    [Senate Hearing 114-219]
    [From the U.S. Government Publishing Office]

           DEPARTMENT OF DEFENSE APPROPRIATIONS FOR FISCAL YEAR 2016

                                  ----------

                            WEDNESDAY, MARCH 4, 2015

                                           U.S. Senate,
               Subcommittee of the Committee on Appropriations,
                                                        Washington, DC.
        The subcommittee met at 10:32 a.m., in room SD-192, Dirksen
    Senate Office Building, Hon. Thad Cochran (chairman) presiding.
        Present: Senators Cochran, Shelby, Collins, Blunt, Reed,
    and Schatz.

                             DEPARTMENT OF DEFENSE

                             Department of the Navy

                            Office of the Secretary

    STATEMENT OF HON. RAY MABUS, SECRETARY

                   opening statement of senator thad cochran

        Senator Cochran. The committee will please come to order.
    We are delighted to be able to welcome a distinguished panel of
    witnesses to discuss the fiscal year 2016 budget submission of
    the Navy and Marine Corps.
        Our hearing will review the budget requests that have been
    submitted to the Congress. And we are also very pleased to
    personally welcome each of you distinguished leaders in our
    military forces here today: the Honorable Ray Mabus, Secretary
    of the Navy; Admiral Jonathan Greenert, Chief of Naval
    Operations; and General Joseph Dunford, Commandant of the
    Marine Corps.
        For fiscal year 2016, the President's budget is requesting
    $161 billion in base funding to support the Navy and Marine
    Corps. The request is $11 billion higher than the current level
    of funding.
        The request also includes $7 billion to support ongoing
    overseas contingency operations. These funds support the
    forward deployment of sailors and marines throughout the world
    and the important work done every day to ensure our Nation's
    security.
        This committee recognizes the uncertainty of the current
    fiscal environment on the Navy and Marine Corps. If the
    Department of Defense has to live with the budget caps in
    fiscal year 2016, the Navy has already indicated that it will
    not be able to support the current defense strategy.
        We appreciate the complexity of building the fiscal year
    2016 budget and look forward to any comments this distinguished
    panel of witnesses will make in regard to the health and well-
    being of our services, as well as the work and dedication put
    to the challenge of protecting our national security interests
    by all of the men and women under your command.
        Our committee looks forward to working with each of you
    closely as we work our way through the fiscal year. We are
    confident this leadership, and the men and women who serve in
    our Armed Forces, will protect the security interests of our
    country.
        Mr. Secretary, the floor is yours, and we welcome you to
    make any comments that you see fit.

                      summary statement of hon. ray mabus

        Secretary Mabus. Thank you, Mr. Chairman, my home State
    Senator, and members of the committee. Thank you so much for
    this opportunity to discuss the Department of the Navy.
        Here, with Chief of Naval Operations John Greenert,
    Commandant of the Marine Corps Joe Dunford, I have the great
    privilege of representing the sailors and marines, the
    civilians who support them, and all of their families.
        This is Admiral Greenert's last posture testimony before
    this committee. He has been a steady hand on the helm of the
    U.S. Navy through the past 4 years of international instability
    and budget turbulence. Every day, his judgment, his advice, his
    counsel, have been critical. It is an honor to serve with him,
    and he will leave a lasting legacy.
        Today, our security interests face an increasing array of
    threats and demands, while our budgetary situation grows more
    challenging and complex. But it is clear that the Navy and
    Marine Corps team offer the best value to advance both our
    global security and our economic interests.
        Uniquely, the Navy and Marine Corps provide presence around
    the world, around the clock. We are the Nation's first line of
    defense, ready for anything that might come over the horizon.
    Presence means we respond faster; we stay on station longer; we
    carry everything we need with us; and we do whatever missions
    are assigned by our Nation's leaders without needing anybody
    else's permission.
        We have always known that America's success depends on an
    exceptional Navy and Marine Corps. Article I of our
    Constitution authorizes you in Congress to raise an army when
    needed, but it directs you to provide and maintain a navy.
        From the first six frigates to our growing fleet today,
    from Tripoli to Afghanistan, sailors and marines have proven
    the Founder's wisdom. American leaders across the political
    spectrum have understood the vital significance of seapower.
        We are truly America's away team. We deploy just as much in
    peace as we do in war. And our role in the last 70 years in
    securing sea lanes and freedom of commerce has boosted our own
    and the world's economy.
        Nearly half of the world's population lives within 100
    miles of the sea. Ninety percent of global trade goes by sea,
    and 90 percent of all voice and data go under the sea. The
    shelves of our stores are stocked through just-in-time delivery
    with products from all over the globe, and some 38 million jobs
    in America are directly linked to seaborne international trade.
        For seven decades, the Navy and Marine Corps have been the
    primary protector of this international system that has created
    unprecedented economic growth. And while we have led this
    effort, we have worked with allies and partners, increasing
    interoperability, establishing relationships that also help
    keep the peace. That is why the National Defense Strategy that
    we have today is so clearly focused on the maritime domain and
    requires investment in maritime assets.
        For the past few years, the Department of the Navy has
    attempted to minimize the impact of an uncertain budgetary
    environment marked by numerous continuing resolutions,
    imposition of sequester-level funding, and the threat of the
    return of sequestration. This environment has made it more
    difficult, but even more critical, to set priorities and make
    hard choices.
        The presence that our Navy and Marine Corps uniquely
    delivers is built on four foundations: people, platforms,
    power, and partnerships. These are the keys to the capability,
    capacity, and success of our naval services, and they remain my
    top priorities.
        Our people, our sailors and marines, are well-known for
    their ability to exercise independent judgment and the
    flexibility to adapt to changing circumstances or environments.
    We remain committed to providing our sailors and marines and
    our civilians with the training and support they need to
    maintain our naval presence. And we include in this their
    dedicated families and our wounded.
        We have launched a comprehensive approach to ensure it's
    the world's healthiest, fittest, most-resilient, and best-
    educated force truly representing America's diversity. We
    continue to aggressively combat sexual assault, abuse, ethical
    failings, and similar challenges.
        But our people, as good as they are, can't do their job
    without platforms. Providing presence, being where we are
    needed, when we are needed, requires ships, submarines,
    aircraft systems, equipment. Quantity has a quality all its
    own. And the main thing that means is that we have to have a
    properly sized and balanced fleet.
        On September 11, 2001, the Navy's battle force stood at 316
    ships. By 2008, our fleet had declined to 278 ships. Our focus
    on two ground wars only partly explains this decline.
        In the 5 years before I took this job, the Navy contracted
    for only 27 ships, not enough to stop the slide in the size of
    the fleet. In the first 5 years I have been in this job, we
    have contracted for 70 ships, halting and reversing the
    decline. And by the end of this decade, we will be at 304
    ships.
        We have accomplished this with a direct and fundamental
    business approach: increasing competition; relying more on
    fixed-price contracts; and thanks to this committee and
    Congress's help, multiyear and block buys.
        But budget instability and uncertainty seriously erode our
    ability to grow our fleet, manage our resources, and maintain
    the industrial base.
        In the face of this budgetary uncertainty, cutting ships is
    the most damaging, dangerous, and least reversible course of
    action, which is why I am committed to preserving shipbuilding.
        Fueling those ships, aircraft, vehicles of our Navy and
    Marine Corps is a vital operational concern and enables the
    global presence necessary to keep the Nation secure. That is
    why the Navy has a history of innovation, particularly in
    energy, moving from sail to steam to oil to pioneering nuclear.
    In all cases, we believe our national security interests and
    the ability of the Navy and Marine Corps to meet its missions
    must be enhanced by increasing our energy diversity and
    efficiency.
        And finally, our ability to maintain presence and advance
    global security will also be augmented through partnerships.
    Cooperation makes us more effective.
        Again and again, naval forces have proven themselves the
    most immediate, the most capable, and the most adaptable option
    when a crisis develops. Overall, the fiscal year 2016
    President's budget balances current readiness needed to execute
    our assigned missions while sustaining a highly capable fleet.
        That tough budget climate, however, demands our most
    rigorous examination of every dollar we spend. And we must
    continue our aggressive efforts to cut unnecessary costs in
    every program, and shift resources from tail to tooth.

                               prepared statement

        I want to thank this committee for all that you have done
    to ensure that the Navy and Marine Corps remain the preeminent
    fighting force in the world. When America has called, the Navy
    and Marine Corps have always answered.
        I look forward to answering your questions and working
    along with you, the Commandant, and the CNO (Chief of Naval
    Operations) to maintain our great Navy and Marine Corps.
        Thank you, Mr. Chairman.
        [The statement follows:]
                      Prepared Statement of Hon. Ray Mabus
                 maritime presence is critical in today's world
        Chairman Cochran and Vice Chairman Durbin, members of the
    Committee, thank you for affording this opportunity to discuss
    readiness and posture of the Department of the Navy. With Chief of
    Naval Operations Jonathan Greenert and Commandant of the Marine Corps
    Joseph Dunford, I have the great privilege of representing the Sailors
    and Marines who serve our Nation around the world, the civilians who
    support them and all of their families.
        I cannot let it pass without noting that this will be Admiral
    Greenert's last posture testimony before this committee. He has been a
    steady hand on the helm for the U.S. Navy through the past 4 years of
    international instability and budget turbulence. Every day his
    judgment, his advice and his counsel have been critical. He has been a
    great CNO, and it has been an honor to serve with him. He will leave an
    enduring legacy of having advanced the interests and capabilities of
    our Navy and our Department, and I know this committee and our country
    want to share in offering our heartfelt thanks.
        This statement, together with those provided by General Dunford and
    Admiral Greenert, presents to you and to the American people, an
    overview of the Department of the Navy, and highlights our priorities
    as we move forward with the fiscal year 2016 budget process. As the
    Secretary of the Navy, I am responsible for recruiting, training, and
    equipping the almost 900,000 Sailors, Marines, and civilians who spend
    every day working to defend the American people and our national
    interests.
        This opportunity to review our current posture comes at a
    particularly critical juncture in our Nation's history. Our national
    security interests face an increasing array of threats and demands
    around the globe, even as our fiscal and budgetary situation grows more
    challenging. However, this is an opportune moment as well, as I firmly
    believe the threats and demands are best met with a strong and
    comprehensive maritime response. Similarly, I believe naval assets
    offer not only the best value to preserve our national security by
    advancing our global interests, but also the best value in supporting
    our own and the world's economy to help meet our fiscal challenges. The
    rationale for that belief is as simple as it is enduring.
                             the value of presence
        Uniquely, the United States Navy and the United States Marine Corps
    provide presence around the globe, around the clock. We are the
    Nation's first line of defense, ready for any challenge that might come
    over the horizon. Presence means we respond faster, we remain on
    station longer, we carry everything we need with us, and we carry out
    the missions assigned by our national leaders without needing anyone
    else's permission.
        America's leadership role in the world is due in large part to our
    Nation's sea services capability and capacity to ensure stability,
    build on our relationships with allies and partners, deter adversaries,
    prevent wars, and provide our Nation's leaders with options in times of
    crisis. And, should those measures fail, the combat power necessary to
    fight and win in any sort of conflict. As America's away team,
    performing most often far from home, the operational tempo of the Navy
    and Marine Corps are--unlike our sister services--little different in
    times of peace or in times of conflict. There are no permanent
    homecomings for Sailors and Marines because we are never a garrison
    force.
        Born a maritime nation, we have known throughout our 239 years that
    for America to succeed, we must have an exceptional Navy and Marine
    Corps. Thomas Paine famously declared in Common Sense in 1776 that
    ``the cause of America is in a great measure the cause of all
    mankind.'' He was equally adamant that the defense of liberty required
    a capable naval force. More than just physical security and defense
    from European powers, Paine drew direct connections between the Navy
    and the economic success of the American experiment.
        Our Nation's founders, whether northern merchants and lawyers like
    John Adams or southern planters like Thomas Jefferson, also considered
    a Navy critical to our Nation's success. Article One of our
    Constitution grants Congress the power to ``raise'' an Army when
    needed, but directs Congress to ``provide and maintain a Navy.'' Over
    the past two centuries, American leaders from across the political
    spectrum have hewed to that Constitutional direction and have, in a
    nonpartisan fashion, promoted the vital significance of sea power. And
    over the past two centuries, from Tripoli to Iwo Jima to Tripoli, from
    the first six frigates to the Great White Fleet to the great fleets of
    World War II, our Navy and Marine Corps have protected and advanced
    American interests, stability and freedom around the world.
        Today, the value and importance of our naval assets to security and
    stability here at home and around the world has never been greater.
    Nearly half the world's population lives less than 60 miles from the
    sea. With ninety percent of global trade carried by sea, even those who
    live in landlocked States are dependent on the world's oceans. In these
    days of an Internet-connected world, 95 percent of all the voice and
    data goes under the ocean through cables, including the data keeping
    the world's financial system running.
        We live in an age of globalization and worldwide trade. The shelves
    of stores of every variety are stocked through ``just in time''
    delivery with products from all over the globe. Estimates show that a
    single major port facility in the U.S. impacts more than a million
    American jobs and contributes about a billion dollars a day to our
    Nation's economic productivity. Overall, some 38 million American jobs
    are directly linked to seaborne international trade.
        The security and stability of the international system of trade and
    finance is tied irrevocably to the free movement of goods and data
    across and under the sea, and is more than just a military concern. It
    impacts potentially every American in the prices we pay for goods and
    services and in the very availability of those goods and services.
    While it is far away and out of sight to most Americans, our naval
    presence around the world isn't a theoretical construct.
        For seven decades, the United States Navy and Marine Corps have
    been the primary protector of this international system. There is a
    sound basis in the proposition that rising international prosperity is
    directly linked to the United States Navy. We have kept the sea-lanes
    open. We have kept freedom of navigation open for anybody engaged in
    peaceful and legitimate trade. As the President has said, we have
    ``been the anchor of global security.''
        We benefit from this enormously economically, but we also benefit
    from the way that shared economic success helps to limit conflict and
    war. Around the world, high unemployment, stagnant economies, financial
    struggles often lead to social disorder, political unrest, upheaval,
    and outright conflict. Maritime instability contributes to these
    problems, stoking the fires- as can increasing competition for scarce
    resources. By helping to secure the world's maritime commons, by
    providing a calming presence, and by responding to crises early to
    limit their escalation and enhance diplomatic opportunities, the
    ability of the U.S. Navy and Marine Corps to be where it matters when
    it matters is vital to international stability. That is why our
    national defense strategy is so clearly focused on the maritime domain
    and requires investment in maritime assets.
                       around the globe, around the clock
        The best illustration of the extent and impact of the presence
    provided by our Nation's sea services can be seen in just a single day
    of operations. I've chosen July 26th not because it was especially
    important, but because it was reasonably typical. On that day, I was on
    a trip around the world, visiting Sailors and Marines and meeting with
    some of our international partners. In my nearly 6 years as Secretary,
    I've traveled to 131 countries and territories and traveled nearly one
    million air miles. I believe I can do my job better by actually seeing
    and talking with the men and women who serve our Nation where they are
    serving, and by meeting face-to-face with representatives of other
    countries, and not just sitting behind a desk in Washington.
        My trip last July began in Hawaii, observing activities and
    operations in the world's largest maritime exercise, Rim of the Pacific
    (RIMPAC), which included the navies of 22 Nations, including allies
    from the region, like Japan and Australia and South Korea, but also
    valued NATO allies like Norway, which sent a warship all the way from
    the Baltic Sea to join the exercises. For the first time it also
    involved ships from the People's Republic of China's Navy. During the
    exercise, these diverse forces worked together on everything from
    search and rescue and humanitarian missions to practicing counter-
    piracy tactics and maritime security missions.
        As I flew onward to Tokyo to meet with Japanese leaders, an annual
    exercise, MALABAR, was just beginning in the Indian Ocean. This
    bilateral U.S.-Indian naval exercise, which has grown in scope and
    complexity since its first iteration, has fostered mutual understanding
    with our Indian counterparts and enhanced our ability to operate with
    one another in a wide range of missions. This year, the Maritime Self-
    Defense Force from Japan joined the exercise in an important
    demonstration of multilateral cooperation between Pacific and Indian
    Ocean nations. The relationship between the nations of the Pacific and
    the Indian Oceans will continue to be critical in these important
    maritime regions.
        On the same day, in Afghanistan, our Marines were increasing
    training of Afghan security forces, working toward turning over
    operational responsibilities to them, as the Marines reduced their
    direct combat mission. On that day, we had more than 5,000 Marines and
    Sailors in the country, patrolling, training, and working with our
    Afghan partners and NATO allies.
        At the same time, our Marine Corps Black Sea Rotational Force was
    involved in PLATINUM LION, a series of exercises with our Romanian,
    Bulgarian, and Serbian partners, taking place in Bulgaria. Working with
    these NATO allies and friends from Eastern Europe, this exercise is an
    important annual event in the Black Sea region to build the capacity
    and capability of our partners and to promote peace and stability in an
    area that has been in turmoil for the past several years. Our Marine
    Corps Black Sea Rotational Force regularly deploys throughout Europe,
    training with other forces, monitoring security developments, and
    enhancing our ability to operate with our partners and allies in future
    contingencies.
        On July 26 the U.S. Embassy in Tripoli was evacuated as the
    fighting in Libya intensified and the State Department decided U.S.
    personnel were no longer safe at the Mission. The Marines of the
    Special Purpose Marine Air Ground Task Force-Crisis Response, in
    support of U.S. Africa Command, helped coordinate the evacuation and
    escorted the vehicles that carried our diplomatic and military
    personnel to safety in Tunisia. This kind of operation, reacting to
    threats and problems as they develop, is the very reason our Navy and
    Marine Corps are forward deployed, and must be forward deployed to
    effectively give our leaders options.
        On that day about half of our Navy's ships and submarines were at
    sea, with 99 of our ships forward deployed and another 41 training near
    our shores. Tens of thousands of Sailors and 36,000 Marines were away
    from their homes, far from friends and family, forward deployed around
    the world, serving in both combat and cooperation missions.
        That was just one day last July. Each of these exercises on the
    world's oceans, training events, security cooperation engagements with
    friends and allies, combat operations in Afghanistan and contingency
    operations in North Africa, continued to build and strengthen our
    partnerships and alliances to help protect Americans and secure the
    global system.
        For 365 days per year, the Navy and Marine Corps operate across the
    planet. When strikes against ISIL targets in Iraq and Syria were
    ordered, Navy ships and aircraft were quickly in range and launched
    operations. In fact, for the first 54 days, FA-18s off USS George H.W.
    Bush were the lone strike component. When the President decided to
    employ military assets to support the fight against Ebola in West
    Africa, V-22s and Marines from our Special Purpose Marine Air Ground
    Task Force-Crisis Response were on the ground within hours to provide
    logistical support to the medical responders.
        Our Nation's Defense Strategic Guidance is clearly a maritime-
    centric strategy focused on the Asia Pacific, on the Arabian Gulf, on
    building partnerships, all while maintaining our presence around the
    globe. To fulfill our role in this strategy the Navy and Marine Corps
    face daily demands ranging from humanitarian assistance and disaster
    relief, to protecting our embassies, to working with scores of partners
    and allies, to dealing with multiple asymmetric threats and potential
    conflicts. The Navy and Marine Corps meet these demands, and many more,
    using the same people and the same platforms and equipment
    demonstrating the versatility and flexibility that is the hallmark of
    this force.
        For the past few years we at the Department of the Navy have
    attempted to minimize the impact of an uncertain budgetary environment,
    marked by numerous continuing resolutions, the imposition of sequester-
    level funding and the threat of the return of sequestration. That
    environment has made it more difficult, but even more critical, to set
    priorities to make hard choices and to find opportunities to improve
    our stewardship of taxpayer dollars.
        Almost 6 years ago, when I was preparing for my confirmation
    hearing to be Secretary and began closely examining the challenges our
    Navy and Marine Corps faced, it became clear to me there are four areas
    that demand our attention in order to provide and maintain the presence
    our Navy and Marine Corps uniquely deliver. Those four areas are
    People, Platforms, Power and Partnerships. Those have been, and
    continue to be, the key factors in assuring the capability, capacity
    and success of our naval services, and that is why they have been, and
    will remain, my top priorities.
    People--Our True Advantage
        It is one of the great maxims of naval history that Sailors and
    Marines are the sea services' greatest advantage and most important
    asset. In the U.S. Navy and Marine Corps, we have the best people in
    the world. Our Sailors and Marines are well known for the ability to
    exercise independent judgment, to flexibly adapt to changing
    circumstances or environments that were unanticipated at the start of a
    deployment, but for which their training has fully prepared them.
    Perhaps less well known is how far down the chain of command we devolve
    critical responsibility. Aboard USS Ronald Reagan in the weeks after
    the earthquake and tsunami that ravaged Japan, I was surrounded by flag
    officers, but the briefing on relief operations I received came from a
    Third Class Petty Officer and a Lieutenant Junior Grade because they
    had been instrumental not just in executing, but also in designing, the
    effort.
        Providing our Sailors, Marines and civilian workforce the training
    to deal with the uncertainties they will certainly face and providing
    the support that they need to do their jobs is one of our most
    important responsibilities. This also extends to helping their
    dedicated families and ensuring we support our wounded or injured
    veterans.
        Three years ago, we introduced the 21st Century Sailor and Marine
    Initiative, to provide a more coordinated and comprehensive approach to
    assuring we have the healthiest, fittest, most resilient, and best
    educated force in the world. The goal is to help our Sailors and
    Marines maximize their personal and professional readiness, and to
    assist them and their families with the mental, physical and emotional
    challenges of military service. It eliminated the stovepipes that
    existed between many of the programs designed to support our people and
    helps us address issues like suicide, sexual assault, and alcohol
    related incidents in a comprehensive way that protects our Sailors and
    Marines and makes them stronger. A fleet full of successful Sailors
    will ensure a successful Navy, and a force full of successful Marines
    will ensure a successful Marine Corps.
        We are looking to expand the initiative by exploring new ways to
    improve the fitness of our force. We are reassessing our physical
    fitness requirements to make them more relevant to warfighting and to
    instill a ``culture of fitness'' instead of just training for a
    physical fitness test. This means reviewing nutritional standards,
    making efforts to reduce stress, and improving healthcare and support
    networks to deal with issues like suicide and abuse. We are also
    working hard across these areas to curb the all-too-common factor of
    alcohol-related incidents, which can end careers and, tragically,
    sometimes lives. Available data shows that the number of these damaging
    incidents has trended downward. To ensure we maintain that trend, we
    are using media and education campaigns, directed actions against the
    irresponsible use of alcohol like continuing to place reasonable limits
    on where and when alcohol is sold on base, and the continued use of the
    alcohol detection program implemented in 2013.
        Sexual assault and harassment remains a challenge that we are
    responding to aggressively. In the past several years we have taken
    numerous steps to address it. These include widespread training like
    our bystander intervention program, increased use of interactive means,
    victim support programs like the Victim's Legal Counsel, and new
    investigative resources. Combined with much more direct leadership
    engagement, evidence suggests that these efforts are improving the
    confidence of Sailors and Marines in the system and their belief that
    reports will be taken seriously. Because of this increased trust in
    their chain of command, we have seen survivors coming forward in larger
    numbers and also, increasingly, reporting incidents that took place
    earlier than the year it is being reported. This large increase in
    reports, especially since 2012 when many programs began to mature, is
    what we anticipated seeing if our efforts were successful, since they
    would represent increased confidence in the system. We are turning more
    attention to the risk of retaliation, especially by peers, as this
    issue has increased in prominence in our surveys. Our interactive
    education programs are having a measurable impact, and we will continue
    to develop and deploy those. Sexual assault is an ``insider threat''
    with devastating impacts on the Navy and Marine Corps. We've done
    myriad things to attack this insidious threat, but, no matter how much
    we've done, there is more to do until we've eliminated the scourge of
    sexual assault.
        Vice Admiral James Calvert, who earned two Silver Stars as a
    submariner in World War II, once wrote that ``as important as ships
    are, naval history is made by men.'' I would make one change to that
    statement: today naval history is made by men and women. From the
    appointment of Admiral Michelle Howard as the Vice Chief of Naval
    Operations, to our work expanding roles and missions open to women to
    the maximum extent possible, we are leading the military in our quest
    to ensure we're using our best and most talented service members across
    the force. We will continue our efforts to recruit and retain a diverse
    force, including a more representative number of women. A more diverse
    force is a stronger force.
        For several years now, female officers have had the opportunity to
    serve on our ballistic and guided-missile submarines, and they have
    performed exceptionally well, as anticipated, earning their
    qualifications and opening a new path. We are expanding opportunities
    for them. USS Minnesota and USS Virginia, both fast attack submarines,
    are leading the integration of women into the rest of the submarine
    force at this moment. In January, the Navy also announced a plan and a
    set of milestones for fully including enlisted women on submarines that
    will begin next year.
        Women have also been integrated into the Coastal and Riverine
    Squadrons and have deployed. We have also opened 348 billets for Navy
    positions that support Marine Corps units. The Marine Corps continues
    on pace with their study of the positions that are currently closed to
    women and will have results later this year. In accordance with the
    Secretary of Defense's guidance, the default position will be that all
    currently closed positions will be opened to the assignment of women
    unless an exception is formally requested.
        Talent is best cultivated by promoting and advancing our Sailors
    and Marines on merit and competition. It also requires us to maximize
    their opportunities to broaden their experience and exposure to new
    ways of doing things. We have to look at things like moving away from
    year group management for our officers and expansion of the Career
    Intermission Program (CIP), as well as other reforms and adjustments
    within our current system. While a number of our initiatives can be
    undertaken within our current authorities, there are some that will
    require adjustments to the law, including changes to the Defense
    Officer Personnel Management Act (DOPMA), which is almost four decades
    old. We have made legislative proposals in this area, and we ask for
    your help in bringing our personnel system into the 21st century.
        Maintaining our presence around the world is hard on our force.
    That is one of the reasons why in 2014 we began the implementation of
    the Optimized Fleet Response Plan (OFRP). This is a program that Navy
    is using to schedule and plan our deployments and the maintenance of
    our platforms. Over the course of the past 13 years of war, one of the
    biggest challenges for our Sailors and Marines has been predictability
    in their deployments. The goal of OFRP is to return some amount of
    scheduling to their lives. Missing holidays, birthdays, and other
    significant family events is hard enough, but not knowing when it will
    happen makes things even more difficult. There is no way to completely
    eliminate the unexpected. Events around the world can, and do, take on
    a life of their own, and our men and women know this. Increasing the
    predictability of deployments will help with the stress on our Sailors
    and Marines and their families and also has the added benefit of
    helping us properly support our maintenance requirements and readiness
    posture.
        There will be times when a crisis erupts somewhere in the world and
    our Sailors and Marines remain deployed in order to deal with it. The
    world gets a vote. For the past several years we have had a number of
    ships and units remain at sea far beyond the normal deployment length.
    In order to help our Sailors and Marines and their families during
    these extended deployments, we've implemented the Hardship Duty Pay--
    Tempo (HDP-T) program. When operational tempo is high and a deployment
    extends beyond more than 220 consecutive days, this pro-rated
    additional payment kicks in. This is an effort to show our Sailors and
    Marines we understand the difficulty these extended deployments create
    for them and their families and to show them, in a tangible way, the
    gratitude of the Department of the Navy and the American people.
        Those Sailors and Marines on sea duty, deployed away from home
    around the world, are the backbone of the Navy and Marine Corps, and
    they enable us to provide and maintain our global presence. Despite the
    challenges involved, we need to ensure our men and women are
    incentivized to take on sea-going assignments. This past year we
    increased Career Sea Pay for those who have spent a total of 3 years at
    sea in order to both improve critical sea-duty manning and reward those
    who take these challenging sea-going assignments. We also increased
    Career Sea Pay--Premium, which recognizes Sailors and Marines who spend
    more than 36 consecutive months in sea-going positions or who have
    spent a cumulative 8 years at sea during their career. These increases
    are long overdue since they were last adjusted in 2001.
        The Reserve Component continues to be a vital part of the Navy and
    Marine Corps Team. In fiscal year 2014 we mobilized 2,700 individual
    Reserve Sailors and Marines to support operations around the world. As
    the force level shifts in Afghanistan, our Reserve Component will be
    taking on the vast majority of the individual augment requirements
    requested by the joint force. This allows us to focus our active
    component on filling critical sea billets to help ensure fleet
    wholeness and readiness. Reserve Sailors and Marines are deployed
    globally, and we will continue to maintain a Reserve that is ready,
    relevant, and responsive to the Nation's needs.
        Attracting and retaining our talent is critical to maintaining our
    innovative and adaptive force. An important part of that involves the
    challenge of military compensation. Cooperation between Congress and
    the Department of Defense on this issue will be vital as we look at
    slowing the growth rate of our personnel costs. We must keep the faith
    with the men and women who are in uniform. And we must look for the
    right ways to build incentives and retain our most talented people. But
    we also must recognize that growth in pay and benefits must be
    contained or we will not be able to provide our Sailors and Marines
    with the training and equipment that they need.
        Our civilian workforce is also vital to the success of the
    Department of the Navy. They help design our ships, aircraft, and
    equipment and are critical enablers of our forces. Without them, we
    literally would not have a fleet to put to sea. And we could not
    operate ashore at our bases across the globe. Over the past few years
    our civilian workforce has persevered through some very trying times.
    From pay freezes, to hiring freezes, and the huge, negative impact of
    furloughs, they have shown an immense amount of dedication to our Navy,
    Marine Corps, and our Nation. In 2013 twelve of our civilians were
    killed, and others injured in visible and invisible ways, in the attack
    on the Washington Navy Yard. There is no more tragic example of how our
    civilians share the burden with those in uniform. We continue to
    support the victims and the families who endured this tragic attack and
    have implemented numerous security measures to improve the safety of
    our workforce.
        This committed and patriotic workforce is the foundation of how the
    Department of the Navy operates. In order to ensure we have the most
    capable people, in the right positions, we run a number of leadership
    development programs. Annually we select participants for senior
    leader, executive leader, and developing leader programs to provide
    education and training that will help our people tackle the issues we
    face.
    Platforms--America's Fleet
        The hard truth of providing the presence the American people and
    our Nation's leaders expect is that it requires platforms. To be where
    we are needed, when we are needed, we must have the ships, submarines,
    aircraft, vehicles, and equipment for our Sailors and Marines to
    operate. That means we must have a properly sized fleet. Quantity has a
    quality all its own.
        Recently much has been said in many venues about the size of our
    fleet. The completely wrong assertion is made over and over that our
    fleet is shrinking. Let me state this very clearly: our fleet is
    growing and will number greater than 300 ships before the end of this
    decade.
        It is absolutely true that our fleet shrank dramatically between
    2001 and 2008. On September 11, 2001, the Navy's battle force stood at
    316 ships. But, by 2008, after one of the great military buildups in
    American history, our fleet had declined to 278 ships.
        Part of the reason for that was understandable: our focus was on
    two ground wars. But, frankly, it cannot all be attributed to that. In
    the 5 years before I took office as Secretary, the Navy only contracted
    for 27 ships, far too few to maintain the size of the fleet, much less
    grow it. In my first 5 years as Secretary, we contracted for 70 ships.
    We have halted and reversed the decline.
        And we haven't done this at the cost of naval aviation. During my
    time in office we have bought 1,300 aircraft. That is 40 percent more
    than the Navy and Marine Corps bought in the 5 years before this
    administration took office.
        We have done this both in ships and aircraft by taking some direct
    and basic actions including: block buys and multi-year procurements;
    increased competition; stable designs and mature technologies; targeted
    reviews; pursuing cross-program common-equipment buys; and
    affordability through hard but fair bargaining. In addition, we have:
    supported shipyard facility improvements and optimal-build plans;
    conducted rigorous ``should cost'' studies; designed equipment for
    affordability and modularity; instituted strict controls to fight
    ``requirements creep;'' used open-architecture systems to the maximum
    extent possible; and signed shipbuilding capability preservation
    agreements resulting in more competitive shipyards and lower costs for
    the Navy.
        The amphibious and auxiliary ships industrial base is of concern to
    us and is at risk should future funding levels be reduced. We have
    recently introduced an integrated acquisition strategy for LHA 8, T-
    AO(X), and LX(R) to support stability and competition within this
    sector of the industrial base. The strategy will help ensure the ships
    are built affordably, while providing the greatest degree of stability
    for the industrial base.
        There are a number of references previously to the industrial base.
    A healthy design and production industrial base is critical to
    achieving what is needed for our fleet in ships, aircraft, weapons and
    all procurements. Stability and predictability are critical to the
    health and sustainment of this industrial base.
        This is especially true in shipbuilding. Changes in ship-build
    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 of American shipbuilding industries, and has economic
    impacts at the local, regional and national levels.
        It is important, therefore, to provide stability and predictability
    to the industrial base to maintain our ability to continue to build the
    future fleet. In the overall picture, we should not pay for one Navy
    ship by cutting another Navy ship; each ship is crucial in many, many
    ways.
        The Department's shipbuilding plan continues to build the balanced
    force we require. This year we have requested funding for nine new
    ships as well as for the refueling of the carrier USS George
    Washington. We also plan to modernize 11 cruisers, which are our 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
    overall funding requirements while most efficiently increasing the
    capability and extending the service life of these large surface
    combatants.
        Our efforts to maintain and affordably procure our fleet's ships
    and submarines have continued through this past year. 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. CVN 78 (future USS Ford) cost performance has remained stable
    since 2011 and under the Congressional cost cap. We are also committed
    to driving down and stabilizing aircraft carrier construction costs for
    the future John F. Kennedy (CVN 79) and the future Enterprise (CVN 80)
    and have made significant progress in doing so. As a result of the
    lessons learned on CVN 78, we have made significant changes to reduce
    the cost to build CVN 79, including improvements in material
    availability and pricing; major changes in build strategy and processes
    determined to execute construction activities where they can most
    efficiently be performed; incorporation of design changes only for
    safety, those mandated or lower costs; and aggressive measures for cost
    control in government furnished equipment. The costs of CVN 79 also
    remain stable and under the Congressional cost cap.
        In our attack submarine program we are continuing procurement of
    two Virginia Class submarines per year while reducing construction time
    and also developing the Virginia Payload Module (VPM). Thanks to the
    support of Congress in authorizing the use of a multi-year procurement
    (MYP), in April 2014, the Navy awarded the Block IV contract for ten
    submarines. The savings realized with this MYP contract was more than
    $2 billion, effectively giving the Navy ten ships for the price of
    nine.
        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 only assured nuclear response capability.
    Originally designed for a 30-year service life, the Ohio Class has been
    extended to 42 years of operation. They cannot be extended further. For
    this reason, we are intensively continuing development of the follow-on
    twelve-submarine Ohio Replacement Program (ORP). This effort is driven
    by meeting the program's performance requirements while reducing costs
    across design, production, operations and sustainment. However, in
    order to afford the ORP procurement costs beyond this Future Years
    Defense Program (FYDP) it is clear that this program must be funded by
    a significant increase in the Navy's shipbuilding budget, or from other
    sources. Otherwise, funding this necessary program will effectively
    keep the Navy from performing its other critical missions.
        The Arleigh Burke Class (DDG 51) program remains one of the Navy's
    most successful shipbuilding programs--62 of these ships are currently
    operating in the fleet. We are in the third year of an MYP. The second
    of our fiscal year 2016 ships will provide significant upgrades to
    integrated air and missile defense and additional ballistic missile
    defense capability by introducing the next flight (Flight III), which
    incorporates the Air and Missile Defense Radar (AMDR) designed to
    address a number of growing threats.
        With four Littoral Combat Ships (LCS) in service, operational
    experience continues to increase through at-sea testing and rotational
    deployments, and the value of this class continues to be demonstrated.
    USS Fort Worth began her maiden deployment to the western Pacific, and
    upon arrival in Singapore was sent to assist in the search and recovery
    efforts for the downed Air Asia airliner in the Java Sea. USS Fort
    Worth's deployment marks the beginning of continuous LCS forward
    presence in Southeast Asia and will validate the 3:2:1 (three crews,
    two ships, one ship always forward-deployed) rotational manning and
    crewing concept for the LCS class. This will also be the first
    deployment of the Navy's MH-60R Seahawk helicopter along with the MQ-8B
    Fire Scout on an LCS.
        After an exhaustive analysis by the Navy's Small Surface Combatant
    Task Force, in December 2014 the Secretary of Defense approved the
    Navy's proposal to procure a new small surface combatant based on an
    upgraded LCS. This followed his February guidance to review the program
    and consider development of a more lethal and survivable small surface
    combatant. The upgraded LCS will provide multi-mission anti-surface
    warfare and anti-submarine capabilities, as well as continuous and
    effective air, surface and underwater self-defense. They are both more
    lethal and more survivable, as well as continuing to be affordable and
    providing the fleet with the requirements it needs. As these
    capabilities are consistent with those of a frigate, I directed
    designation of these new small surface combatants as Frigates (FF).
        Our amphibious ships are incredibly versatile. Across the spectrum
    of maritime operations, from the humanitarian assistance and disaster
    relief efforts in the Philippines following super-typhoon Haiyan to the
    combat operations in Libya during Operation ODYSSEY DAWN, the Navy and
    Marine Corps team do a wide array of things with these ships. At this
    moment, the USS Iwo Jima Amphibious Ready Group and 24th Marine
    Expeditionary Unit are in the Fifth Fleet area of operations, ready for
    anything that might happen from Iraq and Syria to Yemen.
        Congress provided $1 billion of funding in the fiscal year 2015
    Appropriations Act toward a twelfth LPD, and we have requested the
    balance of funding this year for this ship, LPD 28. Procurement of LPD
    28 will assist in mitigating impacts to shipbuilding and combat systems
    industrial bases, and the ship's design and construction features will
    fully exploit some of the ongoing design innovations and cost reduction
    initiatives that are necessary for the LX(R) to achieve its
    affordability goals.
        Support vessels such as the Mobile Landing Platform (MLP) and the
    Joint High Speed Vessel (JHSV) provide many additional options and
    flexibility to Combatant Commanders. The future USNS Lewis B. Puller
    (MLP 3), the first Afloat Forward Staging Base (AFSB) variant of the
    MLP, which includes a flight deck, was christened in early February in
    San Diego and will deliver in summer 2015. The Navy awarded MLP 4 AFSB
    in December 2014, and plans to request MLP 5 AFSB in fiscal year 2017.
    JHSV production continues with delivery of the fifth JHSV anticipated
    in April 2015. JHSVs 6 through 10 are also under contract. In fiscal
    year 2015, Congress provided funding for an eleventh JHSV, which we
    expect to be put under contract this coming summer.
        Combat Logistics Support 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 at sea for extended periods of time. We will begin to
    replace the Fleet Replenishment Oilers beginning in fiscal year 2016
    with the TAO (X). These will be double-hulled and meet Oil Pollution
    Act of 1990 and International Marine Pollution Regulations.
        With the strong support of Congress, we continue to strengthen
    naval aviation as well. Adding new aircraft to our growing fleet will
    increase U.S. naval strength, in terms of both force capacity and
    capability. In the vertical lift community, multi-year production
    contracts for the MV-22 and MH-60R continue, as does the Marine Corps
    procurements of the AH-1Z and UH-1Y.
        The E-2D, our new and upgraded electronic early-warning aircraft,
    reached initial operating capability in October and is continuing
    production under a multi-year contract. We continue to buy P-8As to
    replace the venerable P-3. Last year, in 2014, we saw the first
    deployment of this aircraft and continuous rotational deployments to
    Seventh Fleet are now underway. This past year also continued the
    integration of the EA-18G Growler electronic attack aircraft into the
    fleet. With Congress's addition of 15 Growlers in 2015, we will have
    153 of these aircraft in 16 squadrons. With the final Navy deployment
    of the legacy EA-6B Prowler, and the looming retirement of the Marine
    Corps' last Prowlers, these incredibly capable new aircraft take over
    the Nation's airborne electronic attack mission.
        The F-35 Joint Strike Fighter remains a central part of the future
    of both Navy and Marine Corps aviation. This past year we saw the
    Marine Corps begin F-35B operations at two additional bases. The
    Marines are on track to have initial operating capability (IOC) for the
    first squadron this year. The Navy completed the F-35C's first flight
    operations at sea aboard USS Nimitz (CVN 68). According to plan, the
    Navy is the last service to acquire the F-35 and is continuing an
    acquisition strategy to achieve IOC in the 2018-2019 timeframe.
    Incentive agreements with the builders have been achieved that will
    improve aircraft unit costs while also improving the learning curve on
    production.
        Unmanned systems are critical to our ability to be present; they
    lessen the risk to our Sailors and Marines and allow us to conduct
    missions that are longer, go farther, and take us beyond the physical
    limits of pilots and crews. Launching and recovering unmanned aircraft
    as large and capable as our manned fighters from the rolling decks of
    aircraft carriers, launching unmanned rotary-wing patrols from our
    small surface combatants, and deployment of unmanned underwater
    vehicles globally are elements of both the present and future of
    maritime presence and naval warfare.
        We are moving ahead with a number of unmanned programs in the
    effort to rapidly integrate them into the fleet. The MQ-8B Fire Scout
    has already begun regular deployments. When USS Fort Worth deployed to
    Singapore recently the ship took a mixed aviation detachment of a
    manned MH-60R helicopter and MQ-8B UAV's. This kind of hybrid
    employment, pairing our manned and unmanned systems to take advantage
    of the strengths of each, will be a hallmark of our future approach to
    unmanned systems. The first operational variant of the larger and more
    capable next generation Fire Scout, the MQ-8C, was delivered in 2014.
    This aircraft will bring double the endurance and double the payload of
    the older versions.
        We continue to work toward a full start of the Unmanned Carrier
    Launched Airborne Surveillance and Strike system (UCLASS) program. This
    unmanned addition to the air wings aboard our aircraft carriers is a
    vital part of the future of naval aviation. Full start of this program
    has been delayed pending a defense-wide review. Having the proper
    balance of long-endurance surveillance capabilities and the ability to
    grow into long range, penetrating strike missions in the future is
    critical. Development also continues of the unmanned underwater systems
    that are part of our future mine warfare capabilities. These systems
    will see formal operational testing in the Littoral Combat Ship program
    in 2016.
        Maintaining the required pace of Navy shipbuilding while continuing
    the recapitalization of our aviation assets and other platforms made
    necessary by our deployment cycles and operational tempo is a very real
    issue. It will necessitate continued leadership, oversight and
    management to make sure we develop innovative solutions and maximize
    the efficiency in our acquisition system. Building our platforms is a
    unique public-private partnership and a key economic engine in nearly
    every State in the union. It provides more than 100,000 high-skill,
    high-paying jobs and helps ensure the foundation of global prosperity
    and security that our naval presence has assured since World War II.
        Because cuts to our shipbuilding programs are the least reversible
    in their impact on our fundamental mission of providing presence and in
    their consequences to the industrial base and to our economy, I am
    committed, to the maximum extent possible, to preserve ship
    construction and to seek reductions in every other area first, should
    further budget reductions such as sequestration become reality.
    Power--Energy and Efficiency
        For two centuries the United States Navy has had a history of
    leadership in energy innovation, transitioning from wind to coal, coal
    to oil and finally pioneering nuclear power. Fueling the ships,
    aircraft, and vehicles of our Navy and Marine Corps is a vital
    operational concern and enables the global presence necessary to keep
    the Nation secure. But power and energy are also issues of national and
    international security.
        My responsibility as Secretary of the Navy is to ensure that the
    Navy and Marine Corps have the right people, with the right training
    and the right tools to defend our country. Power and energy are an
    important part of ensuring our people have what they need and can get
    where they are needed. It is a critical element of our presence and why
    Navy has always been an energy innovator.
        Throughout human history, access to resources has been a major
    source of conflict. Energy and fuel can and are being used as weapons.
    Threats against the shipping lanes in the Middle East, European
    dependence on Russian gas supplies and the impact of Russian energy
    dependence by the Ukraine are the subject of daily headlines. This is
    true regardless of the price of a barrel of oil, although the price
    decline of the last year has certainly impacted strategic calculations
    around the globe.
        Here in the United States, with domestic production up and new oil
    and gas reserves being discovered even as prices have fallen, energy
    still remains a security concern. Even if we were able to produce every
    single drop of oil or gas that America needs domestically, we cannot
    control the price. Oil is the ultimate global commodity, often traded
    on world markets based on speculation and rumor. Oil price instability
    is often the result of global instability, and prices fluctuate with
    little warning. The volatility of oil prices, both up and down, has
    been repeatedly demonstrated in recent years. And energy supply will
    remain an issue for many of our allies and for others around the globe,
    creating the potential for instability and even conflict.
        Operationally, energy matters now more than ever. The ships and
    aircraft that we deploy include advanced capabilities that make us the
    most effective expeditionary fighting force in the world. But our
    weapons platforms also use far more energy than their predecessors. Our
    ability to maximize our capabilities depends on having the energy
    available to power them.
        In 2009, I established formal energy goals for the Department of
    the Navy to help drive the Navy and Marine Corps to strengthen our
    combat effectiveness by using energy more efficiently and by
    diversifying our sources of power. From the deployment of hybrid
    electric drives, to the introduction of alternative fuels into the
    fleet, to the Marines' use of expeditionary power systems in
    Afghanistan, we have made real progress over the last few years.
        This past year we christened USS Zumwalt (DDG 1000), which has an
    electric propulsion system. This system is state-of-the-art and will
    significantly reduce fuel demand, which is a critical part of ensuring
    we have the fuel to power next generation weapons, like the Laser
    Weapon System (LaWS) and the electro-magnetic rail gun. This past fall
    we commissioned USS America (LHA 6) which is driven by hybrid electric
    power plants. This is the same engineering design used in USS Makin
    Island (LHD 8) that, for her maiden deployment, cut her fuel
    consumption nearly in half when compared to other big deck amphibious
    ships. We also took delivery of two more Virginia Class submarines,
    with their advanced nuclear power systems that lead the world in
    efficiency and safety.
        Our shore installations, like our shipyards, are critical to our
    operations. We continuously strive to be smarter and improve energy
    efficiency at our installations. And we are leveraging private sector
    funding to accomplish that goal. In fact, the Department of the Navy is
    on track to have awarded nearly one billion dollars in energy savings
    performance contracts by December 2016. That's one billion dollars to
    improve our infrastructure and lower our energy bills in the process.
    The Renewable Energy Program Office (REPO) coordinates and manages our
    goal of producing or procuring one gigawatt of cost-effective renewable
    energy for our bases. We will reach this goal by December of this year.
    The power we are buying through our REPO projects will be cheaper, over
    the life of the contract, than our current rates.
        Last September we announced contracts with three companies that
    have committed to produce drop-in, military-compatible biofuels at
    operational quantities. Let me be clear: we are not obligated to buy
    fuel from any producer and do not intend to buy any fuels unless they
    are cost competitive. That said, it is critical we continue to use
    alternative fuels in our ships and aircraft to ensure operational
    flexibility. The private sector, including major airlines, is expanding
    the use of alternative fuels just as we are.
        Diversifying our energy supply for our ships, our aircraft, and our
    bases helps guarantee our presence and ability to respond to any
    crisis. Increasing our energy efficiency assures that we can remain on
    station longer or extend our range, without the delays and
    vulnerability of refueling. And the benefits of competition, as we have
    demonstrated in shipbuilding, are always welcome. In these ways, our
    focus on power and energy is helping to ensure the United States Navy
    and Marine Corps remain the most powerful expeditionary fighting force
    in the world and their ability to protect and advance American
    interests around the globe.
    Partnerships--Naval Diplomacy and International Cooperation
        In the 21st century, to be effective, all nations and people that
    seek freedom and security have to carry their own share of the
    responsibility of defending the global system. A collective effort will
    assure our navies can provide the necessary presence to maintain
    freedom of navigation and maritime security around the world. Whether
    blue water or brown, America's Navy and our other allies and partners
    help assure stability and security, creating and strengthening global
    relationships, providing humanitarian assistance and disaster relief,
    deterring adversaries when possible, and defeating aggression when
    necessary.
        Cooperation on the world's oceans helps us diffuse tensions, reduce
    misunderstandings, and limit conflict. The world's maritime tradition
    is nearly as old as human history. From harbors near the Arctic Circle
    and around the Mediterranean, from the littorals of Asia to the shores
    of Africa, the Americas and Australia, human civilizations have
    launched one great fleet after another toward the horizon. Again and
    again naval forces have proven themselves the most immediate, the most
    capable and the most adaptable option when a crisis develops.
        This is even more true when like-minded navies, with similar
    national policy objectives, can find ways to work together. Whether
    exercising together in the Baltic or in Southeast Asia, operating
    against pirates in the Gulf of Aden, or cooperating to provide relief
    in the aftermath of natural disasters, the strong cooperation between
    the United States and our partners and allies makes a difference all
    over the globe. Partnerships are a key contributor to presence.
        Building partnerships and establishing trust between our Nation and
    our Navy and countries around the world is why I travel to visit with
    foreign military and governmental leaders. Those meetings are critical
    to building the relationships that can help us deter conflict or
    respond in a more coordinated and effective manner to manmade or
    natural crises. It is critical in my job as Secretary of the Navy to
    understand the global landscape and the security challenges--and
    opportunities. Briefings and PowerPoint slides can never match the
    value of firsthand observation and interactions, as anyone who has
    served aboard a ship, at a forward outpost, or in a warzone can tell
    you. As the old Navy saying goes, ``You can surge people and you can
    surge platforms, but you cannot surge trust.''
        Our rebalance to the Pacific continues to be an important part of
    our partnership efforts. We must have the right platforms in the right
    places to ensure our friends and allies understand our commitment.
    We're moving more ships to the central and western Pacific, including
    forward basing an additional fast attack submarine in Guam and as I
    mentioned earlier we are forward stationing four Littoral Combat Ships
    out of Singapore. We are ensuring that our most advanced platforms are
    in the Pacific, so we're increasing the number of DDG's with the
    Ballistic Missile Defense systems based in Japan and the P-8A maritime
    patrol aircraft are making their first rotational deployments in the
    region. In the longer term, by 2018 we will deploy an additional
    Amphibious Ready Group to the Indo-Pacific region and we will deploy a
    growing number of Joint High Speed Vessels and Mobile Landing Platforms
    there. With these changes, and others, by the end of the decade 60
    percent of our fleet will be based in the Pacific, a fleet which will
    be larger than the one we have today.
        The Marine Corps is also building its capacity to work with our
    Indo-Pacific partners. We continue to increase the rotational
    deployment of Marines to Australia, which will culminate in the regular
    rotational deployment of a Marine Air Ground Task Force (MAGTF) of
    approximately 2,500 Marines. The Marines have increased the size of
    this deployment from just over 200 Marines to more than 1,000 and over
    the past year these Marines out of Darwin have conducted exercises and
    theater security operations throughout the region. We are also
    continuing forward on the plan to base another MAGTF (part rotational,
    part permanent) of about 5,000 Marines in Guam, which will become a
    central hub for many of our Pacific operations.
        This past year saw dramatic developments in Eastern Europe and the
    Black Sea region. The Navy and Marine Corps have been central to
    demonstrating support for our allies and friends and American interests
    in the region. Alongside the Marine Corps' Black Sea Rotational Force's
    operations in Eastern Europe, a series of Navy ships have deployed into
    the Black Sea to ensure freedom of navigation and work with our
    partners there. The bonds between America and Europe and our shared
    values remain as strong today as ever.
        That is demonstrated in one of the world's strongest and most
    enduring defense partnerships: the North Atlantic Treaty Organization.
    It is true that America's defense strategy calls for an increased focus
    on the Western Pacific, Arabian Gulf, and Indian Oceans. But that same
    strategy also ensures that we aren't turning away from our longstanding
    allies in Europe and also calls for renewing our commitment to NATO. A
    very concrete example of this is the move of four ballistic missile
    defense capable DDGs to Rota, Spain. All of these efforts are a
    continuation of NATO's 65-year mission to keep all nations free, and
    not to claim territory or tribute.
        This past summer USS America sailed from the Gulf Coast, where it
    was built in Mississippi, around South America to its new homeport in
    San Diego. As America sailed through the Americas, the Sailors and
    Marines aboard conducted theater security cooperation activities with
    countries in the region, training together and helping to develop the
    skills needed to counter illicit trafficking and conduct combined
    operations. Our new Joint High Speed Vessels are also deploying to the
    Americas with the ability to operate for longer periods and carry
    adaptive payloads. Our security is undeniably tied to our neighbors and
    we are working with innovative and small-footprint approaches to
    enhance this.
        This past September, I invited the leaders of our partner navies in
    West Africa to join me for a series of discussions in Newport, Rhode
    Island called the Gulf of Guinea Maritime Security Dialogue. Naval
    leaders from 16 nations bordering the Gulf of Guinea came to discuss
    how we could increase collaboration in a region where piracy,
    extremism, trafficking and insecurity of all types are on the rise. We
    discussed a unified code of conduct for maritime law enforcement and
    encouraged more direct cooperation in the region. As the economy in the
    Gulf of Guinea continues to grow, so does the increasing relevance of
    guarding against transnational crime like maritime terrorism and the
    illegal movement of drugs and weapons. The U.S. Navy and Marine Corps
    will continue to work with our partners in West Africa and help them
    improve their capabilities and promote collaboration.
        Sailors and marines of every nation have much in common with other
    sailors and marines. Working together, we become more inter-operable,
    we can provide key training and develop the operational capabilities of
    like-minded countries and navies. This in itself increases stability
    for the global system. It distributes the burdens and costs of maritime
    security and makes us all safer by reducing the likelihood of conflict.
    Direct engagement with foreign leaders by our Department's senior
    leadership is a central component of building the human connections
    that are critical to successful partnership and combined operations.
    They are a large part of what builds the international relationships,
    trust, and inter-operability that is central to our globalized world.
        In this interconnected world, threats know no boundary, no
    international lines, so the burden of security has to be shared. Across
    239 years of history our Navy and Marine Corps have worked with allies
    and friends. From suppressing the slave trade on the coast of Africa in
    the mid-19th century to the combined operations of World War II, the
    examples are endless. From the exercises I mentioned earlier like
    RIMPAC, MALABAR, and PLATINUM LION, to our multi-lateral and bi-lateral
    meetings with both uniformed and government leaders, to our combined
    operations like the search for Air Asia Flight 8501 and counter-piracy
    patrols off the Horn of Africa; these examples illustrate that the
    partnerships we build and maintain today remain critical to our global
    presence.
                       fiscal year 2016 budget submission
        The Department of the Navy's proposed budget for fiscal year 2016
    is designed with a focus on the three objectives laid out 2014
    Quadrennial Defense Review: protect the homeland, build security
    globally, and project power and win decisively when called upon. In
    doing so we have looked across the FYDP to maintain our ability to
    conduct the ten primary missions listed in the Defense Strategic
    Guidance to 2020 and beyond. Overall the fiscal year 2016 President's
    Budget balances current readiness needed to execute assigned missions
    while sustaining a highly capable fleet, all within a tough fiscal
    climate.
        Our approach to this budget has focused on six objectives. First,
    maintain a credible and modern sea-based strategic deterrent. Second,
    sustain our forward global presence to ensure our ability to impact
    world events. Third, preserve both the capability and capacity to
    defeat an aggressor in one multi-phase contingency operation while
    simultaneously denying another aggressor the ability to achieve their
    objectives. Fourth, ensure that the force is adequately ready for these
    operations through critical afloat and shore readiness and personnel
    issues. Fifth, continue and affordably enhance our asymmetric
    capabilities. Finally, sustain our industrial base to ensure our future
    capabilities, particularly in shipbuilding.
        Even as we deal with today's fiscal limitations, we cannot let slip
    away the progress we've made in shipbuilding. It takes a long time,
    measured in years, to produce a deployable ship. As I noted earlier, it
    is the least reversible thing we might do to deal with budget
    constraints. If we miss a year, if we cancel a ship, it is almost
    impossible to recover those ships because of the time involved and the
    fragile industrial base. To do the job America and our leaders expect
    and demand of us, we have to have those gray hulls on the horizon.
        This budget results in a 2020 fleet of 304 ships. We will purchase
    Virginia Class attack submarines at a rate of 2 per year for a total of
    ten across the FYDP, with the inclusion of the Virginia Payload Module
    by fiscal year 2019 for at least one boat per year. We also will
    continue to procure Arleigh Burke class destroyers at a rate of 2 per
    year, with the first Flight III DDG funded in fiscal year 2016 and
    delivered in fiscal year 2021. Fourteen ships of the Littoral Combat
    Ship class, of which at least the last five will be the frigate
    variant, will also be procured in this FYDP. We will also continue the
    construction of amphibious ships, mobile landing platforms, high speed
    vessels, and combat logistics ships.
        This budget carries on the development of the future carrier air
    wing. Procurement of both the F-35C and F-35B continues, with initial
    operating capability (IOC) of the F-35C coming sometime in late fiscal
    year 2018 or early fiscal year 2019. Our multi-year procurement of the
    E-2D will now include the introduction of inflight refueling capability
    for the new aircraft. We are continuing the integration and procurement
    of the Small Diameter Bomb II for the F/A-18 and fund advancements to
    the Advanced Anti-Radiation Guided Missile to reach IOC for Block I in
    fiscal year 2017. The budget also funds the EA-18G into its Full
    Operating Capability and full air wing integration in fiscal year 2017,
    and we continue the development of the Next Generation Jammer.
        We are accelerating the purchase of P-8A maritime patrol aircraft
    to reverse the reductions that were made due to sequester cuts. Our
    plan is to complete the buy in fiscal year 2019 and have the entire
    inventory of 109 aircraft by the end of the FYDP. We are also
    addressing the future of our logistics support and carrier onboard-
    delivery aircraft. This budget funds the purchase of 24 Navy V-22
    Tiltrotor aircraft across the FYDP, with an IOC for Navy squadrons of
    fiscal year 2021.
        In order to face potential adversaries who are building
    technologically advanced platforms and weapons of their own, we must
    move forward on our development of new and innovative systems. This
    budget funds the accelerated acquisition of the Long Range Anti-Ship
    Missile (LRASM), which will reach early operating capability on the B-1
    in fiscal year 2018 and with F/A-18's in fiscal year 2019. We are also
    continuing procurement of SM-6 missiles. Funding for the next leap
    forward in weapons technologies, such as the LaWS and railgun programs,
    are included as well as the precision-guided Hyper-Velocity Projectile
    (HVP) for both our 5-inch guns (by fiscal year 2019) and for the
    railgun once development is complete.
        The fiscal year 2016 budget also places priority on emerging
    capabilities in the cyber and electronic warfare efforts. We will
    continue to recruit and train top talent to form 40 cyber mission teams
    by the end of 2016. We also include funding for Operation Rolling Tide
    and the results of Task Force Cyber Awakening, which invests in
    enhancements to our networks for cyber defense-in-depth, including
    defense solutions for ships, security improvements for our command and
    control networks, and the expansion of some of our defense initiatives
    to tactical IT systems. The Navy is developing capabilities to deliver
    cyber effects from land and sea-based platforms. We are continuing the
    build of the Mobile User Objective System (MUOS) satellites with an IOC
    expected in fiscal year 2016 and the launch of the fifth satellite in
    late 2016.
        The Marine Corps end strength will hold at 184,000 Marines for 2016
    while leadership assesses the impact of the drawdown that has been
    conducted over the past 4 years. This pause is for 1 year only. The
    Marines will draw down to 182,100 under this budget in 2017. After
    coming down by 18,000 Marines, we need to ensure we have the right
    number of small unit leaders and their ability to prepare their Marines
    for deployment. We must also make sure that units preparing for
    overseas operations have adequate time and ability to train and to
    maintain unit cohesion.
        The Marine Corps will begin procurement and testing of the next
    generation ground combat maneuver capability, starting with the Joint
    Light Tactical Vehicle. We will also award engineering manufacturing
    and development contracts to two vendors to produce Amphibious Combat
    Vehicle 1.1 prototypes for testing and evaluations. The F-35B program
    also remains a high priority for the Marine Corps, and this budget
    ramps up production of airframes with the plan to stand up a third F-
    35B squadron by fiscal year 2018. These programs are important to our
    ability to maintain the Marine Corps as the Nation's expeditionary
    force-in-readiness. Our ability to remain forward engaged and ready to
    respond to crisis is dependent on the readiness of our forward deployed
    and home station units. The Marine Corps must remain the most ready
    when the Nation is least ready.
        Our support for our Sailors and Marines and their families is
    evident in the personnel initiatives in this budget, many of which were
    described earlier. We are continuing the Compensation Reform and
    Quality of Service initiatives that we first proposed in the budget for
    fiscal year 2015. This includes increasing our requested pay raise from
    1.0 percent to 1.3 percent in fiscal year 2016. To ensure fairness
    across the force, this budget also makes certain that every active duty
    family members has the option to receive healthcare with no co-pays/
    cost share regardless of their assigned duty station, including remote
    locations. The re-investment in our talented and innovative workforce
    also continues from the fiscal year 2015 budget to this one, including
    the new sea duty incentive pays and bonuses, barracks improvements for
    our junior personnel, and improved fleet training and spares
    availability to ensure our men and women have the tools they need to
    get their jobs done.
        The American people have every right to expect that after coming
    out of two wars there would be savings in the defense budget. Our
    Department is continuing its reform of acquisition practices, including
    fundamental changes to how we contract for services. We are
    establishing additional discipline in the contractual services
    process--from requirements to tracking to execution to surveillance--
    that ensures the integrity of the system remains high and to guard
    against fraud. Also, as a result of reformed contracting processes, we
    fully expect in this budget to achieve the reductions in contractual
    services that we began in last year, realigning those resources to
    buying more material equipment and readiness for the force.
        We continue to aggressively implement acquisition practices that
    improve the return for each taxpayer dollar we spend. Improved
    management of requirements, multiyear procurements, appropriate
    incentive contracts, additional competitions, and small business
    initiatives are but a few of the tools we are using to maximize the
    return on each dollar we invest on behalf of the taxpayer. However, the
    way some of the budget reductions have been executed in the law,
    through continuing resolutions and the sequester, have made planning
    virtually impossible and have not allowed us to approach reductions in
    a strategic way. After the initial return of a moderate amount of
    stability following last year's Bipartisan Budget Act and the recent
    Omnibus Spending Bill, the President's Budget for fiscal year 2016
    continues this stability to the Department's planning for the future.
    In order to maintain our Constitutional responsibility to ``provide for
    and maintain a Navy,'' we must work together to ensure that our Navy
    and Marine Corps remain the most powerful expeditionary fighting force
    in the world.
        Over the past 3 years the Navy and Marine Corps have had to make
    tough choices across a wide range of competing priorities in order to
    deal with funding instability. This proposed budget submission for
    fiscal year 2016 maintains the minimums necessary to accomplish the
    missions required by the DSG. We continue to accept some risk to our
    capacity to complete all ten of the missions, and we have continued
    reductions to the maintenance funds for our shore infrastructure,
    elements of our weapons capacity, and selected aviation accounts. While
    these reductions were seen as the most reversible, over a longer period
    of time the expenses have continued to add up. Because we have already
    taken these savings, a return to the funding level required by the 2011
    Budget Control Act certainly will have more dramatic impacts.
                                   conclusion
        In 2015 we commemorate the bicentennial of the end of the War of
    1812. At the Battle of New Orleans a joint force of Sailors, Marines,
    Soldiers, and volunteers repelled a veteran British Army, battle
    hardened by their war against Napoleon. From the Navy's small
    combatants and gunboats that attacked the landing force in Lake Borgne,
    to the gunnery crews who joined the Army's artillery on the field of
    battle at Chalmette Plantation, Sailors and Marines ensured the defense
    of our homeland against invasion. Only weeks later off the coast of
    Africa, Captain Charles Stewart and USS Constitution fought the war's
    final battle at sea, bringing an end to the conflict that established
    the U.S. Navy as a player on the world's stage.
        When America has called, the Navy and Marine Corps have always been
    there. Two hundred years ago our squadrons sailed for the shores of
    Africa and the Second Barbary War, having just concluded that decisive
    role in the War of 1812. One hundred and fifty years ago, Admiral
    Farragut sailed up through Mobile Bay during the Civil War. One hundred
    years ago, as the First World War began, we prepared for convoy
    operations and anti-submarine missions in the battle for control of the
    Atlantic. Seventy years ago, Sailors and Marines fought their way
    across the Pacific toward Japan. For all of those two hundred plus
    years, and continuing today, the Navy and Marine Corps have been ready
    to fight and to win our Nation's wars, whether coming from the sea or
    on, above or beneath the sea.
        Today, from the coast of Africa to the wide expanse of the Pacific,
    from the Arctic to the Antarctic, our Sailors and Marines continue to
    deploy to protect and defend the American people and our national
    interests. They, and our Navy and Marine Corps civilians, continue to
    ensure that America's Away Team is ready and present around the world,
    prepared for action in times of crisis or working with our partners in
    times of peace.
        The United States of America faces an international security
    environment full of uncertainty. To face that world, the funding levels
    in the Department of the Navy's proposed budget for fiscal year 2016
    reflect the resources required to rapidly respond to a diverse scope of
    contingencies spanning extremist organizations, pandemic diseases and
    natural disasters, while continuing to deter assertive actors across
    the globe through our expeditionary presence and dominant warfighting
    capability. These investments will continue to provide the best value
    in dealing with that dynamic security environment, as well as securing
    and strengthening our own and the global economy.
        In order to ensure that we continue to provide the Navy and Marine
    Corps our Nation's leaders the American people have come to expect, the
    Commandant and Chief of Naval Operations and I look forward to working
    with this Committee and the Congress. From maintaining our momentum on
    our plan to build to a fleet of 304 by the end of the decade, to our
    continued efforts to purchase the aircraft, vehicles and weapons
    detailed in our budget submission, to the priority of ensuring we
    maintain and retain the talented Sailors, Marines, and civilians who
    make it all possible, we will need to work together. We look forward to
    answering your questions, at this hearing and in the future. We will
    continue to work to provide for, and maintain, our Navy and Marine
    Corps because, as President Theodore Roosevelt once said, ``A good Navy
    is not a provocation to war. It is the surest guaranty of peace.''

        Senator Cochran. Thank you, Mr. Secretary.
        Admiral Greenert, we will recognize you now for any opening
    statement you would have to make.
    STATEMENT OF ADMIRAL JONATHAN W. GREENERT, CHIEF OF
                NAVAL OPERATIONS
        Admiral Greenert. Thank you, Chairman Cochran, and
    distinguished members of the committee. I appreciate the
    opportunity to testify today.
        It is my honor to serve and represent more than 600,000
    Active and Reserve sailors, Navy civilians, and their families,
    especially the 41,000 sailors who are underway and deployed
    around the globe today. The dedication and resilience of our
    people continues to amaze me, Mr. Chairman. The citizens of
    this Nation can take great pride in the daily contributions of
    their sons and daughters around the world.
        It is also my pleasure to testify this morning beside
    Secretary Mabus and General Joe Dunford. Your Navy and Marine
    Corps team is united in fulfilling our longstanding mandate to
    be where it matters, when it matters, ready to respond to
    crises to ensure the security that underpins the global
    economy.
        Now to that point, recent events exemplify the value of
    forward-presence. For example, last August, the George Herbert
    Walker Bush carrier strike group relocated from the Arabian Sea
    to the North Arabian Gulf. That is about 750 nautical miles. It
    is like going from Jackson, Mississippi, to Chicago, just for
    perspective.
        They did that in under 30 hours. And when located there,
    they were doing sorties, that is missions, 20 to 30 a day, and
    they did that for 54 days, at which they were the only
    coalition strike option to project power. So that is pretty
    good.
        The USS Truxtun arrived in the Black Sea to establish a
    U.S. presence and to reassure our allies only a week after
    Russia invaded Crimea. Most of that week was getting the
    paperwork done to get and locate ourselves in the Black Sea.
        The Fort Worth, a littoral combat ship (LCS), and the USS
    Sampson, a destroyer, were among the first to support the
    Indonesian-led search effort for the Air Asia Flight 8501 in
    the Java Sea here last December.
        So we have been where it matters, when it matters.
        Mr. Chairman, I have testified before about the continuing
    resolution and sequestration, and it has deeply affected our
    Navy's readiness and capabilities, and we have not yet
    recovered from that 2013 period.
        Navy readiness is at its lowest point in many years. The
    budget reductions have forced us to cut afloat and ashore
    operations. It has generated a ship and aircraft maintenance
    backlog. And it has compelled us to extend unit deployments.
        Now, since 2013, many of our ships have been on deployment
    for 8 to 10 months or longer. That really does exact a cost on
    the resiliency of the people and the service lives of the ships
    themselves. Our degraded readiness posture has also affected
    our ability to satisfy contingency response requirements.
        Now, in addition to what is globally deployed today, our
    combatant commanders require three carrier strike groups and
    three amphibious ready groups ready to deploy within 30 days to
    respond to a major crisis. That is our covenant with them.
        However, on average, we have been able to keep only one
    carrier strike group and one amphibious ready group in this
    readiness posture. So we are at one-third of the requirement.
        Now, assuming the best case of an on-time, an adequate, and
    a stable budget, and no major contingencies, we might be able
    to recover from this accumulated backlog by 2018 for our
    carrier strike groups, and by 2020 for our amphibious ready
    groups. So that is 5 years after the first round of
    sequestration.
        That is just a glimpse of the damage that sequestration can
    and will do, if we go back there. Not only do we face several
    readiness problems, but we have been forced to slow Navy
    modernization.
        Mr. Chairman, we have lost our momentum in rapidly fielding
    emerging capabilities for future fights. We are losing our
    technical edge. The overall impact of budget shortfalls in the
    past 3 years has manifested in the continuing decline of our
    relative warfighting advantage in several areas, notably
    antisurface warfare, antisubmarine warfare, air-to-air warfare,
    and what we call the integrated air-and-missile defense.
        We have been compelled to accept significant risk in the
    execution of two key missions in the 2012 Defense Strategic
    Guidance. That remains our guidance. And I provided a little
    card here which lists the missions we are required to provide,
    where we are in President's budget 2016, and where we will be
    if we go to sequestration.
        The first mission where we have great risk in 2016 is to
    deter and defeat aggression. That means to win a war at sea by
    deterring another at sea in a different theater.
        The second mission is to project power despite an anti-
    access/area denial challenge.
        Now when I say risk in this context, I mean that some of
    our platforms and our people and our systems will arrive late
    to the fight. They will arrive with insufficient ordnance,
    without superior combat systems, without superior sensors and
    the networks that they need. They will be inadequately prepared
    to fight, and that means a longer timeline to arrive and to
    prevail. More ships and aircraft will be out of action in
    battle. And, frankly, more sailors and marines and merchant
    mariners will be killed. And it's less credibility and,
    frankly, less deterrence for our adversaries, and less
    assurance for our allies, in the future.
        Now, given these circumstances, our President's budget 2016
    submission represents the absolute minimum funding levels that
    we need to execute our strategic guidance. To bring the Navy
    program into balance within this fiscal guidance, we focused
    first on building the appropriate capability, and then we
    deliver whatever the capacity we could afford based on the
    funding that we have.
        Now, that is similar to last year. We applied the following
    six priorities in preparing our program. Number one, we have to
    maintain a safe and credible sea-based strategic deterrent.
    Number two, we must sustain our forward presence. We have to be
    where it matters, when it matters. Three, we will develop the
    capability and the affordable capacity we have to win
    decisively. Number four, improve our weapon readiness. Number
    five, to develop the asymmetric capabilities to keep us
    technologically advanced. And number six, to sustain a relevant
    industrial base.
        Now, I list the industrial base as number six, but that is
    not the last priority. We have to balance all of those
    throughout this.
        Senator Cochran. Admiral Greenert, we are going to have to
    ask you to wind up your remarks. You have taken more time than
    either the Secretary or I have taken.
        Admiral Greenert. I will do that now.

                               PREPARED STATEMENT

        So in conclusion, Mr. Chairman, over the last 3 years, we
    have been provided $25 billion less than the President's
    budget. Frankly, if we continue down that track, we will be $55
    billion out.
        The budget request represents the floor, and any funding
    level below this submission will require revision to our
    strategy.
        I look forward to working with the Congress to find
    solutions. Thank you.
        [The statement follows:]
               Prepared Statement of Admiral Jonathan W. Greenert
                                  introduction
        Chairman Cochran, Vice Chairman Durbin, and distinguished members
    of the Committee, I am honored to represent more than 600,000 active
    and reserve Sailors, Navy Civilians, and their Families, especially the
    41,000 Sailors who are underway on ships and submarines and deployed in
    expeditionary roles, around the globe today.
        As the chartlet below shows, about 95 ships (1/3 of the Navy) are
    deployed around the globe protecting the Nation's interests. This is
    our mandate: to be where it matters, when it matters.

                  Figure 1: The Navy's Forward Presence Today

        I would like to begin this statement describing for you the
    guidance that shaped our decisions within the President's budget for
    fiscal year 2016 (PB-16) submission. I will address the Navy's
    situation following sequestration in fiscal year 2013, the Bipartisan
    Budget Act of 2013 (BBA), and the National Defense Authorization Act
    (NDAA) and Appropriations Act for fiscal year 2015. Then, I will
    provide details of our PB-16 submission.
                               strategic guidance
        The governing document for PB-16 is the Secretary of Defense's 2014
    Quadrennial Defense Review (QDR). The QDR uses the President's 2012
    Defense Strategic Guidance (DSG) as a foundation and builds on it to
    describe the Department of Defense's role in protecting and advancing
    U.S. interests and sustaining global American leadership. The DSG and
    its 10 Primary Missions of the U.S. Armed Forces have guided Navy's
    planning for the past 3 years. Validated by the QDR, those missions
    remain the baseline against which I measure our posture in various
    fiscal scenarios. Also, 2020 is the ``benchmark'' year identified by
    the DSG, and that remains the timeframe on which my assessments are
    focused.
        The QDR's updated strategy is built on three pillars: Protect the
    Homeland, Build Security Globally, and Project Power and Win
    Decisively. In support of these, it requires the Navy to ``continue to
    build a future Fleet that is able to deliver the required presence and
    capabilities and address the most important warfighting scenarios.''
        In order to improve its ability to meet the Nation's security needs
    in a time of increased fiscal constraint, the QDR also calls for the
    Joint Force to ``rebalance'' in four key areas: (1) rebalancing for a
    broad spectrum of conflict; (2) rebalancing and sustaining our presence
    and posture abroad; (3) rebalancing capability, capacity, and readiness
    within the Joint Force; and (4) rebalancing tooth and tail. To satisfy
    these mandates of the QDR strategy, the Navy has been compelled to make
    tough choices between capability, capacity, and readiness across a wide
    range of competing priorities. Our fundamental approach to these
    choices has not changed since I assumed this position. We continue to
    view each decision through the lens of the tenets I established when I
    took office: Warfighting First, Operate Forward, Be Ready.
                                    overview
        Sequestration deeply affected the Navy budget in fiscal year 2013
    and we have not yet recovered. Stabilized funding in fiscal year 2014
    and 2015 provided by the BBA, along with an additional $2.2 billion
    above Navy's requested budget in fiscal year 2015, provided limited
    relief from sequestered Budget Control Act of 2011 (BCA) funding levels
    and helped Navy's overall posture. However, the cumulative effect of
    budget shortfalls over these years has forced the Navy to accept
    significant risk in key mission areas, notably if the military is
    confronted with a technologically advanced adversary or forced to deny
    the objective of an opportunistic aggressor in a second region while
    engaged in a major contingency. By ``risk,'' we mean that some of our
    platforms will arrive late to the combat zone, and engage in conflict
    without the benefit of markedly superior combat systems, sensors and
    networks, or desired levels of munitions inventories. In real terms,
    this means longer timelines to achieve victory, more military and
    civilian lives lost, and potentially less credibility to deter
    adversaries and assure allies in the future.
        The PB-14 Future Years Defense Program (FYDP) submission was the
    baseline required by Navy to carry out all 10 DSG missions. Over the
    last 3 years, however, the Navy funding under sequestration and the BBA
    was $25 billion less than the PB-13/14 submissions, shortfalls that
    manifest in the continued erosion of our warfighting advantages in many
    areas relative to potential adversaries. PB-16 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. Should resources be
    further reduced below PB-16 levels, and certainly if sequestered, the
    DSG will need to be revised.
        If budgeted at PB-16 levels, we assess that the Navy of 2020 will:
    \1\
    ---------------------------------------------------------------------------
        \1\ Navy revised the accounting guidelines for its Battle Force
    according to requirements set forth in the fiscal year 2015 National
    Defense Authorization Act. Numbers in this statement are not directly
    comparable to those used in prior testimony, see chart below. The NDAA
    prohibits inclusion of `` . . . patrol coastal ships, non-commissioned
    combatant craft specifically designed for combat roles, or ships that
    are designated for potential mobilization.'' Ships that were counted
    last year, but are no longer counted, are Patrol Craft (PC) and
    Hospital Ships (T-AH). The following illustrates the differences
    between new and old Battle Force accounting guidelines: PB-16 New
    Guidelines--As of 1 Jan 2015: 279; Fiscal year 2016: 282; Fiscal year
    2020: 304. PB-16 Old Guidelines--As of 1 Jan 2015: 288; Fiscal year
    2016: 291; Fiscal year 2020: 308.
    ---------------------------------------------------------------------------
      --Include 304 ships in the Battle Force, of which about 115 will be
            deployed. This global deployed presence will include more than
            two Carrier Strike Groups (CSG) and two Amphibious Ready Groups
            (ARG) deployed, on average.
      --In the best case, provide ``surge'' capacity of about three CSGs
            (by approximately 2018) and three ARGs (by approximately 2020),
            not deployed, but ready to respond to a contingency.
      --Deliver forces to conduct the DSG primary mission Deter and Defeat
            Aggression, but with higher risk compared to PB-14 due to
            capacity and readiness challenges.
      --Conduct, but with greater risk, the DSG primary mission Project
            Power Despite Anti-Access/Area Denial (A2/AD) Challenges
            against a technologically advanced adversary compared to PB-14.
            This is principally due to the slower delivery of new critical
            capabilities, particularly in air and missile defense, and
            overall ordnance capacity.
        To ensure the Navy remains a balanced and ready force while
    complying with the reduction in funding below our PB-14 plan, we were
    compelled to make difficult choices in PB-16, including: slowing cost
    growth in compensation and benefits; deferring some ship modernization;
    deferring procurement of 18 of Navy's most advanced aircraft; delaying
    over 1,000 planned weapons procurements; and continuing to reduce
    funding for base facilities sustainment, restoration, and
    modernization. Deferments in PB-16 compound modernization delays we
    were compelled to accept in PB-15 due to budget constraints.
        Additional challenges are on the horizon. In the long term beyond
    2020, I am increasingly concerned about our ability to fund the Ohio
    Replacement ballistic missile submarine (SSBN) program--our highest
    priority program--within our current and projected resources. The Navy
    cannot procure the Ohio Replacement in the 2020s within historical
    shipbuilding funding levels without severely impacting other Navy
    programs.
             continuing impact of sequestration in fiscal year 2013
        Sequestration in fiscal year 2013 resulted in a $9 billion
    shortfall in Navy's budget, as compared to the PB-13 submission. This
    instance of sequestration was not just a disruption, it created
    readiness consequences from which we are still recovering, particularly
    in ship and aircraft maintenance, Fleet response capacity, and
    excessive CSG and ARG deployment lengths. As I testified in November
    2013, March 2014, and January 2015, the continuing resolution and
    sequestration reductions in fiscal year 2013 compelled us to reduce
    both afloat and ashore operations, which created ship and aircraft
    maintenance and training backlogs. To budget for the procurement of
    ships and aircraft appropriated in fiscal year 2013, Navy was compelled
    to defer some purchases to future years and use prior-year investment
    balances to mitigate impacts to programs in fiscal year 2013 execution.
    The most visible impacts occurred in Operations and Maintenance funded
    activities. Specific impacts to Navy programs include:
      --Cancelled five ship deployments.
      --Delayed deployment of USS Harry S. Truman strike group by 6 months.
      --Inactivated, instead of repaired, USS Miami.
      --Reduced facilities restoration and modernization by about 30
            percent (to about 57 percent of the requirement).
      --Reduced base operations, including port and airfield operations, by
            about 8 percent (to about 90 percent of the requirement).
      --Furloughed civilian employees for 6 days, which, combined with a
            hiring freeze and no overtime for 6 months, reduced our
            maintenance and sustainment output through lost production and
            support from logisticians, comptrollers, engineers, contracting
            officers, and planners.
      --Cancelled Fleet engagements and most port visits, except for
            deployed ships.
        While the Navy was able to reprioritize within available resources
    to continue to operate in fiscal year 2013, this is not a sustainable
    course for future budgets. The actions we took in 2013 to mitigate
    sequestration only served to transfer bills amounting to over $4
    billion to future years for many procurement programs--those carryover
    bills were addressed in Navy's fiscal year 2014 and fiscal year 2015
    budgets. If we were sequestered again, we would be forced to degrade
    current and future Fleet readiness.
        Shortfalls caused by the fiscal year 2013 sequestration remain in a
    number of areas and the Navy is still working to recover from them. For
    example, we have not yet caught up from shipyard maintenance backlogs.
    We are working through shipyard personnel capacity issues to determine
    when ships can be fit back into the maintenance cycle and are balancing
    that against operational demands on the ships to ensure we meet the
    global force management requirement for Combatant Commands. The result
    of maintenance and training backlogs has meant delayed preparation for
    deployments, forcing us, in turn, to extend the deployments of those
    units already on deployment. Since 2013, many CSGs, ARGs, and
    destroyers have been on deployment for 8-10 months or longer. This
    comes at a cost to the resiliency of our people, sustainability of our
    equipment, and service lives of our ships.
        Maintenance and training backlogs have also reduced Navy's ability
    to maintain required forces for contingency response to meet Combatant
    Command operational plan requirements. Although the requirement calls,
    on average, for three additional CSGs and three additional ARGs to
    deploy within 30 days for a major crisis, Navy has only been able to
    maintain an average of one group each in this readiness posture. Root
    causes can be traced to the high operational tempo of the Fleet, longer
    than expected shipyard availabilities, and retirements of experienced
    shipyard workers, but the fiscal year 2013 sequestration exacerbated
    the depth of this problem and interfered with our efforts to recover.
        Assuming a stable budget and no major contingencies for the
    foreseeable future, I estimate it is possible to recover from the
    maintenance backlogs that have accumulated from the high operational
    tempo over the last decade of war and the additional effects of
    sequestration by approximately 2018 for CSGs and approximately 2020 for
    ARGs, 5 plus years after the first round of sequestration. This is a
    small glimpse of the readiness ``price'' of sequestration.
                               where we are today
        Before describing our fiscal year 2016 submission, I will discuss
    the Navy's current posture, which established the baseline for our PB-
    16 budget.
        Congress's passage of the BBA averted about $9 billion of an
    estimated $14 billion reduction we would have faced under sequestration
    in fiscal year 2014. It enabled us to fund all planned ship and
    aircraft procurement in fiscal year 2014, but cumulatively the
    shortfalls increased risk in Navy's ability to execute DSG missions.
    The BBA still left a $5 billion shortfall below PB-14 in our
    investment, operations, and maintenance accounts.\2\ The shortage in
    funding compelled us to reduce procurement of weapons (many missile
    types) and aircraft spare parts, defer asymmetric research and
    development projects, cancel repair and maintenance projects for
    facilities ashore, and defer procurement of maintenance/material
    support equipment for the Fleet.
    ---------------------------------------------------------------------------
        \2\ Congress subsequently added $3.4 billion in fiscal year 2014,
    which added an SSN and increased Navy's Ship Modernization, Operations,
    and Sustainment Fund (SMOSF).
    ---------------------------------------------------------------------------
        The recent passage of the fiscal year 2015 NDAA and Consolidated
    and Further Continuing Appropriations Act averted about $2 billion of
    the estimated $13 billion reduction that Navy would have faced under
    sequestration; an $11 billion shortfall remains (as compared to PB-14).
    Although the funding enabled us to continue the refueling and complex
    overhaul of the USS George Washington (CVN 73), Navy was forced to
    balance its portfolio to mitigate the shortfall by making choices
    between capability, capacity, and readiness. We were compelled to
    further reduce the capacity of weapons and aircraft, slow
    modernization, and delay upgrades to all but the most critical shore
    infrastructure. As I described in testimony in March 2014, PB-15
    represented another iterative reduction from the resources we indicated
    were necessary to fully resource the DSG missions, making Navy less
    ready to successfully Deter and Defeat Aggression and Project Power
    Despite Anti-Access/Area Denial (A2/AD) Challenges. Continuing along
    this budget trajectory means that by 2020, Navy will not have recovered
    sufficient contingency response capacity to execute large-scale
    operations in one region, while simultaneously deterring another
    adversary's aggression elsewhere. Also, we will lose our advantage over
    adversaries in key warfighting areas such as Anti-Surface Warfare,
    Anti-Submarine Warfare, Air-to-Air Warfare, and Integrated Air and
    Missile Defense.
         our strategic approach to president's budget fiscal year 2016
        In developing our PB-16 submission, we evaluated the warfighting
    requirements to execute the primary missions of the DSG. These were
    informed by: (1) current and projected threat, (2) global presence
    requirements defined by the Global Force Management Allocation Plan
    (GFMAP), and (3) warfighting scenarios as described in Combatant
    Commanders' Operation Plans (OPLANs) and Secretary of Defense-approved
    Defense Planning Scenarios (DPS). We used these warfighting scenarios
    to assess our ability to execute more than 50 end-to-end capabilities,
    also known as ``kill chains'' or ``effects chains.'' These chains
    identify all the elements needed to provide a whole capability,
    including sensors, communications (networks), operators, platforms, and
    weapons. To arrive at a balanced program within fiscal guidance, we
    focused first on building appropriate capability, then delivering it at
    a capacity we could afford. Six budget priorities guided us:
        First, maintain a credible, modern, and survivable sea-based
    strategic deterrent. Under the New START Treaty, the Navy SSBN force
    will carry about 70 percent of the U.S. strategic nuclear warheads by
    2020. Our PB-16 request sustains today's 14-ship SSBN force, the
    Trident D5 ballistic missile and support systems, and the Nuclear
    Command, Control, and Communications (NC3) suite. The Ohio-class SSBN
    will begin retiring, one per year, beginning in 2027. To continue to
    meet U.S. Strategic Command presence and surge requirements, PB-16
    continues to support construction of the first Ohio Replacement SSBN in
    2021 for delivery in 2028 and first deterrent patrol in 2031. As part
    of the Navy's Nuclear Enterprise Review, our PB-16 submission also adds
    approximately $2.2 billion across the FYDP to: (1) increase shipyard
    and Nuclear Strategic Weapons Facilities (SWF) capacity by funding
    required civilian end-strength; (2) accelerate investments in shipyard
    infrastructure; (3) fund additional manpower associated with nuclear
    weapons surety; and (4) fund key nuclear weapons training systems.
        Second, sustain forward presence of ready forces distributed
    globally to be where it matters, when it matters. We continue to
    utilize cost-effective approaches such as forward basing, forward
    operating, and forward stationing ships in the Asia-Pacific, Europe,
    and the Middle East. Rotational deployments will be stabilized and more
    predictable through continued implementation of an improved deployment
    framework called the Optimized Fleet Response Plan (O-FRP). We will
    distribute our ships to align mission and capabilities to global
    regions, ensuring high-end combatants are allocated where their unique
    capabilities are needed most. We will meet the adjudicated fiscal year
    2016 GFMAP; this represents about 45 percent of the global Geographic
    Combatant Commander (GCC) requests. Sourcing all GCC requests would
    require about 450 combatant ships with requisite supporting structure
    and readiness.
        Third, strengthen the means (capability and capacity) to win in one
    multi-phase contingency operation and deny the objectives of--or impose
    unacceptable costs on--another aggressor in another region. PB-16
    prioritizes investments to close gaps in critical kill chains, but
    accepts risk in capacity or in the rate at which some capabilities are
    integrated into the Fleet.
        Fourth, focus on critical afloat and ashore readiness. PB-16 helps
    improve the overall readiness of our non-deployed forces, but not to
    our satisfaction. With a stable budget and no major contingencies for
    the foreseeable future, I estimate it is possible to recover from the
    maintenance backlogs by approximately 2018 for CSGs and approximately
    2020 for ARGs. Facilities Sustainment, Restoration, and Modernization
    (FSRM) funds are increased for fiscal year 2016 to arrest the decline
    of facilities conditions, but then FSRM funds are inadequate for the
    remainder of the FYDP, in order to fund afloat readiness. Our budget
    constraints prevent us from funding all but the most critical shore
    facility upgrades in fiscal year 2017 and beyond.
        Fifth, sustain or enhance Navy's asymmetric capabilities in the
    physical domains, as well as in cyberspace and the electromagnetic
    spectrum. PB-16 prioritizes capabilities to deal with adversary
    threats, including electromagnetic spectrum and cyber capabilities and
    those capabilities that provide joint access developed in concert with
    other Services under the Joint Concept for Access and Maneuver in the
    Global Commons (formerly known as Air-Sea Battle). In line with
    USCYBERCOM priorities, we are investing in cyber defense-in-depth and
    expansion of cyber defense initiatives to tactical platform Information
    Technology systems, boundary defense solutions for ships, and security
    improvements for our C4I systems.
        Sixth, sustain a relevant industrial base, particularly in
    shipbuilding. We will continue to evaluate the impact of our investment
    plans on our industrial base, including ship and aircraft builders,
    depot maintenance facilities, equipment and weapons manufacturers, and
    science and technology researchers. The government is the only customer
    for some of our suppliers, especially in specialized areas such as
    nuclear power. PB-16 addresses the health of the industrial base by
    sustaining adequate capacity, including competition, where needed and
    viable. While prioritizing required capabilities, we also sought to
    sustain a viable industrial base.
                                 what we can do
        As described earlier, due to the impact of prior year shortfalls
    and modernization deferrals in the PB-16 FYDP, we still face
    significant risk in executing at least two of ten primary missions of
    the DSG in 2020. The 2014 update to the ``2012 Force Structure
    Assessment'' (FSA) and other Navy analysis describe the baseline of
    ships needed to support meeting each mission. Against that baseline and
    using a rigorous assessment of over 50 capabilities (with appropriate
    capacity) necessary to be tactically successful (called ``end-to-end
    kill chain'' analysis), we conclude that with PB-16, the Navy of 2020
    will support each of the 10 DSG missions as follows:
    Provide a Stabilizing Presence
        PB-16 will meet the adjudicated presence requirements of this
    mission. By increasing the number of ships forward stationed and
    forward based, and by improving our deployment preparation process
    called the Optimized Fleet Response Plan (O-FRP), presence improves in
    some global regions as compared to previous budget submissions. The
    Navy of 2020:
      --Provides a global presence of about 115 ships (same as PB-15); an
            increase over an average of 95 ships deployed today.
      --Increases presence in the Asia-Pacific region. This includes
            forward deploying an additional SSN to Guam, the most capable
            DDG to Japan, Mobile Landing Platform (MLP), Joint High Speed
            Vessel (JHSV), both Littoral Combat Ship (LCS) variants, MQ-8C,
            P-8A, EA-18G, upgraded F/A-18E/F, and E-2D. MQ-4C Triton high
            endurance unmanned aerial vehicles will operate from Guam in
            2017. This presence will assure allies, shape, and deter.
            However, a major maritime operation will require substantial
            naval forces to swing from other theaters or surge forward from
            CONUS bases.
      --``Places a premium on U.S. military presence in--and in support
            of--partner nations'' in the Middle East, by increasing
            presence by 40 percent to about 36 ships in 2020. Though not
            counted in Navy's Battle Force, 10 of our Patrol Craft (PC)
            serve as Forward Deployed Naval Forces (FDNF) operating out of
            Bahrain, and seven LCS will join them by the end of 2020. In
            2016, Navy's first Mobile Landing Platform/Afloat Forward
            Staging Base (MLP/AFSB) will augment the on-station AFSB-
            Interim (a modified dock landing ship) to support Special
            Operations Forces and augment mine countermeasure capability.
      --Continues to ``evolve our posture'' in Europe by meeting ballistic
            missile defense (BMD) European Phased Adaptive Approach (EPAA)
            requirements with four BMD-capable guided missiles destroyers
            (DDG) in Rota, Spain, and two land-based sites in Poland and
            Romania. The first two DDGs arrived in 2014 and all four will
            be in place by the end of 2015. Additional presence in Europe
            will be provided by forward operating JHSVs and rotationally
            deployed combatants.
      --Will provide ``innovative, low-cost and small-footprint
            approaches'' to security in Africa and South America by
            deploying one JHSV, on average, to each region. Beginning in
            fiscal year 2015, we will deploy one hospital ship (T-AH), on
            average, and, beginning in fiscal year 2016, add one PC ship,
            on average, to South America. AFSBs forward operating in the
            Middle East could also provide additional presence in Africa as
            required. As available, we are deploying ships for shorter
            periods (< = 2 months) in theaters other than those which they
            would be primarily assigned (e.g., AFRICOM and SOUTHCOM).

           Figure 2: The Navy's Forward Presence in Fiscal Year 2020

    Counter Terrorism and Irregular Warfare (CT/IW)
        We will have the capacity to conduct widely distributed CT/IW
    missions. This mission requires Special Operations Forces, Navy
    Expeditionary Combat capabilities such as Explosive Ordnance Disposal
    (EOD), Combined Explosive Exploitation Cells (CEXC), Intelligence
    Exploitation Teams (IET), and a variety of platforms that can
    accommodate adaptive force packages. PB-16 procures a third MLP/AFSB in
    fiscal year 2017 for delivery in fiscal year 2020, and funds an
    enhanced SOF capability on all three AFSBs, which provides more robust
    medical facilities, improved C4I, and increased accommodation for
    aircraft, and other SOF-specific equipment. PB-16 also procures ten MQ-
    8C Fire Scout systems for deployments aboard LCS, which are
    fundamentally multi-mission.
    Deter and Defeat Aggression
        Navy inherits and continues to experience high risk in this
    warfighting mission. Our FSA described the ship force structure
    necessary to meet this mission's requirement: to be able to conduct one
    large-scale operation and ``simultaneously be capable of denying the
    objectives of--or imposing unacceptable costs on--an opportunistic
    aggressor in a second region.'' According to the FSA, the Navy has a
    requirement for a force of 11 CVN, 88 large surface combatants (DDG and
    CG), 48 attack submarines (SSN), 12 SSBN, 11 large amphibious assault
    ships (LHA/D), 12 amphibious transport docks (LPD), 11 dock landing
    ships (LSD), 52 small surface combatants, 10 JHSV, 29 combat logistics
    force (CLF) ships, and 24 command and support ships. Provided
    sufficient readiness is restored and maintained across the Fleet, this
    globally distributed force will yield a steady state deployed presence
    of more than two CSG and two ARG, with three CSG and three ARG ready to
    deploy within 30 days in response to a contingency (``surge''). PB-16
    puts Navy on a path to procure the right mix of ships as defined by the
    FSA; however, the 2020 Battle Force will have a shortfall of small
    surface combatants due to a gap in FFG and MCM retirements and LCS
    deliveries. Other sources of risk in this primary mission are less
    aircraft, modern sensors, networks, and weapon procurements across the
    FYDP. Slowed modernization across the Fleet is a serious concern.
    Conduct Stability and Counterinsurgency Operations
        The Navy of 2020 will be able to meet the requirements of this DSG
    mission.
    Project Power Despite Anti-Access/Area Denial (A2/AD) Challenges
        Our power projection capability, reconstitution of weapons systems,
    and modernization programs to enable Joint Assured Access have been
    deferred due to budget constraints over the last 3 years. This reduces
    options and decreases our ability to assure access in all domains
    (space, air, surface, subsurface, and cyber). Over the last 3 years,
    funding shortfalls required us to reduce procurement in weapons by over
    4,000 planned quantities. We continue to take risk in capacity in order
    to preserve investments in developing future capabilities. This reduced
    procurement of weapons and deferring of air and missile defense
    capabilities, coupled with joint force deficiencies in wartime
    information transport, C2 resiliency, and airborne ISR, will result in
    high risk in conducting this DSG mission if we are faced with a
    technologically advanced adversary.
    Counter Weapons of Mass Destruction
        This mission has two parts: (1) interdicting weapons of mass
    destruction as they proliferate from suppliers, and (2) defeating the
    means of delivery during an attack. PB-16 will continue to meet the
    requirements for this mission by providing sufficient deployed CSG,
    ARG, and surface combatants, as well as Navy special warfare personnel
    (SEAL) and EOD platoons, to address the first part. For the second
    part, BMD-capable DDG exist in sufficient numbers to meet the majority
    of GCC presence requirements under the GFMAP, and can be postured to
    counter weapons delivered by ballistic missiles in regions where
    threats are more likely to originate. That said, missile defense
    capacity in some scenarios remains a challenge.
    Operate Effectively in Space and Cyberspace
        Our PB-16 submission continues to place priority on cyber efforts
    to build the Navy's portion of the DOD's Cyber Mission Forces and
    strengthen our cyber defense capabilities afloat and ashore. We have
    accessed about 80 percent of the 1,750 cyber operators that will form
    40 cyber mission teams by the end of 2016; we will continue to recruit,
    hire, and train this force. Additionally, we will align Navy networks
    with a more defensible DOD Joint Information Environment (JIE) through
    the implementation of the Next Generation Enterprise Network (NGEN)
    ashore and Consolidated Afloat Networks and Enterprise Services (CANES)
    at sea. We will continue funding for the launch and sustainment of the
    Mobile User Objective System (MUOS), DOD's newest and most robust
    solution for extending narrowband Ultra High Frequency Satellite
    Communications (SATCOM) connectivity ashore, in flight, and at sea.
    Also critical to assured command and control, PB-16 continues funding
    the installation and sustainment of the Navy Multiband Terminal (NMT),
    our newest and most robust solution for giving surface and submarine
    forces access to wideband Super High Frequency and Extremely High
    Frequency SATCOM connectivity.
    Maintain a Safe, Secure, and Effective Nuclear Deterrent
        This mission is the Navy's top priority in any fiscal scenario, and
    our PB-16 submission meets its requirements. Our sea-based strategic
    deterrent remains safe, secure, credible, and effective today, but Navy
    is also implementing 27 specific actions based on the DOD Nuclear
    Enterprise Review recommendations, including oversight, training,
    policy, and process improvements, funded with an additional PB-16
    investment of over $400 million in fiscal year 2016 and over $2 billion
    across the FYDP. Our PB-16 submission satisfies STRATCOM demand for at-
    sea SSBN availability through the end of the current Ohio-class's
    service life. Navy's PB-16 submission also funds Nuclear Command,
    Control, and Communications (NC3) modernization, Trident D5 ballistic
    missile Life Extension Program (LEP) to maintain a 2017 Initial
    Operational Capability (IOC), and Common Missile Compartment
    development on a 2019 delivery timeline. Continued Congressional
    support for Naval Reactors' Department of Energy (DoE) funding is
    essential to maintain life-of-the-ship core reactor design and
    development synchronization with our Ohio Replacement shipbuilding
    schedule, which ensures lead ship procurement in 2021, and refueling of
    the land-based prototype. Naval Reactors' DoE budget also includes the
    second year of funding for the Spent Fuel Handling Project (SFHP),
    recapitalization of which is critical to the Navy's refueling and
    defueling schedule of nuclear-powered aircraft carriers and submarines.
    Defend the Homeland and Provide Support to Civil Authorities
        PB-16 will maintain an appropriate capacity of aircraft carriers,
    surface combatants, amphibious ships, and aircraft that are not
    deployed and are ready for all homeland defense missions.
    Conduct Humanitarian, Disaster Relief, and Other Operations
        Navy's global presence and training is sufficient to conduct these
    operations.
                                 modernization
        The following paragraphs describe specific PB-16 programs that
    influence our ability to conduct the missions required by the DSG, and
    the impact of programmatic action:
    Shipbuilding
        Navy shipbuilding priorities remain largely consistent with PB-15.
    Navy will procure 48 ships across the fiscal year 2016-2020 period.
    Fourteen Battle Force ships will be delivered in fiscal year 2016
    alone. PB-16:
      --Maintains funding to support RDTE and advanced procurement of the
            first Ohio Replacement SSBN, our highest priority program.
            Without increased shipbuilding funding in fiscal year 2021 and
            beyond, Ohio Replacement SSBN funding will consume the majority
            of Navy's annual shipbuilding budget, and degrade other
            shipbuilding programs. Appropriations for SSBN recapitalization
            are historically consistent with the last period of SSBN
            procurement between 1974 and 1990.
      --Fully funds USS George Washington (CVN 73) refueling and complex
            overhaul.
      --Procures 10 Arleigh Burke-class DDG (one Flight IIA and nine Flight
            III) in the FYDP, two per year, resulting in an inventory of 72
            by 2020. The first Flight III DDG, which will incorporate the
            advanced AN/SPY-6 radar (formerly called the Air and Missile
            Defense Radar, or AMDR), will be procured in fiscal year 2016
            and delivered in fiscal year 2021.
      --Procures 10 Virginia-class SSNs in the FYDP, two per year,
            resulting in an inventory of 22 Virginia-class submarines (51
            total SSNs of all types) by 2020.
      --Funds the final nine LCS (Flt 0+) across the FYDP (three per year
            fiscal year 2016-2018). Then beginning in fiscal year 2019,
            Navy will procure new Small Surface Combatants (two in fiscal
            year 2019, three in fiscal year 2020) based on upgraded
            variants of the LCS that Navy will designate as ``Frigates''
            (FF). There will be no construction gap between procurement of
            the last LCS (Flt 0+) and the first ``frigate.'' The new
            ``frigate'' will offer improvements in capability, lethality,
            and survivability.
      --Funds replacement of LSD amphibious ships with the LX(R) starting
            with advanced procurement in fiscal year 2019 and procurement
            of the first LX(R) in fiscal year 2020. LX(R) serial production
            will begin in fiscal year 2022.
      --Procures a twelfth LPD, which will be developed in parallel with
            the LX(R) program and incorporate targeted design and
            construction initiatives to increase affordability. Adding LPD
            28 to the inventory will help mitigate expeditionary capability
            and amphibious lift shortfalls.
      --Funds four Fleet oilers (T-AO(X)) across the FYDP beginning in
            fiscal year 2016. T-AO(X) replaces the aging single hull fleet
            oiler. This new procurement ensures continued combat logistics
            support to our ships.
      --Funds five Fleet salvage ships (T-ATS(X)) across the FYDP beginning
            in fiscal year 2017. These new ships replace the two aging
            salvage class ships with a single class while improving
            capability and performance.
    Combatant Ship Modernization
        In parallel with shipbuilding, PB-16 continues modernization of in-
    service platforms to allow our combatants to remain relevant and reach
    their expected service lives. The ship modernization program does not
    keep pace to deal with high-end adversary weapons systems by 2020.
    Flight I and II of the Arleigh Burke-class DDG began mid-life
    modernization in fiscal year 2010; 13 will have completed Hull
    Mechanical and Electrical (HM&E) modernization by the end of 2016, and
    6 of these ships will have also completed combat systems modernization.
    In fiscal year 2017, we will begin to modernize the Flight IIA DDGs.
    However, due to fiscal constraints we were compelled to reduce the
    combat systems procurements of one DDG Flight IIA per year, starting in
    fiscal year 2016. This will result in some destroyers not receiving
    combat systems upgrades when originally planned to allow them to pace
    the threat, particularly in Anti-Air Warfare (AAW) and Ballistic
    Missile Defense (BMD).
        In order to maintain force structure that provides Air Defense
    Commander support to the CSGs, Navy will induct two Guided Missile
    Cruisers (CGs) into phased modernization in fiscal year 2015 and an
    additional two in fiscal year 2016. This will place a total of four
    ships in modernization with the intent that each ship period will be
    limited to 4 years. We are committed to modernizing a total of 11 CGs
    in the current modernization program. Without any phased modernization
    program, the CG class will retire, without replacement, at the end of
    their service lives between 2020 and 2030. Using the Congressionally
    directed 2/4/6 plan, the final retirements will occur between 2036 and
    2039. Under the Navy's original PB-15 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. We request Congressional support for Navy's original
    plan.
        Nine of 12 Whidbey Island-class LSDs have undergone a mid-life
    update and preservation program, two are currently being modernized,
    and one more will be inducted into phased modernization in fiscal year
    2016. Modernization of seven Wasp-class large deck amphibious assault
    ships (LHD) was delayed by 2 years, and they will now complete mid-life
    modernization by fiscal year 2024. Modernization of the eighth LHD, USS
    Makin Island, will be addressed in subsequent budget submissions.
                             warfighting capability
    Aviation
        PB-16 continues our transition, albeit more slowly than desired, to
    the ``Future Air Wing.'' This transition will dramatically improve our
    capabilities and warfighting capacity across critical ``kill chains.''
    But, funding shortfalls have stretched (deferred) modernization plans
    in this area. This delay will call into question our ability to deal
    with near peer competitors, especially if directed to carry out our DOD
    campaign plan in the 2020 timeframe. Specifically, we will continue to
    field more advanced land-based maritime patrol aircraft (manned and
    unmanned) to evolve our ISR, ASW, and sea control capabilities and
    capacity. To further these objectives, PB-16 provides the following
    capabilities:
      --Navy Integrated Fire Control-Counter Air (NIFC-CA) Increment I
            capability will field with the E-2D Advanced Hawkeye aircraft
            in 2015, with four air wings transitioned to the E-2D by 2020.
            This integrates aircraft sensor and ship weapons capabilities,
            improving lethality against advanced air and missile threats.
            However, we deferred two E-2D outside the FYDP (procure 24 vice
            26).
      --The F-35C Lightning II, the carrier-based variant of the Joint
            Strike Fighter, is scheduled to achieve IOC in 2018. However,
            F-35C procurement will be reduced by 16 airframes (from 54 to
            38) across the PB-16 FYDP when compared to PB-15. The F-35C,
            with its advanced sensors, data sharing capability, and ability
            to operate closer to threats, is designed to enhance the air
            wing's ability to find targets and coordinate attacks.
      --Continued support for a Service Life Extension Program (SLEP) for
            the legacy F/A-18A-D Hornet to meet our strike fighter
            inventory needs while integrating the F-35C. With SLEP
            modifications, some of these aircraft will achieve as much as
            10,000 lifetime flight hours, or 4,000 hours and (16 years)
            beyond their originally designed life.
      --To address Navy electronic attack requirements, EA-18G will reach
            full operational capability in fiscal year 2017. Replacement of
            the aging ALQ-99 jamming pods begins in fiscal year 2021, when
            the Next Generation Jammer (NGJ) Increment I, featuring
            upgraded capabilities against mid-band frequencies, reaches
            IOC. NGJ Increment II research and development on low band
            frequencies remains funded for fiscal year 2016.
      --All components of an improved air-to-air ``kill chain'' that
            employs infrared (IR) sensors to circumvent adversary radar
            jamming will be delayed another year. PB-16 increased funding
            to procure an additional 28 Infrared Search and Track (IRST)
            Block I sensor pods for F/A-18E/F Super Hornet, for a total of
            60, across the FYDP; however, the IRST Block I sensor system
            will field in 2018 (versus 2017 under PB-15) and the improved
            longer range IRST Block II will not deliver until 2022 (versus
            2019 under PB-15).
      --Improvements continue to the air-to-air radio frequency ``kill
            chain'' that defeats enemy jamming at longer ranges. By 2020,
            380 jamming protection upgrade kits for F/A-18E/F Super Hornets
            and EA-18G Growler will be delivered. But, we were compelled to
            defer 180 kits beyond the FYDP.
      --Integrates the Small Diameter Bomb II (SDB II) on the F/A-18 by
            fiscal year 2020, and procures 1,590 units across the FYDP to
            enhance carrier air wing precision strike capabilities.
      --V-22 (Navy variant) aircraft have been selected as the solution to
            the aging C-2 Carrier Onboard Delivery (COD) aircraft. PB-16
            procures 24 aircraft over the FYDP with an IOC of fiscal year
            2021. The V-22 (Navy variant) extends the range and in
            increases the flexibility of Strike Group resupply.
      --Navy's commitment to the Unmanned Carrier-Launched Airborne
            Surveillance and Strike System (UCLASS) program continues.
            However, a DOD-wide Strategic Portfolio Review will delay
            UCLASS Air Vehicle segment contract award by at least 1 year.
            The remaining UCLASS Carrier Integration and Connectivity and
            Control System segments will continue and are funded through
            the FYDP.
    Long Range Strike
        Our precision strike capabilities and capacity will be critical to
    success in any foreseeable future conflict. Potential adversaries have
    already fielded and continue to develop advanced, long range weapons
    that will require effective counters. We remain challenged in this
    area. Accordingly, PB-16:
      --Funds Virginia Payload Module (VPM) RDT&E and SCN to accelerate
            inclusion of VPM on at least one Virginia Class Block V SSN per
            year in fiscal year 2019 and 2020. VPM will enable Virginia-
            class SSNs to mitigate the loss of SSGN strike capacity as they
            begin to retire in 2026. VPM will more than triple the Tomahawk
            Land Attack Missile (TLAM) Block IV strike capacity of a
            Virginia-class SSN from 12 to 40 missiles.
      --Supports the existing Tactical Tomahawk cruise missile inventory by
            extending service life through investments in critical
            capability enhancements and vital parts to achieve maximum
            longevity. PB-16 adds 100 Tomahawks in fiscal year 2016.
            Production deliveries will now continue through fiscal year
            2018, which minimizes factory impact until the start of
            Tomahawk Block IV inventory recertification and modernization
            beginning in fiscal year 2019.
      --Invests in future capability by commencing an analysis of
            alternatives for the Next Generation Land Attack Weapon
            (NGLAW), with a planned Fleet introduction in the 2024-2028
            timeframe, at least a decade prior to the sundown of TLAM Block
            IV in the 2040s.
    Anti-Surface Warfare
        Navy remains challenged in this mission area due to both capability
    and capacity shortfalls. To deal with potential adversaries' long-range
    anti-ship cruise missiles and maritime air defenses, PB-16 implements a
    plan to deliver a family of anti-surface warfare (ASuW) capabilities.
    The program maintains current ASuW capability inherent in the Harpoon
    missile, Standoff Land Attack Missile-Expanded Response (SLAM-ER),
    Joint Standoff Weapon (JSOW) C-1, and Mk48 Advanced Capability (ADCAP)
    torpedoes. In the near term, we are pursuing options to develop an
    improved, longer range ASuW capability by leveraging existing weapons
    to minimize technical risk, costs, and development time. Five of ten
    Patrol Craft in the Arabian Gulf have been upgraded with short-range
    Griffin missiles, and the other five will receive them by the end of
    2015. Additionally, PB-16 funds enhanced ASuW lethality for LCS by
    integrating surface-to-surface missiles (Hellfire Longbow) onto those
    platforms starting in 2017. Navy is evaluating which missile to select
    to provide upgraded LCS (``frigates'') an additional and even longer
    range over-the-horizon missile capability. Also, PB-16 continues to
    accelerate acquisition of the Long Range Anti-Ship Missile (LRASM) air-
    launched variant, which will achieve early operational capability on F/
    A-18E/F aircraft in fiscal year 2019.
    Anti-Submarine Warfare
        PB-16 sustains our advantage in the undersea domain by delivering
    the following capabilities, although capacity challenges persist:
      --Procures 47 P-8A Poseidon maritime patrol aircraft, replacing the
            legacy P-3C Orion's capability, and completing the transition
            by fiscal year 2019. We continue investments in the development
            of a high-altitude anti-submarine warfare capability (HAAWC),
            which is composed of a MK 54 torpedo kit and software support
            system.
      --Continues installation of ASW combat systems upgrades for DDGs and
            improved Multi-Function Towed Arrays (MFTA) for DDGs and CGs.
            Both installations will be complete on all DDGs forward based
            in the Western Pacific by 2018.
      --Continues upgrades to all our P-8A and ASW helicopters in the
            Western Pacific with sonobuoys and advanced torpedoes by 2018;
            however, in PB-16 we were compelled to reduce weapons capacity,
            which equated to cancelling 240 MK 54 lightweight torpedoes.
      --Procures 145 MK 48 ADCAP torpedoes over the FYDP to reduce a
            wartime requirement shortfall from 30 percent to 20 percent,
            and invests in modularity and endurance improvements to enable
            more efficient production, better performance, and future
            upgradability.
      --Improves surface ASW capability in the LCS ASW Mission Package by
            employing an MFTA in concert with variable depth sonar (VDS) in
            2016.
      --Defers recapitalization of our ocean surveillance ship, T-AGOS(X),
            from fiscal year 2020 to outside the FYDP, a reflection of our
            intent to extend the service life of our current T-AGOS
            vessels.
      --Develops and builds the Large Displacement Unmanned Undersea
            Vehicle (LDUUV) in the FYDP to augment submarine capabilities.
            We will use Office of Naval Research Innovative Naval Prototype
            large UUVs to train our Fleet operators, preparing them for
            LDUUV Fleet introduction in the early 2020s.
    Electromagnetic Maneuver Warfare
        PB-16 puts Navy on a path to maneuver more freely in the
    electromagnetic spectrum, while strengthening our capability to degrade
    adversaries' ability to do so. It maintains our investment in the
    Ships' Signals Exploitation Equipment (SSEE) Increment F, which equips
    ships with a capability to interdict the communications and address and
    offset elements of adversary kill chains by 2020. PB-16 adds an
    advanced geo-location capability to SSEE Increment F, which contributes
    to defeating the ``left side'' of the adversary's ballistic missile
    kill chain and C4ISR systems. It also increases our investment in
    upgraded electromagnetic sensing capabilities for surface ships via the
    Surface Electronic Warfare Improvement Program (SEWIP) Block 2 that
    will deliver in 2016, procuring an additional 14 systems. PB-16 begins
    low rate initial production of SEWIP Block 3 in 2017 to add jamming and
    deception capabilities to counter advanced anti-ship cruise missiles.
    PB-16 also stands up Real-Time Spectrum Operations (RTSO) as a Program
    of Record. RTSO will provide ships and strike groups the ability to
    sense, control, and plan the use of spectrum, detect interference,
    notify the operators of spectrum issues, and provide recommended
    actions allowing for command and control of the electromagnetic
    spectrum.
        Our cyber capability continues to afford the Navy a competitive
    advantage, but we are growing increasingly concerned about potential
    vulnerabilities that could affect combat readiness. Recognizing these
    risks, in fiscal year 2015 the Navy stood up a dedicated task force to
    evaluate our cyber security posture and manage our investment portfolio
    to ensure we are spending money where it matters most. In addition to
    evaluating our cyber risk and informing our budget process, the task
    force will also recommend changes to the Navy's acquisition and
    management of our networks and cyber-connected systems.
    Mine Warfare
        To enhance our ability to counter mines in the Middle East and
    other theaters, our PB-16 program sustains investments in the LCS mine
    countermeasures mission package (MCM MP), completing initial testing of
    its first increment in 2015 and achieving full operational capability
    in 2019. The MCM MP provides significantly faster rates of waterspace
    mine clearance over legacy counterparts. PB-16 also sustains our
    interim AFSB, USS Ponce, in service through at least fiscal year 2017.
    USS Ponce provides forward logistics support and command and control to
    MCM ships and helicopters, allowing them to remain on station longer
    and sustain a more rapid mine clearance rate. In the near-term, PB-16
    continues funding for Mk 18 Kingfish unmanned underwater vehicles (UUV)
    and Sea Fox mine neutralization systems deployed to the Arabian Gulf
    today, as well as increased maintenance and manning support for
    forward-deployed MH-53 airborne mine countermeasures platforms and
    Avenger-class MCM ships forward based in Bahrain.
                                   readiness
    Afloat Readiness
        PB-16 funds ship operations to 45/20 (deployed/non-deployed)
    steaming days per quarter. Overseas Contingency Operations (OCO) funds
    an additional 13/4 days (deployed/non-deployed), providing the training
    and operations required to meet our fiscal year 2016 GFMAP commitment.
    PB-16 baseline funds ship maintenance to 80 percent of the requirement,
    with OCO funding the remaining 20 percent, to continue life cycle
    maintenance reset of CVNs and surface force ships. To address the
    workload to be completed in our public shipyards, Navy funds additional
    workforce (up to 33,500 Full Time Equivalent workers by fiscal year
    2017) and will send selective submarines to private shipyards in fiscal
    year 2016 and fiscal year 2017.
        With respect to the Flying Hour Program, PB-16 achieves deployed
    readiness levels of T2.5/T2.0 (USN/USMC) in accordance with guidance
    for all carrier air wing (CVW) aircraft.\3\ Navy funds Aviation Depot
    Maintenance to 83 percent of the requirement, which puts the depots at
    capacity. As Aviation Depot Maintenance throughput improves, the
    associated F/A-18 flying hours and depot maintenance budgets will
    increase to the more notional level of 77 percent. PB-16 increases Navy
    Expeditionary Combat Command fiscal year 2016 base funding from 42
    percent to 80 percent. OCO funds the remaining 20 percent.
    ---------------------------------------------------------------------------
        \3\ Due to extended depot repair time, F/A-18A-D availability is
    reduced and shortfalls in aircraft will be borne by non-deployed
    forces. As more legacy F/A-18s approach their 6,000 hour design life
    and are inducted for assessment and life extension to 8,000 or 10,000
    hours, aviation depots are experiencing production challenges resulting
    in longer-than-expected repair cycle times for these aircraft. Navy has
    taken steps to better maintain and repair these legacy aircraft and
    expects to improve depot productivity by 2017, with the backlog fully
    recovered by 2019. In PB-16, Flying Hours for these aircraft will
    reflect the maximum executable profile and achieve T2.0 for deployment,
    with tailored T-ratings through the training cycle.
    ---------------------------------------------------------------------------
        Year after year, the Navy has consistently provided more global
    presence than authorized and adjudicated by the GFMAP. In 2013 and
    2014, for example, Naval forces provided 6 percent and 5 percent more
    forward presence, respectively, than planned due to emergent operations
    and unanticipated contingencies. This unbudgeted usage amounted to
    greater than 2,200 days in theater over that planned in 2013 and
    greater than 1,800 days in theater over that planned in 2014. We should
    operate the Fleet at sustainable presence levels, in order for the Navy
    to meet requirements while still maintaining material readiness, giving
    ships time to modernize, and allowing them to reach their expected
    service lives.
    Ashore Readiness
        To comply with fiscal constraints, we are compelled to continue
    accepting risk in shore infrastructure investment and operations. PB-16
    prioritizes nuclear weapons support, base security, and airport/seaport
    operations while maintaining our commitment to quality of life programs
    for our Sailors and Families. We are funding the sustainment,
    restoration, and modernization of our facilities at a level to arrest
    the immediate decline in the overall condition of our most critical
    infrastructure. Although fiscal year 2016 marks an improvement in the
    facilities funding when compared to PB-15, Navy is still below the DOD
    goal for facilities sustainment. Facilities sustainment also declines
    in the PB-16 FYDP in order to preserve the operational readiness of our
    Fleet. When restoring and modernizing our infrastructure, we intend to
    prioritize life/safety issues and efficiency improvements to existing
    infrastructure and focus on repairing only the most critical components
    of our mission critical facilities. By deferring less critical repairs,
    especially for non-mission-critical facilities, we are allowing certain
    facilities to degrade and causing our overall facilities maintenance
    backlog to increase. We acknowledge this backlog must eventually be
    addressed.
        Navy will exceed the minimum 6 percent in capital investment in
    Naval Shipyards and Depots described in 10 USC 2476, with a projected
    7.4 percent in fiscal year 2016. Additionally, we are on track to
    exceed the target in fiscal year 2015 with a projected 6.3 percent
    investment. Our Naval Shipyards and depots are critical to maintaining
    the warfighting readiness of our force, and Navy will continue to
    prioritize investments to address the most critical safety and
    productivity deficiencies.
    Audit Readiness
        Navy is on course to achieve full auditability on all four
    financial statements by the end of fiscal year 2017, a legislative
    mandate. An audit of the Schedule of Budgetary Activity (SBA), began in
    December 2014. This initial audit is a critical step to identify any
    weaknesses in business systems and business processes. The Navy's Audit
    Plan has been greatly improved by lessons learned from our sister
    Service, the United States Marine Corps, which achieved a clean audit
    on their SBA in 2013. The remaining challenge to meeting the fiscal
    year 2017 mandate is to achieve auditability on the other major
    financial statement, Navy's Balance Sheet. Audit readiness on the
    Balance Sheet depends primarily on the accuracy of the multi-billion-
    dollar Asset line; the Navy has been executing a plan to bring Service-
    wide accountability for major assets (by amounts and value) into
    compliance with financial audit standards. The Navy is confident that
    it will be able to undergo an audit of all of its financial statements
    by fiscal year 2017 to meet the Congressional requirement.
    Family Readiness
        Family readiness is fully integrated into our Navy's call to be
    ready. PB-16 continues to provide support for critical programs that
    support our Sailors and their Families so that they can adapt to, and
    cope with, the challenges of balancing military commitment with family
    life. Navy Fleet and Family Support Centers ensure military families
    are informed, healthy, and resilient through robust programs that
    include: relocation assistance; non-medical and family counseling;
    personal and family life education; personal financial management
    services, information and referral services; deployment assistance,
    domestic violence prevention and response services, exceptional family
    member liaison; emergency family assistance and transition assistance.
    Increased stress and longer family separations have amplified program
    demand and underlined the importance of these support programs and
    services to ensure the psychological, emotional, and financial well-
    being of our Sailors and their Families.
        Navy Child and Youth Programs continue to provide accessible,
    affordable, and high-quality child and youth development programs
    through child development centers, youth centers, child development
    homes, and contract child care spaces. All Navy child development
    centers are DOD certified and nationally accredited, and provide
    consistent, high-quality care at affordable rates based on total family
    income.
                             military construction
        The PB-16 Military Construction program includes 38 projects valued
    at almost $1 billion to invest in our construction worldwide. We have
    prioritized funding to enable IOC of new platforms such as LCS, P-8A,
    F-35C, MH-60, and MQ-4C through the construction of hangars, mission
    control centers, and various support and training facilities. We are
    also supporting Combatant Commander requirements by constructing a
    land-based Aegis site in Poland and upgrading port facilities in
    Bahrain. A portion of MILCON funds will recapitalize infrastructure in
    three naval shipyards and improve the resiliency of utilities systems
    at seven bases. Three projects will improve the quality of life for our
    Sailors and their Families by addressing unaccompanied housing issues
    in Florida and Maryland and constructing a new child development center
    in Japan.
                              health of the force
        We measure and track the health of our force using Navy-wide
    metrics on recruiting, retention, manning levels; unit operational
    tempo; individual tempo (how often individual Sailors are away from
    home); morale; stress; sexual assault rates; suicide rates; alcohol-
    related incidents, and other factors. Based on a comprehensive study of
    these metrics and trends, today we rate the overall health of our Navy
    force as good. Our Sailors are our most important asset, they are our
    ``asymmetric advantage,'' and we have invested appropriately to keep a
    high caliber all-volunteer force. At work, the Navy is committed to
    providing our Sailors a challenging, rewarding professional experience,
    underpinned by the tools and resources to do their jobs right. Our
    obligations don't stop at the bottom of the brow. I remain focused on
    dealing with enduring challenges that relate to the safety, health, and
    well-being of our people, no matter where they are located. We also
    support our Navy Families with the proper quality of life in terms of
    compensation, professional and personal development, and stability
    (i.e., deployment predictability). Navy's 21st Century Sailor Office
    (OPNAV N17), led by a flag officer, continues to integrate and
    synchronize our efforts to improve the readiness and resilience of
    Sailors and their Families. Specific initiatives that we continue to
    support in PB-16:
    21st Century Sailor Programs
                Suicide Prevention
        Preventing suicide is a command-led effort that leverages a
    comprehensive array of outreach and education. We continue to raise
    awareness regarding the combination of indicators most common to
    suicide-prone individuals such as post-traumatic stress, relationship
    problems, legal and financial problems, periods of transition and
    mental health issues. We have launched several key initiatives
    including: (1) mandatory Operational Stress Control (OSC) skills
    training for units within 6 months of deployment, (2) new guidance for
    Navy unit commanders and health professionals to reduce access to
    lethal instruments under certain conditions, (3) an interactive,
    scenario-based suicide prevention training tool, (4) an OSC curriculum
    specific to our Reserve Sailors, and (5) specialized Chaplain Corps
    professional development training on suicide prevention. Our Sailors
    continue to learn about the bystander intervention tool known as
    ``A.C.T.'' (Ask--Care--Treat). We also invest in the resilience of our
    people to help them deal with any challenge.
                Resilience
        Our research shows that a Sailor's ability to steadily build
    resilience is a key factor in navigating stressful situations.
    Education and prevention initiatives train Sailors to recognize
    operational stress early and to use tools to manage and reduce its
    effects. Our Operational Stress Control (OSC) program is the foundation
    of our efforts to teach Sailors to recognize stressors in their lives
    and mitigate them before they become crises. We expanded our OSC mobile
    training teams, developed Bystander Intervention to the Fleet training,
    and deployed resiliency counselors on our aircraft carriers and large
    deck amphibious ships. The 21st Century Sailor Office is also
    conducting a Total Sailor Fitness curriculum review and developing a
    Resilience Management System to automate the collection and reporting
    of all destructive behaviors and better coordinate and integrate our
    resilience efforts. We also launched a new campaign across the Fleet in
    2015 called ``Every Sailor, Every Day,'' which emphasizes personal
    responsibility and peer support, so that Sailors are even more
    empowered to look out for and help other Sailors.
                Sexual Assault
        The Navy continues to pursue a deliberate strategy in combatting
    sexual assault. We continue to focus on preventing sexual assaults,
    ensuring victims are fully supported, improving investigation programs
    and processes, and ensuring appropriate accountability. These efforts
    include making sexual assault forensic exams available on all ships and
    24/7 ashore, having a cadre of professional and credentialed sexual
    assault response coordinators and victim advocates, special victim
    trained investigators and JAGs, and ensuring commands take all reports
    of sexual assault seriously and support the victim. We will enhance our
    response efforts by full implementation of deployed resiliency
    counselors on large deck ships, enhanced NCIS investigative capability
    using specially training Master-at-Arms, and continued legal assistance
    to victims through our Victims Legal Counsel program.
        Sustaining a professionalized response and victim advocacy system
    remains the top priority, but preventing sexual assaults in the first
    place is an imperative. Our strategy focuses on improving command
    climate, strengthening deterrence measures, and encouraging bystander
    intervention. To facilitate the latter, we trained facilitators to lead
    small, peer-group interactive discussions using various scenarios.
    Likewise, we have focused on raising awareness and accountability
    regarding retaliation to reduce the potential for re-victimization. A
    RAND survey of DOD found that 53 percent of retaliation is ``social''
    or ``peer,'' so we are focusing in on that area. Navy efforts are
    aligned with SECDEF direction to enhance first line supervisor skills
    and knowledge in recognizing signs of possible acts of retaliation.
    Recent Navy survey results show that prevalence of sexual assaults is
    decreasing, but we remain fully committed to creating and sustaining a
    culture where Sailors understand the importance of treating Shipmates
    with dignity and respect at all times, in all places.
    Manpower
                End Strength
        PB-16 supports an fiscal year 2016 Navy active end strength of
    329,200 and reserve end strength of 57,400. It appropriately balances
    risk, preserves capabilities to meet current Navy and Joint
    requirements, fosters growth in required mission areas, and provides
    support to Sailors, Navy Civilians, and Families. Programmatic changes
    tied to force structure and fact-of-life additions resulted in modest
    PB-16 active component end strength growth. Examples of force
    structure-related changes include retaining personnel for CVN 73 and
    its air wing, restoring manpower to nine cruisers that will remain in
    operation, and building crews for new construction destroyers (DDG 51,
    DDG 1000) and submarines (Virginia Class). PB-16 end strength remains
    fairly stable across the FYDP, reaching approximately 330, 000 active
    and 58,900 reserves in fiscal year 2020.
                Sea Duty
        Navy continues to emphasize and reward sea duty. Aggregate Fleet
    manning (what we call ``fill'') increased from 93 percent in fiscal
    year 2013 to 96 percent in fiscal year 2014, the equivalent of roughly
    3,500 more Sailors aboard surface ships. Also, we are very close to
    achieving our goal of ensuring that more than 90 percent of our Sailors
    are serving in jobs at the required grade with requisite experience and
    training (what we call ``fit''). Navy is committed to reducing
    deployment lengths to 7 months, but in recognition of those who have
    been experiencing longer deployments (over 220 days), in 2014 we began
    providing additional pay called Hardship Duty Pay-Tempo (HDPT). We have
    also incentivized and rewarded sea duty, in general, by increasing Sea
    Pay.
    Personnel Management
                Recruiting and Retention
        Navy recruiting and retention remain strong, although retaining
    personnel in certain critical skills continues to present a challenge,
    particularly as the demands we place on Sailors and their Families
    remain high. The threat of looming sequestration, along with a
    recovering economy, is a troubling combination. We are beginning to see
    downward trends in retention, particularly among pilots, nuclear-
    trained officers, SEALs, and highly skilled Sailors in information
    technology, Aegis radar and nuclear specialties. We are using all tools
    at our disposal, including special and incentive pays, to motivate
    continued service in these critical fields.
                Gender Integration
        Integrating women across the force remain top priorities, because
    they allow the Navy to tap into the Nation's rich talent pool. Over 96
    percent of all Navy jobs are currently available to women and we expect
    to open all occupations by early next year. We are also focused on
    retaining women warfighters by increasing career flexibility through
    initiatives like the Career Intermission Program, which allows
    servicemembers to take a hiatus from their careers for up to 3 years to
    pursue personal priorities before re-entering the force. One of our
    major thrusts in fiscal year 2016 is to increase female accessions of
    both officer and enlisted in order to provide greater female
    representation in all operational units by 2025. We are setting a goal
    of increasing female enlisted accessions to 25 percent and changing the
    mix of ratings available to provide greater operational opportunity for
    women to serve. Integration of women into the submarine force is
    tracking well.
                Diversity
        Demonstrating our continued commitment to diversity, Navy recently
    established a Diversity Policy Review Board, chaired by the Vice Chief
    of Naval Operations. Individual community self-assessments focused on
    diversity trend analysis are also vetted at my level to ensure each
    warfighting enterprise remains free of barriers to advancement and
    committed to equal opportunity to our entire talent pool without regard
    to race, gender, country of origin, or religion. Additionally, Navy
    offers a range of Science, Technology, Engineering, and Mathematics
    (STEM) education and outreach programs to generate interest by the
    Nation's youth in these fields and open up opportunities for them to
    consider potential Navy careers where STEM expertise could be applied.
                Quality of Service
        Navy continues to invest in projects designed to improve Sailor's
    quality of service, which has two components: (1) quality of work, and
    (2) quality of life. Further, all funds saved through ``compensation
    reform'' are directly invested in quality of work and quality of life
    programs. PB-16 invests in quality of service initiatives such as
    barracks and training building improvements, greater travel and
    schools, expanded use of tactical trainers and simulators, and
    increased funding for spare parts and tools. It also leverages smart
    technology devices and applications through an ``eSailor'' initiative
    to enhance training, communication and Sailor career management ashore
    and afloat.
                Talent Management
        As our economy improves and the labor marketplace becomes even more
    competitive, the battle for America's talented youth in service
    continues to heighten. Today's generation, while remarkably similar in
    their desire to serve as the rest of us, have different expectations
    for a career of service. Meanwhile, our personnel policies and
    information systems are rooted in the assumptions of a previous era.
    Much like any legacy weapons system, that personnel and learning
    structure is in need of modernization. Thus, we are examining
    initiatives to modernize how we manage our future force, for example:
    (1) phase out strict Year-Group management practices in favor of a
    milestone-based promotion system, (2) improve lateral flows between
    reserve and active components to offer more agile pathways of service,
    and (3) upgrade our information technology, software, and tools to
    enable a more mobile, flexible, and accurate personnel delivery system.
    Further, we plan to build upon our cultural strengths through a number
    of family-centered initiatives, such as expanded child development and
    fitness resources, along with greater career flexibility for dual-
    military and dual-professional Families to grow together while serving
    our Nation.
                Transition Assistance
        A new Transition Goals, Plans, Success (GPS) curriculum replaced
    the 20-year old Transition Assistance Program (TAP) to improve career
    readiness standards and assist separating Sailors. The mandatory 5-day
    core curriculum provides Veterans Affairs benefits briefings, the
    Department of Labor employment workshop, financial management and
    budgeting, and military to civilian skills crosswalk. Moreover, the DOD
    Military Life Cycle (MLC) Transition Model, implemented in 2014 in the
    Navy, is working to begin a Sailor's transition preparation early in
    their career, by providing opportunities to align with civilian
    standards long before their intended separation, to achieve their post-
    military goals for employment, education, technical training, or
    starting a business.
    Character Development
        At all levels in the Navy, we emphasize a culture of integrity,
    accountability, and ethical behavior. All of these make up the
    character of our leaders. Good character enables unconditional trust
    throughout our ranks. This is essential to succeed as a unified,
    confident, and interdependent team. It must be inherent in all our
    operations.
        Navy continues to emphasize character development as a priority in
    our overall leader development efforts, which are outlined in Navy's
    2013 Navy Leader Development Strategy. In 2014, we established the
    Naval Leadership and Ethics Center, which serves as the means by which
    we guide our efforts. This new command, alongside our Command
    Leadership School, Senior Enlisted Academy, and Leadership and Ethics
    programs at the Naval War College, expand and improve character
    development initiatives at every level. We are developing an ethics
    curriculum (courses and modules) that will be embedded in schoolhouses
    across the Fleet. We are also strengthening our Navy Leader Development
    Continuum, which is the way in which we facilitate development of both
    officers and enlisted throughout all phases of their careers. We are
    not learning alone; we draw insights and share best practices with our
    sister Services. The Navy is committed to inculcating into every member
    of our profession the key attribute of good character. It reflects our
    Navy heritage and the citizens of our Nation expect that we uphold the
    highest standards of behavior and performance in the execution of
    duties.
                               navy reserve force
        Our Navy responded to extraordinary challenges over 13 years of war
    with the help of Reserve Sailors. The men and women of our Navy Reserve
    have increasingly put their civilian careers on hold in order to
    operate forward, provide critical support to Fleet and Combatant
    Commanders, and enhance the performance of the Joint Force. The Navy
    Reserve is a valuable hedge against an uncertain and challenging
    security environment; they augment the Fleet with unique skills to see
    us through any challenge. Since 9/11, reserve contributions to the
    active duty Navy component have been significant--over 73,000 Navy
    Reserve Sailors were mobilized in support of global contingency
    operations, providing tens of thousands of ``boots on the ground'' in
    Iraq, Kuwait, Bahrain, Afghanistan, and the Horn of Africa, as well as
    supporting key missions like those at Joint Task Force-Guantanamo Bay.
    On any given day, nearly 25 percent of the Navy Reserve force directly
    supports the Navy worldwide--about 15,000 Sailors.
        Based on our annual assessment of the active/reserve mix, PB-16
    continues investments in expanding critical capabilities within the
    Reserve component including: (1) surge maintenance, by selectively
    targeting reservists who bring specific, valuable civilian skill sets
    to the Navy Total Force; (2) intelligence support, by realigning end
    strength to support this vital mission; (3) cyber warfare, by ensuring
    the appropriate mix of reserve manning to augment the active Navy
    capability; and, (4) high value unit escort, by leveraging the Navy
    Reserve's ability to fill short notice requirements using Reserve
    Coastal Riverine Force units to assume CONUS high value unit escort
    missions from the Coast Guard. PB-16 maintains several vital reserve
    capabilities, including all of the Navy-unique Fleet essential airlift
    assets (C-40A and C-130). These enable the Navy to meet short-notice,
    mission-critical airlift requirements more responsively than any other
    logistics option. It also supports Airborne Electronic Attack by fully
    funding a reserve airborne electronic attack squadron, which is an
    integral component of Navy's cyclic operational expeditionary airborne
    electronic attack deployment capability.
                                   conclusion
        For the last 3 years, the Navy has been operating under reduced
    top-lines generating capability shortfalls amounting to $25 billion
    less than the President's budget requests. With each year that the Navy
    receives less than requested, the loss of force structure, readiness,
    and future investments cause our options to become increasingly
    constrained. Navy has already divested 23 ships and 67,000 personnel
    between 2002 and 2012. And we have been assuming significant risk by
    delaying critical modernizations of our force to keep pace and maintain
    technological advantage.
        Unless naval forces are properly sized, modernized at the right
    pace, ready to deploy with adequate training and equipment, and able to
    respond with the capacity and speed required by Combatant Commanders,
    they will not be able to carry out the defense strategy, as written.
    Most importantly, when facing major contingencies, our ability to fight
    and win will not be quick nor as decisive as required. To preclude a
    significantly diminished global security role for the Nation's
    military, we must address the growing mismatch in ends, ways, and
    means.
        The world is more complex, uncertain, and turbulent; this trend
    will likely continue. Our adversaries' capabilities are modernizing and
    expanding. It is, therefore, vital to have an adequate, predictable,
    and timely budget to remain an effective Navy. PB-16 proposes the best
    balance of Navy capabilities for the authorized amount of funding, and
    enables the Navy to conduct the 10 primary missions outlined in the
    President's DSG and the QDR. But, there is considerable risk. PB-16 is
    the absolute minimum funding needed to execute our DSG. Should
    resources be further reduced below PB-16 levels, the DSG will need to
    be revised. If sequestration is implemented in fiscal year 2016, it
    will damage our national security.
        I thank this committee for their abiding support and look forward
    to working together to develop viable options for our Nation's future.

        Senator Cochran. Thank you very much.
        General Dunford, any comments on the budget request?
    STATEMENT OF GENERAL JOSEPH F. DUNFORD, JR.,
                COMMANDANT, U.S. MARINE CORPS
        General Dunford. Mr. Chairman, distinguished members of the
    committee, thanks for the opportunity to appear before you
    today. I am honored to be here with Secretary Mabus and Admiral
    Greenert and represent your marines.
        I will begin by thanking the committee for your steadfast
    support. Due to your leadership, we feel it is the best trained
    and equipped Marine Corps our Nation has ever sent to war.
        I know this committee and the American people have high
    expectations for marines as our Nation's expeditionary force in
    readiness. You expect your marines to operate forward, engage
    with our partners, deter potential adversaries, and respond to
    crises. And when we fight, you expect us to win. You expect a
    lot from your marines, and you should.
        This morning, as you hold this hearing, over 31,000 marines
    are forward-deployed and engaged doing just what you expect
    them to do. Our role as the Nation's expeditionary force in
    readiness informs how we man, train, and equip the Marine
    Corps. It also informs how we prioritize and allocate the
    resources that we get from Congress.
        Over the past few years, we prioritized the readiness of
    our forward-deployed forces. Those are the forces that you can
    count on for immediate crisis response. Those are the forces
    that supported the recent evacuation of U.S. citizens in the
    Sudan, Libya, and Yemen. Those are the forces currently
    conducting strikes in Syria, in Iraq, training the Iraqi army,
    and protecting our Embassy in Baghdad. And those are the 22,500
    marines that are west of the International Date Line in the
    Pacific.
        I can assure you that your forward-deployed marines are
    well-trained, well-led, and well-equipped. But we have had to
    make tough choices to deal with the effects of two wars,
    sequestration in 2013, and reduced budgets in 2014 and 2015.
        In order to maintain the readiness of our forward-deployed
    forces, we have not sufficiently invested in our home-station
    readiness, our modernization, our infrastructure sustainment,
    or our quality-of-life programs.
        As a result, approximately half of our nondeployed units,
    and those are really the ones who would respond to unforeseen
    contingencies, suffer personnel, equipment, and training
    shortfalls. In a major conflict, those shortfalls will result
    in a delayed response and/or the unnecessary loss of young
    American lives.
        Over time, underinvesting in modernization will result in
    maintaining older or obsolete equipment at higher costs and
    degraded capabilities. It will eventually erode our competitive
    advantage, and we don't ever want our marines and sailors in a
    fair fight.
        The readiness challenges we have today provide context for
    my message this morning. We can meet the requirements of the
    Defense Strategic Guidance with the President's budget, but
    there is no margin. BCA funding levels, on the other hand, will
    exacerbate the challenges that we have today. It will also
    result in a Marine Corps with fewer available Active-Duty
    battalions and squadrons than would be required for a single
    major contingency. And perhaps more concerning, it will result
    in fewer marines and sailors being forward-deployed and in a
    position to immediately respond to a crisis involving our
    diplomatic posts, American citizens, or U.S. interests.

                               PREPARED STATEMENT

        As we saw in the wake of Benghazi, the American people
    expect us to respond to today's crises today. We can only do
    that if we are properly postured to respond.
        In closing, my assessment is that funding below the
    President's budget level will require that we develop a new
    strategy.
        Thank you once again for the opportunity to appear before
    you this morning and for your leadership in addressing today's
    fiscal challenges.
        Mr. Chairman, I look forward to your questions.
        [The statement follows:]
               Prepared Statement of General Joseph Dunford, Jr.
                                  introduction
        The Marine Corps is the Nation's expeditionary force-in-readiness.
    Congress, specifically and uniquely, structured and prescribed the role
    of the Marine Corps as a ``. . . balanced force-in-readiness, air and
    ground . . . to suppress or contain international disturbances short of
    large scale war.'' Under this mandate, Marines are forward-deployed,
    forward-engaged, and postured to shape events, manage instability,
    project influence, and immediately respond to crises. As an inherently
    joint combined arms team, Marines assure access and enable heavier
    contingency forces to deploy from the United States in response to a
    major contingency.
        Also, to meet the intent of the Congress, the Marine Corps must
    maintain a high state of combat readiness. We look at readiness through
    the lens of our 5 pillars of readiness--high quality people, unit
    readiness, capacity to meet the combatant commanders' requirements,
    infrastructure sustainment, and equipment modernization. These pillars
    represent the operational and foundational components of readiness
    across the Marine Corps. Our role as America's 9-1-1 force informs how
    we man, train, and equip our force, and how we prioritize and allocate
    resources across the pillars of readiness. While we will always ensure
    that our forward deployed Marines and Sailors are properly manned,
    trained and equipped, we seek to maintain balanced investment across
    the pillars to ensure current and future readiness. We emphasize that
    all Marines and all Marine units are physically and mentally ready to
    deploy to any clime and place, at any time.
        The Marine Corps is a force of economy. For 6.0 percent of the
    defense budget, the Marine Corps provides 21 percent of the Nation's
    infantry battalions and 15 percent of the fighter/attack aircraft.
    These capabilities, organized as Marine Air Ground Task Forces with an
    organic logistical element, provide the Nation with affordable
    insurance and a strategic hedge in an era of uncertainty and
    unprecedented complexity.
                              strategic landscape
        The challenges of the future operating environment will demand that
    our Nation maintains a force-in-readiness that is capable of global
    response. The strategic landscape will be characterized by competition
    for natural resources, violent extremism, natural disasters, social
    unrest, cyber-attacks, regional conflict, and proliferation of advanced
    weaponry and weapons of mass destruction. The expansion of modem
    conventional and cyber weapons to a broader range of state and non-
    state entities, along with the erosion of U.S. technological advantages
    in areas where we have long enjoyed relative superiority, is likely to
    continue. Further, the actions of transnational criminal organizations
    and violent extremist groups will continue to contribute to regional
    unrest and instability that directly threaten U.S. interests through
    piracy, trafficking and terrorism. The U.S. must expect a security
    landscape characterized by volatility, instability and complexity, and
    a growing potential among adversaries to employ weapons of mass
    destruction.
        As Marines, we view global security challenges from a maritime
    perspective. The majority of these challenges reside in the congested
    and diverse areas where the sea and land merge--the littorals. Today,
    more than 80 percent of the world's population currently resides within
    100 miles of a coastline and this proportion is continuing to rise.
    Most maritime activities such as commercial shipping, fishing, and oil
    and gas extraction take place within 200 miles of the shore. It is no
    accident that the so-called ``Arc of Instability'' encompasses the
    littoral areas of South Central Asia, the Middle East, Africa. These
    geographic and demographic trends indicate a future security
    environment with a significant maritime element.
        We expect that the next 10 years will be largely characterized by
    small-scale crises and limited contingencies in and around coastal
    environments. Should major operations and campaigns occur, they are
    likely to involve a significant maritime and littoral dimension. Ready,
    responsive, flexible and strategically mobile naval forces are
    essential to ensuring continued access and security in the global
    commons. The increased likelihood of operations in the littorals
    demands the Marine Corps focus on its Title 10 responsibilities to be
    organized, trained and equipped to come from the sea across the range
    of military operations.
        America's responsibility as a world leader requires an approach to
    the current and future strategic landscape that leverages the forward
    presence of our military forces in support of our diplomatic and
    economic approaches. As stated in the 2012 President's Defense
    Strategic Guidance, ``The United States will continue to lead global
    efforts with capable allies and partners to assure access to and use of
    the global commons, both by strengthening international norms of
    responsible behavior and by maintaining relevant and interoperable
    military capabilities.'' The Marine Corps' unique capabilities support
    this strategic approach.
                                  your marines
        In 2014, Marines responded to crises around the world and remained
    forward-deployed and forward-engaged managing instability, building
    partner capacity, strengthening alliances, and projecting influence.
    Your Marines demonstrated the relevance of expeditionary naval forces
    by executing more than 30 amphibious operations, 150 Theater Security
    Cooperation (TSC) events, and 130 exercises around the globe. While we
    have drawn down our forces in Afghanistan, our operational tempo
    remains extraordinarily high. Most Marines in the operating forces are
    deploying for 7 months and spending at or below 14 months at home
    before redeploying. There is a strong demand signal for Marines and
    tailored Marine Air Ground Task Forces.
    OEF-Afghanistan
        In 2014, the Marine Corps contributed to the mission in Afghanistan
    by training, advising and assisting the Afghanistan National Security
    Forces (ANSF) and supporting the fight against terrorism in Southwest
    Asia. Our operations focused on ensuring the success of the Afghanistan
    elections in the summer of 2014 and transitioning security
    responsibilities to the ANSF. With Marines serving in an advisory
    capacity, the ANSF retained control of all district centers in Helmand
    Province. Regional Command (SW) also turned over operational
    responsibilities to the International Security Assistance Force Joint
    Command facilitating redeployment of Marine Expeditionary Brigade-
    Afghanistan (MEB-A) to home station. Today, a residual Marine presence
    continues to support the Resolute Support Mission (NATO)/OPERATION
    FREEDOM'S SENTINEL (U.S.) in Afghanistan.
        In more than 13 years of combat operations, 377 Marines were killed
    and 4,946 injured in Afghanistan. We remember their selfless service
    and many sacrifices. Our success in RC-SW is directly related to the
    high quality men and women in our ranks, the training that prepared
    them to face the rigors of combat, and the equipment that provided
    protection and a tactical edge over the enemy. Due to the enduring
    support of Congress and the American people, the Marines who fought in
    Afghanistan had the training and equipment necessary to accomplish the
    mission. The full support of Congress for a variety of initiatives such
    as Mine Resistant Armor Protected Vehicles (MRAPs) and upgraded
    individual protective equipment saved lives and enhanced combat
    effectiveness.
    Amphibious Ready Group/Marine Expeditionary Unit (ARG/MEU) Operations
        Our preferred method of deploying our Marines is aboard Navy
    amphibious ships to form ARG/MEU Teams. These are the Nation's most-
    ready, forward-postured forces. This capability provides strategic
    speed, agility, and options to our National Command Authority. They
    operate in international waters retaining flexibility for the
    Geographic Combatant Commander (GCC) while respecting the sovereign
    territory of individual nation states. The ARG/MEU team can respond
    faster from longer ranges with greater capabilities across the ROMO
    than any other conventional forces in the Department of Defense and are
    also capable of enabling Joint, interagency and coalition forces. In
    2014, the 11th, 13th, 22d, 24th, and 31st Marine Expeditionary Units
    (MEU) deployed and contributed to combatant commander requirements by
    participating in numerous exercises and operations throughout the
    CENTCOM, PACOM, AFRICOM, and EUCOM areas of responsibility (AORs). When
    required, the ARG/MEU has the scalability and versatility to respond to
    simultaneous emergencies. Last summer, the 22d MEU/Bataan ARG was
    operating in the CENTCOM AOR conducting operations in Yemen. When
    needed, elements of the ARG/MEU rapidly transited into the
    Mediterranean Sea to support the suspension of Embassy operations in
    Libya and relocation of its staff. During their return, they launched a
    force over 1200 miles to contribute to the initial response to counter
    ISIS. Concurrently, elements of the ARG/MEU continued to support U.S.
    operations in Yemen. Over the last year, we have also increased
    collaboration with SOF, significantly improving our complementary
    capabilities.
        Due to their forward presence, flexibility, ability to respond
    quickly and the decision space they afford our leaders, ARG/MEU's
    continue to be in high demand. Unfortunately, the Navy and Marine Corps
    can meet less than half of the GCC ARG/MEU crisis response force demand
    based on the ARG shipping available for tasking. Today, available
    expeditionary Navy/Marine Corps forces stand ready aboard ships to
    assure allies, deter potential adversaries, and provide persistent U.S.
    presence. Our Marines are forward deployed, with little to no footprint
    ashore, to respond and protect U.S. national security interests around
    the globe.
    Special Purpose Marine Air Ground Task Force--Crisis Response (SPMAGTF-
            CR) Operations
        With the high demand for Marine crisis response capabilities and
    the shortage of amphibious platforms from which to forward deploy
    forces, SPMAGTF-CRs were developed. While they don't provide the
    flexibility and responsiveness of an ARG/MEU, they mitigate a
    capability gap for the combatant commanders. Our SPMAGTF-CRs are
    tailored to respond to crisis and also conduct security cooperation
    activities with partner nations in order to develop interoperability,
    facilitate access, build partner capacity and security relationships,
    and gain regional understanding. This past year, SPMAGTF-CR units
    assigned to AFRICOM positioned forward in Moron, Spain and Signonella,
    Italy safeguarded the lives of our diplomatic personnel and conducted
    military-assisted departures from the U.S. Embassy in South Sudan in
    January and our Embassy in Libya in July. The Marine Corps SPMAGTF-CR
    unit assigned to CENTCOM (SPMAGTF-CR-CC) became fully operational on 1
    November 2014 and deployed to the CENTCOM AOR. Since November, SPMAGTF-
    CR-CC conducted Embassy reinforcement, TSC exercises, and provided
    critical aviation and ground capabilities in the fight against ISIL.
    Most recently, Marines from SPMAGTF-CR-CC supported the evacuation of
    our Embassy in Sana'a, Yemen. A third SPMAGTF deployed in support of
    Southern Command from June to September aboard USS America on her
    transit around the South American continent and executed partner-nation
    activities, key leader engagements and security cooperation activities.
    The placement of these Marine Corps tailored task force capabilities
    forward, where GCC's need them, provides enhanced diplomatic protection
    and additional crisis response options.
    Marine Corps in the Pacific
        The Marine Corps' activities in the Pacific are led by III Marine
    Expeditionary Force headquartered on Okinawa, Japan. This past year,
    III MEF conducted 52 operations and exercises. In 2014, III MEF
    conducted Exercise SSong Yong--the largest amphibious exercise of the
    year with our Korean allies further demonstrating the U.S. commitment
    to South Korea. III MEF plays an important role in maintaining
    stability in East Asia and significantly contributes to peace and
    prosperity throughout the region. A number of TSC exercises were
    conducted using Maritime Prepositioning Ships (MPS). While these
    platforms were designed to deliver heavy equipment for a major
    contingency, adapting them for day-to-day engagement enabled us to
    better support the combatant commander's theater campaign plan and
    mitigated the number of amphibious lift in the Pacific.
        The Marine Corps continues to rebalance its force lay-down in the
    Pacific to support the Defense Strategic Guidance (DSG). The
    Distributed Laydown's planned end state of four geographically
    distributed, politically sustainable and operationally resilient MAGTFs
    in the Pacific (Australia, Guam, Japan, and Hawaii) is a long term
    effort that will span the next 15 years. In 2014, we met the Secretary
    of Defense's guidance to have 22,500 Marines west of the International
    Date Line, forward based and operating within the Asia-Pacific Theater.
    Marine rotational force-Darwin (MRF-D), based at Robertson Barracks, is
    in its third year of execution, and has rotated 1,263 Marines through
    Darwin conducting bi-lateral training and exercises. This rotational
    force provides MARFORPAC and PACOM with a ready and deployable MAGTF
    capable of Humanitarian Response/Disaster Relief (HA/DR), TSC, and
    crisis response operations. MRF-D has strengthened our alliance with
    our Australian allies and provided the GCC an immediate response option
    in the wake of an unforeseen crisis.
    Black Sea Rotational Force, Embassy Security Forces, and Theater
            Security Cooperation (TSC)
        Marine Corps operational commitments span across all GCCs
    contributing to stronger alliances, stable international order, and
    security for our diplomatic stations. In the Republic of Georgia, the
    Marine Corps prepared three Georgian infantry battalions for their
    deployment to Afghanistan. There, the Georgian forces provided force
    protection and executed Quick Reaction Force (QRF) missions as the ISAF
    mission transitioned to the Resolute Support Mission (RSM). Enabling
    the deployment of Georgian battalions reduced the requirement for U.S.
    forces in Afghanistan while providing the Commander with the requisite
    capabilities.
        In support of our strong commitment to the security and stability
    in Europe, Marines of the Black Sea Rotational Force (BSRF) mission
    conducted hundreds of TSC activities in EUCOM and provided a
    significant crisis response option for the EUCOM commander.
    Additionally, Fleet Anti-Terrorism Security Teams (FAST) provided
    forward-deployed platoons to four Geographic Combatant Commanders in
    support of dynamic mission tasking such as Embassy reinforcement in
    Baghdad, Iraq and Sana'a, Yemen.
        The 2015 President's National Security Strategy emphasizes the
    security of American citizens. This past year the Marine Corps worked
    closely with the State Department to increase baseline security at high
    risk embassies and consulates. Today Marines are routinely serving at
    173 embassies and consulates in 141 countries around the globe. In
    2014, the Marine Corps Embassy Security Group added 237 Marine Security
    Guards (MSG) to new and current posts including Iraq, Lebanon, and
    Turkey. These Marines represent our initial installment towards the
    additional 1,000 MSG requirement from Congress. The Marine Security
    Augmentation Unit (MSAU) also deployed 29 times at the request of the
    State Department executing 16 Embassy/Consulate security missions and
    13 VIP (POTUS/VPOTUS/SECSTATE) security missions. MSAU Marines deployed
    to Iraq, Israel, South Korea, Chad, China, Poland, Philippines, France,
    Bahrain, Romania, Australia, Brazil, United Kingdom, Kenya, Ukraine,
    South Sudan, Turkey, Mexico, and Thailand.
                       fiscal year 2016 budget priorities
        The President's Budget for fiscal year 2016 (PB16) allocates $24
    billion to the Marine Corps' baseline budget. To meet our
    responsibilities as the Nation's 9-1-1 force, we prioritized near-term
    readiness while assuming risk in our home station readiness,
    modernization, infrastructure, and quality of life programs. We will
    attempt to reestablish an acceptable balance across the 5 Pillars of
    Readiness across the future year's defense plan. The following is a
    detailed description of the Marine Corps' budget priorities supported
    by PB16 of Force Structure, ACV, JLTV, JSF, CH-53K, C4 and naval
    programs of interest.
    Force Structure
        In 2010, the Marine Corps' internal force structure review
    concluded that the USMC's optimal size to meet the requirements of the
    President's National Security Strategy was 186,800. This optimal size
    gives the Marine Corps the capacity we need to meet current steady
    state demand with a deployment-to-dwell (D2D) ratio greater than 1:2.
    We continue to support this review and conclusion. Today, the Marine
    Corps continues to execute its end-strength reductions that began
    during fiscal year 2012, reducing the Corps from a high of 202,000. The
    Marine Corps is adjusting its active duty end-strength to 182,000
    Marines by 2017, emphasizing the enduring requirement to provide crisis
    response forces that meet today's demand. We can meet the DSG at this
    level, but with less than optimal time between deployments to train and
    allow Marines to be with their families.
        Our most significant readiness challenge is the gap in the numbers
    of unit leaders with the right grade, experience, technical and
    leadership qualifications associated with their billets. Specifically,
    our current inventory of Non-Commissioned Officers (NCOs) and Staff
    Non-Commissioned Officers (SNCOs) is not meeting our force structure
    requirements. This dynamic directly affects our training, maintenance,
    and discipline resulting in degraded readiness and combat
    effectiveness. The Marine Corps' PB16 military personnel budget funds a
    fiscal year 2016 end-strength of 184,000 in our base and supports
    right-sizing our NCO corps to provide our Marines the small unit
    leadership they deserve.
    Amphibious Combat Vehicle (ACV)
        The Marine Corps appreciates the support of the Congress in
    restructuring the ACV program in the fiscal year 2015 appropriations
    bill. That action has set us on a path to publishing a Request for
    Proposals (RFP) to industry in March of this year and enables a truly
    'streamlined' acquisition process. Leveraging the stability of the
    Services' requirements and the mature technologies of non-
    developmental, modern, wheeled, armored combat vehicles, the combat
    developers and acquisition professionals have developed a way forward
    to field a capability for the Marines in as little as 6 (vice 13 or
    more) years. Consistent with Marine Corps Ground Combat and Tactical
    Vehicle Strategy (GCTVS) and Expeditionary Force 21, the Amphibious
    Combat Vehicle (ACV) will be developed and procured in phases to
    incrementally field modern replacements for the aging Amphibious
    Assault Vehicle (AAV).
        The program is based on the most current threat projections and
    anticipated operational requirements, and is fully informed by the real
    world challenges that our Marines have faced during 14 years of
    sustained combat. The ACV will provide our ground maneuver forces the
    ability to negotiate the challenging urban and cross-country terrain of
    the littorals while protecting them from ballistic and explosive
    threats and supporting them with precision heavy machine gun fire.
        The President's budget fully funds ACV 1.1 within the FYDP. PB16
    will buy 86 vehicles over the FYDP or approximately 42 percent of the
    204 ACV 1.1 vehicles in the Approved Acquisition Objective (AAO). When
    Full Operational Capability (FOC) is achieved in fiscal year 2023, we
    will have modernized two Assault Amphibian (AA) Companies currently
    equipped with four decades old AAVs with 204 new vehicles. ACV 1.1 plus
    the 1.2 increment are currently planned to modernize 6 of 10 AA
    Companies. With PB16 funding, the Marine Corps will achieve Initial
    Operational Capability (IOC) which consists of an ACV platoon of 21
    armored vehicles, providing protected amphibious lift to an infantry
    company. IOC is achieved when the platoon is fully equipped, the unit
    is fully trained and judged combat ready for deployment, and the
    required maintenance and support personnel are in place to sustain the
    unit.
        The need for self-deploying, high-water speed vehicles remains our
    ultimate objective. The capability to come from the sea and operate in
    the littorals will be significantly dependent on the speed at which we
    can maneuver. ACV 1.1 provides a responsible and effective approach to
    mitigating the age of our AAV fleet while investing in needed
    capabilities for tomorrow. We will continue to prioritize our science
    and technology efforts to field an amphibious combat vehicle that will
    fully support our operating concepts in the future.
    Joint Light Tactical Vehicle (JLTV)
        Over the past 14 years of combat, we found that the HMMWV utility
    vehicle was not adequate for the modern battlefield due to its
    vulnerability to improvised explosive devices (IEDs). In 2006, we began
    development of a light tactical vehicle that could combine the land
    mobility performance, transportability profile and payload of the HMMWV
    with the protection of a combat vehicle within the weight constraints
    of the expeditionary force. Today, the Joint Light Tactical Vehicle
    Program has three exceptionally strong designs in competition that will
    realize the initiating concept in production and deployment while
    increasing the protected mobility of the highest risk portion of the
    light combat and tactical vehicle fleet.
        The JLTV program is in the engineering and manufacturing
    development (EMD) phase with Milestone C and the low rate initial
    production contract award scheduled for fiscal year 2015. The PB16
    supports the Marine Corps' strategy to reach IOC for JLTV in the 4th
    quarter of fiscal year 2018 and FOC in the 4th quarter of fiscal year
    2021. IOC consists of one infantry battalion fully fielded with the
    JLTV plus a training element.
        Maritime Prepositioning Force (MPF), MARSOC, and critical
    supporting establishment training units will also be allocated a
    portion of PBI6 funded vehicles. Vehicles will be allocated by unit
    based on the JLTV Fielding Plan, currently in development in support of
    Milestone C decision in 4th quarter of fiscal year 2015. PB16 will buy
    4,476 vehicles over the FYDP, or approximately 80 percent of the
    increment I--5,500 vehicles--Approved Acquisition Objective (AAO).
    Joint Strike Fighter (JSF)
        Our tried and true F/A-18s, AV-8Bs and EA-6B Prowlers have
    performed magnificently in combat in Iraq and Afghanistan, providing
    our Marine riflemen the fires they needed, in every clime and place
    from sea bases large and small, and expeditionary bases ashore. With
    the help of Congress, we have kept these aircraft as modern as possible
    and extracted every ounce of readiness we can from them; however, the
    high operational tempo has pushed these aircraft to more rapidly
    approach the end of their service lives. Due to the uncertainty
    prevalent in today's global security environment, the Nation requires
    we maintain a capability to respond quickly in contested regions
    regardless of weather conditions. The F-35 Joint Strike Fighter, as
    part of the MAGTF, meets the Nation's needs.
        The Marine Corps remains committed to the recapitalization of our
    aging TACAIR fleet through the procurement of the F-35. The JSF brings
    a new capability to the battalion sized forces that sail with our
    Marine Expeditionary Units. Today, there are a multitude of high risk
    regions where a crisis response operation would require large Joint
    strike packages to soften or blind the threat. These packages would
    have to include cruise missiles, fighter aircraft, electronic warfare
    platforms, aircraft which specialize in suppression and destruction of
    enemy air defenses, and strike aircraft--just for U.S. forces to gain
    access. Such strike packages require coordination across services and
    combatant commands and take weeks and months to assemble. This same
    kind of access can be attained with a single detachment of 4 to 8 F-
    35s--the same sized detachment which will reside with a Marine
    Expeditionary Unit. For major contingencies, a surge of F-35Bs to our
    amphibious carrier decks and forward austere bases enables even greater
    options and striking power. The F-35 provides a transformational
    capability to the Marine Corps and the Joint Force. It gives our Nation
    a day one, full spectrum capability against the most critical and
    prohibitive threats.
        The Marine Corps prioritizes putting our TACAIR as close to our
    infantry as we can by basing them from Amphibious Carriers or austere
    Forward Operating Bases (FOBs) and Forward Arming and Refueling Points
    (FARPs) ashore. This places the F-35's transformational capabilities in
    the hands of the infantry Marine. The Marine rifleman is now supported
    immediately with close air support, electronic warfare capabilities,
    and intelligence, surveillance, and reconnaissance support in threat
    and weather conditions which previously would have denied aviation
    support. The F-35's ability to develop, process, and display
    information to the pilot and disseminate it at tactical, operational,
    and strategic levels is what makes the platform truly unique, ``a
    server in the sky'' for the MAGTF. The sensors and communications
    equipment of our F-35s allow pilots and forward air controllers to see
    through the clouds to exchange high fidelity pictures in environments
    we would consider a no go today. Enhancing the C2, strike and intel
    capabilities of the MAGTF commander, the F-35 transforms the MAGTF into
    an element capable of penetrating any AOR in the world to set the
    conditions necessary to enable follow-on forces.
        The Marine Corps has maintained the lead in this transformational
    platform. The F-35B and C models will replace the over 23 year old F/A-
    18 Hornet, 18 year old AV-8B Harrier and the 27 year old EA-6B Prowler;
    the same aircraft that have been passed from fathers to sons and
    daughters now serving. We have stood up our first two squadrons of F-
    35Bs and will stand up a third in 2016. PB16 supports the Marine Corps'
    timeline to achieve IOC of its first F-35B squadron later this year and
    complete full transition by 2031. With the optempo expected to remain
    high, we will transition to F-35s as rapidly as possible. Continued
    Congressional support for this transition is key to increasing our
    degraded aviation readiness and minimizing our exposure to ever
    increasing operations and support costs for aged aircraft.
    CH-53K
        The CH-53E, the Marine Corps' heavy lift helicopter, is the only
    vertical heavy lift helicopter in the Department of Defense (DOD). Like
    its predecessors, the CH-53A/D, the CH-53E has continued a proud
    lineage of worldwide support of the Marine rifleman and Joint Force in
    various tactical and logistical capacities. Though a workhorse for the
    Marine Air Ground Task Force since its acquisition, the CH-53E does not
    have the capacity to support the Marine Expeditionary Brigade of 2024
    with the payloads and ranges required to support the ship-to-objective
    maneuver concepts outlined in Expeditionary Force 21. Our CH-53
    recapitalization effort is instrumental in maintaining a true heavy
    lift capability for the Marine Corps and the Nation for the future.
    Developmental testing is currently underway and the first flight of the
    CH-53K is scheduled for 2015 with an Initial Operational Capability in
    2019. PB16 is instrumental in providing critical funding for the last
    test articles in support of a Milestone C decision in 2016.
        The CH-53K will meet all of the requirements of the modern Marine
    Expeditionary Unit and Marine Expeditionary Brigade and remain the only
    heavy lift rotary wing asset in the DOD inventory. The CH-53K is a
    state of the art heavy lift vertical connector providing increased
    reliability, range and lift for the Marine Air Ground Task Force and
    Joint Force. The mainstay for the CH-53K will remain heavy lift
    external operations. To this end, its Key Performance Parameter (KPP)
    is the ability to externally transport a load weighing 27,000 pounds
    110 nautical miles, nearly three times the capability of the CH-53E.
    Additionally the CH-53K will incorporate a triple hook system,
    facilitating the delivery of three independent loads, to three
    different locations, in support of three separate units dispersed
    across the battlefield. The new cabin will support the transportation
    of the DOD standard 463L pallet enabling more efficient ``tail to
    tail'' logistical transitions with C-5s, C-17s and C-130s. The
    implementation of civil sector logistical advancements will facilitate
    near real time situational awareness of all cargo and passengers
    embarked and delivered by the CH-53K. The CH-53K will provide precision
    and tempo for the Marine rifleman, enabling mission success.
        PB16 provides Research, Development, Test and Evaluation (RDT&E)
    funding for the continued CH-53K System Development Demonstration
    contract which includes continued design, part qualification,
    developmental and operational test. Additionally, PB16 provides RDT&E
    funding for the incremental procurement of System Demonstration Test
    Articles 5 and 6, which will be used to ensure production readiness,
    quality system verification, and production planning and validation. We
    remain committed to our Program of Record of 200 CH-53Ks in order to
    keep Marine Corps' heavy lift assets relevant and effective for the
    Marine on the ground in the future MAGTF.
    Command, Control, Communications and Computers (C4)
        Deployed warfighters require access to the right data at the right
    place at the right time. The demand for information will not tolerate a
    break in access. With the speed in which technology evolves today, we
    must continue to grow C4 capabilities down to the operational level.
    Information must be available through multiple mediums, from flag pole
    to fighting hole. Our end state is to enable command and control in an
    information enterprise that supports the way the Marine Corps operates,
    which includes a range of missions from crisis response to supporting
    our Expeditionary Force 21 concept--all characterized by mission-
    tailored forces. A single Marine Corps network will support the Marine
    Corps' component of the Joint Information Environment.
        Our main focus today is unifying our networks to seamlessly connect
    the deployed and engaged forces to Joint information and data. This
    provides our Marines, Sailors, and supporting personnel the persistent
    information needed to conduct operations. We continue to increase our
    cyber capacity with trained personnel and emergent technology to
    protect this critical data.
        The Marine Corps must retain the ability to rapidly support the
    extension of the Marine Corps' information and data services to enhance
    our rapid response to crisis, provide contiguous command and control to
    a disaggregated force, and scale to support theater security and major
    combat operations. We will continue to invest in C4 down to the
    Corporals and Sergeants. This will allow our front line Marine rifleman
    to be more agile, lethal and responsive by directly leveraging the
    capabilities of the F-35 and communicating better with special
    operations forces.
    Naval Integration and Programs of Interest
        As the service with primary DOD Directive and Title 10
    responsibility for the development of amphibious doctrine, tactics,
    techniques, and equipment, our capabilities are reliant on the Nation's
    investment in our partnered Navy programs. Naval integration will
    increasingly form an important component of our exercise and
    experimentation programs. The Marine Corps fully supports the Secretary
    of the Navy and CNO's efforts to balance amphibious platforms and
    surface connectors that facilitate operational maneuver from the sea
    and ship-to-objective maneuver with the other service requirements of
    the Navy.
        The President's Budget investments in LPD-28, LX(R), and ship-to-
    shore connectors demonstrate our commitment to global maritime presence
    and the Nation's mandate to sustain an amphibious capability that can
    respond to deter, deny, and defeat threats on a global scale. We
    appreciate Congress providing a substantial portion of funding to
    procure a 12th LPD. The enhanced mission profiles of these new and
    additional platforms create operational flexibility, extended
    geographical reach, and surge capabilities to the Geographical
    Combatant Commands.
        Naval investments in alternative seabasing platforms expand access
    and reduce dependence on land bases, supporting national global
    strategic objectives and providing operational flexibility in an
    uncertain world. The naval seabasing investments in the Mobile Landing
    Platform, the Large Medium-Speed Roll-on/Roll-off Ship (LMSR) strategic
    sealift ship, and the T-AKE Dry Cargo and Ammunition Ship as part of
    the Maritime Prepositioning Ship Squadrons, coupled with the Joint High
    Speed Vessel (JHSV) and connectors, provide the additional lift, speed,
    and maneuver necessary to augment Navy and Marine Corps future security
    capabilities. Although not a substitute for amphibious warships, these
    alternative lift platforms will complement amphibious ships.
        While the President's Budget moves us in the right direction, it
    will take many years and a sustained effort to address the risk in the
    current number of amphibious ships and to address the material
    readiness of our current inventory. The Marine Corps will continue to
    work closely with the Navy to implement the 30 year ship building plan
    and to address the current readiness challenges.
                                   readiness
        Proper balance across the 5 Pillars of Institutional Readiness is
    the most effective means of achieving a force capable of rapidly
    responding to challenges across the range of military operations while
    remaining good stewards of the Nation's resources. The 5 Pillars of
    Institutional Readiness involves operational readiness (i.e. Unit
    Readiness, and Capacity and Capabilities to Meet Requirements pillars)
    and foundational readiness (i.e. our investments in High Quality
    People, Infrastructure Sustainment, and Equipment Modernization
    pillars). The Marine Corps' ability to remain ready is enabled by the 5
    pillars of readiness.
        Our current funding level protects near-term readiness; however, it
    does so at the expense of long term modernization and infrastructure,
    threatening future readiness. We are funding critical readiness
    accounts to include: operating forces; depot, intermediate and
    organizational maintenance; repair and sustainment of training ranges,
    training and education, exercises, and fuel and repair parts. The
    Marine Corps is not adequately resourcing our non-deployed units; it
    will take time and sustained funding to address the deficiencies in
    personnel, equipment and training. This is a rational choice given the
    current fiscal situation, but it is not sustainable over time.
    Imbalance amongst the pillars for long periods will hollow the force
    and create unacceptable risk for our national defense. During these
    fiscally constrained times, we must remain ever vigilant in the
    allocation of resources to ensure the holistic readiness of the
    institution and ensure every dollar is going where it is needed most.
    Since 2012 our accounts are auditable. This gives confidence to the
    American people and commanders that we ask only for the amount of
    funding required to provide a lean, highly capable, mobile and ready
    force.
    High Quality People
        Our Marines and civilians are the foundation of all that we do. We
    succeed because of our focus on people. They are the primary means by
    which the Marine Corps meets its defense responsibilities. The
    resources we dedicate to recruiting, retaining, and developing high
    quality people directly contribute to the success of our institution.
    Our commitment to quality must never waver.
        Our success in maintaining an elite force begins with recruiting
    young men and women who possess the character, mental aptitude,
    physical and psychological fitness, and desire required to earn the
    title ``Marine.'' The Marine Corps is committed to recruiting and
    retaining high-quality people who meet prescribed physical and mental
    standards, and are ready in mind, body and spirit to execute their
    duties in the defense of our Nation.
        Today, the Marine Corps does not have the proper level of personnel
    stability or cohesion in our non-deployed units. The practice of moving
    Marines between units to meet manning goals for deployments creates
    personnel turbulence, inhibits cohesion, and is not visible in our
    current readiness assessment tools. This personnel turbulence affects
    our combat readiness and our ability to take care of Marines. Moving
    forward, we will improve cohesion by increasing our preparedness across
    the force and emphasizing consistency of leadership, personnel
    stability, and sustained readiness across the force. The overhaul of
    our manpower management and readiness reporting models, systems,
    policies, and processes will allow us to minimize personnel turbulence,
    increase unit stability, and develop cohesion. We ask Congress to
    support these measures through appropriations of the funds we have
    requested in PB16.
        Our civilian workforce continues to be a significant force and
    readiness enabler to our institution. They reflect the same high
    quality standard that propels a ready force with many having previously
    worn the uniform of our Nation--68 percent are veterans. They also
    remain a lean portion of our organization at a ratio of only 1
    appropriated funded civilian to every 10 active duty Marines. Our
    civilians are contributing where we need them most. With 95 percent
    working outside the National Capitol Region, our civilians are directly
    supporting Marines and the mission at our bases, stations, depots, and
    installations. Without these civilians, we would be forced to assign
    uniformed Marines to these tasks taking away leadership and capacity in
    operational units.
        Our civilian workforce grew post-9/11, in large part due to
    military-to-civilian conversions, which allowed Marines to move from
    support billets to the operating force. A Department-wide focus on
    insourcing, new requirements (e.g. cyber), and necessary support for
    our military surge to 202,000 also played a role in the growth. In
    2009, the Marine Corps proactively began reducing civilian structure
    and personnel, and we are continuing to reduce our workforce by another
    10 percent, including 20 percent at headquarters.
        A key element in our overall readiness is family readiness. The
    family members of our Marines are very much a part of the Marine Corps
    family. Their sacrifices and support are not taken for granted. As we
    return from 14 years of major combat operations, the Marine Corps is
    repositioning our capabilities to deliver core programs and services
    that best meet the needs of today's Marines and families. We are
    renewing our programs and services consistent with our reduced end
    strength, changing demographics, mission, and budget environment. We
    are emphasizing the importance of maintaining a high level of
    readiness. Our Marine and Family Programs exist to support unit mission
    readiness, and individual health and wellness goals. In order to
    maintain the high standard of family support, we will develop a plan
    with a bias toward decentralizing decisionmaking and resource
    allocation. These programs and their impact on our Marines will
    continue to be an area we focus on to judge our readiness. We thank the
    Congress for your continued support of Marine and Family Readiness
    programs at the PB16 level.
    Unit Readiness
        Our operational tempo since September 11, 2001 has been high and
    remains high today. We expect this trend to continue. Your Marines
    serving today in the operating forces are either deployed, getting
    ready to deploy, or have recently returned from deployment. Congress
    directed the Marine Corps to be the Nation's force-in-readiness. The
    current fiscal environment challenges the Marine Corps' ability to meet
    this mandate. In these circumstances, the Marine Corps has assumed some
    risks to fund unit readiness in the near term. The Corps provides units
    ready to meet core and assigned missions in support of steady state and
    crisis/contingency requirements. Our ability to sustain assigned
    mission requirements with units ready to deploy must be carefully
    managed while we continue end-strength reductions.
        Over half of home-station/non-deployed units report unacceptable
    levels of readiness; nevertheless, the Marine Corps excels at
    generating ready units to meet operational requirements. Deployed units
    report high levels of readiness for core and assigned missions.
    Alternately, the ability of non-deployed units to conduct full spectrum
    operations continues to degrade as home-station personnel and equipment
    are sourced to protect the readiness of deployed and next-to-deploy
    units. We must remain cognizant that our home-stationed units
    constitute the ``ready forces'' that would surge to conduct full
    spectrum operations required in major contingencies. As the Nation's
    first responders, the Marine Corps' home stationed units are expected
    to be in the same high state of readiness as its deployed units.
        Our home station units' ability to train is challenged. Time is an
    essential component required to fix worn equipment and train units to
    standard. Lower end-strength and unit deployment to dwell (D2D) ratios,
    shortages in personnel and equipment at the unit level, and the paucity
    of amphibious and maritime prepositioning ships contribute to degraded
    full spectrum capability across the Service. For example, a D2D ratio
    of 1:2 means your Marines are deploying for 7 months and home for 14
    months before deploying again. During that 14 month ``dwell,'' units
    are affected by personnel changes and gaps, ship availability
    shortfalls, equipment reset requirements, degraded supply storages,
    training scheduling challenges and more. These challenges factor into
    every unit's mission to remain consistently ready.
        Marine Aviation contains some of our most stressed units. The
    Marine Corps has 55 Active Component squadrons, three of which (2 VMM,
    and 1 VMFA) are in transition. Of the remaining 52 squadrons, 33
    percent are deployed and 17 percent are in workups to deploy. Our
    minimum readiness goal to deploy is T-2.0. Deployed squadrons/
    detachments remain well trained and properly resourced, averaging T-
    2.17. Next-to-deploy units are often achieving the minimum goal of T-
    2.0 just prior to deployment. Non-deployed squadrons experience
    significant resource challenges which manifest in training and
    readiness degradation, averaging T-2.96.
        The Marine Corps is applying resources to maintain the readiness of
    deployed and next-to-deploy units. Our focus is to continue to meet
    current requirements, while addressing the personnel, equipment, and
    training challenges across the remainder of the force. We are in the
    midst of a comprehensive review of our manning and readiness reporting
    systems. We will develop a detailed plan to enhance our overall
    readiness during 2015.
    Capacity to Meet Combatant Commanders' Requirements
        We are committed to meet the expeditionary requirements of our
    combatant commanders. The Marine Corps' PB16 military personnel budget
    funds a fiscal year 2016 end-strength of 184,000 on the way to 182,000
    in fiscal year 2017. The Marine Corps of 182,000 includes the 1,000
    additional MSG Marines directed by Congress to protect more of our
    embassies abroad, the Marine contribution to the special operations
    component, Marine Cyber forces, and SPMAGTF's assigned to support
    multiple COCOMs. Marines assigned to Marine Special Operations Command
    and Marine Forces Cyber Command continue to significantly contribute to
    the needs of the COCOMs through specialized capability sets and as
    enablers for the joint force.
        In order to meet COCOM requirements, the Marine Corps will sustain
    a D2D ratio in the active component force of 1:2 vice a more
    sustainable D2D ratio of 1:3. That is the fundamental difference
    between an optimal force structure of 186,800 Marines and 182,000. The
    Marine Corps has some high demand/low density units that maintain a
    current D2D ratio of less than 1:2. The Marine Corps will continue to
    provide ready forces to meet COCOM demands, but we are carefully
    assessing the impact of reduced D2D ratios on our training and quality
    of life.
    Facility Investments
        The President's budget for fiscal year 2016 funds 81 percent of the
    OSD facilities sustainment model requirement for the Marine Corps (an
    increase over the fiscal year 2015 level). The OSD guideline is to fund
    90 percent of the requirement. We remain aware that underfunding
    facilities sustainment increases the rate of degradation of Marine
    Corps infrastructure, which leads to more costly repairs, restoration
    and new construction in the future.
        Our installations are critical to our ability to train forces and
    be ready. They provide our training ranges and care for Marines and
    their families. However, we are forced to take risk in sustaining
    current infrastructure in support of operational readiness. With the
    help of Congress, the Corps has made significant progress over the last
    8 years in replacing old, unsatisfactory buildings. Our MILCON is now
    focused primarily on new platforms and PACOM force relocation efforts.
        The most important mission of our installations is to enable
    operating force readiness. We do this by being responsible stewards of
    land, air and water resources, and by being good neighbors in our local
    communities. These conservation efforts maintain our valuable training
    ranges and much needed air and sea maneuver corridors. A consistent
    emphasis on community partnering and engagement creates good-will,
    enhances family quality of life and reduces encroachment risks to our
    bases and stations. Congressional support and community partnering have
    resulted in the addition of training areas at the Townsend Bombing
    Range in Georgia, the Chocolate Mountains Aerial Gunnery Range in both
    Arizona and California, and the Marine Corps Air Ground Combat Center
    in California. We are also making great strides in reducing energy
    consumption on our bases and stations. By lowering utility use we are
    reducing costs, protecting the environment, improving the resiliency of
    energy-dependent infrastructure and ultimately enabling operational
    readiness.
    Equipment Modernization and Innovation
        For the last 14 years, the Marine Corps has focused our resources
    on providing the Marines what they need for the current fight.
    Readiness remains our #1 priority to meet our national security
    responsibilities; however, our focus on the current fight coupled with
    our declining budget, has forced the Marine Corps to make difficult
    choices and reduce investment in modernization to maintain current and
    near term readiness. In today's fiscal environment, the Marine Corps is
    investing only in essential modernization, focusing on those areas that
    underpin our core competencies.
        Though emphasis is placed on new or replacement programs such as
    the ACV, JLTV, CH-53K and JSF, much of our modernization resources are
    focused on improving the capabilities and extending the life of current
    systems in order to fill the capabilities gaps that can be exploited by
    today's threats. These modernization efforts span from our AAV's to our
    current legacy aviation platforms.
        In order to balance modernization across the capabilities of the
    MAGTF, our top priorities for recapitalization and upgrades are the ACV
    and the F-35B. Programs like ACV 1.1 with science and technology
    efforts for high-water speed, AAV survivability upgrades, Network On-
    The-Move (NOTM), Ground/Air Task Oriented Radar (G/ATOR), JLTV, and
    aviation platforms such as the MV-22, CH-53K, and F-35B are required to
    modernize capabilities and provide the technology required to dominate
    our adversaries.
        Modernization consists of three elements: development of new
    technologies, the procurement of new capabilities, and investment in
    legacy systems. An over commitment in one element creates missed
    opportunities in another. The Marine Corps is investing heavily in
    legacy systems partially due to the time required to recapitalize
    needed capabilities. This necessary allocation with limited resources
    in turn results in less investment in areas needed for a rapidly
    changing world (i.e. live virtual training, digital interoperability,
    and connectivity across Service components). For example, the
    subcomponent shortfalls and age of the AAV fleet has led to lower
    reliability and increased risk in operational mission profiles. The
    need for recapitalization of the 42 year old AAV is critical and the
    Nation cannot afford to gap this capability. The application of fiscal
    resources that would otherwise be focused on recapitalization and
    modernization is necessarily directed toward sustainment. Current
    maintenance for AAVs averages approximately $575,000 per AAV, per year
    with future depot maintenance costs growing to $700,000 per AAV in
    fiscal year 2016. This required allocation of precious resources works
    against our other modernization and recapitalization efforts.
        For our legacy aircraft platforms, the focus is on modernization to
    keep them relevant in today's fight while providing a bridge to our
    aviation recapitalization efforts. Rapid procurement of these new
    systems is critical to solving both our serious current and future
    readiness problems. Reduced modernization investment has also stretched
    our program timelines to the limit of their acquisition baseline. Any
    further extension of our program baselines could result in a Nunn-
    McCurdy breach and reduce industry interest in producing limited
    production items. We have also delayed the procurement of other major
    programs like CAC2S so that we now will not reach full operational
    capability until fiscal year 2022 vice fiscal year 2018.
        Limited to essential modernization efforts, the Marine Corps
    forecasts critical issues due to underfunding in several areas
    including:
      --Recapitalization of our 30 year old TRC-170 system needed to
            provide alternate communications networks in degraded spectrum
            contested environments.
      --The Marine Corps' Composite Tracking Network resulting in the
            MAGTF's eventual inability to communicate with the Navy's
            network and participate in their Cooperative Engagement
            Capability.
      --Our ability to maintain Joint Interoperability with other Services
            through the Tactical Communications Modernization (TCM)
            program.
      --Continued underfunding of the Networking On-The-Move (NOTM) program
            leaving two thirds of our operating forces without the ability
            to conduct mobile networking in distributed environments.
            Failure to procure military satellite communications
            (MILSATCOM) kits for, all fielded NOTM systems, will result in
            continued reliance on expensive (leased) commercial satellite
            communications (SATCOM) services.
        Modernization and innovation are more than just procurement
    programs. We must invest in MAGTF experimentation and test new tactics,
    techniques, procedures, gear and concepts that will allow us to meet
    future challenges. Inadequate resources toward modernization will
    further close the technological gap between our capabilities and our
    adversaries. Our adversaries continue to develop new capabilities
    seeking any technology overmatch in specific domains and functions.
    Increasingly capable threats, the proliferation of A2/AD weapons, and
    the aging of key material capabilities create challenges where we will
    pursue Science and Technology (S&T) to maintain our decisive
    technological advantage. We are maintaining our commitment to S&T, and
    we continue to look for opportunities to expand our efforts in this
    critical area.
                            special interest topics
    Marine Corps Force Integration Program (MCFIP)
        Since January 2013, the Marine Corps has opened 5,998 previously
    closed positions to women. We now have 94 percent of our Military
    Occupational Specialties (MOS's) available to women. Some positions
    remain closed--mostly within infantry, artillery, tanks, and assault
    amphibian vehicle specialties. These specialties are the focus of
    ongoing Marine Corps research to establish occupationally specific,
    operationally relevant, gender-neutral physical standards.
        The Marine Corps continues its deliberate, measured and responsible
    approach toward integrating female Marines into previously closed
    occupational fields to the maximum extent possible. As the Marine Corps
    has studied gender integration, we have remained committed to high
    standards and combat effectiveness--from recruiting and entry-level
    training (ELT) to performance in the operating forces.
        During this effort, the Marine Corps has evaluated gender
    integration from ELT to full mission profiles as a complete ground
    combat arms integrated unit. Since this time last year, the Marine
    Corps has established the Ground Combat Element Integrated Task Force
    (GCEITF). The GCEITF is a gender-integrated, ground combat arms unit
    designed specifically to support the most in-depth, detailed study of
    the physical demands associated with ground combat and the associated
    physical performance standards as well as the physiological predictors
    of success. The results from the GCEITF research will inform the
    establishment of occupationally specific, operationally relevant,
    gender-neutral standards based on the required individual physical
    contributions to mission-oriented collective tasks.
        The GCEITF along with our other research and assessment efforts
    will inform a recommendation on further integration to the Secretary of
    the Navy and the Secretary of Defense. That recommendation will be
    provided in late 2015.
    Sexual Assault Prevention and Response (SAPR)
        The Marine Corps' Sexual Assault Prevention and Response mission is
    to develop and manage an evidence-based program that eliminates sexual
    assault within our ranks and provides world-class care to victims.
    Since fiscal year 2012, the Marine Corps has expended more than $16
    million toward SAPR and special victim legal training initiatives.
        The Marine Corps continues to see an overall positive trend in
    closing the gap between the actual number of sexual assaults and those
    that are reported. While the prevalence of Marines experiencing
    Unwanted Sexual Contact (USC) dropped from approximately 3,300 in
    fiscal year 2012 to approximately 2,300 in fiscal year 2014, the Marine
    Corps has seen an 89 percent increase in reports during that same time
    period. Closing the reporting gap is essential to both tackling the
    problem and providing supportive services to victims.
        The addendum to the SAPR Campaign Plan launched in 2012 was
    approved in April 2014 to build upon the positive momentum of the
    campaign thus far by extending the sustainment phase and incorporating
    additional tasks that strengthen SAPR capabilities. In July 2014, the
    Marine Corps released new training called ``Step Up'' that is designed
    specifically for junior Marines, our highest at-risk population for
    sexual assault.
        The Marine Corps continues to improve victim services such as the
    credentialing and up staffing of SAPR victim advocates and the
    development of the Victims' Legal Counsel Organization, which has
    provided dedicated victim legal services to more than 680 clients
    including 388 victims of sexual assault. On the heels of positive
    indicators of SAPR progress, Headquarters Marine Corps' SAPR division
    is expanding its reach with an increased focus on prevention. Our goal
    is to eliminate sexual assault from our ranks. We believe that
    preserving the commanders' ability to lead in this area is a vital
    element of our continued improvement in this current issue.
    Suicide Prevention
        Each tragic loss to suicide has far-reaching impact on families,
    friends and our entire Marine Corps community. The Marine Corps
    embraces prevention efforts through a series of actions to foster hope
    and connection to those at risk for suicide. Community Counseling
    Services located on Marine installations worldwide increase access to
    care and assist Marines, attached Sailors and their families with
    navigating available support resources. The Marine Corps' Marine
    Intercept Program (MIP) uses licensed clinical providers in care
    coordination and outreach services for Marines who are identified as
    having suicidal ideation or have attempted suicide. The DSTRESS
    resource also provides phone, chat and Skype support 24 hours a day, 7
    days a week, 365 days a year. The Marine Corps continues to support
    DSTRESS as a critical resource in suicide prevention.
        Suicide prevention remains a priority for the Marine Corps, and we
    will continue to apply the resources necessary to combat this difficult
    issue.
    Wounded Warriors
        The Marine Corps' commitment to our wounded Marines and their
    families is unwavering. Since 2007, the Wounded Warrior Regiment has
    provided meaningful recovery and transition assistance to wounded, ill
    and injured (WII) Marines, Sailors in direct support of Marine units,
    and their families. Additionally, the WWR administers the Marine Corps'
    federally mandated Recovery Coordination Program, which seeks to
    integrate Marines' medical and non-medical care.
        While the Marine Corps' reduced presence in Afghanistan will result
    in fewer combat casualties, non-combat injuries and illnesses will
    likely remain stable. In addition, instances of PTS and TBI will
    continue to increase due to delayed onset and as Marines often delay
    seeking help.
        Our comprehensive capabilities create the optimal care to meet
    individual Marine's needs. These capabilities include: Recovery Care
    Coordinators, District Injured Support Coordinators, WWR Transition
    Specialists, WWR Liaison Officers and Wounded Warrior Hope and Care
    Centers. Our costs in personnel are more than just numbers. Ultimately,
    the cost of 14 years of war is calculated in lives. From March 2003
    through 7 January 2015, 1,483Marines have given their lives and 13,992
    have been wounded in the service of our Nation. We remember their
    service and sacrifice and thank Congress for their continued support of
    our Wounded Warriors and their families. The Marine Corps will not
    forget the sacrifices our Marines and Sailors have made for the Nation.
    Transition Readiness
        The Marine Corps makes Marines, wins battles, and returns
    responsible citizens following active service. Every year, the Marine
    Corps returns approximately 35,000 Marines to the civilian sector. The
    transition from uniformed service to contributing members of America's
    prosperity as civilians is significant to the economic health of the
    Nation. The technical expertise that Marines have learned during their
    service has significant application value to the country in the
    civilian sector.
        Our transition readiness program is designed to prepare Marines for
    transition to civilian life by preparing and connecting them with
    resources to successfully meet educational, employment or
    entrepreneurship goals. Implementation of transition readiness seminars
    (TRS) and separate ``track options'' classes that align Marines future
    personal and professional goals with hands-on application have created
    an enhanced transition experience for Marines. In fiscal year 2014 and
    the first quarter of fiscal year 2015, TRS attendance exceeded 42,500.
        In fiscal year 2015, Marine Corps Credentialing Opportunities On-
    Line (COOL) was launched. COOL is a credentialing awareness,
    information and resources capability for all Marines, translating their
    Military Occupational Specialties into career development credentialing
    opportunities during and beyond their service. A leading example of the
    21st Sailor and Marine initiative, the establishment of Marine Corps
    COOL with the Navy also established the Department of the Navy (DON)
    COOL as a platform for the Navy/Marine Corps Team. DON COOL has, in
    turn, inspired an Office of the Secretary of Defense (OSD) initiative
    for a similar department-wide landing page for all the Services.
        The Marine Corps also launched the Spouse Transition and Readiness
    Seminar (STARS) at all USMC installations in September 2014. This
    seminar addresses the transitional challenges and opportunities
    specifically for spouses as they prepare to transition with their
    Marines into the civilian world. STARS has been embraced by OSD as a
    model for other services to consider emulating.
        We have fully funded transition assistance in PB16. Effective 1
    October 2014, a new Personal Readiness Seminar (PRS) is being delivered
    to all incoming active duty Marines upon check-in at their first
    permanent duty station. PRS provides an overview of the Marine For Life
    cycle, including personal and professional development programs and
    services, and introductory personal finance topics.
                                   conclusion
        The unpredictability of the future security environment facing our
    Nation today reaffirms the wisdom of the 82nd Congress--the United
    States must maintain a force-in-readiness. The Marine Corps remains
    that expeditionary force-in-readiness. We maintain a high state of
    readiness and remain postured for immediate crisis response across the
    globe. With the continued support of Congress, we will maintain balance
    across our pillars of readiness and deliver ready, relevant, and
    capable Marines and Marine Air Ground Task Forces to our Nation today--
    and tomorrow. During this period of budget austerity, we will set the
    standard for stewardship--every dollar will count. In the end, we will
    do what Marines have always done--innovate for the future, adapt to
    overcome, and always win.

        Senator Cochran. Thank you very much, General. We
    appreciate your presence and your contribution to the hearing.
        I want to recognize Senator Shelby. He was first and the
    next most senior in line.

                     SEQUESTRATION IMPACTS TO SHIPBUILDING

        Senator Shelby. Thank you, Mr. Chairman.
        Secretary Mabus, the President's 2016 budget request
    funding for nine ships, you are very familiar with. How might
    sequestration affect funding for these ships? And what impact
    would that have on mission capabilities? And what specific
    steps are you going to take to protect shipbuilding from
    possible budget cuts? We understand we are dealing as
    appropriators up here, too, sharing the same challenge.
        Secretary Mabus. Thank you, Senator.
        Building ships is a very long-term process, very complex,
    and requires specific skill sets. If you miss a year building a
    Navy ship, you never make it up.
        We are dealing today with decisions made 10, 15 years ago,
    in terms of what ships to build. And for that reason, as I said
    in my opening statement, I am going to do my utmost to protect
    shipbuilding. It is simply not reversible. If we miss a Navy
    ship because of lack of funds, and the next year we get more
    funds, we can't make it up.
        However, having said that, as you protect shipbuilding and
    protect those numbers, because we do have to have that properly
    sized fleet, other things begin to break. Our readiness gets
    stretched. The surge capacity gets stretched. Our forces are
    deployed longer, and for more hazardous missions.
        To give you an example of how we are stretching today, in
    the early 1990s, we had a fleet of about 400 ships. We had 100
    ships forward-deployed at any given time. Today, we have a
    fleet of about 280 ships, building to 300, but today it is
    about 280. We still have 100 ships forward-deployed.
        So the specific actions I am going to take, in any budget
    decision, shipbuilding is protected until the very last, until
    the last dog dies. But doing that causes and exacerbates
    problems in many, many other places.
        Senator Shelby. Admiral, do you want to comment briefly on
    what it does, your inability to project force and so forth? If
    you don't have ships, you are in trouble, aren't you?
        Admiral Greenert. Yes, sir. It underwrites everything.
        As the Secretary said, you can't recover. If you say you
    are not going to build a ship today, they take 6 or 7 years to
    build, sometimes 5, if you are lucky, if you have a multiyear.
    You can't make that up the next year because we have money.
        So therefore, we will look at modernization, munitions,
    because we can recover from that more quickly, Senator.
        Senator Shelby. Secretary Mabus, it is my hope that the
    Navy will continue to equitably, whatever that means,
    distribute work between the two LCS shipyards. Could you
    describe to the committee the Navy's acquisition strategy
    through 2019 for the remaining LCS ships, number 25 through 32?
        Secretary Mabus. Yes, Senator.
        We have found that having two shipyards and having two
    variants of the littoral combat ship has been very helpful in a
    number of ways. One, it keeps competition in the program, and
    it has driven costs down considerably. Two is it gives us
    different capabilities. Each ship brings some unique
    capabilities and capacities that the other one doesn't. And
    third, we are able to train our sailors pretty much on common
    systems for these two ships without duplicating effort.
        So for the ships through 2019, we plan to continue the 50-
    50 split between the two yards. And the Small Service Combatant
    Task Force, which we chartered and which came through, and
    which recommended some upgrades in lethality and survivability
    for ships past 2019, for ships through 52, we are hopeful that
    we can move that up some, that we won't wait until 2019 because
    it is a modification, not a new build. And it is our plan to
    keep procuring both variants, again, competitively, but both
    variants through the entire 52 buy.
        Senator Shelby. This is a high priority for the Navy, is it
    not?
        Secretary Mabus. It is a very high priority.
        Senator Shelby. Thank you, Mr. Chairman. My time is up.
        Senator Cochran. Thank you very much, Senator.
        I know the next Senator who came to the hearing was Senator
    Reed, and Senator Collins soon thereafter, so I will recognize
    Senator Reed first.

                     SUBMARINE SHIPBUILDING LESSONS LEARNED

        Senator Reed. Thank you very much, Mr. Chairman.
        Gentlemen, thank you for your great service.
        First, let me recognize the Chief of Naval Operations and
    thank him for an extraordinary career.
        Thank you for your service, sir.
        And, Secretary Mabus, I will see you Saturday in Quonset
    Point, Rhode Island, for the keel laying of the USS Colorado,
    one of our new attack submarines. I look forward to it.
        And, General Dunford, I just got back from Afghanistan, and
    your extraordinary leadership is evident there in everything we
    are doing. So thank you very, very much.
        The only thing I would say is, I have a feeling General
    Campbell occasionally has some fun when he sits down with the
    President. I don't think you can say that.
        Mr. Secretary, one of the successful programs in
    shipbuilding has been the Virginia-class, under budget, ahead
    of schedule. Can you indicate some of the lessons that we have
    learned as we go forward to the next major submarine project,
    which is the Ohio-class replacement, and what your plans are?

                       NATIONAL SEA-BASED DETERRENCE FUND

        Secretary Mabus. The first lesson we have learned is that
    if we can do a multiyear--and thanks to this committee and to
    Congress, we have been able to do that--our shipyards are able
    to buy material in economic order quantities. They are able to
    smooth out their workload. They are able to do the training and
    the infrastructure that they need.
        Because of that, the contract that we signed last summer to
    buy 10 Virginia-class submarines over the next 5 years, we got
    10 submarines for the cost of nine. We got a submarine for
    free, which is like having one of those little punchcards,
    although with a bigger return, in the end.
        Going forward, in building the Ohio-class replacement,
    there are lessons we are learning in terms of technology. There
    are lessons we are learning in terms of how we build these
    submarines.
        But regardless of how much we can drive the cost down of
    the Ohio-class replacement, regardless of what we can do to the
    schedule, if we don't either pay for this as a national
    program, or plus-up Navy shipbuilding to account for it, then
    it is going to have a very harmful, I can't stress how harmful
    the effects will be on either the fleet or everything else in
    Navy, and that includes attack submarines.
        Senator Reed. Mr. Secretary, last year, in the National
    Defense Authorization bill, we created the National Sea-Based
    Deterrence Fund, which the goal really was to, from a national
    perspective, help defray the cost of not just our seaborne
    deterrence, but subsequently, the rest of the triad, air and
    land. But we are now in the beginning of reconstituting our
    seaborne deterrence. I would hope that this committee will look
    very favorably on providing funds through that mechanism, which
    could be applied, to the point you made, which would be to
    supplement your shipbuilding funds.
        Secretary Mabus. Senator, we very much appreciate the
    establishment of that fund, and we think that it is a great
    first step in that direction.
        And I would point out that, historically, the first two
    times we built ballistic missile submarines, 41 for Freedom in
    the late 1950s, early 1960s, the Ohio-class from 1976 to 1992,
    Navy shipbuilding did receive pretty dramatic increases to
    account for that.
        However, the increases were not enough to shield the rest
    of shipbuilding. And from 1976 to 1980, when we first began the
    Ohio-class, our fleet went down by 40 percent.
        Senator Reed. And just to underscore the point that this is
    a national asset. Basically, this is the most invulnerable part
    of our triad. The demand far exceeds the supply today even,
    Admiral Greenert, in terms of STRATCOM's needs to keep deployed
    and conceal these vessels. Is that clear to you?
        Admiral Greenert. Yes, sir. We have an alert and then we
    have a modified alert, and then we have a nonalert. So the
    nonalert is larger than we provide, but with agreement with
    STRATCOM, we provide alert and mod-alert. We have always met
    that requirement. It is a strategic requirement, as you said.
        However, it is a fairly big demand signal, and the Ohio is
    getting older. The youngest Ohio submarine is 17 years old, so
    they are aging up. We really do have to make this change. It is
    physics and engineering.
        Senator Reed. Thank you very much.
        My time has expired. Thank you, Mr. Chairman.
        Senator Cochran. Thank you, Senator.
        Senator Collins.

              SHIP MULTI-YEAR CONTRACTING AND SEQUESTRATION IMPACT

        Senator Collins. Thank you, Mr. Chairman, and thank you for
    holding this important hearing.
        As the consideration of the budget moves forward, I look
    forward to working with you, Mr. Chairman, with the ranking
    member, and all of the members of this subcommittee, to achieve
    the goals of avoiding the terrible effects of sequestration
    that we have heard described today, and also to achieve an
    outcome that is consistent with longstanding commitments,
    including what is known as the 2002 swap agreement that
    sustained the two shipyards in the large surface combatant
    industrial base. And I look forward to working with you on
    those issues.
        Turning to my questions for today, Mr. Secretary, I was
    very impressed when I heard your track record of placing a
    large number of ships under contract, I believe you said 70,
    within the constrained budgets that you have been provided with
    during your tenure as Secretary.
        One of the ironic aspects of sequestration is that it could
    actually increase your cost per ship or for a submarine, as
    well. Could you explain the importance of the multiyear
    contract to holding down the cost per ship, and what the impact
    of sequestration would be on your ability to have cost-
    effective multiyear contracts, whether it is the 10 DDGs or the
    submarines that you described with Senator Reed.
        Secretary Mabus. Thank you, Senator. As I described to
    Senator Reed, those multiyear buys are some of the most
    effective weapons in our arsenal, in terms of bringing costs
    down, in terms of keeping the industrial base stable, in terms
    of allowing industry to do the things they need to do, the same
    thing with block buys on the littoral combat ship.
        If sequester occurred, one of the dangers is that you may
    break those multiyears. If you do, the ironic and awful result
    is you get fewer ships for more money. So you would end up
    paying more, but getting fewer ships in return, because you
    simply can't plan the way shipyards need to. You can't buy the
    material in the quantities that they need to. You can't do the
    training in the way that they need to. We can't give them some
    assurances that they need.
        Again, I will do everything in my power to protect
    shipbuilding and to protect these multiyears, because it does
    protect not only the industrial base, not only the Navy, it
    protects the taxpayers, because of how we are driving these
    costs down.
        Senator Collins. Thank you. That is one reason I think
    sequestration, in addition to being such a blunt instrument, is
    such a mistake, because it actually ends up, as you said, with
    our paying more for fewer ships.

                                DDG-1000 PROGRAM

        Admiral Greenert, first let me thank you for your many
    trips to Maine. I know that it has meant a great deal to the
    workers at Bath Iron Works when you toured the DDG-1000.
        One of the advantages of this ship is that it requires a
    greatly reduced crew size. At the time when the Pentagon is
    very concerned about personnel costs, that is significant.
        There are other capabilities that are going to be
    particularly useful to the Navy, which I understand is likely
    to base all three of the DDG-1000s in the Asian-Pacific region.
        Could you enumerate some of the advantages this cutting-
    edge destroyer will give you?
        Admiral Greenert. Yes, Senator. Thank you.
        Firstly, as you said, the crew is one third, so that is
    about 150 versus a cruiser today of close to 450, right off the
    bat.
        The power required to run the ship and all of its systems
    is only 50 percent of the capacity of the ship. So this thing
    can grow as we get more payload. It has tremendous growth.
        It is radar-evading, as they say. It is stealthy. So on
    radar, it looks about the size of a tugboat, if you would
    imagine.
        And then, of course, there is an acoustic element. If you
    are under the water and you are listening to it, it does not
    sound like a cruiser or a destroyer. It sounds like a very,
    very small craft. So there is another evading piece.
        It has a tremendous cruise missile capability, anti-air
    capability. It has dual-band radar. That means it can track
    ballistic missiles while protecting itself from cruise
    missiles, that dual band.
        It has a gun that goes three times as far, right now about
    70 miles versus the best we can do today is about 15 miles. So
    that is five times, excuse me.
        It goes on, Senator. This thing is a quantum leap in
    capabilities.
        Senator Collins. Thank you, Mr. Chairman.
        And thank you, Admiral, again, for your service to your
    country.
        Senator Cochran. Thank you.
        Thank you, Senator, for your contribution to the hearing.
        Senator Collins. Thank you.
        Senator Cochran. Senator Schatz.
        Senator Schatz. Thank you, Mr. Chairman.
        Secretary Mabus, Admiral Greenert, General Dunford, I
    appreciate you being here today, and I share the concerns of
    the members of the committee and the people at the dais about
    the effects of sequester on the Navy and Marine Corps. It is
    going to undermine our ability to commit to our strategy in the
    Asia Pacific, and it will hurt our sailors, marines, and their
    families.

                         USMC ASIA-PACIFIC REALIGNMENT

        General Dunford, I want to discuss the realignment of the
    Marines from Okinawa. This is a major part of our rebalance in
    Asia. Moving the Marines from Futenma is consistent with the
    wishes of the people of Okinawa. And in my view, it is part of
    how we continue a strong, lasting security alliance between the
    United States and Japan. And a more distributed laydown gives
    the Marine Corps some strategic flexibility in the Pacific.
        I do have some concerns about the cost of the proposal to
    move the Marines to Guam, and I know you are in the middle of a
    process working to cut costs.
        Could you compare for the committee the cost of training
    and basing marines on Guam with the cost of training and basing
    them in Japan, Australia, Hawaii, elsewhere?
        General Dunford. Senator, thanks for that question.
        First, I have been involved in the Pacific laydown off and
    on for the last 10 years. When I first started to work the
    relocation to Guam, the cost was actually more than twice of
    what it is today. It is now down at around $8 billion, which
    the Japanese pay a significant part of that.
        So we have worked very hard. I think a lot of that comes
    from redesigning the plan, and a lot of that comes from
    collaboration between the Air Force, the Navy, and the United
    States Marine Corps, in order to do that.
        I can't give you, right now, but I will take for the
    record, the specific cost comparisons between each of those
    locations. Although what I can tell you today is that, as a
    result of a lack of training opportunity on Okinawa and
    mainland Japan, we actually relocate our training throughout
    the Pacific anyway. So much of the cost for training, Senator,
    really comes from moving things and moving equipment to
    training locations. We actually experience many of those costs
    today.
        [The information follows:]

        The cost of training and basing out of the continental United
    States (CONUS) is dependent on a number of factors including: the
    number of Marines and their associated training requirements, area cost
    factors, and host nation contributions. The varying sizes of the Marine
    Air-Ground Task Forces and unique training environment of each location
    render direct cost comparisons very difficult to achieve. As the
    initiative to relocate Marines off of Okinawa has matured, the Marine
    Corps worked to balance cost, training capacity, and other factors to
    revise our requirements. The 2012 laydown adjustments to the Guam
    master plan reduced the footprint in Guam to :4700 Marines, with an
    even steeper reduction in dependents from :8,000 to :1700. It also
    changed the nature of the force on Guam from one of a primarily
    permanent change of station, to that of a rotational force. The
    distributed laydown relocates 9,000 Marines from Okinawa, to Guam,
    Australia, Hawaii, and a small number to CONUS.
        The Guam master plan, delivered to Congress last spring, placed
    costs for Guam at $8.7 billion--a bill which is shared with the
    Government of Japan ($3.1 billion)--a significant reduction from the
    initial estimate of nearly $19 billion. Additionally, the Guam
    relocation will provide for robust training opportunities for Marines
    permanently and rotationally assigned to Guam as well as enhanced
    training opportunities during regional exercises. The Hawaii master
    plan, which is in development and will be delivered to Congress upon
    its completion, will provide an initial planning estimate for costs to
    relocate 2,700 Marines from Okinawa to Hawaii. The rotational force in
    Darwin is a phased build up to 2,500 Marines. Department of State and
    Defense negotiations are ongoing to determine facility cost and cost
    share arrangements with the Government of Australia.
        The Guam master plan also includes a robust training capacity for
    PACOM forces in the Commonwealth of the Northern Mariana Islands. This
    joint training range will fill current PACOM training deficiencies and
    will allow PACOM to conduct bilateral and multilateral training with
    partner nations on U.S. soil, a key component of our regional
    engagement objectives. The nature of the requirements for training and
    dispersion throughout the Pacific have informed the decisions for the
    laydown and driven the costs.

        One of the things that will be available at Guam and in the
    Northern Marianas, in general, will be training facilities that
    will meet our aviation requirements, which are going to be
    conducted in that area anyway, due to constraints up in
    mainland Japan and also some live-fire ranges and so forth that
    will better support our overall Marine Air-Ground Task Force
    training.
        Senator Schatz. Thank you, General. And on the total number
    of marines on Guam, the number I think briefed to Congress last
    year was 5,000, down from 8,000. Can you tell me how you got to
    the 5,000 and whether that number is now firm, or do you
    anticipate that it could float up or down?

                   AMPHIBIOUS LIFT CAPACITY AND REQUIREMENTS

        General Dunford. That number is correct, Senator, first. It
    is 5,000; 3,000 of them are rotational forces; 2,000 are
    permanent personnel.
        We got to that number by looking very carefully at the
    laydown, meeting the Pacific Commander's desires for
    resilience, both politically and operationally. So it really is
    part of an overall laydown that includes Australia, it includes
    Guam, it includes mainland Japan, Okinawa, Hawaii. And they are
    all together in a package.
        So we think that the size of the Marine Air-Ground Task
    Force there is integrated with the overall strategy that
    supports the Pacific Commander.
        Senator Schatz. Thank you. And in your judgment, is there
    sufficient lift capacity to support this laydown plan?
        General Dunford. Senator, at this time, there is not. That
    is one of our major concerns, and that is something we are
    working very closely with the Secretary and the Chief of Naval
    Operations, as well as Transportation Command, on.
        Senator Schatz. Okay, thank you.
        Secretary Mabus, I have a question about credentialing of
    your sailors. I know your first priority is to make sure that
    your sailors and airmen are prepared to prevent and, when
    necessary, win wars. But there has been a discussion
    increasingly about dual credentialing, so that when your
    sailors retire, they are prepared to enter the Merchant Marine
    opportunities that are available.

                 TRANSITION AND MILITARY CREDENTIALING PROGRAMS

        Can you talk a little bit about the DOD's military
    lifecycle transition model, and talk about how we can move
    forward and make sure that your sailors have opportunities in
    the private sector, if that is what they want to pursue?
        Secretary Mabus. That is one of the most important things
    that I think we are doing, Senator.
        Number one, the transition, both in the Navy and in the
    Marine Corps, we try to start a transition a year out, so that
    we make sure that people know what is available, make sure that
    they get the training, make sure that they get the information
    that they need to go through it.
        We have different tracks you can go down, whether to get
    more education, whether to become an entrepreneur, whether to
    get a trade certificate. This interoperability, the dual
    credentialing, things like Merchant Marine, things like EMTs
    for our corpsmen, nurses, things like that, we have actually
    done a good bit of that. And I know we are working hard to make
    sure that people can take the skills that they have learned,
    the leadership that they have learned, to the civilian sector.
        Senator Schatz. Thank you.
        Senator Cochran. Thank you, Senator.
        The distinguished Senator from Missouri, Mr. Blunt.

                           TACTICAL AVIATION PROGRAMS

        Senator Blunt. Thank you, Chairman. Thank you for holding
    this hearing.
        Admiral Greenert, I understand that you are reviewing the
    tactical aviation inventory. I think last week in a House
    hearing you talked about this and how it might relate to a
    couple of planes that we make in our State.
        Can you talk a little bit about the Super Hornets, as they
    may fill a gap here or not? And then any comments you want to
    make about the electronic attack aircraft, the Growler, I would
    like to hear that.
        Admiral Greenert. Yes, sir, Senator. The situation is, we
    are in the middle of a transition from what we call the legacy
    Hornet, that is the A through D, to the Super Hornet, the E/F.
    That transition requires that we retain a certain number of the
    legacy Hornets, but they are old. They were built to fly 6,000
    hours. They are well beyond that. We are trying to get them out
    to 10,000 hours.
        We put this program in place 3 years ago. There were
    caveats. How complicated was it going to be? What kind of skill
    did we need? And we assumed the depots would all be opened with
    skilled workers. Then sequestration hit, and we found as we are
    opening and looking at these A through Ds, there is more
    corrosion. It is more complicated than we thought. It is taking
    longer.
        In the meantime, they are not getting through the depots
    and out into the fleet. They represent about 20 percent of the
    fleet. The 80 percent are the Super Hornets. So we are using
    them up more than we originally intended. A great aircraft, it
    is a great aircraft.
        So as we look out into the future, we say, hey, we are
    using these up more than we thought. We have to look out ahead
    to the hours on the Super Hornet, because this is a piece of
    our strike fighter package, our enterprise into the 2020s and
    2030s, as we bring in the Joint Strike Fighter.
        So here's the conundrum. Can we get these legacy Hornets
    out and in time, so that we don't wear out the Super Hornets
    prematurely? Balancing that becomes the deal, as I go through
    these next 3 or 4 years, where we will have the legacy Hornets.
        So right now, we have a plan in place to get our way
    through this. But there are risks. And I just described the
    plan. There are risks to all of that. Can we get the artisans?
    Can we get the engineers? Can we get these Super Hornets
    through in time?
        So we have a shortfall in Super Hornets. We do. And we are
    going to have to work our way through here in order to manage
    it.
        Would we have bought more? It was a matter of a budgetary
    decision, an endgame to compare our TAC Air with the other
    requirements in the budget.
        And I listed in my statement, regrettably, some of the risk
    we have been taking is in aircraft procurement.
        To electronic attack, as I came before the committee last
    year, I said I am concerned we won't have enough electronic
    attack aircraft. The Growler is the Department's primary
    aircraft, the only aircraft in this area.
        The committee responded. The Congress responded. And I
    thank you for that, Senator, for your part in that.
        I requested that we get a study done this summer and
    unambiguously declare what the requirement would be. It didn't
    get done. It is in progress for this next year.
        So, with your help, and the committee's help, we have what
    we need today. What I don't know yet, until we finish this
    study and get an unambiguous declaration, what will the
    electronic capabilities requirement be in the future.
        Senator Blunt. On the Super Hornets, do you have a sense of
    what your shortfall may be?
        Admiral Greenert. I think probably the equivalent of two or
    three squadrons, it might be. It could manifest to that. I have
    to see how that turns out.
        Now, shortfall means that would be the ultimate, if you
    will, the sweet spot of the number we have. We can work through
    a certain number of shortfall, 70, 80, and we have done this
    before.
        But the question remains, as we work through this legacy
    piece, how many hours are we using up on the Super Hornets that
    we didn't intend as we started this journey?
        Senator Blunt. When do you think that review will give you
    some more specific information, as to where you are, compared
    to where you thought you would be?

                 TACTICAL AVIATION PROGRAMS--DEPOT MAINTENANCE

        Admiral Greenert. The real issue becomes getting the legacy
    through those depots. In about 15 months, I will have a much
    better feel, because they are starting to pick up speed now,
    fortunately, as we go along.
        But the world is getting a vote, as we say, and we are
    flying long missions overseas now into Afghanistan and even
    into Iraq and Syria. It is a long flight.
        Senator Blunt. Of course, I don't need to remind you, but
    keeping the line open here becomes critical, with no orders
    beyond what we put in on the Growler, and the Growler and the
    Super Hornet use that same capacity and facility.
        I want to continue to talk to you about this, so when you
    have more information, I am sure the committee will be glad to
    hear it, but I would particularly be glad to hear more as that
    study develops.
        Admiral Greenert. Will do, Senator.
        Senator Blunt. Thank you.
        Thank you, Chairman.
        Senator Cochran. Thank you very much, Senator.

                     AMPHIBIOUS SHIP CONSTRUCTION PROGRAMS

        General Dunford, while the current shipbuilding plan only
    calls for 33 amphibious ships, requests from combatant
    commanders call for up to 54 amphibious ships to meet
    operational demands. In light of this deficiency, do you
    believe it would be wise to accelerate the build plan of
    certain amphibious ships to ensure that we have the ships
    needed to execute the National Defense Strategy and meet
    operational readiness challenges?
        General Dunford. Chairman, thanks very much for that
    question. I think what you did last year to help us, this
    committee, with the 12 LPDs, is a key part of trying to address
    that amphibious capability gap you mentioned. But not only
    accelerating that ship and then replacing the LSD, we are
    working very closely with the Secretary and the Chief of Naval
    Operations on a plan to do that, but also one of the things we
    are doing to mitigate that gap is using alternative platforms,
    the mobile-landing platform, afloat staging base. We now have
    the third one in place that will be available here in a couple
    years.
        So alternative platforms are also a key part, as well as
    accelerating amphibious ships, chairman.
        Senator Cochran. Thank you very much.
        The Senator from Alabama.
        Senator Shelby. Thank you, Mr. Chairman.

                     LONG-RANGE ANTI-SHIP MISSILE PROGRAMS

        Admiral Greenert, the President's budget for 2016 proposes
    accelerated acquisition of the long-range anti-ship missile, so
    that it can reach early operating capability by 2018 or 2019,
    is my understanding.
        Could you discuss just briefly the importance of continuing
    to fully fund development of a long-range anti-ship missile,
    and what it means to the Navy, what it will mean to the Navy?
        Admiral Greenert. Thanks, Senator.
        Senator Shelby. It is cutting-edge technology, isn't it?
        Admiral Greenert. Yes, sir. It is.
        Today, our primary cruise missile is the Tomahawk. She has
    served well for three decades. There comes a limit to what--it
    is an air-breathing missile. That means it is not hypersonic.
    It doesn't go faster than the speed of sound.
        The missile you described is what we call hypersonic. It is
    really fast. It is hard to target. When it reaches its target,
    it does a very high speed----
        Senator Shelby. It would be hard to stop, too, wouldn't it?
        Admiral Greenert. Come again, sir?
        Senator Shelby. It would be hard to intercept?
        Admiral Greenert. Very hard to intercept and evasive. So we
    need to move out in that regard.
        Senator Shelby. Okay.

                      LITTORAL COMBAT SHIP AVIATION ASSETS

        Secretary Mabus, the USS Fort Worth, a littoral combat ship
    deployed to Singapore in November 2014, just a few months ago,
    has thus far successfully, it is my understanding, employed a
    mixed aviation detachment, which combines manned and unmanned
    systems.
        Can we expect to see more mixed aviation detachments like
    this in the future? And are they the future?
        Secretary Mabus. I think the short answer is yes to both of
    those questions. Yes, you can expect to see more of it. And
    yes, that is pretty much the future.
        By combining that manned and unmanned craft on a single
    littoral combat ship, you get the best of both worlds. You get
    the fire scout, the unmanned system that can do very dangerous
    tasks and very long-term tasks that, if you put a person in the
    helicopter, you couldn't do.
        By pairing that with an MH-60 helicopter, which has
    incredible antisubmarine capabilities, and antisurface, you do.
        And we have carried out the first crew swap on the Fort
    Worth very successfully, and that is the first of the ships
    that will remain in Singapore. They won't be homeported there,
    but they will be forward-deployed there. We will reach four
    LCSs by 2017 that will be in that region full-time.
        Senator Shelby. It gives you a lot of firepower you
    wouldn't have, would it not?
        Secretary Mabus. It gives you incredible firepower,
    incredible flexibility.
        And the concern was that it needed to do what a frigate
    did. So when you put what a frigate does next to what the
    upgraded LCS does, that is why I renamed the upgraded LCS a
    frigate. It's the same ship.
        Senator Shelby. It just changes the game, doesn't it?
        Secretary Mabus. It does, with speed and with lethality.

                      JOINT HIGH SPEED VESSEL REQUIREMENTS

        Senator Shelby. Thank you.
        Mr. Secretary, one last question. The Navy in October 2008,
    we know that is 7 years ago, nearly, the Navy affirmed an 18-
    ship requirement for the joint speed vessel, JHSV. The Navy, I
    understand, is expected to put under contract the 11th one.
        Where are you and where is the Navy on this now? Are you
    going to push for the 18 ships? What is going to happen? Or
    does a lot of it depend on what we do?
        Secretary Mabus. Well, part of it, we took a look, I
    believe in 2010, and reduced the number from 18 to 10. That was
    done on what the combat commander needed and how we could move
    troops around.
        Thanks to this committee, thanks to Congress, we got an
    11th high speed vessel in 2015, which we very much appreciate.
        We are going to keep a continuous look on that, because, as
    General Dunford said today, we don't have adequate lift,
    particularly in the Pacific. The joint high-speed vessel is one
    of the solutions to that. Now that we have our first JHSVs out
    in the fleet operating, not only to carry marines but also to
    do theater security cooperation, we have one in South America
    today, we will continue to evaluate the need for how many we
    need in the future.
        Senator Shelby. Thank you.
        Thank you, Mr. Chairman.
        Senator Cochran. The distinguished Senator from Maine.
        Senator Collins. Thank you, Mr. Chairman.

                          U.S. NAVY SHIP REQUIREMENTS

        Admiral, am I correct that when you survey the combatant
    commanders, that they actually tell you that you would need 450
    ships in order to meet all of the military requirements that
    they have identified?
        Admiral Greenert. You are correct, Senator.
        Senator Collins. So we need more of all kinds of ships and
    submarines in order to meet those military requirements.
        What is the projected plan for where we would be on the
    number of ships 5 years from now?
        Admiral Greenert. Well, we will be at 304 ships in 2020
    with the President's budget. And as you said, it is not just
    the numbers; is it the right kind of ship. So we are building
    the right kind of ships because we are doing multiyears for
    destroyers, the Swiss Army knife of the fleet. It does it all,
    our early Burkes.
        And in submarines, we have to build two a year to get out
    of an inevitable divot. And, of course, the littoral combat
    ship, that is our small surface combatant. We have about half
    of the number that we need.

                 U.S. MILITARY FORCE REQUIREMENTS--AFGHANISTAN

        Senator Collins. Thank you. That is very helpful.
        General, you spent a great deal of time in Afghanistan as
    commander, and I thank you for that service. I noticed you were
    there for, I think, 14 months, which is a long tour of duty.
        In your personal, professional opinion, should we have a
    residual force left in Afghanistan at the end of next year?
        General Dunford. Senator, I believe we should. And the most
    important thing that we need is an effective counterterrorism
    partner in the region, in Afghanistan, in that particular
    region. We also need an effective counterterrorism platform,
    which Afghanistan would be, if we developed the kind of
    relationship that we are working on now with the Afghans, as
    well as building their own capacity.
        So I do think some residual capacity at the end of next
    year is going to be critical for us to protect our own national
    interests.
        Senator Collins. And how many troops do you think is an
    appropriate number for that residual force?
        General Dunford. Senator, I prefer to probably talk to you
    about that in private, at this point, because I know that my
    successor now is in the process of providing best military
    advice to the President, and I wouldn't want to publicly get
    out in front of the individual who is actually on the ground
    now working with that issue.
        Senator Collins. I understand. Thank you.
        Senator Cochran. The distinguished Senator from Alabama.
        Senator Shelby. I have concluded mine, Mr. Chairman.
        Senator Cochran. The Senator from Missouri.
        Senator Blunt. Thank you, Chairman.

                   TACTICAL AVIATION MAINTENANCE REQUIREMENTS

        General Dunford, back to planes again, how many F-18
    aircraft do you have on the out-of-reporting status?
        General Dunford. Fifty percent, Senator, of our F-18s right
    now are out of reporting. That is over 100 aircraft.
        Senator Blunt. Is there any comparative number to what
    would normally be acceptable there?
        General Dunford. Well, we would seek to have somewhere
    around 80 percent of our aircraft available.
        Senator Blunt. As opposed to the 50 percent?
        General Dunford. As opposed to 50 percent.
        Senator Blunt. What risk does that establish with only 50
    percent available?
        General Dunford. Senator, it is risk in a couple areas.
    First and foremost, it is risk in our ability to respond to a
    major contingency. That is one of the components. When I talked
    about the readiness of our forces that are home stationed,
    their nondeployed status or the nondeployed units and their
    readiness status, their ability to respond to a contingency in
    the Korean Peninsula or some other major adversary would be
    challenged as a result of the loss of those aircraft.
        It also impacts our ability to train pilots to the right
    standards, because there aren't enough aircraft available on a
    day-to-day basis to be able to do that.
        Senator Blunt. And what are you trying to do to mitigate
    the problem?
        General Dunford. A key piece of that, Senator, is what
    Admiral Greenert spoke about. As a result of sequestration in
    2013, our depot maintenance was backlogged. That is one of the
    reasons--that is one of the major contributing factors to our
    out-of-reporting F-18s today.
        So getting depots back up and operating and maximizing
    their throughput, which includes a more detailed approach to
    triaging aircraft to get them into the facilities and get them
    up more quickly, is one of the major things we are doing to try
    to accelerate that. And, of course, for Marine aviation, a key
    piece is accelerating the F-35 and transitioning to the F-35,
    which is the future for Marine aviation.

                    AIRBORNE ELECTRONIC ATTACK REQUIREMENTS

        Senator Blunt. And one question just, Admiral Greenert, on
    that F-35 topic, back to the Growlers that are in process now.
    I believe you said last year that you thought that electronic
    product that the Growler produces was a key part of the future
    package that involved F-35s and that would be defense system-
    wide, not just Navy planes, not just Navy, but that would add
    an important electronic warfare component to an F-35 package.
        Do I remember that correctly?
        Admiral Greenert. You did, Senator. The Growler with the
    pod, that is the real jammer, is the electronic attack
    capability for the Department of Defense from the air, tactical
    air.
        Now, an F-35 by itself can provide for itself, if you will.
    But we go in as a package. We go in suppress, do the business,
    get access, and come back. So you had it right, Senator.
        Senator Blunt. Okay. Thank you.
        Thank you, Chairman.
        Senator Cochran. Thank you, Senator.
        Are there other questions of the panel?

                         ADDITIONAL COMMITTEE QUESTIONS

        Senator Cochran. In closing, then, let me thank our
    distinguished panel of witnesses for your testimony and your
    continued assistance to the committee.
        We are grateful for your service to our Nation. We look
    forward to continuing a dialogue throughout the fiscal year
    2016 in connection with the appropriations process.
        If there are any additional questions from members of our
    committee, they will be submitted to each of you for your
    responses.
        [The following questions were not asked at the hearing, but
    were submitted to the Department for response subsequent to the
    hearing:]
                     Questions Submitted to Hon. Ray Mabus
                   Question Submitted by Senator Thad Cochran
        Question. The Navy's current sustainment plans for Reactive Skin
    Decontamination Lotion (RSDL) kits are at levels significantly below
    the Total Service Requirement (TSR) originally established by the
    Service. Although the DOD's Joint Program Executive Office--Chem Bio
    Defense (JPEO-CBD) initially provided the Navy a full inventory of RSDL
    decontamination kits (359,620 kits), it is my understanding that the
    Navy has not properly replenished its inventory. Nearly 100,000 of the
    RSDL kits provided to the Navy by the JPEO-CBD have reached their
    expiration date, but the Navy has only purchased 26,160 new kits. It is
    my understanding that by fiscal year 2019, all of the RSDL currently on
    hand in the Navy's inventory will have expired. Indications exist that
    the Navy intends to replenish less than half of the TSR-mandated kits.
    The Navy recently acknowledged that its sustainment plans for RSDL are
    below TSR, but stated that they are ``employing innovative cost savings
    approaches, such as centralized sustainment, to optimize requirements
    and readiness.''
        How will ``employing innovative cost savings approaches, such as
    centralized sustainment'' ensure that Navy personnel have sufficient
    quantities of RSDL to protect them from chemical warfare attack? Has
    the Navy reduced its Total Service Requirement (TSR) for chemical
    warfare decontamination kits? What is the rationale for this reduction?
    Has the threat of chemical warfare attack diminished? What would the
    Navy require to maintain its RSDL inventory to meet the Total Service
    Requirement (TSR) level?
        Answer. Bottom Line upfront: The Navy is procuring sufficient
    quantities and effectively managing its inventory of Chem-Bio defense
    consumables to ensure all Navy personnel are adequately protected.
        The Navy took delivery of 359,629 Reactive Skin Decontamination
    (RSDL) kits procured via the JPEO-CBD between fiscal year 2010-2012.
    During fiscal year 2013-2014, Navy purchased 18,040 new RSDL kits to
    replenish the centralized pool inventory under the Navy Centralized
    Sustainment Program. In addition, Navy requested and received 100,000
    RSDL kits from the JPEO-CBD in fiscal year 2014. JPEO-CBD was able to
    support this request due to re-distribution of assets that became
    available due to the drawdown of U.S. Ground Forces in CENTCOM. This
    re-distribution supports Navy's Fleet requirement from fiscal year 2015
    until 2nd quarter, fiscal year 2017.
        Navy is efficiently utilizing its RSDL inventory and manages the
    RSDL kits through the Centralized Sustainment Program. RSDL sealed
    boxes are fielded to ships according to closest expiration date, and
    are stored in temperature controlled shipboard repair lockers until
    needed. Following a ship's return from deployment, these RSDL kits are
    inspected and returned to the Navy centralized pool. These efficiency
    practices extend RSDL lifecycle from 6 months to 5 years.
        In fiscal year 2014, Navy reduced TSR for RSDL by 20 percent. This
    reduction was made possible through an assessment of the effectiveness
    of the Collective Protection System (CPS). Navy platforms outfitted
    with CPS have high personnel protection levels against Chem-Bio attack.
    Sailors assigned to ships equipped with CPS have the dual protection
    afforded by this system as well as individual protective equipment
    (IPE). For non CPS-equipped platforms, Navy has continued to maintain
    100 percent fielding of RSDL kits. The threat of chemical attack has
    not diminished; Navy has maintained robust capability to defend against
    such an attack.
        Starting in fiscal year 2017, the Navy will require $2.8 million
    per year to maintain the RSDL inventory at the current TSR. The Navy
    will continue to maintain an adequate inventory of RSDL and other
    consumables necessary to protect personnel against CBRN attack. This
    will include service funding, OCO requests and request(s) to JPEO-CBD
    for asset redistribution.
                                     ______

                    Questions Submitted by Senator Tom Udall
        Question. Describe the role of the Navy's Chief Information Officer
    (CIO) in the development and oversight of the IT budget for the Navy.
    How is the CIO involved in the decision to make an IT investment,
    determine its scope, oversee its contract, and oversee continued
    operation and maintenance?
        Answer. The Department of the Navy CIO provides overarching
    programming guidance for IT and reviews the department's IT budget
    prior to submission to OSD. The DON CIO reviews the business cases for
    all proposed IT investments and collaborates with the DON Deputy Chief
    Management Officer to develop the annual DON Organizational Execution
    Plan for IT, a business value review that identifies what IT
    investments the department will sustain, and which it will retire. The
    DON CIO is also a full participant in the DON Two Pass, Six Gate review
    process for all IT acquisition programs or programs containing
    significant IT components.
        Question. Describe the existing authorities, organizational
    structure, and reporting relationship of the Chief Information Officer.
    Note and explain any variance from that prescribed in the newly-enacted
    Federal Information Technology and Acquisition Reform Act of 2014
    (FITARA, PL 113-291) for the above.
        Answer. The Department of the Navy Chief Information Officer's (DON
    CIO) authorities, position in the Department, and reporting
    relationship are those appropriate to a Military Department CIO per
    FITARA. The DON CIO ranks as a staff assistant to the Secretary and the
    Under Secretary. Though the office is aligned administratively as part
    of the Office of the Deputy Undersecretary for Management, the CIO has
    a direct line of communication with the Secretary on those matters
    required by law, regulation, and policy. The DON CIO is the DON's
    senior information management, information technology (IT), and
    information resources management official, and participates in the DON
    processes for approval of contracts for IT and for reprogramming of IT
    funds.
        Question. What formal or informal mechanisms exist in the Navy to
    ensure coordination and alignment within the CXO community (i.e., the
    Chief Information Officer, the Chief Acquisition Officer, the Chief
    Finance Officer, the Chief Human Capital Officer, and so on)?
        Answer. The Department of Navy Business Transformation Council
    serves as the senior governance forum for cross-functional management
    issues. The forum is chaired by the Under Secretary of the Navy/Chief
    Management Officer and includes the Assistant Secretaries of the Navy,
    Deputy Under Secretaries of the Navy, Vice Chief Of Naval Operations,
    Assistant Commandant of the Marine Corps and DON Chief Information
    Officer. Since its inception in 2009, the Business Transformation
    Council has effectively resolved a variety of management issues and is
    used to coordinate across functional areas.
        To strengthen the coordination and integration between strategy,
    business operations, and information technology, in 2014 the Secretary
    of the Navy realigned the Chief of Business Operations, Chief
    Information Officer and Chief of Strategy and Innovation under the
    Deputy Under Secretary of the Navy (Management). This restructuring
    ensures information technology and business functions are properly
    aligned to the strategic goals of the Department of the Navy.
        There are also a variety of informal mechanisms that are used to
    coordinate across functional areas. One example includes the Chief
    Management Officer's Advisory Group. This forum provides flexible
    options to address specific management issues and is comprised of
    Senior Department of Navy personnel, organized around a specific
    management issue. For example, the advisory group was used to establish
    comprehensive policy for accountable property management in the
    Department of Navy.
        Question. According to the Office of Personnel Management, 46
    percent of the more than 80,000 Federal IT workers are 50 years of age
    or older, and more than 10 percent are 60 or older. Just 4 percent of
    the Federal IT workforce is under 30 years of age. Does the Navy have
    such demographic imbalances? How is it addressing them?
        Answer. At present, the demographics of Department of the Navy's
    (DON) civilian IT workforce closely tracks with the overall Federal
    workforce. With more than 14,000 members in the DON IT functional
    community, percentages are as follows: 46.7 percent are 50 years of age
    or older, 10.3 percent are 60 or older and 5.5 percent are under the
    age of 30.
        The Department is actively engaged in utilizing special hiring
    authorities to attract, hire and retain employees in Information
    Technology as well as the field of Cyber Security. Of particular note
    is that although 57 percent of our IT workforce is age 50 or older,
    more than 40 percent of our workforce has 5 years of Federal civilian
    service or less. This is a clear indication that the DON is seeking out
    and bringing new employees into the civilian service. Further, the
    percentage of IT employees under age 50 is more than 40 percent
    workforce.
        The DON's goal is to always ensure it has the right skills in the
    right place to meet its mission requirements. The DON remains focused
    on workforce planning initiatives, and more than 30 percent of our IT
    workforce is in lower-level training and developmental positions,
    receiving mentoring and guidance from more senior employees. This is an
    effective way to create and develop the future IT workforce of the
    Department.
        Question. How much of the Navy's budget goes to Demonstration,
    Modernization, and Enhancement of IT systems as opposed to supporting
    existing and ongoing programs and infrastructure? How has this changed
    in the last 5 years?
        Answer. The Department of the Navy's (DON) IT budget is split into
    Development/Modifications of IT systems and Current Services. For
    fiscal year 2016, approximately $1.3 billion or 16 percent of the total
    IT budget supports development/modifications of IT systems. The
    remaining $6.6 billion supports current services of existing and
    ongoing programs and infrastructure. Over the past 5 years, DON's
    development/modifications spending on IT systems has consistently
    decreased with every budget submission. This decrease can be partially
    attributed to the completion of major development programs over the
    last 5 years; programs that not only reduced legacy IT but left the
    development/modification stage and are now in sustainment.
        Question. What are the 10 highest priority IT investment projects
    that are under development in the Navy? Of these, which ones are being
    developed using an ``agile'' or incremental approach, such as
    delivering working functionality in smaller increments and completing
    initial deployment to end-users in short, 6-month timeframes?
        Answer. The top 10 highest priority Department of Navy IT
    investments are as follows. Note: This includes systems that are also
    in sustainment. Due to the mission impact and resources associated with
    these systems, they are considered top priority investments for the
    Department of Navy.
        1. Next Generation Enterprise Network (NGEN) Increment 1.--NGEN is
    an enterprise network which will provide secure, net-centric data and
    services to Navy and Marine Corps personnel and represents the
    continuous evolution of information technology at the Department of
    Navy. NGEN was developed using a Lowest Price Technically Acceptable
    (LPTA) contracting approach to ensure functionality was delivered in a
    timely manner.
        2. Consolidated Afloat Network Enterprise Services (CANES).--CANES
    will replace existing afloat networks and provide the necessary
    infrastructure for applications, systems, and services to operate in
    the tactical domain. The initial delivery of CANES meets initial or
    threshold capabilities but since CANES is a Commercial-Off-The-Shelf
    (COTS) integration program, it has been funded for regular, periodic
    technology refresh to mitigate obsolescence and emerging cyber threats.
        3. Base-Level Information Infrastructure (OCONUS Navy Enterprise
    Network (ONE-NET)).--ONE-NET provides a fully integrated, interoperable
    and secure information technology (IT) infrastructure to our forward
    deployed OCONUS bases, stations, homeports and OCONUS/CONUS piers. ONE-
    NET was developed using an incremental Government Owned/Contractor
    Operated (GO/CO) contracting approach to ensure functionality was
    delivered in a timely manner.
        4. Multifunctional Information Distribution System (MIDS).--MIDS is
    a jam-resistant, secure, digital (voice/data) information distribution
    system enabling rapid integrated communications, navigation and
    identification for tactical and command and control (C2) operations.
    MIDS is being developed using the waterfall systems development life
    cycle approach.
        5. Navy Enterprise Resource Planning (Navy ERP).--Navy ERP was
    established to transform and standardize Navy business processes for
    key acquisition, financial, and logistics operations. Navy ERP was
    developed using a spiral acquisition approach to ensure functionality
    was delivered in a timely manner.
        6. Naval Tactical Command Support System (NTCSS).--NTCSS is a suite
    of applications supporting Navy and Marine Corps supply and maintenance
    activities, both ashore and afloat, in a common computing
    infrastructure. NTCSS manages non-tactical information resources,
    including logistics, maintenance, administrative, and supply
    management, to meet the force readiness and sustainment requirements of
    the Navy and Marine Corps. NTCSS is being developed using an agile
    approach to ensure functionality is delivered in a timely manner.
        7. Global Combat Support System-Marine Corps (GCSS-MC) Logistics
    Chain Management Increment 1.--GCSS-MC is a portfolio of systems that
    supports logistics elements of command and control, joint logistics
    interoperability, and secure access to and visibility of logistics
    data. GCSS-MC is being developed using a spiral approach to ensure
    functionality is delivered in a timely manner.
        8.  Common Aviation Command and Control System (CAC2S) Increment
    1.--CAC2S Increment 1 is a coordinated modernization effort to replace
    the existing aviation command & control equipment of the Marine Air
    Command and Control System and provide the Aviation Combat Element with
    the necessary hardware, software, equipment, & facilities to
    effectively command, control, & coordinate aviation operations. CAC2S
    Increment 1 is being developed using a phased approach to ensure
    functionality is delivered in a timely manner.
        9.  Tactical Data Network-Data Distribution System (TDN-DDS).--The
    TDN-DDS augments the existing Marine Air Ground Task Force (MAGTF)
    tactical communications infrastructure to provide the MAGTF commander
    an integrated data network. TDN DDS acquires and fields COTS components
    in two increments, achieves Full Operational Capability during March
    2015, and will go through periodic tech refresh.
        10.  Enterprise Procurement System (EPS).--EPS will replace the
    legacy Standard Procurement System and provide contract writing
    capability to the entire Department of Navy. EPS is being developed
    using a phased approach to ensure functionality is delivered in a
    timely manner.
        Question. To ensure that steady state investments continue to meet
    agency needs, OMB has a longstanding policy for agencies to annually
    review, evaluate, and report on their legacy IT infrastructure through
    Operational Assessments. What Operational Assessments have you
    conducted and what were the results?
        Answer. Each year, the Department reviews its operational IT
    investments for business value, alignment with the overall
    architecture, return on investment, and efficiency & effectiveness.
    Based upon the reviews, investments are designated for either continued
    operation and sustainment or retirement. These designations are
    included in the DON Organizational Execution Plan submitted to DOD CMO
    to support the Department's request for certification of its IT funds.
    At latest count, the reviews have resulted in 337 investments being
    selected for retirement.
        Question. What are the 10 oldest IT systems or infrastructures in
    the Navy? How old are they? Would it be cost-effective to replace them
    with newer IT investments?
        Answer. Identification of the 10 oldest systems is less beneficial
    than understanding the comprehensive manner in which the Department of
    Navy (DON) assesses which systems should be replaced, not the least of
    which would be cyber security concerns and contribution to enterprise
    solutions. The DON continues to assess its IT systems and
    infrastructures through the budgeting process as well as through the
    acquisition process, using tools such as business case analyses to help
    inform decision makers.
        The Department has been working to eliminate and reduce the number
    of IT systems and their related infrastructure. For IT investments, the
    DON does look at cost as a factor in the decisionmaking process, along
    with other aspects such as functionality, capability and cyber posture.
    The objective is to determine where best to invest resources to ensure
    the Department's IT enterprise is as effective and cyber resilient as
    possible. For example, the Next Generation Enterprise Network (NGEN)
    program has already absorbed numerous outdated IT systems ashore and is
    on track to transition-in the entirety of the legacy Outside the
    Continental United States Navy Enterprise Network (ONE-NET)/Base Level
    Information Infrastructure (BLII) by the end of fiscal year 2017.
        The Consolidated Afloat Network Enterprise Services (CANES) program
    is replacing and consolidating several legacy afloat networks and
    provides the necessary infrastructure for modern applications, systems
    and services to operate in the tactical domain. CANES takes advantage
    of Commercial-Off-The-Shelf (COTS) technology and was structured to
    incorporate periodic technology refresh cycles to mitigate obsolescence
    and emerging cyber threats.
        In the business system arena, the DON fielded its Enterprise
    Resource Planning (ERP) system several years ago, which eliminated over
    80 legacy systems. Finally, there is funding in the fiscal year 2016
    budget to develop new IT systems, such as the future enterprise
    contracting system, aimed at replacing the old Standard Procurement
    System managed by OSD.
        Question. How does the Navy's IT governance process allow for the
    Navy to terminate or ``off ramp'' IT investments that are critically
    over budget, over schedule, or failing to meet performance goals?
    Similarly, how does the Navy's IT governance process allow for the Navy
    to replace or ``on-ramp'' new solutions after terminating a failing IT
    investment?
        Answer. Department of the Navy (DON) IT program cost, schedule, and
    performance are constantly monitored and regularly reviewed under the
    processes established by the Defense Acquisition System and the DON's
    policy for implementation and operation of that system. Deviations from
    baseline parameters are addressed with actions prescribed from the
    range available under that system--which includes termination if deemed
    appropriate by the Acquisition Executive. If a program is terminated,
    the capability requirement it was undertaken to answer still exists,
    and that requirement would have to re-enter the Joint Capabilities
    Integration and Development System for new program approval.
        Question. What IT projects has the Navy decommissioned in the last
    year? What are the Navy's plans to decommission IT projects this year?
        Answer. The Department conducts business case analyses each year as
    part of the development of the budget submission. The objective is to
    determine where best to invest resources to ensure the Department's IT
    enterprise is as effective and cyber resilient as possible.
        The Navy's Consolidated Afloat Network Enterprise Services (CANES)
    program is replacing and consolidating numerous legacy afloat networks.
    These legacy systems/networks are end-of-service/end-of-life. CANES
    provides the necessary infrastructure for modern applications, systems
    and services to operate in the tactical domain. CANES takes advantage
    of Commercial-Off-The-Shelf technology and was structured to
    incorporate periodic technology refresh cycles to mitigate obsolescence
    and emerging cyber threats. To date, we have completed 19 CANES
    installations on 15 Unit Level platforms (e.g. CGs, DDGs, LSDs) and
    four Force Level platforms (i.e. 3 CVNs and 1 LHD), with twelve
    installations ongoing this year for another seven Unit Level and five
    Force Level platforms.
        The USMC has retired or replaced a number of IT systems in the last
    year. These include:
      --The Commanding Officers Readiness Reporting System was
            decommissioned and its functionality is now available within
            the Installation Statistics, Analytics, & Reporting (iSTAR)
            module of GEOFidelis. GEOFidelis is the USMC Installation
            Geospatial Information and Services program for Installation
            and Environmental geospatial products and services.
      --The Non-Appropriated Funds (NAF) Electronic Point of Sale (EPOS)
            system was replaced by the Retail Point-of-Sale System (RPOS).
      --The Tactical Hydrographic Survey Equipment was superseded by a new
            requirement, the Diver Reconnaissance Vehicle (DRV), which is
            the result of a requirements revalidation by USMC Combat
            Development and Integration.
        The USMC will continue to retire and/or replace aging systems in
    the coming year, including: Mechanization of Warehousing and Shipment
    Processing (MOWASP), Automated Set Assembly (ASA) and Material Returns
    Program Marine Corps (MRP MC).
        Question. The newly-enacted Federal Information Technology and
    Acquisition Reform Act of 2014 (FITARA, PL 113-291) directs CIOs to
    conduct annual reviews of their IT portfolio. Please describe the
    Navy's efforts to identify and reduce wasteful, low-value or
    duplicative information technology (IT) investments as part of these
    portfolio reviews.
        Answer. The DON Deputy Chief Management Officer and the DON CIO
    collaborate on the department's annual Organizational Execution Plan
    (OEP). The OEP is a review of IT investments that considers their
    alignment with the DON Business Enterprise Architecture, business
    value, cost, return on investment, and efficiency and effectiveness.
    After also considering operational necessity for warfighter support,
    investments are designated for either continued operation and
    sustainment or retirement. The completed OEP is submitted to the DOD
    DCMO to support the DON's request for certification of IT funds.
        Question. In 2011, the Office of Management and Budget (OMB) issued
    a ``Cloud First'' policy that required agency Chief Information
    Officers to implement a cloud-based service whenever there was a
    secure, reliable, and cost-effective option. How many of the Navy's IT
    investments are cloud-based services (Infrastructure as a Service,
    Platform as a Service, Software as a Service, etc.)? What percentage of
    the Navy's overall IT investments are cloud-based services? How has
    this changed since 2011?
        Answer. In 2011 and 2012, there were a few small pockets of private
    cloud solutions being developed within the Navy. As with any emerging
    technology, cloud computing had to be put through the development and
    testing paces for our environment. Also, adjustments to our financial
    systems were necessary to capture the various categories related to
    cloud computing for our required IT investment reporting. At the same
    time, DOD was just developing cybersecurity requirements to ensure the
    security of our commercial cloud solutions.
        We have increased our spending on cloud services each year since
    fiscal year 2013. Though it only represents less than 1 percent of our
    total IT investment, we are still in the pilot and early adoption
    stages of cloud computing. Most of our cloud investments to date have
    been in commercial pilots, private solution activity, and recently,
    DISA's cloud service. DISA published the first version of the DOD Cloud
    Computing Security Requirements Guide in January of this year. Prior to
    that, the DOD rule sets for cloud computing had not been established.
        We are currently developing guidance and standardized processes to
    assist our mission owners, and we expect our cloud adoption to
    accelerate in the coming months as FedRAMP and DISA authorize more
    commercial cloud offerings.
        Question. Provide short summaries of three recent IT program
    successes--projects that were delivered on time, within budget, and
    delivered the promised functionality and benefits to the end user. How
    does the Navy define ``success'' in IT program management? What ``best
    practices'' have emerged and been adopted from these recent IT program
    successes? What have proven to be the most significant barriers
    encountered to more common or frequent IT program successes?
        Answer. The Department of the Navy (DON) defines ``success'' in IT
    program management as delivering IT capability within cost, schedule
    and performance parameters to meet customer/war fighter requirements.
    Clarity, specificity and stability of requirements are critical.
    Because IT programs are enterprise in nature with multiple
    stakeholders, effective governance and communication with a broad
    concurrence on objectives are essential given that requirements can
    evolve as new technologies become available or cyber threats emerge.
    The governance structure can ensure appropriate trades between cost,
    schedule and performance can be accomplished as necessary.
        Three recent successful IT programs/initiatives include:
    1. Department of the Navy Enterprise Software Licensing (DON ESL):
        The Department of the Navy Enterprise Software Licensing (DON ESL)
    Program Office leads a joint Navy and Marine Corps strategic sourcing
    effort to consolidate, centralize and streamline the acquisition and
    management of DON ESL agreements and provide significant savings from
    previous years.
        In support of the Department of Defense Chief Information Officer
    (DOD CIO) IT consolidation roadmap and DON CIO IT efficiency efforts,
    the Marine Corps leverages the combined buying power of the Navy and
    Marine Corps to improve the DON's IT/cyberspace investment decision
    practices as well as enterprise-level evaluation, funding, management
    and tracking of current and future requirements for all enterprise-
    designated software vendors and products. Five agreements have been
    awarded to date with five more planned for award over the next 2 years.
        One best practice is to resource DON ESL agreements as enterprise
    requirements vice funding on an individual user basis; identifying and
    receiving the funds from individual sources has been a barrier to
    previous efforts.
    2. Next Generation Enterprise Network (NGEN):
        Naval Enterprise Networks (NEN) Program Office manages the
    acquisition life-cycle of the DON's enterprise-wide IT networks. NEN's
    portfolio includes the Next Generation Enterprise Network (NGEN)
    contract, which delivers shore-based IT networks and related services
    to the more than 700,000 users of the Navy Marine Corps Intranet
    (NMCI), the world's largest purpose built network. NGEN also provides
    the Department's path to the Joint Information Environment. Although
    faced with exorbitant challenges related to the intricacy of the
    network and the existing Contractor Owned and Contractor Operated
    network model, in September 2014 NEN completed a seamless transition of
    NMCI assets and users being supported by the NMCI Continuity of
    Services Contract to the new Government Owned and Contractor Operated
    environment acquired through the NGEN contract.
        The NGEN acquisition involved one of the most innovative,
    comprehensive, and complex Request for Proposals (RFP) ever written for
    an IT network. The 1,100-page RFP constituted a fundamental shift in
    business and service delivery model required that the government
    carefully de-compose and identify every element of the existing network
    into the underlying services, technologies, and processes utilized to
    acquire, manage, secure, and operationally support/maneuver the
    network. The NGEN contract award represented the first re-compete of
    the NMCI since its establishment 12 years prior, and will save DOD
    billions of dollars across the Future Years Defense Plan (FYDP), while
    improving operational IT capability.
        The innovative acquisition strategy, based on a Lowest Price
    Technically Acceptable approach that maximized industry competition,
    will not only achieve the Navy's operational and acquisition
    objectives, but it will also reduce the cost to operate the Navy's core
    IT network by over $1.3B across the FYDP--an incredible force
    multiplier in an era of declining budgets. Real savings generated
    through the NGEN contract can now be redirected to other DON
    priorities.
        NEN managed the seamless transition of all NMCI seats to the new
    NGEN contract on schedule (01 October 2014). The NGEN contract
    transition was a significant achievement in the evolution and delivery
    of the Navy and Marine Corps' enterprise network. The transition was
    completely transparent to end-users and occurred without disruption or
    loss of service. Through careful planning and solid teamwork between
    PMW 205, the Naval Network Warfare Command, and service providers, the
    team successfully transitioned all users to the NGEN contract 90 days
    ahead of schedule, which allowed the DON to realize an additional $60
    million in savings ($20 million per month).
    3. Consolidated Emergency Response System (CERS):
        Consolidated Emergency Response System (CERS) provides Marine Corps
    Installation Commanders an enterprise and integrated emergency dispatch
    center, supporting law enforcement, structural fire, and emergency
    medical resource coordination for day-to-day and emergency operations
    responding to All-Hazards incidents and civil mutual aid agreements.
    Marine Corps Systems Command and Marine Corps Installations Command
    established full E911 capability for all Marine Corps installations by
    end of 2014 (including overseas). This met DOD's E911 mandate following
    the Ft. Hood shooting incident of 2009 and was accomplished within the
    acquisition framework of a program funded in 2012. The post E911
    fielding strategy is to continue to build upon the E911 capability with
    Computer Aided Dispatch, improved Fire Station Alerting and other
    capabilities that add to force protection services aboard Marine Corps
    installations worldwide.
        The ``best practices'' that emerged and were adopted from this IT
    program success included efforts to aggressively guard against modified
    commercial-off-the-shelf (COTS) or custom implementation. The
    architecture was managed with tailored technical reviews that focused
    on the integration and non-developmental deployment of commercial
    components. This insures a complete specification defined by commercial
    practices and provides the most efficient means to sustain over the
    life of the program. Where COTS solutions are used, success is defined
    in terms of performance equivalent to local government solutions but
    capable of meeting DOD's higher Cyber Security and interoperability
    requirements at costs competitive with civilian implementations.
        The ``most significant barriers'' to IT program successes are tied
    to requirements. Lack of complete requirements and complete
    understanding of the requirements is a common occurrence so it is vital
    to have a tightly integrated team representing the developmental,
    requirements and customer perspectives on a project with a well-defined
    scope and objectives. Given requirements can evolve, it is key to
    develop good working relationships between the requirements, resource
    and acquisition communities so trades can be made between cost,
    schedule and performance as needed. In the case of E911 these
    relationships allowed the basic services to be provided with the
    expectation that incremental improvement to force protection
    capabilities will be made through supplemental fielding efforts.
        Question. Terry Halverson, the DOD Chief Information Officer (CIO),
    has outlined a vision for DOD use of cloud computing that empowers the
    military departments and components to procure their own cloud
    computing solutions. How will the implementation of this transition to
    cloud computing be rationalized across the Navy to ensure that common
    standards, data portability and other enterprise-wide issues are
    properly managed and addressed?
        Answer. The Department of the Navy's cloud transition is being led
    by the DON CIO, which is developing a data-centric cloud strategy that
    will be implemented and managed in accordance with DOD CIO guidelines.
    To ensure common standards and portability are properly addressed, the
    DON Data Center Consolidation Team will be realigned under the Program
    Executive Officer, Enterprise Information Systems (PEO-EIS), which has
    been given the primary role for executing the forthcoming Cloud
    Transition Plan. This re-alignment will enable better collaboration
    with the Navy Marine Corps Intranet (NMCI) and Consolidated Afloat
    Networks and Enterprise Services (CANES) program offices and take
    advantage of our existing enterprise network contracts and governance
    structures.
        Question. The desert ship at White Sands Missile Range is an
    important national asset. Can you please outline the tests that the
    Navy hopes to conduct during fiscal year 2015 and 2016 utilizing the
    Desert Ship and White Sands Missile range? Which R&D budget lines
    support these tests?
        Answer. The Desert Ship is a U.S. Navy asset located at White Sands
    Missile Range and operated by Naval Sea Systems Command (NAVSEA).
        The tests that will be conducted are as follows:
    Fiscal Year 2015
      --Guided Test Vehicle (GTV)-2 (November 2014) was a developmental
            test for the STANDARD Missile 6 BLK 1A program (completed).
      --Live Fire Test (LFT)-3 is a developmental test for the Naval
            Integrated Fire Control Counter Air (NIFC-CA) Project (June
            2015). Several tracking exercises are being conducted to
            prepare for LFT-3.
    Fiscal Year 2016
      --GTV-3 is a developmental test for the STANDARD Missile 6 BLK 1A
            program.
      --There is a LFT scheduled for September of 2016 for the NIFC-CA
            Project with several tracking exercises to prepare.
        Desert Ship is not an element of the Major Range and Test Facility
    Base (MRTFB) and therefore is not funded through MRTFB and Test
    Resource Management Center (TRMC). Desert Ship is funded by the
    programs and projects that use it for testing.
        The NIFC-CA Project is funded through Research Development Test and
    Evaluation (RDT&E) funding line PE 0604378N.
        The SM-6 BLK 1A program is funded through Navy RDT&E, funding
    details are classified.
        Question. What are the national security objectives that the Navy
    hopes to address in the tests outlined in the question above?
        Answer. Navy flight testing at the Desert Ship supports the air and
    maritime security national security objective. The Navy utilizes the
    Desert Ship to conduct risk reduction and early developmental live fire
    testing on a controlled range prior to live fire testing aboard U.S.
    Navy ships. The Navy also utilizes system test data to assess mission
    capabilities in an overland environment.
        Question. How does the Navy's future budget support the upkeep and
    modernization of the desert ship and does the Navy plan to use the
    Desert ship into the future?
        Answer. The Desert Ship is funded through the life of the NIFC-CA
    Project through PE 0604378N. Desert Ship is upgraded with the latest
    Aegis Combat System software load on an annual basis and will be
    modernized to accomplish ACB 16 testing to begin in fiscal year 2018.
        Question. How does the Desert ship's testing capabilities translate
    to use in the fleet, and what are some of the successes that the Navy
    can highlight for the subcommittee?
        Answer. The Desert Ship has been instrumental in performing risk
    reduction testing that led to fielding the NIFC-CA capability in fiscal
    year 2015. Past test events for the NIFC-CA project are as follows:
    Joint Land Attack Cruise Missile Defense Elevated Netted Sensor System
    (JLENS) Demonstration, LFT-1, and LFT-1A. The Desert Ship was also
    instrumental in the fielding of various STANDARD Missile variants by
    supporting early developmental flight testing; most recently SM-6 Block
    1. Successful live fire test events for the SM-6 Block 1 program
    included: GTV 1-3, CTV-1, FTR-25, FTR 27-27A and D1J. Early
    developmental testing of SM-6 Block 1A is currently in progress: GTV-1
    and GTV-2 have been successfully completed and GTV-3 is scheduled for
    fiscal year 2016.
                                     ______

                  Questions Submitted by Senator Brian Schatz
        Question. I appreciate the attention that the Navy is giving to our
    shipyards. Our shipyard workers are the backbone of the fleet and the
    investments we make in that workforce will pay dividends to our
    readiness by ensuring that we can cut down on the Navy's maintenance
    backlog, reduce downtime, and get our ships and subs back out on
    deployment.
        We can always do more to reduce the operating costs at our
    shipyards and make them more competitive. We can do this by finding
    creative ways to make use of cutting edge technologies to revolutionize
    their business operations, such as through 3D printing and other
    advanced manufacturing techniques, or by deploying renewable energy
    technologies that can cut their energy costs. I understand the Navy is
    already finding creative ways to reduce costs, including by using
    Energy Savings Performance Contracts at some of its shipyards.
        Can you describe what the Navy is doing in this year's budget to
    help improve the competitiveness of our shipyards, including by making
    use of renewable energy and other cutting edge technologies to reduce
    operating costs?
        Answer. The table below shows seven infrastructure investment
    projects at the Naval Shipyards that will improve energy efficiency by
    $12.6 million.

    ------------------------------------------------------------------------
                                                                   Cost
           Naval Shipyard                Project Title          (thousands)
    ------------------------------------------------------------------------
    Norfolk Naval Shipyard        Energy--Exterior Lighting            4,057
    Pearl Harbor Naval Shipyard   Shipyard Lighting Retrofit           2,876
     & Intermediate Maintenance
     Facility
    Portsmouth Naval Shipyard     Energy and Building                  1,332
                                   Repair, B74
    Portsmouth Naval Shipyard     Energy and Control                     572
                                   Upgrades B20
    Portsmouth Naval Shipyard     Variable Refrigerant Flow              804
                                   (VRF) Cooling System
                                   Communications Hub B13
    Portsmouth Naval Shipyard     Retrocommission Submarine            1,318
                                   Preplanning Facility, M1
    Portsmouth Naval Shipyard     Retrocommission Shipyard             1,722
                                   Command Center B86
        Total                     ..........................         $12,681
    ------------------------------------------------------------------------

        The Navy continues to investigate opportunities to pursue Energy
    Savings Performance Contracts at the Naval Shipyards to reduce energy
    use.
        Likewise, the Naval Shipyards use a variety of process-improvement
    programs and initiatives to identify and implement innovative
    technologies. This includes formal programs such as Navy's repair
    technology (REPTECH) and the Department of Defense's corrosion
    reduction and collaborative initiatives, such as Industrial Communities
    of Practice and Warfare Center Innovation support. New technologies
    play a critical role in maintaining a capable and competitive
    industrial base as well as improving employee quality of work life.
    Below are some examples of recent and ongoing technology initiatives
    focused on improving Naval Shipyard industrial capabilities.
    Exoskeleton Technology for Improved Industrial Ergonomics
        This initiative will expand the use of commercial off-the-shelf
    (COTS) exoskeleton arms and use exoskeleton suits to improve the
    ergonomics of Naval Shipyard industrial work. This technology helps to
    remove much of the weight and strain from the shipyard mechanic while
    performing strenuous work processes. This helps to reduce workplace
    injury and improve productivity.
    High Pressure Water Jet for Improved Surface Preparation
        This is a toolset developed and deployed to improve the coatings in
    ship tanks that have a history of coating failure. This technology
    saves money in the preparation of the tanks and greatly improves the
    life and performance of the coating.
    3D Scanning for Ship Checks
        This initiative uses 3D scanning technology to more effectively and
    efficiently perform pre-availability ship checks. Additionally, this
    initiative is pursing the use of 3D scanning technology to allow for
    prefabrication of piping systems before a ship arrives for drydock
    work.
    Additive Manufacturing for Training Mock-ups and Prototypes
        The Naval Shipyards are using Additive Manufacturing for rapid
    prototyping and fit checking of parts and tools. Additionally, Additive
    Manufactured parts are being used to perform training on components
    before the actual work commences. This technology is saving time
    through reduced rework and material waste.
    Electronic Technical Work Document (eTWD) Initiative
        This initiative makes information technology (IT) systems available
    to mechanics and supervisors at the deckplate and thus allows for
    increased efficiency. It will standardize forms, instructions, and
    processes across the enterprise and increase productivity by enabling
    the non-stop execution of work.
        Question. In my view, the Jones Act is essential to sustaining a
    robust U.S. flag fleet that can support our national defense. These
    U.S. flag vessels can be called on to support America's war fighters
    during wartime, serving as the Navy's auxiliary fleet to transport mail
    and other goods to troops in combat during times of war, allowing the
    Navy to save its limited cargo space for essential materials.
        Do you agree that the Jones Act is important to the national
    defense mission?
        Answer. The Jones Act is still relevant, important and supported by
    the Department of the Navy (DON). New construction of commercial ships
    in the U.S. benefits domestic shipbuilders and suppliers, and helps to
    maintain the Nation's shipbuilding industrial base. U.S. flag manning
    requirements under the Jones Act foster the demand for and safeguards a
    ready merchant marine force of qualified civilian mariners for
    contingencies. A strong domestic shipbuilding and repair industrial
    base helps maintain DON's ability to continue to build the future
    Fleet.
        The Defense Strategic Guidance and Quadrennial Defense Review
    clearly rely on maritime assets in the execution of the National
    Security Strategy. The military strategy of the United States relies on
    the use of commercial U.S. flag ships and crews and the availability of
    a shipyard industrial base to support national defense needs. The
    retention of a minimum core of shipbuilders and ship operators, and
    their skills and capabilities, ensures availability in times of
    emergency.
        The Jones Act supports the Nation's shipbuilding industrial base
    and maintains a national maritime infrastructure that ensures ample
    U.S. sealift capacity. U.S. flagged vessels provide employment to
    trained American Merchant Marine officers and seamen, who could be
    available to crew government-owned or civilian vessels in support of
    sealift efforts in times of war or national emergency. This
    availability limits the DON's need for procuring and maintaining
    comparable vessels in the government-owned fleet of cargo vessels,
    which could constitute a significant additional cost to the DON. The
    existence of a healthy U.S. maritime industry ensures the U.S. is not
    subjected to the dictates of foreign ship owners and operators, or
    foreign mariners when ships and mariners are needed to respond to
    contingencies such as disasters or in support of national security.
                                     ______

              Questions Submitted to Admiral Jonathan W. Greenert
                    Questions Submitted by Senator Roy Blunt
        Question. The fiscal year 2016 President budget proposes funding
    for only 100 Tomahawk Missiles, 96 short of the Minimum Sustaining
    Rate. Does the Navy agree that this results in an approximately 24
    month production gap prior to the start of recertification in 2019?
        Answer. The Navy does not agree. There is no production gap before
    beginning of the Tomahawk recertification program in fiscal year 2019.
    The Department of the Navy will procure 100 All-Up-Rounds (AUR) with
    appropriated fiscal year 2016 resources in combination with 47 AURs
    from fiscal year 2015 Overseas Contingency Operations (OCO) resources
    (replenishment of Tomahawk combat firings during Operation Inherent
    Resolve) and up to 18 AURs via replacement-in-kind from the sale of
    excess USN Tomahawk Torpedo Tube Launch (TTL) AURs to the United
    Kingdom for a total of up to 165 tactical AURs in fiscal year 2016. The
    final deliveries of these 165 AURs is anticipated near the end of the
    4th QTR of fiscal year 2018, and the Tomahawk Recertification program
    initiates in the 1st QTR of fiscal year 2019. Therefore, there is no
    production gap.
        Question. What new analysis did the Navy conduct to determine that
    a production gap in 2018-2019 is more manageable than a 3 year
    production gap?
        Answer. There is no production gap prior to the start of the
    Tomahawk Recertification program in the 1st QTR fiscal year 2019 since
    the last of the fiscal year 2016 All-Up Rounds (AURs) deliver in 4th
    QTR of fiscal year 2018. Helping to inform the overall programmatic and
    industrial base risks, the Defense Contract Management Agency conducted
    an independent Tomahawk Production Base Health Assessment. The results
    of the assessment confirm that the Navy's missile production and
    recertification program strategy has low to moderate risk. The
    production line, major spares procurements in support of
    recertification, modernization, non-recurring engineering, and the
    depot will maintain activity across the Tomahawk industrial base
    enabling a smooth transition from a production phase to a
    modernization/recertification/depot phase of the program.
        Question. The fiscal year 2011 NDAA required all military equipment
    using GPS purchased after fiscal year 2017 to be M-Code capable. The M-
    Code enables such devices to operate in a GPS jammed environment. As
    the Navy looks at the recertification of the Block IV Tomahawks, will
    the Navy take advantage of this opportunity that will push recertified
    Tomahawks through 2034? If not, when will the Navy seek to upgrade
    Tomahawks to M-Code requirements?
        Answer. The current Block IV Tomahawk has multiple navigation tools
    for precision navigation including GPS, terrain contour matching, and
    digital scene matching and correlation. Additionally we have high
    confidence in the fidelity of the Tomahawk GPS receiver in an anti-
    access/area denial environment. This information can be provided in a
    classified document if required. Threats are constantly evolving
    however, and we perform periodic assessments of our capability against
    those threats. Based on those assessments, the Navy may choose to
    incorporate an M-Code capable GPS receiver in Block IV Tomahawk at some
    point during the recertification depot process.
        Question. The Navy recently tested the potential of synthetic
    guidance capability on the Tomahawk Missile. What kind of implications
    were derived as a result of this test and does the Navy plan to pursue
    some sort of seeker enhancement capability for insertion in the
    Tomahawk?
        Answer. The synthetic guidance demonstration was an important
    initial step in understanding the viability of long-range
    communications for position updates of moving targets and extending the
    reach of Tomahawk beyond traditional fixed and re-locatable targets to
    maritime moving targets. This is consistent with our strategy to
    develop advanced capabilities by leveraging existing technologies.
        We are in the process of completing an Offensive Anti-Surface
    Warfare (OASuW) Analysis of Alternatives (AoA) update and completing a
    Capabilities Based Assessment for the Next Generation Land Attack
    Weapon. The results of these analyses, and technology demonstrations
    such as the Tomahawk synthetic guidance test firing, will help inform
    the Department of the Navy's cruise missile strategy and long-term
    path-forward, which will include evaluating the requirement for a
    seeker.
        Question. In the fiscal year 2015 President budget, the Navy
    commented that production of the JSOW C-1 was a focus because of low
    inventory. In fiscal year 2016, the Navy stated there was an adequate
    inventory of JSOW C and C-1s in inventory. Was the Navy able to make up
    the previous year's shortfall? If not, how do you justify the change in
    numbers?
        Answer. Response is classified and will be provided via separate
    means.
        Question. Previously, the Navy had planned to pause production of
    the JSOW, rather than terminate. Did the Nunn-McCurdy statute
    contribute to the termination of JSOW by OSD? Does the termination
    affect international orders or the fiscal year 2015 award in any way?
        Answer. The Navy's plan to pause JSOW production in fiscal year
    2017-2019 was due to higher Department priorities under the current
    fiscal environment. The fiscal year 2016 President's budget request was
    informed by the results of the fiscal year 2015 and fiscal year 2016
    Naval Munitions Requirements Process (NMRP) which resulted in a reduced
    JSOW weapon inventory requirement and subsequent reduction in
    procurement.
        The Nunn-McCurdy statute did not contribute to the termination of
    JSOW.
        The production termination has not resulted in a negative effect on
    international orders or the fiscal year 2015 contract award. The
    decision has not affected current FMS Letters of Agreement (LOA) or the
    Department's plan to transition to sustainment after the completion of
    JSOW C-1 Operational Test and fiscal year 2015 procurement.
        Question. Operational testing for the JSOW C-1 and Joint Strike
    Fighter is planned for this year. How does the Navy intend to support
    future requirements for the Net Enabled Capabilities critical for JSOW
    use without a funded program?
        Answer. JSOW C-1's Operational Testing (OT) will occur this year on
    the threshold platform, the F/A-18E/F Super Hornet. The Joint Strike
    Fighter is an objective platform and will integrate JSOW in accordance
    with the JSF weapons roadmap.
        Net enabled capabilities will not diminish due to reduced JSOW
    procurement. Termination of procurement does not mean the JSOW program
    is unfunded. The program is funded for sustainment and JSOW will be the
    first Net Enabled Weapon (NEW). The Fleet's net enabled capabilities
    are supported with the integration of numerous weapon systems,
    including JSOW, Small Diameter Bomb II, and Harpoon II+.
        Question. Provide results of the Future Electronic Warfare
    Requirement study.
        Answer. The Navy is conducting a study titled, ``Joint Requirements
    for E/A-18G and Information Operations,'' which will be complete in
    April 2015. A previous study titled, ``CVW E/A-18G Squadron Size,''
    determined the Navy-only Growler requirements. The current study will
    identify Joint force E/A-18G missions and determine additional future
    Joint force missions for the E/A-18G. Each mission will be analyzed to
    determine the minimum and optimum number of E/A-18Gs required. The
    study will also assess the effect of Information Operations on the
    Joint fight and determine how these effects influence overall force
    structure in the context of both Navy and Joint force missions. Once
    complete, the study will be available for release.
                                     ______

                   Question Submitted by Senator Steve Daines
        Question. In 2010 the Administration announced a plan to refocus
    American attention to East Asia, in what would come to be known as the
    Asia Pivot. How has the Navy adjusted its strategy to execute this
    pivot, and how have nations in the region responded to these changes?
        Answer. The rebalance to the Asia-Pacific was one of the drivers
    for the Navy's recently-released A Cooperative Strategy for 21st
    Century Seapower: Forward, Engaged, Ready. This strategy continues the
    Navy's effort to rebalance to the Asia-Pacific, and it broadens the
    aperture of our approach to encompass the Indian Ocean in recognition
    of its strategic relevance to this region. The combination of the
    region's economic importance to the world economy, its proximity to
    U.S. security interests, and its expansive maritime geography compel an
    increased U.S. naval presence to enhance regional stability and
    maintain our commitments to our allies and partners.
        By 2020, Navy will deploy more forces to the Asia-Pacific
    (increasing ship presence from 52 ships today to about 65 ships) with
    plans to base approximately 60 percent of its ships and aircraft in the
    region. In support of the rebalance, we will also field new
    capabilities focused on regional challenges and preferentially deploy
    our most advanced warfighting platforms to the region. These include
    forward deploying an additional SSN to Guam, the most capable DDG and
    an additional CG to Japan, Mobile Landing Platform (MLP), Joint High
    Speed Vessel (JHSV), both Littoral Combat Ship (LCS) variants, MQ-8C,
    P-8A, EA-18G, upgraded F/A-18E/F, and E-2D. MQ-4C Triton high endurance
    unmanned aerial vehicles will operate from Guam in 2017.
        The Navy will enhance and strengthen partnerships through exercises
    and training opportunities that build partner capacity and capability.
    Additionally, the Navy will develop its intellectual capital to sharpen
    our focus on warfighting missions that are most important in the
    region, and to emphasize the unique geopolitical and cultural
    understanding required.
        These efforts, many of which preceded the recent release of the new
    Navy strategy, have helped strengthen cooperation with long-standing
    allies and continue to cultivate partnerships in the Indo-Asia-Pacific
    to reduce the potential for misunderstanding and discourage aggression.
    A recent example, the U.S. Navy joined over 20 Pacific navies--
    including the Chinese--in signing the Code for Unplanned Encounters at
    Sea (CUES). To improve our warfighting capability and enhance
    partnerships, capacity, and interoperability with our allies and
    partners in the Asia-Pacific, we host the biennial Rim of the Pacific
    (RIMPAC) exercise, which is the largest multinational maritime exercise
    in the world. RIMPAC 2014 included participation from 22 nations, 49
    surface ships, six submarines, and over 200 aircraft and 25,000
    personnel. For the first time, China was among the participants.
    Exercises like RIMPAC enhance the global network of navies and allow us
    to build mutual understanding and practice how we fight with our allies
    and partners, so that we are better prepared to win should conflict
    arise.
        Many of the partnership and capacity building activities outlined
    in the new strategy have been ongoing for years. While we cannot make
    direct links between these activities and specific actions of our
    partner nations in the region, there have been several increases in
    Asia-Pacific regional rhetoric challenging China's growing military
    strength and recent maritime sovereignty claims. The Philippines,
    Vietnam, and Indonesia have each reiterated their disagreement with
    China's maritime sovereignty claims. In 2014, the Philippines and
    United States signed the Enhanced Defense Cooperation Agreement (EDCA)
    for an initial term of 10 years. During this period, U.S. forces will
    be authorized access to agreed upon locations in the Philippines on a
    rotational basis to undertake security cooperation exercises; joint and
    combined training activities; humanitarian assistance and disaster
    relief activities. The EDCA also grants the U.S. operational control of
    agreed upon Philippines' locations for the purpose of altering,
    improving or constructing facilities. Malaysia recently offered to have
    U.S. Navy P-8 Poseidon aircraft fly out of East Malaysia, providing
    greater access to the South China Sea. Taiwan has continued to push
    developments of a new Corvette ship class and has openly discussed the
    possibility of indigenously producing new submarines. South Korea has
    continued development of JeJu Island as a primary naval base, and the
    Japanese government recently announced its intention to reassess its
    policies regarding collective self-defense, which would allow it to
    more fully participate in regional security. The Navy strategy's
    emphasis on the global network of navies concept, coupled with the
    current regional tensions between China and other Pacific states, will
    likely generate increased regional interest in future partnership and
    capacity building activities.
                                     ______

                   Question Submitted by Senator Patty Murray
        Question. The President's budget request for fiscal year 2016
    budget indicates an increase in the number of P-8A anti-submarine
    warfare aircraft that the Navy wants to procure. I'm pleased to see
    that the Navy is investing in this capability after a cut in last
    year's budget request.
        Can you tell the subcommittee why it is so important to purchase
    the P-8As at the suggested rate this year?
        Answer. The request for sixteen P-8A aircraft in the President's
    budget request for fiscal year 2016 returns the Navy's P-3C to P-8A
    transition plan to the optimal procurement profile required to complete
    the transition in the minimal amount of time, cost and warfighting
    risk.
        The P-8A transition plan is based on a steady procurement profile
    of 16 aircraft per year in fiscal year 2014, 2015 and 2016. Buying
    aircraft at this rate enables the government to gain significant
    savings in per unit cost pricing under the Full Rate Production (FRP)
    schedule. It prevents future transition and warfighting gaps and
    returns the fleet to planned fatigue life utilization rates. This
    request also enables the prime contractor and its sub-contractors to
    execute and maintain steady state production schedules and other
    manufacturing efficiencies.
                                     ______

                    Questions Submitted by Senator Jack Reed
        Question. Can you describe the importance of the Virginia Payload
    Module program to ensuring our undersea strike capability?
        Answer. 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, creates ambiguity, and fosters uncertainty. However,
    retirement of the SSGNs beginning in 2026 reduces undersea strike
    capacity by 60 percent. Virginia Payload Module (VPM) will enable
    Virginia-class SSNs to cost effectively mitigate the loss of SSGN
    strike capacity, thus ensuring the Navy maintains required clandestine
    strike capacity. VPM more than triples the Tomahawk Land Attack Missile
    (TLAM) strike capacity of an SSN from the current 12 missiles to 40
    missiles.
        Question. Why is it so critical to get the Virginia Payload Module
    program into construction for the Virginia-class Block V submarines? If
    there are further reductions in funding, how would that impact the
    timeline to get this capability fielded?
        Answer. Retirement of the SSGNs beginning in 2026 reduces undersea
    strike capacity by 60 percent. Integrating the Virginia Payload Module
    (VPM) within the Virginia-class SSNs is the most cost-effective means
    to minimize the loss of SSGN strike capacity. VPM will more than triple
    the Tomahawk Land Attack Missile (TLAM) Block IV strike capacity of a
    Virginia-class SSN from 12 to 40 missiles. Starting construction of VPM
    capable submarines in 2019 as part of Block V still results in a
    significant reduction in capacity by up to 50 percent until the full
    program of up to 20 VPMs are constructed. Any reductions in funding
    adds risk to completing the design to support an efficient construction
    start, potentially resulting in construction delays or delayed
    integration of VPM into the first Virginia-class Block V in fiscal year
    2019.
        Question. I understand the Navy is beginning to consider the
    feasibility of introducing the Virginia Payload Module program into the
    last hulls of Block IV. What is the reason for this and would it take
    additional funding in fiscal year 2016 to do so? What would the Navy
    and contractor team need to do to ensure that accelerating the Virginia
    Payload Module program installation could be accomplished without
    increased risk to cost and schedule of the overall program?
        Answer. The Navy and its Virginia Payload Module (VPM) Design
    Agent, General Dynamics Electric Boat (GDEB), 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
    Virginia Class Submarine (VCS) Block IV fixed price incentive fee
    multi-year procurement contract.
        The assessment is ongoing and is expected to conclude by Summer
    2015.
                                     ______

                    Questions Submitted by Senator Tom Udall
        Question. What is the average time that ships are rotated in and
    out of deployment, and can you provide a breakdown by class of ship and
    homeport?
        Answer. The Navy's service goal is a 1:2 operational deployment
    length to dwell ratio for all active duty units. For example, if a ship
    is deployed for 180 days the goal is to have them in a non-deployed
    status for a minimum of 360 days before their next deployment. The
    fiscal year-2014-2016 fleet dwell average is 1:3.
        Fiscal year 2014-2016 approximate dwell ratios and average
    deployment length by class:

    ------------------------------------------------------------------------
                                                                  Deployment
                                                         Dwell      length
    ------------------------------------------------------------------------
    Aircraft Carriers (CVN):.........................        1:4           8
    Amphibious Assault Ships (LHA/D):................        1:3           7
    Cruiser Destroyer (CRUDES):......................        1:3           7
    Ballistic Missile Defense Capable CRUDES:........        1:3           8
    Fast Attack Submariners (SSN):...................        1:3           6
    ------------------------------------------------------------------------

        We do not track dwell separately by homeport.
        Through the Optimized Fleet Response Plan (OFRP), the Navy will be
    able to achieve a 7-month deployment goal which improves readiness and
    leads to a predictable cycle for maintaining, training and deploying
    our carrier strike groups and amphibious ships.
        Question. How have increased demands on the Navy impacted readiness
    among sailors, and how are these demands impacting the Navy's operation
    and maintenance of ships?
        Answer. Since 2013, many CSGs, ARGs, and destroyers have been on
    deployment for 8-10 months or longer. This comes at a cost to the
    resiliency of our people, sustainability of our equipment, and service
    lives of our ships. Year after year, the Navy has consistently provided
    more global presence than authorized and adjudicated by the GFMAP. This
    unbudgeted usage amounted to greater than 2,200 days in theater over
    that planned in 2013 and greater than 1,800 days in theater over that
    planned in 2014. We must operate the Fleet at sustainable presence
    levels in order for the Navy to meet requirements while still
    maintaining material readiness, giving ships time to modernize, and
    allowing them to reach their expected service lives.
        The pace of operations has resulted in reduced time at home for
    Sailors and a lack of predictability in their family lives. Navy is
    addressing these challenges by transitioning to an Optimized Fleet
    Response Plan, which will enable the delivery of a more predictable FRP
    cycle, stabilized manning, more stable and predictable maintenance
    plan, enhanced quality of life, and fully ready forces trained to a
    single standard. Navy recruiting and retention remain strong, although
    retaining personnel in certain critical skills continues to present a
    challenge, particularly as the demands we place on Sailors and their
    Families remain high. The threat of looming sequestration, along with a
    recovering economy, is a troubling combination. We are beginning to see
    downward trends in retention, particularly among pilots, nuclear-
    trained officers, SEALs, and highly-skilled Sailors in information
    technology, Aegis radar and nuclear specialties. We are using all tools
    at our disposal, including special and incentive pays, to motivate
    continued service in these critical fields.
        Assuming a stable budget and no major contingencies for the
    foreseeable future, the Navy estimates it is possible to recover from
    the maintenance backlogs that have accumulated from the high
    operational tempo over the last decade of war and the additional
    effects of sequestration by approximately 2018 for CSGs and
    approximately 2020 for ARGs, 5 plus years after the first round of
    sequestration.
        Question. Are there classes of ships deferring maintenance more
    than others, and does this deferred maintenance potentially impact the
    safety of our sailors and their ability to carry out their missions?
        Answer. The safety of our Sailors and ability to carry out assigned
    missions have always been prioritized, and we have made difficult
    decisions regarding deferral of life cycle maintenance. PB-16 with OCO
    fully funds the ship maintenance requirement, including life cycle
    maintenance reset of CVNs and surface force ships. With the maintenance
    requirement fully funded, no new maintenance deferrals are expected.
    However, a return to BCA-level funding would undermine our ability to
    complete all of the needed maintenance.
        The life cycle maintenance reset requirement is a result of the
    backlog created during the late 1990s through 2009 which was a result
    of high Operational Tempo (OPTEMPO) after 9/11 and a focus on near-term
    readiness. Most of that backlog was developed on Cruiser/Destroyer
    (CRUDES) and amphibious ships, with a smaller amount on aircraft
    carriers. As a result, Navy is focusing reset efforts on CG-47, DDG-51,
    LSD-41/49, LHD-1/8, and CVN-68 classes.
        Additionally, the sequestration reductions in fiscal year 2013 and
    continuing resolutions (which compelled us to reduce both afloat and
    ashore operations) further exacerbated ship and aircraft maintenance
    and training backlogs. While the Navy was able to reprioritize within
    available resources to continue to operate in fiscal year 2013, this is
    not a sustainable course for future budgets. The actions we took in
    2013 to mitigate sequestration only served to transfer bills amounting
    to over $2 billion to future years for many procurement programs--those
    carryover bills were addressed in Navy's fiscal year 2014 and fiscal
    year 2015 budgets.
        Assuming a stable budget and no major contingencies for the
    foreseeable future, the Navy estimates it is possible to recover from
    the maintenance backlogs that have accumulated from the high
    operational tempo over the last decade of war and the additional
    effects of sequestration by approximately 2018 for CSGs and
    approximately 2020 for ARGs, 5 plus years after the first round of
    sequestration.
        Question. Are there classes of ships deferring maintenance more
    than others, and does this deferred maintenance potentially impact the
    safety of our sailors and their ability to carry out their missions?
        Answer. The safety of our Sailors and ability to carry out assigned
    missions have always been prioritized, and we have made difficult
    decisions regarding deferral of life cycle maintenance. PB-16 with OCO
    fully funds the ship maintenance requirement, including life cycle
    maintenance reset of CVNs and surface force ships. With the maintenance
    requirement fully funded, no new maintenance deferrals are expected.
    However, a return to BCA-level funding would undermine our ability to
    complete all of the needed maintenance.
        The life cycle maintenance reset requirement is a result of the
    backlog created during the late 1990s through 2009 which was a result
    of high Operational Tempo (OPTEMPO) after 9/11 and a focus on near-term
    readiness. Most of that backlog was developed on Cruiser/Destroyer
    (CRUDES) and amphibious ships, with a smaller amount on aircraft
    carriers. As a result, Navy is focusing reset efforts on CG-47, DDG-51,
    LSD-41/49, LHD-1/8, and CVN-68 classes.
        Additionally, the sequestration reductions in fiscal year 2013 and
    continuing resolutions (which compelled us to reduce both afloat and
    ashore operations) further exacerbated ship and aircraft maintenance
    and training backlogs. While the Navy was able to reprioritize within
    available resources to continue to operate in fiscal year 2013, this is
    not a sustainable course for future budgets. The actions we took in
    2013 to mitigate sequestration only served to transfer bills amounting
    to over $2 billion to future years for many procurement programs--those
    carryover bills were addressed in Navy's fiscal year 2014 and fiscal
    year 2015 budgets.
        Assuming a stable budget and no major contingencies for the
    foreseeable future, the Navy estimates it is possible to recover from
    the maintenance backlogs that have accumulated from the high
    operational tempo over the last decade of war and the additional
    effects of sequestration by approximately 2018 for CSGs and
    approximately 2020 for ARGs, 5 plus years after the first round of
    sequestration.
                                     ______

                  Questions Submitted by Senator Brian Schatz
        Question. The Navy's Strategic Laydown and Dispersal (SLD) plan for
    2015 proposes to homeport shift two Cruisers from Pearl Harbor to San
    Diego for their modernization. However, the Navy does not plan to
    homeport shift two Destroyers to Pearl Harbor to backfill these
    Cruisers, per the SLD plan for 2014 that was briefed to my office.
        These decisions have strategic consequences. The loss of these
    Cruisers without the replacement Destroyers erodes ballistic missile
    defense (BMD) capability in theatre. It is my understanding these
    decisions are not driven by Combatant Command requirements, but are
    part of the Chief of Naval Operations' plan to level-load the fleet to
    reduce the deployment time for sailors.
        Pacific Command has raised concerns that due to budget cuts the
    services have not been able to provide adequate maritime coverage of
    the type we have traditionally needed in the Asia Pacific and that we
    are assuming risks in the theatre.
        Do you believe that realigning Destroyers to reduce deployment time
    for sailors is strategically the right decision considering that it
    would mean reduced maritime coverage in important theatres, like the
    Asia Pacific?
        Answer. The Navy is putting its most capable, technologically
    advanced and mission ready forces forward. There will not be a
    reduction in maritime coverage in the Asia-Pacific; in fact, the Navy
    is on track to meet its goal of basing 60 percent of the fleet in the
    Asia-Pacific region by fiscal year 2020. In support of the Optimized
    Fleet Response Plan (OFRP), the Navy decided not to backfill the
    Hawaii-based Cruisers with destroyers (DDG) in order to support the
    alignment of training, maintenance, and operations for Carrier Strike
    Group synergy. The Strategic Laydown and Dispersal process will
    continue to evaluate future force laydown based upon Fleet and
    Combatant Commander requirements.
        Question. Are there other ways to meet your goals for sailor
    deployment and dwell time without reducing surface ship presence in the
    Asia-Pacific region?
        Answer. The Navy is not reducing surface ship presence in the Asia-
    Pacific region. Navy's Optimized Fleet Response plan is the program of
    record, and its efficacy in meeting desired end states of
    predictability in operations and maintenance will enhance readiness and
    surge capability to meet area of responsibility demands.
        Question. What risks are we assuming by having two fewer BMD-
    capable ships forward in the Asia Pacific? In your judgment, are these
    acceptable risks given the instability in the region and the potential
    anti-access/area denial scenarios that the Navy is concerned with?
        Answer. The Navy is increasing the numbers and capability of our
    Ballistic Missile Defense (BMD) forces in the Asia-Pacific. Pearl
    Harbor experienced a one for one swap of USS Lake Erie (CG 70) and USS
    John Paul Jones (DDG 53), as the Navy's BMD test ship in fiscal year
    2014. With the modernization of USS Port Royal (CG 73), Pearl Harbor
    will experience a net loss of one BMD ship, as USS Chosin (CG 65) is
    not BMD equipped. In the Forward Deployed Naval Forces (FDNF) Japan,
    there are five BMD ships assigned now (1 CG and 4 DDGs) and we will
    increase this capability with three additional BMD capable DDGs over
    the FYDP--for a net gain in BMD capability in the Asia-Pacific.
                                     ______

              Question Submitted to General Joseph F. Dunford, Jr.
                   Question Submitted by Senator Steve Daines
        Question. What programs does the Marine Corps have in place, or
    plan on implementing in the future, that lighten and strengthen small-,
    medium-, and large-caliber platforms?
        Answer. The Marine Corps continuously evaluates and improves the
    small arms capabilities that the individual Marine and units carry into
    combat to ensure that they are outfitted with the most reliable and
    relevant weapons systems available. Our small arms modernization
    strategy reflects a cost-conscious incremental approach to improve
    small arms accuracy, lethality, ergonomics and weight reduction in the
    near term, while looking to make larger gains in the same areas through
    pursuit of a next generation capability over the coming decade. The
    desired end state is improved lethality while maintaining, and ideally
    improving, the mobility of the individual Marine and, by extension, the
    Marine Rifle Squad and larger units. The Army is taking a similar
    approach, and the requirements and acquisition communities in both
    Services are sharing their ideas and continue to seek to collaborate
    where requirements and execution profiles coincide.
        The following initiatives were begun in accordance with the above
    intent:
      --Improved 60mm and 81mm mortar systems that utilize an improved
            alloy (Inconel), resulting in in stronger barrels at much less
            weight, as well as lightweight bipods and baseplates through
            replacing steel with aluminum alloys. Weight savings for the
            60mm mortar system is 9 lbs (20 percent reduction); weight
            savings for the 81mm mortar system is 17 lbs (19 percent
            reduction). The 60mm system was fielded in fiscal year 2013,
            and the 81mm system will begin fielding by early fiscal year
            2016.
      --Lightweight light/medium machinegun tripod that when fielded in
            fiscal year 2017 will provide a weight savings of 3.5 lbs (19
            percent reduction).
      --Pursuit of a shorter, lighter, and stronger barrel for light and
            medium machineguns that not only reduces weight of a single
            barrel, but precludes the need to carry an additional, spare
            barrel.
      --Participation in the Army-led Modular Handgun System Program to
            provide the Warfighter a best value Modular Handgun System that
            features increased accuracy, improved ergonomics, and a higher
            degree of reliability/durability over legacy systems. The
            Marine Corps is participating to ensure the solution satisfies
            an anticipated follow-on life cycle decision to replace our
            current service pistols in the early 2020s.
      --Participation on the Army-led effort to develop requirements for
            the next generation of squad weapons. Envisioned are an
            individual carbine, an automatic rifle, and a designated
            marksman weapon for the squad that utilize a systems approach
            to incorporate such future capabilities as fire control,
            integrated data and power, signature suppression, and an
            improved ammunition configuration. The goal is to field
            materiel solutions to these requirements in the mid to late
            2020s.
        Participation in the Small Arms Ammunition Configuration Study
    being conducted by the Army; this study will provide courses of action
    for ammunition configurations that will meet our small arms gaps in
    conjunction with the next generation of squad weapons.

                              SUBCOMMITTEE RECESS

        Senator Cochran. The Defense Subcommittee will reconvene on
    Wednesday, March 11, at 10:30 a.m., and receive testimony from
    the United States Army.
        The subcommittee stands in recess.
        [Whereupon, at 11:34 a.m., March 4, the subcommittee was
    recessed, to reconvene at 10:30 a.m., Wednesday, March 11.]