    [Senate Hearing 117-961]
    [From the U.S. Government Publishing Office]

                                                            S. Hrg. 117-961

                  SHIPYARD INFRASTRUCTURE OPTIMIZATION PROGRAM

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

                                    HEARING

                                   before the

                            SUBCOMMITTEE ON SEAPOWER

                                      and

                         SUBCOMMITTEE ON READINESS AND
                               MANAGEMENT SUPPORT

                                     of the

                          COMMITTEE ON ARMED SERVICES
                              UNITED STATES SENATE

                        ONE HUNDRED SEVENTEENTH CONGRESS

                                 SECOND SESSION

                                   __________

                                  MAY 10, 2022

                                   __________

             Printed for the use of the Committee on Armed Services

             GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT

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

                               _______

                 U.S. GOVERNMENT PUBLISHING OFFICE
     59-771 PDF          WASHINGTON : 2025

                          COMMITTEE ON ARMED SERVICES

     JACK REED, Rhode Island, Chairman      JAMES M. INHOFE, Oklahoma
    JEANNE SHAHEEN, New Hampshire           ROGER F. WICKER, Mississippi
    KIRSTEN E. GILLIBRAND, New York         DEB FISCHER, Nebraska
    RICHARD BLUMENTHAL, Connecticut         TOM COTTON, Arkansas
    MAZIE K. HIRONO, Hawaii                 MIKE ROUNDS, South Dakota
    TIM KAINE, Virginia                     JONI ERNST, Iowa
    ANGUS S. KING, Jr., Maine               THOM TILLIS, North Carolina
    ELIZABETH WARREN, Massachusetts         DAN SULLIVAN, Alaska
    GARY C. PETERS, Michigan                KEVIN CRAMER, North Dakota
    JOE MANCHIN III, West Virginia          RICK SCOTT, Florida
    TAMMY DUCKWORTH, Illinois               MARSHA BLACKBURN, Tennessee
    JACKY ROSEN, Nevada                     JOSH HAWLEY, Missouri
    MARK KELLY, Arizona                    TOMMY TUBERVILLE, Alabama

                         Elizabeth L. King, Staff Director
                         John Wason, Minority Staff Director

                            Subcommittee on Seapower

         MAZIE K. HIRONO, Hawaii,      KEVIN CRAMER, North Dakota
                Chairwoman             ROGER F. WICKER, Mississippi
    JEANNE SHAHEEN, New HampshireT     TOM COTTON, Arkansas
    RICHARD BLUMENTHAL, Connecticut    THOM TILLIS, North Carolina
    TIM KAINE, Virginia                RICK SCOTT, Florida
    ANGUS S. KING, Jr., Maine          JOSH HAWLEY, Missouri
    GARY C. PETERS, Michigan

                Subcommittee on Readiness and Management Support

       TIM KAINE, Virginia, Chairman
    JEANNE SHAHEEN, New Hampshire
    RICHARD BLUMENTHAL, Connecticut
    MAZIE K. HIRONO, Hawaii
    TAMMY DUCKWORTH, Illinois            DAN SULLIVAN, Alaska
                                         DEB FISCHER, Nebraska
                                         MIKE ROUNDS, South Dakota
                                         JONI ERNST, Iowa
                                         MARSHA BLACKBURN, Tennessee

                                      (ii)

                             C O N T E N T S

                                  May 10, 2022

                                                                       Page

    Shipyard Infrastructure Optimization Program.....................     1

                               Members Statements

    Statement of Senator Mazie Hirono................................     1

    Statement of Senator Kevin Cramer................................     2

    Statement of Senator Tim Kaine...................................     3

    Statement of Senator Dan Sullivan................................     4

                               Witness Statements

    Stefany, Frederick, Principal Civilian Deputy Assistant Secretary     5
      of the Navy for Research, Development, and Acquisition.

    Maurer, Diana, Director, Defense Capabilities and Management,         9
      Government Accountability Office.

    Questions for the Record.........................................    45

                                     (iii)

                  SHIPYARD INFRASTRUCTURE OPTIMIZATION PROGRAM

                                  ----------

                             TUESDAY, MAY 10, 2022

                      United States Senate,
              Subcommittees on Seapower and
                      Readiness and Management Support,
                                   Committee on Armed Services,
                                                        Washington, DC.
        The Subcommittees met, pursuant to notice, at 2:44 p.m. in
    room SD-350, Dirksen Senate Office Building, Senator Mazie
    Hirono (Chairman of the Subcommittee) presiding.
        Committee Members present: Hirono, Kaine, Blumenthal,
    Peters, Cramer, Sullivan, Wicker, Fischer, Ernst, Scott, and
    Hawley.

               OPENING STATEMENT OF SENATOR MAZIE HIRONO

        Senator Hirono. This hearing will come to order. We will
    momentarily be joined by Senator Kaine and other Members. We
    are, as you know, in the midst of voting.
        I would like to welcome our witnesses to the hearing this
    afternoon: Mr. Frederick Stefany, Principal Civilian Deputy
    Assistant Secretary--that is a mouthful. Welcome, Mr.
    Secretary--Assistant Secretary of the Navy for Research,
    Development, and Acquisition; Vice Admiral William Galinis,
    Commander of Naval Sea Systems Command; Rear Admiral Troy
    McClelland, Program Executive Officer for Industrial
    Infrastructure; and Ms. Diana Maurer, Director of Defense
    Capabilities and Management for the Government Accountability
    Office (GAO). Thank you for your service to the Nation and for
    the truly professional service of the men and women under your
    command.
        I also want to recognize our Ranking Member, Senator
    Cramer. I also want to recognize Senator Kaine and Senator
    Sullivan, and I appreciate my colleagues' willingness to hold
    this joint Readiness and Seapower hearing on this very
    important subject.
        We stand at a crossroad today. The Nation's shipyards are
    in dire need of modernization to ensure we can maintain the
    current fleet and the fleet of the future. I am encouraged that
    the Navy has finally gotten serious about investing in this
    critical infrastructure that has been neglected for too long.
        In Hawaii we are all proud of Pearl Harbor Naval Shipyards'
    contributions to our fleet's readiness, and I want to be sure
    that the yard receives the resources it needs to keep our fleet
    in fighting shape. I look forward to hearing from you this
    afternoon about how the fiscal year 2023 budget supports this
    plan.
        The Navy has begun a once-in-a-generation program to
    modernize its shipyards under the Shipyard Infrastructure
    Optimization Program, or SIOP. This 20-year program to improve
    the shipyard infrastructure is an effort that has been sorely
    neglected for many years, and we have to get it right. We are
    relying on the digital twin modeling and simulation effort to
    develop the most efficient and productive layout for operations
    at the four public shipyards.
        Last year, for example, we had to add $250 million to fund
    the dry dock at the Portsmouth Naval Shipyard due to unexpected
    ballooning of the estimated cost. We need to understand what
    steps the Navy has taken to make sure we have better cost
    estimates of the projects we are undertaking. This will be
    important as the Navy turns to the dry dock replacement at
    Pearl Harbor Naval Shipyard, which is the next dry dock to be
    constructed and will require significant dredging and filling
    to extend the existing dry dock.
        We also need to understand how the Navy is structuring the
    SIOP effort to improve the efficiency of the shipyards to deal
    with the ship maintenance challenges that are facing the Navy
    today.
        SIOP is not limited to just the dry docks. It also extends
    to optimizing the work on the shipyards through production
    facilities and other improvements to misaligned configurations,
    and this is why I have been so focused on the warfront
    production facility at Pearl Harbor. This project is important
    to the workforce there, and I want to ensure the Navy remains
    committed to it. We need to be able to maintain the fleet we
    have if we are ever to reach the fleet size the Navy has
    identified as required to respond to future threats. SIOP's
    success is critical to that goal.
        We want to help and we would ask the Navy to consider how
    the program could be accelerated without impacting
    availability. So I look forward to hearing today how we can
    work together to make sure SIOP is a fully successful effort.
        Now I turn to Senator Cramer for his remarks.

                   STATEMENT OF SENATOR KEVIN CRAMER

        Senator Cramer. Thank you, Chairwoman Hirono, as well as
    Chairman Kaine and Ranking Member Sullivan for agreeing to hold
    this hearing jointly to discuss a range of important naval
    shipyard issues that cross our Subcommittee jurisdictions, and
    let us face it--it is not just the issue of the day. It is the
    issue of the day with regard to the future of the Navy.
        As I think about our naval shipyards it is striking to me
    how intertwined they are with our Nation's history. In other
    words, they are really old. Even before our independence. For
    example, Norfolk Naval Shipyard, near and dear to Senator
    Kaine's heart, of course, was first established in 1767 under
    the British flag as Gosport Shipyard and seized 7 years later
    during the Revolutionary War. There is not even a Senator that
    old anymore, is there?
        In the 1790s, the USS Chesapeake, one of the first six U.S.
    Navy ships authorized and funded by Congress, was built there.
    Later, the first dry dock in the Western Hemisphere opened in
    1833, known as Dry Dock 1, and now a historic national
    landmark. It is still in use today. Think about it. It is 189
    years old and still used to maintain naval vessels.
        Suffice it to say, our four public shipyards all have
    storied histories and they are truly national infrastructure.
    Each is over 100 years old and showing its age. The poor
    condition of these shipyards is having a serious negative
    effect on fleet ogperations today and the bill has come due.
    This is not a future problem. It is here now and one we must
    work together to solve.
        So while there is a lot to discuss, and I appreciated
    Chairwoman Hirono's opening comments and much of what she had
    to say, I plan to focus my questions on how Congress can help
    in terms of authorities, workforce development, and funding. On
    the last point, I am hopeful the bipartisan group of Senators
    working on the Shipyard Act, many of whom are in the room
    today, will be able to get it done. I look forward to the
    testimony of our witnesses.
        Thank you, Madam Chair.
        Senator Hirono. Thank you.
        Now I would like to turn to Senator Kaine, the chair of the
    Readiness Subcommittee. Senator Kaine?

                     STATEMENT OF SENATOR TIM KAINE

        Senator Kaine. Thank you, Chair Hirono. Readiness
    Subcommittee meetings are fun, Seapower Subcommittee meetings
    are fun, but this is really exciting, this joint meeting, and I
    want to thank the chair and I want to thank the witnesses for
    being here today and for your dedicated service to the country.
        You have got some friendly faces around the dais when it
    comes to support for our Navy's shipyards, but at the same time
    the Navy has some significant challenges on its hands regarding
    the implementation of SIOP, especially the ability or inability
    to be on time, on budget.
        There is no doubt that these are necessary investments. The
    condition of our shipyards, both in terms of infrastructure and
    workforce, given that the age of the shipyards was indicated by
    Senator Cramer, do require a lot of resources and support. We
    have to do our part here in Congress.
        When we look at how the Navy has executed SIOP projects to
    date, I have some concerns and I also see some positives. On
    the concerns side, how do we ensure that the Navy can even
    program the average $1 billion per year in budget requests over
    the next 20 years? The dry dock replacement at Portsmouth--that
    is the Portsmouth in Maine, not Virginia--was originally
    estimated by the Navy to cost $250 million. Then the cost
    doubled, and then it increased another $250 million as a result
    of a sole-source contract. So today my particular interest in
    hearing from you is how we have implemented the lessons learned
    from Portsmouth for the rest of the SIOP portfolio.
        It is not all bad news. The Navy has invested well over the
    statutorily required 6 percental capital investment program
    since 2011. That is a real positive. The work of the GAO has
    never been more important than it is today, so I am glad to
    have Ms. Maurer here testifying again before the committee. I
    look forward to hearing her insights on how the Navy can better
    execute construction projects, modernize its capital equipment,
    and otherwise optimize shipyard operations.
        So Madam Chair, thanks again for leading the charge on this
    hearing to discuss our shipyards in detail.
        Senator Hirono. Senator Sullivan?

                   STATEMENT OF SENATOR DAN SULLIVAN

        Senator Sullivan. Yes. Thank you, Madam Chair, and I want
    to thank you and Senator Kaine and all my colleagues for
    conducting this hearing. It is a very important hearing, and to
    Senator Cramer's discussion of history, I actually was just
    talking to Senator Hirono as we walked down to the vote on the
    latest movie on Midway. I do not know if anyone has seen that
    movie but it is quite a good movie.
        It has got a scene where the shipyard, I believe that was
    in Hawaii, did a miraculous job of bringing the carrier, the
    Yorktown, back online to go fight in the Battle Midway and was
    decisive. So the shipyard point, about what Senator Cramer was
    talking about, really made history in that critical battle that
    was one of the most important in World War II, one of the most
    important battles in our Nation's history. So that is how
    important this topic of discussion is.
        As has already been noted, the average of naval shipyard
    facilities is over 60 years old, and the average dry dock age
    is approaching 100 years old, and we have seen the readiness of
    shipyards weaken as decisions were made to prioritize
    shipbuilding over ship maintenance. When initially developed,
    the Shipyard Infrastructure Optimization Plan had a bill of $21
    billion over 20 years. That number has already increased in the
    last few years, and that is the topic I hope we can discuss in
    detail today.
        Additionally, according to the GAO, the Navy cannot
    currently complete all required maintenance for aircraft
    carriers and submarines with our existing dry dock
    capabilities. So how can we balance these necessary capital
    investments with the existing maintenance requirements? I think
    we find ourselves in a challenging situation as it relates to
    operational demands, ship maintenance, and the conditions of
    the fleet, not to mention the challenges in the U.S. Indo-
    Pacific Command (INDOPACOM) theater and a look at where China
    is with regard to its shipbuilding and maintenance
    capabilities.
        Another issue that I think impacts the Joint Force is
    maintenance on conventionally powered ships. Delayed overhauls
    of surface combatants that escort nuclear aircraft carriers
    also impact readiness. I believe one option in that regard is
    to conduct lower-level maintenance at smaller private shipyards
    to free more space for more complex maintenance overhauls at
    our larger private shipyards. I hosted the Secretary of the
    Navy a couple of years ago to our shipyard in Ketchikan,
    Alaska, which has enormous capabilities and is looking to do a
    lot of work for the U.S. Coast Guard. We have another shipyard
    in Seward, Alaska, that just completed almost $11 million worth
    of work on the USNS Grasp, a Navy rescue and salvage vessel.
    The work was delivered on time, on budget, and received
    outstanding feedback.
        So this is an all-hands-on-deck need, and I think there are
    shipyards across America, including in my state, that can
    participate and help out with regard to the challenges.
        Thank you. I look forward to hearing our witnesses.
        Senator Hirono. Thank you, Senator Sullivan, and I thank
    him for suggesting that we all go to see the new Midway movie,
    because it really highlights the importance of our public
    shipyards.
        We will start this hearing by hearing from Secretary
    Stefany first. Please proceed.

       STATEMENT OF FREDERICK STEFANY, PRINCIPAL CIVILIAN DEPUTY
    ASSISTANT SECRETARY OF THE NAVY FOR RESEARCH, DEVELOPMENT, AND
                              ACQUISITION

        Mr. Stefany. Yes, ma'am. Thank you. I will be reading a
    statement for all three of us from the Navy.
        Chairwoman Hirono, Chairman Kaine, Ranking Members Cramer
    and Sullivan, distinguished Members of the Subcommittees, on
    behalf of myself, Vice Admiral Galinis, and Rear Admiral
    McClelland, thank you for the opportunity to appear before you
    today to discuss the Department of Navy's Shipyard
    Infrastructure Optimization Program, better known as SIOP.
        Modernized and ready shipyards are generators of fleet
    readiness and are the strength of our national security. We
    appreciate the strong support this Committee, and particularly
    these subcommittees have shown for infrastructure optimization
    efforts to date. We are committed to maintaining transparency
    throughout the planning and execution of the Department's SIOP
    investments.
        As mentioned, SIOP is a once-in-a-century opportunity to
    revitalize our Nation's four public shipyards, ensuring that
    these critical national security facilities are properly
    positioned to meet current and future needs of the Navy. It is
    about modernizing aging facilities, equipment, and dry docks
    that have served our fleet for generations, and doing that
    modernization without disrupting our current maintenance that
    supports the readiness of today's fleet.
        We also need to upgrade these facilities and equipment to
    support new classes of ships, such as the Ford aircraft carrier
    and the Virginia Block V submarines, while at the same time
    making the shipyards more efficient and more effective at
    maintaining all our ships. We need to bring them up to modern
    standards and ensure they are resilient to climate change. All
    of this will take years of consistent funding, construction,
    and leadership at all levels.
        Informed by a complete Future Years Defense Program (FYDP),
    the fiscal year 2023 budget includes our strongest SIOP funding
    since the program was established. It includes $1.7 billion for
    the program in fiscal year 2023, with a sustained commitment of
    $8.3 billion across the FYDP.
        In fiscal year 2023, the request will support modernization
    of capital equipment and will enable advanced planning
    activities and required environmental assessments. The 2023
    funds will also enable critical military construction (MilCon)
    projects such as the start of the replacement of Dry Dock 3 at
    Pearl Harbor, Hawaii, and the continuation of multi-mission Dry
    Dock 1 in Kittery, Maine, and Dry Dock 8 saltwater systems in
    Portsmouth, Virginia, as well as the planning for the multi-
    mission dry dock at Bremerton, Washington.
        Multiple Navy commands play key roles in SIOP planning and
    execution. For example, the Navy Facilities Engineering Systems
    Command, or NAVFAC, builds and maintains the shipyards, the
    Naval Sea Systems Commands operates the shipyards, and the
    commander of the Naval Installations Commands hosts all of
    those activities.
        To ensure disciplined oversight while maintaining
    uninterrupted support to the fleet, the Navy is treating SIOP
    as if it is a major defense acquisition program. We have
    established a program executive officer for industrial
    infrastructure late last year, we are developing an overall
    SIOP acquisition strategy, and we are developing individual
    master plans with cost, schedule, and performance measurement
    baselines for each of the shipyards to measure our progress as
    we go.
        We understand that for SIOP to succeed we must properly
    plan and execute SIOP work without impacting the shipyard's
    ability to execute their mission. Balancing SIOP's needs with
    that of the fleet and the shipyards is, and will continue to
    be, critical and an iterative process involving all
    stakeholders. We are committed to working as a team to ensure
    the program is ruthlessly executed to avoid impacting fleet
    operations or ship maintenance periods, and conversely, that
    ship maintenance availabilities do not impact downstream SIOP
    projects.
        We believe improved SIOP governance, combined with
    consistent funding, will focus and accelerate this critical
    long-term initiative. It will enable the Navy to sustain
    nuclear-powered warships we have now and the ones that we are
    building for the future fleet, strengthening maritime dominance
    in defense of our Nation.
        With that we look forward to your questions. Thank you.
        [The joint prepared statement of Mr. Frederick J. Stefany,
    Vice Admiral William J. Galinis, and Rear Admiral Troy
    McClelland follows:]

    Joint Prepared Statement by Frederick J. Stefany, Vice Admiral William
                  J. Galinis and Rear Admiral Troy McClelland
        Distinguished Members of the Subcommittees, we are pleased to
    appear before you today to discuss the Department of the Navy's
    Shipyard Infrastructure and Optimization Program (SIOP). SIOP is a
    once-in-a-century opportunity to revitalize our Nation's public
    shipyards, ensuring that these critical national security facilities
    are properly positioned to meet the future needs of the Navy Fleet.
    With the strong support of this committee and the Congress, SIOP
    efforts continue to mature, creating momentum as a cross-organizational
    initiative committed to predictable delivery of critical infrastructure
    for the four public shipyards. Funding provided in the Fiscal Year 2022
    Consolidated Appropriations Act will ensure that priority projects are
    completed in time to serve the first Virginia-class mission need date
    in fiscal year 2027 and that other crucial planning and design efforts
    are completed to support the Navy's future nuclear submarine and
    aircraft carrier force.
                                   background
        The Navy's four public shipyards--Norfolk Naval Shipyard (NNSY),
    Portsmouth Naval Shipyard (PNSY), Puget Sound Naval Shipyard and
    Intermediate Maintenance Facility (PSNS), and Pearl Harbor Naval
    Shipyard and Intermediate Maintenance Facility (PHNS)--are pillars of
    our national defense. The average age of the naval shipyard facilities
    and related infrastructure is over 60 years while the average dry dock
    age is approaching 100 years. Shipyard facilities, equipment, and their
    workforce have served the Fleet for generations, and we could not
    afford to build them from scratch today.
        The Navy established SIOP in 2018 to take a holistic approach to
    recapitalization of the four public shipyards. SIOP integrates all
    infrastructure and capital equipment investments to support nuclear
    fleet maintenance requirements and improve maintenance capabilities by
    expanding shipyard capacity and optimizing shipyard configuration. From
    the beginning, SIOP has led the Navy in depot infrastructure
    transformation efforts and has become a model for all domains seeking
    to improve their infrastructure capabilities. The program consists of
    three primary Lines of Effort (LOE) in support of the four public
    shipyards:
        1.  Construct and recapitalize dry docks, including necessary
    investments to sustain certification requirements.
        2.  Recapitalize and reconfigure infrastructure towards
    optimization.
        3.  Modernize capital equipment.
        Dry dock recapitalizations must be completed to accommodate the
    configuration of the future force platforms. Along with the dry dock
    recapitalizations, the modernization and equipment recapitalization
    elements of SIOP are essential to meeting and subsequently reducing the
    timelines associated with completing maintenance and modernization
    work; maximizing the operational availability of these platforms in
    support of fleet requirements. Our shipyard re-capitalizations also
    must integrate with ongoing and planned carrier and submarine
    maintenance availabilities. SIOP activities are closely tied to each
    shipyard's planning and execution of ongoing and future availabilities
    for the current nuclear force and are scheduled to balance the needs of
    the shipyards to conduct ongoing work with the needs of the shipyard
    recapitalization work.
                        fiscal year 2023 budget request
        The Navy's fiscal year 2023 budget demonstrates our commitment to
    SIOP by requesting $1.7 billion for the program in fiscal year 2023,
    and requesting a total of $8.3 billion across the Future Years Defense
    Program (FYDP) to fund the three LOEs. Combined with the SIOP funds
    enacted by Congress in fiscal year 2021 and fiscal year 2022, this FYDP
    request will enable critical Military Construction (MILCON) projects
    ($6.1 billion) such as the replacement of Dry Dock (DD) 3 at Pearl
    Harbor, Hawaii; Multi-Mission Dry Dock #1 Extension in Kittery, Maine;
    and Dry DD 8 Saltwater System in Portsmouth, Virginia to proceed on
    pace to meet fleet requirements. The request will support modernization
    of Capital Equipment ($679 million) and will enable advanced planning
    activities, required environmental assessments, and program management
    ($1.5 billion). These additional investments will facilitate program
    oversight, proper planning and cost development of projects to better
    inform future budget estimates.
                               program governance
        To ensure disciplined oversight of cost, schedule and performance
    within the program, while maintaining uninterrupted support to the
    Fleet, the Navy updated its reporting relationships and established a
    Program Executive Office Industrial Infrastructure (PEO II), aligned
    with Naval Facilities Engineering Systems Command (NAVFAC), and
    reporting directly to the Assistant Secretary of the Navy for Research,
    Development, and Acquisition (ASN (RD&A)). Additionally, the Program
    Management Office that previously reported to Naval Sea Systems Command
    (NAVSEA) has been realigned to report directly to PEO II.
        The PEO and program office are implementing agile acquisition
    methodologies to coordinate the programmatic execution of this complex
    effort, similar to those the Navy employs for major defense acquisition
    programs (MDAPs). The Navy is establishing an overall SIOP Acquisition
    Strategy (AS) and Acquisition Program Baselines (APBs) for each
    shipyard that will be the guiding documents for managing SIOP program
    execution. These documents will establish threshold and objective
    parameters for the overall cost, schedule, and performance of SIOP
    execution at each shipyard. The PEO also remains integrated with NAVSEA
    and the Naval Sustainment System--Shipyards (NSS-SY) efforts to improve
    shipyard performance.
        Whereas SIOP is a holistic, Navy-wide approach to upgrading the
    shipyards' physical infrastructure and capital equipment, NSS-SY is
    focused on improving and standardizing the shipyards' business
    practices to improve the on-time delivery of submarines and aircraft
    carriers out of maintenance. Like SIOP, NSS-SY assigns Flag Officers
    from across the Navy to address functional areas affecting execution
    and performance in our public shipyards. Specific focus areas include
    planning, material procurement, engineering, waterfront execution,
    facilities, information technology, and Fleet partnership. NSS-SY has
    established target metrics to manage the duration of current nuclear
    force availabilities through processes, workflows, and procedural
    improvements. The opportunities for facility improvements identified
    will be utilized to achieve the overall SIOP efficiency targets that,
    enabling the Navy to better balance funding decisions associated with
    facility improvement and construction projects in a fiscally
    constrained environment.
                              siop five-year plan
        With the start of the SIOP efforts in 2018, the Navy developed
    rough order of magnitude estimates for the duration and cost of the
    three Lines of Effort across the four public shipyards. An initial
    detailed SIOP ``next five-year plan'' with higher fidelity schedules
    and costs estimates was provided in the fall of 2021, and in April
    2022, the Navy updated the SIOP next Five-Year Plan to include
    measurable near-term goals, known project costs, project sequencing to
    deconflict with required maintenance availabilities and environmental
    planning timelines. The Navy is aggressively implementing lessons
    learned from recently awarded projects for upcoming efforts to include
    acquisition, design, cost estimation, and organizational and process
    changes. The Department has also re-assessed construction and
    procurement timelines to effectively implement SIOP activities, while
    executing ongoing and planned submarine and aircraft carrier
    maintenance availabilities.
    Line of Effort 1: Construction and Recapitalization of Dry Docks
        Construction and recapitalization of dry docks must be completed to
    accommodate the size and systems of future forces platforms such as the
    USS Gerald R Ford-class aircraft carriers and Virginia-class
    submarines. The first construction project for dry dock
    recapitalization was awarded last year for the construction of two new
    dry docks at PNSY. Construction is on schedule to support the Virginia-
    class maintenance availabilities planned for these new dry docks at the
    shipyard in fiscal year 2027. Upgrades to DD 8 at NNSY are scheduled to
    award this fiscal year to support future Ford-class availability, and
    renovations to DD 4 at the shipyard are scheduled to be completed next
    year. The dry dock work, along with all other SIOP activities, are
    closely tied to each shipyard's planning and execution of ongoing and
    future availabilities in order to balance the needs of the shipyards'
    ongoing work with the needs of the shipyard recapitalization work.
        The DD 3 replacement project at PHNS remains on track to award in
    fiscal year 2023. The Draft Environmental Impact Statement for DD 3 and
    the Waterfront Support Facility was released in February and is on
    schedule to issue a Record of Decision during the fall of this year.
    Both projects are critical to readiness of our Pacific Fleet.
        Planning and early design work is underway for the Multi-Mission
    Drydock at PSNS to accommodate a Ford-class aircraft carrier mission
    need date in fiscal year 2034, with a final configuration decision
    expected this year on the type and extent of the drydock work needed to
    support the Ford-class aircraft carriers.
    Line of Effort 2: Recapitalization and Reconfiguration of
            Infrastructure for Optimization
        Recapitalizing and reconfiguring infrastructure towards
    optimization relies on extensive master planning, informed by
    industrial modeling and simulation, for each shipyard to determine the
    optimum infrastructure configuration and process workflow necessary to
    sustain ongoing ship maintenance. The Navy has completed the first
    phase of modeling and simulation at all the shipyards, and is on track
    to complete the first shipyard Area Development Plan (ADP)--or master
    plan--at PHNS in fiscal year 2022. The second ADP was awarded for PSNS
    in March 2022 and is planned to complete by end of fiscal year 2023.
    Integrating industrial modeling and simulation with infrastructure
    master planning is a first for the Navy in maximizing its investment in
    SIOP. The ADPs will include investment requirements to recapitalize
    shipyard infrastructure towards optimization, as well as a phasing plan
    to minimize the impact of SIOP implementation on critical shipyard
    operations.
    Line of Effort 3: Modernization of Capital Equipment at Public
            Shipyards
        The goal of the SIOP capital equipment program is to replace
    antiquated and outdated equipment to enable maintenance of critical
    components, improve efficiency, reduce costs, and to establish new
    industrial capabilities to achieve fleet readiness. This includes vital
    pieces of equipment to include industrial plant equipment, reactor-
    servicing equipment, and collateral equipment. The $679 million
    requested for capital equipment modernization across the FYDP in the
    President's fiscal year 2023 budget request for SIOP will give our
    shipyards the equipment they need to fulfill their mission.
                        improvements to cost estimating
        The Navy is continuing to improve confidence in SIOP costs and
    schedule targets, extrapolating data and methodology from ongoing
    projects to those in design and acquisition. Since inception of the
    program in 2018, the focus has been on providing dry dock capability
    and enabling industrial optimization analysis. The initial projects
    include PNSY DD improvements, planning and development of the PHNS DD 3
    replacement and improvements in the NNSY DD 8 Saltwater System for CVN
    78. To improve cost and schedule fidelity, we have incorporated
    industry best practices for mega projects including early third party
    cost estimate evaluation, improved cost and schedule management, early
    contractor involvement and industry engagement. As a result, the
    confidence factor is high for the costs of the PNSY DD project, and
    confidence in the cost of the PHNS DD project is increasing now that
    the design is 60 percent complete. Additionally, the first SIOP master
    plan at PHNS is mature and enabling a more comprehensive development of
    cost and schedule for future projects.
                    integration with planned availabilities
        Integral to SIOP's success is being able to start and complete
    projects on time. To that end, the program works closely with both the
    Fleet and NAVSEA, which operates the shipyards, to properly deconflict
    planned submarine and aircraft carrier availabilities and to keep all
    parties apprised of the status of on-going and planned SIOP work.
        The Navy is working to better plan and execute maintenance--both to
    deliver submarines and aircraft carriers back to the fleet on time and
    to allow for SIOP to execute its critical mission on schedule. Efforts
    such as the Performance to Plan (P2P) that uses metrics and machine
    learning to better plan and execute maintenance availabilities and the
    NSS-SY that is focused on maximizing the productivity of the naval
    shipyard's engineering and production workforce are working in tandem
    to increase the Navy's on-time deliveries.
        Taken independently, SIOP, NSS-SY, and P2P will each greatly
    improve the Navy's ability to plan and execute aircraft carrier and
    submarine maintenance. Together, these three initiatives represent a
    substantial improvement in how the Navy plans and executes nuclear-
    powered warship maintenance.
                                   conclusion
        SIOP remains committed to accelerating its efforts to the greatest
    extent possible to provide the infrastructure and equipment our Navy
    needs, while ensuring it does not disrupt or interfere with the
    shipyards' mission to repair, maintain, and modernize the Navy's
    nuclear fleet. The program is aggressively and rapidly applying lessons
    learned and industry best practices where appropriate. SIOP understands
    that to succeed it must have continuous open communication with all
    stakeholders to properly plan and execute its work without impacting
    the shipyards' ability to execute their mission. Balancing SIOP's needs
    with that of the fleet and shipyards is, and will continue to be, an
    iterative process. We commit to working as a team to ensure the program
    is executed as expeditiously as possible without impacting fleet
    operations or ship maintenance.

        Senator Hirono. Thank you. I would like to hear from Ms.
    Maurer.

     STATEMENT OF DIANA MAURER, DIRECTOR, DEFENSE CAPABILITIES AND
              MANAGEMENT, GOVERNMENT ACCOUNTABILITY OFFICE

        Ms. Maurer. Thank you very much. Good afternoon, Chairwoman
    Hirono, Chairman Kaine, Ranking Members Cramer and Sullivan,
    and other Members and staff. It is good to be back before both
    subcommittees today.
        Over the past 5 years we have issued a series of reports
    about the poor condition of infrastructure at the Navy's
    shipyards. The 37,000 skilled artisans who overhaul and repair
    carriers and submarines often perform that work in facilities
    that are in poor condition, using equipment that is well past
    its expected service life.
        As was mentioned, the shipyards were built well over a
    century ago to repair wind- and steam-powered ships. Their
    layout is far from efficient to maintain nuclear-powered
    vessels. Moving the people, equipment, and parts necessary to
    repair a submarine is like trying to drive the century-old
    streets of Boston.
        Perhaps most significantly, the Navy does not have enough
    dry dock capacity to meet the future maintenance needs of the
    fleet. In 2017, we found that the Navy lacked a comprehensive
    plan for addressing these significant problems. The Navy, to
    its credit, developed the SIOP, created a program office to
    manage it, and kept Navy leadership informed of its progress.
    In late 2019, we took an in-depth look at the SIOP. We thought
    it was a decent first step, essentially a series of plans to
    improve each of the shipyards, and at that time the Navy
    estimated it would take 20 years and spend about $21 billion to
    implement its planned improvements.
        We found that initial cost estimate was unrealistically
    low. Among other things, that $21 billion price tag did not
    factor in inflation and did not include the cost to improve
    underlying utilities. We recommended the Navy improve its cost
    estimates to help manage the program and provide Congress the
    information that you need to help make funding decisions, and
    those recommendations are still open.
        Fast forward to today. The Navy has refined its plan,
    identified resource needs, and enhanced leadership engagement.
    This provides a reasonable framework for eventually improving
    shipyard infrastructure. But the realities of the shipyards
    have not significantly changed since our 2019 report.
        In a report that we issued yesterday, we found that overall
    facility conditions at all four shipyards remains poor and
    among the lowest across the entire depot enterprise. The
    average age of equipment has increased and most is beyond its
    expected service life. The backlog of facility restoration and
    modernization projects has grown to about $7 billion. Plus the
    Navy faces some very real time pressures. Ford-class carriers
    and expanded payload Virginia-class submarines will need dry
    dock capacity that the Navy currently does not have. It remains
    to be seen how the Navy will specifically address these
    problems. Its proposed actions are complex and are many years
    away from being fully implemented.
        We have a number of concerns about SIOP implementation.
    First, the Navy's estimated date for completing the individual
    shipyard plans has slipped to the end of 2024. As a result, we
    do not yet know the full details of what the Navy will upgrade
    and optimize, how long that will take, or what it will cost.
        Second, as was mentioned, the estimated cost for the first
    three dry dock improvements projects have grown from just under
    $1 billion to nearly $6 billion. That does not bode well for
    the future cost of the 11 other planned dry dock projects.
        Third, we are concerned that these increasing dry dock
    costs could crowd out other planned improvements. Dry docks
    should be a top priority but they are not the only priority.
    Mr. Stefany, Admiral Galinis, and Admiral McClelland understand
    these challenges and have committed to addressing them.
    Maintaining that top-level support will be vital because this
    effort will span many administrations and many Congresses.
        GAO will continue our independent oversight of shipyard
    improvements. Later this month we will start our next review,
    focusing on the Navy's cost estimates and schedule for SIOP
    projects. Our continued oversight will help inform Congress and
    enhance the Navy's efforts to improve it shipyards, which are
    vital for ensuring naval readiness.
        Madam Chairwoman and Mr. Chairman, thank you for the
    opportunity to testify this afternoon. I look forward to your
    questions.
        [The prepared statement of Ms. Diana C. Maurer follows:]

        Senator Hirono. Thank you. We will proceed to 5 minute
    rounds of questioning. We will start with me.
        So Admiral McClelland, are you the person that is charged
    with overseeing SIOP?
        Rear Admiral McClelland. Yes, Senator, I am. Admiral Troy
    McClelland and I have been assigned as the Program Executive
    Officer for Industrial Infrastructure, and SIOP is in my
    portfolio. I will note that I work very closely with the Naval
    Facilities Engineering Systems Command, the agent for design
    and construction, and Naval Sea Systems Command, Senator.
        Senator Hirono. But you are the point person to oversee
    SIOP?
        Rear Admiral McClelland. Yes, Senator, I am.
        Senator Hirono. So one of the major issues relating to the
    modernization program is the vast difference between the cost
    estimates--and I think Portsmouth is a prime example--the
    difference between the estimates of what it would cost to
    modernize those facilities, that shipyard, and what the
    contract goes out for. So what is being done or has been done
    to make sure that as you embark on the Pearl Harbor Naval
    Shipyard modernization that the estimates are accurate?
        Rear Admiral McClelland. Thank you, Senator, for that
    question. So what I lead with is a mechanism for early
    contractor engagement has been installed by the construction
    agent, Naval Facilities Engineering System Command, and
    specifically it is an acquisition strategy that allows us to
    have early engagement with multiple contractors so we can
    discuss with them means and methods, talk to them about the
    costs that they see, and then implement lessons learned as we
    are developing the program. That has been done for the Pearl
    Harbor work, Senator.
        Senator Hirono. Ms. Maurer, do you think that that is a
    lesson learned from the Portsmouth example?
        Ms. Maurer. Thank you, Senator. Yes, I would imagine and
    hope that the Navy has learned some lessons from what happened
    in Portsmouth in terms of cost growth with the dry dock.
        Senator Hirono. Is your microphone on? I am having a little
    difficulty hearing you. Maybe you can get closer.
        Ms. Maurer. Sure. Is this better?
        Senator Hirono. Yes.
        Ms. Maurer. Okay. So I would hope that, and it is clear
    from the Navy's reporting that it provided the Congress just a
    few weeks ago that they have listed a number of lessons
    learned, and one of the items that is noted in their report is
    that they are learning some lessons from the cost growth from
    the Portsmouth project as well as others. That is something we
    will be looking into in much more depth when we start our new
    review, digging into cost estimates and schedule estimates for
    some of the larger SIOP projects.
        I would note, as well, that there has been pretty
    significant cost growth for the Pearl Harbor project as well,
    which is obviously a critical capability that is required, but
    there has been significant cost growth in that project as well
    as increase in the overall scope.
        Senator Hirono. So Secretary Stefany, in view of the
    challenges that you have had in making sure that our cost
    estimates are accurate, and you note that there is, in the 2023
    budget, $1.7 billion, and then going forward what I think I
    heard you say $8.3 billion for the SIOP project. Do you think
    that is going to be enough, in view of the challenges that you
    faced in accurate cost estimates?
        Mr. Stefany. So, ma'am, one of the other lessons that we
    wanted to bring up was getting the design much more mature
    before we actually put out a formal estimate. That was another
    lesson we learned from Portsmouth and Pearl as well.
        So I feel like the big projects that are in the next 5
    years, we have the designs mature enough that we have
    confidence that there is not going to be continued growth on
    those projects. Do we have enough funding across the FYDP to do
    all the work that we have planned for those 5 years? Yes,
    ma'am. I think later on we will talk about things maybe to
    accelerate or move things from outside the FYDP in. But yes, in
    the 5 years of the FYDP we have enough funding to do the work
    we need to do in those years.
        Senator Hirono. I think that we are really going to be very
    much focused on making sure that there is enough funding to
    proceed with SIOP because the four public shipyards are
    counting on us to be able to move forward.
        As mentioned, I have been very focused on the waterfront
    facility. I still do not quite understand why that production
    facility, which is going to enable the Pearl Harbor Navy
    Shipyard workers to be able to be more efficient in the work
    that they do, I still do not understand why the facility part
    of the modernization is not happening at the same time as the
    dry dock building. Care to comment, Mr. Secretary, very
    briefly? I am running out of time.
        Mr. Stefany. Quickly, ma'am, yes. In a previous budget
    cycle we had to make a hard choice to push the design and the
    planning of the waterfront facility off because of budget
    constraints in a previous cycle. Now we are looking to see if
    we can bring it back. So previous decisions have pushed the
    facility out 2 years beyond the dry dock itself, but we are
    looking, as part of the next budget cycle, can we bring things
    forward and try to line them up. Because ideally, we would like
    to have them lined up, in a perfect world, ma'am.
        Senator Hirono. Which means--just one more thing, then--as
    Ms. Maurer testified, a lot of the equipment is also beyond the
    age of when they should be replaced, and if we are not going to
    have the waterfront facility next to or near where the dry dock
    is, where they equipment will be necessary, we have got to make
    sure that the equipment that they are using is up to par.
        I would like to recognize Senator Cramer.
        Senator Cramer. Thank you, Chairwoman, and thanks again to
    all of you. So sticking with the lessons learned theme a little
    bit while looking forward, let me start with you, Secretary
    Stefany. Do you have any advice for us, in terms of policy,
    streamlining processes, authorizations, obviously funding, but
    what have we learned that we can be helpful with in making this
    process a little more efficient and effective?
        Mr. Stefany. I will start with a couple, Senator, and see
    if Admiral McClelland has a couple more in the details.
        Senator Cramer. That would be great.
        Mr. Stefany. Authority which we have for these mega-
    projects to fund them incrementally over time, which you have
    provided us in the past, I think continuing that for these
    large projects and potentially looking at maybe a multi-year
    type procurement like we do in the shipbuilding world, where we
    can see if we can get the most efficiency by building a set of
    projects together in a multi-year contract, a single, large
    contract I think are two authorities that might be worth
    looking at to give more flexibility and negotiating space to
    our team.
        I will ask Admiral McClelland if he has any more specific
    ones.
        Rear Admiral McClelland. Thank you, Mr. Stefany. So I would
    only mention maybe and emphasize what Mr. Stefany said. Really,
    the multi-year work relative to repair and maintenance is
    something we are looking very closely at. These are complex
    projects, and I sometimes think repair and maintenance could
    give the impression of less complexity. But really, the multi-
    year relative to, say, a dry dock that we are repairing and the
    way that relates to an operational availability, and a current
    operational availability, is absolutely critical.
        So our ability to have a flexible approach, multi-year
    funding certainly is going to help us execute over time,
    Senator.
        Senator Cramer. Thank you for those. Along with all of
    that, of course, there is another challenge that we are hearing
    from everybody, I mean, seasonal, farm, hospitality workers to
    surgeons and very sophisticated technology workers, and
    everything in between, we have a workforce challenge in our
    country right now, particularly in the private sector.
        I presume you are experiencing the same thing or seeing the
    same thing. Do you have any thoughts, first of all, maybe what
    you are trying to do to recruit and retain employees at the
    yards but also, again, if there is anything that you think we
    could be doing.
        Mr. Stefany. I think Admiral Galinis would be best to
    address the workforce at the shipyards.
        Vice Admiral Galinis. Yes, Senator, that is a great
    question. Thanks very much. You know, we are seeing the same
    thing in the public yards as well. Our attrition rates are
    higher than what we had planned. Our recruitment rates are
    lower than what we had planned. What we are doing is we offer
    some pretty good training as we bring people into the yards
    through our apprentice programs, so that is one real positive.
        The other thing that we are looking at right now is, you
    know, we are actually looking at wages. For our entry-level
    positions--and many times we are competing at a wage that is
    less than what some businesses in the local area, for example,
    whether it be Amazon or even a Starbucks, for example.
    Typically the starting wage for some of our mechanics is in
    that $14-an hour to $15-an hour, so right about the minimum
    wage level. What we are finding is in some areas where our
    shipyards are located, Portsmouth and Puget Sound, in
    particular, the going wage is actually higher than that. So we
    are working through Navy leadership and with the human
    resources organizations across the Department of Defense to
    look at that wage grade that we are paying our folks.
        Senator Cramer. I commend you on that, and if we can be
    helpful we ought to be. Clearly when you are competing for
    talent with Starbucks in the Seattle area it is a tough
    competitor, but we ought to have the best that we can get, and
    we want to certainly help you be competitive.
        I will just bring up, real quickly, there are 18 co-
    sponsors, and a lot of from this Committee, of the Shipyard
    Act, speaking to the infrastructure and some additional
    resources. Maybe you could just generally comment on the
    Shipyard Act, what you know about it, and how helpful it maybe
    could be. Mr. Secretary?
        Mr. Stefany. Yes, sir. The Navy supports that act, the idea
    of having a commitment of all the funding up front with a
    time--not a time limit, you know, 1 year to spend it, but
    having a period of time to spend the funding most efficiently.
    The knowledge that all, in this case, the total dollar value
    was there and could be worked with industry most effectively,
    is a best practice. So we would absolutely support that, sir.
        Senator Cramer. It is always tough to apply the time value
    of money in appropriations processes by the government but we
    need to get better at it. Thank you.
        Thank you, Madam Chair.
        Senator Hirono. Senator Kaine.
        Senator Kaine. Thank you, Chair Hirono. Ms. Maurer, I have
    a couple of questions for you. In your prepared testimony you
    talk about the GAO finding that the average condition of
    facilities at the four public shipyards improved at three of
    the four from 2016 to 2020. I would be remiss if I did not
    notice that the one that did not improve, and actually got
    worse, was the Norfolk Naval Shipyard. Explain the GAO's
    finding in that regard.
        Ms. Maurer. Sure. Thank you, Senator. So we were reporting
    and summarizing information that is collected at all the public
    shipyards by the Navy, and you are absolutely right, Norfolk
    was one of the four where conditions had actually worsened a
    bit over the course of a 3-year period. Some of that was no
    doubt related to just the sheer age of the facility, both in
    terms of the facilities as well as some of the equipment. Some
    of it may have been related to a change in some of the
    methodologies that the Navy is using to assess facility
    conditions. That may have been part of it as well.
        Big picture, all four of the public shipyards are still
    rated as poor in terms of overall facility conditions, and we
    remain gravely concerned about that.
        Senator Kaine. The GAO issued a report yesterday, and your
    team's work found that applying leading practices and more
    transparent reporting could help reduce risks posed by the $1.8
    billion maintenance backlog. Can you talk a little bit about
    the GAO's recommendations to reduce risk associated with that
    backlog?
        Ms. Maurer. Sure. Thank you. Yes. So we did issue a report
    yesterday. We were focused on the amount of backlog which is
    the uncompleted depot level maintenance across the fleet.
    Nearly all of that $1.8 billion was in the surface fleet. Most
    of that was in some of the ships that the Navy has identified
    either previously or currently for decommissioning.
        We made recommendations to encourage the Navy to be more
    transparent about how it collected and reported the information
    on backlog, both internally as well as to the Congress. We also
    felt that the Navy could do a better job of applying best
    practices, of tracking that growth in backlog and assessing its
    progress and whittling it down over the years.
        Senator Kaine. One more question for you, Ms. Maurer. In
    the prepared testimony you said that the GAO had offered nine
    recommendations and the Navy has implemented five of them to
    date. Can you talk a little bit about why the other four have
    not yet been implemented?
        Ms. Maurer. Sure. So definitely want to give Navy credit
    for implementing the five, and those are largely around the
    overall governance around the SIOP effort, so that is a good-
    news story.
        The four that are still open, three are related to cost
    estimation, and that has been, frankly, one of the major
    problems with SIOP from day one. The cost estimates have not
    been on point and they have been, frankly, wildly off point
    from the initial plan that was developed in 2018.
        We are encouraged by what we are hearing today, that the
    Navy is taking better steps to get their arms around that
    problem, but we are going to continue to encourage them to
    fully implement the three recommendations we have on cost
    estimation. The other remaining open recommendation is around
    assessing and tracking overall progress with the SIOP.
        Senator Kaine. Thank you. To the Navy witnesses, talk to us
    a little bit about what you are doing--well, actually, I am
    going to skip. I think that question has been asked by another
    colleague.
        To the Navy witnesses let me ask one thing about pandemic.
    Everything everybody has to do has had to change because of
    COVID, and shipbuilding and the operation of your enterprise
    along with it, and we are not out of it yet. I think we are
    seeing improvement but we are not out of it yet. What pandemic-
    related impacts have you observed as it relates to shipyard
    operations, workforce issues, and supply chain-related
    challenges?
        Vice Admiral Galinis. Yes, Senator, thanks for that
    question. I will take that one. We have seen some impacts
    across the shipyards. I will tell you due really to the men and
    women in our shipyards and the leadership in those shipyards we
    kept every shipyard open every day during the pandemic, and
    they really did a tremendous job.
        That being said, there was impact as the pandemic kind of
    ebbed and flowed across the country. We were able to mitigate
    that to some extent by activating our reserve force that we
    have in each one of the shipyards. That played some tremendous
    benefits. So we activated the reserve force for a period of
    about 9 months or so, really through the worst stages of the
    pandemic, and that really helped us mitigate that.
        I would tell you right now I think we are at a stable work
    environment. We are seeing probably almost near pre-pandemic
    levels in terms of the workforce on site every day inside the
    shipyards. Where we are starting to see some of the impacts is
    in the supply chain, I think, and that has been discussed in
    several different forms, but that is where our biggest impact
    is today, sir.
        Senator Kaine. Thank you, and as I hand back to the chair,
    as I have spent time in shipyards and ship repair facilities in
    Virginia I sort of just ventured a compliment, ``how well you
    are dealing with pandemic, it has got to be hard to rethink
    everything.'' One of the ship repairers reminded me, you have
    got to remember we are an industry that thinks about safety
    first. Not every office puts safety at the beginning, the first
    briefing of every day, and they said this is an industry that
    does it, and so it was maybe easier for us than others to come
    up with the right protocols to continue to do the Nation's work
    and to do it safely. So I applaud our shipbuilders and ship
    repairers, the Navy and our industrial partners for that.
        Madam Chair, I yield back.
        Senator Hirono. Senator Sullivan.
        Senator Sullivan. Thank you, Madam Chair. I want to go back
    to my Yorktown historical moment. So that was a ship that was
    severely damaged in battle and then came to Hawaii, I believe,
    and was very rapidly repaired and then participated,
    decisively, in the Battle of Midway.
        Admiral Galinis and Ms. Mauer, a June 2021 GAO report on
    the Navy's ability to repair battle-damaged ships revealed
    alarming shortcomings. So I want to know how we are addressing
    this contingency. Let us assume we get into a serious naval
    battle with the Chinese, led by the Chinese Communist Party.
    What is our capability to, for example, repair a battle-damaged
    aircraft carrier or a battle-damaged submarine? My
    understanding, from reading the GAO report, is that those ships
    would have to go back to the continental United States for
    repair. Is that true, and are we trying to address many of the
    shortcomings revealed in the 2021 report?
        Admiral, why don't we hear from you first and then Ms.
    Mauer on this question.
        Vice Admiral Galinis. Yes, sir. That is a good question. I
    mean, let me just, for the Committee, right up front, I would
    tell you I feel like we are challenged in that area, and that
    is something our team is working on closely. We have conducted
    a number of different, I will say, exercises, both tabletop
    exercises as well as real-life exercises on battle damage
    repair.
        I will give you just a couple of examples. The Bonhomme
    Richard, I think everybody here knows the story of that. We
    were able to, as we were bringing her around and into the ship
    dismantling yard on the Gulf Coast there we conducted a number
    of exercises where we actually sent teams of Navy repair
    experts onto that ship to go through and conduct battle damage
    assessments and some rudimentary repairs to really start to
    exercise some of that capability.
        For some of our normal repairs, and I will use the USS
    Chancellorsville, which right now is in dock out in Yokosuka,
    Japan, where we are replacing a shaft out there, looking at
    that and thinking about that differently. The initial estimate
    that came in to replace that shaft was in the range of 140 to
    150 days. As we kind of thought our way through that, you know,
    we got that down to 90 days to 100 days or so, just by changing
    our processing and thinking about things different.
        So we are exercising that type of thought process into some
    of our repair, sir, but I will tell you we have still got some
    work to do.
        Senator Sullivan. But is it true right now that at least
    for a nuclear aircraft carrier or submarine that is battle
    damaged the only place for it to be repaired would be a
    shipyard in the continental United States?
        Vice Admiral Galinis. We could do some of that work in
    Yokosuka, Senator. We have got docking facilities and certainly
    a full range of ship repair capability in Yokosuka. Our major
    repair facilities, yes sir, are back here in the United States,
    particularly up in Puget, on the West Coast.
        Senator Sullivan. Ms. Maurer, do you think that the rather
    alarming shortcomings revealed in the 2021 GAO report on this
    topic have been addressed or are they still pretty glaring? I
    am talking about the topic of battle-damaged ship repair,
    quickly, like we did with the Yorktown.
        Ms. Maurer. Thank you, Senator. I think the Navy continues
    to be challenged to do its regularly scheduled maintenance. We
    have done reviews that showed that competing depot-level
    maintenance continues to be significantly delayed far too
    often. In our estimation they would be significantly challenged
    to repair battle-damaged ships as well.
        On the encouraging side, though, we have seen increased
    Navy attention and focus on the recommendations we made in our
    report which were, broadly speaking, to bring some coherence
    and central leadership and focus to the issue of battle damage
    assessment and battle damage repair. That has happened since
    our report so we are encouraged by that. But we are going to
    continue to watch this very, very closely.
        You used the Yorktown example. Obviously, the ships that
    the Navy is using today are much more technologically
    sophisticated than the Yorktown so it creates an even more
    substantial and significant battle damage repair challenge for
    the Navy.
        Senator Sullivan. Great. Thank you.
        Senator Hirono. Senator Scott.
        Senator Scott. Thank you, Chair.
        First of all, I thank all of you for being here. Mr.
    Stefany and Admiral McClelland, thank you for all your hard
    work with regard to shipyards. Do you think we have enough
    shipyards? Are they the right size, adequately equipped? Do you
    think we have the right labor force, and are we where we need
    them?
        Mr. Stefany. Thank you, Senator. I will start with the
    nuclear base, and I would say yes, the four nuclear shipyards
    we have, as augmented by our two private shipyards, are able to
    do nuclear repair work. Newport News and Electric Boat I think
    are sufficient. The SIOP improvements, efficiencies we are
    going to get from SIOP as well as some of the productivity
    improvements to our Naval Sustainment System will provide the
    capacity among those six, the four public shipyards and the two
    private, I believe, to meet the demand going forward.
        On the surface ship side, the private shipyards, again,
    that is an industrial base that fluxes more, but I believe
    again we have the right number of private shipyards for the
    surface ship side as well, sir.
        Senator Scott. How about the labor force?
        Mr. Stefany. Labor force I think we are tapping out in each
    of those regions. We have actually started a couple of pilot
    projects with the Department of Labor, looking at bringing
    skilled workers from other parts of the country into the areas
    where our shipyards are. Because I think each shipyard has a
    really good training program locally but it is not enough to
    support the shipyards in those areas. And I can certainly give
    you a do-back on areas where we are working for developing
    other forces around the country.
        [The information referred to follows:]

        Mr. Stefany. In partnership with OSD, the Navy has piloted
    several defense workforce programs in major maritime centers of
    gravity like Pennsylvania, Virginia, and New England targeted
    at the public shipyard workforce. Some of these efforts will
    involve traditional pipelines back into the academic community,
    while others will provide an accelerated training path specific
    to defense manufacturing skillsets like welding, machining,
    quality assurance, and advanced manufacturing. These workforce
    programs, when combined with organic training and
    apprenticeships at each public shipyard, will support the
    speed, scale, and retention needed to meet the future labor
    demand signal.

        Senator Scott. Admiral McClellan, do you want to add
    anything?
        Rear Admiral McClelland. Yes, sir. I would only mention
    that of course we are considering the future capability that is
    needed for new classes as we are working on the capacity as
    well, and it is really all three of the efforts in SIOP that
    help us relative to the capability and capacity, and that is
    the new dry dock, of course, as well as repaired and restored
    dry docks, as well as recapitalization, new and restored
    buildings, and then the equipment. I think it was mentioned the
    equipment and upgrading the equipment is vital for the ultimate
    capacity of the public shipyard. Sir, all of those are being
    considered in SIOP and thought through accordingly, Senator.
    Thank you for the question.
        Senator Scott. Thanks. As I understand it, Communist China
    is producing about half of all ships built globally. If our
    number one adversary has that kind of market control, does the
    United States and our democratic allies facing long-term risks
    to national security and merchant shipping? If each of you
    could sort of answer that.
        Vice Admiral Galinis. Yes, sir. From a shipbuilding
    capacity perspective, you know, predominantly the shipbuilding
    done here in the United States is military vessels, both on the
    nuclear side as well as the surface side. We have got some good
    capacity in that area, down on the Gulf Coast in particular,
    Newport News and a number of other places, and Virginia, up in
    the Northeast as well. So we have got good capacity, surely not
    near what our competitors have, particularly China. But, you
    know, the capacity we have, I think, is fully utilized right
    now, utilized well.
        Mr. Stefany. I would like to offer that the other
    competitor countries that you mentioned, Senator, have a strong
    commercial shipbuilding that then feeds their military.
    Anything we can do to help expand U.S. commercial shipbuilding
    would be something that we would certainly look favorably upon,
    to help our military shipbuilding.
        Senator Scott. Anybody else?
        Rear Admiral McClelland. Sir, and in SIOP the four public
    shipyards is, of course, focused on the availabilities and the
    depot-level maintenance. I think that works hand-in-hand as we
    improve our efficacy relative to the operational availability
    in SIOP in conjunction with the process improvements. I think
    that will then help overall from a fleet availability, sir.
        Senator Scott. Ms. Maurer?
        Ms. Maurer. Thank you, Senator. From the GAO perspective,
    some of our work has seen some of the tradeoffs that need to be
    made between new ship construction and resources going towards
    maintaining ships. Sometimes those tradeoffs need to be made.
    We already talked a little bit about the workforce challenges.
    I think that is a significant constraint as well. We issued a
    report about 3, 4 years ago that flagged workforce challenges
    facing the entire depot enterprise, not just the public
    shipyards. That continues to be a challenge and an even more
    significant one. It is certainly an issue that would need to be
    addressed, on both the private sector as well as the public
    sector side of the house.
        Senator Scott. Thank you. Thank you, Chair.
        Senator Hirono. Senator Hawley.
        Senator Hawley. Thank you, Madam Chair. Thanks to all the
    witnesses for being here.
        Mr. Stefany, if I could just start with you. A few weeks
    ago Admiral Conn testified to the Committee, and you were here
    for this, that the first and second profiles in the April
    shipbuilding report did not meet or support the operational
    requirements for denying a Chinese assault on Taiwan. Can you
    help me understand why the Navy would include two shipbuilding
    profiles in the plans that do not support the pacing scenario
    and the pacing theater?
        Mr. Stefany. Yes, sir, Senator. I believe the goal of the
    plan was to provide options, different ranges of options, to
    you and to the rest of the Department. One option clearly is if
    we had a fiscally constrained approach what would be the best
    Navy we could have with that fiscally constrained approach. As
    was mentioned by Admiral Conn, that is a very high-risk
    approach so we also then wanted to have the un-fiscally
    constrained approach. So you saw a range there for levels of
    risk to meet the threat.
        Senator Hawley. So let me ask you this. How does the SIOP
    support that third profile in the plan, the one that actually
    will allow us to meet the pacing challenge and the pacing
    theater, Profile 3, I think it is.
        Mr. Stefany. Yes, Profile 3, as you look at the ships that
    we would build in that profile compared to the capacity that we
    are creating through the SIOP program, that those match up,
    that as we look further out into the out years, in the '30s and
    the '40s, the SIOP will enable us to be able to maintain that
    size fleet.
        Senator Hawley. Okay, good. So the SIOP does support that
    third profile.
        Mr. Stefany. Yes, sir, because, frankly, in the submarine
    and in the aircraft carrier world, the profiles are not that
    different, and that small delta the SIOP will support. Yes,
    sir.
        Senator Hawley. Great. Good. Tell me this. Is it accurate,
    Mr. Stefany, that 20 percent of the Navy's fast attack
    submarines are both behind schedule on maintenance and have
    also lost critical dive certifications? Is that right?
        Mr. Stefany. Sir, I would not know the exact number here in
    front of me. I would have to take that for the record, unless
    one of my other witnesses know that number.
        Senator Hawley. Does anybody else know?
        Vice Admiral Galinis. No. I would have to look at that to
    get those numbers.
        Rear Admiral McClelland. No, sir. I do not know.
        [The information referred to follows:]

        Mr. Stefany. At any time, some percentage of attack
    submarines are in depot maintenance or no longer certified to
    conduct submerged operations, typically awaiting induction into
    depot maintenance.
        As of 16 June 2022, there are six fast attack submarines in
    depot maintenance availabilities that are projected to complete
    later than original schedule. This represents 12 percent of the
    fast attack submarine force.
        As of 16 June 2022, there are five fast attack submarines
    awaiting induction into depot maintenance availabilities that
    are no longer certified to conduct submerged operations. This
    represents 10 percent of the fast attack submarine force.

        Senator Hawley. Let me ask you this then, Mr. Stefany. How
    does the Navy plan to overcome the current maintenance and
    certification backlogs? Go ahead, Admiral.
        Vice Admiral Galinis. Yes. So there are three areas that we
    are working on. One is the SIOP piece, with is a
    recapitalization of the yards that we are talking about today.
    The second area is how we operate the shipyards, which is
    through the Naval Sustainment System for the shipyards, that
    Secretary Stefany talked about. That really gets into the
    processes, so that is how we plan the availabilities, how we
    execute the availabilities, how we get material into the yards,
    and really just kind of improving those processes. I tell you,
    we have got some challenges in that area.
        Then the third part really gets to our workforce piece and
    how we train the workforce. And I talked to you a couple of
    times about some of the training programs that we have,
    bringing people in. I will tell you, you know, one of the
    things that we are seeing is as we hire folks, more of a
    challenge in bringing people into the yards that have some
    level of mechanical experience. By this I mean at the
    journeyman or even the apprentice level. We are finding that
    more of the folks are coming in really with little skills and
    we are having to put them through the entire training program,
    and that is something we have continued to work through over
    the last couple of years.
        Back on the Naval Sustainment System piece, just a lot of
    work going in there. Think about the complexity of overhauling
    a nuclear-powered aircraft carrier or a nuclear submarine. You
    know, getting the planning right up front, getting the planning
    done right up front is key to that. And so a lot of focus on
    that.
        Materiel procurement, especially on a Virginia-class, has
    got to improve, and then just basic day-to-day execution inside
    the yards.
        Senator Hawley. Admiral, do you have now the manpower and
    dry docks available to address the current maintenance backlog?
        Vice Admiral Galinis. I do feel like we have the manpower
    available. We have got about 37,000 folks inside our four
    shipyards. That is enough manpower. We need to improve our
    productive capacity inside those yards through the three things
    I just talked about.
        Senator Hawley. Okay. Fair enough. I am just wondering if
    we are having this much trouble right now servicing the current
    submarine force how are we going to maintain the force that the
    Navy hopes to acquire in the coming years?
        Vice Admiral Galinis. So again, improving that productive
    capacity. I think SIOP brings a lot of that. The other thing of
    part of the processes we use and how we manage the shipyards is
    looking for opportunities to outsource some of this work to
    commercial industry, particularly at the component level. I
    think there are more opportunities to do that, that would then
    free up some of the mechanics inside the shipyard to get after
    what we really need them to do, working on the vessels on the
    waterfront there.
        Senator Hawley. Great. Thanks to all the witnesses. Thank
    you, Madam Chair.
        Senator Hirono. Thank you. I am going to take a second
    round of questions, and actually it is a follow-up to Senator
    Hawley's questions about the certification backlog. So that
    means that we are having some challenging in making sure that
    we are repairing and making ready our current ships. I am not
    talking about the new dry dock that has to be built, et cetera.
        Admiral Galinis, you mentioned that these are processes and
    we have workforce issues, et cetera. So are there specific
    things you are doing to address the certification backlog
    problems, some specific things you are doing?
        Vice Admiral Galinis. Yes. Specifically inside the
    shipyards. So I talked about the number of areas that we are
    working on. So on the production workforce, for example,
    waterfront operations, how we manage work day-to-day. So, you
    know, over a shift, over a week, over a month are we getting
    the work completed that we have planned? We are finding that in
    all areas we are not doing that.
        When you start to dig into that, why is that not happening?
    Well, the mechanics do not have the right engineering paper.
    They may not have the right materials. In some cases, you know,
    we talked about the industrial plant equipment. Okay, we may
    not have that fully operational. That slows down work.
        So there are issues in each one of these areas that we have
    got to get after, and there is lot of that that, frankly, is
    under my control to go fix, and we are doing that. We are
    working Admiral McClellan through the SIOP program. We are
    getting out the industrial plant equipment.
        I will tell you another area is the information technology.
    We have not rally talked too much about that. That continues to
    be a challenge inside the shipyards. We have gotten some
    tremendous help from Navy leadership over the last couple of
    months to upgrade some of the computers and the networks going
    to the shipyards.
        So those are the things that we are getting after today to
    improve the productive capacity inside our shipyards.
        Senator Hirono. So in determining how to enable the workers
    to be more efficient in their work do you also question the
    workers? Do you get their input, and od they see that you are
    making changes? Some of the changes may be very simple such as
    locating the equipment closer to where the repair work is being
    done. So are you--I have to assume that you listen to them.
        Vice Admiral Galinis. We absolutely are, ma'am. So a couple
    of ways that we are doing that. Through the process that we
    have right now--and you are familiar with poll surveys, right?
    So we target the workforce for specific things in terms of
    where do they see the barriers? Where do they see the
    roadblocks? Leadership within my organization, and me
    personally getting into the shipyards, down to the waterfront,
    and sitting down in, I will say, small groups of mechanics and
    supervisors, to just kind of have a discussion, talk about what
    this Naval Sustainment System shipyard really is, what we are
    trying to get after, and does it really match with some of the
    challenges that they are seeing day-to-day in the work that
    they are doing? In some cases we are seeing that close lash-up.
    In other cases we are not.
        The other piece that you mentioned I think really is the
    ownership, and we are starting to really see, at the trade
    level, down at the waterfront the supervisors really starting
    to embrace some of the improvement initiatives that we are
    putting in place. That, frankly, is where it really needs to
    start to sustain what we are doing.
        Senator Hirono. I think that is really important. I visited
    our Pearl Harbor Naval Shipyard a number of times and I know it
    means a lot to them to be listened to and to have the changes
    made that will enable them to meet their deadlines.
        Ms. Maurer, I am looking at your 2017 GAO recommendations
    and there were a number of recommendations that were met. But
    there were a bunch of these that have not been met, such as
    include metrics for assessing progress toward meeting each of
    its SIOP goals. It is indicated that that has not been met. Is
    that accurate?
        Ms. Maurer. Yes, that is correct, Senator.
        Senator Hirono. Do they have a ways to go on that point?
        Ms. Maurer. They --
        Senator Hirono. How about include all--I am sorry.
        Ms. Maurer. They still have some work there, yes.
        Senator Hirono. Include all costs such as inflation
    program, office activities, utilities, roads, environmental
    remediation when developing a cost estimate. Has that been
    done?
        Ms. Maurer. That has not been done completely, no.
        Senator Hirono. What about using cost estimate best
    practices and developing a second cost estimate?
        Ms. Maurer. That has not been completed yet either.
        Senator Hirono. And obtain an independent cost estimate of
    the naval shipyard's program prior to the start of project
    prioritization.
        Ms. Maurer. That is something that the Navy says they have
    efforts underway to address, and we will be assessing that as
    part of our new work that starts later this month.
        Senator Hirono. I think they are doing that with regard to
    the dry dock that is being built at Pearl Harbor Naval
    Shipyard.
        Thank you. The other questions I have I will just submit
    for the record.
        Senator Kaine, do you have a second round?
        Senator Kaine. Madam Chair, I just have a couple, but if
    you want to go vote I can handle it from here if you want me
    to.
        Senator Hirono. Please go ahead.
        Senator Kaine. Actually, you know what? I am going to
    submit my second round for the record.
        Senator Hirono. Senator Hawley, did you have a second
    round?
        Senator Hawley. I just have one or two questions, briefly,
    Madam Chair, just on the AUKUS [Australia, United Kingdom, and
    the United States] deal. I think this is for you, Mr. Stefany,
    but anybody. As part of that deal we pledged industrial support
    to our allies, haven't we?
        Mr. Stefany. Yes, Senator. As part of the AUKUS deal we
    will support them out and what exactly we do versus the United
    Kingdom versus Australia is to be determined. But yes, we will
    be supporting that.
        Senator Hawley. Okay. So here is where I am going with
    this. Back to this maintenance issue, given how tight we are on
    maintenance support for our own ships and subs currently, how
    are we going to meet our pledges under the AUKUS deal and do
    what we need to do to clear our own maintenance backlog?
        Mr. Stefany. Yes, sir. The AUKUS effort, frankly, is 15, 20
    years out before those requirements come into fruition, and by
    then that is the period of time that we expect that the SIOP-
    type efforts will have matured for ourselves and provide some
    capacity.
        Senator Hawley. Okay. So in other words, I mean, being able
    to execute on the AUKUS deal, as to these particular terms,
    depends on us really knuckling down here and in this next
    window clearing this backlog and getting up to speed. Is that
    fair to say?
        Mr. Stefany. Both at the private and public yards, yes,
    sir.
        Senator Hawley. Yes. Okay. Thank you, Madam Chair.
        Senator Hirono. I just want to note that when I asked
    series of questions as to whether the GAO's recommendation had
    been met I would ask the Navy witnesses but particular Admiral
    McClellan, who is overseeing SIOP, that you will meet those
    recommendations, unless you disagree with the recommendations.
    So I should ask, do you agree with these recommendations that
    you have not met as yet?
        Rear Admiral McClellan. So, Senator, certainly from a
    lessons-learned perspective many of the item GAO notes are also
    in our lessons learned, and active plans are being developed
    and put in place, and in some instances we will immediately see
    some implementation relative to, as you mentioned, Senator, the
    work out at Pearl Harbor, for example, dry dock and other
    places. So very much are actively leaning forward on the
    recommendations and creating the processes to implement those
    recommendations, Senator, and look forward to doing so.
        Senator Hirono. So as we continue to focus on SIOP I, for
    one, would like to see the Navy meet these other
    recommendations of GAO.
        With that I am going to leave the record open for 5 days
    for additional questions from Members, and with that this
    hearing is closed. Thank you very much.
        [Whereupon, at 3:47 p.m., the Subcommittees adjourned.]

        [Questions for the record with answers supplied follow:]

                  Questions Submitted by Senator Dan Sullivan
                              battle damage repair
        1. Senator Sullivan. Vice Admiral Galinis, a June 2021 Government
    Accountability Office (GAO) report on the Navy's ability to repair
    battle damaged ships revealed alarming shortcomings. How has Shipyard
    Infrastructure Optimization Program (SIOP) addressed some of these
    concerns raised in the GAO report?
        Vice Admiral Galinis. The Shipyard Infrastructure Optimization
    Program (SIOP) is a holistic plan that integrates all infrastructure
    and industrial plant equipment investments at the Navy's four public
    shipyards and contributes to the Navy's ability to repair battle
    damaged ships through improved dry dock capacity and removing
    infrastructure barriers to reliable and efficient execution of
    scheduled depot maintenance. However, battle damage repair is currently
    not a SIOP requirement driver.

        2. Senator Sullivan. Vice Admiral Galinis, can you explain our
    current capability to repair battle damaged nuclear ships while
    simultaneously conducting routine maintenance?
        Vice Admiral Galinis. Under the fixed capacity model, induction of
    a battle damaged ship into any public shipyard's workload would result
    in the deferral of routine maintenance for another ship.
        Public shipyards operate at a fixed capacity, balancing work force
    and workload demand each year. Maintenance requirements must be
    prioritized against each yard's fixed productive capacity, as
    onboarding and training requirements limit the rate at which shipyard
    manning can increase.
        Public shipyards operate at a fixed capacity, balancing work force
    and workload demand each year. Onboarding and training requirements
    limit the rate at which shipyard manning can increase, such that
    maintenance requirements must be prioritized against each yard's fixed
    productive capacity. If a nuclear ship were to be damaged in battle,
    assessments would be made to determine the best option to repair the
    ship as quickly as possible, while balancing fleet maintenance
    requirements to limit readiness gaps. Options to be considered may
    include executing the repair work, whole or in part, in the private
    sector.
        Drydock and material availability further limit our ability to
    simultaneously repair battle damaged ships and conduct routine ship
    maintenance. Though the SIOP is providing some measure of improvement,
    drydock space will continue to be a limited resource for the
    foreseeable future. Material availability also limits the pace at which
    any ship can be maintained and/or repaired.
                  shipyard infrastructure optimization program
        3. Senator Sullivan. Vice Admiral Galinis, a 2017 GAO report noted
    that the facilities maintenance backlog for naval public shipyards had
    grown to $4.865 billion and that the Navy did not have a comprehensive
    plan to address and monitor its infrastructure investments. Following
    this report, the Secretary of the Navy provided a report to Congress
    titled, ``The Shipyard the Nation Needs,'' which provided the framework
    for what is now called the Shipyard Infrastructure Optimization Plan.
    Since these events, the backlog grown to over $7 billion. What course
    corrections need to be made to SIOP to start seeing better results
    regarding this backlog?
        Vice Admiral Galinis. The Navy's SIOP has charted a path to
    stronger outcomes by prioritizing infrastructure investments that
    directly support ship maintenance. The SIOP makes a deliberate effort
    to create and implement long-range investment plans designed to improve
    shipyard productive capacity through improved condition and
    configuration of shipyard infrastructure. Ongoing industrial modeling
    and simulation efforts will provide the ideal configuration of the
    shipyards to improve readiness and maintain the current and future
    fleet. SIOP Area Development Plans (ADPs) will leverage the results of
    modeling and simulation to present long-range shipyard recapitalization
    plans that optimize and improve the shipyard infrastructure while
    minimizing the impact of SIOP implementation on critical shipyard
    operations. ADP implementation at each shipyard will include a mix of
    new construction, restoration/modernization and demolition. As ADP
    implementation progresses, we expect to see a significant reduction in
    the reported backlog and overall improved condition of the shipyards.

        4. Senator Sullivan. Vice Admiral Galinis and Rear Admiral
    McClelland, the GAO report Director Maurer submitted with as a part of
    her testimony for this hearing states, one: ``[t]he backlog of
    restoration and modernization projects intended to restore, renovate,
    or replace buildings or components . . . is now over $7 billion,''
    two,``[t]he costs of SIOP dry dock projects have more than doubled,''
    and three, ``[t]he schedule for SIOP related efforts has slipped by 3
    years.'' Significantly over budget; significantly behind schedule. Why
    has SIOP not made any demonstrable improvements to the status of our
    shipyards?
        Vice Admiral Galinis and Rear Admiral McClelland. The Shipyard
    Infrastructure Optimization Program (SIOP) continues to mature. With
    the tremendous support received from Congress--to include the $1.6
    billion appropriated in fiscal year 2022--the program is advancing
    several initiatives across all three lines of effort--dry dock
    modernization, optimization, and capital equipment. Area Development
    Plans (ADPs) are in development for each public shipyard; the first
    will complete in fiscal year 2022 and the remainder will complete in
    fiscal year 2023 and fiscal year 2024 utilizing the output of the first
    increment of industrial modeling to inform ideal infrastructure
    configuration. In fiscal year 2022, the second increment of industrial
    modeling will commence, which will inform optimal shop floor layouts of
    the shipyard production facilities.
        Additionally, funds will be utilized to begin project design for a
    Gerald R. Ford -class aircraft carrier-capable dry dock at Puget Sound
    Naval Shipyard, to award the construction contract for Dry Dock 8
    saltwater system upgrades at Norfolk Naval Shipyard, to award several
    restoration and modernization projects, and to purchase capital
    equipment to replace aged elements to revitalize maintenance shop
    capabilities. The President's fiscal year 2023 budget submission
    confirms the administration's commitment to the SIOP effort, with $8.3
    billion in funding across the fiscal years 2023 to 2027 Fiscal Year
    Defense Program.
        Notable accomplishments during fiscal year 2022 include:
          The Pearl Harbor Naval Shipyard Dry Dock 3 replacement
    project achieved 90% design milestone.
          The Puget Sound Naval Shipyard new graving dry dock is on
    schedule for fiscal year 2022 design award to support Gerald R. Ford-
    class carrier mission need date.
          Norfolk Naval Shipyard Drive Dock 8 saltwater upgrades on
    schedule for fiscal year 2022 construction award to support Gerald R.
    Ford-class carrier mission need date.
          The successful April 22 docking of USS Cheyenne at
    Portsmouth Naval Shipyard's newly constructed Super Flood Basin in Dry
    Dock (DD) 1. This was the first time in history that a Los Angeles-
    class submarine was safely docked in DD 1 with no additional buoyancy
    assistance nor reliance on a tidal schedule.
                                   __________
                Questions Submitted by Senator Marsha Blackburn
                            covid-19 vaccine mandate
        5. Senator Blackburn. Rear Admiral McClelland, how did the loss of
    highly-skilled and specialized Department of Defense workers due to the
    contractor vaccine mandate immediately impact shipyards?
        Rear Admiral McClelland. The shipyards are experiencing very high
    attrition right now due to a number of factors, to include to the
    vaccine mandate as previously executed. The Navy is working with
    shipyards and regional shipyard associations to develop pipelines for
    the future workforce and to build workforce development programs that
    encourage skilled workers from colleges and the trade schools to join
    the shipyard workforce.
                                 infrastructure
        6. Senator Blackburn. Rear Admiral McClelland, what is the link
    between facility conditions and performance?
        Rear Admiral McClelland. There is a direct link between facility
    conditions and shipyard performance. The need to modernize the four
    naval shipyards has been well documented and was summarized in
    Government Accountability Office (GAO) report 17-548, Naval Shipyards:
    Actions Needed to Improve Poor Conditions that Affect Operations. That
    report stated that partly as a result of poor condition, the shipyards
    have not been fully meeting the Navy's operational needs. Inadequate
    facilities and equipment have resulted in risks to maintenance
    schedules, slower production flow, higher maintenance costs, and
    reliability issues.
        Improvements to facilities conditions and configuration is the
    center-piece of optimization efforts. The Shipyard Infrastructure
    Optimization Program's industrial modeling and simulation efforts will
    provide the ideal configuration of the shipyards to improve readiness
    and maintain the fleet of the future.

        7. Senator Blackburn. Rear Admiral McClelland, to what extent is
    the Navy considering depot maintenance capacity concerning future force
    structure and long-term shipbuilding plans?
        Rear Admiral McClelland. The Department of the Navy (DON)
    recognizes that sustaining the Navy's force structure through the
    maintenance and modernization of its naval vessels is key to meeting
    operational demands and fielding the strongest balance of capabilities.
    The DON has developed a framework to sustain our investments in the
    fleet effectively and efficiently through initiatives and investments
    in the public and private sectors to improve maintenance outcomes. As
    the Navy grows, the pace and volume of maintenance and modernization
    availabilities will increase commensurately. A long-term stable and
    predictable plan is the cornerstone to ensuring a healthy ship repair
    industrial base and the force structure necessary to meet worldwide
    demand for naval forces.
            shipyard infrastructure optimization program management
        8. Senator Blackburn. Ms. Maurer, what recommendations do you have
    for the Navy to improve SIOP management?
        Ms. Maurer. GAO currently has four recommendations that the Navy
    needs to implement related to shipyard improvement efforts. In
    September 2017, GAO recommended that the Navy develop a comprehensive
    plan for shipyard capital investment that established (1) the desired
    goal for the shipyards' condition and capabilities; (2) an estimate of
    the full costs to implement the plan, addressing all relevant
    requirements, external risk factors, and associated planning costs; and
    (3) metrics for assessing progress toward meeting the goal that
    includes measuring the effectiveness of capital investments. \1\ The
    Navy concurred with this recommendation, but as of February 2022, the
    Navy's plan did not include metrics for assessing progress toward
    meeting each of its goals. Navy officials have stated that they intend
    to develop metrics to meet this element during a second phase that will
    be complete in fiscal year 2025.
    ---------------------------------------------------------------------------
        \1\ GAO, Naval Shipyards: Actions Needed to Improve Poor Conditions
    that Affect Operations, GAO-17-548 (Washington, DC: September 12,
    2017).
    ---------------------------------------------------------------------------
        In November 2019, GAO made three additional recommendations
    addressing the Navy's first cost estimate for its Shipyard Improvement
    and Optimization Plan (SIOP). \2\ GAO recommended that the shipyard
    infrastructure optimization program office (PMS 555):
    ---------------------------------------------------------------------------
        \2\ GAO, Naval Shipyards: Key Actions Remain to Improve
    Infrastructure to Better Support Navy Operations, GAO-20-64
    (Washington, DC: November 25, 2019).
    ---------------------------------------------------------------------------
          Include all costs--such as costs for inflation, program
    office activities, utilities, roads, environmental remediation,
    historical preservation, and alternative workspace--when developing its
    second, more detailed, cost estimate.
          Use cost estimating best practices--as outlined in the
    GAO Cost Estimating and Assessment Guide--in developing its second cost
    estimate, including a program baseline, work breakdown structure, a
    description of the methodology and key assumptions, inflation, fully
    addressing risk and uncertainty, and a sensitivity analysis.
          Obtain an independent cost estimate of the Naval
    Shipyards program prior to the start of its project prioritization
    effort.
        Navy officials concurred with all three recommendations and stated
    that they planned to implement them when the program office secured its
    second internal cost estimate, which it expected to occur in fiscal
    year 2022. However, as of March 2022, Navy officials stated that the
    schedule for completion of the second cost estimate has slipped to
    fiscal year 2025. GAO continues to believe that implementing all four
    recommendations will help the Navy improve the accuracy of its funding
    requests and better manage the complex SIOP effort.
        In addition to tracking the status of these recommendations, GAO
    has begun a review of the SIOP cost and schedule estimates, in
    accordance with section 355 of the National Defense Authorization Act
    for Fiscal Year 2022. \3\ Depending on the results of this review, GAO
    may have additional recommendations to improve the Navy's management of
    the SIOP.
    ---------------------------------------------------------------------------
        \3\ Pub. L. No. 117-81 (2021).

        9. Ms. Maurer, what does a successful end to the SIOP look like?
        Ms. Maurer. In its original 2018 report, the Navy cited three major
    areas for shipyard improvement-- dry dock recapitalization, facility
    optimization, and modernized capital equipment. The goal for the dry
    docks was to recover the maintenance availabilities that the Navy would
    be unable to support (due to capacity issues) through 2040. The Navy
    expressed a broad goal for its facility optimization that it should
    ``optimally size, configure, and locate facilities at the four public
    shipyards to best execute current and future mission requirements.''
    \4\ The Navy did not provide any goal for its equipment modernization
    effort. In its most recent update to Congress in April 2022, the Navy
    did not provide new goals for its lines of efforts, but did state that
    it expected future Acquisition Program Baseline (APB) documents for
    each shipyard to establish cost, schedule, and performance measures at
    each yard.
    ---------------------------------------------------------------------------
        \4\ Department of the Navy, Report to Congress: Shipyard
    Infrastructure Optimization Plan (Feb. 2018).
    ---------------------------------------------------------------------------
        GAO has not weighed in on what the Navy's specific dry dock,
    facility, or capital equipment improvement goals should be. Ultimately,
    it will be up to the Navy to develop the business case, including
    identifying acceptable levels of risk, for each respective area.
    However, GAO believes that public shipyards with sufficient capacity,
    facilities, equipment, and layout to ensure the Navy can maintain its
    current and future ships in an efficient and timely manner in peacetime
    and wartime is critically important. In addition, GAO believes that the
    end state should provide the Navy with sufficient flexibility to nimbly
    adapt to future requirements, as the requirements of the Navy fleet are
    constantly changing. The ideal shipyard for today's fleet might not be
    aligned to the ideal shipyard for tomorrow's fleet.
                                   __________
                   Questions Submitted by Senator Josh Hawley
        10. Senator Hawley. Mr. Stefany, is it true that nearly 20 percent
    of the Navy's fast attack submarines are not only behind schedule on
    maintenance, but have also lost critical dive certifications? If not,
    what are the correct figures?
        Mr. Stefany. At any time, some percentage of attack submarines are
    in depot maintenance or no longer certified to conduct submerged
    operations, typically awaiting induction into depot maintenance.
        As of 16 June 2022, there are six fast attack submarines in depot
    maintenance availabilities that are projected to complete later than
    original schedule. This represents 12 percent of the fast attack
    submarine force.
        As of 16 June 2022, there are five fast attack submarines awaiting
    induction into depot maintenance availabilities that are no longer
    certified to conduct submerged operations. This represents 10 percent
    of the fast attack submarine force.

        11. Senator Hawley. Mr. Stefany, would you agree that expanding our
    shipbuilding infrastructure is critical not just to meet peacetime
    production demands, but also the wartime demands placed on the
    industrial base?
        Mr. Stefany. Yes, expanding our shipbuilding infrastructure is
    critical to meeting peacetime production and wartime demand.

        12. Senator Hawley. Mr. Stefany, how will the SIOP help to ensure
    the Marine Corps has access to the platforms it needs--particularly the
    Light Amphibious Warship--to execute concepts like Expeditionary
    Advanced Base Operations?
        Mr. Stefany. SIOP efforts are focused on the modernization of the
    Navy's four public shipyards, which primarily maintain the Navy's in-
    service, nuclear platforms. SIOP will create capability to maintain our
    future nuclear platforms, increase capacity for existing nuclear
    platforms, and modernize towards optimization. SIOP is one of Navy's
    highest strategic recapitalization priorities--a once-in-a-generation
    must-do/must-fund effort. As we learn from the SIOP efforts, those
    lessons will be applied, as applicable, to the maintenance of surface
    ships at our private shipyards.
        Initial sustainment plans for Light Amphibious Warship (LAW) are
    similar to today's in-service, non-nuclear ships which conduct depot
    maintenance primarily in private shipyards. LAW is being developed to
    provide distributed shore-to-shore maneuver, mobility, and sustainment
    for littoral expeditionary forces MOREsuch as Marine Littoral Regiments
    in a contested environment. The Navy appreciates Congress's continued
    support of the private shipbuilding industrial base that will build LAW
    as well as the ship repair industrial base that sustains Navy's non-
    nuclear platforms.

        13. Senator Hawley. Ms. Maurer, according to GAO's work, what was
    the effect of rounds of Base Reduction and Closure in the 1990s and
    2000s on current shipyard capacity?
        Ms. Maurer. The Navy currently has four public shipyards
    responsible for the repair of the Navy's nuclear-powered fleet. In the
    early 1990's, the Base Realignment and Closure (BRAC) commission
    resulted in the closure of five public shipyards.
    Philadelphia Naval Shipyard, Philadelphia, PA (1991 BRAC)
        The Philadelphia Naval Shipyard opened in 1801, and by the 1990's
    had 5 dry docks, 2 of which were large enough to accommodate the Navy's
    aircraft carriers. The yard primarily engaged in ship construction
    until 1970, at which point it began working on ship repair. In 1991,
    the Navy cited falling workload and the end of service-life extensions
    for the non-nuclear powered aircraft carrier program as reasons to
    close the Philadelphia Naval Shipyard. In addition, at the time, it was
    one of the Navy shipyards that could not support repairs to nuclear
    powered ships. The commission noted that keeping Philadelphia open
    could jeopardize the Navy's goal at the time of putting 30 percent of
    its repair work into private yards. However, the commission did
    recommend keeping the shipyard in inactive status to address potential
    emergent requirements. The 1995 BRAC dropped this requirement and
    allowed final closure of the yard. GAO was asked to review the Navy's
    decision, but cited an inability to assess the Navy's closure
    recommendations due to limited documentation. \5\ The Navy closed the
    shipyard in 1996.
    ---------------------------------------------------------------------------
        \5\ GAO, Military Bases: Observations on the Analyses Supporting
    Proposed Closures and Realignments, GAO/NSIAD-91-224 (Washington, D.C.:
    May 15, 1991).
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    Naval Shipyard Hunters Point, San Francisco, CA (1991 BRAC)
        In the 1991 BRAC round, the Navy cited significant encroachment,
    deficient infrastructure, and low closure costs as its rationale to
    close this yard. The closure of the Hunters Point Shipyard was not
    contested by the local community. The Navy had not recently operated
    the shipyard, having leased it to a commercial ship repair company from
    1976 to 1986. Parts of the yard were later designated an EPA Superfund
    site due to contamination. As previously noted, GAO could not review
    the Navy's analysis of shipyard capacity for the 1991 BRAC round,
    because the Navy did not document the information for the decision.
    Naval Shipyard Charleston, Charleston, SC (1993 BRAC)
        In the 1993 BRAC round, the Navy cited excess shipyard capacity,
    along with the ease of shifting its workload to other shipyards, as
    justifications for closing this shipyard. The local community raised
    concerns about the way in which Charleston's excess capacity and
    military value were calculated. Though it closed the shipyard, the
    commission rejected the Navy's plan to close the entire naval base
    outright, instead deciding to retain the use of some Charleston
    facilities to support other commands near or later moved to Charleston.
    In 1993, GAO reported that the Navy recommended closing the Charleston
    Shipyard although it rated higher on military value than shipyards that
    remain open (i.e., Pearl Harbor Shipyard, Hawaii and Portsmouth
    Shipyard, New Hampshire). \6\ For the 1993 BRAC round, the Navy had an
    overarching goal of reducing excess capacity by category of military
    base, such as shipyards. The Navy also wanted to maintain an average
    military value score that was at least as high as all the bases in the
    category. GAO's analysis of the Navy's data showed that the Navy's
    recommended closure of the Charleston Shipyard was based on assumptions
    about its needed capacity to handle an estimated nuclear workload. \7\
    GAO found the Navy's recommendations and assumptions were generally
    sound and well documented.
    ---------------------------------------------------------------------------
        \6\ GAO, Military Bases: Analysis of DOD's Recommendations and
    Selection Process for Closures and Realignments, GAO/NSIAD-93-173
    (Washington, D.C.: April 15, 1993).
        \7\ GAO/NSIAD-93-173.
    ---------------------------------------------------------------------------
    Mare Island Naval Shipyard, Vallejo, CA (1993 BRAC)
        In the 1993 BRAC round, the Navy cited Mare Island's excess
    shipyard capacity, and the lowest West Coast shipyard military value,
    as justification for closing this shipyard. The local community raised
    concerns about the way in which Mare Island's excess capacity and
    military value were calculated. The commission accepted the Navy's
    recommendation. In 1993, GAO reported that the Navy considered the
    closures of the Mare Island Shipyard to meet goals of reducing excess
    shipyard capacity. \8\
    ---------------------------------------------------------------------------
        \8\ GAO/NSIAD-93-173.
    ---------------------------------------------------------------------------
    Naval Shipyard Long Beach, Long Beach, CA (1995 BRAC)
        The Navy considered closing the Long Beach Shipyard in multiple
    BRAC rounds. In 1991, Long Beach was one of the shipyards unable to
    conduct nuclear repair work. However, the Navy later approved capital
    improvements to one of its dry docks to make it nuclear capable. In
    1993, the Navy did not recommend to close the Long Beach Shipyard,
    despite demonstrated excess capacity, because of the concern of losing
    the capability to dry dock aircraft carriers on the West Coast.
    However, the Navy recommended its closure in the 1995 BRAC round. The
    community argued that the Navy based its assessment on peacetime
    workload, and the shipyard's large-deck drydocking capacity was needed
    for contingency, mobilization, and future force requirements. The
    commission accepted the Navy's recommendation and noted that while the
    number of large-deck ships had not decreased, the general decrease in
    force structure would allow for flexibility to accommodate unscheduled
    maintenance. In 1995, GAO reported that in reviewing the 1993 and 1995
    military value ratings, Long Beach Shipyard received credit in 1993 for
    overhaul of submarine ships and salvage ships that it did not receive
    credit for in 1995. \9\ However, we found that this did not change the
    shipyard's relative military value ranking in 1995. We also reported
    that the Navy did not share the concerns of losing depot capability on
    the West Coast with the shipyard's closure, because the workload would
    be done at private shipyards.
    ---------------------------------------------------------------------------
        \9\ GAO, Military Bases: Analysis of DOD's 1995 Process and
    Recommendations for Closure and Realignment, GAO/NSIAD-95-133
    (Washington, D.C.: April 14, 1995).
    ---------------------------------------------------------------------------
        GAO has not assessed the extent to which those shipyards--as they
    existed in the early 1990's --would be able to support the current
    mission of the Navy's public shipyards, which is primarily focused on
    conducting repairs to the Navy's nuclear-powered submarines and
    carriers.

        14. Senator Hawley. Mr. Stefany, the USS Boise has not been on
    patrol in seven years and I am hearing it may be decommissioned ahead
    of schedule. Why would we decommission the ship, with so much of its
    remaining reactor life?
        Mr. Stefany. The Navy does not intend to decommission the USS Boise
    which is executing an Early Production Period to be followed by an
    Engineering Overhaul.