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


                         [H.A.S.C. No. 113-125]

                      LOGISTICS AND SEALIFT FORCE

                         REQUIREMENTS AND FORCE

                          STRUCTURE ASSESSMENT



                               BEFORE THE


                                 OF THE

                      COMMITTEE ON ARMED SERVICES

                        HOUSE OF REPRESENTATIVES


                             SECOND SESSION


                              HEARING HELD

                             JULY 30, 2014



                       U.S. GOVERNMENT PUBLISHING OFFICE 

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                          Washington, DC 20402-0001                                  


                  J. RANDY FORBES, Virginia, Chairman

K. MICHAEL CONAWAY, Texas            MIKE McINTYRE, North Carolina
DUNCAN HUNTER, California            JOE COURTNEY, Connecticut
E. SCOTT RIGELL, Virginia            JAMES R. LANGEVIN, Rhode Island
STEVEN M. PALAZZO, Mississippi       RICK LARSEN, Washington
ROBERT J. WITTMAN, Virginia          HENRY C. ``HANK'' JOHNSON, Jr., 
MIKE COFFMAN, Colorado                   Georgia
JON RUNYAN, New Jersey               COLLEEN W. HANABUSA, Hawaii
KRISTI L. NOEM, South Dakota         DEREK KILMER, Washington
PAUL COOK, California                SCOTT H. PETERS, California
               David Sienicki, Professional Staff Member
              Phil MacNaughton, Professional Staff Member
                        Katherine Rember, Clerk
                            C O N T E N T S





Wednesday, July 30, 2014, Logistics and Sealift Force 
  Requirements and Force Structure Assessment....................     1


Wednesday, July 30, 2014.........................................    25

                        WEDNESDAY, JULY 30, 2014

Forbes, Hon. J. Randy, a Representative from Virginia, Chairman, 
  Subcommittee on Seapower and Projection Forces.................     1
McIntyre, Hon. Mike, a Representative from North Carolina, 
  Ranking Member, Subcommittee on Seapower and Projection Forces.     2


Brown, VADM William A., USN, Deputy Commander, United States 
  Transportation Command.........................................     2
DiLisio, F. Scott, Director, Strategic Mobility/Combat Logistics 
  Division, Office of the Chief of Naval Operations..............     5
Jaenichen, Paul N., Maritime Administrator, U.S. Department of 
  Transportation.................................................     3


Prepared Statements:

    Brown, VADM William A........................................    33
    DiLisio, F. Scott............................................    49
    Forbes, Hon. J. Randy........................................    29
    Jaenichen, Paul N............................................    41
    McIntyre, Hon. Mike..........................................    31

Documents Submitted for the Record:

    [There were no Documents submitted.]

Witness Responses to Questions Asked During the Hearing:

    Mr. Hunter...................................................    65

Questions Submitted by Members Post Hearing:

    Mr. Forbes...................................................    69


                  House of Representatives,
                       Committee on Armed Services,
            Subcommittee on Seapower and Projection Forces,
                          Washington, DC, Wednesday, July 30, 2014.
    The subcommittee met, pursuant to call, at 2:02 p.m., in 
room 2212, Rayburn House Office Building, Hon. J. Randy Forbes 
(chairman of the subcommittee) presiding.

                       PROJECTION FORCES

    Mr. Forbes. We want to welcome all of you today to this 
hearing, and today the subcommittee convenes to receive 
testimony on logistics and sealift requirements.
    We are going to forego our opening statements just in the 
interest of time, because we are going to have a vote series 
called, I think, about 3:00, 3:15, or 3:30, and we want to make 
sure we get as much of this hearing in as we can before that.
    We have three very distinguished witnesses here today. And 
I want to thank all three of you for, one, your service to our 
country, but also your willingness to come help us today. I 
know, also, you couldn't do what you do without the valuable 
work of your staffs that are behind you, and on behalf of Mr. 
McIntyre and I, if you could just stand up if you are one of 
the staff people here today supporting them, we just want to 
tell you how much we appreciate you. So stand up and let us 
just thank you for that effort. Well, we appreciate so much all 
of your hard work and what you do.
    Our witnesses today are the Honorable Paul N. Jaenichen, 
Sr., Maritime Administrator, U.S. Department of Transportation, 
Maritime Administration; also, Vice Admiral William A. Brown, 
Deputy Commander, U.S. Transportation Command; and Mr. F. Scott 
DiLisio, Director, Strategic Mobility/Combat Logistics, Office 
of Chief of Naval Operations. So we thank you three gentlemen 
for being here.
    As I mentioned, we are going to put our opening statement 
in the record, but I would like to now recognize my partner in 
all of this, the ranking member, my good friend from North 
Carolina, Mr. McIntyre, for any comments he may have.
    [The prepared statement of Mr. Forbes can be found in the 
Appendix on page 29.]

                       PROJECTION FORCES

    Mr. McIntyre. Thank you, Mr. Chairman. Thanks to all of you 
all for coming, and I will echo the chairman's appreciation for 
your work and for the staff's work. We also will respect the 
fact of the more compressed time schedule we are on and forego 
opening remarks, but we will submit them for the record. God 
bless you all for your commitment and work.
    And thank you, Mr. Chairman.
    [The prepared statement of Mr. McIntyre can be found in the 
Appendix on page 31.]
    Mr. Forbes. Thank you, Congressman McIntyre.
    And I don't know which order you would like to go. Admiral, 
are you going to start us off, or are we going to go in a 
    Admiral Brown. I can do that, sir.
    Mr. Forbes. Okay. Well, we would love to hear your comments 


    Admiral Brown. Thank you, sir.
    Chairman Forbes, Ranking Member McIntyre, and distinguished 
members of this committee, it is truly an honor for me to be 
here today representing the United States Transportation 
Command [TRANSCOM]. Our force of men and women, military and 
civilian, is dedicated to providing reliable, seamless 
logistical support to our warfighters and their families around 
the globe. The dedicated professionals at TRANSCOM simply 
cannot accomplish this global mission without the capabilities 
provided by the United States Strategic Sealift fleet and our 
steadfast merchant mariners.
    I would also like to recognize and thank my good friends on 
my left here, Mr. Jaenichen and Mr. DiLisio. They work with us 
every day to try to achieve our goal of supporting our Nation. 
Their vision and leadership have enabled TRANSCOM to provide 
transportation and distribution support that are second to none 
anywhere in the world, and together, we deliver.
    TRANSCOM relies on both government-owned vessels and those 
accessed via commercial industry. Our government-owned fleet of 
60 total assets from the Military Sealift Command and the surge 
fleet and the Maritime Administration's Ready Reserve Force are 
strategically positioned around the country and important to 
our capability. All of these government-owned and commercial 
vessels are critical to the Department of Defense's ability to 
surge to meet future global requirements.
    As the Department of Defense [DOD] postures its forces in 
the future, sealift will continue to be a key component in 
ensuring strategic agility and dynamic presence for our 
Nation's military forces. And although organic assets are 
essential to meeting our requirement, we rely on commercial 
partners to augment the organic fleet during the initial surge 
of combat power and for the vast majority of sealift in 
peacetime and in the sustainment phases of the contingency 
    Access to these commercial assets is formalized by MARAD's 
[United States Maritime Administration] Voluntary Intermodal 
Sealift Agreement, the VISA program; and the Maritime Security 
Program, MSP program; as well as the Voluntary Tanker 
Agreement, the VTA. Through these programs, DOD gains critical 
access to U.S. commercial capabilities while ensuring the 
availability of a viable U.S.-flag maritime industry and crewed 
by U.S. citizens who are merchant mariners in our times of 
national emergency.
    The Maritime Security Program provides access to a fleet of 
60 military useful commercial vessels operating in 
international commerce and exercising intermodal networks 
throughout the world, and these provide jobs for United States 
citizens who are mariners. A significant percentage of our 
required sealift capacity needed in response to a national 
emergency will come from the 60 vessels operating within the 
MSP program.
    The maritime defense industrial base provides an 
irreplaceable shipbuilding as well as ship operating capability 
for the U.S., including the ability to support our forces 
around the globe. But this national defense capability is 
undergoing stress from several recent enduring factors, 
primarily the reduced amount of defense cargo resulting from 
our drawdown in Afghanistan and current economic conditions 
which make it challenging for U.S.-flag companies to compete 
with companies operating at much lower cost under foreign 
    Some think that as we transition from Afghanistan our 
requirement is reduced; this is, indeed, not the case. 
Maintaining a responsive sealift capacity and experienced 
mariners to crew our ships in time of need is essential to 
meeting the Nation's defense requirements. We are working with 
the Maritime Administration in its development of a national 
maritime strategy which could grow the U.S.-flag fleet and 
ensure that availability and the ability of U.S. Merchant 
Marine to meet our national security needs. Despite an 
uncertain future and dynamic strategic environment, TRANSCOM 
will continue in close collaboration with our partners to 
ensure we meet the Nation's needs in peace and in time of 
    Chairman Forbes, Ranking Member McIntyre, and all the 
distinguished members of this committee, thank you for your 
continued support to TRANSCOM and our total force. I am 
grateful for the opportunity to be here before the committee, 
and I ask that my written statement be submitted for the record 
and I look forward to your questions.
    Thank you, sir.
    [The prepared statement of Admiral Brown can be found in 
the Appendix on page 33.]
    Mr. Forbes. Admiral, thank you for your comments. And 
without objection, all the written statements will be submitted 
as part of the record.
    Mr. Jaenichen.


    Mr. Jaenichen. Good afternoon, Chairman Forbes, Ranking 
Member McIntyre, members of the subcommittee.
    I want to thank you for the opportunity to discuss the 
United States Merchant Marine that supports our Nation's 
government-owned and U.S.-flag commercial fleet sealift 
    While our Nation is continuing to recover from economic 
downturn of the past several years, more cargo today is being 
moved by merchant ships globally. However, there are challenges 
for maintaining the number of commercial U.S.-flag vessels 
actively involved in international trade, which affects the 
availability of sealift capacity that the Department of Defense 
relies upon to move equipment and supplies to support global 
projection and sustainment of our Armed Forces.
    The U.S.-flag commercial fleet operating international 
trade provides a substantial portion of the infrastructure for 
the sealift capacity with our commercial maritime companies, 
their vessels, and the mariners available in wartime or crisis, 
whenever and wherever they are needed.
    The number of vessels currently in the U.S.-flag fleet 
today has declined by nearly 20 percent as compared to the 
running 5-year average between 2008 and 2013. This causes me 
great concern about the overall health of our international 
trading fleet.
    Government-owned sealift force requirements have a direct 
and significant nexus to the commercial U.S.-flag maritime 
industry that provides the ready pool of proficient and 
qualified mariners. Given that the two are linked, DOD and the 
Maritime Administration must now assess the impact of a loss of 
these vessels on our sealift capacity and the availability to 
support national security.
    The overall volume of non-bulk dry and dry bulk preference 
cargo transported on U.S.-flag vessels has substantially 
decreased since 2005. Ships require cargo to be economically 
viable. So without ready access to commercial or government-
impelled cargo, the survival of some vessels in the U.S.-flag 
fleet operating international trade is in question.
    The cause of the falling volume of non-bulk dry and dry 
bulk preference cargo do not appear to be transient. Continued 
reductions in the number of U.S. Armed Forces and overseas 
bases, coupled with the decline in the number of troops 
involved in global operations suggest that military cargos will 
continue to decrease through 2016 and level off at less than 1 
million metric tons per year, or less than half of the volume 
that was transported as recently as 2011.
    The size of the U.S.-flag international trading fleet has 
decreased from the 5-year average of 101 to 83 as of this 
afternoon, and it is expected to decrease further in the 
future. Adverse impacts on the 58 liner-type vessels in the 
Maritime Security Program are already occurring, with one 
vessel having left the program and reflagging foreign, and up 
to two more expected to leave before the end of this year. 
Their primary reason for leaving the program is lack of cargo, 
and it appears unlikely that commercial or preference cargo 
opportunities will recover significantly anytime in the future.
    MARAD is responsible for determining whether adequate 
mariners are available to support the operation of sealift 
ships required to support our global deployment of our Nation's 
Armed Forces. We have determined that the pool of civilian U.S. 
merchant mariners available to crew government sealift ships 
when activated has declined over the last decade. The current 
number of qualified and experienced mariners available may not 
be adequate in the very near future without requiring the U.S. 
Coast Guard to waive domestic and international requirements 
for the mariners to crew government sealift ships when 
activated for longer than 6 to 8 months.
    This assessment of the status of the civilian merchant 
mariner pool included close coordination with the U.S. maritime 
labor unions in consultation with other maritime industry 
stakeholders. I have shared this assessment with DOD and intend 
to work closely with the U.S. Transportation Command, the U.S. 
Navy, and commercial maritime industry to address this issue. 
The Maritime Administration is currently working on developing 
a national maritime strategy with stakeholders aimed at 
preserving and growing all aspects of the U.S. Merchant Marine, 
including the U.S.-flag fleet trading internationally.
    The Maritime Administration is also focused on the future 
of the government sealift capacity. The average age of the 46 
vessels and the Ready Reserve Force or RRF is 40 years with the 
oldest being 47. While commercial ships are typically retired 
after 25 to 30 years of operation, the Maritime Administration 
intends to maintain the RRF vessels in the fleet for 50 years.
    Given the 40-year average age of the Ready Reserve Force, 
MARAD is coordinating with the Department of Defense to examine 
the need for recapitalization and to assess the full range of 
options that will balance DOD's requirements with funding 
realities. With regard to the Maritime Security Program which 
supports the 60 commercial U.S.-owned, U.S.-flag, U.S.-crewed 
vessels that support DOD sustainment sealift requirements and 
which transported over 90 percent of the equipment and supplies 
used by our troops in Afghanistan and Iraq, I would request 
that the committee support full funding at the authorized level 
of $186 million, as requested in the President's budget.
    Thank you for the opportunity to discuss the issues 
affecting the ability of the U.S. Merchant Marine to continue 
to meet DOD sealift requirements.
    I thank the committee for their support, and I look forward 
to any questions that you might have.
    [The prepared statement of Mr. Jaenichen can be found in 
the Appendix on page 41.]
    Mr. Forbes. Mr. Jaenichen, thank you so much for your 
    Mr. DiLisio, you are now recognized for any opening remarks 
you would like to make.


    Mr. DiLisio. Thank you, Chairman Forbes, Ranking Member 
McIntyre, distinguished----
    Mr. Forbes. You might want to pull that microphone a little 
bit closer. I don't know if it is turned on or not, but 
sometimes you have to get----
    Mr. DiLisio. I think I have got it now.
    Mr. Forbes. That is good.
    Mr. DiLisio. Thanks.
    We continue to meet operational requirements while driving 
successful, innovative, and nontraditional solutions to global 
maritime logistics. You have met my colleagues. I won't 
reintroduce them, but I am honored to be here with them both. I 
consider them to be my close partners in this regard.
    I will be brief in my remarks so we can spare some time 
together. The Combat Logistics Force and Strategic Sealift 
missions are accomplished by an organic fleet comprised of 
about 122 ships. These ships support numerous missions, 
including the following: At-sea resupply of our naval 
combatants; prepositioning of critical unit equipment, 
ammunition, and sustainment for Marine Corps, Army, and Air 
Force; humanitarian assistance and disaster relief; towing, 
diving, and salvage operations worldwide; rapid intra-theater 
movement of cargo and personnel; and afloat staging 
    This unique segment of the fleet is augmented by the 
commercial U.S.-flag fleet, as Mr. Jaenichen spoke to you 
about. It provides a scalability capability required by the 
combatant commander to execute critical missions around the 
globe. The ability to rearm, refuel, and reprovision our forces 
at sea, independent of restrictions placed on it by any foreign 
country, is critical in the Navy's ability provide presence and 
projected warfighting power from the sea where it matters when 
it matters.
    The Navy's Combat Logistics Force ships are the lifeline of 
resupply to the Navy operating forces underway, enabling 
carrier strike groups, amphibious ready groups, to operate 
forward and remain on station during peacetime and war. The 
Combat Logistics Force includes replenishment oilers, T-AOs; 
fast combat support ships, T-AOEs; and dry cargo and ammunition 
ships, T-AKEs. The T-AOs primarily provide fuel but with the 
ability to provide limited quantities of dry cargo. The T-AOEs 
and T-AKEs are multi-mission ships capable of multiproduct, a 
term of ``one-stop shopping,'' if you will, to customer ships 
by simultaneously replenishing ammunition, provisions, and 
    A different portion of that force is the Strategic Sealift 
Program, provides the necessary transportation for Marine Corps 
and Army combat equipment, fuel, and sustainment. This 
capability is provided to the combatant commander through three 
methods: afloat prepositioning, surge sealift, and sustainment 
shipping. These methods encompass 85 organic ships with each 
providing a critical set of capabilities when called for 
tasking or activated for service.
    The Prepositioned Fleet is strategically located in key 
areas on the globe prior to actual need ensuring ready access 
for contingencies. Doing so provides flexible, rapid response 
of military equipment, combat gear, and supplies essential to 
sustaining initial phases of contingencies, including major 
combat operations. When Mobile Landing Platform [MLP] ships 
join the Large Medium-Speed Roll-on/Roll-off ships as part of 
the Maritime Prepositioning Force next year, they will enable a 
greater sea-basing capability and increased flexibility across 
the operational area.
    An MLP is a tremendously versatile ship; it is new and will 
act as a floating base for expeditionary operations. Equipped 
with ramp systems, the MLP is an intermediary transfer point 
for troops, equipment, and sustainment moved ashore by Landing 
Craft Air Cushion craft and the Joint High Speed Vessel. The 
Joint High Speed Vessel is designed for high-speed intra-
theater transport. Experimentation is revealing more potential 
missions to include various types of mission support, 
humanitarian assistance, theater security cooperation, and 
security force assistance.
    Surge ships are the second subset of sealift and is 
comprised of 60 ships. These ships move unit equipment to the 
theater of operation and facilitate the rapid on-load and off-
load of rolling stock and service-unique special mission 
equipment. The sustainment shipping provided by the commercial 
U.S.-flag fleet Mr. Jaenichen referred to, is the third 
component of Strategic Sealift. These vessels assist in the 
sustainment phases of operations as well as the global movement 
of government cargo.
    These commercial owners participate as a program member of 
the overall sealift capability. We are currently working with 
fleet commanders to complement Combat Logistics Force and 
Strategic Sealift capabilities by examining innovative ways to 
improve capability and capacity to perform theater security 
cooperation missions that also enhance overall Navy combat 
force availability. Deploying adaptive force packaging can 
create cost-effective opportunities for our fleet to expand 
support missions and sustain global presence.
    We will continue to support forward presence and relieve 
stress on the rest of the force through traditional and 
innovative approaches. We will continue to rely on the Combat 
Logistics Force and Strategic Sealift as they contribute to the 
Navy's tenets, you have heard from the CNO [Chief of Naval 
Operations]: Warfighting first, operate forward, and be ready.
    I want to thank you for your continued support of our 
force, and thank you again for the opportunity to speak to the 
    [The prepared statement of Mr. DiLisio can be found in the 
Appendix on page 49.]
    Mr. Forbes. Mr. DiLisio, thank you so much for being here 
and your service to our country.
    I am going to defer my questions until the end to make sure 
all our Members can get their questions in.
    So at this time, I would like to recognize Mr. McIntyre for 
any questions he may have.
    Mr. McIntyre. And again, I will follow the chairman's 
example, given our compressed time today and proceed with the 
Members asking their questions.
    Thank you.
    Mr. Forbes. Thank you, Mr. McIntyre.
    Then, our first Member for questions will be recognized 
will be Mr. Runyan recognized for 5 minutes.
    Mr. Runyan. Thank you, Mr. Chairman.
    Just a little bit, I know I have dealt with this on other 
subcommittees a little bit with TRANSCOM, with airlift and CRAF 
[Civil Reserve Air Fleet], which Merchant Marine, I would 
think, would be the mirror thing on the seas. I know we have 
probably been through these situations before where you have a 
downturn and you have to walk away from it.
    What have we learned from the past and what are we able to 
do to keep that readiness there? Because obviously, we don't 
have a need for it. But I dealt with this on the CRAF aspect of 
it; as the companies can't keep the civilian fleets around, it 
becomes a huge problem and the ramp-up on the back end when 
there is another conflict is huge.
    And where would that--well, can the Air Force absorb that, 
and do you have any idea of what cost that would be to get 
that, to get--you know, because it may take you at some point 
if you do have to, a year or two to get the civilian sealift 
aspect back on?
    Mr. Jaenichen, do you have any--I know it is kind of a 
vague question, but----
    Mr. Jaenichen. Well, first of all, what I will tell you is 
the 83 vessels that are currently operating international 
trade, 60 of those are in the Maritime Security Program. If 
those ships are lost or they decide to not continue in the 
program, the cost to the U.S. Government to replace them in 
terms of the assets that these civilian companies have 
essentially invested, probably over $2 billion in those 60 
ships alone. But the piece that is probably more important to 
us is the international logistics capability that those 
companies have access to that we don't necessarily have access 
to as the Department of Defense or as the U.S. Government.
    For example, when Pakistan closed their borders to be able 
to get our supplies to Afghanistan, it was the MSP program that 
actually developed the Northern Distribution Network to be able 
to get those supplies to our troops to be able to support the 
continued operations in Afghanistan.
    So that particular aspect of the infrastructure, that is a 
$40 billion, in excess of $40 billion to replace. So to be able 
to say that we can ramp up, the ships themselves are important, 
but the mariners who man them are probably just as important 
because I can't necessarily make a mariner.
    It takes 10 years to get a mariner trained and experienced 
and licensed to be a master on one of these vessels or a chief 
engineer. I can't turn the faucet on and just say, okay, I ramp 
up and suddenly they are there. I talked about the fact that we 
need cargo to have ships. I need ships to have mariners. The 
mariners are probably one of the most important complements of 
that, and it is not easy to ramp those up.
    Mr. Runyan. I know but also in the same way, to really 
train mariners, you are going to have to be moving them around 
and you are going to have to have cargo on those ships. So it 
is, you know, what is first? The chicken or the egg? I mean, it 
is a little bit frustrating. I mean, I really, I think we 
understand the need for it, but how do we sustain it? Any 
suggestions there?
    Mr. Jaenichen. I think the important aspect of sustainment 
is to continue the funding of the programs that are currently 
in place. The Maritime Security Program which is currently 
funded at $186 million a year and is in the request for fiscal 
year 2015 at the same funding level, that to replace that 
capacity would cost the Department of Defense significantly 
more than what we are currently expending. So I think that is 
the first piece that we have to do.
    The second piece is to take a look at what other cargo 
opportunities and to take a look, that is what we are doing 
with this national maritime strategy, to evaluate ways to be 
able to get cargo on these ships to make sure that they are 
economically viable. One of the challenges that we have is for 
a number of reasons the cost to operate under U.S. flag, as 
Admiral Brown pointed out in his opening remarks, is somewhere 
between $5- and $7 million on an annual basis.
    The amount that we pay them under the MSP program stipend 
barely covers 50 percent of that amount. So in order to make up 
that amount, we have to either have government-impelled cargo 
through cargo preference or civilian cargo. Absent that, and 
now that we have these decreasing cargos, both on the DOD side 
and other preference cargos that we have here in the U.S., the 
program, when it was developed in 1996, relied on three things: 
it relied on the stipend amount; it relied on the cargo 
commercially available; and it relied on government-impelled 
    If you change sort of the tenets of the program where you 
lower one, you are going to have to figure out how to increase 
the other two, and it doesn't look like that the preference 
cargo is going to increase any time soon, so we have to look at 
those other levers to be able to maintain those ships in the 
program that are vitally important.
    The mariners, as I talked about, those mariners that are 
sailing commercially today are the same mariner pool that mans 
our government sealift ships. If I don't have the commercial 
ships operating, I don't have access to the mariners, and so I 
have now lost that surge capacity that we are currently 
    Mr. Runyan. Thank you.
    Chairman, I yield back.
    Mr. Forbes. Gentleman yields back.
    Before I recognize Mr. Larsen for his questions, I would 
like to ask unanimous consent that non-subcommittee members, if 
any, be allowed to participate in today's hearing after all 
subcommittee members have had an opportunity to ask questions. 
Is there any objection?
    Without objection, non-subcommittee members will be 
recognized at the appropriate time for 5 minutes.
    And now, the chair recognizes Mr. Larsen for 5 minutes.
    Mr. Larsen. Thank you, Mr. Chairman.
    Mr. Jaenichen, thanks for being here. Can you cover in a 
little more detail the impact on the employment base on the 
mariner availability and mariner training; and are you looking 
at that as part of the maritime strategy, not just from a broad 
strategic perspective, but are you going to try to describe 
that in a little more detail year to year or every 5 years what 
it might mean for mariners?
    Mr. Jaenichen. Thank you for the question, Mr. Larsen.
    There are two things. One, today the licensed mariners that 
are sailing internationally, or blue ocean or deep ocean, as we 
refer to them, is about 4,100 officers and about 7,600 what we 
call unlicensed that operate the ships. Typical crews 
themselves, we will continue to take a look at that. The key 
piece of this as we take a look at the age demographic, we 
coordinate very closely with the maritime unions to make sure 
that we are able to man not only our commercial ships but also 
our government sealift ships.
    We have mariners on our reserve sealift ships today that 
are in surge, the Ready Reserve Force. About 460 mariners are 
employed to do that. So we have some of the experience and 
capacity, but I require in excess of, you know, 1,200 
additional mariners if I activate all of those ships. That has 
to come from somewhere. So the actual national maritime 
strategy will focus on the floor for the number of ships in the 
program has to be able to support the Department of Defense 
requirements, specifically for the sealift requirements for 
TRANSCOM. That is the floor. Our intention is to make sure that 
we are well above the floor so that we are not at risk.
    I am concerned today about the number of mariners and the 
ability to be able to man our vessels, if they were activated, 
for much longer than the time that they potentially needed. As 
I pointed out in my opening remarks, 6 to 8 months is all we 
estimate with release to be able to sustain that. Without that, 
those crews would have to go indefinitely on the ships, and 
that is just not the way we operate them.
    Mr. Larsen. Yeah. So can you explain that 6 to 8 months 
timeframe again?
    Mr. Jaenichen. That 6 to 8 months is, normally the crews, 
when they go on the ship, at some point in time and it really 
determines, you know, it is based on the ship manager, it is 
based on the ship, it is based on the company, at some point in 
the future, they have to have a rotation. We estimate that 
there is, you know, about 2.2 times the number of mariners that 
is required to be able to man the number of billets on that 
vessel, so you have to have a relief crew that is available.
    Mr. Larsen. Okay. Great.
    And then, Admiral, I think it was you--well, you probably 
all discussed recapitalization, but, perhaps it was in your 
testimony on recap, can you talk a little bit about what that 
cost is and how you are thinking about how we should be 
thinking about doing that?
    Admiral Brown. Yes, sir. Right now we see there is kind of 
a near-term issue in the 2017 to 2026 timeframe that we are 
losing about nine vessels, we could lose nine vessels if we 
don't extend the life of some of them and then we have a 
longer-term problem where more ships would age out. So right 
now we are focused on the short-term problem between now and 
2026, and we are working with the Navy as well as MARAD to come 
up with a hybrid solution that would look at potentially 
building new U.S.-built ships for the Navy that we would get 
the ships that they replace and put them in the surge force.
    The other option would be to extend the service life of 
some of the ships that we already have. So we are looking at 
those combinations, and we owe basically in the 2017 budget a 
plan and I think there will be other requirements to come back 
here and discuss our plan in more detail.
    Mr. Larsen. On the life extension, is it going from 40 to 
45 or just going out to the 50 years?
    Admiral Brown. It would go from 50 to 60 years. So what we 
have to do is we have to start making those decisions early 
because if we are going to take them out of the fleet, we would 
stop doing normal investments that would keep them active. So 
we would have to, you know, continue to invest in them and then 
they would also have to have perhaps some, you know, additional 
shipyard work and whatnot to extend them.
    Mr. Larsen. Okay. Thanks.
    And then just because it is a--not just because, I mean it 
is important, as well, but MLP John Glenn was at Naval Station 
Everett for about 6 months and left not too long ago. But what 
is our MLP plan?
    Mr. DiLisio. Right now we have got an MLP assigned to both 
MPSRONs [maritime prepositioning ship squadrons], and so what 
they basically represent is a feature ship. So they don't carry 
cargo, per se, but they allow the opportunity for teaming with 
an LMSR [Large, Medium-Speed Roll-on/Roll-off] so that you 
could break down that LMSR or its cargo or its vehicles very 
quickly. I don't know if you got a chance to see its modified 
version when it left, but basically there were three ways for 
the LCACs [Landing Craft Air Cushion] to board, plus a landing 
spot and a ramp situation so it could interface with the ships 
we have just been talking about.
    Mr. Larsen. And I am sorry, just quickly, the numbers we 
are building?
    Mr. DiLisio. Two.
    Mr. Larsen. Just the two.
    Mr. DiLisio. Two of that variety.
    Mr. Larsen. Two of that variety. Thank you.
    Thank you, Mr. Chairman.
    Mr. Forbes. The gentleman yields back the balance of his 
    The gentleman from California, Mr. Hunter, is recognized 
for 5 minutes.
    Mr. Hunter. Thank you, Mr. Chairman.
    I am going to get parochial stuff out of the way first. You 
just talked about MLP/AFSB [Afloat Forward Staging Base]. I 
think there is a 3- or a 2-year gap at NASSCO [National Steel 
and Ship Building Company] where they are in a trough over the 
next 2 years, and they are talking about getting lead-time 
funding for the second MLP.
    Are you familiar with that, Mr. DiLisio? Any thoughts on 
    Mr. DiLisio. I am familiar with the discussion. I would 
probably take that one for the record, in that it was----
    Mr. Hunter. Please.
    Mr. DiLisio. [continuing]. More appropriate for the 
Secretary to answer that one than me.
    [The information referred to can be found in the Appendix 
on page 65.]
    Mr. Hunter. No, I think it is appropriate for you, because 
it is a Navy ship. It is not a transportation ship. But 
    Mr. DiLisio. No, I mean the Secretary.
    Mr. Hunter. Oh, the Secretary of the Navy. Yeah. Okay. We 
will get him in here.
    Number two, I want to thank the chairman for doing this. I 
think this is one of the most important things we have that we 
do here, and we are facing a time in Congress right now where 
people don't understand why you have cargo preference. We are 
fighting food aid cargo preference. Ex-Im [Export-Import] Bank 
goes away; that is cargo preference. These numbers are going to 
drop and this is how America goes to war.
    When America has to go to war, it uses these ships every 
single time. This is how I went to war. In 2004, I actually 
loaded a RO/RO [Roll-on/Roll-off] in San Diego. I was the 
embarkation officer, some horrible title that the newest guy 
gets. That was me. Anyway, drove everything down, got on the 
RO/RO, we unloaded it in Kuwait and went up into Iraq in 2004. 
So this is important, and I think Mr. Runyan alluded to this, 
it doesn't seem like it is sustainable.
    You said, Admiral, you don't have a timeframe on the 60-
ship study. Is that right or no?
    Admiral Brown. On the 60-ship study, I don't think I----
    Mr. Hunter. Am I talking about the right study? The report 
on 60-ship requirement U.S. TRANSCOM is doing. I thought Mr. 
Larsen just asked and you say you don't have it?
    Admiral Brown. Well, the study that I think you are 
referring to is one that OMB [Office of Management and Budget] 
has asked for that is going to look at the----
    Mr. Hunter. Okay. Do we have that one?
    Admiral Brown. We are working on that, sir, and we should 
have the results of--and that won't just focus on the 60-ship 
requirement. It will look at the entire industry and see what--
    Mr. Hunter. Is that going to play into the strategy that 
    Admiral Brown. That will be going into that, too, sir.
    Mr. Hunter. Okay. Let me see. Talking about military useful 
RRF [Ready Reserve Force] ships. The Navy had said that they 
have some requirement policy changes that would have to go into 
effect to stop simply building or maintaining the RRF fleet but 
building new RRF ships that are basically dual use.
    So to both Admiral and Mr. Jaenichen, what is happening 
with that? Are you familiar with that, dual-use RRF ships?
    Mr. Jaenichen. I am. In fact, I had a discussion with the 
Department of Navy yesterday on that specific issue, and we are 
looking at how we might be able to do that. One of the 
challenges that we saw in the dual-use component of that is how 
you use them in civilian trade and then be able to pull them 
back because the civilian sector from a Marine highway or 
however we would employ them don't necessarily have the ships 
to backfill.
    Commercially, if you were a company, typically you will 
have four or five ships in a liner-type service. If you pull 
one out you might still be able to----
    Mr. Hunter. But the RRF is only used in time of actual war, 
    Mr. Jaenichen. That is correct.
    Mr. Hunter. So you would say, hey, stop this route, you are 
going to go to war?
    Mr. Jaenichen. Correct. And so the question is, does that 
make it economically viable going forward? Because once the 
shippers don't have cargo----
    Mr. Hunter. But they get paid by the government during the 
time they were used as RRF, right?
    Mr. Jaenichen. Maybe, but then the question is, is do the 
shippers come back when the ships are done doing what they are 
doing in terms of their activation? That is one of the 
challenges that we are looking at from that standpoint.
    Admiral Brown. Sir, can I add that you also have to look at 
the size of those vessels, would they truly be military useful. 
And so if they are too small, we are talking about, you know, 
moving BCTs [brigade combat teams] not, you know, platoons 
    Mr. Hunter. Right. Okay.
    Mr. Jaenichen. Mr. Hunter, to the admiral's point, what we 
have found in all of our studies is the type of ships that were 
available to be able to use in some kind of a Marine Highway 
Program are either self-propelled barges or articulated tug and 
barges kind of things to be able to move that equipment. Those 
are not necessarily the most militarily useful, but they would 
be the best in the commercial program if we were looking at it.
    Mr. Hunter. The Navy also had, and this ties along in with 
this, the Navy did have proposals--I haven't seen those 
specific proposals--on how to at least start using dual use. 
But have you started using those? Have you started implementing 
them? I mean, are you looking at them, or we are not sure yet?
    Mr. Jaenichen. No. In fact, what we have talked about is 
what kind of legislative proposals, what kind of policy----
    Mr. Hunter. There have to be policy changes, right?
    Mr. Jaenichen. There would be some policy changes that are 
    Mr. Hunter. Like what?
    Mr. Jaenichen. Well, as we take a look at it, how do you 
make the funding stream be able to work that? How do you make a 
stipend payment work? For example, some of the investment that 
would be required to be able to build those ships has to come 
from somewhere, and the question is, is where did it come from 
without sacrificing a port of the surge sealift capacity that 
is currently there?
    Mr. Hunter. You would stop maintaining the RRF fleet and 
simply build new ones. You would use the maintenance fund, 
    Mr. Jaenichen. And then we would start taking risk on the 
ships if they were activated during the period of time as we 
ramp up, in terms of how--so we have to evaluate how we would 
do that. Then, obviously, there is some legislative changes. As 
you know, in order to recapitalize the Ready Reserve Force 
there is a U.S.-build requirement to be able to support that 
    Mr. Hunter. Thank you, all. Appreciate it.
    Thank you, Mr. Chairman.
    Mr. Forbes. I think the gentleman from California raises 
some good points that all of you gentlemen, I think, agree 
with. And the main thing is that this myth that this is a 
faucet that we can turn on and turn off is just not accurate, 
because as the ships get reduced, also our industrial base to 
repair the ships get reduced.
    And, Mr. Jaenichen, as you pointed out, then our workforce 
suffers and it takes you about 10 years just to train one 
captain to be able to handle one of these ships.
    Mr. Courtney, you are recognized for 5 minutes.
    Mr. Courtney. Thank you, Mr. Chairman. Actually, your 
comment sort of, I think, segue into my question for Mr. 
    Again, your written testimony refers to the fact that MARAD 
is working on developing a national maritime strategy with 
stakeholders. Again, when we look at the U.S.-build 
requirements which you just talked about and the impending, you 
know, aging-out of the existing fleet, along with, again, a lot 
of the other issues that have come up in the question.
    Maybe you can just sort of step back and talk a little bit 
about this national maritime strategy, you know, what is 
happening with it, how you visualize it unfolding, because I 
think at some point I think a lot of us need to get our heads 
around that to work with you.
    Mr. Jaenichen. Thank you, Mr. Courtney, for the question.
    First, in the development of the national maritime 
strategy, we have actually had two strategy symposiums. The 
first one was done in January. It was specifically focused on 
the international trading fleet, which is where I have my most 
concerns, because that affects the mariner pool that is used by 
both the strategics on the commercial side and also on the 
surge sealift side.
    The second one we did in May and that was focused on the 
inland industry. It was also focused on shipyards, and then we 
had some cross-cutting themes of labor and environmental and 
those kinds of things. We also focused on that particular one 
on port and port infrastructure.
    What we have done so far is we have drafted a strategy. We 
have created a document that provides a number of options. On 
the 14th of August I am going to share that with the Marine 
Transportation [System] National Advisory Council [MTSNAC] to 
get their recommendations and once we have had an opportunity 
to work with them to try to sort of dig into the actual details 
of the options that are available, our intent would be that we 
would then open it up for public comment later this year after 
we have had a chance to do that.
    But our first meeting with this national advisory council 
that we have, MTSNAC as we refer to them, is going to happen on 
the 14th of August.
    Mr. Courtney. So, again, to take it to the next step, 
public comment occurs. I am sure there is going to be a lot of 
comment. I mean, is there going to be a window of time for 
that, and then there will be sort of a final-final as far as 
some kind of document that will get generated?
    Mr. Jaenichen. Yes. And our proposal would be that we would 
have some kind of a strategy that has been vetted and we 
resolve the public comments by the end of this year. I think we 
need to be able to provide the new Congress an opportunity to 
work on these particular issues, and there is a number of them 
from policy to legislation.
    I mean, there is a whole host of possible options. Some of 
them are much harder than others to be able to accomplish, but 
it is going to have to be done in some way, shape, or form, 
because I think we are at that point where we have to do 
something about the maritime industry in this country.
    Mr. Courtney. And I would assume that, you know, the topic 
we are talking about today is going to at least be part of that 
overall strategy. Is that a pretty safe assumption?
    Mr. Jaenichen. In fact, as I talked about before, the floor 
of our strategy in terms of the ships that are required to be 
under U.S. flag is really a DOD requirement to be able to make 
sure that they have the capacity to be able to support national 
security. We would obviously like to be well above that, 
because as you get sort of the to the line, you start assuming 
more risk and I don't think we want to be in a situation where 
we risk not being able to globally project power through our 
Armed Forces, and that is one of the reasons why this strategy.
    So the sealift strategy that is a component of the national 
maritime strategy is something we are closely coordinating with 
TRANSCOM and Navy in terms of how you would essentially 
structure that to be able to support. You know, obviously, we 
have to take a look at what future requirements will be because 
that will dictate the size of that U.S.-flag fleet.
    Mr. Courtney. So, again, looking forward to the 114th 
Congress, we are talking January, February, March, something in 
that timeframe in terms of the Seapower Committee having the 
opportunity to sink, you know, their teeth into it?
    Mr. Jaenichen. That would be my intent.
    Mr. Courtney. All right. Thank you.
    I yield back.
    Mr. Forbes. Gentleman yields back.
    Mr. Johnson is recognized for 5 minutes.
    Mr. Johnson. Thank you, Mr. Chairman.
    Mr. DiLisio, how did the Department determine the cost of 
the procurement of the T-AO(X)?
    Mr. DiLisio. Basically, we did a complete study of the 
current oiler base, the Kaiser class, to determine what pieces 
of the Kaiser class gave us our acceptable requirement set. We 
took the Kaiser class, increased some of the freeze chill 
[cargo-carrying] portions, increased the lift so we could 
handle heavier lift, readdressed speed requirements so we have 
an array of different speed requirements that we went and 
looked at which would bring you different propulsion sets.
    So basically, we are looking at what does a carrier need to 
take oil and provisions? What does the rest of the [carrier] 
strike group need? So you get a strike group answer, you get an 
ARG [Amphibious Ready Group] answer, and then you get basically 
a rest-of-the-strike-group answer. So we were looking kind of 
at middle of the road. We have a very good class of ships right 
now in the Kaiser class, so we didn't have to go too far from 
the Kaiser class to get to something that we liked.
    Then we want to use the competition in the industry to take 
us the rest of the way with some interesting ideas on how to 
manage energy, get the O&S [operations and support] cost down 
and see if we can get the number of mariners down, as well. So 
basically, we are pretty happy with our current oiler. What we 
are looking for is something new, something as fast as we could 
get it that could do multiproduct and continue the workhorse 
development that we currently enjoy.
    Mr. Johnson. Does the cost reflect the balance of cost and 
capabilities of the T-AO(X)?
    Mr. DiLisio. Right now, we have it right around $680 to 
$690 million for the one that we have got a draft CDD 
[Capability Development Document] for as we sit here right now. 
I think we will hold right there with that amount, so I don't 
think we need to go any higher than that to meet our current 
requirements. So I think I am pretty comfortable in telling you 
that we are ready to start as soon as we get through joint 
staffing with our CDD, and we are not far from a 2016 start 
with the current requirements we have, very comfortable with 
    Mr. Johnson. If ship capabilities exceed program costs, 
will the Department cut back on operational requirements?
    Mr. DiLisio. As I am sitting here now, they don't, and I 
don't expect that they will because the things that would have 
stressed the current oiler were things like a heavier lift 
capability so that we could send greater loads of cargo between 
ships. I believe we have that covered. We have the ability to 
land aircraft that we need to be able to land and refuel on 
that deck, which is another new requirement above and beyond 
Kaiser class. I think we have that covered. So I am pretty 
comfortable right now that is a tradeoff we don't have to make.
    Mr. Johnson. Thank you.
    Can you explain how the Department, Mr. DiLisio, intends to 
conduct competition to build the T-AO(X)?
    Mr. DiLisio. Yes, sir. We will put out an RFP [request for 
proposal] with the requirements for the oiler in it. There will 
be areas where the bidder will be able to associate bill of 
material selections and/or arrangements. It is a commercial-
base ship, so there is a couple of very good offerors out there 
that know a lot about building these commercial ships. So they 
will be able to handle the bill of material as they put their 
competitive pricing together, and we will take the best value 
between capability and price once we get a chance to see those 
    Mr. Johnson. Now, do you anticipate that multiple teams 
will be used to build the ship? And also, if you could give me 
some idea of your potential bidders?
    Mr. DiLisio. I believe we have qualified builders out there 
that will--I mean, I would not want to presuppose how they 
would go about bidding this, because primarily that is their 
own business strategy, so I wouldn't want to get in and try to 
predict how they may come at this piece of the business. But 
the industrial base is fully capable of building them, so I 
expect multiple bidders.
    Mr. Johnson. Thank you.
    Vice Admiral Brown, does the U.S. have enough commercial 
and organic capacity to meet your requirement?
    Admiral Brown. Sir, thank you for the question.
    We do right now. However, we, in our organic surge fleet as 
well as our commercial capacity, but as we discussed a little 
bit earlier, we are concerned that we may be coming closer to a 
tipping point where our ability to man some of the surge fleet 
would be at risk if we lose additional international trade, so 
that that is our main concern right now. The other piece is, as 
I discussed, is our recapitalization plan that we have to put 
in place here in the near term.
    Mr. Johnson. Thank you.
    Mr. Chairman, I yield back.
    Mr. Forbes. Gentleman yields back his time.
    And Mr. Garamendi is recognized for 5 minutes.
    Mr. Garamendi. Mr. Forbes, thank you so much for the 
courtesy of allowing me to join your hearing. Mr. Hunter and I 
share responsibility on the Coast Guard maritime and therefore 
this discussion is very relevant to that as well as to the 
Armed Services Committee, so thank you.
    A whole series of questions have been asked, many of which 
I would have taken up, but the Ready Reserve Fleet and the 
recapitalization of it, I think, Admiral Brown, you and Mr. 
Jaenichen have talked about a timing and a proposal that you 
are going to be putting together to deal with that piece of it. 
Could you explain that in a little more detail?
    Admiral Brown. Sir, right now our commitment from the Navy 
is to put together a plan that would first be introduced in the 
fiscal year 2017 budget.
    Right now, there is not a requirement in the 2015 or 2016 
budget, but we have to work out the details of the eaches of 
each ship that would be retiring and have a replacement square 
footage for those vessels.
    Mr. Garamendi. Okay. So that would include not only the 
design of the ship, the cost of the ships, when that money 
would be necessary, when the construction would take place. 
Does it also include the issue of refurbishing or refitting the 
existing ships?
    Admiral Brown. Yes, sir. If we decide to execute and extend 
its service life of some of the vessels that could be aging 
out, we would require investment to extend the life.
    Mr. Garamendi. So we are going to be faced with a 
significant budget and appropriation issue here as this comes 
online; it's not now in the process, it is not in the plans 
going forward. Is that correct?
    Admiral Brown. Right. It is not currently in the plan, but 
we have commitment from all the parties that we need to develop 
that plan.
    Mr. Garamendi. Okay. Does that include the Army?
    Admiral Brown. The Army is a part of that discussion, yes, 
    Mr. Garamendi. I would think so, unless they decide to----
    Admiral Brown. They are a major customer of sealift, yes, 
    Mr. Garamendi. Mr. Jaenichen, could you also address that 
same question?
    Mr. Jaenichen. Well, one of the things I think that we have 
to take a look at is in addition to the recapitalization, we 
are going to have to collectively take a look at what the 
requirement is.
    And your point about the Army, I think, is a critical one 
in terms of what we have to lift and how we would have to lift 
it to be able to support the Department of Defense's 
operational planning and so as we take a look at the ships, the 
admiral talked about the eaches. You know, for example, several 
of the ships we had, the majority of them that are in the Ready 
Reserve Force are Roll-on/Roll-off type vessels. And so some of 
the replacement vessels that we may take a look at might be 
larger and have more capacity.
    In the admiral's written statement, he talks about the fact 
that the RRF has about 1.6 million square feet of capacity that 
will potentially go out of service and age out at the 50-year 
point within the next decade, and we have to think about, you 
know, how we do that. So for example, we may have, you know, 
two or three ships that age out, but you could replace it with 
one and have similar capacity. So we have to think about all of 
those things together.
    Mr. Garamendi. Since this particular issue bridges two 
committees, two very different committees, it would be very 
helpful to me, and I suspect to our committee, Mr. Hunter's 
committee, to work with you between now and 2017 budget 
proposal, so that we can be aware and provide whatever insight 
we might have.
    This next question goes to Mr. Jaenichen and it has to do 
with the incentives that do exist in current law Title XI, the 
CCF [Capital Construction Fund] program, the small shipyard 
grant program. How does that integrate into what we are 
discussing here on this Ready Reserve and the MSP program?
    Mr. Jaenichen. The Title XI program is really a commercial 
ship loan guarantee program. Currently, we have--as part of 
carryover--we have not approved an application since 2011. We 
are in the process of approving several. We have about $73 
million in carryover, which supports about $750 million or so 
of loan applications. So we are actually in good shape in terms 
of what we have currently in the queue.
    However, right now there are 30 vessels that are currently 
on order, under construction, that includes tankers, 
articulated tug and barges, large ocean-going supply vessels 
and container vessels, and some of these are LNG [liquefied 
natural gas] powered, as you know, that are being built down in 
NASSCO [National Steel and Shipbuilding Company].
    We know that there are more applications that will be 
coming, and so we will have to evaluate how Title XI would be 
funded going forward to be able to assure that we can support 
    Mr. Garamendi. Do you personally have constraints--do the 
constraints, are they going to limit your opportunities or the 
opportunities of shipbuilders?
    Mr. Jaenichen. You are talking about constraints in the 
funding that we have available?
    Mr. Garamendi. The amount of money.
    Mr. Jaenichen. We may be at that point here within the next 
15 to 18 months depending on the applications and again, the 
applications that come in, we have to, you know, validate 
through a very rigorous process their financial viability, 
financial soundness to be able to get to the point where we can 
actually guarantee that loan.
    Mr. Garamendi. Yeah. As a guest to this committee, I am 4 
seconds over.
    Mr. Forbes, thank you for the courtesy.
    Mr. Forbes. I thank the gentleman for his questions.
    I think all of our Members have asked their questions. As I 
mentioned at the beginning, I deferred my questions just to 
have a few for you for the record if we could ask them.
    The T-AOEs are the Navy's largest and fastest logistics 
ships. The Navy has proposed to reduce two of the four ships 
that each have over 10 years of service life remaining. Former 
strike group commander Rear Admiral Tom Shannon suggested that 
the T-AOs and the T-AKEs inability to keep up with carrier 
strike groups would be a significant problem.
    From a warfighting perspective, from how we operate and 
exercise, from one-stop shopping from one ship as opposed to 
bringing along two slower ships, I just think keeping the T-
AOEs is a very practical way to go.
    Mr. DiLisio, from a warfighting perspective, how does a T-
AOE fit into our ability to project power? Will the reduction 
in T-AOEs impair ability to project power? And how will our 
ship logistics be changed as a result of the introduction of a 
less-capable platform?
    Mr. DiLisio. Thank you, Mr. Chairman. It is no surprise to 
me that a strike group commander would want an AOE as the 
fastest ship because it does make things a little easier. The 
time alongside for an AOE replenishment of a carrier is about a 
6-hour evolution. That evolution can--I am sorry, a 4-hour 
evolution, pardon me. The AO and AKE pair will do the same 
evolution in about 6. So the capability is there; it may not be 
the preferred capability, but the existing force is actually 
matched up pretty well to do those types of replenishments at 
sea. The 2-hour loss----
    Mr. Forbes. Isn't that once they arrive?
    Mr. DiLisio. In most cases, they are already in theater 
waiting, because they are forward-hubbed. These are not 
necessarily having to keep up with the race across the oceans. 
All of the oilers and AKEs are forward-hubbed, so they can be 
preplaced, so it is a matter of understanding and being able to 
manage the battle space. That is one piece.
    The second piece is, we still need to come through an 
analysis we are actually in right now with fleet commanders to 
make sure that we have got that right. As I am sitting here 
today, we have not made that decision. We are still discussing 
it. They get a vote in that position. There are only four AOEs 
as we sit here right now. They don't enjoy any more protection 
of themselves than an oiler or an AKE does in a theater of 
battle, and when you get into a more stressful situation, you 
need 14 oilers to take care of that situation.
    So this is really not just about AOEs, it is about the 
total force and whether or not you can bring the amount of 
oilers to bear on a most-stressing scenario which is 14; and in 
peacetime, it is actually the inverse of what you might think. 
In peacetime, the oiler demand is actually higher because we 
disperse the force in a greater regard across the globe. So 
when you have a wartime scenario you are very focused, which 
allows you to keep a smaller number of tankers in the mix. 
Peacetime, they are everywhere.
    And so right now, even if we were to get rid of the two 
AOEs, we would have enough tankers to go perform the missions 
we need to with little to no surge we would be right on the 
    And again, I am not surprise that Admiral Shannon would 
want an AOE. It is a very capable vessel, but it also carries a 
very capable and impressive O&S cost.
    Mr. Forbes. Admiral, you have just heard what Mr. DiLisio 
has said, that he wasn't surprised that a strike group 
commander would want a particular asset. We often hear that 
with our COCOMs [combatant commanders], when we look at their 
requirements in this gap that is being developed between what 
they are asking and what we are actually giving them. And 
oftentimes when we ask that question, we hear a similar 
response, so I am not surprised that the COCOMs would want all 
    What is your feeling in dealing with COCOMs on a regular 
basis, and our strike group commanders? Are they asking 
unreasonable things, or are they pretty much on the mark? And 
then the other part of that is, if sea control will be 
increasingly contested in the coming decade, should we 
reconsider the need to build a T-AOE(X), or at least replicate 
this capability as was planned earlier in the last decade?
    Admiral Brown. Sir, thank you for your question.
    Working with the COCOMs is something that we do every day 
in our planning. As you know, the demand around the world for, 
I would call them smaller contingencies, has actually gone up. 
So the COCOMs in my experience that have been stationed at 
EUCOM [European Command] do not ask for over what they think is 
necessary, so it is a natural tension. We are in the process of 
looking at different ways of providing forces forward.
    So there will be an ongoing discussion with the COCOMs 
about forward-deployed assets and what they ask for. But in 
general, I think, they are not asking for things that they 
personally feel are not required for executing their plan. And 
one of the advantages that TRANSCOM has is we are able to pool 
our assets and swing from one COCOM to the other rather 
quickly. So by assigning the forces in the pool, that is 
somewhat of an advantage to be able to swing quickly.
    With regard to access, anti-access in future fights and 
whatnot, we would in the scenarios that we look at, we would 
definitely need, if we were going to take a major combat 
operation and go forward to a location with our reserve surge 
fleet, we would have to have at least a semi-permissible 
environment so we would have to set the conditions to do that 
ahead of time. And we have done that in the past, in history, 
and we would have to continue to do that in the future. So in 
terms of protecting ships as they go across, we, just so you 
know, we don't have a lot of attrition built into our modeling. 
So that is not something that we really build in there. So we 
would have to----
    Mr. Forbes. We have heard some testimony before this 
subcommittee that perhaps as we look at what the Russians are 
doing now, the Chinese are doing, maybe that assumption we have 
had over the last decade or two that we were going to have 
those permissive environments may at least need to be relooked. 
Do you disagree with that testimony, or would you----
    Admiral Brown. I concur, I would say they are being 
relooked and they are being exercised. And we stay plugged in 
with the COCOMs during all those exercises.
    Mr. Forbes. Okay. Last year, the Navy placed one of three 
maritime prepositioning squadrons, which specifically supported 
the European commander, in layup. This reduces the flexibility 
of the combatant commander from having Marine Corps equipment 
available in Europe in case of a major Marine Corps deployment. 
Can you quantify the loss of the European Command maritime 
prepositioning squadron on the ability of EUCOM to project 
forces in Europe?
    Admiral Brown. Sir, those, the ships that were involved 
there, they remain in our surge capability. So from a square 
footage standpoint, we maintain the same amount of square 
footage. So by bringing those forces back to the United States, 
it adds somewhere around two weeks or so to our ability to 
surge to that requirement should we need to in the future.
    Mr. Forbes. Admiral and Mr. DiLisio, during the Cold War, 
Combat Logistics Force ships were manned by U.S. Navy sailors 
and armed with defensive systems to protect against air and 
surface threats. Are there significant cost savings to the 
current MSC [Military Sealift Command] model if the blue waters 
become contested and the U.S. Navy is going to once again have 
to fight for command of the seas, should we be considering 
recommissioning a select group of Combat Logistics Force ships 
back to the United States Navy?
    Mr. DiLisio. Thank you, Mr. Chairman.
    You have acknowledged the cost differential. Their cost 
would be very large. The current AOE does not enjoy any self-
defense weapons either. What we would need to do is, one, 
continue to recapitalize our Kaiser class oilers because they 
are about end of service life anyway, and we are going to have 
to start capturing data on their performance. There is always a 
tradeoff between whether or not the escort can provide that 
coverage or whether the ship has to provide own ship coverage, 
and I think we have to go look at those trades.
    Right now, survivability is being studied, and I believe we 
have done some briefing on carrier survivability and the CLF 
[Combat Logistics Force] survivability right alongside. Right 
now, we enjoy escort-type protection, and so we would have to 
come through that conversation that said either that wasn't 
good enough or we wanted to do something in addition or 
something layered. We don't have any plans currently to do 
    Mr. Forbes. Okay. I indicated to all three of you before 
that at the end we were going to give you any time you needed 
to add to the record whatever you think we have not asked or to 
clarify anything that you feel was perhaps misrepresented.
    So if at this time we could do that, and Mr. DiLisio, why 
don't we start with you and we will work back, if that is okay.
    Mr. DiLisio. Thank you, sir.
    Two things and I will be brief. My comment on the strike 
group commander is but one strike group, and there is a 
worldwide balance of Combat Logistics Force necessary. So the 
balance, and you will find Rear Admiral Shannon as the head of 
Military Sealift Command today, is now challenged with his 
global force management and supply across the entire world, not 
just one strike group. So I wasn't trying to insinuate that he 
has asked for something that he should not get, but that asset 
may be somewhere else in the world inventory, and there is 
usually more than one thing going on at a time. That was one.
    Secondly, the entire conversation that we have had about 
sealift has been primarily in the surge and sustainment 
shipping area. What I would propose, and what my partners and I 
have talked through, is getting the services to the table to 
talk about how we address prepositioning, how we intend on the 
sharp end of the stick to perform and deploy forces, has a lot 
to do with how we then surge behind it and how we replenish and 
how we do sustainment operations.
    So I introduced in my oral statement three different 
disciplines that we need to think about in this regard, and not 
just buying a one-for-one replacement for square footage on the 
surge side of this.
    So if investment is tight, we need to make sure across this 
entire three-tiered formula that we have got the investment 
right and we put it in the right place.
    Thank you, sir.
    Mr. Forbes. And I didn't mean to indicate that you were 
belittling the strike group commander's comments. But I did 
want to make it clear, because we hear this oftentimes as we 
are doing all this dismantling of the military, when they come 
and they say, no, this is acceptable risk, et cetera, and when 
we say, well, the COCOMs are telling us this or the strike 
commanders are telling us this, it is kind of like they get 
poo-poo'd like, you know, they just reach for the sky.
    That really isn't true because if all the stuff breaks 
down, they are the guys we are looking to to make sure that we 
are winning these conflicts, and I think we need to pay 
attention to what they have to say.
    Mr. Jaenichen.
    Mr. Jaenichen. Thank you, Mr. Chairman.
    First of all, I would like to just point out that the U.S. 
Merchant Marine, both the vessels and the mariners, are a 
national asset. As we take a look at the ability to project 
forces globally, it requires a capable U.S. Merchant Marine 
both from a standpoint of having vessels that can do it and the 
mariners that are able to be there, and so we need to have that 
    We can invest billions in infrastructure, but one of the 
critical components is the number of the mariners to man that 
infrastructure, that equipment to be able to do that. And we 
want them sailing commercial, if it is possible to be able to 
do that. We don't want to be able to maintain them in a 
reserved capacity and then man them up and spool them, as you 
talked about, opening the faucet. It is better to have them 
trained and operating all the time than it is to be able to 
keep them in reserve status and hope they are ready when the 
time comes.
    We talked a little about the Maritime Security Program. 
That program is under pressure. The House has proposed a $20 
million cut to that program of $186 million. That $20 million 
cut equates to essentially the loss of about seven ships in 
that program and the reason I state seven is because it is a 
delta between 18.6 and 21.7, which is the $3.1 million a year, 
which is the annual stipend amount.
    That force of 60 ships supports 2,700 mariners. As we have 
talked about throughout this testimony, the mariners are the 
critical component of this. Those 7 ships, if you lose them, 
you lose, you know, 280 sailing mariner jobs. We need them.
    The other thing that we talk about in terms of the MSP is 
the infrastructure land side logistics that is provided by that 
fleet of commercial ships. So we want to make sure that we are 
able to maintain them viable in the commercial trade as well as 
being able to have preference cargo and support sealift 
requirements for sustainment for the Department of Defense.
    With the cargos reducing, specifically on the DOD side, 
which historically, at least over the last decade or so, has 
provided about 87 percent of the revenue for the U.S.-flag 
fleet and about 70 percent of what I would call the total 
capacity in terms of dry bulk cargo that has been moved on 
these ships. With that reducing, we have to evaluate how you 
keep those ships viable in the program.
    As I talked about in my testimony, the levers that are 
available to us are to identify ways to get additional 
commercial cargo. They are competing against foreign-flag, 
which their cost on a daily average could be as low as $5,000 a 
day; for a U.S.-flag it is $18,000 to $20,000 a day. That is a 
very difficult delta to make up.
    And so the other lever we have is the stipend amount, and 
that has to be considered to be able to ensure that we have and 
are able to maintain this fleet viable and capable to be able 
to serve us from a national security standpoint.
    Mr. Forbes. Mr. Jaenichen, as I think you have also pointed 
out very clearly, there is a domino, a ripple effect with all 
of this. As you have fewer ships, you lose actually some of the 
repair capabilities in the industrial base to fix other ships, 
and then you create a culture that is difficult to get the 
workforce that you need to have in to do the job that you need 
to have done.
    So Congressman Hunter and I were talking before he left 
about trying to do something jointly, working with you to make 
sure we help fill those gaps.
    So thank you for the good work you are doing.
    Mr. Jaenichen. Thank you, Mr. Chairman. Appreciate it.
    Mr. Forbes. Admiral, we will give you the last word.
    Admiral Brown. Sir, first, thank you for your committee 
taking the interest in talking to us.
    I think one of the concerns that we continue to have is, 
that we didn't discuss, is the Budget Control Act potential 
there that would have impacts across many, many programs, but 
it definitely would impact our surge fleet, as well, and I 
don't think Mr. DiLisio could work miracles in that situation. 
He has up to this point.
    Sir, TRANSCOM has to be ready 24/7 to be able to react to a 
small contingency or a large contingency. We are adequately 
positioned to do that today, and we appreciate the support that 
we get from you in that regard. Our requirement has not 
significantly changed because we are coming out of Afghanistan. 
We have to maintain the capacity that we have currently.
    Mr. Jaenichen mentioned the need to ensure we fully fund 
the MSP program and we talked about the recapitalization plan 
that we have to come back to the committee with in the near 
    And lastly, I would like to conclude by thanking the 
maritime industry, the mariners that sail every day 
commercially and, you know, on our organic fleet in the Navy. 
They truly are our heroes, and they allow TRANSCOM to do our 
job every day.
    So thank you very much, sir.
    Mr. Forbes. Admiral, and both of you, gentlemen, thank you 
so much for your service to our country. Thanks for sharing 
this time with us, and we look forward to working with you in 
the future.
    And if there is no additional comments or questions, we are 
    [Whereupon, at 3:09 p.m., the subcommittee was adjourned.]


                            A P P E N D I X

                             July 30, 2014




                             July 30, 2014





                              THE HEARING

                             July 30, 2014



    Mr. DiLisio. Mobile Landing Platform (MLP 3) is being built as an 
Afloat Forward Staging Base (AFSB) variant. MLP 3 AFSB is currently 
under construction at NASSCO and is expected to deliver in Fiscal Year 
(FY) 2015. The second MLP AFSB, MLP 4 AFSB, is planned to be awarded to 
NASSCO in 2014. The President's Budget submittal for FY 2015 includes a 
third MLP AFSB, MLP 5 AFSB in FY 2017 but did not include advanced 
procurement funds for the ship.   [See page 11.]



                             July 30, 2014



    Mr. Forbes. If sea control will be increasingly contested in the 
coming decade, should we re-consider the need to build a T-AOE(X), as 
was planned earlier the last decade?
    Admiral Brown. If built, the T-AOE(X) Fleet Oiler would be managed 
by the Military Sealift Command, through U.S. Navy operations. 
USTRANSCOM would have no operational control of T-AOE(X) assets. The 
Navy is in the best position to provide information concerning building 
a T-AOE(X).
    Mr. Forbes. Today, the U.S. military has a selected set of supply 
depots and refineries overseas. Does the Navy's logistic ship 
requirement reflect the likelihood that the fleet may need to depend on 
a larger number of geographically dispersed refineries and depots 
ashore in a conflict?
    Admiral Brown. USTRANSCOM does not have operational control or 
influence on how the U.S. Navy logistically supports the fleets. The 
Navy is in the best position to provide information about the U.S. 
Navy's logistic ship requirement.
    Mr. Forbes. The advent of longer range threats to carrier strike 
groups (like the DF-21D, advanced conventional submarines and long-
range aircraft armed with advanced anti-ship missiles, etc.) suggests 
that in the future carrier aircraft may need to conduct high-intensity 
operations much farther from their targets than they have in the past. 
Has the Navy analyzed the impact of such operations on the demand for 
logistic ship support to carrier strike groups, and if so what did it 
    Admiral Brown. The demand for fleet logistics ships in support of 
U.S. Naval Forces underway is an internal U.S. Navy issue. USTRANSCOM 
does not conduct analysis on the demand for logistic ship support to 
carrier strike groups. U.S. Navy would be in the best position to 
answer this question.
    Mr. Forbes. Today, the U.S. military has a selected set of supply 
depots and refineries overseas. Does the Navy's logistic ship 
requirement reflect the likelihood that the fleet may need to depend on 
a larger number of geographically dispersed refineries and depots 
ashore in a conflict?
    Mr. DiLisio. The Navy's logistic ship requirement reflects the 
number required to support the Global Force Management Allocation Plan 
(GFMAP). GFMAP presence values are based on the SecDef approved 
assessment of combatant ship presence required in theaters for national 
defense and other priorities. Based on these combatant presence 
requirements, Navy Fleet commanders determine the CLF ship presence 
needed in each theater to support this force. Fuel refinery and depot 
locations are important variables among others that, in the aggregate, 
determine the requirement. Working with other DoD entities (e.g., 
Defense Logistics Agency), the Navy constantly reviews options to 
ensure appropriate support is in place to meet requirements. As policy 
and plans evolve, the numbers (and locations) may change.
    Mr. Forbes. On June 23, 2014 the Navy responded to a HASC inquiry 
pertaining to the current status of the LMSR Crane Control Upgrade 
Program. The Navy response indicated that additional Pier-side and 
Afloat testing of the CC3000 crane control system were expected as part 
of the next phase of the program. The response stated that the Navy was 
currently developing a work package and contract award to support an FY 
15 shipboard installation and testing of the CC3000 control system on a 
full ship set of four cranes (two twin pedestal cranes). Will this 
installation and testing be implemented with FY 14 funding and executed 
within CY 2015?
    Mr. DiLisio. Efforts to test the CC3000 crane control system have 
been put on hold pending identification of funding. Navy will monitor 
commercial progress of the technology for future potential application.
    Mr. Forbes. We understand that the targeted ship for this 
installation and testing is the USNS Sisler. What is the current status 
for executing this installation and testing on the USNS Sisler?
    Mr. DiLisio. Efforts to test the CC3000 crane control system have 
been put on hold pending identification of funding. Ship to be used for 
installation and testing has yet to be identified. Navy will monitor 
commercial progress of the technology for future potential application.
    Mr. Forbes. If the installation and testing are successful, what is 
the Navy's plan for installing the CC3000 upgrade across the LMSR 
    Mr. DiLisio. Efforts to test the CC3000 crane control system have 
been put on hold pending identification of funding. Navy will monitor 
commercial progress of the technology for future potential application. 
All current and future efforts will continue to balance the need to 
keep existing cranes in service and capable of performing their mission 
against components that become obsolete for missions that require 
greater control for more complex lifts.