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



 
                         [H.A.S.C. No. 113-54] 

                      ENSURING NAVY SURFACE FORCE 

                       EFFECTIVENESS WITH LIMITED 

                         MAINTENANCE RESOURCES 

                               __________

                             JOINT HEARING

                               BEFORE THE

                       SUBCOMMITTEE ON READINESS

                        MEETING JOINTLY WITH THE

             SUBCOMMITTEE ON SEAPOWER AND PROJECTION FORCES

                                 OF THE

                      COMMITTEE ON ARMED SERVICES

                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             FIRST SESSION

                               __________

                              HEARING HELD

                             AUGUST 1, 2013

                                     
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                       SUBCOMMITTEE ON READINESS

                 ROBERT J. WITTMAN, Virginia, Chairman

ROB BISHOP, Utah                     MADELEINE Z. BORDALLO, Guam
VICKY HARTZLER, Missouri             JOE COURTNEY, Connecticut
AUSTIN SCOTT, Georgia                DAVID LOEBSACK, Iowa
KRISTI L. NOEM, South Dakota         COLLEEN W. HANABUSA, Hawaii
J. RANDY FORBES, Virginia            JACKIE SPEIER, California
FRANK A. LoBIONDO, New Jersey        RON BARBER, Arizona
MIKE ROGERS, Alabama                 CAROL SHEA-PORTER, New Hampshire
DOUG LAMBORN, Colorado               WILLIAM L. ENYART, Illinois
E. SCOTT RIGELL, Virginia            PETE P. GALLEGO, Texas
STEVEN M. PALAZZO, Mississippi
                 Jamie Lynch, Professional Staff Member
               Vickie Plunkett, Professional Staff Member
                         Nicholas Rodman, Clerk
                                 ------                                

             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
                 Jamie Lynch, 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, August 1, 2013, Ensuring Navy Surface Force 
  Effectiveness with Limited Maintenance Resources...............     1

Appendix:

Thursday, August 1, 2013.........................................    21
                              ----------                              

                        THURSDAY, AUGUST 1, 2013
  ENSURING NAVY SURFACE FORCE EFFECTIVENESS WITH LIMITED MAINTENANCE 
                               RESOURCES
              STATEMENTS PRESENTED BY MEMBERS OF CONGRESS

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

                               WITNESSES

Matthews, RDML Timothy S., USN, Director, Fleet Readiness (N43), 
  Chief of Naval Operations, U.S. Department of Defense..........     3
Rowden, RADM Thomas S., USN, Director, Surface Warfare (N96), 
  Chief of Naval Operations, U.S. Department of Defense..........     2

                                APPENDIX

Prepared Statements:

    Bordallo, Hon. Madeleine Z...................................    27
    Forbes, Hon. J. Randy........................................    28
    McIntyre, Hon. Mike..........................................    29
    Rowden, RADM Thomas S., joint with RDML Timothy S. Matthews..    30
    Wittman, Hon. Robert J.......................................    25

Documents Submitted for the Record:

    [There were no Documents submitted.]

Witness Responses to Questions Asked During the Hearing:

    Mrs. Davis...................................................    43

Questions Submitted by Members Post Hearing:

    Mr. Forbes...................................................    47
    Mr. Wittman..................................................    49
  ENSURING NAVY SURFACE FORCE EFFECTIVENESS WITH LIMITED MAINTENANCE 
                               RESOURCES

                              ----------                              

        House of Representatives, Committee on Armed 
            Services, Subcommittee on Readiness, Meeting 
            Jointly with Subcommittee on Seapower and 
            Projection Forces, Washington, DC, Thursday, 
            August 1, 2013.

    The subcommittees met, pursuant to call, at 4:22 p.m., in 
room 2118, Rayburn House Office Building, Hon. J. Randy Forbes 
(chairman of the Subcommittee on Seapower and Projection 
Forces)
presiding.

  OPENING STATEMENT OF HON. J. RANDY FORBES, A REPRESENTATIVE 
     FROM VIRGINIA, CHAIRMAN, SUBCOMMITTEE ON SEAPOWER AND 
                       PROJECTION FORCES

    Mr. Forbes. Gentlemen, first of all, thank you so much for 
your patience in being here with us today. We don't get to pick 
these votes, as you know, and we are sometimes captive to our 
own voting schedules, but we are delighted to have both of you 
here today with us. And in the interests of time, we are going 
to forego our opening statements and go right to you so we can 
hear from you, if that is all right with you.
    And I want to just say this, though: Chairman Wittman and 
Ranking Member Bordallo and McIntyre are three of the finest 
people that I know in Congress. We have a wonderful two 
subcommittees, in that we are probably two of the most 
bipartisan subcommittees, I think, in Congress and have just a 
great respect for each other in this these two committees. So 
we are delighted to have you here, and you will share a lot in, 
hopefully protecting, the national defense of this country.
    We are delighted today to have with us Rear Admiral Thomas 
S. Rowden, who is the director of surface warfare, and also 
Rear Admiral Timothy S. Matthews.
    Gentlemen, thank you for your service to our country and 
for being here today.
    And with that, Admiral Rowden, I don't know if you are 
going to start, or Admiral Matthews. We would like to turn the 
floor over to you.
    Admiral Rowden. I thank you, sir. Chairman Forbes, Chairman 
Wittman, Congressman McIntyre, Congressman----
    Mr. Forbes. Admiral, would you mind, if your microphone is 
not on, just bring it up close to your mike--your mouth. 
Sometimes it is hard to pick up.

  STATEMENT OF RADM THOMAS S. ROWDEN, USN, DIRECTOR, SURFACE 
 WARFARE (N96), CHIEF OF NAVAL OPERATIONS, U.S. DEPARTMENT OF 
                            DEFENSE

    Admiral Rowden. All right, sir. Congressman Forbes--or 
Chairman Forbes, Chairman Wittman, Congressman McIntyre, 
Congresswoman Bordallo, distinguished members of the 
subcommittees and other distinguished members, I want to thank 
you for the opportunity to discuss the readiness of our surface 
forces.
    In my career, I have had the privilege to command two 
carrier strike groups, a destroyer squadron and a destroyer. In 
all these commands and indeed other commands I have served on 
throughout my career, no matter what my role was, when it came 
time to deploy, I wanted to be sure our ships and sailors were 
not only ready for their assigned missions and any 
contingencies, but also that our sailors were confident in 
their own abilities and in the capabilities of our ships and 
its weapons systems.
    Our readiness to deploy is something we work on every day; 
in the middle of a training cycle; in the middle of a 
maintenance period or on the day after we return from 
deployment, it doesn't matter. There are always qualifications 
to attain, maintenance to accomplish, and tactics to learn. 
There are always sailors transferring from our command and new 
ones coming in that need assistance, guidance, training, and 
leadership. The cycle for every surface ship is always in 
motion, and it never ends until the day the ship is 
decommissioned and all hands depart the ship for the final 
time.
    We build our ships, not for peacetime, not for being in 
port, but rather for executing prompt and sustained combat 
operations at sea. From the shipboard perspective, to achieve 
readiness for battle, we must ensure our ships and weapons 
systems are 100-percent operational and our sailors are fully 
trained to fight the ship. We train our commanding officers 
that when they deploy, they must be ready for battle, and if 
that battle should occur, it is all hands on deck and all gear 
online and operational, maximum redundancy, maximum readiness 
to fight the ship.
    Thankfully, we have not had to steam our ships directly 
into harm's way in the recent past. However, the mandate we 
have from the American people dictates that we must always be 
ready to go into harm's way and protect American interests. 
Whether ``harm's way'' means chasing pirates off the coast of 
Somalia or combating a missile threat, our ships are designed 
and our sailors are trained to make use of the redundancy 
within our vital equipment systems to ensure we can sustain 
battle damage and still fight and win.
    To do that, all of the equipment must be maintained and all 
our sailors must be trained to operate it. Keeping our 
equipment properly operating and training sailors takes money 
and time. When required funding is limited through 
sequestration or for other reasons, we are forced to make hard 
decisions about what gets fixed and what training is completed. 
Make no mistake, we will deploy ready ships, but our ability to 
respond to contingencies and surge additional ships to a crisis 
could be reduced.
    In the long term, if we do not maintain our ships, the Navy 
will be forced to decommission ships before their expected 
service life or before they reach their expected service life. 
We estimate that if sequestration continues over the long term, 
by 2020, we will be reduced from 295 ships down to 257 ships. 
Over the same period, we do not anticipate the combatant 
commanders' demand for ready forces will decrease.
    Without the continued support of Congress and without the 
passage of an appropriations bill and reprogramming authority, 
the Navy may be forced to cancel or defer important maintenance 
and training, reducing the combat readiness and the long-term 
viability of our ships. More importantly, this would deprive 
our sailors of the proper tools to deter aggression around the 
world and, when necessary, to fight and win our Nation's wars.
    Thank you, sir.
    [The joint prepared statement of Admiral Rowden and Admiral 
Matthews can be found in the Appendix on page 30.]
    Mr. Forbes. Admiral Matthews.

  STATEMENT OF RDML TIMOTHY S. MATTHEWS, USN, DIRECTOR, FLEET 
READINESS (N43), CHIEF OF NAVAL OPERATIONS, U.S. DEPARTMENT OF 
                            DEFENSE

    Admiral Matthews. Good afternoon.
    Chairman Forbes, Chairman Wittman, Congressman McIntyre, 
Congresswoman Bordallo, and distinguished members of both 
subcommittees, thank you for inviting me here today and for 
your continued support of our Navy. I look forward to speaking 
with you about the readiness of our surface forces.
    I do not have the operational experience of my esteemed 
colleague, Admiral Rowden. However, as a career maintenance 
officer, I have spent the last 30 years providing combat-ready 
ships and aircraft to warfighters like Admiral Rowden. And as I 
look at the readiness indicators of our surface ships today and 
the likely scenarios that we are forecasting under our 
sequestered budget in fiscal year 2014, I am very concerned.
    We have made great progress over the past few years 
addressing a backlog of surface ship maintenance that has 
accumulated over 10 years of high operational tempo. We have 
developed rigorous engineering standards and maintenance 
assessment processes that will help improve material condition 
of our surface ships. And with Congress' help, we have provided 
the fleet and the shipyards with the funding necessary to 
execute these processes and the associated maintenance. 
However, all of this good work is at risk under the deep 
funding cuts necessary with the Budget Control Act caps.
    In fiscal year 2013, with the budget that Congress enacted 
and the reprogramming authority that was recently granted, we 
will execute all the scheduled maintenance availabilities. 
However, furloughs and overtime restrictions at our regional 
maintenance centers are disrupting waterfront services and 
technical assistance to our ships, as well as Government 
oversight of private-sector work. This will result in 
maintenance delays and compressed training cycles that will 
make it difficult to meet deployment schedules and which impact 
the proficiency of the crews and places more stress on our 
sailors and their families.
    The ship operations accounts, which fund the replenishment 
of spare parts, were also reduced to stay under the mandated 
caps. As a result, we have seen an increase in material 
deficiencies and the cross-decking of spare parts, which are 
early indicators of readiness degradation.
    A sequestered budget in fiscal year 2014 will require 
significant reductions in maintenance in our surface ship 
fleet. Those ships scheduled to deploy in fiscal year 2014 and 
fiscal year 2015 will receive the priority for both training 
and maintenance dollars. The balance of our surface ships will 
not receive their required maintenance. In fact, we project 
that over 50 percent of the scheduled surface ship maintenance 
availabilities will need to be deferred. If not corrected in 
future years, these ships will not stay in service till their 
projected service life and our Navy ship count will decline
accordingly.
    We are also deeply concerned about the impacts on the 
health of our industrial base under sequestration. A skilled 
and proficient labor force in our public and private shipyards 
is a critical component to Navy readiness, and many of these 
jobs will be put at risk with the cancellation or deferral of 
maintenance availability scheduled in fiscal year 2014. These 
are perishable skills that, once lost, will take a long time to 
reconstitute. The readiness of our fleet will certainly suffer 
as this lost industrial capacity results in maintenance delays 
in the shipyards, a trend we are already witnessing now.
    The Navy is committed to improving material condition of 
our surface fleet, but we cannot do so without the support of 
Congress. We urge you to enact a more balanced approach to 
deficit reduction and reverse the detrimental effects that 
sequestration will have on Navy readiness.
    Thank you for your continued support and the opportunity to 
address you this afternoon.
    Mr. Forbes. Thank you, Admiral.
    We have been joined by my ranking member, Congressman Mike 
McIntyre, from North Carolina, and Mike's statement will also 
be made part of the record.
    Gentlemen, I just have two quick questions and then I want 
to get to our other distinguished members here, but earlier 
today in a full committee, we had the opportunity to discuss 
our military's future with Secretary Carter and Admiral 
Winnefeld. Our conversation was quite startling, I guess, to 
say the least, and I am shocked at the dismantling and 
devastation that is being proposed by the Administration, the 
negative consequences associated with sequestration, as both of 
you just pointed out.
    For instance, a fleet of only eight aircraft carriers will 
significantly and irreparably harm our global strategic 
posture.
    Now, at this hearing, we will likely have revealed that our 
existing fleet's being worn out by this period of sustained 
surge as well.
    And, Admiral Rowden, it is my understanding that a severe 
underfunding has occurred in the ship maintenance accounts over 
the last 10 years. Fleet representatives indicated to us on a 
recent trip to San Diego that this underfunding has caused an 
almost $3 billion shortfall in this account.
    When you couple this underfunding with the high operational 
tempo of the fleet, we now have a force that is highly 
motivated but are driving ships and equipment that is not 
properly modernized or maintained to meet their missions. My 
fear is that with the continued impact on sequestration, the 
continued reliance on OCO [Overseas Contingency Operations] 
funding, our ability to adequately support the fleet in terms 
of size and capacity might be in jeopardy.
    Now, considering the long-term underfunding of the ship 
maintenance accounts and the debilitating impact associated 
with sequestration, can you give us your opinion as to how this 
will impact the size and capacity of our surface forces? And 
what would be the long-term impact of these decisions on the 
30-year shipbuilding plan?
    Admiral Rowden. Yes, sir, Mr. Chairman.
    Thank you very much for the question. One of the things 
that we have worked very hard on over the past 3 years is to 
understand exactly where the current maintenance conditions of 
the surface fleet is. And I am very proud of the fact that we 
have worked very hard to understand exactly where we are. And 
as you pointed out, it is about $3 billion of what we call 
reset in order to be able to bring the material----
    Mr. Forbes. $3 million or $3 billion?
    Admiral Rowden. Billion, sir. In order to bring our--that 
is--I am sorry. About $2 billion. We estimate approximately 
$346 million in fiscal year 2014 and about $2 billion in the 
future in order to reset our force. And that is from--that 
occurs from--because we have had to defer maintenance because 
of high operational tempo, because we have had a high 
operational tempo, and because we have had to work--we have had 
a poor definition of the engineered requirements of what was 
required to maintain our ships. We now have a good engineered 
requirement, and I am confident that the money that we say we 
need to reset the force is--is what it is we need.
    The trick will be to continue to keep that on track. One of 
the problems that I foresee is if for whatever reason we delay 
the fund--the execution of that maintenance, as time goes on, 
the price to accomplish that maintenance increases in a greater 
than linear fashion, and so we really have to get after that 
reset maintenance on our ships so that we can preserve those 
ships to their expected service life and maintain the fleet. If 
we don't get after that, then we may have to look at, because 
of the increasing costs, having to decommission ships early, 
and that will--that will reduce our fleet as we move ahead.
    Mr. Forbes. And just two more quick questions, and I am 
asking you to kind of reach back with all of your professional 
judgment and instincts and kind of give us a little forecast 
with a crystal ball. And I know it is tough, but it is what we 
are trying to sell to other members of Congress, but as you 
look at all of these figures and you see where sequestration is 
if we don't change it and we are locked in to where it is, 
where do you think it is going to take us in our overall number 
of ships that we are going to end up with? If you could, either 
one of you, address that.
    But the second thing is this: In 2007, the Navy was able to 
meet about 90 percent of our combatant commanders' 
requirements. The last 2 years, we are meeting about 51 percent 
of those. If we stay on course with sequestration the way it is 
and the cuts that have been made, what is your best guess of 
where we will be in terms of percentages of meeting those 
requirements, especially if we look at reducing our carrier 
groups the way we heard today in our
testimony?
    Admiral Rowden. Yes, sir. Thank you for the question. I--
there is no doubt, I think, that given where we are proposing 
to go with sequestration, that it will reduce the number of 
ships that we have in the Navy. And I think probably by 2020, 
we are looking at about 257 ships.
    Certainly we have to be able to maintain those ships. 
Certainly the price tag to maintain those ships goes up as we 
defer that maintenance. And so I think that in order to be able 
to deploy the ready ships--and we are deploying ready ships--
but I think the surge capacity that we have to be able to 
respond to any contingency is definitely not where it needs to 
be now, and it could go down further as we move forward.
    Mr. Forbes. And I know it is tough, but give me your best 
guess of percentage of COCOM [Combatant Command] requirements 
we can meet. If we only met 50, 51, I think to be exact, the 
last 2 years, what is your best guess if we stay on this curve 
line dropping the way it is?
    Admiral Matthews. Yes, sir. That is a difficult question to 
answer, and I would have to answer it in--with two views, one 
is the short term and one is the long term. So looking ahead to 
fiscal year 2014, we are going to prioritize the COCOM 
requirements. The high-priority deployments are the ones that 
we will keep in the highest priority, but we expect to have to 
cancel some lower-priority deployments. And if I had to give 
you a figure, it would be somewhere around the 90-percent range 
that we would satisfy what we call the global force management 
plan. So we are pretty confident we will get the highest 
priority deployments, and by that, I mean the couple of 
carriers that we will have out there, they won't meet what we 
have traditionally done when you compare to historical norms, 
but we will be able to provide what we have out there today.
    Now, what Admiral Rowden said is very pertinent, in that 
sequestration is going to affect the surge capacity that we 
have in our nondeployed forces. So, as the CNO [Chief of Naval 
Operations] has said recently, that will be brought down to 
about one carrier strike group and one amphibious ready group 
that is available for surge, and that is about it.
    Long-term, however, as the force structure would start to 
come down, I would expect that we are not going to be able to 
meet as many of these requirements with fewer carriers and 
fewer surface ships, but a percentage will be difficult for me 
to figure at this point.
    Mr. Forbes. Well, thank you both.
    I would like to now recognize the distinguished chairman of 
the readiness subcommittee, Mr. Wittman, from Virginia.
    Mr. Wittman. Thank you, Chairman Forbes.
    Admiral Rowden and Admiral Matthews, thank you so much for 
joining us today. I want to pick up on what you stated as far 
as the efforts going into the service maintenance 
availabilities. There is a report out by GAO [Government 
Accountability Office] in September 2012 that reiterates that 
as these maintenance times are pushed forward, it increases the 
cost when the ships eventually do get to port. If you postpone 
too many of them, ultimately, it may become too expensive to 
even keep the ship in service. So, as you talked about, that 
ultimately results in ships retiring early. And then if you 
look at our two--our shipbuilding plan, that ultimately, at the 
end of the day, reduces the number of ships that we have 
available in the future, because we can't build them fast 
enough to replace the ones that we are retiring out of the 
fleet early. And we already see some of that impact with what 
we have gone through this past period of time with the nine 
ships potentially being retired early, the cruisers and the 
amphibs.
    That being said, I wanted to get your perspective on the 
status of the eight deferred maintenance availabilities that 
remain in fiscal year 2013 and what that cascade effect has 
into fiscal year 2014. If you can't get those done, those eight 
deferred maintenance availabilities in 2013, and the CNO said 
the other day that there are 30 maintenance availabilities 
awaiting in fiscal year 2014, you can see the cascading effect 
that that has. What--what do you see as the cumulative effect 
if those dollars there, and you spoke of the $1.9 billion 
needed in that reset effort to get those ships maintained to 
make sure that they are going to be available for our sailors 
to make sure they are deployed; tell me what happens if those 
eight deferred availabilities in 2013 and what happens with the 
30 that are on hold and potentially could be deferred in 2014, 
what does that mean for the number of ships that we have 
available and for readiness for our fleet?
    Admiral Rowden. Thank you for that question, sir.
    Obviously, if those eight availabilities are deferred or 
pushed into the next fiscal year, we start to then have a 
domino effect. There is industrial capacity to execute these 
availabilities as long as funding is available, but if the 
funding is not available, you start to pile them up. And 
eventually, you get to the point where you--if the money does 
become available--there is no way to get them pushed through, 
and so you start to ``bow-wave'' these into the future, and 
that then results in a delay in the execution of the 
maintenance. And what we have seen is as we delay that 
maintenance, there is a rise in the cost of that, and that 
cost, that rising cost is bow-waved as well into the future.
    So you end up ultimately with having a much tougher time 
putting together a ready force. We will always deploy ready 
forces, but you have a tougher time putting it together, and 
you have to put more money together in order to get those ready 
forces there. So I see a bow wave as we move into the future 
associated with that.
    Mr. Wittman. So those maintenance availabilities are 
deferred. Ultimately, you could end up with ships sitting in 
port because they are not able to go to sea because they don't 
have systems that may be up to speed or that are capable of 
doing the job that they are supposed to be doing?
    Admiral Rowden. That is correct, sir. That is how I would 
characterize it.
    Mr. Wittman. And that to me also then leads right into, you 
talked about the readiness of our forces and you talked about 
those different levels. You talked about deployed units, those 
that are currently at sea, the next to deploy, and the 
nondeployed units. Tell me, what effect does it have in also 
that rotation of what you have in ships and units and sailors? 
How do those deferred maintenance availabilities affect that 
readiness as you rotate sailors through their duties at sea?
    Admiral Matthews. Well, let me take that one on. As we 
experience delays in our shipyards and the ships get out late, 
that will typically mean that whoever is on deployment gets 
extended and depending on what class of ship it is. But if we 
were counting on that ship that is in the yard to get out and 
go on deployment, then that could actually mean a delay in the 
subsequent deployment of that ship.
    And if that occurs, then we will have sailors that are left 
out there on the pointy end, experiencing a longer deployment, 
and eventually, that could have an impact on retention, and 
that would be one fear. That is one impact.
    The reliability of these ships as they get their 
maintenance deferred is going to go down accordingly, and so we 
will have ships that may be out there on deployment that don't 
have all of the systems in operating condition. We would, of 
course, prioritize parts for those ships, but as you reduce the 
amount of maintenance, there is life-cycle maintenance, repair 
maintenance. We would be doing only the repair maintenance and 
not that life-cycle maintenance. And that life-cycle 
maintenance is what gets you to expected service life. So you 
would have decreased reliability and a decrease in the expected 
service life.
    Admiral Rowden. And I would say, just to piggyback onto 
that, sir, the other issue that if--with reduced maintenance 
dollars and reduced ability to keep our equipment operating, 
you can't train sailors on equipment that is not properly 
repaired and maintained, and so that reduces our ability to 
train at home and prepare ready forces to deploy, and so that, 
again, has an effect.
    Mr. Wittman. Let me close with one question. I just need a 
yes or no answer on this. In this scenario, with these deferred 
maintenance elements and with sailors being at sea longer and 
potentially on ships that don't have all of their systems 
operating the way they need to be, does that result in 
increased risk for our sailors? And if they are in a wartime 
situation, does that also mean that potentially in that 
situation, more sailors may die on the high seas?
    Admiral Rowden. Yes, sir. I would say that is a correct 
characterization.
    Mr. Wittman. Okay.
    Thank you, Mr. Chairman. I yield back.
    Mr. Forbes. Thank you, Chairman Wittman.
    The Chair now recognizes the distinguished gentleman from 
North Carolina for any questions he may have.
    Mr. McIntyre. Thank you.
    You have referred to going down to 257 ships by the year 
2030, and I would like you to explain to us other than that 
general statement, when we ask what is the impact of the 30-
year shipbuilding plan and the overarching force structure of 
the Navy if it doesn't receive the necessary funds to reset the 
force, can you tell us what you are looking at in terms of 
timetable about how this would affect the Navy's force 
structure?
    Admiral Rowden. Yes, sir. Again, it goes back to the 
deferral of maintenance and the bow-waving of maintenance into 
successive years. If we have to defer X number this year and 
that pushes into the following fiscal year and we have to defer 
Y, eventually, we get to the point where the cost to maintain 
those ships grows to the point where it is just not cost-
effective to maintain those ships, and therefore, you start to 
remove them out of service early.
    Based on what we have seen, there is a potential that we 
could go down to as many as 257. I haven't estimated it beyond 
that. I don't know whether Admiral Matthews has anything beyond 
the 2020 timeframe, but looking at where we think we may have 
to go in the next 7 years, we think we are looking at about 257 
ships by the time we get to 2020.
    Mr. McIntyre. When you talk about the cost of maintaining 
the Navy's force structure, can you explain to--what you are 
doing with that along with what the cost is in terms of what it 
takes to deploy the ships, because I know you are talking about 
maintenance costs versus if we have to do a deployment and how 
those costs are interacting in the decisions you are making?
    Admiral Matthews. Well, generally, we find that the costs 
to own, as we call it, which is to maintain the ships and get 
them trained to the point where they are proficient in basic 
mobility, is between 75 and 80 percent of the total cost of 
operating and maintaining and deploying a ship. So to deploy 
the ship is a lesser percentage of the overall costs to own 
that unit, but it has got to be in balance. So we can't simply 
elect not to do the maintenance, we can't simply elect not to 
do the training. So both the steaming days required to get 
trained and to get out on deployment and the maintenance 
required to make sure that it is going to meet its expected 
service life but also be a reliable asset once it gets on 
deployment are two critical things that we--if we were going to 
take down, we would have a difficult time balancing that.
    But under a constrained budget, what we are projecting to 
do in 2014, for example, is to bring down the nondeployed 
training to the minimum levels that we think is safe to get out 
there and do the mission. And they will deploy in a combat-
ready stature once they go on deployment, but while they are 
back here in CONUS [Continental United States] and in what we 
call the sustainment phase, they would--their readiness would 
decline accordingly, so we would take the training dollars down 
in that regard.
    On the maintenance side, which I said is the bulk of the 
operation and maintenance accounts related to surface ships, we 
have little flexibility, other than to defer the life-cycle-
type maintenance to a future time, future availability, but 
that puts the service life of the ships at risk, so we don't 
like to do that.
    Mr. McIntyre. Okay. Thank you. Thank you, Mr. Chairman.
    Mr. Forbes. The Chair recognizes the gentlelady from Guam 
for any questions she may have.
    Ms. Bordallo. Thank you very much, Mr. Chairman.
    As I have stated in the past, I am disappointed that we 
haven't had a more robust discussion on how we can solve 
sequestration. Sequestration, in my opinion, is extremely 
detrimental for a full economic recovery in our country. And 
the challenges are clear: It is the action by Congress that is 
necessary to restore readiness and end sequestration.
    And with that said, Admiral Rowden, I have a question for 
you. Given the DOD's [Department of Defense] strategic 
rebalance to the Pacific and increased need for naval forces in 
a maritime environment, what is your level of comfort with the 
number of battle force ships currently employed and available 
for use? How is the Navy balancing the need for modernizing our 
fleet with sustaining the current fleet?
    Admiral Rowden. Yes, ma'am. Thank you for the question. 
Currently the forces that we have forward-deployed in the 
Seventh Fleet are ready to accomplish a mission out there. And 
I am comfortable that Admiral Thomas, who just relieved Admiral 
Swift, has the forces that he needs to accomplish the mission 
today.
    I think the trick is understanding how to balance the 
modernization that we must execute with the fleet with the 
maintenance that we must execute with the fleet with the 
dollars that we have available. We obviously have to maintain a 
modernized fleet. We have to maintain a--or we have to put to 
sea on a ship that is--on a fleet that is properly maintained. 
And the trick that we have on the resources side and N96 in 
surface warfare, working with Admiral Matthews and working with 
the fleets, is to try to maintain that balance of modernized 
ships and maintained ships so that when we deliver those 
capabilities to the combatant commanders, we give them all the 
capacity that we have and we give them the maximum capability 
that they must have in order to accomplish the mission.
    Ms. Bordallo. I have a question for you, Admiral Matthews. 
Can you comment on how reductions in the operation and 
maintenance accounts will impact our rebalance of forces to the 
Pacific area? And what impact will these reductions have on our 
ability to have equipment that is available for training with 
our partners in the region?
    Admiral Matthews. Yes, ma'am. The Navy is still committed 
to the strategy of rebalancing the Pacific, and the things that 
we have in motion today will continue, even under 
sequestration. However, the pace of those developments I would 
expect to slow as a result of that.
    So, as you know, we are planning to forward-deploy more of 
our ships, and our rotational forces will be more frequently 
deployed to the Pacific theater under that strategy. And I 
don't see that changing, other than the pace of some of those 
developments.
    We are committed to participating in all the exercises, 
like RIMPAC [Rim of the Pacific Exercise] and other exercises 
that we engage in overseas, in particular in the Pacific 
theater. However, the number of units that are engaged in those 
exercises may have to be reduced somewhat under sequestration. 
But as these deferrals occur in our availabilities, that is 
going to have an impact Navy-wide on our ability to get ships 
to sea and the reliability of those forces.
    Ms. Bordallo. And a followup question, Admiral. What is the 
impact of the planned drawdown in military force levels on the 
required capability and capacity of the sustainment industrial 
base, and what is the general impact of these actions on the 
workforce?
    Admiral Matthews. Well, as I stated in my opening 
statement, we are very concerned about the impact on the 
industrial base. And there will be an impact on the industrial 
base. Both in the public yards and in the private shipyards, we 
will see an impact as we defer or cancel maintenance 
availabilities.
    We have had an impact with the furloughs, for example. Even 
though the shipyards were exempted from the furloughs, the 
supporting activities that order the parts and that do the 
engineering were not exempted from the furloughs, so we are 
having some delays in the public shipyards. And even on the 
private side, at our regional maintenance centers, they are not 
exempted from the furloughs, so there have been some delays in 
our private sector availabilities as a result of that as well. 
That sort of thing will continue.
    And it is difficult for a private contractor to maintain 
that workforce and meet payroll if they don't have a contract 
in hand. And so as we are cancelling and deferring some of 
these, I would expect some job losses in the areas of the 
country where we have our shipyards. And you heard the 
Secretary at least on one occasion mention RIFs [Reduction in 
Force]----
    Ms. Bordallo. Yes.
    Admiral Matthews [continuing]. Which could also be a 
possibility. So we are concerned about the health of our 
industrial base.
    Ms. Bordallo. Admiral, do you have any comments?
    Admiral Rowden. No, ma'am. Not at this time.
    Ms. Bordallo. All right. I thank you gentlemen very much 
for answering the questions.
    And, Mr. Chairman, I yield back.
    Mr. Forbes. Thank you.
    And the Chair now recognizes Mr. Courtney for 5 minutes.
    Mr. Courtney. Thank you, Mr. Chairman, and thank you for 
holding this hearing, which, again, is just another powerful 
argument for why we need to turn off sequester. What is amazing 
to me is that when we passed the fiscal cliff on New Year's 
Day, the projections that CBO [Congressional Budget Office] 
scored in terms of revenue have actually been surpassed by 
almost exactly the same amount as the Budget Control Act target 
for the sequester cuts to achieve.
    So, you know, aside from this being a self-inflicted wound 
to our military readiness, it is also completely unnecessary. 
And hopefully people are going to start focusing on what the 
actual intent of the Budget Control Act was in terms of deficit 
reduction and the fact that we actually are making great 
strides without having to have this chainsaw go through 
essential and important accounts.
    Admiral Rowden, you mentioned--but, I mean, we are still 
not there yet, so we still have to sort of ask a few other 
questions.
    Admiral Rowden, in your opening comments, again, you 
pleaded with us to make sure that we pass a full defense 
appropriations bill minus--without the sequester reduction, and 
also asked for reprogramming authority as well. And I was 
wondering if you could elaborate a little bit on the second 
part of that statement, I think I heard you right when you said 
that and in terms of whether or not that can provide you with 
some relief in terms of trying to meet, again, essential tasks 
that you are responsible for.
    Admiral Rowden. Yes, sir. That is exactly correct. The 
reprogramming authority gives us the flexibility in order to be 
able to move the money appropriately to address the issues as 
they occur. We like to think that we have a good understanding 
of exactly where we need to go with respect to the execution of 
the maintenance of our ships.
    Unfortunately, when we get ships into dock, when we get 
them in to start taking a look at them and there is growth work 
associated with them because we haven't had the opportunity to 
look at them in the past, we have the situation where we might 
have to put additional funds toward that, and those additional 
funds would be much--or the work that needed to be done would 
be much easier to fund with the reprogramming authority in 
order to be able to go address those.
    Mr. Courtney. So Secretary Hale was here last week, and 
this issue, you know, came up as well in terms of his 
challenges with furloughs and the fact that it appears that the 
Pentagon has sort of reached their maximum sort of allowable 
reprogramming discretion. And, I mean, is it--are--is your 
point the same, that if the Department was given a higher 
number to be able to reprogram, that, again, we might be able 
to manage these challenges better?
    Admiral Rowden. Yes, sir. I would say that is a correct 
characterization.
    Mr. Courtney. All right. Okay.
    And, again, in your testimony, I think one of you, I 
apologize, I read it pretty fast, there was, again, mention of 
the fact that you are still somewhat reliant on OCO accounts 
to, again, get the work done. Again, if you could sort of 
elaborate a little bit on that issue and just sort of where are 
we headed, because obviously, that is something that falls 
outside of sequestration in terms of the tapering down of OCO 
funding.
    Admiral Matthews. Yes, sir.
    In our operations and maintenance accounts, we are heavily 
reliant on OCO funding, as you point out, and that will 
continue into fiscal year 2014, but the area that we are the 
most leveraged is in our ships' maintenance accounts, and that 
is what gives me great concern. Twenty percent of the funding 
that we get for the ships' maintenance account is OCO funding. 
And the way that we fund the public and private shipyards, it 
means that the surface ship Navy takes the brunt of the effect 
of the OCO decreases. We fund almost all of the availabilities 
in our budget for the surface ship Navy with OCO funding, to 
the tune of about $1.3 billion in 2014, for example.
    So it is a big concern, particularly as we face 
sequestration. The demise of OCO is another area where we are 
very concerned. And the backlog of surface ship maintenance 
that we have been attacking lately through reset funds is also 
obviously OCO money, and our ability to catch up on all this 
backlog of surface ship maintenance would be negatively 
impacted if we lost the OCO money.
    Mr. Courtney. Well, thank you, Mr. Chairman.
    Yield back.
    Mr. Forbes. Mr. Runyan is recognized for 5 minutes.
    Mr. Runyan. Thank you, Mr. Chairman.
    And Admiral Matthews, you kind of answered my question a 
little bit earlier, but I just want to really talk about the 
defense industrial base. I think a lot of people miss what, 
say, workers in the private sector, to lay them off, to 
actually retrain them, what the long-term cost of that is. Do 
you have any guidance on that?
    Admiral Matthews. Well, it would be difficult to estimate 
the long-term costs, but these are skilled artisans that we are 
talking about here. These are pipefitters and welders and 
electricians that take years to develop those skills. If they 
are laid off, I would expect them to go find employment 
elsewhere. So if we are talking about reconstituting that 
capacity, we are talking about taking in apprentices, and years 
in the making for those kind of skill sets that are required to 
work independently in a shipyard. So while it would be 
difficult for me to project a cost, we can certainly project a 
reduction in capacity as a result of that.
    Mr. Runyan. And I raise that question, because I don't 
think anybody can put a cost estimate on it. I raise it to say 
that something has to be done, because once you lose that skill 
set, it is almost invaluable. You can't put a price tag on it. 
And I warn people of that all the time as we move through this 
process. And when that process starts, as you just said, your 
capacity to actually retool slows down, and that wave hits the 
next tier and the next tier and everybody's supplying 
everything down. I just wanted to make that point. I know many 
people make it, but I just wanted to reiterate it. And I thank 
you both to your service.
    And I will yield back, Chairman.
    Mr. Forbes. Thank the gentleman. Mr. Langevin is recognized 
for 5 minutes.
    Mr. Langevin. And thank you, Mr. Chairman.
    Gentlemen, I want to thank you for your service to our 
country and your testimony here today. I especially appreciate 
having your insight as we attempt to navigate these very, very 
obviously challenging fiscal times right now.
    Since the DOD has released the conclusions of the Strategic 
Choices and Management Review, I find it troubling that, as 
many of my colleagues do, the DOD is having to make, in my 
opinion, very unacceptable cuts in areas, such as modernization 
and force structure, that will no doubt affect this Nation's 
security for years to come. As you may be aware, I am 
particularly concerned about the impacts on our shipbuilding 
multiyear procurements that Congress has authorized. And as you 
alluded to, there is a complex interplay between maintenance, 
which ensures the long-term viability of our ships, and 30-year 
shipbuilding plan.
    A lot of the questions I had prepared have already been 
addressed, so let me get to a couple that we haven't touched on 
yet. Can we talk about the--what unfunded costs are we looking 
at for the total surface ship reset over--and over what 
timeframe, and how does shipyard capacity play into that 
calculus?
    Admiral Rowden. So I think I can address the costs, and I 
will turn it over to Tim for the shipyard piece. But by our 
estimations, the reset requested is a little over $346 million 
in the fiscal year 2014 timeframe, and we estimate that it is 
going to be about $2 billion into you the future in order to be 
able to complete the reset of our surface ships.
    Tim.
    Admiral Matthews. And that reset obviously requires 
industrial capacity. And the reset is really getting done in 
docking availabilities and drydock, because it is very heavy, 
labor-intensive maintenance that we do. So that requires us to 
have the drydocking capacity, so the facilities as well as the 
skilled labor in order to execute the maintenance.
    So our concern would be that as funding erodes and the OCO 
funding goes away, availabilities are cancelled, the industrial 
base capacity is reduced accordingly, and then it is more 
difficult to get that reset maintenance done in the future.
    Mr. Langevin. That--I would share your concern, and the 
point you raise, then, is well taken.
    To help improve the material condition of the fleet, the 
Navy has reorganized OPNAV [Office of the Chief of Naval 
Operations] offices, stood up new maintenance organizations, 
and partnered with the American Bureau of Shipping. What, if 
any, measurable results or cost savings has resulted from these 
efforts?
    Admiral Rowden. Sir, I have--I was on the CNO's transition 
team when this was initially discussed a little under 2 years 
ago. I then reported to the OPNAV staff and was there for the 
realignment of the staff and the standing-up of the maintenance 
organization without my organization, OPNAV N96, in order to be 
able to get at the maintenance piece. And so I had the ability 
to then build an organization within OPNAV and 96, drawing from 
various expertise from various areas in order to be able to 
pull that in. And I am happy to say that--and, again, working 
very closely with Naval Sea Systems Command and understanding 
what we have done really over the last 3 years to understand, I 
think, very, very well the material condition of the ships that 
we have and what we have left to do in order to be able to 
reset the force.
    We have--and in addition to my time on surface ships, I 
have also spent a significant amount of time in nuclear power, 
so what we did is we pulled the processes that the nuclear 
power portion of our Navy does in order to determine their real 
requirement, and we instituted that in the surface Navy. And 
when we instituted that in the surface Navy, that allowed us to 
very succinctly get at exactly what the costs were.
    And so I am confident, given the fact that we have now been 
executing this process for about 3 years, that we do know the 
condition of our ships and we have a good understanding of how 
to then go determine what funding must be applied, and that is 
wholly with OPNAV N96. And I am able to advise my boss as we 
build the budgets for the Navy in order to be able to 
understand and defend exactly what it is we need.
    Mr. Langevin. But in terms of any hard dollar savings, can 
you point to any numbers, or is that still a work in progress?
    Admiral Rowden. That is, I think, a work in progress. I do 
not have hard numbers for you, sir, but I can tell you that I 
think that the processes that we have will allow us to drive 
much more efficiency into the execution of the maintenance of 
our surface ships.
    Mr. Langevin. Thank you. I thank you both for your service.
    And I yield back the balance of my time.
    Mr. Forbes. The gentlelady from Missouri, Ms. Hartzler, is 
recognized for 5 minutes.
    Mrs. Hartzler. Thank you, Mr. Chairman.
    And thank you, gentlemen, for all that you do for our 
country.
    I was--I am very concerned, obviously, about all of this as 
well, and I was wondering with the decreasing fleet size and 
expanding requirements, particularly with a pivot to the 
Pacific, what share of COCOM requirements is the Navy unable to 
fulfill?
    Admiral Matthews. Well, ma'am, looking off into the future, 
it depends on the time horizon that we are looking at, but in 
the short term, we are going to prioritize all of the 
deployments in the Pacific area and in the central command 
area, and we will be able to meet all the high-priority 
deployments in fiscal year 2014. There will be a handful of 
deployments that we will probably have to cancel, but those are 
lower-priority deployments, and they would be most likely in 
the Southern Command, SOUTHCOM [U.S. Southern Command] area, as 
we did this year. We cancelled a number of deployments this 
year, as you may know, in the SOUTHCOM area.
    But looking forward, as the force structure comes down 
under sequestration, which has been proposed, and as the money 
for maintenance and operations declines, I would expect that we 
would be forced to decline more, a higher percentage of the 
COCOM
requests.
    Mrs. Hartzler. And I apologize for not being able to get--
be here earlier to hear your statements, you may have touched 
on this, but my husband and I sell farm equipment, and we know 
how service is very important to the life of a tractor and I 
know it is important to the life of all machines. And I was 
wondering, with the deferred maintenance that you are seeing 
among the ships, how does that correlate to the ship's ability 
to reach the expected service life? Are you expecting so--to 
shorten the amount of service life for the various fleet?
    Admiral Rowden. Yes, ma'am, I think that certainly the 
delayed maintenance or the deferred maintenance causes, when 
you eventually are able to get to that maintenance, a 
significant cost increase in the execution of that maintenance, 
and so then the decision has to be made, can we afford to keep 
that ship, or do we have to take it out of service as a result 
of that?
    Mrs. Hartzler. Uh-huh.
    Admiral Rowden. And so I think as we push--as we defer 
maintenance availabilities and we are looking at up to 30 
maintenance availabilities having to be either deferred, 
delayed or canceled next year, that will just continue to bow-
wave the readiness issues into the future. And as a consequence 
and as a result of the increasing costs of the execution of 
maintenance, we may have to look to remove those ships out of 
the inventory earlier just because they would become too 
expensive to maintain.
    Mrs. Hartzler. Yeah. That is very concerning. I was 
wondering overall, back to the Pacific, is demand increasing in 
that area and how are you being able to mitigate any shortfalls 
that you see? Like you say, in SOUTHCOM, you had to stop some 
deployments. So they have just done without, or do you try to 
change the
mission?
    Admiral Matthews. Well, to a large degree, they have been 
doing without, and we have been doing what we can to supplement 
with other forces as possible.
    A strategy that we have is to intentionally focus more on 
the Pacific theater, so we will be rotating more forces to the 
Pacific, and we will also be forward-stationing more forces in 
the Pacific, according to our strategy, to the point where we 
will have about 60 percent of our forces focused on the Pacific 
and the 40 percent on the Atlantic side. And that is going to 
proceed apace, even under sequestration, but at probably a 
reduced rate.
    Mrs. Hartzler. Could you expound just a little bit on the 
SOUTHCOM deployments that have been cancelled? Some of them 
have to do with drug interdiction. Is that right?
    Admiral Matthews. I need to be careful that I don't get 
into a classified area, but we did, for instance, cancel the 
Comfort, which was the hospital ship that was going down there, 
and we cancelled, I believe it is three frigate deployments 
that were going to occur, and they typically do that sort of 
work.
    Mrs. Hartzler. Okay.
    Admiral Matthews. Yes, ma'am.
    Mrs. Hartzler. Well, thank you for what you do.
    I yield back, Mr. Chairman.
    Mr. Forbes. Thank the gentlelady.
    Mr. Peters is recognized for 5 minutes.
    I ask unanimous consent that nonsubcommittee members, if 
any, be allowed to participate in today's hearing after all 
subcommittees 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, and this is 
the appropriate time to recognize Ms. Davis, and she is 
recognized for 5 minutes.
    Mrs. Davis. Thank you very much, Mr. Chairman.
    And thank you both for being here.
    I appreciate this opportunity both to be with you, Admiral 
Rowden and Admiral Matthews.
    I want to talk for a second about San Diego--I bet you were 
expecting that--and the concerns about the future of our naval 
surface fleet. And I hope you could explain to me, in April, it 
was announced a plan to increase end strength by about 4,000 
personnel by the end of this fiscal year, and yet today, the 
Navy--it was suggested in the paper that the Navy might have to 
sideline up to three carriers.
    And while I suspect you understand my desire to protect all 
of our Navy personnel, I want to ensure that we are spending 
our money wisely and wonder if we are not going to have a much 
harder time suspending these three carriers from service when 
we are ready to put them back into service.
    How much would it cost to bring them up to par when you 
decide to put them back into service? What maintenance will be 
needed to keep them in a condition that would not take away 
from their full service life? And how would these additional 
4,000 personnel be utilized when you are planning to eliminate 
the jobs of up to 18,000 other sailors? Are you familiar enough 
with this situation and can you--how do we deal with this?
    Admiral Matthews. Well, ma'am, the proposal to bring down 
the number of aircraft carriers is really still being 
evaluated. Obviously, one of the cost savings would be in 
personnel, because there are, you know, roughly 5,000 folks 
that are assigned to the air wing and the aircraft carrier, so 
that is a large cost that we would be looking to reduce. But 
you can't just park an aircraft carrier, because it has got a 
nuclear reactor on it, so you would have to maintain some sort 
of a minimum crew or decommission the ship entirely, but those 
things are being evaluated at this point. And if you are 
interested in more information, I would have to take it for the 
record.
    [The information referred to can be found in the Appendix 
on page 43.]
    Mrs. Davis. Do you want to--you don't want to weigh in on 
this, Admiral. I can tell. That is okay.
    When we face these kind of issues, though, and just the 
cost-benefit analysis of how we do this, what--are the savings 
that real? I mean, obviously, if you have 4-5,000 personnel, 
but don't you have to find a place for them anyway?
    Admiral Matthews. Well, I think the point would be that we 
would reduce the personnel commensurate with the force 
structure reductions. So we would reduce the number----
    Mrs. Davis. You would reduce----
    Admiral Matthews [continuing]. Of personnel assigned, along 
with the maintenance requirement would go away, and all the 
things that support the aircraft carrier would be reduced as 
well.
    Mrs. Davis. But the costs of bringing it back obviously is 
an issue as well.
    So right now we have only two carriers, we have the Ronald 
Reagan and we have the U.S.S. Carl Vincent. With the 
understanding that a third, and I think most likely people 
talked about it being the Gerald Ford, would come to San Diego 
after its completion. And I certainly had hoped that we would 
see those three carriers call San Diego home in 2016, but the 
delay of the Ford in recent news articles on the results of the 
SCMR [Strategic Choices and Management Review] calling for the 
possible sidelining of these three carriers have brought some 
uncertainty, as you can imagine.
    So how will these proposed drawdowns to the surface fleet 
affect the home port and our carriers in the future? How does 
that really change the whole configuration of the expectation 
that we have in San Diego? And I understand this is still under 
discussion, but even so, what should we know?
    Admiral Rowden. Yes, ma'am. I believe I am going to have to 
take that question for the record, because I think that as Tim 
pointed out, I think we are still--this was talked about 
yesterday, and I think that the movement associated with--or 
how we would deal with that, there is a lot of work that still 
is required on that.
    [The information referred to can be found in the Appendix 
on page 43.]
    Mrs. Davis. Okay. All right.
    Thank you, Mr. Chairman.
    Mr. Forbes. I thank the gentlelady for her service and for 
her questions.
    And I would like to ask unanimous consent for all of the 
chairmen and ranking member statements to be submitted for the 
record.
    [The prepared statements of Mr. Wittman, Ms. Bordallo, Mr. 
Forbes, and Mr. McIntyre can be found in the Appendix on pages 
25, 27, 28, and 29, respectively.]
    Mr. Forbes. Without objection, it is so ordered.
    And I want to also thank Admiral Rowden for--I know he is 
on leave today. Thank you for suiting up and coming in here and 
helping us. That is truly service beyond the call of duty, but 
we thank you both.
    And we just have a couple more questions, but earlier, you 
described that your current surge capacity consists of only one 
carrier strike group and one amphibious ready group. We know 
from Admiral Greenert's recent press conference, that last year 
your surge capacity was three strike--carrier strike groups and 
three amphibious groups.
    The fleet response plan provides the Nation the ability to 
surge assets in time of pending conflict, and we don't always 
know when that conflict is going to come. Kind of tough to get 
carriers out of mothballs, rehire 5-6,000 sailors and train 
them. Can you provide us some examples for the subcommittees on 
how the Navy has leveraged that surge capacity in recent years? 
And what is the impact and risk associated with fewer surge 
assets? It is kind of a follow up on Ms. Davis' question.
    Admiral Rowden. Certainly, without straying too far into 
classified----
    Mr. Forbes. I understand.
    Admiral Rowden [continuing]. Conversation, we have been 
able to meet requests for forces from the COCOMs for specific 
items. I can tell you, sir, that, for example, when I was the 
commander of DESRON 60 [Destroyer Squadron Sixty], in the 2006 
timeframe, I was in Gaeta, Italy, and it was the July 
timeframe, and that is when there was a significant action 
between Hezbollah and Israelis. And the decision was made to 
conduct a noncombatant evacuation of Beirut, about 15,000 
folks.
    And I essentially went at a moment's notice from working in 
Gaeta, turning the ship around that was headed to Augusta Bay 
to get gas, gassed them up in Souda Bay, pulled another ship 
out of the Black Sea. We turned around an amphibious readiness 
group that was in Aqaba, brought them through the Suez Canal, 
and we were able to execute that noncombatant evacuation 
because we had ready forces and we had ready forces there. 
Pulled those 15,000 folks out, and I remember General Jensen 
saying to me, the sum total of my assignment was to evacuate 
Beirut--evacuate the Americans from Beirut and don't get 
anybody killed. And I had the ready forces available to go do 
that.
    Likewise, when Reagan Strike Group was on deployment in the 
2011 timeframe and she was steaming over to execute an exercise 
in the Western Pacific and the disaster in Japan occurred, we 
had ready forces there both in the form of Essex and in the 
form of the Reagan Strike Group to go up there and lend a hand 
for that significant disaster that occurred.
    Those weren't necessarily times when we surged forces. 
However, if they had become protracted, we may have had to move 
forces out in order to backfill them. But those forces were 
there. They were ready. And they were on station. And I think 
that those types of responses could possibly be in jeopardy. 
And those are just two examples, but I think that they 
certainly are examples of where we were able to roll in and do 
what needed to done and do it in a very effective and efficient 
manner because we had ready forces available to execute.
    Mr. Forbes. So, just for clarification, surge really 
doesn't mean extra. It means needed forces as well. It is just 
our ability to put them where we need them when we need them. 
Is that a fair
statement?
    Admiral Rowden. Yes, sir. But I would say that certainly in 
any larger conflict that were executed, certainly we start to 
look to the forces that are stateside, and I mean, clearly, a 
transit across the Pacific Ocean is not something that occurs 
in days. It is really weeks.
    Mr. Forbes. And as a follow up to Ms. Davis' question about 
cost-benefit analysis, it may be useful for both our committees 
to have a classified briefing on some of that, too, because 
that is kind of a cost we have to weigh in, too, when we are 
doing that.
    The Chair recognizes Mr. Wittman for a followup question.
    Mr. Wittman. Thank you, Mr. Chairman.
    I would like to follow up from Chairman Forbes' question. 
When he talked about surge capacity, let me ask it in a little 
bit different way. As we talked about, you have deployed units, 
the next to deployed units, and nondeployed units, so you have 
different levels of readiness there. If readiness decays, the 
question is, is how are you able to reconstitute it? Do you 
have a capability to reconstitute it? And that is both on the 
sailor side with training but also on the maintenance of those 
ships to make sure that they are operationally available. If 
so, if you can reconstitute that, is there a time element in 
reconstituting it? Is that time element important in being able 
to reconstitute it? And then what is the cost of being able to 
reconstitute?
    Admiral Rowden. Sir, I think you hit the nail on the head. 
As we bring forces back from deployment, when I brought Milius 
back in the 2001 timeframe, my feeling was we were never more 
ready than the day we got back because we had just executed a 
6-month deployment, and we had done everything. We had steamed 
the Arabian Gulf and North Arabian Sea, and I had a great crew, 
and we were ready to go. Shortly thereafter, end of the 
availability, people transfer. New people come in, training has 
to occur. You dip down in your readiness, and you start to 
bring that up. If that maintenance availability--if we hadn't 
been able to execute that maintenance availability or, for 
whatever reason, we hadn't been able to execute the training, 
struggling to get that ship back up, it takes time and it takes 
money, and if people transfer without relief, you have got to 
get the proper people in there. You have got to form your team 
well enough ahead of time to get them trained up and ready to 
go. You can't bring the team together at the 11th hour and say, 
Go. You have got to bring them together. You have got to 
understand the issues associated with where they are, and that 
lies on the commanding officer. It lies on the training 
commands. It lies on all that.
    And so when we reduce the readiness of our forces, for 
whatever reason, because the maintenance dollars aren't 
available, because the training dollars aren't available, or 
because the people aren't available, it takes time, it takes 
money, it takes energy, and it takes a concerted effort on the 
part of all the leadership from the type commander on down in 
order to get those forces where they need to be in order to 
deploy those ready forces, and that is really what we owe to 
our sailors. We want in their hearts to know that as they 
deploy, they are confident for whatever mission gets tossed at 
them.
    Mr. Wittman. Admiral, just one closing question. And if we 
can't do that, does that result in increased risk for our 
sailors?
    Admiral Rowden. Yes, sir, it think it does.
    Mr. Wittman. Thank you.
    Thank you, Mr. Chairman. I yield back.
    Mr. Forbes. With that, gentlemen, we want to thank you so 
much again.
    As you heard, both ranking members and the chairmen stated, 
we appreciate your service to our country. Thank you so much 
for all you do, the men and women under you, and thanks for 
taking time to be here with us.
    And with that, we should hear bells any time for a vote, 
and we have two admirals departing, so thank you all for being 
here with us.
    Adjourned.
    [Whereupon, at 5:25 p.m., the subcommittees were 
adjourned.]
=======================================================================

                            A P P E N D I X

                             August 1, 2013

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

              PREPARED STATEMENTS SUBMITTED FOR THE RECORD

                             August 1, 2013

=======================================================================
      
                  Statement of Hon. Robert J. Wittman

               Chairman, House Subcommittee on Readiness

                               Hearing on

  Ensuring Navy Surface Force Effectiveness with Limited Maintenance 
                               Resources

                             August 1, 2013

    I would like to extend a warm welcome to our witnesses this morning 
and look forward to a robust conversation regarding the reality in the 
surface fleet today, and the forecast for the future. Rear Admiral 
Rowden, Rear Admiral Matthews, thank you both for being here today; 
this is an important conversation not only for us, but also for the 
Nation to clearly understand the depth of the crisis that is on the
horizon.

    Earlier this year, we reviewed the Navy's O&M base budget request, 
but, since that time, we received the OCO request in addition to the 
reality and impacts of sequestration. I fear this will put you 
gentlemen in a damage control situation to maintain the fleet, leading 
to grave concerns for the readiness of the surface force.

    The existing force structure took years of investments and 
maintenance in order to sustain the level of readiness we have today. 
To achieve that, the Navy has refined its processes, to include more 
robust maintenance plans providing greater insights into the 
requirements, fine-tuning the timing of maintenance availabilities, and 
optimizing force generation requirements through the Fleet Response 
Plan.

    This delicate balance is fragile, and without the needed 
maintenance and reset of the force, the Navy will be severely 
challenged to meet its training and operational commitments, let alone 
retain the ships for their expected service life, which undermines the 
ability to achieve the 30-year shipbuilding plan.

    In testimony before the Readiness Subcommittee in 2011, Navy 
officials indicated that approximately 70% of the existing fleet will 
be in service in 2020. Reaching expected service life requires an 
integrated engineering approach to plan, fund, and execute the right 
maintenance. During that same hearing, the Navy also articulated, and I 
quote: ``the cheapest way to afford our Navy with the force structure 
that we need is to maintain the ships that we already have.''

    The Navy has continually affirmed that it has worn out its ships 
over the past decade, both through lack of visibility into the true 
requirements, and as a result of the sustained surge. These two factors 
result in increased maintenance and unanticipated requirements. That 
trend is most apparent in the results from the Board of Inspection and 
Survey which have since 2009 consistently documented that only about 
80% of those assets inspected have been deemed ``satisfactory.'' These 
scores reflect the broader reality of trends associated with increased 
casualty reports and cannibalization of parts required just to get the 
fleet ``ready.''

    These maintenance requirements are not inconsequential. In FY14, 
routine Navy maintenance is a $6.9 billion bill, coupled with an 
additional ``reset'' cost of $1.9 billion through FY18.

    In previous testimony, the Navy highlighted that it needed both 
time and money to accomplish the necessary maintenance. Due to current 
budget circumstances, we understand the Navy has currently deferred 
eight maintenance availabilities in FY13, and hopes to buy them back 
with a reprogramming request.

    The projection for FY14 is equally as bleak. During Admiral 
Greenert's recent press conference on July 19th, he highlighted that 
due to sequestration, in FY14 approximately half of the 60 
availabilities are expected to be deferred.

    We are not strictly talking about maintenance . . . it is much 
bigger than that. It is the compounding effect of missed maintenance, 
less-than-capable assets for training, continued surge, and operation 
of ships, all of which results in abbreviated service life of the 
surface fleet. Add to this mix the tenuous progress the Navy has made 
to reverse degraded surface fleet readiness trends, and I'm deeply 
concerned about losing the momentum we have achieved to preserve the 
readiness of the naval force.

    I strongly believe that our long-term Naval strategies cannot be 
fully articulated until the budgetary pressures get resolved. I am 
deeply concerned that decisions are being made today that are 
mortgaging future force readiness, and it is imperative for us to work 
together to avert that outcome. Our sailors deserve nothing less than 
the best, most capable equipment with which to train and deploy with, 
and I am committed to making every effort to ensure that happens.

    To conclude, I want to make very clear to this committee and to 
Congress why we have to get this right and why there is no room for 
error. There are members of Congress who believe that when we come home 
from Afghanistan our ships in CENTCOM will return to the United States, 
moor at their homeport, and wait to be called on again. This is not 
true and it is simply not how our Navy operates. The Navy does not have 
the luxury and flexibility to ``reset'' in the same manner that the 
Army, Marine Corps, and Air Force have. The Navy is always on watch, 
always deployed, regardless of whether we are at war or not. 
Maintaining and ``resetting'' a ship takes time and money. There is no 
other piece of gear like it in our inventory.

    On September 10, 2001, our Navy and Marine Corps team was forward-
deployed around the world, operating in every major combatant command 
AOR. They have been forward-deployed since the late 1790s after 
Congress passed the Naval Act of 1794, authorizing and building our 
first six frigates so they could deploy to places like the 
Mediterranean Sea to protect American shipping and combat piracy.

    Since then Congress has carried out its duty under Article 1 
Section 8 of the Constitution ``to provide and maintain a Navy,'' and 
our Navy has remained forward-deployed and at sea around the globe 
watching over our sea lines of communication, protecting commerce and 
our economy, and ensuring maritime security. We have to get this 
maintenance and readiness right, it is our constitutional duty.

                Statement of Hon. Madeleine Z. Bordallo

            Ranking Member, House Subcommittee on Readiness

                               Hearing on

  Ensuring Navy Surface Force Effectiveness with Limited Maintenance 
                               Resources

                             August 1, 2013

    I want to welcome our witnesses to the hearing today. We are 
discussing critical topics that will have lasting effects on our Navy 
and the ability of our military to support and defend U.S. interests. I 
find this a helpful discussion and greatly appreciate your time.

    I will state again as I have in the past, that I am disappointed we 
are not having a more robust discussion in Congress about how to solve 
sequestration. We all agree and understand that sequestration is 
extremely detrimental for the prospects of a full economic recovery in 
the United States. Cuts to defense and other discretionary programs 
will have significant negative impacts on the long-term economic growth 
of the country.

    I again want to call upon the leadership of both parties to place 
everything on the table to find ways to avoid sequestration. I hope 
that our discussion today about Limited Maintenance Resources in the 
Navy's nonnuclear Surface Force will encourage members of both parties 
to get leadership back to the table in a meaningful way and put an end 
to this punitive approach to governing.

    Our Navy faces significant challenges over the coming years which 
the Navy has testified to in previous hearings. Clearly, if we do not 
align strategy with the need for sustainment we create a situation 
where we are negatively affecting the readiness of our military forces. 
I hope that our witnesses can highlight the increase in cost that will 
occur when strategy and sustainment are not coordinated. What is the 
additional cost that is borne by the Government in the long term with 
such a significant cut in the short term? Furthermore, I hope our 
witnesses will comment on how the Navy will continue to resource toward 
the strategic goal of rebalancing our focus on the Asia-Pacific region. 
What challenges will we encounter with sequestration?

    I believe much of what is discussed here today is already known by 
both DOD and Congress. We are well aware of the maintenance challenges 
for the DOD in the near term and that the situation will only get worse 
in the outyears. We know that years of war have taken a toll on the 
equipment in use today and that these assets are needed in our 
inventory for longer than they were ever designed to be used. I hope 
our witnesses can comment on the balance between maintaining our 
current fleet with the need to modernize our fleet.

    I will tell you that the challenges are clear; it's the action 
needed by Congress that is necessary to restore operational readiness 
and end sequestration. I fully support having a robust military to 
defend our Nation and our interests but we must do our part to ensure 
they have the resources to meet current and emerging
challenges.

    I will just close by encouraging open dialogue today . . . by 
recognizing these challenges have solutions . . . and I am committed to 
helping resolve this. I am thankful to each of you testifying before us 
today, and I know your leadership will help see us through the 
challenges on the horizon.

                   Statement of Hon. J. Randy Forbes

     Chairman, House Subcommittee on Seapower and Projection Forces

                               Hearing on

  Ensuring Navy Surface Force Effectiveness with Limited Maintenance 
                               Resources

                             August 1, 2013

    I want to welcome all of our members and distinguished witnesses to 
today's joint Seapower and Projection Forces and Readiness hearing that 
will focus on ``Ensuring Navy Surface Force Effectiveness with Limited 
Maintenance Resources.'' Earlier today, we had the opportunity to 
discuss our military's future with Secretary Carter and Admiral 
Winnefeld. Our conversation was quite startling. Frankly, I am shocked 
at the dismantling and devastation that is being proposed by this 
Administration and the negative consequences associated with 
sequestration. For instance, a fleet of only eight aircraft carriers 
will significantly and irreparably harm our global strategic posture.
    As this hearing will likely reveal, our existing fleet is being 
worn out by this period of sustained surge. Unfortunately, there is no 
indication that demand for our naval forces will abate anytime in the 
near future. In fact, quite the opposite. In the decade ahead I believe 
we will increasingly lean on these forces to underpin our national 
security strategy, protect the world's sea lanes, and operate forward 
to deter conflict.
    While we are currently meeting the minimum requirements of our 
ever-retreating national strategy, it is painfully obvious that our 
future readiness is being leveraged to pay for our current requirements 
and operational commitments. According to Admiral Greenert a couple of 
weeks ago, ``We have today one carrier strike group and one amphibious 
ready group ready to deploy with all the capabilities. [but] the rest 
of the fleet is not ready to deploy with all the capabilities that are 
needed that we would normally have in our fleet response plan.'' So, 
when you compare where we are today against a year ago, or even just a 
few months ago, the changes become obvious. Since the beginning of the 
fiscal year, the Navy cancelled six deployments, and deferred two more. 
There is minimal surge capacity, so, while hope is not a strategy, hope 
will serve as the limit of our expectations should any additional 
contingencies emerge.
    I refuse to accept this. Simply stated, the requirements well 
exceed the Navy's current capacity to support--due to lack of funds and 
sufficiently ``ready'' assets and there is no expectation that demand 
will decrease. Therefore, we need to ensure we understand what the Navy 
has, what it can afford, and how it can be effective with limited 
resources, let alone afford to meet the objective force of the 30-year 
shipbuilding plan.
    Next, let's take a moment to review the 30-year shipbuilding plan 
that was submitted earlier this year. The Administration once again 
proposed the early retirement of seven cruisers and two amphibious 
ships in fiscal year 2015, well before the end of their service lives. 
With 31 ships being retired over just the next 2 years, we are headed 
toward a fleet size of 270 battle force ships by FY15. Decline is a 
choice, and I believe this new plan willingly chooses to continue the 
slow, painful decline of robust American Seapower. Couple the 
projection of the shrinking size of our fleet with the reality of the 
state of our existing inventory and the picture is quite problematic. 
The consequences of such a long-term deferral of ship maintenance will 
have a detrimental and long-term impact on the fleet. I intend to 
review in greater detail today the potential impact of sequestration on 
the fleet, how that affects the expected service life of the assets, 
and thereby the ability to meet the Navy's 30-year shipbuilding plan.
    Let me be very clear, we cannot and will not stand idly by while 
the greatest, most powerful Navy in the world erodes for lack of 
funding. We must recognize the consequences, not only now--cancelling 
operations and worldwide commitments--but next year, and across the 
next decade. Before we realize it--the damage will be irreversible, and 
our inability to be able to operate forward and project power will 
embolden regional instability. In the end, further defense reductions 
will be paid for in the lives of our service members. I refuse to 
accept this premise and will work to provide a fleet that has 
sufficient funds for maintenance and modernization and is sized to 
support our national commitments and ideals.
    Joining us today to discuss the Navy's surface force effectiveness 
are two distinguished gentlemen: Rear Admiral Thomas S. Rowden, 
Director, Surface Warfare, OPNAV N96; and Rear Admiral Timothy S. 
Matthews, Director, Fleet Readiness, OPNAV N43. Gentlemen, thank you 
for being here.

                    Statement of Hon. Mike McIntyre

  Ranking Member, House Subcommittee on Seapower and Projection Forces

                               Hearing on

  Ensuring Navy Surface Force Effectiveness with Limited Maintenance 
                               Resources

                             August 1, 2013

    Today's joint hearing will focus on the Navy's current and planned 
surface vessel maintenance operations. I want to thank Readiness 
Subcommittee Chairman Wittman and Ranking Member Bordallo for 
cooperating with myself and Chairman Forbes to make this a joint 
hearing.

    Today's hearing is prompted by some issues that should concern all 
Americans. First, after 12 years of war, the Navy's ships have been 
``ridden hard'' and in many cases face substantial maintenance work 
backlogs. Proper maintenance takes time, so digging out of a backlog 
can be a very long and expensive process.

    Second, the Department of Defense faces severe funding shortfalls 
due to budget reductions and sequestration. Ship maintenance is a very 
large, multibillion-dollar industrial enterprise. Over time, cutting 
funding for maintenance year after year will clearly damage the fleet.

    Taken together, these two factors--high operational demand and 
reduced maintenance funding--pose a significant danger to the future of 
America's Navy. While maintenance may seem like the ``routine 
business'' of the Navy, it is in fact a very large, complex, and 
challenging industrial enterprise that requires years of advanced 
planning and management--as well as billions of taxpayer dollars.

    To be successful, the Navy must constantly adjust its plans to meet 
the dual demands of forward presence on the seas and keeping ships in 
fighting condition. Leaning too far in either direction can be costly. 
If we don't do proper maintenance on our ships, we will wear them out 
and impose huge costs on the Nation in the future when ships face very 
expensive repairs or have to be retired and replaced earlier than 
planned. On the other hand, we maintain a Navy in order to protect sea 
lanes, defend American interests abroad, and project power. If we don't 
have enough ships at sea due to maintenance backlogs, we can't achieve 
those goals.

    Also, how we use the fleet has a direct connection to the 
shipbuilding budget and the future size of the fleet. If ships must be 
retired early, we face an even greater challenge in the future when we 
must try to replace them earlier than planned. If ships are not 
properly maintained today, we could face a future with a much smaller 
fleet that may not meet our national security needs.

    Today's hearing seeks to better understand the risks we face and 
how to deal with them.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
      
=======================================================================

              WITNESS RESPONSES TO QUESTIONS ASKED DURING

                              THE HEARING

                             August 1, 2013

=======================================================================
      
             RESPONSES TO QUESTIONS SUBMITTED BY MRS. DAVIS

    Admiral Rowden and Admiral Matthews. The Navy homeporting plan as 
briefed to Congressional staffs in May 2013 depicts San Diego as the 
homeport for two CVNs through 2016. A third homeported CVN is planned 
for San Diego in 2017. A return to six CVNs homeported in the Pacific 
is planned prior to 2020, with an ultimate laydown of three CVNs in San 
Diego. The full impact of DOD budgetary restrictions on the aircraft 
carrier force structure and homeporting plan is currently being 
evaluated. [See page 17.]

    Admiral Matthews. The plan referenced by Representative Davis was 
the Strategic Choices Management Review (SCMR). The SCMR examined 
potential force structure reduction options but it did not explicitly 
consider reversibility. The SCMR carrier-related efficiencies assumed 
carriers and carrier air wings would be decommissioned (i.e., reactors 
would be defueled and ships could not be returned to active service), 
not placed in a temporary inactive status. From a public and regulatory 
policy standpoint, the Navy does not place fueled nuclear-powered 
warships in lay-up. While the SCMR did not examine the feasibility of 
re-activating nuclear-powered aircraft carriers, the cost to re-
activate a nuclear-powered aircraft carrier would be substantial.
    SCMR options assumed Navy end-strength would be reduced based on 
the number of carriers and carrier air wings cut. A significant part of 
the savings from carrier and air wing reductions is associated with 
reducing the number of assigned sailors. Overall Navy end-strength is a 
decision based on balancing strategic objectives and financial 
constraints. The Navy has processes to carry out such reductions, if 
the decision is made to do so. The Navy does not plan to reduce 
manpower unless force structure (ships and aircraft) is reduced. [See 
page 17.]
?

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


              QUESTIONS SUBMITTED BY MEMBERS POST HEARING

                             August 1, 2013

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

      
                   QUESTIONS SUBMITTED BY MR. FORBES

    Mr. Forbes. The committee would like to congratulate the Navy for 
creating the policy in May of this year that directs the integration of 
condition based maintenance, a proven technology that will generate 
cost savings while simultaneously increasing readiness, on ships, ship 
systems, and equipment. Condition based maintenance has been 
successfully implemented on aircraft, helicopters, military and 
commercial vehicles, and trains, all of which have demonstrated cost 
savings and increased readiness. The committee is encouraged that the 
Navy has included condition based maintenance on the new Littoral 
Combat Ship and is planning to rapidly implement condition based 
maintenance on main propulsion diesel engines onboard amphibious ships. 
This is important as it will help address a longstanding diesel 
readiness problem that has resulted in increased maintenance and repair 
costs. Please advise the committee about the actions the Navy is taking 
to capture the benefits offered by condition based maintenance and what 
the plan is to implement this proven technology on all classes of 
ships? Can you please tell me more about the plan to integrate 
condition based maintenance on diesel engines and the timeframe for 
doing so?
    Admiral Rowden and Admiral Matthews. Condition Based Maintenance 
(CBM) has been successfully implemented on aircraft, military and 
commercial vehicles, and trains resulting in a positive cost savings 
and increased readiness. Regarding the Navy's In-Service Fleet, CBM 
includes the Integrated Condition Assessment System (ICAS) and the 
Diesel Readiness System (DRS). Currently, ICAS is the CBM Program of 
Record used to monitor Hull, Mechanical and Electrical systems and is 
installed on 65% of the in-service surface fleet. DRS is a diesel 
engine specific program installed onboard 100% of in-service Amphibious 
platforms. Periodic studies of ICAS and DRS continue to prove that CBM 
is a good investment, improving Mean Time to Repair and operational 
availability.
    The Navy's plan to fully implement CBM is a multipronged approach. 
The Navy is continuing to install ICAS on new construction ships and 
ICAS and DRS on all new construction amphibious platforms (i.e. LPD 17 
Class). Recently, the Navy started a review to determine how best to 
combine all collected diesel engine data in an effort to improve and 
simplify remote monitoring. This review and implementation is estimated 
to take approximately 5 years. The goal is to provide improved diesel 
engine health assessment by facilitating near real-time analysis for 
shipboard engineering personnel and the shore-based Navy technical 
community. Sequestration and budget reductions have impeded the full 
surface fleet implementation plan and resulted in less frequent review 
of CBM data by shore-based technicians for both ICAS and DRS.
    Mr. Forbes. With the decreasing fleet size and expanding 
requirements, particularly with the pivot to the Pacific, what share of 
COCOM requirements is the Navy unable to fulfill? Is demand increasing? 
What is the risk of not meeting these requirements? How is the risk of 
these shortfalls being mitigated? How does the Fleet Response Plan 
enable the Navy to plan and prioritize to meet these requirements? What 
risks is the Navy taking in core requirements in order to fulfill COCOM
requirements?
    Admiral Rowden and Admiral Matthews. A fleet of more than 500 ships 
would be required to fully meet the demands of the Combatant Commanders 
(CCDR), but current and projected fiscal constraints preclude a Navy of 
that size. Navy provides the maximum presence and surge capacity 
possible, in support of CCDR requirements and within the constraints of 
force structure and the budget, through the use of a Fleet Response 
Plan (FRP) that provisions appropriately trained and ready forces to 
the CCDR in accordance with the Joint Staff-led Global Force Management 
Allocation Plan (GFMAP) adjudication process. Navy is simply a force 
provider and is not positioned to determine the risk a CCDR assumes if 
a unit is not sourced.
    In FY13, under sequestration, Navy is taking increased risk in our 
core surge capacity by curtailing training for units not scheduled to 
deploy and delaying pre-deployment training until ``just-in-time'' to 
meet scheduled deployment dates. This approach increases the pressure 
on the Fleet Response Plan sustainment phase and creates challenges in 
our ability to provide surge ready forces. However, it does permit us 
to make funding available to ensure our deployed forces are fully ready 
at all times.
    As fiscal pressure forces the Navy to get smaller, the need to move 
forces forward becomes all the more critical. Forward deploying the 
forces we do have permits us to maintain forward presence with a 
smaller rotation base--effectively mitigating the impact of the force 
reduction. While we try to maximize the utilization of the force, we 
must also balance that impact against the personnel and service life 
impacts to the ship and crew. However, DoD and CCDRs may need to revise 
operational plans to accommodate a significantly reduced force 
structure.
    Mr. Forbes. In recent weeks, the Navy has expressed a concern 
regarding lack of surge capacity as a result of sequestration and 
fiscal constraints. Can you please describe exactly what that means, 
and how that will impact the Navy's ability to meet the Combatant 
Commanders' requirements?
    Admiral Rowden and Admiral Matthews. Surge capacity is the number 
of operationally ready units Navy is able to provide above and beyond 
the baseline forces provided in accordance with the Global Force 
Management Allocation Plan (GFMAP). The Navy force generation process 
is designed to optimize surge capacity to support contingency 
operations, both for national security requirements or humanitarian 
assistance, and to support the Combatant Commanders' operational plans.
    In today's fiscal environment, Navy is forced to schedule surge 
capacity just to meet baseline Combatant Commander demand, therefore 
decreasing the ability to surge forces for contingent operations and 
emergent requirements. Loss of this surge capacity would be driven by 
reductions in the battle force, as there would be fewer units available 
and a higher proportion of those remaining units would be forward-
deployed to support GFMAP requirements for naval presence. Surge 
capacity would also be affected by reductions in training and 
maintenance funding, which would reduce the materiel condition and 
operational readiness of nondeployed
vessels.
    Ultimately, Navy sources all SecDef adjudicated requirements but at 
long-term risk to maintenance, training, and ship service life. 
Sequestration and fiscal constraints may require DOD and Combatant 
Commander to revise operational requirements and plans to accommodate a 
decrease in Navy's surge capacity.
    Mr. Forbes. In Chief of Naval Operations' testimony earlier this 
year before the full committee, he noted changes to the FY13 GFMAP 
based on constrained resources. To date, the Navy has cancelled five 
ships due to deploy to SOUTHCOM, one ship to EUCOM, and deferred the 
deployment of two additional ships. According to CNO's recent press 
briefing, July 19th, all told, the Navy is down about 10 forward-
deployed ships from several months ago. What risk are the COCOMs 
assuming as a result of this? What will be the impact on the Navy's 
ability to support the full range of GFMAP requirements in FY14?
    Admiral Rowden and Admiral Matthews. Combatant Commanders (CCDRs) 
are encouraged to ask for any forces they feel would be beneficial to 
achieve their theater objectives. This demand signal is not constrained 
by force provider inventory, National Defense Strategy, or other CCDR 
demands. Navy is simply a force provider and is not positioned to 
determine the risk a CCDR assumes if a unit is not sourced.
    The ability to support the full range of baseline GFMAP 
requirements in FY14 will be affected by lack of capacity and funding. 
Navy is deferring and curtailing deployments, maintenance, and training 
to meet SecDef adjudicated demands under the current budgetary 
shortfalls. Continuing these actions will ultimately affect Navy's 
ability to: (1) source future deployers; (2) meet assigned operational 
commitments; (3) maintain a contingency surge capacity; and, (4) 
control long-term maintenance costs and achieve ship/aircraft expected 
service lives.
    Mr. Forbes. As the Navy is working toward achieving or exceeding 
planned service life of the current fleet, we would expect that you are 
looking at ways to maximize efficiency and leverage your private-public 
partnerships to help save valuable resources. One of these partnerships 
is with the American Bureau of Shipping (ABS), the U.S.-based not-for-
profit marine classification society, who has developed a risk-based 
approach to assist the Navy in identifying crucial maintenance needs 
through their Achieving Service Life Program (ASLP). In fact, in a 
recent interview in the U.S. Naval Institute magazine VADM McCoy 
highlighted the success that the Achieving Service Life Program has 
achieved through identifying the highest risk areas and allowing NAVSEA 
to refocus its maintenance efforts on those areas. Partnerships like 
this can help direct the Navy in its maintenance prioritization process 
and help vessels achieve and in some cases even extend their intended 
service life at a cost-savings to the U.S. taxpayer.
    Looking ahead, how will the Navy continue to work with 
organizations like ABS to maximize the efficiency of the maintenance 
process? Is it true that the USS Port Royal was scheduled to have a 
survey and engineering assessment completed within the ASLP program in 
2010? We know that GAO has been directed to look into the 
decommissioning of the USS Port Royal, Is it possible that GAO could 
conclude after their assessment that the USS Port Royal would have 
benefited from participating in the Achieving Service Life Program and 
extended its service life beyond 21 years?
    Admiral Rowden and Admiral Matthews. The partnership with ABS has 
been beneficial to the Navy and has resulted in several improvements to 
Navy onboard assessment requirements and the manner in which we 
develop, track, and prioritize maintenance actions resulting from 
onboard corrosion assessments performed to Navy standards. Such 
improvements include revised Navy assessment standards for tanks, 
voids, and critical spaces; enhanced branding of corrosion-related 
corrective maintenance actions; and consolidation of Navy assessment 
findings and corrective action status into Navy databases such as 
Corrosion Control Information Management System (CCIMS).
    ASLP inspections and analyses have been conducted to commercial 
standards in parallel with mandatory Navy assessments, resulting in 
numerous lessons learned and improvements to Navy standards and 
processes. After 5 years of ASLP execution, the number of unique ABS 
findings is now less than 5% of total findings. In view of the current 
fiscal climate, coupled with improvements to Navy processes and 
decreasing number of unique ABS findings, the Navy is evaluating the 
cost effectiveness of continuing ASLP. Options being considered include 
augmenting the Navy's onboard assessment resources with ABS inspectors 
trained to Navy standards, and investigating limited use of ABS 
engineering expertise in predicting expected service life using Navy 
assessment results.
                                 ______
                                 
                   QUESTIONS SUBMITTED BY MR. WITTMAN
    Mr. Wittman. In cooperation with the American Bureau of Shipping 
(ABS), the Navy began the Achieving Service Life Program (ASLP) which 
is a tailored program to prioritize maintenance resources resulting 
from survey findings combined with structural stress and fatigue 
assessments. Does the Navy intend to continue ASLP which was recently 
highlighted as a success story by VADM McCoy in the May 2013 U.S. Naval 
Institute article ``To Improve the Material Readiness of the Surface 
Fleet''? Please provide some examples of ASLP survey, structural and 
fatigue analysis findings and recommendations which will help the Navy 
attain service life as well as improve the targeted expenditure of 
maintenance funds.
    Clearly, there was a cost-savings benefit to the Navy in leveraging 
the expertise and capability of ABS rather than attempting to acquire 
or develop an in-house capability. If the Navy does intend to eliminate 
ASLP, does the Navy have a plan to re-create or develop another service 
life program and at what cost to the U.S.
taxpayer?
    Admiral Rowden and Admiral Matthews. ASLP was initiated in 2009 
along with other measures, such as establishment of Surface Maintenance 
Engineering Planning Program (SURFMEPP) and increasing resources at the 
Naval Regional Maintenance Centers (RMCs), in order to improve 
maintenance planning and achieving ships' expected service life (ESL).
    The ABS onboard corrosion inspections are performed to commercial 
standards and are in parallel with onboard assessments and analyses 
conducted in accordance with Navy standards. One of the key objectives 
of ASLP has been to study the findings of ABS commercial surveys/
analyses and to develop improvements to Navy standards and processes 
executed by Navy entities such as the RMCs. As a result, there have 
been many improvements to Navy assessment requirements and the manner 
in which we develop, track, and prioritize maintenance actions 
resulting from onboard corrosion assessments performed to Navy 
standards. Such improvements include revised assessment standards for 
tanks, voids, and critical spaces; enhanced branding of corrosion-
related corrective maintenance actions; and consolidation of Navy 
assessment findings and corrective action status in Navy databases such 
as Corrosion Control Information Management System.
    After 5 years of ASLP execution, coupled with continued SURFMEPP 
evolution and increased RMC assessment resources, the number of unique 
ABS findings are now less than 5% of total findings. In view of the 
current fiscal climate, coupled with improvements to Navy processes, 
and decreasing number of unique ABS findings, the Navy is evaluating 
the cost effectiveness of continuing ASLP in its current construct. 
Options being considered include augmenting the Navy's onboard 
assessment resources with ABS inspectors trained to Navy standards, and 
limited use of ABS engineering expertise in predicting ESL using Navy 
assessment results.
    Mr. Wittman. In light of the existing shortfalls in the FY13 O&M 
accounts, and the impacts of sequestration in FY14, what are your 
greatest concerns about the Navy's readiness? And, what is the impact 
it will have on the future?
    Admiral Rowden and Admiral Matthews. We are concerned that the cuts 
imposed by continued sequestration will result in significant 
degradation to our surface fleet readiness as inadequate funding for 
life-cycle maintenance impacts the material condition of our ships and 
their ability to reach expected service life. This will reduce 
operational availability of our ships and result in a lower force 
structure than projected by our 30-year shipbuilding plan.
    Navy's ability to manage the impacts of sequestration in FY13 is 
not representative of the expected impact in FY14. The impact of 
sequestration in FY14 will be more severe since it is a larger topline 
reduction imposed upon a smaller budget, and because the ability to 
mitigate readiness impacts by reprogramming prior-year procurement 
funding was essentially exhausted in FY13. Without reprogramming 
authority, under sequestration, over 50% of the approximately 60 
planned CNO availabilities will need to be cancelled or deferred.
    Two additional factors are impacting surface ship readiness. One is 
the significant backlog of life-cycle maintenance developed after 
nearly a decade of high operational tempo and deferred maintenance. 
Funding for the ``reset'' of surface ship readiness will be at risk 
under continued sequestration. The second is that we continue to rely 
on OCO funding for a significant portion of our enduring baseline ship 
maintenance requirement. As a result, surface ship maintenance funding 
will be increasingly
vulnerable as OCO funding is phased out and baseline budgets become 
more
pressurized.
    Mr. Wittman. What is the impact of sequestration on surface ship 
operations?
    Admiral Rowden and Admiral Matthews. Sequestration in FY14, 
particularly if combined with a continuing resolution, will compel us 
to defer roughly half of FY14 surface ship availabilities. Ships 
impacted will experience an increase in the number of equipment 
casualties, limiting their ability to operate at full capacity and 
capability. In addition, the likelihood that the casualties that do 
occur will be more significant and take longer to repair will increase. 
Ultimately, the maintenance that was deferred will be more costly and 
extensive when we finally have the resources to execute that 
maintenance. If the maintenance is not reconstituted, the ships' 
ability to achieve expected service life is reduced.
    In 2013, steaming days were reduced due to sequestration. It is 
likely the Navy will have to further reduce steaming days if sequester 
continues in 2014. Reducing steaming days will negatively impact 
training and readiness of the Fleet as ships will not be able to get 
under way to practice important and vital tasks such as gunnery 
exercises, underway replenishment, air operations, and a multitude of 
other tasks necessary for safe operations, which will manifest as 
reduced surge capacity in the event of conflict or crisis response.
    Navy also canceled five ship deployments in fiscal year 2013 as a 
result of
sequestration.
    Mr. Wittman. How much is the Navy reliant on OCO funding? In what 
accounts? Why is the Navy not moving from OCO to baseline?
    Admiral Rowden and Admiral Matthews. OCO funding has been essential 
to Navy's ability to provide ``ready'' and trained forces during the 
conflicts in Iraq and Afghanistan over the past 12 years. The 
operations and sustainment of our Navy expeditionary combat support 
forces most directly involved in the operations have been highly 
leveraged with OCO funding. Sustaining this long war has also driven 
higher maintenance requirements for our ships and OCO funding has 
become a critical component of our ship maintenance program. The Ship 
Operations, Ship Depot Maintenance, Aviation Depot Maintenance, and 
Flying Hour Programs also receive OCO and cannot sustain their present 
level of operations without it. The Navy PB14 budget requests the 
following OCO amounts to fund total requirements:


----------------------------------------------------------------------------------------------------------------
             Ship Maintenance                               $1.3B (20% of the total requirement)
----------------------------------------------------------------------------------------------------------------
Ship Operations                             $ .5B (18% of the total 51 deployed/24 nondeployed
                                                  steaming days requirement)
----------------------------------------------------------------------------------------------------------------
Flying Hours Program                        $ .2B (3% of the total requirement)
----------------------------------------------------------------------------------------------------------------
Aviation Depot Maintenance                  $ .1B (11% of the total requirement)
----------------------------------------------------------------------------------------------------------------
Navy Expeditionary                          $ .4B (43% of the total requirement)
----------------------------------------------------------------------------------------------------------------


    Supplemental funding above the baseline will likely be required for 
some time to restore the readiness of our ships. Navy remains concerned 
that, although ground combat operations will end in Afghanistan, Navy 
operations are likely to continue at their current pace or even 
increase in the coming years. As such, the Navy, in conjunction with 
the Office of the Secretary of Defense (Comptroller) and the Office of 
Management and Budget, continues to identify enduring missions funded 
in the OCO that should transition to the baseline.
    Mr. Wittman. As the size of the Navy's fleet declines, and staffing 
levels at maintenance and training organizations feel added pressure 
from sequestration, what specific risks has the Navy identified that 
could hinder its ability to execute the Surface Force Readiness Manual 
strategy?
    Admiral Rowden and Admiral Matthews. The purpose of the SFRM is to 
ensure ships are trained, maintained, and certified for success in 
combat operations in support of a crisis (surge) or scheduled 
deployment. In order to achieve this certification, each ship requires 
the budget and the time to complete maintenance and training.

      The Navy is attempting to increase the size of 
maintenance and training organizations to correct prior deficiencies so 
we can execute the SFRM strategy and get our forces maintained, trained 
and certified for deployment.
      Despite increasing the size of maintenance and training 
organizations, specific risks of sequestration include:

          Cancelling or delaying maintenance availabilities.
          Reducing underway training time (a reduction in steaming 
        days).
          Delaying training until it is absolutely necessary, 
        thereby reducing ability to surge forces.
          Tailoring training to cover only the most likely 
        missions.
    Mr. Wittman. To help improve the material condition of the fleet, 
the Navy has reorganized OPNAV offices, stood up new maintenance 
organizations, and partnered with the American Bureau of Shipping. 
What, if any, measurable results or cost savings have resulted from 
these efforts?
    Admiral Rowden and Admiral Matthews. Since 2010, Navy has worked 
aggressively to reverse a decade-long negative trend in surface force 
readiness due to high operational tempo and a progressive maintenance 
process that focused on near-term maintenance to get ships under way. 
Progress is being made to improve the material condition of the Fleet, 
but measurable results and cost savings take time. As we liquidate the 
existing backlog of maintenance and continue to improve our maintenance 
planning and execution processes, we expect more apparent results. 
Recent accomplishments include:

      Established the Surface Maintenance Engineering Planning 
Program (SURFMEPP) to provide technical oversight of surface ship 
maintenance.
      Revised depot maintenance requirements for CG-47, DDG-51, 
LSD-41/49, LHD-1/8, MCM-1, and LCS-1/2 ship classes to more accurately 
capture the necessary life-cycle maintenance.
      Updated the tank database which now tracks 12,600 tanks 
and contains accurate condition information for about 85% of tanks in 
the Fleet.
      Implemented formal availability work package development 
process, with Baseline Availability Work Packages developed for 100 
total availabilities, 21 of which have been completed to date.
      Established Commander, Navy Regional Maintenance Center 
(CNRMC) and revitalized RMCs.
      Increased MPN by 1151 billets in POMs 12-14 to 
reconstitute organic intermediate level maintenance capacity and 
capability.
      Implemented Workforce Development Program to reestablish 
Journeyman training at the RMCs, improving the maintenance proficiency 
and capability of technicians both at RMCs and on subsequent sea tours.
      Improved Integrated Assessment Program, including 
implementation of Total Ships Readiness Assessments (TSRA) and 
Corrosion Control Assistance Teams, to improve material condition 
awareness of ships and assist crews with identifying and correcting 
deficiencies.
      203 TSRAs conducted in FY11/12, improving knowledge of 
ship material condition and maintenance availability planning and 
execution.
      Patterned after proven CVN and SSN material assessment 
programs.
      Implemented the Surface Ship Engineering Operating Cycle 
to instill discipline in the surface maintenance program by requiring 
maintenance executors to track their performance against the 
requirements developed by SURFMEPP.
      Enables us to identify, document, and track execution-
year impacts to ships' expected service life.
      Informs our Planning, Programming, Budgeting, and 
Execution cycle to support fiscal decisionmaking.
    Mr. Wittman. Navy witnesses have testified in recent years that 
they are turning the corner on reversing the negative trends in surface 
fleet readiness/maintenance, but needed more time to achieve the 
results. In the current fiscally challenged environment, how tenuous is 
that progress? And what is the potential for meeting those requirements 
coupled with recent trends of sustained surge/high operations tempo of 
the assets?
    Admiral Rowden and Admiral Matthews. Many of the readiness 
initiatives begun in recent years (e.g., Total Ships Readiness 
Assessments, Class Maintenance Plans, Surface Maintenance Engineering 
Planning Program, etc.) will endure and continue to benefit surface 
fleet readiness. However, if sequestration continues without 
reprogramming, over half the FY14 surface ship availabilities will be 
at risk, including the reset work that would have been accomplished on 
those ships. The backlog of life-cycle maintenance will grow even 
larger, and for some ships may become cost-prohibitive. FY14 
availabilities that are completed will be descoped, reducing the amount 
of reset life-cycle maintenance accomplished and potentially affecting 
expected service life.
    If sequestration in FY14 is averted and the President's baseline 
budget and OCO request are enacted, the full maintenance requirement 
for the Fleet will be funded, including $346.6M to ``reset'' the 
material condition of surface ships undergoing dry-docking 
availabilities in FY14. This would put us on a path to reset the 
remainder of the surface fleet in future years, even if the trend of 
high operations tempo
continues.
    Mr. Wittman. How do maintenance and modernization correlate to a 
ship's ability to reach expected service life?
    Admiral Rowden and Admiral Matthews. Maintenance and modernization 
correlate to the ship's ability to reach expected service life by 
addressing two issues: deteriorating material condition due to age/
fatigue and the obsolescence of machinery, weapons, sensors, and 
networks aboard the ship.
    If maintenance is not conducted regularly the ship will eventually 
be unable to operate safely. Equipment may be degraded or become 
nonoperational, and the ship's structure will become weakened.
    Modernizing a ship includes upgrading obsolete equipment so that 
its combat system can pace a modern threat and replacing old equipment 
that is no longer supported logistically with new technologies that are 
in production and available.
    Proper maintenance and timely modernization ensure ships are 
relevant and able to meet expected service life.
    Mr. Wittman. Given the current budget environment and limited 
maintenance resources, would you expect the Navy to defer or cancel 
additional availabilities in FY14? If the Navy defers routine 
maintenance on surface ships, how will the Navy sustain its current 
fleet of ships for their expected service life, and fully execute its 
30-year shipbuilding plan?
    Admiral Rowden and Admiral Matthews. Under continued sequestration, 
the current estimate is that funding for more than 50% of the 
approximately 60 planned FY14 surface ship availabilities will be at 
risk.
    Not performing ship maintenance when required will result in 
reduced operational availability due to degraded material condition. If 
maintenance is continually deferred, the cost and duration of deferred 
repairs rise significantly. Ultimately, if life-cycle maintenance is 
not completed, ships will be decommissioned before their expected 
service life (ESL). Failure of ships to reach ESL impacts our ability 
to reach the force structure projected by the 30-year shipbuilding 
plan.
    Mr. Wittman. Can you please describe the total cost of surface ship 
reset, length of time required to accomplish it, the type of 
maintenance required, how the Navy is funding those requirements, and 
how the bill originated?
    Admiral Rowden and Admiral Matthews. Surface ship reset cost is 
$346.6 million in FY14, with an additional estimated $2 billion 
required in future years. By FY18 all surface ship reset maintenance is 
scheduled for completion. When Navy started the reset process, there 
were 89 ships requiring significant dry-docking maintenance 
availabilities to reset. Today, 53 ships still require reset during 
their next dry-docking availability.
    The type of maintenance required usually consists of repairs to 
Hull, Mechanical and Electrical systems (HM&E), to include structural 
repairs to tanks and voids. For FY13 and FY14 availabilities, reset 
funding is incorporated into availability planning and execution.
    This requirement originated primarily due to high operational tempo 
and deferred maintenance during Operation Iraqi Freedom and Operation 
Enduring Freedom.
    Mr. Wittman. What is the impact to the 30-year shipbuilding plan 
and overarching force structure if the Navy does not receive the 
necessary funds to reset the force?
    Admiral Rowden and Admiral Matthews. The exact impact is unknown, 
but without ``reset'' funding the Navy will be forced to cancel or 
defer important maintenance, reducing the combat readiness and 
viability of our ships. In the long term, if we do not maintain our 
ships, the Navy will be forced to decommission ships before their 
expected service life. The Navy estimates that if sequestration 
continues over the long term and there is no maintenance funding, by 
2020 we will be reduced from 295 ships down to a Fleet of about 255-260 
ships.
    Mr. Wittman. What is the impact of layoffs in the private sector 
for Navy surface ship maintenance? Have there been any impacts to date? 
And, what are your concerns about the possible long-term consequences 
on the private sector depots and the fleet?
    Admiral Rowden and Admiral Matthews. Navy and industry predicted 
FY13 budget uncertainty would result in layoffs at private sector 
shipyards. Because all FY13 ship availabilities were restored following 
passage of the FY13 appropriations bill and reprogramming 
authorization, the anticipated layoffs did not occur. In fact, the 
private sector is on track to perform as much or more total maintenance 
Man Days (funded) in FY13 as in FY12.
    Although layoffs did not occur in the short term, Navy is concerned 
about the long-term impacts of sequestration on the private sector 
industrial base. If sequestration continues, the impact in FY14 will be 
more severe since it is a larger topline reduction imposed upon a 
smaller budget, and because the ability to mitigate readiness impacts 
by reprogramming prior-year procurement funding was essentially 
exhausted in FY13. Without reprogramming authority, under 
sequestration, over 50% of the approximately 60 planned CNO 
availabilities will be cancelled or deferred, putting up to 8,000 
private sector jobs at risk. Many of these would be highly skilled 
artisans that take years to train. The resulting loss of talent would 
impact the capabilities and capacity in the private sector industrial 
base, and would not be able to be quickly reversed when needed. 
Ultimately, it would lengthen maintenance periods and increase costs, 
resulting in degraded surface fleet readiness.
    Even if a source of funding is identified and reprogramming is 
authorized during the fiscal year, negative impacts to the industrial 
base and fleet readiness are likely. The uncertainty of having 
maintenance availabilities deferred, and then funded at the last 
minute, is very disruptive to the maintenance planning process and to 
workforce management by our private sector partners. A shorter lead 
time to finalize the maintenance schedule and procure necessary 
equipment and materials often drives up costs and may impact the 
maintenance that can be accomplished in the availability. Specific 
maintenance that requires extensive planning or long-lead materials may 
be deferred, even if the availability itself is funded and executed.
    Mr. Wittman. There is currently a maintenance backlog for surface 
combatants due, in part, to the high operational tempo. With no 
expectation that this tempo will decrease in the near future, how does 
the Navy plan to conduct maintenance and/or modernization of these 
ships? What specific mitigation strategies has the Navy developed to 
address the high operational tempo and staffing shortages that GAO 
raised as risks that could hinder implementation of the Surface Force 
Readiness Manual strategy that was introduced in 2012? How much forward 
presence can the Navy provide the combatant commanders and still have 
time to perform the maintenance necessary to keep the fleet 
operational?
    Admiral Rowden and Admiral Matthews. The current backlog is a 
result of maintenance deferred over the last decade as we experienced a 
high operational tempo and prioritized efficiency over effectiveness. 
Many of the organizational and process changes made to surface fleet 
maintenance in the last few years have focused on providing greater 
oversight of maintenance actions across the Fleet, capturing the true 
material condition of our ships, and quantifying the necessary 
maintenance based on engineered requirements. As a result, the right 
maintenance is scheduled on time, including any additional maintenance 
requirements as a result of high operational tempo. Consistent with the 
Surface Force Readiness Manual, deployment and maintenance periods 
align with the Fleet Response Training Plan to ensure ships can meet 
maintenance and modernization requirements from a scheduling 
standpoint, even after completing extended deployments.
    We have begun to address staffing shortages by establishing 
Commander, Navy Regional Maintenance Center (CNRMC) and revitalizing 
the RMCs, including:

          Increased MPN by 1151 billets in POMs 12-14 to 
        reconstitute organic intermediate level maintenance capacity 
        and capability.
          Implemented Workforce Development Program to 
        reestablish Journeyman training at the RMCs, improving the 
        maintenance proficiency and capability of technicians both at 
        RMCs and on subsequent sea tours.

    As long as we are identifying, funding, and executing the true 
maintenance requirement (including liquidation of the current backlog), 
ship material condition will not limit the forward presence available 
to combatant commanders. Under continued sequestration however, over 
50% of approximately 60 FY14 availabilities will be deferred. This 
would result in degraded material condition of those ships which could 
limit their operational availability. Ultimately, if the maintenance is 
not completed, it could impact their ability to reach expected service 
life, resulting in reduced force structure and less ability to provide 
forward presence.
    Mr. Wittman. How well is the cost of maintaining Navy's force 
structure aligned with the cost of being able to deploy it? To what 
extent is the Navy concerned that decisions to defer ship maintenance 
in 2013 will lead to shortfalls in deployable forces or surge capacity, 
particularly carrier strike groups, in 2014 and beyond? What, if any, 
adjustments is the Navy making to manage such concerns?
    Admiral Rowden and Admiral Matthews. As part of the 2012 OPNAV 
realignment, resource sponsorship for the majority of afloat readiness 
resources was realigned to the DCNO for Warfare Systems (N9). N9 is now 
responsible for the integration of manpower, training, sustainment, 
modernization, and procurement of the Navy's surface warfare systems 
resourced by the director of Surface Warfare (N96). This has enhanced 
our focus on warfighting capability, program wholeness, and total 
ownership cost, allowing better alignment of the ``cost to own'' (or 
maintain) the surface fleet with the ``cost to operate'' (or deploy) 
it.
    The original decision to defer 23 ship maintenance availabilities 
in FY13 was a result of the continuing resolution and sequestration. We 
were able to restore 15 availabilities when the FY13 appropriations 
bill was passed, and the final 8 with a reprogramming request. As a 
result, there have been no shortfalls in deployable forces or surge 
capacity as a result of deferred maintenance in FY13. There has been an 
impact on Fleet operations and readiness as a result of the $4.1B 
shortfall in our Operations and Maintenance (O&MN) accounts in the FY13 
appropriations bill, however. We cancelled several independent ship 
deployments, delayed CSG deployments, and limited our surge capacity--
impacts which will carry over to FY14 and beyond.
    Navy's ability to manage the impacts of sequestration in FY13 is 
not representative of the expected impact in FY14. The impact of 
sequestration in FY14 will be more severe since it is a larger topline 
reduction imposed upon a smaller budget, and because the ability to 
mitigate readiness impacts by reprogramming prior-year procurement 
funding was essentially exhausted in FY13. Without reprogramming 
authority, under sequestration over 50% of the approximately 60 planned 
CNO availabilities will need to be cancelled or deferred.
    To adjust to such a significant reduction in OM&N funding, 
maintenance and training will have to be prioritized for next-to-deploy 
ships. For example, the ships receiving maintenance availabilities in 
FY14 will primarily be those deploying in FY15.
    Mr. Wittman. In 2010, Vice Admiral Balisle's Navy Fleet Review 
Panel concluded that prior decisions to improve efficiency may well 
have been an appropriate attempt to meet Navy priorities at the time, 
but there was limited evidence to identify any changes that were made 
with surface force readiness as the top priority--efficiency--was 
sought over effectiveness. How do the Navy's current decisions that are 
designed to achieve cost savings differ from the prior efficiency 
decisions, which adversely affected surface ship readiness, according 
to the Fleet Review Panel report?
    Admiral Rowden and Admiral Matthews. The Navy, in order to achieve 
the best possible surface ship readiness, has reorganized maintenance 
and modernization functions within the Navy staff. As a result, a 
revitalized fleet ashore maintenance organization has been funded and 
new procedures have been put in place to allow improved accountability 
for the use of both modernization and maintenance funds.
    There are several initiatives the Navy has put into place in order 
to reverse the negative trends identified in the Fleet Review Panel 
report. The Navy has established a rigorous and comprehensive 
maintenance program based on best practices from the carrier and 
submarine fleet. This includes:

          Introduction of a Class Maintenance Plan which 
        dictates the periodicity of large maintenance items, such as 
        inspecting tanks or drydocking the ship.
          Introduction of the Surface Ship Engineered Operating 
        Cycle Instruction which delineates maintenance responsibilities 
        for fleet staffs and maintenance organizations.
          Increased manning at shore-based maintenance 
        facilities such as Regional Maintenance Centers.
          Instituted Surface Maintenance Engineering Planning 
        Program to provide centralized surface ship life-cycle 
        maintenance engineering, class maintenance and modernization 
        planning, and management of maintenance strategies aligned with 
        and responsive to National, Fleet, Surface Type Commander 
        (TYCOM) and NAVSEA needs and priorities.

    These initiatives were not put into place as cost-savings measures, 
at least in the short term. We do, however, expect the adherence to our 
material standard to lower the cost of maintenance in the long term as 
the cost of a maintenance problem increases exponentially if it is 
allowed to fester.

                                  
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