[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


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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).
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       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).
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       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).
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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 [email protected]. 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, [email protected], (202) 
512-4400, U.S. Government Accountability Office, 441 G Street NW, Room 
7125, Washington, DC 20548

                             PUBLIC AFFAIRS

    Chuck Young, Managing Director, [email protected], (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.
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    \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).
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    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.
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    \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.
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    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.
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    \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).
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                               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.
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    \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.
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    \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\
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    \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.
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    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.
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    \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.
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   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.
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    \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.
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 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.
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    \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.
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    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.
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    \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.
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    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\
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    \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.
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    \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.
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         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.
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    \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.
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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.

                 GAO CONTACTS AND STAFF ACKNOWLEDGMENTS

    For questions about this statement, please contact Mark L. 
Goldstein, Director, Physical Infrastructure Issues, at (202) 512-2834 
or [email protected]. In addition, 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 Mike Clements, assistant Director; Stephen Brown; 
Jonathan Carver; Jennifer Echard; Emile Ettedgui; Colin Fallon; Bert 
Japikse; Elke Kolodinski; Joshua Ormond; Jay Tallon; and Elizabeth 
Wood.

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                        CONGRESSIONAL RELATIONS

    Katherine Siggerud, Managing Director, [email protected], (202) 
512-4400, U.S. Government Accountability Office, 441 G Street NW, Room 
7125, Washington, DC 20548

                             PUBLIC AFFAIRS

    Chuck Young, Managing Director, [email protected], (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.
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    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.
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    \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.
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    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.
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    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 [email protected]. 
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\
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    \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).
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    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.
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         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.
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         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.
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    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.
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    \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.
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    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 [email protected]. 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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