century glass cockpit and modern avionics 
processor upgrades. The U-2s are currently on a 4000-hour programmed 
depot maintenance (PDM) cycle included in the budgeted operating costs. 
Finally, some of the $4B investment made in Block 30s will continue to 
benefit the Block 20 BACN and Block 40/MP-RTIP programs, as well as 
NASA Block 10 aircraft, NATO AGS and Navy BAMS.
    Mr. Bartlett. A recent CSBA report said that eight manned aircraft 
with otherwise identical characteristics to a Global Hawk would be 
necessary to maintain the same orbit as three unmanned Global Hawks. If 
this is the case, how can it be that you determined the manned aircraft 
to be the most cost-efficient solution? How does the Global Hawk Block 
30 compare to the U-2 on a cost-per-ISR-hour basis?
    General Holmes. The operating characteristics of the U-2 are vastly 
different than those of the Global Hawk including operating altitudes, 
sensor capabilities, stand-off ranges and mission effectiveness. A 
nominal RQ-4 Combat Air Patrol (CAP) is four aircraft, and a nominal U-
2 CAP is five aircraft. The Global Hawk Block 30 has not matured to the 
point where a true comparison of operational costs is possible. 
Nevertheless, the Department conducted an analysis during the FY13 
budget review using data from previous Air Force and Department 
efforts. The Air Force Total Ownership Cost (AFTOC) database figures in 
FY11 show both the U-2 and RQ-4 at $32K per hour. The Air Force did not 
begin flying the RQ-4 Block 30 until March 2011, so there is only six 
months of representative flying hour information in the database. Also, 
the Air Force did not fly the RQ-4 Block 30 with the SIGINT sensor in 
2011. The Air Force will begin flying with this payload in April 2012 
and expects the RQ-4 flying hour costs to be greater than those for the 
U-2. Given comparable flying hour costs, and given the large investment 
required for the RQ-4, the Air Force chose to divest the Block 30 
program and save a net of $2.5B.
    Mr. Bartlett. How have the Department's decisions to reduce Block 
30 quantities while at the same time increasing requirements 
(increasing the number of simultaneous sensors required) contributed to 
the increased system cost of Global Hawk?
    General Holmes. The Air Force decision to terminate the Block 30 
program was based upon a reduced requirement rather than an increased 
requirement. The requirement for the Global Hawk Block 30 aircraft is 
to execute electro-optical/infrared (EO/IR), synthetic aperture radar 
(SAR), limited moving target indicator (MTI) and signals intelligence 
(SIGINT) missions simultaneously. No change to the Block 30 requirement 
factored into the decision to terminate the program. In September 2011, 
the DOD Joint Requirements Oversight Council reviewed recent 
adjustments in military strategy and determined that conventional high-
altitude intelligence, surveillance, and reconnaissance force structure 
could be reduced. The Air Force further determined the U-2, which 
remains viable until at least 2040, was sufficient to meet these 
reduced force structure requirements. Continued increased investment in 
RQ-4 would have been required to field a comparable capability to U-2 
and therefore, the RQ-4 was determined to be unaffordable. Continued, 
increased investment in RQ-4 was not warranted given a significant 
reduction in the Department's budget and an alternative system, the U-2 
is still operationally viable at considerably lower total cost over the 
FYDP.
    Mr. Bartlett. When my staff looks at the Air Force Total Ownership 
Cost data for U-2 and Global Hawk, we see that in 2011 the cost per 
operational hour (that is, the cost per hour executing missions) for 
Global Hawk is lower than U-2. This seems to be a much more relevant 
number than cost per flying hour. How does this square with your claim 
that Global Hawk operating costs are higher?
    General Holmes. The total cost of keeping the Global Hawk Block 30 
and continuing the investment to improve the RQ-4 to reach a comparable 
capability with U-2 was more expensive than keeping the U-2. As a 
result, the Department chose to save $2.5B across the FYDP in a reduced 
budget environment since the U-2 is sufficient to meet the requirement 
and remains viable through 2040. The Joint Requirements Oversight 
Council reduced the high-altitude ISR requirement, and the AF budget 
reduced to where the Department could no longer afford to keep 
investing in the RQ-4 Global Hawk Block 30. Requirement: In September 
2011, the DOD Joint Requirements Oversight Council reviewed recent 
adjustments in military strategy and determined that conventional high-
altitude ISR requirements could be modified. The Air Force further 
determined the U-2, which remains viable until at least 2040, was 
sufficient to meet these modified requirements. Continued increased 
investment in RQ-4 was required to field a comparable capability to U-2 
and was determined to be unaffordable. Budget: Continued, increased 
investment in RQ-4 was not warranted given a significant reduction in 
the Department's budget and an alternative system, the U-2, is still 
operationally viable at a considerably lower cost over the FYDP. 
Additionally, the actual cost per flying hour (CPFH) data, when the U-2 
is employed at its normal operational distance, shows the U-2 cost is 
comparable to the RQ-4 cost. The latest actual CPFH data shows that 
both platforms are operating at $32K per hour.
    Mr. Bartlett. What is the cost comparison for operating U-2 
compared to Global Hawk? What is the difference in the cost per mission 
for each? How much of the U-2 fleet is available to perform all ISR 
missions?
    General Holmes. The cost per flight hour is roughly the same. The 
U-2 costs $320K per 10-hour Multi-INT mission and the RQ-4 $640K per 
20-hour Single-INT mission. There are 27 U-2 ``single seaters'' of 
which one is always rotating through depot level maintenance, and two 
utilized as test birds (capable of flying missions, but not typically 
utilized for that purpose). Thus, there are 24 mission-capable U-2 
aircraft at any given time.
    Mr. Bartlett. If the U-2 is extended until 2025, and the system 
that was slated to replace it is cancelled, what is your plan for 
replacing the U-2? How much will it cost to modernize and maintain the 
Cold War-era U-2 for another 15 years?
    General Holmes. There is no projected U-2 retirement date. The U-2 
aircraft remains viable until 2040 and meets all sensor requirements 
currently tasked by the Combatant Commands. The Air Force will invest 
approximately $68 million per year in sustainment and enhancement 
modifications to ensure platform modernization and maintenance.
    Mr. Bartlett. I understand the Department's Cost Assessment and 
Program Evaluation (CAPE) performed a detailed cost analysis associated 
with the decision to terminate and mothball the Global Hawk Block 30 
program. Please share this analysis with the Congress so it can better 
understand the analytical foundation of this decision. Provide a 
detailed cost assessment including the basis of costs for both 
sustainment and procurement through 2025.
    General Holmes. In support of the FY13 President's Budget Request 
(PBR), the USAF analyzed the operational output of both the RQ-4 and 
the U-2 using existing CONOPS for both aircraft and determined that U-2 
capability was sufficient for operational needs. When analyzed in this 
context, the U-2 and RQ-4 operating costs were nearly equal. Given 
comparable flying hour costs, and given the large investment required 
for the RQ-4, the Air Force chose to divest the Block 30 program and 
save a net of $2.5B. The CAPE conducted their own independent cost 
analysis based on three scenarios to come to the conclusion that the U-
2 was the more affordable option to meet the newly reduced requirement. 
The Air Force will defer to CAPE to provide Congress the details of 
their independent cost analysis.
    Mr. Bartlett. Given our alarming and unsustainable national debt, 
American taxpayers expect and deserve that Congress will make the 
difficult decisions to restore fiscal responsibility. However, these 
decisions cannot be short-sighted or made at the expense of our long-
term budget or national security needs. Please detail how terminating a 
new cutting-edge platform, Global Hawk Block 30, is less expensive than 
extending the life of an aging platform, U-2, which will require 
increased investments in coming years is a fiscally responsible 
decision over the next decade.
    General Holmes. In September 2011, the DOD Joint Requirements 
Oversight Council reviewed recent adjustments in military strategy and 
determined that conventional high-altitude ISR requirements could be 
reduced. The Air Force further determined the U-2, which remains viable 
until at least 2040, was sufficient to meet those national security 
requirements for high-altitude ISR with this newly reduced force 
structure. Ultimately, continued investment in the RQ-4 Block 30 was 
not prudent given the U-2 meets the new requirement and the significant 
reduction in the Department's budget. This drove the decision to divest 
the RQ-4 Global Hawk Block 30, resulting in a $3.8B savings. Although 
money was saved with the decision to divest Global Hawk Block 30, $1.3B 
was needed to continue to operate and sustain the U-2 through the FYDP. 
This resulted in a net savings to the taxpayer of $2.5B. Finally, some 
of the $4B investment made in Block 30s will continue to benefit the 
Block 20 BACN and Block 40/MP-RTIP programs, as well as NASA Block 10 
aircraft, NATO AGS and Navy BAMS. The total cost of keeping the Global 
Hawk Block 30 and continuing the investment to improve the RQ-4 to 
reach a comparable capability with U-2 was more expensive than keeping 
the U-2. As a result, the Department chose to save $2.5B across the 
FYDP in a reduced budget environment since the U-2 is sufficient to 
meet the requirement and remains viable through 2040. The Joint 
Requirements Oversight Council reduced the high-altitude ISR 
requirement, and the AF budget reduced to where the Department could no 
longer afford to keep investing in the RQ-4 Global Hawk Block 30. 
Requirement: In September 2011, the DOD Joint Requirements Oversight 
Council reviewed recent adjustments in military strategy and determined 
that conventional high-altitude ISR requirements could be modified. The 
Air Force further determined the U-2, which remains viable until at 
least 2040, was sufficient to meet these modified requirements. 
Continued increased investment in RQ-4 was required to field a 
comparable capability to U-2 and was determined to be unaffordable. 
Budget: Continued, increased investment in RQ-4 was not warranted given 
a significant reduction in the Department's budget and an alternative 
system, the U-2, is still operationally viable at a considerably lower 
cost over the FYDP. Additionally, the actual cost per flying hour 
(CPFH) data, when the U-2 is employed at its normal operational 
distance, shows the U-2 cost is comparable to the RQ-4 cost. The latest 
actual CPFH data shows that both platforms are operating at $32K per 
hour.
    Mr. Bartlett. Our budget crisis demands that we maximize the 
efficiency for every program. At a macro level it is clear that an 
unmanned system can fly longer and further than a manned system. A 
recent CSBA analysis showed in great detail how unmanned systems 
feature one-third the life cycle cost of manned systems. Explain how it 
is in the long-term budgetary and national security interests of our 
nation to abandon an unmanned system that by all accounts is performing 
exceptionally well in theater for a five-decade-old manned system.
    General Holmes. It is accurate that the RQ-4 can fly longer and 
further than the U-2, and in last year's Nunn-McCurdy certification, 
the RQ-4 was found to be $220M less expensive per year to operate than 
the U-2. However, OSD CAPE based this analysis on a High Altitude orbit 
1,200 miles from the launch base. During the analysis done in the FY13 
Budget Review, the launch base for the RQ-4 and U-2 was assumed to be 
from their normal operating locations. Coupled with the fact that the 
cost per flying hour of the RQ-4 and U-2 is roughly equivalent at $32K 
per hour, per information contained in the Air Force Total Ownership 
Costs Database, the RQ-4 did not offer a cost advantage over the U-2 in 
the FY13 Budget Review. After the Nunn-McCurdy Review, the DOD Joint 
Requirements Oversight Council reviewed recent adjustments in military 
strategy and determined that conventional high-altitude ISR 
requirements could be reduced. The Air Force further determined the U-
2, which remains viable until at least 2040, was sufficient to meet 
those national security requirements for high-altitude ISR with this 
newly reduced force structure. Ultimately, continued investment in the 
RQ-4 Block 30, which still needed approximately $800M in investment to 
achieve sensor parity with the U-2, was not prudent given there is no 
difference in the operating costs between the RQ-4 and U-2 when 
operating from their normal operating locations and the U-2 meets the 
new requirement. This drove the decision to divest the RQ-4 Global Hawk 
Block 30, resulting in a $3.8B savings. Although money was saved with 
the decision to divest Global Hawk Block 30, $1.3B was needed to 
continue to operate and sustain the U-2 through the FYDP. This resulted 
in a net savings to the taxpayer of $2.5B.
    Mr. Bartlett. Can you please provide us details on how the Global 
Hawk has been used to support operations worldwide over the past year? 
Please provide both classified and unclassified details of how Global 
Hawk is being used
    General Holmes. In Libya, Global Hawk provided electro-optical, 
infrared, and synthetic aperture radar and was used in a traditional 
ISR role with dynamic responsiveness due to its enhanced duration/dwell 
time and the ability to fill gaps between other ISR collects. Overall, 
Global Hawk was successful in Operation Odyssey Dawn and in its 
continued support for Operation Unified Protector. Assessment details 
can be made available at a higher classification. In the CENTCOM 
theater, Global Hawk continues to support the combatant command with 
both theater and tactical ISR. To date, RQ-4 has flown over 50,000 
combat hours in support of CENTCOM operations. In a humanitarian/
disaster relief support role, Global Hawk leveraged its range and 
endurance as an ISR first-responder. Following the Haiti earthquake, 
Global Hawk executed a response mission in 12 hours effectively 
providing initial situational awareness information, highlighting 
earthquake damage, status of critical infrastructure and identifying 
food/aid drop zones and indicators of mass population migrations. Eight 
missions were flown, satisfying 2,621 targets. In Japan, Global Hawk 
capitalized on its range and endurance to be overhead in 21 hours. 
Imagery products were provided to the Secretary of State within 40 
minutes of request. In addition to infrastructure damage assessment, 
supply route analysis, and real-time monitoring of evacuation support, 
Global Hawk collection focused on the Fukushima nuclear power plant. 
Because it is a remotely piloted aircraft, Japan allowed PACOM to use 
the Global Hawk within the 20 km nuclear engagement zone. Infrared 
imagery taken directly over the top of the reactors allowed engineers 
to frequently monitor core temperature levels. In 21 missions and 300 
on-station hours, Global Hawk collected more than 3,000 images.
    Mr. Bartlett. The Department based its Global Hawk Block 30 
divestment decision on it being more expensive to operate than the U-2. 
Can you explain how the Department determined these costs?
    General Holmes. The Department of Defense conducted an analysis 
during the FY13 budget review using data from previous Air Force and 
DOD efforts. The Air Force Total Ownership Cost (AFTOC) database 
figures in FY11 show the U-2 at $32K per hour and the RQ-4 also at $32K 
per hour. However, costs for the U-2 included SIGINT sensors, but the 
Air Force did not fly the RQ-4 Block 30 with its SIGINT sensors in 
2011. The Air Force will begin flying Global Hawk with SIGINT sensors 
in April 2012 and expects the RQ-4 flying hour costs to become greater 
than those for the U-2. Given comparable flying hour costs, and given 
the large investment required for the RQ-4, the Air Force chose to 
divest the Block 30 program and save a net of $2.5B.
    Mr. Bartlett. General Schwartz mentioned Operations and Support 
costs are issue for the Global Hawk program. When the decision was made 
to retire the U-2 a few years back, specific costs (base support, 
infrastructure and indirect support) were allocated to Global Hawk. As 
a result, these costs have inflated the Global Hawk cost per flight 
hour while the U-2's cost per flight hour has decreased. Did the USAF 
look at doing an apples-to-apples comparison of costs for both systems? 
If not, why not?
    General Holmes. The Department of Defense conducted an analysis 
during the FY13 budget review using data from previous Air Force and 
DOD efforts. The Air Force Total Ownership Cost (AFTOC) database 
figures in FY11 show the U-2 at $32K per hour and the RQ-4 also at $32K 
per hour. However, costs for the U-2 included SIGINT sensors, but the 
Air Force did not fly the RQ-4 Block 30 with its SIGINT sensors in 
2011. The Air Force will begin flying Global Hawk with SIGINT sensors 
in April 2012 and expects the RQ-4 flying hour costs to become greater 
than those for the U-2. Given comparable flying hour costs, and given 
the large investment required for the RQ-4, the Air Force chose to 
divest the Block 30 program and save a net of $2.5B.
    Mr. Bartlett. Can you describe the Air Force's program and funding 
of unmanned aircraft vehicle sense and avoid programs to further 
operation of unmanned aircraft vehicles in the National Airspace 
System?
    General Holmes. The United States Air Force and Department of 
Defense (DOD) are developing near term Ground Based Sense and Avoid 
(GBSAA) and long term Airborne Sense and Avoid (ABSAA) solutions to 
further remotely piloted aircraft (RPA) access to the National Airspace 
System (NAS). However, the Federal Aviation Administration (FAA) has 
not yet defined performance parameters for critical flight safety 
aspects including FAA Part 91 Code of Federal Regulations requirements 
for ``well clear'' and ``see and avoid''. Currently, Air Force/DOD 
GBSAA and ABSAA solutions are being developed to meet DOD's 
interpretation of flight safety requirements. The Air Force is working 
prototypes of both systems and continuing research in human factors 
systems and terminal area operations.
    Funding Summary: Required/Programmed ($M)
    GBSAA funding data: FY09-FY11: $4.7/$4.7; FY12: $4.175/$4.175; 
FY13: $1.07/$1.07; FY14: $ .1/$ .1
    The first prototype GBSAA system is expected to be operational by 
Fall 2012 and is currently being tested at Gray Butte range (near 
Edwards AFB) and Cannon AFB. Once the proof of concept and prototype 
are validated, the system will be fielded and installed at these RPA 
bases to facilitate access to the NAS: Grand Forks AFB, Ft Drum 
(Syracuse), Beale AFB, Anderson AFB Guam, and Southern California 
Logistics Airport.
    Funding Summary: Required/Programmed ($M)
    ABSAA funding data: FY09-FY11: $28/$28; FY12: $9/$9; FY13: $19/$19; 
FY14: $45/$45
    ABSAA is a multiphase program. Common ABSAA Phase 1(a) provides the 
foundation for autonomous ABSAA capability for Global Hawk, Broad Area 
Maritime Surveillance (BAMS) and other medium altitude RPA. A program 
completion timeline is not yet available.
    Mr. Bartlett. In your statement you describe a decreased fighter 
force structure of 1,900 total fighter aircraft as ``an increased 
risk'' to carry out the National Military Strategy, compared to last 
year's 2,000 fighter aircraft inventory as ``some risk.'' Please 
describe the increased risks in terms of meeting military objectives. 
What actions is the Air Force taking to reduce this risk? What actions 
can the Congress take to reduce this risk?
    General Holmes. The Budget Control act drove the Air Force to 
assume more risk to meet fiscal guidance. The new strategy states the 
force ``will no longer be sized to conduct large-scale, prolonged 
stability operations.'' As a result, reduced demand on the force, 
combined with the assumption of increased risk, requires fewer 
aircraft. Increased risk means objectives may take longer to 
accomplish, and the force may have higher potential losses. The Air 
Force is constantly assessing how to balance risk across all of its 
portfolios so as to best utilize its resources and assets while 
optimizing needed combat capability. As far as actions Congress can 
take, fully funding the President's Budget helps reduce uncertainty and 
therefore risk.
    Mr. Bartlett. Just 7 months ago, Deputy Secretary Carter certified 
in writing to the Congress that the Global Hawk system was ``essential 
to national security,'' there was no other acceptable capability to 
meet the requirement, and the Global Hawk was $220M cheaper per year to 
operate than the U-2. Then the recommendation to terminate Block 30 is 
a complete reversal of the USAF position just 7 months ago. Please 
explain how an asset can be critical to national security and cost less 
than the alternative, but just 7 months later be terminated?
    General Posner. It is accurate that the RQ-4 can fly longer and 
further than the U-2, and in last year's Nunn-McCurdy certification, 
the RQ-4 was found to be $220M less expensive per year to operate than 
the U-2. However, OSD CAPE based this analysis on a High Altitude orbit 
1,200 miles from the launch base. During the analysis done in the FY13 
Budget Review, the launch base for the RQ-4 and U-2 was assumed to be 
from their normal operating locations. Coupled with the fact that the 
cost per flying hour of the RQ-4 and U-2 is roughly equivalent at $32K 
per hour, per information contained in the Air Force Total Ownership 
Costs Database, the RQ-4 did not offer a cost advantage over the U-2 in 
the FY13 Budget Review.
    After the Nunn-McCurdy Review, the DOD Joint Requirements Oversight 
Council reviewed recent adjustments in military strategy and determined 
that conventional high-altitude ISR requirements could be reduced. The 
Air Force further determined the U-2, which remains viable until at 
least 2040, was sufficient to meet those national security requirements 
for high-altitude ISR with this newly reduced force structure.
    Ultimately, continued investment in the RQ-4 Block 30 was not 
prudent given there is no difference in the operating costs between the 
RQ-4 and U-2 when operating from their normal operating locations and 
the U-2 meets the new requirement. This drove the decision to divest 
the RQ-4 Global Hawk Block 30, resulting in a $3.8B savings. Although 
money was saved with the decision to divest Global Hawk Block 30, $1.3B 
was needed to continue to operate and sustain the U-2 through the FYDP. 
This resulted in a net savings to the taxpayer of $2.5B.
    In September 2011 following the Nunn-McCurdy certification, the DOD 
Joint Requirements Oversight Committee modified the high-altitude ISR 
requirement where the U-2 was deemed sufficient to meet that amended 
requirement. Coupled with the austere budget environment, the 
Department decided it could no longer afford additional investment 
required for the RQ-4 Global Hawk Block 30.
      Requirement: The Air Force further determined the U-2 
(which remains viable until at least 2040) was sufficient to meet the 
reduced force structure requirements. Continued increased investment in 
the RQ-4 is required to field a comparable capability to the U-2 and 
was determined to be unaffordable.
      Budget: The Budget Control Act was passed in August 2011. 
Additional investment in the RQ-4 is not warranted given a significant 
reduction in the Department's budget and because the U-2 remains 
operationally viable to satisfy the reduced JROC requirements at 
considerably lower total cost over the FYDP.
    Mr. Bartlett. Global Hawk was the first intelligence asset to the 
Japanese Earthquake/Tsunami Relief effort and first to Libya, and by 
all accounts it performed very well. In both of these cases, the Global 
Hawk was able to fly into areas too risky for manned aircraft (an 
active Surface to Air Missile site in Libya and a nuclear environment 
in Japan). How will the USAF compensate for losing this 
transformational capability?
    General Posner. The Air Force will continue to satisfy the 
operational needs of the Combatant Commands through the Global Force 
Management Process. The Joint Requirements Oversight Council adjustment 
affirms the modified high-altitude ISR requirement is sufficient to 
address any such future contingency.
    Mr. Bartlett. The Department's combatant commanders have an 
insatiable need for ISR. Intelligence data is routinely the number one 
unmet requirement. While budget pressures require tough choices, the 
decision to pull 18 Global Hawk Block 30 aircraft out of the active 
inventory seems short-sighted. I question the proposal to scrap 
aircraft currently providing intelligence support to our warfighters, 
including those purchased as recently as last year. Can you tell me why 
it is necessary to take these assets out of commanders' hands and 
instead send them to the desert to rust?
    General Posner. In September 2011, the DOD Joint Requirements 
Oversight Council reviewed recent adjustments in military strategy and 
determined that conventional high-altitude ISR requirements could be 
reduced. The Air Force further determined the U-2, which remains viable 
until at least 2040, was sufficient to meet those national security 
requirements for high-altitude ISR with this newly reduced force 
structure. Ultimately, continued investment in the RQ-4 Block 30 was 
not prudent given that the U-2 meets the new requirement significant 
reduction in the Department's budget. This drove the decision to divest 
the RQ-4 Global Hawk Block 30, resulting in a $3.8B savings where $1.3B 
was needed to continue to operate and sustain the U-2 through the FYDP. 
This resulted in a net savings to the taxpayer of $2.5B. Finally, some 
of the $4B investment made in Block 30s will continue to benefit the 
Block 20 BACN and Block 40/MP-RTIP programs, as well as NASA Block 10 
aircraft, NATO AGS and Navy BAMS. A modified requirement where the U-2 
is sufficient and a reduced budget where the Department could no longer 
afford to keep investing in RQ-4 Global Hawk Block 30 drove the 
retirement decision. Requirement: In September 2011, the DOD Joint 
Requirements Oversight Council reviewed recent adjustments in military 
strategy and determined that the high-altitude ISR requirement 
structure could be modified. The Air Force further determined the U-2, 
which remains viable until at least 2040, was sufficient to meet these 
reduced requirements. Continued increased investment in RQ-4 was 
required to field a comparable capability to U-2 and was determined to 
be unaffordable. Budget: Continued, increased investment in RQ-4 was 
not warranted given a significant reduction in the Department's budget 
and an alternative system, the U-2, still operationally viable at 
considerably lower total cost over the FYDP.
    Mr. Bartlett. The Congress has provided funds for 21 Global Hawk 
Block 30 aircraft at a cost of approximately $4 billion. Fourteen of 
these aircraft have been built and are flying operational missions. My 
understanding is that this budget proposes to eliminate the funding for 
future Global Hawk Block 30s and to mothball these relatively new 
aircraft in favor of a Cold War-era system. Can you explain why the DOD 
is poised to waste the $4 billion we have already spent on these 
aircraft that are currently providing valuable intelligence to the 
warfighter?
    General Posner. In September 2011, the DOD Joint Requirements 
Oversight Council reviewed recent adjustments in military strategy and 
determined that conventional high-altitude ISR requirements could be 
reduced. The Air Force further determined the U-2, which remains viable 
until at least 2040, was sufficient to meet those national security 
requirements for high-altitude ISR with this newly reduced force 
structure. Ultimately, continued investment in the RQ-4 Block 30 was 
not prudent given the U-2 meets the new requirement. This drove the 
decision to divest the RQ-4 Global Hawk Block 30, resulting in a $3.8B 
savings. Although money was saved with the decision to divest Global 
Hawk Block 30, $1.3B was needed to continue to operate and sustain the 
U-2 through the FYDP. This resulted in a net savings to the taxpayer of 
$2.5B. Furthermore, the decision to sustain the U-2 leverages $1.7B 
that was has been invested to modernize the weapon system. The U-2 
fleet in its current state has been certified to 75,000 flight hours 
(2040 and beyond at current utilization rates). In addition to the new 
engines in 1994-1998, the entire fleet has completed new power 
distribution (wiring), 21st century glass cockpit and modern avionics 
processor upgrades. The U-2s are currently on a 4000-hour programmed 
depot maintenance (PDM) cycle included in the budgeted operating costs. 
Finally, some of the $4B investment made in Block 30s will continue to 
benefit the Block 20 BACN and Block 40/MP-RTIP programs, as well as 
NASA Block 10 aircraft, NATO AGS and Navy BAMS.
    Mr. Bartlett. A recent CSBA report said that eight manned aircraft 
with otherwise identical characteristics to a Global Hawk would be 
necessary to maintain the same orbit as three unmanned Global Hawks. If 
this is the case, how can it be that you determined the manned aircraft 
to be the most cost-efficient solution? How does the Global Hawk Block 
30 compare to the U-2 on a cost-per-ISR-hour basis?
    General Posner. The operating characteristics of the U-2 are vastly 
different than those of the Global Hawk including operating altitudes, 
sensor capabilities, stand-off ranges and mission effectiveness. A 
nominal RQ-4 Combat Air Patrol (CAP) is four aircraft, and a nominal U-
2 CAP is five aircraft. The Global Hawk Block 30 has not matured to the 
point where a true comparison of operational costs is possible. 
Nevertheless, the Department conducted an analysis during the FY13 
budget review using data from previous Air Force and Department 
efforts. The Air Force Total Ownership Cost (AFTOC) database figures in 
FY11 show both the U-2 and RQ-4 at $32K per hour. The Air Force did not 
begin flying the RQ-4 Block 30 until March 2011, so there is only six 
months of representative flying hour information in the database. Also, 
the Air Force did not fly the RQ-4 Block 30 with the SIGINT sensor in 
2011. The Air Force will begin flying with this payload in April 2012 
and expects the RQ-4 flying hour costs to be greater than those for the 
U-2. Given comparable flying hour costs, and given the large investment 
required for the RQ-4, the Air Force chose to divest the Block 30 
program and save a net of $2.5B.
    Mr. Bartlett. How have the Department's decisions to reduce Block 
30 quantities while at the same time increasing requirements 
(increasing the number of simultaneous sensors required) contributed to 
the increased system cost of Global Hawk?
    General Posner. The Air Force decision to terminate the Block 30 
program was based upon a reduced requirement rather than an increased 
requirement. The requirement for the Global Hawk Block 30 aircraft is 
to execute electro-optical/infrared (EO/IR), synthetic aperture radar 
(SAR), limited moving target indicator (MTI) and signals intelligence 
(SIGINT) missions simultaneously. No change to the Block 30 requirement 
factored into the decision to terminate the program. In September 2011, 
the DOD Joint Requirements Oversight Council reviewed recent 
adjustments in military strategy and determined that conventional high-
altitude intelligence, surveillance, and reconnaissance force structure 
could be reduced. The Air Force further determined the U-2, which 
remains viable until at least 2040, was sufficient to meet these 
reduced force structure requirements. Continued increased investment in 
RQ-4 would have been required to field a comparable capability to U-2 
and therefore, the RQ-4 was determined to be unaffordable. Continued, 
increased investment in RQ-4 was not warranted given a significant 
reduction in the Department's budget and an alternative system, the U-2 
is still operationally viable at considerably lower total cost over the 
FYDP.
    Mr. Bartlett. When my staff looks at the Air Force Total Ownership 
Cost data for U-2 and Global Hawk, we see that in 2011 the cost per 
operational hour (that is, the cost per hour executing missions) for 
Global Hawk is lower than U-2. This seems to be a much more relevant 
number than cost per flying hour. How does this square with your claim 
that Global Hawk operating costs are higher?
    General Posner. The total cost of keeping the Global Hawk Block 30 
and continuing the investment to improve the RQ-4 to reach a comparable 
capability with U-2 was more expensive than keeping the U-2. As a 
result, the Department chose to save $2.5B across the FYDP in a reduced 
budget environment since the U-2 is sufficient to meet the requirement 
and remains viable through 2040. The Joint Requirements Oversight 
Council reduced the high-altitude ISR requirement, and the AF budget 
reduced to where the Department could no longer afford to keep 
investing in the RQ-4 Global Hawk Block 30. Requirement: In September 
2011, the DOD Joint Requirements Oversight Council reviewed recent 
adjustments in military strategy and determined that conventional high-
altitude ISR requirements could be modified. The Air Force further 
determined the U-2, which remains viable until at least 2040, was 
sufficient to meet these modified requirements. Continued increased 
investment in RQ-4 was required to field a comparable capability to U-2 
and was determined to be unaffordable. Budget: Continued, increased 
investment in RQ-4 was not warranted given a significant reduction in 
the Department's budget and an alternative system, the U-2, is still 
operationally viable at a considerably lower cost over the FYDP. 
Additionally, the actual cost per flying hour (CPFH) data, when the U-2 
is employed at its normal operational distance, shows the U-2 cost is 
comparable to the RQ-4 cost. The latest actual CPFH data shows that 
both platforms are operating at $32K per hour.
    Mr. Bartlett. What is the cost comparison for operating U-2 
compared to Global Hawk? What is the difference in the cost per mission 
for each? How much of the U-2 fleet is available to perform all ISR 
missions?
    General Posner. The cost per flight hour is roughly the same. The 
U-2 costs $320K per 10-hour Multi-INT mission and the RQ-4 $640K per 
20-hour Single-INT mission. There are 27 U-2 ``single seaters'' of 
which one is always rotating through depot level maintenance, and two 
utilized as test birds (capable of flying missions, but not typically 
utilized for that purpose). Thus, there are 24 mission-capable U-2 
aircraft at any given time.
    Mr. Bartlett. If the U-2 is extended until 2025, and the system 
that was slated to replace it is cancelled, what is your plan for 
replacing the U-2? How much will it cost to modernize and maintain the 
Cold War-era U-2 for another 15 years?
    General Posner. There is no projected U-2 retirement date. The U-2 
aircraft remains viable until 2040 and meets all sensor requirements 
currently tasked by the Combatant Commands. The Air Force will invest 
approximately $68 million per year in sustainment and enhancement 
modifications to ensure platform modernization and maintenance.
    Mr. Bartlett. I understand the Department's Cost Assessment and 
Program Evaluation (CAPE) performed a detailed cost analysis associated 
with the decision to terminate and mothball the Global Hawk Block 30 
program. Please share this analysis with the Congress so it can better 
understand the analytical foundation of this decision. Provide a 
detailed cost assessment including the basis of costs for both 
sustainment and procurement through 2025.
    General Posner. In support of the FY13 President's Budget Request 
(PBR), the USAF analyzed the operational output of both the RQ-4 and 
the U-2 using existing CONOPS for both aircraft and determined that U-2 
capability was sufficient for operational needs. When analyzed in this 
context, the U-2 and RQ-4 operating costs were nearly equal. Given 
comparable flying hour costs, and given the large investment required 
for the RQ-4, the Air Force chose to divest the Block 30 program and 
save a net of $2.5B. The CAPE conducted their own independent cost 
analysis based on three scenarios to come to the conclusion that the U-
2 was the more affordable option to meet the newly reduced requirement. 
The Air Force will defer to CAPE to provide Congress the details of 
their independent cost analysis.
    Mr. Bartlett. Given our alarming and unsustainable national debt, 
American taxpayers expect and deserve that Congress will make the 
difficult decisions to restore fiscal responsibility. However, these 
decisions cannot be short-sighted or made at the expense of our long-
term budget or national security needs. Please detail how terminating a 
new cutting-edge platform, Global Hawk Block 30, is less expensive than 
extending the life of an aging platform, U-2, which will require 
increased investments in coming years is a fiscally responsible 
decision over the next decade.
    General Posner. In September 2011, the DOD Joint Requirements 
Oversight Council reviewed recent adjustments in military strategy and 
determined that conventional high-altitude ISR requirements could be 
reduced. The Air Force further determined the U-2, which remains viable 
until at least 2040, was sufficient to meet those national security 
requirements for high-altitude ISR with this newly reduced force 
structure. Ultimately, continued investment in the RQ-4 Block 30 was 
not prudent given the U-2 meets the new requirement and the significant 
reduction in the Department's budget. This drove the decision to divest 
the RQ-4 Global Hawk Block 30, resulting in a $3.8B savings. Although 
money was saved with the decision to divest Global Hawk Block 30, $1.3B 
was needed to continue to operate and sustain the U-2 through the FYDP. 
This resulted in a net savings to the taxpayer of $2.5B. Finally, some 
of the $4B investment made in Block 30s will continue to benefit the 
Block 20 BACN and Block 40/MP-RTIP programs, as well as NASA Block 10 
aircraft, NATO AGS and Navy BAMS. The total cost of keeping the Global 
Hawk Block 30 and continuing the investment to improve the RQ-4 to 
reach a comparable capability with U-2 was more expensive than keeping 
the U-2. As a result, the Department chose to save $2.5B across the 
FYDP in a reduced budget environment since the U-2 is sufficient to 
meet the requirement and remains viable through 2040. The Joint 
Requirements Oversight Council reduced the high-altitude ISR 
requirement, and the AF budget reduced to where the Department could no 
longer afford to keep investing in the RQ-4 Global Hawk Block 30. 
Requirement: In September 2011, the DOD Joint Requirements Oversight 
Council reviewed recent adjustments in military strategy and determined 
that conventional high-altitude ISR requirements could be modified. The 
Air Force further determined the U-2, which remains viable until at 
least 2040, was sufficient to meet these modified requirements. 
Continued increased investment in RQ-4 was required to field a 
comparable capability to U-2 and was determined to be unaffordable. 
Budget: Continued, increased investment in RQ-4 was not warranted given 
a significant reduction in the Department's budget and an alternative 
system, the U-2, is still operationally viable at a considerably lower 
cost over the FYDP. Additionally, the actual cost per flying hour 
(CPFH) data, when the U-2 is employed at its normal operational 
distance, shows the U-2 cost is comparable to the RQ-4 cost. The latest 
actual CPFH data shows that both platforms are operating at $32K per 
hour.
    Mr. Bartlett. Our budget crisis demands that we maximize the 
efficiency for every program. At a macro level it is clear that an 
unmanned system can fly longer and further than a manned system. A 
recent CSBA analysis showed in great detail how unmanned systems 
feature one-third the life cycle cost of manned systems. Explain how it 
is in the long-term budgetary and national security interests of our 
nation to abandon an unmanned system that by all accounts is performing 
exceptionally well in theater for a five-decade-old manned system.
    General Posner. It is accurate that the RQ-4 can fly longer and 
further than the U-2, and in last year's Nunn-McCurdy certification, 
the RQ-4 was found to be $220M less expensive per year to operate than 
the U-2. However, OSD CAPE based this analysis on a High Altitude orbit 
1,200 miles from the launch base. During the analysis done in the FY13 
Budget Review, the launch base for the RQ-4 and U-2 was assumed to be 
from their normal operating locations. Coupled with the fact that the 
cost per flying hour of the RQ-4 and U-2 is roughly equivalent at $32K 
per hour, per information contained in the Air Force Total Ownership 
Costs Database, the RQ-4 did not offer a cost advantage over the U-2 in 
the FY13 Budget Review. After the Nunn-McCurdy Review, the DOD Joint 
Requirements Oversight Council reviewed recent adjustments in military 
strategy and determined that conventional high-altitude ISR 
requirements could be reduced. The Air Force further determined the U-
2, which remains viable until at least 2040, was sufficient to meet 
those national security requirements for high-altitude ISR with this 
newly reduced force structure. Ultimately, continued investment in the 
RQ-4 Block 30, which still needed approximately $800M in investment to 
achieve sensor parity with the U-2, was not prudent given there is no 
difference in the operating costs between the RQ-4 and U-2 when 
operating from their normal operating locations and the U-2 meets the 
new requirement. This drove the decision to divest the RQ-4 Global Hawk 
Block 30, resulting in a $3.8B savings. Although money was saved with 
the decision to divest Global Hawk Block 30, $1.3B was needed to 
continue to operate and sustain the U-2 through the FYDP. This resulted 
in a net savings to the taxpayer of $2.5B.
    Mr. Bartlett. Can you please provide us details on how the Global 
Hawk has been used to support operations worldwide over the past year? 
Please provide both classified and unclassified details of how Global 
Hawk is being used
    General Posner. In Libya, Global Hawk provided electro-optical, 
infrared, and synthetic aperture radar and was used in a traditional 
ISR role with dynamic responsiveness due to its enhanced duration/dwell 
time and the ability to fill gaps between other ISR collects. Overall, 
Global Hawk was successful in Operation Odyssey Dawn and in its 
continued support for Operation Unified Protector. Assessment details 
can be made available at a higher classification. In the CENTCOM 
theater, Global Hawk continues to support the combatant command with 
both theater and tactical ISR. To date, RQ-4 has flown over 50,000 
combat hours in support of CENTCOM operations. In a humanitarian/
disaster relief support role, Global Hawk leveraged its range and 
endurance as an ISR first-responder. Following the Haiti earthquake, 
Global Hawk executed a response mission in 12 hours effectively 
providing initial situational awareness information, highlighting 
earthquake damage, status of critical infrastructure and identifying 
food/aid drop zones and indicators of mass population migrations. Eight 
missions were flown, satisfying 2,621 targets. In Japan, Global Hawk 
capitalized on its range and endurance to be overhead in 21 hours. 
Imagery products were provided to the Secretary of State within 40 
minutes of request. In addition to infrastructure damage assessment, 
supply route analysis, and real-time monitoring of evacuation support, 
Global Hawk collection focused on the Fukushima nuclear power plant. 
Because it is a remotely piloted aircraft, Japan allowed PACOM to use 
the Global Hawk within the 20 km nuclear engagement zone. Infrared 
imagery taken directly over the top of the reactors allowed engineers 
to frequently monitor core temperature levels. In 21 missions and 300 
on-station hours, Global Hawk collected more than 3,000 images.
    Mr. Bartlett. Regarding medium altitude manned and unmanned 
intelligence, surveillance and reconnaissance programs, has your office 
completed a comparative analysis of life cycle cost and operational 
effectiveness of manned and unmanned systems such as the MC-12 aircraft 
and the Predator and Reaper UAVs?
    General Posner. Such a study has not been completed. The Air Force 
inventory of ISR assets is envisioned to be complementary. Although 
there is some degree of overlapping capability among these assets each 
one brings unique capabilities to the force mix. The ISR force includes 
the space based assets as well as the manned and unmanned airborne 
platforms. We are continually evaluating costs and capabilities in a 
constrained fiscal environment but there is not an effort to evaluate 
manned vs. unmanned platforms because each of these classes of assets 
brings complementary capabilities to the force mix.
    Mr. Bartlett. The cost savings estimates for termination of Global 
Hawk Block 30 did not fully consider additional costs to the Navy's 
Broad Area Maritime Surveillance program, which was going to benefit 
from a shared production line, training and common basing.
    Further, in citing cost savings of $2.5 billion in termination of 
the Global Hawk Block 30 program, the Air Force doesn't provide comment 
on the loss of operational capability.
    Global Hawk Block 30s are currently flying operational missions in 
Central, European, and Pacific Commands. These aircraft will be 
returned to the U.S. by the end of this year and stored. The Global 
Hawk has significant range and endurance advantages over the U-2. The 
Global Hawk has near real-time sensor relay on all its aircraft, versus 
a limited number of U-2 aircraft capable of beyond line-of-sight 
intelligence data relay. What operational costs and risks are assumed 
with the termination of the Global Hawk Block 30?
    General Posner. The Air Force has provided resources to cover the 
cost of the line closure. The actual cost increases are variable and 
dependent on the length of time the line is closed. The Department of 
Defense continues to work with the Air Force, the Navy, and the prime 
contractor to capture the impact of termination. In September 2011, the 
DOD Joint Requirements Oversight Council reviewed recent adjustments in 
military strategy and determined that the high-altitude ISR requirement 
could be reduced. The Air Force further determined the U-2, which 
remains viable until at least 2040, was sufficient to meet these 
modified requirements. As a result, there will be no impact to 
warfighting capabilities and peacetime support will be managed by the 
current Global Force Management Process.
    Mr. Bartlett. The Air Force reduces its procurement in the budget 
request from 48 to 24 Reaper UAVs, from that projected last year. Why 
is this being done?
    General Posner. There are multiple planning factors that changed 
for the MQ-9 program between the FY12 PB and the FY 13 PB. First, the 
current attrition rates of both the MQ-1 and MQ-9 are lower than the 
Air Force originally estimated in FY12 PB. The original estimate was 
based on MQ-1 data. We have since accumulated significant flight hours 
on the MQ-9 system with significantly lower than forecast losses. The 
Air Force modeling experts have since applied actual MQ-9 data and 
updated the estimate. Specifically, the Air Force projected it would 
lose 77 MQ-9s across the FYDP but now projects it will only lose 11. 
Additionally, the MQ-1 fleet is now planned to be operational until at 
least FY23 instead of retiring in FY17. These factors, coupled with the 
FY12 MQ-9 buy which delivers 48 aircraft in FY14, enable the Air Force 
to achieve 65 combined MQ-1/9 Combat Air Patrol (CAPs) by 3QFY14 and 
sustain them with the production profile contained in the FY13 PB. The 
FY13 PB production profile eases the strain on the aircrew training 
pipeline and enables orderly and efficient aircrew force structure 
management as the Air Force transitions to an all-MQ-9 medium altitude 
RPA fleet. The lower attrition rate allows for a lower production rate 
of 24 aircraft per year while still reaching the 65 CAP capabilities on 
time, in FY14. Ultimately, the FY13 PB is the best way to meet Air 
Force requirements in this budget-constrained environment.
    Mr. Bartlett. In late February, the Air Force informed the 
committee that it planned to cancel the Light Air Support (LAS) 
contract effective March 2, 2012. What is the new way forward to meet 
the requirement of 20 LAS aircraft for the Afghanistan Air Force?
    General Posner. The Air Force decided to issue an amendment to the 
Light Air Support (LAS) Request for Proposal (RFP) to both offerors. 
Air Force officials have met with both original offerors, Sierra Nevada 
Corporation (SNC) and Hawker Beechcraft Defense Corporation (HBDC), 
individually to review the amended RFP changes line-by-line. Both will 
have time to submit comments on the draft RFP amendment, after which 
the Air Force expects to release the final amended RFP on approximately 
April 30. While the decision process will be event-driven, the Air 
Force targets a source selection decision in early calendar year 2013. 
This would allow first aircraft delivery to Afghanistan in third 
quarter 2014.
                                 ______
                                 
                    QUESTIONS SUBMITTED BY MR. JONES
    Mr. Jones. When will the aircraft be able to send video to a ground 
station (e.g. JTAC with a video receiver)?
    Mr. Kendall. The F-35 Program of Record (POR) does not contain any 
capability to send video to a ground station. Video Down-Link, similar 
to the capability recently added to legacy platforms, is a candidate 
for Block 4 Follow-On Development. Within the F-35 POR, there is the 
capability to send an image over the three datalinks (Link 16, Variable 
Message Format and Multifunction Advanced DataLink). A ground station 
properly equipped to receive information over these datalinks could 
receive a still image from the F-35 in this manner.
    Mr. Jones. When will the aircraft be able to Mark a target or Match 
Sparkle with Infra-Red energy?
    Mr. Kendall. Infrared pointer (``sparkle'') capability is not an F-
35 Program of Record capability. This capability is being considered as 
a Block 4 Follow-on Development candidate.
    Mr. Jones. What is the field of view of the internal pod?
    Why was the gun not put internally? With the gun attached, what 
affect does that have on carrying weapons?
    What will it cost per hour to fly?
    Besides cost, is there any limitations to the number of hours the 
aircraft can fly annually?
    Mr. Kendall. The internal targeting pod, known as the Electro-
Optical Targeting System, has a field of view (FOV) of 3.54 degrees in 
Wide FOV and 1.49 degrees in Narrow FOV. It can provide an additional 
4x virtual zoom through digital processing. The FOV can be slewed 
circularly around the aircraft's horizon and from 10 degrees above the 
relative horizon to 90 degrees below the horizon, providing visibility 
throughout the lower hemisphere subject to airframe and external stores 
masking. The program of record for the F-35 includes an AN/A49 E-21 
external missionized gun pod to be mounted on station 6 (centerline 
station) of the STOVL and CV variants. The external gun pod is a fixed, 
forward-firing system. The gun is not stored internally on the STOVL 
and CV variants (there is an internal gun on the CTOL variant) due to 
Service-specific mission requirements for increased fuel capacity and 
mission range. The missionized gun pod attaches to the centerline 
carriage location (station 6) which is currently only designed to carry 
the gun pod and therefore has no impact on the specified F-35B or F-35C 
weapons carriage capability.
    Based on the December 2011 F-35 Selected Acquisition Report (SAR), 
the cost per flight hour is $31,923 (BY 2012). This cost is based on 
total system costs, such as mission personnel, contractor support, 
depot overhaul, training, etc. that cannot be allocated to specific 
subsystems. Consequently, the cost per flight hour of the gun cannot be 
specifically identified.
    The cost per flight hour estimate for the Joint Strike Fighter is 
built upon a variety of mission profiles and weapons load 
configurations. Additional limitations to annual aircraft flight hours 
(other than cost) are the ability to generate sorties based on 
personnel, equipment, and aircraft availability.
    The program is in the midst of a 2-year ``should cost'' effort on 
the O&S cost. This effort will continue through 2012. Over the next 12 
months, the program will complete an F-35 Business Case Analysis (BCA) 
and the results from the BCA will assist the Program Executive Officer 
in refining the current F-35 support strategy. The BCA will also 
identify the best mix of existing Service/Partner Organic capabilities 
with that of the Industry team to develop the optimum long term best 
value F-35 support solution. The Services, working in concert with the 
program office, will continue to analyze options outside of the program 
office's purview to reduce operating costs, such as reviewing basing 
options and the sequencing of those actions, unit level manpower/
squadron size and discrete sustainment requirements. In addition, the 
program has identified a number of Affordability Initiatives to help 
drive down sustainment costs.
    Mr. Jones. When will the aircraft be able to send video to a ground 
station (e.g. JTAC with a video receiver)?
    Mr. Van Buren. Full Motion Video is a candidate for inclusion in 
Block 4 follow-on development, approximately 2020.
    Mr. Jones. When will the aircraft be able to Mark a target or Match 
Sparkle with Infra-Red energy?
    Mr. Van Buren. An IR Marker is a candidate for inclusion in Block 4 
follow-on development, approximately 2020.
    Mr. Jones. What is the field of view of the internal pod?
    Why was the gun not put internally? With the gun attached, what 
affect does that have on carrying weapons?
    What will it cost per hour to fly?
    Besides cost, is there any limitations to the number of hours the 
aircraft can fly annually?
    Mr. Van Buren. The field of view of the Electro Optical Targeting 
System (EOTS) in elevation is +5 degrees looking forward to -145 degree 
looking aft. The azimuth field of view is 60 degrees in either 
direction, for a total of 120 degrees. The gun was not put internally 
because the USN/USMC felt it was more important to have 1,100 lbs more 
bring-back potential for boat operations that to have an internal gun. 
There are no current limitations on the program of record SDD weapons 
when carrying a gun pod.
    Mr. Jones. When will the aircraft be able to send video to a ground 
station (e.g. JTAC with a video receiver)?
    Admiral Venlet. The F-35 Program of Record (POR) does not contain 
any capability to send video to a ground station. Video Down-Link, 
similar to the capability recently added to legacy platforms, is a 
candidate for Block 4 Follow-On Development. Within the F-35 POR, there 
is the capability to send an image over the three datalinks (Link 16, 
Variable Message Format and Multifunction Advanced DataLink). A ground 
station properly equipped to receive information over these datalinks 
could receive a still image from the F-35 in this manner.
    Mr. Jones. When will the aircraft be able to Mark a target or Match 
Sparkle with Infra-Red energy?
    Admiral Venlet. Infrared pointer (``sparkle'') capability is not an 
F-35 Program of Record capability. This capability is being considered 
as a Block 4 Follow-on Development candidate.
    Mr. Jones. What is the field of view of the internal pod?
    Why was the gun not put internally? With the gun attached, what 
affect does that have on carrying weapons?
    What will it cost per hour to fly?
    Besides cost, is there any limitations to the number of hours the 
aircraft can fly annually?
    Admiral Venlet. The internal targeting pod, known as the Electro-
Optical Targeting System, has a field of view (FOV) of 3.54 degrees in 
Wide FOV and 1.49 degrees in Narrow FOV. It can provide an additional 
4x virtual zoom through digital processing. The FOV can be slewed 
circularly around the aircraft's horizon and from 10 degrees above the 
relative horizon to 90 degrees below the horizon, providing visibility 
throughout the lower hemisphere subject to airframe and external stores 
masking. The program of record for the F-35 includes an AN/A49 E-21 
external missionized gun pod to be mounted on station 6 (centerline 
station) of the STOVL and CV variants. The external gun pod is a fixed, 
forward-firing system. The gun is not stored internally on the STOVL 
and CV variants (there is an internal gun on the CTOL variant) due to 
Service-specific mission requirements for increased fuel capacity and 
mission range. The missionized gun pod attaches to the centerline 
carriage location (station 6) which is currently only designed to carry 
the gun pod and therefore has no impact on the specified F-35B or F-35C 
weapons carriage capability.
    Based on the December 2011 F-35 Selected Acquisition Report (SAR), 
the cost per flight hour is $31,923 (BY 2012). This cost is based on 
total system costs, such as mission personnel, contractor support, 
depot overhaul, training, etc. that cannot be allocated to specific 
subsystems. Consequently, the cost per flight hour of the gun cannot be 
specifically identified.
    The cost per flight hour estimate for the Joint Strike Fighter is 
built upon a variety of mission profiles and weapons load 
configurations. Additional limitations to annual aircraft flight hours 
(other than cost) are the ability to generate sorties based on 
personnel, equipment, and aircraft availability.
    The program is in the midst of a 2-year ``should cost'' effort on 
the O&S cost. This effort will continue through 2012. Over the next 12 
months, the program will complete an F-35 Business Case Analysis (BCA) 
and the results from the BCA will assist the Program Executive Officer 
in refining the current F-35 support strategy. The BCA will also 
identify the best mix of existing Service/Partner Organic capabilities 
with that of the Industry team to develop the optimum long term best 
value F-35 support solution. The Services, working in concert with the 
program office, will continue to analyze options outside of the program 
office's purview to reduce operating costs, such as reviewing basing 
options and the sequencing of those actions, unit level manpower/
squadron size and discrete sustainment requirements. In addition, the 
program has identified a number of Affordability Initiatives to help 
drive down sustainment costs.
    Mr. Jones. When will the aircraft be able to send video to a ground 
station (e.g. JTAC with a video receiver)?
    Mr. Sullivan. We have not conducted the work necessary to answer 
this question.
    Mr. Jones.When will the aircraft be able to Mark a target or Match 
Sparkle with Infra-Red energy?
    Mr. Sullivan. We have not conducted the work necessary to answer 
this question.
    Mr. Jones. What is the field of view of the internal pod?
    Why was the gun not put internally? With the gun attached, what 
affect does that have on carrying weapons?
    What will it cost per hour to fly?
    Besides cost, is there any limitations to the number of hours the 
aircraft can fly annually?
    Mr. Sullivan. We have not conducted the work necessary to answer 
this question.
    Mr. Jones. When will the aircraft be able to send video to a ground 
station (e.g. JTAC with a video receiver)?
    Admiral Skinner. The F-35 Program of Record (POR) does not contain 
any capability to send video to a ground station. Video down-link 
(VDL), similar to the capability recently added to legacy platforms, is 
a candidate for Block 4 Follow-On Development. Within the F-35 POR, 
there is the capability to send an image over the three datalinks (Link 
16, Variable Message Format (VMF) and Multifunction Advanced DataLink 
(MADL)). A ground station properly equipped to receive information over 
these datalinks could receive a still image from the F-35 in this 
manner.
    Mr. Jones. When will the aircraft be able to Mark a target or Match 
Sparkle with Infra-Red energy?
    Admiral Skinner. Infrared pointer (``sparkle'') capability is not 
an F-35 Program of Record capability. This capability is being 
considered as a Block 4 Follow-on Development candidate.
    Mr. Jones. What is the field of view of the internal pod?
    Why was the gun not put internally? With the gun attached, what 
affect does that have on carrying weapons?
    What will it cost per hour to fly?
    Besides cost, is there any limitations to the number of hours the 
aircraft can fly annually?
    Admiral Skinner. The internal targeting pod, known as the Electro-
Optical Targeting System (EOTS), has a field of view (FOV) of 3.54 
degrees in Wide FOV and 1.49 degrees in Narrow FOV. It can provide an 
additional 4x virtual zoom through digital processing. The FOV can be 
slewed circularly around the aircraft's horizon and from 10 degrees 
above the relative horizon to 90 degrees below the horizon, providing 
visibility throughout the lower hemisphere subject to airframe and 
external stores masking. The program of record for the F-35 includes an 
AN/A49 E-21 external missionized gun pod to be mounted on station 6 
(centerline station) of the STOVL and CV variants. The external gun pod 
is a fixed, forward-firing system. The gun is not stored internally on 
the STOVL and CV variants (there is an internal gun on the CTOL 
variant) due to service specific mission requirements for increased 
fuel capacity and mission range. The missionized gun pod attaches to 
the centerline carriage location (station 6) which is currently only 
designed to carry the gun pod and, therefore, has no impact on the 
specified F-35B or F-35C weapons carriage capability. Based on the 
December 2011 F-35 Selected Acquisition Report (SAR), the cost per 
flight hour is $31,923 (BY2012). This cost is based on total system 
costs, such as mission personnel, contractor support, depot overhaul, 
training, etc. that cannot be allocated to specific subsystems. 
Consequently, the cost per flight hour of the gun cannot be 
specifically identified. The flight hour profile that the JSF costs are 
built upon is representative of a variety of mission profiles and 
weapons load configurations. Additional limitations to annual aircraft 
flight hours (other than cost) are the ability to generate sorties 
based on personnel, equipment, and aircraft availability. The program 
is in the midst of a two-year ``should cost'' effort on the O&S cost. 
This effort will continue through 2012. Over the next 12 months, the 
program will complete an F-35 Business Case Analysis (BCA) and the 
results from the BCA will assist the Program Executive Officer in 
refining the current F-35 support strategy. The BCA will also identify 
the best mix of existing Service/Partner Organic capabilities with that 
of the Industry team to develop the optimum long term best value F-35 
support solution. The Services, working in concert with the program 
office, will continue to analyze options outside of the program 
office's purview to reduce operating costs; such as reviewing basing 
options and the sequencing of those actions, unit level manpower/
squadron size and discrete sustainment requirements. In addition, the 
program has identified a number of Affordability Initiatives to help 
drive down sustainment costs.
    Mr. Jones. When will the aircraft be able to send video to a ground 
station (e.g. JTAC with a video receiver)?
    General Robling. Full Motion Video is a candidate for inclusion in 
block 4 follow on development, approximately 2020.
    Mr. Jones. When will the aircraft be able to Mark a target or Match 
Sparkle with Infra-Red energy?
    General Robling. An IR Marker is a candidate for inclusion in block 
4 follow on development, approximately 2020.
    Mr. Jones. What is the field of view of the internal pod?
    Why was the gun not put internally? With the gun attached, what 
affect does that have on carrying weapons?
    What will it cost per hour to fly?
    Besides cost, is there any limitations to the number of hours the 
aircraft can fly annually?
    General Robling. The field of view of the Electro Optical Targeting 
System (EOTS) in elevation is +5 degrees looking forward to -145 
degrees looking aft. The azimuth field of view is 60 degrees in either 
direction, for a total of 120 degrees. The gun was not put internally 
because the USN/USMC felt it was more important to have 1,100 lbs more 
bring-back potential for boat operations than to have an internal gun. 
There are no current limitations on the program of record SDD weapons 
when carrying a gun pod.
    Mr. Jones. When will the aircraft be able to send video to a ground 
station (e.g. JTAC with a video receiver)?
    Admiral Floyd. The F-35 Program of Record (POR) does not contain 
any capability to send video to a ground station. Video down-link 
(VDL), similar to the capability recently added to legacy platforms, is 
a candidate for Block 4 Follow-On Development. Within the F-35 POR, 
there is the capability to send an image over the three datalinks (Link 
16, Variable Message Format (VMF) and Multifunction Advanced DataLink 
(MADL)). A ground station properly equipped to receive information over 
these datalinks could receive a still image from the F-35 in this 
manner.
    Mr. Jones. When will the aircraft be able to Mark a target or Match 
Sparkle with Infra-Red energy?
    Admiral Floyd. Infrared pointer (``sparkle'') capability is not an 
F-35 Program of Record capability. This capability is being considered 
as a Block 4 Follow-on Development candidate.
    Mr. Jones. What is the field of view of the internal pod?
    Why was the gun not put internally? With the gun attached, what 
affect does that have on carrying weapons?
    What will it cost per hour to fly?
    Besides cost, is there any limitations to the number of hours the 
aircraft can fly annually?
    Admiral Floyd. The internal targeting pod, known as the Electro-
Optical Targeting System (EOTS), has a field of view (FOV) of 3.54 
degrees in Wide FOV and 1.49 degrees in Narrow FOV. It can provide an 
additional 4x virtual zoom through digital processing. The FOV can be 
slewed circularly around the aircraft's horizon and from 10 degrees 
above the relative horizon to 90 degrees below the horizon, providing 
visibility throughout the lower hemisphere subject to airframe and 
external stores masking. The program of record for the F-35 includes an 
AN/A49 E-21 external missionized gun pod to be mounted on station 6 
(centerline station) of the STOVL and CV variants. The external gun pod 
is a fixed, forward-firing system. The gun is not stored internally on 
the STOVL and CV variants (there is an internal gun on the CTOL 
variant) due to service specific mission requirements for increased 
fuel capacity and mission range. The missionized gun pod attaches to 
the centerline carriage location (station 6) which is currently only 
designed to carry the gun pod and, therefore, has no impact on the 
specified F-35B or F-35C weapons carriage capability. Based on the 
December 2011 F-35 Selected Acquisition Report (SAR), the cost per 
flight hour is $31,923 (BY2012). This cost is based on total system 
costs, such as mission personnel, contractor support, depot overhaul, 
training, etc. that cannot be allocated to specific subsystems. 
Consequently, the cost per flight hour of the gun cannot be 
specifically identified. The flight hour profile that the JSF costs are 
built upon is representative of a variety of mission profiles and 
weapons load configurations. Additional limitations to annual aircraft 
flight hours (other than cost) are the ability to generate sorties 
based on personnel, equipment, and aircraft availability. The program 
is in the midst of a two-year ``should cost'' effort on the O&S cost. 
This effort will continue through 2012. Over the next 12 months, the 
program will complete an F-35 Business Case Analysis (BCA) and the 
results from the BCA will assist the Program Executive Officer in 
refining the current F-35 support strategy. The BCA will also identify 
the best mix of existing Service/Partner Organic capabilities with that 
of the Industry team to develop the optimum long term best value F-35 
support solution. The Services, working in concert with the program 
office, will continue to analyze options outside of the program 
office's purview to reduce operating costs; such as reviewing basing 
options and the sequencing of those actions, unit level manpower/
squadron size and discrete sustainment requirements. In addition, the 
program has identified a number of Affordability Initiatives to help 
drive down sustainment costs.
    Mr. Jones. When will the aircraft be able to send video to a ground 
station (e.g. JTAC with a video receiver)?
    General Holmes. Full Motion Video is a candidate for inclusion in 
Block 4 follow-on development, approximately 2020.
    Mr. Jones. When will the aircraft be able to Mark a target or Match 
Sparkle with Infra-Red energy?
    General Holmes. An IR Marker is a candidate for inclusion in Block 
4 follow-on development, approximately 2020.
    Mr. Jones. What is the field of view of the internal pod?
    Why was the gun not put internally? With the gun attached, what 
affect does that have on carrying weapons?
    What will it cost per hour to fly?
    Besides cost, is there any limitations to the number of hours the 
aircraft can fly annually?
    General Holmes. The field of view of the Electro Optical Targeting 
System (EOTS) in elevation is +5 degrees looking forward to -145 degree 
looking aft. The azimuth field of view is 60 degrees in either 
direction, for a total of 120 degrees. The gun was not put internally 
because the USN/USMC felt it was more important to have 1,100 lbs more 
bring-back potential for boat operations that to have an internal gun. 
There are no current limitations on the program of record SDD weapons 
when carrying a gun pod.
    Mr. Jones. When will the aircraft be able to send video to a ground 
station (e.g. JTAC with a video receiver)?
    General Posner. Full Motion Video is a candidate for inclusion in 
Block 4 follow-on development, approximately 2020.
    Mr. Jones. When will the aircraft be able to Mark a target or Match 
Sparkle with Infra-Red energy?
    General Posner. An IR Marker is a candidate for inclusion in Block 
4 follow-on development, approximately 2020.
    Mr. Jones. What is the field of view of the internal pod?
    Why was the gun not put internally? With the gun attached, what 
affect does that have on carrying weapons?
    What will it cost per hour to fly?
    Besides cost, is there any limitations to the number of hours the 
aircraft can fly annually?
    General Posner. The field of view of the Electro Optical Targeting 
System (EOTS) in elevation is +5 degrees looking forward to -145 degree 
looking aft. The azimuth field of view is 60 degrees in either 
direction, for a total of 120 degrees. The gun was not put internally 
because the USN/USMC felt it was more important to have 1,100 lbs more 
bring-back potential for boat operations that to have an internal gun. 
There are no current limitations on the program of record SDD weapons 
when carrying a gun pod.
                                 ______
                                 
                   QUESTIONS SUBMITTED BY MR. WILSON
    Mr. Wilson. The Air Force has announced its intention to reduce the 
number of bases that will receive the Air Force variant of the F-35 in 
order to reduce sustainment costs. Does the Marine Corps intend to 
reduce the number of air stations that all will receive the F-35B? Has 
the announced list of Marine Corps Air Stations scheduled to receive F-
35Bs changed in anyway?
    General Robling. The Marine Corps completed the Environmental 
Impact Studies EIS for JSF East Coast and West Coast basing in December 
2010. The EIS' optimized the Joint Strike Fighter beddown locations and 
validated the 4 CONUS air stations we currently have are sufficient and 
any decrease in the number of air stations would have a detrimental 
effect on the surrounding populations, operation, and mission 
readiness. In addition to participating in Joint JSF training at Eglin 
AFB, the Marine Corps plans to execute a rolling JSF transition of 4 
air stations starting in 2012 with MCAS Yuma, AZ, followed in sequence 
with MCAS Beaufort, NC, MCAS Miramar, CA, and MCAS Cherry Point, NC. 
The transition is designed to retain operational capability of our 
legacy aircraft, optimize MilCon efficiencies, and distribute the F-35 
aircraft to support the training and deployments of the Marine Air 
Ground Task Force.
                                 ______
                                 
                  QUESTIONS SUBMITTED BY MR. LOBIONDO
    Mr. LoBiondo. In your combined opening statements, you focused on 
the importance of the Legacy Service Life Extension Program (SLEP) and 
the Combat Avionics Programmed Extension Suites (CAPES) program for our 
F-16 Block 40s through 52s fleet. While I agree that these programs are 
key to keeping these aircraft relevant until the F-35 replaces them, my 
concern is on the Block 30 inventory in the Air National Guard, 
particularly those that maintain the Aerospace Control Alert (ACA) 
mission.
    The 177th Fighter Wing in New Jersey is currently the only Air 
National Guard Fighter Wing flying ``Little Inlet'' Block 30s. I am 
sure you both know that I have consistently pushed the Air Force and 
Air National Guard to replace those aging aircraft with some next 
generation fighter.
    With that said, my concern has to do with the issue of ``fleet 
commonality.''
    Since the Air Force has proposed to re-classify or retire one 
entire Block 30 ``Big Inlet'' squadron, are there any plans to shuffle 
the Air National Guard fighter jet inventory with those F-16s to ensure 
``fleet commonality,'' specifically for the 177th so they are no longer 
the ``odd man out''?
    Additionally, can both or one of you commit to providing me and my 
staff with a briefing by the end of April 2012 to alleviate my concern 
that the 177th will not succumb to future combat AOR limitations based 
on their current iron inventory and to address where the 177th fits 
into the roadmap to receive updated or next generation fighters?
    General Holmes and General Posner. The Air Force addresses force 
structure holistically across all of its components and missions which 
include the Air National Guard. The Air Force's oldest F-16s remain 
viable through the end of this decade, and as airframes retire newer 
airframes will flow to support the Total Force. The Air National Guard 
leadership has been and will continue to be active participants to 
determine the best way forward and, as force structure and strategic 
basing decisions are made, the Air Force will be happy [to] brief you 
and your staff. Aircraft will be moved as necessary to ensure mission 
requirements are met to support the National Military Strategy.
                                 ______
                                 
                   QUESTIONS SUBMITTED BY MR. TURNER
    Mr. Turner. The Department of Defense (DOD) has been the catalyst 
in the development of the unmanned aircraft system (UAS) market. The 
volume of UAS flights for commercial and governmental non-military 
applications could equal those being flown for military operations. 
Future growth of the civil UAS market is dependent on the ability of 
non-military UAS proponents to operate their UAS' in the National 
Airspace System (NAS). As such, there is a strong innovative growth 
market for testing, research and development. Inability to adhere to 
FAA regulatory requirements is the major problem facing the military 
and the commercial UAS sector. More specifically, Flight Rule 14 
requires sense and avoid. Manned aircraft systems operating with 
specified FAA control areas or with sense and avoid equipment are able 
to adhere to this rule. Since UAS' do not have pilots on board or 
collision and avoidance technologies, they are not currently able to 
adhere to FAA rules. Congress has levied the requirement on the FAA 
Administrator to develop plans to accelerate the integration of 
unmanned aerial systems into the National Airspace System. Currently 
the NDAA budget request contains $34.6 million for sense and avoid 
technology development to further UAS operations in the National 
Airspace System. Dr. Kendall, do you believe that the FAA has 
articulated and documented the sense and avoid technology requirements 
in sufficient detail to allow the DOD to develop a solution that will 
allow UAS operations in these new airspaces? In other words, is the 
$34.6M being spent on sense and avoid technologies going towards 
fulfilling a documented FAA requirement with a defined acceptable 
solution? Given the current FAA safety of flight requirements, sense 
and avoid requirements and our technological capabilities, how long do 
you anticipate it will take before we will be able to integrate UAS 
into the National Airspace System?
    Mr. Kendall. The Department of Defense (DOD) is developing 
standards and safety case analyses to develop and field ground and 
airborne unmanned aircraft system (UAS) sense-and-avoid technology. In 
the short term, the Department is actively engaged with the Federal 
Aviation Administration (FAA) to improve incrementally UAS access to 
the National Airspace System (NAS) through changes to policy and 
procedures. While the FAA has not articulated and documented sense-and-
avoid requirements, the Department, as a public agency, has the 
authority and proven ability to self certify aircraft and systems for 
safe operations. The sense-and-avoid funding in the National Defense 
Authorization Act for Fiscal Year 2012 allows the Department to 
continue its Sense and Avoid (SAA) standards and technology 
development. The Department is sharing the results of its SAA standards 
and technology development with the FAA and other public agencies so 
that they can leverage our work while developing sense-and-avoid 
technology requirements for the civil community.
    The Department has made measured progress in increasing public UAS 
access to the NAS through the UAS Executive Committee and changes to 
the FAA's policies and Certification of Waiver or Authorization 
processes. The Department is also working with the FAA on updating the 
DOD-FAA UAS Memorandum of Agreement for Operations of UAS Systems in 
the NAS to increase access for specific operations, particularly for 
small UAS which make up the predominance of DOD UAS. DOD is also 
currently working with the FAA through the UAS Aviation Rulemaking 
Committee and the Next Generation Air Transportation System Joint 
Planning and Development Office to develop the congressionally directed 
FAA Civil/Public UAS NAS Integration Roadmap and Comprehensive Plan to 
safely integrate civil UAS into the NAS. The roadmap and plan will 
provide a timeline for the phased in approach to UAS integration into 
the NAS.
    Mr. Turner. There is no doubt that 5th generation fighters are 
complex but critical to ensuring air dominance in any theater. In 1992, 
the F-22 program unit cost was estimated to be $125M. There are some 
estimates, including a GAO study to suggest that the F-22 unit costs 
were $177M per aircraft. There are some in the aerospace industry who 
would suggest that one of the reasons the F-22 fly away costs were so 
high were due to the Air Force's ability to capture on economies of 
scale. Initially, the Air Force wanted to procure 750 advanced tactical 
fighters. The total number procured of which the last one being 
delivered this year was 187. In all manufacturing sector, there is an 
economy of scale to be achieved in the area of quantities of 
production. Currently, the F-35 is being built at a rate of 2 aircraft 
per month while the capacity is 18-20 aircraft per month. Based on the 
economies of scale, this would suggest that we are paying a higher 
capital per unit cost per aircraft. While I understand the significant 
budget constraints which have been placed on the services, I also have 
a responsibility to ensure that the American tax payer gets the best 
available weapon system at an affordable cost. We may not be able to 
afford a production schedule of 20 F-35s per month but there should be 
some ``sweet spot'' in defining yearly quantities produced. What 
actions is the Department currently taking to determine this ``sweet 
spot'' and ensuring this does not become another F-22? What production 
rate would you like to see to ensure we reduce the per unit cost of 
this airplane?
    Mr. Kendall. We have reduced Low-Rate Initial Production rates to 
reduce concurrency with development and test until the design maturity 
improves. While ramping to Full-Rate Production quickly would optimize 
the production learning curve, it would likely not lead to the lowest 
unit costs in the long-term due to required changes, modifications, and 
retrofits. The procurement rates for the next few years are a balance 
designed to continue to exercise the global supply chain and 
manufacturing processes while at the same time avoid procuring too many 
aircraft that will have to be retrofitted and modified following 
continued discovery of changes. I believe our current strategy provides 
that appropriate balance. As the program continues with testing, we are 
progressively reducing concurrency risks. Concurrency should begin to 
recede significantly in the 2015 timeframe, and we anticipate entering 
Full-Rate Production in the 2019 timeframe. At that time, we anticipate 
that the annual production rates, which will include U.S and foreign 
buys, to be at economies of scale that result in more affordable unit 
costs.
    Mr. Turner. Numerous GAO reports highlight that the Department of 
Defense continues to face a gap between its need to suppress enemy air 
defense and its capabilities to do so. There are not enough existing 
suppression aircraft to meet overall requirements. While the Navy is 
currently procuring the EA-18G Growler as the electronic attack variant 
of the F/A-18 services, the Growler is the only electronic attack 
aircraft being procured by any service at this time. If the Air Force 
is called to fight a peer competitor in the electronic warfare arena, 
do you believe there are sufficient resources available? What is the 
Air Force's plan to mitigate resource limitations on the electronic 
warfare arena?
    Mr. Kendall. The Department would utilize all the assets of the 
joint force in a conflict with a peer competitor, not just Air Force 
resources. As outlined in the Department's 30-Year Aviation Plan 
released in March 2012, DOD is acquiring 5th generation fighter/attack 
aircraft while maintaining sufficient legacy aircraft inventory 
capacity, in addition to investing in enabler capability and capacity 
such as electronic warfare. While the FY 2013-FY 2042 aviation plan 
meets the national military strategy of the United States, the 
Department continues to assess risk and the optimum investment strategy 
as part of the FY 2014 budgetary and capabilities review process.
    The Department's joint Airborne Electronic Attack (AEA) forces, 
including EA-18G, are a portion of the Joint concept of operations to 
counter enemy air defenses. The Air Force's electronic attack 
contributions to joint AEA forces include EC-130H Compass Call, 
Miniature Air Launched Decoy Jammer, and self-protection capability for 
strike forces. The combination of electronic protection capability for 
airplanes, radars, and weapons systems that use the electromagnetic 
spectrum coupled with stealth capability--like those of the F-22, F-35, 
and the B-2--creates an effective integration of kinetic and non-
kinetic capabilities that will help mitigate the challenges and enhance 
the joint effort in suppressing enemy air defenses.
    Mr. Turner. Numerous GAO reports highlight that the Department of 
Defense continues to face a gap between its need to suppress enemy air 
defense and its capabilities to do so. There are not enough existing 
suppression aircraft to meet overall requirements. While the Navy is 
currently procuring the EA-18G Growler as the electronic attack variant 
of the F/A-18 services, the Growler is the only electronic attack 
aircraft being procured by any service at this time. If the Air Force 
is called to fight a peer competitor in the electronic warfare arena, 
do you believe there are sufficient resources available? What is the 
Air Force's plan to mitigate resource limitations on the electronic 
warfare arena?
    Mr. Van Buren. The Department would utilize all the assets of the 
joint force in a conflict with a peer competitor, not just Air Force 
resources. As outlined in the Department's 30 Year Aviation Plan 
released in March 2012, DOD is acquiring fifth-generation fighter/
attack aircraft while maintaining sufficient legacy aircraft inventory 
capacity in addition to investing in enabler capability and capacity 
such as electronic warfare. While the fiscal year 2013-2042 aviation 
plan meets the national military strategy of the United States, the 
Department continues to assess risk and the optimum investment strategy 
as part of the fiscal year 2014 budgetary and capabilities review 
process. The Department's joint Airborne Electronic Attack (AEA) 
forces, including EA-18G, are a portion of the Joint concept of 
operations to counter enemy air defenses. The Air Force's electronic 
attack contributions to joint AEA forces include EC-130H Compass Call, 
Miniature Air Launched Decoy Jammer and self-protection capability for 
strike forces. The combination of electronic protection capability for 
airplanes, radars and weapons systems that use the electromagnetic 
spectrum coupled with stealth capability--like those of the F-22, F-35 
and the B-2--creates an effective integration of kinetic and non-
kinetic capabilities that will help mitigate the challenges and enhance 
the joint effort in suppressing enemy air defenses.
    Mr. Turner. It would appear as though the Air Force has a history 
of maintaining the integrity of source selection and have had a number 
of problems in this area. The selection of Boeing to build the next 
generation of Air Refueling tankers marked the end of a procurement 
process that dragged on for nearly a decade. More recently, the Air 
Force informed the committee that it planned to cancel the Light Air 
Support (LAS) contract. The Secretary of the Air Force said that the 
Service Acquisition Executive was not satisfied with the quality of the 
documentation supporting the award decision. This was after the Air 
Force had expressed confidence in the merits of the contract award. The 
Defense Business Board has also been critical of the Dept of Defense's 
acquisition corp. The board has suggested the Pentagon should either 
``professionalize'' the acquisition corps or ``civilianize'' program 
leadership. What specific steps is the Air Force taking to ensure we 
don't have a repeat of the KC-X tanker procurement or the Light Air 
Support contact?
    Mr. Van Buren. The Air Force continues its steadfast commitment to 
``Recapture Acquisition Excellence.'' In 2011 we completed the 
Acquisition Improvement Plan (AIP) chartered in 2009. This was the 
largest and most significant acquisition reform launched by the Air 
Force in the last decade. The AIP completed more than 170 process 
improvements and of particular interest to your question, concentrated 
on improving our source selection process by strengthening source 
selection governance, improving source selection training, requiring 
Multi-functional Independent Review Teams, establishing on-call source 
selection augmentation, identifying/tracking personnel with source 
selection experience, updating the acquisition planning process, and 
simplifying the source selection process. Success was evident in the 
fact that during 2011, the Air Force accomplished 209,500 contracting 
actions with only one sustained protest. Furthermore, in November 2011, 
Secretary Donley approved a follow-on effort to AIP called Acquisition 
Continuous Process Improvement (CPI) 2.0, which will further our 
efforts to improve the capabilities of our acquisition workforce. Among 
other efforts, CPI 2.0 continues improving our source selection process 
by re-engineering the competitive award process, implementing a more 
effective contract award process and increasing source selection 
experienced personnel. Once the LAS report is finalized and released, 
we will incorporate any lessons learned into our CPI 2.0 effort.
                                 ______
                                 
                    QUESTIONS SUBMITTED BY MR. CRITZ
    Mr. Critz. The AF uses a mix of tactical aviation assets to meet 
both service specific goals and national goals and objectives. Many of 
the aircraft in the AF fleet are aging and require significant O&M 
investments. Increased O&M costs cut into the service's ability to 
procure new F-35. That is, reducing O&M costs will free up funds for 
the procurement of next generation aircraft like the F-35. For legacy 
tactical aviation aircraft, outdated materials and components must be 
replaced to sustain mission availability and reduce O&M costs. Rather 
than manufacturing replacement parts and components in a manner for 
which they were first fabricated, which now has become increasingly 
more expensive and sometimes not even possible, the AF should be 
looking to leverage advances from the commercial aviation world when it 
comes to maintaining its existing aging fleet of tactical aviation 
assets. For example, through their influence on platform weight and 
cost, materials are a key driver of legacy aircraft viability and the 
affordability of sustained operations of the aging aircraft fleet. The 
vast majority of material used in legacy aircraft aerostructures is 
aluminum. Optimizing aluminum performance and affordability within the 
existing fleet of aircraft is critical to meeting readiness, 
sustainability, and affordability requirements.
    1. Can you explain those efforts the AF is undertaking to leverage 
past investments made by the commercial aerospace industry and the 
domestic aluminum industry to sustain its fleet of aging tactical 
aviation aircraft?
    2. Is the AF working directly with those elements of industry that 
have strong material expertise, strong design capabilities, and strong 
advanced manufacturing processes to sustain the AF's fleet of aging 
tactical aviation aircraft?
    3. To what extent are elements such as the AF Research Laboratory 
and AF Air Logistics Centers working with industry to address platform 
costs, platform performance and life cycle costs?
    Mr. Kendall. [The information referred to was not available at the 
time of printing.]
    Mr. Critz. The AIM-120D missile has experienced significant 
production delays, mostly due to rocket motor production. As a result, 
the budget request for Fiscal Year 2013 and beyond has been 
substantially reduced. However, the capability the AIM-120D will bring 
to the Air Force and Navy appears to be very important, given current 
air-to-air threats.
    1. Can you provide an update on the status of AIM-120D production?
    2. What steps are being taken to get production back on schedule?
    3. When will the Air Force and Navy get this weapon in the field?
    General Posner. 1. As of 31 March 2012, 364 AIM-120D out of 552 
contracted have been delivered (-188 to contract). Deliveries of the 
Captive Air Training Missiles (CATMs) are on schedule with 209 
delivered out of 200 contractually required. In addition, Raytheon 
Missile Systems is continuing to produce guidance sections (front end 
of missile; 95% of work content) at rate with 201 awaiting rocket 
motors. No AIM-120D All Up Rounds (AURs) have been delivered since 
November 2011, due to the current challenges with rocket motor 
production.
    2. Rocket motors are the sole reason the AIM-120D program is 
experiencing production delays, but several promising actions are being 
taken to get production back on schedule. First, in 2009, a second 
rocket motor source (Nammo) started qualification for the AMRAAM 
program. Qualification is on track and the first rocket motors are 
expected in July 2013. Second, an ATK (casing) and Nammo (propellant) 
Limited Production Configuration (LPC) is being qualified as a near-
term solution to the rocket motor production issue. Qualification is on 
track and rocket motors are expected in July 2012. Third, ATK 
(currently the sole-source provider of AMRAAM rocket motors) is 
continuing to investigate the root cause of the rocket motor failures 
and is implementing process improvements. ATK's goal is to resume 
rocket motor production in June/July. Raytheon is pursuing all three 
options at the same time, and the AIM-120D could return to the 
contracted delivery schedule as soon as February 2013.
    3. The planned fielding date of the AIM-120D is 1QFY14. Dedicated 
operational testing is on track to begin in June 2012.

                                  
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