    [Senate Hearing 114-28, Part 2]
    [From the U.S. Government Publishing Office]

                                                      S. Hrg. 114-28, Pt. 2

    DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR
                   2016 AND THE FUTURE YEARS DEFENSE PROGRAM

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

                                    HEARINGS

                                   BEFORE THE

                          COMMITTEE ON ARMED SERVICES
                              UNITED STATES SENATE

                        ONE HUNDRED FOURTEENTH CONGRESS

                                 FIRST SESSION

                                       ON

                                    S. 1356

         TO AUTHORIZE APPROPRIATIONS FOR FISCAL YEAR 2016 FOR MILITARY
    ACTIVITIES OF THE DEPARTMENT OF DEFENSE, FOR MILITARY CONSTRUCTION, AND
       FOR DEFENSE ACTIVITIES OF THE DEPARTMENT OF ENERGY, TO PRESCRIBE
       MILITARY PERSONNEL STRENGTHS FOR SUCH FISCAL YEAR, AND FOR OTHER
                                    PURPOSES

                                   ----------

                                     PART 2

                                    SEAPOWER

                                   ----------

                           MARCH 11, 18 AND 25, 2015

             Printed for the use of the Committee on Armed Services

    [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

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

                                   -------------

                           U.S. GOVERNMENT PUBLISHING OFFICE
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    _________________________________________________________________________________________
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                          COMMITTEE ON ARMED SERVICES

                         JOHN McCAIN, Arizona, Chairman

    JAMES M. INHOFE, Oklahoma            JACK REED, Rhode Island
    JEFF SESSIONS, Alabama               BILL NELSON, Florida
    ROGER F. WICKER, Mississippi         CLAIRE McCASKILL, Missouri
    KELLY AYOTTE, New Hampshire          JOE MANCHIN III, West Virginia
    DEB FISCHER, Nebraska                JEANNE SHAHEEN, New Hampshire
    TOM COTTON, Arkansas                 KIRSTEN E. GILLIBRAND, New York
    MIKE ROUNDS, South Dakota            RICHARD BLUMENTHAL, Connecticut
    JONI ERNST, Iowa                     JOE DONNELLY, Indiana
    THOM TILLIS, North Carolina          MAZIE K. HIRONO, Hawaii
    DAN SULLIVAN, Alaska                 TIM KAINE, Virginia
    MIKE LEE, Utah                       ANGUS S. KING, JR., Maine
    LINDSEY GRAHAM, South Carolina       MARTIN HEINRICH, New Mexico
    TED CRUZ, Texas

                       Christian D. Brose, Staff Director

                   Elizabeth L. King, Minority Staff Director

                                     ______

                            Subcommittee on Seapower

                     ROGER F. WICKER, Mississippi, Chairman

    JEFF SESSIONS, Alabama               MAZIE K. HIRONO, Hawaii
    KELLY AYOTTE, New Hampshire          BILL NELSON, Florida
    MIKE ROUNDS, South Dakota            JEANNE SHAHEEN, New Hampshire
    THOM TILLIS, North Carolina          RICHARD BLUMENTHAL, Connecticut
    DAN SULLIVAN, Alaska                 TIM KAINE, Virginia
    TED CRUZ, Texas                      ANGUS S. KING, JR., Maine

                                      (ii)

                                C O N T E N T S

                                  ----------

                                 march 11, 2015

                                                                       Page

    Marine Corps Ground Modernization................................     1

    Glueck, Lt. Gen. Kenneth J., Jr., USMC, Deputy Commandant, Combat
      Development and Integration, Commanding General, Marine Corps
      Combat Development Command.....................................     5
    Dee, Thomas P., Deputy Assistant Secretary of the Navy,
      Expeditionary Programs and Logistics Management, Office of the
      Assistant Secretary of the Navy, Research, Development, and
      Acquisition....................................................     7

    Questions for the Record.........................................    43

                                 march 18, 2015

    Navy Shipbuilding Programs.......................................    51
    Stackley, Hon. Sean J., Assistant Secretary of the Navy,
      Research, Development, and Acquisition.........................    54
    Hilarides, VADM William H., USN, Commander, Naval Sea Systems
      Command........................................................    67
    Mulloy, VADM Joseph P. USN, Deputy Chief Of Naval Operations,
      Integration of Capabilities and Resources [N8].................    68

    Questions for the Record.........................................   100

                                 march 25, 2015

     Navy and Marine Corps Aviation Programs.........................   117

    Grosklags, VADM Paul A., USN, Principal Military Deputy,
      Assistant Secretary of the Navy for Research, Development, and
      Acquisitions...................................................   120

    Questions for the Record.........................................   159

                                     (iii)

    DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR
                   2016 AND THE FUTURE YEARS DEFENSE PROGRAM

                                  ----------

                           WEDNESDAY, MARCH 11, 2015

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

                       MARINE CORPS GROUND MODERNIZATION

        The subcommittee met, pursuant to notice, at 9:30 a.m. in
    room SR-222, Russell Senate Office Building, Senator Roger F.
    Wicker (chairman of the subcommittee) presiding.
        Committee members present: Senators Wicker, Ayotte, Tillis,
    Sullivan, Blumenthal, Hirono, and King.

         OPENING STATEMENT OF SENATOR ROGER F. WICKER, CHAIRMAN

        Senator Wicker. It is precisely 9:30 a.m., and this hearing
    of the Senate Armed Services Seapower Subcommittee will come to
    order.
        Before we begin, I think Senator Hirono and I would both
    like to express our concern for the seven marines and four
    soldiers missing after a helicopter crash early this morning in
    Florida. I understand that the search and rescue mission
    continues, and we are anxious to receive any news we can.
    Perhaps our witnesses might have some information about that as
    they begin their testimony.
        The Senate Armed Services Subcommittee on Seapower convenes
    this morning to examine Marine Corps ground modernization
    programs. This is the Seapower Subcommittee's first hearing for
    the 114th Congress.
        I welcome my friend and colleague from Hawaii, Senator
    Hirono, who serves as ranking member of this subcommittee. I
    look forward to working with Senator Hirono to ensure that our
    sailors and marines remain the best trained, best equipped, and
    most professional maritime fighting force in the world.
        This morning, we welcome Mr. Thomas P. Dee, Deputy
    Assistant Secretary of the Navy for Expeditionary Programs and
    Logistics Management, and Lieutenant General Kenneth J. Glueck,
    who serves as Deputy Commandant for combat Development and
    Integration. General Glueck is also the commanding general of
    the Marine Corps Combat Development Command. Our subcommittee
    thanks you, and we thank the nearly 185,000 marines who are
    operating in over 40 countries around the world for your
    service to our Nation.
        Over the past several years, the Marine Corps has been in a
    transition period moving from counterinsurgency and stability
    operations in Iraq and Afghanistan to the Marine Corps' more
    traditional role as a ready and capable rapid response force.
    This transition has been and will continue to be complicated by
    fiscal uncertainty, the prospect of sequestration, reductions
    in end strength and force structure, and challenges with combat
    vehicle modernization.
        Today, our efforts will update us on their efforts to build
    a global crisis response force of amphibious, combat, and
    tactical ground vehicles. This force should meet the Nation's
    requirements for maneuver from the sea that is technologically
    achievable and affordable. I would like our witnesses to
    elaborate on the Marine Corps' strategy for modernizing its
    vehicle fleet, including the amphibious combat vehicle, ACV,
    and joint light tactical vehicle, JLTV. I would be interested
    to learn how the Marine Corps plans to meet its ground vehicle
    requirements within current and projected budget constraints
    while still maintaining high operational capability and
    readiness.
        I understand the Marine Corps has restructured the
    amphibious combat vehicle and will release a request for
    proposals this year. I remain concerned that substituting
    wheeled armor personnel carriers for amphibious track vehicles
    could erode the Marine Corps' amphibious assault capability,
    the capability that separates the Marine Corps from the Army.
    So perhaps we will hear testimony about that.
        I look forward to hearing how the Marine Corps ACV
    acquisition strategy will reduce fielding time and deliver
    vehicles incrementally.
        Now, with regard to the JLTV, I am encouraged by the
    progress that the Marine Corps and the Army have made on this
    multi-service program. The JLTV program office is scheduled for
    milestone C and the low rate production contract award in this
    fiscal year. The Marine Corps budget request supports the
    achievement of initial operational capability in fiscal year
    2018. I trust that our witnesses will reassure this
    subcommittee that the Marine Corps JLTV design and requirements
    are stable. Such stability would ensure that the Marine Corps
    will be able to afford to field this important replacement for
    our High Mobility Multipurpose Wheeled Vehicle's (HMMWV) as
    soon as possible.
        With regard to acquisition of the ACV and JLTV vehicle, I
    understand that the Marine Corps relies on competition to gauge
    early on what is technologically feasible and affordable. But
    competition requires viable competitors, which we do not always
    have. So maybe we will hear about that. I would like our
    witnesses to provide their best assessment of the state of the
    U.S. industrial base for ground combat and tactical vehicles.
    Perhaps they will suggest what can be done to sustain the
    viability of our manufacturing base at the contractor and
    supply chain levels.
        Now, with regard to sequestration, the Marine Corps faces
    significant budget challenges, as do all of our Services.
    Unless Congress acts, sequestration will return in October of
    this year. And I feel like I am singing a song from 2 and 3
    years ago. As a member of both the Armed Services Committee and
    the Budget Committee, I know that tough decisions must be made
    across the Federal Government. However, I would remind everyone
    that national defense is solely a Federal responsibility.
    Defense spending is also a twofer, supporting both our national
    security and our high tech manufacturing workforce.
    Sequestration was designed to be so onerous that we would never
    even proceed to it. And frankly, it is unthinkable that having
    experienced it once, we would once again move to it later on
    this calendar year.
        The Marine Corps' budget accounts for approximately 6
    percent of the Department of Defense's (DOD) total budget. I am
    concerned that sequestration could disproportionately impact
    the Marine Corps on everything from modernization to readiness.
    As such, I hope our witnesses today will elaborate on the
    impact that sequestration will have on our expeditionary
    marines, their ability to execute our country's national
    security strategy, and the vitality of our defense industrial
    base.
        Senator Hirono.

                  STATEMENT OF SENATOR MAZIE K. HIRONO

        Senator Hirono. Thank you very much, Mr. Chairman.
        And thank you to the witnesses who are here. Thank you for
    your service.
        Mr. Chairman, I share your concerns regarding the missing
    marines and soldiers after a helicopter accident in Florida,
    and our thoughts are with the families and the members.
        Before I begin, of course, I want to acknowledge my delight
    in being the ranking member on this committee with you, Mr.
    Chairman, and I certainly look forward to working with you.
        The Marine Corps continues its transition from providing
    forces to support operations in Afghanistan and Iraq back to
    its more traditional role of a force in readiness, forward
    deployed at sea or stationed ashore, and ready for crises
    responses. This transition has been complicated unnecessarily
    and some might say even dangerously by a fiscal uncertainty
    associated with the Budget Control Act and the threat of
    sequestration, which the chairman has already highlighted.
        The broader context for this hearing, as you all know will
    carry over to our shipbuilding and aviation hearings, is much
    more challenging than just marine ground systems modernization.
    We are justifiably concerned about the synchronization,
    stability, technical achievability, and affordability of
    several long-term, complex and expensive sea, air, as well as
    land system modernization programs that are necessary to
    rebuild our amphibious capability. In this regard, several
    amphibious ship and connector modernization programs are
    essential to achieve the Navy's and Marine Corps' requirements
    for a fully capable, globally postured, and ready amphibious
    force.
        As Commandant of the Marine Corps General Joseph Dunford
    recently said, there is an amphibious ship and connector
    capability gap that we must deal with if we are to revitalize
    amphibious forces and meet global demand. Any break or weakness
    in the chain of transfer or maneuvering of land forces from
    ship to connector to shore undermines the military power we
    expect to project with amphibious operations.
        While today's focus is primarily on ground capabilities, we
    want an update from our witnesses on how the Marines' fiscal
    year 2016 request and future years defense program, FYDP, is
    synchronize to rebuild modern amphibious forces. We are
    interested in learning how the Marine Corps will develop and
    deliver combat and tactical vehicles that are technologically
    advanced and affordable. We are particularly interested in
    learning more about current and future requirements,
    capabilities, and technical feasibility for armored amphibious
    assault and how Marine plans for an end state force with as
    many as three different vehicles is justified and affordable.
        Unfortunately, we must recognize that the stability and
    achievability of the Marine Corps' carefully considered plans
    for ground system readiness and modernization is at risk if
    sequestration level cuts are triggered for fiscal year 2016 and
    beyond. We are interested to hear how sequestration at any
    point compounds challenges to the Marine Corps' size, force
    structure, readiness, and modernization programs. If necessary,
    what tradeoffs will the Marine Corps make?
        For example, we know that the Marine Corps has gotten
    smaller and may continue to reduce its end strength to meet
    Budget Control Act (BCA) caps. How will the Marine Corps
    analyze and distribute reductions to end strength and force
    structure among its U.S. and forward-stationed locations? How
    will the Marine Corps ensure sufficient readiness in its non-
    deployed forces to maintain strategic depth available for
    unforeseen contingencies? Will the Marines cancel or delay its
    new systems development programs, delay the upgrade of current
    capabilities, or both?
        And finally, we would like our witnesses to address the
    potential impact or risk on its modernization plans under
    extraordinary budgetary pressures, pressures associated with
    new or continuing support for ongoing operations around the
    world.
        Of course, our Nation could not be more proud of what the
    Marine Corps does, what our Marines and their families have
    accomplished over the past 14 years of war.
        Thank you, Mr. Chairman.
        Senator Wicker. Thank you very much.
        I note that our two witnesses have submitted a joint
    statement, and without objection, it will be included in the
    record in its entirety at this point.
        [The prepared statement of General Glueck and Mr. Dee
    follows:]

        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Senator Wicker. Which of you gentlemen would like to
    proceed?
        General Glueck. I can go first.
        Senator Wicker. General Glueck, thank you very much. And if
    you could, tell us what you know about this morning's
    helicopter crash.
        General Glueck. Well, as far as I know right now, you know,
    it is under investigation as time goes on. We know that it
    occurred just outside of Eglin Air Force Base, and it included
    both U.S. Army, I believe, special forces, as well as our
    Marine special operations forces as well. They do a lot of
    training down in that area in the panhandle of Florida, and
    from indications I heard this morning that there is potential
    that there could be a problem with weather. So that is about
    what we have at this present time, sir.
        Senator Wicker. Thank you.
        General Glueck. But thank you to both of you for your
    condolences.
        Senator Wicker. Well, we appreciate that update.
        If you will, then proceed, as you will, to summarize your
    testimony.
        General Glueck. Chairman Wicker, Ranking Member Hirono, and
    distinguished members of the subcommittee, thank you for this
    opportunity to testify before you today.
        The Marine Corps' ability to serve as our Nation's premier
    crisis response force is due, in large part, to this
    subcommittee's continued strong support, and on behalf of all
    our marines, I would like to say thank you very much.
        A forward-deployed Marine Corps provides our Nation a
    universal tool that can be immediately employed. This force can
    serve as the leading edge of the larger joint force or deploy
    and sustain itself in even the most austere of environments.
    Our ability to rapidly respond to developing crisis not only
    ensures that the combatant commanders have the right force in
    the right place at the right time, but provides national
    leaders with valuable decision space.
        To execute this mission, the Marine Corps pursues
    technologies that allow us to develop and sustain a ready,
    balanced force that is flexible, survivable, lethal, and highly
    expeditionary. Combatant commanders will task this force to
    operate across a range of military operations in smaller and
    distributed formations.
        Our modernization programs are aimed at equipping these
    forces with the necessary capabilities to achieve success no
    matter what the mission or who the adversary. As the Department
    of the Navy and your Marine Corps confront the challenges of
    budget constraints of sequestration, we are evaluating
    priorities and making hard choices that are necessary to
    maintain the right balance in capacity, capability, and
    industrial base sustainment. With the smallest modernization
    budget in the Department of Defense, the Marine Corps
    continually seeks to leverage the investments of the other
    services, carefully allocating our modernization resources to
    those investment areas which are the most fiscally prudent and
    those which promise the most operationally effective payoffs.
        Innovative warfighting and can-do leadership are hallmarks
    of our corps, but these cannot overcome the vulnerabilities
    created by our rapidly aging fleet of vehicles. Long-term
    shortfalls in modernization have a detrimental impact on
    readiness, degrade our crisis response capability, and will
    ultimately cost lives.
        We are seeking to balance the increasing costs and
    inefficiencies of maintaining legacy programs with required
    investments in modernization. Our ground vehicle modernization
    strategy is to sequentially modernize priority capabilities,
    reduce aging equipment inventories whenever possible, and
    judiciously sustain remaining equipment.
        The future security environment requires a robust
    capability to operate from the sea and maneuver ashore to
    positions of advantage. The amphibious combat vehicle, or ACV,
    is the Corps' highest ground modernization priority. This
    program, when coupled with the improvements to our existing
    fleet of amphibious assault vehicles, AAVs, generates a
    complementary set of capabilities for both littoral forceful
    entry and high-speed operational maneuver.
        In parallel with these modernization efforts, a science and
    technology portfolio is in development to continue our
    exploration for high water speed technology. These efforts will
    develop the knowledge necessary to reach an informed decision
    by the mid-2020's on the feasibility, affordability, and
    options for developing an extended range high water speed ship-
    to-shore capability.
        The second highest priority within our portfolio remains
    the replacement of a portion of our legacy HMMWV fleet. These
    trucks performed well in combat conditions, but lacked the
    maneuverability and force protection required to meet both
    current and future enemy threats. In partnership with the Army,
    the Marine Corps has sequenced the JLTV program to ensure
    affordability of the entire ground tactical vehicle portfolio.
        These Corps modernization efforts have been designed in a
    manner to ensure their affordability. However, if the budget is
    sequestered in fiscal year 2016 or beyond, it will jeopardize
    both the timing and resources required to undertake this
    strategy.
        In addition to our critical investments in mobility, the
    fiscal year 2016 budget includes a request for the next
    generation radar which will replace five of our legacy systems.
    The ground-air task-oriented radar is a multi-role, ground-
    based expeditionary radar that provides greater operational
    reach, volume, and precision to identify and track both
    friendly and hostile forces and interfaces with our Navy
    systems to project land and sea power beyond the littorals.
        A critical enabler for our future force remains our
    advanced command and control systems. As we design our force to
    operate more rapidly across greater distances, the ability to
    communicate and utilize the most up-to-date information becomes
    a critical capability gap. It is within this portfolio that we
    will begin to see the creeping costs of reduced budgets. While
    our highest priority programs are either partially or fully
    funded, the ability to maintain their currency in the future
    years is uncertain. This puts at risk our ability to conduct
    near-term and future joint and combined operations.
        The Marine Corps continues to prioritize near-term
    readiness above the other attributes of the force. However,
    that readiness must be balanced in terms of accepting risk by
    sustaining legacy systems and modernizing key programs to
    ensure effectiveness on the future battlefield. The demand for
    the expeditionary capabilities that marines provide to the
    Nation will only increase. The marines tasked with executing
    these missions will be asked to do so with the equipment
    provided by our modernization programs today, but we must be
    mindful that by sacrificing today's modernization efforts, we
    will actually be degrading our future readiness.
        Priorities reflected in the fiscal year 2016 budget are the
    modernization efforts that we must have to remain the most
    ready when the Nation is least ready. In partnership with the
    Navy, the Marine Corps look forward to working with you to
    address these issues.
        Thank you for this opportunity to be here and I look
    forward to your questions, sir.
        Senator Wicker. Thank you.
        Mr. Dee, do you have any additional testimony to add at
    this point?
        Mr. Dee. Yes, sir, if I may make a very brief opening
    statement.
        Senator Wicker. Please.

     STATEMENT OF THOMAS P. DEE, DEPUTY ASSISTANT SECRETARY OF THE
                    NAVY, EXPEDITIONARY PROGRAMS AND
    LOGISTICS MANAGEMENT, OFFICE OF THE ASSISTANT SECRETARY OF THE
                    NAVY, RESEARCH, DEVELOPMENT, AND
                              ACQUISITION

        Mr. Dee. Chairman Wicker, Ranking Member Hirono, and
    distinguished members of the subcommittee, thank you for the
    opportunity to testify before you today.
        General Glueck has highlighted the importance of our Marine
    Corps as America's expeditionary force in readiness to the
    security of this Nation, and he commented on a few of the
    priority modernization programs for which we are requesting
    funding in fiscal year 2016.
        Yesterday, the Commandant of the Marine Corps testified
    before the full committee and outlined the risks associated
    with the specter of sequestration should the Budget Control Act
    of 2011 be implemented this year or in future years.
        But regardless with what happens with sequestration this
    year or next, the Marine Corps already has the most austere
    investment budget of any service with only about 10 percent of
    their total obligation authority, or only about $2 billion,
    requested in fiscal year 2016 for the research and development
    and procurement accounts. These funds need to cover the range
    of Marine Corps ground force capabilities from combat and
    tactical vehicles to artillery and missiles, enterprise
    information technology, command and control radars, unmanned
    aerial systems, personal protective equipment, small arms,
    ammunition, generators, tents, and everything in between. With
    the need to stretch so few dollars over so many critical
    capabilities, the Marine Corps is especially conscious of
    making every dollar count and of the opportunity costs of
    making less than optimal decisions.
        So for that reason, we are committed to using every option
    in the acquisition toolbox to control costs as we deliver the
    finest equipment to our marines and balance the imperative of
    current readiness with the requirement to modernize and assure
    our future readiness. Competition, contract incentives,
    affordability caps, should-cost goals all help us to execute
    affordable modernization programs. And of course, we need
    stable and realistic requirements, and through early and
    extensive collaboration among our combat developers, our
    programmers, our engineers, and our acquisition professionals,
    we avoid pursuing the unachievable or unaffordable requirements
    that will place undue risk on our programs.
        We also need stable budgets. Over the past few years, the
    Navy and the Marine Corps team has been diligent in making
    difficult trades to balance risk within our modernization
    portfolios. Unpredictable budgets, continuing resolutions, and
    other uncertainties inhibit our ability to effectively plan and
    execute the programs that will ensure that the Marine Corps
    will remain America's expeditionary force in readiness well
    into the future.
        Mr. Chairman, thank you for the support you and your
    committee have provided and continue to provide to our Marine
    Corps. I look forward to answering your questions.
        Senator Wicker. Thank you.
        This clock in front of me says 6 minutes. So I think that
    is a good enough suggestion for us, so we will begin with 6-
    minute rounds.
        Let me start, General Glueck, with you. On the fiscal year
    2016 budget request, does that account for sequestration
    returning?
        General Glueck. Mr. Chairman, no, it does not.
        Senator Wicker. Well, I think that points up a challenge
    that we have at the subcommittee level and also as an entire
    Congress. Sequestration right now is the law of the land. I
    think we all understand that. Unless the law changes,
    sequestration is back in October of this year. If that should
    occur, what are your plans to manage risk and program
    development in that eventuality, General?
        General Glueck. Mr. Chairman, as stated yesterday by the
    Commandant and also by the Secretary of the Navy, if we do not
    deal with the sequestered budget, then we will have to go ahead
    and do mission analysis of the Defense Security Strategy. And
    based on that, then the Marine Corps would go into do a deep
    dive analysis on exactly how we best can be organized, trained,
    and equipped to be able to support the mission that we have for
    the future.
        Senator Wicker. I honestly hope that Congress is taking
    this seriously enough, but I have seen it play out before.
        How well positioned are you to do this deep dive on a
    fairly expedited basis? Because October 1st is going to be here
    before we know it.
        General Glueck. Yes, Mr. Chairman, I understand that. We
    have been working on this program for quite a while looking at
    different eventualities. But a lot of it will come down to the
    strategy and how the joint force and OSD and how we determine
    what the strategy for the future will be and how the Marine
    Corps will best fit into that for us to actually come to the
    real clarity that you are looking for.
        Senator Wicker. Mr. Dee, I was interested to hear you say
    that even without sequestration, the Marine Corps budget is the
    most austere of the services. Why is that? Is that a decision
    that we made at the congressional level or is it something that
    DOD decided we could live with? Help us understand that.
        Mr. Dee. So the Marine Corps, along with the Army, but to a
    greater extent than the Army, is reliant on the individual
    marine. So the bulk of the Marine Corps budget is expended on
    manpower costs, manpower training operations, et cetera. So
    once you pay those bills, the manpower costs and the O&M costs,
    the operating forces costs add up to about 90 percent of the
    Marine Corps budget, over 60 percent for manpower alone. So
    that only leaves about 10 percent for investment, and that is
    the primary reason why the Marine Corps' budget is so low.
        Senator Wicker. General, how is the transition going from
    the Iraq and Afghanistan counterinsurgency and stability model
    to the more traditional role as a ready and capable rapid
    response force?
        General Glueck. Thank you for that question, sir.
        I think the transition is going extremely well. You know,
    we never walked away from our amphibious roots. Even during the
    time that we were conducting operations in Iraq and
    Afghanistan, we still had our marine expeditionary units that
    were forward-stationed and forward-deployed around the world.
        As we have come back out of Afghanistan and Iraq, at this
    point what we needed was to take a look at a new strategy. And
    based on that, we wrote a capstone concept for the Marine
    Corps, which is entitled Expeditionary Force 21. That was
    signed last year in March, and that kind of laid out the
    guideline for the next 10 years of how we intend to operate
    across the range of military operations. And to this point,
    that has been highly successful.
        We were able to take that concept, Expeditionary Force 21,
    and the Commandant signed it in March of 2014. And just here in
    Bold Alligator here just last September - October, the forces
    down at II MEF and the naval forces that were assigned as well
    actually took that and moved it into actual execution. So I
    think that is a pretty strong message that we have actually
    been able to go ahead and take a strategic concept at a service
    level and be able to get it down to both the operational and
    tactical level, and it is being embraced very well.
        Senator Wicker. Thank you. I think it is a matter of where
    the emphasis is, and the capability has to be there for both.
        I have been saying this to everybody that would listen. I
    think we have had great success in Afghanistan. I do not think
    the American people perhaps understand how successful our
    operation has been there. And I would just hope that we as
    decision-makers and particularly the commander in chief as a
    decision-maker would make sure that we not leave too early
    based on a political agenda in Afghanistan and that instead, we
    do the things necessary to solidify our gains there and make
    sure that what has happened in a somewhat different but
    somewhat analogous situation in Iraq do not occur in
    Afghanistan.
        My congratulations to our outstanding troops for getting us
    where we are, and that is on the cusp of success in
    Afghanistan. Thank you very much.
        Senator Hirono?
        Senator Hirono. Thank you, Mr. Chairman.
        The fiscal uncertainty that we have been operating under
    for too many years has resulted in a chronic and increasingly
    dangerous disconnect between strategy, military requirements,
    budget estimates, appropriations, and the efficient and
    effective execution of funds to support current operations,
    build and sustain readiness, and prepare for a dangerous
    future. In fact, General, you noted at the beginning of your
    testimony that what is certain about the future is its
    uncertainty.
        I have several questions about this fiscal environment and
    how the Marine Corps will manage its way through a number of
    scenarios.
        First, either one of you can respond, General or Mr.
    Secretary. What have you learned in this environment of
    uncertainty about estimating and executing your budget to
    mitigate or build flexibility, a word that I note you used
    several times in your testimony, General, into your programs
    and achieve, as best you can, your most important priorities?
        General Glueck. Thank you for that question.
        When you look at readiness for the future, the way the
    Commandant defines it is in five pillars: the personnel unit,
    modernization of equipment, the infrastructure, and of course,
    our ability to support the combatant commanders, which is
    warfighting. So as we move forward in that, it is about
    maintaining that balance. And even in the 2016 budget, while
    there is a certain balance--we put priority, of course, in our
    near-term readiness of our forces that would be forward-
    stationed and forward-deployed. So we took reductions, of
    course, modernization and also in our infrastructure.
        What we really look forward to do in the 2016 budget and
    beyond, we would like to be able to put stability in there so
    that we can have particularly the fiscal stability for
    procurement of the weapons systems that we need to modernize
    for our force. You know, today when you look at an amphibious
    assault vehicle, it is well over 40 years old. You are looking
    at a HMMWV that is over 30 years old. I mean, those vehicles
    are old, they are tired, they need to be replaced. We will do
    what we can to go ahead and bring some of those up to an
    acceptable standard. But to be the Marine Corps that you want I
    think and our Nation needs for the future, it is time that we
    need to do some modernization. And the way we look at these
    vehicles is that they are fully complementary with one another
    for the missions that we see particularly coming from the sea.
        Senator Hirono. So, General, your priorities were for near-
    term readiness as we were in Afghanistan and Iraq, and you are
    saying that we delayed the modernization priorities for too
    long and we really need to move forward on that with your aging
    vehicles. I think that your testimony noted that the
    modernization of all of these vehicles will amount to hundreds
    and hundreds of millions of dollars. So within that context,
    how do you determine which vehicles are the most important to
    modernize, which vehicles are you going to try to get longer
    life from? You have already done those kinds of assessments?
        General Glueck. Yes, we have. We have done exhaustive
    assessments on this and worked this very, very closely.
        You know, we believe that the number one priority, as the
    Commandant has stated, is the amphibious combat vehicle, which
    is number one. We have about 1,062 AAV's that we have been
    operating for the past 40 years. Some of those amphibious
    assault vehicles we will do a survivability upgrade on, which
    will be about 392 of those vehicles. And that will enable us to
    maintain a forceful entry capability for all seven of our
    Marine Expeditionary Units, as well as our two Marine
    Expeditionary Brigades, which we are required by law to be able
    to maintain the forceful entry capability of two brigades
    simultaneously. So that 392 will address that.
        So the overall requirement that we have for our marines is
    to have armored lift for 10 battalions of infantry. With our
    AAVs, the 392 that get the survivability upgrade, they will be
    able to carry four infantry battalions. With the ACV 1.1 and
    the 1.2, they will account for an additional six infantry
    battalions. So that is where you are going to get your 10
    battalions' worth of lift to be able to take us into the
    future.
        And so we looked at these vehicles as being complementary
    in nature. It is not that they only have to be complementary
    amongst themselves, but they have to be complementary to our
    overall objective of operational maneuver from the sea. And if
    you look at the amphibious ships, you look at the connectors
    that are required to support the sea basing, it is all
    complementary in nature and it is all about having a family of
    vehicles that are tied and linked together to be able to give
    us that operational capability reach that we want.
        Senator Hirono. So I realize that that is your current plan
    right now, which does not take into account sequestration. So
    if we do not deal with sequestration in the way we should,
    which is to eliminate it, would you just then decrease the
    number of battalions? Would you just impose numbers? Would it
    be a numbers decision for you?
        General Glueck. It will actually be a capability decision.
    You know, as our Commandant has stated, we are only going to be
    as big as we can be good. That is a strong statement. And it is
    not just about numbers. It is about quality and capability of
    the force. So if we are sequestered, it will come down to
    priorities. Like I said, the number one priority would be the
    amphibious combat vehicle. At some point, what you will find is
    that programs get stretched out. You have to take cuts in other
    programs, and we are willing to do that if necessary to be able
    to meet the objectives that will come from the strategy.
        Senator Wicker. You can take another round.
        Senator Hirono. Am I done? Oh, my goodness. How time flies.
    I will go into a second round. Thank you, Mr. Chairman.
        Senator Wicker. Senator Sullivan, does this uniform look
    familiar to you?
        Senator Sullivan. Yes, Mr. Chairman. It is a sharp looking
    uniform if I do say so myself.
        Thank you, Mr. Chairman. And gentlemen, thanks for your
    testimony.
        General Glueck, I appreciate in particular the emphasis in
    your testimony, particularly during the challenging times we
    are all seeing with regard to the budget, on the frugality or
    what I like to refer to in testimony yesterday with the
    Commandant and the Secretary of the Navy as the bang for the
    buck that the Marine Corps provides. I think it is good for the
    American people to know that. It does not get out there a lot.
    I know Marines take a lot of pride in that frugality, and you
    know, the number that the Commandant mentioned yesterday, 6
    percent of the DOD budget, 21 percent of the infantry
    battalions--and it is not just the quantity. It is the quality.
    Those infantry battalions are some of the best in the world,
    and I think that is a statement that is irrefutable in my view.
        So what I would like to focus on a little bit initially is
    the rebalance to Asia and the discussion particularly with
    regard to the ground forces. And I think you know, General,
    this committee for years has been looking at some of the
    rebalancing that the Marine Corps has been doing from Okinawa
    to Guam. And as part of our oversight responsibilities, some of
    the members of this committee will be heading out to the region
    relatively soon to get a more detailed look at some of those
    issues.
        So I was just wondering from the perspective of how you
    would have us think through those issues, do you think that
    that redeployment is going well? And what are the big issues
    that you would want us to be focusing on?
        General Glueck. Sir, thank you very much for that question.
        Prior to this assignment, I was the commanding general of
    the 3rd Marine Expeditionary Force in Okinawa. So I am fairly
    conversant on that.
        Our Marines in Okinawa--you know, the mantra that we had
    for them was they need to be prepared to fight the night, and
    that would be in Korea. That is probably our most dangerous
    scenario.
        As we look at the rebalance, for us, when I got there, we
    did not even have our Unit Deployment Program (UDP). Our unit
    deployment plan had been in support of Afghanistan and Iraq
    over the years. So we lacked our infantry battalions. And
    thanks to the foresight of the Commandant, as soon as we were
    pulling out, we reconstituted those forces and put those
    battalions back into Okinawa. So that was a major step forward,
    and that was even before the shift in the strategy.
        So as you stand today, the intent is to maintain 22,500
    marines west of the International Date Line. So it comes down
    to where are those Marines going to be positioned.
        Senator Sullivan. Can I ask about that? Because, you know,
    the Commandant talked about that a little bit yesterday. You
    have the Date Line, but you also have--I was looking at a map
    yesterday. The Marines in Darwin are actually further from
    Korea than troops in Anchorage, Alaska. And I am not advocating
    yet for a Marine Corps base in Alaska, but that could be
    coming. But I mean, there is this kind of Date Line issue, but
    there is also proximity. And Darwin is pretty darned far from
    Northeast Asia.
        General Glueck. That is true. But also, as you know, Asia
    is a very big Area of Responsiblity (AOR). And if you look at
    what we had down in the southern region, we really had nothing
    at that time. You know, we started off with Darwin. We actually
    put a rifle company down there. It was the very first element
    that we stuck down there. And I think they were probably the
    most publicized rifle company in the Marine Corps history when
    they went down there. It actually disappointed the Australians
    on well behaved they were.
        So we have taken that and actually the intent is to take
    that up to about a level of about 2,500, and that is going to
    be based on the infrastructure that actually is down there
    working with our host to be able to support that. This last
    detachment that went down there or element that was there was
    in the neighborhood of about 1,200. So we are going to continue
    to increase that size to be able to take some of that pressure
    off of Okinawa.
        But you also know that down in Darwin you can only train
    for about 7 months out of the year because of the monsoon
    season that comes in there. So we are a little bit limited on
    that. But as a commander of III MEF no matter where I was going
    to put forces, whether it was going to be in Darwin or I am
    going to put them in Guam, to me it came down to operational
    capability and what you can do with that capability. You know,
    it is the marines. It is the infrastructure that supports those
    marines. It is the equipment. It is the training, the ability
    to be able to sustain yourself and proficiency, and then it is
    the strategic lift to be able to move those marines someplace
    to do something.
        So the area I think that we need to focus on here,
    particularly when you look at Darwin in particular, is what is
    the strategic lift that we are going to go ahead and tie to
    them to be able to use them as force in readiness, whether it
    is crisis response or whatever the case may be. The same thing
    with Guam. It is those five factors. So if you want to have an
    operational capability, you have got to have all of those five
    factors.
        Senator Sullivan. Thank you.
        Let me switch to another issue that has been coming up in a
    lot of the testimony, and that is the challenges in the Arctic.
    You know, the Russians are making a very bold, in many ways,
    very definitive move into the Arctic with building several new
    airfields. General Dempsey mentioned in his testimony with
    Secretary Carter recently the Russians are looking at
    increasing brigades, up to six brigades, four of which will be
    based in the Arctic. And in terms of new icebreakers, they have
    a fleet of 40, 6 new ones, 5 additionally planned. I think we
    are number five in the country in terms of icebreakers. So, you
    know, we put out pieces of paper on the Arctic while the
    Russians are literally moving very aggressively in the Arctic.
        I will just throw this out for both of you gentlemen. You
    know, I was a little disappointed to see Expeditionary Force 21
    had, I do not think, a single sentence on the Arctic. And the
    Marine Corps, as you know, General, has a proud history of
    being the kind of northern flank protector in terms of Norway
    and other places in previous OP plans.
        What are the thoughts on the Arctic, and are there any
    thoughts with regard to the Navy's budget to have an
    icebreaker? It is going to be a critical area. The Russians are
    eyeing it and moving into it, and yet we seem to be, at least
    from the Army's perspective, looking at removing combat
    brigades from Alaska, which I think would send a really, really
    bad signal to Vladimir Putin and others. So if you wish to
    comment just on your thoughts on the Arctic, both of you
    gentlemen.
        Sorry, Mr. Chairman. I went a little long.
        General Glueck. If I could on Expeditionary Force 21, when
    we wrote the document, we knew that it was going to require
    updates, and our plan is to do updates annually here and we
    have got one that is due to the Commandant here within the next
    few months. So that is one of the updates I am sure that we
    will put some retention on.
        I was just out at the Mount Warfare Center here about just
    a couple weeks ago. And that is where we do a lot of our cold
    weather training up there. And one of our companies was
    actually coming out of the field from being up there for about
    10 days and looking at the equipment. And I had an opportunity
    to talk to the commander up there as well and about the
    equipment that they have. And quite frankly, we need to do
    better. He is the actual advocate for cold weather training,
    and so I tasked him to make sure that he looks at what we need
    to be able to update ourselves to be able to have a good
    capability, a solid capability in cold weather operations and
    the training what was going to be required from the doctrine.
        Senator Sullivan. Thank you.
        Senator Wicker. Senator King?
        Senator King. Thank you, Mr. Chair.
        First, I would like to associate myself with your comments
    both today and yesterday about Afghanistan. It would be
    absolutely tragic if we squandered the success that we have
    achieved and that the Afghan people have achieved by
    prematurely pulling out according to some date on a calendar.
    To me it is equivalent of fumbling on the 5-yard line. With a
    modest additional investment and particularly of authority to
    the troops that are there, I think we can secure a really
    significantly brighter future for the people of Afghanistan. So
    I agree.
        Also, in terms of the Arctic, we have one heavy icebreaker,
    Coast Guard. We have one that is old that is essentially out of
    service, and one medium icebreaker. And that is the highway of
    the Arctic, if you think about it. And I agree with the Senator
    from Alaska. This is a major area where the Russians are moving
    very aggressively, and I think we need to take account of that,
    but also we just need to take account of the importance that
    this region is going to have both in terms of energy, commerce,
    trade, transit. They may not get all the way to Mississippi,
    but it is important to the entire country. So I agree with
    that.
        Mr. Dee, how much do the complex and arcane rules of
    procurement drive up the cost of a given piece of equipment?
    Procurement is an issue that the whole committee is concerned
    about particularly in these tight budget times. And my sense is
    that it is so complicated and arcane and so many rules that
    have to be followed that it ends up--that is how we end up with
    devices that cost twice as much as they should.
        Mr. Dee. Sir, there are a lot of rules, and there is a lot
    of oversight. Just as background, I am aware that the Secretary
    yesterday showed our DAU chart for the acquisition for how that
    works.
        Senator King. Yes. It would have made Rube Goldberg
    ashamed.
        Mr. Dee. Yes, sir.
        And those rules reflect both statute, regulation, and
    policy. So some of it begins here with statute. Some of it gets
    translated into regulation, and some of it becomes policy
    within the Department. All of those rules at whatever level we
    are putting them in are there to reduce risk in some way. There
    were instances in the past where we had overrun programs and
    waste. So everything that is in there was largely the result of
    lessons learned, that somebody is trying to make the system
    better by reducing risk and providing more oversight to make
    sure that the Department does well.
        Senator King. The road to hell is often paved with good
    intentions.
        Mr. Dee. Yes, sir. So that is part two.
        So all of these rules are in there to reduce risk, but
    there is also operational risk that we have to be able to
    balance. The rules that are in place are to reduce the risk to
    the U.S. taxpayer on wasting dollars. There is risk to the
    Marine Corps, to the operational forces of not getting capable
    equipment out there, timely equipment. We demonstrated during
    Operation Enduring Freedom (OEF) and Operation Iraqi Freedom
    (OIF) that we can deliver equipment quickly. We can deliver it
    capably, but there is a cost that comes with that and there is
    a little increased risk on the cost side of it in order to
    reduce the risk on the operational side and on the schedule
    side. So there is a way to do that.
        Again, back to the Secretary's chart that he showed
    yesterday, there are three parts to that, three layers of that.
    There is a requirements side. There is an acquisition side, and
    there is a programming and budget side to it. The best way and
    what we have begun doing within the Marine Corps--the best way
    to reduce that risk and to get things done is to have early
    collaboration between those three communities so that we are
    not pursuing very difficult and unachievable requirements so
    that the requirements community is aware of what is actually
    within the art of the possible, and that is collaboration with
    our engineers with the acquisition community, collaboration
    with the budgeteers and the programmers to ensure that what we
    are building will be good enough to meet the requirements but
    we are not stretching so far that we are introducing tremendous
    risk in terms of performance or schedule or cost.
        So the acquisition community would very much like to see
    reduced oversight and rules at whatever level, statute,
    regulation, policy. But we also know we can mitigate the risk
    that is involved in that process somewhat by better
    collaboration early on in the process.
        Senator King. Well, I am not suggesting that we should
    diminish oversight, but I just think it might be a timely
    exercise to go back and look at this structure that has been
    built up and accreted over the years and see if there is a way
    to simplify, make it a little more straightforward because the
    taxpayers are paying the cost. And again, as you say, it is a
    matter of weighing risk against cost.
        Mr. Dee. If I may, sir, on that. Within the last iteration
    of our 5000, the DOD policy on acquisition, Secretary Kendall
    included a enclosure in there to talk specifically about how to
    do things more quickly, rapid acquisition. And the trigger for
    that is some sort of urgent need, and if there is an urgent
    need, then the gates are opened to allow you to take a little
    more risk in terms of all of the policy that is in place in
    order to be able to deliver a capable system quicker to the
    force.
        Senator King. I have the greatest respect for Secretary
    Kendall. I think he is one of the most able people we have.
        According to the budget documents, most of your equipment
    maintenance, General, has come out of Overseas Contingency
    Operations (OCO) funding, and OCO funding is almost certainly
    going to go down. Does that negatively affect your ability to
    maintain your equipment?
        General Glueck. It will have an impact, yes, sir. Currently
    our request for OCO for 2016 is at $1.3 billion. But we are
    also in the process of also resetting our equipment that we are
    bringing back from Afghanistan, and that has been a good news
    story. I would have to say that our marine logisticians have
    done yeoman's work there in being able to get all of our
    equipment accounted for and get it back.
        I would like to talk just for a second on that. About 60
    percent of it has been reset today. Another 40 percent is in
    work. And we expect to have all that equipment reset by 2016.
        So we think within the budget is $365 million to go ahead
    for a reset, but we will also be looking at OCO funds to make
    up any differences.
        Senator King. Thank you.
        Thank you, Mr. Chairman.
        Senator Wicker. General Glueck, Darwin is farther away from
    our most likely hotspot in Alaska and it is not operational
    half the time. Was Darwin a good decision?
        General Glueck. I think that Darwin was a good decision at
    the time because we wanted to increase our presence down in
    that particular region of the Pacific, and I think that is
    going to meet our objectives in the future. I think there are
    ways that we can probably mitigate the distance. Out in III
    MEF, sir, we do about 75 exercises, activities, operations in
    any given year, for example. One of the largest exercises we do
    is in Cobra Gold in Thailand, for example. And that is in that
    general vicinity as well. If you look at the number of forces
    that we send down there for that particular exercise, which is
    the largest joint combined exercise in the world today, there
    is mitigation in risk that you accept just sending them down
    there as well. I think as long as we have the strategic lift
    tied to those marines, then we will be able to go ahead and
    move them to the right place at the right time.
        Senator Wicker. How soon can you get those troops to Korea?
        General Glueck. Well, it would be a function of strategic
    lift to be able to get it down there. So it would be a
    prioritization within the theater commander to say that I want
    C-17 lift to go down to Darwin to pick our marines and move
    them up to Korea. But they would not be the first responders,
    sir. They would be the marines that are coming out of Okinawa
    and the 31st MEU would be your first response.
        Senator Wicker. But how soon?
        General Glueck. How soon? I would have to take that for the
    record and actually put a little bit of thought to it. But I
    would say that you are not talking weeks. If strategic lift is
    identified, you are talking in a matter of about 48 hours.
        [The information referred to follows:]

        Your question regarding the decision to place Marines in Darwin,
    Australia, considering the considerable distance and travel time to the
    Korean peninsula, is a good one. To understand our force posture in the
    Pacific, we must understand the variety of missions in that theater and
    the troops laid against each one.
        To your direct question, assuming no advanced notification or
    preparation, it would take up to two weeks from the identification of
    need to Marines from Darwin arriving in Korea. However, as I mentioned,
    based on prioritization and availability of strategic airlift assets,
    actual transit time is closer to 48 hours. However, the mission of the
    Marines assigned to Marine Rotational Force-Darwin (MRF-D) is not
    oriented exclusively toward responding to a contingency on the Korean
    peninsula. The MRF-D as an assigned force to III Marine Expeditionary
    Force (MEF), is just one unit available to respond to contingency on
    the Korean Peninsula. In fact, the MRF-D is focused primarily on
    Theater Security Cooperation (TSC) exercises to build partner capacity
    and interoperability throughout the South Pacific and to respond to
    crisis or contingency operations in that region. This mission has been
    successful and we are looking to expand the size of that unit, and
    increase the scope of their mission. It is true that parts of Alaska
    are geographically closer to Korea than Darwin is, but basing the unit
    there would present additional challenges to the execution of their
    primary mission.
        The Marines of the 31st Marine Expeditionary Unit (MEU), 4th Marine
    Infantry Regiment, and 12th Marine Artillery Regiment are a combination
    of forward stationed and rotational forces available for immediate
    crisis response. These units maintain readiness and availability to
    meet the deployment and employment requirements associated with the
    Korea operation and contingency plans. They are based in a more
    geographically advantageous position, have strategic lift assets
    assigned to them, and focus on training and equipping for that mission.
    In an unclassified setting, I can confidently say that their response
    time is significantly shorter.
        Having all of these units as well as the majority of III MEF forces
    west of the International Date Line allows us to service the myriad
    missions that this enormous theater requires.

        Senator Wicker. And what is the plan for monsoon season?
        General Glueck. Well, for monsoon season, we do not send
    the marines down there.
        Senator Wicker. All right.
        General Glueck. They look for other training opportunities
    within the Pacific region.
        Senator Wicker. Mr. Dee, I mentioned concerns about
    substituting wheeled armored personnel carriers for amphibious
    track vehicles. Could you response to that, and could you
    respond to this statement? The Marine Corps has evolved over
    the last 3 years from a cancelled EEV to a similar concept for
    high water speed ACV. Studies conducted during that time by the
    Marine Corps and armored vehicle makers have led to the
    conclusion that while high water speed is technologically
    feasible, it remains unaffordable. So instead, we are going to
    pursue the 1.1 version of ACV. Would you respond to that and
    enlighten the subcommittee?
        Mr. Dee. Yes, sir. Let me take the second part first.
        So EFV was cancelled back in 2011 for affordability and
    some concerns about reliability that then translated into
    affordability issues. Following the cancellation, ACV was
    initiated. We did an analysis of alternative to see what
    potential solutions we may have for the replacement of the AAV.
    A very in-depth study was initiated. It was conducted by the
    executive director of MARCORSYSCOM, along with scientists,
    engineers, operators, budgeteers, again the collaboration I
    talked about earlier that took place over the course of a year.
    We looked at all of the trades would be required in order to
    produce a high water speed vehicle. We have demonstrated it is
    technologically feasible. We have prototypes from the EFV that
    are available to ride and get up on plane and go very fast. But
    the trades that were required to get there, not just in terms
    of cost, but largely in terms of the protection levels that you
    can get----
        Senator Wicker. Where can we see one of those?
        Mr. Dee. They are out in San Diego, Camp Pendleton, sir. We
    have prototypes.
        Senator Wicker. Great.
        General Glueck. If I could. We also have one out--or a
    couple out at the Nevada facility, out in Nevada.
        Mr. Dee. So we do that extensive study and we looked at the
    trades, and high water speed is achievable. High water speed
    would require us to accept lesser levels of protection, and
    with the lessons learned from Afghanistan and Iraq with
    improvised explosive devices, that was not a trade that the
    Marine Corps was willing to make right now. It also requires
    lesser levels of lethality in terms of the amount of weight. It
    all comes down to weight and how much Reserve buoyancy can you
    get out of a vehicle. So how much more armor can you put on it?
    How many more weapons can you carry? How big of a weapon can
    you carry, et cetera? So with all of that and the imperative to
    replace the AAV, the decision was made in order to focus on
    the, as General Glueck had mentioned earlier, the ground
    mobility capabilities of the vehicle, and we will forego for
    now the high water speed capability in order to begin having a
    suitable replacement for the AAV, with a decision down the
    road, technology investments to continue in looking at how to
    mitigate some of those trades that we had to make, a decision
    down the road, a decade down the road probably on revisiting
    the high water speed vehicle.
        On the capabilities of the wheeled vehicle versus the track
    vehicle. So a lot has changed in time since the AAV was
    designed and built. The capabilities from heavy industry on
    wheeled vehicles has improved tremendously with things like
    independent suspension and variable inflatable tires, et
    cetera, and all kinds of computer controls. We have tested. We
    had the Nevada Automotive Test Center build a demonstrator
    vehicle that we actually tested in actual conditions for an 8-
    wheeled vehicle to serve initially as an MPC prototype and now
    is an ACV prototype. Performance was very good, and for a
    medium-weight vehicle, it was the equivalent basically to what
    we would be able to get out of a track vehicle. It may not be
    as maneuverable or as mobile in off-road conditions in certain
    cases as is the M-1 tank, but it is as certainly as
    maneuverable as we are going to get in that class of vehicle.
        Senator Wicker. So it does not erode our capability.
        General Glueck. No, sir. It actually improves our
    capability, sir, from an operational perspective. You know, we
    found, if I could--what we found that high water speed was
    technologically feasible, we could get a track vehicle and get
    it up on plane and it could go 25 knots. But all the
    development that we were putting into it--we were trading away
    operational capability ashore. So we were designing a vehicle
    that was optimized to operate on the water but not optimized
    for 90 percent of its mission that was going to be ashore. And
    I am convinced that the decision that we have made to move
    forward on the ACV wheeled vehicle is the right answer for us
    to be able to provide the greatest capability in terms of
    maneuver, fire power, as well as survivability to our marines
    ashore.
        Senator Wicker. I did not know there was enough water in
    Nevada to test something like----
        General Glueck. They do most of the ground testing there,
    and then actually the water testing is done around the
    coastlines. But I have seen some of the water testing by a
    couple of the major manufacturers, and so far they have been
    very good. They have actually focused not on just the 1.1
    version. They have really focused their builds on the 1.2
    version because they want the entire contract. And that would
    be able to give us the capability to have the same or better
    swim capability than the AAV currently has.
        Senator Wicker. I would like to see that.
        Senator Blumenthal?
        Senator Blumenthal. Thanks, Mr. Chairman.
        I want to shift a little bit in terms of modernization to
    one of the key challenges in my view, although it may not
    involve hardware in the most direct sense, and that is the
    downsizing of our force and how we develop and retain the key
    skills that are necessary to operate the new machinery that we
    are discussing here. How do we keep the best and the brightest
    at a time when the Marine Corps is going to go from--I am bad
    on numbers, but I think it is 202,000 down to 182,000, more or
    less, and go from, obviously, a wartime mission to one that
    intermittently involves conflict but not the same kind of
    ongoing constant challenges, which may have an impact on the
    interests of our marines to stay in the Corps. So that is, I
    realize, a broad question, but I would welcome any thoughts you
    have about it.
        Mr. Dee. Let me talk about the civilian workforce, and I
    will defer the marines to General Glueck.
        So we do have critical skills especially in our maintenance
    world in our depots for civilians. The Marine Corps maintains
    two depots, one in Barstow, California, one in Albany, Georgia.
    And we need to maintain a certain level of work to ensure that
    we have the core capabilities necessary, the skills in order to
    maintain and reset the equipment that we talked about earlier.
    So the current program has sufficient work going into those two
    depots in order to do that through the FYDP. Of course, we will
    become challenged, as in everything else, should those numbers
    diminish tremendously and we cannot maintain the maintenance.
    So we are concerned about the technical skills, the
    craftsmanship of our civilian workforce, especially in terms of
    maintenance, and we are working to maintain the core levels of
    work at those two depots.
        General Glueck. Thank you for that question, sir.
        You are correct. We are coming down from 202,000. And the
    announcements that we have done is that an optimized Marine
    Corps to be able to meet crisis response and contingency
    response challenges that we face today and to be able to
    maintain a one-to-three dwell for our marines--so every 7
    months you are gone, you have 3 months back before you go
    again--is at 186.8. Currently for fiscal year 2016, we are
    looking at a force that is going to be at 184,000. In fiscal
    year 2017, we will be continued down to 182,000.
        So what that means to the force is that we are going to be
    on--many of our low-density, high-demand capabilities we have
    out there, the marines that are part of that--they will be on
    one-to-two or less dwell. So some of our B-22 squadrons, some
    of our deploying infantry battalions, and those that are
    deployed the heaviest will be at a one-to-two dwell.
        The Commandant's focus is going to be on maintaining
    quality over capacity. So, you know, he is looking to make sure
    that we can maintain the right leader-to-lead ratios as we
    downsize to make sure that we do not give up--if we give up
    capacity, but we make up for it in quality. And so, like I
    said, he is willing to focus on the Marine Corps is only going
    to be as big as we can be good.
        Senator Blumenthal. And let me drill down a little bit if I
    may. As a personnel management function, how does the Marine
    Corps plan to accomplish that goal?
        General Glueck. Well, there is an effort ongoing right now
    to make sure that we get the right leadership and at the right
    levels. For example, one of the critical areas that the
    Commandant is most concerned with, both in the infantry
    battalions and our flying squadrons, is where are the
    sergeants. Where are those mature men and women that we need to
    lead the infantry squads as well as to be the critical quality
    inspectors that we have within the squadrons and the mechanics?
    There are a lot of requirements out there, and what we are
    finding right now is that probably the majority are not where
    they need to be for one reason or another. And so he has got an
    effort on track right now, and he is personally involved to
    make sure that we can identify how do we improve this
    capability in the leadership and get them in the right place.
        Senator Blumenthal. Thank you. Thank you very much. Thank
    you both for your service.
        Senator Wicker. Thank you, Senator Blumenthal.
        Senator Hirono?
        Senator Hirono. Thank you.
        I know we had quite a bit of discussion regarding ACV 1.1.
    From what I got from the discussion is that what I have been
    told was more of an interim system, the ACV 1.1, because it
    will not be in the strict sense a fighting vehicle. It will
    have limited swimming capability. It may not carry a full
    infantry squad because the previous vehicles would carry 14
    marines, and the ACV 1.1 will carry 10 and on an equal lift
    basis weigh more and take up more space on transport ships.
        So I did have a question about how the Marine Corps is
    approaching the tension between capability and affordability
    between the tracked ACV and the wheeled what I have been
    informed is a less capable ACV 1.1. Would you like to just go
    over that again for us briefly?
        General Glueck. I could. Let me talk about the capability
    of tracks versus wheeled technology. Out at the Nevada test
    facility--and I would invite any of the members that would like
    to come out to go out there--we have every combat vehicle that
    we have in the inventory, to include the expeditionary fighting
    vehicle and then the prototypes. In fact, the Commandant was
    just recently out there a little bit over a month ago and had
    an opportunity to experience the ride and go through some
    pretty rough terrain and see the mobility and then the
    capabilities of the ACV in particular.
        I have been out there about four times now. And we have had
    five different vendors that have brought their vehicles out
    there that we have had an opportunity to actually experience
    the ride, maneuverability, and see the capability that they
    have.
        And from all the analysis that we have done, we are not
    giving away any capability whatsoever by going from track to
    wheeled technology. Actually we are gaining capability. We are
    gaining survivability. So with an AAV, for example, you are
    going to have a survivability that is going to be less than
    1.0. You know, these ACV's, for example, with the technology,
    the V-hull and double V-hulls that they have underneath, their
    ability to go ahead and raise and lower the height of the
    vehicle, you are going to get survivability in excess of 2.0.
    So it is double the survivability. These vehicles will
    capability--because of the independent drives that they have on
    them, will be able to go out and hit an IED and actually blow
    off, say, two wheels on one side of the vehicle and continue to
    drive and drive out of the threat area. So I think our marines
    are going to be very well served with the amphibious combat
    vehicle.
        Now, to get to the decision, if I could, of how we went to
    1.1, what we did was, you know, we had a program out there
    several years ago. It was the Marine Personnel Carrier Program
    that we were working with, and we had to cancel that due to
    affordability as well because it was competing against the EFV.
    And the decision was made to go ahead and stand that program
    down. It was not cancelled but we stood it down.
        And so what we have focused on for 1.1 was how fast can we
    get a good vehicle out there that is going to be good enough
    that is non-developmental and be able to meet our basic
    requirements. And that is what we looked at for 1.1 so that
    enabled us to go ahead and streamline the acquisition process.
    So we did not have to start with a blank sheet of paper. We
    were able to start at where we were due to a lot of support
    from Mr. Kendall and others. We were able to save several years
    there as we moved forward.
        So the initial buy, which will be about 204 vehicles, are
    just focused on being personnel transporters. And right now the
    threshold for that was for 10 because that is what the MPC was.
    But what we are finding is that the industry is really focused
    not on the threshold for 1.1. They are focused on the objective
    of 1.1 and the objective of 1.2 because they want the full
    contract. So a lot of them--instead of focusing on just putting
    10 seats for the 1.1, most of them are focused on 12 to 13
    seats, for example. The swim quality--instead of focusing on
    the lower threshold requirement of, say, a level of 2 feet
    significant wave height, they are actually focusing on building
    the vehicle to be at 3. So we are actually going to be getting
    a more capable vehicle from the beginning. The 1.2--the next
    follow-on was to go ahead and address some of those
    improvements we wanted to have but also focus on mission-
    specific capabilities such as command and control, logistics,
    recovery vehicles, and perhaps even fire power.
        Senator Hirono. So, General, it would be inaccurate to
    think of the ACV 1.1 as a less capable than the tracked ACV
    from everything you just told us.
        General Glueck. That is my assessment, yes, ma'am.
        Senator Hirono. General, I assume you are familiar with the
    advanced amphibious assault vehicles that China appears to have
    developed. One version is a tank with a 105 millimeter gun. The
    other is an infantry fighting vehicle with a 30 millimeter
    cannon. Both are reported to be high water speed vehicles like
    the terminated EFV. China is also building its first set of
    large amphibious ships that compare to the United States
    classes like the LPD-17. What is your assessment of the Chinese
    amphibious assault vehicles and how do you rate their
    performance in the water, their fire power, mobility, and
    protection levels? Mr. Secretary, if you would like to answer.
        Mr. Dee. Yes, ma'am. I mentioned earlier the exhaustive
    study that we had done last year over the course of a year with
    all the trades on all of the different capabilities we were
    looking for in terms of protection, water speed, personnel
    carrying capacity, lethality, et cetera. As part of that study,
    we looked at all of the vehicles that are being manufactured in
    the world today, to include those Chinese vehicles that you
    mentioned. And the advertised capabilities--our assessment--
    exceed their actual capabilities in a lot of cases, including
    the water speed claims that they have had. So we took a look at
    those, worked with the intelligence community to be able to
    gain an assessment of where these different vehicles stand. And
    we think we accepted the right path, and we do not think there
    is a magic formula for building in high water speed, very well
    protected and very lethal amphibious combat vehicle.
        Senator Hirono. Thank you.
        Senator Wicker. General Glueck, before I turn to Senator
    Sullivan for a second round, since Senator Hirono has brought
    this up again, the wheeled armored personnel carriers will have
    to be lifted ashore. And the amphibious track vehicles could
    swim to shore. How much of a concern is that?
        General Glueck. The 1.1 version of the ACV was designed to
    be able to swim from shore to shore. Okay? But we are finding
    that it actually could much better than that.
        Senator Wicker. So that is not a concern.
        General Glueck. Well, if I could, sir.
        Senator Wicker. Okay.
        General Glueck. What we are finding is that in fact the
    vehicle is going to be able to go from ship to shore or from
    another connector to shore. What we have found is that with the
    current A2AD threat, for example, when we were looking at high
    water speed for the expeditionary fighting vehicle, we
    envisioned that a fleet would be--probably the sea base would
    probably be 25 miles off the coast, and they would be able to
    probably adjust the sea base to bring it in to be able to
    launch so that 25 knots for a vehicle meant that the Marines
    were not going to be in there longer than about 1 hour.
        What we are finding today is that with the threat,
    depending on where you go, that sea base may be actually pushed
    out further. So what we find is that even a self-deploying
    vehicle is probably not going to be able to launch from 65
    nautical miles. It is going to have to have the assist of some
    high speed connector.
        It is really, like I said, a family of vehicles in how we
    bring these together. Even the current AAV, if I cannot get any
    closer, I am going to go ahead and put those maybe on a joint
    high-speed vessel, for example. So the joint high-speed vessel
    could pick up, say, 25 AAV's or ACV's because we can do at-sea
    arrival in assembly now with some of these more capable ships,
    and then be able to go ahead and maneuver that force with high
    speed and range to be the place that we want to go ahead and
    apply that pressure. So what we see is that in the future,
    connectors are going to be highly critical for both self-
    deployers as well as those that maybe are not self-deployers,
    such as like the joint light tactical vehicle.
        Senator Wicker. Thank you for clearing that up. And Senator
    Sullivan, I apologize for making you wait. You are recognized
    for a second round.
        Senator Sullivan. Thank you, Mr. Chairman.
        Secretary Dee, I wanted to follow up on the Arctic question
    that I had asked previously and, again, kind of the broader
    perspective from the Navy's standpoint in terms of not only in
    military and seeing what the Russians are doing, which again is
    very clearly some concrete, significant moves into the Arctic
    with a whole host of infrastructure building, new bases, new
    brigades, new icebreakers. I mean, it is a move. And we are
    doing nothing essentially. We have a 13-page Arctic strategy
    that nobody seems to be paying attention to in my view.
        And then there is the whole issue that is critical to the
    Navy's overall function in terms of keeping sea lanes open and
    commerce. You know, we obviously have done an incredible job
    over the decades doing that, but we have a new sea lane and
    lane of commerce that is opening up in the Arctic, as you are
    well aware.
        Yesterday--I mentioned this, the question about icebreakers
    for the Navy. And by the way, all the SecDef, Chairman of the
    Joint Chiefs--they are all saying, hey, we recognize this is a
    pretty significant development, and we need to pay attention to
    it. And yet, when I asked about icebreakers and looking at
    that, the Chief of Naval Operations (CNO) essentially said,
    hey, that is not our department. That is Homeland Security.
    That is Coast Guard. I have the utmost respect for him and the
    rest of the people serving in the Navy and the Marine Corps,
    but I thought that was kind of a bureaucratic answer. I mean,
    these are leaders of the country.
        You do not have to answer it here, but I would like the
    Navy collectively to get back to us and just answer the simple
    question. Is it in the national interest of the United States,
    given the developments in the Arctic, to have an additional
    heavy icebreaker? I am not interested in whose budget it is or,
    sorry, that is not my--the issue of national security is
    everybody's issue. And so I would just like an answer that is
    not bureaucratic that answers the question, and if you can get
    back to us on that, maybe check with the CNO on that issue. I
    think that is important.
        Mr. Dee. Yes, sir. We will coordinate with OPNAV staff and
    get back to you.
        [The information referred to follows:]

        Current Navy capabilities are sufficient to meet near-term
    operational needs. The Navy recognizes, however, that the opening of
    the Arctic Ocean has important national security implications and fully
    supports the U.S. Coast Guard's (USCG) efforts to modernize its
    icebreaking fleet and increase Arctic capabilities. The USCG Cutter
    POLAR STAR's recent reactivation will provide the U.S. with heavy
    icebreaker capability for about another seven to ten years. POLAR STAR,
    along with the medium icebreaker USCG Cutter HEALY, provide the minimum
    capability necessary to address the Nation's near term icebreaking
    needs and will provide the USCG time to assess longer term national
    needs and requirements.
        In accordance with the U.S. Navy Arctic Roadmap, in the near-term
    the Navy will refine or develop the necessary strategy, policy, plans
    and requirements for the Arctic Region. Additionally, the Navy will
    continue to study and make informed decisions on pursuing investments
    to better facilitate Arctic operations.

        Senator Sullivan. Great.
        General Glueck, I wanted to follow up on the issue of
    training. You mentioned you were at Bridgeport recently, and I
    think that that is an amazing place for training for all U.S.
    military, whether it is the Marine Corps or others. You know,
    certainly one of the hallmarks of the Marine Corps--and
    Bridgeport is an example of that--is tough, severe training.
    You know, there is a lot of discussion I think on these
    committees on the best way to take care of our troops. I think
    the Marine Corps has really focused on the best way to take
    care of our troops is train them as hard as they can so when
    they have to go fight wars for the country, they come home
    alive. That is the best way to take care of our troops.
        You know, the mantra that is the Army and when you talk
    about Korea, no more ``Task Force Smiths,'' I think that is
    always important to keep that in mind because as a country, we
    have not done a great job historically of downsizing. We have
    forgotten the importance of training.
        I just wanted to ask you, given your previous positions and
    your current role, do you see the focus even in severe budget
    times on hard training closed with ``destroy the enemy'' that
    is the hallmark of the Marine Corps--is that something that we
    are still able to do with these budgets? And also, do you get
    interference in some ways from civilians who maybe have a
    different focus? Maybe they are focusing on other areas because
    I think sometimes that tough training is lost on some people on
    how important that is.
        And then from a different angle, I will just mention
    something in my own personal experience as a reservist who
    relinquished command recently of a unit in the Reserves. There
    does seem to be an increasing amount of mandates that come down
    to units, particularly on the Reserve side. You need to do a
    class on this. You need to do a class on that. Do you think we
    are kind of overwhelming our units with mandates from higher
    headquarters and forgetting that there is only so much time to
    actually focus on the infantry skills that are the hallmark of
    the Marine Corps that are so important, not only the Marine
    Corps but to the defense of our Nation?
        General Glueck. Well, Senator, thank you very much for that
    question. And training continues to be one of our hallmarks.
        You know, I had an opportunity. Yesterday I had breakfast
    with Golf Company at The Basic School (TBS). They graduate here
    in about 10 days. And we made the point to them just how
    important training is, and they have just come out. They call
    themselves like the frozen company because they have just been
    through 6 months of some pretty severe conditions.
        But it really is about training, realistic training, and we
    put a very high priority on that to make sure that all our
    units get the training that they need. So we are not going to
    back away from that.
        As far as any kind of interference, the only interference
    you have sometimes, you know, depending on where you are
    training. We have training challenges even in Okinawa. We have
    training challenges wherever we go in the world. But we can
    work around them. We are able to do that and still be able to
    accomplish not only our individual marine's training
    requirements, the unit training requirements, but also our
    joint and coalition training requirements as well.
        So I feel good at where we are. We are going to continue to
    put resources towards that, particularly in the areas of live
    and virtual training.
        Senator Sullivan. How about mandates on the----
        General Glueck. We call it ``rocks in the rucksack.'' We
    keep giving them more rocks and putting them in the rucksack.
        Senator Sullivan. The rucksack is getting heavier.
        General Glueck. It is getting heavier and heavier. In fact,
    I just put out an all Marine notification here just within the
    last couple weeks giving the commanders the ability to go ahead
    and reduce some of those requirements. The Commandant has now
    said that as commanders--you know, we hand-select you to be a
    lieutenant colonel, colonel command, you know, general officer
    commanders--that you will have the ability to go ahead and
    prioritize what some of these that you have to comply with, as
    long as they are Marine Corps standards or Marine Corps rules,
    and others that we can go ahead and put a lower requirement.
        Senator Sullivan. Great. I am really glad to hear that is
    happening.
        Thank you.
        Senator Wicker. Senator Blumenthal?
        Senator Blumenthal. Thanks, Mr. Chairman.
        I know that this question will sound heretical and maybe
    even disrespectful. So please forgive me.
        Senator Wicker. But you have our attention.
        [Laughter.]
        Senator Blumenthal. If I am explaining to a Connecticut
    constituency or constituent who is wondering about why we are
    doing amphibious assault vehicles, the 1.1 and 1.2, why we are
    thinking about that type of vehicle--we have all seen in the
    movies and so forth the use of these vehicles in the past.
    Where right now could you envision--if I want to give an
    example of where these vehicles might be useful, might be
    essential, can you give me some scenarios, even if you cannot
    refer to a country by name, how I would explain to my
    constituent the need for this vehicle as a priority? And you
    have identified it as a priority for the Marine Corps today.
        General Glueck. Well, thanks for that question.
        You know, when you look at our forward-stationed, forward-
    deployed marines today, those are the ones that the combatant
    commanders are going to turn to when you say, hey, I got a
    crisis, and you are going to address that crisis with today's
    force and you are going to do it today. So it is what you have
    out there to be able to operate. So those forces are going to
    be operating across the entire range of military operations. So
    these vehicles apply whether you are doing humanitarian
    assistance, disaster relief when the port is closed or has been
    destroyed that you have to come ashore. You know, we have seen
    that even in our own country down in New Orleans where we had
    some of our amphibious tractors that actually were saving lives
    for people that were stranded. So I mean, they have
    applicability across the entire range of military operations.
        The example that you use of, let us say, an Iwo Jima,
    Tarawa that is burnt into our brain housing groups about
    amphibious assault--that is not the way we want to conduct
    business. Okay? If you look at it from a renewable warfare
    philosophy perspective and also our ship-to-objective maneuver
    concept that is out there, it is about finding the gaps in the
    seams within the enemy's defenses out there, and that is where
    you want to attack.
        So, for example, when I gave the example of the joint high-
    speed vessel, we still do not have a ramp to be able to launch
    from, but we got S&T efforts looking at that. But instead of
    the enemy thinking that you are going to be coming at the
    center of a beach, or whatever the objective is, we are going
    to go ahead and maneuver around. When we find those gaps in the
    seams where they are weak, because they cannot be strong
    everywhere, if you refer back to Sun Tzu and whatnot, we will
    find those and there will be niches within that armor that we
    are going to be able to exploit.
        Senator Blumenthal. Would it be against an enemy that is
    technologically disadvantaged because in the world of drones
    and other kind of air threats to amphibious combat vehicles
    that are essentially exposed for some period of time, I would
    assume that a more modern equipped enemy would have some
    capability to endanger those forces?
        General Glueck. Yes, sir. It comes down to setting the
    conditions. And if you are going to do an amphibious assault
    operation in a major amphibious campaign, we are not going to
    be working for the Marine Corps. We are going to be working for
    our joint force commander. And so we are going to be looking at
    all the capabilities he has throughout his joint force that
    will be able to help us to set the conditions that are going to
    be required because there will be certain conditions that are
    going to be required.
        We just did a war game, our service war game, down in
    Norfolk 2 weeks ago and looked at in a couple scenarios what
    would be required to be able to set conditions for us to
    actually move an amphibious force in close enough to shore to
    be able to launch. And we have the capabilities within the
    joint force and within the naval force to be able to set those
    conditions. But it is over a certain place at a certain time,
    not across an entire theater, but to be able to accomplish the
    military objectives that we will have.
        Senator Blumenthal. Thank you very much.
        Senator Wicker. Thank you, members of the subcommittee. And
    thank you to our distinguished witnesses.
        Senator Hirono and I have consulted and agreed to submit
    the remainder of our questions for the record. Other members
    will be given that opportunity.
        And so if there is nothing further----
        Senator Hirono. Mr. Chairman, if I could just make one
    comment. I know that the marines represent just about 6 percent
    of the DOD budget, and so you really do have to leverage the
    investments of other services. And I commend you for those
    efforts and collaborating and making sure that you get the
    resources you need in collaboration with our other services so
    that you can meet your mission. I want to thank both of you for
    that.
        Senator Wicker. Thank you, Senator Hirono.
        I think it has been a very good discussion. I am very
    impressed with our two witnesses.
        If there is nothing further, this hearing will be
    adjourned. Thank you.
        [Whereupon, at 10:55 a.m., the subcommittee adjourned.]

        [Questions for the record with answers supplied follow:]

                  Questions Submitted by Senator Kelly Ayotte
                                   ammunition
        1. Senator Ayotte. Mr. Dee and Lieutenant General Glueck, on March
    10, 2015, the Commandant testified specifically about a shortfall in
    TOW missiles, Javelin missiles, and HiMARS rockets. How critical is
    this shortfall? What are the consequences of that shortfall?
        Mr. Dee. and Lieutenant General Glueck. The fiscal year 2016 budget
    request underfunded the procurement of some ammunition accounts in
    order to fund higher service priorities. Based on the fiscal year 2016
    submission, planned procurement, and annual training expenditures with
    no adjustment in future budgets the Marine Corps, by fiscal year 2020
    the inventory average of all TOW missile variants will decline to 47
    percent; Javelin Missiles will decline to 37 percent of required
    inventory and; HB11 Guided Missile Launch Rocket System-Alternate
    Warhead will only reach 24 percent of planned procurement.

        2. Senator Ayotte. Mr. Dee and Lieutenant General Glueck, does the
    Department's fiscal year 2016 budget request fully address this
    shortfall? If not, what kind of shortfall remains even if Congress
    fully funds the Department's 2016 request?
        Mr. Dee. and Lieutenant General Glueck. No, the DOD's fiscal year
    2016 response does not fully address the shortfall. However, the Marine
    Corps has included both Javelin and TOW missiles on its FY16 Unfunded
    Priorities List (UPL). If the UPL becomes funded, it will still not
    make these accounts whole, but it does bring them to an acceptable
    level of risk to account for contingency response, crisis response, and
    training usage. It included a request for $77.5M for Javelin and
    $145.5M for TOW missiles. These funds will replace expiring inventory
    as well as those expended in training and contingency operations, and
    manage missile inventory over the its life cycle to ensure sufficient
    inventory is available for training and operations.
        To expand on the above information, the fiscal year 2016 budget
    request underfunded the procurement of some ammunition accounts in
    order to fund higher service priorities. Based on the fiscal year 2016
    submission, planned procurement, and annual training expenditures with
    no adjustment in future budgets the Marine Corps, by fiscal year 2020
    the inventory average of all TOW missile variants will decline to 47
    percent; Javelin Missiles will decline to 37 percent of required
    inventory and; HB11 Guided Missile Launch Rocket System-Alternate
    Warhead will only reach 24 percent of planned procurement.
        Units will continue to deploy fully trained, often at the expense
    of home station unit training. MEU and SPMAGTF Landing Force
    Operational Reserve Materiel (LFORM), the stocks maintained aboard
    selected amphibious warfare ships to provide support for embarked
    troops in contingencies, are complete to meet our mission of crisis
    response. However consistent underfunding and expenditure of the War
    Reserve to fulfill training requirements has significantly impacted our
    ability to respond to the most stressing contingency scenario. Without
    change by fiscal year 2020, the Marine Corps would not have the
    inventories required to support the most stressing major contingency.
                        high water speed technology r&d
        3. Senator Ayotte. Mr. Dee and Lieutenant General Glueck, in your
    prepared joint statement, you wrote that ``a science and technology
    portfolio is being developed to explore a range of high water speed
    technology'' for the Marine Corps. We have a company in New Hampshire--
    Juliet Marine--that has developed at their own expense a vessel with a
    cutting edge propulsion system that utilizes advanced applications of
    super cavitation technology. Are you both aware of Juliet Marine's
    Ghost boat and its super cavitation propulsion system?
        Mr. Dee and Lieutenant General Glueck. The Marine Corps is aware of
    the GHOST vessel produced by Juliet Marine. At this time the Marine
    Corps does not have a requirement for this particular vessel.

        4. Senator Ayotte. Mr. Dee and Lieutenant General Glueck, have
    representatives from the Marine Corps met with Juliet Marine to learn
    more?
        Mr. Dee and Lieutenant General Glueck. The Office of Naval Research
    (ONR), as the Navy and Marine Corps Science and Technology (S&T)
    agency, has met with Juliet Marine on a few occasions, most recently in
    February 2015 to conduct an on-site review of current status of the
    Ghost vessel. Following those reviews ONR concluded that the design
    does not offer benefits beyond other Small Waterplane Area Twin Hull
    (SWATH) designs and incorporates engineering complexities that raise
    major concerns about reliability.
                            amphibious ship program
        5. Senator Ayotte. Mr. Dee and Lieutenant General Glueck, the
    fiscal year 2016 budget seeks research and development funding for the
    LX(R) program and funding for a 12th LPD-17 class ship. If the Navy
    receives this research and development funding, the amphibious force
    will grow to 34 ships. Is 34 the right number of amphibs?
        Mr. Dee and Lieutenant General Glueck. The Chief of Naval
    Operations and the Commandant of the Marine Corps have determined the
    force structure to support the deployment and employment of 2 MEBs
    simultaneously is 38 amphibious warfare ships. Understanding this
    requirement, in light of fiscal constraints faced by the nation, the
    Department of the Navy has agreed to sustain a minimum of 33 amphibious
    warfare ships. However, that agreement did not account for the addition
    of the 12th LPD that Congress so generously provided which has been
    included in the 2016 Report to Congress on the Annual Long-Range Plan
    for Construction of Naval Vessels. The plan notes an increase of the
    minimum amphibious fleet force structure requirement to 34 ships, which
    will be reviewed during the next Force Structure Assessment. While the
    Department has accepted the risk associated with the fiscally-
    constrained force, worldwide COCOM demand is more realistically defined
    at about 54.
        It should be noted that, the 34 ship force accepts risk in the
    arrival of combat support and combat service support elements of the
    MEB, but has been determined to be adequate in meeting the needs of the
    naval force within today's fiscal limitations. This inventory level
    also provides the needed capacity for a forward presence and a MEB/
    Expeditionary Strike Group (ESG) to respond to a crisis or contingency
    within 25 days.

        6. Senator Ayotte. Mr. Dee and Lieutenant General Glueck, what is
    the Marine Corps' requirement for amphibs?
        Mr. Dee and Lieutenant General Glueck. The Chief of Naval
    Operations and the Commandant of the Marine Corps have determined the
    force structure to support the deployment and employment of 2 MEBs
    simultaneously is 38 amphibious warfare ships. Understanding this
    requirement, in light of fiscal constraints faced by the nation, the
    Department of the Navy has agreed to sustain a minimum of 33 amphibious
    warfare ships. However, that agreement did not account for the addition
    of the 12th LPD that the Congress so generously provided and which is
    accounted for in the most recent 30 year shipbuilding plan, bringing
    the total to 34. Additionally, COCOM demand is more realistically
    defined at about 54.
        It should be noted that, the 34 ship force accepts risk in the
    arrival of combat support and combat service support elements of the
    MEB, but has been determined to be adequate in meeting the needs of the
    naval force within today's fiscal limitations. This inventory level
    also provides the needed capacity for a forward presence and a MEB/
    Expeditionary Strike Group (ESG) to respond to a crisis or contingency
    within 25 days.

        7. Senator Ayotte. Mr. Dee and Lieutenant General Glueck, what is
    the impact on our national security and Marine Corps combat
    capabilities if we are short on amphibs?
        Mr. Dee and Lieutenant General Glueck. Shortfalls in amphibious
    warship inventory have multiple negative effects. This must be viewed
    in light of a two faceted problem, inventory and availability. A
    decreased inventory has negative effects on both overall capacity and
    maintenance. For instance, our existing inventory of 30 ships at
    current operational availability rates, due to maintenance, will only
    yield 21 ready amphibious warships. This puts the nation at risk of
    being unable to embark the 2 MEB assault echelon required for a
    forcible entry capability. Further, as ships are stressed due to
    increased use that would not be necessary at full inventory levels,
    they require more maintenance, which compounds the availability
    problem.
        The Chief of Naval Operations and the Commandant of the Marine
    Corps have determined the force structure to support the deployment and
    employment of 2 MEBs simultaneously is 38 amphibious warfare ships.
    Understanding this requirement, in light of fiscal constraints faced by
    the nation, the Department of the Navy has agreed to sustain a minimum
    of 33 amphibious warfare ships. However, that agreement did not account
    for the addition of the 12th LPD that the Congress so generously
    provided and which is accounted for in the most recent 30 year
    shipbuilding plan, which brings the number to 34. Additionally,
    Combatant Commander Demand is more realistically defined at about 54.
        However, even this 34 ship force accepts risk in the arrival of
    combat support and combat service support elements of a Marine
    Expeditionary Brigade (MEB), but has been determined to be adequate in
    meeting the needs of the naval force within today's fiscal limitations.
    This inventory level also provides the needed capacity for a forward
    presence and a MEB/Expeditionary Strike Group (ESG) to respond to a
    crisis or contingency within 25 days. Shortfalls also negatively affect
    our ability to train. Conducting amphibious operations with our joint
    services is not just a matter of putting Marines on Navy ships. Those
    units must have the opportunity to operate with each other during their
    workup to establish relationships, tactics, techniques, procedures, and
    build interoperability.
                                   __________
                  Questions Submitted by Senator Dan Sullivan
                             asia-pacific rebalance
        8. Senator Sullivan. General Glueck, can you describe how the
    Marine Corps is continuing to support the Asia-Pacific Rebalance?
    Please comment on the Marine Air Ground Task Force operating from
    Darwin, Australia and the plan to base an additional Marine Air Ground
    Task Force in Guam.
        Lieutenant General Glueck. The Marine Corps is supporting the Asia-
    Pacific rebalance by continuing to work towards completing our
    distributed laydown which is more politically sustainable,
    geographically distributed, and operationally resilient than our
    current disposition. This includes continuing to work towards the
    establishment of MAGTFs around the Asia-Pacific, in Guam, and in Darwin
    Australia.
        The Darwin rotational MAGTF will conduct the 4th rotation this
    summer, a Phase II deployment of about 1,200 Marines built around an
    infantry battalion with attachments including an Air Combat Element
    detachment and a Logistic detachment. The deployment will be from April
    to October, coinciding with the dry-season in Darwin. The end-state for
    the Darwin MAGTF is a rotational presence of a 2,500 Marine MAGTF,
    again built around a battalion with attachments, including a larger Air
    Combat Element and a Logistics Combat Element than the current Phase II
    rotation.
        Guam will be home to 4700 Marines. Guam forces will be capable of
    forming a MAGTF. They will consist of 1797 PCS Marines and 2979 UDP
    Marines, and include the MEB Command Element. In addition, we will be
    building training ranges to support the readiness to the Marines who
    are permanently stationed aboard Guam, and those who are there as part
    of the Unit Deployment program. These ranges will also address a
    current PACOM shortfall of ranges in WesPac and be 830 percent funded
    by the Government of Japan.
        Progress continues on AAFB north ramp projects that facilitate
    current and future training and the eventual relocated ACE. We are on
    track for a Record of Decision in the coming months which will allow us
    to break ground on the Main Cantonment and Live Fire Training Range
    Complex.
                         marine rotational force-darwin
        9. Senator Sullivan. General Glueck, can you update the
    subcommittee on Marine Rotational Force-Darwin, which will conduct
    exercises and training on a rotational basis with the Australian
    Defense Force? I understand the intent in the coming years is to
    establish a rotational presence of up to a 2,500-person Marine Air
    Ground Task Force in Australia.
        Lieutenant General Glueck. This year we will execute the fourth
    rotation of the MRF-D. This rotation will be our second Phase two
    rotation and take place from April-October 2015. Phase two consists of
    an infantry battalion with attachments, an Air Combat Element,
    consisting of 4 CH-53E helicopters, and a logistics detachment. All
    totaled the MRF-D will comprise approximately 1,200 Marines. While
    deployed, the Marines live and work at Robertson Barracks, and the
    Royal Australian Air Force base in Darwin, Australia. The MRF-D
    conducts unilateral training as well as bilateral training with the
    Australian Defense Forces. The MRF-D will participate in Talisman Saber
    2015 and Exercise Koolingang during their deployment as well as other
    smaller exercises and training events in the Northern Territory.
        Our goal is to establish a rotational presence of a 2,500 Marine
    MAGTF in Darwin. The gradual increase in the size of the MRF-D is
    dependent on a number of factors, facilities availability, a Marine
    Corps sourcing solution for the forces and equipment as well as the
    necessary funding to enable the growth of the MRF-D. In working toward
    this goal we are continuing to work with Australia to ensure
    requirements will be met prior to incrementally deploying a larger MRF-
    D rotation and the establishment of the full 2500 Marine MAGTF.
                           arctic training in alaska
        10. Senator Sullivan. General Gluek, given the increasing interest
    in the Arctic can you tell me what cold-weather and mountainous
    training the Marines already do?
        Lieutenant General Glueck. The Marine Corps Mountain Warfare
    Training Center (MCMWTC), Pickel Meadows, CA remains the only
    Department of Defense Command dedicated to the integration of
    warfighting elements at medium to high altitudes (MCMWTC elevations
    range from 6,800' to 11,200') in complex, compartmentalized, and
    mountainous terrain in all weather conditions utilizing military
    mountaineering skills in order to enhance a unit's ability to shoot,
    move, communicate, sustain, and survive in mountainous regions of the
    world. MWTC conducts unit and individual training courses to prepare
    USMC, Joint, and Allied Forces for operations in mountainous, high
    altitude, and cold weather environments in support of the Regional
    Combatant Commanders.
        The Marine Corps conducts our service level exercise, Mountain
    Exercise (MTX), 6 times per year. This training is focused on an
    infantry battalion (1100 Marines) from individual skills through
    battalion operations. MCMWTC has an established table of organization
    (TO) and table of equipment (TE) to provide permanent support. As a
    part of the TO, on site instructors teach tactics, Marine Corps Cold
    Weather Infantry Kit (MCCWIK), track plan, arctic sentry, defensive
    positions, long range movements, camouflage/concealment, casualty
    evacuation, patrolling, offensive operations, defensive operations and
    ambushes. The MCMWTC is the only command in the DOD, that teaches
    Animal Packing, Special Operations Horsemanship, and Military Skiing as
    approved formal schools Programs of Instruction (POIs). The MCMWTC can
    berth up to 1,100 personnel, and trains an infantry battalion with Air
    Combat Element and Logistics Combat Element support for each MTX. The
    MCMWTC conducts formal schools for individuals and battalion training
    in summer and winter mountain operations. The training emphasis is
    focused on enhancing overall combat capability. Marines at the Center
    are also involved in testing cold weather equipment and clothing, and
    developing doctrine and concepts to enhance our Corp's ability to fight
    and win in mountain and cold weather environments.
        MWTC also runs 14 Training and Education Command (TECOM) approved
    Formal School POIs for military mountaineering. The graduates of these
    courses then apply their new skills as they execute special duties in
    support of their battalion. MWTC also incorporate Special Operation
    Forces (SOF), company sized OpFor, Intelligence, Surveillance, and
    Reconnaissance (ISR), and Simulated Close Air Support (SIMCAS) into
    every MTX. It's the largest formal force-on-force exercise in the
    Marine Corps.

        11. Senator Sullivan. General Gluek, has any thought been given to
    training in the JPARC in Alaska?
        Lieutenant General Glueck. Yes, consideration has been made for
    training at JPARC. When the unique attributes that JPARC provides are
    required, we are enthusiastic in with working with other services to
    use training space that will allow us to leverage those opportunities.
    However, due to ranges, training environments, robust training aids
    which are already in place, and significant instructor staff
    capabilities we have found the Marine Corps Mountain Warfare Training
    Center (MCMWTC) to be an excellent option for our mountain and cold
    weather training.
        Additionally, in light of today's fiscally constrained environment,
    MCMWTC has been our primary and most cost effective option. Any part of
    the 1stMarine Division, one third of the USMC's Ground Combat Element
    (GCE), can get to MWTC in a day. It is very costly to get an infantry
    battalion to Alaska, so much so that Army Rangers have been sending
    companies to our Mountain Training Exercise (MTX) at MCMWTC for the
    last year and intend to continue doing so for the coming years.
                              readiness challenges
        12. Senator Sullivan. General Glueck, senior Marine Corps leaders
    have mentioned that some of units are at an ``unacceptable level of
    readiness. What does that mean, exactly, for ground combat battalions,
    aviation squadrons, logistic units and command elements? Can you give
    us some context in terms of readiness of personnel, equipment,
    training, etc?
        Lieutenant General Glueck. The Marine Corps is the Nation's Ready
    Force, a force capable of responding to crises anywhere around the
    globe at a moment notice. The Marine Corps deploys ready forces to meet
    today's crisis with today's force . . . today. Deployed units are
    ready; however, approximately half of non-deployed units are at
    unacceptable levels of readiness--namely, while these units can perform
    some missions they are not sufficiently resourced and trained to
    perform the entirety of their core mission sets. Maintaining the
    readiness of deployed units is heavily reliant on personnel and
    equipment resources resident within non-deployed units. Consequently,
    not all home station ground combat battalions, aviation squadrons,
    logistic units, and command elements are trained to mission standards
    in all core essential competencies--such as amphibious operations. The
    paucity of operationally available amphibious shipping precludes many
    Marine units from training to standard in amphibious operations. Home
    stationed units are expected to be in higher states of readiness since
    they would surge to unexpected major contingencies or unforeseen
    crises. Sequestration would force the Marine Corps to significantly
    degrade the readiness of home station units.
        Currently, non-deployed units receive the training they require
    prior to undertaking their next deployment. But, a return to Budget
    Control Act level funding will challenge the Marine Corps' ability to
    properly equip and train its units. BCA and sequester resulted in the
    loss of 400 skilled artisans from aviation depots that contributed to
    maintenance backlogs--in particular, F/A-18 aircraft. Aircraft
    maintenance backlogs exacerbated aircraft availability for home station
    training. Less aircraft leads to lower flight hours, lower aircrew
    proficiency, and higher aircraft utilization rates that further
    contribute to increased aircraft inductions to the depots. This all
    leads to lower aviation readiness.
        Although all major equipment has returned from Afghanistan, the
    Marine Corps continues its reconstitution of the whole-of-force after
    over a decade of sustained conflict. The Marine Corps will not take an
    operational pause to reconstitute; rather, as war-torn equipment is
    repaired, returned back to units, and subsequently employed
    operationally, the Marine Corps will continue to develop and field
    equipment. The evolution of operational maneuver from the sea and ship-
    to-objective maneuver requires developing a complimentary portfolio of
    ground combat and tactical vehicle capabilities, such as sustaining a
    portion of the decades old amphibious assault vehicle and fielding its
    intended replacement--the Amphibious Combat Vehicle.
                                  ice breaking
        13. Senator Sullivan. Mr. Dee and Lieutenant General Glueck, what
    are the obstacles to adding icebreakers to the Navy's fleet, especially
    given the Navy's Arctic responsibility to keep Arctic sea lanes open?
        Mr. Dee and Lieutenant General Glueck. Congress assigned
    responsibility for icebreaking to the U.S. Coast Guard per 14 U.S. Code
    Sec.  2-Primary duties, which states, ``the Coast Guard shall develop,
    establish, maintain, and operate with due regard to the requirements of
    national defense, aids to maritime navigation, icebreaking facilities,
    and rescue facilities for the promotion of safety on, under, and over
    the high seas and waters subject to the jurisdiction of the United
    States.''
        The Navy recognizes that the opening of the Arctic Ocean has
    important national security implications and fully supports the U.S.
    Coast Guard's (USCG) efforts to modernize its icebreaking fleet and
    increase Arctic capabilities.

        14. Senator Sullivan. Mr. Dee and Lieutenant General Glueck, with a
    non-bureaucratic answer that shifts the responsibility to the
    Department of Homeland Security, how is the Navy going to acquire
    additional icebreaking capacity in the future and what will they do if
    they do not get it?
        Mr. Dee and Lieutenant General Glueck. Current Navy capabilities
    are sufficient to meet near-term operational needs. The Navy
    recognizes, however, that the opening of the Arctic Ocean has important
    national security implications and fully supports the U.S. Coast
    Guard's (USCG) efforts to modernize its icebreaking fleet and increase
    Arctic capabilities. The USCG Cutter Polar Star's recent reactivation
    will provide the U.S. with heavy icebreaker capability for about
    another seven to ten years. Polar Star, along with the medium
    icebreaker USCG Cutter Healy, provide the minimum capability necessary
    to address the Nation's near term icebreaking needs and will provide
    the USCG time to assess longer term national needs and requirements.
        In accordance with the U.S. Navy Arctic Roadmap, in the near-term
    the Navy will refine or develop the necessary strategy, policy, plans
    and requirements for the Arctic Region. Additionally, the Navy will
    continue to study and make informed decisions on pursuing investments
    to better facilitate Arctic operations.
                  ``expeditionary force 21'' and arctic issues
        15. Senator Sullivan. General Gluek, ``Expeditionary Force 21''
    does not contain a single mention of the word ``arctic.'' When the
    Marine Corps updates ``Expeditionary Force 21,'' what does the Corps
    plan to include about the Arctic?
        Lieutenant General Glueck. The Marine Corps maintains its legacy to
    ``fight in any clime and place'' and will be ready to operate in the
    arctic when needed. We are ready to provide naval expeditionary forces
    anywhere the Navy sails. Marines maintain a requisite level of cold
    weather skills by training at the Mountain Warfare Training Center in
    Bridgeport, CA. This facility maintains subject matter experts and
    instructors in cold weather operations, and trains both specially
    trained Mountain Leaders as well as entire units in these critical
    skills. We further develop our capability by participating in other
    cold weather exercises and training. These include USNORTHCOM, State of
    Alaska, and Canadian exercises in addition to our yearly support of
    USEUCOM's exercise COLD RESPONSE in Norway.
        While you are correct that Expeditionary Force 21 does not
    specifically address arctic operations, it should be noted that
    Expeditionary Force 21 is intended as a foundational capstone concept
    as opposed to an operational or strategic plan. As such, the tenets and
    concepts within are designed to apply to all environmental
    possibilities. Crisis and contingency response capabilities must be
    able to handle any climate in which there is a need for the Marines.
    Both EUCOM and NORTHCOM Areas of Responsibility (AOR), which comprise
    the entirety of the arctic region, are specifically addressed. The
    Marines will continue to provide forces ready to operate in extreme
    cold environments to Combatant Commanders.
        Additionally, we will continue to integrate our efforts with our
    fellow sea services. For instance, we have requested that US Coast
    Guard ice breakers in development be built with aviation landing decks
    capable of receiving the MV-22, an aircraft whose range, speed, and
    versatility was specifically designed to support operations in the vast
    reaches of arctic and desert environments.

        16. Senator Sullivan. General Gluek, given that we only have a 13-
    page Arctic strategy, how detrimental is not having extensive
    guidance--as you have in other AORs--to give clear Arctic direction for
    the Corps?
        Lieutenant General Glueck. The Marine Corps provides forces to the
    Combatant Commanders who are ready to fight both across the range of
    military operations and throughout a range of climates. As a force
    provider, we are focused on preparing Marines to handle the tasks that
    the Combatant Commanders request. It is true that a more robust arctic
    strategy may help those Commanders develop their contingency plans and
    by extension the skills they request from the Marine Corps. However,
    from a service perspective, our history of operating in extreme cold
    climates has driven us to develop excellent cold weather training
    facilities and exercises.
        We are ready to provide naval expeditionary forces anywhere
    Combatant Commanders call for them. Marines develop and maintain their
    cold weather skills by training at the Mountain Warfare Training Center
    in Bridgeport, CA, which houses subject matter experts and instructors
    in cold weather operations, and which trains both specially trained
    Mountain Leaders as well as entire units in these critical skills. We
    further develop our capability by participating in other cold weather
    exercises and training. These include USNORTHCOM, State of Alaska, and
    Canadian exercises in addition to our yearly support of USEUCOM's
    exercise COLD RESPONSE in Norway.
        Crisis and contingency response capabilities must be able to handle
    any climate in which there is a need for the Marines. As such, both
    EUCOM and NORTHCOM Areas of Responsibility (AOR), which comprise the
    entirety of the arctic region, are specifically addressed. The Marines
    will continue to provide forces ready to operate in extreme cold
    environments to Combatant Commanders.
        Additionally, we will continue to integrate our efforts with our
    fellow sea services. For instance, we have requested that US Coast
    Guard ice breakers in development be built with aviation landing decks
    capable of receiving the MV-22, an aircraft whose range, speed, and
    versatility was specifically designed to support operations in the vast
    reaches of arctic and desert environments.

        17. Senator Sullivan. General Gluek, how does the lack of Arctic
    guidance affect your ability to resource for Marine expeditionary
    operations in the Arctic AOR?
        Lieutenant General Glueck. The Marine Corps provides forces to the
    Combatant Commanders who are ready and equipped to fight both across
    the range of military operations and throughout a range of climates. As
    a force provider, we are focused on preparing Marines to handle the
    tasks that the Combatant Commanders request. It is true that a more
    robust arctic strategy may help those Commanders develop their
    contingency plans and by extension the skills and capabilities that
    they request from the Marine Corps. When making resourcing decisions,
    the Marine Corps must make tradeoffs between various capabilities
    during procurement. No piece of equipment can be optimized for every
    available option. It is true that more explicit arctic strategy might
    change the prioritization of those tradeoffs.
        However, it should be noted that we do take extreme cold weather
    environments into account when making resourcing decisions. The Marine
    Corps maintains a Mountain Warfare Training Center (MWTC) in
    Bridgeport, CA with a cadre of experienced mountain leaders who test,
    develop, and provide input on procurement decisions. Further, they use
    this equipment year in and year out when training individuals and units
    in the challenges of cold weather operations to validate its efficacy
    and to make recommendations for future resourcing decisions.
    Additionally, we will continue to integrate our efforts with our fellow
    sea services. For instance, we have requested that US Coast Guard ice
    breakers in development be built with aviation landing decks capable of
    receiving the MV-22, an aircraft whose range, speed, and versatility
    was specifically designed to support operations in the vast reaches of
    arctic and desert environments.
                                   __________
                   Questions Submitted by Senator Bill Nelson
                       assault amphibious battalion plans
        18. Senator Sullivan. Mr. Dee and Lieutenant General Glueck, the
    Marine Corps currently has a total of 12 Assault Amphibian Battalions
    and plans to divest 2 for a total of 10 by 2018. How and when will the
    Marine Corps decide which two will be divested? What are the
    operational Impacts of this reduction?
        Mr. Dee and Lieutenant General Glueck. The Marine Corps will divest
    two Assault Amphibian Companies by 2018. Each of these companies
    provides the lift for a single infantry battalion. These companies are
    planned to come from the active component. First we will divest of
    Company D, 2d Assault Amphibious (AAV) Battalion in fiscal year 2016
    and then Company C, 2nd AAV Battalion in 2018. The Marine Corps will
    still be able to meet its requirement to employ two Marine
    Expeditionary Brigades (MEB) in an Assault Echelon (AE) with this lift
    capacity.

        19. Senator Sullivan. Mr. Dee and Lieutenant General Glueck, the
    4th Assault Amphibian Battalion assigned under Marine Forces Reserve is
    a key part of the Marine Corps' total Assault Amphibian operations
    capability with more than half of the Reserve capacity. What is the
    modernization plan for its Assault Amphibious Vehicles (AAV-7) during
    the acquisition and fielding of the ACV?
        Mr. Dee and Lieutenant General Glueck. The USMC Reserve is a
    critical component of our operational capability and is scheduled to
    receive Amphibious Combat Vehicles (ACV) during the second increment of
    planned procurement during the 2020s.

        20. Senator Sullivan. Mr. Dee and Lieutenant General Glueck, what
    are the overall numbers of the AAV-7s that will receive the AAV
    survivability upgrades and how did the Marine Corps come at that
    number?
        Mr. Dee and Lieutenant General Glueck. Four of our active duty
    Assault Amphibious Vehicle (AAV) Companies will receive AAV
    Survivability Upgrade Program (SUP) for a total of 392 upgraded
    vehicles. This program will bridge the gap to the final increment of
    Amphibious Combat Vehicle 2.0 procurement in the 2030s, when the AAV
    (SUP) items are scheduled to be phased out of our inventory. 392
    vehicles is sufficient for four infantry battalions worth of lift and
    effectively allows us to bridge the path for procurement of ACV
    increments 1.1, 1.2, and 2.0 while still retaining a capacity to
    simultaneously employ two Marine Expeditionary Brigades (MEB) as an
    Assault Echelon (AE) throughout the entire transition of the fleet from
    AAVs to ACVs.

    DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR
                   2016 AND THE FUTURE YEARS DEFENSE PROGRAM

                                  ----------

                           WEDNESDAY, MARCH 18, 2015

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

                           NAVY SHIPBUILDING PROGRAMS

        The subcommittee met, pursuant to notice, at 9:31 a.m. in
    Room SR-222, Russell Senate Office Building, Senator Roger
    Wicker (chairman of the subcommittee) presiding.
        Committee members present: Senators Wicker, Sessions,
    Ayotte, Rounds, Tillis, McCain, Shaheen, Hirono, Kaine, and
    King.

         OPENING STATEMENT OF SENATOR ROGER F. WICKER, CHAIRMAN

        Senator Wicker. This hearing will come to order.
        The Senate Armed Services Subcommittee on Seapower convenes
    this morning to examine Navy shipbuilding programs.
        We are delighted to welcome three distinguished witnesses
    today: The Honorable Sean Stackley, Assistant Secretary of the
    Navy for Research, Development, and Acquisition; Vice Admiral
    William H. Hilarides, Commander of Navy Sea Systems Command;
    and Vice Admiral Joseph P. Mulloy, Deputy Chief for Naval
    Operations for Integration of Capabilities and Resources, quite
    a title.
        Gentlemen, our subcommittee is grateful to you for your
    decades of service, and we are also grateful for the sacrifice
    of our sailors and marines serving around the globe. With
    nearly than 100 ships deployed today, standing the watch, our
    Navy continues to provide a front line of defense for our
    country.
        Now, more than ever, a strong Navy is central to our
    Nation's ability to deter adversaries, assure allies, and
    defend our national interests. Our sailors and marines are at
    the forefront of our rebalance to Asia, our ongoing operations
    against the Islamic state, and our efforts to deter rogue
    states such as Iran and North Korea. However, our current fleet
    of 275 ships is insufficient to address these critical security
    challenges. The Navy's stated force structure requirement is
    306 ships. The bipartisan National Defense Panel calls for a
    fleet of 323 to 346 ships. Our combatant commanders say they
    require 450 ships. Despite these publicly stated requirements
    by our military leaders, the Navy says acquisition--says that
    sequestration could shrink our fleet to 260 ships.
        Not only is our Navy too small, it is also not as ready as
    it should be. Sequestration in 2013 and a high operational
    tempo in Asia and the Middle East have led our naval fleet to
    endure major readiness shortfalls, including longer
    deployments, reduced training time, and reduced surge
    capability. I am concerned about the potential impact these
    factors will have on our ability to deter and confront future
    adversaries. These factors could also endanger the long-term
    vitality of the Navy's highly skilled and All-Volunteer Force
    of sailors and marines.
        This morning, I would like to hear from our witnesses on
    what I consider five key issues that our subcommittee will
    review this year:
        First, the viability of the 30-year shipbuilding plan is
    essential to the strength of our shipbuilding industrial base.
    The unique strength of the skills, capabilities, and capacities
    inherent to new construction shipyards and weapon system
    developers can reinforce the Navy's dominant maritime position.
    I would like our witnesses to relate how they carefully weigh
    the effects on the shipbuilding industrial base when they
    balance resources and requirements in the shipbuilding plan.
        Second, it is critical this subcommittee conduct rigorous
    oversight of shipbuilding programs to ensure the Navy is making
    the best use of limited taxpayer dollars. The Congress expects
    the Ford-class Nuclear Aircraft Carrier Program and Littoral
    Combat Ship, LCS, to deliver promised capability on time and on
    budget. Delays or unsatisfactory test results could result in
    cost growth and challenges for the legacy platforms these ships
    will replace. With regard to the Navy's decision on the
    upgraded LCS, known as the small surface combatant, this
    subcommittee needs clarity on the specific combatant commander
    gaps these upgraded ships may fill. Our subcommittee would also
    like to know what threat benchmarks these ships should be
    measured against.
        Third, this subcommittee also has a duty to shape the
    future of our Navy. Each of our classes of surface combatant
    ships--cruisers, destroyers, and littoral combat ships--will
    begin retiring within the next 20 years. Now is the time to
    establish the analytical framework to replace them. I am also
    deeply concerned about the extraordinary cost of the Ohio-class
    submarine Replacement Program, or ORP, could place tremendous
    stress on our already constrained shipbuilding budget.
    Undoubtedly, we'll talk about that today. This committee looks
    forward to working with the Department of Defense (DOD) and the
    Department of the Navy on innovative approaches to fund the
    ORP, which is a vital leg in our nuclear triad.
        Fourth, I am interested in learning the views of our
    witnesses on ways we can ensure the Navy's shipbuilding plan
    meets the demand from our combatant commanders for amphibious
    ships. This demand is greater than 50 amphibious ships at any
    given time. I am pleased to note that the Navy has funded LPD-
    28, the 12th San Antonio-class amphibious ship. As we continue
    to pivot toward Asia Pacific, the Navy and Marine Corps will
    serve as the lynchpin of American force projection abroad. Our
    subcommittee would like to know more about the acquisition
    strategy or the LHA-8s, big-deck amphibious ship, the first six
    ships of the new fleet oiler, and our next-generation
    amphibious assault ship, known as the LX(R).
        Finally, funding and budget challenges. The Navy continues
    to face significant budget challenges. Navy funding has already
    been reduced 25 billion compared to the budget request over the
    last 3 years. Admiral Greenert testified before the Senate
    Armed Services Committee in January that maintenance and
    training backlogs on budget cuts have reduced the Navy's
    ability to maintain required forces for contingency response to
    meet combatant command operational plan requirements.
        As a member of both the Armed Services Committee and the
    Budget Committee, I know that tough decision must be made
    across the Federal Government, but I would remind everyone that
    national defense is solely a Federal responsibility. Defense
    spending is also known as a twofer, as I have stated repeatedly
    over the years, supporting both our National security and our
    high-tech manufacturing workforce. As such, I hope our
    witnesses today will elaborate on the impact that sequestration
    would have on a shipbuilding plan, the ability to execute our
    country's national security strategy, and the vitality of our
    defense industrial base.
        With that in mind, I'd turn to my distinguished Ranking
    Member, Senator Hirono, for whatever opening remarks she would
    like to make.

                  STATEMENT OF SENATOR MAZIE K. HIRONO

        Senator Hirono. Thank you, Mr. Chairman.
        I share the Chair's focus on the rebalance to the Asia-
    Pacific. Even as there are so many areas of the world where
    there is instability--the Middle East, Africa, Ukraine--we want
    to make sure that this area of the world, the Asia-Pacific
    area, remains as stable as possible. That is really part of
    what the rebalance looks to.
        So, I certainly welcome all of our witnesses, and thank you
    for your service to the Nation.
        I also want to extend my aloha and thanks to the
    professional service of the men and women under your command,
    and to their families, because, without their families
    supporting them, I think that it would make things a lot more
    difficult for our servicemembers to provide the kind of service
    that they do provide to our Nation.
        So, today our witnesses face huge challenges as you strive
    to balance the need to support ongoing operations and sustain
    readiness with the need to modernize and keep the technological
    advantage that is so critical to military success. These
    challenges have been made particularly difficult by the
    spending caps imposed in the Budget Control Act (BCA), caps
    that were modestly relieved in 2015 in the Bipartisan Budget
    Act (BBA). However, as we all know, these caps are scheduled to
    resume in 2016 and beyond. These caps already seriously
    challenge our ability to meet our national security needs, and
    have already forced all of the military departments to make
    painful tradeoffs. Unless modified for the years after fiscal
    year 2016 and beyond, I believe that they will threaten our
    long-term national security interests.
        With that in mind, the continuing focus of this committee
    has been to see that we improve our acquisition stewardship and
    thereby ensure that we are getting good value for every
    shipbuilding dollar that we spend. We are very pleased to see
    continued stability and performance in the Virginia-class
    attack submarine production at a level of two per year. We have
    seen that stability helps drive down costs and improve
    productivity. We also support the Navy's continuing effort to
    drive costs out of the Ohio replacement ballistic missile
    submarines (SSBN) program. SSBNs will remain a vital link on
    the nuclear triad for the foreseeable future. Establishing and
    achieving cost-reduction goals in these Virginia-class and Ohio
    replacement programs will yield significant stability to our
    Nation's submarine industrial base, which will ensure the Navy
    has a modern, capable submarine fleet for years to come.
        Aircraft carrier programs are another important area for
    discussion of the subcommittee. We need to hear about the
    progress that the Navy and the contractors are making to
    deliver CVN-78 within the cost cap and what progress is being
    made on reducing the production costs for CVN-79 and later
    carriers.
        Another topic that we should address is the discussion
    within DOD of changes to the Littoral Combat Ship, LCS,
    Program. The Navy, responding to direction from former
    Secretary Hagel, analyzed numerous upgrades to the current LCS
    designs, and has identified some upgrades to the ships that the
    Navy hopes to include in the 33rd ships--ship and beyond. We
    need to ensure that the Navy has validated requirements for
    making these changes.
        This year, the Navy wants to implement an engineering
    change proposal for the DDG-51 destroyer program to include the
    Air and Missile Defense Radar, or AMDR, on the second DDG-51 in
    the fiscal year 2016 budget request. We need to assess whether
    the Navy and contractors have made significant progress on the
    AMDR program to merit including this new radar in the DDG-51
    during the middle of the multiyear procurement program. In our
    country's current fiscal environment, it's very unlikely that
    we will have as much money to spend as the 30-year shipbuilding
    plans and goals assumed. Fundamentally, that is why these
    hearings are so important. We need to focus on managing these
    important programs in ways that are efficient and effective in
    delivering the capability the country needs from its Navy. We
    need to improve quality and efficiency in all our shipbuilding
    programs, and not only--not only because of the direct savings,
    but also because we need to demonstrate to the taxpayer that we
    are using every defense dollar wisely.
        Gentlemen, I look forward to your testimony this morning.
        Thank you, Mr. Chairman.
        Senator Wicker. Thank you, Senator Hirono.
        Secretary Stackley.

    STATEMENT OF HON. SEAN J. STACKLEY, ASSISTANT SECRETARY OF THE
              NAVY, RESEARCH, DEVELOPMENT, AND ACQUISITION

        Mr. Stackley. Yes, sir. Chairman Wicker, Ranking Member
    Hirono, distinguished members of subcommittee, thank you for
    the opportunity to appear before you today to discuss the
    Department of the Navy's shipbuilding programs.
        With the permission of the subcommittee, I propose to
    provide brief opening remarks and submit a separate formal
    statement for the record.
        Senator Wicker. Without objection.
        Mr. Stackley. Thank you, sir.
        The timely passage of the 2015 national defense
    authorization and appropriations bills has provided much needed
    budget stability, relative to recent prior years, enabling the
    Department to carry out its mission with far greater efficiency
    and effectiveness. In fact, the Department of the Navy fared
    extremely well in this year's bills. We greatly appreciate the
    subcommittee's efforts, for not only has Congress fully
    supported our request, but it has increased procurement in our
    most critical programs, sending a strong signal of support for
    our Navy and Marine Corps mission.
        However, as you have noted, we cannot lose sight of the
    fact that, as a result of sequestration in 2013 and the
    Bipartisan Budget Act across 2014 and 2015, the Department of
    the Navy's budget has been reduced by $25 billion, compared to
    the funding that we had determined was necessary to meet the
    Defense Strategic Guidance, or the DSG. As a result, quantities
    of ships, aircraft, and weapons has been impacted, development
    programs have been stretched, modernization has been slowed,
    deployments have been canceled, deployments have been
    stretched, and depot and facilities maintenance has been
    deferred, all placing greater strain on the force. With a
    significant portion of the reductions levied against
    procurement, the resultant quantity reductions had the perverse
    impact of driving up unit cost for weapon systems at a time
    when cost is one of the great threats before us.
        In building the 2016 budget request, we've been faithful to
    our fiscal responsibilities, leveraging every tool available to
    drive down cost. We've tightened requirements, maximized
    competition, increased the use of fixed-price contracts, and
    capitalized on multiyear procurements, and we've attacked our
    cost of doing business so that more of our resources can be
    dedicated to warfighting capability. Alongside range and speed
    and power and payload, affordability has become a requirement.
        All the while, independent of the fiscal environment, the
    demand for naval presence is on a steady rise. As you've noted,
    near half of our fleet is routinely at sea, and, of that
    number, about 100 ships and more than 75,000 sailors and
    marines are deployed. On the ground in Afghanistan, in the air
    over Syria, on the waters of the Black Sea, from the Sea of
    Japan to the eastern Mediterranean, they are the providers of
    maritime security. They are our first responders to crisis.
    They are our surest defense against a threat of ballistic
    missiles. They are our Nation's surest deterrent against the
    use of strategic weapons. Therefore, we've placed a priority on
    forward presence, near-term readiness, investment in those
    future capabilities critical to our technical superiority and
    stability in our shipbuilding program.
        Our shipbuilding program is, in fact, very stable. The
    fleet under construction is 65 ships strong, 44 ships of 10
    different classes in fabrication and assembly at 8 shipyards,
    and another 21 ships recently contracted, with material on
    order at factories across the country. We are on track to a
    300-ship Navy by 2019.
        Highlights. We commissioned USS America, LHA-6, the first
    new-designed big-deck amphib in over 30 years, and laid the
    keel of her sister ship, Tripoli, LHA-7, this past year. We're
    completing construction and testing of CVN-78, Gerald Ford, our
    first new-designed aircraft carrier in more than 40 years, and
    we have started construction of her sister ship, John F.
    Kennedy, CVN-79. Likewise, DDG-1000, the first new-design
    destroyer in 30 years, is ramping up its shipboard system
    activation and testing, preparing for sea trials later this
    year. On each of these programs, we are heavily engaged with
    industry to control cost on the lead ship and to leverage
    learning and make the necessary investments to reduce costs on
    follow ships. Meanwhile, DDG-51 construction is proceeding
    steadily, with the first restart ship, DDG-113, on track to
    deliver in 2016.
        Equally important, we're on track with the first Flight-3
    destroyer upgrade. The backbone of Flight 3, the Air and
    Missile Defense Radar, completed its critical design review and
    is meeting or exceeding all performance requirements. The Navy
    relies on your continued support for this capability, which is
    so critical to countering the increasing crews and ballistic
    missile threat.
        The Littoral Combat Ship continues to demonstrate strong
    learning-curve performance at both building yards, and the
    first surface warfare mission package completed operational
    testing and is today deployed on USS Fort Worth in the western
    Pacific. As was announced, the Navy will commence a new
    frigate-class design, based on modifications to the current
    LCS, to provide multimission capability and enhanced
    survivability that will significantly expand this ship's range
    of operations.
        In submarines, we continue to leverage learning on the
    Virginia program and are proceeding with the design of the next
    major upgrade, Virginia payload modules, to augment our
    undersea strike capacity as our guided-missile submarines, the
    SSGNs, retire in the next decade. We're ramping up design
    activities on the Ohio replacement program to support her
    critical schedule.
        In other shipbuilding programs, we have requested the
    balance of funding for the 12th LPD class to leverage the
    benefits brought by that ship to our amphibious force. We're
    building our first afloat forward staging base, and continue to
    enjoy strong learning-curve performance on joint high-speed
    vessel. We're proceeding with three new major programs: the
    fleet oiler TAO(X), the next big-deck amphib, LHA-8, and the
    replacement for the LSD-41/49 class LX(R). Each is critical to
    our force. Each is critical to the industrial base.
    Affordability is critical to each. So, we've constructed an
    acquisition strategy to meet these objectives.
        Of interest to this subcommittee, we have awarded the
    planning contract and are proceeding with the refueling
    overhaul of CVN-73, the George Washington. Likewise, we are
    proceeding with the planning and material procurement for our
    cruiser and dock landing ship (LSD) modernization programs, in
    accordance with Congress' approval in the 2015 bills.
        As a final note, in response to sequestration in 2013, the
    BBA level funding in 2014 and 2015, and the reductions across
    2016 through 2020, the Department has been judicious in
    controlling costs, reducing procurements, and delaying
    modernization. However, these actions necessarily add cost to
    our programs, add risk to our industrial base, and add risk to
    our ability to meet defense strategic guidance.
        All the while, we have been asking our sailors and marines
    to endure extended deployments while responding to new
    challenges in an incredibly complex security environment. If we
    are forced to execute at BCA levels in fiscal year 2016 and
    beyond, these cuts will go deeper, and we fundamentally change
    the Navy and Marine Corps and the industrial base the Nation
    relies on for our National defense and economic security.
        Mr. Chairman, thank you for the opportunity to appear
    before you today. We look forward to answering your questions.
        [The prepared joint statement of Mr. Stackley, Admiral
    Hilarides, and Admiral Mulloy follows:]

     The Joint Prepared Statement by Hon. Sean J. Stackley, VADM Joseph P.
                     Mulloy, and VADM William H. Hilarides
        Mr. Chairman, Senator Hirono, and distinguished members of the
    subcommittee, thank you for the opportunity to appear before you today
    to address the Department of Navy's shipbuilding programs.
        The fiscal year (FY) 2016 President's Budget submission is governed
    by the 2014 Quadrennial Defense Review (QDR), which implements the 2012
    Defense Strategic Guidance (DSG) and continues our efforts to ensure
    our ability to protect the homeland, build security globally, and
    project power and win decisively. In balancing resources and
    requirements, the Department continues to place a priority on
    maintaining a sea-based strategic deterrent, sustaining forward
    presence, strengthening our means to defeat and deny aggression,
    focusing on critical readiness, sustaining or enhancing our asymmetric
    capabilities, and sustaining a relevant industrial base, including
    providing stability in our shipbuilding programs. The Navy and Marine
    Corps remain well suited and uniquely positioned to perform the
    missions of the DSG, including appropriate readiness, warfighting
    capability, and forward presence. Our principal requirement remains to
    equip the Navy and Marine Corps with the most effective warfare
    systems, through procurement, modernization, and sustainment, to
    address the security challenges of today and tomorrow. These principles
    guide the priorities and direction of the Department's fiscal year 2016
    President's Budget request. The Department will continue to work
    closely with Congress to maintain the right balance across capacity,
    capability, readiness, and the industrial base.
        Though budget issues have challenged the Department, our Sailors
    and Marines deployed around the world continued to perform the mission
    and operate forward, being where it mattered when it mattered. Among
    these missions, the George H.W. Bush Strike Group relocated from the
    Arabian Sea to the north Arabian Gulf and was on-station within 30
    hours, ready for combat operations in Iraq and Syria. Navy and Marine
    strike fighters from the carrier generated 20 to 30 combat sorties each
    day for 54 days to project power against the Islamic State of Iraq. The
    George Washington Strike Group also provided disaster relief to the
    Philippines in the wake of the Super Typhoon Haiyan approximately a
    year ago. USS Truxton established a U.S. presence and reassured our
    allies in the Black Sea within a week after Russia invaded Crimea. USS
    Fort Worth, on her maiden deployment, joined USS Sampson in support of
    the Indonesia-led search effort for Air Asia flight 8501 within days of
    arrival in theater.
        Marine Corps units deployed to every Geographic Combatant Command
    (GCC) and executed numerous Theater Security Cooperation (TSC)
    exercises to help strengthen relationships with allies and build
    partner capacity. Marine Corps Special Purpose Marine Air-Ground Task
    Force (MAGTFs) and ship based Marine Expeditionary Units also responded
    to emergent crises in Sudan, Iraq and Libya, and most recently off the
    coast of Yemen to participate in strikes or reassure American allies.
    Innovative force packages were provided to the GCCs with Special
    Purpose MAGTF Crisis Response for the Middle East and Africa. These
    fully capable ground-based MAGTFs responded to crisis when called upon
    in a matter of hours to reinforce or evacuate embassies in South Sudan
    and Libya. Furthermore, in December, the Marines turned over control of
    Regional Command Southwest and redeployed its last combat forces from
    Afghanistan, and remain committed to support the continuing North
    Atlantic Treaty Organization efforts.
        The Department maintained a steady pace of over 200 engagements,
    more than 30 amphibious operations, 150 TSC events, and 130 exercises
    over the year. This included Rim of the Pacific, an exercise off Hawaii
    that featured participants from 22 nations (including China for the
    first time), and the international mine countermeasures exercise in the
    5th Fleet's arena in and around the Arabian Gulf that included
    participants from 44 nations. In addition, the Marine Corps deployed
    numerous other units globally. The newly developed Marine Security
    Guard Security Augmentation Unit deployed 29 times during 2014 to
    augment posts at the request of the State Department to a variety of
    embassies. Marine Rotational Force-Darwin based in Darwin, Australia,
    conducted bi-lateral training and exercises. The Black Sea Rotational
    Force continued their enduring activities in the European Command area
    of operations and Fleet Anti-Terrorism Security Teams provided forward-
    deployed platoons to four GCCs in support of dynamic mission tasking
    such as embassy reinforcement in Baghdad, Iraq.
        The Department's fiscal year 2016 budget represents the bare
    minimum to execute the DSG in the world we face, but still results in
    high risk in two of the most challenging DSG missions that depend on
    adequate numbers of modern, responsive forces. The principal risk to
    the Department's ability to meet the DSG remains the uncertainty in
    future funding, which affects our planning and the ability to balance
    near- and long-term readiness and capability. The fiscal year 2014
    President's Budget was the last budget submission to fully meet all of
    the missions of the DSG. The Department made difficult, strategy-based
    choices to reprioritize within available resources, but that is not
    sustainable. The fiscal year 2013 sequestration was manageable in part
    because of key budget reprogramming actions made by the Department with
    Congressional support. In order to accomplish this, however, the
    Department applied mitigating actions to ships in execution and
    deferred costs to future years in order to avoid breaking programs.
    While the Bipartisan Budget Act of 2013 (BBA) provided some relief from
    sequestration-level funding in fiscal year 2014 and fiscal year 2015,
    significant shortfalls remained compared to the fiscal year 2014
    President's Budget. The Department was compelled to further reduce the
    capability of weapons and aircraft, slow modernization, and delay
    upgrades to all but the most critical shore infrastructure. As a
    result, the Department is challenged with maintenance backlogs,
    compressed training for modernization, and impacts on our people and
    their families due to extended deployments.
        If sequestration returns in fiscal year 2016, a revisit and
    revision of the defense strategy would be necessary. With limited
    ability to mitigate the impacts as we did in fiscal year 2013,
    sequestration in fiscal year 2016 would force the Department to further
    delay critical warfighting capabilities, reduce readiness of forces
    needed for contingency response, further downsize weapons capacity, and
    forego or stretch force structure procurements as a last resort. The
    Marine Corps would assume additional significant risk in long-term
    modernization and infrastructure sustainment, delay of major
    acquisition programs, forced sustainment of aged legacy systems
    resulting in increased operations and support costs, as well as further
    detrimental impacts to readiness, which will lead to morale issues and
    quality of life degradation. The Department's capability and capacity
    to meet operational requirements over the long-term will be reduced,
    including our ability to deploy forces on the timeline required by GCCs
    in the event of a contingency.
                The Fiscal Year 2016 President's Budget Request
        The fiscal year 2016 President's Budget submission continues to
    balance force structure, readiness, and capability to meet national
    security commitments. The Department's shipbuilding plan is built
    around stability, balancing near-term and long-term requirements to
    enable efficient planning and procurement, improve cost performance,
    and sustain the critical shipbuilding and supplier industrial base. A
    brief overview of Navy shipbuilding programs follows.
                                  Shipbuilding
        The fiscal year 2014 update to the 2012 Force Structure Assessment
    (FSA) to meet the Department of the Navy's required missions in support
    of the DSG, has increased the objective to 308-ships to account for
    evolving force structure decisions and real-world changes to
    assumptions made in 2012. The Department's fiscal year 2016
    shipbuilding plan continues to build toward the balanced force required
    by the FSA. As such, the fiscal year 2016 President's Budget requests
    funding for nine ships: two Virginia-class attack submarines, two DDG-
    51 Arleigh Burke-class destroyers, three Littoral Combat Ships (LCS),
    the first next generation logistics fleet resupply ship T-AO(X), and
    the remaining funding for the Amphibious Transport Dock (LPD 28) that
    Congress added in fiscal year 2015. The fiscal year 2016 submission for
    the Future Years Defense Program (FYDP), fiscal year 2016 to fiscal
    year 2020, plans for the procurement of 48 ships. Additionally, the
    budget request includes funding for the aircraft carrier USS George
    Washington's refueling and complex overhaul (RCOH).
        An additional key component of our budget submission is the
    modernization of 11 cruisers, which are the most capable ships for
    controlling the air defense of a carrier strike group. The Navy's
    cruiser modernization plan in accordance with fiscal year 2015
    Congressional direction will allow the Navy to reduce some funding
    requirements while increasing the capability and extending the service
    life of our large surface combatants.
        The key elements of the fiscal year 2016 shipbuilding plan will now
    be discussed for each area of the plan.
                               Aircraft Carriers
        Our aircraft carriers are central to our nation's defense strategy,
    which calls for forward presence; the ability to simultaneously deter
    potential adversaries and assure our allies; and capacity to project
    power at sea and ashore. These national assets are equally capable of
    providing our other core capabilities of sea control, maritime
    security, and humanitarian assistance and disaster relief. Our carriers
    provide our nation the ability to rapidly and decisively respond
    globally to crises, with a small footprint that does not impose
    unnecessary political or logistical burdens upon our allies or
    potential partners.
        Nimitz- and Ford-class carriers will be the premier forward
    deployed asset of choice for crisis response and early decisive
    striking power in major combat operations for the next half-century.
    The Department has established a steady state Ford-class procurement
    plan designed to deliver each new ship in close alignment with the
    Nimitz-class ship it replaces. The design improves warfighting
    capability, survivability, operational availability, and quality of
    life for Sailors, while reducing the ship's crew by between 500 and 900
    personnel and decreasing total ownership costs by approximately $4
    billion per ship. Gerald R. Ford (CVN 78), the lead ship of the class,
    was launched in November 2013. As of January 2015, CVN 78 is 87 percent
    complete, 37 percent of compartments have been turned over to the crew,
    9.4 million feet of the 9.8 million feet of cabling (96 percent) has
    been installed, and 36 percent of the shipboard testing program is
    complete. CVN 78 land-based catapult testing commenced in December
    2014. CVN 78 is planned for delivery in fiscal year 2016.
        The Navy is committed to delivering CVN 78 within the $12.887
    billion Congressional cost cap. Sustained efforts to identify cost
    reductions and drive improved cost and schedule on this first-of-class
    aircraft carrier have resulted in highly stable performance since 2011.
        Parallel efforts by the Navy and shipbuilder are driving down and
    stabilizing aircraft carrier construction costs for the future John F
    Kennedy (CVN 79) and estimates for the future Enterprise (CVN 80). As a
    result of the lessons learned on CVN 78, the approach to carrier
    construction has undergone an extensive affordability review. The Navy
    and the shipbuilder have made significant changes on CVN 79 to reduce
    the cost to build the ship as detailed in the 2013 CVN 79 report to
    Congress. The benefits of these changes in build strategy and
    resolution of first-of-class impacts on CVN 79 are evident in metrics
    showing significantly reduced man-hours for completed work from CVN 78.
    These efforts are ongoing and additional process improvements continue
    to be identified.
        The Navy extended the CVN 79 construction preparation contract into
    2015 to enable continuation of ongoing planning, construction, and
    material procurement while capturing lessons learned associated with
    lead ship construction and early test results. The continued
    negotiations of the detail design and construction (DD&C) contract
    afford an opportunity to incorporate further construction process
    improvements and cost reduction efforts. Award of the DD&C contract is
    expected in third quarter fiscal year 2015. This will be a fixed price-
    type contract.
        Additionally, the Navy will deliver the CVN 79 using a two-phased
    strategy. This enables select ship systems and compartments to be
    completed in a second phase, wherein the work can be completed more
    efficiently through competition or the use of skilled installation
    teams responsible for these activities. This approach, key to
    delivering CVN 79 at the lowest cost, also enables the Navy to procure
    and install shipboard electronic systems at the latest date possible.
        The fiscal year 2014 National Defense Authorization Act (NDAA)
    adjusted the CVN 79 and follow ships cost cap to $11,498 million to
    account for economic inflation and non-recurring engineering for
    incorporation of lead ship lessons learned and design changes to
    improve affordability. In transitioning from first-of-class to first
    follow ships, the Navy has maintained Ford-class requirements and the
    design is highly stable. Similarly, we have imposed strict internal
    controls to drive changes to the way we do business in order to ensure
    CVN 79 is delivered below the cost cap. To this same end, the fiscal
    year 2016 President's Budget request aligns funding to the most
    efficient build strategy for this ship and we look for Congress' full
    support of this request to enable CVN 79 to be procured at the lowest
    possible cost.
        Enterprise (CVN 80) will begin long lead time material procurement
    in fiscal year 2016. The fiscal year 2016 request re-phases CVN 80
    closer to the optimal profile, therefore reducing the overall ship
    cost. The Navy will continue to investigate and will incorporate
    further cost reduction initiatives, engineering efficiencies, and
    lessons learned from CVN 78 and CVN 79. Future cost estimates for CVN
    80 will be updated for these future efficiencies as they are
    identified.
        With more than half of the service life of the Nimitz-class still
    remaining, RCOH continues as a key enabler for the enduring presence of
    the aircraft carrier Fleet. USS Abraham Lincoln (CVN 72) completed her
    RCOH undocking in November 2014. This year's budget request restores
    funding for the USS George Washington (CVN 73) RCOH. The CVN 73 thirty
    month RCOH advanced planning, long lead time material procurement,
    engineering, and early fabrication contract was awarded in February
    2015.
                                   Submarines
        Submarines' stealth and ability to conduct sustained forward-
    deployed operations in anti-access / area-denial environments serve as
    force multipliers by providing high-quality Intelligence, Surveillance,
    and Reconnaissance (ISR) as well as indication and warning of potential
    hostile action. In addition, attack submarines are effective in anti-
    surface warfare (ASuW) and undersea warfare in almost every
    environment, thus eliminating any safe-haven that an adversary might
    pursue with access-denial systems. As such, they represent a
    significant conventional deterrent. The Navy is mitigating an impending
    attack submarine force structure shortfall in the 2020s through
    multiple parallel efforts: continuing procurement of two Virginia-class
    submarines per year; reducing the construction span of Virginia-class
    submarines; extending the service lives of select attack submarines
    (SSN 688s) with the potential to eliminate 10-15 attack submarine (SSN)
    years from the SSN shortfall of 51 years. While each of the Navy's
    attack submarines provides considerable strike capacity, guided missile
    submarines (SSGN) provide substantially more strike capacity and a
    robust capability to deploy special operations force (SOF) personnel.
    Lastly, the Navy's 14 ballistic missile submarines (SSBNs) provide the
    nation with an around-the-clock, credible, modern and survivable sea-
    based strategic deterrent.
        SSBNs, coupled with the TRIDENT II D-5 Strategic Weapons System,
    represent the most survivable leg of the Nation's strategic arsenal and
    provide the Nation's most assured nuclear response capability.
    Originally designed for a 30-year service life, the Ohio-class was
    extended to its limit at 42 years of operation. With the Ohio-class
    SSBNs being an average of 25.5 years old, the U.S. must continue
    development of the follow-on twelve ship Ohio replacement (OR) SSBN
    program as the current SSBNs' life cycles cannot be extended further.
    This is our top priority program within the Department of the Navy.
        The fiscal year 2016 President's Budget requests full funding of
    two Virginia-class submarines and advanced procurement for the fiscal
    year 2017 and fiscal year 2018 vessels. The Virginia-class submarine
    program has delivered the last seven ships on budget and ahead of
    schedule. The last ship delivered, USS North Dakota (SSN 784), included
    a completely redesigned bow section as part of the Design for
    Affordability efforts, an approximate 20 percent design change.
    Additionally, USS North Dakota delivered with the highest quality of
    any Virginia-class submarine to date.
        The Navy awarded the Block IV contract in April 2014 for ten ships.
    It continues the co-production of the Virginia-class submarines between
    General Dynamics Electric Boat and Huntington Ingalls Industries--
    Newport News Shipbuilding through fiscal year 2018. The savings
    realized with this multiyear procurement (MYP) contract was over $2
    billion, effectively giving the Navy ten ships for the price of nine.
        In December 2012, the Navy awarded a research and development (R&D)
    contract for OR SSBN which focuses on meeting the program's performance
    requirements while reducing costs across design, production, and
    operations and sustainment. The lead ship recurring estimate was
    reduced to $6.2 billion Constant Year (CY) ($8.8B Then Year (TY))
    dollars from $6.8 billion CY ($10.0B TY) dollars. The average follow-on
    ship recurring cost estimate was reduced to $5.2 billion CY ($9.8B TY)
    dollars from $5.4 billion CY ($10.5B TY) dollars. The non-recurring
    cost estimate is $17.1 billion CY ($22.4B TY). Cost reduction efforts
    continue and bring the Navy closer to its cost goals. The cost
    reduction efforts will continue throughout the design and construction
    phases.
        The fiscal year 2016 President's Budget requests funding to
    continue development of the OR SSBN and ensures Common Missile
    Compartment efforts remain on track to support the United Kingdom's
    SUCCESSOR Program's schedule. Given the need to recapitalize this
    strategic asset, coupled with the ongoing need to support Navy force
    structure, the Navy continues to pursue the means to resource
    construction of the OR SSBN in accordance with the schedule to fulfill
    U.S. Strategic Command requirements. The first-of-class is to be
    procured in 2021, with Shipbuilding and Conversion, Navy (SCN) advanced
    procurement in 2019 and 2020. The Navy continues to need significant
    increases in our topline beyond the FYDP, not unlike that during the
    period of Ohio construction, in order to afford the OR SSBN procurement
    costs. Absent a significant increase to the SCN appropriation, OR SSBN
    construction will seriously impair construction of virtually all other
    ships in the battle force: attack submarines, destroyers, and
    amphibious warfare ships. The shipbuilding industrial base will be
    commensurately impacted and shipbuilding costs would spiral
    unfavorably. The resulting battle force would fall markedly short of
    the FSA, unable to meet fleet inventory requirements. The National Sea-
    Based Deterrence Fund is a good first step in that it acknowledges the
    significant challenge of resourcing the OR SSBN, but the fund is
    unresourced.
        In addition to the Department of the Navy's budget request, the
    continued support of Congress for Naval Reactors' Department of Energy
    (DoE) funding is vital to the Navy mission and ensuring the safe,
    reliable and enduring operations of the nuclear-powered Fleet. The
    President's fiscal year 2016 DoE budget fully funds Naval Reactors'
    request for the OR SSBN. This funding is critical to maintain the
    reactor design and development in synch with the Navy shipbuilding
    schedule to support lead ship procurement in 2021. The DoE budget
    submission also provides full funding for refueling the Land-based
    Prototype. This effort not only supports development of the OR SSBN
    life-of-the-ship core, but also ensures Naval Reactors continues to
    train about 1,000 nuclear-qualified sailors per year for the next
    twenty years. Naval Reactors' DoE budget also includes the second year
    of funding for the Spent Fuel Handling Project. Recapitalizing this
    facility is critical to the Navy's tight refueling and defueling
    schedule of nuclear-powered aircraft carriers and submarines.
        The Navy's four SSGNs provide significant warfighting capability,
    but will be retired in 2026-2028 after 42 years of combined SSBN/SSGN
    service. To mitigate the 60 percent reduction in undersea strike
    capacity when they retire, the Navy is investing in Virginia Payload
    Module (VPM) that will include a hull insert amidships of a Virginia-
    class submarine that will contain four 87-inch diameter missile tubes
    each capable of launching seven TOMAHAWK cruise missiles. The fiscal
    year 2016 President's Budget continues VPM R&D and starts SCN funding
    in fiscal year 2017 for detail design efforts to enable integrating VPM
    into Block V Virginia-class SSNs, one per year starting in fiscal year
    2019.
                            Large Surface Combatants
        Guided missile cruisers (CGs) and guided missile destroyers (DDGs)
    comprise our large surface combatant Fleet. When viewed as a whole,
    these ships fulfill broad mission requirements both independently and
    in conjunction with a strike group. The demands for increased
    capability and capacity in Ballistic Missile Defense (BMD) and
    Integrated Air and Missile Defense (IAMD) continue to be a focal point.
    In order to meet the increased demand for BMD, in fiscal year 2014, the
    Navy forward deployed two BMD capable DDGs, USS Donald Cook (DDG 75)
    and USS Ross (DDG 71) to Rota, Spain. USS Carney (DDG 64) and USS
    Porter (DDG 78) will arrive in fiscal year 2015. Two additional BMD
    ships will homeport shift to Yokosuka, Japan in 2015 and 2016, USS
    Benfold (DDG 65) and USS Barry (DDG 52). The Anti-Submarine Warfare
    (ASW) combat systems on DDGs and CGs are also being upgraded, bringing
    significant improvements over legacy systems.
        The Arleigh Burke-class (DDG-51) program remains one of the Navy's
    most successful shipbuilding programs--62 ships are currently operating
    in the Fleet. The fiscal year 2016 President's Budget includes funding
    for two destroyers to execute the fourth year of the current MYP. One
    of these ships will incorporate IAMD and provide additional BMD
    capacity, and the other ship will introduce the next flight upgrade
    known as Flight III, which incorporates the Air and Missile Defense
    Radar (AMDR), with both ships bringing additional capability to the
    Fleet when they deliver in the early fiscal year 2020s. AMDR and Flight
    III are essential for future sea-based BMD. The fiscal year 2016
    President's Budget also includes funding to complete the construction
    of Thomas Hudner (DDG 116) to restore program funding removed by the
    fiscal year 2013 sequestration.
        AMDR is the future multi-mission radar of the Navy's surface
    combatant fleet, which will meet the growing ballistic missile threat
    by improving radar sensitivity and enabling longer range detection for
    engagement of increasingly complex threats. In October 2013, the Navy
    awarded the contract for development of the AMDR, with options for up
    to nine low rate initial production (LRIP) units. The AMDR radar suite
    will be capable of providing simultaneous surveillance and engagement
    support for long range BMD and area defense. The program continues to
    demonstrate maturity in the design development as shown in successful
    completion of the AMDR hardware critical design review (CDR) in
    December 2014 and is on track for the system CDR in April 2015.
    Engineering Change Proposal (ECP) detail design efforts for the DDG
    Flight III design will continue in fiscal year 2016, ultimately leading
    to over 90 percent detail design completion prior to construction on
    the first Flight III ship.
        The DDG 1000 Zumwalt-class guided missile destroyer will be an
    optimally crewed, multi-mission, surface combatant designed to provide
    long-range, precision, naval surface fire support to Marines conducting
    littoral maneuver and subsequent operations ashore. In addition to the
    ship's two 155mm Advanced Gun Systems capable of engaging targets with
    the Long Range Land Attack Projectiles (LRLAP), the ship will be
    capable of conducting ASW, land attack, and will provide valuable
    advancements in technology such as signature reduction (both acoustic
    and radar cross-section), active and passive self-defense systems,
    enhanced survivability features, and shipboard automation (in support
    of reduced manning). The DDG 1000 program accomplished several
    construction milestones in 2014 with significant test and activation
    efforts continuing for the ship's propulsion and power plants. DDG 1000
    sea trials will be conducted this year in preparation to enter the
    Fleet in 2016. The fiscal year 2016 budget requests funds to continue
    the DDG 1000 program.
                            Small Surface Combatants
        The Littoral Combat Ship (LCS) enables the Navy to implement the
    DSG imperative to develop innovative, low-cost, and small-footprint
    approaches to achieve our security objectives. The modular, open
    systems architecture inherent in LCS allows for rapid integration of
    technological solutions that increase capability at reduced cost. The
    LCS complements our inherent blue water capability and fills war
    fighting gaps in the littorals and strategic choke points around the
    world. LCS design characteristics (speed, agility, shallow draft,
    payload capacity, reconfigurable mission spaces, air/water craft
    capabilities) combined with its core command, control, communications,
    computers and intelligence; sensors; and weapons systems, allow LCS to
    bring unique strengths and capabilities to the mission.
        In February 2014, Secretary Hagel capped LCS at 32 ships, pending
    an evaluation of the alternatives to increase the lethality and
    survivability of future small surface combatants. In December 2014,
    Secretary Hagel approved the Navy's proposal to procure a small surface
    combatant based on an upgraded LCS. The upgraded LCS will provide
    multi-mission ASuW and ASW, as well as continuous and effective air,
    surface and underwater self-defense. As these capabilities are
    generally consistent with those of a frigate, the Secretary of the Navy
    directed re-designation of upgraded LCS to frigates (FF). The fiscal
    year 2016 President's Budget requests funding for concept development
    and design for improved survivability and lethality performance in the
    Navy's future Frigate. The fiscal year 2016 request also includes
    funding for three LCS class ships. The Navy plans to extend the fiscal
    year 2010--2015 block buy contract to include the first ship in fiscal
    year 2016, and use the competitive pricing from the block buy to obtain
    option prices for the remaining two fiscal year 2016 ships.
    Furthermore, the fiscal year 2016 request includes funding to complete
    construction on LCS 9 through LCS 12, which was deferred due to
    sequestration in fiscal year 2013.
        The LCS Mission Modules (MM) program continues its efforts to field
    capability incrementally as individual mission systems become
    available, rather than wait for all the mission systems needed for the
    end-state capability. The direction from Secretary Hagel does not
    affect the near term content and funding needs of the LCS MM program.
    The Navy still must continue to procure Mission Packages (MP) for
    fielding aboard LCS 1-32. In addition, the future frigates will retain
    specific mission module capabilities to augment the ships' organic ASuW
    and ASW, as directed by the Fleet Commanders. In November 2014, the
    program declared Initial Operational Capability (IOC) for the Surface
    Warfare (SUW) MP after successful testing onboard USS Fort Worth (LCS
    3) in April 2014. The Mine Countermeasure (MCM) MP completed its final
    Increment 1 Developmental Test event in October 2014. The MCM MP is
    currently scheduled for Technical Evaluation and Initial Operational
    Test & Evaluation (IOT&E) in 2015. The ASW MP successfully completed
    its initial integration test onboard USS Freedom (LCS 1) in September
    2014, with operational testing scheduled to begin in 2016. This early
    operational test event will reduce integration risk through real-world,
    at-sea testing of the Advanced Development Model (ADM). A subsequent
    early deployment of the ASW MP ADM aboard USS Freedom (LCS 1) in 2016
    will further prove out the capabilities of the ASW MP. Operational
    testing will culminate in IOT&E in 2017. Significant developmental and
    operational testing has already been accomplished on both variants,
    with embarked ASW, MCM and SUW MPs. The LCS and ASW MP performed as
    predicted and marked the first time an LCS has tracked a submarine with
    variable depth sonar and a multi-function towed array. USS Freedom (LCS
    1) also served as the test platform for the Surface Electronic Warfare
    Improvement Program Block Two-Lite engineering development model (EDM)
    installation and testing. The fiscal year 2016 President's Budget
    requests funding for five MPs (two MCM, two SUW, and one EDM for ASW).
    The LCS, with a MP, provides capability that is equal to or exceeds the
    current capability of the ships that it is replacing.
        With four LCS in-service, operational experience continues through
    at sea testing, operations and rotational deployments. USS Fort Worth's
    deployment marks the beginning of continuous LCS forward presence in
    Southeast Asia, and will validate the class 3:2:1 (three crews, two
    ships, one ship always forward-deployed) rotational manning and crewing
    concept and mark the first deployment of the Navy's MH-60R Seahawk
    helicopter along with the MQ-8B Fire Scout on an LCS.
                                Amphibious Ships
        Amphibious ships operate forward to support allies, respond to
    crises, deter potential adversaries, and provide the nation's best
    means of projecting sustainable power ashore; they also provide an
    excellent means for providing humanitarian assistance and disaster
    relief. Amphibious forces comprised of Sailors, Marines, ships,
    aircraft and surface connectors provide the ability to rapidly and
    decisively respond to global crises without a permanent footprint
    ashore that would place unnecessary political or logistical burdens
    upon our allies or potential partners. There are two main drivers of
    the amphibious ship requirement: maintaining persistent forward
    presence, which enables both engagement and crisis response, and
    delivering the assault echelons of up to two Marine Expeditionary
    Brigades (MEB) for joint forcible entry operations.
        The Chief of Naval Operations and Commandant of the Marine Corps
    have determined that the force structure for amphibious lift
    requirements is 38 amphibious ships, fiscally constrained to 33 ships.
    Balancing the total naval force structure requirements against fiscal
    projections imposes risk on meeting this requirement. Based on the
    footprint of a 2.0 MEB assault echelon force, a minimum of 30
    operationally available ships are necessary to provide a force made up
    of ten Amphibious Assault Ships (LHD/LHA), ten Amphibious Transport
    Docks (LPD) and ten Dock Landing Ships (LSD). The fiscal year 2016
    shipbuilding plan will result in a projected amphibious ship force
    structure of at least 31 ships in the near-term and maintains at least
    33 ships throughout the 2020s and 2030s. At the end of fiscal year
    2016, the Amphibious Force Structure will be 31 ships, which includes 9
    LHD/LHAs, 10 LPDs, and 12 LSDs.
        LHA(R) class ships are flexible, multi-mission platforms with
    capabilities that span the range of military operations--from forward
    deployed crisis response to forcible entry operations. These ships will
    provide the modern replacements for the remaining LHA 1 Tarawa-class
    ship and the aging LHD 1 Wasp-class ships as they begin decommissioning
    in the late 2020s. USS America (LHA 6) and Tripoli (LHA 7) are
    optimized for aviation capability and do not include a well deck. USS
    America delivered to the Navy in April 2014 and was commissioned in
    October 2014. LHA 7 is currently under construction and will deliver in
    2018. LHA 8, the first Flight 1 ship, will have a well deck to increase
    operational flexibility and a smaller island that increases flight deck
    space to retain aviation capability. LHA 8 is funded in fiscal year
    2017 and fiscal year 2018, and is planned for delivery in fiscal year
    2024. LHA 8 will be competed as part of an amphibious and auxiliary
    shipbuilding acquisition strategy to support stability and
    affordability for this sector of the industrial base. The Navy expanded
    the early industry involvement efforts for the LHA 8 design and
    initiated a phased approach to the design for affordability of
    amphibious ships. fiscal year 2014 funding enabled affordability
    efforts that foster an interactive competition with industry partners
    in developing a more affordable, producible detail design and build
    strategy, and drive towards more affordable ships.
        The San Antonio-class (LPD 17) provides the ability to embark,
    transport control, insert, sustain, and extract elements of a MAGTF and
    supporting forces by helicopters, tilt rotor aircraft, landing craft,
    and amphibious vehicles. Two ships are under construction, John P.
    Murtha (LPD 26) and Portland (LPD 27), and will deliver in spring 2016
    and summer 2017, respectively. The fiscal year 2015 Consolidated and
    Further Continuing Appropriations Act provided $1 billion of funding
    toward a twelfth ship of class, LPD 28. The fiscal year 2016
    President's Budget requests the balance of funding for LPD 28, and cost
    to complete funding for LPD 27. The program will include targeted cost
    reduction initiatives to improve affordability of the ship. Procurement
    of LPD 28 will assist in mitigating some impacts to shipbuilding and
    combat systems industrial bases. LPD 28 will possess all of the key
    fundamental capabilities and characteristics associated with LPDs 17
    through 27, to include command and control, aviation operations and
    maintenance, well deck operations, and medical. There are fact of life
    changes due to obsolescence which need to be incorporated. LPD 28's
    design and construction features will, at the same time, exploit many
    of the ongoing LX(R) design innovations and cost reduction initiatives
    that are necessary for the program to achieve affordability goals while
    maintaining the high level capabilities of the LPD 17 class.
        LX(R) is the replacement program for the landing ship dock, LSD 41
    and LSD 49 classes, which will begin reaching their estimated service
    life in the mid-2020s. The Analysis of Alternatives Report was
    completed in April 2014. After thorough analysis, the Department has
    determined that using a derivative of the LPD 17 hull form is the
    preferred alternative to meet LX(R) operational requirements. This
    determination sustains the program's focus on requirements,
    affordability and total ownership cost. Program focus during fiscal
    year 2016 will be to finalize the requirements in the Capability
    Development Document and execute contract design efforts to meet
    acquisition milestones for procurement of the lead ship in fiscal year
    2020. The LX(R) contract design effort is part of the Navy's recent
    announcement of its acquisition strategy for the LHA 8, six T-AO(X)
    ships, and LX(R) contract design. Both General Dynamics NASSCO and
    Huntington Ingalls Industries, Ingalls Shipbuilding will participate in
    this limited competition.
        LX(R) is envisioned to be a flexible, multi-mission warship with
    capabilities that support execution of the full range of military
    operations. The need to support disaggregated or split operations away
    from the Amphibious Readiness Group or to deploy independently is a key
    driver for the design of the ship class. The inherent flexibility of
    amphibious ships is demonstrated by their support to 7 of the 10
    missions in the DSG. LX(R) will be a versatile, cost-effective
    amphibious ship--a success story in leveraging mature design while
    balancing cost and requirements to deliver key capabilities. The lead
    LX(R) will deliver in time for LSD 43's retirement in fiscal year 2027.
        The Navy plans to maintain 11 deployable LSDs in the active force
    until LX(R) delivers by rotating three LSDs to complete phased
    modernizations beginning in fiscal year 2016. This will extend USS
    Whidbey Island (LSD 41), USS Germantown (LSD 42), and USS Tortuga (LSD
    46) to a 44 year expected service life. This plan mitigates presence
    shortfalls and supports 2.0 MEB Assault Echelon shipping requirements.
                                Auxiliary Ships
        Support vessels such as the Mobile Landing Platform (MLP) and the
    Joint High Speed Vessel (JHSV) provide additional flexibility to the
    Combatant Commanders. The future USNS Lewis B. Puller (MLP 3), the
    first Afloat Forward Staging Base (AFSB) variant, was christened in
    February 2015, and will deliver in summer 2015. USNS Montford Point
    (MLP 1) completed its integrated testing and evaluation phase this past
    fall and the Navy continues to explore further use beyond Maritime
    Prepositioning Force to facilitate expeditionary operations. The Navy
    awarded MLP 4 AFSB in December 2014, and plans to request MLP 5 AFSB in
    fiscal year 2017.
        The JHSV provides a high-speed, shallow-draft alternative to moving
    personnel and materiel within and between the operating areas, and to
    supporting security cooperation and engagement missions. JHSV
    production continues with delivery of the fifth JHSV anticipated in
    April 2015. JHSVs 6-10 are also under contract. In fiscal year 2015,
    Congress provided funding for an eleventh JHSV. The Navy is exploring
    opportunities to further enhance JHSV's operational profile to support/
    enhance warfighter requirements such as Special Operations support,
    Maritime Interdiction Operations, submarine rescue, and ISR missions.
    Additional research is being applied to the stern ramp to increase its
    ability to conduct at sea delivery. The fiscal year 2016 President's
    Budget requests cost to complete funding for the JHSV program in order
    to restore funding reduced by fiscal year 2013 sequestration.
        Combat Logistics Force ships fulfill the vital role of providing
    underway replenishment of fuel, food, repair parts, ammunition and
    equipment to forward deployed ships and embarked aircraft, to enable
    them to operate for extended periods of time at sea. Combat Logistic
    Force Ships consist of T-AOE fast support ships, T-AKE auxiliary dry
    cargo ships, and T-AO fleet replenishment oilers. The T-AO and T-AKE
    ships serve as shuttle ships between resupply ports and their customer
    ships, while the T-AOE ships serve as station ships, accompanying and
    staying on-station with a Carrier Strike Group to provide fuel as
    required to customer ships.
        Navy continued its efforts to mature its concept for the
    replacement of the Kaiser-class (T-AO 187) of Fleet Replenishment
    Oilers. The new replacement oilers, currently designated as T-AO(X),
    will be double-hulled and meet Oil Pollution Act 1990 and International
    Marine Pollution Regulations. The fiscal year 2016 President's Budget
    request includes the lead ship in 2016 with serial production beginning
    in 2018. The total ship quantity is expected to be 17 ships. The
    Department recently announced an acquisition strategy for LHA 8, T-
    AO(X), and LX(R), and will limit this competition to NASSCO and HII
    Ingalls.
        Beginning in 2017, the Navy plans to begin procuring replacement
    ships for the four T-ATF 166 class fleet tugs. T-ARS(X) is a
    recapitalization project to replace the capabilities provided by the
    four T-ARS 50 class salvage ships. As noted in the Long Range
    Shipbuilding Plan, the Navy is considering a common hull to replace
    both the T-ATF and T-ARS; acquisition of a common hull would follow the
    acquisition approach described for the T-ATF(X) and would preclude the
    need to acquire a separate T-ARS(X) class.
               Affordability and the Shipbuilding Industrial Base
        Stability and predictability are critical to the health and
    sustainment of the Nation's shipbuilding industrial capacity. A healthy
    design and production industrial base is critical to achieving
    Department priorities and fulfilling Navy needs. Today's shipbuilding
    industry, with its interdependent suppliers and vendors, is a complex
    system where decisions made today have a cascading effect both in the
    near-term as well as years into the future. Perturbations in naval ship
    design and construction plans are significant because of the long-lead
    time, specialized skills, and extent of integration needed to build
    military ships. Each ship is a significant fraction of not only the
    Navy's shipbuilding budget, but also industry's workload and regional
    employment. Consequently, the timing of ship procurements is a critical
    matter to the health and sustainment of U.S. shipbuilding and combat
    system industries, and has economic impacts at the regional and local
    levels. It is important, therefore, for the Department to provide
    stability and predictability to the industrial base, including key
    suppliers and vendors, to maintain our ability to continue to build the
    future Fleet as outlined in the Long Range Shipbuilding Plan.
        The Navy has taken specific key acquisition and procurement actions
    to contain costs and sustain the industrial base, including:
          Stabilizing procurements through block buys and MYPs;
          Increasing competition;
          Controlling costs through stable designs;
          Strictly limiting change orders;
          Conducting targeted reviews;
          Pursuing cross-program common equipment buys; and
          Focusing on affordability.
        In addition, the Navy has made investments to support shipyard
    facility improvements, optimal build plans, conduct of affordability
    studies, lease for facilities improvement, design for affordability and
    modularity, combat system open architecture, and shipbuilding
    capability preservation agreements. These investments support
    affordability, minimize life-cycle costs, improve and ensure quality
    products, facilitate effective and efficient processes, and promote
    competition--which all support Department priorities.
                           Surface Ship Modernization
        The fiscal year 2016 President's Budget implements the CG/LSD
    modernization plan as modified by the fiscal year 2015 NDAA and
    Consolidated and Further Continuing Appropriations Act. This plan will
    provide the means to retain the best Air Defense Commander and Marine
    expeditionary lift capabilities through the 2030s. This plan paces the
    threat through the installation of the latest technological advances in
    combat systems and engineering in CGs 63-73 and LSDs 41, 42 and 46. As
    a result, these ships remain relevant and viable, extending the CGs
    service life out to 40 years, enabling the Navy to sustain dominant
    force structure. To date, the Navy has modernized CGs 52-58 with the
    Advanced Capability Build (ACB) 08 Combat System as well as substantial
    Hull, Mechanical, and Electrical (HM&E) upgrades, and has nearly
    completed modernization on CGs 59, 60, and 62 with the improved ACB 12.
    These investments have allowed the first 11 ships of the Ticonderoga-
    class to remain the world's premier Air Defense Commander platform,
    fully capable of integrating into the CSG construct or operating
    independently in support of Combatant Commander demands.
        The Navy has developed an affordable framework to retain the
    remaining eleven cruisers (CGs 63-73) in the active Fleet, through
    induction into a phased modernization period. Within the guidelines of
    the fiscal year 2015 Consolidated and Further Continuing Appropriations
    Act, the Navy will induct no more than two ships per year for no more
    than four years, and have no more than six ships in a modernization
    period at any given time. In fiscal year 2015, the Navy is inducting
    the first two ships, the USS Gettysburg (CG 64) and USS Cowpens (CG 63)
    into modernization. The fiscal year 2016 President's Budget request
    inducts the next two CGs, USS Vicksburg (CG 69) and USS Chosin (CG 65),
    into modernization in fiscal year 2016.
        The Navy will begin the modernization of these ships with material
    assessments, detailed availability planning, and material procurements.
    Subsequently, the Navy will perform HM&E upgrades, critical structural
    repairs, and extensive corrective and condition-based maintenance.
    These HM&E modernization and repair efforts will commence as soon as
    possible after entering this modernization period, and will include
    modernization industrial periods. The HM&E-centric maintenance and
    modernization industrial periods will include modifications that are
    part of the Cruiser Modernization program of record, such as structural
    modifications and maintenance, including tanks and voids, and mission
    life extension alterations. Other preparatory work for the combat
    system modernization, such as equipment removal and space preparations
    may also be accomplished during these periods. These modernization
    industrial periods can be scheduled at times when there is a shortage
    of work in the various homeports, thereby leveling the work load and
    effectively utilizing industrial facilities. Without the pressure of
    meeting near term Fleet deployment schedules, the work can be planned
    in the most economical and efficient manner, including reducing the
    need for costly overtime rates and hiring subcontractors to supplement
    shipyard workforce. The final phase will include combat system
    installation, integration, and testing. This will occur concurrently
    with re-crewing the ship, immediately preceding re-introduction to the
    Fleet. With combat systems modernization occurring immediately prior to
    restoration, these ships will have the latest combat systems upgrades,
    thus mitigating the risk and cost of technical obsolescence. The Navy
    intends to draw down the manpower for these CGs during their
    modernization, to reduce the cruiser costs during the period. The plan
    is to complete modernization of each cruiser on a schedule that
    sustains 11 deployable Air Defense Commander CGs (one per Carrier
    Strike Group) into the 2030s. Under the Navy's original phased
    modernization plan proposed in the fiscal year 2015 President's Budget,
    the final CG retirement would have occurred in 2045, at a significantly
    reduced cost to the Navy, and would have relieved pressure on the
    shipbuilding account largely consumed in the 2030s with building OR
    SSBNs and aircraft carriers.
        Similarly, the Navy plans to perform the final Whidbey Island-class
    midlife modernization as well as to extend two LSDs through this plan.
    This plan completes the HM&E midlife and modernizes combat systems/
    command, control, communications, computers, collaboration, and
    intelligence on USS Tortuga (LSD 46) (thereby achieving 40 year
    expected service life), while providing for additional post-midlife
    modernization for USS Whidbey Island (LSD 41) and USS Germantown (LSD
    42). LSD 41 and 42 will receive additional structural, engineering, and
    combat systems modernizations to extend their expected service life to
    45 years. LSD 46 will be inducted into modernization in fiscal year
    2016.
        The fiscal year 2016 President's Budget also includes funding for
    the modernization of four destroyers. To counter emerging threats, this
    investment is critical to sustain combat effectiveness and to achieve
    the full expected service lives of the Aegis Fleet. The destroyer
    modernization program includes HM&E upgrades, as well as advances in
    warfighting capability and open architecture combat systems. This
    renovation reduces total ownership costs and expands mission capability
    for current and future combat capabilities. However, due to fiscal
    constraints, we were compelled to reduce the combat system
    modernization of one DDG Flight IIA per year starting in fiscal year
    2018.
                                   Connectors
        The Seabasing Joint Integrated Concept requires surface and
    vertical lift capability to transport personnel, supplies and equipment
    from within the sea base and maneuver them to objectives ashore.
    Surface and aviation connectors with enhanced speed and range will
    provide future expeditionary force commanders greater flexibility to
    operate in contested environments. While the aviation component of our
    connector capability has seen significant modernization with the
    fielding of the MV-22 and continuation of the CH-53K program, our
    primary surface connectors, the landing craft air-cushion (LCAC) and
    the Landing Craft Utility (LCU) are reaching the end of their service
    life and require modern replacements.
        The President's fiscal year 2016 Budget includes the Ship to Shore
    Connector (SSC) air-cushioned vehicles as the replacement for the aging
    LCAC while also continuing investment in the LCAC service life
    extension program (SLEP) of 72 active LCACs to mitigate the gap as the
    SSC is developed and fielded. A planned Surface Connector (X)-
    Recapitalization (SC(X)) program will recapitalize the aging LCU 1610
    class.
        These platforms are essential in connecting the combat power and
    logistical sustainment that the sea base provides, with the forces that
    are operating in the littorals and inland for all missions. The
    Department will continue to explore future connector options that will
    increase our ability to exploit the sea as maneuver space by increasing
    range, speed, and capacity.
                                    Summary
        The Department of the Navy continues to instill affordability,
    stability, and capacity into the shipbuilding, aviation, and combat
    vehicle plans to advance capabilities and meet the DSG and Fleet
    mission requirements. Our force is focused on global reach and access
    with investments to enable global presence, sea-control, mission
    flexibility, and when necessary, interdiction.
        Continued Congressional support of the Navy's plans and budgets
    will help sustain a viable shipbuilding industrial base. The fiscal
    year 2016 President's Budget request funds nine ships: two DDG-51
    destroyers, three LCS, two Virginia-class submarines, one LPD 17, and
    one T-AO(X). The request supports the right balance between
    requirements, affordability, and the industrial base.
        The Department of the Navy stands ready to answer the call of the
    Nation. We thank you for your continued support of the Navy and Marine
    Corps and request your support of the fiscal year 2016 President's
    Budget for the Department of the Navy.

        Senator Wicker. Thank you, Secretary Stackley.
        Vice Admiral Hilarides.

     STATEMENT OF VADM WILLIAM H. HILARIDES, USN, COMMANDER, NAVAL
                          SEA SYSTEMS COMMAND

        Admiral Hilarides. Thank you, Chairman Wicker, Senator
    Hirono, distinguished members of the committee. Thank you for
    inviting me to take part in this hearing. I am honored to be
    here.
        I would like to just echo one thing that Secretary Mabus
    said during his--one of his hearings last month. We would not
    have the fleet to put to sea without our Navy civilians. They
    are the scientists, engineers, designers, contract officers,
    and acquisition professionals who oversee the construction of
    our newest ships and do so much of the repair work on our in-
    service ships.
        As you might remember, the Naval Sea Systems Command
    (NAVSEA) family lost 12 shipmates during the shooting at our
    headquarters on September 16th, 2013. We are just now getting
    back to normal, with the last of our people returning to their
    permanent offices in the Navy Yard this week. Over the last 18
    months, I have been a first--have seen firsthand the absolute
    dedication of these Navy civilians to our Nation and our Navy.
    Despite the tragedy, they remained focused on supporting the
    fleet, and we didn't miss a beat. I owe it to my people to
    recognize them in this forum.
        Thank you for the opportunity, and I look forward to
    answering your questions.
        Senator Wicker. Thank you. I'm sure those individuals
    appreciate that recognition.
        Vice Admiral Mulloy.

    STATEMENT OF VADM JOSEPH P. MULLOY, USN, DEPUTY CHIEF OF NAVAL
       OPERATIONS, INTEGRATION OF CAPABILITIES AND RESOURCES (N8)

        Admiral Mulloy. Sir. Chairman Wicker, Ranking Member
    Hirono, and distinguished members of the subcommittee, I'm
    honored to be here today to testify on your Navy's seapower
    power-projection forces. I look forward to working with you all
    this year.
        In developing our 2016 President's Budget, we carefully
    analyzed what our Nation needs in order to meet the missions of
    the defense strategic guidance in the most recent Quadrennial
    Defense Review. This analysis looked at ends, ways, and means
    necessary to, one, fight and win today's wars while building
    the ability to win tomorrow's; to operate forward to deter
    aggression; and be ready to fight and responsibly employ our
    diverse force. We remain committed to rebalancing the majority
    of our naval forces to the Asia-Pacific, with approximately 60
    percent of our ships and aircraft in that region by 2020.
    However, with the reality of current budget--Federal budget
    limitations and our commitment to do our part in bringing our
    Nation's fiscal house in order, we have made many difficult
    choices to best balance capacity, capability, readiness, and
    the industrial base, and still meet the missions of the defense
    strategic--pardon me--defense strategy, albeit with some risk.
        Our 2016 budget represents what we feel is the minimum
    needed for your Navy to continue to be where it matters, when
    it matters. It reflects the difficult choices and actions we
    had to take due to shortfalls over the last 3 years. We are
    down $25 billion due to sequestration in 2013 and the
    Bipartisan Budget Act in 2014-2015. It has to stop. We hang on
    and make do. But, the threats we face don't have to make do.
    Thus, any reduction in 2016, whether it's from sequestration or
    action by Congress to set some level in between, will be
    extremely challenging. If limited to sequestration-level
    funding, the Nation would need to think about what kind of
    military we can afford, how we would need to reprioritize our
    missions in that situation. This analysis would need to factor
    in the global environment, the Nation's defense priorities,
    America's role in the international security environment, and
    the capabilities and threats of our adversaries, as well as the
    timing of sequestration and method of implementation. That
    analysis will dictate what kind of cuts would be required.
        We have to do the analysis first, revise the defense
    strategy before taking specific impacts. We fight as a joint
    force, we must adjust as a joint force.
        We ask you for your support in providing the strategy-based
    naval force that our 2016 budget would sustain, and avoid the
    budget-based military that sequestration would bring.
        I look forward to answering your questions.
        Senator Wicker. Thank you very much, gentlemen. We
    appreciate your testimony.
        I'm going to defer my questions until later on, and
    recognize Senator Ayotte to begin the questioning.
        Senator Ayotte. I want to thank the chairman and ranking
    member.
        I want to thank all of you for what you do for the country,
    and especially the sailors and marines and the civilian
    workforce that work underneath you to keep our country safe.
        I wanted to follow up with what you said, Admiral
    Hilarides, about the civilian workforce. You know, as you know,
    as we look at the great work done at the Portsmouth Naval
    Shipyard, which I know that Senator King shares in the pride we
    have, of course, in the shipyard, this is a very important
    component of the shipyard. So, can you tell me how the
    shipyard's doing and--from your impression?
        Admiral Hilarides. Yes, ma'am. Happy to report that
    Portsmouth Naval Shipyard is currently delivering its
    availabilities on time. They are meeting all their benchmarks
    and are performing at a very high level. They support
    additional detachments out in San Diego. They're doing in-
    service submarine work there, as well. We do have a bump in
    hiring at Portsmouth that'll help bring them to their full
    capacity. But, I'm pleased to report that Portsmouth's doing
    very well, ma'am.
        Senator Ayotte. Well, that's great. We're also really
    proud--I understand, on the Topeka, the California, and the
    Springfield, they were able to perform ahead of schedule. So,
    we hope to do more of that.
        Admiral Hilarides. Yes, ma'am.
        Senator Ayotte. Very proud of them. So, thank you.
        I wanted to follow up in that regard on the importance of
    our attack submarine fleet. I know that the chairman, in his
    opening statement--and, I believe, the Ranking Member, as well,
    may have referenced--when it comes to the Virginia-class
    submarines, as we look at the retirement of the Los Angeles-
    class, which is happening more quickly, we're going to be in a
    position where the current number of attack submarines will
    drop, in the next decade, from about 54 now to about 41, yet--
    what's been the request, in terms of the need by our combatant
    commanders, for attack submarines? As I understand it, we're
    only meeting about half of their requests, at this point.
        Admiral Hilarides. Yes, ma'am. We're meeting approximately
    54 percent of their request for our forces out there right now,
    with the submarine force we have.
        Senator Ayotte. So, one of the things, as we look at going
    forward, it seems to me very important that we stay on track to
    continue building the two Virginia-class submarines a year.
    Otherwise, we're going to have a pretty significant gap, in
    terms of our capability that we need to defend the Nation and
    the need for the attack submarine fleet. Would you all agree
    with me on that?
        Mr. Stackley. Yes, ma'am.
        Senator Ayotte. How important is it that Congress provide
    reliable and sufficient funding so the Navy can fully implement
    the Block-4 multiyear procurement contract, going forward?
        Mr. Stackley. Well, the basis of the savings that we're
    achieving in the Block-4 contract are all tied to stability of
    funding. So----
        Senator Ayotte. Right.
        Mr. Stackley.--when we came forward with a certification on
    multiyear and basically took credit for the savings, that was
    all predicated on future budgets being supported in a timely
    manner.
        Senator Ayotte. I also wanted to follow up--as we look at
    the reduction in the capacity for--the undersea strike capacity
    that all of us are worried about--I know recently, before the
    full committee, the Chief of Naval Operations said that they're
    studying--that you are all studying whether the Virgnia Payload
    Module (VPM) program could be accelerated. Could you comment on
    that?
        Mr. Stackley. Yes, ma'am. The--what's referred to as VPM is
    an upgrade that's targeted for the first boat of the follow-on
    Block-5 multiyear in fiscal year 2019. We cannot restore the
    capacity of the SSGNs fast enough, because they're going to go
    out in a 3-year period, in the mid-2020s. With each SSGN--they
    carry 154--the capacity for 154 Tomahawks. So, with VPM, we add
    28 Tomahawk capacity per Virginia. So, as you can see, you
    know, just doing the math, we have to, basically, include VPM
    for a long period of time. It's about 22 boats, in total, that
    make up the capacity that you lose. The earlier we can get
    started on that, the better.
        So, what we have done is--working with industry, is, rather
    than settle for the first boat in 2019, we've asked to take a
    look at: Is it feasible to accelerate that to fiscal year 2018?
    That analysis has just started, frankly, and we'll get a first
    look at that, at the end of this month, with more details later
    on this summer.
        If we are able to do that, that will help to just buy down
    some of that risk associated with the SSGNs retiring. But, at
    the same time, we have to be very mindful of the amount of work
    that's coming our way, in terms of submarines, because we'll
    have Virginia, we'll have the introduction of VPM, and we'll
    have the Ohio replacement all in that period of time. So, the
    ability to accelerate VPM cannot be done at the expense of
    stability across the rest of our submarine programs.
        Senator Ayotte. Well, I'm really appreciative that you're
    looking at this acceleration, given the need that we know is
    very apparent. So, I appreciate the need, obviously, to look
    across the whole Navy to be able to perform what you need to do
    with the Ohio-class, as well. But, I'm--this acceleration, I
    think, would be very important, in terms of our undersea strike
    capability.
        Do you--you were saying, Mr. Secretary, that you expect
    that the study on this may be--when can we expect to hear your
    results?
        Mr. Stackley. I'm going to get a quick look. What I've
    asked is, first, is it feasible? Second, is it sensible? It
    might be feasible, but, given everything else we have going on
    in submarines, it might not make sense to do, it might add more
    risk than it's going to resolve. Third, if it is feasible and
    sensible, what do we need to do, in fiscal year 2016
    specifically, to ensure we retain the option of going forward?
        Senator Ayotte. Well, that's excellent, because, obviously,
    I think that's something that this committee would be very
    interested in working with you in the upcoming authorization.
        So, thank you all for what you do for the country.
        Senator Wicker. Thank you, Senator Ayotte
        Our Ranking Member is also willing to defer questions to a
    later time in the hearing. The order of questioning will be
    Senator Kaine, followed by Tillis, King, Rounds, and Sessions.
        Senator Kaine.
        Senator Kaine. Thank you, Mr. Chair.
        I've never been in a hearing where the Chair and Ranking
    have deferred. It's the last-shall-come-first day. So, that's a
    good thing.
        The comments that you made about the civilian workforce at
    the Navy yard, here, is an important one, and I want to pick up
    to begin on what Senator Ayotte indicated. Your written
    testimony is an eloquent tribute to the combined nature of--
    there are sailors, but also the civilian workforce; and the
    contractors, who are part of the broader mission, are critical;
    and the stability of that workforce is critical; and sequester
    and other budgetary actions over the last few years have
    jeopardized that. I was recently at one of our ship repair
    facilities in our Portsmouth--Portsmouth, Virginia--and ships
    that were in dock undergoing repair, the commanding officers of
    the ships were standing there, pointing out the workers, and
    they were saying, you know, ``They are like sailors, to me. You
    know, the work that they do is every bit as important as the
    folks who are onboard the ship.'' That sense of teamwork is a
    powerful feature of what you do. So, I commend you for
    recognizing that in your testimony.
        I want to get into some specifics on the shipbuilding.
    We've had testimony from the Chief of Naval Operations (CNO)
    Greenert, and, Secretary Stackley, I know you have followed
    this, as well. Secretary Mabus recently said he wants to
    protect shipbuilding at all costs. But, if we do not receive
    sequester relief, there--I think it's--Secretary Mabus
    indicated that up to nine ships will not be completed during
    the Future Years Defense Program (FYDP) if the sequester
    occurs. If we do not get sequester relief, how would the Navy
    approach this issue of which platforms don't get done?
        Mr. Stackley. Yes, sir. Let me first by--I'm just going to
    reiterate and reemphasize exactly what Secretary Mabus said.
        Senator Kaine. Great.
        Mr. Stackley. Our first priority is going to be placed on
    shipbuilding, because it takes 30 years to build a Navy. It
    does take 30 years to build a Navy. Senator Ayotte referred to
    the gap that we've--that we're staring at in the out years
    associated with Virginia. That gap is based on decisions that
    were made 10 to 15 years ago about going down--you know, our
    ability to get up to 2 per year. So, that--those decisions, 10
    to 15 years ago, impact the fleet's ability in the late 2020s
    and 2030s. We cannot do that lightly. So, regardless of what
    happens in the budget, our first priority will be to take care
    of shipbuilding, in accordance with the force structure
    assessment that the CNO submitted in the 2012 timeframe.
        The impact of sequestration, the magnitude of it, what the
    Secretary was referring to was our ability to protect it, to
    the extent that we have submitted our--you know, the plan
    inside the FYDP in the 30-year report. That's at great risk.
    So, while it will be a top priority, we are going to have to go
    back and defend, line by line, ship by ship, what stays and
    what is placed at risk, in the event of sequestration. I can
    tell you that, today, we have not done that. We have not gone
    down the path of making reductions to our shipbuilding plan,
    because, one, we believe that is the size and shape of fleet
    that we need to meet our security requirements. So, we're not
    going to be the first one to go down that path. In all cases,
    what we do is, we look to balance our force.
        So, across the spectrum, from carriers to submarines to
    surface escorts to amphibs to auxiliary ships, we need a
    balanced force to meet the full range of missions and to,
    basically, support the degree of presence that's called for
    upon our Navy to keep about a hundred ships deployed constantly
    across the globe.
        So, if you're looking for specifics, in terms of what we
    would cut in our shipbuilding program in the event of
    sequestration, my first response is, that's the last thing we
    would cut. Then, if we are handed the bill, if, in the end,
    Congress' decision is that we are going to drop the defense
    budget, then we're going to have to take a hard look at that
    balanced force and how much of it we've got to retain to
    minimize the risk to our National security.
        Senator Kaine. That gives me a sense for how you'd approach
    the challenge, which I hope we don't have to approach. Together
    with others who serve both on the Budget and Armed Services
    Committee, I'm very committed to working to try to minimize the
    sequester impact.
        Mr. Stackley. Not to interrupt you or belabor the point,
    but, just last year, before this subcommittee and the full
    committee, the discussion and debate was over the CVN-73 George
    Washington, where that did not come forward in the 2015 budget
    request, and the basis for that not coming forward was the
    concerns regarding the impact of sequestration and whether or
    not we would start something that we could not complete under
    that reduced budget. So, that's an example of the significance
    of the impact of sequestration on our force.
        Senator Kaine. I appreciate my colleagues working together
    last year to make sure that we were able to avoid that.
        I commend you, Secretary Stackley, and your team. You
    kept--the Ford-class carrier obviously is a huge issue every
    year in this committee, but, for the last 3 years, you've held
    that project within cost caps. I know some of the challenge
    with the cost of that has been the new systems that have been
    installed, the propulsion and other systems. But, I gather
    that, just from your last comment, that carrier refueling is
    one of the things that would be in jeopardy if you were forced
    to change the budget downward to the sequester cap level.
        Mr. Stackley. I am not offering that, sir, but if you just
    replay the tape from last year, that's where the debate was.
        Senator Kaine. Last question I want to ask deals with the
    Ohio-class replacement. I guess there's a current cost-shift
    estimate of--4.9 to 5.3 billion is the current estimate. How
    confident are you--is the Navy with that current estimate for
    the Ohio-class?
        Mr. Stackley. We have a pretty intense cost-reduction
    effort in place with the Ohio as it's being designed. So, we're
    not--we did not take the requirements, pass them over to the
    design community, tell them to design the boat, then estimate
    the cost and figure out--then figure out how to get the cost
    down. We are--we set the cost targets and caps on this boat
    from the--on the front end. In fact, we adjusted the
    requirements on the front end to get the cost estimates down.
    Then, as we go, as we mature that design, we are continually
    updating the cost while inserting good cost-reduction
    initiatives to keep it in the context or framework of the
    targets that we've set.
        So, actually, the initial cost estimate for the follow
    boats--boats 2 through 12, on average, was about $5.8 billion,
    in 2010 dollars. We base-date it. Through this cost-reduction
    program, we're--today's estimate, using our cost-estimating
    community's standards, is about $5.2 billion a boat. So, we're
    not at the 4.9 target that we set for ourselves yet, but we're
    continuing to attack opportunities.
        In terms of degree of confidence, I can only say that
    affordability has been a touchstone for this program from day
    one. We have certain requirements that we've got to drive home
    in order to ensure that the Ohio replacement meets the degree
    of performance that we count on for our strategic deterrent
    force. But, at the same time, we are finding opportunities to
    leverage mature technologies, we're porting over systems from
    Virginia, from the strategic weapons systems, so we're avoiding
    development and risk in that regard. So, the focus of new
    development or new design is really on some unique aspects of
    the Ohio replacement, where we've got our arms wrapped around
    it.
        I'd say today our confidence--you know, I would never go
    much above moderate confidence at this stage, but the entire
    enterprise has an eye on affordability each step along the way.
    That includes the CNO. The CNO is the requirements officer on
    this program. As we track, jointly, cost--as we go through the
    development, he has his hand on the helm to ensure that, if we
    need to go further, in terms of adjusting requirements, where
    it makes sense to keep cost under control, we'll do that.
        Senator Kaine. Great. Thank you, Mr. Secretary.
        Thank you both.
        Mr. Chairman.
        Senator Wicker. Senator Tillis.
        Senator Tillis. Thank you, Mr. Chair.
        I want to talk a little bit about the Marine Corps mission.
    The Commandant of the Marine Corps has frequently stated that
    the combatant command requirement for amphibious ships would
    exceed 50. The absolute minimum number to meet the demands of
    the Marine Corps, I think, is somewhere around 38. Yet, we have
    30 operating today, and we'll never attain an amphibious fleet
    of more than 34 across the 30-year shipbuilding plan. I'm kind
    of curious. I know that Senator Wicker was first among other
    Senators who worked to provide funding, I think, for the 12th
    landing platform dock, and--the authorization, and then, I
    think, some partial funding in 2014. What more do we need to do
    to address this gap?
        Mr. Stackley. Sir, let me start with the 50, if I can, and
    walk you through. I would say 50 amphibs reflects combatant
    commanders' demand because of the flexibility that the amphibs
    provide to the operating forces. It is an extremely flexible
    platform for operations against a full range of scenarios. So,
    they're in high demand, but at no point in time do we have a
    plan to build that many amphibs. The--our requirement for
    amphibs is----
        Senator Tillis. I'm thinking more along the minimum
    requirement of the 38.
        Mr. Stackley. Yes, sir. So, our requirement for amphibs is
    driven by major combat operations, and specifically it's the
    ability to provide amphibious lift for two marine expeditionary
    brigades. The number of ships required to do that is 30. That's
    a 30 mix of big-deck amphibs, LPDs, and LSD-41 class or their
    replacements.
        So, in order to provide 30 for major combat operations,
    notionally you require 38 amphibs, recognizing that some number
    will be in depot maintenance and otherwise unavailable for the
    operations. Five years ago----
        Senator Tillis. What is the trajectory for 34 over the next
    30 years?
        Mr. Stackley. I'm sorry, sir?
        Senator Tillis. Am I correct that we're talking about
    attaining somewhere around 34--
        Mr. Stackley. Yes, sir.
        Senator Tillis.--across a 30-year period? How does that fit
    with the needs?
        Mr. Stackley. Yes, sir. So, 34 was an agreement between the
    CNO and the Commandant, approximately 5 years ago, that
    recognized a couple of things. First and foremost, it
    recognized just the fiscal environment that we're in. So, the
    decision was that there will be some risk accepted, in terms of
    the ability to provide the full capacity of lift for two marine
    expeditionary brigades. In other words, some elements of the 2
    Marine Expeditionary Brigades (MEB's) would come in a follow-on
    echelon if we could not produce 30 amphibious ships of the
    right mix for the major combat operations.
        Senator Tillis. Over the time horizon, I think your 5-year
    budget has the first LX amphibious dock landing ship scheduled
    for procurement in fiscal year 2020. In talking about the long-
    term shipbuilding plan, there are always risks of other costs
    and surprises, going forward. So, should we consider
    accelerating the procurement of this ship, in view of the
    looming pricetag for the Ohio replacement plan, beginning, I
    think, in fiscal year 2019?
        Mr. Stackley. Yes, sir. So, today we have advanced
    procurement for LX(R) in fiscal year 2019. The timing of the
    LX(R) is directly coupled to the retirement of the ship class
    that it's replacing, the LSD-41/49 class. Over the course of
    the past year, in terms of our budget profile, what we have
    done is, we've brought the follow ships of the LX(R) program to
    the left to mitigate that risk. We have not been able to bring
    LX(R), the lead ship, to the left, simply because of all the
    competing priorities in the budget.
        To specifically answer your question, ``Would it help, in
    terms of risk?''--it would help, in terms of risk, but then it
    becomes a matter of, Where have we shifted that risk?
        Senator Tillis. By the way, any of--at any point, if the
    other gentlemen want to weigh in, I'd be happy to hear your
    thoughts.
        Admiral Mulloy. Yes, sir. I'd like to comment.
        In terms of--you're right for the time of being not above
    34 during this 5-year defense plan. But, when you look at the
    30-year shipbuilding plan, of which it's still under review in
    the Pentagon, but the tables have been provided to the
    committee, we achieve 38 amphibs in 2028, and actually have--we
    start getting above 34, grow to that point, and then we
    stabilize at 36 or 37. That year that we hit 38 is the year
    before the submarine force hits the bottom, so that's the
    tradeoff we talked about in shipbuilding, is that I--at the
    same time I am building amphibs, I am coming down on
    submarines, then there's nothing we could do, because, 15 years
    ago, we went a number of years with no fast attack submarines
    (SSNs), and then we went one a year for 7 years. So, we have to
    make a tradeoff of what we accelerate to build.
        But, we will build in the 30s, and stay in the mid-30s
    throughout the period of this 30-year shipbuilding plan. We
    actually get to 38 in 2028 and stay at 36 or 37 after that if
    we get the funding of PB-16 and the full FYDP.
        The one other question about sequester funding is, it
    requires stability. Because the Budget Control Act law is
    written one year at a time, we submit a budget of one year at a
    time. We have to have some expectation from the Hill that the
    other years will come when you sign multiyears for 10
    submarines. When I sign up to be a large-deck amphib that
    builds over 2 years, the commitment for LHA-8 is that, in 2017/
    2018, the money arrives. The commitment for LX(R) is that the
    money arrives in 2021. So, as the Navy's Chief Financial
    Officer, I've got to look at those projections. The
    shipbuilding tables I give you are only based upon the strength
    of what we get back from the Budget Committee and the Armed
    Services Committee.
        Senator Tillis. I'd add--this would be a general question
    for all of y'all so I can stay within my time. We heard a
    testimony in the Senate Armed Services Committee from a general
    who said that we want an Armed Services who would never allow
    our men and women to enter into a fair fight. In other words,
    we always want to have overwhelming capacity, regardless of the
    category. You all have been very good at just stating that
    you're working within the confines of the money you're
    provided. But, with respect to the Navy, where there seems to
    be a diminishing level of capacity, and then you look at other
    countries which seem to have an increasing level of capacity,
    at what point in time do we actually enter a fight with our
    fleet that is a fair fight? In other words, we're matched up
    pretty well. Is that a time that's ahead of us in the near
    future with some of the countries that are clearly building an
    increasing capacity?
        Thank you.
        Admiral Mulloy. There is no time in the immediate future.
    But, I will tell you, if we don't provide some kind of economic
    stability, that that point would be--you know, we get closer. I
    think right now we've laid out what we think is a coherent plan
    and a strategy. We recently rolled out the maritime strategy
    that talks about how we engage around the world. The risk of
    the unknown is, there are competitors on the Eurasian landmass
    that are rapidly developing high-tech weapons that target us
    and target our assets around the world. Then we're also engaged
    with a number of other lower-tech countries. The proliferation
    of weapons is a real threat. Therefore, I think we've laid
    out--as the President's Budget fiscal year 2016 (PB-16) plan
    for that 5 years and the 30-year plan after that are important
    to us.
        I can't give you a year when that would pass, sir. We have
    a preponderance of events. We have phenomenal sailors and
    marines out there on our ships, and phenomenal pilots; and
    everyone's engaged to be ahead. But, the importance is to do
    the research, development, test, and evaluation (RDT&E) and the
    construction through every asset of our industrial base to
    build the overwhelming capability, as well as the capacity, to
    take on the threats to national security, sir.
        Senator Wicker. Thank you, Senator Tillis.
        Senator Tillis. Thank you, Mr. Chair.
        Senator Wicker. Senator King.
        Senator King. Thank you, Mr. Chairman.
        Mr. Stackley, one--Secretary Stackley--one specific
    question. Last May, in response to a request, the Navy stated
    the Navy position is that the 2002 memorandum of understanding,
    the so-called Swap-1 agreement, remains in full force and
    effect and requires the Navy to award a DDG-51 or equivalent
    workload to Bath Iron Works (BIW) if the Navy awards the LPD-28
    on a sole-source basis. Now, I understand, in this budget,
    that's happening--the LPD-28 funds are going to be completed.
    Does that--what I just read from the response we got from the
    Navy, is that still the Navy's position? Because we got a
    response recently, just this week, that indicated you're
    considering options. I trust that means you're considering how
    to fulfill that, not whether or not it still exists.
        Mr. Stackley. Yes, sir. Let me, first, describe that the
    opening statement of that swap agreement talks about, ``In
    order to provide stability for a shipbuilding industrial
    base''----
        Senator King. Right.
        Mr. Stackley.--``and affordability for our ship programs,
    then the following.'' In 2002, both shipyards were in peril
    in--that were involved in the swap. So, what that swap did was
    help stabilize both shipyards.
        At the time, the LPD-17 program, the ultimate quantity, of
    10 versus 11 versus 12 ships, was undecided, so what was left
    open was that, in the future, if further LPDs are awarded, then
    a commensurate DDG-51 or equivalent would be awarded to Bath
    Iron Works to balance out the swap agreement.
        In the past 13 years, it's been a very dynamic shipbuilding
    program back and forth between the two shipyards. So, if we
    were to simply reassess, ``Are we today stable--relatively
    stable across the two shipyards, across the shipbuilding
    program?''--you might get a different answer from, ``Are we, or
    are we not, one-for-one, in terms of parity regarding the swap
    agreement?''
        What we are doing is, we're taking a look at, first, the
    state of the two shipyards, what it would infer, in terms of an
    LPD-17--further LPD-17 being awarded to Ingalls, in accordance
    with our budget request, and then what would be commensurate at
    BIW to balance that out. We have had very preliminary
    discussions with industry. The award of that LPD---the LPD-28
    would be late in 2016. So, we believe we have time and tools
    available to balance out that agreement with both shipyards.
        Senator King. But, it is your intent to follow through on
    the phrase you're using as ``balance out.''
        Mr. Stackley. I think ``balance out,'' because what we're
    down to looking at is workload and timing of that workload. The
    timing for the LPD-28 award might not be the right time for a
    balance--the balancing of workload at Bath Iron Works.
        Senator King. Fine.
        On the larger question, I really appreciate the report that
    was submitted a couple of weeks ago--I would commend it to my
    colleagues--on the Navy shipbuilding industrial base. It's
    sobering reading, particularly a chart on--let's see, trying to
    find the page number--well, it's Figure 4.5, which indicates
    that shipbuilding employment, which averaged about 60,000
    throughout the country for the last almost 20 years, is now
    down by a third.
        Mr. Stackley. Sir.
        Senator King. That's a--employment is part of the picture.
    Also, investment and the web of suppliers that's at risk. I--my
    concern is that decisions we make today--if we don't replace
    sequestration, decisions we make today to defer shipbuilding
    programs will have 30-year consequences that we can't foresee.
    Is that your view?
        Mr. Stackley. Yes, sir. The--we have several shipyards in
    our industrial base that are in a very fragile position, and--
    --
        Senator King. We don't have that many shipyards to--it's
    not like we have 50 shipyards out there.
        Mr. Stackley. We have--as I described in my opening
    statement, we have eight shipyards currently building U.S. Navy
    ships. Of those eight shipyards, about half of them are a
    single contract away from being what I would call ``not
    viable.'' In other words, the workload drops below the point at
    which the shipyard can sustain the investment that it needs to
    be competitive and the loss of skilled labor that comes with
    the breakage of a contract. They'd be challenged to be able to
    recover that skilled labor. So, they would quickly find
    themselves outside of the market.
        Senator King. What that results in is a lack of capacity to
    meet the country's needs, both now and certainly in the future.
        Mr. Stackley. You lose capacity, and you also lose
    competition.
        Senator King. Losing competition means that you don't--the
    Navy doesn't get the best price.
        Mr. Stackley. Yes, sir.
        Senator King. The other problem, as I understand it, is
    that it makes it very difficult, the current budgetary
    situation, to do multiyear contracts, which is another way the
    taxpayers can save money on these projects.
        Mr. Stackley. I think that Congress has been very helpful
    with regards to multiyear. As we are able to bring forward the
    business case that argues for a multiyear contract, where the
    savings are achieved, Congress has been supportive of those
    cases. So, today the Virginia multiyear has been successful.
    We're hitting the targets on that contract. The DDG-51
    multiyear, likewise. So, as we're able to bring the business
    case forward, Congress has been supportive.
        Senator King. But, the--if the--if we reimpose
    sequestration this year, as you've testified, that would be a
    severe impact across the board.
        Mr. Stackley. What that undercuts is our business case,
    because it destabilizes the shipbuilding program, and it makes
    it harder for us to be able to certify that we're going to be--
    that we have enough stability in order to come forward with
    that multiyear request.
        Senator King. Well, most of us have been in hearings in
    recent weeks with regard to what our potential adversaries are
    doing, particularly China and Russia. They are on a very
    aggressive----
        Mr. Stackley. Yes, sir.
        Senator King.--buildup in both areas. It would be ironic
    and dangerous, it seems to me, to be following the opposite
    course.
        Mr. Stackley. Concur.
        Senator King. Thank you.
        Thank you, Mr. Chairman.
        Senator Wicker. Thank you, Senator King.
        Let me--before I recognize the distinguished chairman of
    the committee, let me just follow up.
        I think Senator King has engaged in a very important line
    of questioning about the importance of all of our yards. Would
    it be fair to say, Mr. Stackley, with regard to the Memorandum
    of Understanding (MOU), that you've been in constant
    conversation and contact with both Ingalls and BIW on this
    issue and on your thoughts about fulfilling this, as Senator
    King was asking?
        Mr. Stackley. Sir, I've been in dialogue with the CEOs of
    both Huntington Ingalls industries and General Dynamics since
    the Navy's budget came together requesting the balance of
    funding for the LPD-28.
        Senator Wicker. Okay. Thank you.
        Senator McCain.
        Senator McCain. Thank you, Mr. Chairman.
        Secretary Stackley, what--on the issue of the Gerald R.
    Ford, the Director of Operational Test and Evaluation annual
    report says, ``The reliability of four systems--the
    electromagnetic aircraft launching system, advanced arresting
    gear, dual-band radar, and advanced weapons elevators--are most
    significant risk to the USS Gerald R. Ford initial operation,
    test, and evaluation.'' What's the status?
        Mr. Stackley. Yes, sir. Let me take them one by one.
        The electromagnetic aircraft launching system and the
    advanced arresting gear were both land-based tested at our
    facility at Lakehurst, in New Jersey. So, what we have is a----
        Senator McCain. You might just summarize. I've only got 5
    minutes.
        Mr. Stackley. Yes, sir.
        Today, the land-based testing associated with
    Electromagnetic Aircraft Launch Systems (EMALS), advanced
    arresting gear, dual-band radar, and the weapons elevators has
    all been satisfactory, but each of those programs is on what's
    referred to as a reliability growth curve. So, what we have to
    do is get deeper and deeper into the test program, get the ship
    operational to climb that curve to ensure that we meet the
    reliability requirements that we've established for the
    program.
        Each of those is on the curve, with one exception: the
    advanced arresting gear. We've had to make some changes to that
    design of a key component called the ``water twister,'' and had
    to go back into testing at Lakehurst. So, we're completing that
    additional testing to ensure that we have that correct.
        Senator McCain. Of course, I've been intensely curious why
    we needed to change things like arresting gear and aircraft
    launching that have been tested and proven over many years to
    be reliable, as far as information I have.
        On the LCS, the mine countermeasure mission package is more
    than 4 years behind, won't achieve full capability until 2019.
    Again, Director of Operational Testing and Evaluation, ``The
    Mine Countermeasure (MCM) package has not yet demonstrated
    sufficient performance to achieve the Navy's minimal Increment
    1 requirements.''
        Mr. Stackley. Yes, sir. We conducted developmental testing
    for the mine countermeasure mission package last year. We
    conduct what's referred to as a ``technical evaluation,''
    starting in April. The USS Independence is today at Panama
    City, gearing up for that tech-eval. We than proceed into
    operational testing for that increment at the end of this year.
        So, today there remain risks associated with completing
    that testing, but we are executing in accordance with the plan
    that I presented to this committee a year ago.
        The final increment--the mine countermeasure capability, is
    delivered in increments--the final increment is an unmanned
    surface sweep system. That, in fact, is scheduled for
    completion in 2019. That has been delayed and stretched,
    largely because of budget reductions over a number of years.
    So, today that is the last piece that completes the MCM
    capability.
        Senator McCain. By 2019.
        Mr. Stackley. Yes, sir. We'll have a system out and testing
    in the 2017 timeframe. Today we have developmental models for
    that capability. But, it's--it replaces--it will replace the
    53s, in terms of their sweep system. The capability that we
    have with the early increments replaced the capability that
    we've got for the MCMs that are currently forward deployed.
        Senator McCain. Admiral Mulloy, if you want to replace the
    Tomahawk, the next-generation land-attack weapons, is it true
    it's not due to enter service until 2024 at the earliest?
        Admiral Mulloy. Yes, sir, that's true. That's our best
    estimation.
        Senator McCain. Then does it make sense to stop procurement
    of the existing Tomahawk missile?
        Admiral Mulloy. Sir, we've been studying this now for the
    last year or so, and, as we looked at--developed the 2016
    budget, we believe the 100 weapons in 2016, along with the
    funding provided by Congress for the ones that were actually
    fired against the beginning of the contact against the Islamic
    State of Iraq and the Levant (ISIL), the 47, when merged with
    2015 procurement, will provide weapons on the floor of the
    factory through--into 2018 being produced. We started the
    recertification line, which will recertify and also upgrade the
    existing 3,700 Tomahawks we have. Starting in 2017, they start
    the recert line. In 2019, we are full recert. So, we see actual
    production into 2018, recertification of those weapons,
    providing significant firepower that greatly exceed--that would
    be 37 years worth of our average use of that weapon, sir.
        Senator McCain. Did I understand you correctly? You say
    that you would have a replacement--by when?
        Admiral Mulloy. No, this would be a recertification
    upgraded of the Block 4 weapons. In 2019, we'd actually start
    rolling out weapons that came due for maintenance, rather than
    being decommissioned, would be then taken through the factory
    floor, recertified, new radios put in. We're also looking at
    follow-on items that could be further upgraded on that weapon
    while we still continue the path of the Offensive Anti-Surface
    Warfare (OASUW) and Next Generation Lance Attack Weapon
    (NGLAW).
        Mr. Stackley. Sir, can I add?
        Senator McCain. Yeah.
        Mr. Stackley. What Admiral Mulloy is referring to is the
    factory floor's view. Separate--I've discussed this with the
    CNO--there is risk associated with the next-generation mine
    attack weapon, that we're very early on, in terms of justifying
    its requirements and that development program. We are one of
    one mind that what we've got to do is ensure that is stable
    before we simply truncate production of our cruise missiles.
    So, we--this will be revisited--excuse me--this will be
    revisited, in conjunction with our Program Objective
    Memorandum, fiscal year 2017 (POM-17) review.
        Senator McCain. Are you concerned about the effects of a
    production gap on the second- and third-tier Tomahawk suppliers
    in their ability to provide an efficient transition from
    production to the beginning of the recertification of the Block
    4 missiles in 2019?
        Mr. Stackley. Sir, the answer is yes. We've had our Defense
    Contracts Management Agency do a complete review of Tomahawk
    suppliers--and I'll provide this report to the Hill, interested
    committees, members, to get a look at how detailed that is--to
    highlight which suppliers are placed in jeopardy by a break in
    production versus which suppliers carry through in the
    recertification program. So, there are a handful of suppliers
    that are of particular concern. We're working with Raytheon as
    we take a look at this.
        Senator McCain. You are totally confident that the next-
    generation, next-production aircraft carrier, that the cost
    will be under control.
        Mr. Stackley. I think you're referring to CVN-79, the John
    F. Kennedy.
        Senator McCain. Yes.
        Mr. Stackley. Today, it's $11.5 billion cost cap, and
    that's our budget that we've submitted. Separately, we--
        Senator McCain. You submitted a $10 billion cost cap for
    the Gerald R. Ford. I'm asking--
        Mr. Stackley. Yes, sir.
        Senator McCain:--are you confident that the next aircraft
    carrier will be at the cost as you just--11.4, or whatever it
    is?
        Mr. Stackley. Yes, sir. Let me simply state that we're
    driving our--what we call our allocated costs well below the
    $11.5 billion so that we have a margin and our contracts are
    being contained within fixed-price vehicles. So, today, for all
    that we know, all that we understand, we are confident.
        Senator McCain. I hope you are correct.
        I thank you, Mr. Chairman.
        Senator Wicker. What could go wrong there, Secretary
    Stackley, to disappoint Senator McCain and the rest of this
    subcommittee?
        Mr. Stackley. A couple of things. First, CVN-79 delivers in
    the 2023 timeframe. So, between now and 2023, new threats could
    emerge, one; or, two, we'll get through our operational testing
    associated with the CVN-78, and we might discover issues that
    we have not flagged earlier, in terms of those systems, that
    would drive change in. The key here is design stability and
    technical maturity. So, that's what we're going after on CVN-79
    so that we do not have surprises in discovery as we build the
    ship.
        Senator McCain. You are looking at additional options to
    the large aircraft carrier, as we know it.
        Mr. Stackley. We've initiated a study. I think you have
    discussed this with the CNO. That's--we're at the front end of
    that study. Yes, sir.
        Senator McCain. I think--Mr. Chairman, I think it's pretty
    obvious that, when there's no competition, there's no cost
    control. Certainly has been the case with the Gerald R. Ford.
        Senator Wicker. Thank you, Senator McCain.
        We're now going to continue, based on order of appearance--
    Senator Rounds, Senator Sessions, and Senator Shaheen.
        Senator Rounds, thank you for--
        Senator Rounds. Thank you, Mr. Chairman.
        Senator Wicker.--deferring to the Chair.
        Senator Rounds. Yes, sir.
        I'd like to follow up--and, gentlemen, thank you for your
    service--I'd like to follow up just a little bit on what the
    Chairman has suggested.
        Can you provide an update on the congressionally directed
    report on the Navy's next-generation land-attack developments
    efforts that were originally due in Congress on February 2? I
    believe you've been operating under an extension right now.
    But, just in terms of the update and the replacement for the
    Tomahawk, can you give us an update on that, please? I think
    there was one due here--what, February 2nd?
        Mr. Stackley. Yes, sir. The--frankly, the delay to that
    report is because we're trying to get the requirements right.
    So, we're looking at a--two different things. We have two
    different missile programs are on the front end of development.
    One is land attack, and the other is maritime. So, before we
    launch down two separate development programs, what we're
    trying to determine is, Can we combine these, at least for
    certain technologies that would be common to both, as much as
    possible, into a single program, to reduce cost and reduce
    risk? So, we have delayed the submission of that report as we
    go through this front-end requirements analysis.
        Senator Rounds. When do you expect that report to be
    available?
        Mr. Stackley. Let me first offer, before the report is
    available, that we come over and give a briefing to the
    members, if desired. But, I will tell you right now, within 30
    days. I put out the end of March as a date for that report, so
    you would have it in your hands to support your congressional
    action.
        Senator Rounds. Okay, thank you.
        For Admiral Mulloy, in your judgment, are your ship-
    launched munitions inventory sufficient to support current
    operations and the defense strategic guidelines? Are there
    individual ship-launched munitions whose inventories, either
    present or projected, which are insufficient to meet the
    requirements? If so, what are they, and what is being done to
    address the shortfalls?
        Admiral Mulloy. Sir, in terms of the number of munitions to
    meet the defense strategic guidance, I believe right now what
    we currently have planned, funded, and executed in the fleet
    meets that defense guidance. Otherwise--that's part of this
    whole--the budget submission. As I think you've heard the CNO
    testify--and I talked last year, was--unfortunately, munitions
    are one of the areas, when you get either sequestered or get a
    Budget Balance Act, we challenged areas of aircraft,
    modernization of ships and aircraft, weapons, and our base
    infrastructure. So, once again, on the chopping block people
    talked about earlier today, sir, was, If we don't get all the
    money, what happens? That's the real risk we have, going ahead.
        As to individual weapon systems, we are currently ramping
    up for production of SM-6. So, the demand of the combatant
    commanders for the SM-6 weapon, because of its advanced
    capabilities and speed, we are filling those ships, as we can,
    when they go to sea. We're producing them--what we can. We look
    forward to more of those. But, we have large numbers of SM-2
    weapons. So, we're in the middle of change-out on that. SM-3
    for ballistic missile defense, those are produced by--the
    Missile Defense Agency. Once again, in many cases we have
    enough to supply the ships that deploy, but we don't fill every
    hole back at the United States. We are building those as we go.
        Those are the two that immediately come to mind, sir.
        Senator Rounds. Following along the same line--interesting
    how things work at--on my way in, we had a brief discussion
    with people coming in to visit with us from South Dakota. A
    gentlemen who I've known for years just made the comment how
    proud he was of his son, who was piloting an F/A-18. He just
    mentioned in passing, and it caught my attention as I walked in
    here, how--not only how proud he was of the fact that he--his
    son was doing this, but he commented on the fact that it had
    taken an extended period of time in which to complete the
    training because the F/A-18s that were available to them were
    down for extended periods of time because of the lack of parts
    to repair them. I got thinking about it a little bit, and I'm--
    you just happen to be in the line of fire, just after having
    that conversation.
        Talk to me a little bit about the F/A-18. I know, when we
    talk about the B-1Bs out of Ellsworth Air Force Base, there's
    been several occasions in which literally they've been in the
    bone pile looking for their spare parts to maintain that fleet.
    Where are we at on the F/A-18? Do you have a shortage of parts?
    Is there a delay? What is the operation status for your F/A-18s
    that are in the fleet today?
        Mr. Stackley. Yeah, I'll start and have--Admiral Mulloy
    will add.
        I don't think it's as simple as parts. What we have is, the
    F-18 program, the earlier versions, A through Ds, they're
    designed and built as a 6,000-hour aircraft, and we're striving
    to get them out to 9,000 hours. In order to do that, they have
    to go through an assessment program and then certain life-
    extending modifications, and, frankly, repairs need to be done
    on the aircraft.
        Those aircraft enter the depot, you open up the aircraft,
    and, in opening them up, you have discovery. You discover
    additional repairs that were not planned. So, what has
    happened, more than just--more than just parts, is a time lag
    associated with opening up and inspecting the aircraft, getting
    the technical fix and the parts, and then the labor back on the
    aircraft to restore it to the flight line.
        So, that has created a backlog at the depots that we're
    trying to buy back, burn back down, so we can get the quantify
    of aircraft back out to support training as well as operations.
        Senator Rounds. What's your normal expectation for the
    mission capability? What percent of your numbers would you
    expect to be mission-ready? What does the current number look
    like today?
        Admiral Mulloy. The expectation for an--it depends upon
    where the squadron is. Sir, what I'd like to do is follow up
    and get you the full expectation.
        Senator Rounds. That would be fine.
        Admiral Mulloy. But, generally, a deployed squadron should
    have a mission capability rate full up of over 90 percent. But,
    what we do is, because of--the airplanes that are in depot or
    manning up, is a training squadron--or a squadron, when it's 9
    months from deployment, may only have 6 or 7 aircraft, not 12.
    Their mission-capable rate may be as--it's partially mission
    capable, not fully mission capable. But, then you ramp up to
    have 12 airplanes fully mission capable when you deploy and
    maintain those forward.
        But, we'll get you the specifics on that.
        [The information referred to follows:]

        The current Mission Capable (MC) rate for flight line F/A-18 A-D's
    is approximately 42 percent for non-deployed assets and 57 percent for
    deployed. The goal is to sustain a 64 percent non-deployed and 75
    percent deployed Mission Capable rate. F/A-18 E/F Mission Capable rates
    are approximately 44 percent non-deployed and 65 percent deployed. The
    goal is to sustain a 70 percent non-deployed and 80 percent deployed
    Mission Capable rate.

        Senator Rounds. Would you? Thank you.
        Admiral Mulloy. Yes, sir. But, one other comment I'd like
    to match what Mr. Stackley had was, he's talking about the A-
    through-D model, and those are largely half-Marine Corps, half-
    Navy airplanes, and taking them to that life and stretch that
    out. The compounding effect has been the ENFs, which are the
    newer ones, we have had to fly those even more than we
    expected. Then, that area, we have seen, is, now that you have
    more airplanes in, the expected production of supply parts
    match--let's say I had a fleet of 400 airplanes, but now I'm
    flying 500--I am using more parts. So, we have accelerated and,
    line by line, I have met with the Chief of Naval Air Force, the
    Chief of Navy Supply to look at individual items and where we
    are to make sure the F-18 E's and F's match what's going on.
        This was not--I would say is--it's clearly in our budget
    material we laid out to the committee, to your staff, was--the
    Navy would not be the--what we call ``2-5-2-0'' until 2018
    because of the Airman Apprenticeship Training Program (ATD)
    aircraft that we were now not being able to fly as much. So,
    it's very clear we saw it there. The expectation was we were
    not expecting the ATDs to be in such, I would say, not poor
    condition, but the condition, when opened up, was not to be
    expected as bad as it was, given what we thought would extend
    those aircraft.
        But, once again, it was never extended to--planned to be
    extended that long. So, this is a finding method for us, and
    we're working as hard as we can to bring them back up.
        We are very proud of every one of our F-18 pilots.
        Senator Rounds. Thank you.
        Thank you, Mr. Chairman.
        Senator Wicker. Senator Sessions, followed by Senator
    Shaheen.
        Senator Sessions. Thank you.
        Thank all of you, Admiral Mulloy and Hilarides, and
    Secretary Stackley. I think you're managing complex programs
    well.
        Secretary Stackley, I believe you're a real national asset
    to understand the details of this, and you're tough, and I
    believe you're handling the difficult position you have with
    integrity and ability, and we're glad you're there, and glad
    both of our admirals are, too.
        We have a goal of 306 ships. The LCS, Littoral Combat Ship,
    is a substantial part of that. Can you tell us what role the
    LCS plays in your vision for the future, briefly, of the Navy
    ship fleet?
        Mr. Stackley. Well, sir, I'll start, and ask Admiral Mulloy
    to join me, here.
        First, the force structure assessment has 52 LCSs, or small
    surface combatants, inside of the 306-ship number. Its role--
    its multiple roles--first, not to lose sight of it, is
    presence. With the 52 ships, the deployment strategy is that--
    is what's referred to as 3-2-1. You'll--for each ship, for--for
    two ships--one of two ships will be deployed out of the 52.
    You'll have three rotating crews to support that rotation rate.
    So, what that means is that 50 percent of your LCSs will be
    deployed at any one time. That's a significant presence
    booster. If you compare that to other surface combatants or
    other ship types, a deployment rate of one in three or one in
    four is typical. In the case of LCS, it's one in two that we're
    going after. So, big operational availability, in terms of
    forward presence.
        Then, in terms of missions, LCS was designed as a modular
    mission ship. In other words, we have the ability to rotate our
    mission packages, depending on what the demand is from the
    combatant commander. So, the three initial mission packages set
    for LCS are the mine countermeasures, which is a significant
    area of concern for our Navy, in terms of warfighting gaps. So,
    we look at LCS to replace the MCMs. More than just replace
    them, to significantly increase our mine countermeasures
    capabilities. Then the other two mission areas, one is surface
    warfare, or anti-surface warfare. First, to deal with swarming
    boat threats that we are limited in our ability to respond to.
    Then the third mission package is anti-submarine warfare.
    Particularly when it comes to LCS, we have a mission package
    for anti-submarine warfare that is very unique. It combines
    what's referred to as a variable depth sonar and a
    multifunction towed array. So, we will have an active--
    continuous active variable depth sonar that gets below the
    acoustic layer, and a passive towed array to pick up the
    signal. In demonstrations with an engineering development
    model, we've demonstrated the ability to pick up submarines
    multiple Convergence Zones (CZs) away. So----
        Senator Sessions. I just have a----
        Mr. Stackley. Yes, sir.
        Senator Sessions. Do you want to finish up?
        Mr. Stackley. No, I was going to say, those three mission
    areas for the LCS, that presence that's provided by the 50-
    percent deployment rate, and then, when we talk about the
    future frigate, it's modifying that LCS to give it a
    multimission capability, increase its self-defense capability
    for greater independent operations, and, basically, operating
    across the range of military.
        Senator Sessions. Well, I've been on this committee for 18
    years, and I remember when it came forward, the vision for it.
    I would ask--and I thought it was a good idea then, and I still
    do.
        Tell me about--just--I don't have a lot of time, but,
    briefly, how are you on cost containment? There's been some
    criticism about that. But, as I understand it, we're in a much
    better situation today than a lot of people understand. Would
    you give us a rundown on that?
        Mr. Stackley. Yes, sir. The history of cost on the program
    is greatly checkered by the first two ships at each of the
    shipyards. Costs exploded on the first two ships, and then we
    went through a period of instability, design changes associated
    with--incorporated late in those two ships' design that really
    impacted our start. The great step forward was achieved when we
    went down the block-buy path, when were able to bring
    competitive pressure, go out for a 10-ship buy across a 5-year
    period, which ultimately became 6, allowed industry to go out--
    reach out to its vendors to secure good pricing, allowed them
    to make investments in their shipyards. So, as a result of that
    block-buy approach, what we've seen is very strong learning-
    curve performance, such that the last ships of the block buy
    are at about a $350 million pricetag, which is about half of
    what the first ships were.
        Senator Sessions. About half of what the first ships were.
        Mr. Stackley. Yes, sir.
        Senator Sessions. So, you're getting the cruising speed. In
    other words, the shipyards are producing these ships rapidly.
    The bugs are getting out of the system. Now you're at the time
    where you make money, I guess, where you actually are able to
    produce a ship that's certain to come in at a good cost over a
    period of time.
        Mr. Stackley. Yes, sir. We're seeing stable performance.
    The investments that the shipyards have made have--are paying
    them back, in terms of their performance. They've trained up a
    workforce that they're holding onto through this production
    run. This is--we need to replicate this, frankly, on more
    programs.
        Senator Sessions. Well, I think you said that before.
    It's--what's been achieved is almost historic.
        Well, I know you're aware of the--there's some--in the
    mission packages, there's some--the ship itself--both the ships
    don't have any fundamental flaws, but are operating
    effectively. Is that correct?
        Mr. Stackley. We've--frankly, when we conducted operational
    testing--developmental and operational testing on the lead
    ships, we identified flaws, and we've incorporated those back
    into the designs to the best--best we can to ensure that,
    future ships, those are being captured in the design right
    upfront.
        Senator Sessions. But, with regard to some of these
    innovative, high-tech computer systems and mine
    countermeasures, you are--you're not going to certify those
    until you're satisfied, as--from my conversation with you, you
    are not going to certify until you're certain they are meeting
    the standards, number one. Number two, I'll ask you, Is there
    any doubt in your mind what you're asking will be achievable?
    It's not something that is a pie in the sky, but these are all
    improvements that, with time and effort, can be achieved?
        Mr. Stackley. I think we're dealing with engineering
    issues, not invention. So, the answer to your question is yes.
    In terms of our certification--our certification standards are
    well laid out, well understood. We're holding tight to those
    certification standards. We'll complete the operational
    testing. We've gone down the mission package path in an
    incremental fashion to ensure that we don't overreach with a
    big-bang approach, but, as technology is mature, we can go
    ahead and incorporate it in respect to ships.
        Senator Sessions. I think that's good management. Thank
    you, Mr.--Secretary Stackley.
        Senator Wicker. Senator Shaheen.
        Senator Shaheen. Thank you, Mr. Chairman.
        Thank you all for being here.
        I had the opportunity last week to go out on a--to embark
    on the USS New Hampshire. It's convenient, that was the New
    Hampshire. I was very impressed by the teamwork on the ship, by
    the capacity of that Virginia-class sub, and what our program
    can do. One of the things I heard about while I was there was
    the fact that last year the crew and the USS New Hampshire were
    out submerged for 110 days on their mission. During that
    period, they came up one time to load food for 6 hours. It
    really struck home with me the impact that--when we talk about
    shipbuilding, we talk about it in terms of the ships, but we
    don't often talk about it in terms of the impact that this
    program has on the men and women who serve on those ships, and
    what a shortfall does to the deployment cycles that people have
    to serve. I wonder, Secretary Stackley or Admirals, if one of
    you would like to speak to the challenge that that presents
    when we have a reduced number of ships, particularly
    submarines.
        Admiral Mulloy. Yes, ma'am. As we indicated was, we are
    meeting the demand of 100 ships from a 300--from a 275 ship
    Navy right now. Ten years ago, I would have told you we had 100
    ships underway from a 400-ship Navy. So, what that means is,
    every asset is critical to us, and that means that you have to
    man it, you have to maintain it, you have to train them up to
    be successful, and then you have to supply them when they're
    forward deployed. In many cases, they may have to go back out
    again if the world situation changes. A number of our SSNs from
    the Groton area had to rego back at sea again, so I believe the
    New Hampshire went back from deployment and went back out
    again, because she was ready to go. That ripples into a little
    bit on the family world. They had some plans; you know,
    birthdays, anniversaries were missed. We've all been there,
    back in the Cold War. We're just entering a phase again where
    the world is shifting, but it's not one defined adversary. So,
    as a result, we ask a lot of our people.
        So, it's important--and that's one thing out there, where
    the CNO--he and I were just talking, on Monday--is that, when
    he travels around, it's not necessarily the length of
    deployments, it's the unknown, when they come back to, ``Am I
    going to go again? But--``I'm willing to go again if America
    needs me.'' But, what's going to happen about--``Am I--is
    Congress not going to supply the money? Is my--is the barracks
    not going to get refurbished?'' Because they know, in 2013-
    2014, we deferred that. You know, we've maintained all of our
    ship maintenance, we just had to slow some schedules, because
    the shipyards were--shipyard workers weren't furloughed, but
    other--every Federal agency was furloughed, and had a dramatic
    impact on the workload. If you're in the shipyards, your boat
    didn't get done on time. If you're the petty officer on another
    ship, you stayed out longer.
        So, they're all woven together, and they're all observing--
    all 323,000 people in the Navy are observing what's going on,
    and they want all of us to push on you, they want all of you to
    supply back out to them so they can be that 100-day underway. I
    know exactly what it's about with all my deployments operating
    from Groton and San Diego and Guam, exactly what that's like.
    You count on your family to be well and that America cares and
    loves about you.
        Senator Shaheen. Well, I think we heard a lot about this
    concern during Iraq and Afghanistan, in terms of the deployment
    of our service men and women in the Army, the Marines. But, I
    think there's been less of a focus on it with respect to the
    Navy. So, I do think that's important to have as part of this
    discussion.
        The other thing I was pleased to hear when I was on the New
    Hampshire was a number of very positive comments about the
    Portsmouth Naval Shipyard, which is something that Senator
    King, Senator Ayotte, and I are all very concerned about. I
    wonder if, Secretary Stackley, you could talk about the
    importance of continuing to modernize our shipyard and keeping
    that 6-percent capital investment maintained.
        Mr. Stackley. Yes, ma'am. I'll start, and I think I'll let
    Admiral Hilarides join in, as well.
        The----
        Senator Shaheen. I have about a minute and 50 seconds left.
        Mr. Stackley. Yes, ma'am. This--we have revised our
    standards, in terms of our recap rate for our public shipyards,
    in recognition of a couple of things. One, it was stretched out
    too long. Two, the facilities, as a result of this long
    stretchout over a long period of time, they're in need in
    particular areas of upgrades. Three, we can't rely on just the
    Overseas Contingency Operations Fund (OCO) and other avenues to
    basically augment our budget to take care of it. We have to
    make that a priority. So, in fact, the report that we submitted
    to Congress 2 years ago, we went back through, as a result of
    that review, and revamped the way that we are investing in our
    public yards. Both Admiral Mulloy, as our budget officer, and
    Admiral Hilarides, as the officer who's in charge of the
    shipyards, had a heavy hand in both of those. I'm--
        Admiral Hilarides. Yeah, I would just add that, you know,
    we were below that 6-percent benchmark in the submission in
    2015. I'm happy to report we'll achieve about 7 and a half in
    the public shipyards. Then our budget submission for 2016 has
    7.2. We think we'll be well over 8. Captain Green's done a
    great job of being first to the--first at the head of the line
    for this. So, I--Portsmouth has done very well in that work.
        Senator Shaheen. Thank you. I appreciate that. I assume,
    like everything else in the defense budget, that would be
    affected if sequester kicks back in.
        Let me also follow--Secretary Stackley, you were very
    eloquent in response to Senator King's questions about the
    impact on the industrial base of what's happening and what
    would happen with sequestration. But, you know, Senator King
    raised Bath Iron Works. You talked about Huntington Ingalls.
    One of the things that I've heard from small businesses in New
    Hampshire, where we have a defense industrial base, is that,
    while some of the larger companies can weather these kinds of
    cuts, for small businesses, they really cannot do that. If the
    subcontractors are no longer in--able to stay in business,
    aren't we going to have the kind of issue that Senator McCain
    talked about when he said competition means--well, lack of
    competition means that costs go up, means that it's harder to
    procure whatever we're looking for, whether it's the ship or a
    system on the ship?
        Mr. Stackley. Yes, ma'am. The supplier base--it's been
    harder for us to get at the supplier base, traditionally. But,
    we're making a concerted effort today, because we recognize
    that, in continuing resolutions and sequestration, the first
    one that's impacted is the guy at the end of the supply chain,
    because he's the first one whose invoice is waiting for
    funding, and he's the one who is least able to weather the
    storm.
        So, we've been doing a couple of things. First, we were
    working with the big defense contractors. In all of our
    discussions with them, asking them, in terms of, ``How are you
    all viewing your supply chain to ensure that it remains
    healthy?'' That's a good dialogue. But, we can't just rely upon
    them.
        So, separately, we've been going out, and we're taking a
    look at our supply chain past the defense contractors to,
    first, map where it is; second, to identify what are the
    critical elements of that supply chain, where there's either a
    single or a low number of suppliers that, if they went out of
    business, we would either lose competition or we would lose
    critical supply for one of our major weapons systems.
        So, it's a couple-pronged approach. Then, third, we're
    having roundtables around the country, sitting down with small
    businesses to understand their problem from their perspective
    so we can make that a part of--make that our problem, frankly,
    and how we do business with small business.
        I'll give you a very simple example. We have a thing called
    ``CAPEX incentive''--capital expenditure incentive--that we
    provide to our major contractors to allow them to--to
    incentivize them to invest in their facilities. We don't do
    that with the supply chain. So, now what we're exploring is,
    Does this make sense to provide this type of CAPEX that either
    passes through the front contractor to get to their supply
    chain to give them the same benefit that we provide the big
    defense contractor who, frankly, is in a better position to
    deal with the financial uncertainty than their suppliers?
        Senator Shaheen. Thank you very much.
        Certainly, if we can be helpful, I'm sure that all of us on
    this committee, as you're talking to small businesses in our
    region, would be happy to participate and be helpful.
        Mr. Stackley. We're going to come back to you all with some
    asks associated with supply-chain material commonality for some
    of our major programs as we look ahead to some of the fiscal
    challenges that we've got, in terms of controlling cost and
    dealing with budget uncertainty. We have some very specific
    asks that we're going to need from you.
        Senator Shaheen. Great.
        Thank you, Mr. Chairman.
        Senator Wicker. Senator Hirono.
        Senator Hirono. Thank you very much, Mr. Chairman.
        I think maintaining our shipbuilding capacity in this
    country is really critical, as you mentioned in your testimony,
    that other countries are forging ahead. I'm really glad, Mr.
    Secretary, that we're looking at, not just the shipbuilders
    themselves, but also the supply chain. I think that they are a
    very important part of maintaining our shipbuilding capacity.
    So, I commend you for those efforts.
        For Admiral Mulloy: For a number of years now, the Navy's
    long-term goal for fleet size has been 306 ships. Are you
    planning to change the goal for the size of the fleet?
        Admiral Mulloy. Well, ma'am, the goal is actually set
    when--it's called a Force Structure Assessment, and it's
    actually 9 separate items we look at and go out to the
    combatant commanders and then also all the military plans, and
    we assess how many aircraft carriers, how many large surface
    combatants, how many attack submarines, how many ballistic
    missile submarines. That adds up to 306. Now the latest version
    about to come to the Hill will be 308. We've added another
    afloat staging base and recognize the LPD-28 to provide 34 to
    allow us to make sure we get 30--as we talked earlier, about 30
    amphibs.
        So, 308 is a force-structure assessment, of which is 9
    different types of ships--or categories--of a--what I'd call an
    attainment. Now, that means you could substitute different
    ones. You could have--a large surface combatant could go do a
    mission for a small surface combatant if you don't have enough.
    That's where we're trying to build the LCS right now.
        So, we're attempting to build a fleet size of that. Now, as
    we have just--we're now going to commence again, for another
    year from now, another assessment out with the combatant
    commanders of a new global end state revising the world again.
    So, the number might change by--anticipate it'll be probably
    somewhere around the 308 number again. But, once again, that is
    an aspirational goal of all those types that you have to build,
    depending upon sustained, consistent funding, that you could
    build, because all those items and those ship types, as we
    discussed earlier, compete. Submarines are going down, amphibs
    are going up at any one time, what the companies are building.
    But, I need, as a Chief Financial Officer (CFO), is to give the
    CNO and the Secretary of the Navy and his assistants here some
    kind of plan of a requirement and that we try to build to that.
        Senator Hirono. How are you incorporating the shift to the
    Asia-Pacific in reviewing the requirements for the total number
    of ships?
        Admiral Mulloy. Well, ma'am, that's--lay down our--called a
    strategic laydown plan. So, we have just moved a fourth
    submarine to Guam. The USS Topeka will be arriving in Guam
    shortly. We're putting other ships as we move around the
    western Pacific. We're actually bringing ships as they're
    commissioned from the east coast, where they're built--our
    submarines are built there, they come to the west coast. So, we
    are constantly looking at moving. The Theodore Roosevelt just
    left on a round-the-world cruise. She will go from being an
    Atlantic aircraft carrier, proceed through the Mediterranean,
    operate in the Middle East, and eventually end up in San Diego
    at the end of her 8-month deployment, and now will become a
    west coast ship. So, we're restoring a balance to provide more
    forces to the west coast.
        Senator Hirono. Well, the important concern that I want to
    make sure is reflected in your assessments is that we continue
    our commitment to the rebalance to the Pacific.
        For Secretary Stackley, the Navy--responding to direction
    from former Secretary Hagel, analyzed numerous upgrades to the
    current LCS designs. I know you mentioned that this program
    has--undergoing a number of challenges, including large cost
    overruns in the beginning, and design changes that led to
    instability. So, you know, that--Secretary Hagel identified
    some upgrades to the ship that the Navy hopes to include in the
    33rd ship and later. We need to understand the reasons behind
    this change.
        So, either for Secretary Stackley or Admiral Mulloy--
    perhaps Admiral Mulloy--do you have an approved requirement for
    the modified LCS vessel? Joint Requirements Oversight Council
    (JROC) approved?
        Mr. Stackley. Let me start. JROC approved for the modified
    vessel, no, ma'am. What we are doing right now is, we're going
    through what's referred to as--inside of the service, our
    equivalent of the--you know, JROC inside of the service, our
    requirements definition process. That's ongoing today. We've
    got a target to get down the JROC in the June timeframe,
    recognizing that this is a 2019 ship that we're proposing to
    modify. What we want to do, though, is get moving on the design
    activities to support that timeline.
        The Secretary of Defense, he gave us the tasking. In
    discussions with him, a lot of the tasking was not dealing with
    a new threat, taking a look at a 306-ship Navy, 52 LCSs, about
    1 in 6 having what's referred to as a ``focused mission
    capability.'' In other words, it could be doing anti-submarine
    warfare (ASW), or it could be doing anti-surface, or it could
    be doing mine countermeasures, but it's not doing all of them
    at once time. His concern that the concept of employment or
    operations for the LCS either involved phase zero--early phase
    activities or were in the context of a battle group providing a
    degree of protection for the LCS.
        He believed that one in six of our fleet was too large of a
    number with that concept of employment. So, that's how he
    arrived at--cap that at 32. He wants to see something that had
    what he referred to as greater lethality and survivability to
    enable more independent operations, more operations in support
    of battle groups, in support of defending the high-value units,
    and give it the ability to provide presence without--outside of
    the bounds of--
        Senator Hirono. So, Mr. Secretary, I am running out of
    time. So, just to get a better understanding of what's going on
    with the LCS program, though, I realize that Secretary Hagel
    wanted to focus on survivability. Is the survivability
    requirements for the 33rd ship forward basically very much
    different from that that was in the basic LCS?
        Mr. Stackley. We did not change the requirements associated
    with survivability for the modified LCS.
        Senator Hirono. So, Mr. Chairman--oh, where did he go? I
    guess I can carry on, then.
        [Laughter.]
        Senator Hirono. My understanding is that, before you really
    get into the specifics of the design of a ship, that you should
    get the approved requirements, that, when you don't have the
    JROC approval or certification or whatever the technical term
    is, that, you know, you should put the--you shouldn't put the
    cart before the horse. So, that is why I asked the question as
    to whether or not there is an approved requirement for the
    modified LCS vessel before going forward with any further
    design aspects.
        Mr. Stackley. We do not have a--as I described, we do not
    have a JROC-approved requirements document in advance of--
    today. However, we will have that in advance of doing the
    design for the modification of the LCS.
        Senator Hirono. So, when would that timeframe be----
        Mr. Stackley. We're targeting June----
        Senator Hirono.--for getting JROC?
        Mr. Stackley. We're targeting June timeframe for the JROC.
    Literally today inside of the Department of the Navy, we're
    working the requirements document to support that timeframe.
        Senator Hirono. Thank you.
        My time is up, so I might want to ask the chairman to allow
    me to do a second round.
        Senator Wicker. Sure. We may take an extra round.
        So, let me start with my first round.
        Secretary Stackley, I think everyone here is committed to
    replacing sequestration, if we can. I think everyone has made
    that statement. Not everyone in this town feels that way. You
    hear--well, let me harken back to something Admiral Mullen
    said, several years back. He said the national debt's the
    number-one security threat of the United States of America. I'm
    sure Admiral Mullen would have the same advice to us on
    sequestration. But, still, he made that statement. There are
    people who would urge to us, you know, ``The sky didn't fall
    the last time we endured sequestration. Obviously, it was hard,
    but we got through it. Sequestration has been a very inartful,
    but effective, way of pounding down on expenditures, domestic
    and defense.'' Help us to help you know how to cut through the
    rhetoric.
        You know, in my opening statement, I mentioned there are--
    some folks say--they say we need 306 ships. It's the Navy's
    stated force structure. National Defense Panel says 323 to 346.
    The combatant commanders say 450. A pretty big gap there from
    people that are supposed to know what they're talking about. I
    thought I heard you say that we're going to protect
    shipbuilding, no matter what. They'll be the top priority. So,
    these people at the end of the chain, there, in the supplier
    business, maybe they don't have so much to worry about. It's
    the morale that Vice Admiral Mulloy talked about, civilian and
    military.
        Just help us to know how serious this is. Can't we just--
    can't we do this one more year--let it go back in for a fiscal
    year, muddle through, and the sky wouldn't fall?
        Mr. Stackley. Yes, sir, let me try to walk through this.
        There are three aspects that we have to balance. There's
    readiness, there's capacity, and there's capability. The
    discussion about keeping shipbuilding as a priority, as the
    budget--in the face of budget uncertainty, that has a lot to do
    with capacity long term. That's so that we do not mortgage our
    future in dealing with today's fiscal crisis.
        However, what we place--the risk goes somewhere. So, where
    does the risk go? Well, it's either going to go to readiness or
    it's going to go to capability. By readiness, we talked about
    extended deployment lengths. If you look at the size of the
    Navy over the last 25 years, in the early 1990s we had a 450-
    ship Navy, and we had about 100 ships deployed. Today, we have
    a 275-ship Navy, we have about 100 ships deployed. That's wear
    and tear on the hardware, it's wear and tear on the sailors, it
    creates backlog in the depots, and it creates questions
    regarding operational availability, going forward. So,
    readiness is at risk.
        Capability, that's not so much the ship count, but that's
    the weapon systems that we place on those ships. So, when we
    talk about the Ohio replacement and the investments that we
    have to make, in terms of its survivability, its capability
    inside of shipbuilding, that is a number-one priority. So,
    we're going to protect that investment to ensure that Ohio
    replacement has the capability it needs. But, then when you
    walk away from the Ohio replacement and look at the rest of our
    shipbuilding programs and the investments that we need to make
    to ensure that they are mission relevant--they're not just
    present, but they have the capability they need to deal with an
    increasing threat--that's at risk. That's on the shipbuilding
    side.
        We also talked earlier about the F/A-18 and what's going on
    in the depots there. So, parallel universe with shipbuilding is
    the aviation component, in terms of backlog in the depots and
    then the investment we need to be making in fifth-generation
    capability for our strike fighters so that, in fact, it can go
    head-to-head in high-end conflict, which is the thing that
    concerns us most.
        So, we have to keep all three in balance. What does
    sequestration do? It's pulling the rug out from one or all
    three. So, if we protect shipbuilding in the face of
    sequestration, it's going to come at the expense of readiness
    today or the capability that we need to continue to invest in
    so that we don't just have the ships on the front line, we have
    the ships with the weapon systems they--that they need--not to
    maintain parity, but to maintain superiority over the threat.
        Admiral Hilarides. Yeah, I'd just like to add one example
    of the enduring effects. It's kind of like shipbuilding, but in
    a microcosm, and I think it'll relate to several members of
    this committee.
        Our public shipyards during the time of the sequestration
    and the hiring freezes that were associated with it, 1,400
    people left the workforce at a time when we were supposed to
    have been increasing it, and left us a divot almost 2,000
    people behind, which has directly resulted in us not
    delivering--
        Senator Wicker. When was that?
        Admiral Hilarides. At all four of the shipyards, so
    Norfolk, Puget, Portsmouth, and Pearl Harbor.
        Senator Wicker. What timeframe, sir?
        Admiral Hilarides. Started in early 2013, and we began
    hiring again at the beginning of 2014. We crossed over to a
    positive territory almost a year and a half after the beginning
    of the event. The SSNs in the public yards in Norfolk and Puget
    are a year late on delivery out of their depot today because of
    the effects of those hiring freezes that occurred back in 2013.
    So, these divots, although it appears we stood right back up
    from it, we are still recovering very much across all of the
    enterprise.
        Admiral Mulloy. What the CNO just testified is, in terms of
    the surge capability. We talk about--we've been able to
    maintain--we call ``one-plus-one''--other words, one aircraft
    carrier in the Pacific, one in the Middle East, and we flow
    them around. We're also supposed to be able to surge--the
    ability to surge more carriers and amphibious groups, that we
    have one-and-one also there, to the ability to having what we
    call ``two-plus-three''--two of them out and three of each to
    be ready to flow for pressing needs. Right now, we're at a
    ``two-plus-one,'' and we do not recover that in carriers until
    2018. Then amphibs would be 2020. That's due to a sequestration
    and a BBA. If it happens again for 1 more year, I don't know
    how far that will slide, but that's a 5-year rolling impact of
    one anomalous event.
        So, when you say is, Can you have another anomalous
    event?--that's where he said was, ``No, we can't.'' Are you
    talking about a 2024 ability? How long will the world change in
    the next--you know, the next 8 or 9 years to be more negative
    for us to have us in the situation of a degrading posture vice
    an improving posture?
        Senator Wicker. Before we turn to Senator King for a second
    round, does anybody want to follow up on this line of
    questioning with regard--okay. Well, all right. Senator King
    and then Senator Shaheen, on the topic of sequestration, and
    then we'll give Senator King another opportunity to take
    another round.
        Senator King. I was going to say, we shouldn't beat a dead
    horse, but this is a dead horse that deserves beating, in my
    view. As I understand it--and again----
        Senator Wicker. Don't know how dead it is.
        Senator King. That's a good point.
        Again, going back to your excellent report on the
    industrial base, as I understand it from that report and from
    my memory, we were able to skate through the first year of
    sequestration because of unexpended balances and other sort of
    historic ability of built-up funds, and then we had the partial
    relief over the last 2 years. So, this year would be full
    force, and it would, in fact, be worse than what was gone
    through in the prior several years, because of those different
    circumstances. Is that--am I understanding correct?
        Mr. Stackley. Yes, sir. We pulled--every bit of margin that
    was in the system, we pulled out of the system in order to
    offset the impact of sequestration in 2013. So, we drew a lot
    of our programs and accounts down, in terms of margin, to
    weather through sequestration.
        Senator King. But, you can't do that now.
        Mr. Stackley. It's--we've exhausted it, yes, sir.
        Senator King. Well, I think that's the answer, Mr.
    Chairman, to this argument, ``Well, we made it through, and
    therefore--the sky didn't fall.'' It was because we had slack
    in the system that allowed us to do that. Then we had the
    relief in 2014 and 2015. But, now we're facing the full brunt
    of it.
        I think we need to remind ourselves, this was a--
    sequestration was designed to be stupid. It was explicitly
    designed to be so unacceptable that Congress would find a
    solution to--find ways to solve this problem in other ways, and
    it was supposed to be so dumb that it would never happen. In
    fact, I remember being asked, in my campaign in 2012, ``Will
    sequestration take effect?'' I said, ``No, of course not.
    Congress would never let that happen.'' Well, here we are.
        So, it's not that those of us who want to relieve from
    sequestration are saying we just should ignore it, but we
    should find other ways to fill that $90-billion gap in the--
    this fiscal year and the 6 years that are still remaining,
    through various other areas of the budget.
        So--but, I think it's important to get across to our
    colleagues that, just because we made it through in 2013, 2014,
    and 2015 doesn't mean that the next year will be a piece of
    cake, because the circumstances are different.
        Senator Shaheen. Well, I just wanted to follow up on the
    other consequence of what you were talking about, Vice Admiral
    Hilardes, because what I have heard from people at the
    Portsmouth shipyard is that, not only did we lose people as the
    result of sequestration, but we're having trouble hiring
    people. We have--as you know, we have a lot of very trained and
    skilled people who are reaching retirement age, and trying to
    attract the skilled workforce we need, particularly in the
    science, technology, engineering, and mathematics (STEM)
    subjects, to replace them is difficult enough. But, if you add
    to that the uncertainty of, ``Well, we're not sure if we're
    going to have a job long term because these cuts may be coming
    back in, and we don't know what that means to our future,''
    then that creates another element that makes it even harder.
        Admiral Hilarides. Yes, ma'am. The things that happened in
    2013 came at a--probably the most opportune time, is that the
    economy was not as robust as it is today, and, as a result, we
    did not see a dramatic spike in retirements, although we did
    see a slight increase. Hiring, we still get plenty of
    applicants for the great jobs up at the shipyards. But, I think
    if we do this--and looking at the economy is now, with the
    growth in industrial trades across oil and gas and other places
    in the economy, we probably won't be in that same place. I
    worry a lot about just what you said, that hiring and
    retirements will both go--fall against us, and our recovery
    would be much longer than it has been in the last 2 years. Yes,
    ma'am.
        Senator Wicker. Senator King, do you have further
    questions.
        Senator Hirono.
        Senator Hirono. Thank you.
        You've talked about the importance of the Ohio-class
    replacement program. Fiscal Year 2015 National Defense
    Authorization Act established a National Sea-Based Deterrence
    Fund. I wanted to ask you, Secretary Stackley, What are the
    Navy's plans for using this fund to implement the Ohio-class
    replacement program? Because you need to have some processes in
    place in order to make sure that you're out of a--you know,
    you're ready to go and there's money in this fund.
        Mr. Stackley. Yes, ma'am. We need to work with you all, and
    the appropriators as well, in terms of how to put this fund to
    work. Right now, it's a framework without funding in it. What
    was authorized was to be able to use other funds from
    shipbuilding to go into the sea-based strategic deterrent fund.
        Well, today we don't have other funds from shipbuilding to
    move into that fund, and particularly not in the--to the
    magnitude that we really need to ramp up to, to support the
    Ohio replacement.
        So, we're looking at--we actually start procurement of the
    Ohio replacement. The first procurement dollars are in 2017.
    That's the advanced--I'm sorry, 2017 is the advanced planning;
    2019, in terms of material. So, what we need to do is come back
    to the defense committees and discuss what the--what are
    reasonable options, alternatives, in terms of making this fund
    more than a framework, but actually helping to solve the issue
    that's before us all, in terms of the impact of the Ohio
    replacement on our shipbuilding budget.
        Senator Hirono. Yes, that's my concern, because I think
    what you--you can't start too soon to have more than just a
    framework for this fund. I think it takes time for us to
    establish the processes and how exactly you're going to
    implement this fund.
        For you again, Mr. Secretary, the Navy announced the
    intention to complete a package of ship contracts, including
    the TAO(X) oiler, the LHA(R)--I just love all these acronyms--
    amphibious assault ship, and the LX(R) dock landing ship
    replacement all in one package. So, Navy also said that it
    would restrict competition for that package of contract to only
    two shipyards. What is the Navy's strategy for rewarding these
    contracts? Why is it in the taxpayers' best interest to
    restrict competition for these ships?
        Mr. Stackley. Thanks for the question, ma'am. We're trying
    to balance a couple of things.
        First, our requirements. So, we have a requirement to
    replace our fleet oilers, and that's the--that first of class
    ship for the TAO(X)--that's the replacement for our fleet
    oilers--is in the 2016 budget year. We also have a requirement
    for a new big-deck amphib, the LHA-8, which is a 2017 ship with
    advanced procurement in 2016. We've talked about the LX(R),
    which is the replacement amphibious ship for our LSD-41 class,
    which we have in the budget in 2020, with advanced procurement
    the year prior.
        So, when we look ahead at those three major programs across
    our industrial base, a couple of things become immediately
    apparent. First, we talked about the fragility of the
    industrial base. What we want to do is add stability to the
    industrial base. Second, we've talked about affordability of
    our shipbuilding program, so what we want to do is figure out
    how to drive affordability into those programs, to the extent
    possible. Then, third is competition, which couples the
    industrial base and the element of affordability.
        The strategy that we have put forward does a couple of
    things. First, it sends--it sends a signal to our industrial
    base that we're going to limit competition to the two
    shipbuilders that we believe are absolutely essential to our
    industrial base.
        Senator Hirono. By the way, what are the two shipbuilders?
        Mr. Stackley. Ingalls Shipbuilding and----
        Senator Hirono. In Mississippi.
        Mr. Stackley. In Mississippi. General Dynamics NASSCO, in
    San Diego.
        Today, Ingalls builds four different ship classes. Today,
    NASSCO builds one Navy ship class and commercial work. We view
    them both critical to our industrial base. If we were to go
    down a path of open competition and soliciting these one at a
    time, there is tremendous uncertainty in terms of what the
    outcome would be, in terms of our industrial base and our--the
    affordability of those programs.
        So, what we've elected to do is, one, limit the competition
    to those two builders; two, we're soliciting each of these
    programs separately but together, and requiring bids on each
    from both shipbuilders so that we can get competition inside of
    each, as opposed to either allocating or awarding one at a
    time, which puts one of the shipbuilders at risk.
        So, in order to preserve the industrial base, leverage
    competition, bring affordability and stability to that
    industrial base, we've elected to limit the competition, go out
    with a single solicitation that contains both the LHA-8 and the
    TAO(X), size them what we believe to be about the same, in
    terms of man hours of work, and also about the same, in terms
    of horizon of time, so that industry has some assurety that,
    okay, ``We understand how much work is coming our way, we can
    build that into our business base. We'll sharpen our pencils,
    in terms of competition.''
        Senator Hirono. So--I thank you for that explanation. You
    mentioned, though, there are eight shipbuilding facilities, and
    four of them are only one contract away from going under. So,
    are you also looking at what's going on with those other
    shipyards, shipbuilding----
        Mr. Stackley. Yes, ma'am. So----
        Senator Hirono.--facilities?
        Mr. Stackley.--the other shipyards--first, on the nuclear
    side, electric boat, in Newport News, are not in what I would
    call a fragile position.
        Senator Hirono. The four that are one contract away.
        Mr. Stackley. They're in very strong position. In fact,
    they have increasing workload coming their way.
        NASSCO is a contract away. They are in peril. So, that's
    why this is an important aspect of NASSCO's viability.
        Ingalls--if Ingalls does not get one of those two major
    programs, then they are at risk.
        Now, separately--I haven't discussed Bath Iron Works,
    because Bath Iron Works does not build these ship types, so
    they're not a part of this discussion. But, separately, we did
    talk about the multiyear for destroyers. Continuing down that
    multiyear path, it's important to both BIW and its competitor,
    Ingalls, on that program.
        Then we have the two builders for the Littoral Combat Ship
    (LCS), Austal, on the Gulf Coast, Marinette Marine, up on the
    Great Lakes. They're separately addressed, in terms of the
    future shipbuilding strategy for LCS followed by a future
    frigate.
        Senator Hirono. Thank you.
        Thank you, Mr. Chairman.
        Senator Wicker. Well, Senator McCain expressed concern
    about competition. I think that was with--in regard to aircraft
    carriers.
        Mr. Stackley. Yes, sir.
        Senator Wicker. Would you care to respond to that?
        Mr. Stackley. He made a generic comment that we need
    competition to help control costs on our programs. We are
    absolutely in agreement there. With specific regards to the
    aircraft carrier, we have been asked, and we are following
    suit, to conduct a study to look at alternatives to the Nimitz-
    and Ford-class size and type of aircraft carrier, to see if it
    makes sense. We've done this in the past. We're not going to
    simply break out prior studies, dust them off, and resubmit it.
    We're taking a hard look to see, Is there a sweet spot,
    something different, other than today's 100,000-ton carrier,
    that would make sense to provide the power projection that we
    need, that we get today from our aircraft carriers, but, at the
    same time, put us in a more affordable position for providing
    that capability?
        Senator Wicker. Okay. But, right now he's--he's made a
    correct factual statement with regard to the lack of
    competition.
        Mr. Stackley. Yes, sir. There's--if you--there is no other
    shipyard in the world that has the ability to construct a Ford
    or a Nimitz nuclear aircraft carrier, other than what we have
    Newport News, and the capital investment to do that is
    prohibitive to set up a second source. So, obviously, we are
    content, not with the lack of competition, but we are content
    with knowing that we're only going to have one builder for our
    aircraft carriers.
        Senator Wicker. Let me also follow up on the question about
    the EMALS. Now, EMALS is a catapult and an arresting mechanism
    based on electromagnets. Senator McCain was getting a lot of
    questions in in his allotted time. So, let me give you time to
    explain about that.
        You've been in this business a long time. But, we adopted
    EMALS, decided to move to that, well over a decade ago. Is that
    correct, Secretary Stackley?
        Mr. Stackley. Yes, sir. I think the decision was made in
    2004.
        Senator Wicker. Okay. Well, is it a good point, looking
    back, to say we were doing fine with the steam-powered
    catapults and arresting mechanisms, so why did we go to this?
        Mr. Stackley. Let me start with the requirement. The--this
    wasn't a technology push. Going to EMALS enabled a couple of
    things. One, in terms of requirements, increased sortie
    generation rate, which is basically the mission of the aircraft
    carrier--launch and recover aircraft. Two, reliability. The
    number-one--
        Senator Wicker. So, EMALS is supposed to be able to give us
    a better rate of----
        Mr. Stackley. Yes, sir.
        Senator Wicker.--of launching.
        Mr. Stackley. Yes, sir.
        Senator Wicker. Is that, in fact, going to be the case?
        Mr. Stackley. That will be the case. Let me just say that,
    today, analytically and what we've done in terms of land-based
    testing support that. Now what we've got to do is get out and
    demonstrate that, in terms of operational testing, and, more
    importantly, in terms of joint fleet exercises as the ship
    readies for deployment.
        Senator Wicker. When that happens, to what extent will the
    rate be----
        Mr. Stackley. We have----
        Senator Wicker.--better?
        Mr. Stackley. We have--oh, not better.
        Senator Wicker. Faster?
        Mr. Stackley. Yes, sir. I would tell you it's in the 25
    percent----
        Admiral Mulloy. Our sortie generation rate is the
    combination about--as he said, 20 to 25 percent better. It's
    the electromagnetic launching, it's the ability load fuels and
    weapons, and it's also the landing capacity. So, it's really
    all taken together as--the ship is designed to be able to land
    airplanes quickly and maneuver them in front of the island,
    which is further back and taller. There are fuel risers and
    there are ammo elevators right there. They can quickly get back
    on the EMALS catapult. So, at the total synergy, it's about a
    25 percent increase of throughput capacity on the carrier.
        An important driver on this was also the manpower and
    piping required, is that, when you design the ship for long
    term, steam catapults, you have to tap off hot water from the
    reactor plant, bring it up, you have steam piping, a
    significant amount of maintenance. You're saving about--I think
    it's between 4 and 600 people on that ship, or--and so, you're
    generating billions of savings because I don't have to bring as
    many petty officers in to work on steam piping for the entire
    50-year ship of the life. I just have electromagnets operating
    all the time. So, I reduce the number of people onboard, and I
    increase the throughput rate. So, when you look at a 50-year
    life of a ship, it's a significant investment.
        The last one is, I can adjust the weight throw, is--as I
    look at heavier airplanes and unmanned air vehicles, a steam
    catapult hits it with a certain thud. With the EMALS, I can
    adjust the weight down for a light, unmanned air vehicle, or I
    can go for a fully loaded F-35 advanced airplane, with weight
    and space growth for the future, all on one thing, with greater
    flexibility.
        Senator Wicker. When will this become a reality, if
    everything goes well out in the water?
        Admiral Mulloy. It'll be testing in 2016. So, we expect to
    be, at least on the airplane side, in 2017 through 2019, work
    up to deploy; the unmanned air vehicles will depend upon some
    other follow-on work, sir.
        Senator Wicker. When might the first deployment be out on
    the ocean?
        Admiral Mulloy. I'll get back to you an exact date, sir----
        Senator Wicker. Good.
        [The information referred to follows:]

        Gerald R. Ford (CVN 78) is the first aircraft carrier to be
    constructed with EMALS and is planned ot make her first deployment in
    2019.

        Admiral Mulloy.--but I believe it's at the end of this
    decade.
        Senator Wicker. We take questions for the record.
        Okay. Now, Senator Hirono was on a very important topic
    with regard to the Ohio replacement class. In your joint
    statement, which I do commend you all for, ``The Navy continues
    to need significant increases in our top line beyond the FYDP,
    not unlike that during the period of Ohio construction.''
        What--we know this is expensive, and we're going to wrestle
    with how to help you on this, because it's a vital leg of our
    triad. But, what lessons can we learn from the period of the
    original Ohio construction to help us with dealing with the
    increases in the top line?
        Mr. Stackley. Sir, let me just describe that--we took a
    look at history, in terms of ``What's this boat going to cost
    us, as a percentage of our defense budget, as a percentage of
    our Navy budget, as a percentage of our shipbuilding top
    line?'' As a percentage of our defense budget, it's
    historically right where the Ohio was, and historically right
    where the Polaris was so many years ago.
        Senator Wicker. You're not alarmed.
        Mr. Stackley. Oh, I'm alarmed. Is that--yes, sir.
        Senator Wicker. You're just not surprised.
        Mr. Stackley. I don't think we should be surprised, because
    this is a significant capital investment that comes along every
    30 to 40 years. It's a limited run of very high-end, very
    capable submarines, as opposed to a long production run. What
    that means is, when it comes time to recapitalize, there is
    going to be a significant uptick, bump, increase, in terms of
    our shipbuilding total obligation authority (TOA). That's what
    we're seeing as we march into Ohio replacement period.
        Senator Wicker. Admiral?
        Admiral Mulloy. The other point I'd bring you, sir, back
    then was--it was a national need, and the Navy was internal to
    the Department of Defense budget, but we did not have a Budget
    Control Act containing the strategy. So, in this case, when the
    Secretary of Defense looks at Ohio replacement, I should be
    able to put 1 percent of the DOD budget to the Navy in the
    fiscal guidance. That means, as opposed to other years, when
    the Secretary of Defense went to the President who went to
    Capitol Hill, hey, that 1 percent or, you know, that equivalent
    then would have been the equivalent of $5 or $6 billion a year,
    was available. But, right now, as you look at the Budget
    Control Act, every year through 2023--and it was extended 2
    years because of the 2014-2015 BBA--through 2023, there is a
    hard cap on the Department of Defense.
        So, therefore, I have to go in and say, was--``Oh, gee, if
    I want to give Ohio replacement the $5 billion in 2021 to build
    that ship, who am I going to go through and then take out Air
    Force missiles or I'm going to take out surface ships or I'm
    take out Army brigades?'' So, that's the biggest difference, I
    would say, right now, is--we look at, at least the beginning of
    this program--is we did not have a Budget Control Act on top of
    the Department of Defense when we built Ohio--the Ohio
    replacement--or, pardon me, the Ohio's.
        Admiral Hilarides. I would just--you asked a specific
    question about what lessons you would take. The lesson of the
    Ohio-class was a very stable requirement--I think we made one
    major weapons change in the middle of it, but we knew it when
    we started. It was--started with the C-4 missile, went to the
    D-5 missile. But, the first boat and the last boat are nearly
    identical, even today, 30 years into their life. So, that
    stability of requirements, stability of funding, is what
    allowed us to build those 18 SSBNs, one after another, one year
    at a time, until all 18 were done. That is a good way to build
    ships. It has to be built on an industrial base that's
    sustained by the SSN production that is more steady-state. But,
    by definition, when you do it that way, you create that rise
    for the years that you're building the ships. Without relief,
    many of the other shipbuilding programs will be very, very
    difficult to fund.
        Senator Wicker. Well, we want to work with you on that, and
    be part of the solution.
        Do members of the subcommittee have questions that need to
    be asked at this, or can we submit other questions for the
    record? [No response.]
        I thank this talented panel for their time and information.
        We will adjourn the hearing. Thank you so much.

        [Whereupon, at 11:37 a.m., the subcommittee adjourned.]

        [Questions for the record with answers supplied follow:]
                   Questions Submitted by Senator John McCain
                  ship-to-shore connectors--amphibious assault
        1. Senator McCain. Admiral Mulloy, last week Marine Corps leaders
    provided testimony before this subcommittee on Marine Corps ground
    modernization, including the Amphibious Combat Vehicle (ACV). I
    understand the first ACV, the so-called ACV 1.1, will be a wheeled
    vehicle with potentially limited swim capability and more reliance on
    connectors. In view of the restructured ACV program, has the Navy's
    ability to support ship to shore movement of Marine assault craft
    changed?
        Admiral Mulloy. The Amphibious Combat Vehicle (ACV) program has not
    changed the Navy's ability to support the movement of Marine assault
    craft from ship to shore. The Navy and Marine Corps are fully
    integrated and continue to refine Concept of Operations (CONOPS)
    development through the USN/USMC Surface Connector Council. This
    integration will maintain stable programs of record, avoid unnecessary
    risk, and support amphibious operations.

        2. Senator McCain. Admiral Mulloy, will we have enough connectors?
        Admiral Mulloy. A fleet of 72 Landing Craft Air Cushion (LCAC) /
    Ship to Shore Connector (SSC / LCAC-100) type craft provides sufficient
    capacity to support the most stressing Major Combat Operation (MCO)
    scenario. This will enable the assault echelons of up to two Marine
    Expeditionary Brigades (MEB) conduct joint forcible entry operations.

        3. Senator McCain. Admiral Mulloy, in a contested anti-access, area
    denial (A2/AD) environment, from what distance does the Navy envision
    launching an amphibious assault?
        Admiral Mulloy. 25 nm. The 25 nm distance originates as an initial
    planning consideration in order to conduct over-the-horizon (OTH)
    amphibious operations. As per Joint Doctrine, the ability to conduct
    OTH operations enhances security, aids force protection efforts,
    provides additional maneuver space, and improves the ability to achieve
    surprise. The Joint Force Commander (JFC) and Joint Force Maritime
    Component Commander (JFMCC) will conduct shaping operations to mitigate
    the threat and establish the requisite conditions for an amphibious
    operation (establishment of air and maritime superiority). The overall
    objective of setting these conditions is to permit the amphibious force
    to close the distance which will allow a faster buildup of combat power
    ashore of the Marine Expeditionary Brigade (MEB) Assault Echelon.
                    restart of mark-48 heavy weight torpedo
        4. Senator McCain. Admiral Mulloy, can you describe the need and
    plan for restarting the Mark-48 Heavyweight Torpedo? This budget
    requests 8 of these in fiscal year 2016 and 145 over the next 5 years.
        Admiral Mulloy. In 2010, based on a review of potential warfighting
    scenarios, the Navy was required to increase its overall MK 48 torpedo
    inventory requirement. This resulted in a 830 percent inventory
    shortfall from our current inventory.
        The last MK 48 torpedo was delivered to the fleet in 1996. In
    support of restarting production, the Navy developed the procurement
    strategy, updated obsolete design plans, refurbished test equipment,
    and is in the final stages of preparing for two competitive production
    contracts, expected to be awarded in the third quarter of fiscal year
    2016.
        The program of record procures eight (8) MK 48 MOD 7 CBASS
    heavyweight torpedoes in fiscal year 2016, after completion of required
    initial non-recurring engineering and Proof of Manufacture unit
    testing. Procurement will ramp up over the Future Years Defense Program
    (FYDP), procuring a total of 145 torpedoes between fiscal year 2016 and
    fiscal year 2020. The production line will also incorporate hardware
    and software upgrades, once they become available, to keep pace with
    evolving threats.
                            virginia payload module
        5. Senator McCain. Secretary Stackley and Admiral Hilarides, I
    understand this budget proposes adding the Virginia Payload Module
    (VPM) to one Virginia-class submarine per year beginning in fiscal year
    2019. Can you describe why VPM is required?
        Mr. Stackley and Admiral Hilarides. The ability for undersea
    forces, with their assured access, to be able to provide clandestine
    strike capability is vital to the joint force as adversaries continue
    to invest in anti-access area denial systems. Undersea strike
    capability complicates adversary planning, reastes ambiguity and
    fosters uncertainty. Retirement of the SSGNs beginning in 2026 reduces
    our Navy's undersea strike capacity by 60 percent. VPM will enable
    Virginia-class SSNs to cost effectively mitigate the loss of SSGN
    strike capacity ensuring Navy maintains required clandestine strike
    capacity. VPM will more than triple the Tomahawk Land Attack Missile
    (TLAM) strike capacity of SSNs from the current 12 missiles to 40
    missiles.

        6. Senator McCain. Secretary Stackley and Admiral Hilarides, does
    the design and technical risk allow us to consider accelerating this
    program?
        Mr. Stackley. and Admiral Hilarides. The Navy and its Virginia
    Payload Module (VPM) Design Agent, General Dynamics Electric Boat, are
    currently assessing the feasibility of accelerating the VPM design to
    enable construction start in fiscal year 2018, the last year of the
    previously negotiated Block IV fixed price incentive fee multi-year
    procurement contract. The service's assessment is ongoing anis expected
    to conclude in Summer 2015.

        7. Senator McCain. Secretary Stackley and Admiral Hilarides, what
    will be the impact on the shipbuilders of building two variants of
    Virginia-class submarines concurrently--one with VPM and one without--
    as opposed to one or the other?
        Mr. Stackley and Admiral Hilarides. The impact on the shipbuilders
    of building two variants of Virginia-class submarines concurrently one
    with VPM and one without as opposed to on or the other will depend on
    the acquisition strategy, which has not yet been decided. The Navy
    continues to look at ways to reduce the cost of VPM while maintaining a
    balanced portfolio throughout the other Navy shipbuilding programs
    within the fiscal guidance provided.
                           lha-8 advance procurement
        8. Senator McCain. Secretary Stackley, given the reintroduction of
    the well deck and other changes to LHA-8, can you discuss the pros and
    cons of funding more detailed design and long lead time material in
    fiscal year 2016 to increase design maturity and potentially achieve
    Navy's stated requirement of 11 large deck amphibious ships 1 year
    earlier in fiscal year 2023?
        Mr. Stackley. LHA-8 is currently conducting an early industry
    involvement affordability phase. Upon completion of the affordability
    phase, proven affordability initiatives will be incorporated in the
    LHA-8 design in fiscal year 2016. In addition, long lead time material
    is planned to be procured in fiscal year 2016, including main reduction
    gear. By funding more detailed design and long lead time material in
    fiscal year 2016, the LHA-8 program will have more flexibility with eth
    shipbuilder and government furnished equipment providers to ensure
    critical path long lead time material is available in the construction
    phase.
                 additional ddg procurement in fiscal year 2016
        9. Senator McCain. Secretary Stackley, if funding above the
    President's Budget (PB) were made available, would the Navy support and
    could the industrial base build an additional DDG if three are
    authorized in fiscal year 2016?
        Mr. Stackley. The President's fiscal year 2016 budget request
    supports the planned Multi-Year Procurement profile for two ships for
    fiscal year 2016 with the intent to fund one to each shipyard. This
    profile maintains the planned portfolio for Navy shipbuilding programs
    at both shipyards.
        Funding for an additional DDG in fiscal year 2016 could be
    beneficial to the overall shipbuilding program as a mitigator to the
    impending budget challenges posed by construction of the Ohio
    replacement. Too, such funding could be beneficial for providing added
    stability to our shipbuilding industrial base.
        However, the Navy would not support the addition of a third DDG in
    fiscal year 2016 if this additional ship was funded at the expense of
    other Navy shipbuilding program (or other higher priorities represented
    in the President's Budget request). If a third DDG were added to the
    fiscal year 2016 budget, the Navy's assessment is that the industrial
    base would not be capable of accelerating the construction and delivery
    rate of the current fiscal year 2013-2017 multiyear ships, which would
    effectively equate to an additional ship being built and delivered on
    the back end of the current multiyear.

        10. Senator McCain. Secretary Stackley, how would the existing
    multi-year contract be affected?
        Mr. Stackley. Long term stability, competition, and judicious
    procurement of economic order quantity material have been the key
    factors contributing to the significant savings provided by the DDG-51
    multi-year contracts. If an additional DDG were funded in fiscal year
    2016, the Navy would require that the savings provided by the
    additional ship be in-line (or greater than) the per-ship savings
    provided by the contracted multi-year ships, and we would impose the
    same measures of `stability' represented by this increased workload on
    its planning and execution as exists on the multi-year ships currently
    under contract. This would, in effect, result in a stretch out of the
    multi-year contract schedule.
                 additional ssn procurement in fiscal year 2016
        11. Senator McCain. Secretary Stackley, if funding above the PB
    were made available, would the Navy support and could the industrial
    base build an additional SSN if three are authorized in fiscal year
    2016?
        Mr. Stackley. Funding for an additional SSN in fiscal year 2016
    could be beneficial to the overall shipbuilding program as a mitigator
    to the impending budget challenges posed by construction of the Ohio
    replacement. Too, such funding could be beneficial for providing added
    stability to our shipbuilding industrial base.
        However, the Navy would not support the addition of a third SSN in
    fiscal year 2016 if this additional ship was funded at the expense of
    other Navy shipbuilding program (or other higher priorities represented
    in the President's Budget request). If a third SSN were added to the
    fiscal year 2016 budget, the Navy's assessment is that the industrial
    base would not be capable of accelerating the construction and delivery
    rate of the current Block IV fiscal year 2014-2018 multiyear ships,
    which would effectively equate to an additional ship being built and
    delivered on the back end of the current multiyear.

        12. Senator McCain. Secretary Stackley, how would the existing
    multi-year contract be affected?
        Mr. Stackley. Long term stability, competition, and judicious
    procurement of economic order quantity material have been the key
    factors contributing to the significant savings provided by the
    Virginia-class submarines multi-year contracts. If an additional SSN
    was funded in fiscal year 2016, the Navy would require that the savings
    provided by the additional ship be in-line (or greater than) the per-
    ship savings provided by the contracted multi-year ships, and we would
    impose the same measures of `stability' represented by this increased
    workload on its planning and execution as exists on the multi-year
    ships currently under contract. This would, in effect, result in a
    stretch out of the multi-year contract schedule.
                               maritime strategy
        13. Senator McCain. Admiral Mulloy, the new Maritime Strategy
    concludes that ``Naval Logistics Integration is a key enabler of our
    ability to sustain forces operating from the sea. Historically, the
    capability to sustain distant operations has served as a cornerstone of
    naval power projection.'' What measures have you put in place to ensure
    our current logistics concepts of operation and force structure plans
    for the Combat Logistics Fleet (CLF) will be viable in the potential
    ``contested environments'' described in the new Maritime Strategy,
    where CLF ships will be at more risk and losses would be more likely?
        Admiral Mulloy. In order to determine the number and types of ships
    required, we conduct periodic force structure assessments to provide a
    comprehensive review of operational demands. Our 2012 Force Structure
    Assessment (FSA) determined a post-2020 requirement for 306 ships in
    the battle force (including 29 CLF ships) and emphasized forward
    presence while re-examining resourcing requirements for operational
    plans and defense planning scenarios. In 2014, we conducted an interim
    update to the 2012 FSA which re-validated that 29 CLF ships were
    sufficient to meet the demands of a globally distributed force in the
    near term with the retention of T-AKEs in full operating status.
        The analysis also determined that the programmed force structure
    should be reevaluated post fiscal year 2020, as LCS delivers in numbers
    and platforms such as JHSV and Afloat Forward Staging Bases potentially
    take on more robust employment profiles than initially envisioned. The
    Navy plans to conduct a follow-on assessment in fiscal year 2020 to
    review/update CLF sufficiency requirements. The next generation oiler,
    T-AO(X), begins delivery in fiscal year 2020 and an assessment at that
    time would be timely enough to affect CLF procurement numbers should a
    change be required.

        14. Senator McCain. Admiral Mulloy, do you anticipate that our
    current approach to sustaining underway forces will need to change in a
    highly contested environment? For example, we have based our CLF fleet
    requirements on a very efficient model of deployed force operating in
    groups that can be resupplied by one or two CLF ships. If the force is
    required to be more distributed due to A2/AD threats, how does that
    change our logistics concepts and what are the implications for
    attributes of a future CLF fleet?
        Admiral Mulloy. Navy just completed a CLF assessment in fiscal year
    2015 that indicated CLF force structure was sufficient to meet the
    demand of a globally distributed force in the near term with the
    retention of all T-AKEs in full operating status. The assessment did
    not specifically address distributed lethality, but this was covered in
    the 2020 Campaign Analysis Study, which was done in parallel and
    considered the threats of an adversary possessing A2/AD capabilities,
    including anti-ship ballistic and cruise missiles, land-based maritime
    strike aircraft, submarines, and sea mines. The study also determined
    that the programmed force structure should be reevaluated post fiscal
    year 2020, as LCS delivers in numbers and platforms such as JHSV and
    Afloat Forward Staging Bases potentially take on more robust employment
    profiles than initially envisioned. Navy plans to conduct a follow-on
    assessment in fiscal year 2020 to review/update CLF sufficiency
    requirements.
                          combat logistics fleet ships
        15. Senator McCain. Admiral Mulloy, the Navy's multiproduct
    replenishment ships (AOEs and AORs) were originally tasked as part of a
    two-stage concept of operations to deliver supplies to carrier battle
    groups operating in higher-threat areas. As part of this model, the
    Navy's single-product CLF ships--the oilers, ammunition ships, and
    stores ships--called for them to deliver their products to the AOEs and
    AORs, which would then take those products into the higher-threat areas
    where the carrier battle groups were operating.
        Is it true that today CLF ships generally only ``shuttle'' fuel and
    supplies out to deployed ships from regional supply and fuel depots, as
    opposed to carrying all the fuel and supplies needed for a carrier
    strike group or amphibious ready group deployment with them and
    deploying with the group? If this is true, would the Navy be better off
    building smaller CLF ships that could be less expensive and thus
    constructed in larger quantities to account for combat losses?
        Admiral Mulloy. Our laydown of the forces are dependent on the
    operational situation, to include the specific nature of the threat
    environment and the geography of the operating area. Whether CLF assets
    are permanently located in the geographic commander's area of
    responsibility or they deploy with a battle group from CONUS, they will
    always be required to periodically console from regional logistics hubs
    and ``shuttle'' fuel and supplies out to deployed ships, as no CLF
    asset can embarked sufficient quantities of all required classes of
    supply to support a battle group for an entire deployment or major
    contingency response.
        The mix of CLF ships contained in the Annual Long-Range Plan for
    Construction of Naval Vessels for fiscal year 2016, possesses the
    requisite capability and capacity to support the COCOMs to meet mission
    demands to Maintain a Safe, Secure, and Effective Nuclear Deterrent;
    Deter and Defeat Aggression, Project Power Despite Anti-access/Area
    Denial Challenges; Counter Terrorism and Irregular Warfare; Provide a
    Stabilizing Presence; Conduct Stability/Counterinsurgency Operations.

        16. Senator McCain. Admiral Mulloy, given that potential
    adversaries in coming years are expected to field increasingly capable
    A2/AD systems for threatening U.S. surface ships, what would be the
    pros and cons of transitioning back to a two-stage CLF concept of
    operations like was conducted during the Cold War?
        Admiral Mulloy. The CLF fleet contained in the Annual Long-Range
    Plan for Construction of Naval Vessels for fiscal year 2016 is well
    suited for operations under a variety of CONOPs and throughout the
    spectrum of military operations. These CONOPs and the number of
    cruiser/destroyer type ships, as described in the fiscal year 2016
    long-range plan, possess the requisite capability and capacity to
    support the Combatant Commanders to meet mission demands. These mission
    demands include providing adequate protection for CLF transiting
    directly from forward logistics sites to deployed customer ships, as is
    commonly seen in dispersed peacetime operations, as well as supporting
    a two stage concept where a station ships remains under a strike
    group's protective envelope, and is resupplied by CLF shuttle ships
    transiting from logistics sites to the sea base with an escort. Our
    laydown of the forces and eventual employment are dependent on the
    operational situation, to include the specific nature of the threat
    environment and the geography of the operating area.

        17. Senator McCain. Admiral Mulloy, what role do constraints on
    funding play in assessing this issue?
        Admiral Mulloy. Funding constraints, such as a return to
    sequestration in fiscal year 2016, would necessitate a revisit and
    revision of the defense strategy. The required cuts would force us to
    further delay critical warfighting capabilities, reduce readiness of
    forces needed for contingency responses, further downsize weapons
    capacity, and forego or stretch procurement of force structure as a
    last resort. Sequestration would significantly reduce the Navy's
    ability to fully implement the defense strategy and damage national
    security.

        18. Senator McCain. Admiral Mulloy, to what extent does the Navy
    plan to escort CLF ships with CRUDES/LCS vs. expecting CLF ships to be
    able to defend themselves in wartime?
        Admiral Mulloy. The disposition of forces will always be dictated
    by the operational situation. CLF ships have limited self-protection,
    particularly, against the evolving Anti-Access/Area Denial (A2/AD)
    threat. During periods of crisis in an A2/AD environment, the Navy will
    deploy forces to best provide an integrated defense of forces forward
    and maintain essential sea lines of communication. CLF on-station ships
    will remain under the maritime defense umbrella of supported forces and
    CLF shuttle ships, transiting between the area of operations and
    logistics hubs will be escorted as the operational environment
    dictates.

        19. Senator McCain. Admiral Mulloy, if escorts are planned,
    describe the conops and the quantity/type/allocation of these escort
    ships necessary to meet all wartime missions on the required timelines?
        Admiral Mulloy. As threat levels increase, forward deployment of
    maritime patrol, littoral combat ships, carrier strike groups and
    independent surface action groups are planned to provide integrated
    maritime, air and missile defense for naval forces and maintain
    essential sea lines of communications. Although globally distributed,
    our maritime surveillance, anti-submarine warfare, air and missile
    defense assets will be positioned as the tactical situation dictates to
    best protect the fleet and its critical sea lines of communications.
        The quantity and type of ships contained in the Annual Long-Range
    Plan for Construction of Naval Vessels for fiscal year 2016, possesses
    the requisite capability and capacity to carry out the DSG mission.
    They enable the COCOMs to meet mission demands to Maintain a Safe,
    Secure, and Effective Nuclear Deterrent; Deter and Defeat Aggression,
    Project Power Despite Anti-access/Area Denial Challenges; Counter
    Terrorism and Irregular Warfare; Provide a Stabilizing Presence;
    Conduct Stability/Counterinsurgency Operations; and Operate Effectively
    in Cyberspace/Space.

        20. Senator McCain. Admiral Mulloy, if LCSs are escorts, how do
    their capabilities match up against the expected threat?
        Admiral Mulloy. Littoral Combat Ship (LCS) capabilities match up
    well against expected threats in the Surface Warfare (SUW) and Anti-
    Submarine Warfare (ASW) escort role, and when coupled with a DDG-51
    Class Destroyer in an adaptive force package, can provide escort
    capability across the full spectrum of ASW, SUW and Air Warfare.
        LCS with a SUW Mission Package is an effective SUW escort--
    especially against swarms of Fast Inshore Attack Craft (FIAC). LCS has
    inherent capability with the 57mm gun, the 30mm gun systems, and the
    embarked helicopter against small boats. With the planned addition of
    the Surface-to-Surface Missile Module and Hellfire Longbow in fiscal
    year 2017, these ships will provide increased SUW capability.
        LCS with an ASW Mission Package is an effective ASW escort. It will
    be equipped with torpedo defense, passive detection capability with the
    Multi-Function Towed Array (MFTA), and active detection capability with
    the Continuous Active Sonar / Variable Depth Sonar (CAS/VDS). With its
    embarked helicopter, LCS is able to prosecute threat submarines in
    defense of the force.
        LCS is not intended to operate as an Area Air Defense escort and is
    equipped with self-defense anti-air warfare capability only.
        Analysis of the LCS ASW Mission Package by Johns Hopkins University
    Applied Physics Lab indicates that LCS will enhance the Fleet's ASW
    capability, a vital component of high value unit defense. In addition,
    recent war games conducted at the Naval War College involving LCS
    demonstrated that adding LCS to an adaptive force package, for either
    its SUW or ASW capabilities, strengthens the force and provides
    improved defense against surface and sub-surface threats in the escort
    role.

        21. Senator McCain. Admiral Mulloy, since the end of the Cold War,
    the CLF fleet transitioned from a force of ships with all-Navy crews to
    a force of MSC-operated ``T'' ships with largely civilian crews. Now
    that we may be shifting from the post-Cold War era to a new
    international security environment characterized by, among other
    things, significant threats to U.S. surface ships operating in blue
    waters, what would be the pros and cons of transitioning CLF ships back
    to all-Navy crews?
        Admiral Mulloy. Whether CLF ships are manned by merchant mariners
    or sailors, the Navy does not believe the concept for CLF protection
    will change, and we are confident that merchant mariners will answer
    the call even in the face of an increasing threat. Maintaining MSC or a
    hybrid crew results in significant manpower and maintenance cost
    savings. MSC manning allows Navy sailors to concentrate on missions
    that require more experienced personnel. There is currently no
    requirement to transition back to Navy crews on CLF ships.

        22. Senator McCain. Admiral Mulloy, what role do constraints on
    funding play in assessing this issue?
        Admiral Mulloy. Because MSC manning results in significant manpower
    and maintenance cost savings, fiscal constraints would increase the
    value of this benefit as Navy balances between capability, capacity and
    readiness.

        23. Senator McCain. Admiral Mulloy, how would the execution of U.S.
    contingency plans be affected at various stages of a conflict by battle
    losses of CLF ships?
        Admiral Mulloy. Any losses to our capacity to provide logistical
    support could have a major impact on our ability to sustain protracted
    naval operations, whether those losses are due to host nation
    sensitivities, destruction of vulnerable naval logistic support bases,
    or loss of CLF.
        Executing appropriate naval concepts of operations and bringing to
    bear adequate operational capabilities, in sufficient quantities, that
    are informed by the operational situation is critical to the success of
    any contingency plan. Establishing and maintaining close relations with
    partner nations in the region, to ensure that forward deployed naval
    forces can be protected and sustained can also be integral to our
    success. If our naval forces cannot provide adequate defense of
    essential sea lines of communications, critical to sustainment, naval
    concepts of employment and plans may have to be adjusted.
                                    tao(x)s
        24. Senator McCain. Admiral Mulloy, will the TAO(X)s be equipped
    with a quantity of ship self-defense systems closer to that of that of
    the AOEs and AORs as originally built, or closer to that of the Kaiser-
    class oilers? If the latter, what is the Navy's strategy for ensuring
    the survivability of TAO(X)s operating in higher-threat areas?
        Admiral Mulloy. The T-AO(X) will have the same self-defense systems
    as the Kaiser-class oilers, or any other MSC operated CLF ship (i.e. T-
    AOE vs AOE as built). During periods of crisis in an A2/AD environment,
    the Navy will deploy forces to best provide an integrated defense of
    forces forward and maintain essential sea lines of communication,
    critical to providing logistical support. CLF on-station ships will
    remain under the maritime defense umbrella of supported forces and CLF
    shuttle ships, and transiting between the area of operations and
    logistics hubs will be escorted as the operational environment
    dictates.

        25. Senator McCain. Admiral Mulloy, if the AOEs and AORs required a
    higher number of ship self-defense systems to counter potential threats
    during the Cold War, why would the TAO(X)s not similarly require a
    higher number of ship self-defense systems in coming years, when
    potential adversaries are expected to field increasingly capable A2/AD
    systems for threatening U.S. surface ships?
        Admiral Mulloy. The T-AO(X) will have the same self-defense systems
    as the Kaiser-class oilers, or any other MSC operated CLF ship (i.e. T-
    AOE vs AOE as built). During periods of crisis in an A2/AD environment,
    the Navy will deploy forces to best provide an integrated defense of
    forces forward and maintain essential sea lines of communication,
    critical to providing logistical support. CLF on-station ships will
    remain under the maritime defense umbrella of supported forces and CLF
    shuttle ships, transiting between the area of operations and logistics
    hubs will be escorted as the operational environment dictates.
                                     ______

                  Questions Submitted by Senator Roger Wicker
                            national security vessel
        26. Senator Wicker. Secretary Stackley, the fiscal year 2016
    Department of Transportation's budget request for The United States
    Maritime Administration (MARAD) includes $5 million for a national
    security multi-mission vessel design. This new ship would replace the
    53-year-old Training Ship--Empire State operated by State University of
    New York (SUNY) Maritime College, which will reach the end of its
    service life in 2019.
        Once constructed and operational, the plan for the new National
    Security Multi-Mission Vessel is to be readily available for deployment
    to support requirements for national security, as well as Department of
    Homeland Security (DHS), Department of Defense (DOD), emergency, and
    humanitarian missions.
        Are you familiar with MARAD's proposed National Security Multi-
    Mission Vessel (NSMV) for which the administration has requested design
    funding?
        Mr. Stackley. Yes, The NMSV is a Department of Transportation (DOT)
    effort for the recapitalization of public nautical school ships. It has
    been discussed with my staff, and is being developed with input from my
    office and other offices within the Navy, including Military Sealift
    Command. The Navy has had representatives assist DOT as technical
    advisors at various steps in the process, including requirements
    development.
        The current fleet of seven training ships are owned and maintained
    by DOT and loaned to the six State Maritime Academies (SMAs) and U.S.
    Merchant Marine Academy (USMMA) as required by statue. The ships are
    employed as academic and seagoing laboratories providing the Midshipmen
    and Cadets with critical hands-on navigation and engineering training
    that is mandatory for their U.S. Coast Guard (USGC) credential.
        The Maritime Administration's State Maritime Academy proposal
    request includes $5 million for the planning and design of a new
    construction NSMV to support development of program requirements and
    delivery strategy for DOT's academy training ship program.
          Funding supports the NSMV design initiative, not
    implementation of a new program of record.
          Supports short-term planning activities, including: study
    of requirements alternatives, cost-tradeoffs, cost analysis, schedule,
    acquisitions strategy, and vessel design.
          Support long-term planning activities, including study of
    program delivery strategy and production timetables for the incremental
    replacement of the current academy training ships.

        27. Senator Wicker. Secretary Stackley, what is your position on
    the proposal?
        Mr. Stackley. The proposed NSMV would provide a modern, functional,
    environmentally compliant training ship which could be readily deployed
    to support multiple Department of Homeland Security national security
    missions and Department of Defense (DOD) emergency and humanitarian
    missions.
        The NMSV is a critical aspect to the training of qualified U.S.
    mariners, who are integral to supporting economic and national
    security. School ships have been used in the past to provide Federal
    response for humanitarian assistance and disaster relief (HA/DR) (e.g.
    Hurricanes Katrina and Rita and Super Storm Sandy). The proposed new
    design would provide a modern training platform, with increased
    capabilities to support HA/DR missions in the future. The NSMV
    recapitalization of five training ships owned and maintained by DOT
    will expand upon the capabilities of the training ships to support such
    missions.
        Although the Navy has no specific requirement for this vessel, we
    do see the value in having a low cost Federal resource that could be
    called upon in lieu of a military resource which has other operational
    obligations and a significantly higher operating cost. Additionally,
    there may be utility in a common hull design and machinery space for
    both the NSMB and future non-combatant vessels.
       electromagnetic aircraft launch system and advanced arresting gear
        28. Senator Wicker. Secretary Stackley, Electromagnetic Aircraft
    Launch System (EMALS) and Advanced Arresting Gear (AAG) are core
    technologies of the USS Ford (CVN-78) as well as all future U.S.
    aircraft carriers. The Government Accountability Office (GAO) recently
    published a report that stated the Navy will defer some work on CVN-78
    until after delivery of the ship in order to create a funding reserve
    to pay for any additional, unanticipated cost growth. Deferring work or
    underfunding sustainment of critical repair parts has predictable
    results--a less capable ship when delivered.
        Will any work on EMALS or AAG be deferred until after the delivery
    of CVN-78? If so, what work or will be deferred?
        Mr. Stackley. EMALS and AAG work will be completed during the ship
    construction phase of each Ford-class ship and not deferred until after
    delivery. These systems are required for the ship's baseline capability
    to launch and recover aircraft for flight deck certification and
    demonstration of key performance parameters.

        29. Senator Wicker. Secretary Stackley, what is the status of U.S.
    Navy sustainment funding/repair parts for EMALS and AAG in fical year
    2016 and throughout the Future Year Defense Plan, both in the
    production contract and system development and demonstration contract?
        Mr. Stackley. The Navy has defined the sustainment requirements for
    the concurrently developed technologies and is funding the spare and
    repair parts for EMALS and AAG within the existing budget. In addition,
    the Navy is addressing all CVN 78 class sustainment issues in fiscal
    year 2016 and future years through the program planning and budgeting
    process. Overall, CVN 78 sustainment includes the requirement for life-
    cycle management, engineering, training and logistics support for new/
    modified systems and technologies.
        The Navy has contracts in place with General Atomic for the EMALS
    and AAG spares required during installation and test on CVN 78, and has
    allocated approximately $17 million in fiscal year 2015 to address
    spares requirement post CVN 78 delivery. Spares and repairs required
    for EMALS and AAG system development and demonstration (SDD) are within
    the scope of their respective SDD contracts and with General Atomics
    and are included in the President's fiscal year 2016 budget request.
        30. Senator Wicker. Secretary Stackley, maximizing sortie
    generation rate was the purpose behind these new technologies. Will
    underfunding sustainment of EMALS and AAG affect the originally
    designed sortie rate?
        Mr. Stackley. EMALS and AAG are technologies that contribute to
    Ford-class aircraft carrier Sortie Generation Rates. In addition, EMALS
    and AAG reduce CVN 78 class aircraft carrier manning, reduce life cycle
    costs, and provide a larger aircraft envelope to support existing and
    future carrier airwing. Underfunding sustainment of EMALS and AAG could
    impact the operational availability of these systems onboard Ford-class
    aircraft carriers during operational periods.
                                     ______

                  Questions Submitted by Senator Kelly Ayotte
                                  cost growth
        31. Senator Ayotte. Secretary Stackley and Admiral Hilarides, what
    percentage of the Ford-class's design was complete in 2008 when the
    construction contract was signed?
        Mr. Stackley. The CVN 79 design is more mature than was the CVN 78
    design when the CVN 78 construction contract was signed. In addition,
    CVN 79 construction material availability is higher in comparison to
    the material availability when the CVN 78 and CVN 79 design maturity
    and material availability in terms of percent complete at times of
    construction contract award.

    ------------------------------------------------------------------------
     At Detail Design and Construction Award   CVN 78 (2008)   CVN 79 (2015)
    ------------------------------------------------------------------------
    Design product model complete...........             65%            100%
    Initial drawings released...............             25%             78%
    Construction Material Availability......             83%             97%
    ------------------------------------------------------------------------

        32. Senator Ayotte. Secretary Stackley and Admiral Hilarides, what
    are you doing to reduce concurrency in Navy shipbuilding programs?
        Mr. Stackley and Admiral Hilarides. The Navy currently has
    disciplined processes that provide the rigor required for ensuring
    design quality, readiness, and progress is adequate for sustained and
    efficient production for ships prior to start of construction. The
    Navy's Systems Engineering approach provides opportunities to reduce
    and manage concurrency risk through a series of reviews including
    critical design reviews, internal Navy gate reviews, acquisition
    milestone reviews, all coupled with stringent configuration control
    processes. Most notably just prior to the start of construction,
    shipyards conduct Production Readiness Reviews (PRRs) where the Navy is
    presented detailed analyses for planned construction efforts at the
    system level in efforts to provide detailed justification and rationale
    for the ship's readiness for the start of production. The PRR is
    designed as a system-level preparation tool and used in assessing risks
    as the ship transitions from design development to production.
        Additionally, Section 124 of the fiscal year 2008 National Defense
    Authorization Act (Public Law 110-181) required the Secretary of the
    Navy, concurrent with approving the start of construction of the first
    ship for any major shipbuilding program, to submit a report to the
    Congress on the results of any PRR and certify that the findings of any
    such review support commencement of construction.
        Because the detail design and construction of the lead ship covers
    a substantial period of time, award of one or more follow-on ships
    typically occurs prior to delivery of the lead ship. This approach
    supports the Navy's goal and intent to provide stable requirements for
    shipbuilding quantities which further promotes executable, efficient
    workloads in stabilizing the shipbuilding and supplier industrial base.
        Where warranted the Navy may choose to build and test prototypes
    for major pieces of equipment and subsystems as a means of risk
    mitigation; thereby reducing the risks of integration and testing for
    continued efficiencies to be gained during construction, ultimately
    contributing towards improved performance for follow on ships.
                            State of Industrial Base
        33. Senator Ayotte. Secretary Stackley and Admiral Hilarides, how
    would you describe the state of the industrial base that supports
    shipbuilding?
        Mr. Stackley and Admiral Hilarides. The report is ``For Official
    Use Only'' and is retained in committee files.

        34. Senator Ayotte. Secretary Stackley and Admiral Hilarides, to
    what degree are key Navy shipbuilding programs reliant on single source
    suppliers?
        Mr. Stackley and Admiral Hilarides. The U.S. Naval shipbuilding
    industrial base is a complex, multi-tiered network of equipment, system
    and component suppliers. Due to the unique characteristics of U.S. Navy
    shipbuilding programs, constantly advancing technology, and economic
    factors, the number and type of suppliers supporting our Navy is ever-
    changing. Some suppliers will enter and exit the shipbuilding
    industrial base as supply and demand for products change, while other
    suppliers have supported our ship programs since inception. There are
    single/sole-source suppliers of critical shipbuilding/manufacturing
    components required for our naval ships.
        Reliance on single source suppliers varies by ship program. Our
    nuclear carrier new construction, carrier refueling complex overhauls
    and submarine programs have more single source suppliers than do our
    surface ship programs. These three nuclear ship programs have 40-80
    single/sole source suppliers and comprise a large percentage of the
    critical suppliers identified by the programs. Single/sole source
    surface ship suppliers typically are less than a dozen for most ship
    classes, but like the nuclear ships, these sole source suppliers make
    up over half of the critical suppliers identified by these ship
    programs.

        35. Senator Ayotte. Secretary Stackley and Admiral Hilarides, how
    has the frequent lack of timely and predictable funding impacted
    suppliers--particularly small and medium-sized suppliers--who are
    critical to the production of our nation's ships and submarines?
        Mr. Stackley and Admiral Hilarides. Defense suppliers' cost and
    schedule performance relies upon timely contracting and receipt of
    funds in support of our major programs. Large-sized suppliers typically
    have sufficient workload and business base to weather the impacts of
    funding instability. Small and medium-sized suppliers are prone,
    however, to suffer inefficiencies and layoffs in response to funding
    instability. These impacts harm our program in the short term as a
    result of cost increases, and in the long term as a result of loss of
    skilled labor and potential loss of suppliers in our vendor base.
    Additionally, suppliers cite difficulty planning future work and
    unexploited savings opportunity as major concerns. These difficulties
    in formulating accurate plans for future work result in an inability to
    arrive at long-term purchasing agreements with vendors, which lead to
    higher material prices.
        This affects Navy ship prices and contributes to deterioration in
    Navy buying power. In order to preserve key industrial base
    capabilities, this cycle needs to be broken. The Navy has engaged in
    initiatives such as advanced procurement, economic order quantity,
    multi-year procurements, and material commonality, to provide stability
    and mitigate volatility at the supplier level. In addition, DOD and the
    Navy have programs in place to address supplier issues, including
    programs to improve productivity, efficiency, and competitiveness. The
    Navy continues to work closely with prime contractors to ensure key
    suppliers are identified and effective action is taken to reduce costs.

        36. Senator Ayotte. Secretary Stackley and Admiral Hilarides, if
    sequestration returns next year, what would be the impact on the Navy's
    shipbuilding suppliers?
        Mr. Stackley and Admiral Hilarides. If sequestration returns next
    year, our shipbuilding suppliers would be impacted in the same manner
    as the ship programs that they support. A return to sequestration in
    fiscal year (FY) 2016 would necessitate a revisit and revision of the
    Defense Strategic Guidance. Required cuts will force us to further
    delay critical warfighting capabilities, reduce readiness of forces
    needed for contingency response, further downsize weapons capacity, and
    forego or stretch procurement of ships and submarines only if
    necessary. We will be unable to mitigate the shortfalls like we did in
    fiscal year 2013 because prior-year investment balances were depleted
    under fiscal year 2013 sequestration.
        Because of their irreversibility, force structure cuts represent
    options of last resort for the Navy. Disruptions in naval ship design
    and construction plans are significant because of the long-lead time,
    specialized skills, and extent of integration needed to build military
    ships. Because ship construction can span up to nine years, program
    procurement cancelled in fiscal year 2016 will not be felt by the
    Combatant Commanders until several years later when the size of the
    battle force begins to shrink as those ships are not delivered to the
    fleet at the planned time. Likewise, cancelled procurement in fiscal
    year 2016 will cause some suppliers and vendors of our shipbuilding
    industrial base to close their businesses. This skilled, experienced
    and innovative workforce cannot be easily replaced and it could take
    years to recover from layoffs and shutdowns; and even longer if
    critical infrastructure is lost. Stability and predictability are
    critical to the health and sustainment of this vital sector of our
    Nation's industrial capacity.
                    Ohio-class Submarine Replacement Program
        37. Senator Ayotte. Secretary Stackley, if additional funding is
    not provided for the procurement of the Ohio replacement, what specific
    impact will it potentially have on other important Navy programs?
        Mr. Stackley. Within the Navy's traditional Total Obligation
    Authority, and assuming that historic shipbuilding resources continue
    to be available, the OR SSBN would consume about half of the
    shipbuilding funding available in a given year--and would do so for a
    period of over a decade. The significant drain on available
    shipbuilding resources would manifest in reduced procurement quantities
    in the remaining capital ship programs. Therefore, additional resources
    for shipbuilding will likely be required during this period.
        Since the CVN funding requirements are driven by the statutory
    requirement to maintain eleven CVNs, and accounting for one OR SSBN per
    year (starting in fiscal year 2026), there would only be about half of
    the resources normally available to procure the Navy's remaining
    capital ships. At these projected funding levels, Navy would be limited
    to on average, as few as two other capital ships (SSN, DDG, CG, LPD,
    LHA, etc.) per year throughout this decade.
        Such low shipbuilding rates for an extended period of time would
    result in a battle force inadequately sized to meet our naval
    requirements in support of the Defense Strategic Guidance. Further,
    there is significant risk to the industrial base in this case since low
    production rates outside of the SSBN and CVN production lines may not
    provide adequate work to keep shipyards operating at minimum sustaining
    levels and could result in shipyard closures. Compounding these
    impacts, shipbuilding costs would increase as a direct result of the
    severe reduction of non-nuclear construction.
        Navy's ability to recover Fast Attack Submarine, Large Surface
    Combatant, Small Surface Combatant and Amphibious Force inventories
    lost during the decade and a half in which the SSBNs were being
    procured would be challenged, particularly in those parts of the
    industrial base permitted to atrophy during this period. Given such
    extraordinary impacts to Navy shipbuilding and attendant impacts to the
    size of our Fleet, it would be necessary to increase our shipbuilding
    budget at the expense of other equally critical capabilities necessary
    to the Navy/Marine Corps mission.
                              advanced connectors
        38. Senator Ayotte. Admiral Mulloy, the Marine Corps testified that
    the Amphibious Combat Vehicle (ACV) is one of its top modernization
    priorities. Given the future threat environment, the ACV will require
    ``advanced connectors:'' other platforms that will transport it quickly
    from the ship to within range of shore. Current platforms do not
    provide the necessary range, speed, and survivability vital to future
    amphibious operations. Does the Navy have a long-term plan to solve
    this problem?
        Admiral Mulloy. The current ACV does not require any changes to
    existing or programmed connectors (i.e., LCAC, SSC, LCU, SC(X)R).
        ACV characteristics and capabilities will be integrated within the
    future comprehensive surface connector strategy. The Marine Corps is
    actively considering the capabilities and limitations of the Navy's
    current fleet of surface connectors and future development of
    replacements when developing requirements for ACV procurement to ensure
    interoperability. The Navy and Marine Corps are fully integrated on
    requirements development for the ACV and remain committed to a high
    water speed vehicle as part of a complementary family of surface and
    air connectors.
        The Office of Naval Research (ONR) is developing a Science and
    Technology (S&T) portfolio of initiatives to gain knowledge and reduce
    technology risk in support of the 2025 ACV 2.0 Decision Point. ACV 2.0
    is a planning construct that pursues desired High Water Speed (HWS)
    capability; not a specific, singular vehicle-type or craft. The desired
    capability sought by the Marine Corps for ACV 2.0 is the ability to
    achieve HWS in ship-to-shore operations to extend the amphibious task
    force's capacity for littoral maneuver. ACV 2.0 may consist of a self-
    deploying assault amphibian, follow-on wheeled ACV, advanced generation
    connectors or a combination of those options. ONR, in coordination with
    PEO-LS and DC CD&I, is forming an Integrated Product Team to coordinate
    HWS S&T initiatives and identify specific investment areas. Three broad
    technical lanes are identified as: 1) Enhancements to legacy platforms;
    2) New concepts for amphibian platforms; and 3) Future connector-
    enabled HWS.
                            amphibious ship program
        39. Senator Ayotte. Secretary Stackley, Admiral Hilarides, and
    Admiral Mulloy, the fiscal year 2016 Budget seeks research and
    development funding for the LX(R) program and funding for a 12th LPD-17
    class ship. If all of this happens, the amphibious force will grow to
    34 ships. Is 34 the right number of amphibious vessels?
        Mr. Stackley, Admiral Hilaridies, and Admiral Mulloy. The Chief of
    Naval Operations and Commandant of the Marine Corps have determined
    that the force structure for amphibious lift requirements is 38
    amphibious ships, fiscally constrained to 33 ships. There are two main
    drivers of the amphibious ship requirement: maintaining persistent
    forward presence, which enables both engagement and crisis response,
    and delivering the assault echelons of up to two Marine Expeditionary
    Brigades (MEB) for joint forcible entry operations. Balancing the total
    naval force structure requirements against fiscal projections imposes
    risk on meeting this requirement. Based on the footprint of a 2.0 MEB
    assault echelon force, a minimum of 30 operationally available ships
    are necessary to provide a force made up of ten Amphibious Assault
    Ships (LHD/LHA), ten Amphibious Transport Docks (LPD) and ten Dock
    Landing Ships (LSD).
        The 2014 update to the 2012 Force Structure Assessment (FSA)
    reflects an anticipated increase in the Amphibious Warfare ship
    requirement to 34 ships and includes an additional LPD to reduce risk
    in the generation of ships necessary to conduct a 2.0 MEB assault
    echelon forcible entry operation. This permits the Navy to maintain a
    4-ship Amphibious Ready Group (ARG) in the Forward Deployed Naval Force
    (FDNF) without disrupting the deployment cycles of the remaining non-
    FDNF ARGs. The added presence provides flexibility in the Pacific
    Theater of Operations and accommodates disaggregated or split ARG
    operations to increase the commander's area of influence. This
    requirement will be reviewed during the next full FSA.

        40. Senator Ayotte. Secretary Stackley, Admiral Hilarides, and
    Admiral Mulloy, what is the Marine Corps' requirement for amphibious
    vessels? When will we reach that number?
        Mr. Stackley, Admiral Hilaridies, and Admiral Mulloy. The Chief of
    Naval Operations and Commandant of the Marine Corps have determined
    that the force structure for amphibious lift requirements is 38
    amphibious ships, fiscally constrained to 33 ships (11 LHD/LHAs, 11
    LPDs, and 11 LSDs). Balancing the total naval force structure
    requirements against fiscal projections imposes risk on meeting this
    requirement. Based on the footprint of a 2.0 MEB assault echelon force,
    a minimum of 30 operationally available ships are necessary to provide
    a force made up of ten Amphibious Assault Ships (LHD/LHA), ten
    Amphibious Transport Docks (LPD) and ten Dock Landing Ships (LSD). The
    fiscal year 2016 shipbuilding plan will result in a projected
    amphibious ship force structure of at least 31 ships in the near-term
    and maintains at least 33 ships throughout the 2020s and 2030s. At the
    end of fiscal year 2018, the Amphibious Force Structure will be 35
    ships, which includes 11 LHD/LHAs, 12 LPDs, and 12 LSDs.

        41. Senator Ayotte. Secretary Stackley, Admiral Hilarides, and
    Admiral Mulloy, what is the impact on our national security and the
    Navy's ability to project power if we are short on amphibious vessels?
        Mr. Stackley, Admiral Hilaridies, and Admiral Mulloy. Amphibious
    ships operate forward to support allies, respond to crises, deter
    potential adversaries, and provide the nation's best means of
    projecting sustainable power ashore; they also provide an excellent
    means for providing humanitarian assistance and disaster relief.
    Amphibious forces comprised of Sailors, Marines, ships, aircraft and
    surface connectors provide the ability to rapidly and decisively
    respond to global crises without a permanent footprint ashore that
    would place unnecessary political or logistical burdens upon our allies
    or potential partners. There are two main drivers of the amphibious
    ship requirement: maintaining persistent forward presence, which
    enables both engagement and crisis response, and delivering the assault
    echelons of up to two Marine Expeditionary Brigades (MEB) for joint
    forcible entry operations. A reduced amphibious inventory means there
    is less margin for error, and a reduced ability to respond to
    unforeseen or emergent circumstances, and to meet the strategic goals
    outlined in the QDR and DSG respectively. Further, it would mean that
    the in-service amphibious ships would be operated at such high tempo
    that maintenance cost and service life would likely be affected.
                         china's military modernization
        42. Senator Ayotte. Admiral Mulloy, in your testimony before the
    House Armed Services Committee on February 25, you said that China's
    submarine force is growing ``at a tremendous rate'', and that their
    number of diesel and nuclear attack submarines has surpassed ours. What
    is your assessment of China's submarine fleet?
        Admiral Mulloy. China's integration of more advanced submarines and
    deployments into broader areas are expected to continue through 2020.
    China continues progress with the design of more advanced submarines,
    weapons, and sensors. To date, the People's Liberation Army Navy
    (PLA(N)) operates domestically designed nuclear ballistic missile
    submarines (SSBN), nuclear attack submarines (SSN), and conventional
    submarines (attack submarines (SS) and diesel submarines-AIP equipped
    (SSP)).
        However, I misspoke in the HASC hearing on February 25, 2015. In
    response to Representative Hartzler's question about the numbers and
    capability of China's submarines, I said that China had more submarines
    than the United States. However, current inventory shows that China has
    63 submarines (4 SSBN, 5 SSN, 12 SSP, and 41 SS), which is fewer than
    the 71 submarines that the U.S. Navy currently has in inventory. I
    meant to say that at the pace they are building, China could exceed the
    U.S. in quantity by 2020. The quality of U.S. submarines remains
    superior, but China is making significant advances in their capability
    to build submarines.

        43. Senator Ayotte. Admiral Mulloy, what implications does the
    growth in China's submarine have for America's submarine fleet and
    anti-submarine capabilities?
        Admiral Mulloy. China's integration of more advanced submarines and
    deployments into broader areas are expected to continue through 2020.
    China continues progress with the design of more advanced submarines,
    weapons, and sensors. As the number of modern and capable submarines
    fielded by our adversaries continues to rise, it reduces our relative
    warfighting advantage in the undersea domain, adding risk should we
    need to engage in conflict and potentially reducing credibility to
    deter adversaries and assure allies in the future.
                                     ______

                  Questions Submitted by Senator Mazie Hirono
                            shock testing of cvn-78
        44. Senator Hirono. Secretary Stackley, the Navy routinely performs
    testing on new ship classes to determine that these ships are capable
    of withstanding possible damage in combat operations. One of these
    tests is called a shock trial. For the CVN-78 program, I understand
    that the Navy intends to perform shock trials on the CVN-79, the second
    ship in the class. I also am aware that Dr. Michael Gilmore, the
    Director of Operational Test & Evaluation, has complained that the Navy
    should not wait until the second ship of the class to perform shock
    trials. Could you describe why Dr. Gilmore does not agree with the Navy
    position, and could you also describe why the Navy is not persuaded by
    Dr. Gilmore's arguments?
        Mr. Stackley. Subsequent to the March 18 hearing, the Under
    Secretary of Defense for Acquisition, Technology, and Logistics
    (USD(AT&L)) issued an Acquisition Decision Memorandum (ADM) directing
    Navy to execute a Full Ship Shock Trial (FSST) and Total Ship
    Survivability Test (TSST) on CVN 78 prior to initial operational
    deployment. The Navy is currently revising the CVN 78 Class program
    plan to comply with the ADM.
                   ddg-51 with air and missile defense radar
        45. Senator Hirono. Secretary Stackley, one of the lessons the Navy
    has had to periodically re-learn is that we shouldn't be making changes
    in the middle of a shipbuilding acquisition contract. Congress approved
    a 5-year multiyear procurement program to buy the Flight IIA version of
    the DDG-51 between fiscal year 2013 and fiscal year 2017. The Navy had
    wanted blanket authority to start buying a new version of the DDG-51
    with a new radar system during the middle of the multiyear procurement
    program. That radar system is called the Air and Missile Defense Radar
    (AMDR) and the version of the DDG-51 with the AMDR would be referred to
    as a Flight III DDG-51. The language approving the fiscal year 2013 to
    fiscal year 2017 multiyear program indicated that Congress might be
    willing to approve an engineering change proposal for including the
    AMDR on the second DDG in fiscal year 2016, but that the Navy would
    have to demonstrate certain levels of maturity in the AMDR program and
    the DDG-51 design to include the AMDR before proceeding. Can you tell
    us why we should approve the Navy's proposal to include AMDR on the
    second DDG-51 in the fiscal year 16 budget request?
        Mr. Stackley. The DDG-51 program has a long history producing three
    flights (I, II, IIA). Flight I produced the original baseline while
    Flight II introduced enhanced capability in Combat Systems and
    Electronic Warfare. Flight IIA constituted a more significant change to
    the ship by incorporation of an organic dual hangar/dual helicopter
    aviation facility, extended transom, zonal electrical power
    distribution, enhanced missile capacity, and reconfigured primary radar
    arrays. Flight III will take a similar approach as Flight IIA by
    incrementally increasing capability. Flight IIA production was in the
    middle of the fiscal year 1998-2001 Multi-Year Procurement and the
    class was upgraded with a new radar, the AN/SPY-1D(V), and an improved
    combat management computing plant, AEGIS Baseline 7.1.
        Ship system changes were successfully executed by Engineering
    Change Proposals (ECP) introduced via the existing systems engineering
    processes on both Flight II and IIA in support of the ongoing
    construction program. The Navy and prime contractor have significant
    experience underpinned with proven processes that have provided an
    effective, efficient and affordable upgrade to the class while managing
    risk. The alternative would be to start a new ship design and
    incorporate the same capabilities into a production line for ship
    construction.
        AMDR, designated AN/SPY-6, will first be procured in fiscal year
    2016 in conjunction with Flight III. AN/SPY-6 provides tremendous
    capability improvement in Integrated Air and Missile Defense that will
    address the emergent threat. AN/SPY-6 is progressing well through
    Engineering Manufacturing and Development that began in 2014. The
    program has met all major milestones, including successful completion
    of Hardware Critical Design Review (CDR) in December 2014, and is on
    track to complete System CDR in April 2015. The tactical software is
    well into development, and that software is already integrated with and
    running radar hardware. All of the combat system and ship interfaces
    for the radar have been defined and are under engineering configuration
    management control. The DDG-51 shipbuilders are designing the ship
    changes required to host the radar, based on detailed radar design
    information already delivered. The small amount of residual risk
    associated with implementing this radar on an fiscal year 2016 Flight
    III justifies procurement of the radar as well as execution of the
    Flight III DDG-51 ECP during the fiscal year 2013-2017 multiyear
    procurement contract. Risk is also managed by introducing AN/SPY-6
    through the proven AEGIS combat system in the well-established DDG-51
    hull.
        In summary, the radar hardware design is complete, and is currently
    integrated with tactical software. The program is on track to support a
    production decision for procurement of the fiscal year 2016 Flight III
    DDG-51. Introducing AN/SPY-6 on Flight III remains the lowest risk,
    fastest, and least expensive means to deliver this vitally needed
    capability to pace the expected threat.

        46. Senator Hirono. Secretary Stackley, why should we consider the
    program to modify the design of the DDG-51 during the middle of a
    multiyear program as low risk?
        Mr. Stackley. Prior to Flight III, the DDG-51 program has produced
    three flights (I, II and IIA). Flight II introduced enhanced capability
    in Combat Systems and Electronic Warfare. Flight IIA constituted a more
    significant change to the ship by incorporation of an organic dual
    hangar/dual helicopter aviation facility, extended transom, zonal
    electrical power distribution, enhanced missile capacity, and
    reconfigured primary radar arrays. The combined scope and means for
    integrating the changes for Flight III is similar to the approach used
    in the Flight IIA upgrade.
        Additionally, during Flight IIA production in the middle of the
    fiscal year 1998-2001 multi-year procurement (MYP), the class was
    significantly upgraded with a new radar, the AN/SPY-1D(V), and an
    improved combat management computing plant, AEGIS Baseline 7.1. The
    previous ship system changes were successfully executed by Engineering
    Change Proposals (ECPs) introduced via the existing systems engineering
    processes on both Flight II and IIA in support of the ongoing
    construction program. This methodology takes advantage of Navy and
    prime contractor experience with the proven processes while offering
    effective and efficient introduction of the desired configuration
    changes. It also provides the more affordable and effective approach
    toward producing this enhanced ship capability in lieu of starting a
    new ship design to incorporate the same capabilities into a new
    production line for ship construction.
        AMDR, officially designated SPY-6, is to begin procurement in
    fiscal year 2016 as part of the Flight III DDG-51. Given the tremendous
    capability improvement that AMDR/SPY-6 provides in order to meet
    emergent air and ballistic missile threat requirements, the small
    amount of residual risk associated with implementing this radar on an
    fiscal year 2016 DDG-51 justifies procurement of the radar as well as
    execution of the Flight III DDG-51 ECP during the fiscal year 2013-2017
    MYP contract. Introducing SPY-6 through the proven Aegis combat system
    in the well-established DDG-51 hull remains the lowest risk, fastest
    way to get this capability to the Fleet.
        Since work on this current Engineering and Manufacturing
    Development phase began in January 2014, the AMDR program has met all
    major program milestones per plan, including successful completion of
    Hardware Critical Design Review (CDR) in December 2014, and is on track
    to complete System CDR in April 2015. The actual tactical software that
    runs the radar is well into development, and that software is already
    integrated with and running radar hardware. All of the combat system
    and ship interfaces for the radar have been defined and are under
    engineering configuration management control. The DDG-51 shipbuilders
    are designing the ship changes required to host the radar, based on
    detailed radar design information already delivered.
        In summary, the radar hardware design is complete, and is already
    integrated with initial tactical software. The program is on track,
    with schedule margin, to support a production decision for procurement
    of the fiscal year 2016 Flight III DDG-51. Introducing the AMDR/SPY-6
    on the Flight III DDG-51 remains the lowest risk, fastest, and least
    expensive means to deliver this vitally needed capability to our Fleet.
                         cruiser modernization program
        47. Senator Hirono. Admiral Mulloy, Congress and the Navy have
    debated the future of the cruisers in the fleet over the last 3 years.
    At the start of last year, the Navy wanted to put aside 11 cruisers to
    modernize, but Congress directed the Navy to maintain them as part of
    the fleet. Both the fiscal year 2015 National Defense Authorization Act
    and the Omnibus Appropriations Act carried language related to the
    modernizing cruisers. How does the Navy plan to execute the cruiser
    modernization plan?
        Admiral Mulloy. The Navy is executing the ``2-4-6'' plan for CGs
    63-73 as directed by Congress. Within the guidelines of the fiscal year
    2015 Consolidated and Further Continuing Appropriations Act, the Navy
    will induct no more than two ships per year for no more than four
    years, and have no more than six ships in a modernization period at any
    given time. In fiscal year 2015, the Navy is inducting the first two
    ships, the USS Gettysburg (CG 64) and USS Cowpens (CG 63) into
    modernization. The fiscal year 2016 President's Budget request inducts
    the next two CGs, USS Vicksburg (CG 69) and USS Chosin (CG 65), into
    modernization in fiscal year 2016.
        Using this ``2-4-6'' plan, the final cruiser retirements will occur
    between 2036 and 2039. In the meantime, the Navy will face far higher
    fleet operations and maintenance and personnel costs than anticipated.
    Under the Navy's original PB2015 plan, the final CG retirement would
    have occurred in 2045, at a significantly reduced cost to the Navy, and
    would have relieved pressure on a shipbuilding account largely consumed
    in the 2030s with building Ohio replacement SSBNs and aircraft
    carriers. This is a more cost efficient plan. Accordingly, the
    Department of Defense will continue to work with Congress to implement
    the Navy's cruiser modernization plan submitted with the PB2015 budget.
        (Per ``Report to Congress on the Annual Long-Range Plan for
    Construction of Naval vessels for fiscal year 2016'' dated March 2015,
    page 11.)

        48. Senator Hirono. Admiral Mulloy, please provide details of the
    Navy's cruiser modernization plan.
        Admiral Mulloy. A notional timeline for the Navy's cruiser
    modernization plan is provided below.

        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Induction Continuous Maintenance Availability (I-CMAV): Occurs
    prior to Phase I of modernization. This is notionally a 90 day long
    availability (depicted in yellow above) that places most equipment in
    preserved status and will essentially ``seal the ship'' in a safe and
    known condition prior to Phase I modernization. Ships inducted will be
    consolidated in Norfolk and San Diego. Following the I-CMAV, crew size
    on each ship inducted will be reduced to about 45 sailors with an
    Acquisition Professional Commanding Officer (CO) for the duration of
    Phase I (about 2.25 years as depicted by the line chart above).
    Responsibility for the ship will be transferred to the Naval Sea
    Systems Command (NAVSEA).
        Phase I Modernization: Basic upkeep and maintenance of the ship for
    a 2.25 year period with interspersed industrial periods, mainly for
    hull, mechanical and electrical (HM&E) modernization. During the
    ``grey'' periods depicted above, the ships will be monitored by
    government and contracted personnel via sensors installed during the I-
    CMAV. Topside maintenance will be performed as needed, but the ship
    will be sealed; no personnel allowed inside the skin of the ship except
    for periodic inspections. Crew members assigned (45 as noted above)
    will be involved in planning the industrial periods represented by the
    ``orange'' blocks in the figure above. When not engaged in activities
    relating to their assigned ship, they may be temporarily assigned to
    the Regional Maintenance Center or to schools as required.
        One or two (ship dependent; based on previous work completed) 26
    week industrial periods (orange blocks) will be scheduled to conduct
    HM&E modernization. The first period will consist mainly of topside
    modernization and targeted Combat Systems removal. The second period
    will be more intrusive and include significant HM&E modernization. Crew
    assigned to the ship (still 45) will oversee these periods and review
    tagouts, Work Authorization Forms and other documentation.
        Phase II Modernization: Major Combat Systems modernization period
    with remaining HM&E work; approximately 86 weeks in length (represented
    in brown in the chart above). Includes a 35 week Dry-docking period
    (cross-hatched brown), combat systems upgrade to AEGIS Baseline 9A with
    SM-6 Standard Missile and Naval Integrated Fire Control--Counter Air
    (NIFC-CA) capability, and ends with Sea Trials. Crew will be re-
    constituted in 4 phases with 100 percent on board prior to Aegis Light
    Off (week 52).
        Responsibility for the ship will return to the ship's CO (and type
    commander) following re-crew. Details of command and control,
    responsibilities transferred, and timeline of transfer will be
    contained in an OPNAVINST and Memorandum of Agreement between NAVSEA
    and Navy Surface Forces (SURFOR).
        Phase III Modernization: Period of reintroduction to the Fleet
    (depicted in green above) which will include inspections by the Board
    of Inspection and Survey (INSURV) and combat system ship qualification
    testing (CSSQT). This will notionally be a 90 day period. As a
    modernized CG is returned to the Fleet, an older CG (CGs 52-62) will be
    decommissioned. This program allows the Navy to maintain 11 CGs--one
    for each Carrier Strike Group--through 2034, when the first modernized
    CG from this program will decommission.

    DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR
                   2016 AND THE FUTURE YEARS DEFENSE PROGRAM

                                  ----------

                           WEDNESDAY, MARCH 25, 2015

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

                    NAVY AND MARINE CORPS AVIATION PROGRAMS

        The subcommittee met, pursuant to notice, at 9:02 a.m. in
    room SR-222, Russell Senate Office Building, Senator Roger F.
    Wicker (chairman of the subcommittee) presiding.
        Committee members present: Senators Wicker, Ayotte, Tillis,
    Hirono, and Kaine.

         OPENING STATEMENT OF SENATOR ROGER F. WICKER, CHAIRMAN

        Senator Wicker. The meeting will come to order. Thank you
    very much.
        We convene this morning to examine Navy and Marine Corps
    aviation programs.
        I want to thank everyone for accommodating an earlier than
    usual start to our hearing. The President of Afghanistan, Dr.
    Ashraf Ghani, will address a joint session of Congress at 11
    a.m. President Ghani took his oath of office last September,
    marking Afghanistan's first peaceful and democratic transition
    of power.
        I view the situation now in Afghanistan as a success story.
    I am pleased that the administration announced that it will
    slow the withdrawal of troops during the remainder of 2015.
    These decisions should be made based on conditions on the
    ground, not political calculations.
        We are grateful for our servicemembers and veterans who
    have served in Operation Enduring Freedom, and we pay tribute
    to the 2,215 brave Americans who made the ultimate sacrifice in
    Afghanistan.
        This morning our subcommittee welcomes three distinguished
    witnesses: Vice Admiral Paul Grosklags, Principal Military
    Deputy for the Assistant Secretary of the Navy for Research,
    Development, and Acquisitions; Lieutenant General Jon M. Davis,
    Deputy Commandant for Marine Corps Aviation; and Rear Admiral
    Michael C. Manazir, Director of Air Warfare for the Department
    of the Navy. Our subcommittee is grateful to you for your
    decades of service to our Nation.
        Well-respected expert witnesses have testified before the
    Senate Armed Services Committee that our Nation faces the most
    diverse, complex, and potentially dangerous threats to national
    security in recent history. However, instead of strengthening
    our military and ensuring our men and women in uniform have
    comprehensive training and world-class equipment they need,
    sustained budget cuts and mindless sequestration are damaging
    our military's force structure, modernization, and readiness.
    The stakes are high during these challenging times.
        For example, hard-earned gains in the Middle East are
    increasingly challenged by the extremists of the Islamic State.
    Vladimir Putin's belligerence continues to test NATO's resolve
    in Eastern Europe, and the Peoples Republic of China continues
    to expand and modernize its military, threatening to alter the
    balance of power in the Pacific.
        Given these global threats, I hope our witnesses today will
    elaborate on the impact that sequestration would have on Navy
    and Marine Corps aviation programs, the Navy and Marine Corps'
    ability to execute our country's national security strategy,
    and the vitality of our aviation industrial base.
        This morning our subcommittee will examine four key areas
    related to the Navy's aviation programs.
        First, aircraft readiness. There are problems with the
    Navy's inventory of 600 legacy F/A-18C strike fighters. Half of
    the fleet is out-of-reporting status. This means that the
    aircraft are not available to train our aviators or execute
    combatant commander requests for aviation support. We face
    these challenges because of delays in the F-35 Joint Strike
    Fighter program, budget reductions that have caused an acute
    backlog in aircraft depot maintenance, and an extremely high
    OPTEMPO [operational tempo]. This situation has led the Navy to
    fly its newer F/A-18E and F Super Hornets at higher rates than
    expected, accelerating the consumption of their service lives.
        We also hope to hear about the gap in fighter aircraft. Our
    subcommittee would like to learn more about gaps in the fighter
    fleet. The Chief of Naval Operations, Admiral Greenert,
    estimates that the Navy needs up to 36 new strike fighters to
    help mitigate a current shortfall of 104 strike fighters, with
    a potential peak shortfall of 134 aircraft in 2020. Although
    Congress has not yet received an fiscal year 2016 unfunded
    priority list from the Department of the Navy, I hope our
    witnesses today will be able to provide more details on
    unfunded requirements for multi-role fighter aircraft.
        Third, we would like to know more about the Navy's plans
    for its next generation naval cargo aircraft. Admiral Greenert
    recently made the decision to propose the replacement of the
    aging COD [Carrier Onboard Delivery] aircraft, with the V-22
    Osprey. I understand this plan involves shifting some planned
    procurement of V-22 aircraft from the Marine Corps to the Navy.
    We would appreciate the Navy providing this subcommittee with
    details and ramifications of this proposal, including the
    ability of the F-22 to fulfill COD mission requirements.
        Fourth, I would like an update on the status of the Navy's
    UCLASS manned aerial vehicle program. I understand that program
    requirements are still in the process of being finalized. Our
    subcommittee has a particular interest in learning why the Navy
    does not plan to support the continuation of the Navy unmanned
    combat air system demonstration program in the interim. This
    demonstration program could reduce risk in technology
    development for follow-on programs such as UCLASS. We have
    already invested $1.5 billion to develop and construct two
    cutting-edge aircraft. Over 85 percent of the projected service
    life remains on these two aircraft. So help us understand the
    Navy's reasons for ending this development program.
        Turning to the Marine Corps aviation, our subcommittee is
    aware of the Marine Corps' issues with their legacy fighter
    fleet. Testing is underway in Yuma, AZ, and other locations on
    the F-35B Joint Strike Fighter. This summer, a significant
    milestone will occur with initial operational capability for
    the F-35B.
        However, there are concerns about the warfighting
    capability of these initial aircraft. For example, the
    Department of Defense's Director of Operational Test and
    Evaluation, Dr. J. Michael Gilmore, observed in his annual
    report for 2014 that the annual software for these Marine Corps
    aircraft will be delivered with troubling capability
    shortfalls. Our subcommittee would like our witnesses to
    elaborate on whether the marine aviators flying the F-35B in
    hostile environments after declaration of IOC [initial
    operational capability] have the appropriate levels of safety,
    reliability, and combat effectiveness they need.
        Finally, I would like an update on Navy and Marine Corps
    munitions. Earlier this month, Admiral Greenert and Commandant
    Dunford testified before the Senate Armed Services Committee
    that Navy and Marine Corps munition inventories may not be
    sufficient to support combatant commander requirements. This
    subcommittee needs to understand the nature of the shortfalls
    in air-to-air weapons, as well as air-to-surface munitions such
    as the joint standoff weapon and advanced anti-radiation guided
    missile. I would like to hear about the levels of risk
    associated with insufficient levels of these weapons which are
    absolutely vital to the execution of our current and near-term
    contingency operations.
        Once again, I want to thank our witnesses for their service
    to our Nation and recognize the ranking member, Senator Hirono,
    for whatever opening remarks she might have.

                   STATEMENT OF SENATOR MAZIE HIRONO

        Senator Hirono. Thank you, Mr. Chairman.
        I join the chair in thanking you for your service and, of
    course, for the wonderful work that all of our men and women
    are doing in Afghanistan and other parts of the world. Our
    thoughts and prayers go with those who are actively serving and
    also with their families who, of course, also serve and
    sacrifice every day.
        The chair and I share many similar concerns, especially
    relating to gaps in our fighter fleet and concerns surrounding
    the F-35s.
        So our witnesses this afternoon face huge challenges as you
    strive to balance the need to support ongoing operations and
    sustain readiness with the need to modernize and keep the
    technological edge so critical to military success. These
    challenges have been made particularly difficult by the
    spending caps imposed by the Budget Control Act, caps that were
    modestly relieved for fiscal year 2015 in the Bipartisan Budget
    Act that we enacted earlier this year. However, these caps are
    scheduled to resume full blast in fiscal year 2016 and beyond.
    These caps already seriously challenge our ability to meet our
    National security needs and have already forced the military
    departments to make painful tradeoffs. Unless modified for
    years after fiscal year 2015, these caps will threaten our
    long-term national security interests.
        This year, I believe we have two pivotal situations in
    naval aviation. This is the year when, if the schedule works
    out as planned, the Marine Corps will be in a position to
    declare initial operating capability [IOC] for the F-35B, the
    short takeoff, vertical landing (STOVL). We need to hear how
    the testing is proceeding, something already mentioned by the
    chair, and how other parts of the program are supporting that
    IOC declaration later this year.
        Second, the Navy is facing a major shortfall in its strike
    fighter inventory. The Navy responded to forecasts of a
    shortage of almost 200 aircraft several years ago by better
    managing the remaining life of the existing aircraft by
    redistributing aircraft within the force, designing a series of
    maintenance and rehabilitation measures, including a service
    life extension program, or a SLEP, for older aircraft, and
    buying new F-18 aircraft.
        After several years of predicting significant improvements
    in the Navy's ability to support operating forces, including
    aircraft carrier squadrons and Marine Corps squadrons, with
    strike fighter aircraft, the Navy this year is predicting a
    major erosion in that ability. This year, the Navy estimates
    that their shortfall has risen from a level last year of
    roughly 30 aircraft to a level this year of more than 100
    aircraft to as high as 134 aircraft. The committee received
    previous testimony from Navy witnesses and a shortfall of
    roughly 65 strike fighters was manageable.
        We need to understand why there is an increased projection
    of a shortfall, what effect a shortfall of 134 aircraft means,
    and what actions the Navy will take to reduce or mitigate that
    shortfall.
        So I will stop now and let us hear from the witnesses this
    morning. Thank you very much, Mr. Chairman.
        Senator Wicker. Thank you, Senator Hirono.
        I understand Vice Admiral Grosklags will make a statement
    representing the views of all three witnesses. Is that correct,
    Vice Admiral?
        Admiral Grosklags. Yes, sir, that is correct.
        Senator Wicker. Proceed then. Thank you so much.

     STATEMENT OF VADM PAUL A. GROSKLAGS, USN, PRINCIPAL MILITARY
         DEPUTY, ASSISTANT SECRETARY OF THE NAVY FOR RESEARCH,
                     DEVELOPMENT, AND ACQUISITIONS

        Admiral Grosklags. Mr. Chairman, Ranking Member Hirono,
    distinguished members of the subcommittee, thank you for the
    opportunity to appear before you today to talk about our naval
    and Marine Corps aviation programs.
        As you are aware, we have submitted a formal statement for
    the record, and I will give a single brief opening statement.
        The United States is a maritime nation. We have global
    interests and global responsibilities. Our Navy and Marine
    Corps provide the continuously forward-deployed, persistent
    presence which ensures our Nation's global reach, global
    access, and ability to project power regardless of changing
    alliances, permissions, or circumstances on the ground. We move
    at will across the world's oceans, seas, and littorals,
    providing our Nation's leaders with offshore options where it
    matters and when it matters.
        The aviation component of our Marine Corps and Marine Corps
    team enables our sea-based and expeditionary naval forces to
    bring simultaneous influence over vast stretches of the
    maritime environment, across the shoreline, and deep inland. As
    such, it is critical that our aviation forces remain always
    ready, poised to engage at a moment's notice with the required
    capacity and capability to influence events and, if necessary,
    to fight and to win.
        Last year, we saw significant advancements in many of our
    aviation programs such as the first P-8 deployment to the
    western Pacific, standup of a second special purpose MAGTF
    [Marine Air Ground Task Force] formed around the unique
    capabilities of the V-22 and the KC-130J. We saw initial
    qualification of the Joint Strike Fighter on board our aircraft
    carrier, and we had initial operational capability [IOC] with
    the MH-6 this year and its advanced precision kill weapons
    system.
        This year, we look forward to a number of additional
    milestones, to include the initial operational capability [IOC]
    of the F-35B that the ranking member just referred to,
    initiation of sensor testing on our MQ-4C Triton unmanned ISR
    vehicle, first flight of the CH-53K for the Marine Corps by the
    end of this calendar year. Our first deployment of our E-2D
    began this month, and along with the Air Force, we have
    declared initial operational capability [IOC] for the AIM-120D,
    the most current version of that weapon, and we will declare
    initial operational capability for the AIM-9X block 2 this
    month.
        For 2016, our naval aviation budget request is based on a
    number of central themes: fifth generation fighter attack
    capability; netted persistent multi-role intelligence,
    surveillance, reconnaissance; critical supporting capabilities
    in electronic attack, maritime patrol, and vertical lift;
    advanced strike weapons programs; readiness recovery; and
    targeted modernization of the force to ensure our continued
    relevance and sustainability.
        Now, as this subcommittee is well aware and as you alluded
    to in your opening remarks, Mr. Chairman, our security
    interests face an increasing array of threats and demands.
    However, our budget position grows ever more challenging. We
    will continue to prioritize the readiness of the forces
    currently forward deployed over all of other investments.
    However, we must also recognize that those Navy and Marine
    Corps forces that this Nation deploys to meet the future threat
    will be dependent upon the equipment and the readiness
    modernization programs of today.
        Across the department, our strategies for the development,
    procurement, and sustainment of both current and future systems
    are critically dependent upon stable and predictable funding at
    a level consistent with the President's budget 2016 request. We
    believe the alternative has been made clear by our Secretary
    and by the service chiefs. It will be a smaller force, a force
    less forward deployed, a force slower to respond to a crisis,
    and a force which, when it does respond, will be less capable
    and more vulnerable.
        Mr. Chairman, we request your leadership and the support of
    this subcommittee to provide the resources that enable your
    Navy and Marine Corps team to be our Nation's first responders.
        Again, thank you for the opportunity to appear before you
    today to discuss our programs, and we look forward to your
    questions.
        [The prepared joint statement of Admiral Grosklags, Admiral
    Manazir, and General Davis follows:]

       Prepared Joint Statement by Vice Admiral Grosklags, Rear Admiral
              Michael C. Manazir, and Lieutenant General Jon Davis
                                  introduction
        Mr. Chairman, Senator Hirono, and distinguished members of the
    Subcommittee, we thank you for the opportunity to appear before you
    today to discuss the Department of the Navy's (DON) Aviation programs.
    Our testimony will provide background and rationale for the
    Department's fiscal year 2016 budget request for aviation programs
    aligning to our strategic priorities and budgetary goals.
        The United States is a maritime nation with global
    responsibilities. Our Navy and Marine Corps' persistent presence and
    multi-mission capability represent U.S. power projection across the
    global commons. They move at will across the world's oceans, seas and
    littorals, and they extend the effects of the sea-base and
    expeditionary basing deep inland. Naval Aviation provides our nation's
    leaders with ``offshore options'' where it matter, when it matters. We
    enable global reach and access, regardless of changing circumstances,
    and will continue to be the nation's preeminent option for employing
    deterrence through global presence, sea control, mission flexibility
    and when necessary, interdiction. We are an agile strike and amphibious
    power projection force in readiness, and such agility requires that the
    aviation arm of our naval strike and expeditionary forces remain
    strong.
        There are several central themes to our 2016 Naval Aviation Budget
    plan: 5th generation fighter/attack capability; netted persistent
    multi-role intelligence, surveillance, reconnaissance and targeting;
    supporting capabilities such as electronic attack, maritime patrol, and
    vertical lift; advanced strike weapons programs; readiness recovery;
    and targeted modernization of the force for relevance and
    sustainability.
        First, we are acquiring F-35 5th generation fighter/attack aircraft
    while maintaining sufficient tactical aviation (TACAIR) inventory
    capacity. Our plan will integrate 5th generation technologies into the
    carrier air wing and expeditionary forces while maintaining and
    modernizing the capability of the current TACAIR fleet. The F-35B and
    F-35C will replace Marine Corps F/A-18 and AV-8B aircraft significantly
    increasing capabilities across the range of military operations of
    Marine sea and land-based MAGTFs. The F-35C, F/A-18E/F, and EA-18G
    provide complementary capabilities that enhance the versatility,
    lethality, survivability, and readiness of our air wings. F/A-18A-F and
    AV-8B aircraft will continue to receive capability enhancements to
    sustain their lethality well into the next decade. Future avionics
    upgrades will enable network-centric operations for integrated fire
    control, situational awareness and transfer of data to command-and-
    control nodes.
        To meet the demand for persistent, multi-role intelligence,
    surveillance, and reconnaissance (ISR) capability, the Navy and Marine
    Corps are building a balanced portfolio of manned and unmanned aircraft
    focused on missions in the maritime environment. The Unmanned Carrier
    Launched Airborne Surveillance and Strike (UCLASS) system will provide
    a persistent aircraft carrier-based ISR&T and strike capability as an
    integral part of carrier air-wing operations no later than the early
    part of the next decade. MQ-4C Triton will provide persistent land-
    based maritime ISR and complement our P-8 Multi-Mission Maritime
    Aircraft (MMA); MQ-8 Fire Scout will provide ISR support to our
    Frigates and other suitably-equipped air-capable ships; and smaller
    unmanned systems such as the RQ-21A Small Tactical Unmanned Aircraft
    System (STUAS) and RQ-7B Marine Corps Tactical UAS (MCTUAS) will
    provide the shorter duration, line-of-sight reconnaissance capability
    integral at the unit level.
        The Fiscal Year 2016 Budget request enables Naval Aviation to
    continue recapitalization of our aging fleets of airborne early
    warning, maritime patrol, and vertical lift platforms. The Department
    is recapitalizing our fleet of E-2C airborne early warning aircraft
    with the E-2D, maritime patrol and reconnaissance with the P-8A,
    airborne electronic attack with the EA-18G, and Carrier Onboard
    Delivery (COD) with the V-22. E-2D integrates a new electronically-
    scanned radar that provides a two-generation leap in technology with
    the capability to detect and track existing and emerging air-to-air and
    cruise missile threats in support of Integrated Air and Missile Defense
    (IAMD). P-8A combines the proven reliability of the commercial 737
    airframe with avionics that enable integration of modern sensors and
    robust communications. We have deployed our third P-8A squadron and are
    on a path to replace the P-3C by the end of the decade. Electronic
    attack capabilities, both carrier-based and expeditionary, continue to
    mature with the fielding of EA-18G squadrons while we continue
    development of the Next Generation Jammer (NGJ) to replace the legacy
    ALQ-99 Tactical Jamming System. Finally, the Department is planning to
    recapitalize its fleet of C-2A COD aircraft with an extended range
    variant of the V-22. The decision closes a capacity gap in the COD
    capability within an existing program of record.
        The Navy and Marine Corps are participating in Joint Future
    Vertical Lift efforts to identify leverage points for future rotorcraft
    investment. In fiscal year 2016 the Department continues to modernize
    vertical lift capability and capacity with procurement of MH-60R, AH-
    1Z, UH-1Y, and MV-22B, and the continued development of the CH-53K and
    VH-92A (Presidential Helicopter replacement). The Special Purpose
    Marine Air-Ground Task Force-Crisis Response (SPMAGTF-CR), designed to
    support U.S. and partner security interests throughout the CENTCOM,
    EUCOM and AFRICOM Areas of Responsibility (AOR), leverages these
    vertical lift investments. The unparalleled speed and range of the MV-
    22B, together with the KC-130J and joint tanker assets provides both
    SPMAGTF-CR with the operational reach to respond to crises throughout
    any AOR.
        Within our Fiscal Year 2016 Budget request the Department continues
    investment in advanced strike weapons programs. These include Air
    Intercept Missiles (AIM-9X/BLK II and AIM-120D); Small Diameter Bomb II
    (SDB II); Tactical Tomahawk Cruise Missiles (TACTOM/BLK IV); the Long-
    Range Anti-Ship Missile (LRASM); the Advanced Anti-Radiation Guided
    Missile (AARGM); the Joint Air-to-ground Missile (JAGM); and the
    Advanced Precision Kill Weapon System (APKWS II). These capabilities
    enable our Navy and Marine Corps warfighters to deter and dominate
    potential adversaries in any environment.
                               tactical aviation
    F-35B/F-35C Lightning II:
        The F-35 Joint Strike Fighter (JSF) will form the backbone of U.S.
    air combat superiority for decades to come. Delivering this
    transformational capability into front line forces as soon as possible
    remains a top priority. JSF will replace legacy tactical fighter fleets
    of the Navy and Marine Corps with a dominant, multirole, fifth-
    generation aircraft, capable of projecting U.S. power and deterring
    potential adversaries. The Fiscal Year 2016 President's Budget requests
    $1.0 billion RDT&E,N and $3.1 billion APN.
        The F-35 program is executing well across the entire spectrum of
    acquisition, to include development and design, flight test,
    production, fielding and base stand-up, sustainment of fielded
    aircraft, and stand up of a global sustainment enterprise. To date, all
    variants of F-35 have flown close to 28,000 hours close to 11,000 hours
    for the F-35B and more than 3,000 for the F-35C. Our overall assessment
    is that steady progress is being made on all aspects of the program.
    However, F-35 does continue to have its risks, inclusive of software
    development and integration. However, discipline instilled several
    years ago in the way software is developed, lab tested, flight tested,
    measured and controlled has resulted in improved and more predictable
    outcomes.
        The program is in the final stages of flight test for Block 2B
    software; Block 3i software is anticipated to deliver all planned
    capabilities; and Block 3F, which has the most software development
    risk driven by data fusion, is improving. Data fusion enables the
    aircraft to integrate onboard capabilities with information from
    multiple other sources, such as non-F-35 aircraft, satellites, and
    ground stations, to provide the pilot complete and accurate battlespace
    awareness. This multi-platform fusion is the most complex remaining
    developmental activity and is being closely monitored. Block 3F
    complexity and technical challenges, combined with a delay in the start
    of 3F flight testing may result in delivery up to 4-6 months late.
    Overall, the Block 2B configuration, which will support the Marine
    Corps' F-35B Initial Operational Capability (IOC) will deliver during
    the Summer of 2015 and is tracking to plan; Block 3i, the same
    capability as Block 2B but hosted on new and improved computers, is
    expected to be ready by the end of calendar year 2015, and Block 3F
    capability will enable Navy to IOC the F-35C variant in 2018 along with
    the Marine Corps its first F-35C in 2020.
        The program has delivered 124 aircraft to test, operational, and
    training sites, with the production line running approximately two-
    months behind schedule. Due to government/industry manufacturing
    management initiatives, production deliveries are improving and the
    current delays do not pose any long-term schedule or program delivery
    risks.
        Affordability remains a top priority. We have made it clear to the
    program management team and the F-35 industrial base that the JSF must
    finish development within the time and money allocated; continue to
    drive cost out of aircraft production; and reduce life-cycle costs. To
    that end the program has engaged in a multi-pronged approach to reduce
    costs across production, operations, and support. The government/
    industry team is reducing aircraft production costs through ``blueprint
    for affordability'' initiatives and reducing F135 engine costs via
    ongoing engine ``war on cost'' strategies. These efforts include up-
    front contractor investment on cost reduction initiatives mutually
    agreed upon by the government and contractor team. This arrangement
    motivates the contractors to accrue savings as quickly as possible in
    order to recoup their investment, and benefits the government by
    realizing cost savings at the time of contract award. The goal is to
    reduce the flyaway cost of the U.S. Air Force (USAF) F-35A to between
    $80 and $85 million dollars by 2019, which is anticipated to
    commensurately decrease the cost to the Marine Corps F-35B and Navy F-
    35C variants. The program has set a goal of decreasing overall
    operating and support life-cycle cost by 30 percent.
    F/A-18 Overview
        The F/A-18 Hornet continues to meet readiness and operational
    commitments. There are 26 Navy Super Hornet strike fighter squadrons
    and a total inventory of 521 F/A-18E/Fs; deliveries and squadron
    transitions will continue through 2018. There are nine Navy and 11
    Marine Corps F/A-18 A-D active strike fighter squadrons and a total
    inventory of 614 Hornets. Super Hornets and F/A-18A-D Hornets have
    conducted more than 214,000 combat missions since September 11, 2001.
    F/A-18 A/B/C/D Hornet
        The Fiscal Year 2016 President's Budget requests $371.2 million in
    APN to implement aircraft commonality programs, maintain relevant
    capability, improve reliability, and ensure structural safety of the
    inventory of 614 F/A-18 A-D Hornets. $148.2 million is for the Service
    Life Extension Program (SLEP).
        The F/A-18A-D was designed for, and has achieved, a service life of
    6,000 flight hours. These aircraft have performed as expected through
    their design life. Service life management of this aircraft is intended
    to extend this platform beyond its designed 6,000 flight hours. Through
    detailed analysis, inspections, and structural repairs, as required,
    the DON has been successful in achieving 8,000 flight hours for many
    aircraft and is pursuing a strategy to go as high as 10,000 flight
    hours on select aircraft. Continued investment in SLEP, the High Flight
    Hour (HFH) inspection program, Program Related Engineering, and Program
    Related Logistics is critical for our flight hour extension strategy.
        In order to maintain warfighting relevancy in a changing threat
    environment, we will continue to procure and install advanced systems
    such as the Joint Helmet-Mounted Cueing System (JHMCS), High Order
    Language Mission Computers, ALR-67v3, ALQ-214v5, Multifunctional
    Information Distribution System (MIDS), APG-73 radar enhancements,
    Advanced Targeting Forward looking Infrared (ATFLIR) upgrades, and
    LITENING for the Marine Corps on selected F/A-18A-D aircraft.
    F/A-18 E/F Super-Hornet
        The F/A-18E/F will be a mainstay of Navy's aviation carrier air
    wing strike fighter force through 2035. The Fiscal Year 2016
    President's Budget requests $507.1 million in APN to implement aircraft
    commonality programs, maintain relevant capabilities, improve
    reliability, and ensure structural safety of the Super-Hornet fleet;
    and $153 million RDT&E,N to support the Flight Plan spiral capability
    development, development of Advanced Electronic Attack and Counter-
    Electronic Attack, and F/A-18E/F Service Life Assessment Program
    (SLAP).
        The F/A-18E/F significantly improves the survivability and strike
    capability of the carrier air wing. The Super-Hornet provides increased
    combat radius and endurance, and a twenty-five percent increase in
    weapons payload over F/A-18A-D Hornets. The production program
    continues to deliver on-cost and on-schedule.
        The Super-Hornet uses an incremental approach to incorporate new
    technologies and capabilities, to include Digital Communication System
    Radio, MIDS--Joint Tactical Radio System, JHMCS, ATFLIR with shared
    real-time video, Accurate Navigation, Digital Memory Device,
    Distributed Targeting System, Infrared Search and Track and continued
    advancement of the APG-79 Active Electronically Scanned Array (AESA)
    Radar.
        $19.7 million of the 2016 RDT&E,N supports the F/A-18E/F SLAP
    requirement. The F/A-18 E/F fleet, on average, has flown approximately
    36 percent of the design life of 6,000 flight hours. The remaining
    design service-life will not be adequate to meet long-term operational
    commitments through 2035. In 2008 the Navy commenced a three phase F/A-
    18E/F SLAP to analyze actual usage versus structural test results and
    determine the feasibility of extending F/A-18E/F service life from
    6,000 to 9,000 flight hours via a follow-on SLEP. The F/A-18E/F SLAP
    will identify the necessary inspections and modifications required to
    achieve 9,000 flight hours and increase total arrested landings and
    catapults beyond currently defined life limits. This extension is
    assessed as low risk. The Service Life Management Plan philosophy has
    been applied to the F/A-18E/F fleet at an earlier point in its
    lifecycle than the F/A-18A-D. This will facilitate optimization of
    Fatigue Life Expended, flight hours, and total landings, thereby better
    aligning aircraft service life with fleet requirements.
    AV-8B Harrier
        Since the beginning of the war on terror, the AV-8B Harrier has
    been a critical part of the strike fighter inventory for the Joint
    force. This aircraft has flown more than 54,000 hours in combat since
    2003 with zero losses from the enemy in the air but six losses on the
    ground when the enemy broke through our forces at Bastion air base in
    2012. The Fiscal Year 2016 President's Budget requests $83.3 million in
    APN funds to continue the incorporation of Obsolescence Replacement /
    Readiness Management Plan systems, electrical and structural changes,
    inventory sustainment and upgrade efforts to offset obsolescence and
    attrition, LITENING Pod upgrades, and F402-RR-408 engine safety and
    operational changes.
        The Fiscal Year 2016 President's Budget requests $39.9 million in
    RDT&E,N funds to continue Design, Development, Integration and Test of
    various platform improvements, to include Engine Life Management
    Program, Escape Systems, Joint Mission Planning System updates, Link 16
    Digital Interoperability integration, Operational Flight Program (OFP)
    block upgrades to various mission and communication systems, navigation
    equipment, weapons carriage, countermeasures, and the Obsolescence
    Replacement / Readiness Management Plan.
        The AV-8B continues to deploy in support of operational
    contingencies. Each Marine Expeditionary Unit (MEU) deploys with
    embarked AV-8Bs. The AV-8B, equipped with LITENING targeting pods and a
    video downlink to ROVER ground stations, precision strike weapons,
    Intrepid Tiger II EW pods and beyond visual range air-to-air radar
    guided missiles, continues to be a proven, invaluable asset for the
    Marine Air Ground Task Force (MAGTF) and joint commander across the
    spectrum of operations. One squadron has flown more than 3,400 hours of
    strike sorties against ISIS with an average combat radius of 900 miles.
    Digital Improved Triple Ejector Racks have allowed us to load up to 6
    precision guided munitions per aircraft, with tanks, guns, and Litening
    Pods exponentially increasing the combat viability of this platform. In
    Fiscal Year 2016 the Airborne Variable Message Format terminals will be
    installed in AV-8B to replace the current digital-aided close air
    support (CAS) technology. The program will continue development of the
    H6.2 Operational Flight Program to integrate Federal Aviation
    Administration compliant Navigation Performance/Area Navigation (RNP/
    RNAV) capability, an update to the LITENING Common OFP to implement
    improvements to moving target tracking, and correct additional software
    deficiencies identified through combat operations. The program will
    also work on the H7.0 OFP which will integrate Link 16 functionality.
    As an out-of-production aircraft, the AV-8B program will continue its
    focus on sustainment efforts to mitigate significant inventory
    shortfalls, maintain airframe integrity, achieve full Fatigue Life
    Expended, and address reliability and obsolescence issues of avionics
    and subsystems.
        Operations ODYSSEY DAWN, ENDURING FREEDOM, and today's Operation
    FREEDOM SENTINEL confirm the expeditionary advantages of Short Take-Off
    and Vertical landing (STOVL) capabilities. Placing the Harrier as the
    closest multi-role fixed-wing asset to the battlefield greatly reduces
    transit times to the battlefield and enables persistent CAS without
    strategic tanking assets. Airframe sustainment initiatives, capability
    upgrades, and obsolescence mitigation is essential and must be funded
    to ensure the AV-8B remains lethal and relevant.
    FA-XX
        The Department is preparing to conduct an analysis of alternatives
    (AoA) to address the anticipated retirement of the F/A-18E/F and EA-18G
    aircraft beginning in the mid 2020 timeframe. The FA-XX AoA will
    consider the widest possible range of materiel concepts while balancing
    capability, cost, schedule, and supportability considerations. It will
    assess manned, unmanned, and optionally manned approaches to fulfill
    predicted 2030+ mission requirements. Analysis will consider baseline
    programs of record (current platforms), evolutionary or incremental
    upgrades to baseline programs (including derivative platforms), and new
    development systems or aircraft to meet identified gaps in required
    capability. The Fiscal Year 2016 budget requests $5.0 million in
    RDT&E,N to conduct this AoA.
    Strike Fighter Inventory Management
        The Department remains challenged with end of life planning for F/
    A-18A-D and AV-8B aircraft that reach the end of their service life
    before replacement aircraft (F-35B/C) can be fully delivered into
    service. In the fiscal year 2016 budget request the Department was
    forced to cut 16 F-35Cs from the budget (fiscal year 2016-2020),
    delaying the stand-up of the first Marine Corps F-35C squadron by one
    year and delaying subsequent F-35C squadron transitions by two years
    each. Strike Fighter Inventory Management risk increases with the
    fiscal year 2016 budget request, further increasing the gap between
    supply and the Department's Master Aviation Plan demand.
        The near term inventory challenge is due to a combination of
    reduced Strike Fighter procurement, higher than planned TACAIR
    utilization rates, and F/A-18A-D and AV-8B depot facility production
    falling short of the 2013 and 2014 required output. Aggressive efforts
    across the Department were instituted in 2014 to improve depot
    throughput and return more aircraft back to the Fleet. Aviation depots
    are expected to improve productivity through 2017, and fully recover
    the backlog of F/A-18A-D by 2019 and Harrier by 2016; at which time the
    focus will shift towards F/A-18E/F service life extension. The Marines
    ran an Independent Readiness Review of their AV-8B program to recover
    to a T-2.0 readiness level within their AV-8B fleet, meet their
    operational requirements and ensure they had an adequate bridge to the
    F-35. By following the plan, the AV-8B fleet should be in the green in
    17 months.
        The Navy and USMC strike-fighter force continues to meet their
    operational commitments. However, we anticipate the inventory pressure
    to remain relatively constant through fiscal year 2016 as we experience
    peak depot inductions of F/A-18A-D aircraft reaching 8,000 hours and
    entering extensive High Flight Hour (HFH) service life extension
    inspections, repairs and modifications.
    Airborne Electronic Attack (AEA) / EA-18G Growler
        The Fiscal Year 2016 President's Budget request includes $108.5
    million in APN to implement aircraft commonality programs, maintain
    relevant capabilities, improve reliability, and ensure structural
    safety of the Growler fleet; $56.9 million in RDT&E,N for Flight Plan
    spiral capability development, design and integration of Jamming
    Techniques Optimization improvements, evolutionary software development
    and related testing; and $398.8 million RDT&E,N for NGJ Increment 1 and
    $13.0 million RDT&E,N for NGJ Increment 2.
        In 2009, the Navy began the transition from EA-6Bs to EA-18Gs. The
    EA-18G is a critical enabler of the Joint force, bringing fully netted
    capabilities that provide electromagnetic spectrum dominance in an
    electromagnetic maneuver warfare environment. The first EA-18G squadron
    deployed to Iraq in an expeditionary role in November 2010 in support
    of Operation NEW DAWN, and subsequently redeployed to Italy on short
    notice in March 2011 in support of Operations ODYSSEY DAWN and UNIFIED
    PROTECTOR. The first carrier-based EA-18G squadron deployed in May
    2011. Three active component Navy expeditionary squadrons, nine of ten
    carrier based squadrons, and one reserve squadron have completed, or
    are in, transition to the EA-18G.
        The 10 carrier based EA-18G squadrons will fulfill Navy
    requirements for airborne electronic attack; six expeditionary EA-18G
    squadrons will provide the joint, high-intensity AEA capability
    required by the Joint Forces Commander, which was previously fulfilled
    by the Navy and Marine Corps EA-6B. The Navy will be divested of EA-6Bs
    by 2015; the Marine Corps by 2019 leaving the E/A-18G as the only
    viable AEA platform in the DoD inventory. The inventory objective is
    153 EA-18G aircraft. Since their initial deployment, Growlers have
    flown more than 2,300 combat missions, have expended approximately six
    percent of the 7,500 flight hour life per aircraft, and are meeting all
    operational commitments.
    Next Generation Jammer (NGJ)
        NGJ is a new electronic warfare capability that will replace the
    42-year old ALQ-99, currently the only Navy and Joint airborne Tactical
    Jamming System pod. The ALQ-99 has limited capability to counter
    tactically and technically advanced threats, is increasingly difficult
    and costly to maintain, and has a vanishing industrial supplier base.
    The Navy and Department of Defense (DoD) require NGJ to meet current
    and emerging EW threats. NGJ will have the necessary power and digital
    techniques to counter increasingly advanced and sophisticated adversary
    electronic warfare search, surveillance, and targeting-radars and
    communications systems. NGJ will be DoD's only comprehensive tactical
    AEA capability--supporting all Services and joint/coalition partners,
    and will be implemented in three increments: Mid-Band (Increment 1),
    Low-Band (Increment 2), and High-Band (Increment 3). NGJ is designed to
    provide improved capability in support of joint and coalition air,
    land, and sea tactical strike missions and is critical to the Navy's
    vision for the future of strike warfare. Fiscal year 2016 funding is
    vital to maintain schedule, allowing the program to complete Technology
    Maturation and Risk Reduction (TMRR) and transition into the
    Engineering and Management Development (EMD) phase. Initial concept
    studies and formal program stand-up will begin in fiscal year 2016 for
    Increment 2.
    Airborne Electronic Attack (AEA) / EA-6B Prowler
        The Fiscal Year 2016 President's Budget request includes $15.5
    million in RDT&E,N for Electronic Warfare (EW) Counter Response, $2.8
    million RDT&E,N for MAGTF EW, $23.2 million in APN for Airborne
    Electronic Attack (AEA) systems, $9.8 million in APN for all EA-6B
    series aircraft, and $7.7 million APN for MAGTF EW.
        Currently, there are 37 EA-6Bs in the Navy and Marine Corps, which
    are distributed to three Marine Corps and one Navy operational
    squadron, one Navy flight test squadron, and one Marine Corps training
    squadron. The total includes five Navy ICAP II aircraft and 32 ICAP III
    aircraft. All ICAP III EA-6Bs are operated by the Marine Corps. Final
    retirement of the EA-6B from the DON inventory will be in 2019.
        Marine aviation is on a path toward a distributed AEA `system of
    systems' that is a critical element in achieving the MAGTF EW vision: A
    composite of manned and unmanned surface, air, and space assets on a
    fully collaborative network providing the MAGTF commander control of
    the electromagnetic spectrum when and where desired. Included in this
    plan are the ALQ-231 Intrepid Tiger II communications jammer, UAS EW
    payloads, a Software Reprogrammable Payload and an EW Services
    Architecture to facilitate collaborative networked EW Battle
    Management.
        Intrepid Tiger II development and procurement is in response to
    Marine Corps requirements for increased precision EW capability and
    capacity across the MAGTF and provides EW capability directly to
    tactical commanders without reliance upon the limited availability of
    the low density/high demand EA-6B Prowler. Intrepid Tiger II is
    currently carried on AV-8B and F/A-18 A++/C/D aircraft, has
    successfully completed nine deployments, and is currently deployed with
    both the 11th and 24th MEUs. Integration on Marine Corps rotary-wing
    aircraft is scheduled to be completed by the fourth quarter of fiscal
    year 2015. Development of an Intrepid Tiger II counter-radar capability
    for the penetrating jammer mission will begin in fiscal year 2016.
    E-2D Advanced Hawkeye (AHE)
        The Fiscal Year 2016 President's Budget requests $272.1 million in
    RDT&E,N for continuation of added capabilities, to include In-Flight
    Air Refueling, Tactical Targeting Network Technology (TTNT), Secret
    Internet Protocol Router chat, Advanced Mid-Term Interoperability
    Improvement Program, Multifunctional Information Distribution System/
    Joint Tactical Radio System TTNT, Counter Electronic Attack, Sensor
    Netting, and Data Fusion. In the third year of a 26 aircraft Multi-Year
    Procurement (MYP) contract covering fiscal years 2014-2018, the budget
    requests $1,053 million in APN for five Full Rate Production (FRP) Lot
    4 aircraft , Advance Procurement (AP) for fiscal year 2017 FRP Lot 5
    aircraft; and Economic Ordering Quantity funding for the MYP for fiscal
    year 2018.
        The E-2D AHE is the Navy's carrier-based Airborne Early Warning and
    Battle Management Command and Control system. The E-2D AHE provides
    Theater Air and Missile Defense and is capable of synthesizing
    information from multiple onboard and off-board sensors, making complex
    tactical decisions and then disseminating actionable information to
    Joint Forces in a distributed, open-architecture environment. E-2D is
    also a cornerstone of the Naval Integrated Fire Control--Counter Air
    (NIFCA-CA) capability.
        Utilizing the newly developed AN/APY-9 Mechanical/Electronic Scan
    Array radar and the Cooperative Engagement Capability (CEC) system, the
    E-2D AHE works in concert with tactical aircraft and surface-combatants
    equipped with the Aegis combat system to detect, track and defeat air
    and cruise missile threats at extended ranges.
        The first Fleet E-2D squadron (VAW-125) was designated ``safe for
    flight'' in January 2014. IOC was achieved in October 2014.
                            assault support aircraft
    MV-22
        The Fiscal Year 2016 President's Budget requests $87.9 million in
    RDT&E,N for continued product improvements, including engineering
    development of a Navy variant of the MV-22; and $1.48 billion in APN
    for procurement and delivery of 19 MV-22s (Lot 20). Fiscal year 2016
    will be the fourth year of the 2nd V-22 MYP contract covering fiscal
    years 2013-2017. The funds requested in the fiscal year 2016
    President's Budget fully fund Lot 20 and procure long-lead items for
    fiscal year 2017 Lot 21 MV-22 aircraft. The APN request includes $126.1
    million to support Operations and Safety Improvement Programs (OSIPs),
    including Correction of Deficiencies and readiness improvements. The
    fiscal year 2016 request includes funding starting in fiscal year 2018
    to procure a Navy variant in support of the Carrier Onboard Delivery
    mission.
        MV-22 Osprey vertical flight capabilities, coupled with the speed,
    range, endurance of fixed-wing transports, are enabling effective
    execution of current missions that were previously unachievable. In
    2014, a second Marine Corps SPMAGTF-CR was stood up in CENTCOM and the
    twelfth and final MV-22 for HMX-1 ``Greenside'' logistics and passenger
    transport was delivered for support of the Presidential transport
    mission. As the V-22 fleet approaches the 300,000 flight hour milestone
    it has proven to be the safest Marine Corps rotorcraft.
        The second MYP, which began in fiscal year 2013, will procure at
    least 93 MV-22s over five years and results in savings of approximately
    $1 billion when compared to single year procurements. The stability of
    the MYP supports the Marine Corps' retirement of legacy aircraft,
    benefits the supplier base and facilitates cost reductions on the part
    of both the prime contractor and sub-tier suppliers.
        Due to extremely high demand for MV-22 capability from the
    Combatant Commanders, and a resultant high operational tempo in 2014,
    the mission capability rates leveled-off and did not continue the year
    over year improvements seen since 2010. This was primarily due to our
    inability to train enlisted maintainers in the numbers and
    qualifications standard we need to sustain such a high demand signal.
    Right now we have 13 Full Operational Capability squadrons, with two in
    build, and are executing to an overall 15 squadron demand signal. We
    are shifting resources and modifying standup, transition, and training
    plans, but the demand for the capabilities this aircraft brings to the
    COCOMs is creating growing pains. While we are confident these issues
    will be overcome, there has been an impact on our readiness rates.
    Despite a readiness rate decrement, the cost per flight hour has
    continued to decrease, with a total reduction of nearly 28 percent
    since 2010. Fiscal year 2016 OSIP provides a necessary and stable
    source of crucial modification funding as the Ospreys work to improve
    readiness and continue to reduce operating cost.
        Concurrent with our readiness and support initiatives, we are
    adding capabilities to the MV-22 that will make it even more valuable
    to the COCOMs. First, we are expanding the number of aerial refueling
    platforms that can refuel an MV-22, increasing the range of available
    options to capitalize on its long-range capabilities. We are also
    developing a mission kit to allow the MV-22 to deliver fuel to other
    airborne platforms. We see this as a critical enabler for both shore
    and sea-based operations. We plan to deliver this capability by the
    Summer of 2017 concurrent with the first Western Pacific deployment of
    the F-35B. We are also looking at options that will enable the delivery
    of precision-guided munitions from the MV-22, which will enhance its
    ability to operate autonomously and increase the lethality of our
    force. Finally, an important capability that is a priority for entire
    aviation force is Digital Interoperability (DI). We are testing and
    deploying the initial configuration of an onboard suite of electronics
    that will allow the embarked troop commander to possess unprecedented
    situational awareness via real time transmission of full motion video
    and other data generated by multiple air and ground platforms
    throughout the battlespace. This DI suite will also be able to collect,
    in real-time, threat data gathered by existing aircraft survivability
    equipment and off board data to accompanying attack platforms, thereby
    shortening the kill chain against ground and air based threats.
        In ongoing operations in the Middle East, the MV-22 has become the
    Tactical Recovery of Aircraft and Personnel (TRAP) platform of choice
    to rescue downed aircrew in hostile territory. Currently, Marines are
    on alert in Central Command to recover American and Coalition aircrew
    executing strike operations. The speed, range, and aerial refueling
    capability have allowed the Osprey's to remain in strategic locations
    throughout the area poised for rescue operations. With an unrefueled
    mission radius of 423 nautical miles, the Osprey can reach greater
    distances around the battlefield to increase the likelihood of
    recovering isolated personnel as the speed and altitude envelopes
    provide better survivability for the TRAP force and recovered aircrew.
    CH-53K Heavy Lift Replacement Program
        The Fiscal Year 2016 President's Budget requests $632.1 million
    RDT&E,N to continue the EMD phase of the CH-53K program. Since entering
    into developmental test in December 2013 the Ground Test Vehicle (GTV)
    has completed bare head light-off and shakedown light-off has
    commenced. Over the last year, the GTV has accumulated over 180 test
    hours. The first flight vehicle, Engineering Development Model (EDM) 1,
    has completed its bare head light-off and initial bladed ground runs.
    The program is currently on schedule to execute its first flight by the
    end of 2015. During Fiscal Year 2016, the program will continue to
    execute developmental test flights, deliver the final EDM, and continue
    assembly of System Demonstration Test Article aircraft, which will be
    production representative aircraft utilized for Operational Test.
        The CH-53K will provide land and sea based heavy-lift capabilities
    not resident in any of today's platforms and contribute directly to the
    increased agility, lethality, and presence of joint task forces and
    MAGTFs. The CH-53K will transport 27,000 pounds of external cargo out
    to a range of 110 nautical miles, nearly tripling the CH-53E's lift
    capability under similar environmental conditions, while fitting into
    the same shipboard footprint. The CH-53K will also provide unparalleled
    lift capability under high-altitude and hot weather conditions, greatly
    expanding the commander's operational reach.
        Compared to the CH-53E, maintenance and reliability enhancements of
    the CH-53K will improve aircraft availability and ensure cost effective
    operations. Additionally, survivability and force protection
    enhancements will dramatically increase protection for both aircrew and
    passengers. Expeditionary heavy-lift capabilities will continue to be
    critical to successful land and sea-based operations in future anti-
    access, area-denial environments, enabling sea-basing and the joint
    operating concepts of force application and focused logistics.
        Over the past 13 years, the CH-53 community accumulated over 95,000
    combat flight hours. During this period, we suffered ten aircraft
    losses, nine in combat and one in training. As our CH-53E community
    approaches 30-years of service, these sustained and unprecedented
    operational demands have prematurely aged our heavy lift assault
    support aircraft, making it ever more challenging to maintain and
    underscoring the importance of its replacement, the CH-53K King
    Stallion. To keep the H-53E viable until the King Stallion enters
    service, the Fiscal Year 2016 President's Budget requests $46.9 million
    in APN for both near and mid-term enhancements. For both the USN MH-53E
    and USMC CH-53E helicopters these modifications include Condition Based
    Maintenance software upgrades, Kapton wiring replacement installations,
    and improved Engine Nacelles. The Fiscal Year 2016 budget request
    includes non-recurring engineering for upgrades to the MH-53E's
    antiquated cockpit. These critical safety and avionics upgrades will
    address obsolescence issues within the cockpit and increase overall
    situational awareness and mission effectiveness by improving minefield
    navigation displays, adding Area Navigation (RNAV) capability, and
    providing moving map and hover displays. Additionally, non-recurring
    engineering and kit procurements for the Embedded Global Positioning
    System/Inertial Navigation System (EGI) will allow the MH-53E to
    utilize the full capability of the APX-123 transponder. The Marine
    Corps' CH-53E fleet is continuing with the T-64 Engine Reliability
    Improvement Program, Critical Survivability Upgrade (CSU), Satellite
    Communications (SATCOM) kit installations, and Smart Multi-Function
    Color Display (SMFCD) procurements and installations.
                          attack and utility aircraft
    UH-1Y // AH-1Z
        Marine Corps Cobra and Huey attack and utility aircraft have been
    critical for the success of the Marines in harm's way and over the past
    10 years, these aircraft have flown over 196,000 hours in combat. The
    Fiscal Year 2016 President's Budget requests $27.2 million in RDT&E,N
    for continued product improvements; and $856.2 million in APN for 28 H-
    1 upgrade aircraft: 12 UH-1Y and 16 AH-1Z. The program is a key
    modernization effort designed to resolve existing safety deficiencies
    and enhance operational effectiveness of the H-1 fleet. The 85 percent
    commonality between the UH-1Y and AH-1Z will significantly reduce life-
    cycle costs and the logistical footprint, while increasing the
    maintainability and deployability of both aircraft. The program will
    provide the Marine Corps with 349 H-1 aircraft through a combination of
    new production and a limited quantity of remanufactured aircraft.
        The H-1 Upgrades Program is replacing the Marine Corps' UH-1N and
    AH-1W helicopters with state-of-the-art UH-1Y ``Yankee'' and AH-1Z
    ``Zulu'' aircraft. The new aircraft are fielded with integrated glass
    cockpits, world-class sensors, and advanced helmet-mounted sight and
    display systems. The future growth plan includes a digitally-aided,
    close air support system designed to integrate these airframes,
    sensors, and weapons systems together with ground combat forces and
    other capable DoD aircraft. Integration of low-cost weapons such as the
    Advanced Precision Kill Weapon System II provides increased lethality
    while reducing collateral damage.
        The UH-1Y aircraft achieved IOC in August 2008 and FRP in September
    2008. The ``Yankee Forward'' procurement strategy prioritized UH-1Y
    production in order to replace the under-powered UH-1N fleet as quickly
    as possible. The last UH-1N was retired from service as of December
    2014. The AH-1Z program received approval for FRP in November 2010 and
    achieved IOC in February 2011. As of February 2015, 148 aircraft (109
    UH-1Ys and 39 AH-1Zs) have been delivered to the Fleet Marine Force. An
    additional 60 aircraft are on contract and in production. Lot 1-7
    aircraft deliveries are complete for both the UH-1Y and AH-1Z. Lot 8
    and 9 deliveries are complete for the UH-1Y, and Lot 10 UH-1Y
    deliveries are in progress and ahead of schedule.
        The H-1 program is in the process of integrating both the UH-1Y and
    AH-1Z into the larger digitally interoperable programs of the Marine
    Corps. With the integration of Intrepid Tiger II, the HMLA community
    will now be able to provide the MAGTF Commanders with all six essential
    functions of Marine Air. Additionally, these aircraft will incorporate
    Software Reprogrammable Payload (SRP) to utilize diverse networks and
    waveforms thus allowing maneuverability within the spectrum. SRP will
    employ systems as Link-16, Tactical Targeting Network Technology,
    Adaptive Networking Wideband Waveform, and the Soldier Radio Waveform.
    MH-60 (Overview)
        MH-60 Seahawks have consistently met readiness and operational
    commitments. There will be 38 Navy Seahawk squadrons with 275 MH-60S
    and 280 MH-60R aircraft when transitions from the SH-60B, SH-60F, and
    HH-60H are complete. Production and squadron transitions will continue
    through 2017. Over the last twelve years of combat operations, deployed
    ashore and aboard our aircraft carriers, amphibious ships, and surface
    combatants at sea, Navy H-60 helicopters have provided vital over-watch
    and direct support to troops in combat across multiple theaters of
    operation and variety of missions; including support to special
    operations forces, air ambulance, surface warfare, anti-submarine
    warfare, mine warfare, logistics support and humanitarian assistance/
    disaster relief.
    MH-60R Seahawk
        The Fiscal Year 2016 President's Budget requests $970 million in
    APN for 29 helicopters. The production program continues to deliver on-
    cost and on-schedule.
        The MH-60R Multi-Mission Helicopter provides strike group
    protection and adds significant capability in its primary mission areas
    of Undersea Warfare and Surface Warfare; the latter including Fast
    Attack Craft/Fast In-shore Attack Craft (FAC/FIAC) threat response
    capabilities. The MH-60R is the sole organic air Anti-Submarine Warfare
    (ASW) asset in the Carrier Strike group (CSG) and serves as a key
    contributor to theater level ASW. The MH-60R also employs advanced
    sensors and communications to provide real-time battlespace management
    with a significant, active or passive, over-the-horizon targeting
    capability. Secondary mission areas include Search and Rescue, Vertical
    Replenishment, Naval Surface Fire Support, Logistics Support, Personnel
    Transport and Medical Evacuation.
        The $21.4 million RDT&E,N request supports the MH-60R Test Program,
    consisting of numerous system upgrades and Pre-Planned Product
    Improvements, to include the Digital Rocket Launcher (DRL) with APKWS
    II, Helicopter Infra-Red Suppression System, Multifunctional
    Information Distribution System-Low Volume Terminal (LVT) Block Upgrade
    2, and the VHF Omnidirectional Ranging/Instrument Landing System.
    MH-60S Seahawk
        The Fiscal Year 2016 President's Budget requests $28 million in APN
    for annualized support of the final deliveries of aircraft, trainers,
    ground support equipment, and publications required to complete the
    production program of 275 helicopters. The production program continues
    to deliver on-cost and on-schedule. The MH-60S Multi-Mission Helicopter
    provides strike group protection and adds significant capability in its
    primary mission areas of Mine Warfare and Surface Warfare. Secondary
    mission areas include Combat Search and Rescue, Support to Special
    Operations Forces, Vertical Replenishment, Logistics Support, Personnel
    Transport and Medical Evacuation.
        The $5.2 million RDT&E,N request supports the MH-60S Test Program,
    consisting of system upgrades for Airborne Mine Countermeasures (AMCM),
    Armed Helicopter FAC/FIAC Defense, and the commencement of a service
    life assessment program.
        Armed Helo Block 3A Operational Test (OT) was completed in June
    2007 and Block 3B (added Link 16 capability) OT was completed in
    November 2009. Test and Evaluation (T&E) of fixed forward firing weapon
    (FFW) (20mm gun system) was completed in Fiscal Year 2012. T&E of
    initial FFW Unguided Rocket (UGR) capability was completed in Fiscal
    Year 2013. T&E for Digital Rocket Launcher APKWS II and expanded UGR
    capability for the FAC/FIAC threat is in work and planned to complete
    in Fiscal Year 2016. Planned Airborne MCM Initial Operational Test and
    Evaluation (IOT&E) and Follow-On Operational Test and Evaluation
    (FOT&E) periods were changed to Operational Assessments, with the final
    IOT&E aligned with LCS Mine Counter Measures Mission Package IOT&E.
                           executive support aircraft
    VH-3D/VH-60N Executive Helicopter Series
        The VH-3D and VH-60N are safely performing the Executive Lift
    mission worldwide. As these aircraft continue to provide seamless
    vertical lift for the President of the United States, the DON is
    working closely with HMX-1 and industry to sustain these aircraft until
    a Presidential Helicopter Replacement platform is fielded. The Fiscal
    Year 2016 President's Budget requests an investment of $76.1 million of
    APN to continue programs that will ensure the in-service Presidential
    fleet remains a safe and reliable platform.
        Ongoing VH-60N efforts include the Cockpit Upgrade Program, engine
    upgrade program, and a Communications Suite Upgrade (Wide Band Line of
    Sight) that provides survivable access to the strategic communications
    network. The continuing Structural Enhancement Program and the
    Obsolescence Management Program applies to both VH-60N and VH-3D. The
    program has significantly reduced the cost and schedule of the VH-3D
    Cockpit Upgrade Program by focusing on critical obsolescence issues.
    These technology updates for legacy platforms will be directly
    leveraged for the benefit of the ensuing replacement program (VH-92A).
    VH-92A Presidential Helicopter Replacement Aircraft
        The Fiscal Year 2016 President's Budget request includes $507.1
    million of RDT&E,N to fund the VH-92 EMD contract and associated
    government activities. Significant progress has been made in the past
    year with completion of the Milestone B Review in March, receipt of the
    Acquisition Decision Memorandum in April, award of the EMD contract to
    Sikorsky Aircraft Corporation in May, completion of the System
    Requirements Review in August and completion of the Integrated Baseline
    Review in November. The Sikorsky S-92A aircraft will be used to execute
    the acquisition strategy of integrating mature subsystems into an air
    vehicle that is currently in production. Initial contractor testing on
    an S-92A aircraft is planned for 2015 and early 2016, and the critical
    Design Review is planned for the 4th quarter of Fiscal Year 2016. The
    first of the planned operational inventory of 21 aircraft could begin
    fielding as early as 2020.
                              fixed-wing aircraft
    KC-130J
        The DON plans to procure two KC-130Js and continue product
    improvements. Targeted improvements include aircraft survivability
    through advanced electronic countermeasure modernization and
    obsolescence upgrades to the Harvest HAWK ISR/Weapon Mission Kit.
        Fielded throughout our active force, the KC-130J brings increased
    capability, performance and survivability with lower operating and
    sustainment costs to the MAGTF. Forward deployed in support of ongoing
    operations since 2005, the KC-130J continues to deliver Marines, fuel
    and cargo whenever and wherever needed. In 2015 the KC-130J remains in
    high demand, providing tactical air-to-air refueling, assault support,
    Close Air Support (CAS) and Multi-sensor Imagery Reconnaissance (MIR)
    capabilities, in support of Special Purpose MAGTFs and deployed MEUs.
        First deployed in 2010, the roll-on/roll-off Harvest HAWK mission
    kit for the KC-130J continues to provide extended MIR and CAS
    capabilities. With almost 7,000 hours flown, over 200 Hellfire missile
    and 90 Griffin munition combat engagements, this expeditionary mission
    kit has proven its worth and made the KC-130J even more indispensable
    for Marines on the ground. All six mission kits have been fielded, and
    funding included in the fiscal year 2016 budget request will be used to
    maintain operational relevance of this mission system through
    compatibility with additional Hellfire variants and an improved full
    motion video data-link.
        The Marine Corps has funded 53 of the 79 KC-130J aircraft in the
    program of record. The three aircraft included in the Fiscal Year 2013
    budget would complete the Active Component (AC) requirement of 51
    aircraft. However, the Marine Corps began using the AC backup aircraft
    to accelerate the Reserve Component (RC) transition from the legacy KC-
    130T aircraft to the more capable and efficient KC-130J in fiscal year
    2014. The aircraft requested in the fiscal year 2016 President's Budget
    will continue to increase KC-130J inventory as we strive to achieve
    Full Operational Capability in the RC. Delays in procurement would
    force the Marine Corps to sustain the KC-130T aircraft longer than
    planned at an increased cost.
        It is also important to note that the US Air Force C-130J
    procurement is expected to end in 2022. If the Marine Corps procures
    KC-130Js at a rate of two per year from fiscal year 2016-2022, we will
    have approximately 12 aircraft remaining to procure in order to reach
    the Program of Record (POR) of 79 aircraft. This POR is expected to
    complete in 2029. After the USAF completes its C-130J procurement,
    NAVAIR will no longer be able to leverage USAF contracting services.
    Given the loss of USAF contracting services and the uncertainty of
    additional Foreign Military Sales, the Navy and Coast Guard customers
    potentially could have a significant unit cost increase.
                           maritime support aircraft
    P-8A Poseidon
        The P-8A Poseidon recapitalizes the Maritime Patrol ASW, Anti-
    Surface Warfare (ASuW) and armed ISR capability currently resident in
    the P-3C Orion. The P-8A combines the proven reliability of the
    commercial 737 airframe with avionics that enables integration of
    modern sensors and robust communications. The P-8A's first operational
    deployment was completed in June 2014, and continuous 7th Fleet
    operational deployments are underway. As of February 2015, four Fleet
    squadrons have completed transition to P-8A. All Fleet squadrons are
    scheduled to complete transition by the end of fiscal year 2019. The P-
    8A program is meeting all cost, schedule and performance parameters in
    accordance with the approved Acquisition Program Baseline.
        Boeing has delivered 21 aircraft (Low Rate Initial Production
    (LRIP) I/II/III) to the Fleet as of February 2015, and three remaining
    LRIP III aircraft are scheduled to deliver by May 2015. LRIP IV (13
    aircraft), and FRP 1 (16 aircraft) are under contract and will start
    delivering in May 2015. FRP 2 (nine aircraft) is planned to award in
    June 2015. The fiscal year 2016 President's Budget procures 47 P-8As
    over the FYDP and sustains the P-3C to P-8A transition. In fiscal year
    2016 the warfighting requirement remains 117 aircraft; however, the
    fiscally constrained inventory objective for 109 aircraft will provide
    adequate capacity at acceptable levels of risk.
        As fleet deliveries of the Increment 1 configuration accelerate,
    integration and testing of P-8A Increment 2 capability upgrades
    continues. P-8A Increment 2 Engineering Change Proposal (ECP) 1 ``Early
    Multi-Static Active Coherent (MAC)'' FOT&E commenced November 15, 2014.
    The Navy is on track to field the ECP 1 ``Early MAC'' capability in
    fiscal year 2015 followed by Increment 2 ECP 2 ``Full MAC''
    capabilities in fiscal year 2016. The Increment 2 ECP 3 contract for
    High Altitude ASW Weapons Capability capabilities was awarded in
    December 2014.
    P-3C Orion
        The aging P-3 fleet will continue to provide critical ASW, ASuW and
    ISR support for joint and naval operations worldwide until the Fleet
    completes transition to P-8A. The fiscal year 2016 budget request
    provides $3.1 million in funding required to manage P-3C aircraft
    mission systems obsolescence during the transition. As of December
    2014, 61 P-3 Special Structural Inspection-Kits have been installed
    (zero remaining); 87 Zone 5 modifications completed (last three
    aircraft in work); and 20 Outer Wing Installations completed (last nine
    aircraft in work).
        The P-3 aircraft is well beyond the original planned fatigue life
    of 7,500 hours for critical components, with an average airframe usage
    of over 18,400 hours. The fiscal year 2016 request continues to fund
    the P-3 Fatigue Life Management Program so the Navy can maintain
    sufficient capacity to successfully complete the transition to P-8A.
    EP-3 Aries Replacement/Sustainment
        The EP-3E Aries is the Navy's premier manned Maritime Intelligence,
    Surveillance, Reconnaissance, and Targeting (MISR&T) platform. The
    Joint Airborne Signals intelligence (SIGINT) Common Configuration
    includes Multi-Intelligence sensors, robust communication, and data
    links employed by the flexible and dependable P-3 air vehicle to ensure
    effective MISR&T support across the full Range of Military Operations.
    The fiscal year 2011 National Defense Authorization Act directed Navy
    to sustain EP-3E airframe and mission systems relevance to minimize
    SIGINT capability gaps until the systems are fully recapitalized with a
    platform or family of platforms that in the aggregate provide equal or
    better capability and capacity. The Fiscal Year 2016 request maintains
    the retirement dates from the previous year that were extended by one
    year to Fiscal Year 2019 and Fiscal Year 2020, respectively.
        Navy ISR family of systems approach shifts focus from platforms to
    payloads. The future force will rapidly respond to changing threats
    with modular, scalable, netted sensors and payloads on a range of sea
    and shore-based manned and unmanned systems, establishing persistent
    Maritime ISR when and where it is needed.
        Navy's ISR&T transition plan will deliver increased capacity and
    persistence by the end of the decade. However, due to fiscal and end
    strength constraints, the Department will accept some risk in near term
    capability and capacity. The Fiscal Year 2016 budget request reduces
    risk compared to the previous fiscal year and the Navy continues to
    work with Joint Staff, DoD, and the Fleet to optimize the ISR
    transition plan. The transition plan remains largely unchanged from
    Fiscal Year 2015.
                         airlift/cargo utility aircraft
    COD Recapitalization (Navy V-22 Variant)
        The C-2A fleet, which provides long-range logistical support to
    carrier strike groups, will reach the end of its service life in the
    mid-2020s with continued sustainment investment. The Navy is planning
    to recapitalize the COD capability with an extended range variant of
    the V-22. Fiscal Year 2016 investments support an affordable COD
    recapitalization plan that procures a version of the V-22 Osprey under
    the existing Program of Record (POR).
        The Navy's variant of V-22 has been a component of the POR since
    program inception. This transition strategy allows the Navy to
    recapitalize the aging C-2 COD capability in an affordable manner and
    evolve the Aerial Logistics Concept of Operations from the CVN centric
    ``Hub and Spoke'' model to a flexible Sea Base support concept.
                        unmanned aircraft systems (uas)
    MQ-4C Triton UAS
        The Fiscal Year 2016 President's Budget enables MQ-4C Triton entry
    into production with three LRIP aircraft in Fiscal Year 2016.
        The Fiscal Year 2016 President's Budget requests $227.2 million in
    RDT&E,N to continue Triton development activities, $150.9 million in
    RDT&E for Triton modernization, and $548.8 million of APN for
    procurement of the first lot of LRIP aircraft and for procurement of
    long lead materials for the second lot of LRIP aircraft.
        Triton will start establishing five globally-distributed,
    persistent maritime ISR orbits beginning in Fiscal Year 2018, as part
    of the Navy's Maritime ISR&T transition plan. MQ-4C Triton test
    vehicles have completed 21 total flights as of February 2015 and are on
    schedule to begin sensor integration testing this spring. This rigorous
    integrated flight test program will support Milestone C planned for
    Fiscal Year 2016. The MQ-4C Triton is a key component of the Navy
    Maritime Patrol Reconnaissance Force. Its persistent sensor dwell,
    combined with networked sensors, will enable it to effectively meet ISR
    requirements in support of the Navy Maritime Strategy.
        The Navy currently maintains an inventory of four USAF Global Hawk
    Block 10 UAS, as part of the BAMS Demonstrators, or BAMS-D program.
    These aircraft have been deployed to CENTCOM's AOR for over six years.
    BAMS-D recently achieved over 14,000 flight hours in support of CENTCOM
    ISR tasking. These assets are adequate to cover all Navy needs through
    Fiscal Year 2018.
    Unmanned Combat Air System Demonstration (UCAS-D)
        The Fiscal Year 2016 President's Budget requests no funding for the
    UCAS-D program. The UCAS-D program is in its final year of funding
    ($35.9M in RDT&E,N for Fiscal Year 2015). With the completion of the
    Autonomous Aerial Refueling test flights this spring, the demonstration
    will come to a successful close. The X-47B has met demonstration
    objectives and reduced technical risk by transferring lessons learned
    to the UCLASS program. The X-47B demonstrators have paved the way for
    the proficient introduction of a sea-based unmanned aircraft system by
    digitizing the carrier controlled environment, achieving precision
    landing navigation performance, demonstrating a deck handling solution,
    and refining the concept of operations.
    Unmanned Carrier Launched Airborne Surveillance and Strike (UCLASS)
            System
        The UCLASS system will provide the Carrier Strike Group (CSG) with
    a persistent unmanned ISR&T and precision strike capability that is
    available organically to the CSG and comprehensively to the Joint
    force. The CSG is often the first responder for the nation. The UCLASS
    system will enhance the CSG's capability and versatility and enable
    sustained 24/7 operations from a single aircraft carrier. The Fiscal
    Year 2016 President's Budget requests $134.7 million in RDT&E,N for
    UCLASS system development efforts. This funding will continue progress
    on the Control System & Connectivity, Carrier Segments and the
    government Lead System Integrator efforts, while the Department
    conducts a Strategic Portfolio Review of ISR&T systems and the future
    composition of the carrier air wing.
        The UCLASS system will be integrated with carrier air wing
    operations, increasing the effectiveness of current CSG ISR&T
    capabilities (airborne, surface, and sub-surface) beginning in the
    Fiscal Year 2022 timeframe. Once deployed, the UCLASS System will
    inherently provide reach-back to Navy and National architectures for
    command and control and for tasking, processing, exploitation, and
    dissemination. The UCLASS system will achieve these capabilities
    through the development and integration of a carrier-suitable, semi-
    autonomous, unmanned Air System; a Control System and Connectivity
    Segment; and Nimitz/Ford-class Carriers. The development and
    integration effort is overseen by the Government as the Lead Systems
    Integrator, providing system-of-systems integration for the UCLASS
    Program.
    MQ-8 Vertical Takeoff and Landing Unmanned Aerial Vehicle (VTUAV) Fire
            Scout
        The MQ-8 Fire Scout is an autonomous system designed to operate
    from any suitably-equipped air-capable ship, carry modular mission
    payloads, and operate using the Tactical Control System and Line-Of-
    Sight Tactical Common Data Link. The Fiscal Year 2016 President's
    Budget requests $52.8 million of RDT&E,N to continue development of the
    MQ-8C endurance upgrade, to include integration of ISR payloads, radar
    and short range air to surface weapons. Funding will also be used to
    continue payload and Frigate integration with the MQ-8B and MQ-8C. The
    request for $142.5 million in APN procures MQ-8C air vehicles; MQ-8
    System mission control systems; ancillary, trainers and support
    equipment; technical support; modifications based on engineering
    changes; and logistics products and support to outfit suitably-equipped
    air-capable ships and train the associated Aviation Detachments.
    Commonality of avionics, software, and payloads between the MQ-8B and
    MQ-8C has been maximized. The MQ-8B and MQ-8C air vehicles will utilize
    the same ship-based mission control system and other ship ancillary
    equipment.
        Fire Scout was deployed to Afghanistan from May 2011 until August
    2013, and amassed more than 5,100 dedicated ISR flight hours in support
    of U.S. and coalition forces. Since 2012, the MQ-8B Fire Scout has
    flown more than 7,500 hours from Navy Frigates, performing hundreds of
    autonomous ship board take-offs and landings in support of Special
    Operations Forces and Navy operations. The MQ-8C Fire Scout continues
    developmental test and has completed phase II dynamic interface testing
    aboard the Navy destroyer USS JASON DUNHAM. The MQ-8C has flown more
    than 400 flight hours since October of 2013. The Fire Scout program
    will continue to support integration and testing for LCS-based mission
    modules.
    Tactical Control System (TCS)
        The Fiscal Year 2016 President's Budget requested $8.6 million in
    RDT&E,N for the MQ-8 System's Tactical Control System (TCS). TCS
    provides a standards-compliant open architecture with scalable command
    and control capabilities for the MQ-8 Fire Scout system. In Fiscal Year
    2016 TCS will continue to transition the Linux operating system to a
    technology refreshed mission control system, and enhance the MQ-8
    System's Automatic Identification System and sensor track generation
    integration with ship systems. The Linux operating system conversion
    overcomes hardware obsolescence issues with the Solaris based control
    stations and provides lower cost software updates using DoD common
    application software. In addition, the TCS Linux upgrade will enhance
    collaboration with the Navy's future UAS Common Control System.
    Small Tactical Unmanned Aircraft System (STUAS) RQ-21A Blackjack
        The Fiscal Year 2016 President's Budget requests $11.1 million in
    RDT&E ($4.7 million USN, $6.4 million USMC); $55.0 million in APN for
    three Navy systems to support Naval Special Warfare; and $84.9 million
    in PMC for four RQ-21A systems (which includes 20 air vehicles) to
    address Marine Corps ISR capability requirements currently supported by
    service contracts. This Group 3 UAS will provide persistent ship and
    land-based ISR support for expeditionary tactical-level maneuver
    decisions and unit level force defense and force protection missions.
    Blackjack entered LRIP in 2013, completed IOT&E in the second quarter
    of Fiscal Year 2015, with Full Rate Production planned for the first
    quarter of Fiscal Year 2016.
        The RQ-21's current configuration includes full motion video,
    communications relay package and automatic identification systems. The
    air vehicle's payload bay allows for rapid deployment of signal
    intelligence payloads. The Marine Corps is actively pursuing
    technological developments for the RQ-21 system in an effort to provide
    the MAGTF and Marine Corps Forces Special Operations Command with
    significantly improved capabilities. Initiatives include over-the-
    horizon communication and data relay ability to integrate the system
    into future networked digital environments; electronic warfare and
    cyber payloads to increase non-kinetic capabilities; and change
    detection radar and moving target indicators to assist warfighters in
    battlespace awareness and force application.
    RQ-7B Shadow Marine Corps Tactical UAS (MCTUAS)
        The Fiscal Year 2016 President's Budget requests $0.7 million in
    RDT&E,N for the RQ-7B Shadow to continue joint development efforts and
    government engineering support and $3.8 million in APN to acquire PRC-
    152A radios and weatherization kits.
                            strike weapons programs
    Tactical Tomahawk (TACTOM) BLK IV Cruise Missile Program
        The Fiscal Year 2016 President's Budget requests $184.8 million in
    WPN for procurement of an additional 100 TACTOM weapons and associated
    support, $28.0 million in OPN for the Tomahawk support equipment, and
    $17.7 million in RDT&E,N for capability updates of the weapon system.
    WPN resources will be for the continued procurement of this versatile,
    combat-proven, deep-strike weapon system in order to meet ship load-
    outs and combat requirements. OPN resources will address the resolution
    of Tactical Tomahawk Weapons Control Station obsolescence,
    interoperability, and information assurance mandates. RDT&E,N will be
    used to continue engineering efforts for A2/AD navigation and
    communication upgrades.
        Tomahawk provides an attack capability against fixed and mobile/
    moving targets, and can be launched from both Surface Ships and
    Submarines. The current variant, TACTOM, preserves Tomahawk's long-
    range precision-strike capability while significantly increasing
    responsiveness and flexibility. TACTOM's improvements include in-flight
    retargeting, the ability to loiter over the battlefield, in-flight
    missile health and status monitoring, and battle damage indication
    imagery, providing a digital look-down ``snapshot'' of the battlefield
    via a satellite data link. Other Tomahawk improvements include rapid
    mission planning and execution via Global Positioning System (GPS)
    onboard the launch platform and improved anti-jam GPS.
    Tomahawk Theater Mission Planning Center (TMPC)
        The Fiscal Year 2016 President's Budget for TMPC requests $7.5
    million in RDT&E,N and $43.2 million OPN for continued system upgrades
    and sustainment. TMPC is the mission planning and strike execution
    segment of the Tomahawk Weapon System. TMPC develops and distributes
    strike missions for the Tomahawk Missile; provides for precision
    targeting, weaponeering, mission and strike planning, execution,
    coordination, control and reporting. TMPC provides Combatant Commanders
    and Maritime Component Commanders the capability to plan and/or modify
    conventional Tomahawk Land-Attack Missile missions. TMPC optimizes all
    aspects of the Tomahawk missile technology to successfully engage a
    target. TMPC is a Mission Assurance Category 1 system, vital to
    operational readiness and mission effectiveness of deployed and
    contingency forces. Planned upgrades support integration, modernization
    and interoperability efforts necessary to keep pace with missile
    upgrades. These required upgrades keep pace with new imagery formats,
    threat changes, improved GPS denied navigation capability, mission
    planning timeline improvements, upgraded communications architecture.
    Additionally, Cyber security mandates will be implemented to reduce
    TMPC vulnerability to cyber-attacks. These upgrades are critical for
    the support of over 180 TMPC operational sites worldwide, afloat and
    ashore, to include: Cruise Missile Support Activities (inclusive of US
    STRATCOM), Tomahawk Strike and Mission Planning Cells (5th, 6th, 7th
    Fleet), Carrier Strike Groups, Surface and Subsurface Firing Units and
    Labs/Training Classrooms.
    Offensive Anti-Surface Warfare (OASuW)/Increment 1 Weapon
        The Fiscal Year 2016 President's Budget requests $285.8 million in
    RDT&E,N for the completion of technology maturation and initiation of
    integration and test of the air-launched OASuW/Increment 1 program.
    Increment 1 leverages the Defense Advanced Research Projects Agency
    Long Range Anti-Ship Missile (LRASM) weapon demonstration effort.
    Increment 1 provides Combatant Commanders the ability to conduct ASuW
    operations against high value surface combatants protected by
    Integrated Air Defense System with long-range Surface-to-Air-Missiles
    and denies the adversary the sanctuary of maneuver. The OASuW/Increment
    1 program is a DON led joint program, scheduled to field on the B-1 by
    the end of Fiscal Year 2018 and the F/A-18E/F by the end of Fiscal Year
    2019.
    Next Generation Strike Capability (NGSC)
        The Fiscal Year 2016 budget requests $9.6 million for initiation of
    efforts to develop a Next Generation Strike Capability (NGSC). As part
    of a long-term strike weapons strategy, NGSC will study long-range,
    survivable, multi-mission, multi-platform conventional strike
    capability options planned to IOC in the mid-2020 timeframe. NGSC will
    become the follow-on acquisition program to the current OASuW/Increment
    I (LRASM) and Tomahawk Weapon System modernization programs. The NGSC
    program will commence an Analysis of Alternatives (AoA) during Fiscal
    Year 2016. The AoA will assess existing weapons systems, emergent
    technologies, and industry internal research and development
    activities; develop potential program of record costs, schedules, and
    risk assessments; and conduct additional threat assessments based on
    projected scenarios and operational environments. This analytical data
    will inform performance and relevant technology requirements to be
    matured as part of potential NGSC materiel solution(s) and associated
    kill-chain(s).
    Sidewinder Air-Intercept Missile (AIM-9X)
        The Fiscal Year 2016 President's Budget requests $76.0 million in
    RDT&E,N and $96.4 million in WPN for this joint DON and USAF program.
    RDT&E,N will be applied toward the Engineering Manufacturing
    Development phase of critical hardware obsolescence redesign,
    Development Test of missile v9.4 software, and the design and
    development of Joint Chiefs of Staff directed Insensitive Munitions
    improvements. WPN funding is requested for production of a combined 227
    All-Up-Rounds and Captive Air Training Missiles and missile-related
    hardware. The AIM-9X Block II Sidewinder missile is the newest in the
    Sidewinder family and is the only short-range infrared air-to-air
    missile integrated on Navy, Marine Corps, and USAF strike-fighter
    aircraft and Marine Corps attack helicopters. This fifth-generation
    weapon incorporates high off-boresight acquisition capability and
    increased seeker sensitivity through an imaging infrared focal plane
    array seeker with advanced guidance processing for improved target
    acquisition; data link capability; and advanced thrust vectoring
    capability to achieve superior maneuverability and increase the
    probability of intercept of adversary aircraft.
    Advanced Medium-Range Air-to-Air Missile (AMRAAM/AIM-120D)
        The Fiscal Year 2016 President's Budget requests $32.2 million in
    RDT&E,N for continued software capability enhancements and $192.9
    million in WPN production of a combined 167 All-Up-Rounds and Captive
    Air Training Missiles and missile-related hardware. AMRAAM is a joint
    USAF and DON weapon that counters existing aircraft and cruise-missile
    threats. It uses advanced counter-electronic attack capabilities at
    both high and low altitudes, and can engage from beyond visual range as
    well as within visual range. AMRAAM provides an air-to-air first look,
    first shot, first kill capability, while working within a networked
    environment in support of the Navy's Theater Air and Missile Defense
    Mission Area. RDT&E,N will be applied toward Software upgrades to
    counter emerging Electronic Attack threats for AIM-120C/D missiles.
    Small Diameter Bomb II (SDB II)
        The Fiscal Year 2016 President's Budget requests $97.0 million in
    RDT&E for continued development of the Department of the Air Force led
    joint service SDB II weapon and bomb-rack program. SDB II provides an
    adverse weather, day or night standoff capability against mobile,
    moving, and fixed targets, and enables target prosecution while
    minimizing collateral damage. SDB II will be integrated into the
    internal carriage of both DON variants of the Joint Strike Fighter (F-
    35B and F-35C) as well as the Navy's F/A-18E/F. The Joint Miniature
    Munitions Bomb Rack Unit (JMM BRU) BRU-61A/A is being developed to meet
    the operational and environmental integration requirements for internal
    bay carriage of the SDB II in the F-35B and F-35C, and external
    carriage on F/A-18 E/F. JMM BRU entered Technology Development in June
    2013.
    Joint Standoff Weapon (JSOW)
        The Fiscal Year 2016 President's Budget requests $0.4 million in
    RDT&E,N to address software integration and interoperability following
    the completion of efforts associated with Operational Testing in Fiscal
    Year 2015, and $21.4 million in WPN to begin Captive Air Training
    Missile (CATM) software integration, continuation of Telemetry
    Instrumentation Kit (TIK) Non Recurring Engineering and re-life
    efforts, and shutdown of the JSOW production line. The Department's
    decision to terminate JSOW C-1 production was due to fiscal
    constraints, an analysis of targets determining there was sufficient
    inventory to handle current operational needs, and the ongoing focus to
    fund future capabilities. The DON has submitted a final 2014
    termination Selected Acquisition Report and Congressional notification.
    The Navy is preparing a transition plan to address the production
    termination decision and document the planned use of RDT&E,N, WPN, and
    O&M,N resources to complete JSOW C-1 Operational Test activities,
    missile and TIK production, CATM conversions, and long-term weapon
    system operation & support.
    Advanced Anti-Radiation Guided Missile (AARGM) & AARGM Extended Range
        The Fiscal Year 2016 President's Budget requests $12.9 million of
    RDT&E,N for Block 1 follow-on development and test program, $38.4
    million of RDT&E,N for AARGM Extended Range (ER) development, and
    $122.3 million of WPN for production of 138 All-Up-Rounds and Captive
    Training Missiles. The AARGM cooperative program with the Italian Air
    Force transforms the High-Speed Anti-Radiation Missile (HARM) into an
    affordable, lethal, and flexible time-sensitive strike weapon system
    for conducting Destruction of Enemy Air Defense missions. AARGM adds
    multi-spectral targeting capability and targeting geospecificity to its
    supersonic fly-out to destroy sophisticated enemy air defenses and
    expand upon the HARM target set. The program achieved IOC on the F/A-
    18C/D aircraft in July 2012, with forward deployment to U.S. Pacific
    Command, and integration is complete for AARGM with release of H-8
    System Configuration Set for F/A-18E/F and EA-18G aircraft. The
    development of an AARGM-ER modification program, involving hardware and
    software improvements, will begin in Fiscal Year 2016. This effort will
    increase the weapon system's survivability against complex, new, and
    emerging threat systems and enable launch platforms greater stand-off
    range.
    Joint Air-to-Ground Missile (JAGM)
        The Fiscal Year 2016 President's Budget requests $25.9 million in
    RDT&E,N to begin a five year integration effort of JAGM Increment 1
    onto the Marine Corps AH-1Z in support of an Initial Operational
    Capability by Fiscal Year 2019. JAGM is a Department of the Army led,
    joint pre-Major Defense Acquisition Program. JAGM is a direct attack/
    close-air-support missile program that will utilize advanced seeker
    technology and be employed against land and maritime stationary and
    moving targets in adverse weather and will replace the Hellfire and TOW
    II missile systems. In November 2012, the Joint Chiefs of Staff
    authorized the JAGM incremental requirements and revalidated the DON's
    AH-1Z Cobra aircraft as a threshold platform. JAGM Increment 1 is
    expected to achieve Milestone B certification in Fiscal Year 2015.
    Advanced Precision Kill Weapon System II (APKWS II)
        The Fiscal Year 2016 President's Budget requests $53.5 million in
    PANMC for procurement of 1,834 APKWS II Precision Guidance Kits. APKWS
    II provides an unprecedented precision guidance capability to DON
    unguided rocket inventories, improving accuracy and minimizing
    collateral damage. Program production continues on schedule, meeting
    the needs of our warfighters in today's theaters of operations. IOC was
    reached in March 2012 on the Marine Corps' AH-1W and UH-1Y.These
    platforms have expended more than 170 APKWS II weapons in combat.
    Marine Crops AH-1Z platforms will be certified to fire APKWS II in
    Fiscal Year 2015. The Navy successfully integrated APKWS II on the MH-
    60S for an Early Operational Capability in March 2014 and is on track
    to finalize a similar effort for the MH-60R in March 2015.
                                   conclusion
        We are an agile strike and amphibious power projection force in
    readiness, and such agility requires that the aviation arm of our naval
    strike and expeditionary forces remain strong. Mr. Chairman, and
    distinguished committee members, we request your continued support for
    the Department's Fiscal Year 2016 budget request for our Naval Aviation
    programs.

        Senator Wicker. Thank you very much. Thank you for your
    testimony and for your service.
        Let me just ask then about some things I brought up in my
    opening statement.
        What about the observation by Dr. Gilmore in his annual
    report that the initial software for the F-35B has capability
    shortfalls? Help us understand how this might affect our
    aviators in hostile environments. General Davis, are they
    pointing to you to answer?
        General Davis. Senator Wicker, they are. Good morning, sir.
    Good morning, ma'am.
        Senator Wicker. Thank you.
        General Davis. The F-35B is on track right now for us to
    declare an IOC in July of this year. We will not declare IOC
    unless we meet all of our gates. We have got 13 things we track
    continuously to make sure that our pilots, the aircraft, the
    maintainers, and the test program makes its gates. We still
    have some data points we have got to pull in to go do that. But
    the software we see, which is called the 2 Bravo software, 2B,
    is giving us what we need, that initial operating capability to
    go actually take this aircraft to combat.
        Some of the things that Dr. Gilmore's report pointed out--
    they are all true. A lot of those are true. I believe actually
    the EMF A121, which is our first squadron which will be the
    squadron that we declare to be initial operational capability
    out in Yuma, Arizona has been working through those software
    shortfalls but actually finding tactical workarounds for our
    pilots. In many ways, that software is giving us a lot more
    capability than we have in our current fleet today.
        The fusion things that Dr. Gilmore talked about--we do have
    four-ship fusion issues right now, but we do not have two-ship
    fusion issues. So right now, I can take two aircraft and tie
    them together and another two aircraft, tie them together, and
    then tie all four together through a link 16 and give a
    tremendous capability that we do not have today.
        The F-35B, when it comes to initial operational capability,
    will give us through the weather close air support attack
    capability. It will also give us the ability to attack targets
    in contested environments that we do not have today. We can
    take that aircraft to amphibious ships. We can take that
    aircraft to short-fueled 3,000-foot runways and operate. We see
    that we are getting actually a step up in capability than what
    we have in our legacy aircraft today. I have no fusion in the
    airplanes that operate today. We believe we are getting a great
    warfighting capability for our marines.
        We are going to continue to advance the F-35, as we do with
    everything we buy and operate, to deliver the close air
    support, the interdiction, the reconnaissance, and the air-to-
    air capabilities that our marines need forward deployed.
        Senator Wicker. So let me be specific. Do you take issue
    with any of the observations Dr. Gilmore made in this report?
        General Davis. I read through the report, and I know Dr.
    Gilmore. I would say that we are in a better position than Dr.
    Gilmore lays out that we are in the F-35B. You talk to the
    pilots that are flying that airplane right now. They are F-18,
    they are Harrier, and they are Prowler pilots. They love the F-
    35B and they would not go back to their original platforms. So
    they think they have got a tremendous capability. When you talk
    to young captains and majors and lieutenant colonels that are
    flying that airplane, they think they have got a great
    capability.
        The software issues that we are dealing with, 2B software--
    we actually think it is tracking the way it is supposed to. We
    still have more test points that we have got to pull in. We
    will look at that in July. If the aircraft and the pilots and
    the squadron is not ready to declare IOC with all the things we
    say they have to have for an IOC declaration, we will not
    declare initial operating capability.
        Senator Wicker. Well, many of the points he made were
    valid, I understand you to say, and you have worked through
    them.
        General Davis. We have.
        Senator Wicker. Just for the record--I mean, we do not have
    all of them in front of us--do this. Get back to us on the
    record as to what he might have said that you disagree with,
    the issues that do not need any more tinkering. Will you do
    that?
        General Davis. Absolutely, sir.
        [The information referred to follows:]

        Senator Wicker, you asked me to discuss the Marine Corps' position
    on Dr. Gilmore's annual F-35 report and where we might disagree with
    it.
          The report expressed concern that Block 2B software
    development was off track.
          o  As we have demonstrated, Block 2B was delivered in time to
    make the objective Initial Operational Capability (IOC) date of July
    2015.
          The report discussed the June 2014 engine failure.
          o  The Joint Program Office (JPO) approved rub-in procedures have
    been executed and have the fleet g-limits up to the full limits of what
    the current aircraft configuration will permit--both on IOC and non-IOC
    jets.
          The report notes that Mission Data File (MDFs)
    development is behind and the Marine Corps will receive only a partial
    solution at IOC: The USMC concurs with this Director, Operational Test
    and Evaluation (DOT&E) assessment with the following notes:
          o  Per the DOT&E report, fully certified MDFs from USRL are
    slated for release in the Nov/Dec 2015 timeframe. This only speaks to a
    piece of the plan and aircraft capability. We are currently flying a
    version the MDFs in our IOC jets which is fully combat capable. While
    the current MDFs we are flying are immature, the advantages the F-35
    brings in terms of signature, sensors, and information exchange combine
    to make the F-35 far more capable than the current USMC TACAIR fleet.
          The Marine Corps does not agree with the DOT&E assessment
    on Reliability and Maintainability:
          o  The Reliability and Maintainability (R&M) data in the DOT&E
    report is accurate, but is not a true representation of the maturity of
    F-35's R&M.
                Six of the nine charts in the R&M cover the three
    month period immediately following the June 2014 AF-27 Engine incident.
    The directed red-stripe and appropriately conservative approach to
    flight operations following the incident drove an increased maintenance
    workload and reduced Air Vehicle Availability (the metric used in the
    report) resulting in significant bias in the metrics detailed in the
    report, making it impossible to use the data as an accurate measure of
    true program R&M performance.
          o  A Mission Essential Function List (MEFL) was approved by the
    JPO and is awaiting COMNAVAIR Force's final approval in order to gain
    consistency across all squadron readiness reporting. The formalized
    MEFL will link Logistic Control Numbers to specific missions allowing
    for standardized Mission Capable / Full Mission Capable reporting
    across squadrons.
          o  Trend analysis shows a steady increase in Mission Capable (MC)
    status as a direct correlation to the introduction of the newer Low
    Rate Initial Production (LRIP) aircraft to the flight lines. Moreover,
    the supply system is starting to mature. We are finding that by having
    a larger supply range and depth it has proven to minimize the Non-
    Mission Capable Supply Period. This has further contributed to higher
    numbers of MC aircraft. As such, we have every reason to believe that
    our readiness rates will improve as we approach and then begin full
    rate production in fiscal year 2018.
          The USMC concurs with assessment of the status of ALIS
    development with the following notes:
          o  The agreed upon IOC ALIS was delivered in time to declare IOC
    in July of 2015 and is functioning to meet the requirement.
          The DOT&E report states concerns with the construct of
    OT-1 aboard the USS Wasp and it's representation of combat operations.
    Of note, no weapons clearances were in place and the ACE was not
    embarked:
          o  OT-1 was an extremely successful evolution and concluded the
    3rd at-sea test for the F-35B. It is also important to note that the
    entire ACE has never been embarked for a USMC OT period.
          o  The launch and recovery portion of flight operations at the
    ship is administrative in nature and therefore does not have a
    significantly different context in combat. Aircraft can be loaded with
    fuel to simulate the weight and balance requirement for carrying
    ordnance and limitations space can be imposed to simulate the presence
    of the MEU ACE. Furthermore, F-35B conducted combat training missions
    during OT-1. All of this demonstrated that the aircraft, equipment and
    personnel were in fact qualified to operate as part of the deployed MEU
    ACE.
          o  The DOT&E report under-emphasizes the true successes of both
    the F-35B and F-35C at-sea test events. F-35B has completed three
    successful at-sea test periods enabling both day and night F-35B
    operations. F-35C DT-1 has established that the redesigned hook point
    is suitable for ship operations, set an unprecedented boarding rate of
    100 percent and likely paves the way for reduced operational unit
    training and proficiency requirements.
          DOT&E Recommendations:
          o  Eight (8) DOT&E recommendations reside at the end of the
    report and six of the eight already have been under action by the JPO.
    Two (2) DOT&E recommendations are under review:
              Update program schedules to reflect IOT&E spin-up to
    start no earlier than November of 2017 and IOT&E in May 2018. The JPO
    will assess the risks associated with the 3F air system certification
    activity and will implement risk mitigation options as required to
    ensure Spin-up and IOT&E entry criteria are met and the integrity of
    the IOT&E is not compromised. USMC believes the JPO approach to
    reviewing IOT&E schedule risk is more appropriate and does not concur
    with DOT&E the IOT&E schedule recommendation.
          Extending the full-up system level decontamination test
    to demonstrate the decontamination system effectiveness in a range of
    operationally realistic environments. F-35 Program is relying upon JPEO
    Chem Bio Defense (CBD) for the ``holistic'' solution for multiple DoD
    customers. This test will take place at Edwards AFB and once complete,
    the F-35 will be a Technology Readiness Level (TRL) 8: Actual System
    Completed and flight qualified. USMC concurs with the JPOs response to
    this DOT&E recommendation.
        The Commandant of the Marine Corps declared IOC on 28 July 2015.
    Preceding that declaration, I directed a thorough evaluation of our IOC
    squadron, VMFA-121, in order to ensure that the squadron could actually
    perform the combat mission sets that are required. The squadron
    performed exceptionally in all areas that were evaluated. This follows
    years of developmental test and operational flying which have totaled 3
    events aboard an L-Class carrier, totaling seven weeks at sea, with
    test and operational aircraft and Marines, multiple live ordnance
    sorties, and participation in multiple large force exercises. In the
    squadron's current posture and configuration they have more capability
    in key areas than I have in my legacy squadrons. For example, today,
    the IOC F-35s can operate in high threat environments and target in
    real time through the weather. I can't do either one of those things
    with my legacy aircraft. The performance of the squadron in the
    evaluation, and in the multitude of events that led their run up to it,
    has reinforced my conviction we are procuring the right aircraft. I am
    confident that, if required, VMFA-121 could respond to a contingency--
    giving our nation its first sea based 5th generation strike fighter
    capability.

        Senator Wicker. I appreciate that.
        Now, let me ask. Who wants to take the question about the
    unmanned aerial demonstration program as to the point that 85
    percent of the projected life remains on the two aircraft? Is
    it a good use of the taxpayer money not to continue to utilize
    these in the interim? Who would like to take that?
        Admiral Grosklags. Senator, I have got that one, sir.
        So we continue to look at this very closely. The UCAS
    program that you are talking about, U-C-A-S dash D--the ``D''
    is for demonstrator. This is without a doubt a demonstrator
    aircraft. It is not a prototype for one of our future UCLASS
    aircraft. It is clearly a demonstrator.
        The primary goal of that demonstrator was to demonstrate
    the ability to land and take off from an aircraft carrier with
    an unmanned system. We accomplished that about a year and a
    half ago. It was a great milestone for the Navy and for naval
    aviation.
        Subsequent to that, we have continued to work with the
    aircraft carrier in the aircraft landing environment, including
    with manned aircraft at the same time. We are within a couple
    weeks of finishing the last scheduled event with that
    demonstrator aircraft which is an actual air-to-air refueling
    hookup and transfer of fuel from a tanker to that demonstrator.
        However, we have looked at additional opportunities, as you
    say, to wisely spend the taxpayers' dollars on for the
    utilization of that aircraft, and we do not believe that it is
    warranted. In terms of informing us----
        Senator Wicker. So there is no use that can be made of the
    85 percent of the life of these two aircraft.
        Admiral Grosklags. Sir, it is less about the life of the
    aircraft than it is the ability of that demonstrator to further
    our goals for unmanned carrier aviation. This aircraft has a
    unique landing system. It has a unique control system. It uses
    a unique data link. The network architecture is not the
    architecture that we will use for our future unmanned aircraft
    or for the unmanned aircraft that we have in our inventory
    today. So it does not have the ability to carry a sensor
    package today. It cannot carry weapons or release weapons. It
    is a flying demonstrator to get on and off of the aircraft
    carrier primarily.
        We believe we have run that out as far as we need to and
    that our resources would be better spent pursuing the follow-on
    capability which is the true capability for the fleet that they
    need with UCLASS.
        Senator Wicker. Was it a mistake the develop the UCAS?
        Admiral Grosklags. No, sir, I do not believe so. We learned
    a tremendous amount about operating an unmanned aircraft in
    that carrier environment. That was a high-risk/high-reward
    demonstration event, and it worked. A lot of effort went into
    it and a lot of engineering and a lot of expertise. We proved
    to ourselves that we could do it. We proved to ourselves we
    could do it safely in that very dynamic flight deck
    environment. But we are beyond that now, and we need to move on
    to a program that actually can bring a capability to the fleet
    for weapons capability, intelligence, surveillance,
    reconnaissance capability. That is what we are looking forward
    to with the UCLASS program.
        Senator Wicker. Thank you very much.
        I am going to recognize the ranking member and also
    reiterate the policy of this chairman in terms of recognizing
    members. We are going to recognize members in the order of
    their appearance. So it will be Senators Hirono, Kaine, and
    Tillis. Senator Hirono?
        Senator Hirono. Thank you, Mr. Chairman.
        A few follow-up questions for General Davis regarding the
    F-35s. The Marine Corps is planning, as you said, to declare
    IOC on the F-35s July of this year. Now, you have already been
    asked a series of questions regarding Dr. Gilmore's report. He
    has charged that the various attributes in the block 2B
    software release will provide less capability than the aircraft
    that the Marine Corps currently operates, the F-18 Hornet and
    the AV-8B Harrier.
        General Davis, which Marine Corps official will decide to
    declare IOC, or in other words, what level of capability is
    acceptable from the Marine Corps perspective?
        I just wanted to note that my understanding is the software
    in the F-35 is very, very complex and that there are some 22
    million lines of code in that aircraft. I think that is what
    leads to concerns about its readiness. So is the IOC
    declaration event-based or being driven by a need to meet a
    calendar deadline for readiness?
        General Davis. Senator Hirono, thanks for the question.
    Absolutely the decision to declare IOC will be event-based and
    conditions-based based on us achieving what we have to do to
    deliver a combat capability to our marines.
        I will tell you they talk about not as capable an airplane
    as the fourth generation, third generation airplanes. That is
    absolutely not our position at all, not our view of it, not the
    guys who fly it. The F-35B, even in 2B software, gives us
    capability we do not have with legacy fighters. The first thing
    I talked about earlier was fusion. We have no fusion capability
    today in any of our legacy fighters in the Marine Corps. We do
    not have that. So being able to share information, high
    bandwidth information real-time--we cannot do that. Being able
    to do close air support for our marines in a contested
    environment--we cannot do that right now, not to the degree you
    can do it with a fifth generation airplane like the F-35.
        The other one is through the weather, providing close air
    support through the weather, interdiction through the weather
    with high fidelity using the APG-81 radar to go do a SAR map.
    We cannot do that today.
        So the way that we provide close air support will be
    different than we do today, but in many, many ways we think it
    is a lot more capable than the aircraft we are replacing.
        Senator Hirono. Excuse me, General. I think there is some
    question that the software in the F-35 will provide us with a
    lot more capability, but only if it is working. I think that is
    the question we have. Reassure us that the testing will occur.
    We all know about software and all the glitches that can occur
    and especially one that is as complicated. So you are providing
    us with that reassurance that everything will be a go.
        General Davis. Absolutely, ma'am. We will. Like I said,
    what we have been seeing to date, the software we are flying
    with today and the 2B software being loaded and tested now--we
    are seeing actually it is a stable software load. It is working
    very well. Not many of the system crashes. This has been a very
    reliable airplane for us. Our readiness numbers are coming up.
    The readiness includes the software and the reliability of that
    software. So we are seeing nothing but positive trends as we
    work closer to IOC. But if conditions are met, I will make a
    recommendation to General Dunford that we declare IOC but only
    if those conditions are met, not until, and software will be a
    part of that.
        Senator Wicker. Thank you.
        Admiral Grosklags, we both mentioned that there is going to
    be a shortfall estimate this year, and we were told in an
    earlier hearing that a shortfall of 65 aircraft is manageable,
    but if we are looking at a shortfall of 134 aircraft--perhaps
    it is Admiral Manazir who could answer this. How would you
    describe this estimated shortfall of 134 aircraft? Is it
    manageable? What do we need to do?
        Admiral Manazir. Yes, ma'am. Thank you for the question. It
    was very meaningful for me and Rear Admiral Tom Moore to meet
    with you about aircraft carriers as well previously.
        Of course, on top of those aircraft carriers, we fill those
    with 44 strike fighters of the United States Navy. So managing
    the inventory is a complex task that actually connects not only
    the F-18A plus pluses flown by the Marine Corps, the F-18C
    flown by the Marine Corps and the Navy, the F-18E and F and the
    F-35--so as we look at strike fighter inventory management--I
    use the term ``shortfall'' when you have a set supply, a set
    demand, and a set utilization rate, with a set depot condition.
    If you do not change any condition that we have right now with
    the current supply on our flight lines, the current depot
    throughput, the utilization in the fleet on deployment and in
    training, and the acquisition of new aircraft, you will have a
    shortage that is depicted as 134 airplanes at the high. But we
    are changing all of that.
        It is meaningful. I will agree with the chairman and
    Ranking Member Hirono that sequestration is devastating. The
    reason we are where we are in the depot today is because of
    sequestration in 2013. When we brought the F-18 As through Ds
    into the depot, we brought them to extend the flying hours from
    6,000 hours per airframe. Through inspections, we got to 8 and
    we are now extending their service life to 10. Just that
    planned work is significant. For the first time in history,
    naval aviation is maintaining three type model series in the
    same mission area, F-18 legacy, Super Hornets, and F-35. We are
    sustaining. We are modernizing and we are procuring three type
    model series. It is very complex. So the planned work with the
    F-18A through Ds coming in was to extend the service life.
        Beyond 6,000 hours, we did not plan for the amount of
    corrosion we found inside the airframes due to extended service
    at sea and in the environments we operate in: in the desert in
    Afghanistan and Iraq; at sea in saltwater corrosion. In fact,
    the airplane was designed to go away at 6,000 hours. You would
    not have to do the same kind of corrosion work. Now that we
    have had to extend that, we have a significant amount of
    unplanned work. That unplanned work is causing depot throughput
    problems.
        So if you look at the whole condition, the shortfall at a
    high goes to 134. At a low, it is actually less than that. The
    way the U.S. Navy operates our forces, we have a profile called
    a ``fleet response training plan.'' That fleet response
    training plan works up squadrons into integrated units and
    deploys them at the highest level of readiness they can be. In
    fact, we always meet that bell in the Navy and Marine Corps. We
    have not failed to meet deployed readiness yet. The priority is
    deployed readiness.
        Then we tail that readiness off at the other side. So it
    looks kind of like a hump. If you drew a line across the
    deployed readiness, all the way across, and you kept everybody
    at that level you would have no shortfall. We actually
    intentionally tier the readiness so that if you can picture
    that rising hump and then going down to the two blank areas
    between the lower humps and the top part, that represents 65
    airplanes. That difference is 65 airplanes. We manage that in
    tiered readiness. If you look at the static shortfall average
    for the next 5 years, it is about 100 airplanes. The difference
    between 65 and 100 is about 36 airplanes. That is why the CNO
    [Chief of Naval Operations] said I need about two to three
    squadrons. If we keep the conditions the way they are, we
    reduce the risk by that if we infuse F-18 Es and Fs that the
    CNO talked about.
        But what we are changing, Ranking Member Hirono, is the
    depot process through a new process called critical chain
    project management (CCPM). That is being organized to
    strengthen the depot throughput to get more airplanes on the
    flight line and to increase our readiness. We are also changing
    the demand signal in the training aspect of what we do. Vice
    Admiral Mike Shoemaker, Commander of Naval Air Forces, is
    looking at the amount of training we do before and after we go
    on deployment to make sure that we have got just the right
    amount of training but not too much. While we increase the
    depot and while we change the utilization of those airplanes
    and if we can procure more F-35s sooner--the Navy and the
    Marine Corps need to get the F-35C--and we get the two to three
    squadrons that the CNO [Chief of Naval Operations] talked
    about, you will alleviate the shortfall. We have plans in place
    to do all of that, ma'am.
        Senator Hirono. So I get that inventory management. There
    are a lot of moving parts to what you are doing, and you are
    using all the depots that are available as part of what you are
    doing?
        Admiral Manazir. Yes, ma'am. Not only that, looking at the
    capacity that we have and also asking Boeing to step in and use
    their resources to solve additional challenges that we have.
        Senator Hirono. Thank you, Mr. Chairman, for your
    indulgence.
        Senator Wicker. Thank you, Senator Hirono.
        Senator Kaine, followed by Senator Tillis.
        Senator Kaine. Thank you, Mr. Chair, and thank you to the
    witnesses for the testimony.
        I think, Admiral Grosklags, this question may be for you.
    In the fall of 2014, the Navy released a record of decision
    about the F-35C basing on the West Coast. Talk a little bit
    about what the Navy's plans are vis-a-vis basing decisions,
    process timing for East Coast basing for the F-35C. Whoever
    wants to answer that.
        Admiral Manazir. Senator Kaine, thank you very much.
        I am a fighter pilot. I have flown out of Oceana. It is a
    wonderful base. I also flew out of Cecil and Jacksonville. The
    facilities on the East Coast, particularly in Virginia, are
    very, very good.
        Having said that, sir, we have not decided, nor have
    commenced a process to look at East Coast basing. The current
    procurement profile of the F-35C allows us to look at NAS
    Lemoore on the West Coast and to fill those squadrons, up and
    then at the right time, we will start the entire environmental
    assessment process to look and see where we would base the F-
    35C on the East coast. We have not started that yet, sir.
        Senator Kaine. Do you have a sense of when you would start
    that process?
        Admiral Manazir. That process typically takes 18 months to
    2 years to do the EIS [Environmental Import Statement]. We
    would do the EIS 18 months to 2 years prior. Then we would
    assess after the EIS the MILCON that it would take. It would be
    another 2-year process. So I would assess, sir, that probably
    fiscal year 2018 to 2019 we would be looking at a rate at which
    we need to start looking at the East Coast base.
        Senator Kaine. Great. That is helpful.
        General Davis. Sir?
        Senator Kaine. Yes, please.
        General Davis. If I could, on the F-35Cs and the East Coast
    laydown of F-35s to the Marine Corps, we will have at least one
    C squadron at Marine Corps Air Station Beaufort. We have an F-
    35B squadron right there, a training squadron. We will have
    four squadrons. Then we also are flowing up to Cherry Point as
    well. So we will have a large number of Marine Corps F-35s on
    the East Coast.
        Senator Kaine. Great. Thank you, General.
        The President's budget indicates that depot level
    maintenance--I think it is at 83 percent of the requirement. I
    am curious how the Navy prioritizes between variants awaiting
    maintenance if you are at 83 percent. Assuming we get the
    President's budget level--that is a big assumption, but if you
    do or even if you do not, how do you prioritize among the
    variants in line for maintenance?
        Admiral Grosklags. Sir, well, as Admiral Manazir just spoke
    about, the depot induction process is rather complicated. The
    83 percent that we have requested is sufficient to fully fund
    the work that we know we can accomplish in fiscal year 2016 at
    our depots. So we do not want to request more money than what
    we can actually execute.
        One of our challenges that was alluded to earlier is that
    when we went through sequestration 2 years ago and a subsequent
    furlough, we lost a significant number of our workforce from
    our Government depots. We today have a shortfall of about 700
    aircraft artisans spread across all type model series, but they
    are somewhat focused right now on the F-18 and our Hornet
    shortage. That is 700 out of about a 6,800-person requirement.
    So it is a significant impact to us. We have to build that
    workforce back up.
        We have to build up our engineering workforce because, in
    addition to the artisans, we have engineering decisions that
    need to be made when we open up these aircraft and find a
    discrepancy. We need an engineer to come in and look at it and
    determine what type of repair has to happen. So we have to beef
    up our engineering expertise and numbers of people as well.
        Until we get through that hiring process, we can only
    execute so many aircraft at a time. The fleet prioritizes which
    aircraft come in, even within a certain type of aircraft and
    then across all the type model series that come into our
    Government depots. So it is a multi-pronged approach, but we
    believe what has been requested in PB 2016 is the funding we
    need to execute our depot workload.
        Senator Kaine. General Davis?
        General Davis. Thank you, Senator.
        On the depot issue, inside the Marine Corps, we are having
    a difficult time getting our ready bench--what General Dunford
    calls a ready bench--ready to deploy. It would be that crisis
    response force. We do a great job getting the guys out the door
    with assets and training, but it is training that next group
    that is ready to go.
        One of the prime reasons we have a hard time with that
    right now is because we have about 19 percent of our flight
    line inventory that we should have up and in operation that is
    not available to fly. A large portion of that is because of
    depot. The airplanes are stacked up in the depot and they
    cannot get through. So in the Marine Corps, I have got 20
    percent of my F-18s are stuck and not able to get through. But
    I have also got CH-53 helicopters. I have got Harriers. I have
    got V-22s that are coming through for normal depot rework, H-
    1s. So we have about a 19 percent shortfall across the spectrum
    inside the Marine Corps, and it extends beyond the F-18.
        So just like Admiral Grosklags said, the depots can handle
    so much. What we have done is they have done, I think, a
    brilliant job, as Admiral Manazir said, working out the
    strategy to get our legacy Hornets back on the line, basically
    getting our young aviators out there flying and training. But
    we have had to go to industry to help to plus-up that
    capability, to get rid of the backlog that is on the back side
    of our depots because the real issue is getting those airplanes
    back on the line that the taxpayers have spent a lot of money
    to buy for us but we need to have them fixed or get them
    through the depot.
        The other part of that is--part of sequestration--we have
    constricted our operations and maintenance accounts, our parts
    and spares accounts. So if I got an airplane on the line that
    is not depot but it cannot be flown because I do not have the
    parts to put on there, that impacts our ability to generate
    readiness as well.
        Senator Kaine. I just want to summarize because I only have
    20 seconds left. But it sounds like a sequester effect is kind
    of a compounding effect. So because of sequester, it is
    affecting our purchase of new platforms. So to deal with that,
    we pushed the life from 6,000 to 10,000 hours. But to do that,
    we also need a more robust depot program because not only are
    we keeping these planes going longer, but the corrosion and
    other challenges of a plane late in life are more difficult
    than early. But then the third compounding factor is sequester
    and furloughs have caused you to lose some of your workforce
    because they have other options. They can go into the private
    sector. So those factors, not procuring as much, pushing the
    extension of life, more complex depot issues, but sequester and
    furlough also costing us some of the workforce--these issues
    kind of compound together to really affect our readiness. Am I
    understand the chain of events correctly?
        Admiral Grosklags. Yes, sir. I think you hit it right on
    the head. This is one of the complications that we warned the
    Congress about when we were talking about sequestration several
    years ago was particularly our depot throughput and the
    implications and the fact that it would take us several years
    to recover. That was compounded by the description that Admiral
    Manazir gave earlier about our high flight hour inspections
    kind of hitting us in the face for the F-18s as well.
        Senator Kaine. All right. Thank you.
        Thank you, Mr. Chair.
        Senator Wicker. Senator Kaine, that was the best use of 20
    seconds I have ever seen.
        [Laughter.]
        Senator Tillis, I am sure that testimony about Cherry Point
    was music to your ears.
        Senator Tillis. I was going to get him to repeat himself.
        [Laughter.]
        No, I appreciate that.
        I was kind of curious between the East Coast and West Coast
    deployment. Do you all have a rough idea as a percentage of the
    base that will be deployed, how that will go East Coast/West
    Coast?
        General Davis. Senator, the first base to stand up is MCS
    Yuma in Arizona. We are also standing up--next is Beaufort, and
    then it is between Cherry Point and Miramar for our four bases
    in the continental United States. Then also Japan as well to
    MCS Iwakuni. So we have got a fairly aggressive, but
    sustainable flow, thanks to your support and buying us those
    airplanes.
        Senator Tillis. What is the timeline on that?
        General Davis. I can get back to you as to exactly. We have
    been adjusting that a little bit. We are actually trying to
    move it to the left a little bit to go a little bit sooner into
    Cherry Point. It was further out in the late 2020s. We are
    trying to move that back in the 2024-2025. But I can get you
    exactly when the first squadron is supposed to go into Cherry
    Point. As long as we keep our ramp whole for both F-35 B and C,
    that is going to help us out and make sure we fill those.
        [The information referred to follows:]

        Dates for the arrival of the first F-35 squadrons at Marine Corps
    Air Stations are:
        a. MCAS Yuma--Nov 2012
        b. MCAS Beaufort--July 2014
        c. MCAS Iwakuni--Jan 2017
        d. MCAS Miramar--Oct 2022
        e. MCAS Cherry Point--Oct 2022

        Senator Tillis. The other question I had was back to the
    question the chair and the ranking member asked. But just to be
    clear on the software capabilities that will be deployed with
    the F-35 and your confidence that when it is ready, it is
    ready, that you will deal with any issues. There has been some
    discussion about fewer features and functions, but it sounds
    like to me the fusion capability, which is kind of a real-time
    network capability among several craft, would far outweigh a
    few features and functions that are isolated to the specific
    craft. Is that a----
        General Davis. Absolutely correct. They have had problems
    when they tied. It is a fighter-to-fighter data link, and they
    have had some problems. It is really a latency problem with
    tying all four together. When we tie just two together and two
    sections, it works out really, really well.
        Senator Tillis. It is just scaling it.
        General Davis. We are still connecting in through a link
    16. So it actually has two data links in the airplane, which
    really exceptional.
        It was real interesting. We did some close air support the
    other day, and initially the forward air control on the ground
    wanted to see streaming video. The F-35 will not get that till
    block 4 in 2019. But the clouds were coming in. So he says,
    well, the clouds are coming in. We cannot do the close air
    support anyway. The pilot in the F-35 says, hey, I see the
    target. I can see though the clouds. Let us do this thing.
        So we do not have that capability today. We do not. We will
    have that with the F-35. So we will do close air support and
    support our marines on the ground differently, but we will do
    it in a contested environment and we will do it also from our
    amphibious ships and we will do it through the weather. I think
    it is some breakthrough capability for us. Kind of like the V-
    22 10 years ago, we are just scratching the itch and scratching
    the surface of what we can do with this airplane. I think it is
    going to be as wildly successful as the V-22 is right now.
        Senator Tillis. Thank you.
        Admiral Manazir, I think the Navy had in the President's
    2015 budget some 4,600 joint standoff weapons budgeted. In the
    2016 budget, there are none. What has changed and what are we
    doing to replace that capability?
        Admiral Manazir. Thank you, Mr. Senator, for that question.
        What has changed is we did a joint assessment of our
    targeting plans in the most stressing operational plans against
    the highest end threat. We recognized when we did the joint
    assessment that we actually had planned for too many of those
    joint standoff weapons.
        Senator Tillis. So it was not a capability you needed?
        Admiral Manazir. Yes, sir. Yes, we definitely need the
    capability, but we realize that we actually have enough.
        Senator Tillis. You have the scale.
        Admiral Manazir. Yes, sir. We have the scale. We have the
    capability. We do not have any gaps with the joint standoff
    weapon.
        What we are doing, however, in all of our weapons is
    modernizing our capability to do things like the JSOW with
    small diameter bomb to moving targets. The ability to reach
    into denied areas with our weapons is a capability we are
    looking at.
        But specific to your question, sir, when we did the joint
    look at it, we realized that we had been double counting and we
    actually have enough.
        Senator Tillis. I mean, that is an example of a good
    outcome on a downward pressure on budgeting. A bad outcome on
    budgeting is sequestration. That is the worst thing that I have
    seen up here that has been put into law in my opinion from a
    budgeting tool standpoint.
        General Grosklags--is that the right way to pronounce your
    name?
        Admiral Grosklags. It is Grosklags.
        Senator Tillis. I have heard it pronounced three different
    ways on this panel, so I thought I would try and get it right.
        [Laughter.]
        Senator Tillis. Back to sequestration, I am kind of
    interested in the lack of certainty that we have with
    sequestration, how it affects our industrial base because if I
    am out there trying to figure out what we are going to buy from
    our industrial, I am making decisions that downsize my capacity
    right now, just based on the sort of paycheck-to-paycheck
    approach we have for budgeting right now. Do you have any
    specific areas of concerns? I know we talked about shipyards,
    but other areas within the industrial base that you are
    concerned that we are reaching a tipping point in terms of
    being able to ramp up if necessary?
        Admiral Grosklags. Yes, sir. We are concerned across the
    industrial base. You just alluded to weapons. It is true in the
    aircraft industry, as well as you alluded to the shipbuilding
    industry.
        It is two-pronged. One is the uncertainty. As I mentioned
    in my opening statement, what we really need is a stable,
    predictable budget, and that is what industry needs as well to
    temper their investments. What areas are they going to invest
    in long-term? We as a department and we as taxpayers absolutely
    need those investments by industry to support our programs. So
    it is a two-way street there. We are making it very, very
    difficult on industry.
        From our internal Department of Defense perspective, if you
    will, the uncertainty in the planning quite honestly makes us
    much less efficient. We are not able to put in place some of
    the acquisition strategies and some of the long-term plans with
    industry that we would like to that would drive down our
    program costs. So much as Senator Kaine alluded to and kind of
    the vicious circle we got into with the depots and readiness
    and flying hours, we end up with the same problem with some of
    our acquisition strategies. The more uncertainty, the more it
    costs us. The more it costs us, the less certain we can become
    about the future.
        So I think your concern is right on the money, the
    unpredictability in stability and even the threat of
    sequestration, whether it is realized or not, hampers our
    ability to work with industry and get them to invest in the
    areas we think are important to our future.
        Senator Tillis. Thank you.
        Thank you, Mr. Chair.
        Senator Wicker. You know, Senator Tillis, I think the
    Senate is almost unanimous in agreeing that a return to
    sequestration would be most harmful. The question is how do we
    find the offsets to avoid it. There is the rub, absolutely.
        Senator Ayotte, you are recognized.
        Senator Ayotte. Thank you, Mr. Chairman.
        I want to thank all of you for being here.
        I wanted to ask about some specific programs. General
    Davis, I understand that the CH-53K is on schedule to conduct
    its first flight by the end of 2015. Is that true, and are we
    on track there?
        General Davis. We are on track. That is true.
        Senator Ayotte. How important is that new CH-53 to the
    Marine Corps in its modernization effort?
        General Davis. The 53 Kilo--ma'am, thanks for that
    question--is absolutely essential to our modernization effort.
    We talked a little bit earlier about the flight line deficit we
    have in all of our aircraft, and CH-53 Echo is our only heavy
    lift airplane. It lifts heavy equipment from a sea base and
    takes it ashore. So it is kind part and parcel of what the
    Marine Corps does and what we be able to do. The CH-53 Kilo
    replaces those 53 Echoes. Echoes have done 95,000 hours in
    combat in the last 14 years. So really performed brilliantly
    for us. But they are getting old and wearing out. We can only
    keep them going for so long. The 53 Kilo gives us three times
    the lift capability. It will lift 27,000 pounds. Unprecedented.
    The only helicopter in the world that can do that and take a
    27,000-pound load on a hot, heavy day and transport that gear
    110 miles. So absolutely critical for our Marine Corps.
        It is on track. Like every program, it has got its episodic
    things we learn in tests, but nothing would stop us from
    believing that we will fly that airplane this year and also
    too, we make an initial operating capability of the 53 Kilo in
    2019.
        Senator Ayotte. So fly this year and then operational
    capability in 2019?
        General Davis. Yes, ma'am.
        Senator Ayotte. Great. I appreciate that.
        Rear Admiral Manazir, I also wanted to ask about a
    particular program, and that is the P-8A Poseidon's first
    operational deployment was completed, I understand, in June
    2014 and that continuous 7th Fleet operational deployments are
    underway. How is the P-8 performing and how is that going?
        Admiral Manazir. Yes, ma'am. Thanks for the question.
        The P-8A is now in its third deployment. The third squadron
    is deploying it with their P-45 and have been essentially
    wildly successful.
        Senator Ayotte. I like to hear that. We hear about delays
    and things. Wildly successful----
        Admiral Manazir. Yes, ma'am. I was the deputy to my current
    position a couple years ago for 2 full years, and now I have
    been the Director of Naval Warfare in the Navy here for a year
    and a half. The P-8A is the most successful acquisition program
    that you have funded for us. Taking a commercial 737 and
    filling it with high-end equipment works very well.
        I actually flew that airplane last week. I went out of
    Jacksonville with a LRIP [Low Rate Initial Production]
    airplane, essentially a block 0 P-8A. We went out. They
    demonstrated for me dropping sonar buoys in a simulated
    targeted, tracking that target, building a synthetic aperture
    map of the eastern seaboard, connecting with platforms that
    were as far north as Norfolk and seeing the entire picture out
    over the water, and then the electronic support that it does.
    So that what we have in the back of that airplane is very good.
        On its very first flight out of Seattle, the very first
    flight of that airplane, they put it over the top of the P-3
    looking at a blue submarine, a United States Navy submarine,
    and the P-8 had more information right away than the P-3 had.
        We are incrementally improving that airplane to increments
    1, 2 and 3. Increment 1 is already funded. Increment 2 is fully
    funded. Increment 3 is in part this budget. We are completing
    the kill chain that it takes from high altitude ASW [anti-
    submarine warfare] by buying a torpedo, the Mark 54. You put a
    wing kit on it. You can launch it from high altitude, which
    covers more water space and reduces the fatigue life on the
    airplane.
        So, ma'am, in summary, very successful.
        Senator Ayotte. Excellent. I appreciate that update.
        I wanted to ask. I am sure this was addressed to some
    extent by my colleagues, but I wanted to make sure that I
    understood where we are with the F-35, both the Marine Corps
    and Navy variants, and how things are going and what challenges
    remain. Who would love to go first on that?
        Admiral Grosklags. So let me touch on it just at kind of a
    macro level and cover both services and then General Davis and
    Admiral Manazir might tag back in.
        We follow that program very closely. Obviously, Mr.
    Stackley is the service acquisition executive responsible for
    that program today. We believe they are making steady progress.
    As you are well aware, they rebaselined the program back about
    4 years ago. Since that time, they have largely been executing
    to that schedule and to that funding profile. So from that
    perspective, they are making steady progress. They are making
    progress in development of the software that General Davis has
    talked about previously. The testing is moving forward. The
    production line is moving forward. We are spending a tremendous
    amount of time working with the JPO and our partners in both
    the Air Force, as well as the international community, on
    attacking affordability on that aircraft.
        Now, that is not to say that everything is perfect, and we
    have alluded to some of the problems or discussed some of the
    problems we are having already. We are very much focused on the
    software development. That will continue to be a challenge as
    long as we are in this development phase, which runs out
    through 2018. We continue to focus on the availability of the
    aircraft, its readiness, its maintainability, and the support
    from the autonomic logistics system that supports the
    operations and the maintenance. As I mentioned, we are very
    focused on affordability.
        We can talk more in detail about any one of those aspects,
    but the bottom line is they are making as a program steady
    progress forward to the IOC capability that General Davis has
    been talking about, and perhaps Admiral Manazir would like to
    talk just briefly about how we are progressing toward the
    Navy's IOC in 2018.
        Admiral Manazir. Ma'am, thanks.
        The Navy needs the F-35C to win the high-end fight.
        We have been very discerning customers. There is a healthy
    debate. In fact, tomorrow is the third joint executive steering
    board to go into the specifics of F-35, all models, all
    services. I am comfortable that in the last year and a half the
    program has stabilized to where we will achieve our IOC,
    following the Marine Corps and following the Air Force, in
    August 2018. Our risks are in software. The risks to block 3F,
    which is post-2B software, to development have been 4 to 6
    months of the original baseline that has been stabilized now at
    that 4- to 6-month risk now for over a year and a half. I am
    starting to get comfortable that we have that risk right.
        We have identified other challenges in modifications to the
    airplane, and we are comfortable those modifications will be on
    track.
        We think the funding is adequate to execute the plan. We
    just work with the Joint Program Office to actually execute
    that funding. So I believe that we are on a good track, but I
    will tell you that your scrutiny joins our scrutiny in working
    with the contractor to deliver this airplane.
        To General Davis' point, this is a game-changing airplane.
    The fusion that we talked about earlier is simply making what
    looks like four targets actually down into the reality that is
    one target. So it is making all of those signals come out and
    show us that one target without a shadow of a doubt, and that
    is what we are working towards. But the capabilities of that F-
    35C are such that we need that for the war fight, and I believe
    that General Bogden and the rest of the program coupled with
    the services has us on a good track for both models, F-35 B and
    C.
        Senator Ayotte. Thank you.
        Senator Wicker. Rear Admiral Manazir, help me remember what
    you said about the unexpected corrosion because of sea air and
    desert. Was that with regard to the Hornets?
        Admiral Manazir. Yes, sir. Actually every airplane that we
    fly in the environments that we fly in, be it a desert
    environment or a salt air environment, experience some type of
    corrosion.
        Senator Wicker. Of course. But you did not expect to have
    to deal with it because you did not expect the aircraft life to
    be that lengthy. Is that your testimony?
        Admiral Manazir. That is correct, sir.
        Senator Wicker. When was the Hornet developed?
        Admiral Manazir. Early 1980s, sir. We IOCed the airplane in
    1983, the F-18C--F-18A and took it to C in 1983.
        Senator Wicker. We fly aircraft a long time.
        Admiral Manazir. Yes, sir.
        Senator Wicker. I got in the Air Force in 1976, and we were
    talking about how well the B-22s were. You know, here we are.
        With regard to programs going forward, are we being a
    little more realistic about the expected timeframe in which we
    are going to have to use these aircraft?
        Admiral Manazir. Sir, I believe we have been realistic the
    whole time. When we developed----
        Senator Wicker. Even with regard to the Hornets?
        Admiral Manazir. Yes, sir. NAVAIR SYSCOM assesses the
    airframe and designs the airplane with the contractor to go to
    a certain service length, every aspect of that airplane,
    including projected corrosion. We successfully got the entire
    fleet of 614 F-18A pluses through Cs to 6,000 hours through a
    maintenance program that was viable and it was positive, and we
    got them home at 6,000 hours. When we opened up the airplanes
    after--and we inspected them to 8,000 hours, by the way. So we
    increased the life another third. When we inspected them and
    opened them up after 8,000 hours, we saw corrosion that we had
    not planned on. When you couple the----
        Senator Wicker. It was not supposed to matter.
        Admiral Manazir. That is right, sir. It was not supposed to
    matter. We were not supposed to be flying out here.
        So we did the assessment of the service life, but when you
    opened the airplane deeply and look way inside--we are talking
    taking panels off and structure off--and the parts that we do
    not build anymore because they have become obsolete, and we
    need a range and depth--those parts were corroded. So the depot
    has had to design, engineer, build, and then install these
    parts that used to be put together by Boeing. That is the
    unplanned work we have, sir.
        Senator Wicker. I am not making a good point about whether
    we should have expected to have to use these aircraft longer.
        Admiral Manazir. You are making a great point, sir. A 30-
    year service life, 6,000 hours, the F-35 was designed for 30
    years and 6,000 hours--8,000 hours.
        We will probably have to assess extension of the service
    life. Now, I will tell you, sir, that what we have learned--we
    did not do an early enough service life extension program
    assessment of the F-18 A through C. So we found ourselves
    without the analysis and we are behind. But we learned that
    lesson with our F-18E/F.
        We are going to extend the service life of the F-18E/F to
    9,000 hours. That extension will occur in the mid-2020s. We are
    already in phase two of the service life assessment program,
    which will also show us the corrosion that occurs at 6,000
    hours. So we have learned our lesson on the extension part.
        But I would still say, sir, we buy and procure aircraft
    with the planned service life and we engineer to that service
    life.
        I hope that answers your question.
        Senator Wicker. Thank you very much.
        Admiral Manazir, the Navy trains its future rotary wing
    pilots utilizing the legacy TH-57C Ranger helicopters. The B
    model is used for VFR and the C model is used for IFR. My
    understanding is that 125 helicopters currently support the
    Navy's daily requirement for 90 operational available aircraft.
    They are equipped with dated avionics and the maintenance and
    sustainment costs associated with these legacy aircraft are
    also increasing as the aircraft age.
        So give us an assessment of operational reliability,
    sustainment plan, and replacement intentions.
        Admiral Manazir. Yes, sir. You have characterized exactly
    how we train our initial rotary wing aviators. That TH-57 is a
    very effective initial trainer. I flew that. It is a good way
    to teach a kid how to fly a skid helicopter. It is obsolete.
        A couple of years ago, we tried to replace it with a TH-
    57D. We were essentially going to make a glass cockpit in the
    Jet Ranger, and the FAA [Federal Aviation Administration]--we
    could not get the right configuration, so we canceled that
    program.
        So we have just come through about two-thirds of an
    analysis to see how we train our rotary wing aviators, not
    necessarily how to replace the 57, but how do we train them.
        But in the interim, sir, what I am really doing is working
    with the NAVAIR SYSCOM staff and the Army to bring down some of
    the TH-67 trainers that they have in Army training and to
    convert them to 57 configurations so at least we can give them
    a short-term better simulation than they have now. So we have a
    short-term plan for simulation and a longer-term plan
    potentially from a programmatic standpoint about how to train
    our rotary wing aviators. But we are looking at that very hard.
        Senator Wicker. Thank you.
        Senator Hirono?
        Senator Hirono. Thank you.
        Admiral Grosklags, so there has been discussion about
    corrosion which occurs on our planes, on our ships. Is there a
    DOD-funded research and development as to anti-corrosion
    research? Because we are probably living in an environment
    where we need to get a lot more life out of our assets.
        Admiral Grosklags. I will have to get back to you on
    specific programs. I do know that there are a number of
    programs, including with our office in naval research, that
    address corrosion. It has, obviously, been an issue that we
    have dealt with as long as we have put aircraft and ships to
    sea. I cannot give you the specifics of any of those programs
    today, but I will certainly get back to you.
        [The information referred to follows:]

        The Department of Navy (DON) has an established, department-wide
    program to address corrosion concerns. This program is comprised of the
    DON Systems Commands (NAVAIR, NAVFAC, NAVSEA, NAVSUP, SPAWAR, and
    Marine Corps Systems Command) and the Office of Naval Research working
    together to address both common and platform-specific corrosion issues.
    The program works on mitigating corrosion through research and
    development efforts, aiding corrosion resistant product designs in
    acquisition, training and education of the fleet on preventative and
    corrective corrosion maintenance, and developing long-lasting
    corrective maintenance procedures for the system life cycle.
        As required by Title 10 U.S.C. Sec. 2228, DON has established a
    service Corrosion Control and Prevention Executive (CCPE) responsible
    for ensuring corrosion prevention and control are integrated into DON
    policy and guidance for system acquisition and production; logistics
    research and support analysis; equipment standardization programs;
    military infrastructure design, construction and maintenance; and
    research, development, test and evaluation programs and activities.
    Additionally, the DON CCPE is required to provide both an ``Annual
    Report on Corrosion'' and a ``Strategic Plan for Corrosion Prevention
    and Control'' to Congress.
        Attached are The Department of Navy Annual Report on Corrosion for
    Fiscal Year 2014 and The Department of Navy Strategic Plan for
    Corrosion Prevention and Control. The annual report addresses the
    questions regarding on-going Navy and Marine Corps anti-corrosion
    research and development programs funded through DON and the Department
    of Defense. In addition to research and development programs of note,
    the report outlines specific efforts to mitigate corrosion in the areas
    of acquisition and sustainment. On-going program efforts are being made
    in materials, coatings, and equipment design technical areas. These
    programs evaluate promising new technologies that meet stringent DON
    performance requirements to address corrosion control.

        Senator Hirono. Are we making progress in a longer life for
    parts and anti-corrosive research?
        Admiral Grosklags. Yes, ma'am, absolutely, not only in
    terms of the materials that the parts are made of but also the
    coatings that we use to protect them from the environment. As
    we go through modification programs on our aircraft and update
    them over time, we use those new materials and those new
    coatings which not only prevent the corrosion in many cases,
    but they also reduce the workload for our technicians that have
    to work on those aircraft.
        But the materials science continues to advance, but it is
    something we pay very close attention to. The difficulty is
    sometimes compounded by the other mission capabilities that we
    try to employ at the same time on those aircraft such as low
    observable coatings. That combination is not always the easiest
    to deal with. So there is a lot of effort going forward, and if
    you would like more details on specific programs, I can get
    that to you.
        Senator Hirono. There may be some nanotechnology that could
    be useful in this area. I know that every time you put a
    coating on, that reduces--that adds to the weight of the plane
    and all of that. So I understand that.
        I would be interested to know who is funding that kind of
    research for the Department of Defense.
        Can you also talk a little bit more about the specific
    improvements that have been implemented at our depots, I assume
    to effect efficiencies, and how long it takes for them to get
    the planes back out? Anyone?
        Admiral Manazir. Ma'am, the specific method that we are
    using now is called ``critical chain project management.'' It
    is a theory of constraints-based profile. The commanding
    officers of the depots have trained or are training their
    artisans, engineers, and supervisors to create a line in the
    depot that understands what the constraint on the airplane
    would be. So whether it is materials, a part, an engineering
    disposition, or some other factor, they understand what the
    constraint is for the airplanes coming through. They understand
    the organization.
        For instance, down at FRC Southeast in Jacksonville,
    Florida, they took a holistic look over the last several
    months, the last year at their system, and they figured out,
    they thought, that they had a capacity in their engineering
    force to run 17 airplanes through at a time. When they did an
    assessment of their engineers, they figured out they only had
    the engineering capacity to put six through. If they had not
    done that analysis, they would continue to be choked by the
    amount of work that goes through the depot.
        So they leaned out the line to bring it down to six, while
    at the same time they are hiring, certifying, and training the
    engineers to bring those through. So what they are going to do
    by the end of this year--they are projected to not only come
    back up to 17, but to double that to 34. That new critical
    chain project management is also being projected to go out to
    FRC Southwest and North Island in Coronado, CA, and they will
    apply that same methodology to double, then triple the output
    that we are currently seeing right now.
        Admiral Grosklags' point about the funding at 83 percent--
    until we get that depot leaned out, the engineers hired, the
    artisans hired, and the parts in place, the funding is not the
    constraint. So once we get that all up, then we will go back up
    to 100 percent funding.
        I hope that answers the question.
        Senator Hirono. So can you give an estimate as to--by using
    this kind of critical project management process, how much more
    efficient we have become?
        Admiral Manazir. The depot will be easily efficient by 200
    percent more, so 100 percent more efficient. We see some
    projections that will take us up to even 300 percent. For
    instance, right now, we are putting 65 airplanes a year through
    that. We forecast in the next couple of years to get to 90
    aircraft through the depot, and we will be out of this current
    near-term shortfall problem by 2018.
        Senator Hirono. That is very commendable. We note that you
    do have a shortage of workers--right--skilled people?
        Admiral Manazir. Yes, ma'am.
        Senator Hirono. What can we do besides getting rid of
    sequester----
        Admiral Manazir. Do not sequester again. I have to join the
    chair and the ranking member to say that the sequestration was
    inherently deleterious to everything we were doing. It
    particularly hit us in the depots where the artisans were told
    to go home because we then furloughed them and they went to
    work somewhere else. So we are trying to recover from that
    labor shortage right now, and they do not exist. It is hard to
    hire them. We have to train them, and then we have to get that
    workforce on the airplanes and start to generate. So that is
    why the CNO [Chief of Naval Operations] testified that about 15
    months--about 13 months from now, we will start to see the
    depot effect because they have hired all the resources and now
    we can see that they are starting to put out those airplanes at
    the rate that we know we can do.
        Senator Hirono. Thank you.
        Senator Wicker. Senator Tillis.
        Senator Tillis. Thank you, Mr. Chair.
        Going back to the discussion about the corrosion, it
    occurred to me if you have got a tactical fighter you said had
    a 30-year life and 8,000 hours, you design for that. So if you
    wanted to have a 50-year life and 12,000 hours, you are going
    to pay the incremental costs for doing that up front which
    reduces the number of craft that are going to be deployed,
    which affects readiness. So you got to set limits.
        But then there is another question. When we have this
    discussion about extending the life of a 30-year-old tactical
    platform, are there not only certain capabilities that you can
    bring that underlying platform up to as compared to, say, an F-
    35? So you are kind of putting a $100 saddle on a $10 horse in
    terms of the new technological platform that you have today. Is
    that a fair way to say it?
        General Davis. It is, sir. First off, as taxpayers, you
    would expect us to extract maximum value out of everything you
    give to us, and we do that. So an airplane that is designed for
    30 years like the F-18 and the Harrier--we are going to fly
    them as long as we possibly can and do good work. But there
    comes a knee in the curve where you can only modify and improve
    to a certain point to include I think actually doing a better
    job with corrosion control inside, teaching our maintenance
    marines and sailors how to do a better job with that. So we
    have kind of re-embraced that.
        But there comes a time out there you have got to embrace
    the technology and move out. I think we are there kind of with
    the V-22 and the F-35 inside the naval service P-8.
        Senator Tillis. I was thinking back when that plane was
    being deployed, I had a Mustang II. It was a dark chapter in
    Ford's history. The Mustangs of today I would much rather want
    to build capabilities and go fast in.
        So that is why I think we get into this discussion because
    of sequestration.
        General Davis. You remember the Mustang III.
        Senator Tillis. It was an upgrade from the Pinto.
        The sequestration mindset I think is getting into a
    discussion that does something that the Commandant says we
    ought not do. We should never get a point where our
    capabilities put our folks into a position of a fair fight. If
    we do not start looking at a way to get--see, one question I
    have for you all--just you all opine as much as you want.
        It seems to me that sequestration--the way that they go
    about it is a way that no business would go about driving
    efficiencies out of your organization. I know we had discussion
    about the worry about how we pay for increased defense
    spending, but I wonder whether the question should be if we
    gave you maximum flexibility to use your resources in the most
    efficient way, how could we--we talked about JSOW's. You found
    by looking at that, having the time to look and optimize your
    organization, you found a weapons system that you did not need
    any more of.
        If we got the distraction of sequestration out of the way
    and we started looking more at strategic sourcing, lean
    execution of processes, it seems to me that a lot of the net
    reductions achieved by sequestration, increases in efficiencies
    could be achieved but in a much more strategic way that gives
    you all the flexibility to do what you do for the highest level
    of readiness, for the lowest cost.
        I mean, if we were to go back and say, you know what, we
    are going to achieve roughly within some range, the ultimate
    bending of the curve in defense spending, but we want you all
    to tell us how to go about allowing you to do that, can you
    think through ways where it is not just spend more, spend more,
    spend more, but spend more smartly? Is there some way that we
    can actually get out of this rut of saying we want to get rid
    of sequestration, but we do not know how to actually budget in
    a way that achieves our budget priorities? Have you all given
    thought to how you can give us advice on how to get out of this
    rut?
        Admiral Manazir. Sir, let me try a couple of things.
        The first one is maybe my two colleagues will but I am not
    going to give you advice, sir. I thank you very much for the
    support of the programs that we do field.
        Back to the capability piece, I would like the opportunity
    to come give you a brief on the capabilities going into the F-
    18 E and F. The airplane we have in there is eye-watering. The
    things that we are putting into that E and F--we are going to
    fly that airplane almost to 2040. We will require the airplane
    to wind with the F-35C. So we do put those modernization points
    in there.
        To your point about sequestration, it does affect our
    readiness. We have talked about that. It also affects our
    decisions to modernize, and so if the funding comes down, I
    cannot make those airplanes relevant.
        Admiral Grosklags testified that the stability of the
    funding is what is most important. General Davis and I are
    focused on a horizon that is out about 2025.
        Unfortunately for us, the threat gets a vote. They are
    expanding across the world. The threats to our forces are going
    up. We have to have the PB 2016 funding at least to address
    with risk all of the missions that we are going to do out
    there.
        But the stability of that funding is very important. As we
    program for the modernization, if you plan for a funding level
    that allows us to program the modernization in and then drop
    that level by 10 percent, fence some programs so the immediate
    effect on the rest of the discretionary budget is 14 percent, I
    have to stop the modernization. That disrupts the vendor base.
    That disrupts my modernization. It disrupts my research. It
    disrupts the----
        Senator Tillis. It ultimately drives up your long-term
    costs.
        Admiral Manazir. It is going to drive up the cost. Yes,
    sir.
        So while we are trying drive down the costs with
    sequestration, you are actually driving up the end cost of the
    things that we are trying to build. If we cannot build them and
    deploy them, we will not win.
        Admiral Grosklags. Yes, sir. I do not want to try to give
    you specifics, but much as we have discussed on a couple of
    topics here, kind of that vicious cycle that spirals us
    downward, I think what you are looking for is kind of that
    virtuous cycle that would enable us to put in place acquisition
    strategies to incentive industry to invest, to enable us to go
    to more of a commercial model where it is appropriate, which
    requires the stability and the predictability that we just
    talked about. There would be a certain virtuous cycle
    associated with that.
        The simple example is our ability to do multiyear
    contracts. I know there is House language that Congressman
    Thornberry has proposed that would ease our ability to put in
    place multiyear contracts where it is appropriate. It is that
    type of virtuous cycle where if we can drive down the cost of a
    particular capability or the capacity associated with it, then
    we have the choice of either buying more of those or investing
    more in readiness or simply not spending those dollars.
        Today, we have so many things on the unfunded list because
    we have been kind of nicked over time--even the BBA agreement
    that was alluded to earlier was a significant decrease from
    what we had proposed in the President's budget that year.
        So what I would propose is we need to get in that virtuous
    cycle as opposed to the death spiral that we kind of find
    ourselves in.
        Senator Tillis. Thank you, Mr. Chair.
        Senator Wicker. Thank you. Senator Tillis, when did you
    drive that Mustang?
        Senator Tillis. 1977 and 1978.
        Senator Wicker. Can we agree that the best thing to come
    out of the early Mustang was ``Mustang Sally''?
        [Laughter.]
        Senator Tillis. That is true. But it was the nicest car in
    my trailer park.
        Senator Wicker. Gentlemen, this has been a very productive
    hearing, and I think we are all agreed, a very impressive
    panel. So we thank you for your testimony and your give and
    take with us, and I think we are much better informed. Thank
    you so much, and we look forward to working with you.
        This hearing is adjourned.
        [Whereupon, at 10:18 a.m., the subcommittee adjourned.]

        [Questions for the record with answers supplied follow:]
                  Questions Submitted by Senator Roger Wicker
                             maritime surveillance
        1. Senator Wicker. Admiral Grosklags, General Davis, and Admiral
    Manazir, I am encouraged by continued investment in technologies that
    support our military strategy in the Asia-Pacific region. As you know,
    the Pacific is incredibly large--over 165 million square kilometers.
    While the vastness of the Pacific region presents a tremendous
    challenge, new technologies have the potential to greatly enhance
    operations in the Pacific. In particular, I am excited about how
    unmanned systems like the MQ-4C Triton, with its unparalleled
    persistence, endurance, and range, can meet the unique challenges of
    the region. How important is Triton to the Pacific strategy, and have
    you explored opportunities to accelerate Triton to meet our growing
    needs in the region?
        Admiral Grosklags and Admiral Manazir. The MQ-4C Triton is a key
    component of the Navy Maritime Patrol Reconnaissance Force. Its
    persistent sensor dwell, combined with networked sensors, will enable
    it to effectively meet Intelligence, Surveillance, and Reconnaissance
    (ISR) requirements in support of the Navy Maritime Strategy. MQ-4C
    Triton will operate from Guam beginning in 2017 where it will be an
    integral part of increasing our presence in the Asia-Pacific region.
    The remaining development and test work combined with the current
    fiscal environment limits our ability to accelerate the MQ-4C program
    without incurring significant risk elsewhere. Timely and predictable
    system delivery is crucial to the Navy's plan for meeting the intent of
    the fiscal year 2011 NDAA. Due to the Navy's Maritime ISR and Targeting
    Transition Plan dependence on timely fielding to limit increased costs
    of sustaining legacy (EP-3E) platforms, continued Congressional support
    for the MQ-4C program is vital to transition success.
        General Davis. The Marine Corps does not participate in the MQ-4C
    Triton program and defers to the Navy on a response to this question.

        2. Senator Wicker. Admiral Grosklags and Admiral Manazir, the
    Navy's maritime surveillance fleet is reaching the end of its service
    life and the Navy is recapitalizing this mission. Given the critical
    importance of maritime surveillance to our national security and our
    economy, we cannot afford a gap in this capability. A big part of the
    recapitalization plan is the MQ-4C Triton unmanned system, which will
    provide persistent surveillance with an advanced maritime radar capable
    of providing detailed surveillance of millions of square miles of
    ocean. Does the Navy have sufficient resources to meet its global
    requirements for maritime surveillance?
        Admiral Grosklags and Manazir. The fiscal year 2016 budget request
    reduces risk in the Navy's Maritime Intelligence, Surveillance,
    Reconnaissance, and Targeting (MISR&T) Transition Plan in both capacity
    and capability. In addition, the Navy continues to work with the Joint
    Staff, Office of the Secretary of Defense, and the Fleet to optimize
    the Navy's MISR&T Transition Plan and comply with the fiscal year 2011
    National Defense Authorization Act. Despite budgetary pressures forcing
    a reduction in procurement quantities of baseline air vehicles, the
    Navy was able to maintain fielding timelines for the future force and
    continue development of future sensors.
                                     ______

                  Questions Submitted by Senator Kelly Ayotte
                                      f-35
        3. Senator Ayotte. Admiral Grosklags, if sequester returns next
    fiscal year, how many F-35s will the Navy and Marine Corps buy and how
    would this impact unit costs?
        Admiral Grosklags. A return to sequestration funding levels in
    fiscal year 2016 would necessitate a review and possible revision of
    the defense strategy. Until such a review is completed, the Department
    cannot determine how a reduction in the overall budget would impact
    specific programs. Even without sequestration, the Department was
    compelled to defer procurement of sixteen F-35C aircraft across the
    2016 Future Years Defense Program due to resource constraints.
    Additional reductions which might be driven by sequestration would
    nominally result in increased unit costs. This increase would likely be
    exacerbated by the potential for sequester driven reductions in USAF
    quantities.

        4. Senator Ayotte. Admiral Grosklags and Admiral Manazir, please
    describe the importance of the F-35C program to the Navy's ability to
    potentially conduct future operations against near-peer adversaries
    with advanced anti-access and area-denial capabilities.
        Admiral Grosklags and Admiral Manazir. The F-35C is absolutely
    essential to the future combat capability of our Carrier Strike Groups
    and Carrier Air Wings. It provides Combatant Commanders with a 5th
    generation strike fighter aircraft that combines low observable
    technology, data fused sensors and advanced weapons capabilities to
    outpace future threats. The F-35C will be employed in a complementary
    manner with the F/A-18E/F, EA-18G and E-2D to provide an ideal balance
    of versatility, lethality, survivability, and capacity that will enable
    access and overmatch of threats in contested environments.

        5. Senator Ayotte. Admiral Manazir, the Navy plans to buy 38 F-35C
    aircraft over the next 5 years. I understand that that represents a
    reduction of 16 aircraft compared to last year's plan of 54 aircraft
    over the same period. Was that reduction purely budget driven or was
    there some other reason?
        Admiral Manazir. The Fiscal Year 2016 budget request delivers a
    balanced budget that adheres to fiscal guidance. Due to fiscal
    constraints, the Navy was compelled to defer procurement of 16 F-35C
    aircraft as a budgetary decision.

        6. Senator Ayotte. Admiral Manazir, when will the F-35C reach full
    operational capability?
        Admiral Manazir. The Navy expects to achieve initial operational
    capability (IOC) in fiscal year 2018 and deploy its first squadron with
    block 3F capability in 2021. The F-35C is projected to reach full
    operational capability (FOC) in 2034. FOC will be achieved when all
    active duty, reserve, training, and support squadrons have received
    their F-35C primary aircraft authorization (PAA) with all required
    logistical, maintenance, and training support.

        7. Senator Ayotte. Admiral Manazir, does the Navy have a shortfall
    in tactical aviation?
        Admiral Manazir. The Navy remains challenged with end of life
    planning for F/A-18A-D aircraft that reach the end of their service
    life before replacement aircraft (F-35B/C) can be fully delivered into
    service. Strike Fighter inventory management risk increases with the
    Fiscal Year 2016 President's budget submission, further increasing the
    gap between supply and the Department's Master Aviation Plan demand.
        Strike fighter inventory management should be viewed in two
    separate and distinct phases. The near term challenge is due to a
    combination of reduced strike fighter aircraft procurement, higher than
    planned TACAIR utilization rates, and F/A-18A-D depot production
    falling short of the 2013 and 2014 required output. Aggressive efforts
    across the Department were instituted in 2014 to improve depot
    productivity and return more aircraft back to service. Aviation depots
    are expected to improve throughput to meet annual production
    requirements by fiscal year 2017 and fully recover by fiscal year 2019,
    at which time the focus will include F/A-18E/F service life extension.
    In the far term, strike fighter inventory management is predominantly
    affected by new aircraft procurement, particularly the F/A-18E/F and F-
    35. COCOM-driven operations and Fleet Response Training Plan (FRTP)
    training and readiness requirements are driving a strike fighter
    utilization rate which currently outpaces procurement.

        8. Senator Ayotte. Admiral Manazir what is the plan to meet the
    Navy's tactical aviation requirement before the F-35C reaches full
    operational capability?
        Admiral Manazir. The Navy's strike fighter inventory management
    strategy requires the sustainment of legacy F/A-18A-D aircraft, the
    procurement and sustainment of the current F/A-18E/F fleet, and
    procurement of the F-35C. The Department carefully monitors inventory
    requirements and projected aircraft availability to meet operational
    demands.
        F/A-18A-D aircraft have been, and will remain operationally
    relevant through upgrades. On-going high flight hour (HFH) inspections,
    repairs and recurring inspections allow continued flight past the
    current flight hour service life limit of 8,000 hours. The current
    Service Life Extension Program (SLEP) efforts will extend the airframe
    life of 150 aircraft to 10,000 hours and will maintain F/A-18A-D
    tactical relevance through their active duty sundown in 2026, and
    reserve sundown in the 2030's.
        The F/A-18E/F will be the predominant aircraft in the Navy's
    carrier air wing strike fighter force through 2035. Sustainment
    includes needed capability upgrades with a focus on completing both
    passive and active kill-chains, which significantly improve the
    survivability and strike capability of the carrier air wing. To meet
    the operational requirements out to 2035, the F/A-18E/F is undergoing a
    Service Life Assessment Program (SLAP) designed to extend the airframe
    service life to 9,000 flight hours. The Service Life Management Plan
    philosophy has been applied to the F/A-18E/F fleet at an earlier point
    in its lifecycle than the F/A-18A-D. This will facilitate optimization
    of Fatigue Life Expended, flight hours, and total landings, thereby
    better aligning aircraft service life with fleet requirements.
        To meet far-term inventory challenges and incorporate advanced
    strike fighter capabilities, the Navy remains fully committed to the F-
    35C. The Fiscal Year 2016 President's budget request supports the
    procurement of low rate initial production (LRIP) aircraft to support
    System Design and Development (SDD), Fleet Replacement Squadron (FRS)
    integration and Developmental and Operational Test and Evaluation. The
    Department's goal is to increase F-35C development and procurement
    funding over the next five years to achieve full rate production.

        9. Senator Ayotte. Admiral Manazir, how many Super Hornets would it
    take to meet the Navy's tactical aviation requirement?
        Admiral Manazir. The Navy requires two to three additional
    squadrons (24-36 aircraft) of Super Hornets to meet the strike fighter
    inventory requirement.
                                      f-18
        10. Senator Ayotte. General Davis and Admiral Manazir, the joint
    prepared statement points out that the F-18 Hornet depot backlog will
    not be resolved until 2019. How has this backlog impacted Navy and
    Marine Corps readiness?
        General Davis. The Department prioritizes and continues to meet
    deployed readiness requirements above all else. However, achieving
    these standards has come at the expense of force training for
    operational squadrons preparing to deploy. This poses risk to our
    future readiness, and impacts our surge capacity through 2019.
        While Marine Corps F/A-18 squadrons are manned and trained to
    maintain readiness levels, the current F/A-18A-D depot throughput
    challenge has reduced the number of aircraft available to fleet
    squadrons. Consequently, the Marine Corps is currently deploying F/A-18
    squadrons with a temporary Flight Line Entitlement of 10 aircraft
    versus the required 12 aircraft, directly reducing their capacity to
    fight and train. Deploying at this reduced capacity allows the ready
    bench of non-deployed squadrons more of the assets they need to train
    and prepare for deployment. The Marine Corps also is fully resourcing
    its FRS with enough in-reporting aircraft to meet its Pilot Throughput
    Requirement (PTR). We are doing this today with no pool of students,
    cutting down on time to train and keeping the fleet as healthy as
    possible. As depot throughput improves, the Marine Corps will return to
    forward deploying 12 aircraft squadrons, regaining warfighting and
    training capacity.
        The compound effect of achieving deployed readiness standards in
    this manner is an overall reduced readiness posture of the non-deployed
    strike fighter-force and over-utilization of available aircraft. This
    process strains the operational fleet of aircraft, leading to greater
    service life consumption across the strike-fighter inventory. Improved
    depot throughput, careful management of aircraft utilization, and more
    utilization of shore based Forward Arming and Refueling Points (FARPs)
    for operational missions will return strike-fighter squadrons to the
    optimum readiness profiles, which in turn will improve non-deployed
    force readiness and surge capacity.
        Admiral Manazir. The Department prioritizes and continues to meet
    deployed readiness requirements set forth in the Fleet Response
    Training Plan (FRTP). However, achieving these standards has come at
    the expense of force training for operational squadrons in the early
    stages of the FRTP and the Fleet Replacement Squadrons responsible for
    aircrew initial and refresher training. This poses risk to our future
    readiness and impacts our surge capacity through 2019.
        The Navy manages risk in readiness through the FRTP, which is based
    on a structure of tiered readiness that prepares units for operational
    deployment. To support more intensive aircraft maintenance efforts and
    reduced aircrew training requirements during the initial FRTP phases,
    operational squadrons are assigned and operate fewer aircraft than
    required for deployment. With an increased number of strike-fighter
    aircraft in an out-of-reporting status for planned or unplanned depot
    level maintenance, aircraft available for these squadrons are below
    their prescribed entitlements. Consequently, their readiness levels are
    degraded for lack of training opportunities due to insufficient
    aircraft. However, as each strike-fighter squadron approaches the
    intermediate and advanced phases of the FRTP, they receive the full
    complement of entitled aircraft and complete current and missed
    training events required to achieve deployed readiness standards.
        The compound effect of achieving deployed readiness standards in
    this manner is an overall reduced readiness posture of the non-deployed
    strike fighter-force. Additionally, this process strains the
    operational fleet of aircraft through overutilization in the advanced
    phases of the FRTP, which leads to greater service life consumption
    across the strike-fighter inventory. Improved depot throughput capacity
    and careful management of aircraft utilization will return strike-
    fighter squadrons to the optimum readiness profiles across the FRTP,
    which in turn will improve non-deployed force readiness and surge
    capacity.

        11. Senator Ayotte. General Davis and Admiral Manazir, what can we
    do to solve this depot backlog sooner?
        General Davis. The Fiscal Year 2016 President's Budget request
    provides funding to align F/A-18 depot throughput to projected
    capacity.
        In 2014, Navy leadership incorporated a multifaceted strategy to
    improve F/A-18 depot efficiency and throughput. The current constraints
    to the Hornet line are both manpower and material related. The strategy
    addresses these issues with an aggressive hiring and training plan for
    artisans and engineers, kitting of materials for the high flight hour
    (HFH) events based on common repair requirements, and the
    implementation of an enterprise-wide improvement to production flow
    using a theory of constraints method called critical chain project
    management. Additionally, the Navy has collaborated with Boeing in
    identifying several areas to improve overall depot throughput, such as
    employing Boeing Engineering Support and incorporating the use of its
    Cecil Field facility. The strategy is proving successful as depot
    production levels are improving. With the requested funding, and under
    this plan, the Department anticipates continued improvement in depot
    throughput to meet annual production requirements by fiscal year 2017
    and full recovery by fiscal year 2019.
        A return to sequestration in fiscal year 2016 is a recurring
    concern. The Department requires a stable budget to meet these
    objectives. Sequestration and the compound effects of the 2013
    government shutdown drove manning shortfalls for both artisans and
    engineers and hampered the Navy's ability to respond to unplanned work
    found during HFH inspections. Any further reductions in the depot
    maintenance, engineering and contractor support budgets below requested
    levels will impede the depot throughput improvement strategy. A return
    to sequestration would have a compounding effect that will further
    increase risk in our strike fighter inventory management strategy and
    reduce the availability of warfighting assets.
        Admiral Manazir. The Fiscal Year 2016 President's Budget request
    provides funding to align F/A-18A-F depot throughput to projected
    capacity.
        In 2014, Navy leadership incorporated a multifaceted strategy to
    improve F/A-18 depot efficiency and throughput. The current constraints
    to the Hornet line are both manpower and material related. The strategy
    addresses these issues with an aggressive hiring and training plan for
    artisans and engineers, kitting of materials for the high flight hour
    (HFH) events based on common repair requirements, and the
    implementation of an enterprise-wide improvement to production flow
    using a theory of constraints method called critical chain project
    management. Additionally, the Navy has collaborated with Boeing in
    identifying several areas to improve overall depot throughput, such as
    employing Boeing Engineering Support and incorporating Super Hornet
    modifications at its Cecil Field facility. The strategy is proving
    successful as depot production levels are improving. With the requested
    funding, and under this plan, the Department anticipates continued
    improvement in depot throughput to meet annual production requirements
    by fiscal year 2017 and full recovery by fiscal year 2019.
        In 2014 Navy leadership incorporated a multifaceted strategy to
    improve F/A-18 depot efficiency and throughput capacity. The strategy
    is proving successful and the Naval Aviation Enterprise will reassess
    the controls. This strategy includes an aggressive hiring plan for
    artisans and engineers, kitting of materials for the HFH events, which
    previously resulted in unplanned repairs and the implementation of an
    enterprise wide improvement to production flow using critical chain
    theory tools. Additionally, the Navy has collaborated with Boeing and
    identified several areas to improve overall depot throughput, such as
    employing Boeing Engineering Support and incorporating Super Hornets
    modifications at its Cecil Field facility. With the requested funding,
    and under this plan, the Department anticipates an improvement in depot
    production by fiscal year 2017 and a positive contribution to the
    strike fighter inventory calculus by fiscal year 2019.
        A return to sequestration in fiscal year 2016 is a recurring
    concern. The Department requires a stable budget to meet these
    objectives. Sequestration and the compound effects of the 2013
    government shutdown drove manning shortfalls for both artisans and
    engineers and hampered the Navy's ability to respond to unplanned work
    found during HFH inspections. Any further reductions in the depot
    maintenance, engineering and contractor support budgets below requested
    levels will impede the depot throughput improvement strategy. Moreover,
    a return to sequestration will affect recent initiatives including the
    F/A-18E/F service life assessment and extension programs (SLAP/SLEP).
    Current efforts for Super Hornet SLAP/SLEP include fatigue life
    analysis, stress predictions, and inspection and modification
    development. Ongoing efforts will inform future work and ensure
    material kits are developed to better support life extension efforts.
    However, these analyses are required prior to the first aircraft
    reaching its 6,000 hour limit, expected in CY2017. A return to
    sequestration would have a compounding effect that will further
    increase risk in our strike fighter inventory management strategy and
    reduce the availability of warfighting assets.
        The Department requires a stable budget to realize the full
    benefits of our strategy. Sequestration and the compound effects of the
    2013 government shutdown drove shortfalls in both artisans and
    engineers, and hampered the Navy's ability to respond to unplanned work
    found during HFH inspections. A recurring concern is the impact of a
    return to sequestration funding levels in fiscal year 2016. Any further
    reductions in the depot maintenance, engineering and contractor support
    budgets below requested levels will hamper the depot throughput
    improvement strategy. Moreover, a return to sequestration will affect
    recent initiatives including the F/A-18E/F SLAP/SLEP. Current efforts
    for Super Hornet SLAP/SLEP include fatigue life analysis, hot spot
    predictions, and inspection and modification development. These ongoing
    efforts will inform future work and ensure material kits are developed
    to better support the life extension efforts. Analysis is needed prior
    to the first aircraft reaching its 6,000 hour limit, expected in
    CY2017. A return to sequestration funding levels would disrupt the
    ground work of the analysis and delay any efficiencies gained. This
    compound effect will further increase risk in our strike fighter
    inventory management strategy and reduce the availability of
    warfighting assets.
                            usmc harrier replacement
        12. Senator Ayotte. General Davis, in September 2012, six Harriers
    were destroyed in Helmand Province, Afghanistan. Has the Marine Corps
    replaced those six jets?
        General Davis. No, the Marine Corps has not replaced these six
    aircraft. We have identified this shortfall on previous Unfunded
    Priority Lists (UPL) and the Opportunity, Growth, and Security
    Initiative (OGSI) list in March of fiscal year 2014. Most recently, the
    Marine Corps has again included the six jets on this year's UPL. The
    request for six F-35Bs represents the direct replacement of the 6 AV-8B
    Harrier tactical aircraft lost due to enemy action at FOB Bastion in
    Afghanistan. To date, no funding has been received. However, the HASC
    has marked this program + $974.9 Million (fiscal year 2016) as of the
    full committee mark up.

        13. Senator Ayotte. General Davis, if the Marine Corps had the
    funding, would it replace those jets?
        General Davis. Unequivocally, yes.

        14. Senator Ayotte. General Davis, what would replace the Harriers?
        General Davis. The AV-8B is no longer in production, so the Marine
    Corps is unable to procure additional Harrier airframes. The Marine
    Corps is currently in the process of transitioning all of its TACAIR
    fleet, to include F/A-18A-D, EA-6B and the AV-8B to the F-35B STOVL
    Joint Strike Fighter. If given the requested funds, the Marine Corps
    would replace the lost AV-8Bs with F-35Bs.

        15. Senator Ayotte. General Davis, how much would the replacements
    cost?
        General Davis. The current replacement cost for the AV-8B loss with
    six F-35Bs is $1.050B for fiscal year 2016.

        16. Senator Ayotte. General Davis, would it be better to replace
    one or two jets than to replace none at all?
        General Davis. Yes, every replacement jet that we can procure will
    help aid the Marine Corps in transitioning as quickly as possible to
    the F-35 and allow us to diminish our flight line gap. Given that the
    AV-8B is out of production and the procurement plan to replace all of
    the tactical jets in the Marine Corps with the F-35B, it is critical
    that we replace the six AV-8Bs that were lost with six F-35Bs. When the
    Marine Corps lost those six AV-8Bs, we had to stand down a fleet
    Harrier squadron. Procuring the six additional F-35Bs would allow us to
    stand up another F-35B squadron almost a year earlier than is currently
    scheduled, directly reducing risk we have assumed in our legacy
    aircraft.
                           health of industrial base
        17. Senator Ayotte. Admiral Grosklags, please describe the health
    of the industrial base that supports Navy and Marine Corps aviation
    programs.
        Admiral Grosklags. The industrial base that supports the Navy and
    Marine Corps aviation programs is moderately healthy. There is
    substantial overlap between military and commercial suppliers in the
    aerospace manufacturing industry which ameliorates the impacts of
    declining defense spending in the sector. The commercial sector has
    benefitted from the decline in oil prices which has allowed commercial
    customers to reallocate funding from fuel to the replacement of aging
    aircraft. As such, a substantial portion of the aerospace manufacturing
    supply chain is experiencing growth, even as defense aviation spending
    declines. However the Department of the Navy does have significant
    concerns relative to sustaining critical design capabilities and unique
    skill sets associated with the design and development of tactical
    aircraft.
        At the prime contractor level for Navy and Marine Corps aviation
    programs, there continues to be a relatively small number of companies
    with the requisite expertise to develop complex, military-unique
    aircraft and weapons systems. In order to drive down ownership costs,
    the trend has been to buy fewer different types of aircraft and weapons
    by making each more flexible and capable. The result is fewer but
    larger programs which reduce competitive opportunities and place
    unsuccessful bidders at greater risk of not surviving to compete in the
    future. Additionally, there is a significant risk of losing design
    teams due to fewer programs. As a result, it is likely that
    significantly less experienced engineers and scientists will tackle
    future technical challenges, leading to longer and more expensive
    development and initial production costs. As the pool of potential
    prime contractors and subcontractors shrinks, the environment for
    innovation and competition is similarly diminished. Although the Navy
    and Marine Corps currently draw from an adequate aviation industrial
    base, the limited number of viable prime contractors and military-
    unique suppliers is an area of concern.

        18. Senator Ayotte. Admiral Grosklags, how would a full return of
    defense sequestration next fiscal year impact the health of the
    industrial base that supports Navy and Marine Corps aviation programs?
        Admiral Grosklags. A return to sequestration funding levels in
    fiscal year 2016 would necessitate a review and possible revision of
    the defense strategy. Until such a review is completed, the Department
    cannot determine how a reduction in the overall budget would be
    apportioned across programs. However, it can be assumed that a number
    of budget lines will be ``protected'' from funding reductions--e.g.
    manpower accounts and strategic deterrence programs. The ``protection''
    of these budget lines will necessitate a greater reduction be
    apportioned to all other programs. The final size of the required
    funding reductions will be combined with results of the strategy review
    to determine which aviation programs will be reduced, retained
    unaffected, or terminated. Industrial base health will be one of many
    considerations as we work through this balancing of funding and
    strategy.
        It must also be recognized that simply the outstanding potential of
    a full return of defense sequestration has a negative impact on the
    health of the industrial base. The uncertainty directly impacts their
    ability to plan and execute investment strategies, execute to the most
    efficient operating model(s), and raise capital--all contributing to a
    less healthy industrial base and increased costs to the Department.
                             joint standoff weapon
        19. Senator Ayotte. Admiral Manazir, in the President's fiscal year
    2015 budget, the Navy projected buying 4,632 more Joint Standoff
    Weapons (JSOWs) over the life of the program, including 200 in fiscal
    year 2016. In the President's fiscal year 2016 budget, the program was
    terminated. What has changed to make those JSOWs no longer necessary to
    the Navy's requirements?
        Admiral Manazir. [Deleted.]

        20. Senator Ayotte. Admiral Manazir, what is the plan to replace
    that lost capability?
        Admiral Manazir. [Deleted.]

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