    [Senate Hearing 115-858]
    [From the U.S. Government Publishing Office]

                                                           S. Hrg. 115-858

                 UNITED STATES NAVY AND MARINE CORPS READINESS

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

                                    HEARING

                                   BEFORE THE

                            SUBCOMMITTEE ON SEAPOWER

                                      AND

                         SUBCOMMITTEE ON READINESS AND
                               MANAGEMENT SUPPORT

                                     OF THE

                          COMMITTEE ON ARMED SERVICES
                              UNITED STATES SENATE

                         ONE HUNDRED FIFTEENTH CONGRESS

                                 SECOND SESSION

                                   __________

                               DECEMBER 12, 2018

                                   __________

             Printed for the use of the Committee on Armed Services

    [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

                     Available via: http://www.govinfo.gov

                                  __________

                        U.S. GOVERNMENT PUBLISHING OFFICE
    42-873 PDF                  WASHINGTON : 2021

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

                          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

    _________________________________________________________________

                Subcommittee on Readiness and Management Support

    Dan Sullivan, Alaska, Chairman         	TIM KAINE, Virginia
    MIKE ROUNDS, South Dakota           	JEANNE SHAHEEN, New Hampshire
    JONI ERNST, IOWA			MAZIE K. HIRONO, Hawaii
    MIKE ROUNDS, South Dakota
    DAVID PERDUE, Georgia

                                      (ii)

                             C O N T E N T S

          _________________________________________________________________

                               December 12, 2018

                                                                       Page

    United States Navy and Marine Corps Readiness....................     1

    Spencer, The Honorable Richard V., Secretary of the Navy.........     5
    Pendleton, John H., Director, Defense Capabilities and               10
      Management, United States Government Accountability Office.

    Questions for the Record.........................................    92

                                     (iii)

                 UNITED STATES NAVY AND MARINE CORPS READINESS

                                  ----------

                          WEDNESDAY, DECEMBER 12, 2018

                           U.S. Senate,
               Subcommittee on Seapower and
                          Subcommittee on Readiness
                                and Management Support,
                                   Committee on Armed Services,
                                                        Washington, DC.
        The Subcommittees met, pursuant to notice, at 9:35 a.m. in
    Room SD-G50, Dirksen Senate Office Building, Senator Roger F.
    Wicker (chairman of the Subcommittee on Seapower) presiding.
        Subcommittee Members present: Senators Wicker, Rounds,
    Ernst, Sullivan, Shaheen, Blumenthal, Hirono, Kaine, and King.

              OPENING STATEMENT OF SENATOR ROGER F. WICKER

        Senator Wicker. This joint meeting of the Senate Armed
    Services Subcommittees on Seapower and Readiness and Management
    Support convenes this morning to examine Navy and Marine Corps
    readiness.
        We welcome our four distinguished witnesses: the Honorable
    Richard V. Spencer, Secretary of the Navy; General Robert B.
    Neller, Commandant of the Marine Corps; Admiral William F.
    Moran, Vice Chief of Naval Operations; and Mr. John H.
    Pendleton, Director of Defense Capabilities and Management at
    the Government Accountability Office (GAO).
        Let me begin by expressing my deepest condolences to the
    families and friends of the six marines who died after a mid-
    air collision last Thursday near Japan. This tragedy serves as
    a reminder of the constant dangers those in uniform face on a
    daily basis.
        I thank Chairman Sullivan and Ranking Members Hirono and
    Kaine for agreeing to hold this hearing jointly--this
    rescheduled hearing. We will discuss a range of important
    issues today that cross subcommittee jurisdictions, such as
    equipment modernization and funding for spare and repair parts.
    Although there is plenty to discuss regarding Navy and Marine
    Corps readiness, I will focus my opening remarks on the
    readiness of the Navy surface ships.
        This February, the late Senator John McCain and I
    introduced legislation to help the Navy restore its surface
    force readiness. The Surface Warfare Enhancement Act of 2018
    sought to address some of the root causes of declining
    readiness, which were outlined in the Secretary of the Navy's
    Strategic Readiness Review (SRR) and the CNO's [Chief of Naval
    Operations] Comprehensive Review.
        In the aftermath of the tragic USS Fitzgerald and USS John
    S. McCain collisions, in which 17 sailors lost their lives, our
    commanders and sailors called for meaningful reform. Navy and
    Government Accountability Office reviews cited over-extended
    and undermanned ships, overworked crews, a decline in naval
    mastery, and confusing chains of commands as contributing
    factors to the Navy's readiness problems.
        Our legislation, based on the Navy's own recommendations,
    was specifically designed to address these and other
    challenges. Although I have confidence in the Navy's
    leadership, I believe Congress must continue to play an active
    role in ensuring the right long-term corrective actions are
    successfully implemented.
        The John S. McCain National Defense Authorization Act
    (NDAA) for fiscal year 2019, which President Trump signed into
    law in August, includes 11 provisions derived from our original
    legislation. These reforms required the Navy to review its
    chains of command, ensure that the ships home-ported overseas
    rotate back home, and keep formal watchstanding records, among
    other several other provisions. We must learn the hard lessons
    of the past 2 years and get meaningful reforms implemented.
        I look forward to receiving an update on the progress of
    implementing these reforms for our surface ships.
        There will be several other topics which will be
    highlighted in our witnesses' prepared testimony, but in the
    interest of time, I will conclude my opening remarks.
        By agreement, we are now to recognize Senator Kaine for
    whatever opening remarks he might have. Senator Kaine?

                     STATEMENT OF SENATOR TIM KAINE

        Senator Kaine. Thank you, Mr. Chairman. Thanks to the
    witnesses for being here today, to my colleague, Senator
    Hirono, and all who are here.
        This is an important hearing. I appreciated the opportunity
    to meet in the office to talk a little bit about it. It is rare
    to have a hearing of two of the Subcommittees jointly, but it
    is very appropriate to talk in this joint Subcommittee hearing
    about readiness in both the Marine Corps and the Navy.
        I will also echo what Senator Wicker said. Our prayers go
    out to the family members affected in the Marine family by the
    mid-air collision. One of those killed was a marine, Kevin
    Herman from Fredericksburg, Virginia. Thinking about Kevin and
    his family.
        I am going to keep my remarks brief as well because we want
    to get into the Q&A.
        First, on readiness recovery, I am encouraged by Secretary
    Mattis' expressed goal of an 80 percent readiness figure. That
    is a lofty goal, a stretch goal, a gasp goal, but it is the
    kind of goal you need to do good work. While I support the
    goal, I do have concerns about how we come up with and then
    allocate the resources that we need to meet it.
        The GAO found just last month the Navy spent about $1.5
    billion since 2008 to support submarines that were not able to
    be deployed. I am very interested to hear from the witnesses
    how the Navy can best use both public and private shipyards to
    ensure readiness goals are met and taxpayer dollars are used
    wisely. I know you are prepared to testify about that.
        Second, infrastructure challenges. I am encouraged by the
    Navy's shipyard optimization plan. The plan has an estimated
    cost of $21 billion over the next 20 years, which would be
    nearly three times what the Navy has historically spent on
    capital shipyard investment. If we are going to get to the 355-
    ship Navy, we need to make those investments, but that will be
    challenging. I am interested to hear from the witnesses today
    on how exactly they plan to achieve this amount of investment.
    Obviously, Congress has a huge role in that. So you will be
    giving us a challenge as well as you describe it.
        An additional concern I have about infrastructure,
    especially just following the fall that we have been through,
    is climate change. Hurricane Florence did significant damage to
    North Carolina, and the costs at Lejeune to the Marine Corps
    could be significant. This is not an Air Force hearing, but
    Tindall in Florida also suffered significantly, and there will
    be costs connected with it.
        The GAO recently found, quote, DOD [Department of Defense]
    acknowledges that the potential impacts of weather effects
    associated with climate change pose operational and budgetary
    risk to our military installations. We are seeing examples of
    that.
        Notably, the Fiscal Year 2018 NDAA required DOD to report
    on vulnerabilities to installations from climate-related
    events. It could be a hurricane. It could be flooding. It could
    be drought, depending on the part of the country, wildfires--
    including the top ten most vulnerable installations in each
    military service. The report is due this month, and I will ask
    both the Navy and Marine Corps for their top ten today, either
    for verbal testimony or testimony for the record. I am not
    expecting each of you to pound the table about debating about
    climate change and the causes of it, but we do need to know,
    coming up with the NDAA and prepping for it for next year, what
    we need to build in to deal with those vulnerabilities.
        With that, Mr. Chairman, thanks for calling this joint
    hearing, and I appreciate the opportunity to dialogue with our
    witnesses today.
        Senator Wicker. Thank you, Senator Kaine.
        Before moving to the other two opening statements, you
    mentioned your constituent. Let me just say that we now have
    the names of four of the five marines who have been declared
    dead after the crash of the two war planes. Family members of
    the fallen marines identified their loved ones to Stars and
    Stripes. In addition to Major Kevin Herman of Fredericksburg,
    Virginia, who Senator Kaine has already mentioned, Staff
    Sergeant Maximo Flores of Litchfield Park, Arizona; Corporal
    Carter Ross from Hendersonville, Tennessee; and Corporal Daniel
    Baker of Tremont, Illinois have been identified as deceased by
    their loved ones. And the fighter pilot involved in the crash
    who died was identified last week as Captain Jahmar Resilard of
    Miramar, Florida. We mention all of those names with our
    thoughts and prayers to their families and our appreciation for
    their service and sacrifice to our country.
        Senator Sullivan?

                   STATEMENT OF SENATOR DAN SULLIVAN

        Senator Sullivan. Thank you, Mr. Chairman. I want to thank
    all the members for being here for this important hearing that
    really kind of emphasizes that modernization and readiness go
    hand in hand. I know that our full Committee Chairman, Senator
    Inhofe, is committed to ensuring that we continue down the path
    to readiness and recovery while we still prioritize
    modernization.
        I want to thank the witnesses for being here today. It has
    been over 6 months since we received testimony from the Navy
    and Marine Corps on their current posture in support of the
    fiscal year 2019 budget. Much has happened since then.
        I am going to try to keep my opening remarks short, but
    like Senator Kaine, I want to highlight a couple areas that I
    hope our witnesses can address for us.
        First, the readiness issues with regard to the Navy and the
    Marine Corps, importantly within the context of the new
    National Defense Strategy (NDS) and the recent National Defense
    Commission report, which was mandated by this Committee and the
    Congress--the leaders of that commission testified recently,
    and I thought they did a very good job. All of this within the
    context of the great power competition with China and Russia
    that are the highlights and emphasis in the National Defense
    Strategy.
        As Senator Kaine mentioned, I also want to get a sense from
    our witnesses on the laudable but, let us say, as he said,
    stretch goal with regard to 80 percent mission-capable by the
    year end with regard to Navy and Marine Corps aircraft. The
    readiness issues in terms of naval aviation has been a big
    challenge and continues to be.
        I am also curious to get an assessment from, Mr. Secretary,
    you and General Neller and Admiral Moran on how you plan to get
    to the 80 percent capable mission for those airframes while
    keeping training up, which has been a big problem, and not
    degrading readiness capabilities.
        On the topic of modernization, I am concerned about a
    significant burden that we are seeing on sustainment. Last
    month, Vice Admiral Moore stated that only 35 percent of the
    ships that he had in maintenance availabilities would move on
    time. This again is an area where maintenance and sustainment
    of our fleet has typically been a strategic comparative
    advantage of the United States Navy relative to other
    countries, particularly China and Russia. I want to get a sense
    from our witnesses on how we make progress on that. Those
    numbers are concerning.
        I also want to get a sense, in light of the NDS, as Senator
    Kaine and I are going to be conducting a classified hearing
    later today with regard to the Pacific laydown of our force
    posture in light of the National Defense Strategy in the Asia-
    Pacific, Indo-Pacific. That is going to be an important
    hearing. My State plays an important role in that, being one of
    the most strategically located places in the world. So I would
    like to get an update on utilization of that platform, JPARC
    [Joint Pacific Alaska Range Complex], Adak, other future year
    training and basing opportunities that fit well within the NDS.
        Finally and I think most importantly--we have already
    touched on it--the trend in the INDOPACOM [Indo-Pacific
    Command] region with regard to accidents that we have had in
    the Navy, in the Marine Corps. I do not want to go down the
    whole list, but we know what they are: the USS McCain, others,
    the collisions of our ships at sea resulting in the deaths of
    17 sailors, several Marine Corps and Navy aviation crashes in
    training, including the latest that we just talked about.
        We, of course, send our heartfelt condolences to the
    families of the marines who have lost loved ones during this
    holiday season. I know all of you gentlemen take these issues
    extremely seriously. These are the men under your charge, but
    we have to do better. We must do better, all of us, including
    the Congress. We have to do better.
        What we need to do here on our side is make sure you get
    the authorization and appropriations bills on time. CRs
    [continuing resolutions] and omnibuses that you have been
    forced to endure for over a decade do not help readiness and
    contribute to the problem.
        With that, Mr. Chairman, I look forward to very much
    hearing from our witnesses.
        Senator Wicker. The ranking member of the Seapower
    Subcommittee, Senator Hirono.

                   STATEMENT OF SENATOR MAZIE HIRONO

        Senator Hirono. Thank you very much. I will keep my remarks
    very short.
        And I do add my own condolences to the families of the
    marines lost in the tragedy off the coast of Japan last week,
    as well as their fellow marines at Marine Corps Air Station
    Iwakuni and throughout the Pacific.
        Gentlemen, it is nice to see three out of the four of you.
    Thank you very much for coming to see me not too long ago.
        These are the areas that I would like to focus on, and some
    of them have already been, of course, mentioned.
        One of the most important areas of concern for me is
    shipyard modernization because Pearl Harbor Navy Shipyard is
    very much a part of our industrial base in Hawaii, as well as,
    of course, a major part of our national security. I too would
    like to know how we are going to get to 80 percent availability
    for aviation.
        Something that I have been talking about quite a bit, not
    necessarily mentioned by others, is how we are addressing the
    corrosion problem because that can lead to deaths, as it has,
    when a propeller falls off due to corrosion and lack of
    adequate maintenance.
        And then, of course, as mentioned by Senator Sullivan,
    preventing collisions at sea.
        So thank you very much, Mr. Chairman.
        Senator Wicker. Thank you.
        I believe Secretary Spencer is first in line to make
    opening remarks. Sir, we are delighted to have you.

    STATEMENT OF THE HONORABLE RICHARD V. SPENCER, SECRETARY OF THE
                                  NAVY

        Secretary Spencer. Great to be here, Chairman.
        I would open up by saying thank you for keeping your
    thoughts and prayers in mind for those marines affected, and I
    would go one step further and please say keep your thoughts and
    prayers in mind for all our Navy/Marine Corps team that are out
    in harm's way.
        Chairman Wicker, Chairman Sullivan, Ranking Member Hirono,
    Ranking Member Kaine, distinguished members who are all here
    today, first off, on behalf of the sailors, marines, civilians,
    and all our teammates serving around the world, we want to
    thank you for your bipartisan effort to restore funding
    stability to the Department of the Navy. It is critical and it
    is doing its work. I will tell you that the weather vanes are
    all pointed in the right direction. Urgency is the message that
    we have now. You are seeing improvement. You will hear it
    today. But the rate of improvement must increase and we believe
    we do have plans to address that.
        The foundation for restoring readiness and increasing
    lethality has been set, but we must build on this, as I said,
    with a sense of urgency, and with a focus on people,
    capabilities, and process. While we have much to do, we are
    well underway. During this testimony, we will highlight and
    answer questions for you that will delineate what is being
    done.
        The National Defense Strategy identifies three lines of
    effort to counter the increasingly complex security environment
    that we presently face. The first is to build a more lethal and
    ready force. The second is to strengthen alliances. The third
    is to reform the way that we do business.
        I am going to highlight a couple of the major muscle
    movements that we are making.
        We are increasing lethality and readiness through targeted
    investments in weapons platforms and munitions, while enhancing
    our partnerships with the private sector. As an example,
    alongside our private sector partners, we are gleaning
    commercial best practices to increase efficiency and flow in
    our maintenance facilities to turn those platforms back to the
    fleet as quickly as possible.
        The Navy/Marine Corps team is strengthening our network of
    allies and attracting new partners through joint exercises such
    as RIMPAC [Rim of the Pacific Exercise], Trident Juncture,
    Malabar, and Bold Alligator, all the way increasing
    opportunities for our personnel and their allied counterparts
    to study together, serve together, and operate as a single
    unit. Teaching, learning, and exercising together seals a long-
    term bond with those that will be part of the fight, if called
    on. Aligned and training allies and friends are our force
    multiplier both in manpower, ideas, and capital assets.
        We have made business process reform a top priority. At
    every level we must become--and we are moving there--to be a
    continual learning enterprise, identifying best practices from
    outside the building, promoting a culture of problem solving,
    and achieving efficiency at the speed of relevance. Recent
    examples of this include the newly revised surface force
    training and readiness manual, which places more focus on
    training and changes the delivery strategy of basic phased
    training to ensure ships are able to continuously train during
    the optimized fleet replacement plan cycle. This, coupled with
    the establishment of the Marine Skills Training Centers in both
    Norfolk and San Diego, enable surface warfare offices to
    develop their mariner skills throughout their career. They are
    increasing the ability of the United States Navy and this shows
    what we are investing in our people.
        The American taxpayers provide us with a treasure, and in
    return, we must protect them from the risks associated with an
    ever-changing world. We owe it to them to ensure that every
    single dollar we invest has a return on lethality. We must do
    this to fulfill our oath to them.
        We have more examples of our efforts put forth to increase
    readiness and lethality. While we have been focused on
    addressing root cause issues that we face, you should be aware
    that we are making systemic changes that will take time to
    meaningfully move the needle. In order to effect our goals, we
    must, ladies and gentlemen--we must have consistent funding.
    Any breaking in that consistency will have dire effects on the
    process and progress that we have made to date.
        We appreciate the support and the oversight of this
    Committee, and on behalf of the world's finest marines and
    sailors, we look forward to your questions.
        [The joint prepared statement of Mr. Spencer, General
    Neller, and Admiral Moran follows:]

       The joint prepared statement of The Honorable Richard V. Spencer,
             General Robert B. Neller, and Admiral William F. Moran
        Chairman Wicker, Chairman Sullivan, Ranking Member Hirono, Ranking
    Member Kaine, distinguished Committee Members. On behalf of our
    sailors, marines and civilians serving around the world, thank you for
    your bipartisan efforts to restore funding stability to the Department
    of the Navy. The foundation for restoring readiness and increasing
    lethality has been set. Now we must build on that foundation with a
    sense of urgency, with a focus on our people, capabilities, and
    processes. While we have much to do, we are well underway, and I will
    highlight some of our progress.
        The National Defense Strategy identifies three lines of effort to
    counter the increasingly complex security environment we face. The
    first is to build a more lethal and ready force. The second is to
    strengthen alliances. And the third is to reform the way we do
    business.
                     building a more lethal and ready force
        We're increasing lethality and readiness through targeted
    investments in weapons platforms and munitions, while enhancing our
    partnerships with the private sector. We are gleaning commercial best
    practices to increase efficiency and flow in our maintenance facilities
    to turn the platforms back to the fleet as quickly as possible.
        Overall investment in naval readiness has increased through funding
    for ship operations, ship depot maintenance, aviation depot
    maintenance, aviation spares, and flying hours. The Navy has
    accelerated acquisition for several key systems, including the Next
    Generation Frigate, MQ-25 unmanned aerial refueling system, Surface
    Navy Laser Weapons Systems and Standard Missile 6 Block 1B, while
    investing further in advanced tactical munitions including tactical
    tomahawks, long-range anti-ship missiles, rolling airframe missiles,
    and heavy weight torpedoes. The Navy has also significantly accelerated
    ship acquisition, procuring 22 Battle Force Ships over fiscal year 2017
    and fiscal year 2018, while decommissioning nine ships.
        The Marine Corps has increased modernization investments over the
    last three fiscal years, including 82 F-35 aircraft and 16 CH-53K and
    significant investments in the protected mobility of Marines at sea and
    ashore through acquisition of 56 new Amphibious Combat Vehicles.
    Enhanced investments also include close combat lethality equipment for
    Marine infantry, High Mobility Artillery Rocket Systems, advanced air
    defense systems, initial investments in a long range, ground-based,
    anti-ship missile system, and improved command and control systems
    aboard amphibious warships. All of the above enhance the Marine Corps'
    ability to provide enabling lethality to the Naval Force in a naval
    campaign at sea and from the sea.
        We're also increasing the readiness of our existing fleet with $1.1
    billion in additional funding executed for ship maintenance; an
    increase from $8.7 billion in fiscal year 2017 to $9.8 billion in
    fiscal year 2019. This additional funding enables ships to begin
    deployment training on time with improved materiel condition and
    modernized combat, communications, and engineering systems. We've
    partnered with our shipyards, public and private, to improve
    efficiency, reducing the maintenance backlog and increasing
    productivity vital for future naval growth. In the past 3 years we've
    reduced lost days to maintenance in the public shipyards by 11 percent
    (40 percent if excluding USS Albany and USS Dwight D. Eisenhower). In
    the past two years we have reduced workload carryover by 46 percent,
    which reflects our efforts to balance workload to capacity in order to
    improve productivity.
        We've aggressively gone after readiness challenges in our
    operational submarine fleet, and identified three key drivers: public
    shipyard capacity, shipyard productivity, and parts availability.
    Working with our industry partners, we've been able to allocate
    multiple submarines to private shipyards in order to alleviate the
    disparity between demand and capacity within our public shipyards. Our
    first-ever Shipyard Infrastructure Optimization Plan, delivered to
    Congress earlier this year, establishes our roadmap to upgrade our
    drydocks, facilities, and equipment to improve overall productivity.
        Today's naval shipyard training and development is a combination of
    class room, learning center development (hands-on in safe to learn
    environments), and on-the-job experience. In previous years, training
    could take up to 4 years, as the majority of the training and
    development was shadowing an experienced mechanic while `on-the-job'.
    Naval shipyards have now reduced the time it takes to train and develop
    a worker by a least 50 percent. For example, it used to take over two
    years to train the top two trade skills (Marine Machinist and
    Pipefitter) at the four naval shipyards, but now, training and
    development for these skills has been reduced to 6-12 months.
        The Marine Corps made significant improvements and investments in
    aviation readiness. Flight hours and aircrew proficiency are on-track
    to meet service goals. On average, Marine squadrons last year achieved
    readiness rates above service combat readiness standards for the first
    time since sequestration. Average flight hours per aircrew increased
    from 13.5 per month in fiscal year 2016 to 17.9 in fiscal year 2018, an
    increase of 32.6 percent; and the Marines invested heavily in aviation
    sustainment with the fiscal year 2017, fiscal year 2018 and fiscal year
    2019 budgets. Over $1.6 billion in parts will be delivered in total
    over that time to Marine aviation flight lines to improve the material
    condition of the aircraft to the service standard ahead of forecast.
    Marines continue to work aggressively to ensure the highest possible
    ground equipment readiness. Over the last three years, average
    readiness for mission essential ground equipment has increased to 92
    percent in the active component operating forces and 95 percent in the
    maritime prepositioned force.
        All of these investments are increasing our readiness and lethality
    capabilities. But our most important investments are in our greatest
    resource--our people. The Department of the Navy has increased the
    active duty force to 329,867 as of September 2018. We're also making
    key hires in developing areas, such as the force the Marine Corps has
    established for offensive and defensive cyber operations. We've also
    accelerated efforts to hire and train new public shipyard workers,
    bringing the total workforce at public shipyards from 34,918 in fiscal
    year 2017 to 36,696 in fiscal year 2018, meeting our fiscal year 2020
    goal of 36,100 full-time equivalent workers one year earlier than
    originally planned.
        To better assist and retain our personnel, while delivering on a
    promise to provide Sailor-focused customer service and around-the-clock
    assistance, we opened the MyNavy Career Center (MNCC) in September to
    provide Sailors with 24/7 human resource services. In the first month,
    MNCC resolved over 30,000 service requests, approximately 1,100 per
    day. The Tier 1 contact center agents resolved 88 percent during the
    initial contact and 96 percent were resolved in three days or less
    without the need to transfer issues to our Tier 2 subject matter
    experts. We also announced the military parental leave program to
    consolidate the legacy adoption, paternity and maternity leave
    policies, and to define primary and secondary caregiver leave
    guidelines. Finally, we implemented the Targeted Reentry Program to
    enable key former personnel a streamlined return into Active Duty,
    should they choose to return. The program also empowers our commanding
    officers to identify their high performers who do not intend to
    affiliate with the Ready Reserve and offer them a path to return to the
    Navy.
        As we migrate to a continual learning organization, the Department
    of the Navy continues to invest in key development opportunities for
    our force, including developing the Naval Postgraduate School as a
    premier, relevant research and education institution. And we've
    increased readiness by adopting advanced technologies such as additive
    manufacturing that will flatten the supply chain, and more importantly
    promote a culture of problem solving to enable our sailors and marines
    to ``fix it forward''.
        In the wake of the tragic USS Fitzgerald and USS John S. McCain
    collisions, the Department of the Navy conducted a Comprehensive Review
    (CR) and Strategic Readiness Review (SRR), which identified readiness
    reforms as a critical priority. In January of 2018, the Navy
    established the Readiness Reform Oversight Council (RROC) to oversee
    implementation of CR/SRR recommendations as well as related
    recommendations from other sources including the Government
    Accountability Office and the Navy Inspector General.
        As of today, the RROC has considered 111 recommendations and fully
    implemented 78, with the remaining recommendations on track for
    adoption in accordance with programming schedules. We are now beginning
    to witness the benefits provided by those recommendations, from
    increased sea experience for our Surface Warfare Officers, to priority
    manning for the Department's Forward Deployed Naval Forces, to
    restoring deliberate scheduling and implementing a new force generation
    model throughout U.S. Seventh Fleet, to Naval Surface Group Western
    Pacific which ensures readiness concerns are voiced in the natural
    tension between force supply and demand.
              strengthening alliances and attracting new partners
        The Navy Marine Corps Team is strengthening our alliances and
    attracting new partners through joint exercises such as RIMPAC, Trident
    Juncture, Malabar and Bold Alligator, and increasing opportunities for
    our personnel and their allied counterparts to study together, serve
    together and operate as a single unit. Teaching, learning and
    exercising together seals a long term bond with those that will be part
    of the fight. Aligned and trained allies and friends are our force
    multiplier.
        The foundation of our credibility as a reliable partner and
    effective deterrent is our forward presence. From the vast expanses of
    the Pacific, to the restricted waters of the Arabian Gulf, to the
    Caribbean, the Mediterranean, the North Atlantic and the Arctic, we are
    on watch alongside our allies and partners around the clock.
                            business process reform
        The Department of the Navy has made business process reform a top
    priority for our civilian and military leadership, promoting a
    continual learning enterprise that can identify, pursue, and rapidly
    achieve effectiveness and efficiency at the speed of relevance. For
    example, we've embraced lessons from commercial airline heavy-
    maintenance practices and their data-driven approach to improve Naval
    Aviation's maintenance processes. This will be the foundation of the
    Navy Sustainment System. Fleet Readiness Centers are a good example of
    this kind of partnership, focused on reducing a significant backlog in
    aviation component repair parts. This effort is just one example of how
    the Naval Aviation Enterprise is working to improve readiness and
    achieve Secretary Mattis' goal of 80 percent mission capable aircraft
    in our Fleet Strike Fighter squadrons by the end of fiscal year 2019.
        As part of ongoing business reform initiatives, the Department of
    the Navy has reviewed duplicative programs and programs that are no
    longer mission essential. This has resulted in the divestiture of the
    Navy's legacy F/A-18 Hornets (which the Marines continue to fly), the
    transition of the HH-60H reserve squadron from legacy aircraft to newer
    MH-60S aircraft, and a review of Marine Corps training munitions.
    Representative investments resulting from the reform initiative include
    an additional DDG-51, one additional F/A-18 E/F, increased procurement
    of Rolling Air Frame missiles and MK48 torpedoes, and funding afloat
    readiness to maximum executable levels.
        Moreover, the Department is focused on improving business processes
    heightened through the audit of our financial statements. For example,
    the audit work has revealed that the complexity of our distribution
    network is too great for effective management, and this in turn leads
    to challenges with knowing the location and condition of all the parts
    and equipment we own. The audit has also revealed that we move money
    internally too many times before it arrives in the hands of the people
    who actually perform the work. The Department of the Navy is using this
    information to streamline our operations and reimagine how our support
    functions can be modernized in real time to increase readiness,
    lethality and efficiency.
        The American taxpayers provide us with their treasure, and trust us
    to protect them from a dangerous world. And we owe it to them to ensure
    that every single dollar is invested in the most effective manner
    possible to fulfill our sacred oath. We appreciate the support and
    oversight of the Senate Armed Services Committee on behalf of the
    world's finest Marines and Sailors, and look forward to your questions.

        Senator Wicker. Thank you, Mr. Secretary.
        Mr. Pendleton, I understand you also have an opening
    statement. You are recognized.

    STATEMENT OF JOHN H. PENDLETON, DIRECTOR, DEFENSE CAPABILITIES
     AND MANAGEMENT, UNITED STATES GOVERNMENT ACCOUNTABILITY OFFICE

        Mr. Pendleton. Chairman Wicker, Chairman Sullivan, Ranking
    Member Hirono, Ranking Member Kaine, thank you for inviting me
    to discuss our body of work on Navy and Marine Corps readiness
    issues.
        I will break my statement into two parts. First, I will
    describe ship and submarine readiness, and then I will move to
    aviation.
        Just over a year ago, I had the grim duty to report to you
    that Navy training was not up to its own standards. Training
    requirements at that time were being waivered at an alarming
    rate. The Navy, in a series of internal studies, concluded that
    this lack of training had contributed to the deadly collisions.
        When I learned that I would be testifying at this hearing,
    I decided to go out to Japan to see for myself how things were
    going. What I found was encouraging. The Navy has stepped up
    training to make sure that ship crews are deployed before they
    train, and they have committed to provide dedicated training
    time going forward. Things had improved markedly.
        However, this is keeping the sailors very busy. We talked
    to 10 groups of sailors on two ships out in Japan, and they
    told us the sense of morale was high, but that they are still
    working very hard, sometimes 100 hours a week or more. I am
    concerned that this reveals an underlying problem still facing
    the Navy, that it simply is not yet putting enough sailors on
    the ships to cover the workload.
        We reported on this last year, and the Navy is working to
    develop ship manning requirements, both at sea and in port, and
    we eagerly await the results of those studies, as I suspect a
    number of hardworking sailors do as well.
        Completing maintenance on time has proven to be a wicked
    problem. Since 2012, the Navy has lost more than 27,000 days of
    ship and submarine availability due to delays getting in and
    out of maintenance. 2018 was particularly challenging with the
    equivalent of 17 ships and subs not available because they were
    waiting to get into or out of maintenance.
        Looking forward, I do see some cause for concern because
    the dry docks are short about a third of the capacity that will
    be needed to conduct the planned maintenance that the Navy
    already has on the books, and that does not include the fleet
    increase.
        Moving to aviation, the issues center around sustaining
    older aircraft while incorporating new aircraft into the fleet.
    In a report earlier this year, we looked at seven different
    Navy and Marine Corps aircraft, and none were meeting
    availability goals, and those availability goals were less than
    80 percent. Many had delays in depot due to personnel and parts
    shortages and unexpected repairs due to their age. As you know,
    the Hornet, the Harrier, and other aircraft are 20 or more
    years old, and we are having to extend their service life to
    bridge the gap until more F-35s come into the fleet.
        Moving to the F-35, early indications incorporating the
    fleet is we are seeing some challenges there as well. We found
    in a report last year that depot capabilities were already 6
    years behind. What that meant as a practical matter is it took
    months, sometimes 6 months or more, to get the parts repaired
    and back out to the fleet.
        I understand the rush to field F-35, and I know the Navy
    and the Marine Corps and DOD is working on this. But we feel
    additional attention has to be paid to sustaining the F-35.
        As mentioned, the Secretary of Defense has established a
    goal to have 80 percent mission capability of several aircraft,
    including the F-35, by next year. This will be difficult to
    achieve in my assessment, and I offer a couple of cautions as
    we move forward on this, Mr. Chairman.
        Consistent and clear definitions will be critical. There
    have been some efforts to define what we mean, both in the
    numerator and the denominator of that 80 percent. I think that
    is a step in the right direction. This is basically the 80
    percent of what question.
        Secondly, we need to be sure that everyone understands what
    mission-capable is. It does not mean the aircraft can do all
    the missions it might be assigned to it. That is typically
    called fully mission-capable, and that is typically lower
    because they need to perform all the missions, including the
    high-end missions. When we looked at the F-35 last year, it had
    a 15 percent fully mission-capable rate. This has significant
    implications for a high-end fight because those difficult
    missions are the ones that are often hard to find time to train
    for.
        In closing, Mr. Chairman, as my statement indicates, we
    have 45 recommendations to the Navy and the Marine Corps and
    DOD. I am happy to report to you there is progress being made
    on those recommendations. We see actions being taken. We have
    not closed that many of them, but we are working closely with
    the Navy and monitoring progress and I am encouraged by what I
    see. But make no mistake, it will take significant time to
    rebuild the readiness of the ship, submarine, and aviation
    fleets, and it will require sustained attention.
        We stand ready to assist you in your oversight, and I am
    happy to take any questions.
        [The prepared statement of Mr. Pendleton follows:]

        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Senator Wicker. Thank you. A very plain and forthright
    testimony that we need to heed.
        Secretary Spencer, we are entering a time of divided
    government in this Congress. We will soon have a Republican
    Senate and a Democratically controlled house, and we are going
    to have to join hands as Americans and give you the resources,
    give all four of you gentlemen and the people you represent the
    resources that you need.
        Let me just remind folks listening that there is a
    provision in a statute that has not yet been repealed, and if
    it should be allowed to take effect, it would put us back in
    sequestration, an unthinkable result, and an utterly
    irresponsible act that I feel sure this Republican Senate and
    this upcoming Democrat House will avoid.
        I remember a previous Secretary of the Navy, Secretary
    Mabus, telling me in a budget hearing that they had no
    contingency plans for sequestration because it was so utterly
    irresponsible and unthinkable that it could not happen. And lo
    and behold, it happened. We received testimony before our full
    Committee some 3 years ago from a previous CNO that the
    sequestration cuts resulted in five canceled ship deployments,
    $2 billion in deferred procurement, a 30 percent cut to
    facilities sustainment, increased maintenance backlogs, and
    approximately one-half of the Marine Corps home station units
    at unacceptable levels of readiness. The CNO could have gone on
    and on on that.
        I do not think this is going to happen, but it is in the
    statute and unless we take action, bipartisan action, to give
    our citizens the security they need, it is there in the
    statute, and we must be mindful of that.
        Secretary Spencer, you first, then General Neller, and then
    Admiral Moran. Please give us illustrations of what impacts
    that would result in if the sequestration kicks back in as is
    currently slated under current statute. Secretary Spencer, I
    will let you go first.
        Secretary Spencer. Mr. Chairman, devastating in many ways.
        First, right off the bat, the money that you gave us in
    2017, 2018, and 2019--you are going to hear what is being done.
    We are doing some very unique and trailblazing efforts to
    really get us back on our feet into the fight at fighting
    weight. We are on the bicycle peddling. It took us a while to
    get up.
        This would just knock us down, flat down. If you look at
    what sequester does, it is a $26 billion cut to the Department
    of the Navy. If the President has MILPERS [military personnel]
    as exempt or 19 percent non-exempt, 14 percent. It is
    devastating.
        I am more than happy to share with you all later a graphic
    that I put together here, going around the country for
    everyone's district, what this would mean that we would have to
    do if sequestration hit, and no area of the country is really
    unscathed by this.
        Senator Wicker. Let us go ahead and put that in the record
    right now, Mr. Secretary.
        Secretary Spencer. Will do.
        Senator Wicker. Without objection.
        [The information follows:]
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        Secretary Spencer. Will do, sir.
        That is the bottom line. I turn it over to my two
    compatriots.
        Senator Wicker. General Neller?
        General Neller. As the Secretary said, we are making
    progress, certainly not as fast as we would like or you would
    like, but I can show you quantifiably how our readiness is
    improving.
        We have a unique problem. I mean, we are at an inflection
    point for our Nation. We have to maintain current operations,
    and those are being reviewed and looked at. We have to
    modernize a force that has been at war for 17 years, and then
    we have to prepare for something we have not had to prepare for
    since the Cold War to fight a peer adversary. Those particular
    nations have had to do nothing other than recapitalize their
    force.
        If we were forced back to a sequestration level, it would
    be more than just the Blue Angels not doing air shows and
    people not going to conferences. It would be units getting
    ready to deploy later. It would cause us to look at our force
    structure and have to make ourselves a smaller force, which we
    lose capacity, which means we would have less presence around
    the world. It would delay almost every single acquisition
    program that we have underway, ground and air, to try to not
    just modernize but to create future capabilities for the force
    that we think we need to be to defend the interests of this
    Nation.
        I would never underestimate the impact it would have on the
    force itself. It is important for--I know this Committee
    understands that, but the American people understand. This is
    not just an all volunteer force. This is an all recruited
    force. They expect that when they are recruited and they sign
    up, and we send them--we want all games to be away games. We do
    not do home games--that they are going to have the best gear
    and the best training that this Nation can provide. We would be
    challenged to do that. Obviously, those that are going to be
    forward deployed are going to get the best that we have got and
    they are going to get the most ready capable equipment. But the
    time for them to get ready would take longer, and the depth on
    the bench, if there were an unexpected contingency, the
    readiness of that force would go down. It would be devastating.
    I agree with the Secretary.
        Senator Wicker. Thank you.
        Admiral?
        Admiral Moran. Thank you, Mr. Chairman.
        When I think about the Budget Control Act, sequestration,
    and even multiple continuing resolutions as opposed to a
    stable, predictable budget, I go back 5 years ago or so when
    the first time we went through this occurred. It has taken us 5
    years to really get back on our bicycle, as the Secretary
    referred to. So I think about this with a component of time,
    time for our sailors to learn how to operate their gear, time
    to fly airplanes to become proficient and beyond proficient,
    but experts, masters at what they came in the Navy to do. I
    think about time for families, notification for PCS [permanent
    change of station] that gets driven down to 1 or 2 months
    instead of 6 months as it should be. I also think of time in
    terms of our ability to recover if we were to go back to those
    levels again. Even though we would probably start to recover,
    you are talking 5 years if you just use the recent last 5 years
    as an example. The component of time is time you cannot get
    back. So we lose proficiency. We lose expertise, and we have to
    recover that by skipping generations of people who missed the
    opportunity during the time when we did not have the resources
    available.
        Senator Wicker. Thank you, gentlemen.
        Senator Hirono?
        Senator Hirono. Thank you, Mr. Chairman.
        I mentioned in my opening statement the concern I have
    about our public shipyards, and I know that the Navy has a new
    plan for modernizing the public shipyards called the Shipyard
    Infrastructure Optimization Plan. I consider this to be a major
    improvement after nears of neglect of this important
    infrastructure. Certainly there have been military construction
    projects and various upgrades over the years, but there is
    nothing like a comprehensive plan that can be implemented to
    really move us to the point where we need to be.
        The Navy told us earlier this year that the Navy would
    issue a master plan for modernizing the four public shipyards
    in the fall of 2018. That master plan was intended to guide
    Navy investments over the next 20 years.
        Secretary Spencer, where does the Navy stand on
    implementing that master plan?
        Secretary Spencer. Underway, Senator. The key that we are
    looking at right now when we fund and we are looking to build
    up the POM [Program Objective Memorandum] is basically three
    buckets, and that is our legacy systems, what I call our
    installed base, modernization, and then Force 2.0, which are
    our present investment for future weapons, think AI [artificial
    intelligence], directed energy, et cetera.
        We have stepped back and taken a close look because the
    fact of the matter is until we get our shipyards, specifically
    for our underwater fleet, our public shipyards primarily,
    increased flow and increased efficiencies for throughput, we
    are hurting ourselves. I am responsible with my Title 10 hat to
    man, equip, train, and deliver those assets needed by the
    combatant commanders. This is a key focus. We are allocating
    dollars. Hawaii is one of the first projects that we are
    looking at right now. We are sitting there taking an industrial
    flow overview look on how we are going to rebuild these. The
    fact of the matter is that the science of industrial flow has
    progressed tremendously since we last touched these shipyards.
    We are going to modernize them.
        Senator Hirono. I am glad to hear that Pearl Harbor is one
    of your first shipyard focuses. I would be very interested to
    know what specifically is happening at Pearl Harbor that will
    lead to its modernization.
        Mr. Pendleton, has the GAO reviewed the Navy shipyard
    modernization plans? If so, have you drawn any conclusions from
    that review?
        Mr. Pendleton. Ma'am, we have a review underway looking at
    how that is going. We have work that indicates the age and
    condition of the shipyards and have looked at the impact on
    maintenance delays. The documentation itself--we are still
    looking at that.
        Senator Hirono. When you say looking at it, when can we
    expect a report?
        Mr. Pendleton. Let me check.
        Summer, ma'am.
        Senator Hirono. I am sorry?
        Mr. Pendleton. Summer of next year, probably May, June. But
    we would be happy to brief you earlier.
        Senator Hirono. Meanwhile, the modernization plans are
    proceeding. They are being implemented per our Secretary. So
    thank you very much.
        Mr. Moran has mentioned that it would be pretty challenging
    to get to the 80 percent aircraft availability. Are we being
    realistic in expecting, Mr. Secretary, an 80 percent readiness?
        Secretary Spencer. It is a stretch goal, Senator, but it is
    a stretch goal that we will take. If I could bring you out to
    one of our depots out west to show you what we are doing as a
    program for the F-18 Super Hornet--we have hired a fellow who
    ran Southwest Airlines maintenance. In a matter of 8 weeks--and
    I can turn it over to the Vice here because he sits on the
    steering committee for this program. In 8 weeks, we have
    increased throughput by 40 percent.
        Senator Hirono. There is a concern about something called
    innovative accounting techniques to indicate to us that these
    80 percent goals are being met. Can you assure us that that is
    not what you are going to provide us?
        Secretary Spencer. It is not going to be done by pencil
    whipping, I will tell you that.
        Senator Hirono. Thank you.
        I think it would be good for me to go and take you up on
    that visit.
        Now, I did want to get to the corrosion issue because we
    recently had multiple deaths as a result. Just this week the
    Marine Corps released their official results of the
    investigation into the crash of a Marine Corps KC-130T aircraft
    in Mississippi in 2017. The investigation found that aircraft
    crashed because a corroded propeller blade came off during the
    flight killing all 16 people aboard.
        Secretary Spencer, can you give us your views on the
    importance of pursuing corrosion prevention and mitigation
    programs, as you seek to take good care of the people and
    equipment under your control? Of course, part of what happened
    in that tragic incident was that there was inadequate training
    for the maintenance people. So can you tell us what you are
    doing to address the corrosion issues?
        Secretary Spencer. I can, Senator, in two ways. One is how
    we go about doing our maintenance. The fact that corrosion was
    the actual fault in that accident, the real problem was that we
    were not doing the appropriate preventative maintenance in the
    right way as outlined in the procedure. That has been corrected
    on both fronts.
        Now, when it comes to corrosion in general, we work in a
    maritime environment, highly corrosive. This is something that
    we are actually enhancing our efforts at because if you could
    see, when we start peeling back the onion on our maintenance
    issues, corrosion ends up being one of the biggest manpower
    consumers. With the chemistry that is out there today, we have
    the ability to really address this, along with process, to stay
    ahead of it.
        Senator Hirono. I think when I met with you, I was very
    interested in making sure that when we purchase the ships, et
    cetera, aircraft, that corrosion is one of the factors that we
    would consider in putting out the contract to begin with, that
    all these people should be looking at ways that they can
    incorporate anti-corrosive products into the crafts.
        Secretary Spencer. Most definitely, Senator. I mean, if you
    were to see the efforts that are going on now with two of our
    prime suppliers, they are partners in this problem. They are
    not simply contractors. We are living it through them saying,
    one, what can you bring to the table that is new since the last
    time we let this contract, and two, what are best practices we
    are seeing out there amongst other areas and what can we do to
    improve the way that we battle this.
        Senator Hirono. Thank you.
        Thank you, Mr. Chairman.
        Senator Wicker. Senator Sullivan?
        Senator Sullivan. Thank you, Mr. Chairman.
        I appreciate the witnesses joining this joint Committee
    today.
        General Neller, it has been nearly 3 months since Hurricane
    Florence made landfall in North Carolina. Have you had the
    opportunity to assess the order of magnitude to the impacts of
    Camp Lejeune and the challenges we see there?
        General Neller. Yes, sir, we have.
        Senator Sullivan. What are the numbers? Do you have
    numbers?
        General Neller. Camp Lejeune is not as dramatic when you
    look at it with your own eyes as to what happen on the
    panhandle of Florida. The storm was very slow moving. There was
    a lot of wind, but it sat on top of the base and it rained for
    2 or 3 days. A lot of the buildings at Camp Lejeune are very
    old. They suffered roof damage, exterior damage, and then when
    that happened, the water got inside, and so you end up with
    mold and other things.
        And so there was an effect on housing, which we are working
    with a private vendor for them to fix that, and they are making
    some progress, not as fast as we would like, but they are
    making progress.
        On the facilities and structures for us, if you were to
    repair it, it would be one number, but if you were to take the
    buildings that we would consider to be not worth the cost of
    just repair, that they needed to be rebuilt, the total bill
    comes to about $3.6 billion.
        Senator Sullivan. Let me ask another question for you,
    General. You mentioned some of the bad consequences if we went
    back into sequestration, and you put forward a list that was
    pretty significant that I think should get everybody's
    attention in terms of negative consequences.
        One thing you did not mention, which is obviously an issue
    that we have raised here, is, to be blunt, the increased
    probability that some of the really bad things that we have
    seen could increase in terms of their potential. I am talking
    about deaths in training and deaths in the activities of our
    military. Is that another risk if we go into sequestration?
    That is the ultimate risk. Right? I love the Blue Angels, but
    my biggest concern is that we see more of these deaths, and the
    American people--none of us should tolerate it. Is that a risk?
        General Neller. When you are not able to train as hard and
    as long and fly as many hours as you require to maintain a
    substantial training level that makes you qualified, based on
    current standards, yes, Senator, that is a risk.
        Senator Sullivan. Okay. That is really important to know.
        Mr. Pendleton, you also mentioned--I think we all recognize
    we have a readiness problem, readiness challenge. You just
    mentioned in your opening testimony it is going to take
    significant time to rebuild readiness. Let me ask just the
    basic question. What in your view--you kind of have the outside
    view, the independent view--put us in this hole in the first
    place? Remember, it is not just readiness. This is a readiness
    challenge that is killing our marines and sailors. What put us
    in the hole? Was it the fact that from 2010 to 2016, the DOD
    budget was slashed by 25 percent? A lot of people do not know
    that. That is a fact. Is that it?
        Mr. Pendleton. I do not think budgets helped.
    Unpredictability of budgets certainly did not help.
        But it was also a demand and supply problem. I mean, the
    Army, if you go back a few years--they were able to bring more
    folks home and retrain and get repetitions through the combat
    training centers.
        Senator Sullivan. So succinctly, what put us in the
    readiness hole?
        Mr. Pendleton. I think for the Navy and Air Force is what I
    am getting to, is that demand did not really slow down, and so
    they had to continue to find ways to meet the demand with a
    shrinking fleet. With budgets like they were, they affected
    sustainment accounts, which then had a ripple that we are
    trying to work off now.
        Senator Sullivan. Let me ask, Mr. Secretary. You know, one
    of the things--and I touched on it briefly in my opening
    statement. There has been a lot of interest from this Committee
    on what is happening in the Arctic, and it is not just me as an
    Alaska Senator. It is actually broad-based. We have had a
    number of provisions in the NDAA, including the demand from the
    Department of Defense for a new Arctic strategy. As you know,
    the Russians are building up their capability massively, you
    know, huge exercises, new airfields, new ports, 40 icebreakers,
    building 13 more. Some are nuclear powered. Many are
    weaponized.
        Secretary Mattis, in his visit to Alaska this summer and in
    a statement to this Committee, said it is a strategic area we
    need to pay more attention to. You and I had the opportunity to
    visit potential areas, Adak, Port Clarence, Nome, and you
    recently said in a speech that we need a strategic Arctic port
    in Alaska.
        Can you focus on some of the issues that you see as
    challenges from the national security perspective, National
    Defense Strategy, and how the Arctic plays into that? Can I get
    your commitment, as required in statute, to work with this
    Committee on a revised analysis of a strategic Arctic port?
        Secretary Spencer. One, you do have my commitment, Senator.
    Last October when I was newly minted, one of my first trips
    outside the country was to the Arctic, Kavivium and Reykjavik,
    and that was my educational curve for really what was going on
    in the Arctic. At that point, our Russian friends were warming
    up five airstrips, 10,000 Spetsnaz troops up there for, quote/
    unquote, search and rescue according to the ambassador from
    Russia. The Chinese are up there. Everybody is up there.
        Senator Sullivan. Everybody but us.
        Secretary Spencer. Well, Senator, we are up there under the
    sea and in the air.
        Senator Sullivan. But you cannot do a FONOP [freedom of
    navigation operation] under the water.
        Secretary Spencer. I agree to an extent.
        But I am getting to my point, which is we are looking at
    how we can get up there. This is portfolio management. If I had
    a blank check for everything, it would be terrific to ice-
    harden ships, but with the demand that we have right now, it is
    unaffordable. Do we have an avenue that could possibly work at
    seasonal times to go up there? I believe we do. We are looking
    at that right now. The Coast Guard is getting its heavy ice
    cutter. We would have to have that in tail, if in fact there
    was ice. We need to get up there. I can commit to the fact that
    we are trying to figure out how we do service that.
        You and I did go look on the coast up there for a potential
    strategic port. I think the Coast Guard, in concert with the
    Navy--we should definitely flesh out what could possibly be
    done.
        When it comes to using Alaska in the Arctic area for
    training, the Commandant and I have talked about this, plans to
    go look at doing something this summer, possibly on Adak for
    training. The Vice and I have talked about possible P-8 debt up
    to Adak. There is definite training uses and there is definite
    ability to effect the National Defense Strategy with Arctic
    activity.
        Senator Sullivan. Thank you, Mr. Chairman.
        Senator Wicker. Thank you very much, Senator Sullivan.
        Senator Kaine?
        Senator Kaine. Thank you, Mr. Chair.
        Secretary Spencer, I will start with you. I have chatted
    with you about the requirement in the NDAA from 2015 that is
    now live about audited financial statements for all functions
    within the DOD. We view that as a tool not just for
    congressional oversight, not just for public oversight, but we
    also view it as a tool for military leadership to manage, to
    create--I think you described in your testimony kind of a
    culture of continuous improvement. If we are going to be
    reliable on ample budgetary requests and budget certainty going
    forward, it really helps us if we believe that the DOD is using
    tools like this to promote improvement, to let go of lesser
    performing priorities or lower performing programs and invest
    in other areas, as you describe, bringing in somebody from
    Southwest to help you figure out new strategies on maintenance.
    That sounds like a good one.
        How are you using tools like the audited financial
    statements and others to try to figure out how to better
    prioritize and squeeze more value out of the dollars we give
    you?
        Secretary Spencer. Senator, the audit process at Navy from
    the day I arrived, the conversation was this is not an invasion
    into your area for a painful financial exam. This is a process
    that will give you a tool--you, a manager, a tool--to see how
    you are deploying resources and the effect of the employment of
    those resources.
        So we did change the conversation. I will tell you what. We
    have gone through our first cycle, as you know, and I think as
    we advertised day one when I was up here for my confirmation
    hearings, I do not think we will probably get a clean opinion
    for another 5 to 6 years. But that is not the issue. It is the
    learning process along the way that is critical. This cycle
    alone, we have vignettes that I can provide for you on the
    record later of events, and I will just quote a few.
        We found out that in the Navy alone, we had in excess of
    700 distribution points for parts. You know, Amazon does this
    globally with 25 centers. Do we have something to learn there?
    We certainly do.
        The ability to turn around and find out where inventory is.
    A fine example. We were missing some assets that were held by a
    contractor. In my heart of hearts, I said we will probably find
    these. This is a paper issue. It was.
        But when you work in the commercial sector, there was a
    thing that I grew up with called SAS [Statement on Auditing
    Standards] 70, which were the standards that you would provide
    your services and goods to a client. That exists amongst all
    our contractors, but it appears that we forgot to ask for that
    or we were not aware that. From this evolution, we are going to
    turn around and say when you hold assets for us, when you do
    anything for us, will you do them at the same generally
    accepted accounting standards as SAS 70? It is there, we are
    taking advantage of it.
        Senator Kaine. Well, expect to get asked questions like
    this a lot at future hearings. We really want to see how those
    are being used. To all of you.
        General Neller, I was struck by your costs on the repair of
    Lejeune. I think you put it at around 2.2. Is that right? $2.2
    billion?
        General Neller. Actually at the high end, if we costed out,
    because we do not believe it is cost effective, Senator, to
    repair buildings that are 35 to 50 years old.
        Senator Kaine. Right.
        General Neller. So if you replace these 31 buildings --
    there are actually more, but these are the ones we put into
    priority--the bill is around $3.6 billion, $3.7 billion.
        Senator Kaine. It would also be the case that it would be
    foolish to repair a building that would then be vulnerable to
    the same kind of damage with the next hurricane that comes
    along.
        General Neller. I would agree with that.
        Senator Kaine. Right. So we really ought to probably be
    looking at the higher cost. The Tindall price tag is about $5
    billion, as I understand it. That is not the purpose of this
    hearing.
        But talk to me about this top ten list. In the Navy/Marine
    side, there is a report due, pursuant to the NDAA, this month
    about sort of the top ten installations that you feel have
    vulnerabilities because of climate. When are we likely to see
    that report?
        Secretary Spencer. Senator, that should be forthcoming
    soon. I will get back to you on the exact date. I have seen the
    list, and I do not know where the process is in actually
    finalizing it and signing it out to you.
        But not surprisingly, it is going to be what you might
    expect. In the Navy, it is going to be oceanfront areas, water
    rising issues. It is going to be areas exposed to what we have
    seen now as 100-year storms that come every 2 or 3 years. We
    are going to have to start addressing this so we do this
    correctly and spend the money correctly.
        Senator Kaine. We had a very well attended hearing in
    Hampton Roads now nearly 2 years ago, a very bipartisan
    congressional delegation talking about sea level rise and the
    effect on Norfolk and other basis, Langley and others in the
    area. And it was pretty sobering. And we started thinking about
    if there is a future BRAC [Base Realignment and Closure] round
    or any kind of physical base rationalization, that has got to
    be a vulnerability that people would be concerned about. But
    one of the DOD witnesses said you should worry about sea level
    rise, but try running a base in an area where there is a
    persistent drought. It is not just sea level rise. There are
    all kinds of weather emergencies and challenges that all of the
    services are dealing with on the climate side. And we look
    forward to that report because it will help us do our job
    better when we get to NDAA and appropriations.
        Thank you, Mr. Chair.
        Senator Wicker. Thank you, Senator Kaine. And we certainly
    ought to be able to deal with issues like that apart from any
    BRAC round we might have.
        Senator Rounds?
        Senator Rounds. Thank you, Mr. Chairman.
        Gentlemen, thank you all for your service to our country.
        Mr. Pendleton, some of the numbers right now with regard to
    aircraft and their mission-capable, not fully mission-capable,
    numbers are still pretty disturbing. The numbers, as I am
    reading them--and I am looking at comparisons between the
    different types of aircraft and the different branches of
    government. Clearly there is a difference between the
    requirements for each one of these aircraft in terms of the
    missions that they are supposed to be capable of. But I would
    like your thoughts on a couple of things.
        Number one, the Navy's F/A-18 E&F, the Super Hornets, which
    are the newest of the Hornets. They have a mission capable rate
    of 49.1 percent right now, according to the most recent stats
    that we have. Compare that with the Marine Corps who have a
    mission capable on their older ones, their legacy Hornets, of
    60 percent, clearly a higher percentage rate. I would like your
    thoughts as to why Marines have a higher mission capability,
    the same depot or different depot. If you compare that with the
    Air Force, their F-16C aircraft, not their newest F-16's, they
    have a 70 percent mission capable rate.
        Why is it? What is the difference in discrepancy? Is it a
    matter that the intensity of the operations for the Navy is
    that much greater? Is it a matter of best practices? What in
    your opinion is causing the differences between the mission-
    capable differences?
        Mr. Pendleton. You know, I am going to have to get back to
    you with a better answer. But I mean, it has to do with the
    experience level at the depots, the throughput at the depots.
    We just have not done the comparison you are talking about, and
    I do not feel comfortable opining about it. But we will look at
    it because we visited all those places in recent years. Some of
    the folks to my right might be able to talk to you about that,
    but I do not feel comfortable making those comparisons.
        Senator Rounds. Admiral Moran, would you care to comment on
    it?
        Admiral Moran. Senator, thank you for the question.
        I think we got to make sure that we are comparing apples
    and apples. Numerators and denominators matter here.
        Our current statistics on the Super Hornet are the mission
    capability rate for Super Hornets in operational squadrons that
    would have to go to the fight, if called to, is at 66 percent
    and rising.
        Senator Rounds. So the numbers that I have got right now
    with regard to 49 percent are older numbers?
        Admiral Moran. They are much older numbers. And that 49
    percent is much more reflective of the total active inventory,
    to included airplanes that are in the depot today, which are
    not in reporting. There is a lot of math here and I do not want
    to confuse it. But we are on this path, this stretch goal to
    the Secretary's point, of 80 percent. Last year, when I
    testified, we were in the mid-40's.
        Senator Rounds. Then let me ask this. I really do not mean
    to cut you off, but I think you have answered my first
    question.
        What about the F-35's? Right now, the C model which you are
    implementing at this point--the 35C indicates, according to the
    data that we have got, about a 17 percent mission-capable rate.
    Is that an accurate number today?
        Admiral Moran. Well, sir, what I would share with you there
    is it is the law of very small numbers. We only have one
    operational F-35--well, we do not even have an operational F-
    35C squadron yet. We have the FRS [Fleet Replacement Squadron],
    which is our training squadron, and the law of small numbers
    means that a couple go down on a given day. Depending on when
    you report it, it could drive the percentages really low or
    really high.
        I think we need more run time on the F-35C, whereas the Air
    Force and the Marine Corps have had more run time on the F-35's
    and have a better indication I think of what you can expect.
        Senator Rounds. Okay.
        I want to move over to submarines for just a minute. Mr.
    Pendleton, the attack submarines. A year ago, we used it as an
    example of the reason why we need to improve the capabilities
    of our dry docks. The USS Boise became an example. It had been
    at dock not mission-capable, not even able to dive for a period
    of up to 3 years. I presume that that attack submarine is now
    in dry dock?
        Mr. Pendleton. I believe so. I better check to be sure if
    it still is. It is out?
        Senator Rounds. Secretary Spencer?
        Secretary Spencer. It is not there yet, no.
        Senator Rounds. It is not there yet?
        Secretary Spencer. It is January, sir.
        Mr. Pendleton. I knew it was around that. Contracted.
        Senator Rounds. So it has been 4 years then out of service
    for an attack submarine.
        Secretary Spencer. That is correct.
        Senator Rounds. Do we have any other attack submarines that
    are currently at dock, not able to dive, that are awaiting
    drydock services?
        Admiral Moran. Yes, sir, we do. We have two more that are
    not certified to dive today. Both of those go into dry docks
    after the new year, one in February and I think the next one in
    May or June. This is all part of spreading this across the
    public and private sector and addressing the submarine
    shortages.
        Senator Rounds. My time is up.
        Senator Wicker. Well, no. Why did that happen, Admiral?
        Admiral Moran. Why did what happen, sir?
        Senator Wicker. The 4-year period, the lengthy time.
        Admiral Moran. It is the age-old problem of what we talked
    about the last 2 years in this hearing where we had aging SSBNs
    which take priority in the public yards to fix because of the
    national priority on strategic deterrence.
        The next in the order of priority are our carriers, which
    as we have all testified here the last couple years, have been
    ridden very hard, high OPTEMPO [Operational Tempo], extended
    periods because of discovery work and additional maintenance
    that we were not anticipating.
        The last and standing in line to get into those
    availabilities in the public yards were our SSNs.
        And so we have begun to put them in private yards to help
    unload or level load and get submarines that need to be in dry
    dock in dry dock sooner. Boise was--you know, we talked about
    this last year, Senator. We want no more Boises. The numbers
    are coming down significantly. The standing in line has come
    down significantly. We still have a ways to go. We are not out
    of the woods yet, but I think as capacity opens up in the
    private yards and we do a better job in the public yards of
    getting our carriers out on time, we will be there.
        Senator Rounds. Mr. Chairman, if I may, just one thought.
        Senator Wicker. Please.
        Senator Rounds. A year ago, did we have three submarines
    that were waiting to get into drydock or did we have less than
    that?
        Admiral Moran. I will have to get back to you.
        Senator Rounds. Okay. It appears to me that even with the
    resources that we have allocated so far, we are going the wrong
    direction with regard to the fleet that we have got. My only
    point is that if it is a matter of resources and if you are not
    here in public testimony to tell us what the impacts of not
    having the additional resources necessary to keep these
    critical pieces in the defense of our country operational, how
    in the world can we ever go to what we know we need in a 355-
    ship Navy and support them if we are not going to be able to
    share with the American public how critical it is to maintain
    the defense posture that we have currently got. What I would
    expect, as a member of the committee, is to at least be able to
    allow you the opportunity to share what happens if we ever do
    get back into a reduced defense budget or to, heaven forbid,
    another sequestration and what the impact is to these young men
    and women that are expecting that they are at least going to
    get the tools to do their job. Then to find out that we have
    three attack submarines that have not even been able to get
    into dry dock seems to me to be something that ought to be
    shared with the American public, and they ought to understand
    how serious this problem really is.
        Secretary Spencer. I could not agree with you more,
    Senator. But as a fine example, so everyone truly does
    understand the ups and downs of this, the monies that you gave
    us to optimize the shipyards--that is a 2-year project at the
    least to get that up and running to the new flow rate.
        There was a study that was done up at Portsmouth. You all
    know maintenance is all about hands touching and turning and
    fixing things. It is hands-on time. They tracked one of the
    maintenance people for his hands-on time. He drove a golf cart
    around the area for 4 miles one day just in an average search
    of parts. We have to bring the parts down to the ship. This is
    what I am talking about, the science of industrial flow that
    needs to be put into these old shipyards. We are doing it. The
    monies that you have given us will get after that. It is 2
    years to effect that, but to kill it now with any sort of
    sequestration would be a crime.
        Admiral Moran. Senator, if I could. If I could go back to
    the earlier comment about what the element of time does to this
    problem, we just got back the shipyard workers in the public
    yards to the level we wanted after sequestration 5 years ago.
    This is a unique, highly skilled workforce in our nuclear
    yards. If they do not feel like they are supported, if we are
    not giving them adequate resources to do their job and have the
    manning levels where they need to be, they walk. They can go
    other places because they are highly skilled. And then it takes
    a long time to recover that.
        So to your point, if we go backwards on this, it is going
    to take us 3, 4, 5 years to recover just the workforce and
    skill sets we need to do nuclear maintenance.
        Senator Rounds. Thank you.
        Thank you, Mr. Chairman.
        Senator Wicker. I do not think we are going to go back to
    sequestration, but we are going to have to take affirmative
    votes not to.
        I think Senator Rounds' question, though, is even with the
    adequate budgets that we have provided the last 2 years, and
    going forward, if we are able to do the same thing--now it
    seems that the administration is all in favor of generous
    funding for the military. Even with that, I think the question
    is what else is necessary. I do not think you are being
    critical, Senator Rounds. I think we are asking a question of
    how we can improve the situation.
        Senator Rounds. Mr. Chairman, thank you. If I came across
    as being critical, I do not intend to be. What I am trying to
    get at is that we have got to be able to share with an American
    public that sees an increasing defense budget, and they have
    got to understand how far behind we were and about what our
    adversaries are doing with their own and where we are falling
    behind. It is not just a matter of readiness. It is a matter of
    modernization because, as you say, directed weapons is not
    something in the future. Others are working on it now. And we
    start talking about what is going on in space and our ability
    to control the information coming through, and in hypersonic
    weapons which are there now and how far we will be if we do not
    maintain this. And it puts our security at risk. We have a
    difficult time trying to get that information out to the public
    because most of the information we receive is in a classified
    section. So this opportunity for you to share how serious this
    is has got to be shared with the American public. That, I
    guess, is where my frustration comes from.
        Senator Wicker. Thank you, Senator Rounds.
        Senator King, it appears that we have taken all of your
    time and I just regret that.
        [Laughter.]
        Senator Wicker. Why do we not go ahead and recognize
    Senator King?
        Senator King. I would be glad to yield my time to Senator
    Rounds anytime.
        Secretary Spencer, I think you have touched upon this, but
    it strikes me that both in aircraft and ship maintenance, we do
    have a lot to learn from the private sector, and I hope that
    that is a really active effort. I know you mentioned when I was
    absent--I apologize. I had another hearing--Southwest Airlines.
    Obviously, there are differences. It is not apples to apples.
    But I think there is a lot to learn in terms of work flow,
    systems, just in time, parts availability. I hope that is a
    major part of your effort to upgrade because we cannot afford
    to buy ships that we are not using.
        Secretary Spencer. Senator, I could not underscore your
    statement stronger. One thing that I do want you all to know is
    that as we reach out, whether it is Southwest, whether it is
    Delta, whether it is Carnival Lines, to similar models that we
    are facing, corporate America is bending over backwards to help
    us. The hours that they spend with us, the resources that they
    provide us with people, it really is stunning. And we are
    learning a tremendous amount. I could give you vignettes down
    the line on simple parts that used to take 55 days for us to
    process where someone looked and said, hey, here is how we are
    doing it in the civilian world, and cut it down to 2 days. And
    that one part would be a downing part for an aircraft. That is
    the kind of impact that we are seeing with what we are
    learning.
        Senator King. Well, there is an interesting chart in the
    GAO analysis of the naval data that talks about parts
    obsolescence or diminishing manufacturing source of parts.
    There is a checkmark next to every Navy aircraft in those
    areas, as well as delays in depot maintenance. So I think this
    is a really big deal, and it is very important in terms of
    budgetary priorities. Again, it makes it so much more efficient
    if the planes and ships that we have are fully ready to be
    utilized.
        One of the concerns I have--and you mentioned Portsmouth--
    is personnel and workforce. At Portsmouth now, a tremendous
    yard doing great work, 30 percent of their workforce has been
    there less than 5 years. That is a change in recent years. I
    hope the Navy is thinking about workforce development because
    that is not going to happen on its own.
        Secretary Spencer. It is a definite upfront of mine,
    Senator. And you and I have talked about this. But when I talk
    about collaboration and partnership with our commercial
    counterparts, also with our States to help whatever they can do
    to promote any sort of educational assistance or early
    education venues to feed the yards, which are amazing careers--
    you know, a lot of people do not realize the contribution that
    one makes to a great product, but also the compensation
    received.
        Senator King. I can attest to that at Portsmouth because
    they let me use a virtual welding machine where I could
    actually think I was wielding, but I was not screwing up a ship
    hull. It was a very positive experience.
        Secretary Spencer. Next time, we will use you.
        Senator King. That is right.
        Talking about industrial base and acquisition, the frigate,
    which we are talking about--there are five yards competing.
    There are going to be 20 ships. As I understand it, the
    intention now is to award all 20 ships to the winner. It is a
    winner take all among five. In terms of industrial base and
    also just spreading the work, getting the work done faster,
    talk to me about the possibility of splitting that award
    between at least two yards, if not three.
        Secretary Spencer. You bring up an interesting concept.
    There are two things going on here that need to be weighed out.
    One, yes, we do have to be attentive to our industrial base and
    the ability to keep hands busy and trained. Two, one thing we
    also have to look at, though, is the balancing of the flow of
    new ships into the fleet because what we want to avoid is a
    spike because that spike will come down and bite us again when
    they all go through regular maintenance cycles and everyone
    comes due within 2 or 3 years or 4 years. It gets very crowded.
        It is not off the table because we have not awarded
    anything yet. We will look at how best we can balance with how
    we get resourced, and if we have the resources to bring
    expedition, granted, we will do that.
        Senator King. I appreciate that.
        Final question. The Navy and the Marine Corps recently went
    through their first audit, and no one expected it to be a clean
    audit first time through. Two questions. What have you learned
    from this audit, and secondly, when can we expect a clean
    audit?
        Secretary Spencer. I will go first question first. We are
    still learning. It was a tremendous cycle. As I told Senator
    Kaine, we changed the conversation in the Department of the
    Navy, the Navy and Marine Corps team, that this iteration of a
    thing called an audit is not an invasion for financial reasons.
    This is a tool that you will use as a manager so you know how
    your organization is operating, so you know how the resources
    you are applying are providing you a return. That message has
    been received.
        If you look at our list of deficiencies, there are many,
    but this was the first time in the barrel for the Navy. It was
    eye-opening, 700 distribution centers. Well, you know what? We
    can probably get after that. Real estate that was missing,
    quote/unquote. A lot of it was procedure. I mean, the building
    was there, but was it in the right book in the right business
    system? No. This is all the learning that we are doing so we
    have tools to manage.
        Senator King. Do you feel that we are headed toward a time
    when there can be a clean audit?
        Secretary Spencer. Yes. I would love to say in the future.
    I do not see a clean----
        Senator King. In our lifetimes?
        Secretary Spencer. I would say 5 to 6 years, to be very
    frank with you.
        Senator King. General Neller, I just want to greet you.
        Senator Wicker. What is your life expectancy?
        [Laughter.]
        Secretary Spencer. That might be my life expectancy,
    Senator.
        Senator King. General Neller, I just want to compliment you
    on your service. You drew the long straw this morning and the
    Secretary seems to be getting the brunt of the questions. But
    thank you.
        General Neller. We are very appreciative that you are
    giving him all the questions.
        [Laughter.]
        General Neller. Senator, just one thing on the audit just
    for the record. The Marine Corps has been under audit for
    several years, and as the Secretary said, I have taken the
    brief from the audit team myself the last 3 years. It has been
    enlightening. A lot of it is procedural. A lot of it is
    accounting things and procedures. A lot of it is that there are
    a number of systems across not just within the Department of
    the Navy, other services. A big issue is we have a lot of
    ammunition that we share with the Army and the systems that we
    have that account for that--they do not talk to each other.
        The auditor gives you a list of findings or conclusions or
    things, and then your job is to go back and try to close them
    out. I assure you that the Secretary of the Navy and the
    Secretary of Defense keep score on that sheet. And so we have a
    team of people, and then the audit for this next year has
    already started. Again, it is a continuous process.
        We will get there in our lifetimes, I am confident, but
    there are going to be some things that are going to have to
    take place probably systemically and with data. But there is no
    shortage of effort and understanding and appreciation that we
    are going to get there eventually.
        Senator King. Thank you.
        Thank you, Mr. Chairman.
        Senator Wicker. Senator Ernst is next, and Senator Shaheen,
    regardless of who else walks into the room, you will be
    recognized after Senator Ernst. Senator Ernst?
        Senator Ernst. Thank you, Mr. Chair.
        Secretary Spencer, we are going to continue on with your
    questioning. So thank you for being available today. And it was
    a great game on Saturday. So thank you.
        [Laughter.]
        Secretary Spencer. Kind of.
        Senator Ernst. Yeah, sorry. No, I am not.
        [Laughter.]
        Senator Ernst. As the chairman of the Emerging Threats and
    Capabilities Subcommittee, I do especially enjoy working with
    our special operations community and really want to make sure
    that our SOF [Special Operations Forces] have the support and
    capabilities necessary to perform their many no-fail missions.
        One issue that I have learned about is the importance of
    assuring that SOF have necessary access to float-ahead staging
    bases. Especially with our renewed focus on great power
    competition, naval resources will be extremely strained while
    we continue to build up the fleet. The demands in the Pacific
    and in Europe especially will mean that the Navy and SOCOM
    [Special Operations Command] will be required to find intuitive
    ways to supply capabilities to our SOF warriors.
        How do you believe that we can ensure that SOF warfighters
    have adequate, dedicated, persistent support in order to
    fulfill their missions?
        Secretary Spencer. Senator, leave it to the SOF world, and
    I use them as a poster child. They have already done some, as
    you know, innovative ways to find platforms to work on on a
    maritime basis.
        That being said, you address a topic, though, that is a gap
    that we know we have and that we are working on. And we will
    come to you with some requests here going forward, and that is
    our pre-positioned forward ships and our reserve ships. You
    know--you have read the reports--the shape that they are in.
    This is a simple case, in many cases, of portfolio management
    and resources available. If in a perfect world, I had the
    ability to go out and buy used ships on the market with very
    little constraint, we could close this gap quite rapidly.
        Senator Ernst. Well, and we talk about the policy
    limitations that are out there. You had just addressed one of
    those.
        With those limitations on the use of leased vehicles, how
    do you balance sea-basing support for SOF between our
    counterterrorism and our VEO [violent extremist organizations]
    missions and potential state-on-state conflict where we cannot
    use those leased vehicles?
        Secretary Spencer. Yes. My easiest answer is if I could get
    some more restraint lifted, I would have the ability to manage
    that risk-gapping.
        Senator Ernst. Is that an area that we can address within
    this committee?
        Secretary Spencer. I believe it is.
        Senator Ernst. Okay. Thank you for that.
        Are there platforms within the current industrial base that
    you do believe would be optimal for our SOF mission?
        Secretary Spencer. Yes, there are.
        Senator Ernst. In an open format, can you discuss any of
    those?
        Secretary Spencer. We have the ability right now with some
    of the things that we are looking at within the Navy that would
    be applicable to missions. But more importantly, we do have an
    industrial base out there that has the ability to produce
    specifically what might be needed for that mission set.
        Senator Ernst. Okay. Thank you.
        Recently--just a slightly different topic. One that is very
    important, though. Recently I did have the honor of speaking at
    the commissioning of the USS Sioux City over at Annapolis. I
    appreciated that. Among many other aspects, I was impressed by
    the crew of the ship and their ability to explain to me the
    importance of that naval platform. And I believe--and as I was
    a commander, of course, in the Iowa Army National Guard--that
    it is our sailors, it is our people that make up the backbone
    of our services. And as in the Navy, they will be manning those
    stations and making critical life or death decisions in times
    of conflict, and that absolutely is something that we cannot
    have built in a shipyard.
        General Neller, it is the same with you. What I would like
    for you gentlemen to do, just in the very brief remaining time
    that I have left, is to address the challenges that we have in
    recruiting and retention in the Navy--and Admiral Moran, if you
    could address that--in the Navy and in the Marine Corps. How do
    we do better?
        General Neller. Well, Senator, first on your previous
    question, there are a lot of things going on with the use of
    SOF or the SOF operating off of naval platforms throughout the
    world. In fact, we train it. We do it as a matter of course. It
    happens all the time. It just is something you do not read or
    see in the newspapers or the media. I can talk to you offline
    and there are actually things we do to accommodate each other.
    I think the Navy, the naval force, and SOF--they do a lot of
    things.
        On recruiting, we made our numbers. We made our quality
    spread. We work really hard. We invest a lot in our recruiters.
    We have a command screen board for our officers that lead our
    recruiting stations. If you are a Marine major and you are at
    the top of the heap, your reward is you get to command a
    recruiting station. And then if you are successful, then you
    will probably be acknowledged later on in the promotion process
    for command of another organization from your MOS [military
    operational specialty]. So it takes work.
        We are recruiting the seniors for next year. We came into
    the year with over 50 percent of the recruits that we wanted to
    ship this year already contracted. The most difficult time
    comes after the first of the year, kind of January through May,
    because you have shipped all the seniors. They graduate last
    May, June, and then they ship this summer. So you are more in a
    direct shipping market.
        We are confident that we can make it. It is getting harder.
    We used to make it before the third week of the month was out.
    Now some places, you are making it the last day of the month.
    So it just takes really, really hard work.
        I think this committee and the Nation should be aware or
    concerned about the fact, not just the propensity of the young
    men and women to want to serve in the military, but the
    percentage that are qualified to be able for us to even talk to
    them. That number is right around or slightly below 30 percent.
    But we are making it. On the officer side, we have got more
    people that want to be a Marine officer than we have spots.
        Senator Ernst. Admiral?
        Admiral Moran. Senator, thank you.
        I would just build off of what General Neller just
    commented on. The Navy is in a very similar place. We were able
    to make mission this year in a much more demanding market. Our
    goals were at 40,000-plus, and a typical year for us about
    33,000. We made goal by May. So our recruiters are doing a
    great job. We have shifted our approach in how we do
    recruiting, to go where the market is, which is more in the
    social media lane than it is on the more traditional
    advertising campaigns we have done in the past. Our recruiting
    force is doing a fabulous job.
        We are starting to see some stressors, though, similar to
    what the Commandant just talked about in terms of when we are
    meeting those goals, at the end of the month as opposed to the
    second, third week in the month. So the stressors are clear.
    Anytime you have an unemployment rate below 4.1 percent,
    historically trouble looms on the horizon for both recruiting
    and retention. It is at about 3.8 percent I think now. So we
    are all expecting this market to get more difficult than
    easier.
        That said, we had the best retention year in zone A, B, and
    C this past year than we have had in a decade.
        So there are some good things going on. Hard to put our
    fingers on exactly what is generating those kinds of results in
    an economy that is really challenging us and competing for that
    talent. But hopefully, we can continue to do this because our
    recruiting goal for this year is also high.
        Thanks for the question.
        Senator Ernst. Thank you, gentlemen.
        Secretary Spencer. Senator, if I could add something on
    there.
        Senator Ernst. I suppose, Secretary.
        [Laughter.]
        Secretary Spencer. Not a huge item, but it is worth
    bringing up for conversation.
        There is in excess of 1,100 schools and school districts
    that deny access to the uniformed members to recruit on their
    campuses. They are all throughout the country, the
    preponderance up in the northeast and northwest. Whatever help
    anyone could do in helping us get the message out would be
    greatly appreciated.
        Senator Ernst. Thank you, Secretary. You are absolutely
    welcome in Iowa.
        Senator Wicker. Are you speaking of colleges and
    universities?
        Secretary Spencer. High schools.
        Senator Ernst. High schools for recruiting. Thank you for
    pointing that out.
        Senator Wicker. Thank you, Senator Ernst, for that line of
    questioning. Let me just thank the General and the Admiral for
    good answers and for a really good work product in challenging
    times. I am impressed, and I think the country is impressed.
        Senator Shaheen?
        Senator Shaheen. Thank you, Mr. Chairman.
        And thank you all for being here.
        Senator Hirono, I believe that Secretary Spencer may have
    misspoke when he said that Pearl Harbor was the number one
    priority. Senator King and I understood that it was Portsmouth
    that was the number one priority.
        Secretary Spencer. One of our first priorities.
        [Laughter.]
        Senator Wicker. I think he was talking about his priority
    for a field hearing.
        Senator Shaheen. Thank you. I just wanted to make sure
    everybody was awake this morning.
        Mr. Pendleton, you talked about the delays in maintenance.
    Secretary Spencer, you talked about the plan to address depot
    maintenance. We all recognize the challenges with getting the
    McCain back into operation.
        Are there lessons that we have learned from what has
    happened, aside from the challenges around depot maintenance
    and a plan? Are there other lessons that we have learned about
    how to better get the fleet back out when there are damages? I
    think about the Portsmouth Shipyard where during World War II,
    they produced 70 ships. They launched four subs in one day. So
    there are other things that are going on other than just the
    facilities that address how quickly we are responding to the
    challenge. Can you talk about some of those lessons that have
    been learned?
        Mr. Pendleton. Around the damage, we did not really look at
    the McCain maintenance.
        I think one of the things, going forward, that is going to
    be very important is not to let deferred maintenance mount up.
    What is happening is that as they bring the ships and subs in
    and they begin to look at the tanks and other things, they find
    damage or corrosion or other things that require additional
    work. I think getting caught up on the deferred maintenance is
    one of the key lessons learned and it will be one of the keys
    to success going forward.
        Senator Shaheen. Anything else?
        Secretary Spencer. Yes. Senator, one of the things--you
    asked--it is a far-reaching question that deserves a moment
    here because one of the things that we are trying to do--and I
    will back up to the F-18 scenario that we are working on right
    now. We are calling that the Naval Sustainment System that we
    are building because it does not just apply to aviation. It
    applies to surface, underwater, weapons platforms. Maintenance
    is all about flow, getting parts, people all in line in time
    for procedures.
        One of the things that we want to start doing is we have
    the data to start doing predictive analytics. So before a ship
    even comes in, we know where there is great probability that
    there is going to be work done, have it pre-staged, have the
    work orders ready. It is going to take some time. But you asked
    for the lessons learned. This is exactly it. Allowing those
    teams that are actually working on the ships alone to start
    thinking how can I do this better, how as a team can we
    actually make more movements shorter, quicker, more effective.
        So it is a collection of a bunch of activities that we are
    doing. A lot of them we are picking up from the commercial
    world outside the wire, but a lot are organic ideas coming from
    within the organization.
        Senator Shaheen. Great.
        Back at the end of November, we had the National Defense
    Strategy Commission come and appear before the committee. They
    identified six trends in national security that we needed to be
    aware of. One of those was conflict in the gray zone. One was
    cyber as well. But one of the things that the commission
    recommended was that DOD develop--and I am quoting here--
    analytic tools that measure readiness across the range of
    challenges from low intensity gray zone conflicts to protracted
    high intensity fights with major power rivals.
        It seems to me that we have been able to better measure
    some of the ways to address the high intensity fights with
    major power rivals because we can look at how many ships we
    have and how many people we have ready. But when we are talking
    about gray zone conflicts and the potential for that kind of
    conflict, how do we measure how ready we are and what are we
    doing to address that?
        We had a briefing yesterday, which I will not go into
    because it was classified. It presented the problem, but it did
    not really talk about how we are addressing the problem. And it
    seems to me that it is not clear to me how we are addressing
    that problem.
        Secretary Spencer. The Commandant has some more granular
    information, but to frame the context of this from my point of
    view wearing the Title 10 hat is this is exactly one more
    portfolio that we actually have to manage. Whenever one talks
    about us competing with China and we continually hear they are
    investing this amount of money and they are building this
    amount of ships, one, they do not have the installed base that
    we have. Two, they do not have the mission requirements set for
    global security. These are what we--I will not say struggle
    with. This is what we perform to. To get an appreciation, it is
    one more of the portfolios.
        But, Commandant?
        General Neller. Senator, I will speak for the Marine Corps,
    but I can say with some confidence that all the services have
    developed capabilities that allow them to function within this
    area, whether it be cyber, electronic warfare, whether it be
    information operations, whether it be military information, or
    things like that.
        For our example, organizationally we have changed a group
    which used to be a headquarters support group into what we call
    the MEF [Marine Expeditionary Force] Information Group. We have
    grown hundreds and hundreds of people that now have MOSs in
    cyber that support CYBERCOM [Cyber Command] as part of their
    componency. Each of the services has a component there. So that
    readiness is measured. In preparation for this hearing, I
    looked over the readiness of those teams. You have cyber
    protection teams that do defense, and you have cyber teams that
    do offensive things. Obviously, I am not going to talk about
    what that is. And some of them work for other organizations.
        But to your point, I think it is a clear recognition with
    all the services and with the joint world and with OSD [Office
    of the Secretary of Defense] that we are growing and continue
    to develop this capability. And it is not going to get smaller.
    We are going to need this capability because this is the fight
    that goes on every day. This is the fight that is taking place
    as we sit here in this hearing. This is the fight that is
    probably going to be the precursor to a fight which could
    potentially--God forbid--lead us to a kinetic fight further on
    down the road.
        If you ask me what my biggest readiness concern is or my
    operational concern is, it is the ability for us to have
    resilient, reliable command and control to move our forces
    around the world and protect the network that allows us to do
    that. At the same time, I want to be able to take that away
    from whoever might be our adversary. Whoever can protect theirs
    and keep it up or bring it back faster and whoever can deny the
    adversary their ability to do command and control or pass
    information or share information or do analytics, you have a
    decided advantage. And that is where I think we are all headed.
        Senator Shaheen. I really appreciate that.
        Mr. Chairman, it would certainly be helpful to me--I do not
    know how others feel--to have a better understanding of more
    about what is being done in that area.
        Can I ask just one more question to follow up on Senator
    King's question about audit?
        Senator Wicker. Absolutely.
        Senator Shaheen. There have been some reports about fraud
    within the Department around the audit. Has there been any
    evidence of fraud that occurred or that was shown to be the
    case as the result of the audit?
        Secretary Spencer. As far as Department of the Navy goes,
    Senator, I have not heard the word ``fraud'' used during the
    audit. Unaware in that regard. That would have come front and
    center.
        Senator Shaheen. Good. Thank you.
        Thank you, Mr. Chairman.
        Senator Wicker. Thank you, Senator Shaheen.
        Senator Blumenthal?
        Senator Blumenthal. Thank you very much, Mr. Chairman.
        Commandant, this hearing marks the last official appearance
    here and work by my military fellow, Alex Monte, who happens to
    be a Marine Corps officer. He has done extraordinary work over
    the last year. I was tempted to ask you to issue an order that
    he continue in my office, but that work has been such a
    hardship, I am sure, given his boss, that I think he deserves
    relief from this duty, sir. But I just wanted to say on the
    record how grateful and pleased I have been with his
    performance. I would say he is the best of our military
    fellows, except a few others have been marines. So I do not
    want to single him out, but he certainly is one of the best and
    we will miss him. I am grateful to you personally for
    permitting your marines to serve us in that capacity. I will
    not ask you for a response to that.
        I do have a question about submarine maintenance, and I
    know you have been asked about submarines by Senators Hirono
    and Kaine and about the maintenance issue by Senator Rounds. It
    is not the most glamorous of the topics that we discuss today,
    but in my view, it is one of the most essential because our
    submarine fleet, our undersea warfare capability, is in my view
    one of the linchpins of our national defense and part of
    building a more powerful Navy and ensuring readiness is not
    just building more ships--we like to do that in Groton Electric
    boat--but also making the ones that we have now work properly
    and keeping them at sea.
        As you are aware, the GAO released a report last month,
    actions needed to address costly maintenance delays facing the
    attack submarine fleet. The Naval Sea Systems Command (NAVSEA)
    agreed with the majority of the report's findings and has
    already taken some specific actions. I am very much aware to
    address the GAO findings. Specifically, the Navy contracted
    four submarine availabilities to the private yards, one to
    Electric Boat, three to Newport News, and plans to contract an
    additional two attack submarines in the spring of 2019. I am
    also aware the Navy is working with private shipyards to
    provide a longer-term plan for modernization.
        I want to stress Electric Boat has approximately 5 million
    hours of available labor to provide submarine maintenance from
    fiscal year 2019 to fiscal year 2024. I wrote the Navy a letter
    last week asking for a detailed submarine workload allocation
    plan to consider awarding submarine maintenance contracts to
    Electric Boat. Based on maintenance requirements, the Navy
    should consider transferring more than the two additional
    attack submarines to address readiness, in my view, challenges
    that are simply growing, and we need to address them to make
    sure that we have that workforce available ahead of the
    Columbia-class production.
        Mr. Pendleton, let me ask you, based on the GAO report and
    your assessment, how is the current submarine maintenance
    backlog affecting readiness? What is your plan for providing
    more work to the private yards? What is the timeline?
        Mr. Pendleton. So we did the study, and we updated some of
    the numbers. Maintenance delays have been trending upward since
    we even finished the study last month. So that is headed in the
    wrong direction. We are hoping that it is reaching as bad as it
    is going to get.
        What we recommended was the Navy take a look to see if
    there were opportunities in the private yards, and they are
    doing that. We will be following up with them to see how that
    goes over time and following submarine readiness in general,
    sir.
        Senator Blumenthal. Would you recommend that additional
    work be sent to the private yards?
        Mr. Pendleton. That is really not my place. I mean, what we
    wanted the Navy to do was to look to see if you could make a
    business case for it because the public yards, as Admiral Moran
    mentioned, it is a lower priority and there were backups. And
    we understood that there was potentially capability there
    available, and we wanted the Navy to take a look at the cost
    and the benefits of doing that. That is what we understand that
    they are doing.
        Senator Blumenthal. If I may ask another question, Mr.
    Chairman. Thank you.
        Admiral Moran and Secretary Spencer, I wonder if you would
    respond as well please.
        Secretary Spencer. Senator, we are, obviously, exercising
    the public yard option. I have learned in my life that managing
    expectations is probably the best way to go. I will tell you--
    and it will be self-admitted by the shipyard builders--that
    there is not a 100 percent correlation between building skills
    and maintenance skills. They do not overlap 100 percent. We are
    learning that right now. They are farther up the curve than
    starting from zero, for sure. But repair is a different
    exercise than build. So we are on a learning curve, and all we
    are hoping for--not that hope is a strategy--is that as
    partners working together we can get a price point that is
    agreeable.
        Senator Blumenthal. Well, hope is not a strategy. You are
    absolutely right. And repair is not the same as building a new
    boat. But the skills are very, very transferable and
    comparable. And I want to urge that, with all due respect,
    perhaps you could respond to my letter. I look forward to
    hearing in more detail either in person or by letter about what
    the plans are because I think it is very important that we
    address these maintenance needs. And it goes beyond Electric
    Boat. It is the capability of our private yards to do this
    work, to maintain the defense industrial base to give our
    workers continued challenges and work that they need and
    deserve.
        Secretary Spencer. Totally agree. And when I talk about the
    learning curve, we have Virginia payload and we have Columbia,
    and I have to balance that also when we talk about using those
    man-hours. We will do whatever we can. We need everyone to lean
    towards the stone to make sure we can get the right value and
    efficiency proposition.
        But you will hear from us. We have a 5-year plan for
    submarines that has been finished. I think we are going sign it
    out to you on the 28th of December. But more than happy. Your
    letter will be addressed. It is on my desk right now to be
    addressed. Loud and clear, we hear you. We need to fix the
    maintenance flow for these vessels.
        Senator Blumenthal. Thank you, Mr. Secretary.
        Senator Wicker. Senator Blumenthal, I think you are going
    to get a response to your letter.
        Now I will now take a second round. Secretary Spencer, I am
    going to direct these questions to you. If someone wants to
    jump in as a member of the team, please do so.
        I spoke in my opening statement about requirements that we
    placed in the NDAA on surface warfare and readiness. So let us
    go down the list.
        Section 911 directs the Secretary of the Navy to conduct a
    comprehensive review of operational and administrative chains
    of command and functions at the Department of the Navy. This is
    due month after next, February of 2019. Will this deadline be
    met?
        Secretary Spencer. Yes, it will.
        Senator Wicker. Are there any changes or insights that you
    would like to share with the committee today?
        Secretary Spencer. I think I would like to have the report
    presented to you in full.
        Senator Wicker. All right. You have answered the question.
        Section 915 expands the principal duties of the Assistant
    Secretary of the Navy for Research, Development, and
    Acquisition, to include sustainment, including maintenance. The
    intent was to put a single Senate-confirmed official in charge
    of sustainment, including maintenance of weapons systems. This
    took effect in August. How is this change being implemented?
        Secretary Spencer. It has been implemented, Senator.
        Senator Wicker. And how is it going?
        Secretary Spencer. It is actually going very well. It is
    something that we probably should have done a while ago, to be
    very frank with you, because we spend an inordinate amount of
    time focusing on how we buy things, and the sustainment
    equation did not get the appropriate amount of attention. Now
    it is.
        Senator Wicker. Well, got advice from folks out there
    around the globe that know what they are doing. So that is good
    to hear.
        Section 322 requires the Bureau of Inspection and Survey
    Inspections beginning January 1, 2020, to be conducted with
    minimal notice and results reported in an annual unclassified
    report. I assume that this deadline will be met since it is a
    year away.
        Secretary Spencer. This we will meet March of 2019.
        Senator Wicker. There you go.
        Section 323 limits the duration of vessels home-ported in
    locations other than the United States or Guam to no more than
    10 consecutive years. With some few exceptions, this provision
    took effect in August. What actions are being taken to comply?
        Secretary Spencer. This will be completely implemented by
    fiscal year 2021 due to the cycle nature of it. We are
    underway.
        Senator Wicker. Thank you, sir.
        Section 526 requires certain watchstanders on Navy surface
    ships to maintain a career record of watchstanding hours in
    specific operational evolutions for key watch stations. This
    takes effect in February. Will that deadline be met?
        Secretary Spencer. January of 2019, Senator.
        Senator Wicker. All right. It is hard to keep up with you
    guys.
        Section 524 requires a comprehensive assessment of the
    Navy's standard workweek and update of Navy policies and
    procedures to identify the manpower necessary to execute in-
    port workload. This is due in February. Will the deadline be
    met, and are there any early insights that can be shared today?
        Secretary Spencer. The deadline will be met. I have not
    read the final report yet, so I would like to wait until it is
    fully vetted.
        Senator Wicker. We look forward to those insights.
        Secretary Spencer--and Admiral Moran may want to chime in
    here--section 527 requires a review of the adequacy of
    individual training for certain watch stations. This is due in
    February. Will that deadline be met, and are there early
    insights?
        Secretary Spencer. That deadline will be met, and we will
    share with you what we learned. No insights right now, sir.
        Senator Wicker. Okay.
        Section 525 requires congressional notification if manning
    levels drop below certain percentages for ships. This took
    effect in August. We have not received any notifications being
    submitted pursuant to this section. So is the Navy compliant
    there?
        Secretary Spencer. The first report is in staffing now.
        Senator Wicker. Okay. And what is it going to show? Give us
    a sneak preview. Admiral?
        Admiral Moran. It is going to show we have a relatively
    small percent of those ships that are outside their maintenance
    and basic phase of the OFRP [Optimized Fleet Response Plan]
    that are below those thresholds, very marginally below, but it
    is a small percentage. I think you will be pleased with the
    report that is on its way to the Secretary.
        Senator Wicker. All right. Only two more.
        Section 334 requires a review of options to increase
    civilian watchstanding qualifications for surface warfare
    personnel. This is due in March. Will that deadline be met?
        Secretary Spencer. That deadline will be met.
        Senator Wicker. Section 335 requires a review of Navy
    surface ship inspections and visits to identify unnecessary
    requirements. This is due in August. Will that deadline be met?
        Secretary Spencer. That will be met in January of 2019. The
    initial reviews are complete.
        Senator Wicker. Actually, Mr. Pendleton, I hope you are
    expecting two questions in this regard. Are you prepared to
    talk about section 514?
        Mr. Pendleton. Is that the one about surface warfare
    audits, sir?
        Senator Wicker. It requires a GAO study of surface warfare
    career paths. This is due in March.
        Mr. Pendleton. Yes. We have it underway. We will see you in
    March.
        Senator Wicker. Okay.
        Can you give us observations or comments on the updates
    provided by the Secretary, as well as your understanding of the
    implement of GAO's related recommendations?
        Mr. Pendleton. I am not sure I quite understand what you
    are looking for there. We have not done a lot of work on the
    surface warfare officer mandate yet. We are getting started.
    And in the back of my prepared statement, we detail the 45
    related recommendations we made over the last 3 years and the
    status of them. And so we keep track of that very closely.
        One thing I would like to mention, Mr. Chairman, is the
    question came up earlier about gray zone conflict and domain
    readiness, and I feel like I should remind everyone----
        Senator Wicker. With regard to Senator Shaheen's----
        Mr. Pendleton. Yes, Senator Shaheen's question.
        We were required in last year's NDAA to look at readiness
    through a domain lens, air, ground, sea, space and cyber. We
    have also done that work. So in the spring, we hope to have
    some assessment of how the Department is doing in assessing
    readiness across all those domains as well.
        Senator Wicker. Thank you very much. I tell you what we are
    going to do, Mr. Pendleton. I am going to look over your
    prepared statement and see if I need to follow up on any
    questions for the record.
        Does anyone else wish to ask questions? Senator Hirono?
        Senator Hirono. Very briefly.
        Mr. Secretary, you have been impressively prepared to
    respond to the chairman's questions. Thank you very much.
        With regard to our shipyards, could you provide to this
    committee a list of what specifically is being done at the four
    public shipyards to implement the shipyard infrastructure
    optimization plan?
        Secretary Spencer. I will follow up with you on that, yes.
        Senator Hirono. Thank you.
        One more thing. I had mentioned in my opening remarks that
    I was interested in preventing collisions at sea, the sort of
    disasters that occurred. One of the changes that the Navy has
    discussed was ensuring that ship or squadron commanders can
    highlight their concerns when higher headquarters may try to
    deploy ships that are not trained and ready.
        My question to either you, Mr. Secretary or Admiral Moran,
    in particular, can you point to any example of a ship not
    deploying after being assigned to deploy when training or
    readiness were not up to standards per the ship or squadron
    commander's concerns?
        Admiral Moran. Senator, we have--and I can send you a
    written follow-up with the list of those examples. They come
    both ways, both from senior officers in the chain of command
    who observe a ship not being ready to either go to an exercise,
    deploy, get underway and where ships themselves have come
    forward through their chain of command saying they need
    additional time to train and be certified for the----
        Senator Hirono. I think that was an important change, and I
    hope that Admiral Moran agrees with that, because we cannot
    continue to have all these waivers for the readiness of these
    ships before they deploy.
        Mr. Pendleton. I went out to Japan, as I mentioned in my
    opening statement, and what we saw was a much different looking
    certification chart. For the ships that were underway, less
    than 3 percent of the certifications were expired, and they
    were managing those very, very closely.
        The Navy has done this by pouring resources into what is
    called the Afloat Training Group, and that means that folks are
    going out and working with the ship crews to make sure that
    they are trained and certified before they deploy. So that has
    been a significant change, at least in Japan.
        Senator Hirono. Thank you very much. I commend the Navy for
    doing those kinds of changes.
        Thank you, Mr. Chairman.
        Senator Wicker. Senator Kaine?
        Senator Kaine. Thank you.
        Secretary Spencer, one of the things I think we are all
    aware of is that the backlog of installation and infrastructure
    maintenance is a sizeable one, and it is probably going to be
    unrealistic to think that the Marines and the Navy can MILCON
    [military construction] their way out of this. So we will have
    to tackle it.
        But one particular I was interested in is this. Within the
    Navy, there has been, for a number of years, a Resilient Energy
    Program Office, REPO. REPO's goal--I guess mission--has been to
    leverage third party investment to improve installation
    readiness. My understanding is third parties will make
    investments on naval bases to either improve the resiliency of
    the energy infrastructure or, on occasions, investments to do
    conservation and efficiency investments, and then the third
    party shares if there is a reduction in energy cost. The third
    party shares in that. These are common arrangements. I did some
    when I was Mayor of Richmond 20 years ago.
        My understanding is that REPO projects have slowed to
    almost a halt, and I wonder, is that the case? Why is it the
    case? Do you commit to finding paths forward to make these
    kinds of investments that can save the Navy money that could be
    used to address some of the other installation issues?
        Secretary Spencer. Most definitely, Senator. I will follow
    up with you because the whole battle cry from my office is if
    we can leverage private-public relationships in any way,
    whether it be real estate development, whether it be energy
    resiliency, we are to explore them.
        Senator Kaine. Excellent. I will submit that as a written
    question for the record and look forward to your response.
        Thank you, Mr. Chair.
        Senator Wicker. Any other questions?
        [No response.]
        Senator Wicker. I want to thank our witnesses for their
    testimony today. It occurs to me that we are extraordinarily
    well represented by the members of the panel today, and I want
    to thank you.
        The record will remain open for 1 week for other questions
    members may have.
        If there is nothing else, this hearing is adjourned.
        [Whereupon, at 11:26 a.m., the Subcommittees adjourned.]

        [Questions for the record with answers supplied follow:]

                 Questions Submitted by Senator Roger F. Wicker
                             navy pilot production
        1. Senator Wicker. Secretary Spencer, given that helicopter pilots
    make up 55 percent of the Naval Aviators produced each year, please
    describe how the Navy plans on replacing the aging TH-57 helicopter and
    ensure naval aviation warfighting readiness can be improved by training
    aviators in aircraft that more closely resemble what they fly in the
    fleet?
        Secretary Spencer. The Navy initiated an effort to replace its
    legacy TH-57 training helicopters with the Advanced Helicopter Training
    System (AHTS). The goal is to rapidly and efficiently replace the TH-57
    with a better, more modern training helicopter by leveraging the
    capabilities and capacity of industry. AHTS will consist of a
    commercial helicopter accompanied with a Ground Based Training System
    and Contractor Logistics Support. The commercial acquisition will allow
    the Navy to obtain a suitable replacement trainer, free of development
    costs. Naval Air Systems Command released the AHTS Request for Proposal
    in January 2019 with industry responses due April 2019. Following the
    source selection process, the contract award for the TH-57 replacement
    will be in the 1st quarter fiscal year 2020, with aircraft delivery
    approximately one year after contract award.
                                   __________
                   Questions Submitted by Senator Joni Ernst
                              naval support to sof
        2. Senator Ernst. Secretary Spencer, I greatly appreciated
    discussing with you the need to provide dedicated persistent support to
    our Special Operations Forces (SOF) through sufficient access to afloat
    sea basing. During your testimony, you stated that if certain policy
    restraints were removed, you could rapidly close gaps in our current
    afloat sea basing posture. Secretary Spencer, could you detail in
    writing the current posture for afloat sea basing to SOF?
        Secretary Spencer. Current SOF requirements for Afloat Forward
    Staging Bases (AFSBs) are best met by a combination of dedicated leased
    commercial Maritime Support Vessels (MSVs), Navy AFSB support provided
    by Expeditionary Support Bases (ESBs), and contingency support from
    other SOF-modified Navy platforms. Two ESBs are currently available for
    tasking with three more under construction, and two MSVs are available.
    A number of other Navy vessels are suitable and have been used for SOF
    seabasing in support of contingency operations; LHD/LHA, LPD and SSGN
    are prime examples.

        3. Senator Ernst. Secretary Spencer, how do policy restrictions
    prevent you from closing current gaps in afloat sea basing?
        Secretary Spencer. There are legal restrictions and limitations on
    using leased commercial vessels for a potential state on state
    conflict; these do not prevent these vessels from being used for
    counterterrorism operations. With DOD and Navy vessels suitable for use
    as AFSBs increasingly focused on state on state conflict there is a gap
    in suppling seabasing capabilities for counterterrorism. If there was
    the ability to purchase and modify for SOF used vessels and possibly
    foreign-flagged vessels as a cheaper alternative to U.S.-flagged ones
    this would help alleviate the gap.

        4. Senator Ernst. Secretary Spencer, could you provide in writing
    the specific policy changes that need to be made in order to allow you
    to close these gaps?
        Secretary Spencer. The ability to purchase and modify for SOF, used
    vessels and possible foreign-flagged vessels as a cheaper alternative
    to U.S. flagged ones would help alleviate the gap.
                  Questions Submitted by Senator Dan Sullivan
                          aviation mission capability
        5. Senator Sullivan. Secretary Spencer, a couple months ago the
    Secretary of the Defense established a mission capability goal of 80
    percent for key aircraft, such as the F/A-18 Super Hornet, that is to
    be achieved by the end of fiscal year 2019, while also reducing
    sustainment costs. In October 2018, the Navy reported publicly that F/
    A-18 Super Hornet availability was about 50 percent, how realistic is
    it for the Navy to add about 30 percent availability for the F/A-18
    Super Hornet in less than year in order to meet the Secretary of
    Defense's goal? What's the risk in trying to meet that goal?
        Secretary Spencer. The Navy believes that actions taken over the
    past year, combined with the increased support to sustainment budgets
    over the past several years, has put us on a path to reach the required
    Mission Capable (MC) readiness level for Fleet F/A-18 Super Hornet
    Squadrons by the end of fiscal year (FY) 2019. The MC rates for the
    Navy F/A-18 is 71 percent as of April 22, 2019. We have implemented a
    comprehensive approach to address F/A-18 and other platform readiness
    shortfalls called the Naval Sustainment System (NSS). The NSS will
    address the systemic issues that have led to reduced availability, with
    emphasis on reforming activities across the key pillars of governance,
    operational-level maintenance, intermediate and depot-level support,
    supply support, and engineering support. The NSS will take advantage of
    best practices from the commercial aviation industry, balancing those
    with the unique missions and operational environments of Naval
    Aviation. For F/A-18s, examples of specific reforms include the
    implementation of an ``Aircraft On the Ground'' cell, focused on the
    near-term prioritization of supply and maintenance actions to get more
    flight line aircraft into an MC status sooner; a reduction of the time
    to conduct an aircraft's depot-level Planned Maintenance Interval
    inspections from 120 to 60 days; a reduction of 4 days in the time to
    conduct operational-level 84-day aircraft inspections; and an increase
    in the output of repaired engines to the flight line to support the
    increasing numbers of MC aircraft. All of those activities are underway
    with demonstrated results, as the monthly average of MC F/A-18 Super
    Hornet aircraft has shown improvement each of the last four months. The
    risk in trying to meet the fiscal year 2019 MC aircraft goal is that
    actions taken in the near term must not come at the expense of the
    longer term requirement to sustain the fleet at the higher 80 percent
    MC level. The Navy is acutely aware of, and is managing, that risk. The
    actions being taken, such as those described in the examples above,
    appropriately consider long term sustainment. That risk is one reason
    why the inclusion of commercial industry best practices into the Naval
    Aviation model is so important. Those best practices support both near
    and long term commercial aviation readiness goals, and without success
    in both areas those companies suffer. Naval Aviation is taking that
    same mindset with the NSS and our actions to increase readiness across
    the force.
                 implications of 2018 national defense strategy
        6. Senator Sullivan. Secretary Spencer, in January 2018, the
    administration announced a new defense strategy that identifies long-
    term strategic competition with China and Russia as DOD's principal
    priorities. Secretary Spencer, how will you balance the need to rebuild
    readiness with the need to modernize? Should one take priority?
        Secretary Spencer. The National Defense Strategy identifies great
    power competition with China and Russia as DOD's priority and pursues
    three distinct lines of efforts to expand our competitive space,
    including rebuilding military readiness, as we build a more lethal
    Joint Force. A fundamental tenet of every budget request we build is
    that naval power is about maintaining balance across all dimensions of
    naval power. Naval power is not a choice between increased capacity or
    better capability--it is a combination of both. Naval power is not a
    choice between readiness and modernization--it requires a balance of
    both. Naval power is not a choice between more complex stand-alone
    technologies or networked systems--it is achieved through both. The
    talent to operate and sustain a larger and more lethal force is not a
    choice between more people or better training--it must draw on
    components from both. Our Program Objective Memorandum process is
    designed to optimize this balance to ensure the fleet can maneuver as
    desired, respond when directed, and win in a short or prolonged fight.
                  readiness improvements at navair (san diego)
        7. Senator Sullivan. Secretary Spencer, can you talk about some of
    the improvements you are making to the Navy Sustainment System (NSS),
    specifically the work being done at NAVAIR's Fleet Readiness Center--
    Southwest (FRC-SW) in San Diego?
        Secretary Spencer. The Naval Air Systems Command's (NAVAIR) Fleet
    Readiness Center Southwest (FRCSW) reform is one of the six pillars
    that has been employed to establish the Navy Sustainment System (NSS).
    The six pillars are: Surge/Aircraft on the Ground; FRC reform;
    Operational-Level reform; supply chain reform; engineering and
    maintenance programming reform; and governance, accountability, and
    organization. These pillars are the foundational business processes
    being addressed to improve the Navy's F/A-18 E/F Super Hornet readiness
    shortfalls. FRCSW's activities associated with NSS are initially
    focused on aircraft component repair work centers. These work centers
    were strategically selected based on their impact to F/A-18 E/F
    material shortfalls known as Issue Priority Group One (IPG-1). IPG-1s
    are backordered repairable component supply inventory requirements
    associated with a missing part on aircraft, and have the highest repair
    priority to restore aircraft to mission readiness status. The
    foundation to the improvement process within the FRCSW work centers is
    accuracy, accountability, and transparency. Work centers were
    transformed into production control centers that physically integrate
    the daily activities of external partners in the supply chain
    responsible for supporting component repairs such as Naval Supply
    Systems Command (NAVSUP), Defense Logistics Agency (DLA), and
    engineers. Production and supporting stakeholders aligned their
    activities that have the greatest effect on decreasing flight line IPG-
    1s and increasing throughput. The goal of these work centers are to
    drive IPG-1 backorders to zero and improve aircraft component
    availability at the flight line. The improvements at FRCSW have been
    focused on flow, visual management, material kitting, supply chain
    synchronization, machine maintenance availability, and artisan
    training. The fundamental focus of NSS improvements at FRCSW is to
    treat the maintenance artisan as a surgeon where all production and
    support activities come to them to efficiently produce components.
          Flow-Production Control Centers are transformed to
    provide minimal travel time and maximum visibility.
          Visual Management- Each production process is visible in
    the work center where operations that become barriers can be visible
    and elevated.
          Supply Chain Synchronization--Improving the demand
    signal, logistics response time, and overall material availability to
    support rapid repair.
          Material Kitting--Partnering with DLA and NAVSUP in
    strategies to improve material processing within the FRC to ensure all
    material to complete repair is available at time of need.
          Machine Maintenance Availability--establishing strategies
    and preventative maintenance to decrease support equipment down time.
          Artisan Training--developing training strategies and
    programs aligned to meet customer demand. The NSS initiatives have had
    immediate gains:
          FRCSW Hydraulic Shop reduction in aircraft component IPG-
    1s by 78 percent in 120 days (Pre-NSS IPG-1 count of 107, current IPG-1
    count of 24)
          FRCSW Canopy Shop has increased production from 2.4
    canopies/month to 8 canopies/month in the past 30 days, IPG-1 reduction
    of 24 percent (Pre-NSS IPG-1 count of 37, current IPG-1 count of 28)
          FRCSW Landing Gear Shop reduction in IPG-1s by 13 percent
    (Pre-NSS IPG-1 count of 112, current IPG-1 count of 97) NSS improvement
    plans are scalable. FRCSW is beginning efforts to scale the NSS effort
    across the plant to include all type-model-series components and
    aircraft maintenance, repair, and overhaul production lines. Commander
    FRC has initiated the NSS improvement strategy across all FRCs.
                arctic strategy/freedom of navigation operations
        8. Senator Sullivan. Secretary Spencer, during the hearing you
    stated, ``If I had a blank check for everything, it would be terrific
    to ice-harden ships, but with the demand that we have right now, it is
    unaffordable.'' Can you elaborate on specifically why it is
    unaffordable to ice-harden ships?
        Secretary Spencer. As agreed to by the Government Accountability
    Office (GAO) in their recent November 2018 Report to Congress, there
    are currently no validated capability gaps that require the Navy to
    ice-harden existing vessels or construct new ice-capable vessels. From
    a funding perspective, ice hardening an existing program of ship might
    take ten years if the Navy can leverage an ongoing program, such as the
    DDG-51 Class program. Modifications to the current surface fleet that
    would enable sustained operations in extreme cold environments could
    compromise performance in other areas such as speed, range, and ship
    motion. Navy-contracted construction yards currently lack expertise in
    the design and construction of winterized, ice-hardened surface
    combatant and amphibious warfare ships. Accordingly, ice-hardening and
    winterization design practices could introduce cost and schedule risk,
    challenging the execution of a new construction ship-building program
    for an ice-hardened ship.

        9. Senator Sullivan. Secretary Spencer, given the requirement in
    the current Arctic strategy, how will the Navy address the need for
    conducting visible surface FONOPs, in all weather conditions during all
    times of the year?
        Secretary Spencer. The current Department of Defense (DOD) Arctic
    Strategy states that the DOD will preserve freedom of the seas in the
    Arctic. In support of the U.S. national security interest in preserving
    all of the rights, freedoms, and uses of the sea and airspace
    recognized under international law, DOD will preserve the global
    mobility of U.S. military and civilian vessels and aircraft throughout
    the Arctic, as in other regions. This includes conducting Freedom of
    Navigation operations (FONOPS) to challenge excessive maritime claims
    when and where necessary. The U.S. FON Program, as executed by DOD,
    employs every branch of military service including the U.S. Coast
    Guard. In the Arctic, Navy submarines can conduct FONOPS year round,
    either undersea or by surfacing, and Navy surface combatants could
    conduct FONOPS in open water conditions during the summer melt season.

        10. Senator Sullivan. Secretary Spencer, can the Navy conduct such
    FONOPs without ice-hardened ships? If so, would the Navy use a U.S.
    Coast Guard icebreaker? How would that ice-breaker be protected?
        Secretary Spencer. The Navy cannot conduct visible surface FONOPs,
    in all weather conditions during all times of the year without ice-
    hardened and winterized ships; neither can any other nation or
    military. The U.S. FON Program, as executed by DOD, employs every
    branch of military service including the U.S. Coast Guard. U.S. Coast
    Guard ice-breakers may be employed in accordance with the FON program.
    Current U.S. Coast Guard ice-breakers lack defensive capabilities and
    would need escort during a high-risk transit. Other options are: fully
    funding and building of the National Polar Security Cutter which will
    have power, weight, and space for defensive systems of their own;
    conducting FONOPS in areas where protection is not needed; or conduct
    FONOPS with friends, allies, and partners.

        11. Senator Sullivan. Secretary Spencer, are subsurface FONOPs
    using submarines effective? When such FONOPs are not readily visible,
    how do they show forward U.S. presence to deter adversaries and assure
    allies?
        Secretary Spencer. The U.S. FON Program consists of a two-pronged,
    complementary strategy for preserving the rights, freedoms, and uses of
    the sea and airspace recognized by international law. The Department of
    State leads the first prong by diplomatically protesting excessive
    maritime claims, and the DOD complements those efforts in the second
    prong, by conducting operational assertions of freedom of navigation
    (i.e., ``FONOPs"), regularly and routinely around the world. The Navy
    believes that sub-surface FONOPs are an effective method of
    accomplishing the goals of the FON Program. Submerged transits in
    straits used for international navigation, for example, challenge
    excessive maritime claims that purport to require submarines to transit
    on the surface. The DOD publishes an annual FON report that summarizes
    these operations, and other FONOPs, identifying the specific coastal
    states and excessive maritime claims challenged in that year. U.S. Navy
    submarines can show forward U.S. presence in the Arctic by surfacing
    through the ice. Last year, during the Navy's biannual Arctic Ice
    Exercise (ICEX), two U.S. submarines rendezvoused with a British
    submarine at the North Pole and simultaneously surfaced through the
    ice, demonstrating to our adversaries that the U.S. and our partners
    continue to retain assured access to the entire Arctic region.

        12. Senator Sullivan. Secretary Spencer and Admiral Moran, does it
    make operational or tactical sense for a U.S. submarines to conduct a
    surface FONOP in the Arctic, as has been suggested in previous Senate
    Armed Services hearings? If so, how?
        Secretary Spencer. and Admiral Moran. There is no inherent
    operational or tactical benefit to operating a submarine on the
    surface. However, if the DOD determines that the best asset for a FONOP
    is a submarine and a visible transit is desired, that submarine will
    likely not drive on the surface for the entire transit. The submarine
    could drive certain portions of a transit on the surface and other
    portions underwater. Another option would be to navigate the majority
    of a transit underwater and then surface to make its presence known,
    then submerge to continue the transit.
                             strategic arctic port
        13. Senator Sullivan. Secretary Spencer, the DOD's most recent
    ``Strategic Arctic Port'' report (sent to the SASC in January 2018)
    concludes that in light of the current threat environment, the Port of
    Anchorage, while not technically an Arctic port, is sufficient to meet
    the DOD's near to midterm requirements for Navy operations in the
    Arctic region. However, you recently stated in an event at CSIS that we
    need a strategic arctic port in Alaska.
        In your personal opinion, is the DOD's assessment and conclusion in
    this report reflective of your current view? Please elaborate.
        Secretary Spencer. The National Defense Strategy affirms the
    Department of Defense (DOD) will be prepared to defend the U.S.
    Homeland. The Arctic is strategic terrain in the defense of the
    Homeland and protecting U.S. northern approaches is critical to our
    national security. We are considering all options in terms of how to
    best ensure our security interests in the region, but have nothing to
    announce at this time. The Navy supports and agrees with the DOD's
    ``Strategic Arctic Port'' report.

        14. Senator Sullivan. Secretary Spencer, do I have your commitment
    to work with the SASC on a revised analysis for a strategic arctic
    port?
        Secretary Spencer. While existing DOD infrastructure in the region
    is adequate to meet today's needs, we regularly assess the evolving
    security environment and associated changing requirements for the
    Arctic region. We remain committed to addressing SASC concerns as well.

        15. Senator Sullivan. Secretary Spencer, in your personal opinion,
    is it in the strategic interest of the U.S. to have a Strategic Arctic
    Port or Ports?
        Secretary Spencer. The existing DOD infrastructure in the region is
    adequate to meet today's needs. We regularly assess the evolving
    security environment and associated changing requirements for the
    Arctic region. The Port of Anchorage was designated as a Strategic
    Seaport in 2004 and is sufficient to meet the current requirements for
    a deep water port in the Arctic at this time. Additionally, Thule Air
    Base is the United States Air Force's northernmost base, located about
    750 miles north of the Arctic Circle and adjacent to the world's
    northernmost deep-water seaport. This seaport supports logistics
    resupply operations for Thule and smaller military sites in Greenland
    and in northern Canada.

        16. Senator Sullivan. Secretary Spencer, as required by the Fiscal
    Year 2017 NDAA, would you support the designation of a site (or sites)
    for a strategic Arctic Port? If so, what sites?
        Secretary Spencer. The existing DOD infrastructure in the region is
    adequate to meet today's needs. We regularly assess the evolving
    security environment and associated changing requirements for the
    Arctic region. Thus, in accordance with the Fiscal Year 2017 NDAA, and
    since the ``Strategic Arctic Port'' report concluded that no Strategic
    Arctic ports were required, there are no recommendations for the
    designation of one or more ports as Department of Defense Strategic
    Arctic Ports.
                             marine corps training
        17. Senator Sullivan. General Neller, can you please describe--in
    detail--the Marine Corps current plan to begin training in Alaska? What
    specific sites will be used, what type of training will be done, and
    how many Marines will be involved in each training exercise?
        General Neller. To fully utilize and exploit opportunities for
    amphibious cold-weather training in Alaska, I would work with our
    Training and Education Command, associated commands in Alaska, and our
    unit commanders to seek affordable and sustainable venues that would
    increase our combat readiness in cold-weather operations.

        18. Senator Sullivan. General Neller, can you elaborate on the
    Marine Corps mid-term and long-term plans to train in Alaska,
    specifically focusing on combined arms live fire exercises and the use
    of Alaska's Joint Pacific Alaska Range Complex (JPARC)? From what
    installation(s) would the Marine Corps operate? What facilities--if
    any--would you expect them to use and/or need?
        General Neller. I would continue efforts to take advantage of
    Alaska's terrain, climate, and world-class training in the Joint
    Pacific Alaska Range Complex (JPARC) for Marine deployment for
    training, ensuring that those opportunities are affordable and
    sustainable from a global force management perspective. The size of the
    JPARC airspace--vertical (altitude) and horizontal (square miles)--
    offers unique opportunities for aviation to exercise a broader range of
    aviation capabilities. Other benefits include less congestion and
    competition for ranges and periodic opportunities to train alongside
    joint and partner nation forces.
                                   __________
                  Questions Submitted by Senator David Perdue
                        sustainment of new acquisitions
        19. Senator Perdue. Secretary Spencer, the Navy is pursuing the
    development and procurement of various advanced technologies. One such
    technology is the MQ-25 tanker drone that is in a six year development
    effort moving toward a 2024 declaration of initial operational
    capability. The sustainment of new and technologically advanced weapons
    systems like the F-35, however, is proving to be a major challenge for
    all of the Services. Among other supply chain deficiencies, military
    depots were found to be 6 years behind schedule in their capabilities
    to repair F-35 parts. Has the Navy projected its sustainment costs for
    the MQ-25?
        Secretary Spencer. Yes, the current Acquisition Program Baseline
    has an estimated operating and support cost of $13.78 billion, covering
    a 30-year program life cycle of 74 aircraft flying 8773,000 flight
    hours. Military Construction ($778 million) is currently in place to
    stand up all depots and hangers by fiscal year 2028.

        20. Senator Perdue. Secretary Spencer, to what extent has the Navy
    considered organic solutions for short and long-term maintenance of the
    MQ-25?
        Secretary Spencer. The MQ-25 will be maintained organically at the
    organizational level by Navy Sailors assigned to a squadron once the
    MQ-25 reaches Initial Operational Capability. Intermediate level
    maintenance will be performed organically by Navy Sailors at Fleet
    Readiness Centers. The Navy's strategy for establishing depot level
    repair includes performing a Core Logistics Analysis to determine core
    sustainment requirements and performing a Source of Repair Analysis
    (SORA) to identify organic depot repair sites and compliant commercial
    support arrangements. The SORA considers organic depot facilities
    across all services to help the program manager implement performance
    based logistics strategies that optimize total system availability
    while minimizing cost and logistics footprint. The MQ-25 SORA
    recommended organic depot facilities across the Department of Defense
    for system and sub-system sustainment. As the MQ-25 design is refined,
    a Level of Repair Analyses (LORA) and follow on economic LORA will
    determine the level of repair for each component of the MQ-25 and the
    most cost effective level of repair or replacement. This analysis will
    feed a Depot Source of Repair (DSOR) decision. The DSOR will ensure
    compliance with title 10 U.S.C. sections 2464/2466 and include
    industrial based optimization, capacity and surge requirements,
    criticality of the system, leverage existing Performance Based
    Logistics arrangements, limited inventory of the system, and location
    of the MQ-25 basing sites to support operational needs. Funding for
    depot facilities and capabilities stand up has been included in the
    Military Construction and Operating and Support cost estimates.

        21. Senator Perdue. Secretary Spencer, how does the Navy plan to
    capitalize on lessons learned from RQ-4 sustainment, which is now
    organically maintained by the Robins Air Force Base Air Logistics
    Complex?
        Secretary Spencer. Over the past few years the MQ-4C Triton and RQ-
    4 Global Hawk programs have exchanged sustainment concepts and planning
    in efforts to exploit lessons learned and to coordinate future
    sustainment activities. The Global Hawk program is transitioning from
    Contractor Logistics Support (CLS) sustainment strategy to an
    organically supported weapon system. The timing of transition has
    presented numerous opportunities for cooperation and shared investments
    for establishment of depot-level repair capability. The Triton Joint
    Depot Source of Repair determinations are complete and include
    capabilities at all three Air Logistics Complexes (ALC) for common
    subsystems. The two programs have coordinated capability standup
    priorities, activities, and recommended investment sharing. Major sub-
    systems include landing gear, flight controls, and engine. Common
    engine overhaul and major repair capability is in-place in a joint
    arrangement with Oklahoma City ALC. The Triton incorporated lessons
    learned provided through site visits to Global Hawk facilities and
    subject matter experts during the MILCON and airfield support
    requirements definition. Additional opportunities for greater
    collaboration and data exchange to enhance the supportability of the
    two platforms continue to be actively explored through regular Program
    Office engagements and the Q-4 User's Group. Future areas of discussion
    include, but are not limited to, the following: 1. Engineering
    methodologies to be used in defining scheduled maintenance requirements
    2. Aircraft Age Exploration and Aircraft Conditional Inspection 3.
    Interactive Electronic Technical Manuals 4. Advance Material
    (Composite) Repair Development 5. Aircraft Non-Destructive Inspection
    standards 6. Strip, Paint, and Fill and Fair Process 7. Paint and
    Corrosion Control Manual 8. Support Equipment 9. Maintenance Planning
    Database
                        inter-service depot maintenance
        22. Senator Perdue. Secretary Spencer, what are the benefits of
    inter-service depot maintenance?
        Secretary Spencer. The benefits of inter-service depot maintenance
    for the Department of Defense (DOD) and Department of the Navy is the
    ability to leverage existing capability, capacity, expertise, and
    lessons learned across the DOD maintenance, repair, and overhaul
    enterprise to focus on readiness requirements in the most effective and
    efficient manner.

        23. Senator Perdue. Secretary Spencer, what have been the benefits
    of moving Navy C-130 and C-17 work to the Warner Robins Air Logistics
    Complex?
        Secretary Spencer. One of the primary benefits of the directed move
    from Ogden (OO-ALC) to WR-ALC, has been a revitalized relationship
    between the United States Air Force (USAF) and the United States Navy
    engineering and logistics departments at WR-ALC. This move has resulted
    in more unified and streamlined depot overhaul procedures to include
    both quality assurance and turnaround time. Additionally, manpower and
    support equipment constraints for both the USAF and Navy for concurrent
    workload at OO-ALC will be mitigated by the migration of this workload
    to WR-ALC.
                                   __________
                   Questions Submitted by Senator Rick Scott
                          marine corps aav-su program
        24. Senator Scott. Secretary Spencer, on August 17, the Department
    of the Navy made an abrupt decision to cancel the Amphibious Assault
    Vehicle Survivability Upgrade program. Given the immediate need for
    safe, reliable, and survivable ship-to-shore transportation for our US
    Marines, I do not understand the decision. Cancelling this program
    keeps our Marines at risk for the next ten years, or until the next
    generation vehicle is fielded. This is simply unacceptable. Further
    defying explanation, is that the Navy is cancelling a firm fixed price
    contract. Such types of contracts are a victory for taxpayers. The
    Marine Corps asked for my help to preserve this program in the Fiscal
    Year 2019 NDAA, yet you decided to cancel the program shortly after the
    NDAA was signed into law. Congress also appropriated about $97 million
    for it this year. To be honest, I would like to see this program re-
    instated. I fear the Navy's treatment of the contractor will result in
    less competition for this work in the future. We need more companies
    competing for these programs, not less.
        Secretary Spencer, I understand you and Secretary Geurts have been
    in discussions with the contractor regarding certain costs that they
    incurred to keep program costs down and to maintain the contemplated
    schedule. Could you tell me where the Navy stands in resolving this
    issue?
        Secretary Spencer. The Amphibious Assault Vehicle Survivability
    Upgrade (AAV SU) program was initiated to enhance the legacy AAV's
    survivability, a limited effort deliberately intended to upgrade only a
    portion of the AAV fleet, and to serve as a bridge until the Marine
    Corps fielded Amphibious Combat Vehicle (ACV) 1.2. This plan was based
    on the estimated arrival of its replacement, the ACV and based on the
    capabilities of each variant of the ACV. Originally, the ACV 1.1
    variant was to provide land and limited ship-to-shore amphibious
    capability only. ACV 1.2 would provide the missing ship-to-shore
    capability, while both ACV variants would provide enhanced
    survivability to the AAV. The expected time lapse between the 1.1 and
    1.2 variants led the Marine Corps to pursue the AAV SU in order to
    maintain enough operationally relevant vehicles to support the
    requirements of our forward deployed forces. There were several
    developments which contributed to the decision to divest of AAV SU.
    First was the release of the National Defense Strategy in December 2017
    and the following guidance issued from the Secretary of Defense
    (SECDEF) and Congress. The SECDEF's guidance for divestment decisions
    prioritizes investment in modernization for the capabilities needed in
    the future operating environment and pacing competitors over modest
    improvements to ``legacy programs.'' Congressional guidance also
    consistently directed the services to re-consider investment in legacy
    programs such as AAV. Subsequently, the Commandant of the Marine Corps
    directed senior leaders to begin addressing possible divestment
    opportunities. In July 2018, the Marine Requirements Oversight Council
    (MROC) convened to officially review acquisitions programs for
    potential divestiture. The MROC determined that the need for the AAV SU
    program had been significantly reduced and recommended divesting of the
    program, while maintaining investment in certain sub-systems such as
    the Remote Weapon Station and Tactical Communications Modernization.
    Significant to this decision was the fact that the ACV 1.1 program had
    progressed faster than expected. The ACV 1.1 variant demonstrated its
    ability to be a robust swimmer with ship-to-shore capabilities and
    increased mobility and survivability during testing in 2018. This
    eliminated the requirement for the bridge capability provided by AAV
    SU. Accordingly, the Commandant approved the divestiture decision in
    August of 2018. The Termination for Convenience process dictates that
    all aspects of liability and termination costs will be negotiated by
    the assigned Defense Contract Management Agency termination contracting
    officer in good faith and in due time. The Government has requested a
    termination proposal from the vendor and until such time as we have
    that proposal, it is difficult to make any assessment as to what will
    or will not be acceptable as covered termination costs. In reference to
    investments made by the vendor, the Marine Corps recently received a
    Request for Equitable Adjustment from the Science Applications
    International Corporation (SAIC) regarding long lead material purchased
    for a portion of the contract which was not executed. This request is
    under careful consideration by our contracting and legal teams and will
    be adjudicated in a fair and reasonable manner. The Marine Corps has
    repeatedly demonstrated an understanding of the value of additional
    players in the combat and tactical vehicle market. The competitive
    selection of SAIC both as an early competitor for the ACV and the AAV
    SU program supports this assertion.

        25. Senator Scott. General Neller, are you comfortable with the
    risk you are placing Marines at by keeping legacy AAVs in the fleet for
    at least another ten years?
        General Neller. Yes. The Marine Corps will maintain 10 infantry
    battalions of lift to include 10 Amphibious Assault companies. Risks
    are moderately mitigated by the re-prioritization of ACV fielding to
    OPFOR from 125 to 150 vehicles per year. In addition, the AAV
    modification line will mitigate some risks by upgrading to Amphibious
    Remote Weapon Station and improving communications. The follow-on ACV,
    currently being tested, has demonstrated several critical objective
    level requirements and will be significantly more lethal and survivable
    than the AAV. The Marine Corps legacy AAV fleet is in sundown, the
    total number of vehicles is being decreased annually. All AAVs are
    planned to be replaced through the ACV program.
                                   __________
               Questions Submitted by Senator Richard Blumenthal
                                     ch-53k
        26. Senator Blumenthal. General Neller, I understand that
    modernization is the primary method to improve aviation readiness in
    the Marine Corps. Replacing the legacy CH-53E remains crucial as low
    numbers of flyable aircraft is affecting Marine Corps aviation
    readiness. What does heavy lift capability bring to the Marine Corps?
    How will it be improved with the CH-53K? Can any other helicopter meet
    heavy lift requirements?
        General Neller. Just as the heavy lift mission remains relevant
    today, it will also be key for future operating concepts. The legacy
    CH-53E continues to do the heavy lifting for the Marine Corps but has
    approximately 40 percent of its service life remaining with growing
    sustainment and obsolescence issues. There are 142 CH-53E's in the
    current inventory, covering down on a 200 aircraft requirement. Years
    of war and worldwide operations have impacted sustainability,
    availability, and exacerbated an inventory shortfall. To mitigate these
    issues, significant investments in readiness initiatives like RESET and
    the Engine Reliability Improvement Program (ERIP) have been made to
    ensure that CH-53E remains ready and relevant until the arrival of the
    CH-53K to the Fleet Marine Force. Vertical heavy lift provides the
    Marine Corps with the speed, agility and the flexibility required to
    defeat a near-peer adversaries. As the Marine Corps has modernized, its
    equipment has not only gained decisive capability, but weight as well
    (e.g. missionized JLTV is 22.5K, 7K heavier than an up armored HMMWV).
    The ability to maneuver Marines and their equipment from anywhere
    facilitates our forward power projection and the successful
    manipulation of engagements with our adversaries. The blitzkrieg of
    this maneuver hinges on the MAGTF's ability to conduct heavy lift
    operations. This capability relieves pressure on surface connectors
    (land and sea) and exponentially bolsters the speeds associated with
    them. The ability of a commander to maintain the speed and tempo of an
    engagement is also empowered by vertical heavy lift's ability to
    forward refuel and rearm other ground and air platforms during
    operational maneuver. Vertical heavy lift has also recovered countless
    downed Joint and Coalition aircraft on the battlefield, as well as the
    training environment. This enables us to preserve assets and
    warfighting capability. Probably the least publicized but most
    significant capability of vertical heavy lift is in the support of
    humanitarian aid operations. The agility and forward presence of the
    Marine Expeditionary Unit allows this asset to respond within days if
    not hours to humanitarian plight. Vertical heavy lift can transport
    countless aid requirements from water and medical supplies to
    generators and heavy equipment. These supplies can be delivered to the
    most devastated and remote areas. Unlike fixed wing platforms, the
    vertical heavy lift capability is not reliant on a functioning airport
    or usable runways. Finally, when state and local aerial firefighting
    assets are overwhelmed, Marine Corps vertical heavy lift is routinely
    called upon to supplement. Its speed, agility and excessive payload are
    much sought after traits when battling wildfires. The responsibility of
    the Marine Corps to provide vertical heavy lift to the MAGTF and Joint
    Force is essential in the execution of our National Defense Strategy
    and the diplomacy of our Nation. The CH-53K will bring quantum
    improvements to the current vertical heavy lift capability of the
    Marine Corps. First, it is the only fully marinized heavy lift
    rotorcraft that will support current and future warfighting concepts by
    lifting 100 percent of the equipment to the ranges that the Marine
    Corps will require. The CH-53K is a state of the art aircraft that
    brings our fighting force into the next century. Lifting almost three
    times more than its predecessor in a hot heavy environment out to 110
    NM, the safety and reliability of this aircraft are unprecedented for a
    rotorcraft of this size. Enhancements in information management,
    mission integration and flight stability greatly reduce the pilot
    workload in the most challenging and historically demanding
    environments. The CH-53K has also been designed with the maintainer in
    mind. Everything from work platforms, ergonomic workspaces and
    component orientation have been influenced by current seasoned Marine
    maintainers. All of these initiatives reduce the maintainer workload
    and cost of ownership while increasing availability and reliability.
    Finally, as I mentioned previously there are currently 142 CH-53Es to
    do the current Heavy lift mission. While the CH-53E is doing a great
    job, we are operating at a reduced inventory. The CH-53K program of
    record is 200 aircraft. 200 aircraft allows the Marine Corps to operate
    at a full Table of Organization for the life of the aircraft and ensure
    that we can provide the Heavy lift capability to the Nation. The answer
    to your final question is no. There is currently nothing else that will
    meet the heavy lift requirement other than the CH-53K.

        27. Senator Blumenthal. General Neller, in terms of the overall
    program, I understand the CH-53K is performing well and meeting its
    marks; however, the Marine Corps has initiated an above threshold
    reprogramming request for $158 million to cover unanticipated
    shortfalls and keep the CH-53K program on track. While there are
    numerous reasons for the research and development shortfalls, can you
    tell me exactly why the Marine Corps missed the budget mark for funding
    in fiscal year 2019? If this above threshold reprogramming request is
    not approved by Congress, what overall impact would it have on the CH-
    53K program?
        General Neller. The Marine Corps did not identify the fiscal year
    2019 shortfall until after the budget controls had already left our
    hands. A couple of items influenced this. First, the rate of closure on
    technical deficiencies and testing were not being conducted at the rate
    that we had planned on. There were also some new discoveries and
    technical issues that slowed the test progress and shifted some of the
    scope of effort on higher priority challenges early in fiscal year
    2019. We as a team also had to ensure that with the new technical
    challenges and demonstrated test efficiency, funding request were
    commensurate with funding requirements. This detailed validation was
    time intensive requiring the integrated effort of both NAVAIR and the
    original equipment manufacturer (OEM) to ensure its accuracy. If the
    ATR is not approved it will require the test program to slow down even
    more than it already has. The program office will direct Sikorsky to
    reduce spending and scope to what is currently in the budget. This will
    ultimately delay Initial Operational Capability and the first
    deployment that is scheduled for 2023-2024. I have also been told that
    Sikorsky will have to move or reduce the workforce on the CH-53K team
    and that knowledge base will not be easily replaced.

        28. Senator Blumenthal. General Neller, despite the need for
    additional funds in fiscal year 2019 and in the out years, where does
    the CH-53K program stand with regard to a Nunn-McCurdy violation?
        General Neller. We are currently at 22.02 percent above the
    original December 2005 baseline. Our program office constantly updates
    this as we change the scope and time in the program. Right now we are
    not at risk of a Significant Nunn-McCurdy violation, but as with any
    program, delays to production or issues discovery will increase this
    risk. As the program continues to progress, we will closely monitor the
    potential for violation and make all efforts to avoid it.
                              c-130t modernization
        29. Senator Blumenthal. Admiral Moran, earlier this month, the
    Marine Corps released its findings regarding last year's fatal C-130T
    mishap that killed 15 Marines and one sailor. The investigation
    determined the primary casual factor of the mishap was an unnoticed
    fatigue crack on a propeller blade, resulting from corrosion not
    removed during its depot overhaul, which caused a series of cascading
    failures that led to the aircraft breaking up in mid-air. Although the
    Marine Corps intends to replace its legacy C-130T fleet with new C-130J
    aircraft, Navy modernization efforts for its 43 C-130T aircraft will
    replace the legacy four bladed propellers with an improved eight bladed
    propeller system known as the NP2000 Propeller System--manufactured by
    UTC's Collins Aerospace in Windsor Locks, CT. The NP2000 Propeller
    System offers a significant operational capability enhancement to
    current U.S. Navy C-130T aircraft that have significant airframe life
    remaining, but at a fraction of the cost of replacing the aircraft with
    C-130J. After more than a year following the fatal Marine Corps C-130T
    mishap, I understand a majority of the Navy's C-130T fleet remains
    grounded? Are C-130T propellers the Navy's number one aircraft
    readiness degrader?
        Admiral Moran. There are currently 31 Navy C-130T aircraft and 12
    USMC aircraft. The Navy's fleet consists of 24 Fleet Logistics Support
    Wing (FLSW) aircraft, six Navy Test Wings Atlantic / Pacific aircraft,
    and Fat Albert. Currently five of the 24 Navy FLSW C/KC-130T aircraft
    have NP2000 propellers, with the remaining 19 scheduled to complete the
    transition by fourth quarter, fiscal year 2020. Navy Test Wings will
    remain with 54H60 for the time being. Until the transition is complete,
    propellers will continue to be a readiness degrader and therefore, a
    closely monitored item.

        30. Senator Blumenthal. Admiral Moran, for the Navy's fiscal year
    2020 budget submission, will there be more emphasis on modernizing Navy
    C-130T propellers or should we expect to see another unfunded
    requirement like we did this past year for fiscal year 2019?
        Admiral Moran. The funding supplied in fiscal year 2018 for the
    NP2000 propeller fully funded equipping the existing fleet of 24 Navy
    Fleet Logistics Support Wing (FLSW) K/C-130T aircraft. To date, 5 FLSW
    aircraft have been modified and the remaining 19 are scheduled to
    complete transition by fourth quarter, fiscal year 2020. Future budget
    submissions may include funding for the Navy's six C-130 test aircraft;
    however, the decision to transition has not yet been made.
                                   __________
                  Questions Submitted by Senator Mazie Hirono
                       surface ship maintenance strategy
        31. Senator Hirono. Admiral Moran, how well is the current surface
    ship maintenance strategy performing in terms of providing sufficient
    throughput and timely delivery of ships back to the Fleet in terms of
    meeting the requirements of the Optimized Fleet Response Plan?
        Admiral Moran. The Navy is continuing to work for greater
    improvements to on-time delivery and availability performance through
    Private Sector Optimization (PSO) and Private Sector Improvements
    (PSI). Initiatives include Small Dollar Value Growth (SDVG) that sets a
    fixed price for growth valued over $25,000, standard item reductions /
    modifications, checkpoint reductions, awarding ships earlier, and the
    vertical and horizontal grouping of ships. The Navy continues to engage
    regularly with industry, hosting two Industry Days thus far in FY 2019
    with a third planned in September, as we work in collaboration to
    implement contracting strategies and administrative improvements that
    provide for increased predictability and stability in the industrial
    base. These improvements will allow industry to better plan and execute
    the required work allowing ships to meet OFRP commitments.

        32. Senator Hirono. Admiral Moran, if performance is not meeting
    the Navy's needs, what is the Navy implementing or considering to
    improve throughput and timeliness?
        Admiral Moran. Navy initiatives to improve throughput and
    performance include using solicitation approaches such as Vertical and
    Horizontal Grouping to increase stability and predictability in the
    industrial base. With Vertical Grouping, the Navy groups availabilities
    with similar start dates into a single solicitation. Horizontal
    Grouping combines multiple ship availabilities that have a similar work
    scope over a longer time period into a single solicitation. Vertically
    grouped ships in Norfolk were awarded in February, and the first two
    horizontal groupings (one group in Norfolk and one group in San Diego)
    are in solicitation now and awaiting industry bids. In order to reduce
    the amount of time needed for change approvals that occur while a ship
    is in execution, the Navy has implemented methods to streamline the
    process for executing contract changes such as the Level of Effort
    (LOE) to Completion and Small Dollar Value Growth initiatives. These
    changes will serve to provide private-sector contractors with improved
    workload and workforce predictability and stability, which are expected
    to improve planning and execution of future work.
                           ship maintenance planning
        33. Senator Hirono. Secretary Spencer, I understand that the Navy
    uses the principle of ``executor in the loop'' to better coordinate
    planning for aircraft carrier and submarine maintenance availabilities.
    Is this principle something that could help in surface ship
    maintenance?
        Secretary Spencer. Yes, the surface ship maintenance community
    recognizes the benefit from having the executor involved in
    availability planning as early as possible in the process. One
    significant difference between surface ship and both aircraft carrier
    and submarine maintenance is the contracting timeline. Usually,
    aircraft carrier and submarine availabilities are planned by the
    executing shipyard and given as much as 18-months lead time between
    contract award and the start of the maintenance as opposed to three to
    six months for surface ships. In order to leverage benefits from
    ``executor in the loop'' principles while maintaining fair and open
    competition, the Navy is developing a strategy that will afford surface
    ship maintenance contractors the opportunity for earlier engagement in
    the planning process by publically issuing preliminary work items or
    draft specifications for review.
                              contracting strategy
        34. Senator Hirono. Secretary Spencer, how is the current surface
    ship maintenance contracting strategy performing in terms of creating
    the business conditions needed for industry to attract the skilled
    labor and capital necessary to perform at optimal levels and meet the
    Navy's expectations and needs both today and in the future?
        Secretary Spencer. The Navy recognizes that the current contracting
    strategy requires changes to provide a more predictable and stable
    longer term workload so industry can better forecast capacity needs.
    Therefore, we are implementing contracting changes and initiatives to
    update the acquisition strategy to improve longer term workload
    stability and predictability. Capacity growth is assessed by regions
    monthly. We have recently observed signs of improvements in capacity
    and capability such as the Virginia Ship Repair Association (Feb 2019)
    reporting that they have increased member companies from 250 in 2016 to
    more than 280 at the close of 2018.
                        preventing surface ship mishaps
        35. Senator Hirono. Mr. Pendleton, following the tragic mishaps
    involving the destroyers Fitzgerald and McCain last year, the Navy
    undertook a lengthy investigation and produced two reviews full of
    recommendations, many of which were incorporated into law in the Fiscal
    Year 2019 NDAA. Do you believe that these investigations,
    recommendations and changes required in the NDAA fully address the root
    causes of the surface mishaps in 2017?
        Mr. Pendleton. In sum, the Navy has taken many actions to address
    the root causes of the 2017 surface ship mishaps, but sustained
    attention will be required to ensure those actions result in meaningful
    and lasting change. Looking forward, we believe additional attention by
    the Navy is needed to address manning shortfalls and maintenance
    challenges.
    Status of Navy Reforms
        The Navy chartered its Readiness Reform Oversight Committee (RROC)
    in January 2018 to implement more than 100 recommendations derived from
    the Comprehensive Review and the Strategic Readiness Review it
    conducted in 2017, as well as related recommendations from GAO and
    other audit organizations. The Navy recently reported that 82 percent
    of those recommendations have been implemented. \1\ However, the Navy
    defines a recommendation as implemented when it initiates action and
    sets policy instead of when its actions have been evaluated to
    determine whether they have achieved their intended outcomes. As we
    testified in December 2018, and as senior Navy officials have
    recognized, reform efforts are ongoing and it will take years to
    determine the efficacy of the Navy's actions.
        GAO has made recommendations in addition to the ones being tracked
    by the Oversight Committee. In total, GAO has made 25 readiness-related
    recommendations to the Navy and Marine Corps, 19 of which relate to
    surface ship readiness. \2\ The Navy concurred with the majority of
    them, and has many actions underway that partially address them, but
    has not completed implementation of any. Attention to these
    recommendations can assist the Navy as it continues to address the
    causes of the surface ship mishaps in 2017 and seeks to rebuild the
    readiness of the surface fleet. We will monitor this going forward.
    ---------------------------------------------------------------------------
        \1\ U.S. Navy, Vice Chief of Naval Operations, RROC: One Year Later
    (Feb. 25, 2019).
        \2\ GAO, Navy and Marine Corps: Rebuilding Ship, Submarine, and
    Aviation Readiness Will Require Time and Sustained Management
    Attention, GAO-19-225T (Washington, D.C.: Dec. 12, 2018).
    ---------------------------------------------------------------------------
    Ship Manninq Shortfalls
        While both of the Navy's reviews are in part focused on addressing
    ship manpower requirements and manning, the issue of undermanned crews
    could benefit from increased attention by the Navy to systemic or
    underlying causes. Specifically,
          Manpower requirements: Pursuant to GAO's recommendations,
    the Navy has conducted studies across its surface ship classes to
    reevaluate the proper size and composition of its crews, and has
    drafted changes to guidance intended to prevent the perpetuation of
    outdated or unrealistic manpower requirements. However, the Navy has
    yet to update its manpower requirements for ships based on these
    studies. Once a stable baseline for the number and type of required
    personnel is established by updated manpower requirements, the Navy
    could better understand the scale of its service-wide personnel issues.
    For example, the Navy has cited it has a shortage of sailors with the
    proper experience and skills to fully man the fleet and is expecting
    manning shortfalls to persist through at least fiscal year 2021.
    However, these shortfalls are likely to be worse given that the Navy
    has not yet updated manpower requirements per our recommendation.
          Manning: The Navy established a minimum threshold of
    filling at least 95 percent of billets in its ship crews (referred to
    as fill), with a minimum goal of 92 percent of those sailors having the
    right qualification for the billet (known as fit). These fit-fill goals
    are taken from the billets authorized (i.e. funded) every year, not
    from the number or type of sailors required by updated ship manpower
    requirements. Ninety-two percent fit and 95 percent filled results in
    crews with unfilled billets, and that workload is redistributed among
    other crew members. Also, as we learned during discussions with
    officials and ship crews in November 2018, the Navy's methods for
    tracking shipboard manning do not account for sailor experience, and
    may overstate the number and skill level of sailors aboard and
    available to work at any given time. For our December 2018 testimony,
    we conducted group discussions with ship crews, during which sailors
    consistently told us that ship workload had not decreased, workweeks
    over 100 hours remained common, and that it was still extremely
    challenging to complete all required workload while getting enough
    sleep. It will be important for the Navy to man its ship crews
    according to updated manpower requirements to ensure that sailors are
    not overworked.
    Maintenance Challenges
        As we testified in December 2018 and have previously reported, the
    Navy is increasingly unable to complete surface ship depot maintenance
    on time and on cost. \3\ As noted in both the Navy's Comprehensive
    Review and Strategic Readiness Review, this additional time and cost
    needed to complete depot maintenance is pulling resources from other
    areas and contributing to systemic problems. Additionally, in May 2016
    we reported that the Navy's adherence to revised deployment, training,
    and maintenance schedules-the Optimized Fleet Response Plan--
    contributes to wide swings in workload. \4\ These swings in workload
    erode the industrial base and exacerbate maintenance challenges. While
    the Navy's Strategic Readiness Review recommended that the Navy should
    increase the duration of surface ship availabilities by creating more
    comprehensive work packages and reinstituting ship-check validation,
    the effectiveness of these actions has not been determined.
    ---------------------------------------------------------------------------
        \3\  GAO-19-225T.
        \4\  GAO, Military Readiness: Progress and Challenges in
    Implementing the Navy's Optimized Fleet Response Plan, GAO-16466R
    (Washington, D.C.: May 2, 2016).
    ---------------------------------------------------------------------------
        In July 2017, we also reported that ships are being delivered to
    the surface fleet in incomplete condition, leading to an increased
    maintenance burden before they can operate. \5\ Additionally, the Navy
    changed its contracting strategy for private shipyard maintenance in
    2015 with the intention of reducing cost growth, but reductions in cost
    growth are not yet evident. We recommended that the Navy systematically
    assess the new strategy's implementation. The Navy concurred with our
    recommendation and responded that it would submit biennial reports
    covering its assessment, but it has not yet released its first biennial
    report. \6\
    ---------------------------------------------------------------------------
        \5\ GAO, Navy Shipbuilding: Policy Changes Needed to Improve the
    Post-Delivery Process and Ship Quality, GAO-17418 (Washington, D.C.:
    July 13, 2017).
        \6\ GAO, Navy Ship Maintenance: Action Needed to Maximize New
    Contracting Strategy's Potential Benefits, GAO-1754 (Washington, D.C.:
    November 21, 2016). We did not include this report's recommendation in
    our total above since it is not directly related to ship readiness.
    However, the recommendation relates to maintenance cost growth, which
    the Navy cited in the Strategic Readiness Review as being a depot
    maintenance challenge.
    ---------------------------------------------------------------------------
    Ongoing GAO work
        GAO has ongoing work examining key Navy training, manning, and
    maintenance issues that we expect to report on over the next year that
    will provide additional insight. Specifically, we will be reporting on:
          Navy surface warfare officer training and career paths,
          the Navy shipyard improvement plan,
          Navy overseas ship maintenance and repair capacity,
          implications of acquisition decisions on the sustainment
    of Navy ships, and
          Navy's implementation of the Multiple Award Contract,
    Multi Order (MAC-MO) contracting strategy.
                                   __________
                    Questions Submitted by Senator Tim Kaine
                           shipyard optimization plan
        36. Senator Kaine. Secretary Spencer, issued almost a year ago, the
    Shipyard Optimization Plan is an attempt to optimally size, configure,
    and locate the Navy's public shipyard infrastructure in order to meet
    operational needs. The total estimated cost for this plan is $21
    billion over 20 years, which is nearly three times what has
    historically been spent on shipyard capital investment. What will be
    the operational effects on the fleet if the Navy does not receive the
    estimated funding identified in the Shipyard Optimization Plan and what
    is your mitigation plan if you do not receive all the planned funding?
        Secretary Spencer. If the Navy does not receive the estimated
    funding identified in the Shipyard Infrastructure Optimization Plan
    (SIOP) Report delivered to Congress in February 2018, an estimated 67
    major drydock availabilities will have to be moved, deferred and/or
    rescheduled due to the lack of adequate dry dock capacity. The
    shipyards' current outdated industrial layout will continue to impact
    throughput, productivity, and morale. Naval shipyard capital equipment
    infrastructure is well beyond its effective service life. Continuing to
    rely on aged equipment for maintenance availabilities and places their
    schedules at risk. Fully funding SIOP is crucial to the Navy's ability
    to improve productive capacity at our shipyards to support increased
    maintenance throughput and on time delivery of a growing fleet. If the
    funding is not received for the optimization effort, the Navy will
    attempt to mitigate existing depot level maintenance challenges by
    continuing to follow the current facility sustainment model and work
    towards recapitalizing the shipyards within that constrained funding
    profile. Full benefits of the recapitalization with a focus on
    optimization will be delayed or may not be realized at all to the
    detriment of the Navy's readiness.
             navy and marine corps installations funding shortages
        37. Senator Kaine. Secretary Spencer, as you know, the current
    backlog of installation infrastructure maintenance is significant. It
    is highly unlikely the Navy and Marine Corps will be able to request
    and receive enough military construction to find their way out of this
    backlog, which will continue to degrade installation readiness. In
    recent years, the Resilient Energy Program Office (REPO) has leveraged
    third-party investment to improve installation readiness. However, REPO
    projects have slowed to almost a halt in the last year. Why has the
    REPO effort slowed, given the large infrastructure backlog, and do you
    commit to placing an emphasis on REPO going forward?
        Secretary Spencer. The Department of the Navy's energy strategy is
    built on the Energy Security Framework and its three pillars of making
    installations reliable, resilient, and efficient. Leveraging third-
    party investments helps us achieve this goal and continues to be a top
    priority for the Navy. The Navy and the Resilient Energy Program Office
    (REPO) remain committed to this priority and utilizing third-party
    investment projects whenever practicable. To better align energy
    investments to mission assurance and critical operational capabilities,
    the Navy created the Energy Mission Integration Group (EMIG) in 2018,
    which leverages REPO expertise to identify the highest priority energy
    gaps, determine the most effective solutions, and execute these
    solutions through authority best suited for the requirement, to include
    third-party investments. The Navy and REPO have executed $800 million
    through 50 projects between fiscal year 2016 and 2018 and intend to
    continue to develop and execute projects through the EMIG process at a
    similar pace in the years to come.
                                 climate change
        38. Senator Kaine. Secretary Spencer, can you talk about some of
    the climate-related impacts you've already observed and which
    installations might make the top 10 most vulnerable to climate-related
    events required by the Fiscal Year 2018 NDAA?
        Secretary Spencer. We are seeing extreme weather events, droughts,
    and sea level rise. Superstorm Sandy caused $50 million in damage at
    Naval Weapons Station Earle. More recently, Hurricane Irma severely
    impacted Naval Air Station Key West in 2017 and Hurricane Florence
    caused $3.6 billion in damage at Camp Lejeune in 2018. Wildfires in
    2018 forced the evacuation of Naval Air Station Point Mugu and burned
    approximately 1,200 acres at Camp Pendleton. Droughts can have broad
    implications for base infrastructure, impair testing activities,
    increase the number of black flag day prohibitions for testing and
    training, and contribute to heat-related illnesses. Naval Station
    Norfolk is experiencing sea level rise averaging 4.6mm per year, with a
    5.1mm increase in 2017. Sea level rise, land subsidence, and changing
    ocean currents have resulted in more frequent nuisance flooding and
    increased vulnerability to coastal storms. The ten most vulnerable
    Marine Corps installations (in no particular order) are:
          Marine Corps Base Camp Pendleton, CA
          Marine Corps Base Camp Lejeune, NC
          Marine Corps Base Camp Butler, Okinawa, Japan
          Marine Corps Base Hawaii, HI
          Marine Corps Recruit Depot Parris Island, SC
          Marine Corps Support Facility Blount Island, FL
          Marine Corps Air Station Beaufort, SC
          Marine Corps Base Quantico, VA
          Marine Corps Reserve Forces, New Orleans, LA
          Marine Corps Recruit Depot San Diego, CA The sixteen*
    most vulnerable Navy installations (in no particular order) are:
          Naval Air Station Key West, FL
          Naval Submarine Base Kings Bay, GA
          Naval Base Guam, Guam
          Joint Base Pearl Harbor Hickam, HI
          Wahiawa Annex, HI
          Naval Magazine Indian Island, WA
          Naval Base Coronado, CA
          Naval Base San Diego, CA
          Joint Base Anacostia Bolling, DC
          Washington Navy Yard, DC
          Andersen Air Force Base, Guam
          Naval Support Facility Indian Head, MD
          Naval Air Station Oceana, VA
          Naval Air Station Norfolk, VA
          Naval Support Activity Hampton Roads, VA
          Naval Support Activity Hampton Roads--Northwest Annex,
    VA/NC
          Sixteen installations are listed to include installations
    similarly impacted by current and potential future climate events.

                                     [all]