[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]
[H.A.S.C. No. 114-145]
OVERSIGHT REVIEW OF THE U.S. NAVY'S LITTORAL COMBAT SHIP PROGRAM
__________
HEARING
BEFORE THE
SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS
OF THE
COMMITTEE ON ARMED SERVICES
HOUSE OF REPRESENTATIVES
ONE HUNDRED FOURTEENTH CONGRESS
SECOND SESSION
__________
HEARING HELD
DECEMBER 8, 2016
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__________
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SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS
VICKY HARTZLER, Missouri, Chairwoman
JEFF MILLER, Florida JACKIE SPEIER, California
K. MICHAEL CONAWAY, Texas JIM COOPER, Tennessee
JOSEPH J. HECK, Nevada HENRY C. ``HANK'' JOHNSON, Jr.,
AUSTIN SCOTT, Georgia Georgia
MARTHA McSALLY, Arizona GWEN GRAHAM, Florida
Heath Bope, Professional Staff Member
Katy Quinn, Professional Staff Member
Anna Waterfield, Clerk
C O N T E N T S
----------
Page
STATEMENTS PRESENTED BY MEMBERS OF CONGRESS
Hartzler, Hon. Vicky, a Representative from Missouri, Chairwoman,
Subcommittee on Oversight and Investigations................... 1
Speier, Hon. Jackie, a Representative from California, Ranking
Member, Subcommittee on Oversight and Investigations........... 3
WITNESSES
Gilmore, Dr. J. Michael, Director, Operational Test and
Evaluation, Department of Defense.............................. 12
Mackin, Michele, Director, Acquisition and Sourcing Management,
Government Accountability Office............................... 9
O'Rourke, Ronald, Specialist in Naval Affairs, Congressional
Research Service............................................... 14
Rowden, VADM Thomas S., USN, Commander, Naval Surface Forces..... 10
Stackley, Hon. Sean J., Assistant Secretary of the Navy for
Research, Development, and Acquisition, Department of the Navy. 5
APPENDIX
Prepared Statements:
Gilmore, Dr. J. Michael...................................... 101
Hartzler, Hon. Vicky......................................... 45
Mackin, Michele.............................................. 74
O'Rourke, Ronald............................................. 133
Speier, Hon. Jackie.......................................... 47
Stackley, Hon. Sean J., joint with VADM Thomas S. Rowden..... 50
Documents Submitted for the Record:
Two charts displayed by Ms. Speier........................... 159
Witness Responses to Questions Asked During the Hearing:
Mr. Byrne.................................................... 163
Ms. Speier................................................... 163
Questions Submitted by Members Post Hearing:
Mrs. Hartzler................................................ 167
Ms. Speier................................................... 168
OVERSIGHT REVIEW OF THE U.S. NAVY'S LITTORAL COMBAT SHIP PROGRAM
----------
House of Representatives,
Committee on Armed Services,
Subcommittee on Oversight and Investigations,
Washington, DC, Thursday, December 8, 2016.
The subcommittee met, pursuant to call, at 9:05 a.m., in
room 2118, Rayburn House Office Building, Hon. Vicky Hartzler
(chairwoman of the subcommittee) presiding.
OPENING STATEMENT OF HON. VICKY HARTZLER, A REPRESENTATIVE FROM
MISSOURI, CHAIRWOMAN, SUBCOMMITTEE ON OVERSIGHT AND
INVESTIGATIONS
Mrs. Hartzler. Good morning. I would like to extend a warm
thank you to our witnesses testifying before us today and
welcome them to our subcommittee's last hearing event for the
114th Congress.
I thank the subcommittee members for your contributions and
dedication during this Congress. I wanted to especially express
gratitude to those members who are not going to be returning
next year.
Certainly, Representative Graham, you have been a wonderful
member on this committee and on Armed Services and just here in
Congress as well. I have enjoyed getting to know you and
appreciate your work, your dedication. Representative Graham
is--comes to the hearings. I don't think she missed hardly any,
so responsible and cares so deeply about the military, so we
are going to miss you, but thank you. Thank you.
And we also have subcommittee member Representative Heck
and Representative Miller who may be joining us, but we
appreciate their service as well.
So in connection with today's hearing, I welcome the
members also of the full committee who are not permanent
members of the subcommittee, who are or who will be attending.
And I ask unanimous consent that these committee members be
permitted to participate in this hearing, with the
understanding that all sitting subcommittee members will be
recognized for questions prior to those not assigned to the
subcommittee.
Without objection, so ordered.
So today, we take testimony of the littoral combat ship
[LCS] program. We seek to gain a deeper understanding of the
challenges that this program has presented us in the past and
the opportunities that exist as the program moves forward. We
need to grow the size of this Navy's surface fleet. The LCS
could have an important role in increasing our capabilities and
our flexibility. I know that there is a critical need to
replace our less capable and decommissioned mine countermeasure
ships, patrol craft, and all of our Hazard Perry-class
frigates.
I believe the littoral combat ship and the eventual upgrade
to the frigate design has great potential to fulfill the roles
for the platforms it replaces. This is why the LCS has garnered
bipartisan support in the Seapower Subcommittee. The concept of
the LCS and the decision to begin the program came at a time in
the Department of Defense's acquisition history in which senior
leaders of the Department thought it was necessary and possible
to disregard the natural evolution of technology by skipping a
generation of development. It was good theory but proved costly
and cumbersome to implement.
We have learned many lessons from this period. For example,
introducing immature technologies into acquisition programs
will lead to cost and schedule growth. Awarding contracts
without a stable design and directing prescriptive government
specifications also increases cost and schedule. It is only
with unleashing the power of best buying practices that we can
realize acquisition efficiencies. These lessons have been hard
learned in a multitude of acquisition contracts.
For example, stable government funding is essential to
providing material ordering and labor efficiencies.
Additionally, innovative multiyear procurements or block buys
save money because long-term agreements with subcontractors and
vendors provides contracting stability. Dangerous reductions
below minimum order quantities only serve to exacerbate our
industrial base and increase the cost of the taxpayer. That is
why the House has advocated adding a third LCS in fiscal year
2017, and has expressed reservations about the Navy's
acquisition strategy, which involves procuring one LCS frigate
every year during fiscal year 2018, 2019, and 2020.
I also want to discuss the Navy's force structure
requirements of 52 small surface combatants. The Navy's force
structure is based on their ability to meet combatant commander
requirements both in peace and in war. That is why I am
perplexed with Secretary Carter's determination that we only
need 40 LCS frigates. I believe the Secretary's decision lacks
analytical rigor. I am hoping that the next administration will
review this issue.
We must absolutely integrate the program's acquisition
lessons learned as we evaluate, with prudent scrutiny, the
opportunity to invest an additional $14 billion to complete the
purchase of LCS and transition its hull form into a frigate
design. We must also ensure that the mission modules which are
integral to the first LCS designs are successfully completed,
tested, and fielded at the lowest possible price.
So I look forward to discussing this program with our
distinguished panel of witnesses we have here before us. But
before I introduce the witnesses, I turn to the Oversight
Investigation Subcommittee ranking member for any opening
remarks that she would like to make.
[The prepared statement of Mrs. Hartzler can be found in
the Appendix on page 45.]
STATEMENT OF HON. JACKIE SPEIER, A REPRESENTATIVE FROM
CALIFORNIA, RANKING MEMBER, SUBCOMMITTEE ON OVERSIGHT AND
INVESTIGATIONS
Ms. Speier. Thank you, Madam Chair.
We are here today to examine a case study in gross
mismanagement on the part of the Navy. At virtually every
decision point--from conceiving the initial flawed concept, to
the concurrent acquisition process, to the huge cost overruns,
to the huge fundamental flaws in the ships themselves, and to
the feeble attempts by the Navy and DOD [Department of Defense]
to correct course--the Navy has wasted billions in taxpayer
dollars and failed to produce a ship that meets its objectives.
What we examine today is: Has the Navy learned its lesson,
have they corrected course, and are they moving forward with a
stable ship design based on a sound analytical foundation? From
the testimony of witnesses today, I fear the answer is a
resounding no.
I would especially like to know who certified that LCS
would cost $220 million each. We know it now costs more than
double per ship, at $478 million. Who briefed this to Congress,
and who signed off on this gross escalation in cost?
While cost overruns are by no means acceptable, perhaps
they can be explained if they resulted in a functional ship.
But the LCS isn't just outrageously expensive, it is also
outrageously bad at doing its job. In simple terms, it is a
dud.
Just look at how many issues six out of eight ships in
service have had, and I point to this chart, which you can see.
Every one of these six ships, and there have only been eight
that have been in the water, six out of the eight ships have
had serious problems in which the engines have flooded, the
couplings cracked, and the ships broke down in transit.
[The chart displayed can be found in the Appendix on page
159.]
Ms. Speier. Now, the USS Montgomery was commissioned in
September of this year, and it has already had two engine
failures and two collisions that resulted in major damage. What
is even worse is that because of the way the Navy structured
the contracts, taxpayers are still responsible for most of the
repair costs, even when the shipbuilders are at fault. These
contracts mean that, in some cases, the shipbuilders aren't
responsible for even one cent of potential defects.
In other words, you take delivery of an LCS, it immediately
breaks down, and there is no warranty, there is no lemon law.
So there is no compunction on the part of the shipbuilder to
make sure that this product is indeed worthy to be afloat,
because if it breaks down, it is the taxpayers that will pick
up the tab. Why is it that the Coast Guard can hold its
shipbuilders responsible for defects, but the Navy puts the
burden on the taxpayers?
If that is not enough, there is more bad news. The
Secretary of Defense has admitted that continuing to produce
two versions of the ship makes no sense, and he has ordered a
down-select. The Navy has admitted that its transformative
interchangeable mission module will likely never be
interchanged as originally envisioned. The Navy has also
admitted that its transformative crewing concept won't work and
has essentially scrapped it.
Look at how much the program has changed from the Navy's
early pie-in-the-sky promises. Cost overruns, delayed schedule,
design changes, cannot survive combat. In part, the reason why
we are changing the name of LCS is because the word ``combat''
is in its name and we now know it is not survivable in a combat
setting. Poor mission capabilities.
[The chart displayed can be found in the Appendix on page
160.]
Ms. Speier. Now, in all of the Navy's wisdom, they have
decided to change the name of the LCS to a frigate, and plan to
purchase more of what is essentially still an LCS but whose
modifications are unproven, lack critical capabilities, and
can't pass original survivability tests. Why? Because they have
determined it will meet their multi-mission requirements. Yet
once again, we don't have a ship design, we don't know what it
will cost, or whether the ship can survive in combat. Instead,
as I have joked many times, we have a ship that even the
Chinese don't want to copy.
You would think all this uncertainty would prompt calls for
a pause to get the LCS conceptual house in order before the
Navy does a binge buy for more. But if you think that, you
don't know the LCS program. Instead, in an act of astonishing
arrogance and disregard of taxpayers' money, reports indicate
that the Department of Navy is gearing up to ask Congress for a
block buy of 12 of these ships. This would give us all
leverage--this would give us all our leverage away with a
contractor to ensure the ships are tested and fixed.
What are they thinking? Does anyone honestly believe that
the taxpayers, the Tea Party, or President-elect Donald Trump
would approve this buy if they were in charge of doing so?
From the beginning, the Navy has regularly submitted LCS
budget requests that are not consistent with shipbuilding
programs, making it nearly impossible for Congress to exercise
oversight. It did this in 2003 when it funded the first ships
with research and development funding and in 2010 when it
wanted to switch to a plan of buying two parallel LCS designs
inside of a 20-ship block buy.
When issues continued to occur throughout construction and
fielding, the block buy was always cited as the reason why
Congress shouldn't slow the program down. Yet again, as the
Navy moves towards a different design that they claim will
address many of the LCS shortcomings, they are looking for a
block buy authority before the design is even completed. This
is a strategy that even the shipyards criticized, since it
doesn't give them time to complete the frigate design before
beginning construction. The single greatest contributor to cost
inflation on the LCS was an incomplete design when construction
began. The Navy still hasn't learned their lesson.
I am glad that the Navy has acknowledged reality and
changed some of its operational concepts, but in many respects,
I am concerned they are still hiding the ball. The next time
LCS flaws become apparent, it could be in the heat of battle
and, frankly, get our sailors killed.
Furthermore, if the Navy's plan for a block buy moves
forward, Congress and the Navy's hands will be tied. I realize
what this is really about. We know the LCS is the Ford Edsel of
the sea, and yet certain of my colleagues say we can't afford
to pause production and get it right because of, quote,
``industrial base concerns,'' unquote, even though, and I want
to emphasize this, even though the shipyards will be building
the existing buy until 2021 even if we canceled funding for the
program today.
Let's be real. This is about getting pork back to their
districts. The LCS is a $120 billion pork ship, and they are
putting pork barrel politics above the safety of our service
members.
The Navy has shown a callous disregard for the taxpayer,
and frankly, the Congress has been derelict in doing its job.
We think no one will notice. We think our obligation is to the
shipbuilders to keep building a defective ship just because we
want to retain jobs.
Today, we need the guts to say that the LCS was a mistake.
To protect the United States interests and to do what is best
for our service men and women, we need a ship that is capable
of fulfilling its intended mission. The taxpayers deserve to
know if what they are paying for is actually effective. That is
why Congress needs to find out if the most recent changes will
really make the LCS better or if we are just trying to make a
silk purse out of a sow's ear.
I look forward to your insights and about how we got here
and how we should go forward and who is to blame.
And with that, I yield back.
[The prepared statement of Ms. Speier can be found in the
Appendix on page 47.]
Mrs. Hartzler. Thank you.
I am pleased today to recognize our witnesses. I want to
thank them for taking the time to be with us. We have the
Honorable Sean Stackley, Assistant Secretary of the Navy for
Research, Development, and Acquisition. We have Dr. J. Michael
Gilmore, director of tests--Operational Test and Evaluation for
the Department of Defense. We have Vice Admiral Thomas Rowden,
commander of the Naval Surface Forces for the United States
Navy. We have Ms. Michele Mackin, director of Acquisition and
Sourcing Management for the Government Accountability Office;
and Mr. Ron O'Rourke, specialist in naval affairs at the
Congressional Research Service.
So thank you all for being here today. Really, really
appreciate it, and we look forward to hearing your comments.
And now we turn to Mr. Stackley.
STATEMENT OF HON. SEAN J. STACKLEY, ASSISTANT SECRETARY OF THE
NAVY FOR RESEARCH, DEVELOPMENT, AND ACQUISITION, DEPARTMENT OF
THE NAVY
Secretary Stackley. Chairwoman Hartzler, Ranking Member
Speier, members of the subcommittee, thank you for the
opportunity to appear before you today to address the littoral
combat ship program. With your permission, I would like to make
a brief opening statement and have my full testimony entered
into the record.
Mrs. Hartzler. Without objection.
Secretary Stackley. The littoral combat ship, or LCS, is
designed to fill critical warfighting gaps in anti-surface,
anti-submarine, and mine countermeasures warfare mission areas.
And as a replacement for three legacy small surface combatant
ships, she is about one-third the size of a DDG-51-class
destroyer, is designed to perform missions the DDG [guided-
missile destroyer] is not equipped to do or that could
otherwise be better performed, at least well performed by a
small surface combatant, and thus freeing the destroyer for
missions tailored for its higher end capabilities.
LCS's reduced size results in greatly reduced procurement
and operating and support cost. In fact, the procurement unit
cost for LCS is about one-third of that of a DDG-51, and
likewise, the manpower requirements for the ship.
The LCS hull is designed and built to provide the ship with
its high-speed, mobility, damage control, survivability,
aviation, and combat systems, including its 57-millimeter gun,
surface-to-air missiles, and an over-the-horizon missile that
the Navy is currently adding for offensive firepower against
long-range threats.
In addition to this core capability, the ship carries
modular mission packages tailored for the mission's planned
deployments. The surface warfare mission package adds 30-
millimeter guns, an armed helicopter, an unmanned aerial
vehicle for extended surveillance, and surface-to-surface
missiles. The anti-submarine warfare, ASW, mission package adds
a variable depth sonar that operates in tandem with a
multifunction towed array, an ASW helicopter with dipping sonar
sonobuoys and airdrop torpedoes and a towed decoy.
The mine countermeasure mission package has air unmanned
surface and unmanned underwater vehicles with associated
sensors and systems to detect and neutralize mines.
And there are four cornerstones of the program I would like
to briefly summarize. First, the shipbuilding program. As the
committee is well aware, the LCS program was initiated with
unrealistic cost and schedule estimates and with highly
incomplete design, resulting in extraordinary budget overruns
and schedule growth. The program was subsequently restructured
in 2009. Production was placed on hold pending the insertion of
production readiness reviews to verify design quality and
completeness; authorization to approve design and requirements
changes was raised to the four-star level, specifically the CNO
[Chief of Naval Operations] and myself; Navy oversight of the
shipyards was greatly increased; the acquisition strategy was
restructured to compete long-term contracts under fixed-price
terms and conditions. And in response to this strategy,
industry made significant investments in terms of skilled labor
and facilities to improve productivity and quality.
As a result, cost, schedule, and quality have greatly
improved such that current ships under construction are
delivering at less than half the constant year dollar cost of
the lead ships. Performance has stayed reliably within the
budget throughout this time, and the quality of each ship has
successively improved, as measured by the Navy's Board of
Inspection and Survey. Bottom line, the block buy strategy
approved by Congress in 2010 has delivered on its promise. LCS
construction is stable, and performance continues to improve on
a healthy learning curve.
Second, mission packages. The program's acquisition
strategy is that we will incrementally introduce weapons
systems as a part of a mission package when they are mature and
ready for deployment. The strategy provides tremendous
flexibility, affordability, and speed for introducing new
capabilities to the ship when those capabilities are ready to
deploy.
Consistent with this approach, the LCS has been highly
successful integrating mature weapons systems. The MH-60
helicopter, the Fire Scout unmanned aerial vehicle, the 11-
meter rigid hull inflatable boat, the Mark 50 30-millimeter gun
system, and most recently, the Harpoon Block II over-the-
horizon missile, the Airborne Laser Mine Detection System, the
Airborne Mine Neutralization System, and we are currently
integrating the Hellfire Longbow missile in support of testing
in 2017.
As a result, we have successfully fielded the first
increments of the surface warfare mission package. They are
deployed today and are on track to complete the next increment
in 2018.
The next mission package we will field is the anti-
submarine warfare, or ASW, mission package. The performance of
this system, as demonstrated by its prototype in 2014, greatly
exceeds that of any other ASW sensor system afloat. And we are
currently in the process of awarding the contract to build the
developmental model, which will be put to sea for shipboard
testing on LCS in 2018.
These mission packages are late to their original schedules
in part due to technical challenges and in part due to budget
challenges. They do, however, demonstrate the benefit provided
by the LCS modular design. And as the Navy develops or acquires
new systems appropriate to the LCS mission, we will leverage
the ship's design and flow these new weapons to the ship in
rapid fashion once they are mature.
We have run headlong, however, into challenges with
developing those capabilities that are central to filling one
of the critical shortfalls in terms of warfighting, and that is
the mine countermeasures, or MCM, mission package.
The Navy's requirements for the LCS MCM mission package are
to locate, identify, and clear mines at a rate that
significantly exceeds our current capability and to do so
without putting the ship or the crew into the minefield.
The MCM mission package airborne capability and MH-60
helicopter carrying the Airborne Laser Mine Detection System
and the Airborne Mine Neutralization System has completed
testing and is ready to deploy. Additionally, an unmanned
aerial vehicle carrying a sensor capable of detecting mines
close to shore is on track to complete testing in 2017.
The workhorse of the mission package is the high-endurance
unmanned vehicle that tows a sonar for mine detection. The Navy
is satisfied with the performance of the towed sonar system and
its ability to detect mines, but we are halting development of
the unmanned vehicle--we refer to it as the Remote Multi-
Mission Vehicle [RMMV]--due to poor reliability. And we are
revising the MCM mission package to employ an alternative
unmanned surface vessel, specifically one that is currently
being built to tow the minesweeping system to likewise tow the
mine detection system.
Testing with this vehicle is to commence in 2019. This puts
the MCM mission package back to 2021 timeframe, a significant
delay to that capability. The likely long-term solution will be
to eliminate the tow vehicle altogether and operate with an
unmanned underwater vehicle with an embedded sonar when
technology can support it.
The third cornerstone is performance of in-service ships.
In total, LCS material readiness, as reflected in operational
availability and casualty report metrics, is consistent with
other combatant ship classes and meets the Navy's threshold
requirements. However, I would like to address five engineering
casualties of concern that have occurred over the past year.
The Navy has conducted formal engineering reviews and command
investigations to assess the root causes, and corrective action
for each of these casualties are in action.
One was design related. A deficiency with a new propulsion
gear on the Freedom variant resulted in the gear's clutch
failure. The shipbuilder has been responsive with the
manufacturer to correct the design, and we are currently
testing this correction. The shipbuilder and manufacturer are
being held accountable for these corrective actions.
Two of the five engineering casualties were due to Navy
crews departing from established operating procedures. The type
commander, Vice Admiral Rowden, has taken appropriate
corrective action, including revising the LCS training program
and conducting an engineering standdown for all LCS class crews
to review, evaluate, and renew their commitment to safe ship
operation and good engineering practices.
The remaining two engineering casualties trace to
deficiencies in ship construction and repair procedures. One
involves the waterborne alignment of the propulsion train,
which is being addressed by the Naval Sea Systems Command with
industry, equipment manufacturers, shipbuilders, and ship
repair yards.
The second involves contamination of a hydraulic system on
a newly delivered ship, requiring the ship to reflush the
system and the shipyard to make corrections to its flushing
procedures. This was corrected under warranty provisions by the
shipbuilder in accordance with the contract.
Across the board, we are raising the level of engineering
and design discipline on this new ship class to that of zero
tolerance for departure from standards. In this vein, the Naval
Sea Systems Command has initiated a comprehensive engineering
review of LCS propulsion systems and will make their findings
available to the subcommittee upon their completion.
The fourth cornerstone is transition to the frigate.
Following an intense period reviewing alternative designs,
which was ultimately approved by the Secretary of Defense, we
are proceeding with modifications to the design of the LCS to
incorporate the combined features of the LCS core capabilities,
surface warfare mission package, anti-submarine warfare mission
package, plus enhancements to the ship's combat systems and
survivability features.
Industry is currently working on this new design, which
trades the modularity of the LCS for a highly capable multi-
mission frigate, and is on track to award in late 2018. The
estimated cost for the 12 frigates outlined in the Navy's
budget and report to Congress is approximately $8.1 billion.
I want to make clear to the subcommittee that unlike the
experience at the outset of the LCS program, we will not
proceed with frigate construction before design is complete and
of high quality and that cost estimates are validated. And to
enable this committee to conduct its new oversight, we will
provide your staff with full insight to our design review
process, products, and criteria.
Madam Chairwoman, thank you for the opportunity to discuss
this important program, and I look forward to answering your
questions.
[The joint prepared statement of Secretary Stackley and
Admiral Rowden can be found in the Appendix on page 50.]
Mrs. Hartzler. Thank you.
Ms. Mackin.
STATEMENT OF MICHELE MACKIN, DIRECTOR, ACQUISITION AND SOURCING
MANAGEMENT, GOVERNMENT ACCOUNTABILITY OFFICE
Ms. Mackin. Thank you, Madam Chairwoman.
Good morning, Ranking Member Speier and members of the
subcommittee and committee. Thank you for having me here today
to discuss the littoral combat ship and frigate programs.
We have been reporting to Congress on LCS for over 10 years
now. Our concerns have been and continue to be the Navy's
decisions to prioritize seaframe and mission package
procurements ahead of needed testing.
Testing is critical to ensure that expected capabilities
and operational concepts can be proven out. Over the past few
years, we have recommended the LCS program be halted or slowed
down while important knowledge was gained through testing. But
DOD has generally not taken any actions that would impact the
production piece of the program, even in light of some serious
concerns. Instead, it has warned that the prices under the two
LCS block buy contracts would increase if the program were
disrupted.
Almost 3 years ago, the Secretary of Defense directed the
Navy to assess options for its small surface combatant that
would be more survivable and have more combat capability than
the LCS. The resulting study found that a minor modified LCS,
which is now the frigate program, was the least capable option
considered. Nevertheless, that option was ultimately chosen. In
addition to affordability, which was a very important
consideration, a key factor was the determination not to have a
gap in production at the two LCS shipyards.
We all know that the initial promises of LCS have not come
to fruition in terms of cost, schedule, or capabilities. As the
Navy pivots now from the LCS to the frigate, there are key
questions yet to be answered.
First, what will the frigate cost? This is unknown. A rough
estimate is about $9 billion for 12 ships, but the Navy won't
develop a more robust estimate until the middle of next year,
and not until fiscal year 2018 will DOD prepare an independent
cost assessment--cost estimate. Independent cost estimates are
very important because they provide an unbiased assessment as
to whether the program's cost estimate is reasonable.
Second, what will the frigate design look like? This is
also unknown. While the frigate design will be based on the
same LCS seaframes we have today, those seaframes have
significant weight issues that will need to be addressed, among
other considerations.
The Navy plans to award a frigate contract to one of the
shipyards in 2018 and start construction as early as 2019, but
specific contractor design proposals won't be received until a
year from now. Until the detailed design is understood, exactly
what the Navy is buying isn't known.
I want to stop here and address the industrial base issue.
Our work has shown that both LCS shipyards are running quite a
bit behind in delivering the ships already under contract.
Backlogs are many months long and up to a year or more in some
cases. So the bottom line here is that both shipyards will be
building LCSes for years to come, at least into 2021 at this
point. So there is no schedule imperative to add frigates to
the pipeline right now.
And finally, what is Congress being asked to do? With its
fiscal year 2018 budget request, the Navy plans to ask Congress
to approve a 12-ship frigate block buy strategy and also to
approve procurement of the lead ship based only on a rough cost
estimate. From a contracting standpoint, the initial block buy
prices will be for 12 LCS, that is 12 regular LCS. If past is
prologue, the Navy might get great pricing for those ships, but
only later will the price of adding the frigate capabilities be
known.
At that point, under a block buy contract, there is a risk
that the program will be considered locked in, as has been the
case with LCS, and any inclination to make needed changes may
be foregone.
There is an opportunity here to not repeat the mistakes of
the past. Continued concerns about the capabilities of LCS,
testing that is years away from being completed, unknowns about
the frigate, and the production backlog at the shipyards are
all factors that need to be taken into account. This
potentially $9 billion investment can wait until more is known
about what the taxpayers are being asked to fund. Thank you.
[The prepared statement of Ms. Mackin can be found in the
Appendix on page 74.]
Mrs. Hartzler. Thank you.
Admiral Rowden.
STATEMENT OF VADM THOMAS S. ROWDEN, USN, COMMANDER, NAVAL
SURFACE FORCES
Admiral Rowden. Good morning, Chairwoman Hartzler, Ranking
Member Speier, distinguished members of the subcommittee. I am
honored for the opportunity to testify about the littoral
combat ship.
As the commander of our Naval Surface Forces, I am
responsible for leading the 58,000 sailors that man and support
our surface ships, and I am responsible for manning, training,
and equipping those same ships. To execute these
responsibilities, I rely on a staff of dedicated officers,
enlisted, and civilian professionals. I rely on the experience
I have gained over my 34 years of service to our Nation. I rely
on almost 14 years to over 40 percent of my professional life
serving on ships at sea, ships that range from our Coast Guard
cutters all the way to tours on our aircraft carriers. I rely
on the experiences I have operating on every ocean and sea from
the Gulf of Guinea to the Sea of Japan. I rely on experiences I
have gained through port calls in 52 different cities in 36
different countries around the world.
When it comes to driving, fighting, and steaming our ships,
I have experienced firsthand what our Nation can produce, both
in terms of sailors with magnificent talent, determination,
professionalism, and sheer grit, and in terms of the superb
technical capability our phenomenal military industrial complex
can produce. Time and again, in real-world situations I have
seen our talent, training, tools, and tactics come together to
produce a maritime fighting force that, on the whole, is
significantly greater than the sum of its parts.
Time and again, the value of our Navy to our Nation
manifests itself through engagement and through partnership
building on a gray ship with a white number and Old Glory
flying atop the mast, tied to the pier or at anchor in the
harbor. I have experienced the palpable sense of relief when by
our very presence the level of angst in a potentially volatile
situation is erased.
To execute our missions, we rely on our ships and aircraft
and the sailors who man them. The ships and aircraft are the
tools we use. Our sailors round out our fleet's capability by
providing the talent, the training, and tactics we need to win
and win decisively.
One of the tools we have coming online is the littoral
combat ship. So far, eight of these tools have been delivered.
Many more are on the way, and to be quite honest, I cannot wait
to have them in the fleet and cannot get them there fast
enough. This tool, this ship will be--will soon be deployed in
numbers to our forward fleet commanders and will provide them
with a highly valued and absolutely necessary capability. For
in addition to the anti-mine, anti-submarine, and anti-ship
capabilities it will carry, it brings the ability to enter
ports we have rarely or never been able to visit because of
draft limitations. It brings the ability to build partnerships
and partnership capacity that we have been able to--that we
have only been able to execute in very limited ways. In the
day-to-day shaping and stabilizing operations our Navy executes
daily, these ships will be invaluable and are needed right now.
Beyond the shaping and stabilizing operations that dominate
our operations today, I see a vital role for our littoral
combat ships should our adversaries take an aggressive stand
towards our maritime forces. And this is where the talent,
tactics, and training really come into play.
We understand well the requirements these ships are built
to, and we understand the testing and evaluation has proven
they are built to the approved requirement. In short, we
understand the tool. We understand the ship. We also understand
well our talent, tactics, and our training. We can and must
take all of these into account when planning for combat
operations. As such, we will employ all of our ships and our
talent, training, and tactics to maximize their value to the
combatant commander while continually assessing the risk to the
force.
All risk can never be eliminated, not to our littoral
combat ships or any other ship in the inventory, for that
matter. However, in planning for any mission, we are constantly
evaluating our ability to achieve the objective while limiting
the risk to the fleet. In other words, we will never lean into
a punch if it can be avoided.
While all this is well and good, there have been challenges
in fielding these ships, which is why earlier this year I was
tasked to lead, along with Vice Admiral Dave Johnson, the
principal military assistant to Secretary Stackley, and Mr.
Brian Persons from the CNO staff, a review of the LCS program
and to come up with recommendations on how to address and
overcome the challenges to providing robust operational
capability for our littoral combat ships.
In truth, I was thrilled with the opportunity. Our team
looked at the ships and their challenges through three lenses,
these lenses being simplicity, stability, and ownership. We
looked at all aspects of LCS through these three lenses and
came up with what I know to be reasonable, prudent, and
appropriate recommendations to start to accelerate the value of
these ships to the forward fleet commanders. We are moving out
on these recommendations, and I am already seeing the benefits
of our new approach on the waterfront. And we will continue to
evaluate, assess, and adjust as we move forward.
Beyond this, we have already deployed twice and are in the
leading edge of a third LCS deployment. In addition to learning
a heck of a lot about how to support these ships forward, I
believe the facts speak for themselves: Over 500 days at sea;
helicopter landing qualifications with eight nations; boarding
operations with seven nations; fleet operations with diverse
ships ranging from aircraft carriers down to coastal patrol
ships; special operations force operations with the Republic of
Korea; humanitarian assistance and disaster response during
Typhoon Haiyan, relief operations in the Philippines, and the
search for AirAsia Flight 8501 in the Java Sea; regional
partners who welcome and want LCS with a high demand signal,
having visited 15 cities in 8 countries around the Western
Pacific.
There is still much work to be done to fully unlock the
significant potential of these ships. I am 100 percent
confident that with the talent, training, and tactics our U.S.
Navy sailors possess, the promise of our littoral combat ships
will be fully realized, and I look forward to being part of
this valuable effort.
Thank you very much, ma'am, and I look forward to your
questions.
[The joint prepared statement of Admiral Rowden and
Secretary Stackley can be found in the Appendix on page 50.]
Mrs. Hartzler. Thank you.
Dr. Gilmore.
STATEMENT OF DR. J. MICHAEL GILMORE, DIRECTOR, OPERATIONAL TEST
AND EVALUATION, DEPARTMENT OF DEFENSE
Dr. Gilmore. Chairwoman Hartzler, Ranking Member Speier,
members of the committee and subcommittee, I will try to
briefly summarize my written testimony.
The Increment 2 surface warfare mission package is the only
fielded system on LCS seaframes, and it has demonstrated a
modest ability to aid the ship in defending itself against
small swarms of fast inshore attack craft, though not against
threat-representative numbers and tactics, and the ability to
support maritime security operations such as launching and
recovering boats and conducting pirate interdiction operations.
When the Hellfire missile is fielded in the next increment, the
surface warfare package capability has the potential to improve
significantly, provided targeting and other challenges can be
surmounted.
In a June 2016 report, based on this testing conducted
before 2016, I concluded that an LCS employing the current mine
countermeasures package would not be operationally effective or
suitable if called upon to conduct mine countermeasure
missions. The testing that was done demonstrates the LCS mine
countermeasure mission package did not achieve the sustained
area mine clearance rate of the Navy's legacy systems, nor can
the package be used even under ideal benign conditions to meet
the Navy's reduced Increment 1 mine countermeasures
requirements for mine area clearance rate, achieving, at best,
one-half those requirements, which are a fraction of the Navy's
full requirements. And by the way, my assessment is the same as
the Navy's commander of operational test force.
The ships as well as many of the mine countermeasure
systems are not reliable, and all the MCM systems, not just the
Remote Minehunting System and the Remote Multi-Mission Vehicle,
had significant shortfalls or limitations in performance. For
example, limitations in the Airborne Mine Neutralization System
depth for neutralizing mines means that it cannot be used to
neutralize the majority of the mines in the Navy's own
scenarios.
Based on those results, after more than 15 years of
development, the Navy decided this past year to cancel the
Remote Minehunting System, which is a hard decision for the
Navy, halted further procurement of the Remote Multi-Mission
Vehicle, abandoned plans to conduct operational testing of
individual MCM mission package increments, and delayed the
start of full integrated LCS mine countermeasure mission
package operational testing until at least fiscal year 2020.
As the Navy attempts to fill capability gaps and correct
the shortfalls in performance of these canceled and
restructured elements of the mine countermeasures package, it
is likely operational testing of either LCS variant equipped
with the final fully capable mine countermeasures, MCM, package
will not be completed until at least 2023, more than a decade
after the schedule set in the Navy's original requirements.
All of the LCSes have suffered from significant repeated
reliability problems with both seaframe and mission package
equipment. No matter what mission equipment is loaded on either
of the LCS variants, the low reliability and availability of
seaframe components, coupled with the small crew size, imposed
significant constraints on mission capability.
When averaged over time, LCS 4, which was used in the
testing last year, was fully mission-capable for surface
warfare missions just 24 percent of the 2015 test period. Both
variants fall substantially short of the Navy's reliability
requirements, and have a near-zero chance of completing a 30-
day mission, the Navy's requirement, without a critical failure
of one or more seaframe subsystems essential for wartime
operations.
The Navy's most recent reliability reports show upward
trends for a few LCS systems, so that is good news, but the
majority of the ship's systems demonstrate flat or declining
reliability well below the Navy's objectives, and that is the
Navy's data.
It was only through testing of the full mission packages at
sea and aboard the ship with sailors from the fleet that the
significant problems and shortfalls I have described, both in
system performance and sailor training, were clearly revealed.
In fact, the Navy's independent mine countermeasures review
team emphasized that a reliance on unrealistic, segmented,
shore-based testing, quote, ``provided a false sense of
maturity,'' unquote.
As in all operational testing, we interacted extensively
with the ships' sailors and surveyed them to capture their
views of the ships' capabilities. These sailors are proud of
their ships and determined to make the best use of them. The
sailors are also straightforward in identifying the many
problems they have encountered. We--I have a long list of the
comments from the surveys that were done during the testing,
and I am going to read just a couple, but there is a long list
that are consistent with these, so I am not just cherry-
picking.
``Well, 130 duty days to complete technical evaluation,
which should have only taken 45 days. That should tell you
something about the reliability of the RMMVs.''
``The tasking would be easier to complete if the equipment
didn't constantly break.''
``As equipment breaks, we are required to fix it without
any training.''
Those are not my words. Those are the words of the sailors
who were doing the best they could to try and accomplish the
missions we gave them in the testing.
So to provide the sailors with what they need to accomplish
their missions, it is my hope that the Navy will be provided
the resources, meaning the time and money it needs to fix these
problems, which we should acknowledge, because if we don't
acknowledge them, we can't fix them. And the Congress,
obviously, has a key role to play in providing those resources.
Thank you very much.
[The prepared statement of Dr. Gilmore can be found in the
Appendix on page 101.]
Mrs. Hartzler. Thank you, Dr. Gilmore.
Mr. O'Rourke.
STATEMENT OF RONALD O'ROURKE, SPECIALIST IN NAVAL AFFAIRS,
CONGRESSIONAL RESEARCH SERVICE
Mr. O'Rourke. Chairwoman Hartzler, Ranking Member Speier,
distinguished members of the subcommittee, thank you for the
opportunity to appear before you today to discuss oversight
issues relating to the LCS program. With your permission, I
would like to submit my written statement for the record and
summarize it here briefly.
Mrs. Hartzler. Without objection.
Mr. O'Rourke. I have been tracking the LCS program since
its inception 15 years ago. In my 32 years as a naval issues
analyst for CRS, no program has been more complex to track or
has posed more potential oversight issues for Congress than
this program. The LCS program is at a crossroads not only
because of the Navy's proposal to shift to production of the
frigate variant, but also because of three additional factors.
These are the rapidly shifting international security
environment, the possibility that the incoming Trump
administration might make significant changes in U.S. foreign
and security policy, and the Trump campaign organization's
announced objective of building the Navy toward a goal of 350
ships.
A key oversight issue for the Navy's proposal for procuring
the frigate variant concerns its analytical foundation as a
result of how the program was restructured twice in less than 2
years at the direction of two Secretaries of Defense. The
Navy's proposal for procuring the frigate variant of the LCS
appears to have three potential weaknesses in its analytical
foundation. These potential weaknesses are now compounded by
the shifting international security environment and the
possibility that the incoming Trump administration might make
significant changes in U.S. foreign and security policy.
This situation doesn't prove that the Navy's proposal for
procuring the frigate variant of the LCS isn't the most cost-
effective approach for meeting the Navy's future needs. It
might very well be the most cost-effective approach. But as a
result of this situation, the Navy now has less of a basis for
being certain of that and less ability to demonstrate this
compellingly to others.
This situation also, however, creates a fresh opportunity
for the Navy to create a new analytical foundation for the
effort that is both rigorous and fully up to date. Doing that
would take some time, but it wouldn't prevent some variant of
the LCS from being procured in fiscal year 2017 or 2018.
Another oversight question concerns the plan to total
quantity of 40 ships. This is 12 less than the 52 small surface
combatants called for in the Navy's current 308-ship force
structure objective, and the 52 number itself could change
again as a result of a decision to build the Navy toward a
fleet of about 350 ships.
Building up to a force of 52 or more small surface
combatants over the next several years could involve increasing
the small surface combatant procurement rate to 3 or 4 ships
per year. In terms of industrial base capacity, it might be
easier to execute such a procurement rate with two LCS builders
rather than one. If the ships are acquired with annual
contracting, then depending on the annual procurement rate,
maintaining two LCS builders might enhance the Navy's ability
to use competition effectively in procurement of these ships.
Another oversight question concerns whether to use annual
contracting or block buy contracting for procuring the frigate
variant. Annual contracting preserves flexibility for Congress
regarding whether and when to procure follow-on units in an
ongoing procurement program, while multiyear contracting in the
form of block buy contracting or multiyear procurement reduces
that flexibility in return for reducing the cost of the units
being procured.
My written statement discusses some of the considerations
that come into play in considering annual versus block buy
contracting. My statement also discusses two other oversight
issues, the survivability of the frigate variant and the mine
countermeasures module. It then presents some potential
oversight questions for Congress relating to two additional
oversight matters, the recent propulsion equipment casualties
and the Navy's new plan for crewing and operating the ships.
Now that we are 15 years into the program and with the
Navy's proposal to shift to procurement of the frigate variant
now being considered, there is a question about the acquisition
lessons learned from the LCS program. My written statement
concludes with some comments on that question, particularly in
terms of the rapid acquisition strategy that the Navy
originally pursued for the LCS program which aimed at reducing
acquisition cycle time.
Chairwoman Hartzler, this concludes my statement. Thank you
again for the opportunity to testify, and I will be pleased to
respond to any questions the subcommittee may have.
[The prepared statement of Mr. O'Rourke can be found in the
Appendix on page 133.]
Mrs. Hartzler. Thank you very much. Very good comments. I
think very clearly laid out some of the challenges and the
opportunities. I would like to start with Admiral Rowden.
What specific combatant commanders' requirements have
changed over the past 10 years that necessitates converting the
LCS platform into a more capable and survivable frigate?
Admiral Rowden. The requirement for the littoral combat
ships and the frigates, the 52 number, is a number that
provides them with the capability to address not only the day-
to-day operations that we are executing during the shaping and
stabilizing operations that we are executing now, but also as
we transition to the high end.
Clearly, as we look at--reflect on the last 10 years and we
see a potential adversary's growing numbers of ships and
aircraft and submarines that are being fielded, in order to be
able to address those threats, those potential threats, we need
a Navy that can do that. And they--and the littoral combat
ships and the frigates with either the ASW package installed or
the ASUW [anti-surface warfare] package installed, and the
frigates with both of those capabilities installed will
certainly give capability to the combatant commanders that they
need as they look at the ever-changing threat and to be able to
address that.
Mrs. Hartzler. So you would say that the need to change to
the frigate is because of the threats and the increased
capabilities that the frigate would have over the LCS? Because
that was what the question was. Why--what are the changes that
would necessitate moving to a frigate from an LCS?
Admiral Rowden. Yes, ma'am. Given the wider range of
operations that the frigate will be able to execute against the
growing threat, that certainly would drive us towards building
the frigate over the littoral combat ship.
Mrs. Hartzler. So bottom line is because they have more
mission capability.
Admiral Rowden. Yes, ma'am.
Mrs. Hartzler. Multiple rather than just singular, correct?
Admiral Rowden. Yes, ma'am.
Mrs. Hartzler. Okay. Secretary of Defense's December 2014,
2015 memorandum that directed the Secretary of Navy to reduce
the total procurement quantity of littoral combat ships and
frigates from 52 to 40 states, and I quote, ``40 littoral
combat ships and frigates, the number that the Navy's own
warfighting analysis says it is sufficient to need,'' end
quote.
So it appears to be the rationale as to why the Secretary
of Defense reduced the program's quantity. So does the Navy
have warfighting analysis that demonstrates that 40 littoral
combat ships and frigates are sufficient to meet warfighting
requirements? And if so, what is the Navy's number of 52 total
small surface combatants based on?
Admiral Rowden. Yes ma'am. I think that is a good question
to be addressed by Secretary Stackley, but what I can tell you
about the conversations that I have with our forward deployed
fleet commanders now, the commander of the 6th Fleet in the
Mediterranean and the commander of the 7th Fleet in the Western
Pacific and the commander of the 5th Fleet in the Arabian Gulf
and even the commander of the 4th Fleet down in Southern
Command is, in my conversations with them, that one of the
questions that always comes up is how many LCS can I get and
how fast can you get them to me. So the demand is there. With
respect to the--and the requirement remains 50.
With respect to the reduction from 52 to 40, Secretary
Stackley.
Secretary Stackley. Yes, ma'am. Let me start by the
document of requirement which goes to the Force Structure
Assessment that the CNO has conducted. 2012 Force Structure
Assessment updated in 2014 continues to emphasize the need for
no less than 52 small surface combatants to address the full
mission requirements across the balanced fleet. And the CNO,
since then, has been clear about a couple of things.
One, all pressure on our fleet points towards the need for
a larger fleet to continue to perform the missions at the level
that the Nation requires. And so there is not a requirement
that is going to come through, and this--the 2014 update is
going to be updated again this year, will be delivered with the
budget. But I can tell you that that requirement will not go
down in terms of the number of small surface combatants.
The decision to go from 52 to 40, that was a decision that
did not come from the requirements community. It, frankly,
didn't come from the Navy. This was driven in a budget
environment where the determination was made that we have to
take risk somewhere. This is a place where we will take risk in
terms of the size of our force.
Mrs. Hartzler. Okay. And I know a lot of our members want
to ask questions, so I will come back to some others. But I do
want to ask--something you said, Secretary Stackley, caught my
attention. Where you said the shipbuilders are being held
accountable. I know that as contracting goes forward, there is
a warranty type of a provision added. But is there--how are
they being held accountable now?
Secretary Stackley. Yes, ma'am. Let me start by describing
that I have been doing shipbuilding for over 30 years.
Mrs. Hartzler. Right.
Secretary Stackley. In our contracts, we do have explicit
warranty provisions. When the ship is delivered, we first bring
the Board of Inspection--well, first, our supervisors of
shipbuilding are monitoring the construction of the ship as it
goes to ensure compliance with process and procedures. And in
terms of the delivered ship, the Board of Inspection and Survey
comes on board and conducts a pretty extensive full-week
inspection of the ship, including underway periods.
Deficiencies are documented.
When the ship is delivered, it is still within a warranty
period so that if other deficiencies emerge during the warranty
period, then we first--we evaluate who is responsible for the
deficiency. If it is a government responsibility, if it is a
government system, then we own it. But if it is a contractor
responsibility, we take it back to the contractor to fulfill
his requirements under the contract within that warranty
provision. And then at the end of this period, we have what is
referred to as a final contract trial to shake out any last
remnants before we go into a post-shakedown availability, at
which point in time the government and the contractor are both
on board the ship correcting our response--our respective
deficiencies.
Mrs. Hartzler. Sure. What is the time period for these--has
been for the warranty period?
Secretary Stackley. Notionally, it is 12 months.
Mrs. Hartzler. So of the--you outlined in your testimony
five engineering--five concerns, and a couple of them dealt
with crews, dealt with training. That is why you are changing,
Vice Admiral----
Secretary Stackley. Yes, ma'am.
Mrs. Hartzler [continuing]. The training, which makes
perfect sense. So you are saying that those were--those costs
were incurred by the Navy because it was basically the crew's
fault that the structural problem occurred.
Secretary Stackley. Yes, ma'am.
Mrs. Hartzler. But with the design, like on the propulsion
and those others, who ate those costs----
Secretary Stackley. Let me walk through that.
Mrs. Hartzler [continuing]. To fix that?
Secretary Stackley. First the gear. This was a new gear
manufacturer brought to the ship. The prior gear manufacturer
ceased its business. And specifications went out to the gear
manufacturer. When that gear was coupled with the rest of the
propulsion plant, there was a, I will call it a mistiming in
terms of software controlling the system. That was not
discovered until the USS Milwaukee was en route to her home
port, and we tripped over this failure and the clutch--the
clutch burnt out.
That--the shipbuilder in this case and the gear
manufacturer are paying for the correction of the design, and
we are withholding payments on subsequent ships until that is
corrected on the subsequent ships. And then the USS Milwaukee
itself, that final correction is waiting for the design,
verification, and validation. And prior ships, the LCS 1 and
LCS 3, are not affected because they are under a different gear
design. So that is being covered today with withholdings, with
fee----
Mrs. Hartzler. Very good.
Secretary Stackley [continuing]. And cost under the
contract.
Mrs. Hartzler. Good. That makes sense.
Secretary Stackley. Can I hit the other one, because the
other one is important?
Mrs. Hartzler. Well, I think we need to--we are going to
have votes coming up.
Secretary Stackley. Yes, ma'am.
Mrs. Hartzler. And we want to get to some other questions,
but thank you for that.
Ranking Member Speier.
Ms. Speier. Thank you, Madam Chair. Before beginning my
questioning, I just want to compliment Congresswoman Graham for
an outstanding service to this committee and to Congress, and I
am really very disappointed that you are leaving because you
really are the kind of member we need that is always going to
be responsive to the needs of their constituents and to their
responsibilities as members of the committee. So thank you very
much for your leadership.
Mr. Stackley, I am so disappointed in your testimony I
can't begin to tell you. You just answered a question for the
chair that I thought was very deceptive. Let me just read from
a GAO [Government Accountability Office] report: ``Our past
work has found that by virtue of using guaranty provisions as
opposed to warranties (such as the U.S. Coast Guard generally
uses), the Navy is responsible for paying the vast majority of
defects.
``Specifically regarding the LCS, we found that for LCS 4,
the Navy's guaranty provisions were structured such that the
Navy paid all of the costs to correct the defects. For LCS 3,
the shipbuilder was responsible for 30 percent of the costs of
the first $100,000 of defects, a number the Navy surpassed just
days after delivery. Thus, the Navy was 100 percent responsible
for the costs of all remaining defects, for LCS 5-8, the
shipbuilder is responsible for some portion of the first $1
million in defects for each ship.''
Now, I don't think you were very responsive. I am not going
to ask you to respond. I am going to ask Ms. Mackin to clarify
what the warranty versus guaranty provisions, how the Coast
Guard is so different, and how for the vast majority of
defects, it is the taxpayer picking up the tab.
Ms. Mackin. Yes. We looked into this issue for Coast Guard
and Navy ships. It was a pretty comprehensive review. Not just
LCS, but other Navy ships as well, and what we found is the
Navy does not use warranty provisions as outlined in the
Federal Acquisition Regulation warranty the way we would think
of a warranty. They use a guaranty clause in the contract, and
it is subject to a limitation of liability. Those are the
numbers you were citing. So it is negotiated in the contract.
The limitation was zero on LCS 4. The more recent ships it is a
million dollars. The way these contracts are structured,
however, the government and shipbuilder, even for shipbuilder-
responsible defects, would split the cost in essence of paying
for the fixes, up to a million dollars. After a million
dollars, it is all on the government.
The Coast Guard, on the other hand, for their more recent
cutters has a pretty stringent warranty provision, kind of the
way we would think of it, that they negotiate at the outset and
hold their shipbuilders more accountable to fix problems.
Ms. Speier. Thank you. So, Mr. Stackley, why is it the
Coast Guard can get it right and the Navy can't?
Secretary Stackley. I will review the Coast Guard warranty
provisions, but our contract----
Ms. Speier. You have been doing this for 30 years. Why
haven't you looked at it before----
Secretary Stackley. I don't look at the Coast Guard
contracts unless it comes under my purview. The provisions that
we have on our contract, they hold the contractor responsible,
for what he--he is responsible regarding specifications,
regarding performance of the systems that they deliver. And if,
in fact, there is a deficiency, the costs go back to that
contractor during the warranty period.
Ms. Speier. I think that we are talking around some
realities. The reality is the Coast Guard has figured out a way
to do it appropriately. The Navy has basically taken the
position that we will pay for most of the costs. And that was
reflected in the GAO report.
Secretary Stackley, let me ask you a question. Last week a
similar hearing was held by our colleagues in the Senate. You
were asked who was responsible for briefing Congress that the
ship would cost $220 million. As we see from the chart, it is
now costing $470 million per frame. You said you had to check
your records. So you have had about a week. Who was responsible
for that?
Secretary Stackley. Yes, ma'am. Let me go back to, that was
the 2003, 2004 timeframe. I have got to be careful about the
term briefing because that number was briefed by everybody from
the Chief of Naval Operations to the Assistant Secretary of the
Navy to the program executive officer to the program manager.
Ms. Speier. So who is it? Who was it?
Secretary Stackley. I would start at the top of the chain
of command.
Ms. Speier. Well, evidently, I have a tweet from a reporter
that suggests that it was Vern Clark.
Secretary Stackley. I said I would start at the top of the
chain of command, and Vern Clark was the Chief of Naval
Operations at the time. His counterpart in terms of acquisition
was Assistant Secretary Young. They carried forward the program
based on what they had for affordability targets at the time.
Ms. Speier. Okay. But I guess my point is, in your
statement you made the case that, you know, we are really
moving along appropriately. They are costing about the right
amount. We are saving money. We are not saving money. They are
costing over twice as much as they were originally intended to
cost.
Now, Dr. Gilmore, do you think the LCS is survivable?
Dr. Gilmore. The admiral noted that the ship meets its
requirements for survivability, which it does. The testing that
we have done and that we will continue to do is indicating that
is true. And here are what its requirements are. Its
requirements against very modest threats, and the details are
classified, are to exit the area, not to continue in combat,
but to exit the area if they are attacked by modest threats. If
they are attacked by, and hit by, more stressing threats, and
unfortunately these threats are proliferating throughout the
world and they are quite stressing--they are stressing for any
ship to deal with--but if the ships are hit by these more
stressing threats, the requirement is for an orderly abandon
ship. And the testing that we have done and will continue to do
is probably going to indicate that those requirements have been
met.
That means that the ship is not going to be able to stay in
the battle area and conduct operations. Now, it is a challenge
for any ship to do that, if hit by some of these threats, but
all the other surface combatants that we have are built with
compartmentalization, redundancy, and other features that at
least give them much more of a chance to survive hits by some
of these stressing threats. So that is the basis of my
evaluation.
The requirements were set when the vision for using these
ships actually as articulated first by Admiral Clark--I have
looked at his testimony before the Congress in March of 2004--
the requirements were set consistent with the vision that the
ship would have many off-board systems that could go
potentially over the horizon, attack targets, which would mean
the ship could stay out of harm's way, and I am paraphrasing
what Admiral Clark said. Unfortunately, those capabilities have
not materialized. They may in the future. The Navy is getting
ready to deploy with some unmanned aerial vehicles that will
have reconnaissance capabilities. But in terms of long-range
attack, those systems are probably a number of years away.
In fact, many of the upgrades that the Navy has talked
about in the past as being available either in the last decade
or this decade are probably slipping into the middle of the
next decade at best.
So that is the basis of my assessment. If in the future the
Navy is able to develop and deploy systems that enable the ship
to stay out of the range of some of these threats, then the
survivability assessment would change.
Ms. Speier. So if an LCS is hit by a torpedo, what is
survivability, that the sailors can get overboard or that they
can exit the area?
Dr. Gilmore. Actually I am going to have to not answer that
directly because the details are classified. Talking about
specific threats makes the discussion classified, so I would be
happy to discuss that with you in the----
Secretary Stackley. I would like to answer that. I would
like to answer that, ma'am.
Ms. Speier. Well, if it is classified, why should you be
discussing it?
Secretary Stackley. I can get into some generic discussion
regarding survivability that might be helpful.
Ms. Speier. All right.
Secretary Stackley. Okay. First, Dr. Gilmore's assessment
regarding the ship's meeting its survivability requirements is
correct. The ship was not designed for what you call fight-
through survivability. If it takes a devastating blow, the key
is to exit the area and ensure the crew survives. But since the
mission is built around these mission packages that work off-
board, then it is not envisioned that the ship's ability to
continue to operate the off-board mission packages is critical
at that point.
In the case of a torpedo striking the ship, the comment
regarding compartmentalization of the ship, this ship is
designed to the same compartmentalization standards as the rest
of the United States Navy, and that is to be able to survive a
blow that covers 15 percent of what is referred to as floodable
length of the ship to provide three-compartment flooding. So
whether it is an LCS, or whether it is a DDG-51, or whether it
is a carrier, that compartmentalization standard is the same.
The fact that it is smaller, it has a bigger impact on a
smaller ship. But a compartmentation requirement in the event
that a torpedo, if it breaches more than three compartments,
then that crew is going to have to abandon that ship.
Ms. Speier. When I was on the----
Dr. Gilmore. Could I say something----
Ms. Speier. Yes, Dr. Gilmore.
Dr. Gilmore. The ship still doesn't have all of the
redundancy----
Mrs. Hartzler. Excuse me, Dr. Gilmore. I just want to let
everyone know we are voting. There is 9 minutes to go. So if we
could wrap up this question, then what I would like to do is
just to pause our hearing, let us go vote. It should be about a
half hour in voting, and then reconvene, because we have a
second vote series later on. So if that would be good. So if
you would finish the question.
Dr. Gilmore. I will just very briefly say----
Mrs. Hartzler. Sure.
Dr. Gilmore. The ship doesn't have the redundancy of the
other combatants. That is because it is a small ship. It also
has a very small crew, which is very important to
recoverability. So the other ships have a larger crew and more
redundancy, and if they are hit, that means they have a better
opportunity to survive. There is no guarantee of survival when
hit by any of these threats. So there is in my view, as I have
explained in multiple reports in detail, a significant
difference in survivability between these ships and all the
other surface combatants.
Mrs. Hartzler. Great. Thank you very much. So, we will
stand in recess and reconvene as soon as possible.
[Recess.]
Mrs. Hartzler. This hearing will now reconvene. Thank you
for your patience while we voted. I appreciate that very much.
I would like to go to Mr. Scott.
Mr. Scott. Thank you, Madam Chair. One of the questions I
had has already been answered, and that was for Mr. Stackley,
and that is if the Coast Guard is doing a better job or has
better provisions in their contracts, we should at least look
at that and see if that is something that we can incorporate. I
know you have said that you all would do that, and I appreciate
that.
I guess as I listen to this, I think back to the quote that
nothing will ever be attempted if all possible objections must
first be overcome. And regardless of the weapons system or the
branch, if we are talking about the Army, there is a reason we
have Strykers, and there is a reason we have M1 Abrams, and the
Stryker cannot handle the same type of strike from another
weapons system that the Abrams can. But the Abrams can't do all
of the things that the Stryker can. And if we are looking for a
light, nimble craft, then we have just got to accept the fact
that you can't build it as thick as you are going to build some
of our other weapons systems. It is just part of the tradeoff.
We have this tradeoff with every weapons system that we have.
And so I just, nimble and fast, in and of itself, and quantity
in and of itself, I believe are important in winning the
battle.
I do have a question, Ms. Mackin. As you talk about the
cost per ship, do you consider the development cost a variable
cost or a fixed cost?
Ms. Mackin. When we look at the cost per ship, there is
several different ways to look at it. So there is a cost cap
for this program, which is somewhat generous. We usually look
at the selected acquisition report, the unit cost as reported
by DOD----
Mr. Scott. But do you consider the research and development
[R&D] of the system a fixed cost or a variable cost?
Ms. Mackin. I think that would depend on the system. Maybe
somebody else can weigh in with more detail on that.
Mr. Scott. Well, research and development is a fixed cost.
It doesn't matter if you build 1 or 50----
Ms. Mackin. I think one issue for this program and other
programs is that some of the systems on this ship may be R&D
funded but not by the Navy. Maybe another part of the Navy that
is funding the system that will eventually go on the ship. So
it is hard sometimes to totally capture the entire cost of the
ship. But, again, we go with what is reported to Congress.
Mr. Scott. But the same type of analysis is what led to the
cancellation of the F-22, when the per unit cost of the F-22,
when the project was cancelled, was significantly lower than
the cost per unit that was being reported in reports like this.
Because the research and development costs are already sunk. It
doesn't matter if you build 1 or if you build 1,001.
Ms. Mackin. Quite frankly, cost is not our main concern
with this program right now. After the rebaseline, I do think
they have gotten costs more or less under control. The key
concern we have is the testing, the lack of completed testing,
while they have continued to buy the seaframes and the mission
packages. There are still significant concerns. And, again, the
frigate is going to be based on these same seaframes that have
reliability issues. So I would characterize that as our main
concern at this point.
Mr. Scott. Well, a lot is said about cost from the people
who want to cancel the program. So you are telling me the cost
is not the primary concern----
Ms. Mackin. The cost has doubled since the initial
estimate, as was discussed earlier. But let's look at what is
happening right now. After the restructuring, I think they have
gotten costs more or less under control. That is not our main
concern. Schedules are late, and the capabilities aren't there,
and the testing hasn't been completed, would be how I would
characterize our main concerns at this point.
Mr. Scott. Admiral, what are we giving up? What are we
accepting in additional risk, as a nation, when we move from 52
ships to 40 ships? And what is your understanding of any
studies that were done with OSD [Office of the Secretary of
Defense] to form any type of analysis foundation for the
quantity reduction to the LCS program?
Admiral Rowden. Thank you, sir. I will let Secretary
Stackley discuss the analysis. But, I mean, clearly when we
reduce the number of ships from 52 to 40, we are taking risk in
the capacity that we want to have forward. And so that will
result in more water under the keels of the ships that we have.
It will result in more wear and tear on those ships. It will
result in more wear and tear on the crew and a greater time
deployed for the same amount of availability forward. And so
that is risk that has to be weighed and has to be accepted as
we attempt to fulfill the requirements of the combatant
commanders.
Mr. Scott. My time is expired, but as I understand it there
was no analytical foundation for the reduction. That this was
simply a budget-driven decision. Is that correct?
Admiral Rowden. That is my understanding.
Mr. Scott. Thank you.
Mrs. Hartzler. Thank you. Ms. Graham.
Ms. Graham. Thank you, Madam Chairwoman, and I really
appreciate your kind remarks earlier, thank you so much, and
Jackie, thank you as well.
As a representative of a State with nearly 100 vendors that
undergird the LCS program, I am very grateful to have an
opportunity to talk with you all today. This is my actual last
day here on the Hill, so it is very special to be able to be
with you all. I would first like to thank the House Armed
Services Committee for fighting for the Graham amendment in
this year's NDAA [National Defense Authorization Act], which
would express the sense of Congress on the role of Panama City,
Florida, to the Armed Forces of the United States.
I would also like to thank the conferees who noted that
Panama City has played a long role and an important role in the
development and support of the United States Armed Forces.
This, I hope, is just the first step in recognizing Panama City
with the ultimate hope, and I have talked to the Secretary of
the Navy about this--that the Navy will name a future LCS after
Panama City, a much deserving community.
So now I would like to direct a question to Secretary
Stackley. As you know, the United States shipbuilding capacity
had been in steady decline for years. As many have noted,
shipbuilding is not a faucet that can be turned on and off.
Indeed, once lost, it can take years to recapitalize a vendor
base and labor force necessary to build our Navy's warships.
So, Secretary Stackley, you have suggested that a block buy
strategy enables a shipbuilder to go out to its vendor base and
secure long-term agreements to achieve the best pricing. Can
you please expand on this and comment on how such a strategy
may contribute to maximum efficiency and capacity in our
industrial base as well as best price for the taxpayers?
Secretary Stackley. Yes, ma'am. Thanks for the question.
First, you described the level of ship production that we have
going on in the country, and it is below capacity, and it is,
frankly, below where we need it to be in the long-term in terms
of being able to sustain the force structure that the Navy
needs. And there are three critical elements to that. First is
the shipbuilders themselves, and shipyards are capital-
intensive and require significant investment in order to be
able to produce these extraordinarily complex, large warships.
And so in order to support the investment that is required, you
have to have throughput in terms of ships. I mean, it is just
fundamental.
And so if production drops to an unsustainable level--
unsustainable meaning they can't invest in those facilities--
then those facilities are going to ultimately shutter. That is
one part.
The second part is skilled labor. Shipbuilding requires
unique skills in terms of shipfitters, pipefitters. We have
nuclear-trained mechanics, production control in the shipyard,
very skilled set of labor. And what we can't afford to have
happen is a sawtooth effect in terms of hiring and firing at
our shipyards.
One, we will be continually dealing with learning in terms
of the labor themselves. And, two, we will lose the skilled
labor. They will go to other areas where there is more stable
employment, and that will come back to us in terms of cost and
quality. So we have to maintain those two key elements in our
industrial base, and it is particularly fragile at a time when
your shipbuilding rates are below where you believe they need
to be.
And then the third is the vendor base itself. We can't lose
sight of the vendors that support our shipyards because at low
rates, quite often those vendors are uniquely supporting our
shipbuilding, and at lower rates, they are fragile. So we have
to be careful that we don't break the vendor base and have that
come back to us again in terms of cost and quality. That is all
on the industrial base side.
On the requirement side, we have to make sure that we are
building our ships at a rate to support the force structure
that we have laid out in terms of our 30-year plan which is
backed up by the maritime strategy in support of the national
military strategy. And so if you look at our long-term plan, we
are below where we need to be. If you look at what we have done
over the last 8 years, it has been to try to increase our
shipbuilding rates to support that long-term plan. And if you
are going to do that when you are starting at a fragile base,
those long-term agreements with the shipbuilders to incentivize
them to invest and with the vendor base to incentivize them to
basically support the shipbuilders through the material flow
are absolutely critical.
So in the Department of the Navy--I will stand by the
record over the last 8 years--whether it is the LCS program
across two shipbuilders, the Virginia program across two
shipbuilders, the DDG-51 program across two shipbuilders, the
T-AO(X) program that we just awarded, with one shipbuilder--
program by program we have done our best to be able to line up,
whether it is a multiyear or a block buy, a long-term run of
production to stabilize performance, to attract, retain the
skilled workforce that we need, and to reduce cost from the
vendor base right to the shipbuilder because that comes back to
us in terms of the government and the taxpayer. And that allows
us to, in fact, plow those funds back into whether it is
shipbuilding or aviation or whatever it is that is the priority
at the time to support our national security strategy.
Ms. Graham. Thank you for that very thorough answer. I
really appreciate it, and I am out of time. I want to end with
this. Please continue to feel my spirit and my commitment and
my thanks for all that you all do. And I hope that spirit will
one day result in an LCS being named after Panama City.
And I will let that be my final comment, and I yield back
to the chairwoman. Thank you.
Mrs. Hartzler. Thank you, Representative Graham.
Representative Byrne.
Mr. Byrne. Thank you. As a member of the Seapower
Subcommittee, I am particularly glad to be here today.
Admiral, Mr. Stackley, thank you for your years of
experience, for the expertise and professionalism you bring to
your jobs. It helps us do our jobs to have you do what you do
and give us such great information. Admiral, you stated your
years of experience. You can never replace that. We can sit
here and read pieces of paper and listen to you, but your
experience really speaks volumes to us, so thank you for that.
Admiral, you said that there is a significant need in the
Western Pacific and the Mediterranean for the LCS. You said
that the fleet commanders are asking for more LCSes and to get
them there more quickly, which I heard from Admiral Harris when
I was out in Hawaii at the RIMPAC [Rim of the Pacific]
exercise. I asked him, what is the message, Admiral? He said
get more of them to me. Get them to me as quickly as you
possibly can. You also stated that you are 100 percent
confident in the LCS and that you have seen the need for the
capability it currently has and that you are optimistic of the
added capabilities as the program continues to mature. And you
stated that there is growing threats in the world and a
demonstrated need for both the LCS and its transition to the
frigate.
I want to make sure I have summarized what you have told us
today. Did I get that right?
Admiral Rowden. Yes, sir, I think you nailed it.
Mr. Byrne. Good. Mr. Stackley, you said that the LCS
acquisition program has been steady since 2008, and since then
has been under the cost cap. You also explained that the
casualties of the LCS have been addressed and that there are no
systemic or recurring issues with these casualties. You also
said the Navy continues to have a need for 52 small surface
combatants, and, in fact, that number may increase. And the
reason to go down to 40 LCSes was driven by the budget and not
by any sort of operational study.
So I want to make sure that you continue to believe, and
the Navy continues to believe, you need 52 of these small
surface combatants, these LCSes to frigates?
Have I summarized your statements correctly?
Secretary Stackley. Yes, sir. As I described earlier, the
52 number, I don't anticipate any downward change to that
number when the updated Force Structure Assessment comes back
from the CNO with the next budget.
I want to make a minor correction, but an important
correction. In terms of stabilizing the program, I would tag
that to the 2010 timeframe, and that is when we basically came
over to Congress with the block buy approach, and that is the
environment that we are executing in today.
The other comment regarding the casualties, those specific
casualties that were identified that we are tackling, those by
themselves, not systemic, we are correcting those and we are
going beyond that though. Naval Sea Systems Command is doing a
comprehensive review of propulsion systems for both ship types
to ensure that we don't run into further unanticipated
casualties that could have been corrected ahead of time.
Mr. Byrne. Thank you. I have been on, I think, three of
these ships at dock and one at sea. And when I go on them,
Admiral, I talk to not just to the officers on the ships, I
talk to the sailors, because if you want to know what is really
happening, you talk to the sailors. You know that better than I
do. And what I have heard uniformly from the officers and
sailors on these LCSes, is that they love them. They are proud
to be serving on them, and they are having fun operating the
ships. I know you have been on them. I know you have talked to
a lot of these officers and sailors. What are you hearing from
the officers and sailors that are actually serving on the
LCSes?
Admiral Rowden. Sir, I hear a lot of things, clearly, and I
think that there are some things that we need to work on, but
those comments--and we take those onboard, and we go and we
attack them. From my experiences, not only on the LCSes both on
the East and West Coast, whether it is the Freedom variant or
the Independence variant, the young men and women that are
serving on these ships, they are excited for the mission. They
are excited for the mission. They are excited for the
opportunities that these ships present.
When I talk to the young men and women that have come back
from deployment, the varied missions that they are able to
accomplish, the engagement that they are allowed to execute, it
gives them a tremendous sense of pride. They also are
monumentally innovative, and so they are constantly coming up
with new ideas and new ways as we think about the future of
these ships in order to be able to fully utilize and fully get
the value out of these ships.
They talk about the modularity. You know, one of the things
that I think is important is that when we go to modernize a
guided-missile destroyer, we have to take that ship offline for
a significant period of time; but they understand that we can
modernize the module ashore and in a very short period of time
have a fully modernized combat system in order to be able to go
put it back out to sea, get the crew trained up, and away we
go.
And so the capacity and the capability that these ships
bring, the opportunities that they bring to contribute to three
very important missions, and the opportunities to provide the
presence that sometimes we just can't get because the guided-
missile destroyers, the cruisers, the submarines, and carriers,
are off doing other things. That is what really gets them fired
up.
Mr. Byrne. Well, thank you for that, and thank you for your
service, sir. And I yield back.
Mrs. Hartzler. Thank you. A few more questions here. Dr.
Gilmore, what specific LCS platform characteristics and design
do you believe that the Navy will need to address in its design
for the frigate in order for your office to deem the frigate
operationally suitable and effective?
Dr. Gilmore. Well, the most important problem, set of
problems, that will have to be addressed, are associated with
the continuing reliability problems of many of the ships'
systems, and many of those may end up being the same on the
frigate, although Mr. Stackley will know more about that than I
do because he is the one who is involved in developing the
detailed design, but the initial assumption was that many of
those would be the same. And there are continuing reliability
problems with those systems. And if those problems are not
fixed and addressed, it will be hard to, in fact, probably
impossible to say that the frigate would be suitable, but I
assume the Navy is looking at that.
And then, of course, in the testing that we have done so
far, there are problems with the guns, and some of the guns may
end up being the same in terms of the ability of the crews to
use them consistently to accomplish the missions that they are
supposed to accomplish. They can in some instances accomplish
those missions, but it turns out to be very difficult.
But the other thing I have to say about combat missions is
that we have only done a very limited amount of testing so far
in that regard, very limited testing of the surface warfare
package, and then truncated testing of the mine countermeasures
package. Of course, the mine countermeasures package isn't at
issue for the frigate.
So at this point what I would say is with regard to the
problems that might be encountered with the combat systems, the
anti-submarine warfare systems, and the augmented surface
warfare package on the frigate, we will have to see how that
goes. The Navy is in development of those systems, but the Navy
should devote a lot of attention, and I think Mr. Stackley has
indicated they are devoting a lot of attention to the
continuing reliability problems with the systems on the ships.
Mrs. Hartzler. Thank you. Mr. Stackley, I wanted to ask you
about that because in your testimony you talked about the
packages that they include, and you said they will deliver when
available, and they are ready to deploy. They have successfully
fielded the surface warfare. They were late due to budget and
technological challenges. I know you went in depth and
explained about the mine countermeasures challenges and what
you are doing with that regard. But I was a little surprised to
hear you talk about how these other packages are ready.
Can you give a little further assessment on that? Are they
ready? And it sounds like you are putting old systems on them
and bringing on new ones as they come about, or what is the
status of the packages?
Secretary Stackley. Yes, ma'am. Thanks for the question. I
will try to be real clear here. We launched the program with
three mission packages as the targeted initial round of
capabilities as we delivered the ship. Across those mission
packages, certain subsystems were mature and certain subsystems
were going through development. And as I indicated in my
opening statement, we are delivering mission package capability
late. And the lateness ties to the extended development of
certain of those subsystems. However, when one is ready, when
it is mature, we are bringing it to the ship, so that as those
capabilities mature and as these ships deploy, you are seeing
increasing capability on board.
And, in fact, I would argue that the approach that we are
taking with the LCS regarding bringing mature capability to the
ship in an incremental fashion is exactly what you all have
outlined for the Department of Defense to do in the 2017 NDAA.
I think if you take that, what you have outlined in terms of
practice for the Department, and you line that up with the LCS
program, that is the approach that we are taking here. The
reason that we are having this hearing frankly is, one of the
reasons, is the time that it has taken to complete the
development and testing for some of these subsystems. We spend
a lot of time talking about the RMMV, for example, but there
are other examples where we have had to actually cancel parts
of the mission packages because the development was not getting
there and then find an alternative.
The beauty is that when that decision is made, we don't
have to go in and do a significant redesign to the ship because
the ship was designed in a modular fashion, and we can bring
these alternatives to the ship with a far less intrusive
integration onboard. And I can walk through some of those
examples, but I think it is instructive in terms of the benefit
of the modular approach.
Mrs. Hartzler. I think that is a good point because we have
talked about open architecture and some of those things in
acquisition reform.
Just a question. Curious about the contracting, the
subcontractors, so I got a list of them and looked at them
because this has been problematic as far as the delay. Are they
penalized for not delivering on time, or how is a contract set
up initially in that regard?
Secretary Stackley. Yes, ma'am. Bottom line, most of these
developmental systems are under a cost-plus R&D contract where
the terms and conditions of the contract are we take on
responsibility for cost in a cost-plus environment, recognizing
that in many cases we are looking for new invention and
discovery. And so we assume the responsibility in a cost-plus
environment for the cost, but the contractor loses if it is a
cost overrun or delays, they are going to lose the fee that
goes with the work. And ultimately they will lose the contract.
I mean, RMMV was under development with Lockheed Martin.
They had their eyes on the production contract and when we
cancelled, they didn't just lose the fee on the RMMV
development, but they lost the production that was going to
come with it.
Mrs. Hartzler. Very good. And I want to go to other members
too, but I do want to ask Mr. O'Rourke a question. You have
waited patiently, and you are a known expert on these issues on
the Hill.
So GAO has previously indicated that Congress limits their
oversight by authorizing a block buy. A few questions. How has
the previous block buy been used to manage cost growth, and is
Congress able to perform oversight during the block buy? And,
third, what are the implications of Congress not approving the
next block buy for LCS?
Mr. O'Rourke. In terms of conducting oversight during the
period of a block buy, we have actually been through a test of
that over the last several years as we have executed the
current block buy contracts. There are many aspects to
congressional oversight. One is what we are doing right now,
which is asking questions during hearings. And there has been
quite a lot of that over the past several years. The LCS has
been a recurrent topic of questioning, sometimes quite
intensive or extensive, at the annual Navy budget review
hearings.
I would venture that most of the annual Navy posture and
budget review hearings have at one point or another discussed
the LCS, so there has been a lot of Q&A at the hearings.
Another aspect of oversight are legislative provisions and
there have been a lot of----
Mrs. Hartzler. If I could ask you, I think maybe you didn't
hear the question. What I am looking for, how has a block buy
been used to manage cost growth not oversight? So how has a
block buy managed cost growth, and what are the implications
for us as Congress if we don't approve a block buy?
Mr. O'Rourke. Right I was going to the----
Mrs. Hartzler. That is what we are looking at so----
Mr. O'Rourke. Right. I had picked out the middle part of
your question first.
Mrs. Hartzler. Yeah there was a question----
Mr. O'Rourke. But let me return to the first part, which
is, if you would say that again, I want to make sure?
Mrs. Hartzler. Sure. How has a previous block buy been used
to manage cost growth?
Mr. O'Rourke. Okay. I think it is important to get into the
record that most of the cost growth on the procurement cost of
the seaframes occurred prior to the block buys. Once the
program was put under the block buy contracts, there has been
only minor growth within that contract, some of which has been
paid by the Navy. But the majority of the increase in the cost
of the ships occurred during the period of annual contracting
on the first four ships.
Mrs. Hartzler. So you would say block buy locks in the
price and helps save money?
Mr. O'Rourke. It stabilized the costs and put the program
into an environment where the costs have been not one that
assembled a record of cost growth of anything like what we saw
on the first four ships. Furthermore, by doing a block buy
contract, you are getting the kinds of savings that are
possible under a block buy contract compared to annual
contracting. And those savings for the kind of block buy
contract we are looking at here, which did not include upfront
batch orders of components, could be upwards of 5 percent, so
if we had been in an annual contracting environment, the ships
might have been that much more expensive as well. A third point
on this is that----
Mrs. Hartzler. Very quickly.
Mr. O'Rourke. These block buy contracts are fixed price
incentive contracts, and so that tends to limit the
government's exposure to the amount of cost growth that does
occur during the contract. That was the first part of your
question.
Mrs. Hartzler. Makes sense. Thank you very much.
Representative Speier.
Ms. Speier. Thank you. Let's talk more about block buys,
because my understanding is that, Secretary Stackley, you have
already put out an RFP [request for proposal] that presupposes
a block buy, even though you don't have authorization yet from
Congress. Is that correct?
Secretary Stackley. What we have put out an RFP for is the
2017 ships with an option for a block buy where we will be
coming back to the Congress with the 2018 budget for
authorization for the block buy.
Ms. Speier. But the shipbuilders are even saying that a
block buy at this time won't afford them the necessary time for
the completion of design.
Secretary Stackley. We are doing the design today with the
shipbuilder. We won't award the contract until we have
completed a design review so that we, the government, are
satisfied based on their presentation of the design information
that will inform their proposal for the frigate.
Ms. Speier. Ms. Mackin, what are the downsides of a block
buy?
Ms. Mackin. You know, it could have advantages for cost
control, number one.
Ms. Speier. Which Mr. O'Rourke has talked about.
Ms. Mackin. Right. The disadvantages in our view, is that,
as I mentioned in my opening remarks, the program can be
considered, quote-unquote, ``locked in,'' so that any attempt
to adjust the procurement pace, if Congress has concerns about
the program, they want to make some changes, DOD has
consistently come back and said, well, the pricing will
increase then.
So you are not locked in. I mean, you can make changes, but
there is that risk that, oh, well, the contractors, we had this
deal, and now they are going to raise their prices. So, I think
it needs to be carefully considered if the block buy proposal
for the frigate right now, which will be based initially on LCS
prices, is the best strategy.
Ms. Speier. Secretary Stackley, and you can provide this
for the record if you don't have it off the top of your head, I
want to know--and I would like for you to send it to the
committee and also to my personal office--how much money we
have spent on repairs to the LCS fleet to date, how much has
the government spent, and how much has the shipbuilder spent.
Secretary Stackley. Yes, ma'am. I will submit that for the
record.
[The information referred to was not available at the time
of printing.]
Secretary Stackley. Now, I am going to ask for
clarification because, for example, the LCS 1 has been in the
fleet for about 8 years, the LCS 2 for about 7 years; and so
when you say how much money for repairs, we will come back with
a--it will probably be a large dollar amount for repairs, but
you understand that most repair, the predominance of the repair
that we do in operations is because of the wear and tear that
we put on the ships by operating them. For clarification, are
you looking for contractor-responsible deficiencies?
Ms. Speier. I want all repairs, and you can give it to us
by date so we can look at the date the ship was commissioned
and the date of the repairs so we can make that kind of
assessment as to whether it is just wear and tear on the ship
or whether it is something relative to a newly commissioned
ship that has a series of problems, as many of these have
already had.
We will make that determination. If you just provide to us
the dates of the repairs and how much they cost and who paid
for them, that would be sufficient.
Secretary Stackley. Yes, ma'am.
Ms. Speier. And then I was on the LCS 4 on its very first
trip, and I talked to the commander at the time who said they
were having trouble with the design of the ship because they
couldn't see over the hull. Now they left Cartagena and came
back to Coronado to be christened. And as they went through the
Panama Canal, the hull got damaged when pieces of the lock
penetrated the hull. I would like again, if you don't have that
figure off the top of your head, to provide it to me and the
committee how much that cost to repair.
Because in my conversations with the commander, I said this
seems like a serious problem, and it seems like you need
cameras or mirrors or something to be able to see over the
hull. And he said, well, we won't be able to get that until it
goes back into dry dock in 2 years. And literally within weeks,
they had damaged the hull. So if you would provide that to me,
I would appreciate it.
Secretary Stackley. Yes, ma'am.
[The information referred can be found in the Appendix on
page 163.]
Ms. Speier. Back to you, Dr. Gilmore, the testing of the
modules for the LCS, can you go over that? How many of them--
according to the Secretary there is three now. How many of them
have been fully tested?
Dr. Gilmore. The only mission module that has been
partially tested consistent with the--you know, there is a
series of incremental requirements associated with the
increments of each package, so we have tested the Increment 2
surface warfare package against its requirements, which are
reduced relative to the requirements for surface warfare that
the Navy ultimately hopes to meet with the fully capable
surface warfare package which will come in the next several
years, probably middle of the next decade, perhaps a little
sooner.
So what we have done so far in terms of operational testing
is to test both LCS variants equipped with the Increment 2
surface warfare package against the Navy's requirements for
surface warfare for the Increment 2 package. We had initiated
what is called the technical evaluation last year, which was of
the mine countermeasures package, which was the lead-up to what
was supposed to have happened in operational testing. But given
what happened in the technical evaluation testing, the Navy
made the decision not to go to operational testing,
commissioned an independent review team, and ultimately decided
to cancel the RMS [Remote Minehunting System] program and make
other changes to the mine countermeasures program. And we now
have in place a plan for testing that future mine
countermeasures package, which will be different from what the
Navy had been thinking, at least in some respects, but that
won't take place for several years.
So just to sum up, what we have done so far in terms of
operational testing is operational testing of the Increment 2
surface warfare package. There has been a lot of developmental
testing done on elements of the other packages. For example,
there has been developmental testing done of a variable depth
sonar, not the one that the Navy has recently contracted for,
but it was a foreign source variable depth sonar. There was
developmental testing done of that. I forget exactly when that
was, a year or two ago, and that was very promising. But it was
done under conditions that weren't operationally realistic
because, you know, the crews doing the testing actually were
engineers, and the submarine that they were using the sonar to
look for, the operators knew where it was, and the submarine
wasn't evading.
Now having said all of that, the test results were
nevertheless very promising, and there have been lots of other
developmental testing that has been done and that the Navy
continues to do. But I am the operational test guy, and what we
have done is what I said.
Ms. Speier. So if I understand you correctly, this whole
concept of having modules that you could interchange on the
ship, making it more flexible, has been tabled, and we are now
doing single modules for the ships, and only one has been
operationally tested?
Dr. Gilmore. Well, the original concept was that different
modules could be interchanged among different ships, and that
the ship crews and the module crews could be separate and
interchangeable.
My understanding is that the Navy as a result of another
review in which Admiral Rowden was involved, has decided that
they are going to merge the ship crews and the module crews on
LCS and pretty much dedicate given modules to given ships and
crews. And based on what we have seen, we think that is a good
decision, so the Navy is giving up on some of the original
vision based on what it has learned as we have done operational
and developmental testing.
Now, you still will be able to pull a module off a ship.
The points have been made about, well, you can modernize the
module and not take the entire ship down. So suppose you want
to implement Increment 4 of the surface warfare package, you
can take those modules off the ships. You can take the existing
surface warfare modules off the ships and replace them with
another module for another warfare area, and the ships aren't
completely down and going through a lot of construction and
changes in a dry dock.
So that part of the concept is still alive, but the Navy
has modified its thinking about how it is going to implement
modularity on these ships going forward.
Admiral Rowden. Ma'am, if I may provide some clarification.
Ms. Speier. Sure.
Admiral Rowden. Yes ma'am. So, I led the review team that
came up with the recommendation to think differently about the
modularity of these ships, and in the execution of the review,
we were concentrating on three things really: simplification,
stabilization, and ownership. My experience in going to sea is
that the crew has to own the mission, and my concern was as we
were looking at the modularity and shifting the mission over
perhaps the course of a weekend, you are taking the vast
majority of the crew and you are trying to shift them from
hunting submarines on Thursday to hunting mines on Tuesday, and
that just didn't make sense to me from the operational
perspective. I still value and wanted to fully utilize the
modularity of the ships for the reasons that Dr. Gilmore points
out. We can modernize it much more effectively and much more
rapidly.
But I think it is important to understand that while we
will single up crews and we will single up ships dedicated to a
specific mission, if the need arises, we also have those crews
given the similarity between the ships, or the identical
between the ships, if we need to shift ships from hunting mines
to hunting submarines, we have crews available, and we have
modules available to do that if we have to expand that
capacity.
So we will have divisions dedicated to specific missions,
and we will have crews dedicated to specific missions, but we
can still utilize the modularity to expand our capacity should
we have to do that in a time of crisis.
Ms. Speier. Okay. But we started off with a concept. We
built eight ships under that concept. We have got another 12
ships in development, and we keep changing our design
expectations or assessments. And it just seems to me that we
should design and then build because then we built things that
aren't adequate to do what we want them to do.
Let me ask you this, Secretary Stackley, and just one more
question after that, Madam Chair. It is my understanding that
because we didn't have a U.S.-based or U.S. Navy capability, a
repair technician was flown to Florida from Australia in 2015
to make a 90-minute repair but essentially delaying operations
by 4 days. How many other pieces of equipment could require
similar repairs and/or delays, and has this happened more than
once?
Secretary Stackley. I will have to get back to you on the
record in that specific instance and see if there are other
instances. But I will describe that for every ship in our Navy,
if we have to, and we do, we reach around the world to get the
right tech rep there to the ship to provide the technical
support that it will need in timely manner. And when we have
original equipment manufacturers that are located overseas,
then in fact we do on occasion have to go overseas to get that
repair assist.
Ms. Speier. All right. So if you would just provide to us
how many times have we had to utilize resources that were not
available within the Navy on these specific ships?
Secretary Stackley. Yes, ma'am.
[The information referred to was not available at the time
of printing.]
Ms. Speier. Okay. And then finally one last question. If we
are now taking the LCS and turning it into a frigate, wouldn't
we be better served to design a frigate that meets what our
needs are? We have always had problems with the LCS because we
were bumping up against the weight restriction. We have always
had problems with the fact that there is not adequate number of
crew on the ship, and we have a hull that is made out of
aluminum that gets pierced easily and has been damaged in a
number of settings. It seems to me that maybe we should go back
to the drawing board and build a frigate that we want as
opposed to just superimposing it on an LCS frame that appears
to have many problems.
Secretary Stackley. Yes, ma'am. Thanks for the question.
Back in the 2014 timeframe, we spent a year reviewing design
alternatives for this frigate, and we worked with the fleet. We
worked across the design community. We worked with the Joint
Staff. We worked with the CNO staff. And we reviewed existing
designs, U.S. and foreign frigate designs, as well as
considered a clean sheet. So, in fact, we did consider a clean
sheet.
We considered other existing designs, other existing
designs as parent designs that could be modified, and included
in that was the LCS itself. Reviewed all those alternatives,
looked at the range of capabilities. The fleet weighed in in
terms of their priorities in terms of the capabilities. Had to
consider the missions that the ship would perform in, and had
to consider things like cost and maturity and risk.
And out of all that and that review that was conducted with
OSD, with the Joint Staff, and we invited review by committee
staffs as well, out of all of that, we landed on the proposal
that came across to Congress last year and which we are
continuing to discuss, which is the modified LCS, using the
existing ASW and surface warfare capabilities that we either
have or are developing to reduce the risk to first and foremost
provide the capability that the fleet has prioritized, reduce
the risk in terms of technical time and cost, and ensure that
when we make a commitment to the Congress in terms of this
frigate, this capability, this cost, that we are not bringing a
lot of risk to the table and have a repeat of what we just
experienced on the LCS at the beginning of this program. We are
trying to leverage. It goes back to my comment regarding the
2017 NDAA----
Ms. Speier. All right. Ms. Mackin, could you just respond
to that as well?
Ms. Mackin. We also looked at the study. We looked at how
the study was done. The study team did a pretty good job given
a very limited time that they had. They did consider existing
design, modification of existing new designs, and a major and
minor modified LCS. As I mentioned earlier, the minor modified
LCS, which is now the frigate, was the least capable option
that the study team assessed. It did not meet all the fleet's
needs, everything that they wanted.
Cost was a big driver in deciding to go with the minor
modified LCS, but another big driver was that they didn't want
to disrupt the workload at the two existing LCS shipyards, so
that was also a factor in addition to cost, and what we have
now is the frigate.
Ms. Speier. But the actual production is not jeopardized
until 2021?
Ms. Mackin. That is right. And even the study team noted
that the current workload, even at that time they were doing
their work, was taking both yards into 2021. So as I mentioned,
there is no schedule imperative right now to get the frigate
into the pipeline for industrial base concerns.
Ms. Speier. So for the record, of everything that was
studied, this was the least attractive alternative that was,
indeed, selected? Is that what you just said?
Ms. Mackin. It was the least capable option.
Secretary Stackley. I would not agree with that, for the
record, ma'am.
Ms. Speier. All right. Now----
Secretary Stackley. For the record, and I would, rather
than have this be a debate at this hearing, that you invite
your staff or the members to review, we will brief, we will go
through the extensive review that was done of the alternatives.
And for the record, the disruption to the shipbuilders,
that is important, but the decisionmakers, and that included
the CNO first and foremost, and the CNO first and foremost is
less concerned about disruption to the shipbuilders and more
concerned about delivering capabilities to the fleet. And that
was the priority that he placed in terms of the ultimate
recommendation that went forth to the Secretary.
Ms. Speier. Well Mr. Stackley, I do not want to engage in a
discussion on this right now, but I think in the end, for all
of us, what is most important is, one, that our seamen are safe
and secure at sea and that they can survive and that the ship
can survive.
And, two, that we build competent, capable ships, and,
three, that the costs be known and that we are prudent in
making sure that we are not paying for pigs in the poke. And
that we are not providing sweetheart deals to the shipbuilders
for not providing us ships at the outset that are capable of
doing the job that we contracted for, and that is why that
warranty/guaranty issue must be addressed.
With that, I yield back.
Secretary Stackley. I 100 percent concur, ma'am.
Mrs. Hartzler. Very good. Mr. Byrne.
Mr. Byrne. A couple of follow-up questions. Have we had
other classes of ships that have moved through the Panama Canal
that have had some sort of damage as they have gone through?
Admiral Rowden. Sir, I can't think of any specific
instances at this time. However, I will take that for the
record; and if that, in fact, has occurred, I will get that
back to you, sir.
[The information referred can be found in the Appendix on
page 163.]
Mr. Byrne. When the ship is going through the Panama
Canal--I have watched commercial ships go through the canal,
and the crew is still on board the ship, but the Panama Canal
personnel are actually operating the transit through the locks.
Is that true with U.S. Navy ships?
Admiral Rowden. Yes, sir, that is.
Mr. Byrne. So if there has been damage as it is going
through the locks, it is really not our personnel that has
caused it. It has been caused by the people that work for the
Panama Canal?
Admiral Rowden. That is correct, sir. And specifically with
the latest damage that occurred on the ship, when we took the
first ship through and there was some damage associated with
it, we sent a team down to the Panama Canal to talk to them
about how we needed to take these ships through the canal, the
modifications that needed to be made to the way they hook the
lines up and pull the ship through the canal.
Unfortunately, and we discussed this at length with how
they were going to do it, unfortunately in the most recent
transit, that was not executed. We have gone back to them, and
we are going to get it squared away in the future, but we know
how to get the ships through the canal safely, and if we
execute the procedures as we have outlined them, I don't think
we will have any problems with that in the future.
Secretary Stackley. If I can add to that?
Mr. Byrne. Sure.
Secretary Stackley. The LCS 2 variant is what we would
refer to as Panamax. In other words, the ship design maximizes
the beam width of the ship up to the limits of the Panama
Canal, so it is going to be tight. And it is also a very unique
design in terms of the sides of the ship, and you are well
familiar with this.
So the first couple of instances of transiting the canal,
the damage has occurred because we are pressing up against the
full width of the canal with this unique design, and the system
that is used, what's referred to as a fendering system, for all
ships--all ships have a fendering system to minimize the
damage--just was not prepared for that situation.
So as Admiral Rowden indicated, it is both handling, but it
is also the fendering system that we are putting in place to
deal with those type constraints.
Mr. Byrne. And with the casualties that we have experienced
with this class of ships, the LCS class, are they on par with
other classes of ships when they are new? Is this what you get
when you get a new class of ship, that you have a certain level
of casualties, any worse or any better?
Secretary Stackley. The answer is absolutely yes, but we
are not satisfied. And so I reviewed what we refer to as
casualty----
Mr. Byrne. Absolutely yes, that it is on par?
Secretary Stackley. Absolutely yes, that it is on par, but
we are not satisfied. I reviewed the history of the last 4
years' worth of casualty reports, and LCS is in the mix for
combatants in terms of casualty reports status 2, 3 and 4,
which are different degrees of severity. So that is in the mix.
However, Dr. Gilmore's comments regarding reliability are
absolutely on. This is a relatively new ship class. We do have
new ship systems. We are going through what is referred to as
reliability growth. And what we have got to do is get there
faster on a system-by-system basis so that the concerns that he
raises and that we share with regards to reliability, we can
retire more quickly, and we will just as we have with every
prior ship class that we have introduced to the Navy.
Mr. Byrne. And, Admiral, one final question for you. We
have heard a lot about distributed lethality. I hope I said
that right. It is a lot of syllables in a couple words for
somebody from Alabama to say. When we added the missile
capability to these ships, what did it do to these ships'
distributed lethality?
Admiral Rowden. Sir, thank you for the question. It is
interesting because our first thoughts of how to distribute the
lethality of the fleet, distribute the lethality of the force,
came when we were up at the Naval War College actually
conducting a war game utilizing the littoral combat ship. And
in this specific war game, we were playing in the mid 2020s
timeframe, and one of the capabilities that we indicated would
be available and on the ship at that time was an extended-range
over-the-horizon missile.
And this was a war game in that we set up live players,
playing live players as we executed the moves. And I was just,
I was quite pleased with the effectiveness that we had out of
the littoral combat ships that had been discounted by the
adversary given the capability that we had built on to the
ship, and they had full understanding of what was happening
there.
And so as we have looked back and as we conducted the
after-action reports, one of the things that I realized as we
were looking at the requirements that we built into our ships
is this migration towards pretty defensive ships. Defend the
aircraft carrier. Defend the logistics train. Defend the
amphibious readiness groups. And what we have found in
subsequent war games is that if we increased the offensive
capability of the ship, if we increased the range at which we
could go out and attack our adversary, it caused a couple
problems.
One, they had to think very differently about all of the
different aspects of the fight. They had to pay less attention
to the undersea domain. They had to pay less attention to the
space of the domain because they had to pay much more attention
to the surface ships and the lethality of those surface ships.
Mr. Byrne. Well, I noted when I was at the RIMPAC exercise,
that the Chinese ships that were participating were all closest
to the Coronado, the littoral combat ship, and watching it very
carefully. And so I think the Chinese are very interested in
what this new capability has been added to that ship and what
it would do in that theater.
Thank you, Madam Chairman. I yield back.
Mrs. Hartzler. Thank you. We have had a very thorough and,
I think, helpful hearing today discussing this very important
platform for our sailors and for our Nation.
Before we conclude the hearing, I was wondering if any of
the witnesses have any closing remarks that they want to make
or anything they want to say to put on the record that they
haven't gotten to say yet.
So I will just go through Mr. Stackley, if there is
anything you want to add.
Secretary Stackley. Ma'am, I would be at risk of repeating
my opening statement. But just to synopsize, the ship works. We
have reliability issues. We will get through those. But the
ship works. Concerns with things like redundancy, I agree with
Dr. Gilmore's assessment that we need to increase redundancy,
particularly for critical systems, and we are going about that,
first with the frigate design and then looking at backfitting
that to the earlier hulls. The ship works.
The mission packages are correctly selected in terms of
warfighting gaps. We have got to deliver that capability
regardless of what the platform is, and we have selected the
LCS platform to deliver those capabilities. We are late. We
understand that, but we are bringing that capability forward in
an incremental fashion when it is ready so every deployment,
every deployment, littoral combat ships are deploying with
increased capability. And yes, we have changed the program as
we go. That is because we are learning.
This is a new concept. And concepts that were struck back
in the 2001, 2002 timeframe, now that we are out there
operating and deploying, we are learning and we are improving.
So I thank you for the hearing, and we will follow up on
all the requested actions.
Mrs. Hartzler. Very good. And you are--each of you can
submit comments for the record in addition.
Vice Admiral Rowden, any closing comments?
Admiral Rowden. Yes, ma'am. I too sincerely appreciate the
opportunity to be here on behalf of the littoral combat ship.
It is an exciting time in our Navy, and it is an exciting
time bringing this capability into the fleet. The capabilities
that it is going to deliver and understanding that we have a
team focused on the issues, we are learning about the issues,
we are learning about how to maintain it, and going forward, I
am 100 percent confident that we will tackle those issues and
we will defeat them.
And as we deliver that capability forward, as we--and in my
mind, it is all about the center of the universe, and I think
the center of the universe, at least from the professional
perspective, are the ships and the men and women that serve on
those ships. They are excited about the capability that these
ships bring, and I know that they will deliver to the forward
forces. And we are going to continue to work hard and make sure
that we maximize the value of these ships to our fleet
commanders.
Mrs. Hartzler. Very good.
Ms. Mackin.
Ms. Mackin. I just would reiterate the need for prudence in
pursuing a block buy strategy at this point in time, which will
be initially 12 LCS prices, with the frigate upgrades to be
added in later. There are a lot of unknowns about the basic
ship right now that is going to be modified, what will the
design look like, what will the cost be. So I will just
reiterate that caution.
And then just for the record, I did want to mention on the
warranty issue, we recommended that the Navy take a look and
see if it would be possible to move more toward a warranty
approach, as the Coast Guard does, and they agreed to do so.
That study is supposed to be provided to us this month. So we
haven't seen it yet, but we will look forward to taking a look
at the results.
Mrs. Hartzler. Very good.
Dr. Gilmore.
Dr. Gilmore. I just emphasize what I said in my opening
comments, which is we need to acknowledge the many problems
that exist and fix them. And I am glad the Navy is now
acknowledging many of these problems, but in the past, that
always hasn't been true.
For example, in 2014 testimony from senior Navy officials,
they said the Remote Minehunting System completed its
reliability growth program this past year and continues to test
well. At that time, that simply wasn't the case. It was testing
poorly.
So I hope that the Navy, as it is now doing and as it did
with its mine countermeasures independent review team,
thoroughly reviews all of the test results that are available,
takes those onboard, and provides the resources, with your
help, to fix these problems. And it seems that Mr. Stackley and
Admiral Rowden are committed to doing that, and I hope they
continue to do that in the future.
Mrs. Hartzler. Very good. Thank you.
Mr. O'Rourke.
Mr. O'Rourke. Thanks for having me at the hearing today.
Just to close the loop on your earlier question about block
buys and oversight. There is a lot of aspects of oversight. We
talked about Q&A [question and answer] at the hearings. There
is legislative provisions, there have been many of those over
the years, lots of report language in the committee reports, a
lot of GAO reports also, as well as--as well as my tracking
report and CBO [Congressional Budget Office] report. So those
are all other aspects of oversight that have taken place during
the block buy contracts that we have executed.
There is one additional aspect of conducting oversight, and
that is the ability to terminate the program if you are just
dissatisfied with it. Congress does retain the ability to
terminate a block buy contract, and a block buy contract can be
written without a cancellation penalty. Furthermore, a block
buy contract can be implemented without upfront batch buys of
components that might add to your reluctance to cancel the
contract, and in fact, that is how the Navy has done the LCS
block buy contracts, without any upfront batch buys.
The block buy contract does add to your reluctance to
cancel the program, but it might also be argued that most of
the reluctance for terminating a program arises from the mere
fact that the program has begun procurement. There have been
relatively few defense acquisition program cancellations over
the years, and the vast majority of those programs that have
not been canceled were done under annual contracting.
One final note. If we were to do a down-select as currently
planned and then use annual contracting, we could be getting
ourselves into a situation of limiting the Navy's ability to
use leverage in its negotiation with the contractor. When you
down select to a single builder, you are creating a monopoly
supplier at that point. And if the Navy then has to go back to
that sole builder and contract on an annual basis and get into
an annual negotiation with that builder, the Navy's leverage in
that situation might be reduced.
That is a situation we are in, for example, with aircraft
carriers, and people have expressed dissatisfaction with the
fact that we have only one builder of aircraft carriers and we
have to then negotiate with them every time we build a carrier.
If you were to do a down-select on the LCS program and then
also use annual contracting rather than block buy, you are
creating a situation not too unlike that one that people have
expressed dissatisfaction with.
Mrs. Hartzler. Great. Thank you all for your service to
this Nation. This hearing is now adjourned.
[Whereupon, at 12:10 p.m., the subcommittee was adjourned.]
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A P P E N D I X
December 8, 2016
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PREPARED STATEMENTS SUBMITTED FOR THE RECORD
December 8, 2016
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DOCUMENTS SUBMITTED FOR THE RECORD
December 8, 2016
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WITNESS RESPONSES TO QUESTIONS ASKED DURING
THE HEARING
December 8, 2016
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RESPONSE TO QUESTION SUBMITTED BY MS. SPEIER
Secretary Stackley. USS CORONADO (LCS 4) transited the Panama Canal
in February, 2014. As the ship transited the canal, CORONADO suffered
four separate allisions (instances where the ship structure was pierced
or deformed by hitting the Panama Canal wall structure). Two of the
allisions were created transiting the Gatun Locks and the two others
were created in the Pedro Miguel Locks. The total cost to repair
CORONADO as a result of the damage was $820,492. Initially, temporary
repairs were conducted to remove debris and install additional
structure to the damaged areas to continue operating at sea, until the
ship was able to conduct more permanent repairs. Permanent repairs were
completed during CORONADO's Post Shakedown Availability (PSA). Lessons
learned from prior LCS ships transiting the Panama Canal are being
incorporated to mitigate the risk of recurring instances of the damages
referenced above. For instance, prior to the transit of the Panama
Canal, both LCS 6 and LCS 8 had a temporary fendering system installed
to provide additional mooring fender strengthening. Permanent
Independence variant improvements to protect against ship damage in the
canal and in port include strengthening for fendering and tug loads.
This improvement will be accomplished during PSA for LCS 6 through LCS
12 and in line construction on LCS 14 and follow. The decision for the
point of incorporation for each of these improvements is based upon
available funding, and considerations for minimizing schedule
disruption and significant amounts of re-work in the construction yard.
In addition to addressing hull strengthening issues, a delegation from
the Navy has held on-going meetings with the Panama Canal Authority
(ACP), most recently on February 7, 2017 to discuss lessons learned and
actions that could be taken by the ACP to mitigate or eliminate damage
to LCS ships during canal transits. The February 2017 meeting was very
productive and Commander, FOURTH Fleet is codifying the agreements
reached in a letter to the ACP. [See page 32.]
______
RESPONSE TO QUESTION SUBMITTED BY MR. BYRNE
Admiral Rowden. The following table summarizes all known incidents
of ships sustaining damage while transiting the Panama Canal:
----------------------------------------------------------------------------------------------------------------
SHIP Hull Number Date of Incident Incident
----------------------------------------------------------------------------------------------------------------
USS TORTUGA-----------------------LSD 46----------------13 Feb 06----------------Allision-----------------------
----------------------------------------------------------------------------------------------------------------
SWIFT HSV 2 02 Apr 07 Allision
----------------------------------------------------------------------------------------------------------------
USS HALYBURTON FFG 40 16 Nov 07 Grounding
----------------------------------------------------------------------------------------------------------------
USNS COMFORT T-AH 20 21 Jul 09 Allision
----------------------------------------------------------------------------------------------------------------
USNS DAHL T-AKR 312 03 Jan 10 Allision
----------------------------------------------------------------------------------------------------------------
USNS 1st LT JACK LUMMUS T-AK 3011 10 May 10 Allision
----------------------------------------------------------------------------------------------------------------
USS PASADENA SSN-752 25 Aug 11 Allision
----------------------------------------------------------------------------------------------------------------
USS INDEPENDENCE LCS 2 15 Apr 12 Allision
----------------------------------------------------------------------------------------------------------------
USS CORONADO LCS 4 23 Feb 14 Allision
----------------------------------------------------------------------------------------------------------------
USS BARRY DDG 52 09 Feb 16 Damage to Flight Deck Nets
----------------------------------------------------------------------------------------------------------------
[See page 36.]
=======================================================================
QUESTIONS SUBMITTED BY MEMBERS POST HEARING
December 8, 2016
=======================================================================
QUESTIONS SUBMITTED BY MRS. HARTZLER
Mrs. Hartzler. In your written testimony you stated that the
revised Independent Review Team (IRT) implementation plan focuses on
one delivery vehicle with the current MCM package sonar; however, the
FY17 NDAA Conference report requires a review of synthetic aperture
sonar technologies for the MCM package. Please provide the subcommittee
the following information:
Does the Navy plan to test and evaluate any additional
conventional or synthetic aperture sonar technologies as part of its
revised IRT implementation plan briefed to the committees in September
2016?
In light of the Conference Report requirement (section
1071), does the Navy intend to revise its September 2016 implementation
plan for testing sonar technologies for the MCM package?
Has the Navy considered all available synthetic aperture
sonar technologies to include those from our ally navies?
How many conventional and synthetic aperture sonar
technologies does the Navy plan to test to meet the requirements of the
FY17 NDAA and to ensure the success of the MCM package?
Admiral Rowden. The Navy has selected the Common Unmanned Surface
Vehicle as the tow vehicle for the minehunting sonar as part of the MCM
Mission Package. The Navy continues to conduct testing and evaluation
of synthetic aperture sonar technologies through existing program of
records (POR).
Does the Navy plan to test and evaluate any additional conventional
or synthetic aperture sonar technologies as part of its revised IRT
implementation plan briefed to the committees in September 2016?
Yes, additional direct testing and evaluation of synthetic aperture
sonar technologies is being conducted through existing programs of
record (POR).
The AQS-20C production configuration of the towed sonar
is conducting sub-system testing.
The AQS-24C towed sonar and the Surface Mine
Countermeasure Unmanned Underwater Vehicle (SMCM UUV) POR containing
the Knifefish Engineering Design Model (EDM) are both currently
undergoing in-water developmental testing.
The AQS-24C sensor configuration for the MH-53E
helicopter is undergoing production testing with an anticipated
completion date of July 2017.
In addition to these POR efforts, the Navy has
coordinated with and sent observers to the UK Royal Navy through
technology exchange agreements to participate in ongoing evaluations of
the Thales sonar system towed by both the ATLAS Elektronik and Thales
unmanned surface vehicles.
In light of the Conference Report requirement (section 1071), does
the Navy intend to revise its September 2016 implementation plan for
testing sonar technologies for the MCM package?
No, the current test and evaluation approach is sufficient to
provide a sound technical and operational assessment to support the IRT
Implementation for the MCM mission package and the Congressional
reporting requirements.
Has the Navy considered all available synthetic aperture sonar
technologies to include those from our ally navies?
Yes, the Navy has evaluated foreign produced systems and continues
through technology exchange agreements to monitor ongoing allied
efforts of the most mature systems that have potential application for
the MCM mission package. The most mature foreign systems under review
are produced by ATLAS Elektronik and Thales, both of which are being
assessed by the UK Royal Navy.
How many conventional and synthetic aperture sonar technologies
does the Navy plan to test to meet the requirements of the FY17 NDAA
and to ensure the success of the MCM package?
The current Navy plan assesses a total of six (6) sonar
technologies that will inform the final configuration of the MCM
mission package: 1) AQS-20C configuration with a synthetic aperture
sonar, a digital gap filler sonar, and a high frequency wide band
forward looking sonar is the primary candidate at present. 2) AQS-24C
configuration with a high speed synthetic aperture sonar and high
frequency wide band rear looking sonar. 3) Knifefish UUV with low
frequency broad band synthetic aperture sonar. 4) AQS-20A configuration
with conventional real aperture sonar. 5) AQS-24B configuration with
high speed synthetic aperture sonar. 6) Thales towed sonar with
synthetic aperture sonar.*
---------------------------------------------------------------------------
* U.S. Navy controlled testing is not planned but performance data
will be captured for comparison via existing data/technology exchange
agreements.
---------------------------------------------------------------------------
______
QUESTIONS SUBMITTED BY MS. SPEIER
Ms. Speier. Your written testimony states that ``the department
chose a frigate concept based on a minor modified LCS in lieu of more
capable--and more expensive--small surface combatant options.''
What are the key mission capabilities that the Navy identified and
prioritized as needed for a potential frigate in its recent study of
alternatives?
Ms. Mackin. Our report GAO-16-356, ``Littoral Combat Ship: Need to
Address Fundamental Weaknesses in LCS and Frigate Acquisition
Strategies'' described our evaluation of the Navy's Small Surface
Combatant Task Force's efforts to meet the Secretary of Defense's
direction to study alternatives to the LCS that would provide
capabilities ``consistent with a frigate''. As we reported, the task
force identified eight concepts for the capability of the small surface
combatant (SSC)--known as capability concepts--representing the range
of operationally acceptable mission alternatives. These are shown
below.
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
.epsThe task force found that a minor modified LCS (of either
variant) was the least technically feasible of meeting any of the eight
capability concepts among all of design categories that it considered.
As shown, 7 of the 8 concepts included local surface warfare (meaning
the ship can defend other ships against threats and attack targets
within a medium range); 5 feature local anti-air warfare (meaning the
ship can defend other ships against air-based threats within a medium
range), and 5 also featured anti-submarine warfare capability. However,
based on direction from senior Navy leaders, the task force ultimately
focused on creating ship design concepts based on capability concept 7,
which does not include a local anti-air warfare capability.
As part of its methodology, the task force solicited feedback from
fleet operators. In these fleet engagement sessions, Navy operators
were given a set of performance capabilities--like speed, range, over-
the-horizon surface warfare capability, and others--and were told to
prioritize them. All of the concepts featured some degree of multi-
mission capability--meaning that the ship can conduct more than one
type of mission (e.g., surface warfare and anti-submarine warfare) at
one time. The fleet operators consistently ranked local anti-air
warfare and over-the-horizon surface warfare with anti-submarine
warfare as their highest priorities for a future SSC. However, as noted
above, capability concept 7 does not have local anti-air warfare
capability. Other trade-offs were also made. For example, the fleet
operators also highly valued an endurance range of 4,000 nautical miles
and an ability to remain underway for 30 days. The chosen capability
concept will have a range of less than 4,000 nautical miles, and only a
14 day underway duration.
As shown below, the task force found that an LCS with minor
modifications was the least feasible at meeting the Navy's identified
capability requirements, meaning that LCS with minor modifications was
the least capable option considered.
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
.epsMs. Speier. How does GAO rank-order the capabilities and design
characteristics of each of the ships that the Navy considered during
its study to determine how to develop the frigate platform, and how
does GAO assess the capabilities of the ship that the Navy ultimately
chose as the baseline for the frigate?
Ms. Mackin. GAO does not have the information to conduct a detailed
analysis such as this, because the task force used statistical analysis
software that GAO does not possess to assess the most likely cost and
characteristics of over 19 million potential ship designs. Since new
designs provide the most flexibility, the Navy would be able to
identify many potential new design configurations to meet any set of
SSC requirements. For existing designs, the task force analyzed 23
designs, but its supporting workpapers do not contain adequate
information for a rank-ordering since limited information is presented
about each option and the relative cost.
We found that the task force considered both new and existing ship
design options that were more capable than the LCS with minor
modifications than the Navy ultimately selected. According to task
force documentation, the inherent space, weight, power, and cooling
constraints of the LCS with minor modifications limited the extent of
changes that could be accommodated. With modifications, the task force
found that other existing designs could provide additional capability,
including local anti-air warfare. For example, the task force
identified that an LCS with major modifications and a modified U.S.
Coast Guard National Security Cutter--which, like LCS, is also
currently in production--could both provide a full multi-mission
capability, would provide greater weight and other margins which would
allow for future upgrades, and have greater range and underway days.
The task force also found that most of the existing designs considered
could accommodate survivability improvements above those found on LCS.
Ms. Speier. Does GAO believe that the minor modified LCS will or
will not meet the combatant commander's stated operational requirements
for a frigate? Why, or why not?
Ms. Mackin. A frigate based on an LCS with minor modifications will
not meet all the requirements prioritized by the fleet operators during
engagement sessions. The results of the fleet engagement process imply
that the fleet prioritized local anti-air warfare capabilities which
are not included in ability concept 7, and the Navy subsequently based
its frigate requirements on a reduced capability concept 7, so it may
no longer be reflective of the concepts developed in consultation with
the fleet. An LCS with minor modifications could not achieve these
requirements. The task force also determined that a minor modified LCS
could not be modified to the level of vulnerability resistance like
that of a legacy FFG 7 class frigate due to LCS weight and design
constraints that would prevent adding more physical structure. If a
greater level of vulnerability resistance was desired, a minor modified
LCS would also not meet these requirements.
The task force found that a minor modified LCS (of either variant)
was the least technically feasible of meeting any of the eight
capability concepts among all of design categories that it considered.
According to the task force's report, the Navy would need an LCS with
major design modification, a new design, or a modified (non-LCS)
existing design if it wanted an SSC with multi-mission surface warfare,
anti-submarine warfare, and local anti-air warfare capability and/or
major survivability improvements. An LCS with minor modifications could
not support these upgrades. Moreover, a minor modified LCS will not
fully address all lethality and survivability concerns raised by the
former Secretary of Defense.
The planned modifications to LCS will offer some improvements
(multi-mission capability and some survivability improvements related
to reducing the susceptibility of the ship to attack). However, beyond
the addition of an over-the-horizon missile that is also under
consideration for addition to LCS, the proposed frigate does not add
any new offensive anti-submarine or surface warfare capabilities that
are not already part of LCS.
Ms. Speier. Were other options considered that were more capable at
meeting all of the Navy's capability priorities other than LCS?
Ms. Mackin. The task force identified a number of designs that were
more capable than the minor modified LCS, including a major modified
LCS (of either variant), a modified National Security Cutter, and some
foreign frigate designs. New designs--since they are by definition the
most flexible--could also be developed to achieve the higher levels of
capability sought by the Navy. However, Navy leaders, based on
affordability concerns and a desire not to have a production break at
the current LCS shipyards, ultimately recommended the minor modified
LCS.
Ms. Speier. What role did industrial base considerations have in
the frigate study and in the Navy's choice of using a minor modified
LCS for the frigate baseline?
Ms. Mackin. In a November 2014 memo in which it recommends
selecting a minor modified LCS, senior Navy leadership highlighted the
speed with which they believe a minor modified LCS based frigate could
be fielded as a deciding factor in its deliberations, as well as a
desire to maintain stability in the LCS industrial base and vendor
supply chain. The task force report stated that this option could
achieve full capability faster than the others, and with a neutral
impact to the industrial base (i.e., the LCS shipyards). In particular,
the task force wrote that a minor modified LCS design would provide the
shortest timeline to first ship delivery and that a major modified LCS
and new and existing designs would result in production gaps of 1 to 5
years. Due to the scope and timeframe for our audit, we did not verify
these task force findings.
[all]