[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
         
         
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                      COMMITTEE ON ARMED SERVICES

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

                        Subcommittee on Seapower

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

            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:]
      
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    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]