[Senate Hearing 112-]
[From the U.S. Government Publishing Office]



 
       DEPARTMENT OF DEFENSE APPROPRIATIONS FOR FISCAL YEAR 2013

                              ----------                              


                       WEDNESDAY, APRIL 18, 2012

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 10:32 a.m., in room SD-192, Dirksen 
Senate Office Building, Hon. Daniel K. Inouye (chairman) 
presiding.
    Present: Senators Inouye, Cochran, Shelby, and Alexander.

                         DEPARTMENT OF DEFENSE

                         Missile Defense Agency

STATEMENT OF LIEUTENANT GENERAL PATRICK J. O'REILLY, 
            DIRECTOR, U.S. ARMY


             OPENING STATEMENT OF CHAIRMAN DANIEL K. INOUYE


    Chairman Inouye. Good morning. Today, we are pleased to 
welcome Lieutenant General Patrick O'Reilly, Director of the 
Missile Defense Agency (MDA) to discuss the administration's 
fiscal year 2013 budget request.
    While we scheduled this year's hearing several months ago, 
it could not be more timely given the events that transpired 
last week. The attempted North Korean rocket launch serves as a 
stark reminder of potential threats to our homeland. I know the 
operational demands the Nation places on you.
    In fiscal year 2013, MDA is requesting $7.75 billion, a 
reduction of more than $650 million from amounts appropriated 
in the last fiscal year. This request supports a viable 
homeland defense, enhances European regional defenses, 
continues testing the current system, and develops new 
capabilities to address new threats.
    Like all of our defense and other Federal Government 
agencies, we're asking you to continue to perform your vital 
mission in a fiscally constrained environment. Your agency has 
several significant programs underway that I'm certain you will 
address this morning.
    In particular, I look forward to hearing an update on 
progress you have made after two successive test failures of 
the Ground-based Midcourse Defense (GMD) system. As you well 
know, the threat to our Nation is not static, and this 
subcommittee will continue to fully support your efforts to 
return to flight successfully.
    In addition to the regional defense of our deployed troops 
and allies, MDA has begun implementation of a phased adaptive 
approach (PAA) by placing a forward-based radar in Turkey and 
deploying an Aegis ballistic missile defense ship in the 
Mediterranean.
    You have also made progress in the next phases of the PAA 
by negotiating important postnation agreements and by 
continuing to upgrade our Aegis ships.
    Therefore, we are concerned to hear about the Navy's 
proposed plans to prematurely retire some of its ships that 
were slated to be upgraded to a ballistic missile defense (BMD) 
capability. This will result in six fewer BMD capable ships 
than what you had projected just 1 year ago. I believe this is 
alarming given the evolving threat, and we would like to hear 
your thoughts on that proposal.
    The year 2012 marks the 10-year anniversary of MDA, and 
over this time, you have made technical progress to secure our 
homeland and our allies. As we look forward to future 
challenges coupled with limited resources, our Nation will 
continue to rely on your foresight and technical expertise.
    Before I proceed, I would like to recognize the Vice 
Chairman, Senator Cochran, for his remarks.


                   STATEMENT OF SENATOR THAD COCHRAN


    Senator Cochran. Mr. Chairman, thank you, and thank you, 
General O'Reilly, for being here with us today to review the 
President's budget request with respect to the next fiscal year 
for the Department of Defense (DOD).
    We, of course, are interested in trying to do our part to 
hold back on wasteful Government spending. That's kind of the 
word of the day, and constrains us, as we review the request 
being submitted to the Congress this year for DOD.
    But we know we have no more important undertaking than to 
safeguard the security of the citizens of the United States and 
to help protect our interests around the world.
    We do need to practice fiscal discipline, but our 
adversaries continue to develop medium- and long-range 
ballistic missiles that threaten our security, as well as the 
security of our deployed forces around the world. And our 
friends and allies are threatened as well.
    So we hope to explore with our witnesses before the 
subcommittee at our hearing the technological and fiscal 
challenges we face and undertake to do what is thoughtful and 
necessary to help continue to provide a multi-tiered, missile 
defense system to help protect these security interests.
    Thank you for being here today, and we look forward to our 
discussion about the MDA and what we can do to help support 
your best efforts.
    Chairman Inouye. Senator Shelby.


                 STATEMENT OF SENATOR RICHARD C. SHELBY


    Senator Shelby. Mr. Chairman, I ask that my opening 
statement be made part of the record. I look forward to hearing 
from General O'Reilly. We had a nice meeting yesterday. Thank 
you for calling this hearing.
    Chairman Inouye. Senator Alexander.


                  STATEMENT OF SENATOR LAMAR ALEXANDER


    Senator Alexander. Thanks, Mr. Chairman. I'm here to hear 
the General, and I have no opening statement.
    Chairman Inouye. Thank you, Sir.
    General.


      SUMMARY STATEMENT OF LIEUTENANT GENERAL PATRICK J. O'REILLY


    General O'Reilly. Good morning.
    Chairman Inouye, Vice Chairman Cochran, and other 
distinguished members of this subcommittee. Thank you for the 
opportunity to testify today on the MDA's $7.75 billion fiscal 
year 2013 President's budget request to further develop our 
missile defenses against the increasing ballistic missile 
threat to our homeland, armed forces, allies, and international 
partners.
    This request balances our policies as documented in the 
2010 Ballistic Missile Defense Review, U.S. Strategic Command's 
Integrated Air and Missile Defense priorities, the MDA's 
technical feasibility assessments, affordability constraints 
and current intelligence community estimates of the ballistic 
missile threat.
    I describe our past year's accomplishments and detailed 
justification of this year's budget request in my written 
statement submitted to this subcommittee. However, I would like 
to highlight now that last year our homeland defense 
improvements included activating a new missile field and an 
additional fire control node at Fort Greely, Alaska, activating 
a newly upgraded early warning radar in Thule, Greenland, and 
upgrading the reliability of three ground-based interceptors 
(GBIs).
    This year, we continue to aggressively pursue the agency's 
highest priority, to conduct a missile intercept with the 
newest version of the GBI's exo-atmospheric kill vehicle (EKV) 
after two previous flight test failures.
    We conducted a failure review board comprised of Government 
and industry experts, redesigned critical GBI EKV components, 
and established more stringent manufacturing and component 
requirements.
    These requirements had previously not been encountered 
anywhere in the aerospace industry. As a result of these 
stringent manufacturing requirements, we have encountered 
delays in preparing for our next flight test.
    MDA is fully committed to test the GMD system as soon and 
as often as possible. But we will not approve the execution of 
a flight test until our engineers and independent experts are 
convinced that we have resolved all issues discovered in 
previous testing.
    We will fly a nonintercept test by the end of this year to 
verify we have resolved all issues, and then we will conduct 
our next intercept flight test early next year to reactivate 
the GMD production line.
    We will also activate our hardened power plant at Fort 
Greely, Alaska, this year, and we will increase the firepower 
of the fielded GBI's by continuing to test and upgrade the 
reliability of GBI components.
    Finally, we will continue to increase the capability of the 
Sea-Based X-band Radar (SBX). But we have cost effectively 
limited its operation to flight testing and operational 
contingency support under the control of the U.S. Navy Pacific 
Fleet.
    Our regional defense highlights over the past year include 
the on-time deployment of the first phase of the European 
phased adaptive approach (EPAA) consisting of a command and 
control node in Germany, a forward-based radar in Turkey, and 
an Aegis missile defense ship on station in the Mediterranean 
Sea.
    During the past year, we demonstrated the first Aegis 
intercept of a 3,700 kilometer target using a remote forward-
based radar and we demonstrated the simultaneous intercept of 
two missiles by the Terminal High Altitude Area Defense (THAAD) 
system.
    This year, the first two THAAD batteries will be available 
for deployment, increasing the number of Aegis capable ships to 
29 and conduct of three Standard Missile 3 (SM-3) Block 1B 
flight tests to demonstrate the resolution of last year's 
flight test failure.
    And we will conduct the largest missile defense test in 
history involving the first simultaneous intercepts of multiple 
short- and medium-range ballistic missiles and cruise missiles 
by Patriot Advanced Capability 3, THAAD and Aegis BMD systems 
integrated with a forward-based radar.
    Finally, we continue to work with more than 20 countries 
including our Cooperative Development Programs with Israel and 
Japan, and our first foreign military sale of THAAD to the 
United Arab Emirates. And we continue to support technical 
discussions with the Russians on missile defense.
    While Phases 2 and 3 of the EPAA to missile defense are on 
track to meet the 2015 and 2018 deployment dates, the 
Government Accounting Office (GAO) has criticized concurrent 
production of prefabricated buildings to house the Aegis Ashore 
System for Romania prior to the completion of flight testing 
with the Aegis Ashore at the Pacific Missile Range in Hawaii.
    While I concur with the GAO that programs of high 
concurrency between testing, production and fielding such as 
the initial fielding of the GMD system have associated risks, I 
deem the risk of proceeding with the production of 
prefabricated buildings for the Aegis Ashore System, while 
flight testing, is a low risk, since all the functions of the 
Aegis Ashore System are identical to the functions of the Aegis 
System that have been thoroughly tested at sea.
    However, the cost of suspending Aegis Ashore production 
until all flight testing is completed will greatly increase the 
production costs, needlessly delay the deployment of the second 
phase of the EPAA production protection of Europe, and 
negatively impact the industrial base supporting the Aegis 
program.
    Finally, I'm concerned about delivering the critically 
needed and cost-effective missile defense sensor capability of 
the Precision Tracking Space System (PTSS) and the need to 
develop a second independent layer of homeland defense with the 
SM-3 IIB Interceptor due to past congressional funding 
reductions to both programs.


                           PREPARED STATEMENT


    I request your support for these programs so that our 
homeland benefits from the same layered missile defense 
approach that we successfully employ in our regional defenses.
    Three industry teams are developing the SM-3 IIB 
Interceptor concepts that expand the forward edge of our 
homeland defense battle space and provide our war fighters a 
highly effective Shoot-Assess-Shoot anti-intercontinental 
ballistic missiles (ICBM) capability as endorsed by the recent 
Defense Science Board Study.
    Thank you, and I look forward to the subcommittee's 
questions.
    [The statement follows:]

      Prepared Statement of Lieutenant General Patrick J. O'Reilly

    Good morning, Chairman Inouye, Vice Chairman Cochran, other 
distinguished members of the subcommittee. I appreciate the opportunity 
to testify before you today on the Missile Defense Agency's (MDA) $7.75 
billion fiscal year 2013 budget request to develop protection for our 
Nation, our Armed Forces, allies, and partners against the 
proliferation of increasingly capable ballistic missiles. The 
Department developed the fiscal year 2013 President's budget request in 
accordance with the February 2010 Ballistic Missile Defense Review, 
which balanced war fighter needs as expressed in the U.S. Strategic 
Command (STRATCOM) Integrated Air and Missile Defense (IAMD) 
Prioritized Capability List (PCL) with technical feasibility and 
affordability constraints and intelligence community updates. We 
continue to demonstrate and improve the integration of sensor, fire 
control, battle management, and interceptor systems that transforms 
individual missile defense projects into a Ballistic Missile Defense 
System (BMDS) capable of defeating large raids of a growing variety of 
ballistic missiles over the next decade. For homeland defense, last 
year we completed the construction of the Ground-based Midcourse 
Defense (GMD) infrastructure for protection of the U.S. homeland 
against future limited intercontinental ballistic missile (ICBM) 
threats from current regional threats including the activation of our 
newest hardened missile field at Fort Greely, Alaska (FGA). This year, 
we will continue to aggressively pursue the MDA's highest priority--
successful return to flight and intercept tests of the Capability 
Enhancement II (CE II) version of the ground-based interceptor (GBI). 
We will prepare for the next GMD nonintercept flight test by the end of 
this year and our next intercept early in the following year, activate 
the hardened power plant at FGA, prepare to restart the GBI production 
line, and aggressively conduct component testing and refurbish 
currently deployed missiles to test and improve their reliability. For 
regional defenses, last year we deployed phase 1 of the European phased 
adaptive approach (EPAA) consisting of a command and control, battle 
management system in Germany, forward-based radar in Turkey, and an 
Aegis ballistic missile defense (BMD) ship in the Eastern Mediterranean 
Sea. This year, we will have two operational Terminal High-Altitude 
Area Defense (THAAD) batteries, convert 5 Aegis ships and upgrade 1 for 
a total of 29 ships with BMD capability installed, and increase the 
number of associated Standard Missile 3 (SM-3) interceptors. In our 
test program, we will conduct three flight tests of the SM-3 Block IB 
to demonstrate resolution of last year's flight test failure and its 
ability to intercept complex short-range ballistic missile (SRBM) (up 
to 1,000 km) targets. Finally, this year we will demonstrate the 
maturity of our layered regional defense with the first simultaneous 
intercepts of three short- and medium-range ballistic missiles and two 
cruise missiles by an integrated architecture of PATRIOT Advanced 
Capability 3 (PAC-3), THAAD, and Aegis BMD systems assisted by a remote 
Army/Navy Transportable Radar Surveillance 2 (AN/TPY-2) forward-based 
radar--the largest, most complex, live fire missile defense test in 
history.

                       ENHANCING HOMELAND DEFENSE

    MDA's highest priority is the successful GMD intercept flight test 
of the newest GBI exo-atmospheric kill vehicle (EKV)--the CE II EKV. 
Last year, we concluded the Failure Review Board (FRB) evaluation for 
the December 2010 FTG-06a flight test by identifying the most probable 
cause of the failure and revising the CE II EKV design to correct the 
problem. As a result of that FRB, we have redesigned critical GBI EKV 
components and established more stringent manufacturing and component 
test standards--standards previously not used anywhere in the U.S. 
aerospace industry. As a result of these stringent manufacturing 
standards, we have encountered several delays in preparing for our next 
nonintercept and intercept flight tests. MDA is fully committed to test 
the GMD system as soon and often as possible, but we will not approve 
executing a flight test until our engineers, and independent government 
and industry experts, have been convinced that we have resolved all 
issues discovered in previous testing and will be successful in our 
next test. Flight testing as often as possible is our goal, but we risk 
further failure if we conduct GMD testing prior to verification that we 
resolved problems discovered in previous flight tests. Also, conducting 
flight tests at a pace greater than once a year prohibits thorough 
analysis of premission and postmission flight test data and causes 
greater risk of further failure and setbacks to developing our homeland 
defense capability as rapidly as possible. If our CE II nonintercept 
(controlled test vehicle (CTV) flight) is not successful later this 
year, we will be prepared to conduct the next test of the previous 
version of the EKV (the CE I EKV) GBI test while we continue to resolve 
any CE II issues in order to continue to test other improvements in our 
homeland defense. Other improvements to homeland defense include:
  --the upgrades and integration of the Thule Early Warning Radar into 
        the BMDS to view and track threats originating in the Middle 
        East;
  --upgrade of three emplaced FGA GBIs as part of our on-going GMD 
        fleet refurbishment and reliability enhancement program;
  --fielding improved GMD fire control software to allow testing or 
        exercises to be conducted while simultaneously controlling the 
        operational system; and
  --upgrading the FGA communications system.
    We activated Missile Field 2 earlier this year, thus increasing the 
number of total GBI operational silos to 38 (34 at FGA and 4 at 
Vandenberg Air Force Base (VAFB) in California). This past December, we 
awarded the GMD Development and Sustainment contract, one of MDA's 
largest and most complex competitive acquisitions, with a price of 
almost $1 billion less than the independent government cost estimate. 
For the next 7 years, this $3.5 billion contract will provide for 
sustainment and operations as well as improvements and enhancements of 
the current capability, provide for a robust and vigorous testing 
program, and deliver new and upgraded interceptors. A key part of the 
scope of this new contract is comprehensive verification and 
reliability testing, and upgrades as needed, of every component of our 
GBIs. These component reliability improvements and tests will require 3 
years to complete and will provide the U.S. Northern Command (NORTHCOM) 
commander convincing GBI reliability data resulting in a greater number 
of ICBMs that can be engaged with a higher probability of protection of 
our homeland.
    We are requesting $903.2 million in fiscal year 2013 in research, 
development, testing, and evaluation (RDT&E) funding for the GMD 
program. We plan to continue to upgrade our fleet of 30 operational 
GBIs and acquire 5 additional GBIs for enhanced testing, stockpile 
reliability, and spares, for a total of 57 GBIs. We will continue GBI 
component vendor requalifications for the future GBI avionics upgrade 
and obsolescence program.
    Today, 30 operational GBIs protect the United States against a 
limited ICBM raid size launched from current regional threats. If, at 
some point in the future, this capability is determined to be 
insufficient against a growing ICBM threat, it is possible that we can 
increase the operational GBIs' fire power by utilizing all 38 
operational silos, refurbishing our 6-silo prototype missile field, and 
accelerating the delivery of new sensor and interceptor capabilities. 
Additionally, our GBI reliability improvement program will enable more 
successful intercepts with fewer GBIs with the same probability of 
successful intercept. In fiscal year 2013, we will begin construction 
of the GBI In-Flight Interceptor Communication System Data Terminal 
(IDT) at Fort Drum, New York, with a completion date by 2015. The East 
Coast IDT will enable communication with GBIs launched from FGA and 
VAFB over longer distances, thus improving the defense of the Eastern 
United States. We will also continue to develop and assess the 2-stage 
GBI to preserve future deployment options, including an intercept 
flight test in fiscal year 2014.
    Because the defense of our homeland is our highest priority, we are 
pursuing a layered defense concept--similar to that in regional missile 
defense--to achieve high-protection effectiveness by deploying more 
than one independently developed missile defense interceptor system; 
therefore, we will continue development of the SM-3 Block IIB to 
protect our homeland in the future by creating a new first layer of 
intercept opportunities, expanding the forward edge of our homeland 
defense battle space, and providing our war fighters highly feasible 
``Shoot-Assess-Shoot'' firing doctrine. The recent Defense Science 
Board (DSB) agreed with our assessment that the SM-3 IIB will be 
challenged to destroy ICBMs before their earliest possible deployment 
of countermeasures. The DSB also supports MDA's development of the SM-3 
IIB to significantly expand the forward edge of our ICBM battle space 
and enable SAS to obtain very high levels of ICBM protection of our 
homeland. The fiscal year 2012 congressional reduction of the SM-3 IIB 
funding has increased the challenge of fielding this improvement in 
homeland defense against ICBMs in the 2020 timeframe. My additional 
concern is the impact of reducing funding for the SM-3 IIB will 
eliminate the only new interceptor design and development opportunity 
for our Nation's missile defense industrial base for the foreseeable 
future. The three SM-3 IIB industry teams lead by Lockheed Martin, 
Boeing, and Raytheon have shown rapid progress in developing very 
effective and feasible SM-3 IIB interceptor design concepts. To 
terminate, or slow down, the SM-3 IIB development effort will have a 
significant negative impact on missile defense aerospace industrial 
base at this time and risk our ability to cost-effectively respond to 
emerging regional ICBM threats to our homeland for decades in the 
future.
    This year, we will begin upgrading the clear early warning radar in 
Alaska for full missile defense capability by 2016. We will also 
continue operations of the Sea-Based X-band (SBX) radar and development 
of algorithms to improve its discrimination capability. We are 
requesting $347 million in fiscal year 2013 for BMDS Sensors 
development for homeland defense, including support of the Cobra Dane 
radar, the upgraded early warning radars at Beale AFB (California), 
Fylingdales (United Kingdom), and Thule (Greenland). We are requesting 
$192.1 million to operate and sustain these radars and $227.4 million 
to procure additional radars and radar spares. In fiscal year 2013, we 
will also place the SBX in a limited test operations status for 
affordability reasons, but we will be prepared to activate the SBX if 
indications and warnings of an advanced threat from Northeast Asia 
become evident. We will also continue to upgrade the GMD system 
software to address new and evolving threats, including enhancing EKV 
discrimination algorithms by 2015, improving GBI avionics, and 
increasing GBI interoperability with the command and control, battle 
management and communications (C\2\BMC) system.

                       ENHANCING REGIONAL DEFENSE

    This year, we will demonstrate integrated, layered regional missile 
defense in the largest, most complex missile defense test ever 
attempted. We will simultaneously engage up to five air and ballistic 
missile targets with an Aegis, THAAD, PATRIOT and Forward Based Mode 
AN/TPY-2 radar integrated C\2\BMC system operated by soldiers, sailors, 
and airmen from multiple Combatant Commands. This live-fire test will 
allow our war fighters to refine operational doctrine and tactics while 
providing confidence in the execution of their integrated air and 
missile defense plans.
    Last year, in addition to deploying EPAA phase 1, we successfully 
supported negotiations for host nation agreements to deploy Aegis 
Ashore batteries to Romania (Phase 2) and Poland (Phase 3); we 
successfully tested the North Atlantic Treaty Organization (NATO) 
Active Layered Theater Ballistic Missile Defense (ALTBMD) Interim 
Capability with European Command (EUCOM) C\2\BMC to enhance NATO 
situational awareness and planning; we installed the Aegis BMD 3.6.1 
weapon system on three Aegis ships and upgraded one Aegis BMD ship to 
Aegis BMD 4.0.1 (increasing the Aegis BMD fleet to 22 operationally 
configured BMD ships); and we delivered 19 SM-3 Block IA interceptors 
and the first SM-3 Block IB interceptor. We continued SM-3 Block IIA 
system and component Preliminary Design Reviews. We delivered 11 
interceptors for THAAD Batteries 1 and 2 and flight test, and started 
production of Batteries 3 and 4. We also delivered the latest C\2\BMC 
upgrades to NORTHCOM, STRATCOM, Pacific Command, and Central Command. 
These software builds will improve situational awareness, sensor 
management, and planner functions.
    We also demonstrated critical BMDS regional capabilities in key 
tests over the past year. In April 2011, we conducted an Aegis BMD 
flight test (FTM-15) using the SM-3 Block IA interceptor launched using 
track data from the AN/TPY-2 radar passed through the C\2\BMC system to 
intercept an intermediate-range ballistic missile (IRBM) target (3,000 
km to 5,500 km) to demonstrate the EPAA phase 1 capability. This 
mission also was the first Launch-on-Remote Aegis engagement and 
intercept of an IRBM with the SM-3 Block IA. In October 2011, the BMDS 
Operational Test Agency, with the oversight of the Director, 
Operational Test & Evaluation, conducted a successful Initial 
Operational Test & Evaluation test (FTT-12) of THAAD's ability to 
detect, track, and engage SRBM and middle-range ballistic missile 
(MRBM) targets simultaneously.
    Enhanced Middle-Range Ballistic Missile Defense in Europe by 2015 
(European Phased Adaptive Approach Phase 2).--Our goal in this phase is 
to provide a robust capability against SRBMs and MRBMs by deploying 
several interceptors to engage each threat missile multiple times in 
its flight. The architecture includes the deployment of the Aegis BMD 
5.0 weapon systems with SM-3 Block IB interceptors at sea and at an 
Aegis Ashore site in Romania. When compared to the current SM-3 Block 
IA, the IB will be more producible, have an improved two-color seeker 
for greater on-board discrimination, and have improvements to enhance 
reliability of the SM-3 Block IB's divert and attitude control system. 
These improvements also provide an enhanced capability to 
simultaneously engage larger sized raids of threat missiles.
    We are requesting $992.4 million in fiscal year 2013 for sea-based 
Aegis BMD to continue development and testing of the SM-3 Block IB, 
continue outfitting of ships with the BMD 4.0.1 system as well as 
spiral upgrades to Aegis 5.0 to support the operation of the SM-3 Block 
IB and IIA interceptors and associated flight tests. We are requesting 
$389.6 million in fiscal year 2013 for the procurement of 29 SM-3 Block 
IB interceptors and $12.2 million to operate and maintain already 
deployed SM-3 Block IA interceptors. In fiscal year 2013, we are also 
requesting $276.3 million to develop and build the Aegis Ashore Test 
Facility at the Pacific Missile Range Facility in Hawaii and $157.9 
million to construct the first Aegis Ashore Missile Defense System 
battery in Romania by fiscal year 2015. We request $366.5 million in 
fiscal year 2013 to operate and sustain C\2\BMC at fielded sites and 
continue C\2\BMC program spiral development of software and engineering 
to incorporate enhanced C\2\BMC capability into the battle management 
architecture and promote further interoperability among the BMDS 
elements, incorporate boost phase tracking, and improve system-level 
correlation and tracking. We will also continue communications support 
for the AN/TPY-2 radars and PAA-related C\2\BMC upgrades.
    In September 2011, we conducted FTM-16 to demonstrate Aegis BMD 
4.0.1 fire control and the first flight test of the SM-3 Block IB 
interceptor. While we did not achieve the intercept of the SRBM 
separating payload, we demonstrated critical system functions, 
including the exceptional performance of the kinetic warhead divert 
system, which allowed the Navy's partial certification of the Aegis BMD 
4.0.1 computer program. In the third quarter of fiscal year 2012, we 
will conduct FTM-16 (Event 2a) to demonstrate the resolution of the 
previous flight test issue and the SM-3 Block IB's Kill Warhead's 
capability. We will also demonstrate the ability of the SM-3 Block IB 
to intercept more complex SRBM targets in FTM-18 and FTM-19 later this 
summer. In the third quarter fiscal year 2013, we will conduct the 
first operational flight test led by the BMDS Operational Test Agency 
team involving a coordinated and simultaneous engagement involving 
Aegis BMD, THAAD and PAC-3 systems against three targets and two cruise 
missiles. Our fiscal year 2013 testing program continues to demonstrate 
the SM-3 Block IB and Aegis BMD 4.0.1 (FTM-21 and FTM-22), including a 
salvo engagement involving two interceptors against an SRBM.
    Enhanced Intermediate-Range Ballistic Missile Defenses in Europe by 
2018 (European Phased Adaptive Approach Phase 3).--The SM-3 Block IIA 
interceptor, being co-developed with the Japanese Government, is on 
schedule for deployment at Aegis Ashore sites in Romania and Poland, 
and at sea, in 2018 to provide enhanced protection for European NATO 
countries from all ballistic missile threats from the Middle East. This 
year we completed the SM-3 Block IIA preliminary design review, and 
continue shock and vibration testing of the SM-3 Block IIA interceptor 
canister, and development of Aegis BMD 5.1 fire control system. We also 
reduced the execution risk of the SM-3 Block IIA program by increasing 
the time between flight tests while maintaining the original initial 
capability date of 2018. The fiscal year 2013 request for SM-3 Block 
IIA co-development is $420.6 million.
    Expanded Interceptor Battle Space by 2020 (European Phased Adaptive 
Approach Phase 4).--The SM-3 Block IIB will provide a pre-apogee 
intercept capability against IRBMs and an additional layer for a more 
enhanced homeland defense against potential nonadvanced ICBMs launched 
from today's regional threats. This program is in the technology 
development phase, and its 7-year development timeline is consistent 
with typical interceptor development timelines according to Government 
Accountability Office data. Last year we awarded risk reduction 
contracts for missile subsystem components, including advanced 
propulsion, seeker, and lightweight material technologies. We also 
awarded concept design contracts for the SM-3 Block IIB interceptor to 
three aerospace industry teams. In fiscal year 2013, we are requesting 
$224.1 million to develop the Request For Proposal and begin source 
selection for the SM-3 Block IIB Product Development Phase, which we 
propose to begin in early 2014. The SM-3 Block IIB is leveraging 
advanced tracking and discrimination technologies planned for 
deployment during EPAA phase 4, as well as the entire sensor network, 
with PTSS and C\2\BMC upgrades to maximize homeland defense.

                ADDITIONAL MISSILE DEFENSE CAPABILITIES

    This year, we are procuring 42 THAAD interceptors for Batteries 1 
and 2, six launchers, and two THAAD Tactical Station Groups. We are 
requesting $316.9 million in RDT&E funding in fiscal year 2013 to 
enhance communications and debris mitigation, which will allow THAAD to 
be more interoperable with PAC-3 and Aegis BMD and connected to the 
BMDS, and $55.7 million for THAAD operations and maintenance. We also 
request $460.7 million to procure 36 THAAD interceptors. THAAD will 
complete delivery of the first 50 interceptors in June 2012, 
demonstrating the capacity of the contractor supply chain and the main 
assembly factory in Troy, Alabama to deliver interceptors. The next 
production lots are under contract, with delivery beginning this 
summer. We will maintain a production rate of four THAAD missiles per 
month through June 2012 due to components on hand and enhance the 
supply chain's production capacity to sustain a three missile per month 
production rate beginning in spring 2013. In late fiscal year 2012, we 
will demonstrate THAAD's ability to intercept an MRBM as part of an 
integrated operational test with PAC-3 and Aegis BMD.
    Additional BMDS improvements include expanded coordination of 
missile defense fire control systems and improvements in radar 
discrimination. We are requesting $51.3 million for the Space Tracking 
and Surveillance System (STSS) in fiscal year 2013. We continue to 
operate the two STSS demonstration satellites to conduct cooperative 
tests with other BMDS elements and demonstrate the capability of STSS 
satellites against targets of opportunity. These tests demonstrate the 
ability of a space sensor to provide high precision, real-time tracking 
of missiles and midcourse objects that enable closing the fire control 
loops with BMDS interceptors. In fiscal year 2013, we plan the first 
live intercept of a threat missile by the Aegis BMD system using only 
STSS data to form the fire control solution for the SM-3 IB 
interceptor. Additionally, lessons learned from the two STSS 
demonstration satellites inform Precision Tracking Space System (PTSS) 
design development decisions.

                      DEVELOPING NEW CAPABILITIES

    We are requesting $80 million in fiscal year 2013 to continue 
development of fiscally sustainable advanced BMD technologies that can 
be integrated into the BMDS to adapt as threats change. Intercepts 
early in the battle space will provide additional opportunities to kill 
threat missiles, enlarge protection areas, and improve the overall 
performance of the BMDS.
    Last year, we accelerated our test campaign with the Airborne Laser 
Test Bed (ALTB) to collect data on tracking and atmospheric 
compensation, system jitter, and boundary layer effects on propagation 
for future directed energy applications. This year, in accordance with 
the funding reduction enacted by the Congress, we grounded the ALTB 
aircraft and are examining the technical feasibility of high-
efficiency-directed energy technology for the next decade. In fiscal 
year 2013, we are requesting $46.9 million to pursue Diode Pumped 
Alkaline-gas Laser System and coherent fiber combining laser 
technologies, which promise to provide high-efficiency, electrically 
driven, compact, and lightweight high-energy lasers for a wide variety 
of missions of interest to MDA and the Department of Defense (DOD) and 
support concept development for the next generation of airborne missile 
defense directed energy systems.
    We request $58.7 million in fiscal year 2013 to continue support 
for research and development of advanced remote sensing technologies, 
demonstrate acquisition, tracking and discrimination of multi-color 
infrared sensors, and investigate techniques to improve the system's 
data fusion capability to further strengthen the Nation's missile 
defense sensor network. We have integrated our international and 
domestic university research programs into the same structure, allowing 
MDA to capitalize on the creativity and innovation within our small 
business and academic communities to enhance our science and technology 
programs.
    The greatest future enhancement for both homeland and regional 
defense in the next 10 years is the development of the Precision 
Tracking Space System (PTSS) satellites, which will provide fire 
control quality track data of raids of hostile ballistic missiles over 
their entire flight trajectories and greatly expand the forward edge of 
the our interceptors' battle space for persistent coverage of more than 
70 percent of the Earth's landmass. The need for persistent, full 
trajectory, tracking of ballistic missiles is one of the war fighter's 
highest development priorities as stated in the 2012 STRATCOM PCL. PTSS 
will enhance the performance of all missile defense interceptors at an 
operational cost significantly less (and with much greater ability to 
track large raid sizes of threat missiles) than forward based AN/TPY-2 
radars, based on MDA's experience with STSS program costs. The emerging 
concept design of the PTSS spacecraft is much simpler than STSS because 
it relies on the mature Air Force Space Based Infra-Red (SBIR) 
satellite system to acquire threat ballistic missiles, leverages PTSS's 
ability to provide precision tracks of the remainder of threat 
missiles' trajectories, and uses only satellite components with high 
technology readiness levels. Due to the intrinsic simplicity and 
component maturity of the PTSS design, the integration of concurrent 
developments is considered to be a low acquisition risk. Key to our 
acquisition strategy is MDA partnering Air Force Space Command and the 
Naval Research Laboratory with Johns Hopkins University Applied Physics 
Laboratory (APL), with participation of six aerospace corporations, to 
develop a fully Government-owned preliminary design and technical data 
package to enable full competitions by our aerospace industry for the 
production for the first and subsequent PTSS satellite constellations. 
MDA is requesting $297.4 million for PTSS in fiscal year 2013 to 
continue development of preliminary design requirements to create these 
multi-mission satellites (e.g., missile defense, space situation 
awareness, DOD and intelligence community support). APL has a 
noteworthy track record, dating back to 1979, for meeting planned 
development cost and schedule projections involving 17 significant 
spacecraft missions. We will complete final design and engineering 
models for the PTSS bus, optical payload, and communications payload in 
fiscal year 2013. PTSS project scope includes delivery of PTSS ground 
segments and launch of the first two PTSS spacecraft in fiscal year 
2017. We are fully cooperating in an Independent Cost Estimate (ICE) of 
the development and 20-year life-cycle cost of the PTSS constellation 
by the Office of the Secretary of Defense of Capability Assessment and 
Program Evaluation (CAPE) to achieve a high confidence cost estimate of 
the development and 20-year life of the PTSS constellation. Of note, 
this ICE will provide great insight into the validity of the recent 
National Academy of Science (NAS) Boost Phase Intercept study cost 
estimate for the PTSS constellation that we believe is considerably 
higher than our estimates. Although the NAS study was critical of 
PTSS's ability to discriminate a re-entry vehicle (RV) from other 
objects accompanying a missile, the NAS did not benefit from an 
understanding of our sensor discrimination architecture concept nor our 
classified programs developing PTSS's future RV discrimination 
capability. However, the NAS study did benefit from understanding our 
disciplined systems engineering process that scrutinizes capability 
trades to achieve urgent, cost-effective, satisfaction of the war 
fighters BMD needs as documented in STRATCOM's PCL.

                       INTERNATIONAL COOPERATION

    As stated in the 2010 Ballistic Missile Defense Review, developing 
international missile defense capacity is a key aspect of our strategy 
to counter ballistic missile proliferation. A significant 
accomplishment of international cooperation in 2011 was the signing of 
the first Foreign Military Sale case for the THAAD system to the United 
Arab Emirates, valued at nearly $3.5 billion. In Europe, we 
successfully completed interoperability testing of our C\2\BMC system 
with the ALTBMD Interim Capability, demonstrating U.S. and NATO's 
ability to share situational awareness of missile defense execution and 
status and planning data. NATO plans to invest more than 600 million 
Euros for the ALTBMD capability. Moreover, we are working with our NATO 
allies on developing requirements for territorial NATO missile defense. 
We continue to pursue potential missile defense contributions of NATO 
countries such as the Netherlands' announcement that they are upgrading 
their maritime radars with missile defense surveillance and tracking 
capability. In East Asia, we are supporting the BMDR-based objective in 
leading expanded international efforts for missile defense through 
bilateral projects and efforts with Japan, the Republic of Korea, and 
Australia. And in the Middle East, we continue to work with long-term 
partners, such as Israel, and are pursuing strengthened cooperation 
with various Gulf Cooperation Council countries that have expressed 
interest in missile defense. MDA is currently engaged in missile 
defense projects, studies and analyses with more than 20 countries, 
including Australia, the Czech Republic, Denmark, France, Germany, 
Israel, Japan, Poland, Romania, Saudi Arabia the United Arab Emirates, 
the United Kingdom, and NATO.
    MDA continues its close partnership with Japan on the SM-3 IIA 
interceptor (Japan is leading the development efforts on the SM-3 Block 
IIA second- and third-stage rocket motors and the nosecone), studying 
future missile defense architectures for defense of Japan, and 
supporting that nation's SM-3 Block IA flight test program, to include 
the successful intercept flight test in October 2010 involving a 
Japanese SM-3 Block IA. This test completed the first foreign military 
sale of Aegis BMD to a key maritime partner. Japan now has four Aegis 
destroyers equipped with Aegis BMD systems and a complement of SM-3 
Block IA interceptors.
    We also continue collaboration with Israel on the development and 
employment of several missile defense capabilities that are 
interoperable with the U.S. BMDS. Last year, at a U.S. test range off 
the coast of California, the Arrow Weapon System successfully 
intercepted a target representative of potential ballistic missile 
threats facing Israel today. This year, we plan to conduct several 
first time demonstrations of significant David's Sling, Arrow-2 block 
4, and Arrow-3 system capabilities. We are requesting $99.8 million for 
Israeli Cooperative Programs (including Arrow System Improvement and 
the David's Sling Weapon System) in fiscal year 2013 to continue our 
cooperative development of Israeli and United States missile defense 
technology and capability. MDA will conduct a David's Sling flight test 
to demonstrate end game and midcourse algorithms and initiate David's 
Sling and Arrow-3 Low Rate Initial Production.

                               CONCLUSION

    Our fiscal year 2013 budget funds the continued development and 
deployment of SRBM, MRBM, IRBM, and ICBM defenses while meeting the war 
fighters' near-term and future missile defense development priorities. 
We are dedicated to returning to successful GMD flight testing as soon 
as possible as well as developing an additional layer of homeland 
defense with the SM-3 IIB to ensure we have a robust and responsive 
ICBM defense for our Nation, during this decade and for many decades in 
the future. Additionally, we are committed to develop a persistent, 
space based, PTSS constellation to ensure always available, early 
tracking of large size raids of missiles to enable cost-effective 
homeland and regional missile defense. We are also dedicated to 
creating an international and enhanced network of integrated BMD 
capabilities that is flexible, survivable, affordable, and tolerant of 
uncertainties of estimates of both nation-state and extremist ballistic 
missile threats.
    Thank you, Mr. Chairman. I look forward to answering the 
subcommittee's questions.

    Chairman Inouye. Thank you very much, General.
    As I indicated in my opening remarks, we have been advised 
that including the ballistic missile defense (BMD) capability 
on Aegis ships is a critical element of the phased adoptive 
approach (PAA).
    Now, the Navy has, as I indicated, the possibility of 
decommissioning six of the cruisers. What impact would it have 
on the PAA?
    General O'Reilly. Sir, we support the Navy's technical 
assessments. They make the final decision, of course. I know of 
some factors that played into that consideration. Some of it 
was the stationing of ships in Rota, Spain, which has been 
agreed to, to reduce the transit time and increase the multi-
mission ship presence in the Mediterranean.
    That was part of their considerations. Additionally, we 
continue to work with the Navy to perform functions in other 
ways than just using a ship for BMD. For example, for sensors.
    Can we deploy some of our sensors in locations and relieve 
the need for Aegis ships to be doing the surveillance mission 
which some of those ships are doing today.
    So, Sir, I defer the final answer to your question because 
that is a Navy decision, but we work very closely to ensure our 
technical programs are synchronized with their programs, and at 
the same time, they benefit from our technical analysis.
    Chairman Inouye. So the decommissioning is not finalized?
    General O'Reilly. Sir, I'm not in a position to answer that 
question. That's one where we have been supporting the Navy.
    Chairman Inouye. Can you tell us about Aegis Ashore?
    General O'Reilly. Sir, the Aegis Ashore System is a very 
cost-effective approach to take the proven capability we've 
seen at sea and move it effectively to the land. It is then a 
focused mission on missile defense. Instead of the more than 
270 sailors, for example, needed on a Navy ship, an Aegis 
Ashore System can operate the system with less than 35 sailors, 
and that includes multiple shifts.
    So it's a very cost-effective way of having Aegis BMD 
capability. Aegis BMD capability has the longest range of our 
regional systems. So it adds a layer of missile defense to the 
land that otherwise would be solely relying on THAAD.
    And, so, with Aegis Ashore and THAAD and Patriot and other 
international systems, we are able to achieve that multilayered 
effect with the dedicated and persistent presence of the Aegis 
Ashore system.
    Chairman Inouye. We've been told that these systems will be 
in Poland and Romania. When will this happen?
    General O'Reilly. Sir, we have selected the sites with 
their countries and the European Command, both locations, in 
Romania and in Poland. We have signed agreements with their 
countries for that.
    Romania will be fully operational in 2015, and Poland will 
be fully operational in 2018.
    Chairman Inouye. Thank you very much. Senator Cochran.
    Senator Cochran. General O'Reilly, the request before us 
proposes a reduction in the number of Aegis ships that are 
planned to be equipped with ballistic missile capability. The 
ships are going to be reduced under this budget request from 43 
to 36.
    How do these changes affect our missile defense mission, 
and are we putting at risk any important U.S. military assets 
by adopting this plan?
    General O'Reilly. Sir, that decision is made ultimately by 
the Chief of Naval Operations and the Joint Chiefs. As I said 
before, I provide technical support and things we can do to 
increase the capability of missile defense capable ships out 
there.
    An example of the type of capability I'm referring to is 
even though it still looks like the same Aegis ship of a year 
ago, several of our ships have now been upgraded with the 
capability to launch three times as many interceptors at once.
    We can use off board sensors. As I said last year, our 
system was designed to intercept missiles of about 1,000 
kilometers, and with the assistance of off board sensors (like 
AN/TPY-2 radar) we intercepted a missile of more than 3,000 
kilometers.
    So there are enhancements which MDA is developing for the 
Navy so that each ship can handle many more missiles at once, 
and also at much greater ranges.
    And that is the extent, that is the technical support I'm 
providing the Navy to make their final judgment on what's the 
right size of the fleet and how it's deployed.
    Senator Cochran. How would you describe the success of our 
testing program up to this point in our effort to deploy a GMD 
system? Could you explain what contingency plans we may be 
developing to provide homeland defense if there are test 
failures?
    General O'Reilly. Sir, the problems we've had in flight 
testing, and we've had two failures, were with the latest 
version of the front-end of the missile, the EKV.
    The older EKV is deployed today. It's been successful in 
five tests (three intercept tests and two other flight tests). 
We have never seen any indication of a problem on the ground 
with the older EKV. And we have a lot of confidence in that 
system today to protect the United States as they're fielded at 
Vandenberg Air Force Base and in Fort Greely, Alaska.
    However, we had obsolescence problems with continuing the 
older EKV design. We upgraded the design 4 years ago, and we've 
had two subsequent test failures. We have worked closely, and I 
firmly believe, with the best experts in the country, both 
government and industry, identifying where the problems were.
    We've addressed the problems. The first one was a quality 
control issue in the production plant. It has been validated 
that we have addressed that issue with the second test.
    And then the second problem, we literally found in space. 
We couldn't have identified it on the ground, and working with 
the best experts, including National Aeronautics and Space 
Administration and others, we believe we've addressed and 
resolved that issue. And we're out to prove it this year in our 
next flight test.
    Senator Cochran. You mentioned that you're going to 
increase the number of operational interceptors and accelerate 
the delivery of interceptor capabilities.
    Could you describe for us how this is going to be done, or 
what the timetable will be for accelerating the delivery of new 
sensors?
    General O'Reilly. Sir, from a point of view for the GMD 
system, we currently have production on hold until we prove 
we've resolved the production issues.
    But what I've done is use the work force and the supply 
chain to prepare for that production go ahead. So once we have 
a successful test, we can immediately go into refurbishing the 
missiles at Fort Greely and at Vandenberg, the ones that need 
it. Not all of them do.
    We have also enhanced the manufacturing capability at the 
site, the ability to upgrade missiles, so we can accelerate 
their upgrade without shipping them away from the missile 
fields.
    From the point of view of the delivery of our sensor 
systems, we have several of them that are ready today for 
operational deployment, and combatant commanders, we're in 
coordination with them. And we stand ready to support them and 
those in the Army and the Air Force who are associated with 
those deployments and the decisions made by the Joint Chiefs.
    Senator Cochran. Thank you.
    Chairman Inouye. Senator Shelby.
    Senator Shelby. Thank you, Mr. Chairman.
    General, I have a number of questions. We appreciate your 
service to the country and what you are doing as Director of 
the MDA.
    General O'Reilly, the State Department official, Ellen 
Tauscher, recently told a Russian newspaper that the 
administration was ``prepared to provide the Russian Government 
with written political guarantees regarding the U.S. and NATO 
Missile Defense Systems in Europe.''
    Have you been consulted regarding the form and substance of 
these guarantees, and, if so, what can you tell us about them?
    If not, do you think it would be advisable for the 
administration to consult with you and the Congress about any 
potential restrictions on the systems you're responsible for 
developing?
    Are you aware of this statement?
    General O'Reilly. Sir, we have been providing technical 
consultation to Secretary Tauscher and to the State Department. 
I am unaware of specific proposals.
    I will tell you that the nature of our work has typically 
been to address the Russian Government claims that we are 
building capability to upset the strategic balance.
    We've been able to analyze that and provide them data that 
show we are not, and the errors in their estimates, such as 
interceptor missiles flying faster than anyone's ever built, 
and so forth.
    So I am unaware, first of all, of what those specific 
proposals are, but also, I have never been given any 
instructions to consider limiting the development of our 
system.
    Senator Shelby. In other words, written guarantees that 
would limit our system?
    General O'Reilly. No, Sir. I'm not aware of any nor have I 
ever been given guidance to consider any ways of limiting our 
system.
    Senator Shelby. Do they have, to your knowledge, any--any 
is a big word I guess here--any technical capabilities that if 
shared through a cooperative arrangement could help you defend 
our homeland or our allies, or is that off the table?
    General O'Reilly. Sir, there are capabilities that we could 
benefit from. Primarily their sensors, their large sensors, 
that they have for their homeland defense or their protection 
in Russia.
    The location of Russia itself, looking through from Europe, 
all the way across through Asia, including Northeast Asia, 
would give us the opportunity to view threats very early in 
their flight.
    And, their ability to observe flight testing done by other 
countries would in fact provide us beneficial information.
    Senator Shelby. But you don't know of any information or 
promises that have been made to Russia that would compromise 
our ability to defend our interests in any way, do you?
    General O'Reilly. No, none whatsoever.
    Senator Shelby. Okay.
    In the GMD area, I know you face some challenges there. 
Does the MDA fiscal year 2013 budget request provide adequate 
funding to restore your confidence in all of the elements of 
the GMD system?
    In other words, under this budget, will the GMD industrial 
base remain robust enough to respond to unanticipated 
developments in the ICBM programs of our adversaries or 
potential adversaries?
    General O'Reilly. Sir, in our budget, we've requested the 
procurement of five additional GBIs, and one of the reasons is 
to ensure that our industrial base stays viable, and to leave 
open those options in the future if necessary.
    Also, our newest missile field has eight additional spare 
silos in it, so we are postured in a way, if we're supported in 
our budget request, to maintain our capability, our industrial 
base, and continue testing in order to validate our missile 
defense capability with GBIs.
    Senator Shelby. In the area of what we call the kill 
vehicle development, you referenced in your testimony some of 
the problems that we've experienced with this kill vehicle, EKV 
on the GMD system.
    I understand that you're working out some of those 
challenges, the problems most recently identified, and I hope 
that will be successful.
    But I'm sure this won't be the last problem, because this 
is something that's being developed. It's my understanding that 
EKV was never meant to be the permanent kill vehicle for the 
GMD, and that the current system is heavier, less capable, and 
less reliable than I think it can or should be.
    But with the cancellation in 2009 of the Multiple Kill 
Vehicle Program, we're locked into the current system for the 
foreseeable future; do you agree with that, or disagree?
    General O'Reilly. Sir, I do believe we can continue to 
improve the GMD EKV and make it a very viable, reliable system 
that we can rely on for decades.
    On the other hand, I also believe, as technologies have 
moved on, we haven't taken advantage of those technologies. I 
can----
    Senator Shelby. Could you talk more about the SM-3 IIB 
Program?
    General O'Reilly. Yes, Sir. The SM-3 IIB Program gives us 
the opportunity to continue supporting our aerospace industry 
to apply our latest technologies which, Sir, equates to smaller 
KVs and more capable KVs.
    Senator Shelby. It could possibly give you more than a 
single interceptor there, could it not?
    General O'Reilly. Sir, depending on the size of the 
booster, yes, it could, if you had a large booster and these 
small interceptors.
    Senator Shelby. In the area of THAAD--I know I'm touching 
on a number of subjects, but they're all in your domain----
    General O'Reilly. Yes, Sir.
    Senator Shelby. The administration's fiscal year 2013 
request included funding for production of 36 THAAD missiles 
annually. That rate is considerably below what the MDA had 
proposed in fiscal year 2012.
    Does that production rate, General, allow MDA to outfit 
THAAD batteries as they become available, or, on the other 
hand, will there be a lag time between when batteries are 
completed, and when the missiles to outfit them come off the 
assembly line?
    Will there be a gap there, or you're working to make sure 
there's not?
    General O'Reilly. Sir, at this time, we have realigned when 
the batteries will be available as well as the production of 
missiles for those batteries. And, no, there will not be a gap 
at this point in time.
    We have also increased the number of missiles in each THAAD 
battery. So, even with those higher numbers of missiles in each 
unit, we'll be able to make our delivery needs, and our foreign 
military sale also increases production capacity of THAAD.
    Senator Shelby. Can I get into the ship modifications of 
the Navy a little bit.
    Now, you believe that fielding the SM-3 IIB, it's a 
mouthful, SM-3 IIB, will require modifying the vertical launch 
system onboard the Aegis cruisers and destroyers?
    And, if so, is there currently a funded plan, since we're 
here in the Appropriations Defense Subcommittee, is there a 
funding plan in place to make the necessary conversions, you 
know, if we have to do that?
    And will those preparations be complete for the arrival of 
the production of missiles? Same thing. Will there be a gap 
there? Will you have the money, and what do you need?
    General O'Reilly. Sir, for the SM-3 IIB is in concept 
development. The amount of progress that's been made by 
industry in the last year on that program indicates that they 
have a lot of engineering capability that they have now bring 
to bear.
    And we've seen many different proposals. There are 
proposals that would require a modification, but there are 
also, as with every contractor, proposals that do not require a 
modification to a ship's vertical launch system.
    So, they're at the point where they have not finalized what 
they're going to propose to us, but we've seen both options.
    Senator Shelby. How big an improvement is this new system, 
the SM-3 IIB?
    General O'Reilly. Sir, it would fly at a tremendously 
higher velocity than the current SM-3.
    Senator Shelby. That's a quantum breakthrough, isn't it?
    General O'Reilly. Yes, Sir, and the fact that it's mobile, 
that, as a long-range threat missile is launched, it's like 
playing hockey. You can get into the position where you can 
intercept with a smaller missile and still have the same 
effect.
    Senator Shelby. But, basically, does it make us--you're in 
charge of it--make us more agile?
    General O'Reilly. Tremendously more agile, and we can surge 
a lot of missiles into a region like we do our other military 
capabilities if the need arise.
    Senator Shelby. What's your thought regarding Korea? You 
know, they've been in the news lately, about they had a failed 
launch. Of course, at some time, they might work those problems 
out.
    They'll have to do it themselves. We'll all watch that with 
interest. I know the Chairman, coming from the State of Hawaii, 
had to be more than watchful of that, but we all are interested 
in that, as they build a more robust missile with longer legs, 
and a danger to Hawaii, Alaska, and perhaps others.
    General O'Reilly. Yes, Sir. At the point I can say here in 
this hearing----
    Senator Shelby. Yes.
    General O'Reilly [continuing]. They obviously failed early 
to demonstrate their capability in their flight, once again. 
Our experience has been you need a lot of ground testing and 
flight testing in order to validate and have reliance in a 
capability.
    They do not. And it's been evident every time they test. 
And their progress has not been made apparent in this latest 
flight test.
    Senator Shelby. Thank you. Thank you, General, and thank 
you for your service to the country.
    Chairman Inouye. Thank you very much.
    I have one more question. And, if I may, I would like to 
submit the rest for your careful consideration.
    Recently, there were rocket attacks from Gaza on Israel. 
And the Iron Dome performed remarkably well. In fact, we've 
been advised that the success rate exceeded 90 percent.
    My question, number one is, what is the current status of 
Iron Dome? And, second, in light of this recent attack, are we 
prepared to provide more Iron Domes?
    General O'Reilly. Sir, I do not develop them. I am not part 
of the development of the Iron Dome system like I am 
responsible for the development, co-development, with other 
Israeli programs.
    But I do oversee our funding of the manufacturing of the 
Iron Dome system for the Israelis. Our assessment is, it's a 
very effective system, and they are also adding improvements to 
it in the near term to make it even more effective.
    I know the Department is considering right now several 
options on how to enhance our support to the availability of 
Iron Dome to the Israeli Government.
    Chairman Inouye. Senator Cochran.
    Senator Cochran. Mr. Chairman, I have another question.
    I would like to know, General O'Reilly, what your 
assessment is of the testing of the Arrow 3 Interceptor? I know 
there are plans to have additional tests. I wonder if you could 
give the subcommittee some idea of what the status of this 
effort is and what capability this system will provide?
    General O'Reilly. The Arrow 3 Program will provide a 
significant increase over the current Arrow Program. In other 
words, it will be able to fly farther, faster, intercept 
earlier in the flight of a threat missile, and effectively add 
another layer of defense to Israel.
    We work very closely with the Israelis to set up this 
program so that we have very identifiable milestones to show 
their progress.
    While we felt their original schedule was optimistic, and 
although it is turning out to be optimistic--they're not on the 
original track that they set up--they have made significant 
progress. They are achieving those milestones.

                     ADDITIONAL COMMITTEE QUESTIONS

    This year, we look forward to their first flight of their 
missile system. And so, we're very pleased with the progress 
they're making, and it's more along the lines of what we expect 
with our own programs.
    Senator Cochran. Good. Thank you very much, Mr. Chairman.
    [The following questions were not asked at the hearing, but 
were submitted to the Agency for response subsequent to the 
hearing:]

            Questions Submitted by Chairman Daniel K. Inouye

                     PACIFIC MISSILE RANGE FACILITY

    Question. General O'Reilly, can you provide the subcommittee a 
schedule of Terminal High-Altitude Area Defense (THAAD) tests that will 
be conducted at the Pacific Missile Range Facility (PMRF) over the next 
5 years?
    Answer. Now that THAAD is in production, the operation and 
development of test communities agree (as documented in Integrated 
Master Test Plan [IMTP] 12.1) that flight testing is limited to 
development capability increments (which there are two in the next 5 
years) and operational testing integrated with Aegis and PATRIOT. Thus, 
the developmental flight tests over the next 5 years are FTT-11a in the 
fourth quarter of fiscal year 2014 (4QFY14) and FTT-15 in the second 
quarter of fiscal year 2017 (2QFY17) at PMRF.
    THAAD will also be extensively tested using models and simulations 
(hardware in the loop and distributed testing using actual THAAD 
batteries), which have been accredited based on the THAAD's highly 
successful flight test program.
    Question. What is the current schedule for Aegis Ashore testing at 
PMRF, and how has it changed from last year?
    Answer. The previous (IMTP 11.1) and current (IMTP 12.1) Aegis 
Ashore Flight Test Schedules are contained in the below table. The only 
change from last year is the acceleration of AAFTM-02 by two quarters 
(from the second quarter of fiscal year 2015 (2QFY15) to 4QFY14).

                    AEGIS ASHORE FLIGHT TEST SCHEDULE
------------------------------------------------------------------------
                                         Date  (IMTP       Date  (IMTP
Flight Test        Description         11.1)  Approved   12.1)  Approved
  (FY12-17)                                5/31/11           3/1/12
------------------------------------------------------------------------
AACTV-01 E1 Aegis Ashore will                2QFY14            2QFY14
             engage a simulated
             Dynamic Test Target
             and launch an SM-3
             Controlled Test
             Vehicle (CTV) to
             check out the
             installation of the
             land-based Aegis
             Weapon System and VLS
             Launcher.
------------------------------------------------------------------------
   AAFTM-01 Aegis BMD Ashore will            4QFY14            4QFY14
             detect, track and
             engage an air-
             launched MRBM target
             with an SM-3 Blk IB
             missile and track
             data provided by an
             up-range Aegis BMD
             ship.
------------------------------------------------------------------------
   AAFTM-02 Aegis BMD Ashore will            2QFY15            4QFY14
             detect, track and
             engage an air-
             launched MRBM target
             with an SM-3 Blk IB
             missile and track
             data provided by an
             up-range Aegis BMD
             ship.
------------------------------------------------------------------------
     FTO-02 This operational                 4QFY15            4QFY15
             flight test event
             will be executed
             across two test
             ranges in two
             multiple simultaneous
             engagements against
             an SRBM and three
             MRBMs. Aegis Ashore
             will detect, track
             and engage an MRBM
             target with a SM-3
             Blk IB missile. Aegis
             BMD 5.0 ship will
             detect, track and
             engage an MRBM with a
             SM-3 Blk IB missile.
             THAAD will engage an
             MRBM. Patriot will
             engage the SRBM.
------------------------------------------------------------------------
            Integrated Master Test Plan (IMTP)
            Medium Range Ballistic Missile (MRBM)
            Short Range Ballistic Missile (SRBM)
            Terminal High Altitude Area Defense (THAAD)

    Question. I understand that within a few seconds of an SM-3 missile 
launch from the test Aegis Ashore facility on PMRF, it must be 
determined that the missile is moving in the intended direction, and, 
if not, the missile must be quickly destroyed. For safety 
considerations, PMRF is likely to require an exceptionally fast 
capability that can accurately determine missile condition and location 
during the first few seconds of launch, something that radar alone may 
not be able to address. This is a critical requirement for PMRF and for 
safety considerations in any European country where the Aegis Ashore is 
deployed, since it will be in proximity to populated areas. Please 
provide an update on how the Navy and MDA will address this safety 
concern.
    Answer. The Pacific Fleet Command has agreed to allow test firings 
from the Aegis Ashore Missile Defense Test Complex at PMRF only upon 
successful development, integration, and certification of the range 
flight safety upgrades. These upgrades provide PMRF with the 
independent capability to take a flight termination action as early as 
2.5 seconds after launch (confining hazards well within PMRF's launch 
hazard area).
    The flight safety upgrades include:
    --Modification to the SM-3 Block IB missile's flight termination 
            system that allows a termination command to be received 
            within one second after launch;
    --Procurement, integration and certification of two Early Launch 
            Tracking Radars (ELTRs) that will provide missile position 
            and velocity no later than one second after launch; and
    --Development, integration, and certification of a Safety 
            Augmentation System that will use missile position data 
            from the ELTRs and predetermined safety boundary conditions 
            based on test mission scenarios to make a decision on 
            missile heading and send a flight termination command if 
            the missile is headed outside the predetermined safety 
            boundaries.
    Status.--Acquisition contracts are in place, development plans are 
defined, designs have been approved, and certification test plans are 
in development for all flight safety upgrades. The ELTRs will be 
developed and delivered to White Sands Missile Range for initial 
testing and integration with targets of opportunity commencing in the 
second quarter of fiscal year 2013 (2QFY13). The radars will then be 
transported to PMRF for final range certification during 4QFY13, in 
time to support the first Aegis Ashore flight test (AA-CTV-01) in 
2QFY14.
    Fiscal year 2012 funds initiated the development of these safety 
upgrades. Fiscal year 2013 funding, necessary to complete these safety 
upgrades, was requested in the President's fiscal year 2013 budget.

                          SUBCOMMITTEE RECESS

    Chairman Inouye. All right. Thank you very much.
    On behalf of the subcommittee, I thank you for your 
testimony and for your exemplary service. We will be looking at 
your request very carefully, and we look forward to working 
with you, Sir.
    The Defense Subcommittee will reconvene at 10:30 a.m. on 
April 25 for a classified hearing on the national and military 
intelligence programs. We stand in recess.
    [Whereupon, at 11:08 a.m., Wednesday, April 18, the 
subcommittee was recessed, to reconvene subject to the call of 
the Chair.]
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