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


 
                         [H.A.S.C. No. 112-121] 

                      THE NAVY'S READINESS POSTURE 

                               __________

                                HEARING

                               BEFORE THE

                       SUBCOMMITTEE ON READINESS

                                 OF THE

                      COMMITTEE ON ARMED SERVICES

                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             SECOND SESSION

                               __________

                              HEARING HELD

                             MARCH 22, 2012


                                     
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                       SUBCOMMITTEE ON READINESS

                  J. RANDY FORBES, Virginia, Chairman
MIKE ROGERS, Alabama                 MADELEINE Z. BORDALLO, Guam
JOE HECK, Nevada                     SILVESTRE REYES, Texas
AUSTIN SCOTT, Georgia                JOE COURTNEY, Connecticut
FRANK A. LoBIONDO, New Jersey        DAVE LOEBSACK, Iowa
CHRIS GIBSON, New York               LARRY KISSELL, North Carolina
VICKY HARTZLER, Missouri             BILL OWENS, New York
BOBBY SCHILLING, Illinois            TIM RYAN, Ohio
JON RUNYAN, New Jersey               COLLEEN HANABUSA, Hawaii
TIM GRIFFIN, Arkansas                JACKIE SPEIER, California
STEVEN PALAZZO, Mississippi
MARTHA ROBY, Alabama
                 Jamie Lynch, Professional Staff Member
               Vickie Plunkett, Professional Staff Member
                    Nicholas Rodman, Staff Assistant



                            C O N T E N T S

                              ----------                              

                     CHRONOLOGICAL LIST OF HEARINGS
                                  2012

                                                                   Page

Hearing:

Thursday, March 22, 2012, The Navy's Readiness Posture...........     1

Appendix:

Thursday, March 22, 2012.........................................    25
                              ----------                              

                        THURSDAY, MARCH 22, 2012
                      THE NAVY'S READINESS POSTURE
              STATEMENTS PRESENTED BY MEMBERS OF CONGRESS

Bordallo, Hon. Madeleine Z., a Delegate from Guam, Ranking 
  Member, Subcommittee on Readiness..............................     3
Forbes, Hon. J. Randy, a Representative from Virginia, Chairman, 
  Subcommittee on Readiness......................................     1

                               WITNESSES

Architzel, VADM David, USN, Commander, Naval Air Systems Command, 
  U.S. Navy......................................................     6
Burke, VADM William R., USN, Deputy Chief of Naval Operations, 
  Fleet Readiness and Logistics (N4), U.S. Navy..................     5
McCoy, VADM Kevin, USN, Commander, Naval Sea Systems Command, 
  U.S. Navy......................................................     7

                                APPENDIX

Prepared Statements:

    Burke, VADM William R., joint with VADM David Architzel and 
      VADM Kevin McCoy...........................................    32
    Forbes, Hon. J. Randy........................................    29

Documents Submitted for the Record:

    [There were no Documents submitted.]

Witness Responses to Questions Asked During the Hearing:

    Ms. Bordallo.................................................    53
    Mr. Forbes...................................................    53
    Mr. Scott....................................................    54

Questions Submitted by Members Post Hearing:

    Ms. Bordallo.................................................    65
    Mr. Forbes...................................................    57
    Mr. Loebsack.................................................    66
                      THE NAVY'S READINESS POSTURE

                              ----------                              

                  House of Representatives,
                       Committee on Armed Services,
                                 Subcommittee on Readiness,
                          Washington, DC, Thursday, March 22, 2012.
    The subcommittee met, pursuant to call, at 10 a.m. in room 
2212, Rayburn House Office Building, Hon. J. Randy Forbes 
(chairman of the subcommittee) presiding.

  OPENING STATEMENT OF HON. J. RANDY FORBES, A REPRESENTATIVE 
       FROM VIRGINIA, CHAIRMAN, SUBCOMMITTEE ON READINESS

    Mr. Forbes. I want to welcome all of our members and our 
distinguished panel of experts to today's hearing that will 
focus on the Navy's readiness posture in the context of the 
fiscal year 2013 budget request. I welcome this discussion and 
the opportunity to dive into the details of the fiscal year 
2013 President's budget submission for the Navy readiness 
accounts.
    First, and foremost, I commend the Navy for its sustained 
focus and improvements to surface ship maintenance led by the 
surface maintenance engineering planning and procurement 
activity. The rigor that has been introduced into the process 
facilitates a more comprehensive, standardized, and accurate 
assessment of fleet maintenance requirements, and requisite 
investments in the operation and maintenance accounts.
    In the next few years we look forward to seeing the full 
impact of actions taken as a result of the Balisle report, but 
the indications are positive, and progress has been steady and 
measurable in that short period of time.
    Meanwhile, naval aviation has remained relatively constant 
with a level aircraft inventory and steady maintenance 
requirements. However, in the fiscal year 2013 request, I am 
concerned that we decreased the funding in this account from 
fiscal year 2012 levels by $36 million, resulting in a backlog 
of 74 airframes and 170 engines.
    We recognize the challenge the Navy has in balancing the 
maintenance requirements for both new and aging systems in its 
inventory, and the logistics tail associated with parts 
availability. The readiness trends for full-mission capability 
rates suggests less than satisfactory performance, but I look 
forward to discussing that later in the context of this hearing 
to garner a greater insight into the rates reflected in the 
most recent quarterly readiness report.
    Despite relatively level funding, I remain concerned that 
we often are robbing Peter to pay Paul. The Navy has been 
operating in a sustained surge for the past few years. We have 
been burning out our ships more quickly because the demand has 
been high. The strategic pivot to the Pacific would result in 
continued, if not increased demand for these assets in a 
maritime environment. And the fiscal year 2013 budget request 
includes an increase in ship operations to 58 steaming days per 
quarter for deployed units, and 24 for nondeployed units with 
base and OCO [Overseas Contingency Operations] funding.
    In my estimation, this situation does not lead one to 
logically conclude that it is an appropriate time to retire 
additional assets, particularly when the existing force 
structure only satisfies 53 percent of the total combatant 
commander demand in fiscal year 2012, if the Navy proposed a 
top line of 285 ships this year, and possibly through 2017. And 
Secretary Panetta said it is his hope to increase the fleet to 
300 ships. The Navy already anticipated the retirement and 
deactivation of 16 ships over fiscal year 2013 to fiscal year 
2014; however, with this budget the Navy announced its proposal 
to retire an additional 2 amphibious ships and 7 cruisers, 6 of 
which lacked ballistic missile defense capability, across 
fiscal year 2013 and fiscal year 2014.
    Excluding the USS Port Royal, the committee has estimated 
that the approximate cost to upgrade the assets and sustain 
them in each respective fiscal year would be $592 million in 
fiscal year 2013, plus an additional $859 million in fiscal 
year 2014. By only an estimate the cost to retain those eight 
assets is significantly cheaper than the price for one new 
destroyer, for example, at more than $2 billion.
    Admiral McCoy, last year before this very subcommittee, you 
stated that the cheapest way to afford our Navy with the force 
structure that we need is to maintain the ships we already 
have, and the age of these ships is well before the 35 to 40 
years expected service life. The cruisers proposed for 
retirement have approximately 13 to 15 years of expected 
service life remaining, and the amphibious ships have 
approximately 13 to 18 years remaining, so why would the Navy 
propose to reduce the fleet size at a time when all trends 
indicate the demand is increasing?
    We do not expect the budget to get any better, and, in 
fact, reflecting on the unfunded requirements in fiscal year 
2012, I know that the Navy is now forced to deal with an 
additional $939 million shortfall due to the difference between 
the Department's projected fuel cost and actual cost. I look 
forward to hearing how you will deal with that bill. And I 
recognize that the Navy is a consumer of the fuel and does not 
dictate the prices; however, that amount is not 
inconsequential, and it wreaks havoc during the year of 
execution, regardless of your budget posture when presenting it 
to Congress for consideration. Put into perspective, the cost 
of that shortfall would cover approximately 65 percent of the 
amount required for upgrading the cruisers and retaining the 
amphibs [amphibious assault ships] proposed for early 
retirement in fiscal years 2013-2014.
    In my estimation, the proposal to reduce force structure at 
a time when the demand for Navy assets is increasing creates a 
risk that I am not prepared to accept. It is a proposal that is 
fraught with danger and will not only degrade the readiness of 
our forces, but will burn out the assets we have even quicker, 
while reducing availability to support combatant commander 
demands.
    Let me also be clear on this: I will oppose any initiative 
that seeks to undermine the preeminence of our military. I will 
oppose any effort that breaks faith with our service members 
and veterans, and I will oppose any effort that seeks to 
diminish the capabilities of our naval forces. Speaking for 
myself and what I believe is the majority of Americans, our 
Nation cannot afford additional reductions in our military.
    As to the request that is before our subcommittee this 
morning, I look forward to better understanding the reason the 
Administration believes that the Navy can do more with less. In 
my initial assessment of this issue, I believe that not only is 
our current force structure insufficient, but the future 
reductions of fleet assets with approximately 40 percent of 
their service life remaining compromises military readiness for 
the future.
    Joining us today to discuss the Navy's readiness posture 
are three very distinguished gentlemen: Vice Admiral William 
Burke, the newly appointed Deputy Chief of Naval Operations and 
Warfare Systems; Vice Admiral Kevin McCoy, Commander, Naval Sea 
Systems Command; and Vice Admiral David Architzel, Commander, 
Naval Air Systems Command.
    Ladies and gentlemen, we thank you for your service to our 
country. We thank you for being here with us today, and I 
particularly appreciate your patience in dealing with us if we 
have these votes that are called, which we hope that they won't 
be called until after the hearing, but we just don't know.
    [The prepared statement of Mr. Forbes can be found in the 
Appendix on page 29.]
    Mr. Forbes. I now would like to recognize the ranking 
member, my friend Ms. Bordallo, for any remarks she may have.

STATEMENT OF HON. MADELEINE Z. BORDALLO, A DELEGATE FROM GUAM, 
           RANKING MEMBER, SUBCOMMITTEE ON READINESS

    Ms. Bordallo. Thank you very much, Mr. Chairman, and to all 
of our witnesses, good morning, and, again, thank you for your 
service to our great country.
    Today we are going to take a more comprehensive look at the 
U.S. Navy's fleet readiness posture. The readiness of our 
Navy's surface fleet has been a topic addressed by this 
subcommittee over the last 3 years. In fact, we had a hearing 
on this matter just this past July before we truly understood 
the impacts of the Budget Control Act that Congress passed.
    As our witnesses are well aware, this committee has raised 
serious questions over the last few years about neglect and 
assumption of too much risk in the Navy's readiness budget. Our 
witnesses testified last year about some of the progress that 
has been made to address these critical readiness issues on our 
surface fleet. But I do hope our witnesses can elaborate on 
what additional steps they have taken to address maintenance 
issues with the surface fleet over the last fiscal year.
    Further, now that the Department has provided Congress with 
the fiscal year 2013 budget that cuts $487 billion as mandated 
by the Budget Control Act, members of this committee need to 
better understand the rationale behind the planned retirement 
of cruisers and LSDs [Landing Ship, Dock]. What does their 
retirement enable the Navy to do with the remainder of their 
fleet? And also, members of the committee need to understand 
what the total cost is for restoring those cruisers and LSDs 
into the fleet from our O&M [Operations and Maintenance] to 
personnel accounts. I would also like to understand what 
restoration could do to impact the maintenance of the remainder 
of the fleet.
    The Defense Strategic Guidance that was released by DOD 
[Department of Defense] earlier this year outlined a very 
ambitious and significant increase in operational requirements 
for the U.S. Navy. Moreover, the strategic guidance pivots are 
focused to the Asia-Pacific area, which I strongly support. 
However, the tyranny of distance to cover a number of PACOM 
[United States Pacific Command] requirements will certainly 
increase the OPTEMPO [Operations Tempo] of our Navy's fleet 
over the coming years. Moreover, the emphasis on power 
projection in this strategic guidance will require our Navy to 
be agile, adaptable, and at the highest levels of readiness.
    An important first step in addressing the Defense Strategic 
Guidance is the full funding of the ship maintenance account. I 
think it is important for the Navy to ensure that its current 
fleet remains as capable as possible, especially in these 
fiscally austere times. It is much more cost-effective to 
maintain a ship than to have to purchase new ones before the 
need or the requirement arises.
    I also hope that our witnesses can discuss the impact that 
rising fuel costs will have on our operational budget over the 
coming year. In the commercial sector, we see airlines adding 
costly gas surcharges, but our Navy can't do that. What is the 
Navy doing to address the challenges posed by rising gas prices 
so that we do not overburden or restrict the flexibility of our 
operational fleet? How do we address this challenge through our 
operations and maintenance budget over the long haul, and what 
types of investments are needed?
    It is critically important that we maintain our current 
fleet of 285 ships for the near term. With the end of the war 
in Iraq, and as we look at an initial drawdown of forces in 
Afghanistan, our Navy's role in projecting force across the 
globe will not decrease. In fact, given the recently released 
Defense Strategic Guidance, it is clear that the role of our 
Navy will increase, particularly in the Asia Pacific region, so 
maintaining our fleet is of utmost importance.
    And again, I thank you, Mr. Chairman, and I look forward to 
our witnesses' testimony today.
    Mr. Forbes. Madeleine, thank you for those remarks.
    And as we discussed prior to the hearing, I ask unanimous 
consent that it be made in order to depart from regular order 
so that Members may ask questions that follow train of thought 
from the proceeding Member. I think this will provide a 
roundtable-type forum and will enhance the dialogue on these 
very important issues. Without objection, that is so ordered.
    Gentlemen, as I started out, I want to thank you for your 
service to our country. You have done tremendous jobs 
throughout your careers. We know that you don't get to pick the 
crisis that we have, and we know you don't get to pick the 
budget oftentimes that you work with, but you do great jobs 
with what cards you are dealt. We appreciate you being here 
today and sharing that with us as we are trying to do our job 
and just trying to make sure we get you the resources that you 
need.
    With that, Admiral Burke, I believe you are going to start 
off, but whatever order you guys want to go in. And just so 
everyone knows, we are going to put your written statements in, 
so feel free to either submit those, read those, or just talk 
however you would like to. But we appreciate the opportunity to 
hear from you.
    Admiral Burke.

STATEMENT OF VADM WILLIAM R. BURKE, USN, DEPUTY CHIEF OF NAVAL 
   OPERATIONS, FLEET READINESS AND LOGISTICS (N4), U.S. NAVY

    Admiral Burke. Yes, sir. Chairman Forbes, Ranking Member 
Bordallo and distinguished members of the Readiness 
Subcommittee, I testify today as the former DCNO [Deputy Chief 
of Naval Operations] for Fleet Readiness and Logistics. I just 
completed my turnover as N4 with Vice Admiral Phil Cullom. I 
thought it was my duty as the officer responsible for building 
the fiscal year 2013 budget to be here before you today.
    Last week, as you mentioned, I became the DCNO for Warfare 
Systems. In this assignment, this new assignment, I bring 
together resources for platforms, ordinance, personnel, 
training, readiness, and sustainment of ships, subs, and 
aircraft, and I am happy to discuss that further as you desire.
    It is my honor to represent 650,000 Navy men and women, 
Active Duty, Reserve, and civilian, who work to ensure our Navy 
is ready to defend the Nation every day. And on their behalf I 
want to express our great appreciation for the work of this 
committee in support of their service.
    Admirals Architzel and McCoy and I have worked together to 
ensure our sailors have the capabilities and the tools they 
need to perform their work. And our CNO [Chief of Naval 
Operations] Admiral Greenert has made it clear he expects us to 
maintain a ready Navy. To that end the fiscal year 2013 budget 
submission improves on our fiscal year 2012 proposal by fully 
funding ship maintenance and continuing a high level of funding 
on aviation maintenance, allowing us to meet both operational 
and surge readiness requirements.
    Our operations accounts meet the needs of the combatant 
commanders and provide the necessary operating time to train 
our nondeployed forces for future presence and surge 
operations. With the reduction in the top line for the 
Department, this proposed readiness funding is made possible by 
the hard choice to reduce our force structure by seven cruisers 
and place two amphibious ships in reduced operating status. 
Navy readiness remains under stress as a result of our efforts 
to push the maximum available force forward to support 
operations in the Central Command AOR [Area of Responsibility] 
and support the theater campaign plans of the other combatant 
commanders to the extent our total force will allow.
    This continued high pace of operations exacts a toll on our 
equipment and our people that is reflected in overall Navy 
readiness. Our forward-deployed forces are ready; however, to 
meet immediate mission requirements, we continue to take some 
risk in our remaining surge capacity.
    The fiscal year 2013 budget addresses important readiness 
concerns by continuing the recent initiatives to improve the 
material condition of our surface ships and the continued work 
to improve the overall efficiency of aviation readiness. 
Although many of the surface ship initiatives are just 
beginning in 2012, we have some early indicators of improvement 
and readiness. It is not time to declare a victory, but I am 
encouraged by what we see.
    The fiscal year 2013 budget includes investments in both 
live and synthetic training, training targets, and enhanced 
simulators. We also continue to invest to reduce total 
ownership cost of our platforms and systems and to use energy 
more efficiently.
    While we sustain some risk in our shore accounts, we are 
focusing on direct support of our operational forces and on 
meeting the needs of sailors and their families.
    The fiscal year 2013 budget submission meets the CNO's 
challenge to maintain a ready Navy. I thank you for your 
continued work to sustain our Navy and, most importantly, our 
sailors, civilians, and families, and I ask for your support of 
our budget request. Thank you.
    [The joint prepared statement of Admiral Burke, Admiral 
Arquitzel, and Admiral McCoy can be found in the Appendix on 
page 32.]
    Mr. Forbes. Thank you, Admiral.
    And, Admiral McCoy, I think you are up next. Is that the 
lineup, or was it going to be Admiral Architzel?
    Admiral Architzel.

 STATEMENT OF VADM DAVID ARCHITZEL, USN, COMMANDER, NAVAL AIR 
                   SYSTEMS COMMAND, U.S. NAVY

    Admiral Architzel. Chairman Forbes, Ranking Member 
Bordallo, distinguished members of the House Armed Services 
Readiness Subcommittee, it is an honor for me to be here today. 
As Commander of the Naval Air Systems Command, I would like to 
emphasize how naval aviation is ensuring future readiness, 
force readiness, and preparing for the future through our 
forward maintenance and logistics posture and fleet readiness 
center alignment.
    Because naval aviation forces operate forward around the 
world, we have designed our squadron, intermediate and depot-
level maintenance activities to be mobile and expeditionary, 
bringing maintenance forward to our aircraft and our deploying 
ships and in our fleet concentration areas. This increases the 
speed of repair, maximizes readiness, and minimizes logistics 
costs by moving skill sets and parts rather than airframes.
    Our metrics to measure readiness focus on providing the 
right aircraft at the right time with the right capability in 
the right place to ensure the required readiness is there to 
meet specific missions.
    Our Navy fleet readiness centers bring tremendous value to 
this equation. They provide the structure and alignment to 
enable higher readiness both in CONUS [Continental United 
States] and overseas. In compliance with BRAC [Base Closure and 
Realignment] 1993 and in 2005, we drew down from 60 posts to 3, 
and then combined our depot and 22 intermediate maintenance 
activities to form 8 regional fleet readiness centers, or FRCs. 
Those FRCs and the marine aviation logistic squadrons are 
located close to the warfighter for faster and more agile 
maintenance, repair, and overhaul.
    The efficiencies gained from our FRC alignment could not 
have come at a more crucial time. We are now in the largest 
transition of platforms and systems in the 100-year history of 
naval aviation. This transformation affects nearly every 
aircraft type model series, including such examples as the P-8, 
the E-2D, two variants of the F-35, the Yankee Zulus [UH-1Y; 
AH-1Z], 53 Kilos [CH-53K], all of which replace--will or are 
going to replace existing aircraft.
    Some platforms are entirely new, including Fire Scout, 
Small Tactical Unmanned Air Systems, the Navy's Broad Area 
Maritime Surveillance System, and other unmanned vehicles. 
Collectively, these deliver a whole generation of improved 
platforms, weapons, and capability.
    While we introduce these new capabilities, we must continue 
our legacy systems in our fleet today, many of which are past 
the planned service life for those platforms. Over the next 
decade of production, it is interesting to note that the 
average age of our aircraft will actually decrease from 18 
years to 15.5 years. That is due to the production we have in 
place, as I mentioned. While this is an improvement, we must 
continue to rely on our aviation support system to provide the 
technical engineering, logistics and repair support to reduce 
the cost of the most significant maintenance issues and 
readiness degraders for our legacy aircraft.
    NAVAIR [Naval Air Systems Command] will continue to pursue 
efficiencies and maintenance innovations through its organic 
maintenance activities and industrial business partnerships in 
order to ensure the right levels of maintenance and readiness 
in the future.
    I thank you for your support, and I look forward to your 
questions. Thank you, Mr. Chairman.
    [The joint prepared statement of Admiral Arquitzel, Admiral 
Burke, and Admiral McCoy can be found in the Appendix on page 
32.]
    Mr. Forbes. Thank you, Admiral.
    Admiral McCoy.

   STATEMENT OF VADM KEVIN MCCOY, USN, COMMANDER, NAVAL SEA 
                   SYSTEMS COMMAND, U.S. NAVY

    Admiral McCoy. Chairman Forbes, Ranking Member Bordallo, 
distinguished members, it is a pleasure to be here with you 
this morning with Vice Admirals Architzel and Burke to discuss 
our Navy's readiness. As Commander of the Naval Sea Systems 
Command, I am accountable to the CNO and the fleet commanders 
for engineering support to our Navy and for executing 
maintenance on all of our ships to ensure the highest state of 
material readiness.
    One of the biggest impacts that NAVSEA [Naval Sea Systems 
Command] has had over the last 4 years is in getting surface 
maintenance on track, to improve day-to-day readiness, and to 
ensure that our ships achieve their full expected service 
lives. In 2009, we set aggressive goals to develop rigorous 
engineered class maintenance plans for all of our ships. We 
also wanted every ship to undergo a comprehensive inspection 
program and have since developed an assessment regimen for all 
of our surface ships.
    We are increasing the uniformed and civilian staff of the 
intermediate maintenance activities of the regional maintenance 
centers to ensure that we have the right number of people to 
execute our mission, perform the required maintenance on our 
surface ships, and oversee the execution of work by the private 
sector.
    We have developed rigorous class maintenance plans based on 
the same engineering fundamentals we use for ensuring that our 
submarines and aircraft carriers reach their full expected 
service lives. We have programmed the necessary funding to 
support the true requirements for maintenance, engineering, 
logistics, sparing, and modernization of our surface force to 
ensure each ship reaches its full expected service life. And 
consistent with the CNO's focus on readiness, the fiscal year 
2013 budget with supplemental funding includes full funding for 
ship maintenance.
    Additionally, we took a hard look at issues nagging the 
LPD-17 class [San Antonio class Landing Platform Dock] ships, 
both in new construction and in service. We now have the LPD-17 
class on a solid footing with improved contractor and 
Government quality oversight in place during construction, as 
well as solid engineering and maintenance solutions for 
problems observed in service. As a result we are experiencing 
greatly improved performance on INSURV [Board of Inspection and 
Survey] acceptance trials and during operational deployments.
    Of particularly note, USS Mesa Verde, LPD-19, recently 
completed a highly successful 11-month deployment, and that was 
after a very short cycle from its previous deployment. In 
addition, USS San Diego, LPD-22, was just accepted into the 
fleet following our most rigorous and successful INSURV trial 
ever performed on this class.
    We also took steps to shore up the reliability and 
sustainability of our Aegis weapon system on our cruisers and 
destroyers. And this included increasing our spare parts 
inventories, which have been a driver behind CASREP [Casualty 
Reporting] reports.
    While we have rightly focused on putting a solid foundation 
in place in terms of engineering rigor for our surface ships, 
similar to what we do for submarines and carriers, our focus 
going forward has to be on execution of our engineered plan and 
on staying the course in terms of program funding to ensure we 
have the engineering, maintenance, and logistics support in 
place.
    I want to specifically point out up front that while we 
have put in place a plan to improve surface force readiness, 
most of our initiatives have not yet come to full fruition due 
to the time lag from program development to POM [Program 
Objective Memorandum] funding. Many of our initiatives have 
already received a jumpstart with support from the fleets and 
OPNAV [Office of the Chief of Naval Operations]; however, full 
funding for many initiatives start in fiscal year 2012, 2013, 
and 2014, and the full effect of our efforts will take a few 
more years to be fully realized. However, we are starting to 
see a positive impact of our increased focus on maintenance, 
engineering, sparing, and logistics.
    I will give you some examples. Sixty-six of our surface 
ships have had an engineered class maintenance plan developed 
for their next major shipyard maintenance period, and the first 
11 of these ships are now in shipyard execution on the 
waterfront or have recently completed execution.
    Also, although the President of the Board of Inspection and 
Survey Report for 2011 has just been completed and not yet 
briefed to Congress, the report confirms that cruiser and 
destroyer scores are up across the board. And also, recent 
actions to improve Aegis software reliability, shore support 
training, and system sparing have already decreased both the 
number and the response time associated with clearing Aegis-
related CASREPs.
    We are looking harder, and as ships are being drydocked for 
our rigorous and thorough inspections, we are seeing the impact 
of the backlog of previous deferred maintenance, particularly 
with the condition of tanks, voids and other structures driving 
growth work. We are working through this, but I expect we will 
continue to see a rise in the growth of maintenance items to be 
worked for a few years until all of our ships complete their 
inspection protocols that we have put in place.
    I am very happy to answer any questions you may have. Thank 
you.
    [The joint prepared statement of Admiral McCoy, Admiral 
Burke, and Admiral Arquitzel can be found in the Appendix on 
page 32.]
    Mr. Forbes. Thank you, and thank all of you for your 
comments and the great work you have done over this last year.
    I am going to defer my questions until the end because some 
of our Members will have planes and flights that they will need 
to catch to get out of here. So I am going to go now to our 
Ranking Member Ms. Bordallo for any questions she might have.
    Ms. Bordallo. Thank you very much, Mr. Chairman. I do have 
a few questions.
    Admiral Burke or Admiral McCoy, can you comment on what 
impact there would be if we were to restore the cruisers and 
LSDs that the President's budget recommends should be 
mothballed? And can you clearly outline for the total costs 
associated with restoring those ships, including operations and 
maintenance, sustainment and personnel costs? Further, what 
risks would we be taking with regards to the maintenance of the 
remainder of the fleet if Congress took this action?
    Admiral Burke. Let me start, and I will let Admiral McCoy 
jump in when I am finished.
    First of all, the cruiser retirements were an extremely 
difficult choice for us to make, but if we--our goal was to 
balance readiness, procurement, and the personnel priorities 
within our budget controls to still meet the global force 
management and to avoid a hollow force. So essentially what we 
did is sacrificed a few ships for the good of the rest.
    Now, you might say, why did we pick the cruisers, 
specifically? And the reason is because we had a significant 
backlog of maintenance and modernization. I shouldn't say 
backlog. We had a significant amount of maintenance and 
modernization to do. So we would need to modify most of those 
cruisers for ballistic missile defense, and then we would 
also--we had pretty significant maintenance actions required on 
several of those ships. And several of those ships that we 
chose have the superstructure aluminum cracking. So rather than 
continue to deal with that problem, which sucks away a lot of 
resources from others, we decided those were the right ones to 
shed.
    Now, the cost to retain those ships, you would have to look 
over the course of the FYDP [Future Years Defense Plan], and 
the number--the future years defense plan, 5 years, and the 
cost to retain those is a little over $4 billion.
    So I know the chairman mentioned some numbers in his 
opening statement, which I am sure are accurate, but there is 
additional--there is additional costs. There are people costs, 
you know. We would have to reman those platforms because we 
have taken credit for taking the people off. There are also 
helicopters associated with those platforms. And then there is 
also the maintenance I mentioned as well as the modernization. 
So the modernization is a little under $2 billion. All of the 
rest, the helicopters, the people, the maintenance, and the 
operational funding, is a little over $2 billion over that 
period. The inactivation costs are relatively small, a couple 
of million dollars, and then if you put them in mothballs, then 
you pay a couple hundred thousand dollars a year for 
dehumidification and mooring and such.
    So as I mentioned at the beginning, a terribly difficult 
choice. We didn't want to make it, but I think the--in order to 
maintain the readiness of all of the forces, we chose to 
decrement our Navy by a couple to maintain that Navy. And as 
Admiral McCoy testified last year, the cheapest way to keep the 
Navy that you have is to maintain the ships you have. But if we 
didn't do this, if we kept too many ships, we would be 
undermaintaining all of them, and so we would end up down the 
road having a bigger problem than we have today.
    Ms. Bordallo. Admiral McCoy, did you want to add to that?
    Admiral McCoy. Yeah. When I meet with the fleet commanders 
and the platform-type commanders, their biggest issue is the 
platforms that we give them need to be whole in terms of 
maintenance, training, people, spares, that--you know, the full 
gamut of things it takes to send a ship forward and be ready. 
For example, for the cruisers it is a little over $4 billion 
over that 5-year period. The two pots that you would look at 
taking that from would be the readiness accounts or the 
shipbuilding accounts, and none of those are very good--none of 
those are very good choices. And typically, because 
shipbuilding is already to the point where we are very 
concerned about the industrial base in terms of our quantities, 
the likelihood is it would come out of the readiness accounts.
    And what this budget does is focuses on capability and 
ensures that the ships that we do send forward are whole in 
every way. And that was a very difficult choice that we had to 
make as a Navy.
    Ms. Bordallo. Thank you. Thank you, Admiral.
    Admiral Architzel, can you discuss how you measure the 
risks of increasing the backlog of airframes and engines in the 
fiscal year 2013 budget? And further, can you work down the 
backlog if additional funding were provided? Do you have the 
people and the spare parts to reduce the backlog if such 
additional funding were provided?
    Admiral Architzel. Congresswoman Bordallo, thank you. The 
way we compute the backlog is based on the dollars available, 
so today, with the--with our budget submit, we are forecasting 
a budget that would allow us to have--would really result in a 
backlog of 74 airframes and approximately 170 engines. Are we 
sized to work that backlog off? I would answer it this way: Our 
capacity within our depots would say that we can in a year's 
time be able to work down that backlog with the present 
capability and our capacity within our depots if we keep that 
number under 100 airframes and under approximately 340 engines.
    In the past we have been able to do that. For example, in 
fiscal year 2012, we had a backlog. With some supplemental 
funding provided by Congress, we were able to then work that 
backlog back to essentially zero out the backlog in 2012.
    As we go forward, though, the way we would--if able, the 
way we could meet that would be to additionally put in 
additional overtime, additional contract support within our 
depots, because we do have the capacity with that number. If 
that backlog continues to grow, however, above that number, 
then our ability to drive that backlog down within a year would 
be something we would then have to carry that over into future 
years.
    So today I would answer it we are positioned to do that, 
and that is how we would go forward.
    Ms. Bordallo. All right.
    Mr. Chairman, I have one quick question here. It has to do 
with fuel, and any one of our witnesses can answer it.
    Can you outline what steps you are taking to incorporate 
alternative fuels or alternative energy as a way to enhance 
your operational readiness? We understand that there are 
certain initial start-up costs for these investments, but what 
is the potential long-term benefit? I know we will explore this 
specific issue in more detail next week, but I am wondering if 
any of our witnesses care to give their opinion on this matter 
with regards to its impact on our operational readiness both 
for surface fleet as well as with the Navy aircraft.
    Admiral Burke. Let me start, and the others can jump in if 
they so desire. But, you know, I went back and looked at the 
fuel price that we have paid over the last 10 years in our 
budgets, and it has increased four times.
    Ms. Bordallo. Substantially.
    Admiral Burke. And granted, we are shooting behind the duck 
it seems like every year because it is going up faster than 
what we planned, but I also looked at what we--what our indexes 
said. And our index has gone up every year as well. We just 
haven't caught up each year.
    And as you know, a $10-a-barrel increase costs us a little 
over $300 million a year in the Navy. So what we have done, at 
least in the last couple of years, is we have tested all our 
ships and all our aircraft with a 50/50 blend--we are agnostic 
on the source of the other 50 percent, the alternative fuel--
just to make sure that should the fuel supply begin to 
incorporate those kinds of fuels, that we will be able to 
accept them in our aircraft and ships.
    Our goal here is to have ships and aircraft stay the same 
and have the fuel modified as necessary to fit those, so we 
don't have significant costs in changing around our aircraft 
and ship engines.
    So that is our philosophy on what we are doing. And we have 
a pretty large exercise coming up in the summer called RIMPAC 
[Rim of the Pacific Exercise] out of the mid-Pacific, out of 
Hawaii, where we bring together a bunch of nations, and we are 
going to continue to test those fuels in that environment. And 
so we will run our ships and planes for several weeks as 
opposed to a few hours, and so that will be more or less our 
final test on those fuels.
    Ms. Bordallo. Thank you, Admiral.
    And I have time constraints here. Does anybody else have 
anything to add to that?
    Admiral McCoy. Ma'am, if I could, in addition to the fuel 
alternatives that we are looking at that Admiral Burke talked 
about--because in addition to cost, the need to refuel our 
ships becomes an energy security issue for us on deployment or 
at sea--we are focused on many engineering efforts shipboard to 
reduce our fuel consumption. Examples include later on this 
year or early next year we will take to sea a hybrid electric 
drive on one of our destroyers, a backfit that we think has got 
promise for reducing energy and letting us operate in a more 
efficient lineup with our gas turbines; everything from LED 
[Light-Emitting Diode] lighting on our ships that saves a small 
amount, but for the big fleet it adds up; voyage management 
systems for better planning around sea states and weather; more 
efficient motors and compressors, showing promise for reducing 
fuel; advanced coatings. We have got a couple of ships out 
there running around with a very slippery coating system on the 
hull. We have got on some of our amphibious ships the same 
system on propellers that are showing increased efficiency. We 
have got everything from stern flaps, kind of like some people 
have their outboard engine, on the big ships that we are 
installing that we are seeing efficiencies, and energy stowage 
devices that let us run with less of our fuel-consuming prime 
movers on line.
    And so across the board, CNO and Secretary of the Navy have 
supported many engineering initiatives, and we haven't waited. 
We have got them out there, piloting them in the fleet right 
now, and they are showing promise.
    Admiral Architzel. I would just like to add as well on the 
aviation side to Admiral Burke's point. Our position within 
NAVAIR was to ensure that should these fuels be available, we 
would want to make sure our engines are able to burn with those 
fuels and perform with them, and that is why we have taken a 
very aggressive movement to ensure we have certified all of our 
engines, and that is the responsible thing to do to make sure 
we are ready to take those fuels as whatever alternative source 
would come forward, the first piece.
    To add onto Admiral McCoy's comments on the engineering 
side within aviation, we are looking at those abilities to 
improve our efficiencies of aircraft usage which makes a large 
part of the fuel burn. Those, I would say, are something that 
are longer term, though, not to be confused we can get an 
immediate return on that in today's, or this year's or next 
year's budget.
    And the final piece would be an engineering piece. In 
looking at it we do have the labs at China Lake that work under 
NAVAIR, which are looking at development of additional 
alternative fuel sources, but again, those are probably mid- to 
long-term ideas, but it is areas we are working on actively.
    Ms. Bordallo. Thank you very much.
    Mr. Chairman, I would be very interested to know in the 
future just what the cost reductions are once these are all in 
place.
    [The information referred to can be found in the Appendix 
on page 53.]
    Mr. Forbes. I think that would be useful information, and 
thank you, Madeleine.
    We are going to try to hold everyone to a 5-minute rule now 
just because votes are going to be coming up, and we want you 
to be able to get your questions in before you have to leave. 
So the gentleman from Georgia is recognized for 5 minutes.
    Mr. Scott. Thank you, Mr. Chairman, and I, too, look 
forward to reviewing the information that Ms. Bordallo asked 
for.
    I would also like to know how much the Navy is spending as 
a total on the light bulbs that you discussed and the other 
alternative sources of power. And I guess one of my questions 
is in today's day and time, with the budget challenges that we 
have, cash-flow challenges when you get right down to it, what 
is the timeline for a break-even point, if you will, on how 
much the Navy is putting into alternative sources of power? Has 
that been calculated?
    Admiral Burke. Well, Congressman, it is different for each 
thing we do. Most of what we have done early on in the areas 
that Admiral McCoy was talking about have very rapid break-even 
points in a few years. Now, some of the other ones that maybe 
don't get--the early funding will be later on have longer 
break-even points, but we can get you some representative 
numbers if you would like.
    Mr. Scott. Absolutely. And if you have the breakdown of 
which ones are the most efficient use of taxpayer funds, I 
certainly think we should continue with those. But then those 
that have a 20-year payback, or 25- or a 30-year payback maybe 
need to be some things that we postpone.
    Admiral Burke. Sir, I don't think there is anything we are 
funding that has a 20- or 25-year payback, but we will get you 
the data, sir.
    Mr. Scott. Thank you.
    Admiral McCoy. Sir, if I could just add in, many of the--
most of the things that I talked about, the Navy is not on the 
leading edge of. These are things that industry is bringing to 
the table. So it is not like we are investing heavily in R&D, 
it is things that we think can be readily adapted from industry 
and put on our ships.
    Mr. Scott. Thank you.
    And, Admiral Architzel, I represent Robins Air Force Base. 
We have a wonderful, efficient depot. We have got a great 
general there in McMahon, and people there really have been 
able to turn things around.
    But I wanted to get back to your backlog and talk about the 
effect that the cuts to the depots have had over the course of 
time. You have gone from six to three. The Air Force has 
obviously had reductions as well. But the mission-capable goal 
for the Navy, if I am not mistaken, used to be in the low 70s 
percent, 73 percent for aircraft, and now it has been reduced 
to 60 percent of the aircraft that are deployed and 50 percent 
nondeployed. Are those numbers accurate, or was I given bad 
information?
    Admiral Architzel. No, sir, we report quarterly to Congress 
on our MC [Mission-Capable] and FMC [Full-Mission-Capable] 
rates, and that has been a question that has been asked. And I 
would just say in taking those numbers into context, we do have 
goals of both mission-capable, and full-mission-capable 
aircraft. I would say without a context, though, it is hard to 
understand what those--really what that significant metric, 
that particular metric means.
    Today we measure in naval aviation enterprise for having, 
as I mentioned, the right aircraft at the right time, at the 
right place, and the right capability. It is what goes off the 
front of the ship at 0800. Is it capable to do the mission, and 
we measure that every day, day in and day out. That does not 
mean that the FMC rates and MC rates are not something we 
looked at. Those are 24-hour metrics. By that I mean every hour 
of the day, you are looking at mission-critical systems, and if 
they are reported because we are doing maintenance, they are 
reported as against that FMC rater, that full-mission-capable 
rate. So it is in the context, to understand it, would tell you 
what that is showing you is to make our sustained rates 
forward, and as we are flying in those positions, we are 
actually having to do a lot of maintenance and a lot of effort 
to make sure we maintain those. That is part of what we are 
doing there to go forward with it.
    Mr. Scott. I am getting short on time, but I was reading 
from your testimony. I thought that the goal was 60 percent. 
And then in prior documents it has actually been reduced from 
the low 70s, to 60, is that not correct, or have I gotten bad 
information?
    Admiral Architzel. I would say the FM--if over the entire 
Navy, the document I could probably verify for you if it has 
been changed from that number.
    Mr. Scott. Okay.
    Admiral Architzel. But I will get back to you.
    [The information referred to can be found in the Appendix 
on page 54.]
    Mr. Scott. All right. Well, just very quickly, I mean, do 
you plan to deal with the backlogs, and the aircraft that are 
backlogged, and the engines that are backlogged?
    Admiral Architzel. Yes. As I mentioned, in 2012, we had a 
planned backlog built based on where we were. We ended up, 
thanks to the work of supplemental, we were able to take and 
actually work down that backlog on engines and airframes to 
zero. And now in the 2013 budget, with where we are, we end up 
projecting a 74-airframe and 170-engine backlog. We have the 
capacity within the depots, should we get additional funding, 
to be able to then man up and actually work that backlog off as 
well. But today with budget, we have to make decisions on where 
we would go.
    That backlog that is on airframe side or the engine side 
meets our entitlements for aircraft entitlements on our flight 
lines, and it also meets our ready-engine goals for the engine 
side. So we are not in a position of affecting readiness with 
those particular numbers to date. The issue would be if we 
continue and don't--and build a higher backlog, we will start 
to impact our ability to meet flight-line entitlements and 
engine-ready goals. But today we can meet it, and we also have 
the ability, should additional funding be available, to work 
that backlog off in 2013.
    Mr. Forbes. And I am sure if the gentleman would like to 
follow up with some additional written questions, that the 
Admiral would be happy to respond to those.
    Mr. Scott. I might have to get a marine to translate it for 
me.
    Mr. Forbes. The gentleman from Connecticut is recognized 
for 5 minutes.
    Mr. Courtney. Thank you, Mr. Chairman, and I want to thank 
the witnesses. You are obviously engaged in a very difficult 
balancing act, and I really compliment you on the hard work 
that you are putting in to make sure, again, we are meeting the 
budget caps, but also balancing our national defense. And one 
of the balancing acts which I know Admiral McCoy has been 
deeply involved in is making sure that our industrial base, 
which faces those peaks and valleys, is protected.
    I had the opportunity to visit the Norfolk Navy shipyard 
not too long ago, and was talking New England Patriots football 
with Connecticut welders and shipfitters who were part of that 
group of folks that, again, Admiral McCoy made sure were 
deployed to protect those positions when we are going to need 
them later back home in the Northeast. And again, I just want 
to compliment you on the hard work you put into that issue.
    And I guess my simple question would be, you know, how do 
you foresee the private shipyards in terms of maintenance 
availabilities over the next year so with the budget that you 
have been given?
    Admiral McCoy. In terms of maintenance, the private sector 
will be fully employed. Now, there are always going to be in 
the business cycle, particularly with the yards like Electric 
Boat that does both maintenance as well as new construction, 
there are peaks and valleys in there. But in terms of 
maintenance, particularly as we are now fully funding service 
maintenance, certainly the surface repair yards are fully up, 
and the new construction yards at Electric Boat that does 
maintenance, we are putting PIRAs [Pre-Inactivation Restricted 
Availability] in there. The availability is right before the 
end of life on submarines. We are also putting selected 
restricted availabilities in there, as well as we are using the 
Electric Boat folks, on any given day 300-400 people, a peek of 
around the country to do the critical nuclear maintenance on 
our submarines. Newport News, which also does repair and 
maintenance work, is seeing a spike in work.
    So I think we are in a position right now, certainly with 
our new construction yards that do maintenance, that there is a 
good balance of work over the next couple of years to keep them 
healthy.
    Mr. Courtney. Well, thank you. And as you know, I will be 
continuing to check in with you every 6 or 7 weeks.
    Admiral McCoy. Yes, sir.
    Mr. Courtney. So I really appreciate the input.
    Admiral Burke, the shipbuilding plan which was submitted as 
part of the budget altered the Block 4 contracts for--or 
contract for the Virginia class with a one-boat 2014 planned, 
and, you know, that clearly was something that was not 
contemplated last year. You know, everything that we have ever 
seen from Ron O'Rourke and others about the projected shortfall 
or dip in the submarine fleet in the 2020s, this is--it just 
seems that it is a simple math question in terms of aggregating 
that.
    I was wondering if you could talk about that change in 
terms of its impact on repair and maintenance, which will, it 
seems, spill over, because there is going to be more demand on 
the existing lower number of submarines, and, again, just what 
you see as far as its impact on readiness.
    Admiral Burke. Yes, sir. Once again, a tough choice to move 
that ship from 14 to 18. And as you point out, it is a critical 
shortfall we see coming in the 2020s, when those ships from the 
1980s and 1990s begin to retire in significant numbers. So we 
will be below our SSN requirement as a result.
    I think, though, Congressman, there is not a--there is a 
marginal impact on the readiness. Certainly we will have to 
spread that--the operations over one fewer submarine, and that 
will have a minor impact. But it is sort of the same approach 
we took with the cruisers is we took a little pain here in 
order to be able to continue to take care of all of the rest of 
them. You know, it was a bill payer, and it is nothing more 
than that.
    Mr. Courtney. Well, that certainly seems to be what we have 
heard from Mr. Hale, and Secretary Panetta, and others, and I 
know Admiral Greenert has really been pretty upfront about the 
fact that if there is a place he would like to see us, you 
know, try and make a change, that would be it. And I look 
forward to working with your team to see if we can figure out a 
way to smooth out that dip.
    Admiral Burke. There is no question that submarines are 
critical to our shift to the Pacific, and we have to get 
submarines right. Yes, sir.
    Mr. Forbes. Thank you.
    The gentleman from Mississippi is recognized for 5 minutes.
    Mr. Palazzo. Thank you. Thank you, Mr. Chairman, and thank 
our distinguished guests for being here today. I look forward 
to your expertise and your experience and all things Navy. I 
would like to say that Mississippi is extremely excited to be 
hosting the commission of the USS Mississippi on June 2nd. That 
is an open invitation to anybody that hears my voice. 
Hopefully, it is a lot. But it is good to have you all here 
today.
    I have one question. You know, I have had two CODELs 
[Congressional Delegations] since I have been a Congressman 
that have really come up. One was, of course, visiting our 
troops in Afghanistan during Memorial Day, and the second one 
was a PACOM visit with Chairman Wittman. It was an extremely 
wonderful trip to not only go see what is happening in Hawaii 
with, I believe, the Seventh Command, talked to Admiral Willard 
and others, but the common denominator from that trip was--with 
the Philippines, the Republic of Korea, and Guam and others 
was, you know, China. What is China doing? You know, they are 
building, they are investing in military. Why? What are we 
going to do? What is our posture going forward?
    But that is also China has become a common denominator in 
almost everything that I hear. We are talking about drilling in 
America, American energy independence, and the next thing, you 
know, we start talking about ice cutters, and the next thing 
you know, China is building ice cutters to get up into the 
Arctic, to lay claim to resources that we think are a little 
too far away from their area of operation.
    So with that, and knowing that the emphasis and what we 
have heard from the administration and what we have heard from 
Secretary Panetta is emphasis on the Pacific, emphasis on 
China, possibility of North Korea, but then we are starting 
talking about reducing our shipbuilding targets and reducing or 
taking ships out of commission early like in 20 years out of a 
35- to 40-year life expectation. What do you all see as, you 
know, the risk associated with that, with the growing threat in 
the Pacific?
    Admiral Burke. Well, certainly, Congressman, we would love 
to have as large a Navy as we possibly can, but the challenge 
we have is we have to meet the budget. So what we are trying to 
do is make sure we meet our personnel accounts, we meet our 
readiness requirements as well as procurement all in one, and 
get there.
    I think we have a couple of ways that we are trying to deal 
with this, and one of the things that happens when you deploy 
rotational forces is they go over for a while and then come 
back. And so it takes several ships to keep one forward.
    What we are doing, or what we are looking at doing, in 
Singapore and in some other places in the Pacific, as well as 
other places in the world, which will free up assets to go 
elsewhere, is some forward stationing. You know, for instance, 
we are going to put some LCS [Littoral Combat Ships] in 
Singapore. That will allow those ships to operate for several 
cycles as opposed to one cycle and then come back. So it is a 
more efficient way of using the platforms you have. We will do 
the same things with destroyers in Rota. We are adding 
additional ships to Bahrain to do the same sort of thing.
    So you may say, well, what does the Rota or what does the 
Bahrain got to do with the Pacific? Well, if we can become more 
efficient in some of those places, then that frees up assets to 
go elsewhere.
    So that is the way we are trying to address it from a--
trying to address a growing challenge with a mostly stable 
Navy. We will be 285 now, 285 at the end of the FYDP. And so 
that is our approach.
    Mr. Palazzo. Are you confident the shipbuilding plans and 
the Navy's strategic plan in this current financial environment 
will be able to meet those emerging threats? Because we are 
cutting our budget, China is increasing their budget, and that 
is just what we see. That is what is on the surface.
    Admiral Burke. I am definitely concerned, so if 
sequestration or some form of sequestration occurs, we will be 
very challenged to maintain anywhere close to the force 
structure we have today.
    Mr. Palazzo. Thank you. Thank you for sharing that.
    And the sequestration, I think everybody on the--not only 
just the subcommittee, but the entire House Armed Service 
Committee, many Members in Congress and the majority of the 
American people do not want to see sequestration hit our 
military either. So thank you.
    I am out of time. I yield back.
    Mr. Forbes. Thank the gentleman.
    And once again, thank you all for being here today, and I 
have got a few questions that we would like to get on the 
record if you don't mind, if we could go through some of those.
    First of all, Admiral Burke, one of the things that we know 
is that--or at least it is my understanding--we have now about 
285 ships in our Navy. Is that an accurate, as best as we can--
--
    Admiral Burke. Yes, sir.
    Mr. Forbes. We have a lot of requests for our combatant 
commanders. Of the validated requests that come from our 
combatant commanders, how many ships would it take in our Navy, 
based on your estimation, to meet all of the validated requests 
from our commanders, combatant commanders?
    Admiral Burke. Give me just a minute on that, sir.
    Mr. Forbes. Please. And if you would like, on any of these 
questions, if you would rather take them for the record and get 
back, I am okay with that, too.
    Admiral Burke. No, I am happy to answer the question. I 
just want to make sure that I elaborate a little to make sure 
to get the point right.
    The combatant commander requests come into the services, 
and then the--there is a very high number of requirements from 
the services, or from the combatant commanders, which are then 
prioritized and adjudicated by the Joint Staff; essentially a 
way to adjudicate supply--a lesser supply and a greater demand. 
So of those requests that come in, some are determined to be 
more valid than others, if you will.
    But to get to your exact question, of those requests that 
come in from the combatant commanders----
    Mr. Forbes. Admiral, could I just on the nomenclature just 
make sure I am right, too? As they come in, one of the first 
weed-out processes is we determine whether they are validated 
or not. In other words, we go through and make sure they are 
legal, they don't have the other assets somewhere, and then we 
stamp them as validated. And then, like you said, they go 
through a process where we then look at the resources we have 
and allocate what we can, and we adjudicate which ones we can 
give them, which ones we can't.
    So I want the top number, the ones that we have validated 
and said, yes, this is legal, this is a proper request. Of 
those combatant commander requests, approximately how many 
ships would it take us to be able to meet those if we had them?
    Admiral Burke. It would take a Navy of over 500 ships to 
meet the combatant commander requests, and, of course, it would 
take a similar increase in the aircraft and other parts of the 
Navy as well to meet the combatant commander requests.
    Mr. Forbes. And we talked about, and my friend from 
Mississippi correctly points out, on the sequestration how 
detrimental that would be. The fear I have is that most 
Americans don't even know what the term ``sequestration'' 
means, much less the catastrophic effect it would have. But if 
sequestration were to take effect as written, which would be an 
across-the-board cut, you know, as it is now, what would the 
impact be to the resulting size of our fleet?
    Admiral Burke. Okay. Let me elaborate a little bit on that 
one, sir. First of all, sequestration, would have a significant 
and immediate impact. We are talking about $600 billion roughly 
to the services, of which--or to DOD, of which about $15 
billion would come to the Navy. So that would be $15 billion 
each year for 10 years, and on top of the $487 billion that we 
are currently working on that is spread over 10 years.
    So put the $15 billion number in context. That is about the 
same as our SCN [Shipbuilding and Conversion, Navy] number, our 
shipbuilding number, per year; it is a little less than our 
aviation procurement number a year; and is it about twice the 
size of our combined aviation and ship maintenance annual 
budget.
    And it is more than our ship and aviation operating budget 
annually. The big problem with sequestration is it is 
indiscriminately applied. So it hits every account equally. And 
I don't know what the percentage is, but let us just use three-
quarters as a rough number. So every account would be 
decremented by three-quarters--or by a quarter, down to three-
quarters. So you would be saying, okay, here is your paycheck; 
it is three-quarters of what you planned, let us go buy a ship. 
You can't do that with three-quarters of the amount of money it 
takes to buy a ship.
    So that's the real challenge. And the number that we are 
talking about is I think in a couple of years we would be down 
to 230 ships.
    Mr. Forbes. With that in mind--and let us take 
sequestration and put that aside for right now--what risk are 
you assuming today? I understand as we talk about your 
allocations, you guys do a tremendous job of picking and making 
your allocations given the pot that you have. But one of the 
questions that is tough for us to get our hands around is what 
risk are you assuming today, and what are your concerns about 
Navy readiness as things stand right now?
    Admiral Burke. Sir, I have two major concerns. The first 
one has to do with what Admiral McCoy suggested, and that is I 
think we have a good plan to recover surface ship readiness, 
and I think we are in pretty good shape on readiness in the 
rest of the Navy. But that new plan, which is just beginning to 
take effect, as Admiral McCoy mentioned, is costly, and as the 
budget becomes more challenging, I am concerned that we will 
not properly fund the maintenance in the future.
    You know, I did some looking into this, and really the only 
variable in the amount of money we put into a particular type 
of ship is how much do we actually--how much of the maintenance 
do we actually do. And if you do all the maintenance, you will 
end up with a bigger, better, sustainable fleet than if you 
don't. You will do more procurement if you don't do the 
maintenance, but you won't end up with the same quality fleet 
or the same size fleet.
    Now, my other concern has to do with, I think, the biggest 
challenge to that, to the readiness accounts, which I believe 
is supplemental funding. The supplemental funding is what is 
making our readiness accounts whole today. Without supplemental 
funding we would be a couple billion dollars a year in the 
hole. So that surface ship maintenance in fiscal year 2013 is 
100 percent funded with supplemental funding. Without 
supplemental funding it would be 80 percent funded.
    And so what does that mean? Let me try to put that in terms 
that are useful to you. We preferentially repair carriers and 
submarines over surface ships simply because they have flight 
deck requirements, and the submarines dive, and if they can't 
dive, then they turn into surface ships, and they are not very 
effective submarines. So we preferentially take the risk when 
we take it in maintenance in the surface ships.
    Now, of note, those surface ships are repaired in private 
yards as opposed to government yards. So to retire that $1.3 
billion risk that is being paid for in OCO today, we would 
essentially not fund any surface ship availabilities for 2013. 
And what does that mean? Well, it means that we would operate 
with a greater number of casualty reports. We would eventually 
get to a point where your ships weren't in a condition that 
they could deploy. Now, it wouldn't necessarily happen 
immediately. There is a little bit of a lag period, because 
those ships we are sending forward today rely on maintenance 
that we did yesterday or last year. So there is a little bit of 
a lag, but if you do this, and if we don't fund the maintenance 
in big numbers like we are talking about, we are going to have 
a significant challenge.
    Mr. Forbes. We hear a lot from testimony and things we read 
about the new strategy presenting us with more risk that we are 
having to take. Based on this budget, not that you haven't made 
the right allocations, but just in the overall dollars and 
where we are now, what are the major risks that you see that 
the Navy is taking today?
    Admiral Burke. I would say that the biggest risk is 
capacity. You know, I think we are doing the right things, as 
you point out, with what we have. But the challenge is 
capacity. A ship can only be in one place; an airplane can only 
be in one place. So as we cut numbers, you know, we will look 
at ways to mitigate it, as I mentioned. We will forward station 
to try to be more efficient.
    Now, let us be fair, that takes a toll in that you are 
operating those ships a little harder. Additionally, what it 
does is when the bell rings for a potential fight, we are all 
in. So we are going to send as much forward as we possibly can. 
If you are operating with ships rotational, operating with 
ships forward stationed, yes, they will get there because they 
are closer, but if in order to do that you have traded off 
capacity, then you don't have as much ability to surge as you 
did before. So that is my biggest concern is capacity.
    Mr. Forbes. And with that in mind, and I know you addressed 
the retirement of the additional nine ships, the seven CGs and 
the two LSDs, but we do know that they did have approximately 
20 years life expectancy left in them. And I am not saying your 
allocation wasn't right, again, given what you were given. And 
you don't have to do this today, but I would like to make sure 
we at least got those numbers correct. So if you could provide 
us an estimate of the cost per platform to upgrade the six CGs 
[Ticonderoga class Guided Cruisers], excluding the Port Royal, 
with the necessary BMD [Ballistic Missile Defense] capability 
and those budget lines. Also, if you could provide us with an 
estimate of the O&M cost per year per platform. Then what is 
the full cost across the FYDP for retaining those assets? And 
then if you could provide us the cost that was requested as 
part of the budget submission to inactivate or retire these 
ships in fiscal 2013 and fiscal 2014. And I don't expect you to 
have to do that today. I know you are prepared probably to do 
it.
    Admiral Burke. I can give you a little bit of that now just 
to put it in context.
    It is important to know that with any ship, that the cost 
to own it is the biggest cost, the cost to do the maintenance 
every year. It is about three-quarters of what it costs. The 
operating costs are relatively minor in comparison.
    So the operating costs for the cruisers are about $40 
million a year. But we are talking big costs of several hundred 
million dollars a year to do the maintenance, repairs, and the 
modernization that would be needed. But we will get you the 
specifics on that, sir.
    [The information referred to can be found in the Appendix 
on page 53.]
    Mr. Forbes. And one other thing. You talked about earlier 
about mothballing and that not costing too much. But really the 
proposal, as I understand it, is not to mothball them, but it 
is to scrap them. Am I incorrect on that?
    Admiral Burke. We would put them in a mothball status while 
waiting to decommission or to dismantle.
    Mr. Forbes. But the plan is ultimately to dismantle them as 
it sits right now?
    Admiral Burke. Dismantle them or sell them, yes, sir.
    Mr. Forbes. And would you say that this decision is also a 
bill payer, the same as it was with the sub?
    Admiral Burke. I would say that this is a--given the budget 
situation we had, it was a choice we made to pay the bill, yes, 
sir. And I think it is a wise choice.
    Mr. Forbes. The next question that I would have for Admiral 
McCoy and Admiral Architzel are these. If you could discuss the 
level of OCO funding, and Admiral Burke has talked a little bit 
about that, that is proposed as a proportion of the total 
requirement for both ship and aircraft depot maintenance, and 
what are risks associated with those investments and having 
that funding the way it is now?
    Admiral McCoy. Yes, sir. Admiral Burke, I think, laid it 
out pretty good. In my business it is essentially the OCO 
funding of about $1.3 billion in this budget is for ship 
maintenance, and it is just 20 percent of the required ship 
maintenance. And as Admiral Burke said, because of the 
certification requirements on our aircraft carriers and our 
submarines, we maintain those first. If we did not get the OCO 
for that $1.3 billion, it would essentially eliminate surface 
maintenance, which is done primarily in the private sector. And 
so that is where the risk lies, I think, in my side of the 
business here with this budget in terms of do we get that OCO 
or not.
    Admiral Architzel. On the aviation side, sir, in the budget 
we call for approximately $1.5 billion in our aviation depot 
maintenance combined with our logistics lines as well, and the 
OCO provides about $250 million of that, or roughly 16 percent. 
Today with OCO and with our base, as I mentioned, we have a 
backlog that we are projecting to be 74 and 170, aircraft and 
engines. If we didn't have that 16 percent, you would take away 
from the--today we plan on 734 aircraft into our depots and 
2,343 engines. If you take 16 percent of those numbers, that 
would be the kind of impact you would see had we not had that 
funding.
    The risk we have is that we have a capability within our 
depots to maintain our forces and our aircraft and engines. If 
we exceed a certain number, we will carry that forward, and 
that risk would grow.
    Mr. Forbes. One of the other things, Admiral Burke, that we 
have looked at is in the fiscal year 2012 budget submission, 
the decision to place maritime prepositioning squadron forward 
deployed to EUCOM [U.S. European Command] and to reduce 
operating status in Jacksonville, Florida. And I know you have 
been actively involved in this planning. In the fiscal year 
2013 budget submission, the Navy proposed going a step further 
and placing that squadron into a strategic reserve. Can you 
discuss the current COCOM [combatant command] requirements for 
maritime preposition stocks and the analysis behind that 
proposal in fiscal year 2013?
    Admiral Burke. Yes, sir, I can. We did this analysis 
jointly with the Marine Corps in the summer of 2010, and it was 
a proposal by my organization at the time in the N4 to put the 
one MPS [Maritime Prepositioning Ship] squadron into reduced 
operating status because we felt that it was in excess of the 
requirement. As I mentioned, we did the work with the Marine 
Corps and then briefed it to the Commandant, the CNO and the 
Secretary of the Navy, and they concurred. And as General Amos 
testified the other day in front of the SASC [Senate Armed 
Services Committee], he said he agreed with two squadrons, felt 
like that was the right answer, agreed with the analysis, and 
as long as we enhanced the other two. And we are enhancing the 
other two squadrons.
    Additionally, you asked about the COCOMs. The affected 
COCOMs, EUCOM, PACOM, AFRICOM [U.S. Africa Command], have all 
recently testified that they agree with that number of two 
enhanced maritime preposition squadrons.
    So I think that answers your question. Did I miss 
something, sir.
    Mr. Forbes. No. But the only question I would have, 
TRANSCOM [U.S. Transportation Command] actually testified that 
they haven't done the assessment yet. At least that is what I 
understood.
    Admiral Burke. I don't know whether TRANSCOM has assessed 
it or not.
    We will not get rid of any ships as a result of this. So 
the ships that are no longer required will go into the surge 
sealift, and so they will be available.
    Mr. Forbes. I think the big concern they have, we are doing 
this at the same time we are having a reduction in our 
strategic lift as well, and they just haven't done that 
analysis yet to see if they can handle all that at the same 
time.
    Admiral Burke. And we are not reducing our ready reserve 
force or our sealift. The timelines for the plans allow the 
gear that would be transshipped to go via ship.
    Mr. Forbes. Admiral Architzel, what are your concerns about 
naval aviation readiness, and how do we measure it?
    Admiral Architzel. Mr. Chairman, my risks really are 
framed----
    Mr. Forbes. I don't know if your microphone is on or not.
    Admiral Architzel. Mr. Chairman, my risks are framed in my 
opening discussion when I talked about the transition to new 
platforms. As we go forward, we have historically seen new 
platforms come in and the maturity and understanding what it 
takes to sustain those aircraft as we come forward. So that is 
one aspect of understanding what will be in the future and what 
holds.
    The second aspect of concern is in our--as we continue to 
operate at an increased OPTEMPO, we are taking service lives of 
our legacy platforms well beyond what was originally 
envisioned. For example, in our legacy Hornets we have a 6,000 
service life on them. We are going to take them out towards 
10,000 hours, through a very rigorous engineering analysis and 
studies go forward.
    But there are risks with that as we continue to burn down 
and burn at a higher OPTEMPO. I think that is where we have to 
be mindful of that balance between what it takes to sustain our 
fleet out there.
    We mentioned how do we measure it, and I will tell you that 
following the CNO's guidance we have looked at and everything 
we do to do first and foremost, are we taking warfighting 
aspects first, are we looking at operating forward, are we 
looking at being ready. And we do that through a series of 
metrics that we use for ready for tasking for our basic 
airplane and our mission-system-capable aircraft to go forward.
    We have to balance that against what you can see in the 
very good question raised before about our MC, mission-capable, 
and FMC rates. So, that is telling you that in a day, in every 
hour of the day, we are working on our airplanes, and it is 
telling you we are having to have just a continual amount of 
work done to maintain those jets so that when that launch comes 
in the morning, it has the right capability with the right-
trained aviator in the right capability with the right weapon 
system to go and do the mission which we are doing today day in 
and day out.
    The risk that I see as we maintain this OPTEMPO going 
forward, we have to ensure we can sustain the funding to allow 
us to have this in place. You talked before, and this committee 
talked about, what are the risks across the board if you were 
to curtail funding. I will tell you, sir, that we have--in 
aviation we match to our rotational forces as we go forward in 
our readiness plans to have a tiered readiness. We have a 
certain readiness level when you are back from deployment, as 
you work your way through, and as you go on deployment, and it 
is important that we maintain that posture. And if it were to 
come down to reducing those funding levels, then we would also 
be stressed in terms of what our ability is to--we would not 
sacrifice our wholeness forward. What would happen is we would 
have more pressure on what is in the early stages of work-ups 
and deployments--work-ups to a deployment, for example, or 
additional pressure on what we put through our depots, because 
that would be an area we would take additional risks, but not 
at the expense of our wholeness forward.
    Mr. Forbes. We only have a couple minutes before they are 
going to call a vote. You have been very patient. We don't want 
to hold you over after that vote. So I have a series of 
questions that I would like to just submit to you for the 
record to get in the transcript. If you don't mind, I will do 
that.
    I just have one final question. We know there was a 
shortfall in terms of our projected fuel costs and what the 
actual fuel costs were of a fairly substantial number, about 
$939 million. Admiral, you addressed this a little bit in one 
of your previous answers. But when we look at this kind of 
shortfall, what could be the potential impact of that on any of 
your operations or your budgets? And I know we don't know what 
that is going to be. But, Admiral McCoy, could we start with 
you? And I would just love any of your feedback on that.
    Admiral McCoy. It is particularly tough on us in an 
execution year, particularly midway through an execution year. 
There are only so many levers that have you to pull. And so 
primarily they would affect the readiness account. So you would 
see less steaming days for nondeployed ships; you would see us 
curtailing buying spare parts, which impacts readiness; and you 
would likely see some intermediate maintenance reduced due to 
material costs and things like that. So we would go through a 
series of things that do affect readiness to pay that midyear 
bill.
    Admiral Architzel. The answer is similar on the aviation 
side, Mr. Chairman. The year of execution dollars, we would 
have to look to curtail flying hours for those not deployed 
forward, not warfighting first, with an emphasis on warfighting 
first, and we would also look where we could to available 
forces--or execution of sources, which would be in our depots, 
for example, and potentially take a higher backlog, accept 
that. Because we could take that risk because it is in 
execution dollars.
    Mr. Forbes. Is there anything that you guys would like to 
add or clarify from anything up to this point before we close 
out the hearing?
    Admiral Architzel. Mr. Chairman, if I could, I would like 
to just add that today as we go forward, you ask about risk, we 
have things that are in there for our legacy aircraft; for 
example, our AV-8Bs and our P-3s as we go forward, even our 
legacy Hornets, well past their service lives.
    It is very critical that I maintain a robust aviation 
support account, because that is my engineering and logistic 
that allow me to take on things that I don't know what is going 
to happen with those aircraft as they get further and further 
past their service life. So I would just say if there is an 
area to look at would be as we submit our aviation support 
account, that we realize it is crucial to maintaining those 
legacy platforms as we go forward.
    Thank you, sir.
    Mr. Forbes. Admiral McCoy, anything else?
    Admiral McCoy. No, sir, but thank you for the support of 
the committee and the staff.
    Mr. Forbes. Admiral Burke.
    Admiral Burke. Nothing from me, sir. Thank you.
    Mr. Forbes. Well, gentlemen, thank you so much for your 
patience. And we made it so we didn't have to delay. And thank 
you very much for your service. We are adjourned.
    [Whereupon, at 11:24 a.m., the subcommittee was adjourned.]
      
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                            A P P E N D I X

                             March 22, 2012

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

              PREPARED STATEMENTS SUBMITTED FOR THE RECORD

                             March 22, 2012

=======================================================================
      
                   Statement of Hon. J. Randy Forbes

               Chairman, House Subcommittee on Readiness

                               Hearing on

                      The Navy's Readiness Posture

                             March 22, 2012

    I want to welcome all of our members and our distinguished 
panel of experts to today's hearing that will focus on the 
``Navy's Readiness Posture'' in the context of the fiscal year 
2013 budget request.
    I welcome this discussion and the opportunity to dive into 
the details of the Fiscal Year 2013 President's Budget 
submission for the Navy Readiness accounts. First and foremost, 
I commend the Navy for its sustained focus and improvements to 
surface ship maintenance led by the Surface Maintenance 
Engineering Planning and Procurement Activity. The rigor that 
has been introduced into the process facilitates a more 
comprehensive, standardized, and accurate assessment of fleet 
maintenance requirements and requisite investments in the 
operation and maintenance accounts.
    In the next few years, we look forward to seeing the full 
impact of actions taken as a result of the Balisle report, but, 
the indications are positive and progress has been steady and 
measurable in that short period of time.
    Meanwhile, naval aviation has remained relatively 
constant--with a level aircraft inventory and steady 
maintenance requirements. However, in the FY13 request, I am 
concerned that we decreased the funding in this account from 
FY12 levels by $36 million--resulting in a backlog of 74 
airframes and 170 engines. We recognize the challenge the Navy 
has in balancing the maintenance requirements for both new and 
aging systems in its inventory, and the logistics tail 
associated with parts availability. The Readiness trends for 
full mission capability rates suggest less-than-satisfactory 
performance, but, I look forward to discussing that later in 
the context of this hearing to garner a greater insight into 
the rates reflected in the most recent quarterly readiness 
report.
    Despite relatively level funding, I remain concerned that 
we are robbing Peter to pay Paul. The Navy has been operating 
in a sustained surge for the past few years. We have been 
burning out our ships more quickly because the demand has been 
high. The strategic pivot to the Pacific would result in 
continued, if not increased demand for these assets in a 
maritime environment. And, the FY13 budget request includes an 
increase in ship operations to 58 steaming days per quarter for 
deployed units and 24 for nondeployed units with base and OCO 
funding.
    In my estimation, this situation does not lead one to 
logically conclude that it is an appropriate time to retire 
additional assets, particularly when the existing force 
structure only satisfies 53% of the total Combatant Commander 
demand in FY12. Yet, the Navy proposed a top line of 285 ships 
this year, and possibly through 2017. And, Secretary Panetta 
said it is his ``hope to increase the fleet to 300 ships.''
    The Navy already anticipated the retirement and 
deactivation of 16 ships in FY13. However, with this budget, 
the Navy announced its proposal to retire an additional 2 
amphibious ships and 7 cruisers, 6 of which lack ballistic 
missile defense capability, across FY13 and FY14. Excluding the 
USS Port Royal, the committee has estimated that the 
approximate cost to upgrade the assets and sustain them in each 
respective fiscal year would be $592 million in FY13 plus an 
additional $859 million in FY14. While only an estimate, the 
cost to retain those 8 assets is significantly cheaper than the 
price for one new destroyer, for example, at more than $2 
billion.
    Admiral McCoy, last year before this very subcommittee, you 
stated that ``the cheapest way to afford our Navy with the 
force structure that we need is to maintain the ships we 
already have.'' And, the age of these ships is well before the 
35- to 40-year expected service life. The cruisers proposed for 
retirement have approximately 13-15 years of expected service 
life remaining, and the amphibious ships have approximately 13-
18 years remaining. So, why would the Navy propose to reduce 
the fleet size at a time when all trends indicate that demand 
is increasing?
    We do not expect the budget to get any better, and in fact, 
reflecting on the unfunded requirements in FY12, I know that 
the Navy is now forced to deal with an additional $939 million 
shortfall due to the difference between the Department's 
projected fuel cost and actual costs. I look forward to hearing 
how you will deal with that bill. I recognize that the Navy is 
a consumer of the fuel and does not dictate the prices. 
However, that amount is not inconsequential, and it wreaks 
havoc during the year of execution--regardless of your budget 
posture when presenting it to Congress for consideration. Put 
into perspective, the cost of that shortfall would cover 
approximately 65% of the amount required for upgrading the 
cruisers and retaining the amphibs proposed for early 
retirement in FY13/14.
    In my estimation, the proposal to reduce force structure at 
a time when the demand for naval assets is increasing creates a 
risk that I am not prepared to accept. It is a proposal that is 
fraught with danger and will not only degrade the readiness of 
our forces, but will burn out the assets we have even more 
quickly while reducing availability to support combatant 
commander demands.
    Let me be very clear. I will oppose any initiative that 
seeks to undermine the preeminence of our military, I will 
oppose any effort that breaks faith with our service members 
and veterans, and I will oppose any effort that seeks to 
diminish the capabilities of our naval forces. Speaking for 
myself, and what I believe is the majority of Americans, our 
Nation cannot afford additional reductions in our military.
    As to the request that is before our subcommittee this 
morning, I look forward to better understanding the reason the 
Administration believes that the Navy can do more with less. In 
my initial assessment of this issue, I believe that not only is 
our current force structure insufficient, but the future 
reductions of fleet assets with approximately 40% of their 
service life remaining compromises military readiness for the 
future.
    Joining us today to discuss the Navy's readiness posture 
are three distinguished gentlemen:

         LVice Admiral William Burke, the newly 
        appointed Deputy Chief of Naval Operations, Warfare 
        Systems;

         LVice Admiral Kevin McCoy, Commander, Naval 
        Sea Systems Command; and

         LVice Admiral David Architzel, Commander, 
        Naval Air Systems Command.

    Ladies and Gentlemen, thank you all for being here. 

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

      
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              WITNESS RESPONSES TO QUESTIONS ASKED DURING

                              THE HEARING

                             March 22, 2012

=======================================================================
      
              RESPONSE TO QUESTION SUBMITTED BY MR. FORBES

    Admiral Burke. Navy priorities require realignment of funding to 
retain and modernize, maintain, man, and equip the seven CGs proposed 
for retirement. The original PB 12 modernization fielding plan included 
USS COWPENS (CG 63) and USS GETTYSBURG (CG 64) in FY13; USS CHOSIN (CG 
65) and USS HUE CITY (CG 66) in FY14; USS VICKSBURG (CG 69) in FY15; 
and, USS ANZIO (CG 68) AND USS PORT ROYAL (CG 73) in FY16. Except for 
CG73, at the time the decommissioning decision was made, none of the 
six cruisers scheduled for decommissioning were scheduled for BMD 
installations. The department estimates the cost to modernize the six 
(6) Cruisers with BMD capability, excluding the USS PORT ROYAL, to be: 
$306.9M for CG 63 and $269.8M for CG 64 in FY14; $383.5M for CG 65 in 
FY14 and $275.1M for CG 66 in FY15; $363.2M for CG 69 in FY15; and 
$275.1M for CG 68 in FY16. The total modernization cost to upgrade the 
six (6) Cruisers with BMD capability is $1.9B. Modernization is funded 
and executed via a four year phased approach for procurement, 
installation, and testing. Equipment is procured two years in advance 
of installation with testing completed the year following availability 
completion. The modernization costs provided are a consolidation of 
procurement, installation, and testing.
    Additionally, the current Cruiser ACB12 configuration will not 
support BMD capability without significant RDT&E expenditure. There is 
currently no ACB Aegis baseline developed for CG BMD 5.0 capability. 
The R&D estimate to develop an Aegis baseline to enable the Cruisers 
with BMD capability is $250M.
    The ongoing recurring maintenance cost for the seven (7) Cruisers 
scheduled for decommissioning is estimated to be $1.2B across the FYDP. 
The estimated cost per ship is as follows; $168.9M for CG 63, $116.3M 
for CG 64, $147.3M for CG 65, $142.6M for CG 66, $186.2M for CG 68, 
$194.7M for CG 69, and $204.7M for CG 73.
    The department estimates overall cost to retain and modernize, 
maintain, man and equip the seven CG's proposed for decommission as 
non-BMD assets is $4.1B. Specifically, modernization (non-BMD) and 
superstructure cracking repair comprises $1.7B. Additionally, ongoing 
recurring maintenance totals $1.2B. Finally other costs for additional 
MH-60 helicopters, C4I standalone upgrades, and MILPERS totals $1.2B.
    To enable the CGs with BMD capability, $250M RDT&E to develop an 
Aegis baseline and $55M per ship for hardware procurement are required 
in addition to the $4.1B.
    $3M per ship is programmed for the decommissioning and disposal of 
each vessel. To retain the 7 CGs as Out of Commission, In Reserve 
(OCIR) assets in maintenance category B would cost approximately $150K 
per ship/yr. Maintenance category B vessels receive a standard 
inactivation (dehumidification and cathodic protection) to prepare them 
for long term storage and potential future reactivation. To maintain 
the vessels in a higher state of material readiness, and potentially a 
faster reactivation, a full inactivation, as defined in OPNAVINST 
4770.5G, could be performed. A full inactivation includes the standard 
inactivation plus pre-inactivation ship overhaul and dry-docking. Full 
inactivation would cost approximately $50-100M per ship depending on 
the material condition of the vessel at the time of decommissioning. 
[See page 21.]
                                 ______
                                 
             RESPONSE TO QUESTION SUBMITTED BY MS. BORDALLO
    Admiral Burke, Admiral Architzel, and Admiral McCoy. The chart 
below describes the cost, efficiency gain, and simple payback period 
for Navy operational energy projects to be installed on platforms in 
FY13. Total Navy funding for these initiatives in FY13 is $17.4M. 
Initiative Cost Per Ship Install ($000s) Efficiency Gain (Bbls/ship/
year) Simple Payback Period (years) Energy Dashboard 500 2,179 1,025 
1.0 Solid State Lighting (LHD/LSD) 370 100-500 12.3/24.5 Combustion 
Trim Loop 850 >3,048 1.6 Intelligent HVAC&R (MSC) 2,400 >4,000 4.0
    Aside from reduced fuel consumption, some initiatives also result 
in Total Ownership Cost (TOC) reductions from decreased maintenance 
requirements. For example, solid state lighting (SSL) reduces energy 
draw and thus lowers fuel consumption, but the SSL bulbs also last much 
longer than conventional bulbs and decrease maintenance costs by 
reducing the number of light bulb replacements necessary from 
comparable usage.
    Navy RDT&E efforts in FY13 include the following initiatives. 
Payback periods are estimated. Initiative Cost Per Ship Install ($000s) 
Efficiency Gain (Bbls/ship/year) Simple Payback Period (years) DDG-51 
Hybrid Electric Drive 11,000 5,491 12.5 Smart Voyage Planning Decision 
Aid 9,100 (fleet-wide) >250,000 bbls/year (fleet-wide)
    With respect to alternative energy sources, the Navy is funding the 
Alternative Fuel Test & Certification program at $11.1M in FY13. As a 
result of this program, the Navy will be able to use drop-in 
alternative fuels when they become price competitive with petroleum 
fuels. Alternative fuels have the potential to assure the Navy of a 
domestic supply of fuel and ease budgetary pressure from volatile 
petroleum markets. [See page 13.]
                                 ______
                                 
              RESPONSE TO QUESTION SUBMITTED BY MR. SCOTT
    Admiral Architzel. The CNO goals for Full Mission Capable (FMC) and 
Mission Capable (MC) for deployed and non-deployed units are 61 percent 
(FMC deployed); 51 percent (FMC non-deployed) and 78 percent (MC 
deployed); 68 percent (MC non-deployed). These goals have not changed 
for the past 20 years. [See page 14.]
?

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


              QUESTIONS SUBMITTED BY MEMBERS POST HEARING

                             March 22, 2012

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

      
                   QUESTIONS SUBMITTED BY MR. FORBES

    Mr. Forbes. Last year before the Senate, you indicated that the 
Navy was on track to increase manning at its Regional Maintenance 
Centers by 400 additional sailors and 385 civilians across the FYDP. Is 
that plan still in place? If so, what do you expect will be the impact 
of that investment?
    Admiral Burke. To begin the restoration of intermediate level 
maintenance capacity and capability on the waterfront, Navy is 
implementing the approved FY12 budget increases to the Regional 
Maintenance Centers' (RMC) military and civilian manning. The FY12 
budget approved 400 additional RMC Sailors: 285 in FY12, and 115 in 
FY13. In addition, the RMCs were approved to increase 385 civilian Full 
Time Equivalent (FTE) in FY12 over their FY10/FY11 levels.
    Increased capacity and capability at our RMCs will ultimately 
result in improved readiness of the Fleet. Ships and submarines should 
experience a quicker turnaround to receiving intermediate level 
support, so equipment downtimes will be reduced. Additionally, Sailors 
attached to RMCs will learn valuable skills such as the ability to 
self-assess, identify, and even correct maintenance issues that are 
typically more complex, and require a higher level of experience than 
those routinely performed at the organizational level. When these 
Sailors return to the Fleet, they will bring this invaluable knowledge 
and skill-set with them, and the readiness of the ships and submarines 
to which they are attached will consequently increase.
    Mr. Forbes. Currently, the Phalanx Close-In Weapons System (CIWS) 
is the primary system for almost all Navy surface combatants for 
terminal self-defense and is also used for countering multiple fast 
surface craft and slow moving aircraft. In 2010, then-CNO Admiral Gary 
Roughead stated that a ``seven-year overhaul cycle provides the most 
efficient path to maintaining operational availability.'' He went on to 
say that the Navy's assessment was that 36 overhauls per year would be 
needed starting in FY12. Given the fact that the FY12 budget only 
included eight overhauls and the current FY13 President's budget 
request again only includes eight, how does the Navy intend to address 
this shortfall?
    Admiral Burke. The CIWS OM&N budget doesn't fund 36 overhauls per 
year because an alternate solution (CIWS 20 year RM&A roadmap) has been 
implemented since the Navy's assessment in 2010. This alternate 
solution reduces the requirement to 20 overhauls per year. Given 
competing priorities, the CIWS budget ramps up to 20 overhauls per year 
in FY16. The eight overhauls per year in FY12 and FY13 and the ramped 
approach to achieve 20 overhauls per year in FY16 provides an 
acceptable risk level to CIWS operational availability.
    Mr. Forbes. With the decreasing fleet size and expanding 
requirements, particularly with the pivot to the Pacific, what share of 
COCOM requirements is the Navy unable to fulfill? What is the risk of 
not meeting these requirements? How is the risk of these shortfalls 
being mitigated? How does the Fleet Response Plan enable the Navy to 
plan and prioritize to meet these requirements? What risks is the Navy 
taking in core requirements in order to fulfill COCOM requirements?
    Admiral Burke. The Navy does not source every Geographic Combatant 
Commanders (COCOM) request for forces, but continues to source 100% of 
Global Force Management (GFM) adjudicated requirements. Navy sourced 
59% of COCOM requests for FY11 and 58% of COCOM requests for FY12 as of 
11 April 2012. COCOMs are encouraged to ask for any forces they feel 
would be beneficial to achieve their theater objectives. This demand 
signal is not constrained by force provider inventory, National Defense 
Strategy, or other COCOMs demands. With the request, the COCOMs also 
provide a risk assessment if the requested forces are not sourced.
    The Joint Staff led GFM process balances competing COCOMs demand 
with the available resources and priority requirements. GFM allows the 
Secretary of Defense (SECDEF) to make risk-informed decisions to align 
U.S. military forces and capabilities against strategic objectives. The 
Fleet Response Plan (FRP) is the Navy's force generation model that 
balances the employability of the Fleet contrasted against meeting 
expected service life (maintenance and modernization) and training 
requirements. The FRP generates a trained and ready force available for 
SECDEF allocation to the Combatant Commanders. The FRP does not enable 
the Navy to plan or prioritize the COCOM requirements.
    Naval forces are rotational in nature and are trained in 
expectation of deploying to fulfill COCOM requirements. When naval 
forces are deployed at a sustainable rate, the core requirements of 
maintenance and training are balanced against the COCOM requirements. 
When naval forces are ordered to fulfill COCOM requirements at an 
unsustainable rate, maintenance and training are sacrificed to generate 
COCOM presence and there is an increased risk of not reaching expected 
service life.
    Mr. Forbes. The Navy, in its FY12 budget submission, made the 
decision to place a Maritime Prepositioning Squadron (MPSRON) forward-
deployed to EUCOM into a reduced operating status in Jacksonville, FL. 
In the FY13 budget submission the Navy has proposed going a step 
further and placing that squadron into a strategic reserve. Did the 
analysis underlying this decision take into account other strategic 
lift reductions being made by TRANSCOM and the possible cumulative 
effects on the combatant commanders' ability to successfully prosecute 
their missions?
    Admiral Burke. The affected COCOMs; PACOM, CENTCOM, EUCOM and 
AFRICOM recently testified that they could accept moving the five 
remaining MPSRON ONE ships from prepositioning to the surge sealift 
fleet in a five day readiness status on the U.S. East Coast. It should 
be noted that this transfer results in no sealift capacity being lost 
by this decision and in fact increases TRANSCOM's capability and 
capacity because surge sealift ships can often be loaded with more 
cargo than prepositioning ships (since the weather deck is not 
available for rolling stock on ships in afloat prepositioning).
    Mr. Forbes. In FY12, the DOD programmed a $131 per barrel rate for 
fuel and that rate has since increased to approximately $165 per 
barrel. This creates a shortfall of $687 million in the base budget and 
$252 million in the OCO account for a total of $939 million. What 
options are being considered to pay for this shortfall? And, how soon 
will the decision have to be made?
    Admiral Burke. This shortfall will be funded through reprogramming 
actions, below threshold realignments, or curtailment of operations. 
The Navy anticipates a reprogramming prior to the OMNIBUS to cover a 
portion of the shortfall.
    Mr. Forbes. Given issues with the efficacy of current computer-
based training raised by GAO, the Naval Inspector General, and the 
Balisle report, how has the Navy improved off-ship training for Navy 
personnel to ensure that sailors arrive at the ship with the necessary 
skills?
    Admiral Burke. The Navy is reinvigorating school house training 
through new/revised courses, instructor manpower increases, and updated 
equipment to facilitate more hands-on training, all aimed at improving 
off-ship training for Navy personnel to ensure that Sailors arrive at 
the ship with the necessary skills.
    Coincident with the publication of the Navy Inspector General 
(2009), Balisle (2010), and the GAO (2011) reports there was a paradigm 
shift in the way the Fleet trains Sailors. Dissatisfaction with surface 
Force training at multiple echelons throughout the Fleet prompted 
Commander, U.S. Fleet Forces (USFF) to initiate an internal review. In 
2010, Commander, Naval Surface Forces Atlantic (CNSL), under USFF 
direction conducted the Surface Force Readiness Review which resulted 
in a fundamental shift in training emphasis and methods. Whereas the 
previous emphasis was placed on self-training methods with tools like 
Computer Based Training (CBT), the Fleet's revised approach stresses 
instructor based training.
    This new focus produced a series of training initiatives to ensure 
our Sailors are provided with the tools, training and time needed to 
prepare them to deploy with confidence in their ability to accomplish 
the mission assigned. Achievements include:
      Moved from individual self paced CBT to group paced IMI 
(Interactive Multimedia Instruction) which blends instructor led 
training with interactive supporting technology curriculum
      Increased A School length, improved course content and 
allowed for follow-on C School remediation as required
      Improved the quality of Advanced Warfare Training (AWT) 
on the waterfront by providing technicians and operators in-depth, 
hands-on training of weapon employment and system maintenance through 
additional instructor billets and high fidelity shore based trainers
      Modernized and implemented a new instructor training 
pipeline to provide instructors with the skills and techniques to 
successfully teach in the computerized classroom learning environment
      Instituted surface division officer introduction course 
in Fleet concentration areas and renewed the Senior Officer Ship 
Material Readiness Course (SOSMRC)
      Conducted front end analysis of 26 separate ``A'' schools 
to determine the best methods of training delivery for Sailors
      Reviewed the Navy System Training Plans (NTSP) process to 
document Fleet technical training requirements ensuring updated 
technical training equipment matches current Fleet systems and is 
available at off-ship training centers for hands-on instruction
    In conclusion, after an extensive internal review, the Navy has 
refocused its efforts toward achieving a more balanced approach to off-
ship training for Navy personnel to ensure that Sailors not only arrive 
at the ship with the necessary skills but more importantly to ensure 
the Fleet maintains, refreshes and builds on those skills throughout 
the Fleet Training Continuum.
    Mr. Forbes. Based on the findings of the Balisle report, the Navy 
plans to take a number of actions in many interrelated areas, such as 
training, maintenance, command and control, manning, etc. What's not 
clear, however, is who will be responsible for making sure the actions 
are coordinated and implemented. To avoid the problems of the past 
where the Navy wasn't looking at things holistically to see whether the 
changes it was making were compatible and did not have unintended 
consequences, the Navy will need to make accountability clear and have 
some kind of integration mechanism across the areas, whether it be one 
senior-level official who is the focal point supported by an 
interdisciplinary group or another approach.
    How does the Navy intend to proceed from here in taking corrective 
actions, including establishing leadership and organizational 
accountability? Will the new N9 position play a role in streamlining 
that organizational accountability?
    Admiral Burke. The Deputy Chief of Naval Operations for Warfare 
Systems (N9) is responsible for the integration of manpower, training, 
sustainment, modernization, procurement and readiness of the Navy's 
warfare systems. The establishment of the new N9 position will improve 
coordination and the decision-making processes associated with 
planning, programming, budgeting, and execution with a particular focus 
on warfighting capability and total ownership cost thereby, enhancing 
the Navy's ability to navigate its fiscal challenges and deliver fleet 
and platform readiness, while aligning responsibility and 
accountability to develop and sustain the Navy's warfare capability and 
capacity.
    Mr. Forbes. What are your concerns about Navy Readiness?
    Admiral Burke. To sustain the higher demand to the extent feasible, 
Navy remains dependent upon the receipt of Overseas Contingency 
Operations (OCO) funding or similar supplemental appropriations to 
include continuing requirements beyond the end of Operation Enduring 
Freedom. I am concerned how we will stay the course on depot 
maintenance, especially of surface ships, should we lose OCO funding.
    One significant concern over the last several years has been the 
readiness of our surface ships. The FY13 Navy budget request funds ship 
maintenance at an adequate level and reduces surface ship maintenance 
backlog during mid-life availabilities. Reaching expected service life 
requires an integrated engineering approach to plan, fund, and execute 
the right maintenance. Navy has taken significant steps to better 
define the maintenance requirement necessary to improve surface ships 
material readiness and achieve expected service life. We have also 
increased the number of technically skilled sailors at sea, and both 
military and civilian staffing in our Regional Maintenance Centers. 
These steps will have a positive impact on surface ship readiness over 
the next several years.
    In the near term, we have taken risk in the time available for 
maintenance and training to deploy the maximum number of units forward. 
While overall readiness remains at acceptable levels, this stress on 
the force has been reflected in negative readiness trends in personnel, 
material and training readiness metrics. It also impacts our capacity 
to surge for emergent requirements.
    Over the long term, continued operations at this pace will impact 
the service life of our platforms, placing future force structure and 
readiness at risk. We are working within the Department to re-establish 
a sustainable level of operations as circumstances permit, while also 
taking steps to enhance our forward operations in support of the 
Combatant Commanders, such as the forward stationing of four BMD-
capable DDGs in EUCOM.

    Mr. Forbes. Can you please comment on the Navy Aircraft Full 
Mission Capability Rates. The most recent Quarterly Readiness Report 
reflects a full mission capable rate of 35 percent mission capable 
rates (60 percent target rate) for deployed units, and approximately 30 
percent for non-deployed units (50 percent target). Why has that trend 
not improved over the past 2 years?
    Admiral Architzel. Fully Mission Capable (FMC)/Mission Capable (MC) 
rates for deployed units have declined by 7% and 3%, respectively over 
the past two years, and these rates are generally below the CNO-stated 
goal of 61 percent for deployed units. This level of FMC readiness, 
while not optimum, is currently manageable considering that our 
deployed aircraft have been operating at more than 150 percent of 
normal deployed flying hours in support of Combatant Commanders' 
mission requirements.
    Naval Aviation has successfully generated sufficient sorties to 
meet those mission needs, and these aircraft must be maintained 
continuously throughout deployment to maintain mission systems and for 
safety of flight. Two major factors that drive the amount of 
maintenance are operating cycles--launches and recoveries--and flight 
hours. It is important to recognize that in order for FMC rates to meet 
goal, a full suite of aircraft weapons systems needs to be installed 
and maintained to remain functional for a higher percentage of the 
time. FMC, as well as Mission Capable (MC) rates, are carefully and 
precisely measured through aircraft equipment operational codes (EOC 
Codes); in order to be FMC, an aircraft must have a full suite of 
functional systems installed. In many cases, aviation units can fulfill 
their assigned mission without having FMC aircraft. Because of high 
aircraft demand and resulting limited maintenance time, the choice is 
sometimes made to defer repair of a mission capability that is not 
needed for current tasking, reducing the availability of airframes and/
or mission systems. This drives down the FMC rates, even though the 
deployed unit is fully meeting the Combatant Commanders' specific 
mission requirement at a much higher demand signal than normal.
    Mr. Forbes. What flexibility do you have at the Fleet Readiness 
Centers to deal with obtaining obsolete parts? Specifically, are there 
instances where obsolete parts preclude assets from getting back into 
the fleet due to lack of availability and the amount of time required 
to procure? Does FRC have any ability to be the first source of supply 
to organically design and produce items in small batch quantities at 
cost-effective prices to improve the readiness? And, what are examples 
of such parts that particularly challenge the system?
    Admiral Architzel. The Fleet Readiness Centers (FRCs) routinely 
contend with parts issues that are the result of obsolescence in the 
logistics system as a whole. Legacy aircraft, engines, and components 
have parts that for various reasons may no longer exist in the supply 
system and the Original Equipment Manufacturer (OEM) for those parts is 
either out of business or out of that line of manufacturing. If the 
part in question is seldom needed, a process exists for the FRCs to 
manufacture one for that instance alone, referred to as a ``one time 
manufacture.'' Each of these parts is assessed and approved by 
engineering as safe for flight. These parts may even be built from the 
sample alone. It is a rigorous process that guarantees a sound part. If 
the part is one that is needed in quantity, the FRCs can follow their 
``alternate source'' process to validate a sound process for producing 
a safe for flight part. The FRC may then manufacture the item in 
quantity for the Defense Logistics Agency (DLA) or Navy Supply Weapons 
Systems Support (NAVSUP WSS). Both of these processes take time, but 
are the fastest way to get parts to process the end items.
    Repairs to aircraft, engines, and components are delayed due to 
non-availability of these parts in the supply system. Typically, the 
trigger for an FRC to be established as an alternate source is after we 
have learned the part is non-existent in the normal logistics system, 
i.e. an aircraft, engine, or component is already waiting for a part.
    The FRCs have a full range of capabilities for the manufacture of 
parts. Engineering, logistics and a robust manufacturing capability 
exist on-site. If DLA/NAVSUP WSS can find no vendors, and if the 
Department of Defense owns the data rights, the FRC's can build the 
full range of parts or components they are asked to build. Drawings can 
be created from samples (damaged parts) when the drawings do not 
otherwise exist. Note: the data rights to a part are often an issue. 
While the FRC's have the capability of designing parts, they usually do 
not do that for existing aircraft, engine, or components that the OEMs 
own the data rights and designs. However, for program-sponsored 
aircraft modifications, the FRCs routinely design parts and build them 
for kits when no other OEM or vendor is involved. In these cases NAVAIR 
owns the data rights.
    Mr. Forbes. How will the projected backlog of airframe and engine 
maintenance across both FY12 and FY13 impact aviation readiness and 
training?
    Admiral Architzel. In PB13, there is a $75 million shortfall to 
fully fund the operational requirement of $1.4 billion, resulting in a 
projected backlog of 14 airframes and 273 engine depot requirements. It 
is expected that this backlog will still allow us to meet our flight-
line entitlements for aircraft and will allow us to meet our engine 
readiness goals. Therefore, it is not expected that there will be a 
direct impact on readiness.
    Our Navy Fleet Readiness Centers have the ability to reconstitute 
the projected PB13 backlog within one year, should additional funding 
be available. However, if we do not reconstitute the backlog and 
continue to build a higher backlog, we will begin to impact our flight-
line entitlements and engine readiness goals. Unfunded airframes and 
engines become unusable assets until the maintenance can be performed. 
Larger deficits of airframes and engines can negatively impact 
readiness and training. Specifically:
          Aircraft not worked in FY13 reduce the available 
        assets in FY14 and beyond. Combining these aircraft with those 
        that will come due for maintenance in the future will strain 
        the available inventory of aircraft to meet flight line 
        requirements, will cause above average utilization of remaining 
        assets and increase risk of lost training opportunities and 
        readiness.
          Unavailable equipment puts added risk on inventories 
        to meet future year deployment schedules and reduces the 
        Fleet's ability to surge until equipment is repaired.
          Unworked assets create a cost burden to preserve and 
        store.
          A cost premium is incurred for backlogged items 
        completed in future years.
          Continued reductions in funding will have to be 
        offset through reductions in skilled personnel and capacity 
        putting risk on our maintenance industrial base to support 
        existing force structure and to surge when needed.
    Mr. Forbes. What are your concerns about Naval Aviation readiness?
    Admiral Architzel. At present, Naval Aviation is precariously 
sustained in terms of equipment readiness through the selective use of 
Overseas Contingency Operations (OCO) funding. However, our Fleet 
Readiness Centers and our sustaining engineering and logistics efforts 
have transformed over the past seven years to provide the right level 
of readiness at the right time in the right location at the right cost. 
This emphasis has enabled us to manage the budgetary pressures over the 
past few years and positions us well in the near future to provide 
aircraft and mission systems required to safely and efficiency execute 
Combatant Commander requirements and necessary fleet training. We must 
continue to maintain our legacy systems in the fleet today--many of 
which are long past their programmed fatigue life cycles--and rely on 
our Aviation Depot Maintenance funds to resource aircraft, engine and 
component repair, as well as Aviation Support Program funding to 
provide technical, engineering logistics, and repair support to reduce 
the cost of our most significant maintenance issues and readiness 
degraders. Future reductions in the Aviation Depot Maintenance and 
Aviation System Support accounts will likely begin to impair our 
ability to sustain safe and ready aircraft in the Fleet.
    Mr. Forbes. How are Naval Aviation Depots prepared to deal with 
aircraft and engine depot maintenance backlog in light of tightening 
budgets?
    Admiral Architzel. As required, Navy Fleet Readiness Centers have 
the ability to surge civilian overtime, increase contract touch-labor 
employees, and increase shifts as required to respond to surge 
requirements. It is expected that the backlog planned for in FY13 could 
be reconstituted in less than 12 months, with additional funding. 
Without additional funding, the backlog will carry over into the 
following years until funding is made available to reconstitute these 
aircraft and engines.
    Mr. Forbes. How do you measure Naval Aviation readiness?
    Admiral Architzel. Navy and Marine Corps aircraft are capable of 
performing a variety of missions. A Ready Basic Aircraft (RBA) is the 
minimum day/night, all weather flyable aircraft configuration common 
across all its primary mission areas. Ready for Tasking (RFT) aircraft 
are the required number of RBA aircraft, coupled with specific mission 
systems, which enable squadron aircraft to accomplish the distinct 
mission requirements. These requirements are defined across all phases 
of the Fleet Response Training Plan (FRTP), including deployed 
operations. Due to the wide variety and varying degrees of mission 
complexity, aircraft require different degrees of systems capabilities 
to be mission ready during different phases.
    DOD Instruction 3110.5 dated Sept 2006 requires the Services to 
report the material condition of aircraft using the categories of Full 
Mission Capable (FMC), Partial Mission Capable (PMC), Not-Mission 
Capable (NMC), and Not-Mission Capable--Maintenance or Supply (NMCM/
NMCS). Naval Aviation's automated logistics systems fulfill this 
reporting requirement to ensure the Department has the proper insights 
into material condition. However, unlike FMC/PMC rates, RFT provides a 
more informative aviation readiness metric that supports Naval 
Aviation's FRTP-phased resourcing approach. Because of the different 
training and readiness requirements, and aircraft entitlement required 
to support FRTP when building up for and scaling down from deployment, 
not all aircraft are required to be in a FMC/PMC status at all times 
(i.e., in the early FRTP stages, or Maintenance Phase, aircraft and 
mission systems are `groomed' for deployment and must go through 
various stages of repair and upkeep, thus allowing more aircraft to be 
in a NMC status). In addition, RFT is a more comprehensive metric for 
operational commanders as it is defined for each Type/Model/Series 
aircraft in a manner that is focused on the primary mission areas of 
the aircraft and includes critical factors omitted by FMC/MC such as 
equipment mission sets (ex: FLIR or EW pods). Simply stated, RFT is a 
demand based metric that focuses Naval Aviation on ``the right aircraft 
in the right configuration in the right place at the right time to 
support expected readiness.'' If additional explanation of the RFT 
framework is desired, a face-to-face discussion can be provided by 
Aviation Readiness and Resource Analysis subject matter experts.

    Mr. Forbes. Last year before this Subcommittee, you testified that 
``the cheapest way to afford our Navy with the force structure that we 
need is to maintain the ships that we already have.'' Given the shift 
in focus to the Asia/Pacific region in the new National Defense 
Strategy, it would clearly seem that the demands on our Fleet will 
increase. If that is the case, why did the Navy propose to retire seven 
CGs and two LSDs across FY13 and FY14? Given the fact that these assets 
are approximately 20 years into their 35-year expected service life, 
can you please provide an estimate of the cost to retain those ships in 
the fleet and to make the necessary upgrades in each FY13, FY14, and a 
total cost across the FYDP?
    Admiral McCoy. Higher Navy priorities require realignment of 
funding to retain and modernize, maintain, man, and equip the seven CGs 
proposed for retirement. The original PB 12 modernization fielding plan 
included USS COWPENS (CG 63) and USS GETTYSBURG (CG 64) in FY13; USS 
CHOSIN (CG 65) and USS HUE CITY (CG 66) in FY14; USS VICKSBURG (CG 69) 
IN FY15; and, USS ANZIO (CG 68) AND USS PORT ROYAL (CG 73) in FY16.
    The department estimates overall cost to be $769.5M in FY 13, $1.0B 
in FY 14, and $4.1B across the FYDP.
    The department estimates overall cost to retain and modernize, 
maintain, man and equip the two LSDs proposed for decommission is $293M 
across the FYDP. The FY13 cost for modernization of LSD 46 is $50M. The 
FY14 cost for maintenance and MILPERS is $4.6M. The FYDP total for 
ongoing recurring maintenance totals $73.5M. Finally, the FYDP other 
costs to include MILPERS totals $169M.
    Mr. Forbes. What major initiatives does NAVSEA have that help the 
Fleet remain ready to meet current challenges?
    Admiral McCoy. Numerous initiatives are currently underway to 
reverse the identified negative trends in Surface Force readiness, and 
to ensure our ships achieve their Expected Service Life (ESL). Most 
importantly, Navy has established:
          A surface ship life cycle manager--Naval Sea Systems 
        Command (NAVSEA), Deputy Commander for Surface Warfare (SEA 
        21);
          A Regional Maintenance Center (RMC) Command for 
        waterfront maintenance oversight--Commander, Navy Regional 
        Maintenance Center (CNRMC); and
          A surface ship life cycle engineering agent--Surface 
        Maintenance Engineering Planning Program (SURFMEPP).
    With the establishment of SEA 21 and CNRMC, the Surface Force now 
has organizations in place to manage fleet maintenance and 
modernization. CNRMC leads the development and execution of 
standardized processes, policies, and training at the RMCs, and is 
improving the management of Multi-Ship/Multi-Option private industry 
maintenance contracts. Under NAVSEA's guidance, the maintenance 
philosophy for surface ships now parallels the engineering and life 
cycle processes currently in place for carriers and submarines, which 
traditionally meet or exceed their design service life.
    SURFMEPP reports directly to SEA 21, and will re-establish the 
engineered requirements and Class Maintenance Plans (CMP) necessary for 
surface ships to reach their ESL. Additionally, they are creating life 
cycle maintenance plans for each ship, based on the CMP and actual ship 
condition. As a result, the Navy now has a better understanding of the 
impacts from, and the ability to accurately track, deferred maintenance 
that must be accomplished in the future.
    The Navy is incorporating best practices into how we evaluate and 
improve material condition. We partnered with the American Bureau of 
Shipping (ABS) to help assess the material condition of our surface 
ships. We established the Total Ship Readiness Assessment (TSRA), 
supported by technical experts from the RMCs, to conduct ship material 
condition assessments, and are focusing on development and 
demonstration of new corrosion control technology, materials, and 
processes. Corrosion control assistance teams have also been 
established in each Fleet concentration area.
    The Navy is implementing the approved FY12 budget increases to the 
Regional Maintenance Centers military and civilian manning. To date, 
400 additional Sailors were approved in the FY12 budget: 285 in FY12 
and 115 in FY13. In addition, the RMCs were approved to increase 385 
civilian FTE in FY12 over FY10/FY11 levels.
    These initial investments start to restore capability and capacity 
to the IMAs and support the recent initiatives to improve surface ship 
maintenance. The focus of these initiatives is to bring the surface 
ship maintenance process more in line with the carrier and submarine 
communities, emphasizing adherence to a technically rigorous process, 
early detection and assessment of material issues, and quality service.
    Our goal is to improve the responsiveness and readiness of the 
Fleet to fix and deploy ships on time and on budget. In addition, the 
Navy will benefit by enhancing our Sailors' long-term maintenance 
knowledge and skills.
    Mr. Forbes. Can you describe the actions NAVSEA has taken to 
improve surface ship maintenance?
    Admiral McCoy. Key organizations to manage fleet maintenance and 
modernization have been established:
          Surface Ship Life Cycle Manager--Naval Sea Systems 
        Command (NAVSEA), Deputy Commander for Surface Warfare (SEA 21)
          Surface Ship Life Cycle Engineering Agent--Surface 
        Maintenance Engineering Planning Program (SURFMEPP)
          Regional Maintenance Center (RMC) Command for 
        Waterfront Maintenance Oversight--Commander, Navy Regional 
        Maintenance Center (CNRMC)
    NAVSEA and Fleet stakeholders have undertaken multiple initiatives 
within these organizations to improve maintenance practices across ship 
classes.
    SURFMEPP has been established to reinvigorate surface ship 
maintenance requirements based on disciplined engineering processes 
similar to those used by our carrier and submarine communities. 
SURFMEPP is revising Class Maintenance Plans (CMPs) and guiding 
maintenance requirements through the production of Technical Foundation 
Papers (TFPs) to provide a technical foundation for all maintenance 
requirements across an entire ship class. Further, SURFMEPP is 
generating individual ship life cycle maintenance plans in order to 
deliver Baseline Availability Work Packages (BAWP) that provide an 
integrated package of maintenance and modernization requirements that 
are tracked through execution or technically adjudicated for deferral.
    CNRMC is developing and executing standardized processes, policies 
and training at the Regional Maintenance Centers and has improved the 
management and governance of industry maintenance contracts. 
Additionally, Intermediate level maintenance capacity and capability is 
being restored on the waterfront with appropriate skill-sets to execute 
maintenance in accordance with the Joint Fleet Maintenance Manual and 
provide a journeyman training continuum for Sailors that will improve a 
ships capability to find, fix and document maintenance issues within 
the lifelines.
    CNRMC, NAVSEA and all stakeholders are partnering with the American 
Bureau of Shipping in performing ship material condition assessments 
with commercially proven processes and procedures and are focusing on 
the development and demonstration of new corrosion control technology, 
materials and processes. Further, NAVSEA is establishing executive 
oversight of the Maintenance End-to-End process to provide advanced 
planning, limit growth and new work and manage availabilities within 
allocated funding controls.
    Mr. Forbes. What specific changes have occurred in Submarine 
maintenance?
    Admiral McCoy. In addition to yielding steady improvements in the 
safety, reliability, and material readiness of the existing submarine 
fleet, the Submarine Force continues to pursue reductions in 
maintenance and modernization costs. This is accomplished thru a 
combination of cost-conscious policies and disciplined but aggressive 
engineering studies and analyses. These initiatives are incorporated in 
the 2013 President's Budget (PB13) submarine maintenance budget. Some 
highlights of recent maintenance reductions: The USS LOS ANGELES (SSN 
688) Class 48-month Operating Interval was extended to 72-months 
thereby eliminating one Dry-docking Selected Restricted Availability 
(DSRA) per Operating Cycle for 35 submarines. Additionally, maintenance 
requirements were reduced for 16 other submarine DSRAs in this class. 
The result of the SSN 688 Class engineering study was leveraged for the 
USS VIRGINIA (SSN 774) Class maintenance cycle and permitted an 
extension from a 48-month to a 72-month Operating Cycle.
    These actions have not only reduced maintenance costs; they have 
resulted in increased operational availability of the LOS ANGELES and 
VIRGINIA Class submarines. In addition, the SEAWOLF Class (SSN 21) 
submarine lifecycle maintenance plan was revised to reduce depot time. 
This produced a revised lifecycle maintenance strategy permitting an 
increase of deployments from 12 to 13 for SEAWOLF class submarines.
    Additional maintenance actions have been enhanced including 
improvement to material forecasting, additions to rotatable equipment 
pools to reduce repair turnaround time, implementation of Risk 
Management Policy across all depot maintenance availability projects, 
and improvements to Pre-Availability Testing processes to better define 
work scope.
    The submarine maintenance community continues to aggressively 
pursue opportunities to produce more efficient, lower-cost ways to 
perform maintenance and modernization without compromising safety and 
reliability, and is the model program and process guide for developing 
and generating improvements in the surface ship maintenance area.
    Mr. Forbes. Are the problems that have plagued early fleet 
introduction of the LPD 17 class ships now behind us?
    Admiral McCoy. The quality issues identified during operational 
evaluation, deployments of the initial ships of the class, and the 
Wholeness Task Force are being addressed on all ships across the class. 
The most critical repairs, such as new lube oil filters and engine 
alignment, are being completed on the in-service ships; and further 
repairs/corrections are planned on those ships. Likewise, the critical 
repairs have been implemented on the ships in construction and further 
repairs/corrections will be implemented. Lessons learned include:
    The shipbuilder has revamped its Quality Assurance (QA) processes, 
conducted extensive training, and re-certified appropriate personnel to 
address shortfalls within the QA process.
    SUPSHIP Gulf Coast has increased overall manning by 21 percent 
since 2005, focusing on critical waterfront billets. Quality Assurance 
weld inspectors were required to undergo re-training and re-
certification in critical process areas. ``Critical process pulse 
audits'' were implemented to ensure the shipbuilder maintains 
production quality across the areas of structure, pipe, electrical and 
coatings.
    New lube oil filters were installed and pipe flushing procedures 
were updated to resolve quality issues associated with debris in 
shipboard piping systems.
    Pipe hanger design and engine alignment controls have been 
improved.
    Protection of piping ``in process'' and enforcement of a clean 
environment while engines are open have prevented introduction of 
contaminants.
    Original philosophy of self-paced computer-based shipboard training 
is transitioning to a combination of computer-based and more 
traditional instructor-led life cycle training.
    Shipboard manning level has been increased to permit more time for 
sailors to train on and maintain their systems.
    These improvements in system design and processes are showing 
positive results as demonstrated during the most recent INSURV 
inspections. LPD 21's Final Contract Trials (FCT) in February 2011 was 
the first FCT where INSURV assessed an LPD 17 class ship as ready for 
sustained combat operations. LPD 22, the sixth LPD 17 Class ship, 
successfully completed acceptance trials in November 2011 receiving 
some of the highest grades in the Class and satisfactorily completed 
all in-port and at-sea demonstrations. LPD 22 was the first ship 
delivered using the new Class Build Plan, underwent the most extensive 
pre-delivery test program of the Class to date, conducted three 
underway trials with scope well beyond previous ships, and received 
zero starred cards at delivery.
    Mr. Forbes. What has NAVSEA done to improve first-time quality at 
both industry and in the Government?
    Admiral McCoy. NAVSEA focus for improving quality with our industry 
partners included reshaping the Multi-Ship Multi-Option (MSMO) to 
address fundamental Quality at the deck-plate, utilizing the Award Fee 
Process to incentivize the MSMO to improve first time quality and the 
construct of the MSMO Contract.
    To improve the quality of Government Oversight of our industry 
partners, NAVSEA has released guidance that defines NAVSEA Policy for 
Quality Management of work on non-nuclear surface ship critical 
systems. Specific critical systems for each class of ships are 
identified and include the Main Reduction Gear and associated lube oil 
systems, coupling and clutches as well as Shafting and bearing systems 
and steering systems. Additional propulsion equipment is identified as 
critical systems for each ship class. This guidance requires following 
additional controls:
        (i)   Controlled work package (CWP) or Expanded Process Control 
        Procedures (EPCP) be used for work on critical systems.
        (ii)   Before conducting work on a surface ship critical 
        system, validation by Naval Supervising Authority (NSA) of 
        wholeness of the Quality Management Programs of the 
        Organization responsible and accountable for performing quality 
        maintenance.
        (iii)   Conduct of Readiness to Start Reviews, jointly 
        conducted by NSA with Engineering Field representatives (EFR), 
        Lead Maintenance Activity, Repair Activity, Commander Navy 
        Regional Maintenance Center (CNRMC) and Forces Afloat 
        (Notification is required, participation is optional), prior to 
        work starting on a Surface Ship Critical System.
        (iv)   NSA review of maintenance plans and results with NAVSEA 
        05 and CNRMC prior to starting work and upon completion of work 
        (to include separate notification upon completion of pier-side 
        and at-sea testing) on Main Propulsion Systems on all classes 
        of ships and Surface Ship Critical Systems.
        (v)   NSA formal certification (post work completion) by 
        closeout review.
    Additionally, CNRMC provided interim guidance to Regional 
Maintenance Centers for avail certification and key event management. 
This certification requirement includes the following:
        (i)   TYCOM certification via letter/memo that all authorized 
        CNO Avail/CMAV work identified in the Work Package has been 
        tasked for accomplishment.
        (ii)   Project Management validation (via signature) that all 
        work specifications and test procedures issued by the prime 
        contractor have received a government review.
        (iii)   Project Support Engineer verification (Via Signature) 
        that all Contractor Furnished Reports (CFRs) have been reviewed 
        and answered. All deferred maintenance action and/or test 
        result CFRs have been technically adjudicated.
    NAVSEA efforts to improve first time quality in Naval Shipyards 
include training, work teams, supervision, and budgeting for reduced 
overtime.
    The Continuous Training Development (CTD) Program focuses on 
building the knowledge, skills, and proficiency of the production 
workforce by transitioning from a classroom based system to emphasis on 
practical demonstrations of mechanics skills as a means to drive 
continuous improvement and proficiency. This training is accomplished 
through on-the-job, hands-on instruction on mock-ups, on the deck-
plate, or in shop work environments. It also enables mechanics to 
practice skills on mock-ups to improve proficiency prior to 
accomplishing work on ships or ship components.
    Work teams of production and support (engineering, quality 
assurance, etc.) personnel are being established to foster team 
learning, problem solving and continuous process improvement. These 
teams called Value Streams, Communities of Practice or Product Line 
Management are working together to partner, build relationships and 
improve communication resulting in increased workforce knowledge 
sharing and improved quality.
    Improving supervision is important to achieving first time quality. 
Supervision is being emphasized through supervisory training, 
leadership development, deck plate coaching to bridge supervisory 
training to actual execution for new supervisors, and stressing 
accountability.
    High overtime levels contribute to quality issues. As average 
direct worker overtime approaches 20% across a shipyard, some 
individuals in critical skills will be working 30 to 40% overtime. High 
overtime may be perceived as efficient, but throughput and quality 
actually suffers at this excessive overtime level, therefore lower 
overtime levels have been budgeted to increase the workforce available 
to accomplish the workload.
    Mr. Forbes. What is the impact of not fully funding maintenance on 
the Navy's force structure in the future?
    Admiral McCoy. The FY13 budget submission (baseline, plus OCO) 
fully funds the ship maintenance requirement. The ship maintenance 
requirement is based on class maintenance plans and known deferred 
maintenance. Funding less than the full ship maintenance requirement 
results in deferral of maintenance to future years. Deferred 
maintenance costs more to execute due to the impact of increased 
corrosion and wear, further exasperating future budget shortfalls. If 
not accomplished, repeated deferral of maintenance will result in 
reduced Fleet readiness and shortened service life, ultimately reducing 
force structure.
                                 ______
                                 
                  QUESTIONS SUBMITTED BY MS. BORDALLO
    Ms. Bordallo. Can you comment on how your new role in the N9 
position helps to address some of the serious concerns raised in the 
Balisle report? What are some the immediate impacts or benefits of the 
creation of the N9 position from your vantage point? Also, what 
additional steps or organizational changes are needed to 
institutionalize some of the recommendations in the Balisle report?
    Admiral Burke. Improved fleet readiness is one of the many intended 
outcomes resulting from the creation of N9, answering the primary 
concerns of the Balisle report. By realigning fleet maintenance, 
operations, training, targets and ranges under N9, total ownership 
costs (TOC) will be consolidated and efficiencies can be garnered, as 
appropriate, to ensure the end to end support required to sustain our 
ships and airplanes are properly addressed. By restoring platform-
specific manpower and readiness programming authority to the 
appropriate platform sponsors, the ability to address wholeness issues; 
issues directly affecting the manpower, training, readiness, 
maintenance, and logistics, will reside within a single organization 
that owns that platform. I am confident that the CNO's vision to 
consolidate these function under the N9 are a positive step in 
institutionalizing the recommendations of the Balisle report.

    Ms. Bordallo. I would note that a significant portion of the depot 
maintenance is the OCO accounts. What risk are we assuming by putting 
such a significant portion of this budget in the OCO accounts? As I 
stated in my opening statement, the war in Iraq is over and we are 
going to begin a drawdown of forces in Afghanistan which will 
eventually lead to the OCO account ending. How is the Navy planning to 
fund these critical maintenance requirements in the out-years?
    Admiral Burke, Admiral Architzel, and Admiral McCoy. If Congress 
approves the Navy FY13 baseline and OCO request, the Navy is assuming 
minimal risk in FY13 depot maintenance. The PB13 request provides 
funding for 94 percent of the projected aircraft depot maintenance 
requirements and 100 percent of the projected ship depot maintenance 
requirements. The Navy is working to develop a transition plan to 
address the amount of depot maintenance funded by OCO. The risk in OCO 
funding reliance is that when OCO funding is reduced, there will be a 
need to find maintenance funding elsewhere or reduce the amount of 
maintenance done.
                                 ______
                                 
                  QUESTIONS SUBMITTED BY MR. LOEBSACK
    Mr. Loebsack. The new strategic guidance places greater emphasis on 
the Navy and its current and next-generation aluminum-intensive ships 
(CG-47 Class, LHD-1/LHA-6 Class, FFG-7 Class, LCS Class, LHA-8 Class, 
DDG-51 Flight III, and JHSV). Continued budgetary pressures make the 
affordability of next-generation Navy platforms all the more important. 
Is the Navy embracing or leveraging materials and manufacturing 
technologies to help reduce acquisition costs and ship life cycle 
costs? What partners is the Navy working with to adapt commercial 
technologies to reduce both weight and cost for vessels? Given the rise 
of aluminum-intensive naval platforms, is the Navy seeking to work with 
the domestic aluminum industry to optimize material/product form 
selection, component manufacturing, and ship integration processes?
    Admiral Burke. The Navy is investigating the use of new materials 
to reduce both acquisition and life cycle costs. New materials include 
new tempers of aluminum, aluminum extrusions, and innovative aluminum 
plate materials. For example, proprietary aluminum plates have been 
installed on a cruiser for performance testing. The plates are designed 
to provide better corrosion resistance at the surface while retaining 
the required material properties in the bulk of the material. The use 
of aluminum alloy, 6082, has been used in LCS 2 variant as hollow 
extrusions to replace flat plate with welded stiffeners, for both cost 
and weight advantages.
    Additionally, the Navy has approved cost effective manufacturing 
technologies such as friction stir welding and advanced welding power 
supplies. Friction Stir Welding (FSW) of aluminum has been used on LHA 
6, LCS 1 and LCS 2 variants, JHSV and may be used on Ship-to-Shore 
Connector (SSC). This fabrication technique is used for butt-welding 
flat plate or shaped extrusions in a shop environment. It is a high 
productivity process that results in reduced panel distortion. One 
shipyard doing USN repair work has qualified weld procedures using 
advanced welding power supplies for aluminum ship repair welding. These 
power supplies reduce defects in the welding, and the associated rework 
as well as reduce the training time for aluminum welders to become 
proficient.
    Working with Austal and the Navy, ALCOA has provided aluminum tie 
downs for JHSV. Additionally, the Navy researches and evaluates 
materials to use on ships based on combinations of their performance, 
cost, and weight. Aluminum may be chosen for deckhouses because a 
structure designed with aluminum is often lighter in weight than a 
similar structure designed using steel. Aluminum is susceptible to 
cracking if not properly designed and maintained. Ship repairs and 
maintenance are a significant element of the life cycle cost of a Navy 
ship. The Navy has undertaken initiatives to reduce the cost of 
inspecting and repairing ships. Sensitization describes a metallurgical 
change in alloys resulting in susceptibility to accelerated corrosion 
and stress corrosion cracking. The sensitization level of aluminum on a 
ship is often tested by cutting a test sample and then destructively 
testing it. This is both costly and time intensive. The Navy is 
sponsoring the development of a non-destructive probe by Electrowatch, 
Inc which tests aluminum surfaces for the effects of sensitization 
using an electrochemical process. Additionally, the Navy is developing 
a procedure to inspect metal surfaces in-situ using surface processing 
and high magnification to check material condition. This was made 
possible by the use of an innovative digital microscope manufactured by 
Keyence Corporation. These technologies enable the ships to be 
nondestructively surveyed before work packages are locked, avoiding 
excessive growth on Surface Ship availabilities due to unknown areas of 
sensitized aluminum and support getting our ships to their Expected 
Service Lives. Another manufacturing technology implemented to improve 
repair cost of aluminum is Ultrasonic Impact Treatment (UIT) from 
Applied Ultrasonics, which is a form of peening. Peening adds 
compressive stress to the material. Compressive stress must be overcome 
before cracking can occur. UIT is used to pre-treat moderately 
sensitized aluminum structures before repair. Without this treatment 
these structures would re-crack after repair, and the only repair 
option would be ripout and replacement of the sensitized plate, a much 
more expensive process. This technology is also being investigated for 
integration into new construction processes to reduce weld touch-up 
work and improve the fatigue strength of welds, which may reduce cost 
and improve performance. The Navy develops and issues crack repair 
manuals specific to ship classes to standardize ship repairs. The Navy 
is beginning to develop fracture control plans to help expedite 
identification of cracks and to help evaluate the risk associated with 
them. All of the above efforts are focused on constraining or reducing 
costs. The Navy has recently begun a collaborative effort with Alcoa, 
the American Bureau of Shipping, the Center for Naval Shipbuilding 
Technology, Austal, Marinette Marine, and ONR to develop high 
deposition gas metal arc welding procedures to increase productivity 
and drive down cost of aluminum shipbuilding..
    The Navy is working with the American Society for Testing & 
Materials (ASTM) International to add test requirements to the 
commercial marine aluminum standard to improve aluminum performance. 
These requirements have been included in recently developed ship 
specifications such as for the SSC.
    The Navy is working with industry partners to develop aluminum to 
meet these standards and to develop aluminum alloys which have better 
resistance to sensitization and stress corrosion cracking. One 
developmental effort is focused on qualifying a commercially available 
product for naval use. This product, from Novelis Inc, uses a 
proprietary production method to produce aluminum plates where the bulk 
of the material is the same high strength aluminum used in ship 
structure today, with the surface comprised of a different alloy which 
cannot sensitize and will protect the interior from corrosion. This 
effort is funded by the Office of Naval Research (ONR) and is expected 
to be complete by the end of 2013. The Navy is also working with 
aluminum producers, Alcoa, and Constellium Rolled Products, to qualify 
new aluminum alloys and tempers which are able to resist sensitization 
much more effectively than today's tempers.
    Recent activity with industry including ship designers, involves 
Navy evaluation of new aluminum components both for weight and cost 
savings. Flight deck tie-downs that were installed on JHSV and side 
hull tips that were installed on LCS 4 are two designs transitioned 
from this effort to the fleet. Other design details reviewed included 
bolted splices to replace welded joints, extruded stiffener design to 
replace manufactured stiffener, and an improved corrugated plate 
design.
    The Navy is also working with shipbuilders to improve design of 
aluminum structures to provide for improved manufacturability, 
performance, and reduced cost. For example, modifications have been 
made to the design of the second and third of the FREEDOM Variant LCS 
to improve their structural designs. Ship Alterations (ShipAlts), or 
modifications to existing ships, are also being implemented at ship 
availabilities to reinforce the ship structure and reduce the 
occurrence cracking and mitigate repair costs.
    Mr. Loebsack. The Surface Warfare Enterprise has designated 
condition based maintenance (CBM) as one of their top ten initiatives 
for FY 2012. However, it does not appear that funding has been budgeted 
for CBM demonstrations on amphibious ships or other large combatants. 
What CBM demonstrations on amphibious ships or large surface combatants 
are being funded this year?
    Admiral Burke. The Navy uses both the Integrated Condition 
Assessment System (ICAS) and Diesel Readiness System (DRS) to inform 
operators and maintainers, both afloat and ashore, of ship system 
operational parameters, including when condition based maintenance is 
recommended. ICAS and DRS (where applicable) are being installed on 
DDG-51, LPD-17, LHD-8, & LHA-6 Class ships during new construction and 
are being back fit to older ship classes.
    ICAS and DRS back-fit installations are accomplished during CNO or 
TYCOM availabilities. Budgeted FY12 installations, and proposed FY13 
installations, are in accordance with Table 1 below. By FY18, all 
amphibious ships and large surface combatants will have ICAS and DRS 
installed, as applicable.
    ICAS DRS
    Ship Class Class Size Installed FY12 Installs FY13 Installs 
Installed FY12 Installs FY13 Installs CG-47 22 17 0 0 n/a n/a n/a DDG-
51 60 46 5 3 n/a n/a n/a LSD-41/49 12 5 3 2 12 0 0 LHD-1 7 0 2 2 n/a n/
a n/a Table 1. ICAS/DRS Installation Plan

                                  
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