[Senate Hearing 115-857]
[From the U.S. Government Publishing Office]


                                                       S. Hrg. 115-857

                       NAVY SHIPBUILDING PROGRAMS

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

                                HEARING
                                
			       BEFORE THE

                        SUBCOMMITTEE ON SEAPOWER
                        
                                  OF THE

                      COMMITTEE ON ARMED SERVICES
                          UNITED STATES SENATE

                     ONE HUNDRED FIFTEENTH CONGRESS

                             SECOND SESSION

                               __________

                           NOVEMBER 27, 2018

                               __________

         Printed for the use of the Committee on Armed Services
         
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                 Available via: http://www.govinfo.gov

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                    U.S. GOVERNMENT PUBLISHING OFFICE                    
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                      COMMITTEE ON ARMED SERVICES
                      
                      
  JAMES M. INHOFE, Oklahoma, Chairman	JACK REED, Rhode Island
ROGER F. WICKER, Mississippi		BILL NELSON, Florida
DEB FISCHER, Nebraska			CLAIRE McCASKILL, Missouri
TOM COTTON, Arkansas			JEANNE SHAHEEN, New Hampshire
MIKE ROUNDS, South Dakota		KIRSTEN E. GILLIBRAND, New York
JONI ERNST, Iowa			RICHARD BLUMENTHAL, Connecticut
THOM TILLIS, North Carolina		JOE DONNELLY, Indiana
DAN SULLIVAN, Alaska			MAZIE K. HIRONO, Hawaii
DAVID PERDUE, Georgia			TIM KAINE, Virginia
TED CRUZ, Texas				ANGUS S. KING, JR., Maine
LINDSEY GRAHAM, South Carolina		MARTIN HEINRICH, New Mexico
BEN SASSE, Nebraska			ELIZABETH WARREN, Massachusetts
TIM SCOTT, South Carolina             	GARY C. PETERS, Michigan
JON KYL, Arizona
                                     
                                 
                                     
               John Bonsell, Staff Director
            Elizabeth L. King, Minority Staff Director
                      
 ________________________________________________________________

                        Subcommittee on Seapower

  ROGER F. WICKER, Mississippi, 	MAZIE K. HIRONO, Hawaii
             Chairman			JEANNE SHAHEEN, New Hampshire
TOM COTTON, Arkansas			RICHARD BLUMENTHAL, Connecticut
MIKE ROUNDS, South Dakota		TIM KAINE, Virginia
THOM TILLIS, North Carolina		ANGUS S. KING, JR., Maine
TIM SCOTT, South Carolina
JON KYL, Arizona                     
                                    

                                  (ii)

 
                         C O N T E N T S

_________________________________________________________________

                           November 27, 2018

                                                                   Page

Navy Shipbuilding Programs.......................................     1

Geurts, The Honorable James F., Assistant Secretary of the Navy       2
  for Research, Development, and Acquisition; Accompanied by Vice 
  Admiral William R. Merz, USN, Deputy Chief of Naval Operations 
  for Warfare Systems (OPNAV N9); Lieutenant General David H. 
  Berger, USMC, Commanding General, Marine Corps Combat 
  Development Command and Deputy Commander for Combat Development 
  and Integration.

Questions for the Record.........................................    37


                                 (iii)


 
                       NAVY SHIPBUILDING PROGRAMS

                              ----------                              


                       TUESDAY, NOVEMBER 27, 2018

                      United States Senate,
                          Subcommittee on Seapower,
                               Committee on Armed Services,
                                                    Washington, DC.
    The Subcommittee met, pursuant to notice, at 2:31 p.m. in 
Room SR-220, Russell Senate Office Building, Senator Roger F. 
Wicker (Chairman of the Subcommittee) presiding.
    Subcommittee Members present: Senators Wicker, Rounds, 
Shaheen, Blumenthal, Kaine, and King.

          OPENING STATEMENT OF SENATOR ROGER F. WICKER

    Senator Wicker. The hearing will come to order. Ranking 
Member Senator Hirono is in a markup and will be joining us as 
soon as she can.
    By agreement, we are going to skip opening statements of 
the chair and Ranking Member until such time as Senator Hirono 
arrives. And--but we will welcome our three distinguished 
panelists today--Honorable James F. Geurts, Assistant Secretary 
of the Navy for Research, Development, and Acquisition; Vice 
Admiral William R. Merz, Deputy Chief of Naval Operations for 
Warfare Systems; and Lieutenant General David H. Berger, Deputy 
Commandant of the Marine Corps for Combat Development and 
Integration.
    So, gentlemen, I understand you have drawn straws, and one 
of you gets to make an opening statement. Is that correct?
    Secretary Geurts. Yes, sir.
    Senator Wicker. All right. Well, we will let you proceed, 
and then we will take questions on a 5-minute basis. When my 
distinguished Ranking Member arrives, we may interject some 
opening statements for the record. You are recognized, Mr. 
Secretary.
    Secretary Geurts. Thank you, sir.

STATEMENT OF THE HONORABLE JAMES F. GEURTS, ASSISTANT SECRETARY 
    OF THE NAVY FOR RESEARCH, DEVELOPMENT, AND ACQUISITION; 
ACCOMPANIED BY VICE ADMIRAL WILLIAM R. MERZ, USN, DEPUTY CHIEF 
OF NAVAL OPERATIONS FOR WARFARE SYSTEMS (OPNAV N9); LIEUTENANT 
GENERAL DAVID H. BERGER, USMC, COMMANDING GENERAL, MARINE CORPS 
  COMBAT DEVELOPMENT COMMAND AND DEPUTY COMMANDER FOR COMBAT 
                  DEVELOPMENT AND INTEGRATION

    Chairman Wicker, Ranking Member Hirono, and distinguished 
Members of the Subcommittee, thanks for the opportunity to 
appear before you here today to update you on the Department of 
the Navy shipbuilding plan. I am joined today with Admiral Bill 
Merz, Deputy Chief of Naval Operations for Warfare Systems, and 
Lieutenant General Dave Berger, Deputy Commandant for Combat 
Systems Development and Integration.
    With your permission, I would like to provide a few brief 
remarks for the three of us and then submit our formal 
statement for the record.
    Senator Wicker. Okay, proceed.
    Secretary Geurts. We would like to first thank Congress for 
the timely enactment of the Fiscal Year 2019 DOD budget. On-
time enactment of the authorization and appropriation for 
fiscal year 2019 without a continuing resolution provides the 
predictability and stability in funding that is critical as we 
build the Navy the Nation needs in support of the National 
Defense Strategy.
    Timely passage of this budget has enabled us to accelerate 
contract awards, increase our acquisition efficiency, and 
deliver for our sailors and Marines. Additionally, your 
continuing support of our maritime accelerated acquisition 
programs has provided much-needed agility within the budget 
cycle. Through day-to-day interactions with the committees, we 
are able to quickly pursue near-term capability gaps against 
emerging threats.
    The strategic environment continues to be more dynamic, 
increasing in its uncertainty and sophistication. The 
proliferation of modern technologies, along with the erosion of 
the competitive advantage in areas where we have long enjoyed 
relative superiority, contest our ability to influence and 
create a great range of challenges for a globally responsive 
force. In order to retain and expand our competitive advantage, 
it is imperative we continuously adapt to the emerging security 
environment and do so with a sense of urgency. This requires 
the right balance of readiness, capability, and capacity, as 
well as budget stability and predictability. It requires a Navy 
of at least 355 ships.
    The Navy's 3-year shipbuilding plan for fiscal year 2019 
provides the framework to achieve this 355-ship Navy at a 
steady, sustainable, and affordable rate. Our current plan puts 
the Navy on path to 327 ships by fiscal year 2023 and 355 ships 
by 2034. Executing this plan relies on sufficient and stable 
funding. It also requires we continue to work to improve our--
and reform our business processes, as well as ensure we 
maintain a robust industrial base.
    Our shipbuilding industrial base and supporting vendor base 
continues to be a unique national security imperative that must 
be properly managed and protected. We value our partnership 
with Congress, and together, we can ensure that our Navy and 
Marine Corp teams operating around the world continue to 
provide effective deterrents as instruments of peace or, if 
necessary, to deliver superior naval power to protect those who 
are threatened.
    We thank you for the strong support the Subcommittee has 
always provided the Department of the Navy and the opportunity 
to appear before you today. We look forward to answering your 
questions.
    [The joint prepared statement of Secretary Geurts, Vice 
Admiral Merz, and Lieutenant General Berger follows:]

Joint Statement of The Honorable James F. Geurts, Vice Admiral William 
            R. Merz, and Lieutenant General David H. Berger
    Chairman Wicker, Ranking Member Hirono, and distinguished Members 
of the Subcommittee, thank you for the opportunity to appear before you 
today to update you on the Department of Navy's plan to achieve a 355-
ship Navy. First we would like to thank Congress for your support for 
timely enactment of the fiscal year (FY) 2019 Department of Defense 
(DOD) budget. Enactment of the authorization and appropriation for 
fiscal year 2019 helps provide the predictability and stability in 
funding that is critical to our success and will support building the 
Navy the Nation Needs (NNN), generating lethal and resilient maritime 
forces to support the National Defense Strategy (NDS).
    The strategic environment continues to be more and more dynamic, 
increasing in its uncertainty and sophistication. The proliferation of 
modern technologies, conventional weapons, and cyber capabilities to a 
broader range of state and non-state entities, along with the erosion 
of our competitive advantage in areas where we have long enjoyed 
relative superiority, is likely to continue as rival states attempt to 
contest our influence and create a range of challenges for a globally 
responsive force.
    As described in the 2018 National Security Strategy and the 2018 
NDS, in order to retain and expand our competitive advantage, it is 
imperative that we continuously adapt to the emerging security 
environment--and do so with a sense of urgency. This requires the right 
balance of readiness, capability, and capacity, as well as budget 
stability and predictability. It also requires we continue to work to 
improve and reform our business processes, as well as ensure we 
maintain a robust industrial base. Together, we can ensure our 
military's capability, capacity, and readiness can continue to deliver 
superior naval power around the world, both today and tomorrow.
                          355 ship requirement
    The Annual Long-Range Plan for Construction of Naval Vessels for 
Fiscal Year 2019 prioritizes the framework for building towards the NNN 
objective of 355 ships at a steady, sustainable, and affordable rate. 
Fiscal year 2019 procurement and Service Life Extensions (SLE) puts the 
Navy on a path to 327 ships by fiscal year 2023 and 355 ships in the 
2030s. The types of ships and capabilities procured over this 30-year 
timespan will evolve with technology and threat advancements. 
Protecting the baseline acquisition profiles provides long-term 
foundational stability for thoughtful, agile modernization, and a 
clearer forecast of when to evolve to the next ship design. The Navy's 
plan includes aircraft carriers, ballistic missile and attack 
submarines, large and small surface combatants, amphibious ships, and 
auxiliary ships. Surface combatant and attack submarine capabilities 
are the most dynamic and will likely evolve substantially to align with 
growing operational demands, emergence of new technologies, 
introduction of unmanned and autonomous systems, and more capable 
sensors and payloads. Accordingly, the Navy will continue to analyze 
and update the Surface Capability Evolution Plan, the Tactical 
Submarine Evolution Plan, Amphibious Warfare Capabilities Evolution 
Plan, and all supporting plans (aviation, ordnance, amphibious, etc.) 
for alignment of capabilities and appropriate NNN adjustments. This 
analysis is an enduring, responsive process that increasingly values 
agile and adaptable lethality against dynamic adversaries. Continual 
analysis coupled with a stable build profile will provide the 
foundation from which to ensure all future platforms keep pace with the 
ever-changing threat.
    Although SLEs will continue to be a valuable tool for smoothing 
growth ramps, sustaining inventory, and extending the return on 
investment of a platform already paid for, they cannot be a substitute 
for long-term investment. Other elements identified in the annual ship 
construction plan for the Navy to continue to grow the force are 
steady, sustainable growth with stable acquisition profiles and 
executing aggressive growth opportunities above the steady procurement 
profiles if resources are available. Examples of aggressive growth 
options to accelerate meeting force structure goals and take advantage 
of available industrial base capacity might include additional 
Virginia-class submarines above the 10 ship Block V MYP construction 
contract (fiscal year 2019 to 2023) and additional DDG 51 Flight III 
ships beyond the 10 ship MYP construction contract (fiscal year 2018 to 
2022). Equally important, growing to a 355-ship navy requires 
commensurate increases to both military and civilian manpower and 
operations and maintenance funding to support and sustain the larger 
fleet.
    A stable industrial base is a fundamental requirement to achieving 
and sustaining the Navy's baseline acquisition profiles. Our 
shipbuilding industrial base and supporting vendor base constitute a 
unique national security imperative that must be properly managed and 
protected. By balancing long-term acquisition profiles with targeted 
SLEs and aggressive growth options, the Navy will be able to stabilize 
the industrial base and set the foundation for growing the force 
towards its warfighting requirement.
    Similarly, to increase its competitive advantage over pacing 
threats, the Marine Corps will rapidly adapt and modernize in an 
affordable way, which depends greatly on predictable funding in support 
of Force 2025. Historically, sea control/freedom of navigation has been 
a purely Navy mission; however, integrating Marine Air-Ground Task 
Force (MAGTF) air and ground fires capabilities will transition this to 
a true ``naval'' mission. Establishing sea control against a near peer 
competitor is an integrated naval and joint mission that leverages 
Marine Corps concepts and capabilities, such as the Expeditionary 
Advance Base Operations (EABO), F-35B, and precision artillery (i.e. 
precision cannon or HIMARS-like). The Chief of Naval Operations' Design 
for Maintaining Maritime Superiority which stresses freedom of maneuver 
and power projection ashore, combined with the Marine Corps Operating 
Concept (MOC) and Littoral Operations in a Contested Environment (LOCE) 
all illustrate the importance of an integrated force in anticipation of 
advancing threats. Specifically, LOCE describes how an integrated naval 
force, operating from dispersed locations, both ashore and afloat, will 
utilize its flexibility, versatility, and mobility to achieve sea 
control and power projection into contested littoral areas. EABO is the 
tactical/operational execution that provides the MAGTF's distributed, 
lethal, involvement in continuous contact layer advance naval task 
force operations. These concepts are directly in line with the NDS and 
the Defense Planning Guidance (DPG) which highlights the requirement 
for increased strategic flexibility and freedom of action. Marines 
operate regularly within these three layers today, making the focus on 
modernization priorities all the more critical. An essential supporting 
element to the USMC missions is the 38 Amphibious Warship fleet 
requirement. In accordance with the NDS, the Navy and USMC are looking 
at various paths to increase both the lethality and survivability of 
the amphibious force.
                            industrial base
    The DOD accounts for approximately 70 percent of the total domestic 
shipbuilding market. With such a large market share of the shipbuilding 
industry, the timing of DOD ship procurements is critical to the health 
and sustainment of the U.S. shipbuilding industry and has economic 
impact industry wide. It is important, therefore, for DOD to provide 
stability and predictability to the industrial base in order to keep it 
healthy today and robust enough to meet the Nation's future needs.
    Over the last 60 years, Navy procurement profiles have shown sharp 
peaks in shipbuilding followed by significant breaks or valleys in 
production that have severely degraded the ability to plan for the 
long-term and respond to changing requirements in the near-term. This 
created a boom and bust within the industry, degrading the industrial 
base and resulting in longer construction times and increased costs. 
The steady, sustainable baseline shipbuilding profiles in the Annual 
Long-Range Plan for Construction of Naval Vessels for fiscal year 2019 
will establish industrial efficiency and agility and protect workforce 
skills in order for the U.S. shipbuilding industrial base to remain 
cost effective long-term and meet the demands of the 355-ship Navy the 
Nation Needs.
    In a response to an Executive Order, the Navy contributed to the 
interagency report Assessing and Strengthening the Manufacturing and 
Defense Industrial Base and Supply Chain Resiliency of the United 
States. As a result of this analysis, there are multiple efforts 
currently underway focused on the shipbuilding industry to identify and 
mitigate risks and to ensure a healthy industrial base is available to 
support this navy and the next. These risks are monitored and addressed 
by the Navy in cooperation with OSD and our industry partners.
       the fiscal year 2019 department of defense enacted budget
    Fiscal year 2019 authorized and appropriated procurement of 13 
ships: two SSN 774 Virginia-class attack submarines; three DDG 51 
Arleigh Burke-class destroyers; three Littoral Combat Ships (LCS); one 
Expeditionary Sea Base (ESB); one Expeditionary Fast Transport (EPF); 
two John Lewis-class fleet oilers (T-AO); and one Towing, Salvage and 
Rescue ship (T-ATS). The fiscal year 2019 enacted budget also included 
advanced procurement funds for two additional ships: one San Antonio-
class LPD 17 Flight II; and one America-class LHA. The fiscal year 2019 
enacted budget provides for SLEs on 11 Battle Force ships including six 
Cruisers, four Mine Countermeasure ships, and one Improved Los Angeles-
class SSN and 21 vessels in the Ready Reserve Force (RRF) and the 
Military Sealift Command surge fleet.
    Timely enactment of the fiscal year 2019 DOD budget has enabled the 
Department to initiate contracting actions at the start of the fiscal 
year, accelerating the timeline for getting critical capabilities to 
the Fleet. For example, the Virginia-class SSN program will be building 
on past success by awarding a Block V Multiyear Procurement (MYP) 
contract for 10 ships in fiscal year 2019, which will include the 
Virginia Payload Module and Acoustic Superiority enhancements. The 
Arleigh Burke-class destroyers MYP contract awarded in fiscal year 2018 
for 10 firm Flight III ships, also includes flexibility to award five 
options ships (non-MYP ships) providing the ability to increase build 
rates. With funding available to the Department, the Navy is actively 
working to award the fiscal year 2019 multiyear ships as well as award 
the fiscal year 2019 option.
    We continue to pursue accelerated acquisition and business process 
reforms as part of our enduring commitment to accelerating delivery of 
advanced capabilities to the warfighter. We are utilizing accelerated 
acquisition authorities provided by Congress to actively promote 
innovation, government/academia partnerships, and the transition of key 
manufacturing technologies and processes. These fundamental process 
changes, combined with stable resources, and targeted investments will 
enable us to more affordably deliver the lethal capabilities most 
beneficial to the warfighter.
                  ford-class aircraft carrier program
    USS Gerald R. Ford (CVN 78) completed its post-delivery shakedown 
period and began Post Shakedown Availability/Selected Restricted 
Availability (PSA/SRA) in July 2018. CVN 78 shakedown accomplished six 
underway events, highlighted by conducting over 700 catapult launches 
and arrestments with Navy jets, including over a hundred launches and 
recoveries in one day on two separate occasions. These fixed wing 
operations were successfully supported by a number of aviation systems, 
while others will require continued refinement as they continue to 
support ongoing shipboard testing. CVN 78's yearlong PSA/SRA is 
underway, followed by a further shakedown period. Efforts already in 
place include capturing CVN 78 lessons learned, refining CVN 79's ship 
construction processes, capitalizing on technological improvements, 
shipbuilder investments in facilities, invoking better business 
strategies, and optimizing Ford-class operational systems. Lessons 
learned during CVN 78's Initial Operational Test and Evaluation will be 
captured and allow further optimization of Ford-class requirements, and 
continue to improve ship's design and construction schedules in order 
to reduce future aircraft carrier costs. As of October 2018, John F 
Kennedy (CVN 79) is over 50 percent complete with launch planned in 
late 2019 and delivery in the fall of 2024.
    The Navy is aggressively pursuing cost reduction opportunities to 
deliver fully capable Ford-class CVNs at the lowest possible cost. The 
Navy is initiating contracting actions necessary to continue 
fabrication of Enterprise (CVN 80) in early fiscal year 2019 and 
preserve the delivery date while continuing to negotiate the 
significant savings associated with the two CVN buy, should the 
Department chose to pursue this option. The two-ship buy is a 
contracting strategy the Navy effectively used in the 1980s to procure 
Nimitz-class aircraft carriers. The strategy achieved significant 
acquisition cost savings compared to contracting for the ships 
individually.
                    columbia-class submarine program
    Ballistic Missile Submarines, coupled with the Trident II D-5 
Strategic Weapons system, represent the most survivable leg of the 
Nation's strategic arsenal and provide the Nation's most assured 
nuclear response capability. The Columbia-class program, the Navy's 
number one acquisition priority, is on track to start construction in 
October 2020 and deliver to pace the retirement of our current 
ballistic missile submarines, deploying for its first patrol in fiscal 
year 2031. Cost, schedule, and technical performance are being tightly 
managed to ensure this critical strategic capability is delivered on 
time and within budget. The design schedule is aggressive but 
achievable. Programmatic and enterprise readiness will be paramount to 
achieving on time delivery for the class's 12 hulls.
    General Dynamics Electric Boat (GDEB) and the Navy continue to take 
corrective measures regarding the recent issues of welding quality and 
inadequate Ultrasonic (UT) Non-Destructive Testing (NDT) of missile 
tubes. Corrective actions are in progress for all delivered and in 
process BWX Technologies (BWXT) large diameter tubes, as well as 
conducting actions for the two other missile tube vendors (Babcock 
Marine [BM] and Northrop Grumman [NG]). U.S and UK leadership approved 
a GDEB and NAVSEA plan to accelerate follow-on missile tube procurement 
and improve schedule margin to U.S lead ship construction, while 
minimizing the impact on UK lead ship construction.
                    virginia-class submarine program
    The Virginia-class program (SSN 774) program continues as one of 
the Navy's most successful shipbuilding programs with 17 ships 
delivered within budget and increased capability in each block. The 
fiscal year 2019 to 2023 Block V MYP delivers on the Department's 
commitment to build and sustain a lethal, resilient force while growing 
near-term capability and capacity. The MYP allows for the investment 
and sustainment of our critical industrial base, helping to ensure 
stability and more affordable acquisitions with the options to add 
additional ships in the future providing the Navy flexibility to 
increase SSN 774 build rates above the 10 MYP ships that was included 
in the Navy's Fiscal Year 2019 Budget request. The Block V MYP 
incorporates Acoustic Superiority and starting with the second ship in 
fiscal year 2019 incorporates the Virginia Payload Module (VPM). The 
VPM ships aid in the recovery of strike capability when guided missile 
submarines (SSGN) retire in fiscal year 2026 to 2028.
    The Navy with the shipbuilders continue to work within the 
Integrated Enterprise Plan framework to support Columbia, Virginia, and 
Ford-class construction in an integrated approach. This long-term 
government and contractor effort guides the execution of these nuclear-
powered platforms affordably, on time, to specifications, in the 
necessary quantities, and with acceptable risk.
                        large surface combatants
    The Arleigh Burke-class (DDG 51) program remains another of the 
Navy's most successful shipbuilding programs with 66 ships delivered to 
the Fleet. The fiscal year 2018 to 2022 DDG 51 MYP delivers on the 
Department's commitment to build and sustain a lethal, resilient force 
while growing near-term capability and capacity. This MYP also allows 
for the investment and sustainment of our critical industrial base, 
helping to ensure stability and more affordable acquisitions with the 
flexibility to add additional ships in the future. Each shipbuilder's 
contract included options for construction of five option ships (non-
MYP ships) in fiscal year 2018/2019/2020/2021/2022, providing the Navy 
flexibility to increase DDG 51 build rate above the 10 MYP ships that 
was included in the Navy's fiscal year 2018 budget request. All ships 
in this MYP will incorporate Integrated Air and Missile Defense and 
provide additional Ballistic Missile Defense capacity known as Flight 
III, which incorporates the Air and Missile Defense Radar (AMDR). AMDR 
meets the growing ballistic missile threat by improving radar 
sensitivity and enabling longer range detection of increasingly complex 
threats. The program demonstrated design maturity through its 
successful completion of several stages of developmental testing, its 
entry into the Production and Deployment phase, and fiscal year 2017 
Flight III awards to both shipbuilders.
    Complementing the DDG 51, the DDG 1000 Zumwalt-class guided missile 
destroyers are an optimally crewed, multi-mission surface combatant 
designed to provide long-range, precise, naval surface fire support. 
The DDG 1000 ship is in combat system activation at its homeport of San 
Diego. DDG 1001 HM&E delivered April 24, 2018, and construction on DDG 
1002 is over 79 percent complete. After a comprehensive review of 
Zumwalt-class requirements, the Navy decided in November 2017 to 
refocus the primary mission of the Zumwalt-class Destroyers to 
Offensive Surface Strike. This change in mission adds lethality and 
offensive capabilities by providing fires against targets afloat and 
ashore.
                        small surface combatants
    The fiscal year 2019 appropriation funded three LCS in fiscal year 
2019. Not to Exceed ship prices were established with the fiscal year 
2018 LCS ship awards. Requests for repricing are with the shipbuilders 
with awards planned by December 31, 2018. The Navy is on track to award 
a single source Guided Missile Frigate [FFG(X)] Detail Design and 
Construction contract, via a full and open competition, as planned. To 
support this, the Navy awarded five Conceptual Design (CD) contracts on 
February 16, 2018, and is now in month nine of the 16-month CD phase. 
The contracts allow for ongoing dialogue with Industry using monthly 
Technical Exchange Meetings held with each contractor facilitating an 
open forum to discuss technical issues, questions, and design progress 
with Navy Subject Matter Experts. FFG(X) award will be a full and open 
competition. The requirements have been refined and are being finalized 
based on industry feedback on the feasibility of meeting the desired 
performance levels and accommodating common Navy standard systems 
across the radar, combat system, and launcher elements in the various 
ship designs in a cost effective manner.
                       future surface combatants
    A significant portion of the surface combatant force will operate 
forward, consisting of a mixture of large and small manned surface 
combatants (LSC/SSC). To stay ahead of adversary technological 
advances, these combatants will be designed to be flexible and 
adaptable, supporting affordable upgrades at the pace technology will 
allow--throughout their full service life. Manned surface combatants 
will team with unmanned systems (UxS)--in all domains--providing for a 
variety of on and off-hull support capabilities such as persistent 
early, warning, communications, decoys, radars and acoustic radiation 
sources, naval surface fire support, and adjunct magazine capacity. All 
forces will operate as integrated networks, ranging from an individual 
ship with multiple off-board systems, multi-ship and system Surface 
Action Groups (SAG) and Strike Groups (SG). An Integrated Combat System 
(ICS) will link communications, command and control systems, sensors 
and weapons, and facilitate an exchange and analysis of data to provide 
warfighters with actionable knowledge to ensure decision superiority.
    The capabilities delivered by Future Surface Combatant Force will 
span multiple platforms and systems. The earliest ICS Initial 
Operational Capability will occur in the mid-2020s as combat systems 
transition toward higher levels of integration across the combatant 
force. Also, in the mid-2020s, UxVs will deliver with increased levels 
of autonomy and capability as their mission systems are increasingly 
networked.
                        amphibious ship programs
    Amphibious ships operate forward to support allies, rapidly and 
decisively respond to crises, deter potential adversaries, and provide 
the Nation's best means of projecting sustainable power ashore. They 
also provide the preponderance of our naval response in humanitarian 
assistance and disaster relief. The operationally available inventory 
of amphibious warships and connectors remains below the 38 ship force 
structure requirement. The Navy is exploring service life extensions of 
existing ships and the acceleration of the LPD Flight II program to 
mitigate this shortfall.
    LHA 6 America-class ships are flexible, multi-mission platforms 
with capabilities that span the range of military operations, from 
forward-deployed crisis response to forcible entry operations. Tripoli 
(LHA 7) is 93 percent complete and now scheduled to deliver in June 
2019 as it continues to work through its shipboard test program. After 
a successful production readiness review, LHA 8 began sustained 
fabrication on October 18, 2018, and is scheduled to deliver in fiscal 
year 2024.
    The San Antonio-class (LPD 17) provides the ability to embark, 
transport, and land elements of a landing force by helicopters, tilt 
rotor aircraft, landing craft, and amphibious vehicles. USS Portland 
(LPD 27) commissioned in April 2018 and the USS Fort Lauderdale (LPD 
28) is expected to deliver in fiscal year 2021. LPD 28's design and 
construction features will leverage many of the ongoing LPD Flight II 
design innovations and cost reduction initiatives that are necessary 
for the program to achieve affordability goals while maintaining the 
high-level capabilities of the LPD 17 class. LPD 29 was awarded in 
February and will continue with the LPD 28 design, but add the 
Enterprise Air Surveillance Radar (EASR) among other improvements. LPD 
30 will complete the design transition and meet the requirement. It has 
been designated as the first LPD Flight II. Contract actions are in 
process for the award of LPD 30 Detail Design and Construction.
                        auxiliary ship programs
    Support vessels such as the ESB, Expeditionary Transfer Dock (ESD), 
and the Expeditionary Fast Transport (EPF) provide additional 
flexibility to the combatant commanders. ESBs are flexible platforms 
designed and built for Airborne Mine Counter-measure Missions and 
capable of hosting multiple mission sets with airborne, surface, and 
subsurface assets. ESB 4 delivered in February 2018 and ESB 5 is 
currently under construction. Delivery of the EPF 10 is planned for 
November and the award of EPF 13 is planned by the end of the calendar 
year.
    The Combat Logistics Force (CLF) consists of T-AOE fast combat 
support ships, T-AKE dry cargo and ammunition ships, and T-AO fleet 
replenishment oilers. CLF ships fulfill the vital role of providing 
underway replenishment of fuel, food, repair parts, ammunition and 
equipment to forward-deployed ships and embarked aircraft, to enable 
them to operate for extended periods of time at sea. The Kaiser-class 
(T-AO 187) fleet replenishment oilers will be replaced with the John 
Lewis-class fleet replenishment oilers, designated T-AO 205 class. The 
first T-AO 205 started construction on September 20, 2018.
    The Department has begun procurement of a combined towing, salvage, 
and rescue (T-ATS) ship to replace the four T-ATF 166 class fleet ocean 
tugs, which reach the end of their expected service lives starting in 
2021, and the four T-ARS 50-class salvage ships, which reach the end of 
their expected service lives starting in 2025. Fabrication is expected 
to begin in early summer 2019.
                       ready reserve forces (rrf)
    The Navy, in coordination with the Office of the Secretary of 
Defense (OSD), U.S. Transportation Command (USTRANSCOM), and the 
Department of Transportation's (DOT) Maritime Administration (MARAD), 
provided the ``Sealift That the Nation Needs'' Report to Congress in 
March 2018. This report outlined a three-phased approach to strategic 
sealift recapitalization: SLE of select surge sealift vessels, used 
vessel acquisition, and a common-hull shipbuilding program.
    Across the fiscal year 2017 to fiscal year 2019 budget cycles, the 
Navy programmed SLEs for 31 ships. These SLEs will add roughly 10 
additional years to select hulls (typically increasing the service life 
from 50 to 60 years). The Navy will continue to identify other vessels 
suitable for extensions in subsequent budget cycles, subject to the 
requirements of the ``Sealift That the Nation Needs.'' SLE is a 
temporary mitigation, which must be managed as the fleet's average age 
increases and the challenge of maintaining obsolete equipment and 
scarce spare parts expands.
    Acquiring used vessels is the most cost-effective approach to 
replacing the aging fleet and bridging the gap for strategic sealift 
capability until a new construction program comes on line. The DOD-DOT 
strategy is to place the acquired used vessels into MARAD's Ready 
Reserve Force. Considering material condition of the current fleet, 
expected service life, and the new build acquisition timeline, the 
estimated total number of used vessels required is 26 to maintain the 
Sealift That the Nation Needs. Authority granted in the Fiscal Year 
2018 National Defense Authorization Act (NDAA) permits the purchase of 
two used vessels. The Fiscal Year 2019 NDAA increased authority to 
purchase up to seven used vessels, contingent on the Secretary of the 
Navy certifying the initiation of an acquisition strategy for new 
construction of not less than 10 sealift vessels, with the lead ship 
delivery in 2026.
    The Fiscal Year 2019 NDAA directed that the Navy in consultation 
with MARAD and USTRANSCOM prepare a Business Case Analysis (BCA) of 
recapitalization options for the RRF. Navy will deliver the BCA in 2019 
in order to align the analysis with OSD and USTRANSCOM's Mobility 
Capabilities Requirements Study (MCRS). The MCRS is integral to the BCA 
as it will set the sealift capability required to meet combatant 
commander requirements. The Navy will continue to partner with Congress 
as well as interagency, joint, and industry partners to ensure the 
success of this important force projection capability.
                       unmanned undersea vehicles
    The Navy is expanding its global reach through the development of 
unmanned capabilities to ensure maritime dominance and power 
projection. This requires persistent global presence in all maritime 
domains, the ability to deny our adversaries safe haven in the world's 
oceans, and the capability to generate kinetic and non-kinetic effects 
at the time and place of our choosing. The Navy executes multiple 
missions in and from the Undersea and Surface Domains including 
Strategic Deterrence; Intelligence, Surveillance, and Reconnaissance 
(ISR); ASW; Anti-Surface Warfare (ASuW); Strike; Naval Special Warfare; 
and Mine Warfare. The Navy is using a Family-of-Systems strategy to 
develop and employ unmanned vehicles to conduct a spectrum of missions 
that complement and relieve stress on the manned force. The Family of 
Systems approach leverages commercial and modified commercial vehicles, 
and is developing large and extra-large vehicles as necessary.
    Snakehead and Orca are the large and extra-large undersea vehicles 
that will be used for unmanned undersea family development and tactical 
operations. Additionally, medium and large unmanned surface vehicles 
will be used for unmanned surface family development, logistics and 
tactical operations.
                                summary
    The ascendant threats posed by revisionist powers and rogue states 
require change--we must become more lethal, resilient and as a 
consequence, a more capable deterrent. The Navy and Marine Corps are 
actively integrating capabilities, synchronizing efforts, and moving 
forward as a unified force while preparing to meet challenges across 
the range of military operations. Naval integration bonds Navy and 
Marine Corps warfighting doctrine, concept development, task 
organization, material acquisition programs, logistics, training and 
command and control. Naval integration maximizes the warfighting 
capabilities of the Navy surface, subsurface, aviation, cyber, and 
special warfare communities with the MAGTF to create a credible multi-
functional Naval capability that can influence, deter, and compete in 
all domains. At the Service-level, this implies achieving a greater 
degree of interdependence in organizing, training, and equipping of the 
force through the MOC. At the operational level, this implies a reform 
to theater maritime command and control (C2) architectures and 
sustainment; and, at the tactical level, this implies the rapid 
integration/interoperability of amphibious forces functional capability 
into larger Navy formations.
    The Department of the Navy continues to increase capacity, 
lethality, and availability with the shipbuilding, aviation, and 
expeditionary programs. New capabilities are continually being 
delivered to the fleet and retrofitted on existing platforms to provide 
enhanced lethality and survivability to the warfighter. In addition, 
the Department is aggressively pursuing efforts to accelerate 
acquisition timelines and schedules and further drive affordability 
into our programs, in order to deliver capability to our warfighters 
faster and be as effective as possible within our resources. Continued 
congressional support of the Department's plans and budgets will help 
sustain a viable industrial base, as will timely enactment of 
appropriations, avoiding costly Continuing Resolutions.
    By balancing new construction opportunities with calculated SLEs, 
the Department of the Navy is on the path to a 355-ship fleet. While 
the Navy continues to utilize multiyear procurements and block buy 
strategies to stabilize the industrial base and attain ships more 
affordably, achieving a 355-ship fleet will be a challenge. It's not 
just the number of ships that is important; it's the capability and the 
ability of our ships to be on station when and where needed. It is also 
the long-term operation and sustainment of this larger fleet that will 
require increased and predictable budgets well into the future. 
Procurement priorities must be balanced with what is needed to maintain 
our readiness including maintenance and planned modernizations to 
ensure our ships meet their expected service lives coupled with SLEs 
where appropriate. Through targeted SLEs, we will be able to retain 
highly-capable ships past their originally designed service life until 
the Navy can replace them with new construction ships.
    This lays the ground work for growing warfighting capabilities in 
the Fiscal Year 2020 President's Budget, as the Department also makes 
initial investments in a larger Navy and Marine Corps. With the support 
of Congress, we can deliver the larger, more ready, and more capable 
force that our warfighters need. Our sailors and marines greatly 
appreciate your support and commitment.

    Senator Wicker. Well, thank you very much. I will just 
direct questions to the panel, and the one who feels best 
suited to answer, step forward.
    Encouraging news on the requirement, the statutory 
requirement according to the SHIPS Act, which is the unanimous 
position of this Subcommittee and also the law of the land 
signed by the President of the United States. So, 327 by the 
year 2023, 355 another 11 years after that. How will the--how 
optimal will that mix be, Mr. Secretary, at those two stages?
    Secretary Geurts. Sir, I think, you know, as we talked 
about in the springtime, we were ready to accelerate the plan 
to 2034 by extending the life of a number of our destroyers. 
That is not the optimal mix, per se. I will turn it over to 
Admiral Merz in terms of where he sees a little bit of an 
imbalance. But it is certainly a workable mix that would allow 
us to execute the National Defense Strategy.
    Bill, if you want to jump in?
    Vice Admiral Merz. Yes, sir.
    First of all, Senator, I would like to echo Secretary 
Geurts' appreciation on the enactment of the 2019 bill. It just 
makes every process significantly more efficient.
    Senator Wicker. It was a bipartisan achievement, and I am I 
proud to have been part of this team.
    Vice Admiral Merz. Yes, sir. Thank you very much.
    Regarding the mix, you know, we have been long-time 
defenders of the proper mix to 355. The 355 is a derived 
number. We determine what type of ships we need in what 
numbers, add them all up, and we get the 355 or higher, 
depending on what study you rally around. When we extended the 
life of the DDG 51 to 45 years, it immediately shifted the 
shipbuilding plan left about 20 years as far as total numbers, 
but in the incorrect mix.
    However, if you are going to have an incorrect mix, it is 
nice to have too many destroyers while we were balancing out 
the remainder of the fleet. So we have determined that that 
imbalance is less of a risk, more of an imbalance in the 
correct direction.
    Senator Wicker. Good point. Good point.
    Vice Admiral Merz. But we still need to fill in the rest of 
the fleet, and holding the fort down with more DDGs is a sound 
way forward.
    Senator Wicker. Well, let me ask you about some assumptions 
that might change the plan and get us there faster. 
Specifically, what would happen if the Navy changed some or all 
of the following assumptions? Executed additional service life 
extensions. Maintained overall shipbuilding funding levels at 
the fiscal year 2035 level after we get finished with the 
Columbia-class procurement. That would be sweet, would it not? 
Receive supplemental funding for the Columbia program outside 
the normal account in fiscal year 2021 through 2035. Or--and/or 
use the available shipyard capacity identified in the 30-year 
shipbuilding plan.
    Secretary Geurts. Sir, I think all those would be 
instruments of change to move that to the left. When we built 
the shipbuilding plan, we built a framework of what a steady, 
sustainable rate would be and then where we had opportunities 
to accelerate should funding become available, whether that is 
in destroyers or in submarines, or in some of the other 
classes.
    So those opportunities exist. Depending on the levels of 
those assumptions you spoke of there, there is certainly 
opportunity to move that plan to the left.
    Senator Wicker. Okay, so----
    Secretary Geurts. I think it is important, though, sir, and 
I think that both my colleagues would share that we are 
balanced in doing that. As we look forward to our plan, we got 
to make sure we include a balanced force that we can sustain 
and keep ready, and that is part of the calculus as we move 
forward as well.
    Senator Wicker. Okay. You know, according to statute, we 
are supposed to revert back to the BCA caps. I view that as 
unthinkable, and it would be irresponsible on the part of this 
Congress. But what would happen if we did that, or how might a 
flat or declining defense budget affect the shipbuilding 
account? What would that do to our national defense readiness?
    Secretary Geurts. Sir, I think, our job for the 
Department----
    Senator Wicker. You have 12 seconds, sir.
    Secretary Geurts. Yes, sir. Our job for the Department of 
the Navy is create the best balanced force mix we can, given 
the funding available. So I will not hypothesize what that 
might look like in those different budget scenarios other than 
to say, you know, we would try and balance with the funding 
available. Obviously, at the BCA level, that significant a cut 
would be difficult to imagine us executing the current plan 
under BCA caps.
    Senator Wicker. Difficult to imagine, yes.
    Vice Admiral Merz. Sir, if I can just add on to that, 
actually two pieces, your previous question about service life 
extensions, we do that--we review every ship for service life 
extensions and extend what we can. But those last two points 
you made, I think, are absolutely fundamental to sustaining the 
shipbuilding plan. That is a steady funding profile and the 
figuring out an alternate solution to funding Columbia, which 
we have already identified in the shipbuilding plan, and that 
is work to be done. Not quite a panic yet, but it is on the 
horizon, and we are going to have to deal with that.
    As far as the BCA, there would be immediate impact as soon 
as that went in. Depending on how it last, I think we can go 
from immediate to devastating impact on the program.
    Senator Wicker. Thank you very much.
    Senator Shaheen?
    Senator Shaheen. Well, thank you, Mr. Chairman.
    Secretary Geurts, I am glad that Admiral Merz was more 
direct about his response to that question. I would say to you 
all that this is an imminent possibility, and unless Congress 
is very clear about what the impact is going to be, I think it 
makes it harder to make a decision. So I hope that you will not 
be as diplomatic as you were in your response to that question, 
and you will be very direct and say, ``This is what the impact 
is going to be.'' Because I think people--I think we need to 
hear that in order to make the best decision possible.
    Secretary Geurts. Absolutely. Will do, ma'am.
    Senator Shaheen. Secretary Geurts, as we all know, the goal 
of the 355-ship Navy came as the result of the QDR in 2014. Now 
all of us here on the Subcommittee were in Halifax a couple of 
weeks ago for the Halifax Security Forum, and we heard Admiral 
Davidson, who is the commander of United States Indo-Pacific 
Command, say that we need a bigger Navy. He said that the 
Chinese fleet continues to grow, and I quote, ``The capacity 
concern is going to become greater in years to come.''
    So, given that the 355-ship Navy was the result of a study 
in 2014, are we still comfortable that that number of ships is 
adequate to address the growing threat from China and Russia, 
for that matter, the great power competition that we are now 
facing?
    Vice Admiral Merz. Yes, ma'am. I will take that one.
    So the 2016 FSA, it was a composite of the ``O'' plans, the 
threat, the threat vectors, and then what are the phases of 
warfare we have to deal with across those threat vectors. No 
matter what study you looked at, they all said we need to be 
bigger, and we have endeavored on a path to get bigger.
    Three hundred fifty-five, I think, is a minimum. We are--we 
have started the process on the next force-structure 
assessment. It is typically about a year-long process when we 
get the new combatant commanders in place. The adjustment to 
the old plans and how that affects the component command, in 
our case the Navy component commands, and then we put together 
the force structure assessment. Then we have typically a 
commission of external assessors to look at that, and then we 
red-team it, and then we put it out.
    A single force structure assessment typically will 
influence two or three budget cycles, which is actually a pace 
that is very aligned with how quickly we can even adjust the 
shipbuilding plan and the force structure. So it typically 
works out well for us.
    We have seen nothing from the combatant commanders to date 
or Secretary Mattis' National Defense Strategy that would give 
us any indication that we were going to be coming off that 355 
ship in composition or in total numbers.
    Senator Shaheen. Thank you.
    Secretary Geurts, you testified before the Subcommittee in 
April about the Navy's initiatives to work with small business. 
I come from a State where small business is the foundation of 
our economy. We heard recently from Air Force Secretary Wilson 
about the Air Force's Blue Shift Initiative to try and engage 
small businesses in the needs of the Air Force in the future. 
Is there anything similar that the Navy is doing for small 
business?
    Secretary Geurts. Yes, ma'am, absolutely.
    In coming off of 2018, it was the largest year on record 
for the Navy in terms of small business awards. We are a couple 
percent above our goals, with over $15 billion going directly 
to small businesses. So they are key to our future, absolutely.
    So, yes, I am coordinating directly with Dr. Roper and 
taking advantage of any opportunity there. The Navy still is 
kind of top performer of all the services on SBIR Phase III 
opportunities, where we turn those initial small business 
awards into larger awards. This last year we have awarded 
several major ship construction projects directly to small 
businesses on the coast. So sometimes, I think it gets thought 
of only from a technology standpoint, and we are having small 
business--they are constructing ships for us and doing an 
outstanding job. They will be a key to our future.
    Secretary Shaheen. That is great. I appreciate hearing 
that. Can you tell us how we can ensure that small businesses 
in our States are aware of what is going on and how to be 
engaged in those proposals when they come out?
    Secretary Geurts. Absolutely. I have assigned a deputy 
program manager for all of our programs as a small business 
advocate. And so, one thing to recommend to them is for any of 
the programs that they are interested in, contact the program 
manager. That way they have got somebody inside the program 
that is their advocate, as well as any of our small business 
offices we have all around the Navy.
    Secretary Shaheen. Great. We will follow up. Thank you.
    Thank you, Mr. Chairman.
    Senator Wicker. Let me just follow up, Admiral Merz, on 
Senator Shaheen's first line of questioning. The--and I would 
call to everyone's attention Secretary Geurts' opening 
statement. The emerging threats have not diminished in the last 
2 years, have they, Admiral? If anything, they have gotten 
worse?
    Vice Admiral Merz. Exactly right, sir.
    Senator Wicker. The challenges--I think his statement was 
that they are more dynamic, and you certainly agree with that. 
So, if anything, there would be a higher requirement.
    Now, this 355 you mentioned, and I appreciate you saying 
this, this is the minimum that we need. A 355-ship fleet is not 
some best-case ideal that we would like to achieve if 
everything goes well. Am I correct there?
    Vice Admiral Merz. Yes, sir.
    Senator Wicker. So, what--actually, the admirals and 
generals came back to us with 655, did not they?
    Vice Admiral Merz. Yes, sir. That was one of the numbers 
that was evaluated.
    Senator Wicker. It was, of course, resource challenged, and 
we have to make all the numbers come out. We do not have 
unlimited funds. But the 355 is the minimum under a scenario 
where things were dangerous, but actually less dangerous than 
they are right now. Am I correct?
    Vice Admiral Merz. Yes, sir, absolutely correct.
    When we constructed the shipbuilding plan, first and 
foremost, we set a steady build rate that would continue to 
grow the Navy over time at an affordable rate and to protect 
the industrial base. We put tremendous effort in identifying 
the extra capacity in the shipyards that we could increase the 
pace to 355. That was independent of the service life 
extensions that we did with not just the DDG 51s, but we are 
also looking at up to 7 Los Angeles-class submarines that we 
are going to endeavor to do service life extensions on.
    The fact is, it is going to take us decades to get there, 
and the higher the pace, the steeper the ramp, the better. We 
are also endeavoring to design ships that can take much better 
advantage of things we can control on a shorter timeline, like 
the capabilities we put on these ships. The way we have been 
explaining it is, you know, the CONOPS, the tactics on how the 
commander employs the ships, that can change in hours, days, 
weeks; the capabilities, months and years to develop; ships, 
years and decades to put together.
    So we are endeavoring to design these ships to take on 
these capabilities under a much shorter timeline to affect 
these CONOPS. It is all tied together. Three hundred fifty-five 
is the minimum to get there. The sooner we get there, the 
better.
    Senator Wicker. I would just echo also, Secretary Geurts, 
what Senator Shaheen said. We do not want you to be alarmist. 
We do not want you to exaggerate and wave your arms. You are 
relaxed about your job, and you are going to do what you can 
with what we give you. But do tell us the facts, and let us be 
honest with the American people about how far behind we have 
gotten.
    So thank you very much and----
    Secretary Geurts. Yes, sir. I just--one other piece on the 
Budget Control Act. Obviously, the number is devastating in 
itself. The other piece that is particular challenging for 
shipbuilding is that every ship are line-item appropriated, and 
those cuts come down as an equal share to every appropriation.
    And so, not only is the number itself, you know, a drastic 
reduction which will cause great disruption, how that number 
will get laid across the budget, should we get in that 
condition, will be devastating to the way we have funded and 
constructed our shipbuilding program. So there is a little bit 
of a double whammy in there that will cause a complete 
disruption of our program should that path come to us.
    Senator Wicker. I think Members of the Committee, we are 
actually working on the 2020 budget even as speak. So the 
future is imminent.
    Senator Rounds?
    Senator Rounds. Thank you, Mr. Chairman.
    I would like to follow up on what the chairman was 
suggesting here. Admiral Merz, in September, the commander of 
the United States naval forces in Europe said, and I quote, ``I 
think Russian submarines today are perhaps some of the most 
silent and lethal in the world.'' And that the caliber of 
missiles that Russia has deployed from coastal defense systems, 
aircraft, and submarines have--and once again, I quote--``Shown 
the ability to reach pretty much all the capitals in Europe 
from any of the bodies of water that surround Europe.''
    How is this type of Russian activity factoring into Navy 
budgeting and posture decisions?
    Vice Admiral Merz. Yes, sir. So the specific capabilities 
of Russia, we keep a very close eye on it, and Admiral Foggo, 
being a submariner, is uniquely attuned to the undersea 
capabilities. Matter of fact, he spends much of his life 
underwater working on this problem.
    Unfortunately, I cannot really speak in this forum the 
specific capabilities we are concerned about and what we are 
doing about them. But I am happy to come and brief you in a 
separate forum on how that goes. But we do----
    Senator Rounds. That is fine. But I think what is important 
here is, is that there is a need for additional resources and 
that our peer adversaries are not sitting still. They are 
developing their systems. They are continuing to move with new 
technologies.
    What this open session is an opportunity to do is to 
highlight our need to continue to move forward with those new 
technologies. It is really difficult to be able to share with 
the American public unless you are prepared to lay out in some 
pretty clear terms just how serious the threats are from our 
near-peer competitors.
    I am going to ask on Russian side, and then we are going to 
go into China. But on the Russian side, can you visit a little 
bit about how serious this is, or is this just day-to-day 
operations?
    Vice Admiral Merz. So the capabilities that Russia brings 
is very serious. They are tremendous engineers. We have been 
sparring with them for quite a long time as they are our old 
Cold War adversaries. The technologies they develop are often 
leading in whatever field they desire to----
    Senator Rounds. So I am going to lead you down the road a 
little bit. So the 1990s technology that we have today, are 
they capable of handling the technologies that are being 
deployed today by the Soviet Union with regard to submarine 
warfare?
    Vice Admiral Merz. So, are we capable of handling the 1990s 
technology that Russia has fielded?
    Senator Rounds. Or the ones that they are fielding today, 
with our 1990s technologies?
    Vice Admiral Merz. Sir, I really cannot get into how we are 
going to deal with the Russian capabilities from a United 
States capability standpoint. We will have to take that to a 
different forum.
    Senator Rounds. Okay. How about on China? I am going to ask 
this of both Secretary Gertz and you, Admiral Merz.
    The former Indo-Pacific Command commander has testified 
that only half his requirement for attack submarines in the 
Pacific theater was being met. This challenge will only grow 
worse in 2020s as attack submarines retire at a faster rate 
than they are planned to be built. How is the Navy planning to 
mitigate the attack submarine shortfall in the 2020s, and what 
are you doing right now to make sure that you do not have 
additional attack submarines sitting at dry dock, such as what 
we had with the Boise and several others as well?
    Secretary Geurts. Yes, sir. Again, I think if you ask 
Admiral Merz and I, you know, that is probably the most looming 
shortfall ahead of us in terms of capability is in attack subs. 
And so, I think we are attacking that in several different 
courses of action.
    One is ramping up the Virginia production to two, 
potentially more than two down the road, submarines per year 
and getting those submarines--new submarines out into the 
fleet. The second area is where can we do some service life 
extensions. Some of our existing submarines, using the seven 
cores we have available to extend the life of some of our 
existing submarines and push--mitigate some of the bathtub that 
is coming up. And then the third piece is attacking 
availability, and so that we have very submarine as available 
and in the fight as we can.
    Senator Rounds. How many submarines do you have in dry dock 
right now waiting to get in? How many of them are tied up at 
dock waiting to get into dry dock today?
    Secretary Geurts. Sir, I will have to get you the exact 
number on that. What I would say is where we are looking is 
both how do we improve performance in the public shipyards? So 
that is part of our shipyard optimization plan. And then how do 
we move, work, and leverage the private capability so that we 
do not have ships waiting to get into the public yards?
    Currently, we have four ships in the private submarine 
yards doing their availability repairs. We are going to 
contract for an additional two coming out. And so, the NAVSEA 
commander and I are looking very closely at the future 
throughput we need both in the public yards and in the private 
yards to balance that out, so we do not get back into the state 
where we have submarines waiting for years to get into the 
yard.
    Senator Rounds. Just, Mr. Chairman, I just think the point 
being that it is pretty tough to ask the private boatyards to 
be able to be ready to go, not knowing whether or not we are 
going to have the resources available to fund those systems on 
a timely basis. That is part of the reason for the discussion 
today is not only looking at the technology necessary, but just 
to maintain the existing fleet on our way to a 355, we have got 
to have consistent funding in the mix that you can count on in 
order to make those long-term contractual obligations with the 
folks who actually do the repair work.
    Secretary Geurts. Absolutely, sir. The steady and 
predictable funding is the key. We have got to convert that 
into deliberate plans with enough lead time so that those 
private yards are ready and equipped to take that input as we 
come in.
    When I look at the future, I think there is always going to 
be a future of both public and private submarine maintenance 
that makes sense from having a balanced skill set that gives us 
flexible options depending on the repairs we need to do and 
attacks this throughput so that we maximize the availability of 
every asset we have.
    Senator Rounds. I will ask for the record the numbers that 
you got right now that are waiting to get into dry dock that 
you can get back to me on.
    Secretary Geurts. Absolutely, sir.
    Senator Rounds. Thank you. Thank you, Mr. Chairman.
    Vice Admiral Merz. Senator, I would like to follow up just 
one comment on your larger question of the total number of 
submarines and what are we doing to get there? I think this is 
just a tremendous case study and a lesson for everybody that if 
you walk away from your industrial base, there is no graceful 
recovery. There is nothing we can do to minimize the trough 
other than selectively picking years that we can potentially 
build a third submarine per year. And even that will not fill 
in that trough.
    We are going to extend submarines the best we can, but we 
are not going to reach 66 submarines until the very end of this 
shipbuilding plan. And it is simply a result of delivering--and 
the number is close, I think it is two submarines in the 1990s. 
That is an industrial base that is just not sustainable. This 
is the long-term impact.
    Thank you.
    Senator Rounds. Thank you, Mr. Chairman.
    Senator Wicker. Senator Kaine?
    Senator Kaine. Thank you, Mr. Chair, and thanks to the 
witnesses for being here today and for your service.
    I have questions about four kind of discrete issues that I 
will just address, and whoever can deal with them, please do.
    First, Secretary Geurts, your opening statement--written 
statement talked about the possibility of the two CVN buy, and 
the quote was, ``Navy is continuing to negotiate the 
significant savings associated with the two CVN buy, should the 
Department choose to pursue the option.''
    The NDAA that we passed requires The Secretary of Defense 
to certify to the defense committees not later than 30 days 
before entering into a contract if you decide to go the two-buy 
route. Can you give me a status report on those discussions? 
Are we likely to have some certification of that kind soon, or 
just give me the status?
    Secretary Geurts. Yes, sir. Since we spoke last, we have 
been working closely with the shipyard and negotiating what 
savings would look like should we go into a two-carrier 
condition. We think those savings will be better than the $2.5 
billion number that quoted I think the last time we spoke.
    We are in, as you know, the 2020 budget process right now. 
So we have not made a final decision on whether to pursue that 
or not. I would expect that decision sometime by the end of 
this calendar year. Obviously, then we would have--should we go 
down that path, the SecDef would certify that and submit that 
to Congress, per the NDAA.
    Senator Kaine. Great.
    Senator Wicker. What is your drop-dead date on having to 
make that decision?
    Secretary Geurts. Sir, I am not sure there is a drop-dead 
date, per se. We are aiming to have that decision by the end of 
the calendar year. If that decision were to move out much 
longer than the calendar year, the savings achievable will 
start to erode, given that we currently have CVN 80 on 
contract.
    Senator Kaine. A second issue that deals with the submarine 
supply base, Admiral, you were talking about. There was $450 
million in the fiscal year 2018 and 2019 NDAAs and approps for 
submarine supplier base expansion. We have heard from some 
suppliers that the Navy has yet to release any of those funds. 
I do not know whether that is true or not, but that is what we 
have heard. Is that the case, and if so, can you tell us what 
you are likely to do to release those funds and start to do 
the----
    Vice Admiral Merz. I am going to pass that to Secretary 
Geurts.
    Secretary Geurts. Sir, let me take that one for the record. 
I believe we have obligated all the fiscal year 2018 funding in 
there. But let me take that for the record and get you a full 
accounting of that action obligations to date, and then for the 
things we have not obligated, both the timing and where we plan 
to obligate those.
    Senator Kaine. Actually, we will submit that for the 
record. There have been challenges with the advanced weapons 
elevators on the CVN. Some of the technical difficulties seem 
similar to those that were experienced earlier on both the 
launch and arresting systems. I think that the Navy put 
together independent review teams to tackle those issues and 
provide solutions.
    Are we at a point where that may be needed on the weapons 
elevators, or are we in a position where we think the progress 
on the weapons elevators is satisfactory?
    Secretary Geurts. Yes, sir. So there are 11 weapons 
elevators. Each one of them we have to produce, test, and then 
certify. The first two of those have been produced. The first 
one has been through test and certification. The second one is 
about 94 percent through test. We are making progress to get 
through all the elevators during this availability.
    I am likely to do an independent review team, not on the 
immediate construction for CVN 78, but looking at the longer-
term sustainability, resilience, reliability, to make sure we 
are in a position to support those elevators for the long term, 
that we have got all the training, all the reliability built 
into those. We have done some mini independent reviews for the 
78 elevator design as they are. So we will not do one on the 
current efforts on 78. We have got a dedicated team working our 
way through those issues.
    Senator Kaine. And is your timing on that testing and 
certification on 78, you have this 12-month period where you 
are testing, do you think you will get through the testing and 
certification of all the 11 elevators in a yearlong period?
    Secretary Geurts. My current assessment is we will get 
through all the production and much of the testing. We may have 
some of the certification issues to go. I am watching that very 
closely, and we will keep you and your staff informed on 
progress there.
    Senator Kaine. Excellent. This last one is very--it is kind 
of a minor and technical thing, and yet it may portend a larger 
problem. We have got a company in Virginia called Collins 
Machine Works. They are in Portsmouth, and they have raised an 
issue that I think this kind of an interesting one, and the 
Committee has become aware of this.
    There is an issue affecting production of propeller shafts 
for the Virginia-class sub. This is a contractor that has used 
a commercial off-the-shelf product for which there was no 
military specification in terms of welding flux. The 
subcontractor then changed the mixture of the welding flux. It 
turns out now that it now does not really meet the 
requirements, and I think Collins has let the Navy know about 
this.
    I am assuming we sort of promote use of off-the-shelf 
technologies when we can, and yet in this instance, there was 
not a mil-spec for the off-the-shelf technology. And so there 
was a change of it by the supplier that ended up affecting the 
production of the propeller shafts for the CVN. Is that just 
kind of a normal kind of thing that you work through as it 
comes up, or does it portend something larger about use of off-
the-shelf commercial products?
    Secretary Geurts. I am not sure it portends to a specific 
issue with commercial off-the-shelf products. I think what it 
does show us is how fragile our supplier base is and how, if 
you have an issue with one supplier, it can cause larger 
programmatic issues.
    So, you know, one of the things that was in the industrial 
base report we did as part of the executive order, some of the 
work we are doing with the funding that this Committee has 
provided is really looking at the fragility of that supplier 
base, how do we bolster that up, where do we have single-source 
suppliers that we can bring on--you know, bring additional 
sources on to give us flexibility? One, so we are not caught 
with only one supplier in certain conditions; two, so we can 
grow at the production rate we need to grow at.
    Senator Kaine. I think that the point, Mr. Chair, just 
about the fragility of the supply base. If you have a supplier 
and they just change the mixture on the welding flux, and then 
that leads to the inadequate delivery of propellers for the 
subs, which then means the subs cannot do what they are 
supposed to do, I mean, it is pretty fragile when the changing 
of the mixture on welding flux ends up potentially blocking 
your ability to get propellers.
    Secretary Geurts. Absolutely.
    Senator Kaine. So I think using those--the funds that I 
asked about earlier to expand the submarine supply base is 
important to make sure that we are not leaning too heavily on 
something that is as fragile as you point out.
    Secretary Geurts. Absolutely, sir.
    Senator Wicker. The $450 million that you asked about 
earlier----
    Senator Kaine. Yes. Yes, I think that that can be used to 
address some of these challenges, I think.
    Senator Wicker. And you agree with that?
    Secretary Geurts. Yes, sir. We certainly agree. I mean, we 
have done a lot of work looking at common suppliers across our 
nuclear aircraft carriers and submarine programs and, actually, 
the support of the Committee here, both making sure that they 
are--the suppliers are ready to go and that we can take 
advantage of doing common buys across those programs so that 
supplier sees a more steady stream of planned and predictable 
work.
    It is challenging enough at the prime level when programs 
start and stop and move around. It gets really challenging in 
the second- and third- and fourth-level suppliers to be able to 
deal with changing profiles and changing requirements. So the 
efforts the Committee has done here to help us in that regard 
will pay off big as we continue along on these important 
programs.
    Senator Kaine. Thank you so much. Thanks, Mr. Chair.
    Senator Wicker. Mr. Secretary, you answered Senator Kaine's 
question about the troubling issue of the advanced weapons 
elevators. Let us get your thoughts on three others that are 
significant risks in the Ford-class. The electromagnetic 
aircraft launching system, the advanced arresting gear, and the 
duel band radar--how are we coming on those?
    Secretary Geurts. Sir, I would say of all of the 
technologies on the CVN 78, of which there were many we have 
proved out on this lead ship, the weapons elevator is the one 
that is last one for us to get tied up and work our way 
through. I think we have got a path there.
    On both the EMALs program, both the launcher and the 
arresting gear, we have had over, I think, 747 both catapults 
and traps on the CVN 78 during its 81 days----
    Senator Kaine. I hope the numbers were equal of the 
launches and the----
    Secretary Geurts. Yes, they were. They were, sir.
    Senator Kaine. Relatively, you know----
    Secretary Geurts. Relatively, 24,000 cycle events of that 
equipment on our shore-based test site there. So we are feeling 
pretty confident on both of those systems, both on catapults 
and the arresting gear there. Duel band radar, again, making 
good progress there. I do not see any major technical issues 
with that system as well.
    And then, as we look toward CVN 79, we are seeing fairly 
drastic reductions in labor hours. HI has proven that once we 
get this design nailed down, their ability to be efficient in 
producing those, we are seeing 16 percent less production labor 
hours on the second carrier in that class than the first one. 
And so, as we get that design locked down, the efficiencies 
that we expected to see are bearing out in the production 
phase.
    Senator Wicker. Are we going to be glad we went with the 
EMALs and advanced arresting gear?
    Secretary Geurts. Yes, sir. The challenge with the legacy 
systems, one, are, you know, parts and being able to produce 
those, but for the carriers of the future to be able to launch 
everything from fairly heavy fighter craft and some of the 
others to very light systems like the MQ-25, you need these 
systems to have the range of capability you need to launch that 
different kind of air wing of the future. And so, while, yes, 
there certainly have been technical challenges we have had to 
work through, it really opens up our ability to operate a wider 
variety of aircraft from the deck, both manned and unmanned, 
which I think is going to be critical to those carrier 
effective operations as we look to the future.
    Senator Wicker. Thank you.
    Let us talk about frigates. We are supposed to do a 
competitive award in 2020. Please update the Subcommittee on 
the Navy's acquisition strategy for the new frigate. Is the 
intent still to award the contract based on full and open 
competition?
    Secretary Geurts. Sir, absolutely. We are marching right 
along the schedule that we briefed earlier. And recently, the 
CNO and I both validated the frigate requirements. So we have 
got those requirements now locked down. That was per the 
schedule we have. We are drafting the RFP, which we will--
request for proposal, which we will get out to industry here 
this spring. That will give us time to get additional feedback 
from them. We have been interacting them throughout this whole 
design process as we have looked at all the requirements to 
make sure the requirements were affordable.
    That draft RFP will then lead to an RFP we plan to release 
at the end of this fiscal year, which will give us a full year 
then to award that competitive contract, a full and open 
competition for the frigate program. So that program remains on 
track, and I am confident we will execute that to plan.
    Senator Wicker. Now, on the LCS, the Congressional Research 
Service noted that the Navy did not perform a formal rigorous 
analysis to determine the right approach to addressing the set 
of capability gaps and mission needs with regard to the LCS. 
How are we going to keep from repeating this experience with 
the new frigate, and do you challenge to CRS in their 
conclusion?
    Secretary Geurts. Go ahead, Bill.
    Vice Admiral Merz. Sir, I will take that one. So, regarding 
the CRS Report on the LCS, no, we do not challenge it. We took 
some lumps on the LCS. We learned a lot. I am personally a fan 
of that ship and that ship class. I think it has tremendous 
utility, and we will come through all of that.
    I will tell you a lot of lessons learned we rolled into the 
frigate process. The frigate process is a new process for us. 
We brought industry in early to discuss how these requirements 
may play out, using their expertise to really discover the art 
of possible before we set the requirements.
    It created some anxiety up front, a lot of give-and-take. I 
think in the end, industry is happy. We are getting, at least 
all the vectors are, a much more lethal ship for the price 
point, and simply because instead of just levying requirements 
on industry, we are working with them as partners ahead of the 
requirements process. So I think all of that is a much 
healthier approach to avoid some of the pitfalls we had with 
some of the earlier classes.
    Senator Wicker. Can you describe the Navy's vision for the 
future surface combatant force, Admiral? To what extent does 
extending the service life of the Arleigh Burke-class 
destroyers affect the timeline for procuring the next large 
surface combatant?
    Vice Admiral Merz. Yes, sir. I touched on that a little bit 
earlier when I was talking about the spectrum of things we can 
influence over time. And the piece about the large surface 
combatant, about making it as an adaptable platform as we can 
to take advantage of these much more quickly churning 
capabilities that we are going to have to field. And really, 
adapt it in the timeframe of one maintenance cycle. Not a dry 
dock, not an overhaul, but we can do these pier side, we can 
outfit these ships and move them out.
    The Arleigh Burke is a fantastic ship. Matter of fact, the 
Flight III that we are delivering soon is going to be pretty 
much the most capable warship on the seas. The problem with the 
Arleigh Burke is she is full. We really do not have much room 
to expand or modernize her much beyond her current platform.
    Matter of fact, she is capable to the point now that the 
next large surface combatant is probably going to pick up right 
where we left off with the Arleigh Burke. So there is this very 
nice evolution between the two ships. When we are testing out 
the technology on the Arleigh Burke, the adaptability concept 
of the next generation of large surface combatant, I think we 
are going to be in a much better position to be a lot more 
agile, both on industry side and on the warfighting side with 
this.
    Senator Wicker. What would be the timeframe, generally 
speaking, of this next generation?
    Vice Admiral Merz. It is a two-phased approach. The first 
one, early 2020s--2023, 2024--and then a follow-on version in 
the late 2020s, really depending on how this first phase goes.
    Senator Wicker. Senator Shaheen?
    Senator Shaheen. Thank you, Mr. Chairman.
    Earlier today, the Full Armed Services Committee heard from 
the National Defense Strategy Commission on their report about 
the NDS. And one of the comments that Admiral Roughead made was 
that it had taken 15 months to get the John McCain back into 
operation, and it was in the context of suggesting that we 
cannot afford to have that kind of an asset down for that long 
a period of time.
    If we look at history, at the Portsmouth Naval Shipyard 
during the 5-year span of World War II, they produced over 70 
submarines. Four of them were launched on one day in 1944. So I 
appreciate that we are in a totally different time, and 
technology is different, but what are we going to do about that 
concern that we cannot have that major an asset down for that 
period of time and expect to be competitive?
    Secretary Geurts. Yes, ma'am. I think--I agree with the 
concern that we have got to be able to not only have the assets 
to start the fight or withstand the first day of the fight, but 
withstand the sustained fight. Part of what we are looking at 
as we relook at both our public shipyards and how we do private 
repairs is to get more stability into those yards and get them 
all to the point where they are capitalized to be able to 
operate at the pace we need them to operate with.
    Without even a wartime scenario, just looking at the amount 
of ship repair work we are going to have to do, I mean, that is 
going to continue to accelerate at the same pace as we are in 
the shipbuilding. So one of the things we are going to do this 
year is a 30-year ship repair sustainment plan so we can really 
look at where do we have any limitations in the system, whether 
that is capabilities like dry docks. Are we maximizing use of 
all the capacity we have? And then are there things we could do 
better on the acquisition strategy side that would enable some 
more stability in those both public and private yards so they 
could stabilize their workforce?
    Our biggest challenge--you know, facilities is a challenge. 
Our largest challenge is in the workforce----
    Senator Shaheen. Right.
    Secretary Geurts.--end of business. And if we cannot get 
stability, both in new construction and in repair, then we will 
really struggle to attract the workforce and retain the 
workforce we need.
    Senator Kaine had a great session down in the Norfolk area 
just on workforce, and if you look at the numbers that we have 
to hire, it is a pretty staggering number. Now, if we can get 
to a sustainable infrastructure, both on the public side and on 
the private side, that can handle that load, that gives a lot 
more flexibility to handle unplanned work and work that in.
    Senator Wicker. Will that----
    Secretary Geurts. Right now, we are right along the edge. I 
am sorry, sir.
    Senator Wicker. Tell us about that number. Since we are 
talking about that, what information did Senator Kaine elicit 
there about the staggering number----
    Secretary Geurts. So Senator Kaine had a great session just 
between public yards and the private yards and the local 
community. I would say it is the same in all of our 
shipbuilding towns of how do we work together to attract, 
train, and retain the workforce? Whether it is in the public 
yards or in the private yards, whether it is new build or 
repair, we have got to look at that in aggregate.
    Our biggest challenge in terms of achieving velocity is in 
workforce. I think over 50 percent right now, 56 percent in the 
public yards in terms of workforce have less than 5 years' 
experience. So not only do we have to attract those workers and 
get them in the system, then we have got to figure out how to 
more effectively train them.
    I would say Portsmouth is leading----
    Senator Shaheen. Right. The challenge is there.
    Secretary Geurts.--leading the fleet in terms of some 
really progressive ways to rapidly train. The challenge is, 
circling all the way back to BCA, drastic cuts where we have to 
turn that whole pipeline off. And to Admiral Merz's point, you 
do not just a year later turn that back on. That is a decade--
you are going to create a decade problem that will cause 
another decade to turn around.
    My hope is, unless we address this growing need, we will 
not handle the current workload, much less emergent work that 
comes out of, heaven forbid, an accident or wartime repair.
    Senator Shaheen. I agree. Thank you.
    Vice Admiral Merz. Ma'am, I will just----
    Senator Shaheen. Thank you, Mr. Chairman.
    Vice Admiral Merz.--pile on to say I have a lot of personal 
experience with Portsmouth Naval Shipyard. It is a very solid 
citizen as far as repairing our ships. On their behalf, I would 
tell you the McCain is a tough test case. She is not a typical 
repair. She is not a----
    Senator Shaheen. Yeah, I was just--I was not suggesting 
that McCain----
    Vice Admiral Merz. Yes ma'am.
    Senator Shaheen.--was an issue for the Portsmouth Naval 
Shipyard, but just that it reflects the challenge that we have 
got.
    Vice Admiral Merz. The McCain was somewhere between 
reconstruction, twisted steel. She was a mess, and she took a 
lot of bit--a lot of bit of work.
    Senator Shaheen. Thank you.
    Senator Wicker. Senator Kaine?
    Senator Kaine. Well, if I could, I would just like to thank 
Secretary Geurts because he, at my invitation, came down. And 
just to kind of share, after we got the NDAA done and we had 
the commitment to 355 ships, I think everybody in my 
shipbuilding community was feeling great. I am sure your 
communities were feeling the same way.
    But we kind of needed a scared straight moment where these 
will not build themselves. And so, we had, you know, the 
workforce needs of a 355-ship Navy, and we pulled together 
public and private shipyards, both the builders and repairers, 
and then all of the K-12 systems. There is probably about 10 
jurisdictions with K-12 systems, community college, 4-years. 
Secretary Geurts and others came down and said if we are going 
to do this, let me tell you what the need will be.
    The head of the Huntington Ingalls shipyard said, ``Well, 
the shipbuilders that will be building these are in pre-K right 
now, but if we are not equipping with the skills or having 
guidance counselors kind of position them in this direction, 
then we will not meet the challenge in Hampton Roads, and we 
might not meet the challenge as a Nation.''
    Senator Wicker. Do you agree, Secretary, that around 
Senator Shaheen's shipyard is really very, very cold there a 
lot of the time?
    [Laughter.]
    Senator Wicker. At Senator Kaine's place, the traffic 
congestion is just awful trying to get to and from work. You do 
not have to answer that question.
    [Laughter.]
    Secretary Geurts. Sir, my family is from Green Bay. So 
those are both very warm places.
    Senator Kaine. Well, and I would just say, it turned out to 
be just what my community needed. That June 8th symposium has 
generated a follow-on collaboration, and I am attending the 
opening of a new technical institute connected to Tidewater 
Community College next Monday? Yes, I think next Monday, where 
they will be training a lot of people in the trades that would 
be relevant to this, but I think the workforce needs are going 
to be massive.
    And to balance--the other thing I will give Secretary 
Geurts real compliments on, the notion of a 30-year ship repair 
plan. It is one thing to do a 30-year shipbuilding plan. That 
is fantastic. But the notion of ship repair, which was quite 
affected by sequester, all the readiness stuff--``We will defer 
maintenance on this for a while.'' And it really put the 
workforce in a position where they did not know what was coming 
and when it would come and how would sequester affect them.
    The idea of trying to do a ship repair plan over the same 
time horizon you are doing new construction makes perfect 
sense. And that was also really music to the community's ears 
to hear a degree of foresight going into the repair side. I 
think all of our communities would benefit from that.
    Last thing I will say, too, is I do not mean to throw a 
competitor into the mix, but I toured the Navy base in Rota on 
November the 9th, which was a Friday morning. In Rota, a lot of 
American ship repair is done by Navantia. The Navy leadership 
at the Rota base talked about, you know, we see our ships 
repaired in public yards and by private shipyards in United 
States and even by Navantia, and they were giving Navantia a 
lot of props and saying, ``Hey, they built the Nina, the Pinta, 
and the Santa Maria. They know what they are doing.''
    So there are good ideas out there if you are trying to do a 
30-year ship repair plan, and all the good ideas are not 
necessarily all ours. So we ought to be trying to take good 
ideas from wherever we can find them.
    Secretary Geurts. Absolutely, sir. And again, I think if we 
can clearly show that demand signal with some stability, then 
we will get a number of players interested in that. Where we 
are doing a lot of work on our side is really looking at how we 
contract for those ship repairs and making improvements to 
that. Both for a stability standpoint, we are already seeing 
some of our improvements having a drastic impact on reducing 
timeline and allowing more players to come in to create a 
competitive and capable field. Because again, there is plenty 
of work coming.
    We struggled a little bit over the last several years with 
the current amount of repairs. That is going to--as we talked 
about, that is going to continue to grow. So we have got to pay 
very close attention to that.
    Senator Kaine. Excellent.
    Senator Wicker. General Berger, thank you for listening to 
us for an hour. The minimum Navy requirement for amphibious 
ships is 38. Combatant commanders need more than 50 amphibious 
ships on a day-to-day basis. The current inventory includes 
only 32 amphibious ships, with just 10 to 15 operationally 
available on a given day.
    What is being done to close this gap? And let me ask you 
about either a multiyear or block buy of LPDs.
    Lieutenant General Berger. A couple of parts of the answer 
to your question, Senator. First, the 38 ships, as you 
mentioned, is the agreed number based on a capacity to land two 
Marine expeditionary brigades. The National Defense Strategy 
requires us to compete and deter and then fight if we need to, 
which is why the combatant commanders, as you state, say it is 
higher than 38. Without--if it is not going to go any higher 
than that, then that means some risk somewhere in the globe 
that the Secretary and the Chairman have to balance.
    What we are doing to close it, what the Navy is doing to 
close it on the big decks is the next LHA follow-on to the 
American Tripoli, absolutely critical, and earlier is better 
from a Navy/Marine Corps standpoint because we need 12 big 
decks. They are an incredible platform, and anything we can do 
to move that, accelerate that, is a good thing.
    On the smaller end, the LPD Flight IIs, which is a follow-
on, of course, to the San Antonio-class, absolutely brilliant 
use of a hull form that both the Marine Corps and Navy are 
happy with, we are comfortable with in taking advantage of that 
hull form to replace the LSDs, which are 35, 40 years old. 
Absolutely critical.
    Senator Wicker. Maybe, Mr. Secretary, on the Flight II--
does the Navy plan to buy one ship at a time or block buy, and 
is multiyear procurement an important tool in cutting costs and 
stabilizing supplier base? Does the Navy plan to use the $350 
million to buy multiple sets of long lead time material?
    Secretary Geurts. So, generically, we have used block buys 
and multiyears extremely effectively here with the support of 
the Committee to both accelerate production and save costs. On 
DDG 51, we will save $700 million on that multiyear.
    In terms of the LPD one, it is a little early right now, 
pre-decisional in terms of what we will do with that funding 
until we sort out our 2020 budget. I will be happy to come 
brief the Committee once we get the 2020 budget locked down, 
and we will describe the strategy we have when we get the 
President's budget over here in February.
    Senator Wicker. Okay. Senator King?
    Senator King. Thank you, Mr. Chairman.
    I apologize for being late. There is no effort around here 
to schedule hearings in any rational way. If you have a 
computer system that can do that, let us know.
    Admiral Merz, the Zumwalt is being armed, if you will, 
combat system activation in San Diego. I guess my first 
question is how is that going?
    Vice Admiral Merz. It is going well. As you know, we did a 
review of the complete requirements of the DDG 1000, the 
advanced weapons system, the advanced gun system, and then the 
combat system, and in the end, we decided to split the two 
programs.
    Senator King. Can you--is your mike on?
    Vice Admiral Merz. Yes, sir, it is. I will lean forward 
here.
    Senator King. Thank you.
    Vice Admiral Merz. We determined that the best future for 
that ship is to get it out there with the capability that it 
has and separate out the advanced gun system, leaving 
everything else in place, very capable platform with or without 
that gun. We will be developing either that--the round that 
goes with that gun or what we are going to do with the space if 
we decide to remove that gun in the future.
    The rest of the ship is doing fine. It is still on track to 
be operational in 2021 to the fleet. And then in the ensuing 
cycle to get it on deployment thereafter.
    Senator King. I understand it has basically been re-
missioned from land attack to strike--sea-based strike. Is 
that--can you define that?
    Vice Admiral Merz. It has been re-missioned to a strike 
platform, whether sea-based--sea targets or land targets. It 
can handle both, and that takes advantage of its tremendous 
arsenal of VLS cells. The other benefit of the Zumwalt-class is 
those VLS cells are larger than any other surface ship VLS 
cells. So it opens up an aperture of more weapons options for 
that ship.
    So this is--this was thrust that drove us to, hey, let us 
get the ship out there. Let us not hold it back because of the 
projectile challenges. And it is a science and technology 
challenge. It is not an engineering problem. We just cannot get 
the thing to fly as far as we want. So we are going to continue 
to work on that and take advantage of the strike capabilities 
with the combat system of that ship.
    Senator King. If my next question is getting into a 
classified area, please tell me. Given the power capabilities 
of that ship, is this--do we see this long term is an 
opportunity for directed energy or other kinds of nonprojectile 
or non-expensive projectiles?
    Vice Admiral Merz. Yes, sir, we do. Before you arrived, I 
talked about how we are moving to an era of new ship 
adaptability. I would tell you Zumwalt is kind of the case 
study for that. She has the balance of what we call SWAP-C, the 
space, weight, power, and communications that allows us to 
expand the ship over time. So she is going to be a candidate 
for any advanced weapons systems that we develop.
    Senator King. Particularly given the power generation.
    Vice Admiral Merz. Exactly right. Exactly right.
    Senator King. General Berger, do you have any concerns 
about this re-missioning? Does this is undermine the land 
strike capacity that the Marines might have been counting on 
from this ship?
    General Berger. Senator, I do not think it replaces it at 
all. I think any forward commander is going to ask for all the 
capability he can have, and the Zumwalt adds to an arsenal that 
is already there. I do not look at it as a challenge or a 
competitor at all. It is--if you were in PAC Fleet or PACOM, 
this is more tools in your toolkit.
    Senator King. Secretary Geurts, talk about combatants--
surface combatants. There is always a trade-off between 
industrial base and absolute lowest price. Describe you and 
Secretary Spencer's view of how do you make that trade-off to 
be sure that we are maintaining the industrial base that is 
necessary going forward.
    Secretary Geurts. Yes, sir. I mean, obviously, there are 
all the things we consider as we look at different systems and 
look at the industrial base. We aim to put together strategies 
that enable us both to keep cost competitiveness, as well as a 
predictable, stable industrial base.
    So I think, as you saw, we adjust--by using the example of 
the DDG 51, we adjusted from what used to be kind of a pro-
based approach to, okay complete for quantity, but each will 
have enough quantity guaranteed to have a stable production 
line. Then over time, we will compete. So, in our case, we did 
not put the option ships into that 10 multiyear because 
depending on when the timing was, depending on the situation, 
we may make different choices on each of those option ships. So 
that was----
    Senator King. But is this kind of calculus going to be 
applied to the option ships?
    Secretary Geurts. Sir, we will always look at both pieces 
of that. I have flexibility depending on--depending on the 
situation to make determinations along any of those lines.
    Senator King. That me ask about the frigates. You have 
taken a different approach rather than a blank sheet of paper. 
I cannot remember the term. ``Parent craft'' I think is the 
term. Do you anticipate significant savings from that approach? 
It makes sense to me. I will preface the question, but----
    Secretary Geurts. Yes, sir. I think two things that are 
unique in that acquisition strategy that I think will bear 
fruit for us. One is specifying that we needed to have a parent 
design to then reduce the risk in the timeline associated with 
testing.
    Senator King. The timeline is very aggressive.
    Secretary Geurts. Yes, sir. The second piece, which I think 
has been paying big dividends for us, is having an 
interactive--an iterative requirements process. And so, the CNO 
and I just slapped the table on the requirements for the 
frigate.
    Senator King. You have closed the door?
    Secretary Geurts. We have closed the door, but that was 
after almost a year of iterative conversation with all the 
industrial competitors where we looked at the cost, the risk, 
the schedule impacts of any of these potential requirements 
changes.
    So between the requirements side and the acquisition side, 
which included the industrial partners, we had a great back-
and-forth dialogue so that everybody understood going into the 
competition exactly what was expected. And we understood, with 
much more precision than we have in the past, the cost and risk 
to any of our requirements. So that we, in the end, created the 
best balance of affordability, achievability, and operational 
effectiveness. That was a joint effort between the requirements 
and the acquisition side.
    Senator King. I compliment you on that. I think closing the 
door on the requirements at some point is one of the ways that 
we can defeat the problems of procurement and cost. How many of 
these is the bid going to be for? How many frigates?
    Secretary Geurts. So the initial bid will be for the lead 
ship and then nine additional ships. So the first 10 of what is 
currently a requirement of 20. That requirement may get 
revisited over time.
    Senator King. I understand that is winner-take-all. Out of 
the five bidders, one yard is going to get all that business.
    Secretary Geurts. That is the current acquisition approach. 
Yes, sir.
    Senator King. Why that approach? I mean, you are having 
five yards, highly qualified, a lot of work, a lot of 
intellectual input, why not some kind of division of those--of 
that buy in order, again, to get back to the question we were 
discussing about industrial base?
    Secretary Geurts. Yes, sir. It is certainly a trade-off. I 
think the challenge is with the production rate that we 
currently have laid into the shipbuilding plan, one would have 
to really look hard is do we have--is there enough work to 
sustain two yards in parallel with that?
    Now, obviously, if we revisit that production rate and 
production ramp, there are certainly opportunities to have more 
than one yard produce that. Part of our strategy will be to 
produce a data package that would allow, should we want to go 
down that path, additional producers of the ship. We will have 
to balance that. So that will be a cost-effective----
    Senator King. Plus, for the second round, you would have 
additional competition. You would have additional competition 
plus industrial base maintenance. I hope that is at least in 
the discussion.
    Secretary Geurts. Yes, sir. We will continue to look at 
that as we go forward. Our current focus right now, and I am 
happy to report we are on track in terms of locking the 
requirements down. We will have a draft RFP out this spring. We 
will have a final RFP out by the end of this fiscal year, which 
will put us in conditions to effectively award that initial 
contract in October of 2020.
    Senator King. All right, thank you. Thank you, Mr. Chair.
    Senator Wicker. Senator Blumenthal?
    Senator Blumenthal. Thank you, Mr. Chairman. Thank you for 
having this hearing, and thank you, each of you, for your 
service to our Nation and for being here today.
    I was very pleased, Secretary Geurts and Admiral Merz, to 
see in your written testimony that the Columbia-class program 
remains the Navy's number-one acquisition priority and is on 
track to start construction at the beginning of fiscal year 
2020 to 2021. I assume you would agree with me that it is 
vitally important that that program remain on track.
    Secretary Geurts. Yes, sir. That is my number-one priority.
    Senator Blumenthal. That is the reason that I championed an 
additional $237 million in this year's NDAA in advance 
procurement above the President's Budget to address the long 
lead time that is required for this kind of program, adding 
capacity and capability to sufficiently prepare the submarine 
industrial base for that very substantial increase in work. You 
cannot hire people necessary for that kind of program just by 
putting an ad in the newspaper. Correct?
    Secretary Geurts. Yes, sir. The supplier base will be one 
of the pacing items for that program, particularly as we look 
at that program, two Virginias and four aircraft carrier. We 
are looking across that base all the time.
    Senator Blumenthal. Would you support increased advance 
procurement funding for that program?
    Secretary Geurts. Sir, I would say in advance procurement 
funding and anything we can do to help the supplier base will 
drastically reduce risk going forward. What we are seeing in 
most of our construction programs is a key risk is supplier 
fragility, either single sources or single producers where we 
have to ramp up production.
    Senator Blumenthal. Thank you.
    I am sure that you have read repeatedly and carefully the 
GAO report entitled, ``Actions Needed To Address Costly 
Maintenance Delays Facing the Attack Submarine Fleet.'' I know 
Senator Shaheen asked you about maintenance issues, and others 
may have as well. The report concluded, ``The Navy has not 
effectively allocated maintenance periods among the public and 
private shipyards to limit attack submarine idle time.''
    As you are well aware, the GAO estimates that since fiscal 
year 2008, 14 attack submarines have spent a combined 61 
months, 1,891 days, idling while waiting to enter shipyards for 
maintenance. Meanwhile, Electric Boat, which has additional 
capacity to take on maintenance availabilities, is being 
underutilized, which harms our industrial base because it means 
that those idle workers will go elsewhere.
    In fact, without additional work, Electric Boat's workforce 
will decline just as it needs to ramp up the workforce for 
Columbia-class production. They need to hire an additional 
15,000 new employees over the next 10 years.
    So we need action now to address the backlog that is bad 
for our national security and the harmful impact on our 
industrial base. We have been talking about this maintenance 
backlog for over a year with no clear solution in sight. When 
will the Navy release a plan to provide maintenance work to 
Electric Boat in order to help manage their workforce and the 
maintenance that needs to be done?
    Secretary Geurts. Yes, sir. Attack submarine availability 
is a critical issue for us, particularly as we have the bathtub 
approaching. And so, it is one of the primary focuses for 
myself and Naval Sea Systems Command.
    Currently, we have four submarines in maintenance 
availabilities at a combination of Electric Boat and Newport 
News. We are going to award at least two additional 
availabilities into the private yards to better balance that 
out. But going forward, you know, under the new role this 
Committee provided me to oversee sustainment readiness, that is 
really--I am really focusing on getting predictability and 
advanced planning in the readiness area for ship repair, with a 
particular focus on submarines.
    And not only look at making sure we have got the public and 
the private yard balance correct, but we do it in a predictable 
manner so that the private yards can facilitize and be prepared 
for it. Ideally, my hope would be that we would have an 
enduring capability at both the public yards and the private 
yards for submarine maintenance repair.
    Senator Blumenthal. Can you tell us when you will be making 
those awards?
    Secretary Geurts. So the first four are currently underway. 
We will be, I believe, this summer releasing, this spring/
summer the RFPs for those next two maintenance availabilities. 
Then we are going to continue to look out over time. I can give 
you--if you like, I will take a question for the record on the 
exact timing of each one of those.
    But my strategic approach to this is balancing out that 
work and getting predictability into the maintenance planning 
so that we have capacity to get those ships both in and out of 
those availabilities on time to give the combatant commanders 
the capability they need.
    Senator Blumenthal. Two of those awards will be for private 
and two for public? Is that the----
    Secretary Geurts. Of our upcoming availabilities, at least 
two of them will be to the private yards.
    Senator Blumenthal. And will one of those yards be Electric 
Boat?
    Secretary Geurts. We are still sorting out exactly our 
strategy, whether we are going to compete those two private 
availabilities or award those sole source.
    Senator Blumenthal. And you would be able to provide more 
information in a question for the record?
    Secretary Geurts. Absolutely, sir.
    Senator Blumenthal. I appreciate your----
    Secretary Geurts. Absolutely.
    Senator Blumenthal.--responding in that way. As you know, 
often the cost is lower in private yards like Electric Boat 
than it is in the public yards. The GAO concluded that private 
shipyards were 24 percent less expensive from 2010 to 2017 for 
overhauling Los Angeles-class subs. Has that been your 
experience?
    Secretary Geurts. That has not been my experience, per se. 
But I guess what I would say is not taking on which is cheaper 
than the other, every one of them will benefit through better 
planning, more advance planning, and having a strategy 
everybody can plan to and then execute, versus right now, we do 
not--we have not provided the planning horizons, which then 
drives up the cost on either side.
    Senator Blumenthal. I think that strategic change in 
direction will be welcome to everybody on this Committee 
because we are all concerned about the maintenance backlogs 
that have occurred, which pose a danger to our national 
security as well as our fiscal health. And I appreciate your 
providing any additional information.
    Secretary Geurts. Yes, sir. And we are going to absolutely 
need those private yards as we look to service life extend some 
of the Los Angeles-class ones by re-coring those. That will put 
additional pressure on the public yards. And so, again, my 
intent is to with this 30-year ship repair plan, get more 
ahead--get ahead of these looming availabilities and repair 
cycles so that we can put the right strategy in place, which 
than enables us to more cost effectively deliver those 
availabilities and get those ships back in the fleet.
    Senator Blumenthal. Thank you, Mr. Secretary.
    Thank you, Mr. Chairman.
    Senator Wicker. General Berger, let us talk ship to shore. 
Tell us how we are doing on the Marine air/ground taskforces, 
and with regard to the ship to shore maneuver and the vision 
for the future, what are our gaps and shortfalls?
    General Berger. Senator, the connectors that you spoke of, 
as important as they are right now, they are going to be more 
important in the future. In a peer competition world which you 
alluded to in the beginning, the concept for the Navy's 
operations and the Marine Corps naval force forward, we are 
going to be more distributed. The more distributed we are, the 
more important connectors are.
    The LCACs we have right now that have been SLEP'ed once 
already need to be replaced, and they are being replaced. They 
have to be. The LCUs that are 45, 50 years old have to also be 
replaced. Both are going to be critical to move the naval 
force, the Marine MAGTFs around the naval force, both from ship 
to shore, shore to shore, and shore back to ship.
    So those two--the programs for the LCAC replacement and for 
the LCU replacement, absolutely essential.
    Senator Wicker. Okay. Well, let me move to A2AD, General 
Berger, and Admiral, you may want to join in here. Much have 
been made of emerging anti-access and area denial, A2AD, 
capabilities of certain countries. To what extent are existing 
and emerging A2AD capabilities a concern for the amphibious 
assault?
    General Berger. I think the A2AD threat, which is well 
publicized, drives you toward a place where amphibious forces, 
the amphibious capability is even more important. And the 
reason for that is you are going to need--in the layered 
offense and defense, you are going to need forward forces, 
inside forces that are survivable and lethal both.
    So the ability to project power from a sea base, a 
sovereign ship, a platform from the sea, onto either an 
advanced naval base or to secure a commons area--a strait, for 
example, that might be contested--any of those are possible 
missions that the maritime component commander might need to 
do. I mean, his job one is to keep the commons open for 
friendly use and perhaps deny them from a threat.
    So the ability to--if you did not have an amphibious force, 
said another way, Senator, if you lack that capability, then 
your only option is to bring it from some other land, some 
other place.
    Senator Wicker. Are we talking--is our assumption 5 miles, 
25 miles? What is the distance?
    General Berger. It is going to be completely threat 
dependent. It is going to be dependent on the operating 
environment that that commander sees in front of him.
    Senator Wicker. Admiral, do you have anything to add?
    Vice Admiral Merz. I would only add that A2AD is one of 
those peer competitor capabilities, both ours and theirs, that 
we track closely. This will rapidly go to a higher 
classification, but it is probably less range dependent than 
sector dependent. That is kind of how we look at it. And the 
ability to operate in those environments creates advantages and 
disadvantages, depending on how you are outfitted to deal with 
it.
    Senator Wicker. Senator King?
    Senator King. Thank you.
    We are doing multiyear procurement block buys for 
combatants, maintaining industrial base. Do we have a plan on 
recapitalizing ready reserve force? We can have great 
combatants, but if we cannot get the supply to them, that is a 
problem. Where does that stand?
    Secretary Geurts. I will talk about it. I will say 
generically, and then Admiral Merz can talk about it from a 
requirements standpoint. I would say, yes, that is absolutely 
something we are going to have to work our way through in the 
coming years.
    Right now, we are looking at it in a combination of 
extending some service life extension of our current assets 
through the authorities given and through the Committee, some 
potential procurement of some used assets, and then looking at 
a future ship Common Hull--CHAMP program that could potentially 
provide some new build assets going into the future. And so, we 
are looking at all three of those lines of operation.
    On CHAMP, specifically, we are preparing by the end of the 
year to put an RFP out and bring on multiple potential builders 
to do similar to what we have done with frigate and get into an 
iterative requirements kind of solution space to try and, you 
know, lock down more of the specific requirements for that 
hull.
    Admiral Merz's team has been working on the requirements 
from a warfighting standpoint. This would enable us to do the 
same thing we did in frigate, bring in the industry team early 
and then get into some iterative design requirements trade-offs 
so that we could then set our final requirements for what a 
CHAMP program would look like in the outyears.
    Senator King. This is sort of a parenthetical, but we go 
home and are asked to defend the defense budget and the cost. 
And one of the things that I have tried to get across is we are 
recapitalizing a lot of--and the submarine is the biggest 
example and in the nuclear area, the number. It would be 
helpful, I think, if you guys could quantify that to some 
extent. In other words, what is ordinary cost of operations, 
and what is recapitalization? The Columbia-class would be the 
prime example.
    Because I think those are two different subjects that the 
public needs to understand that we are, in a sense, paying 
bills that have not been paid because some of these platforms 
are 40, 50 years old. And the Air Force, of course, we have got 
all kinds of situations where the planes are a lot older than 
the pilots. So that would be helpful, for the record, if you 
could----
    Secretary Geurts. Yes, sir. I would be happy to both answer 
that and then talk in those terms as we are going forward.
    Senator King. What is operation and maintenance versus what 
is recapitalization?
    Couple of other questions. On the cruiser, we are talking 
about--we are talking about the frigate. Are you thinking of 
following a similar program on the new cruiser that it might be 
a pre-existing design and rather than a clean sheet of paper?
    Secretary Geurts. Sir, I think we are on the early end of 
defining all of the parameters around that. Admiral Merz can 
talk from the requirements side. Their team has been working 
the initial requirements. We are starting to engage industry.
    Senator King. It just seems to me to the extent that we 
have hull designs, that we do not have to necessarily modify. 
That is a much more--that is better for the taxpayers. It is 
faster. I hope that is in the plan.
    Secretary Geurts. There are advantages to the degree that 
we have hulls that can meet the requirement.
    Vice Admiral Merz. Yes, sir. I mean, we were very pleased 
with how the frigate requirements definition phase went.
    Senator King. Can you come up a little closer?
    Vice Admiral Merz. That will certainly----
    Senator King. That will inform the process?
    Vice Admiral Merz. That will certainly inform the large 
surface combatant process. It really just comes down to the 
SWAP-C that we spoke about on the DDG 1000, whether or not in 
the requirements definition phase on whether or not we can 
generate a hull that is going to give us enough volume to 
evolve over time.
    Senator King. I hope that one of the requirements for all 
these new platforms is that they be easily modifiable.
    Vice Admiral Merz. Yes, sir.
    Senator King. That is a 50-year hull, but you might have 10 
years of software and then----
    Vice Admiral Merz. Sir, the way we say it is we cannot help 
that we make great ships that are around for 50 years, but what 
we can help is the ability to evolve them very quickly. And 
this whole adaptability piece is driving requirements.
    Senator King. I would think that would be a design 
criteria.
    Vice Admiral Merz. Yes, sir.
    Senator King. There was some testimony--not testimony. 
There was a question in the full Committee meeting this morning 
about the John S. McCain, and it is about to come back into 
service. It has taken a long time. Why did that take so long to 
get a ship--I mean, you could practically have built a new ship 
in the year plus that it took to repair that ship.
    Secretary Geurts. Yes, sir. And I think that points to our 
need for stable and predictable funding and programming that 
allows us then to build both the industrial base and the repair 
base that can handle the needs----
    Senator King. Was with a problem with--was there no place 
to fix it, or did it--it was just a yard that----
    Secretary Geurts. I think it was a--I think some of those 
repairs are more complex than they first appear looking at them 
from the outside. You know, Fitz has had some--you know, it is 
a is pretty tremendous job to repair some of it. There are some 
modernization that is also occurring ongoing with it. And then 
you have got to work it into a fairly constrained right now 
either new build or repair yard workforce and capacity.
    And so, my intent over time is as we look at this 30-year 
ship repair plan and 30-year shipbuilding plan, if we can 
provide stability in those efforts, we can get the workforce 
and the capacity built up, which then would allow us more 
quickly to address emergent work than we currently have right 
now with the----
    You know, if you look at the industrial base report we 
submitted to the President on the executive order, one of its 
findings was we do not have a lot of excess capacity either in 
new build or in repair. And so, when an emergent repair comes 
out that you were not planning for, you do not have a lot of 
assets to immediately throw in that without having impacts down 
the road.
    Senator King. One follow-up question, if I might, Mr. 
Chair? A more general question is availability, generally. I 
would appreciate it if you could supply for the Committee by 
class of ships what percentage of the fleet of that class is 
available at any given moment? In other words, is it 50 
percent, 60, 70, 80? I do not know.
    I would think would be interesting to know and important to 
know because if we are better--if we are able to keep our ships 
in better repair, it can be a savings in the long run. You 
could end up with the same combat power for less dollars if we 
maintain and life extend. So I would just like to know fleet 
availability along the various types of ships and any thoughts 
you have on it.
    Secretary Geurts. Yes, sir, happy to provide that for you, 
and we will provide it by each class of ship. Obviously, a 
key----
    Senator King. Do a comparison with the cruise lines ship.
    Secretary Geurts. Yes, sir. Lots of different----
    Senator King. Lots of differences.
    Secretary Geurts. Lots of differences, but there are 
certainly--and one of the things we have doing last year both, 
and particularly in aviation readiness, is taking best lesson 
learned out of that and bring them. We have had--we have 
relationships----
    Senator King. My sense is the private sector does a better 
job of their capital assets being online. I do not know, but 
that is the impression.
    Secretary Geurts. There are certainly opportunities to 
learn from all that. We have relationships with--in fact, we 
have got a team that is going to go down and has a relationship 
with Carnival Cruise Lines to look at that very notion.
    Senator King. So my question was not completely stupid?
    Secretary Geurts. No, sir. Absolutely not.
    Senator King. I was worried.
    Secretary Geurts. We will----
    Senator Wicker. Can you put a percentage on how stupid the 
question was?
    Senator King. Yes, that is right.
    [Laughter.]
    General Berger. Could I just add one thought? Because we 
talk about this all the time--the snapshot, whether it is 
aviation or ships, that we provide to you is going to be skewed 
because we deferred maintenance for years.
    Senator King. Yes.
    General Berger. So the snapshot will look not--we will not 
be happy with that snapshot because we knew--when we ran those 
ships and planes hard for a decade, we knew we were going to 
play a price on the backside.
    Senator King. Thank you. Thank you, Mr. Chairman.
    Senator Wicker. Just a follow-up, Mr. Secretary, your 
written statement describes corrective measures being taken to 
address recent issues of welding quality and inadequate testing 
of missile tubes for the Columbia-class. Can you provide your 
assessment of the root causes and program impact?
    Secretary Geurts. Yes, sir. The challenges we had with 
Columbia were on the missile tubes. We had similar issues on 
missile tubes on the Ohio program decades ago. So we had moved 
those missile tubes very early in the program to prove out the 
fabrication welding of those assets.
    When we got into looking at the first set of tubes that 
were manufactured, there were issues with improper inspection 
of welds, which led to missile tubes that did not fully meet 
all of the specifications in terms of those weld designs. So 
that was an issue at a supplier. The supplier did not inspect 
properly the welds. Those then got shipped to the production 
facility.
    Senator Wicker. What were the consequences to that 
supplier?
    Secretary Geurts. So that supplier is on a fixed-price 
contract. So that supplier--subcontract to EB. So that supplier 
now is repairing all of those missile tubes.
    Fortunately, we had programmed those mission tubes with a 
lot of margin in terms of our schedule. So we currently assess 
we still have 12 to 13 months of schedule margin even with all 
of the missile tube repairs. And so, we do not assess that will 
impact the Columbia build schedule, which is critical for us. 
But again, it is a very important issue.
    One of the issues that points to, and we have had a 
couple--we have talked about the Collins shaft issue as well--
is the criticality of the supply base. In the industrial base 
report, I think since 2000 it documented over 20,000 they call 
them establishments that have disappeared from the shipbuilding 
industrial base, really pointing to that fragility in the 
supply base. And so, that is one of the areas we are really 
focused on ensuring, one, we have got suppliers that are the 
building the quality products we need, and two, anywhere we 
have some of these single-point suppliers we try and build up 
their robustness.
    Senator Wicker. You guys are in the building business and 
hardware business, not so much in the personnel business, 
except that you really are. What quality of young Americans are 
stepping forward now, General and Admiral? And we are asking 
them to handle some pretty state-of-the-art, sophisticated 
stuff. Am I correct?
    Vice Admiral Merz. Yes, sir. Our talent is eye-watering. 
And I do a lot of public speaking----
    Senator Wicker. Eye-watering, yes.
    Vice Admiral Merz. Sir. And whenever the question comes up 
of the quality of American youth, I just simply say come to sea 
with us and see them. Keeping them from getting bored is 
probably the biggest challenge. I mean, they are very active. 
They are very multi-task. The grow up in an environment to 
communicate across multiple domains simultaneously. In a long 
story, I can tell you about my daughter that I use as an 
example, but they truly are just top-shelf individuals.
    The challenge is it is only 1 percent of Americans qualify 
to serve in the military. All services are competing for that 
talent. It is often the same talent pool that the engineering 
companies are competing for. So attractive pay, benefits, the 
training, those are the things we continue to press forward to 
draw on the talent we need. It is an all-volunteer force, and 
that makes it a competition.
    Senator Wicker. General, anything to add?
    General Berger. I think Secretary Geurts spoke earlier 
about not taking the industrial base for granted. He did not 
say it in those words, but that was what he inferred. And I 
think you can say the same thing about the recruiting effort 
that the services have to do. That is an every day, every hour 
of every day effort. Because just like the Admiral said, there 
is a lot of competition out there for the same talent.
    I agree with him that the caliber of high school graduates 
and college students that come into the service, we have never 
seen anything at that level. But it is also something you 
cannot take for granted. It is an everyday battle.
    And I think in my personal experience--I will not speak for 
anyone else. My personal experience, the only time we are going 
to have to worry about that really is if they ever sense that 
the country is not behind them, is not supportive of them in 
some way, then we ought to be worried. But as long as that is 
the case, we will find enough patriots, and they are very well-
qualified.
    Senator Wicker. Well, thank you very much, gentlemen. We 
appreciate your service, and we appreciate your information to 
us today.
    And if there is nothing else--are there some magic words 
that I am supposed to say?
    Oh, let me just add, Senator King is right about the 
scheduling. Senator Hirono, in spite of her best intentions, is 
not going to be able to make it to the hearing at all. I will 
just submit my opening statement for the record.
    [The prepared statement of Senator Wicker follows:]

                 Prepared Statement of Roger F. Wicker
                              introduction
    The Senate Armed Services Subcommittee on Seapower convenes this 
afternoon to examine Navy shipbuilding programs.
    We welcome our three distinguished witnesses:
      The Honorable James F. Geurts (GERTS), Assistant 
Secretary of the Navy for Research, Development, and Acquisition;
      Vice Admiral William R. Merz, Deputy Chief of Naval 
Operations for Warfare Systems; and
      Lieutenant General David H. Berger, Deputy Commandant of 
the Marine Corps for Combat Development and Integration.
    This is the first appearance for General Berger before this 
Subcommittee, so let me extend a special welcome and thanks for your 
decades of service to our Nation.
                           navy shipbuilding
    In 2016, the Navy increased its minimum requirement to 355 battle 
force ships, a reflection of the strategic shift to great power 
competition. This Subcommittee takes that requirement seriously. In 
fact, every Member of this Subcommittee co-sponsored legislation that I 
introduced last year--the SHIPS Act--to make achieving 355 ships the 
official policy of the United States. The SHIPS Act was included in the 
Fiscal Year 2018 National Defense Authorization Act and signed into law 
by President Trump.
    However, the Navy currently stands at only 286 battle force ships. 
I look forward to hearing from our witnesses about the Navy's plans to 
meet the 355-ship requirement and options that could enable 
acceleration of this timeline.
    Additionally, I would like to review a number of other 
shipbuilding-related topics, including the following:
      The new Force Structure Assessment, including the factors 
that have led the Navy to conduct a new Assessment;
      The Columbia-class submarine program, including greater 
clarity on the long-term funding plan and the corrective action plan 
for missile tube manufacturing defects;
      The Ford-class aircraft carrier program, including the 
Department's intentions regarding the block buy of the next two 
carriers (CVNs 80 and 81) and Advanced Weapons Elevator development;
      The Frigate program, including the path to awarding the 
lead ship contract in fiscal year 2020;
      The Future Surface Combatant program and the path to 
establishing the associated programs of record; and
      The Navy's plan to recapitalize the Nation's sealift, 
including the Military Sealift Command surge fleet and Ready Reserve 
Force.
                               conclusion
    Secretary Mattis testified earlier this year that ``we are moving 
toward a more maritime strategy in terms of our military strategy to 
defend the country.'' To this end, there is no question that a larger 
fleet comprised of more capable ships is urgently needed to implement 
the new National Defense Strategy. This Subcommittee will continue 
looking for new ways to partner with the Navy to build the 355-ship 
fleet faster, while at the same time demanding the best use of every 
taxpayer dollar.
    I look forward to our witnesses' testimony. I now recognize Senator 
Hirono.

    Senator Wicker. Do we need to leave some time open? Let us 
leave it open for a week for questions for the record.
    Senator Wicker. Anything else, Senator King?
    Thank you, sir, and thank you, gentlemen.
    This hearing is adjourned.
    [Whereupon, at 4:04 p.m., the Committee adjourned.]

    [Questions for the record with answers supplied follow:]

               Questions Submitted by Senator Mike Rounds
                       attack submarine questions
    1. Senator Rounds. Vice Admiral Merz, how is the Navy planning to 
mitigate the attack submarine shortfall in the 2020s?
    How will the implementation of this mitigation plan change the 
current projections for attack submarines in the 355-ship plan 
submitted to Congress?
    Understanding the degradation of the industrial base Admiral Merz 
described in our discussion during the 27 November hearing, what 
outside the box thinking can be applied and how can Congress assist the 
Navy with resources to address this shortfall PRIOR to the estimate of 
``towards the end of the current shipbuilding cycle'' that Admiral Merz 
provided at this hearing?
    Vice Admiral Merz. Similar to other shipbuilding lines, Navy is 
partnering closely with industry in applying the three enduring 
principles discussed in the fiscal year 2019 Shipbuilding Plan. First, 
steady growth--staying absolutely committed to steady procurement 
profiles, which for the SSNs is two per year; deviating only 
deliberately, and only in concert with other industrial base activity. 
Second--aggressive growth--taking advantage of additional industrial 
capacity when available. Based upon the challenges related to expanding 
the workforce for the new Columbia-class SSBN and the ongoing delays in 
private shipyard maintenance, Navy is cautious regarding adding new-
construction projects, but has targeted the ``gap years'' in SSBN 
production to add additional SSNs to reach the force structure 
requirement of 66 earlier. Third--service life extensions--perhaps the 
most actionable option, Navy has identified seven candidate Los 
Angeles-class submarines for refueling, two of which are funded in the 
FYDP which will mitigate the near term SSN shortfalls in the late 
2020s.
    Regarding resources, Congress' support to Navy shipbuilding 
accounts has been superb. But introduction of continuous production of 
Columbia-class SSBN represents Navy's single largest fiscal challenge 
for upcoming budgets and may constitute the biggest threat to the other 
lines, including SSNs. As we continue to probe the limits of the 
industrial base, and we're able to more aggressively drive production, 
we'll coordinate closely on resourcing opportunities.
    Additionally, consistent annual funding in the shipbuilding account 
is fundamental to sustaining steady growth (capacity). Equally 
important as the new ships are delivered is the properly phased, 
additional funding in operating, maintenance, and sustainment, which 
accounts for a much larger fiscal burden over the life of a ship. The 
burden on these accounts is growing, and will continue to grow until 
equilibrium is reached at the desired higher inventory, when deliveries 
match retirements and all resourcing accounts reach steady-state. For 
perspective, the current budget, among the largest ever, supports a 
modern fleet of approximately 300 ships. Sustaining a much larger 355 
ship fleet must be coordinated with Congress as we continue to grow.

    2. Senator Rounds. Vice Admiral Merz, how many attack submarines 
are in dry dock right now?
    How many attack submarines are in the queue for dry dock?
    How long will it be for each of these submarines to get to dry 
dock?
    What is the average wait projected for other attack submarines that 
will be moving to this queue in the next year? Two years? Five years?
    What can congress do to, with respect to providing resources, to 
improve the situation?
    As of today, how many attack submarines are non-operational and 
awaiting dry dock?
    Vice Admiral Merz. There are nine attack (SSN) submarines currently 
in dry dock in public and private shipyards. Seven other SSN submarines 
have undocked and are nearing completion of their maintenance 
availability, but have not yet returned to operational status. There 
are 13 SSN submarines currently in the availability planning window. As 
of today, three of the 13 (USS Charlotte (SSN 766), USS San Juan (SSN 
751) and USS Boise (SSN 764)) are restricted to surface operations 
awaiting dry docking (in the queue). Based on a data date of 22 January 
2019, of the three SSNs restricted to surface operations, SSN 766 is 
scheduled to enter dry dock in June 2019; SSN 751 in February 2019; and 
SSN 764 in May 2019. In the next year (22 January 2019 to 1 February 
2020), three other SSN submarines will be restricted to surface 
operations awaiting dry dock with an average wait time of approximately 
9 months. In the next two years (22 January 2019 to 1 February 2021), a 
total of seven SSNs (four more in addition to the three cited above in 
the first year) will be restricted to surface operations awaiting dry 
dock with an average wait time of approximately 7 months. In the next 
five years (22 January 2019 to 1 February 2024), a total of nine SSNs 
(two more than the seven cited above in the first two years) will be 
restricted to surface operations awaiting dry dock with an average wait 
time of approximately 6 months. Continued Congressional resource 
support for the Navy's depot maintenance improvement initiatives, 
including the Shipyard Infrastructure Optimization Plan, as well as 
continued support for Navy's efforts to balance our public sector 
workload, maintain a healthy industrial base, and reduce idle time by 
contracting selected SSN availabilities to the private sector will help 
to improve the situation.
                               __________
           Questions Submitted by Senator Richard Blumenthal
                         submarine maintenance
    3. Senator Blumenthal. Secretary Geurts, last week, GAO released a 
report titled; ``Actions Needed to Address Costly Maintenance Delays 
Facing the Attack Submarine Fleet.'' The report concluded, ``[the] Navy 
has not effectively allocated maintenance periods among the public and 
private Shipyards to limit attack submarine idle time.'' Transferring a 
few backlogged availabilities from the public yards to the private 
yards should be explored as a short-term solution for the backlog. It 
would help grow private yard workforce and help mitigate the workforce 
decline. I am concerned that we have been talking about the maintenance 
backlog for over a year--with a clear solution in sight--and there is 
not enough urgency in addressing the issue. When will the Navy release 
a plan to provide maintenance work to private shipyards in order to 
help manage their workforce? When will the Navy decide whether to sole 
source or open competition these availabilities? How many maintenance 
availabilities do you anticipate awarding to private shipyards, 
particularly Electric Boat?
    Secretary Geurts. A report to Congress on Submarine Maintenance was 
signed on December 27, 2018, and provides a five-year plan for 
submarine maintenance that restores operational availability and fully 
utilizes both public and private nuclear-capable shipyards. The Navy 
plans to outsource two availabilities to the private sector in fiscal 
year 2020 and fiscal year 2021. The acquisition strategy is currently 
being formulated for these availabilities. General Dynamics Electric 
Boat and Huntington Ingalls Industries--Newport News Shipbuilding are 
the two qualified private shipyards in the United States to perform 
nuclear work.

    4. Senator Blumenthal. Secretary Geurts, CBO released a report in 
September titled, ``Comparing the Costs of Submarine Maintenance at 
Public and Private Shipyards,'' and found private shipyards, on 
average, were less expensive than public shipyards. In fact, CBO 
concluded private shipyards were 24 percent less expensive from 2010 to 
2017 for overhauling Los Angeles-class Subs. In your hearing testimony, 
you indicated that this has not been your experience. Please provide 
the Navy's cost estimate for private versus public shipyard maintenance 
and an explanation for any discrepancies in cost analysis.
    Secretary Geurts. Based on our analysis, the cost between the 
public and private shipyards are competitive.
    The Navy met with CBO to review their analysis and determine how 
they arrived at their conclusions. As part of those discussions, the 
Navy determined that CBO had been provided data directly from the 
Visibility and Management of Operating and Support Costs (VAMOSC) 
system which has been known to have incomplete information. After 
correcting for the known data errors, the Navy ran an analysis using 
much of the CBO methodology. The results are discussed below.


      The Navy's analysis shows that both sectors--public and 
private--are competitive with the cost of performing an availability. 
It is important that the public and private shipyards continue to price 
their availabilities to be cost efficient and maintain capabilities.
      CBO analysis relied on cost alone which is not sufficient 
to reach an accurate conclusion. Duration of the availability, which 
was not addressed by CBO, plays a significant role in the Navy's 
ability to meet National Defense Strategy requirements. The Navy's 
analysis shows the private shipyard availabilities experience 
significantly longer duration times with more days of maintenance 
delays which combined, has a larger negative impact on operational 
availability.

----------------------------------------------------------------------------------------------------------------
             Shipyards                   Total Availability Duration              Days of Maintenance Delay
----------------------------------------------------------------------------------------------------------------
Public Shipyards                    145-165 Days, (Range)                  45-60 Days, (Range)
----------------------------------------------------------------------------------------------------------------
Private Shipyards                   323 Days, (Average)                    147 Days, (Average)
----------------------------------------------------------------------------------------------------------------

      This study revealed the limitations of using VAMOSC as 
the sole source for availability information.
      Navy recognizes the private shipyards are strategic 
partners and will continue to consider the entire public/private 
industrial base as it assesses workload requirements and seeks to 
mitigate workload peaks within any given year.
      The limitations and assumptions considered in calculating 
the cost between the private and public shipyards, and due to 
proprietary business decisions made by private shipyards, an apples-to-
apples comparison is extremely challenging. Based on this analysis and 
two current private shipyard EOH avails which are expected to cost over 
$440 million each (an average $115 million over current public shipyard 
costs), we conclude that cost savings between public and private 
shipyards is marginal, at best.

    5. Senator Blumenthal. Secretary Geurts, in last year's NDAA, I 
required the Navy to submit a report on how it plans to address this 
maintenance backlog. The report delivered in February stated, ``The 
Navy intends to execute all the workload programmed at the Naval Ship 
Yards, with no availabilities moving from the public to the private 
sector.'' Yet at a House Armed Services hearing in March, Secretary 
Spencer acknowledged that private yards will be more involved with 
maintenance. In your testimony, you also alluded to plans to distribute 
work among private shipyards. Please provide an explanation for these 
discrepancies and the plan to proceed.
    Secretary Geurts. Each year, the Navy holds a Fleet Scheduling 
Conference intended to establish a plan for executable depot 
maintenance schedules that maximizes operational availability of the 
submarine fleet. The dynamic nature of submarine operations and 
maintenance requires refinement of this plan on an annual basis. Navy 
always considers the importance of balancing the workload across the 
public and private sectors to support future maintenance and 
modernization requirements, as well as ensuring new ship construction 
efforts in the private sector are adequately supported. Based on our 
most recent analysis of the workload, the Navy plans on outsourcing two 
availabilities to the private sector; one in each of fiscal years 2020 
and 2021.
                    attack submarine strike capacity
    6. Senator Blumenthal. Secretary Geurts, as our guided-missile 
submarines--the SSGNs--begin to retire in fiscal year 2026 to 2028, the 
Navy will face a reduction in strike capacity. To meet this need, the 
first Virginia Payload Module boat will be begin construction in fiscal 
year 2019. In the 30-Year Shipbuilding Plan, the Navy notes that 
Virginia Payload Module is a ``mid-term'' strategy for replacing the 
SSGN strike capacity. The plan then signals that the Navy is 
considering adding up to five more modified Columbia-class submarines 
in the 2030s and 2040s, similar to current SSGNs that provide 
significant cruise missile payload power. This would help address the 
``boom and bust'' build cycles and stabilize the build rate to help 
maintain workforce rates. What can you tell us about the Navy's desire 
to continue building additional Columbia-class submarines beyond the 12 
boats to be completed in the 2030s?
    Secretary Geurts. There are two governing documents that identify 
the need for a payload-based large diameter submarine, the Nuclear 
Posture Review and the fiscal year (FY) 2019 Long Range Plan for 
Construction of Naval Vessels. The Nuclear Posture Review directed the 
need for a minimum force of 12 total Columbia-class SSBNs. The Navy 
could potentially procure additional Columbia-class SSBNs or similar 
platforms if necessitated by changes in the strategic environment.
    The four SSGNs now in service retire in the mid-2020s. The Long 
Range Plan for Construction of Naval Vessels for fiscal year 2019 
identified the need to build a payload-based large diameter submarine 
that will follow Block V Virginia-class attack submarines with Virginia 
Payload Modules in accordance with the Tactical Submarine Evolution 
Plan. The Navy is evaluating the continued production of the Columbia-
class Hull Form to serve as SSGN(X) with future payloads and 
capabilities.
                               __________
              Questions Submitted by Senator Mazie Hirono
                     public shipyard modernization
    7. Senator Hirono. Secretary Geurts, we are all aware of the Navy's 
new plan for modernizing the public ship yards. I consider this to be a 
major improvement after years of neglect of this important 
infrastructure. Certainly, there have been military construction 
projects and various upgrades over the years, but the Navy has pursued 
these without a comprehensive plan. The Navy told us earlier this year 
that the Navy would issue a master plan for modernizing the 4 public 
shipyards in the fall of 2018. That master plan was intended to guide 
Navy investment over the next 20 years. Secretary Guerts, has the Navy 
released that master plan? If not, when do you expect to release the 
master plan?
    Secretary Geurts. The Navy has not yet finalized a master plan for 
modernizing the four public shipyards. We intend to release the plan in 
the second quarter of fiscal year 2020 after we complete our next phase 
of modeling and simulation.
    The Department of the Navy has released a Shipyard Infrastructure 
Optimization Plan (SIOP), as required by the fiscal year 2018 National 
Defense Authorization Act. The SIOP provided a framework of the 
requirements for recapitalizing the infrastructure at the four public 
nuclear shipyards to include critical dry dock repairs, restoring 
needed shipyard facilities and optimizing their placement, and 
replacing aging and deteriorating capital equipment. Sustained funding 
in these three areas will ensure that the public shipyards have the 
capability and capacity to execute the projected nuclear maintenance 
workload. The estimated cost and schedule for this effort is $21 
billion over 20 years.
    The plan for recapitalization of the Naval Shipyards involves 
modeling and simulation with industrial consultations to ensure the 
optimal placement of facilities and completes the SIOP's Phase II. 
Initial modeling and simulation at Pearl Harbor Naval Shipyard is 
planned to start February 2019, with the target date for finalizing the 
master plan (the recapitalization of all four shipyards) in the second 
quarter of fiscal year 2020.

    8. Senator Hirono. Secretary Guerts, given the backlogs of current 
ship maintenance and the likely growth in ship maintenance to support a 
355-ship fleet, how much should we expand the capacity of the public 
yards to support our Navy?
    Secretary Geurts. The Shipyard Infrastructure Optimization Plan 
(SIOP) was developed to recapitalize dry docks and capital equipment 
and to optimize the facility layout at the four Naval Shipyards. These 
efforts will improve the performance at Naval Shipyards by increasing 
dry dock capacity, providing shipyard workers with new industrial 
equipment and by reducing total personnel and material travel and 
movement. The SIOP is expected to account for the new force structure 
of the nuclear fleet by recapitalizing the four existing Naval 
Shipyards.
                cvn-78 advanced weapons elevators (awe)
    9. Senator Hirono. Secretary Guerts, the CVN-78 program has been 
subject to a number of problems during its construction. We are all too 
familiar with the testing and development problems of the Dual Band 
Radar (DBR), the Electromagnetic Aircraft Launch System (EMALS), and 
the Advanced Arresting Gear (AAG) programs. Now the programs is 
experiencing further problems with the Advanced Weapons Elevator (AWE) 
program. The ship delivered nearly 3 years behind schedule, and it now 
seems likely that the ship will not complete post shakedown 
availability on time due to slips in the AWE program. Are the problems 
with each of these four developmental programs in any way attributable 
to a problem with systems engineering expertise or discipline within 
the Naval Sea Systems Command (NAVSEA)? Virginia-class production
    Secretary Geurts. No, Naval Sea Systems Command's systems 
engineering expertise is not the problem. The problems the CVN 78 
program encountered with the four developmental programs (DBR / EMALS / 
AAG / AWE) are attributable to: 1) a lack of fully ship representative 
land-based test facilities; and 2) fielding developmental systems in a 
concurrent design and construction environment. Limited land-based test 
infrastructure delayed discovery of first of class design and ship 
integration issues. Resolution of identified challenges in many 
instances required CVN 78 shipboard hardware and software changes which 
drove schedule delays.

    10. Senator Hirono. Secretary Guerts, we understand there may be 
delays in projected deliveries of Virginia-class submarines, 
particularly from Newport News. Some of these relate to production in 
general, and some relate to problems in welding shafts. Can you give us 
the latest status on resolving the welding problems for attack 
submarine shafts?
    Secretary Geurts. Shafts procured for Virginia-class Submarine 
(VCS) Block IV ships are 4.5-to-12 months late to the shipbuilder 
required in-yard dates. Collins Machine Works (Collins) informed the 
Navy of an issue with shaft construction on August 23, 2018. An 
assessment team was formed consisting of Navy, shipbuilder, and vendor 
representatives to evaluate the situation, identify alternative design 
options and qualify new products and procedures.
    The shafts are procured by Huntington Ingalls Industries-Newport 
News Shipbuilding (HII-NNS) and there have been issues with 
satisfactorily applying cladding during manufacturing of main 
propulsion shafts. This is the result of changes in the formula of the 
welding flux and that numerous welding parameters were incorrectly set, 
which was not recognized until a new flux vendor--Bohler--provided 
technical support to Collins in early November 2018. The Navy has 
approved Collins' weld procedure for production and Collins will use 
their new flux in production by the end of February. Additionally, the 
Navy has taken action to expedite refurbishment of previously used VCS 
in-service shafts. By a combination of the use of Bohler flux for new 
construction shafts and the expedited refurbishment of in-service 
shafts, impact is minimal to Block IV ship deliveries. The issue is 
limited to one new construction hull with a four-month delay to need 
date and not in the critical path of delivery.

    11. Senator Hirono. Secretary Guerts, what is causing delays in 
Newport News' ability to produce Virginia-class submarine modules on 
time for themselves and for Electric Boat?
    Secretary Geurts. Virginia-class Submarine (VCS) Block IV 
submarines are under construction at both General Dynamics Electric 
Boat (GDEB) and Huntington Ingalls Industries--Newport News 
Shipbuilding (HII-NSS). Compared with the Block III contract, which 
contained contracted delivery spans of 66 months and began the ramp up 
to two-per-year submarine deliveries, the Block IV contract contained 
reduced contract spans of 62 months for the first three and 60 months 
for the remaining submarines. Block IV module delays from HII-NNS, 
coupled with previously existing performance issues relating to labor 
and material, will likely cause Block IV submarines to be between 3-to-
12 months late to contract delivery date.
    Performance issues with module construction have been noted at HII-
NNS across Blocks III and IV. During Block III construction, these 
issues were exacerbated as the shipyard was challenged to ramp up to 
two-per-year VCS construction while experiencing a reduction in work 
force, a hiring freeze, and quality issues impacting both modules and 
final assembly and test. Early performance on Block III was impacted by 
HII-NNS Structural Fabrication and Assembly (SFA). As a result, HII-NNS 
submarines (SSN 787, 789, and 791) have construction spans of 870 
months versus contract span of 66 months.
    Block IV module construction performance has experienced a 
degradation resulting from early material availability issues and 
associated non-optimal work sequences, reduction in work force, a 
hiring freeze, and SFA workforce efficiency. The two-per-year VCS 
construction has continued to stress labor resources at both HII-NNS 
and GDEB.
    A Navy led assessment team was assembled to analyze performance and 
provide recommendations for improvement and mitigation of module delays 
impacting contract construction spans. In addition to Navy 
participation, the team also includes an experienced representative 
from GDEB and HII-NNS. Based on the assessment team's recommendations, 
the shipbuilders have evaluated the recovery options after performing a 
detailed product review of every module. This review has allowed the 
shipbuilders to determine which modules may need work offloaded between 
shipbuilders to enable a recovery construction sequence. To address 
enterprise issues, greater oversight and key workforce additions are 
being implemented. Both the government and shipbuilders will employ 
forward looking metrics, a focus on early construction and critical 
modules/assemblies, and improved schedule tools to support and track 
recovery efforts. Currently the Navy is expecting a return to on 
schedule delivery by the end of Block IV.
                       aircraft carrier block buy
    12. Senator Hirono. Secretary Guerts, section 121 of the John S. 
McCain National Defense Authorization Act for Fiscal Year 2019 provided 
the Navy the authority two purchase two aircraft carriers (CVN-80 and 
CVN-81) under a block buy contract, subject certification of certain 
facts by the Secretary of Defense. As a matter of policy, why should we 
be rewarding Newport News for mediocre performance on building the CVN-
78 and on building attack submarines with a new contract valued at more 
than $20 billion?
    Secretary Geurts. Shipbuilder performance on CVN 79 has shown 
substantial improvement over CVN 78, which was the lead ship of the 
first new design of nuclear aircraft carriers in 40 years. CVN 79 is 
performing at nearly a 19 percent recurring manhour reduction when 
compared to CVN 78 actuals, and is on track for an early launch. This 
reduction in manhours was made possible through continuous process 
improvement that included design modifications that improve 
manufacturing efficiency and maximizes the use of facilities. 
Production efficiencies are being realized through the use of unit 
families, pre-outfitting, and complex assemblies which move work to a 
more efficient workspace environment; reduction in the number of super-
lifts; and facility investments which improve the shipbuilder trade 
effectiveness. In addition, the CVN 79 single ship contract is a Fixed 
Price Incentive Firm Target (FPIF) type contract and contains the 
steepest shareline in any carrier construction contract to date, 
offering the greatest incentive for the contractor to contain costs and 
improve performance.
    The Navy is committed to reducing and controlling the cost of Ford-
class aircraft carriers. The two CVN buy achieves maximum value for 
taxpayer dollar, with savings expected to exceed $4 billion when 
compared to the Navy's original estimate of the cost of buying these 
CVNs separately. The $15.9 billion contract the Navy has negotiated for 
the CVN 80 and CVN 81 ensures continued FORD Class cost reduction by 
enabling the shipbuilder to build two ships to a single technical 
baseline which allows it to maximize economic order quantity for 
material, level load its shops and rollover engineering products. The 
contract agreement for CVN 80 and CVN 81 includes an overall manhour 
target that is a 22 percent reduction from CVN 79 including a 
production manhours reduction equivalent to an 82 percent learning 
curve. The FPIF contract type limits the Navy's liability and 
incentivizes the shipbuilder to execute to the contract's aggressive 
targets. Additionally, the contract includes special incentives beyond 
the shareline that motivates the shipbuilder to control cost in the 
areas of construction labor performance, material procurement and 
through capital investments. CVN 81 will be a separate contract line 
item under the same contract as CVN 80, which allows the Navy to 
monitor performance on a per hull basis. The contract structure will 
create a direct link between contract performance and realized cost 
savings for each ship.
                      columbia-class missile tubes
    13. Senator Hirono. Secretary Guerts, the Columbia-class program 
has experienced difficulties with welding the missile tubes. You have 
been working through possible mitigation plans to assess the impact on 
the schedule for this important program. Could you give us your current 
best assessment of the impact of these welding problems on the overall 
Columbia-class program?
    Secretary Geurts. Our current recovery plan reduced the schedule 
margin to 11 months ahead of construction need date for Columbia. To 
date, the contractor has executed to this recovery plan.

    14. Senator Hirono. Secretary Guerts, what is the likely impact for 
our British partners on the program?
    Secretary Geurts. We currently estimate an eleven-month delay to 
missile tube delivery to the United Kingdom. The United Kingdom 
continues to evaluate potential impacts such a delay would have on 
their construction schedule.

    15. Senator Hirono. Secretary Guerts, is this an example of the 
Navy and contractor team giving insufficient attention that is 
symptomatic of a larger problem with oversight of subcontractor 
programs, such as was the case with the electric motors for the 
Columbia-class earlier?
    Secretary Geurts. Yes, the Navy agrees these are indicators of 
insufficient oversight of subcontractors. The Navy and Industry teams 
are addressing this through corrective actions with subcontractors and 
throughout the supplier base. Subcontractor management and conduct of 
comprehensive supplier oversight are key focus areas for the Navy and 
industry teams. Supplier readiness efforts, which began within the 
framework of the Integrated Enterprise Plan efforts, were expanded in 
late 2018 based on lessons learned from supplier engagements and the 
Missile Tube (MT) issue. In response to the MT issue, the shipbuilders 
performed a critique and developed a revised shipbuilder supplier 
oversight and quality model based on a risk management framework which 
will be fully implemented in 2019. As a short term corrective action, 
both shipbuilders conducted Interim Supplier Assessments on MT related 
suppliers and a portion of 20 other critical non-MT suppliers in late 
2018. Additionally, the Navy's Supervisor of Shipbuilding teams in 
Groton and Newport News, and Navy program offices conducted re-
evaluations of the government oversight processes and have identified 
plans of action and milestones to improve processes in 2019.
                           ddg-51 award/split
    16. Senator Hirono. Secretary Guerts, the Navy recently awarded the 
multiyear contract for 10 ships, with 6 ships award to Ingalls and 4 
ships awarded to Bath. Was this division of the 10-ship program related 
to delays in production at Bath of the DDG-1000 and the DDG-51 
programs?
    Secretary Geurts. No, the award of the competitive fiscal year 2018 
to 2022 DDG 51 Multiyear Procurement (MYP) was not related to 
production delays at General Dynamics Bath Iron Works (GD BIW). The 
fiscal year 2018 to 2022 MYP ships were procured using a limited 
competition between the current DDG 51 class shipbuilders, GD BIW and 
Huntington Ingalls Industries, Ingalls Shipbuilding (HII Ingalls), in 
order to generate the best price for the government and its taxpayers 
while also helping to maintain the critical surface combatant 
shipbuilding industrial base.
    The MYP ships were competed using a combination of historically 
successful competitive strategies primarily through Compete for 
Quantity, with one Profit Related to Offer outcome also possible. 
Outcomes included the potential for both shipbuilders to be awarded an 
equal number of ships or for one shipbuilder to be awarded a larger 
share of the workload. The minimum quantity awarded to each shipbuilder 
was four ships. Possible award patterns included a 5/5, 6/4, or a 4/6 
ship award. The award quantity of the 10 MYP ships was based on the 
pricing scenario that provided the lowest total evaluated ceiling price 
to the Government.
    This overarching strategy continues the competitive environment 
that the Navy has successfully fostered to contract for the procurement 
of 77 (DDG 51-DDG 127) previous ships in the class and aligns with the 
Department's priorities to deliver capacity and capability affordably 
while strengthening an industrial base that is critical to achieving 
increased lethality and resiliency.

    17. Senator Hirono. Secretary Guerts, according to many Navy 
studies, we need to keep two yards building large surface combatants. 
With that in mind, what should be done to improve the performance at 
Bath? What steps are being taken by the Bath shipyard to improve their 
performance? What steps are being taken by the Navy to help Bath 
improve its production performance?
    Secretary Geurts. The Navy continues to work across the 
shipbuilding industrial base to most efficiently produce Navy ships on 
or ahead of contract schedules in order to meet Fleet requirements. At 
any shipyard, including General Dynamics Bath Iron Works (GD BIW), the 
Navy and shipbuilder need to work together in order to focus on 
contractor cost performance, improve hull-to-hull learning and the 
application of continuous improvement processes, hold to contract 
milestone and delivery schedules, and provide procurement demand 
stability.
    To meet these objectives, GD BIW has focused on improving worker 
safety and product first-time quality. Additionally, GD BIW has made 
capital investments in its fabrication facilities to increase 
throughput and better meet schedules. To ensure that shipbuilder best-
practices are communicated and process learning is maintained, GD BIW 
has also focused on its hiring, training and apprenticeship programs to 
enable the success of its construction workforce.
    The Navy has also worked with GD BIW to enable the shipbuilder to 
most efficiently execute its construction contracts. The Navy has 
provided funding for Capital Expenditure (CAPEX) projects at the 
shipyard in the past, and most recently in conjunction with the award 
of the third fiscal year 2016 ship (DDG 127) and the Flight III change 
on the fiscal year 2017 ship (DDG 126). The recently awarded MYP 
includes provisions for future CAPEX projects. The Navy is supporting 
GD BIW in its efforts to improve its production efficiency by 
implementing Class II changes (shipbuilder corrections/improvements) in 
its Flight IIA production design baseline and provided funding in 
fiscal year 2017 to help ensure these changes were also captured in 
Flight III products.
                     ship-to-shore connector (ssc)
    18. Senator Hirono. Secretary Guerts, under the Ship-to-Shore 
Connector (SSC) program the Navy has been developing a replacement for 
the landing craft, air cushion vessels, or LCACs. This looked like it 
would be a relatively straight forward development effort, but this 
program is also behind schedule. Can you tell what is wrong with the 
contractor's effort to produce these craft on time?
    Secretary Geurts. SSC is behind schedule due to:
      A factory fire at a subcontractor's facility (GE Dowty). 
This subcontractor produces the propellers. Reconstitution of their 
manufacturing capability slowed craft propeller production.
      Unexpected vibrational concerns in the propeller test 
stand slowed testing and required equivalency testing on the craft. 
Continued testing of the Electrical and Command, Control, 
Communications, Computers & Navigation (C4N) system revealed stability 
issues, delaying testing completion while C4N software updates are 
developed and implemented.
      During testing, Craft 100 lost power and drifted into a 
bridge. The subsequent grounding caused damage to the craft and delayed 
operational testing and delivery.
      Longevity issues associated with certain gearbox bearings 
were identified during craft-level testing of the gearboxes and are the 
most significant contributor to the current craft delays. Textron 
Systems, Marine and Land Systems (TSMLS) is working with their vendors 
to update the bearing design on certain gears to resolve this issue.
    The U.S. Navy has a Fixed Price Incentive Fee contract with TSMLS. 
TSMLS is working diligently to overcome the challenges stated above and 
delivery of the first craft is anticipated to occur in mid-2019.

    19. Senator Hirono. General Berger, will the delays in the SSC 
program have any effect Marine Corps' ability to conduct amphibious 
assault operations?
    General Berger. No.

                                 [all]