    [Senate Hearing 113-108, Part 7]
    [From the U.S. Government Publishing Office]

                                                     S. Hrg. 113-108, Pt. 7

    DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR
                   2014 AND THE FUTURE YEARS DEFENSE PROGRAM

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

                                    HEARINGS

                                   before the

                          COMMITTEE ON ARMED SERVICES
                              UNITED STATES SENATE

                        ONE HUNDRED THIRTEENTH CONGRESS

                                 FIRST SESSION

                                       ON

                                    S. 1197

         TO AUTHORIZE APPROPRIATIONS FOR FISCAL YEAR 2014 FOR MILITARY
    ACTIVITIES OF THE DEPARTMENT OF DEFENSE, FOR MILITARY CONSTRUCTION, AND
       FOR DEFENSE ACTIVITIES OF THE DEPARTMENT OF ENERGY, TO PRESCRIBE
       MILITARY PERSONNEL STRENGTHS FOR SUCH FISCAL YEAR, AND FOR OTHER
                                    PURPOSES

                                   ----------

                                     PART 7

                                STRATEGIC FORCES

                                   ----------

                        APRIL 17, 24; MAY 7, 8, 9, 2013

             Printed for the use of the Committee on Armed Services
    DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR
      2014 AND THE FUTURE YEARS DEFENSE PROGRAM--Part 7  STRATEGIC FORCES

                                                      S. Hrg. 113-108 Pt. 7

    DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR
                   2014 AND THE FUTURE YEARS DEFENSE PROGRAM

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

                                    HEARINGS

                                   before the

                          COMMITTEE ON ARMED SERVICES
                              UNITED STATES SENATE

                        ONE HUNDRED THIRTEENTH CONGRESS

                                 FIRST SESSION

                                       ON

                                    S. 1197

         TO AUTHORIZE APPROPRIATIONS FOR FISCAL YEAR 2014 FOR MILITARY
    ACTIVITIES OF THE DEPARTMENT OF DEFENSE, FOR MILITARY CONSTRUCTION, AND
       FOR DEFENSE ACTIVITIES OF THE DEPARTMENT OF ENERGY, TO PRESCRIBE
       MILITARY PERSONNEL STRENGTHS FOR SUCH FISCAL YEAR, AND FOR OTHER
                                    PURPOSES

                                   __________

                                     PART 7

                                STRATEGIC FORCES

                                   __________

                        APRIL 17, 24; MAY 7, 8, 9, 2013

                                   __________

             Printed for the use of the Committee on Armed Services

            Available via the World Wide Web: http://www.fdsys.gov/

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                          COMMITTEE ON ARMED SERVICES

                         CARL LEVIN, Michigan, Chairman

    JACK REED, Rhode Island              JAMES M. INHOFE, Oklahoma
    BILL NELSON, Florida                 JOHN McCAIN, Arizona
    CLAIRE McCASKILL, Missouri           JEFF SESSIONS, Alabama
    MARK UDALL, Colorado                 SAXBY CHAMBLISS, Georgia
    KAY R. HAGAN, North Carolina         ROGER F. WICKER, Mississippi
    JOE MANCHIN III, West Virginia       KELLY AYOTTE, New Hampshire
    JEANNE SHAHEEN, New Hampshire        DEB FISCHER, Nebraska
    KIRSTEN E. GILLIBRAND, New York      LINDSEY GRAHAM, South Carolina
    RICHARD BLUMENTHAL, Connecticut      DAVID VITTER, Louisiana
    JOE DONNELLY, Indiana                ROY BLUNT, Missouri
    MAZIE K. HIRONO, Hawaii              MIKE LEE, Utah
    TIM KAINE, Virginia                  TED CRUZ, Texas
    ANGUS KING, Maine

                        Peter K. Levine, Staff Director

                    John A. Bonsell, Minority Staff Director

                                     ______

                        Subcommittee on Strategic Forces

                         MARK UDALL, Colorado, Chairman

    JACK REED, Rhode Island              JEFF SESSIONS, Alabama
    CLAIRE McCASKILL, Missouri           DEB FISCHER, Nebraska
    JOE DONNELLY, Indiana                DAVID VITTER, Louisiana
    ANGUS KING, Maine                    MIKE LEE, Utah

                                      (ii)
    ?

                                C O N T E N T S

                                  ----------

                        CHRONOLOGICAL LIST OF WITNESSES
                          Nuclear Forces And Policies
                                 april 17, 2013

                                                                       Page

    Creedon, Hon. Madelyn R., Assistant Secretary of Defense for
      Global Strategic Affairs.......................................     5
    Kowalski, Lt. Gen. James M., USAF, Commander, Air Force Global
      Strike Command.................................................     9
    Weber, Hon. Andrew C., Assistant Secretary of Defense for
      Nuclear, Chemical, and Biological Defense Programs.............    15
    Benedict, RADM Terry J., USN, Director, Strategic Systems
      Programs.......................................................    19
    Harencak, Maj. Gen. Garrett, USAF, Assistant Chief of Staff,
      Strategic Deterrence and Nuclear Integration...................    23

    Military Space Programs and Views on Department of Defense Usage of the
                            Electromagnetic Spectrum
                                 april 24, 2013

    Loverro, Mr. Douglas L., Deputy Assistant Secretary of Defense,
      Space Policy...................................................    50
    Zangardi, Dr. John A., Deputy Assistant Secretary of the Navy for
      Command, Control, Communications, Computers, Intelligence,
      Information Operations, and Space..............................    54
    Shelton, Gen. William L., USAF, Commander, Air Force Space
      Command........................................................    58
    Formica, LTG Richard P., USA, Commander, U.S. Army Space and
      Missile Defense Command/Army Forces Strategic Command..........    64
    Chaplain, Ms. Cristina T., Director, Acquisition and Sourcing
      Management, Government Accountability Office...................    72
    Wheeler, Maj. Gen. Robert E., USAF, Deputy Chief Information
      Officer for Command, Control, Communications, and Computers and
      Information Infrastructure Capabilities; Office of the
      Secretary of Defense...........................................    99
    Goldstein, Mr. Mark L., Director, Physical Infrastructure,
      Government Accountability Office...............................   102
    Guttman-McCabe, Mr. Christopher, Vice President, Regulatory
      Affairs, CTIA--The Wireless Association........................   112

      National Nuclear Security Administration Management of its National
                             Security Laboratories
                                  may 7, 2013

    McMillan, Dr. Charles F. Director, Los Alamos National Laboratory   133
    Hommert, Dr. Paul J., Director, Sandia National Laboratories.....   138
    Albright, Dr. Penrose C., Director, Lawrence Livermore National
      Laboratory.....................................................   147
    Shank, Dr. Charles V., Co-Chair, Committee to Review the Quality
      of the Management and of the Science and Engineering Research
      at the Department of Energy's National Security Laboratories...   156

                                     (iii)
          Strategic Forces Programs of the National Nuclear Security
     Administration and the Department of Energy's Office of Environmental
                                   Management
                                  may 8, 2013

    Miller, Ms. Neile L., Acting Administrator, National Nuclear
      Security Administration, Department of Energy..................   187
    Cook, Hon. Don L., Deputy Administrator for Defense Programs,
      National Nuclear Security Administration, Department of Energy.   205
    Richardson, ADM John M., USN, Deputy Administrator for Naval
      Reactors, National Nuclear Security Administration, Department
      of Energy......................................................   206
    Huizenga, Mr. David G., Senior Advisor for Environmental
      Management, Office of Environmental Management, Department of
      Energy.........................................................   208
    Trimble, Mr. David C., Director, National Resources and
      Environment, Government Accountability Office..................   214

                Ballistic Missile Defense Policies and Programs
                                  may 9, 2013

    Creedon, Hon. Madelyn R., Assistant Secretary of Defense for
      Global Strategic Affairs, Department of Defense................   238
    Gilmore, Hon. J. Michael, Director, Operational Test and
      Evaluation, Department of Defense..............................   245
    Formica, LTG Richard P., USA, Commander, U.S. Army Space and
      Missile Defense Command/Army Forces Strategic Command, and
      Commander, Joint Functional Component Command for Integrated
      Missile Defense................................................   248
    Syring, VADM James D., USN, Director, Missile Defense Agency,
      Department of Defense..........................................   256
    Chaplain, Ms. Cristina T., Director, Acquisition and Sourcing
      Management, Government Accountability Office...................   265

    DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR
                   2014 AND THE FUTURE YEARS DEFENSE PROGRAM

                                  ----------

                           WEDNESDAY, APRIL 17, 2013

                                   U.S. Senate,
                      Subcommittee on Strategic Forces,
                                   Committee on Armed Services,
                                                        Washington, DC.

                          NUCLEAR FORCES AND POLICIES

        The subcommittee met, pursuant to notice, at 2:30 p.m. in
    room SR-222, Russell Senate Office Building, Senator Mark Udall
    (chairman of the subcommittee) presiding.
        Committee members present: Senators Udall, Sessions, and
    Fischer.
        Majority staff member present: Jonathan S. Epstein,
    counsel.
        Minority staff member present: Robert M. Soofer,
    professional staff member.
        Staff assistant present: Lauren M. Gillis.
        Committee members' assistants present: Lenwood Landrum,
    assistant to Senator Sessions; and Peter Schirtzinger,
    assistant to Senator Fischer.

           OPENING STATEMENT OF SENATOR MARK UDALL, CHAIRMAN

        Senator Udall. The Subcommittee on Strategic Forces will
    come to order. This afternoon we will receive testimony from
    the Department of Defense (DOD) regarding nuclear matters for
    fiscal year 2014. Let me thank all of our witnesses today for
    taking time from your busy schedules to testify.
        Let me start with a quick administrative note. Following
    this open session, we will move to the Office of Senate
    Security in the Capitol Visitor Center, Room SVC-217, for a
    closed session. To accommodate that, I'd like to wrap up this
    open session by 3:30 p.m. So then I'd ask that we go straight
    into questions after Senator Sessions and I make some brief
    opening remarks here. If you have any opening statements, we'll
    be happy to enter those into the record.
        In that spirit, I'm going to keep my remarks very brief. I
    want to start by saying that I'm honored to chair this
    subcommittee and to work with the distinguished ranking member,
    Senator Sessions. He is deeply rooted in these policy matters
    and he's going to have to train me over these next months as we
    work together and create a partnership.
        I don't have to tell you here today that the Strategic
    Forces Subcommittee oversees some of the most critical and
    sensitive elements of our national security infrastructure.
    Colorado and Alabama have key roles to play in those no-fail
    missions. I'm looking forward to working with Senator Sessions
    and all of our members in the bipartisan fashion that's been a
    hallmark of the Senate Armed Services Committee (SASC) and this
    subcommittee for many years as we pursue our important work.
        With that, let me make some short comments regarding the
    fiscal year 2014 budget. The 1251 Report, which was originally
    required by the 2010 National Defense Authorization Act (NDAA)
    and then was revised in section 1043 of the NDAA for Fiscal
    Year 2012, is required to be part of the President's annual
    budget submission. The report gives a 10-year projection into
    the investments being made in our nuclear deterrent by DOD and
    the Department of Energy (DOE).
        As was the case last year, the report is late and we
    understand it may be June before we see it. I believe that
    Chairman Levin and Ranking Member Inhofe intend to mark up the
    SASC bill in June, so I'll be asking Assistant Secretaries
    Creedon and Weber to talk about that issue, explain what
    happened, and give us some idea of when Congress might see the
    report.
        The fiscal year 2014 numbers do show that even in times of
    sequestration we are making the best possible effort to move
    forward with a strategy to keep our deterrent maintained. The
    fact that we were able to fly our B-2 and B-52 bombers in the
    recent joint exercise Full Eagle with South Korea was an
    important sign of the many nations that rely on the U.S.
    deterrent as a part of their overall national security
    strategy.
        I want to commend today's witnesses, those that serve under
    them, and DOD as a whole for the hard work put into that
    effort. I know it was not easy, but it was important.
        On a final note, to my knowledge, Congress has yet to see
    any changes to the nuclear force structure as a result of the
    New Strategic Arms Reduction Treaty (START). We thought that
    was coming in the fiscal year 2013 budget, but we're still
    waiting for that information. It is important--I know my
    ranking member agrees--that the commitments made as a part of
    New START are upheld, so I'll be looking for some updates on
    when that guidance might be expected.
        Finally, I would like to say a word of thanks to all of our
    witnesses for your longstanding commitment to ensuring the
    safety and surety of our nuclear deterrent. You and the
    military men and women that you lead do demanding and often
    unsung work to keep our country safe around the clock. Thank
    you for your service.
        With that, let me turn to Senator Sessions for his opening
    statement and then we'll move on to questions.

                   STATEMENT OF SENATOR JEFF SESSIONS

        Senator Sessions. Thank you, Senator Udall.
        It's a pleasure to have you here.
        In a very odd way, perhaps, I believe what we'll do this
    year, maybe next year, is very significant as to what our
    nuclear situation is going to be in the years to come, because
    there's real ambivalence in the White House, there just is. I
    was disappointed and concerned about the Secretary of Defense.
    He answered the questions pretty well at his confirmation
    hearing, but the Nuclear Zero report I consider well outside
    the mainstream of American nuclear policy.
        Senator Ben Nelson and I were passed ``America's Strategic
    Posture,'' the final report of the Commission on the Strategic
    Posture of the United States. We required that because we
    thought the Cold War is over and the war on terrorism was
    evolving and our weapons are aging; what are we going to do? So
    we put the best minds in the world--you had William Perry, who
    challenged nuclear weapons, he thought we could reduce nuclear
    weapons. He was Secretary of Defense under President Carter;
    James Schlesinger, who was--Perry was Clinton's and Schlesinger
    was Carter's and Reagan's. You had John Glenn, Morton Halperin,
    Lee Hamilton, Fred Ikle, Keith Payne, and James Woolsey.
        They came out with a report that acknowledged changes, but
    concluded we should maintain basically our bipartisan long-term
    strategy for defending America and that nuclear weapons weren't
    obsolete, they do play a role in the world today that cannot be
    wished away, that our allies are worried about our commitment
    with regard to nuclear weapons to protect them and to use them,
    and we're behind on modernization, which they said had to be
    fixed.
        So they reached a very valuable bipartisan recommendation,
    and then with New START, as you mentioned, we reached an
    agreement that, with the President, to begin the modernization
    proliferation. We talked about, had a commitment to funding.
        I have acknowledged--but I don't want to see this as any
    kind of weakness in my view, but, Mr. Chairman, I've
    acknowledged that maybe we don't need to build, spend $10, $11
    billion on two buildings. I saw the biggest steel mill, the
    virtually newest, the biggest industrial project in the United
    States, several years ago. It was near my home town. It was a
    $4.7 billion steel mill. It was unbelievably big. So to say
    each one of these buildings are going to cost more than that
    made me a bit nervous.
        I'm not saying we can't save some money. But the
    production, the ability to guarantee that we modernize and be
    able to produce new pits and do the things that are necessary
    has to be there. I'm willing to work with you if we can keep
    the costs down some, but I really think that we're going to
    have to--if we're not able as a Nation or as Congress and the
    administration to reach an accord on this, it may become a big
    issue for us. We may have to have a big national discussion
    about this whole issue and take the cases to the American
    people and see where it comes out. We've been able to avoid
    that for a long time. We've had a pretty much bipartisan
    agreement.
        So, as I raised it with the Secretary of Defense and the
    Chairman of the Joint Staff this morning, we are behind on the
    ballistic missile submarine and the air-launched cruise missile
    by 2 years. The decision has not been made on the follow-on
    intercontinental ballistic missile (ICBM) program, the Service
    Life Extension Program (SLEP) for the B61 bomb, and the W88 and
    W77 warheads are 2 years behind schedule.
        So we want to talk about where we are on these programs,
    because if this continues then we will have reached a permanent
    fall-behind level and I think it would be hard to catch up.
        Thank you for letting me go a little bit longer than I
    would normally do. But I've tried to just lay out the fact that
    we'll have an important year, Mr. Chairman. You're not new to
    all these issues and you know what's going on. So I look
    forward to working with you.
        I would just say this. As I said at an international
    conference, nuclear weapons in a limited number of nations'
    hands cannot be said to have caused wars or certainly it hasn't
    caused a nuclear war yet. There's been a certain degree of
    uneasy stability in the world, but it's been stability to the
    degree we normally haven't seen throughout history.
        I think a case can be made that nuclear weapons are a force
    for good, but if we allow North Korea to have them and Iran to
    have them and then the South Koreans and the Japanese and the
    Saudis and the Egyptians--everybody wants nuclear weapons and
    we have a problem out there. If we keep reducing our numbers
    and it gets so low that a competing nation thinks, ``we can be
    a peer competitor of the United States of America, we can build
    that many weapons and put us in a situation that creates
    instability in the world that doesn't now exist.''
        So as we wrestle with how to make the world a safer place,
    let's be careful we don't do something that's
    counterproductive.
        Thank you.
        Senator Udall. Thank you, Senator Sessions.
        We're going to, if it's acceptable to the Senator from
    Nebraska, go right to questions. We want to welcome the Senator
    from Nebraska to the subcommittee, to our first hearing of this
    Congress. We know Nebraska has long had an influence in this
    subcommittee and we look forward to working with you.
        I'm certainly inclined to defer to you if you'd like to
    start off the questions, Senator Fischer. I know your time's
    valuable. Senator Sessions and I will be here for the entire
    hearing, but if you'd like to begin by asking some questions,
    please, the floor is yours for 5 minutes.
        Senator Fischer. Thank you, Mr. Chairman. It is an honor to
    be on this subcommittee. It is a very important subcommittee,
    not just for our country, but also for the State of Nebraska.
    So I thank you for your kind welcome. It's good to be here, and
    thank you, Ranking Member Sessions, as well.
        There's just a couple of things I wanted to touch on today,
    if I could. First of all, with the Minuteman III ICBM. Madam
    Secretary, if I could visit with you about that, I'd appreciate
    it. Exactly a year ago your prepared statement before the House
    Armed Services Committee stated: ``A 2-year Air Force study
    examining options and required capabilities for a follow-on
    system is nearly complete.'' This year your statement reads:
    ``A 2-year Air Force analysis of alternatives, examining
    options and required capabilities for a follow-on system
    ground-based strategic deterrence is projected to be complete
    in 2014.''
        So have we examined the options and required capabilities
    for that follow-on system?

     STATEMENT OF HON. MADELYN R. CREEDON, ASSISTANT SECRETARY OF
                  DEFENSE FOR GLOBAL STRATEGIC AFFAIRS

        Ms. Creedon. Thank you, Senator, and I will also ask
    General Kowalski to weigh in on this as well as he's closer to
    the actual conduct of the study.
        I know this has taken a lot longer than we anticipated, but
    one of the things that we want to make sure that we fully
    examine is all the options. So that ranges from a complete
    replacement to additional ways to extend the current 2030,
    which is when the current system in its present condition will
    be sustainable.
        One of the other things that is also going on in the
    context of the Air Force, which is also a little bit why this
    study has taken a bit longer, is the Air Force is also very
    carefully analyzing exactly how the current system is
    degrading, so that they have a much better understanding of how
    they might extend the life of this if that is the alternative
    that's chosen.
        So we really need to do this, finish the study. As the
    President has said, this is an integral part of the triad and
    the present policy, obviously, is to maintain the triad.
        [The prepared statement of Ms. Creedon follows:]

                 Prepared Statement by Hon. Madelyn R. Creedon

        Chairman Udall, Ranking Member Sessions, distinguished members of
    the Strategic Forces Subcommittee, thank you for the opportunity to
    testify today on our nuclear forces and the policies and programs that
    support them. I am pleased to join assistant Secretary Weber,
    Lieutenant General Kowalski, Rear Admiral Benedict, and Major General
    Harencak who are here today for this discussion.
        The Office of Global Strategic Affairs (GSA) leads the Department
    of Defense's efforts to execute the President's vision toward a world
    without nuclear weapons, while recognizing that as long as nuclear
    weapons exist, the United States must maintain a safe, secure, and
    effective nuclear deterrent. The great men and women of GSA lead the
    Department's work with our international allies and partners to ensure
    and strengthen stability and deterrence in the international system.
    GSA is also responsible for policy development on a range of issues,
    including countering the proliferation of weapons of mass destruction
    (WMD); ballistic missile defense; and dealing with the emerging
    security threats in the cyber and space domains.
        I will address a number of issues today, including the global
    strategic balance; progress and force structure under the Treaty
    between the United States and the Russian Federation on Measures for
    the Further Reduction and Limitation of Strategic Offensive Arms (New
    START); the 2010 Nuclear Posture Review (NPR) implementation study;
    budget uncertainties; force modernization; and nuclear command,
    control, and communications. Additionally, I stand ready to answer any
    questions that the subcommittee may have.

                            GLOBAL STRATEGIC BALANCE

        The United States has come a long way from a high point of
    approximately 31,000 nuclear warheads at the height of the Cold War in
    1967 to about 5,000 in our stockpile today. The number of deployed
    strategic nuclear warheads reported under New START for the United
    States as of March 1, 2013 stands at 1,654. For the Russian Federation,
    the figure is 1,480. By any measure, this represents significant,
    demonstrable disarmament progress.
        Reporting and inspections that are done under New START have given
    us a strong understanding of deployed Russian strategic nuclear
    weapons, but we have significantly less confidence in the numbers of
    Russian non-strategic or ``tactical'' nuclear weapons.
        Russia also maintains a robust nuclear warhead production
    capability to regularly remanufacture warheads rather than conduct
    life-extension programs, as the United States does. It is also
    modernizing its delivery systems. It is fielding a mobile variant of
    the Topol-M intercontinental ballistic missile (ICBM), a new Borey-
    class missile submarine with Bulava submarine-launched ballistic
    missiles (SLBMs), and replacements for its nuclear air launched cruise
    missile (ALCM). It is also developing a new heavy ICBM to replace aging
    Cold War-era systems, which is planned go into service by the end of
    this decade.
        China continues to invest in nuclear weapons and delivery systems
    in order to enhance the mobility and survivability of its nuclear
    deterrent. Its broad range of missile-development programs includes an
    effort to replace some liquid-fueled systems with more advanced solid-
    fueled systems. It is also pursuing a sea-based deterrent with the
    development of the JL-2 submarine launched ballistic missile intended
    for deployment on the Type-094 Jin-class ballistic missile submarine.
    Although China continues to upgrade its nuclear missile force, we
    estimate that it has not substantially increased its nuclear warhead
    stockpile in the past year, since I last briefed this subcommittee.
        Iran continues to defy the calls of the international community for
    transparency into its nuclear activities. Its refusal to cooperate
    fully with the International Atomic Energy Agency (IAEA) and the
    possible military dimensions of Iran's nuclear program continue to
    heighten U.S. and international concerns that Iran is pursuing the
    development of a nuclear-weapon capability.
        North Korea continues to violate its international obligations and
    commitments, including denuclearization. Its announcement on February
    12, 2013 of a third nuclear test, following on the heels of its
    December 12 Taepo Dong-2 launch, and its subsequent threatening
    rhetoric are the latest reminders that North Korea's nuclear and
    ballistic missile programs, and proliferation activities, pose threats
    to U.S. national security, Asia-Pacific regional security, and
    nonproliferation efforts worldwide.
        The array of nuclear-armed or nuclear weapons-pursuing states
    around the world certainly complicates the global security environment.
    The United States and Russia together, however, still account for a
    vast majority of the world's nuclear weapons, even after the central
    limits of New START are reached in February 2018. For this reason, our
    focus for the next stage of arms control remains bilateral efforts with
    Russia.

                                NEW START TREATY

        The New START treaty entered into force on February 5, 2011. It
    allows the United States to continue to field a credible and flexible
    nuclear deterrent force while also providing a framework for bilateral
    reductions in strategic nuclear weapons systems. When fully
    implemented, the New START treaty will result in the lowest number of
    deployed nuclear warheads since the 1950s. The treaty limits both the
    United States and the Russian Federation to 1,550 accountable warheads
    on deployed ICBMs, deployed SLBMs, and heavy bombers. Strategic
    stability will be maintained through a robust triad of strategic
    delivery systems under the treaty's limit of 700 deployed ICBMs,
    deployed SLBMs, and deployed heavy bombers and 800 total strategic
    delivery systems. The United States can meet national security
    requirements under these limits.
        A key contribution of New START is its extensive verification
    regime. I am pleased to report that the United States has been fully
    implementing the measures that are included in this regime. Since entry
    into force, the United States and Russia have each conducted 40 onsite
    inspections. Each side has fully used its respective inspection quotas
    for the treaty's first 2 years, and both sides are well into the third
    year of inspections. Each side is exchanging updates to its respective
    databases on strategic offensive arms, twice per year as agreed under
    New START, and each has exchanged telemetric information on selected
    ICBM and SLBM launches. Delegations from the United States and Russia
    have also met five times under the Treaty's Bilateral Consultative
    Commission to address implementation issues.
        The United States is on track to meet New START's central limits by
    the February 5, 2018 deadline. We look forward to continuing robust
    bilateral cooperation and dialogue with the Russian Federation as we
    fully implement the treaty.

                    FUTURE ARMS CONTROL EFFORTS WITH RUSSIA

        As the 2010 Nuclear Posture Review stated, New START is the first
    step by this administration in lowering the numbers of nuclear weapons
    and delivery systems deployed by the United States and Russia. We
    intend to pursue further bilateral reductions and transparency with
    Russia that would cover all nuclear weapons--deployed and non-deployed,
    strategic and nonstrategic--while ensuring that we maintain our
    commitments to stability with other nuclear powers, deterrence of
    potential adversaries, and assurance of our allies and partners.
        Because of improved relations with Russia, strict numerical parity
    in nuclear weapons is no longer as compelling as it was during the Cold
    War. On the other hand, large disparities in nuclear capabilities could
    raise concerns on both sides and among U.S. allies and partners, and
    may not be conducive to maintaining a stable, long-term strategic
    relationship, particularly at lower numbers. Therefore, as the NPR
    stated, we will place importance on Russia joining us as we pursue
    additional reductions in nuclear stockpiles.
        The timing and framework for the next round of negotiations are not
    settled, but we are working now to establish the appropriate
    conditions. The administration has been clear that future discussions
    with Russia should include non-strategic nuclear weapons, consistent
    with the Senate's Resolution of Advice and Consent to Ratification for
    New START.

                  NUCLEAR POSTURE REVIEW IMPLEMENTATION STUDY

        The administration has been conducting an NPR implementation study
    to review our nuclear deterrence requirements and operational plans to
    ensure they address today's threats. Once the President reviews the
    results of the study and makes decisions regarding its recommendations,
    the administration will revise employment guidance and operational
    plans accordingly. The President's decisions regarding the study
    recommendations will also provide the foundation on which we can
    develop specific proposals regarding further nuclear reductions that we
    can use as the basis for discussions with Russia.
        The implementation study focuses on the five key strategic
    objectives established in the Nuclear Posture Review:

             Preventing nuclear proliferation and nuclear
            terrorism;
             Reducing the role of U.S. nuclear weapons in U.S.
            national security strategy;
             Maintaining strategic deterrence and stability at
            reduced nuclear force levels;
             Strengthening regional deterrence and reassuring U.S.
            allies and partners; and
             Sustaining a safe, secure, and effective nuclear
            arsenal.

        The analysis is not yet complete, but our preliminary view based on
    work to date, is that further reductions consistent with the national
    security environment will be possible and that continuing modernization
    of our nuclear capabilities is essential. The details of this work are
    highly sensitive, but as already promised by the Secretary of Defense,
    the Department is committed to sharing relevant aspects of the analysis
    with the senior leaders of the defense committees when approved by the
    President. The Secretary is committed to keeping Congress fully
    informed of policy developments and our plans for adjustments to both
    the nuclear force and its supporting nuclear complex.

                              BUDGET/UNCERTAINTIES

        The current fiscal situation continues to put pressure on the
    entire Department of Defense. As sequestration cuts are implemented and
    as budgetary uncertainties continue, the Department will make difficult
    decisions and assume more risks. These risks, however, will not alter
    our prioritization of the nuclear mission and our commitment to U.S.
    extended deterrence and assurance of allies and partners. We will make
    every effort to minimize adverse effects on our mission and to ensure
    the capabilities and readiness of our forces.
        For as long as nuclear weapons exist, the United States will
    maintain a safe, secure, and effective nuclear stockpile. A modern,
    responsive nuclear weapons infrastructure is the foundation of our
    nuclear deterrent and the Department of Defense, in partnership with
    the Department of Energy (DOE)/National Nuclear Security Administration
    (NNSA), will take the steps necessary to ensure its long-term
    sustainment and modernization. Those steps, and how the administration
    proposes to fund them, were originally laid out in the fiscal year 2011
    ``Section 1251 Report.'' Ongoing fiscal challenges and greater-than-
    anticipated program costs have forced a reexamination of the 1251
    strategy and supporting programs. As a result, the administration has
    worked to identify cost savings in a sensible and strategic way. We
    will protect important modernization programs, while continuing to meet
    our other defense, deterrence, and assurance commitments. We have made
    difficult choices and are accepting risk through program delays where
    feasible and other programmatic adjustments.
        One such adjustment has been the development of an enduring
    strategy for plutonium capability that includes re-use of existing
    plutonium pits to meet near-term requirements. This has allowed for a
    deferral of the Chemistry and Metallurgy Research Replacement-Nuclear
    Facility (CMRR-NF) that has, in turn, freed funding for construction of
    the Uranium Processing Facility (UPF). Design work on the UPF
    continues, and is scheduled for completion in mid-fiscal year 2014.
        These decisions reflect careful consideration on the part of the
    DOE/NNSA, in close consultation with the Department of Defense, and the
    difficult choices that have been made in order to operate within the
    budget constraints imposed by the current fiscal environment. Our
    prioritized stockpile plan supports the President's commitment to
    modernizing the Nation's nuclear infrastructure and the importance of
    the nuclear mission.

                              FORCE MODERNIZATION

        The 2010 NPR concluded that the United States will maintain a triad
    of ICBMs, SLBMs, and nuclear-capable heavy bombers; the President's
    fiscal year 2014 budget supports its modernization. As Secretary of
    Defense Hagel has stated, ``providing the necessary resources for
    nuclear modernization of the triad should be a national priority,'' and
    that is the policy of this administration.
        As we move to lower numbers under New START, sustaining the sea-
    based leg of our nuclear deterrent remains a vital requirement. The
    service life for the Trident D-5 SLBM has been extended to 2042 and
    construction of the first of the Ohio-class replacement submarines is
    scheduled to begin in 2021.
        The administration plans to sustain the Minuteman III (MMIII) ICBM
    system through 2030. Solid Rocket Motor (SRM) flight tests and
    surveillance efforts are ongoing and by 2017 will provide better
    estimates for component age-out and system end-of-life timelines.
    Guidance system and fuse replacement are also expected to be needed
    prior to 2030. A 2-year Air Force Analysis of Alternatives examining
    options and required capabilities for a follow-on system, Ground-Based
    Strategic Deterrence, is projected to be complete in 2014. This will
    allow a program to further extend the life of the MMIII or to develop a
    follow-on ICBM. The ICBM Demonstration Validation Program is maturing
    technologies for insertion into future SRM and guidance programs.
    Follow-on ICBM activities will be closely coordinated and leveraged
    with efforts to modernize the MMIII through 2030.
        A key modernization issue is sustainment of the large-diameter
    solid-rocket motor industrial base, pending a decision whether to
    produce a follow-on system. Strategic rocket motor demand has been on a
    steady decline for the last two decades, placing a heavy burden on Navy
    and Air Force resources to keep it viable. Planned investments offer
    the Department and our industrial partners the opportunity to right-
    size rocket motor production capacity for the short term while
    retaining critical skills for the future.
        The United States will maintain two B-52H strategic bomber wings
    and one B-2 wing. Both bombers, however, are aging. Sustained funding
    and support is therefore required to ensure operational effectiveness
    through the remainder of their respective service lives. The
    President's Budget Request supports upgrades to these platforms; for
    example, providing the B-2 with survivable communications, a modern
    flight system, and upgraded defensive systems. The Department has begun
    a program for a new, long-range, nuclear-capable, penetrating bomber
    that is fully integrated with a family of systems supporting
    intelligence, surveillance, and reconnaissance (ISR) assets. In
    addition, as air-launched cruise missiles (ALCM) age, the Department is
    planning to compete an analysis of alternatives in May for an ALCM
    follow-on system called the long-range standoff (LRSO) missile. We plan
    to sustain the ALCM and work with DOE/NNSA to sustain the W80-1 ALCM
    warhead until the LRSO can be fielded.

                              ALLIANCE COMMITMENTS

        Our commitment to the North Atlantic Treaty Organization (NATO)
    remains strong and continues to be a positive force in the
    international security environment. Last year, NATO completed a
    rigorous analysis of its deterrence and defense posture, formally
    publishing the Deterrence and Defense Posture Review (DDPR), which
    clearly states that nuclear weapons and missile defense are core
    components of NATO's overall capabilities for deterrence alongside
    conventional forces. To implement the principles and results of the
    DDPR, the Alliance also updated longstanding nuclear guidance. We also
    work closely with our NATO allies through the Nuclear Planning Group,
    which is the senior alliance body on nuclear policy and posture issues.
    This forum provides a critical venue for discussions among NATO allies
    on a broad range of nuclear policy matters, including the safety and
    security of nuclear weapons and the development of common alliance
    positions on nuclear policy.
        The special relationship between the United States and the United
    Kingdom remains strong. Instability in the international system caused
    by aggressors such as North Korea and the nuclear aspirations of Iran
    threaten both of our states, and these shared threats strengthen our
    commitment to bilateral cooperation across the nuclear domain. One way
    in which this cooperation is evidenced is the Common Missile
    Compartment program. This joint effort provides significant cost-
    sharing benefits to both states and helps ensure that the next
    generation of our respective SSBN fleets remains technically sound and
    strategically viable. In this era of declining defense budgets and
    overall fiscal uncertainty, this type of collaboration is increasingly
    important. We value the United Kingdom's continuous at-sea deterrent
    and the vital contribution it brings to our allied nuclear deterrence
    mission.
        To support U.S. extended deterrence and assurance commitments, the
    Department plans to provide a nuclear capability to the Joint Strike
    Fighter to replace existing dual-capable aircraft (DCA) in Europe. Our
    plan remains to integrate nuclear delivery capability into the F-35
    during Follow-on Development block upgrades of the aircraft. To allow
    for more maturity in the Follow-on Development program, the Air Force
    (in coordination with the Joint Program Office) now intends to deliver
    nuclear capability to the F-35 for deployment after calendar year 2024.
    The Air Force has plans in place to ensure there will be no gaps in our
    ability to meet extended deterrence commitments to our allies and
    partners as the F-35 DCA capability comes on-line.
        We continue to engage the Republic of Korea on nuclear matters
    through the Extended Deterrence Policy Committee, which serves as a
    bilateral forum to enhance the effectiveness of extended deterrence on
    the Korean Peninsula. This work has taken on greater urgency in light
    of North Korea's continued provocative actions that have increased
    tensions. Our recent B-52 and B-2 missions demonstrate that we are
    unequivocally committed to our defense of the Republic of Korea, to
    deterring aggression, and to ensuring peace and stability in the
    region.
        With our Japanese allies, we continue to participate in an ongoing
    Extended Deterrence Dialogue, co-chaired by the State Department, which
    covers nuclear and missile defense issues.
        This dialogue is actively strengthening our alliance by resolving
    questions and providing frank discussion on a range of strategic
    issues. Its value lies in the trust and understanding built between
    partners, and the opportunity it engenders to think creatively about
    deterrence challenges before they arise.

                  NUCLEAR COMMAND, CONTROL, AND COMMUNICATIONS

        The Department of Defense is committed to sustaining and improving
    our Nuclear Command, Control, and Communications (NC3) architecture.
    Over the past year, the Department has begun formulating a long-term
    strategy to modernize critical NC3 capabilities, while also enhancing
    NC3 support in regional contingencies.
        The Deputy Secretary of Defense is leading this effort to ensure
    our NC3 system remains enduring and secure against a broad range of
    threats and challenges. In this context, the Department is prioritizing
    resources to address known capability gaps while incrementally building
    toward a modern NC3 architecture that will ensure timely decision-
    making support for the President and address the full spectrum of 21st
    century deterrence challenges.

                                   CONCLUSION

        The current fiscal environment and ongoing budget uncertainties
    will continue to pose significant challenges as we move forward in the
    sustainment and modernization of our nuclear deterrent. As a result, we
    will continue to adjust programs in order to meet the Nation's
    deterrence and defense requirements while taking into account a
    declining Department of Defense budget. Despite this uncertainty, the
    administration remains firmly committed to safe, secure, and effective
    nuclear stockpile and modernized platforms to deter potential
    adversaries and reassure our allies and partners around the world.

     STATEMENT OF LT. GEN. JAMES M. KOWALSKI, USAF, COMMANDER, AIR
                      FORCE GLOBAL STRIKE COMMAND

        General Kowalski. Senator Fischer, the 2-plus years really
    encompasses two studies. The first was what we often called the
    pre-analysis of alternatives or capabilities-based assessment.
    During that assessment you survey the entire universe of
    possibilities for a follow-on weapons system and then you scope
    it down so that you have a reasonably sized number of
    alternatives to look at as you go into the analysis of
    alternatives (AoA).
        So that was completed. It was signed out by the Chief of
    Staff of the Air Force back in October 2012, and then we went
    into the AoA. We had some bureaucratic delays as the study plan
    went back and forth. The study is about to begin. It will take
    about a year and it will report out next year.
        But we've put a lot of work into this and we're comfortable
    that we have a very sound and structured plan to go forward
    with this analysis and truly look at all of the possible
    alternatives out there, and to weigh all the different
    attributes that we think we'll need as we think about this
    weapons system beyond 2030.
        [The prepared statement of Lieutenant General Kowalski
    follows:]

             Prepared Statement by Lt. Gen. James M. Kowalski, USAF

                                  INTRODUCTION

        Chairman Udall, Ranking Member Sessions, and distinguished members
    of the subcommittee; thank you for allowing me to represent nearly
    25,000 Air Force Global Strike Command (AFGSC) airmen and civilians and
    to appear before you for the third time as their commander. I will use
    this opportunity to update you on our mission, the status of our
    forces, and the challenges we will face over the next few years.

                    AIR FORCE GLOBAL STRIKE COMMAND MISSION

        Since the standup of AFGSC in 2009, our mission has been to:
    ``Develop and provide combat-ready forces for nuclear deterrence and
    global strike operations--Safe, Secure, and Effective--to support the
    President of the United States and combatant commanders.''
    AFGSC Nuclear Mission
        At the core of our mission statement are three reinforcing
    attributes: ``Safe-Secure-Effective.'' These were outlined in President
    Obama's 2009 Prague speech where he said: ``Make no mistake: as long as
    these weapons exist, the United States will maintain a safe, secure,
    and effective arsenal to deter any adversary, and guarantee that
    defense to our allies.'' The attributes of ``safe, secure, effective''
    serve as the foundation of every nuclear-related activity in AFGSC,
    from the discipline shown in the smallest task, to how we prioritize
    our planning and programming for the Future Years Defense Program. The
    effects of our nuclear force, as outlined in the 2010 Nuclear Posture
    Review, are to ensure strategic stability, to support the regional
    deterrence architecture, and to assure our allies and partners.
    AFGSC Conventional Mission
        Our conventional bomber forces defend our national interests by
    deterring, or should deterrence fail, defeating an adversary. Two
    capabilities are fundamental to the success of our bomber force: first
    is our ability to hold heavily defended targets at risk, and second is
    our ability to apply relentless and persistent combat power across the
    spectrum of conflict. The U.S. force of penetrating and stand-off heavy
    bombers, with their capacity for long-range and long-endurance while
    carrying large and varied payloads, are well-matched to our Nation's
    global responsibilities and are in high demand by the regional
    combatant commanders.

                     AIR FORCE GLOBAL STRIKE COMMAND FORCES

        The two Numbered Air Forces under AFGSC, 8th Air Force and 20th Air
    Force, have a storied history back to the Army Air Corps. Eighth Air
    Force operations in Europe during World War II paved the way for
    victory over Nazi Germany. Twentieth Air Force ended the war in the
    Pacific by dropping atomic bombs on Hiroshima and Nagasaki. Today,
    these organizations continue to serve critical national security roles
    as Component Numbered Air Forces for U.S. Strategic Command (STRATCOM)
    and as Task Forces for on-alert nuclear forces.
    Twentieth Air Force
        Twentieth Air Force commands the Minuteman III (MMIII)
    intercontinental ballistic missile (ICBM) fleet and our UH-1N
    helicopter force. Within the Triad, our 450 dispersed and hardened
    missile silos provide the foundation for strategic stability with other
    major nuclear powers by presenting any potential adversary a near
    insurmountable obstacle should they consider an attack on the United
    States. No adversary can credibly threaten an attack on this force
    without depleting their own arsenal.
        Minuteman III
        We continue to execute our long-range plan of modernization and
    sustainment for the MMIII. This plan includes a new booster,
    Transporter Erector vehicle and reentry system Payload Transport
    vehicle.
        The ICBM Cryptography Upgrade, Code System Media, and the Strategic
    Targeting and Application Computer System programs have been fully
    funded, providing for hardware and software upgrades to allow the
    secure transmission of critical codes and targeting data via modern
    media. These upgrades will reduce security risks and the number of
    manhours needed for the annual cryptographic code change at our Launch
    Facilities and Launch Control Centers.
        We are also upgrading ICBM Launch Control Centers with advanced
    extremely high frequency communications. This program provides
    connectivity with the National Command Authority. This past year we
    advanced the Minuteman Minimum Essential Emergency Communications
    Network Program, which upgrades and modernizes cryptographic devices
    and enhances and secures the Emergency Action Message network. We began
    weapon system testing in April 2012 and fielding is scheduled to begin
    June 2013 in simulators before being installed in operational ICBM
    sites in February 2014.
        In coordination with Air Force Materiel Command and the Air Force
    Nuclear Weapons Center, AFGSC resolved test range safety issues with
    ICBM flight test components to restore operational test launches after
    a 10-month delay. In 2012, the ICBM test community executed two
    operational test launches and multiple simulated and smaller scale
    tests. Operational testing is currently funded through fiscal year 2015
    with four operational test launches scheduled per year to satisfy test
    requirements outlined by STRATCOM and the National Nuclear Security
    Administration.
        We continue to closely examine emerging needs including propulsion,
    guidance system upgrades and fuze refurbishment to ensure MMIII weapon
    system remains reliable and ready through 2030. We will transition
    these technologies to the Ground-Based Strategic Deterrent.
        Ground-Based Strategic Deterrent
        The MMIII, fielded in the 1970s with a planned service life of 10
    years, has proven its value in deterrence well beyond the platform's
    intended lifespan. The Ground-Based Strategic Deterrent (GBSD) is the
    program intended to replace the MMIII and we will start the Analysis of
    Alternatives (AoA) this July. Initial capabilities were identified,
    validated by the Joint Requirements Oversight Council, and approved in
    August 2012 by the Air Force Chief of Staff. The analysis is critical
    to inform near-term recapitalization programs so technologies and
    components can be leveraged into GBSD approaches. Completion of the
    GBSD AoA is projected for late fiscal year 2014. Navy representatives
    are fully engaged with our GBSD team, investigating the benefits and
    risks of commonality, with the objective to reduce future design,
    development, and manufacturing costs for strategic systems.
        UH-1N
        AFGSC is the lead command for USAF UH-1N in support of two critical
    national missions: nuclear security for AFGSC and Continuity of
    Operations/Continuity of Government taskings for the Air Force District
    of Washington.
        Although the UH-1Ns are over 40-years old, we expect to fly them
    for at least another decade. We must sustain the helicopter's current
    capabilities and selectively modernize them to minimize existing
    capability gaps and avoid increased sustainment costs brought on by
    obsolescence. These efforts include installing crashworthy seats,
    making the cockpit fully night vision compatible, replacing obsolete
    sensors to better support our security mission and the National Search
    and Rescue Plan, and performing some delayed safety and sustainment
    improvements. We will continue to look, both inside the Air Force and
    across the Department of Defense, for ways to reduce risk with the
    current fleet and close our capability gap. Moreover, the UH-1N's
    deficiencies in range, speed, and payload can only be remedied through
    replacement with a new platform. Our way ahead for UH-1N replacement is
    the Common Support Helicopter program, which is currently unfunded.
    Eighth Air Force
        Eighth Air Force commands the B-2 Spirit and B-52H Stratofortress
    bomber forces and directs the bombers' conventional and nuclear
    operational readiness. The B-2 gives the United States the ability to
    attack heavily defended targets, while the B-52H serves as the premier
    high-altitude standoff bomber. Our dual-role bomber fleet is the most
    visible leg of the nuclear triad, allowing decisionmakers to
    demonstrate resolve through generation, dispersal or deployment.
        B-52H
        Our emphasis on 2012 as the ``Year of the B-52'' highlighted the
    bomber's storied 60-year operational history and the airmen who have
    worked tirelessly to keep the aircraft flying. The B-52 is able to
    deliver the widest variety of standoff, direct attack, nuclear and
    conventional weapons in the Air Force, and remains a universally
    recognized symbol of American airpower.
        AFGSC continues to pursue funding to complete the Combat Network
    Communications Technology (CONECT) upgrade. This upgrade resolves
    sustainability issues with aging cockpit displays and communications
    while also providing a ``digital backbone'' to take the B-52 past 2040
    and allow integration into the complex battlespace of the future.
    CONECT replaces aging displays, adds a radio, provides beyond line-of-
    sight communications and situational awareness, efficient machine-to-
    machine retargeting, and connectivity to the net-centric command and
    control environment. The CONECT program successfully passed Milestone C
    and stands ready for your continued support.
        The B-52 gets additional combat capability through fielding of the
    Miniature Air Launched Decoy (MALD). The B-52 and F-16 are currently
    the only aircraft to use this decoy. Additionally, AFGSC is programming
    for an internal weapons bay modification which will increase payload by
    66 percent for advanced precision weapons such as MALDs, Joint Direct
    Attack Munitions, and Joint Air-to-Surface Standoff Missiles.
        We have a number of ongoing sustainment efforts underway, to
    include a replacement landing gear anti-skid controller, the upgraded
    Forward-Looking Infrared Sensor and a wiring replacement program.
        Additionally, AFGSC continues to pursue a safe, secure, and
    effective nuclear arsenal on the B-52 with the Service Life Extension
    Program for the Air Launched Cruise Missile (ALCM). The intent is to
    extend the ALCM through 2030 until the Long-Range Standoff Missile
    (LRSO) becomes operational.
        Finally, we executed all fiscal year 2012 scheduled Nuclear Weapons
    System Evaluation Program testing requirements by launching six B-52H
    ALCMs and executing nine B-2 gravity bomb missions with 100 percent
    reliability. Overall, the B-52's ALCM weapon system reliability
    increased by over 10 percent and it remains a strong and capable
    nuclear deterrent.
        B-2
        2013 kicks off our ``Year of the B-2'' to celebrate the 20-year
    anniversary of the first B-2 delivery to the USAF. During this year, we
    will focus on the weapon system's sustainment, readiness, and
    especially the airmen who keep this stealthy bomber flying.
        In the fiscal year 2014 budget, we advocated for full funding of
    the B-2 Defensive Management System upgrade. This avionics improvement
    enhances aircrew situational awareness and increases aircraft
    survivability in heavily defended airspace against modern 21st century
    integrated air defense systems.
        We installed the B-2 Extremely High Frequency Increment 1 upgrade
    on the first two operational aircraft. This modification improves
    onboard computers and provides a fiber optic backbone enabling future
    programs. Operational testing of these aircraft was completed this year
    and we are nearing full nuclear certification of the modified systems.
    We are on track to complete installation on the remaining aircraft by
    2016, 4 months ahead of schedule.
        AFGSC continues to evolve B-2 conventional combat capability by
    fielding vital programs such as the Massive Ordinance Penetrator (MOP).
    Our Nation's ability to hold hardened, deeply buried targets at risk
    was bolstered by successful testing and fielding of the MOP, and this
    30,000-pound weapon is now operational. This year we also tested a new
    B-2 low observable field modification which cuts maintenance by about
    10,000 hours per year and we are on track to complete this installation
    3 years ahead of schedule. Finally, we completed the $1.4 billion B-2
    Radar Modernization Program, ensuring full compliance with the Federal
    Communications Commission mandates while maintaining the B-2's ability
    to navigate and target its weapons.
        The B-2 enterprise strives to maintain the proper balance of fleet
    modernization efforts, test, aircrew training, and combat readiness.
    The dynamics of a small fleet continue to challenge our sustainment
    efforts primarily due to vanishing vendors and diminishing sources of
    supply. Air Force Materiel Command is working to ensure timely parts
    availability; however, many manufactures do not see a strong business
    case in supplying parts for a small aircraft fleet. Problems with a
    single part can have a significant readiness impact on a small fleet
    that lacks the flexibility of a large force to absorb parts shortages
    and logistics delays.
        Fleet-wide Bomber Initiatives
        We executed the command's 2012 $471 million flying-hour program
    resulting in 91 percent training currency for all assigned aircrews.
    One of our major command initiatives involved implementing a fleet-wide
    aviation fuel efficiency and tracking program. This provided guidance
    on a number of fiscal year 2012 fuel conservation measures, resulting
    in a total of $7.8 million in fuel savings, far surpassing our original
    goal of $3 million. AFGSC also matured the bomber tasking process via
    Global Force Management.
        Long-Range Strike Bomber
        The combat edge our innovative B-2 provides will be challenged by
    next generation air defenses and the proliferation of these advanced
    systems. The Long-Range Strike Bomber (LRS-B) program works to extend
    American air dominance against advanced air defense environments. We
    continue to work with Air Combat Command to develop the LRS-B and field
    a fleet of 100 new dual-capable bombers beginning in the mid-2020s.
        Long-Range Standoff Missile
        In a similar manner to LRS-B, the LRSO aids in our mission to
    assure and deter. The LRSO will be the follow-on to the aging ALCM and
    will be compatible with the B-52, B-2, and LRS-B. The Analysis of
    Alternatives is complete and undergoing staffing through the joint
    community. We have worked closely with the LRSO Program Office to
    develop an acquisition strategy aligned with the Department of Energy's
    process for selecting and adapting an existing warhead.
        B-61
        The B61-12 program will extend the life of the B-61 and, with the
    B61-12 Tailkit Assembly program, will give us a safe, secure, and
    effective nuclear bomb for our dual-capable bombers and fighters. The
    Tailkit program vendor selection has been accomplished and the program
    is entering into Engineering and Manufacturing Development. This joint
    AFGSC/Department of Energy endeavor will allow us to continue to meet
    our strategic requirements and regional commitments.

                                    SECURITY

        Nuclear surety and security are at the forefront of the command's
    mission. To keep our focus on these challenges, we developed a
    Strategic Security Plan (SSP) as an integrated road map for our
    security initiatives. The SSP will improve our nuclear security by
    incorporating lessons learned from other government agencies and recent
    overseas contingency operations.
        A major AFGSC initiative is designing new Weapon Storage Facilities
    to consolidate nuclear maintenance, inspection, and storage. These will
    replace deficient and worn buildings in our aging weapon storage areas
    with a single modern and secure facility. This initiative eliminates
    security, design, and safety deficiencies and improves our maintenance
    processes.
        Following partial design, the project will undergo validation by
    external agencies to include the Defense Threat Reduction Agency, Air
    Force Nuclear Weapons Center, Air Force Safety Center, and Air Force
    Security Center. We are also seeking Department of Energy and U.S. Navy
    input to explore ways to standardize across all organizations. Final
    design completion is scheduled for March 2014. Our goal is to begin to
    include the MILCON for these new weapon storage facilities in fiscal
    year 2015.
        The Air Force's toughest inspection schedule continues to assess
    compliance and combat readiness in both our nuclear and conventional
    missions. Last year, we reported on our initiative to consolidate
    inspections to free up more training time for our airmen and units. We
    implemented the first round of Consolidated Unit Inspections in 2012,
    bringing evaluators from multiple AF agencies into a single inspection.
    Additionally, we reduced overlap between the Nuclear Surety Inspections
    and Nuclear Operational Readiness Inspections without compromising
    individual inspection requirements. Combined, these initiatives
    returned an average of 132 operational training days per 3-year
    inspection cycle to each of our six wings while maintaining the high
    standards demanded of nuclear operations.
        We continue our efforts to improve and strengthen the nuclear
    enterprise through our long-range planning efforts. AFGSC initiated an
    enterprise-wide campaign to develop a 20-year comprehensive investment
    strategy for the Air Force's Nuclear Deterrence Operations core
    function. We will use this plan to bolster our ability to provide the
    President and combatant commanders vital global strike warfighting
    capabilities by prioritizing modernization, sustainment, and
    acquisition efforts for our bomber, ICBM, and helicopter weapon systems
    and the nuclear command, control, and communications systems that
    underpin them all.
    Nuclear Command, Control, and Communications (NC3)
        Assured NC3 connectivity is the linchpin to a credible and secure
    strategic deterrent. As the Air Force Nuclear Command and Control
    System Chief Architect, the AFGSC Director of Communications is leading
    the Air Force prioritization and investment in survivable NC3. Within
    AFGSC, these systems include the Family of Advanced Beyond-line-of-
    sight Terminals, the Common Very Low Frequency Receiver, and upgrades
    to our wing command posts, Mobile Support Teams, and ICBM Launch
    Control Centers.

                                2013 FOCUS AREAS

    Always Better
        The special trust and responsibility we have for nuclear weapons
    demands a culture where we must always seek to be better. Although we
    will continue to be challenged with sustaining aging weapon systems, we
    will leverage the innovation of our airmen to get the most out of our
    resources.
    Win the Fight
        Whether that fight is in overseas contingencies where we have 1,100
    airmen deployed, or with our nuclear deterrent forces on alert today
    and every day, we will push to keep both our nuclear and conventional
    forces as combat ready as possible.
    Care for Our Team
        We will improve the quality of life for our airmen and their
    families, aware of the unique demands of our mission and our locations.
    We will continue to foster resiliency and strength within a wingman
    culture, and we will aggressively educate and train our people with
    regard to the problem of sexual assault. Furthermore, we will continue
    to build a culture around our command value of ``Respect for the worth
    and dignity of every airman.''
    Modernize
        We will stay focused on our weapon system modernization
    initiatives. Our MMIII has to be sustained to 2030 and we will advocate
    for a follow-on based on our GBSD work. The B-52H will take us past
    2040 as the stand-off platform of choice, with a robust payload,
    unsurpassed range, and the greatest variety of munitions in the
    inventory. The B-2 will be our strategic penetrating platform denying
    safe haven to any adversary. The Long-Range Strike Bomber will make
    sure we can continue to hold the global target set at risk. As our Air
    Launched Cruise Missile becomes obsolete and unsupportable, we will
    field a credible and flexible nuclear deterrent with the stealthy Long-
    Range Standoff missile and consider conventional variants.

                                   CONCLUSION

        Thank you for your continued support of AFGSC. Our enduring
    challenges in AFGSC are: First, to instill a culture where every airman
    understands the special trust and responsibility of nuclear weapons.
    Second, to maintain excellence in our conventional forces. Third, to
    sustain the current force while modernizing for the future.
        Fiscal constraints, while posing planning challenges, do not alter
    the national security landscape or the intent of competitors and
    adversaries. Nor do they diminish the enduring value of long range,
    ``strategic'' forces to our Nation. Although we have less than 1
    percent of the DOD budget, AFGSC nuclear forces help provide the
    ultimate guarantee of national sovereignty and AFGSC conventional
    forces provide joint commanders rapid global combat airpower.
        It is my distinct privilege to lead this elite team and we assure
    you and this committee that AFGSC, working with our joint partners,
    will meet these challenges and provide our Nation with ready forces for
    nuclear deterrence and global strike operations--safe, secure, and
    effective.

        Senator Fischer. Do you anticipate then that 2014 will be
    the completion date?
        General Kowalski. Yes, Senator.
        Senator Udall. Thank you.
        Then for the entire panel, I would like to address the
    triad. Air Force Secretary Donley has stated that as our
    nuclear forces get smaller, ``It's all the more important that
    we maintain a balanced triad.'' General Kehler, who I have had
    the honor to meet and visit with, has repeated similar
    statements about the need to maintain all three legs of our
    nuclear triad.
        Could each of you give me your quick opinion: Do you think
    that the triad is still the best configuration that we have for
    our nuclear forces, and do you see any reason, or would you
    ever that you can foresee suggest that we should abandon the
    triad that we have? Madam Secretary, if we could start with
    you, please.
        Ms. Creedon. Thank you. The Nuclear Posture Review (NPR)
    made clear that it is the position of the administration to
    maintain the triad. That continues to be the position of the
    administration and even, although we've not completed the study
    on new presidential guidance, nevertheless maintaining the
    triad is also an element of that study.
        Senator Fischer. Thank you.

       STATEMENT OF HON. ANDREW C. WEBER, ASSISTANT SECRETARY OF
     DEFENSE FOR NUCLEAR, CHEMICAL, AND BIOLOGICAL DEFENSE PROGRAMS

        Mr. Weber. Yes. I would just add, Senator, that last year
    under the auspices of the Nuclear Weapons Council (NWC) we
    developed a 25-year strategy that aligns our warhead plans as
    well as our platform and delivery system plans. That strategy,
    known as the 3 Plus 2 Strategy, which was briefed to the Senate
    last year, very much maintains our triad as part of our safe,
    secure, and effective deterrent.
        [The prepared statement of Mr. Weber follows:]

                   Prepared Statement by Hon. Andrew C. Weber

                                  INTRODUCTION

        Chairman Udall, Ranking Member Sessions, and members of the
    subcommittee, thank you for giving me the opportunity to testify
    regarding U.S. nuclear forces. It gives me great pleasure to join
    Assistant Secretary of Defense Creedon, General Kowalski, General
    Harencak, and Admiral Benedict to discuss these vital topics.
        I have the privilege of serving as the Assistant Secretary of
    Defense for Nuclear, Chemical, and Biological Defense Programs (NCB),
    as well as the Nuclear Weapons Council (NWC) Staff Director. In this
    capacity, I am the principal advisor to the Secretary of Defense,
    Deputy Secretary of Defense, and the Under Secretary of Defense for
    Acquisition, Technology and Logistics (AT&L) for nuclear matters. AT&L
    plays a key role in managing the U.S. nuclear deterrent and leading the
    Department's efforts to acquire the strategic delivery systems for
    nuclear weapons in order to meet the operational needs of our Armed
    Forces. Chief among my responsibilities are the missions of providing
    the United States and its allies with a safe, secure, and effective
    nuclear deterrent capability and ensuring the nuclear-survivability of
    U.S. military forces and the Department of Defense (DOD)
    infrastructure.
        Today's testimony will focus on DOD's work with the Department of
    Energy (DOE)/National Nuclear Security Administration (NNSA),
    particularly over the past year, to ensure that the United States
    continues to maintain a safe, secure, and effective nuclear deterrent.
    The partnership between the Departments is marked by extensive
    collaboration and a shared commitment to the Nation's security. To
    ensure that the success of this relationship continues, it is essential
    that Congress supports the President's fiscal year 2014 budget request
    for nuclear weapons activities executed by DOD and NNSA. This request
    includes funds to ensure a safe and effective stockpile, to modernize
    the nuclear infrastructure, and to upgrade ballistic missile and bomber
    delivery systems. Today, I would like to share with you the progress
    the NWC has made in ensuring our two Departments achieve its goals and
    our approach to accomplishing these objectives in the coming year.
        Today's fiscal uncertainty presents greater challenge to the
    talented and unique personnel who support the mission of ensuring a
    safe, secure, and effective nuclear deterrent. The challenges facing
    our aging complex continue to demand a highly skilled workforce.
    Civilian hiring restrictions, salary freezes, and possible unpaid
    furloughs and their effects on our readiness are some of my gravest
    concerns.
        Over the past year, the NWC met frequently to focus attention on
    the most pressing challenges faced by the nuclear weapons enterprise.
    These challenges include managing life extension of warheads in the
    U.S. nuclear stockpile, modernization of the nuclear infrastructure
    that supports the stockpile, and modernization of DOD's nuclear
    delivery platforms.
        Additional challenges remain. For example, section 3166 of the
    National Defense Authorization Act for Fiscal Year 2013 establishes a
    congressional advisory panel on governance of the nuclear weapons
    enterprise. Its purpose is to explore options to strengthen governance
    and thereby ensure that national security needs are being effectively
    and efficiently met. The DOD looks forward to the panel's
    recommendations and to follow-on dialogue on this important issue.
        Sufficient and timely funding for the enterprise remains a critical
    challenge for the NWC. The Council has worked hard to align resources,
    plans, and requirements. The NWC performed extensive cost assessments
    and leveraged other programmatic expertise to ensure the NNSA and DOD
    budget request reflects the most urgent priorities of the nuclear
    weapons enterprise. This exercise reflects a much greater level of
    collaboration between the two Departments and an updated review of the
    many demands our aging enterprise requires.

                 A PATH FORWARD FOR A NEW U.S. NUCLEAR POSTURE

        Reversing decades of neglect and addressing the aging nuclear
    enterprise continues to be a priority for the NWC. We must ensure that
    the infrastructure, capabilities, and critical skills needed to support
    the nuclear deterrent are maintained over the long term. The NWC has
    created a long-term strategy to meet our Nation's future deterrence
    needs that better aligns the components of the enterprise so that our
    warfighter is served and our taxpayer is protected. The work of the
    Council has identified the enterprise's most pressing priorities and
    addressed means to ensure that both DOD and DOE were prepared to
    execute these critical modernization programs. The timing of multiple
    life extension programs, competing requirements, higher-than-
    anticipated program costs, and a constrained fiscal environment
    required the NWC to make difficult decisions over the past year.
    maintaining fiscal prudency and revitalizing the nuclear infrastructure
        An effective strategic deterrent consists of more than nuclear
    weapons and their delivery platforms. It also requires an
    infrastructure to provide agile research and development and
    manufacturing capabilities. A responsive infrastructure will provide
    the United States with capabilities to address technical problems in
    the stockpile, or future adverse geopolitical challenges, with a
    substantially smaller stockpile than today's. Recapitalizing the
    Nation's nuclear infrastructure will require significant investments.
    The Departments of Defense and Energy share a common path forward to
    accomplish this task in a responsible, fiscally prudent manner.
        Over the last year, the DOD Office of Cost Assessment and Program
    Evaluation (CAPE) and NNSA collaborated on a joint review of DOD's
    nuclear weapons requirements and funding options, involving potential
    increased efficiencies, to meet those requirements. This holistic look
    enabled the NWC to adjust requirements and prioritize spending, and
    further enhanced the partnership between DOD and DOE/NNSA, as well as
    the NWC's ability to certify annually the NNSA budget.
        Our fiscal year 2014 budget request supports essential DOD
    priorities: research and development to support the Ohio-class
    replacement submarine; life extension of the Trident II D5 missile;
    sustainment of Minuteman III activities; upgrades to the B-2 and B-52H
    heavy bombers; and completion of the Analysis of Alternatives for a
    Long-Range Standoff missile to replace the current air-launched cruise
    missile. Additionally, DOD plans to develop a new penetrating bomber
    and dual-capable aircraft with the F-35 Joint Strike Fighter. Finally,
    DOD is modernizing the command and control network that detects and
    characterizes an attack and links nuclear delivery systems to
    Presidential authority.
        To address the aging weapons infrastructure, the NWC is advancing
    its plutonium strategy including options to replace the aging,
    unsupportable Chemistry and Metallurgy Research facility that currently
    provides plutonium capabilities.
        After careful consideration of requirements, competing priorities,
    and existing capabilities, the administration decided to defer
    construction of the Chemistry and Metallurgy Research Replacement-
    Nuclear Facility (CMRR-NF) by at least 5 years. This deferral allowed
    us to address competing demands such as construction of the Uranium
    Processing Facility at Y-12, which now has a sufficient funding
    profile, resulting in reduced life cycle cost and reduced risk to
    ongoing highly-enriched uranium operations at antiquated existing
    facilities. It also provided flexibility to address critical warhead
    Life Extension Programs (LEP) for the W76-1, the B61-12 bomb, and the
    W78/88-1 interoperable warhead.
        We recognize that an enduring pit production capacity is needed not
    only to support current and future LEPs, but also, as pointed out
    earlier, to provide an ability to respond to technical failure in the
    stockpile or geopolitical reversals. To manage the risk of deferral, we
    must develop means, in the near term, to respond more rapidly to
    technical or geopolitical challenges pending the coming on line of
    planned enduring production capacity. The NWC approach to managing this
    risk includes a resourced plan to utilize pit reuse in ongoing LEPs
    while growing the manufacturing capacity we have today to 10 pits per
    year by 2019, 20 pits per year by 2020, and 30 pits per year by 2021.
    All of this is contingent upon the sustainment of today's capabilities
    for analytical chemistry and other processes in support of pit
    production. It is also contingent on congressional approval of NNSA's
    fiscal year 2012 $120 million reprogramming request to provide funds to
    carry out these activities.
        To ensure the Nation maintains an enduring plutonium capability,
    NNSA is working with the NWC to advance a strategy to support both
    near- and long-term stockpile requirements. We are exploring a concept
    that would provide the essential capabilities planned for CMRR with a
    phased, more responsive, and more readily implementable approach. This
    approach will also provide opportunities to address aging issues
    associated with LANL's PF-4 pit manufacturing facility.
        Initial concept review suggests a new, modular concept could serve
    the warfighter's needs in a way that best protects the taxpayer. We
    need to conduct more analysis. Over the next 2 months, the NWC, with
    support from DOD's CAPE organization, will work with Los Alamos to
    carry out a comparative analysis of the concept; address risks and
    benefits, pros and cons; and gain some initial insights into
    feasibility of delivery of key capabilities earlier than planned for
    CMRR-NF. If the concept is assessed to be feasible, and with
    congressional support, NNSA will develop its plan to move forward on
    engineering development and construction for this new, modular
    approach. We remain committed to a modern responsive nuclear weapons
    infrastructure that recognizes the new fiscal realities we now face and
    look forward to congressional engagement on our activities.
        As with any major systems acquisition program, building large, one-
    of-a-kind nuclear facilities presents significant challenges in terms
    of planning, design, and development--one of our principal requirements
    in today's fiscally constrained environment is to control costs.

                           DOD STOCKPILE REQUIREMENTS

        Looking to the future of the nuclear arsenal, DOD and NNSA are
    moving forward with several weapon system LEPs in fiscal year 2014 to
    support long-term deterrent capabilities. The B61-12 and W76-1 LEPs are
    the most critical LEPs to our stockpile, and NNSA will continue funding
    these LEPs in fiscal year 2014. Given fiscal challenges, the NWC agreed
    that slipping the W78/88-1 interoperable warhead and W88 alteration
    created manageable risk while allowing resources to continue to support
    the B61-12 and W76-1 LEPs. These decisions allow us to meet Air Force
    and Navy requirements while more efficiently managing annual costs
    among our various programs.
        In 2012 DOD and NNSA entered into Phase 6.2, Feasibility Study and
    Option Down-select, for the W78/W88-1 interoperable warhead study to
    examine a warhead option that could be deployed with both
    intercontinental ballistic missiles (ICBMs) and submarine-launched
    ballistic missiles (SLBMs). To leverage this effort, DOE, the Air
    Force, and the Navy are teaming to develop a modern Arming, Fuzing and
    Firing (AF&F) system, initially for the W87 ICBM warhead, but adaptable
    for use in a W78/W88-1 interoperable warhead. Efforts to develop an
    interoperable warhead for deployment on multiple platforms would allow
    the DOD to reduce the number of warhead types and the number of Reserve
    warheads needed to hedge against unforeseen technical or geopolitical
    contingencies. When fielded, the W78/W88-1 LEP interoperable warhead
    will provide opportunity for further reductions in Reserve warheads.
    Warhead interoperability would also allow for substantial reductions in
    life-cycle and production costs. The Secretaries of the Air Force and
    Navy, and the NWC will provide statements and assessments of these
    plans to Congress pursuant to section 1044 of theNational Defense
    Authorization Act for Fiscal Year 2013.
        For the bomber leg of the Triad, DOD requires life extension of the
    B61 gravity bomb. The B61 mod 3/4 non-strategic bombs are deployed with
    NATO dual capable aircraft to provide U.S. extended deterrence to our
    allies. The B61-7/11 strategic bombs are carried by the B-2 bomber and
    are an essential component of air-delivered strategic deterrence. In
    April 2010, the Nuclear Posture Review reaffirmed both the extended and
    strategic deterrent roles of the B61 and directed proceeding with its
    full-scope life extension. The result will be a single bomb, termed the
    B61 mod 12, which will replace four types of the B61--one strategic and
    three non-strategic--further promoting efficiencies and minimizing
    costs.
        The B61-12 is currently in Phase 6.3, Development Engineering and
    is on schedule for this year's milestones. We have worked successfully
    to ensure that the development of DOD-provided hardware, in this case,
    a tail kit, is on track to meet LEP requirements. The Air Force has
    funded both the tail kit development and production to synchronize with
    NNSA needs as well as the cost of integration of the B61-12 digital
    electronics into the B-2 Bomber. The overall LEP schedule has been
    revised for DOE/NNSA to complete the first production unit by no later
    than the end of fiscal year 2019. Meeting this date for the first
    production unit is essential to meeting U.S. Strategic Command's
    requirements and also critical in meeting U.S. commitments to our NATO
    allies to sustain their non-strategic nuclear capabilities and to
    provide extended deterrence. As the effects of sequestration unfold,
    the NWC will carefully monitor potential impacts to the B61-12 and
    mitigate risk to our extended deterrence commitments. We are acutely
    aware of the burgeoning costs of the B61-12 LEP; increased management
    attention is essential to controlling these costs.
        In addition to our efforts to revitalize weapons, delivery systems
    and facilities, we continue efforts to enhance physical security in the
    nuclear enterprise. The July 2012 protestor incursion at the Y-12
    facility highlighted the need for continued collaborative efforts to
    address physical security challenges within both DOE and DOD. Most
    notably, in the 2011 U.S. Nuclear Physical Security Collaboration
    Memorandum, we formalized collaboration between DOD and DOE and agreed
    to common protection standards for nuclear weapons and materials.

                       EFFORTS TO COUNTER NUCLEAR THREATS

        Finally, I want to highlight DOD's efforts to counter nuclear
    threats, including those efforts that help ensure that terrorists and
    proliferators cannot access nuclear materials and expertise abroad.
    Since September 11, 2001, there has been valuable collaboration on this
    goal at the Federal level. President Obama has called nuclear weapons
    in the hands of terrorists ``the single biggest threat to U.S.
    security.'' As President Obama pointed out, just one nuclear weapon
    detonated in an American city would devastate ``our very way of life''
    and represent a ``catastrophe for the world.'' For this reason, this
    administration has outlined a series of policies that reflect the
    gravity of this threat, and the interagency has made significant
    improvements in working to prevent, and preparing mitigation actions
    for, catastrophic nuclear events.
        One of DOD's priorities is to truly ``internationalize'' the
    response to the nuclear terrorism threat. The United States has been
    aggressive in its threat reduction efforts, but it cannot meet this
    challenge alone. In President Obama's view, there is a pressing need to
    ``deepen our cooperation and to strengthen the institutions and
    partnerships that help prevent nuclear materials from ever falling into
    the hands of terrorists.'' To this end, we are expanding nuclear
    counterterrorism and threat reduction cooperation with two of our
    closest allies, the United Kingdom and France, building on all three
    countries' technical expertise and history of cooperation. At the 2012
    Nuclear Security Summit, the three governments released a joint
    statement pledging cooperation and assistance to others facing nuclear
    terrorism threats. However, this work cannot be limited to a handful of
    countries. For this reason, we have made building international
    partnership capacity a high priority.
        Next year, the third Nuclear Security Summit will be held in the
    Hague, Netherlands. This gathering brings together heads of state and
    international organizations to address measures to combat the threat of
    nuclear terrorism, protect nuclear materials, and prevent the illicit
    trafficking of nuclear materials. First introduced by President Obama
    in Prague in 2009, the Summit process formally began in Washington, DC,
    in 2010 and endorsed the President's call for an international effort
    to secure all vulnerable fissionable materials worldwide. The United
    Stateshas contributed to this global effort through an interagency
    strategy to eliminate as much material as practicable and ensure that
    all remaining sites are secured at least to the guidelines set forth by
    the International Atomic Energy Agency. DOD has supported this effort
    by working to secure weapons-usable nuclear material in Russia and
    Kazakhstan and is expanding its efforts to collaborate with Japan,
    China, India through their planned nuclear security training centers.
    Ensuring that all nuclear material remains secure remains the first
    priority, but there are also critical efforts underway to address the
    risks of lost or stolen nuclear material and build capacity for
    responding to incidents involving nuclear material. DOD contributes to
    these activities by building partner capacity in detection,
    interdiction, border security and emergency response. While the focused
    4-year effort concludes at the end of calendar year 2013, nuclear
    security is an enduring responsibility as long as nuclear materials
    exist. To this end, DOD is exploring the potential for establishing
    national-level systems for nuclear material tracking. These systems
    would be designed to monitor and track nuclear material in use, storage
    and transit across all the nuclear facilities within a country's
    borders. In addition to providing assurance that nuclear material
    remains secure and in authorized locations, such systems would improve
    capability to counter insider threats and sustain nuclear security
    efforts over the long-term. NCB oversees the implementation of DOD's
    efforts in support of the President's nuclear security agenda.
        On the domestic front, the Nuclear Weapons Accident Program focuses
    on developing the capabilities required to mitigate the consequences of
    a U.S. nuclear weapon accident or incident. This full-scale national-
    level exercise program is shared among the Air Force, Navy, and DOE/
    NNSA and addresses non-terrorist driven events in addition to those not
    caused by malevolent actions. We look forward to ongoing collaboration
    in future exercises and to continued progress in preparing for
    potentially catastrophic events.

                                   CONCLUSION

        The nuclear threat to the United States has evolved considerably
    since the end of the Cold War. No longer does the threat of a large-
    scale nuclear exchange hover constantly over the world. Yet, we cannot
    afford to be complacent. We must continue to field a strong nuclear
    deterrent that is supported by an agile and responsive infrastructure
    and we must continue to carry out the threat reduction and
    nonproliferation activities that help to manage nuclear terrorist
    threats. DOD remains committed to its vital partnership with DOE in
    meeting the Nation's most fundamental security needs. In closing, I
    respectfully ask for your support for the President's fiscal year 2014
    budget request. This will ensure that we are fully capable of providing
    safety and security to the American people.

        Senator Fischer. Thank you.
        General Kowalski. Senator, the triad is complementary. It's
    not redundant. When you look at the risks to our nuclear force,
    the three major risks that were outlined in the NPR were:
    first, the risk of a technological disruption; second, a risk
    of a technical failure with one leg of the triad; and third, a
    risk of geopolitical breakout or change in the world.
        When you evaluate all of those risks and then you look at
    the legs of the triad that we have today, that's a good balance
    and a good mix and a relatively inexpensive way to provide that
    sense of the ultimate guarantee of national sovereignty.
        Senator Fischer. Thank you.

               STATEMENT OF RADM TERRY J. BENEDICT, USN,
                  DIRECTOR, STRATEGIC SYSTEMS PROGRAMS

        Admiral Benedict. Senator, I fully support the concept of a
    triad and I foresee no issues that would change that status in
    the future.
        [The prepared statement of Rear Admiral Benedict follows:]

               Prepared Statement by RADM Terry J. Benedict, USN

                                  INTRODUCTION

        Chairman Udall, Ranking Member Sessions, distinguished members of
    the subcommittee, thank you for this opportunity to discuss Navy's
    strategic programs. It is an honor to testify before you this morning
    representing the Navy's Strategic Systems Programs (SSP).
        SSP's mission is to design, develop, produce, support, and ensure
    the safety of our Navy's sea-based strategic deterrent, the Trident II
    (D5) Strategic Weapon System (SWS). The men and women of SSP and our
    industry partners remain dedicated to supporting the mission of our
    sailors on strategic deterrent patrol and our marines and sailors who
    are standing the watch, ensuring the security of the weapons we are
    entrusted with by this Nation.
        The Navy provides the most survivable leg of the U.S. nuclear triad
    with our ballistic missile submarines (SSBNs) and the Trident II (D5)
    SWS. A number of factors have contributed to an increased reliance on
    the sea-based leg of the triad. The 2010 Nuclear Posture Review
    reinforced the importance of the SSBNs and the SLBMs they carry. SLBMs
    will comprise a majority of the Nation's operationally deployed nuclear
    warheads, thus increasing the Nation's reliance on the sea-based leg.
        Ensuring the sustainment of the sea-based strategic deterrent
    capability is a vital, national requirement today and into the
    foreseeable future. Our budget request provides the required funding in
    fiscal year 2014 for the Trident II (D5) SWS. To sustain this
    capability, I am focusing on five priorities: Nuclear Weapons Safety
    and Security; the Trident II (D5) SWS Life Extension Program; the Ohio
    Replacement Program; the Solid Rocket Motor (SRM) Industrial Base; and
    Collaboration with the Air Force. Today, I would like to discuss my
    five priorities and why these priorities are key to the sustainment of
    the Navy's sea-based strategic deterrent and its future viability.

                      NUCLEAR WEAPONS SAFETY AND SECURITY

        The first priority I would like to address, and the most important,
    is the safety and security of the Navy's nuclear weapons. Navy
    leadership has clearly delegated and defined SSP's role as the program
    manager and technical authority for the Navy's nuclear weapons and
    nuclear weapons security.
        At its most basic level, this priority is the physical security of
    one of our Nation's most valuable assets. Our Marines and Navy Masters
    at Arms provide an effective and integrated elite security force at our
    two Strategic Weapons Facilities and Waterfront Restricted Areas in
    Kings Bay, GA and Bangor, WA. U.S. Coast Guard Maritime Force
    Protection Units have been commissioned at both facilities to protect
    our submarines as they transit to and from their dive points. These
    Coast Guardsmen and the vessels they man provide a security umbrella
    for our Ohio-class submarines. Together, the Navy, Marine Corps, and
    Coast Guard team form the foundation of our Nuclear Weapons Security
    Program.
        SSP's efforts to sustain the safety and improve the security of
    these national assets continue at all levels of the organization. My
    command maintains a culture of self-assessment in order to sustain
    safety and security. We continue to focus on the custody and
    accountability of the nuclear assets that have been entrusted to the
    Navy. SSP's number one priority is to maintain a safe, secure, and
    effective strategic deterrent.

                           D5 LIFE EXTENSION PROGRAM

        The next priority I would like to discuss is SSP's life extension
    efforts to ensure a future, effective and reliable sea-based deterrent.
    The Trident II (D5) SWS continues to demonstrate itself as a credible
    deterrent and exceeds the operational requirements established for the
    system almost 30 years ago. Our allies and any potential rivals are
    assured the U.S. strategic deterrent is ready, credible, and effective.
    However, we must remain vigilant about age-related issues to ensure a
    continued high level of reliability.
        The Trident II (D5) SWS has been deployed on our Ohio-class
    ballistic missile submarines for over 20 years, and is planned for a
    service life of 50 years. This is well beyond its original design life
    of 25 years and more than double the historical service life of any
    previous sea-based deterrent system. As a result, significant effort
    will be required to sustain a credible and viable SLBM force from now
    until the end of the current Ohio-class SSBN in the 2040s as well as
    the end of the service life of the Ohio Replacement SSBN in the 2080s.
        The Navy is proactively taking steps to address aging and
    technology obsolescence. SSP is extending the life of the Trident II
    (D5) SWS to match the Ohio-class submarine service life and to serve as
    the initial baseline mission payload for the Ohio Replacement submarine
    platform. This is being accomplished through an update to all the
    Trident II (D5) SWS subsystems: launcher, navigation, fire control,
    guidance, missile, and reentry. Our flight hardware--missile and
    guidance--life extension efforts are designed to meet the same form,
    fit and function of the original system, in order to keep the deployed
    system as one homogeneous population, to control costs and sustain the
    demonstrated performance of the system. We will also remain in
    continuous production of energetic components such as solid rocket
    motors. These efforts will provide the Navy with the missiles and
    guidance systems we need to meet operational requirements.
        In 2012, the Navy conducted the first flight test of the D5 life-
    extension (LE) guidance system. The second guidance flight test is
    scheduled in the third quarter of fiscal year 2013. This past year, the
    D5 LE command sequencer completed its package qualification. The
    remaining electronics packages are on schedule.
        Another major step to ensure the continued sustainment of our SWS
    is our SSP Shipboard Integration efforts, which utilize open
    architecture and commercial off-the-shelf hardware and software for
    shipboard systems. The first increment of this update is being
    installed throughout the fleet and training facilities. To date,
    installation is complete on 12 U.S. SSBNs and all 4 U.K. SSBNs. This
    effort is a technical obsolescence refresh of shipboard electronics
    hardware and software upgrades, which will provide greater
    maintainability of the SWS and ensure we continue to provide the
    highest nuclear weapons safety and security for our deployed SSBNs.
        To sustain the Trident II (D5) SWS, SSP is extending the life of
    the W76 reentry system through a refurbishment program known as the
    W76-1. This program is being executed in partnership with the
    Department of Energy, National Nuclear Security Administration. The
    W76-1 refurbishment maintains the military capability of the original
    W76 for an additional 30 years.
        The Navy is also in the initial stages of refurbishing the W88
    reentry system. The Navy is collaborating with the Air Force to reduce
    costs through shared technology. In particular, the Air Force and Navy,
    consistent with Nuclear Weapon's Council direction, are conducting
    studies examining the feasibility of a joint approach for fuzes for the
    Navy's Mk5/W88, the Air Force's Mk21/W87 and the future W78 and W88
    Life Extension Programs. We believe the joint replacement fuze program
    is feasible and has the potential of several major benefits for the
    Nation, including the potential to achieve significant cost savings.

                            OHIO REPLACEMENT PROGRAM

        The next priority, which is also one of the Navy's highest, is the
    Ohio Replacement Program. The continued assurance of our sea-based
    strategic deterrent requires a credible SWS as well as the development
    of the next class of ballistic missile submarines. The Navy team is
    taking aggressive steps to ensure the Ohio Replacement SSBN is
    designed, built, delivered, and tested on time with the right
    capabilities at an affordable cost.
        The Ohio Replacement Program will replace the existing Ohio-class
    submarines. To lower development costs and leverage the proven
    reliability of the Trident II (D5) SWS, the Ohio replacement SSBN will
    enter service with the Trident II (D5) SWS and D5 life-extended
    missiles onboard. These D5 life extended missiles will be shared with
    the existing Ohio-class submarine until the current Ohio-class retires.
    Maintaining one SWS during the transition to the Ohio-class replacement
    is beneficial from a cost, performance, and risk reduction standpoint.
        The Navy team continues to leverage from the Virginia-class program
    to implement lessons-learned and ensure the Ohio replacement program
    pursues affordability initiatives and life cycle operations and
    support. Maintaining this capability is critical to the continued
    success of our sea-based strategic deterrent now and well into the
    2080s.
        A critical component of the Ohio Replacement Program is the
    development of a common missile compartment that will support Trident
    II (D5) deployment on both the Ohio-class Replacement and the successor
    to the U.K. Vanguard-class. While lead ship construction has shifted
    from 2019 to 2021, we are maintaining the original program of record
    for the design of the common missile compartment and SWS deliverables
    in order to meet our obligations to the United Kingdom. The United
    States and United Kingdom are working jointly to prioritize risk and
    develop a mitigation plan under the auspices of the Polaris Sales
    Agreement. Any delay to the common missile compartment has the
    potential to impact the U.K.'s ability to maintain a continuous at sea
    deterrent posture.
        The United States and the United Kingdom have maintained a shared
    commitment to nuclear deterrence through the Polaris Sales Agreement
    since April 1963. This month marks the 50th anniversary of this
    agreement, and I am pleased to report that our longstanding partnership
    with the United Kingdom remains strong. The United States will continue
    to maintain its strong strategic relationship with the United Kingdom
    as we execute our Trident II (D5) Life Extension Program and as we
    develop the common missile compartment.
        As the Director of SSP, I am the U.S. Project Officer for the
    Polaris Sales Agreement. Our programs are tightly coupled both
    programmatically and technically to ensure we are providing the most
    cost effective, technically capable nuclear strategic deterrent for
    both nations.
        Our continued stewardship of the Trident II (D5) SWS is necessary
    to ensure a credible and reliable SWS is deployed today on our Ohio-
    class submarines, the U.K. Vanguard-class, as well as in the future on
    our respective follow-on platforms. This is of particular importance as
    the reliance on the sea-based leg of the Triad increases as New START
    treaty reductions are implemented. The Ohio replacement will be a
    strategic, national asset whose endurance and stealth will enable the
    Navy to provide continuous, uninterrupted strategic deterrence into the
    2080s.

                    SOLID ROCKET MOTOR (SRM) INDUSTRIAL BASE

        The fourth priority I would like to discuss is the importance of
    the defense and aerospace industrial base. In particular, the decline
    in demand for the SRM industry has placed a heavy burden on Navy
    resources. The Navy is maintaining a continuous production capability
    at a minimum sustaining rate of twelve rocket motor sets per year.
    However, we previously have faced significant cost challenges as both
    NASA and Air Force demands have declined.
        Over the past few years, the Navy has worked with our industry
    partners to reduce overhead costs and minimize cost increases to the
    Department. Despite many efforts to address this issue, the industrial
    base remains volatile. Potential future unit cost increases due to
    further decline in SRM industrial base demand could impact the D5 Life
    Extension Program. We will continue to cautiously monitor the
    industrial base.
        SSP will continue to work with our industry partners, DOD, senior
    NASA leadership, Air Force and Congress to sustain the Solid Rocket
    Motor industrial base and find ways to maintain successful partnerships
    to ensure this vital national capability is preserved.

                        COLLABORATION WITH THE AIR FORCE

        The final topic I would like to address is strategic collaboration
    between the Services. The Navy and the Air Force are both addressing
    the challenges of sustaining aging strategic weapon systems and have
    begun to work collaboratively to ensure these capabilities are retained
    in the long-term to meet our requirements. To do so, we are seeking
    opportunities to leverage technologies and make the best use of scarce
    resources.
        The Navy and the Air Force have established an Executive Steering
    Group to identify and investigate potential collaboration opportunties
    and oversee collaborative investments for sustainment of our strategic
    systems. As a part of this effort, technology area working groups have
    been established to study collaboration opportunities in the areas of
    Reentry, Guidance, Propulsion, Launcher, Radiation Hardened
    Electronics, Ground Test and Flight Test systems, and Nuclear Weapons
    Security/Surety. In accordance with the joint explanatory statement of
    the conference report accompanying the National Defense Authorization
    Act for Fiscal Year 2013, the Navy and Air Force will brief the
    congressional defense committees later this year on efforts that can be
    jointly undertaken and cost-shared.
        The entire spectrum of potential commonality must be analyzed with
    the goal of using commonality where appropriate while ensuring
    essential diversity where needed, and being good stewards of taxpayer
    funds. The timing is now to address collaboration opportunities to
    maintain our ballistic missile capability in the long-term.

                                   CONCLUSION

        SSP continues to maintain a safe, secure, and effective strategic
    deterrent capability and focus on the custody and accountability of the
    nuclear assets entrusted to the Navy. Our budget request provides the
    necessary funds to sustain this capability in fiscal year 2014.
    However, we must continue to be vigilant about unforeseen age-related
    issues to ensure the high reliability required of our SWS. SSP must
    maintain the engineering support and critical skills of our industry
    and government team to address any future issues with the current
    system as well as prepare for the future of the program.
        Our Nation's sea-based deterrent has been a critical component of
    our national security since the 1950s and will continue to assure our
    allies and deter our rivals well into the future. I am privileged to
    represent this unique organization as we work to serve the best
    interests of our great Nation.

        Senator Fischer. Good to hear. Thanks.

            STATEMENT OF MAJ. GEN. GARRETT HARENCAK, USAF,
      ASSISTANT CHIEF OF STAFF, STRATEGIC DETERRENCE AND NUCLEAR
                              INTEGRATION

        General Harencak. Senator, the triad is one of those
    enduring ideas that, regardless of the fact that the world has
    changed many times since we first embarked on a triad, it has
    proven itself to be one of those ideas that time has not come
    to get rid of it. It is as relevant today as it was when we
    first embarked this decades ago.
        [The prepared statement of Major General Harencak follows:]

             Prepared Statement by Maj. Gen. Garrett Harencak, USAF

                                  INTRODUCTION

        Chairman Udall, Ranking Member Sessions, and distinguished members
    of the committee, thank you for the opportunity to discuss Air Force
    strategic programs.
        As the Assistant Chief of Staff for Strategic Deterrence and
    Nuclear Integration, my team, on behalf of the Chief of Staff of the
    Air Force, leads planning, policy development, advocacy, integration,
    and assessment for the airmen and weapon systems performing Nuclear
    Deterrence Operations, a core function of our U.S. Air Force.
    Stewardship of the nuclear enterprise remains a top Air Force priority,
    in fulfillment of the President's mandate that the United States
    maintain a safe, secure, and effective deterrent as long as these
    weapons exist. While the challenges our Air Force faces in today's
    fiscally constrained environment are numerous, we remain committed to
    making the necessary investments in the sustainment and modernization
    of our nuclear deterrence capabilities, and in the stewardship of our
    airmen responsible for this vital mission.

                     NUCLEAR DETERRENCE IN THE 21ST CENTURY

        For 21st century deterrence, one size does not fit all.
    Successfully deterring near-peers and other nuclear-armed states
    requires new thinking and tailored application. However, deterrence
    must, as it always has, deny adversaries the incentive to use their
    nuclear capabilities. The non-peer case may be the most challenging,
    and will require a renewed understanding of what motivates these actors
    as well as critical thinking on how best to address the threats they
    pose.
        As affirmed in the January 2012 Strategic Guidance, our power
    projection capabilities must remain credible in the eyes of potential
    adversaries across the spectrum of conflict, increasingly so in pre-
    crisis situations. In regional contexts, the assurances and extended
    deterrence the United States provides to our allies are integral to
    strengthening security relationships and supporting nonproliferation
    goals. The employment of B-52 and B-2 bombers over the Korean Peninsula
    in the March 2013 Foal Eagle exercise recently demonstrated how the
    United States can simultaneously signal resolve to our allies and deter
    aggression. Such effects are highly valuable and increase in importance
    in a complex, multi-polar environment.

                 PRIORITIZING INVESTMENT ACROSS THE ENTERPRISE

        In order to invest in only the highest priority needs across the
    nuclear enterprise, the Air Force has continued to rigorously assess
    the objectives of every program relative to its cost. In some
    instances, we have found it necessary to restructure, defer, or
    terminate programs with unsustainable cost growth and technical
    challenges--for example, with the Common Vertical Lift Support Platform
    program, and the Family of Advanced Beyond Line-of-Sight Terminals.
    These decisions are difficult and often carry commensurate risks that
    must be continuously balanced against operational requirements.
        The B61 Life Extension Program (LEP) remains one of our most
    important priorities. As the primary gravity weapon employed by our
    long-range bombers and dual-capable aircraft, the B61 plays a central
    role in providing extended deterrence and assurance to our allies.
    Originally designed and fielded in the 1960s, the aging B61 will fail
    to meet requirements early in the next decade. By consolidating four
    existing B61variants into a single one--the B61-12--the LEP will result
    in a safer and more reliable weapon with reduced sustainment costs.
    While refurbishment of the B61's nuclear explosive package is the
    responsibility of the Department of Energy (DOE), the Air Force is
    responsible for the B61-12 Tailkit Assembly (TKA), as well as
    integration of the weapon on its various platforms. The November 2012
    award of the B61-12 TKA development contract was an important milestone
    in the Air Force's commitment to meeting DOE's anticipated delivery of
    the B61-12 first production unit in fiscal year 2019.
        Progress continues apace on an array of modernization programs for
    our capable yet aging fleet of long-range B-52 and B-2 bombers. These
    assets provide the President with the ability to hold at risk virtually
    any target on the globe with a full range of conventional and nuclear
    weapons. On a daily basis, this highly valuable, Air Force-unique
    capability forces adversaries who consider threatening our national
    interests and those of our allies to confront the potential costs of
    losing what they hold most dear. Despite continual investments in the
    B-2--our only long-range, direct-strike asset capable of penetrating in
    anti-access/area denial environments--over time the ability of this
    platform to prevail against advanced emerging threats is projected to
    diminish.
        For that reason, efforts are underway to develop and field the
    Long-Range Strike Bomber (LRS-B), a Department of Defense commitment to
    ensuring the United States maintains its ability to project power
    globally in the decades to come. To deliver a force of 80-100 of these
    new bombers beginning in the mid-2020s, we are relying upon a
    streamlined acquisition strategy that balances capability with
    affordability. While the requirement for a new bomber is being driven
    primarily by a validated gap in conventional capability, LRS-B will be
    nuclear-capable at Initial Operational Capability, and nuclear-
    certified 2 years later.
        In concert with LRS-B, the Long-Range Standoff (LRSO) program--the
    follow-on nuclear-capable cruise missile that will replace the 1980s-
    era Air Launched Cruise Missile (ALCM)--is advancing. Notably, the LRSO
    Analysis of Alternatives (AoA) was recently completed and is pending
    validation by the Joint Requirements Oversight Counsel (JROC) in May
    2013. LRSO will be designed at its outset to be compatible with the B-
    52, B-2, and LRS-B. We are collaborating closely with DOE to select a
    life-extended warhead for LRSO that will ensure the system remains a
    highly credible deterrent in the decades to come. In the meantime, a
    comprehensive service life extension program is underway for the ALCM
    that will sustain its effectiveness through 2030.
        We are executing a similarly robust modernization plan for our
    Nation's Intercontinental Ballistic Missile (ICBM) deterrent, the
    Minuteman III, to ensure it remains effective and credible through
    2030. In support of that objective, multiple lines of effort are
    underway that will update its fuzing, solid rocket motor, and guidance
    systems. Looking beyond 2030, efforts commenced last year to evaluate
    initial requirements and capabilities for a Ground Based Strategic
    Deterrence (GBSD) ICBM follow-on program. In August 2012, the JROC
    validated the GBSD Initial Capabilities Document, and completion of a
    formal AoA is expected in fiscal year 2014.
        The Air Force continues to strengthen all aspects of the nuclear
    security mission at our installations in the United States and abroad.
    In recent years, integration of state-of-the-art detection, assessment,
    and denial technologies throughout our weapons storage areas, ICBM
    silos, and other nuclear-related sites have provided our highly-skilled
    and motivated security forces with the tools and capabilities they need
    to face any potential threat. The opening of the Air Force's new
    Nuclear Security Tactics Training Center last December at Camp
    Guernsey, WY, further enhances the readiness of our airmen entrusted
    with nuclear security responsibilities.
        Lastly, I am pleased that ongoing efforts by Air Force and Joint
    stakeholders to renew focus on our Nation's aging Nuclear Command,
    Control, and Communications (NC3) architecture have begun yielding
    measureable progress. The effectiveness of our NC3 platforms, systems,
    and facilities to support timely and informed decision making during
    times of crisis and war is critically important to ensuring strategic
    stability. As the Air Force is responsible for a major portion of our
    Nation's NC3 systems, we are leading efforts to develop a synchronized
    investment strategy for NC3 modernization and recapitalization. Towards
    that end, over the past 3 years, the Air Force has established strong
    partnerships internally and across the Department of Defense to codify
    and refine NC3 responsibilities and to align investment priorities.

                            NEW START IMPLEMENTATION

        Under the terms of the New START treaty (NST) which entered into
    force in February 2011, the United States and Russian Federation are
    obligated to reduce and limit their strategic forces in accordance with
    the treaty's central limits no later than February 2018. In order to
    ensure our ICBM and heavy bomber force is compliant with NST's central
    limits by the deadline, we have fully funded implementation activities
    necessary to achieve the baseline force structure previously reported
    to Congress. While a final NST force structure decision is pending, the
    Air Force has begun working to eliminate treaty-accountable systems no
    longer used to perform the nuclear mission. These activities include
    the elimination of non-operational heavy bombers at Davis-Monthan Air
    Force Base, as well as environmental assessments required to eliminate
    empty, non-operational ICBM silos.

                                 HUMAN CAPITAL

        Every day, roughly 36,000 airmen perform Nuclear Deterrence
    Operations throughout the Air Force. These exceptional professionals
    provide the highest levels of stewardship to ensure our deterrent
    remains safe, secure, and effective. We continue to institutionalize
    fixes and create an enduring culture of accountability, compliance, and
    self-assessment throughout our nuclear units. While not conclusive
    indicators, positive trends such as increasing pass rates and a
    leveling of repeat deficiencies in our rigorous nuclear inspection
    program reflect the considerable progress we have made in recent years.
        After concluding that we could do more to support the development
    of our nuclear-focused airmen, in February 2013 the Air Force approved
    a recommendation to split the career field for space and ICBM
    operations into two distinct fields. This realignment underpins a more
    deliberate approach to cultivating field-grade officer nuclear
    expertise and developing ICBM-focused commanders.

                                    CLOSING

        Maintaining ready, diverse, and resilient nuclear deterrence
    capabilities is critical to ensuring stability in today's profoundly
    complex and evolving national security paradigm. The distinctive
    attributes of the Air Force's deterrent forces--the responsiveness of
    the ICBM and the flexibility and visibility of the bomber--are ideally
    suited to meet this challenge. As the challenges to maintaining
    stability inevitably grow in the years to come, the United States must
    be prepared to meet them.
        The President's fiscal year 2014 budget submission makes hard
    choices, but retains the commitment to a strong nuclear deterrent
    through modernization and recapitalization programs. That commitment is
    made manifest every day by the airmen performing deterrence operations,
    who demonstrate those capabilities with precision and reliability. They
    are trustworthy stewards of our most powerful weapons, vital to our
    Nation as we endeavor to maintain stability in the 21st century.

        Senator Fischer. Thank you, General. Thank you to all the
    panel.
        Thank you, Mr. Chairman.
        Senator Udall. Thank you, Senator Fischer.
        Secretary Creedon, let me turn back to you. I want to ask
    you about the fiscal year 2014 budget. How does the fiscal year
    2014 budget request reflect force structure changes associated
    with the New START treaty?
        Ms. Creedon. The way that the fiscal year 2014 budget
    request is structured is it allows both the Air Force and the
    Navy to continue their preparatory work that will support a
    decision that will be made in the context of fiscal year 2015
    to implement either a reduction in the total number of deployed
    and total number of delivery systems. So, that could be
    reductions in ICBMs or that could be reductions in the number
    of tubes, in other words on submarines, so that the tubes could
    be modified so that they would no longer be capable of
    launching a submarine-launched ballistic missile (SLBM).
        The decision as to which of those options we choose has not
    been made yet, but the way that the 2014 budget structure is
    designed is to preserve the option as we get closer in time, as
    we understand more about the pros and cons of each option, and
    frankly, as we get more into where the whole geopolitical
    situation is going, where we're going with further discussions
    with Russia, it allows us to maintain that flexibility for as
    long as possible before we make a decision.
        Senator Udall. Let me talk about the recent ICBM test
    launch out of Vandenberg that was cancelled in an effort to
    prevent escalation of the current tensions with North Korea.
    Those launches have been underway for 20 years, you well know,
    and they're important to ensuring the reliability of our
    deterrent. Do you anticipate any additional delays for this
    testing program?
        Ms. Creedon. At the moment, Senator, as you indicated, we
    thought it was wise to postpone for a while the last launch
    because of the situation on the Korean Peninsula. Right now it
    is the plan of DOD and it's the plan of the Air Force to do the
    next launch on time. We have a window of May 21 to 23. That is
    the current schedule.
        What we've actually done is the system that was going to be
    launched--so that this particular launch is actually just going
    to move to the right, and so we'll move everything to the right
    a little bit. We do recognize very much the importance of these
    tests, not only to DOD, but also to DOE, because they're also a
    significant participant in these tests.
        They do provide valuable information and we need to make
    sure that these go forward. It was a situation that we just
    wanted to deal with in a way the we didn't increase the
    provocation cycle that's been going on on the Korean Peninsula.
    So we thought it was a prudent idea to postpone for a short
    while this test. But at the moment, as I say, we're on track to
    do it again in May.
        Senator Udall. That update's appreciated.
        Let me stay on the subject of North Korea. As I mentioned
    in my opening remarks, this crisis has again underlined the
    importance of our deterrent. Very recently three B-2 and then
    four B-52H aircraft participated in a joint training exercise
    on the peninsula, and this was especially important, as I see
    it, to South Korea as a demonstration of our nuclear umbrella.
        Do you see any signs that nations that are protected by our
    nuclear assurance are questioning our resolve in this area?
    Should they have any reason for concern?
        Ms. Creedon. They should not. We have a very extensive
    dialogue. There are two sets of bilateral dialogues, one with
    Japan and one with the South Koreans. We spend a lot of time on
    these dialogues. They're extraordinarily important that they
    have complete and total confidence in our strategic deterrent.
        Last week we just had yet another one of these dialogues.
    They were with the Japanese and we took them up to Bangor. The
    Navy was quite an extraordinary host in terms of providing an
    insight into the capabilities of the Navy. Previously, we had
    had the South Koreans out at U.S. Strategic Command (STRATCOM).
        So we have put a lot of emphasis into this, into these
    dialogues. It's extraordinarily important that they feel
    confident in this deterrence and that they are completely and
    totally assured at all times, because we recognize that either
    of these countries, if they wanted to, could develop nuclear
    weapons and it would be extraordinarily important for them not
    to and would really increase the tensions in that part of the
    world if they decided that this was a road down which they
    wanted to go.
        So it's a vitally important series of dialogues.
        Senator Udall. Thanks for that update.
        Let me turn to Senator Sessions and recognize him.
        Senator Sessions. Thank you.
        Secretary Creedon, there's a problem there. A March 10th
    New York Times report said and this is talking about North
    Korea and South Korea, South Koreans specifically: ``Now this
    new sense of vulnerability is causing some influential South
    Koreans to break a decades-old taboo by openly calling for the
    South to develop its own nuclear arsenal, a move that would
    raise the stakes in what is already one of the world's most
    militarized regions.''
        It goes on to say: ``While few here think this will happen
    any time soon, two recent opinion polls show two-thirds of
    South Koreans support the idea, posed by a small but growing
    number of politicians and columnists, a reflection, analysts
    say, of the hardening attitudes since North Korea's underground
    test.''
        I remember talking with members of this commission, talking
    about our other allies in the region. I don't know that it's
    appropriate to mention them. But they expressed concern about
    this immediately. They're worried about it. When you have the
    President saying in South Korea just a few weeks ago, or last
    year, he said:

              ``As President, I have changed our nuclear posture to
            reduce the number and role of nuclear weapons in our
            national security strategy. I made it clear the United
            States will not develop new nuclear warheads, we will
            not pursue new military missions for military weapons.
            We have narrowed the ranges of contingencies under
            which we would ever use or threaten to use nuclear
            weapons.''

        That was March 2012 in South Korea. So I think you need to
    work extra hard right now because you're correct, we have a lot
    of allies that could produce nuclear weapons. If the goal is to
    constrain the number of nations that have them--and I think
    that's a good goal--then we need to be sure. South Korea can't
    be sitting there with North Korea with nuclear weapons and they
    don't have them and not have confidence that the United
    States--or have confidence the United States won't be there.
        Can you share with me a little more of your thoughts on
    that?
        Ms. Creedon. Yes, sir. That was part and parcel of why not
    only did we carry on the exercise, the Full Eagle Exercise, but
    also why we had very visible presences of the bombers,
    particularly the B-2 bomber, because it's not just the nuclear
    umbrella that provides the assurance and the deterrence to our
    allies in the region. It's the whole package. It's all the
    conventional forces, it's the ballistic missile defense forces.
    We have Aegis cruisers over there in the region.
        We're in the process of putting in place a second TPY-2
    radar to provide not only for the defense of Japan, but the
    defense of our assets in the region. There's already one TPY-2
    radar over there. We're moving a Terminal High Altitude Area
    Defense battery to Guam. Parts of the battery have already been
    delivered. We're providing a broad package of assurance.
        So it's not just nuclear; it's everything. Even the
    decision that we took to add 14 additional ground-based
    interceptors in Fort Greely had a reassurance effect to our
    allies because it also makes it very clear that we take the
    threat from that region very seriously.
        So this is something that we've had a lot of focus on. It
    is part of a much larger package. Nuclear is an important part
    of it, but it's all the conventional systems, it's all the
    assets. It's also very much the reason why DOD has increased
    focus and will continue to increase focus on that part of the
    region generally, as was outlined.
        Senator Sessions. For the South Koreans and the Japanese,
    having a nuclear-armed North Korea and them not having nuclear
    arms and to have any uncertainty about the willingness of the
    United States to defend them is a dangerous thing. That's how
    the Korean War broke out to begin with, a misunderstanding as
    to what the United States considered its vital national
    interest.
        So I just worry about that and I think we have to get that
    clear. We need to get moving with a--so my time is about up,
    but we'll have another round, I guess.
        But thank you for sharing that. We need to air it. We need
    to be honest about it. This is not a little bitty issue, and
    that's why it's so important with Iran. I wish we could just
    look the other way, but it's not going to be good for the whole
    region if Iran gets nuclear weapons either. It's a matter of
    great strategic importance.
        Thank you, Mr. Chairman.
        Senator Udall. Senator Fischer, back to you.
        Senator Fischer. Thank you, Mr. Chairman.
        General Kowalski, do you think that the Minuteman III ICBM
    still provides value to our nuclear forces, and if so, do you
    see that value diminishing any time soon?
        General Kowalski. I think absolutely it provides value. As
    we look at the nuclear powers of the world, you have the major
    nuclear powers, Russia and China, and then you have these
    regional powers, clearly North Korea being the latest to
    demonstrate both a weapon and potentially a capability to
    deliver that weapon. We have Iran on a trajectory where they
    have the potential to have both weapons and already the
    delivery systems with their space program.
        So what the ICBM provides in a world that is increasingly
    complex is, first, that ready, responsive, deterrent posture
    against the major nuclear powers. Second, what it provides is
    an assurance that no nuclear power can exercise nuclear
    coercion or blackmail on the United States. There are 450
    hardened launch facilities in the heartland of this country and
    if we did not have those we need to think through what that
    scenario looks like in 15 or 20 years.
        So I continue to be a strong advocate for the ICBM.
        Senator Fischer. Thank you.
        In your prepared statement, you talk about extending it
    until 2030, I believe. Yes, 2030. There's some concern about
    the components aging out. Do you think that the missile can be
    extended far into the future? Are we going to be able to do
    that?
        General Kowalski. I think I am confident we can get the
    missile as it is to 2030 with the programs that we have in
    place or the programs that we don't have funded yet, but plan
    to pursue in the next couple of years. For example, the
    propulsion replacement program. We know we're going to have to
    replace the propellant. We're not really sure when that will
    age out and when that program needs to start. We're taking a
    little bit of risk because we think the propellant can last 30
    years, which puts at about 2025, 2027. If it doesn't, if it
    needs to be done sooner, then we'll need to start that in a
    couple of years.
        We'll be starting that. That is actually a program that we
    are aligned to execute with the Navy so that we can go to a
    common propellant. These are some of the things that we're
    examining and in particular, the Air Force Materiel Command is
    examining with Admiral Benedict's team.
        The missile guidance set is another area that we're looking
    at for commonality. But all of the things that we plan to
    invest in the Minuteman III are things, are specific subsystems
    that we intend to dovetail into the ground-based strategic
    deterrent, so the follow-up. So with the AoA, we'll have a
    better sense of what ground-based strategic deterrent is going
    to look like. As we develop the next missile guidance set, the
    next propulsion replacement for the Minuteman III and we look
    at the launch facility equipment, then what we intend to do is
    do that adaptation, so that we're not paying for the same thing
    twice with the follow-on.
        Senator Fischer. Do we have the resources to do all that?
        General Kowalski. I'm confident that we do. All of Global
    Strike Command is less than 1 percent of the DOD budget, and I
    think when you look at the surety and the security that our
    nuclear forces provide, I think it's a sound investment.
        Senator Fischer. Do you think that the priority will remain
    that into the future that you see?
        General Kowalski. Senator, that's not a decision I get to
    make.
        Senator Fischer. Come on.
        General Kowalski. But I'll continue to advocate strongly
    for it.
        Senator Fischer. Thank you.
        Did anyone want to add anything to that? [No response.]
        Thank you very much.
        Thank you, Mr. Chairman.
        Senator Udall. Thank you, Senator Fischer.
        Secretary Creedon, let me come back to you for a final
    question. In the NDAA last year we established a commission to
    examine the role of the National Nuclear Security
    Administration (NNSA) in meeting DOD's stockpile requirements.
    DOD is tasked with setting up that commission. Can you update
    us on the status of the commission?
        Ms. Creedon. Yes, sir. First, we understand that of the 12
    members that need to be appointed, 10 are appointed. There are
    two left that need to be appointed. When the direction was
    provided in the NDAA for the DOD to fund this commission, this
    panel, it was considered a new start under the budget and so
    because we were operating under a Continuing Resolution (CR) at
    the time we couldn't move forward with the funding for the new
    START, as you're well aware of all this history with the new
    START.
        Now that we have a budget in place, we can now go forward
    with the reprogramming to support this. So what we're doing
    right now is finding the money to be able to include either in
    a below-threshold reprogramming or in an above-threshold
    reprogramming so we can get the commission started, hopefully
    in time with the full commitment of the members of the panel.
        The other thing that we've been looking at is talking to
    several Federally Funded Research and Development Centers to
    see what their capabilities are to support this panel, for lack
    of a better description, the care and feeding of the panel,
    taking care of the logistics, helping with the writing, that
    sort of thing. So we're trying to get that teed up so when the
    chair and the co-chair are designated, that we can meet with
    them and present some options to them.
        Senator Udall. Thank you for that update. Also, thank you
    for reminding those of us sitting at this end of the table that
    CRs, although they're seductive in that you can think they're
    saving costs, they actually can add costs. I know my colleagues
    believe the regular order makes more sense up on the Hill and
    when we appropriate in the right way.
        Let me turn to General Harencak. Are you satisfied with the
    Air Force's relationship with the NWC and would you make any
    recommendations to improve it?
        General Harencak. Senator, I think if you look back at the
    history of the NWC, there have been times where there has been
    a lot of inactivity. I think recently, in the past few years,
    the NWC has been making lots of decisions, which is necessary,
    lots of great interaction. I believe overall, the relationship
    is very strong between the U.S. Air Force and the NWC.
    Recommendations would be, to the extent at all possible within
    the framework of how it was birthed and how we staff it, that
    the more continuity we can give, through either a professional
    staff or a group of people who maybe might be assigned to it
    for extended periods of time, would be helpful, simply because
    of the fact that there's nothing we do in the nuclear
    enterprise that can get done in 2, 3, or 4 years. Most of what
    we work on have very long lead times. It takes a long time for
    a lot of good reasons. To the extent that we could provide any
    type of continuity throughout periods of the timeframes
    necessary to get the nuclear enterprise to accomplish things,
    would be helpful.
        Senator Udall. As you think further about that, if you do
    have additional recommendations or thoughts, we'd certainly be
    open to hearing those.
        Let me turn to another relationship that you have with the
    Navy. Are you satisfied with the progress on the common Navy-
    Air Force warhead system and would you make any recommendations
    for its improvement?
        General Harencak. Senator, I'm very satisfied with the
    relationship that we have with Admiral Benedict and the Navy. I
    think we're making huge breakthroughs, if you will, on working
    on a very difficult and complex set of problems as we look to
    have adaptable external systems that we could both use in the
    future.
        My recommendation would only be that, while we believe it
    will be successful, I am very optimistic, the U.S. Air Force is
    very optimistic, that this will be a successful endeavor. I
    think we have to be mindful of the fact that should there come
    a time where we believe for whatever reason that it not be
    feasible or affordable to do so, that we have the good sense,
    if you will, to say, ``hey, we tried it.'' It may not work for
    a host of reasons, maybe technical reasons, or just the world
    has changed, so to speak.
        I think we have to be ready to have some off-ramps on that.
    But right now I remain very optimistic. I will tell you the
    Navy is very supportive of what we're doing and we're working
    extremely well together on it.
        Senator Udall. Admiral, you want to comment briefly and
    follow on?
        Admiral Benedict. Yes, sir, if I may. I appreciate the Air
    Force comments. We are fully supportive of a common warhead
    moving forward. I will tell you in all honesty we had
    challenges this year. Specifically, we did not have a prior
    budget line item. So again, we were significantly impacted
    under the CR in our ability to move forward under no new start
    authority from an acquisition standpoint.
        Now that we have an appropriations bill, the Navy is
    aggressively attempting to solve that and we will. We do have
    money in the 2014 budget to support the Interoperable Warhead
    (IW), 78/88 LEP.
        But I also echo what General Harencak said. I think it is
    prudent that as we move forward we have off-ramps. This is an
    extremely technically challenging proposal, and I have
    advocated and the Navy has advocated, that we do look at a
    stand-alone 88-1 as a potential off-ramp. But the bottom line
    is we're fully supportive of this effort moving forward.
        Admiral Benedict. Thank you.
        Senator Sessions, the floor is yours.
        Senator Sessions. All right, thank you.
        The NWC we hope will have good benefits. There has always
    been in my view some disconnect between DOD and DOE, NNSA, and
    all the processes that go into long-range planning and
    production of nuclear weapons.
        So, Secretary Creedon, are you satisfied or can you speak
    for DOD; are you fully satisfied? Could there be improvement in
    having more transparency within NNSA in the decisionmaking
    process?
        Ms. Creedon. Senator, over the course of the almost 2 years
    since I've been there, so having watched this and being able to
    compare when I participated in the NWC 14 years ago, it's
    actually much more aggressive. The relationship is much better
    between DOE and DOD. We meet regularly and, thanks to a lot of
    Andy Weber's good work--Andy's the Executive Director of the
    NWC--and the participation with pretty much everybody on this
    panel, it really has been much more of a forum for a lot of
    really good discussion.
        It truly ranges from agreement to the knockdown-dragout
    that sometimes has to happen to get you to agreement. That's
    been with and amongst the Services, DOE, and all of the various
    components. So, I think we've made a huge amount of progress.
    It's been, frankly, a little bit painful, but we really have
    made a lot of progress.
        I think the Cost Analysis Program Evaluation (CAPE) group
    at DOD also has brought their cost expertise to this, too, and
    has shared a little bit of that with NNSA. So we're making
    progress. We're not there yet, but we're making a lot of
    progress.
        Senator Sessions. One of the dysfunctions to me has always
    been it's really DOD that's the customer because the weapon is
    being produced for them, and DOE just produces it and they
    don't have sufficient incentive, in my opinion, to reduce cost.
    DOD doesn't have that much incentive because if DOE produces it
    at less cost it doesn't go to DOD; it just is lost to DOE.
        So DOE, it's just pretty obvious to me, has not had a sense
    of intensity. If DOD were making these weapons and they needed
    more money for ships and they could save money in making the
    weapons, they'd be saving the money and trying to move it over
    to make ships with. It's just a bureaucratic problem here, in
    my view.
        I think the NWC, Secretary Weber, should be aggressive. You
    should bring cost controls to it, and I salute you for that and
    the taxpayers need that.
        On the nuclear modernization, Secretary Creedon, in 2010
    the President promised to increase spending for NNSA weapons
    activities by $4.1 billion over 5 years, less than $1 billion a
    year, fiscal year 2012 through 2016. Including the 2014 budget
    request, however, we're now $1.4 billion, 34 percent, below
    that promised target at the rate we're going.
        Congress was responsible for one of the reductions and some
    of the others. The SLEP on the B61 slipped by 2 years. The
    program to examine a common warhead and to extend the life of
    the W78 and W88 may be 3 years, I understand, behind schedule.
    Delivery systems, development of a replacement for our nuclear
    ballistic missile submarines, that are at an average age of 23
    years, is 2 years behind schedule. Replacement of the nuclear
    air-launched cruise missiles, average age 31 years, are at
    least 2 years behind schedule. There's no commitment yet to
    follow up on the Minuteman ICBM, average life 34 years. The new
    strategic bomber will not be nuclear-certified at the outset.
        So with respect to Secretary Creedon and the Service
    witnesses, would you comment on these weapons systems? Can we
    expect further delays and what is the risk and how can we catch
    up?
        Ms. Creedon. Senator, I want to go back a little bit to
    what you said about the NWC. So almost every one of these
    decisions that have been made with respect to the timing of all
    of these, both the warheads and the platforms, have all been
    made in the context of NWC discussions.
        Senator Sessions. Could I just say, that is good to hear. I
    think that's a positive step. When you go to them and say, ``we
    don't have any money, can we go another year,'' they tend to
    want to go along with you. But it doesn't necessarily mean that
    that's what they'd prefer. We are getting at a point where it's
    worrisome.
        But go ahead. I'm sorry.
        Ms. Creedon. No, that's fine. So let me just use the 61 as
    an exemplar of this, because otherwise we'd be here for quite a
    while. On the 61, the NNSA made a proposal to DOD based on
    guidance that DOD had provided. The NWC looked at what the
    scope of this SLEP would be, and then we also looked at what we
    thought the life of the B61 would be.
        So STRATCOM and the Air Force went back and did some
    careful analysis and said: ``Okay, based on the various
    components, this is when we think this program is going to age
    out, this is when we think we have to start this SLEP.'' Then
    the NWC looked at the scope of the SLEP. They went back and
    looked at the scope of the SLEP and decided that it was too
    technically challenging and it was too expensive.
        So with this iterative work that was done, the scope got
    narrower, the understanding of the life of the 61 got better,
    and so we combined the two and said: Okay, this first
    production unit in 2019 is good, STRATCOM said this is good,
    and the scope of this SLEP is good, this is what we can afford,
    we believe. So the NNSA went off and they're now in the process
    of refining the costs, because right now the range of estimates
    is pretty big. So that's what the NNSA is doing, and they will
    come back to the NWC and we'll review this again.
        So we'll look at both the timing and we'll look at the
    scope again, because we want to make sure that it's affordable,
    because now DOD is also providing money directly to the NNSA to
    help them with this whole enterprise.
        So I think just using that as an exemplar explains how we
    are, in fact, working together, how we're making some of these
    tradeoffs and we're providing incentives on both sides to look
    at where is the affordability and where is the requirement.
        Senator Udall. Thank you.
        Senator Fischer, we're back to you.
        Senator Fischer. I'd like to discuss Oak Ridge and
    Chemistry and Metallurgy Research Replacement (CMRR), those
    facilities. This is new to me, so hopefully you can enlighten
    me on some of this. I understand that those facilities need to
    be replaced and it's very expensive to replace them; is that
    correct? We're looking at pit production numbers. There's some
    discrepancy there on what DOD says is needed compared to DOE;
    is that correct? Who wants to tackle this one?
        Mr. Weber. I'll volunteer, Senator.
        Senator Fischer. Okay. Do you know what I'm referring to on
    the discrepancy in the numbers from 50 to 80 or 20 to 30, what
    we're talking about there, and where you stand on that and why
    you probably have a different position, if you could explain
    that?
        Mr. Weber. Yes, Senator. The NWC spends a lot of time
    working with DOE on the recapitalization of the infrastructure.
    Based on the good work of the Strategic Posture Commission, we
    really have a bipartisan path forward. We all agree we need to
    modernize this complex, retain and train the next generation of
    first-class scientists and engineers who make it work.
        The facility at Oak Ridge, the uranium processing facility,
    is a very high priority because the building that is currently
    used for production of the secondaries is at risk and is old
    and we need to replace that as soon as possible. So in our
    prioritization we worked with NNSA to accelerate completion of
    that new uranium processing facility.
        We accepted at least a 5-year deferral in the CMRR facility
    at Los Alamos National Laboratory (LANL), which does the
    analytical chemistry to support pit production. We all agree we
    need a pit production capacity and the discrepancy in the
    numbers is more about timing and I don't really believe it's a
    discrepancy.
        DOE has sent to Congress last year a reprogramming request
    for $120 million to meet near-term pit production needs and to
    allow us to get up to the 30 per year by 2021 for these very
    important SLEPs, especially the IW one or the 78/88 SLEP for
    the ICBM and the SLBM legs of our triad.
        The NWC was briefed recently on what looks like a more
    affordable long-term plan for plutonium pit production. The
    concept is for modular facilities, that the first one could
    come on line sooner. Our initial reaction is we support that.
    It needs more study. We are launching, together with NNSA, a
    60-day study to do a business case analysis for that.
        But there is no daylight between DOE and DOD on the need
    for both a near-term pit production capacity of 10 to 20 and
    then 30 by 2021, and then in the longer-term for a pit
    production capacity of 50 to 80 per year.
        Thank you.
        Senator Fischer. Do you think that you'll need to
    cannibalize some of the older stockpiles that we have in order
    to keep our capabilities at full strength? Do you think that's
    going to happen? Is it feasible that that would work? Do you
    know if those pieces are going to fit into the other warheads?
        Mr. Weber. One of the very good news stories in recent
    years based on the work of the stockpile stewardship program,
    our understanding of nuclear weapons and how they work is
    better than it's ever been. We are now confident that we can
    reuse plutonium pits as we implement these SLEPs.
        Senator Fischer. May I interrupt you and ask, how are you
    confident that you can do that? Have you run tests on it or
    just in theory you're confident?
        Mr. Weber. Yes, DOE has a continuing program of experiments
    to provide the data that gives the director of LANL and
    Lawrence Livermore National Laboratory the confidence to say
    that they can do that.
        In addition to reusing existing pits, we need that
    capability to remanufacture additional pits based on those
    designs of the pits that we will be reusing. That's why I would
    urge you to approve the $120 million reprogramming request,
    which is essential for getting that near-term capability which
    is needed for these vital SLEPs.
        Thank you.
        Senator Fischer. Thank you very much.
        Thank you, Mr. Chairman.
        Senator Udall. General Harencak, let me come back to you
    again. It's our understanding that as the New START treaty is
    implemented, Air Force missile wings would like some
    flexibilities in determining which silos to shut down. As I
    understand it, some of the silos are worse off than others. Do
    you support that approach?
        General Harencak. Absolutely, Senator. I believe it's
    critical that we have the flexibility to do what's most cost-
    effective, what's most efficient, which makes the most sense,
    so we can accomplish the mission while also having the
    flexibility to look at and say, ``okay, are there silos that
    have more water intrusion than the other ones,'' and just go
    across the force and say, ``hey, it's smart to pick this silo
    or that silo.'' So, the U.S. Air Force certainly supports
    having the flexibility to do that, sir.
        Senator Udall. It makes sense to me as well.
        Talk, if you will, about sequestration and what do you see
    as the biggest effect of sequestration on the Air Force nuclear
    enterprise?
        General Harencak. The Air Force nuclear enterprise, sir,
    remains safe, secure, and effective. We are absolutely prepared
    to do the mission. We're doing it each and every day, despite
    sequestration. However--and I'll defer this to General
    Kowalski, who can probably tell you more--obviously, as the
    longer it goes on there is going to be other issues besides a
    readiness issue. There's going to be issues of if we have money
    to take care of our people, to train them, to send them to
    schools, all that.
        So right now readiness is not a factor, but sequester could
    obviously have long-term effects on the overall health of our
    people and our processes and our facilities.
        Senator Udall. I think my worry, and it's shared by a lot
    of my colleagues, is that we're all told to save and you'll
    compound your investment because of the compounding effect of
    interest, but you can see the opposite effect with
    sequestration, where you get a negative compounding of the
    effects. But we'll be talking about that more and more as
    sequestration takes hold.
        Secretary Weber, let me come back to you, and I know you've
    touched on this. But are you comfortable with the relationship
    that the Services have with the NWC? I know Senator Sessions
    commented earlier as well.
        Mr. Weber. Yes. During my 4-year tenure it's been an
    excellent relationship. We have active participation of the
    Service Chiefs and the Service Secretaries in the NWC meetings
    and I think that's essential. The Vice Chairman represents
    their interests, but having them at the table when we discuss
    strategic programmatic decisions is very important, and that is
    a habit, a tradition now that we will continue.
        Senator Udall. I'm going to exercise my prerogative as
    chairman and end this open portion of the hearing now and we'll
    head over to the secure facility to continue the hearing in
    closed session. I'm going to look to my team here--I have to
    actually adjourn the subcommittee and then we'll move over to
    the closed session. We look forward to the testimony over there
    and we'll reconvene as soon as we possibly can.
        Senator Sessions. Mr. Chairman, could I ask one thing?
        Senator Udall. Sure, Senator Sessions.
        Senator Sessions. With regard to these buildings, I really
    want to be clear about it. Modular and that kind of thing--
    modernizing effectively our nuclear weapons arsenal is
    essential. It's the right thing to do, and it's not too much
    money to spend if it's necessary. But I would be willing to
    listen to ideas you have for modular or other things that I
    think ought to be examined carefully to see if we think those
    are feasible and will not result in further delays and
    uncertainties in this program. I'm sure the chairman would be
    delighted to have more information on it, but that's my firm
    view, that we need to be on track with this. I suspect we could
    do it with less expense, and if so, I'll be supportive of that.
        Senator Udall. I look forward to working with the ranking
    member.
        We will reconvene in the secure facility. We are adjourned.
        [Questions for the record with answers supplied follow:]

                   Questions Submitted by Senator Mark Udall

                      FISCAL YEAR 2014 PRESIDENT'S BUDGET

        1. Senator Udall. Secretary Creedon, how does the fiscal year 2014
    budget request reflect force structure changes associated with the New
    Strategic Arms Reduction Treaty (START) treaty (NST)?
        Ms. Creedon. The President's fiscal year 2014 budget request
    reflects the administration's commitment to modernize the critical U.S.
    nuclear forces that underpin a safe, secure, and effective nuclear
    deterrent. The President has not made a final decision yet on the
    details of U.S. nuclear force structure under the NST. The fiscal year
    2014 budget request includes funds to enable planning for the necessary
    force structure reductions under the NST and to dismantle previously
    retired strategic systems that count under the NST.

                                  NORTH KOREA

        2. Senator Udall. Secretary Creedon, the recent North Korean crisis
    demonstrated the importance of our deterrent. Very recently, three B-2
    aircraft and four B-52H aircraft participated in a joint training
    exercise on the Korean Peninsula. This was especially important to
    South Korea as a demonstration of the U.S. so-called nuclear umbrella.
    Do you see any signs that nations are questioning our resolve in this
    area? Should they have any reason for concern?
        Ms. Creedon. The United States remains fully committed to the
    extended deterrence we provide the Republic of Korea and our allies and
    partners under the nuclear umbrella. The B-2 and B-52H missions were
    visible demonstrations of the seriousness we place on this commitment
    and the posture and capabilities that underpin it. U.S. extended
    deterrence is playing a central role in reinforcing security and
    stability on the Korean Peninsula and in the region, and my
    interactions with my counterparts in the region indicate they are
    certain of U.S. resolve.

                                 SEQUESTRATION

        3. Senator Udall. General Harencak, what do you see as the biggest
    impact from sequestration to the Air Force nuclear enterprise?
        General Harencak. In the near-term, the Air Force has been
    successful at managing the impact of sequestration on nuclear
    deterrence operations--ensuring that our strategic forces remain safe,
    secure, and effective day-to-day. While challenging, we are confident
    in our ability to mitigate the remainder of the required reductions in
    fiscal year 2013 with negligible mission impacts.
        Beyond fiscal year 2013, the unknown effects of sequestration to
    the enterprise are cause for concern. Since the risks of
    underinvestment are cumulative and have a compounding adverse effect on
    readiness over time, the magnitude of the impact will ultimately depend
    on the duration of the sequester.
        Under sequestration, Air Force Global Strike Command (AFGSC) has
    incurred a 10 percent reduction across its operation and maintenance
    accounts. While Air Force guidance implementing the reductions
    expressly prioritized flying hours directly supporting nuclear
    operations, the cuts are having tangible impacts elsewhere. Of
    particular note, the deferment of non-emergency Facility, Sustainment,
    Maintenance, Restoration, and Modernization projects at missile alert/
    launch facilities, weapons storage areas, and aircraft hangars is
    exacerbating the existing backlog of critical capital improvements,
    raising safety and security risks that over time, may erode the ability
    of these facilities to meet mission requirements. Cancellation of most
    temporary duty assignments is limiting professional development within
    the nuclear career field. Additionally, the furlough of civilian
    employees is negatively impacting productivity and mission continuity.
    Should these and other sequestration-related impacts persist into
    future years, their combined effect will eventually lead to the
    deterioration of core readiness within our nuclear forces.

        4. Senator Udall. General Kowalski, how is sequestration affecting
    your training and operational tempo?
        General Kowalski. Sequestration has significantly affected training
    for B-52 Combat Mission Ready (CMR) crews. Only approximately 50
    percent of B-52 crews are currently funded to maintain CMR status due
    to the reduction in flying hours for Combat Air Force (CAF) units. This
    reduction will reduce readiness and proficiency of B-52 crews while
    limiting available response options and the deterrence effectiveness of
    the B-52 force. B-2 Mission Capable (BMC) crews are no longer flying.
    This approach rightly prioritizes the readiness of CMR crews; however,
    the absence of BMC crews in current flying operations hinders surge
    capabilities and decreases operational oversight within the B-2
    community. Intercontinental Ballistic Missile (ICBM) and UH1 crew
    training has not been affected by sequestration.
        Sequestration induced an additional 18 percent cut to Flying Hour
    Program and Central Assets Management System overall budgets. The
    Continuous Bomber Presence is being supported with minimum crews (1.0
    crew ratio). Although current AFGSC hours maintain minimum B-2 and B-52
    Nuclear Deterrence Operations support, the reduction constrains AFGSC's
    operational flexibility to support operations beyond this minimum. The
    remaining crew force (equivalent of approximately two B-52 squadrons)
    stood down on April 8, 2013. This stand down is forecast to continue
    through the end of the fiscal year 2013 or longer, depending on future
    availability of resources. While we will strive to minimize the short-
    term impact of the flying hour reduction, mid- and long-term impacts of
    reduced flying proficiency has serious readiness and safety
    implications.

                                      B-61

        5. Senator Udall. Secretary Weber, what is the status of the B-61
    gravity bomb's Service Life Extension Program (SLEP), and are you
    narrowing down the cost estimates for it?
        Mr. Weber. Los Alamos and Sandia National Laboratories, through the
    joint Air Force--National Nuclear Security Administration (NNSA) SLEP
    for the B61, have made substantial progress--every program milestone so
    far has been achieved on schedule. The B61-12 will replace four
    existing variants of the B61. The approved schedule for the B61-12
    includes achieving the first production unit no later than fiscal year
    2019, which is essential to managing risks associated with component
    end of life. The B61-12 program has entered Phase 6.3 Engineering
    Development; system components are being developed to meet essential
    requirements in regard to safety, use control, performance,
    reliability, and produce-ability. This work precedes a production
    engineering phase of development leading to initial production. Our
    best estimate for the cost of the B61 SLEP (development and production)
    is reflected in the B61-12 Weapons Development and Cost Report (WDCR):
    $7.4 billion. The Department of Defense's (DOD) Cost Assessment and
    Program Evaluation (CAPE) office has recently completed an independent
    cost estimate that exceeds the WDCR estimate by $2.7 billion. The
    difference in the two estimates is based on different assumptions
    regarding the risk in achieving certain programmatic milestones on
    planned schedules. The Nuclear Weapons Council (NWC) is acutely aware
    of the cost of the B61-12 and has focused increased attention on cost
    control. CAPE is working closely with NNSA on this SLEP to ensure cost
    and schedule risks are effectively managed.

                           AIR LAUNCH CRUISE MISSILE

        6. Senator Udall. General Kowalski, are you comfortable with the
    ability of your airmen to maintain the Air Launched Cruise Missile
    (ALCM) to meet the U.S. Strategic Command's (STRATCOM) exercise
    requirements?
        General Kowalski. Yes. The Cruise Missile Maintenance airmen of
    AFGSC continue to maintain the ALCM in a professional manner meeting
    all STRATCOM operation plan and exercise requirements. In conjunction
    with Air Force Materiel Command, a SLEP has been developed to ensure
    continued ALCM maintainability until 2030.

        7. Senator Udall. General Kowalski, the Air Force is considering a
    replacement for the ALCM and our understanding is that the Air Force is
    considering a plan that would not replace the maintenance handling
    equipment for that missile. Is that being considered as part of the
    Analysis of Alternatives (AoA) and do you support such as proposal?
        General Kowalski. The AoA included new and modified support
    equipment based on historical precedence of legacy weapon systems as
    part of the cost comparison and analysis. As the long-range standoff
    (LRSO) concept matures, the Air Force will continue to conduct
    supportability analysis to determine the appropriate mix of new and
    legacy ALCM support equipment to ensure the lowest possible sustainment
    costs and a smooth transition from ALCM to LRSO operations.
                                     ______

                  Questions Submitted by Senator Jeff Sessions

                             NUCLEAR MODERNIZATION

        8. Senator Sessions. Secretary Creedon, please comment on the
    status of the following weapon systems to include whether or not
    further delays are anticipated and if so, the Office of the Secretary
    of Defense's (OSD) and the individual Services' assessments of risk
    associated with each program:

             W-76 Submarine-Launched Ballistic Missiles (SLBM)
            Warhead Life Extension Program (Navy)
             B-61 Gravity Bomb Life Extension Program (Air Force)
             W-78 (ICBM) and W-88 (SLBM) Common or Interoperable
            Warhead Program (Navy/Air Force)
             Follow-on Nuclear Ballistic Missile Submarine (SSBN)
            Program (Navy)
             Replacement for the Nuclear Air-Launched Cruise
            Missile (known as the LRSO) (Air Force)
             Follow-on to the Minuteman III ICBM (Air Force)
             Next Generation Strategic Bomber (Air Force)

        Ms. Creedon. As we deal with ongoing fiscal challenges, program
    adjustments including scheduling revisions may be necessary. In those
    instances, however, military requirements and risk management will be
    carefully considered. In the near future Congress will receive both the
    Stockpile Stewardship and Management Plan, and the Report on the Plan
    for the Nuclear Weapon Stockpile, Nuclear Weapons Complex, Nuclear
    Weapon Delivery Systems, and Nuclear Command and Control System for
    fiscal year 2014 as required by section 1043 of the National Defense
    Authorization Act for Fiscal Year 2012. These documents will provide
    details on current plans for the programs you identified.

            RESPONSIVE NUCLEAR INFRASTRUCTURE AND NUCLEAR REDUCTIONS

        9. Senator Sessions. Secretary Creedon, a key premise of the 2010
    Nuclear Posture Review (NPR) was that a modern nuclear infrastructure
    was essential for facilitating reductions in the arsenal while
    sustaining deterrence under New START and, potentially, beyond. A
    responsive nuclear infrastructure was deemed necessary not only to meet
    our upcoming weapons SLEPs, but to be able to surge production in case
    there were a significant technical challenge with the current
    stockpile--or if the geopolitical situation changed dramatically for
    the worse. Is this linkage between achievement of a responsive
    infrastructure and nuclear reductions still administration policy?
        Ms. Creedon. As you stated, the modern infrastructure is needed
    whether or not there are further reductions below the NST force
    structure levels. That said, a more modern infrastructure will allow
    additional warhead reductions particularly in the hedge.

        10. Senator Sessions. Secretary Creedon, the NPR concluded that
    funding for Chemistry and Metallurgy Research Replacement-Nuclear
    Facility (CMRR-NF) at Los Alamos and Uranium Processing Facility (UPF)
    at Oak Ridge was required to maintain a safe, secure, and effective
    nuclear arsenal and to provide that responsive nuclear infrastructure
    deemed necessary to facilitate nuclear reductions. In fact, the NPR
    recommended that CMRR-NF and UPF be available by 2021. With the
    uncertainty now surrounding the future of CMRR-NF, or perhaps a modular
    approach, doesn't this delay the achievement of that responsive nuclear
    infrastructure which was deemed necessary for arms reductions?
        Ms. Creedon. The administration's decision to defer CMRR-NF
    increases risk in our effort to achieve the responsive infrastructure
    identified in the NPR. To manage this risk in the near-term, we are
    developing other means to respond to technical or geopolitical
    challenges. We will achieve near-term goals using existing facilities
    with some modifications. At the same time, the administration is
    pursuing an enduring production capacity through potential pit reuse in
    ongoing SLEPs, and we plan to supplement this with a capability to
    manufacture existing insensitive high explosive pit designs at a rate
    of 30 per year by 2021.
        Over the next several weeks, the NNSA, with support from DOD's CAPE
    office, will carry out a business case analysis of the modular concept
    and other alternatives to consider risks and benefits, and to seek
    initial insights into feasibility of delivery of key capabilities. At
    the conclusion of the study, NNSA will report its assessment to the NWC
    and relevant congressional committees.

        11. Senator Sessions. Secretary Creedon, since the administration
    has made the decision to defer CMRR by at least 5 years, shouldn't we
    also delay the negotiation of any further arms reductions below New
    START levels?
        Ms. Creedon. That is ultimately the President's decision. Deferral
    of the CMRR alone should not be considered an impediment to further
    arms reductions if the needs of the nuclear stockpile stewardship
    programs can be met and other circumstances allow for it.

                     RUSSIAN NON-STRATEGIC NUCLEAR WEAPONS

        12. Senator Sessions. Secretary Creedon, last year you and
    Secretary Weber told this committee that: ``Russia has approximately
    4,000 to 6,500 nuclear weapons, according to unclassified estimates, of
    which approximately 2,000 to 4,000 are non-strategic.'' You and
    Secretary Weber also noted that: ``we lack confidence in estimates of
    Russian tactical nuclear weapons.'' The administration has said it
    seeks to reduce tactical nuclear weapons in any future arms discussions
    with Russia, but Russia has established the condition that all U.S.
    tactical nuclear weapons must be removed from Europe before Russia
    agrees to any reductions in its tactical nuclear arsenal. Please
    describe the types of tactical nuclear weapons in the Russian arsenal
    that could pose a direct threat to North Atlantic Treaty Organization
    (NATO) Europe.
        Ms. Creedon. There are a variety of Russian systems that could pose
    a direct threat to NATO. I refer you to the Defense Intelligence Agency
    (DIA) Russian Nuclear Forces Quick Reference Guide, DIA-11-1111-538,
    dated January 2013; and DIA Russia: Nonstrategic Nuclear Weapons in the
    Euroatlantic Area, DIA-11-1206-678.A, dated June 29, 2012.

        13. Senator Sessions. Secretary Creedon, could some of these
    weapons also threaten the U.S. Homeland, such as a nuclear cruise
    missile off the U.S. coast?
        Ms. Creedon. The potential exists that some Russian non-strategic
    weapon systems could threaten the U.S. Homeland. I refer you to the DIA
    Russian Nuclear Forces Quick Reference Guide, DIA-11-1111-538, dated
    January 2013; and DIA Russia: Nonstrategic Nuclear Weapons in the
    Euroatlantic Area, DIA-11-1206-678.A, dated June 29, 2012.

        14. Senator Sessions. Secretary Creedon, what is your position on
    whether the United States should remove tactical nuclear weapons from
    Europe in exchange for reductions in Russian weapons?
        Ms. Creedon. While the removal of tactical nuclear weapons from
    Europe is ultimately the President's decision, the administration has
    committed to addressing these issues within the framework of the NATO
    alliance, not unilaterally. U.S. nuclear weapons in Europe are a core
    component of NATO's overall capability for deterrence and defense,
    alongside conventional and missile defense forces. In the 2012
    Deterrence and Defense Posture Review (DDPR), NATO members reaffirmed
    this tenet and committed to remaining a nuclear alliance as long as
    nuclear weapons exist. The DDPR concluded that the ``alliance's nuclear
    force posture currently meets the criteria for an effective deterrence
    and defence posture.'' The DDPR also acknowledges, however, that in a
    future security environment, the United States could reduce non-
    strategic (i.e., tactical) nuclear weapons in Europe, assuming a
    reciprocal reduction by Russia. Until then, and for as long as NATO
    remains a nuclear alliance, NATO will ensure that all components of its
    nuclear deterrent remain safe, secure, and effective.

        15. Senator Sessions. Secretary Creedon, what is NATO's position on
    this subject?
        Ms. Creedon. While I certainly can't speak to the NATO position per
    se, nuclear weapons are a core component of NATO's overall capability
    for deterrence and defense, alongside conventional and missile defense
    forces. The 2012 DDPR reflects the consensus position of NATO members,
    and it commits to remaining a nuclear alliance as long as nuclear
    weapons exist. The DDPR concluded that the ``alliance's nuclear force
    posture currently meets the criteria for an effective deterrence and
    defence posture.'' The DDPR also acknowledges, however, that in a
    future security environment, the United States could reduce non-
    strategic (i.e., tactical) nuclear weapons in Europe, assuming a
    reciprocal reduction by Russia. Until then, and for as long as NATO
    remains a nuclear alliance, NATO will ensure that all components of its
    nuclear deterrent remain safe, secure, and effective.

        16. Senator Sessions. Secretary Creedon, has the U.S. Government
    examined the feasibility of verifying Russian compliance with an
    agreement to reduce tactical nuclear weapons?
        Ms. Creedon. Although we have not yet begun detailed discussions
    with Russia on the topic of future nuclear reductions, we have begun to
    explore verification methodologies that might be used in future efforts
    to verify Russian non-strategic warhead reductions. The administration,
    in consultation with NATO allies, is working to initiate bilateral
    discussions with the Russian Federation on an agreement to address
    tactical nuclear weapons stockpiles of the United States and the
    Russian Federation in a verifiable manner.

        17. Senator Sessions. Secretary Creedon, since cruise missiles,
    torpedoes, and rockets can be armed with conventional or nuclear
    warheads, how can we effectively verify tactical nuclear weapons on the
    Russian side?
        Ms. Creedon. Although we have not yet begun detailed discussions
    with Russia on the topic of future nuclear reductions, we have begun to
    explore verification methodologies that might be used in future efforts
    to verify Russian non-strategic warhead reductions. The administration,
    in consultation with NATO allies, is working to initiate bilateral
    discussions with the Russian Federation on an agreement to address
    tactical nuclear weapons stockpiles of the United States and the
    Russian Federation in a verifiable manner.

        18. Senator Sessions. Secretary Creedon, given that the Russians
    maintain a robust nuclear production infrastructure, how can we verify
    that dismantled tactical nuclear weapons are not being replaced by new
    warheads?
        Ms. Creedon. Although we have not yet begun detailed discussions
    with Russia on the topic of future nuclear reductions, we have begun to
    explore verification methodologies that might be used in future efforts
    to verify Russian non-strategic warhead reductions. The administration,
    in consultation with NATO allies, is working to initiate bilateral
    discussions with the Russian Federation on an agreement to address
    tactical nuclear weapons stockpiles of the United States and the
    Russian Federation in a verifiable manner.

                           NUCLEAR DETERRENCE FUNDING

        19. Senator Sessions. Secretary Creedon, according to figures
    presented to Congress last year in the so-called Section 1043 Report,
    the 10-year costs for U.S. nuclear delivery systems were approximately
    $119 billion, not including funding for a new bomber and a new ICBM.
    Furthermore, the 10-year cost to sustain and modernize the Nation's
    nuclear command and control system was estimated at $36 billion. This
    works out to a total of $255 billion over the next 10 years, not
    including the new bomber or ICBM. Can you update us on this 10-year
    figure, to include funding for the bomber and ICBM?
        Ms. Creedon. We are currently in the final stages of preparing an
    updated Section 1043 Report. When submitted, that report will provide
    updated 10-year cost data. The report will not include the full costs
    for the new bomber and ICBM. We are still in the early phases of the
    capability analysis process and have not selected a future system that
    could be used to develop a cost model.

        20. Senator Sessions. Secretary Creedon, is it fair to include in
    this sum the entire bill for a new strategic bomber, which will also
    have a significant conventional mission?
        Ms. Creedon. Our budgeting system does not allow for splitting
    program costs among multiple missions assigned to the same platforms.
    Because of its global reach, the new heavy bomber is a strategic asset
    and probably best left under nuclear deterrence funding.

        21. Senator Sessions. Secretary Creedon, this works out to about 4
    percent of the total DOD budget. Why does the administration believe it
    is necessary to spend this much to maintain a credible nuclear
    deterrent?
        Ms. Creedon. The President has pledged that as long as nuclear
    weapons exist, the United States will maintain a safe, secure, and
    effective arsenal, both to deter potential adversaries and to assure
    U.S. allies and partners. These expenses reflect investments in
    capabilities currently residing in systems that have largely outlasted
    their originally planned service lives. Finally, our budgeting system
    does not allow for splitting program costs among platforms performing
    multiple missions. Therefore, the full costs of systems like the long-
    range bomber that have a significant conventional mission are counted
    against U.S. nuclear deterrence. This is a substantial reduction from
    the much larger percentage, 17 percent of the DOD budget at the height
    of the Cold War.

        22. Senator Sessions. Secretary Creedon, what are the threats in
    the future that warrant such an expense?
        Ms. Creedon. The array of nuclear-armed states and states pursuing
    nuclear weapons around the world complicates the global security
    environment. All of the countries that currently possess nuclear
    weapons have modernized, or are undergoing modernization, of their
    nuclear arsenals. This has resulted in weapons with longer ranges,
    improved means of delivery, and improved warhead types. The
    unpredictable security environment, in combination with these advancing
    capabilities, warrants such an expense.

                       U.S. NUCLEAR STRATEGY AND GUIDANCE

        23. Senator Sessions. Secretary Creedon, when you appeared before
    this subcommittee in March 2012, you told us that the President should
    be ready to release the results of his 90-day Post NPR Implementation
    Study and his new nuclear employment strategy ``within the next couple
    of weeks.'' It has yet to be released. Can you tell me when, if ever,
    the administration intends to divulge the results of the Post NPR
    Implementation Study?
        Ms. Creedon. The study is still underway and we will provide
    briefings on its results when it is complete.

        24. Senator Sessions. Secretary Creedon, are there any significant
    changes to U.S. nuclear weapons employment guidance or nuclear strategy
    in the offing?
        Ms. Creedon. As stated in the NPR, the United States will continue
    to ensure that, in the calculations of any potential opponent, the
    perceived gains of attacking the United States or its allies and
    partners would be far outweighed by the unacceptable costs of the
    response. The NPR also stated that the size and pace of any future U.S.
    nuclear force reductions will be implemented in ways that maintain the
    reliability and effectiveness of security assurances to our allies and
    partners. The administration continues to work on the NPR
    implementation study.

        25. Senator Sessions. Secretary Creedon, what is the purpose of
    revising long-held U.S. nuclear weapons guidance?
        Ms. Creedon. The administration is conducting a follow-on analysis
    called for in the 2010 NPR to update our assessment of deterrence
    requirements and develop options for potential future reductions in the
    U.S. nuclear arsenal. We needed to conduct this review because our 21st
    century deterrence challenges are fundamentally different from those we
    encountered in the last century. Every President in the nuclear age has
    reviewed U.S. plans and capabilities to ensure that they address the
    threats we face and maintain strategic deterrence and stability. Doing
    so is a necessary and appropriate exercise of the President's authority
    as Commander in Chief. Under the President's direction, DOD has
    conducted a nuclear force analysis that, among other things, considered
    potential changes in targeting requirements and force postures. As was
    the case following the 1994 and 2001 NPRs, after due consideration of
    the analysis, the administration will also revise guidance and
    operational plans to align with the President's nuclear policies.

        26. Senator Sessions. Secretary Creedon, is the administration
    contemplating any changes in the alert status of U.S. nuclear forces?
        Ms. Creedon. The 2010 NPR considered the possibility of reducing
    alert rates for ICBMs and the at-sea rates of ballistic missile
    submarines. The NPR concluded that such steps could reduce crisis
    stability by giving an adversary the incentive to attack before re-
    alerting was complete. With that said, DOD is continuously assessing
    whether future changes to alert posture are possible and desirable;
    none are being considered at this time.

        27. Senator Sessions. Secretary Creedon, is the administration
    contemplating any changes to the purposes for which nuclear weapons
    would be used?
        Ms. Creedon. The administration's declaratory policy for nuclear
    employment is laid out in the 2010 NPR, which states that the United
    States would only consider the use of nuclear weapons in extreme
    circumstances to defend the vital interests of the United States or its
    allies and partners. The NPR also delineates the U.S. formal Negative
    Security Assurance, which provides that ``the United States will not
    use or threaten to use nuclear weapons against non-nuclear weapons
    states that are party to the Nonproliferation Treaty (NPT) and in
    compliance with their nuclear nonproliferation obligations.'' The NPR
    makes clear that the United States reserves the right to respond by
    nuclear means to any threat to its vital interests, or those of an ally
    or partner, by a state not in good standing with its NPT obligations or
    by nuclear weapon states, and by states not party to the NPT,
    regardless of whether the threat is posed by nuclear, biological,
    chemical, or other means.

                NEW START FORCE STRUCTURE AND FURTHER REDUCTIONS

        28. Senator Sessions. Secretary Creedon, has DOD made any decisions
    related to the elimination of deployed nuclear forces to accommodate
    the New START treaty limits of 700 deployed delivery systems and 1,550
    nuclear warheads?
        Ms. Creedon. DOD is assessing the appropriate force structure under
    the New START treaty. A decision on reductions in U.S. forces to meet
    New START treaty limits is expected to be finalized before fiscal year
    2015 begins. This timeline provides the flexibility to tailor our force
    structure to meet deterrence and assurance requirements while still
    enabling us to meet the Treaty's compliance date in February 2018.

        29. Senator Sessions. Secretary Creedon, what will our nuclear
    force posture of ICBMs, SLBMs, and bombers look like in the next few
    years?
        Ms. Creedon. The U.S. nuclear force structure remains a triad of
    forces as described in the 2010 NPR because it is the best approach for
    maintaining effective U.S. nuclear deterrence. Maintaining the triad,
    modernizing the nuclear forces that comprise it, and modernizing the
    nuclear weapons infrastructure are--and will remain--national security
    priorities.
        The President's budget request represents a responsible balance
    between our nuclear infrastructure modernization needs and the current
    fiscal environment/budget uncertainties. Given the declining defense
    budget, some strategic delivery system modernization efforts may
    proceed more slowly than desired. Within existing budget constraints,
    the administration, through the efforts of DOD and the NNSA, is
    modernizing U.S. strategic delivery systems and the nuclear complex and
    its associated infrastructure, and is sustaining the nuclear stockpile
    in accordance with its commitments to Congress and under the New START
    treaty.

        30. Senator Sessions. Secretary Creedon, there are reports in the
    press that the administration is starting to talk with Russia about
    further nuclear reductions. Have you done the analysis to suggest that
    further reductions are in our national security interests? Please
    elaborate.
        Ms. Creedon. The administration has been conducting a NPR
    implementation study to review our nuclear deterrence requirements and
    operational plans to ensure they address today's threats. The analysis
    is not yet complete, but our preliminary view based on work to date is
    that further reductions consistent with the national security
    environment will be possible. Once the President reviews the results of
    the study and makes decisions regarding its recommendations, the
    administration will revise employment guidance and operational plans
    accordingly. The President's decisions regarding the study
    recommendations will also provide the foundation on which we can
    develop specific proposals regarding further nuclear reductions that we
    can use as the basis for discussions with Russia.

        31. Senator Sessions. Secretary Creedon, do Chinese nuclear forces
    factor into this analysis?
        Ms. Creedon. Yes. As referenced in the 2010 NPR, any future
    reductions must continue to strengthen deterrence of potential regional
    adversaries, strategic stability vis-a-vis Russia and China, and
    assurance of our allies and partners. Although Russia's nuclear forces
    remain the significant factor in determining how much and how fast we
    are prepared to reduce U.S. forces, our force structure analysis also
    accounts for China's nuclear force modernization. We will also continue
    to engage with China in the areas of military transparency and
    sustaining strategic stability.

        32. Senator Sessions. Secretary Creedon, does Russia want to pursue
    further reductions?
        Ms. Creedon. We believe that it is in Russia's interests to pursue
    further reductions. Because of improved relations with Russia, strict
    numerical parity in nuclear weapons is no longer as compelling as it
    was during the Cold War. On the other hand, large disparities in
    nuclear capabilities could raise concerns on both sides and among U.S.
    allies and partners, and may not be conducive to maintaining a stable,
    long-term strategic relationship, particularly at lower numbers.
    Therefore, we will continue to place importance on Russia joining us as
    we pursue additional reductions in nuclear stockpiles.

        33. Senator Sessions. Secretary Creedon, to your knowledge, has
    Russia established any preconditions on missile defense, tactical
    nuclear weapons, conventional prompt strike, or any other items?
        Ms. Creedon. Although we are in the early stages of discussions
    with Russia on the topic of missile defense, we have not initiated
    discussions on tactical nuclear weapons or conventional prompt strike.
    I am not aware of any formal preconditions established by the Russian
    Federation on these topics. The President's Annual Report to Congress
    on Non-Strategic Nuclear Weapons (submitted pursuant to Condition 12(B)
    of the New START Treaty's Resolution of Ratification), however, sets
    forth details on Russia's well-known position on the distribution of
    U.S. non-strategic nuclear weapons and infrastructure, and may provide
    additional insight into possible Russian negotiating positions.

        34. Senator Sessions. Secretary Creedon, do you intend to address
    the disparity in tactical nuclear weapons that was noted in the New
    START Resolution of Ratification? If so, will you do it in a verifiable
    manner?
        Ms. Creedon. Yes, the administration has been clear that future
    discussions with Russia should include non-strategic nuclear weapons,
    consistent with the Senate's Resolution of Advice and Consent to
    Ratification of the New START treaty.

        35. Senator Sessions. Secretary Creedon, can you tell me how you
    intend to verify compliance with a treaty that addresses tactical
    nuclear weapons?
        Ms. Creedon. Although we have not yet begun detailed discussions
    with Russia on the topic of future nuclear reductions, we have begun to
    explore verification methodologies that might be used in future efforts
    to verify Russian non-strategic warhead reductions. The administration,
    in consultation with NATO allies, is working to initiate bilateral
    discussions with the Russian Federation on an agreement to address
    tactical nuclear weapons stockpiles of the United States and the
    Russian Federation in a verifiable manner.

        36. Senator Sessions. Secretary Creedon, seven Senators on the
    Senate Select Committee on Intelligence (SSCI) sent a letter to
    Secretary of State Kerry ``regarding compliance and verification issues
    associated with U.S.-Russia arms control agreements.'' Are you aware of
    this letter and the issues associated with it?
        Ms. Creedon. Yes.

        37. Senator Sessions. Secretary Creedon, do you agree that we must
    address any potential Russian violations before proceeding with yet
    another arms reduction agreement?
        Ms. Creedon. Compliance with legal obligations is central to the
    effectiveness of arms control treaties, and concerns about non-
    compliance must be addressed. Although resolution of such issues with
    Russia is clearly important, I do not believe that discussions of
    further nuclear arms reductions need await resolution of all compliance
    issues.

        38. Senator Sessions. Secretary Creedon, does the administration
    intend to seek Senate advice and consent for any future agreement with
    the Russians to reduce nuclear weapons?
        Ms. Creedon. The administration will consult closely with Congress
    regarding any additional arms control agreements, including whether
    such an agreement should occur through the treaty power and therefore
    be subject to Senate advice and consent.

        39. Senator Sessions. Secretary Creedon, we were told during New
    START hearings that the resulting nuclear balance would be stable. If
    this is the case, why pursue another round of reductions which could
    upset stability if smaller U.S. forces are vulnerable to a surprise
    Russian attack; and encourage other nuclear powers to build up to U.S.
    and Russian force levels?
        Ms. Creedon. Because of improved relations with Russia, strict
    numerical parity in nuclear weapons is no longer as compelling as it
    was during the Cold War. On the other hand, large disparities in
    nuclear capabilities could raise concerns on both sides and among U.S.
    allies and partners, and may not be conducive to maintaining a stable,
    long-term strategic relationship, particularly at lower numbers.
    Therefore, we will continue to place importance on Russia joining us as
    we pursue additional reductions in nuclear stockpiles. The United
    States and Russia together still account for a vast majority of the
    world's nuclear weapons, even after the central limits of the New START
    treaty are reached in February 2018. For this reason, our focus for the
    next stage of arms control remains bilateral efforts with Russia where
    we intend to pursue further reductions and transparency with Russia
    that would include all nuclear weapons--deployed and non-deployed,
    strategic and non-strategic--while ensuring that we maintain our
    commitments to stability with other nuclear powers, deterrence of
    potential adversaries, and assurance of our allies and partners.

        40. Senator Sessions. Secretary Creedon, what, really, is the
    purpose of another round of reductions?
        Ms. Creedon. The array of nuclear-armed or nuclear weapons-pursuing
    states around the world complicates the global security environment.
    Despite this, even after the central limits of the New START treaty are
    reached in February 2018, the United States and Russia will still
    account for the majority of the world's nuclear weapons--and these are
    many more than are needed for deterrence. For this reason, our focus
    for the next stage of arms control remains bilateral efforts with
    Russia. Through these efforts we intend to pursue further reductions
    and expand transparency to include all nuclear weapons--deployed and
    non-deployed, strategic and non-strategic--while ensuring that we
    maintain our commitments to stability with other nuclear powers, deter
    potential adversaries, and assure our allies and partners at the lowest
    feasible numbers.

             RESPONSIVE NUCLEAR INFRASTRUCTURE VIA MODULAR CONCEPT

        41. Senator Sessions. Secretary Creedon, in the budget request for
    fiscal year 2013, the administration last year decided to defer by at
    least 5 years the start of construction of the CMRR-NF. This caused
    great concern because CMRR-NF was deemed necessary, even by the 2010
    NPR, for a responsive nuclear infrastructure. Can you tell me whether
    the requirement for a responsive nuclear infrastructure, as defined in
    the NPR, is still valid?
        Ms. Creedon. A responsive nuclear infrastructure is still valid and
    remains our goal. A responsive infrastructure would allow the United
    States to shift away from retaining large numbers of non-deployed
    warheads as a technical hedge, allowing for additional reductions in
    the U.S. stockpile of non-deployed nuclear weapons.

        42. Senator Sessions. Secretary Creedon, I understand the
    administration is now looking at a modular approach for the
    construction of the CMRR-NF that would build smaller buildings, as
    needed, and connect them by tunnels to Plutonium Facility-4, the pit
    production facility at Los Alamos. Can you tell me whether you think
    this approach is promising?
        Ms. Creedon. I think the concept has merit and is worth
    considering. Because the acquisition timeline for CMRR-NF now overlaps
    the timeline to recapitalize the Plutonium Facility-4, which is also
    aging, the NWC is exploring an integrated approach to the suite of
    support capabilities planned for CMRR-NF and to provide long-term pit
    manufacturing capability. Over the next several weeks, the NNSA, with
    support from DOD's CAPE office, will carry out a business case analysis
    of the modular concept and other alternatives to consider risks and
    benefits, and to seek initial insights into feasibility of delivery of
    key capabilities. At the conclusion of the study, NNSA will report its
    assessment to the NWC and relevant congressional committees.

        43. Senator Sessions. Secretary Creedon, can we achieve that
    responsive infrastructure called for in the 2010 NPR via this modular
    approach?
        Ms. Creedon. Pit production is one factor of the responsive
    infrastructure documented in the NPR. The NNSA, with support from DOD's
    CAPE office, is carrying out a business case analysis of the modular
    concept and other options for a plutonium capability to seek initial
    insights into the feasibility of the modular concept, and to address
    risks and benefits. Our plutonium strategy will enable an interim
    production capability of 30 pits per year by 2021 and would help to
    maintain critical skills in the workforce, which is another key piece
    of a responsive infrastructure. Success in this is underpinned by the
    approval of the reprogramming request that is needed to begin these
    actions.

        44. Senator Sessions. Secretary Creedon, will DOD take a proactive
    role, using the NWC, to determine the feasibility of the modular
    approach by this summer?
        Ms. Creedon. Yes. We in the Office of the Under Secretary of
    Defense for Policy are working proactively through the NWC, in
    conjunction with the NNSA and our DOD counterparts, including the CAPE
    office, to ascertain whether the modular approach can deliver interim
    capabilities earlier than planned for CMRR-NF. We expect to complete
    this process in the next several months, although I cannot predict with
    certainty when this analysis will be complete.

        [Whereupon, at 3:30 p.m., the subcommittee adjourned.]

     DEPARTMENT OF DEFENSE AUTHORIZATION OF APPROPRIATIONS FOR FISCAL YEAR
                   2014 AND THE FUTURE YEARS DEFENSE PROGRAM

                                  ----------

                           WEDNESDAY, APRIL 24, 2013

                                   U.S. Senate,
                      Subcommittee on Strategic Forces,
                                   Committee on Armed Services,
                                                        Washington, DC.

    MILITARY SPACE PROGRAMS AND VIEWS ON DEPARTMENT OF DEFENSE USAGE OF THE
                            ELECTROMAGNETIC SPECTRUM

        The subcommittee met, pursuant to notice, at 2:30 p.m. in
    room SR-222, Russell Senate Office Building, Senator Mark Udall
    (chairman of the subcommittee) presiding.
        Committee members present: Senators Udall, Sessions, and
    Fischer.
        Majority staff member present: Jonathan S. Epstein,
    counsel.
        Minority staff member present: Daniel A. Lerner,
    professional staff member.
        Staff assistant present: Lauren M. Gillis.
        Committee members' assistants present: Jason Rauch,
    assistant to Senator McCaskill; Casey Howard, assistant to
    Senator Udall; Lenwood Landrum, assistant to Senator Sessions;
    and Peter Schirtzinger, assistant to Senator Fischer.

           OPENING STATEMENT OF SENATOR MARK UDALL, CHAIRMAN

        Senator Udall. Let me bring today's hearing of the
    Strategic Forces Subcommittee to order.
        This afternoon, we will receive testimony from the
    Department of Defense (DOD) regarding military space programs
    for fiscal year 2014. We will also examine DOD's use of
    electromagnetic spectrum in a second panel.
        For planning purposes, the first panel on DOD's space
    programs will end at 3:30 p.m. so that we can hear from the
    second panel on electromagnetic spectrum, and that second panel
    will end around 4 p.m.
        We will take very short opening statements from our
    witnesses, no more than a minute or 2 to highlight anything
    they think is important for us to hear.
        As always, I am honored to work with our distinguished
    ranking member, Senator Sessions. Colorado and Alabama have
    important roles in space. Colorado is home to the Air Force's
    Space Command, and Alabama is home to the Army's Space and
    Missile Defense Command. We have the commanding generals from
    both commands here today, and I thank them and all the
    witnesses for taking the time to testify before the
    subcommittee.
        With that, let me make some short comments regarding the
    fiscal year 2014 space budget.
        The Air Force is finally making strides in bringing their
    satellite programs on track after years of cost overruns. That
    is a good news story. There are still open questions regarding
    launch services as DOD works to lower costs and balance the
    incumbent launch provider with new entrants. I would like to
    hear from General Shelton how we assure that we have reliable
    access to space while continuing to lower costs.
        I look forward to hearing from the Army on how they are
    approaching access to space. My understanding is that they are
    developing low-cost, innovative space programs.
        The Navy is now launching their mobile user satellite
    system which provides line-of-sight access to users around the
    world. I would like to hear how they are bringing the terminals
    online to receive the signals from the satellites.
        In the policy area, I would like to hear about how we are
    implementing plans to protect our satellites from impacting
    with debris and other nations' satellites. I hope that we will
    be able to hear about policies to deter hostile actions that
    other nations might take against us in space.
        Finally, I would like to hear from the Government
    Accountability Office (GAO) on what long-term problems they see
    in the area of disaggregation of large satellite systems. There
    has been a lot of talk here, but we do not know the long-term
    consequences.
        Then finally for the second panel on electromagnetic
    spectrum, there has been much debate about DOD's use of a
    frequency band that has commercial potential. We must balance
    our national security while promoting cooperation and
    competition and economic growth that would come from commercial
    use of this band. I believe we can get there, and I think we
    all agree that it must be done in a careful and thoughtful way.
    I look forward to the second panel's views on this subject.
        With that, let me turn to my ranking member and my friend,
    Senator Sessions, for his opening statement, and then we will
    move on to questions.

                   STATEMENT OF SENATOR JEFF SESSIONS

        Senator Sessions. Thank you, Senator Udall. It is great to
    work with you and I appreciate your expertise and
    cooperativeness as we work together.
        I will just be brief and maybe offer my full statement for
    the record.
        We are keenly aware of the unprecedented budget situation
    facing DOD and we know that frugality is the order of the day.
    Managing capability development and acquisitions over the next
    5 years will define for decades perhaps how space will either
    enable our warfighting capability or limit our warfighting
    capability.
        I am pleased to see the Evolved Expendable Launch Vehicle
    (EELV) recorded a $1.1 billion reduction in costs over the next
    5-year budget, and I applaud the Air Force in reducing cost.
    That was a competitive bid process you worked out. So we made
    some progress. I think that is something that people should
    know. That was quite a good thing.
        We have the spectrum issue, as the chairman mentioned. I
    will not go into detail except that it has caused quite a bit
    of interest. It looks like DOD has estimated that moving to a
    new spectrum band could take at least 10 years and cost nearly
    $13 billion. So this is a matter that requires examination
    because we have private sector people who want to be engaged in
    this, and it is just a matter we will be able to talk about
    today.
        Mr. Chairman, I look forward to hearing from this
    distinguished panel and appreciate the opportunity to share
    these remarks.
        I welcome Senator Fischer for her great participation in
    these committees. She has weighed in already with great
    interest. I believe you like all these space, missile, atom
    bomb issues.
        Senator Fischer. I do.
        Senator Sessions. I know. You do actually. Thank you for
    your leadership.
        [The prepared statement of Senator Sessions follows:]

                  Prepared Statement by Senator Jeff Sessions

        Thank you very much, Mr. Chairman, I join you in welcoming our
    distinguished panel of witnesses. I would like to extend a special
    welcome to Lieutenant General Richard Formica, the Commander of the
    Army Space and Missile Defense Command in Huntsville. We have two
    panels and many witnesses so in the interest of time I will keep my
    opening remarks brief.
        The purpose of the first panel of our hearing today is to discuss
    the President's fiscal year 2014 budget request for military space
    programs. We are all keenly aware of the unprecedented budget situation
    facing the Department of Defense. Nothing is immune to budget cuts,
    including strategic enablers such as defense space systems. Managing
    capability development and acquisitions over the next 5 years will
    define for decades how space will either enable our warfighting
    capacity or limit our global reach. Today's hearing affords us the
    opportunity to assess these challenges and better understand the impact
    they will have on the space enterprise. I look forward to discussing
    with each of our witnesses the steps they are taking to maximize
    capability with fewer resources.
        After many years of cost overruns and delays, I am pleased to
    report that the fiscal year 2014 Air Force budget archives a cost
    savings of $2.8 billion across three of the Departments costliest space
    programs. I mentioned in our hearing last year that space launch is an
    area where more must be done to address affordability pleased to see
    that the Evolved Expendable Launch Vehicle, also known as EELV,
    recorded a $1.1 billion reduction over the 5 year budget and applaud
    the Air Force for its focus on reducing cost. I look forward to better
    understanding if and how such savings will be reinvested within the
    space program to ensure continued space dominance.
        Our second panel will focus on the Defense Department's
    electromagnetic spectrum requirements and long-term planning. A
    national initiative to maximize usage and free up additional spectrum
    for public consumption has caused many to examine the Department of
    Defense's utilization. The private sector has expressed growing
    interest in freeing spectrum bands for auction currently occupied by
    DOD such as the 1755 to 1850 Megahertz band. Unfortunately, few thus
    far have proposed a plan which ensures full reimbursement and
    comparable alternative spectrum elsewhere for the Pentagon. The
    Department has estimated that moving to a new spectrum band would take
    at least 10 years and cost nearly $13 billion. While some have
    suggested breaking that band into smaller bites, the technical
    feasibility of doing so remains unclear.
        I fully support the goal to free additional spectrum to ensure
    global competitiveness, but in doing so we must ensure that the
    Department is not left holding the bill. With over $1 trillion in
    Defense spending at risk under sequester, the Defense Department is in
    no place to move to any new spectrum bands without guarantees that it
    will be fully reimbursed and that mission readiness will not be
    impeded.

        Senator Udall. Thank you, Senator Sessions. It is truly
    important that Senator Fischer is involved and we welcome her
    engagement in this important subcommittee.
        In the spirit of my opening remarks, I mentioned I would
    like each one of you, if you are so inclined, to give us a 1-
    to 2-minute statement and then we will go right to questions.
    So we will start to our left and work right across the panel.
        Secretary Loverro?

    STATEMENT OF MR. DOUGLAS L. LOVERRO, DEPUTY ASSISTANT SECRETARY
                        OF DEFENSE, SPACE POLICY

        Mr. Loverro. Thank you, Chairman Udall and Ranking Member
    Sessions, Senator Fischer. Thank you for the opportunity to
    testify this afternoon.
        A year ago, Assistant Secretary Madelyn Creedon testified
    here about the progress of implementing the national space
    security strategy. I am pleased to join General Shelton,
    Lieutenant General Formica, Dr. Zangardi, and Ms. Chaplain to
    continue that discussion today.
        Let me start with the basic reality that space remains
    vital to our national security. You have both expressed that.
    But the evolving strategic environment increasingly challenges
    U.S. space advantages, advantages that both our warfighters and
    our adversaries have come to appreciate. As space becomes more
    congested, competitive, and contested, DOD must formulate
    programs and policies that will secure those advantages for
    years to come.
        That reality is juxtaposed with the fact that as a Nation,
    we are providing these capabilities and environment that is
    increasingly cost-constrained. The growing challenges of
    budget, in addition to increasing external threats, compel us
    to think and act differently so that in the future what we
    choose to procure, how we choose to provision it, and the
    policies we govern it with reflect both our changed threat and
    fiscal environments.
        While these two realities present us with a clear
    challenge, I do not, by any means, view them with a sense of
    doom or gloom. Newer entrepreneurial suppliers, alongside our
    legacy suppliers, are creating an ever-burgeoning commercial
    space market that can provide significant advantage to DOD if
    we formulate the policies and strategies to encourage their
    growth and use.
        Similarly, there has been a growth worldwide in allied
    space investment and capability, and those provide a
    significant opportunity for DOD to help us build resilience
    into our space capabilities.
        The policies and strategies that I will discuss here today
    begin to address those challenges and opportunities, but they
    are just the initial steps in an area that will continue to
    demand attention and action from all of us.
        Thank you very much, and I look forward to your questions.
        [The prepared statement of Mr. Loverro follows:]

                    Prepared Statement by Douglas L. Loverro

        Chairman Udall, Ranking Member Sessions, and members of the
    subcommittee, I am pleased to join General Shelton, Lieutenant General
    Formica, Dr. Zangardi, and Ms. Chaplain to testify on Department of
    Defense space programs and policies. A year ago, Assistant Secretary
    Madelyn Creedon testified here about the progress in implementing the
    National Security Space Strategy. I am pleased to continue that
    discussion today.
        Space remains vital to our national security, but the evolving
    strategic environment increasingly challenges U.S. space advantages.
    U.S. space capabilities allow our military to see with clarity,
    communicate with certainty, navigate with accuracy, and operate with
    assurance. Those capabilities, however, are being provided in a space
    environment that is increasingly congested, contested, and competitive.
    Space is increasingly congested, with tens of thousands of trackable
    manmade objects in orbit, contested, by an ever-increasing number of
    manmade threats, and competitive, as the U.S. technological lead in
    space is challenged.
        As a country, we are providing these capabilities in an environment
    that is severely cost-constrained. Space programs are, by their very
    nature, expensive, and as vulnerable to budget pressure as other
    government activities. Poorly planned past approaches to space programs
    have trapped us in a vicious cycle of delayed capability, mounting
    cost, and increased risk. The growing challenges of the budget, in
    addition to increasing external threats, compel us now to think and act
    differently so that in the future what we choose to procure, and how we
    choose to provision it, will reflect the changed space and fiscal
    environments.
        At the same time, it is not all doom and gloom. Over the last
    decade, we have seen a welcome growth in the U.S. space sector as newer
    entrepreneurial suppliers have begun to enter the space arena in both
    the launch and satellite markets. They are creating a burgeoning
    commercial space market that can provide significant advantage to DOD
    if we formulate the policies and strategies to encourage their growth
    and use. The policies and strategies that I will discuss today begin to
    address these challenges and opportunities, but these are just initial
    steps in an area that will continue to demand attention and action from
    us all.
        I would like to begin with a success story, one that not only
    energizes our industrial base, but also illustrates that our response
    to the challenges we face must involve the whole U.S. Government--DOD,
    State, Commerce, Congress, and others--as well as industry. A robust,
    competitive, and healthy industrial base underpins everything that we
    do in space. Over the past 2 decades, the health and competitiveness of
    the U.S. space industrial base has been challenged by overly
    restrictive export controls on satellites and related items. The
    changes made in the National Defense Authorization Act for Fiscal Year
    2013 put us on a path to modernize and appropriately tailor those
    export controls to allow industry to compete for sale of those items
    that are widely available, while focusing export controls on those
    items most critical to national security. I extend my thanks to
    Congress, and particularly this committee, for all of the hard work
    that went into enacting this legislative change.
        Updating satellite export controls will provide the U.S. satellite
    industry with an opportunity to restore its leadership by allowing it
    to compete on a more level playing field with its international
    competitors. This will be particularly beneficial to small- and medium-
    sized second and third tier U.S. companies that manufacture parts and
    components for satellites. These reforms will reduce the current
    incentives for satellite and component manufacturers in other countries
    to design out or avoid U.S.-origin content. In addition to improving
    the health and competitiveness of our industrial base, tailoring
    satellite export controls benefits national security by facilitating
    cooperation with our Allies and export control regime partners while
    maintaining robust controls necessary to protect national security.
        Moving forward, satellites and related items will follow the
    existing procedures of the President's Export Control Reform Initiative
    for rebuilding the categories of the U.S. Munitions List (USML) and
    their corresponding Commerce Control List (CCL) categories. The
    interagency team of Commerce, State, Defense, NASA, and the
    intelligence community will build on the substantial technical work
    they put into the report required by section 1248 of the National
    Defense Authorization Act for Fiscal Year 2010 to revise Category XV,
    Satellites and Related Items, of the USML and its CCL complement.
    Following a period of public comment on the draft categories, which
    should begin this spring, the interagency team will make changes based
    on those comments and consult with Congress both informally and
    formally before publishing final revised categories, hopefully by the
    end of the year. We look forward to working with you and our
    interagency partners to make these important changes to benefit the
    space industrial base and ultimately our national security.
        I view this as an extremely positive first step. But if we are to
    fully empower our commercial sector, as well as continue to derive the
    substantial benefits space confers, it will require more than just
    enhanced supplier access. It requires that we create a safe, stable,
    and secure space environment. We are pursuing several initiatives that
    seek to do just that.
        Space situational awareness (SSA) is foundational to all of our
    space activities. SSA capabilities provide the ability to avoid
    collision with debris or other active spacecraft, as well as rapidly
    detect, warn, characterize, and attribute natural or manmade phenomena
    affecting space systems. But effective SSA requires cooperation among
    space actors--we cannot do it alone. The increasingly congested space
    environment means that an unprecedented level of information sharing is
    needed among those actors to promote safe and responsible operations in
    space and to reduce the likelihood of mishaps, misperceptions, and
    mistrust. This year, the Commander of U.S. Strategic Command (STRATCOM)
    signed the first SSA data sharing agreement with a foreign government,
    and many more are in varying stages of negotiation. These agreements
    will complement STRATCOM's more than 35 existing SSA sharing agreements
    with commercial satellite operators. With the extension of this
    authority to foreign governments, the United States will be able to
    better assist our partners with current space operations and lay the
    groundwork for future cooperative projects. Consistent with existing
    legislative authority, we are committed to providing SSA services to
    increase the safety of spaceflight for space-faring nations.
        As more countries and companies field space capabilities, it is in
    everyone's interest to act responsibly and protect the safety and
    sustainability of the space domain. Much as we promoted the now well-
    accepted rules of the sea in centuries past to stimulate commerce,
    enhance security, and isolate irresponsible actors, the United States
    is taking a leading role in international efforts to promote
    responsible, peaceful, and safe use of space. A more cooperative,
    predictable environment enhances U.S. national security and discourages
    destabilizing crisis behavior. Working closely with the Department of
    State, we are supporting development of data standards, best practice
    guidelines, and transparency and confidence-building measures for
    responsible space operations. For instance, we are actively
    participating with other U.S. departments and agencies in the United
    Nations (U.N.) Committee on the Peaceful Uses of Outer Space's work on
    furthering the long-term sustainability of space, as well as U.S.
    inputs to a study by a U.N. Group of Government Experts, which is
    examining possible transparency and confidence building measures.
        The Department of Defense supports U.S. efforts to work with the
    European Union and other spacefaring countries to develop an
    International Code of Conduct for Outer Space Activities. A widely-
    subscribed Code will encourage responsible space behavior and help
    identify those who act otherwise, thereby reducing risk of
    misunderstanding and misconduct. The draft International Code of
    Conduct focuses on reducing the risk of debris creation and increasing
    the transparency of space operations. It reflects U.S. best practices
    and is consistent with current U.S. practices such as notification of
    space launches and sharing of space data to avoid collisions.
        It is important to note that the draft Code of Conduct is not
    legally binding and that it recognizes the inherent right of self-
    defense. It focuses on activities, rather than unverifiable
    capabilities, and better serves our interests than the legally-binding
    but unverifiable ban on ``space weapons'' proposed by others. We are
    committed to ensuring that any Code of Conduct for space activities
    advances, rather than hampers, our national security, and we will
    continue to actively participate in international negotiations to shape
    the Code. With each subsequent draft of the Code, we will assess the
    text for any potential adverse programmatic or operational impact to
    ensure that a final Code fully supports our national interests. We are
    committed to working with the Department of State to keep you informed
    on the process of developing an international Code of Conduct.
        Working with international partners to encourage responsible
    behavior in space is only a part of our engagement with other space
    actors. We are also pursuing opportunities to partner with responsible
    nations, international organizations, and commercial firms to augment
    the U.S. national security space posture. Through these partnerships,
    we can ensure access to information and services from a more diverse
    set of systems. This provides a direct advantage in a contested space
    environment. Decisions on partnering are made consistent with U.S.
    policy and international commitments and take mutual performance
    benefits, costs, protection of sources and methods, and effects on the
    U.S. industrial base into consideration.
        While space is a domain in which we once operated unchallenged and
    independent, increasingly we need to operate in space as we do in other
    domains: in coalitions. Led by General Kehler at STRATCOM, the
    Department is working with close allies to develop the Combined Space
    Operations (CSpO) concept. CSpO is a multinational effort focused on
    cooperation, collaboration, and the integration of military space
    activities to strengthen deterrence, improve mission assurance, and
    enhance resilience while optimizing resources across the participating
    countries. We have completed an initial period of discovery with close
    allies and are working to further refine the concept and eventually
    broaden participation to include additional spacefaring countries.
        Our allies have significant and growing space-based capabilities in
    a range of mission areas. By leveraging their systems, we can augment
    our capabilities, add diversity and resilience to our architectures,
    and complicate the decisionmaking of potential adversaries. For
    example, last year we signed an agreement with Canada to incorporate
    data from their recently launched Sapphire sensor into the U.S. Space
    Surveillance Network, and an agreement with Australia to jointly
    operate a C-band ground-based radar system from the southern
    hemisphere. We are also exploring jointly operating a Space
    Surveillance Telescope (SST) on Australian soil. These efforts enhance
    our collective SSA capabilities, and will directly contribute to the
    long-term safety and sustainability of the domain. Cooperation can also
    better enable coalition operations on land, at sea, and in the air,
    since space-based capabilities are critical enablers of capabilities in
    these other domains.
        As I already mentioned, commercial entities are increasingly
    important to the Department, and we are pursuing strategic partnerships
    with these firms to stabilize costs and improve resilience. We are
    exploring innovative approaches, such as multi-year contract authority
    or co-investment for commercial space services, hosted payloads, and
    disaggregated architectures in order to take advantage of the most
    competitive sectors of our space market. The Department has developed
    criteria to certify the reliability of new space launch vehicles and
    will openly compete up to 14 national security space launches in the
    next 5 years. To spur that certification and competition, we recently
    awarded two scientific missions to one of these firms and placed
    several other launch providers on contract for future similar missions.
    Those efforts will help to demonstrate the full range of capabilities
    necessary to launch the existing range of national security missions.
        At the same time, we have guaranteed our current launch provider at
    least twenty-eight launches. Doing so provides stability to an
    industrial base that provides critical services, but also ensures a
    level playing field for competition that can spur innovation, improve
    capabilities, and most importantly reduce costs without increasing
    risk. To spur continued growth in the commercial space sector and to
    foster the competition that creates benefits, which DOD can reap, we
    will complement these efforts with policies that guarantee a level
    playing field in the future. Over the next few years we will begin
    those same steps on the satellite side of our architectures,
    emphasizing the use of the competitive market and diversity of
    capability to not only drive down costs but also to enhance resilience
    and U.S. industrial competitiveness.
        All of these efforts across the Department are being led and
    overseen by a rejuvenated governance structure. The changes to the
    management and coordination of the national security space enterprise,
    including the establishment of the Defense Space Council, and the
    designation of the Secretary of the Air Force as the Executive Agent
    for Space, have resulted in significant improvements in information
    flow across DOD and among U.S. departments and agencies. It has also
    improved the process for acquisition and policy decisions. We
    understand Congress' action to reinstate the Operationally Responsive
    Space (ORS) office and funding, and are working to ensure its goals are
    realized across future space programs.
        Many of the things that I discussed today have been briefed to you
    previously as part of the National Space Policy and National Security
    Space Strategy (NSSS). We have continued our implementation of the NSSS
    this year, incorporating these concepts into our first update of the
    Department of Defense's Space Policy in 13 years. The DOD Space Policy
    implements the National Space Policy and NSSS within the formal DOD
    system of directives, regulations, and guidance, and reflects the
    Department of Defense's 2012 Strategic Guidance. Together with the June
    2012 National Military Strategy for Space Operations, the policy update
    institutionalizes the changes that DOD is making in a constrained
    budget environment to address the complex set of space-related
    challenges and opportunities it faces.
        The Department looks forward to working closely with Congress, our
    interagency partners, our allies, and U.S. industry to continue
    implementing this new approach to space.
        Senator Udall. Thank you.
        Secretary Zangardi?

     STATEMENT OF DR. JOHN A. ZANGARDI, DEPUTY ASSISTANT SECRETARY
     OF THE NAVY FOR COMMAND, CONTROL, COMMUNICATIONS, COMPUTERS,
            INTELLIGENCE, INFORMATION OPERATIONS, AND SPACE

        Dr. Zangardi. Good afternoon. Chairman Udall, Ranking
    Member Sessions and Senator Fischer, thank you for the
    privilege to speak before you today. I will keep my comments
    very brief.
        At last year's hearing, we discussed the launch of the
    first Mobile User Objective System (MUOS) satellite and the
    great accomplishments of the program. I am happy to report that
    the program has continued to progress towards full capability.
    MUOS-1 became operational to the warfighter, supporting legacy
    Ultra-High Frequency (UHF) operations on November 2, 2012.
    Additionally, MUOS-2 is on schedule to launch from Cape
    Canaveral on July 19, which will bring us one step closer to
    providing global communications access to the warfighter.
        Terminal development continues to progress as the MUOS
    waveform was completed in November 2012 and made available on
    the Joint Tactical Network Center information repository for
    use by commercial vendors in December 2012. Multiple vendors
    have downloaded the waveform and are working to develop radios
    which will be used by all Services. Once MUOS-2 completes its
    90-day on-orbit checkout, the Navy will continue its risk
    reduction events to thoroughly test all portions of the
    wideband code division, multiple access (WCDMA) capability to
    include the satellites, ground stations, Defense Information
    Systems Agency (DISA) teleports, and the radios. Although we
    expect to have challenges in each of the scheduled risk
    reduction events, we are confident that this early testing will
    enable a successful operational evaluation. We expect to have
    an operational WCDMA capability by summer 2014.
        Significant accomplishments have been made at three of the
    four ground stations. Sites at Geraldton, Australia, Wahiawa,
    Hawaii, and northwest Virginia have completed final hardware
    installation and will complete final acceptance testing this
    summer. The final site in Niscemi, Italy, is expected to be
    complete by December 2014.
        The Navy will continue to focus on the successful
    deployment and development of the MUOS constellation and the
    replacement of legacy UHF capability. I want to point out that
    there has been tremendous teamwork in this program between the
    Navy, Army, DISA, and the Office of the Secretary of Defense
    (OSD) to deliver this capability. Industry has delivered in
    this case on cost.
        Senator, I am standing by for your questions.
        [The prepared statement of Dr. Zangardi follows:]

                   Prepared Statement by Dr. John A. Zangardi

                                  INTRODUCTION

        Mr. Chairman, distinguished members of the subcommittee, I am
    honored to appear before you today to address the Navy's space
    activities. Space capabilities form the foundation of the Navy's
    ability to operate forward, especially as the Navy shifts it focus
    towards the Pacific. As a forward deployed force, the Navy is highly
    dependent upon space-based systems for over-the-horizon communications
    and battlespace awareness in support of joint warfighting and global
    maritime operations. Air-Sea battle, the joint operational concept
    through which air and naval forces retain freedom of action through
    tight coordination of operations in and across multiple domains,
    highlights the particular importance of the space domain. The United
    States has enjoyed uncontested superiority in the space domain for
    several decades; however, cheaper access to space, proliferation of
    jamming technology and the emergence of counter-space weapons have
    begun to level the playing field against peer and near-peer forces.
        In an environment of emerging threats in space, the Navy will
    require continued robust investment and access to space to ensure
    mission success in a contested environment. Adversaries are becoming
    more proficient in their use of space capabilities and are developing
    both offensive and defensive space capabilities in an attempt to remove
    or reduce the asymmetric advantage the United States enjoys in the
    space domain. It is imperative the Navy continue to leverage space
    capabilities and work with the other Services to develop and refine the
    necessary tactics, techniques, procedures, and capabilities to retain
    Navy fleet information dominance in degraded or denied environments.
        The Navy Strategy for Achieving Information Dominance (2012-2016)
    defines Information Dominance as the operational advantage gained from
    fully integrating the Navy's information functions, capabilities, and
    resources to optimize decision-making and maximize warfighting effects.
    Navy leaders increasingly rely on critical satellite communications
    (SATCOM) paths; positioning, navigation, and timing (PNT) signals;
    environmental monitoring data; missile warning (MW); and intelligence,
    surveillance, and reconnaissance (ISR) reporting for the full range of
    operations from humanitarian missions to combat operations in one or
    more theaters. Access to, and mastery in, operations utilizing this
    combination of space capabilities enables decisiveness, sustainability,
    responsiveness, and agility--critical requirements for a forward
    deployed and globally engaged force.

                      MOBILE USER OBJECTIVE SYSTEM (MUOS)

        The increasing reliance on satellite communications and the
    uncertainty of the antiquated and aging legacy UHF capability are
    driving the Navy to improve narrowband capacity to support the joint
    warfighter. The Mobile User Objective System (MUOS) is the
    communications path that will best allow the Navy and DOD to meet the
    needs of the future while transitioning the user community from legacy
    UHF to a much improved wideband code division, multiple access (WCDMA)
    capability. This technology, which
        is similar to third generation cellular technology, will not only
    improve bandwidth capacity but will also provide individual users true
    global access.
        The MUOS program continues to make significant strides in achieving
    its program goals on time and within budget. In February 2012, the
    first satellite was launched and within 8 months was made operational,
    providing joint access that seamlessly transitioned without any
    degradation in service. The second MUOS satellite recently completed
    all pre-launch testing and is now undergoing final preparations for
    delivery to Cape Canaveral, FL in preparation for launch on July 19,
    2013. The remaining three satellites are all on budget and on schedule.
        In addition to the spacecraft, the MUOS program continues to meet
    objectives for the ground sites in Geraldton, Australia, Wahiawa, HI
    and Northwest, VA. These sites have recently completed final hardware
    installation and will complete final acceptance testing by the end of
    this summer. The last remaining site Niscemi, Sicily, in Italy, has had
    some setbacks in recent months as Italian protesters have delayed
    progress. The United States and the central Italian Governments are
    working together closely to maintain unfettered access to the site.
    Recently, the Italian government commissioned a radio frequency study
    to reassure the local population that all RF levels at the site are
    within normal operating levels. Two previous studies have been
    conducted by the U.S. Navy with acceptable results for both U.S. and
    Italian standards. The Navy's goal is to resume work at Niscemi by this
    summer to complete the site by the end of 2014 in preparation for the
    launch of MUOS 3.
        The final segment needed to achieve full MUOS capability is the
    fielding of the MUOS-capable terminals. The MUOS waveform software was
    completed in November 2012 and placed in the Joint Tactical Network
    Center (JTNC) Information Repository and made available to industry in
    December 2012. The first terminal that will be fielded and used to
    complete MUOS End-to-End (E2E) testing will be the AN/PRC-155 Manpack
    Radio, previously known as Joint Tactical Radio System Manpack
    terminal. The U.S. Army PEO C3T Tactical Radio Program is developing
    this terminal by adding the MUOS capability to this new radio.
    Additionally, the Navy is currently providing RDT&E funds to develop a
    MUOS-capable Digital Modular Radio (DMR) to support shipboard
    operations. Other manufacturers are developing radios for use with MUOS
    in the near future.
        Since the beginning of the MUOS program, development of the full
    MUOS capability has been managed through multiple program offices,
    including PMW-146 (Navy), Tactical Radio Program Office (Army), JTNC
    (Army) and the Defense Information Systems Agency. In May 2012, OSD
    (AT&L) assigned the Navy overall responsibility to deliver the MUOS E2E
    capability. In order to reduce risk associated with seams between each
    of the program offices, risk reduction testing has been added to the
    overall schedule. This testing will evaluate the interfaces between the
    space, ground, and terminal portions of the system. Testing began in
    March 2013 and will continue in phases through 2013 and 2014 as
    additional system components become available.

                      POSITIONING, NAVIGATION, AND TIMING

        The Navy continues to use the Air Force's NAVSTAR Global
    Positioning System (GPS) as its primary source of space-based, precise
    PNT data for all platforms, munitions, combat systems, and command,
    control, communications, computer, and intelligence systems. GPS
    provides a common PNT reference for all U.S. military users as well as
    select coalition partners. GPS delivers the necessary underpinning for
    enabling Information Dominance across the Fleet. In order to maintain
    access to the data provided by GPS, especially in contested and denied
    environments, the Navy is taking proactive measures to ensure its
    continued reception and use.
        Development of the Navy's recently awarded multi-year contract to
    Raytheon Integrated Defense Systems for a follow-on shipboard PNT
    fusion and distribution system, GPS-based PNT Service (GPNTS),
    continues to progress as scheduled. The GPNTS program is replacing
    legacy GPS shipboard user systems dating from the 1980s and 1990s and
    recently completed a successful Critical Design Review ahead of
    schedule. GPNTS incorporates the latest GPS security architecture and
    features redundant clocks as well as anti-jam antennas. It is being
    designed to incorporate the next generation of military GPS receivers
    capable of utilizing the new GPS M-code signal once it becomes
    available from the Air Force. GPNTS will also distribute common
    positioning data and synchronized precise time and frequency to all
    systems on a ship that require this information.
        Additionally, the Navy continues to procure and install anti-jam
    GPS antennas on its manned aircraft and has initiated the development
    of GPS anti-jam antennas for both the submarine force and its fleet of
    unmanned aircraft systems.
        Precise time and time interval is absolutely critical to the
    effective employment of a myriad of Department of Defense (DOD)
    systems, including weapons systems, command and control systems,
    communications systems, and information technology networks. The U.S.
    Naval Observatory (USNO) is responsible for maintaining precise time
    and time interval for all Department of Defense (DOD) users.
    Coordinated Universal Time (UTC) is the DOD standard and is the primary
    precise time reference for GPS and numerous other military
    applications. The Navy remains at the forefront of timekeeping
    technology. In fiscal year 2012, the USNO built and incorporated four
    new rubidium fountain atomic clocks to the Master Clock (MC) with full
    operating capability (FOC) scheduled for the end of fiscal year 2013.
    The installation of two rubidium fountain atomic clocks at the DOD
    Alternate Master Clock (AMC) facility is in progress with FOC scheduled
    for fiscal year 2015. These additions to USNO's timekeeping suite will
    improve the precision and accuracy of USNO UTC, which is required to
    support future Joint systems and operations. The Navy continues to
    closely coordinate with the Air Force to ensure the USNO Master Clock
    is fully supportive of the new GPS III architecture.
        Additionally, the Navy has other ongoing initiatives to ensure
    precise time and time interval is readily available to all DOD users.
    These initiatives primarily include improving the current
    infrastructure for distributing precise time to DOD users and the
    development of alternate methods for distribution. These efforts are
    being resourced and executed in concert with DOD Chief Information
    Officer (CIO) priorities and long-term strategy for Assured PNT.

                            ENVIRONMENTAL MONITORING

        Navy provides the DOD with global atmospheric modeling and global
    and regional ocean modeling. In October 2012, the Navy Operational
    Global Atmospheric Prediction System model was upgraded to the Navy
    Global Environmental Model, which immediately improved forecast
    accuracy. In order to produce these accurate forecasts, the Navy also
    relies on partnerships with the Air Force, civil, and international
    agencies to meet our space-based environmental sensing requirements.
    Meeting these requirements is critical to the planning for, and
    execution of, safe, effective military operations. To this end, the
    Navy is fully engaged supporting the Space-Based Environmental
    Monitoring AoA that is being conducted by the Air Force to define
    requirements for the follow-on to the Defense Meteorological Satellite
    Program in order to mitigate potential national and international data
    collection gaps.

      MISSILE WARNING AND INTELLIGENCE, SURVEILLANCE, AND RECONNAISSANCE
                                     (ISR)

        Space-based assets provide unique access to information critical to
    decision making, whether it is knowledge of an immediate military
    threat or insight into a hazard resulting from a natural disaster. The
    global maritime picture built by quilting together a variety of
    sources, including those that allow mapping ice boundaries in the polar
    regions and other oceanographic efforts, can result in greater maritime
    domain awareness and lead to more effective defenses from seaborne
    threats, as well as safer navigation for the world's merchant fleets.
        The Navy continues to engage the Intelligence Community (IC) as it
    plans future acquisitions and considers commercial capabilities to help
    meet our Nation's ISR needs. The Navy is striving to foster a better
    understanding across the IC of the unique ISR requirements in the
    maritime domain, improving the ease with which Navy requirements can be
    factored into acquisition decisions and the probability they can be
    met, or partially met, in a highly competitive, cost-constrained
    environment. The Navy requirements are very different from land
    targets; in the open ocean, and especially in littoral areas, ships are
    constantly moving, requiring larger area coverage and more frequent
    revisits to maintain reliable tracks. The Navy continues to work toward
    greater U.S. and international collaboration using civil and
    commercial, as well as national security space systems, to gain
    increased persistence and area coverage, reduce cost, and improve
    global maritime domain awareness.
        Navy continues to leverage its Tactical Exploitation of National
    Capabilities (TENCAP) effort as well as research labs to explore new
    methods for adapting existing systems to meet Navy requirements.
    Through TENCAP initiatives Navy has developed and fielded maritime-
    specific ISR capabilities at low cost, leveraging global Geospatial
    Intelligence and Signal Intelligence systems to enable a fused common
    operational picture. Efforts have resulted in improved onboard
    spacecraft sensor and ground processing, greater downlink bandwidth
    through advanced data compression, and enhanced geo-location
    techniques. Additionally, Navy, broader interagency and department
    collaboration, has fielded and transitioned capability that
    significantly enhances the indications and warning of adversary
    Unmanned Aircraft System activity, establishing a system baseline that
    can be adapted to meet evolving foreign unmanned system threats. Navy
    TENCAP, in partnership with the IC, DOD, and Services, is developing an
    integrated ISR and Cyber multi-source capability to fuse national
    intelligence system data with tactical unit collection within a single
    classified security domain. This initiative has the potential to unlock
    vast stores of operationally relevant data currently inaccessible to
    tactical users because of multiple security enclaves and related
    policies, proprietary industry designs, and organizational controls.
        Commercial systems have collection capabilities well suited to
    support maritime surveillance that can also be used to fill collection
    gaps. These efforts are paying dividends, but more investment in
    research and development is needed. As budgets decline, it will be new
    collection modes, processing technologies, and exploitation strategies,
    combined with ensuring that future systems accommodate unique Navy
    maritime requirements, which will produce the timely, precise, and
    relevant information so vital to 21st century naval warfare.

                                   CONCLUSION

        The Navy continues to be heavily reliant upon space for SATCOM,
    PNT, MW, EM, and ISR information in order to enable swift and decisive
    decisionmaking in increasingly contested and denied environments.
    Growing global uncertainty, as well as the current fiscal environment,
    will continue to require the Navy to become more efficient in the use
    of available assets in order to maintain the level of effectiveness
    that the Nation expects. This will require continued vigilance to
    ensure that threats to the space constellations are continuously
    evaluated and that mitigations are in place to ensure forward-deployed
    commanders have the tools necessary to ensure mission success.
        Mr. Chairman, thank you for the opportunity to share our efforts
    with you today. We look forward to answering any questions you and the
    subcommittee may have.
        Senator Udall. Thank you. Forgive me for an oversight. I
    should have properly introduced Secretary Loverro, who is the
    Deputy Assistant Secretary of Defense for Space Policy, and Dr.
    Zangardi, who is the Deputy Assistant Secretary of the Navy for
    Command, Control, Communications, Computers, Intelligence,
    Information Operations, and Space. That's quite a portfolio.
        I now want to recognize a good friend of mine, General
    William L. Shelton, USAF, who is the Commander of the Air Force
    Space Command, based in Colorado, my home State. General
    Shelton, the floor is yours.

      STATEMENT OF GEN. WILLIAM L. SHELTON, USAF, COMMANDER, AIR
                          FORCE SPACE COMMAND

        General Shelton. Mr. Chairman, Senator Sessions, Senator
    Fischer, it is an honor to appear before you today as the
    Commander of Air Force Space Command. It is also my privilege
    to appear with these colleagues in the national security space
    business.
        Since its inception a little over 30 years ago, Air Force
    Space Command has made significant progress in evolving and
    sustaining space capabilities to underpin operations across the
    spectrum of conflict.
        We have established three major goals to ensure these
    foundational capabilities are available to the warfighter and
    to the Nation: (1) to provide assured full-spectrum space
    capabilities; (2) to develop highly skilled and innovative
    space professionals; and (3) to provide resilient, integrated
    systems that preserve operational advantage for the Nation.
        Accomplishing this in an era of declining budgets, growing
    threats, and increasing requirements is no small challenge. We
    face a daunting new challenge, providing these foundational
    capabilities in an era of sequestration. In my command alone, I
    had to find $508 million in reductions for the remainder of
    fiscal year 2013. The chaos created by operation and
    maintenance account reductions this large in this short time
    period cannot be overstated. At the top of the list is the
    significant and justifiable angst of my civilian workforce
    facing the prospect of a 20 percent pay cut for the last 14
    weeks of this fiscal year.
        Despite our fiscal challenges, we will work together with
    our mission partners and with industry to find innovative
    approaches to providing vital space capability to the Nation.
        I thank the committee for your steadfast support of Air
    Force Space Command and its people, and thank you, Mr.
    Chairman.
        [The prepared statement of General Shelton follows:]

              Prepared Statement by Gen. William L. Shelton, USAF

                                  INTRODUCTION

        Mr. Chairman and Senator Sessions, it is an honor to appear before
    you and your committee today as the Commander of Air Force Space
    Command.
        I have the distinct privilege of leading over 40,000 people who
    deliver our Nation's space and cyberspace capabilities around the
    world, 24 hours a day, 7 days a week. From the 14th and 24th Air
    Forces, to the Space and Missile Systems Center, to the entire breadth
    of this Command, we embody the fighting spirit, flexibility and
    ingenuity of the U.S. Air Force. Outstanding Airmen are the core of our
    team and I will take a moment to highlight a few individuals.
        Major Kenneth Holmes spent 140 days deployed to Bagram Air Base,
    Afghanistan. During that deployment, his leadership and expertise
    enabled a Joint Task Force to significantly disrupt thousands of hours
    of enemy communications, ultimately aiding in the capture or
    elimination of over 1,470 enemies, including 166 high-value
    individuals. In January 2013, Major Holmes was presented the Forrest S.
    McCartney National Defense Space Award in recognition of his ability to
    integrate space capabilities into the fight.
        Captain Kathleen Sullivan, a flight test engineer at Buckley Air
    Force Base, Colorado, led the integration of the Space-Based Infrared
    System into live-fire Missile Defense tests. She incorporated next-
    generation missile warning data into the missile defense kill-chain
    during multiple test campaigns, testing capabilities that will better
    protect the United States and our allies. Captain Sullivan was also my
    command's nominee for the Air Force Lance P. Sijan Award, in
    recognition of her outstanding leadership.
        Senior Airman Nicholas Hurt, a member of the 721st Security Forces
    Squadron, Cheyenne Mountain Air Force Station, CO, was responsible for
    helping secure Bagram Air Base, Afghanistan. During his deployment, he
    routinely led 13-person squads on outside-the-wire reconnaissance
    patrols, located and secured unidentified explosive ordnance and
    responded to indirect fire incidents. He was one of my Command's
    Outstanding Airmen of the Year and is now one of the Air Force's 12
    Outstanding Airmen of the Year for 2012.
        Major Holmes, Captain Sullivan, Senior Airman Hurt, and other
    members of the command bring foundational space and cyberspace
    capabilities to the Nation. It is imperative that the U.S. Armed
    Services operate effectively in space and cyberspace, as noted in the
    Secretary of Defense's January 2012 Sustaining U.S. Global Leadership:
    Priorities for 21st Century Defense strategic guidance. Additionally,
    the President's 2010 National Security Strategy states, the ``space and
    cyberspace capabilities that power our daily lives and military
    operations are vulnerable to disruption and attack.'' We are mindful
    there are ever-changing threats to our systems and to our ability to
    operate effectively in space and cyberspace. Whether the threats
    originate from an adversary or are environmental or fiscal in nature,
    Air Force Space Command forces still have the day-to-day responsibility
    to conduct global operations in and through space and cyberspace, from
    peace through crisis and war, fulfilling tactical and strategic
    objectives on local and global scales.
        Since its inception just over 30 years ago, the Command has made
    tremendous progress in evolving and sustaining space and cyberspace
    capabilities. In an era of declining budgets, growing threats and
    increasing requirements, the Command continues providing cost-
    effective, foundational space and cyberspace capabilities. I have three
    goals to ensure those foundational capabilities are available to the
    warfighter and the Nation: to provide assured full spectrum space and
    cyber capabilities, to develop highly-skilled and innovative space and
    cyberspace professionals and to provide resilient, integrated systems
    that preserve operational advantage. This statement is organized around
    these goals and the Command's national security space activities to
    fulfill them.

                PROVIDE ASSURED FULL SPECTRUM SPACE CAPABILITIES

        Space capabilities are critical to the Joint Force Commander's
    ability to deter aggression, win America's wars and conduct other
    missions such as humanitarian and disaster relief operations. In
    addition, the U.S. and global economies rely on space systems to enable
    vital activities such as navigation, commerce and agriculture. As the
    Air Force's space superiority lead, I am responsible for organizing,
    training and equipping our space capabilities. In the current fiscal
    climate, we are managing increased risks across the enterprise while
    modernizing, sustaining and acquiring space capabilities, consistent
    with national, Department of Defense, Joint and Air Force priorities.
    We have made significant strides in providing gamechanging effects to
    the warfighter and I would submit that, under the strong leadership of
    Lieutenant General Ellen Pawlikowski, Commander of our Space and
    Missile Systems Center, we have turned the corner on space acquisition,
    delivering cost-effective capabilities. Within this context, I would
    like to highlight some of our space capabilities that are critical to
    our Nation's security.

    Nuclear, Survivable; Protected Tactical and Unprotected Communications
        The 2011 National Military Strategy notes that the interlinked
    domains of air, space, and cyberspace are essential to the Joint
    forces' ability to deter and defeat aggression. Our communication
    satellites link the domains by providing nuclear-survivable
    communications for the President and national leaders as well as
    protected, tactical and unprotected communications to the warfighter.
        The Advanced Extremely High Frequency Satellite Program and its
    secure communications capability is one of those protected, vital
    links. We launched the second satellite in 2012 and the third satellite
    is on track for a late 2013 launch. We also continue to execute our
    near-term Space Modernization Initiative investment strategy,
    establishing a competitive industrial base and demonstrating
    fundamental elements for a resilient, next-generation, protected
    military satellite communications capability.
        The Family of Beyond-Line-of-Sight Terminals will provide nuclear
    survivable communications to airborne and ground command posts, manned
    bombers and manned intelligence, surveillance and reconnaissance
    aircraft using the Milstar and Advanced Extremely High Frequency
    constellations. In 2012, to reduce cost risk to the Government, the
    current terminal development contract was converted from cost plus to
    fixed price, and competition was injected into the program with the
    award of an alternate source development contract. More recently, the
    program office released a Production Request for Proposal for the
    limited competition of both an Airborne Wideband Terminal and a Command
    Post Terminal with a planned contract award the first quarter of fiscal
    year 2014 and delivery of an initial Command Post Terminal with
    Presidential, National and Voice Conferencing capability in fiscal year
    2015.
        The Wideband Global Satellite (WGS) system provides high-capacity
    communications to the Department of Defense, the White House
    Communications Agency, the Department of State and an increasing number
    of international partners. We launched and tested the fourth satellite
    in 2012 and it is providing critical wideband communications to U.S.
    and coalition forces in U.S. Central Command and U.S. Pacific Command.
    The fifth and sixth satellites are on track for launch during fiscal
    year 2013 and are expected to be operational in mid fiscal year 2013
    and early fiscal year 2014 respectively. Once WGS-5 becomes
    operational, the constellation will be postured to provide worldwide
    coverage.
        To support our long-term investment strategy, we are conducting
    studies to determine the optimal mix of Department of Defense and
    commercial solutions to meet the growing wideband demand in the most
    affordable and resilient manner.

    Launch Detection and Missile Tracking
        Strategic missile warning is critical to the Nation's survival.
    Ballistic missiles pose a significant threat to the United States, our
    deployed forces, allies and coalition partners. The command supports
    the strategic and tactical missile warning missions by providing both
    space- and ground-based sensors.
        The Space Based Infrared System (SBIRS) program, along with the
    legacy Defense Support Program satellites, provide advanced early
    warning of missile threats, allowing our Joint warfighters to take
    swift and appropriate actions. In September 2012, the first
    geosynchronous orbit SBIRS (GEO-1) began required operational testing.
    While the mission data is exceeding expectations, we uncovered an
    unexpected problem which will be resolved shortly with a software
    update. The fact that the fix is software only gave us the necessary
    confidence to launch GEO-2 on March 19, 2013.
        Ground-based radars deliver missile warning and missile defense
    capabilities to counter current and emerging missile threats. We are
    executing several initiatives to modernize these radars. In addition,
    we are working several Upgraded Early Warning Radar initiatives with
    the Missile Defense Agency to improve the radars' ability to provide
    fire control data for missile defense assets. These initiatives will
    significantly improve our early warning capabilities by updating the
    original 1950's technology and standardizing our operations and
    sustainment baselines.

    Positioning, Navigation, and Timing
        This has been another successful year for Air Force Positioning,
    Navigation and Timing capabilities--ensuring the continued health and
    resilience of the constellation: legacy Global Position System (GPS)
    IIAs, current generation GPS IIFs and next generation GPS IIIs. Captain
    Jacob Hempen, a project engineer at our Space and Missile Systems
    Center, modified satellite battery charging procedures, significantly
    increasing GPS IIA constellation total battery life by 20 years. Under
    the leadership of Major Jason Smesny, also from the Space and Missile
    Systems Center, a combined Air Force and contractor team completed
    operational checkout of the third GPS IIF 4 days ahead of schedule. It
    became part of the operational constellation on November 13, 2012.
    Between March 2012 and March 2013, we completed production of five GPS
    IIF satellites, and we will complete production of the final GPS IIF
    satellite this year, for a total production run of 12 GPS IIF
    satellites. We plan to launch the fourth GPS IIF in May 2013 and the
    fifth, sixth, and seventh satellites during fiscal year 2014.
        On GPS III, we heeded the lessons learned of the last 2 decades in
    terms of management, process rigor, technical discipline and
    programming to create both a realistic schedule and cost for delivery.
    As a result, the program team continues to reduce defects, test time
    and build time while driving down recurring cost. This approach
    includes the integration of a non-flight satellite testbed space
    vehicle used for production risk reduction this fiscal year. The team
    also delivered the propulsion subsystem for the first flight vehicle
    and completed its first exercise demonstrating space vehicle to ground
    segment integration. Looking forward to the production phase, we are
    also converting the unexercised cost plus space vehicle contract
    options to fixed price incentive contract options. As a result, GPS III
    continues to move forward and we fully expect that it will stay within
    the cost bounds we established in 2008. We are steadfast in the pursuit
    of affordability and effectiveness initiatives, including examination
    of alternative architectures as well as exploring dual-launch
    opportunities to lower costs of launching our next-generation
    satellites.
        The GPS Next Generation Operational Control System, the modernized
    command and control system, will provide control of GPS IIA, IIF and
    III, satellites and signals, to include the new Military Code (M-code).
    The combination of GPS III capabilities, such as M-code, along with
    modernized user equipment and the new command and control system, will
    provide Joint warfighters vital capability in challenging environments,
    such as GPS jamming, as well as robust information assurance. It will
    ensure the use of the modernized signals by the United States and its
    allies for military purposes.

    Space Situational Awareness
        Space situational awareness underpins the entire spectrum of space
    activities, and our focus is on providing forces and capabilities to
    U.S. Strategic Command (STRATCOM) to detect, track, identify, and
    characterize human-made objects which orbit the Earth. Our efforts
    contribute to the collaborative, multi-agency endeavor required to
    ensure comprehensive space situational awareness for the Nation.
        Air Force Space Command presents space forces and capabilities to
    STRATCOM through the 14th Air Force, under the command of Lieutenant
    General Susan Helms. She is dual-hatted as Commander, Joint Functional
    Component Command for Space (JFCC SPACE), and therefore is responsible
    for executing STRATCOM's space operations. JFCC SPACE's Joint Space
    Operations Center (JSpOC) is the avenue through which JFCC SPACE
    commands and controls space forces and it is the epicenter of the space
    situational awareness mission. The JSpOC is also the means by which
    JFCC SPACE coordinates space situational awareness with other agencies.
        To support national security space operations in an increasingly
    challenged environment, the JSpOC collects and processes data from a
    worldwide network of radar and optical sensors, as well as a dedicated
    space surveillance satellite. Each day the JSpOC creates and
    disseminates over 200,000 sensor taskings, which result in nearly
    500,000 observations for processing. JSpOC operators use this data to
    maintain a very accurate catalog for more than 23,000 objects and to
    perform over 1,000 satellite collision avoidance screenings daily.
    These operations form the basis of the United States' space situational
    awareness capability, which is then shared with other operators in the
    national security, civil and commercial sector of space operations.
        The Space Defense Operations Center (SPADOC) is the system of
    record for cataloging space objects and debris. While essential to safe
    passage and navigation in space, this system was designed in the 1980s,
    fielded in the early 1990s, and is at its capacity limits and past its
    originally projected end-of-life. It is vital to our national security
    space capabilities that we transition from our current surveillance and
    catalog maintenance-focused methodology, which limited us to performing
    forensic analysis during and after a space event (e.g., a collision,
    break-up or anti-satellite test), to a more holistic space situational
    awareness capability. We are building the capacity to predict events in
    space to enable actionable, situational awareness to our space
    operators, Joint warfighters, allies and other mission partners. This
    transition requires fielding the next generation system, the JSpOC
    Mission System (JMS). With its open, service-oriented architecture, JMS
    will supply the automation necessary to make better use of the
    tremendous volume of available sensor data. It will allow improved
    integration of intelligence data and innovative changes to how we use
    our systems, thereby providing a more complete, real-time and
    predictive picture of activity in the space domain.
        JMS does not just replace SPADOC, it establishes a baseline for
    integrating new command and control capabilities in support of the
    Commander, JFCC SPACE, and Combatant Commanders alike. We achieved a
    major milestone by completing the operational utility evaluation for
    the first increment and operational testing was completed on December
    13, 2012. It is projected to achieve Initial Operational Capability
    this Spring.
        On November 14, 2012, the U.S. Secretary of Defense and the
    Australian Minister of Defence signed a Memorandum of Understanding to
    relocate an Air Force C-band radar on Antigua to Australia. This action
    represents the next phase in implementing the 2010 U.S. and Australia
    Space Situational Awareness Partnership.
        When the Space Fence program replaces the existing Air Force Space
    Surveillance System, it will represent an order of magnitude increase
    in the Nation's Space Situational Awareness capability in Low and
    Medium Earth Orbits. The program has an approved acquisition strategy
    that reduces cost, adds much-needed capability, and meets the
    prescribed initial operational capability timeline. We have selected
    the Kwajalein Atoll in the Marshall Islands as the first site for the
    new Space Fence, improving our ability to track objects in all low-
    earth orbits, and particularly providing unique coverage of low
    inclination orbits.
        The Space Based Space Surveillance satellite, launched in 2010,
    provides timely, continuous optical surveillance of deep space objects.
    I declared initial operational capability August 15, 2012, and the
    Commander of STRATCOM accepted the satellite for operational use on
    September 10, 2012. We continue to study options for a follow-on
    program to this vital capability.

    Defensive Space Control
        The Rapid Attack, Identification, Detection and Reporting System
    Block 10 program delivers global communication satellite signal
    interference detection and geo-location capabilities. The current
    operational prototype provides geo-location on over 500 electromagnetic
    interference events per month in support of U.S. Pacific Command and
    U.S. Central Command. Adversaries are getting more sophisticated and we
    are responding. By 2014, we plan to have global capability to identify
    and characterize electromagnetic interference and geo-locate
    electromagnetic interference sources.

    Terrestrial Environmental Monitoring
        We will extend a half century of Defense Meteorological Satellite
    Program (DMSP) unique weather monitoring capabilities by launching the
    final two satellites in the program. DMSP-19 is scheduled to launch in
    March 2014, and we expect to operate the satellite into 2020. We
    continue to store and maintain DMSP-20 for a launch on demand. The
    Joint Requirements Oversight Council has identified potential gaps in
    meteorological coverage when DMSP reaches its end-of-life in the 2025
    timeframe. An Analysis of Alternatives is being conducted to study
    follow-on options, such as international partnerships, hosted payloads
    and a new satellite, to continue meteorological support to warfighters
    in the most cost-effective manner.

    Assured Space Access/Spacelift
        The 45th Space Wing at Patrick Air Force Base, Florida, and the
    30th Space Wing at Vandenberg Air Force Base, CA, supported a combined
    14 commercial and Government launches in 2012 extending the record-
    breaking streak to 57 successful Evolved Expendable Launch Vehicle
    launches since 2002. The Under Secretary of Defense for Acquisition,
    Technology, and Logistics authorized the Air Force to negotiate with
    the current launch provider, United Launch Alliance, to procure a block
    buy of launch vehicles while providing an opportunity for new entrant
    contract awards as early as fiscal year 2015. Lieutenant Colonel Tobin
    Cavallari, from the Space and Missile Systems Center, is implementing
    this acquisition strategy to provide competition and to save over $1
    billion.
        In the area of new entrants, we have made significant progress
    toward increasing competition for national security space launches.
    Jointly with National Aeronautics and Space Administration and the
    National Reconnaissance Office, we formalized new entrant certification
    criteria. The Air Force subsequently developed a guide providing a
    process for certifying a new entrant to launch National Security
    missions. Additionally, two launch service task orders were awarded to
    a new entrant under the Orbital/Suborbital Program-3 to provide launch
    services for the Deep Space Climate Observatory mission and the Space
    Test Program-2 mission.

    Satellite Operations
        The Air Force Satellite Control Network, the Command's satellite
    command and control capability, enables critical missile warning,
    surveillance, weather and communications for our Joint warfighters. In
    2012, Joint and allied space professionals used the network to conduct
    an average of 427 satellite contacts per day with a 99.37 percent
    contact success rate. They supported 13 National Security Space
    launches and 19 space vehicle emergencies. On September 21, 2012 they
    accomplished a record 527 satellite contacts in a single day. Over the
    last 2 years the network successfully conducted over 316,000 supports--
    this was the busiest 2 years in its 50-year operational history.
        In addition to this busy operations tempo, we upgraded the legacy
    electronics for the remote tracking station at Guam, modernizing our
    satellite control capability in the Pacific. Similar upgrades are in
    progress at the Hawaii remote tracking station, and upgrades will begin
    in 2013 at the New Hampshire remote tracking station. In the future, we
    will transition to a modern, secure internet protocol-based
    architecture, and we are examining the potential of commercial
    augmentation of our network.

    U.S. Nuclear Detonation Detection System
        In a Joint effort with the Department of Energy and Department of
    State, many Air Force satellites have hosted sensors supporting
    detection, location and reporting of nuclear detonations in support of
    warfighter needs and treaty verification requirements. We will continue
    to support our partners, and I am confident we can jointly determine
    how to maximize our limited resources while still satisfying the
    requirements for these sensors.

       FIELD RESILIENT, INTEGRATED SYSTEMS THAT PRESERVE THE OPERATIONAL
                                   ADVANTAGE

    Resilient Architectures
        Our satellites provide a strategic advantage for the United States,
    and as such, we must consider the vulnerabilities and resilience of our
    constellations. My staff at Headquarters Air Force Space Command,
    alongside the team at the Space and Missile Systems Center, is leading
    efforts at balancing resilience with affordability. They are examining
    disaggregated concepts and evaluating options associated with
    separating tactical and strategic capability in the missile warning and
    protected communications mission areas. We are also evaluating
    constructs to utilize hosted payload and commercial services, as well
    as methods to on-ramp essential technology improvements to our existing
    architectures. For example, we are learning lessons on how to make
    hosted payloads a realistic option through the Commercially Hosted
    InfraRed Payload Program, which is a pathfinder asset on orbit today.
    Beyond the necessity of finding efficiencies and cost savings, we may
    very well find that disaggregated or dispersed constellations of
    satellites will yield greater survivability, robustness and resilience
    in light of environmental and adversarial threats.

    Electromagnetic Spectrum
        Peacetime and warfighting operations are enabled via employment of
    a wide variety of advanced wireless systems, including satellites,
    aircraft, remotely piloted vehicles, land mobile radios, radars, data
    links and precision guided munitions. The Air Force Spectrum Management
    Office, led by Colonel Donald Reese, is tasked with preserving
    electromagnetic spectrum access for Air Force and selected Department
    of Defense activities and systems. Their efforts have been crucial to
    our ability to provide support using a variety of airborne and space-
    borne platforms to users across the globe.
        The global and economic demand for this finite resource is
    continually increasing. In this environment, we strive to assure access
    for spectrum-dependent military systems and to maintain over 30,000
    frequency assignments essential to Service and Joint operations,
    testing and training. We also support efforts to implement Presidential
    direction to identify available spectrum for broadband wireless
    services while protecting vital Air Force capabilities. We are working
    closely with other Federal agencies to implement actions to protect and
    advance U.S. and Air Force spectrum interests.

          PROVIDE HIGHLY-SKILLED AND INNOVATIVE SPACE AND CYBERSPACE
                                 PROFESSIONALS

        Air Force space and cyberspace professionals are the backbone of
    our success. They provide expertise and innovation for current and
    expanding missions. To ensure deliberate development of this expertise,
    the Command manages the Air Force Space and Cyberspace Professional
    Development Programs for all Air Force specialties. These programs
    ensure we are providing a well-educated space and cyberspace cadre to
    units worldwide.
        A highlight of my year was presiding over the opening of the
    Moorman Space Education and Training Center at Peterson Air Force Base,
    CO. On September, 13, 2012, the Center was dedicated in honor of
    General (Retired) Thomas S. Moorman, Jr., a champion of space
    professional development. The opening of this center enhances the
    training provided to the more than 2,500 space professional students
    from across the Services and allied nations each year. These students
    receive specialized space system training and professional continuing
    education at the Advanced Space Operations School and the National
    Security Space Institute.
        Given the technical nature of the space and cyberspace domains, it
    is essential we have Science, Technology, Engineering, and Math (STEM)-
    educated people in our units. We are strengthening our education
    requirements in space and cyberspace, but we realize we compete with
    decreasing numbers of STEM graduates, a national security problem in
    its broadest sense. Therefore, we are actively promoting the benefits
    of STEM degrees, starting with elementary school and continuing through
    the entire educational process. As an example, our cyberspace
    professionals in 24th Air Force, under the leadership of their
    commander, Maj. Gen. Suzanne Vautrinot, mentor local teams competing in
    CyberPatriot, a national high school cyber defense competition created
    by the Air Force Association. In Colorado, Peterson Air Force Base and
    Buckley Air Force Base have both applied for acceptance into the
    STARBASE program, a Department of Defense program exposing youth to
    technological environments and appropriate role models. We believe our
    investment today in young people is a cornerstone for our success in
    the future.

                                   CONCLUSION

        The men and women of Air Force Space Command accomplish our mission
    through a combination of innovation, passion and courage. They are the
    core of America's space and cyberspace team operating in domains that
    span the globe. Our single focus endures: providing the best capability
    possible to ensure success on the battlefield. The joint warfighter
    demands it, and the Nation expects nothing less, and therefore, Air
    Force Space Command remains steadfast in delivering game-changing space
    and cyberspace forces.
        However, we face a new, daunting challenge: providing these
    foundational capabilities in an environment of sequestration. The very
    rigid mechanics of the Budget Control Act of 2011 force us into
    corners, rather than giving us needed flexibility to accommodate
    current and future budget reductions. In my Command alone, I had to
    find $508 million in fiscal year 2013 reductions beginning March 1,
    2013. The chaos created in my Command by operations and maintenance
    reductions this large, in this short time period, can't be overstated.
    It starts with the justifiable angst of my civilian workforce, facing
    the prospect of a significant pay cut starting in June for the
    remainder of the fiscal year. AFSPC Headquarters support contracts have
    been reduced by 50 percent, which means lost jobs and reduced staff
    technical expertise. Operationally, two missile warning radars will not
    operate at full capacity for the rest of the year, one of which is key
    to our missile defenses. A unique space surveillance system's coverage
    will be reduced by one-third, compounding the loss of space
    surveillance data normally collected by the aforementioned radars we've
    been forced to scale back. These are not operational decisions arrived
    at lightly; the so-called ``easy'' reductions were taken in previous
    years. We've minimized overall operational impacts as much as possible,
    but the rigidity in the law dictates we must cut every appropriated
    line item in our budget, severely restricting our trade space. I
    strongly ask for your support for the reprogramming actions that will
    be needed to enable smarter decisions.
        I am truly privileged to lead this great Command and I appreciate
    the opportunity to represent Air Force Space Command before this
    committee.

        Senator Udall. Thank you, General Shelton.
        We will next hear from Lieutenant General Richard P.
    Formica, Commander of U.S. Army Space and Missile Defense
    Command, USA, and Army Forces Strategic Command General, thank
    you for being here today.
        Senator Sessions. Mr. Chairman, could I just add my welcome
    to General Formica? He does a great job in Huntsville at the
    Space and Missile Defense Command, and we are proud of his
    work. We look forward to hearing from you, General Formica.

               STATEMENT OF LTG RICHARD P. FORMICA, USA,
      COMMANDER, U.S. ARMY SPACE AND MISSILE DEFENSE COMMAND/ARMY
                        FORCES STRATEGIC COMMAND

        General Formica. Thank you, Senator.
        Chairman Udall, Ranking Member Sessions, Senator Fischer,
    it is an honor and a privilege for me to appear here as the
    Commander of Space and Missile Defense Command and as a soldier
    in the U.S. Army. I want to thank you for your ongoing support
    of our soldiers, civilians, and families.
        Today, I will reinforce the Army's enduring need of space
    capabilities, recognizing that they come during the present
    environment of declining resources. Space capabilities are and
    will remain critical to the Army as it conducts unified land
    operations, and they have been appropriately prioritized by
    headquarters Department of the Army. Nonetheless, fiscal
    uncertainties resulting from sequestration will impact our
    ability to provide space-based capabilities to the warfighter.
    It has also impacted our professional civilian workforce.
        Space is essential to the Army. It is the ultimate high
    ground. Within DOD, the Army is the biggest user of space
    capabilities and is also a provider of space-based
    capabilities.
        Our command at U.S. Army Space and Missile Defense Command
    contributes space capabilities to the joint force through three
    core tasks: (1) to provide trained and ready space and missile
    defense forces and capabilities today; (2) to build future
    space and missile defense forces and capabilities for tomorrow;
    and (3) to provide space missile defense and other related
    technologies like the nanosat technology that you referred to
    in your opening statement, Mr. Chairman, for the day after
    tomorrow.
        Your committee's continued support of our Army and its
    space program is essential in maintaining and improving our
    space capabilities and the development of our cadre of space
    professionals.
        I look forward to addressing any of your questions. Army
    Strong!
        [The prepared statement of General Formica follows:]

               Preapred Statement by LTG Richard P. Formica, USA

                                  INTRODUCTION

        Mr. Chairman, Ranking Member Sessions, and distinguished members of
    the subcommittee, thank you for your continued support of our soldiers,
    civilians, and families. This marks my third appearance before this
    subcommittee; I appreciate the opportunity to testify again. Thank you
    for being strong advocates of the Army and the key capabilities that
    space affords our warfighters. Your past and future support is
    important as we pursue joint efforts to provide critical space
    capabilities for our Nation, our fighting forces, and our allies.
        My role has not changed since my previous subcommittee appearances.
    I still have three distinct responsibilities in support of our
    warfighters. First, as the Commander of the U.S. Army Space and Missile
    Defense Command, I have Title 10 responsibilities to organize, man,
    train, and equip space and missile defense forces for the Army. Second,
    I am the Army Service Component Commander (ASCC) to the U.S. Strategic
    Command (STRATCOM), or Commander, Army Forces Strategic Command. I am
    responsible for planning, integrating, and coordinating Army space and
    missile defense forces and capabilities in support of STRATCOM
    missions. Third, I serve as the Commander of STRATCOM's Joint
    Functional Component Command for Integrated Missile Defense (JFCC IMD),
    enabling me to leverage the capabilities and skill sets of the U.S.
    Army Space and Missile Defense Command/Army Forces Strategic Command
    (USASMDC/ARSTRAT) in a broader, joint environment.
        In my role here today as the Commander of USASMDC/ARSTRAT, I am
    again honored to testify with this distinguished panel of witnesses--
    all providers of critical space capabilities to the warfighter and
    essential contributors to the Nation's continued advances to
    effectively leverage the capabilities derived from space and space-
    based assets.
        Within the Army, space operations and space-related activities are
    pursued as an enterprise. While not the exclusive domain of USASMDC/
    ARSTRAT, the Army has assigned USASMDC/ARSTRAT as the Army's proponent
    for space. In this role, we coordinate with the other members of the
    Army space enterprise, to include the Army intelligence, signal, and
    geospatial communities. We are increasingly engaged across the broader
    Army community to ensure space capabilities are maximized and
    integrated across our entire force and that potential vulnerabilities
    to our systems are mitigated to the greatest extent possible. We also
    collaborate with STRATCOM and its Joint Functional Component Command
    for Space (JFCC Space) and other members of the joint community to
    provide trained and ready space forces, space-based, and space enabled
    ground-based capabilities to the warfighter. Additionally, we work
    closely with acquisition developers in the other Services to ensure the
    enhancement of systems that provide the best capabilities for ground
    forces.
        Within the space arena, USASMDC/ARSTRAT continues to strive to
    provide space capabilities through our three core tasks:

             To provide trained and ready space forces and
            capabilities to the warfighter and the Nation--our operations
            function that addresses today's requirements.
             To build future space forces--our capability
            development function that is responsible for meeting tomorrow's
            requirements.
             To research, test, and integrate space and space-
            related technologies--our materiel development function that
            aims to advance the Army's and warfighter's use of space the
            day-after-tomorrow.

              Providing Army Space Capabilities--Today, Tomorrow, and the
            Day-After-Tomorrow

        During my 2011 appearance before this subcommittee, my desire was
    threefold: to outline the Army as a user of space capabilities; to
    articulate the Army's space strategy and policy; and to inform the
    committee about the Army as a provider of space capabilities. Last
    year, I sought to further address the absolute necessity of space-based
    capabilities for our warfighters and to expand upon the above three
    core space tasks that our soldiers, civilians, and contractors
    diligently execute each and every day. This year, I would like to
    impress upon the subcommittee the need to ensure our space capabilities
    are maintained, if not further enhanced, despite the present
    environment of declining resources and increasing threats. We are
    facing the impacts of the current fiscal situation on our budget. The
    Army has our highest priority requirements. We will continue to monitor
    the impact on readiness as a result of sequestration.

                       THE WORKFORCE--OUR GREATEST ASSET

        At USASMDC/ARSTRAT, as is the case within all the Army, our people
    are our most enduring strength. The soldiers, civilians, and
    contractors at USASMDC/ARSTRAT support the Army and joint warfighter
    each and every day, both those stationed on the homeland and those
    deployed overseas. Within our command, we strive to maintain a
    professional cadre of space professionals to support our Army.
        The ongoing fiscal uncertainties and the impacts of sequestration
    to the USASMDC/ARSTRAT Civilian workforce continue to cause concern for
    me and angst in the workforce. I have three concerns. First, I am
    concerned about the impact of a potential furlough, which has caused
    angst, impacted morale, and is expected to place personal hardships on
    much of the workforce. Second, the civilian hiring freeze is creating
    vacancies in the workforce. This impacts our ability to build our bench
    and will have longer-term impacts on the ability to provide space
    capabilities to the warfighter. Third, the elimination of our temporary
    and term employees, some of which are our future engineers, is
    impacting the next generation of Civilian professionals. We will work
    to mitigate these issues and reduce their impact on our ability to
    provide capabilities to the warfighter.

                      RELIANCE ON SPACE-BASED CAPABILITIES

        As I reported during previous appearances, our Army must be
    organized, trained, and equipped to provide responsive and sustained
    combat operations in order to fight as a joint team and to respond, as
    directed, to crises at home and abroad. The Army is dependent on space
    capabilities to execute unified land operations in support of the
    combatant commanders' objectives. Army space forces contribute to the
    joint and Army's ability to be adaptive, versatile, and agile to meet
    tomorrow's security challenges. Simply put, space capabilities are
    critical elements of the Army's ability to see, shoot, move, and
    communicate.
        The Army is the largest user of space-enabled capabilities within
    the DOD. Our ability to achieve operational adaptability and land
    dominance depends on the benefits derived from key assets in space.
    Integrating space capabilities enables commanders, down to the lowest
    echelon, to conduct unified land operations through decisive action and
    operational adaptability.
        The Army's Operating Concept identifies six warfighting functions
    that contribute to operational adaptability: mission command, movement
    and maneuver, intelligence, protection, fires, and sustainment. Space-
    based capabilities leveraged and employed across the national space
    enterprise enable each of these warfighting functions. Virtually every
    Army operation relies on space capabilities to enhance the
    effectiveness of our force.

              Army Space Capabilities are Combat Multipliers that Enable
            All Six Warfighting Functions

        When combined with other capabilities, space systems allow Joint
    Forces to see the battlefield with clarity, navigate with accuracy,
    strike with precision, communicate with certainty, and operate with
    assurance. Dependence on space as a force multiplier will continue to
    grow for the Army of 2020 and beyond, especially in an era of tight
    fiscal resources, a smaller force structure, and a potentially reduced
    forward presence. The bottom line is that we, as an Army, depend on
    space capabilities in everything we do. Retaining our global space
    superiority is a military imperative--there is no going back.

                 SPACE IN SUPPORT OF ARMY WARFIGHTING FUNCTIONS

        While the Army is the largest DOD user of space, we are also a
    provider of space-based capabilities. There are five space force
    enhancement mission areas: satellite communications (SATCOM); position,
    navigation, and timing (PNT); intelligence, surveillance, and
    reconnaissance (ISR); missile warning (MW); and environmental
    monitoring. Commanders and soldiers leverage these space force
    enhancement capabilities to conduct warfighting functions. They are
    critical enablers to our ability to plan, communicate, navigate, and
    maintain battlefield situational awareness; target the enemy; provide
    missile warning; and protect and sustain our forces. Army and joint
    forces require assured access to space capabilities and, when required,
    have the ability to deny our adversaries the same space-based
    capabilities.
        Joint interdependence is achieved through the deliberate reliance
    on the capabilities of one or more Service elements to maximize
    effectiveness while minimizing vulnerabilities. As the DOD Executive
    Agent for Space, the Secretary of the Air Force is responsible for
    leading the development, production, support, and execution of military
    space operations. STRATCOM is the combatant command headquarters
    responsible for planning and advocating for space capabilities for the
    warfighter. The Army continues to utilize national, joint, and
    commercial systems for additional capabilities while pursuing cross-
    domain solutions that support Unified Land Operations. The Army must
    continue to influence joint requirements and new solutions that provide
    compatible space capabilities seamlessly integrated in support of our
    warfighting functions. Finally, we must actively engage in focused
    experimentation, smart developmental test and evaluation, and timely
    military utility demonstrations to take advantage of dynamic
    technological advances in space.

              ``Modern Armed Forces Cannot Conduct High-Tempo, Effective
            Operations Without . . . Assured Access to Cyberspace and
            Space.''--Defense Strategic Guidance, January 2012

        In 2014, in this era of tight fiscal constraints, the Army plans to
    sustain the investment made in systems and people in pursuing space and
    space-related activities. As outlined in the Army's Space Strategy, our
    plans are to continue to evolve from a position of simply exploiting
    strategic space-based capabilities to one where the Army is fully
    engaged in the planning, development, and use of theater-focused
    operational and tactical space applications.

        TODAY'S OPERATIONS--PROVIDE TRAINED AND READY SPACE FORCES AND
                                  CAPABILITIES

        Each day, USASMDC/ARSTRAT provides trained and ready space forces
    and capabilities to combatant commanders and the warfighter. Within our
    1st Space Brigade, approximately 1,000 soldiers and civilians, forward-
    deployed, forward-stationed, or serving at home, provide space
    capabilities via access to space-based products and services that are
    essential in all phases of combat operations. The Brigade, a multi-
    component organization comprised of Active, National Guard, and U.S.
    Army Reserve soldiers, provides flexible, reliable, and tailored
    support to combatant commanders and warfighters by conducting
    continuous global space support, space control, and space force
    enhancement operations. The Brigade's three battalions provide
    satellite communications, space operations, theater missile warning,
    and forward-deployed space support teams.
        Within the Army, space professional personnel management is the
    responsibility of USASMDC/ARSTRAT. We serve as the Army's proponent and
    developer of training for space professionals and provide training
    assistance for Space Enabler indentified positions. Our Army Space
    Personnel Development Office (ASPDO) develops policies, procedures, and
    metrics for the Army Space Cadre and executes the life-cycle management
    functions of Functional Area (FA) 40 Space Operations Officers. The
    Army's Space Cadre, utilizing FA 40s as its foundation, is comprised of
    over 2,800 soldiers and civilians. The Space Cadre and Space Enablers
    consist of soldiers and civilians from multiple branches, career
    fields, disciplines, and functional areas.

              ``Access to these capabilities is achieved through the
            Warfighting Functions by Soldiers and a Space Cadre . . .''--
            Army Space Operations White Paper, April 2012

        Today, there are approximately 400 multi-component FA 40s serving
    Army and joint commands and organizations across all echelons of
    command--tactical, operational, and strategic. These Space Operations
    Officers, along with members of the Army's Space Cadre, directly
    influence the execution of strategic operations in support of
    operational and tactical level ground maneuver forces. Their principal
    duties include planning, developing, acquiring, integrating, and
    operating space forces, systems, concepts, applications, and
    capabilities in any element of the DOD space mission areas. In general,
    they bring our Nation's space capabilities to combatant commanders to
    help them achieve their strategic, operational, and tactical
    objectives. During the past year, USASMDC/ARSTRAT space professionals
    have supported 16 major exercises, 3 mission rehearsal exercises for
    deploying units in support of Operation Enduring Freedom, and 17 other
    named operations.
        An overview of some of the critical space capabilities provided by
    Army space professionals is highlighted below.
    Army Space Support Teams:
        The Army deploys specialized Army Space Support Teams to support
    Army commanders, other Services, joint task forces, and multinational
    forces. The teams, which have a continuous deployed presence in the
    Afghanistan theater, provide space-based products and services to
    commanders and warfighters. The teams are on-the-ground space experts,
    pulling key commercial imagery, forecasting the impact of space
    weather, and providing responsive space support to their units. Over
    the past year, USASMDC/ARSTRAT deployed eight Army Space Support Teams
    and Commercial Imagery Teams to the U.S. Central Command's area of
    operation. Since the era of persistent conflict began, we have deployed
    teams on 78 occasions. In summary, these teams bring tailored products
    and capabilities that meet critical theater commander's needs.

              The Army ``requires access to space capabilities to exercise
            effective mission command and support combatant commanders.''--
            Army Capstone Concept, December 2012

    Satellite Communications:
        Our role in satellite communications (SATCOM) is to link tactical
    warfighter networks to the DOD Information Network primarily through
    the successful execution of the following tasks:

            -  Conducting payload operations and transmission control of
            the Defense Satellite Communications (DSCS) and Wideband Global
            SATCOM System (WGS) constellations. Transmission control for
            more than 97 percent of the DOD-owned SATCOM bandwidth is
            provided by Army operators controlling the payloads on these
            satellites.
            -  Serving as the consolidated SATCOM System Expert for the DOD
            narrowband and wideband SATCOM constellations which includes
            the DSCS, the WGS, the Mobile User Objective System (MUOS), the
            Ultra High Frequency SATCOM (UHF), and the Fleet Satellite
            Communications System. As the SATCOM System Expert for MUOS,
            the Army is responsible for DOD's use of our next generation
            tactical system which will transform tactical SATCOM from
            radios into secure cellular networked communication tools.
            Additionally, the Army has a significant role and assigned
            responsibilities in DOD's expanding use of military satellite
            communications on the WGS through a number of growing programs
            and initiatives. The Army is also the operational lead for
            multiple WGS international partnerships.
            -  Manning and operating the Wideband Satellite Communications
            Operations Centers (WSOCs) and the Regional Satellite
            Communications Support Centers (RSSCs). The satellite
            communications missions of the DSCS and the WGS are performed
            by the 1st Space Brigade's 53rd Signal Battalion and Department
            of the Army Civilians utilizing the capabilities of the
            globally located WSOCs and RSSCs. Over the past year, we
            completed necessary modernization and replacement of aging
            antennas and terminal equipment of two WSOCs--one in Hawaii and
            the other in Maryland. Modernization and equipment replacement
            was required so that the centers were compatible with the fleet
            of new and expanding WGS assets being deployed by the Air
            Force. Construction of the final WSOC in Germany has been
            delayed while resolution of a permit issue is pursued with the
            host country. We now project construction to begin late this
            calendar year.

    Friendly Force Tracking:
        Friendly force tracking (FFT) systems support situational awareness
    enroute to and throughout areas of operation. Joint and Army forces
    require precise position, navigation, and timing (PNT) information to
    enable confident, decisive maneuver by both ground and air assets.
    Accurate PNT data is also required for increased accuracy for weapons
    systems and precision munitions. The DOD's Friendly Force Tracking
    Mission Management Center, operated by USASMDC/ARSTRAT from Peterson
    Air Force Base, CO, interprets more than one and a half million
    location tracks a day to provide a common operating picture to command
    posts and operations centers. This capability, performed on behalf of
    STRATCOM, is an essential worldwide enabler to both military and other
    government agencies.

              ``Future forces require the ability to conduct integrated FFT
            operations that include joint forces and a wide array of
            unified action partners.''--Army Space Operations White Paper,
            April 2012

    Ballistic Missile Early Warning:
        Early warning is a key component of the indications and warning for
    missile defense. Army forces need assured, accurate, and timely missile
    warning launch location, in-flight position, and predicted impact area
    data. The 1st Space Brigade's Joint Tactical Ground Stations (JTAGS)
    Detachments, operated by Army personnel, monitor enemy missile launch
    activity and other infrared events of interest and share the
    information with members of the air and missile defense and operational
    communities. Our JTAGS Detachments are forward-stationed across the
    globe, providing 24/7/365 dedicated and assured missile warning to
    theater level commanders.

    Geospatial Intelligence (GEOINT) Support:
        USASMDC/ARSTRAT, as a member of the Army's intelligence community,
    provides geospatial intelligence production in direct support of the
    combatant commands, as an operational element of the Army National-To-
    Theater Program and member of the National System for Geospatial
    Intelligence. The Army's space and intelligence experts perform
    exploitation of a variety of commercial, civil, and DOD imagery data
    derived from space and airborne sources. Additionally, they aid in the
    exploration of emerging spectral system technologies and in
    transitioning new capabilities to the warfighter. A few of the recent
    operational imagery support services provided by our GEOINT
    professionals include assistance to U.S. Northern Command during last
    summer's Colorado Springs fires and support to U.S. Army North in the
    intelligence training provided to the Mexican Army. Since my last
    appearance before this subcommittee, our GEOINT professionals were
    recognized by the Defense Intelligence Agency for their outstanding
    homeland border security support over the past 5 years.

    Operations Reach-back Support and Services:
        Our Colorado Springs, Colorado Operations Center continues to
    provide daily reach-back support for our space experts deployed
    throughout the operational force and enables us to reduce our forward-
    deployed footprint. This center maintains constant situational
    awareness of deployed elements, continuously responds to requests for
    information, and provides the essential reach-back system of
    connectivity with technical subject matter experts.

    Tactical Exploitation of National Capabilities:
        The Army Special Programs Office, under the direction of the
    assistant Secretary of the Army for Acquisition, Logistics, and
    Technology, is the Army's focal point for the exploitation of national
    intelligence, surveillance, and reconnaissance assets and products
    through the Tactical Exploitation of National Capabilities program. The
    Army continues to be fully integrated into the National Reconnaissance
    Office and the broader Intelligence Community.

    Strategic Space Surveillance:
        The Army also operates facilities and assets that are of utmost
    importance to protecting the Nation's use of space. The U.S. Army
    Kwajalein Atoll/Reagan Test Site, located in the Marshall Islands, is a
    national asset that provides unique radars and sensors that contribute
    to STRATCOM's space situational awareness mission, enabling protection
    of the Nation's manned and unmanned space assets. This strategic site
    also serves as a critical asset for ballistic missile readiness
    testing, ballistic missile defense testing, and is ideally located to
    provide equatorial launch benefits.
        addressing tomorrow's requirements--building future space forces
        Over the past 2 decades, Army operations have transitioned from
    being ``supported'' by space capabilities to being truly ``enabled'' by
    them--space capabilities are an integral part in conducting military
    operations. Military and civilian space technology has dramatically
    improved access, processing, and dissemination of data collected by
    space-based capabilities. To ensure our continued access to space-based
    capabilities, we must continue active participation in defining space-
    related requirements. These identified needs equip us to develop and
    mature Army and joint force structure and concepts of operations in
    sync with the deployment of capabilities, thereby enabling our forces
    to conduct tomorrow's full range of military operations. Assuring
    access to space is our focus--ensuring the requisite capabilities and
    effects are delivered to the tactical warfighter on time, every time
    demands that our space capabilities and architectures become more
    resilient against attacks and disruption. We must continue to make
    certain that our Army does not face a day without space and space-
    related capabilities and that the Army is prepared to conduct
    operations in a space-degraded environment.

              As Land Force Structure is Reduced, Strategic Enablers Such
            as Space and Cyber Become More Important

        In our second core task of building space forces for tomorrow, we
    use our capability development function to meet future space
    requirements. We continue to use both established and emerging
    processes to document our space-based needs and pursue validation of
    Army, joint, and coalition requirements. This regimented approach helps
    ensure limited resources are applied where warfighter operational
    utility is most effectively served. The approach enhances our pursuit
    and development of necessary capabilities across Doctrine,
    Organization, Training, Materiel, Leadership and Education, Personnel,
    and Facilities (DOTMLPF) domains to mitigate threats and
    vulnerabilities while sustaining land force operations. In addition to
    conducting and evaluating experiments, war games, studies, and
    analysis, our battle lab develops and validates concepts leading to the
    space related DOTMLPF alternatives and solutions.

              Preparing Today's Warfighter for the Challenges of Tomorrow

        In 2011, the Chief of Staff of the Army approved the Army's Space
    Strategic Plan. This document, shaped by national level guidance such
    as the National Space Policy and the National Security Space Strategy,
    outlines the Army's space enterprise path for strategic planning,
    programming, and resourcing. In April 2012, the Army Space White Paper
    was published--it serves as an integrated implementation plan of the
    Army's Space Strategic Plan.
        The essence of our space strategy and the guiding vision of the
    Army space enterprise are to ensure access to resilient and relevant
    space-enabled capabilities to Army forces conducting unified land
    operations. To achieve this, our space strategy rests on three tenets
    that link Army strategic planning and programming for space to the
    guidance in national and DOD space policy and strategy. The three
    essential tenets are:

            -  To enable the Army's enduring mission by providing requisite
            space-enabled capabilities to support current operations, as
            well as future transformation efforts.
            -  To leverage existing DOD, national, commercial, and
            international space-based capabilities.
            -  To pursue cross-domain solutions to create a resilient
            architecture to mitigate threats, vulnerabilities, and assure
            access to critical capabilities needed to sustain land force
            operations.

        To achieve the three tenets, the Army developed the Space
    Operations Officer Qualification Course and the Army Space Cadre Basic
    Course to provide a foundation in properly training our space
    professionals. We also conduct space training via resident, mobile
    training teams, and distributed learning venues to support initial
    skills and qualification training, leader development, lifelong
    learning, and professional development in support of life cycle
    management. During the past year, USASMDC/ARSTRAT conducted
    approximately 160 space courses that provided about 5,500 soldiers and
    civilians essential space training. The Army continues to leverage the
    high-quality space training developed and administrated by the Air
    Force. In addition, each year, numerous space officers complete
    additional post-graduate studies at the Naval Postgraduate School,
    accredited civilian institutions, and training with industry. Finally,
    in conjunction with the Army Space Strategy Implementation Plan, we
    continue to incorporate space knowledge and leader development training
    into all Army schools. The Army remains committed to growing, training,
    developing, tutoring, advancing, and retaining space professionals.
    With the current fiscal constraints, we are concerned that essential
    space training will not maintain the necessary resources during the
    coming year and capabilities of tomorrow will suffer.
    the day-after-tomorrow--continued space technology materiel development
        Our final core task entails our materiel development function--
    pursuing essential capabilities for the day-after-tomorrow. Our goal is
    to expand technological capabilities to ensure space and space-based
    products provide warfighters, especially those that are remotely
    located, with dominant battlefield advantages. While we are very much
    aware that today's, and likely tomorrow's, fiscal realities will limit
    technology modernization efforts, we strongly believe that we must
    continue to conduct research, development, and demonstrations on
    capabilities that have great potential to return maximum advances in
    our combat effectiveness. We cannot afford to mortgage future combat
    readiness by continuing to defer research today. As such, we continue
    to prioritize, leverage, and invest in promising space research and
    development technologies.
        Last year, I highlighted three responsive space Joint Capability
    Technology Demonstration (JCTD) Program efforts that have the potential
    to provide enhanced space capabilities to ground commanders and
    warfighters. Since last year, there has been much progress in these
    three space technology endeavors and I would like to provide you an
    update of these initiatives.

    SMDC Nanosatellite Program-3 (SNaP-3):
        Future constellations of relatively low cost nanosatellites,
    estimated to be approximately $300,000 each, deployed in mission-
    specific, low earth orbits can provide a cost effective, beyond-line-
    of-sight data communications capability. This capability is targeted
    for users who, without it, have no dedicated access to satellite
    communications. These satellites are also very useful in exfiltrating
    data from unattended ground sensors that have been placed in remote
    locations to track enemy troop movement, thereby reducing the friendly
    force footprint. SNaP-3, an OSD-approved JCTD, seeks to utilize three
    of these small satellites to provide dedicated coverage to a wide range
    of underserved users in remote areas. The Army is building and will
    launch three SNaP-3 nanosatellites to address this communications
    shortfall. We are hopeful that, in the near future, this initiative
    will transition to a program of record.

              A Core Task--Provide Greater Capabilities to Future
            Warfighters

    Kestrel Eye Visible Imagery Nanosatellite:
        New technologies are enabling the production of low-cost
    nanosatellites which have ever increasing military utility. Kestrel
    Eye, an OSD-approved JCTD, is an endeavor to manufacture and fly three
    electro-optical near-nanosatellite-class imagery satellites that can be
    tasked directly by the tactical ground component warfighter. Weighing
    about 30 pounds and capable of producing 1.5 meter resolution imagery,
    data from each Kestrel Eye satellite will be down-linked directly to
    the same tasking warfighter via a data relay system, also accessible by
    other theater warfighters, without any continental United States relay
    pass-through or data filtering. At the production mode cost of
    approximately $1 million per spacecraft, the intent of this program is
    to demonstrate a small, tactical space-based imagery nanosatellite that
    could be propagated in large numbers to provide a cost effective,
    persistent capability to ground forces. Each satellite would have an
    operational life of greater than 2 years in low earth orbit. The
    initial Kestrel Eye launch is scheduled for next year.

    Soldier-Warfighter Operationally Responsive Deployer for Space
            (SWORDS):
        Concurrent with the shrinking size and reduced cost of militarily
    useful satellites is the need for an economical launch system. SWORDS,
    an OSD approved JCTD, is an initiative to develop a very low cost
    launch vehicle that can respond to a Combatant Commander's launch
    request within 24 hours. This launch system is designed to take
    advantage of low cost, proven technologies, and non-exotic materials to
    provide launch for small weight payloads to low earth orbit for about
    $1 million per launch vehicle. SWORDS employs a very simple design,
    using commercial off-the-shelf hardware from outside the aerospace
    industry. It incorporates a benign bi-propellant liquid propulsion
    system, and uses simple and low cost launch support and launch site
    hardware. SWORDS represents a game-changing approach to launch vehicle
    design and operations that holds great promise not only for the Army
    tactical space enterprise, but for the civil and commercial space
    sectors launching small payloads into low earth orbit. In fact, we are
    partnering with NASA for development of the SWORDS initiative. The
    initial suborbital launch is scheduled for next year.

                                   CONCLUSION

        The Army is the largest user of space and space-based capabilities.
    As such, USASMDC/ARSTRAT is actively engaged in organizing, manning,
    equipping, and training space forces for the Army. We also, by working
    with organizations both internal and external to the Army, continue to
    develop and enhance technology to provide our warfighters the best
    battlefield capabilities. We will continue to rely on and advocate for
    space products and services provided by the DOD, other government
    agencies, our allies and coalition partners, and commercial entities in
    order to see, shoot, move, and communicate. Our use of and reliance on
    space is integral and absolutely critical to the Army's successful
    defense of this Nation. We will have challenges ahead as we determine
    the best courses of action to implement DOD and Army budget guidance.
    In adapting to the budget realities, space capabilities will become
    even more critical to enabling adaptive Army missions.

              Space--The Ultimate High Ground

        Invariably, discussions regarding space focus on the technology.
    The most critical space asset we possess are the dedicated soldiers,
    sailors, airmen, marines, and civilian space professionals who develop,
    field, and operate that technology and deliver its capabilities to the
    warfighter. Just as other Army and other Services personnel, the men
    and women of USASMDC/ARSTRAT will continue to focus on providing
    trained and ready space forces and capability enhancements to these
    warfighters, the Army, the joint community, and to the Nation.
        I appreciate having the opportunity to speak on these important
    matters and look forward to addressing any questions you may have.
    Secure the High Ground and Army Strong!

        Senator Udall. Thank you, General.
        We now turn to Ms. Cristina T. Chaplain, who is the
    Director, Acquisition and Sourcing Management, at the GAO.

     STATEMENT OF MS. CRISTINA T. CHAPLAIN, DIRECTOR, ACQUISITION
       AND SOURCING MANAGEMENT, GOVERNMENT ACCOUNTABILITY OFFICE

        Ms. Chaplain. Thank you, Chairman Udall, Ranking Member
    Sessions, and Senator Fischer. I am pleased to be here today to
    talk about our work regarding space acquisitions.
        The noteworthy thing is that our work continues to affirm
    that DOD is reducing acquisition risk on its satellite
    acquisitions. Cost growth is definitely less widespread. This
    is a very critical achievement in this time of constrained
    budgets to be reducing unnecessary cost growth, in my view.
        We still have concerns about the systems and programs that
    support satellites. I wanted to highlight three of them today.
    They are also highlighted in my testimony in more detail.
        First, we are still reporting gaps, adding up to years in
    some cases, between the time satellites are launched and the
    time ground systems and user equipment are delivered. That is
    really an issue because it could lead to waste of expensive
    space-based capability.
        Second, we reported just last week that the networks that
    control and maintain satellites need to be streamlined and
    brought up to today's modern technology and practices. DOD
    concurred with these findings and recommendations.
        Third, the rising cost of launching satellites is still an
    issue. We performed an analysis this year that showed about $46
    billion is predicted to be spent over the next 5 years by the
    whole Federal Government on launching satellites. Competition
    is key to reducing costs, but we will not know for several
    years whether there will actually be viable competitors. There
    is a long process they need to go through, and there are still
    unknowns about the outcome of that process. So it is something
    we will be watching.
        Those are the three concerns I wanted to point out today.
    Again, they are highlighted more in my statement. I am happy to
    answer questions about them and anything else today.
        [The prepared statement of Ms. Chaplain follows:]

                 Prepared Statement by Ms. Cristina T. Chaplain

        Chairman Udall, Ranking Member Sessions, and members of the
    subcommittee: I am pleased to be here today to discuss the Department
    of Defense's (DOD) space systems acquisitions.\1\ Each year, DOD spends
    billions of dollars to acquire space-related capabilities that support
    military and other government operations--such as intelligence,
    reconnaissance and surveillance; communications; and homeland
    security--and to enable transformation of the way DOD collects and
    disseminates information. A single military satellite can cost more
    than $3 billion to acquire and more than $100 million to launch into
    orbit. Complementary systems, such as ground control software, can also
    cost billions. Given the expensive nature of space systems and today's
    fiscal environment, it is essential that DOD carefully manage these
    programs, apply best practices, and continually assess ways to reduce
    costs while maintaining a high degree of reliability and innovation.
    ---------------------------------------------------------------------------
        \1\ DOD space systems include space-based systems (satellites);
    ground based systems (command and control (C2), launch C2, processing
    stations, space surveillance stations); satellite launch vehicle
    systems (boosters, upper-stages, payload processing facilities, space
    launch facilities, ground support equipment), and user equipment (hand-
    held user terminals, data reception terminals, user terminals).
    ---------------------------------------------------------------------------
        This has not always been the case. Over the last decade, the
    majority of DOD's space acquisition programs were characterized by
    significant cost and schedule growth; new programs were canceled in the
    face of affordability concerns and other problems. In 2012, GAO
    reported that the worst of those space systems acquisition problems now
    appear to be behind the department.\2\ Satellites long plagued by
    serious cost and schedule overruns are being launched. While new space
    systems acquisition programs are facing potential cost growth and
    schedule slips, they are not as widespread and significant as they were
    several years ago. Also, to its credit, DOD has taken an array of
    actions to reduce risks and strengthen leadership. However, the
    Department still faces serious challenges, such as the high cost of
    launching satellites, fragmented satellite control operations, as well
    as disconnects between fielding satellites and synchronizing ground
    systems.
    ---------------------------------------------------------------------------
        \2\ GAO, DOD Faces Challenges in Fully Realizing Benefits of
    Satellite Acquisition Improvements, GAO-12-563T (Washington, DC: Mar.
    21, 2012).
    ---------------------------------------------------------------------------
        My testimony today will focus on: (1) the current status and cost
    of DOD space systems acquisitions; (2) the results of GAO's space
    system-related reviews this past year; and (3) recent actions taken to
    address acquisition problems. This testimony is based on GAO reports
    issued over the past 5 years on space programs and weapon system
    acquisition best practices.\3\ It is also based on work performed in
    support of our annual weapon system assessments, as well as space-
    related work in support of our reports on duplication, overlap, and
    fragmentation across the Federal Government.\4\ Finally, this statement
    is based on updates on cost increases and investment trends and
    improvement actions taken since last year. To conduct these updates, we
    analyzed DOD funding estimates for selected major space systems
    acquisition programs from fiscal years 2012 through 2017 and
    interviewed officials from the Office of the Secretary of Defense. More
    information on our scope and methodology is available in our
    previously-issued reports. The work that supports this statement was
    performed in accordance with generally accepted government auditing
    standards. Those standards require that we plan and perform the audit
    to obtain sufficient, appropriate evidence to provide a reasonable
    basis for our findings and conclusions based on our audit objectives.
    We believe that the evidence obtained provides a reasonable basis for
    our findings and conclusions based on our audit objectives.
    ---------------------------------------------------------------------------
        \3\ See GAO related reports at the end of this statement.
        \4\ GAO, Defense Acquisitions: Assessments of Selected Weapon
    Programs, GAO-13-294SP (Washington, DC: Mar. 28, 2013); 2013 Annual
    Report: Actions Needed to Reduce Fragmentation, Overlap, and
    Duplication and Achieve Other Financial Benefits, GAO-13-279SP
    (Washington, DC: Apr. 9, 2013); and 2012 Annual Report: Opportunities
    to Reduce Duplication, Overlap and Fragmentation, Achieve Savings, and
    Enhance Revenue, GAO-12-342SP (Washington, DC: Feb. 28, 2012).
    ---------------------------------------------------------------------------
                                   BACKGROUND

        DOD has a long history of troubled space systems acquisitions. Over
    the past decade, most of the large DOD space systems acquisition
    programs collectively experienced billions of dollars in cost increases
    and delayed schedules. In particular, a longstanding problem in DOD
    space systems acquisitions is that program costs have tended to go up
    significantly from initial cost estimates. As shown in figure 1,
    estimated costs for selected major space systems acquisition programs
    have increased by about $22.6 billion--nearly 230 percent--from fiscal
    years 2012 through 2017. Figure 1: Comparison between Original Cost
    Estimates and Current Cost Estimates for Selected Major Space Systems
    Acquisition Programs for fiscal years 2012 through 2017.

        The gap between original and current estimates shows that DOD has
    fewer dollars available to invest in new programs or add to existing
    ones. DOD's overall level of investment over the 5-year period
    decreases until fiscal year 2014, at which point it levels off. The
    declining investment in the later years is the result of mature
    programs that have planned lower out-year funding, cancellation of a
    major space systems acquisition program and several development
    efforts, and the exclusion of several space systems acquisition efforts
    for which total cost data were unavailable. These efforts include the
    Joint Space Operations Center Mission System (JMS), Space Fence, Space
    Based Space Surveillance (SBSS) Follow-on, Precision Tracking Space
    System (PTSS), and Weather Satellite Follow-on.
        We have previously reported that programs have experienced cost
    increases and schedule delays that have resulted in potential
    capability gaps in missile warning, military communications, and
    weather monitoring.\5\ For instance, unit costs for one of the most
    troubled programs, the Space Based Infrared System (SBIRS) have climbed
    about 230 percent to over $3 billion per satellite, with the launch of
    the first satellite about 9 years later than predicted. Similarly, 8
    years after a development contract for the National Polar-orbiting
    Operational Environmental Satellite System (NPOESS) program was awarded
    in 2002, the cost estimate had more than doubled--to about $15 billion,
    launch dates had been delayed by over 5 years, significant
    functionality had been removed from the program, and the program's tri-
    agency management structure had proven to be ineffective. In February
    2010, it was announced that the National Oceanic and Atmospheric Agency
    (NOAA) and DOD would no longer jointly procure the NPOESS satellite
    system and, instead, each agency would undertake separate acquisitions.
    Consequently, the risks of gaps in weather satellite monitoring data
    have increased. Other programs, such as the Transformational Satellite
    Communications System, were canceled several years earlier because they
    were found to be too ambitious and not affordable at a time when the
    DOD was struggling to address critical acquisition problems elsewhere
    in the space systems portfolio.
    ---------------------------------------------------------------------------
        \5\ GAO, Space Acquisitions: DOD Poised to Enhance Space
    Capabilities but, Persistent Challenges Remain in Developing Space
    Systems, GAO-10-447T (Washington, DC: Mar. 10, 2010).
    ---------------------------------------------------------------------------
        Our past work has identified a number of causes of acquisition
    problems, but several consistently stand out. At a higher level, DOD
    tended to start more weapon programs than was affordable, creating a
    competition for funding that focused on advocacy at the expense of
    realism and sound management. DOD also tended to start its space
    systems programs before it had the assurance that the capabilities it
    was pursuing could be achieved within available resources and time
    constraints. For example, when critical technologies planned for a
    satellite system are still in relatively early stages of discovery and
    invention, there is no way to accurately estimate how long it would
    take to design, develop, and build the system. Finally, programs
    typically attempted to satisfy all requirements in a single step,
    regardless of the design challenges or the maturity of the technologies
    necessary to achieve the full capability. DOD's preference to make
    larger, complex satellites that perform a multitude of missions
    stretched technology challenges beyond current capabilities in some
    cases. In the past, funding instability, poor contractor oversight, and
    relaxed quality standards have also contributed to acquisition
    problems.
        We have also reported that fragmented leadership and lack of a
    single authority in overseeing the acquisition of space programs have
    created challenges for optimally acquiring, developing, and deploying
    new space systems.\6\ Past studies and reviews have found that
    responsibilities for acquiring space systems are diffused across
    various DOD organizations, even though many of the larger programs,
    such as the Global Positioning System (GPS) and those to acquire
    imagery and environmental satellites, are integral to the execution of
    multiple agencies' missions. We reported that with multiagency space
    programs, success is often only possible with cooperation and
    coordination; however, successful and productive coordination appears
    to be the exception and not the rule. This fragmentation is problematic
    not only because of a lack of coordination that has led to delays in
    fielding systems, but also because no one person or organization is
    held accountable for balancing governmentwide needs against wants,
    resolving conflicts and ensuring coordination among the many
    organizations involved with space systems acquisitions, and ensuring
    that resources are directed where they are most needed.
    ---------------------------------------------------------------------------
        \6\ GAO, 2012 Annual Report: Opportunities to Reduce Duplication,
    Overlap and Fragmentation, Achieve Savings, and Enhance Revenue, GAO-
    12-342SP (Washington, DC: Feb. 28, 2012); and Space Acquisitions: DOD
    Poised to Enhance Space Capabilities but, Persistent Challenges Remain
    in Developing Space Systems, GAO-10-447T (Washington, DC: Mar. 10,
    2010).
    ---------------------------------------------------------------------------
        Over the past 5 years, our work has recommended numerous actions
    that can be taken to address the problems we identified. Generally, we
    have recommended that DOD separate technology discovery from
    acquisition, follow an incremental path toward meeting user needs,
    match resources and requirements at program start, and use quantifiable
    data and demonstrable knowledge to make decisions to move to next
    phases. We have also identified practices related to cost estimating,
    program manager tenure, quality assurance, technology transition, and
    an array of other aspects of acquisition program management that could
    benefit space programs.
        DOD has generally concurred with our recommendations, and has
    undertaken a number of actions to establish a better foundation for
    acquisition success. For newer satellite acquisition efforts, DOD has
    attempted to incorporate lessons learned from its experiences with
    earlier efforts. For example, the GPS III program, which began product
    development in 2008, is using a ``back to basics'' approach,
    emphasizing rigorous systems engineering, use of military
    specifications and standards, and an incremental approach to providing
    capability. Thus far, the work performed on the development of the
    first two satellites is costing more than expected--but not on the
    scale of earlier programs--and its schedule remains on track efforts.
    For example, the GPS III program, which began product development in
    2008, is using a ``back to basics'' approach, emphasizing rigorous
    systems engineering, use of military specifications and standards, and
    an incremental approach to providing capability. Thus far, the work
    performed on the development of the first two satellites is costing
    more than expected--but not on the scale of earlier programs--and its
    schedule remains on track efforts. For example, the GPS III program,
    which began product development in 2008, is using a ``back to basics''
    approach, emphasizing rigorous systems engineering, use of military
    specifications and standards, and an incremental approach to providing
    capability. Thus far, the work performed on the development of the
    first two satellites is costing more than expected--but not on the
    scale of earlier programs--and its schedule remains on track.\7\
    ---------------------------------------------------------------------------
        \7\ Air Force officials recently stated that, although GPS III is
    still maintaining an April 2014 ``available for launch'' date for the
    first satellite, the Air Force delayed the launch of the first GPS III
    space vehicle by a year in order to synchronize it with the
    availability of the GPS Operational Control Segment (OCX) Block 0,
    without which the satellites cannot be launched and checked out.
    ---------------------------------------------------------------------------
        Our prior testimonies have cited an array of actions as well.\8\
    For instance, the Office of the Secretary of Defense created a new
    office under the Undersecretary of Defense for Acquisition, Technology
    and Logistics to oversee all major DOD space and intelligence related
    acquisitions and it began applying its broader weapon system
    acquisition policy (DOD Instruction 5000.02, Operation of the Defense
    Acquisition System (Dec. 8, 2008)) to space systems, instead of
    allowing a tailored policy for space that enabled DOD to commit to
    major investments before knowing what resources will be required to
    deliver promised capability.\9\ Among other initiatives, the Air Force
    undertook efforts to improve cost estimating and revitalize its
    acquisition workforce and program management assistance programs.
    Further, in 2009, for major weapons programs, Congress enacted the
    Weapon Systems Acquisition Reform Act of 2009, which required greater
    emphasis on front-end planning and, for example, refining concepts
    through early systems engineering, strengthening cost estimating,
    building prototypes, holding early milestone reviews, and developing
    preliminary designs before starting system development.
    ---------------------------------------------------------------------------
        \8\ GAO, Space Acquisitions: DOD Faces Challenges in Fully
    Realizing Benefits of Satellite Acquisition Improvements, GAO-12-563T
    (Washington, DC: Mar. 21, 2012); and Space Acquisitions: DOD Delivering
    New Generations of Satellites, but Space System Acquisition Challenges
    Remain, GAO-11-590T (Washington, DC: May 11, 2011).
        \9\ DOD Instruction 5000.02, Operation of the Defense Acquisition
    System (2008).
    ---------------------------------------------------------------------------
           THE CURRENT STATUS AND COST OF SPACE SYSTEMS ACQUISITIONS

        Most of DOD's major satellite programs are in mature phases of
    acquisition and cost and schedule growth is not as widespread as it was
    in prior years. However, the satellites, ground systems, and user
    terminals are not optimally aligned and the cost of launching
    satellites continues to be expensive.
        Most of DOD's major satellite programs are in mature phases of
    acquisition, that is, the initial satellites have been designed,
    fabricated and launched into orbit while additional satellites of the
    same design are being produced. Only two major satellite programs are
    in earlier phases of acquisition--the GPS III program and the PTSS
    program. For the portfolio of major satellite programs, new cost and
    schedule growth is not as widespread as it was in prior years, but DOD
    is still experiencing problems in these programs. For example, though
    the first two SBIRS satellites have launched, program officials are
    predicting a 14 month delay on the production of the third and fourth
    geosynchronous earth orbit (GEO) satellites due in part to technical
    challenges, parts obsolescence, and test failures. As we reported in
    March 2013, program officials are predicting about a $440 million cost
    overrun for these satellites.\10\ Also, the work performed to date for
    development of the first two GPS III satellites continues to cost more
    than DOD expected. Since the program entered system development, total
    program costs have increased approximately $180 million. The GPS III
    program office has attributed this to a variety of factors, such as
    inefficiencies in the development of the satellite bus and the
    navigation payload.\11\ Program officials stated that the cost growth
    was partially due to the program's use of a back to basics approach,
    which they stated shifted costs to earlier in the acquisition as a
    result of more stringent parts and materials requirements. They
    anticipate these requirements will result in fewer problems later in
    the acquisition.
    ---------------------------------------------------------------------------
        \10\ GAO, Defense Acquisitions: Assessments of Selected Weapon
    Programs, GAO-13-294SP (Washington, DC: March 28, 2013).
        \11\ Every satellite has a bus and payload. The bus is the body of
    the satellite. It carries the payload and is composed of a number of
    subsystems, like the power supply, antennas, telemetry and tracking
    command, and mechanical and thermal control subsystems. The bus also
    provides electrical power, stability, and propulsion for the entire
    satellite. The payload--carried by the bus--includes all the devices a
    satellite needs to perform its mission, which differs for every type of
    satellite.
    ---------------------------------------------------------------------------
        Table 1 describes the status of the satellite programs we have been
    tracking in more detail.

        Though satellite programs are not experiencing cost and schedule
    problems as widespread as in years past, we have reported that ground
    control systems and user terminals in most of DOD's major space systems
    acquisitions are not optimally aligned, leading to underutilized on-
    orbit satellite resources and limited capability provided to the
    warfighter.\12\ For example:
    ---------------------------------------------------------------------------
        \12\ GAO, Defense Acquisitions: Challenges in Aligning Space System
    Components, GAO-10-55 (Washington, DC: Oct. 29, 2009); Space
    Acquisitions: DOD Poised to Enhance Space Capabilities but, Persistent
    Challenges Remain in Developing Space Systems, GAO-10-447T (Washington,
    DC: Mar. 10, 2010); and GAO, Defense Acquisitions: Assessments of
    Selected Weapon Programs, GAO-13-294SP (Washington, DC: Mar. 28, 2013).

             Over 90 percent of the MUOS's planned capability is
            dependent on the development of compatible user terminals.
            Although the first MUOS satellite was launched over a year ago,
            operational testing of MUOS with production-representative user
            terminals is not expected to occur until the second quarter of
            fiscal year 2014.
             The SBIRS program revised its delivery schedule of
            ground capabilities to add increments that will provide the
            warfighter some capabilities sooner than 2018, but complete and
            usable data from a critical sensor will not be available until
            about 7 years after the satellite is on orbit.
             The Family of Advanced Beyond Line-of-Sight Terminals
            (FAB-T) program, which is developing user terminals intended to
            communicate with AEHF satellites, has experienced numerous cost
            and schedule delays and is currently not synchronized with the
            AEHF program, which launched its second satellite last year
            while the FAB-T program has yet to deliver any capabilities.
            Current estimates show that FAB-T will reach initial
            operational capability for some requirements in 2019, about 5
            years after AEHF is scheduled to reach its initial operational
            capability.
             GPS OCX is required for the launch of the first GPS
            III satellite because the existing ground control software is
            not compatible with the new GPS satellites. Realizing that the
            new ground control system would not be delivered in time to
            launch the first GPS III satellite, the Air Force added funding
            to the contract to accelerate development of the software that
            can launch and checkout the GPS III satellite, leaving the
            other capabilities--like the ability to command and control the
            satellite--to be delivered in late 2016. Subsequently, the
            launch of the first GPS III satellite has been delayed to May
            2015 to better synchronize with the availability of the launch
            software.

        Though there are inherent difficulties in aligning delivery of
    satellites, ground control systems, and user terminals, we reported in
    2009 that the lack of synchronization between segments of space
    acquisition programs is largely the result of the same core issues that
    hamper acquisitions in general--requirements instability, funding
    instability, insufficient technology maturity, underestimation of
    complexity, and poor contractor oversight, among other issues.\13\ In
    addition, user terminals are not optimally aligned because of a lack of
    coordination and effective oversight over the many military
    organizations that either develop user terminals or have some hand in
    development. We recommended that the Secretary of Defense take a
    variety of actions to help ensure that DOD space systems provide more
    capability to the warfighter through better alignment and increased
    commonality, and to provide increased insight into ground asset costs.
    DOD generally agreed with these recommendations.
    ---------------------------------------------------------------------------
        \13\ GAO, Defense Acquisitions: Challenges in Aligning Space System
    Components, GAO-10-55 (Washington, DC: Oct. 29, 2009).
    ---------------------------------------------------------------------------
        Another acquisition challenge facing DOD is the cost of launching
    satellites into space. DOD has benefited from a long string of
    successful launches, including three military and four intelligence
    community satellites this year. However, each launch can range from
    $100 million to over $200 million. Additional money is spent to support
    launch infrastructure. An analysis we performed this year showed that
    from fiscal years 2013 through 2017, the government can expect to spend
    approximately $46 billion on launch activities.\14\ Meanwhile, we
    reported in prior years that too little was known about the factors
    that were behind cost and price increases.\15\ The Air Force has
    developed a new launch acquisition strategy which includes a block buy
    approach for future launches. At the same time, it is implementing an
    effort to introduce new launch providers. Both efforts are designed to
    help lower costs for launch, but they face challenges, which are
    discussed further in the next section.
    ---------------------------------------------------------------------------
        \14\ The $46 billion is based on the President's budget submission
    for fiscal year 2013. In June 2012, DOD estimated the total cost of the
    EELV program to be nearly $70 billion through 2030. This represents the
    costs incurred since the inception of the program in 1995. The Air
    Force is currently developing a new cost estimate that considers
    potentially lower contract prices resulting from future competition in
    the program.
        \15\ GAO, Evolved Expendable Launch Vehicle: DOD Is Addressing
    Knowledge Gaps in Its New Acquisition Strategy, GAO-12-822 (Washington,
    DC: July 26, 2012); and Evolved Expendable Launch Vehicle: DOD Needs to
    Ensure New Acquisition Strategy Is Based on Sufficient Information,
    GAO-11-641 (Washington, DC: Sept. 15, 2011).
    ---------------------------------------------------------------------------
           RECENT GAO FINDINGS RELATED TO SPACE SYSTEMS ACQUISITIONS

        Over the past year, we have reported on DOD's progress in closing
    knowledge gaps in its new Evolved Expendable Launch Vehicle (EELV)
    acquisition strategy, DOD's efforts to introduce new launch providers,
    opportunities to help reduce satellite program costs, and the Air
    Force's satellite control operations and modernization efforts with
    comparisons to commercial practices. These reports further highlight
    the successes and challenges that have faced the space community as it
    has sought to mitigate rising costs and deliver modernized
    capabilities.

    EELV Acquisition Strategy
        We reported in September 2011 that DOD needed to ensure the new
    acquisition strategy was based on sufficient information, as there were
    significant uncertainties relating to the health of the launch
    industrial base, contractor cost or pricing data, mission assurance
    costs and activities, numbers of launch vehicles needed, and future
    engine prices which were expected to double or triple in the near
    term.\16\ As a result, DOD was at risk of committing to an acquisition
    strategy-including an expensive, multi-billion dollar block buy of
    launch vehicle booster cores-before it had information essential to
    ensuring business decisions contained in the strategy were sound.\17\
    Among other things, we recommended DOD assess engine costs and mission
    assurance activities, reassess the length of the proposed block buy,
    and consider how to address broader launch acquisition and technology
    development issues. DOD generally concurred with the recommendations.
    The Air Force issued its new EELV acquisition strategy in November
    2011. Following our review, the National Defense Authorization Act for
    Fiscal Year 2012 required that DOD report to congressional committees a
    description of how it implemented the recommendations contained in our
    report and for GAO to assess that information.\18\
    ---------------------------------------------------------------------------
        \16\ GAO, Evolved Expendable Launch Vehicle: DOD Needs to Ensure
    New Acquisition Strategy Is Based on Sufficient Information, GAO-11-641
    (Washington, DC: Sept. 15, 2011).
        \17\ The booster core is the main body of a launch vehicle. In the
    EELV program, common booster cores are used to build all of the Atlas V
    and Delta IV launch vehicles. Medium and intermediate launch vehicles
    use one core each, while the Delta IV Heavy launch vehicle requires
    three.
        \18\ Pub. L No 112-81, Sec. 839 (2011).
    ---------------------------------------------------------------------------
        We reported in July 2012, that DOD had numerous efforts in progress
    to address the knowledge gaps and data deficiencies identified in our
    September 2011 report, such as completing or obtaining independent cost
    estimates for two EELV engines and completing a study of the liquid
    rocket engine industrial base.\19\ We reported that officials from DOD,
    NASA, and NRO had initiated several assessments to obtain needed
    information, and had worked closely to finalize new launch provider
    certification criteria for national security space launches. However,
    we found that more action was needed to ensure that launch mission
    assurance activities were not excessive, to identify opportunities to
    leverage the government's buying power through increased efficiencies
    in launch acquisitions, and to strategically address longer-term
    technology investments. We reported that some information DOD was
    gathering could set the stage for longer-term strategic planning for
    the program, especially in critical launch technology research and
    development decisions and that investing in a longer-term perspective
    for launch acquisitions was important to fully leverage the
    government's buying power and maintain a healthy industrial base.
    ---------------------------------------------------------------------------
        \19\ GAO, Evolved Expendable Launch Vehicle, DOD Is Addressing
    Knowledge Gaps in Its New Acquisition Strategy, GAO-12-822 (Washington,
    DC: July 26, 2012).
    ---------------------------------------------------------------------------
    Launch Services New Entrant Certification Guide
        In 2011, the Air Force, National Aeronautics and Space
    Administration (NASA), and National Reconnaissance Office (NRO) began
    implementing a coordinated strategy--called the Air Force Launch
    Services New Entrant Certification Guide (Guide)--to certify new
    entrants to provide launch capability on EELV-class launch vehicles.
    New entrants are launch companies that are working toward certifying
    their launch vehicle capabilities so that they may be allowed to
    compete with the current sole-source contractor for government
    launches. Launch vehicle certification is necessary to ensure that only
    proven, reliable launch vehicles will be used to launch government
    satellites. The House Armed Services Committee Report accompanying the
    National Defense Authorization Act for Fiscal Year 2013 directed GAO to
    review and analyze the implementation of the Guide.\20\
    ---------------------------------------------------------------------------
        \20\ H.R. Rep. No. 112-479, at 186 (2012); Pub. L. No 112-239
    (2013).
    ---------------------------------------------------------------------------
        In February 2013, we reported that the Air Force based its Guide on
    existing NASA policy and procedures with respect to payload risk
    classification and launch vehicle certification.\21\ We found that the
    Air Force, NASA, and NRO were working to coordinate and share
    information to facilitate launch vehicle certification efforts, but
    that each agency would determine for itself when certification had been
    achieved. As a result, some duplication and overlap of efforts could
    occur. We also found that the Air Force had added other prerequisites
    to certification for new entrants that were not captured within the
    Guide.
    ---------------------------------------------------------------------------
        \21\ GAO, Launch Services New Entrant Certification Guide, GAO-13-
    317R (Washington, DC: Feb. 7, 2013).
    ---------------------------------------------------------------------------
        We reported that while potential new entrants stated that they were
    generally satisfied with the Air Force's efforts to implement the
    Guide, they identified several challenges to certification, as well as
    perceived advantages afforded to the incumbent launch provider. For
    example, new entrants stated that they faced difficulty in securing
    enough launch opportunities to become certified. In November 2012, the
    Under Secretary of Defense for Acquisition, Technology and Logistics
    directed the Air Force to make available up to 14 launches for
    competition to new entrants, provided they demonstrate the required
    number of successful launches and provide the associated data in time
    to compete. If new entrants had not completed their final certification
    launch in time to compete, the newly-available launches would likely be
    awarded to the incumbent provider. New entrants stated they must also
    respond to changes in Air Force requirements that could impact their
    launch vehicle design and certification schedules, and considered some
    Air Force requirements to be overly restrictive; for example, they must
    be able to launch a minimum of 20,000 pounds to low earth orbit from
    specific Air Force launch facilities (versus facilities the new
    entrants currently use). The Air Force stated that 20,000 pounds
    represented the low end of current EELV lift requirements, and that
    alternate launch sites were not equipped for the Air Force's national
    security launches. Further, new entrants noted that the incumbent
    provider received ongoing infrastructure and development funding from
    the government, an advantage not afforded to the new entrants, and that
    historical criteria for competition in the EELV program were more
    lenient. The Air Force acknowledged that criteria for competition are
    different, reflective of differences in the acquisition environment.

    Opportunities to Help Reduce Government Satellite Program Costs
        In our April 2013 report on reducing duplication, overlap, and
    fragmentation within the Federal Government, we found that government
    agencies, including DOD, could achieve considerable cost savings on
    some missions by leveraging commercial spacecraft through innovative
    mechanisms.\22\ These mechanisms include hosted payload arrangements
    where government instruments are placed on commercial satellites, and
    ride sharing arrangements where multiple satellites share the same
    launch vehicle.
    ---------------------------------------------------------------------------
        \22\ GAO, 2013 Annual Report: Actions Needed to Reduce
    Fragmentation, Overlap, and Duplication, and Achieve Other Financial
    Benefits, GAO-13-279SP (Washington, DC: Apr. 9, 2013).
    ---------------------------------------------------------------------------
        We reported that DOD is among the agencies that are actively using
    or beginning to look at these approaches in order to save costs. For
    instance, DOD has two ongoing hosted payload pilot missions and has
    taken preliminary steps to develop a follow-on effort.\23\ DOD
    estimated that the Commercially Hosted Infrared Payload Flight
    Demonstration Program answered the majority of the government's
    technical questions through its commercial partnership, while saving it
    over $200 million over a dedicated technical demonstration mission. In
    addition, DOD is investigating ride sharing to launch GPS satellites
    beginning in fiscal year 2017, which could save well over $60 million
    per launch.
    ---------------------------------------------------------------------------
        \23\ The missions are the Internet Protocol Routing in Space Joint
    Capability Technology Demonstration, which is to provide Internet
    routing onboard the satellite in order to provide users with increased
    speed and direct access to the Internet, eliminating the need for a
    ground-based teleport; and the Commercially Hosted Infrared Payload
    Flight Demonstration Program, which is an experiment designed to
    support next-generation infrared sensor development by placing a wide
    field of view infrared sensor on a commercial communications satellite.
    ---------------------------------------------------------------------------
        While hosted payloads and ride sharing hold promise for providing
    lower-cost access to space in the future, we found that there are a
    variety of challenges. For instance, government agencies that have
    traditionally managed their own space missions face cultural challenges
    in using hosted payload arrangements and in November 2010, we found
    that the DOD space community is highly risk averse to adopting
    technologies from commercial providers that are new to DOD.\24\ In
    addition, agency officials expressed concerns about using a commercial
    host for their payloads, noting that they would lose some control over
    their missions. DOD officials noted that their security and mission
    assurance requirements and processes may make integrating hosted
    payloads on commercial satellites more complicated to manage. Further,
    agency officials expressed concerns about scheduling launches and noted
    that commercial providers may not be flexible about changing launch
    dates if the instruments or satellites experience delays.
    ---------------------------------------------------------------------------
        \24\ See GAO, Space Acquisitions: Challenges in Commercializing
    Technologies Developed under the Small Business Innovation Research
    Program, GAO-11-21 (Washington, DC: Nov. 10, 2010).
    ---------------------------------------------------------------------------
        We reported that using hosted payloads and ride sharing are likely
    to reduce government launch costs and savings estimates reported to
    date are in the hundreds of millions of dollars over the life of the
    projects. However, we were unable to quantify the potential for further
    financial benefits because there is too limited a pool of available
    data. Once the government has collected more data and gained more
    experience in collaborating with commercial satellite vendors on ride
    sharing and hosted payloads, actual data on cost savings and cost
    avoidances should be more readily available.

    Satellite Control Operations
        DOD manages the Nation's defense satellites, which are worth at
    least $13.7 billion, via ground stations located around the world.
    These ground stations and supporting infrastructure perform, in part,
    the function of maintaining the health of the satellite and ensuring it
    stays in its proper orbit (activities collectively known as satellite
    control operations). Some of DOD's ground stations are linked together
    to form networks. The Air Force Satellite Control Network (AFSCN) is
    the largest of these networks. Based on the direction in a House Armed
    Services Committee Report for our review and discussions with defense
    committee staff, we reviewed the Air Force's satellite control
    operations and modernization efforts.\25\
    ---------------------------------------------------------------------------
        \25\ House of Representatives Armed Services Committee Report No.
    112-78, at 117 (2011), accompanying H.R. 1540, the bill for the
    National Defense Authorization Act for Fiscal Year 2012 (Pub. L. No.
    112-81 (2011)), directed GAO to assess DOD satellite operations
    modernization efforts and identify potential best practices and
    efficiencies. To fulfill this mandate, we delivered an oral briefing to
    the House and Senate Armed Services committees on February 6, 2012.
    ---------------------------------------------------------------------------
        We reported this month that DOD's satellite control networks are
    fragmented and potentially duplicative.\26\ Over the past decade, DOD
    has increasingly deployed standalone satellite control operations
    networks, which are designed to operate a single satellite system, as
    opposed to shared systems that can operate multiple kinds of
    satellites. Dedicated networks can offer many benefits to programs,
    including possible lower risks and customization for a particular
    program's needs. However, they can also be more costly and have led to
    a fragmented, and potentially duplicative, approach which requires more
    infrastructure and personnel than shared operations. We reported that,
    according to Air Force officials, DOD has not worked to move its
    current dedicated operations towards a shared satellite control
    network, which could better leverage DOD investments. We also reported
    that the AFSCN was undergoing modernization efforts, but these would
    not increase the network's capabilities. The efforts--budgeted at about
    $400 million over the next 5 years--primarily focus on sustaining the
    network at its current level of capability and do not apply a decade of
    research recommending more significant improvements to the AFSCN that
    would increase its capabilities.
    ---------------------------------------------------------------------------
        \26\ GAO, Satellite Control: Long-Term Planning and Adoption of
    Commercial Practices Could Improve DOD's Operations, GAO-13-315
    (Washington, DC: April 18, 2013).
    ---------------------------------------------------------------------------
        Additionally, we found that commercial practices like network
    interoperability, automation, and use of commercial off-the-shelf
    products have the potential to increase the efficiency and decrease
    costs of DOD satellite control operations. Both DOD and commercial
    officials we spoke to agreed that there were opportunities for DOD to
    increase efficiencies and lower costs through these practices. Numerous
    studies by DOD and other government groups have recommended
    implementing or considering these practices, but DOD has generally not
    incorporated them into DOD satellite control operations networks.
        Finally, we found that DOD faced barriers that complicate its
    ability to make improvements to its satellite control networks and
    adopt commercial practices. For example, DOD did not have a long-term
    plan for satellite control operations; DOD lacked reliable data on the
    costs of its current control networks and was unable to isolate
    satellite control costs from other expenses; there was no requirement
    for satellite programs to establish a business case for their chosen
    satellite control operations approach; and even if program managers
    wanted to make satellite control operations improvements, they did not
    have the autonomy to implement changes at the program level. We
    concluded that until DOD begins addressing these barriers, the
    department's ability to achieve significant improvements in satellite
    control operations capabilities would be hindered. We recommended that
    the Secretary of Defense direct future DOD satellite acquisition
    programs to determine a business case for proceeding with either a
    dedicated or shared network for that program's satellite control
    operations and develop a department-wide long-term plan for modernizing
    its AFSCN and any future shared networks and implementing commercial
    practices to improve DOD satellite control networks. DOD agreed with
    our recommendations.

           RECENT ACTIONS TAKEN TO ADDRESS SPACE ACQUISITION PROBLEMS

        Congress and DOD continue to take steps towards reforming the
    defense acquisition system to increase the likelihood that acquisition
    programs will succeed in meeting planned cost and schedule objectives.
    For example, in December 2012, we reported that the DOD had taken steps
    to implement fundamental Weapon Systems Acquisition Reform Act of 2009
    (the Reform Act) provisions, including those for approving acquisition
    strategies and better monitoring weapon acquisition
    programs.27, 28 The offices established by the Reform Act
    are in the process of developing, issuing, and implementing policies in
    response to the Reform Act's provisions. We reported that DOD has taken
    steps to:
    ---------------------------------------------------------------------------
        \27\ GAO, Weapons Acquisition Reform: Reform Act Is Helping DOD
    Acquisition Programs Reduce Risk, but Implementation Challenges Remain,
    GAO-13-103, (Washington DC: Dec. 14, 2012).
        \28\ Pub. L. No. 111-23, as amended by the Ike Skelton National
    Defense Authorization Act for Fiscal Year 2011, Pub. L. No. 111-383
    Sec. Sec. 813 and 1075, and the National Defense Authorization Act for
    Fiscal Year 2012, Pub. L. No. 112-81 Sec. Sec. 819 and 837; as
    implemented by DOD Directive-Type Memorandum (DTM) 09-027,
    ``Implementation of Weapon Systems Acquisition Reform Act of 2009''
    (Dec. 4, 2009, incorporating Change 4, Jan. 11, 2013). The Act, among
    other things: established high-level acquisition oversight offices and
    positions (including Cost Assessment and Program Evaluation, Program
    Assessment and Root Cause Analyses, Director of Developmental Test and
    Evaluation, and Director of Systems Engineering); required competitive
    prototyping as part of the technology development phase; required
    preliminary design review before the start of development; required
    competition throughout the acquisition lifecycle; and encouraged trade-
    offs among cost, schedule, and performance objectives at Milestone B to
    ensure affordability.

             develop policy and guidance to the military services
            for conducting work in their respective areas,
             approve acquisition documents prior to milestone
            reviews,
             monitor and assess weapon acquisition program
            activities on a consistent basis, and
             develop performance measures to assess acquisition
            program activities.

        Fundamentally, these Reform Act provisions should help (1) programs
    replace cost and schedule risk with knowledge and (2) set up more
    executable programs. Additionally, as part of its Better Buying Power
    initiative, DOD in November 2012 issued descriptions of 36 initiatives
    aimed at increasing productivity and efficiency in DOD
    acquisitions.\29\ DOD plans to solicit industry and stakeholder
    comments on these initiatives and plans to ultimately provide detailed
    requirements on implementing these initiatives to the acquisition
    workforce.
    ---------------------------------------------------------------------------
        \29\ DOD Memorandum, Better Buying Power 2.0: Continuing the
    Pursuit for Greater Efficiency and Productivity in Defense Spending,
    Washington, DC: Nov. 13, 2012.
    ---------------------------------------------------------------------------
        Further, in January 2013, Congress passed the National Defense
    Authorization Act of 2013, which required that DOD's Under Secretary of
    Defense for Acquisition, Technology and Logistics submit a report on
    schedule integration and funding for each major satellite acquisition
    program.\30\ The report must include information on the segments of the
    programs; the amount of funding approved for the program and for each
    segment that is necessary for full operational capability of the
    program; and the dates by which the program and each segment are
    anticipated to reach initial and full operational capability, among
    other items. If the program is considered to be non-integrated, DOD
    must submit the required report to Congress annually. Tracking the
    schedules of major satellite programs and the ground systems and user
    equipment necessary to utilize the satellites may help DOD synchronize
    its systems.
    ---------------------------------------------------------------------------
        \30\ Pub. L. No. 112-239, Sec. 911 (2013).
    ---------------------------------------------------------------------------
        Additionally, officials from the Space and Intelligence Office,
    within the Office of Secretary of Defense, told us that DOD has
    undertaken additional actions to improve space systems acquisitions
    since we last reported on its efforts in March 2012.\31\ These actions
    include chartering Defense Space Council architecture reviews in key
    space mission areas that are ongoing or completed, such as resilient
    protected, narrowband, and wideband satellite communications;
    environmental monitoring; overhead persistent infrared; and space
    control, according to these officials.\32\ The architecture reviews are
    to inform DOD's programming, budgeting, and prioritization for the
    space mission area. According to the officials, the Defense Space
    Council has brought a high-level focus on space issues through active
    senior-level participation in monthly meetings. DOD also participates
    in the newly re-formed Space Industrial Base Council, which is made up
    of senior level personnel at agencies across the Federal Government
    that develop space systems. The purpose of the council is to understand
    how DOD's and other agencies' acquisition strategies impact the space
    industrial base. Additionally, according to the officials, the Office
    of the Under Secretary of Defense for Acquisition, Technology and
    Logistics completed a major study on space acquisition reform to assess
    the root causes of poor performance in the space acquisition
    enterprise, focusing on the largest areas of cost growth. Furthermore,
    the officials stated that they are continuing efforts to buy blocks of
    AEHF and SBIRS satellites to realize savings that will be reinvested in
    high-priority research and development for space programs to mitigate
    the challenges associated with planned use of critical technologies
    when a satellite system is in the early stages of development. The
    officials stated that these block buys will also encourage stable
    production and help to achieve affordability targets DOD has set for
    the majority of the large, critical space programs. While these actions
    are encouraging, we have not evaluated their effectiveness.
    ---------------------------------------------------------------------------
        \31\ GAO, Space Acquisitions: DOD Faces Challenges in Fully
    Realizing Benefits of Satellite Acquisition Improvements, GAO-12-563T
    (Washington, DC: Mar. 21, 2012).
        \32\ In November 2010, the Deputy Secretary of Defense directed the
    creation of a Defense Space Council--chaired by the DOD Executive Agent
    for Space (currently the Under Secretary of the Air Force) and with
    representatives from across DOD--to inform, coordinate, and resolve
    space issues for DOD.
    ---------------------------------------------------------------------------
        The changes DOD has been making to leadership and oversight appear
    to be increasing senior management attention on space programs, but it
    is unclear whether the changes will be enough to overcome the problems
    we identified with fragmented leadership in the past. We have
    consistently found that the lack of a single authority for cross
    cutting missions, such as GPS or space situational awareness, has
    contributed to disconnects in the delivery of related systems as well
    as delays in the development of architectures and other tools important
    to balancing wants versus needs. Fragmented leadership has also been a
    contributing factor to other challenges we have noted in this
    statement--increasing launch service costs, synchronizing ground and
    satellite systems, and improving satellite operations. This condition
    persists. As part of our April 2013 annual report on reducing
    duplication, overlap, and fragmentation within the Federal Government,
    we reported that the administration has taken an initial step to
    improve interagency coordination, but has not fully addressed the
    issues of fragmented leadership and a lack of a single authority in
    overseeing the acquisition of space programs.\33\
    ---------------------------------------------------------------------------
        \33\ GAO, 2013 Annual Report: Actions Needed to Reduce
    Fragmentation, Overlap, and Duplication and Achieve Other Financial
    Benefits, GAO-13-279SP (Washington, DC: Apr. 9, 2013).
    ---------------------------------------------------------------------------
        Lastly, the Air Force and other offices within DOD are also
    considering different acquisition models for the future, including the
    use of hosted payloads as well as developing larger constellations of
    smaller, less-complex satellites that would require small, less-costly
    launch vehicles and offer more resilience in the face of growing
    threats to space assets. However, such a transition could also have
    risk and require significant changes in acquisition processes,
    requirements setting, organizational structures, and culture. The long-
    standing condition of fragmented leadership and the risk-averse culture
    of space could stand in the way of making such a change.
        In conclusion, DOD has made credible progress in stabilizing space
    programs. However, there are challenges still to be dealt with, such as
    disconnects between the delivery of satellites and their corresponding
    ground control systems and user equipment and the rising cost of
    launch. The ultimate challenge, however, will be preparing for the
    future, as budget constraints will require DOD to make tough tradeoff
    decisions in an environment where leadership is fragmented. We look
    forward to continuing to work with Congress and DOD in assessing both
    today and tomorrow's challenges in space acquisition and identifying
    actions that can be taken to help meet these challenges.
        Chairman Udall, Ranking Member Sessions, this completes my prepared
    statement. I would be happy to respond to any questions you and members
    of the subcommittee may have at this time.

                          CONTACTS AND ACKNOWLEDGMENTS

        For further information about this statement, please contact
    Cristina Chaplain at (202) 512-4841 or chaplainc@gao.gov. Contact
    points for our Offices of Congressional Relations and Public Affairs
    may be found on the last page of this statement. Individuals who made
    key contributions to this statement include Art Gallegos, Assistant
    Director; Erin Cohen; Rich Horiuchi; Jeff Sanders; Roxanna Sun; Bob
    Swierczek; and Marie Ahearn.

                              RELATED GAO PRODUCTS

        Satellite Control: Long-Term Planning and Adoption of Commercial
    Practices Could Improve DOD's Operations. GAO-13-315. (Washington, DC:
    April 18, 2013).
        2013 Annual Report: Actions Needed to Reduce Fragmentation,
    Overlap, and Duplication and Achieve Other Financial Benefits. GAO-13-
    279SP. (Washington, DC: April 9, 2013).
        Defense Acquisitions: Assessments of Selected Weapon Programs. GAO-
    13-294SP. (Washington, DC: March 28, 2013).
        High-Risk Series: An Update. GAO-13-283. (Washington, DC: February
    2013).
        Launch Services New Entrant Certification Guide. GAO-13-317R.
    (Washington, DC: February 7, 2013).
        Evolved Expendable Launch Vehicle: DOD Is Addressing Knowledge Gaps
    in Its New Acquisition Strategy. GAO-12-822. (Washington, DC: July 26,
    2012).
        Environmental Satellites: Focused Attention Needed to Mitigate
    Program Risks. GAO-12-841T. (Washington, DC: June 27, 2012).
        Polar-Orbiting Environmental Satellites: Changing Requirements,
    Technical Issues, and Looming Data Gaps Require Focused Attention. GAO-
    12-604. (Washington, DC: June 15, 2012).
        Missile Defense: Opportunities Exist to Strengthen Acquisitions by
    Reducing Concurrency and Improving Parts Quality. GAO-12-600T.
    (Washington, DC: April 25, 2012).
        Missile Defense: Opportunity Exists to Strengthen Acquisitions by
    Reducing Concurrency. GAO-12-486. (Washington, DC: April 20, 2012).
        Defense Acquisitions: Assessments of Selected Weapon Programs. GAO-
    12-400SP. (Washington, DC: March 29, 2012).
        Space Acquisitions: DOD Faces Challenges in Fully Realizing
    Benefits of Satellite Acquisition Improvements. GAO-12-563T.
    (Washington, DC: March 21, 2012). 2012 Annual Report: Opportunities to
    Reduce Duplication, Overlap and Fragmentation, Achieve Savings, and
    Enhance Revenue. 2012 Annual Report: Opportunities to Reduce
    Duplication, Overlap and Fragmentation, Achieve Savings, and Enhance
    Revenue. 2012 Annual Report: Opportunities to Reduce Duplication,
    Overlap and Fragmentation, Achieve Savings, and Enhance Revenue.
        Evolved Expendable Launch Vehicle: DOD Needs to Ensure New
    Acquisition Strategy Is Based on Sufficient Information. GAO-11-641.
    (Washington, DC: September 15, 2011).
        Space Research: Content and Coordination of Space Science and
    Technology Strategy Need to Be More Robust. GAO-11-722. (Washington,
    DC: July 19, 2011).
        Space and Missile Defense Acquisitions: Periodic Assessment Needed
    to Correct Parts Quality Problems in Major Programs. GAO-11-404.
    (Washington, DC: June 24, 2011).
        Space Acquisitions: DOD Delivering New Generations of Satellites,
    but Space System Acquisition Challenges Remain. GAO-11-590T.
    (Washington, DC: May 11, 2011).
        Space Acquisitions: Challenges in Commercializing Technologies
    Developed under the Small Business Innovation Research Program. GAO-11-
    21. (Washington, DC: November 10, 2010).
        Global Positioning System: Challenges in Sustaining and Upgrading
    Capabilities Persist. GAO-10-636. (Washington, DC: September 15, 2010).
        Space Acquisitions: DOD Poised to Enhance Space Capabilities but,
    Persistent Challenges Remain in Developing Space Systems. GAO-10-447T.
    (Washington, DC: March 10, 2010).
        Defense Acquisitions: Challenges in Aligning Space System
    Components. GAO-10-55. (Washington, DC: October 29, 2009).
        Space Acquisitions: Uncertainties in the Evolved Expendable Launch
    Vehicle Program Pose Management and Oversight Challenges. GAO-08-1039.
    (Washington, DC: September 26, 2008).
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                            CONGRESSIONAL RELATIONS

        Katherine Siggerud, Managing Director, siggerudk@gao.gov, (202)
    512-4400, U.S. Government Accountability Office, 441 G Street NW, Room
    7125, Washington, DC 20548

                                 PUBLIC AFFAIRS

        Chuck Young, Managing Director, youngc1@gao.gov, (202) 512-4800
    U.S. Government Accountability Office, 441 G Street NW, Room 7149
    Washington, DC 20548

        Senator Udall. Thank you for that summary.
        Let us go right to questions. We will do 5-minute rounds
    and I will recognize myself for the first 5 minutes.
        General Shelton, let us start with sequestration. You have
    had to cut back on a number of missions, including some missile
    warning and space surveillance operations. Can you describe
    which of your systems are affected by sequestration, and do you
    anticipate additional sequestration cutbacks toward the end of
    this fiscal year?
        General Shelton. Mr. Chairman, specifically there are two
    radars, missile warning radars, one of which is key to missile
    defense which we reduced the operating tempo on. In one case,
    we are operating at a lower power. In another case, we are
    operating for a reduced number of hours per day.
        In the case of the one that is necessary for missile
    defense, we have continued to operate that one at full power
    because of the threat from North Korea. If that posture is
    sustained through the rest of the fiscal year, that is another
    $5 million I need to find in my budget somewhere.
        We have taken down one-third of Space Fence receiver sites.
    So we have a reduced length of the Space Fence that goes across
    the southern United States.
        We have reduced the sustainment dollars that are being
    spent on the legacy Defense Satellite Communications System
    constellation, wideband communications satellites, which means
    we will be slower to respond to problems. We will not do as
    much trending analysis, that sort of thing.
        There are a host of other things across the command, but
    those are the big operational impacts, and then of course, the
    civilian furloughs that are upcoming.
        Senator Udall. Would you anticipate additional cutbacks if
    we do not, obviously, get our act together in the next fiscal
    year? But what I hear you saying is, yes, you see additional
    cutbacks.
        General Shelton. In the remainder of fiscal year 2013, I
    think we are on target with the exception of the $5 million I
    mentioned.
        Senator Udall. Okay.
        General Shelton. For fiscal year 2014, it all depends on
    the President's budget, of course, how that is enacted, whether
    or not we go into a Continuing Resolution, whether the Budget
    Control Act targets remain in place. All of that is yet to be
    determined.
        Senator Udall. Thanks for that further information.
        Let me turn to the EELV. Senator Sessions mentioned it in
    his remarks.
        As I understand it, you are working to bring new entrants
    into the medium and heavy lift launch market while assuring
    reliable access to space. Those two go hand-in-hand. I am
    interested in how you will structure the contracts to account
    for launch services, including mission assurance and vehicle
    integration, in addition to the acquisition of the rocket
    itself.
        As a follow-on, can you explain the difference in contracts
    between the launch providers in the current 50 core block buy
    and your plans for contracting in the next block buy past the
    current 50 cores?
        General Shelton. Yes, sir. Let me start with how we will
    work the leveling of the playing field, if you will.
        We have not fully determined how we will do that because
    there was a very efficient mechanism of providing launch
    capability. With a single provider, you can look at providing
    launch capability from both coasts. We even fly crews back and
    forth between the coasts because that is the more efficient way
    to do business. So we provide the launch pads. We provide the
    crews. We provide all that under a launch contract that just
    sustains that capability. It is a level of effort capability,
    and then we buy individual boosters.
        Trying to introduce new entrants with some sort of
    construct that is parallel so that there is not a competitive
    disadvantage, so to speak, for those new entrants is still a
    work in progress. We have not solved that yet, but we will. We
    will get to the place where we define what United Launch
    Alliance's (ULA) costs are versus a new entrant's costs so that
    they can compete head-to-head here in the future.
        We will soon contract for the 36 cores, another 14 cores to
    be competed. ULA will be able to compete against any new
    entrants that are certified by that time, and then we will be
    in good shape for determining the most efficient, most reliable
    access to space.
        Senator Udall. Let me slip a final question in to you,
    General, and this is in reference to Buckley Airfield and the
    space-based infrared satellites (SBIRS). My understanding is we
    are now fielding that next generation, but the ground system
    has been lagging behind the satellites. What are your timelines
    in regards to bringing the ground system online at Buckley?
        General Shelton. Senator, that has had a very checkered
    history. When we had a Nunn-McCurdy breach in 2005, we went
    after the satellite, spent more money on the satellite system
    than we did on the ground system. So we knew this problem would
    exist, that the ground system would lag behind. But by 2016, we
    will have all this put back together.
        We have full capability now to do what we need to do. It is
    in various locations, but it will all be combined in 2016.
        Senator Udall. Thank you.
        Senator Sessions.
        Senator Sessions. Thank you.
        General Shelton, your comments related to what Ms. Chaplain
    was saying about the delay between the launch of a satellite
    and the ground system capability, can Congress fund your
    programs that have complicated your ability to have that come
    out in an effective timing sequence?
        General Shelton. Yes, sir. I would say that there are two
    factors. One is ground systems and satellites are typically
    contracted for independently, and trying to manage the
    technical risk and the tempo of those programs independently is
    a challenge, trying to keep them on track going down the same
    schedule.
        There are also funding challenges. As we run into
    difficulties, as we run into just normal fiscal challenges and
    there are reductions in the budget, that can slip one program
    out of sync with the other. So the only way that I know of to
    pull this all back together is manage it in one big contract,
    and that has its own challenges. I do not think what we have
    done is necessarily wrong. Keeping them together in a funding
    and schedule perspective has been a challenge.
        Senator Sessions. I can see that. Sometimes DOD gets blamed
    for funding irregularities in Congress, and we should work
    really hard and you should keep us advised of extraordinary
    cost that might occur, particularly as we go through this
    sequestration dangerous period.
        General Formica, a question involving prompt global strike
    which is dependent on space-related technologies. During the
    past missile defense testimony, you have highlighted the need
    for defensive and offensive capabilities to address the
    ballistic missile threat. I remain hopeful that a prompt global
    strike capability will provide this necessary offensive
    capability.
        Can you provide a quick update on the progress of the
    advanced hypersonic weapon technology demonstration that is
    managed by your command? What are some of the strategic
    implications?
        I felt like we have made this much more difficult. I felt
    like we could have used the original plan that was to use
    existing submarine-launched missiles, but that turned into a
    complication. So now we are on a more expensive track. How do
    you see it coming out and the value of it?
        General Formica. Senator Sessions, thank you for the
    question.
        As I have testified in the past to the subcommittee, we
    were successful in our first test of the advanced hypersonic
    weapon (AHW) in November 2011. We attributed that success to
    the great work of Sandia Lab and our partnership with the
    Aviation Missile Research Development and Engineer Center at
    the technology campus at Redstone Arsenal in Huntsville with
    our engineers from our technical center. We provided that test
    under the leadership of OSD's prompt global strike program.
        It was successful. We believe that it has strategic and
    operational applications. Just from my narrow vantage point, I
    see it as a potential left-of-launch capability in the missile
    defense business. I spent yesterday at a missile defense
    symposium hosted by the Director of the Missile Defense Agency,
    and every one of the speakers talked about the need for
    offense-defense integration and attack ops to complement our
    missile defense capability. I see AHW has clearly a capability
    that has potential for application there.
        We continue to work closely with OSD as we move towards a
    second flight test in fiscal year 2014. In fact, the Director
    of the Technology Center and my civilian deputy are meeting
    with OSD by Mr. Holter just today, and that is one of the
    subjects. The technology continues to advance, and we think we
    are on track to get ready for that test next year, sir.
        Senator Sessions. Thank you very much.
        To all of you, I am concerned that the President's budget
    does not identify the impacts of the sequester in the fiscal
    year 2014 budget. If the sequester is not averted, how will it
    impact the budget? We have a $52 billion assumption more in the
    President's $526 billion DOD budget. I believe it is $526
    billion. But the current law is that the sequester takes
    effect, and if that takes effect, then the real budget you have
    to live with is $52 billion less. So I am really concerned
    about that.
        Senator McCain and I, and others, asked a lot of questions
    about why we were not planning for this in advance on the
    assumption that it might happen. As a result, no serious
    planning was done, and you have had to make cuts in a very
    rapid situation.
        The sequester is in law, signed by the President, voted for
    by Congress. We are not seeing the kind of movement I would
    like to see if we can avoid it. I am worried about that.
        That is past my time. I will just leave it at that right
    now and just say that it is a matter of all of our concern. I
    know Senator Udall and we all care about it, but we are not
    making a lot of progress. I am afraid you definitely need to be
    seriously figuring how you are going to operate with less money
    than the President's budget assumes.
        Senator Udall. Thank you, Senator Sessions.
        Senator Fischer.
        Senator Fischer. Thank you, Chairman Udall and Ranking
    Member Sessions. It is good to be with you again today.
        Thank you for being here and being willing to answer some
    questions that we have for you.
        General Shelton, I understand that the Air Force is
    exploring sensor disaggregation and hosting sensors on less
    expensive commercial satellites. Are you confident that that
    approach is going to work?
        General Shelton. Senator, we are actively studying that. It
    is not something where we have wholesale decided, but part of
    the savings that we have garnered from new acquisition
    approaches is being plowed into what we call space
    modernization initiative programs for advanced extremely high
    frequency, for SBIRS, and for Global Positioning System. That
    money goes to architectural studies to look at exactly what you
    are talking about. We will be a lot smarter by the summer.
    Right now, it is a bit in the study phase, but I would tell you
    from everything that I have seen so far, there is no reason not
    to be confident.
        Senator Fischer. How long have you been studying it?
        General Shelton. About 6 months now. We are just starting
    to scratch the surface of this.
        We do have a hosted payload on orbit right now that is
    doing extremely well and is a trail-blazing effort. So that is
    part of the confidence, but also as we look at trying to
    establish resilience in our most important constellations, we
    know that we have to do something different. Whether that is
    disaggregation in terms of more numbers of satellites on orbit
    to make the targeting problem more difficult for an adversary,
    survivability concerns just from a premature failure point of
    view, all those sorts of things we are bringing into this
    equation to try to understand what is the best thing for the
    future.
        Senator Fischer. I would assume that if you do head in that
    direction, more satellites that you would be putting up would
    be less expensive and maybe less capable than the ones that you
    currently have up?
        General Shelton. In aggregate, we are not looking to reduce
    capability. As you look at each individual satellite, it would
    be less complex. It would be based on very mature technology
    and it would be smaller. So in theory--and again, part of the
    study effort--we think it would be less expensive to launch,
    less expensive to build, and less expensive to operate.
        Senator Fischer. Thank you.
        Secretary Loverro, do you have anything to add on that?
        Mr. Loverro. Senator Fischer, I think General Shelton has
    summed it up very well.
        Disaggregation we view as one piece of the larger
    resiliency equation. There is no question that putting all of
    your eggs in a single basket, as we have in some of our
    satellite systems to date, does not present a resilient front
    to threats or even unintended consequences that we might see in
    the future.
        There is certainly a large body of evidence that
    disaggregation can help us in this way, but it is not going to
    be the only thing that we use. Sometimes disaggregation is
    thought of as simply hosting a sensor on a commercial
    satellite. Disaggregation means allowing other nations to
    provide capability.
        In a meeting a couple of days ago, we were talking about
    weather, which General Shelton and his team are running an
    analysis of alternatives on right now. It is interesting to
    note that our weather capabilities are comprised of
    contributions from well over 100 different sensors, and when
    you go ask the scientists who sit in the weather system which
    satellite contributes what piece of the weather, they cannot
    tell you. If the scientists who sit there cannot tell you,
    imagine the complexity an adversary would have in trying to
    eliminate our weather capability because they cannot tell
    either. They would have to either target 100 different sensors
    which would be cost-prohibitive, or they stop trying and look
    at other ways to deny that. Now, not that we are interested in
    having them look at other ways. But complicating the enemy's
    calculus is an absolute hallmark of the resiliency discussion
    that we have been having.
        Senator Fischer. Thank you.
        Ms. Chaplain, have you looked at that at all through GAO?
    Do you know will it be less expensive? Have you looked at
    costs? Are you working on this? Are you in on the study?
        Ms. Chaplain. Yes. We have several studies that will be
    covering this issue. You will see them later this year. But
    these issues have been talked about in previous work, and I
    would say our work confirms these theoretical benefits. If you
    build satellites that are more executable, they are smaller,
    the timeframes are going to be shorter, the launch costs could
    go down.
        But there are a couple of cautions here. Like even
    transitioning to a disaggregated scenario, costs could go up in
    the short term because you will need an overlap between the
    current structure and where you are going, and there could be
    startup costs to put a new infrastructure in place to support
    this different kind of architecture.
        Then there are some other issues that just are risks, I
    think, that are associated with this kind of architecture.
    Interoperability. You have more satellites out there that have
    to work together. It is not just all on one package. Data
    fusion. That is where you are going to get your capability by
    bringing all these thing together. Both those things alone are
    not easy to achieve and have been difficult to achieve in the
    past. Modernizing control systems is another issue. Developing
    common interfaces and common standards. There has been slow
    progress on that front, and just the general broader issue of
    leadership fragmentation. Right now, it is difficult. You can
    see just coordinating user assets and ground systems and the
    satellite to deliver at one time--that is pretty difficult. If
    you get into a scenario where you have a lot of----
        Senator Fischer. I think you said it takes years sometimes
    before it is coordinated?
        Ms. Chaplain. Yes. So I think the fragmentation of
    leadership needs to be addressed to make this scenario work.
        Senator Fischer. Thank you very much.
        Thank you, Mr. Chairman.
        Senator Udall. Thank you, Senator Fischer.
        General Formica, let me turn to you. In the spirit of
    Senator Sessions' comment and also the question I asked to
    General Shelton, tell us, if you can, briefly how sequestration
    is affecting your operational capability.
        General Formica. Thank you, Mr. Chairman, for that
    question.
        Of course, sequestration and the fiscal realities impact
    all of our operations. We were somewhat relieved in our fiscal
    situation in fiscal year 2013 with the enactment of a fiscal
    year 2013 appropriation. That has taken some pressure off this
    year. I would add that the Army prioritized space and missile
    defense programs very high in its prioritization list. So as we
    were working our way through the impacts of the fiscal year
    2013 budget, I think space and missile defense was accorded
    appropriate consideration by the Army.
        That said, as Senator Sessions indicated, our fiscal year
    2014 budget request does not yet reflect sequestration. We know
    that there will be some degradation from that budget request.
        I anticipate two primary challenges to our program based on
    sequestration.
        First, we are already delaying some of our training
    courses. I expect training readiness to be challenged in fiscal
    year 2014.
        Then the second, as General Shelton mentioned in his
    opening statement, the impact on the civilian workforce. I am
    concerned about that, frankly, in four different areas.
        First, you have the threat of a furlough beginning in June,
    which has caused angst in the force, and if it actually is
    executed will cause hardships to our civilians and will
    challenge our ability to meet our day-to-day operations.
        Second, we have already implemented a hiring freeze, and
    that hiring freeze means that we are creating gaps in our
    civilian workforce because people continue to retire, move, get
    sick, and those gaps are not being backfilled because of the
    hiring freeze.
        Third, we have eliminated our temporary and term civilians,
    and that means, in my view, the next generation of public
    servants that we are trying to develop are no longer being
    nurtured at the entry level.
        Then fourth and last, like with our military training
    programs, we have taken a reduction in the development of our
    civilian workforce and the dollars that are afforded to that.
    We are going to take some impact in the ability to continue to
    train the civilian workforce that we have.
        Senator Udall. Thank you for that update.
        Let us turn to nanosatellites (nanosat). Senator Fischer
    talked with General Shelton about the Air Force's interest in
    this. Your command is credited with pioneering a number of low-
    cost, small nanosat programs such as the Kestrel Eye, which is
    an imaging satellite. Can you give us a perspective on where
    those programs are headed in the Army? Particularly, I wanted
    your thoughts--the Operational Responsive Space (ORS) program
    was chartered to pioneer many of these initiatives, and I know
    it was popular among its customers. Do you still value the
    overall program?
        General Formica. Thank you, Mr. Chairman.
        We do value the ORS program, and the warfighter continues
    to benefit from the space capabilities that they are providing.
        That said, we see nanosat technology as a complementary
    space capability, and we are, in fact, developing that
    technology as part of a DOD joint technology capability
    development program, approved by DOD and funded by Congress.
    That nanosat technology is principally two different
    satellites, one for beyond-line-of-sight communications and one
    for imagery, the Kestrel Eye, as you mentioned. We are in the
    middle of that capability demonstration. We continue to make
    very good advances with the technology and are learning a lot
    from our engineering efforts. The Joint Capabilities Technology
    Demonstrations (JCTD) are, in fact, on track. We expect to be
    able to launch satellites in both categories, both from the
    communications satellite SNAP and Kestrel Eye next year.
        Where they are going is at the end of the JCTD, there will
    be a joint military utility assessment, and we think that that
    is the time for DOD to assess the military utility of this
    technology and then to have a cost-benefit discussion as to
    where we go. My expectation is that if the technology works
    correctly, then we would advocate for it to ultimately become a
    program of record. But the time is not right yet for that. We
    need the joint military utility assessment to have that
    discussion.
        Senator Udall. Thank you for that update.
        Let me turn to Senator Sessions.
        Senator Sessions. Generals Shelton and Formica, earlier
    this month President Vladimir Putin announced his intention to
    build a system to neutralize space weapons. According to the
    press reports, Deputy Prime Minister Dmitry Rogozin has said
    that Russia will,``have the technical means by 2030 to
    counteract threats from space by other countries.''
        Do we know what the Russians are referring to there? Do you
    believe we require similar capabilities, and do you believe
    Russian efforts being referred to are defensive or offensive in
    nature?
        General Shelton. Senator, I do not know specifically what
    might be talked about there. In a different forum, we could
    talk about some other capabilities.
        Senator Sessions. There could be some areas of
    classification that we should not talk about, I certainly
    acknowledge.
        General Shelton. But suffice it to say, there are nations--
    and I will just use the plural here--who are developing
    capabilities to counter our advantages in space, and we are
    doing what we need to do to address that.
        Senator Sessions. General Formica, would you like to
    comment on that?
        General Formica. I think General Shelton covered it,
    Senator Sessions. Thank you.
        But, obviously, we would be concerned about any of those
    capabilities because we are fully dependent on space as we
    conduct operations on the ground.
        Senator Sessions. Would you say, General Shelton, that the
    need for counterspace capabilities are increasing rather than
    decreasing today?
        General Shelton. I think everything that we have seen from
    a policy perspective, from an intelligence perspective, would
    lead us to believe that counterspace is a growing area for all
    of us.
        Senator Sessions. Potential adversaries seem to be
    advancing their capabilities. Would you agree?
        General Shelton. I do.
        Senator Sessions. The ORS concept--for a second year in a
    row, the budget request proposes a termination of the
    congressionally-established ORS Office. The budget proposes a
    termination of that.
        How does DOD intend to fulfill short-term capability gaps
    quickly and inexpensively in the future? Now, I ask any of you.
    Maybe, Secretary Loverro, you want to start to comment on that.
        Mr. Loverro. Thank you, Senator.
        As you have articulated, the budget has zeroed the ORS
    program again.
        Clearly, though, we received your message in the National
    Defense Authorization Act that passed this year, and DOD has
    taken steps to go ahead and establish both the executive
    committee called for in that Act and to move the ORS Office
    under the Space and Missile Systems Center under Air Force
    Space Command, reporting to General Shelton. So while we
    recognize that the budget reality that is in the President's
    budget does not reflect the direction that we have gotten from
    you, we do recognize that we do have to figure out how to go
    ahead and best manage ORS.
        I think that is the key that we will be working on through
    the executive committee, is how do we add ORS to the host of
    capabilities I spoke with Senator Fischer about in terms of
    providing the resilience and reconstitution that we need in the
    future.
        I will let General Shelton talk to any specifics beyond
    that.
        Senator Sessions. Thank you.
        General Shelton, we have talked about it for a long time.
    We thought it was a way to provide redundant, immediate, fairly
    quick response to a challenging situation, and we thought it
    would result in less expense. So do you have any comments on
    the Secretary's statements?
        General Shelton. Yes, sir. This is just a matter of how
    much budget we have. What we are trying to do is inculcate the
    ORS lessons learned into the mainstream programs at the Space
    and Missiles Systems Center. Rather than having a dedicated
    office with a dedicated budget, we take those lessons learned
    and the disaggregated concepts, the hosted payload concepts,
    all those kinds of things are things that we have learned from
    our ORS experiences. It is mainstreaming what we learned.
        Senator Sessions. Thank you.
        Senator Udall. Senator Fischer?
        Senator Fischer. Thank you, Mr. Chairman and Ranking Member
    Sessions.
        General Shelton, if I can just follow up on Senator
    Sessions' comments here.
        So we have zeroed out the budget. I think it is by 2016. Is
    that correct?
        General Shelton. Are you talking about counterspace, ma'am?
        Senator Fischer. Yes.
        General Shelton. Yes.
        Senator Fischer. You have said that it is going to be
    absorbed by other areas of the budget?
        General Shelton. No, ma'am. By 2016, the budget that you
    see has now gone into a sustainment program. It is in operation
    and maintenance funds, not in procurement funds. We have
    completed the procurement of that particular capability.
        Senator Fischer. So you believe that we do not need to
    expand or grow in that area anymore. We are just at operation
    and maintenance. Right?
        General Shelton. Ma'am, we would have to take this into
    another forum.
        Senator Fischer. Can you say what other forum at this
    point, or is that part of----
        General Shelton. It is beyond the classification of this
    session.
        Senator Fischer. Okay, thank you.
        How would that compare, what we are now looking at doing in
    the future past 2016, to what other nations are doing--say, the
    Chinese--and the amount of money that they are throwing at
    these programs?
        General Shelton. Again, I am a little bit hamstrung here.
        Senator Fischer. Okay.
        General Shelton. I would love to sit down and talk to you
    in a closed session.
        Senator Fischer. Okay. I appreciate that. I am sorry that I
    headed in that direction. We will talk again. I will try
    another track. Okay?
        You have command over both the Air Force's cyber and space
    forces, and I understand that you are going to be required to
    generate a large number of airmen in order to meet U.S. Cyber
    Command (CYBERCOM) needs. Is that correct?
        General Shelton. That is true. It is a little over 1,200.
        Senator Fischer. Have you identified a path forward towards
    providing for these forces, and do you have any concerns that
    cyber requirements may draw resources from your space
    requirements?
        General Shelton. We have not fully settled on exactly how
    the Air Force is going to fund those positions. It is going to
    happen. A little bit of an arm wrestling contest----
        Senator Fischer. It is going to happen or does it have to
    happen?
        General Shelton. It is direction to the Air Force. OSD
    said, Air Force, this is your share of the overall CYBERCOM
    manpower for specific purposes, and so the Air Force has
    direction to fund those. So there is no doubt in my mind. We
    will fund those. The precise mechanism for that has yet to be
    determined.
        It will not come at the expense of space capability,
    though. It will not be a trade that is just given to me to
    fund, find this somewhere within your resources. It is an Air
    Force-wide problem.
        Senator Fischer. When you take into consideration the
    sequester and the cuts that you will be looking at, and when
    you look at the budget that was presented, which did not take
    into consideration the sequester, how are you going to make
    this work? Do you not have to take it from somewhere?
        General Shelton. It does. It has to come inside the top
    line of authorized manpower. It has to come from somewhere, and
    that will be the challenge that will occur at the Air Force
    corporate level, if you will, to try to determine where we find
    1,200 positions to fund those cyber positions.
        Senator Fischer. But you are saying your preference would
    be not to take it from space?
        General Shelton. Not only my preference, but I am a strong
    advocate of not doing that.
        Senator Fischer. Thank you very much.
        Thank you, Mr. Chairman.
        Senator Udall. Senator Fischer, that is an important line
    of questioning. In the last two NDAAs, I have explored what we
    could do to think of this as not a zero sum game, but maybe we
    and our teams could work together and work with the General and
    others because both functions are really crucial. But we do not
    want to rob Peter to pay Paul. I appreciate the General's wry
    smile in saying he is not going to give any quarter, given his
    responsibilities, but he knows the importance of cyber.
        General Formica, let me come back with one final question
    for you. Kwajalein, an important little place out in the
    Pacific. Can you talk about how the site supports space
    situational awareness? It is your responsibility, as you well
    know.
        General Formica. Yes, Mr. Chairman. Thank you.
        Kwajalein, as you know from your question, is a strategic
    asset out in the middle of the South Pacific. The longer I have
    been in this command, the more I have come to appreciate the
    importance of Kwajalein, and therefore, the role I play as the
    senior commander there is one of the most important duties that
    I have actually. Kwajalein is a host to the Reagan Test Site,
    which is a national class test that host tests for missile
    defense, intercontinental ballistic missiles, and other tests
    that require the kind of space that Kwajalein Atoll affords.
        We have very sophisticated radar capability out there, and
    those radars, when they are not being used for test, are made
    available for space situational awareness and to meet missions
    in support of U.S. Strategic Command (STRATCOM) and in direct
    support of the Joint Functional Component Command for space,
    which is subordinate to STRATCOM.
        We provide space object identification and space
    situational awareness from those radars. We are strategically
    located in the Pacific to identify space launch, and we soon
    will be the home for the Air Force's Space Fence.
        Senator Udall. Thank you for that update. You do underline
    the importance of that jewel of an asset.
        Secretary Loverro, let me turn to you and we will talk
    space policy here. I understand you are new to your job, but
    that does not mean you are new to the topic. You come from the
    Air Force Space Command, Space and Missile Systems Center.
    Welcome. Thank you for, again, your willingness to serve.
        What actions is DOD taking to ensure that we support some
    sort of rules-of-the-road, so to speak, with respect to space
    navigation between countries?
        Mr. Loverro. Mr. Chairman, DOD has multiple activities
    ongoing in that regard. One was just mentioned by General
    Formica in terms of space situational awareness. Obviously,
    space situational awareness is fundamental to understanding
    what is going on in space. The Space Fence, which Air Force
    Space Command is going to put on Kwajalein, is a critical
    asset. But just as critical is our cooperative assets that we
    are looking at putting into Australia, the C-band radar that
    Air Force Space Command will be placing down there under an
    allied agreement. Those kinds of activities are firmly
    supported by DOD and are foundational to anything we do in
    terms of space traffic management and the freedom of space.
        But it is more than just the technical capabilities. It is
    the agreement on what the rules-of-the-road are for space, how
    do you operate in space. I think we all understand that in any
    economic and commerce sphere, there are rules of operations,
    whether that is rules of the sea, rules of the airways. So
    rules of space we view in very much the same way, not in a
    legally binding way, not in a way that will constrain U.S.
    national security. In fact, one of the reasons DOD is
    intimately involved in this is to make sure we do not constrain
    national security as we move forward. Yet, we all recognize
    that good rules allow us to go ahead and detect irresponsible
    behavior on the part of others.
        So we are engaged with both the European Union on the
    international code of conduct. We have a member from the
    Department of State, Secretary Rose, and the group of
    government experts to go ahead and talk about what should be
    the rules. Obviously, we remain very committed to working with
    our allies through multiple mechanisms to establish those
    rules. I think that covers most of it.
        Senator Udall. That is very helpful. You anticipated my
    question about Australia. That is important to get that on the
    record.
        Let me follow on Senator Sessions' comments when it comes
    to those who are developing--we will put it in a politic way--
    an ability to deny access to space. What is our country's and
    DOD's policy when it comes to ensuring that we have safe access
    to space and the disaggregating of our assets we have been
    discussing? Does that help ensure the survivability of those
    space assets?
        Mr. Loverro. I absolutely believe that it does. Our policy
    that was published in 2010, both the National Space Policy and
    the National Security Policy that followed in 2011, all
    recognize that not only do we garner great benefit from space,
    but that we have an inherent right of protection in space.
        So there will be a mixture of capabilities both from a
    protective standpoint, a resilience standpoint that we look to
    put into our systems in the future and offensive actions we may
    need to take in order to assure that we are not threatened in
    our space capabilities. As General Shelton has already
    indicated, a lot of that we cannot talk about in this session
    here, but we absolutely believe our policy supports all of
    those actions.
        Senator Udall. We are going to work on, what I hear you
    saying, the political, diplomatic, economic fronts, but we are
    also not going to be shy about developing our defensive
    capabilities, and there is no reason we should not develop
    offensive capabilities as well to show we are serious. We are
    going to be tough, but we will be smart as well. We will hold
    out a hand, but we are also not going to have our access
    limited.
        Mr. Loverro. Yes. Just like in any other area of warfare,
    we understand that it takes both sides of protection and
    offensive capability to ensure that the warfighters get what
    they need.
        Senator Udall. Thank you for that.
        Senator Sessions.
        Senator Sessions. Thank you all. It is difficult to
    overstate the importance of space and missile capability to our
    modern day defense capability. It is just so critical to it.
        Mr. Secretary, I will just ask you one final question from
    me. The history of warfare has shown that virtually every code,
    every security system gets penetrated at some point or another.
    We are so dependent on communication through satellite guide
    and other things. We have the leaks and some private somewhere
    is intercepting the communications from the Ambassador to
    Russia to the Secretary of State. It is just hard to believe
    that that kind of thing could happen.
        Do you believe we have given sufficient concern to the
    ability of adversaries to intercept and decode communications
    that we have?
        Mr. Loverro. Senator, I think if you are asking, if I
    understand the question, as we decide how do we go ahead and
    host our satellite communications capabilities, do we recognize
    the potential vulnerabilities if we use satellite capabilities
    from other nations--is that the question?
        Senator Sessions. I am also thinking about just the basic
    communications system in which we send information, data
    through satellites that could be intercepted giving our
    adversaries valuable information we would not want to be made
    public.
        Mr. Loverro. Understood. Absolutely. In normal departmental
    policy, all of our satellite communications are encrypted to
    the best of our ability. Now, I will readily admit there are
    some places that that has not been able to be implemented, but
    that is certainly where we are going.
        There are efforts underway within DOD to provide more
    protective capability to our warfighters. Some of the space
    modernization investments that General Shelton spoke about are
    aimed directly at that problem because we recognize the need
    for wideband communications that are protected is growing
    quickly, especially with the modern war systems that we have
    today, especially as we adopt a more continental United States-
    based capability for many of these controls. So we are very
    focused on assuring that we can provide the protective
    communications in the future. Those are not always available
    everywhere in the world today that we fight, but that is our
    bias.
        Senator Sessions. There is a lot of technology out there
    and we have a lot of penetration of all kinds of systems that
    are occurring today, and cybersecurity has become a huge issue
    for us. I think it would be a mistake, as we spend large
    amounts of money developing our systems, if we do not give
    sufficient attention to security.
        Thank you very much.
        Senator Udall. Thank you, Senator Sessions.
        I am going to exercise my prerogative, Senator Fischer,
    with her understanding, to bring this portion of the hearing to
    a conclusion.
        Although I did want to thank Ms. Chaplain for your insights
    when Senator Fischer asked questions. We will direct some
    additional questions to you particularly on the FAB-T
    situation. I know you have some real expertise there.
        I did not want to leave the Navy with the impression that
    they either were forgotten or they were doing a perfect job. So
    I did want to ask Secretary Zangardi a brief question about the
    MUOS system. It is going to replace the so-called Ultra High
    Frequency follow-on system, which is known as UFO. How fragile
    is the current UFO system and will the MUOS system be able to
    backstop the UFO as it ages out?
        Dr. Zangardi. Yes, sir. Right now, MUOS-1 contains two
    packages. It contains a WCDMA package and a legacy UFO package.
    When UFO number 4 failed last year, we activated operationally
    the UHF package on board MUOS-1. It has provided backstop.
        But let me back up a little bit more into this question.
    The UFO constellation provides a UHF communications capability
    to the joint warfighter. The Navy plans on meeting the joint
    staff legacy UHF requirement until MUOS full operational
    capability which occurs in 2017. Statistical reliability
    analysis has shown that the current UFO constellation plus the
    legacy payloads and other mitigating efforts will maintain the
    legacy UHF requirements for satellite communications through
    2017 and probably beyond 2018. Other mitigation efforts include
    a host of payloads and leased satellite capability.
        Presently right now, we have an additional 111 channels
    above the capability, which is the rough equivalent of about
    three UFO satellites. We believe that despite the age or
    fragility of the existing UFO constellation, we have sufficient
    capability to backstop.
        Senator Udall. Thank you for that update. We will ask some
    follow-on questions. Again, for the record, I want it to be
    shown that Senator Fischer and I have a lot of sailors in our
    States. We appreciate what the Navy does. In fact, Admiral
    Winnefeld headed U.S. Northern Command before he moved over to
    the Joint Chiefs. Thank you for what you do. We would not be
    anywhere without the Navy corpsmen and corpswomen. Thank you
    for being here today.
        Thanks to the entire panel. We will excuse you and we will
    ask the second panel to join us. [Pause.]
        Gentlemen, welcome. We will go right to, if it is okay with
    all of you, a 1- to 2-minute statement, and then we will move
    right to questions.
        Major General Wheeler has joined us. Major General, the
    floor is yours.

     STATEMENT OF MAJ. GEN. ROBERT E. WHEELER, USAF, DEPUTY CHIEF
     INFORMATION OFFICER FOR COMMAND, CONTROL, COMMUNICATIONS, AND
     COMPUTERS AND INFORMATION INFRASTRUCTURE CAPABILITIES; OFFICE
                      OF THE SECRETARY OF DEFENSE

        General Wheeler. Senator Udall, it is good to be back here
    again. I appreciate your having me here today. I will be quick
    this morning. I have also brought my full statement, which is
    sitting out in the other room there that goes into much more
    depth.
        Senator Udall. We will put it in the record, without
    objection. Thank you.
        General Wheeler. Sir, thank you for the opportunity today
    to testify before the subcommittee regarding the vital
    importance of scarce radio frequency spectrum to U.S. national
    defense capabilities, the economy, and consumers.
        I will make this statement short, highlighting the key
    points from my full formal written statement that I have
    already provided for the record, and leave the rest of the time
    for questions, as we have discussed.
        Spectrum is a critical enabler that ensures information is
    dependably available to train our military forces and ensure
    safe and successful mission accomplishment. Within DOD, we
    understand that the strength of our Nation is rooted in the
    strength of our economy. In that regard, we remain fully
    committed in support of the national economic and security
    goals of the President's 500 megahertz initiative, the
    implementation of more effective and efficient use of this
    finite radio spectrum and the development of solutions to meet
    these goals is equally important to both national security and
    economic goals. We understand that.
        DOD continues to cooperatively work with the National
    Telecommunications and Information Administration (NTIA), other
    administrative partners, and industry to develop the
    information required to ensure balanced spectrum repurposing
    decisions that are technically sound and operationally viable
    from a mission perspective.
        The ability to operate spectrum-dependent national security
    capabilities without causing and receiving harmful
    interference, while understanding the critical need of our
    Nation's economy, remains paramount to DOD. DOD also recognizes
    the importance of the growing need for spectrum for economic
    development, technological innovation, and consumer demand.
    However, any repurposing decisions made without proper
    technical, operational, and cost impact assessment could
    preempt critical requirements and could cause adverse impact to
    military training operations and readiness. No spectrum
    repurposing decision is without risk, but risks can and must be
    managed. Together we will develop long-term solutions to
    achieving a balance between national security spectrum
    requirements and meeting the expanding demand of commercial
    broadband services.
        Thank you, sir.
        [The prepared statement of General Wheeler follows:]

            Prepared Statement by Maj. Gen. Robert E. Wheeler, USAF

                                  INTRODUCTION

        Good morning Mr. Chairmen and distinguished subcommittee members.
    Thank you for the opportunity to testify before the Subcommittee
    regarding the vital importance of scarce radio frequency spectrum to
    U.S. national defense capabilities, the economy, and consumers. My name
    is Major General Robert Wheeler and I am the Deputy Chief Information
    Officer for Command, Control, Communications, and Computers (C4) and
    Information Infrastructure Capabilities. My testimony today will focus
    on the importance of spectrum to the Department of Defense (DOD) in
    ensuring that our warfighters and mission partners have the critical
    capabilities they need to prepare for and execute the missions assigned
    to them by the Commander in Chief as safely and effectively as
    possible.

                         IMPORTANCE OF SPECTRUM TO DOD

        The DOD remains fully committed in support of the national economic
    and security goals of the President's 500 MHz initiative to make
    spectrum available for commercial broadband use, the implementation of
    more effective and efficient use of this finite radio-frequency
    spectrum and the development of solutions to meet these goals while
    ensuring national security and other Federal capabilities are
    preserved. Spectrum has become increasingly important to the
    Department's missions, consumers, and the economy of the Nation as a
    whole.
        Military spectrum requirements are diverse and complex given the
    variety of different missions the Department must support around the
    world. DOD uses spectrum for command and control operations,
    communications, intelligence, surveillance, and target acquisition, on
    land, at sea, in the air and in space. In the United States, our
    systems utilize spectrum in order to properly train as we must fight.
        For example, the Air Combat Training System (ACTS) uses the
    federally allocated and regulated 1755-1850 MHz band to support combat
    readiness pilot certification through robust United States aircrew
    training along with crews from allied countries. The system is used at
    training ranges and bases across the United States with over 10,000
    training flights per month. ACTS is also used for 10-12 large Carrier
    Strike Group exercises annually, where it is used 24 by 7 for up to 6
    weeks in duration.
        In short, spectrum is the critical enabler that ensures information
    is dependably available to train our forces and ensure safe and
    successful mission accomplishment.
        The Department, like the rest of the country and world, also has
    growing requirements resulting from our increasing reliance on
    spectrum-dependent technologies. An example is the Department's use of
    unmanned aerial systems (UAS) requires spectrum to process volumes of
    critical intelligence, surveillance, and reconnaissance data in support
    of our missions in military areas of operation. Our inventory of UAS
    platforms has increased from 167 in 2002 to nearly 7,500 in 2010. This
    has resulted in a dramatic increase in UAS use and training
    requirements, and consequently an increase in demand for spectrum to
    adequately satisfy those missions.
        While the Department critically depends on wireless and information
    technology that require spectrum, DOD is cognizant of the scarcity of
    this resource and its importance to the economic well-being of our
    Nation. When referencing the U.S. Frequency Allocation chart, and using
    the strict interpretation of the allocations, one will find in spectrum
    between 225 and 3,700 MHz 18 percent Federal exclusive use, 33 percent
    non-Federal exclusive use, and 49 percent Federal/non-Federal shared
    use. When you apply real-world factors for how spectrum is actually
    used within the United States, these numbers will vary, but they do
    illustrate the fact that there is not a significant gap between the
    amount of spectrum allocated to Federal and non-Federal/commercial
    users. Even within spectrum allocated for exclusive Federal use, the
    majority of the spectrum is shared between DOD and all of the other
    Federal agencies, across a wide array of systems, performing a
    multitude of varied missions, often with very different technologies.
        As noted above, the Department also recognizes the importance of
    the growing needs for spectrum for economic development, technology
    innovation and consumer services. Within the DOD, we understand that
    the strength of our Nation is rooted in the strength of our economy in
    harmony with the strength of our national security. We are dependent on
    industry for innovative products that can be used for national
    security.
        The Department continues to work with the National
    Telecommunications and Information Administration (NTIA), other
    administration partners, and industry to develop the information
    required to ensure balanced spectrum repurposing decisions that are
    technically sound and operationally viable from a mission perspective.
    The results so far have been promising. For instance, in support of the
    President's 500 MHz initiative, the initial frequency band assessment,
    commonly referred to as the ``fast track study,'' resulted in
    arrangements to geographically share the 1695-1710 and 3550-3650 MHz
    bands. The reallocation feasibility assessment of the 1755-1850 MHz
    band also marks another important step. NTIA concluded in its
    assessment report that while there are significant challenges yet to
    overcome, it is possible to repurpose all 95 MHz of spectrum, based on
    the conditions outlined in the report. DOD is fully engaged in
    addressing these challenges, by closely working with industry to
    evaluate sharing possibilities.
        In general, in order to avoid critical mission impacts and maintain
    comparable capability, there are three things the DOD requires if we
    are to relocate our systems out of spectrum to be repurposed for
    wireless broadband; cost reimbursement, sufficient time, and, if
    necessary, alternate spectrum with comparable technical characteristics
    to restore lost capabilities (note Public Law 106-65).
        Existing statutes provide for relocation and sharing costs to be
    reimbursed through the Spectrum Relocation Fund, using auction revenue.
    Auction revenues by law must meet 110 percent of the estimated Federal
    relocation costs for the auction to go forward. During the Department's
    study of the 1755-1850 MHz band relocation feasibility, the Service
    Cost Agencies led the development of cost estimates for their
    respective systems, while the entire process was led and overseen by
    the Department's independent Cost Assessment and Program Evaluation
    (CAPE) organization to ensure consistency in methodologies and
    assumptions. The costs to modify or replace existing systems to use the
    identified comparable spectrum (e.g., 2025-2110 MHz, 5150-5250 MHz)
    were included in the analysis. NTIA report shows total cost for all
    Federal agencies is about $18 billion, approximately $13 billion is
    DOD's cost. Any affected systems planned to be retired or already
    programmed to be replaced within the 10-year transition period (e.g.,
    Air Force Precision Guided Munitions and Army Explosive Ordinance
    Disposal robots) were excluded. The Service Cost Agencies interviewed
    technical experts associated with each of the major systems to
    understand what components needed modification, made site visits to
    major test and training ranges to view the actual equipment, and
    gathered cost data for similar modifications and new components where
    available. The cost estimates were peer-reviewed through the respective
    Service Cost Agencies and reviewed again by CAPE and the DOD Chief
    Information Officer.
        Sufficient time to relocate systems from the 1755-1850 MHz band is
    dependent upon the schedule of developing and deploying alternative
    capabilities, and can vary from a few years for simple systems with
    readily available alternatives, up to 10 years for more complex
    systems, and upwards of 30 years for space systems, where modification
    is not an option.
        The last requirement is maintaining comparable capabilities. This
    includes alternate spectrum with comparable technical characteristics
    to relocate systems into, i.e., spectrum with the physical properties
    to support the missions currently being performed in the 1755-1850 MHz
    band. With the finite nature of spectrum, and growing requirements,
    this has become a tough requirement to meet.
        Let me also address the issue of the lower 25 MHz or the 1755-1780
    MHz band. We fully understand the desire to bring this 25 MHz to market
    rapidly, particularly with a potential pairing band called out for
    auction within 3 years in the Middle Class Tax Relief and Job Creation
    Act, but the Department has some significant reservations. As we worked
    within NTIA's established process to identify the 500 MHz directed by
    the President, the Federal agencies, including DOD, were instructed to
    study reallocation of the entire 95 MHz band. Thus, a detailed study of
    vacating solely the lower 25 MHz has not been conducted, and the
    results of the full 95 MHz band study cannot be extrapolated to a
    solution for just the lower 25 MHz. Further, it is important that DOD
    understand the long-term status of the full band as part of any
    decision on the lower 25 MHz, in order to fully understand the impacts
    on DOD warfighting missions and cost implications of any relocation. In
    order to make balanced decisions about relocating from or sharing
    spectrum, the Department requires adequate time to conduct operational,
    technical, cost and schedule-feasibility analysis to ensure national
    security and other Federal capabilities are preserved, while supporting
    the economic benefits spectrum use affords the Nation. These studies
    are critical to preserving the warfighting advantages our weapons
    systems provide so that our soldiers, sailors, airman, and marines can
    perform their missions with the greatest possible advantage over our
    adversaries, and return home to their loved ones safely.
        Recognizing the relocation challenges, focus is shifting to
    spectrum sharing as a potential option for repurposing spectrum bands
    for commercial wireless broadband use.
        The Department has and is continuing to work with NTIA and the
    Federal Communications Commission (FCC) to determine ways to share
    spectrum with commercial users when possible. Recent successes include
    the FCC's new rules which allow Dish networks to roll out a Broadband
    network across the country in the 2180-2200 MHz band adjacent to the
    2200-2290 MHz band that is critical to our satellite communications
    downlink and aeronautical mobile telemetry testing, yet collectively
    DOD and Dish were able to establish the rules to permit this new use to
    enter the band without risk of harmful interference. We are also
    working with the FCC and NTIA to explore ways to share the 3550-3650
    MHz and 5GHz bands as well for commercial broadband use. To date we
    have identified 400 MHz of Federal spectrum for potential commercial
    broadband use.
        While large-scale spectrum sharing between Federal systems and
    commercial licensed cellular broadband services presents new
    challenges, DOD is committed to working with government and industry
    partners to develop equitable spectrum sharing solutions. DOD is
    actively supporting efforts through NTIA-established working groups
    under its Commerce Spectrum Management Advisory Committee (CSMAC) to
    further the 1755-1850 MHz band assessment, working with interagency
    partners, NTIA, FCC, and industry. The main focus of the evaluation is
    to determine the feasibility of sharing the 1755-1850 MHz band versus
    relocation. DOD is also cooperatively working with three major wireless
    providers to evaluate sharing the 1755-1850 MHz band including spectrum
    monitoring at selected DOD sites as well as modeling, simulation and
    analysis to develop an understanding of the sharing environment in the
    band. Results will inform the NTIA CSMAC working groups. These efforts
    are also examples of an unprecedented collaboration between the DOD and
    the commercial industry to assess highly complex technical issues with
    a goal of ensuring practical and balanced spectrum repurposing
    decisions that are technically sound and operationally viable from a
    mission perspective.
        DOD recognizes the need to look forward. The Department is
    developing a spectrum strategy focused on investing in technologies and
    capabilities aimed at more efficient use and management of spectrum,
    and for increased interoperability with our Coalition partners and with
    Federal, State, and commercial entities.

                                    SUMMARY

        The ability to have assured access to spectrum in order to operate
    spectrum-dependent national security capabilities without causing and
    receiving harmful interference while understanding the critical needs
    of our Nation's economy remains paramount to the Department. The
    Federal Government and our industry partners have built an impressive
    team that is working toward solving the technical and policy issues so
    we can move ahead. Together, we will develop long-term solutions to
    achieving a balance between national security spectrum requirements and
    meeting the expanding demand of commercial broadband services.
        I want to thank you for your interest in hearing the importance of
    spectrum to DOD.

        Senator Udall. Thank you, General. Again, for the record,
    let me acknowledge your role as the Deputy Chief Information
    Officer for Command, Control, Communications, and Computers and
    Information Infrastructure Capabilities on the staff of the
    Secretary of Defense, and you are a member of the U.S. Air
    Force. So again, welcome.
        General Wheeler. Thank you, sir.
        Senator Udall. We also have Mark L. Goldstein, who is the
    Director of Physical Infrastructure at the GAO. Welcome, Mr.
    Goldstein. We look forward to your comments.

        STATEMENT OF MR. MARK L. GOLDSTEIN, DIRECTOR, PHYSICAL
            INFRASTRUCTURE, GOVERNMENT ACCOUNTABILITY OFFICE

        Mr. Goldstein. Thank you, Mr. Chairman and members of the
    subcommittee. Thank you for inviting GAO to testify on the
    issue of past spectrum auctions and the potential cost of
    moving some Government functions off certain spectrum bands.
    This testimony addresses our preliminary findings and report to
    be issued in several weeks to this committee.
        Our review found the following.
        First, actual cost to relocate some Federal users from the
    1710-1755 megahertz band have exceeded the original $1 billion
    estimate by about $474 million as of March 2013. In contrast,
    DOD expects to complete relocation for about $275 million, or
    approximately $80 million less than its $355 million estimate.
    The relocation of systems from this band has been less
    expensive than originally estimated because many systems were
    simply retuned to operate in the adjacent 1755 to 1850
    megahertz band.
        Second, DOD's preliminary cost estimate for relocating
    systems from the 1755 to 1850 megahertz band substantially or
    partially met GAO's best practices, but changes in key
    assumptions may affect future costs. Most importantly,
    decisions about which spectrum band DOD would relocate to are
    still unresolved. Nevertheless, DOD's cost estimate was
    consistent with its purpose of informing the decision to make
    additional spectrum available for commercial wireless services.
        Third, no Government revenue forecast has been prepared for
    a potential auction of licenses in the 1755 to 1850 megahertz
    band, and a variety of factors could influence auction
    revenues. The price of spectrum and ultimately auction revenue
    is determined by supply and demand. Several factors would
    influence profitability and demand, including whether the
    spectrum is cleared to Federal users or must be shared.
        Thank you, Mr. Chairman. I would be happy to respond to
    questions later.
        [The prepared statement of Mr. Goldstein follows:]

                  Prepared Statement by Mr. Mark L. Goldstein

        Chairman Udall, Ranking Member Sessions, and members of the
    subcommittee: Thank you for the opportunity to be here today as the
    subcommittee examines the Department of Defense's (DOD) requirements
    for radio frequency spectrum.\1\ DOD requires spectrum to support
    military operations, testing, and training at home and around the
    world. For example, DOD has dramatically increased its use of unmanned
    aerial systems in support of overseas missions; these systems require
    spectrum to transmit volumes of critical intelligence, surveillance,
    and reconnaissance data, leading to an increase in DOD's demand for
    spectrum. Similarly, as the demand for and use of smart phones,
    tablets, and other wireless devices continues to grow, commercial
    requirements for spectrum are expanding as well, with important
    implications for economic growth. Thus, balancing competing industry
    and government demands for a limited amount of spectrum, today and in
    the future, is a challenging and complex task.
    ---------------------------------------------------------------------------
        \1\ The radio frequency spectrum is the part of the natural
    spectrum of electromagnetic radiation lying between the frequency
    limits of 3 kilohertz (kHz) and 300 gigahertz (GHz). Radio frequencies
    are grouped into bands and are measured in units of Hertz, or cycles
    per second. The term kHz refers to thousands of Hertz, megahertz (MHz)
    to millions of Hertz, and GHz to billions of Hertz. The Hertz unit of
    measurement is used to refer to both the quantity of spectrum (such as
    500 MHz of spectrum) and the frequency bands (such as the 1755-1850 MHz
    band).
    ---------------------------------------------------------------------------
        In June 2010, the administration issued a presidential memorandum
    directing the National Telecommunications and Information
    Administration (NTIA) to collaborate with the Federal Communications
    Commission (FCC) to make available a total of 500 MHz of Federal and
    nonFederal spectrum for wireless broadband within 10 years.\2\ As part
    of this effort, DOD studied the feasibility of relocating military
    systems from the 1755-1850 MHz band,\3\ which is ideally suited to
    enabling highly mobile, yet reliable communication links for commercial
    and Federal users. Relocating to other parts of the radio frequency
    spectrum means that many of these military systems would need to be
    redesigned. In addition, few other comparable spectrum bands are
    available that can effectively support the Federal operations currently
    in the band. In September 2011, DOD estimated that the cost to relocate
    most military systems from the 1755-1850 MHz band would be about $12.6
    billion over 10 years.
    ---------------------------------------------------------------------------
        \2\ See, Memorandum for the Heads of Executive Departments and
    Agencies, Unleashing the Wireless Broadband Revolution, 75 Fed. Reg.
    38387 (June 28, 2010).
        \3\ Within the United States, this band is allocated exclusively to
    the Federal Government, particularly for defense purposes, such as
    military tactical communications, air combat training, and space
    systems.
    ---------------------------------------------------------------------------
        My statement today discusses our ongoing review, requested by the
    Senate Committee on Armed Services, of Federal agencies' spectrum
    relocation costs and auction revenues. Our review focuses on (1) the
    differences between estimated and actual Federal relocation costs, and
    revenue from the auction of the 1710-1755 MHz band; (2) the extent to
    which DOD followed best practices to prepare its preliminary cost
    estimate for vacating the 1755-1850 MHz band and the limitations, if
    any, of its analysis; and (3) what government or industry revenue
    forecasts exist for an auction of the 1755-1850 MHz band, and what
    factors, if any, could influence the actual auction revenue. To
    determine the estimated and actual Federal relocation costs, and
    revenue from the auction of the 1710-1755 MHz band, we reviewed annual
    progress reports for the 1710-1755 MHz transition published by NTIA and
    spectrum auction data published by FCC as of December 2012.\4\ We
    limited our analysis to the Advanced Wireless Services-1 (AWS-1)
    auction involving the 1710-1755 MHz band; this is the only spectrum
    auction involving Federal agencies, including DOD, with significant,
    known relocation costs.\5\ To assess whether the cost of vacating the
    1755-1850 MHz band is sufficiently captured in DOD's preliminary cost
    estimate, we assessed DOD's preliminary estimate against GAO's Cost
    Estimating and Assessment Guide (Cost Guide), which has been used to
    evaluate cost estimates across the government;\6\ these best practices
    help ensure cost estimates are comprehensive, well-documented,
    accurate, and credible. To identify any limitations affecting DOD's
    estimate, we also interviewed DOD officials responsible for developing
    the department's preliminary cost estimate. To identify any government
    or industry forecasts of revenue from a future auction of the 1755-1850
    MHz band and any factors that would affect the value of spectrum
    licenses, we reviewed academic, government, and public policy
    literature. We also interviewed officials from the Congressional Budget
    Office (CBO) and the Office of Management and Budget (OMB), and
    stakeholders with knowledge of spectrum licensing issues, including
    industry and policy experts. We are conducting our work in accordance
    with generally accepted government auditing standards. Those standards
    require that we plan and perform the audit to obtain sufficient,
    appropriate evidence to provide a reasonable basis for our findings and
    conclusions based on our audit objectives. We believe that the evidence
    obtained provides a reasonable basis for our findings and conclusions
    based on our audit objectives. We plan to issue our final report on
    this work in May 2013.
    ---------------------------------------------------------------------------
        \4\ To assess the reliability of the relocation cost and auction
    revenue data, we reviewed documentation related to the data, compared
    the data to other sources, including government reports, and discussed
    the data with FCC and NTIA officials. We determined that the FCC and
    NTIA data were sufficiently reliable for our purposes.
        \5\ There have been other auctions involving the relocation of
    Federal Government agencies. For example, the National Oceanic and
    Atmospheric Administration (NOAA), Air Force, and National Science
    Foundation previously operated systems in the 1670-1675 MHz band. The
    estimated cost to relocate these systems was $35-55 million for NOAA
    and $515,000 for the Air Force. See NTIA, Spectrum Reallocation Final
    Report: Response to Title V--Omnibus Budget Reconciliation Act of 1993
    (Washington, DC: February 1995). FCC auctioned the band in April 2003,
    and the auction generated $12.6 million. Final relocation costs are
    unclear.
        \6\ GAO, GAO Cost Estimating and Assessment Guide: Best Practices
    for Developing and Managing Capital Program Costs, GAO-09-3SP
    (Washington, DC: March 2009).
    ---------------------------------------------------------------------------
                                   BACKGROUND

        The radio frequency spectrum is the resource that makes possible
    wireless communications and supports a vast array of government and
    commercial services. DOD uses spectrum to transmit and receive critical
    voice and data communications involving military tactical radio, air
    combat training, precision-guided munitions, unmanned aerial systems,
    and aeronautical telemetry and satellite control, among others. The
    military employs these systems for training, testing, and combat
    operations throughout the world. Commercial entities use spectrum to
    provide a variety of wireless services, including mobile voice and
    data, paging, broadcast television and radio, and satellite services.
        In the United States, FCC manages spectrum for nonFederal users
    under the Communications Act,\7\ while NTIA manages spectrum for
    Federal Government users and acts for the President with respect to
    spectrum management issues as governed by the National
    Telecommunications and Information Administration Organization Act.\8\
    FCC and NTIA, with direction from Congress and the President, jointly
    determine the amount of spectrum allocated for Federal, nonfederal, and
    shared use. FCC and NTIA manage the spectrum through a system of
    frequency allocation and assignment.
    ---------------------------------------------------------------------------
        \7\ Communications Act, 47 U.S.C. Sec. 309.
        \8\ Pub. L. No. 102-538, title I, 106 Stat. 3533, codified as
    amended at 47 U.S.C. ch. 8.

             Allocation involves segmenting the radio spectrum into
            bands of frequencies that are designated for use by particular
            types of radio services or classes of users. (Fig. 1
            illustrates examples of allocated spectrum uses, including DOD
            systems using the 1755-1850 MHz band.) In addition, spectrum
            managers specify service rules, which include the technical and
            operating characteristics of equipment.

             Assignment, which occurs after spectrum has been
            allocated for particular types of services or classes of users,
            involves providing users, such as commercial entities or
            government agencies, with a license or authorization to use a
            specific portion of spectrum. FCC assigns licenses within
            frequency bands to commercial enterprises, state and local
            governments, and other entities. Since 1994, FCC has used
            competitive bidding, or auctions, to assign certain licenses to
            commercial entities for their use of spectrum.\9\ Auctions are
            a market-based mechanism in which FCC assigns a license to the
            entity that submits the highest bid for specific bands of
            spectrum. NTIA authorizes spectrum use through frequency
            assignments to Federal agencies. More than 60 Federal agencies
            and departments combined have over 240,000 frequency
            assignments, although 9 departments, including DOD, hold 94
            percent of all frequency assignments for Federal use.
    ---------------------------------------------------------------------------
        \9\ Not all licenses are assigned via auctions. For example, in
    some frequency bands, FCC authorizes unlicensed use of spectrum--that
    is, users do not need to obtain a license to use spectrum. Rather, an
    unlimited number of unlicensed users can share frequencies on a
    noninterference basis. Thus, the assignment process does not apply to
    the use of unlicensed spectrum.

        Congress has taken a number of steps to facilitate the deployment
    of innovative, new commercial wireless services to consumers, including
    requiring more Federal spectrum to be reallocated for commercial use.
    Relocating communications systems entails costs that are affected by
    many variables related to the systems themselves as well as the
    relocation plans. Some fixed microwave systems, for example, can use
    off-the-shelf commercial technology and may just need to be re-tuned to
    accommodate a change in frequency. However, some systems may require
    significant modification if the characteristics of the new spectrum
    frequencies differ sufficiently from the original spectrum. Specialized
    systems, such as those used for surveillance and law enforcement
    purposes, may not be compatible with commercial technology, and
    therefore agencies have to work with vendors to develop equipment that
    meets mission needs and operational requirements.
        In 2004, the Commercial Spectrum Enhancement Act (CSEA) established
    a Spectrum Relocation Fund,\10\ funded from auction proceeds, to cover
    the costs incurred by Federal entities that relocate to new frequency
    assignments or transition to alternative technologies.\11\ The auction
    of spectrum licenses in the 1710-1755 MHz band was the first with
    relocation costs to take place under CSEA. Twelve agencies previously
    operated communication systems in this band, including DOD. CSEA
    designated 1710-1755 MHz as ``eligible frequencies'' for which Federal
    relocation costs could be paid from the Spectrum Relocation Fund.\12\
    In September 2006, FCC concluded the auction of licenses in the 1710-
    1755 MHz band and, in accordance with CSEA,\13\ a portion of the
    auction proceeds is currently being used to pay spectrum relocation
    expenses.\14\
    ---------------------------------------------------------------------------
        \10\ 47 U.S.C. Sec. 928.
        \11\ Eligible relocation expenses are those costs incurred by a
    Federal entity to achieve comparable capability of systems, regardless
    of whether that is achieved by relocating to a new frequency assignment
    or utilizing an alternative technology. 47 U.S.C. Sec. 923(g)(3).
        \12\ 47 U.S.C. Sec. 923(g)(2).
        \13\ 47 U.S.C. Sec.  928(d)(1), appropriates from the Spectrum
    Relocation Fund such sums as may be required to pay authorized
    relocation or sharing costs. See, also 47 U.S.C. Sec. 928(c).
        \14\ This auction included licenses in the 1710-1755 MHz and 2110-
    2155 MHz bands. In August 2008, FCC held a second auction of the
    licenses that were not sold in the first auction.
    ---------------------------------------------------------------------------
        In response to the President's 2010 memorandum requiring that
    additional spectrum be made available for commercial use within 10
    years, in January 2011, NTIA selected the 1755-1850 MHz band as the
    priority band for detailed evaluation and required Federal agencies to
    evaluate the feasibility of relocating systems to alternative spectrum
    bands. DOD provided NTIA its input in September 2011, and NTIA
    subsequently issued its assessment of the viability for accommodating
    commercial wireless broadband in the band in March 2012.\15\ Most
    recently, the President's Council of Advisors on Science and Technology
    published a report in July 2012 recommending specific steps to ensure
    the successful implementation of the President's 2010 memorandum.\16\
    The report found, for example, that clearing and vacating Federal users
    from certain bands was not a sustainable basis for spectrum policy
    largely because of the high cost to relocate Federal agencies and
    disruption to the Federal missions. It recommended new policies to
    promote the sharing of Federal spectrum. The sharing approach has been
    questioned by CTIA--The Wireless Association and its members,\17\ which
    argue that cleared spectrum and an exclusive-use approach to spectrum
    management has enabled the U.S. wireless industry to invest hundreds of
    billions of dollars to deploy mobile broadband networks resulting in
    economic benefits for consumers and businesses.
    ---------------------------------------------------------------------------
        \15\ NTIA, An Assessment of the Viability of Accommodating Wireless
    Broadband in the 1755-1850 MHz Band (Washington, DC: March 2012).
        \16\ Executive Office of the President, President's Council of
    Advisors on Science and Technology, Report to the President: Realizing
    the Full Potential of Government-Held Spectrum to Spur Economic Growth
    (Washington, DC: July 2012).
        \17\ CTIA--The Wireless Association is an international nonprofit
    membership organization that has represented the wireless
    communications industry since 1984. Membership in the association
    includes wireless carriers and their suppliers, as well as providers
    and manufacturers of wireless data services and products.
    ---------------------------------------------------------------------------
       SOME AGENCIES UNDERESTIMATED 1710-1755 MHZ BAND RELOCATION COSTS,
             ALTHOUGH AUCTION REVENUES APPEAR TO EXCEED THOSE COSTS

    Some Federal Agencies Underestimated Relocation Costs
        Actual costs to relocate communications systems for 12 Federal
    agencies from the 1710-1755 MHz band have exceeded original estimates
    by about $474 million, or 47 percent, as of March 2013. The original
    transfers from the Spectrum Relocation Fund to agency accounts,
    totaling over $1 billion, were made in March 2007. Subsequently, some
    agencies requested additional monies from the Spectrum Relocation Fund
    to cover relocation expenses. Agencies requesting the largest amounts
    of subsequent transfers include the Department of Justice ($294
    million), the Department of Homeland Security ($192 million), the
    Department of Energy ($35 million), and the U.S. Postal Service ($6.6
    million). OMB and NTIA officials expect the final relocation cost to be
    about $1.5 billion compared with the original estimate of about $1
    billion. Total actual costs exceed estimated costs for many reasons,
    including unforeseen challenges, unique issues posed by specific
    equipment location, the transition timeframe, costs associated with
    achieving comparable capability, and the fact that some agencies may
    not have properly followed OMB and NTIA guidance to prepare the
    original cost estimate. NTIA reports that it expects agencies to
    complete the relocation effort between 2013 and 2017.
        Although 11 of the 12 agencies plan to spend the same amount or
    more than they estimated, DOD expects to complete the 1710-1755 MHz
    transition for about $275 million, or approximately $80 million less
    than its cost estimate. DOD's cost estimates, some made as early as
    1995, changed over time as officials considered different relocation
    scenarios with differing key assumptions and their thinking evolved
    about the systems that would be affected, according to DOD and NTIA
    officials. Cost estimates to relocate military systems from the late
    1990s and early 2000s ranged from a low of $38 million to as much as
    $1.6 billion, depending on the scenario. DOD's final cost estimate to
    relocate from the band was about $355 million. DOD officials told us
    that the relocation of systems from the 1710-1755 MHz band has been
    less expensive than originally estimated because many of its systems
    were simply re-tuned to operate in the 1755-1850 MHz band.

    Auction Revenues Appear to Exceed Agency Relocation Costs
        The auction of the 1710-1755 MHz band raised almost $6.9 billion in
    gross winning bids from the sale of licenses to use these
    frequencies.\18\ This revenue minus the expected final relocation costs
    of approximately $1.5 billion suggests that the auction of the band
    will raise roughly $5.4 billion for the U.S. Treasury. As mentioned
    above, NTIA reports that it expects agencies to complete the relocation
    effort between 2013 and 2017; therefore, the final net revenue amount
    may change. For example, the Department of the Navy has already
    initiated a process to return almost $65 million to the Spectrum
    Relocation Fund.
    ---------------------------------------------------------------------------
        \18\ Although the AWS-1 auction of spectrum licenses raised $13.7
    billion, the portion of the auction proceeds associated with the
    transferred government spectrum amounted to almost $6.9 billion and was
    deposited in the Spectrum Relocation Fund.
    ---------------------------------------------------------------------------
     DOD'S PRELIMINARY COST ESTIMATE SUBSTANTIALLY OR PARTIALLY MET GAO'S
    IDENTIFIED BEST PRACTICES, BUT CHANGES IN ASSUMPTIONS MAY AFFECT FUTURE
                                     COSTS

    DOD's Preliminary Cost Estimate for Relocating from the 1755-1850 MHz
            Band Substantially or Partially Met GAO's Identified Best
            Practices
        DOD's Office of Cost Assessment and Program Evaluation (CAPE) \19\
    led the effort to prepare the department's preliminary cost estimate
    portion of its study to determine the feasibility of relocating its 11
    major radio systems from the 1755-1850 MHz band. To do so, CAPE worked
    closely with cost estimators and others at the respective military
    services regarding the technical and cost data needed to support the
    estimate and how they should be gathered to maintain consistency across
    the services. The services' cost estimators compiled and reviewed the
    program data, identified the appropriate program content affected by
    each system's relocation, developed cost estimates under the given
    constraints and assumptions, and internally reviewed the estimates
    consistent with their standard practices before providing them to CAPE.
    CAPE staff then reviewed the services' estimates for accuracy and
    consistency, and obtained DOD management approval on its practices and
    findings. According to DOD officials, CAPE based this methodology on
    the cost estimation best practices it customarily employs.
    ---------------------------------------------------------------------------
        \19\ The Director of Cost Assessment and Program Evaluation (CAPE)
    is a principal staff assistant and advisor to the Secretary of Defense
    and Deputy Secretary of Defense in the Office of the Secretary of
    Defense.
    ---------------------------------------------------------------------------
        We reviewed DOD's preliminary cost estimation methodology and
    evaluated it against GAO's Cost Guide, which also identifies cost
    estimating best practices that help ensure cost estimates are
    comprehensive, well-documented, accurate, and credible. These
    characteristics of cost estimates help minimize the risk of cost
    overruns, missed deadlines, and unmet performance targets:

             A comprehensive cost estimate ensures that costs are
            neither omitted nor double counted.
             A well-documented estimate is thoroughly documented,
            including source data and significance, clearly detailed
            calculations and results, and explanations for choosing a
            particular method or reference.
             An accurate cost estimate is unbiased, not overly
            conservative or overly optimistic, and based on an assessment
            of most likely costs.
             A credible estimate discusses any limitations of the
            analysis from uncertainty or biases surrounding data or
            assumptions.

        DOD officials developed the preliminary cost estimate as a less-
    rigorous, ``rough-order-of-magnitude'' cost estimate \20\ as outlined
    by NTIA, not a budget-quality cost estimate. Because of this, we
    performed a high-level analysis, applying GAO's identified best
    practices to DOD's cost estimate and methodology, and did not review
    all supporting data and analysis.
    ---------------------------------------------------------------------------
        \20\ The rough-order-of-magnitude estimate is typically developed
    to support ``what-if'' analyses, and is helpful in examining
    differences in high-level variation alternatives to see which are most
    feasible. Because it is developed from limited data and in a short
    time, it should never be considered a budget-quality cost estimate.
    ---------------------------------------------------------------------------
        Overall, we found that DOD's cost estimate was consistent with the
    purpose of the feasibility study, which was to inform the decision-
    making process to reallocate 500 MHz of spectrum for commercial
    wireless broadband use. Additionally, we found that DOD's methodology
    substantially met the comprehensive and well-documented characteristics
    of reliable cost estimates, and partially met the accurate and credible
    characteristics.\21\
    ---------------------------------------------------------------------------
        \21\ GAO's Cost Guide includes five levels of compliance with its
    best practices. Not Met: Provided no evidence that satisfies any of the
    characteristic. Minimally Met: Provided evidence that satisfies a small
    portion of the characteristic. Partially Met: Provided evidence that
    satisfies about half of the characteristic. Substantially Met: Provided
    evidence that satisfies a large portion of the characteristic. Fully
    Met: Provided complete evidence that satisfies the entire
    characteristic.

             Comprehensive--Substantially Met: We observed that
            DOD's estimate included complete information about systems'
            life cycles, an appropriate level of detail to ensure cost
            elements were neither omitted nor double-counted, and
            overarching study assumptions that applied across programs.
            However, some programs did not list all the discrete tasks
            required for relocation, and not all the individual programs
            had evidence of cost-influencing ground rules and assumptions.
             Well-documented--Substantially Met: We found that
            management reviewed and accepted the estimate, the estimate was
            consistent with the technical baseline data, and documentation
            for the majority of programs was sufficient that an analyst
            unfamiliar with the program could understand and replicate what
            was done. However, the documentation also captured varying
            levels of detail on source data and its reliability, as well as
            on calculations performed and estimation methodology used, some
            of which were not sufficient to support a rough-order-of-
            magnitude estimate.
             Accurate--Partially Met: We found that DOD properly
            applied appropriate inflation rates and made no apparent
            calculation errors. In addition, the estimated costs agreed
            with DOD's prior relocation cost estimate for this band
            conducted in 2001.\22\ However, no confidence level was
            specifically stated in DOD's cost estimate to determine if the
            costs considered are the most likely costs, which is required
            to fully or substantially meet this characteristic.
    ---------------------------------------------------------------------------
        \22\ CAPE compared the overall cost estimate using constant fiscal
    year 2011 dollars with DOD's 2001 cost estimate for relocating from the
    same band (Department of Defense, Investigation of the Feasibility of
    Accommodating the International Mobile Telecommunications (IMT) 2000
    Within the 1755-1850 MHz Band (February 9, 2001)), adjusting for
    changes in the types and quantities of the systems, and demonstrated
    that the two estimates are within 5 percent of each other.
    ---------------------------------------------------------------------------
             Credible--Partially Met: We observed that DOD cross-
            checked major cost elements and found them to be similar.
            However, some sensitivity analyses and risk assessments were
            only completed at the program level for some programs, and not
            at all at a summary level.\23\ Performing risk assessments and
            sensitivity analyses on all projects and at the summary level
            is required to fully meet this characteristic, and is required
            on a majority of projects and at the summary level to
            substantially meet this characteristic.
    ---------------------------------------------------------------------------
        \23\ A sensitivity analysis examines how changes to key assumptions
    and inputs affect the estimate. A risk assessment identifies the
    factors underlying an estimate that might be uncertain and the risks
    they pose to the estimate.
    ---------------------------------------------------------------------------
    As the Assumptions Supporting DOD's Cost Estimate for Relocating from
            the 1755-1850 MHz Band Change, Costs May Also Change
        Even though DOD's preliminary cost estimate substantially met some
    of our best practices, as the assumptions supporting the estimate
    change over time, costs may also change. According to DOD officials,
    any change to key assumptions about the bands to which systems would
    move could substantially change relocation costs. Because decisions
    about the timeframe for relocation and the spectrum bands to which the
    various systems would be reassigned have not been made yet, DOD based
    its current estimate on the most likely assumptions, provided by NTIA,
    some of which have already been proven inaccurate or are still
    undetermined. For example:

             Relocation bands: According to DOD officials,
            equipment relocation costs vary depending on the relocation
            band's proximity to the current band. Moving to bands further
            away than the assumed relocation bands could increase costs;
            moving to closer bands could decrease costs. In addition,
            congestion, in both the 1755-1850 MHz band and the potential
            bands to which its systems might be moved, complicates
            relocation planning. Also, DOD officials said that many of the
            potential spectrum bands to which DOD's systems could be
            relocated would not be able to accommodate the new systems
            unless other actions are also taken. For example, the 2025-2110
            MHz band, into which DOD assumed it could move several systems
            and operate them on a primary basis, is currently allocated to
            commercial electronic news gathering systems and other
            commercial systems. To accommodate military systems within this
            band, FCC would need to withdraw this spectrum from commercial
            use to allow NTIA to provide DOD primary status within this
            band, or FCC would have to otherwise ensure that commercial
            systems operate on a non-interference basis with military
            systems. FCC has not initiated a rulemaking procedure to begin
            such processes.
             Relocation start date: DOD's cost estimate assumed
            relocation would begin in fiscal year 2013, but no auction has
            been approved, so relocation efforts have not begun. According
            to DOD officials, new equipment and systems continue to be
            deployed in and designed for the current band, and older
            systems are retired. This changes the overall profile of
            systems in the band, which can change the costs of relocation.
            For example, a major driver of the cost increase between DOD's
            2001 and 2011 relocation estimates for the 1755-1850 MHz band
            was the large increase in the use of unmanned aerial systems.
            DOD deployed these systems very little in 2001, but their
            numbers had increased substantially by 2011. Conversely,
            equipment near the end of its life cycle when the study was
            completed may be retired or replaced outside of relocation
            efforts, which could decrease relocation costs.
             Inflation: Inflation will drive up costs as more time
            elapses before the auction occurs.

        In addition to changing assumptions, the high-level nature of a
    rough-order-of-magnitude estimate means that it is not as robust as a
    detailed, budget-quality lifecycle estimate, and its results should not
    be considered or used with the same confidence. DOD officials said that
    for a spectrum-band relocation effort, a detailed, budget-quality cost
    estimate would normally be done during the transition planning phase
    once a spectrum auction has been approved, and would be based on
    specific auction and relocation decisions.

     NO GOVERNMENT REVENUE FORECASTS EXIST FOR A POTENTIAL AUCTION OF THE
     1755-1850 MHZ BAND, AND A VARIETY OF FACTORS COULD INFLUENCE AUCTION
                                    REVENUES

    Federal Agencies Have Not Produced a Revenue Forecast for the 1755-1850
            MHz Band
        No official government revenue forecast has been prepared by CBO,
    FCC, NTIA, or OMB for a potential auction of the 1755-1850 MHz band
    licenses, but some estimates might be prepared once there is a greater
    likelihood of an auction. Officials at these agencies knowledgeable
    about estimating revenue from the auction of spectrum licenses said
    that it is too early to produce meaningful forecasts for a potential
    auction of the 1755-1850 MHz band. Moreover, CBO only provides written
    estimates of potential receipts when a congressional committee reports
    legislation invoking FCC auctions. OMB officials said NTIA, with OMB
    concurrence, will transmit Federal agency relocation cost estimates to
    assist FCC in establishing minimum bids for an auction once it is
    announced.\24\ OMB would also estimate receipts and relocation costs as
    part of the President's budget. OMB analysts would use relocation cost
    information from NTIA to complete OMB's estimate of receipts.
    ---------------------------------------------------------------------------
        \24\ FCC calculates minimum bids for spectrum auctions typically
    based on bandwidth and license-area population. Bidders for specific
    licenses must put forth opening bids that match or exceed the minimum
    bid to be in contention.
    ---------------------------------------------------------------------------
        Although no official government revenue forecast exists, an
    economist with the Brattle Group, an economic consulting firm,
    published a revenue forecast in 2011 for a potential auction of the
    1755-1850 MHz band that forecasted revenues of $19.4 billion for the
    band.\25\ We did not evaluate the accuracy of this revenue estimate.
    Like all forecasts, the Brattle Group study was based on certain
    assumptions. The study assumed that the 1755-1850 MHz band would be
    generally cleared of Federal users. It also assumed the AWS-1 average
    nationwide price of $1.03 per MHz-pop as a baseline price for spectrum
    allocated to wireless broadband services,\26\ and that the 1755-1780
    MHz portion of the band would be paired with the 2155-2180 MHz band,
    which various industry stakeholders currently support. The study
    assumed that the 95 MHz of spectrum between 1755 and 1850 MHz would be
    auctioned as part of a total of 470 MHz of spectrum included in 6
    auctions sequenced 18 months apart and spread over 9 years with total
    estimated net receipts of $64 billion. In addition, the study adjusted
    the price of spectrum based on the increase in the supply of spectrum
    over the course of the six auctions,\27\ as well as for differences in
    the quality of the spectrum bands involved.
    ---------------------------------------------------------------------------
        \25\ Coleman Bazelon, The Brattle Group, Inc., Expected Receipts
    From Proposed Spectrum Auctions (Washington, DC: July 28, 2011).
        \26\ The unit price of licensed spectrum is typically expressed in
    terms of dollars per MHz-pop, where MHz-pop is the product of total MHz
    of a band and population covered by the region of a license. The $1.03
    price represents the current price for AWS-1 spectrum based on the
    original AWS-1 price adjusted for inflation using the SpecEx Spectrum
    Index.
        \27\ To adjust the price of spectrum for the increased supply, the
    study used the price elasticity for spectrum. According to the study,
    wireless broadband spectrum is generally thought to have a price
    elasticity of around -1.2, which implies that a 1 percent increase in
    the base supply of spectrum should result in a 1.2 percent decrease in
    its price.
    ---------------------------------------------------------------------------
    A Variety of Factors Could Influence Auction Revenues
        Like all goods, the price of licensed spectrum, and ultimately the
    auction revenue, is determined by supply and demand. This fundamental
    economic concept helps to explain how the price of licensed spectrum
    could change depending on how much licensed spectrum is available now
    and in the future, and how much licensed spectrum is demanded by the
    wireless industry for broadband applications. Government agencies can
    influence the supply of spectrum available for licensing, whereas
    expectations about profitability determine demand for spectrum in the
    marketplace.\28\
    ---------------------------------------------------------------------------
        \28\ The value of a spectrum license, and hence the future price of
    licensed spectrum at a given auction, depends on many factors, ranging
    from the physical characteristics of the spectrum that is licensed to
    the general investment climate and the existence of applicable
    technology infrastructure. For the purposes of this discussion, we
    focus only on those supply and demand factors directly influenced by
    government decisions or wireless companies.
    ---------------------------------------------------------------------------
        Supply
        In 2010, the President directed NTIA to work with FCC to make 500
    MHz of spectrum available for use by commercial broadband services
    within 10 years. This represents a significant increase in the supply
    of spectrum available for licensing in the marketplace. As with all
    economic goods, the price and value of licensed spectrum are expected
    to fall as additional supply is introduced, all other things being
    equal.
        Demand
        The expected, potential profitability of a spectrum license
    influences the level of demand for it. Currently, the demand for
    licensed spectrum is increasing and a primary driver of this increased
    demand is the significant growth in commercial-wireless broadband
    services, including third and fourth generation technologies that are
    increasingly used for smart phones and tablet computers. Some of the
    factors that would influence the demand for licensed spectrum are:

             Clearing versus Sharing: Spectrum is more valuable,
            and companies will pay more to license it, if it is entirely
            cleared of incumbent Federal users, giving them sole use of
            licensed spectrum; spectrum licenses are less valuable if
            access must be shared. Sharing could potentially have a big
            impact on the price of spectrum licenses. In 2012, the
            President's Council of Advisors on Science and Technology
            advocated that sharing between Federal and commercial users
            become the new norm for spectrum management, especially given
            the high cost and lengthy time it takes to relocate Federal
            users.
             Certainty and Timing: Another factor that affects the
            value of licensed spectrum is the certainty about when it
            becomes available. Any increase in the probability that the
            spectrum would not be cleared on time would have a negative
            effect on the price companies are willing to pay to use it. For
            example, 7 years after the auction of the 1710-1755 MHz band,
            Federal agencies are still relocating systems. The estimated
            10-year timeframe to clear Federal users from the 1755-1850 MHz
            band, and potential uncertainty around that timeframe, could
            negatively influence demand for the spectrum.
             Available Wireless Services: Innovation in the
            wireless broadband market is expected to continue to drive
            demand for wireless services. For example, demand continues to
            increase for smartphones and tablets as new services are
            introduced in the marketplace. These devices can connect to the
            Internet through regular cellular service using commercial
            spectrum, or they can use publicly available (unlicensed)
            spectrum via wireless fidelity (Wi-Fi) networks to access the
            Internet.\29\ The value of the spectrum, therefore, is
            determined by continued strong development of and demand for
            wireless services and these devices, and the profits that can
            be realized from them.
    ---------------------------------------------------------------------------
        \29\ Wi-Fi networks can permit multiple computing devices in each
    discrete location to share a single wired connection to the Internet,
    thus efficiently sharing spectrum.
    ---------------------------------------------------------------------------
        Chairman Udall, Ranking Member Sessions, and members of the
    subcommittee, this concludes my prepared remarks. I am happy to respond
    to any questions that you or other members of the subcommittee may have
    at this time.

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                            CONGRESSIONAL RELATIONS

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                                 PUBLIC AFFAIRS

        Chuck Young, Managing Director, youngc1@gao.gov, (202) 512-4800
    U.S. Government Accountability Office, 441 G Street NW, Room 7149
    Washington, DC 20548 GAO's Mission

        Senator Udall. Thank you, Mr. Goldstein.
        Finally, we have been joined by Mr. Christopher Guttman-
    McCabe, Vice President, Regulatory Affairs, CTIA-The Wireless
    Association. Welcome.

     STATEMENT OF MR. CHRISTOPHER GUTTMAN-McCABE, VICE PRESIDENT,
           REGULATORY AFFAIRS, CTIA--THE WIRELESS ASSOCIATION

        Mr. Guttman-McCabe. Thank you and good afternoon, Mr.
    Chairman, Ranking Member Sessions, and Senator Fischer. I
    appreciate the opportunity to testify before you today.
        CTIA represents the wireless carriers, manufacturers, and
    vendors that drive America's leadership in wireless broadband.
        If I may, I would like to ask consent to amend my written
    testimony to include a letter that was submitted to NTIA this
    afternoon, regarding the issues that we are going to talk about
    on the panel today.
        Senator Udall. Without objection, it will follow your
    written statement.
        Mr. Guttman-McCabe. Thank you.
        As I noted in my written testimony, in order to maintain
    our world leadership in wireless broadband, the wireless
    ecosystem needs access to additional spectrum. Some of what is
    needed will come from the broadcast incentive auctions that
    Congress authorized last year, but as both the Federal
    Communications Commission (FCC), Congress, and the
    administration have acknowledged, closing this spectrum deficit
    will require reallocation of spectrum currently held by Federal
    users.
        One frequency band that would be particularly useful to
    meet rapidly expanding demand is the 1755 to 1780 megahertz
    band, a subset of what is currently under review by NTIA. In
    the United States, the band is used by DOD and other Federal
    agencies, but internationally it is used to support commercial
    mobile radio services. Reallocation would harmonize U.S. and
    international use, produce economies of scale and scope, lower
    costs, speed implementation, and drive advances in our health
    care, energy, financial, education, and other sectors of the
    American economy. American consumers and businesses will get
    the most advanced networks and devices. The economy will
    benefit significantly as our industry continues to drive
    tremendous amounts of investment and job creation, and as we
    heard numerous times on the first panel, the reallocation
    process can help agencies to replace systems that in some cases
    are decades old and outdated with state-of-the-art technology.
        This can be a win-win-win for the United States. We hope
    you can help us to move this process forward. Thank you, and I
    look forward to your questions.
        [The prepared statement of Mr. Guttman-McCabe follows:]

              Prepared Statement by Mr. Christopher Guttman-McCabe

                                  INTRODUCTION

        Good afternoon, Chairman Udall, Ranking Member Sessions, and
    members of the subcommittee. My name is Christopher Guttman-McCabe and
    I am Vice President of Regulatory Affairs at CTIA--The Wireless
    Association. CTIA represents the wireless carriers, equipment vendors,
    and software developers that drive America's leadership in wireless
    broadband. Since 1984, CTIA has helped coordinate the wireless
    industry's voluntary efforts to provide consumers with a variety of
    choices and information regarding their wireless products and services.
    It also supports numerous industry initiatives to educate consumers and
    policymakers on such issues as responsible wireless technology use, the
    industry's eco-friendly initiatives, and accessible wireless products
    and services. As Vice President of Regulatory Affairs, I work on a wide
    range of issues involving spectrum, regulatory mandates, and homeland
    security. Thank you for inviting me to testify today regarding DOD
    usage of the electromagnetic spectrum.

              THE NEED FOR MORE SPECTRUM TO DRIVE ECONOMIC GROWTH

        According to a 2012 report by Recon Analytics, the Nation's mobile
    communications industry is a significant economic engine, directly or
    indirectly supporting 3.8 million jobs, or 2.6 percent of all U.S.
    employment, contributing $195.5 billion to the U.S. gross domestic
    product and driving $33 billion in productivity improvements in 2011.
    As the FCC noted in its recently released 16th Wireless Competition
    Report, the 2010 and 2011 CTIA Wireless Indices Reports indicated that
    incremental capital investment by wireless operators rose to $24.9
    billion in 2010, a 22 percent increase from 2009, and then increased
    again to $25.3 billion in 2011. In fact, in 2012, U.S. wireless
    carriers invested more than $30 billion--25 percent of the world's
    total wireless capital investment for the year. As CTIA also recently
    pointed out to the FCC, a Deloitte study shows that such continued
    capital investments -specifically in 40 wireless networks--could
    generate $73 billion to $151 billion in GDP growth, and create 371,000
    to 771,000 jobs in America by 2016.
        The industry is expected to expand as businesses and consumers
    increasingly rely on wireless technologies, including bandwidth-
    intensive smartphones, tablets, and other hand-held devices as well as
    machine-to-machine communications. CTIA's most recent semi-annual
    survey revealed that smartphone adoption and tablet use continues to
    grow at dramatic rates--driving Americans' use of more than 1.1
    trillion megabytes of data from July 2011-June 2012, which was an
    increase of 104 percent over the previous year. A recent report issued
    by Cis.co indicated that the number of mobile-connected tablets
    increased 2.5-fold to 36 million in 2012, and the FCC recently
    recognized in its Competition Report that the adoption of smartphones
    alone increased at a 50 percent annual growth rate in 2011. Cisco
    predicts that this growth will continue, with global mobile data
    traffic predicted to increase 13-fold between 2012 and 2017 at a
    compound annual growth rate of 66 percent. As the President's Council
    of Economic Advisers recently reported, this explosion in wireless data
    usage is not only driving consumer demand for full Internet browsing,
    media-rich applications, and streaming video content on mobile devices,
    but also has the potential to facilitate significant productivity
    improvements in American businesses, including mobile
    videoconferencing, real-time remote access to inventory and sales data,
    and other business-to-employee and business-to-customer applications.
        In order to keep pace with this growth and continue to fuel the
    economic engine it represents, the wireless industry needs access to
    more radiofrequency spectrum--the most critical input for wireless
    carriers. CTIA first identified a looming spectrum crisis in 2009, when
    it urged U.S. policymakers to ``immediately launch an effort to
    identify and allocate significant amounts of additional spectrum for
    commercial wireless services'' in order to meet the demands of
    consumers and businesses that were, and still are, increasingly
    dependent on ``wherever, whenever'' access. As FCC Chairman Genachowski
    more recently noted, spectrum is the ``oxygen'' of the wireless
    industry, and ``if we don't free up more spectrum, we're going to run
    into a wall that will stifle mobile innovation, hurting consumers and
    slowing economic growth.'' While carriers have responsibly used
    advanced technologies to get the most out of their existing spectrum
    and have used unlicensed Wi-Fi spectrum to ``offload'' traffic from
    carrier networks, those efforts are simply not enough. Carriers must
    have access to additional licensed spectrum in order to keep up with
    technological developments and consumer demand.
        Unfortunately, the sources of additional spectrum are limited to
    existing non-government users and Federal users. On the nongovernment
    side, the FCC and Congress have taken aggressive measures to free up
    additional spectrum. For example, in last year's Middle Class Tax
    Relief and Job Creation Act, or the Spectrum Act, Congress authorized
    the FCC to conduct ``incentive auctions'' that may result in the
    conversion of some television broadcast spectrum for wireless broadband
    use. The FCC has already initiated a rulemaking proceeding to begin to
    implement that legislation.
        On the Federal side, Congress has long recognized the importance of
    converting underused spectrum to commercial use. Twenty years ago, in
    the Omnibus Budget Reconciliation of 1993, or OBRA-93, Congress
    required the Secretary of Commerce to identify spectrum that could be
    used for commercial purposes. The Balanced Budget Act of 1997 also
    required the Secretary to identify additional spectrum. The Advanced
    Wireless Service (AWS) spectrum that many carriers use today was made
    available as a result of OBRA-93. Congress took similar action in last
    year's Spectrum Act, mandating that the Secretary of Commerce identify
    15 megahertz of spectrum that could be converted to commercial use. The
    15 megahertz in the 1695-1710 MHz band has recently been designated for
    such use and FCC Chairman Genachowski has said the spectrum may be
    auctioned as soon as September 2014. CTIA recently urged the FCC to
    initiate a process to convert the 2095-2110 MHz band for terrestrial
    wireless use and to pair it with the 1695-1710 MHz band, pointing out
    that the 2095-2110 MHz band is ideally suited for mobile broadband.
        However, more work is necessary to make additional spectrum
    available. CTIA recognizes the essential role spectrum plays for
    government users, just as it does for commercial entities. According to
    a 2011 GAO study though, the Federal Government operates in
    approximately 70 percent of the spectrum below 3 GHz--18 percent on an
    exclusive basis and 52 percent on a shared basis with non-government
    users. Just as it is appropriate to ensure that spectrum available to
    the private sector is being used efficiently and for the most highly
    valued services, the Federal Government must evaluate the use of its
    spectrum and--when it can be made available for commercial operations--
    it should be. The President recognized the need to provide additional
    spectrum for broadband services and to look at Federal spectrum as part
    of this effort when he issued a Memorandum in June 2010 directing the
    National Telecommunications and Information Administration (NTIA) to
    review Federal spectrum use and provide a plan to make 500 megahertz
    available.

                      SHARING IS NOT THE LONG-TERM ANSWER

        In order to satisfy the need for additional capacity, carriers need
    to be able to access spectrum on an exclusive basis. Although the
    wireless industry is examining whether it can share with Federal users
    on a limited basis and supports continued study of technologies that
    can facilitate greater and more dynamic spectrum sharing, shared use of
    spectrum is not a viable long-term solution. The technologies for such
    real-time, intelligence-based sharing are not available today, have not
    yet been proven effective, and will not yield the capacity required to
    satisfy the growing demand for broadband capacity. In addition, except
    for limited cases, shared spectrum is an inadequate resource because it
    is available only some of the time in particular places. Sweeping
    conclusions that shared use is the only future are therefore simply
    inappropriate. In the early 2000s, the wireless industry faced a
    similar ``solution'' to spectrum needs -ultra-wideband. Many people
    claimed that UWB devices could utilize spectrum more efficiently and
    that their commercial availability was ``right around the corner.''
    Eleven years later, CTIA is glad that policymakers focused on clearing
    and auctioning several bands of spectrum, driving our world-leading
    wireless ecosystem, while still allowing the market to go forward to
    investigate UWB.
        Sharing can be a tool to facilitate the transition of government
    spectrum to commercial use, but the ultimate goal should be
    reallocation to the extent possible. Indeed, Congress recognized as
    much when it directed NTIA in the Spectrum Act to ``give priority to
    options involving reallocation of the band for exclusive non-Federal
    use and [to] choose options involving shared use only when it
    determines . . . that relocation of a Federal entity from the band is
    not feasible.'' This preference for exclusive use has helped foster the
    U.S. wireless industry's deployment of mobile broadband networks and
    provided tremendous economic benefits for U.S. consumers and
    businesses. In short, sharing is one of many available tools, and as
    technology advances it may provide additional opportunities for
    maximizing efficient use of the spectrum. Today, shared spectrum can
    help supplement a provider's exclusive spectrum, but it cannot replace
    it, nor does it provide the incentives or certainty necessary for
    carriers to make the very substantial investments needed to deliver
    world-leading, high quality mobile broadband services to American
    consumers.

          THE 1755-1780 MHZ BAND IS UNIQUELY SUITED FOR COMMERCIAL USE

        Therefore, additional spectrum that can be used by carriers on an
    exclusive basis must be identified. One frequency band that would be
    particularly helpful in allowing wireless companies to meet rapidly
    expanding demand is the 1755-1780 MHz spectrum. In the United States,
    the band is currently used by DOD and other Federal agencies. However,
    the band is identified internationally for commercial mobile services
    and is used for that purpose throughout most of the world. Reallocation
    of the band would therefore harmonize U.S. allocation of spectrum with
    international use. The 1755-1780 MHz band is also immediately adjacent
    to existing domestic wireless commercial spectrum and would therefore
    fit seamlessly into the current mobile broadband spectrum portfolio,
    allowing for more immediate equipment development and deployment and
    facilitating easy migration of existing and developing technologies to
    these bands. Creating a domestic allocation that is consistent with
    international use will produce economies of scale and scope, making for
    a more robust equipment market for the band, lowering costs, and
    speeding implementation. International harmonization of this spectrum
    will also facilitate consumers' use of their wireless devices while
    traveling to other countries by alleviating compatibility problems.
        There is broad support in the wireless industry for pairing the
    1755-1780 MHz band with spectrum currently available for licensing at
    2155-2180 MHz. The Spectrum Act requires the 2155-2180 MHz band to be
    licensed by February 2015. The 1755-1780 MHz band should be available
    in the same timeframe so that the two bands can be made available
    together. The benefits of pairing 1755-1780 MHz with 2155-2180 MHz,
    which will permit alignment with existing services, facilitate faster
    deployment of services, provide consistency with international
    allocation of the band, and maximize efficient use of the spectrum, are
    also reflected in how the spectrum is valued. A study by the Brattle
    Group found that auctioning the 2155-2180 MHz band by itself would
    yield $3.6 billion--but auctioned together with 1755-1780 MHz band, the
    pair would generate $12 billion. Auctioning these bands on a paired
    basis would therefore ensure the best economic return for taxpayers, as
    well as the most efficient use for broadband services.

         CONGRESS HAS PROVIDED PROTECTION FOR RELOCATING FEDERAL USERS

        If the 1755-1780 MHz band is reallocated for commercial operations,
    Federal users of the band would be completely compensated when they are
    relocated from the spectrum, just as they have been in past
    reallocation of government spectrum. For example, the wireless industry
    and Federal users cooperated in the relocation of operations from the
    1710-1755 MHz band so that AWS spectrum could be made available. Now,
    thanks to the Spectrum Act, Federal users are even better protected
    when their spectrum is reallocated. In that Act, Congress made
    important changes to the Commercial Spectrum Enhancement Act (CSEA)
    which provides resources for government agencies to study relocation
    options and to update equipment to facilitate clearing or shared use of
    spectrum. In particular, the Spectrum Act allows NTIA to provide
    Federal agencies with compensation from the Spectrum Relocation Fund
    for ``relocation or sharing costs'' associated with the reallocation
    and auction of spectrum from Federal to non-Federal or shared use prior
    to auction. Those funds can be used for planning, equipment upgrades,
    spectrum sharing costs, and pre-auction planning costs associated with
    relocation or sharing. These changes to the CSEA provide the resources
    necessary to study and implement relocation or modernization of Federal
    systems.
        These new protections are in addition to other existing provisions
    which ensure that Federal operations are not harmed as a result of a
    reallocation of spectrum. First, relocation costs, which now include
    ``the acquisition of state-of-the-art replacement systems'' and which
    are covered by the Spectrum Relocation Fund, would be funded through
    the proceeds of the auction ofthe band to commercial licensees. Second,
    the Secretaries of Defense and Commerce and the Chairman of the Joint
    Chiefs of Staff would have to certify that relocation spectrum
    identified by NTIA and the FCC ``provides comparable technical
    characteristics to restore essential military capability,'' as required
    by the National Defense Authorization Act for Fiscal Year 2000.
    Finally, Federal agencies would also have the procedural protections of
    the CSEA, as recently amended, which requires NTIA review and approval
    of Federal spectrum users' relocation plans.
        These protections can result in a win-win-win for the American
    public, Federal users and wireless carriers. As part of the process of
    relocating to new systems, Federal systems, many of which are decades-
    old and outdated, can upgrade to the newest technology--much of which
    requires less spectrum to perform the same functions as existing,
    spectrum-intensive equipment. Purchasing state-of-the-art equipment
    with auction proceeds will reduce ongoing maintenance and procurement
    costs for Federal agencies, freeing up scare resources under current
    budget caps. Wireless carriers can then use the relinquished spectrum
    to provide services and grow the economy. All Americans will benefit in
    three ways--by having their government use state-of-the-art secure
    technology to serve the public, by the growth in the economy that more
    wireless broadband spectrum will produce and by having wireless systems
    better equipped to meet increasing demand and technological change.

     IMPORTANT FIRST STEPS HAVE BEEN TAKEN TO MAKE THE 1755-1780 MHZ BAND
                                   AVAILABLE

        I am pleased to report that the wireless industry has already been
    working with NTIA to examine how the 1755-1780 MHz band can be made
    available for commercial use. First, the FCC has issued an experimental
    license for the wireless industry to test the suitability of mobile
    broadband services in the band. As part ofthis effort, carriers have
    monitored Federal operations in the band and gathered information about
    the uses of the band. Those monitoring efforts are now complete and the
    wireless industry was able to learn more about the systems that operate
    in the band and the spectrum environment generally in which Federal
    systems operate. Wireless carriers, along with NTIA, are evaluating the
    information they gathered in order to decide how to proceed. The next
    step, as far as the wireless industry is concerned, is to conduct
    laboratory analysis to determine when harmful interference might
    actually occur. While some within the Federal Government believe that
    only theoretical analysis is required, the success ofthis endeavor
    depends in part on the willingness of the wireless industry to invest
    billions of dollars to put this spectrum to commercial use. Our members
    would do so more confidently with more real-life tests.
        Second, and in conjunction with monitoring in the 1755-1780 MHz
    band, members of the wireless industry are participating in Working
    Groups created under the auspices of the NTIA's Commerce Spectrum
    Management Advisory Committee, or CSMAC. Working Groups have been
    created to study each of the Federal systems operating in the 1755-1850
    MHz band. These groups provide a forum for an exchange of technical
    information between Federal entities and industry regarding their
    respective systems and for discussion and exploration of potential
    solutions for relocation of Federal operations or for sharing.

            IMPEDIMENTS TO THE USE OF THE 1755-1780 MHZ BAND REMAIN

        While there has been significant discussion and cooperation between
    industry, DOD and other Federal entities, the current effort is
    insufficient to make the 1755-1780 MHz band available for commercial
    operations, consistent with the President's directive, in the timeframe
    necessary. Among other reasons, current efforts have not moved away
    from worst-case technical assumptions of sharing with each Federal
    system to a more realistic analysis and interactive dialogue about what
    can be done by both industry and Federal agencies to make 1755-1780 MHz
    available in a meaningful way while meeting the needs of Federal
    agencies. In light of the upcoming deadline to auction the 2155-2180
    MHz band, with which the 1755-1780 MHz band would be best paired, it is
    critical that these issues be resolved soon.
        As an initial matter, tighter processes must be established by
    which Federal entities are required to cooperate in evaluating spectrum
    availability. The Spectrum Act contains specific timeframes for Federal
    entities to act once spectrum is identified for auction. In that case,
    Congress realized that Federal entities should not unnecessarily delay
    the clearing of spectrum for commercial use. Unfortunately, there are
    no timeframes established for cooperation prior to the time that
    spectrum is identified. In the current evaluation of the 1755-1780 MHz
    band for example, it took 6 months to execute a memorandum
    ofunderstanding, or MOU, governing how monitoring should be conducted.
    Federal agencies are legitimately concerned about the dissemination of
    confidential information that may be produced during the spectrum
    evaluation process. However, that concern and the failure to develop a
    process that allows for productive discussion while protecting
    legitimately sensitive information has impeded the free flow of
    information and prevented evaluation or even consideration ofmeaningful
    solutions. Federal entities must be able to more quickly assess
    information that requires a high level of protection while not
    subjecting all information exchange to the same restrictive processes.
    These and other steps involved in identifying and making spectrum
    available should be streamlined, as other aspects of the spectrum
    reallocation process already are based on Congressionally mandated
    timetables for action.
        Second, Federal entities must engage in more realistic assessments
    of the impact of reallocation. As I mentioned earlier, in its recent
    evaluation of the exclusion zones necessary for commercial use of
    Federal spectrum, DOD has consistently made worst-case assumptions,
    resulting in a larger-than-necessary area within which commercial
    operations would be prohibited. While the wireless industry wishes to
    ensure that Federal operations receive the protection they need, it is
    not in the public interest for them to receive a level of protection
    unsupported by sound engineering practices. The worst-case analysis
    combined with a lack of dialogue regarding operational issues dooms any
    consideration of sharing options and results in wasted time and effort.
        Similarly, NTIA's estimate of the economic impacts ofrelocation
    must be more realistic. Overstating these costs could lead to a false
    conclusion that the spectrum should not be reallocated, producing a
    missed opportunity to deliver the benefits ofbroadband to all
    Americans. In the experience of the wireless industry during the A WS
    relocation process, Federal entities often overestimated the time and
    costs ofrelocation. In fact, in NTIA's Fifth Annual Report on the A WS
    spectrum relocation process, it reported that the DOD (in particular,
    the Navy) returned over $51 million dollars back to the Treasury.
    NTIA's current estimated costs for relocating systems from the entire
    1755-1850 MHz band is $18 billion, but DOD earlier estimated that it
    would cost only $4.6 billion to clear the entire band. There must be a
    more reliable review of the costs for relocating Federal users.
        Finally, NTIA must begin to focus on the 1755-1780 MHz band in
    particular, not the broader 1755-1850 MHz band. FCC Chairman
    Genachowski has already announced that the FCC may auction that
    spectrum as early as September, 2014. However, current efforts to make
    that spectrum available are at an impasse because of an insistence that
    a complete solution be developed for the entire 1755-1850 MHz band
    before any decision is made with respect to the 1755-1780 MHz sub-band.
    The current course will fail to develop a solution in the time required
    to auction 1755-1780 MHz paired with 2155-2180 MHz and will result in
    missed auction revenue and a missed opportunity for Americans to
    benefit from greater access to broadband. While 1780-1850 MHz is
    desirable spectrum, there are no immediate plans by industry to make
    use of the band. In contrast, the 1755-1780 MHz band is uniquely
    valuable because, among other things, of the pairing opportunity with
    2155-2180 MHz. The 1780-1850 MHz portion of the band has no such
    immediate pairing opportunity. Because 1789-1850 MHz is situated
    between two uplink bands--bands used for transmitting from user devices
    to the base station--it would also be most effectively used as
    additional uplink spectrum. However, it would require a corresponding
    downlink band--a band used for transmitting from base stations to user
    devices--to be useful. Because a matching downlink band is not
    available today, the value and use of 1780-1850 MHz is currently
    limited.
        Additionally, in assuming that the entire 1755-1850 MHz must be
    relocated now, DOD has focused on the 2025-2110 MHz band as replacement
    spectrum. That band would be valuable as commercial downlink spectrum,
    like most of the 1930-2200 MHz band in which it is located. While not
    the same as paired spectrum, downlink spectrum can be effectively used
    without a corresponding uplink. It is therefore unlike the 1780-1850
    MHz band, for which there is no current need, which is best used for
    uplink but for which there is no paired spectrum available.
    Accordingly, it would not be sound spectrum policy to relocate Federal
    systems out of the 1780-1850 MHz band now to another band like the
    2025-2110 MHz band.
        Rather than continue down the current course of studying
    reallocation of the entire 17551850 MHz band, efforts should be focused
    on reallocation of the 1755-1780 MHz sub-band in the near-term. Sharing
    or relocation studies for the 1780-1850 MHz band should continue, in
    aGcordance with Federal requirements and long-term technology upgrades.
    However, near-term action to auction the 1755-1780 MHz band paired with
    2155-2180 MHz will relieve the growing pressure for spectrum, while
    allowing Federal agencies reliable access to 1780-1850 MHz for at least
    10 years.
        With a focus on 1755-1780 MHz, additional Federal assignments in
    that band should not be permitted. In addition, Federal agencies should
    be required to provide reliable estimates for clearing the 1755-1780
    MHz band, not the entire 1755-1850 MHz spectrum. NTIA's Fifth Annual
    Report, for example, examined the entire 1755-1850 MHz band. NTIA did
    not provide estimates for relocation ofjust the 1755-1780 MHz band.
    While reallocation of the entire band may ultimately be desirable, the
    immediate focus should be on 1755-1780 MHz.
        NTIA has consistently asserted that the 1755-1780 MHz band is
    difficult to reallocate because of the operations located through the
    entire 1755-1850 MHz band. It should, however, determine the operations
    that operate uniquely in the 1755-1780 MHz band in order to better
    assess operations that must be relocated. Systems that operate
    throughout the 1755-1850 MHz band can use other parts of the spectrum
    unless NTIA demonstrates why that is not feasible. Relocating those
    systems from the 1780-1850 MHz band can be part of a longer-term
    evaluation of spectrum reallocation.

                                   CONCLUSION

        CTIA and its members support exploration of spectrum sharing with
    Federal users but believe that sharing is not the long-term answer. To
    the contrary, in order to create certainty and to incentivize wireless
    carriers to make investments that will benefit the American economy and
    consumers, the ultimate focus should be on reallocation of spectrum to
    carriers on an exclusive basis. To that end, the 1755-1780 MHz band,
    coupled with the 2155-2180 MHz band that is already available for
    licensing, is ideally situated for commercial use. However, cooperation
    between Federal and non-Federal users is necessary to achieve the
    benefits that would result from commercial use of these paired bands.
    Congress has made important changes to Federal law in order to provide
    economic and procedural protections to Federal users as they are
    relocated. At the same time, tighter processes must be established to
    ensure that Federal users do not unnecessarily delay this consideration
    or otherwise engage in unrealistic assessments that may impede
    reallocation. This cooperative approach, along with an increased focus
    on the 1755-1780 MHz band specifically, will allow the wireless
    industry and Federal users to develop a plan that fully utilizes scarce
    resources in order to meet the mounting demand for additional wireless
    broadband capacity.
        Thank you again for the opportunity to appear before you today.
    CTIA appreciates this subcommittee's continued focus on this important
    issue and looks forward to working with this subcommittee, Congress,
    NTIA, DOD, and the FCC on these issues.
        [The information referred to follows:]

        Senator Udall. Thank you for that summary.
        Let me go right to General Wheeler. General Wheeler, it is
    my understanding that DOD, along with other agencies, resides
    in the block of spectrum from 1755 to 1850 megahertz. It has
    been proposed to transition from this spectrum as a part of the
    President's initiative to free up 500 megahertz for commercial
    use. But the estimated cost for this block is $18 billion.
        How hard is it to remove some elements from the lower 25
    megahertz block in that 755 to 780 megahertz band, and how does
    time play a role in any movements from this block?
        General Wheeler. Thank you, Mr. Chairman.
        I think the way to think about this is we moved out of the
    1710 to the 1755 megahertz band, retuned, as was discussed
    before in the GAO discussion, into this new band area, the 1755
    to 1850. So we have approximately 100 systems in that
    particular area, most of which range the whole band, not just
    the lower portion of the band per se. So they go from the
    bottom of the band to the top part of the band.
        That was why the NTIA pushed for us to go ahead and take a
    study of the whole band and move that to another location, and
    also because from that particular perspective, giving a larger
    piece of spectrum--it is easier to do it from an auction
    perspective. So if you just do that lower portion, since we
    have to move many of the systems, even though it is just in the
    25 megahertz, because they range the whole area, you do not
    save much cost by virtue of the whole band versus just the 25
    megahertz of the band.
        That part of the particular band of looking at that study
    of just 25 megahertz has not been completed because there is no
    other band for us to go to at this point that has been
    proposed. So the bottom line to it is we took a look at it from
    the whole 95 megahertz perspective and looking at going to 2025
    to 2110, which is what all of our costs are based on.
        Senator Udall. Let me continue in that vein. I understand
    that one issue that is hindering communication between DOD and
    the industry is the sharing of classified information. To work
    through the problem, it has been proposed that we establish a
    trusted agent program--I think you are familiar with the
    concept--someone from industry with the proper clearances who
    can be trusted by both DOD and industry to relay information
    back and forth to the parties.
        What is the status of the trusted agent, and do you believe
    having one is a useful step forward?
        General Wheeler. Yes, sir. Bottom line is, yes, I think it
    is a useful tool to have in this. What we have out there is we
    have working groups that work through the specific issues
    associated with each of the bands. What comes out of it is a
    group of analysis methods and some conclusions. That is shared
    openly between the groups. We have American citizens and non-
    American citizens on these particular groups.
        What industry has asked for is to go into the analysis
    deeper and to see exactly where all of the issues are
    associated with that particular analysis. So what we have done
    is we give the data to, normally, the NTIA and the FCC, and now
    we are working through the authorization to allow specific
    people from specific parts of the industry that are
    representative to have that particular data. That is presently
    in general counsel right now and it is going through
    authorization for us to do that.
        Senator Udall. So there might be more than one trusted
    agent. You might have some trusted agents.
        General Wheeler. We are looking at 12 right now, 12 have
    been set forward that is going through the process right now to
    have those authorized to do it.
        Senator Udall. So you are implying you think that is a
    useful step?
        General Wheeler. I think that is a useful step in that I
    think it builds trust. It builds transparency in there. The
    fact of the matter is we give them all the analysis methods
    today and we give them all the actual results. It is just how
    we go through the specific aspect of each part of the analysis.
    That is closed because of the classification, because it is not
    just a FOUO, for Official Use Only data, but it is also Secret
    and Top Secret data, and all of those are mixed. So that is the
    reason why we have to have the trusted agent aspect.
        Senator Udall. Mr. Goldstein, let me turn to you and ask
    you how well did DOD estimate the cost of relocating. How hard
    is it to factor in the time to relocate, given the complexity
    of many DOD systems?
        Mr. Goldstein. Thank you, Mr. Chairman.
        We think DOD did a pretty good job, given that this was
    really a feasibility study approach that they did in
    conjunction with other agencies and with NTIA. When we looked
    at our cost guides, we found that in most of the measures we
    looked at, they did well.
        However, the biggest problem we face is uncertainty. We do
    not know when an auction would occur. We do not know over what
    period of time an auction would occur. We do not know at this
    point in time, as General Wheeler said, where a lot of systems
    would be relocated to. We do not know inflation factors. There
    are so many unknowns at this point in time that developing a
    more robust estimate which, of course, DOD would do down the
    line, is something that we just cannot work through at this
    point until we know more from the FCC and ultimately the NTIA.
        Senator Udall. Thank you for that.
        Let me turn to Senator Sessions.
        Senator Sessions. Thank you.
        General Wheeler, just fundamentally how would you say DOD
    looks at this? Positive, negative, neutral?
        General Wheeler. I would argue from the senior military
    side to this, they see that the strength of our Nation rides on
    the strength of its economy, and I believe that, sir. I think
    that they want to find a solution to this because they see
    lighting up this Nation with broadband is a positive economic
    piece to us. So I would argue that all the workings that I do
    and all the folks that I talk to in there understand that this
    problem needs to be from both a military continuing on with our
    capabilities, because we provide some very unique capabilities,
    but also the fact of the matter is we have to do this for the
    economy because it is about real jobs. So we understand that.
        Senator Sessions. You do not doubt that it can be done
    without undue risk in the movement.
        General Wheeler. I think if we were to move, for example,
    in the 1755 to 1850, just for an example, the 2025 to 2110, I
    think our studies show that it is doable. With the proper time
    and money, we can make this happen and move over to that
    particular spectrum. The studies that we have done have shown
    that that is to be true.
        Senator Sessions. I noted, General Wheeler, the FCC
    informed the Department of Commerce it intends to commence
    auction on the truncated 1755-1780 megahertz band as early as
    September 2014. Do you think that is premature?
        General Wheeler. I think there are a couple of problems
    with it. Where are we going to go is the real question at that
    particular point because that is not in the FCC's transmission
    of their letter. There is no proposal as to, okay, for DOD, you
    are going to move to this particular band or go over to this
    part with your systems and move. So for us, it is a difficult
    aspect as to how do we study this and how do we take a look at
    it because there is a requirement for us to present a study as
    to how we would do that. So there is no actual direction for us
    to go as to what we are supposed to do in the next steps to
    move into another band.
        Senator Sessions. Mr. Goldstein, as I understand it,
    Federal law requires the auction revenue to be at least 110
    percent of the cost of relocation for an auction to take place.
    Is that correct?
        Mr. Goldstein. Yes, Senator, it is.
        Senator Sessions. Given the Government-wide costs to
    relocate, there has been an estimate as high as $18 billion?
        Mr. Goldstein. $18 billion, yes, sir. That is the current
    estimate.
        Senator Sessions. Is an auction of the entire band likely
    to reach the 110 percent requirement?
        Mr. Goldstein. Once again, sir, I think it is probably
    premature to know. There are still so many factors out there
    because not only do we not know the length and time of the
    auction, where various systems would end up going, we do not
    know the price. There is only one study that I am aware of that
    has been done. It is several years old by an economic
    consulting group that basically makes assumptions that the
    price would be essentially the same price it was in the last
    auction adjusted for inflation. That may or may not be true. So
    there are still so many variables. It is truly hard to know.
        Senator Sessions. Mr. Guttman-McCabe, do you have any
    comment?
        Mr. Guttman-McCabe. I do, Senator. I think it is important
    maybe just to take a half step back.
        So the letter that I asked for consent to enter into the
    record specifically asks NTIA to focus just on that lower 25
    megahertz. The General is right. There really has not been a
    study on that 25 megahertz, and there has not been a full
    analysis of the $18 billion for the entirety of the band.
        So what we are asking for is a focus on the 25 megahertz
    because of two important things. One is there is a natural pair
    for it that our systems can use and that pair is scheduled for
    auction by congressional mandate, and it has to be actually
    allocated and assigned by February 2015. So there are 25
    megahertz that is about to be auctioned, and we are looking for
    the pairing for it. The natural pairing is the lower 25
    megahertz that General Wheeler referenced.
        What we are trying to get a sense of is what needs to
    happen with that 25 megahertz. Do all the systems need to be
    relocated? Can some of them be retuned? Can we move forward
    quicker with that 25 megahertz? The remaining 70 megahertz has
    no natural pairing to it. So the industry did not say let us
    look at this 95 megahertz. The industry said, I want to say
    maybe a half dozen years ago, let us look at the 25 megahertz.
        In the interim, Congress has moved forward mandating an
    auction of a natural pairing for it. So what we are asking is,
    can we really focus on that 25 megahertz such that it can be
    auctioned in a way that it is valuable to the industry?
        I would love to hear what General Wheeler says, but I also
    think we have to move a little bit quicker. It took us 6 months
    to execute a nondisclosure agreement with DOD. So 6 months just
    to put a nondisclosure agreement together so we can move
    forward with this analysis.
        We do, we need to have a little bit of alacrity here
    because we have a deadline for the other half of the auction,
    and that spectrum, if auctioned unpaired, will bring a
    fraction--and I think Mr. Goldstein might agree with that--as
    compared to if it were paired with the spectrum that we are
    looking at.
        So right now, you have the uplink spectrum that would be
    auctioned and it would be auctioned by itself, which is not
    beneficial to the wireless networks in the United States. So we
    are looking for a pairing, and that logical pairing is the
    bottom 25 megahertz of the entire band that the General is
    looking at.
        Senator Sessions. Considering the statute, the 110 percent
    rule, are you concerned that that may not be reached?
        Mr. Guttman-McCabe. I hate to say this because it is almost
    against interests, but our members seem to pay more and more
    every time they come to auction, right? So the last two
    auctions raised $33 billion combined. We have a couple of
    auctions coming up. We see usage--we call it a hockey stick.
    The usage rates are just going through the roof. When we began
    this process in 2009 and said there was a looming spectrum
    crisis, there were not tablets. There were not what we call
    verticals. So there was no medical usage, no smart grid, no
    education. The uses have changed dramatically even since we did
    a call to arms to say something needs to be done. So, again, I
    am hesitant to say it but I think it will raise a great deal of
    money.
        I think what we need to do is find out logically what is on
    the other side of the equation. When we did this 10 years ago
    when I first started at CTIA, we did it for the advanced
    wireless service band. The initial DOD estimate ended up being
    400 percent above what the final amount was. So what we want to
    do is take a good, hard look at that $18 billion, but really
    zero in on the 25 megahertz, what is in there, what needs to be
    moved or what can be retuned, what can we help to upgrade. In
    this environment of budget constraints, what can we take this
    money to legally outside of the sequestration process and
    outside the budget process? What can we do with this money to
    help some of these systems upgrade to advanced technologies? It
    is all incumbent on us zeroing in on that 25 megahertz.
        Senator Sessions. Thank you. It is a complex and important
    matter.
        Senator Udall. Thank you very much.
        Senator Fischer.
        Senator Fischer. Thank you, Mr. Chairman.
        So we have a finite resource, and we have a resource that
    is very valuable. You said the cost or the value of it is
    increasing like a hockey stick, and I see that becoming even
    more valuable as we see technology advancing.
        Focusing on the lower 25 here, General Wheeler, in your
    prepared statement you said it is important to understand the
    long-term status of the full band as part of any decision on
    the lower 25 megahertz. Do you feel that the DOD can consider
    the lower 25 at this point without having a full plan in place,
    without looking at what is going to happen to the rest of it?
    Can you look that far into the future?
        General Wheeler. I think the way I would approach it is the
    fact that--if I could give you an illumination of some of the
    systems that are in the band. We are looking at airborne
    platforms that go across the whole United States that actually
    span that whole band. We actually have satellite control
    functions that are in the 1755 to 1780 type area. So of those
    100 systems, most come across that whole area. That is really
    the problem. By just going after that 25 megahertz, we really
    have to redo all of the systems. So where do we put those
    systems since we retuned out of the 1710 to 1755 and many of
    these receivers and transmitters no longer have the ability to
    do that? They are actually at the high end of their capability.
    So we are going to have to move them to a separate band.
        We have not done a specific study, directly to your
    question, ma'am. So that part of it is definitely something
    that we can do. We are directed through the Department of
    Commerce or NTIA to do what we are supposed to look at, and we
    put all of our assets, if you will, on the movement of us from
    the 95 megahertz out of that particular band because the other
    fear we have at this particular point is we only finished
    moving out of the 1710 to 1755 in March, and we were told to
    move to the 1755 to 1850 because that was supposed to be where
    we were going to reside for the future. Then now it has only
    been a year later and we are told we are going to have to move
    out of that and just try to push your systems into a different
    area. We are trying to find a place where we can go actually
    reside without actually affecting the commercial aspects. We
    believe that is important for them as well. So we are trying to
    move out of the whole band.
        Senator Fischer. Did I understand you earlier when you said
    that this bandwidth that you are currently on now--DOD uses
    that in the United States, but internationally it is used
    commercially?
        General Wheeler. In different parts of the world, it is
    used for different parts, but that is true.
        Senator Fischer. How does that play into the usage that DOD
    has? How does that work when we are overseas? How do we
    accommodate our system to work on this?
        General Wheeler. An interesting question, ma'am, because
    what happens is our allies do not have enough training
    frequencies to come to. So they actually come to the United
    States to do the training with us and use our systems in many
    cases because we have the airspace, for example, we have the
    ground ranges, and we have the actual capabilities with that
    spectrum to train with them. So it is part of the training that
    we actually do with all of our allies for Afghanistan, Iraq,
    and all those different locations. So they come back over to
    our side.
        From a satellite perspective, ma'am, when we control a lot
    of our satellites, that particular realm, they just happen in
    geographical areas within the United States. It is the
    downlinks and uplinks.
        Senator Fischer. In another part of your prepared
    statement, you said that the DOD is evaluating sharing part of
    the band with the private sector. What is the status of your
    evaluation of the sharing part? Then I would like to ask Mr.
    Guttman-McCabe how he feels about sharing.
        General Wheeler. Ma'am, there are five separate working
    groups in that particular area. Some have already brought out
    their thoughts and some are completing it by the summer. We
    think there is some value in sharing. It is a way to make the
    capability for the particular bands available sooner. I would
    argue that probably a real solution out of this particular
    arena is going to be a combination of sharing while we vacate.
    So if you could look at it from that particular perspective, if
    you pair the different methodologies while you are vacating out
    of a specific band, you also share. The sharing can be either
    by time or it can be by geographic. For example, a satellite
    that is in space--they sometimes maintain 30 years of
    capability without the ability to change the frequency, but you
    can do geographic sharing there while you are waiting for the
    new system to come online.
        So we agree that sharing is a methodology for the future,
    and to be frank, with a finite resource, I think it is going to
    be the only way that we will finally get to the full solution.
    But I also believe in the short term that using sharing while
    we vacate a band is the way to get that spectrum released the
    quickest.
        Senator Fischer. On average, how long does it take DOD to
    vacate?
        General Wheeler. What they are saying in our studies right
    now, that we are looking at 10 years approximately for most
    systems. Now, to be frank, if you share while you are vacating
    in those areas, you can open up wide areas of the band within 5
    years, but just not all of it, obviously, because of the
    satellites, et cetera.
        Senator Fischer. Thank you.
        Do you want to share? Are you going to play nice?
        Mr. Guttman-McCabe. It may be overly simplistic, Senator,
    but sharing requires two parties. DOD has been good about
    opening up its information and allowing us to investigate.
    Aside from the five groups that are working through the NTIA,
    we also have--three of our carriers through CTIA have what is
    called an STA, a Special Temporary Authority. They are
    investigating independently with DOD systems.
        Now, the net result has to be that the asset can be used in
    a meaningful way, and right now what we are finding with some
    of the analysis is that the folks at DOD are taking a real,
    absolute worst-case scenario look at the analysis. I will give
    you an example.
        Two of the aerial systems, if you overlay their exclusion
    zones right now, your State may be one of the few States that
    actually has any availability in the United States. There is
    some space in Maine, some in the central United States, but in
    the majority of the United States, both geographically and
    population-based, would not be usable. So sharing when the net
    result is that you actually do not get access to the asset,
    whether it is geographic or time-based, temporal, it does not
    really drive any benefit.
        So we are investigating sharing. We have spent a
    significant amount of money working with and hiring trusted
    third party agents, Mr. Chairman, that you talked about. We are
    trying to work through what it would look like ultimately. But
    both sides need to be willing to take fresh looks at it, to
    take not aggressive but real-world looks instead of worst case
    scenario. If we do not do that, then this notion of sharing is
    almost a lost cause.
        Senator Fischer. Thank you.
        Thank you, Mr. Chairman.
        Senator Udall. Thank you, Senator Fischer.
        I am going to begin to bring the hearing to a close. Do you
    have any other questions, Senator Fischer, you wanted to ask?
        Senator Fischer. Could I?
        Senator Udall. Yes, please, yes.
        Senator Fischer. Thank you very much.
        I love this stuff. Thank you, guys. [Laughter.]
        General Wheeler, how does DOD plan to move forward on this?
        General Wheeler. Ma'am, we are continuing to work through
    the working groups right now. We are pushing hard.
        Senator Fischer. Working group studies. You are including
    the private sector, I would assume?
        General Wheeler. Yes, ma'am. The working groups are part of
    the Commerce Spectrum Management Advisory Committee groups that
    is part of Commerce that we are going forward--we are being
    aggressive in those particular areas. We are working with those
    carriers that we discussed, bringing them on the various bases,
    and trying to get an understanding of their expertise versus
    ours and what we see in the different areas. We brought them
    across the country, allowed them on the different bases to see
    if there are some ideas because we think partnering with
    industry is the way to go.
        We have used sharing a lot. If you look above that prime
    real estate below 3 gigahertz, 54 percent of our spectrum today
    is shared with Federal and non-Federal entities that we do
    today. 54 percent of that particular one we share this
    environment.
        There are some systems that are difficult to share. The
    airborne platforms are one of them, ma'am. That is why we talk
    about sharing and vacating as a package because there are
    certain systems that do not lend themselves to easy sharing,
    whereas a satellite uplink where you have geographic sharing
    capacity does because the exclusion area is relatively small
    when you look at it from a geographical perspective from the
    Nation.
        But again, from an airborne platform that rides across the
    whole Nation and does this, that is an issue. We have over
    10,000 flights using one system per year over the United
    States. It is a 24/7 operation. As an aviator and as someone
    who flies stealth air assets, it has been one of the edges that
    we have used in combat. So that is a system I would argue that
    we would have to move out of the spectrum. The ones for
    satellite uplinks I would argue is geographical sharing.
        So if you start to pair those and come up with that, those
    are real ideas to move open space and to share at the same time
    while you are finally going to vacate out there at a future
    date.
        Senator Fischer. What does the private industry see as a
    way forward on this?
        Mr. Guttman-McCabe. I think we would agree with the
    General, realistic sharing with the goal of ultimately
    clearing. I think when you talk about competitiveness around
    the world, you could name the top 10 or 15 countries we would
    want to compare ourselves to, Japan, South Korea, United
    Kingdom, Italy, Germany, France, Spain, Mexico, Canada. All of
    these countries have brought hundreds of megahertz of cleared
    spectrum to market in the last year. They all get it. They are
    all a fraction of our size, have a fraction of our usage, and
    they know they want to catch up to us in terms of our
    leadership in the mobile space.
        So for us, sharing can be an on-ramp to clearing, but to
    the extent that we can get the cleared spectrum that can allow
    us to continue to maintain the edge, we have. Military is one
    of them, but there are not a lot of areas in the United States
    that you can say we have the technological edge. We do in the
    mobile platform. We really do, and everything gets launched
    here first, and we want to maintain that. But we need real
    help. It cannot take 6 months to execute a nondisclosure
    agreement. That cannot be part of this process when we have a
    deadline, a clock, established by Congress to auction some of
    these bands.
        Senator Fischer. Thank you all very much.
        Thank you, Mr. Chairman.
        Senator Udall. Thank you, Senator Fischer, for eliciting
    some passion and helpful responses as we face perhaps having to
    play King Solomon.
        Mr. Guttman-McCabe, I want to give you the final question
    and then I will make a comment and we will bring the hearing to
    a close.
        Talk about the trusted agent concept. I asked General
    Wheeler his point of view. Share your thoughts, if you will.
        Mr. Guttman-McCabe. Yes. So I think we would support, we
    have supported it. As the General suggested, the industry gave
    DOD a list of 12 names that go across both carrier and
    manufacturer companies to try to give a broad swath of what we
    call our ecosystem. It makes sense.
        But the entities in the trusted agent environment have to
    have the requisite knowledge of our systems, of our networks.
    Our networks move so quickly that if you--and I am going to get
    myself in trouble, but if you leave it to NTIA or the FCC to be
    the trusted agents, the reality is they do not have a clear
    real-time understanding of our networks. We found that with
    some of the working groups. We went in and said, no, this is
    not what long-term evolution, our newest technology--this is
    not the power levels. They are not the outer band of missions.
    They are here. It changed some of the exclusion zones by up to
    80 percent. So we would love a trusted agent as long as those
    trusted agents have the requisite knowledge of our industry, of
    our ecosystem, and our networks.
        Senator Udall. I did hear General Wheeler talk about 12
    such agents, and what I hear you saying is let us make sure
    they know in detail. I think the General agrees.
        This has been very helpful. Senator Fischer and I come from
    a part of the country where water is a finite resource. It is
    the most valuable resource. The Office of Science and
    Technology Policy convened a group of experts who advocated
    that since spectrum was a finite resource much like water, we
    could move towards a scheme of sharing spectrum. In the west,
    our water law has led to the famous saying that ``whiskey is
    for drinking, water is for fighting over.'' [Laughter.]
        Sometimes Colorado and Nebraska team up against Kansas and
    sometimes Kansas and Nebraska team up against Colorado. But I
    would hope we could find a way to share this crucial, valuable
    finite resource with all the various nuances you all have
    shared with us.
        Thank you again for attending the hearing. We look forward
    to further commentary and testimony you might want to submit.
    We will keep the record open to ask any additional questions.
        This hearing is adjourned.
        [Whereupon, at 4:04 p.m., the subcommittee adjourned.]

    DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR
                   2014 AND THE FUTURE YEARS DEFENSE PROGRAM

                                  ----------

                              TUESDAY, MAY 7, 2013

                                   U.S. Senate,
                      Subcommittee on Strategic Forces,
                                   Committee on Armed Services,
                                                        Washington, DC.

      NATIONAL NUCLEAR SECURITY ADMINISTRATION MANAGEMENT OF ITS NATIONAL
                             SECURITY LABORATORIES

        The subcommittee met, pursuant to notice, at 2:34 p.m. in
    room SR-222, Russell Senate Office Building, Senator Mark Udall
    (chairman of the subcommittee) presiding.
        Committee members present: Senators Udall and Fischer.
        Majority staff member present: Jonathan S. Epstein,
    counsel.
        Minority staff member present: Robert M. Soofer,
    professional staff member.
        Staff assistant present: Lauren M. Gillis.
        Committee members' assistants present: Casey Howard,
    assistant to Senator Udall; Lenwood Landrum, assistant to
    Senator Sessions; and Peter Schirtzinger, assistant to Senator
    Fischer.

           OPENING STATEMENT OF SENATOR MARK UDALL, CHAIRMAN

        Senator Udall. The Subcommittee on Strategic Forces will
    come to order.
        Welcome, gentlemen.
        I have a short opening statement. I will turn to my
    colleague, Senator Fischer, and then we are very much looking
    forward to a round of questions and answers.
        This afternoon we will receive testimony from the National
    Nuclear Security Administration's, or as it is also known as
    NNSA's, laboratories for fiscal year 2014. We will receive
    testimony from Dr. Charles F. McMillan, the Director of the Los
    Alamos National Laboratory; Dr. Paul J. Hommert, the Director
    of the Sandia National Laboratories; and Dr. Penrose C.
    Albright, the Director for the Lawrence Livermore National
    Laboratory.
        In addition, we will receive testimony from Dr. Charles V.
    Shank, who is co-chairing the National Academy of Sciences
    study on the quality of science and engineering at the labs.
    Dr. Shank is appearing in his personal capacity because the
    study is not yet complete.
        I am interested in understanding four issues with the
    laboratories, and I believe this will apply to all of the
    witnesses. I would like to share those four issues with
    everybody here.
        First, are the laboratories resourced properly to meet
    their mission over the next 5 years? The administration has
    gone to great lengths in a time of great budgetary uncertainty
    and sequestration to give the NNSA an increase of 4.1 percent.
    If the resources are not adequate, I would like to hear where
    and why.
        Second, how good is the quality of science and engineering,
    and are we keeping the right mix of key personnel over the next
    5 years for the labs to meet their mission? There will be
    increased requirements in the years to come to life-extend our
    stockpile without testing. Are we training people now and are
    we retaining those who we need to train to meet this challenge?
        Third, are we able to meet and maintain our infrastructure
    needs that will allow us to respond to the upcoming challenges
    with our stockpile?
        Dr. McMillan, specific to you, I would like your frank and
    honest assessment of what happened and what went wrong with the
    Chemistry and Metallurgy Research Replacement (CMRR) project
    and what is the path forward. Plutonium science is not a
    commercial industry, and it has been a core mission of Los
    Alamos since the Manhattan Project and is integral to ensuring
    our stockpile works as intended. Do you think that mission,
    particularly its science base, will weaken over the next 10
    years?
        In that third category, Dr. Albright, I am interested in--
    based on my understanding, the restructuring at the National
    Ignition Facility (NIF) is underway because we did not achieve
    sustained fusion of the target. What is your opinion of this
    restructuring and what do you think the consequences are of not
    achieving ignition to maintaining the stockpile in the future?
        Fourth and finally, what do you think of the overall health
    of your laboratories over the next 5 years? The B61 program and
    related efforts are causing large hiring at Sandia, but can it
    be sustained with all the other efforts underway? What about
    the physics laboratories at Los Alamos and Livermore? B61 is
    not a physics program. Are you loosing key personnel and
    momentum? I need to hear from all of you about this.
        The laboratories are great assets of our Federal
    Government. They have a critical national security mission of
    using some of our best scientific minds to maintain our
    stockpile to ensure we do not need to test in the future. We
    need to maintain the effectiveness of the laboratories to carry
    out this important mission now and in the future.
        So, again, thank you for your attention. I very much look
    forward to your answers and the give and take that we will
    have.
        Let me turn to Senator Fischer for any opening comments
    that she might wish to make.

                    STATEMENT OF SENATOR DEB FISCHER

        Senator Fischer. Thank you, Mr. Chairman.
        I too would like to welcome the directors of our national
    laboratories and express my appreciation to all the men and
    women who work across the nuclear weapons enterprise. Without
    them, we could not maintain a strong and effective nuclear
    deterrent.
        There is little disagreement that the nuclear weapons
    complex must be modernized. A November 7, 2010, White House
    factsheet underscored the commitment of the President to ensure
    the modernization of our nuclear infrastructure by increasing
    funding by $4.1 billion over the next 5 years--and that is for
    fiscal years 2012 to 2016--for the NNSA weapons activities.
    This included funding necessary to complete construction of
    uranium processing and plutonium handling facilities.
    Unfortunately, due to a combination of congressional funding
    cuts and reordered administration priorities, today we are some
    34 percent, or $1.4 billion, below that stated commitment to
    add $4.1 billion.
        According to the commander of the U.S. Strategic Command
    (STRATCOM), General Kehler, fiscal uncertainty remains a
    primary concern across the budget, and some programs have the
    potential to accrue additional risk in subsequent years if
    projected efficiencies in the nuclear weapons complex are not
    realized or if fiscal year 2014 appropriations are
    significantly less than the fiscal year 2014 budget request.
        I will be anxious to hear how these funding shortfalls
    impact your laboratories and whether the lab directors believe
    they can carry out their primary missions of certifying the
    stockpile, extending the life of our aging nuclear weapons, and
    building a truly responsive nuclear infrastructure. I look
    forward to your testimony, gentlemen.
        Thank you.
        Senator Udall. Thank you, Senator Fischer.
        Let us get right to it. I think we will alternate with 8-
    minute rounds, I will recognize myself for the first 8-minute
    round.
        Oh, I am sorry. I was so eager to get to the give-and-take
    portion, that yes, you do have an opportunity for opening
    statements. Please, Dr. McMillan, I will recognize you and
    then, in turn, we will recognize the other great scientists at
    the table here. Thank you.

            STATEMENT OF DR. CHARLES F. McMILLAN, DIRECTOR,
                     LOS ALAMOS NATIONAL LABORATORY

        Dr. McMillan. Thank you, Chairman Udall and Senator
    Fischer. Thank you for the opportunity to be here today.
        I am Charlie McMillan. I am the Director of Los Alamos
    National Laboratory. I have submitted written testimony. I
    would ask that that be included for the record.
        Today, I will touch on opportunities to improve the nuclear
    security enterprise. I think that addresses some of the
    questions you had asked.
        As I stated before this committee last year, NNSA
    governance will play a role in determining both our efficiency
    and effectiveness as we address looming mission and budget
    challenges coming. The recently appointed members of the
    congressional panel on NNSA governance bring many decades of
    experience and leadership. I believe the panel will deliver
    recommendations that will foster a stronger relationship
    between the Department of Defense (DOD), NNSA, and the
    laboratories. In my view, governance is a piece of the puzzle,
    but there are other challenges as well as opportunities.
        The President's 2014 budget request is encouraging. But
    since the 2010 Nuclear Posture Review (NPR), as you said,
    Senator Fischer, we are more than $1 billion from where we had
    expected to be when we laid out the NPR. In today's fiscal
    environment, we will be challenged to execute the strategies
    that we have laid out, and in my view, we must find new ways to
    deliver the capabilities the Nation needs.
        The time has come to challenge conventional wisdom. This
    applies to big box nuclear facilities. It applies to future
    life extension programs (LEP), and it applies to work that our
    designers undertake at the laboratories. Put simply, we must
    implement a strategic risk assessment that balances value and
    cost. We must develop new approaches to sustain the stockpile
    in a more efficient manner.
        I am proud of the way that the Los Alamos team has
    challenged assumptions, and with our NNSA partners, we have
    presented a proposal for modular facilities that we believe
    deliver a win-win solution that provides plutonium capabilities
    without a big box nuclear facility. It provides a shorter
    acquisition period, smaller annual costs, and simpler
    standardized construction. It delivers capability when we need
    it rather than no capability until a full big box is completed.
        In the stockpile, my colleagues and I are applying similar
    methodologies today. Recently, subject-matter experts have been
    empowered to propose and evaluate some rather daring ideas to
    attack tough problems that have resisted conventional
    solutions. We can, and in my view, should do more.
        Of course, stability, flexibility, and predictability will
    help us. These are three things that are absent in Continuing
    Resolutions (CR). Because we have operated under CRs for the
    last several years, I have very little flexibility left at the
    laboratory for which I have responsibility to deal with that
    kind of uncertainty. Should we have another full-year CR in
    fiscal year 2014, I am concerned that it may well have negative
    impacts on the laboratory.
        Thank you for the opportunity to speak this morning, and I
    look forward to your questions.
        [The prepared statement of Dr. McMillan follows:]

                 Prepared Statement by Dr. Charles F. McMillan

        Good afternoon Chairman Udall, Ranking Member Sessions, and the
    members of the subcommittee. My name is Charles McMillan and I am the
    Director of Los Alamos National Laboratory (LANL). I appreciate the
    opportunity to be here this today to discuss the challenges facing the
    nuclear weapons enterprise today.
        Since I was last before you, Los Alamos has had to take steps, like
    the rest of the Federal Government, to deal with the consequences of
    declining budgets followed by sequestration. Although we have not yet
    had to furlough any of our permanent workforce this year, we are
    currently taking actions to constrain procurements and shrink the size
    of the subcontractor workforce. The sequester cuts resulted in roughly
    $130 million in program reductions across the Laboratory. This cut is
    on top of the roughly $450 million in reductions we have absorbed over
    the last 2 fiscal years. A little over a year ago, the Laboratory
    employed about 11,800 scientists, engineers, other professionals, and
    contractor partners. Today we are at 10,300.
        As I stated before the committee last year, NNSA governance will
    play a key role in determining both our efficiency and effectiveness as
    we address looming mission and budget challenges. The recently
    appointed members of the Congressional Panel on NNSA Governance bring
    many decades of experience and leadership in the weapons enterprise to
    this review. I am hopeful that the Panel will deliver recommendations
    that will foster a stronger relationship between NNSA, DOD, and the
    laboratories. I stand ready to work with the Panel should they ask for
    my participation. While governance will play a very important role in
    the future success of the enterprise, it is not the only piece in the
    puzzle. Future budgets and the balancing of the program will also play
    significant roles.
        The President's 2014 budget request is encouraging. Although I am
    optimistic about the request, adequate funds are only the start. It is
    necessary that we maintain and develop the connection between the needs
    of the stockpile over the next decade and strategies to care for it--
    the people, programs, and infrastructure. I am encouraged by the
    consensus I believe is emerging around the Department of Defenses'
    (DOD) 3+2 stockpile strategy, and the plutonium strategy we have been
    developing at Los Alamos. Nevertheless, we are going to be challenged
    to execute these strategies in the constrained fiscal environment our
    country faces today. We're going to need to find new ways to deliver
    the capabilities the Nation needs.
        Allow me make an analogy. You may have seen with the film
    ``Moneyball,'' based on the book of the same name. When I lived in the
    Bay Area, the Oakland As turned baseball's conventional wisdom on its
    ear. They analyzed what really mattered to win. Conventional wisdom
    said it takes home runs and batting average to win--but the As showed
    that on base percentage was a more important metric for winning.
        They challenged conventional wisdom to increase value, and Mr.
    Chairman, I submit--now would be a good time for the nuclear weapons
    enterprise to do the same. I believe we need to challenge existing
    requirements to look for flexibility in how we are currently meeting
    our programmatic deliverables.
        I am a realist. I doubt that our budgets will increase at the rate
    necessary to address both our aging stockpile and infrastructure with
    the approaches and constraints of the past. This indicates to me that
    current program models may need to be fundamentally altered to both
    maintain the deterrent going forward, and achieve a lower cost envelope
    that we can afford on an annual basis.
        Los Alamos has reduced its staff size by roughly 1,500 employees,
    we have reduced benefits, and we have developed program plans with
    increased risk that still meet deliverables. Mr. Chairman, Los Alamos
    is approaching a tipping point. I am losing my mid-career staff at an
    accelerating pace because they are finding better opportunities
    elsewhere. Our nuclear infrastructure is not being modernized, the
    costs associated with our LEP activities continue to rise, and our
    weapons designers continue to be required to focus on our aging
    stockpile.
        Infrastructure projects such as CMRR and MOX have been delayed,
    weapons experiments at important science facilities like Dual Axis
    Radiographic Hydro-Test (DARHT) and NIF are being scaled back, and our
    ability to recruit and retain staff is becoming increasingly difficult.
    It is a trend that does not bode well for us over the long-term.
        The performance and execution requirements currently mandated by
    our customers, while important, are in many cases driving cost
    escalation. Conversely, there have also been changes in requirements,
    initiated by the Laboratory and accepted by the government, that are
    creating timely options. These options can meet stockpile needs and
    manage the cash flow for execution. I believe that the approach we have
    taken at Los Alamos in providing the capabilities of CMRR--an approach
    that challenges assumptions and existing requirements--may have promise
    for other parts of the program as we move forward in a constrained
    fiscal environment.
        If, like the Oakland As, we are to have a winning strategy with a
    lower budget, we will have to make fundamental changes in our basic
    assumptions.
        As I look across the enterprise today, I see three areas of
    opportunity emerging as we manage the stockpile into the future:

             We should challenge the assumptions of ``big-box''
            style nuclear facility construction.
             We must reexamine requirements driving our future Life
            Extension Programs--concentrating on value.
             Based on this examination, we should challenge our
            weapons experts to find workable solutions.

        I believe we must look at these issues and decide very quickly how
    we are going to change the dynamic. As one of the individuals that
    assess the certification of the Nation's stockpile, I will tell you
    emphatically that it is currently safe, secure, and effective, but it
    is not without risk. We must craft a program that will underwrite this
    statement for as long as our Nation continues to require nuclear
    weapons to deter potential aggressors and assure our allies.

                      NUCLEAR INFRASTRUCTURE MODERNIZATION

        With the deferral of the CMRR-Nuclear Facility project and now the
    slowdown in the acquisition process for the MOX facility, plutonium
    capabilities appear to be on an unstable trajectory. In both cases,
    projected costs vastly exceed original estimates. There are many
    reasons why CMRR was deferred--from the incredibly long time it took to
    get from planning to design, to the many mission space requirement
    changes, and continually increasing safety and security requirements.
    Taken together, these have driven significant cost increases which are
    difficult to control and have now become common across the country in
    all of what I call the ``big-box'' nuclear facilities.
        No one at Los Alamos was pleased with the decision on deferment;
    however, this decision created a unique opportunity for us to challenge
    the requirements that drove the existing design. CMRR was designed to
    be the classic ``big box'' nuclear facility--a ``do it all under one
    roof'' design. The intersection of the ``3+2'' strategy that has been
    developed by the DOD, the pits that will be required to support that
    strategy, and the deferred construction on CMRR has forced us to
    challenge the way we are doing business at Los Alamos today.
        Working with our NNSA partners, we are recommending changes in
    requirements that are opening new options for facility acquisition.
    These changes should reduce cash flow profiles and extend the useful
    lifetime of our PF-4 plutonium pit production facility while supporting
    the Nation's need for pits over the coming decades.
        The first change occurred when the NNSA updated the 1992 assessment
    of the hazards associated with plutonium. This update allows us to
    increase the amount of plutonium in the newly completed Radiological
    Laboratory Utility Office Building (RLUOB) from 6 grams to 26 grams at
    the same administrative hazard level. This change in requirement will
    allow RLUOB to play a much bigger role in our plutonium strategy than
    previously planned.
        In the second change, NNSA has agreed to reassess requirements that
    could allow us to repurpose existing PF-4 lab space.
        Program requirements tend to follow national priorities that are
    somewhat cyclical between space exploration, nuclear power and national
    defense. These program and priority shifts typically occur with a
    period of a decade or more. Since the formative period of CMRR
    development in 2003, a decade has elapsed and there are opportunities
    to re-align portions of PF-4 that were in active use by other programs
    circa 2003.
        For example, during the Cold War, plutonium was scarce and there
    was a premium on recovering it rather than discarding it. As a result,
    almost an entire wing of the four in PF-4 is devoted to recovering as
    much plutonium as possible from the waste stream.
        Paradoxically, in another wing of PF-4 we are converting unneeded
    plutonium pits into oxide so that it can be burned in reactors to
    produce electricity. Both are using valuable nuclear facility space.
    Finally, we are working with our Federal partners to develop a new
    modular concept for smaller plutonium facilities that can be
    ``networked'' into our existing facilities PF-4 and the RLUOB. I
    believe that very large construction projects that need huge annual
    infusions of funding to stay on schedule have become too vulnerable to
    delays if a budget allocation is missed. The Achilles heel of these
    projects is cost escalation that inevitably happens when funding
    shortfalls collide with precise constructions schedules.
        Benefits of switching to the modular approach include:

             A shorter acquisition time
             Smaller annual cash flow profile
             Simpler construction of the second and subsequent
            modules through standardized design

        We have typically tried to squeeze all of our mission requirements
    into one ``big box'' that builds tens of lab modules at the same time
    in a single complex facility project. We see the consequence: no
    capability until the whole facility is finished. In challenging this
    concept we believe that the path forward is to build one module at a
    time, standardize the design of the modules and acquire what we need,
    when we need it. We believe this approach, coupled with the changes to
    PF-4 and the RLUOB, can be used to meet mission needs as we move into
    the future.
        Another concern we had when CMRR was deferred was that it pushed
    the potential construction period into an overlap with needed PF-4 life
    extension activities. I believe it would have been extremely costly to
    simultaneously build two facilities of that magnitude. In our proposal,
    we examine the possibility of reducing the amount of the high hazard
    nuclear work in PF-4 by relocating it into the new modules. This
    reduces the risk profile in the older facility while providing lab
    space for less hazardous missions such as plutonium science. The
    process of transferring risk out of PF-4 should extend its useful
    lifetime and avoid a near-term, expensive replacement project. The
    result is a win-win situation.
        I am proud of the way the Los Alamos team has demonstrated the
    creativity for which we are rightly known and has found ways to
    challenge assumptions and invent new options for the Nation. In my
    view, a similar approach could be applied to future Life Extension
    Programs.

                            LIFE EXTENSION PROGRAMS

        The 2010 Nuclear Posture Review concluded that ``The U.S. nuclear
    Triad of intercontinental ballistic missiles (ICBM), submarine-launched
    ballistic missiles (SLBM), and nuclear-capable heavy bombers will be
    maintained under New START.'' This position was based on a strategic
    risk assessment that:

              ``After considering a wide range of possible options for the
            U.S. strategic nuclear posture, including some that involved
            eliminating a leg of the Triad, the NPR concluded that for
            planned reductions under New START, the United States should
            retain a smaller Triad of SLBMs, ICBMs, and heavy bombers.
            Retaining all three Triad legs will best maintain strategic
            stability at reasonable cost, while hedging against potential
            technical problems or vulnerabilities.''

        As I examine the nuclear weapons enterprise and assess the needs of
    our nuclear deterrent in the future, maintaining the Triad on the
    current trajectory will lead to a collision between reasonable
    financial resources and mission requirements.
        In the past 15 years, the nuclear weapons enterprise executed three
    life extension projects. Today, in order to maintain the Triad, the
    Nation is faced with more complex and expensive life extension
    activities. The current B61 LEP is much more expensive than originally
    expected. The projected costs for the W78 intercontinental ballistic
    missile warhead, the W88 submarine launched ballistic missile warhead
    and the long-range standoff cruise missile warhead will likely follow
    the B61 LEP trend unless we change our approach.
        Some have suggested that smaller total stockpile numbers will lead
    to substantial savings. On the contrary, the capabilities that the
    Nation needs to have a nuclear deterrent are dominated by the cost of
    the first weapon, and as long as that weapon is in the stockpile, those
    capabilities must be sustained.
        Stockpile weapons range in age from 22-35 years old. Materials and
    testing processes of that era allowed them to be churned off the
    production line. Today, many of those materials are no longer available
    commercially or are so exotic that the specialized infrastructure that
    produced them has been abandoned. This has led to reclamation of some
    components from disassembled weapons or creation of components using
    new materials--processes that consume enormous amounts of time and
    money to ensure that these components will function as intended in the
    weapon.
        As we execute the current W76 and B61 LEPs and look ahead to the
    W78 and W88 LEPs, the Nation will be challenged to execute these
    programs in the current fiscal environment. We must implement a
    strategic risk assessment that balances value against costs to sustain
    the stockpile in a more effective manner.
        The laboratories are already applying this methodology in their
    conceptual designs for reuse of pits with insensitive high explosives
    and the development of the alternative plutonium sustainment strategy
    using the modular design concept. Carefully selected subject matter
    experts were empowered to propose and evaluate radical ideas for
    attacking tough problems that resist conventional solutions. A similar
    non-traditional approach unconstrained by the ``this is the way we have
    always done it'' mentality is needed to attack the fiscal challenges of
    the current life extension program.

                      WEAPONS DESIGNERS: LOOKING BACKWARD

        Mr. Chairman, I must discuss the most important component at each
    of our laboratories: the people. Developing programmatic options,
    reframing nuclear infrastructure requirements and proposing innovative
    solutions all depend on the creative experts directly engaged in our
    stockpile stewardship activities. Today we are fortunate to have
    experts with the breadth to work in all of these areas; however, I am
    concerned about their future.
        I am sometimes asked, ``When will nuclear weapon science be
    finished?'' My answer is, ``Only after we no longer need a deterrent.''
    I believe that expanding our knowledge in nuclear weapons science is
    the best way for the scientists and engineers to develop their own
    stockpile expertise. Like surgery, the technical aspects of deterrence
    are learned by both study and practice. As we move further from nuclear
    testing, designer expertise built on direct test experience will
    eventually disappear. The weapons experts of tomorrow cannot simply
    admire the work of their predecessors. They must make their own
    contributions.
        The nation's nuclear designers and engineers spend most of their
    time looking for and analyzing problems in aging systems. This is
    necessary and important work. As the weapons teams that have devoted
    their careers to preserving the past progress through their careers and
    ultimately retire, I am concerned that we may find ourselves short on
    the expertise needed to meet the deterrent challenges of the future. At
    some point in the future we will retire our current weapons systems.
    Even with the best of care, they are not immortal. If a nuclear
    deterrent is still required, the weapons systems will, inevitably, be
    different than those of the past. We must ensure that the scientists
    and engineers who then carry the responsibility for the deterrent have
    had the breadth of experience--experience gained through advancing
    scientific understanding and design practice rather than additional
    nuclear tests--to provide for the Nation's needs in a technical
    environment that will be substantially different than today.
        I believe that the scientific and engineering talent resident at
    each of our laboratories offers high value to this country. Many of our
    weapons experts' primary responsibilities are in direct support of the
    stockpile. When needed, they are also the first-line experts in
    analyzing the weapons activities of other countries. By investing in
    the people, tools, and infrastructure at the labs the Nation benefits
    from expertise in nuclear, chemical, and biological weapons; improvised
    explosive devices, and space situational awareness to name a few.

                                   CONCLUSION

        In conclusion, I understand the budget situation we face.
    Stability, flexibility, and predictability help me manage the
    Laboratory. These are three things that I don't have when operating
    under a continuing resolution (CR). Because we have operated under CRs
    of various lengths over the last several years, I have nearly exhausted
    my flexibility in managing during these unstable periods of time.
    Should we have to operate in another full year CR in fiscal year 2014,
    I believe significant negative impacts to the Laboratory are possible
    going forward.
        Faced with near and long-term budgetary uncertainties, I will
    continue to do everything in my power to meet our mission commitments
    within these constraints. However, I believe that challenging
    longstanding assumptions and reexamining what we have believed to be
    requirements may produce options for the stockpile that we have not yet
    imagined--options that may be more attractive in the current fiscal
    environment.
        Mr. Chairman, some may ask, ``Is the path we're on feasible?'' I
    believe that it is; however, in practice, it is going to be an
    expensive path. The national laboratories--the national treasures that
    my colleagues and I have the privilege to lead--are here to provide
    technical options. I submit that now is the time to create paths that
    sustain the deterrent while challenging the ways of the past decades.

        Senator Udall. Dr. McMillan, thank you for that. Thank you
    for your leadership at Los Alamos.
        Let us turn to Dr. Hommert who is the Director of the
    Sandia National Laboratories. Welcome.

              STATEMENT OF DR. PAUL J. HOMMERT, DIRECTOR,
                      SANDIA NATIONAL LABORATORIES

        Dr. Hommert. Chairman Udall, Senator Fischer, thank you for
    the opportunity to testify. I have submitted written testimony
    that I ask be part of the record.
        I am Paul Hommert, Director of Sandia National
    Laboratories.
        I would like to begin by putting by testimony in an overall
    context. In my view, we are now in an unprecedented time for
    the U.S. nuclear deterrent, a period when for the first time
    the nuclear weapons enterprise must address simultaneously
    three important imperatives: first, sustain a smaller and
    increasingly older legacy stockpile for many years to come;
    second, modernize the Nation's nuclear deterrent consistent
    with policy; and third, continue to advance and utilize the
    tools of stewardship and ensure an infrastructure that can
    support these imperatives.
        Sandia is engaged in all these efforts, but for us, it is
    the modernization challenge that is the most dynamic since
    these efforts revolve so much around the non-nuclear components
    for which we are responsible.
        The most significant of these efforts is the B61 LEP. I am
    pleased to report that we are now nearly a year into full-scale
    engineering development on the B61, executing the minimum
    technical scope that addresses longstanding issues with the
    system and, when complete, will provide the Nation with the
    capability that will underpin the air leg of the triad for
    decades to come. Furthermore, I am pleased to report that we
    are currently on schedule and on cost.
        Earlier today, I had the opportunity to show the chairman
    actual hardware of the joint radar module designed at Sandia
    and built at NNSA's Kansas City plant, which I brought today to
    give you a sense of how far along we are in design and
    development of the B61 LEP. This module replaces the vacuum
    tube radars in a number of our legacy B61 systems. Its advanced
    technology allows us to achieve a tenfold reduction in volume
    and greater capability. Furthermore, this module has been
    designed to be used in the Navy W88 alteration 370 and in the
    Air Force Mk21 fuze. This first-time-ever use of common
    technology results in a $170 million savings across these three
    programs.
        I would like to make one last important point. To prepare
    our laboratory for executing these challenges, we have blended
    our experienced staff with early career scientists and
    engineers from the best universities in the country eager to
    work on national security challenges. With the continued
    support of Congress, they and their colleagues will deliver an
    outstanding modernized deterrent for the Nation.
        I look forward to your questions. Thank you.
        [The prepared statement of Dr. Hommert follows:]

                   Prepared Statement by Dr. Paul J. Hommert

                                  INTRODUCTION

        Chairman Udall, Ranking Member Sessions, and distinguished members
    of the Strategic Forces Subcommittee, thank you for the opportunity to
    testify today on the administration's request to Congress for the
    fiscal year 2014 budget. I am Paul Hommert, President and Director of
    Sandia National Laboratories. I am pleased to join Charlie McMillan,
    Parney Albright, and Chuck Shank, who are here today for this
    discussion.
        Sandia is a multiprogram national security laboratory owned by the
    U.S. Government and operated by Sandia Corporation \1\ for the National
    Nuclear Security Administration (NNSA). Sandia is one of the three NNSA
    laboratories with responsibility for stockpile stewardship and annual
    assessment of the Nation's nuclear weapons. Within the U.S. nuclear
    weapons enterprise, Sandia is uniquely responsible for the systems
    engineering and integration of the nuclear weapons in the stockpile and
    for the design, development, qualification, sustainment, and retirement
    of nonnuclear components of nuclear weapons. While nuclear weapons
    represent Sandia's core mission, the science, technology, engineering,
    and business professional capabilities required to support this mission
    position us to support other aspects of national security as well.
    Indeed, there is natural, increasingly significant synergy between our
    core mission and our broader national security work. This broader role
    involves research and development in nonproliferation,
    counterterrorism, energy security, defense, and homeland security.
    ---------------------------------------------------------------------------
        \1\ Sandia Corporation is a subsidiary of the Lockheed Martin
    Corporation under Department of Energy prime contract no. DE-AC04-
    94AL85000.
    ---------------------------------------------------------------------------
        My statement today will provide an update since my testimony of
    April 18, 2012, before this subcommittee. Starting from an overall
    perspective of the nuclear weapons program and the challenges facing us
    since the end of the Cold War, I will refer to the following major
    topics: (1) Sandia's modernization programs with emphasis on the B61
    Life Extension Program (LEP); (2) technical execution of the programs;
    (3) schedule, staffing, and overall cost and performance to date; (4)
    the scientific and technical basis for long-term surveillance and
    annual assessment; (5) status of the capability base needed to support
    our mission; (6) nonproliferation; (7) broader national security work;
    and (8) governance. These issues will be viewed within the context of
    the administration's request to Congress for the fiscal year 2014
    budget and of the fiscal year 2013 continuing resolution (CR), coupled
    with sequestration.

                         MAJOR POINTS OF THIS TESTIMONY

           1.  The current scope for the B61 LEP is the minimum necessary
            to meet the threshold requirements for the B61 provided by the
            Department of Defense and NNSA.
            2.  Sandia is executing its responsibilities on the B61 LEP on
            schedule and on budget.
            3.  Based on the budgetary impacts of sequestration and current
            fiscal year 2014 budget guidance, we expect there will be
            schedule and attendant cost impacts on the modernization
            programs beginning in fiscal year 2014.
            4.  Sandia's ability to deliver with excellence on its nuclear
            weapons mission both now and into the future critically depends
            on the effective interplay between the nuclear weapons mission
            and our broader national security work.

                   PERSPECTIVE OF THE NUCLEAR WEAPONS PROGRAM

        It is my view that the Nation's nuclear deterrent is now in a new
    era, which is characterized by three major imperatives: (1) Modernize
    and reshape our nuclear deterrent as national policies evolve and
    ensure that we have staff and infrastructure requisite to this task;
    (2) sustain a smaller and increasingly older legacy stockpile for many
    years to come; and (3) continue to advance and utilize the tools of
    stewardship, which are critically important to the successful execution
    of the first two imperatives and to mitigating the long-term risk of
    technology surprise.
        We cannot pick and choose among these imperatives; rather, we must
    simultaneously make progress on all three in support of national
    policy. The combination of the three imperatives creates challenges in
    technology development and program planning and funding not experienced
    before by the program. Risk-based prioritization of the program is
    needed, along with continued emphasis on strong program management and
    cost-effectiveness.
        Sandia has key responsibilities in the areas described by each of
    the three imperatives, which I will discuss in the context of the
    administration's fiscal year 2014 budget request. Let me begin with a
    discussion of the modernization activities.

                            MODERNIZATION ACTIVITIES

        Modernizing the nuclear deterrent is guided by the strategic
    framework for U.S. nuclear weapons policy outlined in the 2010 Nuclear
    Posture Review. The challenge has been to translate that framework into
    an executable plan. We must have a clear understanding of and a broad
    agreement about the plan for our stockpile 20 years from now. That plan
    must be robust in the face of current and future treaty obligations,
    evolving policy direction, stockpile technical realities, our
    infrastructure capabilities, and realities of the fiscal environment. I
    believe such a plan has taken shape as a result of a series of
    decisions taken by the Nuclear Weapons Council over the past 6 to 12
    months.

         SANDIA'S MODERNIZATION PROGRAMS: EXECUTION, OVERALL COST AND
                           PERFORMANCE, AND STAFFING

        At present, Sandia is engaged in a broad modernization effort. The
    W76-1 is in full-scale production. The B61 LEP and the W88 Alteration
    (Alt) 370, each with a first production unit (FPU) scheduled for fiscal
    year 2019, are in full-scale engineering development. We are also
    working on the Mk21 Fuze Replacement program (also known as the W87
    Fuze Replacement), which is in the late study phase and preparing to go
    to full-scale engineering development. The life extension for a first
    interoperable warhead, the W78/88-1 LEP, is in the early study phase.
    These programs touch each of the three legs of the Nation's nuclear
    triad, and today we are successfully executing against the plans and
    integrated master schedules for the programs.

    The B61 LEP
        The B61 LEP is essential to meeting the U.S. Strategic Command's
    requirements and the extended deterrence objectives of the 2010 Nuclear
    Posture Review. The current scope of this life extension maximizes the
    reuse of nuclear and nonnuclear components while still meeting military
    requirements for service life extension and consolidation of multiple
    versions of the B61 into the B61-12, which is the name for the version
    of the weapon after modernization. The scope of the B61 LEP is
    fundamentally related to issues that have been documented in annual
    assessment letters by Sandia National Laboratories directors for a
    number of years. That a number of age-related aspects have been
    identified in surveillance of various B61 modifications (or Mods) is
    not surprising, given that some components in the B61 family are now
    older than 40 years. But there are also other factors, such as future
    lifetime, compatibility with delivery platforms, Mod consolidation, and
    technology obsolescence, all of which serve to define in detail the
    technical scope that must be executed for the life extension program.
    It is my strongly held view that the current scope for the B61 LEP is
    the minimum necessary to meet the threshold requirements for the B61
    provided by the Department of Defense and NNSA.
        It is this scope that the Nuclear Weapons Council endorsed in
    December 2011 as the recommendation for the B61 LEP with an FPU in
    2019. It should be noted that this threshold scope resulted in a 40
    percent reduction in the B61 LEP costs at Sandia over those associated
    with an earlier ``full scope'' LEP. Only one definitive cost estimate
    has been generated for the current scope of the B61 LEP, and the
    associated data were integrated across the nuclear security enterprise
    to derive a single, Complex-wide estimate. The lower costs were
    achieved by narrowing the technical scope of the program through the
    judicious reuse of certain components, coupled with robust top-down
    cost management principles that resulted in a reduced number of
    development builds and qualification testing. The overall cost of the
    B61 LEP includes approximately $3 billion for Sandia over a 12-year
    period. While the cost of the Complex-wide B61 modernization program is
    significant, over the next decade it represents less than 10 percent of
    NNSA's nuclear weapons budget. When complete, this life extension will
    provide the Department of Defense with a consolidated B61 representing
    a major element of one leg of the nuclear triad that will have reduced
    surveillance and maintenance costs and a lifetime to span decades to
    come. However, we recognize that all the work we do is occurring in a
    time of significant national budget challenge. Thus, we must ensure our
    utmost effort to deliver these programs on cost and schedule. To this
    end, we have stood up an organization to manage schedule and risks,
    staffed with professionals who have successfully managed large programs
    at Sandia involving high standards of rigor. The B61 LEP is currently
    within budget and on schedule with respect to the critical path.
        To date, we have not missed a single milestone in the program.
    Thus, we have successfully completed all the component gate reviews (or
    programmatic reviews) and all the component conceptual design reviews
    (or technical reviews). We delivered required parts for mechanical
    environments testing, and the first test body has been assembled and is
    being tested; we begin initial system-level electrical compatibility
    testing this year; and we are actively engaged with Boeing on tail kit
    assembly integration.
        I have brought with me today actual hardware of the joint radar
    module designed at Sandia and built by NNSA's Kansas City Plant as it
    will give you a sense of how far along we are in the design and
    development of this life extension. Interestingly, this module replaces
    the vacuum tube radars in a number of our legacy B61 radars. Through
    the use of advanced technology, this radar achieves a tenfold reduction
    in volume, greater capability, and resistance to countermeasures. As an
    example of one of the numerous components for the B61 LEP that are
    moving toward final design maturity, this particular component also
    illustrates our joint radar module concept. Similar hardware will
    undergo flight testing at the Tonopah Test Range for the B61 LEP and
    will be flown on a Navy Submarine Launched Ballistic Missile test for
    the W88 Alt 370 program to support our design and qualification
    process.
        Designing and utilizing this joint module for the B61 LEP, W88 Alt
    370, and Mk21 Fuze Replacement programs are estimated to save
    approximately $170 million over three separate development efforts.
    More detail on the joint radar module concept will be provided in the
    next section.
        While we are off to a strong start on the B61 LEP, fiscal years
    2014, 2015, and 2016 are crucial for maintaining the cost, schedule,
    and performance of the overall program. In this regard, we are pleased
    to see the strong support for the program in the fiscal year 2014
    budget request to Congress. However, as a result of sequestration
    impacts in fiscal year 2013 and fiscal year 2014 budget guidance below
    baseline funding requirements, it is my view that, unless this
    situation is reversed, schedule will likely be affected. I want to
    emphasize that our baseline requirements have remained essentially
    unchanged since June 2012. We continue to work with NNSA to close this
    gap while simultaneously working to minimize schedule impacts.
    Reductions from the baseline funding requirements are, in my view, the
    most significant risk to maintaining schedule and therefore the overall
    program cost.

    Further Modernization Efforts
        The B61 LEP is one in a series of programs that have been
    documented in the fiscal year 2012 Stockpile Stewardship and Management
    Plan. Among them are the W88 Alt 370 and a W78/88-1 LEP. Sandia is also
    engaged in the Mk21 Fuze Replacement program, which is entirely funded
    by the U.S. Air Force.
        Our successful record of using common technologies and components
    across multiple systems that have been deployed in the U.S. stockpile
    has helped reduce development risk and manage development costs. We are
    extending this approach to development of the Arming, Fuzing, and
    Firing (AF&F) system. Today, a modular AF&F design is being developed
    for the W88 Alt 370, the Mk21 Fuze Replacement, and potentially for the
    W78/88-1 LEP. By capitalizing on work we have done over the past decade
    on modular warhead architectures and adaptable nonnuclear components,
    Sandia is supporting the Nuclear Weapons Council's plan for stockpile
    modernization cost-efficiently and with reduced risk. Although not
    directly interchangeable to accommodate missile interface differences,
    the underlying technologies and components are eminently adaptable to
    each of these warhead applications and thus result in cost savings and
    reduced risk. In addition to the ballistic missile warhead
    applications, these same technologies and, in some cases, nearly
    identical components are being used in the B61 LEP. As in the past,
    rigorous performance testing in qualification, production, and
    surveillance mitigates the common-mode failure risks attendant to this
    approach. In addition, the silicon fabrication complex at Sandia and
    the Kansas City Responsive Infrastructure Manufacturing and Sourcing
    (known as KCRIMS) facility provide the Nation with a secure, responsive
    infrastructure for addressing production or design issues if they
    arise.
        W88 Alt 370
        Sandia is currently executing the W88 Alt 370, which involves
    replacing the Arming, Fuzing, and Firing (AF&F) system. The fiscal year
    2019 FPU schedule for the W88 Alt 370 is driven by the overall Navy
    program and schedule, components reaching their end of life, and the
    need for additional surveillance quantities. This program is aligned
    with the Mk21 Fuze Replacement program. In order to determine any
    schedule impacts, we are currently assessing jointly with the NNSA and
    the Navy the post-sequestration fiscal year 2013 funding, the fiscal
    year 2014 budget request, and the out-year outlook.
        Mk21 Fuze Replacement
        The W87 Arming and Fuzing Assembly, an Air Force subsystem,
    requires replacement with a first production unit in fiscal year 2019.
    Alignment of this program with the B61 LEP and W88 Alt 370 allows the
    Air Force to receive approximately $85 million in savings as a result
    of using the common radar module, the hardware I have shown you today.
    This program is funded entirely by the Air Force. Funding shortfalls in
    fiscal year 2013 are being worked directly with the Air Force. The Mk21
    Fuze Replacement and the W88 Alt 370 programs are highly
    interdependent: A slip to one program will affect schedule and cost for
    the other.
        Preparing the Laboratory to execute the B61 LEP, W88 Alt 370, and
    Mk21 Fuze Replacement modernization efforts has been a major focus of
    our leadership over the past several years. Our efforts have included
    collocation of the core design teams, enhancements to our classified
    networks reflective of the volume of work, and most significantly,
    staffing and training of the workforce. The staffing requirement for
    these modernization efforts exceeds 1,000 people. I am pleased to
    report that, despite numerous periods of budget uncertainty over the
    past 18 months, we have been extremely successful at staffing the
    program against a very aggressive staffing plan. Two staffing
    approaches have allowed us to achieve the required staffing levels for
    the modernization programs: (1) internal staff movements from other
    Sandia programs that require skills synergistic with those for the
    nuclear weapons program and (2) external hiring. Since 2010, we have
    hired some 500 advanced-degree scientists and engineers. The overall
    members of the workforce at the Laboratory remained essentially flat
    through this period. Of those we hired new to Sandia, approximately 58
    percent are early in their professional careers. The modernization
    program provides opportunities for these new technical staff to work
    closely with our experienced designers: from advanced concept
    development to component design and qualification, and ultimately to
    the production and fielding of nuclear weapon systems. It is very
    important that we provide individuals such as these with an environment
    where they can undertake the multiyear learning it takes to technically
    steward the Nation's nuclear stockpile now and into the future, after
    the modernized warheads are in the stockpile. We have a new and strong
    contingent of scientists and engineers prepared to take on that
    challenge, and we must strive to provide the stability, focus, and
    national commitment that will enable their success.
        At the end of this decade, upon completion of the B61 LEP, W88 Alt
    370, Mk21 Fuze Replacement, and W76-1 production, the Nation will have
    modernized at least one element of each leg of the triad.
        W78/88-1 LEP
        Last year, I testified that the results of the W78 LEP Phase 6.1
    concept assessment study were planned for briefing to the Nuclear
    Weapons Council Standing and Safety Committee later in the year. I am
    pleased to report that the study was well received and a Phase 6.2 was
    authorized by the Nuclear Weapons Council in June 2012 for an
    interoperable warhead feasibility study, called the W78/88-1 LEP,
    supporting both the Air Force ICBM and Navy SLBM systems. The work we
    are currently doing on the previously discussed modernization efforts
    will position Sandia to effectively support the W78/88-1 LEP study.

                        SUSTAINING THE CURRENT STOCKPILE

        Sandia, together with the other two NNSA national security
    laboratories, has key responsibilities in ensuring the safety,
    security, and effectiveness of the Nation's nuclear deterrent. The
    stockpile surveillance and assessment program plays a crucial role in
    establishing that required confidence in our nuclear deterrent. It is
    through stockpile surveillance that nuclear weapons are taken apart to
    test the components. Test results provide the necessary data to help us
    assess the safety, security, and reliability of the stockpile.

    Stockpile Surveillance and Assessment
        Findings from conducting this program provide the technical basis
    for our annual stockpile assessment reported to the President of the
    United States and inform decisions about required elements of the life
    extension programs and their timelines.
        Multiple drivers heighten the importance of the surveillance
    program. Among them are the following: an unprecedented age of the
    stockpile, which includes many subsystems that were not originally
    designed for extended life; smaller stockpile numbers, which heighten
    the importance of individual warhead reliability; scoping decisions for
    stockpile life extensions; and for at least the next 20 years,
    surveillance of a stockpile that will contain simultaneously both our
    oldest weapons and life-extended weapons. The latter group must be
    examined for possible birth defects and for further aging of reused
    components.
        Although fiscal year 2012 surveillance funding at Sandia was seen
    as a positive indicator, the fiscal year 2013 funding allocation after
    sequestration impacts has required that we constrain surveillance
    efforts; initial indications are that the fiscal year 2014 proposed
    funding for Sandia will be, at best, flat compared with fiscal year
    2013 levels. Despite funding constraints, Sandia is committed to fully
    support the flight test program with the Department of Defense.
    However, we cannot provide annual laboratory testing, as historically
    we have done, for each system in the stockpile. The testing period will
    have to be stretched out. At the same time, our efforts to implement
    the component testing and new diagnostics and models fall further
    behind. These capabilities provide understanding of margins,
    uncertainties, and trends needed to (1) ensure the stockpile is safe,
    secure, and effective, (2) understand the lead times necessary to
    respond to aging issues that would have the potential to reduce
    stockpile safety, security, or reliability, and (3) support decisions
    on scoping for stockpile life extensions. Furthermore, several of our
    key surveillance facilities located in New Mexico, California, Texas,
    and Nevada are being operated with minimal investments in spare parts
    and preventative maintenance; as such, we are at risk for extended test
    outages due to equipment failures. To minimize the risk to the
    stockpile, given the realities of the current fiscal environment, we
    continue to apply a risk-based prioritization of our surveillance
    activities. A reduction in the number of systems requiring surveillance
    can also mitigate the pressure on the surveillance budget. Successfully
    completing the current modernization efforts should enable decisions
    regarding any reductions in stockpile types or numbers.

                       ADVANCING THE TOOLS OF STEWARDSHIP

        During the stewardship era, the quintessential challenge was the
    elimination of underground testing. The sustained support received for
    stewardship has allowed us to make enormous progress in our
    understanding of nuclear weapons function in the absence of underground
    testing and has enabled us to attract talented staff. We must continue
    to advance and apply the tools of stewardship during today's
    modernization era.

    Science-Based Infrastructure and Capabilities
        Sandia's capabilities are essential to its full life cycle
    responsibilities for the stockpile: from exploratory concept definition
    to design, development, qualification, testing, and ultimately to
    ongoing stockpile surveillance and assessment.
        I am pleased that the fiscal year 2014 budget request continues to
    address the recapitalization program for our silicon fabrication
    facility, the requirements for which I have addressed in prior
    testimony. Funding in fiscal year 2013 enabled us to replace the single
    most-expensive and highest-risk item in the facility. The fiscal year
    2014 budget request continues the recapitalization program at the
    planned level, but I would note that for program completion, commitment
    to multiyear funding is required.
        I will restate that Sandia stewards for the nuclear weapons
    program, as well as for the DOE's nonproliferation payloads, the
    microelectronics research and fabrication facility, where we design and
    fabricate an array of unique microelectronics, specialty optical
    components, and microelectromechanical system devices. Recapitalization
    will reduce the risk for delivering the B61 LEP and ensure production
    of the radiation-hardened components required by the W88 Alt 370 and
    all future reentry system life extension programs. As we go forward on
    modernization, our microelectronics fabrication facilities, which form
    the basis of our trusted foundry, will be critical to ensuring the
    integrity of our supply chain.
        In addition to the silicon fabrication facility, we have
    significant recapitalization needs at various experimental and test
    facilities critical to B61 LEP, W88 Alt 370, and future LEP success,
    particularly at the Tonopah Test Range. The fiscal year 2014 budget
    request supports our ability to reduce risk to the modernization
    program through investments in those capabilities as well.
        In addition to these fabrication, experimental, and test
    facilities, Sandia's high-performance computing capabilities are vital
    tools for our mission responsibilities in stockpile surveillance,
    certification, and qualification, and they continue to prove to be
    indispensable to our broader national security work.
        I am very pleased to report that fiscal year 2013 funding enables
    us to finish renovating our suite of mechanical environment test
    facilities, which are essential to supporting the design and
    qualification of the B61 and other life extensions.
        I want to emphasize that the investments in our stewardship tools
    over the past 15 years enable cost reductions in our modernization
    efforts through increased use of computational simulation, which
    reduces the amount of qualification testing; allows, for the first
    time, confident qualification of some components without either nuclear
    testing or expensive aboveground facilities; and affords important
    insights into the challenge of predictive aging for our older
    stockpile.

    Technology Surprise
        Continued scientific and technological advances around the world
    remind us that the Nation must be aware of those advances in order to
    prevent a technological surprise. One example is the area of high
    energy density physics and inertial confinement fusion, which is
    experiencing rapid advances and growing worldwide interest. While
    achieving inertial confinement fusion ignition is a tremendous
    technical challenge, we must continue to pursue a national effort to
    achieve ignition for its importance to our long-term understanding of
    the stockpile and confidence in our deterrent position. At Sandia
    National Laboratories, we utilize the Z pulsed-power facility, the
    world's most-energetic high energy density physics driver, to study
    high energy density physics and inertial confinement fusion for the
    stockpile stewardship program. I believe that a robust research program
    on the Z facility is essential to the Nation for it provides risk
    mitigation for achieving inertial confinement fusion consistent with
    the recent NNSA ``Path Forward'' document; is complementary to the
    activities at the National Ignition Facility and Omega laser at the
    University of Rochester; and is important to preventing technological
    surprise. Beyond the considerations of ignition, I believe it is
    important for all three laboratories to conduct limited exploratory
    studies on weapon concepts to ensure that staff stay current in this
    area and that significant asymmetries cannot impact the position of our
    deterrent.

       SYNERGY BETWEEN OUR NUCLEAR WEAPONS MISSION AND BROADER NATIONAL
                                 SECURITY WORK

        Today's national security challenges are complex and highly
    diverse. The NNSA laboratories are contributing solutions to those
    challenges. To energize and sharpen its nuclear weapons competencies,
    Sandia relies on its broader national security work. The symbiotic
    relationship between the nuclear weapons mission and broader national
    security missions prevents insularity and creates a challenging,
    vigorous scientific and engineering environment that has helped us
    attract and retain the new talent we need. Such an environment is
    essential to succeed against the challenges we now face. Let me give
    you two examples that highlight the way in which this symbiotic
    relationship works at Sandia.
        First, I will give a technology example. Sandia has led the
    development of real-time processing and high performance-to-volume
    ratio technologies for synthetic aperture radar (SAR). Both
    technologies were made possible by our extensive radar design and
    development work for nuclear weapon fuzing. The technologies have been
    leveraged and are currently used by the Department of Defense. The
    extensive SAR work has sharpened our radar design competencies and kept
    Sandia aligned with advances in radar technology, such as radio-
    frequency integrated circuits. We are now applying these modern
    technologies to the design of the replacement radar for the B61 LEP,
    the W88 Alt 370, and the Mk21 Fuze Replacement with a high degree of
    commonality, which leads to cost savings.
        My second example is Sandia's satellite program, which spans about
    five decades and has grown steadily with numerous customers. This
    program, which provides our Nation with critical national security
    capabilities, has brought with it a very rigorous program-management
    environment for moving advanced technology within tight schedule
    requirements. We have leveraged the knowledge accumulated in these
    areas to our nuclear weapons program.
        I strongly believe that today it is not possible that my Laboratory
    could deliver consistently on the commitments to the nuclear weapons
    program without the synergistic interagency work that attracts top
    talent, hones our skills, and provides stability through the cycles of
    the nuclear weapons program.
        Government commitment to the broad national security work of the
    laboratories is essential for the United States to ensure the
    preeminence of our nuclear weapons and to enable multidisciplinary
    technical solutions to other complex and high-risk national security
    challenges. In no way does our interagency work detract from our focus
    to execute our core nuclear weapons mission.

    Nonproliferation
        U.S. policy articulated in the 2010 National Security Strategy and
    reflected in recent events in the United States and around the world
    demonstrates the growing complexity of today's threat environment
    arising from weapons of mass destruction (WMDs). Sandia has a broad
    portfolio of nonproliferation activities containing a full array of
    programs aimed at combating the proliferation of WMDs. Working
    collaboratively with Los Alamos and Lawrence Livermore national
    laboratories and several other DOE laboratories, we are:

             developing technologies to ``convert, remove, and
            protect'' nuclear and radiological materials that could be used
            in nuclear and radiological weapons,
             conducting international work for material protection,
             increasing effectiveness in large-scale field
            experimentation for nonproliferation test monitoring and arms
            control,
             ensuring that the on-orbit satellite program meets
            current requirements and adapts to future monitoring
            challenges,
             developing ground-based systems for more effective
            seismic monitoring,
             enabling other countries to develop nuclear security
            centers of excellence,
             enhancing the safety and security of biological and
            chemical laboratories and facilities around the world to reduce
            the risk that terrorists can acquire biological or chemical
            capabilities, and
             conducting international work in support of
            cooperative threat reduction programs.

        In addition to working with other laboratories, we are engaging
    globally with international partners in more than 100 countries to
    reduce the threat of proliferation.
        Our primary customers for this work are the NNSA, Department of
    State, and Department of Defense. We know that Congress will continue
    to support our customers' programs aimed at assessing the risks from
    WMD, evaluating technologies, and implementing safety and security
    programs that will protect us from the extreme dangers presented by
    nuclear, biological, and chemical threats.
        With respect to the fiscal year 2014 Budget request to Congress, I
    will make three points: (1) We strongly recommend that the U.S. Nuclear
    Detonation Detection System be funded as proposed in the fiscal year
    2014 budget request to Congress. The fiscal year 2013 CR, coupled with
    sequestration, severely hampered the ability of Sandia and Los Alamos
    national laboratories to deliver the satellite payloads. Indeed, for
    the first time in decades, future payload deliveries are in jeopardy.
    Without the increase proposed in the fiscal year 2014 budget request,
    the Nation runs the risk of damaging its capability for important
    nonproliferation programs. (2) It is important to support technologies
    that develop transparent and verifiable capabilities for future
    treaties. (3) Considering the significance and increasing complexity of
    worldwide nuclear material developments, it is important to ensure
    funding for programs focused on securing nuclear materials, such as the
    Global Threat Reduction Initiative, and programs that support
    international cooperation on related aspects of science and technology.

                                   GOVERNANCE

        At the time of my testimony last year, the National Academy of
    Sciences had recently released its report of national laboratory
    governance by the NNSA. That report and a subsequent study by the
    National Academy of Public Administration indicated that there were
    areas where improvements in the governance and oversight of the
    laboratories are possible and recommended. The National Defense
    Authorization Act for Fiscal Year 2013, recently signed into law,
    called for the creation of a Congressional Advisory Panel on the
    Governance of the Nuclear Security Enterprise to study this area and
    make recommendations to Congress. From my perspective, all these
    examinations are warranted as I believe the effectiveness of the
    somewhat unique government-owned/contractor-operated model employed by
    the DOE and NNSA to manage the laboratories as FFRDCs has eroded under
    the current DOE-NNSA governance arrangement. We look forward to
    engaging with the Congressional Advisory Panel on this topic. Based on
    its exceptional members and expansive charter, I am confident that the
    panel will bring the careful, comprehensive examination needed by this
    complex but very important topic.

                                  CONCLUSIONS

        The new era of our Nation's nuclear deterrent is characterized by
    three major imperatives: modernizing the nuclear deterrent, sustaining
    a smaller and increasingly older stockpile, and continuing to advance
    the tools of stewardship. It is important that the nuclear weapons
    enterprise be engaged in these three imperatives simultaneously,
    maintaining a balance across them.
        Sandia is conducting work in all three areas referenced above, and
    it is responsible for a large portion of the modernization activities.
    To that end, we have been extremely successful at staffing the
    modernization programs against an aggressive staffing plan. We are
    currently executing the programs. We are committed. We are confident
    that our in-depth scientific, engineering, and technical expertise will
    enable successful completion of the programs.
        We are off to a strong start on the modernization programs,
    particularly the B61 LEP. In this regard, we are pleased to see the
    strong support for the programs in the fiscal year 2014 budget request
    to Congress. I want to emphasize that the current technical scope for
    the B61 LEP is the minimum scope necessary to meet the U.S. Strategic
    Command's requirements and the extended deterrence objectives of the
    2010 Nuclear Posture Review. We are actively working with the NNSA to
    ensure that funding requirements are met in order to maintain schedule
    and cost performance on these vital modernization programs.
        I will restate that Sandia's ability to deliver with excellence on
    its nuclear weapons mission both now and into the future critically
    depends on the effective interplay between the nuclear weapons mission
    and our broader national security work. Sandia is committed to
    fulfilling its service to the Nation with excellence and judicious cost
    management. The fact that the three national security laboratory
    directors were invited to speak before you today and answer your
    questions is a clear indication of the leadership role of Congress in
    authorizing a sound path forward for U.S. nuclear deterrence.
        Senator Udall. Thank you, Dr. Hommert.
        Dr. Albright, from the Lawrence Livermore National
    Laboratory, welcome.

       STATEMENT OF DR. PENROSE C. ALBRIGHT, DIRECTOR, LAWRENCE
                     LIVERMORE NATIONAL LABORATORY

        Dr. Albright. Chairman Udall and Senator Fischer, I am
    Parney Albright, the Director of Lawrence Livermore National
    Laboratory. I have submitted written remarks for the record, I
    ask they be included in the record.
        Thank you for the opportunity to provide my perspective on
    the President's fiscal year 2014 budget request and its impact
    on the stockpile stewardship program. In the interest of time,
    I will just emphasize three main points in my oral remarks.
        First, balanced investment is crucial to the stockpile
    stewardship program. The 2010 NPR recognized that two types of
    investments are essential for effective deterrence. First, we
    must modernize the stockpile. LEP-related activities at
    Livermore include work on the W78/88-1 LEP and also concept
    development for the long-range stand-off cruise missile. Timely
    execution of the planned LEPs is important.
        But LEPs are not our only job. As both of you pointed out
    in your opening remarks, effective long-term deterrence also
    requires the laboratories sustain the capabilities, knowledge,
    and skills underpinning the science, technology, and
    engineering base.
        An important component of the strategic hedge against
    technical surprise and changes in the national security
    environment that underpins our ability to do reductions in the
    stockpile is a healthy complex both in terms of workforce and
    capabilities. At Livermore, we have important theoretical and
    experimental capabilities such as the Sequoia supercomputer and
    the NIF that allow us to assess and certify aging weapons,
    conduct significant finding investigations, develop options for
    LEPs, innovate when needed, and provide that strategic hedge.
        Second, the fiscal year 2014 budget request undermines the
    execution of some key stewardship activities. I am particularly
    concerned about the impact of the budget request and operations
    at the NIF, a uniquely important stewardship facility because
    of its unmatched capabilities to provide data that is relevant
    to the nuclear performance of weapons. The request cuts $80
    million from the unsequestered fiscal year 2013 operating
    budget for NIF, a nearly 25 percent reduction that comes on top
    of a $30 million cut in the prior year. This will significantly
    limit our ability to utilize the NIF and undermine the
    stewardship program.
        Third, Livermore is ready and eager to improve the
    governance of the nuclear weapons enterprise, and we look
    forward to working with our partners in the Government in that
    regard.
        I applaud this committee for helping to establish the
    commission to examine governance of the nuclear complex. I want
    to make a few observations about this, and I have more in my
    written remarks.
        First, there should be a single voice that sets policy
    associated with the laboratories, and that voice should be
    close to the mission in order to weigh the impact of policy
    decisions on the delivery on the mission of the complex. Most
    specific implementation practices should be left to the
    federally-funded research and development centers (FFRDC), the
    laboratories. We are partners executing a shared national
    security mission together. Governance should reflect that
    partnership. Because we are partners with the Government, I am
    an advocate for getting the capabilities needed into the
    Government that are essential for establishing credibility with
    the various stakeholders, both in Congress, DOD, and elsewhere.
        Thank you again for the opportunity to testify. I look
    forward to your questions.
        [The prepared statement of Dr. Albright follows:]

                 Prepared Statement by Dr. Penrose C. Albright

                                OPENING REMARKS

        Mr. Chairman and members of the subcommittee, I am Parney Albright,
    Director of the Lawrence Livermore National Laboratory (LLNL). I thank
    you for the opportunity to provide my perspective on the President's
    fiscal year 2014 budget request and its impact on the important
    Stockpile Stewardship Program activities carried out at LLNL and our
    efforts to sustain over the long term a healthy, vibrant Laboratory,
    advancing and applying science and technology to meet the country's
    most important national security needs.
        As one of the Department of Energy's (DOE) National Nuclear
    Security Administration (NNSA) national security laboratories, we are
    responsible for helping sustain the safety, security, and effectiveness
    of our Nation's strategic deterrent. In addition to our stockpile
    stewardship efforts, we leverage our capabilities to develop innovative
    solutions to major 21st century challenges in nuclear security, defense
    and international security, and energy and environmental security. I
    thank the committee for your continuing support for the important work
    we do.

            INVESTMENTS IN STOCKPILE STEWARDSHIP AND ACCOMPLISHMENTS

    Beneficial Increased Attention
        The Stockpile Stewardship Program (SSP) has benefited from the
    attention given to it by Congress and the administration since the 2010
    Nuclear Posture Review (NPR). The review reemphasized the need to
    ``sustain a safe, secure, and effective nuclear arsenal as long as
    nuclear weapons exist.'' It also recognized that ``significantly
    increased investments'' were required to modernize an aging stockpile
    and to sustain the capabilities, knowledge, and skills in the
    underpinning science, technology, and engineering base. Both types of
    investments are essential for effective deterrence, especially as the
    Nation strives for further worldwide reductions in nuclear arms. As
    noted in the NPR, a key enabler to stockpile reductions (such as those
    associated with New START) is a healthy nuclear weapons complex. A
    complex with sustained nuclear-weapon design and production capability
    is a key component of our Nation's deterrent and serves as a strategic
    hedge against technological surprise and a changing national security
    environment.
        Considerable progress has been made in developing a strategic
    vision for the stockpile, and we are beginning to implement it. NNSA
    and the Department of Defense (DOD) are undertaking a needed set of
    life-extension programs (LEPs) to modernize the aging stockpile, with
    consideration being given to enhanced safety and security and
    interoperability among delivery systems in order to reduce the overall
    size of the stockpile. LEP-related activities at LLNL serve extremely
    important multiple benefits of exercising critical skills in program
    management, weapons design and development, and weapons engineering
    that the Laboratory must sustain and pass on to future generations of
    stockpile stewards.
        We also are enhancing computational and experimental capabilities
    to assess and certify aging weapons, conduct significant finding
    investigations, and develop options for LEPs. These tools are also
    vital for training and honing the skills of current and future
    generations of stockpile stewards. I will highlight accomplishments at
    LLNL, including our work on the W78/88-1 LEP and concept development
    for the Long Range Standoff weapon. In addition, Livermore has brought
    two powerful tools--the Sequoia supercomputer and the National Ignition
    Facility (NIF)--into full operation and describe their application to
    the SSP.

    Budget Challenges
        Sustaining progress on SSP priorities through a balanced set of
    investments is especially challenging at a time of budget austerity.
    Because weapons in the stockpile continue to age beyond their intended
    service life, timely execution of planned LEPs is vitally important,
    with the objective of implementing over time the Nuclear Weapons
    Council's ``3+2'' strategy for the future stockpile. Concurrently, we
    need to invest in the infrastructure of the NNSA enterprise--production
    capabilities and the people and tools that provide the science,
    technology, and engineering underpinning of stockpile stewardship.
        Work on LEPs is job #1 for NNSA, although funding constraints are
    pushing out completion of planned LEPs about as far as is acceptable.
    However, LEPs are not the only job. As noted earlier, a healthy complex
    is a crucial component of the Nation's strategic hedge against
    technological surprise or changing world conditions. Some things are
    going well. Plans for the Uranium Processing Facility (UPF) at Y-12 are
    moving forward. We are also fully supportive of the revised plans to
    provide modernized plutonium research and pit production capabilities
    at Los Alamos National Laboratory (LANL) and make use of the Superblock
    facilities at LLNL. However, a consequence of these important
    investments is highly constrained funding for the all-important science
    and technology base of stockpile stewardship. That is a source of
    considerable concern to me because of its immediate impacts on our
    laboratory in particular in fiscal year 2014 and because of the long-
    term effects on the health of stockpile stewardship.

    Stockpile Stewardship Accomplishments at LLNL
        SSP efforts at LLNL in fiscal year 2012 and early fiscal year 2013
    have resulted in numerous key accomplishments supporting the SSP.
    Highlights include:

             Annual Assessment. We completed Cycle 17 of the annual
            assessment process and the second cycle of the Independent
            Nuclear Weapon Assessment Process (INWAP), in which LLNL
            applies its unique approach to nuclear weapons assessment to
            the systems for which LANL has primary responsibility, and vice
            versa. These assessment activities greatly benefited in quality
            and increased scientific rigor due to improvements in weapon
            physics simulations.
             The W78/88-1 LEP and concept development for the long-
            range standoff (LRSO) weapon. NNSA and DOD launched the Phase
            6.2/6.2A activity on the W78/88-1 LEP in fiscal year 2012. The
            considerable progress to date is supporting an early down-
            select of a preferred option for the LEP. LLNL weapons experts
            are evaluating options to incorporate enhanced safety and
            security features. Options for interoperability of the nuclear
            explosives package with the U.S. Navy's W88 warhead are also to
            be considered as part of the study. In support of an Air Force-
            led LRSO study, Livermore developed a spectrum of nuclear-
            explosives-package design approaches. More generally, LLNL made
            significant progress on maturing technologies to enhance
            manufacturability (to lower costs) and improve safety and
            security options for future LEPs.
             Sequoia. Livermore brought into operation for NNSA's
            Advanced Computing and Simulation (ASC) Program the IBM Sequoia
            supercomputer. With 1.6 million cores working in parallel, the
            machine has performed record-breaking simulations. All three
            NNSA laboratories have run large unclassified simulations to
            test the machine and optimize performance. Sequoia transitioned
            to classified use in April 2013 and has begun running detailed
            simulations of nuclear weapons physics, in support of stockpile
            stewardship.
             NIF as a national user facility. NIF began operation
            as a national user facility at the beginning of fiscal year
            2013. In fiscal year 2012, NIF conducted 332 system shots in
            support of the SSP, other national security applications and
            fundamental science. NIF has successfully supported important
            milestones and resolved key issues for the SSP. The laser
            system demonstrated that it exceeded performance requirements
            with precision delivery of energy in excess of 1.8 megajoules
            (ultraviolet) and 500 terawatts of power.
             SSP experiments. In addition to SSP experiments at
            NIF, LLNL conducted three technically challenging integrated
            weapon experiments (hydrotests) at the Contained Firing
            Facility, carried out the 100th special-nuclear-material
            experiment at the JASPER (Joint Actinide Shock Physics
            Experimental Research) facility, and reported new results from
            ongoing plutonium aging studies that indicate that the material
            continues to age gracefully.
             Deinventory of high-security special nuclear materials
            (SNM). In September 2012, the last of the SNM items that
            require Security Category I/II operations were removed from the
            Livermore site. Through a concerted effort, deinventory of
            these items was completed 2 years ahead of the original
            schedule and the Laboratory has transitioned to lower-cost
            Category III operations with related security operations
            downsizing and savings for the enterprise.
            support for stockpile stewardship science and technology

    The Foundation of Simulations and Experiments
        The SSP fundamentally depends on the expert judgment of the people
    in the program--their skills and ability to resolve with confidence
    difficult questions about the performance of aging weapons, and to
    provide LEP options with interoperability and enhanced safety and
    security features. The SSP is founded on the premise that the knowledge
    and expert judgment about nuclear weapons developed over generations of
    constantly designing and testing new weapons can be replaced by
    succeeding generations who rely instead on theory, detailed
    simulations, and laboratory experiments as a basis for stockpile
    assessments and certification of LEPs. In the past, the paradigm was
    the empiricism of nuclear testing and use of ``rules of thumb'' where
    detailed understanding was lacking; now it is science-based stockpile
    stewardship with the rules of thumb being replaced by a much better
    understanding of the underlying physics of nuclear weapons.
        Experts at the NNSA laboratories now rely on state-of-the-art
    computer simulations that are tested and verified with experimental
    capabilities (and past nuclear test data) to do their job. Their
    understanding of nuclear weapons design and functioning is continually
    improved through the cycle of theory, simulation, and experiment that
    is at the core of the scientific method and the SSP. We still have much
    work to do.

    Investments in Supercomputing
        In April 2013, the Sequoia supercomputer made the transition to
    classified work for the SSP. This is a tremendous success for NNSA's
    ASC program and a major advance in high-performance computing (HPC)
    capabilities. The machine's extraordinary capabilities are needed to
    improve models of weapons physics, particularly in the areas of
    hydrodynamics, radiation transport, and the properties of materials at
    extreme pressures and temperatures. In addition, Sequoia is able to run
    large suites of calculations designed to characterize uncertainties in
    weapon performance resulting from small variations in the weapon system
    and uncertainties in the physics models used. Improved capabilities for
    uncertainty quantification (UQ) are essential for assessing the impact
    on performance of physical changes in aging weapons and for certifying
    LEPs.
        Sequoia provides ``entry-level'' capabilities to run suites of
    three-dimension weapons physics simulations for UQ. Even more capable
    computers are needed to run large suites of high-fidelity simulations
    to fully map out the impact of uncertainties. Greater capability is
    also needed to develop predictive models of boost physics and
    thermonuclear burn processes in nuclear weapons. It is vitally
    important for the future of stockpile stewardship--as well as to
    national competitiveness--that we continue to work with industry and
    the DOE Office of Science to expeditiously advance HPC capabilities,
    both in the near term and in the development of next generation (i.e.,
    exascale) architectures.

    Investments in Nuclear Weapons Experimental Science
        Of the experimental facilities supporting stockpile stewardship,
    NIF is especially important because of its ability to provide data
    pertaining to nuclear weapon performance that is otherwise inaccessible
    in the absence of nuclear testing. Some of the experiments provide
    necessary data as input to simulation models; others provide validation
    of the performance of models.

    NIF is a core experimental capability of the SSP, needed to ensure
            confidence in the reliability of its nuclear stockpile without
            a return to nuclear testing.
        In particular, NIF uniquely makes accessible regimes of pressure,
    density, and temperature relevant to the operation of a nuclear weapon.
    NIF experiments provide data and insights that challenge our modeling
    and simulation capabilities. The ability to experimentally test the
    theory and assumptions embodied in our simulation of nuclear weapons is
    fundamental to stockpile stewardship.
        NIF has successfully supported important milestones and resolved
    key issues for the SSP, and currently has more requests from the SSP
    community for experimental shots than it has the capacity to provide.
    In addition to its role in the SSP, NIF executes experiments for NNSA
    nonproliferation and Department of Defense (DOD) applications, and
    supports fundamental science. One important consequence of the efforts
    of the academic community on NIF experiments is the pipeline of young
    researchers that come to the Laboratory and ultimately to the SSP. NIF
    began operations as a user facility for high-energy density science in
    fiscal year 2013.
        NIF is one of the largest scientific construction projects
    successfully completed by the DOE, an accomplishment validated by the
    prestigious International Project of the Year Award in 2009. The laser
    system meets or exceeds all of its performance specifications and NIF
    is the world's leading scientific facility for high-energy-density
    science and inertial confinement fusion (ICF) research. It is worth
    noting that every major nuclear power that has abjured nuclear testing
    (other than the UK, which uses the NIF)--Russia, China, France--has a
    NIF-like facility either under construction, or planned. Laboratory
    experimental access to the conditions present in an operating nuclear
    weapon cannot be currently achieved any other way.
        NIF has made steady progress towards demonstrating fusion ignition;
    realizing this goal is important to more fully understand key aspects
    of nuclear weapons physics, and also for retiring the physics issues
    associated with inertial confinement fusion energy (IFE). The ongoing
    experimental program at NIF balances experiments for stockpile
    stewardship--work on ignition and other experiments that do not require
    ignition--as well as experiments for other national security missions
    and for fundamental science.
        Our efforts on ignition are guided by NNSA's Path Forward to
    Achieving Ignition in the Inertial Confinement Fusion Program, the
    November 2012 Report to Congress issued by NNSA as requested by the
    U.S. Senate Committee on Appropriations, Subcommittee on Energy and
    Water Development. This guidance on the path forward is based on the
    technical judgment of the broad nuclear weapons and ICF community. The
    report stresses the importance to the SSP of achieving ignition or if
    concerted efforts do not succeed, understanding in detail why the goal
    is out of reach. The ignition plan calls for over 400 shots over 36
    months and critical new capabilities. The pre-sequestration NIF fiscal
    year 2013 budget could have enabled considerable progress towards
    meeting the goals of the NNSA Path Forward plan.
        The rationale for NIF, as espoused by DOE (and later NNSA) from the
    beginning was primarily for its role in stockpile stewardship. However,
    that rationale also acknowledged NIF's importance to fundamental
    science, and for addressing the physics issues associated with IFE
    production. A recently issued National Academy of Sciences study stated
    there is ``a compelling rationale for establishing inertial fusion
    energy R&D as part of the long-term U.S. energy R&D portfolio.'' The
    study also noted that ``planning should begin for making effective use
    of the NIF as one of the major program elements in an assessment of the
    feasibility of IFE.'' Significantly, the path toward achieving ignition
    does not depend on whether the goal is assuring the safety, security,
    and reliability of the nuclear stockpile, or creating a sustainable
    source of clean energy.

    Reductions to NIF in the Fiscal Year 2014 Budget Request will cause
            real harm
        The President's budget request cuts $80 million from the
    unsequestered fiscal year 2013 operating budget for NIF--a nearly 25
    percent reduction that comes on top of a $30 million reduction that
    occurred in the prior year. The proposed reductions are based in part
    on an operational and business model for NIF operations that is neither
    founded on standard practice for the use of scientific facilities, nor
    founded on an informed analysis of NIF operations and costs.
        The business model proposed--a ``pay-as-you-go'' model for users--
    fundamentally differs from the best practices employed at DOE Office of
    Science user facilities and other national and international leading-
    edge-science experimental facilities, and differs as well from the
    Readiness in Technical Base and Facilities (RTBF) approach routinely
    followed by NNSA. The scientific facility operations model recommended
    by a 1999 National Research Council (NRC) report and adopted by DOE for
    all of its scientific user facilities found that `` . . . history has
    demonstrated that if core operations and maintenance become dependent
    on dispersed funding, the entire facility operation may be threatened
    by the reduction or withdrawal of support by a single component.''
    Adherence to this principle has been critical to DOE's strong record of
    success in operating major scientific user facilities. This NRC-
    recommended model is also used by the National Science Foundation (NSF)
    and other Federal agencies such as the National Aeronautics and Space
    Administration (NASA).
        Analysis demonstrates fundamental flaws with the approach.
    Importantly, the vast majority of users on NIF are from the SSP, funded
    by NNSA. The plan for fiscal year 2013 shots is instructive: over 90
    percent are in support of SSP. The non-SSP shots support NNSA
    nonproliferation, DOD, and the fundamental science community. It is
    important to note that the fundamental science community simply cannot
    afford to pay, so their research will simply not get done. Moreover,
    DOD and non-proliferation users have not included those costs in their
    planning. This is why under the NRC model, scientific user facility
    operations are funded separately--and fully. Hence, the proposed model
    for NIF would eliminate use of NIF by the science, DOD, and
    nonproliferation communities. While the impact of this is high for
    national security and science, the cost avoidance is small--roughly $6
    million per year. Again, it is important to note that the fundamental
    science community in high-energy-density science and ICF research
    represents a key pipeline for the future SSP workforce.
        A further rationale that we have heard for the $80 million cut to
    NIF is that an added emphasis on non-ignition-related SSP experiments
    significantly reduces the cost of operations at NIF. This too is
    incorrect. The SSP shots are not uniformly lower in energy and power;
    and hence the resultant cost saving in optics is marginal. Furthermore,
    the complexity of these SSP shots has been steadily increasing and is
    equivalent to or greater than those for ignition, often requiring
    significant new facility capabilities. As such the integrated cost
    impact of emphasizing non-ignition SSP experiments to the overall
    program is not significant.
        It should be noted that these rationales were not developed in
    consultation with LLNL management, and hence were not based on
    experience with the NIF experimental program or operations. If enacted,
    our current best estimate is that proposed reductions to NIF operations
    and LLNL's ICF Program budget included in the fiscal year 2014
    President's budget request will lead to substantial staff reductions at
    the Laboratory (approximately 500 staff members down from the level at
    the beginning of fiscal year 2013), and operational cutbacks that mean
    that nearly 70 percent of the SSP shots planned for in fiscal year 2014
    will not be conducted.
        We are acutely aware of the limited resources in our current fiscal
    environment. However, drastically reducing the budget at a time when
    the demand for shots from SSP and other NIF user communities far
    exceeds available shot time is not a prudent use of this great national
    resource, and the investment that has been made in it. NIF has achieved
    ``full steam'' operations in the past year; building the facility and
    then substantially limiting its use as a user facility is not logical.
    To significantly cut back operations, disrupt the world-class team
    supporting those operations, and deplete the NIF user community so soon
    after completion of the facility, after decades of effort, would not
    only damage the Nation's national security and scientific credibility,
    but also lead to a loss of U.S. leadership in this important field.
    There is also a wider message such a budget cut would send--the message
    to prospective scientists that might be drawn to a career at an NNSA
    laboratory to pursue high-energy density science and weapons physics;
    to nations that might grow to question the U.S. long-term commitment to
    ensuring an effective nuclear deterrent; and to stakeholders eager to
    find out whether IFE might be a path to energy security.
        NIF was built to support stockpile stewardship and continues to
    provide essential support to the SSP with a variety of experiments. The
    data from these experiments fundamentally expands our understanding of
    the performance of nuclear weapons. So we all have a stake in NIF
    realizing discoveries about materials at high energy density, ignition,
    and thermonuclear burn--this is what it is designed to do. Severe
    budget cuts that curtail achieving such understanding are not the path
    to success.

    The fiscal year 2014 President's budget request also potentially
            impacts the W78/88-1 effort, especially in the years following
            fiscal year 2014.
        We are concerned that the funding contained in the fiscal year 2014
    request for W78/88-1 is not sufficient to support an early down select
    of the Nuclear Explosives Package (NEP) design for the W78/88-1 and
    also conduct the technology maturation efforts essential to provide
    reliable cost estimates for the Phase 6.2A cost study. This early down
    select will help reduce the scope of the 6.2 effort; Livermore fully
    supports this activity, and is working with LANL and the NNSA to
    achieve this goal. But even with an early down select of the NEP,
    investments in technology maturation during the 6.2 Phase are key to
    informing warhead down-select decisions, limiting risk mitigation
    options that would otherwise need to be carried forward into Phase 6.3,
    improve cost estimates of the down selected design, and increase
    confidence in successful delivery of the LEP in 2025.

               PROVIDING NATIONAL SECURITY IN THE GLOBAL CONTEXT

        National security requires not only an effective nuclear deterrent,
    sustained through the SSP, but also vital efforts aimed at preventing
    the proliferation or terrorist use of nuclear weapons and other weapons
    of mass destruction (WMD) or disruption, strengthening the capabilities
    of our military forces, and bolstering the Nation's energy security and
    economic competitiveness. At LLNL, the capabilities we have developed
    for our stockpile stewardship work are leveraged to address these other
    pressing national security issues, and, in so doing, add depth,
    breadth, and strength to our scientific and technical base and the
    expertise of our workforce.
        Highlights of recent activities for DOE and NNSA non-Defense
    Programs, other Federal agencies, and non-Federal sponsors include:

             Treaty verification and nuclear explosion monitoring.
            LLNL led the modeling and data analysis for the ``Pele'' test,
            which was conducted to assess the ability of various
            technologies to distinguish signatures for weapon development
            from other activities and determine which techniques could be
            used for effective treaty verification and monitoring. LLNL is
            the leader in ground-based nuclear detonation detection and
            develops improved methods for identifying small explosions amid
            the background clutter of earthquakes and mining blasts. Our
            analytic techniques were called into action on February 11,
            2013, as seismic signals were detected within minutes of the
            later announcement by North Korea that it had conducted a
            nuclear test.
             Support for the U.S. military. LLNL continues to play
            a leading role in advanced conventional munitions development
            (which was reported to this committee last year); our
            conventional weapon designs are being used today in the field
            and also are supporting emerging new capabilities. Many other
            examples of our support to the warfighter can be cited: LLNL
            began development of a novel carbon-nanotube-based material
            designed to repel chemical and biological agents; LLNL's
            Counterproliferation Analysis and Planning System (CAPS) is an
            exceptional tool to assist in planning missions against
            facilities that support WMD production, and the CAPS capability
            was called upon scores of times in the past year to provide
            technical assistance to combatant commanders and to U.S. troops
            in the field.
             Foreign nuclear weapons analysis. As recent
            developments in North Korea and Iran have shown, accurate,
            comprehensive, and timely assessments of foreign nuclear weapon
            capabilities are critical. LLNL deploys its extensive expertise
            on these and other countries of concern, and we provide
            analysis that contributes to decisionmaking at the highest
            levels, including National Intelligence Estimates (NIEs). We
            also develop technologies and systems to help the Intelligence
            Community meet its data collection and information exploitation
            needs.
             Cyber security. LLNL has created new cyber security
            capabilities that provide real-time situational awareness
            inside a large computer network using a distributed approach to
            monitoring for anomalous behavior. Through our Network Security
            Innovation Center, we work with private partners to counter the
            constant attack on commercial, infrastructure, and national
            security networks and protect critical operations and to
            develop the next generation of cyber defenders. As the
            sophistication and intensity of cyber attacks against the
            United States continue to increase, these and other cyber
            security projects are more important than ever.
             Tracking space debris. As part of the quest to provide
            space situational awareness, a ``nano-satellite'' was launched
            in September 2012 that contains an LLNL-developed optical
            system for tracking space debris. A constellation of such nano-
            satellites is projected to be able to track pieces of space
            debris with a precision 10 times greater than currently
            possible, which would greatly reduce the false alarm rate for
            possible collisions with U.S. satellites.
             New radiation detection materials. LLNL developed new
            materials for improved radiation detection and discrimination,
            including a new high-resolution scintillator material that
            operates at room temperature and that is inexpensive, easily
            field-deployable and that can be manufactured in large volumes.
            LLNL, working with NNSA, DHS, and DOD, continues to lead the
            Nation in the development of new capabilities that improve
            discrimination (important for determining whether a source is
            benign or a threat), and replace legacy (and poorly performing)
            systems.
             Biodetection and countermeasures. Licensing of the
            Lawrence Livermore Microbial Detection Array will enable law
            enforcement, food-safety professionals, physicians, and others
            to detect within 24 hours any of thousands of bacteria,
            viruses, or toxins that have been sequenced. New insights into
            the interactions of potential drugs with pathogens, gained
            through modeling using LLNL's world class high performance
            computing resources, are helping speed the development of
            medical countermeasures to biothreat agents.
             Energy security, HPC, and industrial partnering. LLNL
            is partnering with industry to accelerate the development of
            energy technologies. Of particular note is that we are working
            with the California Public Utilities Commission, through the
            California Energy System for the 21st Century project, to
            leverage LLNL's (unclassified) high performance computing
            resources deployed at the Livermore Valley Open Campus in a 5-
            year collaborative effort with the utilities to improve the
            State's energy grid.

        These efforts sustain the vitality of the Laboratory by extending
    existing core competencies and building new strengths in
    multidisciplinary science and technology, which in turn benefit the
    stockpile stewardship mission and national security.
        Attention to the long-term health and vitality of LLNL is an
    overarching responsibility of mine. We are working to expand these
    efforts, which is a significant challenge at a time of austere Federal
    budgets and limited economic growth. Actions to help lower operating
    costs at the NNSA laboratories and simplify the processes for arranging
    interagency work would be greatly beneficial.

                            OVERSIGHT AND GOVERNANCE

        There have been a considerable number of studies and discussion
    over the past few years about the oversight and governance of the NNSA
    laboratories. Most recently, the 2013 National Defense Authorization
    Act established a Congressional Advisory Panel on the Governance of the
    Nuclear Security Enterprise to examine this issue. I applaud this
    action and offer up some broad observations for consideration.
    Policies governing the laboratories have many masters.
        Disparate offices in NNSA and DOE HQ and the Field Offices (with at
    times conflicting voices) all generate the policies regarding the
    conduct of operations at the laboratories and production plants. The
    laboratories and sites could function more efficiently with a single
    determining voice on policies regarding safety, security, legal,
    accounting, etc. That voice needs to be close to the mission in order
    to appropriately weigh the impact of policy on mission delivery. Any
    oversight and governance construct could be tested with this key
    question: how and at what level is the impact of policy on mission
    performance weighed against the resultant proposed risk reduction?

    To the extent possible, policy should be made by exception in those
            cases where Federal, State, and local laws and regulation, or
            international standards apply.
        This is how DOD manages its federally-funded research and
    development centers (FFRDCs). The large majority of rules the
    laboratories operate under have little if anything to do with nuclear
    operations, and my remarks especially focus on those areas. To the
    extent that policies are required to supplement broader Federal, state,
    and local laws and regulation, or international (e.g., ISO) standards,
    the policies that are necessary should not be prescriptive in terms of
    how they are to be implemented, but rather in terms of desired goals.
    Furthermore, policies or directives should be accompanied by a cost
    benefit analysis, and conducted in partnership with Laboratory
    management. Specific implementation should be left to laboratory
    management, which in turn should be held accountable (provided adequate
    resources are provided for implementation). Performance against these
    goals should be audited centrally to ensure uniformity across the
    complex.

    It is important that any construct for governance provide a credible
            advocate for the mission to DOD, the White House, and Congress.
        The governing agency needs a robust planning, programming, and
    budgeting system integrated over its portfolio of programs.
    Furthermore, that function should include a credible independent cost
    estimation capability. In analogy with how DOD operates with the
    military services, the cost estimation capability would not be a
    substitute for the process led by the laboratories, but rather ensure
    that the right questions get asked. An effective budgeting and planning
    function is essential for establishing credibility with the various
    stakeholders. In my view, that capability needs to be implemented
    immediately, and aggressively.

    The FFRDC construct that has served the Nation so well for decades has
            been stood on its head.
        In principle, the FFRDC concept distributes responsibility and
    accountability to the contractor for serving the sponsor's (today,
    NNSA's) mission with excellence, in a secure and safe manner, and
    consistent with State, local, and Federal laws and regulations. Hence,
    the need for equivalent responsibilities and accountabilities on the
    government side is largely obviated. That is, under this construct, the
    role of the government is limited: manage the contract consistent with
    Federal Acquisition Regulations (and DOE FARs, or DEARs) to ensure
    performance objectives are met; set standards (e.g., require compliance
    with ISO or other international standards); advocate for the mission
    within the government; develop, implement, and rationalize a budget;
    make capital investments; and take those actions needed to assure the
    excellence and sustainability within existent policy and budgetary
    constraints.
        Under this construct the FFRDC is held accountable, and the
    government is expected to hold regular financial and performance audits
    and reviews. If there are too many security or safety incidents, the
    employees concerned are disciplined or let go, and/or the institution
    fined. If concerns arise within a particular institution regarding
    mission performance, or if it appears to have systemic issues, the
    government can demand that the FFRDC change leadership or in extreme
    cases, the government can recompete the Management and Operations
    contract. This philosophy guides how DOD works with its FFRDCs, which
    is in part demonstrated by the fact that the DOD FFRDCs and University
    Affiliated Research Centers (UARCs) are overseen with greater than one
    order of magnitude fewer government employees, and very few specific
    rules and regulations.
        What has instead happened within DOE is that the FFRDCs believe
    they have the responsibilities and accountabilities noted above, but
    there are also many in DOE/NNSA who also think they have those
    responsibilities and accountabilities. We have to meet standards for
    safety and security, but we are also told prescriptively how we should
    do so. Orders and directives are substituted for perfectly applicable
    international standards, and laws and regulations. In all too many
    cases, we are told who we can hire, what we pay them, and how we should
    manage our workforce. Any governance construct needs to be tested
    against the consequent mix of roles, responsibilities, authorities, and
    accountabilities between the FFRDC and the government.

    There has been a breakdown in trust between the FFRDC partners and the
            government.
        This lack of trust--highlighted last year by the National Academy
    of Sciences--should concern us all. The FFRDCs ensure that the work of
    DOE gets done--we do the mission planning and execution, provide
    corporate memory, and comprise the dedicated and professional workforce
    that is the enduring backbone of the enterprise. The FFRDCs are not
    simply ``contractors'' but rather are partners (and have been without
    interruption for decades) to the government. This difference is well
    understood within DOD and NASA. DOD and NASA treat their FFRDCs and
    UARCs as trusted mission partners, in sharp distinction to how they
    work with their industrial base. The relationships are enduring, and
    not limited by the timeframe of a particular contract.

    A crucial question against which governance constructs should be tested
            is how the current culture (embedded across the DOE government
            ecosystem: DOE HQ, NNSA HQ, and the Field Offices) will be
            affected.
        The existing culture is one of highly intrusive oversight of
    laboratory operations. It would be dilatory if the result of a new
    governance model is to simply change the organization chart while
    keeping embedded the culture and approach that has now been in place
    for over a dozen years.
        Any governance construct should be evaluated in terms of the
    fundamental relationship between the FFRDCs and the government--in
    particular, will it foster a dynamic where the government sees itself
    as one side of an enduring relationship with partners that execute a
    shared national security mission?
        The above observations are offered with the goal of revitalizing
    the relationship between the laboratories and our governing agency. To
    succeed in our important mission as we face numerous technical,
    programmatic, and budgetary challenges, we need a more trusted
    relationship. We should be operating in a productive partnership with
    more efficient and effective governance and oversight, a clear
    understanding of roles and responsibilities, and a shared vision and
    clear focus on mission. I am ready to work hand in hand with my
    colleagues in the government and across the complex to forge a stronger
    partnership.

                                   CONCLUSION

        At LLNL, we are undertaking a challenging set of activities to
    modernize an aging stockpile and sustain a healthy nuclear weapons
    complex. Effective deterrence requires investments in both LEPs and the
    supporting science, technology, and production base for stockpile
    stewardship. We are implementing a strategy for moving forward that is
    budget constrained. One vital piece of the overall SSP is particularly
    constrained in the President's fiscal year 2014 budget request:
    operation of NIF to collect vitally needed data pertaining to the
    nuclear phase of the function of a nuclear weapon. For the long-term
    health of the program, it is important to rectify that imbalance.
        It is also important that we revitalize the partnership between the
    government and its laboratories. Many shortcomings in governance and
    oversight have been identified in independent studies. It is time to
    act on recommendations that have been offered, guided by the
    deliberations of the newly formed Congressional Advisory Panel on the
    Governance of the Nuclear Security Enterprise.

        Senator Udall. Thank you, Dr. Albright.
        Dr. Shank.

       STATEMENT OF DR. CHARLES V. SHANK, CO-CHAIR, COMMITTEE TO
      REVIEW THE QUALITY OF THE MANAGEMENT AND OF THE SCIENCE AND
      ENGINEERING RESEARCH AT THE DEPARTMENT OF ENERGY'S NATIONAL
                         SECURITY LABORATORIES

        Dr. Shank. Thank you for the opportunity to testify before
    this committee. For the last 2 years, I have served as Co-Chair
    of the National Research Council Committee to review the
    Quality of the Science and Engineering Research at the Nation's
    National Security Laboratories. Last year, we issued Phase I of
    our report on the management of science and engineering, and
    this year, we have a report that is in progress on addressing
    the quality of science and engineering at the laboratories.
    That report is being prepared. So what I am going to talk about
    today will be my personal impressions of the study and all the
    comments are my views.
        First, in assessing quality, one needs to define it, and we
    decided to define it in terms of the ability of the
    laboratories to use science and engineering to address mission
    challenges, both in present and the future, questions such as
    are the mission needs being addressed today, is there a
    compelling plan for the future, are the laboratories recruiting
    and training the next generation of staff, are the tools and
    facilities on the cutting edge and adequate to meet the mission
    needs, is there a working environment sufficient to attract and
    retain high-quality staff.
        Because it is no longer possible to test a weapon,
    understanding safety and reliability must rely and be inferred
    from science and engineering knowledge. Even though we have
    studied nuclear weapons for more than a half century, our need
    to understand science and engineering in detail is likely more
    compelling today than it has ever been. A detailed assessment
    of all the scientific activities in these very large
    laboratories is well beyond the scope of any Nuclear Regulatory
    Commission.
        So we decided to focus on four areas that are really at the
    core of the missions in the laboratories. Those are weapons
    science, modeling and simulation, weapons design, and systems
    engineering.
        Jumping to the overall high-level result, we found that the
    quality of science and engineering at the laboratories, in all
    the areas that we examined, are sufficiently of high level to
    allow the laboratories to effectively certify the safety and
    reliability of the stockpile. Nothing that we observed suggests
    that the science and engineering underpinning the stockpile
    stewardship and nonproliferation missions are currently
    compromised. The quality of these four areas of fundamental
    importance that we studied are very healthy and vibrant.
        Much has been said recently about an aging workforce that
    maintains the nuclear stockpile. Significant progress has taken
    place in the laboratories at NNSA to recruit a new generation
    of scientists and engineers. The enthusiasm around the
    capability of these new recruits is really quite impressive.
        However, despite these encouraging trends, deterioration in
    the work environment can limit the Nation's ability to fully
    benefit from the laboratories' potential. Scientists and
    engineers expressed to us increasing concerns about impediments
    of performing experimental work. Experimental work is needed to
    put into the codes that ultimately model and provide true
    understanding to the laboratories.
        What has happened is that there are many factors that are
    driving costs to the point where experiments are becoming
    unaffordable. Many of the factors that drive these costs were
    talked about in our first study having to do with a loss of
    trust, excessive duplicative oversight, formality of
    operations, a culture of audit, risk avoidance across the
    entire NNSA enterprise without benefit in many cases of a risk-
    benefit analysis. Often we see an enormous enterprise devised
    to look at minutiae and often missing the big picture.
        The risks inherent in doing an experiment need to be
    brought into balance with the risks associated with not doing
    the experiment. Small, incremental increases in safety in the
    conduct of experiments may, for example, require a
    disproportionate increase in cost. In no way would we be
    encouraging anyone to do experiments or any activity at the
    laboratories where appropriate safety precautions were not
    taken, but a look at costs and the cost-benefit, in my personal
    view, would be very important to make them more efficient.
        All three laboratories maintain a high-quality recruiting
    effort, acceptance rates from graduate schools from which
    postdoctoral and other staff are recruited--the people they
    have been able to recruit are impressive, and they have
    remained constant over the years.
        However, there are some reasons for concern. A supporting
    and nurturing work environment fosters the ability of highly
    creative scientists and engineers to do their work while
    encouraging the retention of senior staff and the recruitment
    effectively of younger staff. I am going to just pick out one
    area here which I find particularly important and something
    that to scientists means a great deal, and that is the ability
    of scientists to interact with each other.
        Scientists in the national security laboratories are
    isolated from the world of broader science due to the
    classification and nature of their work. Recently imposed
    restrictions on traveling and conference attendance creates a
    kind of isolation. It limits career development, access to the
    latest scientific advances, and the ability of scientists and
    engineers to bring the full range of their relevant science to
    bear on work in the laboratories. From my own personal
    experience, many of the ideas that really helped advanced my
    personal science had to do with things that I learned in
    interactions at conferences.
        But if you could imagine the need for someone to attend a
    conference requires a 60-day notice, followed by often not
    being able to be told whether you could attend the conference
    or not, maybe just days before, and then having to buy very
    expensive tickets to attend that conference. I must say in my
    personal experience as a scientist over the years, the only
    place that I have ever seen travel restrictions operating in
    this was with scientists from the former Soviet Union who were
    trying to attend conferences in the United States. They often
    did not show up at the last moment, and there was a process
    that none of us understood. I think we are in a very similar
    environment at the moment.
        In conclusion, the laboratories retain a core of talented
    and dedicated scientists and engineers who have very willfully
    and enthusiastically accepted responsibilities for stockpile
    stewardship and related activities. Constant vigilance will be
    required to assure that the work environment enables this
    workforce to perform at a high professional level in order to
    execute their mission.
        [The prepared statement of Dr. Shank follows:]

                   Prepared Statement by Dr. Charles V. Shank

        Thank you for the opportunity to testify before this subcommittee.
    For about 2 years I have served as the co-chair of the National
    Research Council Committee to review the quality of the management and
    of the science and engineering research at the Department of Energy's
    National Security Laboratories. Last year I was honored to appear
    before this subcommittee to testify on the first report of that study
    committee, which reviewed the management of the laboratories. A second
    report dealing with the quality of science and engineering is currently
    nearing completion and delivery to this committee. My testimony today,
    however, represents my personal views which are not necessarily those
    of the National Research Council (NRC) nor have they been reviewed by
    the NRC.
        The three National Nuclear Security Administration (NNSA) National
    Security Laboratories--Los Alamos National Laboratory (LANL), Lawrence
    Livermore National Laboratory (LLNL), and Sandia National Laboratories
    (SNL)--are a major component of the U.S. Government's laboratory
    complex and of the national science and technology base. These
    laboratories are large, diverse, highly-respected institutions with
    broad programs in basic sciences, applied sciences, technology
    development and engineering; and they are home to world-class staffs
    and facilities. Under a recent interagency agreement among the
    Department of Energy, the Department of Defense, the Department of
    Homeland Security, and the Intelligence Community, these laboratories
    are evolving to serve the needs of the broad national security
    community. Despite this broadening of substance and support, these
    laboratories remain the unique locus of science and engineering (S&E)
    for the U.S. nuclear weapons program, including, most significantly,
    the science-based stockpile stewardship program and the S&E basis for
    analyzing and understanding nuclear weapon developments of other
    nations and non-state actors.
        The National Research Council (NRC) was asked by Congress to assess
    the quality of S&E and of the management of S&E at these three
    laboratories. On February 15, 2012, the NRC released a report on the
    quality of the S&E management. \1\ A second report--currently in
    preparation--will address the quality of S&E. In order to conduct this
    assessment of quality of S&E, the NRC assembled a committee of
    distinguished scientists and engineers. Some members of this committee
    also served on the committee that produced the management report, but
    most did not.
    ---------------------------------------------------------------------------
        \1\ Managing for High-Quality Science and Engineering at the NNSA
    National Security Laboratories Committee to Review the Quality of the
    Management and of the Science and Engineering Research at the
    Department of Energy's National Security Laboratories--Phase I,
    February 15, 2012.
    ---------------------------------------------------------------------------
        Assessing the quality of S&E in a meaningful way within the context
    of the primary nuclear weapons mission of the laboratories requires
    taking a broad perspective, both in substance and in time. Referring to
    criteria developed by the NRC Laboratory Assessments Board and to other
    sources, the committee chose to define the quality of S&E as the
    capability of the laboratories to perform the necessary tasks to
    execute the laboratories' missions both at present and in the future:
    Are the laboratory mission needs being addressed today? Is there a
    compelling plan for the future? Are the laboratories recruiting and
    training the next generation of staff? Are the tools and facilities at
    the cutting edge and adequate to meet mission needs? Is the working
    environment sufficient to attract and retain high quality staff?
        The Nation faces major S&E challenges that extend well into the
    future. The country has an aging nuclear weapons stockpile, with many
    of the weapons being decades old. The last nuclear weapons test was
    conducted before the United States declared a unilateral moratorium on
    testing in 1992.\2\ Because it is no longer possible to test a complete
    weapon, understanding of the safety and reliability of the nuclear
    weapons stockpile must be inferred from relevant S&E knowledge.
    Furthermore, the country faces threats from the development of
    improvised nuclear weapons (i.e., terrorist nuclear weapons) and
    nuclear weapons designed by nations seeking to become nuclear powers
    (such as Iran and North Korea). Understanding and evaluating the threat
    from such developments--including those that are based on novel design
    approaches rather than on designs that the United States or its allies
    have been able to study first-hand--is of vital importance. Even though
    we have more than a half-century of experience with nuclear weapons,
    the need to understand their S&E in detail is likely more compelling
    today than it has ever been.
    ---------------------------------------------------------------------------
        \2\ 50 U.S.C. 2530. In addition, the United States has signed, but
    not ratified, the 1996 Comprehensive Test Ban Treaty (CTBT), and is
    therefore committed under the Vienna Convention on the Law of Treaties
    to refrain from actions that would defeat the object or purpose of the
    CTBT pending entry into force.
    ---------------------------------------------------------------------------
        An all-encompassing detailed assessment of the quality of S&E at
    the three NNSA laboratories is a complex task requiring resources far
    beyond those available to this committee. Instead, we chose to sample a
    set of activities that are part of the core mission of the
    laboratories. This assessment is a snapshot of the present with an eye
    to the future. The committee identified four basic pillars of stockpile
    stewardship and nonproliferation analysis: (1) the weapons science
    base; (2) modeling and simulation, which provides a capability to
    integrate theory, experimental data, and system design; (3) weapons
    design; and (4) system engineering and understanding of the effects of
    aging on system performance. The study committee organized itself into
    four teams, each of which focused on one of these areas.
        The challenge facing the nuclear weapon design community in the
    coming decades is the certification of the performance of weapons that
    have aged and in some cases have not been tested in the underground
    test program. Aging--the changes over time in materials and component
    systems of nuclear weapons--may affect the performance of the weapon.
    In the absence of the ability to test an aged weapon, an understanding
    is required of what the aging effects are and how those would affect
    weapon performance. Life Extension Programs (LEPs) are motivated by
    aging and by evolving requirements to improve safety, reliability, and
    other performance characteristics. LEPs now underway sometimes require
    the incorporation of components that are not identical to those in the
    original weapon because the exact material is not available, possibly
    because its manufacturing process has evolved. Predicting the
    performance of weapons systems whose components are not exactly the
    same as they were when tested decades ago requires precise S&E
    knowledge. A strong, systems engineering function is the core
    integrating activity for the results of high-quality scientific
    research, development, engineering, and manufacturing. Examples of the
    importance of high-quality systems engineering are the recent W-76 LEP
    \3\ and the B-61 LEP currently underway.
    ---------------------------------------------------------------------------
        \3\ The first delivery of refurbished warheads to the Navy was in
    2009. Production is to be completed no later than 2021.
    ---------------------------------------------------------------------------
        Computer modeling and simulation is the key tool for integrating
    all the knowledge and information about the safety and reliability of a
    weapons system. For the present, the modeling and simulation capability
    provides important and effective tools to certify the performance and
    safety of the stockpile. The quality of the research staff and the
    availability of underground test data allow models of key physical
    processes to be fine-tuned to actual data.
        The quality of S&E at the laboratories today--across all four of
    the pillars it examined and across all three laboratories--appears to
    be at a sufficiently high level to allow the laboratories to
    effectively certify the safety and reliability of the stockpile.
    Moreover, in many areas S&E is of very high quality judged in the wider
    context. Nothing observed would suggest that the S&E underpinning the
    stockpile stewardship and non-proliferation missions are currently
    compromised. S&E quality in these four areas of fundamental importance
    is currently very healthy and vibrant.
        In recent years much has been said about the aging work force that
    maintains the weapons stockpile. Significant progress has taken place
    in the laboratories and the NNSA to recruit a new generation of weapons
    designers, scientists, and engineers. The enthusiasm, morale, and
    capability of the new recruits is impressive. Efforts are being made at
    all the laboratories to transition information from experienced members
    of staff to the next generation that will have never seen a weapons
    test.
        Despite these encouraging trends, deterioration of the work
    environment for scientists and engineers can limit the Nation's ability
    to benefit fully from the laboratories' potential. Looking across the
    four pillars of stockpile stewardship and nonproliferation examined in
    this study, several major themes emerge. These themes are to varying
    degrees common to each of the pillars. These themes in most cases
    concern aspects of capabilities--impediments to performing experimental
    work, balance among experimental facilities, facilities and
    infrastructure, strategic planning and workforce allocation,
    communications, and workforce issues. Maintenance of the stockpile is a
    long-term effort extending at the very least decades into the future.
    While planning for that future should be possible, S&E professionals at
    the laboratories are frustrated with inconsistent funding from year to
    year, which leads to inefficiencies, waste, and in some cases a
    discouraged work force. Many S&E professionals reported having to piece
    together support from multiple programs. The laboratories appear to be
    losing some mid-level managers who desire a more stable work
    environment.
        Looking at the longer term, uncertainties in the stockpile
    certification process will tend to grow unless steady progress is made
    against S&E challenges. The laboratories recognize the need for new
    physics-based models to replace some current key models that are based
    on empirical data from nuclear tests. The new models will have to
    account for weapons aging due to changes in materials and their
    properties; this requires cutting edge S&E results. New data will have
    to be acquired from experiments other than disallowed testing, but the
    cost of performing the necessary experiments is escalating
    dramatically. This is a major concern and must be addressed.
        Scientists and engineers (and managers) in all pillar areas
    expressed concern about impediments to performing experimental work.
    There appears to be a consensus that the amount of experimental work
    has declined and continues to decline. Laboratory staff cited
    increasing costs and increasing operational restrictions and controls
    on experimental work. Necessary experiments are very costly and can
    require multiple approval steps. This is especially true for
    experiments using radioactive or otherwise hazardous materials, which
    are often the key materials in nuclear warheads. For high-explosive-
    driven hydrodynamics experiments (Hydro Shots), a key part of the
    primary design and certification process, the time scales involved are
    months to years, and the costs run into the millions of dollars. If
    these trends continue and escalate, they could contribute to driving
    costs to the point where the experiments will not be affordable.
    Factors driving experimental costs include: the loss of trust,
    excessive duplicative oversight, formality of operations, and a culture
    of audit and risk avoidance across the NNSA enterprise without balance
    from risk/benefit analysis. A number of such factors were discussed in
    the first report from this study,\4\ including the loss of trust,
    excessive duplicative oversight, formality of operations, a culture of
    audit and risk avoidance across the NNSA enterprise without taking
    advantage of risk/benefit analyses. All experimental activities have
    inherent risk, which must be balanced against the benefits that derive
    from conducting the experiments if reasonable decisions are to be made.
    It is in the Nation's best interest to stabilize the conditions for
    safe, secure, cost-effective mission success. The risks inherent in
    doing an experiment need to be brought into balance with the benefits
    of doing the experiment and the associated risks of not doing the
    experiment. This needs to be done on a logically sound basis in order
    to guide important decisions and resource allocations. While no one is
    advocating irresponsible behavior, the critical need for experimental
    work must be weighed against the mounting disincentives facing it.
    Small incremental increases in safety in the conduct of experiments
    may, for example, require a disproportionate increase in cost. All
    experimental activities have inherent risk, and successful
    organizations manage that risk in a manner that allows the work to be
    performed cost effectively with proper regard for safety. It must be
    recognized that not carrying out the needed experiments imposes a risk
    to the ability of the NNSA laboratories to build the capabilities for
    stockpile certification down the road, which could increase the risk to
    national security.
    ---------------------------------------------------------------------------
        \4\ See Phase 1 report Chapter IV, pp.22-27
    ---------------------------------------------------------------------------
        The laboratories maintain and operate world-leading major
    facilities--such as DARHT,\5\ NIF,\6\ Z,\7\ and petascale \8\ computing
    centers. These major facilities are vital to the execution of the
    laboratories' mission. Smaller facilities are also crucial for
    executing this mission, and they are an important component of the work
    environment that attracts new talent and retains experienced staff.
    Examples of such smaller facilities include: specialized capabilities
    for the production of nuclear weapons components such as neutron
    generators; facilities that enable processing and experimentation with
    plutonium, especially to evaluate its long-term aging; and capabilities
    for developing radiation hardened microelectronic components, photonic
    related components, and beryllium parts fabrication. The rising costs
    of building and operating large signature facilities can threaten the
    continued support of such vital smaller facilities, particularly in
    periods of greatly constrained budgets. Moreover, because signature
    facilities have greater public and political visibility and can be seen
    as being inextricably bound up with a laboratory's fate, there can be
    understandable pressure on management to sacrifice other capabilities
    in order to ensure the continuing support of major facilities.
    ---------------------------------------------------------------------------
        \5\ The Dual Axis Radiographic Hydro-Test (DARHT) facility at LANL
        \6\ The National Ignition Facility at LLLNL
        \7\ Z Pulsed Power Facility at SNL, also known as the Z machine or
    the Z pinch facility
        \8\ Computing facilities capable of performance in excess of one
    petaflop, i.e. one quadrillion floating point operations per second.
    ---------------------------------------------------------------------------
        The quality of infrastructure is uneven, ranging from world-leading
    to unsatisfactory. At one extreme, the NIF at LLNL is a world-leading
    facility of impressive design and engineering. At the other extreme, at
    the same laboratory (and at the others as well) there are facilities
    that are considered to be of poor quality, including some at which
    scientists and engineers report having to perform basic housekeeping
    functions in order to be able to conduct their work. Examples of old
    and poor quality facilities include the explosives test facilities at
    Los Alamos. Many important facilities and other infrastructure are
    deteriorating, including buildings that house important, expensive, and
    advanced equipment.\9\ This situation can erode morale and the ability
    of the laboratories to recruit the best young people. Funding
    difficulties resulting from Federal budget uncertainties clearly make
    it very difficult to address this issue. Nevertheless, continued
    careful monitoring by NNSA and Lab management is essential in order to
    set appropriate priorities for facility improvement.
    ---------------------------------------------------------------------------
        \9\ This matter was discussed in the phase 1 report.
    ---------------------------------------------------------------------------
        Computer modeling and simulation is an important component of the
    weapons program, In the absence of underground testing, the integrated
    modeling codes (IMCs) provide the only mechanism for assessing the
    effect on the whole weapon of differences in materials and
    manufacturing processes relative to those used in the original design.
    Thus, as these differences increase and underground test data becomes a
    decreasingly reliable method for calibrating the codes, the
    requirements for fidelity of physical models and accuracy of the
    numerical methods in the IMCs will increase in order for them to play
    their required role in the stockpile certification process. At the same
    time, the architectures of the processors from which high-performance
    computers are constructed are undergoing disruptive changes, which will
    lead to a need for a major software redesign of the IMCs. Finally, the
    IMC development teams and the developers of supporting software have
    simultaneously seen the resources available to them decrease (the size
    of the code teams are down by a third relative to the late 1990s),
    while their missions have increased from the support of stockpile
    stewardship to include a number of other areas, such as
    counterproliferation and life-extension programs.
        All three laboratories maintain highly qualified, productive work
    forces. Statistics for recruitment--such as acceptance rates and the
    graduate schools from which postdocs and other early career staff are
    recruited--are impressive and have remained constant over recent years.
    Attrition rates are low and relatively steady. The study committee met
    with many people who are enthusiastic and apparently pleased with being
    at their laboratories. However, there appear to be some reasons for
    concern. For example, numerous, and widespread, complaints were
    expressed about deteriorating conditions at the labs. As recounted in
    the report of the first phase of this study, these complaints focused
    primarily on infrastructure and a perceived increasing burden of rules,
    regulations, operational formality, constraints and restrictions, and
    administrative burdens. Furthermore while there have not been
    significant negative changes in recruitment and retention, some of this
    continued success may be due to the state of the economy since 2008; an
    improving economy may produce better opportunities outside the
    laboratories. In some disciplines, it appears that mid-level managers
    have been leaving for a more stable work environment.
        NNSA and the laboratories should pay close attention to the problem
    of hiring and retaining a cadre of first-rate, creative, energetic
    scientists, expert in all aspects of modeling and simulation, ranging
    from deep understanding of the underlying physics and mathematics to
    the most advanced ideas in computer architectures, algorithms, and
    programming methods. There is uncertainty concerning staff's ability to
    make good use of future high-performance computing systems. Expected
    disruptive changes in computer architectures will require very high
    levels of computer science expertise in order to create the software to
    exploit the new capabilities. There is particular concern in core
    computer science areas, such as computer architecture, systems
    software, programming models, tools and the algorithms used in these
    systems. While there are some outstanding individuals in these areas
    within the labs, there were also signs of difficulty in recruiting and
    retention. Among laboratory scientists and engineers, these researchers
    are the most mobile, because they can easily find challenging and
    lucrative employment in industry-- while their work is necessary to the
    NNSA mission, they have other good options. These researchers and
    engineers appear less likely to come to the labs and more likely to
    leave mid-career than those working in other disciplines.
        Maintaining a quality workforce in the face of budget uncertainty
    and competition from other employers will be very difficult. An
    atmosphere nurturing broad scientific investigation and intellectual
    excellence, along with the ability to pay salaries that are competitive
    with industry are the keys to maintaining the laboratories' M&S
    capabilities.
        A supportive and nurturing work environment fosters the ability of
    highly creative scientists and engineers to do their work while
    encouraging the retention of senior staff and the recruitment of young
    staff. The work environment at the laboratories, however, appears to be
    deteriorating and is at risk of further deterioration.\10\ Early-career
    people at the laboratories expressed concern about time accounting
    restrictions that seem to limit their working on new ideas at home or
    on weekends. Some observe that excessive fractionation of their
    chargeable time among several tasks reduces productivity and
    efficiency. Inconsistent and unpredictable funding was also cited,
    along with conflicts between short term project demands and sustained
    scientific progress.\11\ Scientists in National Security Laboratories
    are isolated from the broader world of science due to classification
    and the nature of their work. Recently imposed restrictions on
    traveling to conferences adds to this isolation, limiting career
    development, access to the latest scientific advances, and the ability
    of scientists and engineers to bring the full range of relevant science
    to bear on their work at the laboratories.
    ---------------------------------------------------------------------------
        \10\ See phase 1 report, chapters IV and V.
        \11\ This matter was also addressed in the phase 1 report--see, for
    example, p.17. That report noted that the four agency agreement on
    national security laboratory governance was an important step in fixing
    this. In the past, task orders from agencies other than the Department
    of Energy were often designed to exploit lab staff and infrastructure
    to obtain a specific product without investing in the development of
    staff or facilities.
    ---------------------------------------------------------------------------
        Final integration of the advances and understanding in weapons
    simulation, analyses, design and materials sciences and technology is a
    critical activity for the science-based stockpile stewardship program.
    The integration activities fall under the general areas of systems
    engineering. Systems engineering is also important in the LEP, in which
    the importance of training the next generation of scientists and
    engineers cannot be overemphasized. Special projects often help bring
    the established and the new systems engineering personnel together to
    assure the health and vitality of systems engineering expertise into
    the future.
        In early 2012 (January to May), the three laboratories fulfilled a
    request from NNSA to conduct a 120 day study to evaluate alternatives
    for warheads to be deployed in multiple reentry vehicle systems, and to
    inform NNSA on potential options for future life extension programs
    (LEPs). The ``120-day study'' \12\--which considered advanced options
    for the nuclear physics package and various approaches on how to
    configure the stockpile using existing components and systems with an
    emphasis on raising the levels of safety, reliability, and security--
    provided an example of how a team was created consisting of a few
    experienced designers, several mid-career designers, and a large number
    of near entry level designers who were given the opportunity to develop
    timely and workable design solutions within customer constraints. By
    bringing together scientists and engineers from these different career
    stages, it provided a mechanism for transmitting information and
    experience in a productive manner, and helped develop useful practices.
    The 120-day study is an example of a best operational practice that
    demonstrates the high quality of the systems engineering capabilities
    within the complex.
    ---------------------------------------------------------------------------
        \12\ January 10, 2012 NNSA officially requested that LANL, LLNL,
    and SNL perform a 120-day study to evaluate alternative warhead designs
    and to inform NNSA on potential options for future life extensive
    programs.
    ---------------------------------------------------------------------------
        In conclusion, the Laboratories retain a core of talented and
    dedicated scientists and engineers who have accepted the
    responsibilities of the stockpile stewardship program and related
    activities. Constant vigilance will be required to assure that the work
    environment enables this workforce to perform at a high professional
    level in order to execute their important mission.

        Senator Udall. Thank you, Dr. Shank.
        Now we can go to some questions, and I will recognize
    myself for 8 minutes and then we will turn to Senator Fischer.
    So let me start with Dr. McMillan.
        Dr. McMillan, as my opening statement mentioned, your major
    LEP with the W76 warhead is closing out. The B61 LEP is
    primarily occurring at Sandia.
        Are you having problems, given that situation, retaining
    key scientific personnel in the weapons program?
        Dr. McMillan. Not specifically for those reasons, Senator.
    What we are seeing--and this goes to some of the comments that
    Professor Shank mentioned--are some of our early- and mid-
    career folks leaving at rates that are higher than those who
    have been there for extended periods. But today, as I look
    forward to the LEPs that are to be done--so here I am thinking
    particularly of the W88/78 that we talk about--I see challenges
    that remain for our weapons scientists. So I see the challenges
    remaining, but I do have growing concern for our mid-career and
    early-career workforce.
        Senator Udall. I know we will continue this discussion, I
    think, through the rounds of questions with the other lab
    directors.
        Let me turn to the CMRR, which you are well aware of. Last
    year, the administration postponed the construction of the main
    portion of that building for at least 5 years. This caused
    quite a bit of controversy on many fronts. In your opinion--and
    you spoke to this in your statement too--what can we learn from
    this and what do you recommend going forward and why?
        Dr. McMillan. Let's see. Let me go back just a moment
    because we often think of CMRR as a recent phenomenon. I was
    talking to one of my predecessors. The issues of CMRR go back
    to about 1983.
        The current design that we were working on until a year ago
    was a design that was put in place in 2003, and because of
    changes in program, changes in our understanding of the cost
    associated with that facility, and changes in budget, we--
    ``we'' meaning in particular the Government--have made a
    decision not to move forward with that right now, to delay it.
        Over the last year, we at Los Alamos have worked very hard
    to try to develop other options, and in particular, the other
    option that we brought forward to the Government for
    consideration is something that we call the modular approach.
    We recognize that it has been very difficult to build a
    facility that really does everything at once. So like we build
    submarines one at a time, we are looking at the question, can
    we build one module at a time that will provide capability when
    it is finished so that we can use it, we can learn from that
    building, and if necessary, build another. That is the path
    forward we have laid out as an option for the Government.
        Senator Udall. Let me turn to plutonium science. Are you
    concerned about the quality of plutonium science with the
    deferral of the CMRR? What can we do to maintain that quality
    of plutonium science?
        Dr. McMillan. I am concerned that we maintain the quality
    of that science. As we have been looking at options, one of the
    things I have personally addressed with the team and I know
    they have addressed because they have come back and told me is
    that not only do we have to have the ability to build pits, we
    have to have the ability to do the scientific work that ensures
    those pits for today and for tomorrow. So the options that we
    have put on the table are options that include the plutonium
    science.
        Senator Udall. I think I hear you saying that although it
    would be convenient to assume that plutonium science has
    discovered everything that there is to discover and that a
    plutonium pit is a plutonium pit, that, in fact, is not the
    case. That is, of course, as well the culture of the laboratory
    that you head.
        Dr. McMillan. That is exactly correct, Mr. Chairman.
        Senator Udall. Constantly pushing forward looking----
        Dr. McMillan. That is right. We have studied plutonium now
    for 70 years. This is our 70th anniversary. There are still
    unknowns.
        Senator Udall. Thank you for that.
        Dr. Hommert, I am going to turn to you and talk about the
    B61 LEP. It is primarily a Sandia-led effort. Are you able to
    hire and maintain the right skills mix for the next 5 years to
    continue through the mission?
        Then let me have you comment on the second part. What
    happens to these people after the B61 effort?
        Dr. Hommert. To answer that, let me first put the
    laboratory in a little broader context. For over 30 years, the
    laboratory has diversified, and today we are truly a national
    security laboratory with roughly 50 percent or so of our staff
    working directly on the nuclear weapons program, including the
    B61, the other part of the laboratory involved in a wide range
    of other national security efforts.
        When we were confronted with the challenge of staffing the
    B61, we have done that through a combination of two primary
    mechanisms. We have moved people with synergistic skills in
    engineering and program management and the right science from
    other programs to the B61 with a natural phasing to minimize
    the impact on these other programs. Of course, we have
    recruited because it is very important that we are training a
    new generation of scientists and engineers executing this
    program.
        We have been successful in both of that, and today the
    program is staffed at a level consistent with our budget. I
    will return to the budget comments, I am sure, shortly. I also
    want to emphasize we have achieved that with essentially almost
    no change of the top-line employment at the laboratory. So,
    again, we have either replaced with new people separations or
    retirements, or we have moved within the laboratory. So the top
    line is roughly constant.
        Regarding the long-term, as we look forward across the
    modernization efforts--there is the B61, the W88, the issues
    that my colleagues have mentioned in the W78/88--we see 10 to
    15 years of very significant activities that we expect these
    young staff that we have brought to be gainfully employed
    executing those programs and, again, in a broad institution
    like ours, we do not anticipate any difficulty providing them
    with rewarding careers in national security for 30 years or
    more.
        Senator Udall. Let me turn to the replacement fuze for the
    W88 submarine warhead. You know it is also common or joint with
    the W87 intercontinental ballistic missile (ICBM) warhead, and
    it should eventually work with the replacement of the W78 ICBM
    warhead.
        Are you concerned about too much design work at Sandia
    possibly leading to concurrency at the production sites like
    the Kansas City plant?
        Dr. Hommert. No, not really. I believe that the current
    plan--again, if we can execute the current schedule as it is
    laid out--has given consideration to phasing the development.
    For example, the first production unit of the B61, which we
    hope will be in fiscal year 2019, budgets permitting, is phased
    very appropriately with completion of the W76-1 production.
    Similarly, because of a fair degree of commonality that we are
    doing on this, it is going to reduce the total production load
    that is required component-by-component, and that allows us to
    phase in and be able to accomplish what we need to do on the
    W88 and on the fuze because there is only a small section that
    we are doing on the W87. So overall, I believe that those plans
    are achievable, at least as currently laid out. Yes.
        Senator Udall. As is currently laid out. I think that is an
    important insight.
        Let me ask a final question. It is my understanding that
    the Sandia contract is up for renewal in about 2 years' time,
    given that the combined Y-12 Pantex contract could possibly
    reopen by the recent Government Accountability Office (GAO)
    review. Are you worried about a similar effect happening at
    Sandia and causing a disruption with the large workload that
    you have?
        Dr. Hommert. Mr. Chairman, as a point of fact, our current
    contract expires September 30 of this year. There are two 3-
    month extensions possible that the NNSA can choose to elect. So
    I do not know personally the timing that NNSA or DOE plans on
    this competition or recompete on the contract.
        Ever since the announcement for that was made in December
    2011, our focus, particularly in these turbulent times, of
    staffing the B61 and executing the programs has been to
    minimize that disruption. The more certainty that can be
    brought not about the outcome of a competition but principally
    around the timing of a competition is helpful in minimizing the
    disruption. Naturally I am concerned that protracted
    uncertainty is not helpful, but I believe we can achieve what
    is on our plate if we can minimize that disruption and that is
    our intent.
        Senator Udall. Thank you.
        Again, let me recognize Senator Fischer.
        Senator Fischer. Thank you, Mr. Chairman.
        If I could, I would like to follow up, Dr. McMillan, on the
    plutonium strategy part, the CMRR. You spoke about the modular
    approach. When was that modular approach to replace the CMRR
    building first proposed, and why has it taken so long for the
    administration to assess the feasibility of that concept?
        Dr. McMillan. Let me just add a little to my earlier
    comments because there is more to the strategy than just the
    modular approach. There really are three elements in our
    strategy.
        First, is more effective use of facilities that we have
    today in part made possible by decisions that our partners in
    NNSA have made. As an example, with the newly constructed
    Radiological Laboratory/Utility/Office Building (RLUOB)
    facility that is coming on line right now, we are being able to
    use analysis that was done in 1992 to move from a 6 gram
    administrative limit to a 26 gram administrative limit. That
    makes a big difference in how useful that facility is.
        Second, because of changes in how much material we can send
    away from our facility--and this is particularly referring to
    PF4, which is our large plutonium facility. Cold War plutonium
    was very scarce. As a consequence, we had the ability to
    recover almost every gram of plutonium. That took up nearly a
    quarter of the floor space in PF4. So on one side of PF4, we
    were developing the technologies that will turn plutonium into
    oxide, and on the other side, we were recovering almost every
    gram. This did not make sense. So we have proposed to the
    Government to say, let us send more of that material to the
    Waste Isolation Pilot Plant (WIPP), as an example. That
    reclaims very valuable floor space.
        Yes, Senator?
        Senator Fischer. If I may interrupt, why did it not make
    sense? Because you did not have the space to store it in your
    facility and you wanted to store it elsewhere or why?
        Dr. McMillan. No. It did not make sense because we no
    longer had the shortage of plutonium that happened in the Cold
    War. That is why it did not make sense.
        So reclaiming that very valuable space is the second part
    of our strategy.
        The third part of the strategy is the modular construction.
        Senator Fischer. Are you still concerned, though, about
    reclaiming all of it?
        Dr. McMillan. No. We do not believe that that is necessary
    for the Government to do. Again, we have been working with our
    partners in NNSA to make that part of the policy environment in
    which we can operate.
        Those three things taken together are what compose our
    plutonium strategy and why we believe that we can extend the
    life of PF4 by taking the highest risk materials out of that
    facility into the modules, and use that very valuable nuclear
    space that we have in a way that was different than in the
    past.
        A logical question is, why did we not do this in 2003? The
    answer is, we were in a different programmatic space in 2003.
    Today our partners have said, let us look at other options.
    This is part of what I mean when I say challenging assumptions.
    These are examples of assumptions we have challenged in the
    last year. So the decision to delay CMRR, coupled with
    decisions about policy changes, have opened options we did not
    previously have.
        Senator Fischer. So do you believe then that the delays are
    happening because you are challenging the assumptions and
    looking to go the best way forward?
        Dr. McMillan. We believe that we can execute the strategy
    we have laid out, provided there is funding, in a timescale
    that meets the needs of the stockpile. We have worked very
    closely with General Kehler on what those timescales are, and
    we believe it is possible to meet those timescales starting
    now. However, I am concerned if we delay.
        Senator Fischer. I am learning about nuclear pits. Is it
    more affordable to have an approach where you are trying to
    achieve the stated requirements to produce the 50 to 80 new
    pits per year that I believe General Kehler has recommended? Do
    you have a plan for that? Are we going to be able to meet that
    50 to 80?
        Dr. McMillan. In our current situation, without doing
    additional construction, we believe that we could produce up to
    about 30.
        Senator Fischer. Is that what we need, or do we need the 50
    to 80?
        Dr. McMillan. If I can finish just a moment and then I will
    come back to that.
        If we are able to put the modular approach in place and
    begin work on that, we believe that will get us to in excess of
    50 pits per year. So that is the level.
        Given the current assumptions about stockpile size and
    LEPs, if we are able to start the production of order, 30-a-
    year in the early 2020s, we can meet the requirements that
    STRATCOM has, but if we can get to 50, that gives us some
    margin in case we slip on the time. It becomes a race with
    time. Nature is acting.
        Senator Fischer. Are there any technical risks in moving
    forward at that pace?
        Dr. McMillan. The place where the technical risk shows up
    is this strategy depends on something that we have described as
    pit reuse. Pit reuse is something that, I think, is a credible
    path forward, but what that does is that moves the risk from
    pit production risk to risk that is associated with
    certification. We have begun work in the last year since I last
    spoke to this committee that is very encouraging in that
    regard. The words I used last year were ``cautious optimism.''
    Those words still stand, but there is continuing evidence to
    support that cautious optimism.
        Senator Fischer. From your statements last year with the
    cautious optimism, you are still in that same place today.
        Dr. McMillan. I am with additional evidence to support
    that.
        Senator Fischer. Thank you, sir.
        Dr. Albright and Dr. Hommert, on pit reuse, the existing
    pits that we have in the inventory that we are thinking about
    using--I have been told they are between 20 and 50 years old.
    Is that correct?
        Dr. Albright. Yes.
        Senator Fischer. Yes. Okay.
        Do you understand the factors that are involved in reusing
    these pits and risks that might be there?
        Dr. Albright. I think we have a pretty good understanding
    of the various factors involved. One of the factors that you
    imply had to do with the aging of plutonium over time. There
    has been a pretty concerted effort at both Los Alamos and at
    Livermore over the last decade or more that has been looking at
    plutonium aging, and we actually have samples that we keep in
    our laboratory--and Los Alamos does the same--that are 40, 50,
    60 years old that support the conclusions that the last decade
    of study has implied, which is that these pits are good for
    many more decades to come.
        The other issues associated with reuse revolve around pits
    that were designed for a conventional high explosive implosion
    that we now want to use in an insensitive high explosive regime
    system. There, I think, the science is a little bit more
    complicated, but I think both Los Alamos and Livermore would
    agree that we have developed approaches that we believe are low
    to medium risk associated with that and, frankly, are pretty
    confident that we can make this work. I think the real issue
    there is going to be the certification process, doing the kinds
    of experiments that do not just convince us but, frankly,
    convince the Navy and the Air Force that, in fact, these things
    work as we predict they will.
        Senator Fischer. So you have done experiments on them.
        Dr. Albright. Some experiments have been done. In fact--let
    me see. I am not sure what I can say here.
        Dr. McMillan. If I may, we did nuclear tests back in the
    day of nuclear testing that used the concepts that both
    Livermore and Los Alamos are considering.
        Dr. Albright. Right. I was not really sure I could talk
    about that.
        Senator Fischer. On the older ones that are 40 to 60 years
    old?
        Dr. Albright. No. The plutonium experiences that were done
    were not that old, but what was important about those
    experiments is that they were pits that were designed in a
    conventional high explosive system and were actually being
    tested. They had, in fact, been certified and were about to be
    deployed into the stockpile, and then they just did not. They
    were actually going to be deployed in an insensitive high
    explosive environment. These are pits that are very similar to
    the ones that are under consideration right now.
        Senator Fischer. Thank you so much. My time is out.
        Senator Udall. Thank you, Senator Fischer.
        Dr. Albright, let me continue visiting with you. I
    mentioned that at the NIF last year, I do not think we achieved
    sustain fusion, or burn as I think it is known. That milestone
    is important, I think, for the stockpile stewardship program.
    Can you explain what effect we will see because of not
    achieving sustained fusion when it comes to our understanding
    of the weapon and any other comments you might have?
        Dr. Albright. Sure. So let me actually start by pointing
    out that the NIF is to this day doing many experiments in
    support of stockpile stewardship. We actually have a demand for
    about over twice the number of experiments, requests that we
    can actually satisfy in the facility today.
        The particular stewardship experiments that you are
    referring to have to do with thermonuclear burn. There was a
    requirement or a milestone that passed last year without our
    achieving thermonuclear burn at NIF.
        The weapons issues that are associated with that have to do
    primarily with the uncertainties and the physics associated
    with what is called boost. This is a process that occurs right
    at the end of an implosion of a primary and is one of the
    remaining physics uncertainties that we have about the
    operation of nuclear weapons.
        In our computer codes, we have--my colleagues would call
    them--adjustable parameters. I call them fudge factors. We have
    parameters in the codes that we tune to replicate our
    experience with underground tests that we would prefer to
    actually have based on scientific fact. That allows us then to
    assess options for LEPs and to, frankly, just better understand
    the operation of a nuclear weapon if we were able to achieve
    fusion ignition at NIF.
        I would also like to point out that the NIFs were reviewed
    by many external panels, the National Academy of Sciences. We
    had a panel that Bob Byer led who was a former president of the
    American Physical Society. There have been numerous NNSA
    reviews. Every one of them has made the point that although a
    perhaps more deliberate approach is needed to try to achieve
    ignition and more time is needed, that there are no reasons to
    believe that ignition cannot be achieved at the NIF.
        So we continue to do experiments. Actually this more
    deliberate approach has been applied over the last year or so,
    and I can tell you it is showing very good dividends.
        Senator Udall. Thank you for that elaboration.
        Let us turn to the LEP of the ICBM W78 warhead. You are the
    lead for that work. My understanding is that the administration
    is pursuing an evaluation of an interoperable warhead for the
    W78 and the submarine W88 warhead. I realize this is early in
    the concept assessment phase, but in terms of risk, how risky
    is this effort, say, compared to straight LEPs of the W88 and
    the W78 warheads?
        Dr. Albright. That is a very good question. My view is it
    is actually very low risk. I think all the components that are
    involved have been nuclear-tested in the past. There are some
    potential issues that are more on the engineering side having
    to do with both the mass properties and making sure that the
    nuclear explosive package that we develop can fly in both a
    submarine-launched ballistic missile (SLBM), as well as an
    ICBM. Then there are also interface issues that are more in the
    Sandia realm associated with interfacing with the submarine-
    based weapons system and the Air Force weapons systems. But
    these are all, I think, very doable.
        Senator Udall. Let me ask a question that I think you are
    ready for. Does the fiscal year 2014 budget request enable you
    to meet your commitments to maintaining the existing stockpile?
        Dr. Albright. I think that there are significant impacts in
    the fiscal year 2014 budget request. With regard to the W78/88
    LEP, we believe that there is enough funding in the fiscal year
    2014 budget to support some of the things the administration
    wants to do like an early down-select. However, there are some
    technology maturation issues that are not funded and are the
    kinds of things you want to do early in the program. You do not
    do technology maturation late in the program, and therefore, if
    you do not fund those when you need to fund them, you add risk
    to the program. So I think that is an issue.
        I also think, as I pointed out in my opening remarks, what
    the laboratories do is more than just maintain the existing
    stockpile. We also provide a workforce and a set of
    capabilities that is needed again to conduct significant
    finding investigations, to be able to assess issues that pop up
    under surveillance, and again, to provide a hedge against
    technological surprise and changing national security
    conditions. I do believe that the fiscal year 2014 budget does
    significant damage to some of the scientific capabilities at
    the laboratory in that regard.
        Senator Udall. Is it fair to say that if you are in a
    position where you, at best, furlough people, at worst, you are
    laying people off, you cannot just, if the conditions change,
    retrieve those people, rebuild that workforce overnight? You
    all operate in a unique market, if I could use that term.
        Dr. Albright. I think that is correct. When these people
    leave the laboratory, you lose them. They are gone forever. As
    I think Dr. McMillan pointed out earlier, and actually Dr.
    Shank made the same point. We are in a unique market that
    requires years of training and expertise. You do not just
    become a nuclear weapons designer overnight. As Dr. Hommert
    pointed out, you bring in young people, you pair them up with
    older people, and they develop that expertise over time. To do
    that and then to show them the door is in my view not a good
    policy.
        Senator Udall. Yes. I was intrigued, to put it mildly, to
    hear--and I think Senator Fischer may already know this--that
    you and the other laboratories often are competing with Google
    and Twitter and a lot of the new technology businesses for the
    kinds of minds and work ethic that you all need.
        Dr. Albright. So it is interesting. It is interesting you
    say that. I actually took a tour of the Twitter site about 3
    weeks ago. I am in the Bay Area, and it is a different
    universe, I will say. We are never going to offer our people
    free lunches and we are never going to be able to offer a
    massage room, which is what they had.
        But what we do offer is the ability to work with the very
    best in the country on a mission. The people who come to our
    laboratories come because they want to make a difference, and
    the kinds of things that we do in our laboratory make a
    difference. As long as they feel that they can make that
    difference, we can retain them. They are working with the best
    facilities, the NIF, Dual-Axis Radiographic Hydrodynamic Test
    Facility over at Los Alamos, Microsystems and Engineering
    Sciences Applications at Sandia, and they work with the very
    best people. We still remain a destination for the very best
    and brightest in this country. I really worry about whether we
    can sustain that in the current environment.
        Senator Udall. Thank you for those insights.
        Senator Fischer.
        Senator Fischer. Thank you, Mr. Chairman.
        If I may, I would like to get into a little more detail on
    the W78 and W88 and also the LEP. For the three of you
    gentlemen, last year I believe the committee was informed that
    the LEP was being delayed 2 or 3 years, and you mentioned the
    current status on that. I am probably doing a rhetorical
    question here. Do you believe that there is sufficient funding
    in the out-years so that you are going to keep that 2025 date
    for the first production unit?
        Dr. Hommert. I can start. Let me just say for the W78/88,
    we are still at a very early stage. In the space for my
    laboratory, I feel like the work that we are doing and
    executing today on the B61, the W88 Alt 370, and the Mk21 fuze,
    in addition to the early study that we did a feasibility study
    on interoperability, position us quite well to support with
    adequate funding, which needs to begin not for a few years yet,
    a date in the mid next decade. So from a Sandia perspective, I
    think we are in a reasonably good position to support that if
    these other activities are supported on the currently
    established schedules, and I have some concern about that. But
    under that assumption.
        I do believe--and I will let my colleagues comment--that as
    a perhaps not entirely uninformed observer of their
    responsibilities on that effort, that we should be beginning
    now to take on the certification challenges associated with the
    nuclear explosive package because I do believe that there are
    risk issues there, although I have great confidence in my two
    sister laboratories that they can achieve that. But I believe
    that that is what should begin and begin soon.
        Senator Fischer. If there are limits to the funding that
    these other activities would receive, does that then limit the
    scope of your mission?
        Dr. Hommert. Let's see. If these activities I have just
    outlined are not funded in the schedules that we laid out
    really last year in preparation for fiscal year 2013 for full
    scale engineering development, then you have a variety of
    issues that occur.
        Senator Fischer. How do you prioritize then?
        Dr. Hommert. I think in my mind it is clear that the B61 is
    a high priority. It has a number of drivers. There are some
    technical issues, which we will not talk about in detail here,
    that are real drivers for that early next decade. So we really
    need to progress on that. The Navy has some very clear drivers
    also for the W88 Alt. All three have issues. There are
    different scope activities. The current schedules, I think,
    have the right priorities in terms of timing.
        The concern is that if those slip significantly, you then--
    going back to an earlier point that the chairman made--have the
    possibility of stacking up a fair amount of production
    requirement falling on top of one another early the next decade
    and also just late design activities that can complicate our
    ability to support the W78/88. There is a sequencing and
    phasing here that is important to adhere to.
        Dr. Albright. I referred earlier to some of the technology
    maturation efforts that are needed on the W78, that if you
    defer these, you are adding risk in my view to the program.
        The other key risk factor, I think, is whether or not we
    can--without going into the detail, the most likely option for
    the primary on the W78/88 does require the stand-up and
    operation of plutonium pit production capabilities at Los
    Alamos. So any delay by the Government--any delay in funding to
    get that stood up--and that really has to start now--is going
    to add significant schedule risks to the program.
        Dr. McMillan. To build on what my colleague just said, the
    strategy we have proposed is a proposal that is based on that
    schedule, the schedule of producing the pits that will be
    required for the W78/88. So if we are able to start, I have
    high confidence in the team at Los Alamos and their ability to
    deliver on that.
        The other role that we will play at Los Alamos is a peer
    review role for our colleagues at Livermore. I think this is
    one of the values that the Nation gets from having two
    laboratories such as the ones we represent. So we will play
    that role in the W78/88 as well.
        Senator Fischer. Thank you.
        It is my understanding that you are looking at a warhead
    that is suitable for an ICBM and also the SLBM. Correct?
        How is that coming along?
        Dr. Hommert. Let's see. Again, we did an early feasibility
    study, and I would say that was positive on our ability to do
    that. There is a lot of devil in the details in this, as our
    Navy and Air Force colleagues remind us frequently. There is
    more work to be done in a concept phase in what we call 6-2.
    There will, undoubtedly, be some adjustments as we go along,
    but in the space of arming, firing, and fuzing (AF&F) and in
    the support of different security features, I am confident that
    the modular approach that we are pioneering now, with examples
    like you have there, will afford us flexibility we have not had
    in the past. So I do believe there is much to be had here, but
    there is a fair amount of work that has to yet be done to
    determine how far and how effectively we can implement such a
    concept.
        Dr. Albright. Yes. I would just add one area where there
    was a potential risk, I think, was taken off the table when the
    Air Force made the decision on the reentry body that they
    wanted us to design to. That helped a lot.
        I think in the early concept phase we identified some
    issues associated with what are called the mass properties of
    the warhead. This has to do with where the center of mass is in
    its various moments because the SLBM flies differently than the
    ICBM does, and the post-boost vehicle and the reentry body fly
    differently. But I think we have to the point now where we are
    pretty well convinced that that is very doable.
        Senator Fischer. Thank you very much.
        Senator Udall. Thank you, Senator Fischer.
        Dr. Shank, let us turn to the good work you are doing. In
    phase I of your report last year--I think you alluded to this
    in your opening statement--you mentioned a lack of trust and
    micromanaging between the NNSA and the personnel at the weapons
    labs. Does the recent Y-12 break-in and claims of lack of
    Federal oversight give you any pause? What do you intend to do
    in terms of your final report as to clarifying this or further
    expanding on what you have viewed, what you have observed?
        Dr. Shank. Certainly Y-12 is a very different kind of an
    institution from the national laboratories. So it is not
    something we looked at and not something that our report had
    anything to say about.
        My own personal opinion, as you look at dealing with that
    issue, there are serious growth issues having to do with Y-12
    that to me, if the answer is to put another layer of oversight
    rather than fix and make more effective and make sure that the
    oversight is efficient and effective, I do not see a solution
    to the problem. I certainly would not change anything that we
    had in our report having to do with that. Having said that, it
    is not the same kind of institution as the laboratories, but
    that it is a matter of doing oversight effectively,
    efficiently, and rather than looking at low-level details, look
    at the most important issue. In the case of the Y-12, what
    could be more important than protecting that stockpile or that
    material?
        Senator Udall. Let us talk about retention of scientists
    and engineers. Are you worried about retaining key personnel at
    the two physics laboratories, which of course are Los Alamos
    and Livermore?
        Dr. Shank. I think constant vigilance is going to be
    required in retaining those employees. Things are clear that
    currently there has been a slowdown in the market for such
    people. As the economy recovers, I think that is going to be
    more of a challenge. I think if you look at issues of working
    in an audit environment, working in an environment where your
    ability to grow as a scientist are restricted by the issues
    that I raised in conference travel and a lack of attention to
    the work environment, yes, I think there is a risk.
        I think that on the up side, the kind of people that we are
    talking about and I heard about here with my colleagues to the
    right--described the kind of people they get. They are very
    motivated by the mission. I think that when I talk to young
    people in the laboratories, you can clearly see they were
    motivated by the mission but very concerned about what was
    going to happen with their career with the trends in the work
    environment.
        Senator Udall. Let me turn to a question and comments I am
    sure you would have on the capacity of the laboratories to do
    non-defense-related research. It has often been said that one
    of the great strengths of these laboratories is their capacity
    to apply multi-disciplinary teams to fields outside the weapons
    area. The human genome project is an example of this kind of
    work.
        What are your thoughts on this potential and to what extent
    should we be encouraging or supporting the laboratories to
    continue these scientific pursuits?
        Dr. Shank. In our first report, we lauded the five-agency
    agreement that took advantage of the unique skills of the
    laboratories to work on broader national defense programs. I
    think all of the laboratory directors, when I have heard them
    speak, say that their number one mission is the nuclear weapons
    complex. Things that add to that support that mission. So in
    terms of what we have looked at and what we think the
    laboratories are capable of, there is an enormous amount of
    work that can be done of a very broad nature that in the end
    support that I think particularly at Sandia where they have a
    very large ``work for others'' program that, as we heard, very
    successfully helps them address mission needs as they arrive. I
    think there is a very large area in that work space where the
    laboratories can be useful.
        Senator Udall. Let me direct a common question to all of
    you. I actually have a series of them. But in stockpile
    stewardship, it was one of the great successes in the 1990s
    when we saw the development of tools and people to maintain the
    existing stockpile without testing. Do you believe it was and
    continues to be a successful program, and what do we need to do
    to keep it on track? I will start here and we will move across.
    Dr. McMillan?
        Dr. McMillan. Thank you, Mr. Chairman.
        I have had the privilege of spending the leadership portion
    of my career, most of the last 20 years, working on stockpile
    stewardship. I believe that today the results we are seeing
    from stockpile stewardship exceed the expectations I, for one,
    had when we started nearly 20 years ago. It is an investment
    that the country has made, and it is an investment that is
    paying off handsomely in our understanding of the stockpile
    today. In my annual assessment of the stockpile just last year,
    I saw results in understanding nuclear tests that were done
    during the period of nuclear testing that we did not understand
    and that today, because of the investments the country has made
    in stewardship, we understand. So I believe those investments
    have paid off handsomely in our ability to assess the
    certification and to certify systems as they go in.
        Dr. Hommert. I certainly agree with my colleague. He and I
    were actually together on the ground floor of this program in
    the middle 1990s. I also believe it has exceeded our
    expectations. I think it leaves the country in an enormously
    strong position to deal with whatever might be thrown at us
    because of the deeper understanding we have. For example, that
    component which will go into the AF&F assembly, for the Navy
    will be certified to radiation conditions for the first time
    without underground testing, as well as without certain fairly
    expensive-to-operate above-ground facilities with, I believe,
    great confidence because of the tool sets we have put in place
    over the last 10 years.
        I also believe that we would not have the robust talent
    that we have just been talking about if we did not have the
    facilities and capabilities that stewardship put into the
    laboratories that has allowed us to attract the individuals
    that we now are using.
        The last point I would say is that there is a natural
    transition here. We must continue to work the stewardship
    issues. But I also think it is fair to challenge us that we
    have to demonstrate the value of these investments in how we
    execute modernization. I believe we have begun to do that in
    cost management and in our ability to qualify and certify with
    great confidence. I believe we are well-positioned to do that.
        Dr. Albright. I think it has actually been an
    extraordinarily successful program. I was not part of the
    laboratories when this was founded, but I certainly was an
    observer from the sidelines. I think nobody expected it to be
    as successful as it has been. It is basically founded on the
    idea that through scientifically grounded understanding of how
    a nuclear weapon operates, coupled with simulations of that
    theory and then experiments that challenge the assumptions
    associated with that that we can substitute for the Cold War
    paradigm of constant design and nuclear tests out in the
    desert. So far that has worked out extraordinarily well. We
    have, for example, found issues with our weapons that we would
    not even have found out about in a nuclear test. We have
    actually found out about them through modeling and simulation
    and have been able to repair them, things that we would not
    have found out except through the stockpile stewardship
    program.
        I will point out again, echo the point that this is really
    all about the generation of people that we are developing. I
    just appointed an acting director for my weapons program who
    came to the laboratory in 1998. That is 6 years after the last
    nuclear test. As we proceed forward with the W78 and W88 and
    the long-range standoff and the series of LEPs, the number of
    people who we are going to have attached to these programs who
    were ever even in their youth associated with a nuclear test is
    diminishing rapidly to zero. So this is really an essential
    program for sustaining the stockpile.
        Senator Udall. Dr. Shank, do you care to comment?
        Dr. Shank. The only comment that I can make is that the
    ability and the focus of the laboratories in recruiting the
    next generation of weapons designers and engineers and
    scientists has really produced remarkable results, I think that
    gives me a good feeling that they will be successful in the
    future, providing the work environment and all the other things
    that allow them to work at their very highest potential will be
    fulfilled.
        Senator Udall. Senator Fischer.
        Senator Fischer. Thank you, Mr. Chairman.
        Dr. Shank, in your opening remarks, you referred to a study
    and you said that your views were your own when you commented
    on that. You said that experiments are becoming unaffordable.
    Is that correct?
        Dr. Shank. Correct.
        Senator Fischer. You referenced regulations and duplication
    and a lack of trust, and you said we are often missing the big
    picture. So how do you believe we can improve the NNSA then?
        Dr. Shank. That is a very good question. In my last
    testimony, I will describe what I had said.
        First, this is public money, Federal money. It must have
    Federal oversight. It is absolutely essential for the trust and
    the ability of Congress to be able to support this work that
    there be oversight. However, I believe that we could do much
    more efficient oversight, and efficient oversight would come
    about rather than overseeing each detail, each action, we would
    put together a system much like a bank puts together a system.
    It does not look at any transaction but, in fact, looks at a
    system that is maintained by the laboratory and audits that so
    that there is a responsibility of the laboratories to be
    transparent and auditable in what they do. At the same time,
    this gets efficiently done in a very cost-effective way with
    fewer people by putting the onus on the laboratories to be able
    to operate in a system that has been accepted and verified and
    one in which it can be audited.
        I spent the first 20 years of my career in private
    industry. If private industry did oversight of its work the way
    that we do at these national laboratories, it would be very
    difficult for them to survive financially. I think that we
    ought to look and realize that every time we spend money in
    doing something in an oversight issue which could be done more
    effective and efficiently, we are losing an opportunity. So I
    want to make very clear not just less oversight, more effective
    and more efficient oversight, look at things that are very
    important and give you an answer that you trust that the work
    is being done. If you look at the laboratories as untrustworthy
    institutions, then the kind of oversight that you are going to
    have is going to be one in which you want to look at every
    transaction. So the laboratory has to do work to raise their
    level of confidence and capability so they can be trusted to do
    this. So the core issue is trust. The long-term goal is
    efficiency.
        Senator Fischer. Thank you, sir.
        I would ask all the lab directors then how you would
    describe your relationship with the NNSA, with your laboratory,
    and what do you believe should be the central focus of this
    newly created congressional advisory panel. If you would like
    to each take a turn at that, please.
        Dr. McMillan. First, let me agree with Professor Shank. I
    believe oversight is important for both the Government and the
    laboratories to ensure that we have processes and programs that
    can lead to trust. I continue to see growth in that area in our
    interactions over the last year with NNSA. I continue to
    believe that there is opportunity for growth. I look forward to
    the congressional commission that has been appointed because on
    that commission, I see many people with many decades of
    experience, and I believe there are opportunities through that
    commission to bring additional strength to that relationship.
        Dr. Hommert. I clearly think this is an area that is very
    fundamental to our ability to continue to perform cost
    effectively and for the environment for our staff. I do believe
    that the relationship needs a fresh look. I think there may be
    structural issues in the way NNSA is positioned inside the
    Department of Energy (DOE). I believe that the panel that has
    been established has absolutely the right expertise to take a
    hard look at that. I would say, along with Dr. McMillan, I see
    some things that are positive. We have tried to move to a more
    strategic performance evaluation plan.
        On the other hand, I continue to experience a very high
    level of detail scrutiny that makes it difficult for me, I
    believe, to get the focus on continuous improvement in our
    performance in operational aspects, whether it be safety or
    security. We are not perfect in these regards. We need to
    continuously improve. But that will not be achieved by fairly
    detailed compliance efforts that are not looking at overall
    larger improvement efforts among our workforce.
        There is room for improvement here. I think that the
    congressional panel is well-staffed to do that. We look forward
    to interacting with them.
        Senator Fischer. Do you believe that if the focus is not so
    much on every single detail and you have a panel that you are
    hopeful that they are going to maybe take that broader look,
    will that help with your timetables on different projects?
        Dr. Hommert. It could. It could help because----
        Senator Fischer. Also with costs then as well.
        Dr. Hommert. Absolutely. There are some significant costs.
    Timetables are usually driven--I did not get a comment to talk
    about the 2014 budget, but budget limitations can impact
    timetables. If you can execute more efficiently, more cost
    efficiently, that relieves some of that pressure. It will allow
    you to hold schedule. That is important. That will not happen
    overnight, but I do believe there is opportunity there.
        A statistic. Last year, we had 73 independent external
    governmental audits within the space of a year. That is one
    every 3\1/2\ days. You have to have a certain amount of
    staffing to interact at that level on any individual one. It's
    entirely appropriate for the Government to do, but you might
    expect there is a bit of duplication and there is a bit of
    process that is not always the most efficient use of resources.
    So there is some opportunity here, yes.
        Senator Fischer. On those audits, how many agencies did
    they come from?
        Dr. Hommert. The majority of those are from aspects of the
    DOE and, of course, the GAO was involved in that. But there are
    different components of the DOE, whether that be what is called
    Office of Health, Safety, and Security or NNSA itself or the
    Inspector General, all appropriate organizations and again each
    individually an appropriate examination. But when you sit on
    our side of the equation, it can be a fairly significant burden
    and the potential for duplication is there.
        Senator Fischer. Do you keep track of the hours of work
    that go into these audits and itemize them by duplication?
        Dr. Hommert. Senator, would you like to join our management
    staff? You are cluing in on some pretty good questions.
    [Laughter.]
        Senator Fischer. I look at this as common sense.
        Dr. Hommert. Thank you.
        We have looked at it in selective cases and it is
    significant. The cost of these things certainly runs in the
    millions.
        Again, I want to emphasize that audits and external
    oversight are absolutely appropriate.
        Senator Fischer. Yes, they are.
        Dr. Hommert. It is how you hone it and make it efficient.
        Senator Fischer. Thank you.
        Dr. Albright, just a few minutes.
        Dr. Albright. Yes. I will try to keep it brief.
        I think my colleagues have actually covered most of this.
    This is not the first study that we have done on this topic.
    There have been a number of studies over the last 5 or 6 years.
    They all pretty much have come to the same diagnosis and maybe
    some slight differences in what the cure might be.
        I think you have assembled an incredibly talented panel of
    people who have a deep insight and history into NNSA and the
    governance process. So I am looking very much forward to what
    they come up with.
        A couple of observations. One is--and Dr. Hommert alluded
    to this--you do not have, in my view, a clear set of roles,
    responsibilities, authorities, and accountabilities on the
    Government side. So you have NNSA headquarters. It has its
    beliefs about what its roles and responsibilities are. You have
    DOE headquarters. You have what is formerly known as the
    Albuquerque Service Center. You have the site offices. I have
    100 people at my site office. You have about the same. Even
    within the site offices, you have contracting officers and then
    you have the site office manager, and they do not always agree
    and they are all setting policy.
        So getting that clarified and, furthermore, getting it
    focused on--as you make policies on oversight, you have to make
    that cost-benefit trade that Dr. Shank referred to in terms of
    how it impacts the mission. The easiest thing you could do, if
    you wanted no safety or security issues, is to just put a big
    brick wall up around the laboratories and not let anybody in.
    That will take it down to zero. So there is a cost-benefit
    calculus.
        Then, frankly, I think the other thing that Dr. Shank
    alluded to is we have to have clear roles, responsibilities,
    authorities, and accountabilities between the Government and
    the laboratory management. We have at our laboratories a view
    as to what our responsibilities are for managing the laboratory
    in terms of our human resources policies, our business
    practices, our safety and security. The problem in part is that
    we also have about 1,000 people in the Government who also
    think they have those same roles and responsibilities and
    authorities and accountabilities. That is how you get into this
    transactional oversight regime and where we are in a position
    then of having large numbers of people on our staff there to
    feed the beast without any real value added.
        So I really look forward to this commission and seeing what
    they come up with.
        Senator Fischer. Thank you.
        Thank you, Mr. Chair.
        Senator Udall. Thank you, Senator Fischer.
        I have one more question. We are counting down to the 4
    o'clock timeframe which we were going to attempt to end the
    hearing. This has been very valuable.
        I know we were talking about this question I am going to
    ask you. So take that into account. The 2010 posture review
    mandating the NNSA to undertake a wide range of LEPs, as well
    as replacing unique and costly facilities. The problem that I
    think we face in Congress is the poor track record of the NNSA
    when it comes to maintaining cost, scope, and schedule from
    prior projects. If there is a single issue that you think
    stands out leading to this poor track record, what would you
    identify that to be?
        Dr. McMillan, I do not know if you want to wade in first,
    but we will ask you to do so.
        Dr. McMillan. The one-word answer would be: stability. If
    we can have stability that gives us the predictive ability to
    do things, then we can move forward. If it is constantly
    changing, it makes it almost impossible for us to do what we
    would like to do, as well as I know you would like to do.
        Senator Udall. Thank you.
        Dr. Hommert. I would echo that. I will give you as an
    example the B61. We laid out what we call a weapon development
    cost report in June 2012. It laid out a 12-year program. We
    believe that if we want to execute that program on schedule, on
    cost, then adhering to that plan is the most effective way to
    do that. When we have either changes in requirements or even, I
    think, going back to our previous topic where we do not have
    the most effective partnership working between the laboratories
    and the NNSA, all of that can lead to uncertainty, can lead to
    changes that have the net result of adding cost, adding delays
    into performance. So these are areas I think we have to really
    focus on.
        I believe we have in front of us, across all of the topics
    we have touched on today, some sound plans. We just now, I
    think, need to focus on executing those plans, minimizing
    changes to requirements, minimizing uncertainties in, quite
    frankly, the funding profiles that we need to execute them.
        Dr. Albright. Yes, I would echo all of that.
        I think you also should not lose sight of some of the
    successes that have occurred within the nuclear weapons complex
    when we do have that kind of stability. One example I would
    point to is in high performance computing. We have had a longer
    than a decade record of delivery, partnership with industry,
    and delivery of capability that, frankly, exceeds anything
    anybody would have expected on cost, on schedule. I think that
    is in large part due to the fact that we had a good partnership
    with the Government in how we executed that part of the
    program. We had stability in the requirements. We all knew
    where we were trying to go and we were allowed to do that.
        Senator Udall. Fair enough. It is important to acknowledge
    those successes.
        Dr. Shank, you have the last word here.
        Dr. Shank. I think the laboratories have tremendous
    potential. I hope that we can get a focus and help fix some of
    those issues that allow them to be better managed. But I think
    you have great people and I have great confidence they are
    going to deliver on their mission.
        Senator Udall. I think, again, I heard you say the core
    issue is trust. If we are able to generate some additional
    efficiency, we will build trust. Is that an accurate way of----
        Dr. Shank. Trust and performance.
        Senator Udall. Performance. Thank you for that.
        Senator Fischer, do you have other questions?
        Senator Fischer. I just have a couple quick ones here. Dr.
    Hommert wants to talk about the budget. Last year, you
    expressed some concern about the impact of funding shortfalls
    on these different programs, especially over the next 5 to 10
    years. You said we run a huge risk in our ability to continue
    to do stockpile assessments and to conduct future LEPs.
        So given that we now have some 34 percent or that we are
    some 34 percent short in that funding increase, that $1.4
    billion shortfall, that was promised in November 2010, is your
    concern now greater than it was last year?
        Dr. Hommert. I would answer it this way. I think from where
    we were last year--an example I gave is the B61. We have now
    gone through a very elaborate, detailed process of estimating
    the cost to execute that program and we have shared that with
    the Government. They have put it together across the entire
    enterprise.
        My concern is that our ability to hold to that schedule
    requires that the funding in the key years--in the case of the
    B61, 2014, 2015, 2016--be consistent with that plan. From what
    I can tell now as a result of sequestration in 2013 and what we
    see in the 2014 budget, we are going to slip off of that plan
    not dramatically but slip enough that in my view we will see
    schedule impact. Schedule impact will lead to cost growth. So I
    do have some concern.
        Furthermore, when that happens, you begin to pressurize the
    entire program and it puts more pressure on our ability to do
    the adequate surveillance that we need to do, et cetera.
        So I think we need to pay close attention to this going
    forward. These schedules are visible. They have cost impacts.
    They are, right now, I think, under some pressure. So my
    sentiment remains the same as last year.
        Senator Fischer. My last question for you then, sir, as a
    Nebraskan who has been to STRATCOM and understands the
    importance of STRATCOM, you are the only one of the three
    laboratory directors who testified during the New START
    hearings. Do you think we have lived up to our modernization
    commitments?
        Dr. Hommert. Let's see. I would say very positively that
    the challenge that we faced in 2010 to transfer the policy
    level NPR direction, which is what we testified or basically
    spoke to in 2010, into executable plans--there has been great
    progress made on that. Now our challenge is collectively
    between the administration and Congress to fund those
    executable plans. That is a challenge in this fiscal
    environment. We understand that, and so we will have to see how
    we trod through that.
        So on the one hand, I am encouraged that we have made the
    right kind of progress from policy to plans. Now my concern is
    can we execute them. That challenge sits in front of us. When
    we are funded, as that little component indicates, these
    institutions will execute without question.
        Senator Fischer. You do remarkable work, all of you, and I
    thank you for being here today.
        Senator Udall. Dr. Hommert, I assume you want this
    wonderful mechanism back. [Laughter.]
        Dr. Hommert. I do actually, yes.
        Senator Udall. It is a work of art. We appreciate it,
    because I know Senator Fischer and I are both visual learners,
    your bringing a--it is not a prop. It is an aid and it is also
    an example----
        Dr. Hommert. It is going to fly in a development unit in a
    couple of months, so it will be in the air.
        Senator Udall. That is what we do the best, which is
    innovate. It is how we are going to continue to see our economy
    grow and prosper.
        Let me just, again, thank you for your expertise, for your
    time, for the very thoughtful testimony. I know you--I think
    Senator Fischer would join me in acknowledging this--pursue
    your mission because it is important, because you believe in
    it. But I also want to acknowledge, on the part of this
    subcommittee and the Senate Armed Services Committee (SASC) at
    large and America at large, the great important work you do,
    that you are unheralded. This is a dangerous world. I know we
    believe at some point we will have peace broadly distributed
    around our planet, but until we do, we have to be strong and
    through that strength comes peace. So thank you.
        We will keep the record open for questions--that is
    directed at our colleagues--until close of business on
    Thursday.
        We do have a markup we are going to conduct as soon as the
    SASC moves forward to the National Defense Authorization Act
    introduction. A busy week for--I think this is the most
    important subcommittee in the whole Senate--the Strategic
    Forces Subcommittee. We have a hearing tomorrow with NNSA on
    environmental remediation. GAO, I think, is going to join us.
    Then we have another hearing on Thursday.
        So with that, the Subcommittee on Strategic Forces is
    adjourned.
        [Questions for the record with answers supplied follow:]

                   Questions Submitted by Senator Deb Fischer

      FUNDING SHORTFALLS AND THE FUTURE OF THE NUCLEAR WEAPONS ENTERPRISE

        1. Senator Fischer. Dr. Albright, Dr. McMillan, and Dr. Hommert,
    given that we are now some 34 percent short of the funding increase
    promised in November 2010, are reducing investments in key facilities
    like the National Ignition Facility (NIF), and have deferred a major
    infrastructure project, do you believe we're following through with our
    commitment to modernize our nuclear complex?
        Dr. Albright. The President's Nuclear Posture Review (NPR) noted
    that a key enabler of stockpile reductions is a modern and capable
    nuclear weapons enterprise. Hence, sustaining progress on stockpile
    stewardship priorities at a time of budget austerity is a significant
    concern.
        Because weapons in the stockpile continue to age beyond their
    intended service life, timely execution of planned life extension
    programs (LEP) is vitally important, with the objective of implementing
    over time the Nuclear Weapons Council's 3+2 vision for the future
    stockpile. Concurrently, we need to invest in the enabling
    infrastructure of the National Nuclear Security Administration (NNSA)
    enterprise. A robust production capability is crucial to the 3+2 vision
    and also to the Nation's deterrence posture. It is comparably important
    to sustain the people and tools (such as NIF) that provide the science,
    technology, and engineering foundation of the nuclear enterprise.
        At the Lawrence Livermore National Laboratory (LLNL), we recognize
    that work on LEPs is job #1 for NNSA, although funding constraints are
    pushing out completion of planned LEPs about as far as is acceptable.
    At the same time, LEPs are not the only job, and sustaining the
    enterprise entails more than sustaining the weapons themselves. A
    healthy enterprise is a crucial component of the Nation's strategic
    hedge against technological surprise or changing world conditions.
        I expressed particular concern in my testimony about the drastic
    reductions in the budget for the NIF at a time when the demand for
    shots from the Stockpile Stewardship Program (SSP) and other NIF user
    communities far exceeds available shot time. NIF has achieved full
    steam operations in the past year. To cut back operations at the scale
    proposed; delay by years the acquisition of important scientific data
    associated with the processes that occur within nuclear weapons;
    disrupt the world-class team supporting facility operations, experiment
    design, and data analysis; and deplete the NIF user community so soon
    after completion of the facility, after decades of effort, would not
    only damage the Nation's national security and scientific credibility,
    but also lead to a loss of U.S. leadership in this important field.
        Dr. McMillan. We fully understand the fiscal environment facing the
    government and the difficulty this poses to building two multi-billion
    dollar nuclear facilities while also undertaking several LEPs. Because
    the deferral of Chemistry and Metallurgy Research Replacement Nuclear
    Facility (CMRR-NF) pushed likely completion into the late 2020s, I
    challenged our team to examine the requirements to try to find ways to
    more effectively modernize the infrastructure. One positive example of
    that is the emerging plutonium strategy where we have developed an
    effective approach to obtaining the needed plutonium infrastructure for
    the Nation in a manner that uses what we already have to the maximum
    extent and relies on new facilities, in part, to avoid a very costly
    early replacement of our only full-service plutonium processing
    facility. This approach will also allow us to have the benefit of
    bringing capabilities on-line as needed versus waiting until an entire
    facility is complete before being able to use any capability.
        Dr. Hommert. The fiscal year 2014 budget request continues to
    address the recapitalization program for our silicon fabrication
    facility. Funding in fiscal year 2013 enabled us to replace the single
    most expensive and highest-risk item in the facility. The fiscal year
    2014 budget request continues the recapitalization program at the
    planned level, but I would note that for program completion, commitment
    to multi-year funding is required.
        One of Sandia's critical dual national security missions for the
    U.S. nuclear weapons program, as well as for the Department of Energy's
    (DOE) nonproliferation payloads, is our microelectronics research and
    fabrication facility, where we design and fabricate an array of unique
    microelectronics, specialty optical components, and
    microelectromechanical system devices. Recapitalization of this
    capability will reduce the risk for delivering the B61 LEP and ensure
    production of the radiation-hardened components required by the W88 Alt
    370 and all future reentry system LEPs.
        As we go forward on stockpile modernization programs, our
    microelectronics fabrication facilities, which form the basis of our
    trusted foundry, will be critical to ensuring the integrity of our
    supply chain.
        We have significant recapitalization needs at various experimental
    and test facilities critical to B61 LEP, W88 Alt 370, and future LEP
    success, particularly at the Tonopah Test Range in Nevada. The fiscal
    year 2014 budget request supports our ability to reduce risk to the
    modernization program through investments in those capabilities as
    well.
        In addition to these fabrication, experimental, and test
    facilities, Sandia's high-performance computing capabilities are vital
    tools for our mission responsibilities in stockpile surveillance,
    certification, and qualification, and they continue to prove to be
    indispensable to our broader national security work. Fiscal year 2013
    funding designated as the Test Capabilities Revitalization Phase 2
    enabled us to finish renovating our suite of mechanical environment
    test facilities, which are essential to supporting the design and
    qualification of the B61 and other LEPs.
        I want to emphasize that the investments in our stewardship tools
    over the past 15 years enable cost reductions in our modernization
    efforts through increased use of computational simulation, which
    reduces the amount of qualification testing; allows, for the first
    time, confident qualification of some components without either nuclear
    testing or expensive aboveground facilities; and affords important
    insights into the challenge of predictive aging for our older
    stockpile.

                               PLUTONIUM STRATEGY

        2. Senator Fischer. Dr. Albright, Dr. McMillan, and Dr. Hommert,
    the effectiveness of our pit production strategy assumes that the
    planned LEPs proceed on schedule. If schedules begin to slip and
    overlap, our requirements for new pits may increase in a given year.
    How will the current plans cope with additional demand?
        Dr. Albright. The long-term vision is a 3+2 composition of the
    nuclear stockpile--with three different, yet interoperable, nuclear
    explosive packages for strategic reentry systems and two different, yet
    interoperable, nuclear explosive packages for air delivered systems.
    The three different interoperable nuclear explosive packages for the
    reentry systems are often referred to as IW1, IW2, and IW3. Currently,
    IW1 is planned to be based on remanufactured pits, IW2 based on reuse
    pits, and IW3 remanufactured pits. The two near-term LEPs in support of
    the air delivered systems, B61-12 and the air-launched cruise missile
    replacement, are both based on pit reuse.
        This choice of the phasing of pit remanufacturing, then pit reuse,
    then pit remanufacturing for the IWs was identified to provide risk
    mitigation against schedule slip of a given IW, and, therefore, limit
    the risk of impacts on, or requirements for increased, pit production
    capacity.
        Dr. McMillan. The current plan for LEPs relies on a combination of
    reused pits and new pits. Should the schedules change, we will evaluate
    the need for changes in pit production rates. Short of planning for a
    much higher production rate that might not ultimately be required, we
    believe that, if funded, our plutonium strategy will provide some
    flexibility in our ability to accommodate changing requirements. If the
    requirement is known, we have the ability to build pits ahead of needed
    schedules as one mechanism to mitigate the issue.
        Dr. Hommert. Sandia National Labs is the nonnuclear design agency
    in the NNSA complex. Sandia defers comments on pit production and
    schedules to Los Alamos and Lawrence Livermore National Laboratories.

        3. Senator Fischer. Dr. McMillan, how confident are you that
    factors behind the cost increase for the CMRR-NF--whether related to
    governance, safety requirements, design creep, and so forth--won't have
    the same impact on the new modular approach?
        Dr. McMillan. As I said in my testimony, any nuclear construction
    project will have many of the same pressures that affected the CMRR-NF
    and all the other large nuclear facilities that were planned in the
    last 30 years. We believe that our three-part strategy of more
    effective use of the newly completed radiological laboratory (RLUOB),
    repurposing of our current plutonium processing facility PF-4, and
    targeted new small laboratory modules that are attached to the PF-4
    system of facilities has the best chance of success. This strategy will
    give us pit production flexibility as well as meet the actinide science
    needs to continue to build our knowledge on new and aged plutonium.
        One potential advantage of the approach should be that many of the
    issues that could negatively affect a new facility project scale with
    the size of the facility. In addition, a couple of other significant
    advantages of undertaking a modular approach would be the ability
    design a smaller facility in a way that would be replicable which
    should lower costs for any subsequent facility, and ability to set
    distinct mission requirements that would not attempt to be everything
    for everyone. In addition, it is our belief that each module would
    require a smaller annual budget profile, which could give it more
    flexibility should the funding allocation fluctuate from year to year.

                             LABORATORY GOVERNANCE

        4. Senator Fischer. Dr. Albright, Dr. McMillan, and Dr. Hommert,
    how would you describe the relationship between the NNSA and your lab?
        Dr. Albright. There has been a breakdown in trust between the
    federally-funded research and development center (FFRDC) partners and
    the government. This lack of trust--highlighted last year by the
    National Academy of Sciences in a review they conducted--should concern
    us all. FFRDCs, such as the national labs, ensure that the work of DOE
    gets done. We do the mission planning and execution, provide corporate
    memory, and comprise the dedicated and professional workforce that is
    the enduring backbone of the enterprise. The FFRDCs are not simply
    contractors but rather are partners (and have been without interruption
    for decades) to the government. This difference is well understood
    within agencies such as the Department of Defense (DOD) and National
    Aeronautics and Space Administration, which treat their FFRDCs as
    trusted mission partners, which is distinctly different from how they
    work with their industrial base. The relationships are enduring and not
    limited by the duration of a particular contract.
        However, within DOE/NNSA, the FFRDC construct that has served the
    Nation so well for decades has been stood on its head. In principle,
    the FFRDC concept distributes responsibility and accountability to the
    contractor for serving the sponsor's (in this case NNSA's) mission with
    excellence, in a secure and safe manner, and consistent with State,
    local, and Federal laws and regulations. Hence, the need for equivalent
    responsibilities and accountabilities on the government side is largely
    obviated. That is, under this construct, the role of the government is
    limited: manage the contract consistent with Federal Acquisition
    Regulations (FARs) and DOE Acquisition Regulations (DEARs) to ensure
    performance objectives are met; set standards (e.g., require compliance
    with the International Organization for Standardization or other
    international standards); advocate for the mission within the
    government; develop, implement, and rationalize a budget; make capital
    investments; and take those actions needed to assure the excellence and
    sustainability within existent policy and budgetary constraints.
        Under this construct the FFRDC is held accountable, and the
    government is expected to hold regular financial and performance audits
    and reviews. If there are too many security or safety incidents, the
    employees concerned are disciplined or let go, and/or the institution
    is fined. If concerns arise regarding the mission performance of a
    particular institution, or if it appears to have systemic issues, the
    government can demand that the FFRDC change leadership or in extreme
    cases, the government can recompete the management and operations
    contract. This philosophy guides how DOD works with its FFRDCs, which
    is demonstrated in part by the fact that the DOD FFRDCs and University
    Affiliated Research Centers are overseen by many fewer government
    employees (more than an order of magnitude difference compared to DOE/
    NNSA), and with very few additional specific rules and regulations.
        What has instead happened within DOE is that while the FFRDCs have
    the responsibilities and accountabilities noted above, many in DOE/NNSA
    also think they have such responsibilities and accountabilities. Our
    contract provides that we must meet standards for safety and security,
    but we are also told prescriptively how we should do so. Orders and
    directives are substituted for perfectly applicable international
    standards, laws, and regulations. In all too many cases, we are told
    who we can hire, what we can pay them, and how we should manage our
    workforce. We are at times even told what experiments should be done.
    This is a costly, cumbersome, and inefficient governance model. As new
    governance structures for the laboratories are examined, they should be
    tested against the consequent mix of roles, responsibilities,
    authorities, and accountabilities between the FFRDC and the government.
        Dr. McMillan. At some levels within NNSA, I would describe our
    relationship as significantly improved. However, in other parts of
    NNSA, I would describe the relationship as strained with limited trust
    from both sides of the relationship. I would go as far as saying that
    some parts of NNSA want the laboratory to just do exactly what we are
    told--hardly the FFRDC model.
        Dr. Hommert. The government-owned/contractor-operated model is
    fundamental to Sandia's ability to continue to perform cost effectively
    and for the environment for our staff. As with any government and
    contractor management program, I do believe that the relationship needs
    a fresh look.
        Sandia National Laboratories and NNSA are pursuing a more strategic
    performance evaluation plan of our mission. This new direction moves
    away from the micro-level milestones that require time and money
    consuming status updates to broader goals that demand Sandia meet NNSA
    schedules while still maintaining appropriate oversight.
        Sandia and the other labs continue to experience a very high level
    of detail scrutiny that makes to focus on continuous improvement in our
    performance in operational aspects, whether it is safety or security.
    We are not perfect in these regards. We need to continuously improve.
    But that will not be achieved by fairly detailed compliance efforts
    that are not looking at overall larger improvement efforts among our
    workforce.

        5. Senator Fischer. Dr. Albright, Dr. McMillan, and Dr. Hommert,
    what do you believe should be the central focus of, or the key
    challenges examined by, the newly created Congressional Advisory Panel
    on the Governance of the Nuclear Security Enterprise?
        Dr. Albright. Respectfully, I believe the panel should focus on
    offering recommendations to:

             Establish a governance model that will reestablish a
            trusted partnership between FFRDCs and the government in the
            execution of a shared national security mission with less
            intrusive oversight and clearly defined roles and
            responsibilities between the FFRDCs and the government.
             Establish a robust planning, programming, and
            budgeting system integrated over NNSA's portfolio of programs.
             Simplify and streamline the rules, regulations, and
            policies to minimize or eliminate duplicative and conflicting
            rules, regulations, and policies governing the conduct of
            operations at the laboratories and production plants.
             Establish a system to apply cost-benefit analysis to
            consideration of rules, regulations, and policies.
             Streamline authority within DOE and NNSA to ensure a
            single determining voice on policies regarding safety,
            security, legal, and business.

        Dr. McMillan. I believe that one of the key challenges that needs
    to be examined is the role of NNSA in determining the technical
    activities necessary to execute the mission. I believe that the
    historical role of the laboratories as trusted advisors is being
    eroded, which has created very strained relationships with NNSA and
    made it more difficult to effectively execute the mission given limited
    funding.
        Dr. Hommert. The effectiveness of the somewhat unique government-
    owned/contractor-operated model employed by DOE and NNSA to manage the
    laboratories as FFRDCs has eroded under the current DOE-NNSA governance
    arrangement. We look forward to engaging with the Congressional
    Advisory Panel on this topic. Based on its exceptional members and
    expansive charter, I am confident that the panel will bring the
    careful, comprehensive examination needed by this complex but very
    important topic.

        [Whereupon, at 4:04 p.m., the subcommittee adjourned.]

    DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR
                   2014 AND THE FUTURE YEARS DEFENSE PROGRAM

                                  ----------

                             WEDNESDAY, MAY 8, 2013

                                   U.S. Senate,
                      Subcommittee on Strategic Forces,
                                   Committee on Armed Services,
                                                        Washington, DC.

          STRATEGIC FORCES PROGRAMS OF THE NATIONAL NUCLEAR SECURITY
     ADMINISTRATION AND THE DEPARTMENT OF ENERGY'S OFFICE OF ENVIRONMENTAL
                                   MANAGEMENT

        The subcommittee met, pursuant to notice, at 2:45 p.m. in
    room SR-232A, Russell Senate Office Building, Senator Mark
    Udall (chairman of the subcommittee) presiding.
        Committee members present: Senators Udall, Donnelly, and
    King.
        Majority staff member present: Jonathan S. Epstein,
    counsel.
        Minority staff member present: Robert M. Soofer,
    professional staff member.
        Staff assistants present: Lauren M. Gillis.
        Committee members' assistants present: Casey Howard,
    assistant to Senator Udall; Marta McLellan Ross, assistant to
    Senator Donnelly; and Lenwood Landrum, assistant to Senator
    Sessions.

           OPENING STATEMENT OF SENATOR MARK UDALL, CHAIRMAN

        Senator Udall. Good afternoon. The Subcommittee on
    Strategic Forces will come to order.
        This afternoon we will receive testimony from the National
    Nuclear Security Administration (NNSA) regarding their fiscal
    year 2014 budget request. We will also hear from the Department
    of Energy's (DOE) Office of Environmental Management (OEM) and
    the Government Accountability Office (GAO).
        As I just did earlier, I want to thank all of the witnesses
    for taking time out of your busy schedules to appear today. I
    hope this hearing will be informative not only for the Senators
    in attendance today but to you all in understanding our views
    on different aspects of your programs.
        I mentioned to all of our witnesses that it is a busy day
    on the Hill. I anticipate a Senator to drop by, but that is no
    indication of the importance that we all hold in the work that
    you do.
        We have two panels today. The first panel will feature the
    Acting Administrator of the NNSA, Ms. Neile L. Miller. For the
    second panel, we will have Dr. Don L. Cook, the Deputy
    Administrator for Defense Programs at DOE; Admiral John M.
    Richardson, USN, the Deputy Administrator for Naval Reactors at
    DOE; Mr. David G. Huizenga, the Senior Advisor for
    Environmental Management (EM) at DOE; and Mr. David C. Trimble,
    Director for Natural Resources and Environment at the GAO.
        In terms of logistics, I thought we could give Ms. Miller a
    half hour to about 3:15 p.m. Now, let us see. We are going to
    adjust that, but about a half hour. Then the second panel will
    have 45 minutes to an hour. This should have us finishing up
    3:45 p.m. to 4 p.m. We want to make sure people have time to
    really explore the topics today.
        With that, let me make a few opening remarks.
        For the fiscal year 2014, the budget request for the NNSA
    is $7.868 billion, which is an increase of 4.1 percent relative
    to fiscal year 2012. Accounting for shifts in budget
    categories, the request is about 2.7 percent below the section
    1251 report number of $8.4 billion. While reductions are
    notable, they are less than other programs are facing in our
    current budget climate, especially with sequestration being in
    effect.
        For the Naval Reactors program, the fiscal year 2014 budget
    is $1.246 billion, which is an increase of 15.1 percent. That
    increase is mainly for refueling a test and training reactor
    and construction of a spent fuel handling facility, both of
    which are important to the Department of Defense (DOD) fleet
    operations.
        The OEM request is $5.62 billion, down 1.2 percent from
    fiscal year 2012. Not accounted for at the present time is how
    fiscal year 2013 reductions due to sequestration will affect
    these programs in fiscal year 2014 and beyond. I understand the
    NNSA will lose about $600 million. The EM program will lose
    about $420 million, and assuming a similar cut of 8 percent,
    that would yield a reduction for naval reactors of about $87
    million.
        There are several issues I would like to explore in this
    hearing.
        First, I would like to know from both panels what effects
    sequestration will have on programs already underway, whether
    in terms of delays in achieving milestones or in the ability to
    affect out-year schedules. It seems clear that the effects of
    sequestration will compound themselves in the out-years in ways
    that will increase time and cost.
        Second, I would like to know from Administrator Miller what
    steps she is taking to control the costs of the B61 program and
    other life extension programs (LEP). I understand that Director
    Miller is working with the DOD Cost Analysis and Program
    Evaluation (CAPE) Office, but if we are living with two
    estimates, one by NNSA and one by CAPE, we will need to know
    which one Congress should rely on.
        Third, I would like to understand from Mr. Huizenga what is
    being done to keep a bad situation from getting worse with the
    Waste Treatment Plant, especially regarding the ability to
    empty leaking tanks and begin treating at a minimum low-level
    waste from those tanks. We have a special commitment to all the
    communities where the DOE is cleaning up former defense sites
    and we need to keep it.
        Fourth, as always, I would like to hear from GAO on their
    observations about what could be improved with existing
    projects at NNSA and the OEM. The NNSA has shelved two major
    construction projects. The Chemistry and Metallurgy Research
    Replacement (CMRR) project was stopped when it was 70 percent
    complete. $450 million had already been spent. The Pit
    Disassembly and Conversion project was also stopped after
    spending $400 million. Combined, that is close to $1 billion.
        Obviously, the Waste Treatment Plant is another category,
    but I suspect there are common problems underlying all three
    projects that the GAO can give recommendations on. My hope is
    that those recommendations will provide lessons learned before
    embarking on some of the LEPs over the next 5 years.
        Again, let me thank everybody for coming. I see we have
    been joined by my colleague from the wonderful State of
    Indiana, the Hoosier State, Senator Donnelly. Senator Donnelly,
    if you have any opening remarks you would like to make, the
    floor is yours.
        Senator Donnelly. No, thank you, Mr. Chairman. I am looking
    forward to the testimony.
        Senator Udall. Great. Thank you for being here.
        Administrator Miller, the floor is yours. We look forward
    to your comments.

        STATEMENT OF MS. NEILE L. MILLER, ACTING ADMINISTRATOR,
               NATIONAL NUCLEAR SECURITY ADMINISTRATION,
                          DEPARTMENT OF ENERGY

        Ms. Miller. Thank you, Chairman Udall and distinguished
    members of the subcommittee. Thank you for having me here today
    to discuss the President's fiscal year 2014 budget request for
    the DOE's NNSA.
        Your ongoing support for the women and men of NNSA and the
    work that they do and your bipartisan leadership on some of the
    most challenging national security issues of our time has
    helped keep the American people safe, helped protect our
    allies, and enhanced global security.
        The President's $11.7 billion fiscal year 2014 budget for
    NNSA allows us to continue to implement his nuclear security
    agenda. We are also deeply engaged in efforts to realize
    President Obama's vision for a world without nuclear weapons,
    free from the threat of nuclear terrorism and united in our
    approach towards shared nuclear security goals.
        Most recently in his 2013 State of the Union Address, the
    President continued to highlight the importance of his nuclear
    strategy and pledged to ``engage Russia to seek further
    reductions in our nuclear arsenals, and continue leading the
    global effort to secure nuclear materials that could fall into
    the wrong hands because our ability to influence others depends
    on our willingness to lead and meet our obligations.''
        His budget for fiscal year 2014 reaffirms the President's
    strong support for our nuclear security missions and provides
    us with the resources we need to further this work.
        I want to assure you that the NNSA is being thoughtful,
    pragmatic, and efficient in how we achieve the Nation's nuclear
    security objectives and shape the future of nuclear security.
    As someone with many years of Federal Government experience at
    the nexus of programs and budget, I can tell you that while we
    are challenged to be successful in a time of fiscal austerity
    and budget uncertainty, we are also dedicating ourselves to
    driving efficiencies into our programs so that we can make the
    best use of taxpayers' dollars with which we are entrusted. We
    are holding everyone from our contractors to our Federal
    employees accountable. Above all, we are challenging ourselves
    to reject ways of doing business that are holding us back from
    this but which have survived long into the post-Cold War era
    simply because they are ``the way we have always done it.''
        The need to strategically modernize our facilities,
    infrastructure, and weapons systems is urgent, but so is the
    need to modernize how we do what we do. We must and we are
    evaluating our programs and challenging the assumptions for all
    of our programs and projects to rethink their underlying
    premises and ensure that we are charting a path to the future
    that is well-reasoned, responsible, and reflects the best way
    of doing business today.
        As the President has committed, the NNSA is working to make
    sure that we have the infrastructure, weapons systems, and the
    supporting science to certify the Nation's nuclear weapons
    stockpile that it needs through strategic modernization
    investments. We are working to implement the most ambitious
    nuclear nonproliferation agenda in the world.
        Whether or not we were facing this moment's budget
    uncertainties and fiscal constraints, we have a responsibility
    to prioritize what we do and to do it in a way that makes sense
    not only to us but to you, to our partners at DOD, our
    international partners, and above all, to the American
    taxpayers.
        To that end, we are working very hard to guarantee our
    ability to deliver the mission, something my colleagues
    throughout the nuclear security enterprise have consistently
    done for the Nation over the past 60-plus years. But we know
    that we have to be smarter, more unified, and more diverse both
    within NNSA but also more broadly within the larger deterrence
    and nuclear security community. If we all want to see the
    nuclear security agenda move forward--and it is my
    responsibility to ensure that it does--then we need to make
    certain that we are able to maintain essential enabling
    capabilities, including for plutonium and uranium,
    infrastructure to support the nuclear Navy, and strong national
    laboratories that are the backbone of the national security
    enterprise. We must continue to chart the path of nuclear
    security together.
        I have personally witnessed the evolution of these programs
    for many years from my positions both within the NNSA, as well
    as from other perspectives within the U.S. Government. The
    enduring partnerships between NNSA and DOD, between Congress
    and the administration, and between our own sites and
    headquarters are vital to getting the mission accomplished and
    maintaining the security of the Nation. NNSA cannot survive
    without them, and the United States nuclear deterrent depends
    on them.
        Regardless of what organizational chart or where NNSA is
    aligned within the U.S. Government, we cannot do anything
    without the right people and the right processes in place. We
    are continuously seeking new solutions to improve the way we
    conduct business. To that end, I want to tell you about a few
    changes in the way we are doing what we do.
        First, we reinforced our project management organization
    and performance through the establishment of an independent
    acquisition and project management group so that we could
    better drive performance and accountability in our construction
    projects. We were fortunate to be able to hire Mr. Bob Raines
    to head this new group. Bob, who has 25 years of experience at
    DOD's naval facilities organization and several years reviewing
    DOE projects, has brought a new clarity and accountability to
    the way we approach acquisition across NNSA.
        We have aggressively sought physical security improvements
    through the reform of how we promulgate security policy and
    assess performance at our sites. Mr. Steve Asher has come on
    board to act as our new Chief of Defense Nuclear Security. He
    is a retired Air Force colonel with 33 years of on-the-ground
    nuclear security experience with the U.S. Air Force.
        We have also worked to improve how we plan and analyze our
    budget resources to ensure that we have what we need. I believe
    strongly that resource decisions should be transparent and
    analytically sound, driven by data as well as preference. By
    hiring Dr. Steven Ho and standing up our new Office of Program
    Review and Analysis, based on the approach taken by DOD to
    prioritize needs, the Administrator will have an independent
    broker helping manage the budget process and independent
    analysis for NNSA programs on cross-cutting issues. Steve comes
    to us from the DOD CAPE where for the past year he led the cost
    study of the B61 LEP.
        Perhaps most significantly, we have realigned the Federal
    oversight of roles, responsibilities, and reporting of all of
    our sites and unified them in partnership in a line NNSA
    organization reporting to the Associate Administrator for
    Infrastructure and Operations, who is also my Deputy, Mr.
    Michael Lempke. We are ensuring that we have the right people
    using the right processes in the right ways across the NNSA.
    Mission and mission-support teams are equal, supporting each
    other's needs on everything from regulatory issues to
    contracting. You saw it with our Future Shaping Nuclear
    Production Office, which covers Pantex and Y-12 without regard
    for geography. You can see it in our strong, unprecedented
    response to security lapses, and you can see it in our
    plutonium strategy where creative thinking across our
    enterprise has given us a path forward in a time of tight
    budgets. We are doing the work the American people need us to
    do, and the President's budget will allow us to continue to do
    that work. We at NNSA are working hard to align ourselves for
    the future, and your continuing support has been a vital part
    of that.
        I again thank you for having me here today. I look forward
    to answering your questions.
        [The prepared statement of Ms. Miller follows:]

                   Prepared Statement by Ms. Neile L. Miller

                                  INTRODUCTION

        Chairman Udall, Ranking Member Sessions, and distinguished members
    of the subcommittee, thank you for having me here to discuss the
    President's fiscal year 2014 budget request for the Department of
    Energy's National Nuclear Security Administration (NNSA). Your ongoing
    support for the men and women of NNSA and the work they do, and your
    bipartisan leadership on some of the most challenging national security
    issues of our time, has helped keep the American people safe, helped
    protect our allies, and enhanced global security.
        The NNSA supports the President's nuclear security strategy,
    including those identified in the President's new global military
    strategy released in January 2012, the New Strategic Arms Reduction
    Treaty (New START) signed in 2010, and the Nuclear Posture Review
    (NPR). In April 2009 in Prague, President Obama shared his vision for a
    world without nuclear weapons, free from the threat of nuclear
    terrorism, and united in our approach toward shared nuclear security
    goals.
        Most recently, in his 2013 State of the Union address, the
    President continued to highlight the importance of his nuclear strategy
    and pledged to ``engage Russia to seek further reductions in our
    nuclear arsenals, and continue leading the global effort to secure
    nuclear materials that could fall into the wrong hands--because our
    ability to influence others depends on our willingness to lead and meet
    our obligations.''
        The President's fiscal year 2014 request for NNSA is $11.65
    billion, an increase of $186 million, or 1.6 percent, over the fiscal
    year 2013 Continuing Resolution level and $650 million, or 5.9 percent,
    over the fiscal year 2012 appropriation at a time of sequestration and
    spending reductions across the government. The request reaffirms the
    commitment of the President to his nuclear security vision, applying
    world-class science that addresses our Nation's greatest nuclear
    security challenges and building NNSA's 21st century nuclear security
    enterprise through key investments in our people, programs, and
    infrastructure.
        I want to assure you that NNSA is being thoughtful, pragmatic, and
    efficient in how we achieve the Nation's nuclear security objectives
    and shape the future of nuclear security. We are looking forward to
    what NNSA will become 5, 10, 20 years into the future and what we are
    doing now to get there.
        Our missions are clear: to enhance global security through nuclear
    deterrence, to reduce global danger from nuclear weapons,
    nonproliferation, naval nuclear propulsion, and national leadership in
    science, technology, and engineering. Based on these critical mission
    and capabilities, the demand on the enterprise is growing. We are
    challenging ourselves to reject old ideas that represent the way things
    have been done in the past. We are moving beyond the Cold War,
    strategically modernizing facilities and weapons systems, ensuring that
    the United States has the critical capabilities it needs without
    wasteful spending. Given our budget constraints and ongoing
    uncertainty, we have a responsibility to prioritize how we get things
    done, and we have developed clear strategies to guarantee our ability
    to do so. We must evaluate our programs and challenge the assumptions
    for all of our programs and projects to rethink the underlying premise
    and ensure that we are charting a path to the future that is well-
    reasoned and responsible. We are at a particular point in time, unique
    for a lot of reasons, and the context matters. It was with this in mind
    that we made sure this year's budget request was also the result of an
    unprecedented level of planning and cooperation between the NNSA and
    the Department of Defense (DOD).
        The NNSA has also made a number of organizational changes to help
    us make better, smarter, and more efficient decisions on how we conduct
    our operations and identify the resources needed to meet our nuclear
    strategy.
        One of the major actions NNSA took in fiscal year 2013 was standing
    up the Office of Infrastructure and Operations (NA-00) to serve as the
    fulcrum of the NNSA. The office encompasses our field operations, which
    are now directly reporting to the Administrator through the Associate
    Administrator for Infrastructure and Operations, who is dual-hatted as
    the NNSA Associate Principal Deputy Administrator. The consolidated
    office serves to oversee and direct the NNSA's Operations and
    Infrastructure, which spans eight sites--from nuclear weapons
    laboratories to production plants--across seven States. The new office
    will make management of the nuclear security enterprise more efficient
    and effective.
        In addition, the recently established Office of Acquisition and
    Project Management (NA-APM) continues to integrate our acquisition and
    project management staffs in order to improve the way we manage and
    execute major construction projects once the design is sufficiently
    mature to baseline and begin construction, post phase Critical
    Decision-2 (CD-2). NA-APM combines its knowledge of contracting and
    project management to ensure identified and agreed upon needs of the
    NNSA are met in an effective and efficient manner. Federal Project
    Directors (FPD) responsible for project delivery have been re-assigned
    to NA-APM, and we are establishing Project Management Offices staffed
    with people possessing appropriate construction project management
    skills that will report directly to the FPDs. Lastly, the NNSA is
    better aligning contract incentives for Capital Asset Projects to
    structure contracts to provide an equitable balance of risks; ensuring
    each party bears responsibility for its own actions, rewarding
    contractors for generating savings while protecting the taxpayers from
    paying for contractor negligence. We expect these changes to
    fundamentally affect the way the NNSA reviews its projects and
    interacts with its contractors to continue to drive efficiencies while
    delivering on our mission under current fiscal constraints.
        In the last year, NA-APM's efforts resulted in $20 million in
    reimbursements from contractors as we moved to more fully utilize our
    contracts to hold them accountable for unsatisfactory performance. We
    issued an unambiguous design policy for our complex nuclear projects
    ensuring that sufficient design work (90 percent) is completed prior to
    approving project baselines at CD-2. Of non-major projects completed
    since 2007 with the construction budget baseline established in 2006 or
    later, 83 percent (10 out of 12) were delivered on time and at or under
    budget. These 12 non-major projects with a combined budget of $311
    million were delivered more than $32 million under budget. We are
    confident that the lessons learned in delivering this work are
    applicable and scalable to the major systems projects we have had
    problems with in the past.
        A third management change is to put more focus on cost planning
    relative to budgeting and execution, particularly in today's fiscal
    climate. Key decisions about priorities and resource allocations must
    be made centrally within the NNSA, rather than left solely to
    individual sites. The NNSA Act is clear that planning, programming,
    budgeting and financial activities comport with sound financial and
    fiscal management principles. Over a year ago, the NNSA embarked on a
    multi-year, iterative process with DOD's Office of Cost Assessment and
    Program Evaluation (CAPE) to conduct a rigorous analysis to try to
    determine how to best meet the President's nuclear strategy and the
    resources it will take to both accomplish the current program of work
    as well as to recapitalize our infrastructure. This ongoing effort will
    continue to inform our planning and programming decisions and will be
    the foundation upon which we build successive out-year budgets.
        In order to further improve transparency with Congress and to
    further drive efficiencies into our program planning and execution, the
    NNSA's fiscal year 2014 budget request makes some significant changes
    to our budget structure.
        In the fiscal year 2014 budget, the Infrastructure and Operations
    (NA-00) organization gains budget authority which will move the NNSA
    towards a tenant-landlord site model in which NA-00 is the landlord and
    the program offices are now tenants. As a result of this
    reorganization, the NNSA is proposing to eliminate the Readiness in
    Technical Base and Facilities (RTBF) GPRA unit in our budget and split
    these activities between the existing Site Stewardship unit and
    ``Nuclear Programs'' within Defense Programs. The activities managed by
    NA-00 would be added to Site Stewardship under a new subprogram titled
    ''Enterprise Infrastructure'' which would encompass Site Operations,
    Site Support, Sustainment, Facilities Disposition, and site
    infrastructure-related construction. Nuclear Programs will provide for
    capability investments and capital construction projects that uniquely
    support the mission of Defense Programs.
        The Defense Nuclear Nonproliferation appropriation account of the
    fiscal year 2014 budget request has been restructured to include the
    Nuclear Counterterrorism Incident Response (NCTIR/NA-40) and
    Counterterrorism and Counterproliferation Programs (CTCP/NA-80)
    programs, both of which include activities transferred out of the
    Weapons Activities appropriation. By drawing together these NNSA
    programs in the Defense Nuclear Nonproliferation appropriation, we
    strengthen existing synergies and cooperation among these functions. In
    doing so, we provide priority and emphasis to the NNSA programs that
    are responsible for implementing the President's nuclear security
    priorities for reducing global nuclear dangers and the 2010 Nuclear
    Posture Review (NPR) which ``outlines the administration's approach to
    promoting the President's agenda for reducing nuclear dangers and
    pursuing the goal of a world without nuclear weapons, while
    simultaneously advancing broader U.S. security interests.'' This change
    in budget structure will present with greater clarity the total funding
    and level of activity undertaken by the NNSA in this area, which the
    NPR identifies as the highest priority nuclear threat facing the
    Nation. At the same time, this realignment ensures that the Weapons
    Activities appropriation is now more focused on stockpile and related
    activities, such as physical and cyber security.

                               WEAPONS ACTIVITIES

    Defense Programs Overview
        After adjusting for the infrastructure-related budget realignments
    described previously, the fiscal year 2014 Defense Programs portion of
    the Weapons Activities account is $5.1 billion or $410.2 million above
    the fiscal year 2013 continuing resolution level, constituting a 9
    percent increase. As the President has committed, the NNSA is
    strategically modernizing our nuclear weapons infrastructure, weapons
    systems, and the supporting science to ensure a safe, secure and
    effective deterrent and to certify the stockpile without underground
    nuclear testing. Within today's constrained fiscal environment, we have
    closely scrutinized our strategies, plans, processes, and organization
    to ensure we make the most of our resources. The results of the NNSA
    and DOD budget-driven requirements analysis has forged a stronger link
    between DOD's requirements and the NNSA's resulting resource needs
    across the nuclear security enterprise. Some highlights include a new
    strategy for the conduct of Life Extension Programs (LEPs); an updated
    and more complete plutonium strategy; a refocusing of our science and
    infrastructure investments on the capabilities most urgently needed; a
    reorganization of the operations of facilities accounts and major
    infrastructure project responsibilities within NNSA's Defense Programs;
    and a significant effort to identify and implement management
    efficiencies. Each of these critical areas was determined following
    enormous effort to make smart business decisions on resourcing the
    highest priority mission work.

    Life Extension Programs Strategy and Execution
        The DOD's ``3+2'' strategy calls for the transition of four
    warheads that make up the ballistic missile portion of our stockpile to
    be transitioned, over the next 25 years, to three life-extended,
    interoperable warheads that DOD could flexibly deploy across different
    missile platforms. Further, we will transition the three bomb/cruise
    missile warheads in the stockpile to two warhead types as part of their
    life extension.
        In January 2013, the Nuclear Weapons Council (NWC) changed the
    schedule and cumulative production quantity for the W76-1 program. This
    change reduced the total LEP production quantity and realigned the end
    of the production period for all operational units from fiscal year
    2021 to fiscal year 2019. Specifically, the scope and schedule
    parameters for the program in fiscal year 2013 and fiscal year 2014
    remain unchanged as the program will be executing steady-state rate
    production, and the annual production rates are the same for both
    fiscal years.
        Regarding the B61 LEP, the NWC selected the option (3B) which
    satisfies the minimum DOD threshold requirements at reduced life cycle
    costs. Option 3B maximizes the reuse of nuclear and non-nuclear
    components while still meeting military requirements for service life
    extension and consolidation of multiple versions of the B61 into the
    B61-12.
        Following the W76 and B61 LEPs, the first of the LEPs to which the
    3+2 strategy applies is the W78/88-1. A joint DOD/NNSA Enterprise
    Planning Working Group developed schedules reflected in the forthcoming
    fiscal year 2014 Stockpile Stewardship and Management Plan (SSMP) which
    considers alignment of warhead development and production schedules
    with DOD system platform upgrades and balancing the workload across the
    nuclear security enterprise. Once developed as part of the Phase 6.2A
    activities, the DOD Cost Assessment and Program Evaluation (CAPE) team
    will review and the NWC will approve cost estimates for the W78/88 and
    future LEPs.
        Engineering development for an alteration to the W88, the W88 Alt
    370, is also under way. This Alt will address certain lifetime
    requirements by modernizing the Arming, Fuzing & Firing system and
    improving surety by incorporating a lightning arrestor connector. It
    will also provide additional logistical spares for the life of the
    system. The NNSA will complete the W88 Alt 370, the neutron generator
    replacement, and gas reservoir replacement will be completed at the
    same time with a planned first production unit for December 2018.

    Plutonium Strategy
        NNSA is committed to ensuring continuity of required plutonium
    support capabilities and mission functions to include analytical
    chemistry, material characterization, manufacturing, and storage
    functions. The strategy for doing so is encompassed by the Defense
    Programs Plutonium Strategy that expands our capability over the next
    decade to achieve a 30 pits-per-year capability by 2021 to support the
    W78/88-1 LEP activities. Achievement of this capability requires
    additional investment in the Plutonium Sustainment program along with
    efforts to free up space within the PF4 facility at LANL by cleaning
    out the existing vault space and installing additional equipment in
    existing facilities.
        This strategy is critical for today's stockpile and is independent
    of the deferral period for the Chemistry and Metallurgy Research
    Replacement-Nuclear Facility (CMRR-NF). We are on track to move
    operations out of the existing Chemistry and Metallurgy Research
    facility at Los Alamos National Laboratory in 2019. Execution requires
    a $120 million reprogramming approval for fiscal year 2012 funds. This
    reprogramming is urgent for our workforce. NNSA and CAPE are developing
    a business case analysis of the plutonium strategy by August 2013.
    CMRR-NF deferral provides NNSA the opportunity to balance funding and
    requirements, and to evaluate an integrated, long-term plutonium
    capability solution.

    Research Development Test & Evaluation (RDT&E)
        Last year, we commemorated the 20th anniversary of the end of
    underground nuclear weapons testing in the United States. Shortly after
    that decision in 1992, the Stockpile Stewardship Program was
    established to provide the science, tools, and critical skills
    necessary to certify that the stockpile is safe, secure, and effective
    without the need for nuclear testing. Since that time, we have been
    filling our toolbox with the cutting-edge science needed to accomplish
    this formidable challenge. Maintaining a stockpile under these
    conditions requires the best science and technology in the world.
    Breakthroughs have occurred that have enabled us to achieve this goal
    for today's stockpile. But as we look into the future, we see the need
    for the enhanced use of our science tools to gain better assurance that
    as our stockpile ages it will continue to be safe, secure and
    effective. The modern tools of Stockpile Stewardship not only serve as
    our insurance policy against a return to nuclear testing, but they also
    are increasingly revealing the ``first principles'' physics and
    materials' properties of our weapon systems.
        Priorities of the Stockpile Stewardship Program include the
    development of capabilities to design and certify LEP options;
    preservation of specialized skills needed for maintenance of the
    nuclear stockpile by a generation of scientists who will not have
    worked with those experienced in nuclear testing; development of
    capabilities enabling timely resolution of issues from significant
    finding investigations resulting from surveillance observations;
    enabling annual assessment of the stockpile and associated operational
    decisions; and reducing nuclear dangers through the extension of
    capabilities used for assessments of foreign state weapons activities.
        In the fiscal year 2014 budget request, the Science Campaigns seek
    funding to provide the science underpinnings of our Plutonium Strategy
    and re-use options for the future stockpile, as well as advanced
    certification of nuclear explosive package options with improved surety
    to support LEP decisions and advanced diagnostics and experimental
    platforms (particularly optical imaging and radiography) for future
    subcritical experiments that augment and guide our plutonium science
    research. Through the National Boost Initiative (NBI), the Science
    Campaign is improving physics models for primary fission ``boost.''
    This understanding is essential as we reduce the stockpile, especially
    since we will be re-using many nuclear components.
        The fiscal year 2014 budget request for the Inertial Confinement
    Fusion and High Yield Campaign features an increased emphasis on non-
    ignition high energy density (HED) experiments, diagnostics, and
    experimental platforms development to support reuse and stockpile
    modernization. Such platforms and diagnostics will help validate
    secondary performance and surety technologies for the future stockpile,
    as well as help provide radiation effects testing of non-nuclear
    components. In addition, the budget request supports progress on
    achieving ignition, or thermonuclear burn in the laboratory, in
    accordance with the Path Forward report supplied to Congress in
    December 2012. This report described our plan for resolving
    discrepancies between experimental results at the National Ignition
    Facility (NIF) and the prediction of our codes, as well as the
    development of alternate ignition approaches (polar drive, direct
    drive, and magnetic drive). An Independent Advisory Board on ignition
    will be a subpanel of new Federal Advisory Committee being formed to
    provide advice on NNSA stockpile stewardship challenges. Finally, the
    budget seeks support for the continued safe and efficient operation of
    NNSA's three major High Energy Density facilities: NIF, OMEGA, and the
    Z machine.
        The budget in fiscal year 2014 for our Advanced Simulation and
    Computing (ASC) program seeks to implement the ``3+2 Strategy'' agreed
    to by the NWC described earlier. To implement that strategy, an
    understanding of plutonium reuse and performance, which ASC simulation
    helps provide, is critical. Further, the ASC budget seeks support for
    improved and more responsive full system modeling and simulation
    capabilities for annual assessments, LEPs and significant finding
    investigations that provide enhanced fidelity in the stockpile. ASC is
    uniquely challenged by supercomputing technology advances that are
    forcing an evolution in computer architectures that are inconsistent
    with current methods used in our national computational tools for
    stockpile assessment. In response, ASC is coordinating high performance
    computing technology, research and development with the DOE Office of
    Science's Advanced Scientific Computing Research (ASCR) office, and
    attempting to maintain adequate essential skills and capabilities to
    support current and future requirements under flat budget restrictions.
    Foreign nuclear weapons assessments will continue to rely on our
    Nation's nuclear weapons code base.

    Strategic Management
        Building on the strength of our experience working with DOD this
    past year, we are enhancing our partnership this year in areas where
    both of us will benefit. Specifically this year, studies are being
    conducted with DOD to find efficiencies and to identify workforce
    priorities. The ``3+2 strategy'' and the aggressive LEP schedule
    associated with that strategy are being implemented. Modernization of
    critical mission support infrastructure is focusing on the Uranium
    Processing Facility (UPF) with acceleration out of Building 9212, and
    moving forward with the plutonium Strategy.
        Our enhanced partnership with DOD will be evident not only this
    year but also over the Future Years Nuclear Security Program (FYNSP)
    period (fiscal year 2014-2018), and beyond, throughout the next 25
    years as the 3+2 Strategy, the LEPs, and modernization are all at
    various stages of planning and execution. The 25-year Strategic Plan
    will be described in detail in the forthcoming fiscal year 2014 SSMP.
        NNSA is taking the initiative to improve the effectiveness and
    reduce the cost of its operations and business practices. We understand
    that every dollar counts in these fiscal times and NNSA will build upon
    a number of successful efforts in the past to improve our contractors
    operations and efficiencies. We have already saved considerable money
    through our supply-chain management initiative, planned consolidation
    of the Y-12 and Pantex contracts, and pressing our contractors to
    change their benefit plans for employees, particularly pension plans.
    The funding requested in fiscal year 2014 reflects anticipated
    ``Workforce Prioritization'' and ``Management Efficiencies'' savings as
    part of the NNSA/DOD joint study.

    Defense Nuclear Security Overview
        The NNSA recently reorganized our security organization to
    establish clear lines of authority for responsibility and
    institutionalize a formal performance assessment capability. The Office
    of Defense Nuclear Security's primary missions are policy development,
    strategic planning, and performance assessments of NNSA site
    activities. We also realigned security management for operational
    direction, resource execution authority, and field assistance
    activities to the Office of Infrastructure and Operations (NA-00) which
    is consistent with its existing line management authority over all NNSA
    sites. NNSA is changing our culture of how we assess security so that
    we do not rely on reports provided by others but instead assess
    operational readiness of security at the sites by dispatching experts
    from the Office of the Chief of Defense Nuclear Security.
        We are also committed to hiring the right caliber of security
    professionals; those with operational nuclear security field
    experience, to reshape and continue to improve the culture of nuclear
    security at NNSA. This initiative is focusing our leadership on
    instilling a culture that embraces security as an essential element of
    the NNSA mission, which is to provide the utmost protection for
    national security resources.
        DNS is also hiring 15 additional Federal security experts in fiscal
    year 2013 to conduct performance-based assessments at each of the NNSA
    sites. These security professionals will visit each site, to perform
    assessments of security readiness by directly observing security
    operations, and program implementation.
        In the period following the Y-12 security event on July 28, 2012,
    we have learned a lot about our organization, the assumptions we had
    made, and how we communicate. The incident at Y-12 was a completely
    unacceptable breach of security. The security of our Nation's nuclear
    material is our most important responsibility, and we have no tolerance
    for such unacceptable performance. We have taken strong and decisive
    action to fix the issues that led to the incident at Y-12.
        We immediately shared lessons learned with all the NNSA Field sites
    and directed each to perform self-assessments related to those concerns
    found at Y-12. We directed the sites to assess: (1) security culture,
    (2) formality of operations, (3) rules of engagement procedures, and
    (4) security system maintenance and compensatory measures. We initiated
    efforts to establish a robust assessment model, which has included the
    new Acting Chief of Defense Nuclear Security leading teams of security
    professionals to conduct assessments of all NNSA sites to determine
    security readiness and review of Field Office and contractor security
    performance.
        We are executing a deliberate process to restore the DOE directives
    as the baseline safeguards and security policy for NNSA.
        Using NNSA's Corporate Performance Evaluation Process, our
    assessment of the Y-12 management and operating contractor's
    performance resulted in lost award fee totaling $12.2 million, which
    included 100 percent of their possible security-related fee and a
    negative overall management fee adjustment of $10 million.

    Cyber Security
        The fiscal year 2014 budget reflects the consolidation of the
    activities managed by the NNSA Office of the Chief Information Officer
    under NNSA CIO (NCIO) Activities. The consolidation under a single
    account will allow more effective and integrated management of the
    program. Cyber Initiatives are supported by IT Investments and this
    change will provide better alignment of resources to focus on the
    emerging threat and to deliver capabilities that allow our employees to
    work anywhere, anytime, on any device. The fiscal year 2014 budget
    includes $148 million for the NCIO activities which includes support
    for Federal IT as well as all programmatic funding for cyber security
    (covering Federal employees and our Managing and Operating
    Contractors).
        Providing an effective enterprise IT/Cyber strategy is critical to
    enablement of the OneNNSA strategy, the achievement of cost savings,
    and the deployment of shared services for the nuclear security
    enterprise. The NCIO leads Federal efforts to deploy innovative IT
    solutions, research and develop cyber defense technologies, and to
    deploy effective cyber security tools such as continuous monitoring,
    data loss prevention, and strengthened access controls. The NCIO focus
    for the next 5 years is to continue execution of our integrated
    strategy of IT Transformation (the NNSA Network Vision (2NV)), improved
    security monitoring of our environment (Joint Cyber Coordination Center
    (JC3)), and deploying next generation cyber defense capabilities that
    alter the economics of the cyber battlefield (Cyber Sciences Laboratory
    (CSL)).
        The NCIO made significant progress towards the OneNNSA vision in
    fiscal year 2013. The organization deployed a new, secure wide-area
    network (OneNNSA Network), a first of its kind federated Identity
    Management solution (a critical path step to full HSPD-12
    implementation), a unified communications solution and agency wide
    social network allowing for the collaboration of over 45,000 employees
    (ONEvoice), and a state-of-the-art cloud services broker (YOURcloud)
    that will provide a foundation for cloud computing adoption and was
    recently recognized by Excellence.gov as the most innovative project in
    government.
        Fiscal year 2014 will build on these achievements and progress all
    three elements of our integrated strategy forward. For 2NV, NCIO will
    consolidate data centers using YOURcloud, modernize our applications to
    reduce legacy IT costs and enable a mobile workforce, and consolidate
    our intranets, websites, and file servers to common platforms to reduce
    costs. NCIO will improve our classified network monitoring
    capabilities, provide monitoring for 2NV investments, and strengthen
    the partnership with DOE for unclassified JC3 capabilities. For CSL,
    NNSA will execute a robust cyber defense R&D portfolio center around
    three signature programs: (1) Mission Resilience and Assurance, (2) Big
    Data and Behavioral Cyber Analytics, and (3) Scalable Testing of System
    Cyber Dynamics.

                        DEFENSE NUCLEAR NONPROLIFERATION

        As I mentioned earlier, we decided to align all the global nuclear
    security activities under the Defense Nuclear Nonproliferation account.
    This will strengthen our focus on countering nuclear terrorism and
    proliferation, while encouraging cooperation among our programs in this
    area. The Request includes $2.1 billion for the DNN appropriation which
    includes the NNSA Defense Nuclear Nonproliferation (DNN/NA-20), Nuclear
    Counterterrorism Incident Response (NCTIR/NA-40), and Counterterrorism/
    Counterproliferation (CTCP/NA-80) programs.

    Office of Defense Nuclear Nonproliferation
        As we look to the future, we see challenges and opportunities
    across the globe. Over the past 4 years we have seen increased focus,
    determination and expansion of activities with our international
    partners. This has been due largely to the momentum created by the
    Nuclear Security Summit process to meet shared nuclear security goals.
    Russia, for example, has announced its intention to be a full partner
    with us, and remains a critical partner in the efforts to secure the
    most vulnerable nuclear materials and keep them out of the hands of
    proliferators and terrorists. The Russians are not alone, and dozens of
    countries have stood alongside President Obama and the United States at
    two Nuclear Security Summits to show their commitment to our shared
    cause.
        One of our most important accomplishments has been to support the
    administration's commitment to secure the most vulnerable nuclear
    material across the globe in 4 years. Since 2009, our efforts to secure
    plutonium and highly enriched uranium (HEU) around the world have
    accelerated to make it significantly more difficult to acquire and
    traffic the materials to make an improvised nuclear device. I am proud
    to say that we are very close to meeting our goals to remove or dispose
    of 4,353 kilograms of highly enriched uranium and plutonium in foreign
    countries by the end of 2013, and equip 229 buildings containing
    weapons-usable material with state-of-the-art security upgrades, though
    some challenges remain.
        On April 5, 2013, we completed the removal of all HEU from the
    Czech Republic, making it the 10th country to be completely cleaned out
    of HEU in the last 4 years. The NNSA will complete prioritized removal
    of vulnerable nuclear material from three more countries this year.
        The 4-year effort allowed us to accelerate some of our most
    important work, but it has been accurately described as ``a sprint in
    the middle of a marathon.'' After our 4-year sprint, there will be much
    left to complete in the areas of the elimination, consolidation and
    securing of nuclear and radiological materials worldwide. Nuclear and
    radiological terrorism continues to be a grave threat, nuclear and
    radiological WMD technology and expertise remain at risk, and materials
    of concern, such as plutonium, still are being produced. While the
    challenges are substantial, they are not insurmountable.
        NNSA, working with its international partners and with strong
    support from the White House, will continue to eliminate, consolidate
    and secure high risk materials to ensure that terrorists can never
    acquire a weapon of mass destruction. The fiscal year 2014 request for
    ODNN provides $1.8 billion to: continue efforts both domestically and
    internationally to convert research reactors and isotope production
    facilities from HEU to LEU, consolidate nuclear material in fewer
    locations, and permanently eliminate it where possible, improve and
    sustain safeguards and the security of nuclear materials at those
    locations, support the adoption of security best practices, prioritize
    efforts to secure or remove high-risk radiological sources, prevent
    illicit trafficking of nuclear and radiological material through the
    provision of fixed and mobile detection equipment and export control
    training, and work in collaboration with international partners to
    build global capability in these areas.
        We will continue to pursue a multi-layered approach to protect and
    account for material at its source, remove, downblend or eliminate
    material when possible, detect, deter, and reduce the risk of
    additional states acquiring nuclear weapons, and support the
    development of new technologies to detect nuclear trafficking and
    proliferation, as well as verify arms control treaties.
        We owe it to the American people to continually reevaluate our work
    and make strategic decisions for the future. The fiscal year 2014
    budget request takes a thoughtful look at the Mixed Oxide (MOX) Fuel
    Fabrication Facility project and our plutonium disposition options. The
    United States remains committed to disposing of excess plutonium, and
    we believe this review will ensure that we are able to follow-through
    on our mission in the decades to come. The U.S. plan to dispose of
    surplus weapons-grade plutonium by irradiating it as MOX fuel has
    proven more costly to construct and operate than anticipated.
    Considering these unanticipated cost increases and the current budget
    environment, the administration has begun assessing alternative
    plutonium disposition strategies and identifying options for fiscal
    year 2014 and the out-years. During the assessment period, the
    Department will slow down its MOX project. We are committed to
    disposing of excess plutonium, we recognize the importance of the U.S.-
    Russia Plutonium Management and Disposition Agreement, and the United
    States will continue to engage key program partners and stakeholders as
    the assessment of alternative plutonium disposition strategies is
    developed.
        Our continued focus on nonproliferation and nuclear security
    efforts is vital. The threat of nuclear terrorism and WMD proliferation
    remains. Detonation of a nuclear device anywhere in the world could
    lead to significant loss of life, and extraordinary economic,
    political, and psychological consequences. We must remain committed to
    reducing the risk of nuclear terrorism and WMD proliferation.

    Nuclear Counterterrorism Incident Response
        This year, the request for NCTIR will support a strategy focused on
    reducing nuclear dangers through integration of its subprograms;
    Emergency Management, Emergency Response, Forensics and International
    activities supported by training and operations.
        In fiscal year 2014, the program will invest in leverage at a
    distance capability for the Nuclear Emergency Support Team, maintain
    training of the Consequence Management Home Team, sustain stabilization
    cities, complete improvements to U12P-tunnel, address and sustain
    emergency management requirements, maintain the Emergency
    Communications Network, and continue supporting international partners.
    The NCTIR program will continue to maintain essential components of the
    Nation's capability to respond to and manage the consequences of
    nuclear incidents domestically and internationally, and continue to
    conduct programs to train and equip response organizations on the
    technical aspects of nuclear counterterrorism.

    Counterterrorism and Counterproliferation Programs
        The aforementioned budget realignment includes the Counterterrorism
    and Counterproliferation, or CTCP, program office, which we stood up
    last year. The funding request for CTCP includes the transfer of the
    discontinued National Security Applications funding into a consolidated
    and substantially revised budget line to support the highest priority
    counterterrorism and counterproliferation technical work, including the
    study of Improvised Nuclear Devices and other non-stockpile nuclear
    device threats. This increased funding will support unique nuclear
    device-related technical contributions derived from NNSA's core nuclear
    science and technology expertise. This activity supports interagency
    policy execution, DOD and Intelligence Community customers, and DOE's
    own emergency response operations.

                              NAVAL REACTORS (NR)

        Naval Reactors' request for fiscal year 2014 is $1.246 billion, an
    increase of 15 percent over the fiscal year 2012 request, to continue
    safe and reliable naval nuclear propulsion. The program directly
    supports all aspects of the U.S. Navy's nuclear fleet, which
    encompasses the Navy's submarines and aircraft carriers, over 40
    percent of the U.S. Navy's major combatants. Currently, the nuclear
    fleet is comprised of 54 attack submarines, 14 ballistic missile
    submarines, 4 guided missile submarines, and 10 aircraft carriers. Over
    8,300 nuclear-trained Navy sailors safely operate the propulsion plants
    on these ships all over the world, and their consistent forward
    presence protects our national interests.
        Continued safe and reliable naval nuclear propulsion requires that
    NR maintain the capability to anticipate and immediately respond to
    small problems before they become larger issues. Our technical base and
    laboratory design, test, and analysis infrastructure is required for us
    to thoroughly and quickly evaluate technical issues that arise from
    design, manufacture, operations, and maintenance, ensuring crew and
    public safety without impeding the mission of our nuclear-powered
    fleet. Uncompromising and timely support for safe operation of the
    nuclear fleet continues to be the highest priority for Naval Reactors.
        Beyond fleet support, Naval Reactors continues efforts on its three
    important new projects: the design of the Ohio Replacement reactor
    plant; the refueling overhaul for the S8G Land-based Prototype reactor;
    and recapitalization of our naval spent nuclear fuel infrastructure.
    Each of the projects is critical to fulfillment of the Navy's longer-
    term needs.
        The current Ohio-class ballistic missile submarines are reaching
    the end of their operational lives and will begin to retire in 2027.
    Naval Reactors is designing and developing a life-of-ship core for the
    Ohio Replacement that will increase SSBN operational availability and
    reduce strategic deterrence submarine procurements from 14 to 12. The
    fiscal year 2014 request is $125.6 million and supports the Navy's
    schedule and progresses on reactor plant design needed for procurement
    of reactor plant components beginning in 2019. This request is
    essential to component design, procurement and ship construction.
        The Land-based Prototype provides a cost-effective testing platform
    for new technologies and components before they are introduced to the
    fleet, and is essential for the testing of new materials and technology
    for the Ohio Replacement life-of-ship core. To preserve this vital
    research, development, and training asset for the long-term and to
    achieve life-of-ship core for the Ohio Replacement, core development
    and preparations for the refueling overhaul must continue in fiscal
    year 2014. The fiscal year 2014 request for the S8G Land-based
    Prototype Refueling Overhaul is $143.8 million.
        Finally, the Spent Fuel Handling Recapitalization Project (SFHP)
    supports the Navy's refueling and defueling schedule for nuclear-
    powered aircraft carriers and submarines by providing the capability to
    unload and return spent fuel shipping containers to the shipyard. The
    fiscal year 2014 budget includes $70 million to continue conceptual
    design for a new facility. Significant portions of the existing
    Expended Core Facility are more than 50 years old, and were not
    designed for its current mission of processing and packaging spent
    naval nuclear fuel for permanent dry storage. The existing facility is
    not capable of handling full-length aircraft carrier fuel from M-290
    shipping/storage containers. The need to prioritize operational fleet
    support following enactment of the Budget Control Act resulted in a
    year and a half delay to the project; the fiscal year 2014 request
    supports this revised schedule. Further delay to the SFHP would create
    a need for additional M-290 containers, at approximately $100 million
    per year of delay, for temporary storage.
        Like our Weapons program, over the last year, DOE, NNSA, and the
    DOD CAPE conducted a comprehensive analysis of Naval Reactors' program
    and validated that our requirements are consistent with the President's
    overall strategy.

                          OFFICE OF THE ADMINISTRATOR

        The NNSA's Office of the Administrator (OA) appropriation provides
    the Federal salaries and other expenses of the NNSA mission and mission
    support staff, including the Federal personnel for Defense Programs,
    Defense Nuclear Nonproliferation, Emergency Operations, Defense Nuclear
    Security, Acquisition and Project Management, the Office of the Chief
    Information Officer, Safety and Health, the Administrator's direct
    staff, and Federal employees at the Albuquerque Complex and site
    offices. The OA account is an essential enabler of the Federal roles
    and missions that are the heart of our Enterprise.
        The OA account continues to streamline operations and provide
    staffing for efficient and effective oversight to our programs. We have
    taken aggressive measures to significantly downsize the account,
    including cutting travel and support services by about one-third and
    offering voluntary separation incentive payments and early retirement
    to help right-size our workforce.

                             IMPACT OF SEQUESTRTION

        The sequestration cuts now in effect will hamper NNSA's ability to
    carry out the full range of national security activities planned in our
    fiscal year 2013 budget. These cuts are coming 5 months into the
    current fiscal year, forcing the NNSA to absorb the spending reduction
    in a 7-month period rather than an entire year. Under the current law,
    the NNSA fiscal year 2013 budgetary resources have been cut by roughly
    7.8 percent, which equates to an effective reduction of over 13 percent
    when measured over the balance of the fiscal year. Under sequestration,
    the reduction for the entire NNSA is approximately $900 million. This
    results in the Weapons Activities appropriation is approximately $600
    million below the fiscal year 2013 request levels, and more than $250
    million below the fiscal year 2012 levels.
        Prior to sequestration taking effect, NNSA informed Congress
    through hearings on two separate occasions that thousands of contractor
    jobs at our labs and plants could be affected either through work-hour
    reductions or other personnel actions with Directed Stockpile Work and
    the Life Extension Programs being impacted the greatest. While we
    continue to believe that sequestration will cause significant impacts,
    these preliminary impact statements, which were formulated in a period
    of uncertainty regarding the precise provisions of the final Continuing
    Resolution (CR), need to be revised.
        Now that we know the actual terms and conditions of the CR, NNSA is
    working closely with our partners in the labs and plants to develop
    mitigation strategies that will protect our highest priority workload
    to the best of our ability given the current resources. Our highest
    priority will remain the safety and security of our nuclear security
    enterprise. Once this review is completed, the Department plans to use
    a combination of the Operating Plan required by the CR, as well as a
    reprogramming to address the most critical funding needs and implement
    mitigation strategies to give program managers the flexibility they
    need to best handle the reductions across the enterprise.
        Due to the indiscriminate nature of these cuts and view that it
    remains poor policy, the President's fiscal year 2014 budget request
    does not reflect sequestration's impacts; either in fiscal year 2014 or
    across the FYNSP.

                                   CONCLUSION

        The fiscal year 2014 budget reaffirms the national commitment to
    the President's nuclear security vision, applying world-class science
    that addresses our Nation's greatest nuclear security challenges and
    building NNSA's 21st century nuclear security enterprise through key
    investments in our people, programs and infrastructure. We are looking
    toward the future and building an organization that will ensure
    success. I look forward to working with each of you to help us do that.
    Thank you.
        Senator Udall. Thank you, Ms. Miller.
        The subcommittee, as I mentioned, is proud to have Senator
    Donnelly here. Would you like to start with the first round of
    questions? I know your time is valuable.
        Senator Donnelly. Thank you, Mr. Chairman.
        What are the implications for NNSA of having a lot of
    scientists who have never worked with the underground testing?
    How is that going to affect your operations?
        Ms. Miller. Thank you, Senator. That is actually a very
    good, interesting question.
        Of course, we have now been without underground testing
    since 1992. So we have years of this. But as I think a number
    of us in the room know, none of us are getting any younger, and
    that means----
        Senator Donnelly. That would be true for me as well.
    [Laughter.]
        Ms. Miller. So I think that it is clearly something that is
    at the front and center for those of us concerned with the
    future of the stockpile as we look to make sure that, first of
    all, there is knowledge transfer, first and foremost, and there
    has been quite a lot of that. But also, the stockpile
    stewardship program that began in the 1990s really was based on
    the idea that we would hopefully not to go back to underground
    testing and we needed to find a way to make sure we could do
    what we have to do with the stockpile without it.
        So I think that there has been a terrific effort, and we
    have seen actually, I think, the kinds of results that people
    maybe did not anticipate how good they would be from the
    modeling and simulation work that has gone on over the last
    number of years, and we continue to develop that. It is
    something that we know is absolutely critical to not only the
    stockpile of today but to the extended life of the stockpile,
    all of the science base for that.
        Senator Donnelly. In regards to the stockpile, what is your
    confidence level given the continued use that we have had of
    LEPs?
        Ms. Miller. First of all, it is the job of the head of U.S.
    Strategic Command, as well as the laboratory directors, to
    write a letter to the President every year to discuss the state
    of the stockpile in their opinion, which is certainly going to
    be more to the point than mine with their training.
        But I would say that we, based upon what we, together with
    our laboratory directors, know are very confident in the
    ability of that stockpile to deliver as it has been promised to
    deliver. But we also, with regard to LEPs, know that we are
    getting into a large cycle right now where we are going to have
    to master the LEPs in order to be able to continue to assure
    that stockpile.
        Senator Donnelly. In regards to physical security of the
    NNSA facilities, since the Y-12 event, what have we done to try
    to make the facilities more secure?
        Ms. Miller. In the aftermath of the Y-12 event, of course,
    there were a number of reviews that were conducted both on
    behalf of the Secretary of Energy and the Inspector General.
    There were a number of reviews done. But I think the one that
    had the most direct effect so far on the NNSA and how we do
    this was the review conducted at the request of the former
    Administrator and myself by General Sandra Finan, who at that
    time was in the NNSA on loan from the Air Force--conducted a
    review of how we do what we do in the area of security. As she
    very clearly stated, both in her report and in subsequent
    testimony, how we were doing security really was not serving
    anybody very well because it was so disconnected from what was
    actually--the parts of security, which is to say the physical
    security at the site on the ground, was disconnected from a
    headquarters group whose job was to promulgate policy. It is
    why I chose to mention it specifically in the testimony.
        What we have done to change this--I would point to two main
    things. First of all, it was the creation of that
    infrastructure and operations group to bring the field offices
    into the line of NNSA so that we can have a mechanism now to
    drive consistency in the application of policies across the
    sites, and you do not have sites that, for whatever reason
    might be for that site, has decided to take the policy and do
    it a different way. So that is one piece of it.
        The other piece of it within the NNSA is to establish that
    strong security policy group which also has a strong assessment
    capability so that they can deliver the policy instructions and
    come back in and see how is it actually happening.
        At the same time, on the contractor side--I mentioned in
    the testimony driving accountability with the contractor--this
    is absolutely critical, will be critical in the success
    because, after all, the protective force is contractor-based.
    So our deep involvement with our contractor partners on our
    expectations and also our assessment of their performance will
    be critical to this.
        Senator Donnelly. Thank you.
        Mr. Chairman, thank you.
        Senator Udall. Thank you, Senator Donnelly. It is great to
    have you here.
        Let me pick up on that particular theme, Administrator.
    Following the Y-12 break-in by the 82-year-old nun and her
    colleagues, a principal finding was that there was lack of
    oversight by the NNSA and, in particular, the contractor
    assurance system whereby the contractor writes self-evaluations
    of their performance and then gives it to NNSA to help
    determine their award fee. Do you want to expound on what you
    are doing to ensure more rigorous oversight of this process?
        Ms. Miller. Yes. Thank you, Senator.
        Senator Udall. I know you would want to talk to this.
        Ms. Miller. I do. Thank you.
        Again, I would start by saying that the incident at Y-12--
    and this is probably true of whatever challenges the
    organization faces--is first and foremost a management issue
    and a management failure. When you look to how to address this
    for the future, if you do not start from that premise, you may
    find yourself with many little fixes that do not, in fact,
    address the problem at its root.
        To manage an organization in disconnect between the people
    in Washington and the people across the country I would say is
    a system that was appropriate and worked well for many years
    throughout the Cold War and certainly in a period where
    communications were what they were. But for us to drive
    accountability from the Administrator on through the
    organization, we have to be organized and working together in a
    very different way.
        The contractor assurance system, in and of itself, we
    believe is not--and we have had this reviewed by many people
    from the outside--conceptually is the right way to go.
    Certainly our laboratory partners are vocal about the need for
    them to be able to do their work without burdensome oversight.
    Of course, the devil is in the details: what is burdensome to
    whom.
        I would say on our side what we believe is we need to be
    able to better train our staff, communicate what we mean by all
    of this, and make sure that the accountability is all up and
    down the NNSA, as well as in the contractors, so that that
    contractor assurance system does not equal a rubber stamp. I
    think we found ourselves in a place where we had many measures
    of effectiveness of the contractor, which did not necessarily
    tell you what was happening. That certainly was the case with
    security. Then we had people who, because communicating in such
    a large organization across so many places had been challenging
    to people for years, had not really driven an understanding of
    what it meant to operate under a contractor assurance system.
        So all of those components are what we are working very
    hard to address, both organizationally driving the
    accountability and setting it up in a way that we can see it
    all and people are connected, but also that communications and
    training that the Federal staff need to be able to perform
    their oversight duties appropriately.
        Senator Udall. I very much appreciate your willingness to
    acknowledge this starts with management. What I think I hear
    you saying is that the contractor assurance system provides a
    valuable look from one point of view, but there have to be
    other checks and balances as a part of that system starting
    with management.
        Ms. Miller. That is exactly right, Senator.
        Senator Udall. I was the CEO of the Outward Bound School
    for years. Our focus was on safety, and whenever we had an
    incident, we did an internal review, as we called it. Then we
    had an external review to double check our assumptions, our
    facts, and our conclusions. I think what I hear you saying is
    that approach has to be a part of what is put into place given
    what happened.
        Ms. Miller. There absolutely has to be a healthy look at it
    from both sides ongoing in all of these areas, security,
    safety, performance of the mission, and all of them.
        Senator Udall. In some cases, we would even have a third
    review in my situation.
        Ms. Miller. I agree, and one wants to get that done before
    a problem not afterwards.
        Senator Udall. Thank you for that.
        Let me move to the CAPE office. I know you mentioned you
    are standing up that operation. Can you talk a little bit about
    how that will be implemented?
        Ms. Miller. I can.
        I would say that in the NNSA, while we have, since creation
    and as it was directed in the enabling statute, presented
    Congress with a 5-year budget, which is atypical in DOE where
    it is presented a year at a time, the actual exercise within
    the organization has really focused on the budgeting and
    execution portion. The programming and planning has been not as
    strong as it needed to be. What I found in the organization--
    and it was certainly not just me, but I have a budget
    background, so I noticed it particularly--is that decisions
    tended to be made very low level, which have a strong impact
    ultimately on resource decisions that the senior folks are left
    to deal with, in the end very little room to address issues. To
    make decisions without good analysis, independent analysis, and
    hard data seems to me to not be in the best interest of the
    organization long-term, and in the end is less defensible
    certainly to Congress or anybody else.
        So I felt very strongly that in addition to a very strong
    budget office, which the NNSA absolutely does have, this
    facility to have independent analysis was absolutely critical
    to the success of the organization both because we have large
    construction projects but also because we have large, ongoing
    projects such as the LEPs and so many other demands on us
    throughout the nonproliferation programs and all the other work
    the NNSA does, it is in the best interest of everybody if those
    resource decisions are made, again, based on good analysis. So
    it was very much a strong interest of mine to get this going
    inside.
        Now, with respect to how this relates to DOD's CAPE, I had
    the opportunity, when I was still working at the Office of
    Management and Budget (OMB) in the mid-2000s working on the
    NNSA portfolio, to get involved with the CAPE and the NNSA
    together to begin to look at potential costs of modernizing the
    infrastructure. So I had a connection with the CAPE for quite
    some time and the way they do their business.
        One thing I came to the conclusion in NNSA and that is with
    respect to cost analysis itself, the ``CA'' part of CAPE, I
    would argue that this capability, to the level that it is done
    in DOD is almost unique to DOD. Those people know how to do it.
    They have been doing it. They tend to stay put, and to create
    that out of nothing is difficult, very difficult.
        So instead, I had a very good relationship especially over
    the last year with the Director of the CAPE, Ms. Christine Fox,
    with whom I conducted a long, in-depth analysis of our resource
    needs. We were able to come to a good arrangement wherein we in
    the NNSA can continue to use the DOD CAPE's cost assessment
    capability and eventually grow our own by training people over
    there. But for the ``PE'' part, the program evaluation and
    analysis, that part we could stand up on our own over at NNSA,
    and that was the shop that I just mentioned. I think the two
    together give us what we need.
        Senator Udall. That is helpful, and I look forward to
    hearing more as that develops. Clearly, your background led you
    to see this and to create a hybrid, if you will, approach.
        Let us turn to the `s' word--it is not a four-letter word,
    but it feels like one some days--``sequestration.'' What effect
    will it have on your major programs in terms of schedule
    delays? In particular, I am primarily focusing on the B61, the
    W76, and the uranium processing facility.
        Ms. Miller. I feel compelled, when I talk about
    sequestration, to talk about budget uncertainty overall. I
    would not be true to my budgeter background if I did not.
        Budget uncertainty in my eyes starts, first and foremost,
    with the Continuing Resolutions (CR) that people live off of.
    So now I will layer sequestration on what we know as a fact of
    life.
        Clearly, there is an effect on projects, especially the
    kinds of projects we run, whether they are construction
    projects, LEPs, frankly projects that we have going in other
    countries to secure borders, to secure material. Anything that
    plans out over several years that has a path to a cost and now
    cannot meet the plan, first and foremost, despite the mirage of
    a cash flow benefit, in fact will lead to higher costs for all
    of these projects by definition.
        Senator Udall. You are talking about CRs and sequestration.
        Ms. Miller. I would say for both, but sequestration on top
    of the planning challenges absolutely comes in and knocks us
    off our feet. I know you heard testimony yesterday from the
    Director of Sandia speaking very strongly about his concerns
    with respect to the B61 and the effect of sequestration. I
    spoke this morning for an hour with people from one of our
    communities that is absolutely reeling from being hit by
    sequestration and heard some really stunning stories of how
    individuals are not just on furloughs but people in businesses
    and how they are planning with their lives. Those are
    communities that we work closely with and we rely on to be
    strong for us in the work we need to get done. So I think the
    effect is profound and I am surprised that people do not get
    that.
        Senator Udall. Yes. I am tempted to try and categorize CRs
    and sequestration, which is worse, but I think they are both
    bad.
        Ms. Miller. I would rather not have either.
        Senator Udall. Yes. That is a job and responsibility we
    have yet to shoulder. We need to.
        I am going to turn to a GAO recommendation that NNSA
    reevaluate the award for the combined contract at Y-12 and
    Pantex. Their principal finding is that the NNSA did not
    meaningfully assess--that is a quote, ``meaningfully assess''--
    the estimated cost savings of some $3.4 billion in the winning
    proposal especially since NNSA's own internal estimate assumed
    a savings from the combined contract of about $840 million.
    Would you comment on the GAO finding?
        Ms. Miller. Senator, thank you. I will comment. I need to,
    of course, be careful about how I comment since this is still
    in open procurement. I will comment enough to say that we are
    announcing and have announced today that we will carry our a
    corrective action with respect to the GAO finding as they
    recommended. We, of course, were very pleased that GAO found,
    out of the 17 issues in front of them, 16 of them were not with
    merit. But on the one that they did find, we are going to carry
    out a corrective action on that. The various affected parties
    have been informed today and we will proceed with the process
    on that directly.
        Senator Udall. I look forward to seeing that. That is a
    nice batting average, 16 out of 17, but I know you want to hit
    100.
        Ms. Miller. I am from Boston. [Laughter.]
        Senator Udall. I am staying away from that. The Rockies are
    my team except when you all come to town. [Laughter.]
        You mentioned in your testimony we heard from the lab
    directors yesterday, and they are quite a talented trio. Dr.
    McMillan specifically indicated that you are all looking at a
    less costly strategy for the CMRR involving a series of modular
    buildings instead of a large one. Can you comment on your
    thoughts on this approach and whether it holds promise for
    providing flexibility and lower costs? I know you mentioned, I
    think, a plutonium strategy. Again, please share your thoughts
    on all of this.
        Ms. Miller. Sure. Thank you.
        First of all, I noted in your comments to open with, you
    mentioned what had been spent on the design of CMRR thus far,
    as well as the pit disassembly and conversion facility, again
    what had been spent on design. In both those cases, we did not
    proceed with construction.
        So dealing specifically with the chemistry and metallurgy
    replacement building, I think like a lot of situations, budget
    crises drive you to work harder and sometimes better, and in
    this case I think better. We had a plan on the books for many
    years. It had not, frankly, been reassessed in light of a lot
    of things, and we found ourselves with a rather large bill just
    at the time when the money became particularly tight. That did
    cause us, together with our lab directors, to go back and
    review.
        The approach that you heard about, the modular approach, is
    absolutely of great interest to us, but I will tell you that we
    are undertaking, with the CAPE, a business case analysis of
    that approach and a few others because we need this time to
    make sure that we have really looked at the options and did not
    just get behind the next thing that appeared and decided that
    that was the option.
        Senator Udall. We are going to move to the next panel, but
    I have two questions that I will put in the record. I know you
    will be willing to answer them for the record.
        In particular, I want to just note your focus on the long-
    term vision I am learning at the helm of this committee and
    will draw some conclusions over time. But I think the
    President's goal of nonproliferation as a start and then
    ultimately a world that does not face the threat of nuclear
    weapons are worthy and important--I know there is broad
    bipartisan support for that approach. I think we should hold
    that as a goal. It is a long, winding road to reach it. It may
    take many generations, but I think it is crucial that we keep
    that. I know that is at the core of your philosophy and you
    reflect the President's philosophy.
        Ms. Miller. Absolutely.
        Senator Udall. Thank you for appearing today. We look
    forward to working with you further.
        Ms. Miller. Thank you.
        Senator Udall. You are free to do whatever else you have on
    your busy schedule, you may either go or you are welcome to
    stay. Thank you for being here.
        Ms. Miller. Thank you very much.
        Senator Udall. As the Administrator leaves, we will ask the
    second panel to come forward. We will begin as soon as you all
    are ready. [Paugse.]
        Welcome, gentlemen. Thank you again for taking time out of
    your busy schedules to join the Strategic Forces Subcommittee.
    I think in the interest of time, we will move from my left to
    right, and if each of you would be willing to share 1 or 2
    minutes of your thoughts and then we will go right to
    questions. I want to make sure everybody has a chance to be
    heard, particularly in the question and answer period. Of
    course, if we do not get to everything that you would like us
    to know, the record will remain open for a number of days, not
    too many days, but will remain open for a number of days so you
    can submit additional comments.
        So, Dr. Cook, we will open with you.

    STATEMENT OF HON. DON L. COOK, DEPUTY ADMINISTRATOR FOR DEFENSE
    PROGRAMS, NATIONAL NUCLEAR SECURITY ADMINISTRATION, DEPARTMENT
                               OF ENERGY

        Dr. Cook. Chairman Udall and members of the subcommittee, I
    thank you for the opportunity to be here and testify. I will
    abbreviate my remarks as I go in the interest of time.
        I especially want to make the point that the NNSA has
    committed to strategically modernizing our nuclear weapons
    infrastructure, the nuclear weapons systems themselves, and the
    supporting science, all of which are required to ensure a safe,
    secure, and effective nuclear deterrent, and to continue to
    certify the stockpile without underground testing, as we have
    now done for 20 years in a row.
        Within today's constrained fiscal environment, we have also
    closely scrutinized our strategies, plans, processes, and
    organization to ensure we make the most of our resources. Over
    the past year, we have worked very closely between NNSA and
    DOD, often through the Nuclear Weapons Council and the
    subordinate bodies. We have been engaged in a budget-driven
    requirements analysis, and this process of rigorous analysis
    has forged a stronger link between the two agencies, as well as
    improved the thought process and the ideas that we are bringing
    forward for execution.
        As a result, some of the highlights are we have achieved a
    comprehensive strategy for the conduct of LEPs across the
    stockpile. This has not existed before. We call this a 3+2
    strategy. I will elaborate on that in just a few moments
    quickly.
        We have updated and have now a more complete plutonium
    strategy, as Administrator Miller just went through.
        We have a refocusing of our science, technology,
    engineering, and infrastructure activities underway right now
    and are continuing to make sure that we align those activities
    with the needs of the LEP for the capabilities that are most
    urgently needed.
        We have done a reorganization of the way in which we
    operate our facilities accounts. The operations of facility
    accounts now are separated into site infrastructure, which is
    broad, and nuclear programs, which is specific to nuclear
    programs.
        We as well have a sizeable challenge on our hands, the
    significant effort to identify and implement management
    efficiencies, specifically $320 million in amount in fiscal
    year 2014, building to $2 billion over the future years 2014 to
    2018 Nuclear Security Program (NSP). Each of these critical
    areas was determined after a considerable and deep effort,
    again, among the agencies with which we work.
        So let me for a moment touch on a few elements pertinent to
    this discussion and questions you might have.
        The 3+2 strategy is a strategy that will provide, in the
    course of time, three interoperable ballistic missile systems
    to replace the four not interoperable ballistic systems we have
    today and two legs of the deterrent. In addition, we will have
    two interoperable systems covering the air-delivered leg. That
    will include at least a bomb system and a cruise missile
    system.
        With regard to the LEPs, a very quick status is the W76 LEP
    has achieved the full build rate of production. We are in
    steady state, or phase 6, and that effort will complete with
    all deliveries required for the Navy now by the end of 2019.
        The W88 Alt 370 is a substantial update on the arming,
    fuzing, and firing (AF&F) needed for the W88 weapons system. It
    is also in engineering development at phase 6-3, and it is
    slated for a first production unit also in fiscal year 2019.
        The B61-12 is now also in engineering development,
    continuing very well. We are pursuing option 3B. That was a
    decision made by the Nuclear Weapons Council. That has, again,
    a first production unit of fiscal year 2019 and an initial
    baseline remaining at about $7.9 billion.
        Very quickly, what I would like to address is there has
    been significant discussion of other options which were duly
    considered by the Nuclear Weapons Council and one that is
    attractive because of its lower cost. Triple Alt is an
    alteration of three specific components. While that would carry
    the B61 family forward for a few years and maybe as long as a
    decade, it would then need to be followed by a comprehensive
    LEP under greater urgency. That would not lead to a
    consolidation of the four different mods we have in this
    weapons system, and most importantly, it would not address some
    of the things like electronics degradation and the environment
    of the weapon, which the laboratories and laboratory directors
    are now seeing and are concerned about.
        The last item I would like to mention is the first
    interoperable system. We denote it as the W78/88-1. That is in
    phase 6-2. It is in design definition and the cost study phase,
    which is going through right now assessment of really the
    ability for us to have an interoperable system in two legs of
    the deterrent.
        Although I have other remarks, I think I will stop at this
    point and open the way for my colleagues for a time and
    questions later.
        Senator Udall. Thank you, Dr. Cook.
        Admiral Richardson, welcome.

    STATEMENT OF ADM JOHN M. RICHARDSON, USN, DEPUTY ADMINISTRATOR
     FOR NAVAL REACTORS, NATIONAL NUCLEAR SECURITY ADMINISTRATION,
                          DEPARTMENT OF ENERGY

        Admiral Richardson. Chairman Udall, members of the
    subcommittee, thank you for the opportunity to testify before
    you today on the Naval Reactors fiscal year 2014 budget
    request. It is a privilege to be here representing the men and
    women of the Naval Nuclear Propulsion Program. This is the
    first of, hopefully, many times testifying as the Director. I
    am eager to share our progress, opportunities, and challenges.
        Your Naval Nuclear Propulsion Program provides for
    research, development, design, procurement, certification,
    operation, and eventual disposal of 97 naval nuclear reactors
    that power the 10 aircraft carriers, 14 Ohio-class ballistic
    missile submarines, 4 guided missile submarines, and 54 attack
    submarines, more than 40 percent of the U.S. Navy's major
    combatants. These ships are available whenever called to go
    anywhere in the world and remain continuously on station in
    defense of our Nation's interests.
        Mr. Chairman, my budget request for fiscal year 2014 is
    $1.26 billion and includes funds for my base program, as well
    as for three new projects, the replacement of the Ohio-class
    submarine, a refueling overhaul for our land-based prototype,
    and the recapitalization of our spent fuel handling facility in
    Idaho. The requested funding in fiscal year 2014 and the out-
    years has been vetted by OMB, DOE, and NNSA. In addition, the
    Office of the Secretary of Defense (OSD) CAPE recently
    completed a comprehensive analysis of the program and validated
    our requirements.
        With your permission, sir, I would like to quickly share a
    few details about the activities funded by our request.
        First, the Ohio-class strategic deterrent submarines will
    begin to reach the end of their service life in the late 2020s.
    The fiscal year 2014 request includes $126 million for the
    development of the reactor plant for the submarine that will
    replace the Ohio-class. This new reactor plant includes a core
    that will last the entire life of the submarine, 42 years,
    without needing to be refueled. The life-of-the-ship core,
    coupled with other maintenance innovations, enables this new
    ballistic missile submarine (SSBN) force to eliminate the mid-
    life refueling, turning shipyard time into at-sea time, and by
    virtue of the increased operational availability made possible
    by this core, the new SSBN class is able to meet its strategic
    commitments with 12 ships, 2 less than the current force of 14.
    The Navy estimates this will save $40 billion over the life of
    the program. The procurement of the first Ohio replacement
    submarine is scheduled in 2021 with nuclear component
    procurement beginning in 2019.
        The second project in our request is the refueling and
    overhaul of the land-based prototype reactor, which begins in
    2018. To support this requirement, the fiscal year 2014 budget
    request includes $144 million. This program is essential to
    delivering the life-of-the-ship core for the new strategic
    submarine. When we refuel this reactor, the core we will use
    will include advanced features that we intend to use for the
    submarine reactor. Fielding a prototype with this advanced core
    will allow us to validate the manufacturing techniques and
    better understand the behavior of this core for the Ohio
    replacement. This understanding will translate into reduced
    technical costs and schedule risk to this new submarine.
        We also use this reactor to train our fleet operators,
    about 800 a year. So in addition to the technology linked to
    the new submarine, this refueling will allow us to continue
    that critical training for an additional 20 years.
        The final project in our budget supports the Navy's
    refueling scheduled for the Nimitz-class aircraft carriers. The
    fiscal year 2014 budget includes $70 million to complete
    conceptual design and begin project engineering and design for
    the new facility to handle that spent fuel from those carriers.
    This new spent fuel handling project will come on line in 2022
    to replace the existing facility, which is more than 50 years
    old and is quickly becoming obsolete. The new facility will
    also enable me to meet my commitments to the State of Idaho
    which require that naval spent nuclear fuel be moved to dry
    storage and ultimately to permanent disposal.
        Finally, Mr. Chairman, everything I do, including these
    three projects I have just described, are made possible only by
    the efforts of the talented and dedicated people in my two labs
    and my headquarters personnel. These people form the base of my
    program. These scientists and engineers provide the technical
    foundation that is essential for me to execute my day-to-day
    regulatory and fleet support responsibilities for the 97
    reactors currently in service, the shipyards that maintain the
    nuclear powered fleet, and the vendors that supply that fleet.
    This core talent base also does the design analysis and
    oversight work for these new projects and manages our spent
    fuel to ensure we meet our responsibilities to the American
    people and the environment.
        I am grateful for the support this committee has given the
    Naval Nuclear Propulsion Program. I look forward to working
    together to advance the three critical projects discussed today
    and support the safe operation of the nuclear powered fleet.
    Thank you again. I am ready to answer any questions, sir.
        Senator Udall. Thank you, Admiral.
        Mr. Huizenga?

        STATEMENT OF MR. DAVID G. HUIZENGA, SENIOR ADVISOR FOR
     ENVIRONMENTAL MANAGEMENT, OFFICE OF ENVIRONMENTAL MANAGEMENT,
                          DEPARTMENT OF ENERGY

        Mr. Huizenga. Good afternoon, Chairman Udall and members of
    the subcommittee. I am honored to be here today to discuss the
    many positive things the OEM is doing for the Nation and to
    address your questions on our fiscal year 2014 budget request.
        Finally, I will just offer my appreciation for so quickly
    approving a reprogramming request that recently came up. I
    appreciate that.
        Our request of $5.3 billion for defense-funded activities
    will enable our office to continue the safe cleanup of the
    environmental legacy brought about from 5 decades of nuclear
    weapons development and Government-sponsored nuclear energy
    research. Our cleanup priorities are based on risk and our
    continued effort to meet our regulatory compliance commitments.
    Completing cleanup enables other crucial DOE missions to
    continue and ensures the reduction of one of the U.S.
    Government's largest liabilities.
        The OEM has made significant progress in accelerating
    cleanup across the United States. For example, in 2009, the
    total footprint of EM's cleanup sites was 931 square miles. As
    of January of this year, that figure has been reduced by 74
    percent. In 2012 at the Savannah River Site (SRS) in South
    Carolina, EM achieved a key milestone with closure of two high-
    level waste tanks. Also to date, EM has sent more than 11,000
    shipments of transuranic (TRU) waste to the Waste Isolation
    Pilot Plant (WIPP) in New Mexico for safe disposal.
        These accomplishments have been possible due to our
    competent Federal and contractor workforce. The safety of these
    workers is a core value that is incorporated into every aspect
    of our program. We maintain a strong safety record and
    continuously strive for an accident- and incident-free
    workplace by aggressively sharing lessons learned across our
    sites. We are training senior management and working to achieve
    an even stronger safety culture within our program, thereby
    ensuring safe construction and operation of our facilities.
        In recognition of EM's improvements in contract and project
    management, earlier this year my colleague, Mr. Trimble, to my
    left, and his colleagues removed EM capital asset projects with
    values less than $750 million from its high-risk designation.
    We are deeply committed to excellence in contract management
    and project management, and as much as I enjoy working with
    Dave, we intend to keep these projects off the GAO high-risk
    list.
        In fiscal year 2014, we are positioned to continue making
    progress toward our cleanup goals. For example, at the Office
    of River Protection, we are continuing construction of the low
    activity waste facility, complete construction of the
    analytical laboratory, and continue to see tank farm
    retrievals. At the SRS, we will close another two tanks, tanks
    5 and 6, high-level waste tanks. At Idaho, we are going to
    continue progress on the treatment of the remaining 900,000
    gallons of liquid waste and process and ship 4,500 cubic meters
    of transuranic (TRU) waste to WIPP. At Los Alamos, we are going
    to continue to focus on processing and removing 3,700 cubic
    meters of above-ground TRU waste. Finally, we are going to
    continue disposition of the U-233 inventory from Oak Ridge
    National Laboratory and pursue technology development for cost-
    effective treatment of mercury contaminated building debris at
    Y-12.
        In closing, we will continue to apply innovative cleanup
    strategies so that we can complete our work safely on schedule
    and within cost, demonstrating a solid value to the American
    taxpayers. The OEM has made steady progress, and with your
    help, we will continue to do so.
        Thank you and I, as the others, will take questions.
        [The prepared statement of Mr. Huizenga follows:]

                    Prepared Statement by Mr. David Huizenga

        Good afternoon, Mr. Chairman, Ranking Member Sessions, and members
    of the subcommittee. I am pleased to be here today to represent the
    Department of Energy's (DOE) Office of Environmental Management (EM). I
    would like to provide the Members with an overview of the EM program,
    key accomplishments during the past year, 2013 planned accomplishments
    and progress to date, the projected impacts of sequestration, and
    planned accomplishments under the fiscal year 2014 request.

                           OVERVIEW OF THE EM MISSION

        EM's mission is to complete the safe cleanup of the environmental
    legacy resulting from five decades of nuclear weapons development and
    government-sponsored nuclear energy research. This environmental legacy
    includes 88 million gallons of some of the world's most dangerous
    radioactive wastes, thousands of tons of spent nuclear fuel (SNF), over
    10,000 containers of excess plutonium and uranium, over 5,000
    contaminated facilities, millions of cubic meters of contaminated soil
    and billions of gallons of contaminated groundwater. As the largest
    environmental cleanup program in the world, EM was charged with the
    responsibility of cleaning up 107 sites across the country; an area
    equal to Rhode Island and Delaware combined. EM has made significant
    progress in this cleanup mission, completing the cleanup work at 90 of
    the 107 sites through the end of 2012.

                             EM CLEANUP OBJECTIVES

        EM continues to pursue its cleanup objectives safely within a
    framework of nuclear safety orders, environmental regulatory compliance
    commitments and best business practices. The rationale for cleanup
    prioritization is based on achieving the highest risk reduction benefit
    per radioactive content (activities focused on materials and wastes
    that contain the highest concentrations of radionuclides and sites with
    the highest radionuclide contamination). Taking many variables into
    account, EM has generally prioritized its cleanup activities across the
    EM complex as follows:

             Safety, security, and quality
             Environmental Compliance
             Radioactive tank waste stabilization, treatment, and
            disposal
             Spent (used) nuclear fuel storage, receipt, and
            disposition
             Special nuclear material consolidation, stabilization,
            and disposition
             High-risk soil and groundwater remediation
             Transuranic and mixed/low-level waste disposition
             Soil and groundwater remediation
             Excess facilities deactivation and decommissioning.

        In addition to these priorities, EM is committed to sound
    technology development and deployment as a way to reduce costs and
    fulfill its critical mission. EM develops and implements first-of-a-
    kind technologies to further enhance its ability and efficiency in
    cleaning up radioactive waste. Through these innovations, EM and the
    companies that perform its cleanup work have remained world leaders in
    this arena. EM's work enables other crucial DOE missions to continue
    across the United States. For example, EM supports the non-
    proliferation mission of the Department by providing and managing
    receipts of foreign and domestic research reactor fuels from around the
    world. EM supports both Science and National Nuclear Security
    Administration national laboratories by managing and dispositioning
    wastes and remediating and removing old facilities, enabling the
    Department to develop new capabilities. Finally, EM has consolidated
    nuclear materials from around the complex, reducing security
    requirements at a number of labs and former weapons production sites.
    By reducing EM's cleanup footprint, EM is lowering the cost of
    security, surveillance, infrastructure, and overhead costs that would
    otherwise continue for years to come.
        Additional strategies are integrated into cleanup activities that
    are important to the achievement of EM cleanup progress as well as the
    stakeholders and states where cleanup sites are located. These
    strategies include development of technologies that can improve the
    efficiency and effectiveness of the cleanup activity, better use of
    contract types, options and alternatives for specific cleanup
    activities, and integration/optimization of shipping to disposal
    facilities to reduce costs. Most importantly, EM will continue to
    discharge its responsibilities by conducting cleanup within a ``Safe
    Performance of Work'' culture that integrates environmental, safety,
    health, and quality requirements and controls into all work activities.
    This ensures protection to the workers, public, and the environment.

                      KEY ACCOMPLISHMENTS IN THE PAST YEAR

        I would like to take this opportunity to highlight a number of the
    Office of Environmental Management's most recent accomplishments.
    Continuous Improvement in Integrated Safety Management
        One of my highest areas of emphasis has been in leading
    improvements to the organizational, safety, and security culture of EM.
    An organization's culture directly impacts how the organization
    performs. For industrial organizations, and particularly for nuclear
    organizations, having a strong safety and security culture is
    imperative for ensuring the safe and secure performance of high-quality
    work. It must be a fundamental value shared by all members of the
    organization at all levels.
        In 2011, DOE accepted the Defense Nuclear Facilities Safety Board
    recommendation to strengthen the safety culture at the Waste Treatment
    and Immobilization Plant in Hanford. Recognizing the importance of this
    initiative we have expanded our scope to improve safety culture at all
    of our EM sites. Efforts in this area are ongoing, and we have trained
    over 1,000 senior Federal and contractor managers on Leadership for a
    Safety Conscious Work Environment. Early indications are that we are
    seeing a clear recognition by managers of the need to improve the
    communication of expectations that flow throughout our sites and
    headquarters. We have also continued to improve our safety and security
    culture through other ongoing initiatives such as evaluating field site
    safety management, sharing safety lessons learned and best practices,
    and working to improve our security and quality assurance programs
    across all of EM.
        Part of maintaining a strong organizational culture is embracing
    the concepts of continuous improvement and fostering a learning and
    questioning organization. While EM is focusing on efforts to improve
    our culture and is seeing success through our interactions with our
    leadership and employees at our sites, there is more work to be done,
    and this will continue to be a key area of focus for EM.
    Project and Contract Management
        A second area of emphasis has been the improvement of project and
    contract management. EM's project and contract management has long been
    designated a governmental ``high risk area'' by the Government
    Accountability Office (GAO). Key EM reforms in this area include
    implementing policies requiring more front-end planning; ensuring
    Federal project directors and contracting officers have access to
    relevant training to help enhance their project and contract management
    knowledge; improving cost estimating; conducting more frequent project
    reviews by peers and experts in project management to ensure issues are
    identified early and lessons learned are being applied in real-time;
    selecting proper contract types; tying fee strategies to final
    outcomes; and restructuring our portfolio into smaller, better defined
    capital asset projects and non-capital operations activities.
        These reforms are already bearing fruit. On February 14, 2013, GAO
    issued its biennial update to the high risk list. In recognition of
    EM's improvements in contract and project management, GAO narrowed the
    scope of its high risk designation, focusing on EM capital asset
    projects with costs greater than $750 million. In the report, GAO
    recognized EM management for demonstrating ``strong commitment and top
    leadership support for improving contract and project management.'' EM
    will continue the specific project and contract management reforms
    above.
        The Office of Environmental Management is continuing to make
    progress on constructing EM's two largest projects--the Waste Treatment
    and Immobilization Plant (WTP) in Richland, WA, and the Salt Waste
    Processing Facility in Aiken, SC.
        The WTP will treat and immobilize in glass the bulk of
    approximately 56 million gallons of radioactive waste stored in 177
    underground storage tanks at the Hanford site. We have encountered
    several technical and management issues at the Pretreatment Facility
    and the High-Level Waste Facility and are working expeditiously to
    address them. Full construction continues on the Low-Activity Waste
    Facility, Analytical Laboratory and the Balance of Facilities (support
    facilities). The Department has determined to ramp-up construction
    activities in the High-Level Waste Facility in areas not impacted by
    technical issues.
        Over the last several months, the former Energy Secretary and a
    number of top scientists and engineers reviewed many aspects of the
    WTP. Approaches are being evaluated to resolve the issues associated
    with criticality, hydrogen generation, erosion/corrosion, and tank
    mixing issues. Technical teams developed as a result of this review
    draw upon expertise from academia, industry, and the Department's
    national laboratories.
        EM's second largest construction project, the Salt Waste Processing
    Facility (SWPF), will treat the salt portion of the liquid radioactive
    waste inventory at the Savannah River Site. This project and is 69
    percent complete. A pilot version of the treatment plant has been
    operating successfully since 2008, providing high confidence in the
    technical capabilities of SWPF. To date, the pilot plant has processed
    over 3 million gallons of tank waste. Due to delays in the delivery of
    key facility components meeting acceptable quality levels for nuclear
    facilities, including mixing vessels, SWPF is experiencing cost over-
    runs and schedule delays. Since the delivery of the mixing vessels last
    year, we are working closely with our contractor to identify the most
    economical and timely path for completion.
        Finally, I would like to provide an update on a third important EM
    construction project. The Integrated Waste Treatment Unit (more
    commonly known as the Sodium Bearing Waste project) will treat 900,000
    gallons of radioactive liquid waste stored in underground tanks at the
    Idaho National Laboratory. Following the completion of construction,
    the facility began startup testing. However, startup testing was
    suspended in June 2012 to allow detailed evaluation of a system
    pressure event that occurred during cold commissioning. EM is planning
    to resume facility startup operations in early 2014.
        Each of these three construction projects involve the processing,
    treatment and immobilizing high level radioactive/hazardous waste into
    glass or solid carbonate. These projects have been especially
    challenging considering these are first-of-a-kind and one-of-a-kind
    facilities.
    Cleanup Progress
        Thanks in part to the improvements in integrated safety management,
    contract management, and project management, EM has achieved major
    cleanup successes:

             Footprint Reduction. In 2009, the total footprint of
            EM's cleanup sites was 931 square miles. Through January 2013,
            we have reduced that figure by 74 percent, primarily through
            the use of Recovery Act funding to complete the cleanup of
            large areas of the Hanford and Savannah River sites.
             High Level Radioactive Waste. We have also made
            significant progress in the treatment of high-level radioactive
            waste, which represents the most hazardous and costly component
            of EM's cleanup mission. At the Savannah River Site, in fiscal
            year 2012 we achieved closure of two high-level waste tanks--
            the first tanks closed at the site since 1997--and packaged a
            record high of 275 canisters of high level waste in a single
            year at the Defense Waste Processing Facility.
             Transuranic Waste. Finally, we continue to achieve
            major successes with our Nation-wide program for the
            transportation and disposition of transuranic waste. To date,
            we have sent more than 11,000 shipments of this waste to the
            Waste Isolation Pilot Plant in Carlsbad, NM, for disposal.

        EM has achieved significant progress. However, I would also like to
    provide you an update on an issue that has emerged this year. In 2005,
    DOE completed a tank stabilization effort designed to remove much of
    the liquid waste from Hanford's single shell tanks. In February, DOE
    found that one tank continues to leak and five other tanks are showing
    declining liquid level trends that may indicate leaking. Video
    examination of the interior of the tanks is planned in the coming
    months. Both the Department of Energy and the Washington State
    Department of Ecology agree that the leaks pose no immediate health
    threat. Safe storage of tank waste until it is treated for permanent
    disposal is a top priority, and EM is working to further investigate
    the issue and evaluate appropriate corrective actions.

               HIGHLIGHTS OF THE FISCAL YEAR 2014 BUDGET REQUEST

        The fiscal year 2014 EM budget request totals $5.621 billion, which
    is $88.7 million less than the fiscal year 2012 current enacted amount.
    The request includes a $463 million net neutral transfer from Defense
    Environmental Cleanup to the Uranium Enrichment Decontamination and
    Decommissioning Fund for the Budget proposal to reauthorize the Fund.
    The request funds Defense Environmental Cleanup activities at $5.317
    billion for fiscal year 2014. Examples of planned activities and
    milestones for fiscal year 2014 by site-specific categories are:

                          IDAHO NATIONAL LABORATORY, ID
                            [In thousands of dollars]
    ------------------------------------------------------------------------
                 Fiscal Year 2012                 Fiscal Year 2014 Request
    ------------------------------------------------------------------------
    $384,669..................................  $365,010
    ------------------------------------------------------------------------

    Key Accomplishments Planned for Fiscal Year 2014
             Process and ship approximately 4,500 cubic meters of
            contact-handled TRU Waste to the Waste Isolation Pilot Plant.
             Continue sodium-bearing waste treatment operations.
             Maintain tank farm and systems for delivery of sodium
            bearing waste until treatment is complete.

                       LOS ALAMOS NATIONAL LABORATORY, NM
                            [In thousands of dollars]
    ------------------------------------------------------------------------
                 Fiscal Year 2012                 Fiscal Year 2014 Request
    ------------------------------------------------------------------------
    $188,161..................................  $219,789
    ------------------------------------------------------------------------

    Key Accomplishments Planned for Fiscal Year 2014
             Support process towards completion of processing and
            removal of 3,706 cubic meters of above-ground TRU waste (June
            2014 milestone).
             Continue groundwater and remediation activities.
             Continue operation of new oversize modular box line
            and disposition of excess materials and TRU waste.
             Continue disposition of mixed low-level waste/low-
            level waste.
             Support decontamination, decommissioning and
            demolition activities for process-contaminated facilities at
            Technical Area-21.

                            OAK RIDGE RESERVATION, TN
                            [In thousands of dollars]
                    [Includes Safeguards & Security Funding]
    ------------------------------------------------------------------------
                 Fiscal Year 2012                 Fiscal Year 2014 Request
    ------------------------------------------------------------------------
    $218,902..................................  $216,827
    ------------------------------------------------------------------------

    Key Accomplishments Planned for Fiscal Year 2014
             Continue shipments of Consolidated Edison Uranium
            Solidification Project material from the uranium-233 inventory
            in Building 3019A to Nevada for disposal.
             Complete planning and readiness activities for
            processing the remaining uranium-233 inventory in Building
            2026.
             Conduct a screening characterization of the West End
            Mercury Area of Y-12 National Security Complex to refine
            estimates of the nature and extent of mercury contamination and
            to identify areas that will require full characterization and
            mitigation measures.
             Continue operations of liquid, gaseous and process
            waste systems at Oak Ridge National Laboratory.
             Continue Sludge Disposition Build-out Project Design
            at TRU Waste Processing Center for sludge stabilization.
             Continue transfers of transuranic waste to the
            Transuranic Waste Processing Center located at the Oak Ridge
            National Laboratory.
             Continue processing and disposal of contact-handled
            and remote-handled transuranic waste.

                                RICHLAND SITE, WA
                            [In thousands of dollars]
                    [Includes Safeguards & Security Funding]
    ------------------------------------------------------------------------
                 Fiscal Year 2012                 Fiscal Year 2014 Request
    ------------------------------------------------------------------------
    $1,019,121................................  $990,863
    ------------------------------------------------------------------------

    Key Accomplishments Planned for Fiscal Year 2014
             Continue remediation of the 618-10 burial ground and
            continue remediation of other waste sites along the Columbia
            River.
             Initiate deactivation, decontamination,
            decommissioning and demolition of the high-risk Building 324
            and the remediation of soil underneath.
             Continue deactivation and decommissioning of
            facilities in the Plutonium Finishing Plant complex, including
            deactivating and preparing for dismantlement of the above grade
            portions of 234-5Z, 243-Z, and other facilities.
             Treat and dispose of liquid waste from site generators
            and dispose treated liquid effluents from the 200 Area Liquid
            Effluent Facility.

                         OFFICE OF RIVER PROTECTION, WA
                            [In thousands of dollars]
    ------------------------------------------------------------------------
                 Fiscal Year 2012                 Fiscal Year 2014 Request
    ------------------------------------------------------------------------
    $1,182,010................................  $1,210,216
    ------------------------------------------------------------------------

    Key Accomplishments Planned for Fiscal Year 2014
             Continue construction of Low Activity Waste,
            Laboratory, and Balance of Facilities and complete construction
            of Analytical Laboratory.
             Continue activities for the Design Completion Team to
            resolve WTP technical issues and align the preliminary
            documented safety analysis with the design to allow for
            resumption of HLW construction in all areas of the facility by
            the end of 2014.
             Continue single shell tank retrieval activities in
            order to complete all C Farm retrievals by the end of 2014.
             Continue AY/AZ Farm ventilation system upgrades and
            Feed Delivery System activities.

                             SAVANNAH RIVER SITE, SC
                            [In thousands of dollars]
                    [Includes Safeguards & Security Funding]
    ------------------------------------------------------------------------
                 Fiscal Year 2012                 Fiscal Year 2014 Request
    ------------------------------------------------------------------------
    $1,316,922................................  $1,209,457
    ------------------------------------------------------------------------

    Key Accomplishments Planned for Fiscal Year 2014
             Produce 100 canisters at the Defense Waste Processing
            Facility.
             Continue closure activities for Tanks 5 and 6.
             Process 3 million gallons of salt tank waste and
            dispose over 5 million gallons of low-activity waste onsite in
            the Saltstone Disposal Units.
             Continue construction of the Salt Waste Processing
            Facility.
             Continue receipt of Foreign/Domestic Research Reactor
            Used Nuclear Fuel and implement Augmented Monitoring and
            Condition Assessment Program of Used Nuclear Fuel in wet
            storage.
             Store and ship non-Moxable plutonium to the Waste
            Isolation Pilot Plant.
             Continue processing of low-level and mixed low-level
            radioactive waste and disposal operations in E Area.
             Continue Building 235-F Risk Reduction scope to meet
            Implementation Plan for Defense Nuclear Facilities Safety
            Board's Recommendation 2012-1.

                         WASTE ISOLATION PILOT PLANT, NM
                            [In thousands of dollars]
                    [Includes Safeguards & Security Funding]
    ------------------------------------------------------------------------
                 Fiscal Year 2012                 Fiscal Year 2014 Request
    ------------------------------------------------------------------------
    $218,179..................................  $208,367
    ------------------------------------------------------------------------

    Key Accomplishments Planned for Fiscal Year 2014
             Support transport and disposal of remote-handled and
            contact-handled TRU waste at the Waste Isolation Pilot Plant. .
            Continue Central Characterization Project for TRU waste at Los
            Alamos National Laboratory, Idaho National Laboratory and Oak
            Ridge National Laboratory. . Maintain capability for receipt
            and disposal for up to 21 shipments per week of contact-handled
            and remote-handled TRU for 41 weeks.
                                   conclusion
        Mr. Chairman, Ranking Member Sessions, and members of the
    subcommittee, I am honored to be here today representing the Office of
    Environmental Management. EM is committed to achieving its mission and
    will continue to apply innovative environmental cleanup strategies to
    complete work safely, on schedule, and within cost thereby
    demonstrating value to the American taxpayers. I am pleased to answer
    any questions you may have.

        Senator Udall. Thank you, Mr. Huizenga. I think you put
    your finger on it. I think at some level the GAO's mission is
    to put themselves out of business. So anything you can do to
    make that a possibility, I am sure they would appreciate it.
        Mr. Trimble?

    STATEMENT OF MR. DAVID C. TRIMBLE, DIRECTOR, NATIONAL RESOURCES
           AND ENVIRONMENT, GOVERNMENT ACCOUNTABILITY OFFICE

        Mr. Trimble. Thank you. Chairman Udall and members of the
    subcommittee, my testimony today will focus on our recent and
    ongoing work on cost estimating practices and budgetary
    information at NNSA and EM for projects and programs.
        While DOE has taken a number of steps to improve its
    management of projects, all of the ongoing major projects
    continue to experience significant cost increases and schedule
    delays. Uranium Processing Facility costs have increased seven-
    fold up to $6.5 billion for a project with reduced scope and 11
    years added to the schedule. CMRR costs have increased nearly
    six-fold up to $5.8 billion with a total delay, counting the
    deferral announced last year, of up to 12 years. The Waste
    Treatment and Immobilization Plant has tripled in cost over $12
    billion with a decade added to its schedule.
        Regarding cost estimating, our preliminary observations
    from ongoing work we are doing for this committee include the
    following. DOE has not established a cost estimating policy for
    capital projects. DOE's project management order does not meet
    cost estimating best practices. NNSA and DOE cost estimating
    guidance does not fully meet GAO's best practices criteria for
    cost estimating.
        While capital asset projects are highly visible, about 90
    percent of NNSA's budget is devoted to operating programs. Our
    preliminary findings examining cost estimating practices for
    programs indicate that DOE and NNSA may lack specific cost
    estimating requirements or guidance for programs. For example,
    NNSA officials responsible for the Plutonium Disposition
    Program told us that they have constructed a life cycle cost
    estimate of about $24 billion for the program. They noted,
    however, that there is no DOE or NNSA requirement prescribing
    how such an estimate should be developed, nor is there a
    requirement that it be independently reviewed.
        In regard to budgetary information, in June 2010, we
    examined NNSA's program to operate and maintain weapons
    facilities and infrastructure and found that NNSA could not
    accurately identify the total cost for this congressionally
    directed program. NNSA's budget justification understated these
    costs by over $500 million.
        In July 2012, we found deficiencies in NNSA's validation of
    budget requests for its programs and concluded that these
    weaknesses impacted the credibility and reliability of those
    budget estimates. According to NNSA officials, the agency's
    experience and trust in these contractors minimized the need
    for such review.
        In closing, let me note that without accurate cost and
    budget information, DOE is not in a position to effectively
    manage the critical projects and programs carried out by its
    contractors. With over $180 billion planned to be spent at NNSA
    alone over the next 18 years, Congress also needs accurate and
    reliable information on these costs as it confronts difficult
    budgetary decisions. Without improvements in this information
    and DOE's capabilities to use and effectively apply this
    information, DOE will continue to be surprised by cost and
    schedule problems and will continue to be forced to manage
    these problems through reactive and stop gap measures such as
    suspending programs, reducing the scope of critical projects,
    or robbing Peter to pay Paul.
        Thank you. I am happy to answer any questions.
        [The prepared statement of Mr. Trimble follows:]

                    Prepared Statement by Mr. David Trimble

        Chairman Udall, Ranking Member Sessions, and members of the
    subcommittee: Thank you for the opportunity to discuss our work on
    project and program cost estimating and related budget information in
    the National Nuclear Security Administration (NNSA), a separately
    organized agency within the Department of Energy (DOE), and DOE's
    Office of Environmental Management (EM). In fiscal year 2012, NNSA and
    EM received appropriations of over $16 billion to ensure the safety,
    security, and reliability of the U.S. nuclear weapons stockpile and to
    address the environmental cleanup of Cold War sites. Together, NNSA and
    EM have outlined plans that could commit American taxpayers to $450
    billion in programs and projects over decades to address their
    missions. Specifically, in 2011, NNSA put forward plans to modernize
    the U.S. nuclear security enterprise at a cost of $88 billion over the
    next decade and a total cost of over $180 billion to do so through
    2031.\1\ In 2012, DOE estimated that its total liability for
    environmental cleanup, the largest component of which is managed by EM,
    is almost $270 billion and includes responsibilities that could
    continue beyond the year 2087.\2\ In a time of fiscal constraint,
    Congress needs high-quality cost and budget information upon which to
    make decisions about NNSA's and EM's projects and programs. Our recent
    and ongoing work on cost estimating, budget validation, and program
    expenditures highlight some of the challenges Congress faces in getting
    reliable and accurate cost information from NNSA and EM that it can use
    to make cost-informed decisions and effectively conduct oversight.\3\
    ---------------------------------------------------------------------------
        \1\ U.S. Department of Energy, Fiscal Year 2012 Stockpile
    Stewardship and Management Plan (Washington, DC: Apr. 15, 2011).
        \2\ U.S. Department of Energy, Fiscal Year 2012 Agency Financial
    Report, DOE/CF-0081 (Washington, DC: Nov. 14, 2012).
        \3\ See, for example, GAO, Department of Energy: Actions Needed to
    Develop High-Quality Cost Estimates for Construction and Environmental
    Cleanup Projects, GAO-10-199 (Washington, DC: Jan. 14, 2010); GAO,
    Nuclear Weapons: Actions Needed to Identify Total Costs of Weapons
    Complex Infrastructure and Research and Production Capabilities,GAO-10-
    582 (Washington, DC: June 21, 2010); and GAO, Modernizing the Nuclear
    Security Enterprise: NNSA's Reviews of Budget Estimates and Decisions
    on Resource Trade-offs Need Strengthening, GAO-12-806 (Washington, DC:
    July 31, 2012).
    ---------------------------------------------------------------------------
        NNSA and EM oversee contracts for the execution of both projects,
    including capital asset acquisitions, and programs central to the
    achievement of their missions. DOE defines a capital asset acquisition
    project as having a defined start and end point with a cost that
    includes both purchase price and all other costs incurred to bring it
    to a form and location suitable for its intended use. Capital asset
    project costs exclude operating expenses that are part of routine
    operations and maintenance functions. Examples of ongoing DOE capital
    asset projects include NNSA's Uranium Processing Facility at the Y-12
    National Security Complex in Tennessee--currently estimated to cost up
    to $6.5 billion--and EM's Waste Treatment and Immobilization Plant in
    Washington, currently estimated to cost $13.4 billion. While capital
    asset projects are a visible part of DOE's budget, these projects
    comprise a relatively small portion of the total budget. In fiscal year
    2012, capital asset projects comprised just under 10 percent of NNSA's
    budget, and approximately 90 percent of that budget was for operating
    programs. DOE defines a program as an organized set of activities
    directed toward a common purpose or goal and characterized by a
    strategy for accomplishing one or more definite objectives. A program
    includes routine operations and maintenance costs and can include
    projects in its scope. An example of an ongoing program is NNSA's
    Tritium Readiness Program--a program to produce a steady supply of
    tritium, a key isotope used in nuclear weapons--that has had an annual
    funding requirement of about $70 million.
        For NNSA, work activities on both projects and programs are largely
    carried out by management and operating (M&O) contractors at NNSA's
    eight government-owned, contractor-operated sites.\4\ For EM, with a
    remaining environmental cleanup mission covering 17 sites in 11 States,
    cleanup work activities are carried out by contractors as projects,
    such as by Washington River Protection Solutions for the operation of
    nuclear waste tanks at the Hanford Site in Washington.
    ---------------------------------------------------------------------------
        \4\ M&O contracts are agreements under which the Federal Government
    contracts for the operation, maintenance, or support, on its behalf, of
    a government-owned or -controlled research, development, special
    production, or testing establishment wholly or principally devoted to
    one or more of the major programs of the contracting Federal agency.
    Federal Acquisition Regulation, 48 C.F.R. Sec.  17.601. Specifically,
    NNSA manages three national nuclear weapons design laboratories--
    Lawrence Livermore National Laboratory in California, Los Alamos
    National Laboratory in New Mexico, and Sandia National Laboratories in
    New Mexico and California. It also manages four nuclear weapons
    production plants--the Pantex Plant in Texas, the Y-12 National
    Security Complex in Tennessee, the Kansas City Plant in Missouri, and
    the Tritium Extraction Facility at DOE's Savannah River Site in South
    Carolina. NNSA also manages the Nevada National Security Site, formerly
    known as the Nevada Test Site.
    ---------------------------------------------------------------------------
        For decades, we have reported on the status of DOE's major projects
    (i.e., those costing $750 million or more) and programs and have
    repeatedly identified project cost overruns and schedule delays, as
    well as missed programmatic milestones. For example, in November 1996,
    we reported that, as of June 1996, most of DOE's completed major
    projects and at least half of its 34 ongoing projects were experiencing
    cost overruns and/or schedule delays.\5\ Thirteen years later in March
    2009, we testified that DOE had added nearly $14 billion and 45 years
    to its initial cost and schedule estimates of then ongoing construction
    projects, and it added an additional $25 billion to $42 billion and an
    additional 68 to 111 years to initial cost and schedule estimates of
    ongoing environmental cleanup projects.\6\ Further, in our March 2009
    report, we found that NNSA was able to meet its refurbishment schedule
    for a life extension program only by changing the objectives of the
    program and, among other things, reducing the number of refurbishments
    needed for program completion.\7\ In February of this year, NNSA and EM
    were again included on GAO's High-Risk List in recognition of the
    potential for vulnerabilities to fraud, waste, abuse, and mismanagement
    in contract administration and management of major projects.\8\
    ---------------------------------------------------------------------------
        \5\ GAO, Department of Energy: Opportunity to Improve Management of
    Major System Acquisitions. GAO/RCED-97-17 (Washington, DC: Nov. 26,
    1996).
        \6\ GAO, Department of Energy: Contract and Project Management
    Concerns at the National Nuclear Security Administration and Office of
    Environmental Management, GAO-09-406T (Washington, DC: Mar. 4, 2009).
        \7\ The end of the Cold War caused a dramatic shift in how the
    Nation maintains nuclear weapons. Instead of designing, testing, and
    producing new nuclear weapons, the strategy shifted to maintaining the
    existing nuclear weapons stockpile indefinitely. Life extension
    programs extend, through refurbishment, the operational lives of
    weapons in the nuclear stockpile by 20 to 30 years and certify these
    weapons' military performance requirements without underground nuclear
    testing. NNSA is currently conducting life extension programs for
    multiple weapon types in the U.S. stockpile, including the Air Force's
    B61 gravity bomb. GAO, Nuclear Weapons: NNSA and DOD Need to More
    Effectively Manage the Stockpile Life Extension Program, GAO-09-385
    (Washington, DC: Mar. 2, 2009).
        \8\ GAO, High-Risk Series: An Update,GAO-13-283 (Washington, DC:
    February 2013). In our 2013 High-Risk Update, we narrowed the focus of
    NNSA's and EM's high-risk designation to focus on major projects, those
    with individual values of $750 million or greater.
    ---------------------------------------------------------------------------
        In 2008, DOE completed an effort to document its contract and
    project management challenges, which involved identifying issues that
    significantly impeded the department's ability to complete projects
    within budget and on schedule. DOE undertook this exercise--known as a
    root-cause analysis--as part of its effort to be removed from our list
    of agencies at high risk for fraud, waste, abuse, and mismanagement.
    The top contract and project management issue identified in that root-
    cause analysis was that DOE often does not complete front-end planning
    to an appropriate level before establishing a project's performance
    baseline--a project's cost, schedule, and scope--including for cost
    estimates and budget planning. According to cost estimating best
    practices compiled in our March 2009 Cost Estimating and Assessment
    Guide,\9\ the most rigorous method reviewers have in validating a
    project's cost estimate is the independent cost estimate. Generated by
    an entity that has no stake in the approval of a project, an
    independent cost estimate provides an independent validation of
    expected project costs, according to our cost-estimating guide. An
    independent cost estimate is usually developed based on the same
    technical parameters as the project team's estimate, so the estimates
    are comparable. Conducting an independent cost estimate is especially
    important at major milestones because it provides senior decisionmakers
    with a more objective assessment of the likely cost of a project. In
    mid-2008, DOE adopted a corrective action plan designed to mitigate the
    issues identified in the root-cause analysis. The corrective action
    plan included a set of actions designed to establish and implement a
    ``Federal independent government cost estimating capability'' to
    address the issues it identified related to cost estimating.
    ---------------------------------------------------------------------------
        \9\ The guide is a compilation of cost-estimating best practices
    drawn from across industry and government. GAO, GAO Cost Estimating and
    Assessment Guide: Best Practices for Developing and Managing Capital
    Program Costs, GAO-09-3SP (Washington, DC: March 2009).
    ---------------------------------------------------------------------------
        Since that time, DOE has taken steps to improve the cost-estimating
    aspects of contract and project management in NNSA and EM, but
    weaknesses persist. In a time of fiscal constraint, Congress needs
    high-quality cost information upon which to make decisions about NNSA's
    and EM's projects and programs. A realistic cost estimate provides a
    basis for accurate budgeting and effective resource allocation, which
    increases the probability of a project's or program's success in
    meeting its goals. My testimony today is based primarily on reports we
    issued from January 2010 to February 2013. Specifically, I will focus
    my testimony on: (1) our prior findings on cost-estimating practices
    for NNSA's and EM's capital asset projects, as well as preliminary
    observations from our ongoing work for this subcommittee on NNSA cost-
    estimating practices for such projects; and (2) our prior findings on
    cost estimating and related budget information for NNSA's programs, as
    well as preliminary observations from our ongoing work for this
    subcommittee on NNSA's cost-estimating practices for such programs.
    Detailed information on our scope and methodology for our prior work
    can be found in these reports.
        To develop our preliminary observations, we reviewed DOE and NNSA
    policies, orders, and guidance related to preparing and reviewing cost
    estimates, as well as past GAO reports. We interviewed DOE, NNSA, and
    contractor officials to discuss the requirements and guidance used to
    prepare and review these estimates. We are conducting our ongoing work
    in accordance with generally accepted government auditing standards.
    Those standards require that we plan and perform the audit to obtain
    sufficient, appropriate evidence to provide a reasonable basis for our
    findings and conclusions based on our audit objectives. We believe that
    the evidence obtained provides a reasonable basis for our findings and
    conclusions based on our audit objectives. We obtained DOE's and NNSA's
    views on the new information in our testimony concerning our ongoing
    work on DOE's and NNSA's cost-estimating practices.

                                   BACKGROUND

        NNSA relies primarily on the requirements in DOE Order 413.3B for
    planning and executing projects, from identification of need through
    project completion.\10\ This project management order requires, among
    other things, that cost estimates be established for these projects,
    and an independent review of these estimates be conducted for larger
    projects. For example, for projects with a total cost of greater than
    $100 million, DOE's Office of Acquisition and Project Management is
    required to validate the accuracy and completeness of a project's
    performance baseline, including its estimated cost, at certain
    important milestones. DOE's project management order establishes five
    major milestones--or ``critical decision points''--that span the life
    of a project as follows:
    ---------------------------------------------------------------------------
        \10\ DOE Order 413.3B, Program and Project Management for the
    Acquisition of Capital Assets, was issued in November 2010. It
    supersedes earlier DOE Orders 413.3A and 413.3.

             Milestone 0: Approve mission need.
             Milestone 1: Approve alternative selection and cost
            range. At this milestone, DOE completes the conceptual design,
            selects its preferred approach, and approves the project's
            preliminary cost range.
             Milestone 2: Approve the performance baseline--defined
            as a project's cost, schedule, and scope (the activities needed
            to achieve project goals). At this milestone, DOE completes its
            preliminary design and develops a definitive cost estimate,
            which is no longer a range. This cost estimate is to be used
            for establishing the project's funding profile throughout
            construction, and it informs annual budget requests.
             Milestone 3: Approve the start of construction.
             Milestone 4: Approve the start of operations or
            project completion.

        DOE's project management order specifies the requirements that must
    be met for a project, along with the documentation necessary, to move
    past each project milestone; the order also requires that DOE senior
    management review the supporting documentation and approve the project
    at each milestone. DOE also provides suggested approaches for meeting
    the requirements contained in its project management order through
    additional guidance that is not mandatory. NNSA has supplemental
    requirements and guidance for establishing and reviewing project cost
    estimates, including requirements for conducting independent cost
    estimates, and a cost-estimating guide that provides additional
    suggestions on preparing and reviewing cost estimates.
        With respect to operating programs, DOE Order 130.1 on program
    budget formulation--approved in 1995 and listed as current on DOE's
    website for Directives, Delegations, and Requirements--outlines the
    requirements for the department's annual budget formulation process,
    including that budget requests for operating programs ``shall be based
    on cost estimates that have been fully reviewed and deemed reasonable''
    by the cognizant program organization. To this end, DOE's budget
    formulation order recognizes that operating programs' cost estimates
    bear a direct relationship to the future budget estimates for these
    programs. Further, consistent with Federal Accounting Standards
    Advisory Board guidance, NNSA is required to provide reliable and
    timely information on the full cost of its programs because this
    information is crucial for effective management of government
    operations and for budget oversight.\11\ To develop budget estimates
    for operating programs, NNSA is required under section 3252 of the
    National Defense Authorization Act for Fiscal Year 2000--the NNSA Act--
    to develop a planning, programming, and budgeting process that operates
    under sound financial and fiscal management principles.\12\ Beginning
    in 2002, NNSA issued policies that identify the responsibilities of
    NNSA management, program and site offices, and contractors throughout
    the agency's budget cycle, including for validating programs' budget
    requests by reviewing aspects of cost estimating.\13\ According to
    NNSA's policy, the cycle is composed of four phases--planning,
    programming, budgeting, and evaluation (PPBE)--and their associated
    activities, which together provide a framework for the agency to plan,
    prioritize, fund, and evaluate its program activities. While these
    phases appear to be sequential, the process is continuous and
    concurrent because of the amount of time required to develop priorities
    and review resource requirements.
    ---------------------------------------------------------------------------
        \11\ Federal Accounting Standards Advisory Board, Statement of
    Federal Financial Accounting Standards No., 4, Managerial Cost
    Accounting Standards and Concepts (Washington, DC: July 31, 1995).
        \12\ NNSA was created by the National Defense Authorization Act for
    Fiscal Year 2000 (Pub. L. No. 106-65, Sec. 3201 et seq. [1999]).
        \13\ See GAO, National Nuclear Security Administration: Additional
    Actions Needed to Improve Management of the Nation's Nuclear Programs,
    GAO-07-36 (Washington, DC: Jan. 19, 2007). In 2008, NNSA revised many
    of these policies and issued others in response to our findings in 2007
    of deficiencies in how the agency ensures the validity of its budget
    estimates and how it decides to allocate its resources.

             Planning. NNSA is to identify the goals it needs to
            achieve over the next 5 years and the program activities needed
            to meet those goals.
             Programming. NNSA is to determine which program
            activities and funding levels it will include in its next
            budget proposal to DOE. This determination is based on analysis
            of the activities' estimated costs, as well as the need to meet
            the NNSA goals defined in the planning process. To determine
            these activities, NNSA program offices are to work with their
            contractors to obtain estimates for the cost of the program
            activities identified in the planning phase.
             Budgeting. NNSA is to integrate its planning and
            programming priorities into DOE's departmental budget process
            by: (1) submitting its proposed budget to DOE and participating
            in a strategic review process; (2) validating its budget
            request by, in part, reviewing the cost-estimating practices
            used by the NNSA contractors and program offices; and (3)
            executing the budget and controlling funds to achieve the
            priorities established in the programming phase and maintain
            fiscal limits.
             Evaluation. NNSA is to employ an ongoing cycle of
            evaluations to review program performance.

        Accurately identifying the activities necessary to conduct a
    program is a key aspect of PPBE's programming phase. NNSA documents the
    activities associated with a program, as well as the sites responsible
    for conducting these activities, in work breakdown structures--
    management tools used to identify the work activities that completely
    define a program. We published best practices for establishing work
    breakdown structures in our March 2009 cost-estimating guide.\14\ Among
    other things, these best practices discuss establishing work breakdown
    structures that allow a program to track cost by defined deliverables,
    promote accountability by identifying work products that are
    independent of one another, and provide a basis for identifying
    resources and tasks for developing a program cost estimate. The ability
    to generate reliable cost estimates is a critical function, and a
    program's cost estimate is often used to establish its budgets.
    ---------------------------------------------------------------------------
        \14\ GAO-09-3SP.
    ---------------------------------------------------------------------------
       observations on cost estimating practices for nnsa and em projects
        For more than a decade, we have reported on the challenges NNSA and
    EM have faced in meeting their projects' cost performance targets as
    developed in cost estimates and for ensuring that the cost estimates
    developed are based on sound assumptions. In our most recent High-Risk
    Update, we reported that, as of August 2012, NNSA was managing three
    major projects with estimated costs totaling as much as $17.2 billion
    and that EM was managing seven major projects with estimated costs
    totaling as much as $48.5 billion.\15\ We examined these 10 projects,
    but we were only able to analyze changes in cost estimates for 7 of
    them because of limitations in the data. For these seven projects, we
    determined that DOE has added as much as $16.5 billion to original cost
    estimates with further cost increases anticipated. While each of these
    projects has faced significant technical execution challenges, the
    extent of their cost growth as compared with project estimates calls
    into question the quality of those original estimates. For example:
    ---------------------------------------------------------------------------
        \15\ GAO-13-283.

             We reported in February 2011 that NNSA's project to
            design and construct a new Uranium Processing Facility at the
            Y-12 National Security Complex in Tennessee had experienced
            nearly sevenfold cost growth from its 2004 estimate to the
            current estimate of from $4.2 to $6.5 billion.\16\ Since our
            February 2011 report, the facility is to be redesigned and
            enlarged to correct issues concerning processing equipment at
            an additional cost of $540 million, and the initial scope of
            the project has been significantly reduced. According to NNSA
            officials, the initial cost estimate for the Uranium Processing
            Facility, as well as subsequent revisions were based on an
            estimate to construct a less complex facility and assumed a
            funding profile where annual appropriations were not subject to
            budgetary constraints.
    ---------------------------------------------------------------------------
        \16\ GAO, High-Risk Series: An Update. GAO-11-278 (Washington, DC:
    February 2011).
    ---------------------------------------------------------------------------
             We reported in March 2012 that NNSA's project to
            design and construct a new plutonium facility at Los Alamos
            National Laboratory in New Mexico had experienced a nearly
            sixfold increase from $3.7 billion to $5.8 billion before being
            deferred for at least 5 years.\17\ We found that the facility's
            original design may not have met all of the mission needs
            identified.
    ---------------------------------------------------------------------------
        \17\ GAO, Modernizing the Nuclear Security Enterprise: New
    Plutonium Facility at Los Alamos May Not Meet All Mission Needs,GAO-12-
    337 (Washington, DC: Mar. 26, 2012).
    ---------------------------------------------------------------------------
             In December 2012, we reported that the estimated cost
            to construct EM's Waste Treatment and Immobilization Plant at
            the Hanford Site in Washington has tripled to $13.4 billion
            since its inception in 2000.\18\ Significant technical
            challenges remain unresolved, contributing to uncertainty as to
            whether the project will operate safely and effectively.
    ---------------------------------------------------------------------------
        \18\ GAO, Hanford Waste Treatment Plant: DOE Needs to Take Action
    to Resolve Technical and Management Challenges,GAO-13-38 (Washington,
    DC: Dec. 19, 2012).

        DOE's approach to managing the work its contractors perform,
    including developing project cost estimates, has been a challenge for
    30 years. In 1982, we reported that DOE did not have sufficient
    guidance to provide to its contractors for developing cost
    estimates.\19\ DOE subsequently implemented a cost-estimating policy
    that increased oversight by, among other things, placing a
    headquarters-based office in charge of cost estimating and requiring it
    to conduct independent cost estimates. The policy also directed DOE to
    establish guidance that outlined procedures to be used by contractors
    when generating estimates and by DOE officials reviewing them. In the
    mid-1990s, however, as part of a governmentwide management reform
    movement, DOE rescinded its cost-estimating policy and replaced it with
    a less prescriptive one that did not contain specifics on cost
    estimating but rather focused on managing the life cycles of the
    department's physical assets.
    ---------------------------------------------------------------------------
        \19\ GAO, Further Improvements Needed in the Department of Energy
    for Estimating and Reporting Project Costs. GAO/MASAD-82-37
    (Washington, DC: May 26, 1982).
    ---------------------------------------------------------------------------
        In January 2010, we reported on DOE's project cost-estimating
    practices.\20\ We found that DOE continued to lack a cost-estimating
    policy and that the cost-estimating guide it developed in the 1990s
    remained in effect.\21\ We also found that the guide was out of date
    and did not contain important components. For example the guide
    assigned responsibilities to offices that no longer existed and was
    based on policies that had been canceled. In addition, we found that
    the guide did not contain sufficient information to help ensure that a
    cost estimator following the guide would successfully create a high-
    quality cost estimate. However, we also found that DOE was taking steps
    to improve its cost-estimating practices. For example, DOE established
    the Office of Cost Analysis (OCA) in 2008 to improve cost-estimating
    capabilities and better ensure that project cost estimates are reliable
    by providing a new independent cost-estimating capability.
    ---------------------------------------------------------------------------
        \20\ GAO-10-199.
        \21\ U.S. Department of Energy, Cost Estimating Guide, DOE G 430.1-
    1 (Washington, DC: Mar. 29, 1997).
    ---------------------------------------------------------------------------
        Further, EM acted to place cost estimators at its large sites and
    establish an internal cost-estimating office capable of providing cost-
    estimating assistance primarily to its smaller sites. In addition, NNSA
    adopted a policy that, among other things, specified when independent
    cost estimates should be conducted. Our report recommended, among other
    things, that DOE issue a revised cost-estimating policy and updated
    guidance as soon as possible, requiring that an independent cost
    estimate be conducted for major projects at Milestones 1, 2, and 3. DOE
    generally concurred with the recommendations we made in this report but
    did not concur with conducting an independent cost estimate at all
    three of these milestones. Rather, at this time DOE explained that its
    new policy would require an independent cost estimate for Milestones 1
    and 2, but not for Milestone 3 unless warranted by risk and performance
    indicators or required by senior officials.
        We are conducting an ongoing review of the department's and NNSA's
    cost-estimating practices for this subcommittee. In particular, we are
    reviewing the extent to which NNSA's current cost estimating
    requirements and guidance for projects and programs align with cost-
    estimating best practices. Preliminary observations from our ongoing
    work indicate that departmental and NNSA cost-estimating practices for
    projects and programs need revision to align with cost-estimating best
    practices in our 2009 guide.\22\ Our ongoing review, in many ways,
    picks up where our January 2010 report left off. After initially
    concurring with most of the recommendations we made in that report to
    improve the department's cost-estimating practices, DOE followed
    through on some of our recommendations, such as requiring an
    independent cost estimate for Milestone 2 for projects with a projected
    cost of $100 million or more; however, other actions appear to fall
    short of what is needed to ensure that DOE's cost-estimating practices
    fully adhere to best practices. Our ongoing work is focused on several
    aspects of DOE and NNSA's cost-estimating requirements and guidance,
    including the following:
    ---------------------------------------------------------------------------
        \22\ To evaluate whether NNSA is meeting generally accepted
    practices, we relied on our cost-estimating guide, GAO-09-3SP.

             The department may have a continuing need for a cost-
            estimating policy. DOE has not established a cost-estimating
            policy. DOE's 2008 Root-Cause Analysis identified an
            insufficient independent cost-estimating capability as one of
            the top five reasons that DOE was unable to complete projects
            on cost and schedule. The analysis found that not having a
            cost-estimating policy was one of the root causes contributing
            to problems with cost estimating. DOE tasked OCA with, among
            other things, implementing actions to improve cost estimating
            within DOE, including reestablishing a cost-estimating policy
            and updating associated guidance. As we previously reported,
            having a cost-estimating policy would establish roles and
            responsibilities for those preparing, reviewing, and updating
            all types of cost estimates.\23\ Such a policy would also
            identify when different cost estimates would be conducted,
            while also serving as a mechanism for providing standardized
            cost-estimating procedures to agency officials and contractors.
            DOE subsequently disbanded OCA and, instead of issuing a
            specific cost-estimating policy, chose instead to revise its
            project management order and supplemental guidance that sets
            requirements and provides suggestions on how to manage capital
            asset acquisition projects. While the revisions to the order
            and guide included some provisions to improve project cost-
            estimating practices, the project management order and
            supplemental guide only apply to activities involving capital
            asset acquisition projects and do not apply to the broader
            range of departmental activities involving cost estimating.\24\
            As part of our ongoing work, we will examine whether
            establishing a departmental cost-estimating policy that would
            apply to all departmental activities--including operating
            programs and noncapital asset projects, rather than just
            capital asset projects--could contribute to improvements in
            departmental cost estimating.\25\ For example, information on
            the costs of program activities can be used as a basis to
            estimate future costs in preparing and reviewing budgets.
    ---------------------------------------------------------------------------
        \23\ GAO-10-199.
        \24\ According to DOE's capital asset acquisition order, capital
    asset acquisition projects typically include planning and execution of
    construction, assembly, renovation, modification, environmental
    renovation, decontamination and decommissioning, large capital
    equipment, and technology development activities.
        \25\ Noncapital asset projects may be managed as operating
    projects. Examples of such projects include stabilization, packaging,
    storage, transportation, and disposition of waste and nuclear materials
    and facility shutdown and deactivation activities.
    ---------------------------------------------------------------------------
             The department's revised project management order
            appears not to meet cost-estimating best practices. Our
            preliminary observations indicate that as we found in 2010,
            DOE's project management order continues not to meet cost-
            estimating best practices.\26\ We noted in our 2010 report that
            this order did not specify: (1) how cost estimates should be
            developed, (2) which phases of a project should be included in
            the estimate, (3) how the estimate should be maintained
            throughout the life of a project, and (4) when an independent
            cost estimate should be prepared. DOE revised its order in
            November 2010 to, among other things, include a requirement
            that an independent cost estimate be prepared prior to the
            approval of Milestone 2 for projects with total project costs
            equal to or greater than $100 million. This revision partially
            addresses the issue involving independent cost estimates but
            does not fully align with best practices that propose
            independent cost estimates should also be prepared for
            Milestones 1 and 3.\27\ Beyond this revision, DOE's revised
            order does not address any of the other shortcomings we
            reported on in 2010 as noted above. Our ongoing work will
            include a more detailed assessment of how this order could
            better align with cost-estimating best practices.
    ---------------------------------------------------------------------------
        \26\ GAO-10-199.
        \27\ Section 310 of the Consolidated Appropriations Act, 2012
    requires a separate independent cost estimate to be developed prior to
    milestones 2 and 3 for projects under DOE's project management order
    where the total project cost exceeds $100 million. (Pub. L. No. 112-74,
    125 Stat 878 (2011)).
    ---------------------------------------------------------------------------
             NNSA and DOE cost-estimating guidance may not fully
            align with cost-estimating best practices. NNSA and DOE issued
            cost-estimating guides in 2010 and 2011, respectively, as part
            of efforts to improve cost-estimating practices. Our
            preliminary observations on these guides show that each
            generally aligns with cost-estimating best practices but also
            falls short in a few areas. For example, our preliminary
            observations on NNSA's 2010 guide shows that it meets or
            substantially meets 8 of the 12 criteria in our 2009 cost-
            estimating guide \28\ and that it partially or minimally meets,
            four other criteria--these other criteria are in the areas of
            determining the structure of the estimate, conducting risk and
            uncertainty analysis, conducting sensitivity analyses, and
            presenting the estimate to management for approval. Our ongoing
            review will include a more detailed assessment of the 2010 NNSA
            and 2011 DOE guides and the extent to which they align with
            cost-estimating best practices.
    ---------------------------------------------------------------------------
        \28\ GAO-09-3SP.
    ---------------------------------------------------------------------------
             Other NNSA actions to improve cost-estimating
            practices may not align with cost-estimating best practices.
            NNSA has taken actions in recent years to improve its cost-
            estimating capabilities, but these actions may not fully
            reflect cost-estimating best practices. These actions have
            included: (1) issuing a policy in 2009 that defines
            requirements for conducting independent cost estimates; and (2)
            issuing separate guidance in 2012 to require that preliminary
            design for high-hazard nuclear facilities be at least 90
            percent complete prior to the establishment of a project
            performance baseline.\29\ With respect to NNSA's policy for
            conducting independent cost estimates, we found that the policy
            provides NNSA the discretion to conduct independent cost
            estimates for projects with estimated total costs below $100
            million at Milestone 2. NNSA officials explained that a
            proposed revision to this policy would make these reviews
            mandatory for Milestone 2. While the revised policy may align
            with best practices for conducting independent cost estimates
            at Milestone 2, it may not reflect best practices that also
            propose conducting these reviews at Milestones 1 and 3. NNSA's
            guidance for completing 90 percent of the design for high-
            hazard nuclear facilities before establishing a performance
            baseline states its objective is to ensure that a highly
            credible cost estimate is developed prior to establishing a
            performance baseline. Our preliminary observations show that
            other projects may benefit from the completion of 90 percent of
            their preliminary designs, regardless of the extent to which
            the project is considered high-hazard. In addition, we have
            observed that NNSA's guidance to implement this requirement is
            articulated in an NNSA memo that has not yet been translated
            into official NNSA policy. According to NNSA officials, the 90
            percent design requirement will be incorporated into the
            revision to the independent cost estimating policy. Our ongoing
            work will further examine these policies and the extent to
            which they align with cost estimating best practices.
    ---------------------------------------------------------------------------
        \29\ DOE regulations define three categories of high-hazard nuclear
    facilities according to their potential to produce significant
    radiological consequences from an event that could either: (1) extend
    beyond the boundaries of a DOE site, (2) remain within the boundaries
    of a site, or (3) remain within the immediate vicinity.
    ---------------------------------------------------------------------------
       observations on cost estimating and information for nnsa programs
        In June 2010, we reported on NNSA's program to operate and maintain
    weapons facilities and infrastructure and found that the agency's
    budget justification for this program significantly understated its
    costs.\30\ Building on these findings, in July 2012, we reported on
    NNSA's implementation of its PPBE process, particularly in the area of
    validating programs' budget requests, and we found deficiencies that we
    concluded effect the credibility and reliability of those
    estimates.\31\ Preliminary observations from our ongoing work on cost
    estimating for this subcommittee show that DOE and NNSA may not have
    any specific cost-estimating requirements or guidance for programs.
    ---------------------------------------------------------------------------
        \30\ GAO-10-582.
        \31\ GAO-12-806.
    ---------------------------------------------------------------------------
        In our June 2010 report, which focused on NNSA's fiscal year 2009
    budget and expenditures, we reported on the extent to which NNSA's
    budget justification accurately reflected a program's cost.
    Specifically, we examined NNSA's program that operates and maintains
    weapons facilities and infrastructure and found that NNSA's budget
    justification significantly understated that program's cost.\32\ We
    found that, because of allowable differences in contractors' cost
    accounting practices, NNSA could not accurately identify the total
    costs to operate and maintain weapons facilities and infrastructure.
    This condition is inconsistent with the Federal Accounting Standards
    Advisory Board standard on Managerial Cost Accounting, which states a
    general standard for Federal agencies to provide reliable and timely
    information on the full cost of Federal programs to allow an
    organization to assess the reasonableness of program costs and to
    establish a baseline for comparison. When we asked NNSA's site
    contractors to provide us with information on their fiscal year 2009
    costs for each of the activities described by this program's work
    breakdown structure, six of eight sites fully responded. The costs for
    these sites' activities totaled over $500 million more--approximately
    $1.1 billion--than the $558.6 million NNSA included in its budget
    request to fund the program at these sites. We determined that one
    reason NNSA's budget estimate for this program was so different from
    the costs to execute its work scope was because NNSA's site contractors
    were not consistent in how they identified the activities they paid for
    with program funds. We concluded that, without the ability to
    consistently identify program costs, NNSA did not have the ability to
    adequately justify future presidential budget requests and risked being
    unable to identify both the return on investment of planned budget
    increases and opportunities for cost savings. Further, we recommended
    that M&O contractors report to NNSA annually on the total costs to
    operate and maintain weapons facilities and infrastructure to allow
    Congress to better oversee management of the nuclear security
    enterprise. NNSA agreed with our report and its recommendations.
    ---------------------------------------------------------------------------
        \32\ GAO-10-582.
    ---------------------------------------------------------------------------
        Building on these findings, in July 2012, we reported on NNSA's
    overall budget formulation process, including its implementation of
    PPBE. We found that, according to senior NNSA officials, NNSA does not
    comply with DOE's order on budget formulation because the agency
    believes the order expired in 2003 and, therefore, no longer applies to
    NNSA budget activities.\33\ DOE's order on budget formulation outlines
    the requirements for the department's annual budget formulation process
    including that budget requests ``shall fully justify and describe
    intended program outputs and outcomes'' and that budget requests
    ``shall be based on cost estimates that have been thoroughly reviewed
    and deemed reasonable'' by the cognizant program organization. Rather,
    we found that NNSA is guided by its own policy for the PPBE process,
    which includes how costs are estimated and validated for operating
    programs. Our 2012 review found significant deficiencies in NNSA's
    implementation of its PPBE process, leading us to conclude that the
    credibility of NNSA's budget proposals for operating programs is
    reduced, which effectively reduces the ability of Congress to decide on
    resource trade-offs. For example, we found the following:
    ---------------------------------------------------------------------------
        \33\ GAO-12-806.

             NNSA did not have a thorough, documented process for
            assessing the validity of its budget estimates prior to their
            inclusion in the President's budget submission to Congress.
            Instead, we found that officials conducted informal,
            undocumented reviews of budget estimates that contractors
            submitted, and that the level of review varied across site and
            headquarters program offices. According to NNSA officials, the
            agency's trust in its contractors minimized the need for formal
            review of budget estimates provided.
             NNSA's annual budget validation review process
            occurred too late in the budget cycle to inform agency or
            congressional budget development or appropriations decisions.
            We found that, while NNSA policy states that the timing of
            NNSA's budget validation review process should inform budgeting
            development and decisions, budget validation reviews were
            actually completed after the completion of budget formulation
            process.
             NNSA's budget validation review process was not
            sufficiently thorough to ensure the credibility and reliability
            of NNSA's budget because it was limited to assessing the
            processes contractors and programs used to develop budget
            estimates rather than assessing the accuracy of the resulting
            budget estimates. In addition, NNSA guidance stipulates that to
            help ensure the validity of budget estimates NNSA conduct its
            validation process for 20 percent of the agency's programs
            request annually. However, we found that in fiscal year 2012
            NNSA completed validation reviews for only 1.5 percent of its
            budget request.

        In our July 2012 report, we recommended that, to enhance NNSA's
    ability to better ensure the validity of its budget submissions, and to
    decide on resource trade-offs, DOE should evaluate its budget
    formulation order and update it as necessary. Further, we recommended,
    among other things, that NNSA: (1) amend its budget validation review
    process, to ensure that all budget estimates are thoroughly reviewed by
    site and headquarters program offices, and that these reviews are timed
    to inform NNSA, DOE, OMB, and congressional budget decisions; and (2)
    reinstitute an independent cost analysis capability, as it had with
    OCA, to provide senior decisionmakers with independent reviews,
    including an analysis of different options for deciding on resource
    trade-offs, and facilitate NNSA making the best decisions about what
    activities to fund and whether they are affordable. NNSA, responding on
    behalf of DOE, stated that it generally agreed with six of the seven
    recommendations we made in this report, but NNSA disagreed with our
    report's characterization that the agency's budget estimate review
    process is not thorough.
        In both our June 2010 and July 2012 reports, we discuss a data
    system NNSA was developing to provide a consistent framework for
    managing the PPBE process within NNSA's Office of Defense Programs.\34\
    In 2010, we found that to support development of this tool, NNSA was
    revising its work breakdown structure for its program to operate and
    maintain weapons facilities and infrastructure to ensure: (1) that
    activities associated with the program were identified; and (2) that
    the costs of these activities could be identified.\35\ In 2012, we
    concluded that this type of tool could help NNSA obtain the basic data
    it needs to make informed management decisions, determine return on
    investment, and identify opportunities for cost saving.\36\ For
    example, the tool included a mechanism to identify when decisions on
    resource trade-offs must be made if contractor-developed budget
    estimates for program requirements exceed the budget targets NNSA
    provided for those programs. Further, NNSA officials stated that they
    eventually plan to use this tool to compare budget estimates of program
    activities with the amounts the programs ultimately expended.\37\ We
    learned in March of this year, as part of our work to follow up on
    recommendations made in our June 2010 report, that the tool is still in
    development and that NNSA has a pilot project under way to enhance the
    tool to provide full PPBE reporting for the B61 life extension program.
    ---------------------------------------------------------------------------
        \34\ The Office of Defense Programs accounted for 54 percent of the
    President's fiscal year 2013 budget request for NNSA.
        \35\ GAO-10-582.
        \36\ GAO, National Nuclear Security Administration: Observations on
    NNSA's Management and Oversight of the Nuclear Security Enterprise,
    GAO-12-473T (Washington, DC: Feb. 16, 2012).
        \37\ GAO-12-806.
    ---------------------------------------------------------------------------
        While development of this tool is positive, our ongoing work for
    this subcommittee on cost estimating has identified that at least one
    NNSA M&O contractor has acknowledged that weaknesses in NNSA's planning
    and budgeting have led to diminished credibility with the Department of
    Defense (DOD) and Congress that need to be addressed in the near-term.
    As such, DOD, in collaboration with NNSA, established an effort in
    January 2012 to balance the resources and requirements for the U.S.
    nuclear security enterprise with its budget needs for fiscal years 2014
    to 2018, particularly where DOD has allocated funds to NNSA to augment
    the agency's budget in support of DOD requirements.\38\ This effort to
    examine NNSA's resources and requirements is being conducted by DOD's
    Office of Cost Assessment and Program Evaluation (CAPE), which is
    tasked, among other things, with ensuring that the costs of DOD
    programs are presented accurately and completely. Among the CAPE's
    early findings has been to question NNSA's cost estimate for its life
    extension program for the B61 bomb. According to NNSA officials, the
    CAPE's $10.1 billion July 2012 independent cost assessment for this
    program was $2.2 billion higher than the cost estimate NNSA included in
    its Weapon Design and Cost Report. The CAPE identified several
    differences in assumptions that account for the difference between the
    two estimates. Additionally, the CAPE cited process issues related to
    NNSA's cost estimate, including a lack of historical data on the costs
    of previous life extension programs and a lack of a detailed program
    definition. These are the same types of issues we identified in our
    June 2010 and July 2012 reports.
    ---------------------------------------------------------------------------
        \38\ In 2010, the Secretaries of Defense and Energy signed a
    memorandum of agreement outlining budget commitments between the two
    agencies to modernize the nuclear weapons infrastructure of the United
    States and strengthen aspects of stockpile management. The agreement
    established that DOD would work to transfer to DOE $5.7 billion of
    budget authority in fiscal years 2011 through 2015 to support specific
    NNSA programs--such as the life extension program for the W76 warhead--
    and projects, such as the Uranium Processing Facility discussed above.
    The recently released President's budget for fiscal year 2014 provides
    annual estimates from fiscal year 2015 through 2023 for the amount by
    which DOD's budget authority will decrease and NNSA's will increase,
    totaling $14.8 billion.
    ---------------------------------------------------------------------------
        Preliminary observations from our ongoing work for this
    subcommittee on DOE cost estimating show that DOE and NNSA may lack
    specific cost-estimating requirements or guidance for programs. We have
    conducted initial meetings with the managers of several large NNSA
    programs to determine what requirements and guidance are used to
    generate cost estimates for the work in their programs. These programs
    include the Plutonium Disposition Program in NNSA's Office of Defense
    Nuclear Nonproliferation as well as the B61 Life Extension Program and
    the Science Campaigns in NNSA's Office of Defense Programs. NNSA
    officials responsible for the Plutonium Disposition Program told us
    they have constructed a life cycle cost estimate for the overall
    program, but that there is no (1) DOE or NNSA requirement that would
    prescribe how such an estimate should be developed or (2) requirement
    for an independent review of this estimate. An independent review of
    such an estimate is important given the magnitude of some of DOE's and
    NNSA's larger programs--for example, the current life cycle cost
    estimate for the Plutonium Disposition Program is more than $23
    billion. Similarly, NNSA officials responsible for the B61 Life
    Extension Program told us that in constructing a cost estimate for the
    program they consulted guidance, including DOE's project management
    order, but DOE and NNSA do not specify detailed cost estimating
    methodologies. Unlike the Plutonium Disposition Program, however, the
    estimate for this program has undergone several reviews, including by
    the CAPE. NNSA officials in the Science Campaigns told us that their
    activities are ongoing in nature rather than a more traditional project
    or program that has a definitive start and end date and, as a result,
    its cost estimates are prepared by way of the annual budget formulation
    process and prepared consistently with departmental budget formulation
    guidance and supplemental NNSA guidance. Our ongoing work will continue
    to assess these issues to determine how cost estimates are generated
    for NNSA programs and the extent to which any requirements and guidance
    for these activities align with cost estimating best practices.
        We plan to report on this ongoing work later this year.
        Chairman Udall, Ranking Member Sessions, and members of the
    subcommittee, this completes my prepared statement. I would be pleased
    to respond to any questions you may have at this time.

                     GAO CONTACT AND STAFF ACKNOWLEDGMENTS

        If you or your staff members have any questions about this
    testimony, please contact me at (202) 512-3841 or trimbled@gao.gov.
    Contact points for our Offices of Congressional Relations and Public
    Affairs may be found on the last page of this statement. GAO staff who
    made key contributions to this testimony are Allison B. Bawden and
    Daniel J. Feehan, Assistant Directors, and Michael Meleady, Timothy
    Persons, Cheryl Peterson, Karen Richey, Peter Ruedel, Rebecca Shea,
    Joseph Thompson, and Jack Warner.

        Senator Udall. Thank you, Mr. Trimble.
        Let me recognize Senator Donnelly. I think we will do 5-
    minute rounds. I am going to step out for a minute. If I am not
    back after 5 minutes, I know Senator Donnelly will then
    recognize Senator King who has joined us from the great State
    of Maine.
        Senator Donnelly?
        Senator Donnelly. Thank you, Mr. Chairman.
        Thank you to all of you for your hard work.
        Admiral Richardson, as we look at the reactors that will be
    used and as we move forward, this is an area that strikes me
    as, as we move forward, you could almost have quantum leaps in
    technology. So when our core will be good for 42 years, how do
    we continue to improve that during that time?
        Admiral Richardson. Senator, first, that is a big leap to
    develop a 42-year core.
        Senator Donnelly. Well, no. Do not worry. I know what an
    amazing accomplishment that is. What I am saying is that
    technology, to be able to do that, a 42-year core, is a
    tremendous accomplishment.
        Admiral Richardson. Yes, sir.
        Senator Donnelly. Now, during that life of that core, do we
    continue to do the research to make it stronger, better,
    quicker, faster, less waste?
        Admiral Richardson. Yes, sir, we do. That is the work that
    is constantly being done by the folks at my headquarters and in
    those labs. They are constantly at work looking for those next
    opportunities to reduce cost, reduce waste, do all of those
    things that will allow us to execute the Navy's mission at a
    lower cost and a more responsible pace. So that is that base
    funding that is an effort that is ongoing in conjunction with
    our vendor base.
        Senator Donnelly. On the vendor base, obviously, being from
    Indiana, we take great pride in our participation in this.
        But what is the outlook for continued reduction of the
    waste to a point where--will there be a point where there is no
    waste? Will there be--I will just leave it at that.
        Admiral Richardson. I think that as long as you are--what
    our aim is, is to reduce that waste. As long as you are burning
    fuel and burning cores, there will be some waste at the end.
        There are two ways that we are constantly taking a look at
    reducing that waste stream. One is by virtue of building a core
    that lasts 42 years, that is just that much less material that
    you have to do. Our first cores, for instance, lasted 2 years,
    and at the end of that 2-year period, you would have to refuel.
    That is a lot of spent fuel that we had to do that. So over the
    decades, we have reduced that by a factor of 20 by virtue of
    building a 42-year core.
        The other thing is we are constantly on the lookout for
    those technologies that allow us, when the conditions permit,
    to perhaps approach a recycling type of a technology where the
    fuel can be recycled.
        So it is the combination of those two efforts primarily
    right now through the longer cores, the reduction of the
    material that allow us to minimize the waste that we produce.
        Senator Donnelly. How will that new core work in regards to
    performance inside? Obviously, on the nuclear part, but
    performance inside of the boat itself. How does it make the sub
    itself so much more effective in terms of speed, technology,
    and other areas?
        Admiral Richardson. The core itself will allow the
    submarine to execute its mission for that 42-year life, but
    then there is the reactor plant around that core and the
    propulsion plant that that core is connected to. Those are the
    sorts of things that get after the mission effectiveness of the
    submarine itself in terms of stealth primarily, and then those
    core attributes of speed and other things that allow the
    submarine to be an effective deterrent as far out as we can see
    the threat.
        Senator Donnelly. I just want to finish up by saying we not
    only saw off the shores in North Korea, but in so many other
    places, that the presence of not only carriers and other ships,
    but the presence of the unknown to other people the submarines
    has acted as an incredible deterrent. We want to thank
    everybody involved in the program for what you have done. So
    thank you very much.
        I will pass it on to Senator King.
        Senator King. Thank you.
        Gentlemen, thank you for your testimony.
        DOD's 3+2 strategy, where we are going to have
    interoperable warheads, it seems to me requires a great deal of
    coordination between DOD and NNSA and, should there be waste
    involved, EM. Could you update me on the progress of that
    strategy and whether you believe we can implement it in a safe
    and cost-effective way? Are the departments working together?
    Are they talking to each other? Where do we stand on that
    development?
        Dr. Cook. I will update you, Senator.
        We work together and we talk together every week, sometimes
    every day between NNSA and DOD.
        With regard to the strategy, we now have a comprehensive
    plan that covers the entirety of the stockpile. That is why you
    will continue to hear 3+2, meaning three interoperable systems
    for the ballistic leg, two legs, and two systems interoperable
    for the air-delivered leg.
        The actual status of implementation was called for in the
    nuclear posture review of 2010. We now have an implementation
    strategy, and we are turning that into resource plans.
        The first part of that is to continue and complete the W76
    LEP. We have achieved the full build. The rate is steady. We
    are through the early birthing defects and we will complete
    that program by 2019.
        To think of the second wave, the second wave consists of
    the B61 LEP. That will improve the air-delivered leg and the
    W88 Alt. So this updates the AF&F system for the W88. That will
    also be the basis for the first interoperable warhead, AF&F.
    Those will be entering the first production unit in 2019. They
    are already in full-scale engineering design, and the build of
    those will be completed around the end of 2024 or 2025.
        Then the third wave will come on, and that is the first
    interoperable system, the W78 and 88 LEP. There will be beyond
    that a second and third interoperable, but that is the strategy
    that is being conducted. The most important thing to the
    strategy is, first, having an overall plan--we have that--
    second, having a good partnership between DOE and DOD. We have
    that. Clarity of execution and then a real keen eye given to
    the cost and the schedule maintenance is what we are working on
    most strongly now.
        Senator King. So it is too early to really talk about cost.
    You are still in the planning and design stage.
        Dr. Cook. I would differ. It is not too early to talk about
    cost. We are managing the W76 program according to the cost
    requirements. B61-12, we have a weapon design and cost report.
    We will be submitting a very initial baseline soon. We know
    that there is considerable risk associated with that, but in
    this future years NSP, in the President's request for 2014
    through 2018, we will have 5 of the 6 years of the B61 program
    up to the first production unit. So we have a very strong
    attention given to cost. We are developing integrated master
    schedules for each of the LEPs, a completed risk register, and
    we will be moving to a point of having resource-loaded
    schedules in industry standard tools as well as these proceed.
        Senator King. Do existing warheads have a life expectancy?
    Do they degrade in some way over time?
        Dr. Cook. They do degrade and they do have a life
    expectancy, although we have been able to stretch that. These
    weapons were put into service in the 1970s and 1980s nominally
    with a 20-year life and a 25-year life of program buy, which
    means we had enough components to extend another 5 years. They
    are now well beyond that time. The B61 is the oldest system in
    the stockpile, and we have the greatest needs to do its life
    extension. But the elements of that system have been around 40
    years and key parts of it still have in the radar system vacuum
    tubes.
        Senator King. You can send most of them to the Smithsonian.
    [Laughter.]
        Dr. Cook. In fact, we probably will. [Laughter.]
        In terms of cost forward, Sandia is developing a radar
    system that will be pertinent not only to the B61 but also to
    the W88 and the W87 life extensions as well. So a strong
    attention to cost, but a real need to improve the systems.
        Senator King. Other comments from any of you?
        Mr. Huizenga. I will just point out, Senator, relative to
    our relationship with NNSA, we obviously work closely with our
    partners there with the TRU waste that we are removing from the
    mesa at the Los Alamos National Laboratory which is indeed
    important to the overall benefit for the laboratory. We do not
    want to have another wildfire approach that waste, so we are
    trying to move that as quickly as possible in support of our
    colleagues.
        Senator King. Do we do any recycling of nuclear waste, or
    is it all stored somehow? Do we have any reprocessing?
        Mr. Huizenga. In general, we are disposing of the waste.
    There are broader issues associated with nuclear fuel and power
    plant fuel that can be wrestled with.
        Senator King. But in the defense area, we basically are
    disposing of the waste. There is no reprocessing process.
        Mr. Huizenga. Currently, yes.
        Senator King. Along that line, as I understand it, as we
    have been decommissioning these reactors and cores, we have
    created something like 75 million gallons of liquid nuclear
    waste. Are you confident that the facilities that we have,
    Idaho, South Carolina, and Washington, are adequate into the
    indefinite future? Is there going to be need for a new siting?
    Would you prefer a different storage for this liquid waste? I
    understand it is basically in large tanks. Is there another
    solution that might be a preferable balance between safety and
    cost?
        Mr. Huizenga. I think the path we are on right now for this
    liquid high-level waste is the appropriate one. We are making
    glass logs and solidifying waste at the SRS plant and doing
    well at our defense waste processing facility. We have already
    solidified all of the liquid waste at the West Valley site.
    Indeed, we have this 900,000 gallons left at Idaho, and we are
    in the process of starting up that facility to stabilize that
    material. So the large amount of material, the complicated
    waste stream that we have with the Waste Treatment Facility at
    Hanford is, indeed, our biggest challenge. But we think we have
    our sights set on being able to address that and solidify that
    material as well.
        Senator King. Is Hanford principally managed by your
    agency?
        Mr. Huizenga. Yes, it is.
        Senator King. That is your challenge?
        Mr. Huizenga. That is my challenge.
        Senator King. I understand.
        Admiral Richardson, Portsmouth Naval Shipyard does
    maintenance on attack submarines, and as I understand it, we
    had a hearing this morning about shipbuilding plans and
    projections for the force. Under the 306-ship plan, the Navy's
    projection is to go to 42 attack submarines in 2029, down from
    55 today, and that is a pretty significant decrease. What do
    you see the role of the maintenance yards? Given that decrease,
    how do we maintain the industrial base? What will the impact of
    that be on the facilities like Portsmouth and others?
        Admiral Richardson. Yes, sir. We, obviously, take a close
    look at that, and as far out as we have plans right now for
    Portsmouth, that shipyard is busy with those refuelings and
    decommissionings. Beyond that, working closely with my
    colleague, Vice Admiral McCoy, there is really an enterprise-
    wide approach using all the shipyards in the country to best
    level the load for nuclear ship maintenance. As we look forward
    to planning beyond the current horizon, we will continue that
    enterprise approach to make sure that we are best postured to
    support that fleet.
        Then, sir, that is the low point perhaps in the
    shipbuilding plan, but we will be building back up from that
    point as well. So not only the 48 or so attack submarines, but
    then the follow-on to the Ohio-class as well.
        Senator King. Thank you.
        Senator Udall. Thank you, Senator King. It is an important
    part of Maine's economy and the great role that Maine plays in
    our country.
        Dr. Cook, let me turn back to the posture review from 2010.
    It requires you to put in place a large number of programs. I
    do not have to tell you that. You are required to overhaul the
    B61. You finish up the W76 warhead for the Navy by 2019. You
    are going to conduct the joint fuze program on the W88 warhead
    with common components for the intercontinental ballistic
    missile (ICBM) W87 warhead and eventually the ICBM W78 warhead.
        Are you concerned about the overlap or the subelements in
    the B61 program between Sandia, the Kansas City plant, and even
    Y-12 where the components are produced?
        Dr. Cook. It is a good question. Let me give several
    aspects to the answer.
        First, what is generally called concurrency is a real
    concern. So dealing with concurrency is something we must do.
    We cannot avoid it because we have the oldest stockpile we have
    ever had. The average age of the warheads is now 26 years and
    counting, and frankly, they range from about 20 years to
    getting close to 40 years now. So in dealing with that
    concurrency, the most important thing is to have a strategic
    plan, vector one toward a stable base workload that uses the
    entirety of the complex in the wisest way because that will be
    the most cost-effective way, and then schedule the activities
    so there is not multiple overlap that is too high a stressor in
    what would otherwise be a bottleneck. So a strategic plan is
    very important.
        Then another way to reduce the impacts of concurrency is
    through leveraging the nonrecurrent engineering and getting
    multiple use out of it. In other words, I mentioned--and I
    understand with the lab directors, Director Paul Hommert showed
    the radar module for the B61. That is, in fact, the same one
    for the W88 Alt and for the MK21 fuze. So one set of
    engineering applied three times really leverages. Now, if there
    were not some concurrent work, that leveraging would not be
    possible. So some aspect of concurrency is really important.
        But there is a down side. If there is too much and if
    schedule slips, if they get stretched out, if the funding is
    not made available for the LEPs, then not only do schedules
    slip, they begin to overlap and the consequence is we have
    costs and then we have real bottlenecks.
        Senator Udall. Let me ask you about Sandia. Are you
    concerned about too many programs carried out at Sandia all
    requiring component manufacturing at the Kansas City plant
    while it is moving into the new facility?
        Dr. Cook. Again, it is a good question. I would say I have
    a concern, but I am not overly concerned because we have
    mitigation steps in place. What we are going to do is track
    them very carefully. Specifically, the Kansas City plant move--
    the new plant at Box Road is completely done now. The move is
    happening in fiscal year 2014 and by the end of 2014, all of
    that move will occur.
        When we looked at all of the risks and considered them, we
    felt they were all manageable except one and that was the
    assembly of the AF&F system. That is where it all comes
    together, and that had been a sticking point with getting to
    the W76 build rate. So, in fact, we created some duplicate
    capabilities, one in the existing plant, one in the new plant
    so that that risk would be addressed. Both are going to be used
    while we make the transition.
        Senator Udall. Let me go to bombers. With the B61 life
    extension, we need both the weapons and the bombers.
        Dr. Cook. Sure.
        Senator Udall. NNSA projects the B61 life extension to
    cost, I think, something like $8 billion, and the DOD CAPE
    projection is $10 billion. Can you talk about that difference?
    How did it come about?
        Dr. Cook. First, knowing what the difference is is quite
    important. NNSA and CAPE have been working, I think as
    Administrator Miller said and I agree, very closely together.
    It is a different set of assumptions that leads to the
    different costs. The scope is the same. The elements are the
    same.
        In our plan and what we provided to Congress now, weapon
    design and cost report, that is a cost at the end of conceptual
    design. There is considerable risk in the program, and
    something CAPE, I would say, increased our awareness to is the
    overlapping elements of different phases or turns of the
    prototype hardware. Things move along pretty quickly. So from
    the time we began to work with CAPE, a full year has gone by.
    Sandia is already into the first turn of flight hardware, and
    that was why you could see things that are relatively finished
    products yesterday. We will continue to monitor that.
        The CAPE assumption on the down side, I would say, is if we
    do not succeed in achieving the first production unit in 2019,
    which requires budget stability, it requires careful
    management, it requires risk management--if we do not achieve
    that and the program begins to slip for whatever reason,
    failure to manage the risk or failure to get the budget
    authorized and appropriated, then things will begin to pile up
    and we will lose year by year. CAPE's assumption was if we lost
    3 years, we extend the program 3 years, and it costs $2 billion
    more. I actually agree with that. If that consequence occurs,
    that will be the cost.
        Senator Udall. I appreciate that clarification. We are
    going to need to, I think, harmonize those two different
    numbers although, as you point out, there are different
    assumptions behind them. The important thing is we move to the
    markup.
        Let me turn to Admiral Richardson. Admiral, I know you have
    received a 15 percent increase in your 2014 budget. Can you
    describe what the increase was for and why it was so large?
        Admiral Richardson. Yes, sir. The increase really is a
    result of a couple of different dynamics. First, the primary
    increase is to support those three major projects that I
    described in my statement: the replacement for the Ohio-class
    submarine, that reactor plant; the refueling of the land-based
    prototype; and also the recapitalization of our spent fuel
    facility in Idaho.
        As the Budget Control Act took place, the ramps that were
    associated with those new projects got leveled off at constant
    year funding levels. As we have been involved in the effort
    with OSD CAPE and the rest of NNSA, those projects were
    assessed as part of that effort over the past year, the costs
    associated with those, the validation of the mission, so that
    that increase really is a restoration of those projects.
        There is a slight increase above that associated with--
    amounting to roughly a 2-year slip in the spent fuel handling
    project and also the Ohio submarine reactor plant. So there is
    some escalation associated with that and some efficiency that
    we lost by virtue of those slips.
        But those three projects with that slight increase due to
    the slip account for our increase, all linked very directly to
    supporting the fleet on a timeline that makes sense for them.
        Senator Udall. I know we are approaching 4 p.m. I want to
    see if Senator King had any additional questions, and then I
    will conclude with one or two questions. Senator King?
        Senator King. It would not be a hearing in the U.S. Senate
    in the spring of 2013 if somebody did not ask about sequestion.
    How is it affecting your operations, if at all? If not, that is
    important to know. If it is, I would like to know that too and
    what the severity is and what the impact would be if it
    continues beyond 2013. Admiral?
        Admiral Richardson. Thank you, Senator.
        With respect to the impact of sequestration, it is really
    being felt across the Navy and Naval Reactors is not immune
    from that. The combined CR and sequestration cuts for our
    program are approximately $95 million in fiscal year 2013. That
    really affects most directly our ability to progress the
    refueling of that land-based prototype which, as many of these
    effects have, is a snowball effect forward to retiring risk for
    the life of ship core for the propulsion plant for the next
    submarine. So that inability to place about $30 million worth
    of contracts to help us get at understanding the material
    science associated with that life-of-the-ship core, the
    sequestration--these funding levels will also necessitate that
    we again delay the spent fuel handling project. That will,
    again, result in increased costs for that project when it
    eventually does get built. In the interim, because the carrier
    fleet is coming in for refueling and that fuel is coming off
    those reactors, we will have to spend money, about $100 million
    a year, to build temporary storage facilities for those cores
    just to hold them until that handling facility gets built.
        The other part, which is particularly of concern, goes to
    your original question, sir, about the industrial base, both in
    the private sector, our vendors, and also the shipyards. As the
    sequester and the CR manifests itself through the combined
    effects of hiring freezes, layoffs of temporary workers,
    potential furloughs, we are seeing reductions in the shipyards
    of over 30 percent in terms of the capacity. That again is a
    snowballing effect which will directly translate to delays in
    the shipyard, which will translate again to reduced time at sea
    for those critical naval assets and less operational
    availability as they work to try and get out and do the
    Nation's business. We will see some of that effect in 2013.
    That effect will build in 2014 and will build again in 2015
    unless we can turn this around.
        Similarly, in the private sector, particularly as you move
    through our tier-one vendors and into the second- and third-
    tier vendors, small businesses that do a big portion and maybe
    all of their business with us to supply components for these
    plants--those businesses are at particular risk as well.
        Senator King. I would assume--I do not want to put words in
    your mouth, but I would assume that one of the issues is the
    uncertainty surrounding the budget situation. It almost does
    not matter what the solution is. We just need a solution. Would
    you concur?
        Admiral Richardson. Sir, I think Administrator Miller spoke
    very eloquently about that, that the combined uncertainty sends
    a shock wave through the system. It is that certainty and
    confidence too that also--particularly in our business where we
    do a lot of work with unique vendors, very advanced technology,
    that certainty and confidence that the business will be there
    at predictable funding levels allows it to do the sorts of
    investments to reduce that cost and get after this capability
    at the minimum cost. Not only is there a people manifestation
    of that uncertainty as people look for where they want to spend
    their lives working, but also it almost guarantees that this
    equipment will come in at higher cost because we have to do it
    year-by-year rather than doing it over a period of time that
    allows us to take advantage of fluctuations in the market.
        Senator King. Thank you.
        The sequester is going to end up costing us money, Mr.
    Chairman.
        Senator Udall. The Senator from Maine is exactly right. We
    are operating under the illusion it is going to save money. But
    Administrator Miller shared with us earlier that the CRs have
    the same effect. We can feel good that we are cutting
    Government spending, but, in fact, we are not. We are adding
    additional costs.
        Thank you for that observation. Thank you for being here
    today.
        Mr. Huizenga, I am not going to direct a question to you,
    although we are going to keep the record open, but I did want
    to acknowledge the work you do. I think you are well aware of a
    little plant we had in Colorado, Rocky Flats. I worked for many
    a year as a Member of the House to see that project completed.
    Senator King, this is a wonderful story of what we can do if we
    focus in the EM area. We have cleaned up that facility for the
    most part. There is a core area that will have to be monitored
    for hundreds of years, but the surrounding 4,500 acres are now
    a wildlife refuge and there are herds of elk, songbirds, and
    red-tailed hawks. The Fish and Wildlife Service now is managing
    it. It is an example of what we can do. We saved a lot of money
    but we have to invest on the front end in cutting-edge
    technology.
        Mr. Huizenga. We learned a lot of lessons at Rocky Flats,
    and we are trying to use those across the complex.
        Senator Udall. We certainly did. Just because we have
    gotten ours in Colorado does not mean I am moving on to other
    missions. I have made a commitment to Hanford and to Savannah
    and Pantex and Fernold and Oak Ridge and all the other sites.
    So as the chairman of this subcommittee, I am going to work
    with you to see that we keep faith with the people in those
    communities and do the work we said we were going to do.
        Mr. Trimble, the last question I want to direct your way is
    the following, and it ties to a common indirect cost structure.
    Can you give some recommendations for implementing a common
    indirect cost structure at the labs so that we can compare how
    efficient they are in executing their programs?
        Mr. Trimble. This can be a very technical area. So I will
    try to make it pretty simple, which is the level I operate at
    most times.
        I think to go forward in this area, the first thing I would
    recommend is, one, I think engaging the CAPE given their vast
    experience would be very useful.
        I think in terms of the elements that would be needed,
    first you would need a standard work breakdown structure across
    NNSA that deals with both direct and indirect. I do not think
    you can parse it out to just the indirect. You have to tackle
    both at once, otherwise you can play a shell game where stuff
    can be moved around. So you have to tackle it for both direct
    and indirect. It has to be consistent across the complex, and
    then it has to be consistently applied.
        To put meat on this, for example, if you have a line item
    for a program, say, for infrastructure and you say, okay, I am
    going to give $100 for infrastructure, the lab can take money
    from that account for infrastructure and that is what you think
    they are doing. But if they can also take it from another
    program to pay for infrastructure and they can take it from
    transportation to pay for infrastructure, if you can take it
    from multiple funds, all of a sudden you have lost the ability
    to have an insight into what your program costs. So the idea of
    a common work breakdown structure and a disciplined one is to
    have transparency and consistency in how those costs are
    allocated so that you are then in a position to manage your
    program from both a program effectiveness standpoint, as well
    as from a budget standpoint. So it is very important and it is
    very dry, but it is absolutely critical to move the ball
    forward in this area.
        Senator Udall. I agree, and I see Senator King listening
    very carefully. He was Governor of Maine. He knew that every
    dollar of taxpayers' funds had to be spent well and with
    transparency.
        I look forward to working with you on this. I am not on a
    mission to expose the NNSA or DOE or DOD. It is just we need
    and have the responsibility to continue to work to provide
    better Government services, more efficient government services,
    in this really crucial area.
        Again, I want to thank Senator King for attending. I want
    to thank you all for your time.
        We will keep the record open for 2 days, through the end of
    the business day on Friday. We are working overtime to prepare
    the authorization bill for the committee, which we will take up
    next month. So that is why the short timeframe to keep the
    record open. But I know you will all be available to answer any
    questions.
        With that, the Subcommittee on Strategic Forces is
    adjourned.
        [Whereupon, at 4:10 p.m., the subcommittee adjourned.]

    DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR
                   2014 AND THE FUTURE YEARS DEFENSE PROGRAM

                                  ----------

                             THURSDAY, MAY 9, 2013

                                   U.S. Senate,
                      Subcommittee on Strategic Forces,
                                   Committee on Armed Services,
                                                        Washington, DC.

                BALLISTIC MISSILE DEFENSE POLICIES AND PROGRAMS

        The subcommittee met, pursuant to notice, at 2:32 p.m. in
    room SR-222, Russell Senate Office Building, Senator Mark Udall
    (chairman of the subcommittee) presiding.
        Committee members present: Senators Udall, Donnelly, King,
    Fischer, and Lee.
        Committee staff member present: Peter K. Levine, staff
    director.
        Majority staff member present: Richard W. Fieldhouse,
    professional staff member.
        Minority staff member present: Robert M. Soofer,
    professional staff member.
        Staff assistant present: Lauren M. Gillis.
        Committee members' assistants present: Casey Howard,
    assistant to Senator Udall; Marta McLellan Ross, assistant to
    Senator Donnelly; Lenwood Landrum, assistant to Senator
    Sessions; Peter Schirtzinger, assistant to Senator Fischer; and
    Peter Blair, assistant to Senator Lee.

           OPENING STATEMENT OF SENATOR MARK UDALL, CHAIRMAN

        Senator Udall. The Subcommittee on Strategic Forces will
    come to order. Good afternoon. I will open with a short
    statement. Senator Fischer is here; we'll turn to her; and then
    we will look forward to hearing what our witnesses have to say.
        We are here today to hear testimony on the ballistic
    missile defense programs and policies in the President's budget
    request for fiscal year 2014 and related matters. This has been
    a busy year for missile defense. On March 15, Defense Secretary
    Hagel announced a new series of missile defense plans for the
    Homeland. These included deployment of 14 additional ground-
    based interceptors (GBIs) in Alaska, deployment of an
    additional missile defense radar in Japan, and termination of
    the development program for the Block 2B version of the
    Standard Missile-3 (SM-3) interceptor.
        The Department of Defense (DOD) has also taken a number of
    prudent and timely missile defense actions in response to the
    bellicose rhetoric and threats from North Korea, including the
    deployment of a Terminal High Altitude Area Defense (THAAD)
    system battery to Guam, the deployment of Aegis missile defense
    ships off the Korean Peninsula, and deployment of the sea-based
    X-band missile defense radar into the Pacific Ocean.
        We will want to learn today about DOD's programs, policies,
    requirements, and capabilities to defend the Homeland against
    current and potential future missile threats from North Korea
    and Iran, and to defend our forward-deployed forces, our allies
    and friends against existing and growing regional missile
    threats from those nations.
        Our missile defenses must be operationally effective, cost-
    effective, and affordable. This latter point is especially
    important at a time when Congress is imposing harmful funding
    reductions across government programs, including missile
    defenses. In this regard, our missile defense testing programs
    are critical to understanding and demonstrating the
    capabilities of our systems and giving us confidence that they
    will work as intended. Many tests are coming up this year and
    we are keen to learn of the plans and progress in correcting
    the problems we encountered in earlier flight tests with the
    kill vehicle for the GBI. We also want to understand if our
    missile defense acquisition programs and practices can provide
    improved capability with reduced technical, schedule, and cost
    risk.
        To help us understand these complex issues, we have five
    expert witnesses with us today. The Honorable Madelyn Creedon
    is the Assistant Secretary of Defense for Global Strategic
    Affairs and is responsible for policy and strategy matters
    relating to ballistic missile defense, among many other issues.
    Consequently, she is a frequent witness before the committee,
    and we welcome her back to the subcommittee.
        The Honorable Michael Gilmore is the Director of
    Operational Test and Evaluation at DOD. He plays a crucial role
    as an independent adviser to DOD and Congress on the adequacy
    and results of our operational testing and on the performance
    of our weapons systems, including missile defense systems.
        Lieutenant General Richard Formica is the Commander of U.S.
    Army Space and Missile Defense Command and also the Commander
    of the Joint Functional Component Command for Integrated
    Missile Defense under U.S. Strategic Command (STRATCOM). We
    welcome you back before the subcommittee. I understand you're
    planning to retire this summer, so I want to offer our special
    thanks for your many years of dedicated service to the Nation
    and to the Army.
        Vice Admiral Jim Syring is the Director of the Missile
    Defense Agency (MDA), which is responsible for designing,
    developing, integrating, and building most of our Nation's
    missile defense capability, certainly among the most complex
    weapons systems we have ever developed. This is his first
    appearance before the subcommittee as the Director.
        Ms. Cristina Chaplain is the Director of Acquisition and
    Sourcing Management at the Government Accountability Office
    (GAO) and leads their annual effort to review our missile
    defense acquisition programs, among others.
        We welcome you all to the subcommittee and we welcome you,
    Ms. Chaplain, back to the subcommittee. In the interest of
    time, I would ask each of you to make very short opening
    comments, no more than 2 minutes, before we begin our
    questions. We'd be happy, of course, to include your prepared
    statements in the record.
        Before turning to you, I did want to ask Senator Fischer,
    who's serving as our ranking member pro tem today, for any
    opening comments she may wish to make.

                    STATEMENT OF SENATOR DEB FISCHER

        Senator Fischer. Thank you, Mr. Chairman. It is a pleasure
    to be with you once again today. I will forego making any
    opening statement so that we have more time to hear from our
    expert witnesses and be able to ask them questions. But I would
    ask that my opening comments be included in the record.
        [The prepared statement of Senator Fischer follows:]

                   Prepared Statement by Senator Deb Fischer

        I would like to welcome the witnesses, and especially Admiral James
    Syring, who is appearing before this subcommittee for the first time
    since his appointment as Director of the Missile Defense Agency last
    November.
        On March 15, Secretary Hagel announced the deployment of an
    additional 14 ground-based interceptors at Fort Greely, AK ``to stay
    ahead of the long-range ballistic missile threat posed by North Korea
    and Iran.'' This is a prudent step and will provide the President
    additional flexibility to deal with threats to the United States and
    its vital interests. As U.S. Northern Command Commander, General
    Jacoby, told Congress, 'we must not allow regional actors, such as
    North Korea, to hold U.S. policy hostage by making our citizens
    vulnerable to a nuclear intercontinental ballistic missile attack.
        In fact, Secretary Hagel's announcement is only the latest in a
    series of actions taken by nations across the globe to counter missile
    defense threats to their territory and populations: Israel deployed the
    Iron Dome to counter rockets launched from Gaza; Turkish leaders
    requested Patriot batteries to protect against Syrian missiles; and we,
    along with our Japanese and South Korean allies, recently activated
    ground- and sea-based missile defense systems in response to North
    Korea. These actions illustrate the important and stabilizing role
    played by missile defense.
        I am, however, concerned by the termination of the SM-3 block IIB
    missile, which was announced alongside the decision to purchase the 14
    additional ground-based interceptors. The SM-3 block IIB was intended
    to be deployed in Poland for the protection of the United States from
    Iranian attack. Our current defensive systems, as General Kehler,
    Commander of U.S. Strategic Command, testified to the committee earlier
    this year, 'are not in the most optimum posture to do that.' The
    Missile Defense Agency is evaluating three locations in the continental
    United States for a future missile defense site to address this need,
    and is also required by the National Defense Authorization Act for
    Fiscal Year 2013 to develop a contingency plan for such an additional
    deployment.
        General Jacoby recently testified before the House Armed Services
    Committee that ``a third site, wherever the decision is to build a
    third site, would give me better weapons access, increased ground-based
    interceptor inventory and allow us the battlespace to more optimize our
    defense against future threats from Iran and North Korea.'' I look
    forward to hearing Admiral Syring's views on the value of an additional
    homeland missile defense site, as well as his assessment of its
    technical feasibility and cost.
        To conclude, I would note that while Secretary Hagel's announcement
    was positive, that good news was mitigated by the president's plan to
    spend $1.7 billion less on missile defense over the next 5 years. This
    reduction in funding, which comes on top of previous cut-backs, will
    make it increasingly difficult for Admiral Syring to carry out the
    President's new direction while also maintaining ongoing programs to
    develop and deploy missile defenses for our deployed forces and allies.
        I look forward to hearing our witnesses. Thank you, Mr. Chairman.

        Senator Udall. Without objection, that will be done.
        Let's go right to the--Madam Secretary, thank you for being
    here and the floor is yours.

     STATEMENT OF HON. MADELYN R. CREEDON, ASSISTANT SECRETARY OF
      DEFENSE FOR GLOBAL STRATEGIC AFFAIRS, DEPARTMENT OF DEFENSE

        Ms. Creedon. Thank you very much. Senator Udall, Senator
    Fischer, it's a pleasure to be here today.
        I would like to turn to and highlight some of the progress
    that we have made on some key policy priorities, particularly
    the recent decisions to strengthen Homeland defense. The U.S.
    Homeland is currently protected against potential limited
    intercontinental ballistic missile (ICBM) attacks from North
    Korea and Iran by the ground-based midcourse defense (GMD)
    system. As stated in the 2010 ballistic missile defense review,
    we are committed to maintaining an advantageous position vis-a-
    vis those and other threats.
        To do so requires continued improvement to the GMD system,
    including performance enhancements to the GBIs and the
    deployment of new sensors, along with upgrades to the command
    and control networks. To stay ahead of the threat, as we have
    said we would do, in this case the growing threat from North
    Korea, President Obama recently decided to strengthen the U.S.
    Homeland missile defense posture. The decision was announced by
    Secretary of Defense Hagel on March 15 and DOD is now in the
    process of implementing that decision. This decision also
    recognized the delay to the SM-3 2B program, largely due to the
    fiscal year 2012 funding cuts and to the fiscal year 2013
    continuing resolution.
        As Secretary Hagel announced, DOD will add 14 interceptors
    to the GMD system, for a total of 44 deployed GBIs by 2017, and
    deploy a second TPY-2 radar to Japan. Deployment of the second
    radar to Japan will provide improved early warning and tracking
    of any missile launched from North Korea at the United States
    or Japan and will improve both homeland and regional defenses.
        We had planned to deploy the SM-3 2B interceptor for the
    defense of the United States from land-based sites in Europe,
    but the deployment schedule had been delayed to at least 2022
    due to cuts to the requested level of funding for the
    interceptor and the continuing resolution. As a result, we
    decided to shift resources from this program to the GBI program
    to cover the cost of the 14 additional GBIs, as well as to the
    technology development line to develop new advanced kill
    vehicle and booster technologies. These decisions will allow us
    to improve our defense against any ICBMs from Iran sooner than
    we otherwise would have, while also providing additional
    protection against the North Korean threat.
        To be clear, there is no money in the fiscal year 2014
    budget request for the SM-3 2B program and we are no longer
    planning for phase 4 of the European Phased Adaptive Approach
    (EPAA). As a result of much discussion, our allies understand
    and accept this SM-3 2B decision, and we have reinforced with
    them that our commitment to phases 1 through 3 of the EPAA
    remains ironclad.
        We have also worked with other regional allies and partners
    in the Asia-Pacific and the Middle East to improve cooperation
    and enhance regional missile defenses. We have deployed a THAAD
    to Guam as a precautionary move to strengthen our defense
    posture against the growing North Korean regional ballistic
    missile threat, and the deployment strengthens our defense
    capabilities for American forces and citizens in the U.S.
    Territory of Guam. This deployment is an example of the benefit
    derived from our investments in mobile missile defense systems,
    which can be deployed worldwide as required.
        We also continue to work with our Gulf Cooperation Council
    partners on regional missile defense cooperation, and, of
    course, we continue to support Israel and its missile defense
    systems, including the Arrow codevelopment program.
        The President's budget request for fiscal year 2014
    reflects DOD's goal of retaining the flexibility to adjust and
    enhance our defenses as the threat and as technologies evolve.
    Our most vital security commitments, the defense of the United
    States, and our protection of our allies and partners and our
    forces around the world, demand nothing less.
        Thank you and I look forward to your questions.
        [The prepared statement of Ms. Creedon follows:]

                 Prepared Statement by Hon. Madelyn R. Creedon

                                  INTRODUCTION

        Chairman Udall, Ranking Member Sessions, and members of the
    subcommittee, thank you for the opportunity to testify in support of
    the Department's fiscal year 2014 budget request for missile defense.
    Ballistic missile defense is a critical capability for the United
    States with important ramifications for several of the Department's
    mission areas.
        The President's budget requests $9.2 billion in fiscal year 2014
    and $45.7 billion over the Future Years Defense Plan to develop and
    deploy missile defense capabilities that protect the U.S. Homeland and
    strengthen regional missile defenses. The administration remains
    committed to developing proven and cost-effective missile defense
    capabilities through the phased adaptive approach to regional missile
    defense. This approach puts emphasis on a flexible military toolkit
    with forces that are mobile and scalable so that they underwrite
    deterrence in peacetime, but can be surged in crisis to meet defense
    requirements.
        I will begin with a discussion of the ballistic missile threat, and
    then focus on our progress on three key policy priorities: sustaining a
    strong homeland defense, strengthening regional missile defense, and
    fostering increased international cooperation and participation.

                            BALLISTIC MISSILE THREAT

        We continue to see well-established trends associated with
    ballistic missile development, including larger numbers, greater
    ranges, and more advanced systems. There is also evidence that such
    weapons are becoming a convention of contemporary warfare, as evidenced
    most recently by the use of ballistic missiles in the crisis in Syria.
    Iran
        The Intelligence Community (IC) assesses that Iran is developing
    nuclear capabilities to enhance its security, prestige, and regional
    influence and give it the ability to develop nuclear weapons, should a
    decision be made to do so. Although we do not know if Iran will
    eventually decide to build nuclear weapons, Iran has developed
    technical expertise in a number of areas--including uranium enrichment,
    nuclear reactors, and ballistic missiles--from which it could draw if
    it decided to build missile-deliverable nuclear weapons.
        The IC assesses that Iran would likely choose a ballistic missile
    as its preferred method of delivering a nuclear weapon, if one is ever
    fielded. Iran has demonstrated an ability to launch small satellites,
    and has worked to develop larger space-launch vehicles and longer-range
    missiles.
        Iran already has the largest inventory of ballistic missiles in the
    Middle East, and it is expanding the scale, reach, and sophistication
    of its arsenal. Iran's growing ballistic missile inventory and its
    domestic production of anti-ship cruise missiles (ASCM) and development
    of its first long-range, land-attack cruise missile provide
    capabilities to enhance its power projection.
    Syria
        While Syria does not pose a ballistic missile threat to the U.S.
    Homeland, the Asad regime does possess short-range ballistic missiles,
    and has shown a willingness to use them repeatedly against the Free
    Syrian Army. Additionally, the IC assesses that Syria has an active
    chemical warfare (CW) program and maintains a stockpile of sulfur
    mustard, sarin, and VX nerve agent; along with a stockpile of
    munitions--including missiles, aerial bombs, and possibly artillery
    rockets--that can be used to deliver CW agents.
    North Korea
        North Korea's nuclear weapons and missile programs pose a serious
    threat to the United States and to the security environment in East
    Asia, a region with some of the world's largest populations,
    militaries, and economies.
        North Korea's long-range ballistic missile capabilities have
    advanced rapidly during the last year. The increased pace of this
    emerging threat required the United States to adapt its homeland
    defense capabilities. North Korea displayed what appeared to be a road-
    mobile, intercontinental ballistic missile (ICBM) in April 2012, which
    it may have taken initial steps to deploy, and announced in February
    2013 that it had conducted its third nuclear test. North Korea also
    used its Unha-3, based on the Taepo Dong-2 ICBM, to put a satellite in
    orbit in December 2012, thus demonstrating long-range missile
    technology, and may conduct additional missile tests in the near
    future.
        These programs demonstrate North Korea's commitment to develop
    long-range missile technology that could pose a direct threat to the
    United States. North Korea's efforts to produce and market ballistic
    missiles raise broader regional and global security concerns, by
    threatening the United States' allies and partners and increasing our
    concerns about ballistic missile technology proliferation

                                HOMELAND DEFENSE

        The U.S. Homeland is currently protected against potential limited
    ICBM attacks from States like North Korea and Iran by the Ground-based
    Midcourse Defense (GMD) system. This system consists of Ground-Based
    Interceptors (GBIs), early-warning radars, sea-based radar systems, and
    a sophisticated command and control architecture.
        We are committed to maintaining an advantageous position vis-a-vis
    the threats from North Korea and Iran. This requires continued
    improvement to the GMD system, including enhanced performance by the
    GBIs and the deployment of new sensors.
        We have also developed and maintained a hedge strategy within our
    GMD program to address possible delays in the development of new
    missile defense systems and the possibility that the projected ICBM
    threat could begin to emerge faster or in larger numbers. This desire
    to maintain a hedge led to decisions in previous budgets to complete
    eight additional silos in Missile Field 2 and maintain six silos
    originally slated for decommissioning in mothball status in Missile
    Field 1 at Fort Greely, AK. Additionally, we continued the development
    of the two-stage GBI.
        The steps we have taken in the fiscal year 2014 budget request will
    help to ensure that the United States possesses the capability to
    counter the projected threat for the foreseeable future. The budget
    maintains funding for ongoing efforts to improve the GMD system, such
    as:

             a GBI reliability improvement program, which includes
            the rigorous testing of the Capability Enhancement-II version
            of the GBI kill vehicle;
             upgrades to the Command, Control, Battle Management,
            and Communications system;
             emplacement of an additional In-Flight Interceptor
            Communications System Data Terminal on the U.S. east coast by
            2015; and
             upgrades to the Early Warning Radars at Clear, AK, by
            2017, and Cape Cod, MA, by 2018.
        As a result of the increasing threat from North Korea and delays
    due to funding cuts to the SM-3 IIB program, the President decided to
    exercise the hedge options described below. DOD is implementing the
    President's decision to strengthen the U.S. Homeland missile defense
    posture, as announced by Secretary of Defense Hagel on March 15, 2013.
        First, DOD will deploy eight additional GBIs in the existing silos
    in Missile Field 2 in Fort Greely, AK. Second, DOD will refurbish and
    harden the six mothballed silos in Missile Field 1 at Fort Greely and
    then emplace six additional GBIs in the refurbished silos. The
    combination of these steps will add 14 interceptors to the GMD system
    for a total of 44 deployed GBIs defending the U.S. Homeland. When these
    14 additional GBIs are deployed in 2017, we will have increased the
    number of GBIs by nearly 50 percent.
        Third, DOD will evaluate at least three locations, and prepare
    environmental impact statements (EIS), for a potential additional GBI
    site in the continental United States. Although the administration has
    not decided to proceed with an additional GBI site, if such a decision
    were made in the future, doing this work now would shorten the timeline
    for construction.
        Fourth, in order to maintain a robust testing program and
    sufficient operational spares, DOD will procure 14 additional GBIs to
    replace those test and spare GBIs that will now be deployed in Fort
    Greely, AK.
        Fifth, with the support of the Japanese Government, the United
    States will deploy an additional AN/TPY-2 radar in Japan. This will
    provide improved early warning and tracking of any missile launched
    from North Korea at the United States, and improve regional defenses,
    including the protection of Japan.
        Sixth, DOD is restructuring the Standard Missile (SM)-3 IIB program
    into a technology development program focusing on common kill vehicle
    technology for both the GBI and the SM-3 family of interceptors.
    Focusing on next generation kill vehicle technology development will
    improve our ability to address emerging threats and thus ensure
    protection of the United States, our allies and partners, and our
    deployed forces overseas. By consolidating future kill vehicle
    technology development efforts, MDA will work with industry primes and
    suppliers to define the best technical approach for a modular, open
    architecture that yields improvements for reliability and performance
    at a lower cost.
        We had planned to deploy the SM-3 IIB for the defense of the United
    States from Aegis Ashore sites in Europe. The timeline for deploying
    this program, however, had been delayed to at least 2022 due to funding
    reductions from the requested amount. As a result, we have decided to
    shift resources from this program to fund the additional GBIs, as well
    as new advanced kill vehicle technology. This step will allow us to
    improve our defense against missiles from Iran sooner than we otherwise
    would have, while also providing additional protection against the
    North Korean threat. As a result, no money is being requested in fiscal
    year 2014 for the SM-3 IIB program.
        DOD also determined that the continued development of the Precision
    Tracking Space System (PTSS) was too high-risk in terms of budget and
    schedule, and is terminating the program. We will continue to evaluate
    options to determine the most effective way to meet our missile defense
    sensor requirements.

                            REGIONAL MISSILE DEFENSE

        DOD's budget request for fiscal year 2014 continues to implement
    regional approaches that are tailored to the unique deterrence and
    defense requirements of Europe, the Middle East, and Asia-Pacific
    regions. These regions vary considerably in their geography, history,
    and character of the threat faced, and in the military-to-military
    relationships on which we seek to build cooperative missile defenses.
    Because the demand for missile defense assets within each region over
    the next decade will exceed supply, the United States is developing and
    fielding capabilities that are mobile and capable of being redeployed
    to different locations as necessary.
        Missile defense is an integral part of a comprehensive U.S. effort
    to strengthen regional deterrence architectures, and plays a central
    role in the strategic guidance DOD released in January 2012.
    Phased Adaptive Approach Implementation: Europe
        The elements of the first phase of the European Phased Adaptive
    Approach (EPAA) are in place. We have maintained a sea-based missile
    defense presence in the region since March 2011. An AN/TPY-2 radar was
    deployed to the Turkish military base at Kurecik in 2011. Additionally,
    associated command and control capabilities, such as the U.S. Air
    Operations Center at Ramstein Air Base, Germany, are now in operation.
        In Phase 2, the architecture will be expanded with a land-based SM-
    3 site in Romania, and with an upgraded Aegis Ballistic Missile Defense
    (BMD) Weapons System and SM-3 Block IB interceptors that will be
    deployed on land and at sea. The Ballistic Missile Defense Agreement
    with Romania entered into force in December 2011, so the groundwork has
    been set for the site to become operational in the 2015 timeframe.
    Ground breaking on that site will occur later this year.
        We have also taken steps to meet the requirement in the EPAA for
    sea-based BMD capabilities. In 2011, Spain agreed to host four U.S.
    Aegis destroyers at the existing naval facility at Rota. These multi-
    mission ships will support the EPAA, as well as other U.S. European
    Command and NATO maritime missions. The first two ships are scheduled
    to arrive in 2014, and the final two ships will arrive in 2015.
        In Phase 3, a second land-based SM-3 site will be deployed in
    Poland in the 2018 timeframe. The more capable SM-3 Block IIA
    interceptors will be deployed on land and at sea, extending coverage to
    all NATO allies in Europe. The ballistic missile defense agreement with
    Poland entered into force in September 2011.
        The restructuring of the SM-3 IIB program to focus on the
    development of common kill vehicle technology means that we are no
    longer planning for Phase 4 of the EPAA, the primary purpose of which
    had been to augment missile defense protection of the United States
    from a site in Europe. As Secretary Hagel emphasized in his
    announcement in March, our commitment to NATO missile defense ``remains
    ironclad'' as demonstrated by our strong support for the BMD
    capabilities either already deployed, or being developed for Phases 1
    through 3 of the EPAA. Phase 3 will still be capable of providing
    coverage of all European NATO territory. We have discussed this
    decision with our NATO allies, and the initial reaction has been
    positive.

    NATO Missile Defense Implementation
        As we continue to implement the EPAA, we are also supporting the
    President's commitment to contribute the EPAA capabilities to NATO
    missile defense. We are working in close collaboration with our NATO
    allies to develop an advanced network of sensors and interceptors--on
    land and at sea--to protect NATO territory.
        This administration has made the missile defense protection of
    Europe a central feature of transatlantic security policy. At the 2010
    NATO Summit in Lisbon, Portugal, President Obama and his fellow NATO
    Heads of State and Government approved a new Strategic Concept, which
    took the historic step of committing to the defense of European NATO
    populations and territory against the growing threat of ballistic
    missiles. At the 2012 NATO Summit in Chicago, the assembled leaders
    announced that the Alliance had achieved an interim BMD capability--in
    other words, an operationally meaningful ballistic missile defense
    capability.
        The United States and our NATO allies have worked together to make
    significant progress on the development of collaborative, networked
    missile defense systems. Vital command-and-control capabilities for
    missile defense are now operational. The NATO command-and-control
    backbone, the Active Layered Theater Ballistic Missile Defense System,
    has reached an interim operational capability, and will evolve toward
    full capability between 2018 and 2020.
        We continue to carry out exercises designed to hone our Alliance
    missile defense capabilities. A key missile defense exercise involving
    NATO is Nimble Titan, a biennial, global campaign. The Nimble Titan 12
    exercise included 14 participant nations--including the United States,
    many NATO countries, Japan, Australia, and the Republic of Korea.
        As we begin planning for Nible Titan 14, which begins later this
    year and will carry into 2014, 21 nations have already signed on to
    participate. Nimble Titan 14 will include tabletop exercises involving
    threats in Northeast Asia and Southwest Asia, as well as a capstone
    event involving all participants on a global scale.

    Phased Adaptive Approaches in Other Regions
        We are also working to implement the principles of the phased
    adaptive approach in the Asia-Pacific region and the Middle East
    region, building on the existing foundations of U.S. defense
    cooperation in these regions. These approaches must be tailored to the
    unique mix of threat and geography in each region. In the Asia-Pacific
    region, the security environment is largely maritime in character, with
    vast distances between some of the states that make up the region,
    requiring both maritime assets and defenses against longer-range
    missiles. The Middle East region is far more compact, and the threat
    comes from missiles of short- and medium-range. The footprint of U.S.
    military presence is different in each region, and will evolve in
    different ways over the coming decade. The potential threat to the U.S.
    Homeland from regional actors varies, and the role that regional
    defenses plays in protection of the United States and our deployed
    forces and assets will change as well.
        These regional approaches to ballistic missile defense should allow
    stronger partnerships with our allies and partners in meeting emerging
    security challenges, and provide opportunities to build partner
    capacity.

                           INTERNATIONAL COOPERATION

    Europe
        The United States encourages continued allied contributions to NATO
    missile defense. EPAA host nations (Poland, Romania, Spain, and Turkey)
    will provide the basing rights and external security for the facilities
    where EPAA assets are located. The Netherlands has committed to spend
    up to 250 million Euro to upgrade the SMART-L radars on four of their
    frigates so they can contribute to NATO BMD in the 2018 timeframe. The
    Netherlands and Germany have also committed Patriot PAC-3 systems to
    NATO missile defense, including through the ongoing NATO deployment in
    defense of Turkey. France and Italy intend to contribute the SAMP/T air
    and missile defense system, scheduled to become operational in 2013, to
    NATO BMD. France is also planning to provide its Spirale satellite
    detection system and a long-range radar. Looking to the future, the
    United States will continue to encourage its NATO allies to do even
    more to cooperate and invest in missile defense. Several allies have
    modern surface combatant ships that could be upgraded with a BMD sensor
    or interceptor capability. A number of NATO allies also have proposed
    concepts for a multinational interceptor ``pool'' concept, whereby
    allies collectively purchase interceptors such as the SM-3 to support
    NATO missile defense. Additionally, some allies are considering the
    purchase of Patriot PAC-3.

    Asia-Pacific
        The cornerstone of our security and diplomacy in the region has
    historically been our very strong bilateral alliances, including with
    the Republic of Korea, Japan, and Australia. All three of these nations
    play an important role in our regional efforts to achieve effective
    missile defense.
        The Republic of Korea obviously has an immediate, proximate stake
    in preventing missile strikes from the North. We have worked very
    closely with the ROK to ensure that we maintain the capacity and
    interoperability to do just that. The United States deploys PAC-3
    batteries in South Korea to defend U.S. and South Korean forces.
        In addition, the ROK is taking steps to enhance its own air and
    missile defense systems, which include sea- and land-based sensors and
    Patriot PAC-2 batteries.
        We have been consulting closely with the ROK about how it can
    upgrade its missile defense capabilities. Enhanced intelligence,
    surveillance, and reconnaissance through the potential South Korean
    purchase of Global Hawk would contribute to a more robust posture. We
    are mutually committed to sustain and strengthen protection against the
    North Korean missile threat.
        Japan has acquired its own layered missile defense system, which
    includes Aegis BMD ships with Standard Missile-3 interceptors, PAC-3
    batteries, early-warning radars; and sophisticated command-and-control
    systems. In addition, Japan is a critical international partner for BMD
    development. One of our most significant cooperative efforts with Japan
    is the co-development of an advanced version of the SM-3 interceptor,
    the SM-3 Block IIA. In addition, we have deployed an AN/ TPY-2 radar--
    which provides early warning and tracking--to Japan, and, as previously
    mentioned, we plan to deploy a second AN/TPY-2 to Japan.
        With regard to Australia, we signed a memorandum of agreement on
    missile defense cooperation in 2004, and have formed a close
    partnership on research and development--most notably with regard to
    sensors. In addition, Australia is involved in one of our two
    trilateral discussions on missile defense in the Pacific involving the
    United States, Australia, and Japan; the other is with the United
    States, the Republic of Korea, and Japan.
        These trilateral discussions are part of our efforts to expand
    international missile defense cooperation, strengthen regional security
    architectures, and build partner capacity. We have already seen the
    value of these multilateral approaches. For example, Japan, the
    Republic of Korea, and the United States successfully tracked two near-
    simultaneous launches of ballistic-missile targets as part of the
    multilateral Pacific Dragon exercise last summer. In December 2012, we
    cooperated very closely in tracking the North Korean Unha-3 space
    launch.
        Going forward, we will continue to emphasize the importance of
    developing a regional ballistic missile defense system that includes
    the sharing of sensor data among allies.

    Middle East
        The United States maintains an exceptionally strong defense
    relationship with Israel, including on missile defense, which has
    resulted in one of the most comprehensive missile defense architectures
    in the world. Israeli programs such as Iron Dome, the David's Sling
    Weapon System, and the Arrow Weapon System, in conjunction with
    operational cooperation with the United States, create a multi-layered
    architecture designed to protect the Israeli people from varying types
    of missile threats. Missile defense figured prominently in the Austere
    Challenge exercise we conducted with Israel in the fall of 2012, the
    largest U.S.-Israeli military exercise in history.
        The United States is also working with a number of Gulf Cooperation
    Council (GCC) States on missile defense, including supporting the
    purchase of missile defense systems through the Foreign Military Sales
    program. For example, the United Arab Emirates is procuring the
    Terminal High Altitude Area Defense system. This is in addition to the
    UAE's earlier purchase of Patriot systems. These capabilities will
    significantly enhance the UAE's defense against ballistic missile
    attack.
        This past year, U.S. Air Force Central Command initiated a series
    of regular exchanges between United States and GCC air defense officers
    at the Combined Air Operations Center located at Al Udeid Air Base in
    Qatar.
        Finally, at the inaugural U.S.-GCC Strategic Cooperation Forum in
    Riyadh, GCC foreign ministers and then-Secretary of State Clinton
    highlighted the threat that ballistic missiles pose against critical
    military and civilian infrastructure. One result of these high-level
    talks was that the ministers agreed on the need to deepen U.S.-GCC BMD
    cooperation which they see as an essential element of their effort to
    promote peace and stability in the region.

    Russia
        The United States continues to seek cooperation with Russia on
    missile defense, both bilaterally and with our allies through the NATO-
    Russia Council. We are pursuing this cooperation because it would be in
    the security interests of all parties and could strengthen the
    defensive capabilities of both NATO and Russia. Allies embraced such
    cooperation with the hope of advancing broader strategic partnership
    with Russia. The United States has pursued missile defense cooperation
    with Russia with the clear understanding that we will not accept
    constraints on our missile defense systems, we will implement the EPAA,
    and Russia will not have command and control over NATO ballistic
    missile defense efforts. NATO would be responsible for the defense of
    NATO, and Russia would be responsible for the defense of Russia.
        The United States has kept Congress and our allies informed about
    our efforts with Russia on missile defense cooperation, which have
    included the proposal to establish missile defense cooperation centers
    in Europe. The United States has been open and transparent with Russia
    about our plans for European missile defenses, and explained in detail
    why U.S. missile defense systems in Europe will not negate the Russian
    strategic nuclear deterrent.
        Although we have had no breakthroughs, the administration remains
    committed to pursuing substantive missile defense cooperation with
    Russia because it remains in our security interests to do so.

                                   CONCLUSION

        The ballistic missile threat--to the United States, to our allies
    and partners, and to our forces overseas--is evolving, and so we must
    adapt our responses to mitigate this threat.
        I have touched upon a number of policies that we and our allies
    have pursued to address and counter this threat. We have had some very
    significant successes over the last several years, but this
    administration has emphasized from the beginning that we cannot afford
    to stand still. To the contrary, we need to re-evaluate the threat
    continually and adapt as necessary. The President's budget request for
    fiscal year 2014 reflects DOD's goals of retaining the flexibility to
    adjust, and to enhance our defenses as the threat and as technologies
    evolve. Our most vital security commitments--the defense of the United
    States and the protection of our allies and partners and our forces
    around the world--demand nothing less.
        I want to thank you for having me here today, and I look forward to
    your questions.
        Senator Udall. Thank you, Secretary Creedon.
        Dr. Gilmore.

      STATEMENT OF HON. J. MICHAEL GILMORE, DIRECTOR, OPERATIONAL
               TEST AND EVALUATION, DEPARTMENT OF DEFENSE

        Dr. Gilmore. Mr. Chairman, Senator Fischer, members of the
    committee, I just want to emphasize briefly that we are
    incorporating increasing amounts of operational realism and
    therefore complexity in the missile defense tests that we do.
    That's important so that everyone involved from the President
    on down to the combatant commanders and the people who operate
    the system can understand what it truly can and cannot do.
        The most recent example of that was Flight Test Integrated-
    01, conducted late last year. That involved the simultaneous,
    nearly simultaneous intercept by Aegis, THAAD, and Patriot of
    both ballistic missile and air-breathing targets. There was
    extensive participation by the combatant commands in that test
    and they used it to develop tactics, techniques, and procedures
    that are being put into real use in U.S. Central Command today.
        We'll follow that up with the first multi-system
    operational test, Flight Test Operational-01 (FTO-01), later
    this year, involving both Aegis and THAAD. We're going to do
    the same thing with the ground-based missile defense system.
    Given what we learned recently with the successful non-
    intercept test, we will probably conduct early in fiscal year
    2014 an intercept test using the Capability Enhancement II kill
    vehicle, which is the one that had the failure a couple of
    years ago to intercept. We're also going to do an intercept
    test using the Capability Enhancement I kill vehicle, which
    will comprise the majority of the fleet for some time, within
    about a month.
        Thereafter, in fourth quarter of fiscal year 2015 we will
    conduct a test in GMD of a true ICBM-class target, and we will
    follow that up with tests incorporating increasing realism,
    including realistic countermeasures, salvo engagements,
    multiple simultaneous engagements.
        So I strongly support the deliberate, rigorous test program
    that Admiral Syring and the MDA are executing. That program
    allows the time needed to do rigorous pre- and post-test
    analysis. It enables us to learn and correct problems. In fact,
    although it may sound somewhat ironic and counterintuitive, to
    me the value of the test program is demonstrated most by the
    failures that have occurred, because those failures that have
    occurred within the last couple of years for both Aegis,
    Standard Missile, and the GBI, would not have been discovered
    if not for the test program. Modeling and simulation would not
    have uncovered those problems.
        Thank you and I will be happy to answer your questions.
        [The prepared statement of Dr. Gilmore follows:]

                  Prepared Statement by Dr. J. Michael Gilmore

        Chairman Udall, Senator Sessions, distinguished members of the
    subcommittee, thank you for the opportunity to discuss missile defense
    test planning, processes, and programs, including my assessment of the
    Ballistic Missile Defense System (BMDS).
        Over the last year, Aegis Ballistic Missile Defense (BMD), Patriot,
    and Terminal High-Altitude Area Defense (THAAD) each demonstrated
    additional progress toward Short-Range Ballistic Missile (SRBM) threat
    class capability, even though Aegis BMD suffered a Standard Missile-3
    Block IA interceptor failure during a flight test late in the year. For
    the first time, THAAD demonstrated progress toward Medium-Range
    Ballistic Missile (MRBM) threat class capability when it successfully
    destroyed a medium-range air-launched target. Ground-based Midcourse
    Defense (GMD) did not conduct any intercept flight testing during the
    period and did not demonstrate progress toward Intermediate-Range
    Ballistic Missile (IRBM) or Intercontinental Ballistic Missile (ICBM)
    threat class capability. However, GMD did conduct an interceptor only
    flight test in January 2013 as part of its return to intercept effort.
    That test demonstrated the potential for selected design changes made
    to the Capability Enhancement II kill vehicle to correct problems that
    caused previous test failures. Command, Control, Battle Management, and
    Communications (C2BMC) demonstrated the capability to control two
    operationally-deployed AN/TPY-2 radars in Forward-Based Mode (FBM),
    using operational communications architectures; personnel; and tactics,
    techniques, and procedures.
        The Missile Defense Agency (MDA) element flight testing included
    three Aegis BMD intercept tests and one THAAD operational flight test.
    U.S. Army testing of Patriot was more extensive, including an
    operational test that was conducted from May 2012 to January 2013.
    Aegis BMD completed the first two successful intercepts of SRBM targets
    by the new Standard Missile-3 Block IB interceptor using software build
    4.0.1. In February 2013, Aegis BMD conducted the first engagement using
    remote data from the Space Tracking and Surveillance System. THAAD
    successfully completed its Initial Operational Test and Evaluation
    (IOT&E) by simultaneously destroying a foreign military acquisition
    SRBM and an MDA-developed target with MRBM characteristics flying a
    short-range trajectory. Patriot successfully completed five different
    intercept flight tests against SRBMs using a variety of Patriot
    interceptors including the new Missile Segment Enhancement interceptor
    under development. Patriot also conducted intercept flight testing
    during the period for a Foreign Military Sales customer. In addition,
    the MDA continued its ground test program.
        Significant to a system-level characterization of the BMDS, the MDA
    conducted the first flight test of a regional BMD system. This test
    included Aegis BMD, Patriot, and THAAD, as well as C2BMC and an AN/TPY-
    2 (FBM), which comprised the most complex BMD flight test ever
    attempted in the history of the DOD. Conceived as a risk reduction test
    for future operational tests, Flight Test Integrated-01 (FTI-01)
    included basic system-level integration, but not true layered defense,
    as the test was designed such that the weapon elements could only
    engage their intended targets. Because of this, the weapon elements
    basically operated independently of one another. Nevertheless, the
    Space-Based Infrared System/Defense Support Program participated in
    this test and the elements exchanged track data with each other and
    received acquisition cues from the AN/TPY-2 (FBM) radar via C2BMC. The
    test design featured near-simultaneous Aegis BMD and THAAD intercepts,
    a THAAD first-time engagement of an MRBM, a Patriot engagement of an
    SRBM in the presence of upper-tier post-intercept debris, and Aegis BMD
    and Patriot defending against cruise missile attacks. While the
    Standard Missile-3 Block IA interceptor missed its target, the Standard
    Missile-2 and the three other interceptors achieved successful
    intercepts. Soldiers performed command and control functions from the
    Air and Space Operations Center at Hickam Air Force Base, Hawaii. In
    FTI-01, for the first time, three missile defense weapon elements and
    an external sensor operated in the same theater engaging a small raid
    of ballistic missiles and air-breathing targets.
        Since Flight Test Standard Missile (FTM)-15 in April 2011, Aegis
    BMD has experienced one test anomaly and two flight test failures.
    During FTM-15, the Standard Missile-3 Block IA Third Stage Rocket Motor
    experienced a failure in a critical component, leading to unexpected
    behavior just prior to achieving a successful intercept. The faulty
    component, common to both the IA and IB interceptors, was subsequently
    redesigned and flown successfully in FTM-18. During FTM-16 Event 2 in
    September 2011, a catastrophic failure of the Third Stage Rocket Motor
    resulted in a failure to intercept. The MDA determined the cause to be
    an issue with one of the firing parameters and made the necessary
    software modifications to mitigate the issue. Subsequently, the MDA
    conducted numerous ground firings of the Third Stage Rocket Motor to
    verify that it now functions properly and it intends to use the newly-
    adjusted firing parameter in FTM-19 in May of this year. This was also
    an issue common to both the IA and IB interceptors. Finally, the MDA is
    still investigating the cause of the Standard Missile-3 Block IA
    interceptor failure to intercept during FTI-01.
        The test program for fiscal year/calendar year 2012 was adequate to
    support the development of the regional BMDS. The need to determine
    root cause of the FTG-06a failure, as well as develop, analyze, and
    perform ground tests of the means to correct the failure precluded GMD
    intercept flight testing during 2012. The MDA conducted tests as
    planned in the IMTP, Versions 11.2, 12.1, and 12.2 approved by the MDA
    Director and myself in August 2011, March 2012, and June 2012
    respectively. However, except for the THAAD IOT&E, all key flight tests
    scheduled in IMTP 11.2 moved to later calendar quarters in IMTP 12.1,
    frequently a full year or more later. All of these changes except one
    were primarily the result of previous flight test failures and the
    ensuing investigations that required laboratory and ground testing,
    hardware corrections, and software changes. The exception was the MDA
    changing the first operational test of the BMDS into FTI-01 as a risk
    reduction test with the operational test re-inserted in the schedule a
    year later.
        The test frequency across all of the BMDS elements remains
    consistent in the recently approved IMTP version 13.1 as compared with
    the earlier 12.2 version. For GMD, the MDA maintained the flight test
    frequency, averaging one flight test per year, a test pace that allows
    sufficient time to analyze the terabytes of data generated during GMD
    flight tests. Flight Test Ground-based Interceptor-07 (FTG-07) is
    planned for later this year, real-world events permitting, and will be
    flown using the failed intercept FTG-06a profile and a Capability
    Enhancement-I Exoatmospheric Kill Vehicle with an Aegis BMD forward
    sensor providing a tracking cue through C2BMC. This will be the second
    of three risk reduction flights for the GMD return to intercept. FTG-
    06b is being planned for late this calendar year and will complete the
    GMD return to intercept plan. The MDA will conduct their first
    engagement of an ICBM, with the target flying a range of greater than
    5,500 kilometers, in fiscal year 2015. This will also be the first GMD
    salvo test of two interceptors fired at a single target. The MDA will
    conduct a multiple simultaneous engagement of two interceptors on two
    targets in fiscal year 2018.
        In the case of Aegis BMD 3.6.1 and THAAD, sufficient data now exist
    to calculate quantitative estimates of the probability of engagement
    success for the tested battlespace (which is less than the full
    intended battlespace) of the two weapon systems. The probability of
    engagement success estimates for these two weapon systems are included
    in my classified 2012 Assessment of the BMDS.
        Many of the models and simulations used in the ground tests are
    still not accredited for performance assessment, thereby limiting
    quantitative assessments based on their results. Some portions of the
    battlespace where data are lacking cannot be assessed. Examples include
    high closing velocity associated with longer range targets for Aegis
    BMD, salvo intercept time spacing for GMD since it has not yet
    attempted a salvo launch, and launch on remote track for THAAD. My
    office and MDA are working to assure the Integrated Master Test Plan
    (IMTP) supports BMDS modeling and simulation by providing the test data
    required for rigorous verification, validation, and accreditation
    (VV&A). However, model and simulation VV&A to support comprehensive
    quantitative performance assessments will, in many instances, require
    several more years to complete.
        My comments to this committee during my testimony of the last 4
    years, regarding the IMTP development process, remain accurate. The
    Director of MDA, Vice Admiral Syring, has continued to pursue a
    rigorous IMTP development process that has produced a rigorous and
    well-justified set of tests. My office continues to be involved
    throughout the semi-annual review and revision process leading to each
    update of the IMTP. This process has worked well during the preparation
    of the seven previous plans, including the most recent IMTP (version
    13.1), that I approved jointly with Admiral Syring in March. The
    process has enabled each version of the IMTP to be revised in a timely
    manner consistent with policy changes, flight test results (including
    unsuccessful intercepts) such as those I have mentioned previously, or,
    changes in budgetary resources. The current IMTP is a rigorous plan for
    obtaining the test information needed to assess BMDS performance
    quantitatively.
        However, as I noted in my previous testimony, the IMTP continues to
    be success-oriented. The rigorous testing incorporated in the IMTP will
    inevitably lead to flight test failures. These failures, although often
    perceived as setbacks, provide information that is absolutely critical
    to assuring that our ballistic missile defenses will work under
    realistic and stressing conditions. The IMTP does not, however, include
    plans for backup or repeat tests that would be needed in the event of
    flight test mission failures. Therefore, the effects of unsuccessful
    tests, such as the earlier FTG-06a and FTM-16 Event 2 failures, need to
    be mitigated through future updates of the IMTP. Thus far, the semi-
    annual revision process has allowed flexibility in making the necessary
    adjustments when needed.

                                   CONCLUSION

        The ability to conduct comprehensive quantitative assessments of
    BMDS capability across the full battlespace for each of the elements is
    still a number of years away. However, BMDS testing has now produced
    sufficient data to enable a quantitative assessment of capability for
    both THAAD and the currently fielded Aegis BMD system covering the
    limited portions of their tested battlespace. Executing the planned
    testing in the IMTP will enable the collection of data needed to
    ultimately validate the models and simulations required to perform
    those assessments and to demonstrate capability across the full
    battlespace.

        Senator Udall. Thank you, Dr. Gilmore.
        Lieutenant General Formica.

    STATEMENT OF LTG RICHARD P. FORMICA, USA, COMMANDER, U.S. ARMY
        SPACE AND MISSILE DEFENSE COMMAND/ARMY FORCES STRATEGIC
    COMMAND, AND COMMANDER, JOINT FUNCTIONAL COMPONENT COMMAND FOR
                       INTEGRATED MISSILE DEFENSE

        General Formica. Mr. Chairman, Senator Fischer, members of
    the committee: First, Mr. Chairman, thank you for your kind
    words. It's been an honor and a privilege to serve the United
    States of America in uniform and to have the opportunity to
    appear before this subcommittee on a couple of occasions. I
    would like to add my thanks to you and all of the committee for
    your support of our soldiers, sailors, airmen, marines,
    civilians, and families.
        My intent today is twofold: to highlight the missile
    defense operations and the force provider role that U.S. Army
    Space and Missile Defense Command (SMDC), and the role that the
    Joint Functional Component Command for Integrated Missile
    Defense (JFCC IMD) plays as an operational integrator of joint
    missile defense capabilities for STRATCOM.
        At SMDC, to accomplish our assigned mission we focus on
    three core tasks. In operations, we provide trained and ready
    space and missile defense forces and capabilities to the
    Nation. Those are capabilities we provide today. In capability
    development, we build the future space and missile defense
    forces. Those are the capabilities we'll provide tomorrow. In
    material development, we research, test, and integrate space,
    missile defense, and other related technologies. Those are the
    capabilities we'll provide the day after tomorrow.
        As the Operational and Functional Component Command of
    STRATCOM, at JFCC IMD we perform key mission tasks to
    facilitate the execution of STRATCOM's missile defense
    responsibilities. Those tasks include synchronizing operational
    level planning for missile defense; providing operational
    support and asset management for missile defense forces;
    integrate joint ballistic missile defense (BMD) training,
    exercises, and test activities with the warfighters; and to
    advocate for future capabilities.
        With the combined efforts of DOD and with the support of
    Congress, progress has been made to evolve global missile
    defense capabilities, to strengthen the defense of the
    homeland, and to advance our capability to defend our deployed
    forces, allies, and friends abroad. During this period of
    fiscal uncertainty, this committee's continued support of
    missile defense and the soldiers, sailors, airmen, marines, and
    civilians who develop, deploy, and operate those missile
    defense systems remains essential.
        I look forward to answering any of your questions. Thank
    you.
        [The prepared statement of General Formica follows:]
               Prepared Statement by LTG Richard P. Formica, USA

        Mr. Chairman, Ranking Member Sessions, and distinguished members of
    the subcommittee, thank you for your continued support of our soldiers,
    civilians, and families. It is an honor and privilege to again testify
    before this Subcommittee. Today I appear before you, bringing both a
    joint and Army perspective, for effective missile defense capabilities.
    We appreciate this subcommittee's continued support of the Army, the
    U.S. Strategic Command, the Department of Defense, and the missile
    defense community.
        My three responsibilities remain unchanged from my previous
    appearances before you. First, as the Commander of the U.S. Army Space
    and Missile Defense Command (USASMDC), I have title 10 responsibilities
    to train, maintain, and equip space and global ballistic missile
    defense forces for the Army. Second, I am the Army Service Component
    Commander (ASCC) to the U.S. Strategic Command (STRATCOM) as the
    Commander of the Army Forces Strategic Command (ARSTRAT). I am
    responsible for planning, integrating, and coordinating Army forces and
    capabilities in support of STRATCOM missions. Third, I serve as the
    Commander of STRATCOM's Joint Functional Component Command for
    Integrated Missile Defense (JFCC IMD), synchronizing Joint operational-
    level planning and global missile defense operations support. It is an
    honor to testify with these distinguished witnesses who bring missile
    defense capabilities to our Nation, forward deployed forces, friends,
    and allies.
        During last year's appearance, my intent was threefold: to
    highlight USASMDC/ARSTRAT's missile defense force provider
    responsibilities to the Army and the geographic combatant commanders
    (GCCs); to outline JFCC IMD's role as an operational integrator of
    joint missile defense for STRATCOM; and to summarize the status and
    capabilities of the major Army air and missile defense programs of
    record.
        Since last year's hearing, there have been significant changes in
    both the strategic and fiscal landscapes. Today, I will briefly
    highlight the ramifications to the missile defense arena resulting from
    these changes and update the subcommittee on our continuing progress
    that directly contributes to the Nation's ability to defend against
    ballistic missiles, both today and tomorrow.

                   EVOLVING STRATEGIC AND FISCAL ENVIRONMENT

        In January 2012, the latest U.S. Defense Strategy, Sustaining U.S.
    global Leadership: Priorities for 21st Century Defense, was released.
    Missile defense priorities are identified, within the global security
    context of the new strategy that, among other objectives, outlines the
    DOD's rebalancing toward the Asia Pacific region and renews emphasis on
    building partner capacity. The strategy recognizes that adversaries,
    using asymmetric capabilities to include ballistic and cruise missiles,
    ``have the potential to pose catastrophic threats that could directly
    affect our Nation's security and prosperity.'' The ongoing North Korea
    ballistic missile situation demonstrates this strategy concern.
        As this subcommittee is well aware, the ballistic missile threat
    from regional actors, such as North Korea and Iran, is not new. The
    threat is increasing both quantitatively and qualitatively and is
    likely to continue to do so over the next decade. In an environment of
    decreasing resources, we must be prepared to quickly adapt to confront
    varying threat environments. As we will never have enough resources,
    neither missile defense system assets nor the force structure, to
    counter the regional growing threat, our approach has been to take a
    holistic approach and invest in assets to address the most pressing
    threat.

              ``Potential enemies will increase the range, accuracy, and
            lethality of direct and indirect fire weapons capabilities . .
            .''--The Army Capstone Concept, December 2009

        In conjunction with the objectives of the current U.S. Defense
    Strategy and to address present adversary threats, STRATCOM and the
    Army continue to provide homeland and regional missile defense
    capabilities. The recent announcement to deploy a Terminal High
    Altitude Area Defense (THAAD) battery to Guam and the positioning of
    the Sea-Based X-Band (SBX) Radar within the Pacific region demonstrate
    our ability to quickly increase the readiness status of GMD forces and
    deliver capabilities to address the North Korean ballistic missile
    threat to our deployed forces and regional allies. Within the missile
    defense community, we continue to deploy technologically advanced
    assets to counter the threat of North Korean aggression, promote
    stability, and support our Nation's security interests. We also
    continue to assist the regional partners with missile defense
    capabilities they bring to bear. While retaining our number one
    priority to defend the homeland against a limited ballistic missile
    attack, we will continue to deter and defend against the more prevalent
    regional ballistic missile threats. In summary, the complexity of the
    strategic environment, the technological advances of the threat, and
    fiscal realities require cost efficient and operationally effective
    methods of integrating current and future capabilities.

                       THE WORKFORCE--OUR GREATEST ASSET

        During DOD Space testimony before this subcommittee a few weeks
    ago, I felt it appropriate to highlight our workforce. I believe it
    remains appropriate to do so again today. At USASMDC/ARSTRAT, as is the
    case Army-wide, our people are our most enduring strength. In the
    missile defense arena, many of our soldiers, civilians, and contractors
    provide critical support to the warfighter 24/7/365. This support
    extends to warfighters, both stationed in the Homeland and serving
    abroad. Within our command, we continuously strive to ensure our entire
    team remains viable, strong, and capable.
        The ongoing fiscal uncertainties and the impacts of sequestration
    to the USASMDC/ARSTRAT civilian workforce continue to cause concern for
    me and the workforce. I have four concerns. First, I am concerned about
    the impact of a potential furlough, which has caused angst, impacted
    morale, and is expected to place personal hardships on much of the
    workforce. Second, the civilian hiring freeze is creating vacancies in
    the workforce. This impacts our ability to build our bench and will
    have longer-term impacts on the ability to provide space capabilities
    to the warfighter. Third, the elimination of our temporary and term
    employees, some of which are our future engineers, is impacting the
    next generation of civilian professionals. Fourth, we are consuming our
    future readiness by reducing the professional development opportunities
    for our civilian workforce. We will work to mitigate these issues and
    reduce their impact on our ability to provide capabilities to the
    warfighter.

             ACCOMPLISHMENT OF OUR THREE CORE MISSILE DEFENSE TASKS

        USASMDC/ARSTRAT, a force provider for missile defense capabilities,
    is one command that is split-based with dispersed locations around the
    globe that are manned by multi-component soldiers, civilians, and
    contractors. I remain very proud of the capabilities they deliver to
    the warfighter. As our command name implies, USASMDC/ARSTRAT has a
    vital role in missile defense; JFCC IMD, STRATCOM, and GCCs around the
    globe, to include U.S. Northern Command (NORTHCOM), leverage the
    capabilities of our command. Our title 10 responsibilities include
    operational as well as planning, integration, control, and coordination
    of Army forces and capabilities in support of STRATCOM's missile
    defense mission. USASMDC/ARSTRAT also serves as the Army's global
    operational integrator for missile defense, the Army's proponent for
    global missile defense force modernization, and has a unique technical
    center to conduct missile defense related research and development in
    support of Army title 10 responsibilities.
        To accomplish our assigned missions, we remain focused on three
    core tasks:

             To provide trained and ready space and missile defense
            forces and capabilities to the warfighter and the Nation--our
            operations function that addresses today's requirements.
             To build future space and missile defense forces--our
            capability development function that is responsible for meeting
            tomorrow's requirements.
             To research, test, and integrate space, missile
            defense, and related technologies--our materiel development
            function that aims to advance the Army's and warfighter's
            missile defense capabilities the day-after-tomorrow.

              Three Core Tasks--Addressing Requirements of Today, Tomorrow,
            and the Day-After-Tomorrow

    Today's Operations Task--Provide Trained and Ready Missile Defense
            Forces and Capabilities:
        Our first core task is to provide trained and ready space and
    missile defense forces and capabilities to the GCCs and the
    warfighter--our operations function that addresses today's
    requirements. For missile defense, USASMDC/ARSTRAT Soldiers, serving on
    the homeland and in forward deployed locations, most remote and
    austere, operate the Ground-Based Midcourse Defense (GMD) consoles and
    the Army Navy/Transportable Radar Surveillance Forward-Based Mode (AN/
    TPY-2 FBM) radars. A summary of the critical missile defense
    capabilities provided daily by our missile defense professionals is
    highlighted below.
        Support to Global Ballistic Missile Defense (BMD):
        Soldiers from the 100th Missile Defense Brigade, headquartered at
    Colorado Springs, CO, and the 49th Missile Defense (MD) Battalion,
    headquartered at Fort Greely, AK, remain ready, 24/7/365, to defend our
    Nation and its territories from a limited intercontinental ballistic
    missile attack. Under the operational control of NORTHCOM, Army
    National Guard and Active component soldiers operate the GMD Fire
    Control Systems located at the Missile Defense Element in Colorado, the
    Fire Direction Center in Alaska, and the GMD Command Launch Element at
    Vandenberg Air Force Base, CA. These soldiers, in conjunction with JFCC
    IMD and NORTHCOM, also oversee the maintenance of GMD interceptors and
    ground system components. At the Fort Greely site, 49th MD Battalion
    military police secure the interceptors and communications capabilities
    at the Missile Defense Complex from physical threats.

              ``Homeland defense and support to civil authorities require
            strong, steady-state force readiness, to include a robust
            missile defense capability.''--Priorities for 21st Century
            Defense, January 2012

        Support to Regional Capabilities:
        The 100th MD Brigade is also a force provider to other GCCs for the
    AN/TPY-2 Forward-Based Mode (FBM) radar detachments and provides
    subject matter expertise on training and certification of the radars'
    operations. Operational capabilities are present today at strategic
    locations around the globe.
        GMD System Test and Development:
        Soldiers from the 100th MD Brigade actively participate in GMD test
    activities and continue to work with Missile Defense Agency (MDA)
    developers on future improvements to the GMD system.
        Ballistic Missile Early Warning:
        Critical to the Joint Force Commander's theater force protection,
    USASMDC/ARSTRAT continues to provide ballistic missile early warning
    within various theaters of operations. The 1st Space Brigade's Joint
    Tactical Ground Station (JTAGS) Detachments, under the operational
    control of STRATCOM's Joint Functional Component Command for Space, but
    operated by USASMDC/ARSTRAT space-professional Soldiers, monitor enemy
    missile launch activity and other infrared events. They provide this
    essential information to members of the air, missile defense, and
    operational communities. Our JTAGS Detachments are forward-stationed
    across critical regions, providing 24/7/365, dedicated, assured missile
    warning to STRATCOM and other GCCs in support of deployed forces.

    Tomorrow's Capability Development Task--Build Future Missile Defense
            Forces and Capabilities:
        Our second core task is to build future missile defense forces--our
    capability development function. These are the missile defense
    capabilities we will provide tomorrow. A major component of our
    capability development function is to train Army soldiers on missile
    defense systems. During the past year, USASMDC/ARSTRAT trained over
    1,500 soldiers and was recertified as an institution of excellence for
    missile defense training.
        The Army uses established and emerging processes to document its
    missile defense needs and pursue Army and Joint validation of its
    requirements. As a recognized Army Center for Analysis, USASMDC/ARSTRAT
    conducts studies to determine how best to meet the Army's assigned
    missile defense responsibilities. With this information, we develop the
    Doctrine, Organization, Training, Materiel, Leadership and Education,
    Personnel, and Facilities (DOTMLPF) domains to mitigate threats and
    vulnerabilities for the MDA-developed GMD and AN/TPY-2 FBM missile
    defense systems. This disciplined approach helps to ensure limited
    resources are applied where warfighter operational utility can be most
    effectively served.

    The Day-After-Tomorrow's Materiel Development Task--Research, Test, and
            Integrate Missile Defense related Technologies:
        In our third core task, USASDMC/ARSTRAT provides critical
    technologies to address future needs that will enhance warfighter
    effectiveness--our materiel development function. These are the
    capabilities we will provide for the day-after-tomorrow. In USASMDC/
    ARSTRAT, our technology development function is primarily focused on
    space and high altitude. While MDA is the principal materiel developer
    for ballistic missile defense, USASMDC/ARSTRAT has a number of ongoing
    missile defense related materiel development efforts, to include
    ongoing research and development of a conventional offensive strike
    capability to address ballistic missile threats. A brief summary of two
    of these research and development efforts as well as an overview of an
    essential Army testing range follows.

              Providing Greater Capability to Future Warfighters

        High Energy Laser Mobile Demonstrator:
        As we have learned often during the last decade plus of conflict,
    insurgents pose serious dangers to U.S. forward operating bases by
    employing quick-attack, low-trajectory, rockets, artillery, and mortar
    (RAM) strikes. The technology objective of the High Energy Laser Mobile
    Demonstrator (HEL MD) is to demonstrate a solid state laser weapon
    system that will serve as a complementary resource to kinetic energy
    capabilities in countering RAM projectiles. This weapon system will
    also have a significant capability against unmanned aerial systems. An
    initial demonstration is planned in the near future against short range
    mortars and unmanned aerial systems. Once completed, and if successful,
    the HEL MD will consist of a ruggedized and supportable high energy
    laser with subsystems installed on a tactical military vehicle that
    will greatly enhance the safety of deployed forces.
        Low-Cost Target Development:
        The Army is continuing to pursue a technology effort to develop a
    suite of low cost targets for the Patriot testing program. The intent
    is to design threat-representative targets at a substantially reduced
    cost for short-range ballistic missile testing. Each system has unique
    performance parameters including range, altitude, physical dimensions,
    and other characteristics tied to the testing requirements. Earlier
    this month, a Patriot missile defense system successfully intercepted a
    developmental low-cost target in a test that effectively mimicked an
    actual threat missile. We will continue to leverage technology
    advancements in order to realize less expensive targets that are
    representative of actual threats.
        Missile Defense Testing:
        USASMDC/ARSTRAT operates the Reagan Test Site at Kwajalein Atoll.
    Located in the Marshall Islands, the U.S. Army Kwajalein Atoll/Reagan
    Test Site is critical to testing requirements such as the testing of
    missile defense capabilities and testing of the U.S. Air Force's
    strategic ballistic missiles assets. In addition to its testing
    mission, personnel at the Reagan Test Site conduct continuous
    operational space surveillance and tracking.

      JOINT FUNCTIONAL COMPONENT COMMAND FOR INTEGRATED MISSILE DEFENSE--
      SYNCHRONIZING MISSILE DEFENSE OPERATIONAL LEVEL PLANNING AND SUPPORT

        JFCC IMD, STRATCOM's missile defense integrating element, has been
    operational for 8 years. Like the other JFCCs, JFCC IMD was formed to
    operationalize STRATCOM missions and allow the headquarters to focus on
    strategic-level integration and advocacy. Headquartered at Schriever
    Air Force Base in Colorado Springs, CO, the JFCC IMD is manned by
    capable Army, Navy, Air Force, Marine Corps, and civilian personnel.
        As the Secretary of Defense (SECDEF) and various combatant
    commanders have previously testified, the warfighter remains confident
    in our ability to protect the Nation against a limited ballistic
    missile attack, even in the face of the changing strategic and fiscal
    environment. In March, the SECDEF announced the administration's plan
    to increase the number of ground-based interceptors (GBIs) at Fort
    Greely from 26 to 40, bringing the total number of deployed GBIs to 44,
    and to deploy a second AN/TPY-2 FBM radar to Japan. We are working with
    MDA as it conducts site selection activities for a possible third site
    in the continental United States as directed by the National Defense
    Authorization Act for Fiscal Year 2013. An additional site has the
    potential to further bolster the Nation's capability to defend against
    threats from North Korea and Iran.

              With Priority on Defense of the Homeland, Execute a Holistic
            Global Missile Defense Plan

        The warfighter is working across the military enterprise to
    increase the integration of existing capabilities in order to maximize
    efficiency and effectiveness to protect the homeland, our deployed
    forces, friends, and allies. The key force multiplier is
    ``integration,'' which is the key mission area of JFCC IMD and directly
    supports STRATCOM.
        STRATCOM has been assigned seven Unified Command Plan (UCP)
    responsibilities for missile defense. As the operational and functional
    component command of STRATCOM, JFCC IMD has derived five key mission
    tasks from the STRATCOM UCP responsibilities:

             Synchronize operational level planning, integrate
            security cooperation activities, and recommend allocation of
            forces via the global force management process.
             Conduct operations support and asset management for
            missile defense forces and provide alternative execution
            support.
             Integrate Joint BMD training, exercises, and test
            activities.
             Advocate for future capabilities, conduct analysis and
            assessments, and recommend the operational acceptance of
            missile defense capabilities into the architecture.
             Provide information system security and network
            support to assure a reliable BMDS communications network.

        To accomplish each of these five tasks, we maintain close
    collaborative relationships with the GCCs, MDA, the Services, the
    Office of the Secretary of Defense (OSD), the Joint Staff, our allies,
    and our industry partners. Through collaborative processes, we
    continually add to our deployed capability while gaining operational
    experience and confidence in our collective ability to defend our
    Nation, deployed forces, and our friends and allies. Following, I will
    highlight some of our collaborative efforts to enhance missile defense
    planning and capabilities for both the homeland and regional
    architectures.

    Expansion and Integration of a Missile Defense Architecture:
        As I mentioned earlier, the SECDEF recently directed us to bolster
    the homeland defense capability and regional missile defense
    capabilities in response to the changing strategic environment. Over
    the past year, warfighters operationally deployed two additional AN/
    TPY-2 FBM radars, moved a Patriot unit to Turkey to support NATO,
    deployed a Terminal High Attitude Area Defense (THAAD) unit to Guam,
    and expanded our missile defense collaboration with allies. We have
    implemented Phase 1 of the European Phased Adaptive Approach (PAA) and
    continue to address the unique regional threat environments and
    partnerships to further homeland defense. Given many of the challenges
    associated with implementation of these architectures, JFCC IMD,
    supporting STRATCOM as the global synchronizer for missile defense, is
    collaborating with the GCCs to assess and address the cross regional
    gaps in the areas of planning, policy, capabilities, and operations to
    enhance our global defense capabilities. In support of homeland
    defense, we have ongoing initiatives to inform and provide the vision
    to maintain our advantageous position in missile defense.

    Global BMD Assessment:
        While regional phased adaptive approaches mature, and with homeland
    defense at the forefront, JFCC IMD collaborates closely with the GCCs
    to assess the level of operational risk associated with the execution
    of their operational plans given their allocation of BMD capabilities.
    The overall assessment serves to shape recommendations for global force
    management and advocacy efforts for future capability investments. We
    completed the 2012 Global BMD Assessment and the 2013 assessment is
    underway. The 2012 assessment identified areas where our capabilities
    can be improved--we continue to pursue affordable courses of actions to
    enhance our means to counter the threat. For 2013, we are expanding the
    previous BMD-only assessment to integrate both air and missile defense
    assets. The expanded assessment will more accurately reflect the way we
    will fight and the associated operational risks.

              ``The United States will continue to defend the homeland
            against the threat of limited ballistic missile attack''--
            Ballistic Missile Defense Review, February 2010

        With regard to regional threats, JFCC IMD assessments indicate that
    addressing missile defense threats will remain a challenge. Our
    analysis, reinforced by the 2012
        Global BMD Assessment, reinforces the fact that GCC demands for
    missile defense capabilities will always exceed the available BMD
    inventory. We must be able to address some ballistic missile threats
    before they are in the air. The shortfall highlights the need for
    continuing integration of our forces, an offensive/defensive approach
    to address the growing threat, and utilization of the full range, from
    strategic to tactical levels, of military options. In the near term, we
    will continue to address this mismatch through a comprehensive force
    management process. Over the longer term, we will continue to assess
    the evolving threat, analyze the offensive-defensive mix, and look at
    procurement pathways to meet surging demand while emphasizing
    deterrence alternatives, to include diplomatic, information, and
    economic strategies.

    Global Force Management:
        The increasing demand of BMD assets is managed by the Joint Staff
    and the Services; JFCC IMD, serving as the Joint functional manager,
    evaluates and recommends sourcing of BMD requirements based on risk to
    the GCCs, the Services, and the global BMD construct. Due to the high
    demand, low-density nature of missile defense assets, all sourcing
    decisions have a direct and significant impact to other combatant
    commanders' contingency plans. The Global Force Management process
    enables senior leaders to make more informed BMD sourcing decisions
    based on global risk.

    Multi-Regional BMD Asset Management:
        While maintaining a holistic, multi-regional perspective, but with
    priority on defense of the homeland, JFCC IMD, in coordination with
    NORTHCOM, STRATCOM, and the GCCs, manages the availability of missile
    defense assets to balance operational readiness conditions, scheduled
    and unscheduled maintenance activities, and MDA and Services' test
    requirements. This important process allows us to assess, at all times,
    our readiness to defend against a ballistic missile attack.

              ``The United States will seek to lead expanded international
            efforts for missile defense.''--Ballistic Missile Defense
            Review Report, February 2010

    Training, Exercises, and Wargames:
        JFCC IMD continues to focus on the integration of allies into
    regional missile defense architectures; we leverage training,
    exercises, and wargames to increase dialogue and partnership. We are
    underway with Nimble Titan 14, our biannual multinational BMD wargame.
    While budget constraints have caused us to reduce the scale for
    regional exercise from interactive wargames to table-top exercises, we
    are still able to accomplish many of the same objectives. For the first
    time, Nimble Titan 14 will include the participation of the Kingdom of
    Saudi Arabia, the United Arab Emirates, and Turkey. In addition to
    NATO, we anticipate over 20 participating nations and a large number of
    international observers. Our campaign goals for this iteration of
    Nimble Titan will advance national policy objectives by helping mature
    NATO's new missile defense mission area, strengthen Japanese, South
    Korean, and Australian engagement, and openly work coalition BMD issues
    with Middle East nations. We will specifically focus on sensor
    integration, offense/defense force integration, and multinational BMD
    planning solutions. The Nimble Titan wargame is an invaluable BMD
    engagement tool to advance U.S. missile defense policy. The wargame
    allows us to mature cooperative relationships with our allies as well
    as advance our Nation's and combatant command's regional security
    objectives. This event is critical to developing our combined BMD
    architectures. Conclusions derived from training, exercises, and
    wargames will continue to shape our recommendations on asset
    allocation, resources, and operational planning through the existing
    DOD and missile defense community management structures.

    Joint BMD Training:
        During this past year, DOD designated STRATCOM as the lead for
    integrating and synchronizing joint BMD training. The designation
    mandated the transfer of missile defense training resources and
    responsibilities from MDA to STRATCOM by the conclusion of this fiscal
    year. On behalf of STRATCOM, JFCC IMD will execute this new
    responsibility. In preparation, JFCC IMD recently completed a Training
    Needs Assessment to define joint missile defense gaps and to identify
    corrective courses of action. The assessment findings and
    recommendations are currently being coordinated with the BMD community
    to include the Joint Staff, GCCs, and the Services. In the near future,
    we will implement a Joint BMD training curriculum. At the tactical
    level, the curriculum will focus on those skills and tasks required of
    the joint capability provider--the operator. Comprehensive training
    will also be provided to planners and senior leaders in joint BMD
    positions.

    Warfighter Acceptance and Integrated Master Test Plan:
        As the missile defense architectures mature, operators call for a
    credible, comprehensive assessment of new capabilities to inform
    warfighter operational acceptance. The MDA, in coordination with the
    Office of the Director, Operational Test and Evaluation, executes a
    robust, developmental and operational Integrated Master Test Plan. A
    rigorous test program builds the confidence of stakeholders and
    strengthens deterrence. As part of the Warfighters' Operational
    Readiness and Acceptance process, JFCC IMD works closely with MDA and
    the GCCs to ensure our warfighters take full advantage of these tests
    to better understand the capabilities and limitations of the emerging
    systems, rapidly integrate new capabilities into the operational
    architecture, and provide improvement recommendations and new
    capability requirements back to the developer.
        In summary, JFCC IMD serves an integrating role for missile defense
    across multiple regions as we operationalize new capabilities, evolve
    command relationships, and reinforce our missile defense partnerships
    with allies. In view of worldwide events and current fiscal challenges,
    JFCC IMD remains focused on our key mission task to collaborate with
    the GCCs and MDA to posture our forces to meet the ballistic missile
    threat. Our missile defense capability continues to strengthen as
    warfighters gain increased competence and confidence in the BMD System.
    While work remains to be done, we have made significant progress in
    evolving the global missile defense capabilities, thereby strengthening
    the defense of the homeland and advancing our partnerships with allies
    in this pressing endeavor.
        army contributions to the nation's missile defense capabilities
        In addition to the MDA's materiel development efforts, the Army
    continues to develop and field systems that are integral contributors
    to our Nation's air and missile defense capabilities. A summary follows
    of the Army's major air and missile defense systems, aligned within the
    assistant Secretary of the Army for Acquisition, Logistics, and
    Technology organizational structure.

    Army Integrated Air and Missile Defense (AIAMD):
        Within the air and missile defense arena (AMD), the AIAMD program
    is the Army's highest priority effort. The program will field a common
    mission command system to all echelons of Army AMD forces to defend
    against rockets, artillery, and mortars; cruise missiles; manned and
    unmanned aircraft; air-to-ground missiles; and tactical ballistic
    missiles. The AIAMD capability integrates Army AMD sensors and shooters
    on a high-band width, low-latency, warfighter information network to
    provide the means to protect larger geographical areas. Fully
    implemented, AIAMD will also result in increased integrated fire
    control and reduced the risk of fratricide.

    Medium Extended Air Defense System (MEADS):
        As Congress is aware, the DOD decided to complete only the design
    and development phase of the MEADS program. Fiscal year 2013 was the
    final year for which the Army sought MEADS funding. The Army will
    continue to support data archival and evaluate opportunities to harvest
    technology from our MEADS investments.

    Patriot/Patriot Advanced Capability-3 (PAC-3):
        Patriot/PAC-3 is the Army's premier weapon system against air,
    cruise missile, and tactical ballistic missile threats. With the DOD
    decision to end U.S. participation in the MEADS program at completion
    of the design and development phase, the Army is investing in
    improvements to the Patriot system to support the AMD strategy,
    increase reliability, drive down operational and sustainment costs, and
    remain viable well into the future. Also, the Army continues to improve
    Patriot's capability to counter the evolving tactical ballistic
    missile, cruise missile, and air threats. The Army is integrating
    Patriot and other air defense capabilities into the AIAMD architecture.
    PAC-3 interceptors continue to expand the battlespace allowing
    operational flexibility to our Army, GCCs, and international partners.
    The next generation PAC-3 missile, the Missile Segment Enhancement, is
    on track for a 2015 delivery to the force.

    Indirect Fire Protection Capability (IFPC) Increment 2 Intercept:
        This program will provide an additional layer of short range air
    defense capability to address the threat from unmanned aerial systems,
    cruise missiles, rockets, artillery, and mortars. The IFPC, using
    existing radar assets, will be integrated with the AIAMD capability to
    provide 360 degree, multiple azimuth protection to deployed forces
    supporting stability and counterinsurgency operations.

    Joint Land Attack Cruise Missile Defense Elevated Netted Sensor System
            (JLENS):
        The JLENS system provides long-range, persistent, and elevated
    surveillance, detection, classification, identification, and fire
    control quality tracking for airborne objects such as cruise missiles,
    manned and unmanned aircraft, and large caliber rockets. The system has
    also shown the capability to track surface moving targets. In
    accordance with direction from OSD and the Joint Staff, the Army is
    completing development and testing of the JLENS capability and will
    soon begin support of a 3-year operational exercise within the NORTHCOM
    area of operations.

    Terminal High Attitude Area Defense System:
        Developed by the MDA, THAAD is a long-range, land-based, theater
    defense weapon designed to intercept threat missiles during late mid-
    course or final stage flight. THAAD capability for our GCCs recently
    became available as the MDA-designed system transfers capability to the
    Army. Just last month, THAAD Batteries 1 and 2 were granted conditional
    materiel release. Each of the batteries, consisting of 95 soldiers, an
    AN/TPY-2 FBM radar, a fire control and communications element, a
    battery support center, and an interim contractor support element, has
    completed equipment and unit collective training. The two batteries
    currently have three THAAD launching systems each but will soon have
    their full complement of six systems. Equipment fielding is also
    underway for THAAD Battery 3 and production has begun on Battery 4
    equipment. THAAD is a high demand, low density asset as demonstrated by
    the recent deployment of a battery to Guam. The addition of THAAD
    capabilities to the Army's air and missile defense portfolio brings an
    unprecedented level of protection against missile attacks to deployed
    U.S. forces, friends, and allies.

                                   CONCLUSION

        Mr. Chairman and Ranking Member Sessions, as a member of the joint
    missile defense community, the Army will continue to pursue
    operational, capability, and materiel enhancements to the Nation's
    BMDS. As a Service, the Army has lead responsibility for GMD, AN/TPY-2
    FBM, Patriot, and THAAD. Our trained and ready soldiers operating the
    GMD elements in Colorado, Alaska, and California remain on point to
    defend the Homeland against a limited intercontinental ballistic
    missile attack. As a force provider to the GCCs, our soldiers ensure
    essential regional sensor capabilities and ballistic missile early
    warning. STRATCOM, through the JFCC IMD, will continue to integrate
    BMDS capabilities to counter global asymmetric threats and protect our
    Nation, deployed forces, friends, and allies.
        While the operational, doctrine, and materiel development
    enhancements of the BMDS are essential, our most essential assets are
    the soldiers, sailors, airmen, marines, and civilians who develop,
    deploy, and operate our missile defense system. The fiscal year 2014
    budget proposal supports these essential personnel by advancing the
    modernization and improvements of the Army's missile defense systems to
    support the Nation's global BMDS. I appreciate having the opportunity
    to address missile defense matters and look forward to addressing any
    of your questions. Secure the High Ground and Army Strong!

        Senator Udall. Thank you. Thank you, General.
        Admiral Syring.

       STATEMENT OF VADM JAMES D. SYRING, USN, DIRECTOR, MISSILE
                 DEFENSE AGENCY, DEPARTMENT OF DEFENSE

        Admiral Syring. Good afternoon. Chairman Udall, Senator
    Fischer, distinguished members of the subcommittee: I
    appreciate the opportunity to testify before the subcommittee
    for the first time as the Director of the MDA.
        My priorities are to continue strong support of the
    warfighter, support what we have deployed, and deliver more
    capability to the combatant commanders. We are taking several
    steps over the next few years to implement Secretary Hagel's
    March 15 guidance to strengthen our Homeland defenses. First
    among those steps is returning the redesigned GBI to flight
    testing later this year. The successful controlled test flight
    of the GBI earlier this year gives us confidence that we have
    addressed the causes of the end game failure in the December
    2010 test. Later this month we will demonstrate the
    improvements made to the GBI fleet in an intercept test of the
    first generation operational exoatmospheric kill vehicle, the
    first such test since December 2008.
        We are increasing the operational fleet of GBIs from 30 to
    44 by 2017. This will involve the reallocation of GBIs and the
    refurbishment and reactivation of Missile Field 1 in Alaska. We
    have already begun to evaluate locations in the continental
    United States to determine a site suitable for possible future
    deployment of Homeland defense interceptors. Also, in order to
    provide more robust sensor coverage for our Homeland defense,
    this year we are working with our Japanese partners to deploy a
    second TPY-2 radar to Japan.
        We will continue to strengthen our regional defenses with
    funding to operate and sustain, command, control, battle
    management, and communications, and TPY-2 radars at fielded
    sites, and we will deliver more interceptors for THAAD, Aegis
    BMD, and others. MDA will continue to fund upgrades to the
    phase 1 of the EPAA and proceed on our schedule to complete the
    Aegis Ashore sites in Romania by 2015 and Poland by 2018.
        Mr. Chairman, when I arrived at the MDA last November, I
    was impressed with the organization and professionalism of the
    workforce. They are highly motivated, they're the best at what
    they do. It's an honor to serve with them every day.
        I ask that my written statement be accepted for the record.
        Senator Udall. Without objection.
        Admiral Syring. I look forward to answering your questions,
    sir.
        [The prepared statement of Admiral Syring follows:]

                Prepared Statement by VADM James D. Syring, USN

        Good afternoon, Chairman Udall, Ranking Member Sessions,
    distinguished members of the subcommittee. I appreciate this
    opportunity to testify before you for the first time as the Director of
    the Missile Defense Agency (MDA). Our current budget request of $7.684
    billion for fiscal year 2014 will continue the development of defenses
    for our Nation, deployed forces, allies, and international partners
    against increasingly capable ballistic missiles. Since the previous
    Director testified before you last year, we have made good progress in
    the development and deployment of the Ballistic Missile Defense System
    (BMDS) and we continue to build capabilities to defeat more complex
    threats. My priorities in fiscal year 2014 are to continue our strong
    support of the warfighter, fix what needs to be fixed, support what we
    have deployed, and deliver more capability to the combatant commanders
    (COCOMs).

                            BALLISTIC MISSILE THREAT

        The threat continues to grow as our potential adversaries are
    acquiring a greater number of ballistic missiles, increasing their
    range and making them more complex, survivable, reliable, and accurate.
    The missile defense mission is becoming more challenging as potential
    adversaries incorporate BMD countermeasures. Space-launch activities in
    Iran and North Korea involve multistage systems that serve to further
    the development of ballistic missile technology for longer-range
    systems including intercontinental ballistic missile (ICBM)
    technologies and systems. As the Director for National Intelligence
    recently stated, ``Iran has demonstrated an ability to launch small
    satellites, and we grow increasingly concerned that these technical
    steps . . . provide Tehran with the means and motivation to develop
    larger space-launch vehicles and longer-range missiles, including an
    ICBM.'' In addition to the Taepo Dong 2 SLV/ICBM, North Korea is
    developing a road-mobile ICBM and an intermediate-range ballistic
    missile (IRBM) capable of reaching Guam, the Aleutian Islands, and
    potentially Hawaii. Iran also has steadily increased its ballistic
    missile force, deploying next generation short- and medium-range
    ballistic missiles (SRBMs and MRBMs) with increasing accuracy and new
    submunition payloads. Iran has publicly demonstrated the ability to
    launch simultaneous salvos of multiple rockets and missiles and openly
    discussed tests of an anti-ship ballistic missile.

                           SUPPORT FOR THE WARFIGHTER

        Our overriding goal is to provide support to the warfighter. To
    this end we will increase system reliability, focusing especially on
    improving the performance of the Ground Based Interceptors (GBIs) and
    the Aegis Weapons System, including the Standard Missile (SM-3)
    interceptors and continuing our support for operational systems like
    the AN/TPY-2 radar and the Command, Control, Battle Management and
    Communications (C2BMC) at fielded sites. We will also deliver more
    interceptors for Terminal High Altitude Area Defense (THAAD), Aegis
    Ballistic Missile Defense (BMD), and, pending a successful return to
    intercept, Ground-based Midcourse Defense (GMD) as we look for ways to
    make it more operationally effective and cost-effective.
        We remain committed to conducting developmental and operationally
    realistic tests and use a ``fly-before-you-buy'' approach. MDA
    continues to work closely with the Director, Operational Test &
    Evaluation (DOT&E) and collaboratively with independent testers and the
    Services. We follow an Integrated Master Test Plan (IMTP), a
    comprehensive, integrated, and cost-effective flight and ground test
    program that blends developmental testing with tests that employ
    operationally realistic conditions to demonstrate BMD capabilities
    against current and projected threats. I have reviewed the DOT&E 2012
    Assessment of the BMDS, which identified areas that need improvement,
    specifically in the areas of BMDS system-level testing and the
    accreditation of BMDS element models. The report's findings
    acknowledged our integration accomplishments. We must still work to
    improve battle management for a fully integrated BMDS. We also agree
    that we need improved GMD performance models to fully characterize
    system performance. Similarly, although the report did note our
    progress in testing against targets with certain SRBM and MRBM
    characteristics, the acquisition of additional accredited target models
    will help evaluate the performance of all phases of regional defense,
    specifically for the European Phased Adaptive Approach (EPAA).
        In order to provide the warfighters confidence in the execution of
    their integrated air and missile defense plans and the opportunity to
    refine operational doctrine and tactics, this year we plan to
    demonstrate the ability of the integrated BMDS to defeat up to three
    near-simultaneous air and ballistic threats. In the integrated BMDS
    flight test (FTI-01) this past October, the largest, most complex
    ballistic missile defense test ever attempted, we demonstrated the
    capability of the BMDS to engage upon a raid of five near-simultaneous
    representative threats, air-breathing and ballistic missiles, hitting
    four out of five targets. In this year's operational BMDS flight test
    we will use an operationally relevant scenario to demonstrate the
    integration of regional defense systems. In FTO-01 we will engage two
    medium-range ballistic missile targets launched within minutes of one
    another with Aegis BMD and THAAD using Forward Based Mode (FBM) AN/TPY-
    2 radar and the C2BMC system operated by soldiers, sailors, and airmen.
    In fiscal year 2014 President's Budget Submission (April 2013) we have
    added 12 more flight tests to the IMTP, going from 37 tests in IMTP
    version 12.2 to 49 tests in IMTP version 13.1. As the BMDS matures we
    need to increase complexity in our flight tests by doing the following:
    adding system-level operational tests; increasing the number of BMDS
    assets in those tests; increasing the numbers, types (ballistic and
    air-breathing) and ranges of the threat representative targets we use
    and conducting more simultaneous launches; and adding the entire
    warfighting chain of command to evaluate concepts of operation and
    tactics, techniques and procedures. We have also increased the number
    of ground-tests in those planning periods from 88 to 106.

                                HOMELAND DEFENSE

        MDA's highest near-term priority remains the successful GMD
    intercept flight test of the newest GBI Exo-atmospheric Kill Vehicle
    (EKV)--the Capability Enhancement (CE)-II EKV. The successful non-
    intercept controlled flight test of the CE-II GBI earlier this year
    (CTV-01) gives us confidence and cautious optimism we have addressed
    the causes of the FTG-06a endgame failure in December 2010 and are on
    the right track for a successful return to intercept using the
    redesigned EKV. Based on our analysis of the data from CTV-01, we
    currently plan to conduct FTG-06b in early fiscal year 2014 to
    demonstrate the ability of the CE II EKV to discriminate and intercept
    a lethal object from a representative ICBM target scene. We plan to
    conduct another intercept test using a two- or three-stage GBI and the
    CE II EKV by the end of fiscal year 2014 (FTG-09).
        With DOT&E concurrence, we plan to accelerate the next intercept
    test of the CE-I EKV (FTG-07) to take place this May or June in order
    to increase warfighter confidence and maintain a testing cadence. We
    have made numerous improvements to the CE-I fleet through
    refurbishments since the last successful CE-I flight test in 2008, and
    this test will demonstrate the reliability of those refurbished GBIs. I
    am committed to flight testing the GMD system, at a minimum, once per
    year; however, I can assure the committee that I will not approve the
    execution of a flight test unless I believe we are ready. We will work
    closely with DOT&E to develop scenarios and targets for all of our
    tests.
        We share the Government Accountability Office concern about
    concurrency in the GMD program and have restructured our GMD return to
    intercept (RTI) plan and schedule to design and qualify EKV fixes that
    address root cause of the FTG-06a failure, and confirm the fixes
    through rigorous ground and flight testing. The original RTI plan
    accepted significant and excessive concurrency (parallel development,
    testing and production activities) and the result has been continued
    slips in the RTI plan. The current baseline RTI plan reduces this
    concurrency using systems engineering ``gated'' events that confirm
    critical components are ready to proceed to testing and production
    while leaving options open to integrate lower risk components.
        Today, 30 operational GBIs protect the United States against a
    limited ICBM attack from current regional threats, such as North Korea
    and Iran. Over the past year we have achieved higher operational
    availability rates with the GMD system, mainly through high levels of
    redundancy in the GMD Fire Control and communications systems. The
    currently operational hardened Fort Greely, AK, (FGA) power plant
    distributes commercial power and provides generator power during
    outages. We continued to maintain and improve the GMD guidance system
    and engagement performance through software upgrades of the CE-I and
    CE-II EKVs. Last year we completed construction of the 14-silo Missile
    Field-2 at FGA and emplaced the first GBI in that field in March 2012.
    We also relocated the last interceptors from Missile Field-1. This year
    we will continue with our Enhanced Reliability and Stockpile
    Reliability Programs to track performance, aging, and reliability
    metrics, software updates, and technology enhancements for all GMD
    ground systems.
        MDA requests $1,033.9 million in fiscal year 2014 in Research,
    Development, Test, and Evaluation (RDT&E) funding for GMD to sustain
    the current system and take steps to address the continued development
    of ICBMs by countries such as North Korea. In addition to our flight
    testing activities, we will continue our GMD reliability activities and
    fleet upgrade program. We are also increasing the number of GBIs we
    plan to produce and deploy. As announced on March 15 by Secretary
    Hagel, consistent with the February 2010 Ballistic Missile Defense
    Review (BMDR), and assuming a successful return to intercept, we plan
    to increase our operational GBI fleet from 30 to 44 in 2017 by re-
    allocating GBIs from the spares and stockpile reliability program. We
    will reset this program with the procurement of 14 additional GBIs, 2
    per year, starting in fiscal year 2016. We also request $135 million in
    fiscal year 2014 to rebuild a hardened Missile Field 1 critical to
    achieving the 44-operational-GBI capability.
        In fiscal year 2014 we will continue work on the GBI In-Flight
    Interceptor Communication System (IFCS) Data Terminal (IDT) at Fort
    Drum, NY, which we will deliver in early fiscal year 2015 and is
    planned to be operational in 2015. The East Coast IDT will enable
    communication with GBIs launched from Fort Greely, AK, and Vandenberg
    Air Force Base in California over longer distances and improve defenses
    for the eastern United States by increasing system performance in
    specific engagement scenarios.
        Pursuant to the National Defense Authorization Act for Fiscal Year
    2013, this year we will begin a siting study for a potential Missile
    Field in the continental United States (CONUS). MDA has initiated a
    CONUS Interceptor Site (CIS) study to evaluate several sites for the
    potential future deployment of additional GBIs capable of protecting
    the homeland against threats from nations such as North Korea and Iran.
    MDA will conduct a siting study this year to inform the President's
    Budget submission for fiscal year 2015. The Environmental Impact
    Statement will be completed by the first quarter of fiscal year 2016.
    These efforts would shorten the time to deploy additional GBIs if a
    future decision to do so were taken.
        We are also improving our homeland defense options with the
    continued development of the two-stage GBI. The two-stage GBI has less
    burn time than the three-stage version, which allows it to operate
    within shorter engagement timelines, and will preserve future
    deployment options.
        To maintain readiness in our network of strategic radars, last year
    MDA worked with the Air Force to begin upgrading the Early Warning
    Radar (EWR) at Clear, AK, to give it a missile defense capability,
    providing improved ballistic missile defense sensor coverage over the
    continental United States and reducing sustainment and operating costs.
    For fiscal year 2014 we are requesting $51 million to continue this
    work. Along with the Clear EWR contract award, we also exercised a
    contract option in fiscal year 2013 to upgrade the Cape Cod EWR. The
    upgraded Clear EWR will be added to the BMDS operational baseline in
    fiscal year 2017, with the upgraded Cape Cod EWR added in fiscal year
    2018. MDA plans to transfer the Beale (California), Fylingdales (United
    Kingdom), and Thule (Greenland) Upgraded Early Warning Radars to the
    Air Force in the later part of fiscal year 2013 once all three radars
    are operating with the same software configuration.
        This year we are also working with our Japanese partners to deploy
    a second AN/TPY-2 radar to the U.S. Pacific Command (PACOM) Area of
    Responsibility to enhance regional defenses and provide more robust
    sensor coverage for homeland defense.
        We are requesting $44.5 million in fiscal year 2014 for continued
    Sea Based X-band (SBX) radar operations. For affordability reasons, MDA
    transferred the SBX to Limited Test Support Status, where the radar
    continues to support the BMDS test program and remains available for
    contingency deployment under the operational command of PACOM. We
    completed the transfer of the SBX vessel to the U.S. Navy Military
    Sealift Command in fiscal year 2012. New SBX operational software with
    improved discrimination and debris mitigation was delivered and
    completed in January 2013. The new SBX configuration will complete
    integration fielding and testing with GMD in the third quarter of
    fiscal year 2014.

                               REGIONAL DEFENSES

        Deployment of regional defenses to protect our deployed forces,
    allies and international partners remains one of our top priorities.
    Our fiscal year 2014 budget request funds the continued development and
    deployment of defenses against SRBMs, MRBMs, and IRBMs in support of
    combatant commanders' near-term and future priorities.
    Terminal High Altitude Area Defense
        MDA delivered the 50th THAAD interceptor last year, completing the
    initial interceptor load for the two fielded batteries. With the
    conclusion of unit collective training, MDA also completed fielding of
    the second THAAD battery. The U.S. Army's granting of Conditional
    Materiel Release for the THAAD weapon system made THAAD available for
    worldwide operational employment. In recent tests we demonstrated
    THAAD's ability to intercept an MRBM as part of an integrated
    operational test with PAC-3 and Aegis BMD (FTI-01) and its ability to
    detect, track, and engage multiple simultaneous targets (FTT-12).
        In fiscal year 2013 we are delivering the third THAAD battery to
    the U.S. Army and initiating soldier new equipment training, which will
    be completed in fiscal year 2014. MDA will continue to deliver THAAD
    interceptors to inventory, achieving 82 interceptors by the end of this
    fiscal year and 98 interceptors by the end of fiscal year 2014. For
    fiscal year 2014, MDA is requesting $581 million for THAAD procurement,
    which includes the purchase of 36 THAAD interceptors and 6 launchers,
    and 2 THAAD Tactical Station Groups for the sixth THAAD Battery. In
    fiscal year 2014 we expect to deliver the fourth THAAD Battery. Our
    current plans are to deliver six batteries and, based on combatant
    commanders' desires, we are working with the Army to analyze a
    requirement for a seventh THAAD Battery within the Future Years Defense
    Program. We also are requesting $269 million in RDT&E funding in fiscal
    year 2014 and $92 million for THAAD operations and maintenance. We will
    continue to enhance THAAD's ability to operate through post-intercept
    debris, enable launch of THAAD's interceptors using sensor data
    provided by other BMDS sensors, and maintain capability against current
    and evolving threats.

    Aegis Ballistic Missile Defense
        Last year we installed the Aegis BMD 3.6 weapon system on 3 Aegis
    ships, for a total of 24 Aegis BMD 3.6 ships, and completed 2 Aegis BMD
    4.0 installations. We also commenced two more Aegis BMD 4.0 installs
    and initiated BMD 5.0 install on the Aegis BMD test ship, the USS John
    Paul Jones, which will replace USS Lake Erie in that role. This
    approach supports Navy and MDA testing of the Integrated Air and
    Missile Defense combat system. We now have a total of 27 certified
    Aegis BMD ships. This past year we delivered 11 SM-3 Block IAs and 2
    SM-3 Block IBs, both of which were expended in tests. By the end of
    2014, up to 39 SM-3 Block IBs will be delivered. With the Japan
    Ministry of Defense, we continued SM-3 Block IIA system and component
    Preliminary Design Reviews and awarded a contract to complete SM-3 IIA
    development.
        In May 2012, we conducted a lethal engagement resulting in the
    successful intercept of a unitary separating target with the second-
    generation Aegis BMD 4.0 combat weapon system onboard the USS Lake Erie
    and an SM-3 IB guided missile (FTM-16 Event 2a). This test also
    validated the resolution of the previous flight test issue. In June
    2012, we demonstrated again the ability of the SM-3 IB and the Aegis
    BMD 4.0 combat system to intercept of a separating ballistic missile
    target (FTM-18). Both intercept tests represented significant
    accomplishments for the next generation Aegis Weapon System and SM-3
    for regional defense and specifically in support of EPAA Phase II. In
    the integrated FTI-01 BMDS flight test this past October, the USS
    Fitzgerald successfully engaged a low flying cruise missile over water.
    The Aegis combat system also tracked an SRBM and launched an SM-3 IA
    against that threat space. Despite indication of a nominal flight of
    the SM-3 IA, we did not achieve an intercept. We have a Failure Review
    Board currently investigating why this occurred. We have combed through
    ground test data from all fleet rounds and have not found any rounds
    with the same ground test results as the SM-3 IA used in FTI-01, which
    gives us confidence in all deployed SM-3 IAs. This past February, in
    FTM-20, we successfully intercepted a unitary MRBM target using the SM-
    3 IA and the Aegis BMD 4.0 weapon system in a remote engagement using
    data from the Space Tracking and Surveillance System demonstration
    (STSS-D) satellites. We passed very high quality fire control quality
    data provided from STSS-D satellites through C2BMC. This was a highly
    complex test, and it proved the value of an integrated C2 and sensor
    network and the use of space-based sensors.
        This year and next will be busy years for Aegis BMD flight testing
    as we continue to demonstrate capability of the Aegis BMD 4.0 Weapons
    System with the Standard Missile Block IB in a series of intercept
    flight tests--FTM-19, FTM-21 and FTM-22. We have postponed FTM-19 to
    improve manufacturing processes and procedures due to previous
    subcomponent reliability issues. We are now confident we understand
    these issues to continue with the test program and initial production
    decisions. FTM-19 is an important step for an All Up Round production
    decision of the SM-3 IB. Later this fall, in FTM-21, an Aegis BMD ship
    will demonstrate a salvo fire capability. FTM-22 will demonstrate the
    IOT&E of the SM-3 IB against a complex MRBM target. These two tests
    will support a full-rate production decision. Tests of the SM-3 IB
    against various targets from both ships and our first flight testing
    from Aegis Ashore continue in fiscal year 2014.
        In response to the combatant commanders' demand signal for more BMD
    ships with the latest tested capability, Navy and MDA are jointly
    executing efforts to upgrade Aegis Destroyers with BMD capability,
    incorporating Aegis BMD into the Navy's Aegis DDG Modernization Program
    and new construction of Aegis BMD DDGs. In 2014, two previously
    installed Aegis BMD ships will be upgraded with the 4.0 weapons system
    configuration. In addition to the ship upgrades, one non-BMD capable
    ship is programmed to start the Aegis Modernization Program.
    Construction of DDG 113, the first Aegis Destroyer built from the keel
    up with the BMD capability, is well underway. Ships identified for
    homeport transfer to Rota, Spain, will have been upgraded or programmed
    to receive the BMD installation.
        We also continue development of a Sea-Based Terminal capability to
    provide protection of maritime forces against advanced anti-ship
    ballistic missiles and increased layered defense for forces ashore.
    Using an incremental development approach, we are incorporating BMD
    capability into the Navy's SM-6 guided missile and the BMD 5.0 weapon
    system. We expect to test and certify the first increment of Sea-Based
    Terminal capability in 2015 and 2016.
        We are requesting $937 million in RDT&E funding in fiscal year 2014
    to continue the development, testing and, installation of Aegis BMD
    capabilities to defeat longer range and more sophisticated ballistic
    missiles launched in larger raid sizes. We also request $581 million in
    fiscal year 2014 for the procurement of 52 SM-3 IB guided missiles and
    $18 million for operations and maintenance of SM-3 IAs. By the end of
    fiscal year 2014, we plan to deliver a total of 180 SM-3s, including IA
    and IB variants.

    European Phased Adaptive Approach
        We will continue to support the EPAA to provide coverage of
    European NATO territory from Iranian ballistic missile threats. In 2011
    MDA completed Phase 1 of the EPAA to provide coverage of NATO territory
    in Europe with the deployment of Aegis BMD 3.6 ships with SM-3 IAs and
    a SPY-1 radar in the Mediterranean, the AN/TPY-2 radar (FBM) to U.S.
    European Command (EUCOM) in Turkey, and the C2BMC Spiral 6.4 system at
    Ramstein AFB in Germany. We will continue to invest resources for EPAA
    development, testing, and deployment.
        Our goal in EPAA Phase 2 is to provide a robust capability against
    SRBMs and MRBMs by ensuring the system provides multiple opportunities
    to engage each threat missile in flight. The architecture includes the
    deployment of the Aegis BMD 4.0 and 5.0 weapon systems with SM-3 IBs at
    sea and at an Aegis Ashore site in Romania. In fiscal year 2012 MDA
    conducted Romania Aegis Ashore planning and environmental studies and
    began component production necessary for early integration and testing
    of the Aegis Ashore system by 2015. Aegis Ashore began construction
    activities in 2012 in Moorestown, New Jersey and construction of a test
    site in Kauai, Hawaii. We signed an overarching Memorandum of Agreement
    with the U.S. Navy regarding Operations and Sustainment of the European
    Aegis Ashore sites. The Aegis Ashore Missile Defense Test Complex at
    the Pacific Missile Range Facility (PMRF) will support flight testing
    of Aegis Ashore capabilities in an operational configuration. The
    complex will be available to conduct the first Aegis Ashore test firing
    in fiscal year 2014. MDA will initiate construction of the Aegis Ashore
    site in Deveselu, Romania with the delivery of the deckhouse in fiscal
    year 2014. The site will be operational by December 2015. MDA requests
    $85 million in fiscal year 2014 to continue construction of the Aegis
    Ashore site in Romania.
        In support of EPAA Phase 3, the SM-3 Block IIA, which we are co-
    developing with the Japanese Government and an upgraded version of the
    Aegis Weapons System are on schedule to be available for deployment in
    2018 at Aegis Ashore sites in Romania and Poland and at sea. Deployment
    of Phase 3 will enhance and expand protection for European NATO
    countries and U.S. forces through the region from MRBMs and IRBMs from
    the Middle East. The upgraded Aegis Weapons System combined with the
    faster, longer reaching SM-3 IIA will provide capability to counter
    more sophisticated threats when compared to the SM-3 IA and IB and will
    extend coverage to NATO allies in Europe threatened by longer range
    ballistic missiles. With the completion of Phase 3, EPAA will provide
    upper-tier coverage of NATO Europe. As we work closely with Navy in
    modernization, we will also install the 5.1 Aegis Weapons System on
    ships for deployment worldwide in support of the Combatant Commanders.
    We will also install and deploy the 5.1 system in the two Aegis Ashore
    batteries. This past year we continued development of the Aegis BMD 5.1
    fire control system and awarded the SM-3 IIA contract to complete
    missile development. In fiscal year 2014 we will conduct the first fly-
    out test of the SM-3 IIA propulsion stack to measure its performance.
    MDA requests $308.5 million in RDT&E funding in fiscal year 2014 to
    continue the bilateral, cooperative effort.

    Command, Control, Battle Management, and Communications and Sensors
        We successfully demonstrated this past year our ability to
    interoperate between NATO's Active Layered Theater Ballistic Missile
    Defense system and C2BMC. The NATO BMD Operations Center (BMDOC) at
    Ramstein Air Base is NATO's 24/7 command and control center for missile
    defense. Today, the NATO BMDOC participates in joint exercises with the
    EUCOM missile and air defense architecture and is responsible for
    command and control of the multi-national Patriot units currently
    deployed in Turkey.
        In 2012 we continued to support warfighter operations of the EUCOM
    BMDS capability for regional defense and executed key warfighter events
    to demonstrate readiness for defense of Israel by linking the AN/TPY-2
    and C2BMC ballistic missile threat tracks to Aegis BMD, THAAD, and
    Patriot shooters in a distributed environment using operational
    communications and crews. In partnership with the Combatant Commands,
    we maintain the capability to engage multiple simultaneous threat
    attacks in the region. Last year we completed the AN/TPY-2 radar
    deployment to U.S. Central Command (CENTCOM), where we deployed a C2BMC
    suite ahead of schedule as well as the Global Engagement Manager (GEM)
    for control of the AN/TPY-2 radar to enhance regional missile defense.
        We request $300 million in fiscal year 2014 to develop and deploy
    BMDS sensors, and $145.8 million to operate and sustain the nine AN/
    TPY-2 radars and support the UEWRs and Cobra Dane EWR.
        We request $418.4 million in fiscal year 2014 to operate and
    sustain C2BMC at fielded sites and continue C2BMC program spiral
    development of software and engineering to incorporate enhanced C2BMC
    capability into the battle management architecture and promote further
    interoperability among the BMDS elements, incorporate boost phase
    tracking, and improve system-level correlation and tracking. We will
    also continue communications support for the AN/TPY-2 radars and C2BMC
    upgrades.
        We request $44.9 million for continued operation of the Space
    Tracking and Surveillance System in fiscal year 2014. In fiscal year
    2012, MDA operated STSS demonstration satellites (STSS-D) around the
    clock with availability exceeding 95 percent as well as the Near Field
    Infrared Experiment satellite to collect Earth limb phenomenology. We
    continue to operate the two STSS-D satellites to conduct cooperative
    tests with other BMDS elements and demonstrate the capability of the
    satellites against targets of opportunity to provide high precision,
    real-time tracking of missiles and midcourse objects that enable
    closing the fire control loops with BMDS interceptors. We conducted a
    successful intercept of a threat MRBM last February by Aegis BMD system
    using only STSS-D data to provide launch data for the SM-3 IA guided
    missile (FTM-20).
        The Department of Defense has terminated the Precision Tracking
    Space System (PTSS). Concurrency in the development schedule and
    uncertainty in the cost estimates put in doubt long-term fiscal
    sustainability. Moreover, the PTSS acquisition strategy was high risk.
    We believe we need to be in space for infrared (IR) discrimination
    capability, but for now we can address the threat with other land-based
    sensors in key locations, which will allow us to provide support to the
    warfighter in the near term and assume less acquisition risk. A study
    has been initiated to determine how best to support future sensor
    requirements and we are exploring technologies to improve the
    capabilities of ground, air, and space sensors.

                          DEVELOPING NEW CAPABILITIES

        We are developing fiscally sustainable advanced BMD technologies
    that can be integrated into the BMDS to adapt as threats change. Our
    investments are focused on technology that brings upgradeable
    capability to the warfighter. For sensors, in the near-term we will
    integrate and demonstrate electro-optical and infrared sensors using
    available airborne UAV platforms to create a precision track our
    shooters can use. . . For interceptors, our overall strategy includes
    making near-term investments in interceptor technology that accelerate
    our ability to use a kill vehicle singularly or in combination in a way
    that balances our overall approach to solving the very difficult
    problems of lethal object discrimination, limited inventory and cost
    per kill. We will also explore other ways to improve the exchange ratio
    in the missile defense battle.
        Last year, we restructured our high power directed energy program
    and began building the foundation for the next-generation laser system
    by competing two promising lightweight, highly efficient solid state
    lasers, one at Lawrence Livermore National Laboratory and the other at
    MIT Lincoln Laboratory. At MIT Lincoln Laboratory, we built a small-
    scale prototype of a laser device that exploits a novel technique for
    combining the output of individual fiber lasers. This year, for the
    fiber laser, we will team with the Defense Advanced Research Projects
    Agency to determine the most efficient method of combining laser beams.
    We will improve the performance of the competing Diode Pumped Alkali
    Laser System at Lawrence Livermore National Laboratory through a series
    of laser system upgrades. MDA is requesting $43.5 million in fiscal
    year 2014 to demonstrate the efficiency, producibility, and scaling
    potential of the two candidate lasers.
        MDA requests $77.3 million in fiscal year 2014 to evaluate and
    research component and sensor technology requirements. Incorporating
    promising hardware and software from prior programs into our advanced
    sensor test bed, we will prove the value of emerging discrimination
    concepts.
        Despite the commonality of their mission and functions, components
    on the current midcourse phase interceptors, the GBI and SM-3 kill
    vehicles, were developed independently at a substantial cost over the
    past decade. We are looking at the benefits of developing common kill
    vehicle technology for the GBI and SM-3 variants, focusing in
    particular on the ability to address future technology advancements
    through the development of a similar set of components, subsystems, and
    software. This common kill vehicle technology effort initially will
    perform risk reduction and examine other technologies that may improve
    future interceptor capabilities. This effort is in keeping with the
    plan for the next generation exo-atmospheric kill vehicle, as directed
    by section 225 of the National Defense Authorization Act for Fiscal
    Year 2013.
        Given changes in the assessment of the threat from North Korea to
    the U.S. Homeland, as well as delays in the potential deployment of any
    SM-3 IIB interceptor resulting from delayed technology development due
    to budget reductions, the Department is evaluating alternatives to
    hedge against future threat technology advancements. The Department is
    no longer planning for the SM-3 IIB program and does not request
    funding for the program in fiscal year 2014. In addition to the cuts
    imposed in the fiscal year 2012 Appropriation and fiscal year 2013
    funding, analyses show a larger missile would be required to achieve
    the necessary burn out velocity, and a larger missile design would have
    taken additional time and resources, pushing the initial operational
    capability out past 2022. Our near- to mid-term focus for homeland
    defense will be to increase GMD capability, to include increasing
    deployed GBIs from 30 to 44, investing in Common Kill Vehicle
    technology, and conducting siting and EIS studies for a new U.S. GBI
    missile field.
        MDA requests $19.2 million in fiscal year 2014 to continue
    partnerships with industry and universities to seek innovative concepts
    in sensors, weapons, and advanced algorithms. We will leverage
    University-to-University International Research opportunities with
    allied nations to enhance Advanced Technology initiatives and build
    stronger relationships with our international partners and NATO allies.

                           INTERNATIONAL COOPERATION

        MDA is engaged either bilaterally or multilaterally with nearly two
    dozen countries and international organizations, such as NATO and the
    Gulf Cooperation Council.
        In Asia-Pacific, the United States and Japan are working together
    to support the deployment of the second U.S. forward-based AN/TPY-2
    radar. In addition, we continue to develop collaboratively the SM-3 IIA
    to enable U.S. and Japanese Aegis BMD ships to engage MRBMs and IRBMs
    and, when coupled with the upgraded Aegis BMD weapon system, more
    sophisticated ballistic missile threats. This year we signed a Second
    Amendment to the formal joint agreement with Japan administering the
    SM-3 Block IIA Cooperative Development (SCD) effort. The amendment will
    reduce risk in the SCD program by adding flight tests and sufficient
    time in the schedule for additional engineering analysis between flight
    tests.
        This budget continues MDA's longstanding commitment in support of
    Israeli defensive efforts. MDA is working with the Israel Missile
    Defense Organization (IMDO) to deliver Iron Dome batteries and
    interceptors. Iron Dome has had significant success protecting the
    Israeli population against short-range rockets and large artillery
    shells. MDA has been working closely with U.S. Department of Defense
    leadership to ensure U.S. funding for Iron Dome is being used
    effectively to produce additional Iron Dome batteries and interceptors.
    Any further U.S. contributions on Iron Dome will be governed by a
    formal international agreement. MDA is actively seeking Iron Dome co-
    production opportunities for U.S. defense industry. We are negotiating
    to obtain available technical data packages and data rights should
    there be a future U.S. defense requirement for this weapon system.
        We are also developing missile defense systems with Israel to
    address regional ballistic missile threats. The David's Sling Weapon
    System is designed to defeat SRBM threats. IMDO and MDA completed the
    first phase of the development of David's Sling last November with a
    successful intercept test. MDA and Israel also are co-developing the
    Arrow-3 Upper Tier interceptor. The advanced design of this interceptor
    was successfully tested this past February in a non-intercept test; a
    second fly-out test is scheduled for fiscal year 2014. MDA also
    participated in Austere Challenge 2012 exercises, which successfully
    demonstrated the concept of operations for the U.S.-Israel BMD
    architecture and future interoperability.
        Elsewhere in the Middle East, U.S. BMD capabilities continue to
    expand in defense of forward-deployed U.S. armed forces, allies, and
    partners. Major MDA activities in the Middle East involve relationships
    with regional partners expressing interest in procuring U.S. systems.
    Last year, MDA was officially designated as a Foreign Military Sales
    (FMS) Implementing Agency for THAAD and the AN/TPY-2 radar. In addition
    to our current $3.5 billion FMS case with the United Arab Emirates, we
    are engaged with several other potential FMS customers for these very
    capable systems.
        In Europe, aside from EPAA planning and fielding, MDA maintains
    active bilateral relationships with our close allies in that region.

                                   CONCLUSION

        Mr. Chairman, when I arrived at the Missile Defense Agency last
    November, I was impressed with the organization and the dedication and
    professionalism of the government and contractor workforce. The Agency
    is settling into the post-base realignment and closure configuration,
    which we completed in fiscal year 2011. This has been a challenging
    period for our personnel, but we have stayed focused on our core
    mission. I am proud to lead the people behind today's missile defense
    program. They are highly motivated and the very best in the world at
    what they do.
        The impact of the sequestration on the program and workforce is
    significant. We will see limitations in our ability to deliver future
    homeland defense capabilities. To mitigate some of the effects of
    sequestration cuts, I will be working with the Department to submit an
    Above Threshold Reprogramming request as part of the Department's
    larger request this year.
        Whatever happens, I am dedicated to executing successful GMD
    intercept flight tests over the coming year and will continue to strive
    to ensure reliability in our operational homeland defenses. We have
    made good progress in our work with our international partners, and I
    want to continue those important efforts. We will continue our work
    with the warfighter to develop, test, and field a networked, global BMD
    system that is flexible, survivable, and affordable. We will work on
    ways to cut sustainment costs, reduce high-risk acquisition
    concurrency, improve system reliability, and deliver capabilities as
    promised. Mindful that today's security environment is unlikely to
    mirror that of tomorrow, we will continue to invest in promising and
    potentially game-changing technology programs to ensure the BMDS will
    be capable of defeating the complex threats we expect to face in the
    future.
        I look forward to answering the subcommittee's questions. Thank
    you.

        Senator Udall. Thank you, Admiral.
        Ms. Chaplain.

     STATEMENT OF MS. CRISTINA T. CHAPLAIN, DIRECTOR, ACQUISITION
       AND SOURCING MANAGEMENT, GOVERNMENT ACCOUNTABILITY OFFICE

        Ms. Chaplain. Chairman Udall, Senator Fischer, and members
    of the subcommittee: Thank you for inviting me here today. I'd
    like to make a couple of brief points about MDA's acquisition
    progress.
        In addition to the successful test events just mentioned,
    MDA has reduced acquisition risk in some key programs, such as
    the SM-3 2A interceptor, where MDA postponed the start of
    product development until it addressed several critical
    technical challenges. That's a good step because you're going
    to prevent problems that could cost a lot later on in a
    program.
        MDA has also taken important steps to clarify the baselines
    it reports to Congress, for example by defining more clearly
    what costs are presented and what costs are not being presented
    and why. But more needs to be done to put acquisitions on a
    sounder footing and to help Congress prioritize limited
    resources.
        For example, at this time costs for programs still cannot
    be compared over time. Some programs are still following high-
    risk strategies. For example, MDA is using new targets for the
    first time in major operational tests, rather than
    demonstrating them in a less complex and expensive scenario.
        Moreover, as we pointed out in our report, in light of
    budget constraints we believe MDA should more rigorously
    analyze alternatives before committing to new investments. We
    reported that two programs recently proposed for cancellation
    did not have robust analyses of alternatives.
        Finally, I'd just like to recognize Admiral Syring's
    commitment to improving acquisition and reducing risk for MDA.
    We look forward to working with him and the agency in the
    future on doing so.
        So thank you. I'm happy to answer any questions.
        [The prepared statement of Ms. Chaplain follows:]

                 Prepared Statement by Ms. Cristina T. Chaplain

        Chairman Udall, Ranking Member Sessions, and members of the
    subcommittee:
        I am pleased to be here today to discuss the progress made and
    challenges that remain for the Department of Defense's (DOD) Missile
    Defense Agency (MDA) in developing and fielding the Ballistic Missile
    Defense System (BMDS). Since MDA was established in 2002, it has spent
    over $90 billion to provide protection from enemy ballistic missiles by
    developing battle management systems, sensors that identify incoming
    threats, and missiles to intercept them. MDA plans to spend about $7.5
    billion per year through 2018. Since its inception, MDA has been
    operating in an environment of tight timeframes for delivering
    capabilities--first with a presidential directive in 2002 and then with
    a presidential announcement in 2009 on U.S. missile defense in Europe.
    It is now also operating in an environment of growing budgetary
    constraints, which have already necessitated tough trade-off decisions
    and will require additional steps to reduce acquisition risk. At the
    same time, MDA is undergoing significant transition. In addition to a
    recent change in the agency's leadership, MDA is responding to the
    Secretary of Defense's March 2013 announcement to increase the planned
    numbers of ground-based interceptors designed to protect the United
    States as well as to changes in plans for U.S. missile defense in
    Europe.
        Since the 2002 National Defense Authorization Act, we have been
    mandated to prepare annual assessments of MDA's progress toward its
    acquisition goals.\1\ The National Defense Authorization Act for Fiscal
    Year 2012 required us to report on our assessment of the extent to
    which MDA has achieved its stated acquisition goals and objectives, as
    reported through their acquisition baselines, and also to include any
    other findings and recommendations on MDA acquisition programs and
    accountability as appropriate.\2\ We recently issued our report
    responding to this mandate.\3\ This testimony highlights our findings
    from that report as well as relevant findings from several of our prior
    reports on missile defense issued from September 2008 through July
    2012, particularly as they relate to the progress MDA made this year in
    reducing acqusiition risks and the challenges that still face MDA.\4\
    ---------------------------------------------------------------------------
        \1\ National Defense Authorization Act for Fiscal Year 2002, Pub.
    L. No. 107-107, Sec. 232(g) (2001); Ronald W. Reagan National Defense
    Authorization Act for Fiscal Year 2005, Pub. L. No. 108-375, Sec. 233
    (2004); National Defense Authorization Act for Fiscal Year 2006, Pub.
    L. No. 109-163, Sec. 232; John Warner National Defense Authorization
    Act for Fiscal Year 2007, Pub. L. No. 109-364, Sec. 224 (2006); and
    National Defense Authorization Act for Fiscal Year 2008, Pub. L. No.
    110-181, Sec. 225.
        \2\ Pub. L. No. 112-81, Sec. 232 (2011).
        \3\ GAO, Missile Defense: Opportunity to Refocus on Strengthening
    Acquisition Management, GAO-13-432 (Washington, DC: Apr. 26, 2013).
        \4\ GAO-13-432; GAO, Missile Defense: Opportunity Exists to
    Strengthen Acquisitions by Reducing Concurrency, GAO-12-486
    (Washington, DC: Apr. 20, 2012); Schedule Best Practices Provide
    Opportunity to Enhance Missile Defense Agency Accountability and
    Program Execution, GAO-12-720R (Washington, DC: July 19, 2012); Space
    and Missile Defense Acquisitions: Periodic Assessment Needed to Correct
    Parts Quality Problems in Major Programs, GAO-11-404 (Washington, DC:
    June 24, 2011); Missile Defense: Actions Needed to Improve Transparency
    and Accountability, GAO-11-372 (Washington, DC: Mar. 24, 2011); Defense
    Acquisitions: Many Analyses of Alternatives Have Not Provided a Robust
    Assessment of Weapon System Options, GAO-09-665 (Washington, DC: Sept.
    24, 2009); Defense Acquisitions: Sound Business Case Needed to
    Implement Missile Defense Agency's Targets Program, GAO-08-1113
    (Washington, DC: Sept. 26, 2008).
    ---------------------------------------------------------------------------
        To assess MDA's progress and related challenges, we examined the
    acquisition accomplishments of individual missile defense programs and
    supporting efforts that MDA is currently developing and fielding. We
    conducted this work in accordance with generally accepted government
    auditing standards. Additional information on our scope and methodology
    is available in our April 2013 and prior issued reports.

                                   BACKGROUND

        MDA's BMDS is being designed to counter ballistic missiles of all
    ranges--short, medium, intermediate, and intercontinental. Because
    ballistic missiles have different ranges, speeds, sizes, and
    performance characteristics, MDA is developing multiple systems that,
    when integrated, provide multiple opportunities to destroy ballistic
    missiles before they can reach their targets. The BMDS architecture
    includes space-based sensors, ground- and sea-based radars, ground- and
    sea-based interceptor missiles, and a command and control, battle
    management, and communications system to provide the warfighter with
    the necessary communication links to the sensors and interceptor
    missiles.
        Table 1 provides a brief description of individual BMDS systems,
    which MDA refers to as elements of the BMDS. As noted in the table, two
    programs were proposed for cancellation in April 2013 as part of DOD's
    fiscal year 2014 President's budget submission.

    TABLE 1: DESCRIPTION OF SELECTED BALLISTIC MISSILE DEFENSE SYSTEM (BMDS)
                         ELEMENTS AND SUPPORTING EFFORTS
    ------------------------------------------------------------------------
                                                     Description and key
          BMDS element/supporting effort                 components
    ------------------------------------------------------------------------
    Aegis Ballistic Missile Defense (BMD) with  Aegis BMD is a sea-based
     Standard Missile-3 (SM-3) Block IA and      system developed for
     Block IBa.                                  ballistic missile defense
                                                 and other missions. MDA is
                                                 developing several versions
                                                 of SM-3 and associated ship-
                                                 based software and
                                                 processors. The first two
                                                 variants of SM-3 missiles
                                                 are referred to as Block IA
                                                 and Block IB. The SM-3
                                                 Block IB features
                                                 additional capabilities
                                                 over the Block IA to
                                                 identify, discriminate, and
                                                 track objects during
                                                 flight.
    Aegis Ashore..............................  A land-based, or ashore,
                                                 version of Aegis BMD
                                                 initially using SM-3 Block
                                                 IB missiles, with plans to
                                                 use various versions of SM-
                                                 3 missiles and Aegis weapon
                                                 system software as they
                                                 become available.
    Aegis BMD SM-3 Block IIA..................  The SM-3 Block IIA is
                                                 planned to be larger than
                                                 the SM-3 Block IB and is
                                                 planned to have increased
                                                 velocity, range, and
                                                 discrimination
                                                 capabilities.
    Aegis BMD SM-3 Block IIB..................  The SM-3 Block IIB was
                                                 planned to address
                                                 different threats and have
                                                 more advanced capabilities
                                                 than earlier SM-3 versions.
                                                 Key components had not yet
                                                 been finalized before DOD
                                                 proposed canceling the
                                                 program in April 2013 as
                                                 part of its fiscal year
                                                 2014 President's budget
                                                 submission.
    BMDS Sensors..............................  MDA has fielded and/or
                                                 upgraded a variety of
                                                 sensors that support
                                                 various elements of the
                                                 BMDS including: the Army
                                                 Navy/Transportable Radar
                                                 Surveillance and Control
                                                 Model 2 (AN/TPY-2) radar;
                                                 the Sea-Based X-Band radar;
                                                 upgraded early warning
                                                 radars; and the Cobra Dane
                                                 radar.
    Command, Control, Battle Management, and    A global network that links
     Communications (C2BMC) \1\.                 and integrates individual
                                                 missile defense elements.
                                                 It also allows users to
                                                 plan ballistic missile
                                                 defense operations, see the
                                                 battle develop, and manage
                                                 networked sensors and
                                                 weapon systems.
    Ground-based Midcourse Defense (GMD)......  A ground-based missile
                                                 defense system with
                                                 interceptors located at
                                                 Fort Greely, AK, and
                                                 Vandenberg, CA. The
                                                 interceptor consists of a
                                                 three-stage booster with a
                                                 kill vehicle on top that
                                                 can steer itself into the
                                                 threat missile to destroy
                                                 it. There are currently two
                                                 versions of the kill
                                                 vehicle: the Capability
                                                 Enhancement-I (CE-I) and
                                                 the upgraded design known
                                                 as the Capability
                                                 Enhancement-II (CE-II).
    Precision Tracking Space System (PTSS)....  A new constellation of nine
                                                 satellites planned to
                                                 provide high-quality track
                                                 information on threat
                                                 missiles to other ballistic
                                                 missile defense systems,
                                                 DOD proposed canceling the
                                                 program in April 2013 as
                                                 part of its fiscal year
                                                 2014 President's budget
                                                 submission.
    Targets and Countermeasures...............  MDA develops and
                                                 manufactures highly complex
                                                 targets to present
                                                 realistic threat scenarios
                                                 during BMDS flight tests.
                                                 Our testimony focuses on
                                                 medium-range air-launched
                                                 targets being flown for the
                                                 first time in fiscal year
                                                 2013.
    Terminal High Altitude Area Defense         A mobile, ground-based
     (THAAD).                                    missile defense system
                                                 organized as a battery
                                                 which includes
                                                 interceptors, launchers, an
                                                 AN/TPY-2 radar, a fire
                                                 control and communications
                                                 system, and other support
                                                 equipment.
    ------------------------------------------------------------------------
    Source: Missile Defense Agency (data); GAO (presentation).

    \1\ Details on the acquisition progress of the Aegis BMD SM-3 Block IA
      and C2BMC elements were not covered in our April 2013 report.

        When MDA was established in 2002, the Secretary of Defense granted
    it exceptional flexibility to set requirements and manage the
    acquisition of the BMDS in order to quickly deliver protection against
    ballistic missiles. This decision enabled MDA to rapidly deliver assets
    but we have reported that it has come at the expense of transparency
    and accountability.\5\ Moreover, to meet tight deadlines, MDA has
    employed high-risk acquisition strategies that have resulted in
    significant cost growth, schedule delays, and in some cases,
    performance shortfalls. Examples of key problems we have cited in
    reports in recent years are highlighted below.
    ---------------------------------------------------------------------------
        \5\ GAO-11-372 and GAO-12-486.

             In recent years, MDA has experienced several test
            failures. These, as well as a test anomaly and delays,
            disrupted MDA's flight test plan and the acquisition strategies
            of several components.\6\ Overall, these issues forced MDA to
            suspend or slow production of three out of four interceptors
            being manufactured. The GMD program in particular has been
            disrupted in its attempts to demonstrate the CE-II interceptors
            by two test failures. As a result of a failed flight test in
            January 2010 due to an assembly process quality issue, MDA
            added a retest designated as Flight Test GMD-06a (FTG-06a).
            However, this retest also failed in December 2010 due to the
            effects of vibration on the kill vehicle's guidance system. As
            a result of these failures, MDA decided to halt GMD flight
            testing and restructure its multiyear flight test program, halt
            production of the GMD interceptors, and redirect resources to
            return-to-flight testing activities. Additionally, as we
            reported in April 2013, the costs to demonstrate and fix CE-II
            capability have grown from $236 million to over $1.2 billion
            and are continuing to grow.\7\
    ---------------------------------------------------------------------------
        \6\ GAO-12-486.
        \7\ GAO-13-432.
    ---------------------------------------------------------------------------
             MDA acquisitions have faced significant cost growth,
            schedule delays, and/or performance shortfalls due to a highly
            concurrent acquisition approach.\8\ Concurrency is broadly
            defined as the overlap between technology development and
            product development or between product development and
            production. While some concurrency is understandable,
            committing to product development before requirements are
            understood and technologies are mature or committing to
            production and fielding before development is complete is a
            high-risk strategy that often results in performance
            shortfalls, unexpected cost increases, schedule delays, and
            test problems. High levels of concurrency were present in MDA's
            initial efforts and remain present in current efforts.
    ---------------------------------------------------------------------------
        \8\ GAO-12-486 and GAO-13-432.
    ---------------------------------------------------------------------------
             There has been limited visibility into cost and
            schedule progress associated with the BMDS. We have reported on
            the limited usefulness of MDA's acquisition baselines for
            oversight due to: (1) a lack of clarity, consistency, and
            completeness; (2) a lack of high-quality supporting cost
            estimates and schedules; and (3) instability in the content of
            the baselines.\9\
    ---------------------------------------------------------------------------
        \9\ GAO-11-372, GAO-12-720R, and GAO-13-432.
    ---------------------------------------------------------------------------
             MDA has made limited progress in developing the
            individual system models it uses to assess performance of the
            BMDS elements and linking those models.\10\ Models and
            simulations are critical to understanding BMDS capabilities.
            The complex nature of the BMDS, with its wide range of
            connected elements, requires integrated system-level models and
            simulations to assess its performance in a range of system
            configurations and engagement conditions.
    ---------------------------------------------------------------------------
        \10\ GAO-13-432, GAO-12-486, and GAO-11-372.
    ---------------------------------------------------------------------------
             Quality issues have also impeded missile defense
            development in recent years.\11\ These were due to workmanship
            issues, the use of undocumented and untested manufacturing
            processes and poor control of manufacturing materials, among
            other factors.
    ---------------------------------------------------------------------------
        \11\ GAO-11-404.

        Congress and DOD have taken steps in recent years to address
    concerns over MDA's acquisition management strategy, accountability,
    and oversight. These include efforts to provide more information on
    cost, schedule, and other baselines; efforts to prevent quality
    problems; and efforts to begin obtaining independent cost estimates.
    mda has made progress on testing, reducing some acquisition risks, and
                     improving the clarity of the baselines
        In April 2013, we reported that in the past year MDA gained
    important knowledge through its test program, including successfully
    conducting its most complex integrated air and missile defense flight
    test to date, and it took some positive steps to reduce acquisition
    risks for two of its programs. It has also improved the clarity of
    baseline information it reports to Congress.\12\
    ---------------------------------------------------------------------------
        \12\ GAO-13-432.
    ---------------------------------------------------------------------------
        Specifically, in April 2013 we reported that in October 2012, MDA
    conducted the largest integrated air and missile defense flight test to
    date, achieving near simultaneous intercepts of multiple targets by
    various BMDS interceptors. This test was a combined developmental and
    operational flight test that for the first time used warfighters from
    multiple combatant commands and employed multiple missile defense
    systems. All five targets--three ballistic and two cruise missiles--
    were launched and performed as expected. In this test, THAAD also
    intercepted a medium-range target for the first time and an Aegis ship
    conducted successfully a standard missile-2 Block IIIA engagement
    against a cruise missile. This test also provided valuable data to
    evaluate interoperability between several systems during a live
    engagement.
        In April 2013, we reported that in fiscal year 2012, the Aegis BMD
    SM-3 Block IB and THAAD programs also attained important knowledge in
    their flight test programs. In May 2012, the Aegis BMD SM-3 Block IB
    system intercepted a short-range target for the first time. In June
    2012, the system completed another successful intercept which provided
    more insight into the missile's enhanced ability to discriminate the
    target from other objects during an engagement. In October 2011, THAAD
    successfully conducted its first operational flight test prior to
    entering full-rate production.\13\ During the test, THAAD fired two
    missiles that intercepted two short-range targets, demonstrating that
    the system can perform under operationally realistic conditions from
    mission planning through the end of the engagement. Additionally, this
    test supported the resumption of interceptor manufacturing, and was
    used by the Army as support for accepting the first two THAAD
    batteries. This also marked the first time Army and DOD test and
    evaluation organizations confirmed that the test and its results
    resembled the fielded system.
    ---------------------------------------------------------------------------
        \13\ Pursuant to MDA's acquisition flexibilities, once an element
    enters the production and deployment phase, the element enters the
    formal DOD acquisition system. Consequently, 10 U.S.C.Sec. 2366
    requires completion of realistic survivability testing of a weapon
    system before a program can begin full-rate production.
    ---------------------------------------------------------------------------
        We also reported in April 2013 that MDA took steps to reduce
    acquisition risk by decreasing the overlap between technology and
    product development for two of its programs--the Aegis BMD SM-3 Block
    IIA and Block IIB programs.\14\ By taking steps to reconcile gaps
    between requirements and available resources before product development
    begins, MDA makes it more likely that programs can meet cost, schedule,
    and performance targets. The Aegis BMD SM-3 Block IIA program added
    time and money to extend development following significant problems
    with four components. MDA reduced its acquisition risk by delaying the
    program's system preliminary design review for more than 1 year and, as
    a result, in March 2012, the program successfully completed the review
    because it allowed additional development of the components. We also
    reported in April 2013 that the Aegis BMD SM-3 Block IIB program had
    taken important steps to reduce concurrency and increase the technical
    knowledge it planned to achieve before development by delaying product
    development until after its preliminary design review was completed.
    ---------------------------------------------------------------------------
        \14\ GAO-13-432.
    ---------------------------------------------------------------------------
        Lastly, in April 2013 we reported that MDA has taken steps to
    improve the clarity of its acquisition baselines since we reported on
    these issues in March 2011. Although MDA is not yet required to
    establish an acquisition program baseline pursuant to 10 U.S.C.
    Sec. 2435 and related DOD policy because of the acquisition
    flexibilities it has been granted, Congress has enacted legislation
    requiring MDA to establish some baselines. MDA reported baselines for
    several BMDS programs to Congress for the first time in its June 2010
    BMDS Accountability Report (BAR) to respond to statutory requirements
    in the National Defense Authorization Act for Fiscal Year 2008.\15\
    MDA's baselines, including resource and schedule baselines, are
    reported in the BAR and are updated annually. MDA's 2012 resource
    baselines report costs for all the categories of the life cycle--
    research and development, procurement, military construction,
    operations and support, and disposal costs.\16\ Schedule baselines
    include key milestones and tasks, such as important decision points,
    significant increases in performance knowledge, modeling and simulation
    events, and development efforts. Some also show timeframes for fight
    and ground tests, fielding, and events to support fielding.
    ---------------------------------------------------------------------------
        \15\ Pub. L. No. 110-181, Sec. 223(g), repealed by Pub. L. No. 112-
    81, Sec. 231(b) (2011).
        \16\ Research and development costs include development and design
    costs for system engineering and design, test and evaluation, and other
    costs for system design features. Procurement costs include total
    production and deployment costs (e.g., site activation, training) of
    the prime system and its related support equipment and facilities.
    Military construction costs include costs for major construction such
    as bases and buildings. Operations and support costs include costs of
    operating and supporting the fielded system, including all direct and
    indirect costs incurred in using the system (e.g., personnel,
    maintenance, and sustaining investment). Disposal, or inactivation,
    costs include the costs of disposing of the prime equipment after its
    useful life.
    ---------------------------------------------------------------------------
        In its 2012 BAR, MDA made several useful changes to its reported
    resource and schedule baselines in response to our concerns and
    congressional direction. For example, MDA:

             reported the full range of life cycle costs borne by
            MDA;
             defined and explained more clearly what costs are in
            the resource baselines or were excluded from the estimates;
             included costs already incurred in the unit cost for
            Targets and Countermeasures so they were more complete;
             added a separate delivery table that provided more
            detailed information on deliveries and inventories; and
             added a list of significant decisions made or events
            that occurred in the past year--either internal or external to
            the program--that affected program progress or baseline
            reporting.
           mda continues to face a variety of acquisition challenges
        Although the MDA has made some progress, the new MDA Director faces
    considerable challenges in executing acquisition programs;
    strengthening accountability; assessing alternatives before making new
    investment commitments; developing and deploying U.S. missile defense
    in Europe and using modeling and simulations to understand capabilities
    and limitations of the BMDS.
    Challenge: Executing Acquisition Programs
        In April 2013 we reported that though MDA has gained important
    insights through testing and taken some steps to reduce acquisition
    risk and increase transparency, it still faces challenges stemming from
    high-risk acquisition strategies. As noted earlier, MDA has undertaken
    and continues to undertake highly concurrent acquisitions. While some
    concurrency is understandable, committing to product development before
    requirements are understood and technologies are mature or committing
    to production and fielding before development is complete is a high-
    risk strategy that often results in performance shortfalls, unexpected
    cost increases, schedule delays, and test problems. It can also create
    pressure to keep producing to avoid work stoppages.
        Our April 2012 report detailed how the Aegis BMD SM-3 Block IB,
    GMD, and THAAD programs undertook highly concurrent acquisition
    strategies.\17\ For example, to meet the presidential directive to
    deploy an initial set of missile defense capabilities by 2004, the GMD
    program concurrently matured technology, designed the system, tested
    the design, and produced and deployed an initial set of missile defense
    capabilities. CE-I interceptors were rapidly delivered to the
    warfighter but they required an expensive retrofit and refurbishment
    program that is still ongoing. Similarly, MDA proceeded to concurrently
    develop, manufacture, and deliver 12 of the next generation of
    interceptors, the CE-IIs. They were also delivered prematurely to the
    warfighter and will require an extensive and expensive retrofit.
    ---------------------------------------------------------------------------
        \17\ GAO-12-486.
    ---------------------------------------------------------------------------
        In April 2012, we also reported that the Aegis Ashore and PTSS
    programs were adopting acquisition strategies with high levels of
    concurrency. The Aegis Ashore program, for instance, began product
    development on two systems--one designated for testing and the other
    operational--and set the acquisition baseline before completing the
    preliminary design review. Best practices, by contrast, call for such
    baselines to be set after this review because the review process is
    designed to ensure the program has sufficient knowledge about resources
    and requirements before engaging in large-scale acquisition activities.
    Similarly, for its new PTSS, MDA planned to develop and produce two
    industry-built satellites while a laboratory-led contractor team was
    still in the development phase of building two lab development
    satellites. Such an approach would not enable decisionmakers to fully
    benefit from the knowledge about the design to be gained from on-orbit
    testing of the laboratory-built satellites before committing to the
    next industry-built satellites.
        In our April 2013 report, we noted that the concurrent high risk
    approaches for the GMD and Aegis BMD SM-3 Block IB programs were
    continuing to have negative effects, while the THAAD program was able
    to overcome most of its issues.\18\ For instance, discovery of the CE-
    II design problem while production was already under way increased MDA
    costs to demonstrate and fix CE-II capability from approximately $236
    million to over $1.2 billion, due to the costs of additional flight
    tests including the target and test-range, investigating the failure,
    developing failure resolutions, and fixing the already delivered
    missiles. Costs continue growing because MDA further delayed the next
    intercept test planned for fiscal year 2012. At this time, the next
    intercept test date is not yet determined as MDA is considering various
    options. While the Aegis BMD SM-3 Block IB program slowed production to
    address developmental issues that arose when the program experienced a
    failure and a flight anomaly in early flight tests, it experienced
    further difficulties completing testing of a new maneuvering
    component--contributing to delays for a third flight test needed to
    validate the interceptor's capability.
    ---------------------------------------------------------------------------
        \18\ GAO-13-432.
    ---------------------------------------------------------------------------
        We also reported in April 2013 that MDA was continuing to follow
    high risk acquisition strategies for its Aegis Ashore, PTSS, and
    Targets and Countermeasures programs. For example, this year we
    reported that the Targets and Countermeasures acquisition strategy is
    adding risk to an upcoming complex, costly operational flight test
    involving multiple MDA systems because it plans to use unproven
    targets. Using these new targets puts this major test at risk of not
    being able to obtain key information should the targets not perform as
    expected. Developmental issues with this new medium-range target as
    well as identification of new software requirements have already
    contributed to delaying the test, which was originally planned for the
    fourth quarter of fiscal year 2012 and is now planned for the fourth
    quarter of fiscal year 2013.
        In 2012, we recommended MDA make adjustments to the acquisition
    schedules to reduce concurrency.\19\ DOD agreed and partially addressed
    the recommendation. Specifically, MDA reduced concurrency in the Aegis
    BMD SM-3 Block IIA and Block IIB programs, but continues to include
    high levels of concurrency in other programs as discussed above. We
    also recommended in 2013 that the Secretary of Defense direct MDA's new
    Director to add non-intercept flight tests for each new type of target
    missile developed to reduce risk.\20\ DOD partially concurred, stating
    that the decision to perform a non-intercept target test must be
    balanced against cost, schedule, and programmatic impacts. While there
    may be exceptions that need to occur when there is a critical
    warfighter need, we believe, whenever possible, that MDA should avoid
    using undemonstrated targets, particularly for costly and complex major
    operational tests.
    ---------------------------------------------------------------------------
        \19\ GAO-12-486.
        \20\ GAO-13-432.
    ---------------------------------------------------------------------------
    Challenge: Strengthening Accountability by Ensuring Program Baselines
            Support Oversight
        In April 2013, we reported that while MDA made substantial
    improvements to the clarity of its reported resource and schedule
    baselines in fiscal year 2012, it has made little progress improving
    the quality of its cost estimates that support its resource baseline
    since we made a recommendation to improve these estimates in our March
    2011 report.\21\ In particular, MDA's resource baselines are not yet
    sufficiently reliable, in part because they do not include costs from
    military services in reported life cycle costs for its programs.
    Instability due to MDA's frequent adjustments to its acquisition
    baselines also makes assessing progress over time extremely difficult
    and, in many cases, impossible. Despite some positive steps forward
    since 2004, the baselines are of limited use for meaningfully assessing
    BMDS cost and schedule progress.
    ---------------------------------------------------------------------------
        \21\ GAO-11-372.
    ---------------------------------------------------------------------------
        In our March 2011 report, we assessed MDA life cycle cost estimates
    using the GAO Cost Estimating and Assessment Guide.\22\ We found that
    the cost estimates we assessed, that were used to support MDA's
    resource baselines, were not comprehensive, lacked documentation, were
    not completely accurate, or were not sufficiently credible. In April
    2013 we reported that, in June 2012, MDA completed an internal Cost
    Estimating Handbook, largely based on our guide which, if implemented,
    could help address nearly all of the shortfalls we identified. Because
    the Handbook was only recently completed, it is too early to assess
    whether the quality of MDA's cost estimates have improved. In our April
    2013 report, we found that while the agency made improvements to its
    reported resource baselines to include all of the life cycle costs
    funded by MDA from development through retirement of the program, the
    baselines do not include operation and support costs funded by the
    individual military services.\23\ According to our guide, cost
    estimates should be comprehensive. Comprehensive estimates include both
    the government and contractor costs of the program over its full life
    cycle, from inception of the program through design, development,
    deployment, and operation and support to retirement. MDA officials told
    us in 2011 that MDA does not consider military service operation and
    support funds to be part of the baselines because the services execute
    the funds. It is unclear what percentage operation and support costs
    are in the case of MDA programs because they have not been reported.
    For programs outside of MDA these costs can be significant, and as a
    result the reported life cycle costs for some MDA programs could be
    significantly understated.
    ---------------------------------------------------------------------------
        \22\ GAO-11-372 and GAO, GAO Cost Estimating and Assessment Guide,
    GAO-09-3SP (Washington, DC: March 2009).
        \23\ GAO-13-432.
    ---------------------------------------------------------------------------
        In our April 2013 report, we recommended that the Secretary of
    Defense direct MDA's new Director to include in its resource baseline
    cost estimates all life cycle costs, specifically the operations and
    support costs from the military services in order to provide
    decisionmakers with the full costs of ballistic missile defense
    systems. DOD partially concurred with this recommendation, agreeing
    that decisionmakers should have insight into the full life cycle costs
    of DOD programs, but disagreeing that they should be reported in MDA's
    BAR. DOD did not identify how the full life cycle costs should be
    reported. We continue to believe that these costs should be reported
    because good budgeting requires that the full costs of a project be
    considered when making decisions to provide resources. In addition, DOD
    has reported full operation and support costs to Congress for major
    defense acquisition programs where one military service is leading the
    development of an acquisition planned to be operated by many Military
    Services. We also believe that MDA's BAR is the most appropriate way to
    report the full costs to Congress because it already includes the
    acquisition costs and the MDA funded operation and support costs.
        In July 2012, we also used our Schedule Assessment Guide to assess
    five MDA program schedules that support the baselines and found that
    none fully met the best practices identified in the guide.\24\ For
    example, three programs took steps to ensure resources were assigned to
    their schedule activities, but one program did not do so and the other
    only partially did so. Moreover, none of the five programs we reviewed
    had an integrated master schedule for the entire length of acquisition
    as called for by the first best practice, meaning the programs are at
    risk for unreliable completion estimates and delays. DOD concurred with
    our recommendations to ensure that best practices are applied to those
    schedules as outlined in our guide, and MDA programs have taken some
    actions to improve their schedules, though they have not yet had time
    to fully address our recommendations. We plan to continue to monitor
    their progress because establishing sound and reliable schedules is
    fundamental to creating realistic schedule and cost baselines.
    ---------------------------------------------------------------------------
        \24\ GAO-12-720R.
    ---------------------------------------------------------------------------
        Lastly, as we reported in March 2009, in order for baselines to be
    useful, they need to be stable over time so progress can be measured
    and so that decisionmakers can determine how to best allocate limited
    resources.\25\ In April 2013, we reported that most major defense
    acquisition programs are required to establish baselines prior to
    beginning product development.\26\ These baselines, as implemented by
    DOD, include key performance, cost, and schedule goals. Decisionmakers
    can compare the current estimates for performance, cost, and schedule
    goals against a baseline in order to measure and monitor progress.
    Identifying and reporting deviations from the baseline in cost,
    schedule, or performance as a program proceeds provides valuable
    information for oversight by identifying areas of program risk and its
    causes.
    ---------------------------------------------------------------------------
        \25\ GAO-09-3SP.
        \26\ A baseline description for a major defense acquisition program
    or any designated major subprogram under the program shall be prepared
    . . . before the program or subprogram enters system development and
    demonstration; before the program or subprogram enters production and
    deployment, and before the program or subprogram enters full rate
    production. 10 U.S.C. Sec. 2435.
    ---------------------------------------------------------------------------
        However, as we reported in April 2013, MDA only reports annual
    progress by comparing its current estimates for unit cost and scheduled
    activities against the prior year's estimates. As a result, MDA's
    baseline reports are not useful for tracking longer term progress. When
    we sought to compare the latest 2012 unit cost and schedule estimates
    with the original baselines set in 2010, we found that because the
    baseline content had been adjusted from year to year, in many instances
    the baselines were no longer comparable. I would like to highlight the
    problems we identified in Aegis Ashore to illustrate how these
    adjustments limited visibility into cost or schedule progress. MDA
    prematurely set the Aegis Ashore baseline before program requirements
    were understood and before the acquisition strategy was firm. The
    program has subsequently added significant content to the resource
    baseline to respond to acquisition strategy changes and requirements
    that were added after the baseline was set. In addition, activities
    from Aegis Ashore's 2010 BAR schedule baseline were split into multiple
    events, renamed, or eliminated altogether in the program's 2012 BAR
    schedule baseline. MDA also redistributed planned activities from the
    Aegis Ashore schedule baselines into several other Aegis BMD schedule
    baselines. These major adjustments in program content made it
    impossible to understand annual or longer-term program cost progress.
    Rearranging content to other baselines also made tracking the progress
    of these activities very difficult and in some cases impossible.
        We recommended in our April 2013 report that the Secretary of
    Defense direct MDA's new Director to stabilize the acquisition
    baselines so that meaningful comparisons can be made over time that
    support oversight of those acquisitions. DOD concurred with this
    recommendation.
    Other Challenges Reported by GAO
        Our April 2013 report discussed a variety of other challenges
    facing MDA that I would like to highlight today. First, in light of
    growing fiscal pressures, it is becoming increasingly important that
    MDA have a sound basis before investing in new efforts. But MDA has not
    analyzed alternatives in a robust manner before making recent
    commitments. Second, during the past several years, MDA has been
    responding to a mandate from the President to develop and deploy new
    missile defense systems in Europe for defense of Europe and the United
    States. Our work continues to find that a key challenge facing DOD is
    to keep individual system acquisitions synchronized with the planned
    timeframes of the overall U.S. missile defense capability planned in
    Europe. Third, MDA also is challenged by the need to develop the
    tools--the models and simulations--to understand the capabilities and
    limitations of the individual systems before they are deployed, which
    will require the agency to overcome technical limitations in the
    current approach to modeling missile defense performance. While MDA
    recently committed to a new approach in modeling and simulation that
    could enable them to credibly model individual programs and system-
    level BMDS performance, warfighters will not benefit from this effort
    until two of the currently planned three phases for U.S. missile
    defense in Europe have already been deployed in 2011 and 2015
    respectively.
        Analyses of Alternatives Could Help MDA Balance and Prioritize Its
            Portfolio of Investments
        Because MDA faces growing fiscal pressure as it develops new
    programs at the same time as it supports and upgrades existing ones,
    DOD and MDA face key challenges getting the best value for its missile
    defense investments. We have frequently reported on the importance of
    establishing a sound basis before committing resources to developing a
    new product.\27\ We have also reported that part of a sound basis is a
    full analysis of alternatives (AOA).\28\ The AOA is an analytical study
    that is intended to compare the operational effectiveness, cost, and
    risks of a number of alternative potential solutions to address valid
    needs and shortfalls in operational capability. A robust AOA can
    provide decisionmakers with the information they need by helping
    establish whether a concept can be developed and produced within
    existing resources and whether it is the best solution to meet the
    warfighter's needs. Major defense acquisition programs are generally
    required by law and DOD's acquisition policy to conduct an AOA before
    they are approved to enter the technology development phase. Because of
    the flexibilities that have been granted to MDA, its programs are not
    required to complete an AOA before starting technology development.
    Nevertheless, MDA's acquisition directive requires programs to show
    they have identified competitive alternative materiel solutions before
    they can proceed to MDA's technology development phase. However, this
    directive provides no specific guidance on how this alternatives
    analysis should be conducted or what criteria should be used to
    identify and assess alternatives, such as risks and costs.
    ---------------------------------------------------------------------------
        \27\ GAO-08-1113; Defense Acquisitions: Improved Business Case Is
    Needed for Future Combat System's Successful Outcome, GAO-06-367
    (Washington, DC: Mar. 14, 2006); and Tactical Aircraft: Air Force Still
    Needs Business Case to Support F/A-22 Quantities and Increased
    Capabilities, GAO-05-304 (Washington, DC: Mar. 15, 2005).
        \28\ GAO-09-665 and Homeland Security: DHS Requires More
    Disciplined Investment Management to Help Meet Mission Needs, GAO-12-
    833 (Washington, DC: Sept. 18, 2012).
    ---------------------------------------------------------------------------
        We reported in February 2013 that the Aegis BMD SM-3 Block IIB had
    not conducted a robust alternatives analysis and also reported in April
    2013 that MDA did not conduct robust alternatives analyses for the PTSS
    program. Both of these programs were recently proposed for cancellation
    in the fiscal year 2014 President's budget submission. In our April
    2013 report, we recommended that the Secretary of Defense direct the
    new MDA Director to undertake robust alternatives analyses for new
    major missile defense efforts currently underway and before embarking
    on other new missile defense programs. Doing so can help provide a
    foundation for developing and refining new program requirements,
    understanding the technical feasibility and costs of alternatives and
    help decisionmakers determine how to balance and prioritize MDA's
    portfolio of BMDS investments. DOD concurred with our recommendation
    but asserted MDA already performs studies and reviews that function as
    analyses of alternatives. We have found, however, that these studies
    are not sufficiently robust.
        Developing and Deploying U.S. Missile Defense in Europe
        In September 2009, the President announced a new approach to
    provide U.S. missile defense in Europe. This four-phase effort was
    designed to rely on increasingly capable missiles, sensors, and command
    and control systems to defend Europe and the United States. In March
    2013, the Secretary of Defense canceled Phase 4, which called for Aegis
    BMD SM-3 Block IIB interceptors, and announced several other plans,
    including deploying additional ground based interceptors in Fort
    Greely, AK, and deploying a second AN/TPY-2 radar in Japan. DOD
    declared the first phase of U.S. missile defense in Europe operational
    in December 2011. The current three-phase effort is shown in figure

        We reported in April 2012 that in order to meet the 2009
    presidential announcement to deploy missile defenses in Europe, MDA has
    undertaken and continues to undertake highly concurrent acquisitions.
    We reported in April 2013 that, according to MDA documentation, system
    capabilities originally planned for the first three phases are facing
    delays, either in development or in integration and testing.

             The systems delivered for Phase 1 do not yet provide
            the full capability planned for the phase. Phase 1 was largely
            defined by existing systems that could be quickly deployed
            because of the limited time between the September 2009
            announcement and the planned deployment of the first phase in
            2011. MDA planned to deploy the first phase in two stages--the
            systems needed for the phase and then upgrades to those systems
            in 2014. However, an MDA official told us that MDA now
            considers the system upgrades stage to be part of the second
            phase, which may not be available until the 2015 timeframe.
             For Phase 2, some capabilities, such as an Aegis
            weapon system software upgrade, may not yet be available. MDA
            officials stated they are working to resolve this issue.
             For Phase 3, some battle management and Aegis
            capabilities are currently projected to be delayed.
             We recommended in our April 2012 report that DOD
            review the extent to which capability delivery dates announced
            by the President in 2009 were contributing to concurrency in
            missile defense acquisitions and identify schedule adjustments
            where significant benefits could be obtained by reducing
            concurrency. DOD concurred with this recommendation.
        Modeling and Simulation Limitations
        We reported in April 2013 that a key challenge for both the
    Director of MDA and the warfighter is understanding the capabilities
    and limitations of the systems MDA is going to deploy, particularly
    given the rapid pace of development. According to MDA's fiscal year
    2012 President's budget submission, models and simulations are critical
    to understanding BMDS operational performance because assessing
    performance through flight tests alone is prohibitively expensive and
    can be affected by safety and test range constraints.\29\ In August
    2009, U.S. Strategic Command and the BMDS Operational Test Agency
    jointly informed MDA of a number of system-level limitations in MDA's
    modeling and simulation program that adversely affected their ability
    to assess BMDS performance. Since then, we reported in March 2011 and
    again in April 2012 that MDA has had difficulty developing its models
    and simulations to the point where it can assess operational
    performance. In April 2013, we reported that MDA recently committed to
    a new approach in modeling and simulation that officials stated could
    enable them to credibly model individual programs and system-level BMDS
    performance by 2017.\30\ To accomplish this, MDA will use only one
    simulation framework, not two, to do ground testing and performance
    assessments. With one framework, the agency anticipates data quality
    improvements through consistent representations of the threat, the
    environment, and communications at the system level. Without
    implementing these changes, MDA officials told us it would not be
    possible to credibly model BMDS performance by 2017, in time to assess
    the third phase of U.S. missile defense in Europe.
    ---------------------------------------------------------------------------
        \29\ A model is a representation of an actual system that involves
    computer simulations that can be used to predict how the system might
    perform or survive under various conditions or in a range of hostile
    environments. A simulation is a method for implementing a model. It is
    the process of conducting experiments with a model for the purpose of
    understanding the behavior of the system modeled under selected
    conditions or of evaluating various strategies for the operation of the
    system within the limits imposed by developmental or operational
    criteria. Simulation may include the use of digital devices, laboratory
    models, or ``test bed'' sites.
        \30\ GAO-13-432.
    ---------------------------------------------------------------------------
        MDA program officials told us that the next major assessment of
    U.S. missile defense in Europe for the 2015 deployment will continue to
    have many of the existing shortfalls. As a result, MDA is pursuing
    initiatives to improve confidence in the realism of its models in the
    near term, one of which involves identifying more areas in the models
    where credibility can be certified by the BMDS Operational Test Agency.
    Another focuses on resolving the limitations identified jointly by the
    Operational Test Agency and U.S. Strategic Command. Lastly, MDA
    officials told us they are refining the process used to digitally
    recreate system-level flight tests in order to increase confidence in
    the models.
        Because MDA recently committed to a new approach for modeling and
    simulation, we did not make recommendations in our 2013 report.
    However, it is important that this effort receive sufficient management
    attention and resources, given past challenges and the criticality of
    modeling and simulation.
        In conclusion, many of the challenges I have highlighted today are
    rooted in both the schedule pressures that were placed on MDA when the
    agency was directed in 2002 to rapidly field an initial missile defense
    capability and the flexibilities that were granted MDA so that it could
    do so. Today, however, initial capability is in place; MDA has begun to
    transition more mature systems to the military services; it has had to
    propose canceling two major efforts in the face of budget reductions,
    concerns about affordability, and technical challenges; and the
    employment of BMDS systems is becoming increasingly interdependent,
    thereby increasing the potential consequences of problems discovered
    late in the development cycle. In recent years, both Congress and MDA
    have recognized that conditions have changed and steps need to be taken
    that reduce acquisition risk, while increasing transparency and
    accountability. However, especially in light of growing budget
    pressures, additional actions are needed, including

             sufficiently analyzing alternatives before making
            major new investment commitments;
             stabilizing acquisition baselines and ensuring they
            are comprehensive and reliable;
             ensuring acquisition strategies allow for the right
            technical and programmatic knowledge to be in place before
            moving into more complex and costly phases of development; and
             demonstrating new types of targets in less critical
            tests before they are used in a major test in order to lower
            testing risks

        The appointment of a new Director provides an opportunity to
    address these challenges, but doing so will not be easy as MDA is still
    under significant schedule pressures and the agency is undergoing a
    transition to respond to new Secretary of Defense direction to expand
    the GMD capabilities. As such, we look forward to continuing to work
    with MDA to identify and implement actions that can reduce acquisition
    risk and facilitate oversight and better position MDA to respond to
    today's demands.
        Chairman Udall, Ranking Member Sessions, and members of the
    subcommittee, this concludes my statement. I am happy to answer any
    questions you have.

                     GAO CONTACT AND STAFF ACKNOWLEDGMENTS

        For future questions about this statement, please contact me at
    (202) 512-4841 or chaplainc@gao.gov. Contact points for our Offices of
    Congressional Relations and Public Affairs may be found on the last
    page of this statement. Individuals making key contributions to this
    statement include David B. Best, Assistant Director; Aryn Ehlow; Ivy
    Hubler; Meredith Allen Kimmett; Wiktor Niewiadomski; Kenneth E. Patton;
    John H. Pendleton; Karen Richey; Brian T. Smith; Steven Stern; Robert
    Swierczek; Brian Tittle; and Hai V. Tran.
        Senator Udall. Thank you, Ms. Chaplain.
        Let's do 7-minute rounds. I'll start.
        Admiral, I'd like to start with you. We here in Congress
    imposed an indiscriminate budget reduction process called
    sequestration for the fiscal year 2013. We hear it's caused
    real problems across DOD as well as every other government
    agency. Unless we act to change it or end it, it will happen
    again in fiscal year 2014.
        You manage a lot of complex acquisition programs. I think
    your budget's $7 to $8 billion a year, in that neighborhood.
    Could you tell us the following information about the impact of
    sequestration. I have the three questions I'll pose and then
    you can have at them: What's been the impact of sequester in
    this year, fiscal year 2013? What would be the importance of
    approving the planned reprogramming request and the effect of
    not doing so relative to sequestration? What would be the
    effect on MDA if the sequester were to continue in fiscal year
    2014?
        Admiral Syring. Thank you, Mr. Chairman. I'll address
    three, in this order. There is impact to the MDA and our
    programs due to sequester. The budget reduction was
    approximately $683 million that was flowed down from the fiscal
    year 2013 appropriation. That was taken in a nondiscriminate
    way and it is not the best way in my opinion to have levied
    those budget reductions.
        We have proposed through the reprogramming action to DOD,
    which will come over together, a better way to take those cuts
    to sustain what I believe to be the agency's highest
    priorities. The importance of that support is critical.
        Finally, on the potential impact of 2014 sequestration and
    those reductions, I would say, sir, that those would be as
    cumbersome or maybe more cumbersome given the cuts in 2013
    coupled with the cuts in 2014.
        Senator Udall. Thank you for that illumination. I know all
    of you in your statements have further elaborated on this. The
    committee would welcome all the details, all the numbers,
    because this is something that's very important facing us.
        General Formica, Secretary of Defense Hagel, Admiral
    Winnefeld, and General Jacoby have all said recently that the
    current ground-based midcourse defense system defends all of
    the United States, including the east coast, against missile
    threats from both North Korea and Iran. In your capacity as
    commander within STRATCOM, you represent the warfighter
    perspective on our missile defense capabilities and
    requirements. Do you have confidence in our current GMD system
    to defend all of the United States, including the east coast,
    against current and near-term ballistic missile threats from
    both North Korea and Iran?
        General Formica. Yes, Mr. Chairman. Thank you for the
    question. We do have confidence in the ability of the ballistic
    missile defense system to defend the United States against a
    limited attack from both North Korea and Iran today and in the
    near future. I'm confident in the systems that have been
    provided to us and I'm confident in the ability and training of
    the soldiers, sailors, airmen, marines, and civilians that
    operate those systems.
        Senator Udall. Let me turn to Secretary Creedon with a
    question tied to the question I just posed to the General. Some
    have suggested there may be a gap in our Homeland defense
    coverage, particularly the east coast, against a possible
    future Iranian ICBM threat if we do not move now to build a
    missile defense site on the east coast. This view seems to
    completely overlook the fact that we do already have a missile
    defense system in place that protects all the United States,
    including the east coast, against a potential Iranian ICBM, and
    that Iran does not yet have an ICBM or nuclear weapons.
        It also seems to overlook the fact that we're planning to
    increase our missile defense interceptor inventory by nearly 50
    percent in the next few years and that we're making numerous
    and significant improvements to our Homeland defense system
    that will provide even better protection against a future
    Iranian ICBM threat.
        Do I have the basic facts right, and what would you say in
    response to the suggestion of an imminent gap against possible
    future Iranian ICBMs and the need now--the need, I should say,
    to decide now to deploy an east coast site to fill that gap?
        Ms. Creedon. Yes, sir, you do in fact have that string of
    facts accurate. The east coast is well protected as a result
    of--it was protected before the additional 14, and this
    additional 14 provides additional protection both for anything
    from North Korea as well as anything from Iran should that
    threat develop. Again, you want to stay ahead of the threat.
        There are many options that would be available to us
    depending on the rapidity with which a threat in your
    hypothetical from Iran would emerge, not the least of which is,
    frankly, the ability to look at additional interceptors at Fort
    Greely, which could also provide some additional threats.
        One of the longer-term issues, though, is what are the
    numbers and what are the capabilities. That's very much in the
    realm of the unknown and very much out in the future. So right
    now, just to be clear, DOD is, in fact, carrying through with
    the direction from the fiscal year 2013 statute. The MDA is
    currently in the process of developing criteria to identify a
    candidate list of sites. From that candidate list of sites,
    there will be a narrowing down to three, maybe more, but at
    least three, which is what the direction was under the statute.
    Then environmental impact statements (EIS) will be completed
    for all of those, and this will allow us, should there be a
    decision at some point that we do need an east coast missile
    defense site, this will allow an acceleration of the time that
    we would need one.
        But there are other options and we are well protected with
    the existing site.
        Senator Udall. Admiral, is there anything you'd want to add
    about our ongoing and planned improvements to our missile
    defense capability that would enhance our defenses against a
    threat that Iran, thankfully, does not yet have?
        Admiral Syring. No, sir. I believe that the first step in
    the strategy, as Ms. Creedon articulated, is on track and is
    the best use of resources today to match the threat that we
    see, to keep ahead of the threat that we see from North Korea,
    with the second step being what do we need to do to keep ahead
    of the threat from Iran, and those analyses and studies are
    ongoing this year to coincide with the completion of the
    interceptor siting studies that we're doing this year.
        Senator Udall. Let me fit in one short question. This again
    to you, Admiral: Turning to your authorities for classification
    for missile defense information in the MDA, with respect to
    Russia, have you declassified any missile defense information
    and have you been asked to declassify any missile defense
    information for Russia?
        Admiral Syring. I have not declassified any information to
    give to Russia and I have not been asked to declassify any
    information to give to Russia.
        Senator Udall. Thank you for clarifying the record.
        Let me recognize Senator Fischer for 7 minutes.
        Senator Fischer. Thank you, Mr. Chairman.
        Senator Lee had asked me if I would defer my question time
    to him and I will do so.
        Senator Udall. I'm happy to recognize my cousin from the
    great State of Utah.
        Senator Lee. Thank you very much. As one of four or five
    Senators born in Arizona, I appreciate that.
        Thank you, Senator Fischer, for willing to accommodate me.
    I'll be shuttling back and forth between here and the Judiciary
    Committee. I appreciate your patience with me.
        Thanks to all of you for joining us today. Admiral Syring,
    I especially appreciated your willingness to visit with me the
    other day on some of these issues.
        The recent aggressive behavior of North Korea and the
    continued belligerence of Iran's pursuit of a nuclear weapons
    program tend to show the need for an effective and robust
    missile defense system is as great as it ever has been before.
    In light of our country's fiscal situation, we have to ensure
    that all the missile defense programs are both cost effective
    and likely to be able to achieve their objectives.
        We must also base these decisions, any decision pertaining
    to U.S. missile defense, solely, exclusively, on the need of
    the United States to defend the Nation against ballistic
    missile attacks. It's no secret that the Russian government
    continues to demand concessions and assurances on our missile
    defense programs.
        Admiral Syring, I was a little alarmed yesterday to hear
    you suggest that this administration had perhaps discussed or
    considered declassifying information on our missile defense
    program in order to ease concerns of the Russian government.
        It's also been reported in recent weeks that Under
    Secretary of Defense for Policy James Miller held consultations
    with Russian Deputy Defense Minister Anatoly Antonov in
    Brussels concerning U.S. missile defense. Russian media
    reported that National Security Adviser Tom Donilon had
    delivered a message from President Obama to President Putin in
    April that included proposals on missile defense. This follows
    reports in March that Russian Defense Minister Sergei Shoigu
    asked Secretary Hagel for regular talks on missile defense with
    the United States.
        On this topic, I asked Secretary Hagel in the DOD posture
    hearing just a few weeks ago if these talks with the Russian
    Government would be taking place and who would be involved. I'm
    still waiting for a response from Secretary Hagel on that
    important question.
        Why don't we start with you, Admiral Syring. Following up
    on Senator Udall's question a minute ago, I'd like to discuss
    what it was that you did say yesterday in the House Armed
    Services Strategic Forces Subcommittee regarding the
    declassification of missile defense data. Specifically, what's
    the nature of the data that is being considered at least for
    possible declassification, and what can you tell me about the
    purposes for which this might be up for consideration for
    declassification?
        Admiral Syring. Yes, sir. The questions that I get asked as
    the classification authority across the stakeholder spectrum of
    the Ballistic Missile Defense System (BMDS) from people that
    care about and work with the BMDS and the MDA in particular
    come to me every day in terms of classification authority. My
    staff and the agency and eventually to me are asked
    consistently is a piece of information classified or not, and
    we rule on that.
        I have been asked many times since I've been the Director
    to rule on a piece of information in a briefing or a slide. I
    have been asked by the Office of the Secretary of Defense for
    Policy on one occasion to rule on a piece of information,
    missile parameter information, of which I said the
    information's classified and it will remain classified.
        I will turn over to Secretary Creedon for further
    discussion on the policy issues and discussions that Dr. Miller
    has had. I want to just finish by saying I did talk to Dr.
    Miller last night, sir, and he offered to come over and talk to
    any Senator or any committee member on his specific policy
    discussions in this area and he just wanted me to tell you that
    directly, sir.
        Senator Lee. Okay. We'll turn to Secretary Creedon in a
    minute. Just so I understand you, if I'm understanding you
    correctly you seem to be telling me that we do have a
    significant national security interest in maintaining the
    classified status of this data?
        Admiral Syring. Yes, sir, absolutely, and I'm not anxious
    and I will not cede the advantage of the United States to
    anybody.
        Senator Lee. Okay, thank you.
        Secretary Creedon, do you want to follow up on that?
    Anything to add to that?
        Ms. Creedon. Yes, sir. I just wanted to reemphasize that we
    have no ability to share any classified information with
    Russia, nor any intent to share any classified information with
    Russia. But as Admiral Syring said, in the preparations for
    some of these meetings that you referenced we wanted to be very
    clear and very careful about what were the sorts of things that
    we would begin conversations on missile defense with the
    Russians, because we wanted to be very clear that we were not
    getting into any areas that were classified. So we've had
    multiple discussions about is this classified, is this
    classified, is this thing classified, to make sure that we're
    very clear on where we stand.
        Senator Lee. Okay. Now, can you confirm that Mr. Donilon,
    in fact, delivered a message to President Putin regarding
    missile defense?
        Ms. Creedon. Mr. Donilon had a range of meetings when he
    was in Moscow, including with President Putin. What he was
    talking about was expanding and making sure that we have a good
    relationship with Russia. One of the issues that obviously we
    all know has been a burr, frankly, in the relationship is
    missile defense. So we were looking at ways to reinvigorate
    some of the discussions with respect to missile defense,
    because we really haven't had anything of substance in about a
    year and a half, because it is in the way of talking about
    other things as well--trade, all sorts of things in the broader
    relationship.
        Senator Lee. So I understand you perhaps wanted to
    reinitiate some sort of dialogue. Can you tell me anything
    about the substance of any such communications?
        Ms. Creedon. My understanding, because I wasn't there, but
    my understanding of that, as well as the subsequent meeting
    with the Under Secretary of Defense for Policy with Mr.
    Antonov, the Deputy Minister of Defense, was that a lot of this
    really was both explaining the decisions that we had made with
    respect to the hedge, the implementation of the additional 14
    GBIs, as well as the decisions with respect to the EPAA, and
    then also put on the table some things that had been put on the
    table before, frankly, that could ultimately lead to
    discussions with respect to both transparency and cooperation
    with the Russians on missile defense.
        But we were also very clear--and I just really want to
    reemphasize this--that we are not, will not, cannot, agree to
    anything that restricts either the performance or the
    geographic locations of our systems.
        Senator Lee. Or that would involve handing over classified
    information?
        Ms. Creedon. Or that would involve handing over classified
    information.
        Senator Lee. Information that Admiral Syring has no intent,
    desire, willingness to declassify.
        Ms. Creedon. As I said, we have no mechanism to provide
    them classified information in any event.
        Senator Lee. Okay. Thank you.
        I see my time has expired. I thank the chairman and thank
    you, Senator Fischer.
        Senator Udall. Thank you, Senator Lee.
        Senator Donnelly.
        Senator Donnelly. Thank you, Mr. Chairman.
        This would be for any of you. From a missile defense
    perspective, what is your greatest concern with North Korea at
    this time? [Pause.]
        You go first, General Formica.
        General Formica. Senator, I pressed the button, so I'll
    speak first.
        Thank you for asking the question. You know we're still at
    the middle of the period of provocation with the North Koreans.
        Senator Donnelly. Yes, we are.
        General Formica. We're concerned about what North Korea
    will do. We're obviously concerned about the degree of
    predictability that the leader from North Korea has
    demonstrated or lack of predictability. So it's important to us
    that we maintain a posture so that we can defend the United
    States of America both at home and abroad against the threats
    that North Korea would pose.
        Senator Donnelly. In terms of engagement if a missile is
    sent by North Korea, obviously we have protective systems in
    Guam in place and others in place. Do we feel confident that
    all of our friends and allies will be protected as well by the
    missile defense shield that we've put in place?
        General Formica. Senator, we're confident that we have the
    posture in place to defend the United States against the threat
    and to defend our forces forward deployed and our friends and
    allies in the region. There is no 100 percent missile shield,
    so there's no guarantees. But we have an appropriate posture in
    place for the threat that we face.
        Senator Donnelly. With U.N. sanctions that have been in
    place on North Korea, do you see that North Korea continues to
    make gains in their missile systems, improvements in the
    systems they're developing? With the sanctions in place, how
    are those improvements able to occur? That would be for
    Secretary Creedon.
        Ms. Creedon. I'll jump into this fray. What do we worry
    about most? I think from a policy perspective most we worry
    about just the unknowns and the uncertainty. I think, as you've
    heard others say, our lack of intelligence with respect to
    activities, plans, intents for North Korea is just about as
    poor as it exists for anywhere else in the world. We are very
    much looking at ways to improve this intelligence, but it's a
    very difficult environment. So that's probably the thing that
    makes for a significant amount of worry, is we just don't know
    what they're going to do next. It's just that uncertainty.
        Senator Donnelly. This is something that has just come up
    in the last day or so, but it has been talked about that Russia
    may send S-300 missile systems to Syria. What do you know about
    those systems? How effective are they? Because we are in a
    process of trying to come up with appropriate decisions
    regarding Syria and this certainly only complicates things even
    further.
        Vice Admiral, I would like to thank you also for coming by
    the other day. We appreciate it very much.
        Admiral Syring. Thank you, sir.
        I would recommend, sir, that on that subject that we go to
    a closed session.
        Senator Donnelly. Okay, very good.
        Ms. Creedon. There's a context for that that really needs
    to be talked about in a different setting.
        Senator Donnelly. Understood.
        With the east coast ballistic missile defense system, can
    you give us an update on the status of site selection for that,
    and what are the factors that are being considered in regards
    to that?
        Admiral Syring. Yes, sir, I'd be happy to take that. The
    effort has started in terms of defining criteria and evaluating
    potential sites. There's literally hundreds of sites that are
    under consideration. Some of the criteria that will be
    finalized and approved in terms of the final selection criteria
    will include booster drop zones, proximity to population
    centers. A big part of it is going to be the operational
    efficacy of the site and how that plays into where the
    geographic location is.
        But I would say that there are 10 or 12 major factors, sir,
    that will play into that. The process has started. It will go
    through a weaning process, an approval process, through the
    summer to come out with a briefing to the leadership and
    recommendation on what the few sites are for possible
    inclusion.
        Senator Donnelly. Is there going to be one site or will
    there be multiple sites that we're choosing?
        Admiral Syring. There'll be a few. I say three today, sir.
    Then as you know, the EIS after that forces us to look at
    several sites, not just one. There have to be other sites that
    are looked at for environmental impact as well.
        Senator Donnelly. Okay. With the MDA, how are things going
    in developing research relationships with various universities?
    I know in my home State, Purdue is looking to develop a
    relationship and I was just wondering where we are in that
    process and how that moves forward.
        Admiral Syring. We're doing very well with our
    relationships with the universities, and I see that continuing
    in this budget request, sir. I've actually met with Governor
    Daniels once already and received a series of briefings for a
    day at Purdue University, and I would say those discussions and
    future teaming opportunities continue.
        Senator Donnelly. I would like to close by saying, Vice
    Admiral and Secretary Creedon, we are very proud that you call
    Indiana your home State. Thank you very much.
        Thank you, Mr. Chairman.
        Senator Udall. Thank you, Senator Donnelly.
        Senator Fischer.
        Senator Fischer. Thank you, Mr. Chairman. I would once
    again like to thank the panel for being here today.
        Admiral, I have a few questions for you. General Jacoby has
    stated that the third missile defense site would provide better
    weapons access, increased GBI inventory, and additional
    battlespace, in his words, to more optimize our defense against
    future threats from Iran and North Korea. Could you elaborate
    on this? Tell me why it's a good thing and what are we talking
    about when we talk about weapons access and battlespace?
        Admiral Syring. Senator, I'll keep it very short and
    simple, and my colleague to my right may wish to jump in from a
    warfighter's standpoint. Battlespace, obviously capacity is
    known in terms of more interceptors, is capacity. Battlespace
    means reaction time in terms of the amount of time that we have
    and the proximity that we have of putting an interceptor in
    flight to intercepting a threat missile.
        General Formica. Senator, that's exactly the same answer
    that I would give. Battlespace is the increased decision time
    because you'd have a shorter time of flight for your
    interceptors from a site further to the east than you would
    from Fort Greely.
        Senator Fischer. Would you then agree with the General's
    assessment on that third site, that it would provide better
    weapons access, increased GBI inventory, and additional
    battlespace?
        Admiral Syring. Yes, ma'am.
        General Formica. Yes, Senator. Certainly it brings
    increased capacity and increased capability than we have at
    Fort Greely. The tradeoff, of course, is going to be the
    investment in infrastructure facilities, force structure, and
    manpower.
        Senator Fischer. In last year's defense authorization bill,
    Congress required DOD to conduct the EIS to evaluate three
    sites in the United States. Can you tell me what the status of
    that is and when it will be complete?
        Admiral Syring. Yes, ma'am. The siting studies have started
    and we will meet the deadline of December 31 of this calendar
    year with recommendations.
        General Formica. Senator, if I may just add, the process
    that MDA is going through is inclusive and that the warfighting
    community is part of that process, and operational
    considerations will be factored into their site selection
    recommendations.
        Senator Fischer. Is part of that process to provide an
    additional missile defense site?
        Admiral Syring. Part of the process will be the evaluation
    of a potential site, and then in conjunction with that, the
    development of a contingency plan on what a third site would
    bring to the defense of the United States.
        I would just add, Senator, if I can, that there will be
    other factors that I look at with the combatant commanders in
    terms of formulation of my recommendation to them for a
    requirement for the east coast site or a continental United
    States site. There'll be other factors that I look at, along
    with the warfighter, in terms of other parts of what I call the
    kill chain that are equally important to interceptors and not
    just interceptors, in terms of us staying ahead of the threat.
        Senator Fischer. Can you share with us what some of those
    other factors would be?
        Admiral Syring. Yes, ma'am. The assessment capability in
    terms of discrimination and the warfighter being able to do a
    proper kill assessment once interceptors are shot is critically
    important today and in the future as we deal with more complex
    debris scenes with the more complex threat missiles that we
    envision coming. This sensor capability and discrimination
    capability cannot be understated in terms of the benefit that
    it will bring the warfighter, in my mind as the material
    developer the absolutely needed capabilities. But again, that
    requirement will be set by the combatant commanders, informed
    by our analysis.
        Senator Fischer. General, did you have anything to add on
    that?
        General Formica. No, Senator. I think he covered it very
    well.
        Senator Fischer. Is there funding in this year's budget for
    this and for the out years for this third site?
        Admiral Syring. No, ma'am. There's funding that I've taken
    out of the MDA budget to do the current study work that's
    ongoing and that will cover within the MDA budget the EIS work
    that needs to start next year if so directed. But there is no
    funding for anything beyond that.
        Senator Fischer. If funding were available, how long would
    it take to build the site?
        Admiral Syring. Ma'am, depending on the assumptions and how
    fast the EIS goes, 5 to 7 years.
        Senator Fischer. What's the average length of time for an
    EIS?
        Admiral Syring. The metric I use is 18 to 24 months.
        Senator Fischer. Would such a site benefit from the
    deployment of an X-band radar on the east coast?
        Admiral Syring. Yes, ma'am. Back to my point on sensoring
    and assessment and discrimination capability, an X-band radar,
    frankly, anywhere east would greatly benefit the threat that I,
    and we in the agency, see coming, and certainly that would be
    part of it.
        Senator Fischer. How long do you anticipate that we have to
    address the threat that you see coming?
        Admiral Syring. I'll just repeat the intelligence
    assessment. Iran may be able to flight test an ICBM by 2015,
    and then anything beyond that I would like to keep into a
    closed session.
        Senator Fischer. Thank you, sir.
        Also, the MDA is now focusing on that common kill vehicle,
    the technology for that; is that correct?
        Admiral Syring. Yes, ma'am. It's a technology program in
    this year's budget.
        Senator Fischer. That's for GBI?
        Admiral Syring. Yes, ma'am, for the exoatmospheric kill
    vehicle (EKV).
        Senator Fischer. What's your timeline for providing that?
        Admiral Syring. With this year's budget we will start that
    concept in terms of what components of the current EKV
    potentially need to be upgraded now. It's 1990s technology and
    certainly there's components in there that, given the
    opportunity to redesign or replace, we would do now in terms of
    future procurement of GBIs. Then look for commonality and
    goodness between that kill vehicle and the Aegis kinetic
    warhead, which has performed just magnificently in the past few
    tests.
        Senator Fischer. As we look at these timelines that we've
    been talking about, does that keep us ahead of the growing
    threat?
        Admiral Syring. Yes, ma'am.
        Senator Fischer. Thank you, sir.
        Senator Udall. Thank you, Senator Fischer.
        Senator King.
        Senator King. Thank you, Mr. Chairman.
        I'm the newest member of this subcommittee, so I'm going to
    ask some very basic questions. If a missile was fired from
    North Korea tomorrow to Hawaii, assuming they had the
    capability to do that, could we knock it down?
        General Formica. We maintain a posture to defend the
    continental United States and Hawaii. We have the capabilities
    in place to do that. But the degree of assurance varies
    depending on how our posture is actually situated.
        Senator King. The reason I ask that question is that we
    hear about tests that don't work, and yet on the other hand I
    hear we can protect the Homeland, and I'm trying to square
    those two things. Do we have tests of the facilities that are
    deployed now that indicate there's a high probability? Is it
    60, 70, 80, 90, 99 percent? How good is this system?
        Admiral Syring. Let me take that and then maybe, sir, I'll
    cede some time to Dr. Gilmore. The systems we have today work,
    and I'll keep it that simple. The older systems, which we call
    the CE-1 interceptors, have been successfully flight tested
    three out of three times.
        The problem that we've had recently is with the newer
    interceptor and those failures, both occurring in 2010. That's
    the flight test that I spoke about in terms of the January fix
    was flown in a non-intercept flight and then we'll fly later
    this year in an intercept flight to validate the performance of
    the new kill vehicle.
        But all of those missiles remain at the ready for the
    warfighter. So, coupled with the available inventory and the
    warfighter shot doctrine, we are protected today, sir.
        Senator King. Can you put a percentage on it?
        Admiral Syring. No, sir, not in this forum.
        Senator King. I understand the President's budget includes
    an increase for the Aegis program. How does Aegis fit into the
    strategy?
        Admiral Syring. Sir, Aegis is a big part of our regional
    defense posture today in Europe and over near Japan in terms of
    ships that are either forward deployed or will be forward
    deployed in terms of us taking ships to Rota. There's a very
    methodical EPAA that has been in large part based on Aegis
    capability improvements over the next 5 years between now and
    2018. We've fielded the first phase already in 2011, and then
    there'll be incremental improvements to the Aegis fleet and
    missiles that come between now and 2018, first to Romania and
    then to Poland.
        Senator King. Aegis is part of the long-term strategy, I
    presume?
        Admiral Syring. Absolutely, sir.
        Senator King. By the way, on the question of percentages,
    you said it would be not in this forum. I would like to get
    that answer in a forum that's appropriate.
        Admiral Syring. Yes, sir, we will do that.
        Senator King. Thank you.
        Madam Secretary, on the east coast site just a couple of
    questions. You mentioned that there are--I think both you and
    the Admiral mentioned there are going to be three sites, EISs.
    When are we likely to get those designations? When will there
    be an announcement on those three?
        Admiral Syring. Sir, once we have approval from DOD,
    towards the end of the year, to meet the December 31 deadline.
        Senator King. So that won't be until much later?
        Admiral Syring. Yes, sir.
        Senator King. Tell me what would one of those facilities
    entail if fully built? What does it look like? How many people
    are there and what's the magnitude of the installation?
        General Formica. Sir, probably the best way to answer that
    question is to describe what we have at Fort Greely, AK, which
    was at the time that it was designated an existing Army
    facility that as a result of base realignment and closure had
    been essentially in a reduced operational status. So today you
    have a missile defense complex that's got three missile defense
    fields, essentially with the silos built and the GBIs provided
    by the MDA. You have the infrastructure on that installation to
    provide for the housing and work areas for the organization,
    the unit that is there to provide the operational capability
    that would actually release the interceptors should a decision
    be made to do so.
        So you have many of the standard things that you'd find on
    an installation. You have barracks, you have the unit office
    space. This is outside the missile defense complex. You have
    the soldiers that not only man the fire direction crews that
    would release the interceptors, but you have a company that
    provides security to the missile defense complex.
        Then the kinds of support infrastructure that you would
    have, anything in running a typical garrison, from PXs and
    commissaries to other garrison facilities.
        Senator King. So based on Fort Greely, can you give me a
    ball park figure of this total, the total population of this
    facility, including the support and infrastructure and guards
    and all of that?
        General Formica. We maintain--the battalion that's there is
    about 240, 250 Army National Guard soldiers, and I don't know
    the exact number of civilians, but I would guess it's at least
    that many. So I would say somewhere around 400 or 500. I'll get
    the exact number for you, Senator, and provide it to you for
    the record. But it's probably about 500 or so total, soldiers
    and civilians and contractors, that are involved in providing
    the capability at the missile defense complex and the
    infrastructure that supports it.
        [The information referred to follows:]

        There are approximately 1,000 personnel on Fort Greely, AK. Of this
    number, about 200 are military, 400 are civilians, and the remaining
    400 personnel are contractors supporting the Fort Greely Garrison and
    the missile defense mission.

        Senator King. One of the issues that I've been concerned
    about as I've been in these hearings is a growing submarine
    capability. It seems like everybody wants to have a submarine
    and a lot of countries do. I take it that this shield that we
    are constructing and have constructed would be effective
    against a submarine-launched missile, which could be much
    closer. How do we deal with a submarine-launched missile that
    would be a couple of hundred miles offshore? Is that a
    different issue? Again, it gets back to this east coast issue.
    I can't see how we could get a shield missile, an interceptor,
    from Colorado or Alaska to protect the east coast against a
    missile that's launched from within 500 miles of the coast.
        Talk to me about submarines.
        General Formica. Actually, Senator, my assessment is that
    the ballistic missile defense system that's in place is
    designed against an ICBM, a limited ICBM threat from North
    Korea and Iran.
        Senator King. Not submarine-launched missiles?
        General Formica. Not submarine-launched.
        Senator King. What is our strategy with regard to
    submarine-launched missiles?
        General Formica. I'd have to take that for the record. We
    don't have a strategy. The NORTHCOM commander has obviously
    identified that kind of threat as a concern and that is an area
    that he is concerned about.
        [The information referred to follows:]

        The Department--to include Office of the Secretary of Defense for
    Policy, the Missile Defense Agency, and me--will provide you a
    classified Missile Defense briefing on June 3, 2013. In it, we will
    provide you additional information regarding the ballistic missile
    defense system and submarine capability.

        Senator King. Madam Secretary?
        Ms. Creedon. I just want to jump in for a minute. I think
    we probably should get you--this is a very complicated topic,
    to say the least.
        Senator King. I'm figuring that out.
        Ms. Creedon. It isn't just ICBMs. It's also cruise
    missiles. But why don't we make the offer to get you a briefing
    on some of the issues and complexities associated with a
    submarine threat off the coast, either coast of the United
    States.
        Senator King. Absolutely. I'm just trying to think like the
    enemy here. If you guys can stop intercontinentals, then I'm
    going to bring them in in another way. Of course we can have a
    whole different discussion about one that comes in in a
    suitcase into New York harbor.
        Okay. I think that's it, Mr. Chairman. Thank you.
        Senator Udall. Thank you, Senator King.
        Let me turn to the entire panel. I will recognize myself
    for the second round here. We've talked about this. In December
    2010, the ground-based midcourse defense system had a failed
    flight test, and MDA has been working ever since to fix the
    problem with the Capability Enhancement-2 kill vehicle, known
    as the CE-2. On March 15 when the Secretary of Defense
    announced plans to deploy 14 additional GBIs in Alaska, he said
    that before deploying those 14 additional GBIs we would test
    and demonstrate the system and have confidence that it will
    work as intended.
        Do you all agree that it's essential that before we deploy
    these 14 additional GBIs that we need to test the system with
    the corrected CE-2 kill vehicle in a realistic intercept test
    and demonstrate that it will work as intended?
        Why don't I just go across and ask each one of you to weigh
    in. If it's a yes or no, that's fine, or if you want to
    elaborate. Madam Secretary?
        Ms. Creedon. Given the nature of the relationship between
    the testing and the adequacy of testing, I think this is really
    one for Dr. Gilmore.
        Senator Udall. Okay. Dr. Gilmore?
        Dr. Gilmore. My understanding of the Secretary's statement
    is that he wanted confidence that the problem that had caused
    the interceptor failure in December 2010, the root cause of
    that problem had been identified and we have demonstrated, we
    will have demonstrated, that it's been fixed. The root cause
    has been identified. The flight test that was the non-intercept
    flight test that was done not too long ago demonstrated that
    some design changes to the kill vehicle certainly have the
    potential to correct that problem.
        The reason I say that--and I choose my words carefully--is
    that as the operational test fellow I don't--I won't say that
    we've successfully demonstrated the problem is fixed until
    we've actually done an intercept test flying under the same
    conditions that were flown in December 2010. My understanding
    is that, although it's not in the integrated master test plan
    that was submitted earlier this year, that we will do that
    intercept test in all likelihood in early fiscal year 2014.
        So at that point, if that intercept test is successful, a
    repeat of the previous failed intercept, then in my view we
    would have confidence that the problem has actually been
    successfully fixed.
        Senator Udall. If others have comments, I'd love to hear
    them. Let me just remind the witnesses that the question is
    whether they agree we need to test it. We can talk about the
    other questions that would arise, but that was really what I
    was trying to get at.
        Ms. Creedon. Sir, on that point, I would say absolutely. In
    fact, we stated in the context of the announcement on March 15,
    and the Secretary has reiterated, that DOD is very much in the
    fly-before-you-buy construct.
        Senator Udall. Fly-before-you-buy.
        Ms. Creedon. Exactly. We're going to fly-before-we-buy.
        Senator Udall. Okay.
        Ms. Creedon. So we are not going to buy these missiles
    until we've demonstrated that they are, in fact, fixed and have
    had, as Dr. Gilmore said, a successful intercept test.
        Senator Udall. Thank you.
        General?
        General Formica. Mr. Chairman, I would just add from an
    operator's perspective that we want to retain the confidence in
    the CE-1s and we want to gain confidence in the CE-2s, so that
    we can continue to have confidence in the overall GBI fleet and
    the ballistic missile defense system. To that end, we support
    the MDA's intercept plan to test the GBI, CE-1, with an
    intercept later this month, so that we can retain confidence in
    it, and to test the CE-2s with an intercept so that we can gain
    confidence in that system.
        Senator Udall. Admiral Syring?
        Admiral Syring. The direct answer, sir, is yes, I agree.
        Senator Udall. Ms. Chaplain?
        Ms. Chaplain. Absolutely necessary in our opinion.
        Senator Udall. It's good to have the GAO in the house.
        Let me turn to General Formica. At our space hearing in
    April, you testified that expert participants at a recent
    missile defense symposium agreed widely on the need for
    improved offense-defense integration. I believe that's also one
    of the conclusions of the 2012 global ballistic missile defense
    assessment that you led.
        I gather that means we should not think about our missile
    defense capabilities only in terms of what our missile defenses
    can defend against, but also what our offensive military
    capabilities can provide to both deter and defeat missile
    threats. Can you explain the importance of offense-defense
    integration in terms of how we think about missile defense? For
    example, would offensive capabilities mean we don't rely only
    on defensive systems, which would reduce our need for defensive
    interceptors?
        General Formica. Thank you, Chairman Udall. We believe and
    would advocate strongly for offense-defense integration for
    missile defense. We'll never have sufficient capacity in our
    missile defenses alone to meet all of the threats or potential
    threats that are out there. So offense-defense integration is
    important. Attack operations by our doctrine is an integral
    part of missile defense. While it won't enable us to reduce the
    missile defense capabilities that we have, it will augment it
    and help make up for the capability gap that we have, the
    overmatch, by not having the capacity to respond to all of the
    threats that are out there.
        I think we saw even just most recently in this recent
    provocation by the North Koreans that the non-lethal
    application of offensive capability, in conjunction with
    missile defense, demonstrates the ability of the United States
    to both deter a threat and assure our allies, and to me
    validated the importance of both offensive and defensive
    integration.
        Senator Udall. We're going to follow up more on that,
    obviously. Let me ask a question of all of you. You know better
    than most that missile defenses are highly complex and
    expensive, and we want to ensure that they're going to work as
    they're intended to do so if we ever need to defeat a missile
    threat. You also know we need to improve them over time.
        In your view, what would be the most cost-effective step we
    should be taking under current fiscal conditions to make sure
    that our missile defense systems will work as intended and to
    improve those systems over time? Secretary Creedon, maybe I
    could start with you.
        Ms. Creedon. I would say initially we need to carry on with
    the test program to ensure that the improvements to the CE-2
    work, that we need to verify that the CE-1 continues to work,
    and that we begin to look at how we can improve the
    capabilities of the system for the challenges that we know are
    coming in the future, so how we address larger raid size, how
    we address discrimination capabilities. Those would be the
    categories of work that I think we really need to rely on,
    because if we can improve some of those then we can also
    improve the capability of an individual missile, so we can get
    more with less if we can do some of that work.
        Senator Udall. Dr. Gilmore?
        Dr. Gilmore. I'll give you a not surprising answer, given
    my responsibilities. We need to continue to test. Now, we are
    never going to with live flight tests obtain a statistically
    significant set of data on performance, from just live flight
    tests. But those live flight tests are critical because they
    provide the data that we can use, that we must use, to
    rigorously accredit our modeling and simulation capabilities.
        So if you have rigorously accredited modeling and
    simulation capabilities that you can run and they replicate the
    results that you get in live fire testing, then those modeling
    and simulation capabilities are what give you the statistically
    significant set of data on performance of the system.
        So if you're asking me what I think is important, it's
    continue to test, but also allocate the resources needed to
    develop and put in place the modeling and simulation capability
    so that it can be rigorously accredited. Then I would also
    agree with Secretary Creedon regarding discrimination. If we
    can't discriminate what the real threatening objects are, it
    doesn't matter how many GBIs we have; we won't be able to hit
    what needs to be hit. As the National Research Council and many
    others have pointed out, discrimination is a tough problem. I
    know that Admiral Syring is working very hard on it and agrees
    with that view. So I would emphasize working on better ways to
    discriminate.
        Senator Udall. General Formica?
        General Formica. Senator, Mr. Chairman, I would reiterate
    much of what has already been said. We certainly support not
    only a rigorous test program to retain and regain confidence in
    the system, but also an exercise program, because in the
    conduct of tests we have the opportunity as warfighters to
    validate our concepts of operations and for the users to
    actually get confident in the systems that have been developed
    for them and to practice tactics, techniques, and procedures.
        To continue to improve the capabilities of the GBIs and to
    improve and increase our interceptor capacity, as was already
    said, we would invest, want to invest in sensor capability to
    get after early tracking and improved discrimination, and to
    continue the investment in the command and control structures
    that knit that architecture together, so that we can take
    better advantage of the various sensors that are already out
    there and use them for missile defense capability.
        Senator Udall. Admiral Syring?
        Admiral Syring. Mr. Chairman, I'll just summarize three
    areas that I see. One, our steadfast commitment to the test
    program. I come from a test background. Since I've been the
    Director, in calendar year 2013 we'll have conducted three GBI
    flight tests: a control test, vehicle flight test in January,
    with two intercept tests this year. I have in the budget
    another intercept test next year, in fiscal year 2014. I think
    the drumbeat specifically on GBI testing is vitally important
    and I intend to continue that, in addition to testing THAAD and
    Aegis systems regularly, as we do.
        Second, to execute the new strategy, because the new
    strategy is critical to the capacity for the warfighter.
    Underpinning that is the successful execution of the test
    program.
        So those two are at the top, and then also equally
    important would be sensors and discrimination. When I say
    sensors and discrimination, sir, I mean not just radars; I mean
    radar and infrared and lasers and the important work that we're
    doing in directed energy at the technology level and the
    importance of that to keep ahead of the threat. I see that as
    vitally important.
        All three together are my focus as the Director.
        Senator Udall. Ms. Chaplain?
        Ms. Chaplain. From a ``work as intended'' perspective, we
    would agree with everything that's been said. The modeling and
    simulation issue in particular doesn't get enough attention
    that it deserves. The progress there has not been as good as we
    would like it, and MDA is renewing its efforts into
    restructuring or redoing that program and we're hopeful that
    will work out better.
        But I would add in terms of that perspective the need to
    really fly before you buy. Really, you follow approaches that
    aren't really overlapping production and testing, because
    that's been at the root of a lot of problems that we see today.
        From a cost-effective perspective, I would emphasize two
    sides: before you buy, really analyzing all the alternatives
    before you and what is the most cost-effective way to pursue a
    capability; and then on the back end, the reporting about costs
    so that Congress can prioritize continually. The reporting on
    costs right now is not where it needs to be. It's not complete.
    You can't compare from year to year, and that's very important
    just from a cost-effective perspective.
        Senator Udall. Thank you.
        Thanks for the committee's indulgence. I took a few more
    minutes, but this was, I think, a question worth hearing.
        Senator Fischer.
        Senator Fischer. Thank you, Mr. Chairman.
        Admiral, if we could just follow up with one last question
    on that common kill vehicle. Are you thinking of placing more
    than one kill vehicle atop the GBI?
        Admiral Syring. Ma'am, that would be down the road once we
    have flushed out the potential for scaling the technologies
    that we're going to work on as part of the advanced technology
    effort this year. But certainly it would be a consideration
    down the road.
        Senator Fischer. Thank you.
        Madam Secretary, moving on to precision tracking space
    system. Why did DOD terminate that system?
        Ms. Creedon. I have to say this was a very difficult
    decision for a number of reasons, not the least of which is the
    issue of dealing with larger raid sizes. Part of the problem
    was there is a recognition that we need something. At the end
    of the day, the Department concluded that this particular
    something was probably not the right thing, that it was
    probably too high risk and it was probably not quite the right
    approach.
        So, given where we were in the program, the decision was
    made to terminate that program. Again, part of the work that
    needs to be done over the course of the next couple years is
    really to look at what a sensor architecture looks like, both
    ground- and space-based sensors, and really come to grips with
    what is the right architecture for that. So it was a very
    difficult decision because we know we need something along
    those lines, but Precision Tracking Space System probably
    wasn't the right thing.
        Senator Fischer. But it was put in place for a reason,
    correct? To identify those decoys. So what are we looking at to
    be able to accomplish that mission now?
        Ms. Creedon. That's actually one of the things that has to
    go over the course of the next year or so, is really look at
    what does a reasonable sensor architecture look like. So part
    of the issue is having some more radars on the ground. We'll
    continue to look at the space-based. But frankly, I think that
    one of the things the GAO has recently raised in some of its
    reports is this whole idea of doing sufficient analysis of
    alternatives. This is probably one of those areas where we
    could have benefited from a little bit more on the analysis of
    alternative work.
        Senator Fischer. Do we need to have a space-based sensor
    system out there?
        Ms. Creedon. My understanding is yes, we do, and I will
    turn it over to Admiral Syring to add some more. But based on
    some of his recent tests, I think the answer is yes.
        Senator Fischer. Admiral?
        Admiral Syring. Yes, ma'am, absolutely. I've been clear
    that we need that capability. We need to have that capability
    in space, as I see the threat in terms of the required
    discrimination capability for the future. It doesn't have to be
    an MDA-developed system and I think that you'll see us explore
    those alternatives and those partnerships with other
    organizations, like the Air Force Space Command.
        Senator Fischer. So your recommendation is we don't just
    rely on a ground-based? We also need the space-based, correct?
        Admiral Syring. Ma'am, we need ground-based for radar and
    we need infrared capability above the clouds, yes, ma'am.
        Senator Fischer. Thank you.
        Also, Admiral, now that we're seeing the termination of the
    2B program, do you know what the plans are for the future SM-3
    missile deployment?
        Admiral Syring. Yes, ma'am----
        Senator Fischer. After 2018?
        Admiral Syring. Ma'am, the 2A missile will be fielded in
    2018. I think what I view will happen as part of the common
    kill vehicle program is us looking at technologies across the
    kill vehicle for Aegis, the SM-3, and the kill vehicle for the
    GBI, in addition to other improvements that could be made in,
    for example, propulsion stacks or attitude control systems, in
    terms of proving that we can and we have in the past upgraded
    the SM-3 from the 1A to the 1B, and I would imagine that as the
    threat continues to evolve that we'll look at upgrades to the
    2A as required.
        Senator Fischer. Do you think it's possible for the
    Standard Missile to play a role in homeland defense, then?
        Admiral Syring. Ma'am, as you saw with the--and I'll let
    General Formica jump in here--I'm bordering on classification,
    so I need to be very careful. Maybe that would be a subject in
    a closed forum in terms of what it can and can't do.
        Senator Fischer. Thank you. Thank you very much.
        Thank you, Mr. Chairman.
        Senator Udall. Thank you, Senator Fischer. It sounds like
    we will arrange for a classified briefing, I think, per Senator
    King's interest.
        Senator King, you're recognized.
        Senator King. I just want to follow up on a question the
    chairman asked about sequester. We all know the effects of the
    sequester in 2013. It's important to realize, however, that the
    sequester is a 10-year deal. It's in the law, and if nothing
    happens, which seems to be the case around here, it will
    continue.
        A year ago, everybody said it was impossible, it would
    never be allowed to come into effect, and now here we are. So I
    don't think we can discount the likelihood that it won't
    continue.
        My question is very clear. General, I'll start with you.
    Would a continuation of the sequester for 1, 2, 3, or 4 more
    years compromise, significantly compromise, your ability
    through this program to defend the Homeland?
        General Formica. Senator, obviously we're all concerned
    about the impacts of sequestration on the ability to provide
    capabilities. My biggest concern at this point is the impact it
    will have on future training and readiness as we balance
    training and readiness against modernization. So, left
    unchecked and without the appropriate prioritization, then it
    will have an effect on our ability to provide missile defense.
        As I testified to this committee a couple of weeks ago, the
    other impact, both more immediate and into next year and
    beyond, I'm also concerned at the impact that sequestration is
    having on our professional civilian workforce. The threat of a
    furlough and the impact that a furlough might have not only on
    them, personal hardships that they would endure, but on our
    ability to do the mission; the hiring freeze and the challenges
    that that poses, and the other impact on civilian professional
    development.
        So I am also concerned about that impact of sequestration
    as well.
        Senator King. I presume there would also be an effect--we
    were talking about testing and development. I presume there
    would be an effect across the board. Admiral?
        Admiral Syring. I would echo the General's comments, sir.
    As I said earlier in the hearing, the cut that I took in 2013
    had impact and the cut if the law is not changed in 2014 will
    have equal or more impact as well. I see the demand for missile
    defense from the combatant commanders as increasing in terms of
    capacity required and I worry about us being able to meet that
    demand signal, given continued budget reductions.
        Senator King. One of the concerns that's been raised in
    other hearings of this committee is that there's a lag effect,
    that the negative effects will take place in the next 2 or 3
    years, but it would be years later, would still be an effect,
    because of loss of talent, for example, and loss of or slowing
    down of development, R&D, and those kinds of things.
        General Formica. Yes, Senator. Just as an example, for this
    year most of the soldiers, sailors, airmen, and marines that
    are manning the missile defense systems are trained and on
    station. As we look through the impact of sequestration on our
    ability to train those forces, that becomes a problem in
    succeeding years.
        So right now, in terms of trained and ready forces in SMDC,
    for instance, I'm confident that we have them, we have them in
    place in fiscal year 2013. I'm concerned about the impact on
    the reduction in training in fiscal year 2014 and beyond.
        The other thing I didn't talk about when I talked about
    training is we're also scaling back on exercises. As we conduct
    fewer exercises and less robust exercises, not just the test
    program but the exercise program, then those are the
    opportunities for us to train our battle staffs and those that
    would make decisions so that we can execute the missile defense
    system.
        Senator King. So training and exercises are being curtailed
    now, is that correct?
        General Formica. That's correct, Senator.
        Senator King. Thank you, Mr. Chairman.
        Senator Udall. General Formica, let me turn to a topic I
    raised a little bit earlier, which is the annual military
    assessment of our global missile defense capabilities that you
    lead. You look both at Homeland defense capabilities and
    regional missile defense capabilities, as I understand it, in
    regards to the combat commanders'--I should say, combatant
    commanders' needs. Then you assess risk in terms of threats and
    capabilities.
        In the most recent assessment, what were the overall risk
    assessments for Homeland defense and for regional defense
    capabilities? Was one considered higher risk than the other?
    Then as a follow-on, did the assessment suggest that our
    combatant commanders have a need for increased regional missile
    defense capabilities relative to the regional missile threats
    they face today?
        General Formica. Mr. Chairman, thank you for the question.
    Yes, we conduct a global ballistic missile defense assessment
    annually that informs STRATCOM's process to develop a
    prioritized capability list that the MDA and others respond to.
    When we conduct that assessment, last year's for instance, we
    assessed--and again, the specific assessments for each region
    would obviously be classified. But the assessment for the
    Homeland, which clearly remains our number one priority, is at
    a lower risk than the assessment for the regions in terms of
    their ability to provide for missile defense for their forward-
    deployed forces there.
        The trends generally tend to go back to some of the things
    I've mentioned previously in my testimony today: capacity of
    interceptors, the need for adequate sensor coverage so we can
    take advantage of the sensors that are out there. It reinforced
    the need for offense-defense integration to reduce the
    dependence strictly on missile defense, but that comes with an
    increased requirement for intelligence, surveillance, and
    reconnaissance. Also to continue to improve our integration of
    the missile defense capabilities of our allies and coalition
    partners.
        Senator Udall. I'm tempted to ask you about Iron Dome, but
    I don't know if that's a question that's appropriate in this
    setting. But I would acknowledge that, having visited both a
    battery and the command headquarters in Israel last May, that's
    a real success story. Those of us who watched this, we
    understand that it gave the Israeli Government flexibility that
    it wouldn't have had otherwise perhaps, and we might have seen
    the Israel Defense Forces (IDF) go into Gaza because they would
    have had no other alternative.
        General Formica. Mr. Chairman, I would say it's safe to
    that Iron Dome is a very successful missile defense system.
    Again, there's no shield that completely protects us, but it
    does provide effective missile defenses and the IDF have
    demonstrated that.
        Senator Udall. Dr. Gilmore, let me turn back to you. You're
    the independent source of oversight of operational test and
    evaluation programs, as we know. That includes missile defense
    testing, and you've reviewed and approved the MDA integrated
    master test plan. Do you believe that test plan is robust,
    rigorous, and properly structured to provide the data we need
    to assess the performance of our missile defense systems in an
    orderly and disciplined fashion?
        Then a second question: Do you believe the planned pace of
    MDA testing is appropriate and sufficient, given the need to
    learn from previous test results and other real-world
    constraints?
        Dr. Gilmore. My answer to both those questions is yes. I'll
    elaborate a little bit on the second one.
        Senator Udall. Sure.
        Dr. Gilmore. Historically over the last decade, the pace of
    ground-based missile defense testing, which I think is the
    subject of some discussion and controversy, is about 1.3
    intercept tests per year. The pace of flight testing earlier in
    the decade was a little higher. It was about 1.7 intercept
    tests per year. As Admiral Syring just mentioned in an answer
    not too long ago, during the course of the next year beginning
    now we may actually--including the test that we did not too
    long ago--conduct three tests for ground-based missile defense:
    the non-intercept test, the test of the Capability Enhancement
    1 kill vehicle coming up within a month, and then the test of
    the Capability Enhancement 2 kill vehicle, probably early in
    fiscal year 2014.
        That's an outlier and there are some reasons that that more
    rapid pace of testing that I've characterized as an outlier is
    possible. First of all, the non-intercept test did not involve
    a target. That made the planning for that test simpler to do.
    The CE-1 test later, within a month, and the CE-2 test at the
    beginning of fiscal year 2014 will be tests that are flown
    using the same trajectories and targets that were already
    planned for and analyzed for what was called FTG, Flight Test
    Global Missile Defense, 06 and 06A, both of which failed, for
    different reasons, 2 and 3 years ago.
        So because we didn't have the target in the case of the
    test that was conducted not too long ago and because of the
    fact that we're basically using the analysis and the plans that
    were developed previously for the upcoming two intercept tests,
    that makes it possible--that's a large part of the reason that
    makes it possible to conduct those three tests and to shorten
    the amount of time that's needed for planning for the test,
    executing the test.
        It won't shorten much the amount of time that's needed to
    analyze the data. What we don't want to do in this testing is
    to cause the period during which the data from a test is
    analyzed so that we can learn, understand and learn to overlap
    with the period that's used for planning the next test, because
    if we do that then we're not going to be able to learn.
        Now, I'm not going to sit here and deny that the existing
    process couldn't be accelerated somewhat. But I would say this:
    planning for these tests, and in particular analyzing the data
    from the tests, is not like building automobiles. I don't mean
    that to be pejorative to automobile manufacturers, but
    automobile manufacturers can double their output by building a
    new plant and hiring a bunch of new workers. That's not the
    case when it comes to analyzing these test results. Could
    additional personnel help somewhat? Yes, they could. But it's
    the kind of activity that reaches a point of diminishing
    returns in my experience. For example, you can't half the time
    it takes to analyze data by hiring twice the number of
    engineers and analysts.
        So again I'll reiterate. My answer to both questions is
    yes, and I support a deliberate pace that's not any slower than
    it has to be, but allows the time that's needed to rigorously
    plan and rigorously analyze the test results. Otherwise we
    won't be learning and the point of the tests will be lost.
        Senator Udall. Thank you for that. I want to turn to
    Senator Fischer.
        I'm trying to think of something disparaging to say about
    our British cousins, because I think the uproar out in the hall
    is because Prince Harry is in the Senate, I should say, not in
    the House. He's in the Senate. Initially I thought it was
    because--and this is a very important hearing--that they were
    waiting for the results of our hearing. [Laughter.]
        Let me turn to Senator Fischer.
        Senator Fischer. Thank you, Mr. Chairman. Yes, I said to
    you earlier, I think Prince Harry's in the house. But you
    corrected that. He's in the Senate. [Laughter.]
        If I could just ask a couple more questions here on a
    different topic. On Tuesday before this subcommittee, we had
    the national lab people come and it was a very informative
    discussion that we had on that. I know in the past, Admiral,
    that you've worked with I believe it's the Lawrence Livermore
    Lab. Do you still work with our national labs?
        Admiral Syring. Yes, ma'am, very closely. Lawrence
    Livermore in particular is with the diode pumped alkali laser
    system. That is a big effort of ours and theirs for the future.
    So yes, ma'am.
        Senator Fischer. Are you worried about what's going to
    happen when we see funding cut and the concerns that the labs
    now have with their funding and not being able to do testing,
    how that will affect your program as well?
        Admiral Syring. Yes, ma'am, I am. I watched that very
    closely as to took the sequestration cuts.
        Senator Fischer. Madam Secretary, do you have anything to
    add on that point?
        Ms. Creedon. Other than this really is a significant
    problem. The labs, particularly the three labs that you had
    here before, truly are crown jewels for this country, and they
    do a wide variety of things. I know that they really are mostly
    billed as weapons labs, but each of them does much, much, much
    more than nuclear weapons. In many respects, a lot of what DOD
    has across the board from its various weapons systems and
    capabilities, many of that--many of those capabilities can find
    their way back in some form or fashion to the labs.
        They also are very much involved in the whole
    nonproliferation effort that DOD has, that's obviously not
    related to this hearing, but is under my office. They do a
    tremendous amount of work in detection technologies. They
    support our intelligence-gathering function and a wide variety
    of things. So they have a very wide and very important slate of
    activities. I do worry that we make sure we pay attention to
    all of that and keep them healthy.
        Senator Fischer. Thank you very much.
        I would like to thank all of the panel for being here
    today. I appreciate your views and your input on this very
    important subject.
        Thank you, Mr. Chairman.
        Senator Udall. Thank you, Senator Fischer.
        I thought I'd ask one last question of Ms. Chaplain and
    then we'll bring the hearing to a close. What I wanted to ask
    is, of course, the GAO has provided numerous suggestions over
    the years for improving missile defense acquisitions. You've
    had some additional recommendations this year. There seems to
    be a tension between the sense of urgency and demand for
    missile defense capabilities, particularly to address combatant
    commander needs for existing regional missile threats, which I
    referenced earlier, and the acquisition practices you
    recommend. Given that tension, can you tell us what acquisition
    improvements you believe are achievable in the near-term to
    meet the needs of our warfighters, but also ensure that the
    systems we provide work well and are affordable? Easy question,
    I know.
        Ms. Chaplain. I agree that there is tension, because
    there's a lot of schedule pressure on MDA to deliver systems
    within presidential set timeframes. There are concerns about
    the industrial base and the need to keep it stabilized and
    productive over time.
        We, on the other hand, do recommend strategies that are
    knowledge-based. We talk about concurrency, being more
    sequential in terms of the development process. But we are not
    recommending 100 percent absolutely conservative strategies,
    given the mission that missile defense has. We do believe the
    overlap in some activities, like production and testing, has
    just been way too significant in some cases and caused just way
    too many problems in terms of retrofitting, that end up
    ultimately disrupting the industrial base because you're
    turning them on and off and on and off, and it's just really
    hard to get people on and off and on and off, and it creates
    more problems.
        For older programs, it's do what you can with what you have
    in terms of reducing that risk. Where we really like to see
    attention placed is on the newer programs and structuring them
    in a way--now that you have an initial capability in place, you
    have more the ability to follow best practices and more
    knowledge-based acquisitions.
        So where we've seen new programs take higher-risk
    approaches, they're setting their commitment dates where all
    the acquisition activities ramp up before they really
    understand the requirements and how they match their resources,
    we're really encouraging them to restructure those milestones
    in a way that will benefit them in the long run. To its credit,
    Missile Defense has done that on some key programs in recent
    years.
        So we're hoping, with the focus on recent programs, we can
    have better execution paths going forward.
        Senator Udall. Thank you for those thoughtful
    recommendations and insights.
        I'm going to bring the hearing to a close. I think I speak
    for Senator Fischer when I say I had a chance to look at each
    and every one of your biographies and it makes me really proud
    and impressed, and I'm in awe of each and every one of your
    commitments to public service, as well as your educational
    backgrounds. You give me a lot of comfort that you're on the
    mission, that you're serving our country, and that you've
    dedicated yourselves to causes greater than your own self-
    interest.
        So thank you for being here.
        General Formica, we wish you all the best. I don't think
    you're really going to retire, knowing you. I look forward to
    the next mountain you're going to climb.
        With that, we'll have additional questions for the record
    and we'll ask that you provide prompt responses to those
    questions. We are in the process of working up our subcommittee
    mark here soon because we want to get the National Defense
    Authorization Act underway. So I know you'll do so.
        With that, this hearing is adjourned.
        [Questions for the record with answers supplied follow:]

                  Questions Submitted by Senator Jeff Sessions

                        EAST COAST MISSILE DEFENSE SITE

        1. Senator Sessions. Secretary Creedon, what led Secretary of
    Defense Hagel to announce plans to deploy an additional 14 ground-based
    interceptors (GBI) at Fort Greely, AK?
        Ms. Creedon. On March 15, 2013, Secretary Hagel announced a series
    of steps the United States will take to stay ahead of the challenge
    posed by North Korea and Iran's development of longer-range ballistic
    missile capabilities. The United States has missile defense systems in
    place to protect the homeland from limited intercontinental ballistic
    missile (ICBM) attacks, but North Korea in particular has recently made
    advances in its capabilities. Specifically, North Korea announced last
    month that it conducted its third nuclear test, and last April
    displayed what appears to be a road-mobile ICBM. It also used its Taepo
    Dong-2 missile to put a satellite in orbit, thus demonstrating progress
    in its development of ICBM technology.
        In order to bolster protection of the Homeland and stay ahead of
    this threat the Secretary announced four steps. First, we will
    strengthen Homeland missile defense by deploying 14 additional Ground-
    Based Interceptors (GBIs) at Fort Greely, AK. This will increase the
    number of deployed GBIs from 30 to 44, including the 4 GBIs at
    Vandenberg Air Force Base, CA.
        Second, with the support of the Japanese Government, we are
    planning to deploy an additional radar in Japan. This second TPY-2
    radar will provide improved early warning and tracking of missiles
    launched from North Korea at the United States or Japan.
        Third, as required by statute, the Department of Defense (DOD) will
    consider a number of locations in the United States for a potential
    additional interceptor site, and DOD will complete Environmental Impact
    Statements (EIS) for candidate sites. Although the administration has
    not made any decision on whether to proceed with an additional site,
    completing these EISs will shorten the timeline for construction should
    that decision be made.
        Fourth, we are restructuring the SM-3 IIB program. The timeline for
    deploying this interceptor had been delayed to at least 2022 due to
    congressional cuts in funding. Meanwhile, the threat continues to
    mature. By shifting resources from this lagging program to fund the
    additional GBIs as well as advanced kill vehicle technology that will
    improve the performance of the GBI and other versions of the SM-3, we
    will be able to add protection against missiles from Iran sooner, while
    also providing additional protection against the North Korean threat.
        The collective result of these four decisions will be to improve
    further our ability to counter future missile threats from Iran and
    North Korea, while maximizing scarce DOD resources.

        2. Senator Sessions. Secretary Creedon, like North Korea, Iran has
    demonstrated an early ICBM capability by launching satellites into
    space, and also seems bent on acquiring a nuclear capability. Is the
    administration also concerned that Iran could pose a direct threat to
    the United States?
        Ms. Creedon. Yes, the administration remains concerned about the
    potential emergence of an Iranian ICBM capable of reaching the U.S.
    Homeland. The United States is currently defended from a limited
    intercontinental-range ballistic missile capability that Iran may
    acquire in the foreseeable future. In March 2013, due to developments
    in the ICBM threat from North Korea, but also due to the continued risk
    of the emergence of an Iranian ICBM capability, Secretary Hagel
    announced several steps to strengthen existing U.S. Homeland missile
    defenses. In addition, the fiscal year 2014 budget request maintained
    funding for ongoing efforts to improve the Ground-Based Midcourse
    Defense (GMD) system, specifically:

             A Ground-Based Inceptor (GBI) improvement program;
             Upgrades to the Command, Control, Battle Management,
            and Communications (C\2\BMC) systems;
             Emplacement of additional In-Flight Interceptor
            Communications System Data Terminal on the U.S. east coast by
            2015; and
             Upgrades to the Early Warning Radars at Clear, AK, and
            Cape Cod, MA, by 2017.

        Although Iran has not yet tested an ICBM, it has demonstrated an
    ability to launch small satellites, and has worked to develop larger
    space-launch vehicles and longer-range missiles.
        The Intelligence Community (IC) assesses that Iran is developing
    nuclear capabilities to enhance its security, prestige, and regional
    influence and give it the ability to develop nuclear weapons, should a
    decision be made to do so. Iran has developed technical expertise in a
    number of areas--including uranium enrichment, nuclear reactors, and
    ballistic missiles--from which it could draw if it decided to build
    missile-deliverable nuclear weapons. The IC assesses that Iran would
    likely choose a ballistic missile as its preferred method of delivering
    a nuclear weapon, if one is ever fielded.

        3. Senator Sessions. Secretary Creedon, with the termination of the
    SM-3 block IIB program, protection for the United States against Middle
    East threats will not be as effective as originally envisioned by two
    Presidents. Does this not argue for an additional missile defense site
    in the United States?
        Ms. Creedon. The United States is currently defended from a limited
    intercontinental-range ballistic missile capability that Iran may
    acquire in the foreseeable future. Iran has not yet tested an ICBM but
    has demonstrated an ability to launch a small satellite, and has worked
    to develop larger space-launch vehicles and longer-range missiles.
        In order to bolster our protection of the Homeland and stay ahead
    of this potential threat, DOD is taking several steps, including
    deploying 14 additional GBIs at Fort Greely, AK. This will increase the
    number of deployed GBIs from 30 to 44, including the 4 GBIs at
    Vandenberg Air Force Base, CA.
        Other steps are also underway. We plan to deploy an additional In-
    Flight Interceptor Communications System data terminal on the U.S. east
    coast and upgrade the Early Warning Radars at Clear, AK, and Cape Cod,
    MA, by 2017. Additionally, we will accelerate the command and control
    system's development and discrimination software to handle larger
    numbers of incoming ballistic missiles. These improvements in sensor
    coverage, command and control, and interceptor reliability will have an
    impact on the expected performance of the GMD system. Furthermore, we
    are restructuring the SM-3 IIB program to develop common kill vehicle
    technology to address evolving threats. I am confident that these steps
    will allow us to maintain an advantageous position relative to the
    Iranian and North Korean ICBM threats.
        The Department is in the early stages of identifying at least three
    candidate locations for a potential third GBI site as directed by the
    National Defense Authorization Act (NDAA) for Fiscal Year 2013. At
    least two of the possible sites must be on the east coast. We will
    complete the EI process for the possible sites.

        4. Senator Sessions. Secretary Creedon, the additional 14 GBIs in
    Alaska are meant to address the North Korean threat. What if Iran and
    North Korea collude? Will we then have enough missiles?
        Ms. Creedon. I cannot speculate about any North Korea and Iran
    collusion to attack the United States with ICBMs simultaneously. The
    United States currently enjoys an advantageous position of 30 deployed
    GBIs to counter the North Korean ICBM threat, and we are increasing
    that number to 44 deployed interceptors by 2017. Iran does not
    currently possess any ICBMs but the United States is currently defended
    from a potential ICBM capability that Iran may acquire in the
    foreseeable future. We are committed to maintaining an advantageous
    position vis-a-vis the threats from North Korea and Iran. DOD is
    undertaking continued improvement to the GMD system, including efforts
    to enhance GBI performance, the deployment of new sensors, and upgrades
    to existing sensors. We have also developed and maintained a hedge
    strategy within our GMD program to address possible delays in the
    development of new missile defense systems and the possibility that the
    projected ICBM threat could advance faster or could include larger
    numbers of ICBMs than anticipated.

        5. Senator Sessions. Admiral Syring, how would you assess the
    technical and operational advantages of an additional Homeland missile
    defense site?
        Admiral Syring. A potential East Coast Missile Field (ECMF) would
    add battlespace and interceptor capacity; however, it would come at
    significant materiel development and service sustainment costs. We
    recommend that the Department complete the Continental United States
    Interceptor Site Study and EIS mandated by section 227 of the NDAA for
    Fiscal Year 2013 (Public Law 112-239) and conduct a successful Ground-
    Based Interceptor Capability Enhancement (CE)-II flight intercept test
    to validate the capability of the CE-II Exo-Atmospheric Kill Vehicle
    before making any decision with respect to an ECMF.
        The operational advantages of an additional homeland missile
    defense site should be assessed by the Commander, U.S. Northern Command
    (NORTHCOM).

        6. Senator Sessions. Admiral Syring, how much would such a system
    cost?
        Admiral Syring. Total estimated cost of $3,107 million (M)
    (Continental United States (CONUS)) Interceptor Site and GBIs CONUS
    Interceptor Site (CIS): $2,026M (Base Year 2012 dollars):

             $69 million - Military Construction (MILCON) Planning
            and Design
             $997 million - Major MILCON
             $960 million - Research, Development, Test, and
            Evaluation

        GBI: $1,081 million (20 additional GBIs).
        Note: Location will affect CIS cost (e.g. geology, logistics, et
    cetera).

        7. Senator Sessions. Admiral Syring, how much money could you use
    in fiscal year 2014 to get started?
        Admiral Syring. The NDAA for Fiscal Year 2013 contained a
    requirement for DOD to evaluate at least three additional locations in
    the United States that would be best suited for hosting a missile
    defense base to protect the Homeland and to conduct an EIS for the
    candidate sites.
        Currently, the EIS is not funded in the MDA PB14 request. However,
    MDA intends to fund the fiscal year 2014 EIS requirements ($3.641
    million) within existing resources.
        Once started, the EIS will require 12 to 18 months to complete. No
    site specific funding can be executed until completion of the EIS and
    subsequent identification of the selected site. The earliest that would
    occur is fiscal year 2015. Therefore, no additional funding is required
    in fiscal year 2014.

        8. Senator Sessions. Admiral Syring, how long would it take to
    build an additional Homeland missile defense site?
        Admiral Syring. Five years assuming a known site--2 years for
    Planning and Design, and 3 years for construction. Note: Location (e.g.
    construction seasons, geology, et cetera) and budget programming (i.e.
    MILSON) will affect schedule.

        9. Senator Sessions. Admiral Syring, would you deploy the current
    GBI at that site, or a two-stage version of the GBI?
        Admiral Syring. If and when a decision to deploy an East Coast
    Missile Defense Site is made, the specific site location and the mix of
    three-stage and two-stage GBIs will be established based upon the
    threat and performance requirements. Analysis will be performed in
    conjunction with NORTHCOM to determine location and optimal mix.

        10. Senator Sessions. Admiral Syring, would such a site benefit
    from the deployment of an additional sensor, such as an X-band radar?
        Admiral Syring. Yes. Overall, investment in Ballistic Missile
    Defense System (BMDS) discrimination and sensor capabilities would
    result in cost-effective near-term improvements to homeland missile
    defense. Specifically, an additional X-band sensor would improve the
    effectiveness of the existing GBI sites at Fort Greeley, AK, and
    Vandenberg Air Force Base, CA, or at an additional East Coast Missile
    Defense Site. DOD is evaluating potential sensors enhancements that
    could be pursued to improve the BMDS kill chain and increase threat
    discrimination. This evaluation, and others, will serve to inform
    decisions on our future BMDS architecture and budget requests.

                              COMMON KILL VEHICLE

        11. Senator Sessions. Admiral Syring, what is your timeline for
    providing a new kill vehicle for the GBI?
        Admiral Syring. The Missile Defense Agency (MDA) is developing
    acquisition approaches and cost estimates for maturing technology to
    transition to present Agency Programs of Record (GBI and SM-3) kill
    vehicle development. The objective is to improve the GBI's kill vehicle
    in three phases. Notionally, Phase I improvements will incorporate
    mature technology hardware and software that will improve reliability.
    Phase II kill vehicle improvements will enhance performance against
    current and some emerging threats through matured discrimination and
    communication technology. Phase III will evolve and develop a
    capability to install multiple kill vehicles on a booster stack. A
    specific timeline for the above phases will be provided after MDA and
    the Department has completed a thorough analysis.

        12. Senator Sessions. Admiral Syring, will this timeline pace the
    growing threat?
        Admiral Syring. Threat assessments are continually being updated by
    the Intelligence Community, and using these assessments, the MDA will
    develop and deliver Common Kill Vehicle technology and components to
    expand Ballistic Missile Defense capability to address projected
    threats. The common kill vehicle technology effort will seek to gain
    higher performance and increased reliability components that can be
    inserted into the existing Ground Based Interceptor fleet and for
    potential incorporation in a future Standard Missile-3 variant.

        13. Senator Sessions. Admiral Syring, how much will such a
    development effort cost?
        Admiral Syring. We are defining a phased Common Kill Vehicle
    technology effort to develop and transition capability to our GBI and
    SM-3 family of interceptors. Design solutions for the three phases are
    not yet complete, so precise costs are still uncertain. The MDA is
    working with the interceptor contractor base to finalize the content of
    these phases which will inform our cost estimate.

        14. Senator Sessions. Admiral Syring, is there funding in the
    fiscal year 2014 request for this new kill vehicle?
        Admiral Syring. The MDA's fiscal year 2014 budget includes funding
    for the Common Kill Vehicle Technology effort. MDA will request funding
    through the Future Years Defense Plan, fiscal year 2015 and beyond to
    support kill vehicle improvements.

        15. Senator Sessions. Admiral Syring, will you examine the
    feasibility of placing more than one kill vehicle atop the GBI?
        Admiral Syring. Yes, we will as part of our phased approach to
    improving the kill vehicle. Being able to destroy more than one
    potentially lethal object from a single interceptor will save a
    substantial portion of our inventory. Being able to destroy more than
    one lethal object also has the potential to shift the missile battle in
    favor of the defense.

                        PRECISION TRACKING SPACE SYSTEM

        16. Senator Sessions. Secretary Creedon and Admiral Syring, why did
    DOD terminate the Precision Tracking Space System (PTSS)?
        Ms. Creedon and Admiral Syring. DOD concluded that the risk and
    cost associated with the PTSS was too high. The program therefore was
    terminated.
        Upon review by the Government Accountability Office, several
    concerns were noted. Two of the concerns critical to the decision to
    cancel the program were:

             The long-term program affordability due to the
            satellite constellation replenishment and launch vehicle costs;
            and
             The contract concurrency between the lab development
            program and the industry production program.

        DOD continues to review alternatives that will provide persistent
    wide-area coverage at a sustainable cost.

        17. Senator Sessions. Secretary Creedon and Admiral Syring, how do
    you intend to meet future sensor requirements that PTSS was intended to
    provide, such as tracking missile threats and warheads from birth to
    death?
        Ms. Creedon and Admiral Syring. DOD and MDA understand the
    potential value of a persistent space-based sensor to the BMDS mission
    and we are studying how best to support future sensor requirements
    following the cancellation of the PTSS. The MDA will leverage the
    remaining PTSS funding to examine the layered nature of BMDS sensors to
    meet future sensor needs.
        MDA continues to study program options and sensor solutions for the
    future BMDS, including space based systems. Preliminary findings from
    these studies show that enhancing and integrating sensors would
    increase the value of the scarce interceptor inventory.
        An analysis of how a combination of future surface, space, and air
    sensors can best be combined to provide robust and affordable sensor
    coverage is in progress. MDA will share the results of the analysis
    with Congress once it is completed.

        18. Senator Sessions. Secretary Creedon and Admiral Syring, will
    the missile defense system continue to have a space-based sensor layer?
        Ms. Creedon. The BMDS, through the C\2\BMC element continues to
    take advantage of boost-phase cueing as provided by the extended family
    of missile warning sensors: the Air Force's Defense Support Program and
    Space Based Infrared System, and other Overhead Persistent Infrared
    (OPIR) sensors. The BMDS also uses C\2\BMC to provide reverse cues to
    capture data from those systems for BMDS hit and kill assessments.
        Those systems, however, do not have the capability to provide fire
    control quality missile tracks or discrimination data, as they are too
    distant from the threat objects. Additional space-based sensors that
    are closer to the threat object are necessary to deliver the warfighter
    requirements for tracking of a threat missile through all phases of its
    flight.
        The MDA plans to partner with the Office of the Secretary of
    Defense (OSD); Air Force Space Command, Space and Missile Systems
    Center; U.S. Strategic Command; the National Geospatial Agency; the
    National Reconnaissance Office; and others on a post-PTSS space
    architecture study. The study will remove the traditional boundaries of
    space acquisitions by assessing all possible methods of providing
    capability: satellites or payloads hosted by MDA and non-MDA
    organizations, commercial or civil partnerships, fee-for-service
    options, capabilities of current systems or new satellite acquisitions.
    It will assess the logical combinations of missile defense and non-
    missile defense requirements for an overall acquisition that is
    minimally affected by the joint needs of a multi-mission customer base.
    It will also investigate how the complete requirements set could be
    divided among and assigned to multiple platforms (new or existing) if
    heterogeneous implementation is fiscally advantageous. Participation in
    the joint study will not bind the parties to participate in a joint
    acquisition program; yet it will identify the ``art of the possible''
    as it pertains to delivering multi-mission capability at different
    budgets and schedules.
        Admiral Syring. Yes. The BMDS, through the C\2\BMC element
    continues to take advantage of boost-phase cueing as provided by the
    extended family of missile warning sensors: Air Force's Defense Support
    Program and Space Based Infrared System, and other OPIR sensors. The
    BMDS also uses C\2\BMC to provide reverse cues to capture data from
    those systems for BMDS hit and kill assessments.
        However, those systems do not have the capability to provide fire
    control quality missile tracks or discrimination data as they are too
    distant from the threat objects. Additional space-based sensors that
    are closer to the threat object are necessary to deliver the warfighter
    requirements for birth-to-death tracking. As suggested by a draft
    version of the NDAA for Fiscal Year 2014 an analysis of alternatives is
    necessary to determine the most appropriate materiel solution for that
    requirement.
        The MDA plans to partner with the OSD, Air Force Space Command,
    Space and Missile Systems Center, Strategic Command, National
    Geospatial Agency, the National Reconnaissance Office, and others on a
    post-PTSS space architecture study. The study will remove the
    traditional boundaries of space acquisitions by assessing all possible
    methods of providing capability: Satellites or payloads hosted by MDA
    and non-MDA organizations, commercial or civil partnerships, fee-for-
    service options, capabilities of current systems or new satellite
    acquisitions. It will assess the logical combinations of missile
    defense and non-missile defense requirements for an overall acquisition
    that is minimally impacted by the joint needs of a multi-mission
    customer base. It will also investigate how the complete requirements
    set could be divided between and assigned to multiple platforms (new or
    existing) if heterogeneous implementation is fiscally advantageous.
    Participation in the joint study will not bind the parties to
    participate in a joint acquisition program, yet it will identify the
    ``art of the possible'' as it pertains to delivering multi-mission
    capability at different budgets and schedules.

                              FUTURE SM-3 MISSILE

        19. Senator Sessions. Admiral Syring, with the termination of the
    SM-3 block IIB program, what are the plans of DOD for a future SM-3
    missile after deployment of the IIA variant in 2018?
        Admiral Syring. Long-term planning to address ballistic missile
    threats, including upgrades to the Aegis Ballistic Missile Defense
    weapons system and the need for advanced Standard Missile variants, is
    an ongoing process managed by the MDA in response to requirements
    directed by the Joint Staff, Office of Secretary of the Defense Policy,
    combatant commanders, and the Services. With termination of the IIB
    program, MDA does not currently have programmed development of a future
    Standard Missile-3 (SM-3) variant following delivery of the IIA.
        As part of Secretary of Defense Hagel's announcement regarding
    missile defense priorities, there was a portion which addressed a shift
    of emphasis to advance kill vehicle technology and components for
    interceptors, which could potentially be included in SM-3 variants. MDA
    has initiated a Common Kill Vehicle Technology effort to improve
    performance and capability of Ground Based Interceptors and SM-3
    variants.

        20. Senator Sessions. Admiral Syring, is it possible for the
    Standard Missile to play a Homeland defense role, as originally
    intended for the IIB variant?
        Admiral Syring. The MDA is prepared to respond to this question,
    but access to the information is protected by higher program security
    classification restrictions. MDA is currently working with the
    responsible department to enable access to this information.

             MISSILE DEFENSE OPERATIONS IN RESPONSE TO NORTH KOREA

        21. Senator Sessions. Secretary Creedon and General Formica, please
    summarize our missile defense deployments--and those of our allies--in
    response to the recent threat posed by North Korea.
        Ms. Creedon and General Formica. During the recent North Korean
    provocation, the U.S. ballistic missile defense (BMD) capabilities
    protected the United States, our forces, and several of our allies from
    a possible ballistic missile attack from North Korea. Some forces were
    already in place to provide homeland and regional BMD capabilities,
    including Aegis BMD-capable ships, the AN/TPY-2 radar based in Japan,
    the GMD system, and other supporting sensors. In addition, we deployed
    a Terminal High-Altitude Area Defense (THAAD) battery to Guam and the
    Sea Based X-Band (SBX) radar. Allies with BMD capabilities in the U.S.
    Pacific Command area of responsibility also participated in this
    operation, providing their resources to help counter the threat.

        22. Senator Sessions. Secretary Creedon and General Formica, what
    missile defense assets did we activate in the region and in the United
    States to address the threat?
        Ms. Creedon and General Formica. In addition to the GMD system for
    homeland missile defense, the United States activated supporting
    sensors, the AN/TPY-2 radar based in Japan, Aegis BMD-capable ships in
    the region, a deployed THAAD battery in Guam, and the SBX radar. Allies
    with BMD capabilities in the U.S. Pacific Command area of
    responsibility also participated in this operation, providing their
    resources to help counter the threat.

        23. Senator Sessions. Secretary Creedon and General Formica, what
    lessons did you learn?
        Ms. Creedon. From a Policy perspective, the missile defense steps
    implemented in response to North Korea's provocations further
    demonstrated the strategic and diplomatic value of missile defense
    capabilities. By activating and deploying missile defenses, U.S. and
    allied leaders were able to signal resolve, enhance deterrence of
    ballistic missile proliferation or use, and provide a way to mitigate
    the threat in case of deterrence failure. Diplomatically, missile
    defenses were critical in assuring U.S. allies and partners that we
    remained willing and able to uphold our security commitments in the
    region. The recent episode has also highlighted the continued
    importance of the United States as a leader and force for stability in
    the region. Finally, the increased stress on low-density/high-demand
    missile defense capabilities further demonstrated the value of mobile
    and relocatable missile defense assets, which allow the United States
    to adapt in response to evolving threats worldwide.
        General Formica. We learned four operational lessons in response to
    the recent North Korean event. The situation reinforced the need for:
    the capacity to simultaneously support more than one operation;
    sufficient indications and warnings; persistent, in depth, sensor
    coverage; and better integration of allies and coalition capabilities.

        24. Senator Sessions. Secretary Creedon and General Formica, are
    you confident that had North Korea launched a missile capable of
    reaching the United States, we could have destroyed that missile in
    flight?
        Ms. Creedon and General Formica. Yes, we are confident that the GMD
    system, supported by other deployed/available BMD capabilities, would
    have been able to protect the United States from a limited North Korean
    long-range ballistic missile attack.

        25. Senator Sessions. Secretary Creedon and General Formica, did we
    have enough Aegis-capable ships to deal with both the North Korea
    contingency and other potential ballistic missile threats--in the
    Middle East, for example?
        Ms. Creedon. Yes, DOD is able to support worldwide deployment
    needs. It should be noted, however, that U.S. missile defenses are in
    high demand across the globe. U.S. missile defense policy emphasizes
    the use of mobile and flexible assets in order to adapt as the threat
    evolves. In periods of crisis, we have the capacity to surge additional
    forces, but sustaining these forces at higher readiness postures may
    have implications on the Military Departments' ability to conduct
    regular training and maintenance schedules. DOD employs the global
    force management process to allocate these assets, balancing combatant
    command operational risks from a global perspective with Military
    Department force management risk to ensure the future health of the
    force. We also continue to work with allies to enhance their missile
    defense capabilities.
        General Formica. Yes, DOD was able to meet its worldwide deployment
    needs. However, it should be noted that U.S. missile defenses are in
    high demand across the globe. U.S. missile defense policy emphasizes
    the use of mobile and flexible assets in order to adapt as the threat
    evolves. In periods of crisis, we have the capacity to surge additional
    forces, but sustaining these forces at higher readiness postures may
    have implications on the Services' ability to train and maintain. The
    Department employs the global force management process to allocate
    these assets, balancing combatant command operational risks from a
    global perspective with Service force management risk to ensure the
    future health of the force. Aegis BMD-capable ships and SM-3
    interceptors are high demand assets that must be carefully managed
    during the global force management process in order to meet demand. We
    can only surge for a defined period and still meet multi-mission
    requirements.
                                     ______

                  Questions Submitted by Senator David Vitter

              ARMY/NAVY TRANSPORTABLE RADAR SURVEILLANCE--MODEL 2

        26. Senator Vitter. Admiral Syring, with the number of increasing
    threats around the world, such as threats to Israel and Turkey posed by
    Syrian instability; to U.S. Central Command (CENTCOM) posed by Iran;
    and to U.S. Pacific Command (PACOM) by increasingly frequent missile
    tests by North Korea, there is an urgent demand by combatant commands
    (COCOM) for missile defense capabilities. While Congress provided
    funding in fiscal year 2013 for the procurement of a 12th TPY-2 to keep
    pace with COCOMs' demands, the fiscal year 2014 defense budget request
    does not contain adequate funding to procure a 13th TPY-2. How does the
    MDA intend to continue TPY-2 production when the funding request is
    $115 million short of what is necessary?
        Admiral Syring. The President's budget request for 2014 reflects
    the current warfighter radar unit requirements. The $62 million
    procurement funding requested in President's budget 2014 is to purchase
    a float Cooling Equipment Unit, radar critical spares and long lead
    Transmit/Receive Integrated Microwave Modules for the float Antenna
    Equipment Unit. The President's budget does not request funds for a
    13th AN/TPY-2 radar.
        The MDA will readdress COCOM sensor requirements as a part of the
    President's budget request for fiscal year 2015.
        MDA supports the Joint Staff, the Services, and the combatant
    commanders through participation in the warfighter involvement process.
    This process allows the warfighter to establish priorities for
    equipment and capabilities, and MDA satisfies those priorities within
    budget and schedule constraints. The final program plan is adjudicated
    by the Missile Defense Executive Board where all stakeholders are
    represented. This process ensures that maximum capability is provided
    within resources available.

                             PATRIOT MODERNIZATION

        27. Senator Vitter. General Formica, COCOMs' demands for the
    Patriot system have continued to increase given the nature of threats
    to our forward deployed forces. However, the President's fiscal year
    2014 budget request does not address the $50 million cut to the Radar
    Digital Processor (RDP), which is necessary to make upgrades to make
    Patriot processors compatible with commercial-off-the-shelf (COTS)
    processors, causing upgrades to RDP to be delayed. What is the Army's
    timeline for undertaking modernization efforts to the Patriot system,
    such as the RDP, in order to meet demand?
        General Formica. As a result of the fiscal year 2013 $50 million
    RDP cut and a new contractor cost estimate, the Army believes the cost
    to recover has grown to $94 million. Additionally, the Army will need
    to recover from the RDTE mark of $60 million, which affects software
    development required to defeat current threats while leveraging RDP and
    Missile Segment Enhancement (MSE) Missile capability. As a result of
    the fiscal year 2013 RDP cut, the Army anticipates a minimum 2-year
    slip in the delivery of 25 RDPs to the COCOMs. Whereas these RDPs would
    have been fielded in fiscal year 2015-fiscal year 2016, they will now
    be fielded no earlier than fiscal year 2017-fiscal year 2018, delaying
    availability of enhanced radar processing to the COCOMs. Similarly, as
    a result of the $60 million fiscal year 2013 RDT&E cut, associated
    software capabilities designed to leverage the RDP and the MSE missile
    will slip 1 to 3 years to the right.

     JOINT LAND ATTACK CRUISE MISSILE DEFENSE ELEVATED NETTED SENSOR SYSTEM

        28. Senator Vitter. General Formica, the Army has announced plans
    to demonstrate one of two existing Joint Land Attack Cruise Missile
    Defense Elevated Netted Sensor System (JLENS) systems from Aberdeen
    Proving Ground starting in late 2013 or early 2014, in support of the
    North American Aerospace Command (NORAD) mission to defend the National
    Capital Region, monitoring land, air, and sea traffic from Norfolk to
    New York. DOD is expected to make a decision regarding procurement of
    this capability for COCOM deployment in fulfillment of validated
    requirements from NORTHCOM, U.S. Southern Command (SOUTHCOM), PACOM,
    and CENTCOM. Is the Army currently reviewing the feasibility of an
    outside the continental United States (OCONUS) JLENS demonstration in
    support of COCOMs' demands?
        General Formica. The Army does not have a requirement to deploy the
    second orbit and is not conducting planning for deploying the second
    JLENS orbit to an Outside the Continental United States location at
    this time. The OSD, in an Acquisition Decision Memorandum (ADM) signed
    on May 24, 2012, directed the Army to complete the JLENS Test and
    Evaluation Program through Developmental Test number 3 ending in fourth
    quarter of fiscal year 2013; assist in site selection and planning for
    an employment of one JLENS orbit in the Continental United States; to
    conduct the exercise; to continue to develop planned capabilities,
    assess test results and correct short-comings/deficiencies; and to
    develop documentation to track and assess program status. The ADM
    directs the Army to not procure the support equipment and government-
    furnished equipment required for the second orbit or plan for entry of
    the JLENS program into the production phase. The Joint Requirements
    Oversight Committee (JROC) concurred to deploy JLENS to Aberdeen
    Proving Ground, MD, for an operational exercise from fiscal year 2014
    to fiscal year 2017, using one of two Engineering and Manufacturing
    Development orbits. The President's fiscal year 2014 budget requests
    funding to support limited operations of the Program Office, fund
    military construction for APG in support of the exercise, and provide
    funds to support the exercise.
                                     ______

                    Questions Submitted by Senator Mike Lee

                    MISSILE DEFENSE NEGOTIATIONS WITH RUSSIA

        29. Senator Lee. Secretary Creedon and Admiral Syring, do you
    believe it is in the national security interests of the United States
    to declassify information or alter our strategic defense posture
    because of the objections of another country?
        Ms. Creedon. No. Russia will not be allowed to have a veto on U.S.
    missile defense plans, programs, and decisions. The President has made
    clear on numerous occasions that cooperation with Russia will not in
    any way limit U.S. or North Atlantic Treaty Organization (NATO) missile
    defenses. The United States is committed to develop and deploy missile
    defenses that are affordable and effective against projected threats.
    The United States will not provide any information to Russia that would
    compromise U.S. national security.
        Admiral Syring. Missile defense discussions with the Russian
    Federation have been led by the Chairman of the Joint Chiefs of Staff,
    Under Secretary of Defense for Policy, and Under Secretary of State for
    Arms Control and International Security. I defer specific questions on
    U.S.-Russia Federation missile defense discussions as well as questions
    related to national security policy to them.

        30. Senator Lee. Secretary Creedon, what proposals were discussed
    between Under Secretary James Miller and Russian Deputy Defense
    Minister Anatoly Antonov?
        Ms. Creedon. Under Secretary Miller and Minister Antonov discussed
    the missile defense-related aspects of the letter that President Obama
    sent to President Putin in February 2013. Specifically, Dr. Miller
    described the proposal for missile defense cooperation and transparency
    that was included in President Obama's letter. The Russian officials
    appreciated the opportunity for detailed discussions and said that
    Russia's response is pending further consideration.
        The U.S. objective in these talks is to explore opportunities for
    mutually beneficial missile defense cooperation and to reassure Russia
    that our missile defenses are not a threat to Russia's security and
    will not undermine strategic stability. The United States will not
    accept limitations on its missile defenses.
        Prior administrations, both Democratic and Republican, have sought
    such cooperation and transparency because they also deemed this to be
    in the U.S. interest.
        We are prepared to brief Congress on this issue.

        31. Senator Lee. Secretary Creedon, are there any plans for regular
    talks to take place with the Russian Government on missile defense? If
    so, please elaborate on what these meetings would entail.
        Ms. Creedon. The United States plans to continue its dialogue with
    Russia on opportunities for missile defense cooperation. This dialogue
    has continued under both Republican and Democratic administrations,
    going back many years. We are pursuing a bilateral U.S.-Russia
    dialogue, and U.S. officials regularly provide readout briefings to our
    NATO allies on the substance of such discussions, and will continue to
    inform our allies as discussions progress. At the same time, we are
    also continuing to explore opportunities for missile defense
    cooperation in a multilateral setting via the NATO-Russia Council. The
    U.S. objective in these talks is to pursue mutually beneficial missile
    defense cooperation and to reassure Russia that our missile defenses
    are not a threat to Russia's security and will not undermine strategic
    stability. In both tracks, we will not accept limitations on U.S.
    missile defenses.

        32. Senator Lee. Secretary Creedon, General Formica, and Admiral
    Syring, if DOD decided that additional missile defense systems needed
    to be deployed for the protection of the United States, domestically or
    around the world, would the Russian Government be consulted before the
    decision was made?
        Ms. Creedon. The United States will continue to discuss missile
    defense with Russia and explore opportunities for cooperation, but
    Russia will not be allowed to have a veto on U.S. missile defense
    plans, programs, and decisions. The President has made clear on
    numerous occasions that cooperation with Russia will not in any way
    limit U.S. or NATO missile defenses. The United States is committed to
    develop and deploy missile defenses that are affordable and effective
    against projected threats.
        General Formica. If DOD were to decide that additional missile
    defense assets should be deployed to protect the United States, Joint
    Functional Component Command for Integrated Missile Defense would
    provide operational assessments of the projected deployments based on
    threat and capability. Decisions as to which foreign partners or other
    entities should be consulted are made at other levels in the
    Department. As the warfighter, we will execute deployment decisions
    tasked to us by the National Command Authority.
        Admiral Syring. Missile defense discussions with the Russian
    Federation have been led by the Chairman of the Joint Chiefs of Staff,
    Under Secretary of Defense for Policy, and Under Secretary of State for
    Arms Control and International Security, and I defer specific questions
    on U.S.-Russia Federation missile defense discussions to them.
                                     ______

                  Questions Submitted by Senator Kelly Ayotte

                            FORCE PROTECTION ASSETS

        33. Senator Ayotte. Admiral Syring, AN/TPY-2 was designed to
    provide both THAAD fire control and precision track information to the
    BMDS. Congress in both the NDAA for Fiscal Year 2013 and the fiscal
    year 2013 Continuing Resolution provided funds ($163.0 million) for
    procurement of a 12th radar to meet this demand. The fiscal year 2014
    budget request does not contain funding to procure a 13th radar to keep
    pace with increasing threats (it only contains $62.0 million). An
    additional $115.0 million would be required to do so. Stabilized TPY-2
    production also enables MDA to preserve the option of using existing
    technologies--like TPY-2 and the SM-3--to provide an east coast missile
    defense solution. There are a number of increasing missile threats
    around the world. In the NDAA for Fiscal Year 2013, funding for an
    additional TPY-2 radar was included to meet growing COCOM demands for
    missile defense. I understand the demand has increased from the COCOMs
    for additional missile defense capabilities like the TPY-2 radar. How
    does MDA intend to continue TPY-2 production?
        Admiral Syring. There are validated warfighter requirements for
    more THAAD batteries than are funded in the President's budget. AN/TPY-
    2 radar procurement must be budgeted as part of additional THAAD
    battery procurements.
        The MDA supports the Joint Staff, the Services, and the combatant
    commanders through participation in the Warfighter Involvement Process.
    This process allows the warfighter to establish priorities for
    equipment and capabilities, and MDA satisfies those priorities within
    budget and schedule constraints. The final program plan is adjudicated
    by the Missile Defense Executive Board where all stakeholders are
    represented. This process ensures that maximum capability is provided
    within resources available.

        34. Senator Ayotte. Admiral Syring, would additional funding to
    MDA, to provide an additional THAAD system with a TPY-2 radar, help
    meet that need by the COCOMs?
        Admiral Syring. There are validated warfighter requirements for
    more THAAD batteries than are funded in the President's budget.
    Additional funding would help meet this warfighter requirement, but at
    the expense of other higher priority DOD requirements.
        The MDA supports the Joint Staff, the Services, and the combatant
    commanders through participation in the warfighter involvement process.
    This process allows the warfighter to establish priorities for
    equipment and capabilities, and MDA satisfies those priorities within
    budget and schedule constraints. The final program plan is adjudicated
    by the Missile Defense Executive Board where all stakeholders are
    represented. This process ensures that maximum capability is provided
    within resources available.

        35. Senator Ayotte. Admiral Syring, in response to increased
    threats in the Pacific region, DOD has relocated the test-bed TPY-2 in
    theater. Its unavailability will slow down refinements necessary to
    leverage the continuous flow of intelligence regarding evolutions in
    the missile threats observed. This makes permanent deployment of this
    asset uncertain, creating gaps in missile defense capabilities.
    Scarcity of assets further strains operations due to a lack of spare
    parts and production focus on addressing obsolescence. Would additional
    funding for the continuation of the THAAD system, including an
    additional TPY-2 radar, relieve COCOM strain on the current inventory
    of force protection assets?
        Admiral Syring. There are validated warfighter requirements for
    more THAAD batteries than are funded in the President's budget.
    Additional funding would help meet these warfighter requirements, but
    at the expense of other higher priority DOD requirements.
        The MDA supports the Joint Staff, the Services, and the combatant
    commanders through participation in the Warfighter Involvement Process.
    This process allows the warfighter to establish priorities for
    equipment and capabilities, and MDA satisfies those priorities within
    budget and schedule constraints. The final program plan is adjudicated
    by the Missile Defense Executive Board where all stakeholders are
    represented. This process ensures that maximum capability is provided
    within resources available.

                             PATRIOT MODERNIZATION

        36. Senator Ayotte. General Formica, in fiscal year 2013, the Army
    unsuccessfully attempted to reclaim $50.0 million from a total of
    $199.6 million in the Patriot modernization account for upgrades to the
    Radar Digital Processor (RDP). RDP upgrades make Patriot processors
    compatible to modern commercial off-the-shelf processors, driving down
    cost, increasing reliability, and creating space for needed software
    upgrades. This upgrade was part of a validated modernization plan. The
    fiscal year 2014 President's budget, $256.4 million for Patriot
    modernization, does not address the $50.0 million cut to RDP upgrades
    needed for the entire U.S. Patriot fleet. These upgrades are currently
    in production or being delivered to allied nations like the UAE and
    Saudi Arabia. COCOM demand for the Patriot system continues to
    increase, given the nature of threats to our forward deployed forces.
    Much needed upgrades to Patriot planned for fiscal year 2013, like the
    RDP, have been delayed. The Army has not yet offered a time or cost
    schedule to undertake these upgrades to meet demand. I understand COCOM
    demand for missile defense capabilities continues to grow. How have
    fiscal year 2013 cuts to the Patriot system impacted the Army's ability
    to deliver these capabilities?
        General Formica. The President's fiscal year 2014 budget (PB14)
    request does not address the fiscal year 2013 $50 million RDP cut or
    the $60 million Research, Development, Test, and Evaluation (RDT&E) cut
    because the timing of the fiscal year 2013 budget did not allow for
    changes to the PB14 request prior to submission. As a result of the
    fiscal year 2013 RDP cut and a new contractor cost estimate, we believe
    the cost to recover from the $50 million fiscal year 2013 RDP cut has
    grown to $94 million. Additionally, the Army will need to recover from
    the RDTE mark of $60 million, which affects software development
    required to defeat current threats while leveraging RDP and Missile
    Segment Enhancement (MSE) Missile capability. As a result of the fiscal
    year 2013 RDP mark, the Army anticipates a minimum 2 year slip in the
    delivery of 25 RDPs to the COCOMs. Whereas these RDPs would have been
    fielded in fiscal year 2015-2016, they will now be fielded no earlier
    than fiscal year 2017-2018, delaying availability of enhanced radar
    processing to the COCOMs. Similarly, as a result of the $60 million
    fiscal year 2013 RDT&E cut, associated software capabilities designed
    to leverage the RDP and the MSE missile will slip 1 to 3 years. The RDP
    and critical software upgrades delayed by the RDT&E cut are key
    enablers for Patriot, required to defeat proliferated threats, improve
    combat identification, and best capitalize on the increased capability
    of the MSE.

        37. Senator Ayotte. General Formica, what is the Army's timeline
    for undertaking modernization efforts for upgrades such as the RDP?
        General Formica. Patriot modernization is a critical effort that
    will be slowed significantly as a result of fiscal year 2013 cuts. The
    current Patriot modernization effort hinges on the RDP and associated
    RDT&E funded software upgrades. As a result of the fiscal year 2013 RDP
    cut, the Army anticipates a minimum 2-year slip in the delivery of 25
    RDPs to the COCOMs. Whereas these RDPs would have been fielded in
    fiscal year 2015-fiscal year 2016, they will now be fielded no earlier
    than fiscal year 2017-fiscal year 2018, delaying availability of
    enhanced radar processing to the COCOMs. Similarly, as a result of the
    $60 million fiscal year 2013 cut, many of the associated software
    capabilities designed to leverage the RDP and the MSE missile will slip
    1 to 3 years, fielding capability to the warfighter in fiscal year
    2017-2019 rather than in fiscal year 2016 as previously planned.

                       GUIDANCE ENHANCED MISSILE-TACTICAL

        38. Senator Ayotte. General Formica, the Army has announced plans
    to begin recertification of the Guidance Enhanced Missile-Tactical
    (GEM-T) but has not articulated whether their timeline will meet the
    fiscal year 2015 expiration date or whether operation and maintenance
    (O&M) accounts have sufficient funding to undertake this effort. In
    equipping our COCOMs with the best missile inventory possible and in
    the most efficient manner, the Army is to be applauded for undertaking
    GEM-T recertification. Does the Army anticipate achieving this
    recertification by the end of fiscal year 2015 and does it have the
    resources necessary to do so at this time?
        General Formica. The Army has not determined that Legacy Patriot
    [Patriot Advanced Capability (PAC)-2, Guidance Enhanced Missile (GEM),
    GEM Plus] missile recertification will be necessary to support the
    Total Army Munitions Requirement (TAMR). Raytheon recently concluded a
    service life extension study to determine the feasibility of a 15-year
    life extension. The Lower Tier Project Office has issued a memorandum
    stating the service life of Legacy Patriot missiles may be extended
    from 30 to 45 years for an additional cost. Currently, the Army is
    reviewing Raytheon's study. Once a decision has been made, the
    appropriate programming and budgeting actions will be executed.

     JOINT LAND ATTACK CRUISE MISSILE DEFENSE ELEVATED NETTED SENSOR SYSTEM

        39. Senator Ayotte. General Formica, the Army has announced plans
    to demonstrate one of two existing JLENS systems from Aberdeen Proving
    Ground, starting in late 2013 or early 2014, in support of the NORAD
    mission to defend the National Capital Region, monitoring land, air,
    and sea traffic from Norfolk to New York. DOD is expected to make a
    decision regarding procurement of this capability for COCOM deployment
    in fulfillment of validated requirements from NORTHCOM, SOUTHCOM,
    PACOM, and CENTCOM. In anticipation of the JLENS demonstration at
    Aberdeen Proving Ground, has the Army worked with the Under Secretary
    of Defense for Acquisition, Technology, and Logistics, and other
    Services, especially the Navy, to identify performance data to be
    captured in support of a future procurement decision criteria?
        General Formica. The Army is coordinating with NORAD/NORTHCOM and
    its subordinate Service components to provide a COCOM assessment of the
    JLENS capability. This assessment will inform the Department on the
    feasibility of an enduring mission for JLENS. The Army continues to
    work through the Joint Integrated Air and Missile Defense Organization
    on data needed to inform a future decision. The JLENS Exercise was
    concurred to by the JROC, in which the Navy participated. The Army has
    also conducted a successful test event with the Navy Desert Ship (Aegis
    Destroyer surrogate) to demonstrate the capability to execute a joint
    engagement.

        40. Senator Ayotte. General Formica, is the Army currently
    reviewing the feasibility of an OCONUS JLENS demonstration in support
    of COCOMs' demands?
        General Formica. The Army does not have a requirement to deploy the
    second orbit and is not conducting planning for deploying the second
    JLENS orbit to a location outside the continental United States at this
    time.

        [Whereupon, at 4 p.m., the subcommittee adjourned.]

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