[Senate Hearing 115-437]
[From the U.S. Government Publishing Office]



 
       DEPARTMENT OF DEFENSE APPROPRIATIONS FOR FISCAL YEAR 2018

                              ----------                              


                        WEDNESDAY, MAY 24, 2017

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 10:30 a.m., in room SD-192, Dirksen 
Senate Office Building, Hon. Thad Cochran (chairman) presiding.
    Present: Senators Cochran, Shelby, Collins, Murkowski, 
Graham, Blunt, Daines, Moran, Durbin, Murray, Reed, Tester, 
Schatz, and Baldwin.

                         DEPARTMENT OF DEFENSE

                         Department of the Navy

                        Office of the Secretary

STATEMENT OF HON. SEAN J. STACKLEY, ACTING SECRETARY


               opening statement of senator thad cochran


    Senator Cochran. The committee will please come to order.
    This morning, our committee is reviewing the budget 
submission of the Secretary of the Navy, the Chief of Naval 
Operations, and the Commandant of the Marine Corps. We 
appreciate very much the cooperation with our committee in 
providing statements for our record of the hearing.
    We have the good fortune of having the best Armed Forces of 
any Nation. Our committees of jurisdiction have reviewed your 
written statements, so we invite you to make a summary 
statement that you think would be helpful to our understanding 
of your budget submissions.
    We have members of the committee, who served for some time 
collectively, and it is a pleasure working with them, and I 
appreciate their attendance today. We will proceed now to hear 
from them. If there are any opening statements, we will be glad 
to put your statements in the record, and then proceed to hear 
from the witnesses.
    [The statements follow:]
               Prepared Statement of Senator Thad Cochran
    Good morning, the subcommittee will come to order. Today we are 
receiving testimony on the fiscal year 2018 Navy and Marine Corps 
budget request. We are pleased to welcome, the Honorable Sean J. 
Stackley, Acting Secretary of the Navy; Admiral John M. Richardson, 
Chief of Naval Operations; and General Robert B. Neller, Commandant of 
the Marine Corps.
    For fiscal year 2018, the President's budget requests $171.5 
billion in base funding to support the Navy and Marine Corps. The 
request is $12 billion more than the current funding level. The request 
also includes $8.5 billion to support on-going Overseas Contingency 
Operations. These funds will support the training and operations of 
Sailors and Marines throughout the world.
    We appreciate the complexity of building the fiscal year 2018 
budget and the tradeoffs necessary to ensure sufficient readiness and 
investments needed to position for emerging threats to our security.
    We look forward to your testimony, and sincerely appreciate your 
service to our Nation, as well as the dedication and sacrifices made 
daily by all the men and women under your command.
    Your full statements will be included in the record.
    Now I will turn to the Vice Chairman, the distinguished Senator 
from Illinois, for his opening remarks.

    Senator Cochran. If not, we will welcome specifically the 
Honorable Sean J. Stackley, Acting Secretary of the Navy; 
Admiral John M. Richardson, Chief of Naval Operations; and 
General Robert B. Neller, Commandant of the Marine Corps.
    The purpose of the hearing is to review the 2018 fiscal 
year budget request from the Department of the Navy and Marine 
Corps. We thank you so much for your leadership, and you may 
proceed to provide us the benefit of your statement.

               SUMMARY STATEMENT OF HON. SEAN J. STACKLEY

    Secretary Stackley. Mr. Chairman, distinguished members of 
the subcommittee.
    Thank you for the opportunity to appear before you today 
with the CNO (Chief of Naval Operations) and the Commandant to 
testify on the Department of the Navy's 2018 budget request.
    We are extremely grateful for your subcommittee's 
particular continued strong support for our Navy and Marine 
Corps, and we look forward to working with you on this year's 
budget request.
    As the Nation's forward global force, your Navy and Marine 
Corps stand ready to respond to crisis every hour, every day 
around the world. From the northern Atlantic to the 
Mediterranean, from the Straits of Hormuz to the Straits of 
Malacca, and the vast expanses of the Pacific, and on the 
ground in 37 countries around the world today, 110,000 sailors 
and marines, and more than one-third of our fleet are deployed 
conducting combat operations, international exercises, 
maintaining maritime security, providing strategic deterrence, 
and standing by to respond to humanitarian crises or natural 
disasters.
    The value of our forward presence and our ability to 
conduct prompt sea based operations is the surest deterrent to 
conflict and the surest guarantor of our national interests.
    But maintaining the scale of these operations relies upon 
our ability to maintain a high state of readiness. We have been 
increasingly challenged to do so, however, by the growing 
imbalance between the size of the force, the operational demand 
placed on the force, and the funding available to operate and 
sustain the force.
    Years of combat and high operational tempo have accelerated 
the aging of ships and aircraft, increased our maintenance 
requirements, drawn down munitions and supply parts, and 
impacted our training. Budget constraints, budget uncertainty, 
and continuing resolutions have exacerbated these issues with 
the net impact being a decline in overall material condition of 
our ships and aircraft. Accordingly, our priority in this 
budget request is to fully fund maintenance, spares, munitions, 
increase steaming days and flying hours.
    It is critical, however, that we make these course 
corrections without turning to our modernization and 
procurement accounts as bill payers for maintaining our 
readiness while ultimately rely upon growing the force to match 
the challenges ahead. So while building readiness is the 
priority in 2018, building the sized Navy and Marine Corps and 
capacity that the Nation needs will be the priority in the 
upcoming defense strategy review.
    This year's budget request procures eight ships, the 
aircraft carrier Enterprise, two Virginia-class submarines, two 
Arleigh Burke destroyers, one littoral combat ship, a fleet 
oiler, and a towing salvage and rescue. The budget request also 
includes advanced procurement critical to the Navy's top 
shipbuilding priority, the Columbia-class and ballistic missile 
submarine program.
    It is worth noting that the Gerald R. Ford CVN 78 got 
underway today on acceptance trials and is on track to deliver 
this month. Lessons learned from Ford's design and construction 
are driving down costs for her first follow-on ship with the 
John F. Kennedy today.
    The Virginia submarine and Arleigh Burke destroyer programs 
continue the successful production runs and we will be seeking 
your support to continue with the multiyear strategies that 
have yielded substantial savings and provided critical 
stability to the industrial base.
    The Department particularly thanks you for your support in 
2017 with the appropriation of the LPD 29. This added ship 
provides tremendous support to our amphibious lift requirements 
and the industrial base, while providing an effective 
transition to the future of amphibious ship LX(R) program for 
2020.
    In 2014, the Navy was directed to truncate the Littoral 
Combat Ship (LCS) program at 28 LCS and transition to the 
frigate. Our plan proposed to accelerate the frigate design in 
order to avoid a production gap at our LCS shipyards.
    Since that time, the security environment, the budget 
environment, and the industrial base have changed. We are 
refining our requirements of a frigate to increase multi 
mission capability. And in view of the additional year required 
to get to a 2020 contract, we will continue to procure LCS to 
maintain the industrial base.
    The three ships appropriated in 2017, with the additional 
ship requested in this year's budget, ensure continuous 
production at both yards. This rate of production, however, 
only meets the minimum sustainment.
    And so, we will continue to update our assessment of the 
frigate schedule, assess the effects of this and other 
shipbuilding contract awards on the industrial base, and make 
any appropriation modifications to our budget for 2019 to 
ensure healthy competition for the future frigate program.
    The budget request continues the steady recapitalization of 
Navy and Marine Corps aviation capability. In total, we plan to 
procure 91 manned and unmanned aircraft as we shift from large 
scale development efforts to mature production for most of our 
aviation programs.
    Of particular note, the budge request includes funding for 
24 F-35 and 14 Super Hornet aircraft, which will help to arrest 
the decline in our strike fighter inventory while keeping us on 
target for six squadrons of fifth generation aircraft from our 
carrier decks in the 2024 timeframe.
    We are requesting congressional approval for a third V-22 
multiyear procurement in 2018 which would provide the most 
affordable method to procure the final 65 aircraft for that 
program.
    This budget supports end strength of 185,000 Marines, the 
proper size for today's mission. The Marine Corps is invested 
in select ground capabilities to conduct distributed operations 
and address changes in the operational environment including 
procurement of the Amphibious Combat Vehicle, the replacement 
of about one-third of the legacy HMMWV fleet with a Joint Light 
Tactical Vehicle, and survivability upgrades to the legacy 
Amphibious Assault Vehicle.
    Now, the Department of the Navy cannot accomplish its 
mission to maintain readiness or modernize without a strong and 
integrated industrial base. We have utilized contracting tools, 
such as multiyear economic order quantity buys and capital 
expenditure incentives, to provide a stable commitment to 
industry. We appreciate past congressional effort and support 
for these efforts and look for your continued support in the 
future.
    No quantity of next generation of ships or aircraft, 
however, will bring victory without the skilled, dedicated, 
talented sailors, and Marines, and civilians who build, 
maintain, and operate our Navy and Marine Corps, and who 
provide our naval forces with our asymmetric advantage.
    Despite 16 years of combat operations, extended 
deployments, and reserve mobilizations, today's force is the 
most talented and highly performing in history.
    In return, it is our responsibility to provide the 
incentives to attract and the conditions to ensure that all who 
are qualified to serve in our Navy and Marine Corps can do so 
while creating an environment that promotes dignity and respect 
for all. This remains a top priority for the Department.
    In conclusion, our priority in this year President's budget 
request is to rebuild the readiness and lay the foundation for 
future growth in terms of numbers of ships and aircraft, and 
advance capability of the force. To support these objectives, 
we will need your continued support, and look to break the 
cycle of continuing resolutions in providing the increased 
outline budget provided in detail by our President's budget 
request regarding the defense caps as imposed by the Budget 
Control Act.
    I want to thank this subcommittee for your enduring support 
to our sailors, Marines, and civilians, and their families.
    I look forward to answering your questions.
    [The statement follows:]
              Prepared Statement of Hon. Sean J. Stackley
    Mr. Chairman, distinguished members of the Subcommittee, thank you 
for the opportunity to appear before you today to testify regarding the 
Department of the Navy's 2018 President's Budget request.
    Having the opportunity to serve our Sailors, Marines and 
civilians--a force of over 800,000 strong--as the Acting Secretary of 
the Navy is an extraordinary privilege that brings with it 
extraordinary responsibility. The members of this sub-committee 
understand with full recognition the quality and dedication of our men 
and women in uniform who willingly put their Nation before themselves; 
who stand ready to respond to crisis every hour, every day, around the 
world; and who willfully sacrifice their livelihood and, if need be, 
their very life so that we here in America may enjoy the freedoms we 
cherish so deeply. The dedication, professionalism, unwavering 
commitment to duty, and sacrifice shown by our Sailors and Marines and 
their families, and the corps of professional civilians who support 
them, is the foundation upon which our national security is built.
    As the nation's forward global force, the men and women of your 
Navy and Marine Corps are fully deployed, continuously present afloat 
and ashore, promoting and protecting the national interests of the 
United States. If called, they are prepared to `fight tonight' and win. 
But, by operating forward, by maintaining a high state of readiness, by 
participating in international exercises and providing assurance to our 
partners and allies, by securing the maritime and ensuring access to 
the global commons, by performing the full spectrum of missions 
assigned--from humanitarian assistance to strategic deterrence--our 
greater objective is to dissuade our adversaries and ultimately, to 
deter potential conflict. To this end, the Navy and Marine Corps 
operate as part of the larger Joint Force, uniquely providing the 
sovereignty and persistence of a sea-based force able to operate 
wherever the waters reach and able to rapidly maneuver ashore as an 
expeditionary force with air and ground support. It is this ability to 
operate independently for sustained periods that places naval forces in 
such a high demand that Combatant Commanders' peacetime requests for 
naval forces exceed the capacity of the currently sized force. Careful 
management of our training, maintenance and deployment cycles, however, 
has ensured our presence and our readiness to meet the nation's highest 
priority demands as directed by the Secretary of Defense.
                          operational overview
    In the past year, from Norway to the Baltic, from the Black Sea to 
the Mediterranean, from the Horn of Africa to the Arabian Gulf, from 
the west coast of Africa to the straits of Malacca, from the Philippine 
Sea to the Sea of Japan, to the coasts of the Americas, and on the 
ground in 37 countries around the world, on any given day greater than 
100,000 Sailors and Marines have been continually deployed, operating 
multiple carrier-strike groups, amphibious ready groups, Marine 
Expeditionary Units, squadrons, submarines, and battle staffs. Our 
presence in regions of interest around the world demonstrates U.S. 
commitment to these regions, strengthens our alliances and 
partnerships, and ensures our readiness to respond to any provocation.
    We are a nation at war and the value of our forward presence and of 
our ability to conduct prompt, offensive sea-based operations is 
exercised every day. Throughout the course of the past year, greater 
than 2,000 strike sorties flown from the decks of the Dwight D. 
Eisenhower (CVN 69) and George H.W. Bush (CVN 77), along with 
electronic warfare support from Marine Corps squadrons based at 
Incirlik Air Base, have supported Operation INHERENT RESOLVE in the 
fight against the Islamic State of Iraq and Syria (ISIS). More 
recently, upon the Presidential order to respond to Syria's use of 
chemical weapons, USS Ross (DDG 71) and USS Porter (DDG 78) were 
present and ready to strike with their complement of Tomahawk missiles. 
While present forward in 5th and 6th Fleets aboard Makin Island and 
Bataan Amphibious Ready Groups, Marines from the 11th and 24th MEUs, 
deployed ashore to provide time critical artillery and security support 
in Northern Syria. Marines from II MEF established Task Force Southwest 
in Helmand Province to assist our Afghan partners in retaining control 
of that contested area. Meanwhile, our Navy SEALS, Marine Corps Special 
Operating Forces, and supporting expeditionary elements continue to 
execute counter-terrorism operations in support of our theater Special 
Operations Commands.
    Concurrent with the high tempo of combat operations, we continue 
our heavy engagement in the conduct of international naval exercises 
and training. In June 2016; SIXTH Fleet units completed Exercise 
BALTOPS, a high-end joint exercise, demonstrating American and NATO 
resolve in the Baltic Sea region. The following month, the U.S. Navy 
joined with our NATO, Baltic and Black Sea partners for the 15th 
iteration of Exercise SEA BREEZE. In the following months, in the 
Arctic, our Marines participated in the Norwegian-hosted exercise COLD 
RESPONSE, testing warfighting skills in a cold weather environment. In 
the Straits of Hormuz, 5th Fleet conducted its international MCMEX with 
30 international partners to hone our skills and demonstrate our 
resolve to ensure freedom of navigation. Half the world away, in the 
Pacific region, the U.S. Navy and Marine Corps participated in 69 
international exercises to strengthen our partnerships and demonstrate 
our commitment. The 25th anniversary of the Rim of the Pacific Exercise 
(RIMPAC) brought together twenty-six maritime nations, including China, 
along with 40 ships and submarines, over 200 aircraft, and 25,000 
personnel for the largest international maritime exercise in the world. 
SEVENTH Fleet units operating alongside our Japanese and Indian 
partners conducted the trilateral Exercise MALABAR in the Philippine 
Sea focused on anti-submarine warfare and search-and-rescue 
capabilities. In Thailand the Navy and Marine Corps participated in the 
major multilateral exercise Cobra Gold and in Korea we participated in 
Exercises FOAL EAGLE and KEEN RESOLVE with our South Korean allies, 
showing steadfastness in the face of North Korean provocations. We 
conducted multiple Cooperation Afloat Readiness and Training (CARAT) 
engagements with countries ranging from Singapore to Brunei. This small 
sampling of our international engagements is enabled by a robust 
forward presence across the globe.
    The foundation of our Naval forces' credibility as reliable 
partners and as an 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 North Atlantic, the Mediterranean, 
and the Gulf of Aden we are on watch around the clock.
    Our permanent forward presence in the Mediterranean has 
strengthened with the homeporting of four Aegis Ballistic Missile 
Defense Destroyers in Rota, Spain, and with achieving Initial 
Operational Capability of the U.S. AEGIS Ashore Missile Defense System 
in Romania in 2016. The Marine Corps Special Purpose Marine Air Ground 
Task Force--Crisis Response, based in Moron, Spain, provides regional 
capabilities to instantly respond to crises ranging from non- combatant 
evacuation, to humanitarian assistance and disaster relief, to combat 
operations.
    With its permanently stationed Patrol Craft, Mine Countermeasures 
ships and rotating combat forces, the U.S. FIFTH Fleet, from its 
headquarters in Bahrain, provides a clear signal of the American 
commitment to the region. Our leadership and participation in the 
Combined Maritime Forces (CMF) in the Indian Ocean, together with 31 of 
our partner nations, promotes maritime security, helps defeat 
terrorism, and combats piracy in the Arabian Gulf, Gulf of Oman, Gulf 
of Aden and the Red Sea.
    The value of our presence is not limited to the Indian Ocean. In 
2016, a U.S.-led naval training maneuver in the vicinity of the Gulf of 
Guinea transformed into a counter-piracy mission where navies from the 
United States, Ghana, Sao Tome and Principe, Togo, and Nigeria tracked 
a hijacked tanker through the waters of five countries and successfully 
freed the vessel and rescued the hostages.
    Permanently present on the east coast of Africa, U.S. Naval forces 
command and operate the United States sole forward operating base on 
that continent, Camp Lemonnier. In support of Combined Joint Task Force 
Horn of Africa and working closely with our African partners, our 
presence improves cooperation among regional maritime forces, builds 
maritime law enforcement capacity and capability, and strengthens 
maritime domain awareness in order to constrict operating space for 
maritime crime and piracy.
    The Navy and Marine Corps maintain a consistent presence across the 
vast expansiveness of the Pacific and Indian Oceans, the world's most 
rapidly growing, dynamic and increasingly important region. With forces 
permanently stationed in Hawaii, Guam, Korea, Singapore, and Japan and 
deployed from our east and west coasts, our commitment to this 
potentially volatile region continues to strengthen. In early 2017, the 
Marine Corps relocated the first operational squadron of F-35Bs to 
Iwakuni, Japan from Yuma, Arizona and increased the capability of its 
rotational aviation combat element in Darwin, Australia with four MV-22 
Ospreys. The Marine Corps continues its realignment of forces across 
the Western Pacific to enhance our deterrent posture while 
simultaneously reducing the footprint of U.S. bases in Okinawa.With our 
permanent stationing of 35 ships, 38,000 Sailors and 24,000 Marines in 
the Western Pacific combined with a robust rotational deployment of 
Carrier Strike Groups, Amphibious Ready Groups, surface combatants, 
submarines, aircraft and supporting forces, our commitment to the 
stability and security of the Asia-Pacific region is clear to all who 
would question it.
    In our own backyard, U.S. Navy surface, air, and shore-based assets 
are forward and present throughout the western hemisphere. Under 
OPERATION MARTILLO, our Cyclone-class patrol coastal ships USS Zephyr 
and USS Shamal, with embarked U.S. Coast Guard Law Enforcement 
Detachments, seized over 5,000 kilograms of contraband in interdiction 
operations in 2016. USNS Spearhead recently concluded Continuing 
Promise 2017, visiting Guatemala, Honduras, and Colombia to conduct 
civil-military operations including humanitarian assistance, training 
engagements and medical, dental, and veterinary support. Last October, 
in response to Hurricane Matthew and at the request of the U.S. Agency 
of International Development, 100 Marines from Special Purpose Marine 
Air Ground Task Force--Southern Command, USS Iwo Jima, USS Mesa Verde, 
and elements of the 24th Marine Expeditionary Unit provided 
humanitarian assistance/disaster relief to the people of Haiti.
    These are but a few examples of the daily operations of our Sailors 
and Marines. Forward deployed and ready, our naval forces project our 
national values through their frequent international engagements and 
humanitarian assistance or disaster relief operations, and protect our 
national interests through their mobility, agility, and combat power.
                           building readiness
    Maintaining the readiness of our naval forces is key to maintaining 
the scope and scale of operations demanded of them. We have been 
increasingly challenged in our ability to do so, however, by the 
growing imbalance between the size of the force, the operational demand 
placed on the force, and the funding available to operate and sustain 
the force. Since 2001, about 100 ships have routinely been deployed 
each day in response to operational requirements. During this same 
period, the size of the battle force has drawn down by 14 percent, 
resulting in a steady increase to deployment lengths and the 
operational tempo of the force. Schedules for training and maintenance 
have been compressed as a result. Years of high flying hour operations 
have accelerated the aging of our airframes, increased our maintenance 
requirements, drawn down available supply parts, broken the 
engineering-material-maintainers `line of balance', and increasingly 
impacted availability of aircraft for training and surge operations. 
Budget constraints, budget uncertainty, and Continuing Resolutions have 
exacerbated these issues that stretch from the flight line to the gun 
line to our depots. Each of these factors has placed added strain on 
our ships, aircraft, tactical vehicles, and the Sailors and Marines who 
deploy with them.
    The budget environment throughout this period has increased the 
challenges to our Sailors' and Marines' ability to perform their 
mission. Since passage of the Budget Control Act, in particular, our 
increased operational tempo has been met with a decreasing budget, when 
measured in constant dollars. The net impact of this increased 
operational tempo under the pressures of a reduced budget has been a 
decline in the material condition of our ships and aircraft and 
training of our Sailors and Marines. In order to meet our immediate 
commitments, we have placed priority on ensuring the readiness of our 
deployed forces and our `next to deploy' forces, but we are 
increasingly challenged to meet future deployment commitments or to 
surge forces in time of need due to the steady erosion to readiness of 
the total force that has occurred during this period.
    Reversing this trend requires that we first rebuild the warfighting 
readiness of the current force. Accordingly, our priority in the fiscal 
year 2017 budget, including the Request for Additional Appropriations, 
and in the fiscal year 2018 budget request is to fully fund our 
maintenance and training accounts. We must do this, however, without 
turning to our modernization and procurement accounts as the `bill 
payer', for maintaining our readiness in the long term will require 
that we grow the force in terms of capacity and lethality to match the 
demands that are placed upon it.
    The fiscal year 2018 budget request funds ship operations and ship 
depot maintenance to 100 percent of the forecast requirement to rebuild 
our readiness at the unit level. Equivalent measures are being taken to 
fund flying hours and aviation depot maintenance to rebuild aviation 
readiness.
    Funding for spare parts has been increased to reduce logistic delay 
time and ultimately to increase steaming days and flying hours. The 
planning, engineering, and maintenance support manpower at the naval 
shipyards and aviation depots has been increased in order to align the 
workforce to the projected workload. Major shipyard equipment and IT 
infrastructure is being modernized at a rate above benchmarks to 
improve workforce performance, execute maintenance more efficiently, 
and reduce work stoppages. When and where needed, we are leveraging the 
skill sets and capacity of private industry to augment our efforts. 
These investments in people, the industrial plant, and the industrial 
base are critical to improving shipyard and aviation depot throughput 
and capacity and, more importantly, to increasing the operational 
availability of our highest demand assets--our nuclear aircraft 
carriers and submarines and tactical aircraft. It is important to note, 
however, the effects of multiple years of insufficient resources cannot 
be corrected in one budget year; the Department will require stable, 
predictable funding over multiple years to achieve sustained positive 
results.
    Looking forward, we're working closely with industry on our most 
critical ship modernization and aviation programs to improve 
reliability in the near term (therefore reducing maintenance 
requirements) and to invest in planning, engineering, material, and 
facilities in support of long term maintenance and modernization 
requirements.
    Alongside our depots, our operational installations are a major 
component of the Department's readiness requirements. Navy and Marine 
Corps installations provide physical environments essential for 
individual, unit and total force training; force deployment; materiel 
sustainment; unit recovery; and equipment reconstitution. fiscal year 
2018 funded the requirement for Department of the Navy facility 
sustainment nearly 10 percent above 2017 funding levels. Within this 
funding level, we are careful to preserve critical facility components 
and to perform facility maintenance that affects the health and safety 
of Sailors, Marines and their families. However, we continue to carry 
risk in facility sustainment and will need to closely monitor and 
manage the material condition of our many facilities. Over and above 
facility sustainment, Military Construction also increased by about 10 
percent in fiscal year 2018, with priority placed on these capital 
investment projects that will preclude mission failure, increase 
facility optimization, and sustain critical power, cyber-security and 
utility capacity.
    The Department of the Navy (DON) fully supports the Department of 
Defense request for authorization to conduct a Base Realignment and 
Closure round in 2021. Enduring savings from BRAC recommendations will 
leave more DoD resources available for future force structure or 
readiness requirements. Although Navy and Marine Corps infrastructure 
capacity is about right, completing the more detailed analysis once a 
BRAC is authorized will have value, and may highlight opportunities for 
some savings.
                           building the force
    The Naval Force is confronting new challenges in the 21st Century. 
The United States is facing a return to great power competition, as 
Russia and China demonstrate both the advanced capabilities and the 
desire to act as global powers in their own discrete self-interest. The 
Russian Navy is operating at a pace and in areas not seen since the 
mid-1990s, and the Chinese Navy is continuing to extend its reach 
around the world. Assertive competitors with peer-like military 
capabilities have emerged that will contest our interests globally and 
test the resilience of our alliances. Potential adversaries with less 
military power are gaining capabilities through the proliferation of 
advanced technologies that challenge our ability to ensure maritime 
access and freedom of navigation in the littorals. Our adversaries are 
pursuing advanced weapon systems at a level and pace of development not 
seen since the mid-1980s and both near-peer nations and non-state 
actors pose credible threats to our security.
    The Department of the Navy is responding by investing in capacity 
and advanced capabilities that increase the size and lethality of both 
the current and future force, providing our Sailors and Marines with 
what they need to fight and win a 21st Century conflict.
    The 2018 budget request continues the steady recapitalization of 
Navy and Marine Corps aviation capability. The balance has shifted from 
large scale development efforts of prior years to mature production and 
modernization of in-service aircraft for most of our major aviation 
programs; while our most advanced aircraft--from the fifth generation 
Joint Strike Fighter to the CH-53K Heavy Lift helicopter to the high 
altitude long endurance unmanned MQ-4 Triton--are rapidly transitioning 
to full rate production.
    Our shipbuilding program is informed by the Chief of Naval 
Operations' 2016 Force Structure Assessment (FSA). The larger force and 
mix of ships outlined in the FSA reflect extensive analysis regarding 
our operational cycle and the changing security environment. While 
there is general agreement that we must increase the size of our fleet, 
the potential timelines associated with fleet expansion requires that 
we implement improvements in concept development, research and 
development, and rapid fielding efforts to accelerate the fielding of 
advanced capabilities that will provide our fleet a force multiplier 
effect. As well, given the budget challenges inherent to expanding our 
fleet size, we will need to further our efforts to drive down the 
cost--in terms of both time and money--associated with our major 
programs. Ultimately, the affordability challenges associated with 
building this larger fleet will need to be addressed in the context of 
the pending Defense Review.
    While there is general agreement that we must increase the size of 
our fleet, the timeline associated with fleet expansion requires that 
we implement improvements in concept development, research and 
development, and rapid fielding efforts to accelerate the fielding of 
advanced capabilities that will provide our fleet a force multiplier 
effect. As well, given the budget challenges inherent to expanding our 
fleet size, we will need to further our efforts to drive down the 
cost--in terms of both time and money--associated with our major 
programs. Ultimately, the affordability challenges associated with 
building this larger fleet will need to be addressed in the context of 
the pending Defense Review.
    As the nation's expeditionary force in readiness, the Marine Corps 
has been continuously engaged in major combat and crisis response 
missions over the past 16 years, resulting in a force that, in the 
absence of change, would be improperly structured or equipped to meet 
the demands of a future operating environment characterized by complex 
terrain, technology proliferation, information warfare, and an 
increasingly non-permissive maritime domain. This budget supports a 
Marine Corps end strength of 185,000 Marines, the proper size for 
today's mission. The Marine Corps is proposing force capability changes 
to meet the demands of the future operating environment of 2025 and 
beyond. Additional analysis will address modernization and the 
acquisition of capabilities necessary for the future fight.
    From aviation to ships to tactical vehicles to trained Sailors and 
Marines, the immediate priority on building readiness and improving the 
wholeness of the current force paces our ability to grow force 
structure in 2018. Building the Navy and Marine Corps to the size that 
the nation needs will require increased investment over an extended 
period of time, beginning in the future years of the Defense Plan, as 
informed by the pending Defense Strategy.
Shipbuilding
    The fiscal year 2018 President's Budget request invests in the 
modernization of our current platforms and weapons; supports 
procurement of seven major warships and two auxiliary ships: the 
Enterprise (CVN 80) Ford Class aircraft carrier, two Virginia Class 
(SSN) attack submarines, two Arleigh Burke Class (DDG 51) guided 
missile destroyers, two Littoral Combat Ships (LCS), one John Lewis 
Class fleet oiler, and one (T-ATS) towing, salvage and rescue ship; and 
continues advanced procurement for the lead ship of the Columbia Class 
ballistic missile submarine program.
    The first new design aircraft carrier in 40 years, Gerald R. Ford 
(CVN 78) will deliver this month. The Ford is delivering on promised 
capability, as demonstrated by land-based, pierside, and at-sea testing 
to-date. The cost for this new ship class remains of great concern, 
however, and the Navy and industry are focused on capturing lead ship 
lessons learned, refining the ship construction process, capitalizing 
on technological improvements, and enhancing shipbuilder facilities to 
drive down cost. Cost performance on CVN 79 is promising thus far, and 
we are committed to expanding ongoing cost control initiatives to 
further reduce ship cost.
    The Columbia Class ballistic missile submarine (SSBN) program, the 
planned replacement for the Ohio Class, is the Navy's top shipbuilding 
priority. The program is executing detailed design efforts in 
preparation for ordering long lead time material in fiscal year 2019 
and starting construction in fiscal year 2021. The program's delivery 
schedule is tightly aligned to the retirement schedule of our current 
ballistic missile submarine inventory. Cost, schedule, and technical 
performance on this program are being thoroughly managed to ensure we 
deliver on time, on budget, and on target per our requirements.
    The Virginia Class SSN program continues to deliver submarines that 
are operationally ready to deploy within budget. The Block IV contract 
for 10 ships continues co-production of the Class through fiscal year 
2018. The Navy intends to build on past success with a Block V 
Multiyear Procurement (MYP) contract for 10 boats, planned for fiscal 
year 2019. This represents an increase of one submarine in fiscal year 
2021, while also introducing two new capabilities to the fleet--the 
Virginia Payload Module and Acoustic Superiority.
    With 64 ships at sea and 12 additional ships under construction or 
on contract, the Arleigh Burke Class (DDG 51) program is the Navy's 
most successful shipbuilding program. Like the Virginia program, the 
Navy intends to build on past success with a MYP for ten DDG 51s 
beginning in fiscal year 2018. These ships will incorporate upgrades to 
integrated air and missile defense which is being introduced in the 
fiscal year 2017 ships.
    Complementing the DDG 51, the lead ship of the Zumwalt Class (DDG 
1000) delivered in May 2016, and is now in its homeport undergoing 
combat systems activation with completion scheduled for fiscal year 
2018. The remaining two ships of the Class are under construction.
    The Navy is planning and executing the modernization of 11 
Ticonderoga Class Cruisers (CG 63-73); critical to providing dedicated 
Air Defense Commander (ADC) capability through the 2030s. The fiscal 
year 2018 President's Budget requests funding to execute the ``2-4-6'' 
plan on seven of the eleven CGs. The remaining four CGs, which have 
Ballistic Missile Defense (BMD) capability, will receive modernization 
to their hull, mechanical and electrical systems in fiscal year 2021 to 
support their operation through their engineered service life.
    The 2016 FSA revalidated the warfighting requirement for a total of 
52 small surface combatants, including the Littoral Combat Ship (LCS) 
and a future Frigate. To date, nine LCS ships have delivered and 17 are 
in construction or under contract, and all are on track to deliver well 
within the congressional cost cap. Three additional ships were 
authorized and appropriated in fiscal year 2017 which, with the 
additional ships supported by this year's budget, ensure continued 
production and will further mitigate the potential for layoffs at both 
shipyards while the Navy refines the requirements and acquisition 
strategy for the future Frigate. The LCS program continues to 
incrementally field its mission systems.
    LCS 4 is currently deployed with the first instantiation of an 
over-the-horizon missile capability. The LCS Surface-to-Surface Missile 
Module with Longbow Hellfire is currently in testing and on track for 
introduction in 2018, and the Mine Countermeasure and Anti-Submarine 
Warfare mission modules are in testing, targeting introduction in 
fiscal year 2019 and 2021, respectively.
    The Navy is revising its requirements for the future Frigate to 
increase its multi-mission capability, lethality and survivability. The 
Navy currently assesses that adding these capabilities to the Frigate's 
design will delay its procurement to fiscal year 2020. We will work 
closely with industry as we release the draft Request for Proposal for 
this new ship class; continually update our assessment of the Frigate 
schedule, assess the effects of this and other shipbuilding contract 
awards on the industrial base, and make any appropriate modifications 
to our plan for fiscal year 2019 LCS procurement as necessary to ensure 
healthy competition for the future Frigate program.
    This Navy continues to build toward a 34-amphibious ship force by 
fiscal year 2022. The appropriation by Congress for LPD 29 in fiscal 
year 2017 supports both amphibious lift requirements and the industrial 
base. In conjunction with the Navy's fiscal year 2016 award for the LHA 
8, the Fleet oiler (T-AO 206), and LX(R) design, LPD-29 provides for an 
effective transition to LX(R) in fiscal year 2020.
    To help offset challenges associated with increasing our fleet 
size, the Navy is expanding its global reach through the development of 
unmanned capabilities that will augment our manned platforms. Most 
recently, the Navy designated the Large Displacement Unmanned 
Underwater Vehicle (LDUUV) as a Maritime Accelerated Capability Office 
program to accelerate unmanned underwater vehicle capability, and 
released a Request for Proposal to industry to develop an Extra Large 
Unmanned Underwater Vehicle (XLUUV) that will have extended range and a 
modular payload capability. These UUVs will aid in the intelligence 
assessment of the operational environment as well as respond to the 
Combatant Commander's mission needs.
    Similarly, surface operations will be augmented through an 
integrated team of manned and unmanned autonomous capabilities and 
capacity. Ongoing investments in autonomy and mine countermeasure 
technology will continue to reduce the threat of mines in contested 
waters while also reducing the risk to our Sailors while conducting 
this dangerous mission.
Aviation
    The Department is continuing the recapitalization of our aviation 
assets ranging from our strike fighter aircraft to Marine Corps heavy 
lift helicopters, and Navy maritime patrol aircraft, while continuing 
our efforts with unmanned systems. In fiscal year 2018 we plan to 
procure 91 manned and unmanned aircraft for the Navy and Marine Corps. 
Our investment prioritizes capability, capacity, and wholeness as we 
restore aviation readiness.
    Navy Carrier Air Wing composition will be a mix of 4th generation 
and 5th generation fighter aircraft squadrons (F/A-18 E/F and F-35C), 
leveraging each aircraft's strengths and capabilities to provide over-
match against expected threats while providing a cost efficient force 
structure. The fiscal year 2018 President's Budget request keeps the 
Department of the Navy on a path to have 5th generation aircraft 
comprise 50 percent of its tactical aviation assets in the Pacific 
Command Area of Responsibility by 2024.
    The F/A-18 A-D was designed for, and has achieved, a service life 
of 6,000 flight hours, performing as expected through its design life. 
In addition to the maintenance and modernization work the Navy is 
currently executing to extend the life of the F-18A-D inventory to 
9,000 flight hours, we are working to transition to the newer and more 
capable Super Hornets and F-35 as quickly as possible to eliminate the 
increasing cost, at both the flight line and depot level, of keeping 
legacy aircraft in service.
    The fiscal year 2018 Budget request includes funding for 14 Super 
Hornets in fiscal year 2018 with additional aircraft required in the 
outyears to arrest the decline in our strike fighter inventory and 
enable older aircraft to be pulled from service for mid-life upgrades 
and service life extension. The F/A-18 E/F Super Hornet will be the 
numerically predominant aircraft in the Carrier Air Wing through the 
mid-2030s.
    The future of the Department's tactical aircraft relies on 5th 
generation F-35B and F-35C aircraft. The F-35 brings unprecedented low 
observable technology, modern weaponry, and electronic warfare 
capability to naval aviation. These aircraft will recapitalize some of 
our oldest aircraft--our legacy F/A-18s and AV-8Bs--which are rapidly 
approaching the end of their service lives. In 2015, Marine Fighter 
Attack Squadron 121 became the world's first F-35 squadron to achieve 
operational capability and is now forward deployed in Japan. In 2018, 
the Navy and Marine Corps team will deploy two Amphibious Ready Groups 
with embarked Marine Expeditionary Units; each with a detachment of F-
35Bs aboard ship marking the first extended at sea deployments for the 
F-35. The Navy's first F-35C squadron begins transition in 2018; 
Initial Operational Capability (IOC) is expected by early 2019, and the 
first deployment on an aircraft carrier is planned for 2021. This 
budget procures 20 F-35B and 4 F-35C aircraft in fiscal year 2018.
    The EA-18G Growler is a critical enabler for the joint force, 
bringing fully netted warfare capabilities to the fight and providing 
unmatched agility in the Electromagnetic Maneuver Warfare environment. 
Growlers have flown more than 2,300 combat missions to-date and are 
meeting all operational commitments. Carrier-based and expeditionary 
Electronic Attack capabilities will increase significantly with 
introduction of the Next Generation Jammer, which is currently 
scheduled to complete testing in 2022.
    MV-22 Osprey vertical lift capabilities, coupled with the speed, 
range, and endurance of fixed-wing transports, enables execution of 
missions that were previously unachievable. The Marine Corps' Osprey 
fleet continues to experience a high operational tempo with multiple 
MEU deployments and two Special Purpose Marine Air-Ground Task Force-
Crisis Response deployments in support of Africa Command and Central 
Command. During 2016, the 15th active component squadron achieved full 
operational capability, with the 16th scheduled for June 2017. fiscal 
year 2018 begins procurement of the Navy CMV-22B variant in support of 
the Carrier On- Board Delivery mission and represents the first year of 
the next V-22 MYP contract.
    The Marine Corps CH-53E Super Stallion is the only heavy lift 
helicopter in the Department of Defense inventory. The CH-53E will 
remain in service until 2030 to accommodate transition to its 
replacement, the CH-53K, which, with 27,000lbs lift capacity at a 
mission radius of 110 nautical miles, nearly triples the lift 
capability of the legacy CH-53E. In fiscal year 2016, the Marine Corps 
initiated a CH-53E reset to ensure the remaining aircraft possess the 
longevity to complete the transition. Procurement of the CH-53K is 
ongoing, with 51 procured in the FYDP in support of the total buy of 
200. Transition will begin in 2019 and is forecast to complete in 2030.
    Combining the reliability of the Boeing 737 airframe with avionics 
that enable integration of modern sensors and robust military 
communications, the P-8A Poseidon recapitalizes the anti- submarine, 
anti-surface, and Intelligence, Surveillance and Reconnaissance 
capabilities of the aging P-3C Orion. Seven (of 12) squadrons have 
completed transition, with all squadrons scheduled to complete 
transition by fiscal year 2020. The P-8A program is meeting all cost, 
schedule and performance parameters; has achieved and surpassed 
reliability standards for operational availability and is providing 
game changing capability to the fleet. Program savings have enabled 
procurement of one added aircraft (7 total) in fiscal year 2018 with no 
increase to the budget.
    The Department continues steady progress developing and fielding 
unmanned aviation assets, building towards future air dominance through 
an integrated team of manned, unmanned, and autonomous capabilities. 
These teams of systems will conduct ISR, real-time sensor fusion, and 
electronic warfare, increasing battlespace awareness and precision 
strike capability.
    The MQ-4C Triton will be a core capability of Navy's Maritime 
Patrol and Reconnaissance Force and deliver persistent maritime ISR as 
a force multiplier for the Coalition and Joint Force, as well as the 
Fleet Commander. Triton will deploy with Early Operational Capability 
in 2018. Fielding of the Multi-Intelligence configuration will enable 
retirement of EP-3 aircraft in 2020.
    The Navy is developing the MQ-25 unmanned mission tanker, the first 
carrier-based unmanned program, to extend the range and reach of the 
Carrier Air Wing and greatly reduce the need for F/A-18E/F aircraft to 
serve as mission tankers. The MQ-25 was designated a Maritime 
Accelerated Capability Office program by the Chief of Naval Operations 
and Assistant Secretary of the Navy for Research, Development, and 
Acquisition, and was also designated by the Secretary of Defense as a 
Key Performance Parameter 'Reduction Pilot Program' per National 
Defense Authorization Act (NDAA) fiscal year 2017. The Navy plans to 
release a request for proposal for air system development in fiscal 
year 2017 and down-select to a single contractor in fiscal year 2018.
    Looking to the far future, the Department has initiated a Next 
Generation Air Dominance Analysis of Alternatives (AoA) study. The AoA 
is investigating technology and program investment requirements to 
recapitalize Navy F/A-18E/F and EA-18G tactical aviation platforms in 
preparation for their anticipated retirement beginning in the late 
2020s.
Ground Forces
    Marine Corps invested in select ground capabilities to conduct 
distributed operations and address changes in the operational 
environment. Key investments include the Ground/Air task Oriented radar 
(G/ATOR) and the Common Aviation Command and Control Systems (CAC2S) to 
enhance the ability of the Marine Air Ground Task Force to coordinate 
and synchronize distributed C2 sensors and systems. Amphibious and 
ground maneuver capability will be preserved and upgraded by 
accelerating legacy Assault Amphibious Vehicle survivability upgrades, 
procurement of 204 Amphibious Combat vehicles (ACV) and the replacement 
of about one third (6,895 vehicles) of the legacy high mobility, multi-
purpose, wheeled vehicle (HMMWV) Fleet with the Joint Light Tactical 
Vehicle (JLTV).
    The ACV program is the Marine Corps' highest ground modernization 
priority and is using an evolutionary, incremental approach to replace 
the aging AAVs with a vehicle that is capable of moving Marines ashore, 
initially with surface connectors and ultimately as a self-deploying 
vehicle. ACV consists of two increments. The first increment will field 
a personnel carrier with technologies that are currently mature. The 
second increment provides mobility improvements and delivers 
specialized mission variants.
Munitions and Weapons Systems
    Standard Missile-6 (SM-6) provides theater and high value target 
area defense for the Fleet, and with Integrated Fire Control, has more 
than doubled its range in the counter-air mission. SM-6 Block I testing 
in April 2017 successfully completed live fire requirements per the 
program of record and is on schedule to declare Full Operational 
Capability later this year.
    The Evolved Sea Sparrow Missile (ESSM) provides another layer to 
the Navy's defended battle- space. Two ESSM Block 2 Controlled Test 
Vehicle flight tests were successfully conducted this May with IOC for 
AEGIS platforms scheduled for 2020 and Ship Self Defense System 
platforms in the 2022-2023 timeframe.
    The inner layer of the Fleet's layered defense is the Rolling 
Airframe Missile (RAM) Block 2 designed to pace the evolving anti-ship 
cruise missile threat and improve performance against complex stream 
raid engagement scenarios. In fiscal year 2017, the RAM Block 2 Program 
continued to demonstrate outstanding performance through successful 
Fleet and ship qualification firing events. The RAM Block 2 will 
proceed to a Full Rate Production (FRP) Decision Review in fiscal year 
2018.
    The Navy's Cruise Missile Strategy provides for the development of 
stand-off attack capabilities from air, surface, and undersea platforms 
against targets afloat and ashore. Key tenets are to 1) maintain and 
upgrade legacy cruise missiles; 2) pursue advanced near-term 
capabilities; and 3) plan and develop next generation integrated 
solutions.
    First, the Department's plan is to sustain the Tomahawk Block III 
and Block IV cruise missile inventory through its anticipated service-
life via a mid-life recertification program, enabling the Department to 
support Tomahawk in our active inventory through the mid-late 2040s. In 
concert with our recertification program we will integrate 
modernization and technological upgrades and address existing 
obsolescence issues. In addition, the Department is developing a 
Maritime Strike Tomahawk (MST) capability to deliver a long-range anti-
surface warfare capability.
    Second, the Department will field the Long Range Anti-Ship Missile 
(LRASM) to meet near to mid-term anti-surface warfare threats. LRASM is 
pioneering accelerated acquisition processes. Currently, the Department 
anticipates LRASM to meet all warfighting requirements, deliver on- 
time, and cost within approximately one-percent of its original program 
cost estimate.
    The Department also plans to develop follow-on next generation 
strike capabilities. We intend to develop an air-launched weapon to 
address long-term surface threats and a surface and submarine launched 
Next Generation Land Attack Weapon (NGLAW). NGLAW will have both a 
long-range land strike and maritime capability that initially 
complements, and then replaces, the Tomahawk.
    The Department is also continuing to invest in modernization of 
air-to-air weapons. The fiscal year 2018 President's Budget requests 
funds for upgrade and procurement of AIM-9X Sidewinder and AIM-120D 
Advanced Medium-Range Air-to-Air Missiles (AMRAAM). The AIM-9X Block 
II/II+ Sidewinder is the fifth generation variant of the Sidewinder 
family and is the only short-range infrared air-to-air missile 
integrated on Navy, Marine Corps, and Air Force strike- fighter 
aircraft, incorporating advanced technology to achieve superior 
maneuverability and increase the probability of intercept of adversary 
aircraft. AMRAAM provides an air-to-air first look, first shot, first 
kill capability, while working within a networked environment in 
support of the Navy's Theater Air and Missile Defense Mission.
    The Department continues investments in other weapons lines, 
including the Small Diameter Bomb II (SDB II), the Advanced Anti-
Radiation Guided Missile (AARGM) and AARGM Extended Range (ER), Joint 
Air-to-Ground Missile, Advanced Precision Kill Weapons System (APKWS) 
II, and direct attack weapons and general purpose bombs.
    SDB II provides an adverse weather, day or night standoff 
capability against mobile, moving, and fixed targets, and enables 
target prosecution while minimizing collateral damage. SDB II will be 
integrated into the internal carriage of both DoN variants of the Joint 
Strike Fighter (F- 35B/F-35C) and externally on the Navy's F/A-18E/F.
    The AGM-88E AARGM is a medium-range air-to-ground missile employed 
for Suppression and/or Destruction of Enemy Air Defenses (SEAD/DEAD). 
The AARGM cooperative program with the Italian Air Force transforms the 
HARM into an affordable, lethal, and flexible time- sensitive strike 
weapon system. AARGM is in full-rate production and is operationally 
employed on F/A-18 and EA-18G aircraft. The AARGM-ER modification 
program was a new start in fiscal year 2016 and will increase the 
weapon system's survivability against complex and emerging threat 
systems and affords greater stand-off range for the launch platform.
    This budget continues a 5-year integration effort of JAGM Increment 
1 onto the Marine Corps AH-1Z helicopter and continues to fund JAGM 
procurement leading to IOC in fiscal year 2020. JAGM will replace the 
HELLFIRE and TOW II missile systems for the Department. APKWS II 
provides precision guidance capability to the Department's unguided 
rocket inventories, improving accuracy and minimizing collateral 
damage. Program production continues on schedule, meeting the needs of 
our warfighters in today's theaters of operations. Marine Corps AH-1W 
and UH-1Y helicopters achieved IOC in March 2012 and the Marine Corps 
AH-1Z platform was certified to fire APKWS II in June 2015. To date, 
these platforms have expended more than 190 APKWS II weapons during 
combat missions.
    The fiscal year 2018 President's Budget procures additional Joint 
Direct Attack Munition (JDAM) kits to enhance the Department's 
readiness. In thirty months of Operation INHERENT RESOLVE, the 
Department's aircraft have expended more than three times the number of 
500lb JDAM kits than were procured during the same period. This 
significant demand has required the Navy to reduce the number of 500lb 
JDAM available for training in order to preserve warfighting inventory. 
Additionally, fully funding the General Purpose Bomb line item is 
critical to sustaining the Department's inventory for ongoing combat 
operations and replenishing it for future contingencies.
Space
    The Department's Joint and Fleet space operations are vital to the 
employment of naval capabilities and provide assured Command and 
Control, persistent Maritime Battlespace Awareness; maneuver to include 
physical, cyber and the electromagnetic spectrum; and integrated fires. 
However, access to space is no longer guaranteed. The National Security 
Space Strategy defined the current and future space environment as 
driven by three trends: congested, contested, and competitive. The 
Department will maximize the utility of space-based assets and assure 
continued access in the face of growing adversary space capabilities by 
increasing space- related proficiency throughout the force and with 
targeted science and technology and research and development 
investments.
Cyber
    Building our force is not limited to new platforms that operate in 
the traditional domains of sea, undersea, air and space, but also in 
the newest warfighting domain: cyber. With the exponential growth and 
ubiquitous availability of advanced computing methods and information 
technology today's highly networked environment, our Navy and Marine 
Corps must operate effectively in cyberspace. The Services require 
unconstrained access and assured capabilities in cyberspace to execute 
the full range of military missions. We must lead in both offensive and 
defensive use of this new domain and building cyber resiliency into our 
networks to allow us to ``fight through'' a cyber-attack.
    Cyber resiliency ensures that when an attacker gets through our 
defenses, we rapidly detect and react to the anomalous cyber activity 
in a way that allows us to continue critical operations, or ``fight 
through,'' while we restore the integrity of that portion of the 
network. Cyber defense-in- depth is achieved by surveillance and 
reconnaissance within our networks to detect malicious activity. Navy 
and Marine Corps Cyber Commands leverage layers of sensors, analysts, 
and cyber specialists to assure maritime missions and protect data.In 
addition to defense and assured access, the Navy and Marine Corps are 
prepared to deliver cyber effects at a time and place of their choosing 
across the full range of military operations in support of Naval and 
joint commanders' objectives.
Industrial Base
    The Department of the Navy cannot accomplish its mission, maintain 
readiness, or modernize the force without its partners in 
industry.Building readiness and building the force requires a strong 
and integrated relationship with our industrial base private-sector 
partners. We will continue to work closely with our prime contractors 
as procurement plans unfold to ensure our equipment, system, and 
component suppliers are equally able to support the increased demand 
associated with building a larger fleet. We have utilized contracting 
tools such as MYPs, block buy contracts, Economic Order Quantity (EOQ) 
buys, Capital Expenditure (CAPEX) incentives, and Shipbuilding 
Capability Preservation Agreements to provide a stable commitment to 
our industry partners, supporting long range planning focused on 
affordability and cost control which increases our buying power. We 
will continue these initiatives to provide stability and mitigate 
volatility at the supplier level and improve productivity, efficiency, 
and competitiveness across the supplier base. We appreciate past 
Congressional support for these efforts and your continued support in 
the future. While the different industrial sectors face different 
challenges, common among all is the need for predictable and stable 
programs which are dependent on a stable budget. We also welcome 
Congress's support in providing that budget stability.
                       taking care of our people
    The men and women of the Department provide our Naval Forces and 
Nation with an asymmetric advantage. No quantity of next generation 
ships or aircraft will bring victory without the skilled, dedicated and 
talented Sailors, Marines, and civilians who build, maintain and 
operate our Navy and Marine Corps. Despite 16 years of combat 
operations, extended deployments and reserve mobilizations, today's 
force is the most talented and high performing in history. But just as 
the American technological advantage in warfare is not something we can 
take for granted, we also cannot simply assume that we will always 
attract America's best and brightest to serve in our all-volunteer 
military and civilian workforce. With a turnover of approximately 
95,000 Sailors, Marines, and 60,000 civilians a year, providing the 
incentives to attract and the environment to thrive remains a top 
priority for the Department. The desire to serve remains strong in 
America and the Navy and the Marine Corps are achieving overall 
recruiting objectives. We are, however, experiencing increasing 
challenges due to an improving civilian labor market, a limited pool of 
eligible candidates, and increases in accession goals. The Department's 
civilian workforce is an irreplaceable partner in our naval service and 
one of the most technologically advanced and innovative workforces in 
the world. More than half of our civilians are scientists, engineers, 
mathematicians, and logisticians and to sustain that workforce into the 
future the Department continues to leverage strategic partnerships with 
science, technology, engineering and math (STEM)-related groups and 
educational institutions to highlight naval service as a rewarding 
career option.
    Maintaining our warfighting advantage requires diversity of 
experience, background and ideas. The Department draws upon the widest 
pool of talent and backgrounds to maximize combat effectiveness. 
Through policy and practice, we have set the conditions to ensure all 
who are qualified to serve in the Marine Corps and Navy can do so-while 
creating an environment that promotes dignity and respect for all. In 
2016, the Department of the Navy opened the training pipelines in every 
occupational specialty to women. In May 2016, two female Marines 
graduated from joint Army/Marine Field Artillery Basic Officers Leaders 
Course; one graduated first in her class and the other in the top 5 
percent. In April 2017, a Marine 2nd Lieutenant graduated from the Army 
Armor Basic Officer Leaders Course to become the first female Marine 
Tank Officer. Additionally, the first four enlisted women Infantry 
Marines completed training and reported to Marine infantry battalions 
in December 2016. In the Navy, female officers serve on all combatant 
platforms, and female enlisted Sailors serve on all platforms where 
berthing facilities are available. The first female enlisted Sailor 
earned her submarine qualification and received her Submarine Warfare 
pin in August 2016. In the recruiting arena, we are actively 
emphasizing these integration efforts on Service websites and include 
images of female representatives whenever possible, aimed at 
encouraging women to enter recently opened occupational fields.
    Having invested in recruiting the best talent available, we must 
retain it. We remain watchful of an increasingly competitive 
marketplace for talent in an improving economy. While we met the 
aggregate enlisted retention goals for fiscal year 2016, we continue to 
experience challenges and shortfalls in some communities, such as 
Information Warfare, Nuclear technical fields, Special Warfare, and 
Advanced Electronics. Officer retention remains at historically high 
levels due, in large part, to judiciously offered incentive pays and 
bonuses, improved mentoring, recent efforts to add flexible career 
options, and an increased emphasis on life-work integration 
initiatives. However, specific active duty officer inventory shortfalls 
remain in Aviation for certain type/model/series and nuclear-trained 
Surface Warfare Officers. We are actively addressing these shortfalls 
through targeted incentives and other retention tools.
    The Navy and Marine Corps Reserve continue to be a vital part of 
the Navy and Marine Corps Team and the Total Force. Mobilizing and 
employing reserve Sailors and Marines facilitates employing the Active 
Component to meet other operational and warfighting requirements, 
maintain unit integrity, and ensure Fleet readiness. 20 percent of the 
Navy Reserve conducts operational support across the globe every day, 
to include squadrons from the Maritime Support Wing flying fixed and 
rotary wing missions in the South China Sea and reserve Coastal 
Riverine Units conducting high value escort missions off the Horn of 
Africa.
    The Department is also working to ensure our personnel policies and 
programs are keeping pace with the innovative human resources 
environment of the private sector. The Fleet Scholar Education Program 
(FSEP) allows our best and brightest officers to learn at America's 
most prestigious universities. The FSEP provides a total of thirty 
fully funded full-time graduate education opportunities with 
participant selection from the highest performing officers from each 
community. Career broadening programs improve the intellectual capital 
of our officer corps, providing sought after opportunities for our best 
and brightest.
    We have focused on helping Sailors and Marines maximize their 
personal and professional readiness by assisting them and their 
families with the mental, physical and emotional challenges of military 
service. Providing a holistic approach to maintaining the health and 
resilience of our force, we have made improvements to physical fitness 
and nutrition programs, enriched family support programs, developed 
financial literacy training, and prioritized mental wellness. Both 
Services extended fitness center hours of operation and are piloting 
24/7 centers in a number of locations. Morale, Welfare and Recreation 
programs like Adventure Quest and Single Service members provide a 
variety of programs promoting physical activity and a healthy 
lifestyle. MilitaryChildCare.com, an innovative online child care 
information, request, and reservation system, which will be fully 
operational this June, will allow our families to secure critical child 
care services anywhere in the world before they execute a Permanent 
Change of Station (PCS) move. The Marine Corps and Navy expanded 
financial literacy training throughout the military lifecycle with 
topics relevant to life and career touch points, particularly important 
as we transition to the Blended Retirement System. Earlier this year 
the Navy released a financial literacy mobile app to enhance access to 
training, references and guides as well as resources for the transition 
to the blended retirement system.
    Despite our commitment to providing the highest quality of life to 
our Sailors and Marines the tragedy of suicide continues to plague our 
institution as it does to society as a whole. The Department has made 
strides in arresting the incidence of suicide and continues to seek 
promising paths to prevention.
    During the past year, the Navy launched the Sailor Assistance and 
Intercept for Life (SAIL) program, a research-based non-clinical 
intervention strategy, modeled after the successful Marine Corps 
Intercept Program, that provides rapid assistance, on-going risk 
assessment and support for Sailors who have exhibited suicide-related 
behaviors. The Marine Corps has initiated Death by Suicide Review 
Boards to gain in depth understanding of all Marine deaths by suicide. 
Although the Marine Corps and Navy have reduced military suicides from 
the peak numbers seen a few years ago, we must continue our efforts to 
increase resiliency, promote help seeking and provide treatment and 
support for those in need.
    Among our foremost responsibilities is to provide a safe and 
supportive work place to our employees. Whether in the cockpit of an 
aircraft, the engine room of a ship, or the office of an ashore 
facility, the leadership of the Navy and Marine Corps recognize that we 
cannot be successful in our mission if our people are not secure in 
their environment.
    The occurrence of physiological episodes (PE) in our legacy 
tactical aircraft and trainers has emerged as the number one aviation 
safety priority. From Senior Navy leadership to our engineers and 
maintainers, to our aircraft manufacturers and NASA and the Mayo 
Clinic, a comprehensive review of the design, the facts, circumstances 
and processes surrounding PEs has been launched to arrest the increase 
in PEs in our F/A-18 and T-45 aircraft. The entire Naval Aviation 
Enterprise is focused on resolving this issue and we will keep the 
Defense Committees and staff apprised of our findings and progress. In 
the interim, we are taking every measure to ensure our aviators are 
afforded the highest standards of safety as they perform their 
inherently hazardous mission.
    An environment that allows our Sailors, Marines and civilians to 
thrive is also one that is respectful to all, free of harassment, 
bullying and assault.Sexual assault is a crime that is not tolerated 
within the naval service. Those who report a sexual assault are 
supported by over 240 sexual assault response coordinators, 8,000 full 
and part-time victim advocates, 252 legal personnel, 164 criminal 
investigators and 215 medical forensic examiners. We have a robust and 
effective Sexual Assault Prevention and Response program and Victims' 
Legal Counsel that together encourage increased reporting and provide 
critical support to those who come forward. We are also taking steps to 
prevent and respond to perceptions of retaliation or ostracism on the 
part of the courageous individuals who report these crimes--whether by 
the chain of command or peers. While there is still much work to be 
done, reporting across the Department has increased twofold since 2012, 
and, based on surveys, our estimated number of assaults on Service 
members has almost halved during that same time. Our leaders, at all 
levels, are held accountable to ensure every member of our Navy-Marine 
Corps team can excel in an environment that maximizes their talents and 
rejects those who would degrade or diminish another service member.
    A respectful environment is not limited to physical spaces but 
includes the virtual and on-line environments where so many social 
interactions occur. Discovery and investigation into the toxic and 
predatory behavior harbored by the Marines United Facebook group has 
uncovered instances of a breakdown of good order and discipline within 
our Services. The discovery of this toxicity led to a comprehensive 
investigation of the non-consensual sharing of intimate images by 
Sailors and Marines, the extension of counseling and legal support to 
potential victims, the review and update of policy and regulations to 
cover this Internet enabled scourge, and the commitment to hold 
offenders accountable.
    Finally, as a Department, we remain dedicated to strengthening our 
investment in the ethical development of our Sailors, Marines, and 
civilian employees to further their competence, confidence, character, 
and integrity such that their day-to-day actions and decisions are 
motivated by and aligned with the Department's Core Values of Honor, 
Courage, Commitment. We have given priority to analyzing and updating 
training curricula and educational programs across the Department to 
emphasize the importance of ethical behavior and to diminish instances 
of destructive behavior. Our people are our competitive advantage and 
we have no higher priority than to provide the tangible and intangible 
incentives that will allow us to continue to recruit and retain the 
nation's best and brightest.
                            good stewardship
    In the quarter century since the end of the Cold War, the global 
threat environment has only become more challenging as multiple 
competitors seek to disrupt America's leadership role in the world. 
Ubiquitously available innovations in technology and information 
combined with increasing pressures on the Federal budget mean that we 
cannot simply outspend our competitors and expect to retain our 
advantage. We cannot just spend more, we must spend more smartly. We 
must know where every dollar is spent and incorporate innovative 
business practices to optimize the marginal value of our investment.
Auditability
    A critical step in improving stewardship of the funds the 
Department of the Navy is entrusted with is to undergo a full financial 
audit in fiscal year 2018. Over the past years the Department has been 
working to put the tools and business processes in place that will 
allow an independent auditor to assess our financial statements, 
transactions and assets. The Marine Corps reached this milestone a year 
early in fiscal year 2017 and the Navy is leveraging lessons from the 
Marine Corps to improve its audit readiness.
    The Department of the Navy is not approaching audit as a discrete 
test of our financial reporting but rather as a continual year round 
process to improve management of the significant resources with which 
we are entrusted. Standardizing our business processes and 
strengthening our internal controls will not only ensure financial data 
accurately reflects our business activities and minimize opportunities 
for the misuse of funds, but as importantly, it will improve the 
visibility of our management of the billions of dollars that it takes 
to build, operate and maintain our naval forces. This visibility, in 
turn, will allow us to better direct those funds consistent with the 
nation's priorities.
    The process of preparing for audit has also improved the culture of 
accountability throughout the Department, as every senior leader across 
the Navy-Marine Corps team embraces their role in developing and 
enforcing appropriate internal controls. Senior leaders are assigned 
responsibility for the correction of identified audit deficiencies and 
their leadership and actions provide the ``tone from the top'' which 
highlights the importance of effective controls and audits to all 
business managers. Performing business processes in a standardized way 
and retaining key documentation is the new normal for all who spend 
taxpayer dollars.
    The Department of the Navy understands the value audits will 
provide in maximizing the value of every tax dollar spent. Given the 
complexity and size of our operations, we anticipate that an 
unqualified audit opinion will be several years away, but as annual 
full audits of the Department of the Navy begin in 2018, we will 
constantly assess the results for opportunities to develop and 
implement the cultural, process and system changes needed to hold 
ourselves accountable and to maintain the trust and confidence of the 
American people.
Business Reform
    The processes, tools and systems that we use to manage the business 
of your Navy and Marine Corps have evolved over the past two centuries 
of successful naval operations. By implementing discrete business 
improvements over time, the Department, to date, has maintained its 
edge. Just as our competitors have leveraged the accelerating pace of 
technology development and absorption, however, so must the naval 
services leverage and embrace improvements in technology to better 
manage the processes that ultimately deliver our Nation's warfighting 
capability and ensure that we retain that edge.
    The Department of the Navy embraces the President's and Secretary 
of Defense's initiative to reform government. Improvements in data 
collection, storage and analysis provide abundant opportunities to not 
only reduce cost but also to improve our decisionmaking in every 
Department activity from warfighting to personnel management to audit 
and real property management. The tremendous gains in commercial 
enterprise valuation over the past decade have not been through the 
implementation of efficiencies, but rather through rapid boosts in 
productivity enabled by information and technology. To the extent 
possible, the Department is committed to leveraging the innovations 
increasingly employed by commercial industry to improve the 
productivity of our business management processes and systems. Such 
innovations include appropriate migration of data storage and 
applications to the commercial cloud, continued consolidation and 
standardization of our data centers, and improved business intelligence 
and analysis capability.
    Opportunities for improved productivity are not limited to the 
modernization of our business IT systems. Exponential advancements in 
manufacturing processes and materials, artificial intelligence, energy 
capture, storage and transmission, and virtual and augmented reality 
offer abundant opportunities to reform and improve not only our 
business processes but also the productivity of our personnel, 
training, acquisition and maintenance activities.
    Nor are the opportunities for improved stewardship limited to 
technology; process, policy, and leadership can also drive the agility 
and innovation that leads to a more productive enterprise. The 
Department of the Navy has welcomed the additional acquisition 
flexibilities provided through the fiscal year 2016 and fiscal year 
2017 NDAA. Consistent with Congressional intent we are capitalizing on 
the flexibility inherent to Mid-Tier Acquisition and Acquisition 
Agility provisions provided from fiscal year 2016 NDAA (Section 804) 
and fiscal year 2017 NDAA (Section 806), respectively. Additionally, we 
have implemented an Accelerated Acquisition approach with the 
Department of the Navy that encourages and enables the rapid 
development and transition of emerging technologies and engineering 
innovations to address critical Navy and Marine Corps warfighting 
needs. The Large Displacement Unmanned Underwater Vehicle and the 
Carrier based launched Unmanned Aerial Vehicle System are being managed 
as accelerated capability programs with the direct senior leadership 
involvement necessary to enable streamlined risk acceptance and 
decisionmaking.
    The Department of the Navy is actively expanding and strengthening 
our network of partnerships, seeking further collaboration with 
traditional and non-traditional industry, laboratories, and academic 
institutions as well as international partners. In a combined effort 
between the Secretariat, the Marine Corps the Navy and industry, we 
recently conducted a Ship to Shore Maneuver Exploration and 
Experimentation exercise in which we demonstrated over 100 innovative 
technologies and concepts from varied industry partners, universities 
and naval labs. Such Rapid Prototyping, Experimentation and 
Demonstration (RPED) projects will inform our concepts and requirements 
and shorten the cycle between the identification of a capability gap 
and the delivery of a suitable solution.
    Our reform efforts, focused on improving productivity, will evolve 
as new opportunities are revealed. To maintain our reform momentum we 
have invigorated a Department of the Navy Business Council to provide 
four star level oversight and support for our continual reform efforts.
                               conclusion
    The Navy and Marine Corps team is organized, manned, trained and 
equipped to assure our allies, deter aggressors, and, when necessary, 
defeat our adversaries and serve as an outward symbol of our nation's 
resolve. Developing and maintaining globally present and operationally 
relevant naval forces that provide timely, agile and effective options 
to national leaders as they seek to advance our national security 
interests requires that we take the longer view.
    As a maritime nation, our security and prosperity is dependent upon 
our freedom of the seas in time of peace and our command of the seas in 
time of war. America's Naval forces' ability to shape and influence 
events while advancing and protecting American interests around the 
world traditionally relies upon a force whose strength is measured in 
terms of numbers of ships, aircraft, and munitions; increasingly relies 
upon advanced capabilities involving unmanned systems, advanced 
sensors, stealth, electromagnetic maneuver, directed energy, and 
hypersonics; and always relies upon the quality and dedication of 
America's Sailors and Marines. Our future success in providing for our 
Nation's security will ultimately rely upon Congress to provide the 
resources we need to build, operate and maintain the force; to deliver 
the necessary advanced capabilities; and to attract, train and retain 
the best of America's young men and women to serve in our Navy and 
Marine Corps. In exchange, we are committed to being excellent stewards 
of those resources to ensure we deliver the maximum warfighting 
capability for every dollar provided by the taxpayer.
    Our priority in this year's President's Budget request is to 
rebuild the readiness and lay the foundation for future growth--
capacity and lethality--of the force. The Department fundamentally 
requires a predictable, timely budget--something that has been elusive 
throughout the years operating under the Budget Control Act--to meet 
this priority. We will also need an increase to the Budget Control Act 
caps, as outlined in detail by our President's Budget request. Timely 
passage of a full year appropriation at the requested level will 
provide for the most efficient execution of the resources provided by 
Congress, while bringing stability to our workforce and our industrial 
base, and enabling the Department to most effectively train, maintain, 
and deploy the force.
    I want to thank this sub-Committee for your enduring support to our 
Sailors, Marines, civilians and their families, and for your past 
support for our key programs that support the Naval force our Nation's 
needs. The fiscal year 2018 President's Budget request is properly 
balanced to support the needs of the United States Navy and the United 
States Marine Corps and ensures we are better prepared to fight and win 
our Nation's battles today and in the future. I look forward to working 
with you in the furtherance of our maritime capabilities.

    Senator Cochran. Thank you, very much, Mr. Secretary.
    Admiral John Richardson, Chief of Naval Operations. 
Welcome. You may proceed with your statement.
STATEMENT OF ADMIRAL JOHN M. RICHARDSON, CHIEF OF NAVAL 
            OPERATIONS
    Admiral Richardson. Thank you, Mr. Chairman.
    Chairman Cochran, Ranking Member Durbin, and other 
distinguished members of the subcommittee.
    Thank you for the privilege to be here today to represent 
our Navy team, our sailors, our Navy civilians, and their 
families. I request that our written statements be entered into 
the record.
    I would like to take some time this morning to briefly 
outline where your Navy stands today and where we need to go.
    I just got back from Rota, Spain, Singapore, and Guam. Out 
there, I visited our sailors who are in harm's way around the 
world facing rising threats. They are talented, dedicated, and 
they are laser focused on their mission. This is despite the 
growing challenges of the security environment and despite the 
challenges that we have imposed by inconsistent, delayed, and 
inadequate funding.
    Today, I hope to convey a sense of urgency. Our adversaries 
are improving more quickly than we are. Our advantage is 
eroding and we must increase our naval power today, pick up the 
pace to maintain our winning advantage. This effort starts by 
insuring that we have a firm foundation for solid growth, 
restoring wholeness and balance.
    This began with the fiscal year 2017 budget, which helps 
arrest readiness declines. I would like to thank the committee 
very much for the work done to pass that bill. But more needs 
to be done. The challenges are sufficiently deep that it will 
take both predictable and sufficient funding, and some time, to 
fully recover.
    We have aircraft grounded due to maintenance backlogs and 
spare shortages. Our pilots do not fly enough. Our maintainers 
are struggling to keep planes that are working up in the air. 
We have not funded spare parts at required levels.
    Maintaining our ships is also a struggle. Too many ships 
are getting out of maintenance late, submarines and warships 
are tied up next to the pier unable to submerge or get 
underway.
    I know that many of us are focused on adding more ships to 
the fleet. I am too and the Secretary has outlined our 
procurement plan. But make no mistake. If I cannot repair a 
ship that has already been bought and paid for to get back to 
sea, we forfeit the good, hard work of our predecessors. And 
the effect is the same as not buying a ship. It ends up being 
one less ship at sea today. Morale suffers and U.S. naval power 
suffers a stark illustration of the importance of wholeness to 
our way forward.
    We are taking many strides here. We are making great 
progress. As I mentioned, fiscal year 2017 was a great first 
step to restore a lot of readiness. Fiscal year 2018 request 
will capitalize on that investment and restore balance and 
wholeness so we can grow moving forward. There are lots that we 
need to do to shore up the force that we have. We need a firm 
foundation.
    As articulated in a white paper of the future Navy I 
released last week, we also need a larger and more capable 
fleet. And even as we shore up wholeness with this request, the 
request preserves the program growth for the Navy. We invest in 
emerging technologies for the future. It provides a balanced 
approach that starts the acceleration of naval power from a 
firm foundation.
    As I talked to our sailors operating forward, protecting 
America from attack, promoting our interests around the world, 
they are focused as ever on their mission. I know that you 
share my incredible pride in them.
    But there is also a growing sense in the deployed fleet 
that we, back here in Washington, just do not get it. Sometimes 
it seems like we live in a parallel universe. We need to bring 
these two realities together and do that quickly.
    It is getting harder to explain to our sailors and their 
families or to those who might want to join the fleet. But I 
tell them to be hopeful, remain optimistic. We are on the road 
to restoring wholeness and increasing our naval power now and 
into the future. I am hopeful.
    I am willing to do whatever it takes, working together with 
the committee to get our sailors the resources and support they 
need and that they deserve.
    Again, thank you for the opportunity to be here and I look 
forward to answering your questions.
    [The statement follows:]
            Prepared Statement of Admiral John M. Richardson
    Chairman Cochran, Vice Chairman Durbin, and distinguished members 
of the Subcommittee, thank you for the opportunity to appear before you 
today to discuss the Navy's fiscal year 2018 budget request. This 
budget is the second step along a 3-year path that started in fiscal 
year 2017. In fiscal year 2017, Congress approved funding that helped 
to plug the most urgent readiness holes in the fleet. The fiscal year 
2018 request is focused on continuing to stabilize the ship--restoring 
balance that will serve as a solid foundation for next year's 
investments, which will be informed by the pending National Security 
Strategy and National Military Strategy and chart a course to growing 
our size and capabilities. We would not even be having this 
conversation were it not for passage of the fiscal year 2017 bill. 
Thank you both for the final bill, and for supporting the 
Administration's request for additional Overseas Contingency Operations 
funding.
    The Navy submits this request in a time of increasing competition. 
The world in general, and the maritime environment in particular, is 
fast-paced, increasingly complex, and uncertain. The challenges we face 
are more diverse, interconnected, and arriving more quickly than we had 
anticipated. Our maritime rivals are quickly becoming stronger. There 
is a need for urgency; we need to pick up the pace if we are to 
maintain a position of naval leadership in the world. Your sailors are 
out every day, all around the world, going into harm's way and 
undaunted by the threats that they face. Their equipment is worn. Too 
frequently, they don't have enough spare parts, and their stocks of 
munitions are lower than they need. But they are tough, dedicated, and 
proud of what they do. Back here at home, there is less evidence that 
we get it. There is little sense that our margin is shrinking, that 
time matters, and that we must take action. Again, your support in 
fiscal year 2017 is important progress, and your Navy is very grateful. 
But there is much more that still needs to be done.
    This places a growing premium on what we in the Navy often refer to 
as wholeness. For the Navy, wholeness is striking a balance of 
capabilities that are ready to meet our missions today, complemented by 
the additional investments that will enable us to sustain those 
capabilities over time.
    The heartbeat of the Navy is its people--this is where wholeness 
begins and ends. This budget request reflects increases in both 
military and civilian personnel. On the military side, we are 
requesting an additional 4,000 active duty and 1,000 reserve personnel 
to man modernized cruisers and destroyers, as well as Littoral Combat 
Ships; properly support moves for our sailors and their families; grow 
our cyber capabilities; and to implement our digital training 
initiatives. We are also adding almost 3,700 civilian personnel to 
conduct ship and aircraft maintenance, increase security at our bases, 
and provide engineering and other developmental support for new manned 
and unmanned aircraft, cyber, and tactical operations.
    The most significant investments in our fiscal year 2018 budget 
request build upon the funding provided in fiscal year 2017: the Navy 
added $3.4 billion this year and hopes to continue to achieve and 
better maintain readiness over the next 5 years. Afloat readiness 
accounts are almost all funded to either their full requirement or the 
maximum amounts that could be spent. These investments are designed to 
help reverse years of significant strain on the fleet. The funding will 
buy the gas so that our ships and aircraft can fully train and deploy. 
It will increase the stocks of spare parts to keep those platforms 
running or quickly restore them to service if something should wear out 
or break. They will also provide for increased cyber resilience and 
defense, and support modest improvements to our facilities.
    As our competitors seek areas of advantage, our modernization 
accounts will ensure our current platforms remain competitive through 
their expected service lives. The fiscal year 2018 budget request 
sustains most of our major modernization programs, across the undersea, 
surface, and air domains. We also sustained our planned investments in 
missiles, ship self-defense systems, and torpedoes in this request, and 
increased funding for additional weapons in future years.
    Even as we invested in enhancing our readiness, our fiscal year 
2018 budget request also supports moving into the future. We fully 
funded the COLUMBIA-class ballistic missile submarine's fiscal year 
2018 program requirements, the Navy's contribution to our nation's 
strategic nuclear deterrent and our highest shipbuilding priority. We 
procure eight ships in this fiscal year, and another 33 across the 
Future Years Defense Plan. We made minor adjustments to our planned 
aircraft purchases, requesting one additional P-8A maritime patrol 
aircraft in this year's request and reducing our expected purchases of 
F- 35C fighters from 6 to 4.
    The final element of our efforts to strike the best balance across 
our fiscal year 2018 budget request is focused on advancing key 
technologies that will make our current platforms more capable, 
providing new ways to counter high rates of fire more effectively and 
affordably. To that end, we have developed a new strategy to accelerate 
introduction of lasers and laser-enabling technologies into the fleet, 
and increased the funding in this and future years. We have funded the 
research and development of the next generation land attack weapon, 
hyper-velocity projectile, and hypersonic defense. And this request 
sustains our investments in autonomy and unmanned air, surface, and 
undersea vehicles.
    We are adjusting our investments in tactical networks and 
supporting capabilities, and have asked for $15 million to support a 
small but empowered office to spearhead Navy digital warfare and 
enterprise efforts. As just one example, one of our most impactful 
digital efforts is the transformation of the information systems that 
support our Manpower, Personnel, Training and Education enterprise. The 
MPTE modernization project will consolidate information from over 50 
different databases in order to support tailored, flexible, and modern 
talent management and human resources support for our sailors. Our 
initial steps toward implementation are leading us to redesign our 
processes; in just one area, these changes have increased the number of 
travel claims processed by 28 percent per employee, 38 percent faster, 
with zero errors. Once we move claims processing fully online, we 
project manpower savings of over 80 percent. We are requesting $35 
million this year to move these critical transformation efforts 
forward, which will extend across our MPTE enterprise.
    This budget request acknowledges the growing prominence of 
information warfare through increased investments in survivable 
networks, electromagnetic maneuver warfare, and offensive and defensive 
cyber programs. Cyber protection of critical warfighting systems will 
provide the capability to automatically harden applications on naval 
platforms, reducing vulnerability to cyber attacks. The budget request 
also recognizes that as we advance technologies we must accelerate our 
adoption of training that leverages latest educational methods and 
tools, particularly the employing a combination of live, virtual, and 
constructive (LVC) training. By increasing our investments by $217 
million, we ensure that we keep our operators at the center of our 
plans, ensuring that they will be able to most effectively fight their 
ships, submarines, aircraft, and networks. Finally, we continue to seek 
ways to exploit the advantages offered by smart manufacturing 
technologies, including tools for shipyards and depots to speed 
production, reduce maintenance and sustainment costs, and enhance 
operations and logistics. These are just some of the highlights of the 
Navy's fiscal year 2018 budget request, building upon fiscal year 2017 
readiness investments to achieve greater wholeness, both now and into 
the future. However, the perfect warfighting capability is useless if 
it arrives late to the fight. Getting a new capability to the fleet 
first, before any competitor, is decisive. As important as any specific 
capability, we also need speed. Time matters, and we are not moving 
fast enough. The Congress has a major role to play here. Becoming more 
competitive starts with stable, adequate funding--the Navy simply 
cannot stay ahead in a system in which we operate without a budget over 
30 percent of the time. Stable and reliable funding allows our 
suppliers to manage their workforce and costs more effectively, which 
in turn reduces our costs. It gives our industry partners the 
confidence to invest in advances that make their processes faster and 
more efficient. We also need to better align our strategy with our 
budgets. We cannot achieve wholeness when we continue to be asked to do 
more around the world than our funding levels can support.
    Within the Navy, we are rededicating ourselves to a single-minded 
focus on building leaders, who are building the best possible teams. In 
the past year, we have issued an updated leader development framework 
to help guide the advancement of sailors as leaders of both character 
and competence--the two necessary ingredients for professional 
leadership. We also issued a framework that is informing advancement 
strategies for our Navy civilians, to guide strategies that are 
tailored to their particular areas of expertise.
    I am grateful for the additional acquisition authorities that the 
Congress has given to me and my fellow Service Chiefs, and have learned 
a lot as I have started to execute them. Many of my colleagues in 
industry that do both commercial and Defense Department work describe 
two ways of doing business: the ``competitive way'' and the 
``government way.'' They describe their worlds as consisting of 
parallel universes that operate at vastly different speeds. In the 
``government way,'' we take over 7 years to move from starting to look 
at potential information technology systems to initial operations. The 
``competitive way'' took deep learning from an idea to GO champion in 
the same amount of time. Too often, the ``government way'' ignores the 
fact that going slow--or worse, doing nothing--incurs risks that are 
often much higher than acting imperfectly. In the ``government way,'' 
there are too many people that can say no. In the ``government way,'' 
there are layers upon layers of oversight, many of which have their 
origins decades ago, in a time when there were no computers. I am 
working with the Department and industry to examine our methods against 
the need to deliver quality in a way that is also timely and cost-
effective. Make no mistake, continuing to operate in ``the government 
way'' imposes costs and risks as real as any others we might be trying 
to avoid. . To that end, right-sizing and modernizing our installations 
and facilities will be an important part of our future competitiveness; 
although the Navy believes its infrastructure capacity is about right, 
completing the more detailed analysis once a BRAC is authorized will 
have value, and may highlight opportunities for some savings.
    Within the Navy, we are taking steps to accelerate acquisition. 
There are two elements to our approach. The Rapid Prototyping, 
Experimentation, and Demonstration (RPED) process seeks to develop and 
field prototypes to find solutions to fleet problems. The Maritime 
Accelerated Capabilities Office (MACO) process streamlines and 
accelerates the acquisition decisionmaking process so that capabilities 
can be delivered to the fleet as fast as possible.
    These new ways of doing business are enabled by engaging with 
industry much sooner in the acquisition process, both to help refine 
the requirements process and to make it more efficient. As a part of 
this, we have been increasing our outreach to small businesses, which 
are often the most agile of our performers. And I am routinely calling 
both on our own Navy team as well as our partners in industry to 
challenge assumptions that we have grown to take for granted--
assumptions about how long it takes to design or build everything from 
our most simple to most complex platforms. We are shifting our mindset 
from technological miracles that deliver in the distant future, to one 
of achievable and meaningful advances today that can be pushed forward 
into the future through faster iteration. We must design and build all 
of our future platforms with modernization in mind.
    Finally, together we must develop a more competitive approach to 
defining our future. I have been focused on getting better insight and 
control of research and development funding so that it can be 
prioritized to the areas of most decisive advantage. We need more 
targeted investments, with well understood risks, that include time to 
delivery as a critical discriminator.
    If our efforts here are going to succeed, I will need your help. I 
welcome the greater accountability you have given me, but would ask you 
to look hard at areas where oversight can be pruned back to less 
onerous levels. Which oversight functions are best performed by the 
Navy Secretariat, by the Office of the Secretary of Defense, or both? 
What steps can we take to maintain sufficient checks and balances, but 
that also recognize the competition that we cannot ignore? These are 
difficult questions, but ones that the world in which we find ourselves 
in demands that we answer. I look forward to working with you in this 
vital area, and to answering your questions.

    Senator Cochran. Thank you, very much, Admiral. We will now 
hear from the Commandant of the Marine Corps, General Robert 
Neller.
STATEMENT OF GENERAL ROBERT B. NELLER, COMMANDANT, 
            UNITED STATES MARINE CORPS
    General Neller. Chairman Cochran, Ranking Member Durbin, 
and members of the committee.
    Thanks for the opportunity to appear today and answer your 
questions. It is good to be here with Secretary Stackley and 
Admiral Richardson. My shipmates and I fully support the 
comments that they made in their statements, and I am also here 
to represent your Marines.
    I know this committee, and the American people, has high 
expectations for our Marines as our Nation's expeditionary 
force in readiness. You expect your Marines to operate forward 
with our Navy, engage with our partners, deter adversaries, and 
respond to crises. And when we fight, you expect us to win. You 
expect a lot out of your Marines and you should.
    This morning as we hold this hearing, there are more than 
35,000 Marines forward deployed and engaged doing just what you 
expect them to be doing. Our role, as the Nation's 
expeditionary force in readiness, informs how we man, train, 
and equip the Marine Corps. It also prioritizes the allocation 
of resources we receive from Congress.
    Unstable fiscal environments of the past have required us 
to prioritize the readiness of our forward deployed force over 
those at home station. Those Marines are the ones that 
immediately respond to crisis. Those Marines reinforced are 
currently protecting our embassies around the world. Those 
Marines are currently conducting air and artillery strikes in 
Syria and Iraq. Those Marines are training and advising the 
Iraqi and the Afghan army.
    Twenty-four thousand of those Marines are in the Pacific 
west of the international dateline deterring adversaries and 
assuring our allies. And I assure you that your forward 
deployed Marine forces are well trained, well led, and well 
equipped.
    However, this has come at a compounded expense and cost to 
our non-deployed, those getting ready to go next, and those 
that have just returned because those are the three types of 
marines that we have today. Those that are forward deployed, 
those that are getting ready to replace them, and those that 
just returned. That is our ready bench.
    The fiscal year 2017 appropriations bill is a good down 
payment to improve the readiness of this bench and move us 
forward to further recapitalize and modernize the force.
    That said the instability of the past 8 years and the 
continued legislative reality of budget limitations have 
disrupted our ability to program long term activities and 
directly challenge our efforts to sustain improvements to 
current and future readiness. To continue to meet operational 
commitments, maintain a ready force, and modernize for the 
future, we need sustained fiscal stability.
    While supporting requirements abroad, we continue to 
innovate, leverage technology, invest in new systems, and 
redesign our force through two initiatives called Sea Dragon 
2025 and Marine Corps Force 2025. We must adapt both the 
capabilities we possess and the thought process we bring to the 
battlefield because our adversaries have continued to advance 
their capabilities and their capacities. Our modernization 
ensures our future readiness for any fight that may be in the 
future.
    As we look forward, priorities for this year remain 
readiness recovery, implementation of the Force 2025 
initiative, and acceleration of our modernization initiatives 
to build a more lethal Marine Corps. We do not want our Marines 
to enter a fair fight. And though we remain a lethal and ready 
force, the margin between us and our potential adversaries has 
closed.
    With your continued support in addressing present 
challenges and shortfalls, we will be better postured to fight 
and win our Nation's battles now and in the future.
    I look forward to your questions.
    [The statement follows:]
             Prepared Statement of General Robert B. Neller
    Your Marine Corps remains the Nation's Expeditionary Force-in-
Readiness, able to answer the Nation's call in any clime and place. In 
meeting that mandate, Marines are forward-deployed and forward-engaged 
responding to crises around the world--managing instability, building 
partner capacity, strengthening allies, projecting influence--meeting 
the requirements of our Geographic Combatant Commanders. At home, our 
recruiters are working hand-in-hand with local communities, recruiting 
the best and brightest Americans our Nation has to offer and 
consistently achieving our recruiting goals. We appreciate the recent 
passage of the fiscal year 2017 funding. This is a down payment to 
improve our readiness and move us forward to recapitalize and modernize 
the force. That said, the fiscal instability of the past 8 years and 
the continued reality of continued budgetary uncertainty disrupt our 
ability to program long term activities and directly challenge our 
efforts to improve current and future readiness. To continue to meet 
operational commitments and maintain a ready force, your Marine Corps 
requires fiscal stability.
    Both in training and operationally, our Marines are busy; the 
current deployment tempo is on par with the height of operations in 
Iraq and Afghanistan. While supporting requirements abroad, we also 
continue to invest time and energy in developing the Marine Corps 
Operating Concept and its supporting Marine Corps Force 2025 
initiative. The changes within these institutional efforts will help us 
mitigate against an increasingly volatile operating environment. Our 
potential adversaries continue to advance their military capabilities 
and build capacity; because of their advances in technology and 
information use, we must adapt both the capabilities we possess and the 
thought processes we bring to the battlefield. As we look forward, our 
priorities for this year remain: readiness recovery, implementation of 
the Force 2025 initiative, and the acceleration of our modernization 
initiatives to build a more lethal 5th Generation Marine Corps.
                              your marines
    In the past year, your Marines demonstrated the relevance of 
expeditionary naval forces by executing approximately 20 amphibious 
operations, 200 operations, and 70 major exercises. A strong demand 
remains for Marines and tailored Marine Air-Ground Task Forces, driving 
an aggressive operational tempo. Marines in the operating forces are 
averaging a two-to-one deployment-to-dwell ratio, typically deploying 
for 6 months, then spending 12 months or less at home station before 
deploying again.
    Our Nation has Marines on the ground in Iraq, Afghanistan, and 
Syria today, and our commitment is growing. We have increased the 
number of Marine advisors in Afghanistan beyond our partnership with 
the Republic of Georgia's Liaison Teams. In April, we deployed Marines 
as part of Task Force Southwest training and advising the Afghan 
National Army. Additionally, Marine tactical aviation squadrons are 
supporting operations in Syria, Iraq, and Libya from forward-deployed 
locations afloat and ashore.
    Our Navy and Marine Corps Teams continue to perform as a flexible, 
agile, and responsive maritime force. In 2016, the Marine Corps 
deployed more than 11,000 Marines aboard Navy warships. This past year, 
five separate MEUs supported every Geographic Combatant Commander, 
participating in exercises and executing major operations. The 31st 
MEU, our Forward Deployed Naval Force in the Pacific, performed Foreign 
Disaster Relief (FDR) operations in Kumamoto, Japan, after a 6.5 
magnitude earthquake and 7.0 aftershock struck in April.
    Our Special Purpose Marine Air-Ground Task Forces (SPMAGTF) remain 
engaged. Our SPMAGTF assigned to USCENTCOM provides dedicated Tactical 
Recovery of Aircraft and Personnel (TRAP) support to Operation INHERENT 
RESOLVE, while simultaneously delivering a flexible force for crisis 
and contingency response. Those Marines continue to work with the 1st 
and 7th Iraqi Army Divisions advising and assisting in the fight 
against ISIL. In U.S. Africa Command (USAFRICOM), our SPMAGTF stands 
ready to support embassies through reinforcement, evacuation, and 
operations as required. Last July, Marines deployed to reinforce the 
U.S. Embassy in South Sudan and have remained, ensuring State 
Department personnel are able to provide critical support to the people 
of South Sudan. SPMAGTF-Southern Command (SPMAGTF-SC) deployed for a 
second time to Latin America, primarily focusing on Theater Security 
Cooperation (TSC) and training in Honduras, El Salvador, Guatemala, and 
Belize. At the request of the U.S. Agency for International 
Development, Marines from SPMAGTF-SC provided FDR to more than 750,000 
Haitians in the wake of Hurricane Matthew. SPMAGTF-SC were the first 
Marines on scene, arriving within 48 hours of notification, flying more 
than 250 flight hours, and distributing 290 tons of relief supplies 
over the course of 12 days.
    Marine Corps activities in the Pacific are led by Marine Forces 
Pacific (MARFORPAC) headquartered in Honolulu, Hawaii, with a forward-
stationed Marine Expeditionary Force (MEF), III MEF, headquartered in 
Okinawa, Japan. III MEF contributes to regional stability through 
persistent presence. Marines remain the Pacific Command's (PACOM) 
forward-deployed and forward-stationed force of choice for crisis 
response. The Nation has 22,900 Marines west of the International Date 
Line, operating within the Asia-Pacific Theater. This past January, the 
first operational F-35B squadron deployed to Japan, bringing extensive 
capabilities while simultaneously augmenting operational forces in the 
area. The Marine Rotational Force-Darwin (MRF-D), a six month unit 
rotation, based in Australia's Robertson Barracks, is in its fifth year 
of operation. More than 1,000 Marines participated last year, taking 
part in three major exercises over the course of 7 months. This April, 
MRF-D returned to Australia with MV-22 Ospreys. Of note, this was the 
first ever Trans-Pacific flight by III MEF MV-22 Ospreys, displaying 
the operational reach these aircraft bring to the Marine Corps.
    The Marine Corps maintains a vital relationship with the State 
Department, providing security at our Embassies and Consulates. Today, 
Marines are routinely serving at 176 Embassies and Consulates in 146 
countries around the globe. Marine Security Augmentation Unit (MSAU) 
teams deployed 62 times last year at the request of the State 
Department, executing 19 Embassy/Consulate and 43 VIP (POTUS/VPOTUS/
SECSTATE) security missions.
    Last year, the Marine Corps, in conjunction with Combatant 
Commanders and the Marine Forces Component Commands, conducted more 
than 160 security cooperation activities, including exercises, training 
events, subject matter expert exchanges, formal education key leader 
engagements, and service staff talks. The relationships we forge with 
allies assure them of our commitment, deter adversaries, build partner 
capacity, and set conditions to surge and aggregate with a Joint, 
Coalition, or Special Operations force for major theater combat 
operations. Partnering also trains our Marines for environments in 
which we are likely to operate. Your support has allowed the Marine 
Corps to operate globally and reap the benefits of those international 
relationships.
             marine corps operating concept and force 2025
    The challenges of the future operating environment demand that our 
Nation maintain a force- in-readiness, capable of global response. In 
the strategic landscape, we find that nations compete fiercely for 
natural resources, extremist groups employ violence to achieve 
nefarious ends, cyber- attacks are on the rise, and advanced weaponry 
and weapons of mass destruction continue to spread across the world. 
Additionally, due to universal access to information, rapid advancement 
in robotics, and new weapons technologies, serious threats have emerged 
with increasing speed and lethality.
    In the last year, we invested considerable time and energy 
formulating the Marine Corps Operating Concept (MOC) and its supporting 
Marine Corps Force 2025 initiative. These institutional efforts were 
spurred by a critical self-assessment that revealed the Marine Corps is 
not organized, trained, equipped, or postured to meet the demands of 
the rapidly evolving future operating environment. We arrived at this 
conclusion after a close examination of the current and future impacts 
of complex terrain, technology proliferation, information warfare, the 
battle of electro-magnetic signatures, and an increasingly non-
permissive maritime domain on the Marine Corps. The MOC embraces our 
naval character, expeditionary mindset, and professional approach to 
constantly improve and build on our foundations of maneuver warfare and 
fight as a combined arms force. The challenges of the future will 
impact how we organize our Corps and ultimately fight and win our 
Nation's battles. This concept is a starting point addressing how we 
will design, develop, and field a future force. It reaffirms the 
importance of maneuver warfare and combined arms. In the past, we 
successfully conducted maneuver warfare employing combined arms from 
the air, land, and sea. Now, changes in the operating environment and 
adversary capabilities drive us to increase emphasis on maneuver in a 
cognitive sense, expanding our employment of combined arms to space and 
cyberspace.
    Concurrent with our MOC design, we conducted extensive 
collaboration, war gaming, experimentation, and analysis to design a 
balanced MAGTF optimized for the future in an effort dubbed Marine 
Corps Force 2025. We continue to identify and, when able, acquire 
practical, affordable, and effective ways to protect our networks; 
practice information environment operations; configure capable tactical 
units; recruit, educate, and train leaders on multi-domain warfare; 
increase our long-range fires capability; develop reconnaissance and 
counter reconnaissance forces; leverage automation and robotics to 
augment Marines; develop innovative logistics capabilities and systems; 
and further our warfighting capabilities within the littorals. The 
Marine Corps must modernize and change to deter conflict, compete and, 
when necessary, fight and win against our adversaries.
                                manpower
    The center of gravity of the Marine Corps is its people, and the 
American people trust us with this precious resource--their sons and 
daughters. Our core values of honor, courage, and commitment are 
engrained in our culture. Marine leaders have a moral obligation to 
ensure the health and welfare of the Nation's Marines from the day they 
commit to serve. We take this responsibility seriously and strive to 
maintain the trust and confidence of Congress and the American people. 
Taking care of Marines and their families is a key element of overall 
readiness, combat effectiveness, and warfighting.
    Our comprehensive package of services seeks the holistic fitness 
and readiness of our Marines and their families--body, mind, and 
spirit. We continue to prioritize support through programs like: Force 
Fitness, Sexual Assault Prevention and Response, Suicide Prevention and 
Response, Behavioral Health, Wounded Warrior Regiment, Personal and 
Professional Development, and Transition Assistance. The Marine Corps 
remains focused on solutions to reduce destructive behaviors, 
particularly sexual assault, suicide, and hazing. We are dedicated to 
eradicating bullying, degrading, and abusive behavior committed online 
or in person. The abuse of alcohol is a known factor and contributor 
across the spectrum of force preservation issues and negatively impacts 
the readiness of our force. We have to minimize these destructive 
behaviors. We believe that preserving our commanders' ability to lead 
in this area is a vital element to reaching this objective.
    We appreciate the continued support from Congress, specifically the 
most recent end strength approval of 185,000 Marines. We will create 
the most lethal, capable, and ready 185,000 Marines our resources will 
permit. That said, one continuing challenge is that the Marine Corps 
operating forces are currently averaging less than a one-to-two 
deployment-to-dwell ratio. This tempo is not sustainable as it does not 
provide options to train to our full mission sets and it puts 
unreasonable strain on our Marines and families. Ideally, we seek to be 
a one-to-three deployment-to-dwell force. Deliberate and measured 
capacity increases, reduction of our operational tasking, or a 
combination of the two, are solutions that would put us on the path to 
improve our deployment-to-dwell ratio. Our Marines want to deploy, 
serve our Nation, and protect our country from threats overseas. 
However, we owe our Marines and their families the appropriate 
deployment-to-dwell time to allow them to learn, re-focus, reflect on 
their most recent deployment, and train for the next deployment or 
contingency.
                               readiness
    Marines have a unique perspective on readiness. The Congressional 
intent for Marines to serve as the ``Nation's Force-in-Readiness'' 
guides who we are and what we do--being ready is central to our 
identity. As a force, we must remain ready to fight and win across the 
range of military operations within all warfighting domains. Fiscal 
reductions and budget instability has been the norm for the past 8 
years and has consequently eroded our readiness. As resources 
diminished, the Marine Corps protected near-term operational readiness 
of its deployed and next-to-deploy units to meet operational 
commitments; this has come at a compounded cost. Non-deployed units, 
our ``ready bench,'' can still deploy with minimal notice but, if 
required, would not be as ready or capable as necessary. More reliable 
funding and support of the annual budget request must be there if we 
are to improve our readiness and our ability to respond to crises.
    A lack of amphibious warships, ship-to-shore connectors (SSC), and 
Mine Countermeasure capabilities (MCM) puts the Nation at a severe 
disadvantage. The Navy and Marine Corps team requires 38 amphibious 
warships to support two Marine Expeditionary Brigades and to provide 
the Nation a forcible entry capability. Our current amphibious warships 
need updated, resilient and interoperable command and control systems. 
As a maritime Nation, we need to be fully capable of exploiting the sea 
as maneuver space in an age when the proliferation of anti-access 
weapons continues to increase. This includes the ability to operate 
freely in international waters and airspace. Thirty- eight amphibious 
warships offer us agility and resilience in an unpredictable and 
dangerous security environment. Along with these warships, the Navy and 
Marine Corps team requires SSC that are survivable and reliable. Our 
current Landing Craft Air Cushion (LCAC) fleet averages 25 years of 
service and our Landing Craft Utility (LCU) attained Initial Operating 
Capability (IOC) in 1959--3 years prior to Senator Glenn orbiting the 
earth for the first time. MCM capabilities are continually underfunded. 
The Navy and Marine Corps team needs prudent and consistent funding to 
rectify these issues through multi-year procurement and block-buy of 
amphibious warships, SSC, and MCM.
    Marine Aviation is in the midst of a focused readiness recovery 
effort. We have developed an extensive plan to recover readiness across 
every Type/Model/Series in the current legacy inventory, all while we 
continue to procure new aircraft. We are realizing steady improvements 
in aviation readiness, but the plan requires sustained funding, parts 
and supply support, flight operations, and time. Each T/M/S requires 
attention and action in specific areas: maintenance, supply, depot 
backlog, and in-service repairs.
    The F-35 Lighting II is more than just the next fighter, it brings 
unprecedented low observable technology, modern weaponry, and 
electronic warfare capability to the Navy and Marine Corps team. 
Delivering this transformational capability to our front-line forces as 
soon as possible remains a priority. The accelerated procurement of 
this aircraft is essential as our legacy fleet of AV-8B, F/A-18, and 
EA-6B aircraft are rapidly approaching end of service life. Though more 
expensive than these legacy aircraft, the capabilities we receive in 
return for our cost share in the joint program make it a wise 
investment. We are aggressively seeking ways to reduce operations, 
maintenance, and sustainment costs for this program. This aircraft is 
currently demonstrating its ability to support the MAGTF and is 
expanding the capabilities of Marine Aviation today.
    The CH-53E is another example of an aircraft that needs to be 
replaced--not extended--as this is the most cost effective solution. 
Entering service in 1981, the out-of-production CH-53E Super Stallion 
is 55 aircraft short of the required inventory and cannot meet the lift 
needs of today's Marine Corps. Its replacement, the CH-53K, costs 
approximately 30 percent more, but provides three times the lift 
capability under the same conditions, and is the only maritime, heavy-
lift helicopter capable of supporting current and future warfighting 
concepts. The CH-53K is capable of supporting 100 percent of the 
MAGTF's lift requirements for approximately the same projected 
operating and support (O&S) cost of the legacy CH-53E. The CH-53K will 
provide increased range, payload, interoperability, and survivability.
    The Marine Corps is executing a post-combat reset strategy to 
reconstitute and increase readiness of our ground equipment. We have 
reset 92 percent of our ground equipment, with 65 percent returned to 
the Operating Forces and our strategic equipment programs. Our war 
reserve includes geographically prepositioned combat equipment, located 
both afloat and ashore. We remain focused on this recovery effort and 
appreciate your support. That said, our ground equipment is old. Our 
amphibious assault vehicles were fielded in the 1970s, with many of our 
other ground systems fielded in the 1980s. Much like our aviation 
assets, our ground systems must be procured and fielded to our Marines 
in a faster manner, at lower operating costs and improved capability.
    Marine Corps bases and stations support Marines and their families 
and serve as training, sustainment, and deployment platforms. They 
provide the capability and capacity to support the force and are 
integral to combat training. To maintain near-term unit readiness, we 
have accepted risk in facilities sustainment. While prioritizing 
deployed readiness, our infrastructure and facilities continue to 
decline. Taking risk in Facility Sustainment, Restoration and 
Modernization (FSRM) requirements has resulted in the degradation of 
our infrastructure, creating increased long-term costs. FSRM is 
currently funded only to meet the most urgent life, safety, and health 
issues. Improving the current state of our facilities is the single 
most important investment to support training, operations, and quality 
of life. In addition to FSRM, we require investment in military 
construction to support the fielding of new platforms; facilities 
necessary to meet improved training standards and operational readiness 
enhancements; replacement of inadequate facilities; improvement of our 
safety and security posture, and relocation of forces.
    To address these challenges, we have developed an Infrastructure 
Reset Strategy (IRS). Designed to improve infrastructure lifecycle 
management and ensure infrastructure investments are aligned with 
Marine Corps capability-based requirements, IRS supports the 
warfighting mission and contributes directly to current and future 
force readiness. Additionally, under this strategy, we will sustain 
infrastructure and installations as capable, resilient, right-sized 
platforms to generate force readiness and project combat power across 
the range of military operations. The Marine Corps service 
infrastructure capacity is about right; however, the IRS does address 
reducing excess and aging infrastructure to improve readiness and 
stability. The Marine Corps supports a Department of Defense request 
for authorization to conduct a Base Realignment and Closure (BRAC) 
round in 2021 based on the needs of other services, and to reinforce 
efforts planned through our IRS to optimize facilities posture to 
support increased readiness.
    Readiness is not just about equipment supply and maintenance, but 
also the quality and challenging nature of our training through the 
mental, spiritual, and physical readiness of Marines and Sailors across 
the force. Readiness reflects through an organizational attitude and 
confidence, knowing that it can respond to and win in any crisis 
because it has been properly organized, led, trained, and equipped.
                             modernization
    History has not been kind to militaries that fail to evolve, and 
the global change we are witnessing is rapid and dramatic. Your Marine 
Corps must be manned, modernized, and ready to meet the demands of a 
future operating environment as defined by our National Military 
Strategy. The development, procurement, and fielding of a 5th 
Generation Fighter, the F-35 Lightning II, is just one aspect of our 
modernization efforts. We are modernizing our entire aviation force, 
increasing the lethality of our infantry, and ensuring our combat 
support and logistics are the most modern and capable. The result we 
aim to achieve is a Marine Corps that is the most advanced and ready--a 
5th Generation Marine Corps. Capable of dominating the battlefield in 
all five domains--air, land, sea, space, and cyberspace--a 5th 
Generation Marine Corps will use information, an integral part of each 
domain that must be leveraged, as the thread to connect them. This 
requires transforming MAGTF command and control capabilities through a 
unified networked environment that is ready, responsive, and resilient. 
The 5th Generation Marine Corps is a modernized force required to meet 
and prevail against any adversary on the multi-domain battlefield of 
the future.
    The Marine Corps must progress to stay ahead of the current 
security environment while mitigating future conflict or face becoming 
a force unable to deter and defeat future adversaries. Budget cuts 
since the Department of the Navy top line peaked in 2008, coupled with 
fiscal uncertainty, forced us to utilize limited resources to ensure 
the readiness of deployed forces and sacrifice end strength, home 
station readiness, infrastructure sustainment, and quality of life 
programs, as well as delay critical modernization. We need to modernize 
rapidly, to replace ``old iron'' with new, reliable, sustainable, and 
affordable equipment across the MAGTF. We need the continued support of 
Congress to increase the production rate of our acquisition programs 
while funding future modernization initiatives. Further, the 
recapitalization of our force is essential to our future readiness with 
investments in ground combat vehicles, aviation, command and control, 
and digitally- interoperable protected networks. Marines will continue 
working to do what we do today better than ever, while exploring ways 
these tasks might be done differently. The Marine Corps will persist in 
developing and evolving the MAGTF through innovation and 
experimentation, ensuring it is able to operate in all domains of 
conflict.
    The Marine Corps Warfighting Lab leads our experimentation effort 
to capitalize on existing and emerging technologies and MAGTF level 
exercises. In conjunction with our coalition partners, the Navy and 
Marine Corps team has experimented with dispersed sea-based SPMAGTFs; 
integrated MAGTFs in heavily defended littoral environments; 
incorporated emerging digital technologies with aviation platforms and 
our ground forces; and conducted naval integration with interoperable 
Special Operations Forces. We will continue to emphasize 
experimentation and innovation during our exercises as a way to inform 
the development of distributed doctrine and future operating concepts. 
Exercises serve as a test bed for experimentation and innovation as we 
search for faster, cheaper, and smarter acquisition processes and 
programs. Expect the Marine Corps to continue pursuing technologies 
that enhance our warfighting capabilities such as unmanned aerial 
systems (UAS) and robotics, artificial intelligence, additive 
manufacturing, and autonomous technologies that provide tactical and 
operational advantage. We have seen success in some of these 
initiatives and require consistent funding to better plan our 
modernization efforts.
    Effective planning produces unit cohesion and leadership in our 
operating forces, and financial predictability for our modernization 
programs. The ability to properly plan achieves stability and 
predictability for our personnel and families, ensures ample time to 
train, and fosters development of our small unit leaders. Modernization 
is critical to our future readiness.
                      our challenges and solutions
    Our most immediate challenge is resolving the significant readiness 
issues that have grown over the past 15 years. Collectively, fiscal 
inconsistency, spending cuts, and accumulating wear and tear after 
years of combat operations have depleted our readiness and delayed 
planned recapitalization and modernization efforts. Though our forward 
deployed forces are ``full up'' and ready for whatever comes their way, 
our ``bench'' has become shallow--particularly for aviation. We also 
lack sufficient amphibious lift. Our minimum requirement is 38 
amphibious warships and we presently stand at 31, getting to 34 within 
the current Future Years Defense Plan. Due to this shortage, we have 
deployed two ground-based SPMAGTFs that have added deployment tempo to 
the Force.
    Over the past year, the Marine Corps dedicated nearly every 
operational MV-22 Osprey squadron to source its global commitments, and 
the increased utilization rates on these airframes affect the longevity 
of their service life. To reduce operational tempo and continue to meet 
operational commitments, we cut MV-22 and KC-130J aircraft from our 
SPMAGTFs in CENTCOM and AFRICOM. Additionally, F/A-18 readiness 
challenges necessitated a reduction of the number of F/A- 18 aircraft 
assigned to squadrons from 12 to 10. Exacerbating our concerns in 
aviation is a potential exodus of seasoned pilots and maintenance 
personnel to the commercial airline industry. We ask for your support 
for the fiscal resources we have requested to retain the talent in 
which we have invested. With the continued support of Congress, Marine 
Aviation will recover its readiness by recapitalizing our aging fleet, 
while at the same time accelerating the procurement of new aircraft to 
meet our future needs and support our ground forces.
                               conclusion
    The unpredictability of the security environment and unknown future 
facing our Nation today reaffirms the wisdom of the 82nd Congress--the 
vital need of a strong force-in-readiness. Marines are honored to serve 
in this role. We do not want to enter a fair fight; therefore, we must 
build a 5th Generation Marine Corps that has no peer on the 
battlefield. As we continue to innovate, leverage technology, and 
invest in new systems, our current plan includes advanced infantry 
weapons, the rapid procurement of the Amphibious Combat Vehicle and 
Joint Light Tactical Vehicle, long-range precision fires, and counter-
UAS capabilities. It also increases fielding rates of the F-35B and C, 
continues the CH-53K procurement, begins research and development of a 
Group 4/5 unmanned aerial system capable of being sea-based, and 
continues to build manned-unmanned teaming capabilities. The plan as 
described depicts a roadmap to rebuild and modernize America's Marine 
Corps. With the continued support of Congress in addressing present 
challenges and shortfalls, we will be better postured to fight and win 
our Nation's battles now and into the future. The American people 
expect and deserve nothing less from their Marine Corps.

    Senator Cochran. Thank you, General. Appreciate you being 
here and your leadership.
    May I hear from our distinguished democrat ranking member, 
Senator Richard Durbin?

                 STATEMENT OF SENATOR RICHARD J. DURBIN

    Senator Durbin. Thank you, Mr. Chairman.
    My apologies to the subcommittee and everyone in 
attendance, but we had an overlapping hearing of the senate 
judiciary committee upstairs which caused me to be a little bit 
late to arrive. I apologize. I am sorry for that scheduling 
problem.
    And I ask consent that my opening statement be entered into 
the record.
    Senator Cochran. Without objection.
    Senator Durbin. Thank you very much.
    Senator Cochran. Ordered.
    [The statement follows:]
            Prepared Statement of Senator Richard J. Durbin
    Mr. Chairman, I am pleased to join you in welcoming Secretary 
Stackley, Admiral Richardson, and General Neller to our hearing to 
review the Navy's budget request for fiscal year 2018.
                      government funding situation
    Two months ago, this Subcommittee met to consider the White House's 
request for additional defense spending as part of the fiscal year 2017 
omnibus.
    As I discussed with Secretary Mattis at the time, the request from 
the Office of Management and Budget was riddled with errors, 
duplication, and poor justifications. OMB even neglected to propose a 
way spend the increases without violating the Budget Control Act.
    As we meet to consider the Navy's needs in fiscal year 2018, it is 
not clear that the White House has taken its responsibilities any more 
seriously than what we saw in March.
    Congress continues to wait for the President to propose a nominee 
for the Secretary of the Navy. This is not meant as any disrespect to 
Secretary Stackley. But this is a persistent problem, not only for the 
Navy, but for the Department of Defense, and all of the agencies of 
government. By any fair measure, the White House is woefully behind 
meeting this responsibility.
    I'm also sorry to say that the White House's budgeting hasn't 
improved since March 2017.
    The budget submitted to Congress yesterday for the Department of 
Defense exceeds the Budget Control Act caps by $52 billion. Of this 
amount, the budget for the Navy and Marine Corps exceeds the 
sequestration-level caps by about $15 billion.
    We all recognize that there are holes in our Armed Forces that need 
to be fixed. But there are fundamental problems with the Trump budget.
    First, the entire $52 billion increase violates the Budget Control 
Act, but the White House has offered no plan to amend those budget 
caps.
    This means that if Congress passed this budget tomorrow as it has 
been proposed, it would trigger across-the-board sequestration cuts of 
$52 billion from military programs. That would translate into a 
senseless 10 percent cut from almost every line in the budget.
    Second, with no fix to the Budget Control Act being proposed, we 
can predict what will happen: Congress could simply jam tens of 
billions of dollars into the Overseas Contingency Operations fund.
    Congress, watchdog groups, and even the Pentagon itself have 
pointed out that abusing OCO is bad budgeting, bad for military 
planning, and bad for the American taxpayer.
    Third, domestic programs ranging from medical research to education 
are poised to be slashed by $54 billion to pay for increased defense 
spending--despite overwhelming bipartisan support in the omnibus 
appropriations bill passed earlier this month.
    Our Armed Forces depend on healthy, well-educated young Americans 
to sign up to serve out country. Cutting these programs will ultimately 
shrink the pool of Americans who can serve in our military, making 
these proposals very short-sighted.
    Congress must work together on a bipartisan basis to ensure that 
our appropriations bills fund every part of our national strength--
militarily, economically, and socially.
    We should prevent this looming sequestration. We should do so in a 
way that ensures parity between our defense and domestic investments.
    We can do this. We have done this in the past. Members should not 
allow the White House's lack of interest in meeting its 
responsibilities hold us back from meeting ours.
                          navy & marine corps
    I am eager to hear from our witnesses just how much of the Navy's 
budget is above the Budget Control Act caps, as well as how this budget 
intends to deliver on Secretary Mattis' priority of readiness and 
filing critical holes in the Navy and Marine Corps.
    For the Navy, the White House led us to believe that this budget 
would begin the ramp up to a fleet of 355 ships. But the number of 
ships in the budget is smaller than what Congress provided for 2017. 
This Subcommittee needs to know what the plan is for our Navy.
    General Neller, I am concerned about our Marines. I am most 
concerned about the culture of the Marine Corps in the aftermath of 
Marines United.
    There are also concerns that the Marine Corps could be at a tipping 
point. The Marines have been deployed non-stop for nearly 16 years, and 
the strain on the force and your equipment is mounting.
                               conclusion
    Given the fiscal constraints that face our nation and 800 pound 
gorilla in the room--sequestration--this Committee needs to know the 
Navy and Marine Corps' most pressing needs.
    The Administration and the Department of Defense should not take 
for granted the additional $15 billion in the final defense bill just 
passed by Congress. That was no easy task.
    I look forward to a thorough discussion of these issues as they 
relate to the Navy and Marine Corps, and I thank you for your service 
to our country.

    Senator Durbin. I would like to note at the outset that the 
request of the Trump Administration for the next fiscal year 
for the Department of Defense is $52 billion over the amount 
allocated by the Budget Control Act.
    As every Senator here knows, that would require on its face 
for us to do an automatic across the board cut in your 
agencies, your services, as well as all other agencies of the 
Department of Defense to make up the $52 billion.
    There is still no response from the administration about 
what to do about the Budget Control Act or sequestration. We 
saw this in the fiscal year 2017 budget. We are seeing it again 
in the fiscal year 2018 budget.
    This is not responsible and the notion that we can take 
care of this problem on a periodic or annual basis with funds 
really is no way to run the United States of America or our 
national defense.
    So I hope that before the end of the day we can face the 
hard, tough, stark choices and put this Budget Control Act and 
sequestration behind us once and for all rather than what this 
budget suggests.

                             MARINES UNITED

    I would like to address two issues in particular. General 
Neller, we talked about this in my office and I am going to 
raise it again.
    In March we learned the shockingly large number of current 
and former marines, up to 30,000 have been posting explicit 
pictures of female marines to certain websites.
    This Marines United scandal is deeply disturbing. There has 
been one arrest and at least 30 active duty marines are under 
investigation. Secretary Stackley, last week the Navy announced 
that anyone committing this type of crime will face mandatory 
administrative separation processing.
    I would like to ask the Secretary, the General, or whoever. 
Does this new policy guarantee that anyone found guilty of 
posting these photographs will be dismissed from the Navy or 
Marine Corps?
    Secretary Stackley. Yes, sir. Let me provide the first 
answer to that.
    We have established what the standard is for a Navy and 
Marine Corps in terms of this particular behavior what is and 
is not acceptable. The challenge that we will continue to have 
is to identify individuals that are in fact guilty of violating 
that standard.
    But when we do, we will bring them to proper judicial 
proceedings or non-judicial proceedings and ensure that those 
that are guilty of violating the standard are dealt with in 
civil court. Or if not, then we have the ability within NJP 
(Non-Judicial Punishment) or UCMJ (Uniform Code of Military 
Justice) using the articles that we have to either remove them 
from the service or take otherwise appropriate action 
determined at the time.
    Senator Durbin. Do you know the identities of the 30,000 
who were engaged in this?
    Secretary Stackley. No, sir. In fact, the NCIS (Naval 
Criminal Investigative Service) has been doing an exhaustive 
review of the websites, all available information through 
photographic evidence to try to determine the number of 
individuals that could be identified through the photographic 
evidence tracing back through the web to try to identify the 
subjects that are guilty of posting these photographs. And of 
those, how many of those would be in active duty any service. 
They are looking across the board in terms of services.
    It is a tough challenge. Out of the literally greater than 
150,000 photographs that they have reviewed, the number of 
individuals we can identify are in the small double digits. 
Then we are first going through, trying to process those 
through civil court, and if not then bring them back inside of 
UCMJ and NJP.

                     WOMEN IN THE U.S. MARINE CORPS

    Senator Durbin. General Neller, there are approximately 
15,097 females in the active duty Marine Corps or 8.2 percent. 
The average age of women serving is 24 years of age. I would 
like you, if you would to address a few issues.
    First, do you believe that there is an important role in 
the future of the Marine Corps for women to serve? And if so, 
what impact has this scandal had on the morale of those 
serving? And what is the Marine Corps going to do to try to 
entice future women as recruits to become part of the Marine 
Corps leadership?
    General Neller. Well, Senator, first, yes, absolutely there 
is a role for women in our Marine Corps. And I think if you----
    As we are on our program to try to increase the number of 
women in our Corps to 10 percent of the force, and our recent 
advertising campaign is one of the first steps.
    But I will say on this Marines United, as disgusting and as 
offensive as this whole thing is, the number of Marines as 
Secretary Stackley said, that were involved in this behavior is 
nowhere near 30,000.

                      FEMALES IN THE MARINE CORPS

    You have to understand Marines United--and I am not 
condoning anything that anybody did that was disreputable or 
discrediting to our Corps--most of those Marines joined that 
site to help each other to deal with whatever they brought back 
from the war. We do not really know how many Marines were in 
this sub-link that we are dealing with these pictures.
    The individual that broke the story, he estimated it at 
500, but we do not know. But we are continuing to dig into 
this, go through the pictures, an ongoing investigation. As 
Secretary Stackley said we found 50 or 60 people that they have 
referred to us and they are in the process of being 
adjudicated.
    So back to females. I think this whole thing, as disturbing 
and as difficult as it has been, has actually been a benefit. I 
think it has been a benefit to our Corps because I think it has 
brought up a very simple point. It is really not about social 
media. It is about how we view women in our Marine Corps.
    The answer is we have not viewed them as well, and 
appreciated their contribution, and the sacrifice they have 
made, and the credit that they deserve. So to me that is the 
issue.
    I think the great majority of Marines that I have talked 
to, male Marines, they understand that. And I think we are now 
on a path to make everybody understand that this behavior is 
not acceptable; that a Marine is a Marine. Once you earn that 
title, you do not have to earn it again. And if you are not 
going to be part of the solution, then you are going to have to 
go somewhere else.
    Senator Durbin. Thank you, General.
    Thank you, Mr. Chairman.
    Senator Cochran. Thank you, Senator.
    The Senator from Alabama.
    Senator Shelby. Thank you, Mr. Chairman.

                             LCS PRODUCTION

    Admiral Richardson, the Navy's most recent Force Structure 
Assessment, FSA, explains as I understand it that 459 ships are 
needed to achieve the Navy's missions and reasonable 
expectation of success without incurring significant losses. 
Those are the words that came out of the report. However, the 
final 2016 FSA concluded that 355 ships is an acceptable 
minimum force.
    Could you describe the importance here, in a public setting 
as much as you can, of meeting the minimum force levels in each 
of the major ship classes as outlined in the FSA? How important 
is this, not just to the Navy, but to our strategy and our 
ability to project force around the world if needed?
    Admiral Richardson. Senator, thank you for the question.
    We did have a Force Structure Assessment that validated the 
need for 355 ships. Those run the gamut of every ship class 
that we have in the Navy from nuclear powered aircraft 
carriers, to our SSBN's providing strategic deterrence, to our 
large surface combatants, attack submarines, small surface 
combatants, and amphibious ships.
    It is the combination of that force and with respect to the 
aircraft carrier, the air wings that they carry. It is a matter 
of capacity of the force.
    Senator Shelby. All these ships are important, are they 
not?
    Admiral Richardson. They are all important.
    Senator Shelby. Because they have a role in the Navy.
    Admiral Richardson. They do. Yes, sir. They come together 
as a team. Yes, sir.
    Senator Shelby. Secretary Stackley, in your written 
testimony today, you mentioned the importance of ensuring 
continued production of the LCS shipyards while the Navy 
refines its acquisition strategy for the future frigate.
    Is it accurate to say that uncertainty, or even a break in 
current production, could add a significant cost and time delay 
to the delivery of the Navy's future frigate?
    Secretary Stackley. Yes, sir.
    Senator Shelby. Leaving aside the cost and time in the 
small surface combatant class of ships, has the Navy considered 
what is optimal to get the best ship at the best price for the 
taxpayer and, of course, the war fighter?
    Secretary Stackley. Yes, sir. Let me first answer the 
question regarding the risks associated with any break in 
production. True of the LCS program, true of any shipbuilding 
program, a break in production would be devastating.
    And it is not simply the impact on things like learning 
curve. It would be an impact to the vendor base and it is the 
potential loss of the skilled labor that we rely upon to build 
these extraordinarily complex warships. So any break in 
production, we would consider to be unacceptable for a major 
shipbuilding program.
    With regards to the strategy going forward for the LCS, 
right now we are procuring literally 1 year at a time.
    We are going to take the three ships--the one added by 
Congress in 2017 and combine it with the 2018 ship that we have 
requested--in order to go out with a single procurement of 
those 2 years to provide as much stability across the current 
LCS builders as we can, while we continue to refine the 
requirements and press forward with the design of the frigate. 
We want to keep the LCS and the frigate heel to toe as best as 
possible, so that we have a healthy industrial base to compete 
for that future frigate program.
    Senator Shelby. How important is it to keep that industrial 
base going because you cannot just snap your fingers and build 
ships? You have workers. You have everything, suppliers. You 
have to have skilled people, have you not?
    Secretary Stackley. Yes, sir. It is absolutely critical.
    Our Navy is the only true customer for procurement of these 
complex warships in this country. And so, we cannot afford to 
lose the help that we have today in the industrial base.
    We have past examples where we have had a gap and the 
impact of trying to restore from that gap is pretty 
devastating.
    Senator Shelby. Admiral Richardson, back to you.
    As a submariner, and as someone who has studied naval 
strategy in your career, you probably understand better than 
most how our peer competitors, China for example in particular, 
look at our vulnerabilities. Everybody does in making their 
plans.
    Can you describe what the Navy is doing, as much as you can 
in this setting, to improve its defensive and offensive 
capabilities to ensure that our adversaries understand that 
they cannot beat us in a fight? That is very, I think, 
important.
    Admiral Richardson. Sir, thank you.
    First, you mentioned I am a submariner and one area that we 
do enjoy an advantage right now is in undersea warfare, and we 
are working very hard to maintain that advantage. It is just as 
you said, though, our adversaries are studying us closely and 
are crafting their force to address those advantages.

                           NAVY CAPABILITIES

    Then as you mentioned, we need to grow the Navy as much in 
the importance of shipbuilding and ships' matter. Then we need 
to advance in capability. And so, we need to equip those ships 
with better technology to make each and every one of them more 
lethal. Finally, I am moving hard to network that fleet 
together so that it can operate as a single team across a 
broader expanse.
    And so, it is the combination of capacity, capability at 
the platform level, and then the combined effect of a network 
fleet that will allow us to maintain our edge.
    Senator Shelby. Thank you, Mr. Chairman.
    Senator Cochran. The time of the Senator has expired.
    The distinguished Senator from Rhode Island, Jack Reed.
    Senator Reed. Thank you very much, Mr. Chairman.
    Thank you, gentlemen, for your service. And please tell all 
the men and women of the Navy and the Marine Corps, well done. 
Thank you.

                   SHIPYARD MAINTENANCE AND READINESS

    Admiral Richardson, you pointed out that probably the most 
pressing issue you have is readiness. That is particularly 
demonstrated with respect to some of the submarines that are 
tied up, literally, and cannot be operated.
    It goes to the point you also made, I think, about the 
folks at sea do not think we get it. They are sitting around 
with a billion dollar ship that cannot go anyplace and they are 
just sort of wondering.
    Can you let us know how this budget helps you deal with 
those issues of ships that have to be overhauled and what is 
the constraint?
    Admiral Richardson. Yes, sir.
    This is one of the major focuses of this budget request is 
that it starts to get at the industrial capacity really across 
the board for the Navy, and in particular, in shipbuilding.
    And so it requests, among other things, an increase in 
shipyard workforce. It does some capital investments in the 
shipyards, and then reinvigorates all those accounts that will 
allow us to get back to work on those shipyards.
    I also have Admiral Moore, the Commander of the Naval Sea 
Systems Command, focused on finishing those upkeeps on time. 
These resources will allow him to get after that in a 
meaningful way.
    Senator Reed. This might not be appropriate in an open 
setting, but how many submarines are nonoperational because 
they are waiting for certifications and overhauls?
    Admiral Richardson. Well, we have a number that are in 
programmed overhaul. I think a better way to describe that, 
sir, is just sort of how----
    We have the USS Boise, the one that has lost her submerged 
certification.
    Senator Reed. Right.
    Admiral Richardson. She is unable to submerge right now 
until she gets into the shipyard. We are waiting for an 
opportunity to bring her in and this budget helps us get there.
    Then there are a number that are just delayed in 
maintenance sometimes by hundreds of days waiting for their 
maintenance to get done. That is also time that those 
submarines should be at sea. This also goes for our surface 
force as well. It is not just confined to the submarines.

                          NAVY INDUSTRIAL BASE

    Senator Reed. In that context, I would presume that the 
submarines would have to be in a nuclear shipyard, is how they 
overhaul it. Is that correct?
    Admiral Richardson. Yes, sir.
    Senator Reed. But some of our surface ships could be 
overhauled and repaired in commercial yards, and this goes to 
this industrial base issue.
    Secretary Stackley, has anyone thought about how we more 
efficiently allocate work? My sense is that a shipyard gets a 
contract to build ships, and they build ships. If they do not 
get that ship, it is bad for workers and everyone else. But is 
there a way we can start transitioning from building a ship to 
doing the overhaul and repairs so that we maintain the 
industrial base?
    Secretary Stackley. Yes, sir. Let me start with, I will 
call it division labor, between our public and private 
shipyards.
    Our four public shipyards are predominantly our repair base 
for our nuclear carriers and submarines. And so the challenges 
that the CNO just described is a workload issue in those 
facilities. So the submarines are being impacted by the 
carriers, for example. It is a ripple through in terms of 
schedule and impacts.

                   SHIPYARD MAINTENANCE AND READINESS

    We have in the past, and we continue to look at it, used 
the private sector to augment our capacity in terms of repair 
and maintenance in the depot. And so, there are occasions that 
you are quite familiar with where we have taken submarines out 
of public workload and put them in the private sector. E.B. and 
Newport News, obviously, are the two shipyards that are capable 
of taking on that work.
    On the nonnuclear side of the house, we are working across 
a broader private sector repair base. What we have been doing--
particularly over the last couple of years when there has been 
a mismatch between our workload and the capacity in the repair 
side, which has led to either significant increases in workload 
beyond the capacity or just the reversal, a drop in workload 
that has tended towards layoffs--we have been working carefully 
with the private sector to give them total transparency to our 
planned workload. We have been trying to balance across things 
like homeports to ensure that we do not have a peak in one area 
and we have a dearth in another area.
    But this comes back, again, to some of the uncertainty 
issues associated with the budget. These are planned and 
executed on an annual basis.
    So if, for example, this year, you are into the eighth 
month of the year before you have your final appropriation. 
That has created tremendous uncertainty from our standpoint in 
terms of being able to contract for these availabilities. 
Industry's standpoint to understand, do they hold onto the 
workforce because the work is coming or is this something that 
will be delayed into the next year?
    So it is a combined Navy, industrial base, and 
congressional effort that has to be collected together to 
minimize the impacts to the industrial base, and to ensure that 
we are getting the degree of readiness that we need for the 
dollars that we have, and to be able to best hit the schedules 
that we have laid out for our ships, our service ships in this 
case through the optimized fleet response plan.
    Senator Reed. Thank you.
    Senator Cochran. The time of the Senator has expired.
    The distinguished Senator from Maine, Senator Collins.
    Senator Collins. Thank you, Mr. Chairman.
    Thank you all for your service.

                     SHIPYARD INFRASTRUCTURE STUDY

    Admiral Richardson, I know you are very familiar with the 
Portsmouth Naval Shipyard in Kittery, Maine. It has been called 
the gold standard of public shipyards because of its efficient, 
high quality work.
    You mentioned you are concerned about the readiness of the 
fleet, a concern that I share.
    One of the studies that is underway is the Department's 
Shipyard Dry-dock Study and the broader Shipyard Infrastructure 
Modernization Plan to make sure that our four public shipyards 
have the facilities and the up to date equipment to be able to 
keep our fleet out there, to keep our submarines in service.
    Could you tell us what the status of those studies are?
    Admiral Richardson. Yes, ma'am.
    First, let me just highlight the terrific performance of 
the Portsmouth Naval Shipyard. That is one shipyard where our 
work is being done pretty much on schedule, if not a little bit 
ahead. And so they do great work up there.
    This Naval Shipyard Dry-dock Capacity and Survivability 
Study is underway. It has our full attention. I would say that 
it includes a number of initiatives.
    One is just that as the Virginia-class improves, we start 
to talk about the Virginia payload module. We start to talk 
about the Columbia-class. The need to adjust our dry-docks so 
that they can accommodate those new classes of ships is the 
first pressing need.
    Then the study also addresses larger capital improvements 
that may be possible. I look forward to bringing that to the 
Congress to discuss how we can incorporate some of the modern 
ideas that go towards really improving the performance of any 
industrial shipyard.
    So in the private sector, as we mentioned, they have 
already done a lot of these capital expenditures to improve 
workflow from the arrival of material all the way through to 
its production. And so, that study is underway and I look 
forward to bringing it to you when complete.
    Senator Collins. Thank you, Admiral.
    Mr. Secretary, as the Senator from Alabama mentioned, the 
Navy's most recent fleet assessment sets a goal of 355 ships. 
That replaces the 308 ship force level goal that was released 
in March 2015.
    If you read the Navy study, there is a sense of urgency. It 
says we need a more powerful fleet in the 2020's, not the 
2040's. It goes on to say the Navy must get to work now to 
build more ships.
    And yet, as I look at this budget, it appears to continue 
President Obama's 30-year shipbuilding plan and does not seem 
to reflect the latest assessment by the Navy, which has also 
been endorsed by the President, who has indicated his support 
for a 350 ship Navy.
    Did your budget request get cut by OMB (Office of 
Management and Budget)?
    Secretary Stackley. No, ma'am. Let me describe it.
    Clearly throughout this hearing, we have tried to emphasize 
the priority in this budget is to restore readiness for the 
force. The best way to increase whether it is your ship count 
or your aircraft count on deployment in theater where you need 
it is to raise the readiness of the in-service fleet. And that 
is the priority in this budget.
    But we are also making clear that with the defense strategy 
review that is ongoing now and will report out in time to 
support our 2019 budget request going through the building and 
to OMB. That a priority is, one, we hold onto the readiness 
gains in 2017 and 2018, but we have to build the force in terms 
of capacity and capability, as the CNO has emphasized, to 
ensure we are ready for the future fight.
    So while today we do, in fact, hold what we had in the 
prior budget request, we look forward in the 2019 budget to 
build on this foundation.

                           SHIPBUILDING PLAN

    There is one critical capability, though, that I do not 
want folks to lose sight of inside of the 5 year plan that we 
have laid out. That is in the past we had anticipated dropping 
down our submarine construction, our attack submarine 
construction during years of the Columbia program procurement.
    In fact, we intend to and we are laying the groundwork to 
sustain a two submarine per year procurement rate, because that 
is our number one shortfall when you look at the force 
structure assessment that was done and the updates to that in 
the CNO's white paper.
    Senator Collins. Mr. Chairman, I know my time has expired.
    I do want to put a statement in the record, with your 
permission, talking about language that we put into the omnibus 
regarding the remaining funding for procurement of a third DDG-
51 for a ``swap ship,'' as it is called. We have a specific 
directive to the Navy to expeditiously award and complete this 
destroyer as a Flight IIa ship which has both a stable design 
and a stable cost.
    I know that contract negotiations are ongoing and I look 
forward to the Navy heeding the direction from Congress.
    [The information follows:]

    The recently enacted 2017 Omnibus included the remaining funding 
for the procurement of a third DDG-51. The vast majority of the funding 
for this ``swap ship'' was provided in the previous year's 
appropriations.
    This ship is tied to the December 2015 workload reallocation 
agreement among the Navy and the two major shipyards.
    In the Omnibus' explanatory statement Congress expressed the intent 
that the Navy should expeditiously award and complete this destroyer as 
a Flight Two A (Flight IIA) ship, which has both a stable design and a 
stable cost.
    I understand that contract negotiations are ongoing, and I look 
forward to the Navy heeding the direction from Congress and this 
committee so we can get this ship into the fleet as soon as possible.

    Senator Collins. Thank you, Mr. Chairman.
    Senator Cochran. Thank you, Senator.
    The Senator from Washington, Senator Murray.
    Senator Murray. Thank you, Mr. Chairman.
    Thank you all for being here.

                  SEXUAL ASSAULT AND SEXUAL HARASSMENT

    Let me start by just following up on the issue that Senator 
Durbin raised in the event surrounding the Marines United 
Scandal. It really is so appalling and unacceptable.
    I do appreciate the steps you have taken to discipline the 
offenders, and I heard your answers in terms of what you were 
doing in terms of the investigation.
    This is shocking. The impunity with which marines were able 
to use social media to violate their colleagues is just 
absolutely unacceptable.
    I appreciate what you are doing now. I know changing the 
culture is hard. We have been hearing this forever, but this 
has been a problem for too long. It is serious. It requires 
decisive action to prevent sexual harassment and sexual 
assault.
    I wanted to ask you more. What are you doing to prevent 
sexual assault and sexual harassment?
    Secretary Stackley. I would describe that we have been on 
this campaign to prevent sexual assault and harassment for a 
large number of years. You have been involved, and have frankly 
been a good, ensuring, strong conscience over our efforts.
    But the approach is comprehensive. It starts by, one, 
ensuring everybody understands zero tolerance and what zero 
tolerance means in terms of specific behaviors. I will allow 
the CNO and the Commandant to speak specifically.
    But every step along the way from accession into the 
service and throughout their careers, it is not just a matter 
of, ``Here is the standard.'' But it is also ensuring that 
people understand their degree of accountability for the 
standard. It is the oversight effort, not just by the chain of 
command, but also by fellow members in uniform to ensure that 
those standards are upheld.
    Now what has been critical is understanding when occasions 
occur. And so we have tried to ensure that there is an 
environment there where folks who have been subject to assault 
or harassment can step forward and feel safe.
    And so, we try to create a safe haven for reporting those 
instances so that we can deal with, one, take care of the 
individual that was assaulted. And two, track down the subject, 
the perpetrator that committed the assault. And then three, 
hold them accountable in accordance with our zero tolerance and 
the standards that we have set forth.
    So I think what you find is the occurrences have been drawn 
down over time and the report of instances have gone up, which 
indicates that we are succeeding.
    Senator Murray. Yes, I have seen that and I appreciate 
that, but this scandal is just like, here we go again. I just 
want you to know, all of us to know, that this is just not 
acceptable from day one.
    What are we doing for our men and women in service to let 
them know that?
    General Neller. So Senator, let me try to make you 
understand that this is not just something we are going to work 
around and then go back to business as usual.
    Senator Murray. Right.
    General Neller. So we formed a taskforce to address this 
and that taskforce is not going to go out of business. They are 
going stay as the standing force to continue to monitor this.
    We have changed our social media policy. We now have 
recruits when anyone decides to access in the Marine Corps, if 
they make it through the accession and they are going to make 
it to boot camp, they are going to sign a piece of paper saying 
that they understand the policy and it is very clear. It is 
going to be part of the training at every point along the 
continuum of a Marine.

                  SEXUAL ASSAULT AND SEXUAL HARASSMENT

    Every Marine serving today has signed a piece of paper 
which, to them, they see as punitive, but it is not. It is 
just, ``I want you to recognize the policy that we have 
written, the changes we have made to policy. This is what the 
rules are and if you fail to abide by these rules, then you are 
going to be held accountable.''
    We had to go through a process with our commanders. Now, I 
cannot tell commanders what to do and prejudge actions if this, 
then this.
    To the question from Senator Durbin, are they all going to 
get discharged? No. They will be processed and there is a 
process to do that.
    But I think commanders now better understand that they have 
things that they can do. In fact, the one thing they cannot do 
is nothing. And so all these are changes that have taken place 
since this happened which, again, it is unfortunate.
    I was talking to a very famous team coach of the New 
Zealand All Blacks. He said, ``Why do we have to lose to 
learn?'' And unfortunately in this case, it was not a good 
experience, but I think we learned a lot and hopefully we will 
not have to go through this again to learn more.
    But as I have told everybody, this is not going to go away. 
I would like to tell you like with sexual assault, like with 
suicide, with any other things that we are going to get to 
zero, but I cannot tell you that.
    But I can tell you that we are fully committed to making 
sure that everybody understands the rules and that when you are 
dealing with a group of people, 60 percent of which are 25 
years older or younger, that they are going to understand. They 
are going to make mistakes, but they understand they also are 
going to be held accountable. And the commanders understand 
that they are critical in this process.

                          GROUND CONTAMINATION

    Senator Murray. I very much appreciate that, and I know I 
am out of time.
    I did also want to quickly ask you about--and my State has 
a great relationship with the Navy--but we do have an issue at 
Oak Harbor and Coupeville on the groundwater contamination 
issue associated with firefighting foam. I know others. This is 
going to be a longstanding thing.
    If I can get back from you how much resources you are going 
to need on that and whether we are ready for that. I would 
appreciate it.
    [The information follows:]

    The answer is provided in the Additional Committee Questions 
section.

    Senator Cochran. The distinguished Senator from Missouri, 
Senator Blunt.
    Senator Blunt. Thank you, Mr. Chairman.

                     ACCESS TO EDUCATION COUNSELORS

    Secretary Stackley, I have some questions here I may just 
have to ask for the record because we do not have much time, 
and I want to ask some other questions in addition to this.
    I think you are well aware of the fact that the Navy 
consolidated all of their education counselors to Dam Neck, 
Virginia and then they established eight regional coordinators, 
two for each of the four Navy regions in the United States.
    I have heard a number of concerning stories from schools 
that used to get a lot of referrals and would be able to deal 
directly with people serving who no longer get those referrals. 
And so their view would be that the minimal number now of 
advisors to people seeking undergraduate or graduate degrees is 
not really very familiar with all the options out there 
available to them.
    So here are a handful of questions, I am just going to give 
you for the record. One, how many sailors do you think are 
helped under the new system?
    Two, how many sailors in the previous year were enrolling 
in classes compared to what happened last year?
    How are you going to judge whether this new organizational 
structure is working or not?
    Then I guess the fourth question--I am going to leave the 
fifth one; I may submit that in writing--the fourth one would 
be are you giving considerations to shutting down the base 
education centers that are currently open?
    If you want to answer that last one here, I will let you do 
that.
    Secretary Stackley. Yes, sir. I appreciate the question. We 
will get back to you in terms of the numbers. I do not have 
those handy. In the course of this budget process, it has not 
been brought forward that we would be shutting down those 
sites. No, sir.
    I will emphasize that, one, we rely on the great technical 
skills of our sailors and Marines. The weapon systems that we 
put to war require that we have extraordinarily intelligent, 
talented individuals, and we are blessed with that.
    So our education programs in access and referral, we have 
to ensure that they are healthy and that they thrive. That we 
not just attract, but then we also can further the educational 
opportunities.
    So this is important to us. You asked how we are going to 
measure and monitor.
    Senator Blunt. Right.
    Secretary Stackley. We will get back to you.
    [The information follows:]

    The answer is provided in the Additional Committee Questions 
section.

                                 F-18S

    Senator Blunt. All right. I will be interested to see how 
you measure and monitor this. And, of course, they have 
technical skills. And, of course, all of these schools have 
places you can go.
    But why are you reducing the way you can interact with 
people who know those programs in ways beyond what you may find 
on that is something I am going to be interested. And maybe you 
are right and maybe the traditional way to do this has been 
wrong, but I would like to know how you are going to evaluate 
that.
    Admiral Richardson, I noted in the budget, of course, 
Senator Durbin and I are both always interested in the Super 
Hornets. The good news is the Navy is too.
    I noticed that you included 16 more and an additional 66 
aircraft like that of the F/A-18's. This subcommittee has been 
very supportive of the request on these planes. I have two 
questions, really.
    One, do you anticipate another unfunded priority? I have 
noticed for a long time these planes have been the top line on 
the unfunded priority list. I mentioned that to General Mattis 
that if you really want these planes, we would like to see them 
on the funded priority list rather than have to go to that 
list.
    And then, can you talk about the role that that plane, as 
well as the Growler, maybe plays in your air package?
    Admiral Richardson. Yes, sir.
    Absolutely a critical part of our fleet is our Hornet 
fleet, both the Super Hornet that you described and the 
Growlers. As you pointed out, there are a number on the funded 
priority list and the unfunded priority list is headed your way 
shortly as well.
    So we remain committed to that. We remain committed to 
extending the life of the current Super Hornet fleet and we 
also, as part of that, will be procuring more Hornets. This 
goes directly to the readiness of the force, the ability to get 
these aircraft up and forward deployed.
    With respect to the Growler, absolutely fundamental to the 
new way of warfare right now, the electromagnetic part of 
warfare right now. The Growlers are in tremendous demand. I 
would not be surprised if that even grows further as 
electromagnetic warfare becomes more and more a fundamental 
part of the way we do business.
    Senator Blunt. Thank you, Mr. Chairman.
    Senator Cochran. The time of the Senator has expired.
    The distinguished Senator from Hawaii.
    Senator Schatz. Thank you. Thank you, Mr. Chairman.
    General Neller, I want to ask you about our progress with 
the defense policy review initiative. I know Secretary Mattis 
has reaffirmed our realignment plans during his visit to Japan 
in February and I also fully support our agreement with the 
Japanese Government.

                            MARINES IN GUAM

    But I want to ask you about how this impacts your progress 
and planning? I worry that there are aspects of the current 
plan that are going to fall short, particularly when it comes 
to Guam.
    We know that sending Marines to Guam depend on our reliance 
on lift to move them around the region, and that is lift that 
we do not have. It is possible that because of ongoing issues 
at CNMI, that the Marines will not have access to a necessary 
training range to support large unit level training that they 
need to maintain readiness.
    I will just read quickly from a letter I received from 
Secretary Mattis in response to a series of questions that I 
asked him. ``We are challenged to provide adequate lift 
support, both maritime and air, to our distributed forces. We 
acknowledge the need to improve strategic lift capabilities and 
will continue to explore options to mitigate the shortfalls.''
    On the question of training facilities, something even more 
alarming because he recognizes the lift challenges and 
exploring options, but when it comes to training ranges on 
Guam, ``The completion of CJMT is not tied directly to the 
relocation of the Marine Corps units to Guam.''
    So what that means is that we recognize that there is a 
military level problem, but we sort of continue a pace for good 
reason, because of our longstanding relationship with Japan and 
a commitment that our country made to the country of Japan.
    But I wonder if you might flesh out the problem of lift and 
the problem of training areas as it manifests itself? We are no 
longer in the theoretical realm. You are now spending money on 
Guam. You are now in the process of relocating at least some 
Marines from Okinawa.
    How do we maintain our commitment to Japan, but still do 
this in a smart way, General Neller?
    General Neller. Well, Senator that is a real complicated 
question, but let me give it a shot.
    So we are currently on plan for the Japanese Government to 
build the Futenma Replacement Facility in the northern part of 
Okinawa. We are still on plan to have Marines go to Guam.
    The situation strategically, operationally as we have seen 
in the news recently has changed. The capabilities and the 
adversaries have changed the dynamic there.
    So the bottom line is somebody is going to go to Guam. The 
Marines are going to go to Guam. We are going to reduce the 
number on Okinawa because that is a political imperative and we 
have made that agreement with the Japanese Government.
    But the Marine Corps has always said that wherever we go, 
we have to be able to train and maintain the readiness of the 
force that is there.
    There are still some environmental issues, not just on 
Guam, but on Tinian and other islands that have not been 
adjudicated yet. We should know later on this year. Some of the 
money we are continuing, we are spending just basic 
infrastructure because we do know that there are going to be 
forces on Guam because we have to reposition the force to meet 
the political imperative.
    That said, I think the Pacific Commander, Admiral Harris, 
has looked at different options for where they might, at least 
temporarily, base aircraft because of the threat and the 
evolving treat. And so the discussions that we have had with 
the Secretary and the Joint staff, we are at the very beginning 
of taking a look at this. But for the time being, we are 
committed to the plan.
    But your concerns, I share your concerns about being able 
to move the force, be operationally relevant, make sure the 
force is safe, and is not at-risk, and it also is able to 
train.

                            MARINES IN GUAM

    Senator Schatz. What happens if CNMI does not work?
    General Neller. For us, then that would be a problem 
because the forces that right now are scheduled to go to Guam 
require that they be able to maintain at least a rudimentary 
level of readiness, training readiness. And I think that that 
would cause us to have to go back and say all right.
    We are going to fulfill our commitments to Japan. We want 
to get out of Futenma. The Japanese want us out of Futenma. We 
build a Futenma Replacement Facility. There are other places 
that we could go to train. There are other options and I think 
it would be appropriate at that time if all that comes to pass 
that we consider taking a look at those options.
    Senator Schatz. You know this, General Neller, but just to 
point out that the Futenma Replacement Facility is no slam dunk 
because there are environmental, and political, and community 
issues on Okinawa. And so, all of this remains complicated.
    I am not criticizing you for trying to manage this 
situation. But just to make sure that the Office of the 
Secretary, and the State Department, and the White House 
understand that this is a complex situation.
    But to the extent that we are implementing a plan that was 
developed over the last decade, we may need to be quicker in 
making adjustments to make this work for the Marine Corps and 
the Navy.
    Thank you.
    Senator Cochran. The time of the Senator has expired.
    The distinguished Senator from Montana, Senator Daines.
    Senator Daines. Thank you, Mr. Chairman.
    And gentlemen, thank you for your service to our country 
and for appearing before this committee today.

                            MISSILE DEFENSE

    The Navy and Marine Corps team is one of our Nation's most 
visible means of projecting power across the globe and 
promoting peace from a position of true strength.
    In fact, just last month, when the USS Barry showed the 
world that America is not bluffing when it draws a red line. 
For those to the East, the arrival of the second carrier group 
in the vicinity of the Korean peninsula was not lost on our 
adversaries or our allies as well.
    I am a son of a Marine rifleman. It is my observation that 
today's Marines are cut from the same cloth as the yellow legs 
who landed in Chung, held the Pusan Perimeter, and pushed the 
North Korean Peoples' army all the way to Chosin Reservoir. I 
daresay this has been the observation of the North Korean 
leadership as well.
    But today, the readiness of our equipment reflects 16 years 
of sustained operations abroad, as you pointed out in your 
testimony. I continue to support the Administration's efforts 
to restore our forces to the highest level of military 
readiness.
    This past week, North Korea conducted two missile tests, 
which it claims demonstrates the country's ability to reach 
Japan and U.S. military installations in the region. This 
raises the immediate question of whether our missile defenses 
can adequately respond to an attack if one were to occur.

                STRATEGIC DETERRENCE AND MISSILE DEFENSE

    But coming from Montana, where the 341st Missile Wing keeps 
one-third of our Nation's ICBMs ready at all times, I would 
like to consider how deterrence factors into our national and 
our regional strategy to discourage North Korea from launching 
an attack at all.
    Admiral Richardson, given the Navy's complementary roles in 
both missile defense and nuclear deterrence, how does the 
nuclear triad factor into our overall strategy in the region?
    Admiral Richardson. Senator, the nuclear triad, all three 
legs working together is absolutely existential to our 
situation going forward. If we did not have that secure and 
effective triad, we would be having a much different 
conversation than we are having right now. It would be far more 
severe.
    That is why the Columbia-class submarine is our number one 
modernization priority to maintain the undersea leg of that 
triad. But that only works in conjunction with the other two 
legs of the triad as well.
    That in combination with missile defense activities run by 
Admiral Syring and executed by the Joint Force really working 
together, we think has got to put some serious considerations 
in the mind of any leader who would threaten us with that type 
of missile technology, a missile attack.

                  ASIA PACIFIC AREA OF RESPONSIBILITY

    Senator Daines. I want to stay in the Asia-Pacific realm 
here for a moment.
    Last February, President Trump and Prime Minister Abe 
called on countries with interests in the Asia-Pacific region 
to avoid actions that would escalate tensions in the South 
China Sea.
    I just returned from leading a delegation to both China and 
Japan, and I share the President's view that further 
militarization in the South China Sea is not in the best 
interests of the region.
    Admiral Richardson, what progress has been made to decrease 
tensions in the Asia-Pacific region through naval operations in 
the South China Sea, Navy to Navy relations with U.S. allies 
and partners, and interactions with your Chinese counterpart?
    Admiral Richardson. We do regular interactions and I 
appreciate the fact that you take a regional perspective there 
because it is not just a bilateral thing between the United 
States and China in that region.
    I just came back from Singapore where they celebrated the 
50th Anniversary of the Republic of Singapore Navy. They had 
about 30 Chiefs of Navy from that region around there.
    When you bring that group together, particularly the Chiefs 
of Navy in that region, they are talking about the importance 
of a rules-based structure down there that allows prosperity 
and trade for everybody in the region to occur on a level 
playing field. And that to the degree that militaries are 
involved, it is really to support and advocate for that rules-
based structure that allows trade and prosperity. And so, this 
is the convention of the Law of the Sea and all those sorts of 
structures that allow us to do that.
    The United States is a Pacific Nation as well. We have been 
present there in the South China Sea, I would say in a non-
provocative way, for decades. And we are going to continue to 
be there as well to protect our interests in the region, the 
interests of our partners and allies there.
    Senator Daines. Thank you, Admiral. Mr. Chairman.
    Senator Cochran. The time of the Senator has expired.
    The distinguished Senator from South Carolina, Senator 
Graham.
    Senator Graham. Thank you, Mr. Chairman.

                CONTINUING RESOLUTIONS AND SEQUESTRATION

    Admiral, are CR's bad for the Navy?
    Admiral Richardson. Yes, sir.
    Senator Graham. The Marine Corps?
    General Neller. Yes, sir. They are.
    Senator Graham. As of April 20, 2016 is it accurate that of 
the 276 F/A-18 Hornets, only 87 were flyable; 31 percent?
    Secretary Stackley. Senator, that sounds about right. The 
exact numbers go day by day.
    General Neller. Yes, the numbers go day by day.
    Senator Graham. Okay.
    General Neller. We are seeing slight improvements, but we 
are not where we want to be.
    Senator Graham. Well, this budget is trying to address 
that. Right?
    Secretary Stackley. It is, yes.
    General Neller. It is.
    Senator Graham. Okay. Marine Corps. The CH-53E Super 
Stallion, 28.5 percent were ready for operations on April 20, 
2016. Does that sound right?
    General Neller. Somewhere in there. It is improving. We 
have a reset, but the 53 is an old airplane and needs to be 
replaced.
    Senator Graham. February 7, 2016, 53 percent of all naval 
aircraft could not fly before the Omni passed. Is that true, 
Admiral?
    Admiral Richardson. Yes, sir.
    Senator Graham. Sixty-two percent of the F/A-18's were out 
of service.
    Admiral Richardson. That is about right. Yes, sir.
    Senator Graham. Who did this?
    Admiral Richardson. Well, it is a combination of----
    Senator Graham. Would you say the Congress did this?
    Admiral Richardson. It was a team.
    Senator Graham. I mean, we shot down more planes than 
anybody else because of our budget, because of sequestration, 
the CR's.
    Is that a fair criticism of the Congress?
    Admiral Richardson. The CR's and sequestration have not 
helped maintain our readiness.
    Senator Graham. Well, I would say that we are responsible 
for this, not you.
    Does sequestration kick back in this year under the Budget 
Control Act? Does it?
    Admiral Richardson. It does.
    Senator Graham. Secretary of the Navy.
    Secretary Stackley. Yes, it does.
    Senator Graham. What would that mean to the Navy and the 
Marine Corps?
    Secretary Stackley. Well, across the board, we would be 
going backwards in terms of the readiness that we are trying to 
restore in the 2017 and the 2018 budgets. And so, ships and 
aircraft that are operating today, ships would be tied up to 
the pier.
    Senator Graham. Do you see a fast way forward for this 
budget submitted by the President to pass?
    Secretary Stackley. Well, the----
    Senator Graham. I do not, so that is probably a question 
for me. I do not.
    So if this budget does not pass, what we are going to do? 
What are you going to tell the Navy and Marine Corps about 
sequestration if it kicks back in? What are you going to tell 
the Marines, General?
    General Neller. I am going to tell them that the force is 
forward deployed as we are going to be as ready as we can make 
them. It will be much harder back at home. We are probably not 
going to be able to do the training and maintain the gear that 
we need to maintain, and our modernization will be delayed.
    Senator Graham. Do you think morale will go down when they 
hear that?
    General Neller. I do.

                CONTINUING RESOLUTIONS AND SEQUESTRATION

    Senator Graham. What about the Navy?
    Admiral Richardson. The same, sir.
    Senator Graham. Do you see a plan to fix this? I mean, I do 
not. I am in Congress and I do not see one.
    What are we going to do about the fact that the law of the 
land is sequestration? The budget proposed by the President 
does not have a snowball's chance in hell of passing.
    I think it is incumbent upon us to help you better than we 
are doing. Let us buy back sequestration. Let us have a Super 
Committee 2, which was unacceptable to me. It is for the 
Congress to create this problem year in and year out with CR's. 
Those sequestrations on top of it give you temporary relief. 
Here we are in fiscal year 2018 when the threats to the country 
are greater.
    Do you agree they are greater in fiscal year 2018 than they 
were in fiscal year 2010?
    Secretary Stackley. Yes, sir.
    Senator Graham. Do you agree with that from the Marine's 
point of view?
    General Neller. I do and it is not getting any better, sir.
    Senator Graham. So we are appropriators. There seems to be, 
and I think we all owe it. I am a little preachy here, but that 
is okay. It is my time.
    I think we all owe it to these men and women to give them a 
little better certainty in what is going to happen in their 
lives. To improve the equipment, not retrograde it. To 
modernize the force, not keep it up with duct tape.
    So Mr. Chairman, and the ranking member, right now in May 
there is no plan to fix sequestration. There is not a 
bipartisan effort. There is not a sole party effort to relieve 
the suffering that we have created for the men and women who 
serve from insane budget cuts at a time of great threat.

                               SOFT POWER

    Soft power, Admiral Richardson. General Mattis when he was 
the Four Star Marine General said famously, ``If you cut the 
State Department's budget, you better buy me ammo,'' more ammo. 
Do you agree with that from a Navy perspective?
    Admiral Richardson. Sir, it is a full national team effort. 
There is a balance.
    Senator Graham. Do you believe that soft power is 
instrumental in winning the war on terrorism?
    Admiral Richardson. There is a role for soft power.
    Senator Graham. General, what do you say?
    General Neller. Absolutely.
    Senator Graham. Do you realize that the State Department's 
budget is cut by 29 percent? Do you see a situation in the 
world that is so much better that you could justify a 29 
percent cut in soft power from a military perspective, Admiral?
    Admiral Richardson. Sir, soft power is power.
    Senator Graham. The threats are greater. What about you, 
General?
    General Neller. We are only going to get them with a 
military capability to a certain point. There has got to be a 
political solution and that is where the State Department comes 
in.
    Senator Graham. Thank you all.
    Senator Cochran. The time of the Senator has expired. The 
distinguished Senator from Alaska, Senator Murkowski.
    Senator Murkowski. Thank you, Mr. Chairman.

                         EXERCISE NORTHERN EDGE

    I appreciate the line of inquiry from my colleague from 
South Carolina and the very direct responses.
    Admiral, I want to take the conversation back to one that 
you and I had by phone a week or so ago about the training 
exercise up in the Gulf of Alaska. As we discussed, there was 
community concern about the timing of that exercise coming in 
early May just as fishing season is coming on as well as the 
proximity to those high value fish openings.
    The community officials emphasized to me quite clearly that 
they are very pro-military, but that they felt that the Navy 
was not hearing, perhaps, some of their concerns. I do 
appreciate that there is consideration being given to my 
request and theirs that these future exercises be moved to the 
fall. There are also some in the communities that remain 
skeptical about whether the Navy is using the best science in 
evaluating fishery's impacts.
    So I would like you to just place on the record here this 
morning your view of whether or not the Navy requires a social 
contract with the local communities to conduct exercises in the 
waters that provide their livelihoods.
    Where do you think the Navy is going with respect to 
Northern Edge and what the Navy plans to do with respect to 
future community engagement?
    Admiral Richardson. Ma'am, thanks for that question.
    And also, I want to just highlight how grateful we are for 
the support of the communities in Alaska for the United States 
Navy training in the Gulf of Alaska.
    Senator Murkowski. And you know that that is real. So thank 
you for saying that.
    Admiral Richardson. It is completely real and our ship 
visits there showed that. They turned out with just effusive 
warmth.
    We did, leading up to that exercise, do a number of 
community engagements as you and I discussed. But as we also 
discussed that clearly left some itch unscratched. There is 
something that we still have to address.
    To really achieve that, I would say a bond of trust and 
confidence with the community that we are, one, sincerely 
considering their concerns. And two, are dedicated to bringing 
all the science and technology, all of the environmental 
research to bear to make sure that we look at the same things 
and see them the same with respect to going forward.
    And so, we are very mindful of your request to take a look 
at the scheduling of that exercise in the future to de-
conflict. We are going to give that very serious consideration.
    We are also, as we discussed, going to roll in after the 
exercise to do some community engagement, to make sure that we 
fully understand that the exercise went as well as it could 
this last version. And maintain an engagement between exercises 
to build that habitual relationship that will allow us to do 
this in a way that everybody sees it as a win.
    Senator Murkowski. Well, I appreciate that. I think the 
engagement will be appreciated, but also the transparency with 
these community conversations and the fact that they will be 
ongoing.

                              ICEBREAKERS

    I want to speak about icebreakers. I do recognize and thank 
the efforts of the Navy in partnership with the Coast Guard to 
accelerate the design and construction of Polar icebreakers. As 
you know, we call it an aging fleet. In my mind, one Polar 
icebreaker does not constitute a fleet here. So we have some 
work to do.
    The Coast Guard's fiscal year 2018 budget request has $19 
million for the icebreaker program. It does not appear that the 
Navy has requested any funding for this very important program.
    So the questions for you this morning is just speak to the 
progress and the status of icebreaker. And then, as we develop 
the fiscal year 2018 budget, what funding is needed to keep the 
program on its accelerated path?
    Admiral Richardson. Yes, ma'am.
    You have highlighted the importance of the Arctic. Always 
important, but even more so as climate change opens up regions 
of the Arctic that are being exploited by a number of nations 
around the world.
    As you also pointed out, ma'am, this is primarily--the 
icebreaking mission--is a Coast Guard mission. We are bringing 
to bear all of our expertise and advice that we can to work 
with the Coast Guard. We have a formal Memorandum of 
Understanding. We have an integrated program office working 
with them to advise them in terms of how to get this capability 
reconstituted.
    Senator Murkowski. And you would agree that there are 
clearly advantages to be had by block-buying icebreakers as 
opposed to buying each vessel individually. We know these are 
expensive, so figuring out those efficiencies is going to be 
key.
    Admiral Richardson. Ma'am, from my experience in 
shipbuilding, when you can commit to a number of ships, that 
allows the industrial base to level load work, to buy material 
at an optimum price, to really do this efficiently and on the 
order of 10 to 15 percent more efficiently than if you do it 
year by year.
    Senator Murkowski. Well, thank you, Mr. Chairman.
    Senator Cochran. Thank you. The time of the Senator has 
expired.
    The distinguished Senator from Kansas, Senator Moran.
    Senator Moran. Mr. Chairman, thank you very much.
    Gentlemen, thank you for joining us.
    First of all, Chief, thank you very much for the 
conversation you and I had with a young man in Topeka, Kansas 
when we were together at the Reagan Defense Forum. You 
indicated to him that he had been accepted to the United States 
Naval Academy. Thank you for participating in that call and it 
highlights for me this issue of readiness as there are young 
Kansans, young Americans who are entering a career in our 
Services.

                   PHYSIOLOGICAL EPISODES IN AIRCRAFT

    The responsibilities that we have as outlined by Senator 
Graham, responsibilities that you have are tremendous to make 
certain that they have the necessary equipment, and training, 
and prepared for the missions that we ask them to pursue.
    Let me first begin with the Secretary. Mr. Secretary, the 
Navy recently grounded the T-45's training aircraft fleet.
    Can you bring me up-to-date, bring us up to date on what 
has transpired since then and how the issue is being corrected?
    Secretary Stackley. Yes, sir. I will give you a quick 
update, and the CNO and Commandant might want to provide their 
perspective as well.
    The issues that brought the T-45, that resulted in the 
operational pause, as we described it, for the T-45 is 
associated with the environmental control system on the 
aircraft, and specifically a system called On Board Oxygen 
Generating System. That if you have contaminants in that 
system, it could lead to a condition called hypoxia where the 
pilots would get disoriented.
    And so this is a low occurrence issue, but it is a number 
one concern in terms of naval aviation safety. So with the T-45 
fleet, the rate of occurrence of this issue started spiking in 
the February timeframe. And it went from, while the numbers 
were still relatively low, the trend was alarming.
    And so we grounded the aircraft while we brought our 
technical community to bear. We brought our medical community 
to bear. We brought industry to bear. We brought outside 
experts to bear to understand what are the causes, and what do 
we need to do in terms of changing the design and configuration 
in the aircraft so that we have absolute confidence in its safe 
operation?
    But also in terms of training the pilots when they are 
operating, putting certain restrictions in place that would 
reduce the likelihood of this occurrence while you are 
training. And then also to educate, to train and educate the 
instructors and the pilots on the condition, what we are 
dealing with, the changes that we are implementing.
    So right now, we are getting back to the air in a very 
measured fashion so we can return to training at the high rate 
that we need to as we walk the paces in this remediation type 
of program.
    It is not going to be a quick and immediate fix. So what we 
need to do is control the conditions so that we are, at the 
same time, limiting, reducing any safety impacts or any risks 
to our pilots. Not just people we advise, but frankly, also in 
service with the F/A-18's.
    Senator Moran. Before you defer to the Admiral, if they 
would like to respond in writing, I would appreciate it because 
I want to ask a second question.
    [The information follows:]

    I would like to add that as we continue to assess potential root 
cause, we, in parallel, are focused on implementation of air crew 
alerting and protection devices and systems so that we can resume 
student training in the T-45 just as soon as possible, but keeping in 
mind that safety is the number one priority.

                        WICHITA STATE UNIVERSITY

    Senator Moran. I want to raise something that is so 
important on readiness and I think the Navy in particular is 
missing an opportunity that we want to raise with you.
    This subcommittee has provided additional funding in recent 
years dedicated to maintaining naval air fleet readiness; in 
particular, partnering with universities that have the capacity 
to fulfill immediate readiness demands and to do the work at a 
fraction of the cost.
    Admiral and General, what concerns me is that this will 
happen yet again. And by that, I mean the Navy has not invested 
in the opportunity to partner with universities in solving its 
readiness problems.
    The Navy can, I quote, ``Correct its limitations by 
investing taxpayer dollars,'' wasting precious time when you 
already have the capacity, the capabilities at your disposal. 
Universities that have engineers, physical space, innovative 
tools, and an abundance of materials to support your readiness 
and capacity problems.
    This has a home component. I bring this up because they are 
so good at what they do, and yet they are not being utilized to 
the degree that they can.
    I brought this to your attention about Wichita State when 
we were together at the Reagan Defense Forum. What I am looking 
for is that you will utilize the funds that this subcommittee 
has appropriated for you in partnering with universities who 
have that capacity and to help deliver the services that the 
Navy needs sooner rather than later.
    Admiral Richardson. Sir, as the Secretary pointed out, we 
are looking for anybody who has an ability to help us get 
through this very vexing problem.
    And so, you have my commitment that we will overturn every 
stone that we can.
    Senator Moran. I would just say, Admiral, I am not sure 
that has happened to date and I would encourage you to 
personally take a look. We would be glad to have a more lengthy 
discussion about the opportunities that we see available to the 
Navy.
    Admiral Richardson. I look forward to that, sir.
    Senator Moran. Thank you, sir.
    Admiral Richardson. Yes, sir.
    Senator Shelby [presiding]. Senator Baldwin.
    Senator Baldwin. Thank you, Mr. Chairman.

                  LITTORAL COMBAT SHIP INDUSTRIAL BASE

    Secretary Stackley, when you and I last spoke, we were 
discussing the Navy's transition from the LCS to the frigate. 
And you noted the importance of avoiding a production gap and 
layoffs at the Littoral Combat Ship shipyards during this 
transition.
    You have also testified to the importance of preserving 
shipbuilding jobs, noting that a failure to do so will 
ultimately harm the American taxpayer, and the U.S. Navy in the 
form of increased costs, extreme delays, and decreased quality.
    Talking about the Littoral Combat Ship program in December 
at a hearing, you stated, and I quote, ``If production drops to 
an unsustainable level, then those facilities are going to 
ultimately shutter.'' I believe that one Littoral Combat Ship 
in fiscal year 2018 will result in that unsustainable level.
    You were recorded in a recent U.S. Naval Institute news 
article saying that, again I quote, ``The day we award that 
last ship, you are going to start laying off people. And you 
are going to lay them off until they are gone. And if you are 
going to stop production and build another ship, you have lost 
your skilled labor and you have got to rebuild it.''
    President Trump's request of just one Littoral Combat Ship 
in fiscal year 2018 will create this exact worst case scenario: 
job losses and damage to our industrial base, harming our 
national security and taxpayers.
    Both LCS shipyards are optimized for three ships per year. 
Earlier this month, Admiral Neagley, the Program Executive 
Officer for the LCS testified, and I quote, ``We think about 
three ships a year is the right number to maintain the 
workforce and to leverage the efficiencies from the investments 
in those yards.''
    So just one LCS in fiscal year 2018 could result in 800 job 
losses at Marinette Marine in my home State of Wisconsin, and 
nearly 2,000 jobs across the State, devastating the yard's 
ability to compete for the frigate.
    I wrote to President Trump warning him of this result and 
urging him to fund three LCS ships in fiscal year 2018.
    I would ask for unanimous consent to enter that letter in 
the record.
    Senator Shelby. You have.
    [The letter follows:]

    
    
    
    

    Senator Baldwin. I would like to express my strong 
objection to President Trump's decision to cut the LCS program 
and put Wisconsin shipbuilding, and its skilled workers, and 
their families at great risk.
    But my questions for you, Secretary Stackley, are, number 
one, what do you mean when you say in your testimony that one 
LCS ship in fiscal year 2018 will, ``Ensure continued 
production at both shipyards''?
    Number two, what does continued production look like in 
this case? Because I see a lot of skilled Wisconsin workers 
that will be out of work.
    And three, how do you reconcile your earlier statements 
with the harmful consequences that will come from the 
President's budget request for only one Littoral Combat Ship?
    Secretary Stackley. Yes, ma'am.
    Let me go back to my opening remarks and walk through. 
Just, first, I stand by every statement that you just quoted in 
the past. The health and welfare of our industrial base is 
critical and central to our ability to build the fleet that we 
need going forward.
    The challenges that we have in 2018, our number one 
priority has been, and we have been emphatic about this, to 
restore our readiness. Not to do it at the cost of procurement 
and modernization, but in 2018 budget-wise, we do not have the 
capacity to grow in terms of procurement and modernization. 
That becomes a 2019 budget issue that we have to deal with 
through the strategic defense strategy review.

                  LITTORAL COMBAT SHIP INDUSTRIAL BASE

    One LCS in 2018 only makes sense when you combine that one 
ship with the three ships in 2017. So that across the two 
builders, they are each going to get at least a one ship per 
year rate, which is below the optimal. Which was the three 
across the two builders during that period of time, three each 
year. It is below the optimal, but it does meet a minimum 
sustaining.
    Today across the program, the two builders have completed 
ten LCS's, effectively completed ten LCS's. With the 2018 
budget request that brings the total program up to 30 LCS's, 
which means that there are 20 ships in the backlog across those 
two shipbuilders.
    So what we have got to do is work that ten ships per 
shipbuilder backlog and mitigate any impact in 2018 while we 
revisit 2019 and understand what the industrial base needs.
    I will be clear that the one ship in 2018 is below the 
optimal. Absolutely, ma'am, and we are concerned with every 
loss of skilled labor that we run into in these types of 
circumstances. But we have to balance that against the other 
priorities in the budget associated with restoring our 
readiness.
    So we were not able to grow the capacity in 2018. We need 
to come back and revisit that in 2019 and we need to leverage 
the opportunity that you all provided with the additional ship 
in 2017. So across the whole, as best as possible, we retain 
stability in the shipbuilding industrial base.
    We do not want to lose sight of a potential of the foreign 
military sales potential that is coming through with Saudi 
Arabia and their potential LOA associated with the multi-
mission surface combatant that we hope to bring across the line 
in this timeframe.
    Senator Cochran [presiding]. The time of the Senator has 
expired.
    The distinguished Senator from Kansas, Senator Moran.
    Senator Moran. Mr. Chairman, thank you for allowing me a 
second round. I want to go to General Neller.
    General Neller, I want to follow up on the conversation 
that I and the Admiral had. I want to talk about F/A-18's. The 
budget requests $3.4 billion for maintenance to ready the force 
and funding readiness accounts to the maximum.
    General Neller, you said in February, and I quote, ``None 
of this is going to happen overnight. Even if you had the 
funding to increase the acquisition of airplanes or even if you 
had the money to increase the throughput through Fleet 
Readiness Centers.'' I again want to highlight an opportunity 
that the Marines and Navy have.

                        WICHITA STATE UNIVERSITY

    Wichita State University, they have the largest university-
affiliated structural testing facility in the world and the 
only internationally recognized resource for material 
certification, which allows faster material development and 
qualifications for the military.
    And so, General, I want to hear from you that your 
understanding of that availability of universities to be of 
assistance to the Marine Corps. Your readiness circumstances 
may be more dire than even the Navy.
    How do I make certain that I have the Marine Corps' 
attention in this opportunity that exists?
    General Neller. Senator, I have talked with your fellow 
Senator, Senator Roberts, about Wichita State. So I am aware of 
the aviation facility or capabilities in a rudimentary level.
    What they can or cannot do to help us do in-service repair 
or help us with fixing airplanes, I do not know. But based on 
what you have told me today, I give you my word that I will go 
down and investigate that, and I will send somebody down there 
to find out what is within the realm of possibility.
    Part of the problem that we have is if I look at F/A-18's 
today, the greatest down for legacy aircraft is their short 
supply. So I do not believe, unless Wichita State is a source 
of supply, that that is going to be able to help me.
    But if there are issues with in-service repair or they have 
people that are qualified engineers that can look at a repair 
that needs to be made. If they can help with that repair, they 
would have to get certified through NAVAIR because we work 
through them because they are the ones that certify people to 
do these repairs.
    There are three types of things on legacy aircraft. Either 
we cannot fix it or we do not have the artisan to fix it. We 
need a part to fix it or there is something that we have to 
have a certified engineer to look at. And that may be where 
Wichita State might be able to help us with that.
    And so, I was not aware when I talked with Senator Roberts, 
we talked about it in a different context. I was not aware 
there was actually funding involved in this. But I assure you, 
sir, that now that you have made me aware of this, I will get 
some direct attention on this to better understand what the 
capability is.
    Senator Moran. Thank you, again. I think that is exactly 
the capabilities that are offered, and I think the funding that 
has been made available has not been utilized in that way.
    I needed to get this to your attention and to the Admiral's 
attention, and I appreciate the opportunity to do so.
    Thank you, Mr. Chairman.
    Senator Cochran. The Senator from Wisconsin.
    Senator Baldwin. Thank you, Mr. Chairman.

                JOINT LIGHT TACTICAL VEHICLE PROCUREMENT

    General Neller, can you please explain why the Marine 
Corps' fiscal year 2018 budget request includes funding for 
approximately half the total number of JLTV's that were planned 
as part of last year's request? What is the significance of the 
JLTV in the Marine Corps' modernization strategy? And should we 
read anything into this reduction in the fiscal year 2018 buy?
    General Neller. Well first, Senator, the JLTV and the 
acquisition objective, right now, is 5,500 and I would like to 
buy more because really we need to recapitalize the HMMWV's of 
various model type series that we have, HMMWV A2's, the up-
armored HMMWV. They are old. They need to be replaced.
    So my understanding is that we are continuing to work and 
to go forward as fast as we can with the funding because it is 
critical for us to recapitalize this part of our ground 
vehicles. So I would not read anything into that.
    In the past, there were always trades in the budget. Some 
things have a higher priority. The recapitalization of our 
ground vehicles has my full attention. I think we are trying to 
buy as many as we can with the resources we have available.

                          ACQUISITION STRATEGY

    Senator Baldwin. Secretary Stackley, since we last spoke, 
the Navy has changed its acquisition strategy for the frigate, 
delaying the first procurement to fiscal year 2020 and really 
expanding the requirement process.
    Can you explain the rationale for this change and what is 
the way ahead, particularly in terms of requirements?
    Secretary Stackley. Let me start and I am going to hand off 
part of this to the CNO.
    The bottom line is when we established the requirements for 
the frigate in the 2014 timeframe, it was based on a certain 
assessment in terms of the multi-mission capability that we 
would be able to deliver with that frigate design.
    The security environment has changed. The CNO will talk 
about his assessment that drives towards greater multi-mission 
capability. So we need to add a design window to bring that 
additional capability to the frigate design. That effectively 
delays the procurement 1 year and that gives us another 
challenge in 2019 to ensure that we hold on to the industrial 
base during this 1 year period.
    Admiral Richardson. With respect to the requirements, ma'am 
that is kind of our business. I would say three things, 
significant things that have changed since we even approached 
the frigate requirements originally.
    One is the threat environment is moving very quickly, as I 
said in my opening remarks. Exponential is the word that 
describes the pace of change. And so, we need to address that 
change in the threat as we redesign and re-craft the 
requirements for this frigate.
    The fiscal environment has changed. And so, we need to make 
sure that we are finding that optimum cost for that platform. 
Not being too over-constrained that will drive necessary 
capability out, but neither do we want it to run high and then 
become unaffordable. And so that cost point, finding that knee 
of the curve is going to be critical.
    And finally, the way we operate is changing. The way the 
U.S. Navy operates in terms of networking this frigate into the 
larger fleet, executing distributed maritime operations. That 
has changed as well.
    So the combination of those three things really 
necessitated that we go back to the drawing board and make sure 
we have not missed an opportunity to put to sea a ship that 
will address today's threats and be modernizing into the 
future.
    Senator Baldwin. Thank you.

                     ADDITIONAL COMMITTEE QUESTIONS

    Senator Cochran. Are there other questions of the panel?
    If not, let me thank you as a panel for your cooperation 
and assistance in this hearing.
    We want Senators to know they can submit additional written 
questions for the witnesses. We would request you respond to 
them in a reasonable time.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]
              Questions Submitted to Hon. Sean J. Stackley
                Questions Submitted by Senator Roy Blunt
                        education opportunities
    Question. Secretary Stackley, the Navy recently reorganized how 
they support sailors who are working to complete their undergraduate 
and graduate degrees.
    As you know, the Navy consolidated all their education counselors 
to Dam Neck, Virginia, and then established eight regional 
coordinators, two for each of the four Navy regions in the United 
States.
    We have heard concerning stories that referrals to schools like 
Webster University have dropped significantly since the change went 
into effect.
    I am particularly interested in knowing how many sailors were 
helped under the new system.
    How many were helped the year prior to the new system?
    How are you judging the outcomes of this reorganization?
    Is the Navy planning or considering shutting down its base 
education centers?
    I would like you to get back to me with information on how this 
change has potentially limited educational offerings for our service 
members.
    Answer. Through May 30, 2017, Navy has provided courses for 34,524 
Sailors in fiscal year 2017. In fiscal year 2016, Navy provided courses 
for 46,091 Sailors.
    Outcomes on the organization will be based on tuition assistance 
average usage statistics over the previous 6 years (e.g., total tuition 
assistance funds executed; course enrollments, participation, new 
users, success rate, degrees earned, etc.).
    The following Navy College Offices have been closed since October 
1, 2016:

Bethesda, MD                    Charleston,   Coronado, CA  Corpus
                                 SC                          Christi, TX
Everett, WA                     Fallon, NV    Great Lakes,  Gulfport, MS
                                               IL
Kings Bay, GA                   Lemoore, VA   Little        Millington,
                                               Creek, VA     TN
New London, CT                  Pensacola,    Ventura       Whidbey
                                 FL            County, CA    Island, WA
 

    The following Navy College Offices will close on September 30, 
2017:

Jacksonville, FL                Kitsap, WA    Norfolk, VA   San Diego,
                                                             CA
 

    Experience to-date suggests that this change has not limited 
education offerings for Sailors. In fact, this new approach, which 
leverages networking tools Sailors use every day, has made counseling 
and tuition assistance more accessible across the continental United 
States, including at installations and reserve centers that did not 
previously host a Navy College Office. Through a combination of virtual 
services, Sailors access the information they need at their 
convenience, consistent with their needs, without the working-hour 
limitations imposed by traditional brick-and-mortar Navy College 
Offices. Whether in the field, or at the Navy College Virtual Education 
Center, counselors do not refer Sailors to specific academic 
institutions, but focus counseling on education options, opportunities, 
available programs, and assisting the Sailor in deciding what 
institutions best meet his or her goals. With the newly redesigned Navy 
College Program website, new Mobile Application and incorporation of 
web chat, electronic-help requests, and the ability to self-schedule 
counseling, we have seen an increase in the number of Sailors using 
these virtual tools, and in the phone call and email volume at the Navy 
College Virtual Education Center.
                                 ______
                                 
              Questions Submitted by Senator Patty Murray
 ``investigation and remediation: perfluorooctane sulfonate (pfos) and 
       perfluorooctanoic acid (pfoa) in drinking water sources''
    Question. Secretary Stackley, Washington has enjoyed a strong 
relationship with the Navy for more than a century and our communities 
are good at working through issues with the Navy as they arise.
    Recently the communities of Oak Harbor and Coupeville were made 
aware of ground water contamination associated with firefighting foam 
used at Naval Air Station Whidbey Island and Outlying Field Coupeville.
    Oak Harbor, Coupeville, other communities in Washington State, and 
communities around the country will be dealing with this groundwater 
contamination for years to come and I am worried there are not enough 
resources allocated to this problem.
    Does the Department of the Navy have the resources to take care of 
every affected community and clean up all contamination?
    Answer. Yes. The Department of the Navy (DON) has made responding 
to known or suspected releases of PFOA and PFOS, especially where they 
potentially impact drinking water, a high priority under the Defense 
Environmental Restoration Program (DERP). DON has spent $45 million 
conducting investigations or other response actions at 47 active or 
closed installations. We have the resources to continue our proactive 
national response to these emerging contaminants under DERP.
    Although the Environmental Protection Agency (EPA) has not 
regulated these chemicals, DON shares your commitment to the protection 
of human health from these emergent contaminants in affected 
communities in Washington State and around the country. DON would 
support EPA consideration of promulgated national drinking water 
standards for PFOA/PFOS under the Safe Drinking Water Act regulatory 
process, which is a well-established, formal and transparent process 
that involves all stakeholders including the public.
                                 ______
                                 
               Questions Submitted by Senator Jon Tester
                           size of the fleet
    Question. Today's fleet stands at 275 ships, an increase from the 
271 ships in 2015, but nowhere near the post-World War II era of 
approximately 740 ships. The Navy is scheduled in the next decade or so 
to take delivery of 80 new ships. Over the same period, the Navy has 
scheduled 49 ships for decommissioning. These numbers give the Navy a 
net increase of just 31 ships. That number is still 44 ships short of 
the president's requirement of 350 warships.
    What is the Navy's plan to reach the president's 350 warship 
requirement or the Navy's requirement of 355 warships in a reasonable 
amount of time?
    What is the Navy doing to prepare for all of the additional support 
and costs associated with a larger fleet?
    Answer. Consistent with the Secretary of Defense's three-phase 
campaign, the Navy is first restoring readiness and addressing pressing 
shortfalls in fiscal year 2017-2018, in order to build a strong 
foundation for growing a larger, more capable, more lethal force 
starting in fiscal year 2019. This will ensure today's Navy is fully 
ready and that our 275 ships are properly maintained to reach the end 
of their service life. Informed by the National Defense Strategy, the 
fiscal year 2019 budget will prioritize building a larger force. 
Increasing Naval Power is contingent upon stable and increased funding 
above the current Budget Control Act defense spending caps.
    The Navy is exploring all options to increase our inventory of 
ships faster, including identifying hot production lines that can 
easily be expanded, assessing options for extending the service life of 
current ships, and reactivating retired ships. The Navy is also 
engaging shipbuilders and suppliers on ways to increase shipbuilding 
capacity. The Navy will continue to pursue multi-year procurements, 
block buy contracts, and economic order quantity buys to provide a 
stable commitment to our industry partners. We continue to work with 
industry to address opportunities to improve performance and more 
affordably build ships with low technological risk.
    Finally, the Navy is also evaluating the total ownership cost of 
growing the force to include the manpower and maintenance implications. 
Those needs will be programmed into future budgets and will be aligned 
with ship construction and deliveries to the fleet.
                   quality vs. quantity of the fleet
    Question. Some have argued that the Navy needs a future fleet 
composed of a ``high/low mix'' of different types of ships.
    Is the ``high-low mix'' an appropriate way to be framing the 
problem to begin with?
    What would these lower technology ships look like and how many of 
those do you think the Navy needs versus more capital-intensive items, 
like nuclear-powered super carriers?
    Answer. A ``high/low mix'' is an option for designing a future 
fleet. One example is Navy's current use of small and large surface 
combatants. In this construct, small surface combatants such as LCS are 
better suited to perform many missions, at an optimized investment 
strategy, than are larger surface combatants. This frees the larger 
ship to focus on higher-end missions (e.g. ballistic missile defense). 
Employing the right mix of large and small surface combatants not only 
improves warfighting effectiveness but also increases affordability for 
the nation.
    Navy is currently conducting analysis on various fleet 
architectures and designs, including ``high/low'' mix options. Upon 
completion of this analysis, Navy will brief Congress on how these 
efforts will inform future force plans and capability/capacity 
decisions.
                                 ______
                                 
           Questions Submitted to Admiral John M. Richardson
              Questions Submitted by Senator Patty Murray
  ``public shipyards: capacity and resiliency during navy expansion''
    Question. Admiral Richardson, President Trump has spoken at length 
regarding his desire to increase the size of the Navy to 350 ships. 
Regardless of whether that is the final number, significant increases 
in shipbuilding have implications for every aspect of the Navy.
    A significant increase would not happen quickly and would require 
dramatic increases in investment to shipbuilding, force structure, 
operations and maintenance, and other accounts.
    Additionally, a large increase in the number of ships would add 
significant stress to the Navy's public shipyards, including the Puget 
Sound Naval Shipyard in Washington State.
    What kind of increases to hiring, infrastructure, and operations 
would you need at the public shipyards to accommodate a significant 
increase in the number of ships?
    Answer. The Navy's approach to increasing Naval Power includes 
maintaining a balance of new ships, readiness, manpower, and 
infrastructure. The Navy will continue to seek to provide the 
infrastructure and workforce to meet the maintenance and modernization 
needs of the Fleet and to be able to inactivate, dispose of, and 
provide emergency repair for U.S. Navy ships, systems, and components.
    The Navy is already planning to modernize the Naval Shipyards to 
make them 21st century shipyards. This modernization includes upgrading 
the infrastructure while also improving the overall layout of the 
shipyards, which were originally designed to build new ships, to be 
optimized for ship maintenance and modernization. Such improvements are 
intended to not only improve the facilities but also to enhance both 
processes and productivity across the Naval Shipyards.
    In conjunction with growing the fleet responsibly, we are taking 
into consideration the associated cost to maintain that larger fleet, 
both in terms of increasing the size of our Naval Shipyards as well as 
the size of our private sector ship repair industrial base. The Navy 
will need a stable and predictable budget to support a more capable 
fleet to meet the nation's needs.
                                 ______
                                 
                Question Submitted by Senator Jon Tester
                        navy recruiting efforts
    Question. What are the Navy and Marine Corps plans to recruit 
talented individuals from rural parts of the country like Montana?
    Answer. As in the past, Navy continues to compete for talent among 
all demographic and geographic areas of this Nation, including the 
State of Montana. Through application of a combination of social media 
platforms, electronic applications, and video technologies, we are 
making Navy opportunities available to all, regardless of geographic 
location, particularly in remote and isolated areas that do not have an 
in-person Navy presence.
                                 ______
                                 
            Questions Submitted to General Robert B. Neller
              Questions Submitted by Senator Thad Cochran
                            amphibious ships
    Question. The Navy's current shipbuilding plan calls for 38 
amphibious ships, while the Marine Corps has stated that 54 amphibious 
ships are needed to answer Combatant Commanders' operational demands. 
In light of this deficiency, would you support continued production of 
LPD amphibious ships to address operational readiness challenges as 
soon as possible?
    Answer. The Marine Corps' 38 amphibious warship requirement is 
based on our mission to provide the nation with an expeditionary force 
in readiness, capable of simultaneously projecting two Marine 
Expeditionary Brigades globally, at the time and place of our choosing, 
while supporting sea control and denial missions as part of a Naval 
campaign. A 38 amphibious warship fleet configured in a mix of 12 LHA/
LHD and 26 LPD/LXR will enable the broadest application of the Marine 
Air-Ground Task Force (MAGTF) to the range of military operations. The 
2016 Force Structure Assessment, published by the Navy, recommends 355 
ships with 38 amphibious warships. We have 31 ships in the current 
amphibious fleet with 23 available for worldwide service.
    To sustain a capable maritime expeditionary force we need to couple 
investments in maintenance and modernization with a balanced 
procurement strategy. We can reduce programmatic risk through multi-
year procurement and block buys. This approach will reduce operational 
gaps by building and delivering ships prior to decommissioning legacy 
platforms.
    The LPD is a very capable platform and we are grateful for 
congressional appropriations to build LPD 29. The Amphibious Ship 
Replacement LX(R) will replace the aging LSD fleet and is based off of 
the proven LPD 17 hull form design. The LPD/LX(R) design has matured 
through the disciplined application of industry informed cost reduction 
initiatives, optimized ship construction techniques paired with 
balanced capability and capacity trade space decisions; thereby, 
providing a capable warship at the best value.
                                 ______
                                 
                Questions Submitted by Senator Roy Blunt
                      marines at fort leonard wood
    Question. General Neller, as you know, Fort Leonard Wood is proud 
to be home to the most Marines in the nation outside a Marine Corps 
base.
    Even with a huge number of Marines already on post, there is room 
for growth.
    I know that the Marine Corps has been looking at the feasibility of 
moving civilian law enforcement training to Fort Leonard Wood, which 
obviously makes a great deal of sense given that Fort Leonard Wood is 
home to the Military Police School and Marines already go through there 
for military police training.
    I would ask that you continue to work on the feasibility of this 
move, complete that assessment as soon as possible, and keep my office 
updated on any developments.
    Answer. The Marine Corps has submitted a formal request to the 
Department of the Army to support our basic civilian police officer 
training. The Department of the Army is currently making a 
determination on their ability to support the training requirements we 
have identified. The Army and Marine Corps are working to reach a 
mutually supported Service agreement that is economically feasible. 
Upon completion; the Marine Corps could transition the majority, if not 
all, basic civilian police officer training requirements to Fort 
Leonard Wood in the near future. We hope to have the statistical 
analysis complete by the end of calendar year 2018 and will notify your 
office of key developments as appropriate.
                                 ______
                                 
                Question Submitted by Senator Jon Tester
                        navy recruiting efforts
    Question. What are the Navy and Marine Corps plans to recruit 
talented individuals from rural parts of the country like Montana?
    Answer. Marine Corps Recruiting Command has a robust and well-
established marketing and public affairs program designed to generate 
awareness and understanding of military service, with the final goal of 
putting our recruiters close to people seeking interest in the United 
States Marine Corps.
    Rural areas such as Montana are treated similarly to any other 
location in the United States. A team of recruiters is assigned to 
cover such geographic locations, actively engaging in recruiting 
efforts, often driving countless hours to seek out and engage with 
highly qualified young men and women.
    Together with our marketing and public affairs program we ensure 
accessibility to every interested and eligible person throughout our 
nation regardless of their geographic location.

                          SUBCOMMITTEE RECESS

    Senator Cochran. This subcommittee will reconvene on 
Wednesday, June 7, 2017 at 10:30 a.m. The purpose will be to 
receive testimony from the Department of the Army.
    Until then, this subcommittee will stand in recess.
    [Whereupon, at 12:04 p.m., Wednesday, May 24, the 
subcommittee was recessed, to reconvene at 10:30 a.m., 
Wednesday, June 7.]