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

[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

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

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PART 7

STRATEGIC FORCES

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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

S. 1197

__________

PART 7

STRATEGIC FORCES

__________

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

__________

Printed for the use of the Committee on Armed Services

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

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COMMITTEE ON ARMED SERVICES

CARL LEVIN, Michigan, Chairman

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

Peter K. Levine, Staff Director

John A. Bonsell, Minority Staff Director

______

Subcommittee on Strategic Forces

MARK UDALL, Colorado, Chairman

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

(ii)
?

C O N T E N T S

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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

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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.
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\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).
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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).
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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.
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\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).
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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).
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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.
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\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).
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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\
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\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.
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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.
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\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.
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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:
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\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.
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\13\ GAO, Defense Acquisitions: Challenges in Aligning Space System
Components, GAO-10-55 (Washington, DC: Oct. 29, 2009).
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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.
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\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\
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\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).
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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.
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\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\
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\20\ H.R. Rep. No. 112-479, at 186 (2012); Pub. L. No 112-239
(2013).
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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).
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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.
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\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).
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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.
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\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.
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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).
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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\
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\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.
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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:
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\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.
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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.
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\30\ Pub. L. No. 112-239, Sec. 911 (2013).
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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.
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\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.
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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\
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\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).
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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.

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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.
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\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.
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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.
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\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.
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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\
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\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.
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Supply
In 2010, the President directed NTIA to work with FCC to make 500
MHz of spectrum available for use by commercial broadband services
within 10 years. This represents a significant increase in the supply
of spectrum available for licensing in the marketplace. As with all
economic goods, the price and value of licensed spectrum are expected
to fall as additional supply is introduced, all other things being
equal.
Demand
The expected, potential profitability of a spectrum license
influences the level of demand for it. Currently, the demand for
licensed spectrum is increasing and a primary driver of this increased
demand is the significant growth in commercial-wireless broadband
services, including third and fourth generation technologies that are
increasingly used for smart phones and tablet computers. Some of the
factors that would influence the demand for licensed spectrum are:

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

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CONGRESSIONAL RELATIONS

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PUBLIC AFFAIRS

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

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

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

Prepared Statement by Mr. Christopher Guttman-McCabe

INTRODUCTION

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

THE NEED FOR MORE SPECTRUM TO DRIVE ECONOMIC GROWTH

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

SHARING IS NOT THE LONG-TERM ANSWER

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

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

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

CONGRESS HAS PROVIDED PROTECTION FOR RELOCATING FEDERAL USERS

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

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

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

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

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

CONCLUSION

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

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

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

----------

TUESDAY, MAY 7, 2013

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

NATIONAL NUCLEAR SECURITY ADMINISTRATION MANAGEMENT OF ITS NATIONAL
SECURITY LABORATORIES

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

OPENING STATEMENT OF SENATOR MARK UDALL, CHAIRMAN

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

STATEMENT OF SENATOR DEB FISCHER

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

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

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

Prepared Statement by Dr. Charles F. McMillan

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

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

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

NUCLEAR INFRASTRUCTURE MODERNIZATION

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

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

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

LIFE EXTENSION PROGRAMS

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

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

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

WEAPONS DESIGNERS: LOOKING BACKWARD

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

CONCLUSION

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

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

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

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

Prepared Statement by Dr. Paul J. Hommert

INTRODUCTION

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

MAJOR POINTS OF THIS TESTIMONY

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

PERSPECTIVE OF THE NUCLEAR WEAPONS PROGRAM

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

MODERNIZATION ACTIVITIES

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

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

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

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

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

SUSTAINING THE CURRENT STOCKPILE

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

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

ADVANCING THE TOOLS OF STEWARDSHIP

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

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

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

SYNERGY BETWEEN OUR NUCLEAR WEAPONS MISSION AND BROADER NATIONAL
SECURITY WORK

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

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

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

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

GOVERNANCE

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

CONCLUSIONS

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

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

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

Prepared Statement by Dr. Penrose C. Albright

OPENING REMARKS

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

INVESTMENTS IN STOCKPILE STEWARDSHIP AND ACCOMPLISHMENTS

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

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

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

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

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

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

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

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

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

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

PROVIDING NATIONAL SECURITY IN THE GLOBAL CONTEXT

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

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

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

OVERSIGHT AND GOVERNANCE

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

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

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

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

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

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

CONCLUSION

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

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

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

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

Prepared Statement by Dr. Charles V. Shank

Thank you for the opportunity to testify before this subcommittee.
For about 2 years I have served as the co-chair of the National
Research Council Committee to review the quality of the management and
of the science and engineering research at the Department of Energy's
National Security Laboratories. Last year I was honored to appear
before this subcommittee to testify on the first report of that study
committee, which reviewed the management of the laboratories. A second
report dealing with the quality of science and engineering is currently
nearing completion and delivery to this committee. My testimony today,
however, represents my personal views which are not necessarily those
of the National Research Council (NRC) nor have they been reviewed by
the NRC.
The three National Nuclear Security Administration (NNSA) National
Security Laboratories--Los Alamos National Laboratory (LANL), Lawrence
Livermore National Laboratory (LLNL), and Sandia National Laboratories
(SNL)--are a major component of the U.S. Government's laboratory
complex and of the national science and technology base. These
laboratories are large, diverse, highly-respected institutions with
broad programs in basic sciences, applied sciences, technology
development and engineering; and they are home to world-class staffs
and facilities. Under a recent interagency agreement among the
Department of Energy, the Department of Defense, the Department of
Homeland Security, and the Intelligence Community, these laboratories
are evolving to serve the needs of the broad national security
community. Despite this broadening of substance and support, these
laboratories remain the unique locus of science and engineering (S&E)
for the U.S. nuclear weapons program, including, most significantly,
the science-based stockpile stewardship program and the S&E basis for
analyzing and understanding nuclear weapon developments of other
nations and non-state actors.
The National Research Council (NRC) was asked by Congress to assess
the quality of S&E and of the management of S&E at these three
laboratories. On February 15, 2012, the NRC released a report on the
quality of the S&E management. \1\ A second report--currently in
preparation--will address the quality of S&E. In order to conduct this
assessment of quality of S&E, the NRC assembled a committee of
distinguished scientists and engineers. Some members of this committee
also served on the committee that produced the management report, but
most did not.
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\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.
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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.
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\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.
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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.
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\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
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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.
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\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).
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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.
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\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).
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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.
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\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.
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\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).
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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:
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\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.
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\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.
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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.
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\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)).
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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.
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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.
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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.
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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.
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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.
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\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.
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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.
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\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\
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\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.
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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\
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\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.
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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\
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\12\ GAO-13-432.
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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.
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\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.
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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.
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\14\ GAO-13-432.
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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.
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\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.
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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.
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\17\ GAO-12-486.
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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.
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\18\ GAO-13-432.
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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.
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\19\ GAO-12-486.
\20\ GAO-13-432.
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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.
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\21\ GAO-11-372.
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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.
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\22\ GAO-11-372 and GAO, GAO Cost Estimating and Assessment Guide,
GAO-09-3SP (Washington, DC: March 2009).
\23\ GAO-13-432.
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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.
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\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.
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\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).
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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.
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\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.
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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.]