    [House Hearing, 113 Congress]
    [From the U.S. Government Publishing Office]

                             [H.A.S.C. No. 113-51]

                          ACQUISITION AND DEVELOPMENT
                            CHALLENGES ASSOCIATED WITH
                              THE LITTORAL COMBAT SHIP
                                   __________

                                    HEARING

                                   BEFORE THE

                             SUBCOMMITTEE ON SEAPOWER AND
                                   PROJECTION FORCES

                                     OF THE

                          COMMITTEE ON ARMED SERVICES
                            HOUSE OF REPRESENTATIVES

                        ONE HUNDRED THIRTEENTH CONGRESS

                                 FIRST SESSION

                                   __________

                                  HEARING HELD
                                 JULY 25, 2013

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                 SUBCOMMITTEE ON SEAPOWER AND PROJECTION FORCES

                      J. RANDY FORBES, Virginia, Chairman

    K. MICHAEL CONAWAY, Texas            MIKE McINTYRE, North Carolina
    DUNCAN HUNTER, California            JOE COURTNEY, Connecticut
    E. SCOTT RIGELL, Virginia            JAMES R. LANGEVIN, Rhode Island
    STEVEN M. PALAZZO, Mississippi       RICK LARSEN, Washington
    ROBERT J. WITTMAN, Virginia          HENRY C. ``HANK'' JOHNSON, Jr.,
    MIKE COFFMAN, Colorado                   Georgia
    JON RUNYAN, New Jersey               COLLEEN W. HANABUSA, Hawaii
    KRISTI L. NOEM, South Dakota         DEREK KILMER, Washington
    PAUL COOK, California                SCOTT H. PETERS, California
                   David Sienicki, Professional Staff Member
                   Vickie Plunkett, Professional Staff Member
                             Nicholas Rodman, Clerk

                                C O N T E N T S

                                  ----------

                         CHRONOLOGICAL LIST OF HEARINGS
                                      2013

                                                                       Page

    Hearing:

    Thursday, July 25, 2013, Acquisition and Development Challenges
      Associated with the Littoral Combat Ship.......................     1

    Appendix:

    Thursday, July 25, 2013..........................................    41
                                  ----------

                            THURSDAY, JULY 25, 2013
      ACQUISITION AND DEVELOPMENT CHALLENGES ASSOCIATED WITH THE LITTORAL
                                  COMBAT SHIP
                  STATEMENTS PRESENTED BY MEMBERS OF CONGRESS

    Courtney, Hon. Joe, a Representative from Connecticut,
      Subcommittee on Seapower and Projection Forces.................     3
    Forbes, Hon. J. Randy, a Representative from Virginia, Chairman,
      Subcommittee on Seapower and Projection Forces.................     1

                                   WITNESSES

    Francis, Paul L., Managing Director, Acquisition and Sourcing
      Management, U.S. Government Accountability Office..............     9
    Hunt, VADM Richard W., USN, Director, Navy Staff, Department of
      Defense........................................................     4
    Stackley, Hon. Sean J., Assistant Secretary of the Navy
      (Research, Development and Acquisition), Department of Defense.     6

                                    APPENDIX

    Prepared Statements:

        Forbes, Hon. J. Randy........................................    45
        Francis, Paul L..............................................    62
        Stackley, Hon. Sean J., joint with VADM Richard W. Hunt......    47

    Documents Submitted for the Record:

        [There were no Documents submitted.]

    Witness Responses to Questions Asked During the Hearing:

        Mr. Forbes...................................................    77

    Questions Submitted by Members Post Hearing:

        Mr. Forbes...................................................    81
        Mr. Langevin.................................................    83
        Mr. McKeon...................................................    81
        Ms. Speier...................................................    89
        Mr. Wittman..................................................    84
      ACQUISITION AND DEVELOPMENT CHALLENGES ASSOCIATED WITH THE LITTORAL
                                  COMBAT SHIP

                                  ----------

                      House of Representatives,
                           Committee on Armed Services,
                Subcommittee on Seapower and Projection Forces,
                               Washington, DC, Thursday, July 25, 2013.
        The subcommittee met, pursuant to call, at 9:30 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 SEAPOWER AND
                           PROJECTION FORCES

        Mr. Forbes. I want to welcome all our Members and our
    distinguished panel of experts to today's hearing that will
    focus on the acquisition and development challenges associated
    with the Littoral Combat Ship [LCS].
        Concurrent with our hearing this morning, the Government
    Accountability Office [GAO] released a report entitled
    ``Significant Investments in the Littoral Combat Ship Continue
    Amid Substantial Unknowns about Capabilities, Use and Cost.''
    In this report GAO expresses concern about the design stability
    of the platform and concern about the program goals of the
    mission modules. Until these issues are clarified, GAO has
    recommended Congress consider restricting future funding to the
    program for the construction of additional seaframes until
    certain conditions are met.
        This is not the first time that we have received reports
    critical of the LCS program. The Perez report was a report
    commissioned by the Vice Chief of Naval Operations to assess
    and review the Navy readiness to receive, employ, and deploy
    the Littoral Combat Ship. This report, conducted in early 2012,
    was also critical of the LCS program both in terms of concepts
    and implementation. Specific concerns included in this report
    include the concept of operations, manning, maintenance,
    modularity, mission package capability, training, and
    commonality were identified.
        The Director, Operational Testing and Evaluation [DOT&E]
    has also expressed concerns about the survivability of the
    Littoral Combat Ship and indicated that LCS 1 is not expected
    to be survivable in combat, and unable to maintain mission
    capability after taking a significant hit in a hostile combat
    environment. The testing program associated with this first
    class is also lagging.
        I would be remiss if I did not mention the engineering
    casualties that LCS 1 is encountering during the deployment to
    Singapore. While expected in the first class, the sheer number
    of casualties associated with LCS 1 is troubling and needs to
    be quickly addressed. At a time of reducing resources, the Navy
    is planning to even more heavily rely on this lower cost
    alternative. I believe it is incumbent on this subcommittee to
    ensure that we have the most capable lower cost alternative
    that is relevant to the combatant commanders in time of
    conflict.
        I also believe that criticism of the LCS program is
    warranted. From this most recent GAO report to the Perez
    report, and even DOT&E assessment, they all provide an
    alternative view as to how to best manage the acquisition and
    development of this effort. But let me emphasize that none of
    these reports disputes the necessity to rapidly field the
    capabilities proposed by the Littoral Combat Ship, and I look
    forward to doing my part to make sure that we methodically and
    expeditiously field the right LCS capability to the fleet in
    the years ahead.
        Today we are honored to have as our witnesses the Assistant
    Secretary of the Navy for Research, Development, and
    Acquisition, the Honorable Sean Stackley--Mr. Stackley, thank
    you for being here and for your dedication to our country; the
    Director of the Navy Staff and Chairman of the Littoral Combat
    Ship Council, Vice Admiral Richard Hunt, and, Admiral Hunt, we
    thank you for your service to this country and for taking time
    to be with us today; and the Managing Director of Acquisition
    and Sourcing Management, Government Accountability Office, Mr.
    Paul Francis. And, Mr. Francis, thank you and your entire team
    for the good work that they do in bringing these issues
    forward.
        And we thank you all for being here. I couldn't think of a
    better panel to assist our subcommittee in reviewing this
    issue, and I hope that at the end of this hearing, that we will
    be best able to provide a firm direction as to the path forward
    with the LCS program.
        And before I recognize Mr. Courtney, I want to just make
    one other comment, and it is this: I hear from time to time
    people saying, well, isn't this really problematic, because we
    have a difference within the Navy even about the LCS; that we
    have people that are raising different issues, and they are not
    on the same sheet of music? And I want to just tell you all I
    take a totally different view of that. I want to applaud you
    all for being able to come to the table, having divergent
    points of view, being willing to really ask the tough questions
    and put them on the table, and I think that is what makes our
    Navy so strong and capable is our ability to do that. So I just
    want to thank you all for your willingness to not come in here
    in an adversarial role where each person has to put forward
    their own side, but that we can really ask these tough
    questions and get answers, because in the end we want the best
    vessels for our Navy and for the American people, and I want to
    applaud you all for trying to do that.
        And after saying that, it is my privilege now to recognize
    the acting ranking member, I guess we would say today, or the
    vice ranking member Mr. Courtney, someone who is very committed
    to the Navy, and for any remarks that he might have. Mr.
    Courtney.
        [The prepared statement of Mr. Forbes can be found in the
    Appendix on page 45.]

         STATEMENT OF HON. JOE COURTNEY, A REPRESENTATIVE FROM
      CONNECTICUT, SUBCOMMITTEE ON SEAPOWER AND PROJECTION FORCES

        Mr. Courtney. Thank you, Mr. Chairman, and thank you for
    organizing this hearing. And I couldn't agree with you more. We
    have an outstanding panel here today, who have been here in the
    past to talk about this issue over the last number of years,
    and, again, we look forward to an update, particularly in light
    of the GAO report.
        Today the subcommittee meets in open session to hear
    testimony on the acquisition and development challenges
    associated with the Littoral Combat Ship. The LCS is a critical
    element of the Navy's long-term shipbuilding plan and our
    national security strategy. However, 9 years into the program,
    many of us on this subcommittee and many of our colleagues in
    the House have serious questions regarding the LCS concept of
    operations; its manning, maintenance, and sustainment concepts;
    and its survivability in a combat environment. Given how
    critical this platform is to the Navy's ability to meet
    critical-mission areas in the decades ahead, it is important
    that we get this right.
        Based on the Navy's assurances that its revised acquisition
    strategy would provide an affordable transformational ship for
    the future, Congress agreed to funding additional LCS seaframes
    at the same time that the Navy continued its planned period of
    experimentation, testing, and evaluation. Now, however, we find
    a program facing cost growth, schedule delays, and problems
    with delivering intended capabilities, as GAO noted in their
    report released today. These issues and others lead us to
    examine where the program stands now, where it is heading, and
    what steps all of us here today can do to ensure its success.
        The GAO's report that we will discuss today raises several
    important questions that the Navy and this panel will need to
    sort out. For instance, is proceeding with procurement of so
    many seaframes so far ahead of availability of the
    antisubmarine, mine countermeasure, and surface warfare mission
    modules the best and most cost-effective approach?
        Second, with regards to the GAO's recommendation that
    Congress halt progress on future ships pending further study
    and oversight, what impact would such an approach have on
    existing contracts and ongoing efforts to reduce costs?
        Third, is it good fiscal judgment and sea-building practice
    to continue with the planned purchase of seaframes over the
    next 2 to 3 fiscal years when design changes that could result
    from further developmental and operational testing and
    evaluation could drive up costs?
        With regards to recent news from the LCS deployment in
    Singapore, how should Congress respond to the reliability
    issues with the Freedom's variant diesel engines, which have
    experienced multiple instances of loss of power during
    deployments?
        Finally, given the expertise and experience of our
    witnesses today, I hope you can help us put the challenges of
    this LCS in proper historical context relative to those
    experienced in other shipbuilding programs in the earlier
    years. Ultimately this panel will have to make some tough
    choices in the coming years regarding the right balance between
    getting the fleet, the platforms, and capability it so urgently
    needs, while ensuring that we do all we can as good stewards of
    our increasingly limited fiscal resources. I look forward to
    hearing from our witnesses and to a robust discussion of this
    important program.
        Thank you, Mr. Chairman. I yield back.
        Mr. Forbes. Thank you, Mr. Courtney.
        Just a couple of procedural matters. I ask unanimous
    consent that nonsubcommittee members, if any, be allowed to
    participate in today's hearing after all subcommittee members
    have had an opportunity to ask questions. Is there any
    objection?
        Without objection, nonsubcommittee members will be
    recognized at the appropriate time for 5 minutes.
        I also ask unanimous consent that other committee and
    noncommittee members be allowed to participate in today's
    hearing after all subcommittee members have had an opportunity
    to ask questions. Is there any objection to that?
        Without objection, nonsubcommittee members will be
    recognized at the appropriate times for 5 minutes.
        With that, Secretary, we are glad to have you here, and we
    are going to give you the floor.
        Secretary Stackley. Mr. Chairman Forbes, Representative
    Courtney, distinguished members of the subcommittee, thank you
    for the opportunity to appear before you today alongside Vice
    Admiral Hunt to address the Littoral Combat Ship program. With
    the permission of the subcommittee, I propose to provide a
    brief statement and submit a separate formal statement for the
    record.
        Mr. Forbes. And your written statements of all the
    witnesses will be made part of the record.
        Secretary Stackley. Thank you, sir.
        In view of the witnesses today, myself and Vice Admiral
    Hunt, I am going to ask that Vice Admiral Hunt provide his
    statement first to address the need for LCS in terms of
    requirements, and I will follow to talk about where we are
    programmatically and our proposal for the way ahead.
        Mr. Forbes. And we are happy to do that. Admiral, as we
    mentioned at the beginning, we appreciate your service. Thank
    you for being here, and we would like to turn the floor over to
    you then right now.

     STATEMENT OF VADM RICHARD W. HUNT, USN, DIRECTOR, NAVY STAFF,
                         DEPARTMENT OF DEFENSE

        Admiral Hunt. Thank you, Chairman Forbes.
        Mr. Forbes. Admiral, if you could pull that mike just a
    little bit closer. I know they are kind of tricky sometimes.
    Make sure it is turned on.
        Admiral Hunt. How about this?
        Mr. Forbes. That is great.
        Admiral Hunt. Chairman Forbes, distinguished members of the
    subcommittee and other distinguished Members, first of all, I
    want to thank you for holding this hearing on the Littoral
    Combat Ship, and I appreciate the opening statements. It is
    exactly where we want to go is take this to the next level and
    make sure we have got the right program for the fleet, and I am
    personally confident that we do.
        In my years in the Navy, I have had the honor of serving as
    a numbered fleet commander. I was the 3rd Fleet commander that
    took delivery of USS Freedom several years ago. I have been the
    Surface Force Type commander, which is responsible for man
    training and equipment of all of our surface Navy ships. I have
    had command of a frigate; I have had command of a cruiser; a
    strike group command. But perhaps most insightful for the
    hearing that we are having today is I was a precommissioning
    engineer on USS Underwood, FFG-36, and lived the life of
    introducing a new ship class to the fleet with the challenges
    that that brings.
        I think really the grouping of those past experiences give
    me a kind of a unique perspective to address the topic that we
    are looking at today.
        The Littoral Combat Ship provides our Navy with vitally
    important capabilities and is key to the future of all naval
    operations. LCS, with its speed, shallow draft, and
    persistence, coupled with the modular architecture, offers the
    ability to operate in the inshore environment and the near-land
    battlespace. It will take us to improve our Navy's global reach
    further than we have today. Its affordable and its
    reconfigurable mission--focused-mission warship design is core
    to handling the swarming surface threat, the countermine
    challenges that we have, and submarines in the contested
    littorals. LCS meets that threat today and has the flexibility
    to continue to improve and face upcoming threats in the future.
        We certainly intend to take LCS into harm's way. LCS is a
    warship that has credible combat systems. If damaged in combat,
    she is built to survive and then withdraw. In terms of aviation
    and unmanned system, this ship has more aviation and off-board
    vehicle capability than any surface combatant of comparable
    size in the world.
        I want to be clear on this fact: LCS will deploy with
    effective mission modules. Each of LCS's three mission
    modules--the antisurface warfare, the mine countermeasures, and
    antisubmarine warfare--offers credible combat power greater
    than what we have today.
        With that in mind, I would like to give just a quick
    thumbnail sketch of these capabilities. I would offer I have
    had the opportunity to talk to all of our forward fleet
    commanders, the 7th Fleet commander in the western Pacific, the
    5th Fleet commander in the Gulf, and the 6th Fleet commander in
    the Mediterranean, and what I am about to say they all agree
    with and recognize the importance.
        For the antisurface warfare capability, we provide an armed
    SH-60 Romeo helicopter. We will eventually provide Fire Scout
    VTUAV [Vertical Take-Off and Landing Tactical Unmanned Aerial
    Vehicle]. It comes with two highly effective 30-millimeter
    cannons, and that supplements the core 57-millimeter main gun.
    This gives LCS a capability that is equal to or exceeds any of
    our small combatants that we have today.
        The package additionally includes two 11-meter RHIBs, which
    are rigid hull inflatable boats, and comes with a dedicated
    boarding team when configured in this manner. The 11-meter
    RHIBs are a great enhancement over the 7-meter RHIBs that we
    have predominantly in the fleet and allow us to conduct
    maritime interdiction operations in antipiracy actions, a point
    made very specifically to me the other day by our 5th Fleet
    commander.
        For mine countermeasures [MCM], the initial increment will
    be about twice as effective as what we have on our MCM-1 class
    Avenger mine sweeps, and it comes with more precise sonar
    capability for rapid hunting and, therefore, avoiding of mines,
    which is clearly where we are going in the 5th Fleet AOR [area
    of responsibility]. As we go through the enhancements, the
    capability will expand to about three times the capability of
    what we currently have in inventory, and we do that without
    putting the ship and, therefore, our sailors into the
    minefield, enhancing their safety.
        And finally, our antisubmarine warfare capabilities are
    equally impressive. It comes both with passive and active towed
    arrays and variable-depth sonars to provide a tremendous
    capability not only where we could escort our battle groups at
    sea, but specifically designed to be effective in the littoral.
        So we have really developed and produced a terrific
    capability. It is the right thing to do, and I stand forward
    looking forward to your questions here as we go throughout the
    hearing.
        Thank you.
        [The joint prepared statement of Admiral Hunt and Secretary
    Stackley can be found in the Appendix on page 47.]
        Mr. Forbes. Admiral, thank you. I am sure the Members are
    going to look forward to asking you a number of questions in
    just a few moments.
        And, Mr. Secretary, tell us the status of the program now.
    We know the admiral has told us why we need it, and let us hear
    where we are going.

    STATEMENT OF HON. SEAN J. STACKLEY, ASSISTANT SECRETARY OF THE
      NAVY (RESEARCH, DEVELOPMENT AND ACQUISITION), DEPARTMENT OF
                                DEFENSE

        Secretary Stackley. Yes, sir. Yes, sir, thank you.
        And I am going to start by putting this in the context of
    the overall shipbuilding requirements. So I will start with the
    fact that today's Navy is a battle force of 286 ships, about
    half of which are underway on any given day, providing maritime
    security, missile defense, intelligence, surveillance,
    reconnaissance as needed, where needed. They are conducting
    antipiracy patrols, global partnership stations, humanitarian
    assistance, and all the while they are training and repairing
    for the next deployment, the next operation.
        And whether measured by the breadth and pace of today's
    operations or by the defense strategy's call for increased
    naval presence from the Middle East to the Pacific, the broad
    range of missions your Navy is called upon to perform relies
    upon a fleet that--as outlined by the CNO [Chief of Naval
    Operations] in his report to Congress earlier this year--a
    fleet that is globally present, operating forward, a fleet made
    of a balanced mix of ships, a fleet that is 306 ships in
    number.
        The Navy's objective to reach the 300-ship level by the end
    of this decade is more an imperative than a goal if your fleet
    is to meet the missions called for by the Nation, while
    sustaining the operational tempo that we have all grown to
    expect of our ships and sailors. This requires that we build
    that balanced mix of ships per the CNO's requirements at a rate
    of about 10 ships per year, and that we not merely control
    costs, but that we drive down costs in each of our new
    construction programs.
        The Littoral Combat Ship, or LCS, is central to this
    strategy. The LCS's high speed and low draft design make the
    ship uniquely qualified for operations ranging from open ocean
    to coastal or littoral waters. The investment in automated
    systems and low-maintenance design make the ship capable of
    operations at manning levels of less than half that of the
    ships she will replace. The seaframe designed to naval vessel
    rules with an installed combat system capable of meeting the
    ship's self-defense requirements provides a level of
    survivability matched to the threat in which she will operate.
    And, most importantly, the modular mission package design, call
    it flexibility, call it agility, the LCS's ability to put to
    sea with a warfare system and crew tailored to meet its
    assigned mission is a classic force multiplier.
        Today three distinct mission packages are in development
    and testing: surface warfare mission package designed to meet
    the emerging threat proposed by fast inshore attack craft; mine
    countermeasures mission package designed to close a critical,
    absolutely critical, warfighting gap in mine warfare; and an
    antisubmarine warfare mission package designed to provide
    greater capacity to combat the growing threat posed by the
    proliferation of increasingly quiet attack submarines.
        Each of these mission packages has made significant strides
    this past year towards respective operational test milestones.
    In fact, today the USS Freedom, LCS 1, deployed to the western
    Pacific with the first increment of the surface warfare mission
    package on board, is meeting the combatant commander's demands
    in that theater of operations. Meanwhile, the USS Independence,
    LCS 2, operating in her home port of San Diego, is serving as
    the operational test ship for the first increment of the mine
    countermeasures mission package and soon will be joined by the
    USS Fort Worth, LCS 3, operating with the developmental model
    of the next increment of the surface warfare mission package.
        The Navy's strategy for delivering of these mission modules
    is a textbook case of best practices. First, the mission
    modules are designed with an open architecture, which provides
    the ability to upgrade rapidly as new technologies emerge, and
    which provides the ability to compete future upgrades
    throughout the ship's life.
        Second, mission modules are integrated into the ship via
    standard interfaces, which means that upgrades to the mission
    modules are accomplished without impacting the ship. This
    breakthrough design approach provides the LCS with the unique
    ability to upgrade its mission systems without lengthy, costly,
    disruptive depot modernization periods required by other ship
    classes.
        Third, mission modules can be rapidly swapped out if called
    for by a change to the ship's anticipated mission.
        And fourth, employing these design characteristics, the
    Navy is able to field mission packages utilizing an incremental
    fielding plan that manages risks, while providing urgently
    needed capability and capacity.
        Specifically, by leveraging mature technologies and off-
    the-shelf systems, the first increments of LCS mission packages
    provide much-needed capacity, exceeding that available in the
    fleet today. Meanwhile we continue to develop new technologies
    and systems needed to fill gaps in today's warfighting
    capabilities for incorporation in later increments.
        Today the mission packages are on track to deliver the
    capability needed by the Navy, and they are doing so within the
    cost targets established for the program. In fact, the greatest
    risk to our mission package program is not technical. Today the
    greatest risk is that posed by the disruption and delay caused
    by stop and start, and slowdown caused by continuing
    resolutions, sequestration, and other budget reductions.
        With specific regard to LCS ship or seaframe production,
    lessons learned from the lead ships have been thoroughly
    incorporated into the production plan. Lead ship design
    deficiencies have been corrected, and the design is very
    stable, very stable, with design changes reduced by 80 to 90
    percent in follow ships.
        The significant facility improvements and investment in
    workforce training made by each shipyard has resulted in
    greatly improved efficiency in each ship's construction. The
    vendor base is leveraging the stability provided by the long-
    term LCS contract to drive down costs. By every measure quality
    is high, meeting and exceeding standards set by the Naval Sea
    Systems Command and the Navy's Board of Inspection and Survey,
    and overall the dual-block buy, contracts for 10 ships over 5
    years at each of the shipbuilders, is delivering on the $2.9
    billion savings announced at award.
        In summary, LCS provides the capacity the Navy needs today
    to fill critical gaps in our warfighting ability, and as we
    continue to field future increments of LCS mission packages, we
    will be able to provide much-needed capabilities that do not
    exist in the fleet today.
        The LCS program was initiated with critical flaws, we are
    all aware of that; however, current execution of the LCS
    program is following best practices in acquisition. Holding
    requirements stable, holding the design stable, leveraging
    competition to the fullest, our costs are under control and
    greatly improved, and contained within fixed-price contracts.
    Risk is well managed by leveraging mature technologies and
    employing an incremental approach to upgrading the program's
    modular mission systems. Now is not the time to slow the
    program and add costs.
        We have decisions to make before we proceed in fiscal year
    2016 beyond the current block buy. We will take a fully
    informed business and warfighting-based approach to these
    decisions, and we are committed to working with Congress to
    provide transparency as we formulate these decisions.
        This is our most affordable warship program. It is on a
    critical path to meeting the Navy's force structure
    requirements as outlined by the Chief of Naval Operations.
    There are challenges yet ahead, and there is need for further
    improvement, as there is in each of our shipbuilding and
    aviation programs, but we believe we have properly assessed
    these challenges, and we are going about the business of
    meeting these challenges with a degree of rigor and discipline
    and, too, urgency matched to the critical need for these ships
    in the fleet.
        We thank you for your past support, we urge your continued
    support, we welcome your oversight, and we look forward to
    answering your questions.
        Mr. Forbes. Thank you, Mr. Secretary.
        [The joint prepared statement of Secretary Stackley and
    Admiral Hunt can be found in the Appendix on page 47.]
        Mr. Forbes. Mr. Francis.

     STATEMENT OF PAUL L. FRANCIS, MANAGING DIRECTOR, ACQUISITION
     AND SOURCING MANAGEMENT, U.S. GOVERNMENT ACCOUNTABILITY OFFICE

        Mr. Francis. Thank you, Mr. Chairman.
        Mr. Chairman, Mr. Courtney, members of the subcommittee and
    other Members, good morning. And I am happy to be here to
    participate in the discussion of the Littoral Combat Ship. I
    think we are all well aware of the unique capabilities and
    features that the ship offers, and I think we would all like to
    see the ship reach its full potential. I will give you a quick
    snapshot of where we see the program today in terms of
    seaframes, mission modules, and the concept of operations.
        I think of the three, the seaframes are the furthest along,
    and I would agree with what Mr. Stackley said about the
    production of the ships being under control, costs being under
    control; I think design in pretty good shape. There is
    significant testing yet to be done, shock trials and
    survivability trials, and then testing out the combat system,
    and the Navy is looking at some design changes for the future,
    doing some studies on that. So we will need to see the effects
    of those.
        On the mission modules, they have had a much tougher go of
    it. They have not done that well in testing. There is quite a
    bit to go yet on the mission modules, and I wouldn't say that
    the configuration of the modules, particularly regarding the
    mine countermeasures, is stable at this point.
        I think the long pole in the tent right now is the concept
    of operations, which involves the manning, the swapping out of
    the mission modules in theater, and the maintenance support
    concept, which is basically off the ship and on shore. The ship
    itself is not going to have much onboard maintenance
    capability. And while I see the seaframes and the modules as
    giving the ship its technical ability, it is really the CONOPS
    [concept of operations] that give it its capability. So those
    abilities won't be able to be brought to bear unless the
    support of the ship works. So at this point I think one can be
    hopeful, but not yet confident that the ship is going to
    deliver on its full capability.
        Let me switch now briefly to oversight. In my view, the
    primary oversight mechanisms that we applied to major weapons
    systems have not been applied on the LCS program, and let me
    give you some examples. When a program starts, you would do
    typically an analysis of alternatives and then pick the best
    alternative. In the case of LCS, the ship was picked first, and
    then the analysis of alternatives done afterwards.
        In shipbuilding you have a sequence where you do design,
    and then you do construction. When we started LCS, we did
    design and construction concurrently.
        In shipbuilding you have a Milestone B decision that
    authorizes the detailed design and construction of the lead
    ship. When we had Milestone B on the LCS, we had already 24
    ships under contract. On the mission modules, those are weapons
    systems, Milestone B on a weapons system authorizes the
    beginning of engineering development. Now, we haven't had a
    Milestone B on mission modules yet, but two of them are already
    in production.
        And then finally, law and policy says before you go into
    full-rate production, a program has to go through operational
    testing. I would say that the LCS today is in full-rate
    production. We authorized four ships a year in 2012, which is
    the full rate anticipated, yet operational testing is not going
    to occur until 2019.
        So, in my view, the strategy up to this point on LCS has
    been buy before fly, and at this point we are producing at full
    rate, yet we are still experimenting with the ship. I think the
    Department of Defense has instituted a number of mechanisms to
    try to do reviews, cost studies, Defense Acquisition Board
    reviews every year, but I believe, in my view, that these are
    workarounds for the oversight mechanisms that were not used.
        So what do we do now? I think we have to look at the
    program the way it is. It is a ship in full-rate production,
    but its operational effectiveness will not be demonstrated for
    years to come. That is where we are. We have to look at the
    ship today as being substantially bought already, so you are
    going to have to provide the support it requires, whether it is
    crew changes, whether it is mission module updates, whether it
    is additional spares. We already know we need additional
    manning on shore to do the offshore maintenance. So you will
    have to provide that for the ships already done.
        In my mind, the report we have issued today makes rather
    modest recommendations on the program. We say, put strings on
    the fiscal year 2014 money, and have the Navy come back and
    tell you what design changes are we anticipating on the ship.
    We also ask the Navy to come back and say--to tell you what are
    the relative advantages and disadvantages of each ship as they
    perform each mission. Now, the Navy is already doing studies on
    these. It should be pretty easy to do, and you ought to know
    it, so I don't see that as halting the program. These are
    things I think the Navy could do as a condition for getting the
    money.
        We have also made other recommendations that would be
    relevant to the 2016 block buy. This is the next block of
    ships. It is a very big decision coming up. What we have
    recommended is keep the production of the ships to a minimum
    rate during that block buy at least until we get through
    operational testing, and in line with that, we say, hey, keep
    the mission modules' production rate minimum so--just enough to
    support testing.
        Now, the Department does not agree with us on that and
    says, hey, we are in full rate, we are making four a year, we
    have great prices. If we slow it down, prices are going to go
    up, and we have to produce the mission modules to keep pace
    with the ships. I would just ask you to be wary of that dynamic
    because it creates, in my mind, irreversible momentum to go
    forward and can tie your hands. So just be wary of that.
        So what can you do? I think about you having a very good
    window for oversight over the next 2 years. In spring of 2015,
    you will have to consider the Navy's proposal for the 2016
    block buy, so your dates actually come a little bit faster than
    you might otherwise think. At that point I think you can employ
    some of the mechanisms that we have recommended on the 2014 and
    2015 buy to get the Navy to provide you information that you
    need to make the decisions on those two ships, and I would pay
    particular attention to what the Navy proposes for the block
    2016 buy. For example, if that proposal came in for a large
    number of ships or a number of ships that, say, went beyond
    operational testing, then I think your hands really could be
    tied in oversight because we will have locked in the bulk of
    the program.
        So in closing I would say you have some leverage between
    now and the spring of 2015. Use it. And I wouldn't be too
    overcome by concerns that this is going to be devastating to
    the program. I don't think it is.
        So, Mr. Chairman, Mr. Courtney, that concludes my remarks.
        Mr. Forbes. Mr. Francis, thank you.
        [The prepared statement of Mr. Francis can be found in the
    Appendix on page 62.]
        Mr. Forbes. And to all of our panelists, we want to just
    tell you how much again we appreciate you being here. We also
    understand you represent large teams behind you. As we thank
    you, we are also thanking the professionalism that they bring
    today.
        I want to just tell you, today is not a deposition, so we
    don't want to have a situation we are asking questions, and you
    feel like you have to get out without answering anything in a
    short period of time. We want you to have that discussion.
        I am going to defer all of my questions because this is one
    of the most bipartisan subcommittees probably we have in
    Congress. We have enormous respect for each other. A lot of
    expertise represented in this room today. I want to make sure
    all of our Members can ask their questions.
        With that, I would like to ask unanimous consent that we
    can reduce our time from 5 minutes to 4 minutes, because I
    think we have votes sit at 11 o'clock coming up, and I want to
    make sure we can get as many Members in as possible. I think
    Mr. Courtney has agreed to that. Is there any objection to
    that? If not, we will reduce our time to 4 minutes.
        I will ask maybe some questions in between just to link up
    with the previous questions. If any of you want to comment,
    just let me know, give me a signal. We want to make sure you
    get whatever you need on the record.
        With that, I would like to go first to my good friend Mr.
    Courtney for his questions.
        Mr. Courtney. Thank you, Mr. Chairman, and, again, I know
    we have a lot of attendance here today, so I am going to try to
    keep my questions very brief and succinct.
        Again just, Mr. Stackley, I was wondering if you could just
    kind of help us sort of understand the study suggestion that
    came out of GAO where they, again, suggested to Congress that
    we restrict funding until studies have been complete. Are these
    studies actually under way? Are they close to being finished, I
    mean? And what do you see as the impact; is it neutral or is it
    significant if such a restriction was put into place, again
    just on the studies?
        Secretary Stackley. Yes, sir. So first on the studies.
    Every shipbuilding program that we have got we have got ongoing
    studies in terms of looking at what further capabilities do we
    need to bring to the ship, what is the cost associated with
    bringing that capability, what is the impact to the program,
    and then what is the best way for incorporating those upgrades
    if it is determined that the cost is well worth the added
    capability?
        So specifically for the LCS program, I would characterize
    we have three not so much studies, but we are doing three looks
    at the program. First is the continuation of correction of
    deficiencies. You know, we have the first ship out on
    deployment, and one of the things that we are gaining from that
    deployment is lessons learned in terms of extended persistent
    operations in theater, what do we need to do different going
    forward to improve its performance.
        Chairman Forbes, in your statement you made reference to
    the SSDGs [ship service diesel generators]. That is probably
    the most significant design deficiency that we are dealing with
    today. We do have reliability issues that we have identified,
    we have fixes in place on the follow ships, and as LCS 1
    continues its deployment, we will be incorporating those fixes
    on LCS 1 to address that issue. So there are correction of
    deficiencies that are ongoing.
        The second is I will call it commonality. We want to
    achieve greater commonality with fleet standard systems and
    across the class, so we are looking at two areas in which
    commonality have big bang for the buck. One is what we call
    C4I, or our command, control, communications information
    systems; and the second is in the combat system itself.
        So we have done studies in terms of what alternatives we
    would look at. The open architecture design of the LCS gives us
    great ability to bring forward those type of upgrades without
    significant disruption to the platform, and now we are going at
    looking at the specific details in terms of what changes would
    be required to the platform, what timeframe makes sense to do
    that, and what is the associated cost.
        So, for example, we look at the fiscal year 2016
    procurement as that would be a likely time to incorporate
    upgrades in that regard. We do this very thoughtfully, we do it
    through a configuration steering board, we go through the rigor
    of the design and the cost estimating, and we work with the
    shipbuilders to ensure it does not set us backwards.
        The third area would be in the mission modules themselves.
    As I described in my opening statement, what we are doing today
    is we are leveraging off-the-shelf technologies for the early
    increments, and we are also continuing with development of new
    technologies. In that development of new technologies arena, we
    have had a couple of setbacks. We have relied on systems that
    were either being procured by one of the other services that we
    were going to leverage, specifically the non-line-of-sight
    missile that the Army was producing or developing to produce.
    They have cancelled that program, so we are moving on with the
    development of an alternative surface-to-surface mission module
    capability for a future LCS increment.
        So those are the three types of studies that are ongoing,
    and we are doing this in broad daylight. We are not doing this
    behind closed doors. We are doing it in broad daylight. We
    welcome the oversight, we welcome the insight that we can
    provide to you all, because we are going to be coming back to
    you at least annually with a budget to discuss and propose
    future investments in those regards.
        Mr. Courtney. Thank you.
        And just one other sort of housekeeping question. Again,
    the GAO recommendation was to buy sort of a minimum quantity of
    ships to preserve the industrial base until full production--
    full-rate production design decision is made. In the Navy's
    response you state that the Navy plans to buy LCS seaframes in
    accordance with the most recent long-range shipbuilding plan.
        So I guess the question is, again, in your testimony you
    said we are building four a year right now, but the
    shipbuilding plan, when we checked that, it was two a year for
    2016 and 2018. Again, is that the number for those years, two?
        Secretary Stackley. Yes, sir. Yes, sir. So both the
    shipbuilding plan and the President's budget that was submitted
    for 2014 FYDP [Future Years Defense Program], we continue with
    the block buy through 2015, which is four per year, and the
    budget and the long-range plan lays up a reduction to two per
    year.
        So let me go to the specific, the second half of your
    question, which is, well, what would the impact be of slowing
    down the program, taking a pause, or delaying in 2014 while we
    continue to do further studies? Well, the impact would be many-
    fold. First, there is going to be an impact to the fleet
    because the fleet needs the capability, and this is delaying
    getting the capability out there.
        Second, there is an impact associated with the cost to the
    program. Any delay in any shipbuilding program is going to have
    a cost impact, and so we have to decide, is it worth that
    impact. As I described, we believe that the seaframe production
    is very stable. We are going forward with off-the-shelf
    technologies on the mission packages, which we are developing.
    So to delay the fiscal year 2014 ships, which would be
    delivering in the 2017, 2018 timeframe, to await completion of
    later increments developmental testing, I think that is going
    in the absolute wrong direction. We will be incurring
    unnecessary added cost on the program associated with that
    disruption. What we would rather be doing is sitting down with
    Congress as we submit future budgets and walking through in
    great detail exactly where we are, why we believe this is the
    exact right thing to do for the Navy and the Nation, and look
    for your support in that regard.
        Third impact beyond just the loss of the capability and the
    added cost is the industrial base. Both of these shipbuilders
    have done an outstanding job of responding to the issues and
    the failures on the lead ship to train up a skilled crew, to
    make investments in their facilities, to hit the targets that
    we set with the block buy, and right now they are getting up on
    the governor for steady-state production. Again, to insert a
    pause, a break in that production in the shipbuilding program
    is going to have impact not just to the cost, but to that
    workforce, that skilled workforce, that we have got in place. I
    do not recommend that.
        Mr. Courtney. Thank you.
        Mr. Forbes. Mr. Francis, you wanted to respond to that?
        Mr. Francis. Yes, sir. Thank you.
        I think the things Mr. Stackley just talked about, the
    studies they are doing, I think that is basically the essence
    of our recommendation, to come back and tell you what they have
    in mind and when, and recall that the seaframe is doing well
    now because it is coming down its learning curve. So of real
    importance would be are we considering any design changes for
    the 2016 block that could interrupt that learning curve and
    maybe change prices?
        So that is the essence of our recommendation. The Navy has
    until March before it actually gets that next block under way.
    I think there is plenty of time. So I don't envision a scenario
    where the 2014 buy actually gets held up pending these studies.
    I think the Navy could in pretty good time give you the
    information you need.
        And then on the shipbuilding plan, the numbers are going
    on, as Mr. Stackley said, from 2016 on, are less than four
    ships a year, so I don't know if there is a down select
    envisioned out there. If there isn't, then that rate would
    comport with our other recommendations, which is keep the rate
    at--the minimum sustained rate would be between two and three
    ships a year until operational testing. So we might be in
    violent agreement.
        Mr. Forbes. Okay, thank you.
        Gentlemen----
        Secretary Stackley. I would like to have that----
        Mr. Forbes. Oh, sure, yeah.
        Secretary Stackley. I would like to have that on the
    record: GAO said they are in agreement with the Navy.
        Mr. Forbes. Notice he said ``violent agreement.''
        Mr. Runyan is recognized for 4 minutes.
        Mr. Runyan. Thank you, Chairman.
        Mr. Stackley kind of answered my first question about
    increased costs, but the next one kind of deals with it also,
    too. Admiral Hunt, talking about the Freedom getting back
    underway less than a day after a generator issue, is that
    problem more systemic, and does it increase the costs of future
    ships to fix it?
        Admiral Hunt. I think the most recent casualties that we
    have had to Freedom are things that you get in normal
    operations, quite frankly. So we have a first of, you know,
    ship out there going through the paces. It is one of the
    reasons why we wanted to get Freedom on deployment out there in
    a real-world operating situation as quickly as we did.
        I am very encouraged in the fact that the maintenance team
    in place is able to take these casualties, repair them in
    stride, and get the ship back under way. I would be more
    concerned if we had casualties that we found were surprising
    us, we didn't have the right ILS [integrated logistics
    support], the logistic support, in place, and we had big
    delays. We have not seen that.
        So this is, first of all, I think, expected. You know, one
    of the things that we have asked is we have gone back and, to
    put some historical context in this, taken a look at the FFG-7
    program, the Arleigh Burke program, Ticonderoga. I may have the
    exact timeframe wrong, but Arleigh Burke when she first
    deployed, I think, ended up in a shipyard overseas in the
    Mediterranean for almost 2 months. We are not seeing that kind
    of stuff at all.
        So I think we do have a good program in place, and we are
    adapting. We are learning, and we are putting the things that
    we learn straight into follow-on ships in a very useful way.
        Secretary Stackley. Sir, can I add to that?
        Mr. Runyan. Sure.
        Secretary Stackley. Specifically with regard to the ship
    service diesel generators, first the requirement. Those
    generators are required to perform at 800 hours of operation
    between failures. Today what our experience is is 450 hours
    between failures. So that is the symptom of the problem. We
    have three known issues, one associated with the governor on
    the generator, one associated with the cooler that goes with
    the generator, and one associated with the size of the piping
    that is associated with coolant flow. There are fixes for all
    three. They are not all incorporated in LCS 1 today, but they
    are all being incorporated on the follow ships of that variant.
    So today we are working through these interruptions in terms of
    the ship's operations, if you will, to incorporate these
    failures. We have got to fix that.
        The good news is that the ship is designed with four diesel
    generators. It requires two under operations plus one in stand-
    by, so there is redundancy in the system to overcome some of
    the shortfall in the operational availability, and there are
    fixes in place, and those fixes are largely contained to that
    package unit that shows up from the vendor, and they are being
    incorporated by the vendor. So the impact on the ship side will
    be minimized.
        Mr. Runyan. Thank you.
        And I don't know if Mr. Francis can answer this question,
    but I think it is kind of--I won't use the phrase
    ``problematic,'' but it is something I think we are walking
    down when you talk about our acquisition process. I think
    another member of the Armed Services Committee, Ms. Duckworth,
    raises a question about concurrency in, you know, development.
    Are we kind of walking down the same path with the LCS as the
    F-35 in that realm and kind of don't know what the future
    holds?
        Mr. Francis. Mr. Runyan, I think there are some
    similarities there. I mean, it has been concurrent. I think
    problems with the generator that we just talked about, I don't
    think you minimize those, but I think these are things that the
    Navy is going to solve, you know. I don't think those are show
    stoppers.
        But I think the discussion we are having today with 24
    ships under contract and a number delivered and under
    construction, I think, sets a little different context. If we
    were talking about what don't we know about the configuration
    of the modules, and what they will be able to do, does the
    operational concept work, are we going to be able to swap the
    mission modules out in theater, if we were having this
    discussion 5 years ago on the first ship, I would say, hey, we
    are learning as we are going, and it is a pretty good strategy.
    At this point we are so far down the pike, we are quite
    concurrent, and as I mentioned in my opening statement, our
    oversight tools are rather limited.
        So this is, I think, emblematic of the acquisition process.
    This is how things go. So there is, I think, bigger things to
    do in the future about the acquisition process, and part of it
    is you have to put money on the table to get a program going,
    and generally money goes on the table about 2 years before the
    program starts. So it goes on the table on the basis of
    promises, promises about we think we are going to be five times
    better than anything we have, and we don't think it is going to
    cost much. As those promises get reduced over time, then we are
    way down the pike, and that is where we are.
        So I think it is systemic. I think we put people in
    difficult positions in the Department because you have to be
    able to justify your program that way, and it is optimism, and
    it gets embedded. So, yes, we are playing out, I think, what is
    typical in the acquisition culture.
        Mr. Forbes. Mr. Francis, the time is up. And let me just
    point out to our Members, we are told our floor votes are going
    to be ratcheted up a little quicker. In consultation with Mr.
    Courtney, we would like to ask unanimous consent we can reduce
    our time to 3 minutes each. I just want to get as many Members
    in as possible. Any objection?
        We will reduce it to 3 minutes. And if you can, try to
    focus on one question. And we don't want to cut you guys off,
    but if you can make your answers as succinct as possible
    because we have a lot of Members that want to get their
    questions in.
        And with that, we recognize Mr. Johnson from Georgia for 3
    minutes. Mr. Johnson.
        Mr. Johnson. Thank you, Mr. Chairman.
        Mr. Stackley, you indicated that design costs are under
    control and--or design and costs are under control, but there
    are some design changes that are being considered.
        And then, Mr. Francis, you indicated that for 2014 fiscal
    year, we should hold the money and ask for any design changes,
    and you also recommended that we keep the block 2016 buy, keep
    it at a minimum amount.
        What I would like to ask Secretary Stackley is can you tell
    us what would be the impact on the Navy in terms of meeting its
    future requirements if this committee were to follow the
    recommendations of Mr. Francis?
        Secretary Stackley. Yes, sir, and we did some clarification
    in terms of his recommendation and my earlier response.
        Mr. Johnson. And then I would like to get Mr. Francis'
    rebuttal, if you will.
        Secretary Stackley. Yes, sir. Our plan to continue with
    procurement of the block buy, which would mean four ships in
    2014 and another four ships in 2015, is central to, one,
    getting the capability that is in the CNO's requirements letter
    to Congress, and is filling a shortfall that we have today in
    terms of overall force structure, getting up to the 300 ships.
    Those four ships in 2014 and four ships in 2015 with the
    capability they bring, we need those for operational
    considerations, and then, as earlier discussed, disrupting that
    flow in the shipyard and the vendor base will drive costs into
    the program, which is exactly what we are trying to avoid. So
    that is a short description of what the impact would be.
        Understanding what Mr. Francis described earlier in terms
    of providing more information, more insight to Congress in
    terms of where the Navy is going before we put those ships
    under award, under contract, we welcome that, and, in fact, we
    have monthly reports to Congress we are providing, we have
    quarterly reports to Congress we are providing, we have annual
    reports to Congress we are providing, we have briefings. We
    will provide you full insight, full daylight in terms of where
    we are going and the considerations that we are considering,
    the issues that are under consideration.
        Mr. Johnson. Thank you.
        Mr. Francis.
        Mr. Francis. Yes, sir. I think we are squared away on what
    our recommendation means. I would be surprised and disappointed
    if it actually did result in holding off the 2014 buy, because
    the studies are in place, and I think the answers could be
    given.
        We pegged that to the 2014 money just as a forcing
    mechanism so that the Navy could come by or come back to you in
    good time. Really, the things that we are talking about will
    affect most directly the 2016 buy, but you should have some
    time to consider that. So I think if the Navy comes forward
    with that information, I don't see why the contract couldn't be
    awarded, and you will have the information.
        Mr. Johnson. Thank you. I yield back.
        Mr. Forbes. Mr. Johnson's questions are excellent
    questions. We may ask you guys to expand a little bit on those
    in written form, if you would, after this hearing.
        [The information referred to can be found in the Appendix
    beginning on page 77.]
        Mr. Forbes. And now we recognize the gentleman from
    Colorado Mr. Coffman for 3 minutes.
        Mr. Coffman. Thank you, Mr. Chairman.
        Admiral Hunt, we have two separate shipbuilders building
    Littoral Combat Ship, and I have read some analysis that this
    is really going to take, require separate crew training. Is
    that criticism valid? I mean, are these ships by these two
    different builders really that different that require separate
    crew training?
        Admiral Hunt. There will clearly be some differences in the
    training, but fundamentally the training that we have
    established and set up in the schoolhouse in San Diego is very
    similar; same instructors walking through folks. The
    differences is primarily going to be operating the consoles
    that they have. That is something that is achievable. It is
    programmed in right now, and I think we will manage that very
    satisfactorily.
        Mr. Coffman. So as we proceed, then, that a sailor on one
    variant of this class of ship, would they be expected, then, to
    proceed with their career in that same variant, or can they
    cross over easily?
        Admiral Hunt. You know, again, it is going to depend on
    exactly what kind of sailor that we are talking about. So
    diesels are different, gas turbines are different. There will
    be a different training in that. But within the Navy we do that
    quite often. When you go between cruisers and destroyers and
    frigates, there are changes. Is that a major impact? I don't
    believe it is. I think it is something that we are going to
    work through. It is clearly within the realm of the training
    system that we have set up right now.
        Mr. Coffman. When you talk about the open architecture of
    the Littoral Combat Ship, I mean, really how significant is
    that in reducing costs in the long run, because we do service
    life extension programs all the time on other ships. Secretary
    Stackley, would you want to----
        Admiral Hunt. If I could, I would love to take that.
        I think that is the essence of the program. I think it is
    vitally important. I have lived my entire Navy career where we
    have made changes, and we routinely do, especially in combat
    systems, to Navy ships, and when we do them on the older legacy
    ships, we rip out everything to bare metal. We pull cables, we
    take it out, we rebuild it. I have seen it, I have lived it as
    the type commander on cruisers. You walk into a space, and it
    is completely bare metal.
        That is a very expensive way to upgrade and is really one
    of the biggest challenges that we have in the Navy in
    modernization. The modularity and open systems architecture
    that this ship provides is the entryway to the way the Navy
    must do ship construction in the future.
        I am very encouraged by what we have got. I think you are
    going to see more and more of this, and it is going to be a
    huge force multiplier not only from the cost perspective--and I
    will yield to Mr. Stackley on that--but equally important from
    a combat systems enhancement, the reliability and safety that
    we get from it.
        Secretary Stackley. I just want to provide a couple
    crystal-clear examples. First the combat system. Now, this is
    the core of the ship's weapon system; two different versions,
    both of them are described as open. One is Lockheed Martin
    variant, and the other variant is a Northrop Grumman variant on
    the LCS 2.
        So what we did to challenge this was we took the LCS 2
    combat system, we dropped the software that came with it, and
    we brought the Navy's Ship Self-Defense System [SSDS] software
    to the system, loaded it up, and demonstrated that we could
    drive that combat system with the Navy's SSDS system, and then
    likewise porting over to the Lockheed Martin version. So now we
    have choices. When you talk about commonality, we have choices
    in terms of loading up the combat system for LCS 1, LCS 2 to
    drive commonality and figure out what gives us best capability
    and cost.
        That is software.
        On the hardware side, describe the non-line-of-sight [NLOS]
    missile cancellation. We were able to quickly move over and
    look at other missile systems to fit the exact same form, fit
    and function that was provided by NLOS, and without disrupting
    the ship, we are developing and testing different missiles to
    go in its place without missing stride in terms of the IOC
    [initial operating capability] date for that capability.
        Mr. Coffman. Thank you, Mr. Chairman.
        Mr. Forbes. The gentleman from Washington, Mr. Larsen, is
    recognized for 3 minutes.
        Mr. Larsen. Thank you, Mr. Chairman.
        I think this subcommittee and the committee as a whole has
    a like/hate relationship. We like it, and we hate hearing about
    it all the time. And I have been here in my 13th year along
    with Mr. Forbes, and it hasn't been that long since I have been
    hearing about it, but it has been about half that time. And it
    is usually never 100 percent positive or 100 percent negative,
    but we just keep hearing about it. And this today is just the
    next chapter in a long book, a book I want to finish, and I
    want you all to finish. I want to stop reading this book.
        But I am concerned that this is turning into a 52-ship Beta
    program. I keep hearing about we are deploying, but we are
    testing while we are deploying, in the hopes and eventuality we
    will have fully operational platforms with the modules in
    place, using them. But we don't have the modules in place, and
    we are still out deploying and testing the platforms we have.
        So the first question I have for Mr. Stackley is--maybe I
    am wrong, and I have been wrong on a lot of things--how similar
    is this deploy and test model to other classes of ships? We do
    it on other platforms or other programs that sometimes works
    and sometimes don't, but we are talking about a multimillion-
    dollar platform here, so how similar is this?
        Secretary Stackley. Yes, sir. Let me describe that I have
    been involved with every lead ship since the late 1970s that
    the U.S. Navy has fielded either as a sailor, as a designer, as
    a production manager, as a program manager, as an oversight
    member in the Senate Armed Services Committee and in this job.
    This is the way we bring ships to the fleet. We do not have a
    prototype. We do not have a prototype. LCS 1 is the prototype
    for this class. That is the way ships are built and fielded.
        The development that is going on in parallel with deploying
    the ship--this is for future upgrades and increments that have
    been laid out in the mission modules; not to the ship itself,
    to the mission modules that bring that weapon system
    capability--but if you look at the early increments, those
    capabilities are in the fleet today. It is the 60 helicopter;
    it is the AQS-20 Alpha sensor that protects the mine. Remote
    mine-hunting system, she has demonstrated her ability to hit
    her IOC date.
        You go right on down the list of early capabilities, the
    30-millimeter gun, they are in the fleet today. We are not
    talking about developing concurrent with building; we are
    talking about integrating these capabilities into the mission
    package, completing the test program, and getting it out into
    the fleet. The risk in these early increments is very low, very
    well managed.
        There are some developments for later increments that we
    are breaking new ground, and that is why they are coming in
    later increments, and we are not trying to do ``Big Bang''
    approach in the early instantiation.
        So this is the way we field ships. We did get out of the
    blocks wrong on this program, absolutely, and that is why you
    are reading that book over and over again, but we have
    corrected those issues. We have to make sure we don't
    backslide, and we, again, welcome your oversight as we continue
    to march down this path.
        Mr. Larsen. Thank you.
        Mr. Forbes. The chairman of the Readiness Subcommittee, Mr.
    Wittman, is recognized for 3 minutes.
        Mr. Wittman. Thank you, Mr. Chairman.
        Gentlemen, thank you so much for joining us today.
        Secretary Stackley, I want to get right to an issue of
    survivability, I want to give you some examples. If you go to
    1987, USS Stark was hit by two Exocet missiles, killing 37
    sailors. The ship didn't sink; made temporary repairs, made its
    way home under its own power. In 1988, USS Samuel B. Roberts
    hit a naval mine in Persian Gulf. The ship didn't sink. It made
    it out of the minefield under its own power. In 2000, we all
    know the story of the USS Cole was attacked by terrorists in
    Aden, Yemen, killing 17 sailors. The ship didn't sink. We all
    know the story of how it was put on a drydock ship, repaired,
    back into service today. In 2006, the INS Hanit, an Israeli
    Navy Sa'ar 5 corvette built in the United States, was hit by a
    Charlie-802 antiship missile killing four sailors. The ship
    didn't sink.
        Let me ask you this: The Navy plans to do survivability
    trials in 2014 and 2015 on LCS. The Navy's Director, though, of
    Operational Tests and Evaluation has reported the LCS is not
    expected to maintain mission capability after taking a
    significant hit in hostile combat environment.
        My question is this: By the time the Navy completes these
    LCS capability and survivability trials, the Navy will have
    either procured or have under contract more than half of the
    ships in this class. The question is this: Will LCS 1 or LCS 2
    survive a hit from an Exocet missile, a mine, a Charlie-802
    antiship missile, or a small boat packed with high-energy
    explosives?
        Secretary Stackley. Yes, sir. Let me first describe that we
    don't wait for the final test to determine how we are faring.
    So every aspect of the design and the testing of each
    component, each element of a ship leads to that final exam
    associated with the total ship's survivability trials and the
    ship shock trial, just as in every other shipbuilding program.
    And every piece of analysis, every aspect of the design data
    says that we are going to meet the survivability requirements
    established for the LCS.
        Now, first, each of the examples that you described, they
    took a hit, and they came home safely. They did not carry on
    their mission. They did not carry on their mission. When we
    talk about the level of survivability for the LCS, it has to be
    able to, one, defend itself. And there is a threshold
    requirement of what it needs to be able to defend itself
    against, whether it is an Exocet, whether it is a fast attack
    craft that is approaching the ship. So it designed to meet that
    threat. Then if it takes a hit, it is designed to survive
    through watertight subdivision design, through advanced
    firefighting systems, to automated systems that respond
    immediately to the impact and contain the impact. It is
    designed to survive that and then be brought home safely.
        Mr. Francis. Mr. Wittman, may I just comment? One of the
    things on the LCS regarding survivability, and you are right,
    the final tests are in 2014 and beyond, but the expectations of
    the ship have been lowered over time. So I think originally
    when chapter 1 of the book, if you will, we are talking about
    the ship being able to go into areas where there was access
    denial and so forth and hostile environment, that has been
    backed off to benign low-threat environment. So that is a hedge
    against survivability. And also I think the thought was it was
    going to be a self-sufficient surface combatant. It wasn't
    necessarily going to need a destroyer or cruiser to help it
    with certain threats. I think we backed off on that as well. It
    will need it.
        So two things are going on. There is the survivability of
    the seaframe itself, and then adjustments to what situations we
    are going to put the seaframe in.
        Mr. Wittman. Very good.
        Thank you, Mr. Chairman. I yield back.
        Mr. Forbes. I thank the gentleman.
        Admiral Hunt. Mr. Chairman, could I comment on that?
        Mr. Forbes. Absolutely.
        Admiral Hunt. The two things for survivability. First of
    all, as naval officers we fight our group. It is not individual
    ships; we put it together. The cruisers protect the aircraft
    carrier; the aircraft themselves protect the larger group. So
    we work in a layered system, if you will.
        It is incumbent upon that leader, whether he is a strike
    group commander or a fleet commander, to make sure that he does
    that in as safe an operational situation that he can make, and
    he will do so.
        This ship is designed exactly to be the right survivability
    in the right operations that we are going to put it in. It
    truly is. It was designed with lower RCS, radar cross-section.
    It has got speed. It can maneuver rapidly. All that contributes
    directly to self-defense from a ship driver perspective. So I
    feel very comfortable with that.
        The kind of missions that we get it if it goes into a
    higher-threat environment, it will come with that protection,
    and that is coalition protection. The course that I am teaching
    right now up in Newport, Rhode Island, at the war college for
    our next-generation fleet commanders, it talks about how we do
    that and how we think about it. So I am comfortable there.
        From the ship perspective itself, when we modified the
    initial design to follow enabled vessel rules, we enhanced and
    increased the survivability of the ship itself. The
    firefighting system is solid. The configuration of the ship,
    the way she is built, is solid. It is good enough to protect
    our sailors and extract yourself from that dangerous situation,
    and that is really it.
        Mr. Forbes. And we need to go to Mr. Hunter from
    California. He is recognized for 3 minutes.
        Mr. Hunter. Thank you, Mr. Chairman.
        First question is concerning the NLOS system that you no
    longer do, and have you heard the Brimstone missile? You all
    just did a test with the Brimstone and hit four small boats,
    swarm in the LCS, and what have you thought about that for a
    replacement.
        Secretary Stackley. Yes, sir, we have taken a good look at
    the Brimstone. It has got some desirable qualities. But I can't
    tell you----
        Mr. Hunter. It is relatively inexpensive.
        Secretary Stackley. It is relatively inexpensive, but I
    cannot tell you that we are running to that missile. We have
    other alternatives that are in the mix, yes, sir.
        Mr. Hunter. Number two, what type of ships would you put in
    if you had to go up against China, if you had to go up against
    a China or a North Korea? Would you use the LCS, or would you
    use more destroyers and subs? What type of ships would you use?
        Admiral Hunt. For part of that operation, I would
    absolutely use LCS. So it is interesting right now, again, we
    are doing a war game that is part of the scenario that we are
    looking at, LCS is part of the mix. You know, for the initial
    phase to be in the theater and sense the environment before
    hostilities may occur, we would use all the assets available.
        So she is a sensor, she has got speed, she can, you know,
    link that information back to the larger group, and she
    provides those unique capabilities in each one of the mission
    modules that the fleet commander would then tailor, depending
    on how the operational concept developed that could be used. So
    from the surface to the ASW to the mine, I would expect all
    those capabilities will be added to the mix.
        Mr. Hunter. If you don't know what the modules do yet
    because they don't exist as modular, for them to be able to be
    plugged in, how do you know what the conduct of operations
    would be if you don't have the module?
        Admiral Hunt. I think we have a good idea what the initial
    increments of those modules will provide. We certainly have the
    surface module right now on Freedom in Singapore.
        Mr. Hunter. But you would have to replace the NLOS on
    surface module, right? So you don't really have it; you kind of
    have it. You don't really have anything. You kind of have----
        Admiral Hunt. That is an additional capability. What she
    provides right now is equal to what you have on an FFG.
        Mr. Hunter. Well, then, why get a new ship if what you have
    is just equal, right?
        Admiral Hunt. Because the FFGs are timing out from a
    costing perspective, modernization, and being able to adapt it.
        Mr. Hunter. My question is, though, if you had to go up
    against a China or a North Korea, the LCS is not the best ship
    for that scenario. It is not the best type of ship. Now, you
    could use anything. You could use a RHIB, you could use an
    unmanned underwater vehicle, you could use a whole lot of
    stuff. But I have talked to a number of admirals and Navy
    experts that say the LCS is not what you want there. It is
    great for the Strait of Hormuz, it is great for other areas,
    but with the Asia pivot it is not what you want. You want more
    cruisers. You want more subs that have survivability against
    the long-range threat that China provides.
        Admiral Hunt. Two things, Congressman. The first is we set
    the stage before the conflict begins. LCS is absolutely key to
    that. And I just had a 2-hour discussion with our 7th Fleet
    commander, who absolutely is ecstatic about what else he has us
    doing in theater right now and the contribution that it
    provides.
        And the second piece is----
        Mr. Hunter. I don't understand, though. What the LCS has
    done in theater so far is dock at a harbor that other ships
    couldn't dock at because it has a very shallow draft, right? So
    it has done that. It has gone to some other docks.
        Admiral Hunt. And she is out operating in the CARAT
    [Cooperation Afloat Readiness and Training] exercises
    throughout the region.
        Mr. Hunter. Doing doughnuts, right? Going really fast in
    circles? That is what the ship driver said a couple days ago,
    right?
        Admiral Hunt. She is out performing the missions as desired
    by our 7th Fleet commander.
        Mr. Hunter. Thank you, Mr. Chairman.
        Mr. Forbes. To the witnesses, I hate to impose on you, but
    we have a vote on the floor that is going to probably run about
    40 minutes. What are your schedules like? Can you take a recess
    and let us come back? I know it is tough on your schedules, but
    we have got a few Members that really would like to ask just a
    couple more questions. How are your schedules?
        Secretary Stackley. Sir, we are at your service.
        Mr. Forbes. We apologize for that. They don't call us and
    ask us if the votes are convenient now. But we will recess
    until the votes are completed, and then we will reconvene for
    whatever questions that remain.
        Thank you.
        [Recess.]
        Mr. Forbes. Let me thank our witnesses for their patience
    in allowing us to get through that cycle of votes. And at this
    particular point in time, we would like to recognize the
    gentleman from Alabama, Mr. Rogers, for 5 minutes.
        Mr. Rogers. Thank you, Mr. Chairman.
        Admiral Hunt, a key criticism of the GAO report was the
    Littoral Combat Ship program is that the Navy did not have yet
    a decision on how it is to be used. As the leader of LCS
    Council for over a year now and a veteran surface warfare
    officer, is there any question in your mind as to how this ship
    will be employed?
        Admiral Hunt. Thank you for that question.
        No, there isn't. I think we know very accurately how we are
    going to employ the ship with each of the modules.
        Mr. Rogers. Would you describe those, please?
        Admiral Hunt. Certainly. The surface mission capability
    will be in the littoral, meaning in close to land. It will
    provide with its gun capability initially, and then, when you
    add on top of that the missile capability, the ability to go
    out and interdict small boats and small vessels that would be
    potentially opposing us as we moved amphibious ships or an
    aircraft carrier through choke points.
        The second piece that that capability provides is it has
    excellent capability exceeding what we have now in our maritime
    interdiction operations, meaning taking a boarding party and
    going over doing antipiracy or anti-weapons-of-mass-destruction
    movement, the kinds of things that we are doing routinely in
    the Gulf of Aden, the Horn of Africa and around the waters of
    the Persian Gulf right now.
        Mr. Rogers. I understand that a key component of LCS
    concept is the mission package; however, does the Navy have a
    plan for utilizing seaframe without the mission packages as
    well?
        Admiral Hunt. No, it does not. In every instant of seeing
    how we would operate the platforms today, it would always be
    inherently with one of the three mission packages.
        Mr. Rogers. Mr. Stackley, the GAO has criticized the Navy's
    LCS program business case, stating that questions remain on
    cost, the time needed to develop and field the system, and its
    anticipated capabilities. Will you address each of those three
    items?
        Secretary Stackley. Yes, sir. In terms of cost, the
    program's cost performance today is very well understood and
    well behaved both in terms of the seaframes of the ship
    production and in terms of the mission packages.
        I think one of the questions or concerns from the GAO has
    to deal with we will call it the program baseline that we are
    measuring against. We owe that to Congress, and we will bring
    that forward. In fact, Mr. Francis described that we get to go
    to a Milestone B long before this hearing was scheduled. In
    fact, we had the mission module Milestone B scheduled for this
    week where we did go through all those details to lock them
    into a formal document that will come forward to the Hill.
        In the interim we do report annually inside of what is
    referred to as a selective acquisition record to Congress, and
    we are performing well within those costs that we are
    projecting. Good learning, good cost performance.
        The second aspect I think you raised was schedule, with
    regards to schedule, again, ship production and mission
    modules. On the ship production side, we have adjusted
    schedules at the both of the shipyards on the order of 4 to 6
    months for the early ships in the block buy, the smart thing to
    do. What we did not want to do was to incur costs or cost risk
    because of overly aggressive schedules within the shipyards.
        The start-up of production on the block buys was somewhat
    disrupted by a gap that had occurred between the first couple
    of LCS ships and the decision to go forward with the block buy,
    and because of that disruption and the transition from earlier
    lead ships to that stable design that we are insisting upon to
    support production of the subsequent ships, there was, in fact,
    lag time that led to some schedule delay. We believe we have
    got that well captured, and today both Marinette up in
    Wisconsin and also in Alabama are performing in accordance with
    those schedules. Got to keep a watchful eye on it because we
    are continuing to ramp up in production, but we think we have
    schedule stability in place, and it is supporting our cost
    projections.
        Mr. Rogers. Great.
        I want to ask you, you described earlier before we had to
    break for votes your history in the shipbuilding business, and
    that what you are doing with this system is consistent with
    what you have always done. Were you surprised at the GAO's
    observation that this was somehow outside the norm?
        Secretary Stackley. I think GAO did a lengthy review of the
    LCS program that I think extended over 12 to 16 months. When I
    read the report, read their findings, my first reaction is we
    need to spend more time with the GAO to outline exactly what we
    are doing and why we are doing it. And we owe that to GAO, we
    owe that to Congress.
        Shipbuilding is different from other acquisition. It is.
    LCS is different from other shipbuilding programs. And so by
    virtue of that fact, we have to explain why those differences
    make sense, and why we are on that path.
        The second aspect of it is GAO asks a lot of questions in
    their report, critical questions. They are fair, and rather
    than providing a short and concise response, I think we need to
    engage with Congress and further with the GAO and provide the
    detailed responses that they warrant, because they are
    important for you all to understand where we are going, and
    that is necessary for us to earn and expect your support.
        Mr. Rogers. Thank you. My time has expired.
        Mr. Forbes. Ms. Speier is recognized for 5 minutes.
        Ms. Speier. Mr. Chairman, thank you, and thank you for your
    service to our country, all of you, and for the important work
    that we are addressing here today.
        Mr. Francis, I am truly struck by your earlier testimony,
    and it reminds me a little bit of our lives in that Admiral
    Hunt in 2010 told Congress that the dual-acquisition strategy
    would save money. Now we hear the Navy is considering changes
    to increase the commonality between the two variants, as I
    recall it, these were two great alternatives that were being
    suggested, and so we really wanted both of them. It would be
    like any one of us saying, gosh, the Lamborghini is beautiful,
    and the Ferrari is beautiful; let us buy both of them, except
    for the fact that it costs a lot of money.
        And I am troubled by the fact that we are purchasing first
    and testing second, and I think the taxpayers of this country
    expect us to be frugal in the way we move forward with this
    effort.
        Now, the GAO had originally suggested that we go slow. I
    actually took that GAO recommendation and turned it into an
    amendment, which was held not to be in order by the Rules
    Committee when the NDA was taken up on the floor. So having had
    that happen, but having the good and sound recommendations that
    you have offered, how do we make sure that this 2-year
    oversight opportunity that we have is actually exercised in a
    way that we just don't say at the end of 2 years, well, too
    bad, we missed the window, we are going to build all these
    ships, they are not going to meet the standards, they are going
    to cost--the cost overruns are going to be extraordinary, and
    that is just the way it is?
        I mean, we as Congress, we as this committee, I believe,
    have a responsibility to make sure that what we are building
    makes sense, makes sense for the long term. And I feel that
    there is this rush to construction, and we will worry about the
    details later.
        So could you comment on that, please?
        Mr. Francis. Definitely.
        We made a recommendation in August of 2010 that because
    operational testing was slipping, there were some problems with
    the mission modules at that point, and the ships and the
    modules were kind of getting out of sync. We recommended to the
    Department, resequence these and get them back in line so that
    you know what the combined capability of the seaframes and
    mission modules are before you get into operational testing.
    Now, the Department agreed with that, but since then the
    seaframes, if anything, have gone faster, the modules slower.
        Ms. Speier. So they agree, but they then don't follow
    through with what they say?
        Mr. Francis. No. The strategy that they embarked on was a
    different strategy than what we had recommended.
        Ms. Speier. So how do we trust anything?
        Mr. Francis. Well, I think you have to hold the Department
    accountable. I mean, we can talk about, for example, mission
    modules, but it takes four increments for those mission modules
    to meet minimum capability. So the things we are talking about
    what we know now does not meet minimum capability for the Navy.
    It will be 2017 and 2019 respectively before those increments
    are operationally tested.
        So I think that is where I say you have to exercise
    prudence in how many ships and modules you approve before they
    have gone through that.
        Ms. Speier. We are full speed ahead right now. That is what
    the NDAA [National Defense Authorization Act] recommends. That
    is not what you recommend. The Navy certainly recommends that.
    And I guess I want you to give us a road map on what we should
    do if we are going to do a diligent job on oversight over the
    next 2 years. What would you provide us as a road map?
        Mr. Francis. A couple of things. We mentioned the studies
    that we think the Navy should report back to you on on
    potential design changes. You should know that in the next--in
    this 2-year window; an approved program baseline for each of
    the increments of the mission modules. I don't think we can
    afford to--you know, as we have learned with the modules, if
    something doesn't work we have a different game plan; if this
    doesn't work, we have a different game plan.
        I think you should be able to hold the Department
    accountable. You said you were going to do this this year and
    this this year, and hold them accountable for that. And I would
    take a real hard look at the 2016 block buy. If that is too
    many ships or takes you past operational testing, I think you
    have yielded a lot of your oversight authority. So that would
    be the outlines of what I would say.
        Ms. Speier. Thank you. I yield back.
        Mr. Forbes. Mr. Ribble is recognized for 5 minutes.
        Mr. Ribble. Thank you, Mr. Chairman. And I want to
    especially thank you and ranking vice member, Vice Chair
    Courtney, for allowing me to come in.
        I also want to thank the witnesses for being here today,
    especially the GAO. You know, oversight is an important part of
    what Congress does, and it is part of our responsibility to do
    this, but I would say as well that a lot of what I have read in
    the report is eerily similar to other reports on other
    shipbuilding programs. And so shipbuilding is a process, not
    just something that today we are going to do it, and tomorrow
    it is there and it is perfect. There is a process that goes on.
        And the report that you gave on LCS is similar to those
    reports that GAO did in the 1970s, and other programs that
    became very successful in the 1990s, and another ship that
    became very successful. And so in one degree where I might take
    and have some disagreement with some of the findings in the
    report, I think the report is important, because it sharpens
    all of us. It helps us move forward and make improvements to
    the Navy response, Congress' response, and things go forward.
    So thank you for submitting the report and your testimony this
    morning.
        Mr. Stackley, I appreciate you being here, and I would like
    to talk just a little bit about the cost of the ship and what a
    delay in production might do for that cost. It can either
    improve cost or delay it. LCS 1 cost the Federal taxpayers $637
    million, way, way above budget. However, the LCS 5 had dropped
    down to $437 million, LCS 11 is at $358 million, and LCS 15 at
    $348 million, all trends going in the right direction; in fact,
    nearly a 50 percent reduction in cost over the course of the
    project.
        What would a delay do to that?
        Secretary Stackley. Yes, sir. The most critical aspect for
    any major weapon system program when it comes to cost is
    stability, stability requirements, stability of design and
    stability of funding. Any disruption to the production of the
    LCS, or any other major weapons system program for that matter,
    but more so in shipbuilding, you are going to suffer--first you
    are going to lose the capability that you are going after. You
    are going to suffer cost growth that starts in the vendor base,
    because the vendor base, which is a national vendor base, is
    going to be stopping production particularly on any unique
    components that are associated with that ship program, and then
    it is going to hit the shipyard itself where the workforce, the
    skilled workforce, that you are building up, in this particular
    case the LCS program, they are going to have to stop and start
    again, and you have to deal with hiring and firing cycles,
    green labor and things of that nature.
        It is extraordinarily disruptive, and the unique case of
    shipbuilding where you are in a 4- or 5- and, in certain cases,
    carriers where get up into the 9-year range of when you start
    and complete construction, you have got to ensure stability of
    that production workforce going from ship to ship to ship, or
    you are just going to continue to suffer sawtooth in cost
    growth.
        So that is one of the things we guard against, and the way
    we guard against it is to drive stability into the program. The
    LCS 1 and LCS 2, the front end of this program, absolutely not
    stable. The design was not complete, the requirements were
    moving, the production workforce was not ready, the government
    was not ready, and that is why you saw a $637 million number at
    the start of the program.
        We have worked to nail down all those aspects that bring
    stability, and then lock it in the long-term agreement
    associated with the block buy so that the vendor base, the
    shipbuilder and the government can all pull in the same
    direction to drive costs down to where we are now taking a ship
    that started off in the $600-$700 million range, and we are
    locked into a fixed-price contract at prices that are half of
    that years later.
        Mr. Ribble. It is clearly going the right direction.
        Admiral Hunt, the U.S. Navy has been at the forefront of
    national defense, well, since the beginning of the Navy. Thank
    you for your service and the work that you have been doing.
        What impact would a delay have on the Navy's ability to
    meet its future requirements?
        Admiral Hunt. The LCS will immediately provide capability
    forward. Initially it is one of getting out there and
    developing contact. It is the presence piece, which is
    essential from all the forward numbered fleet commanders'
    perspective. So we are out there developing relationships with
    allies, with countries that are deciding which camp to play in,
    and we are sending signals to those who could be adversaries.
        So presence is first and foremost on what we do day in and
    day out. When you combine that with the capability that each of
    the mission modules bring, credible combat capability, a huge
    force multiplier that will immediately go into the calculus
    that those numbered fleet commanders will use in operating
    within their area of responsibility.
        And I would make the point that each one of the first
    increments meets or exceeds current capability that we have in
    the United States Navy. So while it is true that some of them
    have up to four increments, and we are providing capability
    that we may not demonstrate fully until towards the end of this
    decade, that first increment that will be developed in the next
    year or so for all of those meets or exceeds everything we
    have, and that is an important piece that can't be overlooked.
        Mr. Ribble. Thank you for your testimony.
        Mr. Chairman, I yield back.
        Mr. Francis. Mr. Chairman.
        Mr. Forbes. Yes, Mr. Francis.
        Mr. Francis. I think the things that Mr. Stackley said are
    true in terms of bringing the cost of the ship down, but,
    again, I think we have to remember it is a first-in-class ship
    of a new class of ships. So we have some questions on the
    mission modules, but, you know, even if you said the seaframes
    worked just the way they are supposed to and the modules worked
    the way that they are supposed to, we still have the
    operational concept. Is that going to work? Are we going to be
    able to do the maintenance concept the way we think of it?
        The real question if I look in terms of cost risk, I think
    seaframes the least risk, modules are a higher risk, O&S
    [operations and support] costs are probably the biggest risk.
    So it is not just a first-in-class ship, it is a first in class
    of a new class and a new concept of operations. And we are in
    rate production, so the caution I would offer is the business
    imperatives for keeping things the way they are should not
    outweigh the programmatic and testing imperatives that will
    prove, can the ship work.
        Mr. Forbes. We have been joined by ranking member Mr.
    McIntyre. He has graciously deferred his questions so Mr.
    Bonner can ask his at this time. So we recognize Mr. Bonner for
    5 minutes.
        Mr. Bonner. Thank you, Mr. Chairman. And as others have
    said, thank you for holding this hearing. And to our witnesses,
    thank you. I think it has been very enlightening, the questions
    have been thoughtful, and the responses have certainly been
    appropriate, I think, to help answer some of the questions
    about this very important program.
        There have been several comments made by some of our
    colleagues, Mr. Chairman, and so I am going to try to ask one
    question of the admiral, and then I am going to let him answer
    it. But I am going to offer a quick observation before he does.
        One of the comments was that it appears that LCS might be
    of little value to the Asia pivot strategy. So my question
    would be, what else does the Navy do in the South Pacific
    beside planning on fighting big wars? I mean, are there not any
    other missions the Navy does? And you can think about that as I
    am opining about some other facts.
        I mean, I am in the last few days of my tenure in Congress.
    I have worked up here for 18 years, I have served for 10 years,
    it has been the greatest honor of my life. One thing that I
    have been struck by is the fact that we really never know when
    we wake up what the day holds. And I certainly can't look into
    my crystal ball, I don't know if the GAO can. My father worked
    with the GAO when he was going to law school a long, long time
    ago, so I hold you in great respect. But I don't know that any
    of us are really that qualified to predict what the world's
    challenges are, but here are some facts.
        There are 217,000 miles of inshore coastline, the
    littorals, around the world. Our Navy can't be every place,
    obviously, but only our Navy, only our military can provide the
    stability that the world needs. And it is hard for me to see,
    and I know the chairman has talked about the concern he has and
    many of us have about the decreasing number in the fleet. We
    have got, what, 285 ships today? I was with the former Navy
    Secretary a few weeks ago, who worked for President Reagan when
    we were shooting for a 600-fleet Navy.
        My friend and colleague from California talked about
    comparison between the Ferrari and Lamborghini. I would say
    that the LCS isn't either, not compared to the cruisers, to the
    destroyers and other ships that we have which are also a vital
    part, but I would say it is probably more like a Malibu or a
    Taurus. It provides a function, especially in those inshore
    waters that perhaps we don't need the more expensive
    Lamborghini or Ferrari to provide that mission.
        So I would be happy to now ask the question, and if the
    Admiral or any of the panelists to provide an answer.
        Admiral Hunt. Congressman, thank you for that question. It
    is a very insightful one, and it speaks exactly to the way I
    think that the Navy over the next decade or two is going to
    contribute directly to our national defense.
        The Navy does more than fight these wars. Ideally we will
    shape and understand an area that we are operating in to
    prevent the conflict. We do that by contact. We do that by
    contact with other nations. To have contact we must have
    presence.
        Your comments on being out and about, I think, are exactly
    right. The influence that we have by having proportional
    capability with nations around the world is absolutely
    essential. That is how you develop the relationships, develop
    trust and confidence between the nations.
        There is some question in the Western Pacific right now on
    the resolve of the United States. The presence of Freedom in
    Singapore is being used by Admiral Haney, our fleet commander
    in Pearl Harbor, and by Admiral Swift, the 7th Fleet commander
    out there, and they see great value.
        The ship operates by exercises and by conducting operations
    with those national partners out there. And what we are getting
    in feedback is that it resonates with those potential partner
    nations, and they see that as commitment of the United States
    to be in the region, and that contributes directly to increased
    stability.
        So one of the key advantages that we get from LCS is the
    unit cost is low, the number of people manning them and still
    providing credible combat power is low, which is good for
    lifecycle costs, and the ability to operate at sea in the
    manning construct that we use of having two ships, three crews
    and rotating them gives us about 50 percent optempo
    [operational tempo], which is much higher than the standard
    one-third that we get. So for about 52 LCS, I get the
    equivalent presence of about 100 destroyer or cruiser ships.
    And I would offer that the smaller ship of the lower draft
    allows us to reach many of the places that we can't get in and
    develop that contact and relationship with others right now.
        Vitally important, you can only do that if the nations you
    operate respect that credible combat power. That is what you
    get right now on that first increment of LCS surface warfare
    module. That is exactly what you will get with the MCM mission
    module, which is going to be hugely important and send a signal
    in the 5th Fleet area of responsibility, and I am confident we
    will see the same thing with the antisubmarine module.
        Thank you, Congressman.
        Mr. Bonner. Thank you, Mr. Chairman.
        Mr. Forbes. And this committee would like to thank Mr.
    Bonner for his service. We know you will be leaving us soon and
    get to sleep in your bed more instead of traveling back and
    forth. But you have done a great job for your constituents and
    for your country, and we appreciate that service.
        And we appreciate all the questions. I just have a few, and
    then Mr. McIntyre may have a few that he would like to wrap up
    with. And I come in a unique position, because I am not
    predisposed one way or the other. I want to try to make sure we
    are answering the questions.
        I think my friend sitting to my right, Mr. Hunter, would
    probably suggest that--not that the LCS is not a good ship, but
    sometimes we get the impression it is like we walked into a
    department store, and we saw this wonderful thing, and we
    bought it, and we get home and say, now what do we do with it?
    You know, it can do so many different things.
        And I think we heard today, we talk about presence, and
    that is a very valuable thing that we need to address. In fact,
    we had Admiral Roughead, who testified just yesterday, who
    talked about the importance of process as we make this shift.
    We have also heard Admiral Roughead talk about the enormous
    delays we have in being able to get anything deployed. From the
    concept to when we do it, sometimes that can be as much as 22
    years. And this is not an infant. I mean, we have been dealing
    with LCS for over a decade, fair assessment, I think, Mr.
    Secretary.
        Mr. Hunter raised a good question to just put on the table,
    Admiral. If we get into a major conflict--and that is what we
    have to constantly be recognizing; just as Mr. Bonner said, we
    don't always know what we end up with on any given day--
    presence may not be enough. I mean, we may need to look at
    capability there. And then again I think Mr. Francis at least
    raises a good question: What happens if the operational testing
    comes in wrong, and we have already locked into making all of
    these purchases?
        So I guess while what I would throw out to each of you to
    weigh in on is a couple of things. Number one, how do we strike
    that balance? Do we have the right balance?
        And number two, has the Department done the analysis, not
    just to say what we can do with the LCS, I know it feels pretty
    comfortable with that, but what we really are going to need 10
    years down the road, 15 years down the road. Because as you
    guys know, when we see these shipbuilding plans, they are
    fantasies because we are a billion dollars short of where we
    can build them, so we are not going to be able to build all
    those things.
        And then particularly I would like you to laser in on the
    development schedule for the modules versus the seaframes, are
    we on track there? Do we need to kind of modify that? What
    sometimes we worry about is our schedules, they are going to
    create a situation where we deliver an immature mission module,
    because, you know, we have had some people raise the fact that
    by the time we get our mission modules, we might have used 25
    percent of the whole life of some of these seaframes.
        So could any of the three of you address those as you deem
    appropriate?
        Secretary Stackley. Mr. Chairman, let me go ahead and get
    started and then allow Admiral Hunt and Mr. Francis to join.
        First operational test risk. The entire strategy for LCS
    development seaframe plus mission modules is a risk-management
    approach where, by breaking down the mission modules into these
    increments, we are bringing to the fleet a capability that is
    today off the shelf, it is off the shelf. So the risk is not a
    technical, there is not discovery involved. What we are doing
    is we are integrating off-the-shelf capabilities onto a
    platform that was not designed as a truck, it was a truck--
    space, weight, power, cooling--to handle these mission modules.
    And it becomes an engineering issue associated with the
    details, those interfaces, and operating on and off the ship as
    opposed to an operational test risk where we are going to take
    a high-risk new system out and determine whether or not it
    works.
        We know these systems are going to work. We know they are
    going to work. The 60 [SH-60] works today. It is the workhorse
    for the fleet. The remote mine-hunting system, we have
    demonstrated 800 hours of operational testing of that system,
    and so it is well beyond its mean time between failures that we
    were targeting for.
        The AQS-20 Alpha sonar associated with the mine
    countermeasure mission package, that is a 20-year-old sonar. We
    know exactly how it works, and what we are doing is a preplan
    product improvement so that we can get it to the next level of
    capability.
        The 30-millimeter gun works. It is on the LPD-17 class.
        You write down the list of those systems that we are
    bringing in that first increment, the systems work. The risk is
    extremely well managed. We are working the engineering details
    of integrating those capabilities into that platform with the
    trained crew, and demonstrating its operational performance
    against those key performance parameters.
        Mr. Francis is exactly right. We don't meet the final level
    of capability that we are targeting for the program until the
    fourth increment of mine countermeasures, third of the surface
    warfare, and really off the bat with ASW [antisubmarine
    warfare]. But those are planned, those are scheduled, and we
    are executing in accordance with those schedules except for the
    impact of sequestration, continuing resolution and budget
    reductions, which is putting our test program at risk, because
    when we pull that much money out of our test program, that
    slows us down, and we are having to try to recover gracefully
    from that.
        Mr. Forbes. Let me let you take just a breath there. Just a
    minute. I want to come back to you, Admiral.
        But, Mr. Francis, you have heard the Secretary's very
    logical, rational reasoning there. What was your response to
    that?
        Mr. Francis. I see things differently, Mr. Chairman. If we
    go through what we are learning on the mission modules, and let
    us just take mine countermeasures I was going through here, the
    sonar is an off-the-shelf system, but the shelf is a little
    dusty. The sonar has not been able to detect mines as we have
    expected. It has had some false positives. It needs preplanned
    product improvement. We have some operational work-arounds. The
    same is true for each of the four systems in that first
    increment. They haven't worked the way we thought. We also
    thought that the OASIS [Organic Airborne and Surface Influence
    Sweep] system was going to be able to be towed by the MH-60,
    and that has been scrapped.
        I am not offering this up as, gee, this means the program
    is terrible, but it means we are learning as we go, and things
    may not work out the way that we thought.
        On surface warfare, Mr. Hunter brought up the issue about
    the missile that gives that ship the stand-off range for the
    littorals. So that is the part we don't know yet. That is going
    to be a TBD [to be determined].
        I don't think we can be confident that mission modules are
    going to do what they say they are going to do. And this is
    also developmental testing. This is very structured, benign
    environment testing, experts and maintainers from the
    contractors present. That is not what the operational concept
    is going to be.
        So there is a reason that the law was created for
    operational testing. There is a reason there is a Director of
    Operational Testing Evaluation who reports to the Congress and
    the Secretary of Defense. So what is going on now is not a
    substitute for operational testing.
        Mr. Forbes. Admiral, I know you love this program, and I
    say that in a good way, because you should. What is your
    response to Mr. Francis?
        Admiral Hunt. Again, I thank you for the opportunity to
    respond here. Let me just walk through the different modules
    and give you my perception.
        Again, with the surface warfare module as it exists right
    now, we do have the guns on there that are equal to the
    equivalent replacement platform if you look at it for a
    specific capability, which would be the FFG-7, Oliver Hazard
    Perry class. She additionally comes with an SH-60 Romeo armed
    helicopter. That provides us the reach and stand-off
    capability. And eventually we will be augmented by the missile
    system when we replace NLOS. But providing the helicopter and
    providing the guns right now is greater capability than what we
    currently have, so I am very comfortable with that, and I think
    that will be used in a very good way, and it will continue to
    get better as we evolve.
        The MCM [mine countermeasures] capability, we have had some
    reliability problems with the sonar. We are working our way
    through there. We plan on taking that IOC [initial operational
    capability] testing here in fiscal year 2015. And I think we
    will demonstrate that that gives us about twice the capability
    for hunting than we currently have on Avenger class.
        That is very important as we kind of take a look at the
    CONOPS on how 5th Fleet and 7th Fleet would use this. It is
    hunting and avoiding in round 1; neutralizing probably in round
    2, and only when you must. And the fact that we do this without
    putting the ship in the minefield greatly provides security to
    our sailors. So, again, I think we know how we are going to use
    that, and it provides value added.
        For ASW, not only does it provide an excellent, excellent
    littoral in the shallower waters capability, the fact that we
    have this variable depth sonar so we can go below this layer
    and get better visibility into submarines, that will develop
    into a capability where the ship fights alongside the carrier
    strike group in different phases.
        To Congressman Hunter's, you know, comments about how you
    would use this in a Western Pacific scenario, I would very much
    appreciate the opportunity, sir, to come back and at a
    classified level walk through that and give you some of the
    ideas that we are looking at. We are developing those; we
    continue to do that. Again, as I said, we are doing that war
    game right now today in Newport, Rhode Island. We will wrap
    that up on Friday. We continue to evolve that using the
    capabilities in different ways.
        When you ask, is LCS going to work in the Western Pacific?
    Yes, I think the surface module works very, very well with what
    we have got in the initial evolution of a potential spark to
    warfare. The ASW platform will be good for being out and about
    should things go hot, and a very important thing in protecting
    the carrier and the amphibious ships. And the MCM capability
    that she provides may be at the wrap-up at the end. The fact
    that she can do all of those, understanding you have to time-
    sequence it, war is not an immediate overnight thing, it takes
    time, and that is part of the logistics aspect of tying it
    together in an effective way, and we are looking at doing that.
        Mr. Forbes. Admiral, I don't want to speak for Mr. Hunter
    or for my good friend the ranking member, but I think at least
    all three of us would love to have not just that briefing, but
    I think the committee would love to have a briefing.
        Mr. Secretary, I know that you are the guy that builds the
    ships once they tell you what we need to build, you know, but
    at some point in time we would love for the Department to come
    over and give us a laydown of this is what we think the risks
    are, this is why we need these capabilities, this is the
    projection, so we are looking at that in a holistic picture.
    What we want to make sure we are not doing is creating a
    strategy by acquisition. You know, we want to make sure we have
    the strategy, and then we are getting what we need to to get.
        And, Mr. Secretary, one criticism that has come forward is
    that we do have two designs. Those designs are moving in a
    similar path. I had the privilege of going out and seeing both
    of them back to back, near Mr. Hunter's home turf, and they are
    incredibly different. And when you ask both crews which one is
    best, needless to say, it is the one they are on. But then they
    said something unique: We may have to have a hybrid of the two.
    But I think what Mr. Francis would say, without putting words
    in his mouth, is that you are committing to buying all of this.
    At what point in time do we sit back and say, well, do we need
    some design changes on these vessels, and by the time we get to
    know what we need, have we already locked in to what we are
    going to buy?
        So how are we protecting against that, Mr. Secretary, and
    do you see any proposed design changes that might be
    forthcoming?
        Secretary Stackley. Yes, sir. We are capturing lessons
    learned, and we are looking at opportunities. Mr. Francis
    described studies that we are doing. In fact, as previously
    discussed, we are specifically looking at C4, command, control,
    communications, computer, and information systems, as well as
    the combat system, looking at individual elements, plus the
    command and decision system that rides on the network. Those
    are the principal areas.
        In the specific case of LCS 1, we discuss the ship service
    diesel generators. We are looking real hard at the design that
    we have in place and making the upgrades to that design that
    are necessary to support the platform better.
        So those evaluations are taking place. I described loading
    the combat management system onboard the LCS 2 variant with two
    other versions that are more common to the Navy. We are on that
    path. We are looking at the individual components associated
    with the combat system and just evaluating is this meeting our
    needs most effectively; are there other alternatives that we
    should consider; and if so, what is the cost, what is the
    benefit; and what would be the strategy for incorporating those
    without driving costs into the program?
        Mr. Forbes. Mr. Secretary, would not Mr. Francis come back
    and say that was his point, that we are looking at these
    modification designs, but are we going to be locked in too far
    on our buy?
        Mr. Francis, let me not put words in your mouth. What would
    your response to that be?
        Mr. Francis. I think that is a fair characterization, Mr.
    Chairman. So to these, I think these are changes to the
    existing designs that could be considered. Will they affect the
    learning curves that we have enjoyed on the current ships?
    There is, I think, the question, then, going forward in block
    16, which could be flight 1 of the ship, if we are looking at
    the shipbuilding plan, the 30-year plan, it has lower
    quantities. Is that going to a single design, whether it be a
    hybrid design or one of the other two? That would be much more
    significant.
        Mr. Forbes. Mr. McIntyre, do you have any questions that
    you would like to pose?
        Mr. McIntyre. Thank you. I know our time is running short,
    and I will just ask quickly, and thank you for conducting this
    hearing.
        Thank you, gentlemen, for your commitment to helping our
    U.S. Navy continue to be the best that it is; in fact, in the
    entire world.
        Having been upon LCS 1, the USS Freedom, it is an
    impressive ship, very interesting, and obviously, with the
    capabilities that it has, something that we want to make sure
    that we continue to support.
        I have a couple of quick questions. The Joint High Speed
    Vessel [JHSV] has been added to the LCS Council's purview. How
    are these programs related, and does this mean the Navy is
    considering adding the Joint High Speed Vessel to meet some of
    the LCS missions?
        Admiral Hunt. The CNO made a decision to add the JHSV
    program to the LCS Council because he was impressed with, I
    think, the degree that we were digging into the program,
    finding new ways to improve it. He liked the process aspect of
    it. So he asked us to take a look at JHSV, one, because there
    is some commonality with LCS 2, where there may be some
    efficiencies; and then, two, take a look at what we could do
    with what I will call roll-on and tie-down capabilities to
    potentially enhance the capability of that platform to do other
    missions.
        So you have got this group of folks that has been gathered
    and working LCS for almost a year now. With a lot of thought
    and different ideas, it is a quick adjustment to roll in
    another similar size, shape of a different mission ship and
    take a good hard look at that and see what are the
    opportunities, again, for efficiencies and, two, to utilize as
    comparable ways to interact with LCS, and there certainly are
    many. We could include that in maintenance packages or training
    packages afloat when we start operating the LCS in small groups
    forward.
        So we are exploring things, a little programmatic change, a
    lot of research and idea, then to come back, be considered, and
    take it through the normal process that we have for any
    shipbuilding program.
        Mr. McIntyre. How long is that evaluation going to take, do
    you think?
        Admiral Hunt. It is open-ended. Right now we are kind of
    targeting having this thing wrapped in about a 6-month period,
    but I haven't been given a completion date by CNO.
        Mr. McIntyre. Secondly, there have been a number of press
    reports referring to internal Navy studies questioning the
    combat capability of the LCS. I don't know if we quite hit that
    head-on today. And as we are wrapping up, maybe we ought to go
    in and hit it head-on so those questions don't linger.
        What design and requirement changes to the LCS Council--is
    the LCS Council considering to address these concerns? I know
    you were touching some on that in answering Mr. Forbes'
    questions, but I just want to make sure there is nothing else
    out there. And what impact would these changes have on the
    seaframes themselves?
        Secretary Stackley. Let me go ahead and take that one.
        First off, both versions, installed combat systems, meet
    the requirements. And what we are doing is we are looking at
    alternatives to improve upon that, either improve upon that
    capability, or drive some further commonality with the broader
    fleet. So in that regard, we are specifically, as I described,
    looking at the communication suite. The LCS specification, we
    did not specify what communication suite to install onboard.
        Com [communication] suites are volatile in terms of
    technology. The rate of change of technology out there for a
    communication suite insists that we are going to be continually
    upgrading these systems in the ship's life. And so we are
    taking a look at, okay, if we are going to be refreshing and
    upgrading the communication suite, then is there a point of
    incorporation where we take a more standard common suite in the
    Navy and then, when we upgrade, replace it with that standard
    suite? And, in fact, we are on that path.
        And now when you talk about what is the impact, we are
    talking about cabinets in the--basically cabinets landing on
    foundations and potentially some antennas. We are going through
    what that means in terms of drawings, in terms of production,
    in terms of equipment procurement, so we will have both a cost
    and schedule assessment in that regard.
        On the combat systems side, we are looking at a couple of
    areas. One is one of the principal batteries on the ship, which
    is in the self-defense system. Today LCS 1 and LCS 2, we have
    different systems that we are going to move to a common system,
    referred to as SeaRAM. It is basically a RAM [Rolling Airframe
    Missile] missile launcher mounted with a close-in weapons
    system radar system, gun mount, and that provides tremendous
    capability with minimal impact to the ship, but some price
    delta in terms of the cost of the equipment. Well worth the
    investment, and so we are committed to heading down that path.
    Otherwise we are taking a look at the different three-
    dimensional air search radars on board and assessing and
    comparing those to determine does it make sense to go to a
    common design in that arena.
        Mr. McIntyre. Thank you, Mr. Secretary.
        Thank you, Mr. Chairman.
        Mr. Francis. Mr. Chairman, can I offer one comment on that?
        Mr. Forbes. Absolutely.
        Mr. Francis. One of the things we haven't talked about in
    design, and it is more, I would say, mundane than combat
    systems and so forth, is we have added 20 berths, I believe, to
    this ship. To be determined, then, is how to do the
    habitability requirements that go with it, you know, the water,
    the food, the storage and so forth, if you are going to house
    that many more sailors. That could have design implications
    because of the space limitations on the ship. So not as
    glamorous, but something that would have to be looked at.
        Secretary Stackley. And I would just counter, this isn't
    point/counterpoint, but we added the bunks with a clear view on
    what the capacity was of the installed capacity for
    habitability on the ship, because to go beyond that, in fact we
    would be looking at extra chill boxes, extra stowage for the
    crew gear and things of this nature. So we believe right now we
    have it about balanced, and if we go beyond that, in fact, we
    are going to have to take a look at the installed habitability.
        Mr. Forbes. And it is not point/counterpoint, but it is
    question and answer, and we appreciate you guys doing that.
        I want to come back to what I started with and to say that
    I have absolutely no problem that we don't all agree on this. I
    think that is the strength of our Navy and the strength of our
    way of government, that we can ask these questions and get
    answers. I want to compliment all three of you for your
    professionalism, the teams that work with you, and for your
    ability to come in here and give us information. You know, we
    don't always get that. You all have been wonderful throughout
    this in answering the tough questions.
        The other thing I want to say is I have incredible
    admiration for my friend Mr. Larsen, but I disagree a little
    bit with the fact that I don't want to read any more about this
    book. I want to read about this book for years to come, I want
    to read about the stories of how the LCS saved lives and
    defended this country, and that is why we are doing this,
    because sometimes the first few chapters are the heavy reading
    you have got to get through, and that is what we are all
    working through now, to make sure that we have a happy ending
    to this saga as it goes forward.
        And the other thing is while we believe in this program, we
    don't want to wake up and have half our Navy LCSs. You know, I
    think none of us want that. We want to make sure we get the
    right mix, the right balance as we do it.
        So I want to thank all of you. I told you at the beginning,
    also, I want to give you the final wrap-up of anything you
    think we didn't cover that we should have, any comments that
    you think were misconstrued. This is your chance. And, Admiral,
    if we can start with you, because that is where we started our
    hearing, love to give you the last word, and then we will go
    right on down the line.
        Admiral Hunt. Well, thank you, Mr. Chairman. I appreciate
    the opportunity.
        Again, I think we have covered most of the points that I
    wanted to get in there, but I would tell you, this is the
    capability that we need forward. We need numbers, and we need
    presence out there. The capability that we have in the existing
    mission modules and those that are quickly to follow, to
    include the MCM, is one that is vitally necessary, and it will
    be used. And our forward fleet commanders are planning on using
    this capability in a very important way.
        I feel confident that the hulls themselves are going to be
    a great platform in which different payloads, the mission
    modules, will hopefully continue to evolve for the life of the
    ship. As Mr. Stackley has pointed out, most of the components
    that go into mission modules are from other existing programs
    and have proven capability. It is a matter of tying them
    together now and making sure that we can operate them in a
    proper way. To really demonstrate that, I want to get them
    forward in the waters that they are going to operate. That is
    hugely important to those of us that sail ships, and we are
    ready to do that.
        We are going to deliver a good product. I am very confident
    in the program, the leadership that we have, and I really
    appreciate the opportunity to be here, Congressman. Thank you,
    sir.
        Mr. Forbes. Thank you, Admiral.
        Mr. Secretary.
        Secretary Stackley. Yes, sir, just a few comments.
        Clearly the program had missteps at the front end of the
    program, clearly. But the objective was well placed, and we
    have spent time and effort, the Department plus the Congress,
    to get the program back on the right track, and we believe that
    that is where we are. We believe that the performance continues
    to improve on the program, and while we have different
    assessments of risk that remains, we believe, in fact, we have
    got a good risk-mitigation plan in place.
        The GAO has raised some critical questions, as I described
    earlier. Rather than answer those in short statements, what we
    owe you and we commit to you is to come back and go through in
    detail what our plan is, why we believe it makes sense, and
    look for your continued support.
        And finally, I will end where I started, which is today we
    are at 286 ships. The requirement is 306 ships. We don't get
    there without completing this program. It is the most
    affordable ship in the Navy. It does deliver capability; not
    simply capability that we need near term, far term, but filling
    critical gaps that today place vulnerabilities in terms of our
    ability to perform our mission around the world. And so we hold
    this as a priority inside of our shipbuilding program, and we
    are committed to executing and retiring those risks that we
    have discussed today.
        Mr. Forbes. Good, and thank you, Mr. Secretary.
        Mr. Francis, I think you would probably say ditto to
    everything they said, and then you would say but, and we are
    going to let you do the wrap-up.
        Mr. Francis. Thank you, Mr. Chairman. It has been a
    pleasure to be involved in the discussion, and I think, as you
    know, while we have differences, I really respect what Mr.
    Stackley and Admiral Hunt are doing. And I think we are all
    interested in the ship reaching its full potential, so we are
    all part of the same government.
        I would say, you know, to pick up on Mr. Stackley's
    metaphor, if the program is on track, that is good, but we
    don't want it to be on rails that we can't make adjustments
    that we may have to make in the future.
        And I just end on the note, let us not forget about the
    maintenance concept. You know, in other programs, other ships,
    aircraft, if the components aren't as reliable, they need more
    maintenance, need more spares, you can overpower that situation
    with more assets. But LCS will have an austere crew. It is not
    going to have a lot of space for spares on the ship. It has to
    be reliant on offshore support for the ship to stay
    operational. So there is no real plan B there, and let us just
    keep that in mind as we go forward. I think working out that
    maintenance concept and making sure that crew can handle that
    ship and keep it operational that far away from its log
    [logistical] support, very important.
        Mr. Forbes. We thank you for your questions you raise,
    valid good questions; Admiral, for your passion for this
    program. Mr. Secretary, thank you for your commitment to say
    you are going to come back and give us those responses so that
    we make sure the program is going in the direction that we need
    to go.
        And with that, Mr. McIntyre, if you don't have any other
    comments----
        Mr. McIntyre. No.
        Mr. Forbes [continuing]. Then we are adjourned. Thank you
    all very much.
        [Whereupon, at 12:35 p.m., the subcommittee was adjourned.]

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                                A P P E N D I X

                                 July 25, 2013

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

                  PREPARED STATEMENTS SUBMITTED FOR THE RECORD

                                 July 25, 2013

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        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

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                  WITNESS RESPONSES TO QUESTIONS ASKED DURING

                                  THE HEARING

                                 July 25, 2013

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

                 RESPONSES TO QUESTIONS SUBMITTED BY MR. FORBES

        Secretary Stackley and Admiral Hunt. The Navy is in the process of
    developing the acquisition strategy for the post block buy ships
    (Fiscal Year (FY) 2016 and out). Additional information will be
    provided once the strategy has been developed, estimated to be in late
    FY 2014. [See page 17.]
        Mr. Francis. We believe our recommendations are reasonable and
    important for ensuring well informed acquisition decisions that meet
    the Navy's needs. In regards to the fiscal year 2014 budget under
    consideration, we suggested that Congress consider restricting funding
    for construction of additional seaframes until the Navy:
          completes the ongoing LCS technical and design studies,
          determines the impacts of making any changes resulting from these
    studies on the cost and designs of future LCS seaframes, and
          reports to Congress on cost-benefit analyses of changes to the
    seaframes to change requirements and/or capabilities and to improve
    commonality of systems, and the Navy's plan moving forward to improve
    commonality.
        Waiting until the Navy has presented this information better
    ensures that there is adequate knowledge to support seaframe
    construction because the results of these studies may indicate the
    potential for additional design changes that may have cost
    implications. As shown in the table below, the Navy planned to have all
    of the studies completed by the start of fiscal year 2014. Therefore,
    we would expect the Navy to be able to report the results to Congress
    before any fiscal year 2014 funding restrictions would take effect.

    ----------------------------------------------------------------------------------------------------------------
               Studies Referred to in GAO Report                         Navy's Estimated Completion Date
    ----------------------------------------------------------------------------------------------------------------
    Command, control, communications, computers, and         Completed
     intelligence (C4I) commonality feasibility study
    ----------------------------------------------------------------------------------------------------------------
    Common Combat Management System Study                    Completed
    ----------------------------------------------------------------------------------------------------------------
    Flight 1 technical trade study (including habitability)  Completed
    ----------------------------------------------------------------------------------------------------------------
    Flight 1 capabilities study                              Completed
    ----------------------------------------------------------------------------------------------------------------

        Since these studies should be complete the Navy should be able to
    meet this proposed reporting requirement prior to March 31, 2014--the
    last day that the Navy can contractually award funding to the shipyards
    in fiscal year 2014 without compromising its obligations to the
    shipyards.
        With regards to plans beyond 2016, we recommended that the Navy buy
    only seaframes at the minimum sustaining rate--which the Navy defines
    as 1 to 2 ships per yard per year--until it successfully completes a
    full-rate production decision review in order to ensure that decision
    makers are adequately informed prior to committing to future seaframe
    buying decisions. DOD disagreed with this recommendation, stating that
    delaying or slowing future procurements to a minimum sustaining rate is
    unnecessary and will cause an increase in prices. However, DOD also
    stated that it plans to procure future seaframes in accordance with the
    Annual Long-Range Plan for Construction of Naval Vessels that supported
    the fiscal year 2014 budget submission which indicates that the Navy
    plans to procure 2 to 3 ships per year from 2016 to 2027. If the Navy
    adheres to its current long range shipbuilding plan and continues to
    buy seaframes from both shipyards as it has been doing, then our
    recommendation is consistent with the Navy's future procurement plan.
    But if the Navy makes significant changes to its future procurement
    plan, such as opting to downselect to one shipyard (which could
    increase the rate above the minimum sustaining rate for one shipyard)
    or planning a large block buy, we would recommend that the Navy first
    gain key knowledge from operational testing results. We would again
    caution that while slowing production might result in an increase in
    seaframe unit prices, the cost to the government of buying ships before
    validating performance and ensuring that the seaframes still meet the
    Navy's needs might be much greater. Since the Navy is not currently
    under contract for any LCS seaframes beyond 2015, it currently has no
    longer term contractual obligations to these shipyards that could be
    impacted. [See page 17.]
    ?

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                  QUESTIONS SUBMITTED BY MEMBERS POST HEARING

                                 July 25, 2013

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

                       QUESTIONS SUBMITTED BY MR. MCKEON

        Mr. McKeon. Please comment on the capabilities of the ALaMO system,
    the threats it addresses, it's development timeline and funding
    profile.
        Secretary Stackley and Admiral Hunt. The Advanced Low Cost
    Munitions Ordnance (ALaMO) system is currently in science and
    technology demonstration by industry but after successful development
    it is projected to provide all-weather operation and improved lethality
    over existing 57mm ammunition. Once developed, ALaMO would provide an
    extended engagement range and guidance, making it an improved counter-
    small boat capability. The system uses a combination of two channel,
    multi-band sensor for target acquisition and Guided Integration Fuzing
    (GIF) in order to maximize warhead lethality.
        ALaMO is not an acquisition Program of Record and therefore not
    currently funded. The estimated development cost to conduct Engineering
    Manufacturing and Development over a five year period is estimated to
    be $225M. The notional development timeline would lead to Initial
    Operational Test & Evaluation (IOT&E) of ALaMO in the early part of the
    fifth year, with an Initial Operational Capability (IOC) later in that
    same year.
                                     ______

                       QUESTIONS SUBMITTED BY MR. FORBES
        Mr. Forbes. DOD disagreed with GAO's recommendation to only buy the
    minimum quantity of ships to preserve the industrial base until a full-
    rate production review is held in 2019. The Navy's most recent long-
    range shipbuilding plan states that the Navy intends on purchasing two
    ships per year in fiscal years 2016-2018, followed by three ships per
    year in 2019. This is the minimum rate if there are two shipyards
    building LCS. Does the Navy's disagreement with the GAO recommendation
    mean that it has chosen to downselect to one shipyard as part of its
    acquisition strategy going forward?
        Secretary Stackley and Admiral Hunt. The Navy's decision to
    continue procuring two ships per Fiscal Year in FYs 2016-2018, followed
    by three ships per year in FY 2019, reflects the need to remain on the
    critical path to meeting the Navy's Force Structure requirements as
    outlined by the Chief of Naval Operations (CNO). The LCS shipbuilding
    profile is in alignment with the CNO's 2012 Navy Force Structure
    Requirement and does not reflect the outcome of an acquisition
    strategy. While the Navy is mindful of the need to preserve the
    industrial base, the Navy disagreed with GAO's recommendation due to
    the need to maintain the flexibility to consider the appropriate
    procurement strategy in the context of the industrial base as well as
    Department of Defense Strategic Guidance and the CNO's Force Structure
    Requirement.
        Mr. Forbes. The former Under Secretary of the Navy and others have
    noted that each variant may be better suited for certain regions and
    missions; has the Navy begun to assess the relative advantages of each
    seaframe design and how will this affect the next contract award?
        Secretary Stackley and Admiral Hunt. The Navy is evaluating its
    follow-on acquisition strategy, which includes assessing the advantages
    of each seaframe design. As part of this acquisition strategy, the Navy
    will consider a number of factors in making its decision including
    maintaining competition, overall cost and affordability, each variant's
    operational performance, as well as the industrial base. All of these
    factors will be assessed in the context of how to best meet the CNO's
    Force Structure Requirement.
        To date, both LCS variants provide the operational capability
    required by the Navy and the Navy's decision to continue production of
    both variants of ships was founded on the additional savings achieved
    in procurement as well as the benefit to the industrial base. As the
    two designs become more prevalent in the Fleet and gain additional
    operational time, the Navy may find that some capabilities are enhanced
    on one variant over the other and will evolve the ships as has been
    done with past shipbuilding programs.
        Mr. Forbes. Developmental testing to date of the mission modules--
    especially the mine counter measures mission module--has shown
    continued performance problems, with the technologies generally not
    operating as intended. If the mission modules do not perform as
    expected in operational testing, how will this affect the Navy's
    planned purchase of seaframes and/or mission packages?
        Secretary Stackley and Admiral Hunt. Navy is committed to achieving
    Initial Operational Capability (IOC) for the three Littoral Combat Ship
    Mission Packages, and following IOC each mission package will continue
    to provide improved warfighting capabilities to the Fleet.
        Through time-phased fielding of capability, Navy will be able to
    rapidly field systems as they mature rather than waiting for the final
    capability delivery. Further, the flexibility of this concept is that
    if a technology does not meet a specified requirement, a determination
    can be made to use the technology because of the operational value it
    provides, or a different technology can be inserted into the mission
    package without having to start a new system program. Currently the
    capabilities of the initial increment of each Mission Module exceeds
    capabilities existing in today's fleet. The result is a savings in both
    reduced fielding time and overall cost.
        As Navy prepares for the next procurement of LCS ships,
    developmental and operational testing of the capabilities of each LCS
    Class and associated Mission Package is being conducted and the results
    will be used to inform future program decisions.
        Mr. Forbes. In your 2010 testimony before the Congress, you note
    that the block buy strategy for seaframe procurement did not require
    the Navy to buy any ships after the first year and did not have
    termination costs, thereby enabling the Congress and the Navy to have
    continual oversight. Given the issues highlighted in GAO's recent
    report, shouldn't we exercise this oversight and allow the Navy to
    pause and figure out the design and capabilities that it wants in these
    ships?
        Secretary Stackley and Admiral Hunt. Navy does not believe a pause
    is warranted in construction of the Littoral Combat Ships or the
    Mission Packages. The required capability of the ships and Mission
    Packages is well defined within its Capabilities Development Document
    (CDD) and it is this capability that has been delivered to Navy with
    the commissioning of USS FREEDOM (LCS 1), USS INDEPENDENCE (LCS 2), USS
    FORT WORTH (LCS 3) and soon, USS CORONADO (LCS 4).
        Since the 2010 testimony, significant strides have been made in
    addressing key risks to ship production. For example, lessons learned
    from the lead ships have been captured and thoroughly incorporated into
    the production planning and processes. Lead ship design deficiencies
    have been corrected and the design is very stable, with design changes
    reduced by 80 to 90 percent in the follow ships. Both shipyards have
    also made substantial investments in facility improvements and
    workforce training which have greatly improved the accuracy and
    efficiency in each ship's construction. The larger vendor base is also
    leveraging the stability provided by the long-term LCS contract to
    drive down cost. As a result of these improvements, the ship costs are
    under control and are contained within the fixed-price contracts which
    limit the Government's liability.
        The LCS procurement strategy has not changed since the Block Buy
    awards in December 2010. Navy will not be required to pay termination
    or cancellation costs if the FY 2014 and FY 2015 ship contracts are not
    funded. However, there are additional costs Navy would be required to
    pay if the FY 2014 and FY 2015 Block Buy ships are not funded. Cost for
    all ships under contract will be increased due to impact of lost
    shipyard workload, inefficiencies, and production breaks in the vendor
    base. The Navy's liability in this case extends to the contract ceiling
    for LCS 5-LCS 16. Additionally, in the event of lost workload at Austal
    USA, the Joint High Speed Vessel program cost would increase. Further,
    insofar as these ships were procured within the framework of the highly
    competitive fixed price contracts, Navy risks significant cost
    increases to procure these ships in future years (which would be
    necessary to meet Navy's requirement). Most importantly, a pause in
    seaframe procurement would cause a significant impact on meeting Navy's
    Force Structure for small surface combatants. LCS is central to meeting
    the Force Structure requirement and pausing production would exacerbate
    Navy's challenge in building to the right mix of ships as detailed in
    the 30 year shipbuilding plan.
        Mr. Forbes. Why was the Navy delegated acquisition authority for
    the mission modules program from OSD? What steps do you intend on
    taking to manage that program, given its continued performance
    problems, delays in achieving milestones and aggressive acquisition
    approach?
        Secretary Stackley and Admiral Hunt. On October 3, 2012, USD(AT&L)
    signed an Acquisition Decision Memorandum (ADM) designating the
    Littoral Combat Ship (LCS) Mission Module Program as an ACAT IC program
    and delegating the Milestone Decision Authority to the Navy. USD(AT&L)
    retained approval authority for the initial Acquisition Program
    Baseline (APB) for the LCS Mission Module Program.
        The Navy will execute the normal, rigorous process to ensure that
    the Mission Module procurement meets the specified requirements, and
    that the costs are well understood. The Navy continues to perform
    annual Navy Gate Review and Defense Acquisition Board Integrated
    Program Reviews with USD(AT&L). Additionally, the Navy will continue to
    rely on the LCS Council, with 3-star flag officer membership from
    requirements, acquisition and fleet stakeholders, to drive actions and
    coordinate all administrative control responsibilities.
        The LCS Mission Modules are currently on track to deliver the
    capability needed by the Navy, and they are doing so within the cost
    targets established for the program. The greatest risk to the program
    is not technical, it is the risk posed by disruption and delay caused
    by continuing resolutions, sequestration and other budget reductions.
        Mr. Forbes. The GAO report clearly lays out the delays in the
    development and integration of the surface-to-surface missile for the
    Surface Warfare Mission Package. According to the report, the Navy
    plans to procure just one Griffin unit with eight Griffin IIB missiles
    by 2015, but now even this plan has been delayed and may be
    reconsidered. What is the way forward on the surface-to-surface
    missile? Is the Navy planning to conduct an Analysis of Alternatives to
    determine the best long-term material solution for this critical
    component of the Surface Warfare package?
        Admiral Hunt. The Navy suspended Surface-to-Surface Missile Module
    (SSMM) Increment 1 (Griffin) activities during Fiscal Year 2013 in
    order to assess alternative solutions which could provide increased
    range and capability. The Navy is also planning on conducting a SSMM
    Resources and Requirements Review board (R3B) in October 2013.
        These events will help determine the SSMM path forward and revised
    timeline.
                                     ______

                      QUESTIONS SUBMITTED BY MR. LANGEVIN
        Mr. Langevin. My understanding of the LCS program is that the ship
    is critical to the Navy's network-centric warfare and intended to
    replace three other classes of aging ships. Understanding the costs,
    schedule, and performance items associated with the sustainment of this
    program is important for us in Congress to make informed decisions
    about the future of the programs. Focusing on the interesting
    developments in USV and UUV technologies being integrated with the
    mission packages, I am concerned by the recent July 2013 GAO report
    that states, ``they do not believe the Navy has adequate knowledge
    about how integrated mission module systems onboard an LCS will perform
    in an operational environment.'' Additionally, the GAO report asserts
    that the Navy will not be able to meet threshold capabilities defined
    in its requirements documentation with mission modules integrated with
    the seaframes until 2019. I'd be interested in your assessment of how
    these critical technologies are being implemented within the LCS
    program given the setbacks within the Mine Countermeasure Modules
    (MCM).
        Secretary Stackley. The Mine Countermeasures (MCM) and Surface
    Warfare (SUW) Mission Packages are being delivered incrementally for
    purposes of controlling cost and risk while fielding initial capability
    in the most rapid manner practicable.
        The initial increments for both of these Mission Packages meet or
    exceed current capabilities in the Fleet today. Each of these Mission
    Packages brings credible combat capability to the Fleet now for SUW and
    for MCM in FY 2015.
        Increment I of the MCM Mission Package uses a semi-submersible
    vehicle called the Remote Multi-Mission Vehicle (RMMV), which tows the
    AQS-20A minehunting sonar set. This system is called Remote Minehunting
    System (RMS) and can operate under remote control, or execute a
    programmed search in an autonomous mode to find mines either in the
    water volume or on the bottom. This system has accumulated over 850
    hours of successful testing to date and is scheduled for Initial
    Operational Capability (IOC) in FY 2015. Increment II will incorporate
    an unmanned surface vehicle to conduct sustained influence minesweeping
    capability, and is scheduled for IOC in FY 2017. The last planned
    increment will use the Knifefish Unmanned Undersea Vehicle (UUV) for
    buried mind detection, and is scheduled for IOC in FY 2019.
        Mr. Langevin. We recently held a hearing on the Asia-Pacific
    Rebalance; I'd be interested in hearing your thoughts on how the LCS
    would be utilized within an A2/AD environment.
        Secretary Stackley and Admiral Hunt. LCS, with a surface, anti-
    submarine, or mine countermeasures Mission Package embarked, is
    designed to conduct littoral operations within an Anti-Access/Area
    Denial (A2/AD) environment. LCS will be a vital component of any A2/AD
    operations, whether clearing mines, identifying enemy submarines or
    protecting high value units from hostile, swarming surface craft.
    Littoral Combat Ships are able to respond to threats quickly with speed
    (40 plus knots), maneuverability, a shallow draft and the unique
    capacity to respond with a variety of networked off-board systems.
        LCS is designed to operate independently or in surface action
    groups in low-to-medium threat environments. As a small surface
    combatant, LCS was not envisioned to operate independently in a high
    air threat environment. Rather, LCS will be networked as part of a
    battle force including multi-mission, deep water surface combatants and
    air assets to defend against elevated A2/AD threats such as high-volume
    Anti-Ship Cruise Missile (ASCM) raids, Anti-Ship Ballistic Missiles
    (ASBMs), and tactical air threats. While LCS has a very capable self-
    defense capability, in situations where the threat of complex and high
    volume anti-ship missile attack is high, LCS will operate with Strike
    Group assets or area air defense capable ships.
        In addition to Mission Package weapons and systems, LCS will use
    its speed, organic weapons (including 57mm gun, decoys, chaff, and the
    RAM and SeaRAM missile system) and sensors to counter surface and air
    threats in the littorals. Further, LCS has equal or greater self-
    defense capability compared to today's small surface combatants
    including Frigates, Mine Countermeasure Ships and Coastal Patrol Craft.
        Mr. Langevin. We recently held a hearing on the Asia-Pacific
    Rebalance; I'd be interested in hearing your thoughts on how the LCS
    would be utilized within an A2/AD environment.
        Mr. Francis. Since GAO has not completed work on this topic, we
    would suggest that you please direct this question to the Navy for a
    response.
                                     ______

                       QUESTIONS SUBMITTED BY MR. WITTMAN
        Mr. Wittman. Much of the savings and efficiencies of the LCS, the
    forward deployment plan, the mission modules, personnel reductions,
    logistics supply chains are all ``works in progress''. When do you
    expect to have this complete ``LCS system'' up and running--that means
    enough mission modules that have been tested and proven deployed to the
    appropriate location with the correct personnel to support them and the
    supply chain necessary for this bold concept of operations? When this
    entire system is up and running and the expected efficiencies are
    finally realized--the LCS hulls will be 10/15 years, over one third of
    their hull life will be expired before the efficiencies of the LCS are
    fully realized?
        Secretary Stackley. By Fiscal Year 2016, all three mission packages
    will have achieved Initial Operating Capacity (IOC). By Fiscal Year
    2018, the support facilities for Littoral Combat Ships (LCS) and the
    mission modules will be operational on both East and West Coasts and in
    two forward operating stations.
        In the 3:2:1 rotational crewing concept, three crews rotate between
    two LCS, with one ship for every two LCS operating forward, providing
    persistent presence in the Pacific Command (PACOM) and Central Command
    (CENTCOM) areas of responsibility. Under this concept, with 52 LCS,
    Navy will be able to continually forward-operate 26 LCS. In the current
    Navy deployment model for single-crewed cruisers, destroyers and
    frigates, the Navy would require more than one hundred ships to
    maintain the equivalent level of presence of 52 LCS. The LCS program
    remains an economical method to address warfighting capability gaps
    while providing sizable global forward presence.
        In Fiscal Year 2018, the Navy's fleet will include 20 LCS. USS
    FREEDOM (LCS 1) and USS INDEPENDENCE (LCS 2), which delivered in 2008
    and 2010, respectively, will be the only two LCS that will be near the
    10 year point of their service life.
        By contrast, LCS 5--LCS 20, will be less than four years old at the
    point when the LCS system is ``up and running'' with tested and fully
    supported ships and Mission Packages.
        Mr. Wittman. How has the Navy ensured compliance with Title 10
    maintenance requirements for U.S. homeported ships while supporting LCS
    1 forward deployed? And, what will be the ultimate plan for supporting
    multiple hulls in both Singapore and Bahrain?
        Secretary Stackley. Title 10 Section 7310 states ``A naval vessel
    the homeport of which is in the United States or Guam may not be
    overhauled, repaired, or maintained in a shipyard outside the United
    States or Guam, other than in the case of voyage repairs.'' USS
    FREEDOM's homeport during the current deployment to the Western Pacific
    remains San Diego, and therefore the Navy is providing required labor
    and technical expertise for regularly scheduled Preventive Maintenance
    Availability Periods (PMAV's) and Restricted Availability Periods
    (RAV's) via fly away teams consisting of United States based labor
    sources.
        Navy has ensured compliance with Title 10 maintenance requirements
    by using U.S.-based ``flyaway teams'' of U.S. contractors (prime/
    subprime) for ship and mission module maintenance. Lockheed Martin (LM)
    also maintains a team in Singapore in order to coordinate logistics,
    scheduling, planning, quality assurance, liaison with local contractors
    and Navy, and supervise facilities maintenance. Emergent maintenance,
    or voyage repairs, can be performed by either flyaway teams or local
    contractors in accordance with Title 10.
        The Navy's ultimate plan for supporting multiple hulls in Singapore
    and Bahrain is to have permanent facilities in place at those
    locations, which will provide storage, staging and laydown of required
    tools, parts and equipment, as well as providing workshops for U.S.
    Navy personnel and contractor teams. The ultimate composition of
    maintenance teams remains to be determined, but the Navy will continue
    to follow all current and future Title 10 regulations.
        Mr. Wittman. VADM Hunt, how critical is the ASW mission module to
    the LCS mission? In 2008 the Navy cancelled the ASW project on LCS
    after the module showed that it did not contribute significantly to ASW
    capabilities. The Navy changed the requirements for the module to
    include a capability that would function in deep-water escort missions
    of high-value ships and submarines? VADM Hunt, the LCS has been pitched
    to us as a littoral combat ship that would operate at high speed and
    independently deploy. With the ASW module, is the idea now to integrate
    LCS into a Strike Group type scenario for escort duty? I can buy the
    MCM and SUW modules and filling the MCM and PC gaps in the fleet, but
    the frigate replacement seems like a stretch to me. Is the ASW module a
    bridge to far? You have 22 Cruisers and 62 (and counting) DDGs that
    have advanced ASW combat systems suites. Is this a needed capability in
    the LCS?
        Admiral Hunt. The LCS's ASW Mission Package (MP) is critical to the
    LCS mission and to the Fleet's overall ASW capability. LCS is capable
    of prosecuting a threat submarine from detection to engagement, on its
    own or in concert with other ships. The change from a static, barrier
    ASW capability to a mobile, ``in-stride'' ASW capability allows an ASW
    MP-equipped LCS to operate as part of a Strike Group if required. In
    that case, the LCS's ASW capabilities would complement those of the
    other ships and aviation assets to better defend aircraft carriers and
    other high-value ships. LCS significantly enhances the ASW Commander's
    capability to maintain undersea battlespace awareness, counter quiet
    threat submarines, and protect critical Fleet assets.
        LCS with an ASW MP provides this enhanced capability not only in
    deep water with a Strike Group, but also in littoral regions where FFG
    7/CG 47/DDG 51 Class ships may have limited access.
        The LCS, equipped with an ASW Mission Package, provides greater ASW
    capability than the current FFG 7, CG 47, and DDG 51 classes,
    particularly in a littoral environment. Those ships carry hull-mounted
    SONAR whose effectiveness is limited against a submarine hiding below
    an acoustic layer defined by temperature and pressure. The ASW MP
    provides a variable-depth SONAR that can be placed below this layer to
    detect these threats. This SONAR also provides a continuously-active
    acoustic source to provide an uninterrupted flow of data to the LCS.
    Current SONAR systems employed on other Navy ships must transmit pulsed
    signals through the water, listen, and then transmit again. This
    provides a less detailed SONAR ``picture'' to the ship. Together with
    the variable-depth SONAR, the continuously-active acoustic source
    allows an LCS to both detect submarines at longer ranges and better
    detect submarines that are able to hide from currently-fielded SONAR
    systems. The ASW MP also provides a towed torpedo decoy system, the
    Light Weight Tow persistent torpedo decoy system, that has the
    equivalent functionality of the AN/SLQ-25 NIXIE employed by the FFG 7,
    CG 47, and DDG 51 classes, but which has an operating envelope that
    supports lower speed and shallower water operation. Finally, the LCS
    also is able to operate its sensors at a higher speed than those
    classes.
        Mr. Wittman. Admiral Hunt, in light of the Admiral Wray report from
    last year which highlighted various long-term sustainment challenges,
    can you please provide specific examples of how the LCS Council has
    addressed some of these shortfalls and affected change for long-term
    sustainment of the platform?
        Admiral Hunt. The LCS Council has been an integral leadership body
    in addressing the shortfalls identified in Admiral Wray's report.
    Issues addressed by the LCS Council include a variety of solutions
    designed to improve reliability and sustainment of the ship and its
    equipment. Some examples are improving hydraulic systems reliability,
    for the INDEPENDENCE class ships, installing redesigned water jet
    controls for increased robustness to FREEEDOM (LCS 1) and adding
    electrical feedback loops to replace mechanical cables on INDEPENDENCE
    class ships (LCS 2 & 4 scheduled for post-delivery installation).
        In order to ensure the long-term material sustainment of LCS, Class
    Maintenance Plans (CMPs) for both FREEDOM and INDEPENDENCE classes were
    created by the shipbuilders. Surface Maintenance Engineering Planning
    Program (SURFMEPP) engineers conduct a continuous technical review of
    the plans to ensure accuracy. A Maintenance Efficiency Review (MER) was
    completed in March 2013, resulting in the realignment of FREEEDOM (LCS
    1) Planned Maintenance between the core crew and ashore maintenance
    teams. This ensures required upkeep is fully accomplished with proper
    accountability and quality assurance measures with plans to realign
    planned maintenance on INDEPENDENCE (LCS 2) in the future.
        Per LCS Council decision, the Navy added ten additional crew
    members to the core-crew to increase organic capacity for preventative
    and corrective maintenance in order to further enhance organic
    maintenance accomplishment rates. FREEDOM's current deployment is a
    test-bed for several improved maintenance efforts yielding positive
    results. Specifically, installed Reliability Engineering/Condition
    Based Maintenance (RE/CBM) sensors identified material deficiencies in
    the ship's air compressors prior to catastrophic failure, allowing for
    a preemptive repair (vice an unplanned industrial availability) and
    increasing the time the equipment was available for use.
        Mr. Wittman. VADM Hunt, as of last month you have contracted 24
    seaframes and procured 8 mission modules. You are on track to have a
    total of 52 seaframes and maintaining a balance of 16 ASW, 24 MCM, and
    24 SUW modules. What is the target for optimal and efficient manning
    for the hulls and the modules?
        Admiral Hunt. As Navy gains operational experience with LCS, the
    Navy will continue to refine the optimal number of billets and rates of
    Sailors in the LCS core crew and Mission Package detachments. The OPNAV
    Readiness Review that was conducted by RADM Perez, as well as multiple
    war games and studies, have demonstrated the need for additional core
    crew. The additional sailors will increase operational flexibility,
    enhance embarked maintenance capability, and support robust shipboard
    Anti-Terrorism/Force Protection (AT/FP) missions when in stationed in
    austere forward locations.
        As a result of these reviews and studies, USS FREEDOM (LCS 1)
    deployed to the Western Pacific in early 2013 with ten additional core
    crew members. Navy leadership will use the lessons learned from this
    deployment to inform any permanent manning changes. Navy also recently
    decided to add five Sailors to the Mine Countermeasures (MCM) Mission
    Package detachment, increasing the total number of personnel from 15 to
    20. This decision was made to ensure the detachment is able to fully
    meet the maintenance and handling requirements of the unmanned vehicles
    that are the center of the MCM Mission Package. The change was made
    based upon lessons learned during operational tests and evaluations.
    The number of Sailors for each Anti-Submarine Warfare Mission Package
    detachment remains at 15 Sailors, while the Surface Warfare Mission
    Package manning requirement remains at 19 Sailors.
        The potential increases in the core crew and the Mission Package
    are not significant departures from the minimal manning construct. The
    core crew is still within the threshold requirement of 50 personnel,
    and total crew manning remains below the threshold of 100 total
    Sailors.
        Mr. Wittman. VADM Hunt, what is the estimated procurement cost and
    life cycle maintenance cost of one mine warfare mission module? One
    hull costs $460-$480M a piece, while module cost seems to be in the
    range of $45-$59M a piece. We want this ship to replace the PCs, the
    MCMs, and the FFGs . . . Can this ship really replace the FFG mission?
    Would it be as or more affordable/cost effective to build a new FFG?
        Admiral Hunt. Based on the Navy's official Service Cost Position of
    6 February 2013, the Mine Countermeasures Mission Package has an
    initial procurement cost of $97.7M per unit, with an estimated ``life
    cycle maintenance'' cost of $340.1M over 30 years that includes costs
    for operation and sustainment, replacement/attrition/technology
    refresh, and disposal.
        The Littoral Combat Ship (LCS) will be more capable than the Oliver
    Hazard Perry Class Frigate (FFG), Patrol Craft (PC), and Mine
    Countermeasure (MCM) ships. The Navy's strategy calls for a ship to be
    capable of operating in a wide range of environments ranging from the
    open ocean to coastal or littoral waters. The LCS's high speed and low
    draft design make the ship uniquely qualified to operate in this wide
    range of environments. While both of these design features are key
    capabilities, the ship's true capability is its flexibility to be
    configured to perform any of the capabilities resident in an FFG, PC or
    MCM, and the LCS will be able to do so with capability that exceeds
    that of any of these current platforms.
        The Surface Warfare (SUW) capability of the LCS is far superior to
    that of an FFG or PC. The embarked armed helicopter, 30mm and 57mm
    guns, as well as LCS's much greater speed give LCS a superior counter-
    swarm capability. The Surface to Surface Missile Module (SSMM) will
    further improve over time as an extended range missile capability is
    phased into the ship's arsenal. A SUW Mission Package (MP) is also
    configured so that LCS can conduct Visit Board Search and Seizure
    (VBSS), Maritime Interception Operations (MIO), and Intelligence,
    Surveillance and Reconnaissance (ISR) as proficiently as an FFG, and in
    certain mission areas, with increased capabilities.
        When comparing a legacy MCM ship to an LCS, the MCM MP will almost
    double Navy's legacy capability when the first increment meets its
    Initial Operational Capability (IOC) in FY 2015. For example, the
    Remote Minehunting System (RMS) will provide autonomous clearance of a
    minefield, taking the ship and the crew out of harm's way while doing
    so at an increased clearance rate over the MCM's. Future increments
    will further improve the Navy's ability to find and clear minefields
    throughout the water column as well as in the beach landing zone.
        The Anti-Submarine Warfare (ASW) MP-configured LCS will also
    provide far greater ASW capability than the FFG 7 Class. The LCS ASW MP
    complements and expands the detection ranges of today's Strike Group
    through unique systems such as a variable depth, continuously active
    sonar system. With improved detection ranges and its ability to operate
    sensors at increased speeds, LCS significantly enhances the ASW
    Commander's capability to maintain undersea battlespace awareness,
    counter quiet submarines, and protect critical Fleet assets. LCS with
    ASW MP provides this enhanced capability not only in deep water with a
    Strike Group, but also in littoral regions. The ASW MP's Light Weight
    Towed Torpedo Decoy will provide superior torpedo defense capability
    than the AN/SLQ-25 Nixie system carried by the FFG.
        A new FFG Class would be neither affordable nor able to be fielded
    in a timely manner compared to the current LCS Class. The Navy would be
    forced to incur the high cost and lengthy process of starting a new
    ship acquisition. Additionally, the legacy ships would have to undergo
    a costly Service Life Extension Program (SLEP) during the restart of a
    new program until the replacement FFGs are in-service. The Navy would
    also be left without a key future component to its global forward
    presence. The LCS program includes the 3:2:1 rotational crewing concept
    that provides for three crews to rotate between two LCS, with one ship
    for every two LCS operating forward. This concept provides persistent
    presence in the Pacific Command (PACOM) and Central Command (CENTCOM)
    areas of responsibility. Under the rotational crewing concept, with 52
    LCS, Navy will be able to continually forward-operate 26 LCS. In the
    current Navy deployment model for single-crewed cruisers, destroyers
    and frigates, the Navy would require more than one hundred ships to
    maintain the equivalent level of presence of 52 LCS. The LCS program
    remains an economical method to address warfighting capability gaps
    while providing sizable global forward presence. The LCS program is the
    Navy's most affordable warship program, and the ship is on the critical
    path to meeting the Navy's force structure requirements as outlined by
    the Chief of Naval Operations.
        Mr. Wittman. In April the Chief of Navy Reserve testified before
    the Senate Appropriations Committee Defense Subcommittee
        ``The Navy Reserve provides daily operational support and is a
    potent force multiplier that is leveraged on a daily basis to support
    Navy missions. Examples of the Navy Reserve's support to Navy and Joint
    Warfighting efforts include:
          Reserve Sailors are currently augmenting the first LCS deployment
    aboard USS Freedom (LCS-1).''
        VADM Hunt, how do you see the Navy Reserve force augmenting the
    Active duty force in the future and as more hulls and modules enter the
    fleet? With all options on the table to find efficiencies and cost
    savings, do reserve units and Sailors offer a long-term force
    multiplier to the LCS community and do you see this capability growing
    in the future?
        Admiral Hunt. The Navy Reserve provides essential operational
    support to the Fleet. The LCS Council has been studying further use of
    the Navy Reserve with the Littoral Combat Ship program as more ships
    and mission modules enter the Fleet. Navy leadership has determined
    Reserve Component Sailors will serve in conjunction with the Mission
    Packages and Aviation Detachments, including the unmanned Fire Scout
    system.
        Reserve Component Sailors provide CONUS/OCONUS maintenance of
    Mission Packages and Littoral Combat Ships. With respect to LCS
    Aviation Detachments, the Reserve Component cannot assume the entire
    mission, but they can provide limited Aviation Detachment support as
    well as Fire Scout training at shore bases.
        In Fiscal Year 2013, Reserve Component manning entailed 387 billets
    in 13 detachments throughout the country, providing administrative,
    logistics, training, maintenance and watch standing support. Future
    plans anticipate growth to approximately 1000 billets in 20 detachments
    providing a minimum of 20,000 man days of support per year.
        Mr. Wittman. Admiral, in response to a question posed at a HASC
    hearing in February 2012 about LCS crew swap, you mentioned that the
    most significant savings associated with flying ship crews overseas is
    the cost avoidance of the fuel required for the ship transiting and the
    cost of the associated support ships. Transporting a ship's crew--even
    a relatively small LCS crew--between the United States and a foreign
    port seems to present a significant logistical challenge. Commercial
    aviation is expensive, lacks flexibility, and is not a viable option in
    an environment of heightened tensions or conflict.
        You stated that the Navy was examining the viability of using Navy
    Unique Fleet Essential Airlift (NUFEA) to transport crews, cargo and
    support personnel in both peacetime and wartime for OCONUS LCS crew
    swaps. According to your statement, the Navy could leverage its own air
    logistics capability to enhance operational readiness at a significant
    cost savings.
        a. You have recently completed a crew swap of USS FREEDOM (LCS-1).
    Did the Navy use its NUFEA capability to accomplish this swap?
        b. If so, did you find that the utilization of air logistics assets
    controlled and operated by Navy was a force enhancer and effectively
    supported the operational capabilities of LCS 1?
        c. Your initial analysis concluded that using Navy air logistics
    assets would also be more cost effective than commercial means.
    Considering the crew swap model is in place to save steaming dollars
    and you have found that Navy airlift can execute the mission at a low
    relatively low cost, does the Navy plan to pursue the crew swap model
    with any other class of ships?
        Admiral Hunt. On July 31, 2013, Navy executed the very first
    Littoral Combat Ship (LCS) crew swap evolution. A single Navy C-40A
    Clipper, a Navy Unique Fleet Essential Airlift (NUFEA) asset, was used
    to execute the crew swap. The USS FREEDOM (LCS 1) Blue Crew--consisting
    of 76 personnel from ship's company, mission module detachment, and
    aviation detachment personnel--was safely delivered to Paya Lebar Air
    Base in Singapore. Following a successful turnover of the ship, the LCS
    1 Gold Crew was returned to Continental United States (CONUS) on August
    07, 2013, utilizing the Navy C-40A aircraft.
        The Navy determined that NUFEA provided the most operationally
    effective and fiscally efficient method to execute the LCS crew swap
    mission. The flexibility and responsiveness of Navy's organic airlift
    assets were critical success factors for this mission. The operational
    schedule of a forward deployed surface combatant, especially in the
    Pacific Area of Responsibility, is extremely dynamic and subject to the
    demands of ever-changing world events. This requires air logistics
    support that is flexible and able to respond quickly as the ship's
    operational schedule changes. Since Navy operates and schedules NUFEA
    assets to support Navy's mission, they are uniquely suited to fulfill
    this requirement.
        Cost analysis was an important consideration when determining how
    to source the LCS crew swap mission. Examination of the options
    revealed that Navy saved a significant amount of money using its own
    airlift vice relying on other airlift options (e.g. commercial,
    contract or other services' flights). The LCS crew swap model was
    developed to save ship steaming and maintenance dollars, and NUFEA is
    an important part of this model.
        In addition to being the most cost effective mechanism to execute
    this air logistics requirement, utilizing the Navy's NUFEA assets
    enabled FREEDOM's crews to maintain crew integrity throughout the
    evolution. This permitted an entire crew-to-crew turnover, instead of
    having to conduct the turnover in multiple iterations if the crew were
    unable to travel as a unit. Keeping the crew intact during the airlift
    mission was also essential to ensure force protection--and therefore
    safety--of FREEDOM's crews.
        Due to the success of the first crew swap, Navy plans to use NUFEA
    assets to execute future LCS crew swap missions. There are no plans to
    conduct crew swap with other classes of ship, but if that option were
    pursued by Navy leadership, NUFEA would be a logical choice.
                                     ______

                       QUESTIONS SUBMITTED BY MS. SPEIER
        Ms. Speier. My office has been told that the LCS 1 deployment to
    Singapore relied more heavily upon a ship rider than is typical for the
    Navy, and that some are concerned this may be undermining the ability
    of the sailors to operate the ship in the future. Are contractors
    performing functions that should be performed by sailors so they can
    operate their own ship? How do you know if the training pipeline is
    working if contractors are supplementing the crew?
        Admiral Hunt. During the deployment of USS FREEDOM (LCS 1) to the
    Western Pacific there have been Subject Matter Experts (SMEs) on board
    providing technical assistance to the crew as required. SMEs aboard USS
    FREEDOM are not performing any functions assigned to the officers or
    enlisted Sailors of FREEDOM's crew.
        The first overseas deployment of USS FREEDOM will provide lessons
    learned which will be examined and applied as needed to the shore based
    training curriculums in preparation for follow on LCS crew operations
    and deployments.
        Ms. Speier. What oversight plan would you recommend for Congress
    between now and the next block buy decision? Please includes dates of
    key decision points, information Congress should know before those
    decision points, and possible indicators of increased cost, schedule,
    and general program risk.
        Mr. Francis. Congress has several options for providing oversight
    between now and the next block buy decision in 2016. We highlighted a
    number of these options in our recent report (GAO-13-530) and they are
    also reflected in the table below.
        As shown in the table below, in each fiscal year from now (fiscal
    year 2013) through fiscal year 2015, Congress is faced with a number of
    decisions regarding the future of the LCS program, including
    authorizing and appropriating seaframes and mission modules, and
    ultimately authorizing the next block buy contract. At the same time,
    the Navy plans to complete a series of events over the next couple of
    years, including tests and trials, as well as submissions of Milestone
    documentation and analytical studies--each of which represent
    opportunities to gain further insight into the program's performance
    and enable Congress to make well informed funding decisions (see ``Navy
    Events/Oversight Opportunities''). Milestone documentation may provide
    an indication of increased cost, schedule, and program risk. For
    example, consistent with our recommendation, Congress may choose to
    request that the Navy submit an approved acquisition program baseline
    for the mission modules that accounts for the threshold and objective
    cost, schedule, and performance targets for each mission module
    increment before authorizing future mission module procurements.

    ----------------------------------------------------------------------------------------------------------------
    Fiscal Year
                  Congressional Decision   Navy Events/Oversight Opportunities           GAO Recommendations
    ----------------------------------------------------------------------------------------------------------------
    2013          Authorize and            LCS 1 Singapore deployment           Restrict FY14 ship funding until
                  appropriate FY14         LCS 4 Acceptance Trials              Navy:
                  funding: 4 ships, 4      Aluminum structure testing            Completes ongoing technical and
                  mission packages            (survivability)                                    design studies
                                           Mission Module Milestone B            Determines impacts of design
                                              (including approval of cost,                       changes
                                              schedule, performance baseline and         Reports on plans to improve
                                              test plans)                                        commonality
                                           Capability Production Documents       Reports on cost-benefit analysis of
                                              (requirements) for Mission Package                 seaframe changes; commonality
                                              Increments                                         improvements
                                           Studies evaluating changes to        Buy minimum number of modules needed
                                              increase commonality and add              for operational testing.
                                              capability and requirements
                                           Defense Acquisition Board (DAB) In-
                                              process Review (annual OSD-AT&L
                                              review of program)
                                           Submission of Long Range
                                              Shipbuilding Plan
    ----------------------------------------------------------------------------------------------------------------
    2014          Authorize and            SUW Inc I and Inc II Operational      If the Navy is approved by USD AT&L
                  appropriate FY15            Testing (Freedom variant)                  to award additional seaframe block
                  funding: 4 ships, 4      DOT&E operational assessments         buy contracts for LCS 25 and
                  mission packages         Total Ship Survivability Trials       beyond, ensure that it only
                                              (Freedom variant)                          procures the minimum sustaining
                                           Capability requirements for next      rate (1 ship per year for each
                                              Block Buy contract finalized               shipyard) until successful
                                           Contract award for long-term          completion of full-rate production
                                              maintenance                                review (scheduled for FY19)
                                           DAB In-process Review (annual AT&L
                                               review of program)                        Require Navy to report on relative
                                           Submission of Long Range              advantages of each seaframe before
                                              Shipbuilding Plan                          awarding the next Block Buy
                                                                                         contract.

                                                                                         Buy minimum number of modules
                                                                                         needed for operational testing.
    ----------------------------------------------------------------------------------------------------------------
    2015          Authorize and            Acquisition strategy for next         If the Navy is approved by USD AT&L
                  appropriate FY16            Block Buy contract finalized               to award additional seaframe block
                  funding: 2 ships, 6      Solicit proposals and source          buy contracts for LCS 25 and
                  mission packages            selection for next Block Buy               beyond, ensure that it only
                                              contract                                   procures the minimum sustaining
                  Authorize next           SUW Inc I and Inc II Operational      rate (1 ship per year for each
                  seaframe contract(s)        Testing (Independence variant)             shipyard) until successful
                  (Second Block Buy        MCM Inc I Operational Testing         completion of full-rate production
                  contract)                   (Independence variant)                     review (scheduled for FY19)
                                           DOT&E operational assessments
                                           Total Ship Survivability Trials       Require Navy to report on relative
                                              (Independence variant)                     advantages of each seaframe before
                                           DAB In-process Review (annual         awarding the next Block Buy
                                              AT&L review of program)                    contract.
                                           Submission of Long Range
                                              Shipbuilding Plan                          Buy minimum number of modules
                                                                                         needed for operational testing.

    ----------------------------------------------------------------------------------------------------------------